EA HAWEA AS EXECUTOR AND TRUSTEE OF THE LATE TAWHIRI TOROA HAWEA V CR RYDER HC NAP CIV-2012-441-338

EA HAWEA AS EXECUTOR AND TRUSTEE OF THE LATE TAWHIRI TOROA HAWEA V CR RYDER HC NAP CIV-2012-441-338 [30 November 2012]IN THE HIGH COURT OF NEW ZEALANDNAPIER REGISTRYCIV-2012-441-338[2012] NZHC 3186IN THE MATTER OF an action to recover landBETWEEN ELIZABETH ANNE HAWEA ASEXECUTOR AND TRUSTEE OF THELATE TAWHIRI TOROA HAWEAPlaintiffAND CAMERON ROYAL RYDERDefendantHearing: 14 November 2012(Heard at Napier)Counsel: J.L. Bates - Counsel for PlaintiffE. Forster - Counsel for DefendantJudgment: 30 November 2012JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALLUnder r 11.5 of the High Court Rules I direct the Registrar to deliver this judgment at 11.00 am on 30 November 2012.Solicitors: Gresson Grayson, Solicitors, PO Box 1045, HastingsSouness Stone Law Partnership, PO Box 975, HastingsIntroduction[1] The applicant in this matter seeks orders for the respondent to immediately vacate and deliver up possession of a property known as Poukawa 14C at ColinWhites Road, Te Hauke ("the property") which he has been occupying for approximately 9 years.[2] The applicant's statement of claim in this proceeding seeks orders for the defendant to give up possession of the property on the basis of the provisions of a 22March 2001 will of the late Tawhiri Toroa Hawea ("the deceased") the then owner ofthe property who died on 11 July 2003. The applicant is the surviving executor under this will. She is the aunt of the respondent and daughter of the deceased. Disputes have arisen over the property between the parties to this proceeding and finally they reached a compromise and settled the present proceeding under a Deed of Settlement dated 21 August 2012 ("the Deed of Settlement"). On 23 August 2012, Associate Judge Bell in this Court made what was effectively a Tomlin order, staying the present proceeding by consent, except for the purpose of giving effect to the Deed of Settlement, with leave reserved to the parties to apply for further orders to carry out its terms. The application before me effectively seeks further orders determining that there has been a breach of the Deed of Settlement on the part of the respondent, and to enforce the applicant's entitlement to vacant possession of the property in the event of such a breach.Background[3] The property at issue forms part of the deceased's estate and as such the applicant is the registered proprietor of the property as executor of the estate. As I have noted, the applicant is the deceased's daughter, and the only remaining trustee and executor of her estate. The respondent is the deceased's grandson, and nephewof the applicant.[4] Clause 4 of the deceased's will gave the property to the applicant as herexecutor "for the general purposes of my family" but specifically directed the applicant to allow the respondent and "such other members of my family as mayfrom time to time desire to do so" to live at the property. This was with the proviso however that the applicant, as trustee, could sell or dispose of the property at any time "should [she] decide in [her] absolute discretion that such disposal is in the bestinterests of my family." The deceased it seems intended that the applicant would have almost unfettered discretion "at any time" to dispose of the property in accordance with "the best interests of the deceased's family". The proceeds from the sale of the property were then to be distributed to the six children of the deceased inequal shares. The respondent's parent who would have been entitled to a one-sixth share has since died, leaving two children, the respondent and his sister. And, pursuant to a gift-over provision in the will, the respondent is thus entitled to a one- twelfth of the proceeds of any sale, along with his sister.[5] The respondent has lived at the property since the death of the deceased in 2003. Since 2010, as I understand it, the applicant has attempted to sell the property without success. The respondent initially opposed this course of action, as he said he believed the property should stay in the family and he wanted to continue living there. He has since accepted and acknowledged in the Deed of Settlement (and indeed in his 9 November 2012 Notice of Opposition to the present application) that on sale he will co-operate, vacate and give up possession before the sale settlement date. The applicant commenced the present proceeding in June 2012 seeking vacant possession on the basis of the terms of the will.Terms of the Deed of Settlement[6] As noted above, on 21 August 2012 the applicant and the respondent entered into the Deed of Settlement, which provided first, that the respondent accepted the applicant was free to sell the property, secondly that the respondent could reside at the property until one week before settlement of the ultimate sale, and thirdly, he undertook to give up vacant possession on that date.