Loader v Loader

[2024] NZHC 1608

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

I TE KŌTI MATUA O AOTEAROA

TE ROTORUA-NUI-A-KAHUMATAMOMOE ROHE

CIV 2023-463-85

[2024] NZHC 1608

UNDER

the Property Law Act 2007

IN THE MATTER OF

An application for an order for sale of property and division of sale proceeds among co-owners

BETWEEN

CHRISTIAN MAIKARA LOADER and HOLLAND BECKETT TRUSTEE NO.10

LIMITED as trustees of the LOADER FAMILY TRUST

First Applicants

CHRISTIAN MAIKARA LOADER
Second Applicant

SANDI CLICQUOT STEWART
Third Applicant

AND

CASEY RUTAIA LOADER

Respondent

Hearing:	18 June 2024
Appearances:	T Conder and P Symonds for the applicants No appearance for the respondent
Judgment:	18 June 2024

JUDGMENT OF CAMPBELL J

This judgment was delivered by me on 18 June 2024 at 4.30 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

LOADER and HOLLAND BECKETT TRUSTEE NO.10 v LOADER [2024] NZHC 1608 [18 June 2024]

[1]    The applicants apply for orders under the Property Law Act 2007 for the sale of a co-owned property, the division of the proceeds among the co-owners and other incidental orders. The property is essentially owned by members of a family. The applicants together own five sixths of the property. They brought this application after the respondent, who owns the other one sixth of the property and has been its sole occupant for several years, ignored their requests that the property be sold.

[2]    The respondent has not taken any steps to oppose the application. I am satisfied that I should make orders largely as sought in the application.

Background

[3]    This background summary is adopted from the applicants’ written submissions and is confirmed by the affidavits in support.

[4]    The parties are co-owners of a property at 69 Ford Street, Opotiki (the Property) as tenants in common in the following shares:

(a)The first applicants as trustees of the Loader Family Trust (the Trust) as to a one-half share;

(b)The second applicant, Christian Maikara Loader (Christian), as to a one-sixth share;

(c)The third applicant, Sandi Clicquot Stewart (Sandi), as to a one-sixth share; and

(d)The respondent, individually, as to a one-sixth share.

[5]    Wharekura Maxine Loader (Wharekura) was the mother of the respondent, Sandi and Christian. Wharekura was married to Michael Roger Loader (Michael). Michael and Wharekura purchased the Property on about 15 December 1988 as joint tenants. They granted a mortgage to the National Bank of New Zealand Ltd. The mortgage is still registered on the title, now in the name of ANZ Bank New Zealand

Ltd (as successor of the National Bank of New Zealand Ltd). There are no outstanding amounts owed under the mortgage.

[6]    On 12 January 2007, following Wharekura’s diagnosis with a terminal illness, Michael and Wharekura’s joint tenancy of the Property was transferred to each of them individually in equal shares. Wharekura passed away a few days later. Under her will, her half share of the Property was transferred to Christian, Sandi and the respondent in equal one-sixth shares.

[7]    The Trust was established by Michael on 8 July 2010 (Trust Deed). On settlement, Michael and Holland Beckett Trustee No.10 Ltd (HB Trustee) were appointed the trustees of the Trust. On 27 August 2010, Michael’s half share of the Property was transferred to the Trust.

[8]    Between 2010 and 2019, the respondent lived at the Property intermittently with Michael. The expectation among the applicants was that the respondent would contribute to living expenses and maintenance but would not otherwise contribute financially. While the respondent made small contributions sporadically to living costs and outgoings, neither Michael nor the applicants could rely on the respondent to consistently contribute to the costs.

[9]    Since 1 November 2019, the respondent has been the sole occupant of the Property. He  has  resided  at  the  Property  rent  free.  He has  not  paid  outgoings or attended to the maintenance of the Property, other than making three payments in March, June and July 2023. These payments totalled $1,955 and were a contribution towards rates and insurance.

[10]   The state of the Property has decreased considerably during the respondent’s sole occupation. What  was  once  a  neatly  kept  family  home  is  now  described by Christian as “rundown and untidy” and requiring “significant maintenance work” before it can be listed for sale.

[11]   Michael is aged 78. In recent years, Michael has suffered a series of strokes and lost mental capacity. By resolution dated 13 September 2023, HB Trustee resolved

that Michael, having lost his capacity, could no longer hold office as a trustee or as an appointer of trustees under the Trust Deed. Pursuant to cl 14.3(b) of the Trust Deed, HB Trustee resolved to appoint Christian as a new trustee of the Trust. By deed dated 13 September 2023, Michael was retired as a trustee of the Trust and Christian was appointed as replacement trustee.

[12]   Currently, Michael pays all rates, insurance and other outgoings for the Property.

[13]   The Trust, Christian and Sandi wish to sell the Property. Since July 2020, they have been requesting that the respondent consent to the Property being sold on the open market. The respondent does not have the financial means to purchase the applicants’ shares in the Property. Despite numerous requests by the Trust, Christian and Sandi, the respondent has refused to consent to the Property being sold.

Jurisdiction to order sale of co-owned property

[14]   Under s 339(1)(a) of the Property Law Act, the court may make an order for the sale of co-owned property and the division of the proceeds among the co-owners. A court making such an order may also, under s 339(4), make a further order specified in s 343. A court considering whether to make a sale order or a further order must have regard to the relevant considerations identified in s 342.

Orders should be made

[15]   I am satisfied that, subject to some minor amendments, the orders sought in the application should be made.

