Millar v Meyers
[2019] NZHC 3421
•23 December 2019
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV-2018-419-192
[2019] NZHC 3421
UNDER the Property Law Act 2007 BETWEEN
AARON LESLIE MILLAR AND SHAUN NEIL MILLAR
Plaintiffs
AND
PATRICIA KAYE MEYERS AND COLLEEN MAREE MEYERS
First Defendants
MARRINERS SERVICE STATION LIMITED
Second Defendant
THOMAS JOHN MEYERS
Third Defendant
Hearing: 12 December 2019 Appearances:
R H K Jerram for Plaintiffs
No appearance for or by Defendants
Judgment:
23 December 2019
JUDGMENT OF PETERS J
This judgment was delivered by Justice Peters on 23 December 2019 at 2 pm pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar Date: ...................................
Solicitors: Jane Hunter, Thames
Counsel: R H K Jerram, Hamilton
MILLAR v MEYERS [2019] NZHC 3421 [23 December 2019]
Introduction
[1] The plaintiffs, Mr Aaron Millar and Mr Shaun Millar, and Ms Patricia Meyers and Ms Colleen Meyers, the (now first) defendants are the registered proprietors as tenants in common in equal shares of land and improvements in Puriri (“the property”).1 The property comprises 7.2766 hectares. The improvements include a dwelling, sleepout, and farm and other buildings.
Background
[2] The defendants are the children of Mr John and Mrs Colleen Meyers. At all material times prior to 2013, Mr and Mrs Meyers and the defendants owned the property as tenants in common in equal shares.
[3] Mr and Mrs Meyers each died in 2013. The plaintiffs are the grandchildren of Mr and Mrs Meyers. The plaintiffs were the executors, trustees and beneficiaries of Mr and Mrs Meyers’ estates.
[4] In 2016, the defendants applied, unsuccessfully, to the Family Court for orders pursuant to the Law Reform (Testamentary Promises) Act 1949 (“testamentary promises proceedings”). The plaintiffs were the respondents to the proceedings, in their capacity as executors.
Section 339(1) Property Law Act 2007
[5] In 2018, the plaintiffs commenced this proceeding seeking orders under s 339(1) Property Law Act 2007 (“PLA”). The defendants have not filed a statement of defence nor taken any other step in the proceeding. The matter proceeded before me by way of formal proof.2
[6]Section 339(1) PLA provides:
339 Court may order division of property
(1)A court may make, in respect of property owned by co-owners, an order—
1 As appears below, I am joining two other parties as defendants to the proceedings. References below to “the defendants” are to Ms Patricia Meyers and Ms Colleen Meyers.
2 High Court Rules 2016, r 15.9.
(a)for the sale of the property and the division of the proceeds among the co-owners; or
(b)for the division of the property in kind among the co-owners; or
(c)requiring 1 or more co-owners to purchase the share in the property of 1 or more other co-owners at a fair and reasonable price.
Discussion
[7] On the evidence before me, the defendants have refused to acknowledge the plaintiffs’ interest in the property, and have declined to discuss its future management, occupation or disposition. Indeed, they have been hostile to the plaintiffs.
[8] This present state of affairs cannot be allowed to persist, and I am satisfied it is necessary to make an order under s 339(1) PLA to effect a separation of the parties’ interests.
[9] I have affidavit evidence from Mr Geoffrey Porter, an experienced and local registered valuer. Mr Porter also gave evidence at the hearing before me. Mr Porter’s evidence is that the area of the property is well below that at which it is sub-divisible as of right. Accordingly, it is not possible to make an order for division of the property in kind.3
[10] Subject to finance, the plaintiffs’ preference is to acquire the defendants’ shares in the property at current market value. Failing that, they seek an order for the sale of the property and division of the net proceeds of sale in accordance with Court order.4
[11] Mr Porter’s evidence is that, as of 30 September 2019, the current market value of the property, including all improvements, was $439,000, including GST if any. This value is net of a discount of 25 per cent to reflect the poor state and presentation of the property. The plaintiffs wish to acquire each defendant’s share at a quarter of the current market value, ie $109,750, subject to deductions for:
(a)fair occupation rent;
3 Property Law Act 2007, s 339(1)(b).
4 Section 339(1)(a).
(b)grazing income;
(c)costs said to have been awarded to the plaintiffs in the testamentary promises proceedings; and
(d)a “utility building”.
