Teio v Teio
[2024] NZHC 198
•16 February 2024
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV 2023-404-002046
[2024] NZHC 198
UNDER Section 21 of the Administration Act 1969, Section 339 The Property Law Act 2007 and Part 19 High Court Rules 2016 IN THE MATTER OF
the Estate of SAPASUI FRED
BETWEEN
PAUL TEIO, ANNIE PATSY PRIORE and
HARRY TEIO as Administrators of the Estate of SAPASUI FRED
Applicants
AND
NOOROA JUNIOR TEIO as Administrator of the Estate of SAPASUI FRED Respondent
Hearing: 12 February 2024 Appearances:
W E Andrews for the Applicants N J Teio (Respondent) in person
Judgment:
16 February 2024
JUDGMENT OF TAHANA J
This judgment was delivered by me on2024 atam/pm Pursuant to Rule 11.5 of the High Court Rules
…………………………
Registrar/Deputy Registrar
Solicitors/Counsel:
Bastion Chambers, Auckland Dawsons Lawyers Auckland
TEIO v TEIO [2024] NZHC 198 [16 February 2024]
Introduction
[1] The applicants and respondent are siblings. They inherited the family home at 9 Lawrence Place, Ōtara (“the property”) from their mother, Ms Sapasui Fred. The property is held in their four names as administrators of Ms Fred’s estate. Three of the four siblings (“the applicants”) wish to sell the property. They apply for orders for sale of the property under s 339 of the Property Law Act 2007 (“PLA”).
[2] While the applicants initially applied to remove the respondent (Nooroa Teio (“Nooroa”)) as an administrator, Ms Andrews for the applicants indicated at the hearing that removal is unnecessary if orders for sale are made.
[3] I therefore first consider whether orders should be made for the sale of the property.
Background
[4] Ms Fred was born in Niue and moved to Aotearoa New Zealand. Ms Fred married and then separated from her husband, who is from Rarotonga. She raised her four biological children and whāngai1 at the property, which is the whānau (family) home. Ms Fred lived in New Zealand for 46 years and passed away on 29 July 2003, aged 65.
[5] The applicants and Nooroa obtained letters of administration on 26 August 2005. The property was then transferred into their names as administrators.
[6] Other than living with his sister for a number of years, Nooroa says he has lived at the property since his mother’s death. He currently lives there with his two whāngai sisters, his son and two nephews.
1 The applicants and respondents accept that Pauline Tutaka is whāngai. The respondent, Nooroa, says Ms Fred raised two whāngai, Pauline Tutaka and Teremoana Tutaka. The applicants’ views as to whether Teremoana Tutaka is also a whāngai are unknown as the applicants were not at the hearing of the application.
[7] The applicants say they have tried unsuccessfully over the years to get Nooroa to agree to the sale of the property but to date, no resolution has been achieved. They now seek the Court’s intervention.
[8] To avoid any confusion given the same whānau (family) name, I refer to given names.
Should orders be made for the sale of the property?
[9] The Court may make orders for the sale of a property under s 339(1)(a) of the PLA, as follows:
(1)The 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.
[10] In determining whether to order a sale, the Court must have regard to the following relevant considerations under s 342:
(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.
[11]I turn to each of the relevant considerations under s 342 of the PLA.
Extent of shares and number of co-owners
[12] The applicants are entitled to 75 per cent and Nooroa is entitled to 25 per cent of the property, so this factor weighs in favour of the applicants.
Nature of the property
[13] The property is a residential home that has been in the family for over 60 years, since 1961. Ms Fred raised her family at the property including her whāngai.
[14] Given the residential nature of the property, it cannot be divided amongst the parties.
Hardship
[15] The Court must consider the hardship that would be caused to the applicants by refusing a sale in comparison to the hardship that would be caused to any other person by ordering a sale. Fogarty J in Holster v Grafton referred to the meaning of hardship as follows:2
“Hardship” is a value laden criterion. It suggests an adverse effect which is of significant impact to the applicant. It has to be read consistent with the policy of the statute which respects property rights of tenants in common, but seeks to resolve conflicts fairly.
