Whimp v Dugdale - [2023] NZHC 2018

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

I TE KŌTI MATUA O AOTEAROA WHANGĀREI-TERENGA-PARĀOA ROHE

CIV 2022-488-63

[2023] NZHC 2018

BETWEEN
GARRY CECIL WHIMP

First Plaintiff

FOREX TECHNICAL ANALYST SYSTEMS LIMITED (IN LIQUIDATION)
Second Plaintiff

AND

KENNETH RODNEY PEEL DUGDALE, LINDA YVONNE DUGDALE and JOHN MURU WALTERS

First Defendants

KENNETH RODNEY PEEL DUGDALE

Second Defendant

Hearing: 31 May 2023

Appearances:

S O McAnally and A Ho for the plaintiffs

B Molloy and O Rose for Mrs and Mr Dugdale H Waalkens KC and M Francis for Mr Walters

Judgment:

31 July 2023

JUDGMENT OF CAMPBELL J

This judgment was delivered by me on 31 July 2023 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

WHIMP AND ANOR v DUGDALE AND OTHERS [2023] NZHC 2018 [31 July 2023]

Introduction

[1] The defendants own a property in Mangawhai. On 2 September 2022, this Court made an interim injunction prohibiting the sale or other disposition of the property and an interim order prohibiting reducing the defendants’ equity in the property.

[2] The defendants refinanced the property on 22 December 2022. The refinance reduced the defendants’ equity in the property. The defendants did so without telling the plaintiffs and without obtaining a variation of the Court order.

[3] The plaintiffs apply for orders, under the Contempt of Court Act 2019, that the defendants be held in contempt of court, that the defendants’ property be sequestered until the contempt is purged, and that the defendants pay a fine. The defendants oppose. They say they remedied their breach of the order, they did not knowingly fail to comply with the order, and in any case the Court should exercise its discretion not to impose a fine or make a sequestration order.

[4]The issues I have to determine are:

(a)Did the defendants remedy their breach of the order?

(b)If so, is that a complete answer to the plaintiffs’ application?

(c)If not, did the defendants knowingly fail to comply with the order?

(d)Should the Court exercise its discretion to impose a fine or make a sequestration order?

Background

The substantive proceeding

[5] The second plaintiff, Forex Technical Analyst Systems Ltd (Forex), built residential properties in Northland and North Auckland. Forex’s sole director and

shareholder was and is Kenneth Dugdale. Mr Dugdale is the first-named first defendant and the second defendant.

[6] Mr Dugdale is also a former trustee of the Eternal Trust, which he describes as a “family trust”. The trustees of the Eternal Trust own the Mangawhai property that is the focus of this proceeding.

[7] The other trustees of the Eternal Trust are Karen Dugdale and John Walters, the other first defendants. Mr and Mrs Dugdale are husband and wife. Mr Walters is a solicitor who was admitted in 1981. He has practised for 43 years. He says he was appointed as a “professional trustee” of the Eternal Trust.

[8] In November 2020, Mr Dugdale arranged for Forex to build a home on the Mangawhai property.…

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 Whimp v Dugdale

Details

AGLC: Whimp v Dugdale [2023] NZHC 2018
Case: [2023] NZHC 2018
Decision Date: 31 July 2023

CaseChat Overview and Summary

In Whimp v Dugdale, the court was required to decide whether the defendants had remedied their breach of an interim order, whether they had knowingly failed to comply with the order, and whether the court should exercise its discretion to impose a fine or make a sequestration order. The defendants had refinanced a property in breach of an interim order that prohibited reducing their equity in the property. They arranged for $103,080.45 to be held by their solicitors, equivalent to the amount by which they say the refinancing reduced their equity. The court found that the obligation to United Timber was secured against the property, and the refinancing reduced the defendants' equity by $103,080.45. The court held that the defendants had remedied their breach, and the plaintiffs had successfully enforced the order by requesting the payment into a trust account. Therefore, the court did not need to address whether the defendants had knowingly failed to comply with the order. However, the court found that Mr Dugdale had knowingly breached the order, while there was a reasonable doubt that Mrs Dugdale had knowingly failed to comply with the order. The court declined the plaintiffs' application for orders under the Contempt of Court Act 2019.

The final orders were as follows: The plaintiffs' application is declined. The parties are to file brief memoranda on costs if they cannot agree on the costs. The provisional view is that all defendants should pay costs to the plaintiffs on at least a 2B basis, with allowance for second counsel.

Orders