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Court of Appeal of New Zealand |
Last Updated: 27 May 2012
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CA539/2010
[2012] NZCA 191 |
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BETWEEN DIANE MARGARET SIMPSON AND PAMELA RAE BRIGHOUSE
Appellants |
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AND ALAN JOHNSON WALKER, DIANE MARGARET SIMPSON, PAMELA RAE BRIGHOUSE,
COLIN ALAN WALKER AND SHAUN LEA BELLAMY
First Respondents |
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AND COLIN ALAN WALKER
Second Respondent |
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AND ALAN JOHNSON WALKER
Third Respondent |
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AND SHAUN LEA BELLAMY
Fourth Respondent |
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AND SHAUN LEA BELLAMY, KEVIN JOHN SHARKEY, PETER FRANCIS AITKEN AND KERRY
REDMOND STACE
Fifth Respondents |
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Hearing: 8 and 9 November 2011
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Court: Arnold, Randerson and Stevens JJ
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Counsel: D A T Hollings QC and S L Robertson for Appellants
P J P Grace, P T Finnigan and A Henderson for First Respondents N Till QC and H Twomey for Second to Fifth Respondents |
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Judgment: 14 May 2012 at 11.30 a.m.
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JUDGMENT OF THE COURT
A The appellants are granted leave to adduce further evidence.
B The appeal is allowed.
REASONS OF THE COURT
(Given by Arnold
J)
Table of Contents
Para No
Introduction [1]
A family divides [4]
High Court proceedings [24]
Basis of appeal [37]
Discussion [40]
Leave to bring an FPA claim
out of time [41]
Claim
based on Mr Bellamy’s conduct [53]
Costs [75]
Decision [80]
Introduction
[1] This case concerns the division of the assets of a farming couple, Alan and Nola Walker, among their three children. The three children are the appellants, Diane Simpson and Pamela Brighouse, and the second respondent, Colin Walker. At the heart of the dispute is the fact that Colin received the family dairy farm and this, it is claimed, has resulted in a significant disparity in the distribution of the parents’ assets, to the manifest detriment of Diane and Pamela.
[2] In the underlying proceeding, Diane and Pamela brought a variety of claims. First, they sought an extension of time to bring a claim under the Family Protection Act 1955 (FPA) against the first respondents as trustees of their mother Nola’s estate. Second, they claimed against their brother Colin on the basis that he owed them fiduciary duties, which he had breached. Third, they claimed against Colin and their father Alan on the basis that Alan did not have capacity to enter into certain inter vivos arrangements concerning the disposition of his property. Fourth, they brought claims against the fourth respondent, Mr Bellamy, who was the lawyer who handled the family’s affairs, for breach of fiduciary duty and negligence. Finally, they brought a claim against Mr Bellamy’s partners at the time, on the basis that they were jointly and severally liable for the consequences of Mr Bellamy’s actions.
[3] Pamela and Diane were unsuccessful in the High Court before Harrison J in respect of all their claims.[1] In this appeal, they pursue only their application for an extension of time to bring a claim against Nola’s estate under the FPA and their claims against Mr Bellamy and his partners at the time. Before describing the substance of those claims and the way Harrison J dealt with them, we set out the factual background in more detail.
A family divides
[4] Alan and Nola Walker owned a dairy farm in Waiuku. Part of the farm had been in Alan’s family for several generations, since 1926. Alan and Nola had three children – Diane, Pamela and Colin, born in March 1948, September 1950 and August 1953 respectively. As Harrison J observed in the judgment under appeal, the children both loved and were loved by their parents.[2] Unfortunately, events have driven the children apart.
[5] In 1969, Alan and Nola formed Walker Farms (Glenbrook) Ltd (WFGL), in which they were equal shareholders. Alan held 5,000 “A” or voting shares, which allowed him to control the company, while Nola held 5,000 “B” or non-voting shares. Over time, WFGL acquired a number of neighbouring properties, which, together with a block that Alan leased, created a farm with an overall size of around 113 hectares. Alan and Nola also owned jointly shares in the New Zealand Co-operative Dairy Company Ltd (the dairy company shares).[3] As will become apparent, the treatment of the dairy company shares and their ultimate disposition is critical to the outcome of the appeal.
[6] In 1973, Alan and Nola made wills. Their details are not relevant except that Nola left her WFGL shares and her dairy company shares to Colin, as did Alan.
[7] Alan and Nola had various sharemilkers on the farm, including Diane and her former husband from 1968 until 1978, when they purchased their own farm at Awhitu. Alan proposed that Colin join him on the family farm after Colin left college. Colin decided, however, to travel and work, including on the farm for a period. In June 1979, after he had completed his studies at Massey University where he met his wife Elaine, Colin returned to the farm to work permanently.
[8] Initially, Colin and his parents operated under a sharemilking agreement with a profit share of 71 per cent to the parents and 29 per cent to Colin and Elaine. This arrangement reflected the fact that Colin and Elaine did not have their own herd or equipment. The sharemilking arrangement was changed in 1983 to a 50/50 profit share when Colin and Elaine purchased Alan and Nola’s herd of 175 milking cows, tractor and all of the farm equipment for $47,125. They paid for this by way of savings of $35,600 and a loan of $11,470 from the Rural Bank. At this time, Colin and Elaine met some, but not all, of the costs of running the farm.
[9] In 1984 Colin and Elaine purchased a 53.6 hectare farm block (consisting of two titles, one owned by WFGL and one owned by Alan)[4] for $416,000, leaving approximately 65 hectares as the Walker family farm. They paid a cash deposit of $10,000, raised $120,000 from the Rural Bank secured by a first mortgage over the block and borrowed the remainder of the purchase price ($286,000) from Alan and Nola. This sum was secured by a second mortgage as to $200,000 and a third mortgage as to $86,000. The sale price was subsequently assessed as being at an undervalue, the “true” value being set at $563,000. Alan and Nola lent the difference (that is, $147,000) to Colin and Elaine so as not to attract gift duty. On 19 August 1986, the parties entered into a deed of acknowledgement of debt, although for some reason the amount owing was recorded as being $114,000 rather than $147,000. After the purchase, the sharemilking arrangement was changed to 80 per cent to Colin and Elaine and 20 per cent to Alan and Nola, although this included the income from the 53.6 acre block as well as WFGL’s farm land. Both areas were operated as a single farm.
[10] As part of the arrangement, a 2,480m² section containing the family home was subdivided off the block and transferred into the joint ownership of Alan and Nola.