[16] The above indicates the importance of weighing the relative hardship between the parties and the desire to resolve conflicts fairly.
[17] If the home is not sold, the applicants are unable to benefit from any proceeds of sale. If sold, each sibling (including Nooroa) would be entitled to a 25 per cent share of the proceeds of sale less payment of any expenses owing by the estate. While no evidence was provided as to the value of the property, Ms Andrews indicated that the capital value as at 2019 was $700,000.
[18] Correspondence from the Auckland Council confirms that as at 30 June 2022, rates amounting to $8,246.85 are postponed. Interest is calculated and applied to that
2 Holster v Grafton (2008) 9 NZCPR 314 at [50] cited by Doogue J in Minehan v McGuigan [2020] NZHC 1686, (2020) 21 NZCPR 135 at [40].
amount at the end of each rating year. That outstanding amount together with interest will therefore have to be repaid by the estate as owner. As no rental is being paid, the applicants are exposed to a growing liability as the postponed rates incur interest. The applicants therefore face the additional hardship of not being able to repay a growing liability unless the property is sold.
[19] Nooroa says that some of the applicants have benefitted from the property, which he says has been used as equity to enable his siblings Paul and Harry to purchase homes. There is no evidence from the applicants in response to this assertion. I accept that if the property is retained by the estate, it may be used to benefit the applicants if the property is used as security to raise finance. That benefit however, needs to be seen alongside the hardship of not having access to any proceeds of sale. The latter will obviously provide a greater financial benefit to the applicants.
[20] Turning to the hardship to Nooroa if the property is sold, he explained his reasons for opposing the sale of the property in his written submissions, as follows:
1) It was expressed by our mother that the property not be sold under any circumstances as it was her intention that the property be for her kids, her grand children, their kids etc as stated in her will.
2) The property was intended by our mother as a place for our family to stay when in need of help/until they, ‘got on their feet’/moved on. This has been carried on over the last 20 years as the ‘various people’ that have lived at the property have been family ...
[21] At the hearing, Nooroa said his primary concern is that his mother’s wishes will not be honoured and his whāngai sisters will not be cared for. Nooroa also says that his mother had been cared for by her whāngai, Ms Pauline Tutaka (“Pauline”) and that while she was still alive, she gathered the family together and said that the property was not to be sold. Nooroa also says that his mother wanted Pauline and her sister to be able to stay at the property.
[22] No will has been provided to the Court and letters of administration have been granted so I proceed on the basis that there is no will. As to Ms Fred’s intentions, the position of the applicants is unknown as they were not present at the hearing. No application has been made in reliance on any purported testamentary promise of Ms Fred. While Ms Andrews submitted that any application would be out of time, I
note that the Court has jurisdiction to extend the time for making such an application before the final distribution of the estate.3 For the purposes of this application, I must however, proceed on the basis that no application has been made to date.
[23] I accept that there is hardship to Nooroa and those who live in the property. From Nooroa’s perspective, his mother’s wishes will not be honoured. His whāngai will not be looked after and those whānau living in the home will have to find alternative accommodation.
[24] Nooroa’s submissions also indicate there are cultural issues that are relevant to how the sale of the property is viewed and any potential hardship he may suffer. The views expressed by Nooroa at the hearing are remarkably similar to the views of Māori to the inheritance of Māori land, which were expressed by Judge Ambler in Re Te Whata as follows:4
First, Māori land is not seen as a commodity but a cultural heritage. Second, Māori land is expected to be passed from generation to generation; the current generation is merely a custodian for the next. Third, Māori land is almost always received by the current generation without payment. With limited exceptions, current owners have not invested their personal wealth in purchasing the land. They can hardly complain at not being able to realise the full monetary value of their land by selling it when they received it for free in the first place.
