Commons v Commons
[2020] NZCA 49
•11 March 2020 at 12.30 pm
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA393/2019 [2020] NZCA 49 |
| BETWEEN | ANDREW HAMILTON JOHN COMMONS |
| AND | HAMISH JOHN COMMONS, PATRICIA ANNE COMMONS AND JONNE BRYDE WILLCOX |
| Court: | Clifford and Collins JJ |
Counsel: | Applicant in person |
Judgment: | 11 March 2020 at 12.30 pm |
JUDGMENT OF THE COURT
AThe application for leave to appeal is declined.
BThe applicant is to pay costs for a standard application on a band A basis and usual disbursements to each of (i) Hamish Commons and Jonne Willcox in their personal capacity; and (ii) Patricia Commons in her personal capacity.
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REASONS OF THE COURT
(Given by Clifford J)
The applicant, Mr Andrew Commons, is challenging the will of his father, Dr John Commons, under the Family Protection Act 1955.[1] Mr Commons is a child of Dr Commons’ first marriage. The first respondents are the widow (Patricia Commons) and two children (Hamish Commons and Jonne Willcox) of Dr Commons’ second marriage, in their capacities as beneficiaries of his estate.[2] Together with Comac Trustees Ltd, Hamish Commons and Jonne Willcox are separately represented as trustees of the estate.
[1]To distinguish between Andrew and John Commons, we refer to the father as Dr Commons and the son as Mr Commons.
[2]Patricia Commons, whom we refer to as Mrs Commons, is represented by a litigation guardian in these proceedings.
There are three pleaded causes of action. The first is that Dr Commons breached the moral duty he owed to Mr Commons in provisions of his will. The second and third challenge the actions of trustees of the estate.
Mr Commons sought disclosure of a wide range of documents relating to the estate, its financial position and benefits the respondents received from Dr Commons, both during his lifetime and subsequently from his estate.
In an interlocutory decision dated 27 March 2019, Associate Judge Sargisson ordered discovery of a subset of the documents Mr Commons sought, relating to:[3]
(a)documents identifying property in the estate;
(b)documents concerning the distribution of estate income to any beneficiary and the mix of investments undertaken with estate funds;
(c)documents identifying Mrs Commons’ exercise of her power as trustee since the appointment of the litigation guardian; and
(d)the estate’s financial statements.
[3]Commons v Commons [2019] NZHC 557 [Discovery judgment].
The Judge declined to order discovery of several other categories of documents that he had requested. As relevant to Mr Common’s application for leave, these were:
2. Documents identifying:
2.1Benefaction Jonne and/or Hamish received from [Dr Commons] while he was alive.
2.2Benefaction Jonne and/or Hamish received from trusts in relation to which [Dr Commons] had any power of trustee or settlor.
This includes, but is not necessarily limited to:
(a)Identification of the source of funding to purchase the homes beneficially owned by Jonne and Hamish in Balmoral.
…
(c)Funds raised against the properties identified in (a) above.
…
(e)Other financial assistance received from [Dr Commons] (other than for daily living expenses while in the family home).
(f)Distributions from, assets and valuations of property in, the Trusts.
…
7.In relation to the Trusts:
…
7.5Annual financial statements.
8.Documents identifying the quantum of income to support [Mrs Commons] to a standard of living to which she was accustomed prior to [Dr Commons’] death.
9.Documents identifying the income [Mrs Commons] received since [Dr Commons’] death other than from the Estate.
10.Documents identifying the use of the income from the Estate received by [Mrs Commons] since [Dr Commons’] death.
Mr Commons sought leave from the High Court to appeal to this Court. Associate Judge Sargisson declined leave.[4] Mr Commons now seeks leave from this Court under s 56(5) of the Senior Courts Act 2016.
Submissions
[4]Commons v Commons [2019] NZHC 1850 [Leave judgment].
In support of his application for leave, Mr Commons suggested the Judge misapplied discovery principles and improperly focused on general categories of documents according to the subject headings he annexed to his application, rather than examples of specific documents that might become relevant, such as agreements for sale and purchase or share certificates. More broadly, he suggested that in declining to consider dispositions made by Dr Commons to various family trusts in the years before his death — which Mr Commons considers part of the wider circumstances relevant to his family protection claim — the Judge both failed to treat his claim as true and erred in her application of Franich v Groves and Flathaug v Weaver, among other authorities.[5] As to the discovery relevant to the second and third causes of action, Mr Commons asserted the judgment below misapplied the law, including as set out by the Supreme Court in Erceg v Erceg, and would frustrate his ability to trace the assets of the estate in the event he is successful.[6]
[5]Franich v Groves CA101/79, 18 June 1981; and Flathaug v Weaver [2003] NZFLR 730 (CA).
[6]Erceg v Erceg [2017] NZSC 28, [2017] 1 NZLR 320.
Mr Commons suggested appellate discussion of these points would be of precedential value which warranted a grant of leave. Further, he suggested the Judge’s rejection of his application for discovery amounted to the determination of his claims to the extent that they sought to draw Dr Commons’ historical dispositions of property via inter vivos gifts and trusts into the arena. Considering the value of the estate and its significance to the parties, this was therefore a matter that warranted resolution before trial.
For Hamish Commons and Jonne Willcox (in their capacity as beneficiaries), Mr Muir submitted the discovery claim largely amounted to an unwarranted attempt at “beneficiary comparison”. The Judge quite correctly assessed that Mr Commons’ discovery requests would require the consideration of property disposed of many years before his death which could not properly be considered part of his estate; indeed, the request for “documents identifying … benefaction Jonne and/or Hamish received from John while he was alive” would appear to require them to consider all material support they had received over the last 50 years. Such requests were ultimately far removed from both the family protection and trusts claims and were both unnecessary and disproportionate. The principles related to family protection claims were settled and no issue of general or public importance was raised.
