Taylor v Conroy
[2024] NZHC 2210
•8 August 2024
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2023-404-1361
[2024] NZHC 2210
UNDER Section 339 of the Property Law Act 2007 and Part 19 of the High Court Rules 2016 BETWEEN
CHRISTOPHER GEORGE TAYLOR AND MGH TAYLOR LIMITED AS TRUSTEES OF THE LE ROY TRUST
Applicants
AND
HELEN MIRIAM CONROY AND MGH CONROY LIMITED AS TRUSTEES OF THE HAWKRIDGE DOOLITTLE TRUST
Respondents
Hearing: on the papers Counsel:
W E Andrews for applicants
A M E Parlane for respondents
Judgment:
8 August 2024
JUDGMENT OF JOHNSTONE J
(costs and sale directions)
Solicitors:
Pidgeon Judd, Auckland Parlane Law, Auckland
TAYLOR v CONROY [2024] NZHC 2210 [8 August 2024]
[1] Upon issuing my judgment of 5 June 2024 in this proceeding,1 I made an order under s 339(1) of the Property Law Act 2007 that the property at Wilson Road, South Head (Property), held by the trustee parties as tenants in common, is to be sold.
[2] I directed the parties to confer with a view to agreeing comprehensive directions for sale, and the filing of memoranda on that issue and costs if they could not be agreed. Memoranda have been filed. Assisted by those memoranda, I now make directions for sale and as to costs.
The Taylor trustees’ position
[3] The Taylor trustees seek costs on a 2B basis against the Conroy Trust, and directions, in essence that:
(a)Ms Conroy and any other occupants vacate the property;
(b)the Taylor trustees engage a named real estate agent to sell the property without warranties, including by signing the listing agreement and marketing documents, and that their solicitors attend to matters of conveyancing;
(c)the Registrar is authorised to sign documents required to facilitate title transfer;
(d)sale costs and any outstanding rates and utilities are deducted from sale proceeds;
(e)net sale proceeds are distributed:
(i)85 per cent to the Taylor trustees; and
(ii)15 per cent, less Court costs and disbursements in this proceeding, to the Conroy trustees.
1 Taylor v Conroy [2024] NZHC 1467.
[4]They also seek leave to apply for further necessary directions.
Ms Conroy’s position
[5] On costs, Ms Conroy submits that the Court is without jurisdiction to award costs against the fund of the Conroy Trust. She relies on s 45(2) of the Legal Services Act 2011 in submitting that no costs can be awarded against her, and accordingly, in line with “the justice of the situation”, costs should not be ordered except against MGH Conroy Ltd.
[6] Further, Ms Conroy submits that she should be awarded costs in respect of the Taylor trustees’ original application, which sought an order removing her as a trustee as well as an order for sale of the Property.
[7]On sale directions, Ms Conroy:
(a)seeks until 3 September 2024 to vacate the Property;
(b)requests that she also sign the listing agreement, and be entitled to see an itemised list of sale costs before agreeing to their deduction;
(c)submits that costs unrelated to conveyancing or the process of marketing and sale should not be deducted; and
(d)wishes to see a cost estimate if the Taylor trustees’ solicitors are to undertake the conveyancing.
Costs in this proceeding
[8] Section 45(2) of the Legal Services Act provides that “[n]o order for costs may be made against an aided person in a civil proceeding unless the court is satisfied that there are exceptional circumstances”. Section 45(3) sets out a non-exhaustive list of matters that the court may consider in determining whether there are exceptional circumstances. These include whether the aided person unreasonably pursued one or more issues on which she failed.
[9] In this proceeding, Ms Conroy was sued alongside MGH Conroy Ltd, in their capacities as trustees of the Conroy trust. However, as noted in my 5 June 2024 judgment, the evidence was that MGH Conroy Ltd was appointed as a passive trustee, took no significant steps in the trust's administration, and during the proceeding sought to retire, remaining as a party only while Ms Conroy declined to use her power to appoint another trustee.2
[10]The proceeding was therefore defended by Ms Conroy alone.
