Contract: Corrick v. Silich

In February 2015, Taranaki aviation enthusiast Brett Emeny paid $90,000, strapped himself into a vintage Trojan T28 ‘war bird’ and flew home to New Plymouth.  In his wake, he left a divided twenty-two member syndicate arguing over who owned the plane.

The Court of Appeal was told there are only two Trojan T28 aircraft in New Zealand.  Trojans were developed in the 1950s as a single seater training aircraft for the US air force and navy.  ZK-JGS was purchased by a twenty-two man syndicate in 1990.  In legal jargon, they owned the aircraft as tenants-in-common: each had a separate undivided ownership interest.  All agreed to syndicate rules setting out rights of use and apportionment of costs.  Over the years, the aircraft was used less.  With debts outstanding of some $63,500, it was decided to put the aircraft up for sale. Members decided to wind up their syndicate.  Four syndicate members were appointed as a ‘management group’ to sell the aircraft. Closing date for tenders was set for 19 December 2014.  One syndicate member, David Corrick, put in a bid of $63,523 later upped to $85,000 when a bidding war erupted between syndicate members: Brett Emeny offered $75,000; Glenn McCready $80,000.

The court was told the management group then polled syndicate members as to which offer they were comfortable with.  A majority favoured Mr Corrick.  He sued when Mr Emeny fronted up with $90,000 and flew off with the aircraft.

The Court of Appeal ruled there was no contract with Mr Corrick.  The syndicate delegated to its management group the task of selling the aircraft. At no time did the management group accept Mr Corrick’s offer.  The closest it got was in making a counter-offer, rejecting contract terms prescribed by Mr Corrick and suggesting in reply a more simple agreement that would suffice. Asking syndicate members for their views on price did not amount to acceptance of Mr Corrick’s offer; it was merely a supply of information to them.  Members collectively did not have the power to make a sale; that had been delegated to the management group.  The subsequent sale for $90,000 by the management group to Mr Emeny was a binding contract.

Corrick v. Silich – Court of Appeal (29.06.18)

18.134

Contract: NZ Iron Sands v. Toward Industries

Investors claim they were shafted by ASX-listed Bluescope Steel when bidding to buy Bluescope’s Taharoa iron sand mining business on North Island west coast near Kawhia.  They claim $506 million damages with allegations Bluescope wrongly terminated an initial contract and then misled them in a second round of negotiations. 

NZ Iron Sands Holdings Ltd is a special purpose company assembled by Australian-based Gleneagle Securities to bid for Bluescope’s iron sand mining operations.  Its clients include a number of New Zealanders.  A deal was struck in November 2016, subject to a number of conditions.  All parties were obliged to make reasonable endeavours to renegotiate two long-term contracts: first, to obtain a reduction in charter rates charged by Japanese shipping company NYK for shipping bulk iron ore sand from Taharoa, and; second, removal of an obligation to reinstate the land once mining ceased.  Bluescope cancelled the contract one month later, citing a failure to satisfy these conditions.

The High Court was told a further round of negotiations was then opened.  NZ Iron Sands claims promises were made that it was the preferred bidder.  Instead, a sale was made in early 2017 to a different bidder, Taharoa Mining Investments Ltd: a joint venture between Taharoa C and Melrose Private Capital Ltd.  Taharoa C is a Maori land corporation owning land on which the iron sand is mined.  Wayne Coffey and Rosemary Coffey are directors and shareholders of Melrose.  Mr Coffey is also CEO of Taharoa C.  Entitlement to royalty payments has been a matter of dispute between Ngati Te Ata and government.

NZ Iron Sands sued claiming damages from Bluescope and demanding to see background information surrounding the deal between the Coffeys and Bluescope.

