PRISCILLA ANN TE ARAHURA BEANEY and RA HAPATI HARDING s AND MOREHU BUCKLEY

[2024] NZHC 2697

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2024-404-000440

[2024] NZHC 2697

UNDER

Part 19 of the High Court Rules 2016 and subpart 5 and 6 of the Property Law Act 2007

IN THE MATTER OF

An originating application for orders for the sale of the property at 9 Franklyne Road, Otara, Auckland and the division of proceeds amongst co-owners

BETWEEN

PRISCILLA ANN TE ARAHURA

BEANEY and RA HAPATI HARDING
Applicants

AND

MOREHU BUCKLEY

Respondent

Hearing:

8 August 2024

Appearances:

T D Bloy for the Applicants

A C-N Fuiava and S Ghil for the Respondent

Judgment:

18 September 2024

JUDGMENT OF TAHANA J

This judgment was delivered by me on 18 September 2024 at 11.00am Pursuant to Rule 11.5 of the High Court Rules

…………………………

Registrar/Deputy Registrar

Solicitors/Counsel:

Evolution Lawyers, Auckland Denham Bramwell, Auckland

BEANEY v BUCKLEY [2024] NZHC 2697 [18 September 2024]

Background

[1]                 Ms Buckley is the half-sibling of the applicants. They share the same mother, Ms Priscilla Harding.

[2]                 Ms Buckley obtained her 3/20 share in the Property pursuant to a settlement agreement with Ms Harding dated 9 March 2011 (the Settlement Agreement). The Settlement Agreement resolved a previous proceeding (CIV-2010-404-1945).

[3]Under the Settlement Agreement:

(a)Ms Buckley was granted the right to occupy the Property as “tenant for her life” on terms that included that she pay $260 per week until the mortgage  had  been  fully  repaid  and  then  pay  that  amount  to   Ms Harding; and

(b)Ms Buckley’s occupancy right was on the terms of the “Residential Tenancy Agreement” dated 2 June 1991 (the Tenancy Agreement) annexed to the Settlement Agreement.

[4]                 Ms Harding passed away. Under her will, her estate is to be divided equally between ten of her eleven children, nine of whom are still alive (including the applicants). Ms Buckley was excluded, and Ms Harding’s will refers to the earlier proceeding as the reason for that exclusion.

[5]The mortgage was repaid, and Ms Buckley started paying rent.

[6]                 From 10 February 2023, Ms Buckley’s rent payments for the Property ceased. Work and Income New Zealand (WINZ) notified Ms Buckley on 9 March 2023 that her rent payments had been rejected because the recipient bank account had been closed. Ms Buckley then started making payments of $260 per week to Auckland Council for the rates owing for the Property.

[7]                 On 7 July 2023, the applicants’ solicitors wrote to Ms Buckley requesting a copy of the Tenancy Agreement, demanding payment of the rental arrears by 19 July

2023, and threatening to take steps to cancel the Tenancy Agreement. The letter also indicated that the applicants wished to sell the Property or purchase Ms Buckley’s 3/20 share.

[8]                 On 3 August 2023, the applicants’ solicitors served a notice dated 31 July 2023 on Ms Buckley:

(a)demanding $2,240 (being rental arrears for the period from 10 February to 27 July 2023 less the monies she had paid to Auckland Council and Watercare); and

(b)giving notice that unless the rent arrears were paid within ten working days, they intend cancelling her licence to occupy in accordance with s 244 of the PLA.

[9]                 Ms Buckley engaged counsel who  wrote  to  the  applicants’  solicitors  on 18 August 2024 requesting confirmation of the bank account for payment of rent and requesting information as to insurance for the Property.

[10]            Ms Buckley continued to pay $260 to Auckland Council until November 2023 and then commenced paying $260 per week to an account nominated by the applicants. Ms Buckley understands that she is in arrears for rental for two weeks in March 2023 and two weeks in December 2023. She has been paying an additional $50 per week to repay those arrears.

Relevant law

[11]Originating applications are governed by Part 19 of the HCR. Rules 19.2 to

19.4 specify the types of applications that must be made by originating application. The specified types do not include an application under s 339 of the PLA.

[12]            Under r 19.5, the Court may, in the interests of justice, permit a proceeding not mentioned in rr 19.2 to 19.4 to be commenced by originating application.

Analysis

[13]            The applicants claim that Ms Buckley has breached the Settlement Agreement by failing to pay rent when due. They allege that her licence to occupy has been cancelled in accordance with the PLA. The applicants rely on the cancellation of the licence to occupy and argue that it is appropriate that they be able to commence their application under s 339 of the PLA by way of originating application.

