IN THE COURT OF APPEAL OF NEW ZEALAND
CA33/2014
[2014] NZCA 442
BETWEEN
VICTORIA ELIZABETH BETHELL as
Administrator of the estate of R M Bethell
and MARIA GAEL BETHELL
Appellants
AND
CHRISTINE ANNE BETHELL
Respondent
Hearing:
19 and 20 August 2014
Court:
Randerson, Wild and White JJ
Counsel:
S A Grant and H E McQueen for Appellants
R J Thompson for Respondent
Judgment:
5 September 2014 at 3:00 pm
Reissued:
17 October 2014
Effective date
of Judgment:
5 September 2014
JUDGMENT OF THE COURT
A
The application by the appellants for leave to adduce further evidence on
appeal is dismissed.
B
The appeal is dismissed, save that the respondent is liable for the
reasonable costs of obtaining the subdivision consent.
C
The appellants must pay costs to the respondent for a standard appeal on
a Band A basis with usual disbursements.
____________________________________________________________________
REASONS OF THE COURT
(Given by Randerson J)
BETHELL & ANOR v BETHELL CA33/2014 [2014] NZCA 442 [5 September 2014]
Table of Contents
Para No
Introduction
The issues
The evidence in more detail
John’s Will
The deed of family arrangement
(a) What area of land was Chrissie entitled to under the
Deed?
The approach to interpretation adopted in the High Court
Discussion of the interpretation approach
(b) What were the respective rights and obligations of
Chrissie and Ross under the Deed?
Chrissie’s rights
Ross’s obligations
Summary to this point
The evidence supporting the Judge’s approach to the
determination of Chrissie’s interest in the 10 acres
(c) Does Maria have any interest in the White House and the
quarter acre of land in priority to Chrissie’s rights or any
entitlement to compensation?
Analysis
(d) Who was responsible for the costs of the subdivision for
Chrissie’s allotment?
(e) If the appeal succeeds, does Chrissie have a claim
nevertheless to a life interest in the land under the Will?
Application to adduce further evidence
Result
[1]
[13]
[17]
[19]
[23]
[27]
[27]
[33]
[52]
[52]
[64]
[69]
[70]
[79]
[86]
[91]
[93]
[94]
[99]
Introduction
[1]
This appeal involves disputed claims to 10 acres of land at Te Henga on
Auckland’s West Coast. The Bethell family settled in Te Henga in the 1860s on land
adjoining Bethells Beach. In the 1890s, John Neale Bethell acquired several blocks
of land including one described by the parties as the principal block. This comprises
mostly steep, bush-clad coastal land.
[2]
Mr Bethell’s grandson, also called John Bethell (John), inherited several
blocks including the principal block. John and his wife Shirley had four children:
Margaret, Trudy, Ross and Christine (Chrissie). On his death in 1985, John devised
the principal block to Ross. As a result of earlier subdivisions and the creation of
reserve areas, the principal block had by then reduced to approximately 223 hectares.
[3]
Two features of the remaining land in the principal block are relevant for
present purposes. First, there is a relatively flat area known to the family as the
camping ground adjoining Bethells Road. It was intended to become a camping
ground but we were told it has not been used as such. The second feature is an area
of land known as the clay patch. This derived its name from an area where clay was
extracted for the purposes of an earlier subdivision.
It forms part of the land
adjoining the camping area but is separated from it by steeply rising land not suitable
for building. However, the clay patch and some adjoining areas are relatively flat
and provide potential building sites with extensive views of the sea.
[4]
Chrissie is the respondent in this appeal. John’s devise of the principal block
to Ross was subject to Chrissie having the right during her lifetime to rent at a
nominal figure “ten (10) acres more or less together with the camp and shop
buildings thereon (if any)”. John’s Will further provided that if a subdivision could
be achieved, Chrissie would be entitled to have the same 10 acres transferred to her
absolutely.
[5]
Difficulties in the implementation of the Will led to a Deed of family
arrangement in 1987, the interpretation of which lies at the heart of this appeal.
Under the Deed, Ross agreed that Chrissie could call for “an allotment of up to
10 acres in the area known as the camping grounds near the main road”. The Deed
provided that this area could be transferred to Chrissie as long as the local authority
consent to its subdivision from the principal block was obtained during the joint lives
of Ross and herself.
[6]
Chrissie’s evidence, accepted by the High Court Judge, was that she called
for 10 acres in 1991. She understood this would include the camping ground as well
as the larger area in which the clay patch was located. She did not take any formal
steps to enforce her interest in the 10 acres until 2005 when she lodged a caveat. In
2006 she applied for a subdivision consent in respect of the 10 acres she claimed.
Although Chrissie obtained consent for the subdivision, Ross refused to transfer the
land to her, maintaining she was only ever entitled to the land known as the camping
ground. It is common ground that the camping ground has an area much less than
the 10 acres referred to in both the Will and the Deed. It has been recently surveyed
and has an area of two hectares or approximately five acres. At the time of the Deed,
Ross understood the land area of the camping ground was between five and
six acres.
[7]
Two other matters are relevant for present purposes. First, Ross and his first
wife Maria separated in 1999. A house (known as the White House) was moved onto
part of the 10 acre area claimed by Chrissie. It was located on part of the higher land
in which the clay patch is located. In 2004, the year before Chrissie lodged her first
caveat, Ross and Maria entered into an informal agreement purporting to give Maria
a life interest in the White House and the quarter acre of land around it. The
White House was initially let but Maria now lives there. The second relevant fact is
that Ross died unexpectedly in 2008. He had earlier married Vicky who is the
administrator of his intestate estate. She lives on the principal block in the house she
and Ross formerly occupied. Maria and Vicky are the appellants in this appeal.
[8]
In the High Court, Chrissie alleged that Ross’s refusal to transfer the 10 acres
to her was a breach of the Deed or amounted to a breach of trust. She sought an
order for specific performance and the transfer of the land to her.
Maria
counter-claimed for a declaration that she had an equitable interest in the
White House and surrounding land that took priority over any interest that Chrissie
might have in the land. Vicky also counter-claimed for a declaration that the whole
of the principal block, including the area claimed by Chrissie, should vest in her to
the extent of one-third and in Ross’s children to the extent of two-thirds under the
Administration Act 1969.
[9]
There were two principal defences to Chrissie’s claim:
(a)
On the true interpretation of the Deed, she was not entitled to any
more than the camping ground itself.
(b)
If she were entitled to 10 acres, the area of the land was not
sufficiently defined to be enforceable by court order.
[10]
Other defences raised included laches (delay), hardship, and other issues
making it inequitable to grant relief.
There were also various claims and
counter-claims for an accounting of profit and compensation which need not be
detailed at this stage.
In the High Court, Courtney J upheld Chrissie’s claim.1 She made an order
[11]
for specific performance requiring Vicky to convey to Chrissie the lot comprising
4.047 hectares (10 acres) for which she had obtained subdivisional approval. The
counter-claims by Maria and Vicky were dismissed. The Judge also dismissed
Chrissie’s claim for equitable compensation (sought in addition to specific
performance) and Maria’s claim for compensation for work done on the White
House.
[12]
Finally, the Judge found that Ross (or more precisely his intestate estate) was
responsible for the costs of the subdivision necessary to provide Chrissie her
10 acres.
The issues
[13]
The issues on appeal are somewhat narrower than those in the High Court. In
particular, Ms Grant on behalf of the appellants accepted that, if we were to conclude
that the Judge’s interpretation of the Deed was correct and that the land area was
sufficiently defined, the other grounds raised in the High Court in opposition to an
order for specific performance were not pursued on appeal. For her part, Chrissie
has not appealed against the dismissal of her claim for equitable compensation in
addition to an order for specific performance. However, Maria maintained an appeal
against the refusal of compensation for money she spent on the White House.
[14]
Mr Thompson also advanced an alternative argument on Chrissie’s behalf.