NZ Iron Sands alleges breaches of both the Fair Trading Act and the Financial Markets Conduct Act as regards statements made during negotiations.  Bluescope says it is all a matter of contractual interpretation.  It asked for a pre-trial hearing to determine the meaning of several disputed clauses in the initial November 2016 contract.  Justice Wylie refused.  Detailed evidence surrounding the negotiations are needed to sort out the meaning.  That requires a full trial with witness evidence, he said.

Application to see the Coffey documents was dismissed. They were not parties to the current request for a pre-trial hearing.  Justice Wylie signalled that they may later be required to disclose information.  NZ Iron Sands question the Coffeys’ role in striking a deal with Bluescope. 

NZ Iron Sands Holdings Ltd v. Toward Industries Ltd – High Court (28.06.18)

18.133

Asset Forfeiture: Commissioner of Police v. Li

Enquries into ‘cheating services’ offering tailored assignments to students led police to an apparent mortgage fraud.  Several days into a four week proceeds of crime hearing, a deal was struck: $2.12 million handed over as proceeds of crime with no admission of guilt.

Police allege Steven Li and Fan Yang were in breach of both the Crimes Act and the Education Act with an assignment-writing service offered through their business: Assignment4U.  Police estimate revenue totalling $4.69 million was generated over a six year period with an average price per assignment of some $406.  The High Court was told students would lodge requests with Assignment4U setting out the assignment question, word limit, relevant text book sources and assignment deadline date.  Higher payments were required both for assignments getting a better grade and assignments needing a quick turnaround.  Production was contracted out to ghost writers.  They received seventy per cent of the fee paid, with deductions if the assignment provided did not achieve the grade mark required. Disclaimers on Assignment4U’s website said their product should be used only as a study guide and not submitted as part of course work.  Police said this disclaimer was a sham.

Police also allege Mr Li and Ms Yang, in conjunction with Jonathon Li and Aiqing Xiang, used fraudulent mortgage applications raising finance to buy properties in central Auckland.  Police allege applications overstated their net worth. Sham rental agreements were provided as evidence of future income flows.  The court was told they raised mortgage finance totalling $3.3 million.

No criminal charges have been laid in respect of either the alleged assignment fraud or the alleged mortgage fraud.  Forfeiture of assets totalling $2.12 million was negotiated under the Criminal Proceeds (Recovery) Act.  How payment is to be split between the four was not made public. The agreed settlement includes proceeds of crime payments payable by Pengju Chen ordered following an earlier court hearing.

Commissioner of Police v. Li and others – High Court (27.06.18)

18.132

Asset Forfeiture: Commissioner of Police v. Gong

Police can impound assets in New Zealand suspected to be proceeds of crimes committed overseas.  Xiao Hua Gong, also known as Edward Gong, is under arrest in Canada.  Police allege bank accounts and land in New Zealand valued at some sixty million dollars are part of a money-laundering scheme designed to get ill-gotten gains out of China.  

International media reports put Mr Gong at the centre of an alleged pyramid-selling fraud in China.  He was arrested in Toronto just before Christmas 2017, charged with breaches of Canada’s securities law.  Gong does not live in New Zealand.  Police say he is unlikely to be charged in this country with any criminal offences.

Police allege $77 million dollars was transferred to New Zealand, with assets valued at $60 million remaining after some of the funds were moved on to Canada.  A restraining order under the Criminal Proceeds (Recovery) Act was imposed on these New Zealand assets.

Commissioner of Police v. Gong – High Court (25.06.18)

18.131

Ferrari: Thompson v. Continental Car Services

Under pressure from regional head office Ferrari Australasia to shift a prescribed quota of vehicles, Auckland dealer Continental Car Services took a punt that it could make a quick sale on a 6.3 litre Ferrari F12 sourced from Malaysia. It all turned to custard. Continental sold a car it didn’t have and failed to get, having to pay $130,000 damages to a disappointed customer. As a final ignominy, the coveted F12 wound up on a Christchurch dealer’s lot sitting unsold nearly two years later.  