[11] In 1985 there were structural changes within the farming industry that had a significant effect on the economics of farming. The government introduced a scheme to facilitate debt restructuring. In 1987, Colin and Elaine entered into arrangements with the Rural Bank and with Alan and Nola to restructure their debts. The precise details of these arrangements are not immediately important.
[12] In 1986, Alan and Nola executed mirror wills. Each will provided that all of the testator’s property would be transferred to trustees on trust with a life tenancy to the surviving spouse. All of Alan and Nola’s land and shares in WFGL would be held on trust for Colin’s benefit on the survivor’s death. The residue of their assets would be held by the trustees for the equal benefit of Diane and Pamela. The residue included the family home, with an option for Colin to purchase it within two years of the death of the last surviving spouse. Unlike the 1973 wills, however, the 1986 wills did not provide for the transfer of the dairy company shares to Colin. The shares were simply not mentioned in the wills.
[13] As subsequent events demonstrated, the fact that under the wills the deceased spouse gave the surviving spouse a life tenancy in his or her property was likely to cause difficulty, particularly if the surviving spouse outlived the deceased spouse by a significant period.
[14] In 1991 WFGL acquired a further 5.3 hectares of land from the New Zealand Railways Corporation.
[15] In November 1993, Mr Hareb, Alan and Nola’s accountant, provided a summary of what Alan and Nola understood was the then aggregate value of their estates. The total value was $1,578,000, although that omitted their dairy company shares. According to a calculation undertaken at trial by Mr Bellamy, the effect of the two wills was that, of that total estate of $1,578,000, Colin would receive $883,000 (56 per cent) and Diane and Pamela $347,000 each (22 per cent each).
[16] Around 1994 Nola established the N J Walker Family Trust, of which Diane and Pamela were the principal beneficiaries. At the time of her death, the Trust owned public company shares having a value of around $180,000. Throughout this period, Alan and Nola had been following an annual gifting programme in relation to Colin and Elaine’s indebtedness to them. In 1995, Alan and Nola executed new mirror wills in substantially the same terms as the 1986 wills.
[17] In December 1997, Alan was diagnosed with dementia and later, in 1998, Nola was diagnosed with liver cancer. It appears that none of the children informed Mr Bellamy or Mr Hareb of Alan’s dementia diagnosis, although Harrison J concluded that this was not deliberate. In her evidence, Diane said that she thought Mr Bellamy knew that Alan had dementia and that was the reason for him giving a power of attorney. Pamela said that she assumed that Mr Bellamy knew about Alan’s condition and that she thought it was “obvious”.
[18] In May and June 1999, various steps were taken. Alan and Nola executed codicils to their wills, which left to Colin all the moneys owed by WFGL to them and declared that Colin and Elaine’s indebtedness to them was as tenants in common in equal shares. Alan signed an enduring power of attorney, appointing Diane and Colin severally in relation to his property and Pamela alone in relation to his personal care and welfare.[5] Pamela and her husband moved into the family home to look after Nola, who died in June 1999. The immediate effect of the codicil that Nola had executed shortly before her death was that her estate forgave Colin’s indebtedness to her of $143,000 (that is, half of Colin’s total indebtedness to Alan and Nola). Pamela and her husband remained at the family home after Nola’s death to look after Alan, until he went into a rest home in April 2001.
[19] On 29 September 1999, probate was granted of Nola’s will. Under her will, Nola:
(a) left items of jewellery to Diane and Pamela;
(b) left some furniture to Colin;
(c) forgave all sums owing to her by Colin (that is, the $143,000 mentioned above);
(d) left the balance of her estate on trust to pay the net income to Alan until his death or remarriage, when:
By virtue of Nola’s joint ownership with Alan, her interest in WFGL’s current account passed to him through transmission. As a matter of law, the same was true of Nola’s interest in the dairy company shares, although nobody seems to have recognised this at the time. In fact, there seems to have been some confusion about who owned the shares.
[20] Over the three years following Nola’s death in 1999, Alan and the children entered into three deeds of family arrangement prepared by Mr Bellamy. Mr Bellamy acted for all parties to the arrangements. Their overall effect was to distribute all of Nola’s estate (despite Alan’s life interests) and to substantially distribute Alan’s assets, even though he was still alive albeit suffering from dementia. In summary:
(a) First deed: This deed was executed on 15 December 1999. As noted above, under Nola’s will, Alan was entitled during his lifetime to the interest on a deposit of $183,000 which Nola had with the National Bank. On his death, the principal and any accrued interest was to go to Diane and Pamela. Mr Bellamy prepared the deed, which recited an agreement to terminate Alan’s life interest in Nola’s estate and distribute the residue immediately to Diane and Pamela. The deed was made between Alan, Diane, Pamela, Colin and Mr Bellamy as trustees of Nola’s estate on the one side and Diane and Pamela as beneficiaries of Nola’s estate on the other. Alan did not participate separately as a beneficiary even though his life interest was affected by the transaction.
(b) Second deed: A second deed was executed on 20 April 2001. It was between the five trustees of Nola’s estate on the one side and Colin on the other. It provided for the termination of Alan’s life interest in Nola’s 5,000 WFGL shares and their transfer to Colin. Again, Alan did not participate in the transaction as a beneficiary.
(c) Third deed: The third deed was executed in December 2002 between Alan on the one hand and the three children in their personal capacities on the other. It provided for Alan to:
The transfers and payment were made in exchange for acknowledgements of debt, with Colin to make an annual payment of $10,500 and Diane and Pamela $5,250 each to cover Alan’s rest home fees.[8] Alan executed a codicil to his will forgiving these debts.
[21] In addition to these arrangements, two further relevant steps were taken:
(a) The N J Walker Family Trust was wound up and the proceeds distributed to Diane and Pamela. Each received around $90,000 in cash or assets.
(b) Sometime after the execution of the second deed, Alan and Nola’s dairy company shares (and peak supply notes) were transferred to Colin and Elaine.[9] The transfer appears to have been signed by Alan, Diane and Pamela as transferors and by Colin for himself and Elaine as transferees. It appears that Diane and Pamela (and perhaps Alan) signed the transfer as trustees of Nola’s estate, although it is more likely that Alan signed in his personal capacity. Apparently Nola’s trustees were involved in the execution of the transfer because it was thought that Nola’s interest in the dairy company shares fell within her residuary estate, although there is some suggestion that Mr Bellamy thought they were owned by WGFL. In fact, the dairy company shares were jointly owned, so that Nola’s interest in them passed to Alan by transmission on her death. Accordingly, at the time of the transfer they were all owned by Alan although, on the Judge’s findings,[10] Alan did not have capacity to consent to the transfer.