He submitted that if her claim failed, she was still entitled to her effective life
interest in the 10 acres under cl 7 of the Will.
[15]
A last minute application for leave to adduce further evidence on appeal was
made by the appellants. We will deal with that at the end of this judgment.
[16]
1
The issues may therefore be defined in these terms:
Bethell v Bethell [2013] NZHC 3492.
(a)
What area of land was Chrissie entitled to under the Deed?
(b)
What were the respective rights and obligations of Chrissie and Ross
under the Deed?
(c)
Does Maria have any interest in the White House and the quarter acre
of surrounding land in priority to Chrissie’s rights or any entitlement
to compensation?
(d)
Who is responsible for the costs of the subdivision for Chrissie’s
allotment?
(e)
If the appeal succeeds, does Chrissie have a claim nevertheless to a
life interest in the land under the Will?
The evidence in more detail
[17]
It must be said at the outset that the evidence in the High Court, particularly
that adduced by the appellants, ranged over an unacceptably wide area. Much of it
was irrelevant to the issues and reflected the bitterness of the dispute between the
parties. There was also evidence of the subjective intentions of family members
which the Judge rightly rejected as inadmissible for the purposes of interpreting the
Deed.
The case graphically illustrates the risks inherent in the indiscriminate
introduction of extrinsic evidence beyond the terms of the documents the
interpretation of which is at issue. We confine ourselves to the facts which we
regard as relevant and admissible for the purposes of construction of the Deed and
the other issues we are called upon to determine.
[18]
The camping ground acquired its name as such among the family because
John had hoped to be able to establish a commercial camping ground and shop on
that site. The parties accepted that Chrissie had a special connection with that area
because of the time she spent working with her mother in a makeshift shop in a
caravan parked near the beach and, later, on the camping ground. The camping
ground is the only convenient access to the rest of the principal block including the
houses occupied by Vicky and Maria. Chrissie’s subdivision consent provides for a
legal right of way across her 10 acre allotment to the remainder of the principal
block.
John’s Will
[19]
The Judge described the effect of John’s Will in these terms:
[18]
Under the will Ross was to inherit the principal block subject to
provision for Chrissie of a block described only as “ten (10) acres more or
less together with the camp shop buildings thereon (if any)”. Trudy received
the homestead, which stood on a separate title. Trudy and Margaret were
each to receive five acres from land to be subdivided behind the McKay
subdivision. Margaret inherited John’s interest in sections that he and his
brother, Francis Bethell, owned in another part of Bethells Beach.
[19]
The provision made for Chrissie in relation to the ten acres had two
limbs. Under clause 7 Chrissie was to receive a life interest in the area
described. Clause 8, however, provided that if consent to subdivide that area
could be obtained Chrissie could take it outright. If that happened cl 7
would have no effect. However, cl 10 provided for a different distribution if
consent to subdivide was not obtained within three months of probate.
[20]
The relevant provisions of the Will were:2
…
2
6.
I GIVE DEVISE AND BEQUEATH my farm property comprising
815 acres more or less to my son ROSS McKAY BETHELL free of
all duties SUBJECT TO the tenancy created in Clause 7 hereof and
the provisions of Clause 8 hereof and SUBJECT TO all
royalties/monies from the sale of pines after all expenses taken such
royalties/monies to be for such of them my children as survive me
and if more than one tenants in common in equal shares for so long
as my son ROSS McKAY BETHELL owns the property.
7.
SUBJECT TO Clause 8 hereof I DIRECT that a portion of the land
contained in the farm property referred to in Clause 6 hereof and
comprising ten (10) acres more or less together with the camp and
shop buildings thereon (if any) is to be and is hereby let to my
daughter CHRISTINE ANNE BETHELL during her lifetime at an
annual rental of ONE DOLLAR ($1.00) to the end that my son
ROSS McKAY BETHELL shall take the bequest contained in
Clause 6 SUBJECT TO the life tenancy granted herein.
8.
I DIRECT that the area of land behind the McKAY sub-division be
divided so that the following areas are transferred to the person
named hereunder:-
Emphasis added.
[21]
(a)
Ten acres to my daughter CHRISTINE ANNE BETHELL
being the same land referred to in Clause 7 herein and if so
sub-divided of my main block Clause 7 need no longer have
any effect.
(b)
Five acres for my daughter MARGARET ELAINE
PARKES.
(c)
Five acres for my daughter TRUDY JEAN BETHELL.
9.
I GIVE DEVISE AND BEQUEATH my 2.5 acres (Lot 5), remaining
sub-divided sections and sections held jointly with my brother
FRANCIS PETER BETHELL unto my trustees UPON TRUST to
sell the same and from the proceeds thereof to pay my just debts
funeral and testamentary expenses and all duties payable in respect
of my dutiable estate (both actual and notional) and to stand
possessed of the residue for such of my children, MARGARET
ELAINE PARKES, ROSS McKAY BETHELL, TRUDY JEAN
BETHELL and CHRISTINE ANNE BETHELL as survive me and if
more than one as tenants in common in equal shares.
10.
If after a period of three months from the Grant of Probate in my
Estate approvals for the sub-division in Clause 8 herein have not
been given whether or not the Executors have lodged applications or
even instructed a surveyor or approached the Council then I
DIRECT my land property be distributed as follows:(a)
to my son ROSS McKAY BETHELL my farm property
comprising 815 acres absolutely.
(b)
to my daughter TRUDY JEAN BETHELL my home
property pursuant to Clause 5 herein
(c)
to my daughter CHRISTINE ANNE BETHELL my
2.5 acres (Lot 5) and half the sale proceeds from the sale of
my remaining sub-division sections.
(d)
to my daughter MARGARET ELAINE PARKES my interest
in sections held jointly with my brother FRANCIS PETER
BETHELL and the other half of the sale proceeds from the
sale of my remaining sub-division sections.
It became apparent soon after John’s death in December 1985 that there were
difficulties arising from the terms of his Will. First, some assets had been omitted.
Secondly, a legal opinion had been given to the effect that cl 9 of the Will would
continue to have effect whether or not the subdivision contemplated by cl 10
proceeded. The executors of the Will considered this was not the intended effect of
clause 9. Ross would receive a disproportionate share of the estate compared to that
of his sisters because he would receive both the principal block and a quarter share in
the other property John owned. We also note that clauses 7 and 10(a) conflict with
each other.
[22]
The trustees and executors of John’s Will were two partners in the law firm
Davenports. Although they applied in 1986 for the subdivision contemplated by cl 8
of the Will, the application was withdrawn after advice from the then local authority
that the consent was most unlikely to be granted. Under the district plan and
legislation then in force, a specified departure would have been required.
The deed of family arrangement
[23]
Davenports advised that a deed of family arrangement was the best means of
resolving the difficulties that had arisen in implementing John’s Will. Negotiations
proceeded over some time, partly because Chrissie was then living in England. The
Deed was finally completed in 1987.
[24]
The Deed was executed by the trustees of John’s estate and each of John’s
four children. The recitals to the Deed stated:
WHEREAS JOHN NEALE BETHELL, Deceased (hereinafter called “the
Testator”) died on or about the 10th day of December 1985 leaving a Will
dated the 15th day of October 1985 (a copy of which is annexed hereto and
marked “A”) appointing BERNARD GEORGE ALLEN and DEREK JOHN
DALLOW Executors and Trustees of his Estate Probate of the said Will
having been granted out of the High Court of New Zealand to the said
Executors and Trustees on the 12th day of February 1986
AND WHEREAS all the Beneficiaries are sui juris
AND WHEREAS doubts have arisen as to the construction of the Will and it
is alleged by the Beneficiaries and Trustees that the operation of the said
Will may not provide the Beneficiaries with the bequests as the Beneficiaries
understood the Testator intended each of the Beneficiaries to receive
AND WHEREAS it is the express wish of all the Beneficiaries that the
Testator’s testamentary wishes be altered or modified as set out herein in
place of the provisions of the said Will as Probated.
