Bristow v French

[2012] NZHC 2098

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2011-409-002181 [2012] NZHC 2098

IN THE MATTER OF     the Estate of SHIRLEY ELIZABETH BRISTOW

BETWEEN  BARNABAS ERNEST BRISTOW Plaintiff

ANDMICHAEL JOHN FRENCH AND SUSAN PATRICIA SHORE AS EXECUTORS AND ADMINISTRATORS OF THE ESTATE OF SHIRLEY ELIZABETH BRISTOW

Defendants

Hearing:         15 August 2012

Appearances: D M Lester for Plaintiff

M M Bell for Defendants

Judgment:      17 August 2012

RESERVED JUDGMENT OF ASSOCIATE JUDGE MATTHEWS

[1]      Mr Barnabas Bristow is the son of the late Mrs Shirley Bristow.  When she died Mrs Bristow owned 1,000 B class shares in Sproxton Farm Limited.  By her last will dated 11 June 2009 she bequeathed those shares to Barnabas Bristow’s brother, Timothy Bristow.  Unfortunately this took no account of the fact that by a deed dated

5 April 1993 she had covenanted to leave the shares in a will to be current at her death to her son, Barnabas Bristow.

[2]      Barnabas Bristow seeks damages from Shirley Bristow’s estate for breach of this covenant.   In this application he seeks summary judgment, that is, judgment without trial, establishing the liability of the estate for breach of the covenant in the deed.  He does not seek damages on this application.

BARNABAS ERNEST BRISTOW V MICHAEL JOHN FRENCH AND SUSAN PATRICIA SHORE AS EXECUTORS AND ADMINISTRATORS OF THE ESTATE OF SHIRLEY ELIZABETH BRISTOW HC CHCH CIV-2011-409-002181 [17 August 2012]

[3]      The trustees frankly accept that Mrs Bristow breached her obligations under the deed, and that the deed is binding on the estate with the result that the plaintiff has a valid claim in damages for the value of the B shares.  However, they oppose judgment being entered on a summary basis principally on the ground that there may be insufficient assets in the estate to meet Barnabas Bristow’s claim, once quantified, honour the rights of Timothy Bristow, and meet any award that might be made in favour of their sisters who have filed proceedings in the Family Court under the Family Protection Act 1955, in which they ask for provision for themselves from the estate.

[4]      Before a Court may enter summary judgment, a plaintiff must satisfy it that the defendant does not have an arguable defence.[1]     That said, however, where a defendant alleges that it has an arguable defence it is for the defendant to lay an evidentiary foundation from which the Court can determine whether there is or is not an arguable defence.

[1] Auckett v Falvey HC Wellington CP 296/86, 20 August 1986, Eichelbaum J.

[5]      The issue in this case is whether, notwithstanding the defendants’ acceptance that Mrs Bristow breached her obligations to Barnabas Bristow under the deed, resulting in his having a valid claim against them in damages, the consequence of there being other claims on the estate is that liability to Barnabas Bristow should not be established at this point by the entry of judgment.

[6]      Mr Bell argues that although the trustees accept that Mrs Bristow breached her obligation under the deed and Barnabas Bristow is entitled to damages, nonetheless summary judgment should not be entered.   This would give Barnabas Bristow the status of a judgment creditor but arguably his status is as a contractual promisee, and might be defeated by statutory claims.

[7]      One claim has been brought already.   Timothy Bristow has evidently filed proceedings under the Law Reform Testamentary Promises Act for an award in his favour from the estate recognising work said to have been done during his mother’s

lifetime for which he was promised that testamentary provision would be made in his

favour leaving him the B shares in Sproxton Farm Limited.   A claim under the Family Protection Act by two daughters of Mrs Bristow is also intended.  Mr Moss drew to my attention a number of cases which have dealt with the competing rights of claimants in circumstances which he maintains have similarities to the present.

