JUSTINA SOPHIA BLOSS v AGE VAN DER GOOT [2019] NZHC 1360

JUSTINA SOPHIA BLOSS v AGE VAN DER GOOT [2019] NZHC 1360 [13 June 2019]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2017-404-1997[2019] NZHC 1360BETWEEN JUSTINA SOPHIA BLOSSas executrix of the Estate of CLASINA VANDER GOOTPlaintiffAND AGE VAN DER GOOTFirst DefendantDUTCH VILLAGE TRUSTSecond DefendantFAM-2019-090-107 and 108BETWEEN AGA VAN DER GOOTPlaintiffAND JUSTINE SOPHIA BLOSSDefendantHearing: 13 June 2019Appearances: E J Grove for the PlaintiffU Patel for the First DefendantM N Tolich for the Second DefendantJudgment: 13 June 2019ORAL JUDGMENT OF ASSOCIATE JUDGE R M BELLSolicitors:Davenports West (N Craig), Henderson, Auckland, for the PlaintiffMuller Law (S A Inglis), Pakuranga, Auckland, for the First DefendantCorban Revell (M N Tolich), Henderson, Auckland, for the Second DefendantCopy for:Chris Patterson Barrister Ltd (C J Patterson/E J Grove), Auckland, for the PlaintiffUsha Patel, Auckland, for the First Defendant[1] Today I have heard applications for discovery. First, I give the background tothe proceeding. The facts pleaded in the statement of claim provide a suitable context.[2] The plaintiff, Justina Sophia Bloss, is the executrix of the estate of her mother,Clasina Van der Goot, who died in 2011. The first defendant, Age Van der Goot, wasin a relationship with Clasina Van der Goot, and they married in 1994. The marriageended with the death of Clasina in 2011. The second defendant is the Dutch VillageTrust, a charitable trust which runs a retirement village in Henderson.[3] In 1988, Clasina and her then husband, William Townsend, bought anoccupation licence for a unit in the retirement village. Under a written agreement,they had the right to occupy the unit. The licence would expire when their survivordied. The right to occupy would be sold. The Village Trust would take 10 per cent ofthe sale proceeds, and the rest would be paid to the estate of the survivor. They startedliving in unit 54 but later moved into unit 55. Clasina's husband died in June 1989and the right to occupy the unit vested in Clasina solely by survivorship. Sometimeafterwards, Clasina entered into a relationship with Age Van der Goot. He moved into live with her. They married in July 1994. In her will of 2001, Clasina gave Age theright to live in unit 55 during his lifetime and upon his death the proceeds of sale ofthe occupation licence would go into the residue of her estate. She left the residue toJustina, the plaintiff.[4] The statement of claim pleads that the Trust advised Clasina and Age that ithad lost the original licence for unit 55 and sent a replacement copy. That showedClasina and Age as joint licensees. Clasina and Age signed and returned anacknowledgment. Clasina died in January 2011. Probate of her will was granted on17 February 2011. Age remained living in unit 55. The pleading says that while helived in the unit he had no legal right to do so; his occupation was simply by dint ofthe consent of the Trust. Age's faculties weakened and in 2016 he moved out of unit55 and into a care centre. He has been diagnosed as suffering from dementia and isrepresented in this proceeding by his son, Gregory, who has an enduring power ofattorney. That authority to represent his father has been confirmed by an order madein the Family Court. Once Age vacated unit 55, the Trust sold the unit and paid theproceeds of sale (with a 10 per cent deduction) to Gregory on behalf of Age.[5] As executrix of her mother's estate Justina sues the Trust for breach of contract,for not paying the proceeds of sale to the estate. She sues Age in unjust enrichmentfor having received the entire proceeds of sale.[6] In response Age began proceedings in the Family Court - under the Property(Relationships) Act 1976 and under the Family Protection Act 1955. To bring hisclaim under the Property (Relationships) Act, he needs an order extending time forhim to exercise Option A.1 He also needs an extension of time to bring a claim underthe Family Protection Act.2 That proceeding has been transferred to this court unders 38A of the Property (Relationships) Act.[7] This case is essentially a relationship property matter, at least as between theestate of Clasina and Age, represented by Age's son Gregory. For a relationshipproperty claim, the total assets are about $423,000. That is not a large estate, either inestate litigation or in ordinary relationship property litigation. It means that the partiesneed to be circumspect about the steps they take lest costs consume the funds. To thatend, I directed a judicial settlement conference to see whether the matter could beresolved at an early stage before costs mounted. I was told that some discovery wouldbe needed before there could be a judicial settlement conference. I thought that thematter could be simply resolved in a short case management conference, but Mr Grovesaid the issues were more complicated, so there has been a formal hearing to decidediscovery.