Occupation rent
[12] The defendants have lived rent free in the dwelling on the property since 2013. Mr Porter has assessed fair occupation rent for the dwelling as follows: $200 per week for the calendar years 2014 and 2015; $210 per week for 2016; $215 per week for 2017 and 2018; and $250 per week for 2019.
[13] Pursuant to s 343(f) PLA, the plaintiffs seek an order requiring the defendants to pay a fair occupation rent from a date in 2013. I accept the plaintiffs are entitled to 50 per cent of a fair occupation rent, but I am not persuaded to require the defendants to account prior to 1 January 2014.5 I consider the defendants were entitled to that “grace” period, of slightly more than six months, in which to adjust themselves to the new ownership structure. I shall make an order to this effect.
[14] Mr Porter’s evidence is that he would have assessed a higher weekly rent had the dwelling been better presented and maintained. That may be so, but it is not a compelling reason to require the defendants to pay a higher rent.
Grazing income
[15] Mr Porter has assessed a grazing value of the land, excluding curtilage, at $740 per hectare per annum. The plaintiffs seek an order that they be compensated for this sum also.
[16] The only affidavit evidence from the plaintiffs in support of the application is from Mr Shaun Millar, sworn on 11 January 2019 and in support of the plaintiffs’ application for discovery against Marriners Service Station Ltd (“Marriners”), to which company I refer below.
5 Property Law Act 2007, s 343(f).
[17] As I understand it from Mr Shaun Millar’s affidavit, the defendants have grazed their own animals on the property rather than deriving income from a third party. I am willing to allow compensation at Mr Porter’s assessed sum and, again, from 1 January 2014. I shall make an order to this effect, also under s 343(f) PLA.
Costs and disbursements
[18] The plaintiffs also seek to deduct costs and disbursements of $48,535.20, which they advise the Family Court awarded against the defendants in the testamentary promises proceedings. The evidence as to this proposed deduction is wholly inadequate.
[19] First, the information before me discloses the defendants were legally aided in the testamentary promises proceedings. An award of costs against a legally aided litigant is never entirely straightforward. Accordingly, the terms of the Court order may be relevant. I have not been provided with a copy.
[20] Secondly, I do not know whether the order for costs was in favour of the plaintiffs as executors or in their capacity as beneficiaries. The plaintiffs were sued as executors but they bring this proceeding as co-owners or, essentially, as beneficiaries.
[21] Thirdly, Mr Aaron Millar has a charging order registered against the land. A copy of the charging order was one of a bundle of 20 documents Mr Shaun Millar produced, without any explanation, in evidence at the hearing before me. I assume the charging order is in respect of the costs and disbursements ordered in the testamentary promises proceedings. If so, there is no explanation of why the charging order is in the name of one plaintiff only.
[22] If the plaintiffs wish to pursue a deduction for costs and disbursements, they should file and serve a joint affidavit, putting all relevant information and documents before the Court. At present, the evidence is insufficient.
Marriners Service Station Ltd and Mr Thomas Meyers
[23] There are two further matters to be addressed. The first is that, on or about 13 March 2017, the defendants mortgaged their shares in the property to Marriners.
The mortgage was registered against the title on 13 March 2017, as instrument 10728036.1. The defendants’ brother, Mr Thomas Meyers, and his wife or partner, Ms Lorraine Corbett, own the shares in Marriners and Mr Meyers is the sole director of the company.6
[24] As I understand his submissions, Mr Jerram, counsel for the plaintiffs, seeks an order that Marriners be required to discharge its mortgage. I think he submits that I should do so without any enquiry or further enquiry being made as to the sum due to Marriners.