[11] In my 5 June 2024 judgment, I found that, had the trustees of both trusts been “acting responsibly in the best interests of each of the trusts”, they would have been “united in their plans to sell the Property so as to avoid their joint and ongoing liabilities”.3 In doing so, I acknowledged “the apprehension Ms Conroy is likely to feel about her lack of means requiring her to sell the property she jointly owns as trustee, and to find alternative accommodation”.4
[12] I find that these circumstances are exceptional, in terms of s 45(2). Having been sued as a trustee, Ms Conroy allowed herself, perhaps understandably but nevertheless unreasonably, to respond in the manner dictated by her perception of her personal interests.
[13] In terms of s 45(1), I consider it reasonable for Ms Conroy to meet the Taylor trustees’ costs and disbursements in this proceeding, such costs being assessed on a 2B basis in the manner set out in the annexure attached to their counsel’s memorandum dated 20 June 2024. These costs include the cost of bringing the original application for replacement of trustees and sale. The application for Ms Conroy’s replacement was necessary only because she failed to respond to correspondence from the Taylor trustees’ solicitors. The original application included the application for sale upon which the Taylor trustees ultimately succeeded.
2 At [35].
3 At [39].
4 At [42].
Order to vacate
[14] Without intending to countenance any ongoing breach of the Auckland Council’s Insanitary Building Notice, I will order that Ms Conroy vacate the Property so that it may be sold no later than 3 September 2024.
Listing agreement and consent to deduction of costs
[15] Having ordered the sale of the Property despite Ms Conroy’s opposition, I do not consider it necessary that she sign the listing agreement or consent to the deduction of costs necessarily incurred in the course of the Property’s sale. Of course, she will be entitled, as a trustee owner, to an itemised account of such costs.
Appointment of conveyancing solicitors
[16] The Taylor trustees are to conduct all necessary conveyancing duties, charging only such fees as are reasonable in light of the modest value of the Property and the uncomplicated nature of the transaction.
Deduction of costs
[17] Sale costs only are to be deducted from gross sale proceeds. Costs in this proceeding, payable by Ms Conroy as trustee, are to be deducted from the Conroy Trust’s share of the net sale proceeds, as an amount to which Ms Conroy is entitled to reimbursement, and therefore to which the Taylor trustees’ entitlement as judgment creditor may attach.
Result/orders
Costs in this proceeding
[18] Ms Conroy is to pay the Taylor trustees’ costs and disbursements in this proceeding, such costs being assessed on a 2B basis in the manner set out in the annexure attached to their counsel’s memorandum dated 20 June 2024.
Directions for sale
[19] The property at 714 Wilson Road, South Head, Auckland (Record of Title NA119C/685) is to be sold, in the following manner:
(a)The Taylor trustees are to engage Ronald Hachache of Ray White Northwest to act as the owners’ real estate agent in selling the Property, without any warranty as to condition, at no less than its fair market value, including by signing the listing agreement and other documents necessary for the marketing and sale of the Property.
(b)Ms Conroy and any other occupants are to vacate the Property by 5 pm on 3 September 2024.
(c)The Registrar of the High Court at Auckland is authorised to sign, and is to sign, on behalf of the vendors any document necessary to effect the sale as described at [19](a) above, and the transfer of its title.
(d)Pidgeon Judd, solicitors, are to conduct all reasonably necessary conveyancing aspects of the sale on behalf of the vendors, charging only such fees as are reasonable in light of the modest value of the Property and the uncomplicated nature of the transaction.
(e)Direct sale costs, comprised of Mr Hachache’s agency fees and disbursements for attendances described at [19](a), Pidgeon Judd’s fees and disbursements for attendances described at [19](d), and the payment as required of any outstanding rates and utilities, are to be deducted from gross sale proceeds.
(f)Net sale proceeds, remaining after deduction of direct sale costs under [19](e), are to be distributed as follows:
(i)85 per cent, to the trustees of the Le Roy Trust (referred to above as the Taylor trustees); and
(ii)the balance, after deduction of Court costs and disbursements the subject of [18] above, to the trustees of the Hawkridge Doolittle Trust (referred to above as the Conroy trustees).
[20] Leave is reserved to the parties to apply for further directions as to sale of the Property and distribution of the proceeds of such sale.
Johnstone J