Booth v Booth [2021] NZCA 112 (14 April 2021)

Last Updated: 21 April 2021

IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA

CA529/2019 [2021] NZCA 112

	BETWEEN	TANIA BOOTH Applicant
	AND	JASON BOOTH First Respondent RAY CHARLES BOOTH Second Respondent ANN BOOTH Third Respondent

Court:	Goddard, Ellis and Katz JJ
Counsel:	Applicant in Person J W Maassen for First Respondent G M Richards for Second and Third Respondents
Judgment: (On the papers)	14 April 2021 at 11.00 am

JUDGMENT OF THE COURT

A The application for recall is declined.

2. The applicant must pay the respondents one set of costs for a standard application on a band A basis, with usual disbursements.

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REASONS OF THE COURT

(Given by Goddard J)

The application before the Court

• [1] The applicant, Ms Tania Booth, seeks recall of the judgment of this Court dated 25 September 2020 (the CA judgment).^[1] That judgment dismissed an appeal by Ms Booth from a decision of the High Court granting applications for summary judgment by Jason Booth, and for strike out by Ray and Ann Booth, in respect of a claim by Ms Booth under s 182 of the Family Proceedings Act 1980 (the FPA).^[2] In this judgment we will refer to the parties using their first names, as we did in the CA judgment.

Background

• [2] In order to understand the grounds on which Tania seeks recall of the CA judgment it is necessary to set out the background to the appeal that came before this Court. The central question in Tania’s appeal was whether a family arrangement in relation to a farming business was capable of amounting to a post-nuptial settlement for the purposes of s 182 of the FPA. This Court held that it was not reasonably arguable that the family arrangement, or some element of it, amounted to such a settlement.
• [3] A central element of the family arrangement was the sale of the farming business by Ray to Poplar Road Farms Ltd (PRF). Jason and Tania were at all relevant times equal shareholders in, and directors of, PRF. PRF did not pay the full purchase price for the business at the time of the arrangement. A deed dated 1 November 2011 (the Deed), signed by both Tania and Jason as directors of PRF, recorded the existence of a debt in respect of the unpaid balance of the purchase price. In the Deed, PRF was described as the “Debtor” and Ray was referred to as the “Creditor”. Recital A recorded that Ray had advanced $1,150,251.99 to PRF. Recital B recorded that he had done so to help PRF to purchase the farm. The debt figure used in the Deed was indicative only, because the transaction occurred halfway through the financial year. The actual debt figure was to be ascertained at year end. The details of what happened following the year end are set out in the CA judgment.^[3] In short, the figure in the Deed was left unchanged based on advice from the accountant advising on the arrangement.
• [4] In 2016, Jason and Tania separated. Jason commenced proceedings in the Family Court under the Property (Relationships) Act 1976 (the PRA) for the division of their relationship property (the PRA proceedings). In the PRA proceedings, Tania alleged that it was never intended that the debt owed by PRF to Ray would be repaid. Thus, she alleged, the PRF shares were worth some $1.1 million more than they would be if the debt was payable, and her share of the relationship property should be increased by some $550,000.
• [5] Ray and Ann then commenced proceedings against PRF in the High Court (the rectification proceedings). They sought rectification of the amount owing under the Deed, which they said had been undercalculated by their accountant by over $400,000. As well as rectification of the Deed, they sought a declaration that, under the Deed, PRF owed Ray a debt of $1,579,134.94.
• [6] The Family Court transferred the PRA proceedings to the High Court so they could be case-managed with the rectification proceedings. At the first case management conference, Associate Judge Johnston indicated to Tania that if she wished to maintain her claim on behalf of PRF that the Deed was unenforceable, she should apply for leave to bring a derivative action under s 165 of the Companies Act 1993.
• [7] Although Tania did then file such an application on behalf of PRF — by way of defence to the rectification proceedings — she later abandoned it, just prior to the hearing. She then filed new proceedings under s 182 of the FPA, naming Ray and Ann as defendants as well as Jason (the FPA proceedings).
• [8] Because PRF’s shareholders, Jason and Tania, were fundamentally at odds (Jason supported the claim; Tania opposed it), PRF did not defend the rectification proceedings. A formal proof hearing took place before Clark J in early 2019. After a thorough analysis the Judge:^[4]

(a) ordered that the Deed was to be rectified so that it recorded the amount owing as $1,579,134.94; and

(b) declared that PRF owed Ray the sum of $1,579,134.94 on the terms in the Deed.

• [9] Following this judgment (the HC rectification judgment), Jason applied for summary judgment in the FPA proceedings. Ray and Ann applied to strike out the claims against them in the FPA proceedings.^[5] Those applications came before the Associate Judge on 12 August 2019. As already mentioned, the Associate Judge granted those applications. Tania’s appeal to this Court from that decision was unsuccessful.

