Dwyer v Zhang
[2023] NZHC 1468
•13 June 2023
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2022-409-599
[2023] NZHC 1468
BETWEEN WILLIAM JOHN DWYER
First Plaintiff
AND
WILLIAM JOHN DWYER and FOSL
TRUSTEES LIMITED as Trustees of the Wavertree Trust
Second PlaintiffsAND
SHASHA ZHANG
Defendant
Hearing: 15 May 2023 Appearances:
P J Woods and E B Nye for Plaintiffs
J I Taylor and C A Twyman for Defendant
Judgment:
13 June 2023
JUDGMENT OF ASSOCIATE JUDGE PAULSEN
This judgment was delivered by me on 13 June 2023 at 3.00 pm pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
DWYER v ZHANG [2023] NZHC 1468 [13 June 2023]
[1] The first plaintiff, William Dwyer, and the second plaintiffs, Mr Dwyer and FOSL Trustees Ltd as trustees of the Wavertree Trust (the Trustees) are seeking summary judgment against Ms Zhang.
[2] Mr Dwyer and Ms Zhang were in a personal relationship but they have now separated.
[3] The first cause of action brought by the plaintiffs collectively concerns a deed of acknowledgment of debt and indemnity (the deed) Ms Zhang entered into with the plaintiffs, acknowledging an obligation to pay them the sum of $774,602.65. The plaintiffs seek judgment against Ms Zhang for the balance they say is owing under the deed of $727,602.65, along with interest1 and indemnity costs.
[4] Ms Zhang does not dispute she has a liability under the deed but says she has made payments to Mr Dwyer totalling $41,290 that have not been taken into account in the amount claimed. She also denies any liability for indemnity costs.
[5] In the second cause of action, Mr Dwyer alleges Ms Zhang has converted two Rolex watches that she gifted but has refused to deliver to him. He seeks possession of the watches or judgment in a sum representing their value.
[6] Ms Zhang does not deny she intended to gift the watches to Mr Dwyer but says, as there was no actual or constructive delivery of the watches to Mr Dwyer, there has been no effective gift of them to him.
[7]In respect to the claim on the deed, the issues are:
(a)Is the balance owing $727,602.65, as claimed by the plaintiffs, or the lesser sum of $686,312.65, as Ms Zhang contends?
(b)Is Ms Zhang required by the terms of the deed to pay the plaintiffs’ legal costs on an indemnity basis?
1 Although there was originally a dispute about whether interest was payable, this is no longer an issue.
[8] In respect to the Rolex watches, broadly speaking the issue is whether they were effectively gifted by Ms Zhang to Mr Dwyer. Counsel agree that issue turns on whether the watches were ever delivered, actually or constructively, by Ms Zhang to Mr Dwyer.2
Principles of summary judgment
[9] A plaintiff’s application for summary judgment is brought pursuant to r 12.2(1) of the High Court Rules 2016. It provides:
12.2Judgment when there is no defence or when no cause of action can succeed
(1)The court may give judgment against a defendant if the plaintiff satisfies the court that the defendant has no defence to a cause of action in the statement of claim or to a particular part of any such cause of action.
…
[10] An oft cited summation of the correct approach to summary judgment applications is contained in Krukziener v Hanover Finance Ltd as follows:3
[26] The principles are well settled. The question on a summary judgment application is whether the defendant has no defence to the claim; that is, that there is no real question to be tried … The court must be left without any real doubt or uncertainty. The onus is on the plaintiff, but where its evidence is sufficient to show there is no defence, the defendant will have to respond if the application is to be defeated … The court will not normally resolve material conflicts of evidence or assess the credibility of deponents. But it need not accept uncritically evidence that is inherently lacking in credibility, as, for example, where the evidence is inconsistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable … In the end the court’s assessment of the evidence is a matter of judgment. The court may take a robust and realistic approach where the facts warrant it …
(citations omitted)
[11] Mr Taylor accepts there are issues with Ms Zhang’s credibility as a witness but says there are factual issues arising where her evidence is not so inherently lacking in
2 Due to the conclusion I reach that there is an arguable case there was no completed gift of the watches, I do not need to go on and consider the issue of the value of the watches which was the subject of submissions at the hearing.
