Brown v Brown - [2017] NZHC 350

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-2518 [2017] NZHC 350

BETWEEN
RAYMOND WILLIAM BROWN

First Plaintiff

RONALD TERENCE BROWN Second Plaintiff

AND

RONA TERESA BROWN First Defendant

SANDRINE ANDERSON trading as

SANDI ANDERSON Second Defendant

Hearing: 2 March 2017

Appearances:

No appearance for the First Plaintiff A Gilchrist for the Second Plaintiff M C Kilham for the First Defendant

No appearance for the Second Defendant

Judgment:

2 March 2017

ORAL JUDGMENT OF ASSOCIATE JUDGE R M BELL

Solicitors:
Malcolm Mounsey Clarke (Thomas Mounsey), Taupo, for the First Plaintiff
Kiely Thompson Caisley (Peter Kiely), Auckland, for the Second Plaintiff
Anderson Creagh Lai Ltd (Michelle C Kilham), Auckland, for the First Defendant
Morgan Coakle (Briar R Webster) Auckland, for the Second Defendant

Counsel:
D M O’Neill, Hamilton, for the First Plaintiff
Andrew R Gilchrist, Barrister, Auckland, for the Second Plaintiff

BROWN v BROWN [2017] NZHC 350 [2 March 2017]

[1] Teresa Brown, the first defendant, applies for security for costs against Ron Brown, the second plaintiff, her father. She does not apply for security for costs against Ray Brown, the first plaintiff, her uncle. Mr Ron Brown’s proceeding arises out of an agreement for sale and purchase made in August 2013 under which he agreed to sell his half-share in a property at 5 Rawene Avenue, Westmere, Auckland, to Teresa. At the same time, Ray entered into a similar agreement under which he sold his half-share in the property to Teresa. Ray and Ron sue Teresa separately, but in the same proceeding. They allege a range of causes of action but their essential case is that Teresa owns the property at Rawene Avenue on their behalf, and they seek orders for the property to be transferred back to them. Their claims are distinct. They have separate statements of claim, distinct causes of action and separate representation.

[2] Ray and Ron inherited their mother’s property at 5 Rawene Avenue in 1999. They took it as tenants in common in equal shares. Ray lived in Turangi. Ron lived in the Westmere property. In 2008, Ron faced criminal charges, specifically for serious drug offending. In October 2010, he pleaded guilty to importing, possessing and supplying drugs, using a false passport and money laundering. He was sentenced to 11 years’ imprisonment.

[3] In 2008, the Crown began a proceeding under the Proceeds of Crime Act

1991. It came on for hearing in 2011.1 By then Ron had been sentenced. The Crown assessed the profits that Ron had made from his offending at some $4.5 million. It sought forfeiture and pecuniary penalty orders under s 25 of the Proceeds of Crime Act. Under that section the court can assess the value of benefits derived and order the offender to pay to the Crown a pecuniary penalty not greater than a penalty amount assessed under s 25(2). Under s 51 the Official Assignee may sell
the defendant’s property to discharge pecuniary penalty orders. Woolford J gave two

1The Proceeds of Crimes Act has been…

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 Brown v Brown

Details

AGLC: Brown v Brown [2017] NZHC 350
Case: [2017] NZHC 350
Decision Date: 2 March 2017

CaseChat Overview and Summary

In the High Court of New Zealand, Raymond and Ronald Brown, the sons of a deceased mother, sought to have a property sold to their sister, Teresa, returned to them. The central dispute was whether Teresa held the property in trust for her brothers. Teresa, the first defendant, applied for security for costs against Ronald, the second plaintiff, who had very limited means. Ray, the first plaintiff, was not subject to the application. The brothers had inherited the property in equal shares in 1999 and had sold their shares to Teresa in 2013. Ronald had been convicted of serious drug offences and faced a penalty order under the Proceeds of Crime Act 1991. Woolford J had ordered that Ronald's half-share of the property be sold to satisfy the penalty order. The brothers had an opportunity to buy back Ronald's half-share for $600,000, but Teresa did not agree to this. Ronald's claims against Teresa were weak and unlikely to succeed as he had already sold his interest in the property in compliance with Woolford J's order. Ray's claim, however, was stronger as he was entitled to $600,000 from Teresa. The court ordered Ronald to pay $10,000 in security for costs by 12 April 2017, or his claim against Teresa would be stayed. The court also ordered Ronald to pay Teresa's costs for the application. Teresa was not required to pay security for costs for Ray's claim.

The court examined the merits of the claims and found that Ronald's claims were weak, and there was a low chance of success. The court considered the factors outlined in AS McLachlan Ltd v MEL Network Ltd, including the impecuniosity of the plaintiff and the strength of the defendant's claim for security for costs. The court also noted that the claims were being heard together, which created efficiencies that could be considered when determining the amount of security for costs. The court ordered Ronald to pay $10,000 in security for costs by 12 April 2017, or his claim against Teresa would be stayed. The court also ordered Ronald to pay Teresa's costs for the application. Teresa was not required to pay security for costs for Ray's claim. The court reserved the right to apply further and to fix costs if necessary.

Orders