Leigh-Mackenzie v Pascoe

[2015] NZHC 2547

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV-2014-419-000338 [2015] NZHC 2547

BETWEEN

JENNIFER AGNES LEIGH-

MACKENZIE Plaintiff

AND

ROBERT WAYNE PASCOE AND MICHAEL JOHN DORSET Defendants

CIV-2014-419-000337

BETWEEN  JENNIFER AGNES LEIGH- MACKENZIE

Plaintiff

ANDDAVID ANDREW MCLEAN AND MICHAEL JOHN DORSET Defendants

CIV-2013-419-000941

BETWEEN  DAVID ANDREW MCLEAN Plaintiff

ANDROBERT WAYNE PASCOE AND MICHAEL JOHN DORSET

First Defendants

BEATTIE RICKMAN TRUSTEE COMPANY LTD, JRF TRUSTEE COMPANY LIMITED AND ELEANOR JEAN GUMMER

Second Defendants

CIV-2015-419-000034

BETWEEN  JENNIFER AGNES LEIGH- MACKENZIE

Plaintiff

LEIGH-MACKENZIE v PASCOE & ANOR [2015] NZHC 2547 [16 October 2015]

ANDBEATTIE RICKMAN TRUSTEE COMPANY LTD, JRF TRUSTEE COMPANY LIMITED AND ELEANOR JEAN GUMMER

Defendants

Hearing:	14 October 2015
Appearances:	Anthony Grant for David McLean Elliot Hudson for the executors and counsel for the Trustees Kevin Casey for Jennifer Leigh-Mackenzie Paul Collins for the minor beneficiaries
Judgment:	16 October 2015

JUDGMENT OF MOORE J

This judgment was delivered by me on 16 October 2015 at 12:00pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar

Date:

Introduction

[1]      There are four proceedings which concern the affairs of the late Ian McLean (“Mr McLean”) who died on 9 August 2012.   Mr McLean and Beverley McLean married on  27 January 1963.   They had one child, David, who has  two infant children.

[2]      Beverley McLean died on 6 December 1990.  It seems that her marriage to Mr McLean was not without its difficulties and this is reflected in her testamentary dispositions.    In  her  final  will  she  left  various  property  interests  to  her  son David McLean rather than to her husband.

[3]      The property interests which David McLean inherited from his mother were:

(a)       a half interest in what would have been the family home at 10 Shaw

Place, Tauranga; and

(b)      a half interest in two commercial properties at 275 and 293 Cameron

Road, Tauranga.

[4]      After Beverley McLean died Mr McLean formed a relationship with Jennifer Leigh-Mackenzie.   They lived together at 10 Shaw Place for some 19 years until Mr McLean died.

[5]      Shortly before his death, Mr McLean re-ordered his affairs and arranged for the following assets to be transferred into a new trust which he formed, the Andy and Agnus Trust (“AAT”):

(a)       his half interest in 10 Shaw Place, Tauranga

(b)his half interest in the properties at 275  and 293 Cameron Road, Tauranga; and

(c)       his  100  per  cent  interest  in  a  third  commercial  property  at  305

Cameron Road, Tauranga.

[6]      Ms Leigh-Mackenzie was a discretionary beneficiary.  She was not, however, a   final   beneficiary   of  AAT.      The   only   final   beneficiaries   of  AAT   were David McLean’s infant children.  David McLean is not a beneficiary of AAT.

[7]      The transfers of these interests into AAT meant that Mr McLean’s estate owned no property of significance.  Ms Leigh-Mackenzie was left only with some chattels and a benefit as a discretionary beneficiary of AAT.

[8]      When Mr McLean learned after his wife’s death that she had left her interest in the properties to David McLean, the latter claims that his father became angry and tried to persuade David McLean to make the assets available to him.

[9]      David McLean’s evidence is that his father made numerous representations to him that if he allowed his father to have free access of the family home and all income from the commercial properties, his father would leave his interests in the properties to David McLean and as a result would end up owning 100 per cent of Shaw Place and the commercial properties.

[10]    David McLean finally capitulated to his father’s requests.   Under these arrangements Mr McLean received all the rents from the commercial properties for approximately 21 years.   Using these funds he was able to spend several months every year for many years travelling on holidays and living overseas.

[11]     When Mr McLean died in 2012 he left his son a few items of no particular value.   More significantly, David McLean discovered that in breach of the oral agreement he made with his father, his father had put the commercial properties and the half interest in 10 Shaw Place into AAT of which David was not a beneficiary, although his infant children were both final beneficiaries.

