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Rutherford v Rutherford

Rutherford v Rutherford

Case [2015] NZHC 878 30 April 2015

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-000282 [2015] NZHC 878

IN THE MATTER OF
Section 145A of the Land Transfer Act

1952

BETWEEN

STEPHEN DEREK RUTHERFORD First Applicant

ANNE ELIZABETH RUTHERFORD Second Applicant

JENNIFER MARGARET RUTHERFORD

Third Applicant

AND

JOHN DAVID RUTHERFORD, JOYCE MARY RUTHERFORD AND MARK ROLAND WINGER AS TRUSTEES OF THE ESTATE OF RALPH KENNETH RUTHERFORD

Respondents

Hearing: 27 March 2015

Appearances:

K M Quinn for the Applicants
J E McLennan for the Respondents

Judgment:

30 April 2015

JUDGMENT OF WOOLFORD J

This judgment is delivered by me on Thursday, 30 April 2015 at 3.00 pm pursuant to r 11.5 of the High Court Rules.

..................................................... Registrar / Deputy Registrar

Solicitors/Counsel: Ayres Legal, Auckland Holmden Horrocks, Auckland K Quinn, Auckland

RUTHERFORD & ORS v RUTHERFORD & ORS [2015] NZHC 878 [30 April 2015]

Facts

[1] Mr and Mrs Rutherford purchased a property together in 2009. They each owned a half share in the house. Mr Rutherford died in 2011. In terms of his will, Mr Rutherford’s share in the property (the “residence interest”) was given to his executors and trustees on trust, to allow Mrs Rutherford to occupy, use or obtain income from it for the rest of her life. Upon the death or remarriage of Mrs Rutherford, the residence interest was to be bequeathed to the children of Mr Rutherford’s first marriage, as beneficiaries of his estate as a whole (the applicants).

[2] Mr Rutherford’s will also provided that the executors and trustees could sell the residence interest at Mrs Rutherford’s request and use the net proceeds to purchase a replacement residence which would be held in trust on the same terms. If, in purchasing a new property, there was a surplus of funds then the surplus was to be invested and the net annual income arising was to be given to Mrs Rutherford.

[3] Mrs Rutherford now wishes to sell the property and purchase a unit in a retirement village. However, the applicants, as final beneficiaries, have placed a caveat on the title of the property to prevent its sale. They say that the proposed sale will diminish the material value of the residence interest which they will ultimately receive. The executors and trustees (the respondents) challenge the caveat. The issue in these proceedings is whether the caveat should remain on the title.

Law

[4] If a caveator is able to show an arguable case for the existence of a legal or equitable interest sufficient to support a caveat, the caveat must generally remain on the title until the merits of the whole matter have been determined in substantive proceedings. In Orams Marine (Auckland) Ltd v Ports of Auckland Ltd, Ellis J said:1

Other cases in this Court Castle Hill Run Ltd v NZI Finance Ltd [1985] 2
NZLR 104; Holt v Anchorage Management Ltd [1987] 1 NZLR 108; and Shell Oil NZ Ltd v Wordcom Investments Ltd [1992] 1 NZLR 129 confirm that while consideration of the balance of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Rutherford v Rutherford

Details

AGLC: Rutherford v Rutherford [2015] NZHC 878
Case: [2015] NZHC 878
Decision Date: 30 April 2015

CaseChat Overview and Summary

The case of Rutherford v Rutherford involved a dispute between the applicants, who were the children of Mr Rutherford from his first marriage, and the respondents, who were the executors and trustees of Mr Rutherford's estate. The applicants sought to prevent the sale of a property owned by the estate, which was to be held in trust for Mrs Rutherford, Mr Rutherford's widow, for the rest of her life. The issue before the court was whether the caveat placed on the property title by the applicants should remain in place. The applicants argued that they had a vested interest in the property that would vest upon Mrs Rutherford's death or remarriage, and that this interest was sufficient to support a caveat. The respondents argued that the applicants' interest was a general interest in the residue of the estate and not a proprietary right in the specific property, and therefore could not support a caveat. The court found that the administration of the estate had ended, and that the residue of the estate, including the property, was being held on trust for the applicants. However, the court also found that the applicants' interest was not specific enough to support a caveat. The court held that a caveatable interest must be a fixed and ascertainable interest in land, and that the applicants' interest was too non-specific to be caveatable. The court also found that allowing the caveat to stand would frustrate the clear intent of the will, which was to allow Mrs Rutherford and the executors to deal with the property in ways that suited her needs before transferring it to the applicants. The application to sustain the caveat was therefore dismissed, and the caveat was ordered to be lapsed by the Registrar. Costs were awarded to the respondents on a 2B basis.

Orders