Andreassend v Liang
[2020] NZHC 1782
•23 July 2020
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2018-404-002469
[2020] NZHC 1782
BETWEEN JAMES DAVID ANDREASSEND
Plaintiff
AND
HONG LIANG
Defendant
DING NI LAN, JI BO LIANG and HONG
LIANG as trustees of the Hong Educational TrustDJAN MOY LAM
Third Defendant
Hearing: 17 October 2019 Appearances:
M Locke for the Plaintiff
J E M Connell and R J Hallas for the First Defendant G Kohler QC for the Third Defendant
Judgment:
23 July 2020
JUDGMENT OF ASSOCIATE JUDGE SARGISSON
This judgment was delivered by me on 23 July 2020 at 3.30 p.m. pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date.......................................
Solicitors:
Davenports West Lawyers, Auckland Connell & Connell, Auckland
G Kohler QC, Auckland
ANDREASSEND v LIANG [2020] NZHC 1782 [23 July 2020]
[1] The second and third defendants apply (in a joint application) for orders dismissing the plaintiff’s statement of claim against them. They also apply, in the alternative, for orders that the plaintiff provide particulars of the statement of claim in accordance with the request made by a notice given on 24 May 2019, plus proper initial disclosure. The plaintiff, who is now self-represented, has no objection to providing the particulars sought, but only on the basis that he first obtains full discovery. He also says he has provided initial disclosure.
The statement of claim
[2] The plaintiff’s statement of claim was filed on 6 November 2018 against the defendants, who are:
(a)Hong Liang, who lived with the plaintiff in a de facto relationship that lasted, according to the plaintiff, from about December 2008 to mid- July 2015 (the first defendant).
(b)Ding Ni Lan and Ji Bo Liang, who are the first defendant’s parents, and the first defendant herself, all sued as the trustees of the Hong Educational Trust (the second defendants).
(c)Djan Moy Lam, who is the first defendant’s maternal aunt (the third defendant). She is sued as the named holder of an account (or accounts) at the National Bank.
[3] The statement of claim pleads a sole cause of action for relief against the defendants “by way of a remedial constructive trust founded on Lankow v Rose [2013] NZLR 271 [sic] principles”. The cause of action relies on a lengthy and discursive narrative of ‘hybrid’ allegations of fact and belief. The gist of the narrative laid out in the statement of claim can be summarised as follows:
(a)The plaintiff and first defendant worked together throughout the duration of their de facto marriage in a loose, informal partnership selling real estate. This was on the understanding that commission generated by and accumulated during the partnership, along with any
other assets derived from the commission, would be for “his and her” mutual benefit and held and/or invested for them to share in equally.
(b)A trust and a company were established at the time the plaintiff and first defendant began living and working together to serve as vehicles to receive and invest the commission. The motivation for this arrangement was to protect the commission from possible claims for spousal maintenance and property by their respective former partners. The trust is the Hong Educational Trust (the Trust), which was settled by the first defendant on 6 December 2008. The named trustees are the second defendants. The plaintiff was not a named beneficiary of the trust. The company is Twin Bright International Ltd (the Company), which was incorporated a few days later, on 10 December 2008. Its shares have, since its inception, been held on trust for the Trust. Its shareholders and directors were the first defendant’s parents until June 2012 at which point the first defendant became the sole director and shareholder of the Company.
(c)The Trust and the Company were in fact used until May 2010 — when the plaintiff and the first defendant’s contracts with Ray White Real Estate Agency were terminated — as vehicles to receive and to invest the commission, after deduction of tax and other expenses. A residential property at 123 Bassett Road, Remuera was purchased as one such investment by the first defendant on 16 December 2009 for
$820,000. The agreement for sale and purchase was signed by the first defendant following an unsuccessful auction where the plaintiff bid at the first defendant’s request. On 22 January 2010, the trustees settled the purchase as the first defendant’s nominees, with funds that came substantially (if not wholly) from the commission held by the Trust and the Company. The couple lived together at the Bassett Road property for most of their relationship.
(d)The first defendant became contracted to Bayleys Real Estate in August 2010, and from that point Bayleys required her commission to
be paid into her own bank account instead. But the plaintiff and the first defendant continued working together, and the understanding between them relating to the commission remained unchanged throughout the relationship.
(e)Throughout the relationship, the first defendant also controlled a bank account or accounts at the National Bank held in the name of the third defendant. It is the plaintiff’s belief that the first defendant may have used the account(s) as another depository for some of the commission during the course of the relationship, and that she may have drawn upon the commission held in the account to settle part of the purchase price for the Bassett Road property and have retained some in these accounts as at the time of separation.
(f)At the time of separation, the first defendant may also have held some of the commission in her own bank accounts and elsewhere (the plaintiff mentions bank accounts in the name of the first defendant’s parents — allegedly controlled by her — as well as the bank account for the Trust and the Company). In addition, he says, there may have been derived assets other than the Bassett Road property which he would have a claim to a share of.
(g)The plaintiff says that, throughout the course of the relationship, he made an equal contribution (in various ways) to the generation of the commission, and therefore, in all the circumstances, he can reasonably expect a half share of it.
(h)The first defendant has, at all relevant times, held effective control of the Trust and the Company. As settlor of the Trust, she holds the power to replace the trustees and to add beneficiaries. Though the plaintiff was never named as a qualifying beneficiary of the Trust, she continued to assure him from time to time during the relationship that she would act to protect their joint interests.
[4] The prayer for relief does not seek any specific relief; it simply calls for a 50 per cent share of the commission and derived assets following a potentially wide- ranging enquiry or accounting. It reads as follows:
Prayer for Relief A:
A) An accounting by the first, second and third defendants of all assets and funds held or received by them that originated, directly or indirectly, from real estate commission income generated during the period January 2009 to August 2015 (the period of the plaintiff’s and the first defendant’s relationship) whether accrued or paid to date;
Prayer for Relief B:
B) An order that the plaintiff has an interest pursuant to a remedial constructive trust to the extent of one half of such assets and funds subject to any adjustments the Court may consider appropriate.
[5] The statement of claim goes on to plead the sole cause of action — “a reasonable expectations constructive trust” — setting out that a reasonable person in the plaintiff’s position would expect to receive a 50 per cent interest in the “assets and income” generated by the partnership during the relationship. It does not identify entirely what “assets and income” are in issue or quantify what their alleged value is.
