Estate of Green
[2024] NZHC 3476
•20 November 2024
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV 2024-404-000784
[2024] NZHC 3476
UNDER Section 133 of the Trust Act 2019, and Part 18 of the High Court Rules 2016 IN THE MATTER OF
the Estate of IAN JAMES GREEN
AND
GUY PATRICK NEWLOVE as executor and trustee of the Estate of IAN JAMES GREEN Plaintiff
Hearing: 4 November 2024 Appearances:
A E McDonald and J D Money for the Plaintiff C J Medlicott for Lyn Howson (Interested Party)
Judgment:
20 November 2024
JUDGMENT OF TAHANA J
This judgment was delivered by me on 20 November 2024 at 12 noon Pursuant to Rule 11.5 of the High Court Rules
…………………………
Registrar/Deputy Registrar
Solicitors/Counsel:
Daniel Overton and Goulding, Auckland Medlicotts, Dunedin
Newlove (the Estate of IAN JAMES GREEN) [2024] NZHC 3476 [20 November 2024]
Trustee application for directions
[1] Mr Newlove is the trustee of the estate of Mr Ian Green and applies for directions under s 133 of the Trusts Act 2019.
[2] Mr Green’s will provides for the distribution of the balance of his estate (after payment of debts and funeral expenses) to Mr Rangi Harris if Mr Harris survives Mr Green and, in the sole discretion of the trustees, was living in a de facto relationship with Mr Green at his death. If Mr Harris was not in a de facto relationship with Mr Green at the time of his death, the balance of the estate is to be divided equally between Mr Green’s sister, Ms Howson, and Mr Green’s previous partner, Mr Bayley (who is now deceased).
[3] Mr Green passed away in 2020. It is undisputed that Mr Harris and Mr Green were in a de facto relationship from 2010 until January 2016, when Mr Harris assaulted Ms Howson. Mr Harris had no further contact with Mr Green but maintains that they were still in a de facto relationship. Ms Howson argues that the relationship ended when she was assaulted. At the time of the assault, Mr Green had been certified mentally incapable and lacking capacity to understand the nature of decisions about his medical condition and living situation.
[4] Mr Newlove says he is in genuine doubt as to how he ought to exercise his discretion and therefore requests the Court’s directions. The key issues are therefore:
(a)whether the Court has jurisdiction to provide the directions sought; and
(b)if so, whether the Court should direct Mr Newlove as to the status of Mr Harris’ relationship with Mr Green at the time of Mr Green’s death.
Background
[5] Mr Green died on 10 March 2020 leaving a will dated 14 December 2012. Mr Newlove is the sole surviving executor of the estate and obtained probate on 9 March 2021. Mr Green’s estate comprises cash of approximately $951,000.
[6]Mr Green’s will provides for the distribution of the estate as follows:
8. I DIRECT my Trustees to hold the rest of my estate:
8.1.1To pay my debts and funeral expenses, my Trustees’ administration expenses and any death duty payable on my estate.
8.1.2To pay the balance remaining to my partner RANGI JOSEPH HARRIS should he survive me and in the sole discretion of my Trustees is living in a de facto relationship with me at my death, for his own use absolutely. However if my partner does not survive me or dies in a common accident with me, or my Trustees decide in their sole discretion that RANGI JOSEPH HARRIS was not living in a defacto relationship with me at my death then to pay the balance remaining equally to my friend the said GRANT MAURICE BAYLEY and my sister the said LYNN DENISE HOWSON should they survive me.
[7] Both Mr Bayley and Ms Howson survived Mr Green. Mr Bayley died on 20 December 2020.
Undisputed facts
[8] It is undisputed that Mr Green and Mr Harris were in a de facto relationship from 17 March 2010 until 29 January 2016.
[9] On 1 August 2011, Mr Green and Mr Harris entered an agreement contracting out of the Property (Relationships) Act 1976, recording that they began a de facto relationship on 17 March 2010.
[10] On 14 December 2012, Mr Bayley was appointed enduring power of attorney for property matters by Mr Green.
[11] In July 2014, Mr Green suffered a head injury and in August that year, Mr Green was certified mentally incapable and not competent to manage his own affairs in relation to property. He was also certified as lacking the capacity to understand the nature of decisions about his medical conditions and living situation.
[12] In May 2015, Mr Green moved to the secure unit in a retirement village hospital in Auckland. Mr Harris continued to visit Mr Green.
[13] Ms Howson was appointed Mr Green’s interim welfare guardian in 2015. Mr Harris indicated his intention to seek to be appointed welfare guardian and a hearing was set down to determine whether Ms Howson or Mr Green should be welfare guardian. The hearing was set down for March 2016.
[14] On 29 January 2016, Mr Harris assaulted Ms Howson at Mr Green’s retirement village. Ms Howson lost consciousness and was admitted to the intensive care unit of Middlemore Hospital where she was hospitalised for two weeks.
