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High Court of New Zealand Decisions |
Last Updated: 30 April 2015
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
CIV-2012-409-000754 [2015] NZHC 823
BETWEEN
|
J B MACKINTOSH AND M C HALL
First Plaintiffs and Counterclaim
Defendants
|
AND
|
M W REED Second Plaintiff
|
AND
|
S T REED Third Plaintiff
|
AND
|
P D THOMAS
First Defendant and Counterclaimant
|
AND
|
E M MARR Second Defendant
|
AND
|
A M SYME Third Defendant
|
Hearing:
|
15 April 2015
|
Appearances:
|
G M Brodie for First Plaintiffs and Counterclaim Defendants JWA Johnson and
H Shaw for Second and Third Plaintiffs NRW Davidson QC
and S Mann for First
Defendant and Counterclaimant
K Clay for Second Defendant
No appearance for Third Defendant
S H Marsden for Thomas Grandchildren
|
Judgment:
|
23 April 2015
|
JUDGMENT OF DUNNINGHAM J
[1] When Norman Dean Thomas (Norman) died, he did not leave his affairs in order. Two years before his death, he fell out with his son, Philip Dean Thomas (Philip) with whom he had been farming in partnership for 35 years. In April 2012,
Norman initiated proceedings seeking a declaration that the partnership
between him
MACKINTOSH AND HALL v REED AND ORS [2015] NZHC 823 [23 April 2015]
and Philip was dissolved as well as orders dividing the partnership assets.
Shortly afterwards, Norman died and Philip counterclaimed
asserting that
Norman’s interest in the partnership property should be transferred to
him.1
[2] To further complicate matters, two years before Norman’s death, he allowed two of his grandsons, Mark Reed (Mark) and Simon Reed (Simon),2 to take occupation of certain properties which had been partnership properties. Simon has been in occupation of two farms, known as Chesmars and Cridges, since 2010. Mark has been in occupation of two other farms, known as Yaldhurst and Halkett, since 2010. They, in turn, have lodged claims asserting that, either on the basis of promissory estoppel or under the Law Reform (Testamentary Promises) Act 1949, Simon is entitled to ownership of the Chesmars farm and to ownership of Norman’s
half share of the Cridges farm and a 10 year lease of the farm plus an option
to purchase the other half share, and Mark is entitled
to a 10 year lease of the
Halkett farm plus ownership of an area of the Yaldhurst farm. They also claim
to be entitled to ownership
of various farm machinery which Norman allowed them
to use on those farm properties.
[3] The two streams of litigation have been consolidated, and
other family members have joined, with the other
grandchildren making
claims under the Family Protection Act 1955. With an estate worth
approximately $20 million, a lack of
accurate record keeping as to what assets
were held by which particular entity, and some preliminary issues to dispose of
such as
replacing the trustees, it took some time for the case to be ready for
hearing. However, a hearing was eventually scheduled for
27 May 2014. That
hearing was vacated because, on 28 May 2014, the parties advised the Court they
had reached an agreement in principle
to settle the various claims.
[4] Regrettably, over the next few months, that agreement foundered and the parties have reverted to the Court to have their claims determined. The new hearing
is scheduled to commence on 15 February 2016, although a number of the
parties
1 Philip’s claim being founded on a breach of an agreement, the principles of promisory estoppel, a breach of promises under the Law Reform (Testamentary Promises) Act 1949, and a breach of his moral duty under the Family Protection Act 1955.
2 The children of his daughter Alison Syme.
have sought to defer the fixture to a date on or after 29 March 2016, to
avoid a clash with the critical harvesting season in late
summer.
[5] In the meantime, on 26 February 2015, Philip, as half owner of the
Cridges and Halkett properties, served notice on Mark
and Simon requiring them
to vacate those properties by 7 March 2015. Mark and Simon have responded by
filing this application for
interim injunction.
What is sought in the application for interim injunction?
[6] Mark has sought to remain in possession of the Halkett property and
of the farm machinery in his possession and to
restrain Philip from
entering Halkett pending further order of the Court.
[7] Simon has sought an order allowing him to remain in possession of
Cridges and of the farm machinery in his possession and
to restrain Philip from
entering Cridges pending further order of the Court.