3 Krukziener v Hanover Finance Ltd [2008] NZCA 187, [2010] NZAR 307.
credibility that it cannot be believed. He referred me to MJ & Kimko Company Ltd v JNJ Holdings Ltd, where Toogood J said in a summary judgment context:4
[41] The Court does not have to be convinced of the truth of the statements made by the defendant; so long as there are unequivocal statements which amount to an arguable defence, that will generally be sufficient to justify a refusal of the summary judgment application.
(footnote omitted)
First cause of action – the deed
Background
[12] Mr Dwyer and Ms Zhang wished to acquire together a property at Red Rock Lane, Christchurch. On 1 November 2021, they entered into an unconditional contract to purchase the property. They intended that title would be taken in the names of Mr Dwyer’s trust, the Wavertree Trust, and Ms Zhang’s trust, the Shasha and Lily Family Trust. Mr Dwyer and Ms Zhang jointly instructed the nomination of their respective trusts to complete the purchase. It was intended that Ms Zhang and Mr Dwyer would make equal contributions to the purchase price. However, Ms Zhang was unable to make her contribution and the parties (or their respective trusts) could not settle. The vendors subsequently re-sold the property for substantially less than Mr Dwyer and Ms Zhang agreed to pay for it.
[13] On 12 September 2022, Ms Zhang entered into the deed in favour of Mr Dwyer and the Trustees. The deed contained the following relevant recitals:
ETo date, Bill and/or [the Trustees] have paid a $500,000 non- refundable deposit (Deposit) towards the purchase price for the Property. The vendor of the Property intends to retain this deposit. Bill and [the Trustees] have also incurred significant legal and other expenses in relation to the contemplated purchase of the Property.
FAs at the date of this deed, the vendor has claimed payment of an additional amount of $214,418.26 as detailed in the letter from the vendor’s lawyers attached as Appendix 1. The vendor through his lawyer has advised that legal fees will also be claimed (Further Claims).
GIndependent of the claim by the vendor, Bill has incurred further costs and expenses in the amount of $55,743.36 (Bill’s costs).
4 MJ & Kimko Company Ltd v JNJ Holdings Ltd [2021] NZHC 3055 at [41].
HShasha wishes to acknowledge her agreement to reimburse Bill and [the Trustees] the Deposit, the Further Claims and Bill’s Costs and to indemnify Bill and [the Trustees] in respect of all liability and costs which Bill and/or [the Trustees] may incur as a result of the parties not being in a position to settle the purchase of the Property.
[14]The operative clauses of the deed relevant to this proceeding are:
1Acknowledgement of Debt
1.1Shasha agrees that she will pay to Bill (on behalf of [the Trustees]) an amount equivalent to the Deposit, the Further Claims and Bill’s Costs (Debt).
1.2The Debt will be reduced by the amount of $43,000 being received by Bill on the sale of the mini owned by Shasha.
1.3Within five days of signing this deed Shasha will provide Bill a payment plan setting out the manner in which Shasha will repay the Debt, including the interest payable on outstanding amounts of the Debt. For the avoidance of doubt, Bill will not be obliged to accept such payment plan.
2. Indemnity
2.1Shasha indemnifies and keeps Bill (on behalf of [the Trustees]) indemnified against all losses, damages, claims, costs, expenses (including legal costs and expenses on a full indemnity basis for solicitor/client costs and expenses), liabilities, proceedings and demands which Bill (or [the Trustees]) may incur as a result of being unable to settle the purchase of the Property.
[15] On 14 December 2022, the plaintiffs’ solicitors issued a letter of demand to Ms Zhang requiring payment in full under the deed or confirmation that payment in full would be made on or before 5 pm on 16 December 2022.
[16]Ms Zhang did not make payment in accordance with the demand.
The amount owing under the deed
[17] The plaintiffs accept Ms Zhang has made payments of $4,000 towards the debt and that she is entitled to a credit of $43,000 to reflect the sale proceeds of the Mini motor vehicle.5 That brings the amount of the claim down to $727,602.65.
5 Clause 1.2 of the deed.
[18] However, there are further payments totalling $41,290 that Ms Zhang says she is entitled to have credited against the debt. These are payments made both before and after the deed was signed, and, in some instances, prior to the “purchase not settling”. Ms Zhang identifies:
(a)Five payments to Mr Dwyer from her daughter’s bank account between 5 January 2022 and 28 January 2022 totalling $29,300.
(b)Two payments to Mr Dwyer from her bank account on 31 January 2022 and 2 May 2022 totalling $4,100.
