Pearce v Ellice
[2019] NZHC 445
•14 March 2019
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV-2018-404-1354
[2019] NZHC 445
UNDER the Administration Act 1969, s 10 and s 15 IN THE MATTER
of (a) unlawful distribution of the estate of Frederick Arthur Pearce in contravention of a High Court Order (Probate CIV 2009 404 6327) and (b) Contravention of s 15 of the Administration Act 1969 (Bond repealed)
BETWEEN
RONALD FREDERICK PEARCE
Plaintiff
AND
PAUL GRANT ELLICE
Defendant
Hearing: 7 March 2019 Appearances:
Mr Pearce in person
T Braun for the Defendant
Judgment:
14 March 2019
JUDGMENT OF ASSOCIATE JUDGE SMITH
This judgment was delivered by me on 14 March 2019 at 2.30pm, pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Solicitors / Counsel:
Braun Bond & Lomas, Hamilton
Copy to:
R F Pearce
PEARCE v ELLICE [2019] NZHC 445 [14 March 2019]
[1] The defendant originally applied for summary judgment, or an order striking out the claims made against him by the plaintiff. At the hearing Mr Braun advised that the summary judgment application would not be pursued, and that the only orders sought would be an order striking out the plaintiff's statement of claim dated 5 July 2018 (the statement of claim), and an order for costs.
Background
[2] The plaintiff's claims arise out of the administration of the estate of his late father, Frederick Arthur Pearce (the deceased), who died on 27 January 2005. In his last will dated 8 November 2004, the deceased left a legacy of $25,000 to another son, Maxwell Arthur Pearce, and the residue to the plaintiff.
[3] The deceased had a third son, Barrie Arthur Young, for whom no provision was made in the deceased's will. There was initially an issue over whether Mr Young was the son of the deceased, but that was resolved by a declaration made by Judge Hikaka on 19 April 2011 under the Status of Children Act 1969, in which the Judge made a declaration that Mr Young was the son of the deceased.
[4] Although named as executor in the deceased's last will, the plaintiff did not initially apply to the High Court for a grant of probate. In the absence of an application for probate, Maxwell Pearce filed an application in this Court under ss 6 and 19 of the Administration Act 1969 for an order appointing the Public Trust as administrator of the deceased's estate. Initially, the plaintiff represented himself in that proceeding, but eventually he took legal advice, and Maxwell Pearce's application to have the Public Trust appointed as administrator was settled by consent. The plaintiff applied for a grant of probate of the deceased's last will, and probate was duly granted to the plaintiff on 12 October 2009.
[5] Maxwell Pearce and Mr Young both made claims against the deceased's estate under the Family Protection Act 1955 (the Act). The claims under the Act were heard by Judge McHardy in the Family Court at Auckland on 7 December 2011, and His Honour gave a reserved judgment on 7 February 2012. The plaintiff represented himself in the proceeding under the Act, opposing the applications made by Maxwell Pearce and Mr Young for further provision out of the deceased's estate.
[6]Judge McHardy upheld both claims under the Act, awarding the sum of
$250,000 each to Mr Maxwell Pearce and Mr Young. In the case of Mr Maxwell Pearce, the award was stated to be in lieu of the $25,000 legacy in the deceased's last will.
[7] The plaintiff had initially engaged Chatwin Legal to advise him, but on or about 29 September 2009 Chatwin Legal engaged the defendant's law firm, Ellice Tanner Hart (previously called Ellice Tanner), to assist with an urgent application to obtain probate of the deceased's last will. At or about the same time, the defendant says that his firm was instructed by the plaintiff in relation to the administration of the estate. The defendant produced with his affidavit copies of letters of engagement dated 29 September 2009 in respect of the Chatwin Legal instruction, and 2 October 2009 in respect of the instruction from the plaintiff. The letter dated 2 October 2009 to the plaintiff set out the services Ellice Tanner expected to provide. The services were generally what one would have expected to see provided by a solicitor advising in the administration of a deceased estate (for example, drafting an affidavit to obtain grant of probate, getting in the assets of the estate, drafting statements of transactions and of assets and liabilities, and arranging for the distribution of estate funds to take place after paying any legacies or bequests). Hourly charging rates were provided for the defendant and Ms Robyn Miles of Ellice Tanner.
