Bloss v Van der Goot
[2019] NZHC 1360
•13 June 2019
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2017-404-1997
[2019] NZHC 1360
BETWEEN JUSTINA SOPHIA BLOSS
as executrix of the Estate of CLASINA VAN DER GOOT
Plaintiff
AND
AGE VAN DER GOOT
First Defendant
DUTCH VILLAGE TRUST
Second Defendant
FAM-2019-090-107 and 108 BETWEEN
AGA VAN DER GOOT
PlaintiffAND
JUSTINE SOPHIA BLOSS
Defendant
Hearing: 13 June 2019 Appearances:
E J Grove for the Plaintiff
U Patel for the First Defendant
M N Tolich for the Second DefendantJudgment:
13 June 2019
ORAL JUDGMENT OF ASSOCIATE JUDGE R M BELL
Solicitors:
Davenports West (N Craig), Henderson, Auckland, for the Plaintiff Muller Law (S A Inglis), Pakuranga, Auckland, for the First Defendant
Corban Revell (M N Tolich), Henderson, Auckland, for the Second Defendant
Copy for:
Chris Patterson Barrister Ltd (C J Patterson/E J Grove), Auckland, for the Plaintiff Usha Patel, Auckland, for the First Defendant
JUSTINA SOPHIA BLOSS v AGE VAN DER GOOT [2019] NZHC 1360 [13 June 2019]
[1] Today I have heard applications for discovery. First, I give the background to the proceeding. The facts pleaded in the statement of claim provide a suitable context.
[2] The plaintiff, Justina Sophia Bloss, is the executrix of the estate of her mother, Clasina Van der Goot, who died in 2011. The first defendant, Age Van der Goot, was in a relationship with Clasina Van der Goot, and they married in 1994. The marriage ended with the death of Clasina in 2011. The second defendant is the Dutch Village Trust, a charitable trust which runs a retirement village in Henderson.
[3] In 1988, Clasina and her then husband, William Townsend, bought an occupation licence for a unit in the retirement village. Under a written agreement, they had the right to occupy the unit. The licence would expire when their survivor died. The right to occupy would be sold. The Village Trust would take 10 per cent of the sale proceeds, and the rest would be paid to the estate of the survivor. They started living in unit 54 but later moved into unit 55. Clasina’s husband died in June 1989 and the right to occupy the unit vested in Clasina solely by survivorship. Sometime afterwards, Clasina entered into a relationship with Age Van der Goot. He moved in to live with her. They married in July 1994. In her will of 2001, Clasina gave Age the right to live in unit 55 during his lifetime and upon his death the proceeds of sale of the occupation licence would go into the residue of her estate. She left the residue to Justina, the plaintiff.
[4] The statement of claim pleads that the Trust advised Clasina and Age that it had lost the original licence for unit 55 and sent a replacement copy. That showed Clasina and Age as joint licensees. Clasina and Age signed and returned an acknowledgment. Clasina died in January 2011. Probate of her will was granted on 17 February 2011. Age remained living in unit 55. The pleading says that while he lived in the unit he had no legal right to do so; his occupation was simply by dint of the consent of the Trust. Age’s faculties weakened and in 2016 he moved out of unit 55 and into a care centre. He has been diagnosed as suffering from dementia and is represented in this proceeding by his son, Gregory, who has an enduring power of attorney. That authority to represent his father has been confirmed by an order made
in the Family Court. Once Age vacated unit 55, the Trust sold the unit and paid the proceeds of sale (with a 10 per cent deduction) to Gregory on behalf of Age.
[5] As executrix of her mother’s estate Justina sues the Trust for breach of contract, for not paying the proceeds of sale to the estate. She sues Age in unjust enrichment for having received the entire proceeds of sale.
[6] In response Age began proceedings in the Family Court - under the Property (Relationships) Act 1976 and under the Family Protection Act 1955. To bring his claim under the Property (Relationships) Act, he needs an order extending time for him to exercise Option A.1 He also needs an extension of time to bring a claim under the Family Protection Act.2 That proceeding has been transferred to this court under s 38A of the Property (Relationships) Act.
