Johns v Lord
[2021] NZCA 541
•19 October 2021 at 9 am
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA428/2021 [2021] NZCA 541 |
| BETWEEN | STEPHEN HENRY CYRIL JOHNS |
| AND | CHRISTOPHER NORMAN LORD AND COLIN CLIVE HOLLOWAY |
| Court: | French and Brown JJ |
Counsel: | S R Mitchell for Applicant |
Judgment: | 19 October 2021 at 9 am |
JUDGMENT OF THE COURT
AThe application for leave to bring a second appeal is declined.
BThe applicant must pay one set of costs to the respondents for a standard application on a band A basis with usual disbursements.
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REASONS OF THE COURT
(Given by French J)
Introduction
Mr Johns seeks leave to appeal a decision of Gordon J in the High Court.[1] Leave is required under s 60 of the Senior Courts Act 2016 because the proposed appeal would be a second appeal, the High Court decision being itself an appeal from the Family Court.[2]
[1]Johns v Lord [2021] NZHC 281 [High Court decision].
[2]Johns v Lord [2020] NZFC 8974 [Family Court decision].
As required, Mr Johns first asked the High Court to grant him leave to appeal to this Court. The High Court declined to grant leave and accordingly Mr Johns now seeks special leave to appeal from this Court.[3]
Background
[3]Johns v Lord [2021] NZHC 1422 [Leave decision].
The first respondents are the trustees and executors of the estate of Mr Johns’ father. The second respondent is the latter’s widow and Mr Johns’ stepmother. She and Mr Johns’ father were married for 38 years.
Under his will, Mr Johns’ father had made a bequest of $20,000 to Mr Johns. Mr Johns applied under the Family Protection Act 1955 to the Family Court for further provision from the estate. The application was opposed on the grounds that even if the claim was meritorious, the estate did not have any assets. At some stage, Mrs Johns offered to pay the bequest to Mr Johns out of her own funds in final settlement of any claims. Mr Johns did not accept that offer.[4]
[4]A similar offer made to each of his sisters who accepted and respectively received bequests of $30,000 and $40,000.
A week before the date allocated for the hearing of the Family Protection Act claim, Mr Johns sought an adjournment on the grounds that the hearing should not proceed until an issue regarding bank account monies had been resolved.
It appears this issue had been simmering for some time and had already been the subject of an earlier adjournment application. Three years before he died, the father had received inherited funds of $394,142. The money was paid by Mrs Johns using an enduring power of attorney into a bank account in the joint names of herself and Mr Johns’ father. That meant that on the father’s death, the money passed to Mrs Johns by way of survivorship and did not form part of his estate. It appears that during the father’s lifetime, approximately a third of the money in the bank account had been used to pay his rest home fees.
Mr Johns’ application for an adjournment was opposed by the respondents. The presiding Judge, Judge Burns, reserved his decision on both the application for an adjournment and the substantive application.
In his subsequent decision, the Judge recorded that it was clear at the hearing the estate had no assets and that accordingly the claim under the Family Protection Act could only succeed if there was a successful application to claw the bank account monies back into the estate. He said the first respondents were clear that they did not intend to bring any such application which meant if Mr Johns wished to pursue the matter, he would have to apply for an order under the Trustee Act 1956 or the Administration Act 1969 to remove them as trustees and executors or make an application himself under the Protection of Personal and Property Rights Act 1988.[5]
[5]Family Court decision, above n 2, at [10].
The Judge then addressed the merits of any clawback application, concluding that such an application would have little or no prospect of success and that even if it did succeed any benefit obtained as a result would be far outweighed by the costs of the exercise.[6] The Judge also noted any clawed back money would be subject to other legitimate demands on the estate which would further deplete any benefit to Mr Johns. Those considerations combined with the significant delays in the proceeding getting to a hearing persuaded the Judge to decline to grant the adjournment.[7]
[6]At [13]–[15].
[7]At [20]–[22].
Judge Burns then went on to hold that the Family Protection Act claim must fail because there were no assets in the estate. The Judge therefore dismissed the substantive application.[8]
[8]At [22].
Mr Johns then filed an appeal in the High Court against the Judge’s decision to dismiss his substantive application. Gordon J held that in the absence of any evidence to contradict the executor’s evidence regarding the lack of assets in the estate, Judge Burns’ decision was inevitable. She pointed out that the disposition of assets to third parties during a testator’s lifetime is not a matter that can be determined in a proceeding under the Family Protection Act. The Judge went on to say that although the Family Court did have power to review the dealings of a person holding a power of attorney under the Protection of Personal and Property Rights Act, Mr Johns had never made an application under that Act. This, despite his counsel signalling the possibility of doing that over a year before the fixture date for the Family Protection Act application.[9]
[9]High Court decision, above n 1, at [44]–[46].
Dissatisfied with that outcome, Mr Johns now wishes to appeal to this Court.
The application for leave
In order to obtain leave to appeal, Mr Johns must persuade us that his proposed appeal raises some question of law or fact capable of bona fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the cost and delay of a further appeal.[10]
[10]Waller v Hider [1998] 1 NZLR 412 (CA) at 413.
Mr John’s proposed grounds of appeal are that the Court erred in:
(a)finding that adequate provision had been made for his proper maintenance and support from the estate;
(b)finding there were no assets in the estate despite the fact the executors had failed in their duty to secure all the assets of the estate;
(c)declining to allow Mr Johns the opportunity to bring proceedings to secure the assets of the estate; and
(d)finding that the prompt resolution of proceedings outweighed Mr Johns’ interests in securing the assets of the estate.
On behalf of Mr Johns, counsel Mr Mitchell acknowledges that the proposed grounds of appeal are case specific and not of general or public importance. However, in his submission, there has been a serious injustice which warrants a second appeal. He contends the Family Protection Act claim was dismissed when it had not been properly heard and considered, the High Court and the Family Court putting the interests of prompt resolution ahead of the requirements of justice and unfairly holding Mr Johns solely responsible for the delays. The executors should also have been held responsible for the delay. Further and in any event, any inconvenience the delay has caused is outweighed by the fact Mrs Johns has, with assistance from the executors, misused her power of attorney to transfer the money into the joint account.
Analysis
We appreciate that despite the relatively modest amount at stake Mr Johns feels strongly about this proceeding. However, in the interests of finality, the legal threshold for obtaining leave to bring a second appeal is a high one and in our assessment he fails by some margin to satisfy it.
First, aspects of the proposed grounds of appeal are misconceived. The appeal can only be against the decision of the High Court and the High Court appeal was limited to the substantive decision. Mr Johns never appealed the decision to decline the adjournment application and it follows that issues relating to the adjournment decision cannot now be raised.
Secondly, the proposed appeal lacks merit. Even if it was found that the father had breached his moral duty to Mr Johns, the absence of any assets in the estate is fatal to the claim. The reasoning of Gordon J on this point was, in our view, unassailable.
Outcome
The application for leave to bring a second appeal is declined.
As regards costs, there is no reason why these should not follow the event. We note that one set of submissions were (appropriately) filed on behalf of both the first and second respondents and therefore order that the applicant pay one set of costs to the respondents for a standard application on a band A basis with usual disbursements.
Solicitors:
Conveyancing Centre, Auckland for Applicant
Brannigans, Auckland for Respondents
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