Eden Property Developments Limited v Williams - [2016] NZHC 939

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

CIV-2015-441-133 [2016] NZHC 939

UNDER the Companies Act 1993

BETWEEN

EDEN PROPERTY DEVELOPMENTS LIMITED

Applicant

AND

STANLEY DAVID WILLIAMS Respondent

Hearing: 29 April 2016

Counsel:

T R Wano for the Applicant
J McDowell for the Respondent

Judgment:

10 May 2016

JUDGMENT OF ASSOCIATE JUDGE SMITH

[1] The applicant (Eden Property) applies to set aside a statutory demand dated

8 December 2015 for the sum of $174,840.55 plus costs. In the alternative, the applicant asks for an order extending the time for compliance with the demand.

Background

[2] Mr Peter Eden and Mrs Cathryn Eden are both directors and shareholders of Eden Property. With a company called Lighthouse Nominees Ltd, they are also the trustees of a Trust known as the Te Aomarama Trust (the Trust).

[3] The respondent (Mr Williams), who issued the statutory demand, is

Mrs Eden’s father.

[4] Mr Eden and Mrs Eden separated in October 2012. Relationship property proceedings were filed in the Family Court by Mrs Eden, but those proceedings were
struck out for want of prosecution on 1 August 2014.

EDEN PROPERTY DEVELOPMENTS LIMITED v STANLEY DAVID WILLIAMS [2016] NZHC 939 [10
May 2016]

[5] The Trust is the registered proprietor of two residential properties situated in Taradale. Mr Eden lives in one of them, in the house which he and Mrs Eden occupied before they separated. The second Taradale property, which I will refer to as “the property”, is occupied by Mr Williams.

[6] Mr Eden says that he built a house on the property (the house) in 1995, and Mr Williams moved to live in the house in about 2010. When Mr Williams moved onto the property, Mr Eden says that Mr Williams told him that he wanted to renovate the house, so that it would be as Mr Williams wanted. Mr Eden says that Mr Williams pulled out the kitchen and built a new one, painted the house inside and out, and built an ensuite onto the bedroom. He also built a new laundry, and pulled up the concrete outside of the house and paved it.

[7] Mr Eden contends that none of that work was actually required, except perhaps for the interior painting. More importantly, he says that there was never any agreement that the money spent by Mr Williams on this work would be repaid, whether by the Trust, Eden Property, or Mr Eden. He contends that the renovation work had nothing to do with Eden Property, given that the property is owned by the Trust.

[8] The renovation work was done in 2010 and early 2011, and it is not disputed that between March 2010 and February 2011 Mr Williams paid Eden Property a total of $174,840.55 for the work. The payments he made were as follows:

Cheque number Date Amount

001220

05/03/2010

$5,700.00

001221

10/03/2010

$60,000.00

001225

26/03/2010

$40,000.00

001247

11/08/2010

$22,410.00

001253 08/09/2010 $5,000.00

001264

08/10/2010

$20,000.00

001266

19/10/2010

$11,200.00

001273

23/11/2011

$6,330.55

001282

08/02/2011

$4,200.00

Total

$174,840.55

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 Eden Property Developments Limited v Williams

Details

AGLC: Eden Property Developments Limited v Williams [2016] NZHC 939
Case: [2016] NZHC 939
Decision Date: 10 May 2016

CaseChat Overview and Summary

Eden Property Developments Limited (Eden Property) sought to set aside a statutory demand issued by Mr Williams for $174,840.55 plus costs, or in the alternative, for an order extending the time for compliance with the demand. The statutory demand was issued under section 289 of the Companies Act 1993. Mr Williams, a respondent, claimed that he made payments to Eden Property to renovate a property that he occupied as a tenant, and that those payments were loans which Eden Property had not repaid. Eden Property denied that there was any agreement that the payments were loans, and contended that any claim Mr Williams had was against the Trust which owned the property, not Eden Property. The High Court was required to decide whether Eden Property had raised a genuine and substantial dispute as to the existence of the debt, sufficient to justify setting aside the statutory demand. The Court found that the dispute was genuine and substantial, and set aside the statutory demand. The Court held that the starting point was the presumption of resulting trust, under which Mr Williams was presumed to have made the payments in order to improve the property, arguably acquiring a beneficial interest in the property in so doing. The Court held that Mr Williams had not satisfied the standard of proof required to rebut that presumption. The Court noted that there were many grey areas in the case advanced for Mr Williams, particularly on the question of what were the terms of the loans (if they were loans). The Court held that if Mr Williams’ proper claim turned out to be a trust claim based on contributions made by him to the property, such a claim was not a claim for a debt which could be the subject of a statutory demand issued under s 289 of the Companies Act 1993. The Court held that this was a case where costs should lie where they fell, notwithstanding the success of the application.

Orders