IN THE HIGH COURT OF NEW ZEALAND GISBORNE REGISTRY CIV [2016] NZHC SAM HONGARA KEELAN Applicant. NGAWINI POURI KEELAN Respondent

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1 IN THE HIGH COURT OF NEW ZEALAND GISBORNE REGISTRY CIV [2016] NZHC 1445 BETWEEN AND SAM HONGARA KEELAN Applicant NGAWINI POURI KEELAN Respondent Hearing: 28 June 2016 Appearances: G R Webb for Applicant N Weatherhead for Respondent Judgment: 28 June 2016 (ORAL) JUDGMENT OF LANG J [on application for order sustaining caveat] KEELAN v KEELAN [2016] NZHC 1445 [28 June 2016]

2 [1] In this proceeding the applicant, Sam Keelan (Sam), seeks to sustain a caveat he has lodged against the title to a property owned by the estate of his late father. The defendant, Sam s sister Ngawini, is the administrator of the estate. Ngawini opposes Sam s application. Background [2] Sam and Ngawini s father, Hamana Walker Keelan (Hamana), died without leaving a will on 28 July Ngawini obtained letters of administration in respect of his estate fifteen years later on 29 June Hamana was survived by his four children, Sam, Ngawini, Molly and Kate. They are entitled to share equally in his residuary estate. 1 [3] The assets of Hamana s estate originally comprised several parcels of land. All but one of these have now been vested in the four children pursuant to vesting orders made by the Maori Land Court on 7 July The remaining parcel of land is known to the family as Kupuaroa. It is situated inland from Ruatoria and comprises approximately 50 hectares of farmland and scrub. Counsel advise me that nobody is currently living on the property. Unlike the remaining properties in the estate, Kupuaroa is general freehold land. [4] Sam lodged a caveat against the title of Kupuaroa to protect his interest as a residuary beneficiary of Hamana s estate. Ngawini now wants the caveat removed so that she can sell the property if necessary in order to meet debts she says are owed by the estate. She has paid the rates in respect of Kupuaroa for many years, and now seeks to be reimbursed in respect of those funds. 1 Administration Act 1969, s 77.

3 General principles [5] The principles to be applied in applications such as this are well established through the decisions of the Court of Appeal in cases such as Sims v Lowe 2 and Pacific Homes Ltd v Consolidated Joineries Ltd. 3 [6] I propose to apply the following principles in reaching my decision: (a) Sam bears the onus of establishing that he holds an interest in the land that is sufficient to support the caveat. (b) Sam must put forward a reasonably arguable case to support the interest he claims. (c) An order for the removal of the caveat will only be made if it is clear that there was either no valid ground for lodging it in the first place or, alternatively, that such ground as then existed has now ceased to exist. (d) The present proceeding is wholly unsuitable for the determination of disputed questions of fact. Does Sam have a caveatable interest in Kupuaroa? [7] There is no real dispute regarding the principles to be applied in the present context. An administrator who takes possession of the estate of a deceased person is entitled to have resort to all of the assets in the estate to satisfy the debts owing by the estate. 4 The residuary estate will not come into existence until such time as the administrator has satisfied all of the debts of the estate, and is in a position to transfer the remaining assets to those entitled to it by law. 5 For that reason a residuary Sims v Lowe [1998] 1 NZLR 656. Pacific Homes Ltd v Consolidated Joineries Ltd [1996] 2 NZLR 652. In re Savage s Caveat [1956] NZLR 118 (SC) at 120; Sullivan v Brett [1981] 2 NZLR 202 at 206 (CA). Guardian, Trust, and Executors Company of New Zealand, Ltd v Hall [1938] NZLR 1010 at 1026; In re Savage s Caveat above n 4, at 120.

4 beneficiary has no caveatable interest in land owned by the estate until the administration of the estate has been completed. 6 [8] Sam alleges that the administration of Hamana s estate has been completed and that Ngawini is now in a position to transfer Kupuaroa to himself and his siblings. Ngawini disputes this. She says that the estate has unfinished business. In particular, she is entitled to be reimbursed in respect of approximately $15,000 that she has expended in order to meet the rates payable in respect of Kupuaroa. In addition, she is now required to meet the costs of the present proceeding. All of those expenses are expenses that she says are properly payable by the estate. For that reason Ngawini contends that the administration of the estate has not yet been completed. [9] I uphold Ngawini s argument on this point. The administration of Hamana s estate will not have been completed until such time as the issue relating to the reimbursement of the rates paid by Ngawini has been finally resolved. In addition, the estate will need to find the funds to meet the costs of the present proceeding. [10] As matters currently stand, the only asset available to provide the necessary funds to meet these debts is the Kupuaroa land. Unless the family provide those necessary funds or the land is sold, the estate cannot pay its debts. It follows that Sam does not currently have a caveatable interest in the Kupuaroa land, and his application to sustain the caveat cannot succeed. [11] Sam seeks a final opportunity to make a proposal to Ngawini for resolution of outstanding family issues. Ngawini had earlier given the family until 31 July 2016 to put a proposal to her that would avert the need for Kupuaroa to be sold. She is prepared to keep that offer open. I therefore direct that the order dismissing the present application shall take effect on 31 July 2016 unless the family reach an agreement prior to that date resolving all outstanding issues. 6 In re Savage s Caveat above, n 4 at

5 Costs [12] Ngawini would ordinarily be entitled to an award of costs because she has been the successful party in this proceeding. Counsel sensibly agree, however, that the appropriate course at this stage is to reserve costs so that they can be determined by the Court in the event that the family cannot reach agreement. [13] Counsel for Ngawini may file a memorandum setting out the costs that Ngawini seeks on behalf of the estate in the event that counsel cannot reach agreement. Costs would be payable on a category 2 band B basis, together with disbursements as fixed by the Registrar. Lang J Solicitors: Nolans, Gisborne Wilson Barber & Co, Gisborne