[16]   The primary order sought is that the Property be sold and the proceeds be divided among the parties. This order is appropriate because:

(a)The applicants together own five sixths of the Property. They want the Property to be sold.

(b)Michael, as the preferred beneficiary of the Trust, is suffering hardship from the current situation. He has been paying all outgoings yet receives no benefit from ownership. He has increasing care and medical needs and costs. He needs a release of capital from the Trust to help pay these costs. The Trust’s only asset is its half share of the Property.

(c)The applicants cannot realistically obtain any benefit from their ownership of the Property. The respondent is the only party benefiting, yet he has failed almost entirely to pay his share of the ownership costs.

(d)The respondent has failed to engage with the applicants’ repeated (and reasonable) attempts to have him engage in a sale process. The applicants have offered to assist the respondent with obtaining finance so that he can purchase the applicants’ shares in the Property. The respondent has been unwilling or unable to make such a purchase.

[17]   The further orders are also largely appropriate. I have made some amendments to the wording proposed by the applicants. I also note:

(a)The applicants seek an order that the respondent pay the costs of utilities since 1 November 2019 (the date from which the respondent has been in sole occupation). This is appropriate (subject to credit being given to the respondent for the payments he made in 2023). The applicants could have, but did not, seek an order requiring the respondent to pay a fair occupation rent for this period (see s 343(f)  of the Property Law Act). The utilities charges will be less than a fair occupation rent would have been.

(b)It is also appropriate, given the evidence of the state of the Property, to order that the respondent’s share of the sale proceeds be charged with the costs of any repairs that are needed, or devaluation that has occurred, as a result of any neglect or negligence by the respondent.

(c)The applicants will have to establish, by a further affidavit, what the utilities charges were and what were the costs of repairs or the devaluation resulting from any neglect or negligence by the respondent.

(d)The applicants seek an order that their costs of this proceeding be paid, on an indemnity basis, from the respondent’s share of the sale proceeds. I have much sympathy with the position in which the applicants found themselves. They made repeated offers and representations to the respondent. They warned him that this proceeding would follow if he did not agree to a sale or if he did not purchase their shares. He ignored them, and then took no steps to oppose the application once it was made. These circumstances do not cross the threshold for indemnity costs under r 14.6 of the High Court Rules 2016, given that the respondent’s conduct of which the applicants complain occurred before the application was made. However, the court has jurisdiction to deal with costs under s 343 of the Property Law Act.1 The costs of the application are part of the costs of selling the Property. The applicants should never have had to bring this application. The cost of this completely unnecessary application should be borne by the respondent.

Orders

[18]I make the following orders pursuant to s 339(1)(a) of the Property Law Act:

(a)An order for the immediate sale of the property located at 69 Ford Street, Opotiki, being an estate in fee simple contained in Record of Title GS1C/1240; and

(b)An order for the division of the proceeds among the applicants and respondent, as co-owners of the Property, in accordance with their respective shares as recorded on the record of title for the Property.

[19]I make the following further orders pursuant to ss 339(4) and 343 of the Act:

1      The costs regime in the High Court Rules 2016 can be overridden by Acts: r 14.1(3). And see

Calian v Cassidy [2021] NZHC 3413, (2021) 22 NZCPR 852 at [103].

(a)The respondent is to vacate the Property, and is to arrange for any people he has permitted to stay at the Property to also vacate it, by 5pm on the tenth working day after service on the respondent of an order, sealed by the court, directing that vacant possession be delivered to the applicants;

(b)Following vacation of the Property by the respondent, within the timeframe specified in paragraph 19(a) above, the applicants shall have the sole occupation of the Property to enable them to facilitate the sale of the Property;

(c)The applicants have the sole right to select a real estate agent, sign any listing agreement required to facilitate the sale of the Property and to determine the sale and marketing process for the Property including, but not limited to, fixing a minimum/reserve price on the sale of the Property;

(d)The applicants have the sole right to accept or refuse any offer to purchase the Property at their sole discretion;

(e)The Court Registrar shall, on provision of the same by the applicants, sign any sale and purchase agreement, request for discharge of mortgage, authority and instruction form, tax statement and any other documentation that would in the ordinary course be required to be signed by the respondent to facilitate the sale;

(f)The proceeds of the sale of the Property (Sale Proceeds), and any interest on the Sale Proceeds, are to be divided among the applicants and respondent, as co-owners of the Property, in accordance with their respective shares as recorded on the record of title for the Property, but subject to the orders in paragraphs 19(g)–(j) below;

(g)The expenses of, and associated with, the sale of the Property, including but not limited to real estate agent fees and legal fees, are to be deducted

from the Sale Proceeds before those Sale Proceeds are divided among the applicants and respondent;

(h)The respondent’s share of the Sale Proceeds is charged with the costs of any repairs necessary for sale, or any devaluation in the Property due to the respondent’s negligence or neglect (the quantum of the costs of any such repair and/or devaluation to be established by the applicants in a further affidavit);

(i)The respondent is to pay to Michael Roger Loader all utilities charges that Michael Roger Loader has paid in relation to the Property for the period 1 November 2019 to the date the respondent vacates the Property (less the $1,955 paid by the respondent in 2023), such amount to be established by the applicants in a further affidavit. That amount, once determined, is to be deducted from the respondent’s share of the Sale Proceeds;

(j)The respondent is to pay to the applicants their actual costs and disbursements of and incidental to this proceeding, reasonably incurred. That amount, once determined, is to be deducted from the respondent’s share of the Sale Proceeds.

Campbell J