[6] Rolling back to the opening paragraph in the statement of claim, it refers to Lankow v Rose1 but with a citation that belongs to a later decision of the Court of Appeal, namely Marshall v Bourneville.2 The correct citation for Lankow is in fact [1995] 1 NZLR 277. I take it from this slip that the plaintiff relies on both decisions, Marshall v Bourneville being one that concerns a claim to share in a property — purchased in the names of trustees — and the proceeds of sale of a property that the parties had jointly owned while living in a de facto relationship. The Court of Appeal observed that the expectation of an interest can, in appropriate circumstances, survive a transfer of property to trustees.3
[7] It is worth noting that in Marshall v Bourneville, the Court of Appeal discussed the cause of action recognised in Lankow v Rose and the circumstances where the
1 Lankow v Rose [1995] 1 NZLR 277 (CA).
2 Marshall v Bourneville [2013] NZCA 271, [2013] 3 NZLR 766.
3 At [39].
cause of action may be extended to grant relief to assets transferred to a trust. The Court of Appeal said:
[27] A constructive trust over assets will be imposed to give effect to the reasonable expectation of parties to a de facto relationship where the claimant has contributed in more than a minor way to the acquisition, preservation or enhancement of the property of the other but the parties had no actual common intention as to how the property was to be shared. In Lankow v Rose Tipping J said that in order to establish a claim, a party must show:
(a)Contributions, direct or indirect, to the property in question.
(b)The expectation of an interest in the property.
(c)That such expectation is a reasonable one.
(d)That the defendant should reasonably expect to yield the claimant an interest
[8]The Court of Appeal went on to say:
[39] Like the High Court Judges in these cases, we see no reason why, in a proper case, relief by way of a constructive trust should not be ordered against trust property. It seems to us that such an outcome might reasonably be available to Ms Marshall. On her case, an expectation of an interest in the Symonds Street property arose when it was acquired by Mr Bourneville. We see no reason why that expectation should not survive the transfer of the property to the trustees. Mr Bourneville, as settlor and trustee, obviously would have had knowledge of the circumstances giving rise to the expectation. In such circumstances, Ms Marshall could well be able to establish that a trust was impressed on the property and the trustees should reasonably expect to yield to her an interest in the property. Depending on the circumstances in which the later advance to the trust was made and forgiven, such expectation may be reinforced by later events.
[40] For these reasons, we consider that Ms Marshall has discharged the burden of establishing that she has a reasonably arguable case for the claimed interest in the property.
[9] The context in which the plaintiff has commenced this proceeding would be incomplete without a brief reference to the fact that he has also commenced proceedings in the Family Court. The plaintiff commenced those proceedings in late 2015, seeking orders for a share of relationship property. More recently he filed an amended application in that proceeding and an application to join those named second and third defendants in this proceeding, in reliance on s 44 and
s 44(c) of the Property (Relationships) Act 1976.4 The proceeding has been transferred to this Court by order of the Family Court made on 6 December 2018.5 But the basis on which the two parallel proceedings are thought necessary remains unexplained and was not the subject of discussion at the hearing of the current application.
Subsequent procedural steps and challenges
[10] Statements of defence were filed by the first and second defendants in late November 2018. The third defendant filed her statement of defence in April 2019, following service on her in Indonesia pursuant to the Court’s leave.
[11] The first defendant’s statement of defence contains bare denials in response to most of the allegations in the statement of claim; and where answers of substance could reasonably be expected, the answers that are in fact given often verge on evasive. Indeed, there has been little attempt to comply with r 5.48(2) of the High Court Rules 2016, which requires that denials of allegations of fact must not be evasive and that points are to be answered in substance.
[12] It emerges from the first defendant’s pleading — and what was said in submissions at the hearing — that she admits the existence of the de facto relationship. But she denies the duration of the de facto relationship as well as the existence of any kind of real estate partnership — whether formal or informal. She says the plaintiff performed only minor support tasks for her in her work as a real estate agent. It appears to be common ground, however, that they worked together as agents at a Ray White agency from before January 2009 until Ray White terminated both their contracts in May 2010; then she alone became a licensed real estate agent with a Bayleys agency in August 2010, when he provided her with assistance. But on her view of things, the plaintiff only ever assisted her in a very limited capacity. By contrast, he says he was responsible for extensive research, listing preparation, and marketing and advertising, and that the respective input of each of them was always 50/50. She says she alone was paid commission at Bayleys, which he accepts. It
4 A disposition may be set aside under s 44 if made in order to defeat the claim or rights of another. Section 44C allows the Court to order compensation if there has been a disposition of relationship property to a trust which has the effect of defeating the claim or rights of one of the spouses.
5 Several other applications commenced in the Family Court — including for spousal maintenance and an occupation order — have also been transferred to this Court.
seems to be agreed that at Bayleys’ insistence, the commission went directly into the first defendant’s bank account.
[13] The second and third defendants’ statements of defence contain responses that largely mirror those in the first defendant’s statement of defence. There is the occasional admission (for example, the admission that the shares in the Company have, since the its inception, been held on trust for the Trust). It is also admitted that part of the purchase price for the Bassett Road property was paid from funds held by the Company, including the deposit of $82,000.
[14] Shortly after filing their statement of defence, the second defendants corresponded with the plaintiff about particulars and initial disclosure.
[15] Subsequently, the second and third defendants served a notice dated 24 May 2019 requiring a more explicit statement of claim providing further particulars of para 15 of the statement of claim and the prayers for relief, as follows:
2.The statement of claim dated 5 November 2018 is defective in that it fails to properly particularise the transactions that give rise to the plaintiff’s claims.
3.In particular:
(a)Paragraph 15(c): the plaintiff must particularise the sums at issue, the bank accounts referred to and the sales transactions relied upon;
(b)Paragraph 15(g): the plaintiff must particularise the sums at issue, the bank accounts referred to and the particular transactions relied upon;
(c)Paragraph 29: the plaintiff must particularise “the assets” the plaintiff alleges originated from his relationship with the first defendant that are held by the second or third defendants.
(d)Prayer for relief A: the plaintiff must particularise “the assets and funds he alleges are held for him or were received by each of them;
(e)Prayer for relief B: the plaintiff must particularise the assets in which he alleges he has an interest pursuant to a remedial constructive trust.
4.The second and third defendants require the plaintiff to file and serve a more explicit statement of claim providing the particulars referred to.
The statement of claim in more detail
[16] I pause to set out the text of the statement of claim so far as is needed to place the challenged parts in context. I begin with para 15 of the statement of claim, which relates primarily to the purchase of the Bassett Road property:
15.Because of the plaintiff and the first defendant’s planning for a future life together and because their de facto relationship had begun or was soon to begin, in December 2009 the plaintiff and the first defendant decided to take steps to purchase a house property at 123 Bassett Road, Remuera:
(a)the property was intended to be acquired in an entity representing the interests of the plaintiff and the first defendant.
(b)At least $254,150 for the funds held at that time in the Twin Bright bank account was paid towards the purchase price, being moneys generated from the real estate commission sales activities conducted by the plaintiff and the first defendant to that date.
