Bell v Bell
[2015] NZHC 3059
•27 November 2015
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
CIV-2015-409-000436 [2015] NZHC 3059
BETWEEN ALISON HELEN BELL
Plaintiff
AND
JOHN BRUCE BELL First Defendant
AND
ALASTAIR PETER BELL Second Defendant
AND
ALASTAIR PETER BELL AND JOHN BRUCE BELL AS TRUSTEES OF THE BELL FAMILY TRUST
Third Defendants
AND
ALASTAIR PETER BELL AND JOHN BRUCE BELL AS EXECUTORS OF THE ESTATE OF J M BELL
Fourth Defendants
Hearing: 27 November 2015 Appearances:
J V Ormsby and S A Woods for Plaintiff/Applicant
M J Wallace for Defendants/RespondentsJudgment:
27 November 2015
JUDGMENT OF ASSOCIATE JUDGE OSBORNE
on plaintiff ’s summary judgment application
[1] The parties are sister (plaintiff) and brothers (defendants). As the proceedings concern members of the Bell family, I will refer to the individuals by their Christian names.
[2] Alison’s summary judgment application centres on information which she
asserts is necessary for the performance and implementation of a settlement
BELL v JOHN BRUCE BELL [2015] NZHC 3059 [27 November 2015]
agreement which she entered into with Bruce and Alastair on 26 February 2014. The orders Alison seeks are in the nature of specific performance. Bruce and Alastair oppose the making of any of the requested orders (although there has been progress on some matters since the issue of the proceeding).
The family situation
[3] The parties are the children of Helen Bell and the late John Bell.
[4] John (as I will describe the father) died in August 2003. Helen is in care and not of sound mind. Bruce (given names John Bruce) and Alastair are her returnees in relation to property and Bruce is her attorney for care and welfare.
[5] Following John’s death, issues arose between the children as to the management of Helen’s affairs, the management of John’s estate (the Estate), and the management of the Bell Family Trust (the Trust). The interests of the children in the Trust and the Estate were either not fixed or in dispute.
[6] Alison initiated litigation in 2010 seeking information as to the Trust and its dealings with the Estate. An independent audit was completed in early 2014.
[7] On 26 February 2014, the siblings attended a mediation at which they reached agreement on a full and final settlement, recorded in a settlement agreement signed by them that day.
The settlement agreement
[8] By the settlement agreement, the siblings agreed amongst other things:
(a) The net value of the Estate and Trust was assessed as being
$1,850,000.
(b)Alison was to receive $850,000 (including $100,000 for legal expenses) from the estimated $1,850,000 or, in the event realisations differed from the estimates, 42.85 per cent of the realised value.
[9] The parties expressly provided for the possibility that the realised value of two properties (houses at Paton’s Rock and in Harrison Street (the properties)) might differ from the figures used as estimates.
[10] The respective properties were to be valued and transferred to Alison (individually) and to Bruce and Alastair (jointly) with any alteration in value to be the subject of the adjustment referred to above.
[11] Clause 1 of the deed provided that settlement was on a full and final basis on the terms set out in the agreement.
[12] Clause 2 provided for good faith and cooperation:
Some terms in this Deed may be subject to or require the Parties (or any one of them) to carry out or procure or put in place further matters; for example: further investigations, clarification of existing information, the receipt of relevant professional advice (eg, up-to-date valuation of Estate or Trust assets), the establishment of a new trust or trusts (and any related administration). The Parties agree to act in good faith to make sure all further matters as required by this Deed, or to which it is subject, are attended to promptly, efficiently and with all necessary co-operation between the Parties and/or their legal representatives.
[13] The requirements of cl 2 are central to Alison’s claim for further information.
[14] Other relevant provisions of the settlement agreement included:
(a) all assets other than real property were to be sold and held in cash
(Further Terms, cl (a));
(b)various provisions around obtaining valuations for the two properties and reaching agreement on these valuations (Further Terms, cls (b) – (d));
(c) once the total value of all assets of the Estate and Trust was known, various loans would be repaid or forgiven (Further Terms, cl (e));
(d)a trust would be established for Mrs Bell (the Helen Bell Trust) to be managed by an independent corporate trustee, and into which all her
assets would be placed, with the exclusion of $50,000 which would be retained in a bank account in Mrs Bell’s name to be administered by Bruce and Alastair for Mrs Bell's benefit. An additional $35,000 would be paid by the Trust into the Helen Bell Trust and the Trust's terms would allow for its use to look after Mrs Bell’s needs during her lifetime, with any sums left over on her death to be shared equally between Bruce, Alastair and Alison (Further Terms, cl (h));
(e) Alison would be paid $100,000 out of the realised assets to reimburse her for legal expenses incurred in respect of the Trust and Estate (Further terms, cl (i));
(f) after payment of legal expenses to Alison (Further Terms, cl (i)(a)):
(i)Alison was to receive 42.85 per cent of the net assets of the Trust and Estate, including the Harrison Street property (which was to be transferred to her at the agreed value). This was to be achieved by the Trust’s depositing the cash value of the half-share in the Harrison Street property to Mrs Bell (on Alison’s behalf) and then depositing those funds into the Helen Bell Trust in consideration of Mrs Bell’s half-share;
(ii)Bruce and Alastair were entitled to take the Paton's Rock Beach House at the agreed value as part of their share if they chose;
(g) various agreements in relation to the care and welfare of Mrs Bell
(Further terms, cl (i)(b) – (d)); and
(h)the parties agreed that the settlement was in full and final settlement in respect of all matters in dispute with respect to the Trust and Estate and Helen’s affairs and that this allowed a mechanism to move forward in the interests of all parties and any and all beneficiaries (Further terms, cl (i)(g)).
Implementation of the settlement agreement
[15] The parties agree that the settlement agreement is binding and is to be implemented according to its terms.
