Bassett v Jones

[2023] NZHC 768

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-1800

[2023] NZHC 768

UNDER

Part 19 of the High Court Rules 2016 and s 133 of the Trusts Act 2019

IN THE MATTER OF

the estate of Margaret Wilma Jones of Auckland, deceased

BETWEEN

SAMUEL MICHAEL WILLIAM BASSETT and MASON GRANT WEYMOUTH

LOCKHART as administrators in the estate of MARGARET WILMA JONES

Applicants

AND

NICOLA ANN JONES

First Respondent

Cont:/

Hearing:

29 March 2023

Appearances:

A A H Low for Applicants

A W Dixon for First Respondent

No appearance for Second Respondent J C Z Loh for Third Respondent

Judgment:

5 April 2023

JUDGMENT OF JOHNSTONE J

This judgment was delivered by me on 5 April 2023 at 3.30pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:

KP Legal, Auckland for Applicants

Patterson Hopkins, Auckland for First Respondent

Mackenzie Elvin Law, Tauranga for Second Respondent Inder Lynch, Manukau for Third Respondent

BASSETT v JONES [2023] NZHC 768 [5 April 2023]

MICHAEL ALEXANDER JONES

Second Respondent

KATHERINE MARY JONES
Third Respondent

[1]                 Margaret Wilma Jones died intestate in September 2018. Her  husband, Angus Dixon Jones, having died intestate before her, Mrs Jones’s estate is comprised of two significant assets: a house and land at 70A Marine Parade, Mellons Bay (the Home); and a collection of toys and war memorabilia.

[2]                 Mrs Jones’s daughters, Nicola Ann Jones (Nicky) and Katherine Mary Jones (Katy), and son, Michael Alexander Jones (Michael), were appointed administrators of her estate in October 2019. However, they were replaced as administrators by the applicants   in   this    proceeding,    Samuel    Bassett    and    Mason    Lockhart   (the Administrators), in July 2021. It appears that issues had arisen as to the division of the estate.

[3]                 Ordinarily, the Administrators would hold the estate in trust for Mrs Jones’s three offspring in equal shares.1 However, Nicky claims a half share in the Home arising by way of proprietary estoppel. She has also signalled claims for further provision from Mrs Jones’s estate under the Family Protection Act 1955 and the  Law Reform (Testamentary Promises) Act 1949.

[4]                 The Administrators seek directions from this Court under s 133  of  the  Trusts Act 2019.2 The essence of their application is for direction whether to sell the Home now, or to postpone the sale pending resolution of Nicky’s claims. If the latter, the Administrators seek directions to ensure Nicky’s claim is brought promptly and to have her make a financial contribution to the estate in light of her ongoing occupation of the Home. The applicants also seek orders confirming their indemnity in relation to the sale of the Home, and their costs in this proceeding.

Position of parties

[5]                 Nicky opposes the immediate sale of the Home, preferring that the sale be postponed until her claims have been resolved. She says that a sale would prejudice her proprietary interests in the Home arising under the doctrine of proprietary estoppel. Nicky proposes that she bring proceedings in this Court  under  Part  18  of  the  High Court Rules 2016, within a timeframe to be stated by the Court, and that she

1      Administration Act 1969, ss 77 and 78.

2      Bassett v Jones HC Auckland CIV-2022-404-1800, 23 September 2022. Leave to commence by originating application was granted by Robinson J.

remain in the Home paying outgoings (in lieu of occupation rent), including payments under a capitalising mortgage raised by the Administrators to meet interim costs. To this end, Nicky has filed a formal notice of opposition to the applicants’ application for directions, stating her preference that the sale be postponed, and a substantial affidavit which in large part is addressed to her substantive claim.

[6]                 Michael has filed a notice of appearance reserving rights. Katy has filed a similar notice, supplemented by an affidavit. In her affidavit, Katy acknowledges that Mrs Jones did speak on occasion of her intent to leave the Home to Nicky and Katy in equal (half) shares, with a third of  the  residuary  estate  going  to  each  of  the  three children. Beyond that observation, Katy does not comment on the merit of Nicky’s claims. Katy’s preference, however, is that the Home be sold.

[7]                 The Administrators acknowledge their power under s 27 of the Administration Act 1969 to sell the Home and also to postpone the sale for such a period as they think proper. However, they submit that they are in an “unenviable” position:

A beneficiary has signalled a proprietary claim and says her rights will be prejudiced if the [Home] is sold. For the other beneficiaries, it is now two years and five months since the original grant of administration was given. Beneficiaries are entitled to see the Estate administered expeditiously and the administrators have a duty to act even-handedly as between the interests of the beneficiaries. Postponement in such circumstances, is not an ordinary incident of the administration of the Estate.

