Hearing: 19 and 20 February 2024

Appearances:

G D Pearson and M M S Gray for Plaintiff

F B Q Collins for First and Second Defendants

Judgment:

3 April 2024

JUDGMENT OF GRICE J

Table of Contents

Introduction [1]

Background  [7]
The positions of the parties
The plaintiff ’s claim  [10]
The defendants’ position  [11]

The second defendant [13]

Was there a partnership? [16]

Legal provisions concerning partnership  [21]
Privilege  [34]
The evidence  [43]
Analysis

The transfer [76]

BARY v BARY [2024] NZHC 711 [3 April 2024]

Withdrawal from the partnership  [87]
Abandonment  [107]
Agreement to release  [111]
Agreement to dissolve  [115]
Limitation  [120]
Specific performance  [134]

Constructive trust [141]

Equitable defences [147]

Laches [150]
Estoppel [157]

Unclean hands [163]

Failure to register caveat [166]

Conclusion [169]
Costs [175]

Introduction

[1] This is a claim brought by David Bary (Dave) against his brother Aron Bary (Aron) concerning a partnership for a building project commenced in 1997.1 A house was to be built on a hillside section purchased by the partnership in Nelson (the Property).

[2] The project was more difficult than anticipated. By 2001, in addition to their initial and subsequent contributions as well as rental from the house, each partner was contributing a set monthly sum to cover the partnership liabilities. Attempts had been made to sell the house, but no offers were received that would cover the partnership liabilities. This was largely due to the house not meeting Nelson City Council code compliance requirements.

[3] In September 2001, following correspondence between the partners suggesting one of them should buy the house, Aron made a formal offer to purchase the Property.

1 I refer to the plaintiff and first defendant using their forenames as requested by them to avoid confusion.

When he did not hear from Dave within the stipulated time, Aron transferred the beneficial interest in the Property from the partnership to himself personally.

[4] Dave objected to the transfer, prompting further exchanges between the brothers. On 28 March 2002 Dave vacated the house, which he had been renting from the partnership, and stopped making any contributions to the partnership. Apart from an unanswered letter which Dave sent Aron in 2003, Dave and Aron had nothing to do with each other until nearly 20 years later, when Dave lodged a caveat on the Property to prevent a sale. The caveat was maintained by order of this Court.2

[5] Dave says that Aron continues to hold the Property on trust and claims a share in the partnership.

[6] The defendant raises a number of defences. Initially, Aron also pursued a counterclaim for damages due to his loss of opportunity to purchase a house in Westport because Dave had prevented the sale of the Property by lodging the caveat. This was discontinued at…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Bary v Bary

Details

AGLC: Bary v Bary [2024] NZHC 711
Case: [2024] NZHC 711
Decision Date: 3 April 2024

CaseChat Overview and Summary

David Bary (Dave) commenced proceedings against his brother Aron Bary (Aron) and Aron’s company AB Contracting Nelson Limited (AB), asserting that he is entitled to a share of a property at 30 Maire Street, Nelson (the Property). Aron had purchased the Property from the partnership in 2001 and is now the sole owner of the Property through AB. Dave asserts that Aron holds the Property in trust for the partnership and seeks an order for specific performance and an account of Dave’s share of the partnership. Aron argues that Dave consented to the transfer of the Property or is estopped from claiming a share. The Court rejected the claims and found that Dave had abandoned the partnership and any claim for an account of partnership assets was time-barred. The Court found that the equitable defences of laches and estoppel applied. Costs were reserved.

Orders