Sutherland v Waitai
[2019] NZHC 2781
•30 October 2019
IN THE HIGH COURT OF NEW ZEALAND WHANGANUI REGISTRY
I TE KŌTI MATUA O AOTEAROA WHANGANUI ROHE
CIV-2017-483-12
[2019] NZHC 2781
IN THE MATTER of the Estate of Hine Maiangi Waitai BETWEEN
RERE RAIMA SUTHERLAND
Plaintiff
AND
ERUERA TE KAHU WAITAI
Defendant
Hearing: 29 October 2019 Counsel:
J B Gilbert for Plaintiff Defendant in person
Judgment:
30 October 2019
JUDGMENT OF CHURCHMAN J
[1] The plaintiff and defendant are the trustees in the trust created by the Will of their late mother, Hine Maiangi Sanspeur Waitai (Mrs Waitai), who died on 27 March 2007.
[2] The principal asset of the estate is an undivided half share in the following parcels of land:
(a)Waipu 1C No 2B Block (WN387/50);
(b)Waipu 1C2A Block (WN387/49);
(c)Waipu 1B2 Block (WN276/113);
(d)Waipu 1B1 Block (WN271/296);
SUTHERLAND v WAITAI [2019] NZHC 2781 [30 October 2019]
(e)Waipu 4A3D2 Block (WN271/295);
(f)Waipu 1C3 Block (WN120/10); and
(g)Waipu 4A3E3B1 Block (WN272/168).
[3]There was also a 76/218 share in Waipu 4A3E2 Block (WN272/165).
[4] These parcels of land are collectively known as the Waipu Blocks. The other undivided one-half share in the Waipu Blocks was owned by Mrs Waitai’s sister, Raimapaha Magdalene Rei (Mrs Rei).
[5] The Will directed that the one-half share in the Waipu Blocks be sold for market value with the residue to be divided equally between the deceased’s surviving children. There were 11 children. Mrs Rei pre-deceased Mrs Waitai and her undivided one-half share passed on her estate.
[6] On 3 August 2007, a mortgage in the sum of $280,000 was advanced by the ANZ National Bank Ltd to Mrs Waitai’s estate in respect of two of the Waipu Blocks (WN387/50) and (WN387/49). The mortgage advance was to be repaid on 1 April 2009. The repayment date was subsequently extended to April 2014.
[7] On 24 May 2010, the other half-interest in the Waipu Blocks (owned then by Mrs Rei’s estate) was sold to Otairi Station Ltd. However, notwithstanding the existence of the ANZ mortgage over two the blocks, no notice of the sale was given either to the ANZ or to the then trustee in Mrs Waitai’s estate, the late Enoka Waitai.
[8] The mortgage in now overdue for repayment and the ANZ issued a final demand for payment on 8 February 2017 requiring repayment of the outstanding balance of $263,529.83. The bank indicated that unless this sum was repaid, it would exercise a power of sale. The bank withheld exercising that power while these proceedings were progressed. However, unpaid interest and penalties continued to accrue.
[9] The plaintiff entered into an agreement for sale and purchase with the sole owner of Otairi Station Ltd, Douglas McKelvie Duncan. The defendant refused to sign the agreement.
[10] A judicial settlement conference was held before Associate Judge Johnston on 27 June 2018. At the conclusion of that conference, the parties executed a settlement agreement which provided that they would accept the offer to purchase the Waipu Blocks made by Mr Duncan unless the defendant was able by 31 August 2018 to secure a more attractive offer.
[11] The defendant has attempted to secure a more attractive offer but has been unable to do so. Although Mr Waitai referred to various proposals during the course of the hearing of this matter, it is clear that none were unconditional. That is perhaps unsurprising given the undivided one-half share that was for sale, the fact that the other undivided half-share had already been sold by Mrs Rei’s estate to Otairi Station Ltd, and the difficulties with the outstanding mortgage.
[12] By judgment dated 6 November 2018, Associate Judge Johnston made an order by consent that the trustees sell the Waipu Blocks to Mr Duncan or his nominee for
$1,875,000. It was also proposed that he vested the Waipu Blocks solely in the plaintiff. However, Associate Judge Johnston concluded that although he had jurisdiction to make the consent order reflecting the parties’ agreement at the judicial settlement conference, he did not have jurisdiction to make the vesting order.
[13] Implementation of this judgment was delayed in order to allow Mr Waitai the opportunity to come up with a better offer.
[14] The plaintiff has applied for an order under the Trustee Act 1956 authorising the transfer of the property pursuant to the sale and purchase agreement to Mr Duncan without the conveyancing documentation being executed by the defendant.
[15] When the matter was called before Associate Judge Johnston on 16 October 2019, Mr Waitai indicated that he was seeking legal advice. The matter was accordingly further adjourned to allow this to happen.
[16] When the matter was called before me today, Mr Waitai indicated that he had been unable to obtain any such advice.
[17] The matter came before the Court again on 22 October 2019. Thomas J adjourned the matter until today’s JCL list and indicated that if the defendant had any further formal application to make, it should be made prior to then and dealt with on that day.
[18]There has been no further formal application from Mr Waitai.
[19] By memorandum of 24 October 2019, Mr Gilbert, counsel for the plaintiff, submitted that these proceedings had been on foot for over two years and that the defendant had had more than enough time to secure a deal more favourable than that entered into with Otairi Station Ltd but had been unable to do so. He pointed out that the trustees in the estate had continued to incur costs including legal fees, interest and penalties.
[20] Mr Waitai (supported by his brother Te Rangi Waitai) opposed the making of such an order. Mr Waitai sought to blame his sister (the plaintiff) for the difficulties that the estate is now in. Mr Waitai’s criticism of his sister is unwarranted. The situation that the estate now finds itself in is not of her making. It is not clear why the late Enoka Waitai mortgaged the Waipu Blocks, or where the money went. It is also unclear as to how the other undivided one-half interest was able to be sold without notice to either the ANZ Bank or Enoka Waitai. However, neither of those events are matters that the plaintiff has any responsibility for.
[21] The reality is that the trustees have no way of repaying the mortgage or even paying the interest under it, and, unless the direction sought is made, there is a real possibility that the land will be sold by the bank at a mortgagee sale which could well result in the beneficiaries receiving very little.
[22] While the defendant is no doubt genuinely motivated to retain an interest in the land for whānau, that is simply no longer a practical option. Any further delay in
resolving this matter will inevitably erode whatever equity there is in the estate and reduce the entitlements of the beneficiaries.
[23] Accordingly, I am satisfied that this is an appropriate case to make the order sought in terms of the Trustee Act 1956, and direct that the plaintiff execute the transfer of the Waipu Blocks to Mr Duncan without the conveyancing documentation being executed by the defendant.
Churchman J
Solicitors:
Roger Crowley, Whanganui for Plaintiff cc: Eruera Te Kahu Waitai
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