[16] Alison accepts that Bruce and Alastair have taken some steps in implementing the agreement including:
(a) attending to sale of some trust investments;
(b) obtaining a valuation of the Harrison Street property;
(c) in 2014, providing some information about the investment sale process; and
(d)depositing some sums into the Wynn Williams stakeholder account on account of investments realised.
[17] Alison asserts that she herself has undertaken all of the steps which were her responsibility including:
(a) sale of all estate investments and deposit of those funds into the Wynn
Williams stakeholder account on account of investments realised; (b) obtaining a valuation of the Paton’s Rock property;
(c) provision of information to Bruce and Alastair as to the sales and values achieved; and
(d) preparation of a draft trust deed for the Helen Bell Trust, provided to
Bruce and Alastair’s barrister on 19 December 2014.
Requests for information
[18] Alison refers to a series of requests for information which she made from March 2014 to March 2015. She asserts that Bruce and Alastair failed to provide the requested information in full or in some cases, at all.
[19] On the present application, the Court must determine whether specific categories of documents and information are required to be provided under the agreement. It is unnecessary to traverse the lengthy correspondence which occurred in relation to such information. I will instead examine the specific items requested through the statement of claim and the summary judgment application. I will then touch on the second subject matter of Alison’s application, namely finalisation of the Helen Bell Trust deed, an issue which has now been resolved.
The reason for Alison’s seeking information
[20] Mr Ormsby refers to the categories of information sought and submits that all the information is necessary in order to:
(a) verify the values of the Trust, Estate and Helen’s assets at the date of
settlement;
(b)confirm that the assets of the Trust and the Estate have been fully realised and all proceeds deposited into the stakeholder account; and
(c) confirm that all Helen’s assets have been identified and transferred into a new trust to be established for her benefit.
[21] Mr Ormsby helpfully provided as Annexure One to his submissions a table of the information sought by Alison and the reason for which the information is said to be necessary. Mr Ormsby’s schedule is reproduced as Schedule One to this judgment. I will refer to it in analysis of Alison’s claim.
Grounds of opposition
[22] Bruce and Alastair, by their notice of opposition, identified eight specific grounds of opposition being:
(a) The defendants have an arguable defence to the plaintiff’s claims.
(b)The settlement agreement does not require the defendants to provide all of the information sought by the plaintiff.
(c) Much of the information sought by the plaintiff is not relevant to and not required to implement the settlement agreement.
(d) The defendants rely on the warranties in the settlement agreement.
(e) Some of the information being sought by the plaintiff has already been provided to her and/or her advisors.
(f) The plaintiff is seeking some or all of the information for an ulterior purpose.
(g)The plaintiff has not and is not acting in good faith in bringing this proceeding.
(h)Some of the information sought by the plaintiff is trivial and seeking an order of the Court in respect of it is out of all proportion to the matters at issue.
[23] In his submissions, Mr Wallace added to the grounds of opposition by way of response to submissions of Mr Ormsby. Four particular matters, relevant to some categories of information, are essentially additional grounds of opposition being:
(a) Alison is an executor and trustee of the Estate and therefore does not need to rely on Alastair and Bruce to provide information as to Estate assets or transactions.
(b)To the extent that Mr Ormsby’s submissions relied upon a proposition that Alastair and Bruce had through the settlement become bare trustees, there is no pleading to support the assertion and it is not relevant.
(c) Some categories of information pursued by Mr Ormsby on his submissions are different to the categories identified in the statement of claim. While maintaining the fundamental point of opposition that the requested information is unnecessary in relation to re-framed requests for information, Mr Wallace relies on the fact that the summary judgment application, on the pleadings, pursues a different scope of information.
(d)Finally, Mr Wallace referred to the affidavit of Daniel Clements, filed by Alison in purported reply to the defendants’ evidence. Mr Clements is a Melbourne accountant who has been assisting Alison since the settlement. Mr Clements explains the purpose of the information requests by reference to the categories of information sought. Mr Wallace objects to reliance on Mr Clements’ affidavit on the basis that it was not strictly an affidavit in reply and, in any event, Mr Clements did not comply with r 9.43(2) High Court Rules.
[24] I dispose of the issue over Mr Clements’ evidence briefly. I view any assistance of Mr Clements’ evidence as being his identification that he is in fact providing professional support to Alison and of the reasons why, in accounting terms, he wishes to see the requested information. That function, in my view, is very closely aligned to the exercise which Mr Ormsby himself completed through Schedule One to this judgment. I find it to be a potentially helpful cross-check, expressed in an accountant’s language, in considering the cogency of Mr Ormsby’s submissions as to the necessity of information. But, ultimately, what matters is my determination as to whether the requested information is necessary.
[25] Upon that basis I grant leave to Alison to rely on Mr Clements’ affidavit but no further than that I will not be regarding it as expert evidence as such.1
Plaintiff ’s summary judgment application – the principles
[26] The starting point for a plaintiff’s summary judgment application is r 12.2(1) High Court Rules, which requires that the plaintiff satisfy the Court that the defendant has no defence to any cause of action in the statement of claim or to a particular cause of action.
