McLaughlin v McLaughlin

[2023] NZHC 1809

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

I TE KŌTI MATUA O AOTEAROA

TE ROTORUA-NUI-A-KAHUMATAMOMOE ROHE

CIV-2022-463-84

[2023] NZHC 1809

BETWEEN

JUDITH MARIE McLAUGHLIN

and
VICTOR JAMES McLAUGHLIN
Plaintiffs

AND

ANDREW GORDON McLAUGHLIN

Defendant

Hearing:

22 June 2023

Appearances:

Murray McKechnie for the Plaintiffs No appearance for the Defendant

Fraser Wood / Ms Sheely for the litigation guardian

Judgment:

12 July 2023

JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR

[Application for summary judgment]

This judgment was delivered by me on 12 July 2023 at 3:00pm

pursuant to Rule 11.5 of the High Court Rules

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

Solicitors:

Le Pine & Co (Louie Foley), Taupo, for the Plaintiffs

Tompkins Wake (Fraser Wood), Rotorua, for the Litigation Guardian

Counsel:

Murray McKechnie, Barrister, Rotorua, for the Plaintiffs

McLAUGHLIN v McLAUGHLIN [2023] NZHC 1809 [12 July 2023]

Introduction

[1]    Ms Judith McLaughlin (Judith) and Mr Victor McLaughlin (Victor) seek summary judgment against their son and brother respectively, Mr Andrew McLaughlin (Andrew).1

Background

[2]    Judith, Victor, and Andrew are co-owners of a farm at 42 Brett Road, RD 3, Rotorua (the farm).

[3]    Following the death of Judith’s husband and the ensuing High Court litigation, Judith, Victor and Andrew now own the farm in four-eighths, three-eighths and one- eighth shares respectively. Both Victor and Andrews shares are held in separate trusts (the Andrew McLaughlin Family Trust and the JM McLaughlin Family Trust) in which Judith and the corresponding son are trustees.

[4]    Judith and Victor both wish to sell the farm and issued Andrew with notice of that intention by documents served on him by Mr Terry Reardon (Mr Reardon) on 25 January 2022. Andrew has refused to engage on and agree to the sale. Given Andrew’s lack of engagement in the proceeding and on the evidence presented in respect of his mental condition and his behaviour, on 19 October 2022 the Court appointed Mr Fraser Wood (Mr Wood) his litigation guardian.2

[5]    In a memorandum, Mr Wood has set out extensive efforts to contact Andrew about these proceedings and despite hearing from a close friend of Andrew’s, who confirmed that he had received all incoming communications, he has not responded to

1      For convenience and clarity, and meaning no disrespect, given the commonality of names, I will generally refer to each family member by their given name.

2      McLaughlin v McLaughlin HC Rotorua CIV-2022-463-84, 19 October 2022 (Minute of Associate Judge Taylor).

those efforts.3 On this basis, no opposition has been received to the application and it is to proceed unopposed.

Judith and Victor’s application for summary judgment

[6]Judith and Victor seek orders:4

(a)     The removal of Andrew Gordon McLaughlin as a trustee of the trust of 4th October 2010 referred to in the Statement of Claim.

(b)     The sale of the Farm at 42 Brett Road, RD 3, Rotorua;

(c)     Orders as to the distribution of the sale proceeds as set out in the Statement of Claim; and

(d)     Orders as to costs.

[7]The grounds on which the orders are sought are:5

(a)The Plaintiffs and the Defendant are the registered proprietors of land located at 42 Brett Road, RD 3, Rotorua being the land described in Certificate of Title SA27A/843 (South Auckland Registry) being 67.8607 hectares more or less being Section 9 Block IV, Paeroa Survey District (the Farm).

(b)The Plaintiffs wish to sell the Farm;

(c)The Defendant will not agree to the sale of the Farm;

(d)The first-named Plaintiff is paying all outgoings on the Farm and is unable to continue to maintain the Farm long-term;

(e)The Defendant has no arguable defence to the claim; and

(f)Upon the further grounds set out in the affidavits of Judith Marie McLaughlin, Victor James McLaughlin and Terry John Reardon in support of this application.

(g)This application is made in reliance upon section 339 of the Property Law Act 2007.

3      Memorandum of litigation guardian updating the court dated 3 February 2023.

4 Interlocutory application for summary judgment dated 25 August 2022 at [1].

5 At [2].

Affidavit of Judith Marie McLaughlin dated 25 August 2022

[8]    Judith has made an affidavit in support of the application for summary judgment.6 She deposes the history around the farm’s ownership and how it came to be owned in the current ownership structure in which Andrew, who opposes sale, owns one-eighth share in a trust with him and her as trustees.

[9]    Judith further says that her and her partner live and work on the farm alongside Andrew. She wishes to sell the farm as the work is becoming too onerous and her relationship with Andrew has broken down. She deposes he has been verbally and physically abusive, which in her view stems from significant mental health issues.

[10]   Judith notes that her other son, Victor, supports the sale and that Mr Reardon gave notice of her and Victor’s intention to sell to Andrew on 25 January 2022.

Affidavit of Victor James McLaughlin dated 25 August 2022

[11]   Victor has made an affidavit in support of the application for summary judgment.7 He agrees with the contents of Judith’s affidavit and further supports the application for summary judgment so that the farm can be sold, and Judith and her partner can retire.

Affidavit of Terry John Reardon dated 8 April 2022

[12]   Mr Reardon, a private investigator and process server, has made an affidavit outlining his service of the documents setting out Judith and Victor’s intention to sell the farm to Andrew on 25 January 2022.8 Mr Reardon slipped the letter, a copy of the farm’s certificate of title and a copy of s 339 of the Property Law Act 2007 under the closed door to Andrew, who was stood on the other side.