AND WHEREAS the Beneficiaries have taken or been given ample
opportunity to take independent legal or other advice on the implications of
the amendments herein detailed.
[25]
The substantive provisions of the Deed relevantly provided:
1.
THAT the Trustees are hereby directed to administer the Estate of
the Testator in terms of the aforesaid Will as amended herein in place
of the said Will dated the 15th day of October 1985 (annexed “A”)
and the Trustees hereby agree to act in accordance with these
directions.
…
3.
THAT the bequests set out in clause 3 of the said Will shall remain
as set out therein.
4.
THAT the forgiveness set out in clause 4 of the Will shall remain as
set out therein.
5.
THAT the bequest set out in clause 5 of the said Will shall remain as
set out therein.
6.
THAT the said Will shall be amended/clarified as set out herein:
(i)
That the said ROSS McKAY BETHELL shall receive the
principal farm property more particularly described in
Certificate of Title 6B/653 subject to the said CHRISTINE
ANNE RICKARD being entitled to call for, at any time, an
allotment up to 10 acres in the area known as the camping
grounds near the main road and the said ROSS McKAY
BETHELL shall sign such survey plans, Memorandum of
Transfer or other documentation to enable the said
CHRISTINE ANNE RICKARD to receive the said area,
subject to the local authority’s approval provided that such
approval can be obtained at any time during the period of the
joint lives of the said ROSS and CHRISTINE.
(ii)
That CHRISTINE ANNE RICKARD is to have transferred
to her the property known as Lot 5 being 2.5 acres and a
one-half interest in the remaining subdivision sections being
Lots 29, 30, 34, 35 and 38.
(iii)
That the said MARGARET ELAINE PARKES is to have
transferred to her a one-half interest in the said Lots 29, 30,
34, 35 and 38, together with all or any interest held by the
late JOHN NEALE BETHELL in those properties in the
Tasman View Road subdivision jointly held with FRANCIS
PETER BETHELL.
(iv)
That any cash resources, both existing and from any future
moneys received, are to be used first in covering any
accountant/legal costs of the Estate, secondly on settlement
of a balance outstanding to the said FRANCIS PETER
BETHELL up to a sum not exceeding $7,500.00 and thirdly,
any balance divided in thirds between the said MARGARET
ELAINE PARKES, TRUDY JEAN BETHELL and
CHRISTINE ANNE RICKARD.
(v)
It is hereby agreed by ROSS McKAY BETHELL that in the
event of any transfer/s of any part/s or the whole of the
principal block of land inherited by him other than that
referred to going to CHRISTINE in clause (i) and (ii) herein,
he shall pay to each of the said TRUDY, CHRISTINE and
MARGARET the nett balance from the said sale/s or
transfer/s moneys up to the sum of $31,500.00 to each of the
said TRUDY, CHRISTINE and MARGARET. In the event
of there being insufficient funds from any one of such sale/s
or transfer/s the nett sale proceeds shall be paid equally to
CHRISTINE, MARGARET and TRUDY and the balance
shall be paid from any further sale/s, or transfer/s until each
of the said CHRISTINE, MARGARET and TRUDY have
received the sum of $31,500.00. In the event of a transfer
being for less than the market value then ROSS shall be
required to account up to the market value in payment of the
said balance owing to CHRISTINE, MARGARET and
TRUDY. Such obligation on the said ROSS shall not be a
debt upon his estate, however the benefit from the moneys
shall be payable to the Estates of the said TRUDY,
CHRISTINE or MARGARET in the event of either of them
pre-deceasing the said ROSS.
…
[26]
For present purposes, the main focus of the case is on cl 6(i). The sections
referred to in cl 6(ii) and (iii) were already in separate titles arising from previous
subdivisions and did not require any resource consent. Clause 6(v) also assumes
significance because Ms Grant submitted it meant that Ross was free to sell all or
part of the principal block at any time with the consequence that Chrissie’s rights
under cl 6(i) would come to an end unless she had by that time obtained the
subdivision consent contemplated by cl 6(i).
(a)
What area of land was Chrissie entitled to under the Deed?
The approach to interpretation adopted in the High Court
[27]
The Judge held that the Deed was to be interpreted according to the principles
described by Lord Hoffman in Investors Compensation Scheme Ltd v West Bromwich
Building Society, adopted by our Supreme Court in Vector Gas Ltd v Bay of Plenty
Energy Ltd.3 The Judge summarised these principles in these terms:
[27]
… the interpretation of a commercial agreement is the ascertainment
of the meaning it would convey to a reasonable person who had all the
3
Vector Gas Ltd v Bay of Plenty Energy Ltd [2010] NZSC 5, [2010] 2 NZLR 444 at [61] citing
Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 at
912–913 (HL).
background knowledge that would reasonably have been available to the
parties in the situation in which they were at the time of the contract. The
language used is generally given its natural and ordinary meaning.
However, the background facts may suggest that the language used does not
accurately reflect the intention of the parties.
[28]
The Judge went on to consider whether evidence relating to pre-contractual
negotiations and declarations of subjective intent was admissible as part of the
“factual matrix”. She drew attention to the distinction drawn by Tipping J in Vector
between the subjective intent of negotiations and evidence derived from negotiations
which shows objectively the meaning the parties intended their words to convey.4
Such evidence could include the circumstances in which the contract was entered
into and any objectively apparent consensus as to the meaning operating between the
parties. Evidence of a party’s subjective intention was not relevant to an objective
resolution of interpretation issues.
[29]
Courtney J also referred to Tipping J’s discussion in Vector about comments
he had made earlier in Wholesale Distributors Ltd v Gibbons Holdings Ltd as to the
relevance of subsequent conduct to the interpretation of a contract. 5 In Vector,
Tipping J said that:6
The key point is that extrinsic evidence is admissible if it tends to establish a
fact or circumstance capable of demonstrating objectively what meaning
both or all parties intended their words to bear.
[30]
Courtney J’s approach was summarised in these terms:
[30]
I therefore proceed on the basis that evidence of pre-contractual
negotiations is inadmissible and statements of subjective intent made either
before or after the deed was executed are inadmissible in the search for the
parties’ intentions.
However, objective evidence of the facts and
circumstances surrounding the negotiations may be considered.
[31]
She began her consideration of the interpretation of cl 6(i) on this basis:
[31]
On its face the area referred to in clause 6(i) would be limited to the
camping ground because, when used as a preposition in relation to a place,
“in” means “within the limits or bounds of”. But this interpretation is put in
4
5
6
At [27]–[29].
Vector, above n 3, at [30]–[31] citing Wholesale Distributors Ltd v Gibbons Holdings Ltd [2007]
NZSC 37, [2008] 1 NZLR 277 at [52]–[53].
At [31].
doubt once it is known that the camping ground is much less than ten acres
and even more so when one considers the background to the deed.
(Footnote omitted)
[32]
The Judge then went on to consider a number of factors she considered
relevant before concluding that:7
… the overwhelming weight of the evidence is that the parties intended to
confer on Chrissie rights in respect of an area of ten acres that took in the
camping ground and the clay patch.
Discussion of the interpretation approach
[33]
The Judge correctly determined that the reference to 10 acres in the Deed was
drawn from the terms of John’s Will. She was satisfied that the parties to the Deed
intended to retain the meaning of this phrase as it was used in the Will. The Judge
considered that the reference to 10 acres in the Will constituted background
knowledge available to the parties at the time of entering the Deed. We agree.
[34]
We agree with the Judge that both the Will and the Deed must be read
together. That follows inevitably because the whole purpose of the Deed was to
modify, clarify or confirm the terms of the Will. Some provisions of the Will remain
(particularly those in cls 3, 4 and 5) while others were said to be amended or
clarified by the Deed. Notably, cl 6 fell into this last category although the extent to
which cl 6 amended, clarified or replaced provisions of the Will was a matter of
debate before us.