[27] I summarise the general principles which I adopt in relation to this application:
(a) Commonsense, flexibility and a sense of justice are required.2
(b)The onus is on the plaintiff seeking summary judgment to show that there is no arguable defence. The Court must be left without any real doubt or uncertainty on the matter.3
(c) The Court will not hesitate to decide questions of law where appropriate.4
(d)The Court will not attempt to resolve genuine conflicts of evidence or to assess the credibility of statements and affidavits.5
(e) In determining whether there is a genuine and relevant conflict of facts, the Court is entitled to examine and reject spurious defences or plainly contrived factual conflicts. It is not required to accept
uncritically every statement put before it, however equivocal,
1 In terms of r 9.43 High Court Rules.
2 Haines v Carter [2001] 2 NZLR 167 (CA) at [97].
3 Pemberton v Chappell [1987] 1 NZLR 1 (CA).
4 European Asian Bank AG v Punjab & Sind Bank [1983] 2 All ER 508 (CA) at 516.
5 Harry Smith Car Sales Pty Ltd v Claycom Vegetable Supply Co Pty Ltd (1978) 29 ACTR 21 (SC).
imprecise, inconsistent with undisputed contemporary documents or other statements, or inherently improbable.6
(f) In assessing a defence the Court will look for appropriate particulars and a reasonable level of detailed substantiation – the defendant is under an obligation to lay a proper foundation for the defence in the affidavits filed in support of the Notice of Opposition.7
(g)In weighing these matters, the Court will take a robust approach and enter judgment even where there may be differences on certain factual matters if the lack of a tenable defence is plain on the material before the Court.8
(h)The need for judicial caution in summary judgment applications has to be balanced with the appropriateness of a robust and realistic judicial attitude when that is called for by the particular facts of the case. Where a last-minute, unsubstantiated defence is raised and an adjournment would be required, a robust approach may be required
for the protection of the integrity of the summary judgment process.9
(i)Once the Court is satisfied that there is no defence, the Court retains a discretion to refuse summary judgment but does so in the context of the general purpose of the High Court Rules which provide for the just, speedy and inexpensive determination of proceedings.10
[28] The fact that the plaintiff seeks specific performance, which is discretionary relief, is not of itself a bar to summary judgment. Mr Ormsby referred to a number
of cases in which specific performance had been ordered on summary judgment.11
6 Attorney-General v Rakiura Holdings Ltd (1986) 1 PRNZ 12 (HC).
7 Middleditch v NZ Hotel Investments Ltd (1992) 5 PRNZ 392 (CA).
8 Jowada Holdings Ltd v Cullen Investments Ltd CA248/02, 5 June 2003 at [28].
9 Bilbie Dymock Corporation Ltd v Patel & Bajaj (1987) 1 PRNZ 84 (CA).
10 Pemberton v Chappell, above n 3.
11 Hart v Bankfield Farm Ltd HC Timaru CIV-2008-476-72, 21 May 2008; Station Properties Ltd (in rec) v Paget HC Auckland CIV-2009-404-664, 22 December 2009 (overturned on appeal in [2011] NZCA 570, (2011) 21 PRNZ 46 but on different grounds); Jansen v Whangamata Homes Ltd [2006] 2 NZLR 300 (CA); Mariteq Fabricators Ltd v Quigley’s Technical Services Ltd (No
2) [2012] NZHC 2996; McCarthy v McCarthy [2012] NZHC 1555, [2012] NZCCLR 25.
In this context, the most important aspect of the discretion in relation to specific performance is the consideration of whether specific performance is the appropriate remedy. If the requested information is required in this case in order to fully effect the agreed settlement, then specific performance will be the appropriate remedy unless one of the defendants’ particular grounds of opposition (such as lack of good faith) arguably warrants the complete withholding of equitable relief.
The information sought
Prayer A(i) – financial statements and tax returns – draft or final – in relation to the
2014 and 2015 years
[29] Although Alison applied for the financial statements for the 2014 year, those have now been provided and an order is no longer required. To that extent, that application will be dismissed. Insofar as the 31 March 2015 year is concerned, it has now been clarified that neither draft nor final statements or tax returns have been prepared. I have discussed with counsel in the course of submissions that I am concerned not to create additional costs for the parties in the event that, before completion of the accounts, further investigations or discussions may be required with the accountants either because of further information provided or for any other reason raised by the parties with the accountants. I therefore view any direction in relation to the 31 March 2015 financial year as premature. As the summary judgment has to be dealt with in terms of the current pleadings, I will be formally dismissing that aspect of the application. Counsel have indicated that all the parties accept that the financial statements will need to be promptly prepared once the accountants have all the required information.
Prayer A(ii)
[30] I set out the amended form of prayer which Mr Ormsby pursues.
A complete set of bank statements for all bank accounts for the Trust and Estate from 1 December 2013 to the present, including Forsyth Barr statements for Cash Management Accounts, client account (referred to as Account Ledger), custodial entity and all other accounts held at Forsyth Barr.
A complete set of Bank statements for all accounts held by Mrs Helen Bell from 1 December 2013 to the present.
[31] I note that it contains one significant amendment from the statement of claim in that Alison limits the requested period of disclosure to the period from 1
December 2013 (being around the effective date of the audit which was commissioned by the parties for the purposes of what became the mediation in February 2014). In so limiting Alison’s application, Mr Ormsby has recognised that the period from April 2012 through to 1 December 2013 which was originally included is excessive in that it would invite an inspection of accounts which are clearly most unlikely to inform the picture of correct financial accounting since the period of settlement. I regard Mr Ormsby’s concession in the reformulated prayer as to timing to be appropriate.
[32] Mr Ormsby, in his reformulated approach, also seeks a minor amendment to refer to a “custodial entity”. I regard that as minor and in the nature of tidying and clarification. I make an order directing that the prayer for relief on which the interlocutory application is based be amended to read in terms of what I have quoted at [30] from Prayer A(ii).
[33] I then come to deal with the substance of the A(ii) application. It is first necessary to deal with the obligations of the parties under the settlement agreement. I have set out above at [12] in the wording of cl 2 of the agreement on which Alison relies.
[34] By cl 2, the parties agree to act in good faith to make sure all further matters required by the agreement or the subject of the agreement were promptly and efficiently and with all necessary cooperation attended to. This included the obligation in the first sentence of cl 2 to attend to matters necessary to carry out, procure and put in place the terms of the deed. The examples given in that sentence included “clarification of existing information”. It is clear that this obligation was included to enable the parties not only to have accountants carry out accounting functions (such as finalisation of accounts and reporting to the Revenue), but to satisfy the parties that the information on which their professionals would rely was clear.
