Delaney v Delaney

[2020] NZHC 1830

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2020-485-000003

[2020] NZHC 1830

IN THE MATTER OF

an application for directions pursuant to ss 64 and 66 of the Trustee Act 1956

IN THE ESTATE OF

GAVIN ERNEST DELANEY

Deceased

BETWEEN

GRAHAME ROBERT DELANEY and JANET DELANEY

Applicants

AND

PAUL DELANEY

First Respondent

KERRY DELANEY
Second Respondent

LISA BROWN
Third Respondent

BRENT DELANEY

Fourth Respondent

Hearing:

27 July 2020

Counsel:

C R Foster and H A T Willis for the Applicants

No appearance for the First and Third Respondents M R Bott for the Second Respondent

J J Pietras for the Fourth Respondent

Judgment:

27 July 2020

JUDGMENT OF DOOGUE J

This judgment was delivered by Justice Doogue on 27 July 2020 at 3.30 pm

pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar Date:

DELANEY v DELANEY & ORS [2020] NZHC 1830 [27 July 2020]

Introduction

[1]                 Gavin Ernest Delaney (the deceased) was a veteran of the Territorial Army’s Royal New Zealand Engineers Sixth Independent Field Squadron.

[2]                 The deceased had four children: Brent Delaney, Paul Delaney, Lisa Brown and Kerry Delaney.

[3]                 The deceased and Brent shared a common passion for collecting and restoring classic military vehicles. The deceased’s executors have applied for directions under s 66 of the Trustee Act 1956 (the Act) on two matters. The only issue for this Court to resolve is whether Brent’s claim for a 50 per cent share in the sale proceeds of an M41 Walker Bulldog Tank (the Tank) is valid or not.

Background

[4]                 From 2000 until 2010, the deceased and Brent would travel to Waiouru most weekends to volunteer at the National Army Museum (the museum). The deceased and Brent were responsible for maintaining and restoring the museum’s vehicle collection.

[5]                 In mid-2005, the deceased and Brent entered into a gentleman’s agreement with the museum, whereby they would  undertake  restoration  work  on  a  Centurion Tank in exchange for receiving various components of the Tank.

[6]                 In mid-2006, the deceased and Brent  completed  the  work  on  the  Centurion Tank and received a hull and turret for the Tank.

[7]                 Between 2006 and 2010, the deceased and Brent collected the extra components required to complete restoration of the Tank.

[8]The various tank components were stored at the deceased’s farm in Carterton.

[9]                 In 2015 the deceased and Brent began restoration work on the Tank at the deceased’s farm.

[10]On 13 December 2015 the deceased died in a car accident.

[11]              Brent says that shortly after the deceased passed away he met with the executors and informed them that he was a 50 per cent owner of the Tank. The executors have no recollection of that conversation and say that their instructions are that the first mention of this claim by Brent was in July 2018. This is why they considered it prudent it to obtain a direction from this Court on the matter.

The law

[12]Section 66(1) of the Act provides that:

Any trustee may apply to the court for directions concerning any property subject to a trust, or respecting the management or administration of any such property, or respecting the exercise of any power or discretion vested in the trustee.

[13]              In New Zealand Māori Council v Foulkes, Kós J summarised the purpose of  s 66 in the following way:1

(a)Section 66 may be used to resolve any live questions of interpretation of the trust deed as well as any uncertainty regarding the exercise of a power. It allows the Court to resolve any substantial question of law concerning the meaning or administration of a trust. It is not confined to issues of minor importance arising from the administration of the trust.2

(b)The existence of a dispute is not fatal to the exercise of the jurisdiction under s 66. In fact, the existence of a dispute, or at least a doubt, is essential.3

(c)The more profound the dispute, the more care must be taken that those with a legitimate interest in the outcome are represented. This is particularly so for beneficiaries.4

1      New Zealand Māori Council v Foulkes [2014] NZHC 1777, [2015] NZAR 1441.

2 At [46].

3 At [47].

4 At [48].

(d)The relief sought must not involve resolution of any disputed issues of facts. Like the Declaratory Judgments Act 1908, the s 66 procedure is entirely unsuited to resolving such issues. A s 66 application proceeds on the basis of affidavit evidence. An agreed statement of facts will normally be presented to the Court.5

Analysis

[14]              It is accepted by all parties that the Court has jurisdiction under s 66 to make directions in respect of the claim by Brent.

[15]              Further, it is accepted that none of the other estate beneficiaries have raised a competing argument in these proceedings or provided evidence which disputes that provided by Brent. Paul and Lisa filed memoranda withdrawing their opposition to this claim, and Kerry has taken no formal steps despite being served.

[16]              The evidence establishes that the deceased and Brent were very close and shared a common passion for restoring classic military vehicles. They began an affiliation with the museum as volunteers in 2000 when they offered to display some of their private military vehicles at the museum’s open day. Over time, they both built up a good rapport with the assistant curator, as well as other staff and volunteers at the museum.

[17]              Between 2000 and 2010 the deceased and Brent would travel to Waiouru to volunteer at the museum frequently. They were tasked with looking after the museum’s technology collection. They were essentially responsible for maintaining and sorting vehicles; mechanical and electrical works; and some panel beating and spray-painting. Sometimes the museum wanted them to restore a particular vehicle to a very high standard. Whenever this happened, the deceased and Brent would come to an arrangement with the museum’s curator where they would receive vehicle parts from the museum’s surplus collection in exchange for their work.

5 At [49].

[18]              One of the surplus items was the Tank. In mid-2005, the deceased and Brent approached the curator and entered into a gentleman’s agreement to restore a separate Centurion Tank in exchange for  receiving  the  hull  for  the  Tank. This gentleman’s agreement was formalised  in  a  letter  from  the  museum  curator  on  7 January 2006. The deceased and Brent completed the  restoration  of  the  Centurion Tank to the required standard and in exchange the museum released the hull, turret and other parts for the Tank to them.

[19]              In May 2006 the deceased and Brent entered into another agreement with the curator whereby the museum would purchase an engine for the Tank for £5,000 in exchange for the deceased and Brent refurbishing the museum’s Diamond T Truck. The deceased and Brent agreed to cover the freight cost to relocate the engine from Belgium to New Zealand.

[20]              Over the next four years, between 2006 and 2010, the deceased and Brent collected the additional parts that they needed to reconstruct the tank. They brought all the parts together and stored them on the deceased’s farm in Carterton.

[21]              I am satisfied that the deceased and Brent always treated the Tank parts as their shared property. No one is refuting that the deceased would often refer to the Tank as “our Tank” – meaning his and Brent’s tank.

[22]              After the deceased passed away, Brent did not reconstruct the Tank. He collected all of the parts from around the farm and bundled them together so they could be sold as a complete project.

[23]              The complete hull and all of its associated parts  were  sold  to  the  Australian Armour and Artillery Museum in Cairns for NZ $55,000.

Result

[24]              I am satisfied on the evidence available to me that Brent should be paid the sum of $27,500 (representing his 50 per cent share of the Tank), together with interest from the date of sale.

Orders

[25]              The applicants shall transfer a 50 per cent share of the sale proceeds of the M41 Bulldog Walker Tank, together with interest from the date of sale, to the fourth respondent.

[26]              The applicants shall pay the fourth respondent’s costs of $6,360.00 awarded on a 1B basis in accordance with the High Court Rules 2016 together with disbursements of $160.00.

Doogue J

Solicitors:

Thomas Dewar Sziranyi Letts, Lower Hutt Reginald Newell, Upper Hutt

ARL Lawyers, Lower Hutt