[8] Notwithstanding that probate had not yet been granted, Maxwell Pearce had already commenced the proceeding under the Act by early October 2009. The solicitors acting for him were Hesketh Henry. On 2 October 2009 Ellice Tanner provided the following undertaking to Hesketh Henry:
Estate Frederick Arthur Pearce
We, Ellice Tanner, Solicitors of Hamilton, irrevocably undertake:
1.Should [the plaintiff] obtain probate in this matter, we will not transfer or otherwise deal with the estate funds except:
(a)upon the resolution of [the claim under the Act] against the estate; or
(b)upon an order of the Court; or
(c)to transfer the estate funds to another lawyer's trust account upon receipt of the lawyer's irrevocable undertaking that he or she will transfer or otherwise deal with the estate funds on the same terms.
2.We have forwarded an irrevocable authority from [the plaintiff] to the ANZ Bank that all estate on call funds will be transferred to Ellice Tanner's trust account upon the bank's receipt of a certified copy of probate.
The above undertakings are subject to the proviso that we will retain the usual right to pay the estate's reasonable legal, administration and accounting costs and all debts of the estate.
[9] The defendant said that a copy of that undertaking was provided to Hesketh Henry, the plaintiff, and the ANZ Bank. He said that the intention was that all estate accounts would be transferred to Ellice Tanner's trust account upon the bank's receipt of a certified copy of probate.
[10] Also on 2 October 2009, the plaintiff signed an irrevocable instruction to Ellice Tanner, in the following terms:
ESTATE OF FREDERICK ARTHUR PEARCE
I, [the plaintiff] irrevocably instruct you that you must not transfer or otherwise deal with the estate funds except:
1.Upon the resolution of [the claim under the Act] against the estate; or
2.Upon an order of the Court; or
3.To transfer the estate funds to another lawyer's trust account upon receipt of that lawyer's irrevocable undertaking that he or she will transfer or otherwise deal with the estate funds on the same terms.
[11] Also on 2 October 2009, the plaintiff wrote to the ANZ Bank irrevocably instructing the bank to deposit the sum of $200,000 into the trust account of Ellice Tanner, when a particular term deposit matured on 2 February 2010. It is common ground that this $200,000 came from the plaintiff's personal funds — it was not estate money. The plaintiff noted that the bank had frozen certain accounts held by the deceased at the bank, but he advised that he had applied for probate in the deceased's estate. He irrevocably instructed the bank to pay the estate funds to Ellice Tanner's trust account once the bank had been provided by the estate's solicitors with a certified copy of the grant of probate.
[12] On or about 13 October 2009, Chatwin Legal, acting on the plaintiff's behalf, instructed Ellice Tanner to act for the estate in a "watching brief" role in the three sets of proceedings then on foot (Maxwell Pearce's application to appoint the Public Trust as executor, the claims under the Act, and the plaintiff's own application for probate).
[13] In his claim, the plaintiff has raised some question over the extent of the estate assets and liabilities. The defendant produced with his affidavit a statement of assets and liabilities for the estate as at 15 December 2009, showing total assets of
$1,196,110.21 and total liabilities of $156,699.57. That statement of assets and liabilities was signed by the plaintiff below the notation "Approved as factually correct on behalf of the estate of [the deceased]".
[14] A "final" statement of assets and liabilities for the deceased's estate was prepared by Ellice Tanner as at 15 January 2010. The assets were assigned the same value as in the earlier statement ($1,196,110.21); the liabilities were somewhat higher at $194,663.63 (which sum included additional legal costs).
[15] The defendant said in his affidavit that identifying the assets of the estate was complicated by the mingling of the plaintiff's personal funds with estate funds. He said that that related primarily to the purchase of a property in Bethlehem, Tauranga, which was held in the plaintiff's name but purchased with funds from the sale of the deceased's family home. It appears that this intermingling of funds was a concern of Maxwell Pearce when he applied for an order appointing the Public Trust as administrator of the deceased's estate. The defendant said that that application was withdrawn by consent upon the undertaking of the plaintiff to pay the $200,000 from his ANZ term deposit into Ellice Tanner's trust account, pending resolution of the claims under the Act.
[16] In addition to the awards made in favour of Maxwell Pearce and Mr Young, Judge McHardy directed that Maxwell Pearce was to receive the sum of $18,954.50 by way of costs from the deceased's estate, and that Mr Young was to receive a sum by way of costs from the estate on a solicitor/client basis. His Honour directed Ellice Tanner to meet the awards in favour of Maxwell Pearce and Mr Young out of the funds they were holding for the deceased's estate, and that the costs of Mr Maxwell Pearce
and Mr Young were also to be paid from the moneys held in the trust account of Ellice Tanner. His Honour ordered that the residue of the estate was then to be paid by the solicitors as directed by the plaintiff.
