SMITH v PENNEY [2014] NZHC 1850

SMITH v PENNEY [2014] NZHC 1850 [6 August 2014]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2013-404-003064[2014] NZHC 1850BETWEEN NIGEL PHILIP SMITH (in his capacity astrustee of the MARIA CHARLESFAMILY TRUST)PlaintiffAND STEPHEN CHARLES PENNEYFirst DefendantDONNA MARIA SIMUNOVICHSecond DefendantHearing: 6 August 2014Counsel: F Whyte for PlaintiffFirst Defendant in personSE McCabe for Second DefendantJudgment: 6 August 2014JUDGMENT OF ASHER JSolicitors/Counsel:LeeSalmonLong, Auckland.Martelli McKegg, Auckland.SE McCabe, Auckland.Copy to:First Defendant.[1] The first defendant, Stephen Penney, and the second defendant, DonnaSimunovich, were married on 16 February 1997. They separated in July 2008 somesix years ago. While their marriage was dissolved on 7 December 2010 and theyentered into a matrimonial property agreement on 28 September 2011, regrettablythe issues between them are still not resolved.[2] This current proceeding was filed on 4 June 2013. The then-trustee of thefamily trust, known as Maria Charles Family Trust (the Trust), sought directions inrelation to rental income from properties owned by the Trust, and which werereferred to in the matrimonial property agreement. There were orders sought seekingfurther information from the first defendant and an order for the substitution oftrustees.[3] The proceeding already has something of a history. The orders that theplaintiff, Nigel Smith, sought were made by Associate Judge Christiansen on8 August 2013, and in a reserved judgment of 12 November 2013 an application toset aside or vary that judgment was dismissed by Wylie J.1 In a separate judgment,Wylie J also made an order appointing new independent trustees.2[4] This particular application is brought by one of the original trustees,Mr Smith. He seeks an order substituting the new independent trustees as plaintiffs.The orders sought are as follows:(a) Substituting Nole Ronald Irvine and Michael Taylor, as trustees of thetrust, for Nigel Philip Smith, as trustee of the Trust, as the plaintiffs inthis proceeding;(b) Requiring the first defendant to deliver up to the applicants andsecond defendant all records of payment of money to the firstdefendant from property of the Trust, as required by the orders ofAssociate Judge Christiansen made on 8 August 2013, within fiveworking days; and1 Smith v Penney [2013] NZHC 2988.2 Smith v Penney [2013] NZHC 2727.(c) Requiring the first defendant to provide a sworn affidavit:(i) confirming that all relevant records have been provided;(ii) providing a reconciliation and details of all sums received bythe first defendant that he is required to pay to the trust;(iii) confirming that he has paid to the trust all sums he is requiredby the orders to pay to the trust; and(iv) addressing the questions set out in [14] of the affidavit of NoleRonald Irvine filed with this application.within five working days of the date of the order.[5] I have heard from Mr Whyte for the plaintiff, Ms McCabe for the seconddefendant Ms Simunovich, and Mr Penney in person (he is no longer represented).The sworn affidavit is to be provided by Wednesday, 13 August 2014.[6] In relation to (b) Mr Penney says he has provided those records. The trusteesacknowledge that they have received records over the last few days. It may be thatMr Penney has met his obligation under (b). However, the trustees have not beenable to go through all the material provided so their position at this point is notknown. If those records have been provided and the trustees are not seeking anymore, the trustees should notify Mr Penney of this and he needs to do nothing morein relation to (b). If, on the other hand, there are still further records sought, a lettershould be sent advising Mr Penney of this. It would reasonable for the trustees tosend any such notification to Mr Penney in relation to (b) by Wednesday, 13 August2014.[7] Mr Penney had filed a memorandum setting out his position. He does notaccept that one of the trustees is independent and considers that he has provided theinformation that was sought. However, it became clear in the course of what he wassaying in court that he did not resist the change in the names of the plaintiff to reflectthe order of change in trustees, and that to save time he did not object to orders beingmade that he disclose certain material, even though in his view that had already been disclosed. He indicated that to move things forward he would get together with hisaccountant Mr Heaps, and instruct a lawyer and file an affidavit responding to anyorders that were made in terms of the application.[8] It was his strong submission that the issues between him and Ms Simunovichhad to be resolved promptly and he was prepared to accede to any determinationresolving matters between them. Further delay was most disadvantageous bothpersonally and in terms of business interests.[9] Ms McCabe on behalf of Ms Simunovich did not disagree with that sentiment. She says it is here client's wish that now some six years since separation,to have all matters finally resolved.[10] I am prepared to make the order substituting Nole Irvine and Michael Tayloras plaintiffs, as this follows from the change in trustees. I am prepared to make theorders seeking further information as set out in paragraph (b) and (c) of theapplication, as there can be no doubt that the parties are all entitled to have thatinformation. I do not ignore Mr Penney's submission to me that in fact all theinformation sought has been provided. However, he takes a sensible position that toensure matters move forward he does actively oppose directions requiring him toprovide this further information. As I have said he will get together with hisaccountant Mr Heaps and a lawyer and provide the necessary information,Mr Penney believes he can do so within a matter of days.[11] I am satisfied that therefore orders (a), (b) and (c) of paragraph 1 of theapplication should be made and I order accordingly.[12] I also refer this case to the List Judge with a recommendation that if possiblea settlement conference be allocated. The parties have already been through a roundof mediation and have already entered into a matrimonial property agreement. Thedifficulty clearly has been in resolving the details of payments made in the past andwhat a fair solution is today. It is the sort of issue that should be able to be resolvedaround the table.[13] If there is to be a settlement conference, and I recommend that there shouldbe, time needs to be allowed for the information to be provided and assimilated andtime must also be set aside to enable the offer that the trustees have said they willmake to be considered. The trustees have indicated that they will make a proposal tothe parties on or before 20 August 2014. The settlement conference therefore shouldbe after 1 September 2014 (so time is allowed for the consideration of the offer andfor discussion).Costs[14] The plaintiff has been successful in obtaining these orders and thereforeargues that costs should follow the event in the usual way. However, I note thatMr Penney is now representing himself. He did not file a notice of opposition, andhis memorandum, although it was late in coming, was not unconstructive. He hasbeen constructive through this hearing today and progress is being made.[15] In the circumstances I am not prepared to make an order for costs on thehearing today.[16] Costs are reserved and will be costs in the cause...Asher J