[35]
The Judge did not refer to the principles relating to construction of a will. It
is well settled that, in construing a will, the object of the court is to ascertain the
intention of the testator as expressed in his or her will when read as a whole in the
light of any extrinsic evidence admissible for the purpose of its construction.8 The
starting point is that a word or a phrase is given its usual or ordinary meaning. 9
7
8
9
Bethell, above n 1, at [44].
John G Ross Martyn and others Theobald on Wills (17th ed, Sweet & Maxwell, London, 2010)
at 285; GE Dal Pont and KF Mackie Law of Succession (LexisNexis, Australia, 2013) at [8.4];
Laws of New Zealand Wills at [164].
Dal Pont and Mackie, above n 8, at [8.6] citing Abbot v Middleton (1858) 7 HL Cas 68 at 114, 11
ER 28 at 46.
However, where there is ambiguity, the court is entitled to “sit in the testator’s
armchair”:10
…to put itself in the position of the testator and to consider all material facts
and circumstances known to the testator with reference to which he is to be
taken to have used the words in the will, and then to declare what is the
intention evidenced by the words used with reference to those facts and
circumstances which were (or ought to have been) in the mind of the testator
when he used those words.
[36]
The subject-matter of the gift described by the testator must be ascertainable
and capable of being disposed of by the will of the testator, or, if not, the gift may be
validated under the equitable doctrine of election, or otherwise. 11 A testamentary
disposition is only void for uncertainty if it is utterly impossible to put a meaning on
it; it is not enough that there are difficulties in interpreting a disposition that is
ambiguously expressed.12 The court will endeavour to give effect to the testator’s
intention including determining the scope of the will provision itself where
necessary.13
[37]
We also consider that in construing a deed of family arrangement which sets
out to modify the terms of a will, an approach more akin to that adopted in the
construction of a will should be considered. Such an approach would give weight to
John’s original intention to provide Chrissie with 10 acres of land either as an
outright gift or, if subdivision consent could not be obtained, by way of a life
interest. We accept that approach would be subject to any contrary intention evident
from the terms of the Deed.
[38]
Our attention has been drawn to a recent decision of the Supreme Court of
the United Kingdom in which it has been held the approach to interpreting wills
10
11
12
13
Dal Pont and Mackie, above n 8, at [8.39], citing Allgood v Blake (1873) LR 8 Ex 160 at 162
(Exch) and Perrin v Morgan [1943] AC 399 at 414 (HL).
Laws of New Zealand Wills at [14] citing Andrew Alston Garrow & Alston Law of Wills and
Administration (5th ed, Butterworths, Wellington, 1984) at ch 2.
Laws of New Zealand Wills at [241] citing Re Roberts (1881) 19 Ch d 520 (CA) at 529; Heenan
v Heenan (1839) 12 NZLR 111 (SC); Francis Barlow, Christopher Sherrin and
Richard Wallington (eds) Williams on Wills (9th ed, LexisNexis, United Kingdom, 2008) at
[53.1].
Williams on Wills, above n 12, at [49.1] citing Baker v Baker (1858) 6 HL Cas 616 at 622;
Hickling v Fair [1899] AC 15 (HL) at 27 and Doe d Hickman v Haslewood (1837) 6 Ad & El
167 at 174, 122 ER 63 (KB). See also Talbot v Talbot [1968] 1 Ch (CA).
should be the same as that for interpreting commercial contracts. 14 In our view,
whether this case is approached on the basis of the principles applicable to will
construction or by applying principles conventionally applied to the construction of
commercial contracts, the background facts known to the parties at the time of the
Will and the Deed are relevant. Prominent amongst these is the undisputed evidence
that John, Ross, Chrissie and Trudy all knew that the camping ground was much less
than 10 acres in area. The Judge’s findings on this point were:
[38]
I find, further, that when John made the reported references to ten
acres, he knew very well how much ten acres was and that the camping
ground was much less than that. John had worked on the land his whole life.
He had undertaken subdivisions in the area, worked with surveyors for that
purpose, and dealt with the Council in relation to them. I do not accept that
John was confused about how big the camping ground was.
[39]
I am also satisfied that Ross, who had worked on and managed the
land with his father since 1980, knew that the camping ground was less than
ten acres. It is likely that Chrissie and Trudy also knew; Trudy gave
evidence of John teaching them to measure land by pacing it out. I did not
hear from Margaret and so cannot make any finding regarding the extent of
her knowledge.
[39]
Ms Grant acknowledged that Ross believed at the time of the Deed the area
of the camping ground itself was between five and six acres. His assessment has
proved to be accurate since, as earlier noted, the recent survey shows it has an area of
only approximately five acres.
[40]
Clause 7 of the Will is clear that the lifetime interest conferred upon Chrissie
was to comprise “ten (10) acres more or less together with the camp and shop
buildings thereon (if any) …”. We do not view this as meaning that the camp and
any shop buildings thereon were to be additional to the 10 acres and this was not
suggested by any party.
Rather, we interpret this phrase as meaning 10 acres
including the camp and any shop buildings thereon. In other words, the 10 acres to
be let to Chrissie during her lifetime at a nominal rental was to comprise a total of
10 acres (more or less) and was not confined to the smaller area the family knew as
the camping ground itself.
14
Marley v Rawlings [2014] UKSC 2, at [17]–[26].
[41]
In terms of cl 8 of the Will, if the area of land behind the McKay subdivision
could be subdivided then Chrissie was to receive absolutely the 10 acres “being the
same land referred to in Clause 7 herein…”. Clause 8 also provided for five acres to
be given to each of Margaret and Trudy in the event the land could be subdivided.
[42]
We agree with the Judge that the reference in cl 6(i) of the Deed to “an
allotment up to 10 acres …” was intended to have the same meaning as the 10 acres
referred to in the Will. However, we do not agree with the Judge’s prima facie view
that the reference to 10 acres “in the area known as the camping grounds near the
main road” meant “within the limits or bounds of” the camping grounds itself. Read
in the context of the provision made for Christine in the Will and the knowledge the
family had that the camping ground itself comprised much less than 10 acres, we
consider it is plain that the reference to “an allotment of up to 10 acres in the area
known as the camping grounds near the main road” referred to an allotment of up to
that size in the vicinity of the camping grounds.
[43]
Two points are obvious. First, since the key members of the family knew full
well that the area of the camping ground itself was much less than 10 acres, a smaller
area would have been specified if Chrissie’s interest was to be limited to the camping
ground itself. Second, and perhaps more importantly, if the interpretation advanced
by the appellants had been intended, then the Deed could have referred simply to an
allotment of the area known as the camping ground. Since the physical boundaries
of the camping ground were reasonably well defined, there would have been no need
to refer to its area in terms of acres at all.
[44]
If it were necessary to extend beyond the terms of the Will and the Deed and
the limited extrinsic facts we have mentioned, then we agree with the Judge that
other extrinsic evidence strongly supported her conclusion on the interpretation of
the Deed. We do not propose to set these out in detail since they are fully covered in
the High Court judgment. However, we briefly summarise the supporting evidence
relied upon by the Judge:

The reference to 10 acres for Chrissie from the principal block was
first included in a draft Will prepared for John in 1982 following a
family meeting after the death of his wife in 1980.

Chrissie’s unchallenged evidence was that John wanted her to have a
10 acre block at the camping ground area forming part of the principal
block. After the family meeting in 1980 she and John had walked
over the land including the clay patch which Chrissie told him she
wished to secure so that she could build a house in that area. Her
father had confirmed the camping ground area would be included to
provide her with an income either from the camping ground and/or the
shop and her bequest would also include the clay patch area so she
would have a building site.

Chrissie’s evidence on this point was confirmed by her sister Trudy.

John’s long-time friend, Alan Towler, said John had confirmed to him
several times that Chrissie was to receive a 10 acre block.

