IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2012-409-002015 [2013] NZHC 2222

BETWEEN	MICHELLE GAY THOMSON Plaintiff

AND	JOHN WILLIAM THOMSON, JENEFER ANN KING AND ISHTAR RASHEEN Defendants

Hearing:	27 August 2013

Appearances:	G D Trainor for Plaintiff
K L Reid for Defendant John Thomson
HDJ Holderness for Defendants Jenefer King and Ishtar
Rasheen

Judgment:	29 August 2013

JUDGMENT OF D GENDALL J

[1]       The  plaintiff  has  applied  for  summary  judgment  against  the  defendants seeking a sum of $90,062.53.  This represents the balance of an amount claimed as due pursuant to a settlement agreement entered into between the plaintiff and the defendants at a judicial settlement conference which took place on 23 June 2010. Interest is also sought by the plaintiff.

[2]       Notices of opposition to this application have been filed on behalf of the defendants.

Background facts

[3]       The plaintiff is the widow of the late Kelvin Thomson (Kelvin) who died on

11 July 2007. The defendants are his children of a prior marriage.

THOMSON v THOMSON [2013] NZHC 2222 [29 August 2013]

[4]       In 2008 an application was made in this Court under CIV-2008-409-2858 for Probate in Solemn form of a will made by Kelvin on 14 September 2004.   That application  was  opposed  and  at  the  judicial  settlement  conference  between  the parties, which took place in this Court, a detailed agreement was reached settling the proceedings CIV-2008-409-2858 (the settlement agreement).

[5]       The  settlement  agreement  was  made  between  the  plaintiff,  each  of  the defendants and Alexander Donald McBeath (Mr McBeath), a Christchurch solicitor who had previously acted for Kelvin.

[6]       The settlement agreement, amongst other things, provided that:

(a)       the plaintiff would immediately provide to the defendants all chattels (the chattels) owned by Kelvin at the time of his death as referred to in clause 4 of a prior will made by Kelvin dated 12 June 2002;

(b)       the plaintiff would account to the defendants for the value of any chattels already sold or disposed of by her; and

(c)	the defendants would pay the plaintiff $137,500 by 23 February 2011.

[7]       As I understand the position, the reason for the $137,500 payment was that the plaintiff claimed to be entitled to a lifetime income from the Kelvin Thomson No 2 Trust (the No 2 Trust) pursuant to a legacy in Kelvin’s 14 September 2004 will. The defendants alleged that this will was made when Kelvin lacked testamentary capacity and the drafting of the will was unduly influenced by the plaintiff.  It was agreed at the judicial settlement conference that the September 2004 will would not be granted probate (and that the prior 12 June 2002 will would be admitted to probate) and that as a compromise the plaintiff would receive the $137,500.

[8]       Of that $137,500 it appears the sum of approximately $47,440 has been paid to the plaintiff.   The plaintiff now claims the balance amount being $90,062.53 together with interest.

[9]	In response, the defendants say they have counter claims in a sum which exceeds this $90,062.53 made up of:

(a)       $32,900 on account of the value of chattels which the plaintiff did not deliver to the defendants as required under the settlement agreement; and

(b)       $42,000 (and possibly as much as $48,500) on account of funds taken unlawfully by the plaintiff from the No 2 Trust (of which the defendants are trustees and beneficiaries) prior to Kelvin’s death; and

(c)       interest on those $32,900 and $42,000 sums being an amount of at least $15,162.53.

Counsel’s arguments and my decision

[10]	The present summary judgment application is brought pursuant to r 12.2(1)

of the High Court Rules which provides:

12.2 Judgment when there is no defence or when no cause of action can succeed

(1)         The court may give judgment against a defendant if the plaintiff satisfies the court that the defendant has no defence to a cause of action in the statement of claim or to a particular part of any such cause of action.