[7] Specifically, clause 2.1(e) of the Deed of Settlement provided that the respondent could purchase the property but the applicant was free to accept or rejectany offer he made "in her absolute discretion". The respondent claims to have madea reasonable offer to purchase the property which he says has been arbitrarily refused by the applicant.[8] Clauses 2.1(c) and (d) of the Deed of Settlement went on to provide:(c) Cameron (the respondent) must cooperate with Elizabeth (the applicant) and real estate agents appointed by her as to the marketing and sale of the property and will not impede access for such purposes, and will take reasonable steps to put the property in a marketable state and will allow Elizabeth or her agents to do so as well.(d) Cameron must vacate the property for any open homes.[9] And clause 3.1 provides:3.1 Cameron must not further waste, damage or do anything to devalue the property pending sale.[10] The consequences of a breach of the Deed of Settlement are stated as:4.1 If a Court determines that Cameron has defaulted on any obligation under the terms of this agreement he must immediately give up vacant possession of the property and pay the costs of and incidental to enforcing the terms of the Settlement Agreement.Alleged breaches of the Deed of Settlement[11] The first breach of which the applicant complains here relates to therespondent's behaviour towards a real estate agent, Mr Noel Joseph Cameron ("Mr Cameron"), who was enlisted by the applicant to sell the property. Mr Cameron claims that after receiving instructions from the applicant to sell the property, on about 17 September 2012 he sent the respondent a written notice with his business card to the address of the property advising that he would be calling on 20thSeptember 2012 at 9:00am to inspect and discuss his listing it for sale. The respondent claims that a notice was received, but it did not give a time and simply asked him to make contact to arrange a time for inspection. This is strongly disputed by Mr Cameron however.[12] Both when the applicant received Mr Cameron's notice and business card and when Mr Cameron arrived at the property at the specified time the respondent was,in his own words given in evidence before me "mad and angry... that the property was to be sold". Mr Cameron claims that the respondent told him he (the respondent) would not co-operate with the sale of the property because he was its rightful owner, and that he would rip up any "for sale" sign placed on the property. The respondent disputes this exchange, contending that instead he did say that any sign would be"ripped up by others" (but not by him) as there was a lot of concern in the neighbourhood about the possible sale of the property.[13] Mr Cameron also deposed at the hearing before me that if open homes were to be arranged for the property, access to it was necessary. He said that he would not be prepared to list the property for sale unless it was clear that he could gain access to it and would be able to freely show people through if required.[14] From all the evidence before the Court I am in no doubt that the respondent has been in breach of his obligations under clause 2.1(c) of the Deed of Settlement. By this, he undertook to cooperate with real estate agents and the applicant throughout the marketing and sale process, including under clause 2.1(d) vacating during open homes. Although I accept there might have been some miscommunication between the respondent and Mr Cameron over a potential inspection time, the respondent clearly had a duty to co-operate once Mr Cameron arrived to inspect the property, but instead I am satisfied that even on his own evidence before me, the respondent made it clear that he opposed any sale and would not co-operate. From his actions and comments, both to Mr Cameron and others (his Aunt Terina Louise Hawea in her effectively uncontradicted 13 November 2012 affidavit deposes that the respondent continued to claim to her that he is the true owner of the property and that he will not "get out") I find that the respondent isdeliberately obstructing the marketing and any possible sale of the property for his own ends, despite his protestations to the contrary.[15] The second breach of which the applicant complains relates to the condition of the property and especially the presence of a number of car wrecks that are said to be stored on the property. Mr Cameron's evidence was that there were between 10and 20 car wrecks he could see on the property when he visited it for inspection. Theapplicant's aunt Terina Louise Hawea in her 13 November 2012 affidavit also deposes:11. Cameron is also not looking after the property well, and beside his denial that my sister and her real estate agent had any right to sell the property, it was clear he has done nothing towards helping it be put on the market by way of cleaning it up.12. There are car wrecks on the property and it has not been well maintained. He has done very little to look after it in the 9 years that he has been on the property.