The various parties’ positions
Mark’s position
[8] Mark has been working alongside his grandfather Norman
since he left school in 1992.3 Norman allowed Mark to
operate a company, Hannor Farm Limited, from the Yaldhurst property located
near the Christchurch International
Airport. The other property which Norman
allowed Mark to occupy was the Halkett property which at Norman’s death
was owned
by Norman and Philip, as tenants in common in equal
shares.
[9] Mark claims that Norman promised him he would be entitled to a
lease for a
10 year period after the former’s death of the remaining portion of the Yaldhurst and of the Halkett property, along with machinery owned and introduced by Norman for the farming operations at Yaldhurst and the Halkett property. Mark says he has been
in possession of Halkett since 2010, there is a serious question to be
tried as to
whether the lease promised
by his grandfather, Norman, as co-owner, should be recognised, and the balance
of convenience favours allowing
him to remain in possession until his claim to
that entitlement is determined.
[10] Mark maintains that the status quo should be protected in the
interim as he has a legitimate claim and the balance of convenience
favours
leaving him there until that claim is resolved.
[11] His position on paying rent was the same as that discussed for Simon
below. Both he and Simon have offered to pay insurance
and rates on the
properties they occupy and say it is the trustees’ oversight which has
meant these expenses have been paid
by Philip and not them.
Simon’s position
[12] Simon’s position is similar to Mark’s, although he
claims more than simply the right to lease the relevant farm,
Cridges. He says
he was promised Norman’s half share of the Cridges property and a lease
(presumably of the remaining half)
of Cridges for up to 10 years as well as an
order allowing him the option to purchase the remaining half of Cridges
farm.4
[13] Simon too, worked alongside Norman during his school holidays.
After he left school, he worked for three years on a farm
in Methven before
beginning his own contract spraying business, Riverfields Sprayers Limited (RSL)
in 2003. Since June 2006, RSL
was permitted to operate out of a yard at the
farm at Cridges. He, too, says he has undertaken extensive work and/or provided
extensive
services to Norman on Cridges and other farm properties on the basis
of the promises set out above.
[14] Simon also says he was promised certain farm equipment and machinery and was allowed to use it and on the strength of that, he did not purchase his own. He
also says that the business decisions RSL made were influenced by the
promise of
4 These alleged promises appear to have been made on the assumption Norman would acquire the other half share in Cridges in the distribution of the partnership assets, but that did not occur before Norman’s death.
acquiring the farm and the machinery from his grandfather and that RSL
carried out considerable unpaid work for his grandparents on
the strength of the
promises.
[15] He says the balance of convenience favours the status quo being
maintained until the litigation is resolved, one way or the
other. Although his
initial position was that he should not pay rent in the interim as proposed by
the trustees, during the hearing
he acknowledged that an appropriate rental
should be paid, but equally Philip should be paying rent on the estate
properties he has
possession of. Simon did not accept the rentals for the
properties which were assessed by John Ryan, the valuer for the trustees.
He
suggested that the question of the quantum of any rental payable should be
resolved in a further dispute resolution process.
Position of Philip Thomas
[16] Philip’s position is more fully discussed in the substantive
part of the decision below. However, in summary, he strongly
resists the
application because he already owns a half interest in the properties and has an
arguable claim to the estate’s
interest in the properties. That
automatically gives him a right, not merely a claim, to occupation of the
properties.
[17] He says Mark and Simon have not paid rent or outgoings on the
properties and he has been held out of farming these properties
for five years
now. His failure to take steps to exercise possession of the properties to date
should not count against him. He
has been pragmatic but cannot allow this
situation to go on indefinitely. Notwithstanding the position that the Court
generally favours
the status quo, he says Mark and Simon will not suffer
irreparable harm if they are required to vacate and the balance of convenience
strongly favours him given his actual ownership of a half interest and the
financial detriment to him and the estate if the current
situation is permitted
to continue.
Position of the trustees
[18] The trustees filed a document in opposition to the interim injunction application. However, Mr Brodie was at pains to emphasise in his submissions that the trustees sought to be neutral and even handed. Their position was simply that if
Mark and Simon were to remain in occupation, they should pay a fair rental to
the estate and to Philip, albeit on a “without
prejudice” basis.
