Matthews v Piacun-Matthews [2015] NZHC 558 (25 March 2015)

Last Updated: 20 April 2015

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-003674 [2015] NZHC 558

IN THE MATTER OF	ALEXANDHA PIACUN-MATTHEWS in her capacity as Executor of the Estate of BEATRICE PIACUN-MATTHEWS
BETWEEN	BRUCE MATTHEWS Plaintiff
AND	ALEXANDHA PIACUN-MATTHEWS Defendant

Hearing:	23 March 2015
Appearances:	S Sharma for Plaintiff Defendant in person
Judgment:	25 March 2015

_{RESERVED JUDGMENT OF WYLIE J}

This judgment was delivered by Justice Wylie

On 25 March 2015 at 1.00pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

_{Date: .............................}

MATTHEWS v PIACUN-MATTHEWS [2015] NZHC 558 [25 March 2015]

Introduction

[1] These proceedings were filed as long ago as June 2012. The plaintiff, Mr Matthews, then applied for an order for the sale of a property at 2/4 Portman Road, Mt Wellington, Auckland.

[2] At that stage, the defendant was a Ms Beatrice Piacun-Matthews. She had

been Mr Matthews’ partner. The parties were in a de facto relationship from the

1960’s to 1999 and they purchased the Portman Road property as joint tenants.

[3] Ms Beatrice Piacun-Matthews filed a notice of defence, a claim to set off, and then a counterclaim. In the counterclaim, she sought an order that the Court should transfer such interest as Mr Matthews has in the property at Portman Road to her. She also sought ancillary orders, including monetary adjustments between her and Mr Matthews.

[4] The parties repeatedly advised the Court that settlement discussions were underway. Settlement did not eventuate and eventually the matter was set down for trial. The trial was to commence on 25 November 2013. Unfortunately Ms Beatrice Piacun-Matthews died on 27 October 2013, and the trial date had to be vacated.

[5] The present defendant, Ms Alexandha Piacun-Matthews (“Ms Piacun- Matthews”) was appointed as executor of her late mother’s estate, and she has been substituted as a defendant in that capacity.

[6] There have been subsequent attempts to settle these proceedings. Unfortunately these further attempts have also been unsuccessful.

[7] A timetable to ensure that the matter was ready for trial was put in place by Associate Judge Osborne on 6 October 2014. Inter alia Ms Piacun-Matthews was to file her evidence by 20 February 2015. In early February 2015 then counsel for Ms Piacun-Matthews sought leave to withdraw. Leave was granted by Hinton J on 12

February 2015 at a mentions hearing. Ms Piacun-Matthews attended that hearing in person and she confirmed that the proceeding would still be defended and that she would be engaging new counsel. The timetable was not varied.

[8] On 6 March 2015 Venning J issued a minute, noting that Ms Piacun- Matthews was in breach of the timetable requiring her to exchange her evidence by

20 February 2015. He extended the time within which Ms Piacun-Matthews was to file her evidence to Tuesday 10 March 2015, and recorded that in the event she failed to file and serve briefs by that date, the matter would proceed on 23 March 2015 by way of formal proof.

[9] The defendant failed to comply with the extended timetable, and on 16 March

2015, Venning J issued a minute confirming that the hearing was to proceed by way of formal proof. Ms Piacun-Matthews then belated sent an email to the Court. The email is lengthy. It is not a brief of evidence as such. Rather it outlines Ms Piacun- Matthews’ memories of her family life. It is highly critical of her father – Mr Matthews.

[10] The matter was called in Court on 23 March 2015. Mr Sharma appeared on behalf of Mr Matthews. Ms Piacun-Matthews was also in Court. She acknowledged that no briefs of evidence had been filed by her, but she nevertheless sought to address various factual issues. I declined to allow her to do so. I did, however, permit her to make submissions on the orders sought by Mr Matthews.

