BOOTH v BOOTH [2021] NZCA 112

BOOTH v BOOTH [2021] NZCA 112 [14 April 2021]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA529/2019[2021] NZCA 112BETWEEN TANIA BOOTHApplicantAND JASON BOOTHFirst RespondentRAY CHARLES BOOTHSecond RespondentANN BOOTHThird RespondentCourt: Goddard, Ellis and Katz JJCounsel: Applicant in PersonJ W Maassen for First RespondentG M Richards for Second and Third RespondentsJudgment:(On the papers)14 April 2021 at 11.00 amJUDGMENT OF THE COURTA The application for recall is declined.B The applicant must pay the respondents one set of costs for a standardapplication on a band A basis, with usual disbursements.____________________________________________________________________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 dated25 September 2020 (the CA judgment).1 That judgment dismissed an appeal byMs Booth from a decision of the High Court granting applications for summaryjudgment by Jason Booth, and for strike out by Ray and Ann Booth, in respect ofa claim by Ms Booth under s 182 of the Family Proceedings Act 1980 (the FPA).2In this judgment we will refer to the parties using their first names, as we did in theCA judgment.Background[2] In order to understand the grounds on which Tania seeks recall of theCA judgment it is necessary to set out the background to the appeal that came beforethis Court. The central question in Tania's appeal was whether a family arrangementin relation to a farming business was capable of amounting to a post-nuptial settlementfor the purposes of s 182 of the FPA. This Court held that it was not reasonablyarguable that the family arrangement, or some element of it, amounted to sucha settlement.[3] A central element of the family arrangement was the sale of the farmingbusiness by Ray to Poplar Road Farms Ltd (PRF). Jason and Tania were at all relevanttimes equal shareholders in, and directors of, PRF. PRF did not pay the full purchaseprice 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 existenceof a debt in respect of the unpaid balance of the purchase price. In the Deed, PRF wasdescribed as the "Debtor" and Ray was referred to as the "Creditor". Recital Arecorded that Ray had advanced $1,150,251.99 to PRF. Recital B recorded that he haddone so to help PRF to purchase the farm. The debt figure used in the Deed wasindicative only, because the transaction occurred halfway through the financial year.1 Booth v Booth [2020] NZCA 451 [CA judgment].2 Booth v Booth [2019] NZHC 2424, [2019] NZFLR 225 [Judgment of Associate Judge Johnston].The actual debt figure was to be ascertained at year end. The details of what happenedfollowing the year end are set out in the CA judgment.3 In short, the figure in the Deedwas left unchanged based on advice from the accountant advising on the arrangement.[4] In 2016, Jason and Tania separated. Jason commenced proceedings in theFamily Court under the Property (Relationships) Act 1976 (the PRA) for the divisionof their relationship property (the PRA proceedings). In the PRA proceedings, Taniaalleged 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 wouldbe if the debt was payable, and her share of the relationship property should beincreased 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 underthe 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, underthe Deed, PRF owed Ray a debt of $1,579,134.94.[6] The Family Court transferred the PRA proceedings to the High Court so theycould be case-managed with the rectification proceedings. At the first casemanagement conference, Associate Judge Johnston indicated to Tania that if shewished 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 Act1993.[7] Although Tania did then file such an application on behalf of PRF — by wayof defence to the rectification proceedings — she later abandoned it, just prior to thehearing. She then filed new proceedings under s 182 of the FPA, naming Ray and Annas 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 rectification3 CA judgment, above n 1, at [6]–[7].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 amountowing as $1,579,134.94; and(b) declared that PRF owed Ray the sum of $1,579,134.94 on the terms inthe Deed.[9] Following this judgment (the HC rectification judgment), Jason applied forsummary judgment in the FPA proceedings. Ray and Ann applied to strike out theclaims against them in the FPA proceedings.5 Those applications came before theAssociate Judge on 12 August 2019. As already mentioned, the Associate Judgegranted those applications. Tania's appeal to this Court from that decision wasunsuccessful.Grounds for seeking recall[10] Tania seeks recall of the CA judgment on the basis that financial evidence thatwas relied on in the rectification proceedings and in the FPA proceedings was"manipulated and misleading". She says she can establish that there should not havebeen any debt owed by PRF to Ray at the time of the family arrangement. In hersubmissions 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 neverintended 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 aswell as, and together with, a reopened appeal from this Court's decision in the FPAproceedings.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) ofthe High Court Rules 2016 on the basis that their presence was unnecessary to determine the claim.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 prescribedin Horowhenua County v Nash (No 2):6Generally speaking, a judgment once delivered must stand for better or worsesubject, of course, to appeal. Were it otherwise there would be greatinconvenience and uncertainty. There are, I think, three categories of cases inwhich a judgment not perfected may be recalled — first, where sincethe hearing there has been an amendment to a relevant statute or regulation ora new judicial decision of relevance and high authority; secondly, wherecounsel have failed to direct the Court's attention to a legislative provision orauthoritative decision of plain relevance; and thirdly, where for some othervery 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 thiscase. Nor has Tania established that the third criterion — that for some other veryspecial 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, theexistence of such a debt was an essential element of the argument advanced for Taniato 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 wasnot owed by PRF to Ray.7 The interests of justice do not require that Tania bepermitted to have an opportunity to advance before this Court an argument that isprecisely the opposite of the argument she advanced before us at the hearing of herappeal.[14] The recall application faces a further obstacle. The primary focus of Tania'scomplaint appears to be the HC rectification judgment, which confirmed the existenceof a debt owed by PRF to Ray. The appeal before this Court was not an appeal fromthe HC rectification judgment. A recall of the CA judgment would not enable Taniato challenge the correctness of the HC rectification judgment before this Court. Thatwould require an appeal to this Court from that judgment. The time for bringing such6 Horowhenua County v Nash (No 2) [1968] NZLR 632 (SC) at 633, cited with approval inUhrle v R [2020] NZSC 62 at [25]–[29].7 CA judgment, above n 1, at [45].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 rectificationproceeding, there would be difficulties in Tania, as distinct from PRF, seeking topursue an appeal from the judgment entered against PRF in that proceeding.[15] In these circumstances, the recall application is misconceived. No ground forrecall has been made out. Nor would recall of the CA judgment enable Tania to pursuethe arguments that she wishes to advance about the correctness of the HC rectificationjudgment, 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 itwas not necessary for the respondents to file separate submissions. They could havefiled a single set of substantive submissions on this narrow issue. We therefore awarda 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 ona band A basis to the respondents, with usual disbursements.Solicitors:Britten's Lawyers, Palmerston North for First RespondentLe Pine & Co, Taupo for Second and Third Respondents