Ireland v Grant [2014] NZHC 613 (31 March 2014)

Last Updated: 11 April 2014

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

CIV 2014-412-000014 [2014] NZHC 613

BETWEEN DENNIS PAUL IRELAND and ANGELA CATHERINE IRELAND

Appellants

AND STEPHEN JOHN GRANT and DAVID JAMES SMILLIE

First Respondents

AND ROLIEN GEERTRUIA BUSCH Second Respondent

Hearing: 24 March 2014

Counsel: L A Andersen for Appellants

J K Hambleton for First Respondent

T J Shiels QC for Second Respondent

Judgment: 31 March 2014

_{JUDGMENT OF WHATA J}

[1] The appellants, Dennis Ireland and Angela Ireland, did not satisfy the District Court that Betty Osmand (now deceased) promised them a farm located in Macandrew Bay, Dunedin.

[2] They appeal to this Court claiming that the District Court erred in determining that a promise of testamentary disposition was not made and in finding that the appellants fabricated and manipulated evidence.

[3] This matter is set down for hearing on 6 June 2014. Dennis and Angela now seek leave to file further evidence from Katherine Forsdyke (Angela’s mother) said to support their evidence that a promise was in fact made. That application is

_{opposed by the respondents.}

IRELAND v GRANT and SMILLIE [2014] NZHC 613 [31 March 2014]

[4] The jurisdiction to receive further evidence is expressly provided for at s 5A(5) of the Law Reform (Testamentary Promises) Act 1949. It is self explanatory. That section states:

5A Right of appeal

...

(5) The High Court ... may, in its discretion, rehear the whole or any part of the evidence, or may receive further evidence, if it thinks that the interests of justice so require.

[5] Furthermore, given that this is a general appeal,¹ I must approach the application on the basis that this Court must ultimately reach its own view on the merits.²

Procedural background

[6] Ms Hambleton for the first respondents helpfully set out the procedural background. I adopt it:

(a) The Applicants applied to the Family Court for orders under the (sic) The Law Reform (Testamentary Promises) Act 1949 on 23 July

2012.

(b) Mrs Forsdyke swore an affidavit in support of the Applicants on 20

May 2013.

(c) On 30 July 2013 a Judicial Conference was held in the Dunedin Family Court. The Presiding Judge initiated discussion about evidence being given by audio visual link (“AVL”) because there were two witnesses living at a distance, Mrs Forsdyke for the Appellants and Donna Ropata for the First Respondents. The Judge was supportive of evidence being given by AVL, indicated facilities locally where evidence could be heard and referred to the time delay in such a way that it was clear that was not an obstacle for the Court.

(d) The First Respondents gave notice that Mrs Forsdyke was required for cross examination on 2 September 2013.

(e) A Pre-Trial Conference was held on 16 October 2013. At that Conference, Counsel for the Appellants indicated that Mrs Forsdyke would be giving evidence by AVL suggested that her evidence could be given on the Friday of the fixture at 10.00 am New Zealand time, which would be 10.00 pm in the UK.

¹ _{Refer s 5A(1A).}

² Refer Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141;

and K v B [2010] NZSC 112, [2011] 2 NZLR 1.

(f) When the fixture began on 24 October 2013 it was apparent that the Appellants had not been able to arrange an AVL link and, the fact that she would not be giving evidence, was clear when the Appellants closed their case on Tuesday 29 October 2013.

District Court decision

[7] It is quite plain that the District Court did not accept the evidence given by the appellants as to the existence of an express or implied promise by Betty to leave the farm to them.³ Indeed, the Judge doubted their credibility on several key issues. I will now summarise the relevant findings.

No express promise

[8] The Judge observed:⁴

[108] I find that there is insufficient evidence to establish as a fact that a required promise was expressly made by BO to DI or AI. This is so whether considering each of the pieces of evidence independently or collectively. Ultimately the evidence promoted by the applicants does not support a conclusion that BO expressly promised the farm to them as reward for work done or services rendered.