[22] In September 2007, Colin sold the family farm and his adjoining farm for $5.8 million.[11] Around half that sum was attributable to the family farm. Colin and Elaine then purchased a dairy farm in the Waikato for $6.37 million.
[23] There is one final aspect of the factual background that we should mention at this stage. Before the third deed was entered into, Mr Bellamy had some concern about Alan’s capacity to enter into it. He raised this with the children and went to visit Alan himself. He concluded that, from a lay perspective, Alan seemed of full capacity. However, he agreed with the children that Alan should be assessed. It was agreed that Pamela would take Alan to see Dr Toledo (who was the doctor at the rest home where Alan lived, although was not at that time Alan’s usual doctor) for an assessment as to whether he had sufficient mental capacity to know what he was doing when disposing of his assets by will or codicil. Mr Bellamy wrote to Dr Toledo on 27 November 2002 and, after seeing Alan, Dr Toledo telephoned Mr Bellamy to discuss the position on 3 December 2002. Mr Bellamy said that Dr Toledo’s view was that Alan knew what he was doing at the time he acted, but may not be able to remember what he had done several days later. So, he could buy a house, but may not be able to remember a fortnight later that he had done so. In his evidence at trial, however, Dr Toledo said that he did not understand that he was being asked to provide an opinion as to Alan’s testamentary capacity and said that he did not have the expertise to do so.
The High Court proceedings
[24] Diane and Pamela brought proceedings in the High Court which, in essence, attempted to claw back a substantial part of Nola’s estate and Alan’s assets (represented by much of the equity in Colin and Elaine’s farm). At the risk of repetition, the claims were against:
(a) Themselves, Alan, Colin and Mr Bellamy as trustees of Nola’s estate (the first respondents), seeking leave to bring a claim under the FPA out of time. They alleged that Nola had breached her moral duty to them to make adequate provision for their proper maintenance and support.
(b) Colin (the second respondent), for breach of fiduciary duty when entering into the second and third deeds. They sought an order setting aside the second deed, various declarations and monetary awards.
(c) Alan (the third respondent) and Colin, on the ground that Alan did not have the necessary mental capacity to enter into the second and third deeds, seeking orders setting aside these deeds and removing Alan as a trustee of Nola’s estate.
(d) Mr Bellamy (the fourth respondent), alleging breaches of contractual and tortious duties of care and fiduciary duties. They sought substantial damages from him.
(e) Mr Bellamy’s partners at the relevant time (the fifth respondents), alleging that they were jointly and severally liable with Mr Bellamy.
[25] Colin brought a cross claim against his parents’ estates under the Testamentary Promises Act 1949. He alleged that Diane and Pamela lacked standing to apply to set aside the second and third deeds but said that, in the event that those deeds were set aside, there should be an order setting aside the first deed as well. Colin also cross-claimed against Mr Bellamy in the event that he was found liable to his sisters.
[26] Harrison J made two important findings, neither of which was challenged on appeal:
(a) First, he found that Alan was incapacitated when all three deeds were made. That is, he was incapacitated from at least late 1999.[12] As a consequence, an application could be made on his behalf to set aside the deeds and related transactions.
(b) Second, he held that Mr Bellamy acted for all the parties to the deeds and other transactions, even though the interests of the various parties were in actual or potential conflict, and owed contractual, tortious and fiduciary duties to each, which he had breached.[13]
[27] Harrison J described the appellants’ primary claim against the trustees and Colin as being for an order granting leave to extend time for bringing an application against Nola’s estate under the FPA.[14] Under s 9 of the FPA, leave could not be granted if Nola’s estate had been finally distributed, which meant that the appellants had to succeed in having the second deed set aside. If they failed in that, they claimed damages from Mr Bellamy for the lost opportunity to pursue an FPA claim within time.
[28] Harrison J held that Diane and Pamela did not have standing to apply to set aside the second deed on the ground of Alan’s incapacity, relying on Scott v Wise.[15] In that case, this Court accepted that voluntary transactions will be avoided at the instance of the donor or his or her representative once lack of capacity is established, unless there is some equitable defence. The Judge also noted that the appellants had not attempted to set aside the first deed, which was made by Alan when incapacitated but operated to their advantage. He considered that the appellants were acting out of self-interest rather than attempting to restore to Alan what he had lost through the substantial breaches of trust that he had suffered.
[29] Harrison J also rejected the appellants’ challenge to the second deed based on Colin’s alleged breach of fiduciary duty to them. The Judge held that Colin did not owe Diane and Pamela fiduciary duties arising from their relationship as siblings or from any entitlement by them to place trust, confidence and reliance on him.
[30] For much the same reasons, Harrison J rejected the appellants’ challenge to the third deed. He also found that the trigger for the third deed was the desire of Diane and Pamela to acquire their inheritance, which Colin had accepted as being sensible.
[31] In relation to the appellants’ claim against Mr Bellamy, Harrison J found that he had breached his duties. He said:
[137] By way of summary, I repeat that Mr Bellamy owed duties – contractual, tortious and fiduciary – to each of the parties whom he represented in all the various transactions. Their interests were in actual or potential conflict. Most strikingly, Alan’s interest in the transactions extinguishing his life interest in Nola’s estate was different from those of his children, purportedly acting as trustees.
[138] Mr Bellamy candidly accepted that he never turned his mind to the question of a conflict. He was plainly in breach of his duties owed to individual participants from time to time. ...
[32] As to the appellants’ argument that Mr Bellamy owed them a duty to advise them of their right to pursue an FPA claim and breached it, the Judge said that he was not satisfied that either Diane or Pamela would have acted on independent advice had they been given it at the time of the first deed. In any event, the Judge considered that there was no real prospect of them bringing a successful FPA claim against Nola’s estate. He said:[16]
In my judgment a competent solicitor, exercising a reasonable standard of skill and care when instructed to advise Diane and Pamela of their FPA rights against Nola’s estate in 1999 and taking account of all relevant factors, was unlikely to have advised that they had a sustainable claim. Even if the solicitor gave affirmative advice, which was accepted, a claim would have had no reasonable prospect of success.
[33] The appellants’ second breach of duty argument concerned the dairy company shares. The appellants alleged that Mr Bellamy had a duty, which he had breached, to ensure that the dairy company shares were dealt with in accordance with Nola’s will. Harrison J noted that Mr Bellamy had assumed that WFGL owed the dairy company shares. Either he or Mr Hareb had arranged for Diane and Pamela to sign a transfer of the shares to Colin and Elaine on 27 April 2001. Mr Bellamy did not advise any of the parties of their rights and obligations in respect of the shares.
