Halliday v Hannah - [2022] NZHC 2066

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-2343

[2022] NZHC 2066

IN THE MATTER of the Trusts Act 2019 and the Land Transfer Act 2017

BETWEEN

KERRI-ANN MAREE HALLIDAY

Plaintiff

AND

SHANE CHRISTOPHER HANNAH

First Defendant

JASON HANNAH

Second Defendant

Hearing: 31 May 2022

Appearances:

N Woods for the Plaintiff

M Phillips for the First Defendant
GTB Coleman for the Second Defendant

Judgment:

19 August 2022

JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

This judgment was delivered by me on 19 August 2022 at 3pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:
Rice Craig, Auckland
Vicki Ammundsen Trust Law Ltd, Auckland Lance Lawson Ltd, Rotorua

KERRI-ANN MAREE HALLIDAY v SHANE CHRISTOPHER HANNAH [2022] NZHC 2066 [19 August 2022]

Introduction

[1] The plaintiff has applied for summary judgment of proceedings seeking an order for sale of a property at 58 Morey Street, Owhata, Rotorua, and for division of the sale proceeds in equal shares between her and the second defendant, her former relationship partner and father to her two children.

[2] The plaintiff relies on a Deed of Bare Trust (Trust Deed) which was entered into in 2010 between herself, the first defendant (the second defendant’s brother) and the second defendant. Amongst other things, this Trust Deed recorded that the first defendant, as trustee, would hold an undivided half share in the property on trust for the plaintiff as beneficiary.

[3] The plaintiff and the second defendant have not been in a relationship since 2012. The plaintiff’s submissions record that their subsequent relationship has remained hostile.

[4] In 2021 the first defendant transferred his half interest in the property to the second defendant to allow refinancing of the mortgage. Neither of the defendants nor their lawyers spoke to the plaintiff or otherwise sought her consent to the transfer of the property or the refinancing. The plaintiff submits that this is a clear breach of the Trust Deed and that the first defendant has been assisted in this breach by the second defendant, as the recipient of the one-half share of the plaintiff’s interest in the property.

[5] The plaintiff submits that paragraph J of the Trust Deed clearly articulates that on the refinancing of the property or its sale, all net proceeds as to an undivided one- half share will be “repaid in full to the beneficiary without deduction”.

[6] The defendants submit in response that the Trust Deed is premised on the relationship continuing and the clauses relied on by the plaintiff are unworkable and inapplicable under the present circumstances. Since 2012 when the parties separated, the second defendant has paid all outgoings on the property including all mortgage payments.

[7] Both the first and second defendants submit an order for sale is not available on the plaintiff’s case as pleaded.

[8] Furthermore, even if it were available, such an order would require the Court to embark on a full factual enquiry before it is made,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Halliday v Hannah

Details

AGLC: Halliday v Hannah [2022] NZHC 2066
Case: [2022] NZHC 2066
Decision Date: 19 August 2022

CaseChat Overview and Summary

In the High Court of New Zealand, Kerri-Ann Halliday sought summary judgment against Shane Christopher Hannah and Jason Hannah for an order for sale of a property at 58 Morey Street, Owhata, Rotorua, and for division of the sale proceeds. The plaintiff claimed that the defendants breached a Deed of Bare Trust by transferring her half share in the property to Jason without her consent. The plaintiff also sought an order for sale and division of the proceeds in equal shares. The defendants argued that the Trust Deed was premised on the relationship continuing, and the clauses relied on by the plaintiff were unworkable and inapplicable under the present circumstances.

The issues before the court were whether there had been a breach of trust as alleged, whether an order for sale was available, whether such an order could be made on a summary judgment basis, and whether summary judgment should be entered for liability with an accounting exercise to follow. The court found that there were factual disputes and credibility issues that could not be resolved on the basis of the affidavit evidence. The court also found that there was a reasonably arguable defence that the Trust Deed did not provide a basis for the plaintiff obtaining an order for sale, and that the mandatory considerations under s 342 of the Property Law Act 2007 could not be determined on the basis of the affidavit evidence filed. Therefore, the application for summary judgment was declined.

The court held that the plaintiff's interests were protected by her caveat over the Property, and the proceedings should go to a full hearing so that the position between the parties could be properly ascertained. The defendants were entitled to costs, and the parties were asked to confer and attempt to reach agreement. If that was not possible, memoranda may be filed on behalf of the defendants and the plaintiff within specified periods.

Orders