Sayes v Tamatekapua
[2016] NZHC 2463
•17 October 2016
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2007-404-516 [2016] NZHC 2463
BETWEEN GERRARD WENTWORTH SAYES
Plaintiff
AND
PRUDENCE JANE TAMATEKAPUA First Defendant
SHELLEY ANN SAYES Second Defendant
JULIE BELLE GREER Third Defendant
KENSINGTON SWAN Fourth Defendant
WALTERS WILLIAMS & CO Fifth Defendant
KENNETH JOHN CROSSON AND JOHN BEVAN
Sixth Defendants
NIGEL GREER AND MATTHEW CARSON
Seventh Defendants
COLIN JAMES WRIGHT Eighth Defendant
MICHAEL WENTWORTH SAYES Ninth Defendant
SAYES FAMILY TRUSTEE COMPANY LIMITED
Tenth Defendant
Hearing: 17 October 2016 Appearances:
A C Sorrell for plaintiff
H M McKee for second, third and tenth defendants in their capacities as trustees
Michael Sayes (by written submissions)
SAYES v TAMATEKAPUA [2016] NZHC 2463 [17 October 2016]
Judgment: 17 October 2016
(ORAL ) JUDGMENT OF LANG J [on application by trustees for directions in relation to distribution of trust assets]
[1] This proceeding was originally filed on 5 February 2007. In a series of judgments issued over the following nine years the Court has endeavoured to assist the four children of the late Beau and Peggy Sayes to resolve their differences so that the assets acquired by their parents could be distributed. The history of the proceeding and the issues that have been raised can be tracked through judgments
delivered on 21 November 2008, 2 March 2011, 8 April 2014 and 26 May 2015.1
[2] The four children are Gerrard, Julie, Michael and Shelley (the beneficiaries). They have agreed that the assets acquired by their parents should be distributed to them in accordance with a deed of settlement signed in June 2008 and orders made by consent on 21 November 2008. Each of the beneficiaries has elected to retain parcels of real estate in part satisfaction of his or her entitlement under the settlement. The settlement provided for those properties to be valued by a firm of registered valuers, and for the entitlement of each beneficiary under the settlement to be reduced by the value ascribed to any property retained by that beneficiary.
[3] All of the properties that the beneficiaries wish to retain have now been transferred into their respective names. The remaining assets have been sold. As a result, and subject to receipt of one further payment to be made by Gerrard, the trustees are now in a position to make a final distribution of the trust assets.
[4] Before making that distribution, however, the trustees seek directions regarding the manner in which they should distribute the interest that has been earned in respect of trust assets over the last ten years.
The issue
[5] As part of his entitlement, Gerrard elected to retain a property situated at 15
Woolley Street, Woolley’s Bay. Gerrard has also retained three other properties, being those situated at 63 Creightons Road, 295 Remuera Road and 3 Norana
Avenue. The transfer of the Woolley’s Bay property into Gerrard’s name means that
1 Sayes v Tamatekapua HC Auckland CIV-2007-404-516, 21 November 2008; Sayes v
Tamatekapua HC Auckland CIV-2007-404-516, 2 March 2011; Sayes v Sayes [2014] NZHC
720; Sayes v Tamatekapua [2015] NZHC 1142.
he has received assets having a value of approximately $500,000 more than his entitlement under the settlement. He will therefore need to pay that sum to the trustees so that they can make a final distribution to the beneficiaries. Gerrard has yet to make that payment because the trustees cannot calculate the amount of the payment Gerrard is to make. In order to calculate the payment they need to know how they are to distribute the interest earned by trust assets up until the date of distribution.
[6] In an oral judgment delivered on 2 March 2011, I held that the trustees were required to divide all interest earned on trust assets equally between the four children.2 I made that direction because I considered that such interest constituted an asset forming part of the general pool of assets falling for division between the children in accordance with the terms of the settlement. As I was delivering my judgment, however, Julie raised an issue as to whether the three children other than
Gerrard should receive interest on the sums they will ultimately receive under the settlement. Julie did not consider Gerrard should receive interest in respect of his entitlement because he is required to contribute funds in order to give effect to the settlement.
[7] I specifically left that issue open for resolution between the parties or for further determination by the Court. The trustees have been unable to resolve the issue by agreement, and now seek directions as to how they should distribute the interest earned on trust assets prior to the date of distribution.
[8] As an alternative solution, and because it would be simpler to calculate and administer, Julie has now suggested that she, Michael and Shelley (but not Gerrard) should share equally in the interest that the trust assets have earned. Michael sides with Julie on that issue. Gerrard opposes Julie’s proposal and contends that he ought to share equally with his siblings in any interest earned on trust assets.
