Adams v Adams
[2023] NZHC 608
•28 March 2023
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV-2020-419-0034
[2023] NZHC 608
UNDER Property Law Act 2007, Trusts Act 2019, Declaratory Judgments Act, Administration Act 1969 IN THE MATTER OF
of an application for an order for sale of real property and distribution of the proceeds and an application for directions
BETWEEN
SONIA ADAMS
Plaintiff
AND
DESMOND ADAMS
First Defendant
PAULINE PARAKU
Second Defendant
Hearing: 14 March 2023 Appearances:
A Osama for the Plaintiff (Respondent)
J C LaHatte for Chemell Paraku (Applicant) P A Depledge for the First Defendant
Judgment:
28 March 2023
JUDGMENT OF ASSOICIATE JUDGE BRITTAIN
This judgment was delivered by me on 28 March 2023 at 2.00 pm.
Pursuant to Rule 11.5 of the High Court Rules.
…………………..
Registrar/Deputy Registrar
Solicitors:
Ord Legal, Wellington for Plaintiff
McKenna King Dempster, Hamilton for First Defendant Mike Walmsley, Paeroa for Second Defendant
SONIA ADAMS v DESMOND ADAMS [2023] NZHC 608 [28 March 2023]
[1] Marion Te Omiraki Putere1 (the deceased) previously owned a property at 37 Roto Street, Te Kauwhata (the property). The deceased died on 6 July 1990, leaving a will dated 3 December 1986 (the will).
[2] Under the will, the deceased appointed a solicitor, Ian Douglas Todd, as her executor and trustee. The deceased’s estate was bequeathed to her trustee, who was directed to pay debts and expenses and to hold the residue on trust, in equal shares, for the deceased’s surviving children that attained the age of 20. The deceased was survived by ten of her children, including the first and second defendants. All have been served with the proceeding.
[3] On 29 April 1991, the property was transferred into the name of Mr Todd, as the executor of the deceased’s estate. On 26 May 2006, Mr Todd transferred the property to the plaintiff, a grandchild of the deceased, and the first and second defendants, children of the deceased. The circumstances that led up to that transfer remain unclear, as discussed further below.
[4]The plaintiff seeks two alternative remedies in the proceeding:
(a)A declaration that the plaintiff and the first and second defendants hold the property on constructive trust for the beneficiaries of the deceased’s estate and an order that the plaintiff and the first and second defendants transfer the property to Alan Wilson. Mr Wilson is a solicitor who has agreed to act as executor of the deceased’s estate and to complete administration of the estate in accordance with the deceased’s will. That would result in Mr Wilson selling the property, paying the estate’s debts and distributing the residue according to the terms of the will.
(b)Alternatively, the plaintiff seeks orders under s 339 of the Property Law Act 2007, requiring the property to be sold and the proceeds of sale distributed to the beneficiaries of the deceased’s estate. As pointed out by Peters J in a minute dated 11 October 2021, the cause of action under
1 This is the deceased’s name as spelt in her will. I note that the parties refer to the deceased as Marion Te Omiraka Putere.
s 339 of the Property Law Act appears to be problematic, given that the beneficiaries of the deceased’s estate are not all co-owners.
[5] During the hearing of the application for joinder, the plaintiff’s counsel advised that the plaintiff is primarily seeking a declaration of a constructive trust and ancillary orders under the Trusts Act 2019, but she does not wish to formally abandon the alternative cause of action under s 339 of the Property Law Act.
[6] The applicant, Ms Chemell Paraku, is a granddaughter of the deceased, born approximately seven years before execution of the will. The applicant lived with the deceased when she was a child, and the applicant has deposed that she was a whāngai child of the deceased and the deceased’s husband. That is disputed by the applicant’s mother, Pauline Paraku, the second defendant. The applicant seeks to be joined as a party to the proceeding.
[7] Other than the plaintiff and the first and second defendants, the only other child of the deceased that has taken any steps in the proceeding is Harry Adams. He has filed a notice of appearance dated 12 September 2022, and he does not oppose the substantive relief sought by the plaintiff.
