Newman-Watt

[2017] NZHC 2738

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-002473

[2017] NZHC 2738

IN THE MATTER OF

Section 66 of the Trustee Act 1956 and the Inherent Jurisdiction of the Court

AND

IN THE MATTER OF

an Application by Vianney Newman-Watt as Administrator of the Estate of

Tahuna Minhinnick, Deceased

BETWEEN

VIANNEY NEWMAN-WATT

Applicant

Hearing:

[On the Papers]

Counsel:

N L Penman-Chambers for the Applicant

K F Gould for L S Minhinnick, A G Kahukoka, and
as Trustee of the Kahawai Point Trust, Lisa Sharp Minhinnick Trust, Atea Grace Kahukoka Trust, Nga Iwi Kahukoka Trust and Brian Kahukoka Trust

A J Woodhouse for K T A Raumati and as Trustee of the K T A Raumati Trust

Judgment:

8 November 2017

JUDGMENT OF EDWARDS J

This judgment was delivered by Justice Edwards on 8 November 2017 at 4.00 pm, pursuant to

r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Counsel:     K F Gould, Auckland

Application by Newman-Watt for Orders Permitting Distribution of Estate [2017] NZHC 2738 [8 November 2017]

Solicitors:    Hesketh Henry, Auckland

Woodhouse Law, Auckland

Introduction

[1]    Ms  Newman-Watt   is   the   appointed   temporary   administrator   of Tahuna Minhinnick’s (Tahuna) estate. She makes an application under s 66 of the Trustee Act 1956 seeking permission to distribute Tahuna’s estate in accordance with a Deed of Arrangement dated 17 April 2017.

[2]    The application is made because the distribution affects the interests of Tahuna’s children and grandchildren who are minors, and marks a departure from distribution of the estate pursuant to s 77 of the Administration Act 1969.

[3]    Orders granting leave to commence the proceeding by way of originating application, dispensing with the appointment of litigation guardians, and directing service, were made by Downs J on 18 October 2017. The application has been served on all parties directed to be served. Those parties consent to the orders sought in the originating application.

[4]    Given the consensual nature of the application, the parties requested that the matter be determined on the papers. I convened a telephone conference with counsel on 7 November 2017 to clarify aspects of the application but the application has essentially been determined on the papers in accordance with that request.

Background

[5]    Tahuna passed away on 4 March 2016. After making the necessary inquiries, Ms Newman-Watt deposes to her belief that he died intestate. Ms Newman-Watt was appointed temporary administrator of his estate pending further order of the Court.

[6]Tahuna is survived by:

(a)his wife, Lisa Sharp Minhinnick (Lisa);

(b)his children from his marriage to Lisa:

(i)Atea Grace Kahukoka, born 26 June 1998 (Atea);

(ii)Nga Iwi Kahukoka, born 16 January 2000 (Nga Iwi);

(iii)Brian Kahukoka, born 7 June 2003 (Brian);

(c)his adult son from a prior relationship, Kyle Te Ahu Raumati (Te Ahu);

(d)his grandchildren, being Te Ahu’s children:

(i)Marty Ngariki Raumati;

(ii)Jayden-Lee Manaia Te-Awa Raumati;

(iii)Christie Jay Matakino Te-Awa Raumati;

(e)his siblings: Riki Richard Te Pou Minhinnick, Moeatoa Minhinnick, Awaroa Minhinnick, Eden Roima Wally Minhinnick (known as Roimata Minhinnick) and Piritania Minhinnick.

[7]The assets and liabilities of the estate comprise of the following:

(a)Seventy-five shares in Maraerobics Ltd. The sole asset of Maraerobics Ltd is Tahuna and Lisa’s family home in Waiuku. Lisa and their children continue to reside in that home. Quotable Value assessed the capital value of the home as at July 2014 as being $720,000. The mortgage on the property secures current borrowings of approximately

$185,000.

(b)All shares in Kahawai Point Developments Ltd and Kahawai Point Services Ltd (Kahawai Group).

(c)Tahuna’s personal effects and chattels.