This means, in Simon’s case, if the Court holds he is entitled to half
ownership of the property and
that should have been the position provided for in
the will, then any rental paid to the estate would be reimbursed.
[19] However, given the trustees’ duty to ensure that the estate assets are properly managed and invested while the disputes between the various claimants are resolved, they say the only prudent thing they could do is seek that a fair market rental is paid on the properties. To that end, they obtained rental advice from J Ryan Valuation based on renting the property for a year at the time (they being unable to provide a longer lease in the circumstances of the litigation). As a consequence, they consider that Simon should be paying the estate $24,500 per year for the use of Cridges and
Mark should be paying the estate $23,000 per year for
Halkett.5
[20] The trustees were conscious that other beneficiaries are aggrieved
that Simon and Mark are occupying these properties at
no rent. The trustees are
also aware that Philip is prepared to take over the farms and share the farming
income with the estate.
However, they do not wish to take on the liability of
being a partner in a farming operation and prefer that whoever occupies the
farms conducts any farming operation in that person’s name, as a sole
trader, and pay rent to the trustees for the estate properties
which are
occupied.
[21] The trustees also seek rent from other family members for their
occupation of estate properties, but accept that was not
a matter for me to
determine in the scope of this interim injunction hearing.
Position of Eleanor Marr
[22] Eleanor Marr is one of Norman’s daughters and is a beneficiary under Norman’s will. Her children are also claimants under the Family Protection Act. Her concern is that, by not allowing Philip to take over these properties, which he claims he can farm and generate considerably more profit from than the rental which
would be paid, the value of the estate is decreased and, accordingly, so is
the value of her inheritance. She wants to see income
derived from Halkett and
Cridges and is concerned that, without that income, the trustees may have to
sell other estate assets to
meet expenses.
[23] In considering the balance of convenience, she says it is the estate
which has to be protected and this is best achieved
by allowing Philip to take
over these two properties, to farm them and account to the trustees for the
estate’s share of that
income.
Position of Alison Syme
[24] Alison Syme, the mother of Mark and Simon and one of Norman’s
two daughters, did not take an active role in this proceeding,
but did provide
an affidavit which supported her sons’ position. She was concerned that
it would be inequitable for her sons
to be required to pay rental and other
outgoings on the properties they occupied when other family members were
not paying
rent, or accounting for income, on the other estate properties
that were occupied.
Position of the Thomas grandchildren
[25] Ms Marsden appeared for the Thomas grandchildren, and
essentially endorsed the position of Philip and explained that
her
clients’ claim sat “below” Philip’s claim. Her primary
concern was that if Simon and Mark’s claims
were unsuccessful, but they
had been allowed to stay in occupation at no or nominal rental, Philip will have
lost the ability to
“build wealth” for his family from these
properties over the period he was kept out of possession.
The relevant principles applying to a grant of interim
injunction
[26] The principles that apply to an interlocutory application
for an interim injunction are clear: 6
(a) there must be a serious question to be tried; and
(b) the balance of convenience should favour the making of the
orders.
Is there a serious question to be tried?
[27] No party actively disputed that Simon has an arguable case to say he
is entitled to Norman’s half share of Cridges.7
[28] Simon’s affidavit evidence supports his assertion that he has
an arguable right to possession flowing from his claim
to be entitled to receive
Norman’s half interest in the Cridges farm. However, Philip rejects any
suggestion that Simon has
an arguable claim to rights in Philip’s half
share of the property. How his rights of possession and occupation are to be
exercised when the other co-owner, Philip, also asserts rights to possession and
occupation is a matter for resolution down the track.
It follows that I am
satisfied that Simon has a serious issue to be tried in respect of his claim to
be entitled to remain in occupation
of the land.
[29] In respect of Mark’s primary claim that he was promised a
lease of the Halkett property for 10 years, Philip resists
the suggestion that
such a promise is enforceable, and certainly not against the rights of himself,
as co-owner.
