ANZ National Bank Limited v Burnside

[2012] NZHC 388

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

CIV-2011-412-452 [2012] NZHC 388

BETWEEN  ANZ NATIONAL BANK LIMITED Applicant

ANDDELLENE JANETTE BURNISDE First Claimant

ANDKELVIN ROBERT HAY Second Claimant

ANDTREVOR DAVID HAY Third Claimant

ANDDELLENE JANETTE BURNSIDE AS EXECUTRIX IN THE ESTATE OF MERVYN CHARLES HAY

Fourth Claimant

Hearing:         8 March 2012

Appearances: Applicant's appearance excused

J C D Guest for the first, second and fourth claimants
No appearance by self represented third claimant

Judgment:      8 March 2012

Reasons:        9 March 2012

REASONS FOR JUDGMENT OF CLIFFORD J

Introduction

[1]      This is a family dispute about the application of the surplus proceeds of a mortgagee sale of a family farm.  Following a hearing on 8 March 2012, and in the circumstances recorded below, I entered judgment in the terms sought by the first, second and fourth claimants.  I said I would provide my reasons subsequently.  I do

so now.

ANZ NATIONAL BANK LIMITED V BURNISDE HC DUN CIV-2011-412-452 [8 March 2012]

Facts

[2]      Kelvin Hay, Trevor Hay, the late Mervyn Hay and Dellene Burnside are brothers and sister.  Their father originally left the family farm, Deepdell Station in Central Otago, to Kelvin, with cash legacies to be paid to Dellene, Trevor and Mervyn. As matters transpired, those cash legacies were never able to be paid out of the estate.  Ultimately, a deed of family arrangement was entered into in November

2008 vesting Deepdell Station, by then owned in equal shares by Kelvin, Trevor and Mervyn, in Dellene and her three brothers in equal, one quarter, shares.   Dellene filed a caveat to support her unregistered interest.

[3]      The applicant, ANZ National Bank Limited (“ANZ”) held a first mortgage over Deepdell Station.  That mortgage secured loan advances made to the three Hay brothers when they were farming Deepdell Station.  ANZ – to enable a mortgagee sale to take place – applied by way of originating application in CIV-2011-412-257 for the removal of Dellene’s caveat.   That application was granted by Associate Judge Matthews on 9 May 2011 on terms that:

(a)       Dellene’s caveat be removed upon presentation of a memorandum of transfer for registration to the land registry; and

(b)upon  removal  of  that  caveat  and  settlement  of  the  anticipated mortgagee sale, ANZ was to:

(i)commence interpleader proceedings against the first to fourth claimants; and

(ii)retain  all  surplus  proceeds  of sale, after satisfaction  of the applicant’s mortgage debt and deduction for associated costs, in the trust account of Bell Gully (solicitors for ANZ) pending determination of the interpleader proceedings.

[4]      ANZ subsequently commenced these interpleader proceedings on 16 June

2011 and served them on the claimants.

[5]      In  a statement  of defence of 26  June 2011,  the first,  second  and  fourth claimants acknowledge  Dellene’s personal 25  percent  equitable interest  in those surplus proceeds of sale.

[6]      Trevor did not file a statement of defence in response to ANZ’s interpleader proceedings.  Rather, he lodged a variety of documents with the Court indicating that he was opposed to the recognition of Dellene’s interest in Deepdell Station and, therefore, in those surplus proceeds and raising a wide range of other issues.

Procedural history

[7]      In  a  judgment  of  16  November,  Justice  Fogarty  dealt  with  what  he understood to be challenges by Trevor to jurisdiction and to Associate Judge Osborne’s decision contained in the documents thus filed.   He dismissed those challenges on the papers, but did not – because of Trevor’s ongoing opposition – deal in like manner with the substance of ANZ’s interpleader proceedings.  Rather, he provided Trevor with a further opportunity to file a statement of defence and likewise  allowed  time  for  a  possible  third  party  joinder  prefigured  by Trevor’s Mackenzie friend Mr McNab.  The Judge directed any such filing to be made by 6

December 2011 and scheduled a telephone conference for 13 December.

[8]      Following a telephone conference on 14 December, which Trevor did not attend, Justice Fogarty released a minute.  In that minute he recorded that although Trevor had still not filed a statement of defence he would not, as counsel for ANZ and the other applicants had urged, deal with the matter that day.  Rather, he set the matter down for a hearing on 9 March 2012.  That date was subsequently brought forward to 8 March.

