Styler v James

[2020] NZHC 713

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2019-409-313

[2020] NZHC 713

UNDER

the Property Law Act 2007

IN THE MATTER

of an application for an order for the division of property

BETWEEN

ANTHONY FREDERICK STYLER

Plaintiff

AND

SUSAN ELIZABETH JAMES

Defendant

Counsel:	W H McMenamin for Plaintiff
Judgment:	7 April 2020
(Determined on the papers)

JUDGMENT OF OSBORNE J

[application for formal proof]

This judgment was delivered by me on 7 April 2020 at 3.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

STYLER v JAMES [2020] NZHC 713 [7 April 2020]

[1]                 These proceedings were  served  on  19  October  2019.  The  time for  filing a statement of defence expired 22 November 2019. The defendant has taken no steps.

[2]                 Counsel for the plaintiff has filed affidavits in support of the formal proof and it is appropriate that the matter proceed as a formal proof in the absence of a statement of defence.

Context

[3]                 The plaintiff was married to Ms Styler for some 20 years. They lived at 8 Opal Place, Christchurch, (“the property”) which is the subject of this proceeding. Ms Styler died before 19 November 2008. This is clear because on 19 November 2008 the plaintiff, the defendant and the defendant’s brother, Barry John Deanes, entered into a Property Sharing Deed dated 19 November 2008 (“the Deed”), recording their rights in the property in Ms Styler’s Estate. The defendant and Mr Deanes are the children of Ms Styler and the step-children of the plaintiff.

[4]                 Under the Deed the parties were to be registered as tenants in common of the property in the following shares:

(a)the plaintiff as to a 50 per cent share;

(b)Mr Deanes as to a 20 per cent share; and

(c)the defendant as to a 30 per cent share.

[5]                 The Deed conferred on the plaintiff a personal right of occupation which could not be enjoyed by any other person alone or in conjunction with the plaintiff.

[6]                 In consideration of that life interest the plaintiff was to pay rates, replacement house insurance, electricity, telephone and general upkeep, repairs and defined maintenance.

[7]                 The Deed stated what was to occur if the plaintiff decided to no longer occupy the property. The plaintiff was to give notice to his step children that he intended to

terminate his right of occupation.  That triggered an option  for the defendant and  Mr Deanes to purchase the plaintiff’s interest. If that right was not exercised, then the plaintiff had the option to purchase the interests of the defendant and Mr Deanes.

[8]Clause 12 of the Deed provided:

If no party exercises an option to purchase or all parties waive their respective options to purchase then the property shall immediately be placed on the market for sale at a price agreed upon by the parties or if agreement is not possible then using the valuation procedures provided for in clause 11 hereof and the net proceeds of sale (after payment of all real estate agent’s commission and reasonable legal expenses of and incidental to the sale) shall be paid to the parties as detailed in clause 1 hereof.

[9]Clause 1 of the Deed set out the parties’ shares.

[10]              No party has exercised the option to purchase. The Deed therefore requires that the property be sold. Given that the plaintiff has vacated the property and his right of occupation was personal to him, he was not able to rent the property out. He has given evidence that the property is unoccupied and has been for some time.

Agreement to sell

[11]              The plaintiff in his affidavit explains that he discussed with his step children his decision to no longer live in the property and it was agreed to put the property on the market. A real estate agent was approached, and the plaintiff and Mr Deanes signed a Listing Agreement.

[12]              For some extended time, the plaintiff (directly and through his solicitor) has attempted to have the defendant sign the Listing Agreement. All attempts at contact have resulted in no response.

[13]              The plaintiff says he is continuing to pay rates and insurance on the property, while it stands empty.

The proceeding

[14]              Here the plaintiff seeks an order that the property be sold, and the proceeds divided amongst the co-owners in their respective shares. The plaintiff also seeks

reimbursement of his expenses in respect of the property since it was vacated by him, and costs.

Statutory framework

[15]Section 339(1) of the Property Law Act 2007 (“the Act”) provides:

(1)A court may make, in respect of property owned by co-owners, an order—

(a)for the sale of the property and the division of the proceeds among the co-owners; or

(b)for the division of the property in kind among the co-owners; or

(c)requiring 1 or more co-owners to purchase the share in the property of 1 or more other co-owners at a fair and reasonable price.

[16]              Under s 341 of the Act the plaintiff as a co-owner is entitled to seek an order for sale. Mr Deanes has filed an affidavit confirming that he supports the sale.