(c)The balance of the purchase moneys were paid from funds held (according to the first defendant) in a bank account or accounts with National Bank New Lynn Branch by the first defendant’s aunt, the third defendant, Dian Moy LAM, such funds being according to the first defendant her parents’ “life savings” but which were controlled by the first defendant (‘the DM Lam accounts’). The plaintiff in fact believes that at least some such funds and bank accounts may have also been or contained further funds generated by the plaintiff’s and the first defendant’s real estate activities.
(d)The plaintiff attended the auction of the Bassett Road property on 16 December 2009 and bid on his and the first defendant’s behalf. The property did not reach the reserve and was passed in with a highest bid of $740,000 made by the plaintiff.
(e)At the plaintiff’s request the first defendant attended the auction after the property was passed in, and after some negotiation the plaintiff and the first defendant agreed to purchase the property for $820,000.
(f)The auction sale agreement was signed as purchaser by the first defendant as Hong Liang or nominee, the first defendant thereby acquiring a beneficial interest in the property as purchaser but it being understood and agreed between the plaintiff and first defendant that it was held for their joint benefit and that an entity representing their joint interests would be nominated to take title on settlement.
(g)After the plaintiff and the first defendant paid the deposit of
$82,000 from the Twin Bright bank account the balance of the purchase price was funded by:
(i)A sum believed (from what the first defendant advised the plaintiff at the time, and subsequently) to be
$459,000 paid from the DM Lam account/s and characterised by the first and third defendants as a loan for the purchase of the Bassett Road property.
(ii)A further sum believed to be about $279,000, including at least $254,150 withdrawn from the Twin Bright bank account which was generated from real estate commission income from the plaintiff’s and the first defendant’s real estate sales activities.
…
(i)On or about 20 April 2010 the first defendant returned to Auckland to arrange completion of settlement. The plaintiff remained for a few further days in Gold Coast. The first defendant reminded the plaintiff that they needed to set up an new entity (in their joint interests) to settle the property into. The plaintiff and the first defendant, however, decided that they did not have time to do so, and at the first defendant’s suggestion the plaintiff agreed for the first defendant to nominate the trustees of the Hong Educational Trust as purchasers. A deed of nomination was signed and title to the property was taken in the name of the second defendants as trustees of the Hong Educational Trust.
(j)At the time it was agreed that the trustees of the Hong Educational Trust would be nominated as the purchasers of the Bassett Road property, it was discussed and agreed between the plaintiff and the first defendant that the trustees of the Hong Educational Trust would hold the Bassett Road property for the benefit of the plaintiff and the first defendant, and not the wider class of beneficiaries of the trust. It was agreed that the plaintiffs and the first defendants’ joint interests would, as usual, be equal and paramount.
[17] Next, I turn to para 25 of the statement of claim, which should be mentioned in connection with para 15. That paragraph expands upon the plaintiff’s beliefs in relation to the funding of the Bassett Road property. In para 25, the plaintiff says again that he believes the Bassett Road property was purchased with a deposit of $82,000 and a further sum of between $254,150 and $279,000 (from the commission). He goes on to say — essentially repeating para 15(g) — that there is a further sum of $459,000 which the first defendant told him “at the time and subsequently” was from the third defendant’s bank account, and which, at a time unspecified, the first and third defendants told him was “a loan for the purchase of the Bassett Road property”. The
reference to a loan from the third defendant contrasts with the statement at para 15(c) of the statement of claim that funds held in the third defendant’s bank account were “according to the first defendant her parents’ ‘life savings’”. He contends that the first defendant informed him that the $459,000 sum was repaid with interest (the total being
$626,538.56).
[18] Viewed overall, the pleadings appear to indicate that the first defendant has given evasive explanations about her use of the third defendant’s bank account, the origin and amount of the funds used for the purchase of the Bassett Road property, and whether or what part of the funds was a loan or commission held in the account..
[19] Paragraphs 28–29 of the statement of claim are also relevant. They set out the cause of action as pleaded against all the defendants:
28.That a reasonable person in [the plaintiff’s] position would expect to receive an interest in the assets and income generated during the relationship between himself and the first defendant, or assets acquired from those assets and income:
(a)The plaintiff and first defendant were in a committed de facto relationship or were domestic partners for a period of approximately six and a half years.
(b)The plaintiff made an equal contribution to the generation of the real estate commission income from which all of the income and assets acquired during the relationship arose.
(c)The plaintiff lived frugally and the cash payments he received from the first defendant were for mixed purposes such as housekeeping costs and were not intended to be and did not represent fair or indeed any remuneration for his contributions.
(d)During the period of at least 24 October 2010 to June 2015 the first defendant acted in such a manner as to lead the plaintiff to believe that he was an equal domestic and business “partner” in the broader sense of the term in that she:
(i)Sent numerous emails to third parties acknowledging that the plaintiff was her domestic partner and her business partner;
(ii)Knowingly acquiesced while the plaintiff himself sent emails to third parties stating that he was her domestic partner and her business partner.
(e)Following the end of the relationship the first defendant has retained or controlled all of the assets of the relationship, including the Bassett Road property, rental of about $1,000 per week received in respect of the Bassett Road property, improvements by way of expenditure to her otherwise separate property at Wakefield Street, Auckland, bank accounts in the name of her parents or D M Lam, and her own bank accounts.
29.The interests of justice require the first defendant, and to the extent that the second and third defendants own or control assets that originated from the relationship of the plaintiff and the first defendant, to account to the plaintiff for a one-half share in those assets subject to any adjustments that may be appropriate for such matters as income tax interest and penalties referred to above.
(emphasis added)
[20] The statement of claim is sparse on details as to the overall amount of the commission that is put in issue and the bank accounts where it is said to reside, or the assets acquired from it. This has given rise to the requests for particulars and initial discovery made by the second and third defendants. They object to the imprecise and vague allegations in the statement of claim and complain about the absence of detail about specific transactions that are alleged to give rise to a remedy.
[21] When serving the notice of 24 May 2019 for particulars on behalf of the second and third defendants, Mr Kohler QC, for the second and third defendants, wrote asking the plaintiff for initial disclosure. The letter requested a “proper bundle” instead of the memory stick supplied which “does no more than refer to 133 court documents in the first part and various photographs in the second”. The letter continues:
3.Rule 8.4 …provides for initial disclosure. Disclosure is to consist of the documents set out in sub-paragraph 8.4(1). The purpose ….is to provide the key documents that the party relies on. The requirement is that the bundle consists only of the documents explicitly referred to in the pleading and the key relevant documents used in preparing the particular pleading. The intention is that the practical way the recipient can understand what it is that is being alleged against him/her. What has been provided here is warehouse discovery.
4.Please forward a proper bundle containing the documents complying with rule 8.4.