No implied promise

[9] The Judge also examined whether or not there was an implied promise. The Judge recorded that the applicants claim that they left an idyllic and happy life in England to come to New Zealand to live near Betty, support her and work on the farm.

[10] The Judge observed:⁵

It is important to consider the evidence that is available and that includes an amount of evidence which has been obtained by the respondents to show that the applicants’ financial position in England was not good as they claim.

[11] And further:

[134] I accept that despite limited profits and financial difficulties, there is evidence that the family lived what can only be described as an affluent

³ _{Ireland v Grant & Anor [2013] NZFC 8802.}

⁴ _{The Judge referred to the parties using their initials.}

⁵ At [127].

lifestyle in a pleasant village in England, the three children attending a private school and enjoying the opportunity to be involved in the village community, but it is conceivable that the family lived beyond its means.

[12] The Judge then said:

[135] The available evidence in relation to the financial state of the company and its winding up supports a conclusion that DI experienced financial difficulty in England and that his decision to relocate the family to New Zealand was very likely motivated by those problems and the opportunities available here.

[13] The Judge then examined a claim by the applicants that a Versatile cottage was built on the farm to accommodate them and that Dennis was involved in its construction and that they helped fund the building of it.

[14] The Judge was very critical of these claims. His Honour observed:

[139] Again, the evidence is extremely limited. DI claims that on his numerous trips to New Zealand prior to 1998 he brought funds with him – up to £3,500 on each occasion – for the purpose of meeting the costs of building the cottage. However, there is absolutely no evidence to support this and I am satisfied that such evidence could have been obtained. Any withdrawals of such sums of money would be evident from bank records available to DI from his bank in England, but none have been sourced. Nor is there any evidence to establish that DI paid money directly to BO or Versatile Homes Limited or of any contract between DI and BO or between DI and that company. Such evidence could have been obtained from banks in England or New Zealand or from Versatile Homes Limited.

[15] The Judge then contrasted the evidence for the respondents which shows, he said, that Betty had sufficient funds saved from the existing homestay business.

[16] It is further clear that the Judge did not have faith in the evidence presented by the appellants. For example he noted:

[145] It is also relevant that following the fire, the applicants entered into a tenancy agreement with BO. While both DI and AI were particularly vague to the point of being evasive about this, it is apparent that the agreement related to the Versatile cottage. The evidence is that the agreement was entered into to enable receipt of insurance payments.

[17] There are other passages criticising the evidence given by Dennis and

Angela, for example observing that an alleged agreement makes “very little sense,”

and expressing concern about the evidence which the Judge says “calls into question the legality of the applicants’ actions”.

[18] The Judge ultimately concluded that provision of accommodation in the form of the Versatile home was nothing more than “a gesture of goodwill, founded on natural love and affection, as is often the case when families emigrate”.⁶

[19] The Judge also rejected the applicants’ claim that they provided considerable amounts of financial support to Betty.⁷ The Judge refers to Dennis’ position as “confusing”.⁸ He said that the evidence given in relation to Betty’s financial situation does not support the applicants’ proposition.

[20] The Judge concluded:

[161] I have no doubt that BO had funds available via the homestay business and sale of sections and was able to travel on a reasonably regular basis as well as meet her living and personal costs. The evidence does not support a conclusion that she experienced financial difficulties such that DI and AI provided considerable financial support to her.

[21] The Judge recorded that it was also Dennis’ position that he made frequent trips to New Zealand during which he worked on the farm, and that his “primary purpose for returning to New Zealand was to assist Betty on the farm”.⁹

[22] The Judge found this:¹⁰

... surprising and unlikely given the evidence of the close knit family unit and ....his primary reason for returning was to see his wife and daughters over the Christmas period.

[23] The Judge specifically rejected the evidence of both Dennis and Angela that Dennis returned to New Zealand on at least three occasions during 1999 in order to work on the farm. He ultimately found that the primary purpose of Dennis’ trips to

_{New Zealand was to have a holiday and spend some time with Betty.}

⁶ _{At [152].}

⁷ _{At [159].}

⁸ _{At [154].}

⁹ _{At [163].}

¹⁰ At [163].