Disappointed buyer Martyn Thompson is a Ferrari aficionado. In 2016, he was in discussions with Continental Car about trading in his Ferrari 458 Spider for a F12 Berlinetta. The High Court was to learn that Continental Car was having trouble shifting high-end Ferraris.  ‘Grey market’ vehicles imported privately into New Zealand were undercutting the maximum retail prices Ferrari Australasia demanded Continental Car charge.  Learning that a Ferrari dealer in Malaysia had excess stock, Continental Cars struck a deal with Mr Thompson.  He could have a new F12 with agreed modifications.  A trade-in price for his Ferrari Spider was agreed.  Mr Thompson paid a deposit of $5000.  When he asked for further photos of his new purchase, Mr Thompson was told the car was ‘on the water’ en route to New Zealand.  Weeks later Continental Cars fessed up; there was no car.  Continental Cars said communication issues and exchange rate fluctuations made the deal uneconomic.  In the High Court, one witness speculated Continental was working on very tight margins in order to make a sale in a competitive environment and had simply miscalculated.  Justice Churchman ruled there was no evidence of either ‘communication issues’ or adverse exchange rate movements around the time of the sale.  Continental was in breach of contract.  It was ordered to pay $130,000: the difference between market value of the promised Ferrari F12 and the agreed contract price.  The High Court faced some difficulty in determining the value of a new F12.  The court was told few, if any, are sold at listed retail price.  ‘Factory support’ in the form of inflated trade-in values, extended warranties and ‘free’ modifications serve to reduce the effective list price of new cars.  The court was told the F12 Mr Thompson had agreed to buy in 2016 for $480,000 was sitting in Christchurch car yard in June 2018 listed at $529,990. 

Thompson v. Continental Car Services Ltd – High Court (22.06.18)

18.127

Liquidation: Greer v. Klavenes

With revenue in excess of two million dollars for the 2015 and 2016 financial years, labour hire business Klavenes Construction Ltd operated without a business bank account, kept no formal business records, filed no tax returns and paid no tax.  Now in liquidation, director Knut Klavenes and his wife were ordered hand over $128,100 of company money.

Liquidator Scott Greer sued, alleging surplus company revenue held in personal bank accounts after payment of company bills was a debt due to the company.  On his calculation this came to $803,500.  He sued using part of the Companies Act liquidation code designed to recover any element of gift where company assets are taken for inadequate consideration.  Justice Palmer allowed recovery of $128,100 only.  This was the net figure after deducting from company revenue in their personal bank accounts those business invoices paid by the Klavenes on the company’s behalf.

The balance of some $675,400 Mr Greer sought to recover was Klavenes Construction money in their personal accounts spent by the Klavenes to meet the debts of an associated company, Klavenes Construction Tonga.  It had building contracts in both Tonga and New Zealand.  This is not surplus money held by the Klavenes owed to Klavenes Construction, Justice Palmer said.  It is company money spent, rightly or wrongly, by the Klavenes to meet the debts of an associated company.  It is for Klavenes Construction Ltd, now controlled by Mr Greer, to take a separate action for any recovery from either Klavenes Tonga or the Klavenes personally, he ruled.

Greer v. Klavenes – High Court (22.06.18)

18.129

Fraud: Police v. Neutze

Law graduate Nicholas James Clapshaw Neutze has twice been the beneficiary of a judge’s discretion to discharge him without conviction: the first following a charge of excess blood alcohol; the second on a charge of dishonestly accessing a computer system. 

Police appealed his dishonesty discharge, without success.  The High Court was told Mr Neutze used his logon authority as an ANZ relationship services manager to dishonestly access his own ANZ account over ten separate occasions in late 2016 and early 2017, increasing his personal overdraft limit from two thousand dollars to $100,000.  He then drew down on this unauthorised overdraft, owing ANZ some $89,100 before the fraud was discovered.  Mr Neutze repaid the money.  He pleaded guilty, asking for a discharge without conviction.  Mr Neutze has a law degree.  He has passed the professional requirements for admission to the profession. He said he has no present intention to apply.