[7] This case is essentially a relationship property matter, at least as between the estate of Clasina and Age, represented by Age’s son Gregory. For a relationship property claim, the total assets are about $423,000. That is not a large estate, either in estate litigation or in ordinary relationship property litigation. It means that the parties need to be circumspect about the steps they take lest costs consume the funds. To that end, I directed a judicial settlement conference to see whether the matter could be resolved at an early stage before costs mounted. I was told that some discovery would be needed before there could be a judicial settlement conference. I thought that the matter could be simply resolved in a short case management conference, but Mr Grove said the issues were more complicated, so there has been a formal hearing to decide discovery.
[8] Ms Patel has cited Kós J’s decision in Dixon v Kingsley as an authority on discovery for relationship property proceedings in the Family Court. That approach is helpful for relationship property proceedings in this court. Kós J stated the principles as follows:3
1 Property (Relationships) Act, s 62(2).
2 Family Protection Act 1955, s 9.
3 Dixon v Kingsley [2015] NZHC 2044 at [20].
(a)A robust approach should be taken to discovery consistent with the purposes and principles of the Act: the need for just division, but also inexpensive and efficient access to justice.
(b)Such discovery must not be unduly onerous.
(c)Such discovery must be reasonably necessary at the time sought.
(d)The scope of discovery should therefore be tailored to the need of the Court to dispose, justly and efficiently, of relationship property issues under the Act.
(e)More substantial discovery may well be ordered by the Court where it has reason to believe that a party has concealed information or otherwise sought to mislead either the other party or the Court as to the scope of relationship property. But even here, the scope of discovery should be no more than is required for the Court to fairly and justly determine relationship property rights. It is just that in such a situation, more is likely to be required to meet that requirement.
[9] It is important also to understand how relationship property litigation generally works. Under the Property (Relationships) Act, the court will order a division of property of the parties upon a triggering event. That triggering event may include separation, dissolution of marriage, bankruptcy and death. An inventory is taken of the parties’ assets. The property is then categorised as relationship property or separate property. Separate property is not divided between the parties (subject to exceptions such as where one party has made contributions to the separate property of another), and relationship property is generally divided equally between the parties. There are, of course, exceptions to these general statements. The important thing is that the assets are ascertained as at the date of the triggering event – be it separation, death, bankruptcy, dissolution of marriage and the like. While there may be narrative affidavits dealing with events over the course of the relationship, the important thing is that the inventory-taking looks to the assets when a division is to be carried out.
[10] These rules for division of property take the place of other rules which would otherwise apply to the division of property between spouses. That becomes clear under s 4 of the Property (Relationships) Act which says that the Act applies in place of the rules and presumptions of the common law and equity to the extent that they apply to transactions between spouses or partners. Relevantly, section 4(4) says that in proceedings that are not under the Act, any question relating to relationship property
arising between spouses or partners, or either of them, the question must be decided as if it had been raised in proceedings under the Act.
[11] That has a bearing on the plaintiff’s claim against Age for unjust enrichment. That claim is that Age has received an asset which rightly belongs to Clasina. It is, then, a claim in respect of a transaction between the parties as to their rightful entitlement. Ultimately that question of entitlement falls to be decided as a relationship property question. So, there is a certain inevitability that relationship property issues are going to arise in this case. Leave is likely to be granted to elect Option A, because it seems that Age may be able to defend the claim by invoking s 4. The court will have to decide the point anyway.
[12] For this proceeding, unit 55 in the retirement village was the family home under the Property (Relationships) Act. There will be a contest as to title. I understand that the plaintiff will allege that Clasina never effectively transferred her interest in unit 55 to Age, that he did not live in the unit as survivor but stayed there by acquiescence of the Village Trust. But the point remains that the unit was a family home and was used as such at the end of the relationship, that is, as at the death of Clasina. The interest in the unit will fall for division as relationship property.
[13] For the period after Clasina’s death the legal position may well be unclear. There will be questions whether they both owned the unit while Clasina was alive and whether Clasina really understood the effect of signing the acknowledgment. The position does not seem to have been clear to everyone at the time. For this decision I do not to express any conclusive views.
[14] I now turn to the discovery requests. Justina has sought discovery of classes of documents:
(a)Age’s bank accounts, statements and financial records from the time of the commencement of the relationship in about 1991;
(b)Age’s bank accounts and financial records around the period of Clasina’s death;
(c)documentation relating to the transfer of the occupancy licence into both their names; and
(d)documentation relating to when Age ceased being a manager of the retirement village.
