Sillick v Sillick
[2017] NZHC 1969
•17 August 2017
IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY
CIV-2017-488-000038
CIV-2017-488-000039 [2017] NZHC 1969
BETWEEN FRANZINA DE ANNA SILLICK
Applicant/Plaintiff
AND
BRIAN EARL SILLICK Respondent/First Defendant
AND
DAWN KELLY SILLICK Interested Party/Second Defendant
Hearing: 7 August 2017 Appearances:
A Fuiava for the Applicant/Plaintiff
No appearance by or for the Respondent/First Defendant The Interested Party/Second Defendant in Person, with the assistance of R McDowell, McKenzie Friend and her daughter, Jatheena Sillick
Kura Heke, Interested family member
Judgment:
17 August 2017
INTERIM JUDGMENT OF HINTON J
This judgment was delivered by me on 17 August 2017 at 3.30 pm pursuant to Rule 11.5 of the High Court Rules
……………………………………………………………………
Registrar/Deputy Registrar
Solicitors:
Denham Bramwell, Manukau
Parties: Brian Sillick Dawn Sillick
FRANZINA DE ANNA SILLICK v BRIAN EARL SILLICK [2017] NZHC 1969 [17 August 2017]
[1] Franzina Sillick, as one of two executors, is seeking an order for transfer of
193 Okahu Road, Kaitaia into the names of three beneficiaries. As one of those beneficiaries, she also seeks an order for sale under s 339 of the Property Law Act
2007.
[2] Both applications were set down for formal proof on 7 August 2017, but the second defendant and others appeared at the hearing. It is only possible to finalise the application for transfer in this judgment.
[3] There are issues around the application for sale. There are three beneficiaries with quite different wishes, and the deceased did not want the property sold. The family is Māori. The property may be viewed by some at least as their
tūrangawaewae. I cannot make orders today, but I did hear from the parties at some length and some progress is possible.
Background
[4] Franzina Sillick is an executor of her grandmother, Lucy Sillick’s estate.
[5] The respondent, Brian Sillick, is Lucy’s son (Franzina’s uncle) and also the co-executor of the estate.
[6] Brian Sillick has not taken any formal steps in these proceedings.
[7] The interested party/second defendant, Dawn Sillick, is Lucy’s daughter
(Franzina’s aunt).
[8] Lucy Sillick died on 8 December 2010 in Kaitaia. Franzina and Brian were the only beneficiaries under the Will. The only asset held by the estate is the property at Okahu Road, Kaitaia.
[9] Brian unilaterally moved into the property after Lucy died.
[10] Franzina and Dawn attended this hearing. Also present in Court were Dawn’s
daughter, Jatheena Sillick; Robert McDowell, who I believe is a nephew of Lucy and
who was present as a McKenzie Friend for Dawn; and Kura Heke, who describes herself as an aunty.
[11] Franzina, Dawn, Ms Jatheena Sillick and Mr McDowell all live in Auckland. Brian and Ms Heke live in Kaitaia.
[12] Dawn brought a family protection claim against the estate which was granted by Judge McHardy in the Family Court at Auckland on 7 May 2014, with Franzina’s consent (and non-engagement by Brian). As a consequence, Franzina receives
37.5 per cent; Brian receives 37.5 per cent and Dawn receives 25 per cent of the estate.
[13] In addition, a clause was inserted in the Will providing that, if Brian chose to continue to occupy the property, he is responsible for meeting outgoings during the period of his occupancy.
[14] Brian has failed to pay outgoings.
[15] As at 27 July 2017, the estate had debts of about $25,000, which included payments made by Franzina on behalf of the estate (some insurance premiums, funeral expenses and legal fees), and large amounts due for rates (land and water). Some of the rates are due by the estate and some by Brian, but the estate is liable nonetheless. The Council is pressing for payment of the rates.
[16] Franzina sought to remove Brian as executor, but that order was declined by the High Court on 30 November 2016, on the basis that administration was all but complete. The Judge refusing that order obviously did not contemplate the ongoing difficulties that have been experienced.