[12]     These events lead to the filing of the four separate sets of related proceedings which are now before the Court. These are:

(a)       a claim by Ms Leigh-Mackenzie against Mr McLean’s estate under

the Family Protection Act 1955 (CIV-2014-419-000338);

(b)      a claim by Ms Leigh-Mackenzie against Mr McLean’s estate under

the Property (Relationships) Act 1976 (CIV-2014-419-000337);

(c)      a claim by David McLean against the executors of his father’s estate and trustees of AAT seeking orders for various assets to be transferred to him pursuant to a claim in proprietary estoppel, constructive trust, testamentary promises and inadequate provision under the Family Protection Act 1955 (CIV-2013-419-000941); and

(d)claims by Ms  Leigh-Mackenzie that  the trustees of AAT acted in breach of the provisions of the deed in not making distributions.  She sought an order that they should either make distributions to her or be removed and replaced (CIV-2015-419-000034).

[13]     The litigation started in 2013.  The parties have spent a considerable amount of time and money on it.

[14]   The parties have now decided to resolve their differences and in the circumstances asks that the Court make certain orders.  I have reviewed the orders and the full and very helpful joint memorandum of counsel.  I am satisfied they are appropriate for the reasons set out in the joint memorandum.

[15]     I  have  also  received  a  helpful  memorandum  from  Mr  Collins,  counsel appointed to represent the interests of the minor beneficiaries.  He has indicated that the terms of the settlement are considered to be appropriate taking into account the present status and interests of the children in AAT and the material risk that those interests  would  be  adversely  affected  in  the  event  of  protracted  and  finally adjudicated litigation in the full sets of proceedings.

[16]     In the circumstances I am prepared to make and do make the following orders:

(a)       Pursuant to s 33(c) of the Property (Relationships) Act the following items of property are hereby vested in Ms Leigh-McKenzie:

(i)all the household chattels that were in the house at 10 Shaw Place, Tauranga at the time of the late Mr McLean’s death and which were owned by Ms  Leigh-McKenzie and/or the late Mr McLean, with the exception of the chattels that the late Mr McLean bequeathed in his final will to David McLean;

(ii)      the items of pottery that are collectively referred to by the

parties as “The Mooncroft Collection”;

(iii)the 50 per cent interest  in the property at 10  Shaw Place, Tauranga, that is currently held by Robert Wayne Pascoe and Michael John Dorset;

(iv)     the following vehicles:

(1)      a 2007 Holden Commodore; and

(2)      a Toyota Corolla;

(v)the license to occupy Unit 4, Akira Place, Waitahanui which is shared as to 50 per cent with I R & H J McAlley;

(vi)the proceeds of sale of the boat owned by the late Mr McLean, namely $37,000;

(vii)     the sum of $4,280.92 in reimbursement of monies spent by

Ms Leigh-McKenzie on the upkeep of the home and vehicles;

(viii)    the sum of $23,700 that was transferred to AAT by the late

Mr McLean without Ms Leigh-McKenzie’s consent.

(b)Pursuant to David McLean’s claims of proprietary estoppel and constructive trust against Beattie Rickman Trustee Company Ltd, JRF Trustee Company Ltd and Eleanor Jean Gummer, being the trustees of ATT, the trustees are hereby directed pursuant to s 64 of the Trustee Act 1955 to make the following transfers of property:

(i)       the 50 per cent interest that they own in the property at 275

Cameron Road, Tauranga is to be transferred to the trustees of the McLean Family Trust;

(ii)      the 50 per cent interest that they own in the property at 293

Cameron Road, Tauranga is to be transferred to the trustees of the McLean Family Trust;

(iii)the property that they own at 305 Cameron Road is to be transferred to David McLean or to a nominee of his choice;

(iv)     all of the financial assets that they own after paying:

(1)the remaining reasonable expenses of themselves and their counsel; and

(2)      the remaining liabilities of AAT;

(3)the sums of $350,000, $23,700, $37,000 and $4,280.92 to Ms Leigh-McKenzie,

are to be transferred to David McLean or to a nominee of his choice.

(c)      Pursuant to David McLean’s claims of proprietary estoppel and constructive trust against the executors, they are to transfer to him all of the financial assets of the estate after paying:

(i)the  remaining  reasonable  expenses  of  themselves  and  their counsel; and

(ii)      the remaining liabilities of the estate.

[17]     Leave is given to counsel to seek to apply for such further or other orders as may be necessary to give effect to this judgment and the consent orders contained in

it.

Moore J

Solicitors:

Mr Grant, Auckland

Mr Hudson, Hamilton
Cooney Lees Morgan, Tauranga

Mr Collins, Lower Hutt