Liong v Norton [2013] NZHC 1984 (8 August 2013)

Last Updated: 29 August 2013

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-2039 [2013] NZHC 1984

BETWEEN LISA LIONG Plaintiff

AND MAURICE KINGSLEY NORTON and NIGEL LAWRENCE FAIGAN being the Trustees and Executors of the Estate of Patricia Kathleen Petherick

First Defendants

AND MAURICE KINGSLEY NORTON Second Defendant

Hearing: 30 July 2013

Appearances: R J Connell for the Plaintiff

DRI Gay for the First Defendants

G C Jenkin for the Second Defendant

Judgment: 8 August 2013

_{JUDGMENT OF BROWN J}

This judgment was delivered by me on Thursday 8 August 2013 at 12.00 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date:...............................

Solicitors/Counsel:

R J Connell, Connell & Connell, Auckland

D R I Gay, Barrister, Auckland

N L Faigan, Barrister & Solicitor, Auckland

G C Jenkin, Barrister, Auckland

J Ray, Wadsworth Ray, Epsom, Auckland

LIONG v NORTON & ORS [2013] NZHC 1984 [8 August 2013]

[1] By interlocutory application in CIV-2012-404-2039 the plaintiff seeks an order transferring to the High Court proceedings between the parties in the Family Court under FAM-2011-004-002930 commenced by the plaintiff under the Law Reform (Testamentary Promises) Act 1949, together with a direction that those proceedings then be heard with this proceeding.

Background

[2] In 2011 the plaintiff commenced proceedings in the Family Court for orders against the executors and trustees of the estate of the deceased, Patricia Kathleen Petherick, pursuant to the Law Reform (Testamentary Promises) Act 1949 (“the Act”).

[3] Later in 2011 the plaintiff commenced this proceeding which seeks an order that the second defendant’s interest in the deceased’s last will be set aside or in the alternative an order recalling probate granted on 18 November 2011 in CIV-2011-

404-7247.

[4] In 2012 the plaintiff made an application in the Family Court proceeding under s 5(3) of the Act, seeking to have the Family Court proceeding referred to the High Court. Section 5(3) states:

If a Family Court Judge is of the opinion that any proceedings under this Act, or any question in any such proceedings, would be more appropriately dealt with in the High Court, the Judge may, upon application by any party to the proceedings or without any such application, refer the proceedings or the question to the High Court.

[5] That application was considered by Judge D A Burns at a judicial conference on 13 August 2012. In a judgment delivered on 17 August 2012 the Judge directed that the testamentary promises proceeding was to remain in the Family Court at Auckland and not to be transferred to the High Court. No appeal was filed against that decision.

[6] The Family Court proceedings have since progressed in that Court and the matter has been allocated a three day back-up fixture for 14-16 August 2013 and a

firm fixture for 25-27 November 2013. The current High Court proceeding has an eight day fixture commencing on 14 October 2013.

[7] The current application is made in reliance on s 5(4) of the Act which states:

The High Court, upon application by any party to any proceedings pending under this Act in a Family Court, shall order the proceedings be removed into the High Court unless it is satisfied that the proceedings would be more appropriately dealt with in the Family Court. Where the proceedings are so removed, they shall be continued in the High Court as if they had been properly and duly commenced in that Court.

The jurisdiction to transfer

[8] Since 1 July 1992 the High Court and the Family Court have had concurrent jurisdiction in respect of proceedings under the Act. However the subsections relating to transfer of proceedings between courts quoted above are structured differently. The Family Court has a wide discretion to transfer, not constrained by anything other than the Judge’s opinion of appropriateness, either on application by a

party or of the Judge’s own accord.1

[9] By contrast on application made to the High Court a transfer is mandatory unless the High Court is satisfied that the proceedings would more appropriately be dealt with in the Family Court. Hence on an application made to the High Court the respondent has the onus of showing that it is more appropriate for the case to remain in the Family Court.2

[10] So far as the mode of application is concerned, at the commencement of the hearing I raised with Mr Connell a concern as to whether the matter was properly brought as an interlocutory application in the present proceeding and I suggested that the appropriate form of application might be an originating application. Mr Connell appearing to accept the validity of that view, I then indicated that I would be prepared to treat the interlocutory application as having been made as an originating

_{application which I now do.}

1 _{Veltrone v Gray [2012] NZFC 1005 at [22]-[23].}

2 Selkirk v Selkirk [1987] 1 NZLR 105, 107 (CA); Benton v Hill [1996] NZFLR 249, 251.

The application and notices of opposition

[11] The grounds in support of the contention that the Family Court proceedings are more appropriately dealt with in the High Court are in summary:

(a) The Family Court proceedings involve a substantial claim and the High Court proceedings, which were issued subsequently, are directly related to the Family Court proceedings, involve the same parties and the evidence in one matter bears on the issues in the other.