She also seeks an order setting aside claims to privilege for certain documents of Age’s legal advisors.
[15] It is important to see how these discovery requests can be tied to relevant issues in the proceeding. Mr Grove says that there may be a possible issue under s 16 of the Property (Relationships) Act. It is understood that Age had lived in New Plymouth and owned a property there which was sold. The date of sale is not known. In deciding whether s 16 of the Property (Relationships) Act applies it will be necessary to see whether he owned that New Plymouth property at the time that he entered into his relationship with Clasina. I enquired whether Gregory could provide that address to the lawyers acting for Justina. That would allow them to make enquiries, search the title and find out the date of sale. That struck me as a relatively efficient way of determining whether the property was owned as at the date of the commencement of the relationship. Ms Patel tried to persuade me that s 16 would not apply in any event. For this decision, I do not need to go down that track. It is sufficient to say that an issue under s 16 has been triggered and it seems to be a real one. There may be a question as to how s 16 ought to be applied in the circumstances of this case. Ms Patel, for example, refers to payments that Age made which were to the benefit of the plaintiff personally, rather than for Clasina - payments in the order of $150,000. That might be raised as a matter that comes under the exercise of the discretion under s 16(3), but I should not pre-empt that now.
[16] Next, Mr Grove said that there is an arguable claim that extraordinary circumstances justify a departure from equal sharing under s 13 of the Property (Relationships) Act and that justified obtaining all bank statements. I do not regard a claim for extraordinary circumstances as viable in this case. The relationship lasted for over 20 years. It was by all accounts a happy relationship. While it is not clear how much, if any, capital Age brought into the relationship, monetary contributions
are not decisive. That has been well established under matrimonial property decisions going back to the 1970s.4 Given the length of the relationship, the suggestion that there should be some adjustment because of different capital contributions to the marriage is not reasonably arguable and does not justify a search for bank statements and accounting records going back into the 1990s. I dismiss this part of the application on the ground of irrelevance. But I would also rule against it as being disproportionate. It is important that this litigation be conducted with some economy to avoid unnecessary costs building up.
[17] The next item is bank statements around the time of the death of Clasina. Gregory has sworn an assets and liabilities affidavit, which makes adequate disclosure. I understand there are no objections to disclosure of bank statements around the time of her death.
[18] Now for documentation relating to the transfer of the occupancy licence into both their names. Mr Grove accepts that there has been a search for documents, some documents have been made available, reasonable searches have been made, and nothing further has been found.
[19] The same applies to the next category, relating to when Age ceased to be the manager of the retirement village.
[20] Finally, there is the question of setting aside the privilege claim. The privilege claim arises in connection with the payment of the proceeds of sale of unit 55 to Age. The claim to set aside the privilege is made under s 67 of the Evidence Act 2006. That provides that the court:
must disallow a claim of privilege … in respect of a communication or information if satisfied there is a prima facie case that the communication was made or received, or the information was compiled or prepared, for a dishonest purpose or to enable or aid anyone to commit or plan to commit what the person claiming the privilege knew, or reasonably should have known, to be an offence.
4 Martin v Martin [1979] 1 NZLR 97 (CA) at 99; See also Property (Relationships) Act 1976, s 18(2).
There is no suggestion that any offence was committed. Instead, the argument is that the documents for which privilege is claimed were made for a dishonest purpose. The “dishonest purpose” is said to have arisen from the circumstances in which the proceeds of sale of unit 55 were paid to Age.
[21] Mr Grove took me through certain correspondence where the issue had been dealt with at different times. In a letter sent in February 2009, lawyers for the Village Trust had identified that there were difficulties with the title question. The letter said in part:
If the new agreement is enforceable, should Mrs Van der Goot die before Mr Van der Goot then the agreement will vest solely in Mr Van der Goot and upon his termination of the agreement he will be entitled to the termination proceeds. We understand from your note that this may not be Mrs Van der Goot’s intention and she may expect the termination monies to be paid to her daughter, Justina Bloss.