[24] The Judge also rejected the claim by the applicants that they had done a considerable amount of work for Betty personally as well as on and around the farm property. His Honour observed:¹¹

A closer analysis of what the applicants’ (sic) claim in their joint affidavit has caused me some alarm. For example, it is claimed that on every trip to New Zealand made by the family from as far back as 1981, each of them worked full time 40 hours a week on the farm. There is no reference to care of the children or any holiday activities. This is surprising given references by their daughters to activities including travelling as a family and staying with an aunt in Timaru for periods of a week or more.

[25] The Judge specifically rejected Angela’s evidence that she claimed to have worked 40 hours a week on the farm while also working 20 hours a week at the hospital and as sole cook and caregiver to the young children. He also rejected Dennis’ evidence as to his workload on the farm referring to other evidence about his activities, including the evidence of the daughters that he would take them riding etc.¹²

[26] Indeed, the Judge was “left with the distinct impression that the applicants have been less than truthful”. ¹³

[27] He also rejected their evidence as to the nature of the relationship with Betty observing that it was not an entirely harmonious relationship at all times.

[28] The Judge thus concluded in relation to the alleged implied promise:

[182] Having regard to the evidence that I have considered, I cannot conclude that an implied promise existed here. The evidence of any statement from which a promise might be implied or inferred is extremely limited. The evidence in relation to relevant surrounding circumstances to be considered in conjunction with any statement adds very little and does not enable such a conclusion. I do not find, having regard to all of the evidence, the applicants could reasonably have supposed the intention of BO to be a promise of testamentary provision in exchange for work or services.

[183] Further, the applicants have sought to construct a promise through their account of services rendered and work done. However, given the serious credibility issues I have identified with that evidence, I do not find it to be consistent or reliable. There is also considerable evidence to the

¹¹ _{At [169].}

¹² _{At [173].}

¹³ At [177].

contrary. In the end, I find the existence of a promise from this perspective to be illusory.

[29] Overall the Judge then found:

[199] In the end I am drawn to the conclusion that the applicants’ claim was motivated by an overwhelming sense of entitlement, associated with a perceived opportunity which was very much sought after given their circumstances. But the evidence simply does not support their claim that a promise of testamentary disposition as reward for services rendered or work done was made.

The proposed further evidence

[30] The proposed further evidence is contained in a one page statement appended to this judgment as Attachment A.

[31] For present purposes key aspects of the evidence appear to be that they corroborate the account given by Angela and Dennis including that one of the reasons why they travelled to New Zealand was the security they would have from being the eventual owners of “Betty’s farm”.

Grounds for application

[32] Mr Andersen submits that the following grounds justify the order sought, namely:

(a) Katherine Forsdyke swore an affidavit dated 20 May 2013 which was evidence in the Family Court proceedings;

(b) Katherine Forsdyke was unable to be cross-examined during the Family Court proceedings as she resides in England and no satisfactory audio visual arrangements could be made;

(c) The Appellants will argue on appeal that the evidence of Katherine Forsdyke should properly have been treated as admissible evidence in the proceedings either because she provided an affidavit or as admissible hearsay under section 18 Evidence Act 2006;

(d) The Learned Family Court Judge made no reference to the evidence of Katherine Forsdyke in the decision despite its relevance to the matters in issue;

(e) It is in the interests of justice that the evidence of Katherine Forsdyke be admitted in the proceedings so the Respondents have the opportunity to cross-examine her.

[33] Item (d) could not possibly be a proper ground for leave, given that the appellants elected not to call Mrs Forsdyke.

Jurisdiction

[34] The statutory threshold stated at s 5A(5) for receipt of further evidence is simply that I think the “interests of justice so require”.¹⁴ The High Court Rules demand “special reasons” to admit further evidence in general appeals.¹⁵ But the express statutory threshold is to be preferred.¹⁶ Nevertheless, the jurisprudence attaching to the High Court Rules and the Court of Appeal Rules provides guidance

as to what the interests of justice require. The upshot is that the discretion to allow further evidence on appeal should be used sparingly. Relevantly, the Court of Appeal observed in ICE SA:¹⁷

[14] ... “The Court may, on the application of a party, grant leave for the admission of further evidence ... by ... affidavit ...”. As set out in McGechan on Procedure, the principles governing the admission of further evidence on an appeal to this Court are:

(a) Litigants have a duty to adduce at trial all their evidence, reasonably discoverable.