[25] Nooroa’s submissions at the hearing expressed frustration with the applicants’ desire to sell the property ahead of the need to retain ownership and provide a property from which both current and future generations can benefit. While the property is not within the traditional whenua (lands) of this whānau who whakapapa (descend from) the islands of Te Moana-nui-a-Kiwa, the views expressed by Nooroa reflect a cultural view of how whānau land is perceived. It is that view that Nooroa feels strongly about protecting for future generations. Nooroa also expressed concern that a sale of the property will result in his whāngai sisters no longer being cared for because they will be without a home, as will other members of the whānau who live at the property.
3 Law Reform (Testamentary Promises) Act 1949, s 6.
4 Re Te Whata – Waiwhatawhata 1A2B6 (2008) 125 Whangarei MB 294 at [39].
[26] The applicants say that Nooroa will not suffer any hardship because he will get his share of the proceeds of the sale. That submission however, does not address the hardship caused by acting contrary to Ms Fred’s intentions, nor does it address the cultural view that the whānau home should be held for current and future generations. There is also the hardship to other members of the whānau who are currently living in the property and who will be required to find alternative accommodation if the property is sold.
[27] While it is difficult to quantify hardship caused by offending cultural norms or the alleged intention of Ms Fred, it is clearly hardship and a relevant factor. That hardship, however, also needs to be viewed alongside the rights of the applicants as members of the whānau to benefit from the property. Nooroa accepts that all his siblings are entitled to use, and benefit from, the property. But, the correspondence between the parties and the fact that this issue has been festering for many years, indicate that Nooroa has not taken any steps to ensure that those who are benefitting from the property pay rental so the applicants can also benefit. The fact remains that the applicants have not been able to benefit from the property over many years and they now feel that the only way to do so, is to have the property sold.
[28] In summary, there is hardship on both sides but, in circumstances where the applicants have been unable to benefit from the property since their mother’s passing, I accept that their hardship outweighs that of Nooroa and those who are living in the property.
The value of any contribution made by any co-owner to the cost of improvements to, or the maintenance of, the property
[29] Nooroa says that he has contributed to the maintenance of the property and refers to renovations he undertook on the property. Ms Andrews also submits that the applicants have been involved in helping to clean up and maintain the property. This factor is not determinative.
Any other matters the court considers relevant
[30] I have set out above why I consider cultural values are relevant. They are relevant to hardship and to how the property is viewed. Those cultural values view property in a different way that does not necessarily elevate individual economic return above family relationships and future generations. Those values are at the heart of Nooroa’s opposition and perhaps explain his ongoing resistance to sale.
[31] I consider that it is appropriate that there be time for the whānau to explore a resolution that will preserve whānaungatanga (family relationships). I encourage the whānau to meet ā-kanohi (in person) to discuss a resolution which may or may not include the option of the occupiers of the property paying rent and/or a family arrangement as to the distribution of the proceeds of sale of the property.
[32] While I consider it is necessary to allow time for the above to occur, it is also appropriate that there is a final resolution if the whānau are unable to agree. I accept that there is hardship to the applicants in not being able to benefit from the property and that three of the four administrators wish to sell. A final resolution is likely necessary for the whānau to be able to move on.
[33] I therefore propose to make orders for the sale of the property but for such orders to be held and to not take effect until 1 June 2024. This will give the whānau time to meet to discuss and agree on an amicable resolution and if they are unable to do so, to allow time for Nooroa and the others residing in the property to find alternative accommodation.
What orders are appropriate?