[9] The trustees initially provided the Court with two schedules to reflect the position in the event that Gerrard shares in interest earned and in the event that he
does not. Schedule A reflected the position in the event that Gerrard shares in
2 At [43] and [44].
interest earned whilst Schedule B reflected the position in the event that he does not. In both schedules the calculations proceeded on the basis that the trustees will retain the sum of $150,000 to meet the costs of the present application and the future administration of the estate. Schedules A and B have now been replaced by updated schedules annexed as Exhibits “C” and “D” respectively to the affidavit of Stephanie Lau sworn on 23 September 2016.
Issues raised by Michael
[10] Michael has raised numerous issues informally in emails and memoranda sent to the Court prior to this hearing. I have already determined many of the issues that Michael now seeks to raise in earlier judgments. It is now too late for Michael to raise such issues again. Furthermore, I made it clear in Minutes issued on 29 June and 26 August 2016 that I would not be dealing with those issues in the context of the present application.
[11] I also record that in communications sent to the Court prior to the hearing Michael asked the Court to adjourn the application because he has only recently returned from a three month trip overseas. He said the hearing today would not give him adequate time to prepare. I did not accept Michael’s argument on this point. The only issue I am required to decide today is that relating to the distribution of interest. This is a very narrow issue, and one that Michael should have had little difficulty in responding to following his return to New Zealand on 12 October 2016.
[12] Michael ultimately did not appear at the hearing but he filed submissions on
14 October 2016. These comprise 21 pages, of which just three lines relate to the application now before the Court.
[13] As a threshold argument Michael submits that the trustees have no ability to make the present application. That submission cannot be correct. As counsel for the trustees points out, trustees have the ability at any time to file an application seeking directions from the Court under s 66 of the Trustee Act 1956. The judgments that I delivered on 21 November 2008, 2 March 2011 and 8 April 2014 also reserved leave to the parties to return to the Court in the event that they required further directions.
Furthermore, I expressly left open the issue relating to the treatment of interest earned on trust assets in my judgment delivered on 2 March 2011.3
[14] The other issues that Michael raises do not relate to the application now before the Court. As a result, I have no jurisdiction to deal with them. I have endeavoured to meet Michael’s concerns on previous occasions by dealing with his arguments even though they did not strictly fall within the ambit of the particular application I was required to determine. I am not prepared to take the same approach in relation to the present application. In the past Michael has responded by immediately filing appeals to the Court of Appeal that he subsequently fails to prosecute. This inevitably creates further delay and expense.
[15] Michael’s siblings have waited long enough to receive their respective entitlements under the settlement that they reached eight years ago. I do not propose to provide Michael with the means by which to file yet another appeal against decisions that I am not formally required to make. I therefore decline to deal with the remaining issues he has raised.
[16] I record further that any appeal Michael might file against this judgment does not have the effect of staying execution of the judgment.4
Decision
[17] I consider the answer to the sole issue I am required to decide lies in the fact
that the trustees did not transfer the Woolleys Bay property into Gerrard’s name until
23 December 2015. Up until that point it remained a trust asset. Furthermore, Gerrard could have renounced his election to retain the Woolleys Bay property at any time up until it was transferred into his name. Had that occurred, the property would have been sold and the proceeds of sale divided equally between the four children. For that reason Gerrard’s entitlement under the settlement remained in credit until 23
December 2015. Thereafter, and in accordance with my judgment delivered on 2
3 At [46].
4 Court of Appeal (Civil) Rules 2005, r 12(1).
March 2011, Gerrard must pay interest on the outstanding amount at the rate of 3.5 per cent per annum.5
[18] I am therefore satisfied that it would not be appropriate to approve Julie’s amended proposal. Rather, interest should be distributed equally between all four beneficiaries. For that reason I direct the trustees to distribute the trust assets to the beneficiaries in accordance with Schedule A to the trustees’ application as subsequently amended by the schedule annexed as Exhibit “C” to Ms Lau’s affidavit. The sums to be distributed are to be calculated in accordance with those schedules but taking into account interest earned up until the date of distribution, legal costs in relation to the present proceeding and legal costs in respect of any appeal against this judgment.
Costs
[19] Mr Sorrell submits that Gerrard should receive an award of actual and reasonable costs to be paid from trust assets. He points out that Gerrard was entitled to respond to the trustees’ application for directions, and relies on Carter v Caldis, in which the Court of Appeal very recently confirmed that the costs incurred by parties who participate in a proceeding to determine a genuine question relating to the terms
or administration of a trust are generally paid out of the trust fund.6 I accept this
submission. Gerrard’s actual and reasonable costs in relation to the present
application are therefore to be paid from the trust assets.
Lang J
Solicitors:
Barter Law, Albany Village
Glaister Ennor, AucklandCounsel:
G M Illingworth QC, Auckland
Copy to:Mr M Sayes
5 At [42].
6 Carter v Caldis [2016] NZCA 424 at [33], citing Re Buckton [1907] 2 Ch 406 (Ch) at 414 per
Kekewich J.