[25] I decline to make such an order at present. Again, the plaintiffs’ evidence on this point is inadequate. There are several documents in the bundle to which I have already referred which seem to be relevant to what Marriners contends is the sum owing under the mortgage. However, none of it is explained in evidence. Nor do counsel’s submissions shed much light on the matter and, in any event, submissions are not evidence.
[26] Given that, in the first instance the plaintiffs should include, in the joint affidavit referred to above, a comprehensive explanation, and ideally chronologically arranged, of what the plaintiffs know regarding the mortgage in favour of Marriners and how they come to know it, attaching all relevant documents.
[27] Secondly, there is evidence before me to the effect Mr Meyers previously brought what is described as a “utility” building onto the property several years ago, for the benefit of the defendants but without the consent of the grandparents. Mr Jerram does not know whether the building is a fixture, in which case it runs with the land, or a chattel, in which case it does not. There is no photo of the building in evidence. Regardless, Mr Jerram proposes I allow a deduction of $4,700 from Mr Porter’s assessed current market on account of the building.
[28] I do not know how the plaintiffs have arrived at that sum. Nor is there any evidence from Mr Porter as to the current market value of the property in the absence of the building. Accordingly, I decline to make any orders in relation to the utility
6 This proceeding was served on Marriners Service Station Ltd on 9 April 2019.
building or to allow any adjustment to the purchase price. If the building is a fixture, it will be lost to Mr Meyers. If it is a chattel, Mr Meyers should make arrangements to remove it if he wishes to do so. The purchase price will be unchanged either way.
[29] Given these two matters, I consider it best to join Marriners and Mr Meyers as parties to this proceeding. I do so pursuant to r 4.56, High Court Rules 2016, on the grounds their presence may be necessary to resolve all matters before the Court.
Orders
[30] The orders below are those I am able to make at present. It is possible I shall make additional orders in respect of the matters to be addressed in the further affidavit evidence to be filed and served.
[31] The plaintiffs sought an order that they be granted access to the property on at least twice occasions prior to settlement, to inspect and with or without a valuer. I do not propose to make this order. As registered proprietors, the plaintiffs are entitled to go onto and pass over the property, with or without invitees, as they wish.
[32] Lastly, Ms Hunter is the solicitor on the record for the plaintiffs. It would assist the Court if she would liaise with Mr Jerram regarding the further evidence to be filed so the matter can be progressed expeditiously. If Ms Hunter is no longer Mr Jerram’s instructing solicitor, as Mr Jerram thought may be the position, then what I have just said applies to the new solicitor, and the necessary documents to effect the change of representation must also be filed and served in accordance with the High Court Rules.
Result
[33]I make orders:
(a)pursuant to r 4.56, High Court Rules 2016, I join Marriners Service Station Ltd and Mr Thomas John Meyers as second and third defendants respectively;
(b)subject to the following requiring the plaintiffs or nominee(s) to purchase the shares of the first defendants in the property at a price of
$109,875 per share, alternatively that the property be sold, whether by auction or private treaty, with the net proceeds of sale to be divided equally between the plaintiffs and first defendants;
(c)the first defendants are to compensate the plaintiffs for fair occupation rent in respect of the dwelling on the property from 1 January 2014 to the date of payment at the rate of $200 per week for the calendar years of 2014 and 2015; $210 per week for 2016; $215 per week for 2017 and 2018; and $250 per week for 2019 and thereafter;
(d)the first defendants are to compensate the plaintiffs for grazing income from 1 January 2014 to the date of payment at the rate of $740 per hectare per annum;
(e)further directions and/or orders will follow after receipt of the plaintiffs’ further affidavit evidence referred to above;
(f)a copy of this judgment is to be served on all defendants; and
(g)I reserve leave to apply.
[34] Having succeeded, the plaintiffs are entitled to costs and disbursements against the first defendants, to be fixed by the Registrar.
Peters J
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