The application
[8] The applicant applies to be joined as a party to this proceeding under r 4.56(1)(b)(ii) of the High Court Rules 2016, which provides:
4.56 Striking out and adding parties
(1)A Judge may, at any stage of a proceeding, order that—
(a)the name of a party be struck out as a plaintiff or defendant because the party was improperly or mistakenly joined; or
(b)the name of a person be added as a plaintiff or defendant because—
(i)the person ought to have been joined; or
(ii)the person’s presence before the court may be necessary to adjudicate on and settle all questions involved in the proceeding.
[9]The application for joinder is opposed by the plaintiff and the defendants.
The circumstances surrounding the transfer of the property in 2006
[10] The deceased’s whānau held hui regarding the property, including a hui in 1994 and a hui on 14 April 2006. There are unsigned minutes of the latter hui, from which it can be inferred that at least some of the deceased’s whānau were treating the property as if it were subject to some form of trust.
[11] On 12 July 2006, Mr Todd wrote to Evans Bailey, the solicitors then acting for some or all of the beneficiaries of the deceased’s estate. In his letter, Mr Todd explained the reason for his transfer of the property to the plaintiff and the first and second defendants as follows:
Basically, since then all I was wishing for was to receive firm instructions from the family as to whom the property should be transferred to as I did not wish it to remain in my name. More recently in April of this year I received instructions from the family that they had elected as trustees of the Family Trust, Desmond Alexander Adams, Pauline Rangiwauwai Pareku and Sonya Adams. In accordance with those instructions the property was transferred to them.
[12] On 3 December 2012, Mr Todd wrote to the solicitors then acting for the plaintiff, Niemand Peebles Hoult, further explaining the transfer:
The family were in dispute as to whether the house should be sold or whether a family member should purchase it.
The family formed, independently of the writer, a Trust and I received instructions to transfer it into the names of Desmond, Pauline and Sonya.
[13] There is other documentary evidence suggesting that at least some of the whānau were treating the property as subject to a trust.
[14] There is no evidence of a trust deed, or any documents that purport to create an express trust.
[15] It appears that various members of the whānau have resided at the property over the years. The applicant presently resides there.
Legal principles
[16] The object of r 4.56 is to provide for the inclusion of necessary parties. The approach to joinder is liberal. In Newhaven Waldorf Management Ltd v Allen, the Court of Appeal said:2
This Court has previously noted that r 4.56 imposes “a fairly low threshold”. A cause of action need not necessarily be advanced (or lie) against a defendant to be added. Indeed, where the plaintiff opposes joinder, a cause of action against the additional defendant may not be apparent unless the Court orders re-pleading by the plaintiff. It is the nature of the impact of the proceeding on the additional defendant’s rights that is important. As Pegang and Gurtner make clear, these are not necessarily confined to legal rights, although the case for joinder may be stronger in such a case. Joinder for the defendant is not without risk, of course. It Will be bound directly by an adverse outcome, and exposed to costs.
[17] The issue is whether the applicant’s presence before the Court is necessary so that the Court can adjudicate on and settle all questions involved in the proceeding. This gives rise to the question, will the proceeding impact on the applicant’s rights?
Submissions
The applicant
[18] The applicant argues that the collective approach taken to decision making by Māori, recognised by the Supreme Court in Ellis v R,3 requires that the applicant be joined to this proceeding. Mr LaHatte, counsel for the applicant, referred to the following statement by the Court:4
The Court is unanimous that tikanga has been and will continue to be recognised in the development of the common law of Aotearoa/New Zealand in cases where it is relevant. It also forms part of New Zealand law as a result of being incorporated into statutes and regulations. It may be a relevant consideration in the exercise of discretions and it is incorporated in the policies and processes of public bodies.
[19] The applicant asserts that “most of the whānau” agree to the property being impressed with a trust in favour of the whānau.
2 Newhaven Waldorf Management Ltd v Allen [2015] NZCA 204, [2015] NZAR 1173 at [46] (footnotes omitted).
3 Ellis v R [2022] NZSC 114.
4 At [19] (footnotes omitted).
[20] The applicant does not assert any legal rights in respect of the property but wishes to be heard regarding what should or might happen with the property in the future.
[21] Mr LaHatte accepted that even if the applicant was the deceased’s whāngai child, s 19(1) of the Adoption Act 1955 applies; that is, the applicant is not considered to be a child of the deceased for the purposes of determining the class of beneficiaries under the will and therefore has no standing to challenge the will.