[17] The defendant produced with his evidence sealed copies of the orders for costs in favour of Maxwell Pearce ($18,954.50) and Mr Young ($17,202.30). A further order for costs against the plaintiff was made in the High Court on an appeal in a proceeding between Mr Young and the plaintiff: on 2 April 2012, the plaintiff was ordered to pay Mr Young's costs in the total sum of $1,270.30.
[18] There were two further costs orders against the plaintiff. First, the Court of Appeal delivered a judgment on 21 August 2012 refusing leave to appeal against a High Court judgment dated 6 December 2011. The plaintiff was ordered to pay the total sum of $7,203 on the dismissal of his application for leave to appeal. Secondly, an award of costs in the sum of $6,440.30 was made against the plaintiff in this Court on 27 March 2013, following the dismissal of an appeal by the plaintiff against the judgment of Judge McHardy. The Court ordered that the costs were to be paid to Maxwell Pearce's solicitors by Ellice Tanner, out of funds held by them for the deceased's estate under an irrevocable undertaking given in separate proceedings in this Court. The High Court ordered that, after the payments required by these orders and any other Court orders against the estate of the deceased had been made, Ellice Tanner was to pay the residue of any funds held by them for the estate of the deceased, in accordance with the plaintiff's directions.
The statement of claim
[19] The first substantial contention in the statement of claim is that the Family Court had no jurisdiction to make the orders purportedly made under the Act. The plaintiff referred to a number of sections in the Administration Act 1969, including ss 5 and 10 of that Act, in support of the proposition that the orders purportedly made under the Act could not prevail over the terms of the probate granted to him under the sealed order of this Court made in October 2009.
[20] Two further grounds are pleaded in support of the proposition that Ellice Tanner was not entitled to act in reliance on the orders made under the Act in
distributing the estate funds. First, the plaintiff says that the orders made by Judge McHardy were never properly sealed. Secondly, he says that the Family Court did not in any event have jurisdiction to make orders in excess of the sum of $200,000.
[21] Given those alleged deficiencies, the plaintiff says Ellice Tanner acted without authority and contrary to his instructions when it distributed the estate funds in or about June 2013 (including by paying the awards made in favour of Maxwell Pearce and Mr Young under the Act). He seeks relief for what he describes as the "unauthorised distribution of his legacy", along with "$70,000 of his captured monies", to "persons not possessing documents of title". He asks for an order that the defendant provide a true and complete estate statement of transactions as at 19 June 2013 (or the date the defendant opened the trust account (without his consent) and distributed the money. He also asks for an order that the defendant make good the estate funds so distributed (approximately $700,000–$800,000), and that the defendant be made to comply with the terms of the deceased's will.
[22] The plaintiff next contends that the $200,000 he paid into the Ellice Tanner trust account in or about October 2009 was in fact an unlawful administration bond. He referred in that regard to s 15 of the Administration Act 1969 (although I note that section was repealed in 1980). He contends that the defendant was guilty of "sequestering" the $200,000 "administration bond", causing him loss. However, he accepted at the hearing that the $200,000 was refunded to him following the conclusion of the litigation, with accrued interest of approximately $17,000, and in his statement of claim he made no claim for damages or other relief in respect of the alleged loss caused by the "sequestration". In his affidavit in opposition to the defendant's strike-out application, however, the plaintiff said that, although he did not seek "retribution" for the retention of the $200,000 "bond", he wanted $25,000 as a token compensation for the anguish, distress and financial losses incurred in excess of
$300,000 as a result of [the plaintiff as residuary beneficiary] being deprived of the use of the $200,000 for business purposes for a period of four years.
[23] The statement of claim refers to a sum of $159,681.98, which the plaintiff refers to as "my captured monies". In an affidavit affirmed on 2 September 2018 the
plaintiff described this money as money paid from his own monies for his father's care costs, bills and expenses, although that was not made clear in the statement of claim.1
[24] The plaintiff also raises an issue as to whether Judge McHardy correctly assessed the size of the deceased's estate, and whether the $200,000 "administration undertaking" paid by the plaintiff to Ellice Tanner was correctly understood. However, it is not made clear in the statement of claim how any such misunderstanding is said to have been caused or contributed to by any breach of duty owed to the plaintiff by the defendant.
[25] The plaintiff then contends that Ellice Tanner have not provided a final statement of estate transactions. He contends that, for this reason, "the exact amount held in the trust and taken by [the defendant] is not known".2
[26] Finally, the plaintiff referred to costs deducted by Ellice Tanner, allegedly without his knowledge or authorisation. He pleaded that if the costs are reasonable "as judged by me", the defendant may keep the money. However, if he deemed the costs excessive, he asked for an order that the defendant forfeit half of the costs to him.