[8] Ms Patel has cited Kós J's decision in Dixon v Kingsley as an authority ondiscovery for relationship property proceedings in the Family Court. That approachis helpful for relationship property proceedings in this court. Kós J stated theprinciples as follows:31 Property (Relationships) Act, s 62(2).2 Family Protection Act 1955, s 9.3 Dixon v Kingsley [2015] NZHC 2044 at [20].(a) A robust approach should be taken to discovery consistent with thepurposes and principles of the Act: the need for just division, but alsoinexpensive and efficient access to justice.(b) Such discovery must not be unduly onerous.(c) Such discovery must be reasonably necessary at the time sought.(d) The scope of discovery should therefore be tailored to the need of theCourt to dispose, justly and efficiently, of relationship property issuesunder the Act.(e) More substantial discovery may well be ordered by the Court whereit has reason to believe that a party has concealed information orotherwise sought to mislead either the other party or the Court as tothe scope of relationship property. But even here, the scope ofdiscovery should be no more than is required for the Court to fairlyand justly determine relationship property rights. It is just that in sucha situation, more is likely to be required to meet that requirement.[9] It is important also to understand how relationship property litigation generallyworks. Under the Property (Relationships) Act, the court will order a division ofproperty of the parties upon a triggering event. That triggering event may includeseparation, dissolution of marriage, bankruptcy and death. An inventory is taken ofthe parties' assets. The property is then categorised as relationship property or separateproperty. Separate property is not divided between the parties (subject to exceptionssuch as where one party has made contributions to the separate property of another),and relationship property is generally divided equally between the parties. There are,of course, exceptions to these general statements. The important thing is that the assetsare ascertained as at the date of the triggering event – be it separation, death,bankruptcy, dissolution of marriage and the like. While there may be narrativeaffidavits dealing with events over the course of the relationship, the important thingis that the inventory-taking looks to the assets when a division is to be carried out.[10] These rules for division of property take the place of other rules which wouldotherwise apply to the division of property between spouses. That becomes clearunder s 4 of the Property (Relationships) Act which says that the Act applies in placeof the rules and presumptions of the common law and equity to the extent that theyapply to transactions between spouses or partners. Relevantly, section 4(4) says thatin proceedings that are not under the Act, any question relating to relationship propertyarising between spouses or partners, or either of them, the question must be decidedas if it had been raised in proceedings under the Act.[11] That has a bearing on the plaintiff's claim against Age for unjust enrichment.That claim is that Age has received an asset which rightly belongs to Clasina. It is,then, a claim in respect of a transaction between the parties as to their rightfulentitlement. Ultimately that question of entitlement falls to be decided as arelationship property question. So, there is a certain inevitability that relationshipproperty issues are going to arise in this case. Leave is likely to be granted to electOption A, because it seems that Age may be able to defend the claim by invoking s 4.The court will have to decide the point anyway.[12] For this proceeding, unit 55 in the retirement village was the family homeunder the Property (Relationships) Act. There will be a contest as to title. I understandthat the plaintiff will allege that Clasina never effectively transferred her interest inunit 55 to Age, that he did not live in the unit as survivor but stayed there byacquiescence of the Village Trust. But the point remains that the unit was a familyhome and was used as such at the end of the relationship, that is, as at the death ofClasina. The interest in the unit will fall for division as relationship property.[13] For the period after Clasina's death the legal position may well be unclear.There will be questions whether they both owned the unit while Clasina was alive andwhether Clasina really understood the effect of signing the acknowledgment. Theposition does not seem to have been clear to everyone at the time. For this decisionI do not to express any conclusive views.[14] I now turn to the discovery requests. Justina has sought discovery of classesof documents:(a) Age's bank accounts, statements and financial records from the time ofthe commencement of the relationship in about 1991;(b) Age's bank accounts and financial records around the period ofClasina's death;(c) documentation relating to the transfer of the occupancy licence intoboth their names; and(d) documentation relating to when Age ceased being a manager of theretirement village.She also seeks an order setting aside claims to privilege for certain documents of Age'slegal advisors.