Police said the trial judge erred in her assessment of the gravity of Mr Neutze’s offending when granting a discharge.  Hearing the appeal, Justice Brewer ruled consideration of Mr Neutze’s ANZ offending should be considered in isolation when considering a discharge.  The dishonest activity related to his personal ANZ account only.  Excess blood alcohol offences were not relevant.  The High Court was told not only had Mr Neutze been discharged previously without conviction on a blood alcohol charge but was again before the courts facing a new charge of alleged drunk driving.

Police v. Neutze – High Court (22.06.18)

18.128

Fair Trading: Dougiamas v. 123 Internet Ltd

Tauranga-based educator Gary Benner has been ordered to stop using open source educational platform MOODLE and to surrender domain names featuring that name.  The High Court also cancelled his registration of the MOODLE trade mark ruling Mr Benner obtained registration in bad faith.  

Mr Benner was ruled to be both in breach of the Fair Trading Act and liable in the tort of passing off when he set up business using the MOODLE name after an earlier one year licensing agreement ended in 2005.

Based in Perth, MOODLE was set up in 1999 by Martin Dougiamas.  He told the High Court nearly fifteen million online courses are now offered on the MOODLE platform by over 101,000 providers: universities, corporations and government departments.  In New Zealand, some 330 registered sites use MOODLE platform software.

The High Court was told Mr Benner signed up in September 2004 to use and host the MOODLE service.  Responding to MOODLE inquiries seven months later, Mr Benner acknowledged only one customer had been signed up achieving a royalty of less the $125.  Mr Benner did not pay an annual renewal fee when due.  The licensing agreement lapsed.

A decade later, Mr Dougiamas learnt of a website controlled by Mr Benner using the MOODLE logo and New Zealand registered domain names containing the MOODLE name.  A ‘cease and desist’ letter was sent.  Mr Benner remodelled his website.  It no longer referred to the MOODLE platform but instead purported to be a website relating to a hybrid breed of dog produced by breeding a Maltese with a miniature poodle; home page for New Zealand Moodle Breeders.  Several months later, references to MOODLE reappeared on the website.  Threatened again with legal action, Mr Benner said he held trademark rights to the name. The court was told Mr Dougiamas registered MOODLE as a trademark in New Zealand back in 2006.  Registration lapsed in July 2016 when payment of renewal fees was inadvertently overlooked.  In what was described as an opportunistic move, Mr Benner moved immediately to register the trademark in his own name.  Justice Venning cancelled his registration.  MOODLE’s owners are entitled to recover any profits Mr Benner made through unauthorised use of the name.

Mr Benner did not appear in court to defend MOODLE’s claims.

Dougiamas v. 123 Internet Ltd – High Court (22.06.18)

18.130

Electricity: City Financial Investment v. Transpower

UK-owned City Financial Investment claims it lost some $3.1 million on electricity futures when Transpower’s changes to HVDC flows in 2016 across Cook Strait affected wholesale electricity prices.  The High Court dismissed City’s appeal against an Electricity Authority ruling deciding Transpower did not breach its governing code, but it criticised the cosy relationship between Transpower and the Authority.  

Transpower owns the national power grid.  It also controls operation of the grid, deciding where and when power flows through the system.  Operating decisions are based on an auction system with retailers choosing from spot prices posted by generators for half hour periods.  A critical point on the grid is the Cook Strait power link: the High Voltage Direct Current (HVDC) link.  Power can pass in either direction under the Strait through two cables.  Capacity has to be carefully managed.  The higher the load, the greater the energy lost by heat and the greater the risk of catastrophic failure.

In 2016 Transpower changed operating protocols for its HVDC link.  This involved rebalancing how much current each cable carries when operating jointly.  There were benefits.  Transpower maintenance costs were reduced.  Less reserve power was required on standby to cover an emergency should there be a system failure.  Critically, the new protocol reduced the amount of North Island generation needed on standby as reserve.

