Woodward v Smith - [2015] NZHC 1260

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

CIV-2013-441-381 [2015] NZHC 1260

UNDER
section 66 of the Trustees Act 1956 and Pt

18 of the High Court Rules

IN THE MATTER OF

an application for Trustee Costs Protection and Beneficiary Costs Protection

BETWEEN

ASHLEY ERIC WOODWARD First Plaintiff

ELAINE CORAL WOODWARD Second Plaintiff

AND

JON PHILIP SMITH First Defendant

JON PHILIP SMITH, SHELLEY-LOU SMITH AND JON BOWER DANIEL SMITH

Second Defendants

Hearing: 5 June 2015

Counsel:

J L Bates for Plaintiffs
J O Upton QC for Defendants

Oral
Judgment:

5 June 2015

ORAL JUDGMENT OF THE HON JUSTICE KÓS

[1] In a previous judgment in these proceedings I noted that in one form or another they had taken the better part of a decade.1 That is a decade, and countless cost, wasted. We have had applications for determination as to competency. We have had applications for prospective costs orders. And we have had applications for
rectification of deeds.

1 Woodward v Smith [2014] NZHC 407, [2014] 3 NZLR 525 at [4].

WOODWARD v SMITH [2015] NZHC 1260 [5 June 2015]

[2] All this came to a head in May 2014 in a trial in front of Simon France J. Part way through that trial the parties reached agreement. It was an indicative agreement. But in due course a deed of settlement was tendered to the Court signed by all parties. That deed of settlement was conditional upon the Court granting an order for rectification of a trust deed (which was in due course done) and the Court approving the deed of settlement – bearing in mind the contingent interests of infant beneficiaries. That latter was not clearly done, the Court then indicating that its consent was not required but indicating also that it had “no concerns” with what was proposed.

[3] Unfortunately that arguable qualification to approval resulted in the deed of settlement unravelling. After a period of renegotiation the Woodward interests tendered the Smith interests a new deed of settlement in October 2014. One clause of that new deed of settlement provided for the Smith interests to pay the trustees of the Wanstead Trust the sum of $1.3 million. The Smith interests did not accept that particular clause. Instead they counter-offered a combination of property and cash, said to be to the equivalent $1.3 million value. An email setting out three property/cash options was attached to the deed returned by the Smiths to the Woodwards. Some weeks later, after initially rejecting the property/cash counter- offer, the Woodwards said they would accept one of the three options put forward by the Smiths. At that point the Smiths responded saying that, their counter-offer having being earlier rejected, it was no longer live.

[4] The regrettable consequence of all of this would have been as follows, if the position advanced today by Mr Upton QC on behalf of the Smiths was sustained:

(a) the original deed of settlement arising shortly after the trial in May

2014 was abandoned; and

(b)…

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 Woodward v Smith

Details

AGLC: Woodward v Smith [2015] NZHC 1260
Case: [2015] NZHC 1260
Decision Date: 5 June 2015

CaseChat Overview and Summary

In Woodward v Smith, the plaintiffs, Ashley Eric Woodward and Elaine Coral Woodward, brought an application for Trustee Costs Protection and Beneficiary Costs Protection against the defendants, Jon Philip Smith, Shelley-Lou Smith, and Jon Bower Daniel Smith. This case involved a long-standing dispute concerning the rectification of a trust deed and the approval of deeds of settlement, which had persisted for nearly a decade. The case reached a critical point in May 2014 when the parties reached an indicative agreement during a trial. However, the subsequent deeds of settlement were not effectively approved by the court, leading to further disputes and renegotiations.

The legal issues before the court were primarily whether the original deed of settlement had been abandoned and if the second deed of settlement could be considered binding. The court needed to determine the validity of the deeds of settlement and whether the Smiths could be held to their counter-offers. The Court of Appeal's decision in Jowada Holdings Ltd v Cullen Investments Ltd was referenced to understand the implications of the court's conditional approval of the first deed of settlement.

Justice Kós directed the parties to reach a resolution and spoke directly to them during a recess. The parties agreed to proceed with the second deed of settlement, which was based on the first property/cash combination option. By consent, the court entered judgment in favor of the plaintiffs, effectively ending the proceedings. Justice Kós reserved the right for the parties to apply for clarification if needed but did not expect any such applications. The judge commended the parties and counsel for bringing the matter to a conclusion.

The final orders of the court were that the second deed of settlement dated October 2014 would be upheld, based on the first property/cash combination option set out in the email attached to the incomplete deed. Costs were not in issue, and the court reserved leave for any necessary clarifications.

Orders