Smith v Penney

[2014] NZHC 1850

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-003064 [2014] NZHC 1850

BETWEEN

NIGEL PHILIP SMITH (in his capacity as

trustee of the MARIA CHARLES FAMILY TRUST)

Plaintiff

AND

STEPHEN CHARLES PENNEY First Defendant

DONNA MARIA SIMUNOVICH Second Defendant

Hearing:	6 August 2014
Counsel:	F Whyte for Plaintiff First Defendant in person SE McCabe for Second Defendant
Judgment:	6 August 2014

JUDGMENT OF ASHER J

Solicitors/Counsel: LeeSalmonLong, Auckland. Martelli McKegg, Auckland. SE McCabe, Auckland.

Copy to:

First Defendant.

SMITH v PENNEY [2014] NZHC 1850 [6 August 2014]

[1]     The first defendant, Stephen Penney, and the second defendant, Donna Simunovich, were married on 16 February 1997.  They separated in July 2008 some six years ago.  While their marriage was dissolved on 7 December 2010 and they entered into a matrimonial property agreement on 28 September 2011, regrettably the issues between them are still not resolved.

[2]      This current proceeding was filed on 4 June 2013.  The then-trustee of the family trust, known as Maria Charles Family Trust (the Trust), sought directions in relation  to  rental  income  from  properties  owned  by the Trust,  and  which  were referred to in the matrimonial property agreement. There were orders sought seeking further information from the first defendant and an order for the substitution of trustees.

[3]      The proceeding already has something of a history.   The orders that the plaintiff,  Nigel  Smith,  sought  were  made  by  Associate  Judge  Christiansen  on

8 August 2013, and in a reserved judgment of 12 November 2013 an application to set aside or vary that judgment was dismissed by Wylie J.1   In a separate judgment, Wylie J also made an order appointing new independent trustees.2

[4]      This  particular  application  is  brought  by  one  of  the  original  trustees, Mr Smith.  He seeks an order substituting the new independent trustees as plaintiffs. The orders sought are as follows:

(a)      Substituting Nole Ronald Irvine and Michael Taylor, as trustees of the trust, for Nigel Philip Smith, as trustee of the Trust, as the plaintiffs in this proceeding;

(b)Requiring  the  first  defendant  to  deliver  up  to  the  applicants  and second defendant all records of payment of money to the first defendant from property of the Trust, as required by the orders of Associate Judge Christiansen made on 8 August 2013, within five

working days; and

1      Smith v Penney [2013] NZHC 2988.

2      Smith v Penney [2013] NZHC 2727.

(c)       Requiring the first defendant to provide a sworn affidavit:

(i)       confirming that all relevant records have been provided;

(ii)providing a reconciliation and details of all sums received by the first defendant that he is required to pay to the trust;

(iii)confirming that he has paid to the trust all sums he is required by the orders to pay to the trust; and

(iv)     addressing the questions set out in [14] of the affidavit of Nole

Ronald Irvine filed with this application. within five working days of the date of the order.

[5]      I have heard from Mr Whyte for the plaintiff, Ms McCabe for the second defendant Ms Simunovich, and Mr Penney in person (he is no longer represented). The sworn affidavit is to be provided by Wednesday, 13 August 2014.

[6]      In relation to (b) Mr Penney says he has provided those records.  The trustees acknowledge that they have received records over the last few days.  It may be that Mr Penney has met his obligation under (b).  However, the trustees have not been able to go through all the material provided so their position at this point is not known.   If those records have been provided and the trustees are not seeking any more, the trustees should notify Mr Penney of this and he needs to do nothing more in relation to (b).  If, on the other hand, there are still further records sought, a letter should be sent advising Mr Penney of this.  It would reasonable for the trustees to send any such notification to Mr Penney in relation to (b) by Wednesday, 13 August

2014.

[7]      Mr Penney had filed a memorandum setting out his position.   He does not accept that one of the trustees is independent and considers that he has provided the information that was sought.  However, it became clear in the course of what he was saying in court that he did not resist the change in the names of the plaintiff to reflect the order of change in trustees, and that to save time he did not object to orders being

made that he disclose certain material, even though in his view that had already been disclosed.  He indicated that to move things forward he would get together with his accountant Mr Heaps, and instruct a lawyer and file an affidavit responding to any orders that were made in terms of the application.

[8]      It was his strong submission that the issues between him and Ms Simunovich had to be resolved promptly and he was prepared to accede to any determination resolving matters between them.   Further delay was most disadvantageous both personally and in terms of business interests.

[9]      Ms  McCabe  on  behalf  of  Ms  Simunovich  did  not  disagree  with  that sentiment.  She says it is here client’s wish that now some six years since separation, to have all matters finally resolved.

[10]     I am prepared to make the order substituting Nole Irvine and Michael Taylor as plaintiffs, as this follows from the change in trustees.  I am prepared to make the orders seeking further information as set out in paragraph (b) and (c) of the application, as there can be no doubt that the parties are all entitled to have that information.   I do not ignore Mr Penney’s submission to me that in fact all the information sought has been provided.  However, he takes a sensible position that to ensure matters move forward he does actively oppose directions requiring him to provide  this  further  information.   As  I have  said  he  will  get  together  with  his accountant  Mr  Heaps  and  a  lawyer  and  provide  the  necessary  information, Mr Penney believes he can do so within a matter of days.

[11]     I am satisfied that therefore orders (a), (b) and (c) of paragraph 1 of the application should be made and I order accordingly.

[12]     I also refer this case to the List Judge with a recommendation that if possible a settlement conference be allocated.  The parties have already been through a round of mediation and have already entered into a matrimonial property agreement.  The difficulty clearly has been in resolving the details of payments made in the past and what a fair solution is today.  It is the sort of issue that should be able to be resolved around the table.

[13]     If there is to be a settlement conference, and I recommend that there should be, time needs to be allowed for the information to be provided and assimilated and time must also be set aside to enable the offer that the trustees have said they will make to be considered.  The trustees have indicated that they will make a proposal to the parties on or before 20 August 2014.  The settlement conference therefore should be after 1 September 2014 (so time is allowed for the consideration of the offer and for discussion).

Costs

[14]     The plaintiff  has  been  successful  in  obtaining these orders and  therefore argues that costs should follow the event in the usual way.   However, I note that Mr Penney is now representing himself.  He did not file a notice of opposition, and his memorandum, although it was late in coming, was not unconstructive.  He has been constructive through this hearing today and progress is being made.

[15]     In the circumstances I am not prepared to make an order for costs on the hearing today.

[16]     Costs are reserved and will be costs in the cause.

……………………………..

Asher J