Mrs Van der Goot’s will states that Mr Van der Goot is to have the right to use and occupy her occupation licence of unit 55 during his lifetime. This direction is not enforceable if Mrs Van der Goot is sole licensee as on her death her licence automatically terminates, therefore there would be no right for Mr Van der Goot to remain in the dwelling. The direction is also unnecessary if they are joint tenants as Mr Van der Goot will have a legal right to remain in the dwelling.
If termination proceeds are to be paid to Mrs Van der Goot’s daughter, Mr and Mrs Van der Goot need to legally address this and ensure it is correctly documented. This could be addressed in part by the parties completing a direction for payment
There are complex relationship property issues involved here and the Dutch Village should not involve itself in these issues. The parties should be advised to obtain separate legal advice to ensure that their respective rights are protected.
We know that lawyers acting for Age received that letter, because they referred to it in correspondence in 2014. When the property was sold, those lawyers asked for the proceeds of sale to be paid out in the name of Age and expressly directed that that be shown as Age alone. Mr Grove argued that that showed sharp practice, because the lawyers acting for Age knew about the 2009 letter and its analysis of problems relating to the legal position.
[22] Under s 67 it is not enough just to suspect a dishonest purpose. It has to be shown to a prima facie standard.5 If the conduct is consistent with conduct that is not dishonest, the prime facie test has not been satisfied. Here, lawyers acting for Age requested payment from the Village Trust. It was for the Village Trust to consider the request for payment and to decide whether to accede to it or not. There is no suggestion of dishonesty on the part of the lawyers in requesting payment of the proceeds. It was for the Village Trust, on receiving the request, to decide to whom the money should be paid. If the Village Trust was in doubt, it could seek directions from the court by way of an interpleader proceeding. The fact that those steps were not taken by the Village Trust does not indicate dishonesty on the part of the lawyers acting for Age. I see no reason to think that there has been any dishonesty on their part or that they have been party to some dishonest purpose by Age or Gregory. I do not accept the claim to set aside the privileged communications between Age or his son, Gregory, and the lawyers representing them on this matter.
[23]The next matter is discovery by Justina as executrix.
[24] As this is a relationship property proceeding, both sides should file and serve assets and liabilities affidavits. That applies equally to proceedings in this court as to relationship property proceedings in the Family Court. That is to ensure that the appropriate inventory is taken. To that end, an affidavit from Age has already been provided.
[25] As I am requiring discovery for a judicial settlement conference, to keep costs down, I direct that when Justina files her “will say” statements for the judicial settlement conference, she should also provide an assets and liabilities statement. She should also provide disclosure of bank statements for the six months before Clasina’s death. The only purpose in directing that is to check that there have not been any dispositions of property in the six months before her death.
[26] In this decision I have given various rulings and I have expressed views as to substantive issues in the case. Mr Grove wishes to keep those issues alive in case this case goes to a formal hearing. Mr Grove is, of course, entitled to keep those issues
5 Gemini Personnel Ltd v Morgan & Banks [2001] 1 NZLR 672 at 679-680.
alive and to argue them afresh at a defended hearing. Equally he will bear in mind that pursuing issues that are not reasonably arguable may have costs consequences.
[27] Another issue is the files in the control of Mr John McIntosh. Mr McIntosh was a West Auckland lawyer who has had different roles affecting these parties. At one stage he acted as lawyer for the Dutch Village Trust. He was chairman of the Trust, and he also acted for Age. The parties agree that efforts should be made to see what files he has in his control and that they should be made available as a matter of discovery. I encourage their efforts in that regard.
[28] On costs, the plaintiff has been generally unsuccessful, barring the one matter of requiring the address of the New Plymouth property to be provided. Costs follow the event. The unsuccessful party should pay the costs of the other parties. No one seeks increased or reduced costs. I order that the plaintiff is to pay the first defendant costs under category 2. I trust that counsel will be able to agree on costs. It is likely that for most steps band B would be appropriate, but that is a matter for counsel to discuss. If they cannot agree, memoranda may be filed and I will decide costs on the papers.
[29] As to costs for the second defendant, Mr Tolich proposes that they be reserved. I concur. Mr Tolich’s purpose in attending today was partly to observe and to see how he could assist the court. I thank him for his assistance. The question of costs for the Village Trust should be resolved later.
……………………………….
Associate Judge R M Bell
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