[27] In his affidavit in opposition to the strike-out application, the plaintiff submitted that the defendant should forfeit the amount he has paid himself ($3,415) in connection with his "unauthorised transactions", and return all funds taken.
The law relating to strike-out applications
[28]Rule 15 of the High Court Rules 2016 provides:
1 A statement of assets and liabilities prepared by Ellice Tanner as at 15 December 2009 (and approved by the plaintiff) showed liabilities, as amended by the plaintiff by handwritten amendment, at $156,699.57, which included sums said to be owing by the estate to the plaintiff totalling $123,016.13 (for example, Maxwell Pearce's $25,000 legacy paid from the plaintiff's personal funds on 3 March 2008). But the statement of claim does not itemise or adequately describe the "captured monies".
2 In his affidavit in opposition to the strike-out application, the plaintiff said that he has now received the final estate statement of transactions. It is not clear whether he wishes to pursue this aspect of his statement of claim any further.
15.1 Dismissing or staying all or part of proceeding
(1)The court may strike out all or part of a pleading if it—
(a)discloses no reasonably arguable cause of action, defence, or case appropriate to the nature of the pleading; or
(b)is likely to cause prejudice or delay; or
(c)is frivolous or vexatious; or
(d)is otherwise an abuse of the process of the court.
(2)If the court strikes out a statement of claim or a counterclaim under subclause (1), it may by the same or a subsequent order dismiss the proceeding or the counterclaim.
(3)Instead of striking out all or part of a pleading under subclause (1), the court may stay all or part of the proceeding on such conditions as are considered just.
(4)This rule does not affect the court’s inherent jurisdiction.
[29] The principles applicable to strike-out applications are well settled. They may be summarised as follows:3
(a)Pleaded facts, whether or not admitted, are assumed to be true.
(b)The cause of action or defence must be clearly untenable. It is inappropriate to strike out a claim summarily unless the Court can be certain that it cannot succeed.
(c)The jurisdiction is to be exercised sparingly, and only in clear cases.
(d)The jurisdiction is not excluded by the need to decide difficult questions of law, requiring extensive argument.
(e)The Court should be particularly slow to strike out a claim in any developing area of the law.
3 Attorney-General v Prince [1998] 1 NZLR 262 (CA) at 267, and Couch v Attorney-General [2008] 3 NZLR, 725; [2008] NZSC 45, at [33], per Elias CJ and Anderson J.
[30] Affidavit evidence will be admitted on a strike-out application to show that an essential factual allegation is plainly wrong.4
The issues
[31]The following issues are to be decided:
(1)Is it reasonably arguable for the plaintiff that Judge McHardy did not have jurisdiction to make the awards under the Act?
(2)Is it reasonably arguable for the plaintiff that the defendant breached a duty owed to the plaintiff when the estate funds were distributed by:
2.1distributing the funds when the Family Court judgment had not been sealed; or
2.2distributing the funds without obtaining a signed authority from the plaintiff to do so?
(3)Is it reasonably arguable for the plaintiff that the defendant breached a duty to the plaintiff to provide him with a true and complete statement of estate transactions as at the date Ellice Tanner distributed the estate funds from its trust account?
(4)Might the plaintiff have an arguable claim against the defendant for delay in refunding the $200,000 paid by the plaintiff into the Ellice Tanner trust account on or about 2 February 2010?
(5)Does the plaintiff have an arguable claim against the defendant for recovery of all or part of the legal costs paid to or deducted by Ellice Tanner?
[32]I will address each issue in turn.
4 Attorney-General v McVeagh [1995] 1 NZLR 558 (CA), at 566.
Issue (1) — Is it reasonably arguable for the plaintiff that Judge McHardy did not have jurisdiction to make the awards under the Act?
[33] The plaintiff's contention is misconceived. Section 3A of the Act, inserted in July 1992, quite clearly provides that the High Court and a Family Court shall each have jurisdiction in respect of proceedings under the Act. That is subject to the provisions of ss 3A(2) – (4), none of which have any application in the present case.5
[34] The sections of the Administration Act 1969 to which the plaintiff referred do not affect that jurisdiction. First, the Family Court's jurisdiction to make orders under the Act is expressly stated to override the Administration Act (except in one respect which is not relevant to this case).6 But even if that were not so, none of the sections of the Administration Act referred to by the plaintiff could assist him. Section 10 of that Act, referred to by the plaintiff, provides:
10 Administration with will annexed
Where the court grants administration of the estate of a deceased person with the will annexed, the will of the deceased shall be performed and observed in like manner as if probate thereof had been granted to an executor.