Order for transfer
[17] Franzina, via her solicitor, wrote to Brian on 1 February 2017, requesting he sign the documents required for a transfer. No reply has been received. She and Dawn have completed all relevant documents.
[18] It is clearly appropriate for there to be an order transferring 193 Okahu Road from the names of Franzina and Brian, in their capacity as executors, into the names of the three beneficiaries. That order is supported by Dawn and as recorded above, no steps have been taken by Brian.
[19] Neither the application for transfer, nor the submissions, refers to the appropriate authority to order a transfer. The matter would seem to be covered by s 52(1)(g) and/or (h) of the Trustee Act 1956.
[20] I therefore make an order under s 52 of the Trustee Act 1956 transferring the property into the names of Brian, Franzina and Dawn, and otherwise in terms of the draft order filed by counsel, a copy of which is attached to this judgment.
Order for sale
[21] As I have said, there is more difficulty with the application for an order for sale. By notice of opposition dated 2 August 2017, Dawn recorded her strong opposition to an order for sale. Although the notice was filed very late, I consider it inappropriate to proceed with the matter by formal proof in those circumstances.1
The hearing could have proceeded with oral evidence, but having heard from Dawn, I consider it fair to allow more time.
[22] As already noted, in her Will, Lucy recorded:
I express the wish that my house property and land is not to be sold and is to be kept in the Sillick family.
[23] It is unclear what Lucy had in mind, having left the property equally to Brian and Franzina (now also to Dawn). Presumably Lucy left it up to the beneficiaries (then only Brian and Franzina), to find a way to make it work. Her wish, and Dawn’s wish, to have the property retained, is quite understandable. Lucy’s wish has
to be borne in mind, but it is not binding on the executors.
1 Dawn says that, while the application for sale had been served on her, she had not understood it was proceeding. She considered this had been hidden from her, which I do not view as fair. This should be treated as a misunderstanding on both sides and left at that.
[24] In any event, circumstances have changed materially since Lucy died. Brian has moved into the property and, against his own best interests, is not engaging in anything to do with the estate, nor with maintenance or payment of outgoings on the property. At the time Lucy died, there were no unpaid outgoings and the property was apparently very well maintained. It was also mortgage-free. I have already referred to the mounting debt of the estate/Brian. Further, it seems to be generally accepted, and obvious from photos, that the condition of the house and the land is deteriorating significantly.
[25] Unless an alternative solution can be found, it is likely that the property will have to be sold, either by virtue of the present application or by a forced rating sale.
[26] It seems that Brian is in a fragile mental state and Dawn also suffers from ill-health. She is currently unhoused. She records in her notice of opposition that she holds little hope of future employment due to health issues. She says she has nil savings; nil investments; minimal income; and nil credit.
[27] Dawn has put up a tentative proposal that she will raise a bank loan to enable repayment of debt, to be secured against her share in the property and/or that she and her daughter between them would pay off the existing debt over a period. She would like to live in the property along with her daughter and Brian. She seemed to think co-residence would be possible, although as I understand it Brian moved them out on a previous occasion when they went to stay.
[28] I do not consider Dawn’s proposal to be viable, particularly as a bank or any other lender would require a mortgage over the whole property. Franzina would not only receive nothing for her share, she would remain exposed to all debt; in fact her liability would be greater than at present as she would be liable under the mortgage. That cannot be expected or imposed.
[29] After some discussion with everyone present, I adjourned the application for sale to the list in 10 weeks’ time, on the following basis:
(a) Dawn and Jatheena (and possibly others) will see if they can raise enough money to enable them to buy out Franzina’s share. The property is realistically worth about $280,000, and so Franzina’s share is not worth more than $100,000. Realistically it is worth less.
(b)Franzina would have to consider taking a material discount for her share, bearing in mind this would be a full and final solution for her and would remove all risks and costs of sale.
(c) Brian should, if possible, be persuaded to transfer his share to Dawn, in exchange for the right to live there for life (or similar) providing he pays his share of the outgoings. Assuming he receives a sickness benefit, that should be feasible. If the property had to be sold, he could receive compensation for his lost occupation right, based on a formula.
