Mortenson v Tui as executor of the will of Naumalila Leota [2019] NZHC 338

Mortenson v Tui as executor of the will of Naumalila Leota [2019] NZHC 338 [5 March 2019]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2019-404-14[2019] NZHC 338UNDER the Property Law Act 2007IN THE MATTER of an application for an order for sale under s339BETWEEN PENEUILA MORTENSONApplicantAND HENRY TUI as executor of the will ofNAUMALILA LEOTA aka PEPENAUMALILA TUIRespondentHearing: On the papersCounsel: SC Munro for applicantSI Perese for respondentJudgment: 5 March 2019JUDGMENT OF FITZGERALD JThis judgment was delivered by me on 5 March 2019 at 4 pm,pursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy RegistrarDateSolicitors: Galbraiths Lawyers, AucklandSaseve Solicitors, Auckland (T Saseve)[1] The applicant, Ms Mortenson, applies by originating application for an orderunder s 339 of the Property Law Act 2007 (Act) for the sale of a property anddistribution of the proceeds of sale.[2] On 9 January 2019, Lang J ordered the proceedings could commence by wayof originating application. On 15 February 2019, the parties filed a joint memorandumadvising the orders sought could be made by consent.Background[3] This summary is drawn from Ms Mortenson's affidavit sworn in support of herapplication.[4] The property in question, 6 Bettina Place, Manurewa (Property), waspurchased by Ms Mortenson's parents in 1988. Her father later passed away, and theProperty transferred to her mother by survivorship.[5] In 2009, Ms Mortenson and her husband purchased 70 percent of the Propertyfrom Ms Mortenson's mother, to assist Ms Mortenson's mother with her living costsand to enable her to split her time between New Zealand and Samoa.[6] In May 2017, Ms Mortenson's mother passed away. Ms Mortenson's brother,Mr Tui (the respondent) was named executor of his mother's will.[7] Mr Tui and Ms Mortenson had differences of opinion as to what to do with theProperty. Ms Mortenson says Mr Tui moved into the Property and said it was "his" aseldest son. Eventually, an arrangement was reached where Mr Tui moved out and theProperty was rented out.[8] Ms Mortenson's husband passed away in April 2018, leaving her the soleowner of the 70 percent share by survivorship. She now wishes for the Property to besold and 70 percent of the proceeds be distributed to her. She advises that her andMr Tui have been unable to agree whether the Property should be sold and that Mr Tuihas failed to engage with her in this regard.The law[9] Ms Mortenson applies for an order under s 339 of the Act, which provides that:339 Court may order division of property(1) A court may make, in respect of property owned by co-owners, anorder—(a) for the sale of the property and the division of the proceedsamong 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 theproperty of 1 or more other co-owners at a fair and reasonableprice.(2) An order under subsection (1) (and any related order under subsection(4)) may be made—(a) despite anything to the contrary in the Land Transfer Act2017; but(b) only if it does not contravene section 340(1); and(c) only on an application made and served in the mannerrequired by or under section 341; and(d) only after having regard to the matters specified in section342.(3) Before determining whether to make an order under this section, thecourt may order the property to be valued and may direct how the costof the valuation is to be borne.(4) A court making an order under subsection (1) may, in addition, makea further order specified in section 343.(5) Unless the court orders otherwise, every co-owner of the property(whether a party to the proceeding or not) is bound by an order undersubsection (1) (and by any related order under subsection (4)).(6) An order under subsection (1)(b) (and any related order undersubsection (4)) may be registered as an instrument under—(a) the Land Transfer Act 2017; or(b) the Deeds Registration Act 1908; or(c) the Crown Minerals Act 1991.[10] The relevant matters the Court must have regard to under s 342 are:(a) the extent of the share in the property of any co-owner by whom, orin respect of whose estate or interest, the application for the order ismade:(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 ofthe order, in comparison with the hardship that would be caused toany other person by the making of the order:(e) the value of any contribution made by any co-owner to the cost ofimprovements to, or the maintenance of, the property:(f) any other matters the court considers relevant.Orders sought[11] Before this matter proceeded to a hearing, the parties (by their respectivecounsel) filed a joint memorandum recording their agreement that the following ordersshould be made by consent:(a) That under section 339 of the Act, the Property situated at 6 BettinaPlace, Manurewa, Auckland, Record of Title NZ15D/1227, be sold.(b) That the Registrar of the High Court at Auckland be authorised to signa real estate agency listing contract, agreement for sale and purchasememorandum of transfer and/or LINZ dealing authority, or any otherrequired documents to effect the transfer of the Property, if therespondent refuses to do so.(c) That 70 percent of the net sale proceeds of the sale of the Property, afterpayment of the real estate commission, any marketing costs previouslyagreed by the parties before they are incurred, and reasonableconveyancing costs, be paid to the applicant. The remaining 30 percentof the said net sale proceeds to be paid to the respondent.(d) That, if an order for costs is sought, then the applicant to file amemorandum (no more than 5 pages) by 4 April 2019, and therespondent to file a memorandum in reply (no more than 5 pages) by18 April 2019.1Evaluation[12] The fact the parties seek the orders by consent is obviously the strongestindication that an order under s 339 is appropriate. However, the factors set out ins 342 of the Act also point towards granting the orders:(a) Ms Mortenson has the majority share in the Property, at 70 percent;(b) Mr Tui, the respondent, holds the remaining 30 percent as an executorof his mother's will, which requires he distribute his mother's estateequally among his siblings. Selling the Property will enable thisdistribution;(c) Ms Mortenson's affidavit indicates Mr Tui has moved out of theProperty. There is accordingly no evidence of any hardship to him fromselling the Property; and(d) The evidence suggests Mr Tui is refusing to contribute to the costs ofmaintaining the Property or otherwise engaging with Ms Mortenson inrelation to it.[13] I am therefore satisfied that it is appropriate to and make the orders by consentas set out at [11] above. The 30 percent net proceeds of sale to be paid to Mr Tui willobviously be paid to him in his role as executor of his mother's estate, to be dealt withby him in accordance with that role.____________________Fitzgerald J1 I have adjusted the dates referred to in the draft orders set out in the joint memorandum, to reflectthe timing of this judgment.