[35] The section does not touch the present situation. In this case, probate was granted to the plaintiff as executor, and the section is not directly relevant. But even if it were, the obligation the section imposes on the administrator is simply to administer the deceased's estate on the same basis as if there had been a grant of probate to the administrator. The obligation is clearly to be performed and observed in respect of the deceased's will as it might be varied by the Court under the provisions of the Act.
[36] Applications under the Act for further provision out of a deceased's estate are routinely brought after probate has been granted to the executor in the estate; indeed,
5 Section 3A(2) deals with the situation where, at the time of the filing in the Family Court, a proceeding relating to the same matter has already been commenced in the High Court. When Maxwell Pearce filed his claim under the Act no proceeding under the Act was pending in this Court. Section 3A(3) confers on a Family Court Judge a discretion to refer the proceeding, or a question in the proceeding, to the High Court if the Family Court Judge considers that the proceeding or question would be more appropriately dealt with in the High Court. Section 3A(4) provides that the High Court may, on application made by any party to a proceeding pending under the Act in the Family Court, order that the proceedings be removed into the High Court.
6 Family Protection Act 1955, s 4(1A).
the Act expressly contemplates that situation, and it is the norm, not the exception. By way of example only, s 9(2) of the Act, which prescribes the time limit within which any claim under the Act is to be made, provides (where the application for further provision is made by someone other than the administrator) that the prescribed period for making a claim is "12 months from the date of grant in New Zealand of administration in the estate".
[37] Nor is s 5 of the Administration Act, also referred to by the plaintiff, relevant. Section 5 provides:
5 Probate jurisdiction of High Court
(1)The court shall continue to have jurisdiction and authority in relation to the granting and revoking of probate of wills and letters of administration with or without a will annexed of the estates of deceased persons, and in regard to the hearing and determining of proceedings relating to testamentary matters and matters relating to the estates of deceased persons.
(2)Without restricting subsection (1) or any other enactment, the court shall have jurisdiction to make a grant of probate or letters of administration in respect of a deceased person, whether or not the deceased person left any estate in New Zealand or elsewhere, and whether or not the person to whom the grant is made is in New Zealand.
[38] The section is a broad, general section, which confers on this Court the power to exercise probate jurisdiction, including the granting and revoking of probate and letters of administration and "the hearing and determining of proceedings relating to testamentary matters and matters relating to the estates of deceased persons". The section says nothing about the jurisdiction of other courts to hear and determine proceedings under the Act, and that jurisdiction was expressly conferred on the Family Court in 1992, when s 3A of the Act was added.
[39] The plaintiff referred to a letter dated 11 October 2011 from a deputy registrar of this Court advising that "the Order granting probate could not be overturned by the Family Court". The letter does not appear to have been produced, so the context of the statement made by the deputy registrar is unclear. However, the simple statement that an order granting probate cannot be overturned by the Family Court is true as far as it goes — the Family Court has no jurisdiction to grant probate or make an order
revoking a grant of probate. What it does have jurisdiction to do, however, is make orders under the Act that further provision be made out of a deceased's estate for persons making successful claims under the Act.
[40] The plaintiff also referred to ss 32(2) and 47(1)(a) of the Administration Act, but again those sections have no relevance. Section 32(2) is concerned with proceedings for the administration by the amount of the estate of a deceased person, and the provisions in it (relating to the payment of costs) do not affect claims under the Act. Section 47 is generally concerned with the protection of administrators who have distributed estate assets from personal liability arising out of the distribution. The section does not affect the Family Court's jurisdiction to make orders under the Act.
[41] For those reasons I am satisfied there is nothing in the plaintiff's arguments based on the provisions of the Administration Act to which he referred.
[42] The plaintiff also contended that the Family Court did not have jurisdiction to make orders exceeding the amount of its general jurisdiction in civil monetary claims (at the time of the orders made under the Act, $200,000). Again, there is nothing in this submission. Section 3A of the Act quite clearly confers concurrent jurisdiction on the Family Court to determine claims under the Act, and it contains (in s 3A (3) and (4)) provisions for removal of a claim from the Family Court into the High Court in appropriate circumstances. The Family Court routinely deals with claims under the Act where the amounts in issue exceed the ordinary District Court money claims jurisdiction, and that is no more than an incident of the concurrent jurisdiction conferred on the Family Court by s 3A of the Act. (The jurisdiction of the Family Court is similar, in that respect, to the jurisdiction it exercises under the Property (Relationships) Act 1976, where awards may be made which exceed the District Court's general jurisdiction in claims for "debt, demand, or damages, or the value of chattels claimed".7)
7 Section 29(1) of the District Courts Act 1947, being the relevant statute governing the jurisdiction of District Courts at the time the Family Court made its orders in this case.