(c)Nine payments to Mr Dwyer between 1 September 2022 and 26 October 2022 from her bank account and from her daughter’s bank account totalling $11,890.
[19] The total of all these payments is $45,290, of which the plaintiffs have credited Ms Zhang with $4,000 against her liability under the deed. It is on this basis that Ms Zhang says she is entitled to credit of a further $41,290.
[20] Mr Dwyer accepts these payments were made, but says all but $4,000 was to reimburse him for Ms Zhang’s use of his credit card. He produces credit card statements identifying around 968 transactions for the period 3 December 2020 to 3 October 2022, totalling $67,498.44, where he says Ms Zhang used his credit card. He says Ms Zhang agreed to repay him the amounts she spent.
[21] The plaintiffs argue the terms of the deed are clear as to the amount Ms Zhang agreed to pay and that at no time prior to service of her affidavit in opposition to summary judgment did she claim that the amounts she has identified were payments under the deed. They note there is evidence that, in fact, Ms Zhang offered to pay Mr Dwyer $2 million in compensation, notwithstanding the terms of the deed and without making reference to the payments she has identified. The plaintiffs’ position is that there is no genuine dispute as to the amount owing.
[22] Mr Taylor argues there is a factual dispute as to whether the payments were made under the deed, there is no documentary evidence which the Court can rely on to find for either party’s position, and Ms Zhang has not had an opportunity to respond to Mr Dwyer’s assertion that the payments were reimbursement for her use of his credit card because he only raised that matter in his reply affidavit. He submits there is documentary evidence lacking that:
(a)the credit card transactions were made by Ms Zhang;
(b)the transactions did not also benefit Mr Dwyer;
(c)there was an agreement between them that she would repay Mr Dwyer for use of the credit card; and
(d)the 2022 payments were to compensate Mr Dwyer for that use.
[23] Mr Taylor also submits the terms of the deed itself do not provide an answer to the issue, and texts from Ms Zhang to Mr Dwyer offering to pay more than what was owing under the deed do not contradict her evidence as to the reasons for the payments.
[24] I do not accept Mr Taylor’s submission there is no documentary evidence upon which the Court can rely in respect of this issue; there are the terms of the deed itself. Those terms are clear as to the amounts which Ms Zhang was to pay. She agreed to pay an amount equivalent to the Deposit, the Further Claims and Bill’s Costs, all of which are identified as to amount and totalled $774,602.65.
[25]Importantly, the deed provided that Ms Zhang was to be given credit for the
$43,000 Mr Dwyer was to receive from the sale of the Mini motor vehicle, and also that Ms Zhang was to provide a payment plan setting out the manner in which she “will repay the Debt.” It cannot have been intended that Ms Zhang would be able to
claim, as credits against the sum payable, further amounts that were paid to Mr Dwyer prior to the execution of the deed that were not specifically identified in the deed.6
[26] To my mind, that disposes of the issue insofar as Ms Zhang claims credits for payments made to Mr Dwyer prior to the date of the deed. The position is not so straightforward in respect of payments that were made after the deed was entered into. Mr Dwyer accepts there were some payments made by Ms Zhang after that date for which she is entitled to credit against the debt. There were other payments she made after that date for which no credit is given. On the evidence, there is nothing to obviously distinguish the two. In particular, there is no satisfactory explanation from Mr Dwyer why it is the case some of these payments were made under the deed and others as reimbursement for credit card transactions. Mr Dwyer’s word that this is the case is unsupported by any documentary evidence and is not sufficient in light of Ms Zhang’s evidence, and also in circumstances where Ms Zhang has not had an opportunity to respond to Mr Dwyer’s reply affidavit where he raises this matter for the first time.
[27] There were five payments made by Ms Zhang to Mr Dwyer after the date of the deed, in addition to the payments totalling $4,000, that the plaintiffs acknowledge. These additional payments total $6,890. I accept that in respect of those payments, there is a factual dispute which cannot be resolved on summary judgment as to whether they were payments under the deed or made for some other purpose.
The claim for indemnity costs
[28] Mr Woods argues the plaintiffs are entitled to indemnity costs under cl 2.1 of the deed. The argument is that Ms Zhang was to fully indemnify the plaintiffs for all amounts incurred as a result of being unable to settle the purchase of the Red Rock Lane property which, Mr Woods argues, must include costs incurred in enforcing the deed itself, because such costs would not have been incurred had the parties not been able to settle the purchase.