The High Court was told this change was of little moment to generators and retailers.  They operate in a dynamic market, dealing predominately in the spot market.  Traders in electricity futures took a different view.  They are assessing price risk over time frames of up to two years.  They were locked into long-term futures contracts now affected by the HVDC changes. Changes to HVDC protocols had ‘knock-on’ effects though the 250 network locations used for pricing derivatives.

Derivatives trader, City Financial Investment Company (New Zealand) Ltd, complained to government regulator the Electricity Authority alleging Transpower was in breach of service levels set out in the industry Code.  The Authority ruled Transpower was not in breach.  Transpower had maintained the energy capacity of the HVDC link, a key underlying objective of the Code.  This decision was challenged unsuccessfully in the High Court.  Minimum HVDC service levels specified by Transpower were no different before and after the 2016 changes, Justice Cooke said.

The relationship between Transpower and the Authority was criticised by Justice Cooke.  When developing its new HVDC protocols, Transpower’s strategy was to target an Authority member to assist getting Authority approval for the changes.  And then when City Financial later objected to its implementation, Transpower had the Authority comment on its draft response to City Financial.  When City Financial later went to the Authority alleging a breach of the Code, the Authority was then in the position of ruling on the correctness of a stance it had previously helped Transpower formulate.

City Financial Investments Co (NZ) Ltd v. Transpower - High Court (21.06.18)

18.126

Property: Mahon v. Edney

Property developer Neville Mahon’s claim for five million dollars damages against property investor Tim Edney alleging breach of a Queenstown real estate warehousing deal was dismissed in the High Court.  There was never any agreed deal.  Mr Mahon was entitled to compensation for project work prior to their falling out.

The High Court was told Mr Mahon transferred to Mr Edney in January 2016 five properties on Park Road, Queenstown he had agreed to purchase seven months previously.  Mr Mahon was struggling to find sufficient finance to settle his five million dollar purchase.  The two were on good terms.  It was recognised Mr Edney could access cheaper finance for a planned redevelopment of Park Road as a retirement village.  This required a transfer of ownership to a company Mr Edney owned. The possibility was floated that Mr Mahon would later buy back in.  Mr Mahon was to later allege he had been shut out. There was evidence of subsequent discussions between the two over terms for a buy back.  This included a proposal for Mr Edney to sell at $5.45 million: $5.1 million for the land and $350,000 for a 1906 Alldays and Onions vintage car. Mr Mahon alleged in court that bundling a car into the deal was a blatant tax dodge intended to generate, in part, a non-taxable capital gain.

Justice Whata ruled that at no time was there any precise agreement over terms of a possible buy back.  There was no agreement as to a fee Mr Edney should receive for warehousing Park Road, or for the duration of any warehousing agreement.  Clarity of these terms would be expected in a commercial contract between two experienced businessmen, Justice Whata said.  Mr Edney afforded Mr Mahon a genuine, commercially reasonable opportunity to repurchase Park Road over a six month period, said Justice Whata.  Nothing firm came from their discussions.  There was no contract.  No damages were due.

Justice Whata ruled Mr Mahon was entitled to compensation for his eight months’ work getting engineering reports, architectural drawings and resource consent for a retirement village at Park Road.  Mr Edney knew about and encouraged this preliminary work.  The value of this work has not been decided.

Mahon v. Edney – High Court (20.06.18)

18.125

Fraud: Chapman v. R

The High Court upheld three years jail for a ‘teeming and lading’ fraud after Taranaki travel agent Nadene Cheree Chapman missappropriated $707,700 of client money.

Ninety one customers of Waitara Travel Ltd had travel plans affected after Chapman juggled client money while she struggled to meet business debts.  The court was told Chapman used travel deposits paid by customers as a free float: she delayed crediting customers’ payments to their individual accounts while using their funds to pay for earlier customer bookings and her own business debts; a bookkeeping fraud known as ‘teeming and lading’.  While this failure to account involved payments totalling $707,000, Chapman said the final shortfall to customers was only $34,666. Some customers received refunds; compensated by insurance claims or credit card chargebacks.  House of Travel was affected the most; to the tune of some $623,000.