[34] The Judge concluded, however, that the dairy company shares were choses in action that were jointly owned by Alan and Nola. Accordingly, on Nola’s death her interest in the shares passed to Alan by virtue of transmission. As a result, when the shares were transferred to Colin in 2001, they were owned by Alan, not by Nola’s estate or by WFGL.
[35] Harrison J dismissed all of the appellants’ claims. However, he deferred entering judgment to enable Alan’s litigation guardian to consider whether he should intervene by way of counterclaim or cross-claim. Ultimately, the litigation guardian decided that it was unnecessary for him to take further action as Colin had entered into a deed which obliged him to continue to meet his father’s financial needs and provided security for that undertaking. Apparently, the litigation guardian also entered into a settlement with the fourth and fifth respondents.
[36] Subsequently, Woolford J ordered the appellants to pay costs to Colin of $106,928, together with disbursements of $31,372.22.[17]
Basis of appeal
[37] On appeal, the appellants pursue their claims against Mr Bellamy and his partners at the relevant time for equitable compensation for losses suffered as a result of Mr Bellamy’s breach of fiduciary duty and/or damages for negligence. They also appeal against Harrison J’s refusal to grant them leave to bring an FPA claim out of time. Finally, the appellants challenge Woolford J’s costs award against them. The respondents support the findings made by Harrison J in the High Court. In addition, the fourth and fifth respondents raise various defences, including as to limitation and contributory negligence, by way of a notice supporting the judgment on other grounds.
[38] The appellants applied for leave to adduce further evidence, on the basis that it is updating in nature. The evidence consists of an affidavit from Pamela addressing the question of what arrangements were reached after trial between Alan’s litigation guardian and Colin and between the guardian and Mr Bellamy and his partners. Pamela deposes that she received a copy of a deed of compromise dated 1 October 2010 between the litigation guardian and Colin. In the deed, the litigation guardian undertakes not to take action against Colin on Alan’s behalf in return for Colin’s undertaking to provide financial security for Alan so as to meet his needs for the rest of his life. Pamela also deposes that she does not know what arrangements have been made between Alan and Mr Bellamy and his partners. Finally, Pamela notes that she continues to visit Alan several times a week.
[39] We grant the appellants leave to adduce this evidence.
Discussion
[40] We propose to deal first with the appellants’ contention that Harrison J was wrong to refuse to grant them leave to bring an FPA claim out of time. We then turn to their claims against Mr Bellamy. Before we do so, however, we make four points:
(a) First, the effect of the deeds and other arrangements that were entered into in the three years after Nola’s death was to implement what all concerned considered to be the outcome of Nola and Alan’s wills. In particular, it was well understood and accepted within the family that Colin would receive the family farm.
(b) Second, the deeds and other arrangements were made against the background that Alan was being well cared for. The siblings were meeting his costs and Pamela in particular seems to have visited him regularly to see that his needs were being met.
(c) Third, in considering the actions of Diane and Pamela, account must be taken of the fact that they were lay people who had not at any stage been given an explanation of what their obligations as trustees of Nola’s estate were.
(d) Finally, it seems clear from the evidence that Mr Bellamy saw himself as the family’s lawyer and that in taking the actions he did, considered that he was doing what the family (including Alan and Nola) wanted done. Before us, there was no issue as to his bona fides.
Leave to bring an FPA claim out of time
[41] As we have said, s 9 of the FPA deals with limitations in respect of claims under the FPA. It provides:
Limitation of proceedings
(1) No application in respect of any estate shall be heard by the Court at the instance of a party claiming the benefit of this Act unless the application is made before the expiration of the prescribed period specified in subsection (2) of this section:
Provided that the time for making an application may be extended for a further period by the Court, after hearing such of the parties affected as the Court thinks necessary; and this power shall extend to cases where the time for applying has already expired, including cases where it expired before the commencement of this Act:
Provided also that no such extension shall be granted unless the application for extension is made before the final distribution of the estate, and no distribution of any part of the estate made before the administrator receives notice that the application for extension has been made to the Court and after every notice (if any) of an intention to make an application has lapsed in accordance with subsection (1) of section 48 of the Administration Act 1969 shall be disturbed by reason of that application or of any order made thereon, and no action shall lie against the administrator by reason of his having made any such distribution.
(2) The prescribed period mentioned in this section shall be,—
(a) In the case of an application by an administrator made on behalf of a person who is not of full age or mental capacity, a period of 2 years from the date of the grant in New Zealand of administration in the estate; and
(b) In the case of any other application, a period of 12 months from the date of the grant in New Zealand of administration in the estate.
[42] Accordingly, in a case such as the present an application:
(a) must be made within 12 months unless the Court grants leave; and
(b) cannot be made in any event if the estate has been finally distributed.
[43] Nola’s estate has been finally distributed unless the deeds are set aside and the various transactions unwound. Ms Hollings QC submitted that the deeds should be set aside on account of breaches of equitable duties by Mr Bellamy and of Alan’s lack of capacity. She argued that Harrison J was wrong to refuse to set the deeds aside because:
(a) contrary to his finding, Diane and Pamela do have standing to apply to have them set aside; and
(b) Diane and Pamela have not been guilty of self-dealing such as to preclude them from obtaining relief.
[44] As to the standing point, Ms Hollings said that throughout the period of the proceedings Alan was represented by a litigation guardian. The litigation guardian did not take an active part in the trial or in the appeal. However, he filed a memorandum at trial in which he said that he did not oppose the appellants’ claim (that the deeds of arrangement should be set aside) but appeared in order to preserve Alan’s rights. Ms Hollings argued that if the litigation guardian was not opposing the appellants’ claim he must have been supporting it, so that the appellants’ lack of standing should not have prevented the claim from succeeding. Ms Hollings noted that the litigation guardian showed an intention to bring a claim to have the deeds set aside but ultimately reached an out-of-court settlement with Colin and Mr Bellamy and his partners. Ms Hollings pointed out that the appellants were not invited to join this settlement and so should be allowed to proceed as if the litigation guardian had pursued a claim to set aside the deeds in court.
[45] Further, Ms Hollings sought to distinguish Scott v Wise by reference to O’Connor v Hart.[18] On the basis of the latter case, Ms Hollings submitted that, because the other parties to the deeds knew or ought to have known of the disability that Alan was under, Scott v Wise does not apply.