[34] Section 343 of the PLA confers powers on the Court to make orders in addition to an order for sale, as follows:
343 Further powers of court
A further order referred to in section 339(4) is an order that is made in addition to an order under section 339(1) and that does all or any of the following:
(a)requires the payment of compensation by 1 or more co- owners of the property to 1 or more other co-owners:
(b)fixes a reserve price on any sale of the property:
(c)directs how the expenses of any sale or division of the property are to be borne:
(d)directs how the proceeds of any sale of the property, and any interest on the purchase amount, are to be divided or applied:
(e)allows a co-owner, on a sale of the property, to make an offer for it, on any terms the court considers reasonable concerning—
(i)the non-payment of a deposit; or
(ii)the setting-off or accounting for all or part of the purchase price instead of paying it in cash:
(f)requires the payment by any person of a fair occupation rent for all or any part of the property:
(g)provides for, or requires, any other matters or steps the court considers necessary or desirable as a consequence of the making of the order under section 339(1).
[35] The original application before the Court attached proposed orders for the sale of the property by way of public auction with the marketing costs being shared equally between the parties. The applicants then filed proposed directions with their submissions seeking additional orders as to the solicitors to act on the conveyance and that the net proceeds be distributed to the beneficiaries of the estate in equal shares subject to any costs order against Nooroa. The applicants filed a third proposed set of directions prior to the hearing seeking that costs (including utilities and rates) be paid out of Nooroa’s share of the proceeds of sale and that Nooroa pay fair occupational rent from the date he moved into the property until the date the property is vacated.
[36] At the hearing, Ms Andrews did not advance any submissions in support of the application to require Nooroa to pay occupational rent. Nooroa is an administrator and a beneficiary of the estate and the request for occupational rent appears to have been advanced at the last minute. In these circumstances, I decline to make any orders requiring Nooroa to pay occupational rent or any other costs in relation to preparation of the property for sale. Those costs should be borne by the estate. All administrators
are responsible for administering the estate and no steps appear to have been taken to require any occupant to pay rental.
[37] I am satisfied that only orders in relation to possession and sale of the property are appropriate, together with directions as to expenses of sale and distribution of the proceeds.
Result
[38]For the reasons set out above, I order that:
(a)Nooroa and the occupiers of the property are to vacate the property by no later than 5 pm on 1 June 2024.
(b)As from 5 pm on 1 June 2024, the applicants have the sole right of possession of the property for the purpose of preparing the property for sale.
(c)The property is to be sold by public auction to be undertaken by a real estate agent approved by the applicants (the Real Estate Agent).
(d)The terms of the sale by way of auction are to be as approved by the applicants.
(e)The Registrar of the High Court at Auckland is authorised to sign, if necessary, any contracts or documents reasonably necessary to facilitate the marketing and auction of the property for sale.
(f)The Registrar of the High Court at Auckland is authorised to sign, if necessary, any contracts or documents that are reasonably necessary to transfer ownership of the property to the purchaser.
(g)Dawsons Solicitors are instructed to act for the estate in the conveyance of the property.
(h)Once the property is sold, Dawsons Solicitors will, on behalf of the parties, apply the proceeds of sale as follows:
(i)payment of any amounts legally required to be paid by the estate in connection with the property (for example, Council rates);
(ii)payment of the costs of the Real Estate Agent associated with the marketing and sale of the property;
(iii)payment of costs and disbursements associated with the conveyancing of the property; and
(iv)the remainder of the proceeds of the sale and any interest on the purchase amount to be paid to the parties (Paul Teio, Annie Priore, Harry Teio and Nooroa Teio) in equal shares.
[39] Leave is granted to either party to apply to the Court on 48 hours’ notice to vary the terms of these orders if a settlement is reached prior to 1 June 2024 and/or a dispute arises as to the implementation of these orders.
[40]The orders set out in [38] are to lie in Court and not be sealed until 1 June 2024.
Costs
The applicants seek costs and ask that costs be paid out of Nooroa’s share of the proceeds of sale. The arguments advanced by Nooroa in opposition to the application were based on genuine and valid concerns that a sale of the property is contrary to his mother’s wishes and the future generations of the whānau. It is appropriate that the estate bear the costs of the application. I decline to award any costs against Nooroa.
Tahana J
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