Smale v Smale - [2023] NZHC 3786

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-001952

[2023] NZHC 3786

BETWEEN
JACQUELINE FAY SMALE and CAZINA TRUSTEE COMPANY LIMITED as

trustees of the Anzac Trust Plaintiffs

AND

JACQUELINE FAY SMALE and MALCOLM PHILLIP LOWE and HYTHE TRUSTEE COMPANY LIMITED as

trustees of the Hythe Family Trust Defendants

Hearing: 13 December 2023

Appearances:

J Turner for the Plaintiffs M King for the Defendants

M Flood for J Smale and the Hythe Family Trust Company Limited as trustees of the Hythe Family Trust

Judgment:

20 December 2023

JUDGMENT OF ASSOCIATE JUDGE GARDINER

This judgment was delivered by me on 20 December 2023 at 4.00 p.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

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

Solicitors:

Dev Law, Auckland
Keegan Alexander, Auckland J Turner, Auckland

SMALE v LOWE & Ors [2023] NZHC 3786 [20 December 2023]

Introduction

[1] Jacqueline Smale and Malcolm Lowe began a de facto relationship in 2013, were married in 2014, and separated in 2022. During their marriage they settled the Hythe Family Trust. The Anzac Trust, settled by Ms Smale’s parents, advanced sums to the Hythe Family Trust in 2014 and 2018 to enable the trust to purchase successive family homes for Ms Smale, Mr Lowe, and their children. The advances, which were repayable on demand and interest free unless demanded, were recorded in Deeds of Acknowledgement of Debt.

[2] After Ms Smale and Mr Lowe separated, the trustees of the Anzac Trust (the Anzac Trustees) demanded that the trustees of the Hythe Family Trust (the Hythe Trustees) pay interest on the debt, and subsequently demanded full repayment. The Hythe Trustees have not repaid the debt.

[3] In a statement of claim dated 16 August 2023, the Anzac Trustees claim judgment against the Hythe Trustees in the sum of $887,966.08, plus interest and costs. The Anzac Trustees apply for summary judgment of their claim.

[4] By consent, and pursuant to directions on 8 November 2023, Mr Lowe was appointed to represent the defendants in their capacity as Hythe Trustees, for the purpose of defending the application for summary judgment.1

[5] The issue to decide is whether the Hythe Trustees have a defence to the Anzac Trustees’ statement of claim because:2

(a)the Deeds of Acknowledgement of Debt are void or unenforceable;

(b)Mr Lowe intends to apply to the Court under s 182 of the Family Protection Act 1980; or

1 Prior to this, on 13 October 2023, Ms Smale and the Hythe Trustee Company Limited as trustees of the Hythe Family Trust filed a memorandum consenting to summary judgment against them in that capacity.
2 In their notice of opposition, the Hythe Trustees raised a further ground, that Ms Smale had failed to obtain directions from the Court as required by s 137 of the Trusts Act 2019. Ms Smale subsequently applied for directions under s 137. Consequently, this ground is abandoned.

(c)the quantum of the debt is disputed.

Background

[6]…

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 Smale v Smale

Details

AGLC: Smale v Smale [2023] NZHC 3786
Case: [2023] NZHC 3786
Decision Date: 20 December 2023

CaseChat Overview and Summary

In the High Court of New Zealand, the Anzac Trustees, acting as trustees of the Anzac Trust, brought an action against the Hythe Trustees, who are trustees of the Hythe Family Trust, for the repayment of loans made to the Hythe Family Trust, plus interest and costs. The Anzac Trustees sought summary judgment against the Hythe Trustees. The court had to determine whether the Hythe Trustees had any defences to the Anzac Trustees' claim. The main issues were whether the Deeds of Acknowledgement of Debt were void or unenforceable, whether there was a potential claim under the Family Protection Act 1980, and whether there was a dispute over the quantum of the debt.

The court found that the Deeds were not void or unenforceable despite the potential conflict of interest of the law firm acting for both parties. Even if there was a breach of fiduciary duty, it did not render the Deeds invalid. The court also found that the Anzac Trustees' intended application under the Family Protection Act 1980 did not present a defence to the Anzac Trustees' claim. The court held that the debt owed by the Hythe Family Trust was not a nuptial settlement and could not be varied under the Act. Finally, the court resolved the dispute over the quantum of the debt in favour of the Anzac Trustees, finding that there was no genuine dispute over the amount owed.

The court granted summary judgment in favour of the Anzac Trustees, ordering the Hythe Trustees to repay the full amount of the debt, plus interest and costs.

Orders