[43] In my view a claim for an order under the Act for further provision out of the estate of a deceased person is not a proceeding for the recovery of any "debt, demand, damages, or chattels" in any event, and nor is it a claim for a "penalty, expenses, contribution, or other like demand" recoverable under a statute.8 But even if a claim under the Act were literally within one of the general jurisdiction-limiting provisions of the District Courts Act 1947, or any rules made thereunder, I am satisfied that the specific provisions of s 3A of the Act, as introduced in 1992, clearly override the general jurisdiction limits based on the amount claimed.
[44] I conclude that the plaintiff has no reasonably arguable claim on the question of Judge McHardy's jurisdiction to make the orders he made under the Act.
Issue (2) — Is it reasonably arguable for the plaintiff that the defendant breached some duty to the plaintiff when the estate funds were distributed by:
2.1distributing the funds when the Family Court judgment had not been sealed; or
2.2distributing the funds without obtaining a signed authority from the plaintiff to do so?
[45] Again, I do not consider the plaintiff has any reasonably arguable case under this head. I reach that view for the following reasons.
[46] First, the orders made by Judge McHardy do appear to have been sealed. The defendant produced with his affidavit a copy of the orders, bearing the seal of the District Court at Auckland and showing the date of sealing as 25 October 2012.
[47] The plaintiff advanced elaborate arguments in his affidavit to the effect that none of the various orders made for payment out of the estate (including the various costs orders) had been validly sealed. There is no merit in those arguments, which appeared to depend on technical interpretations which (if there were deficiencies, and
8 Section 30 of the District Courts Act 1947 provided that the District Courts' jurisdiction on such claims did not exceed the sum of $200,000.
I am not persuaded there were) would have been readily cured by the recourse to the "slip" or "correction" rules available in the various courts.9
[48] I accept also the evidence of Ms Fleur Oback, a law clerk employed by the defendant's solicitors, who gave evidence as to her communications with the Deputy Registrar of the Auckland District Court on the issue of the sealing of the orders. Ms Oback produced a copy of the orders, bearing the seal of the District Court at Auckland, stating the date on which the orders were sealed, and identifying the Deputy Registrar of the District Court responsible for sealing the orders.
[49] Ms Oback said that she understood one of the plaintiff's central allegations is that the District Court orders were not correctly sealed because the stamp did not bear the word "sealed". She sought clarification from the Auckland District Court, and on or about 1 November 2018 she received confirmation from a Deputy Registrar of the District Court confirming that the copy of the orders made on 7 February 2012 was sealed in accordance with r 198 of the Family Court Rules 2002, on 25 October 2012.
[50] Secondly, this is an argument that has already been determined against the plaintiff. In a judgment given by Cooper J on the issue of costs in respect of the plaintiff's appeal against the Family Court judgment, His Honour said:10
[7] Mr Pearce persistently raises an issue as to whether or not the judgment against which he has appealed and now withdrawn his appeal was sealed. It is clear from the record that the judgment has been sealed.
[51] Thirdly, the plaintiff instructed Ellice Tanner on 2 October 2009 that it could disburse the estate funds either "upon the resolution of the [claim under the Act] against the estate", or "upon an order of the Court". That instruction was acknowledged by the plaintiff to be irrevocable, and on either of the bases stated Ellice Tanner was entitled to disburse the moneys in accordance with the deceased's will, as varied by the Family Court orders. The Family Court had made orders for the disbursement of the estate funds, and the claims under the Act were finally resolved when the plaintiff withdrew his appeal to this Court against the Family Court
9 In the Family Court, r 204 of the Family Court Rules 2002. In the High Court, r 12 of the High Court Rules 1985. In the Court of Appeal, r 8 of the Court of Appeal (Civil) Rules 2005.
10 Pearce v Pearce [2013] NZHC 636.
judgment, on 4 February 2013. No further authority from the plaintiff was required. Ellice Tanner was entitled (indeed, obliged) to disburse the estate funds as directed by the Family Court, and that is what it did.
