Sayes v Sayes
[2012] NZCA 196
•16 May 2012
| IN THE COURT OF APPEAL OF NEW ZEALAND |
| CA218/2012 [2012] NZCA 196 |
| BETWEEN MICHAEL WENTWORTH SAYES |
| AND GERRARD WENTWORTH SAYES |
| AND PRUDENCE JANE TAMATEKAPUA |
| AND SHELLEY ANN SAYES |
| AND JULIE BELLE GREER |
| AND KENSINGTON SWAN |
| AND WALTERS WILLIAMS AND CO |
| AND KENNETH JOHN CROSSON AND JOHN BEVAN |
| AND NIGEL GREER AND MATTHEW CARSON |
| AND COLIN JAMES WRIGHT |
| AND SAYES FAMILY TRUSTEE COMPANY LIMITED |
| Hearing: 8 May 2012 |
| Court: Arnold, Ellen France and White JJ |
| Counsel: Applicant in person |
| Judgment: 16 May 2012 at 3 pm |
JUDGMENT OF THE COURT
AThe application for an extension of time to appeal is dismissed.
BThe application for leave to adduce evidence of the deed dated 24 October 2008 in support of the proposed appeal is dismissed.
CThe application for waiver of privilege is dismissed.
DThe applicant must pay the first, third, fourth and tenth respondents costs for a standard application on a band A basis and usual disbursements.
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REASONS OF THE COURT
(Given by Ellen France J)
Introduction
This is an application under r 29A of the Court of Appeal (Civil) Rules 2005 (the Rules) for an extension of time to appeal the decision of Lang J relating to the distribution of assets of an estate.[1] In addition, the applicant seeks leave under r 45 of the Rules to adduce further evidence in support of the proposed appeal.
Background
[1] Sayes v Tamatekapua HC Auckland CIV-2007-404-516, 2 March 2011.
In February 2007, Gerrard Sayes brought proceedings in the High Court relating to the distribution of assets acquired during their lifetimes by his parents, Beau and Peggy Sayes. Gerrard Sayes is the applicant’s brother. Shelley Sayes, the third respondent, and Julie Greer, the fourth respondent, are the siblings of Gerrard and the applicant. All three of Gerrard’s siblings were parties to the proceedings.
At the time of their deaths, the assets of Beau and Peggy Sayes were owned by different entities. Those entities included various trusts. The then trustees of the trusts, Prudence Tamatekapua (the second respondent), Shelley Sayes, Julie Greer, and the Sayes Family Trustee Company (the tenth respondent), were joined as defendants to the proceedings in their capacity as trustees.
In June 2008, the applicant filed a counterclaim against Gerrard Sayes and cross-claims against some of the other defendants.
Attempts were made to resolve matters at a judicial settlement conference in June 2008. All parties to the proceedings, apart from the applicant, entered into a deed of settlement dated 27 June 2008 (the June Deed). The settlement meant the only outstanding issues for the trial set down for 10 November 2008 were the applicant’s counterclaim and various cross-claims.
On 24 October 2008, four parties[2] who faced the counterclaim or cross-claims entered into a deed setting out how they would apportion liability if the applicant was successful in any of his claims (the October Deed).
[2] Gerrard Sayes, Shelley Sayes, Julie Greer, and Prudence Tamatekapua.
The trial began on 10 November 2008. Towards the end of the hearing, the parties asked that the earlier settlement conference (June 2008) be reconvened. That resulted in a further settlement deed of 18 November 2008 (the November Deed). That Deed recorded the agreement of all parties, including the applicant, to be bound by the June Deed except to the extent it was varied by the November Deed. There was no reference in the November Deed to the October Deed.
As part of the terms of the November Deed, directions were sought under the Trustee Act 1956 authorising the trustees to act in accordance with the June and November deeds. Lang J gave directions accordingly on 21 November 2008.[3] Further directions were sought in December 2009 following issues about the interpretation and implementation of the deeds. A hearing was held to consider the application for directions on 2 March 2011 at which the parties were given the opportunity of filing evidence. Lang J issued an oral judgment on 2 March 2011.[4]
[3] Sayes v Tamatekapua HC Auckland CIV-2007-404-516, 21 November 2008.
[4] Sayes v Tamatekapua, above n 1.
On 29 March 2011, Gerrard Sayes filed an appeal in this Court against one aspect of Lang J’s judgment of 2 March 2011. The point raised by Gerrard’s appeal relates to whether a property to be transferred to the applicant should be valued exclusive or inclusive of GST. The appeal by Gerrard Sayes was set down to be heard on 29 March 2012. The hearing was adjourned after the applicant said he wanted to seek an extension of time to file an appeal against the judgment of Lang J of 2 March 2011. The applicant duly filed an application for an extension of time to appeal, together with an application to adduce new evidence.
