Loader v Loader

[2023] NZHC 3492

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

[2023] NZHC 3492

UNDER

The Property Law Act 2007

IN THE MATTER OF

an application for an order for sale of property and division of proceeds of sale 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:	On the papers
Appearances:	T Conder for the Applicants
Judgment:	7 December 2023

JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR

[Application for leave under r 19.5 of the High Court Rules 2016]

This judgment was delivered by me on 7 December 2023 at 3:00pm

pursuant to Rule 11.5 of the High Court Rules

Solicitors:

…………………………. Registrar/Deputy Registrar

Holland Beckett (Tim Conder), Tauranga, for the Applicants

LOADER v LOADER [2023] NZHC 3492 [7 December 2023]

Introduction

[1]                  The first applicants, Christian Maikara Loader and Holland Beckett Trustee No.10 Limited as trustees of the Loader Family Trust, the second applicant, Christian Maikara Loader and the third applicant, Sandi Clicquot Stewart (together the Applicants) applied by without notice interlocutory application dated 18 October 2023, for an order permitting the proceeding to be commenced by originating application pursuant to r 19.5 of the High Court Rules 2016.

[2]Filed together with the interlocutory application were:

(a)the originating application dated 18 October 2023,

(b)the affidavit of Christian Maikara Loader in support of the originating application, dated 11 October 2023;

(c)affidavit of Sandi Clicquot Stewart in support of the originating application, dated 16 October 2023;

(d)memorandum of counsel dated 18 October 2023.

Background

[3]                  The proposed originating application is for orders under ss 339 and 343 of the Property Law Act 2007 (the Act) being a proceeding not specifically provided for in r 19.2. The proposed originating application relates to a property recorded in title GS1C/1240 and located at 69 Ford Street, Opotiki (the property).

[4]                  The Applicants, together with the respondent Casey Rutaia Loader, are co- owners of 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 as to a one-sixth share;

(c)the third applicant as to a one-sixth share; and

(d)the respondent as to a one-sixth share.

[5]                  The Trust was established by Michael Rodger Loader (Mr Loader) on 8 July 2023 (Trust Deed). On settlement, Mr Loader and Holland Beckett Trustee No.10 Limited (HB Trustee) were appointed the trustees of the Trust.

[6]                  Mr Loader is aged 78. In recent years Mr Loader has suffered a series of strokes and as a result he has lost mental capacity. By resolution dated 13 September 2023, HB Trustee resolved that Mr Loader, having lost his capacity, can no longer hold office as a trustee or as an appointer of trustees under the Trust Deed. By way of deed of retirement and appointment of new trustees dated 13 September 2023 Mr Loader was retired as a trustee of the Trust and the second applicant was appointed as replacement trustee.

[7]                  Currently, Mr Loader personally pays all rates, insurance, other outgoings for the property (there is no amount owing under the mortgage registered on the record of title for the property and accordingly no mortgage repayments are required).

[8]                  The respondent resides in the property without paying rent, and the Applicants wish to sell the property and have requested that the respondent consent to the property being sold on the open market. The respondent has refused and continues to refuse to consent to the property being sold. The Applicants assert the respondent does not have the financial means to purchase the Applicants’ shares in the property.

Grounds for the application

[9]                  By way of originating application, the Applicants are seeking an order for sale of the property and distribution of the proceeds of sale. The grounds on which the application for leave pursuant to r 19.5 is made are:

(a)The proposed originating application is being made on notice to the respondent. Under s 341(1)(a) of the Act, an application for an order for sale and division of the proceeds may be made by a co-owner of the relevant property.

(b)The application order for sale and division of the proceeds among co- owners, pursuant to s 339 of the Act, is a straightforward application of a statutory test and the considerations prescribed by s 342 of the Act.

(c)The relevant considerations that the Court is required to take into account in determining the proposed originating application are stipulated by s 342 of the Act, and evidence relevant to those considerations can be efficiently addressed by affidavit evidence (with the relevant documents being produced by way of exhibit).

(d)Issues to be determined between the parties as co-owners of the property are clearly defined, and the dispute between the parties does not involve wide-ranging factual issues and does not require particularised pleadings, interlocutory applications, or discovery before proceeding to a hearing.

(e)The Court will not be required to determined substantive rights and/or the application of the common law doctrine and principles.

Legal principles

[10]Rule 19.5 of the High Court Rules 2016 provides as follows:

19.5 Court may permit proceeding to be commenced by originating application

(1)The court may, in the interests of justice, permit any proceeding not mentioned in rules 19.2 to 19.4 to be commenced by originating application.

(2)The court’s permission may be sought without notice.

(3)The proposed application must be filed with an application for permission under this rule.

