Skelton v Howcroft - [2015] NZHC 1313

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-001897 [2015] NZHC 1313

BETWEEN
BEVIN HALL SKELTON

Plaintiff

AND

CHARLES MICHAEL HOWCROFT Defendant

Hearing: 11 May 2015

Appearances:

Plaintiff in Person
B Cunningham for the Defendant

Judgment:

11 June 2015

JUDGMENT OF ASSOCIATE JUDGE SARGISSON

This judgment was delivered by me on 11 June 2015 at 5.00 p.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date.......................................

Solicitors:

BSA Law, Auckland

B Cunningham, Auckland

BEVIN HALL SKELTON v CHARLES MICHAEL HOWCROFT [2015] NZHC 1313 [11 June 2015]

Summary

[1] Mr Howcroft applies to strike out a claim by Mr Skelton against him. Alternatively, Mr Howcroft seeks an order for costs to be paid or for security for costs and a stay of proceedings until such costs are paid or such security given.

[2] Mr Skelton is suing Mr Howcroft for breach of duties as a trustee of the Bevin Hall Skelton Children’s Trust (the Trust) in relation to a loan for $70,000 which he says was taken out without authority, whose benefit he says the Trust never received, and as a result of which he says the Trust suffered loss. He also sues Mr Howcroft in a second cause of action for breach of fiduciary duties as a partner.

Background facts

[3] This litigation represents another round of litigation which has been generated by the breakdown of the Urban and Country Partnership, a formal partnership of the family trusts of Bevin Hall Skelton (the Royal Oak Trust) and Marie Joan Skelton (the One Tree Trust). That partnership was dissolved by order of the Court on 28 August 2006, and a receiver appointed. By this point, the events of the first cause of action were already in the past.

[4] The partnership held as an asset a half share of an apartment on the Gold Coast. The receiver, Mr Nair, sued Mr Skelton as trustee of the Bevin Hall Skelton Children’s Trust, one of the trusts in the partnership, in order to recover a debt owed to the partnership. That action led to a Judicial Settlement Conference in 2008, at which a written settlement agreement (the Settlement Agreement) was concluded. The agreement involved Mr Skelton, his wife, their respective trusts, Mr Howcroft as trustee of the Bevin Hall Skelton Children’s Trust, and the receiver. One of the terms of the agreement related to the sale of the Skeltons’ half of the apartment to the Howcrofts, who owned the other half share, and that term is now in issue under the second cause of action in this litigation.

First cause of action: breach of duties as trustee

[5] The cause of action for breach of duties as a trustee arises out of a loan contract which was executed by Mr Howcroft on or about 5 September 2005. Under the contract, the Trust would borrow $70,000 from one Charles Henry Bird. The loan attracted interest at 10.5% per annum and penalty interest at 14.5% per annum. Mr Skelton says the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Skelton v Howcroft

Details

AGLC: Skelton v Howcroft [2015] NZHC 1313
Case: [2015] NZHC 1313
Decision Date: 11 June 2015

CaseChat Overview and Summary

The plaintiff, Bevin Hall Skelton, brought an action against the defendant, Charles Michael Howcroft, alleging breach of duties as a trustee of the Bevin Hall Skelton Children’s Trust and breach of fiduciary duties as a partner. Mr Howcroft applied to strike out the claim against him and sought an order for costs to be paid or for security for costs and a stay of proceedings until such costs are paid or such security given. The dispute arose from a loan taken out by Mr Howcroft as trustee of the Trust and the sale of the Skeltons' half share of an apartment to the Howcrofts. Mr Skelton argued that the Trust never received the benefit of the loan and that the sale to the Howcrofts was at an undervalue. Mr Howcroft argued that the claims were time-barred, barred by issue estoppel, and an abuse of process.

The court found that Mr Skelton's first cause of action, breach of duties as a trustee, was barred by issue estoppel due to a final settlement agreement signed by the parties in 2008. Additionally, the claim was statute barred as it was filed nine years and three months after the cause accrued. The court also found that the second cause of action, breach of fiduciary duties as a partner, was barred by limitation as Mr Skelton had not pleaded fraud or mistake that would have prevented him from discovering the claim. The court dismissed the application for strike out, ordered costs to be paid by Mr Skelton, and struck out the security for costs application.

Orders