6 I raised with counsel whether an estoppel by deed arose against Ms Zhang, but they had not considered the point and it is not necessary for me to rely upon it. I note there has been recent discussion of the relevant principles in Ryan v Lobb [2023] NZHC 689 and Eliahu v Eliahu [2022] NZHC 2079.
[29] Mr Taylor responds that cl 2.1 does not deal with the issue of costs upon enforcement of the deed and, in any event, the plaintiffs’ analysis is simplistic because it fails to take into account the absence of any direct causal link between the parties’ inability to settle the purchase and the costs incurred in this proceeding.
[30] In addition, Mr Taylor says the costs relating only to Ms Zhang’s liability under the deed are not significant as most of the arguments concerned Mr Dwyer’s claim in respect of the Rolex watches, and there is no easy means by which costs attributable only to the claim under the deed can be assessed.
[31] Whether cl 2.1 provides for the plaintiffs to recover indemnity costs in proceedings to enforce the deed is a question of contractual interpretation. The proper approach to contractual interpretation is an objective one, to ascertain the meaning the document would convey to a reasonable person having all the background knowledge reasonably available to the parties at the time of the contract. The contractual language must be interpreted within its overall context, broadly viewed. If the language used, construed in the context of the whole contract, has an ordinary and natural meaning, it will be a powerful, but not conclusive, indicator of what the parties meant.7
[32] In my view, Mr Taylor is correct that cl 2.1 has no application in this case. The purpose of the deed was to record Ms Zhang’s obligation to reimburse Mr Dwyer for costs and liabilities that had been incurred, as well as those that might be incurred as a result of the parties failing to settle the purchase of the property. For instance, it appears from recital F of the deed there was the possibility of further claims by the vendors.
[33] To my mind, the deed says nothing about Ms Zhang’s liability to indemnify Mr Dwyer for costs he might incur in respect of her failure to pay sums due under it or in respect of any other dispute arising from it. Had that been intended, it could have been easily expressed. Furthermore, I agree with Mr Taylor there is no direct causal
7 Firm PI 1 Ltd v Zurich Australian Insurance Ltd t/a Zurich New Zealand Ltd [2014] NZSC 1471 [2015] 1 NZLR 432 at [60] citing Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 (HL) at 912 per Lord Hoffmann.
link between the parties’ inability to settle the purchase of the Red Rock Lane property and costs incurred in this proceeding.
[34] As a matter of construction, I am satisfied Ms Zhang has an arguable defence to the plaintiffs’ claim for indemnity costs under cl 2.1 of the deed.
The second cause of action – the watches
[35] The second cause of action is in conversion. It is being alleged that Ms Zhang has denied Mr Dwyer’s title and possessory right to the two Rolex watches. Those rights are said to exist because the watches were effectively gifted to him by Ms Zhang.
[36] The judgments of courts over many years demonstrate that determining whether there has been an effective gift requires a thorough investigation of the surrounding circumstances, and the result of a case may turn on artificial distinctions and matters that might not be considered of any significance to the parties at the time.8
[37] I do not have before me all the evidence relevant to the second cause of action. Although it was the most contentious matter between the parties at the hearing, the affidavit evidence is notable for its brevity. There are gaps in the evidence as to the exact sequence of events and the communications between the parties. This alone makes this claim unsuitable for summary judgment.
[38] In any event, on the evidence before me, I am satisfied Ms Zhang has an arguable defence to this claim for the reasons that follow.
The factual background
[39]The background is as follows:
8 Roger Fenton Garrow and Fenton’s Law of Personal Property in New Zealand (7th ed, Lexis Nexis, Wellington, 2010) vol 1 at 310 313. See, for instance, Williams v Williams [1956] NZLR 970 (HC) at 974, where a gift of a pianola by a father to a son failed for a lack of proof of any act of delivery, but North J noted that he might have been tempted to have found there was delivery if the father had “gone through the ceremony of placing his hands on the pianola” at the time of declaring his intention to make the gift.
(a)In late 2021, while Mr Dwyer and Ms Zhang were still partners, Ms Zhang purchased a Rolex watch overseas, which she intended to gift to Mr Dwyer as a Christmas present. She advised Mr Dwyer of her intention, but she did not take delivery of the watch at the time.