After John’s death, the executors under his Will applied for planning
consent to enable the subdivision of part of the principal block to
provide titles for one 10 acre block and two 5 acre blocks in an area
that included the camping ground, the wider clay patch area and an
area immediately behind the McKay subdivision.

The legal advice regarding the Deed consistently used the phrase
“10 acres” and there was never any suggestion in the negotiations
leading to the Deed that the reference to 10 acres should be revisited.
[45]
We would add that Ross wrote to Chrissie on 27 April 1986 when she was in
England regarding the terms of the proposed deed of family arrangement. In that
letter, Ross proposed (amongst other things) that Chrissie would “have a life tenancy
on the shop site and the clay pit”. He added:
This I believe to be what dad intended when he wrote his last will if the 5
and 10 acre subdivision could not go ahead (clause 8).
[46]
There were some contrary indications to the conclusion the Judge reached
about the interpretation of the Will. For example she referred to Maria’s evidence of
a conversation in 1985 when she worked with John and Ross planting trees along the
border between the camping ground and the area in which the clay patch was
created. She heard John say that he was putting in trees to define “Chrissie’s block”.
We agree with the Judge that this is not particularly cogent and is overwhelmed by
the other factors favouring her interpretation.
[47]
We were also referred to a letter Davenports wrote to Chrissie dated 4 August
1986 in which it was said she was to receive:
An interest in the family agreement that while Ross is the owner of the
principal block, Christine can have the right of use of approximately 10 acres
known to all members of the family as the area for the camping ground and
has the right at any time to have Ross sign applications to the Council and/or
a Transfer of the 10 acre block to establish a camping ground.
[48]
This formulation is expressed in terms that do not make much sense and, in
any event, in terms that did not find their way into the Deed.
[49]
Ms Grant also submitted that the Judge wrongly failed to take into account
other evidence after the Deed was signed which she submitted had a bearing on the
interpretation of the Deed. We have reviewed the matters raised but we are not
satisfied they meet the test of shared or mutual post-contract conduct in the sense
identified by Tipping J in Vector.15 In the main, the matters identified reflect the
separate and opposing views of the parties as to what they agreed to. We include in
this category attempts to rely on what was said on each side at a meeting on
25 September 2005 after the dispute arose. Material of that kind is not admissible
and does not assist. Nor do unilateral actions such as Ross moving the White House
onto the land claimed by Chrissie. On this issue, the Judge accepted the evidence of
Ms Renai Dawson that when she challenged Ross’s actions in moving the house onto
the side, he replied that he had done it in such a way that it could be relocated to
another site.16
15
16
Vector, above n 3, at [30].
At [59].
[50]
We note too the factual finding by the Judge that Chrissie repeated her call
for 10 acres several times after the initial call in 1991.
[51]
We conclude that the Judge was right to determine that Chrissie’s entitlement
under cl 6(i) was not limited to the area of the camping ground itself but extended to
an allotment of up to 10 acres in that vicinity.
(b)
What were the respective rights and obligations of Chrissie and Ross
under the Deed?
Chrissie’s rights
[52]
Chrissie’s rights under cl 6(i) of the Deed are susceptible to analysis in both
contractual and equitable terms. Both causes of action were included in Chrissie’s
amended statement of claim which was expressed in broad terms. In the High Court,
Chrissie argued that she acquired an interest enforceable by specific performance.
This proceeded by analogy with a claim for specific performance of an agreement
for sale and purchase.
On this footing, the Judge applied the well-established
principle that a purchaser acquires an equitable interest in the land if the contract is
capable of being enforced by specific performance: Attorney-General for England
and Wales v R.17
[53]
The Judge also referred to the decision of this Court in Bevin v Smith.18 That
case dealt with a conditional agreement for sale and purchase. This Court held that
the equitable estate passes in a conditional contract when equity will, by injunction
or otherwise, prevent the vendor from dealing with the property inconsistently with
the contract of sale, i.e. inconsistently with the purchaser’s contingent ownership
rights.19 It will be sufficient if the court will order specific performance to the
contract subject to the contingency.20 The Court stressed that whether the equitable
interest has passed will always depend on the terms of the contract itself and that, in
the end, equity must act according to the nature of the contract and the practical
situation of the parties.
17
18
19
20
Attorney-General for England and Wales v R [2002] 2 NZLR 91 (CA) at [94] per Tipping J.
Bevin v Smith [1994] 3 NZLR 648 (CA).
Bevin v Smith, above n 18, at 660 citing Re Rudge [1949] NZLR 752 (SC).
At 665.
[54]
In this Court, counsel on each side initially accepted that the determination of
Chrissie’s equitable interest (if any) in the property depended upon the analogy of an
agreement for sale and purchase. However, during argument, we explored with
counsel whether an alternative approach was more appropriate. The obvious point of
difference is that the Deed was not expressed in terms of an agreement for sale and
purchase and cl 6(i) does not require Chrissie to provide any consideration. Rather,
cl 6(i) simply repeats in modified form the rights to which she was entitled by way
of gift under cl 7 or cl 8 of the Will. On that footing, the stricter requirement for an
identified parcel of land which applies in the case of an agreement for sale and
purchase of land or an option to purchase does not have any direct application.
[55]
Rather, it is plain from the express language of cl 6(i) that it was intended
Chrissie would have distinct elements of choice. First, she was entitled to call for an
allotment at any time so long as any subdivisional approval was obtained during the
joint lives of Ross and herself. At the time of the Deed in 1987 Ross was 32 and
Chrissie was 27. It is common ground that, given the restrictive planning provisions
in force at the time, it was unlikely that subdivisional consent could then be
obtained. However, there remained the possibility that the rules might in future
change such that the approval might be obtained. The clause was clearly intended to
allow Chrissie to make her call against that future prospect at any time provided the
subdivision consent was obtained during the joint lives of Ross and herself.
[56]
Secondly, Chrissie had a choice as to the size of the allotment. It could be
any area up to a maximum of 10 acres. Thirdly, we consider it is implicit that
Chrissie would also have a choice about the shape of the allotment so long as it was
within the vicinity of the camping grounds near the main road and provided the area
was no greater than 10 acres. There is nothing in cl 6(i) to suggest that Chrissie was
required to obtain Ross’s consent to either the size or shape of the land she called for.
Again, an approach more consistent with that adopted in interpreting a will is
appropriate.
[57]
We consider that Chrissie’s right to choose or elect the final shape of the
10 acres is also supported by settled principles applicable to will construction and,
by analogy, to a deed of family arrangement modifying a will. Although not on all
fours with the present case, the extent to which the courts will uphold a gift made by
will expressed in general terms is illustrated by Stanton J’s decision In re Fenwick
(Deceased).21 Stanton J noted the rule expressed in the 1951 edition of Jarman on
Wills:22
Where the gift comprises a definite portion of a larger quantity, it is not
rendered nugatory by the omission of the testator to point out the specific
part which is to form such portion, the devisee or legatee being in such case
entitled to select; by which means the subject of the gift is reducible to
certainty; and “id certum est quod certum reddi potest”23 is a settled rule in
the construction of wills. Thus, if a man devise two acres out of four acres
that lie together, it is said that this is a good devise, and the devisee shall
elect.
So, if a testator devise a messuage, and ten acres of land surrounding it, part
of a larger number of acres, the choice of such ten acres is in the devisee.