[15] Following the assault, Mr Harris was arrested and charged with wounding with intent to cause grievous bodily harm.
[16] In February 2016, Mr Bayley arranged for Mr Green to move to a dementia unit in a rest home in Dunedin, where Ms Howson resides.
[17] Mr Harris did not pursue his application to be appointed welfare guardian and Ms Howson was appointed Mr Green’s permanent welfare guardian.
[18] Mr Green passed away in 2020. Mr Newlove obtained probate on 9 March 2021, by which time the other trustee, Mr Bayley had passed away.
[19] In November 2021, Ms Howson’s solicitors notified the solicitors for the estate that the relationship between Mr Green and Mr Harris had ended in January 2016 when Mr Harris assaulted Ms Howson.
[20] The solicitors for the estate attempted to locate Mr Harris who was finally located in July 2021 after an advertisement was placed in the newspaper.
[21] In May 2022, Mr Harris’ solicitors indicated that he did not wish to pursue any claim and that money was never the motivation for his relationship with Mr Green. Solicitors for the estate then requested a deed of disclaimer from Mr Harris disclaiming any interest in Mr Green’s estate.
[22] In June 2023, after not receiving any further response from Mr Harris, the solicitors for the estate notified Mr Harris’ solicitors that Mr Newlove was intending to apply to the court for directions under s 133 of the Trusts Act.
[23] On 19 October 2023, Mr Harris’ solicitors provided an affidavit dated that same day in which Mr Harris deposes that he remained in a de facto relationship with Mr Green until his death, that he was refused contact with him but that his love for Mr Green endures.
[24] In March 2024, Mr Newlove sought directions as to service proposing that this proceeding be served on Ms Howson, Mr Harris, the estate of Mr Bayley and the other named beneficiaries under the will. Those parties were subsequently served. Mr Harris has not taken any steps in this proceeding.
Is there jurisdiction to provide directions to Mr Newlove?
[25]Section 133 of the Trusts Act provides:
133 Trustee may apply to court for directions
(1)A trustee may apply to the court for directions about—
(a)the trust property; or
(b)the exercise of any power or performance of any function by the trustee.
(2)The application must be served, in accordance with the rules of court, on each person interested in the application or any of them as the court thinks fit.
(3)On an application under this section, the court may give any direction it thinks fit.
(4)This section does not restrict the availability of alternative proceedings within the court’s jurisdiction, including a declaration interpreting the terms of the trust.
[26]The requirements of s 133(2) have been met.
[27] The courts have considered the scope of the jurisdiction to provide directions to trustees under s 133 and s 66 of the Trustees Act 1956 (the predecessor to the Trust Act). Ms McDonald for Mr Newlove referred to this Court’s decision in Re Hugh
Green Trusts1where the Court summarised the four categories of cases where directions will be given. Ms McDonald submitted that this application comes within category two, where the trustee is proposing a course of action and requests the Court’s directions because the decision is “momentous in nature”.2
[28] The memorandum filed in support of this application records that Mr Newlove has determined that the deceased and Mr Harris were not in a de facto relationship at the time of Mr Green’s death. Mr Newlove does not depose that he has made any such determination. Rather, Mr Newlove deposes that he has a genuine doubt as to how he ought to exercise his discretion noting the beneficiaries may have differing views on whether Mr Green and Mr Harris were living in a de facto relationship at the time of Mr Green’s death.
[29] This application does not fall neatly within category two as the trustee has not proposed a course of action but rather has surrendered discretion to the court because he is in genuine doubt. I accept that the fact of a potential dispute between the beneficiaries is not fatal to the exercise of discretion noting Kos J’s observations in New Zealand Māori Council v Foulkes:3
[47] Secondly, the existence of a dispute is not fatal to the exercise of the jurisdiction. Indeed, the existence of a dispute, or at least a doubt, is essential. The Court’s function is not purely advisory, or to be involved to resolve abstract hypotheses. In this case the parties are in dispute, but are at least united in seeking the Court’s ruling on interpretation.
[30] The issue here is not one of interpretation but on the trustee’s exercise of discretion given the evidence before the trustee.
[31] The guidance of the Court of Appeal in Chambers v SR Hamilton Corporate Trustee Ltd is relevant in this context.4 The Court considered the nature of the English jurisdiction noting the summary in Marley v Mutual Security Merchant Bank and Trust Co Ltd:5
1 Re Darlow (as trustees of Hugh Green Trust) [2021] NZHC 2184.
2 Ms McDonald referred to Re Darlow (as trustees of Hugh Green Trust), above n 1, where this Court summarised the categories of cases where directions may be provided.
