Sayes v Tamatekapua
[2015] NZHC 1142
•26 May 2015
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2007-404-516 [2015] NZHC 1142
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: 26 May 2015 Appearances:
H M McKee for trustees
M J Hickton-Burnett for Gerrard Sayes
Michael Sayes in personH Sumich for Maurine Sayes
SAYES v TAMATEKAPUA [2015] NZHC 1142 [26 May 2015]
Judgment: 26 May 2015
(ORAL) JUDGMENT OF LANG J [on sealing of orders]
[1] On 8 April 2014, I delivered an oral judgment in which I made several orders and directions relating to the distribution of assets belonging to estates and trusts associated with the late Beau and Peggy Sayes.1 In the same judgment I also made orders in relation to a proceeding brought by Mrs Maurine Sayes against Mr Michael Sayes under the Property (Relationships) Act 1976. That proceeding had earlier been the subject of a substantive judgment by Asher J.2 In that judgment Asher J directed Michael to pay Maurine the sum of approximately $1.5 million.
[2] After delivering my oral judgment I received memoranda from Mr Michael Sayes, and memoranda in response by other parties. I then issued a supplementary judgment on 13 May 2014 dealing with the issues raised in the memoranda to the extent I thought appropriate.3
[3] To date the parties have not sealed orders in relation to those judgments. It has been necessary for me to conduct a hearing today because they were unable to reach agreement regarding the form of the orders to be sealed.
[4] The purpose of this judgment is therefore to give directions in relation to the orders to be sealed.
The trustee proceedings
[5] Mr Michael Sayes has filed lengthy submissions dealing with numerous aspects of both my earlier judgments. To the extent that they seek to re-litigate issues already determined in those judgments, I put the submissions to one side. In several respects, however, Mr Sayes contends that the orders the trustees now propose to seal go beyond the terms of my earlier judgments.
Transfer of the Holdens Bay property to Michael Sayes
[6] Mr Sayes is concerned in particular that the trustees seek an order that they be permitted to transfer the property at 106 Holdens Road, Clevedon to him subject
1 Sayes v Sayes [2014] NZHC 720.
2 Sayes v Sayes [2014] NZHC 936.
3 Clark v S Clark & Clark Family Trustee Co Ltd [2012] NZHC 3159.
to a notice of claim lodged by Mrs Maurine Sayes against the title to the property.4
He submits that the trustees have an obligation to deal with the assets in accordance with the various deeds of settlement and orders of the Court that have been made to date. None of these contemplated the property being transferred to Mr Sayes subject to the notice of claim. As a result, Mr Sayes contends that he will be receiving an asset worth substantially less than was contemplated at the time the parties entered into the deeds of settlement and the Court made orders as a consequence.
[7] I do not accept this submission. The parties have always agreed that Michael would receive the Holdens Road property, and that it was to be ascribed the value of
$4.311 million for the purposes of calculating his share in the pool of assets. In order to transfer the property to Michael, it is necessary for the trustees to deal with the fact that Maurine Sayes has lodged a notice of claim against it to protect her interest in it under the Property (Relationships) Act. Asher J recognised that interest in his judgment. As a result, it is not open to me to make any order directing that the notice of claim be removed.
[8] In order to transfer the property to Michael, it will be necessary for the trustees either to persuade Maurine to remove her notice of claim or to transfer the property to Michael subject to the notice of claim. The trustees have chosen the latter approach. I do not consider they can be criticised for that, because they could not reasonably anticipate that Maurine would remove her notice of claim in order to enable the transfer to be registered.
[9] In my judgment delivered on 8 April 2014 I expressly reserved leave to all parties to seek further directions from the Court in the event that these were necessary to implement the directions given in the judgment.5 In order to implement the direction that the trustees transfer the Holdens Road property to Michael, it is now necessary to make an order that enables the direction to be given effect. A direction that the property be transferred to Michael subject to the notice of claim
will enable the transfer to be registered and thereby given effect notwithstanding the existence of the notice of claim.
[10] I am satisfied that the proposed order falls within the scope of the leave reserved to the parties. I therefore direct that the order be sealed in a form that permits the trustee to transfer the property to Michael subject to the existing notice of claim lodged by Maurine.
