Tata v Abrams - [2023] NZHC 3373

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-1850

[2023] NZHC 3373

UNDER Part 18 of the High Court Rules 2016 and the Trusts Act 2019

IN THE MATTER

of the Estate of VIOLET AOTEAROA TE WAIPOUNAMU TATA

BETWEEN

REGINALD RAURETI TATA

First Plaintiff

REGINALD RAUREI TATA and CHRISTINA AKATA AOTEROA TE WAITOA TAI

Second Plaintiffs

AND

DONNA DOREEN MATEKINO ABRAMS

First Defendant

JOSEPH CHRISTOPHER LEE GEORGE
Second Defendant

MICHAEL AUSTIN LUCAS

Third Defendant

Hearing: 20 November 2023

Appearances:

S E Wroe, R Evans for the Plaintiffs No appearances for the Defendants

Judgment:

27 November 2023

JUDGMENT OF WHATA J

Formal proof hearing

Solicitors:
Turner Hopkins, Takapuna
S Wroe, Eldon Chambers, Auckland

TATA v ABRAMS [2023] NZHC 3373 [27 November 2023]

[1] Ms Donna Abrams (Donna), an executor, sold estate property at undervalue to her son Joseph George (Joseph). She and Joseph are sued by Reginald Tata (Reginald) and Christina Tata (Christina), for the consequential loss in estate value. The claim is not defended. This is an application for formal proof.

Background

[2] The key facts can be stated succinctly. Donna and Reginald’s mother, Violet Tata (Violet), passed away on 19 March 2008. Donna was one of two executors appointed under Violet’s Will. The other executor, Ms Judy Kaka, passed away in 2016. Donna assumed responsibility for administering the estate. The primary asset of the estate was her mother’s home. The home was occupied by a relation, Tony Tata, until he passed away in August 2019. At this point the whānau began discussions in earnest about what to do with the property. I will return to those discussions below. In any event, two property valuations were obtained from real estate agents, putting the property at between $1 million and $1.05 million. Donna then arranged for the home to be sold to Joseph for $760,000 in December 2020. The sum of in and around
$240,500 was also gifted by the estate to Joseph. This was subsequently increased to
$300,000. The settlement date was 26 February 2021.

[3] Shortly prior to settlement, Donna’s lawyers, Mike Lucas Law, sent a letter to Joseph’s lawyers suggesting that a Deed of Family Arrangement (Deed) be concluded because the property was sold at under value. A subsequent email from Joseph’s email address, signed by Donna, said there was no need for such a Deed because the family had already approved the deal.

[4] In order to be able to buy the property, Joseph obtained a mortgage from RESIMAC Home Loans. Regrettably he defaulted on the repayments. When whānau members discovered this, they tried to buy back the property, but were not successful. The property was sold at a mortgagee sale for $1.04 million. The surplus funds after repayment of the mortgage and costs was $164,000.

Process

[5] Reginald in his personal capacity commenced proceedings against Donna. Donna filed a defence to those proceedings, claiming in short that there was a family agreement to the sale of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Tata v Abrams

Details

AGLC: Tata v Abrams [2023] NZHC 3373
Case: [2023] NZHC 3373
Decision Date: 27 November 2023

CaseChat Overview and Summary

The plaintiffs, Reginald Tata and Christina Tata, have brought an application for formal proof against the defendants, Donna Doreen Matekino Abrams and Joseph Christopher Lee George, following the sale of estate property at undervalue by Donna, who was an executor of the estate of Violet Tata, to her son Joseph. The plaintiffs claim that Donna breached her fiduciary duty of fairness to the beneficiaries of the estate by selling the property to Joseph at a significant undervalue, and that Joseph knowingly received the property in breach of fiduciary duty. The claim is not defended.

The court was required to determine whether Donna breached her fiduciary duties as an executor by selling the estate property to her son at undervalue and by gifting him a sum of $300,000. The court was also required to determine whether Joseph knowingly received the property in breach of fiduciary duty. Furthermore, the court had to consider whether Donna could be relieved of her personal liability under section 73 of the Trustee Act 1956, and whether Reginald was entitled to his legal costs.

The court held that Donna breached her fiduciary duty to the beneficiaries of the estate by selling estate property to her son at substantial undervalue, as well as gifting him a sum of $300,000. The court held that Joseph was also liable for knowingly receiving the property in breach of fiduciary duty. The court also held that Reginald and Christina, when acting as administrators, were entitled to their reasonable costs associated with these proceedings. However, the court held that it was preferable for Reginald and Christina to seek the mandate of the other beneficiaries for a payout in excess of what Reginald was entitled under the cost rules. The court made orders for damages, interest, and costs, and reserved leave for Reginald and Christina to come back to this Court for further orders relating to Reginald’s costs if the remaining beneficiaries approve a further payment in respect of those costs.

Orders