Background

[11] As I have noted, Mr Matthews and the late Beatrice Piacun-Matthews were in a de facto relationship for at least 33 years. They finally separated during 1999. The provisions of the Property (Relationships) Act 1976 did not apply to their relationship, and Mr Matthews brought proceedings against his former partner relying on the common law remedies of constructive trust and entitlement as a joint tenant. Those proceedings went through a protracted hearing before Paterson J which extended over various days in May 2002, July 2002 and February 2003. There were considerable delays by the parties in filing their respective submissions

_{and a reserved judgment only issued on 22 August 2003.}¹

¹ Matthews v Piacun-Matthews HC, Auckland, CP 7/00, 22 August 2003.

[12] Paterson J recorded that as at the date of separation, Mr Matthews and Ms Beatrice Piacun-Matthews owned, as joint tenants, two residential properties – one in Grattan Place, Freemans Bay, Auckland, and the other in Portman Road. Paterson J noted that neither party accepted that the other was entitled to half of the equity in either property, and that there were claims and counterclaims in respect of their respective contributions to the properties, financial transactions during the relationship, and the like.

[13] After reviewing the competing claims, Paterson J dealt with the two properties. Relevantly he noted that the purchase of Portman Road, which had been engineered by the late Ms Beatrice Piacun-Matthews, had been imprudent, and that when the house was purchased, it was in an uncompleted state. He noted that there would be costs involved in obtaining title to the property, and in putting it into a state of repair such that it could be sold. The Judge considered that those costs needed to be shared equally.

[14] Paterson J noted that Mr Matthews had not lived at either property since the date of separation, and that Ms Beatrice Piacun-Matthews and her oldest daughter were using both properties. On the evidence before him, he concluded that Ms Beatrice Piacun-Matthews was the prime tenant at Grattan Place, and that the oldest daughter – I assume Ms Piacun-Matthews – was the prime tenant in Portman Road. While he made orders requiring Ms Beatrice Piacun-Matthews to pay to Mr Matthews rent in respect of Grattan Place following separation, he held that no such entitlement could be claimed against Ms Piacun-Matthews because she was not a party to those proceedings.

[15] Various other claims between the parties were either dealt with or dismissed.

[16] Relevantly the Judge’s findings and the orders made by the Court, can be

summarised as follows:

(a) Each party was entitled to a one half interest in both the Grattan Street property and in the Portman Road property;

(b) Each party was to meet one half of the costs required to obtain title to the Portman Road property, and one half of the costs of any repairs necessary to effect the sale of that property; and

(c) Each party was to pay one half of the insurance premiums and rates on both properties from 1 July 2000.

[17] The Judge also recorded that the Court fees had not been paid, and noted that each party had given an undertaking to pay the fees from the net sale proceeds when Grattan Place was sold. He directed that if the Court costs had not already been paid, they were to be paid forthwith.

[18] As I have noted, the reserved judgment issued in August 2003 because both parties delayed in filing their respective submissions after the hearing concluded. It transpired that the property at Grattan Place had been sold in April 2003. It sold for

$661,000. The sum of $20,000 was paid into the trust account of a solicitor, a Mr Sing, to meet the costs of putting the Portman Road title in order, and to meet any costs which needed to be paid to comply with statutory and regulatory requirements to enable the property to be sold. The net proceeds of the sale, $479,135.46, were shared equally between the parties.

[19] The Court costs were not paid – at least by Mr Matthews. Ms Piacun- Matthews asserted before me that her mother had paid her half share of the Court fees, but there was no evidence produced to that end. Moreover this assertion is at odds with an email obtained by Mr Matthews from the Registrar confirming that fees of $19,857.50 are outstanding.

[20] It is unclear whether or not the monies retained by Mr Sing have been used to either obtain title to Portman Road, or to attend to any of the outstanding issues which were required to be completed. There are statements from Mr Sing which suggest that a surveyor was retained and there is a title reference for the property. However, it seems from a valuation obtained by Ms Piacun-Matthews that there are various issues outstanding, including sealing the drive, putting in place screening, missing bracing, nogs to some of the internal walls, fire rating of part of the roof,

stopping and painting, replacement of some internal linings, leaks to be attended to and the like. There may also be some residual title issues still to be resolved.

[21] The property at Portman Road is mortgage free. There is a building line restriction in place, a cross lease and a land covenant.

