Kang v Perpetual Trust Limited

[2023] NZHC 2276

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2022-485-316

[2023] NZHC 2276

UNDER

the Administration Act 1969 and Part 19 of the High Court Rules 2016

IN THE MATTER

of the estate of Alexander Gavin Brown

BETWEEN

RONG KANG

Plaintiff

AND

PERPETUAL TRUST LIMITED

First Defendant

GAVIN WILLIAM BROWN
Second Defendant

NATALIE MARGARET BROWN

Third Defendant

Hearing:

On the papers

Appearances:

A S Butler KC, M Chen and J E M Lethbridge for the Plaintiff N L Walker and F G Wilson for the First Defendant

L C A Farmer, H van Schreven and J Kaye for the Second Defendant

D H McLellan KC and J W H Little for the Third Defendant
G J Angus and L N Milne for the Interested Party (Tiger Brown)

Judgment:

22 August 2023

JUDGMENT OF COOKE J

(Stay)

[1]    By interlocutory application dated 12 July 2023 the plaintiff, Madam Kang, applies for a stay of the orders made by the Court pending her appeal. In accordance with the judgment under appeal, the Court rescinded an earlier grant of letters of administration to Perpetual Trust Ltd (PTL), and granted probate to PTL under a will

KANG v PERPETUAL TRUST LIMITED [2023] NZHC 2276 [22 August 2023]

that had been discovered after letters of administration had issued.1 In that judgment PTL was appointed as administrator rather than the plaintiff, who was named in the will, pursuant to s 6 of the Administration Act 1969.

[2]    The plaintiff now seeks a stay, or other interim relief, pending her appeal to the Court of Appeal in which she seeks to be appointed administrator. The application is supported by her son, Mr Tiger Brown. The plaintiff has filed an affidavit in support of the application. The application is opposed by PTL and the other parties to the proceedings who are the children of the deceased’s first marriage. Mr David Boyce, the National Development Manager of PTL has filed an affidavit explaining PTL’s basis for opposition, and both Madam Kang and Mr Tiger Brown have filed affidavits in reply.

[3]    I held a telephone conference in relation to the application on 26 July where it was agreed that the application could be determined on the papers after the filing of written submissions. These have now been received.

Orders sought

[4]    The application was initially made under rr 15.1 and 20.10 of the High Court Rules 2016 and the Court’s inherent jurisdiction, but the written submissions clarify that it is sought under r 12(3) of the Court of Appeal (Civil) Rules 2005. The approach under this rule is well established. The Court must balance the successful litigant’s right to the fruits of a judgment against the need to preserve the position should the appeal be successful. That can involve consideration of a number of factors.2

[5]    There is a difficulty with the application arising from the fact that the Court’s orders here are non-executory. PTL has been appointed administrator to perform functions under the Administration Act. Moreover the Court’s judgment rescinded a previous appointment of PTL as administrator under letters of administration. So staying the Court’s judgment would still involve PTL being the administrator, but not in accordance with the will. That would not be appropriate. It is also inappropriate

1      Kang v Perpetual Trust Ltd [2023] NZHC 1501.

2      See Keung v GBR Investment Ltd [2010] NZCA 396 at [11].

for there be no person acting in the role of administrator, particularly because of the substantial litigation that is presently on foot between the parties involving significant sums of money. Details of this litigation are set out in the judgment under appeal.3

[6]    In her submissions in support Madam Kang adjusted the orders that she sought, at least in the alternative, in response to these difficulties. She seeks:

… such other interim relief as [the Court] sees fit to ensure that PTL cannot take further proactive steps in progressing the administration of the estate of Mr Alexander Brown, in a manner that may irrevocably prejudice Madam Kang and her interests including by commencing any further litigation/proceedings or disposing of any of the estate’s assets, until the decision of the Court of Appeal in the appeal of the Judgment is issued.

[7]    It is clear from r 12(3) that the Court has broad powers to formulate interim orders to preserve an appellant’s position pending appeal. But the above formulation is ambiguous. It is not clear what “proactive steps” would be, and when they would be regarded as being taken “in a manner that may irrevocably prejudice Madam Kang and her interests”. I consider that any application for interim orders would need to be focused on particular actions that Madam Kang wished to prevent PTL taking pending the determination of her appeal.