The GST issue
[11] Michael does not oppose the wording used in the proposed clause providing that the sums contributed by the beneficiaries to meet the GST obligations of the Sayes Family Trust in relation to the Holdens Road property are not be included within the assets to be distributed by the trustees.6 He has wider concerns, however, regarding the GST obligations of the Sayes Family Trust and in particular the taxation consequences of the transfer of the Holdens Road property to him.
[12] This issue was not the subject of any specific direction or order in either of my judgments. I therefore do not consider that any specific provision needs to be inserted in the sealed orders to deal with it.
The addition of Colin James Wright as an applicant in respect of the application for an order removing the caveat lodged by Michael Sayes against the title to the Holdens Road property
[13] Mr Sayes also objects to the proposed order adding Mr Colin James Wright as an applicant in respect of the application by the trustees for an order that a caveat lodged by Mr Michael Sayes against the title of the Holdens Road property be removed.7 Mr Sayes points out that neither of my judgments dealt with that issue. Mr Sayes is correct in that submission.
[14] An application was before me on 8 April 2014 for the order adding Mr Wright as an additional applicant. It was necessary to appoint Mr Wright as an applicant because he is currently the registered proprietor of the Holdens Road property. The trustees filed a document prior to the hearing confirming that they had spoken to Mr Wright, and he had consented to being added as an applicant.
[15] I made an oral order during the course of the hearing granting the application. Unfortunately, however, I omitted to include that order in the judgment that I dictated at the conclusion of the hearing. This Court has limited power to recall judgments to the extent necessary to rectify slips caused by inadvertence or omission. I consider that it is entitled to exercise that power in the present case to make an order adding Mr Colin James Wright as an applicant in relation to the caveat application. I therefore approve the provision in the draft orders to that effect.
[16] The remaining issues that Michael raises largely sought to re-litigate issues already determined. For that reason, as I have already recorded, I put them to one side for present purposes.
Approval of orders
[17] I therefore approve orders being sealed containing the following provisions:
a) The trustees are directed to distribute the assets of the Lucerne Family Trust, the Sayes Family Trust and the estates of Beau and Peggy Sayes in accordance with the deeds of settlement dated 27 June 2008 and 18
November 2008 and in accordance with the directions given by this
Court on 21 November 2008, 2 March 2011, 8 April 2014 and 13 May
2014.
b) The plaintiffs are directed forthwith to transfer the property at 106
Holdens Road, Clevedon being the land described in Computer Freehold Register identifier NA 778/35 North Auckland Land Registry (the Holdens Road property) into the name of Michael Wentworth Sayes subject to the Notice of Claim (being Identifier Number
80410701) lodged by Maurine Sayes.
c) Colin James Wright is joined as an Applicant for the purposes of the application for an order under s 143 of the Land Transfer Act 1952 to remove the caveat lodged against the Holdens Road property by Michael Wentworth Sayes.
d)There is an order under s 143 of the Land Transfer Act 1982 removing Caveat No 8296145.1 lodged against the title to the Holdens Road property by Michael Wentworth Sayes.
e) The Registrar of this Court shall have the power to sign any document including any authority and instruction form or provide any authority that Michael Wentworth Sayes is required to sign or provide as transferee of the Holdens Road property in the event that he fails or refuses to sign or provide the same within seven days of being asked to do so.
f) The trustees are not required to provide Michael Wentworth Sayes with a GST invoice in respect of the transfer of the Holdens Road property into his name.
g) The value to be ascribed to the Holdens Road property for the purpose of the distribution to be made to Michael Wentworth Sayes is
$4,311,000.00.
h)The sum of $26,388.89 paid by the four siblings to meet the GST obligations of the Sayes Family Trust by way of GST in respect of the Holdens Road property is not to be included within the assets to be distributed by the trustees.
i)The amounts expended by the trustees in respect of insurance premiums paid in relation to the Holdens Road property are to be debited against the entitlement of Michael Wentworth Sayes.
j)The trustees are entitled to meet the legal costs they incurred in defending the relationship property claim by Maurine Sayes from the general pool of trust assets.
k) Michael Wentworth Sayes is not to receive any interest on the sum of
$417,000 that he is to be paid from the general pool of trust assets before the remaining assets are distributed to the four beneficiaries.