(b) The constraints on the admission of further evidence are very strict. Evidence which is not fresh should only be admitted in exceptional and compelling circumstances, and will also need to pass the tests of credibility and cogency.

(c) While a balancing of the interests of the applicant and opposing parties is required, the aim is to ensure that parties put their best case at trial and that the public resources of the Court system are not wasted.

[35] In light of this, and the several cases cited to me by counsel,¹⁸ I will examine:

(a) Whether the evidence could have been produced at first instance with reasonable diligence;

¹⁴ _{Section 5A(5)}

¹⁵ _{High Court Rules, r 20.16.}

¹⁶ _{Rule 20.1(3).}

¹⁷ _{ICE SA v Swatch AG [2013] NZCA 654.}

¹⁸ Refer, for example, Oceanside Developments Ltd v Cutler HC Christchurch CIV 2009-409-835,

21 August 2009; ICE SA.

(b) Whether the evidence could have had a material influence on the outcome in the District Court; and

(c) Whether the evidence is credible and cogent (and so might materially affect the outcome of the appeal).

[36] I will then return to the ultimate issue, namely whether it is in the interests of justice to allow Mrs Forsdyke to present her evidence.

Assessment

Was the evidence producible at first instance with reasonable diligence?

[37] The affidavit evidence is that:

6. Efforts were made to try and arrange for audio visual facilities so that my mother could be cross-examined whilst in England. Unfortunately, the 12 hour time difference meant that the examination would have to be late at night and we could not find any audio visual service in England near to my mother that would provide this service.

[38] Counsel for the respondents asserts, in the face of this evidence, that in fact the appellants should have been able to arrange an audio visual link and the evidence is insufficient to justify the conclusion that reasonable steps were taken to obtain audio visual linkage.

[39] There is some merit to the respondents’ submissions. The appellants are seeking the exercise of discretion to allow further evidence and should produce evidence of sufficient detail to show that reasonable steps were taken. I am nevertheless going to proceed, in light of the uncontradicted affidavit evidence, on the basis that the appellants diligently tried but failed to establish a workable audio visual link during the hearing. Faced with this difficulty, I accept that they could not then, during the trial, produce the evidence now sought to be produced in this Court.

Would the proposed evidence have had a material effect in the District Court?

[40] I have essayed in some detail the decision of the District Court. It will be abundantly clear that the Judge did not accept the evidence of the appellants in several key respects, including on whether a promise was made, whether the appellants did considerable work for Betty, and whether they returned to New

Zealand to help Betty.¹⁹ Indeed he said that:²⁰

The evidence of any statement from which a promise might be implied or inferred is extremely limited.

[41] The Judge’s assessment of their evidence was equally adverse:²¹

... given the serious credibility issues I have identified with that evidence, I

do not find it to be consistent or reliable.

[42] I think it can be fairly argued that Mrs Forsdyke’s evidence corroborates, in part, the accounts given by the appellants and in particular their evidence that the farm “would be all theirs one day”.²² She says (for example) that:

“When in New Zealand Betty spoke to me about the farm and said it was security for Dennis and Angela and suggested Dennis was already part owner as she said it was jointly owned by her and Dennis”.

[43] Without cross examination it is difficult to put the persuasiveness of this evidence at more than arguable, but assuming it stood up to scrutiny, it could have provided some buttressing to the otherwise clearly adverse view taken by the Judge to the appellants’ evidence. He may have paused to frame the evidence of the appellants in light of Mrs Forsdyke’s account of what was said to her by Betty.