[8]    To the extent that reference has been made to steps that are anticipated that PTL may take over the next few months, I am not persuaded there is any reason why the Court should prevent PTL from taking them. Indeed, I am satisfied that any orders preventing the steps identified below would be unjustified, and would give Madam Kang and Mr Tiger Brown an unfair advantage in the underlying litigation and other disputes between the parties. In particular:

(a)PTL, as administrator, wishes to take steps in Hong Kong in relation to its appeal against the decision of the Hong Kong High Court scheduled to be heard in December. It also wishes to respond to Madam Kang’s application to permanently stay the proceedings in the Hong Kong High Court, and to deal with the caveat that has been lodged by Madam Kang in Hong Kong. The Hong Kong High Court declined PTL’s application

3      Kang v Perpetual Trust Ltd, above n 1, at [27], and [38]–[43].

because probate had not been resealed in Hong Kong. I do not accept Madam Kang’s submission that PTL is acting in a personal capacity in these proceedings which would not be affected by any order this Court would now make. PTL is plainly seeking to take litigation steps in Hong Kong as administrator. I can see no justification for orders preventing PTL taking steps in these proceedings.

(b)The order would also prevent PTL taking steps in Madam Kang’s proceedings in New Zealand under the Property (Relationships) Act 1976. It would prevent the filing of a statement of defence, and the provisions of discovery or information in connection with the proceedings. Again there is no justification for making that order. I do not accept Madam Kang’s submissions that it has been agreed that there is no need for PTL to take such steps, and note that this is not accepted by PTL or the other parties.

(c)There is also a liability to pay overdue special body corporate levies in relation to New Zealand properties. There is a dispute over whether these properties are owned by Mr Tiger Brown, or by the estate. I do not accept the submissions from Madam Kang and Mr Tiger Brown that there is no issue in this regard because Mr Brown has agreed to pay these amounts. PTL point out that there has been no complete agreement in this respect. I see no reason to prevent PTL taking the steps it regards as appropriate in relation to this matter. Moreover the very existence of issues of this kind demonstrates why it is necessary to have PTL continue to attend to all issues arising in the administration.

[9]    The application for a stay at this stage would significantly alter the status quo. PTL has been acting as administrator since its appointment, without opposition from Madam Kang and Mr Tiger Brown, in March 2021. In my view it would now cause substantial prejudice to the other beneficiaries if orders of the kind sought were made. That is because PTL could be prevented from continuing with the ongoing litigation. The timing of the steps being taken in that litigation is now more important. Any orders directed to more specific actions that the administrator might take would have

to be clearly identified, with an explanation why it was necessary to injunct that activity pending the outcome of an appeal. I am not persuaded that anything has been identified that warrants such orders. This case involves complex proceedings and disputes between the parties over very substantial sums of money. It is inappropriate for the Court to make orders preventing the administrator from addressing these complex issues as it thinks appropriate. Any prejudice to Madam Kang or Mr Tiger Brown would arise from their capacity as opposing parties to the litigation and disputes, not as beneficiaries of the estate, and it would interfere with the status quo that has existed for two and a half years. I also consider that such orders would unfairly advantage Madam Kang and Mr Tiger Brown in these underlying disputes. Indeed it would potentially allow Madam Kang to stop, or interfere with the litigation in a way the Court has also found was not appropriate. As I said in the judgment under appeal:4

These circumstances further illustrate why it is ultimately not appropriate for Madam Kang to be appointed by the Court as the administrator. These are significant proceedings and claims involving substantial sums. I am concerned that her appointment would interfere, or at least would be seen to interfere with the ability of the first family to advance their claims as they wish. A reasonable inference to that effect can be drawn from the stance taken in correspondence and in evidence. It is clearly not in the best interests of the beneficiaries of the estate as a whole for a person so personally interested in the disputes to be able to exercise the powers of administrator. To do so here would also significantly alter the balance of power currently in existence in relation to significant proceedings between the first and second families. Moreover these complicated disputes, and proceedings largely arise from events  that  have  taken  place  since  Mr  Alexander  Brown’s  will  dated  25 November 2005.

[10]   The same concerns arise in relation to any orders staying or injuncting PTL from taking steps as administrator. I do not consider that PTL should be prevented from taking action that it regards as appropriate.

[11]   For these reasons the application for a stay, or other injunctive relief, is dismissed.

[12]   I have identified the approach to costs in these proceedings in the recent costs decision.5 Applying those principles PTL is entitled to costs on a 2B basis as the party opposing the application for a stay, and notwithstanding its role to act as independent

4 At [48].

5      Kang v Perpetual Trust Ltd [2023] NZHC 2231.

administrator. The second and third defendants are also entitled to a single costs award on a 2B basis for their opposition. Given that there was no hearing of the application, the costs awarded will no doubt be more modest, and I see no reason to otherwise discount such costs.

Cooke J

Solicitors:

Martelli McKegg for the Applicant

Russell McVeagh for the First Defendant

Clark Boyce, Christchurch for the Second Defendant Anthony Harper, Auckland for the Third Defendant Morris Legal, Auckland for the Tiger Brown