[52] Fourthly, if it were necessary, in his judgment awarding costs against the plaintiff in this Court, given on 27 March 2013, Cooper J ordered:
3.After the payments required by these orders and any other Court orders against the Estate of Frederick Arthur Pearce are made, Ellice Tanner are to pay the residue of the funds that they hold of the Estate of Frederick Arthur Pearce, as directed by Ronald Frederick Pearce (the appellant). (Emphasis added.)
[53] I add that even if there had been some merit in the plaintiff's arguments under this heading, it is difficult to see how success on the issues would have assisted him. The fact of the matter is that valid orders were made by the Family Court, and the plaintiff's appeal against those orders was not pursued. The estate had a liability to pay, whether or not the orders were sealed. Payment out following the resolution of the claims under the Act, and in accordance with the Family Court orders, could not have caused the plaintiff or the estate any loss.
Issue (3) — Is it reasonably arguable for the plaintiff that the defendant breached a duty to the plaintiff to provide him with a true and complete statement of estate transactions as at the date Ellice Tanner distributed the estate funds from its trust account?
[54] The plaintiff says that it is only in the course of this proceeding that Ellice Tanner have provided him with a final statement of the estate transactions. It is not presently clear whether that is sufficient to resolve this issue, or whether the plaintiff may have further claims relating to it.
[55] If the plaintiff does have further claims arising from what is apparently now said to be the late supply of the statement of estate transactions, those claims will need to be set out in an amended statement of claim, stating clearly the nature of any breach of duty asserted against the defendant, the loss said to have been caused by the breach of duty, and the relief claimed in respect of the alleged breach.
Issue (4) — Might the plaintiff have an arguable claim against the defendant for delay in refunding the $200,000 paid by the plaintiff into the Ellice Tanner trust account on or about 2 February 2010?
[56] It appears that the plaintiff does now wish to claim some relief ($25,000) in respect of the alleged wrongful retention of the $200,000 by the defendant's firm.
[57] The plaintiff's contention (as made clear in his affidavit) is that when the estate assets and liabilities were finalised in early 2010 it should have been apparent to everyone, including Maxwell Pearce and his advisers and the defendant's firm, that the plaintiff had not been "helping himself" to estate assets before he was entitled to receive those assets as residuary beneficiary. He says that the $200,000 should have been returned to him at that point, but Maxwell Pearce's advisers would not agree to the return of the funds. The plaintiff accuses the defendant of oversight in failing to write an appropriate "exit clause" into the undertaking provided to Maxwell Pearce's solicitors and (possibly — it is not clear on the evidence) to the Court, which would have permitted the return of the funds to the plaintiff once it was clear that he had not been guilty of any wrongdoing. The plaintiff also asserts that the defendant, aware of the deficiencies in the undertaking given to Maxwell Pearce and the illegality of the "administration bond" under s 15 of the Administration Act, tried to "cover his tracks" by providing a number of different reasons for the payment of what was an illegal bond.
[58] The plaintiff says that the undertaking relating to the $200,000" administration bond" was not put before Judge McHardy in the Family Court.
[59] To the extent the plaintiff wishes to pursue a claim against the defendant relating to the retention of the $200,000 beyond the point when the plaintiff says the money should have been released to him, I do not consider the circumstances justify striking out this part of the claim. However if he wishes to pursue a claim of this sort the plaintiff will need to file an amended statement of claim setting out in numbered paragraphs his allegations relating to (i) the basis on which he paid the $200,000 to Ellice Tanner, (ii) the relevant terms of the undertaking(s) apparently given to Maxwell Pearce's solicitors (and possibly to the Court) as to the retention of the $200,000 in Ellice Tanner's trust account, and (iii) the facts which he says entitled Ellice Tanner to
repay the $200,000 to him in accordance with the undertaking or undertakings (including the date when he contends circumstances first existed that would have allowed Ellice Tanner to refund the $200,000 to him). He will also have to clearly state the facts on which his claim for $25,000 is based, or (if the claim is simply a claim for general damages for distress or other hurt to feelings) identify the claim as a general damages claim and state any facts he wishes to rely on in support of it.
[60] The plaintiff appears to suggest in his affidavit that the defendant was negligent in drafting the relevant undertaking or undertakings, but that would be a separate cause of action, and it does not appear to have been pleaded in the statement of claim.
[61] While I am not prepared to strike out the allegations relating to the retention of the $200,000 at this stage, and I have said that if the plaintiff wishes to pursue them they will have to be properly pleaded in an amended statement of claim, the plaintiff should understand that I am not saying that any such claims will necessarily succeed, or even that they will necessarily survive any further strike-out application the defendant might file. The situation is simply one where there is insufficient evidence to strike out the allegations. I set out my reasons for that view below.
[62] First, the undertaking given to Maxwell Pearce's solicitors (and possibly to the Court) relating to the $200,000 has not been produced in evidence before me. Nor has a joint memorandum apparently provided to this Court on the settlement of Maxwell Pearce's application to have the Public Trust appointed as administrator been produced, although it appears to have been shown to Judge McHardy at the hearing of the claims under the Act.
[63] Secondly, the text of Judge McHardy's judgment does appear to suggest that he may not have been aware of the payment of the $200,000 by the plaintiff (although why the plaintiff would not have drawn it to the judge's attention if he considered it relevant is not at all clear). Nor is it clear how the defendant could have had any responsibility for the fact that the undertaking relating to the $200,000 was apparently not shown to the judge (assuming it was not) — as I understand it, the plaintiff was representing himself at that stage.
[64] Those are potentially relevant facts that are not presently in evidence, and they make this aspect of the claim unsuitable for any determination on it against the plaintiff. The plaintiff should be given an opportunity to re-plead his case on this issue if he so wishes.
[65] Before I leave this issue, I add that any amended claim the plaintiff may file cannot be based or rely on alleged breach by the defendant of s 15 of the Administration Act. First, and most obviously, the section was repealed over 25 years before the events with which this litigation is concerned occurred, and the defendant could not have been bound by it. But even if that were not the position, the undertaking apparently provided in this case could not (on the basis of such evidence as is presently available to me) have qualified as an "administration bond" to which the section applied. A bond or security under s 15 was required only where the grant of administration was other than a grant of probate. In this case, the grant of administration to the plaintiff was a grant of probate.
Issue (5) — Does the plaintiff have an arguable claim against the defendant for recovery of all or part of the legal costs paid to or deducted by Ellice Tanner?
[66] There is no clear claim for costs in the statement of claim, and the provisional pleading (under which the plaintiff says that at some unstated time in the future he will personally decide whether or not Ellice Tanner's costs were reasonable) cannot stand. However, I note that in his affidavit opposing the strike-out application the plaintiff says that he does now wish to make a costs claim (for $3,500).
[67] He will have the opportunity to replead his claim on the issue of the defendant's alleged wrongful retention of the $200,000, and if part of any damage claimed to have been caused by the retention of the money consists of Ellice Tanner costs, a costs recovery claim may be possible. But the plaintiff will need to plead a proper basis for the claim, stating how the alleged breach of duty by Mr Ellice relating to the retention of the $200,000 is said to have caused him loss by way of costs.
Result
1.The plaintiff has no reasonably arguable cause of action based on alleged lack of jurisdiction in the Family Court to make the orders under the Act that it made, and nor does he have any reasonably arguable cause of action based on alleged breach by the defendant or his firm of any duty to the plaintiff in distributing the estate funds in accordance with the judgment of the Family Court following the resolution of the claims under the Act. Nor does he have any reasonably arguable cause of action based on the payment out by the defendant (or his firm) of the various costs orders that were made.
2.To the extent the statement of claim pleads other causes of action, it still does not in my view comply with the High Court Rules. Distinct causes of action, founded on separate and distinct facts, are not stated separately and clearly (contrary to r 5.17), and the statement of claim contains allegations of evidence and contentions of law that should not appear in a statement of claim. It contains apparently irrelevant matter (for example, the allegations relating to Mr Young at paragraph 6), and matters that have not been adequately particularised (for example, the reference to the "captured monies"). Taken with the matters referred to at 1 above, I am satisfied that the statement of claim as a whole is an abuse of process. I make an order striking it out.
3.While the statement of claim has been struck out, I do not make an order dismissing the proceeding as a whole. Leave is granted to the plaintiff to file and serve, within 30 working days of the date of this judgment, an amended statement of claim alleging wrongful and/or delayed retention of the $200,000 paid by the plaintiff into the Ellice Tanner trust account on or about 2 February 2010, if he wishes to do so. Any such amended statement of claim will need to comply with paragraph [59] of this judgment, and it is not to include any allegation that Judge McHardy did not have jurisdiction to make the awards he made under the Act, or that the defendant or his firm breached any duty to the plaintiff when the defendant or his firm distributed the estate funds from the Ellice Tanner trust account.
4.The defendant having succeeded with the strike-out application, I make an order in his favour for costs on a 2B basis, plus disbursements as fixed by the Registrar.
Associate Judge Smith
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