5.In Associate Judge Smith’s minute of 17 April 2019 it recorded that discovery would proceed on an informal basis in the first instance. If you comply with the initial disclosure required then that would go a long way to satisfy my need for informal discovery – at least in the
first instance. Again, I do not want to be presented with warehouse discovery where I am expected to go through boxes of documents looking for documents that may be relevant to your client’s claim against the second and third defendants.
[22] It goes on to stress that the critical thing for the second and third defendants is for the plaintiff to identify the specific transactions that he alleges entitled him to the remedy he is seeking against the defendants.
[23] Mr Locke, counsel for the plaintiff at the time, provided a formal response to the notice on 5 July 2019 in which he:6
(a)advised that he was unable to provide the particulars sought pending the defendants’ discovery of the relevant transactions, bank account statements, tax returns, financial statements, and documents showing commission income from sales of real estate, and assets derived from that commission and that an application for such discovery was in train; and
(b)provided a document called “Initial Disclosure”, said to be for further initial disclosure, setting out a list of 116 documents apparently comprising 1,288 pages, plus a memory stick containing 1,318 pages of documents — most of the documents appear to be documents dating from 2015 in parallel proceedings in the Family Court.
[24] The plaintiff had in fact already filed an application for discovery against the first defendant on 5 July 2019. The first defendant made informal discovery prior to the hearing of the application and later provided an affidavit of documents on 28 January 2020, which provides some of the discovery sought. However, some categories sought in the application remain disputed. The second and third defendants provided informal discovery by way of a USB drive/memory stick sometime before 20 June 2019, but the adequacy of that discovery also remains in dispute.
6 Subsequent to the hearing the plaintiff advised the Court that he has elected to become self-represented. A copy of this judgment is to be sent to Mr Locke and his instructing solicitor, as well as to the plaintiff.
The current application
[25] The second and third defendants took the plaintiff’s response of 5 July as wholly inadequate. On 15 July 2019, they filed the current application. This was on the express grounds that the statement of claim does not provide a properly pleaded and particularised claim against the second and third defendants, that there is no viable claim against them, and that the plaintiff has failed or refused to provide particulars as requested in the notice of 24 May 2019 and proper initial disclosure.
[26] The first defendant filed a brief affidavit sworn on 15 July 2019 in support of the application. She deposes that the affidavit was given in her capacity as one of the trustees of the Trust. She describes its purpose as “essentially providing relevant documents to the Court”. Various documents are annexed to the affidavit itself:
(a)A memorandum filed by Mr Kohler for a case management conference scheduled for 24 June 2019, with the notice of 24 May and other annexures relating to the discussions between counsel principally about particulars and initial discovery.
(b)An earlier affidavit sworn by the third defendant on 10 March 2017, for filing in Family Court proceedings,7 which sets out the third defendant’s account that:
(i)on 22 January 2010 the first defendant borrowed $626,538.56 from her, telling her that the money was needed for the Trust to purchase the property at Bassett Road;
(ii)she was able to lend the money as she had some savings in her “ANZ (New Zealand) personal bank account (06-0185-
********-**)” made up of savings from her work when in New Zealand, an inheritance, and $459,000 from the proceeds of sale of two Auckland properties formerly owned by her, and earned interest;
7 The parallel proceedings in the Family Court were commenced in 2015 and 2016.
(iii)the first defendant repaid her (with interest) by eight instalments totalling $653,959.43 between 25 May 2010 and 21 April 2011
— one of the instalments was a payment of $374,552 that originated from the sale of a property at Rogan Street which the first defendant owned before the plaintiff and the first defendant lived together; and
(iv)the first defendant has full authority to operate the bank account, as she (the third defendant) lives overseas.
(c)A spreadsheet (apparently prepared by the first defendant) containing 2 tables and 8 bank statements:
(i)The first table lists 4 payments that the first defendant says made up the purchase price of the Bassett Road property, these being the alleged loan of $626,538.56; the deposit of $82,000 from the Company, and two further payments from the Company of
$37,150 and $75,000. The first of these was made on settlement date. However, the second was, for reasons unexplained, made on 13 November 2009, pre-dating the auction and agreement for sale and purchase by several weeks.
(ii)The second table lists 8 claimed repayments totalling
$654,959.43 that correspond to the 8 repayments referred to in the third defendant’s affidavit. Two repayments of $20,000 and
$40,000 are attributed to the Company and the remaining 6 to the first defendant including a payment of $374,000.
(d)The 8 bank statements for account 06-0185-********** cover the period 25 May 2010 and 21 April 2011. (The bank statements show that the account is in fact a National Bank account — not, as the third defendant has deposed, an ANZ account — and that it is in the name of the third defendant). The bank statements record deposits (and transfers to term deposits) that correspond to the eight claimed
‘repayments’ except that they come from various sources recorded as the first defendant, the Hong Educational Trust, “123 Bassett”, and lastly National Bank account 06-0583-**********, which I can only assume belongs to the first defendant. (The deposit transferred from that account was $79,407.43 on 21 April 2011).
[27] On 12 September 2019, the plaintiff filed a notice of opposition to the strike- out application. The grounds of opposition contend that the statement of claim is a competent pleading and that it provides such particulars as can be pleaded without discovery by the defendants “which has not been provided in many important respects”. It goes on to say that further particulars and an amended statement of claim will be supplied following full discovery, and that the plaintiff has provided compendious initial disclosure and complied with his initial disclosure obligations.
[28] The second and third defendants’ positions in relation to the application have diverged since the application was filed. On the one hand, the third defendant now seeks an order striking out the statement of claim so far as it relates to her. It is only if she fails in this primary argument that she seeks the lesser alternative relief. This is on the basis that the statement of claim discloses no reasonable cause of action against her and is incapable of remedy. On the other hand, the second defendants take a ‘softer’ position. They accept that it would be premature to strike out the claim against them. They seek that the plaintiff be ordered to file an amended statement of claim containing the particulars sought and provide proper initial disclosure. But they want leave to return to the Court without having to make a formal application if the amended statement of claim is deficient or the plaintiff fails to provide the disclosure that is sought.
Issue 1: Should the claim against the third defendant be struck out?
Principles regarding strike-out
[29] The application to strike out the claim is made in reliance on r 15.1 of the High Court Rules. It is well established that in considering such applications the Court proceeds on the assumption that the pleaded facts are true.
[30] It is also well established that the threshold for strike-out is high. For the Court to strike out proceedings, the cause of action must be so clearly untenable that it cannot possibly succeed. Striking out is a draconian step and the jurisdiction is to be exercised sparingly. While defendants should not be subjected to the cost of defending untenable claims, the full costs of which are usually unrecoverable, the Court must be certain the claim cannot succeed before it moves to strike out summarily. The Supreme Court has previously observed that the case must be “‘so certainly or clearly bad’ that it should be precluded from going forward.”8
Submissions
[31] Mr Kohler submits that the pleading against the third defendant is such that all the requirements for an order to strike out, as laid out in r 15.1, already exist. He points primarily to the inchoate terms in which the claim against the third defendant is framed. He notes para 4 of the statement of claim, which states that the third defendant is the named account holder of bank accounts containing funds that “may” also be subject to the plaintiff’s claim. Mr Kohler correctly observes that a statement of claim must be founded on unambiguous allegations of essential facts on which, if proved, judgment can be given; a mere belief there may be a claim is insufficient.
[32] At this point, I briefly pause to mention that the claim against the second defendants (as stated at para 3 of the statement of claim) uses similar inchoate terms (“may”). Despite this similarity, as well as the fact that the pleading seeks identical relief against the second and third defendants, there was no indication from the second defendants that the pleading against them is so “clearly bad” that it cannot be rectified and should therefore be precluded from going forward. The pleading is clearly deficient. Mr Locke acknowledged that an amended claim should be filed now to deal with the inchoate nature of the pleading; however, he argued that a degree of generality should be permitted pending full discovery. More on this later.
[33] Mr Kohler advances three submissions in response to the above point. First, he submits that there is a key difference between the claims against the second and third defendants such that no indulgence should be given to allow the plaintiff an
8 Couch v Attorney-General [2008] NZSC 45, [2008] 3 NZLR 725 at [33].
opportunity to re-plead against the third defendant. He says that the claim against the third defendant falls into the limited category of strike-out cases where evidence may be taken into account because it is uncontradicted. The evidence he primarily relies on is laid out in the third defendant’s affidavit sworn on 10 May 2017 filed for parallel proceedings in the Family Court. That evidence, Mr Kohler says, is fatal to the plaintiff’s claim against the third defendant. The evidence relates to an alleged arrangement between the first and the third defendant for a loan of $626,538.56 made on 22 January 2010 from the latter’s National Bank account and a series of repayments (plus interest) of $653,959.43.
[34] Mr Kohler submits that, given this arrangement, it is untenable for the plaintiff to say that the third defendant’s bank account contains funds to which the plaintiff is entitled. Counsel further says that there is no evidence or allegation relating to any other money being deposited in the third defendant’s National Bank account during the relationship that could have possibly been relationship money. Mr Kohler submits that the Court ought to be satisfied on this basis that there is no reasonably arguable basis for a claim against the third defendant and therefore that the plaintiff should not be allowed the opportunity to re-plead against her.
[35] Secondly, and in the alternative, Mr Kohler says that, even if the contrary were the case, the Trust has substantial equity in the Bassett Road property and that that is more than enough to cover any potential claim based on any transfer of relationship monies into the third defendant’s account. The first defendant, in her affidavit, deposes that the Bassett Road property is unencumbered, and that her conservative assessment of the value of the property is $1.4 million, while the Council’s valuation is
$1.75 million. The plaintiff himself considers the property is worth more than
$1.75 million. Either way, Mr Kohler says the amount available would more than enough to cover any potential claim against the third defendant.
[36] Thirdly, Mr Kohler argues that there has been more than enough time for the plaintiff to obtain discovery relating to the first defendant’s use of the third defendant’s bank account. He also notes that the third defendant is an elderly woman living overseas. Mr Kohler says that, in the circumstances, it would be unjust for the third
defendant to be troubled further by this costly litigation which she will never be adequately compensated for.
[37] These submissions warrant careful consideration; however, ultimately, I am not persuaded that the plaintiff should not have the opportunity to re-plead his statement of claim against the third defendant as well as the second defendants.
Analysis A: Is the evidence relied upon fatal to the plaintiff’s claim?
[38] Recognising that Mr Kohler’s argument for strike-out relies not so much on the technical inadequacies of the current pleading as on certain affidavit evidence, I begin with that evidence.
[39] The principal subject matter of the third defendants’ affidavit is the purchase of the Bassett Road property — it states that there was an advance on 21 January 2010 of $626,538.56 from the third defendant’s bank account as a loan and then a series of deposits by way of repayment and interest. However, the affidavit lacks the usual documentary support of the advance of the claimed amount and the claimed repayments.
[40] I do not overlook the affidavit of the first defendant. The stated purpose of that affidavit was merely to put documents before the Court. However, it does, to some degree, fill gaps in the third defendant’s narrative. A number of bank statements for the bank account in the name of the third defendant were included in the first defendant’s affidavit. These appear to be intended to corroborate the claimed advance of $626,538.56 from the third defendant’s account — which was described as an “ANZ” account — and the loan repayments plus interest referred to in the third defendant’s affidavit.
[41] Despite this, I am not ultimately persuaded that the affidavit of the third defendant is so clear-cut such that I should strike out the claim against the third defendant. My reasons are as follows.
[42] First, the affidavit was sworn in 2017 for proceedings in the Family Court and therefore it does not directly respond to the statement of claim in the present
proceeding or the gist of the current pleading — namely that there may be commission in the National Bank account which the plaintiff may have a claim to.
[43] Secondly, and perhaps most significantly, the Court cannot safely conclude that there were no deposits of commission into the National Bank account after the last date that is shown on the bank statements attached to the first defendant’s affidavit. That date is 29 November 2011; the omission to provided bank statements after that date leaves a period of over four years in which further deposits of commission alleged to have been generated during the relationship may have been made into the account. This, of course, is despite the fact that the bank statements would ordinarily be available to the account holder, in this case, the third defendant. In the circumstances, I am not willing to dismiss the omission as a mere oversight.
[44] Thirdly, the affidavit is clearly not free of inaccuracy. There are indications that it is a hurriedly prepared document without attention to the need for accuracy. For example, as I have already said, it refers to the third defendant’s “ANZ” account but attributes a National Bank number to the account. Such inaccuracies suggest that a degree of caution is warranted in assuming the affidavits’ complete veracity.
[45]There is also the fact that:
(a)The first table annexed to the first defendant’s affidavit identifies that one of the claimed payments for the purchase of the Bassett Road property was a sum of $37,150 contributed by the Company on 13 November 2008. That is odd as the alleged contribution pre-dates the date of the agreement for sale and purchase by some weeks. It is not in dispute that the agreement was signed on 16 December 2008 and that the deposit of $82,000 was paid at the same time. There may be a proper explanation, but it has not been mentioned.
(b)The contents of the second table are not entirely consistent with what the third defendant says about the sources of the alleged repayments of the alleged loan. While it is clear the payments in question were paid over several months, the table suggests they were made by “Twin
Bright and Ms Liang”. The third defendant says $374,552 came from the proceeds of sale of a property at Rogan Street, and the rest was paid by the first defendant. However, the bank statements show that the payments were made under the names of Ms Liang, the Trust, a “123 Bassett”, and a National Bank account (06-0583-**********).