The hearing before me

[9]      When the matter was called before me on 8 March, Trevor still had not filed a

statement of defence.  Rather he had, since the release of Justice Fogarty’s minute of

14 December, lodged informally with the Court a number of documents raising a range of issues.  These appear to involve challenges to Associate Judge Matthews’

decision of 9 May 2011, therefore well out of time, or to matters dealt with by Justice Fogarty in his judgment of 16 November 2011, and otherwise raise a wide range of other issues relating – as best as I can tell – to matters of family history which predate the November 2008 deed of family arrangement.

[10]     Trevor  did  not  appear  in  Court  on  8  November  2011  in  support  of  the informal position he had expressed over time, neither when Court was ready to proceed at 10.00am nor some 15 minutes later when I asked that he be called for in the foyer.   I am satisfied Trevor knew of the fixture as he had emailed the Court advising his intention to attend.

[11]     I heard helpful submissions from Mr Guest for the first, second and fourth claimants.    In  my view,  and  as  Mr Guest  submitted,  there is  clear  evidence of Dellene’s 25 per cent equitable interest in the land, and therefore in the surplus proceeds of the mortgagee sale.  That evidence is constituted by her own affidavit and that of Carolyn Hintz – sworn in support of ANZ’s interpleader proceedings – together with the copy of the November 2008 deed of family arrangement.  There is no evidence which challenges the existence of that equitable interest.

[12]     Therefore, I made the order sought by Mr Guest recognising that interest and providing  –  subject  to  questions  of  costs  –  for  the  surplus  proceeds  of ANZ’s mortgagee sale to be divided equally between the four claimants.

[13]     On costs, Justice Fogarty had in his minute of 14 December 2011 accepted ANZ’s entitlement to indemnity costs and requested that the amount of those costs be advised.   Counsel  for ANZ subsequently advised that those costs  comprised

$12,384.30, including GST and disbursements, represented by two invoices:

(a)       an invoice dated 30 September 2011 for $7,477.25; and

(b)      an invoice dated 15 December 2011 for $4,907.05.

[14]     Mr Guest submitted that, in addition to confirming an award of indemnity costs of this amount,  I should also order that  the second invoice be paid from Trevor’s share in the surplus proceeds, and that also some (approximately scale)

costs should be awarded to the first, second and fourth claimants, again to be paid from Trevor’s share of the surplus proceeds.  Mr Guest made that submission on the basis that it was the unsubstantiated opposition of Trevor, never confirmed by a statement  of  defence  or  appearance,  that  had  occasioned  those  additional  costs. Mr Guest acknowledged that there was no process or set of steps that that leant themselves to the application of usual scales, but estimated that two days at scale 2B (namely $3,760.00) would appropriately recognise the steps taken on behalf of the first, second and fourth claimants since Justice Fogarty – because of the position taken by Trevor – decided it was not appropriate to reach a view on the papers as recorded in his judgment of 16 November 2011.

[15]     I  agree  with  both  those  submissions.    Moreover,  I  consider  that  r 4.64 provides me with power to make such an order.

[16]     Taken overall, therefore, at the hearing on 8 March 2012 I made the orders sought by Mr Guest on behalf of the first, second and fourth claimants, namely that:

(a)      The costs of the applicant are fixed at $12,384.30, and of those costs the amount of $7,477.25 (the applicant’s solicitor’s first invoice) shall be credited to the applicant from the surplus.

(b)The balance of the surplus then remaining shall be divided into four parts.

(c)      From  one  such  part  (“the  third  claimant’s  part”)  there  shall  be deducted the further costs of the applicant in the sum of $4,907.05 (the applicant’s solicitor’s second invoice) and that sum shall be credited to the applicant.

(d)Also from the third claimant’s part thee shall be deducted the costs of the first, second and fourth claimants (below), and such sum is to be paid to their solicitors in this proceeding on account of their legal costs.

(e)       The  costs  of  the  first,  second  and  fourth  claimants  are  fixed  at

$3,760.00.

(f)      The third claimant’s then remaining part shall be paid to him and the other three parts shall be paid to the solicitors for the first, second and fourth claimants.

“Clifford J”

Solicitors:
Bell Gully, Wellington for the applicant ([email protected])
Downie Stewart, Dunedin for the first, second and fourth claimants ([email protected])

cc: Mr T D Hay ([email protected])

Mr G W C McNab ([email protected])