(b) The plaintiff’s standing in the High Court proceedings may require a

determination of the issues in the Family Court proceedings.

(c) Both matters are well progressed but the plaintiff’s financial resources militate against the additional expense of running related matters in two courts.

[12] The grounds upon which the defendants contend that the Family Court proceedings would more appropriately be dealt with in the Family Court include:

(a) The Family Court claim is a straightforward claim involving standard issues of alleged promises, alleged services provided, nexus and exercise of discretion;

(b) The outcome in the High Court proceeding would have no bearing on any award in the Family Court proceedings.

(c) The similar application made in 2012 was declined by Judge Burns in the Family Court. No appeal was brought and the earlier outcome gives rise to an issue estoppel.

[13] The first defendant also presented an argument in reliance upon Thomas v Brougham3 to the effect that what were described as “serial transfer applications” should not be permitted.

Issue estoppel

[14] The second defendant (who assumed the primary carriage of this particular point) contended that an issue estoppel arose from the reasons for decision given by Judge Burns. Those reasons were summarised by counsel as follows:

(a) There would be no appreciable difference or effect to any award if the proceedings in the High Court were successful.

(b) The proceedings in the High Court are discrete and do not involve issues of duplication (apart from a small degree) which are sufficient to justify amalgamation or being dealt with at the same time.

(c) The proceedings before the Family Court do not involve any issues of great complexity.

(d) Even if the proceedings in the High Court are successful that will not impact upon the claim before the Family Court.

(e) If the Family Court proceedings were resolved by agreement at a settlement conference in the Family Court it would be likely that the High Court proceedings would be discontinued.

(f) If the proceedings were transferred to the High Court there could be further delay in dealing with the claim under the Act.

[15] The second defendant contended that the plaintiff simply wished to re-argue these issues but that it was precluded from doing so by the principles of issue

3 Thomas v Brougham (1981) 4 MPC 200.

estoppel recently summarised in the judgment of Associate Judge Osborne in Minter

Ellison Rudd Watts, ex parte Hampton.4

[16] While I recognise that Judge Burns inevitably had regard to essentially similar considerations as also arise on the current application, it is well recognised that the justice of the case must be compelling before a decision which is in substance interlocutory is held to prevent the later ventilation of an issue: Joseph Lynch Land Co Ltd v Lynch.5 The Court of Appeal there noted that the ultimate question is concerned not so much with the character of the earlier decision (i.e. whether it should be regarded as final or interlocutory) but rather whether in the circumstances it is reasonable to regard the earlier decision as a final determination

of the issue which one of the parties subsequently wishes to raise.

[17] Given not only the structure of s 5 which provides for the facility of applications to both the Family Court and the High Court but also the fact that subss 3 and 4 are cast in different ways, in particular the mandatory aspect of subs 4 and the reversed onus, I do not consider that it would be appropriate to treat the plaintiff as being estopped from revisiting at a later point in time in the High Court the possibility of transfer of the proceedings. Consequently I reject the contention that an issue estoppel arises in the present circumstances.

The “serial transfer applications” argument

[18] For the first defendant an argument was mounted which was essentially to the effect that a party is required to make an election between applications under subs 3 and under subs 4. Counsel cited the decision of Grieg J in Thomas v Brougham6 which involved an essentially similar scenario to the present case but under s 22(3) of the Matrimonial Property Act 1976.7 The judgment contains the following passage:

As I have noted there was an application under s 22 to the District Court which was refused. There was a right to appeal against that interlocutory decision under s 71A of the District Court Act 1974. That requires the leave

4 _{Minter Ellison Rudd Watts, ex parte Hampton [2012] NZHC 1715.}

5 _{Joseph Lynch Land Co Ltd v Lynch [1995] 1 NZLR 37, 43 (CA).}

6 _{Above n 3.}

7 Prior to the amendment made on 1 July 1994 to substitute the word “may” for “shall”.

of the District Court. In this case such leave was not granted and it is for that reason the appeal has been abandoned. That would have been an appeal against a discretion or the exercise of a discretion and raises particular principles for its hearing and resolution in this Court. On the other hand the application now made under subs 3 of s 22 puts the onus on the respondent and avoids the difficulties which might arise under an appeal against the District Court’s decision on an application under subs 2 of the same section. It is not easy to construe s 22 and a number of observations have been made by this Court and other persons as to the anomalous situation which arises from the concurrent jurisdiction. I cannot believe however that it was intended that a party who wished to have proceedings transferred out of the District Court was to have three arrows in their quiver, one at least of which is a sharper weapon than the other two. It seems quite wrong that there could be an application in the District Court, an appeal against that and an originating application in the High Court when that has a different onus than the other two.

In my view once the party has chosen the subsection under which the application is to be made, that is the end of the method of application and the party cannot then seek to remedy the matter by choosing one of the other subsections. In my view then on that alone the daughter and her counsel had exhausted their rights under s 22 by their application to the District Court and had no right to apply again here. The application is dismissed.