[58]
Similarly, in relation to a deed, Young J upheld undefined mining or
quarrying rights in Ellison v Vukicevic as sufficiently certain.24 The plaintiff’s land
comprised approximately 160 acres. Only 10 were suitable for quarrying, and the
stone-bearing areas were not identified in the deed. Young J had two responses to
this issue: first, on its true construction, the deed gave the defendant the right to
choose the acres and nominate them to the plaintiff and thus make the property
certain. The second, and what Young J felt was probably the better answer, was that
the defendant’s right extended over the whole land but its activities or operations
pursuant to those rights would necessarily be confined to the place where the
quarryable stone was. Young J cited a series of authorities for the proposition that a
grant of an incorporeal hereditament25 in an area of land with the precise locus to be
chosen by the grantee is valid.26
[59]
Ms Grant relied on two authorities for the proposition that the gift in the deed
was not sufficiently ascertained. We consider both are distinguishable. The first was
Savill Bros Ltd v Bethell where the English Court of Appeal did not uphold a vendor
21
22
23
24
25
26
In re Fenwick (Deceased) [1957] NZLR 709 (SC).
Thomas Jarman and Raymond Jennings A Treatise on Wills (8th ed, London, Sweet & Maxwell,
1951) at 477.
It is certain whatever can be rendered certain.
Ellison v Vukicevic (1986) 7 NSWLR 104 (NSWSC)
A heriditament is any kind of property that is capable of being inherited.
South Eastern Railway Co v Associated Portland Cement Manufacturers (1900) Ltd [1910] 1 Ch
12 (CA); Wellington City Corp v Public Trustee [1921] NZLR 1086 (CA) and Talga Investments
Pty Ltd v Tweed Canal Estates Pty Ltd (1974) 1 BPR 9675 (NSWSC).
of land reserving a 40 foot strip of land from a conveyance. The purchaser had
purported to make an election defining the area.27 The case did not turn on whether
the land area was sufficiently ascertained but on the common law principle that a
limitation of a freehold estate to commence in the future was void. 28 We do not view
this case as having any application to a gift in a deed of family arrangement giving a
right to call for an area of land that is either ascertained or ascertainable.
[60]
The second case cited by the appellants was Asten v Asten.29 By his will a
testator gave a house and an associated area of land to each of his four sons. The
will did not define which house was to go to which son. Romer J held that the gifts
must fail since a right of election could not be established by the terms of the will.
No such difficulty arises in the present case. We note too that Romer J accepted that
extrinsic evidence was, in principle, admissible to establish which house was
intended for each son.30
[61]
Finally, we consider that the court would, if necessary, settle the boundaries
of the land itself. This would be consistent with the well-established principle that
the court will do its best to uphold a testator’s intention and, by analogy, the
intention expressed in a deed of family arrangement such as that in the present case.
[62]
We do not accept Ms Grant’s submission that cl 6(v) meant that Ross was
entitled to sell all or part of the principal block if this would have the effect of
bringing Chrissie’s rights under cl 6(i) to an end unless she had already obtained the
subdivisional consent. That interpretation is not sustainable in the light of the
explicit exclusion in cl 6(v) of land referred to in cl 6(i) and (ii) as going to Chrissie.
Those words make it clear that Ross could not sell the 10 acres to which Chrissie
was entitled under cl 6(i) or the other land she was to receive under cl 6(ii).31 The
exclusion of Chrissie’s rights to the 10 acres was consistent with John’s intentions to
provide the 10 acres to her.
27
28
29
30
31
Savill Bros Ltd v Bethell [1902] 2 Ch 523 (CA).
At 540.
Asten v Asten [1894] 3 Ch 260 (Ch).
At 263.
In fact, since cl 6(ii) referred to land other than the principal block, it was not necessary to
exclude it from a sale under cl 6(v) which related only to the principal block.
[63]
Ms Grant referred us to a letter sent by Davenports on 3 September 1986 to
family members in which it is recorded that Margaret had indicated that if Chrissie
got the 10 acres, allowance would have to be made in the event of Ross selling the
property in his lifetime. This remark was made over a year before the Deed was
signed and there is nothing to suggest it was ever followed through. The clear words
of the Deed must prevail.
Ross’s obligations
[64]
Ross had both express and implied obligations under cl 6(i). As to express
obligations, he was required to sign such survey plans, memorandum of transfer or
other documentation “to enable [Chrissie] to receive the said area …”, subject to the
local authority’s approval. Beyond the signing of the plans and relevant documents,
Ross had an implied positive obligation to facilitate the allocation and subdivision of
the area up to 10 acres for Chrissie when she called for it as the Judge recognised. 32
Correspondingly, Ross had an implied negative obligation not to do anything that
would impede Chrissie from securing the allotment. These implied obligations stem
from the express terms of cl 6(i) and by analogy with the well-understood implied
obligations in contracts for the sale and purchase of land. These include the implied
obligations to take reasonable steps to fulfil a conditional contract.33
[65]
Finally, we consider Ross also had an implied obligation to hold sufficient
land in the vicinity of the camping ground to enable Chrissie’s call to be
implemented when she exercised the right to do so. That obligation is properly
viewed as part of his obligation to facilitate the allocation and subdivision of the
land.
[66]
It follows that, in refusing to agree to Chrissie having an interest in the land
beyond the area of the camping ground itself, Ross breached his contractual
obligations under the Deed.
32
33
At [55].
John Burrows, Jeremy Finn and Stephen Todd Law of Contract in New Zealand (4th ed,
Lexis Nexis, Wellington, 2012) at [8.25] and Steele v Serepisos [2006] NZSC 67, [2007] 1
NZLR 1.
[67]
Alternatively, a similar result follows from an analysis of Ross’s equitable
obligations arising from the Deed. In view of her finding on the breach of contract,
the Judge did not find it necessary to deal in detail with the second cause of action
for breach of trust and Mr Thompson did not seek to advance this cause of action on
appeal because he considered it added little to a contractual analysis. We agree.
[68]
We are satisfied that in terms of the Deed, Chrissie’s equitable interest arose
immediately upon the Deed being signed, irrespective of the fact that she had not
then called for the land nor identified the size and shape of the allotment. Chrissie’s
equitable interest was sufficient to support a caveat as recognised in 2005. 34 It also
provided a sufficient basis to enable her to apply for injunctive relief should Ross
endeavour to sell the land or to grant an interest in it which would have priority over
Chrissie’s interests. Similarly if he took any other step that was inconsistent with her
entitlement or which would impede its realisation.
Summary to this point
[69]
On our approach, Chrissie’s equitable interest in the land first arose upon the
execution of the Deed in 1987 and did not require any further definition at that stage.
Her interest at that point was limited to the right to call for the land. When she made
her call in 1991, she defined the size of the area she sought up to the maximum of
10 acres. Neither the precise location of the land nor the shape of the lot needed to
be defined at that point to be enforceable.
Those matters were capable of
ascertainment at Chrissie’s election (so long as it was in the vicinity of the camping
ground) or in the manner adopted by the Judge we shortly discuss or by the final
determination of the Court if necessary. The precise boundaries were ultimately
defined by her application for subdivision and the survey plan that followed after the
Council’s consent.
34
This Court upheld Chrissie’s entitlement to the caveat when challenged: Bethell v Rickard
[2013] NZCA 38.
The evidence supporting the Judge’s approach to the determination of Chrissie’s
interest in the 10 acres
[70]
In the High Court and before us, there was much debate about the definition
(or lack thereof) of the boundaries of Chrissie’s allotment. As noted, on the view we
have taken, there was no need for precise definition. Within the express parameters
of cl 6(i) as to maximum size and the location of the land, it was Chrissie’s right to
define the shape of the allotment. However, if we are wrong in that view, we
consider the size of the allotment was sufficiently defined for the reasons identified
by the Judge. An aerial photograph with the allotment imposed was produced in
evidence. The logic of the Judge’s findings is more readily apparent from that
photograph.
[71]
The allotment for which subdivisional consent was sought was generally
rectangular in shape. The essence of Courtney J’s reasoning was that three of the
four boundaries were fixed – one by Bethells Road and two by the boundaries of an
adjoining property owned by a neighbour. As to the fourth (eastern) boundary, a
short section of it was fixed by the location of the western edge of the McKay
subdivision. The obvious identification of the fourth boundary would be to draw a
straight line (roughly parallel to the opposite long boundary) between the house
formerly occupied by Ross and Maria and the western edge of the McKay
subdivision. Of course, the overall size of the lot could not exceed 10 acres so this
was a controlling factor as well.