[22] Mr LaHatte confirmed that the applicant is not asserting that she is a beneficiary of a trust, whether express or constructive or of any other nature, arising from or in connection with the transfer of the property from Mr Todd to the plaintiff and the first and second defendants. The applicant does not wish to file a pleading asserting any rights of that nature.
[23] The applicant accepts that if the property is transferred to Mr Wilson as trustee of the deceased’s estate, then Mr Wilson will be free to administer the estate in accordance with the will.
The plaintiff and the defendants
[24] The plaintiff and the defendants argue that the applicant has no rights that might be affected by the outcome of the proceeding. All parties to the proceeding that have taken steps, including Harry Adams, support the appointment of Mr Wilson as trustee of the estate and distribution of the estate in accordance with the will. Accordingly, the plaintiff is seeking to proceed by way of formal proof.
[25] The plaintiff’s evidence is that the beneficiaries of the estate have been unable to agree on the establishment of a trust, despite several attempts to do so, including by mediation. The plaintiff describes her relationship with the first and second defendants as dysfunctional.
[26] The first defendant, the applicant’s uncle, has deposed that he does not agree to the applicant continuing to live at the property, and he does not agree to the settlement of a trust.
[27] The second defendant, the applicant’s mother, opposes an order joining the applicant as a party.
Discussion
[28] The applicant’s assertion that there is broad whānau support for the establishment of a trust is not substantiated by any pleadings, notices of appearance or evidence. On the contrary, the pleadings, the notice of appearance from Harry Adams and the affidavits filed by the parties all point to consent to the relief sought by the plaintiff.
[29] I accept that the applicant may feel a strong connection to the property. However, the applicant cannot point to any substantive rights that she possesses, whether sourced in tikanga or otherwise, that might possibly be affected by the relief sought by the plaintiff in this proceeding. In his oral submissions, Mr LaHatte confirmed that the applicant merely relies on tikanga as providing a procedural right to be heard.
[30] The joinder of parties is governed by the High Court Rules. Joinder ultimately involves an exercise of a discretion, and I note the Supreme Court’s view that tikanga may be a relevant consideration in the exercise of a discretion. However, given that the applicant has not established that she has rights that can be impacted upon by the proceeding, I am not persuaded that I should exercise my discretion to allow the joinder.
[31] If the applicant was joined, then that would create the potential for the applicant to defend the proceeding at trial, requiring viva voce evidence and extending the duration of the trial, adding to costs and delay for parties who are essentially seeking orders by consent.
[32] One of the deceased’s children, Wayne Adams, has subsequently passed away. The plaintiff’s pleading alleges that Wayne Adams’ share in the deceased’s estate has passed to his six children. Those children, who are the deceased’s grandchildren, have been served with the proceeding on that basis. The applicant is in a different position because her mother is still alive.
[33] As an aside, I note there is no clause in the will which provides for Wayne Adams’ share of the estate to pass to his children, so establishing that his children are entitled to his share of the residue of the deceased’s will depends on Wayne Adam’s own testimony of provisions. There is presently no evidence on that matter before the Court.
Result
[34] The application for an order joining Chemell Paraku as a party to this proceeding is declined.
Costs
[35] Given the whānau history and the unusual features of the administration of the deceased’s estate, and the prior engagement of the whānau in attempts to establish a trust, it is not surprising that the applicant has sought to remain involved and to participate in the proceeding.
[36] The application has required minimal affidavit evidence, all of which will be useful if the matter proceeds to formal proof. The hearing of this application on 14 March 2023 was completed in an hour.
[37] The parties will likely be able to recover the costs of the proceeding if the estate is administered by Mr Wilson, as sought by the plaintiff. Costs on this application should lie where they fall.
Directions
[38] It appears that the proceeding is now ready to be allocated a formal proof hearing. Counsel are requested to confer and to file a joint memorandum outlining:
(a)Whether any further affidavits are required.
(b)An estimate of the hearing time required.
(c)Any other pre-trial directions required.
[39] The proceeding is adjourned to a telephone conference in the week commencing 17 April 2023, to be allocated by the Registrar.
Associate Judge Brittain
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