For Mrs Commons, Ms von Keisenberg made the same point that much of what Mr Commons sought was simply not necessary. The Judge’s application of principles applicable to tracing could not be criticised and the request for documents identifying how Mrs Commons had used income received from the estate, and all other sources of income she had enjoyed since John’s death, now nearly five years ago, quite clearly amounted to what the Judge described as “a highly intrusive foray into [Mrs Commons’] private life”.[7] Considering Mrs Commons’ fragile health and the stress associated with prolonging the proceedings, the delay presented by an appeal would be considerable.
[7]Leave judgment, above n 4, at [48].
For Hamish Commons and Jonne Willcox in their capacity as trustees, Ms Brady largely relied upon the submissions of Mr Muir and Ms von Keisenberg.
Analysis
This Court considered the threshold for leave under s 56(5) in Moir v IHC New Zealand Inc, where it was said that:[8]
… leave should not be granted unless the proposed appeal raises some question of law or fact capable of bona fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the cost and delay of the appeal. Moreover, leave should not be granted unless the proposed appeal has some reasonable prospect of success.
[8]Moir v IHC New Zealand Inc [2018] NZCA 130, (2018) 24 PRNZ 45 at [6] (footnote omitted).
We do not consider that Mr Commons has identified a seriously arguable error of law in the judgment below. The Judge accurately explained and applied orthodox discovery principles and we consider that no difference would be made by assessing the relevance of documents under the headings Mr Commons originally supplied or the more specific categories he has now identified. As to his broader request for discovery of benefits received by the respondents during Dr Commons’ lifetime or from his associated trusts, we refer to the following passage from McKenzie v Thomas cited by Mr Commons for an explanation of what is required:[9]
A party’s income and asset position, whether that party be an appellant or a beneficiary in the position of a respondent, should be provided in all family protection cases. These factors are relevant to whether or not the deceased has breached a moral duty.
[9]McKenzie v Thomas CA120/02, 14 November 2002 at [14].
Using that description as a guide, we see no reason why the Judge’s requirement that the respondents file affidavit evidence setting out their financial positions would not suffice.[10] In family protection cases inter vivovs support is generally only relevant in rare instances where such gifts have depleted the estate to the point that it may not be sufficient to meet the testator’s moral duty.[11] We do not read the authorities cited by Mr Commons as going any further. The size of Dr Common’s estate means that situation does not arise here. The Court’s inquiry into whether there has been a breach of moral duty can be undertaken with the discovered information regarding the position of the estate and its beneficiaries. An assessment of dispositions made by Dr Commons over the past half century is not required.
[10]Discovery judgment, above n 3, at [37].
[11]Talbot v Talbot [2017] NZCA 507, [2018] NZFLR 128 at [51]; and Ashworth v Lambie [2012] NZHC 1110 at [54].
Mr Commons protests that refusing to order discovery of inter vivos gifts and support effectively dismisses that part of his claim. His submission is misconceived. His pleadings disclose a family protection claim which, following discovery, he will be able to pursue. It will not be necessary to examine inter vivos support to determine that claim and it is not enough for Mr Commons to simply assert, contrary to existing authority, that such support ought to be relevant. There is no seriously arguable error in the refusal to order discovery of documents in categories 2 and 7.
Nor do we apprehend any reasonably arguable question of law in relation to the discovery relevant to the second and third causes of action. Mr Commons asserted that the Judge failed to apply Erceg v Erceg and other authorities, but as Ms von Keisenberg noted, he does not analyse in any detail how these authorities were misapplied. In any case, we are satisfied that the authorities were applied in an uncontroversial manner by the Judge. The documents requested by Mr Commons represent a very significant intrusion in Mrs Commons’ personal financial affairs and it has not been shown that access to such information is necessary to judge the trustee’s actions. Mr Commons pleads that the trustees were required to consider, among other matters, whether it was necessary to pay estate income to Mrs Commons in order to maintain the standard of living to which she was accustomed. The trustees do not dispute that they paid all the income generated from the estate to Mrs Commons without consideration of her previous standard of living, but refute that they were in breach of any obligation in doing so. If Mr Commons’ interpretation prevails then it will be open to the Court to make any necessary consequent orders (if the affidavit evidence to date is insufficient to resolve the point). But resolving the matter in dispute, namely the construction of the will, does not require the Court to inspect several years’ worth of Mrs Commons’ income and expenditure.
For much the same reason we see nothing in Mr Commons’ point on tracing. If Mr Commons succeeds at trial, and dispositions to Mrs Commons are found to be a breach of trust, then the Court will be in a position to order an accounting. There is nothing to suggest property is being dissipated in a manner which would ultimately prejudice Mr Commons’ ability to recover and he has not demonstrated any pressing need for such information that must be met before trial. We are therefore satisfied no seriously arguable error of law arises as relates to the remaining categories of documents requested.
Result
The application for leave is declined.
Mr Commons sought that, if his application was declined, the beneficiaries be awarded reduced costs on the basis that their submissions did not, he suggested, address the documents or authorities he presented. We do not accept that characterisation and consider that costs should follow the event, except as regards the trustees, who did not seek costs. The applicant is to pay costs for a standard application on a band A basis and usual disbursements to each of (i) Hamish Commons and Jonne Willcox in their personal capacity; and (ii) Patricia Commons in her personal capacity.
Solicitors:
Morgan Coakle, Auckland for Hamish John Commons and Jonne Bryde Willcox (in their personal capacity)
Lewis Callanan, Auckland for Patricia Anne Commons (in her personal capacity)
Tompkins Wake, Hamilton for Second Respondent and Hamish John Commons and Jonne Bryde Willcox (in their capacity as trustees)
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