[35] The evidence in relation to bank accounts is that to date Alison has received bank statements for only some parts of the period from 1 December 2013. I accept Mr Ormbsy’s submission that the copies received to date, which Mr Ormsby characterises as in the nature of “snapshots”, are insufficient to fully clarify for the party who does not have access to them the correct and reliable financial position of the particular entity. Alison’s evidence is that she understands that requests of this kind may take in the order of an hour or so to implement. That was not disputed and I regard it as realistic. I do not anticipate that any disbursement incurred will be disproportionate to the value to the parties of knowing that the information relied on by their professionals is accurate.
[36] Mr Wallace raises a number of concerns.
[37] First, Alison is herself a trustee of the Estate. In other words, she has some legal rights of control in relation to one of the entities whose bank statements are sought. The evidence is that Alison is not a signatory to the bank account. I do not view her trusteeship as an impediment at all to the making of the order she seeks.
[38] Secondly, Mr Wallace raises an issue as to the need to distinguish the three entities involved, namely the Estate, the Trust and Helen personally. I view the need for clarification of the banking position of each of the entities as identical in nature. It is not appropriate to distinguish the position of one entity from any other entity.
[39] Thirdly, Mr Wallace refers to the ground of opposition specifically identified as being that Alison is seeking some or all of the information for an ulterior purpose. The evidence discloses a basis for the defendants having some legitimate concerns in this area in that Alison, in the extent of her requests, may have had a focus somewhat broader than the immediate needs of implementing the settlement agreement. Mr Wallace points to the fact that there has now been the appropriate concession, albeit belatedly, that the relevant period should run if at all from 1 December 2013 in relation to Prayer A(ii) (and similarly narrowed periods in relation to other prayers). Mr Wallace also refers to Mr Clements’ affidavit: the breadth of enquiries Mr Clements has apparently been asked to undertake also has, to a degree, backward- looking (pre-settlement) focus. These matters raise for the defendants a legitimate
concern that Alison, if able to venture into areas which are immaterial to the immediate implementation of the agreement, will further criticise the defendants’ earlier conduct. That is beyond the legitimate scope of implementing the settlement agreement. But Mr Ormsby’s narrowed prayers for relief dispose of any concern as to irrelevant backward-looking focus.
[40] I am left to consider whether, in making any order which allows Alison access to the bank statements from 1 December 2013, Alison might use these bank statements for some ulterior reason. There is no reason to apprehend that with the application properly focused on the present period and with all three parties committed to the implementation and full effect of the agreement, Alison will improperly use the accounting information. If issues arise from her having proper contractual access to information necessary to bring the exercise to an end, then they are issues which have arisen legitimately for Alison’s consideration. She cannot on grounds of such “ulterior motive” be denied access to documents which she and her advisors reasonably require if all relevant information is to be clarified or provided.
[41] To deny her access to what is needed contractually on the basis that issues might arise throughout that period would not be a proper approach to concerns around ulterior purpose. For these reasons, I am satisfied that Prayer A(ii) as recast is appropriate. I will be making an order in relation to it. I will include in any order a period for implementation.
Prayers A(iii), (iv), (vii), (ix), and (xix)
[42] As stated in the statement of claim, these prayers essentially related to the involvement of Forsyth Barr (ForBarr) as the sharebroker for the various entities and the Trust in particular. The single exception to a connection with the ForBarr sharebroking role is that in his amended annexure, Schedule One to this judgment, Mr Ormsby has altered Prayer A(iii) from a request for ForBarr broker statements to a request for broker transaction statements and sale contract notes for any investment held by the trust outside the ForBarr portfolio. This issue arose because it had emerged since the issue of Alison’s proceeding that there is at least one other broker involved.
[43] Mr Wallace submits that the present summary judgment application, which proceeds on the pleadings filed, should not be permitted to expand by the making of orders which cover requests which are new.
[44] The Court appreciates that for all the parties, the move towards finalisation of the settlement has been something of an evolving situation. The fact that further requests have been seen to be appropriate is not surprising. That said, the summary judgment process in a sense pre-empts a trial. The Court should be slow to allow informal amendment of claims to be carried into effect as orders on a summary judgment basis. For reasons I come to, I consider various prayers in relation to ForBarr records to be appropriate. Logically, any other broker records should be dealt with similarly. But I am not prepared to make an order in relation to other records given the state of the pleadings with no reference to other brokers. At the conclusion of my findings in relation to the ForBarr documents. I will briefly comment, obiter, on other broker’s records.
[45] The present form of prayers in relation to the ForBarr documents as consolidated by Mr Ormsby in the attached Schedule is as follows:
(iii) Broker transaction statements and sale contract notes for any investments held by the Trust outside the Forsyth Barr portfolio.
(iv) Finalised Forsyth Barr Quarterly Reports (including the Portfolio Summary, Portfolio Appraisal, Maturity Profile, Transactions, Cash Ledger and Income Summary) for the Trust from 31 March 2013 to the present.
Forsyth Barr Annual Statements (‘Income Reports’ including all schedules, Portfolio Summary, Portfolio Appraisal, Fixed Interest Maturity Profile, Transactions, Contributions and Progress) for the Trust for 12 months to 31 March 2015.
An interim Forsyth Barr Annual Statement for the Trust from 31
March 2015 to the present.
Forsyth Barr Statements of Transactions for the Trust from 19 June
2014 to the present.
Finalised Forsyth Barr Cash Ledger for the Trust from 1 April 2013 to 31 March 2014, and from 20 June 2014 to the present.
