Ford v Strangwick

[2019] NZHC 614

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2018-485-557

[2019] NZHC 614

BETWEEN

PETER LESLIE FORD

Plaintiff

AND

ALYSSA AILENE STRANGWICK and TRAVIS BRADLEY STRANGWICK

Defendants

Hearing:

26 March 2019

Appearances:

R Laurenson for plaintiff

No appearance by or for defendants

Judgment:

28 March 2019

JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

[1]                  This is an application by the plaintiff for judgment by default pursuant to r 15.9 of the High Court Rules 2016. The plaintiff is entitled to seek such judgment because the defendants have not entered a defence or taken any other step in the proceeding. On 10 December 2018 Mallon J made an order to the effect that the defendants had been adequately served with the originating documentation, so there is no issue about service. The plaintiff proceeds on the basis that, because his claim is not for a liquidated money sum, he must formally prove his case.1

[2]                  The formal proof hearing took place before me on 26 March 2019. The evidence was in affidavit form. Mr Laurenson took the Court through the evidence, and then made brief submissions in support.

1      Another route for him may have been pursuant to r 15.8 which relates to claims for the recovery of land or chattels.

FORD v STRANGWICK [2019] NZHC 614 [28 March 2019]

[3]The background and the basis for the claim can be outlined briefly.

[4]                  Prior to 15 April 2014 the plaintiff was the registered owner of a property situated at 36 Akatea Road in Lower Hutt. The plaintiff owns other properties in the near vicinity. Earlier in that year the plaintiff’s step child, the first-named defendant, Alyssa Strangwick, and the second-named defendant, her husband, Travis Strangwick, who apparently reside in Melbourne, approached the plaintiff for assistance in order to raise funds for a business venture. The plaintiff wished to assist his step daughter. He tried to raise a loan on the security of 36 Akatea Road but was unable to do so given that he was retired with no income other than superannuation. Accordingly, the plaintiff’s evidence is, the parties entered into an oral agreement, the key components of which were:

(a)that the plaintiff would transfer to the defendants title to 36 Akatea Road for nil consideration in order to enable them to use the property as security for a personal loan;

(b)the plaintiff was to remain the beneficial owner of the property;

(c)the loan was not to exceed $100,000;

(d)the property would be transferred back to the plaintiff once the loan was repaid.

[5]                  What then happened was that the parties jointly engaged one solicitor to put in place the necessary arrangements, the plaintiff duly transferred title to the defendants, the defendants borrowed from one lender approximately $70,000 which borrowing was secured over 36 Akatea Road by way of first-registered mortgage, all as agreed. Subsequently, the defendants — for whatever reason — were unable to service the loan. The loan was transferred by the original lender to two other lenders jointly, and the current lenders are seeking to foreclose on the mortgage.

[6]                  The plaintiff accepts that any interest he may retain in the property is subject to the mortgage, but wishes to retrieve what he can from the situation by having the

property transferred back to him subject to the mortgage so that following the mortgagee sale he will receive any remaining equity.

[7]                  In furtherance of that objective he commenced this proceeding on 27 July 2018 seeking an order that legal title be vested in him.

[8]                  On the basis of the plaintiff’s unchallenged evidence, I am satisfied that the plaintiff has remained the beneficial owner of the property since the transfer of the legal title to the defendants.

[9]                  The only real issue concerns the plaintiff’s prayer for relief. He seeks an order from the Court pursuant to s 64 of the Trustee Act 1956.

[10]              The difficulty is that that section has no application in this case. It is directed at the vesting of interests in trustees whereas what is sought here is the reversion of a property to the beneficiary of an alleged trust.

[11]              I am conscious that in default proceedings determined on formal proof, the Court may only give judgment as sought in the plaintiff’s statement of claim for the obvious reason that the defendant is assumed — by reason of having not entered a defence — to have admitted liability for the pleaded claim and nothing more. However, what we are dealing with here is not the substantive relief claimed but rather the basis upon which it is claimed. In my view, the plaintiff’s incorrect description of the basis for this should not stand in the way of him obtaining the judgment he seeks.

[12]              Mr Laurenson submits that the Court in its general equitable jurisdiction has power to make vesting orders having determined the existence of a trust. He refers me to passages from Garrow and Kelly. These support that submission and I am satisfied that the Court has such jurisdiction. I accept also Mr Laurenson’s submission that there is jurisdiction to do so pursuant to s 52(1)(h) of the Trustee Act 1956.

[13]              In short, I am satisfied that the plaintiff has formally proved his case and that the Court has jurisdiction to make the order he seeks.

[14]I make the following orders:

(a)an order that the defendants hold the legal title to the property known as 36 Akatea Road (being all the  estate  in  fee  simple  containing 628 square metres being Lot 4 DP 13313 at identifier WN540/180) on trust for the plaintiff as the beneficial owner;

(b)a vesting order pursuant to the Court’s general equitable jurisdiction and s 52(1)(h) of the Trustee Act 1956 vesting legal ownership of that property in the plaintiff;

(c)an order that the property be transferred from the defendants to the plaintiff;

(d)a facilitative direction that any documentation necessary to give effect to that order may be signed on the defendants’ behalves by the Registrar of the High Court at Wellington;

(e)the transfer of legal title for the property from the defendants to the plaintiff is subject to the security held over it by way of first registered mortgage by the mortgagees.

[15]              The plaintiff is entitled to his costs in connection to this matter on a 2B basis, together with disbursements which may be fixed by the Registrar.

Associate Judge Johnston

Solicitors:
Gillespie Young Watson, Lower Hutt for plaintiff