Lines v Pikia

• Jurisdiction: New Zealand
• Judge: Venning J
• Judgment Date: 15 March 2013
• Neutral Citation: [2013] NZHC 503
• Docket Number: CIV-2011-4 70-000898
• Court: High Court
• Date: 15 March 2013

Between

Raimapaha Lines as Administrator of the Estate of Raukawa Nora Hurll-Ianganui

Plaintiff

and

Roger Haare Charles Pikia

First Defendant

and

Mioriri

Second Defendant

and

Roger Haare Charles Pikiaand Redoubt Trustees Limited

Third Defendant

and

Bank of New Zealand

Fourth Defendant

[2013] NZHC 503

CIV-2011-4 70-000898

IN THE HIGH COURT OF NEW ZEALAND TAURANGAREGISTRY

Claims by administrator against the defendant for alleged breach of fiduciary duty by using enduring power of attorney to transfer property owned by the grantor of the power of attorney to himself — plaintiff claimed for an accounting of rental received since the property was transferred to the defendant, that the land be transferred back to the plaintiff unencumbered and exemplary damages — grantor revoked defendant's power of attorney after she discovered the transactions — whether defendant had transferred the property to himself with the knowledge and consent of the grantor or whether attorney had acted in breach of the fiduciary relationship — whether claim was time-barred by s4(9) Limitation Act 1950 (“LA”) (6 year limitation of actions) or whether s21 LA applied (no limitation in respect of trust property) — whether plaintiff was estopped from asserting the present claim by the actions of the grantor during her lifetime (by withdrawing a caveat) — whether defence of laches applied.

Appearances:

D M O'Neill for Plaintiff

J Temm for Defendants

This judgment was delivered by me on 15 March 2013 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date: 15/ 3/ 13

STEPHEN HEWLETT

Deputy Registrar

High Court of New Zealand

JUDGMENT OF Venning J

Introduction/parties

1 The plaintiff is a daughter of Raukawa Nora Hurihanganui (the deceased) and the executrix and administratrix of the deceased's estate. The first defendant (the defendant) is one of the deceased's grandchildren.

2 The defendant held a power of attorney for the deceased. The defendant used the power of attorney to transfer property belonging to the deceased to himself. The plaintiff alleges that, in doing so, he breached the fiduciary duty he owed the deceased.

3 The defendant subsequently transferred the property to the second defendant (his father-in-law) who at the time was the trustee of the defendant's family trust. The second defendant in turn transferred the property to the third defendants. The third defendants are the current trustees of the defendant's family trust.

4 The plaintiff has discontinued the proceedings against the second and fourth defendants.

Background

5 The deceased had 11 children. Apart from the plaintiff and a brother Nuku, who died in 2004, the deceased had the following children: Haana (Girl) Mavourneen-Pikia, Tupaea Hurihanganui, Harold Hurihanganui, Tupuku Hurihanganui, Areta Rita Hohua, Heni Jane Tuaupiki, Molly Ngahaka Hurihanganui, Mabel Tahu, and Aoreke Alice Riini.

6 The deceased also had a number of grandchildren including the defendant and Errolena Tamawhainga (Errolena). The defendant is Haana's son. Errolena is Molly's daughter.

7 The property in issue comprises two blocks of land at Reporoa on State Highway 5, Reporoa. The deceased's home was on the first block (the home block). The second block was a bare block of land behind the home block. It was used for grazing (the grazing block). Both were Maori freehold land until 1968. The deceased retained an interest in some further adjoining land which remained as Maori freehold.

8 The deceased, together with Molly (and Molly's children, including Errolena) lived in the house on the home block for several years. The defendant also spent time there with the deceased and was, partly at least, brought up by her.

9 From 1993 (when she was in her late sixties) until 2000 (when she was in her mid to late seventies), the deceased went to Australia and lived in Brisbane with Haana, the defendant's mother. Molly remained living on the home block.

10 During the time the deceased lived in Australia, she returned to New Zealand regularly, often once or twice a year.

11 On one of her visits home in 1994, the deceased made a will. She appointed Molly and the defendant as her trustees. The will provided for Molly to have a life interest to live on the home block on certain conditions. It divided the residue of the estate between the defendant and Errolena. The deceased's wider family have always understood that the deceased was close to the defendant and Errolena because they had lived with her as young children.