[11]	The principles of summary judgment have been summarised by the Court of

Appeal in Krukziener v Hanover Finance Ltd at [26]:

The principles are well settled. The question on a summary judgment application is whether the defendant has no defence to the claim; that is, that there is no real question to be tried: Pemberton v Chappell [1987] 1 NZLR 1 at 3 (CA). The Court must be left without any real doubt or uncertainty. The onus is on the plaintiff, but where its evidence is sufficient to show there is no defence, the defendant will have to respond if the application is to be defeated: MacLean v Stewart (1997) 11 PRNZ
66 (CA). The Court will not normally resolve material conflicts of evidence or assess the credibility of deponents. But it need not accept uncritically evidence that is inherently lacking in credibility, as for example where the evidence is inconsistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable: Eng Mee Yong v Letchumanan [1980] AC 331 at 341 (PC). In the end the Court’s assessment of the evidence is a matter of judgment. The Court may take a robust and realistic approach where the facts warrant it: Bilbie Dymock Corp Ltd v Patel (1987) 1 PRNZ 84 (CA).

[12]     Therefore, the present application for summary judgment can only succeed if I am satisfied that the defendants have no arguable defence to the claim against them based on the settlement agreement.

[13]     The plaintiff’s position here is a simple one.   She contends that she has complied with the terms of the settlement agreement but the defendants have not. Accordingly, she argues that the balance payment due to her under the settlement agreement being $90,062.53 is long overdue, and summary judgment for this sum plus interest, should be entered now.

[14]     In response, the defendants’ position is, first, that they have an arguable counter claim to the plaintiff’s claim here and/or, secondly, there are, in any event, material factual disputes relating to both the plaintiff’s claim and their counter claim which this Court cannot safely determine in the plaintiff’s favour on the present summary judgment application.

[15]     This defence as I have noted at [9] above essentially raises two principal issues:

(a)       the plaintiff has  failed  to  comply with  clause  4  of the settlement agreement which required her to transfer certain chattels to the defendants, that the value of these chattels is $32,900 and thereby a deduction of this amount should be made from the $90,062.53 balance owing to the plaintiff;

(b)       that prior to Kelvin’s death the plaintiff misappropriated funds from the No 2 Trust of at least $42,000 and the defendants, as trustees, are thereby justified in setting off this amount against the balance due to the plaintiff; and

(c)	interest on the sums outlined at (a) and (b) above will total at least

$15,162.53, and this should also be set off against the amount due to the plaintiff.

[16]     I now consider each of these matters in turn.

Chattels

[17]     On the evidence which is before the Court, there is a major dispute between the parties as to whether or not all of the chattels have been delivered by the plaintiff to the defendants.  Before me, and for the purposes of the present summary judgment application only (and not otherwise), Mr Trainor, counsel for the plaintiff, indicated the plaintiff was prepared to accept, first, that the chattels in question had not been delivered to the defendants, and, secondly, that a deduction of some $7900 could be made from the $90,062.53 due to the plaintiff, representing an agreed value for the chattels in question.

[18]     This  $7900  figure  is  an  amount  which  the  first-named  defendant,  John William Thomson (John), estimated in his affidavit evidence as the true value of the undelivered chattels.   It is this figure which, for present purposes, the plaintiff is prepared to accept.

[19]     On this aspect, however, the second-named defendant, Jenefer Ann King (Jenefer) and the third-named defendant, Ishtar Rasheen (Ishtar), in their evidence do not accept the value of these chattels at the $7900 figure put forward by their brother John.   Instead, their evidence is that the true value of the undelivered chattels is
$32,900, and it is this amount which must be deducted from any monies due to the plaintiff.

[20]     In  addressing  these  chattel  valuation  questions,  I  am  mindful  that  the application before me is one for summary judgment on which I need to be satisfied that there is no real question to be tried such that the defendants clearly have no defence to the plaintiff ’s claim.   The chattel valuation matters appear to be hotly contested here.  Although ultimately there may be little in the valuation claims made by Jenefer and Ishtar, for present purposes I am not in a position to accept that the true value of the undelivered chattels is indeed $7900 and not the $32,900 advanced by those defendants.

[21]     It must follow, therefore, that for present summary judgment purposes, from the $90,062.53 figure due to the plaintiff in terms of the settlement agreement, needs to  be  deducted  a  possible  figure  of  $32,900  on  account  of  the  value  of  the undelivered chattels.