[8]    The Kahawai Group is involved in a major subdivision involving the development of a special housing area with 800 lots at Kahawai Point. If the project is completed, the shares in Kahawai Group are likely to be the highest net worth asset of his estate.

[9]    Under the deed of arrangement agreed between the parties, Tahuna’s estate will be distributed as follows:

(a)Lisa is to receive Tahuna’s shares in Maraerobics Ltd (and thereby the family home);

(b)Lisa is to receive the chattels housed at the family home and Tahuna’s personal effects;

(c)All shares in the Kahawai Point Group are to be distributed to the Kahawai Point Trust No 1. The settlor of that trust is Lisa. The trustees of that Trust are Lisa, Mr Kevin Gould, and KPT Trustees Ltd. The beneficiaries of that Trust are the individual personal trusts of Lisa, and each of Tahuna’s four children. The parties are agreed that any distributions are to be paid in the following shares: 50 per cent to Lisa’s personal trust, and 12.5 per cent for each of the trusts of Tahuna’s four children.

[10]   The deed of arrangement also involves the compromise of claims which Lisa has under the Property (Relationships) Act 1976 for a division of the relationship property. It also involves the compromise of a potential claim that the trustees of the Kahawai Point Trust might have for specific performance in relation to the transfer of the Kahawai Group shares.

[11]   Ms Newman-Watt deposes to the fact that Tahuna’s children and grandchildren come within the group of eligible claimants against Tahuna’s estate, but she is not aware of any of the deceased’s children or grandchildren having special needs or any other reason which might see them bringing a claim against the estate.

[12]   Finally, I record that Lisa has her own legal representation; her children (Atea, Nga Iwi and Brian) are separately represented; and Te Ahu also has separate legal representation.

Decision

[13]   Although the application is brought under s 66 of the Trustee Act for directions, I have derived guidance from the principles which apply to approvals of deeds of arrangement under s 64A of the Trustee Act. Those principles were summarised by French J in McKnight v Craig.1 In particular, I have considered whether the proposed distribution is in the interests of Tahuna’s children and grandchildren who are minors.

[14]   I am satisfied that the distribution agreed pursuant to the deed of arrangement is in their best interests, and those of Lisa and the adult children, for the following reasons.

[15]   First, the evidence before the Court suggests that the real value of the estate lies in the shares in the Kahawai Group pending completion of the development. The structure adopted in the deed of arrangement is designed to preserve the value of those shares. In that respect, the deed of arrangement is likely to realise more financial benefit for all the parties than if the Kahawai Group is wound up and the estate distributed now.

[16]   Second, any comparison between the share of the estate which the children will receive pursuant to the Deed, with that which they would otherwise receive under the Administration Act, needs to take into account the effect of Lisa’s claims on the estate. If Lisa’s claim under the Property (Relationship) Act 1976 was to be pursued, it is conceivable that she would be awarded half of the equity in the family home, half of the shares in Maraerobics Ltd, and half of the shares in Kahawai Group. Ms Newman- Watt deposes to the possibility of Lisa seeking further provision from Tahuna’s estate under the Family Protection Act 1955 also. In that light, the respective shares of each of the children’s trusts under the deed of arrangement is fair and reasonable in the circumstances.

1      McKnight v Craig [2010] 3 NZLR 860 (HC) at [7] and [8]

[17]   Furthermore, the compromise of claims which would otherwise be made on the estate is consistent with promoting peace and family harmony more generally. That is not only in the interests of the family, but in the wider public interest also.

[18]   Third, and finally, each of Tahuna’s children are treated equally under the deed, and their interests are protected by trusts in their individual names. The interests of Tahuna’s grandchildren are indirectly protected by virtue of their status as beneficiaries under the Te Ahu trust, which is a beneficiary of the Kahawai Point Trust No. 1.

[19]   Overall, I am satisfied that distribution of the estate in accordance with the deed of arrangement is in the interests of Tahuna’s children who are minors, and is in the wider interest of all parties to the deed. I grant the application accordingly.

Result

[20]   The application for directions under s 66 of the Trustee Act is granted. Distribution of Tahuna’s estate in accordance with that deed of arrangement is approved.

Edwards J