[30] I acknowledge that Mark’s position, in relation to the Halkett
property is more problematic. He is not claiming that
Norman’s half
interest in the Halkett property was promised to him. Instead he is claiming
that Norman promised to allow
him to lease the whole of the Halkett property for
10 years. He has located his company’s employees in the house on the
Halkett
property, and undertaken various works on the property, including sowing
crops on it, in reliance on such a lease being forthcoming.
[31] Simon and Mark argue that the rights of a co-owner such as Norman to include the right to let other persons into possession as his tenants, citing Burfitt v Johansen and Ors,8 and U-Needa Laundry Ltd v Hill.9 The rights they respectively
claim to a lease over the entire property flow from
that.
7 But not ignoring that Philip, too, has a claim to that share.
8 Burfitt v Johansen and Ors [1958] NZLR 506.
9 U-Needa Laundry Ltd v Hill [2000] 2 NZLR 308.
[32] While that may be so, I consider Simon and Mark cannot tenably argue
that the trustees are obligated to fulfil a promise
of a lease of Philip’s
interest in the land. While Norman endeavoured to obtain Philip’s half
share in these two properties
during his lifetime, that was successfully
resisted by Philip. Indeed, Philip also caveated his father’s interest
in these
properties claiming to be beneficially interested in them either as a
consequence of the partnership agreement or by virtue of an
equitable
estoppel.
[33] That leaves the interim injunction application to be determined in
the unusual circumstances where both parties claim to
have an entitlement to
rights to occupy and use the land, either as co-owner, or on the basis of rights
derived from the co-owner,
but where they cannot, in my view, argue that the
other co-owner, Philip, has no right to possession of the land. As was said in
the Australian text, Land Law:10
... one co-owner may grant a lease of his or her interest, since the lease
binds only that co-owners interest in the land and leaves
untouched the rights
of the other owners to (shed) possession of the land. However, because they
create practical inconveniences,
such leases are rare and Courts may be
reluctant to specifically enforce them.
[34] While Mark and Simon assert that Norman claimed to have
taken over Philip’s interests in Cridges and Halkett
in order to reduce
the difference in the current account imbalances between himself and Philip,
there is no specific claim in the
trustees’ claim for dissolution of the
partnership assets, for the Cridges and Halkett properties to be transferred to
the
estate, to effect what Norman endeavoured to do but did not achieve in his
lifetime.
[35] Accordingly, I am satisfied that Philip remains the legal owner of an undivided one half share in the property, and so, in weighing the balance of convenience issues discussed below, I must take that into account with its associated rights of possession. I am also satisfied that any claim the grandsons have to a lease of the properties can only be of Norman’s interest and cannot ignore Philip’s rights
as a co-owner.
10 Peter Butt Land Law (3rd ed, Law Book Company, Australia, 1996) at page 238.
Where does the balance of convenience lie?
[36] Having established that there is at least a serious question to be tried as to Simon and Mark’s rights to be in possession of the property, either as co-owner or through rights derived from a co-owner, I must turn to determine where the balance of convenience lies. This requires a decision as to whether the granting of an injunction, or its refusal, is the course which, after the action itself has been tried and the issues between the parties determined, would best allow the adjustment of the
plaintiffs’ rights in the way that accords with fairness and
justice.11
[37] An important consideration is the adequacy of damages that the
defendant is able to pay as compensation for the loss
the plaintiff
might suffer from the challenged activities.12 Other
considerations which the Courts have taken into account when assessing the
balance of convenience, and in exercising its discretion,
include:
(a) any prejudice to innocent third parties that may militate against
the grant;13
(b) preserving the status quo when other factors appear to be
evenly balanced;14 and
(c) the conduct of the parties, given that the jurisdiction to grant an
interlocutory injunction is equitable and governed by
equitable
principles.
[38] In the present case, Mark argues that he has occupied Halkett for five years, that he has said to the trustees he will pay rates and insurance (and it is through no fault of his that that has not happened), and that he is now prepared to pay rental (but on the basis that other parties occupying estate property also pay rental). He says his
business is located on Halkett and his company has had employees in the
Halkett
11 Congoleum Corporation v Poly-Flor Products (NZ) Ltd [1979] NZCA 25; [1979] 2 NZLR 560 (CA) at 571.
12 American Cyanamid Co v Ethicon Ltd [1975] UKHL 1; [1975] AC 396 (HL).
13 Chatham Islands Fisherman’s Cooperative Co Ltd v Chatham Islands Packaging Co Ltd (1988)
[1988] NZHC 631; 2 TCLR 605.