[72]
The Judge found as a fact that Chrissie had specifically sought both the
camping ground area and the area in which the clay patch was located. Her call in
1991 for 10 acres meant that, inevitably, she was seeking a greater area of land than
the camping ground itself. The Judge also referred to the application for resource
consent made in 1986 by the executors of John’s Will which we have already
mentioned.35 Although this identified a wider area, it also embraced the area called
for by Chrissie. The Judge’s reasoning regarding the boundary definition is best
described in her own words:
35
At [22].
[71]
Bethells Road runs along the northern-eastern side of the camping
ground so that boundary was fixed. A neighbour’s property (lot 4 DP 45364)
ran along the western side of both the camping ground and the clay patch so
that boundary was fixed. The position of the southern boundary, shown on
Davenports’ plan as a line running east perpendicular from the south-western
corner was readily identifiable because the area of clay from which the clay
patch took its name was located in that corner; the clay patch would
inevitably be delineated by reference to that feature. Finally, the McKay
subdivision ran along the eastern side of the camping ground so that
boundary was partly fixed. This left only the portion of the eastern boundary
between the end of the McKay subdivision and the southern boundary
undefined.
[72]
Ross’ house lay just outside the now-approved eastern boundary. It
was implicit that Chrissie could not have called for land that included Ross’
house. So a line up the eastern boundary from the end of the McKay
subdivision to a point perpendicular with a straight line across the southern
boundary at the rear of the clay patch (as depicted in the Davenports’ plan)
would produce an area of approximately ten acres that took in the camping
ground and the clay patch and did not impinge on Ross’ house.
[73]
Ms Grant made a number of points to support her submission that the
boundaries were insufficiently defined for an order for specific performance. For the
reasons already stated, in the context of a deed of family arrangement and the
specific terms (express and implied) of the Deed, we do not consider such definition
was called for. However, if greater definition were needed, we are not persuaded by
any of counsel’s submissions that the Judge’s conclusion on this issue was wrong. A
principal point made by Ms Grant was that the Judge was led into error by a
misunderstanding of the size of the clay patch. Ms Grant pointed to the Judge’s
statement that:36
… there were two relatively flat areas left; approximately four acres known
within the family as the camping ground and, immediately behind that, a
further approximately six acres known within the family as the clay patch.
[74]
We do not consider the Judge was in error in describing the clay patch as
having approximately six acres.
It is perfectly evident from the photographic
evidence that the clay patch itself is much smaller than six acres. The Judge had the
advantage of a visit to the site and we are satisfied that, when she referred to the clay
patch as having an area of six acres, she was referring to the balance of the land
beyond the camping ground in which the clay patch was located. She made this
clear, for example, at [71] of her judgment cited above when she referred to “the area
36
At [3] and elsewhere.
of clay from which the clay patch took its name was located in that [south-western]
corner”.
[75]
Ms Grant also drew our attention to a rough plan prepared by Chrissie’s
solicitor after she had lodged a caveat on the title to the principal block in June 2005.
There was correspondence with the appellants’ solicitors at that time which
ultimately resulted in the first caveat being replaced by a second. Chrissie’s solicitor
emailed the estate’s solicitors confirming that she required “the 10 acres known as
the camping ground” transferred to her in accordance with cl 6(i) of the deed of
arrangement.
The email annexed a marked up copy of the title showing its
“approximate location”.
The email was sent at a time when there were
communications between the lawyers for the parties attempting to obtain Chrissie’s
agreement to the replacement of her first caveat with one more limited in area. The
first caveat affected the whole of the land in the title to the principal block although
it stated the claim was limited to a then undefined area of 10 acres. Chrissie’s
solicitor said in a later email that the area shown on the plan he had sent “was
marked up by the writer and was no more than an informal guess for the purpose of
getting some clarity on where the land was”.
[76]
The lawyer was not called to give evidence but Chrissie was cross-examined
about whether she had given instructions to him when this plan was sent. She agreed
she had some discussions with her lawyer about the time the caveats were being
discussed but had no specific recollection of any discussion about the plan shown in
the relevant email.
[77]
We are not persuaded that any weight should be given to this point. On our
view of the matter, Chrissie was entitled to decide where the boundaries should be
drawn within the broad parameters described in the Deed or, alternatively, the
boundaries were capable of ascertainment with sufficient precision if required. As it
happens, the lawyer’s “informed guess” was broadly similar to the shape of the
allotment for which consent was sought and obtained.
[78]
Ms Grant also argued that the fourth (eastern) boundary did not have to be
drawn in a straight line. It could have deviated around natural features of the land so
long as, overall, the area of the allotment did not exceed 10 acres.
While
Mr Thompson conceded this theoretical possibility, he submitted that in the context
of a deed of family arrangement, there was no realistic prospect that the family
would have misunderstood how the allotment would be defined. We agree with the
Judge’s ultimate finding that from the time Chrissie called for 10 acres in 1991, Ross
knew what area was being claimed with sufficient particularity to have sought
Council consent for the subdivision of that area. The allotment would also have
been sufficiently defined from 1991 onwards to enable a court to order specific
performance on the conventional principles applicable to agreements for sale and
purchase.
(c)
Does Maria have any interest in the White House and the quarter acre of
land in priority to Chrissie’s rights or any entitlement to compensation?
[79]
After Ross and Maria separated, they entered into an informal agreement
which they both signed on 18 May 2004. It purported to be “a full and final property
settlement after the dissolution of our marriage in February 2001”. Although their
signatures to the two page agreement were witnessed, there were no solicitors’
certificates as required by s 21F of the Property (Relationships) Act 1976. The Judge
found that neither party had sought legal assistance in relation to this agreement. For
present purposes, cl 2 is the relevant clause. It provided:
Maria will take full ownership of the rental property known as the “White
House” with a lifetime interest in the land more or less ¼ acre around the
“White House”, and a right of way access to it up the existing driveway.
This is subject to any circumstance or situation where Ross may develop an
unresolvable dispute with the tenants of the White house after mediation.
And Maria will favourably consider replacement of tenants. Ownership of
the White House is subject to Maria also taking ownership of the mortgage
at the ASB of $67,000.00 account number 123011-0511600-00 as at
February 2004. Maria agrees to repay the mortgage at around $1000.00 per
month, in general this is the amount received in rent less interest and
expenses as applicable. After the mortgage is discharged any rent or other
income that is received is entirely for Maria’s benefit and at her disposal. It
is noted that the mortgage is secured over Ross Bethells land at 280 Bethells
Road being Pt 1A Lot of Waitakere. The White House and ¼ acre environs
will revert to the Bethell Family Trust on Maria’s death.
[80]
The agreement went on to refer to other matters and concluded with a
statement that Ross would form a family trust. It does not appear that any trust was
ultimately formed despite Ross referring to it later in a document he signed shortly
before undergoing surgery in July 2007 not long before his death.
[81]
At the time this agreement was signed, the property was rented but, as earlier
noted, Maria moved into the White House in 2009 after Ross’s death. Although cl 2
of the agreement refers to Maria having “full ownership of the rental property known
as the White House with a lifetime interest in the land more or less ¼ acre around the
White House and a right of way access to it up the existing driveway”, Ms Grant
accepts that the intention was to grant Maria a life interest in both the house and the
surrounding ¼ of land and right of way access. We agree that this appears to be the
correct interpretation of what was intended having regard particularly to the last
sentence of cl 2.
[82]
The argument in the High Court proceeded on the basis that this agreement
gave Maria an equitable interest in the land. It was submitted that Maria had a prior
equitable interest because any interest obtained by Chrissie when she obtained her
resource consent did not arise until after the property agreement of 18 May 2004.
