Hare v Aitchison

[2021] NZHC 1148

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2021-409-195

[2021] NZHC 1148

BETWEEN

SONYA MAREE HARE

Applicant

AND

ROSALIE PEARL AITCHISON

Respondent

Chambers Hearing:	20 May 2021 (by telephone)
Appearances:	C G Mullins for Applicant
Judgment:	21 May 2021

JUDGMENT OF OSBORNE J

This judgment was delivered by me on 21 May 2021 at 2.30 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

HARE v AITCHISON [2021] NZHC 1148 [21 May 2021]

Introduction

[1]This proceeding concerns the estate of the late Craig James Aitchison.

[2]                 Mr Aitchison died at Christchurch around 1 November 2020. He died intestate. His mother, Rosalie Pearl Aitchison, the respondent in this proceeding, was on 23 December 2020 granted letters of administration in Mr Aitchison’s estate.

Mr Aitchison’s estate

[3]                 As disclosed by the respondent’s solicitor in February 2021, Mr Aitchison’s estate consists of:

(a)his property at 6A Mortlake Street, Islington (with a Government Valuation of $425,000 and subject to a mortgage securing approximately $209,000);

(b)$84,000 cash held in the solicitor’s trust account; and

(c)Mr Aitchison’s household effects.

The relationship between Ms Hare and Mr Aitchison

[4]                 Sonya Maree Hare, the applicant in this proceeding, asserts that she and Mr Aitchison lived together as a committed couple from around May 2017 at Mortlake Street and did so until Mr Aitchison’s death (November 2020).

[5]                 She has provided relatively brief narrative evidence as to the de facto relationship, understandably brief in the context of the urgency of this application.

[6]                 Since December 2020, there has been correspondence between Ms Hare’s solicitors and Mrs Aitchison’s solicitors. In a letter dated 20 April 2021, Mrs Aitchison’s solicitors set out in detail matters of evidence relating to her assertion of a de facto relationship for the stated period. The letter included a summary of information said to be extracted from 200 pages of records held by Oranga Tamariki. While the Oranga Tamariki record has not been produced in the context of this

application, the contents if correctly summarised in the solicitor’s letter will provide corroboration of Ms Hare’s assertion as to her de facto relationship.

[7]                 The consequence of that relationship, if established, is that Ms Hare will be entitled by reason of the intestacy to the majority of Mr Aitchison’s estate.

[8]                 More significantly, in the context of rights of administration, Ms Hare would thereby have, under r 27.35(4)(a) of the High Court Rules, the first priority to a grant of letters of administration. The affidavit provided by Mrs Aitchison, in support of the grant of letters of administration to her, contained the assertion that Mr Aitchison had not been survived by a de facto partner entitled to succeed on the intestacy. That is a position which Mrs Aitchison has since maintained through her solicitor’s correspondence, rejecting the assertions of Ms Hare as to her de facto relationship with Mr Aitchison.

Application for a freezing order

The application

[9]                 Ms Hare applies for a freezing order restraining Mrs Aitchison from disposing of, or dealing with, or diminishing the value of assets of Mr Aitchison’s estate. She also seeks an ancillary order that Mrs Aitchison provide an up-to-date schedule of assets and liabilities of the estate and of dealings in relation to it.

The regulatory regime

[10]              Under Part 32 of the High Court Rules, the Court may make a freezing order on or without notice to a respondent in accordance with Part 32.1 The form of freezing order sought by Ms Hare follows the wording of r 32.2(2).

[11]              Under r 32.2(4) the application for a freezing order must be made by interlocutory application under Part 7 High Court Rules or by originating application under Part 19.

1      High Court Rules, r 32.2(1).

[12]              Although the application filed for Ms Hare is entitled “interlocutory application”, counsel in the body of the document referred to the application as having been made in reliance on Part 19 of the Rules. It is appropriate to treat the application as an originating application under Part 19.2

[13]              Rule 32.2(5) of the High Court Rules requires that the application be accompanied by a signed undertaking as to damages. Ms Hare has complied with that requirement.

[14]              There are essentially three requirements for a freezing order — the Court of Appeal however has stressed the importance of preserving the flexibility of the freezing order remedy, and the need to consider the overall justice of the case (balancing the need to protect the applicant so as to ensure any judgment is not rendered barren against any prejudice or hardship to the respondent or a third party).3

Discussion of the requirements for a freezing order

[15]              First, Ms Hare must establish that she has a good arguable case that the allegations in the proposed claim are capable of tenable arguments and are supported by sufficient evidence. The outcome Ms Hare will ultimately seek is the recall of the letters of administration granted to Ms Aitchison and the grant of letters to herself. She has through her affidavit provided sufficient to establish a tenable argument that she qualified through a de facto relationship to have first priority to letters of administration.

[16]              Secondly, there must be assets to which the freezing order can apply. There clearly are in this case.

[17]              Thirdly, the applicant must establish a real risk of dissipation. Here, Ms Aitchison has unsuccessfully sought to have Ms Aitchison accept the existence and length of a de facto relationship, with the rights of inheritance that would follow. Mrs Aitchison’s solicitors have responded with detailed factual assertions indicating why Ms Hare “may not have been the de facto partner of the deceased”. The

2      High Court Rules, r 19.2(y) applies.

3      Shaw v Narain [1992] 2 NZLR 544 (CA) at 548.

correspondence has also indicated that Mrs Aitchison will be proceeding to sell the property (as occupied previously and now by Ms Hare). Most recently Ms Hare’s solicitors have repeatedly sought an undertaking that no distributions will be made from the estate and no fees deducted without the prior agreement of Ms Hare. Such undertaking not being forthcoming. In the absence of such an undertaking and given the responsibility of Mrs Aitchison’s solicitors to act in accordance with Mrs Aitchison’s instructions, Ms Hare has established that there is a real risk of dissipation of the estate assets.

Without notice application

[18]              Ms Hare makes the present application without notice to the respondent. She asserts that requiring her to proceed on notice would cause undue risk to her.

[19]              For the same reasons as I have found a real risk of dissipation to exist, I am satisfied that to require Ms Hare to proceed on notice would create undue risk. The interests of justice require that the application be determined on a without notice basis at this point.

[20]              To preserve the right of the respondent to establish that the freezing order should not continue in force, I will make orders for the prompt sealing and service of the freezing order; reservation of leave to the respondent to apply to set aside the freezing order; and allocation of a case management conference for the making of further directions. At that directions conference, the Court is likely to impose a timetable in relation to any application to be made by Ms Hare in relation to the letters of administration of the estate.

Orders

[21]I order:

(a)there is a freezing order restraining the respondent from disposing of, dealing with, or diminishing the value of the assets of the estate of Craig James Aitchison, including all funds held on trust by the solicitors for the estate (whether Cavell Leitch, Nick Morley or otherwise); and

(b)the applicant is forthwith to have this order sealed and served upon the respondent;

(c)the respondent has leave on three working days’ notice to apply for orders setting aside or otherwise varying this order; and

(d)this proceeding is adjourned to a case management conference at 12.30 pm, 2 June 2021 (Associate Judge Paulsen).

Osborne J

Solicitors:

Godfreys Law, Christchurch