Chambers v New Zealand Guardian Trust Company Limited

[2022] NZHC 1307

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

I TE KŌTI MATUA O AOTEAROA WHAKATŪ ROHE

CIV-2021-442-36

[2022] NZHC 1307

UNDER

the Law Reform (Testamentary Promises) Act 1949 and the Family Protection Act 1955

BETWEEN

CINDY MARY CHAMBERS

Plaintiff

AND

THE NEW ZEALAND GUARDIAN TRUST COMPANY LIMITED

First Defendant

LYNETTE ANN CHAMBERS

Second Defendant

Hearing:

2 June 2022

Appearances:

S W Sansom for the Plaintiff

No appearance for the First Defendant G D Pearson for the Second Defendant

Date:

3 June 2022

JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

[1]    This is an interlocutory application by the plaintiff, Cindy Chambers, for an order for tailored discovery against the interested party, Lynette Chambers. It arises in the context of a dispute between those parties (to whom I will refer by their first names to avoid confusion) in connection with the estate of the late Dennis Chambers, Cindy’s father, and Lynette’s husband. The defendant is the New Zealand Guardian Trust Company Ltd, the executor and trustee of Mr Chambers’ estate. NZGT is taking a neutral position in relation to the proceeding as a whole, and in relation to this application.

CHAMBERS v THE NEW ZEALAND GUARDIAN TRUST COMPANY LIMITED [2022] NZHC 1307 [3 June 2022]

[2]    Mr Chambers died at Nelson on 17 September 2020. This Court granted probate of his will, dated 22 January 2007, to NZGT on 6 November 2020.

[3]    Materially, Mr Chambers’ estate consists of a half interest in what was his and Lynette’s family home, household chattels, parcels of shares. There are other items in the estate, but they can be ignored for the purposes of this application. The total value of the estate is significant. It runs to some millions of dollars.

[4]    In his will Mr Chambers left a life interest in his half share of the house and the household chattels to Lynette, which interest will terminate on her remarriage or death. Cindy is the residuary beneficiary and will ultimately receive the half interest in the house and the household chattels. The balance of his estate Mr Chambers left to Lynette.

[5]    Cindy has commenced this claim against NZGT in its capacity as the executor and trustee of Mr Chambers’ estate. It is not obvious to me that anything will be gained by analysing the claim in detail. Essentially, Cindy is seeking the shares in two family companies. She does so on three bases. She contends for the imposition of an institutional constructive trust on the two parcels of shares, and pleads claims under the Law Reform (Testamentary Promises) Act 1949 and the Family Proceedings Act 1955. These claims are overlapping in the sense that Cindy is seeking the same remedy in each case — ownership of the two parcels of shares. In her prayer for relief in the extant statement of claim, Cindy seeks an order that Mr Chambers’ shares in Chambers & Jacket Ltd and Chambers and Jacket Equipment Ltd are hers or should become hers.

[6]Cindy’s claim is opposed by Lynette.

[7]    In her interlocutory application dated 21 March 2022, Cindy seeks the following orders:

1.1An order for the Interested Party to discover documents which disclose the assets and liabilities of the Interested Party in accordance with the schedule attached to this application.

1.2In compliance with 1.1, the Interested Party to prepare an affidavit of her assets and liabilities in accordance with the attached schedule accompanied by a list of all documents in her control or possession relating to the ownership and/or value of assets and amount of

liabilities of the Interested Party with reference to the attached schedule.

1.3The Interested Party to discover all her previous wills and will instructions from 1997 to 17 September 2020 (date of death of deceased).

1.4In compliance with 1.3, the Interested Party to prepare an affidavit listing all documents in her control or possession which reference her previous wills and will instructions from 1997 to 17 September 2020 (as referred to at item 16 of the attached schedule).

1.5The Interested Party to adopt List and Exchange protocols set out in Part 2 of Schedule 9 of HCR.

1.6An order for the costs of this application.

[8]    Cindy then sets out the grounds for her application, and, in a schedule to the application, identifies the categories of documentation in respect of which she says she is seeking discovery. There are two categories in effect; documentation concerning earlier wills made by Mr Chambers and Lynette and as to Lynette’s financial position.

[9]    Cindy’s application is opposed by Lynette. Lynette says that the information being sought has already been provided, is readily available or is irrelevant.