3 New Zealand Māori Council v Foulkes [2014] NZHC 1777, [2015] NZAR 1441.
4 Chambers v SR Hamilton Corporate Trustee Ltd [2017] NZCA 131 at [32].
5 At [32] citing Marley v Mutual Security Merchant Bank and Trust Co Ltd [1991] 3 All ER 198 (PC) at 201.
A trustee who is in genuine doubt about the propriety of any contemplated course of action in the exercise of his fiduciary duties and discretions is always entitled to seek proper and professional advice and, if so advised, to protect his position by seeking the guidance of the court.
[32] The Court went on to note that applications for directions will not usually be appropriate where important facts are contested.6 The Court should be put in possession of all the material necessary to enable it to exercise its discretion.7
[33] The caselaw therefore indicates that the Court may provide directions where a trustee is in genuine doubt and seeks guidance but not if there are important facts that are contested.
[34] Here, Mr Newlove seeks the Court’s guidance. It is undisputed that Mr Harris was in a de facto relationship with Mr Green and then had no contact from January 2016 until Mr Green’s death in 2020. I am satisfied that the Court has jurisdiction to provide the directions sought based on those undisputed facts.
Is it a reasonable exercise of discretion to find there was no de facto relationship?
[35] In determining whether Mr Harris and Mr Green were in a de facto relationship, guidance may be taken from the definition of de facto relationship in the Property (Relationship) Act 1976. Section 2D refers to a de facto relationship between two persons over 18 years, who live together as a couple, and who are not married or in a civil union with one another. In determining whether they live as a couple, all the circumstances are relevant including the duration of the relationship, the nature and extent of common residence, whether or not a sexual relationship exists, the degree of financial dependence or interdependence, the ownership, use or acquisition of property, the degree of mutual commitment to a shared life, the performance of household duties and the reputation and public aspects of the relationship.
[36] It is accepted that Mr Harris and Mr Green were in a de facto relationship from 2010 until January 2016. The key issue is whether Mr Harris’ assault of Ms Howson
6 At [34].
7 Marley v Mutual Security Merchant Bank and Trust Co Ltd, above n 5.
ended the relationship. Ms Howson argues that it did. Mr Harris’ affidavit indicates that he did not consider that it did.
[37] Ms Howson’s evidence is that after the assault she was not aware of Mr Harris ever phoning or writing to Mr Green. She says that Mr Green never asked after Mr Harris. Mr Harris had no access to Mr Green’s finances, which were managed by his attorney, Mr Bayley. There was no ownership of shared property. Ms Howson argues that Mr Green would not have willingly continued a relationship with Mr Harris after the assault. It is impossible to ascertain Mr Green’s intentions given his mental incapacity.
[38] It is clear that Mr Harris intended to remain in a relationship with Mr Green. Mr Harris’ affidavit deposes that he was trespassed from the care facility. He does not provide any evidence in response to Ms Howson’s evidence regarding the assault in January 2016. It is unclear whether he was trespassed prior to, or after, the assault. I cannot determine on the evidence available whether Mr Harris was convicted and imprisoned or otherwise detained after he was charged. A private investigator reports that Mr Harris has been in the community since 2019, which is prior to Mr Green’s death.
[39] Mr Harris’ evidence indicates that he still loved Mr Green and expressed this to mutual friends of Mr Green so that they may pass this on. There is no evidence from those persons. There is also no evidence of any contact after January 2016 despite Mr Harris’ deposing as to his continuing love for Mr Green.
[40] The undisputed evidence indicates that there was no contact between Mr Harris and Mr Green as from 29 January 2016. Despite service of the application, Mr Harris did not participate in the hearing, so the Court only has his affidavit on which to determine whether a relationship continued.
[41] In the absence of any contact between Mr Green and Mr Harris over a four- year period before Mr Green’s death it would be a reasonable exercise of Mr Newlove’s discretion to determine that Mr Harris was not living in a de facto relationship with Mr Green at the time of his death. While Mr Harris’ affidavit
indicates that he continued to love Mr Green, it does not disclose any evidence of any contact or shared financial dependence to support the existence of an ongoing relationship.
[42] In these circumstances, I find that it is within Mr Newlove’s discretion to determine that Mr Green and Mr Harris were not in a de facto relationship at the time of Mr Green’s death.
[43] The will provides that if the trustees decide that Mr Harris was not living in a de facto relationship with Mr Green at his death, then they are to pay the balance remaining equally between Mr Bayley and Ms Howson should they survive Mr Green. There is no issue of interpretation of the will such that directions are required as to distribution. This is clear.
Result
[44] I therefore determine that it is a reasonable exercise of the discretion of the trustee to determine that Mr Harris was not in a de facto relationship with Mr Green at the time of his death and to distribute the balance of the estate as provided in the will.
Costs
[45]The trustee’s costs of the application are to be paid out of the estate.
[46] Ms Howson’s reasonable costs in relation to this application are to be paid out of the estate.
Tahana J
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