14 American Cyanamid Co v Ethicon Ltd, above n 13.
house since 2010, something which has been provided for in their employment
agreements. He has planted grain feed on the property
and is irrigating that
crop.
[39] If he is removed, he says he will lose the income stream he has
while placing Philip in an even larger farming operation.
Both he and Simon
say this would potentially adversely impact on the conduct of the litigation,
personally by creating an imbalance
in income streams to fund the
litigation.
[40] Similarly, Simon’s position is that if he was required to vacate the property it would cause a significant disruption to him and his business. In particular, his agricultural contracting business has been located in the yard on Cridges farm since
2006. He too says he has planted crops in the ground on the property and would be constrained from harvesting these if he was evicted. He also has approximately
650 lambs grazing the property pursuant to a contract with a neighbouring
farmer. That farmer would be adversely affected as he has
no other available
source of grazing and these arrangements between the farmer and him
have been long standing. Both
he and the farmer have been investing in the
grazing programme on the property since his grandfather’s death in May
2012, and
this continues an arrangement which was originally set up between the
farmer and Norman.
[41] Like Mark, he has been willing to meet insurance and rates and does
not understand why the trustees have not sought payment
of these from him. He
also, reluctantly, accepts that rental should be paid, but like Mark, says the
trustees should be even-handed
in this and require rental from the other
occupants of the estate properties.
[42] Both Mark and Simon seek to retain the machinery which Norman
allowed them to use, and which they are currently in possession
of, on similar
grounds. Continuing the position which existed at Norman’s death preserves
the status quo and achieves fairness
with other parties who also have possession
of estate property. Relinquishing it would have financial consequences for
them.
[43] In short, Mark and Simon argue that this is a case where it is appropriate to retain the status quo as they will otherwise be adversely affected (by having to
relocate their businesses), they have invested in the property they occupy
and the benefits of which will be denied to them if they
vacate it, and where
there are legitimate commitments to third parties, they will also be adversely
affected if Mark and Simon are
required to vacate the properties.
[44] Philip, in contrast, begins with the fact that, as a matter of law,
he is entitled to possession of these lands and that
feeds into both whether
there is a serious question to be tried, as already discussed, and to the
question of balance of convenience.
He therefore places his undisputed rights
to the land in competition with Simon and Mark’s arguable
rights.
[45] While acknowledging that Mark and Simon have been in possession of these properties for the last five years, he makes it clear that at no stage has that been with his blessing. It commenced because of unilateral decisions by Norman during his lifetime and continued following his death, while Simon and his mother were two of the trustees. New trustees were only appointed in late 2013 and it was only at their behest that he allowed things to remain on foot given the fixture was scheduled for
27 May 2014. That was also in the expectation that rent would be paid to the
estate and to Philip, but that has not occurred.
[46] When the matter was subject to the provisional settlement, that
settlement would have resolved all issues of occupancy.
However, now that the
settlement has fallen apart, Philip is facing another year (or potentially more
if appeals are lodged) where
he has no recompense for Mark and Simon’s use
of his half share of Cridges and Halkett.
[47] Importantly, Philip says that as these are the irrigated blocks of
farm land, they have the greatest income earning potential
of any of the
partnership farms. He also asserts in evidence that he could make significantly
more from farming this land than he
would receive from tenants.
[48] For completeness, there were also various accusations made by Philip that Mark and Simon had not dutifully managed the properties compared with how Philip would have managed them. However, there were strident denials from the grandsons
as well as counter accusations about Philip’s former management of
them. In the end, I was not prepared to determine on the
affidavit evidence
that either side was disentitled to occupation because of these alleged
defaults.
How should consideration of where the balance of convenience lies be
resolved here?
