Mortenson v Tui

[2019] NZHC 338

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-14

[2019] NZHC 338

UNDER

the Property Law Act 2007

IN THE MATTER

of an application for an order for sale under s 339

BETWEEN

PENEUILA MORTENSON

Applicant

AND

HENRY TUI as executor of the will of NAUMALILA LEOTA aka PEPE NAUMALILA TUI

Respondent

Hearing:	On the papers
Counsel:	SC Munro for applicant SI Perese for respondent
Judgment:	5 March 2019

JUDGMENT OF FITZGERALD J

This judgment was delivered by me on 5 March 2019 at 4 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:           Galbraiths Lawyers, Auckland

Saseve Solicitors, Auckland (T Saseve)

Mortenson v Tui as executor of the will of Naumalila Leota [2019] NZHC 338 [5 March 2019]

[1]                 The applicant, Ms Mortenson, applies by originating application for an order under s 339 of the Property Law Act 2007 (Act) for the sale of a property and distribution of the proceeds of sale.

[2]                 On 9 January 2019, Lang J ordered the proceedings could commence by way of originating application. On 15 February 2019, the parties filed a joint memorandum advising the orders sought could be made by consent.

Background

[3]                 This summary is drawn from Ms Mortenson’s affidavit sworn in support of her application.

[4]                 The property in question, 6 Bettina Place, Manurewa (Property), was purchased by Ms Mortenson’s parents in 1988. Her father later passed away, and the Property transferred to her mother by survivorship.

[5]                 In 2009, Ms Mortenson and her husband purchased 70 percent of the Property from Ms Mortenson’s mother, to assist Ms Mortenson’s mother with her living costs and to enable her to split her time between New Zealand and Samoa.

[6]                 In May 2017, Ms Mortenson’s mother passed away. Ms Mortenson’s brother, Mr Tui (the respondent) was named executor of his mother’s will.

[7]                 Mr Tui and Ms Mortenson had differences of opinion as to what to do with the Property. Ms Mortenson says Mr Tui moved into the Property and said it was “his” as eldest son. Eventually, an arrangement was reached where Mr Tui moved out and the Property was rented out.

[8]                 Ms Mortenson’s husband passed away in April 2018, leaving her the sole owner of the 70 percent share by survivorship. She now wishes for the Property to be sold and 70 percent of the proceeds be distributed to her. She advises that her and Mr Tui have been unable to agree whether the Property should be sold and that Mr Tui has failed to engage with her in this regard.

The law

[9]Ms Mortenson applies for an order under s 339 of the Act, which provides that:

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

(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.

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

(a)despite anything to the contrary in the Land Transfer Act 2017; but

(b)only if it does not contravene section 340(1); and

(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.

(3)Before determining whether to make an order under this section, the court may order the property to be valued and may direct how the cost of the valuation is to be borne.

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

(5)Unless the court orders otherwise, every co-owner of the property (whether a party to the proceeding or not) is bound by an order under subsection (1) (and by any related order under subsection (4)).

(6)An order under subsection (1)(b) (and any related order under subsection (4)) may be registered as an instrument under—

(a)the Land Transfer Act 2017; or

(b)the Deeds Registration Act 1908; or

(c)the Crown Minerals Act 1991.

[10]The relevant matters the Court must have regard to under s 342 are:

(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.

Orders sought

[11]              Before this matter proceeded to a hearing, the parties (by their respective counsel) filed a joint memorandum recording their agreement that the following orders should be made by consent:

(a)That under section 339 of the Act, the Property situated at 6 Bettina Place, Manurewa, Auckland, Record of Title NZ15D/1227, be sold.

(b)That the Registrar of the High Court at Auckland be authorised to sign a real estate agency listing contract, agreement for sale and purchase memorandum of transfer and/or LINZ dealing authority, or any other required documents to effect the transfer of the Property, if the respondent refuses to do so.

(c)That 70 percent of the net sale proceeds of the sale of the Property, after payment of the real estate commission, any marketing costs previously agreed by the parties before they are incurred, and reasonable conveyancing costs, be paid to the applicant. The remaining 30 percent of the said net sale proceeds to be paid to the respondent.

(d)That, if an order for costs is sought, then the applicant to file a memorandum (no more than 5 pages) by 4 April 2019, and the

respondent to file a memorandum in reply (no more than 5 pages) by 18 April 2019.1

Evaluation

[12]              The fact the parties seek the orders by consent is obviously the strongest indication that an order under s 339 is appropriate.  However, the factors set  out in   s 342 of the Act also point towards granting the orders:

(a)Ms Mortenson has the majority share in the Property, at 70 percent;

(b)Mr Tui, the respondent, holds the remaining 30 percent as an executor of his mother’s will, which requires he distribute his mother’s estate equally among his siblings. Selling the Property will enable this distribution;

(c)Ms Mortenson’s affidavit indicates Mr Tui has moved out of the Property. There is accordingly no evidence of any hardship to him from selling the Property; and

(d)The evidence suggests Mr Tui is refusing to contribute to the costs of maintaining the Property or otherwise engaging with Ms Mortenson in relation to it.

[13] I am therefore satisfied that it is appropriate to and make the orders by consent as set out at [11] above. The 30 percent net proceeds of sale to be paid to Mr Tui will obviously be paid to him in his role as executor of his mother’s estate, to be dealt with by him in accordance with that role.

Fitzgerald J

1      I have adjusted the dates referred to in the draft orders set out in the joint memorandum, to reflect the timing of this judgment.