(b)The watch was not ready for collection by Ms Zhang until around June 2022, after Mr Dwyer and Ms Zhang had separated.
(c)Ms Zhang’s father collected the watch, and at the same time he bought a second Rolex watch for Ms Zhang.
(d)Ms Zhang delivered both watches (when is not entirely clear) to the Commonwealth Vault where they were placed in a security box. The account holder for the security box is Ms Zhang’s father, and his authorisation is needed to access it. Furthermore, access to the security box requires a key and facial recognition software is used (how was not explained).
(e)At some stage (when is not certain), Ms Zhang told Mr Dwyer she was gifting both watches to him. There is a text message from Ms Zhang to Mr Dwyer on 4 September 2022, in which she sent a photograph of a box apparently containing the watches and stating she would leave it to Mr Dwyer to open, and that: “There are 2 Rolexes”. Whether this was the first time Mr Dwyer was promised both watches is not clear.
(f)There followed several requests by Mr Dwyer for the watches and promises by Ms Zhang to deliver them.
(g)In November 2022, Ms Zhang gave Mr Dwyer a key to the security box but he was unable to access it. Mr Dwyer says he believes this was because a third party operating the vault intervened. What actually occurred when he attempted to access the security box is not explained.
(h)In a text dated 10 November 2022, Ms Zhang advised Mr Dwyer that she would have him verified to access the security box and that he would receive an email about this and have access “24/7”.
(i)Ms Zhang says she knew that giving Mr Dwyer a key to the security box would not allow him to access its contents and that she had changed her mind about giving him the watches. She explained her reasons, which are personal to the parties. She says because Mr Dwyer kept asking for the watches, she gave him the key hoping that if the safety deposit box company told Mr Dwyer he could not have the watches he would stop asking for them.
(j)Ms Zhang says that she took the watches with her to China in January 2023, and they are in her mother’s home there.
Submissions
[40] In relation to what constitutes delivery, Mr Woods submits that while a donor must have done everything that is necessary to be done within his or her power in order to effectively transfer a gifted asset to the donee, equity “will not strive officiously to defeat a gift”9. On that basis, he submits the question in each case is whether “enough has been done to enable equity to assist the donee”.10
[41] He relies upon Re Lillingston (dec’d) as authority that providing a key to a safe deposit box has been held to be a valid delivery of the contents of the box.11 Applied to this case, Mr Woods argues that the delivery of the key to Mr Dwyer, along with Ms Zhang’s commitment he would have access to the safety deposit box “24/7”, amounted to a sufficient symbolic and/or constructive delivery of the watches to complete the gift.
9 T Choithram International SA v Pagrani (British Virgin Islands) [2000] UKPC 46, [2001] 1 WLR 1 at [31].
10 Pennington v Waine [2002] 1 WLR 2073 (CA) at [116].
11 Re Lillingston (dec’d), Pembery v Pembery [1952] 2 ALL ER 184 (Ch).
[42] Mr Taylor argues there was no actual delivery of the watches, and also no constructive delivery of them because there was no unequivocal act constituting delivery and Mr Dwyer was never given the means of obtaining possession of them.
[43] Further, he submits the instances where delivery of a key or other means of getting possession of goods has been held to constitute sufficient delivery of them have been confined to cases of property that is too bulky to deliver. In the case of goods that are small and highly portable, such as a watch, he submits the circumstances where anything short of actual delivery is sufficient should be limited.
[44] Mr Taylor points out that Ms Zhang was aware that Mr Dwyer would not be able to get possession of the watches even with a key, and had she wanted to deliver the watches to him it would have been a simple matter to do so, as she could access the safety deposit box as she pleased. Mr Taylor submits it is important that Mr Dwyer also knew that the key alone did not allow him to access the safety deposit box and, therefore, the watches.
My analysis
[45] Except as between spouses and partners,12 and in the absence of a deed of gift, the transfer of personal property by way of gift requires:13
(a)an intention to make a gift.
(b)the assent of the donee to the gift; and
(c)actual or constructive delivery of the personal property that is the subject of the gift.
[46] There is no issue that Ms Zhang expressed an intention to gift the two Rolex watches to Mr Dwyer, and he in turn gave his assent to the gifts. It is only delivery that is in issue.