(vii) Sale contract notes for the following Trust's investments:
• Auckland International Airport Investment; and
• Auckland Council
(xix) Forsyth Barr client transaction statement and cash ledger (cash management account) confirming closure of all Trust accounts at Forsyth Barr (including funds and investments held by the custodial entity), showing a nil balance and which bank account any remaining funds were transferred to.
[46] The need for a comprehensive picture (for all parties) of the relevant brokerage records and subsequent share transactions is directly parallel to the situation of the bank records. For that reason there is a need for the ForBarr prayers to be granted. The issue which then remains is that there has been some amendment of various of the prayers in Mr Ormsby’s consolidated document. In relation to Prayer A(iv), the word “finalised” has been inserted at the outset, before the reference to various ForBarr documents. Given that counsel have identified an ambiguity in the word “finalised”, I amend that wording for the purposes of this judgment to read “final form of …” in place of “finalised”. The reason for that amendment is apparent when one considers other references to interim documents which have been provided. It is a helpful and an appropriate amendment.
[47] A second concern which Mr Wallace raised in opposition was that there is evidence that at least some of the documents which are the subject of the prayers have been provided. One example given is in relation to quarterly statements. It is apparent from the evidence that Alastair provided some such documents after the commencement of the proceeding. In any event, whether or not other documents have been provided, the parties have the right, in terms of “clarification”, to a comprehensive awareness of the key financial and property information which will inform whether final accounts are reliable. If there is a risk that documents which have been sent are not to hand or have gone astray, it is appropriate that the specific performance order be comprehensive so that the parties are not required to come back through the substantive proceedings for yet further relief which is already adequately framed in the prayers for relief. For that reason, I intend to grant the orders which are consolidated in A(iv) together with A(vii) and A(xix).
[48] Insofar as A(iii) is concerned, which are the broker statements not relating to ForBarr, I would have made such an order had the statement of claim and the interlocutory application specifically addressed that matter. I make this obiter
comment so that the parties are aware of the Court’s desire that they move to finality of their settlements and final distributions rather than to further litigation as to its method of implementation.
Prayer A(x)
[49] Prayer A(x) reads on Mr Ormsby’s reformulation:
Distribution Statements from Property Finance Securities Ltd or Link
Market Services (or other suitable correspondence) covering the period from
1 April 2015 to the present confirming the quantum of all partial principal repayments, the date each payment was made, the bank account the proceeds to [sic] were paid to.
[50] The original version of this in the statement of claim is more extensive in that it reads:
Copies of all correspondence from Link Market Securities and Property Finance Securities Limited (or their receivers KordaMentha in Australia, Brendon Gibson and Grant Graeme in New Zealand) from 29 August 2007 to the present and any other correspondence relevant to the financial position of the Estate and Trust.
[51] For reasons shared with other prayers for relief, Alison has accepted that any relief should appropriately be narrowed so that (in this instance) it deals with only the period from 1 April 2015 as now specified in Mr Ormsby’s reformulation. 1
April 2015 is clearly the appropriate starting point. I view this amendment to the prayer as a helpful narrowing and refocusing which renders the prayer more specific.
[52] Mr Wallace raised a further issue as to the end point of “to the present”, noting that Mr Ormsby’s formulation would curtail the obligation to provide information to documents already existing at the date of the Court’s order. The subject-matter is an impaired investment which was and still is going to take time to realise. Clearly, as Mr Wallace noted, the settlement agreement requires that as monies are received down to the final distribution, all such information should be available to all parties. Mr Wallace did not put it quite in those terms but that is the essence of the point. The wording “to the present” is inapt in that “to the present” literally would mean to the date of the statement of claim.
[53] I agree that if there is to be an order, it must logically extend to the date of final distribution. The Prayer clearly ought to have read “to the date of final distribution”. An alternative would be to adjourn this particular prayer for further consideration upon final distribution but that would clearly be unhelpful to all. In the circumstances, I make an order in terms of Mr Ormsby’s reformulated Prayer A(x) but with the words “to the present” amended to read “to the date of final distribution of the proceeds of realisation”.
Prayer A(xi)
[54] It appears from evidence in the form of correspondence from Link Market Services dated 26 June 2014, that the Trust became owner of a debenture in Property Finance at that date. There is also a statement of Property Finance evidencing the transfer from a closed ForBarr account of $36,299.98 relating to the debenture transfer. This has led Alison to pursue Prayer A(xi) which in the statement of claim reads:
Explanation or evidence of the payment of $36,299.98 to Link/Property
Finance from the Forsyth Barr client account on 26 June 2014.
[55] Mr Ormsby’s reformulation is as follows:
Information to confirm that the payment of $36,299.98 to Link/Property Finance from the Forsyth Barr client account on 26 June 2014 was an internal transfer as asserted by Bruce Bell at [7(xi)] of his affidavit, and not payment for a new investment as stated by the Link Market Securities letter.
[56] Mr Ormsby’s reformulation flows from evidence of Bruce Bell. Mr Bell states that this was an “internal transfer” with the precise meaning of that term not being clarified. It is appropriate on any view that those interested in the assets have clarified what the transaction involved and whether it involved a transfer of real money or something less as might be indicated by “internal transfer”. Rather than choosing between the wording of the original prayer and the reformulation, the following wording will clearly define the required information. The Prayer A(xi) relief to be granted will be in these terms:
Documents which tend to explain what the $36,299.98 referred to in a
Property Finance statement dated 26 June 2014 represents and, in particular,
whether it represents a transfer of cash or its equivalent and from whose account.
Prayer A(xiii)
[57] The original prayer in the statement of claim reads:
Gabites Limited client account statements for the Trust and Estate showing current account balances.