l)The trustees are directed to transfer the property at 15 Woolley Street, Woolleys Bay being the land described in Computer Freehold Register identifier NA 21C/1109 North Auckland Land Registry into the name of Gerrard Wentworth Sayes or into the names of such trustees as he shall nominate.
m)If within 7 days of being asked to do so, any party fails or refuses to duly complete and execute any authority and instruction form or memorandum or transfer necessary in order to effect the transfer of Woolleys Bay to the plaintiff or his nominee then the Registrar of this Court is authorised to sign such documentation and to take all steps necessary to give effect to the transfer.
n)Gerrard Wentworth Sayes or his nominee will forthwith execute an All Obligations first mortgage of Woolleys Bay in favour of the second and tenth defendants in their capacities as trustees of the Sayes Family Trust (“the Sayes trustees”) on the Auckland District Law Society form and a Term Loan Agreement recording the following particulars:
i)If Gerrard Wentworth Sayes nominates a transferee he shall provide a personal guarantee in respect of the sum secured by the mortgage.
ii)The principal sum will be such sum as is finally determined by the trustees as being due by the plaintiff over and above his entitlement pursuant to the settlement agreements dated 27
June 2008 and 18 November 2008 (“the Settlement
Agreements”), the judgments of 21 November 2008, 2 March
2011, this judgment, and any further judgment in this proceeding.
iii)Interest shall accrue on the principal sum from the date on which the Sayes trustees place the plaintiff in a position of being able to register a transfer of Woolleys Bay to himself subject to the mortgage.
iv) The interest rate shall be 3.5 per centum per annum.
v) The penalty interest rate shall be 10 per centum per annum.
vi)The Sayes trustees may make demand for payment of the principal sum and interest when they consider they are able to estimate the plaintiff’s final entitlement within $25,000 more or less.
vii) All sums owing under Term Loan Agreement and Mortgage will be payable within 90 days of such demand being made by the Sayes trustees.
viii) The mortgage will be registered against Woolleys Bay contemporaneously with the transfer of the property to the plaintiff.
o)The trustees are not required to retain any funds to meet potential claims by the children of Michael Wentworth Sayes.
p)Shelley Sayes is not required to pay the grandchildren any interest in respect of the sums paid to them for their remainder interests in 74
Lucerne Road.
[18] Two remaining issues need to be addressed. The first relates to whether beneficiaries should receive interest in respect of the extent to which they are found to have a credit balance. This is an issue that is likely to have a practical impact, because Gerrard will be required to make a substantial payment to the trustees as a result of the orders that are about to be sealed. The remaining three beneficiaries
will receive cash payments. They may wish to argue that they should receive interest in respect of those payments.
[19] I recognised this issue in a judgment I delivered on 2 March 2011.8 At that time I did not have an application before me formally seeking directions in relation to the issue, and I therefore left it open. The issue remains open, and may need to be addressed when the final distribution of the estate is made. I therefore reserve leave to all parties to ask me to deal with that issue at that point.
[20] The final issue relates to the fact that the trustees originally sought the Court’s approval to distribute the trust and estate assets in accordance with calculations made in anticipation of the hearing on 8 April 2014. Those calculations were supplemented by further calculations that the trustees filed following the hearing. As counsel for the trustees acknowledges, however, it will not be possible to finalise those calculations until the transfer of the Holdens Road property has been concluded and Gerrard has paid the amount necessary to bring him to equality in monetary terms with the other beneficiaries.
[21] For that reason the trustees should file a further application for final approval to distribute the trust assets once those transactions have been completed. At that point it should be possible to ascertain with a reasonable degree of accuracy what sums will be available for distribution to the beneficiaries.
Relationship property proceeding
[22] I have dictated a separate minute dealing with the documents to be sealed in relation to the relationship property proceeding.
Costs
[23] Counsel for Gerrard seeks costs in respect of today’s hearing. Michael has
been unsuccessful in respect of virtually all of the issues he has raised. He was successful only in persuading Gerrard that one of the proposed terms of the Woolleys
8 Sayes v Tametekapua HC Auckland CIV 2007 404 516 at [45].
Bay mortgage should be deleted. In those circumstances I award costs to Gerrard on
a category 2 basis together with disbursements as fixed by the Registrar.
Lang J
Solicitors: