Thompson v Thompson

[2013] NZHC 2607

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2013-404-002616 [2013] NZHC 2607

UNDER

the Property (Relationships) Act 1976

BETWEEN

CHRISTINE HAMILTON THOMPSON Appellant

AND

MICHAEL LEITH THOMPSON First Respondent

MICHAEL LEITH THOMPSON, DEAN ALAN ELLWOOD AND BRUCE KENNETH DELL

Second Respondents

Hearing:	On the papers.
Appearances:	A Hinton QC for Appellant Lady D Chambers QC for First Respondent V Bruton for Second Respondents
Judgment:	8 October 2013

JUDGMENT (NO. 2) OF ANDREWS J [(1) Application for leave to appeal]

[(2) Application to extend stay of enforcement of orders]

This judgment is delivered by me on 8 October 2013 at 3:00pm pursuant to r 11.5 of the High Court Rules.

..................................................... Registrar / Deputy Registrar

Solicitors/Counsel:

Simpson Grierson, Auckland – R M Gapes / S Ambler (Appellant) A Hinton QC, Auckland (Appellant)

B Hopkins, Auckland (First Respondent)

Lady D Chambers QC, Auckland (First Respondent)

T G T Legal, Auckland – V Bruton (Second Respondents)

THOMPSON v THOMPSON & ANOR (2) [2013] NZHC 2607 [8 October 2013]

Application for leave to appeal

[1]      On 30 August 2013 I delivered my reserved judgment in respect of Mrs Thompson’s appeal against a judgment of the Family Court, concerning entitlement to a payment for a restraint trade covenant given by Mr Thompson upon the sale of a business established and build up during their marriage.1   I allowed Mrs Thompson’s appeal to the extent that the payment for the restraint of trade did not represent compensation for Mr Thompson’s loss of future earnings, and directed that, should

the parties not be able to agree on the amount, further evidence could be submitted

and a further hearing allocated.  Mrs Thompson’s appeal was otherwise dismissed.2

[2]      On 2 September 2013, Mr Thompson filed an application for leave to appeal to the Court of Appeal, pursuant to s 67 of the Judicature Act 1908.  Mrs Thompson filed an application to cross-appeal, on 16 September 2013.  All parties consent to leave being granted.

[3]      Section 67 of the Judicature Act provides that the judgment of the High Court is final, unless leave is obtained to appeal. The test for granting leave to appeal is set out in the judgment of the Court of Appeal in Waller v Hider:3

The appeal must raise some question of law or fact capable of bona fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the cost of the further appeal. … the guiding principle must be the interests of justice.

(References omitted)

[4]      I  accept that  the test is  satisfied in  this case.    The issues raised in  the applications for leave to appeal and to cross-appeal relate to the classification of restraint of trade payments and business goodwill in the context of the Property (Relationships) Act 1976, the interpretation and application of s 44C of that Act, and the jurisdiction of this Court to direct that further evidence be provided.  Further, the

amount involved ($8 million) indicates that the issue is of importance the parties.

1      Thompson v Thompson [2013] NZHC 2001.

2 At [112].

3      Waller v Hider [1998] 1 NZLR 412 (CA), at 413.

[5]      Accordingly, leave is given for both Mr and Mrs Thompson to appeal and cross-appeal to the Court of Appeal.

Application for extension of stay of enforcement of orders

[6]      On  7  December  2011,  the  Family  Court  made  orders  dealing  with  the division of certain property between Mr and Mrs Thompson, as to which agreement had  been  reached  (“the  consent  orders”).4      Paragraph  5  of  the  consent  orders provided that the net result of the division was that Mrs Thompson was to pay Mr Thompson $2,209,130 on final settlement.

[7]      On 2 August 2013, in an oral judgment given at the end of the appeal hearing, I granted an application made on behalf of Mrs Thompson for a stay of enforcement of the consent orders.5

[8]      By a memorandum dated 27 August 2013, counsel for Mrs Thompson sought an extension of the stay, or a further stay.6   It was submitted that Mrs Thompson had been partially successful in her appeal, as a result of which she may not be required to pay Mr Thompson the amount set out in the consent orders, in whole or in part. A stay was sought until such time as the amount payable by Mr Thompson to Mrs Thompson, in respect of the restraint of trade payment, was determined.  In a Minute

dated 30 August 2013, I granted a stay in the terms sought.