6      Affidavit of Judith Marie McLaughlin in support of an interlocutory application for summary dated 25 August 2022.

7      Affidavit of Victor James McLaughlin in support of an interlocutory application for summary judgment dated 25 August 2022.

8      Affidavit of service of Terry John Reardon dated 8 April 2022.

Amendment of orders sought

[13]   At the hearing, counsel for Judith and Victor amended the orders sought by withdrawing the order sought that Andrew be removed as a trustee of the trust established for his benefit by trust deed dated 4 October 2010. Accordingly, the issue of removal of Andrew as a trustee of his trust is not dealt with further in this judgment.

Legal principles

[14]Rule 12.2(1) of the High Court Rules 2016 provides:

12.2 Judgment when there is no defence or when no cause of action can succeed

(1)The court may give judgment against a defendant if the plaintiff  satisfies the court that the defendant has no defence to a cause of action in the statement of claim or to a particular part of any such cause of action.

[15]   The relevant principles governing a summary judgment application are well established:9

The principles are well settled. The question on a summary judgment application is whether the defendant has no defence to the claim; that is, that there is no real question to be tried: Pemberton v Chappell. The Court must be left without any real doubt or uncertainty. The onus is on the plaintiff, but where its evidence is sufficient to show there is no defence, the defendant will have to respond if the application is to be defeated: MacLean v Stewart. The Court will not normally resolve material conflicts of evidence or assess the credibility of deponents. But it need not accept uncritically evidence that is inherently lacking in credibility, as for example where the evidence is inconsistent with undisputed contemporary documents or other statements by the same deponent or is inherently improbable: Eng Mee Yong v Letchumanan. In the end the Court’s assessment of the evidence is a matter of judgment. The Court may take a robust and realistic approach where the facts warrant it: Bilbie Dymock Corp Ltd v Patel.

[citations removed]

9      Krukziener v Hanover Finance Ltd [2008] NZCA 187, [2010] NZAR 307 at [26] (citations omitted).

[16]The wording of r 12.2 “may give judgment” indicates a residual discretion.

Having regard to the various authorities, the position appears to be as follows:10

(a)The discretion implied by the use of the word “may” is to be restrictively applied. In a great majority of cases, once the court is satisfied the defendant has no defence, there is no room for the exercise of discretion.

(b)The residual discretion may be invoked to avoid oppression or injustice to the defendant where:

(i)The proceeding involves the actions or possible liability of a third party which is not before the court;

(ii)The proceedings are such that the opportunity should be given to allow discovery or other interlocutory applications to be concluded;

(iii)The circumstances of the case disclose very unusual features, the presence of which leads the court to conclude that the entry of summary judgment would be oppressive or unjust; or

(iv)The combination of complex issues of fact and law justify the dismissal of the application for summary judgment, either as a matter of discretion or because the court cannot be satisfied that the defendant has no defence.

(c)Even where the court is not satisfied that a defence has been made out, in exceptional circumstances the application may be adjourned to allow for other processes to be followed.

Analysis

[17]   The application for summary judgment is unopposed. Mr McKechnie submits that while the onus is on the plaintiffs in seeking summary judgment, in opposition the defendant needs to provide some evidential foundation for any defences that are raised. In the present instance, Andrew has taken no steps.

[18]   Mr Wood, the litigation guardian, has not raised any possible defence that Andrew could advance. As the Court has been advised by Mr Wood, Andrew has taken no steps in relation to the proceedings.

10     Andrew Beck and others (eds) McGechan on Procedure (online ed, Thomson Reuters) at [HR12.2.11].

[19]   With reference to satisfying the relevant considerations set out in s 342 of the Property Law Act 2007, Mr McKechnie submits as follows:

(a)Andrew, by way of his trust, holds a small beneficial interest in the farm property.

(b)The nature and location of the farm property is relevant inasmuch as Judith has legitimate reasons for wanting to sell as she seeks retirement. As related in the affidavits filed, Andrew makes no meaningful contribution to the operation of the farm property.

(c)Andrew is the only other co-owner of the farm property.

(d)There will be ongoing hardship for Judith if the farm is not sold. The Court has been advised there is an interested purchaser.

(e)The issue of contributions by Andrew as co-owner has no relevance in this case.

Result

[20]   In consideration of the deposed evidence of Judith and Victor, the report to the Court from Mr Wood as litigation guardian for Andrew, and in consideration of the factors the Court is required to consider under s 342 of the Property Law Act  2007,  I am satisfied that the orders sought should be made.

Orders

[21]I make the following orders:

(a)Pursuant to s 339 of the Property Law Act 2007, an order for the sale of the farm property at 42 Brett Road, RD3, Rotorua, being certificate of title SA274/843 (South Auckland Registry), being 67.8607 hectares more or less being section 9 Block IV Paeroa survey district. The sale of the farm to be subject to the usual terms and conditions of sale or

otherwise such terms or conditions as approved by the Court at a price not less than an up-to-date registered valuation which is to be presented to the Court before sale.

(b)Judith and Victor are authorised to sign all documents in relation to the sale of the farm, including a memorandum of transfer and authority and instruction forms on behalf of Andrew.

(c)The reasonable costs of the sale being real estate commission and legal costs shall be deducted from the proceeds of sale.

(d)The balance of the proceeds of sale shall be divided between the co- owners according to their ownership shares.

(e)The costs of and incidental to these proceedings are to be deducted from the share paid to the trust which is for the benefit of Andrew and of which Judith and Andrew are the trustees, such costs to be fixed by the Registrar.

(f)The costs of the litigation guardian appointed for Andrew are to be met from the proceeds of sale, pursuant to r 4.45 of the High Court Rules and by reference to the minute of Associate Judge Taylor dated the 19th of October 2022.

…………………………….. Associate Judge Taylor