Valuable family vineyards now claimed to be worth some $70 million at Seddon carefully set up in 2009 to avoid any tax liability on subdivision are now the centre of a bitter dispute between brothers John and Chris Ryan as they attempt to divide the property into separate ownership.
Their mother June was a driving force behind development of the vineyards purchasing 204 hectares of rolling barren land near Blenheim in 2000, a decade after her husband’s death. As the business was developed, title to the land was transferred into the name of a family trust then controlled by herself and son John. The High Court was told a subsequent decision to bring another son Chris into the business saw business entities controlled separately by John and Chris sharing ownership of the vineyards as tenants in common with unequal shares. A 2009 agreement saw John taking title to a 77.8 per cent share; Chris 22.2 per cent. Being registered as tenants in common meant at law they were each a part-owner of the entire property, avoiding tax liability then applying to subdivisions of land. In fact, each had exclusive occupation of separate parts of the vineyard enabling them to run separate businesses; John with the name Sedgemere and Chris with Redgate.
Advised in 2015 that their business interests could be now transformed into separate land titles tax free, preliminary steps were taken to subdivide title. Seven years later, they are in court arguing over valuations. While Chris is currently recorded as part-owner with a 22.2 per cent share, the proposed geographic split would see him taking title to only that land where he has exclusive occupation; about 15 per cent of the land. Ownership defined in the 2009 split was not calculated solely on land area each would control but on value of business assets each would take in setting up their separate businesses. Any attempt to agree on compensation with a proposed transfer into separate titles has foundered. Evidence was given of earlier family divisions when John forced his mother out as co-trustee of Sedgemere Trust. She says John is now ‘upping the ante’ against brother Chris.
John asked the High Court to subdivide their land 85:15 with no compensation; implementation of the 2009 agreement, he claimed.
Associate judge Paulsen ruled there was nothing in the 2009 agreement setting out any formula for future subdivision of the land. In 2009, their primary concern was to avoid any tax liability. A Property Law Act court-ordered partition some thirteen years later requires a full court hearing supported by detailed valuations, Judge Paulsen ruled.
Ryan v. M & E Ryan & Sons Ltd – High Court (25.08.22)
22.152