[46] We do not agree that Harrison J was wrong to refuse to set the deeds and other transactions aside. As to the standing point, we consider that Harrison J was right that this Court’s decision in Scott v Wise precludes Diane and Pamela from challenging the validity of the deeds: any challenge must be brought by or on behalf of Alan. The Court made it clear that voluntary transactions will be voidable only at the instance of the donor or his or her representative once incapacity is established. Where it is a contract that is sought to be set aside, the incapacitated person must also show that the other party knew of the incapacity.
[47] We do not agree that the effect of the litigation guardian’s actions was that Alan challenged the deeds. In reality, Alan, through the litigation guardian, stood by to observe how matters developed, eventually reaching an arrangement with Colin as to his future care. As noted above, that arrangement was that Colin would pay all of Alan’s costs for his hospital accommodation and care, in consideration for the litigation guardian’s agreement not to intervene in the proceedings.
[48] As to the self-dealing point, Ms Hollings argued that the appellants were not aware of the significance of their conduct as a result of Mr Bellamy’s failure to explain the full import of the transactions and their role in them. Indeed, she submitted, none of the siblings (as beneficiaries) were fully informed about the nature and implications of the deeds and other transactions, so could not genuinely consent to them. To the extent that there was any self-dealing, that simply added to the argument that the deeds at issue should be set aside. In this context, the appellants relied on the principle that where a trustee sells trust property to him or herself, the transaction is voidable at the suit of a beneficiary, citing Re Carrington; Chellew v Excell.[19]
[49] We do not accept these submissions. First, on the assumption that the deeds and other transactions were to be set aside, there is no real prospect that Diane and Pamela would succeed in an FPA claim in respect of their mother’s estate, as Harrison J found. Given the nature of Alan and Nola’s wills, both must be taken into account in the context of an FPA claim: it is artificial to consider one in isolation from the other. Once it is accepted that inequality of distribution among siblings is not the touchstone for court intervention under the FPA,[20] it is difficult to argue that Alan and Nola did not, between them, make adequate provision for Diane and Pamela, as the Judge concluded. The test is whether, viewed objectively, Nola (or more accurately Alan and Nola together) breached a moral duty to Diane and Pamela (which includes moral and ethical as well as financial considerations), judged by the standards of a wise and just testatrix/testator. While it is true that Colin received more than Diane and Pamela under the wills, that essentially reflected that (a) Colin (and Elaine) had worked on the farm for many years and made valuable contributions to it and (b) the family had always understood that Colin would receive the farm. Harrison J noted that the perception of inequality was exacerbated by the significant increase in dairy farm values that occurred after 2002. Putting that to one side, he considered, as do we, that Alan and Nola had “jointly and carefully” provided well for Diane and Pamela in the various assets they received: principally money, shares and an interest in their parents’ home.[21]
[50] Second, the proffered justification for the setting aside of the deeds and other transactions lies in Mr Bellamy’s breaches of his equitable duties. In this context, the question of the nature of Diane and Pamela’s conduct arises. Undoubtedly they acted in what they perceived to be their own interests in relation to the two deeds that affected them, namely the first and third deeds, in the sense that they obtained access to entitlements that would not otherwise have been available to them until after Alan’s death. But this was against the background that: (a) they thought Alan’s needs were being, and would continue to be, fully met; and (b) they did not understand their obligations as trustees of Nola’s estate. It is hardly surprising that they did not understand, given that they were lay people and their lawyer, Mr Bellamy, did not explain their obligations to them, either generally or in the context of what was occurring, presumably because he thought that it was consistent with what the family had always wanted (including Alan and Nola). Colin appears to have been in the same position as Diane and Pamela in this respect.
[51] But we do not see any breaches by Mr Bellamy as providing a basis for setting aside the deeds and other transactions. Although he was a trustee under the wills, Mr Bellamy did not acquire any trust property himself. While Diane, Pamela and Colin were trustees, they were also beneficiaries and the effect of what they did was mainly to accelerate their entitlements under their parents’ wills. (We say “mainly” because there is a question concerning the dairy company shares, as we discuss in the next section.) Accordingly, we do not see that the principle discussed in Re Carrington provides assistance. Moreover, the transactions have been implemented and it is no longer possible to restore the position to that existing previously (although full restoration of the position was not what Diane and Pamela sought).
[52] Accordingly, we reject this ground of appeal. Harrison J held that Diane and Pamela had been guilty of self-dealing of such a type as to disentitle them from relief. Because of their lack of legal knowledge or relevant advice and their efforts to ensure that Alan’s needs were fully met, we prefer not to rely on this as a disentitling ground.
Claim based on Mr Bellamy’s conduct
[53] Turning to the appellants’ claim against Mr Bellamy, the essence of Ms Hollings’ argument was as follows:
(a) Harrison J found that Mr Bellamy was “plainly in breach” of equitable duties owed to all parties, including the appellants, in relation to the various transactions.[22] Having made that finding, the Judge erred in failing to assess damages against Mr Bellamy for breach of fiduciary duties on the basis set out in Stevens v Premium Real Estate.[23]
(b) Moreover, Mr Bellamy was negligent in failing to give the appellants competent advice in relation to the third deed. His negligence in that respect has caused them loss, namely the assets that they would have received under Alan’s will that have in fact passed to Colin. In addition, they have lost what they would have obtained under an FPA claim against the estates of Nola and Alan.
[54] In relation to the negligence claim, we have already said that we do not accept that Diane and Pamela could have maintained a successful FPA claim against their parents’ estates.[24] Moreover, putting the dairy company shares to one side for the moment, we do not agree that as a result of the third deed, Diane and Pamela were deprived of interests in assets that they would otherwise have had under Alan’s will. Alan’s will was a mirror to that of Nola. Under it, Colin’s debt to Alan was to be forgiven; Colin was to receive Alan’s land and WGFL shares, with the exception of the homestead which was to go to Diane and Pamela; and Diane and Pamela were to share in Alan’s residuary estate. The arrangements effected under the third deed were broadly consistent with the will in these respects. While it is true that these arrangements occurred earlier than would otherwise have been the case, all three children benefitted from this.
[55] In our view, the key aspect to this part of the case is the dairy company shares, which must be considered in the context of the breach of fiduciary duty claim. Before Nola’s death, the dairy company shares were jointly owned by Nola and Alan. On Nola’s death in June 1999, they went by transmission to Alan. The Judge found that Alan was suffering under an incapacity from 1999, so that he was not able to gift the shares to Colin and Elaine. On his death, then, they would have formed part of his residuary estate and accordingly would have benefitted Diane and Pamela.
