Ormerod

[2017] NZHC 2259

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-2063 [2017] NZHC 2259

UNDER

Part 19 of the High Court Rules

IN THE MATTER OF

An application by William Arthur Forster Ormerod as sole executor and trustee of the Estate of John Louis Ormerod

WILLIAM ARTHUR FORSTER ORMEROD

Applicant

Hearing:	On the papers
Counsel:	K Davenport QC and  J M McGuigan for Applicant
Judgment:	18 September 2017

JUDGMENT OF WHATA J

This judgment was delivered by me on 18 September 2017 at 4.00 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date: ………………………….

Solicitors:           Carlene Blucher Law Limited, Kumeu

RE ORMEROD [2017] NZHC 2259 [18 September 2017]

[1]      The  applicant, William Arthur  Forster  Ormerod,  has  applied  to  serve  an originating application on Juliet Rosemary Louise Ormerod at the address of her lawyer, Neshia Holdaway. The applicant claims that:

(a)      He and Juliet are the only beneficiaries of the estate of John Louis

Ormerod.

(b)      The solicitor, Neshia Holdaway, of the firm Norwest City Law, is

Juliet’s current lawyer.

(c)      The application is necessary because Juliet and Ms Holdaway have refused to release William’s solicitor, Susan Norton, from an undertaking she gave not to release the estate’s funds until a distribution statement was finalised.

[2]      Further orders are also sought permitting the applicant to proceed with the application by way of originating application under High Court Rules 2016, r 19.5, and permitting the applicant to file the intended application in the Auckland Registry of the High Court.

Background

[3]      The following matters are set out in the affidavit of Susan Lynn Norton, who

is the applicant’s solicitor.

[4]      John Ormerod died on 26 November 2007.   His wife, Rosemary, died on

17 August 1998.  The sole asset of John’s estate is the Ormerod family home (the

King Edward property). The beneficiaries of John’s estate were:

(a)      Russell Euan Forster Ormerod; (b)      Andrew John Forster Ormerod; (c)      Juliet; and

(d)      William, the applicant.

[5]      In  2013,  William  entered  into  a  settlement  agreement  with  Russell  and Andrew and paid out their interests in the estate.  In late 2016, William and Juliet agreed that the family home would be sold. It was subsequently sold on 24 January

2017 for $4,000,000.   Prior to settlement of the property, William and Juliet negotiated a property agreement, distribution of family heirlooms and for removal of a caveat which had been placed on the title of the King Edward property by Juliet some time before.   Correspondence then ensued between Ms Holdaway and Ms Norton about the execution of the agreement.  This then culminated in a undertaking by Ms Holdaway as follows:

I undertake to hold all settlement funds less payment for rates on term deposit undisbursed until such time as a distribution statement has been forwarded to you, for your clients’ approval, but not later than 3rd of March

2017.

[6]      In response, Ms Holdaway wrote to Ms Norton enclosing a copy of the property agreement executed by Juliet. The property agreement provided:1

a.The parties agreed John’s estate was to be finalised and the estate funds distributed to Juliet as to a 25% share (of the King Edward property sale proceeds) and William as to a 25% share (of the King Edward property sale proceeds).

b.William and [Ormerod Holdings Ltd, 50% owner in the property] agreed to indemnify Juliet for the registered mortgage to ANZ Bank of $1.5m upon settlement of the sale (which had been raised in part to settle the amount due to Russell Ormerod).

c.The  sum  of  $130,000  was  acknowledged  as  owing  to  Juliet  to William for development and maintenance costs paid by William for the King Edward property.   It was agreed $130,000 would be deducted from Juliet’s proportion of the sale proceeds and paid to William.

d.        Sale proceeds were to be applied as follows:

i.        Payment of sales commission, legal fees and usual sale expenses.

ii.        Balance to be divided:

50% to OHL;

1      This is by way of summary provided in Ms Norton’s affidavit.

25% to William;

25% to Juliet.  From that 25%:

$130,000 to be paid to William.

Juliet is only to be responsible for 25% of the payments referred to at [(d)(i)] above.

e.The  terms  of  the  agreement  were  binding  on  the  executors  or administrators of both parties.

[7]      Ms Holdaway also provided an undertaking to withdraw its caveat from the property.

[8]      A dispute then ensued about the amount Juliet would receive and whether she was required to vacate the property.  There is correspondence from Ms Holdaway indicating Juliet was expecting to have settlement funds by a particular date, and that she would not vacate the premises because William had failed to act in her best interests.

[9]      Further  correspondence  ensued,  with  little  achieved  by  way  of  positive outcome.

[10]     Given the dispute, Ms Holdaway sought and Ms Norton confirmed that no estate funds would be distributed until a distribution deed was executed by both parties.  There was then further correspondence from Ms Holdaway outlining that Juliet took issue with how matters had unfolded and that funds had not been distributed  to  her  firm’s  trust  account  on  the  day  of  settlement.    The  impasse persisted through to the end of May 2017 and it seems matters have not advanced since then.

Assessment

[11]     I  am  satisfied  that  substituted  service  on  Juliet,  via  her  solicitor,  Ms Holdaway of the firm Norwest City Law, is appropriate.  Ms Holdaway plainly acts for Juliet in respect of the estate of her father.

[12]     I am not prepared, however, at this stage to grant leave to proceed by way of originating application or to make a final order as to registry.   As Ms Norton’s affidavit quite clearly reveals, there are several matters in dispute.  The originating application procedure is not ordinarily designed for such litigation.   However, I accept there is some urgency to  all of this, and  I direct that Juliet is to file a memorandum with the Court within 72 hours, setting out whether the application for leave to proceed by way of originating application is opposed. If it is, the matter will be placed before a judge as soon as possible.

[13]     In this regard, I acknowledge the affidavit evidence that William has terminal cancer and urgency is required. Counsel will need to explain why matters of process and registry cannot be agreed given this background.

Orders

[14]     The application for substituted service is granted.

[15]     The applications for leave to proceed by way of originating application and to file in the Auckland registry are not granted at this stage. Ms Holdaway shall have 72 hours to file a memorandum setting out whether the application is opposed. It is hoped these matters can be agreed.