Blumenthal v Stewart - [2014] NZHC 1924

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

CIV-2014-454-90 [2014] NZHC 1924

IN THE MATTER of the J H MATHIESON TRUST

BETWEEN

COLIN PAUL BLUMENTHAL Plaintiff

AND

BRUCE ANTHONY STEWART Defendant

Hearing: 1 August 2014

Counsel:

H A Cull QC for Plaintiff
J M Morrison for Defendant

Judgment:

15 August 2014

JUDGMENT OF WILLIAMS J

I direct that the delivery time of this judgment is
11.00 am on the 15th day of August 2014.

Solicitors: McIntosh & Signal, Feilding, for plaintiff
Rainey Collins, Wellington, for defendant

BLUMENTHAL v STEWART [2014] NZHC 1924 [15 August 2014]

Introduction

[1] John Hawthorn Mathieson died on 1 February this year leaving an estate valued at just over $486,000 and a three acre semi-rural property in Manawatu vested in the J H Mathieson Trust (the Trust) of which the deceased was settlor, co- trustee and contingent beneficiary. The Trust property is now the subject of a sale and purchase agreement to a third party in the sum of $520,000. The net assets of the Trust are valued at something under $470,000, the difference being the result of a debt to the estate because the deceased had not forgiven the Trust all of the purchase price by the time of his death.

[2] The surviving trustee of the Trust is Bruce Stewart, Mr Mathieson’s former solicitor.

[3] The plaintiff, Paul Blumenthal, has brought proceedings against both the estate and the Trust. His mother lived in a de facto relationship with the deceased for some 22 years until her death and Mr Blumenthal says that as John Mathieson’s stepson, he is entitled to the three acre Trust property and a share in the estate.

[4] The primary beneficiary under Mr Mathieson’s 1981 will is the New Zealand Neurological Foundation. The Foundation is also a named beneficiary under the Trust Deed. Mr Blumenthal is not a named beneficiary under either instrument.

[5] The substantive proceeding is in two parts: causes of action under the Family Protection Act 1955 and Law Reform (Testamentary Promises) Act 1949 against the estate; and in constructive trust and unconscionable bargain against the Trust asset.

[6] In the meantime Mr Blumenthal has lodged a caveat against the title of the Trust property and now applies for an interim injunction to prevent completion of the property sale. Mr Stewart responded with an application under s 143 of the Land Transfer Act 1952 to remove the caveat. Mr Blumenthal filed a notice of opposition. The focus therefore in the applications before me is the Trust and its property.

[7] Mr Stewart has also applied for security for costs but the parties are now agreed that issue can be adjourned pending resolution of the applications for interim orders and in relation to the caveat. I set that matter to one side accordingly.

The Facts

[8] In the time that has been available to me and in light of the issues I am required to address, I set out the facts in brief outline only.

Relevant…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Blumenthal v Stewart

Details

AGLC: Blumenthal v Stewart [2014] NZHC 1924
Case: [2014] NZHC 1924
Decision Date: 15 August 2014

CaseChat Overview and Summary

In the case of Blumenthal v Stewart, the plaintiff, Paul Blumenthal, sought to establish a claim over the property of the deceased, John Mathieson, which was held in trust by the defendant, Bruce Stewart. Blumenthal argued that he was entitled to the property as it was intended to be his inheritance. The court considered the plaintiff's claim in the context of the Family Protection Act 1955 and Law Reform (Testamentary Promises) Act 1949. The court found that Blumenthal had a close relationship with Mathieson and had made significant contributions to the property. However, the court held that Blumenthal's contributions did not exceed the benefits he received from the property. The court also found that the representations made by Mathieson regarding the property did not bind the trust as they were not made by both trustees. The court concluded that Blumenthal did not have an arguable case to sustain the caveat and dismissed the application for interim relief. The court ordered that the caveat be sustained for a further seven days to protect the plaintiff's appeal right, provided that the defendant placed the proceeds of sale in an appropriate interest-bearing account pending the outcome of the substantive proceedings.

Orders