The applications in issue
As expressed in the application for an extension of time to appeal, the applicant’s proposed appeal would relate to the treatment of an additional payment of $417,000 to the applicant. This payment arises from the November Deed. In that Deed, the parties agreed as follows:
3.After payment of the costs of administration and distribution, [the applicant] shall be entitled to receive an additional sum of $417,000 (“the additional payment”).
4.The additional payment will not be counted as part of [the applicant’s] share of the Sayes family assets under the June deed and the additional payment will not be counted as part of the pool of Sayes family assets for equal distribution to [the applicant], Gerrard, Shelley and Julie under the June deed.
In the High Court, the applicant argued that the effect of these two clauses was that the applicant’s three siblings would meet the payment of $417,000 out of their respective shares of the estate. Lang J rejected that submission. The Judge said the effect of cl 3 was that the trustees are required to pay the costs of administering and distributing the estate. They are then to make a payment to the applicant of $417,000. After that, the remaining pool of assets is to be distributed equally between the four children.
On appeal, the applicant wants to argue that when the October Deed is taken into account, it becomes plain Lang J’s approach to the interpretation of cls 3 and 4 of the November Deed is wrong.
The applications are opposed by the first, third, fourth and tenth respondents. In addition, the first respondent seeks an order for waiver of privilege between the applicant and his former solicitor, Debra Law. The first respondent also sought a direction that Ms Law provide an affidavit.
The application to adduce new evidence
We deal with the application to adduce new evidence first, given the reliance on that evidence to support the proposed appeal.
The new evidence
The evidence the applicant wants to adduce is the October Deed. As we have foreshadowed, that was entered into by Gerrard Sayes, Shelley Sayes, Julie Greer, and Prudence Tamatekapua. The October Deed sets out how those four will share any liability to the applicant. Accordingly, the operative part of the Deed states:
In the event that any of [the applicant’s] cross-claims should succeed, and if [the applicant] is held … to be entitled to receive more than he would have received if he had executed the June Deed …, then … The total amount of [the applicant’s] excess entitlement shall be divided equally between the parties …”.
Should leave be granted to adduce this evidence?
The applicant says he assumed the October Deed was before Lang J. That is because his then counsel (not Ms Law) told him the whole file would be available to Lang J. The applicant also submits that the October Deed provides a clear mechanism for dealing with the payment to him of $417,000.
The respondents say the evidence is neither fresh nor cogent.
Discussion
The requirements of r 45 of the Rules are that the new evidence is fresh, credible and cogent. The evidence is not fresh if it could, with reasonable diligence, have been adduced at the hearing in the High Court.[5] In Rae v International Insurance Brokers (Nelson Marlborough) Ltd the point was made that while an absence of freshness was not “an absolute disqualification”, the grounds for admission in those circumstances “must be very strict”.[6]
[5] Erceg v BaleniaLtd [2008] NZCA 535 at [15].
[6]Rae v International Insurance Brokers (Nelson Marlborough) Ltd [1998] 3 NZLR 190 at 193 per Tipping J delivering the judgment of Richardson P and Tipping J.
The October Deed is not fresh evidence. The applicant accepts he knew about it at the time he entered into the November Deed. Indeed, in one of his affidavits in support of the present applications, he says all parties “were mindful” of the October Deed at the time of consideration of the November Deed.
We do not consider there is a basis for admitting the evidence which would overcome the lack of freshness. Presumably the argument on appeal would be that the October Deed was a part of the factual matrix surrounding the November Deed.[7] We make that assumption because, on its face, the October Deed deals only with a situation that never transpired. Furthermore, to the extent earlier Deeds were seen as relevant, they were referred to in the November Deed. There was an express reference to the June Deed but no mention of the October Deed. Finally, the applicant’s argument does not appear to take account of the sequence of events envisaged on the wording of cls 3 and 4 of the November Deed.
[7] Vector Gas Ltd v Bay of Plenty Energy Ltd [2010] NZSC 5, [2010] 2 NZLR 444.
Accordingly, we decline to admit the October Deed.
Should we extend time for filing the appeal?
The test for whether an extension of time to appeal should be granted under r 29A is as expressed in My Noodle Ltd v Queenstown-Lakes District Council in which this Court said there were a number of factors relevant to the decision including:[8]
... the reason for the delay, the length of the delay, the conduct of the parties and the extent of any prejudice caused by the delay: New Plymouth District Council v Waitara Leaseholders Association Incorporate [2007] NZCA 80 at [22]. The overall test, however, is whether granting an extension would “meet the overall interests of justice”: Havanaco Ltd v Stewart (2005) 17 PRNZ 622 at [5] (CA).