[58] Mr Ormsby’s reformulation as set out in the schedule hereto reads:
Gabites Limited client account transaction statements for the Trust and Estate showing the date these client accounts were closed, a Nil balance for both, and the bank account that any remaining funds were transferred to. Specifically, a transactions report reflecting all transactions for the Trust/Estate made through Gabites’ general and special trust accounts.
[59] By oversight, Mr Ormsby had not carried into his reformulation a start date for relevant statements. He has confirmed that there should be added to his reformulation the words “with effect from 1 April 2013”. Subject to that, given Mr Wallace’s pursuit of the opposition to any reformulation which in any significant way alters the wording of a prayer for relief, Mr Ormsby indicates that with the same date, the plaintiff would accept a return to the original Prayer in A(xiii). The wording of A(xiii) as reformulated is in my view focused and clearer – especially for those at Gabites Ltd, who are likely to be providing the information.
[60] I am satisfied that, in order to meaningfully reconcile 2014 and 2015 financial details when they become available, the parties will need to understand the movements by which the 31 March 2014 position came to be as it was. The start date of 1 April 2013, thereby providing information as to movements in that year, is appropriate.
[61] Mr Wallace noted that I had indicated that the Court will not be prepared in terms of Prayer A(i) to make directions in relation to financial accounts to 31 March
2015 which have yet to be prepared. I do not view the documents of Gabites Ltd as being in a similar category to the financial statements which have yet to be prepared. The Gabites information already exists. It is appropriate that the relevant, existing information is available now even if it is not used until a later point. If it is before
everyone now, its relevance can now be assessed. I will make an order in terms of Mr Ormsby’s reformulated Prayer A(xiii), but with the added words, in relation to all statements, “with effect from 1 April 2013”. I will also add to the order by way of clarification that the order relates to documents “which already exist or can be generated with ease by Gabites Ltd on request”.
Prayer A(xvii)
[62] The settlement agreement provided under Further Terms, cl (h) for the establishment of the Helen Bell Trust. The agreement was specifically that all Helen’s assets, both real and personal property, but not including any personal effects were to be placed into the trust (emphasis added).
[63] The prayer for relief reads:
List of Mrs Helen Bell’s personal items that are held in storage and whether such items have been sold and details of those items together with the amounts received for each.
[64] Mr Ormsby, in reliance on the evidence filed, indicates that a list of Helen’s personal items has been sought to ensure that the items being transferred into the new trust are accurately identified. The difficulty is that much of the correspondence relating to the items which concern Alison are at least arguably personal effects. If they are personal effects, they fall outside the purview of the settlement agreement. On the other hand, it is clear (as Mr Wallace accepts) that the duty of cooperation in relation to the implementation of the agreement would extend to the parties cooperating on identifying what falls within and without the category of trust assets.
[65] I will be declining the application for an order in relation to Prayer A(xvii) but add this – had the application been formulated in terms of an order for the parties to take specific steps and co-operate to identify the assets which will be transferred into the trust, I would not have found an arguable defence to such an application. It would have been appropriate to grant an application for an order that the defendants within a finite period (say, five days) identify the assets they proposed to be transferred into the trust and the plaintiff within five days thereafter indicate her
acceptance or otherwise of that proposal. It would then remain for the parties to resolve any disagreement.
Prayer A(xx)
[66] Prayer A(xx) also relates to Helen’s assets. It is common ground that under Further Terms, cl (h), all her money and financial investments are to form part of the corpus of the Helen Bell Trust.
[67] The prayer for relief asked simply for the quarterly portfolio reports for Helen for the last two years as prepared by ForBarr (understood to be her investment manager).
[68] Mr Ormsby has reformulated the application to make more specific reference not only to portfolio reports generally but to matters such as portfolio appraisal, maturity profile, transactions, cash ledger and income summary. I view that as appropriate, further definition. Instead of a two-year period, Mr Ormsby has reformulated the application to request the reports “from 31 December 2013”. Mr Wallace responsibly accepts that nothing turns on that difference.
[69] Finally, however, Mr Ormsby’s reformulation would encompass reports of any other custodial entities holdings on behalf of Helen. I view that latter aspect as an extension which, as with some of the earlier extensions, sits beyond the compass of the present pleading. I should not appropriately deal with it as a formal order. Again, it is appropriate that I add an observation. I will be making an order in terms of Mr Ormsby’s reformulated Prayer A(xx) but without the reference to holdings of any other custodial entity. It will be clear to the parties from this judgment that the Court sees a logical similarity of issue between the reports held by the various entities which happen to be managing any aspect of Helen’s holdings. It will be for the parties to see, as with other issues, if they can deal with the other entities without repleading and the Court having to deal with a minor matter at a substantive hearing.
Prayer A(xxi)
[70] It transpires that Prayer A(xxi) was a duplication of part of an earlier prayer relating to Gabites Ltd records. To the extent that that prayer was included, the summary judgment application will be dismissed.
Timing and provision of information
[71] Upon discussion with counsel, the order I will make will be that in each case the information be provided within 15 working days (by 18 December 2015). I will reserve leave to Mr Wallace to apply by memorandum should the particular provider of information reasonably require further time, Mr Wallace’s memorandum to attach a letter from the relevant provider explaining the situation and the likely further time needed. I will deal with any application for extension on the basis of Mr Wallace’s memorandum and on the papers.
Further orders sought
Prayer B
[72] By Prayer B, Alison sought to move forward the finalisation of the deed for the Helen Bell Trust. The matter was frankly addressed in evidence for the defendants who accepted that they had not responded to Alison’s draft deed. I accept that the response was either overlooked or, for some other reason, neglected in the course of everything else that was occurring.
[73] Happily, the parties have now approved the form of deed. Matters in that regard can move forward. One aspect of the relief I have granted today will deal with assets which are transferred into the trust, but the Court anticipates on the evidence that the deed will now be finalised and the trustee will take office.
