Thomas v Thomas - [2015] NZHC 2517

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-001235 [2015] NZHC 2517

BETWEEN
MARGARET MAY THOMAS

Plaintiff/Respondent

AND

MURRAY JAMES THOMAS AND THOMAS BROOK AS TRUSTEES OF THE JAMAY FAMILY TRUST Defendants/Applicants

Hearing: (On the papers)

Counsel:

S Jefferson QC and J Hawker for Plaintiff/Respondent
P Kennelly for Defendants/Applicants

Judgment:

13 October 2015

JUDGMENT OF VENNING J

ON APPLICATION TO WITHDRAW AN ADMISSION

This judgment was delivered by me on 13 October 2015 at 4.45 pm, pursuant to Rule 11.5 of the High
Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors: Wynyard Wood, Auckland
Kennelly Law, Orewa

Copy to: S Jefferson QC, Auckland

THOMAS v THOMAS [2015] NZHC 2517 [13 October 2015]

Application

[1] The defendants apply for leave to withdraw an admission of claim they made in this proceeding.

General and procedural background

[2] In June this year the plaintiff commenced an application for summary judgment against the defendant trustees. The claim was based on a deed of acknowledgement of debt (the deed). Under the deed the trustees acknowledged the trust was in debt to the plaintiff in the sum of $350,000.

[3] The deed also provided for interest to be paid if demanded by the end of

February each year.

[4] The plaintiff subsequently forgave $27,000 leaving a balance due of

$323,000. The plaintiff also demanded payment of one year’s interest of $16,150.

The trustees failed to pay which led to the application for summary judgment.

[5] Prior to the scheduled first call of the summary judgment application on 18

August 2015 the parties reached an agreement. The defendants agreed, inter alia, they would pay the sums demanded (and interest) in exchange for the plaintiff not entering judgment and on the basis the defendants would be given four weeks to pay the agreed amounts.

[6] On the basis of the agreement, which was communicated to the Court by counsel for the plaintiff on 18 August, the matter was adjourned for four weeks to 15
September 2015.

[7] Pursuant to the agreement the defendant trustees paid $339,150 to the

plaintiff’s solicitors (including the $16,150 interest) before the next call.

[8] On 15 September, when the matter came before Asher J, His Honour noted that although the defendants had paid the $339,150 an issue had arisen between the

parties in relation to the plaintiff’s claim for interest at the judicature rate on the total

sum of $339,150 from the issue of proceedings.

[9] The Judge directed the parties to exchange submissions. The matter was adjourned to be revisited on 22 September. Asher J then went on to deal with costs on the application for summary judgment fixing costs on a 2B basis in the plaintiff’s favour.

[10] The day before the matter came back to the Court on 22 September the defendants applied to withdraw the admission of claim on the grounds that:

(a) the interest of $16,150, which they had agreed to pay, was not payable; and

(b)the plaintiff was not entitled to interest under the Judicature Act 1908…

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.

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Details

Case: [2015] NZHC 2517
Decision Date: 13 October 2015

CaseChat Overview and Summary

In the High Court of New Zealand, Margaret May Thomas, the plaintiff, brought a case against Murray James Thomas and Thomas Brook, as trustees of the JaMay Family Trust, the defendants. The case revolved around a deed of acknowledgement of debt, where the trustees acknowledged the trust owed the plaintiff $350,000. The deed also provided for interest to be paid if demanded by the end of February each year. The plaintiff subsequently forgave $27,000, leaving a balance of $323,000 due. The plaintiff also demanded payment of one year's interest of $16,150, which the trustees failed to pay, leading to the application for summary judgment.

The legal issue in this case was whether the defendants could withdraw their admission of claim made in the proceeding. Rule 15.16(2) states that an admission can only be withdrawn with the leave of the Court. The defendants argued that the interest of $16,150, which they had agreed to pay, was not payable and that the plaintiff was not entitled to interest under the Judicature Act 1908 on the total sum claimed.

The Court examined the clause in the acknowledgement of debt, which provided for interest to be payable if demand was made by the last day of February in any year, for the year ending on the next following 31st March. The Court concluded that the interest was payable for the full financial year ending 31 March of that year, as the clear intent of the clause was that if demand was made in February of a particular year, then interest was payable for the full financial year ending 31 March of that year. The Court found that the interpretation raised by the defendants was not reasonably arguable.

The Court also considered other factors, such as the terms of the admission of claim being negotiated between counsel after the issue of these proceedings, and the defendants obtaining the benefit of avoiding judgment for the full sum and a further four-week period to make payment in consideration for entering the admission on the terms required by the plaintiff. Based on these factors, the Court dismissed the defendants' application to withdraw the admission of claim.

The Court awarded costs to the plaintiff on a 2B basis in the sum of $4,906.00, in addition to the costs previously awarded by the Court. The Court did not find the defendants' argument so without merit or justification as to warrant an increased cost award. The defendants' failure to pay the existing costs order did not support an uplift either. If the defendants continue to fail to pay the further interest and cost awards, the plaintiff has her remedies.

Orders