[15] It is important to see how these discovery requests can be tied to relevant issuesin the proceeding. Mr Grove says that there may be a possible issue under s 16 of theProperty (Relationships) Act. It is understood that Age had lived in New Plymouthand owned a property there which was sold. The date of sale is not known. In decidingwhether s 16 of the Property (Relationships) Act applies it will be necessary to seewhether he owned that New Plymouth property at the time that he entered into hisrelationship with Clasina. I enquired whether Gregory could provide that address tothe lawyers acting for Justina. That would allow them to make enquiries, search thetitle and find out the date of sale. That struck me as a relatively efficient way ofdetermining whether the property was owned as at the date of the commencement ofthe relationship. Ms Patel tried to persuade me that s 16 would not apply in any event.For this decision, I do not need to go down that track. It is sufficient to say that anissue under s 16 has been triggered and it seems to be a real one. There may be aquestion as to how s 16 ought to be applied in the circumstances of this case. Ms Patel,for example, refers to payments that Age made which were to the benefit of theplaintiff personally, rather than for Clasina - payments in the order of $150,000. Thatmight be raised as a matter that comes under the exercise of the discretion unders 16(3), but I should not pre-empt that now.[16] Next, Mr Grove said that there is an arguable claim that extraordinarycircumstances justify a departure from equal sharing under s 13 of the Property(Relationships) Act and that justified obtaining all bank statements. I do not regard aclaim for extraordinary circumstances as viable in this case. The relationship lastedfor over 20 years. It was by all accounts a happy relationship. While it is not clearhow much, if any, capital Age brought into the relationship, monetary contributionsare not decisive. That has been well established under matrimonial property decisionsgoing back to the 1970s.4 Given the length of the relationship, the suggestion thatthere should be some adjustment because of different capital contributions to themarriage is not reasonably arguable and does not justify a search for bank statementsand accounting records going back into the 1990s. I dismiss this part of the applicationon the ground of irrelevance. But I would also rule against it as being disproportionate.It is important that this litigation be conducted with some economy to avoidunnecessary costs building up.[17] The next item is bank statements around the time of the death of Clasina.Gregory has sworn an assets and liabilities affidavit, which makes adequate disclosure.I understand there are no objections to disclosure of bank statements around the timeof her death.[18] Now for documentation relating to the transfer of the occupancy licence intoboth their names. Mr Grove accepts that there has been a search for documents, somedocuments have been made available, reasonable searches have been made, andnothing further has been found.[19] The same applies to the next category, relating to when Age ceased to be themanager of the retirement village.[20] Finally, there is the question of setting aside the privilege claim. The privilegeclaim arises in connection with the payment of the proceeds of sale of unit 55 to Age.The claim to set aside the privilege is made under s 67 of the Evidence Act 2006. Thatprovides that the court:must disallow a claim of privilege in respect of a communication orinformation if satisfied there is a prima facie case that the communication wasmade or received, or the information was compiled or prepared, for a dishonestpurpose or to enable or aid anyone to commit or plan to commit what theperson claiming the privilege knew, or reasonably should have known, to bean offence.4 Martin v Martin [1979] 1 NZLR 97 (CA) at 99; See also Property (Relationships) Act 1976,s 18(2).There is no suggestion that any offence was committed. Instead, the argument is thatthe documents for which privilege is claimed were made for a dishonest purpose. The"dishonest purpose" is said to have arisen from the circumstances in which theproceeds of sale of unit 55 were paid to Age.[21] Mr Grove took me through certain correspondence where the issue had beendealt with at different times. In a letter sent in February 2009, lawyers for the VillageTrust had identified that there were difficulties with the title question. The letter saidin part:If the new agreement is enforceable, should Mrs Van der Goot die beforeMr Van der Goot then the agreement will vest solely in Mr Van der Goot andupon his termination of the agreement he will be entitled to the terminationproceeds. We understand from your note that this may not be Mrs Van derGoot's intention and she may expect the termination monies to be paid to herdaughter, Justina Bloss.Mrs Van der Goot's will states that Mr Van der Goot is to have the right to useand occupy her occupation licence of unit 55 during his lifetime. Thisdirection is not enforceable if