Thompson v Bradley

[2016] NZHC 1502

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

CIV-2015-441-093 [2016] NZHC 1502

BETWEEN

SHELLEY MARIE THOMPSON AND

RANGITAUIRA WAYNE DAVIS Plaintiffs

AND

DONALD BRADLEY AND NAPIER INDEPENDENT TRUSTEES LIMITED Defendants

On the Papers
Counsel:	E Bate for the Plaintiffs P Ross for the Defendants
Judgment:	4 July 2016

JUDGMENT OF ASSOCIATE JUDGE SMITH

[1]      On 6 May 2016 I gave judgment on the plaintiffs’ application for summary judgment against the defendants.   I entered judgment for the sum of $309,503.51, being the balance of the principal sum owing under a Deed of Acknowledgement of Debt.  I also entered judgment for part of the interest claimed, costs on a 2B basis, and disbursements as fixed by the Registrar.   I directed that the balance of the plaintiffs’ claim for interest should go forward for trial in the ordinary way.

[2]      Neither party has filed an appeal against the judgment dated 6 May 2016, but by  memorandum  dated  18  May  2016  the  plaintiffs  have  applied  for  an  order recalling the judgment.

[3]      By Minute dated 26 May 2016 I directed that the defendants were to file any memorandum in response to the plaintiffs’ memorandum dated 18 May 2016, by

2 June 2016.  No memorandum in response has been filed by the defendants.

SHELLEY MARIE THOMPSON AND RANGITAUIRA WAYNE DAVIS v DONALD BRADLEY AND NAPIER INDEPENDENT TRUSTEES LIMITED [2016] NZHC 1502 [4 July 2016]

[4]      The plaintiffs raise two matters which they say justify recall of the judgment. First, they submit that I omitted to address the following orders they had sought in their statement of claim and in their application for summary judgment:

F.An order that the defendants sign a mortgage and an Authority and Instruction form, using the forms annexed “D” to the affidavit of S M Thompson.

G.  An order that the Registrar may sign the forms in F if the defendants do not do so.

[5]      Secondly, the plaintiffs seek recall of that part of the judgment where I said:

[57]      I accept that the effect of cl 6 is that the defendants’ liability cannot exceed the assets of the Trust.  Taking into account the January 2015 appraisal, and allowing for costs and commission on a sale of the property, it seems possible that the plaintiffs’ claim, with interest and costs, will exceed the net proceeds of a sale of the property, and will also exceed the Trust’s total assets (given the purpose for which the Trust  was  created,  and  the  extent  of  the  borrowing  from  the plaintiffs, it seems unlikely that the Trust would have any significant assets other than the property).   There is insufficient evidence to form a view on that.  In those circumstances I think the appropriate course is to enter judgment for the plaintiffs for the Principal Sum and costs, and for the first year of interest which they have claimed. The plaintiffs’ remaining claims for interest will have to go forward to trial. If the defendants continue to rely on cl 6, evidence will have to be produced at trial of the extent of the Trust’s assets (of course if the plaintiffs elect to enforce this judgment against the property, the value of at least that Trust asset may be known before the plaintiffs’ remaining interest claims are heard).

[6]      The judgment contained a consequential order at para [63] in which I refused to enter summary judgment for interest in respect of the period after 31 March 2014.

[7]      Mr Bate submits that the focus of submissions and argument at the hearing of the summary judgment application was not directed to the issue decided at para [57] of the judgment (set out above).  He submits that counsel failed to direct the Court’s attention to the relevant precedents on the issue.  This issue was whether the amount of the judgment should be limited to the anticipated assets of the defendant Trust. He submits that para [57] of the judgment should be amended by entering judgment for the full amount owed, but with enforcement limited to the assets of the Trust held by the Trustees.

[8]      In respect of the application for an order that the defendants sign a mortgage in a particular form, and that the Registrar may sign the forms if the defendants do not do so, I accept the plaintiffs’ submission that that part of their application was not dealt with in my judgment given on 6 May 2016.  I further accept their submission that one of the bases on which the Court may recall a judgment is where a matter

which was clearly before the Court has not been determined in the judgment.1

[9]      The  judgment  will  accordingly  be  recalled  to  address  the  plaintiffs’ application for an order that the defendants sign the mortgage forms (or if they fail to do so that the Registrar sign the forms on the defendants’ behalf).   A re-issued judgment, addressing that part of the plaintiffs’ summary judgment application, will be delivered contemporaneously with this judgment.

[10]     I am also satisfied that there is a proper basis for recalling the judgment for the purpose of amending the conclusions reached at para [57] of the judgment (and reflected in the order declining to enter summary judgment for interest in respect of all periods after 31 March 2014).

[11]     First, counsel did not draw to my attention certain precedents which I think were clearly relevant, and that is one of the recognised bases for a Judge to recall a judgment.2    Secondly, I think there could be a risk of injustice to the defendants if those precedents are not considered.   Briefly, an issue of possible injustice might arise if the value of the property were to fall between the date of the judgment and the date of execution,  leaving the defendants  personally liable  for any shortfall

between the net proceeds of sale of the property and the amount for which judgment has been entered against the defendants.   Making the defendants liable for such shortfall would arguable be contrary to the express provisions of cl 6.1 of the Deed. Thirdly, it will be apparent from that consideration that the recall (sought by the

plaintiffs) may be of real benefit to the defendants.

1      Brake v Boote (1991) 4 PRNZ 86 (HC).

2      Horowhenua County v Nash (No 2) [1968] NZLR 632, and Rainbow Corporation Ltd v Ryde

Holdings Ltd (1992) 5 PRNZ 493 (CA).

[12] In combination, I think those considerations provide special reasons for granting the plaintiffs’ recall application in respect of para [57] of the judgment and the consequential orders at para [63].

[13]     The application to recall the judgment dated 6 May 2016 is accordingly granted. A recalled and re-issued judgment is delivered contemporaneously with this judgment.

Associate Judge Smith