Grounds for seeking recall

• [10] Tania seeks recall of the CA judgment on the basis that financial evidence that was relied on in the rectification proceedings and in the FPA proceedings was “manipulated and misleading”. She says she can establish that there should not have been any debt owed by PRF to Ray at the time of the family arrangement. In her submissions she describes the decision to be appealed following a recall as:

That the Deed of Debt is due, that the loan is payable and that it was never intended to be gifted and is not a nuptial settlement.

• [11] She says she would like leave to appeal the debt claim decision of Clark J as well as, and together with, a reopened appeal from this Court’s decision in the FPA proceedings.

Discussion

• [12] The Supreme Court has recently confirmed that this Court’s recall jurisdiction, in both criminal and civil matters, is sufficiently captured by the standard prescribed in Horowhenua County v Nash (No 2):^[6]

Generally speaking, a judgment once delivered must stand for better or worse subject, of course, to appeal. Were it otherwise there would be great inconvenience and uncertainty. There are, I think, three categories of cases in which a judgment not perfected may be recalled — first, where since the hearing there has been an amendment to a relevant statute or regulation or a new judicial decision of relevance and high authority; secondly, where counsel have failed to direct the Court’s attention to a legislative provision or authoritative decision of plain relevance; and thirdly, where for some other very special reason justice requires that the judgment be recalled.

• [13] Tania has not addressed the criteria for recall of a judgment in her submissions. Plainly the first two criteria set out in the passage quoted above are not relevant in this case. Nor has Tania established that the third criterion — that for some other very special reason justice requires that the judgment be recalled — applies. The CA judgment was premised on the existence of a debt owed by PRF to Ray. But that was not a matter in dispute in the FPA proceedings. To the contrary, the existence of such a debt was an essential element of the argument advanced for Tania to the effect that there was a s 182 settlement. Mr Delany, counsel for Tania on appeal, expressly disclaimed any argument that the Deed was not valid or that the debt was not owed by PRF to Ray.^[7] The interests of justice do not require that Tania be permitted to have an opportunity to advance before this Court an argument that is precisely the opposite of the argument she advanced before us at the hearing of her appeal.
• [14] The recall application faces a further obstacle. The primary focus of Tania’s complaint appears to be the HC rectification judgment, which confirmed the existence of a debt owed by PRF to Ray. The appeal before this Court was not an appeal from the HC rectification judgment. A recall of the CA judgment would not enable Tania to challenge the correctness of the HC rectification judgment before this Court. That would require an appeal to this Court from that judgment. The time for bringing such an appeal has long passed: an application to appeal out of time would be required. And although it appears that Tania was named as a defendant in the rectification proceeding, there would be difficulties in Tania, as distinct from PRF, seeking to pursue an appeal from the judgment entered against PRF in that proceeding.
• [15] In these circumstances, the recall application is misconceived. No ground for recall has been made out. Nor would recall of the CA judgment enable Tania to pursue the arguments that she wishes to advance about the correctness of the HC rectification judgment, and the existence of a debt owed by PRF to Ray.

Costs

• [16] The respondents filed submissions opposing the application for recall. Separate submissions were filed on behalf of Jason, and on behalf of Ray and Ann. The respondents seek costs. We consider that an award of costs is appropriate. But it was not necessary for the respondents to file separate submissions. They could have filed a single set of substantive submissions on this narrow issue. We therefore award a single set of costs in favour of the respondents collectively.

Result

• [17] The application for recall is declined.
• [18] The applicant must pay a single set of costs for a standard application on a band A basis to the respondents, with usual disbursements.

Solicitors:
Britten’s Lawyers, Palmerston North for First Respondent
Le Pine & Co, Taupo for Second and Third Respondents

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^[1] Booth v Booth [2020] NZCA 451 [CA judgment].

^[2] Booth v Booth [2019] NZHC 2424, [2019] NZFLR 225 [Judgment of Associate Judge Johnston].

^[3] CA judgment, above n 1, at [6]–[7].

^[4] Booth v Poplar Road Farms Ltd [2019] NZHC 807 at [47]–[48] [HC rectification judgment].

^[5] In the alternative, they applied to be removed as parties to the proceeding pursuant to r 4.56(1) of the High Court Rules 2016 on the basis that their presence was unnecessary to determine the claim.

^[6] Horowhenua County v Nash (No 2) [1968] NZLR 632 (SC) at 633, cited with approval in Uhrle v R [2020] NZSC 62 at [25]–[29].

^[7] CA judgment, above n 1, at [45].