Unlawful deductions/misappropriations made by the plaintiff from the No 2
Trust

[22]     As to this, the defendants, who are all trustees and beneficiaries of the No 2

Trust, contend that, prior to Kelvin’s death, the plaintiff has improperly taken at least

$42,000 (and probably closer to $48,500) in funds from the No 2 Trust in circumstances where the plaintiff:

(a)	was not a beneficiary of the No 2 Trust;

(b)	knew she was not entitled to funds from the No 2 Trust; and

(c)	used the funds for her own benefit and not for the benefit of Kelvin, as she alleges.

[23]     The plaintiff strongly disputes these contentions advanced by the defendants.

[24]     Notwithstanding  this,  on  the  evidence  before  the  Court,  it  is  difficult  to conclude that the defendants in their capacity as trustees are wrong in saying here that the plaintiff did receive funds from the No 2 Trust of this magnitude to which she was not entitled at the operative time.  Certainly the affidavit evidence which has been filed on behalf of the defendants goes some way to refuting any assertions made by the plaintiff that her dealings with the No 2 Trust were in all respects in order.  In particular, Ishtar’s affidavit evidence before the Court clearly alleges that the plaintiff was herself responsible for organising the unauthorised removal of funds from the No 2 Trust for her own benefit.   In this regard it seems that 13 regular payments of $2000 each, totalling $26,000, were  acknowledged as made to the plaintiff prior to Kelvin’s death.  In addition, a further payment of something in the vicinity of at least $16,000 was paid into Kelvin’s bank account prior to his death and immediately, it is said, withdrawn for the benefit of the plaintiff.  And, on these

aspects, which in my view are closely inter-related to the matters affecting Kelvin’s estate which were the subject of the settlement agreement, there is nothing definitive from the plaintiff before the Court at this point to refute these claims.  In my view they are matters which must be fully and properly tested at trial with evidence given on both sides and detailed cross-examination.   Issues of credibility will no doubt arise.

[25]     It must follow therefore that, given that this application before me is one for summary judgment on which I need to be satisfied that the plaintiff has satisfied the onus on her to show that there is no real question to be tried such that the defendants have no defence to her claim, again I am not in a position to say this is the case here and that I can dismiss the defendants’ counter claim against her for this $42,000.

Interest

[26]     Given the conclusions I have reached with respect to issues over the chattels and the possible misappropriation of funds from the No 2 Trust, this leads to the obvious conclusion that the defendants here would also seem to have some substance in their interest claims against the plaintiff on these amounts, amounts which in time may ultimately prove to be properly due from her.

[27]     That being the case then, even at an interest rate of 7.5% per annum, this interest, on my broad calculations, (and even from only the date the payment was due to the plaintiff under the settlement agreement, being 23 February 2011) would amount to at least $15,180.  That said, and adding this to the sums of $32,900 for undelivered chattels and at least $42,000 for funds allegedly misappropriated from the No 2 Trust must mean that the defendants have an arguable counter claim or set off  against  the  plaintiff  for  something  in  excess  of  the  $90,062.53  balance outstanding from the defendants in terms of the settlement agreement.

[28]     That  said,  and  given  my  finding  that  the  defendants  may have  arguable counterclaims  that  exceed  the  plaintiff’s  claim,  and  that  in  any event  there  are material factual disputes which the Court cannot safely determine here, the present summary judgment application must fail in its entirety.

Orders

[29]     An  order  is  now  made  dismissing  the  plaintiff’s  summary  judgment

application.

[30]     As to costs, r 14.8(3) of the High Court Rules expressly excludes applications for summary judgment where a Court is generally directed to fix costs on an opposed interlocutory application at the time when it is determined.  As McGechan on Procedure at HR14.8.03 notes, this is to preserve the Court’s general practice of reserving costs on an unsuccessful summary judgment application, such as the plaintiff’s present application, until such tune as the substantive proceeding is disposed of.

[31]	Costs therefore on this application are reserved to be dealt with on final disposal of this proceeding.

...................................................
D Gendall J

Solicitors:
Trainor McLean, Christchurch
Duncan Cotterill, Christchurch
Wynn Williams & Co, Christchurch