[8]      Given that Mrs Bristow in fact made testamentary provision in favour of Timothy giving him the shares to which he maintains he is entitled, it is difficult to see how he can sustain a claim under s 3 of the Law Reform Testamentary Promises Act, which empowers a Court to make orders in favour of a person to whom a promise has been made, to the extent to which the deceased has failed to make a testamentary provision honouring that promise.  However, those proceedings are not before this Court at present and  I make this  observation only because Mr Bell impressed on me that in due course it will be necessary for consideration to be given to all the competing claims.  This one does not, at least on the information I have, appear to have a reasoned basis.  Timothy Bristow’s right appears to be as legatee of the shares, and Barnabas does not directly seek to have the shares transferred to him.

[9]      Mr Bell argues that entering judgment now would give Barnabas Bristow an acknowledged status as a creditor, which should not be the case until competing priorities of claims to the assets in the estate are all before the Court.  He argues that it is not desirable that this should be the case, and that it is not necessary given the position of the trustees in relation to Barnabas Bristow’s claim.  At the very least the Court should exercise its discretion not to enter summary judgment.

[10]     Mr Lester argues that Mrs Bristow acted in breach of her obligations under the deed, that the breach has been accepted and that entering judgment now will establish his client as a judgment creditor in an unquantified sum, which gives certainty when it comes to a further hearing to determine how the estate should be administered.

Discussion

[11]     In the absence of any other claims to the assets in the estate, there could be no doubt  that  Barnabas  Bristow  is  entitled  to  summary  judgment  establishing  the

liability of the estate in respect of Mrs Bristow’s breach of her obligation.   In my opinion the existence of the competing claims make no difference.  In due course it will be necessary for a court to decide whether a claim to the value of the shares, based on breach of contract, is a debt which takes priority over the legacy in favour of Timothy Bristow, and over any award that might be made under the Family Protection Act.  That, however, is an argument for another day.  I accept Mr Lester’s submission  that  entering  judgment  on  liability  now  establishes  his  client  as  a creditor, just as Timothy Bristow is presently established as a legatee by the provisions of the will.  There remains an element of uncertainty over their sister’s claims, but in due course that, too, will be removed by a separate process.  In my view there is simply no valid reason not to enter summary judgment on liability for Barnabas Bristow on this application.

Outcome

[12]     I enter summary judgment for Barnabas Bristow for liability for breach by

Mrs Bristow of the deed between her and Barnabas Bristow dated 5 April 1993.

[13]     Mr   Lester   applied   for   costs.      Mr   Bell   opposed   this,   referring   to correspondence prior to the issue of this proceeding.   I have considered the correspondence and the submissions of counsel.  I am satisfied that the trustees were on full notice, prior to the issue of the proceeding, that Barnabas Bristow sought judgment on liability only, and that his claim would be directed to damages against the estate.   The response received from the trustees does not appear to have recognised this, and certainly failed to respond to the draft claim with an appropriate degree of focus.   The opposition to the claim, once filed in court, did ultimately accept that there was a breach of the obligation created by the deed and that the claim was focused on damages rather than seeking to receive the B shares in specie, but despite this the trustees found it necessary for the fixture to proceed.  Barnabas Bristow has been successful; I award him costs on a 2B basis with disbursements.

Further direction

[14]     Timothy Bristow’s claim is in the Family Court.   Steps are being taken to remove it to this court.  There seem to be compelling reasons for all claims to be dealt with in the same court.   Mr Lester foreshadows an application to strike out Timothy Bristow’s claim as he is already a legatee in respect of precisely the relief he seeks.  That is a matter upon which he should decide.  Counsel in this proceeding, and those representing other claimants, should confer on how all the issues between their respective clients can best be brought together for overall resolution.   There will be a telephone conference on this proceeding, with me, on Wednesday,

31 October 2012 at 10.00 am.  The intervening period gives ample time for those discussions.  If proceedings presently in the Family Court are removed to this court in the interim, counsel are to arrange for those proceedings to be considered at the telephone conference as well.  Memoranda are to be filed five working days before the conference, time to be strictly observed.

New party

[15]     Susan Shore has resigned as a trustee.  I order that the new trustee Stephen

James Smith of Christchurch, farmer, is substituted for her as the second-named defendant.

J G Matthews

Associate Judge

Solicitors:

McGillivray Callaghan, PO Box 79123, Christchurch 8446. [email protected]

Corcoran French, PO Box 15, Kaiapoi 7630. [email protected]