McKenzie v McKenzie

[2019] NZHC 2983

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2014-409-884

[2019] NZHC 2983

BETWEEN

MARGARET PEARL McKENZIE

Plaintiff

AND

DEAN ALLAN McKENZIE as trustee of the ALISTER McKENZIE FAMILY TRUST

First Defendant

AND

BARRY DOUGLAS McKENZIE as trustee of the ALISTER McKENZIE FAMILY

TRUST
Second Defendant

AND

MARGARET PEARL McKENZIE as

trustee of the ALISTER McKENZIE FAMILY TRUST

Third Defendant

Hearing:

11 November 2019 (Judicial Settlement Conference)

Counsel:

D J Pine for Plaintiff

A D Marsh for First and Second Defendants

M P McKenzie (self-represented Third Defendant) J Smith as Litigation Guardian for Julie McKenzie

Judgment:

18 November 2019

JUDGMENT OF ASSOCIATE JUDGE LESTER

This judgment was delivered by me on 18 November 2019 at 10:00am pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar 18 November 2019

McKENZIE v McKENZIE [2019] NZHC 2983 [18 November 2019]

[1]    This judgment follows the parties reaching a settlement at a judicial settlement conference chaired by me. The parties expressly consented to me including in this judgment matters that were referred to in the judicial settlement conference.

[2]    The orders that are made are those recorded in a consent memorandum dated 11 November 2019 and I make orders in terms of paragraphs 1(a) to (j).

[3]    In relation to order 1(e), that is the possible need for the parties to seek a vesting order, I record that such an order may be sought by way of memorandum with a request to the Registrar that the file and the memorandum be referred to me.

[4]    This proceeding has been on foot for a long time. While the parties have come close to resolution in the past, unfortunately finality proved elusive.

[5]    Margaret McKenzie is the mother of the first and second defendants, Dean Allan McKenzie and Barry Douglas McKenzie and also the mother of Julie Margaret Jane McKenzie. Julie has some intellectual impairment. While there was some disagreement between the parties as to the extent of Julie’s impairment, from the outset Barry, who attended the judicial settlement conference on behalf of both defendants, was adamant that he and his brother, Dean, saw Julie’s interests as being paramount. Not surprisingly, that represented Margaret’s view as well.

[6]    Julie was a party directed to be served and for whom a litigation guardian was appointed. I infer that as the litigation guardian has taken no active steps that she too had confidence that the parties were focused on Julie’s interests.

[7]    In all the circumstances, the settlement reached made practical and pragmatic sense. Despite the proceeding being underway for some time, it is still some way off being set down for a hearing. The reality is that if all matters in dispute were to go to a hearing, a hearing of three or four days would not be available until the end of 2020.

[8]    The present reality is that the house owned by the Alister McKenzie Family Trust (“the Trust”) and occupied by Margaret and Julie, is no longer suitable for

Margaret to live in. It is a large two-storey home which also brings with it maintenance issues.

[9]    The agreed way forward involves some uncertainty that could not have been avoided given the number of unknowns, including what the Trust property will sell for and the financial viability and sustainability of acquiring a licence to occupy.

[10]   The costs of the litigation were also unsustainable, not to mention the consequences of the litigation on family relationships.

[11]   Under s 20(1)(g) of the Senior Courts Act 2016 (“the Act”), an Associate Judge can make orders by consent.

[12]   I am satisfied that the orders are appropriate and reflect the tenor and substance of the discussion at the judicial settlement conference that led to resolution.

[13]Accordingly, there are orders as follows:

(1)The parties are agreed that the interests of Julie Margaret Jane McKenzie are to be given primary consideration by the trustees at all times. With that in mind the parties are agreed that the following order can be made by consent:

(a)The plaintiff and first defendant will resign as trustees and the Alister McKenzie Family Trust (“the Trust”) will be resettled onto a new Trust with an updated Trust Deed (“New Trust”). That resettlement shall be undertaken by Rhodes & Co whose reasonable legal costs shall be met by the New Trust from the net sale proceeds of the Trust property at 94 Office Rd, Merivale, Christchurch (“Office Rd Property”).

(b)The trustees of the New Trust will be the second defendant and Jonathan Smith.

(c)In the event a resettlement is not possible then the parties agree that the assets of the trust will be distributed to the New Trust.

(d)The plaintiff shall be an Advisory Trustee of the New Trust.

(e)The parties agree that the Court may make vesting orders by consent of the parties to transfer title in the Office Rd Property from the plaintiff and the first defendant to the trustees of the New Trust.

(f)The Office Rd Property will be brought up to a marketable standard and sold. Any costs reasonably incurred in relation to that sale process and bringing the property up to a marketable standard will be met by the first defendant and will be reimbursed to the first defendant from the net proceeds of sale of the Office Rd Property.

(g)Subject to the operation of this clause, the plaintiff will be reimbursed the total sum of $80,000.00 to cover expenses incurred on behalf of the Trust and legal fees, the first defendant will be reimbursed $30,000.00 to cover legal fees, and Rhodes & Co will be reimbursed $15,000.00 to cover legal fees (together: “Compensation funds”). The Compensation Funds are based on the sale of the Office Rd Property for a purchase price of $1,000,000.00 to be adjusted on a pro rata basis in the event that the purchase price is less than $1,000,000.00. The Compensation funds are inclusive of GST (if any).

(h)Following the sale of the Office Rd Property, a suitable alternative property will be purchased by the trustees of the New Trust (or other arrangements agreed upon by the said trustees) for the plaintiff and Julie to reside in. Subject to clause 1(i) below, that  suitable  alternative  property  will  be  either a Nazareth House Unit subject to an occupation rights

agreement, or failing that, a suitable alternative accommodation for Julie and the plaintiff.

(i)Jonathan Smith shall fully research the possibility of the Nazareth House Unit, including potential purchase costs, ongoing fees, and what is to occur in the event of the plaintiff or Julie requiring more dedicated or ongoing supported care. Jonathan Smith shall then make a recommendation to the second defendant about that possible purchase. The second defendant agrees to be guided by that recommendation but shall be entitled to make his own decision on that possible purchase, subject to fully and fairly considering Jonathan Smith’s recommendation and, at all times, acting as a fair and reasonable trustee.

(j)In the event that the trustees of the New Trust do not agree upon the purchase of a Nazareth House Unit then the trustees shall use all reasonable endeavours (taking into account the Advisory Trustee’s advice) to purchase suitable alternative accommodation for Julie and the plaintiff in the names of the said trustees (or other arrangements agreed upon by the said trustees).

[14]   Leave is reserved to apply if issues arise. As agreed, there is no order as to costs.

Associate Judge Lester

Solicitors:
Saunders Robinson Brown, Christchurch

Copy to counsel: Andrew Marsh, Barrister, Christchurch