[46] For the above reasons, and having regard to the Court’s generally cautious approach to strike-out cases, I am not satisfied that this is one of those limited strike- out cases where evidence may be taken into account because it is uncontradicted. The evidence, while corroborating the third defendant’s narrative, does not answer all the questions. It is not so clear that the plaintiff does not have some reasonably arguable basis for his claim that commission may reside in the National Bank account held in the third defendant’s name.
Analysis B: Equity and unfairness
[47] Next, I turn to Mr Kohler’s second and third grounds for strike-out. That second submission is that even if there were some reasonably arguable basis for a claim that could conceivably implicate the third defendant’s National Bank account, there is sufficient equity in the Bassett Road property to satisfy any potential claim. The third submission is that it would be unjust to lock the third defendant, an elderly woman living overseas, into the proceeding where the plaintiff will most likely not be able to meet her costs if he fails in his claim against her.
[48] Dealing with the equity in the Bassett Road property first, if an entitlement to recover against the second defendants’ Bassett Road property is established, it does not necessarily follow that the extent of the entitlement can simply be expanded to meet what might be ordered against the third defendant.
[49] On the next issue, Mr Kohler’s submission presupposes that the plaintiff will fail against all defendants and recover nothing at all. However, that seems unlikely given that the plaintiff and the first defendant appear to have lived together in a de facto relationship for well over three years, and at the hearing there was tentative indication that the first defendant may concede that. Further, while it might be said that the plaintiff has had ample time to seek relevant discovery, I do not consider that
the delay in progressing the proceeding sits with him alone. As the plaintiff points out, for example, he has been put to considerable time and cost of serving the third defendant in Indonesia when she declined to accept service in New Zealand.
[50] I am therefore not satisfied that either of those grounds justify the plaintiff’s claim against the third defendant being struck out summarily.
Issue 2: Amended statement of claim — Should the plaintiff be ordered to provide particulars now or after full discovery?
[51] I come next to the issue regarding the amended statement of claim to be filed. It is common ground that, if this matter is to proceed, the statement of claim must be re-pleaded. The critical issue in relation to the amended claim is whether the plaintiff must provide full particulars in the amended claim as it relates to the second and third defendants (and in doing so provide the requested particulars) or whether he may rely on a degree of generality pending full discovery.
Principles regarding statements of claim
[52]Rules 5.26 and 5.27 of the High Court Rules relevantly state:
5.26Statement of claim to show nature of claim
The statement of claim—
(a)must show the general nature of the plaintiff's claim to the relief sought; and
(b)must give sufficient particulars of time, place, amounts, names of persons, nature and dates of instruments, and other circumstances to inform the court and the party or parties against whom relief is sought of the plaintiff's cause of action; and
…
5.27Statement of claim to specify relief sought
(1)The statement of claim must conclude by specifying the relief or remedy sought.
(2)If the statement of claim includes 2 or more causes of action, it must specify separately the relief or remedy sought on each cause of action immediately.
[53] The defendants also rely on r 5.21 in relation to the plaintiff’s failure to comply with the notice of 24 May 2019 and with timetable directions that the Court has made on occasion relating to particulars. I consider it appropriate to put the complaints based on non-compliance aside (recognising that they may be relevant to issues of cost). Rather, I consider it appropriate to deal with the merits of the application requiring particulars. Further, I consider the merits of the application for particulars now need to be considered in the context of the leave that has been given to file an amended statement of claim.
[54] The principles applicable to the consideration of an application for further particulars are well-established.9 It is trite that the general rule is that further and better particulars are ordered before discovery is required. This approach recognises that the primary purpose of pleadings is to define the issues and thereby inform the parties in advance of the case they have to meet.
[55] However, it is also recognised that the Court has a discretion to order particulars after discovery and inspection are complete. The court, in its discretion, commonly allows allegations to be pleaded in general terms together with an acknowledgement that further particulars will be given following discovery by a defendant.10 This is on the basis that the particulars of the facts sought are in the knowledge of the defendant only, and the plaintiff agrees to give further particulars after discovery.11 There must be some reasonably arguable basis to the claim.
[56] In deciding whether to adopt that approach, the Court should ask itself a consider the following questions:12
(i)Has sufficient information been provided to inform the other party of the case they have to meet and to enable them to take steps to respond?
(ii)Is there a real risk that the other party may face a trial by ambush if further particulars are not provided?
(iii)Is the request oppressive or an unreasonable burden upon the party concerned?
9 See Benmarroc Estates Ltd v Molyneux Management Ltd HC Dunedin CIV-2007-412-735, 23 June 2009 at [8].
10 Houghton v Saunders (2008) 19 PRNZ 173 (HC) at [44].
11 SGS New Zealand Ltd v Grocorp Pacific Ltd HC Auckland CP352/95, 14 August 1996.
12 Body Corporate 74246 v QBE Insurance (International) Ltd [2015] NZHC 1360 at [18(h)].
[57] Particulars of pleadings should be approached in a practical and not a theoretical, mechanical or pedantic manner. To that end, in considering whether any party is likely to be taken by surprise, the Court should consider the following:13
(i)If the particulars sought are within the knowledge or control of the requesting party an order for further particulars may be declined pending the completion of discovery or other matters;
(ii)Case management is available to ensure each side is fairly informed of what is in issue, with the Court able to require leading counsel to agree a list of issues;
(iii)Briefs of evidence will be exchanged well in advance of the hearing. The Court is also entitled to take into account its ability in cases with substantial evidence to provide for defendants to have extended periods of time to digest and respond to the evidence of the plaintiff.
Submissions
[58] Mr Kohler for the second and third defendants submits that the amended pleading must include the particulars sought in the notice of 24 May 2019, and the particulars of any other transactions that the amended claim may rely on. This is to ensure that the defendants have proper notice of the claim they are required to answer and to enable them to understand what they are alleged to have received by way of relationship monies (that is, commission earned during the relationship).
[59] Mr Kohler also says the plaintiff must express what of those monies is the subject of the plaintiff’s claim for a 50 per cent share, and who is allegedly liable for all or part of it. The defendants, he says, are also entitled to a pleading which is expressed in terms that enables them to deny or affirm the allegations against them. Essentially, Mr Kohler says, the second and third defendants are asking for no more than what is required under rr 5.26 and 5.27 of the High Court Rules. He also says that they should not have to wait until all issues relating to discovery are dealt with.
[60] The plaintiff, on the other hand, argues that it is the defendants (and the first defendant especially) who have control of the commission, the Trust, the Company and the third defendant’s bank account, and therefore, the plaintiff cannot be expected to give full particulars of the transaction prior to full discovery. In the case of the third
13 At [18(i)].
defendant’s bank account, discovery will obviously involve disclosure of the bank statements for the National Bank account that covers the duration of the alleged relationship. The plaintiff says he will give full particulars as soon as he has had the necessary discovery.