(d)Dawn advises that both she and Jatheena would move from Auckland to live in the house, together with Brian. They could pay the balance of the outgoings and the interest, out of whatever benefits or other income they might receive. It may be that another family member or friend can live there also on the basis that they make some fair contribution.
(e) Given the present lack of income other than benefit income, it seems to me that realistically any lender would need to be associated with a relevant iwi, government or charitable organisation. I did see a reference to the Sillick family’s whakapapa, but cannot now locate that on the file.
(f) If funds can be arranged, but Brian will still not cooperate (although hopefully he will) then it may be possible for the Court, as part of the order for sale, to direct that Brian’s share be extinguished in exchange for a right of occupation for life. Dawn will need to research that point, if it becomes necessary, with assistance from Mr McDowell.
(g)Dawn and Jatheena should contact relevant iwi in terms of possible lending, but they should also follow any leads for lending from elsewhere. This seems to me to be a good use of iwi, or similar, funds when at least three people will be housed at relatively little cost. It is hard to envisage much cheaper or more viable housing.
(h)In addition, hopefully the local Council and any other relevant authorities will co-operate in remitting penalties, and possibly even remitting all or some of the accrued debt.
[30] Some other possible settlement avenues have already been explored and rejected. For example, the title includes 8.7 hectares of land. Apparently Lucy’s intention was to provide for Dawn by subdivision of the land. This was being pursued prior to Lucy’s death, but proved to be wholly uneconomic, so “division” by subdivision is not a possibility.
[31] What I have set out is just a concept that might be viable. There may be other solutions to similar effect to the one I have outlined. There may be someone else who can buy the house and rent it to the whānau, or some of them. All parties, including Franzina, should turn their minds to any lateral solution.
Order to transfer proceedings to Auckland Registry
[32] At the request of all parties present in Court (excluding Brian for obvious reasons), I direct under r 5.1(5) and 10.1(4)(b) that this file be transferred to the Auckland Court. I consider that the proceedings being dealt with in the Auckland Registry will be more convenient and fair to the parties. All those present at the hearing, except for Kura Heke, who is not a party, currently reside in Auckland and it is very costly for them to have to travel to Whangarei for hearings. Brian lives in Kaitaia, but he has not participated to date and I can cover his position by the direction that follows.
[33] I direct that Brian may attend the conference and any other hearings by telephone. That will address any inconvenience to him and in fact make involvement in the proceedings even more convenient for him than at present. This
direction might even encourage Brian to take part. Perhaps Ms Heke can liaise with Brian and explain to him that the process does not need to be intimidating. If the parties are in agreement that Ms Heke should participate, she also may attend by telephone. Dawn or Ms Heke will need to advise the Registrar of phone numbers on which Brian and Ms Heke can be contacted.
Other directions
[34] This matter will be placed before me on Tuesday, 17 October 2017 at 9.30 am for a 20-minute conference. All parties should attend, hopefully including Brian and Ms Heke (by telephone).
[35] Dawn needs to file an affidavit by 5.00 pm Friday, 13 October 2017 setting out her best and firm proposal with supporting documents, for example, confirmation of the availability of a loan. This must factor in the position of each of the three beneficiaries. As I hope is clear, the proposal of simply repaying debt over time will not suffice. Dawn should liaise with Franzina’s lawyer leading up to the conference on 17 October 2017.
[36] If a satisfactory arrangement cannot be reached, the application for sale will be given a one-day hearing date and will need to proceed on that date. The parties might then want to have regard to Walker v Walker;2 Coffey v Coffey3 and Harrison v Frieswijk,4 but bearing in mind the distinguishing features of this case, being the mounting debt and deterioration of the property. As the matter is effectively
part-heard, the further hearing should be before me.
---------------------------------------------- Hinton J
2 Walker v Walker [2012] NZHC 543, [2012] NZAR 607.
3 Coffey v Coffey [2012] NZHC 1765.
4 Harrison v Frieswijk [2013] NZHC 3267.
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