Analysis

[8]                This proceeding requires determination of the appropriate course pending further litigation. The approach to applications for interim injunctions is apt. In that context, as stated in NZ Tax Refunds Limited v Brooks Homes Limited:3

The applicant must first establish that there is a serious question to be tried or, put another way, that the claim is not vexatious or frivolous. Next, the balance of convenience must be considered. This requires consideration of the impact on the parties of the granting of, and the refusal to grant, an order. Finally, an assessment of the overall justice of the position is required as a check.

3      NZ Tax Refunds Limited v Brooks Homes Limited [2013] NZCA 90, (2013) 13 TCLR 531 at [12] (footnote omitted).

Serious question to be tried

[9]Nicky’s affidavit establishes arguable grounds for the propositions that:

(a)Mrs Jones represented she would leave the Home to Nicky and Katy in equal shares;

(b)Nicky reasonably relied on that representation to her detriment, by acting as primary caregiver to both Mr and Mrs Jones (and by withdrawing from a promising business position and an active social life to do so), and by depleting her savings to pay for Mrs Jones’ secure dementia care, with impacts on her mental wellbeing; and

(c)Accordingly, it would be unconscionable for the Administrators to depart from Nicky’s expectation of inheriting a half share in the Home.

[10]            As indicated above, to the extent Katy’s affidavit addresses these propositions, it supports them.

[11]            If established in Nicky’s proposed proceedings, these propositions would meet the required elements of an equitable estoppel as outlined in Wilson Parking Limited v Fanshaw 136 Limited.4

[12]On that basis, there is a serious question to be tried.

Balance of convenience

[13]            In response to my enquiry, Mr Dixon conceded that Nicky’s claims could be pursued in the event of sale of the Home, against the proceeds of sale. But he clarified that the prejudice relied on relates to the potential loss of Nicky’s half share interest in the Home itself, which might be relied upon to raise funding or otherwise so as to identify a viable pathway to acquisition of the remaining share(s).

[14]            Katy’s affidavit outlines her concerns at the Home’s deteriorating state, and Nicky’s capacity to maintain the Home. Further, Katy does not understand how Nicky

4      Wilson Parking Limited v Fanshaw 136 Limited [2014] NZCA 407, [2014] 3 NZLR 567 at [44].

would be able to purchase the other interests in the Home, regardless of how her claim to a half share is eventually resolved

[15]            Notwithstanding those concerns, and in the absence of clear evidence that the Home is currently deteriorating significantly in value, I take the view that the balance of convenience favours postponement of sale of the Home, subject to establishment of strict conditions ensuring the prompt resolution or pursuit of Nicky’s claims and requiring her to meet outgoings.

Overall justice

[16]            Standing back, I consider directions postponing sale on the basis Nicky is afforded a conditional opportunity to pursue her claims as outlined above will serve overall justice. It is apparent Nicky has invested significant personal effort in the Home and the care of her parents as from her return from Japan in 2001, and has an emotional attachment there.

Indemnity and costs

[17]            In light of the above, and as Ms Low, for the Administrators, appeared at the hearing to accept, I do not consider an order confirming their indemnity in relation to sale of the Home is appropriate at this stage. Such indemnity would ordinarily operate subject to satisfactory performance on their part in any event.

[18]The Administrators’ costs in this proceeding should be met from the estate.

Disposition

[19]            At the conclusion of the hearing on 29 March 2023, I indicated my intention to make directions substantially in terms of paragraphs 1(b), 1(c)(ii), 1(c)(iii), 1(c)(iv) and 1(e) of the originating application of 21 September 2022 upon receipt of draft orders from counsel. I also sought further information as to what would be the current market rental of the Home, as against the total cost of outgoings in respect of the Home such as rates and mortgage repayments, indicating my view that Nicky should be required to meet the greater of these amounts.

[20]            By joint memorandum dated 31 March 2023, the parties proposed orders in accordance with the indication I gave at the hearing, except that the proposed orders contemplate the market rental being determined by the Administrators. I consider it appropriate to adopt the joint proposal of counsel.

[21]            Orders are made in terms of paragraphs 1 to 11 (inclusive) of the joint memorandum of counsel dated 31 March 2023.

Johnstone J