Cuthers v Cuthers

[2020] NZHC 1851

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE

CIV-2019-470-125

[2020] NZHC 1851

UNDER

the Property Law Act 2007

IN THE MATTER

of an application under section 339(1)

BETWEEN

RYAN ENUA CUTHERS

Applicant

AND

JAY TE AVA CUTHERS

Respondent

Hearing:	20 July 2020
Appearances:	T P Refoy-Butler for the applicant
Judgment:	29 July 2020

JUDGMENT OF PALMER J

This judgment was delivered by me on Wednesday 29 July 2020 at 11.00am.

Pursuant to Rule 11.5 of the High Court Rules.

………………………… Registrar/Deputy Registrar

Solicitors:
Mackenzie Elvin Law, Tauranga

CUTHERS v CUTHERS [2020] NZHC 1851 [29 July 2020]

What happened?

[1]                  As Mr Refoy-Butler submits, this case involves a sad and sorry history of a falling out between two brothers, Ryan Cuthers and Jay Cuthers. Their mother died on  25  February  2014,   leaving  them   with  joint  ownership  of  her  house  in   Mt Maunganui. They agreed Jay would rent out the house and they would both use the  income  for  holidays.  Ryan  now  lives  in  the  United  States.   Jay  lives  in  Mt Maunganui but appears now to be addicted to methamphetamine. He also appears to wish that were not so. There is no evidence the house has been rented out or income derived from it. Certainly, Ryan has received no income. And Jay has told him friends of Jay’s are living there rent-free but he can charge them rent if Ryan wishes. There is a suggestion that Jay might also be living there, but I am not satisfied of that, on the basis of the evidence before me.

[2]                  Ryan brought these proceedings in November 2019, seeking orders for sale of the house under s 342 of the Property Law Act 2007 (the Act). Jay is aware of the proceedings, says he wants to keep the house but is in no position to buy Ryan’s interest. Jay has taken no steps to defend the proceedings. He told Ryan he was paying the rates and for water, but council records indicate there are amounts owing for those. There was talk of a settlement proposal, but Ryan says Jay did not meet his condition of allowing Ryan’s agents to inspect the property. I heard the application for judgment by formal proof. Under s 343 of the Act, Ryan also now seeks additional orders as detailed below. At the hearing, it was not clear that Powell J’s minute of 5 March 2020 had been served on Jay as required, but it has now been established that it was.

Orders

[3]  I consider the case has been made under s 339 for the sale of the property. It is jointly owned, equally, by Jay and Ryan. Jay’s lack of communication with Ryan means that refusing the order will cause hardship to Ryan. There may be hardship to Jay if the order is made. But the existence and extent of that has not been demonstrated, mainly because of Jay’s lack of response to these proceedings and to Ryan’s communications. Sale of the property is required to end the stalemate between the two brothers. However, the orders I make, under ss 339 and 343, allow more input from Jay in the sale than the orders sought and attempt to mitigate the potential effect

on Jay by including an order that allows him to decide to make the proceeds less than immediately available to him.

[4]                  I order that Ryan Cuthers  is  authorised  to  sell  the  property  situated  at  2/8 Gobray Crescent, Mount Maunganui, Tauranga, comprised in certificate of title SA23C/530, legal description Flat 2 Deposited Plan South Auckland 25708, on the following terms:

(a)Ray White Tauranga is appointed to market and sell the Property.

(b)The Registrar of the High Court at Tauranga is to sign a listing authority on Jay’s behalf.

(c)The Property is to be sold by auction or, if an offer is made to purchase prior to auction, then it may be sold by Ryan accepting that offer after considering any views of Jay Cuthers communicated within a reasonable period.

(d)The reserve price for auction may be determined by Ryan Cuthers after considering any views of Jay Cuthers communicated within a reasonable period.

(e)Mackenzie Elvin Law is to act on the sale of the property and is to hold all funds relevant to the sale and other orders made, in its Trust account.

(f)Mackenzie Elvin Law is to enquire of Jay whether he would like his net share of the proceeds to be held in trust for him, for the purpose of supporting his ongoing health care or some other identified purpose. If so, Mackenzie Elvin Law should identify for Jay other solicitors who would be available to advise him on that (and be paid out of his share of the proceeds) and transfer the sales proceeds accordingly.

(g)The Registrar is authorised to execute all instruments and documents necessary to effect the sale on Jay’s behalf, including any resulting Sale

and Purchase Agreement, the authority and instruction form, and tax statement (but not relating to any trust Jay decides to establish).

[5]                  I do not grant the order that Jay account, out of the proceeds of the sale, for a half-share of rent that could have been earned from the property. There is no evidence the house was rented out and that there was any rental income. I do not consider it fair to require Jay to pay Ryan for the theoretical opportunity cost of any failure to rent the property when there is no evidence of what steps Ryan took to urge or arrange the rental of the property himself.

[6]In respect of the other orders sought, under s 343 of the Act:

(a)I authorise Ryan Cuthers to serve, on behalf of him and Jay Cuthers, any notices under the Residential Tenancies Act 1986 on any tenants occupying the property.

(b)I order that Jay Cuthers, or any other person in occupation of the property, provide vacant possession of the property 10 working days after any residential tenants are required to have left the property, to allow the sale process to occur.

(c)I do not authorise use of reasonable force to effect the possession order at (b), as proposed, given the effect of a possession order under r 17.80 of the High Court Rules 2016.

(d)I order the proceeds of sale be applied as follows:

(i)To Ryan Cuthers by way of reimbursement, or by way of direct payment to relevant third parties, of the costs of sale including the costs of readying the property for sale, legal and conveyancing fees, advertising, auctioneer and real estate agent’s costs.

(ii)The net sum after deduction of those costs is to be divided into two equal shares, to be paid to Ryan Cuthers and Jay Cuthers or at their direction.

(iii)From Jay Cuthers’ share, before it is paid, the following amounts will be deducted: payment of any rates arrears, water rates and insurances; and the value of any damage or depreciation of value in the property shown by independent inspection (including testing for methamphetamine) to have occurred since 1 January 2015; and payment to Ryan Cuthers of costs of $16,624.20, calculated on a 2B basis.

(e)I grant leave to either party to apply for variation of the orders to the extent necessary to give practical effect to the sale and subsequent division of the proceeds.

Palmer J