Smith v Ball - [2020] NZHC 3485

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-2268

[2020] NZHC 3485

IN THE MATTER of the Estate of RAYMOND ALEXANDER SMITH

BETWEEN

SAHRA LING SMITH

Plaintiff

AND

ROGER NEVILLE BALL

First Defendant

CRYSTAL MINT DEVELOPMENTS LIMITED

Second Defendant

CRYSTAL MINT LIMITED

Third Defendant

Hearing: On the papers

Counsel:

K P McDonald and N Percy for the Plaintiff

Judgment:

21 December 2020

JUDGMENT OF GORDON J

This judgment was delivered by me
on 21 December 2020 at 4.30 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors: Kevin McDonald & Associates, Auckland

SMITH v BALL [2020] NZHC 3485 [21 December 2020]

[1] In my judgment of 8 May 2020, I ordered an inquiry to be undertaken into the rental income received by the second defendant, Crystal Mint Developments Ltd (CMDL) for the residential properties at 3, 4 and 5/38 Dominion Street, Takapuna.1 This order followed from my finding that CMDL, as the registered proprietor of those three properties, held them on trust for the plaintiff, Sahra Smith. The three properties had been owned by Ms Smith’s father (since deceased) who had transferred them to CMDL. Ms Smith was the sole beneficiary of her father’s estate.

[2] I noted in my judgment that in his oral submissions at the substantive hearing, Mr McDonald, for Ms Smith, had referred to both the further delay and cost that would result if that order were to be made.2 He did not however abandon Ms Smith’s application for the order. The order was therefore made. But given Mr McDonald’s submission I directed him to file and serve a memorandum advising whether Ms Smith did in fact seek to implement the order. Mr McDonald confirmed that Ms Smith wished to proceed with the inquiry into rental income.

[3] In a subsequent telephone conference on 27 August 2020, attended by Mr McDonald for Ms Smith and Mr Ball, for all defendants, I indicated the orders I was minded to make regarding the process for the inquiry into rental income and I heard from each of them in response.

[4] The directions I made included the appointment of Mr Andrew Hill of BDO New Zealand Ltd to take an account of the rental income due to Ms Smith from CMDL for 3 and 4/38 Dominion Street (the properties).3 The inquiry was to establish the net rental income due to Ms Smith from CMDL from the commencement of the 2010 financial year to the end of the 2020 financial year. Ms Smith agreed with the gross rental income in CMDL’s financial statements for the 2010 to 2018 financial years. She also agreed with the expenses listed in the financial statements for those years, other than the expenses listed in the schedule annexed to this judgment. The inquiry was to address those disputed expenses and the other issues listed in the schedule, and reach a view on the net income due to Ms Smith.

1

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 Smith v Ball

Details

AGLC: Smith v Ball [2020] NZHC 3485
Case: [2020] NZHC 3485
Decision Date: 21 December 2020

CaseChat Overview and Summary

In the High Court of New Zealand, Gordon J was tasked with resolving a dispute between Sahra Ling Smith and several defendants, including Roger Neville Ball and Crystal Mint Developments Limited (CMDL). The central issue was whether CMDL, as the registered proprietor of residential properties at 3, 4 and 5/38 Dominion Street, Takapuna, held them on trust for Ms Smith. Following an earlier judgment that the properties were held on trust for Ms Smith, Gordon J ordered an inquiry into the rental income received by CMDL for these properties. The court was required to determine whether certain expenses claimed by CMDL were legitimate and related to the renting of the properties, as well as to establish the net rental income due to Ms Smith from CMDL from the commencement of the 2010 financial year to the end of the 2020 financial year. Gordon J found that CMDL failed to pay security for costs for the rental inquiry and, as a consequence, the inquiry was unable to proceed. Instead, the court determined the rental inquiry on a formal proof basis on the papers. The court rejected several claimed expenses as not relating to the renting of the properties, including rates and legal expenses. The court also found that the rental income recorded for FY 2019 did not reflect the actual rent received for the properties. After considering the evidence, Gordon J concluded that the total surplus CMDL earned from renting the properties from FY 2010 to FY 2020 was $110,927, of which $73,312.82 was owed to Ms Smith. As a result, the court ordered CMDL to pay Ms Smith the sum of $73,312.82 for unpaid net rental, plus simple interest.

Orders