[49] It is clear that Mark and Simon have done many things in reliance on an expectation they would have continued rights to occupy the property. They have also extended rights to third parties who would be unfairly adversely affected if they were required to vacate the property. I accept that some of those concerns could be managed by an appropriate set of conditions such as those proposed by Philip for the removal of crops and grain from the properties.15 However, it is not as clear how the detriment to Mark and Simon’s businesses, and to the third parties with whom they have contractual obligations, can be properly addressed. The suggestions at
paragraph 90 of Philip’s affidavit as to how the harm to
third parties can be addressed are not, in my view, sufficient.
[50] The next matter which Philip says tips the scales in his favour, is
his ability to farm the properties and account to the
trustees for the income
earned off the estate share of the farm property. There was disputed evidence
as to what that expectation
of income would be and, in these circumstances, I do
not consider that I can accept at face value Philip’s estimates of
his
potential earnings from the properties as realistic.
[51] Furthermore, the proposal that he accounts to trustees for half the income earned off the properties, while supported by some of the other parties in Philip’s camp, was not embraced by the trustees. They see by adopting that course of action that they are actively engaging in farming the properties and incurring commensurate liability. As prudent trustees, they are content to receive a market rental from the properties, from whoever is in occupation, and ring fence the responsibility for undertaking the farming operation to the tenant. Mr Davidson QC, for Philip confirmed that Philip would, if the trustees prefer rental, pay whatever the trustees
considered was a fair rental which was not the position taken by Mark
and Simon.
15 At [94] affidavit of Philip Dean Thomas sworn 23 March 2015.
[52] Finally in terms of the loss of income to Philip, I consider that is
partly met if rent is payable and is also addressed
by his ability to earn
income off the balance of the estate properties.
[53] In weighing up all these factors, the ones which carry most weight
are:
(a) the desirability of maintaining the status quo, where third party
rights may be affected, and where the party held out of
occupation does not
suffer irreparable harm which cannot be compensated for by damages;
and
(b) the needs of the other parties to the litigation, including the
trustees, to earn a fair income from properties so occupied,
particularly when
that is being offered by the party competing for occupation.
Why should the status quo prevail?
[54] There is, at least a prospect, that Mark and Simon will be entitled
to continue to occupy these farms at the conclusion of
the litigation (although
they will still need to address how that is to be exercised in light of the
rights of their co-owner to
occupation, and may require resolution under s 339
of the Property Law Act 2007). If they are required to vacate the properties and
re-establish their businesses elsewhere, including re-tenanting their employees,
that may effectively determine their claim to possession
because the practical
impediments to them terminating those arrangements and then relocating back if
they are successful, may be
too great. On the other hand, if Philip’s
claims prevail, that would simply involve a single move by him to take over
ownership
of those farms at that point. That is a material aspect of the
considerations of balance of convenience.
[55] Similarly, in terms of the grandson’s claims to continue the use of the farm machinery and equipment in their possession, it is clear that Philip’s farming operation has continued for five years without that equipment, whereas Mark and Simon have made various decisions about equipment purchases, based on an expectation they can continue to use that equipment which Norman gave them permission to use. If they are required to relinquish it now, then they would need to
replace that equipment and machinery, which would effectively thwart the
benefit of the relief they seek in this regard in their claims.
[56] Furthermore, I take into account that Philip has the use of the
balance of all the other estate properties, which other beneficiaries
are
entitled to under the will. While those are not irrigated properties, at least
to some extent the detriment he is suffering from
being held out of Halkett and
Cridges is made up by the ability to farm, and earn income from, the entirety of
the balance of the
partnership properties.
Why should rental be paid?
[57] However, all the above considerations would still not weigh in Simon
and Mark’s favour, if they were not obliged to
pay rent. In Mark’s
case, of course, he is only claiming an entitlement to a lease of the property,
so in any event he would
be expected to pay rent. Simon’s case is
a little different in that he is claiming ownership of a half interest
in
the property, and it is unclear on what grounds he could obtain a lease of the
balance. However, in fairness to the competing
interests of the trustees and of
the other beneficiaries of, and claimants to, the estate, a market rental should
be paid for the
occupation of Halkett and Cridges.
[58] The dispute in this regard is what rental should be paid. The trustees have assessed rentals and, at the hearing, tentatively suggested that the actual amount should be the subject of a further determination with the grandsons required to pay
80 per cent of the assessed rental in the interim. Philip, on the other
hand, says that the rentals proposed are too low and he considers
that a higher
rental should be paid.