[44] I nevertheless put the prospect of a different result in the District Court, in light of Mrs Forsdyke’s evidence, as low. I cannot read the decision of the District Court without a firm sense that the Judge simply did not accept the account given by the appellants, given the raft of concerns he identified about it. For example, the

_{Judge’s impression that the appellants were “less than truthful” about the number of}

¹⁹ _{Refer above at [28]29].}

²⁰ _{At [182].}

²¹ _Ibid.

²² Refer [25] of the District Court judgment.

hours of work undertaken by the appellants on the farm is particularly salutary. The

Judge was:²³

left with the distinct impression that the applicants have been less than truthful.

Is the evidence credible and cogent?

[45] On its face, the proposed evidence is credible. It is simply a narrative of what Mrs Forsdyke said happened. There is no hyperbole or obviously contrived detail. It simply records that Dennis and Angela made the decision to move to Dunedin from England in 1996 and that she was “saddened and devastated at the prospect of my family living thousands of miles away.” She then refers to an assurance by the appellants “of the benefit of going to New Zealand which was mainly the security they would have from being the eventual owners of the (sic) Betty’s farm”. There is then, at paragraph 6 a reference to a trip to New Zealand in 1995 where she says Betty said the farm “was security for Dennis and Angela and she suggested Dennis was already a part owner as she said it was jointly owned by her and Dennis”. She also refers to three trips to Dunedin in 1995, where she says Betty “insinuated Dennis was her and Alf’s adopted son...”

[46] As to cogency, Ms Hambleton for the first respondents contends that:

(a) Paragraph 6 is hearsay, ie based on statements made by the appellants; (b) The 1995 statement by Betty if accepted that the farm was security is

highly equivocal – it could mean many things and falls short of a promise;

(c) The reference to joint owners is inconsistent with the balance of the appellants’ case;

(d) Any insinuation that Dennis was an adopted son is inconsistent with the appellants’ case.

²³ At [177].

[47] Dealing first with the hearsay point; hearsay by definition is a statement that “was made by a person other than a witness”.²⁴ As the appellants were witnesses statements made by them are not hearsay. I also understand that the appellants were available for cross examination prior to the decision not to call Mrs Forsdyke was relayed to the Court. The cogency of any statement therefore could have been tested in the usual way.

[48] In terms of any statement made by Betty, I am satisfied that these would qualify for admission in terms of the exceptions provided at s 18(1) of the Evidence Act. I accept that care is needed when dealing with statements made by persons who are not independent of the party who is calling them. But I was not taken to any evidence that might suggest that circumstances relating to the statement render it unreliable. That can only be seriously and properly tested with the benefit of cross examination and in light of the evidence as a whole.

[49] I accept that it is arguable the 1995 statement by Betty about “security” is equivocal. But it is also arguable that the statement supports the appellants’ other evidence that a promise was made. In this regard the cogency of the evidence drives from an evaluation of the evidence as a whole and where this statement sits within it. I am therefore not prepared to presumptively deny its cogency. Similarly, the degree of consistency with the appellants’ case is a matter for overall evaluation.

[50] I therefore proceed on the basis that Mrs Forsdyke’s evidence is prima facie cogent evidence going to the central issue of what Betty said to the appellants (if anything) and the basis for their taking up residence in New Zealand.

[51] As to its overall prospective effect on the appeal, the High Court must form its own view on the merits. The evidence that Betty said to Mrs Forsdyke that the farm was “security” for Dennis and Angela (if accepted) provides a arguable basis for the contention that the Judge’s adverse findings as to credibility and the factual matrix was wrong. Indeed, this Court would then need to approach the reasoning of the District Court with some care because (unlike the District Court) this Court

_{would be confronted with evidence that Betty provided some surety to the appellants}

²⁴ Evidence Act 2006, s 4.

of connection to the farm. Again, what that surety might have plausibly been could only be assessed in light of the evidence as a whole.

Interests of justice?

