Shirtcliff v Iles

[2015] NZHC 312

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2014-485-11202 [2015] NZHC 312

UNDER	section 3, Declaratory Judgments Act 1908
IN THE MATTER OF	consent order dated 12 June 2013
BETWEEN	NANCY ISOBEL SHIRTCLIFF Applicant
AND	MICHAEL ARTHUR ILES Respondent

On papers

Judgment:                27 February 2015

JUDGMENT OF DOBSON J

[1]      In this proceeding, the applicant (Ms Shirtcliff) seeks an order under the Declaratory Judgments Act 1908 as to the interpretation of the expression “full balance of sale proceeds” where that phrase appeared in a consent order made by the Court in separate proceedings between the present parties.

[2]      The expression was used in part of an order that resolved, by consent, caveat proceedings in relation to a Wellington property. The relevant order was:

Nancy [Ms Shirtcliff] is to receive the full balance of sale proceeds from the sale of Unit 40, 29 Webb Street, Wellington.

[3]      In return for that, Ms Shirtcliff agreed to remove a caveat she had lodged against the property.

[4]      Subsequently, solicitors acting for the respondent (Mr Iles) attended to the conveyancing involved in the sale of the relevant property.  Ms Shirtcliff consented

to the conveyancing costs being conducted before Mr Iles’ solicitors accounted to her

SHIRTCLIFF v ILES [2015] NZHC 312 [27 February 2015]

for the balance of the sale proceeds.  Those costs amounted to $1,612.50 and there is no issue in relation to their being deducted prior to accounting to Ms Shirtcliff for the balance.

[5]      However, despite explicit direction that the extent of legal fees to be deducted from the sale proceeds were limited to reasonable conveyancing costs, when the balance  of  the  sale  proceeds  were  made  available  to  Ms Shirtcliff,  a  further deduction of $11,760 had been made on account of Mr Iles’ other legal costs.  Copies of   the   solicitor’s   invoices   covering   these   amounts   have   been   exhibited   to Ms Shirtcliff’s  affidavit.    They appear  to  reflect  work  undertaken on  behalf  of Mr Iles in relation to the caveat Ms Shirtcliff had lodged against the property, and the dispute to which it related.  They appear to relate to work done between February

2011 and March 2014.

[6]      Mr Iles has filed an affidavit questioning Ms Shirtcliff’s mental capacity to bring the proceeding (they are mother and son), but is otherwise not contesting the declaratory order Ms Shirtcliff seeks.

[7]      The point of interpretation is a simple one: full proceeds of sale is capable of common sense literal interpretation.  In order to sell the property, the vendor had to discharge mortgages and meet other costs necessarily involved in effecting the sale transaction.  Using the analogy of a sale being directed by a third party, such as the Registrar of the Court, the legitimate payments would include repayment of any mortgages, any arrears of rates, and the costs of sale including real estate agent’s commission and solicitors’ conveyancing charges.  The residue otherwise available at that point is the “full proceeds of sale”.

[8]      Accordingly, the words “full balance of sale proceeds” in the consent order dated 12 July 2014 means the gross proceeds of sale subject to the deductions of the type I have just addressed.  It does not authorise deduction of other legal fees owed by the vendor.

[9]      There is a difference between the parties as to whether Mr Iles was afforded an   adequate   opportunity   to   pre-empt   these   separate   proceedings,   and   on

Ms Shirtcliff’s behalf, Ms Johnson has filed a memorandum asking that the point not be taken against her client, without an opportunity to be heard.

[10]    Without being influenced by that difference between the parties, I am not persuaded that an order for costs would be appropriate, and direct that costs are to lie where they fall.

Dobson J

Solicitors:

Potts & Hodgson, Opotiki for applicant

Simpson & Co, Otaki for respondent