[14]            While an application under s 339 of the PLA is not specified in r 19.2 to 19.4, the applicants note that under r 20.13(1)(u) of the District Rules 2014 an application under s 339 of the PLA must be commenced by way of originating application. They argue that this supports granting the application. This Court is bound by the HCR, so it is necessary to consider how the Court has approached applications under s 339 of the PLA in the context of r 19.5.

[15]            The interests of justice require that the Court consider the overriding objective of the HCR under r 1.2, being the just, speedy and inexpensive determination of a proceeding.1

[16]            The Court in Bool v Hammond noted that applications to bring proceedings under s 339 by originating application go both ways.2 When considering whether it is in the interests of justice, the Court must focus on “what the issues in dispute in the proceeding seem to be, and the most appropriate procedural pathway for determining them… ”.3

[17]            In Hong Kong and Shanghai Banking Corp Ltd v Erceg, Asher J considered the type of proceeding that is suited to the originating application procedure:4

These cases show that the type of proceeding suited to the originating application procedure is a straightforward application, not requiring detailed pleadings or interlocutory orders for its fair resolution. Such a type of proceeding tends to be an application under a specific statutory provision, where the issue that arises can be clearly defined, and the issues confined. The procedure is not well suited to the determination of substantive rights

1      Solar Bright Ltd v Martin [2019] NZHC 300 at [18] and [26].

2      Bool v Hammond [2021] NZHC 2749 at [12].

3      Clarkson v Clarkson [2020] NZHC 2211 at [17].

4      Hong Kong and Shanghai Banking Corp Ltd v Erceg (2010) 20 PRNZ 652 (HC) at [25].

involving the application of common law doctrines as distinct from statutory tests. It is not well suited to cases involving multiple parties, and cases where there is the possibility of cross-claims or counterclaims.

[18]            The applicants argue that unlike Bool v Hammond, this case does not involve uncertain arrangements following separation, material factual disputes, multiple parties living on the property, or an agreement that requires disputes to be resolved by arbitration. Nor does it involve undocumented or yet-to-be determined interests in the Property.

[19]            The applicants’ claim requires the Court to interpret the rights and obligations conferred on Ms Buckley and the estate under the Settlement Agreement. Those rights and obligations have not previously been determined. There is the added complexity of Ms Buckley indicating that she may wish to counterclaim against the estate. This is not therefore an application that only turns on a specific statutory provision.

[20]            The applicants then argue that there are no other potential parties. The beneficial interests of the estate are held by nine people. While eight of those people support the application, the position of the other beneficiary is unknown. They have a legitimate interest in the proceeding and may wish to be heard.

[21]            The application depends on a breach of the Settlement Agreement. Determination of that issue involves the application of common law doctrines and is separate to the matters that must be considered under s 342 of the PLA when determining whether to make orders for sale under s 339. This is not a straightforward application for the sale of property owned by co-owners. Here, there is the added complexity  of  the  Settlement  Agreement  which   in   turn   refers   to   the Tenancy Agreement.

[22]            The applicants argue that there is no issue as to the validity of the cancellation of Ms Buckley’s right to occupy the Property. Ms Buckley’s notice of opposition identifies as an issue whether the tenancy arrangement was “cancelled lawfully by the applicants, remains in effect, or has been varied by agreement”. Those issues will therefore need to be determined by the Court.

[23]            Ms Buckley has also indicated that she may bring a counterclaim against the estate for breach of the Settlement Agreement. It may therefore be necessary to determine the estate’s obligations under the Settlement Agreement. That requires that any claim or counterclaim be pleaded and particularised. That may not necessarily require extensive evidence, but it will require pleadings.

[24]            The respondent has also indicated that her defence or counterclaim may require expert evidence on tikanga. While that evidence could be brought by way of affidavit, if the evidence is contested, the Court will need to hear the evidence.

[25]            I am not satisfied that this proceeding is a straightforward claim under s 339 of the PLA as it requires determination of  rights  and  obligations  under  the Settlement Agreement and it may also require determination of a counterclaim which will need to be pleaded.

[26]            I acknowledge that the interests of justice require that unnecessary costs be avoided but that needs to be balanced against the suitability of the proceedings to the originating application process. There are a number of issues in contest and there is the possibility of a counterclaim. There is also Ms Buckley’s wish to call tikanga evidence as to the nature of her rights under the Settlement Agreement. This is not the type of proceeding that is appropriately determined by way of originating process. Pleadings will enable the issues in dispute to be defined.

Result

[27]            For the reasons above, I decline the application for leave to commence the proposed proceeding by originating application.

Tahana J