[10]   The essential issue in any dispute relating to discovery is relevance. Only documentation that is relevant to the issues in the case as determined by the pleadings is discoverable. At the risk of tautology, no material that is not relevant to the issues in the case is ever discoverable.

[11]   Insofar as the application relates to earlier wills (and related will instructions) made or given by Mr Chambers and Lynette, this material is relevant and Mr Pearson concedes this. He suggests that the practical solution is obvious. Mr Chambers and Lynette made wills through the NZGT on at least two earlier occasions. Lynette has copies of some material relating to those wills and has disclosed what she has. Her expectation is that NZGT may have additional material, most probably in the form of instructions given by Mr Chambers and her in the past and copies of wills made by them. She has no objection to that material being provided to Cindy. As NZGT is a party to this proceeding, the most obvious route for that would be for NZGT to locate and copy whatever material it holds and provide this to both parties. I do not imagine

that there will be any difficulty with that. However, if that practical solution runs into difficulties any party may come back to the Court for further directions and if necessary a formal order.

[12]I turn to the more difficult issue of the relevance of Lynette’s financial position.

[13]   I am unconvinced that Lynette’s financial position will be relevant to Cindy’s institutional constructive trust cause of action — either she can establish the existence of an institutional constructive trust, and therefore equitable ownership of the two parcels of shares, or she can’t. The relative financial positions of the protagonists appear to me to be irrelevant to that determination.

[14]   Equally, Cindy’s claim pursuant to the Testamentary Promises Act does not, in my assessment, raise issues as to their relative financial positions — either Cindy can establish a promise and the other requirements under the legislation or she can’t.

[15]   To the extent that Cindy’s claim is based on the Family Protection Act, her own financial position will no doubt be relevant.

[16]   The argument advanced on Cindy’s behalf by Mr Sansom is that in litigation pursuant to the Family Protection Act the courts invariably compare the relative positions of the competing parties, and one consideration that is invariably relevant is the financial needs of those parties as at the date of the testator’s death.

[17]   However, Mr Sansom’s submissions do not take into account the different circumstances in which such litigation arises.

[18]   As Mr Pearson submits on Lynette’s behalf, the courts have long recognised that there are broadly two categories of claim under the Family Protection Act, that is to say claims in which the estate is modest and any provision that the Court may make in favour of a claimant is inevitably at the expense of some other person or persons to whom testator also owed a moral duty, and situations in which the estate is large and the claimant is not asserting that the distribution constitutes an unjust distribution of a limited fund, but rather that the testator has failed to provide sufficiently for claimant’s proper maintenance or support.

[19]   Mr Pearson referred me to a passage from Laws of New Zealand where the issue that arises in the second category of case is formulated in this way:

In a large estate the Court must determine the absolute scope and limit of the moral duty of the wealthy testator and balance the competing claims of the dependant to be maintained by the testator, and of the testator to freely [sic] dispose of resources.

[20]   In short, where the estate is large enough, the issue is an absolute one concerning the scope of the testator’s moral duty to the claimant and whether that has been discharged, and whilst the issue of the claimant’s financial position may be relevant, the financial positions of any others involved are not, precisely because the estate is large enough to accommodate the claimant’s claim in a manner that is not at the expense of anyone else.

[21]   In this case, through Mr Pearson, Lynette offers an unequivocal acknowledgement that Cindy is entitled to pursue her claim on the basis that that will not be constrained by any issue concerning her — Lynette’s — financial position. Putting the matter more colloquially, Mr Pearson said that it really doesn’t matter whether the Court proceeds on the basis that Lynette’s wealth is in the order of

$5 million (as she says) or $10 million as Cindy says (or, for that matter, $100 million). Lynette’s financial position is simply not a factor in the mix.

[22]   I accept Mr Pearson’s submission that it follows inexorably that the details of Lynette’s financial position are irrelevant to any issue in the case.

[23]For those reasons, I decline the plaintiff’s application for discovery.

[24]   I reserve costs. My expectation is that counsel will be able to resolve these. However, if that does not prove possible they may come back to the Court by memorandum in the usual way.

Associate Judge Johnston

Solicitors:

Richmond Law, Nelson for Plaintiff

Legal Focus, Nelson for Second Defendant