Estate of Blackwell

[2020] NZHC 1238

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE

CIV-2020-412-36

[2020] NZHC 1238

IN THE MATTER OF

an application for a Beddoe Order in respect of the Estate of ROBERT MORTIMER

BLACKWELL

AND

MEGAN LISA BARTLETT and DAVID

JOSEPH EHLERS as Executors and Trustees of the Estate of ROBERT MORTIMER BLACKWELL deceased Applicants

Hearing:	(On the papers)
Counsel:	K J Jarvis for Applicants
Judgment:	5 June 2020

JUDGMENT OF ASSOCIATE JUDGE LESTER

This judgment was delivered by me on 5 June 2020 at 2.30pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar 5 June 2020

Re Estate R M BLACKWELL [2020] NZHC 1238 [5 June 2020]

[1]                 The applicants are the executors and trustees of the Estate of the late Robert Mortimer Blackwell (Mr Blackwell) who died on 5 April 2018.

[2]Mr Blackwell left a modest estate, the total assets being a little over

$100,000.00, including a half-share in what is referred to in the application made by the executors and trustees as “the Shed”. At this stage, there are outstanding liabilities of not quite $20,000. Of the $100,000 value in the Estate, some $36,000 is represented by the value of the half-share in the Shed on the basis of the rating valuation.

[3]                 A Mr Mark Young, who owns the other half-share of the Shed, has issued proceedings against the Estate claiming that he is entitled to the Estate’s half-share in the Shed on the basis of a resulting trust.

[4]                 The applicants have applied for a Beddoe Order, including an application for directions as to whether to defend the proceedings and, in a practical sense, protection in respect of the costs of defence, that is, that the applicants’ costs will be met from the Estate.

[5]                 This judgment involves applications preliminary to the consideration of the substantive orders sought, that is the Beddoe Order. The ancillary orders sought relate to an application to bring the substantive proceeding by way of an originating application, directions as to service and a direction that a legal opinion relating to advice received by the applicants as to the merits of Mr Young’s claim, be withheld from the papers to be served on Mr Young.

Use of the originating application procedure

[6]                 Justice Osborne in Solar Bright Ltd v Martin, set out the principles that guide the granting of leave to use the originating application procedure.1 Leave is required because the present application is not one that can be brought as of right under r 19.2 of the High Court Rules 2016.

1      Solar Bright Ltd v Martin [2019] NZHC 300.

[7]                 As Osborne J held in Solar Bright, the test under r 19.5 is whether the interests of justice require leave to be granted. His Honour said:2

The interests of justice mean that the Court must secure the just, speedy, and inexpensive determination of this proceeding in its consideration of a r 19.3 application.

[8]His Honour went on to consider whether:

(i)use of the originating application would allow the parties to be fully informed of the matters in issue;3

(ii)whether interlocutory procedures for the resolution of issues such as discovery will be required;4

(iii)whether the application is straightforward; and5

(iv)[His Honour characterised this of being of less significance] whether there are likely to be multiple parties.6

[9]                 The papers filed include not insubstantial affidavits in relation to the merits of Mr Young’s claim, the position of the Estate and the decision faced by the applicants.

[10]              Accordingly, I consider that the use of the originating application procedure, given the detailed papers filed, will allow the parties to be served to be fully informed of the matters in issue.

[11]              It seems unlikely that interlocutory procedures will be required in respect of the substantive matter. As the applicants point out, the role of the Beddoe Order application is not to resolve the dispute between Mr Young and the Estate, which will no doubt require discovery.

[12]              As to whether the application is straightforward, as I will touch on in respect of the application as to directions of service, at a practical level what the beneficiaries of Mr Blackwell’s estate want to do will be relevant. I consider the Court will be able

2      Solar Bright v Martin, above n 1 at [18].

3 At [20].

4 At [21].

5 At [23].

6 At [24].

to determine whether there is a reasonably arguable defence on the basis of the material filed and the submissions of counsel.

[13]              While there will be a number of parties to be served, I do not consider this factor stands against leave being granted and accordingly there is leave for the originating application procedure to be used.

Directions as to service

[14]              The applicants’ view is that the beneficiaries of Mr Blackwell’s estate should be served. I agree with that suggestion given that ultimately it is the value in the Estate which is the subject of the application. In particular the residuary beneficiary needs to be served.

[15]              Accordingly, there is a direction that the beneficiaries of Mr Blackwell’s estate being Stewart Reece and Jocelyn Reece, Donald Murdoch and Make A Wish Foundation of New Zealand Trust, be served.

[16]              The applicants have suggested that Mr Young also be served, if only for the pragmatic reason that the affidavits in support of the Beddoe application disclose evidence which may impact on Mr Young’s decision whether or not to continue with his proceeding. Given the modest size of the estate, the earlier Mr Young is able to assess the merits of his claim, the better. Accordingly, I agree that there be a direction that Mr Young be served.

[17]              The final application is that the legal opinion obtained by the executors as to the strength of Mr Young’s claim be removed from the affidavit of Ms Bartlett when the proceedings are served on Mr Young.

[18]              The applicants explain that the opinion was obtained after they were served with Mr Young’s proceeding. The opinion was sought to assess the prospect of the success of Mr Young’s claim, this is evident on a review of the opinion.

[19]            The applicants submit, and I accept, that the opinion is legally privileged pursuant to s 56 of the Evidence Act 2006. The applicants refer to Glasgow Harley

Trustee Ltd v McLaughlin, as an example where the Court was satisfied that documents attracting litigation privilege should be redacted or suppressed.7

[20]              Accordingly, there is a direction that the legal opinion attached as Exhibit “E” to the affidavit of Megan Lisa Bartlett sworn 20 May 2020, be withheld from service on Mr Young.

[21]              The making of these preliminary directions will permit the originating application to be given a date in a Duty Judge List and to be served.

Addendum

[22]              The apparent value of the Estate’s half-share in the Shed means that all parties, including Mr Young, need to think carefully about the costs of litigation. It would seem Mr Young desires to retain the Shed and to secure the Estate’s half-share. From the Estate’s point of view, if it succeeds in defeating Mr Young’s claim, it will still have the practical issue of how to realise the value of the half-share. Mr Young would be the natural purchaser.

[23]              On Mr Young’s point of view, he will have, if he succeeds in his claim against the Estate, in all likelihood unrecoverable costs. A compromise that represents the realities  of the  Estate attempting to realise a half-share and on Mr Young’s  part      a preparedness to recognise litigation risk and unrecoverable costs should, given the apparent modest amount in issue, allow the parties to reach a pragmatic solution and to halt costs.

Associate Judge Lester

Solicitors:
Webb Farry, Dunedin

7      Glasgow Harley Trustee Ltd v McLaughlin [2018] NZHC 290.