[11]              The originating application procedure, in contrast to standard proceedings, provides a short and streamlined civil litigation procedure.1 It is a “genuine exception” to the standard procedure and is an expedient in cases where there is, in reality, no opposing party. The procedure is not intended routinely to be used where there is another party with contrary interests.2 As well, where the proposed proceeding does not fall into one of the categories prescribed in r 19.2, the originating application procedure is strictly exceptional.3

[12]              Rule 19.5 provides that a court may, in the interests of justice, permit any proceeding not mentioned in rr 19.2 to 19.4, to be commenced by originating application. The “interests of justice” entails securing the just, speedy and inexpensive determination of the proceeding.4

[13]              A primary indicator for whether a proceeding is amenable to the originating application procedure is whether the issue or issues the subject of that proceeding are “predetermined or obvious under the relevant statute or other rule of law, or whether the issues need to be defined by an exchange of pleadings”. As well, cases where there are likely to be underlying factual disputes are often ill-suited to the originating application procedure.5

[14]              The leading authorities in relation to r 19.5 are Hong Kong and Shanghai Banking Corp Ltd v Erceg6 and Solar Bright Ltd v Martin.7 A useful statement of the Court’s approach to leave applications is the statement of Asher J:8

… the type of proceeding suited to the originating application procedure is a straightforward application, not requiring detailed pleadings or interlocutory orders for its fair resolution. Such a type of proceeding tends to be an application under a specific statutory provision, where the issue that arises can be clearly defined, and the issues confined. The procedure is not well suited to the determination of substantive rights involving the application of common law doctrines as distinct from statutory tests. It is not well suited to cases

1      Hong Kong and Shanghai Banking Corp v Erceg (2010) 20 PRNZ 652 (HC) at [20].

2      Jones v H W Broe Ltd (1989) 5 PRNZ 206 (HC) at 207; and Re Hollinshead [2020] NZHC 2119 at [11].

3      Lung v Liu [2021] NZHC 1810 at [9].

4      See young v Young [2020] NZHC 2569 at [12]; and Solar Bright Ltd v Martin [2019] NZHC 300, at [18] to [26]. This is also the overriding objective of the High Court Rules 2016: see r 1.2.

5      100 Investments Ltd v Walker [2020[ NZHC 1947 at [11].

6      Hong Kong and Shanghai Banking Corp v Erceg (2010) 20 PRNZ 652 (HC), at [25].

7      Solar Bright Ltd v Martin [2019] NZHC 300, at [18].

8 Above, n 6 at [25].

involving multiple parties, and cases where there is the possibility of cross- claims or counterclaims.

[15]Section 339 of the Act provides:

339     Court may order division of property

(1)A court may make, in respect of property owned by co-owners, an order –

(a)for the sale of the property and the division of the proceeds among the co-owners; or

…

(2)An order under subsection (1) (and any related order under subsection (4)) may be made –

(c)only on an application made and served in the manner required by or under section 341; and

(d)only after having regard  to  the  matters  specified  in section 342.

…

(4)A court making an order under subsection (1) may, in addition, make a further order specified in section 343.

[16]Section 342 of the Act provides:

342     Relevant considerations

(1)A court considering whether to make an order under section 339(1) (and any related order under section 339(4)) must have regard to the following:

(a)the extent of the share in the property of any co-owner by whom, or in respect of whose estate or interest, the application for the order is made;

(b)the nature and location of the property;

(c)the number of other co-owners and the extent of their shares;

(d)the hardship that would be caused to the applicant by the refusal of the order, in comparison with the hardship that would be caused to any other person by the making of the order;

(e)the value of any contribution made by any co-owner to the cost of improvements to, or the maintenance of, the property;

(f)any other matters the court considers relevant.

Result

[17]              I am of the view that the application for leave under r 19.5 should be granted. This is for the following reasons:

(a)the proceeding under s 339 of the Act deals with the application of the statutory test, and is therefore a narrowly-defined proceeding;

(b)the pleadings in relation to the originating application are defined and it is unlikely that there will be a need for more detailed pleadings;

(c)there will be no need to join other parties, and it is unlikely discovery orders will be necessary.

(d)the proceeding is amenable to be heard on affidavit evidence.

(e)the situation of Mr Loader, who is currently paying all rates and insurance and other outgoings on the property without receiving any benefit from it, dictates that in the interests of justice there should be a speedy and inexpensive resolution of the dispute and therefore the originating application procedure is appropriate for that reason. Proceeds from sale of the property are required for his future care.

(f)the second and third applicants, while they each own one-sixth of the property, are deriving no benefit from it. Granting this application will serve the interests of justice by ensuring an order under the Act is made as quickly and as inexpensively as possible, to the benefit of Mr Loader and the second and third applicants.

Orders

[18]              The application for leave to commence this proceeding by way of originating application under Part 19 of the High Court Rules 2016 is granted.

[19]Costs are reserved.

…………………………….. Associate Judge Taylor