[61] As a brief aside, I pause to mention that there has been no suggestion that there has been “full discovery” as that term is used by the plaintiff. There has been informal discovery (which seems to have satisfied no-one).
Analysis
[62] The essential contest comes down to whether the particulars of the commission in issue and related transactions should be provided now or after full discovery.
[63] Mr Kohler submits, with particular reference to the particulars sought in the notice of 24 May 2019, that, unless the second and third defendants have them:
(a)they do not know whether they are alleged to have received relationship monies in fact (with particulars as required by r 5.26) and what allegations they must answer — they have only inferential assertions and possibilities which they cannot either admit or deny or be required to plead to; and
(b)they will continue to be without notice of the specific relief sought against them (as required by r 5.27) which they can respond to, and left to surmise what it is that is sought against them in what looks like a general tracing claim seeking a wide-ranging accounting enquiry.
[64] However, looking at the gist of the plaintiff’s claim against the second and third defendants, it is apparent that it concerns (1) whether, and if so what, dispositions of commission the first defendant has made to bank accounts in the names of the second defendants as trustees and the third defendant personally, and (2) whether the second defendants have converted what they have received into other assets. It is difficult to see that there is a real risk that the second and third defendants may face a trial by ambush if the particulars sought in the notice of 24 May 2019, or other relevant
particulars, are not provided before discovery. Such particulars are of the kind that must be within the knowledge and control of the defendants. To the extent that they are now known to the plaintiff then they must obviously be pleaded, but, as already indicated, there has been no suggestion in argument that he is presently fully equipped with the necessary discovery to inform him of these matters. The defendants appear to accept that he is not.
[65] In these circumstances, I accept that it would be premature to make orders requiring the plaintiff to provide all to the particulars sought in the notice of 24 May 2019 now. But the plaintiff must file an amended statement of claim that gives the second and third defendants proper notice of the claim they are required to answer, laying out a clear set of allegations which they can affirm or deny with confidence, while recognising that it may inevitably contain some factual allegations that are made in generalised terms pending full discovery. In the amended claim the plaintiff should make clear whether he is relying upon the alternative propositions that commission earned by the first defendant throughout the relationship was relationship property under s 8 of the Property (Relationships) Act, by dint of the duration of the relationship, or that it was held by her on a ‘reasonable expectations’ constructive trust.
[66] The appropriate course to progress the matter is to timetable the filing of an amended, properly pleaded statement of claim. Following that, a further case management conference should be scheduled to ensure each side is fully informed of what is in issue in light of the amended pleadings and to review the issue of what is needed to complete discovery. At that point, it can be anticipated that the particulars of the pleading can be approached in the usual practical manner.
[67] I emphasise that this approach is not a licence for the plaintiff to provide another deficient statement of claim founded on inchoate expressions of belief. At the least, the amended pleading must tell the defendants, even if only in general terms, of the essential allegations to be answered so that they are not left to guess or to try to understand what the plaintiff may be inferring against them. They must be put in a position of being able to admit or deny the allegations upon which the claim is founded. Further, if it is later found that the matters which the plaintiff says are directly within the defendants’ knowledge — and for which he needs discovery — are in fact
already within his knowledge, then he can expect that he will face orders for costs or strike-out.
[68] In conclusion, the plaintiff will be given the opportunity to provide an amended statement of claim against the second and third defendants.
(a)There will be no order, at this point, for specific particulars.
(b)If necessary, the amended statement of claim may contain factual pleadings in general terms pending the completion of discovery. It should briefly set out the context in which, or the basis on which the proceeding is brought as a parallel proceeding.
(c)The plaintiff, who is now self-represented, will almost certainly require legal assistance to draft a technically competent amended statement of claim. The time allowed in the timetable will reflect this. I stress that it is for the plaintiff to ensure he has the legal assistance required, and he should not anticipate that further time will be allowed.
(d)There will be leave to the third defendant to seek that the amended claim against her be struck out if – when full discovery relating to the alleged loan and the bank statements for her National Bank account for the duration of the alleged relationship has been completed – there is documentary evidence that shows that the account has not been used as a depository for any of the commission.
(e)This proceeding – along with the proceedings transferred from the Family Court – will be listed in the Chambers List on
24 September 2020 at 2.15 pm before Associate Judge Bell for review and the allocation of a face-to-face case management conference or an issues conference. The parties will be expected to be in a position to discuss the agenda for the conference.
Issue 3: Initial disclosure
Principles regarding initial disclosure
[69] The last order that the second and third defendants seek is an order for initial disclosure under r 8.4. That rule provides:
8.4 Initial disclosure
(1)After filing a pleading, a party must, unless subclause (2) applies, serve on the other parties, at the same time as the service of that pleading, a bundle consisting of—
(a)all the documents referred to in that pleading; and
(b)any additional principal documents in the filing party’s control that that party has used when preparing the pleading and on which that party intends to rely at the trial or hearing.
(2)A party need not comply with subclause (1) if—
(a)the circumstances make it impossible or impracticable to comply with subclause (1); and
(b)a certificate to that effect, setting out the reasons why compliance is impossible or impracticable, and signed by counsel for that party, is filed and served at the same time as the pleading.
(3)A party acting under subclause (2) must, unless the other parties agree that initial disclosure is not required, or that a longer period is acceptable, either serve the bundle referred to in subclause (1) within 10 working days from the service of the pleading or apply for a variation of that requirement within that period.
(4)If a party fails to comply with subclause (1) or (3), a Judge may make any of the orders specified in rule 7.48.
(5)Despite subclause (1), a party does not need to disclose any document in which the party claims privilege or that a party claims to be confidential.
(6)Despite subclause (1), a party does not need to disclose any document that either—
(a)is the subject of a claim of public interest immunity; or
(b)is reasonably apprehended by the party to be the subject of such a claim.
(7)Despite subclause (1), a party does not need to include in a bundle served by that party any document contained in a bundle already served by any party or any document attached to an affidavit already filed in court.
(8)The bundle of documents may be served either electronically or as a bundle of copies in hard copy form.
(9)If an amended pleading is filed prior to the making of a discovery order, this rule applies to that amended pleading if it either—
(a)refers to documents not referred to in any earlier pleading filed by the party who files the amended pleading; or
(b)pleads additional facts.
[70] Essentially, what the rule requires is that, after filing a pleading, a party must serve on other parties, at the same time as service of the pleading, a bundle consisting of all documents referred to in that pleading and any additional principal documents in the filing party’s control which that party has used when preparing the pleading and on which it intends to rely at the trial or hearing. Its purpose is to give the parties an early opportunity to assess the strength of their opponent’s position, to help narrow the issues requiring resolution and to facilitate settlement.14
Submission
[71] Mr Kohler submits that, in this case, the plaintiff ought to have provided a bundle pursuant to r 8.4(1) that contained all the documents referred to in the pleading, and any additional principal documents in the plaintiff’s control that he used when preparing the pleading and on which he intends to rely at the hearing.