[83]
The Judge adopted the principles guiding the resolution of competing equities
as identified by this Court in Perkins v Purea.37 In that case, this Court approved the
principles stated by Potter J in Mercury Geotherm Ltd (in rec) v McLachlan.38 The
Judge held that Maria had the burden of showing that, taking all the circumstances
into account, she had the better equity.
[84]
Courtney J accepted that Maria did not know about Chrissie’s claim when she
entered into the 2004 agreement. She had entered that agreement in good faith and
without knowing that Chrissie had already acquired an interest in the same piece of
land. Correspondingly, the Judge found that Chrissie did not know about Maria’s
interest created by the 2004 agreement, probably until about 2011. The Judge also
found that if Maria had known of the competing claim to the 10 acres, she would not
have agreed to settle with Ross in the terms she did in 2004. Nor would she have
37
38
Perkins v Purea [2009] NZCA 541, (2010) 10 NZCPR 851 at [73].
Mercury Geotherm Ltd (in rec) v McLachlan [2006] 1 NZLR 258 (HC) at [140].
agreed to move the White House onto the property in 1999 if she had known of
Chrissie’s claim.
[85]
The Judge went on to find however that Maria’s position was not
irretrievable. She recorded that Vicky had acknowledged that if Maria’s claim did
not take priority over Chrissie’s claim then Maria would be entitled to claim against
Ross’s estate. Maria was therefore in the same position as she would have been in
2004 had she known of Chrissie’s claim.
Analysis
[86]
By virtue of s 21F of the Property (Relationships) Act, the agreement
between Ross and Maria in 2004 was void in the absence of a court order to the
contrary under s 21H. Irrespective of the validity or otherwise of the agreement for
relationship property purposes, we are satisfied Ross had no right to grant Maria an
interest in the property that had priority over Chrissie’s entitlement. By purporting
to do so, Ross breached his contractual obligations as we have already described.
We are satisfied that Maria does not have any equitable interest in Chrissie’s
allotment that could have priority over Chrissie’s claim to both legal and equitable
title to the land.
[87]
The consequence for Maria is that she has no entitlement to occupy any part
of the allotment for which Chrissie has obtained resource consent. We also conclude
that Maria has no entitlement to an interest in the house itself. We were informed by
her counsel that, although the house was originally moved onto the site from
elsewhere, it has since been permanently fixed to the land. This was supported by
Maria’s own evidence. She confirmed that earthworks were undertaken to level the
land and to provide access; decks and verandahs were established; the house was
connected to a septic tank and storm water drainage; a bathroom was “internalised”
and other improvements added such as a laundry, water-tank and a sleep-out. Maria
also confirmed that the house could only be moved with substantial cost and
difficulty. In accordance with established principle, the house must be treated as part
of the land in these circumstances.39
[88]
Ms Grant submitted that Chrissie would be unjustly enriched if she became
entitled to the White House which has an agreed valuation of $75,000.
She
submitted that any order for specific performance should be made on the condition
that Chrissie paid to Maria compensation in that amount.
[89]
We agree with the Judge that this submission must be rejected. Neither Maria
nor Ross has any lawful right to the house and, as the Judge found, Ross took a
calculated risk when it was moved onto the site. At best, Maria’s right (if it had
prevailed) was to a life interest in the house and its surrounding land. We note too
that Maria has the right to seek relief against the estate as Vicky acknowledged.
[90]
Maria also claimed compensation for work she carried out on the White
House during the period 2010 to 2013. The Judge rejected these claims on the basis
that, although Chrissie and Maria took their respective interests in good faith, Maria
knew of Chrissie’s claim within a relatively short time and her position had not been
prejudiced. The work had been carried out when Maria knew of Chrissie’s claim to
the land on which the White House was established. Counsel had been unable to
suggest any principled basis on which compensation could be paid in the
circumstances. We agree with the Judge’s conclusion in that respect.
(d)
Who was responsible for the costs of the subdivision for Chrissie’s
allotment?
[91]
At the time the Deed was executed in 1987, an application for consent to
subdivide could be made only by the owner of the land. 40 It was not until the
passage of the Resource Management Act 1991 that a non-owner could apply for
resource consent. The Judge found that the obligations under the Deed were to be
interpreted on the basis that the parties knew or were presumed to know that only
Ross could have sought the Council’s approval for subdivision. On that footing, she
39
40
GW Hinde, DW McMorland & NR Campbell Principles of Real Property Law (2nd ed,
Lexis Nexis, Wellington, 2014) at [6.034]–[6.036]; Lockwood Buildings Ltd v Trustbank
Canterbury Ltd [1995] 1 NZLR 22 (CA).
Local Government Act 1974, ss 271, 275 and 276.
determined that, once Chrissie had called for the land, Ross had an implied
obligation to take reasonable steps within a reasonable period to obtain the consent.
[92]
As it happened, Chrissie sought and obtained the consent herself since, by the
time she did so, the law had changed to permit this to occur. We understand that
Chrissie has borne most of the costs of obtaining the consent but Ross’s estate has
paid for the approval of the survey plan under s 223 of the Resource Management
Act. Despite the Judge finding to the contrary, Mr Thompson conceded that the
costs of the subdivision were to Chrissie’s account. To the extent that the estate had
incurred expenses in obtaining the consent, he also accepted that Chrissie was
obliged to reimburse them, subject to the costs being reasonable.
(e)
If the appeal succeeds, does Chrissie have a claim nevertheless to a life
interest in the land under the Will?
[93]
Mr Thompson argued in the alternative that, in the event of our finding
against Chrissie on the other issues, cl 7 of the Will survived the deed of family
arrangement and that, at the least, Chrissie was entitled to rent the 10 acres at a
nominal rental for her lifetime. In view of our conclusions, it is unnecessary for us
to deal with this point.
Application to adduce further evidence
[94]
As earlier noted, there was a very late application by the appellants for leave
to adduce further evidence on appeal. The application was filed on Friday 15 August
2014 with the fixture commencing on Tuesday 19 August 2014. No satisfactory
explanation for the delay was given. The respondent had no opportunity to file any
affidavit in response and opposed the application.
[95]
The evidence arose in consequence of discussions that took place in April
2014 which Vicky said she had with the surveyors responsible for the subdivision.
In the main, the evidence relates to what was said at these discussions and some
previously undisclosed written material as to how the boundaries of the 10 acres
were drawn when the subdivision consent was lodged in 2006. Letters attached to
Vicky’s affidavit in support of the application show that her evidence is disputed by
the surveyors. In these circumstances we have no way of resolving that dispute and
we are not persuaded that any of it is material to our judgment in any event.
[96]
There is also reference to some plans prepared by the surveyors in 2008
showing alternative subdivision plans with a smaller area. It is evident that these
plans were prepared in an effort by Chrissie to reach a resolution of the dispute.
They cannot assist us in the issues we have to decide.
[97]
Ms Grant relied particularly on the undisputed fact that it emerged during the
course of the April 2014 discussions that when a formal survey plan was completed
for s 223 purposes, the land area shown on the scheme plan of subdivision was only
9.2 acres. In a letter from the surveyors they explain that the scheme plan was
prepared from an aerial photograph and this has resulted in the discrepancy.
Nevertheless the consent is for 10 acres and the surveyors’ advice is that the
boundaries can be adjusted to 10 acres or Chrissie may accept the 9.2 acres shown
on the scheme plan. There is nothing material in this point.
[98]
For these reasons the application by the appellants for leave to adduce further
evidence is dismissed.
Result
[99]
For the reasons given the appeal is dismissed, save that the respondent is
liable for the reasonable costs of obtaining the subdivision consent.
[100] The parties agreed that costs should follow the event and should be fixed for
a standard appeal on a Band A basis. Accordingly, the appellants must pay costs to
the respondent for a standard appeal on a Band A basis with usual disbursements.
Solicitors:
Turner Hopkins, Auckland for Appellants
Patterson Hopkins, Auckland for Respondent