At trial, Chapman offered to repay customers at $300 per week, provided she received home detention and was not sent to jail.  The trial judge said sentences cannot be tailored to suit accused.  He sentenced her to three years’ imprisonment and reparations of $10,000.  This sentence was confirmed on appeal.  Justice Cull said a substantial sum of money was involved at around $700,000.  She abused a position of trust by misusing client money.  The fraud ran for a period of twenty months affecting a substantial number of customers.

The court was told Chapman gained no great personal benefit from the fraud, other than having her business continue in operation for longer than it should.  She did not live an extravagant lifestyle.  She was described as a naïve businesswoman, out of her depth.  While running her travel business she took over another unprofitable travel business and struggled to meet all her business debts. She sold her home, trying to keep her business afloat.  Chapman was bankrupted in 2017.

Chapman v. R – High Court (18.06.18)

18.124

Property: Clode v. Oliphant

Property developers David Oliphant and Brent Clode have differing views over development of the 92-unit Sargeson apartments in Takapuna on Auckland’s North Shore.  Financiers, the head contractor, the project manager and the quantity surveyor are all of one view: none will have anything to do with Mr Clode; financing will be withdrawn and construction halted if they have to deal with him personally.

Mr Oliphant is sole director and shareholder of Auburn Development Ltd, owner of the Sargeson development.  Mr Clode claims Sargeson is his baby.  He claims to have devised the development and to have invited Mr Oliphant to come in as a fifty per cent partner.  He says his fifty per cent shareholding was initially not registered. Mr Clode took steps last February to have this claimed shareholding acknowledged and registered.  This was done after Mr Oliphant stopped paying him weekly remuneration of $3000 for work on the project.  Mr Oliphant says financiers expressly stated Mr Clode was to have no equity interest in the project because of his previous questionable behaviour.  Mr Clode’s conduct has been subject of criticism in several court cases. Justice Palmer said Mr Clode has become seriously unpopular in the property development industry.

Mr Oliphant told the High Court a March 2018 agreement with Mr Clode promised him fifty per cent of Sargeson’s net profit, with an option after all debts had been cleared to convert this profit share into a fifty per cent stake in Auburn Development Ltd.

Mr Clode sued, alleging Mr Oliphant was in breach of their March agreement by not meeting ‘on a weekly basis … to review and direct all aspects of the development’.  Mr Oliphant was stonewalling, he alleged, instead taking advice from others.  This will affect potential profitability, he says, putting his profit share at risk. Mr Clode asked for a mandatory injunction, forcing Mr Oliphant to utilise his skills in a management role.

Justice Palmer refused an injunction.  There is no advantage, he said, in making a court order telling the parties to do what they have agreed to do when Mr Oliphant says his actions are not in breach of the March agreement.  The meaning of the March agreement is in dispute.

If Mr Oliphant is found to be in breach, Mr Clode can claim damages, Justice Palmer said.  If it is found that Mr Clode was improperly frozen out of decision-making it may be difficult for him to prove what difference his involvement might have made, Justice Palmer said.  Granting an injunction, however, ran the risk of bringing the Sargeson development to a halt.

Clode v. Oliphant – High Court (15.06.18)

18.123

Goodwill: Wallace v. Altan

She pushed him out of their jointly owned hairdressing salon operating in the tony Auckland suburb of St Heliers. He could claim a share of the business goodwill even though there was nothing to prevent him poaching existing customers.

Starting business together as Saints Hair Design in 2007, Deborah Wallace and Hakan Altan fell out with Ms Wallace calling the police six years later to boot him out and then issuing a trespass notice and changing the locks.  Later they were in court arguing over a valuation of Mr Altan’s share of the business.

