Tarr v Sutcliffe - [2018] NZSC 66

IN THE SUPREME COURT OF NEW ZEALAND

I TE KŌTI MANA NUI

SC 46/2018
[2018] NZSC 66

BETWEEN	PHILIP CLAUDE TARR Applicant
AND	DOUGLAS JOHN SUTCLIFFE First Respondent
AND	TERENCE SUTCLIFFE AND BRADEN MATSON AS PARTNERS OF FROST & SUTCLIFFE LAWYERS Second Respondent

Court:	William Young, Glazebrook and Ellen France JJ
Counsel:	P C Creagh and I B Kwan-Parsons for Applicant P J L Hunt and J Heard for Respondents
Judgment:	31 July 2018

JUDGMENT OF THE COURT

A The application for leave to appeal is dismissed.
B Costs of $2,500 are awarded to the respondents.

____________________________________________________________________

REASONS

Background

Mr and Mrs Tarr married on 31 March 1979 and separated on 13 April 1993. Their relationship property issues were only decided in 2013, coming before the Court some 20 years after separation.[1]
[1]Tarr v Tarr [2013] NZFC 8921 (Judge de Jong) [Family Court judgment] at [1].
During their marriage, Mr and Mrs Tarr purchased three properties funded by bank loans. It was common ground that these properties were relationship property.
Some three years after separation Mrs Tarr wished to purchase another property, to be totally financed by the Bank of New Zealand. The bank required this property to be purchased jointly and each party to sign personal guarantees secured over all properties owned by Mr and Mrs Tarr.
A company, Great Empire Ltd (GEL), was formed to purchase the property and each party was issued with an equal number of shares. The purchase was completed and the loan drawn down on 27 February 1996. The next day the parties signed a share transfer (Mr Tarr as transferor and Mrs Tarr as transferee) said to be pursuant to a declaration of trust. There was no separate declaration of trust. The share transfer was not registered until October 2010.
In the Family Court, it was held that the shares in GEL held by Mr Tarr were always meant to be held on trust for Mrs Tarr and were not relationship property.[2] That decision was upheld by the High Court.[3]
[2]At [26]–[28].
[3]Tarr v Tarr [2014] NZHC 1450 (Thomas J) [High Court appeal judgment] at [27]–[35].
The allegation by Mr Tarr that he had signed a blank share transfer on 28 February 1996 which had later been filled out was rejected by both Courts.[4] That the share transfer was part of some “pre-nup/contracting out” transaction was also rejected by the Family Court.[5]
[4]Family Court judgment, above n 1, at [28(d)]; and High Court appeal judgment, above n 3, at [33].
[5]At [28(e)].
In 2016 Mr Tarr issued proceedings against the respondents,[6] alleging that Mr Sutcliffe exerted undue influence on Mr Tarr to sign a blank share transfer used to deprive Mr Tarr of beneficial ownership of half of the shares in GEL. Alternatively, it was alleged that there was a breach of fiduciary duty which again allegedly deprived Mr Tarr of beneficial ownership of a half share in GEL. It is maintained that Mr Tarr believed the share transfer was so…

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 Tarr v Sutcliffe

Details

AGLC: Tarr v Sutcliffe [2018] NZSC 66
Case: [2018] NZSC 66
Decision Date: 31 July 2018

CaseChat Overview and Summary

In the Supreme Court of New Zealand, Philip Tarr sought leave to appeal against the Court of Appeal’s decision to dismiss his appeal against the summary judgment granted to Douglas Sutcliffe. The case involved a dispute over the ownership of shares in Great Empire Ltd, which was founded to purchase a property jointly with Tarr and his then-wife. The Court of Appeal had held that Tarr’s claim was an abuse of process, as it required a challenge to the findings of the Family Court and the High Court that Tarr never had a beneficial interest in the shares. Tarr argued that his current claim did not depend on him having beneficial ownership of the shares, but the Supreme Court declined to address this argument as it had not been advanced in the Courts below.

The legal issue before the Supreme Court was whether the claim was an abuse of process and if the application for leave to appeal should be dismissed. The Court of Appeal had already ruled that the claim was an abuse of process as it required a challenge to the findings of the Family Court and the High Court that Tarr never had a beneficial interest in the shares. The Supreme Court considered whether Tarr’s new argument, which did not depend on him having beneficial ownership of the shares, should be addressed. However, the Court decided that it would not be appropriate to address this argument on a second appeal, as it had not been advanced in the Courts below.

The Supreme Court dismissed the application for leave to appeal and awarded costs of $2,500 to the respondents. The Court found that the claim was an abuse of process and that Tarr’s new argument, which had not been advanced in the Courts below, should not be addressed on a second appeal. The Court of Appeal’s decision was upheld, and Tarr’s application for leave to appeal was dismissed. The final orders of the Court were that the application for leave to appeal is dismissed and that costs of $2,500 are awarded to the respondents.

Orders