The first defendant submitted that precisely the same reasoning would apply in the present case.

[19] While I agree that the scenarios are essentially the same and that the archery metaphor has considerable attraction from a practical perspective, I am unable to read s 5 as requiring an applicant to make an election as to which of the two fora in which to make an application for transfer. To do so would preclude a later application at a time when circumstances may well have changed such that a revisitation of the issue was justified. While I consider that the fact of a previous application to a different court is a factor which may come into play on the evaluation of the issue of appropriateness in a subsequent application to a different court, I find myself unable to accept the proposition that s 5 imports an implicit election requirement and that, an election having been made, the entitlement to make a further application under a different subsection is exhausted.

Have the defendants discharged the onus in the present case?

[20] As noted above, although this is the plaintiff ’s application, it is for the respondents to satisfy me that the Family Court proceedings would more

appropriately remain in the Family Court. In considering this phrase in Selkirk v Selkirk8 the Court of Appeal noted the Shorter Oxford English Dictionary meaning of appropriate as “specially suitable, proper”. The word was said to be one of wide application and the phrase can include the possibility of an early hearing as one factor among all relevant circumstances to be taken into account.

[21] In the particular circumstances of the present case I am satisfied that the testamentary promises proceeding is more appropriately dealt with in the Family Court. My reasons are as follows.

[22] Notwithstanding Mr Connell’s valiant efforts to support the proposition that the plaintiff’s two proceedings are inextricably linked, I agree with Judge Burns’ analysis that, save to a small degree, the two proceedings do not involve issues of duplication. While counsel will be the same and some of the witnesses may be the same (although Mr Gay took the position that there would be no need to receive evidence in the High Court proceeding from the plaintiff, her husband or children unless they could provide direct testimony on the issue of undue influence) the subject matter is essentially distinct.

[23] Mr Connell made the point that discovery in the High Court proceeding did not occur until after the date of delivery of Judge Burns’ decision. Although I have considered the various documents which Mr Connell took me to in the course of argument I am unable to accept that such documentation would have led Judge Burns to a different conclusion. The significance which the plaintiff appears to attach to the discovered documents is that they supposedly provide insight as to why the deceased may have been strongly influenced not to follow through with her testamentary promise. However the issue in the Family Court proceedings is whether or not the promise was made in the first place.

[24] In any event discovery was made five days after the release of Judge Burns’ decision with inspection taking place some weeks later. If the discovery documents had been viewed by the plaintiff as being so significant, it is a little surprising that

_{no appeal was lodged against Judge Burns’ decision.}

8 Above n 2.

[25] Secondly the testamentary promises claim has now been advanced in the Family Court for almost a year since Judge Burns’ decision and both back up and firm fixtures have been allocated in that Court. The reasonably imminent hearing and determination of the Family Court proceeding would be lost if that proceeding was transferred to the High Court at this late stage.

[26] On the basis of Mr Gay’s submission I do not consider that the answer lies in

the fact that the High Court proceeding has a fixture due to commence on 14

October. In his submission the addition of the testamentary promises claim to the High Court claim would have the effect that the High Court fixture would have to be vacated in order for there to be sufficient time to hear both matters together.

[27] Mr Connell argued that if undue influence was proved, that would significantly impact not only on the issue of competing claims but also on the size of the estate available to remedy the testamentary promises claim, citing AES v New Zealand Public Trust.9 Mr Gay countered with two propositions. First, the size of the estate is not altered as a consequence of the High Court proceeding, even if the plaintiff was entirely successful there. Secondly, the plaintiff’s claim in the Family

Court cannot exceed the reasonable value of the services she provided, even if the alleged promise is virtually the entire estate, citing Re Welch10 and Re Collier- Cambus (dec’d); Olsen v Cambus.11 He submitted that how the estate would devolve is irrelevant to the task of quantification.

[28] While I tend to the view advanced by Mr Gay, this issue is not one on which I place much weight in considering the issue of appropriateness given the significance of the other factors to which I have referred.

[29] The defendants’ onus may have been more difficult to discharge if the present application had come before me at a much earlier stage in the history of the proceedings. However in the particular circumstances with which I am presently

_{confronted the defendants have discharged the onus of satisfying me that the Family}

9 _{AES v New Zealand Public Trust [2010] NZFLR 1085.}

10 _{Re Welch [1989] 2 NZLR 1 (CA).}

11 Re Collier-Cambus (dec’d); Olsen v Cambus [1994] NZFLR 520.

Court proceedings are more appropriately dealt with in the Family Court where the result of the proceeding is likely to be known before the end of 2013.

Disposition

[30] The application is dismissed. The defendants are entitled to costs on a 2B

_{basis for an originating application.}

Brown J