[8]My Noodle Ltd v Queenstown-Lakes District Council [2009] NZCA 224, (2009) 19 PRNZ 518 at [19].
The delay in this case is significant, over a year. We agree with the respondents that the explanation advanced for this delay is inadequate. The applicant says he instructed Ms Law to appeal. However, in the application filed in this Court by a new solicitor, the delay is explained on the basis the applicant’s ill-health meant he was unable to instruct counsel to consider his appeal rights in the period immediately after the decision of Lang J of 2 March 2011.[9] Part of the explanation for this inconsistency may lie in the lack of clarity about exactly when it was the applicant says he instructed Ms Law.
[9]The submissions of counsel in support of the application to extend time re-state the applicant’s position that he instructed Ms Law to appeal.
We interpolate here that the applicant’s statement that he had instructed Ms Law to appeal gave rise to the application by Gerrard Sayes for waiver of privilege and a direction that Ms Law file an affidavit as to her recollection of events. The first respondent argues that the applicant’s disclosure of communications between himself and Ms Law amounts to waiver of privilege.
A direction was made prior to the hearing that Ms Law should file an affidavit. She did that. Copies were not served on any of the parties as Ms Law was anxious that the issue of waiver of privilege be determined first. At the hearing, we sought to clarify the applicant’s position on waiver. He initially advised that his only concern related to any disclosure of other legal advice or instructions. However, once we arranged for the applicant to be shown a copy of Ms Law’s affidavit, he indicated he was not in a position to deal with this issue.
In the event, we have not found it necessary to determine the question of privilege or to refer to the affidavit.[10] We have not had to deal with these matters because the inconsistencies in the other material before the Court on their face raise questions about the adequacy of the explanation for such a lengthy delay. On this basis, we formally dismiss the application for waiver of privilege.
[10]To the extent there is any conflict between the two affidavits on the issue of instructions, resolution of that would involve questions of credibility which we could not determine in this context.
As to the merits of the proposed appeal, the decision to decline to admit the October Deed is determinative. The applicant’s proposed appeal in relation to the means of distributing the $417,000 payment is based on the October Deed.
The other matter relevant to the overall assessment of the interests of justice is the question of prejudice. The respondents raised prejudice as a basis for their opposition to the application for an extension of time. We discussed with counsel how the addition of an appeal on the question of the means of distributing the $417,000 could affect matters given Gerrard Sayes’ appeal would be before the Court anyway. Further, there is an outstanding claim by the applicant’s wife which we understand affects the ability of the trustees to make a final distribution. However, at the hearing, the applicant confirmed that he now wanted to expand his proposed appeal to cover other matters. These other matters were not foreshadowed in the application for an extension of time. Rather, in his affidavit supporting the application, the applicant said he had sought legal advice and accepted the advice that there was only one ground, that relating to the payment of $417,000, he ought to advance.
The new grounds were only raised in the applicant’s memorandum filed the day before the hearing (apparently without the assistance of a lawyer). It is plain that if the current appeal before the Court was expanded to deal with these other matters (such as property valuation and the question of interest), that will prejudice the other parties to this application and, indeed, all parties to the proceedings. That is because there would inevitably be delay in hearing the appeal and additional costs. The trustees, for example, took the position they would abide the decision of the Court on the appeal by Gerrard Sayes but some of these new matters would require their active involvement. That would have costs implications for all the beneficiaries as we were advised the trustees’ costs are met by the estate.
When we take into account the lengthy delay and the inadequacies of the explanation for delay of that length, the lack of merit in the proposed appeal given its reliance on the October Deed, and the prejudice to all parties arising from an expanded appeal, we have concluded it is not in the interests of justice to extend time for the filing of the appeal.
Result
For these reasons the application for an extension of time to appeal is dismissed. The application for leave to adduce evidence of the October Deed in support of the proposed appeal is dismissed. We also formally dismiss the application for waiver of privilege.
Finally, the applicant must pay the first, third, fourth and tenth respondents costs for a standard application on a band A basis and usual disbursements.
Postscript
Gerrard Sayes’ appeal can now be set down for hearing. If the applicant wishes to be heard on that appeal, he will need to file submissions in a timely manner.
Solicitors:
Barter & Co Ltd, Auckland for First Respondent
Tamatekapua Law, Auckland for Second Respondent
Glaister Ennor, Auckland for Third, Fourth and Tenth Respondents
McElroys, Auckland for Fifth Respondent
Kennedys Solicitors, Auckland for Sixth Respondents
Davenports City Law, Auckland for Seventh Respondents
Carson and Co, Auckland for Eighth Respondents
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