[74] The summary judgment application for relief in terms of Prayer B will be dismissed.
The future of this proceeding
[75] I have recognised that in some areas my decision on the summary judgment application will not resolve in a final way some substantive aspects of the parties’ obligations. Those issues conceivably might require the use of this proceeding to finalise substantive rights. I will therefore be adjourning the substantive proceeding for mention in the List at 11.45 am, 11 February 2016. The attendance of counsel will be excused if a memorandum is filed beforehand as to progress or a discontinuance is earlier filed. The parties will understand from this judgment that the Court is not expecting that it will transpire that there is a need for any further Court intervention as a result of cooperation which will flow from the orders contained in this judgment.
Costs
[76] Costs would normally follow the event for a successful summary judgment plaintiff applicant. I have heard from counsel, having given an indication of my tentative view that this is a case in which costs should follow the event on a 2B basis.
[77] Mr Ormsby submitted that Band C may be more appropriate having regard to the volume of material involved in preparation. I see the volume as largely clerical rather than legal as the plaintiff filed a substantial bundle of exhibits attached to numerous affidavits. The narrative evidence itself was not of unusual length.
[78] Mr Wallace submitted that this is more appropriately a case in which costs should lie where they fall. He recognises that it is not (as he put it) “a numbers game” of adding up the items on which parties have succeeded or failed. But he points to a number of matters which have, to some extent or other, complicated the proceeding or inevitably failed such as some relatively trivial prayers for relief which fell away on reflection. I share Mr Ormsby’s view that, preponderantly, the matters which fell away relate to a degree of progress which was achieved after the issue of proceedings in further information arising. That led, in some cases, to amendment of prayers and in other cases, abandonment of prayers.
[79] I have to stand back and reach an overall view of what is just. I am satisfied that to some extent the application has been complicated by a degree of unnecessary detail sought by the applicant. That, to an extent, has complicated the application and the opposition rather than the hearing itself. I accept the tenor of Mr Ormsby’s submissions that the issues which needed hearing had become clear by September
2015. I view a 2B award as very close to the mark but recognise that the applicant plaintiff should incur a modest consequence assessed in relation to the initiation of opposition which identified some issues which had been unnecessarily pursued (and therefore fell away). There will be a reduction of 10 per cent on a 2B calculation. That will relate to costs. Disbursements should be on a full basis because the proceeding was properly commenced. My order will be that the defendants jointly and severally pay costs on the basis of a 2B award reduced by 10 per cent together with disbursements to be fixed by the Registrar. Costs to be calculated only on the interlocutory application and hearing with costs on the substantive proceeding reserved.
Orders
[80] I order:
(a) As to Prayer A(ii), the defendants are to provide the plaintiff with:
(i)a complete set of bank statements for all bank accounts for the Trust and Estate from 1 December 2013 to the present, including Forsyth Barr statements for Cash Management Accounts, client account (referred to as Account Ledger), custodial entity and all other accounts held at Forsyth Barr; and
(ii) a complete set of Bank statements for all accounts held by Mrs
Helen Bell from 1 December 2013 to the present.
(b)As to Prayers A(iv), (vii), and (xix), the defendants are to provide the plaintiff with:
(i)the final form of the Forsyth Barr Quarterly Reports (including the Portfolio Summary, Portfolio Appraisal, Maturity Profile, Transactions, Cash Ledger and Income Summary) for the Trust from 31 March 2013 to the present;
(ii)Forsyth Barr Annual Statements (‘Income Reports’ including all schedules, Portfolio Summary, Portfolio Appraisal, Fixed Interest Maturity Profile, Transactions, Contributions and Progress) for the Trust for 12 months to 31 March 2015;
(iii) an interim Forsyth Barr Annual Statement for the Trust from
31 March 2015 to the present;
(iv) Forsyth Barr Statements of Transactions for the Trust from 19
June 2014 to the present;
(v)the final form of the Forsyth Barr Cash Ledger for the Trust from 1 April 2013 to 31 March 2014, and from 20 June 2014 to the present;
(vi)sale contract notes for the following Trust's investments: Auckland International Airport Investment; and Auckland Council; and
(vii)Forsyth Barr client transaction statement and cash ledger (cash management account) confirming closure of all Trust accounts at Forsyth Barr (including funds and investments held by the custodial entity), showing a nil balance and which bank account any remaining funds were transferred to.
(c) As to Prayer A(x), the defendants are to provide the plaintiff with distribution Statements from Property Finance Securities Ltd or Link Market Services (or other suitable correspondence) covering the period from 1 April 2015 to the date of final distribution of the
proceeds of realisation, confirming the quantum of all partial principal repayments, the date each payment was made, the bank account the proceeds to were paid to.
(d)As to Prayer A(xi), the defendants will provide the plaintiff with documents which tend to explain what the $36,299.98 referred to in a Property Finance statement dated 26 June 2014 represents and, in particular, whether it represents a transfer of cash or its equivalent and from whose account.
(e) As to Prayer A(xiii), the defendants will provide the plaintiff with
Gabites Limited client account transaction statements with effect from
1 April 2013 for the Trust and Estate showing the date these client accounts were closed, a Nil balance for both, and the bank account that any remaining funds were transferred to. Specifically, the defendants are to provide a transactions report reflecting all transactions for the Trust/Estate made through Gabites’ general and special trust accounts. This order relates to documents which already exist or can be generated with ease by Gabites Limited on request.
(f) As to Prayer A(xx), the defendants will provide the plaintiff with the final form of the Quarterly Portfolio Reports (including Portfolio Appraisal, Maturity Profile, Transactions, Cash Ledger and Income Summary) from Helen Bell’s investment manager from 31 December
2013 to the present.
(g) In each case, the information is to be provided by 18 December 2015. (h) As to all remaining Prayers, the summary judgment application is
dismissed.
