Woodward v Smith [2015] NZHC 1260 (5 June 2015)

Last Updated: 9 June 2015

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) the second proposed deed of settlement would not have been entered. The result would have been a vacuum, and renewed litigation.

[5] When this matter was last in front of me on 4 May 2015, I raised doubts as to whether the original deed of settlement could be regarded as having been abandoned. I suggested that the Court’s approval had effectively been given, and that if the second substitute deed had not been entered, then the first deed would remain live. That is, unless the Smiths could establish that it had in fact been abandoned. In that respect the decision of the Court of Appeal in Jowada Holdings Ltd v Cullen

Investments Ltd² was material.

[6] The parties came before me today arguing a preliminary point, which I had directed, as to whether the original deed of settlement was binding or whether it had been abandoned.

[7] After hearing argument from Mr Upton QC and just before the afternoon adjournment, I spoke directly to the parties who were sitting in the back of the Court.³ I said to them that in my view this litigation had gone on quite long enough, and that what was needed here was for this case to be resolved. It seemed tragic that two deeds of settlement, both agreed to in practice at different points, would find no legal form, and that they would be left in the vacuum indicated before. Ahead of them lay only months or years of further litigation and the rapid depletion of all value that might otherwise be used to settle.

[8] There was then a 45 minute adjournment. I am delighted the parties saw sense. The net result is that counsel have both confirmed to me that their clients are willing to agree to the second deed of settlement, undated October 2014, premised on the first property/cash combination option set out in the email attached to that incomplete deed of settlement.

[9] By consent therefore there is judgment in those terms, ending the proceedings covered by that agreement.

_{[10] Sensibly costs are not in issue.}

² _{Jowada Holdings Ltd v Cullen Investments Ltd CA248/02, 5 June 2003.}

3. I note that Mrs Woodward was not here but Mr Bates, counsel for the Woodwards, has instructions on her behalf.

[11] I reserve leave to the parties to apply to the Court if clarification is required of the orders just given. I am not expecting any such application to be made.

[12] I congratulate the parties and counsel for bringing this cancerous state of affairs to a conclusion.

Stephen Kós J

Solicitors:

Brown & Bates Limited, Napier for Plaintiffs

Napier Law, Napier for Defendants