12 In 1995, the deceased granted the defendant an enduring power of attorney with general authority to act on her behalf in relation to the whole of her property.

13 The solicitor who acted for the deceased in preparing both her will and the power of attorney was Paul Burdett, who at that time was practising at Taupo.

14 The defendant used the power of attorney to act on the deceased's behalf at a hui discussing her beneficial interests in the Maori land that adjoined the home and grazing blocks. Also, on 25 July 1997, acting as attorney for the deceased, the defendant executed a deed of lease for the grazing land. The lessee, Ms Hathaway agreed to pay rental of $9,000 per annum.

15 Then, on 16 February 1999 (while the deceased was still in Australia) and using the power of attorney, the defendant executed a transfer of both the home and grazing blocks to himself. The transfer recorded the consideration was $200,000. On the same day, the defendant executed a declaration of non-revocation of the power of attorney.

16 The defendant then used the home and grazing blocks to enable him to purchase a pig farm at Springs Road, Reporoa. On 24 November 1999 the transfer from the deceased to the defendant was registered, together with a mortgage to the Bank of New Zealand (BNZ). The mortgage was secured against both the home and grazing blocks and also against the land at Springs Road.

17 The deceased and Haana returned to live in New Zealand in 2000. The deceased did not return to the home block, but went to live with Haana in Cambridge. Sometime after that, the plaintiff became aware that the deceased was not receiving any money from the rental of the grazing block. In 2002 the plaintiff also became aware the home and grazing blocks had been transferred to the defendant. The plaintiff arranged for the deceased to see a solicitor, Mr Milroy. The deceased learned what the defendant had done. As a result the deceased revoked the appointment of the defendant as her attorney and on 30 May 2002, she made a new will. In that will, she left her estate (apart from her interest in the Maori land over which she created a whanau trust) equally to all her children.

18 On 5 November 2002, the deceased registered a caveat against both the home and grazing blocks. That caveat was subsequently withdrawn on 20 May 2004. On the same day, the defendant replaced the mortgage from the BNZ with a mortgage to private lenders Mr and Mrs Anderson.

19 In September 2005, the defendant transferred the properties to the second defendant, the trustee of the defendant's family trust. At the same time the property was refinanced by Basecorp Finance Ltd (Basecorp). On 13 September 2007 the second defendant retired as trustee and the defendant appointed the third defendants as trustees of his family trust in place of the second defendant. The next day, 14 September 2007, the property was transferred from the second defendant to the third defendants as trustees of the defendant's family trust. On the same day, a further mortgage securing a further refinancing arrangement with Basecorp was registered. In July 2008, the third defendants refinanced the property, this time with BNZ again.

20 On 6 September 2010, at the age of 86, the deceased died at Hamilton. On 22 October 2010 probate of the deceased's will was granted to the plaintiff.

21 On 26 November 2010 the plaintiff registered a caveat. She then commenced these proceedings on 26 October 2011.

The issues

22 The defendant admits the deceased granted him an enduring power of attorney in relation to her property and that he exercised that power to transfer both blocks of land to himself in 1999. He further accepts that the power of attorney created a fiduciary relationship between the deceased and himself.

23 The following issues are, however, in dispute:

• (a) Whether the defendant transferred the property to himself with the knowledge and consent of the deceased or whether, in effecting the transfer, the defendant acted in breach of the fiduciary relationship?

• (b) In the event the first issue is determined against the defendant he raises a number of positive defences. The issues raised are:

  • (i) The application of the Limitation Act 1950;

  • (ii) Whether the plaintiff is estopped from asserting the present claim by the actions of the deceased during her lifetime;

  • (iii) Whether the plaintiff's claim is met by the defence of laches, and

  • (c) In the event the plaintiff succeeds on the above issues the remaining issue is what relief, if any, is appropriate in the circumstances of this case.

24 The defendant also pleaded that as the property was not part of the estate at the time the will was made in 2002, there can be no relief in relation to it. However, I understood that during the course of submissions Mr Temm accepted that, as the deceased's executrix and administratrix, the plaintiff was able to pursue any legal claim the deceased could have herself pursued. That must be correct. The deceased could have pursued a claim in relation to the property during her lifetime, even though it was registered in the third defendant's name. The deceased's estate vests in the plaintiff. That includes real and personal property including things in action. 1 Subject to the positive defences raised above, there is no legal bar to the plaintiff, acting as...