[17]              Section 342 of the Act sets out the relevant considerations to be addressed before making an order under s 339. Section 342 provides:

A court considering whether to make an order under section 339(1) (and any related order under section 339(4)) must have regard to the following:

(a)the extent of the share in the property of any co-owner by whom, or in respect of whose estate or interest, the application for the order is made:

(b)the nature and location of the property:

(c)the number of other co-owners and the extent of their shares:

(d)the hardship that would be caused to the applicant by the refusal of the order, in comparison with the hardship that would be caused to any other person by the making of the order:

(e)the value of any contribution made by any co-owner to the cost of improvements to, or the maintenance of, the property:

(f)any other matters the court considers relevant.

Analysis – order for sale

[18]              With the plaintiff and Mr Deanes supporting the sale, those in favour of sale represent 70 per cent of the ownership interests. The property is a house on a section of 640 square metres. Nothing about the nature or location of the property suggests that any option is available other than sale.

[19]              There is no suggestion from the defendant that sale would cause her any hardship. She resides in Auckland.

[20]              As to values of contribution made to the property, that is not clear. I have assumed that Mr Deanes and the defendant’s respective interests arise under the estate of their mother as the recital to the November 2008 Deed says:

A: By reason of their rights and interests in the Estate of Hazel Styler (“Hazel”) the  parties  are the  beneficial  owners of a  property situated  at   8 Opal Place, Christchurch (“the property”).

[21]              As to the catch-all (“any other matters the Court considers relevant”), the parties sensibly recorded the arrangement they had made in respect of the property in the Deed. The  Deed  records  that  the  parties  received  independent  legal  advice in respect of the agreement. The Deed expressly provides that if none of the parties wishes to buy out the other, the property is to be sold.

[22]              The plaintiff’s evidence is that when he gave notice that he wished to vacate the property, there was a further agreement that the parties wished the property to be sold. The defendant, without explanation has taken no steps to give effect to what is undoubtedly an agreement that is binding on her.

[23]              The present situation cannot continue as the property is vacant and simply creating costs to the parties.

[24]              Every application under s 339 of the Act turns on whether the facts of the case warrant an order given the principles in s 342.1 In the circumstances of this case I find

1      Kid Country Te Atatu Ltd v Hoy [2019] NZHC 988.

it is appropriate that there be an order of sale of the property under s 339(1)(a) of the Act.

Order of sale

[25]              I order that the property at 8 Opal Place, Christchurch, being Lot 3 on Deposited Plan 24593, described in Certificate of Title 5D/555 Canterbury Registry, be sold.

Supplementary orders required

[26]There will need to be supplementary orders under s 343 of the Act.

[27]              I note that the Deed between the parties provided that disputes will be referred to arbitration. Here the defendant has not raised a dispute. Rather she has simply failed to respond to appropriate requests.

[28]              A memorandum needs to be filed with a draft order which contains details of the orders sought with reference to the factors set out in s 343 of the Act. In particular, the covering memorandum is to cover:

(a)the proposed method of sale of the property (whether by auction, listing with a price or otherwise);

(b)the price and/or reserve proposed and details of the method by which that has been arrived at, or is proposed to be arrived at, supported by valuation evidence (consistent with the Deed);

(c)whether it is proposed that the Registrar of the Court should be authorised to execute documents on behalf of the defendant;

(d)the quantification of any expenses of which the plaintiff seeks reimbursement, supported by affidavit evidence as to the amount of compensation sought;

(e)a proposal as to how the plaintiff’s expenses should be reimbursed (such as by a pro rata recovery as a first charge on the sale proceeds);

(f)what is sought by the plaintiff in terms of the costs and disbursements of this proceeding (supported by a schedule of scale costs, if scale is sought, but by relevant invoices in the event any greater sum is sought); and

(g)how it is proposed that the defendant’s share of proceeds should be distributed to her in the event that she does not engage in the process.

[29]              Accordingly, what the Court expects from counsel is that a draft order will be filed supported by an explanatory memorandum and affidavit evidence as to the factual matters to be considered in the supplementary orders.

[30]              In the circumstances of the COVID-19 lockdown now in force, I will not impose a specific timetable for the filing of additional documents. Instead, I direct that the plaintiff file as soon as practicable the additional documents referred to in the preceding paragraphs.

Costs

[31]Costs are reserved.

Osborne J

Solicitors:

W H McMenamin, Christchurch

Copy to:
Susan E James (Defendant)