12 Property (Relationships) Act 1976, s 21N(3). It is not suggested this provision applies.
13 Fenton, above n 8, at 309.
[47] The reason for a requirement of delivery has been the subject of academic debate. It has been suggested the requirement reflects and consolidates precautionary measures into the law of gifts. These are said to be:14
(1)the requirement impresses upon the donor the seriousness of what he/she is doing and protects them from rashness;
(2)it furnishes unequivocal evidence to third parties that a gift is effectuated; and
(3)it places in the hands of the donee tangible evidence of title.
[48]In Milroy v Lord, Turner LJ said:15
I take the law of this Court to be well settled, that, in order to render a voluntary settlement valid and effectual, the settlor must have done everything which according to the nature of the property comprised in the settlement, was necessary to be done in order to transfer the property and render the settlement binding upon him.
[49] While in the case of a chattel, the transfer of property may be achieved by physically handing over the chattel to the donee, it has been recognised that in some cases it will be sufficient if the donor has provided the beneficiary of the gift with the means of obtaining possession to it. This is referred to as constructive delivery, where there has been some act on behalf of the donor that is construed in law as having actually handed over a chattel as if by manual transfer.16
[50] The learned authors of Garrow and Fenton’s Law of Personal Property in New Zealand say:17
14 “Relaxation of the Requirement of Delivery in Gifts of Personal Property”, 6 Fordham L. Rev. 106 (1937) at 107. See also discussion in Samuel Stoljar “The Delivery of Chattels”, (1958) 21 MLR 27; and A C H Barlow “Gift Inter vivos of a Chose in Possession by Delivery of a Key” (1956) 19(4) MLR 394.
15 Milroy v Lord (1862) 4 De G F & J 264, 45 ER 1185 at 1189.
16 Mr Woods referred in his submission to symbolic delivery. I do not accept that symbolic delivery and constructive delivery are one and the same. Constructive delivery involves providing the means to access the chattel in question. Symbolic delivery involves handing over a representation of the subject-matter which would not serve to transfer ownership. See Ward v Turner (1752) 2 Ves Sen 431; 28 ER 275 referred to in A C H Barlow Gift Inter vivos of a Chose in Possession by Delivery of a Key (1956) 19(4) MLR 394.
17 At 310.
Delivery may be made by physically handing the chattel to the donee, but outright manual delivery is not necessary, provided some act of delivery or change of possession takes place.
[51]In Re Leitl, Rodney Hansen J put the matter this way:18
In any event, I am satisfied that the alleged gift of Traudi’s jewellery was never made in accordance with the legal requirements. A gift of chattels is not complete without delivery – William v Williams (supra). Actual delivery is not merely evidence of the gift but an integral part of the gift itself. An oral gift of chattels without delivery is not a gift at all – Laws of New Zealand: Gifts, para 35. Delivery may be constructive. It is sufficient to provide the donee with the means of taking possession, for example, by providing the donee with a key to the premises in which the chattels are kept – Laws of New Zealand: Gifts, para 36. However, there must be some unequivocal act constituting delivery in order for the gift to be complete.
[52] The reference by Hansen J to constructive delivery of chattels being effected by delivery of a key to premises in which they are kept concerns the circumstances recognised at law where goods are bulky, ponderous and incapable of being handed over one to another. In such cases, actual delivery is not necessary, but delivery could be effected constructively by, for instance, providing a key to a warehouse in which the goods were stored.19 So much is clear from the statement in Ryall v Rowles of Burnet J:20
So a delivery of the key of a warehouse is a delivery of those goods which are bulky, being the only immediate delivery the things are capable of.
[53] As I have noted above, Mr Woods relied upon the case of Re Lillingston (dec’d) as authority that the Court had accepted delivery of a key to a security box as constructive delivery of its contents, but that case did not concern an inter vivos gift but a gift mortis causa.21 However, the case is of some interest because Wynn Parry J provided, as his authority for the view that delivery of a key was sufficient delivery of certain jewellery, the judgment of Sargant J in Re Wasserberg.22 Re Wasserberg also involved a gift mortis causa, but Sargant J referred to gifts inter vivos.
18 Re Leitl HC Auckland M1367/98A, 31 October 2000 at [64].
19 Ward v Turner, above n 16, Chaplin v Rogers (1800) 1 East 192, 102 ER 75; and Ryall v Rowles
(1750) 1 Ves Sen 348/27 ER 1074.