[56] Instead, a share transfer was completed in favour of Colin and Elaine, probably around June 2001, for no consideration. Mr Bellamy said in his evidence that he did not recall the transfer being prepared or signed (he did not sign it). However, he did send the transfer to the dairy company under cover of letter dated 14 June 2001 so that it could be actioned. Clearly, then, he knew about it.
[57] The Judge found that either Mr Bellamy or Mr Hareb arranged for Alan, Diane and Pamela to sign the share transfer[25] and described Mr Bellamy as having “simply actioned the share transfer that was presented to him”.[26] The Judge held that Alan had a claim against Mr Bellamy in relation to the dairy company shares.[27] However, he did not go on to consider whether that had any relevance to the position of Diane and Pamela, given that they were residuary beneficiaries under Alan’s will and the dairy company shares would have fallen into Alan’s residuary estate on his death.
[58] Although Diane and Pamela executed the share transfer, apparently as trustees of Nola’s estate, at no stage did Mr Bellamy explain the implications of the transfer for them, either as residuary beneficiaries under Nola’s estate (on the erroneous assumption that Alan and Nola held the dairy company shares as tenants in common) or as the beneficiaries to Alan’s residuary estate (given the true position that, from Nola’s death, all the dairy company shares were owned by Alan).
[59] There is no dispute that a solicitor owes a fiduciary duty of loyalty towards his or her clients. That includes an obligation not to act for two or more clients on the same transaction where their interests conflict, unless each client gives his or her fully informed consent.[28] One means of ensuring that informed consent is given is to see that the relevant client receives independent legal advice.[29]
[60] It is clear from Mr Bellamy’s file notes that he was aware that steps were to be taken in respect of the dairy company shares, as they record that he discussed at least one option with Colin. In forwarding the share transfer to the dairy company for completion, Mr Bellamy acted on behalf of all parties to the transfer, as he had throughout these various transactions. Given that (a) Mr Bellamy acted for all the parties throughout; (b) the shares were owned by Alan; (c) Alan was under a disability;[30] and (d) Diane and Pamela were Alan’s residual beneficiaries, the interests of Colin and Elaine on the dairy company share transaction were clearly in conflict with the interests of Alan and with those of Diane and Pamela. Although he was in a position to do so before the share transfer was completed, if not before it was executed, Mr Bellamy did not draw this conflict to the attention of the parties, nor did he advise any of them to seek independent legal advice. As a consequence he breached his fiduciary duty of loyalty both to Alan and to Diane and Pamela. Diane and Pamela suffered loss as a consequence, in the sense that the dairy company shares were removed from Alan’s residuary estate, of which they were the beneficiaries. They do not have a realistic basis for a claim against Colin and Elaine in respect of the shares given that they received them in good faith without knowledge of Mr Bellamy’s breach of duty. Accordingly, in principle at least, we consider that Diane and Pamela are entitled to equitable compensation from Mr Bellamy.
[61] An award of equitable compensation is, of course, discretionary. The court’s assessment of whether to make an award and, if so, in what amount, “will reflect that which the justice of the case requires according to considerations of conscience, fairness, and hardship and other equitable features such as laches and acquiescence.”[31] In this context, the “clean hands” concept is relevant. However, the requirements of foresight and remoteness applicable to common law damages do not apply to equitable compensation in the same way. As Tipping J said in Bank of New Zealand v New Zealand Guardian Trust Co Ltd:[32]
... once the plaintiff has shown a loss arising out of a transaction to which the breach was material, the plaintiff is entitled to recover unless the defendant fiduciary, upon whom is the onus, shows that the loss or damage would have occurred in any event, ie without any breach on the fiduciary’s part. ... Policy dictates that fiduciaries be allowed only a narrow escape route from liability based on proof that the loss or damage would have occurred even if there had been no breach.
This statement was approved by the Supreme Court in Amaltal Corp Ltd v Maruha Corp.[33]
[62] The question is, then, whether Mr Bellamy has discharged the onus on him to show that, without any breach on his part, Diane and Pamela would still have suffered the loss of the dairy company shares. We consider that he has not discharged that onus. Rather, we consider it likely that, if Mr Bellamy had not breached his duty to Diane and Pamela and had advised them to get independent legal advice, they would have acted on that. Had they done so, a competent lawyer, examining the background, would have realised that the dairy company shares had been jointly owned by Alan and Nola, so that Nola’s shares went to Alan on her death and that, on Alan’s death, the shares would go into Alan’s residuary estate for the benefit of Diane and Pamela. Having received that advice, we think it unlikely that Diane and Nola would have executed the share transfer in the way they did.
[63] For Mr Bellamy, Mr Till QC argued that Diane and Pamela could not have suffered any loss at the time of the dairy company share transaction as the shares belonged to Alan, so that the loss was his. However, that overlooks the point that Alan lacked capacity to make a disposition of the shares, so that they should have remained as part of his residuary estate. Mr Till also made the point that Mr Bellamy was not aware of Alan’s incapacity at the time as he was not told about it. He submitted that there was nothing to suggest that Diane and Pamela would have told an independent solicitor of that incapacity. This goes to the question whether Diane and Pamela have “clean hands”.
[64] However, as previously noted, it seems that both Diane and Pamela did not say anything to Mr Bellamy about Alan’s incapacity because they assumed he knew about it given his long-standing relationship with Alan. There is nothing to say that they would not have advised an independent legal adviser with no prior knowledge of the family of Alan’s condition.
[65] In our view, then, Mr Bellamy has not discharged the onus on him. This raises the question of relief. Before we address that, however, we must address several further arguments raised by the respondents.
[66] First, there is the argument that a substantial quantity of the dairy company shares (around 47 per cent) were held by Alan and Nola, and later by Alan alone, on trust for Colin and Elaine. This point was raised in oral argument by Mr Grace, although not in the written submissions filed on behalf of Colin (or Mr Bellamy and his partners). The point arises because when Colin and Elaine purchased the 53.6 hectare block from Alan and WFGL, a corresponding portion of the dairy company shares was not transferred to them. Mr Hareb said in evidence that the reason for this was that dairy company did not allow split ownership in relation to a single supplier number. Mr Bellamy’s evidence was to similar effect. Accordingly, it was claimed, the relevant portion of the dairy company shares was held by Alan and Nola in trust for Colin and Elaine.