[9]      Counsel for Mr and Mrs Thompson have each filed further submissions in respect of the stay.

[10]    On behalf of Mrs Thompson, Ms Hinton submitted that the Court has jurisdiction to grant a further stay, either in its inherent jurisdiction or pursuant to its power to grant interim relief under r 20.10(2)(c), and that the Court should exercise its  discretion  to  grant  a  stay in  this  case.    She  submitted  that  Mr Thompson’s

entitlement to be paid pursuant to the consent orders is subject to Mrs Thompson’s

4      Thompson v Thompson FC Manukau FAM-2006-092-1674, 7 December 2011.

5      Thompson v Thompson [2013] NZHC 1946, at [14].

6      The judgment on Mrs Thompson’s appeal against the Family Court decision had been released

to counsel and the parties, only, on 26 August 2013.

entitlement to receive the portion of the restraint of trade payment which is determined to be relationship property.

[11]     Ms Hinton submitted that until such time as the apportionment of the restraint of trade payment is determined, it is uncertain who will owe whom money, and in what amount.   She submitted that, in any event, the amount payable by Mrs Thompson to Mr Thompson will not be the amount set out in the consent orders.  In the circumstances, she submitted, it must be appropriate for the stay to continue until such time as the amount payable has been quantified.

[12]     Ms Hinton further submitted that there is no prejudice in a stay being granted. The consent orders allow for interest to be payable at five per cent.  She further submitted that any advantage to Mrs Thompson in being in occupation of the family home is outweighed by the much greater advantage to Mr Thompson in having had the benefit of the full restraint of trade payment since February 2007.  She also submitted that as the parties have agreed a formula for adjustment between them, the respective benefits are irrelevant.

[13]     On behalf of Mr Thompson, Lady Chambers submitted that he ought to be allowed to enjoy the fruits of the consent orders.  She submitted that a stay should not be granted unless refusal to do so would render Mrs Thompson’s appeal rights nugatory.7   In the present case, she submitted, Mrs Thompson’s appeal rights would not be rendered nugatory.  In this respect Lady Chambers referred to the factual findings in my oral judgment of 2 August 2013 (at [12]) that each of Mr and Mrs Thompson had the ability, if required, to make payment to the other.

[14]     Lady Chambers further submitted that Mr Thompson is suffering prejudice as a result of being denied the payment he is entitled to, pursuant to the consent orders, as he is paying interest at ten per cent on borrowed funds, while interest accrues at only five per cent on the amount Mrs Thompson is required to pay him under the consent orders.   Lady Chambers submitted that the detriment Mr Thompson is suffering will continue for many months, while awaiting the final outcome of the

proceeding.

7      Citing Philip Morris (NZ) Ltd v Liggett & Myers Tobacco Co (NZ) Ltd [1997] 2 NZLR 41 (CA).

[15]     I have concluded that the stay should remain in effect until further order of the Court.  I accept Ms Hinton’s submission that there is no certainty how much of the amount set out in the consent orders Mrs Thompson will, in the end, be required to pay.  I also accept that the parties’ respective positions are sufficiently protected by the provision for interest.   Further, as Ms Hinton submitted, any inequality of benefit is addressed by way of the parties’ agreed formula for adjustment.

Result

[16]     The order set out in my Minute of 30 August 2013 is confirmed.  The stay of enforcement of the consent orders is to continue until further order of the Court.

[17]     In my Minute of 5 September 2013 I directed that the Registry allocate a hearing for Mr Thompson’s application for leave to appeal, and to consider the stay issue. A hearing was allocated for 19 December 2013.  Counsel for all parties agreed that the applications for leave to appeal and the application for stay could be dealt

with on the papers. Accordingly, the fixture for 19 December 2013 is vacated.

Andrews J