[59] In the end, I am not prepared to open yet another tranche of litigation between these parties. The J Ryan Valuation assessment has been obtained by the trustees in the course of their duties and I am not persuaded its assessment of rental is so flawed or unreasonable that it should not form the basis for an interim occupation rental. In any event, any payment of rent is proposed by the trustees to be without prejudice to the claims the parties have before the Court. As they have said in various reports, “any rent or occupational payment paid on a particular property could be unwound if that party succeeds in claiming the property in question”.
[60] I therefore consider that the application for interim injunction
should only be granted on terms which require Simon and
Mark to:
(a) pay all future outgoings on the property including rates and
insurance;
(b) from 7 March 2015 onwards (which is the date they were otherwise
required to vacate the properties) that they pay rent in
accordance with the J
Ryan Valuation rental assessment for a one year rate until further order of the
Court;
(c) that such rental is to be paid half to the estate as one half owner
of the property and half to Philip as the other co-owner;
and
(d) the payment of rental is made without prejudice to their rights to
claim a refund of rental from the recipient if the Court
finds they were
entitled to ownership of the interest in the property for which rental has been
paid.
[61] If Mark and Simon are not prepared to pay rental, then they must
vacate the properties by 30 June 2015. Should they require
any additional
orders to protect the interests of third parties, or to have access to the
property to retrieve assets such as grains
stored there beyond that date, I will
reserve leave for them to do so.
[62] For the same reasons as I have chosen to protect the status quo in
terms of occupation of the farms, as long as rental as
assessed by the trustees
is paid, I also am prepared to grant possession of all machinery in Simon and
Mark’s possession, pending
further order of the Court.
[63] While throughout I have recognised the rights of Philip, as co-owner, to possession of the farms, in all the circumstances and given the history of this matter, I accept that he should be restrained from entering Halkett and Cridges pending further order of the Court while Simon and Mark continue to occupy those farms. His right to possession of the land is recognised in the interim by accounting to him for rental of his interest in the properties.
Outcome
[64] In summary, therefore I order:
(a) the second plaintiff is to remain in possession of the property known as Halkett farm and all machinery in the second plaintiff’s possession and the first defendant is to be restrained from entering Halkett pending further order of the Court on the basis that he occupy the land on the terms set out in the deed of lease annexed as exhibit N to the affidavit of Philip Dean Thomas sworn 23 March 2015, but excluding the provisions as to term of lease and as modified by the email dated
3 January 2014 from the first and second defendants to the
trustees;
(b) the third plaintiff remain in possession of the property
known as Cridges farm and all machinery in the third plaintiff’s
possession and the first defendant be restrained from entering Cridges pending
further order of the Court on the basis that he occupy
the land on the terms set
out in the deed of lease annexed as exhibit O to the affidavit of Philip Dean
Thomas sworn 23 March 2015,
but excluding the provision as to term of the lease
and as modified by the email dated 3 January 2014 from the first and second
defendants
to the trustees; and
(c) if the second and third plaintiffs elect not to remain in
possession on those terms, then they must vacate the properties
by 30 June 2015.
If they require any additional order to protect the interests of affected third
parties or to enter the property
beyond that date, I reserve leave to them to
seek such orders by:
(i) filing and serving a memorandum setting out the further orders sought by
15 May 2015;
(ii) any other party filing and serving any memorandum in response by 29 May 2015; and
(iii) unless I consider I need to hear from the parties, I will
determine the issue on the papers.
[65] I reserve the issue of costs. At this stage it is not clear that
there has been a “successful” party. I am
only prepared to grant
the interim injunction, on terms which were not wholly supported by the second
and third plaintiffs.
[66] At present, I am inclined to let costs lie where they fall. If any
party seeks costs, it is appropriate that that be considered
in the context of
the eventual outcome of the proceedings.
Solicitors:
G M Brodie, Christchurch
Wynn Williams, Christchurch
NRW Davidson QC, Christchurch
K Clay, Christchurch
R Fowler QC, Christchurch
S Marsden, Christchurch
White Fox & Jones, Christchurch
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URL: http://www.nzlii.org/nz/cases/NZHC/2015/823.html