Bisking v Eagles Nest Ltd HC Whangarei CIV-2010-488-687

[2011] NZHC 1026

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

CIV-2010-488-687

BETWEEN  SANDRA LOIS BISKIND Plaintiff

ANDEAGLES NEST LTD First Defendant

ANDEAGLES NEST PROPERTIES LTD Second Defendant

ANDWHAKAMARAMA 1999 LTD Third Defendant

ANDDANIEL ELIOT BISKIND Fourth Defendant

Hearing:         19 August 2011

Counsel:         D James for Plaintiffs (and on instructions from J McCartney SC for

Defendants) Judgment: 1 September 2011

JUDGMENT OF BREWER J

This judgment was delivered by me on 1 September 2011 at 9:30 am pursuant to Rule 11.5 High Court Rules.

Registrar/Deputy Registrar

SOLICITORS

Palmer Macauley (Kerikeri) for Plaintiff

Cook Westenra Lawyers (Whangarei) for Defendants

COUNSEL

Jan McCartney

BISKIND V EAGLES NEST LTD HC WHA CIV-2010-488-687 1 September 2011

Introduction

[1]      By notice of proceeding filed in this Court on 2 November 2010, the plaintiff sought summary judgment against the first to third defendants relating to various pieces of real estate (“the properties”).

[2]      In each case the plaintiff sought declarations that the properties are held on constructive trust, with the beneficiaries being the plaintiff as to 50% and the respective defendant as to the other 50%.

[3]      In each case the plaintiff also sought orders that on demand each defendant shall transfer a half share in the respective properties or, on the election of the defendant, pay to the plaintiff on demand the sum representing a half share of their market value.

[4]      The defendants do not oppose, and indeed consent to, the orders sought.

Background

[5]      The plaintiff and the fourth defendant are married. The first, second and third defendants are limited liability companies owned by trusts.   The plaintiff and the fourth defendant seek the assistance of this Court in giving effect to relationship property agreements reached between them.

[6]      The case came before Associate Judge Bell on 21 February 2011.  Judge Bell issued a Minute on 1 March 2011 setting out matters which he considered the parties should address.   Judge Bell had concerns about (inter alia) the use of litigation to achieve consensual estate planning and the use of the summary judgment procedure. Having received submissions from the parties, Associate Judge Bell, by Minute dated 26 May 2011, made the declarations sought by the plaintiff but declined to make the orders requiring the defendants to transfer half shares in the properties to the plaintiff or to pay the values of half shares.   He did so because he considered those orders to be in the nature of injunctions and hence outside his jurisdiction.

[7]      On 19 August 2011 the case was called before me to consider the outstanding orders.  I adjourned the matter to Monday 29 August 2011 because I wanted to give thought to the Court’s jurisdiction and whether what was sought was a proper use of the  Court’s  process.    Having  reached  the  conclusions  I am  about  to  set  out,  I subsequently vacated the fixture.  I now deliver my judgment.

Judgment

[8]      Summary judgment is available even where there is no dispute between the parties.  The test for granting summary judgment is (broadly) whether the plaintiff has a cause of action and the defendant has no defence.[1]    In this case both of those elements are met.

[1] Rule 12.2.

[9]      The fact that a defendant takes no issue with the plaintiff’s application does not mean the procedure is inappropriate.   It is  similar to the situation where a defendant disputes only part of a claim, so summary judgment is entered in respect of the undisputed part.[2]

[2] Australian Guarantee Corp (NZ) Ltd v McBeth [1992] 3 NZLR 54 (CA).

[10]     Here the Court has recognised the existence of a constructive trust.   It is accepted by the defendants that this is right and proper:[3]

[3] Commonwealth Reserves I v Chodar [2001] 2 NZLR 374 (HC) at [62].

Once a constructive trust has been found, a Court may give effect to that order as the justice of the case requires.  In particular a vesting order or an order for payment out to the beneficiary of the value of his or her proportionate share may be made.  This was confirmed in Lankow v Rose [1995] 1 NZLR 277 at p 294 and Stratulatos v Stratulatos [1988] 2 NZLR

424 at pp 438 – 439:

“I will not dwell on the elementary.  The routine remedial approach in a constructive trust situation is to determine the proportion of the property so held in trust….  There being a trust, if an order to that effect is  sought, the  Court  may in  its  discretion decree  specific performance by conveyance to the beneficiary of legal title to that proportionate share.  Alternatively, the Court may order payment out to the beneficiary of the value of that proportionate share.”

[11]     The point which gave me most concern was that this  Court has already recognised the constructive trusts claimed by the plaintiff and has made declarations

accordingly.  The declarations confirm that the plaintiff is the beneficial owner of the interests claimed in the properties and there should be no need for the plaintiff to seek enforcement in the absence of recalcitrance on the part of the defendants.

[12]     However, the plaintiff has brought a legitimate claim for summary judgment and there would need to be good reason for the Court to refuse summary judgment where a legal entitlement has been made out.  There is certainly no need to avoid oppression or injustice to the defendants.[4]

[4] Berg v Anglo-Pacific International (1988) Ltd (1989) 1 PRNZ 713 (CA) at 717.

[13]     Accordingly, I make orders as follows:

(a)      On demand the first defendant shall transfer a half share in each of the properties (in certificates of title NA128D/532, NA128D/533 and NA128D/534), together with all improvements on the land or, on the election of the first defendant that the first defendant shall pay to the plaintiff on demand the sum representing a half share of the market value of each of the said properties together with improvements such half share to be determined by an arms length sale of the property or by registered valuation by a registered valuer carrying on business in the Northland area to be appointed by agreement and in the absence of agreement, as appointed by the President of the New Zealand Institute of Valuers; provided that secured debt and other prior creditor claims shall take priority;

(b)On demand the second defendant shall transfer a half share in the property (in certificate of title NA24B/1091), together with all improvements on the land or, on the election of the second defendant that the second defendant shall pay to the plaintiff on demand the sum representing a half share of the market value of the said property together with improvements such half share to be determined by an arms length sale of the property or by registered valuation by a registered valuer carrying on business in the Northland area to be

appointed by agreement and in the absence of agreement, as appointed

by the President of the New Zealand Institute of Valuers; provided that secured debt and other prior creditor claims shall take priority;

(c)      On demand the third defendant shall transfer a half share in each of the properties (in certificates of title NA19D/192, NA128D/530 and NA128D/531), together with all improvements on the land or, on the election of the third defendant that the third defendant shall pay to the plaintiff on demand the sum representing a half share of the market value of the said properties together with improvements such half share to be determined by an arms length sale of the property or by registered valuation by a registered valuer carrying on business in the Northland area to be appointed by agreement and in the absence of agreement, as appointed by the President of the New Zealand Institute of Valuers; provided that secured debt and other prior creditor claims shall take priority.

[14]     The plaintiff asks for costs.  Costs are a matter of discretion.  In this case the orders  have  been  made  for  the  mutual  benefit  of  the  plaintiff  and  the  fourth defendant without opposition from the first, second and third defendants.   Under these circumstances I do not consider it appropriate to order that the defendants pay

costs. Accordingly, I decline to make an order and costs will lie where they fall.

Brewer J