[72] Mr Kohler points out that, in terms of r 8.4(2), if it is impossible and impractical to comply, a certificate to that effect should be filed and served, but that has not been done. He further notes that the second and third defendants have been pursuing initial disclosure for some time, and Associate Judge Bell, in a minute of 8 January 2019, directed the plaintiff to make initial disclosure. Mr Kohler submits that on 8 April 2019, the plaintiff, purporting to comply with that direction, provided
14 Glaister v Harris [2014] NZHC 1285 at [33]–[35]; and Schick Construction and Cartage Ltd v Auckland Council [2015] NZHC 2722 at [25]–[28].
a 20-page document listing 140 court documents. The defendants objected to this by letter of 27 May 2019.
[73] Further, at a case management conference in June 2019, Associate Judge Smith, in his minute of 1 July 2019, directed the plaintiff to provide initial disclosure and respond to the notice requiring particulars by 5 July 2019. Mr Kohler submits that when the plaintiff gave his response related to particulars on July 2019 he also gave amended initial disclosure by way of a USB stick that contains 1,318 pages and that, Mr Kohler says, is wholly inadequate. It does not provide documents referred to in the pleading or indicate any “additional principal documents” used when preparing the pleading and intended to be relied on at trial.
[74] Overall, Mr Kohler submits that the disclosure is significantly and clearly inadequate and, when delay is taken into account, the plaintiff’s performance verges on being contemptuous.
Analysis
[75] Rule 5.72 does not provide a sanction for non-compliance.15 But the obligation may be enforced, if necessary, by an order of the Court under r 7.48. In the present case, however, given that there is to be an opportunity to re-plead and file an amended statement of claim, I consider it appropriate that there be a fresh order for initial disclosure and an ‘unless’ order. These will be on the basis that initial disclosure will relate to the amended claim. The obligation will therefore be to make initial disclosure or, alternatively, to provide a certificate in terms of r 8.4 when the amended claim is filed.
[76] There is little point in fulfilling the obligation before the amended statement of claim is filed. However, a few observations are appropriate:
(a)A few documents are referred to in the current statement of claim which the second defendants, in their statement of defence, admit to the existence of. For example, the plaintiff claims that the first defendant’s
15 Schick Construction and Cartage Ltd v Auckland Council [2015] NZHC 2722 at [33].
parents held the shares in the Company at all relevant times on trust for the Trust pursuant to a document entitled ‘Twin Bright International Limited Declaration of Trust’. Such documents are the defendants’ documents and they cannot have been prejudiced by the plaintiff’s failure to provide them.
(b)If the amended statement of claim refers to documents that are within the control of the defendants and not the plaintiff, then the plaintiff may adopt the use of a certificate in relation to them.
(c)If other documents have been relied upon to prepare the amended statement of claim, they are to be disclosed if they are ‘principal’ documents in terms of r 8.4 (but not otherwise).
(d)The plaintiff says that there are a multitude of documents that demonstrate his day-to-day contribution to the loose real estate partnership he and the first defendant undertook. I do not regard those documents as ‘principal’ documents for the purpose of the rule. Rather, they are documents for discovery.
(e)For initial disclosure, it is not appropriate to list all of the myriad of documents, such as pleadings and memoranda, that have been filed in the related Family Court proceedings.
(f)The defendants also have duties of initial disclosure. They must review their initial disclosure when filing statements of defence to the amended statement of claim. Subject to what allegations of fact are made against them, I would expect to see, among the principal documents, further bank statements for the period when commission is said to have been transferred to them.
Orders
[77]I make the following orders:
(a)The plaintiff is to file and serve an amended statement of claim by not later than 18 September 2020.
(b)I make no order, at this point, for specific particulars on the application for further particulars. The amended statement of claim may, if necessary, contain factual pleadings in general terms pending the completion of discovery.
(c)The statement of claim should briefly set out:
(i)the basis on which this proceeding and the Property (Relationships) Act proceedings are brought as parallel proceedings, and
(ii)clarify whether the claims against the first defendant in constructive trust, and under the Property (Relationships) Act 1976, are brought as alternatives in this proceeding; or whether they are simply concurrent claims brought in the separate proceedings.
(d)The plaintiff is to meet his initial disclosure obligations in terms of r 8.4 of the High Court Rules 2016 when serving the amended statement of claim. For that purpose, he is to disclose documents referred to in the pleadings and principal documents relied upon in preparing the amended statement of claim, or he is to file the necessary certificate explaining non-compliance under r 8.4(2)(b).
(e)Leave is reserved to the third defendant to seek that the amended statement of claim against her be struck out if — when full discovery of the bank statements for her National Bank account for the period of the alleged relationship has been provided — there is documentary evidence that shows that the account has not been used as a depository for any of the commission. The application may be made on three days’ notice by way of memorandum and supporting affidavit.
(f)Leave is also reserved to the second and third defendants to seek that the amended statement of claim be struck out, if it fails to lay out coherently and succinctly, at least in general terms, the essential factual allegations upon which the plaintiff claims to be entitled to relief. The application may be made on three days’ notice by way of memorandum and supporting affidavit.
(g)The proceeding will be listed in the Chambers List on 25 September 2020 at 2.15 pm before Associate Judge Bell for review and the allocation of a face-to-face case management conference or an issues conference. The parties will be expected to be in a position to discuss the agenda for that conference in relation to this proceeding and the parallel proceedings.
(h)Memoranda are to be filed and served at least three working days prior to the Chambers mention.
(i)I anticipate the matters for discussion at the issues conference will include the following matters:
(i)timetabling the filing and service of amended statements of defence;
(ii)advancing the identification and refinement of the issues (in both sets of proceedings) in the light of the amended pleadings in this proceeding;
(iii)revisiting the issue of tailored discovery in the light of the agreed or refined issues;
(iv)what directions are required to deal with outstanding interlocutory applications – including the joinder application in the Property (Relationships) Act proceeding (and directions for
service of the application on the third defendant) – and whether they require the allocation of a formal hearing;
(v)discussing what directions may appropriately be made pursuant to r 10.12 in relation to both this proceeding and the Property (Relationships) Act proceeding, without the need for a formal hearing;
(vi)whether or not these proceedings should be allocated a judicial settlement conference.
Costs on this application
[78] I consider it appropriate to reserve costs on this application. Costs should be dealt with at trial, or earlier if so directed by the Court.
[79]If costs are to be sought at this point, memoranda are to be filed and served by
28 August 2020, failing which costs will stand reserved.
Associate Judge Sargisson
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