[52] Based on the abovementioned analysis, I am neutral about the degree of diligence employed by the appellants to produce Mrs Forsdyke’s evidence at first instance. I think more could have been done. But I accept that in the specific context of the hearing as it unfolded, and based on the evidence, the appellants diligently endeavoured to produce Ms Forsdyke’s evidence. I do not think however that the Judge below would have changed his decision based on the evidence. He was clearly concerned about the appellants’ credibility. This is a factor against the grant of admission of the evidence at this late stage. Balanced against this, I consider that the proposed evidence is prima facie cogent evidence going to a central issue, namely whether Betty promised the farm as security in return for the appellants’ moving back to New Zealand to live with or near her and to work the farm. It provides an arguable basis for the proposition that the Judge was wrong, though it has to be said that overcoming the Judge’s adverse credibility findings on appeal will be difficult

(Austin Nichols notwithstanding).²⁵

[53] Turning then to wider considerations; the appellants were given a fair opportunity to ventilate their case at first instance. The respondents succeeded at first instance based on the evidence then presented to the Court. Ordinarily it would be contrary to policy to allow further evidence at the appellate stage that could have been proffered at first instance. To do so would usually undermine the aim of

securing efficient first instance resolution of litigation.²⁶

[54] But this case has an unusual feature. The proposed evidence was exchanged well in advance of the hearing. The respondents therefore had the full opportunity to prepare their cases in light of this evidence, and as I have said, were able to cross examine the appellants’ other witnesses on Mrs Forsdyke’s evidence in advance of the decision not to call her. I accept that had her evidence been called, the

_{respondents may have sought to adduce further evidence from their own witnesses.}

²⁵ _{Austin Nichols, above n 2.}

²⁶ ICE SA, above n 15, at [18].

But it is difficult to see what that additional evidence might have been. There is no suggestion that the conversations took place in ear shot of the respondents’ witnesses and from the judgment their evidence tended to relate to their own direct experiences with Betty. A corollary of this is that I am doubtful that the respondents would have advanced substantially different cases had the evidence been given by Ms Forsdyke in the District Court.

[55] Mr Shiels QC nevertheless stressed that an adjournment could have been sought at the end of the hearing and that instead the appellants elected not to call Mrs Forsdyke. He says that this was a tactical decision made by experienced counsel. I do not accept this submission. Mr Andersen has stated, as an officer of this Court, that the decision not to call Ms Forsdyke was driven by the inability to obtain audio visual linkage late at night in England, and there was little point in seeking an adjournment. The technical difficulties were supported by affidavit evidence. I have no proper evidential basis for rejecting this evidence or Mr Andersen’s representation to this Court as to the reason for not calling Mrs Forsdyke. Further, such an election would have been counterintuitive. Indeed it is difficult to proffer a good reason why Mr Andersen would not call a supportive witness otherwise available to him and whose evidence had already been exchanged.

[56] A final and important consideration is the additional cost to the parties and the Court of allowing further evidence on appeal. But the proposed evidence is short. It was not suggested to me that cross examination would be lengthy and, as I have said, I do not anticipate that any substantive response by way of further evidence in chief, though I do not foreclose that possibility. The additional time required therefore should not be unduly burdensome on the parties or the Court.

[57] Overall I have come to the view that the interests of justice would be better served by allowing the further evidence to be admitted. The tipping point, is as Mr Andersen put it, the unfairness arising to the appellants from the inability to provide arguably cogent evidence because of technical difficulties. My position would have been different had there been a simple election not to produce it. Then

the ordinary policy constraints would apply.²⁷ But that is not the case. The unfairness to the respondents in having to respond now to this evidence is in my view outweighed by the unfairness to the appellants in being deprived twice of the opportunity to place before the Court evidence that might show that a promise was made or implied.

Costs

[58] I invite submissions on the costs of this application. My tentative view is that the appellants have sought and obtained an indulgence. The respondents were entitled to put the appellants to the task of demonstrating why leave should be granted. On that basis I am minded to let costs on this application lie where they fall, or to be determined in conjunction with the resolution of the case as a whole.

[59] If costs are sought, the parties are to file submissions within 10 working days.

Solicitors:

Antony Hamel, Dunedin

Gallaway Cook Allan, Dunedin

Solomons, Dunedin

²⁷ See Oceanside Developments, above n 16, at [20].

A