[22] Mr Matthews is now 76 years of age. He is anxious to resolve matters to help him in his retirement. In his statement of claim he sought an order pursuant to s 339 of the Property Law Act 2007 directing the sale of the property and the equal division of the net proceeds of sale between the parties. He also sought an order directing that Barfoot & Thompson Limited and Ray White Real Estate Limited, be appointed as real estate agents for the marketing and sale of the property.

Analysis

[23] The orders are sought pursuant to s 339 of the Property Law Act. Relevantly it provides as follows:

339 Court may order division of property

(1) A court may make, in respect of property owned by co-owners, an order—

(a) for the sale of the property and the division of the proceeds among the co-owners; or

(b) for the division of the property in kind among the co- owners; or

(c) requiring 1 or more co-owners to purchase the share in the property of 1 or more other co-owners at a fair and reasonable price.

(2) An order under subsection (1) (and any related order under subsection (4)) may be made—

(a) despite anything to the contrary in the Land Transfer Act

1952; but

(b) only if it does not contravene section 340(1); and

(c) only on an application made and served in the manner required by or under section 341; and

(d) only after having regard to the matters specified in section

342.

(3) Before determining whether to make an order under this section, the court may order the property to be valued and may direct how the cost of the valuation is to be borne.

(4) A court making an order under subsection (1) may, in addition, make a further order specified in section 343.

...

[24] Any “co-owner” can make an application. The word co-owner is defined in s 4 of the Act. The definition clearly extends to Mr Matthews, as a joint tenant. He has standing under ss 339 and 341(1)(a) to bring this application. The order sought does not contravene s 340(1) and it has been served in the manner required by s 341.

[25] Once an application has been made the Court has broad discretionary powers. In exercising those powers, it is required to have regard to various relevant considerations, set out in s 342 of the Act. That section provides as follows:

342 Relevant considerations

A court considering whether to make an order under section 339(1) (and any related order under section 339(4)) must have regard to the following:

(a) the extent of the share in the property of any co-owner by whom, or in respect of whose estate or interest, the application for the order is made:

(b) the nature and location of the property:

(c) the number of other co-owners and the extent of their shares:

(d) the hardship that would be caused to the applicant by the refusal of the order, in comparison with the hardship that would be caused to any other person by the making of the order:

(e) the value of any contribution made by any co-owner to the cost of improvements to, or the maintenance of, the property:

(f) any other matters the court considers relevant.

[26] Having regard to the s 342 considerations in the present case, I note as follows:

(a) Mr Matthews as a joint tenant has an equal one half share in the property. His entitlement in this regard was recognised by Paterson J. He has been a joint tenant, along with the late Ms Beatrice Piacun-

Matthews since the house was purchased in May 1993. The property is unencumbered.

(b) The house is situated in Mt Wellington, Auckland. It has three bedrooms, and it is located in a residential 5 zone under the Auckland Council – Isthmus section – Operative District Plan 1999. It seems that the dwelling exceeds current density restrictions in the District Plan, but that it has existing use rights under the Resource Management Act 1991. Its construction commenced in the early

1990’s. Construction is still incomplete. It appears that some conditions imposed by the Council when resource consent was obtained to build the house, have not been complied with – in particular a driveway has not been formed and sealed in an all weather surface and living and service courts have not been screened from the common driveway, public places and an adjoining unit. The house occupies the rear portion of a 951 square metre site. It is unclear whether a flat plan is still to be completed. Mr Matthews has been unable to inspect the house. The QV valuation as at 1 July 2011 was

$360,000. The QV e-valuer valuation as at 27 August 2014 was

$533,000. Ms Piacun-Matthews has obtained her own valuation from Gribble Churton Taylor Limited. They have valued the house on an “as if complete” basis at $500,000. They say approximately $75,000 will need to be spent to complete outstanding works and that any purchaser wishing to complete the house would require a profit and risk allowance of approximately $50,000. They suggest that the “as is” market value of the property is in the vicinity of $375,000.

(c) Mr Matthews, and the estate of the late Ms Beatrice Piacun-Matthews are the co-owners of the property. Both own a one half share of the property.