For service businesses like hair salons, substantial value typically lies in goodwill:  representing the value of future profits to be generated from present clientele returning. Having generated this goodwill, present owners extract from any purchaser a share of future expected revenue. With the departure of Mr Altan, Ms Wallace was in effect ‘purchasing’ the goodwill in determining the size of his payout.  Ms Wallace said goodwill was zero.  Mr Altan was not subject to any agreed restraint of trade.  He could have immediately set up next door to Ms Wallace’s continuing business at Saints Hair; existing customers could walk straight in to his rival business. The High Court was told Mr Altan in fact went to work at another hair salon in a neighbouring suburb.  He actively canvassed just over fifty per cent of Saints Hair’s client list.  About ten per cent moved with Mr Altan to his new salon.

In the absence of any agreement between partners, the Partnership Act requires that all business assets be split equally. This includes the value of goodwill. Justice Whata ruled Mr Altan was entitled to a fifty per cent share of Saints Hair goodwill, with a deduction for the ten per cent of clients who had followed him.  While the general rule is that there is no goodwill in a service partnership if departing partners are not bound by a restraint of trade, that will depend on the nature of a particular business, Justice Whata said. Location can affect goodwill. Many customers may return because a business is in a prime location, not because of any particular attachment to the person running the business.

There was a dispute between accounting experts as to the value of goodwill in Saints Hair back in 2013.  Goodwill was ruled to be worth $130,750.  The hair salon generated net profit before tax of $116,000-$145,000 in four years prior to the acrimonious split.

Mr Altan was also entitled to share in the salon’s profits generated between the time he was kicked out and the time he was compensated for his share of the partnership assets, Justice Whata ruled.  No figure was set.  Further evidence is required of the salon’s trading history whilst under the sole control of Ms Wallace.  She changed the name of the business to Saints 55 after Mr Altan’s departure.

Wallace v. Altan – High Court (12.06.18)

18.121

Yozin v. NZ Guardian Trust

Four decades after their father died, Rosalie and Helen Yozin were in the High Court attempting to force a transfer to them of prime subdividable land in Swanson, west Auckland, as their share of Milan Yozin’s estate.  The High Court refused.  Disputes over valuation threatened equity as between all beneficiaries.  

The estate’s sole asset is a four-hectare block of land with good road frontage on only two sides.  It has been in the family since 1937; used first for dairying, then as a market garden and orchard, later as a vineyard.  Disposal of the land became an issue on the death of Milan Yozin’s widow in 2014, then aged in her nineties.  Their four children are the beneficiaries.

Rosalie and Helen want part of the land transferred to them in satisfaction of their fifty per cent share of the estate.  Their siblings object.  Each square metre of land is not of equal value, they said. They would be left with land having more difficult access and less value.

Rosalie and Helen took a lateral approach.  They argued in the High Court that the Law Reform (Testamentary Promises) Act entitled them to the land they wanted. Justice Peters ruled they did not satisfy the precise criteria required in the Act: the work they did around the property in their youth was no more than that expected within local families, harvesting and packing fruit; there was no evidence their father made promises of land beyond usual parental exhortations of ‘work hard, someday all this will be yours’; and their claim to the land well exceeded in value any benefit they had provided to their parents’ business activities.

Rosalie and Helen also asked the court to order estate executor NZ Guardian Trust exercise its discretion under the Trustee Act to partition the land as they requested.  Justice Peters said the two have no direct interest in the land itself sufficient to seek partition; their interest as set out in Milan Yozin’s will is in the net proceeds of any sale of the land.  It is for NZ Guardian Trust to determine the best way of achieving the best price.  That can include partitioning the land as agreed by the four beneficiaries, provided all four can reach agreement.  NZ Guardian Trust became executor of Milan’s estate after a family friend appointed executor resigned amidst all the family infighting.

Yozin v. NZ Guardian Trust Ltd – High Court (12.06.18)

18.122