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Lusty v Thorburn

Lusty v Thorburn

Case [2021] NZHC 1774 15 July 2021

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-2593

[2021] NZHC 1774

UNDER The Contract and Commercial Law Act 2017 and the Declaratory Judgments Act 1908

IN THE MATTER

of an application for specific performance

BETWEEN

AILEEN BERYL LUSTY, RONALD HUNT LUSTY and WARWICK JAMES ROLAND

BROWNE as executors of the Estate of Kenneth Richard Lusty

Plaintiffs

AND

CRAIG MAXWELL THORBURN, and

CARLY EVE THORBURN as trustees of the THORBURN TRUST

Defendants

Hearing: 2-3 November 2020

Appearances:

M J Matthew for the Plaintiffs A A H Low for the Defendants

Judgment:

15 July 2021

JUDGMENT OF POWELL J

This judgment was delivered by me on 15 July 2021 at 3.30 pm pursuant to R 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Lusty v Thorburn [2021] NZHC 1774 [15 July 2021]

[1] The plaintiffs, Aileen Lusty, Ronald Lusty and Warwick Browne, as executors of the estate of Kenneth Lusty (“the executors”), seek specific performance of a lease dated 29 March 1990 (“the lease”).

[2] The lease is in respect of land at 82 Duck Creek Road, Stillwater (“the land”). The land is located on the southern side of the Wade River (now generally referred to as the Weiti River), with the river forming the south western boundary of the Whangaparaoa Peninsula. The majority of the land is located on the river side of Duck Creek Road, but a small section lies across the road (“the detached section”).

[3] Ken Lusty (“Mr Lusty”) leased the land from Fred Thorburn (“Mr Thorburn”). At the time Mr Thorburn held the land as the sole trustee of a charitable trust established by a conveyance in 1901 (“the Thorburn trust”). There is no dispute that the lease provided for a term of 21 years with one right of renewal for a further 21 years, and was thereafter expressed to be perpetually renewable.1 By the time the initial term of the lease expired on 20 December 2010 both Mr Thorburn and Mr Lusty had passed away. Although the parties came close to registering a variation of the lease which would have had the effect of extending the original lease term to 2031, no renewal was ever signed and these proceedings were eventually issued in 2018.

[4] The executors seek an order requiring the defendants, Craig Thorburn and Carly Thorburn, as the current trustees in whom the land is vested (“the trustees”),2 to proceed to execute the renewal of the lease. In the alternative, and at the very least, the executors seek an order that the initial term of the lease has already been extended until 2031 through the variation of the lease Authority and Instruction instrument agreed in 2012 and executed as a deed, notwithstanding its subsequent rejection by the Registrar General of Land Information New Zealand on the basis that the term of the lease had expired. The executors have also applied for a range of other orders designed to avoid future disputes given…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Lusty v Thorburn

Details

AGLC: Lusty v Thorburn [2021] NZHC 1774
Case: [2021] NZHC 1774
Decision Date: 15 July 2021

CaseChat Overview and Summary

In Lusty v Thorburn, the executors of Kenneth Lusty's estate sought specific performance of a lease for land held by the Thorburn trustees, Craig and Carly Thorburn. The lease, initially signed in 1990, had a term of 21 years with a right of renewal for a further 21 years and was expressed to be perpetually renewable. The dispute arose when the lease expired in 2010, and the executors attempted to renew it, which the trustees refused, arguing that the lease breached the terms of the Thorburn trust, a charitable trust established in 1901. The executors argued that the lease should be renewed as per an agreed variation, and in the alternative, that the term of the lease had already been extended to 2031 through a deed of variation executed in 2012. Powell J held that the lease indeed breached the terms of the Thorburn trust by leasing the entire land, including the burial ground, which was intended to remain available for burials. The Court found that the lease, by its nature, effectively prevented the use of the burial ground, contrary to the charitable purpose of the trust. Despite this breach, the Court concluded that specific performance could not be granted as it would compel the trustees to breach the terms of the trust. The executors' application for specific performance was dismissed, and the trustees were awarded costs.

Orders