(d) Turning to hardship, the orders made by Paterson J were effective as from August 2003. The decision was not appealed, but the orders have not been complied with. Since judgment, it seems that first Ms

Beatrice Piacun-Matthews, and more recently Ms Piacun-Matthews, have been residing in the property. Neither has paid rental to Mr Matthews. Rates have been paid, first by Beatrice Piacun-Matthews, and then by Ms Piacun-Matthews, and there are no outstanding rates owing to Auckland Council. It is unclear whether the property has ever been insured. It seems from the submissions made to me that Ms Piacun-Matthews and her sisters are keen to buy the property. However, there is nothing to suggest that they are in a position to do so. Nor does the order sought by Mr Matthews preclude them from purchasing it. The reality is that Mr Matthews has been shut out from enjoying the property, or from utilising the proceeds of the sale, for some 12 years. I cannot see that there is any hardship to either the estate or Mr Matthews from ordering a sale. While Ms Piacun- Matthews is in occupation, she is not paying rental, and her interests cannot prevail over the interests of either Mr Matthews or the beneficiaries of her late mother’s estate.

(e) There is no evidence of any contribution to the house made by the late Ms Beatrice Piacun-Matthews or Ms Piacun-Matthews, other than in relation to the payment of rates. Mr Matthews for his part acknowledges that his late partner, and now his daughter, have paid the rates. He agrees that they should be given credit for the total rates paid by them since April 2003.

(f) The only other relevant matter would seem to be that the relationship between Mr Matthews and his daughter is volatile, notwithstanding the years that have passed since Mr Matthews and his former partner separated, and notwithstanding her death. In my view, it is appropriate that there should be a clean break, and that Mr Matthews’ interests should be separated from those of his late partner, his daughter and any other beneficiaries in the estate.

[27] It is clear that the powers of the Court are not limited to making such orders

as are sought by a party to the proceedings. The Court may “consider what, on an

overview, taking into account the relevant considerations, is the most just and practical way through the impasse before the court, even if the answer may not reflect the orders sought by the parties”.²

[28] I am satisfied that the order sought by Mr Matthews is appropriate and I direct that the house at Portman Road be sold pursuant to s 339(1)(a) of the Property Law Act.

[29] Pursuant to ss 339(4) and 343 of the Act, I can make various additional orders to enable the carrying out of the primary order for sale.

[30] Having regard again to the s 342 considerations it is appropriate to direct as follows:

(a) The property should be sold by Barfoot & Thompson Limited and/or Ray White Real Estate Limited. I can take judicial notice of the fact that both are prominent real estate agents, active in Auckland city generally and in the Mt Wellington area.

(b) Mr Sharma suggested that I should order sale by auction and fix a reserve price of $450,000. I am not prepared at this stage to direct the property be sold at auction. It may be that Ms Piacun-Matthews and/or other children may wish to buy it. They should be given the opportunity to do so by private treaty.

(c) The expenses of sale, and of readying the property for sale, are to be borne equally by the estate and Mr Matthews.

(d) The net proceeds of the sale are to be paid to the Registrar, and placed on deposit by the Registrar in the joint names of the parties. Within

10 days of such payment the parties are to file a joint memorandum, or if that is not possible, then separate memoranda, indicating how

_{they propose that the proceeds should be split between them, and}

² Bayly v Hicks [2012] NZCA 589, [2013] 2 NZLR 401 at [32].

detailing any claim they make for sums asserted to have been spent on the property, or owing for rental. They will also have to deal with outstanding Court fees.

(e) I have noted that Ms Piacun-Matthews and/or her sisters or other members of the family, may make an offer for the property. I decline to give any directions regarding the setting off, or accounting for all or part of the purchase price, instead of paying for the house in cash. I have no information as to Ms Piacun-Matthews’ interest in the estate, or the interest of other beneficiaries. I reserve leave to Ms Piacun- Matthews to come back to the Court in this regard if necessary.

(f) The issue of a fair occupation rent can be dealt with once the house is sold, and once the parties have had the opportunity to be heard in that regard.

[31] Generally, leave is reserved to the parties to come back to the Court to seek such further orders as are necessary to enable the property to be sold.

[32] The costs of the formal proof hearing are reserved. They will be dealt with when the property is sold.

Wylie J