[67] There are several difficulties with this argument. As we have said, it was raised only in oral submissions and then relatively briefly: no party addressed it in written submissions, including importantly the appellants. Colin did plead in his amended statement of defence that half the dairy company shares were beneficially owned by him and Elaine, and we were told that the point was pursued before Harrison J. Certainly, there was some relevant evidence before the Judge. However, Harrison J’s findings as to the ownership of the dairy company shares are inconsistent with the allegation. He found that Alan would have had a claim against Mr Bellamy for the full value of the shares.[34] Although he did not specifically address it in his judgment, it seems clear that that the Judge rejected Colin’s contention. Colin has not cross-appealed against the Judge’s decision in this respect. Against this background, we do not feel that we should take a view on appeal that is contrary to that which the Judge appears to have taken.
[68] Mr Bellamy and his partners advanced two affirmative defences, namely limitation and contributory negligence. In relation to limitation, they argued that breach of fiduciary duty was first alleged against Mr Bellamy in an amended statement of claim filed on 10 June 2009. The breach alleged was, they argued, essentially a breach of a duty to take reasonable care by failing to give proper advice. By analogy with the limitation rule applying to a claim based on beach of a tortious duty of care, they submitted that a six year limitation period should be applied.[35] They relied on the decision of this Court in Stratford v Shayle-George.[36]
[69] We do not consider that the analogy is apt, however. Mr Bellamy breached his fiduciary duties to Diane and Pamela by failing to alert them to the conflict of interest involved in the transactions and of the need to seek independent advice. He breached his duty of loyalty to them by placing himself in a position where he could not properly serve the conflicting interests of his various clients. We do not see this as essentially the same as a claim in negligence.[37]
[70] As to contributory negligence, the Supreme Court held in Amaltal v Maruha that it is no excuse in the context of a claim for breach of fiduciary duty for someone guilty of fraud to say that the victim should have been more careful and should not have been deceived.[38] We consider that a similar analysis applies in the present case. Further, it is difficult to conclude that lay people such as Diane and Pamela who have not been advised of their obligations have contributed to their loss.
[71] Returning to the question of relief, we see no reason why we should not exercise our discretion to grant Diane and Pamela equitable compensation. Mr Bellamy’s breach of duty was continuing and manifest. While it did take Diane and Pamela some time to bring their claims against him, given the family context and the long-term relationship between Mr Bellamy and the family that is, to some extent at least, understandable.
[72] As to quantum, we make the following points:
(a) The mistake as to the form of ownership of the shares affected the way the transfer was executed, Diane and Pamela apparently signing as trustees of Nola’s estate. As we have said, Alan was the owner of the shares at the time but he did not have capacity to agree to a transfer. On that basis, the shares would likely have fallen into his residuary estate for the benefit of Diane and Pamela (unless the power of attorney was exercised before that).
(b) Diane and Pamela were not farmers supplying the dairy company and so could not own the dairy company shares. At best they could hope to receive some value to reflect the fact that they were beneficiaries in Alan’s residuary estate, into which the shares would ultimately have fallen. In all probability, this would have come from Colin and Elaine as the shares would likely have been transferred to them, but for value rather than as a gift. Ms Hollings suggested that, had the shares remained in Alan’s residuary estate, he would have received income from them, which would also have fallen into his residuary estate to the ultimate benefit of Diane and Pamela. But even if the shares had remained in Alan’s name, given the nature of the arrangements concerning the running of the farm between Colin and Elaine on the one hand and Alan on the other, the income derived from the shares would have gone into the farming operations.[39] In short, we think it likely that, if they had been advised of the implications of the share transfer at the time, Diane and Pamela would have facilitated it (perhaps through the exercise of the power of attorney, which may have required an application to the Court) but in a way that recognised the shares’ value.
(c) Harrison J held that the value of the shares was $135,572 at the time the transfer was effected. If Alan had received that sum at the time of transfer as he should have, it would in all likelihood have formed part of his residuary estate and would have been available for distribution to Diane and Pamela on his death, subject to any depletion to meet his needs and to any accumulation of interest.
[73] In a situation such as this, where all parties have proceeded on the basis of a mistaken view of the legal position, it is difficult to reach an assessment as to equitable compensation. In the circumstances, however, we consider it appropriate to award equitable compensation to Diane and Pamela in the amount of $135,572, together with interest on that sum at the Judicature Act 1908 rate from 14 June 2001 (that is, the date on which Mr Bellamy sent the transfer to the dairy company for completion).
[74] The claim against Mr Bellamy and his partners included claims of $50,000 per appellant as general damages (presumably for stress) in reliance on Mouat v Clark Boyce (No 2).[40] We see no justification for such an award. The evidence establishes that the appellants participated in the various transactions discussed above without raising any concerns (although they were not, as we have accepted, aware of all the implications). It was not until sometime later, when farm values had increased significantly, that the appellants began to voice their discontent. We consider that this factor must be accommodated in the overall assessment.
Costs
[75] In relation to costs, the appellants say they have incurred costs totalling $416,670 for legal and experts’ costs in this Court and the High Court. We understood from what was said at the hearing that these were claimed as damages or equitable compensation. But the pleadings make no reference to such a claim and, in any event, the claim would not fit readily into the classes of case where costs may be claimed as damages.[41] Rather, the pleadings seek costs on a solicitor/client basis, which is the basis on which we shall proceed.
[76] Because the appellants have had some success against Mr Bellamy and his partners in this Court (and despite the fact that they have not succeeded on the FPA elements of their claims), we consider that they are entitled to an award of costs. However, we see no grounds to award costs on other than a usual basis. We do not consider that Mr Bellamy or his partners have acted in a way that would normally attract increased or indemnity costs. Accordingly, we consider that Mr Bellamy and his partners should be jointly and severally liable to pay costs to the appellants for a standard appeal on a band B basis.
[77] As to Colin’s position, he has an award of costs in his favour in the High Court. The appellants have appealed against that, on the ground that the claim in relation to Colin was to a large extent an FPA claim and the usual practice in such claims is that the costs of all parties are borne by the estate.[42] The appellants did not argue that this approach should have been adopted in the present case, given that the effect of the deeds and other transactions was that Colin had the bulk of Alan’s estate. Rather, they submitted that costs should simply have been left to lie where they fell.
[78] As Woolford J noted in his costs decision,[43] Harrison J made some preliminary comments about costs to the effect that the siblings might prefer to allow costs to rest where they fell and that he was conscious that counsel for the three siblings had made genuine efforts to resolve matters before and during the trial.[44] Despite that, Colin applied for an order for costs. In dealing with costs, Woolford J considered, but did not have regard to, certain Calderbank offers and there is no challenge to that. In making the award in favour of Colin, Woolford J noted that Harrison J considered the appellants were the driving force behind the various transactions and that Colin tended to take a passive role; that the appellants had been wholly unsuccessful in their claims; that the appellants had not suffered any loss and had raised the issue of their father’s incapacity for their own benefit; and that Colin had, through his solicitor, written to the appellants setting out the deficiencies in their claims prior to the trial.