20 At 1082.
21 Re Lillingston (dec’d), above n 11.
22 Re Wasserberg [1915] 1 Ch 195.
[54] The facts of Re Wasserberg were that Wasserberg kept bearer bonds and he was to undergo an operation and, in the event of his death, wanted the bonds to go to his wife. He placed them in a parcel, wrote his wife’s name on the outside, and put it in his locked box. His wife was present at the time. He left the locked box with his bank but retained the key, which he later in the day handed to his wife, together with a list of the bonds and told her to lock them both up. She did so in a private drawer of her room, for which she had always kept the key. He died shortly after this.
[55] While it was held there was sufficient delivery to effect a donatio mortis causa, Sargant J was clear that there had not been delivery sufficient to support a gift inter vivos. In discussing the requirements of delivery in the case of an ordinary gift, he said:
… If the testator had actually given the parcel to his wife and she had handed it back to him for the purpose of safe custody, that would probably have been enough; but as the facts are I think that the testator did not at any time during that incident part with the custody of the bonds. Again as regards the subsequent delivery of the key I cannot think that this was a sufficient delivery to pass the bonds by way of ordinary gift. It would seem that the delivery of a key might be sufficient if the subject-matter of the gift were bulky goods in a warehouse which could not actually be delivered; but here not only was the subject-matter of the gift eminently portable property, but the delivery of the key did not in itself enable the recipient to get at the bonds, since the bank would not (as the testator must have known at any rate …) have allowed Mrs Wasserberg to have access to the box without some further authority from the testator.
[56] On the state of the authorities, I am satisfied Ms Zhang has an arguable defence to Mr Dwyer’s claim for conversion of the watches as he has not satisfied me that there was a valid and effective gift of the watches to him.
[57] It is plain there was no actual delivery of the watches to Mr Dwyer. I am not satisfied (and I was not referred to any authority to the contrary) that in the case of highly portable goods, providing a key to a safety deposit box in which they are contained will amount to effective delivery. Even if that might be so in some instances, in my view it could only be where the donee is, upon receipt of the key, given the means of taking possession of the goods. Unless that is the case, there has been no change of possession of the goods, nor does the donee have any control or dominion
over them. In such circumstances, the handing over of a key could be no more than a gesture.
[58] Applied to this case, at no stage did Ms Zhang provide Mr Dwyer with the means of possessing the watches. To the contrary, while she did give him a key to the safety deposit box, she was aware it would not allow him to collect the watches and she did not intend that it would. It appears there were layers of security which would, and in fact did, prevent Mr Dwyer taking possession of the watches without Ms Zhang’s further assistance. She was well aware of this and did not intend to provide such assistance. In no sense can it be said there was delivery of the watches from Ms Zhang to Mr Dwyer.
[59] While one can be critical of Ms Zhang’s behaviour, it appears to me that this result is entirely consistent with the reasons the law imposes the requirement of delivery to effect an inter vivos gift, which I have referred to in [47] above.
[60] It follows that Mr Dwyer’s application for summary judgment cannot succeed on this aspect of the claim.
Result
[61] On the first cause of action the plaintiffs are entitled to summary judgment against Ms Zhang in the sum of $720,715.65. Judgment is entered for this sum without prejudice to the plaintiffs’ right to pursue recovery of the balance of the amount they consider payable under the deed.
[62] Ms Zhang shall pay interest on the said sum of $720,715.65 under s 10 of the Interest on Money Claims Act 2016 from 16 December 2022 to the date of payment.
[63] Mr Dwyer’s application for summary judgment on the second cause of action in the statement of claim is dismissed.
[64] In respect to costs, I have found that cl 2.1 of the deed does not allow the plaintiffs to claim indemnity costs. I also consider the parties have had mixed success. My preliminary view is that costs should lie where they fall. However, I have not
heard submissions on the matter. So that any party may apply for costs if they consider that appropriate, I formally reserve costs with leave to apply.
[65] The Registrar should now set the case down for a case management conference to consider how to deal with the claims in respect of which the plaintiffs have not obtained summary judgment. Counsel should file memoranda at least two working days prior to the conference. If the plaintiffs wish to pursue those claims they should give consideration to whether that should be in the District Court given the amounts in issue.
O G Paulsen Associate Judge
Solicitors:
Anthony Harper, Christchurch Wynn Williams, Christchurch
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