Thomas v Mackintosh [2017] NZCA 366 (24 August 2017)

Last Updated: 30 August 2017

IN THE COURT OF APPEAL OF NEW ZEALAND
CA669/2016 [2017] NZCA 366
BETWEEN	PHILIP DEAN THOMAS Appellant
AND	JOHN BOWDEN MACKINTOSH AND MATTHEW CHADLOW HALL AS EXECUTORS AND TRUSTEES OF THE ESTATE OF NORMAN DEAN THOMAS First Respondents
AND	ALISON MARGARET SYME, MARK WREFORD REED, SIMON THOMAS REED AND ELEANOR MARY MARR Second Respondents

Hearing:	14 August 2017
Court:	French, Miller and Cooper JJ
Counsel:	H A Evans for Appellant C A McVeigh QC for First Respondents No appearance for Second Respondents
Judgment:	24 August 2017 at 10.00 am

JUDGMENT OF THE COURT

1. The application for an extension of time is granted on condition that the appellant pay $150,000 to the first respondents by 31 August 2017.
2. The appellant must file the case on appeal and apply for a hearing date by 1 September 2017.

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REASONS OF THE COURT

(Given by French J)

[1] Mr Thomas filed an appeal against an oral decision of Heath J ordering the sale of a farm property known as Mays Block.^[1] Under r 43 of the Court of Appeal (Civil) Rules 2005, Mr Thomas was required to file the case on appeal by 18 April 2017.^[2] He failed to do so and now seeks an extension of time.
[2] Justice Heath’s decision was made in the context of a family dispute over the estate of Mr Thomas’ father. The first respondents are the professional trustees of the estate. They oppose the application for an extension of time. The second respondents are either beneficiaries under the will of the late Mr Thomas or family members who have made claims against his estate. None of the second respondents opposes the application for an extension of time.
[3] The estate consists primarily of interests in 11 farm properties worth in total approximately $20 million. Mays Block is one of the 11 properties. Mr Thomas is the registered proprietor of one half of Mays Block and the trustees the registered proprietors of the other half. Mr Thomas has lodged a caveat against the one half interest owned by the trustees on the ground that they hold it on a constructive trust in his favour.
[4] The family has for some considerable period been endeavouring to resolve the various differences. On 20 September 2015, a Heads of Agreement was signed, whereby the parties (including Mr Thomas and the second respondents) agreed to allocate the various farm properties between them. The Heads of Agreement did not resolve all outstanding issues and negotiations continued.
[5] Meantime, the point was reached in early 2016 that the trustees urgently required access to funding in order to meet the estate’s tax obligations and also pay for the ongoing costs of administering the estate. The trustees applied to the High Court for an order seeking the sale of a property or properties. With the assistance of Heath J, an interim agreement was made under which an immediate cash payment of $550,000 was made to the trustees. It was also a term of the interim agreement that a line of credit would be made available to the trustees up to a maximum of $1 million to enable the administration of the estate to continue to completion.^[3]
[6] The line of credit was never put in place and so the trustees brought their proceeding back on for hearing. It was at the conclusion of this hearing that Heath J made the order requiring Mays Block to be sold. Mr Thomas then filed his appeal on 23 December 2016.
[7] As mentioned, the time for filing the case on appeal expired on 18 April 2017. The application for an extension of time was filed on 8 May 2017. Mr Thomas’ explanation for the delay is that between December 2016 and May 2017 the parties, including the trustees, have been involved in extensive settlement discussions which it was hoped would render an appeal unnecessary. These included three judicial settlement conferences which have resulted in significant progress being made towards a final settlement.
[8] Although it was still incumbent on Mr Thomas to progress his appeal notwithstanding the settlement discussions, the delay is understandable. Contrary to a submission made by the trustees, we also accept the appeal may have some merit. Of concern however is the seriously prejudicial effect of the continuing delay on the trustees. They are without funds and so are unable to meet their obligations. There are now accumulated liabilities of approximately $550,000. Mr Thomas accepts the trustees need to be put in funds.
[9] In our view, taking all those considerations into account, we consider that justice requires an extension of time to be granted but on condition that Mr Thomas pay the trustees the sum of $150,000 by 31 August 2017.
[10] We also order that Mr Thomas is to file the case on appeal and apply for a hearing date by 1 September 2017.
[11] We further direct the Registry to allocate an urgent half day fixture. The key issue for determination is whether Heath J had jurisdiction to make the order.

Solicitors:
Young Hunter, Christchurch for Appellant
Meares Williams, Christchurch for First Respondents

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^[1] Mackintosh v Thomas [2016] NZHC 3141.

^[2] A literal interpretation of r 43(5) of the Court of Appeal (Civil) Rules 2005 would require the case on appeal to have been filed by 14 April 2017. However due to the intervening Easter vacation, the filing would have been accepted on 18 April.

^[3] Mackintosh v Thomas [2016] NZHC 2313.