[79] We are conscious, of course, that an award of costs is a discretionary decision. However, the appellants have now had some success, which undermines significant elements of Woolford J’s reasoning. Moreover, all three siblings were in a similar position in the sense that (a) they were lay people who were not properly advised of the implications of their actions; and (b) all took steps to ensure that their father’s needs were well met. While they all benefitted from what occurred, it was Colin who received the greatest benefit, at least in a legal sense. Woolford J took account of Harrison J’s observation that Colin had taken a more passive role in relation to arrangements effected by the deeds and other transactions than Diane and Pamela. The explanation for this may be that, at a practical level, the arrangements did not have any great immediate significance for Colin, in the sense that he was conducting the farming operations before they occurred and continued to do so afterwards. The nature of Nola’s will meant that Diane and Pamela received little immediate benefit from it (although they did, of course, benefit from Nola’s trust), so they had a greater incentive to have matters addressed. Taking all these factors into account, we are satisfied that we should quash the order for costs in the High Court and that costs in that Court should lie where they fell.
Decision
[80] We grant the appellants leave to file the additional evidence. The appeal is allowed. The fourth and fifth respondents are jointly and severally liable to the appellants in the amount of $135,572, plus interest on that sum at the Judicature Act 1908 rates prevailing from 14 June 2001 to the date of payment. The decision of the High Court as to costs is quashed. Costs in that Court are to lie where they fell. In this Court, the fourth and fifth respondents are jointly and severally liable to pay costs to the appellants for a standard appeal on a band B basis. We certify for two counsel.
Solicitors:
Glaister Ennor, Auckland for Appellants
Rice
Craig, Auckland for Second Respondent
Robertsons, Auckland for Fourth and
Fifth Respondents
[1] Simpson v
Walker HC Auckland CIV-2008-404-7381, 2 August
2010.
[2] At
[2].
[3] These subsequently became Fonterra shares when the New Zealand Co-operative Dairy Company Ltd, Kiwi Co-operative Dairies Ltd and the New Zealand Dairy Board merged to form Fonterra.
[4] Colin said in evidence that Alan bought out his siblings’ interests in the relevant land, although in fact it seems that Alan repaid a mortgage they held over the land prior to the sale to Colin and Elaine.
[5] Harrison J found that none of the children purported to exercise their powers as Alan’s attorneys during the events that followed: at [47].
[6] As Harrison J noted (at [158]), this bequest was based on a legal error because, if Nola pre-deceased Alan, her share in the homestead would have passed to Alan by transmission, their interest in the homestead being as joint owners rather than as tenants in common.
[7] This was an error by Mr Bellamy. The shares should have been valued at around $431,750.
[8] Diane and Pamela discontinued their payments in 2007 after Colin sold the farm, on the basis that the payments caused them financial hardship and Colin’s relative financial position enabled him to meet the full amount. They have continued to support and care for their father in other ways, however.
[9] There is an
executed share transfer in the record, dated 27 April 2001. A dairy company
employee, Ms Stuart, gave evidence that
the company would not have actioned that
transfer as it came at the time of the merger that produced Fonterra. She said
that the
company would have asked for a new transfer form after 1 June 2001.
She said that a transfer was effected around this time but a
copy of the
transfer is no longer available. The record shows that Mr Bellamy forwarded a
copy of an executed transfer to the dairy
company under cover of letter dated
14 June
2001.
[10] See
[26] below.
[11] It is not
clear on the evidence whether the dairy company shares were transferred as part
of the sale. It may be that Colin and
Elaine simply retained them given that
they purchased another
farm.
[12] At
[114]–[115].
[13]
At [138].
[14] At
[110].
[15]
Scott v Wise [1986] 2 NZLR 484
(CA).
[16] At
[164].
[17]
Simpson v Walker HC Auckland CIV-2008-404-7381, 10 February
2011.
[18]
O’Connor v Hart [1985] 1 NZLR 159
(PC).
[19] Re
Carrington; Chellew v Excell HC Auckland CIV-2008-404-302, 22 December
2008.
[20] For a
discussion of the relevant principles, see Vincent v Lewis [2006] NZFLR
812 (HC) at [70]–[81].
[21] At
[162].
[22] At
[138].
[23]
Stevens v Premium Real Estate [2009] NZSC 15, [2009] 2 NZLR
384.
[24] See [49]
above.
[25] At
[172].
[26] At
[165].
[27] At
[174].
[28] Haira v Burbery Mortgage Finance & Savings Ltd (in rec) [1995] 3 NZLR 396 (CA) at 405 and 408.
[29] Haira,
above n 28 at 405 and 408; Witten-Hannah v Davis [1995] 2 NZLR 141 (CA)
at 149 per Richardson J.
[30] Mr Bellamy
said, of course, that he did not appreciate
this.
[31] Day
v Mead [1987] 2 NZLR 443 (CA) at
462.
[32] Bank
of New Zealand v New Zealand Guardian Trust Co Ltd [1999] 1 NZLR 664 (CA) at
687.
[33] Amaltal
Corp Ltd v Maruha Corp [2007] NZSC 40, [2007] 3 NZLR 192 at [30]. See also
Stevens v Premium Real Estate, above n 23 at
[85].
[34] At
[173]–[174].
[35] See the
discussion in Andrew Butler (ed) Equity and Trusts in New Zealand (2nd
ed, Brookers, Wellington, 2003) at [38.1.3]. See also Johns v Johns
[2004] 3 NZLR 202 (CA) at
[80]–[81].
[36]
Stratford v Shayle-George [2001] NZCA 299; (2001) 15 PRNZ 573
(CA).
[37] Bank
of New Zealand v New Zealand Guardian Trust, above n 32 at 681.
[38] Amaltal v
Maruha, above n 33 at [23].
[39] From the
mid-1980s, the profit share from the farming operations as between Alan and Nola
and Colin and Elaine was 20:80 –
see [9] above. It is unclear how long
that arrangement continued, although it must certainly have ended with the
second and third
deeds in
2001–2002.
[40]
Mouat v Clark Boyce (No 2) [1992] 2 NZLR 559 (CA), especially at
569.
[41] See
Louise Merrett “Cost as Damages” (2009) 125 LQR 468.
[42] Reference was made to W M Patterson Law of Family Protection and Testamentary Promises (3rd ed, LexisNexis, Wellington, 2004) at [17.40].
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