Mrs Van der Goot is sole licensee as on her deathher licence automatically terminates, therefore there would be no right forMr Van der Goot to remain in the dwelling. The direction is also unnecessaryif they are joint tenants as Mr Van der Goot will have a legal right to remainin the dwelling.If termination proceeds are to be paid to Mrs Van der Goot's daughter, Mr andMrs Van der Goot need to legally address this and ensure it is correctlydocumented. This could be addressed in part by the parties completing adirection for paymentThere are complex relationship property issues involved here and the DutchVillage should not involve itself in these issues. The parties should be advisedto obtain separate legal advice to ensure that their respective rights areprotected.We know that lawyers acting for Age received that letter, because they referred to it incorrespondence in 2014. When the property was sold, those lawyers asked for theproceeds of sale to be paid out in the name of Age and expressly directed that that beshown as Age alone. Mr Grove argued that that showed sharp practice, because thelawyers acting for Age knew about the 2009 letter and its analysis of problems relatingto the legal position.[22] Under s 67 it is not enough just to suspect a dishonest purpose. It has to beshown to a prima facie standard.5 If the conduct is consistent with conduct that is notdishonest, the prime facie test has not been satisfied. Here, lawyers acting for Agerequested payment from the Village Trust. It was for the Village Trust to consider therequest for payment and to decide whether to accede to it or not. There is nosuggestion of dishonesty on the part of the lawyers in requesting payment of theproceeds. It was for the Village Trust, on receiving the request, to decide to whom themoney should be paid. If the Village Trust was in doubt, it could seek directions fromthe court by way of an interpleader proceeding. The fact that those steps were nottaken by the Village Trust does not indicate dishonesty on the part of the lawyers actingfor Age. I see no reason to think that there has been any dishonesty on their part orthat they have been party to some dishonest purpose by Age or Gregory. I do notaccept the claim to set aside the privileged communications between Age or his son,Gregory, and the lawyers representing them on this matter.[23] The next matter is discovery by Justina as executrix.[24] As this is a relationship property proceeding, both sides should file and serveassets and liabilities affidavits. That applies equally to proceedings in this court as torelationship property proceedings in the Family Court. That is to ensure that theappropriate inventory is taken. To that end, an affidavit from Age has already beenprovided.[25] As I am requiring discovery for a judicial settlement conference, to keep costsdown, I direct that when Justina files her "will say" statements for the judicialsettlement conference, she should also provide an assets and liabilities statement. Sheshould also provide disclosure of bank statements for the six months before Clasina'sdeath. The only purpose in directing that is to check that there have not been anydispositions of property in the six months before her death.[26] In this decision I have given various rulings and I have expressed views as tosubstantive issues in the case. Mr Grove wishes to keep those issues alive in case thiscase goes to a formal hearing. Mr Grove is, of course, entitled to keep those issues5 Gemini Personnel Ltd v Morgan & Banks [2001] 1 NZLR 672 at 679-680.alive and to argue them afresh at a defended hearing. Equally he will bear in mindthat pursuing issues that are not reasonably arguable may have costs consequences.[27] Another issue is the files in the control of Mr John McIntosh. Mr McIntoshwas a West Auckland lawyer who has had different roles affecting these parties. Atone stage he acted as lawyer for the Dutch Village Trust. He was chairman of theTrust, and he also acted for Age. The parties agree that efforts should be made to seewhat files he has in his control and that they should be made available as a matter ofdiscovery. I encourage their efforts in that regard.[28] On costs, the plaintiff has been generally unsuccessful, barring the one matterof requiring the address of the New Plymouth property to be provided. Costs followthe event. The unsuccessful party should pay the costs of the other parties. No oneseeks increased or reduced costs. I order that the plaintiff is to pay the first defendantcosts under category 2. I trust that counsel will be able to agree on costs. It is likelythat for most steps band B would be appropriate, but that is a matter for counsel todiscuss. If they cannot agree, memoranda may be filed and I will decide costs on thepapers.[29] As to costs for the second defendant, Mr Tolich proposes that they be reserved.I concur. Mr Tolich's purpose in attending today was partly to observe and to see howhe could assist the court. I thank him for his assistance. The question of costs for theVillage Trust should be resolved later..Associate Judge R M Bell