[16] Before me, the respondent attempted in a general way to dispute these matters. He said there was only one car wreck on the property as well as a tractor and implements that he maintained are too large to fit in the garden shed.[17] Under clause 2.1(c) of the Deed of Settlement the respondent is obliged to take reasonable steps to put the property into a marketable state, and generally this would include preparing it for real estate inspections and open homes. I consider that, by refusing to take steps in the month following the Deed of Settlement to ready the property for open homes and eventual sale, such as removing or properly storing items such as car wrecks, machinery and plant from the property, he has breached his obligations under 2.1(c). This has considerably reduced the value of the property(according to Mr Cameron's evidence, by 10-20 per cent) and made it less marketable.[18] It seems entirely consistent with the will that the applicant now wishes to sellthe property, having accommodated the respondent's right to live there (I understand to the exclusion of other family members) for nine years following the death of the deceased. In my view, this desire to sell now is a reasonable course of action,considering the interests of the other beneficiaries of the will, the applicant'srelatives, who along with the applicant himself stand to inherit shares in the sale proceeds.[19] Under the terms of the will, the respondent was entitled to remain in possession until the property was sold, presumably requiring him to vacate on settlement date. The respondent says now that his present position is that he acceptshe has to give up possession when the property is sold, but he opposes any order requiring that of him until an agreement for sale and purchase of the property is due for settlement. His actions however, and those particularly that I have outlined at paras [12], [14], [15], [16] and [17] above would certainly place considerable doubt on this contention.[20] And, although clause 2.1(b) of the Deed of Settlement also only requires vacant possession to be given 7 days before the settlement date, that is subject to clause 4.1 which entitles the applicant to vacant possession immediately if the Court determines that a breach of the Deed of Settlement has occurred.[21] The issue before me therefore is whether the respondent is in breach of the Deed of Settlement so as to entitle the applicant to an order for vacant possession of the property now. For the reasons outlined above, I consider the respondent has breached his obligations to cooperate in the marketing and sale of the property. Despite his protestations to the contrary and his clear agreement in August 2012, he has deliberately been obstructive to the sale of the property, and in my view is likely to continue to take steps to oppose and frustrate any such sale if he remains in occupation. This will adversely affect the price that could be achieved from a willing buyer, which would significantly affect the interests of the will's residuary beneficiaries, including the applicant. This needs to be avoided. In addition, it is clear in my view that it would not in any way be something that was intended or countenanced by the deceased.[22] For all these reasons, I consider that the applicant has defaulted on obligations he undertook in terms of the Deed of Settlement in a significant way such that a proper and competitive sale of the property may very well be unlikely to be achieved, and thus clause 4.1 entitles the applicant to an order for immediate vacant possession.Conclusion[23] The present application therefore succeeds.[24] Orders are now made that the respondent by 4.00 pm on 14 December 2012 is to:(a) immediately vacate and give up to the applicant vacant possession of the property; and(b) take all reasonable steps to put the property in a marketable state for sale in accordance with his obligation under clause 2.1(c) of the Deed of Settlement, and in particular he is to properly remove any car wrecks, vehicles and unattached machinery and plant from the property.[25] As to costs on this application, clause 4.1 of the Deed of Settlement provides that if a Court determines the applicant has defaulted on his obligations under the Deed and is therefore required to give immediate vacant possession of the property, in addition the applicant is to:pay the costs of and incidental to enforcing the terms of the Settlement Agreement.[26] In light of this provision, the applicant therefore is entitled to an order for costs on this application on a solicitor and client indemnity basis and an order to this effect is now made. In addition the applicant is entitled to an order for usual disbursements on this application which is now made. In the event that there is any dispute between the parties as to the level of indemnity costs or disbursements to be paid by the respondent under this order, then the parties may file memoranda in this Court sequentially which are to be referred to me, and I will decide the question of costs and disbursements based on the material then before the Court.'Associate Judge D.I. Gendall'