Smith v Ball

[2020] NZHC 944

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-2268

[2020] NZHC 944

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:

9-13 and 17 March 2020

Appearances:

K P McDonald and N Percy for the Plaintiff

First Defendant on own behalf and on behalf of the Second and Third Defendants

Judgment:

8 May 2020

JUDGMENT OF GORDON J

This judgment was delivered by me on 8 May 2020 at 3 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors:           Kevin McDonald & Associates, Auckland Copy To:  First Defendant

SMITH v BALL [2020] NZHC 944 [8 May 2020]

CONTENTS

Introduction  [1]

Background  [10]

First cause of action – against CMDL: express trust  [53]

Trusts – general legal principles  [57]

Writing requirements for trusts - Property Law Act 1952  [65]

Is there certainty of intention?  [71]
Mr Smith’s letter to his solicitor (7 October 1993)  [71]

Mr Smith’s letter to his solicitor (26 October 1993)  [77]

CMDL’s power of attorney (9 November 1993)  [86]

Option to purchase 38 Dominion Street (undated)  [89]

Mr Smith’s letter to his solicitor (22 November 1993)  [92]
Mr Smith’s letter to Harold Kidd (16 December 1996)  [97]

Mr Smith’s letter to Mr Kidd (30 January 1997)  [100]

Document headed “Remember This” (1 March 2002)  [102]

Document headed “CMD’s Income” (undated)  [104]

Document headed “Routes/methods by which Key gets paid and when

the IRD gets GST” (undated)  [106]

Handwritten file note (undated except for “June”)  [108]

The “road map”  [112]

Meeting of 20 January 2015  [128]

CMDL and Mr Ball as director  [130]

Mr Smith’s conduct  [134]

Lack of commercial rationale for the arrangement  [138]
KCL and CMDL’s financial statements  [139]

Was Mr Smith’s $520,000 vendor loan repaid?  [141]

Certainty of subject matter of trust  [154]

Certainty of objects  [156]

Writing requirements for an express trust  [157]

Conclusion  [161]

Second cause of action - against CML: express trust  [162] Certainty of intention - shares in CMDL  [163] Third cause of action - against CMDL and CML: constructive trust  [170] Presumed or actual common intention  [173]

Property obtained by fraud  [181]

Sixth cause of action - against CMDL: loan by Mr Smith to CMDL of $303,000     [186]

Did CMDL borrow $303,000 from Mr Smith?  [189]

Mr Ball acting under power of attorney?  [202]

Fourth cause of action - against Mr Ball: loan by Mr Smith to Mr Ball of
$303,000  [216]

Seventh cause of action - against CMDL: loan by Mr Smith to CMDL of

$646,500  [219]

Did CMDL borrow $646,500 from Mr Smith?  [221]

Mr Ball acting under power of attorney?  [228] Fifth cause of action - against Mr Ball: loan by Mr Smith to Mr Ball of $646,500 [235] Orders and declarations  [236]

First cause of action  [236]

Costs  [239]

Introduction

[1]    Raymond Smith was the owner of…