(i) The defendants are to pay the plaintiff’s costs of the summary
judgment application (but not of the pleading of the substantive claim)
calculated on a 2B basis less 10 per cent, together with disbursements to the fixed by the Registrar.
(j) The proceeding is adjourned to the List at 11.45 am on 11 February
2016.
Associate Judge Osborne
Solicitors:
Wynn Williams, Christchurch
Tavendale & Partners, Christchurch
Counsel: M J Wallace, Barrister, Christchurch
SCHEDULE ONE
ANNEXURE ONE: INFORMATION SOUGHT BY ALISON TO IMPLEMENT SETTLEMENT
SOC Information sought Reasons (i) 31 March 2014 financial statements for Trust
and Estate with errors corrected.
To explain what appear to be
discrepancies/errors in the financial statements.
31 March 2015 (draft and final) financial
statements and tax returns for the Trust and
Estate when completed.(ii) A complete set of bank statements for all bank
accounts for the Trust and Estate from 1
December 2013 to the present, including Forsyth Barr statements for Cash Management Accounts, client account (referred to as Account Ledger), custodial entity and all other accounts held at Forsyth Barr.
A complete set of Bank statements for all accounts held by Mrs Helen Bell from 1
December 2013 to the present.
To verify position as at settlement date,
confirm that funds have been dealt with appropriately post-settlement and ensure that mum's assets/investments are properly accounted for in the final distribution/transfer to the new trust.
(iii) Broker transaction statements and sale contract
notes for any investments held by the Trust outside the Forsyth Barr portfolio.
To reconcile sales and purchases of
investments held outside the Forsyth Barr portfolio, their investment details, and to confirm their sale and transfer of sale proceeds into the WW Stakeholder Account.
(iv) Finalised Forsyth Barr Quarterly Reports
(including the Portfolio Summary, Portfolio Appraisal, Maturity Profile, Transactions, Cash Ledger and Income Summary) for the Trust from 31 March 2013 to the present. Forsyth Barr Annual Statements (‘Income Reports’ including all schedules, Portfolio Summary, Portfolio Appraisal, Fixed Interest Maturity Profile, Transactions, Contributions
and Progress) for the Trust for 12 months to 31
March 2015.An interim Forsyth Barr Annual Statement for the Trust from 31 March 2015 to the present. Forsyth Barr Statements of Transactions for the Trust from 19 June 2014 to the present. Finalised Forsyth Barr Cash Ledger for the Trust from 1 April 2013 to 31 March 2014,
and from 20 June 2014 to the present.
To reconcile transactions and investment
sales during this period.
Some interim reports have been provided and one Quarterly Report was provided after I swore my first affidavit but I require the full set of this information to properly reconcile sales of investments and transactions during this period.
(vii) Sale contract notes for the following Trust's To confirm the sale of the Auckland
SOC Information sought Reasons investments:
· Auckland International Airport
Investment; and
· Auckland Council
International Airport fixed interest
investment (43,000 units at 7.25% maturing on 7 November 2015), and also the Auckland Council investment (50,000 units at 6.42% maturing on 24 March
2014).
(x) Distribution Statements from Property Finance
Securities Ltd or Link Market Services (or other suitable correspondence) covering the period from 1 April 2015 to the present confirming the quantum of all partial principal repayments, the date each payment was made, the bank account the proceeds to were paid to.
To reconcile/match what Property Finance
Securities paid out and what has been paid into the WW Stakeholder Account.
(xi) Information to confirm that the payment of
$36,299.98 to Link/Property Finance from the Forsyth Barr client account on 26 June 2014 was an internal transfer as asserted by Bruce Bell at [7(xi)] of his affidavit, and not payment for a new investment as stated by the Link Market Securities letter
To verify the reason for a payment to
Link/Property Securities from the Trust of
$36,299.98 on 26 June 2014.(xiii) Gabites Limited client account transaction
statements for the Trust and Estate showing the date these client accounts were closed, a Nil balance for both, and the bank account that any remaining funds were transferred to. Specifically, a transactions report reflecting all transactions for the Trust/Estate made through Gabites' general and special trust accounts
To reconcile with the 31 March 2014 and
31 March 2015 (when completed)
financial statements and tax returns for the Trust and Estate, and verify their accuracy. In light of the issues I have identified, emails confirming nil balances, which Bruce produces at [7(xiii)] of his affidavit, are insufficient.
(xvii) List of Mrs Helen Bell's personal items that are
held in storage and whether such items have been sold and details of those items together with the amounts received for each.
To ensure that the items being transferred
into Mum’s new trust are accurately
identified.(xix) Forsyth Barr client transaction statement and
cash ledger (cash management account) confirming closure of all Trust accounts at Forsyth Barr (including funds and investments held by the custodial entity), showing a nil balance and which bank account any
remaining funds were transferred to.
To provide details of period post 31 March
2015 (earlier periods will be covered by other Forsyth Barr material requested above).
(xx) Finalised Quarterly Portfolio Reports
(including Portfolio Appraisal, Maturity
Profile, Transactions, Cash Ledger and Income Summary) from Helen Bell’s investment manager from 31 December 2013 to the present. Reports of any investments and/or funds held by any custodial entity on Helen Bell’s behalf.
To confirm the identity of the investment
manager and the investments, and ascertain Mrs Bell’s financial position and the assets to be transferred into the Helen Bell Trust.
To reconcile funds/distributions made to Mrs Bell to and from the Trust and Estate. (I note that some interim reports have been provided but not the full and finalised report deck)
(xxi) A Transaction Statement showing all
transactions affecting the Estate’s Current
Account within the Trust from 1 December
2013 to the present.
To ascertain how much money is owed by
the Trust to the Estate to ensure that the inter-entity loan/current accounts match and can be off-set against each other.
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