Freeman v Dijksma - [2019] NZHC 1815

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2019-409-296

[2019] NZHC 1815

UNDER THE Property Law Act 2007

IN THE MATTER OF

an application under section 339 of the Property Law Act 2007

BETWEEN

DANIEL GEORGE FREEMAN

Plaintiff

AND

PIETER DIJKSMA

Defendant

Hearing: 25 July 2019

Counsel:

D M Jackson for the Plaintiff

Judgment:

30 July 2019

JUDGMENT OF ASSOCIATE JUDGE LESTER

This judgment was delivered by me on 30 July 2019 at 2.30pm pursuant to rule 11.5 of the High Court Rules

Registrar/Deputy Registrar 30 July 2019

FREEMAN v DIJKSMA [2019] NZHC 1815 [30 July 2019].

[1] The plaintiff has sought by way of summary judgment an order under s 339 of the Property Law Act 2007 (“the Act”) in relation to a property at 23 Medway Street, Richmond, Christchurch (“the property”), purchased by the plaintiff and the defendant as tenants in common.

[2] The parties purchased the property in 2015 for $370,000, contributing $27,500 each with the balance financed by mortgage.

[3] The plaintiff and defendant were friends who decided to purchase the property as a means of entering the property market. The intention was that they would live in the property and have flatmates to help to pay the mortgage costs.

[4] The arrangement worked well for a couple of years. However, the defendant moved overseas in 2018 and began to miss his contributions towards mortgage payments and the relationship between the parties soured.

[5] Unfortunately, despite efforts of the plaintiff to reach an agreement over the property, these proceedings followed because the plaintiff says the defendant essentially “put his head in the sand”.

[6] That has left the plaintiff having to meet all the costs associated with the property.

[7] The plaintiff has arranged for a mortgage to pay out the defendant at an independent valuation that has been obtained.

[8] The defendant has been served with the proceedings, including a copy of the registered valuation which records the value of the property at $510,000.

[9] As noted, the application is unopposed, and when the matter was called in the summary judgment list on 25 July 2019, Mr Jackson made submissions in support of the application. He had filed a memorandum in support on the basis that no opposition had been filed.

[10] The Court has the power to direct one co-owner to sell their interest in a property to another co-owner.1 That is what the plaintiff seeks in this case, that he buys out the defendant’s share at valuation, with the amount to be paid to the defendant to be subject to adjustments which I address below. The defendant would also be released from his obligations under the mortgage.

[11] Under s 342 of the Act, the Court is directed when considering an application under s 339 to have regard to the following factors:

(a)the shares held by the co-owner bringing the application;

(b)the nature and location of the property;

(c)the number of other co-owners and…

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 Freeman v Dijksma

Details

AGLC: Freeman v Dijksma [2019] NZHC 1815
Case: [2019] NZHC 1815
Decision Date: 30 July 2019

CaseChat Overview and Summary

In Freeman v Dijksma, the plaintiff, Daniel Freeman, applied for summary judgment under section 339 of the Property Law Act 2007 to compel the sale of a property jointly owned with the defendant, Pieter Dijksma. The property, located at 23 Medway Street, Richmond, Christchurch, was purchased in 2015 for $370,000, with each party contributing $27,500 and financing the balance through a mortgage. Initially, the arrangement functioned well as both parties lived in the property and had flatmates to assist with mortgage payments. However, the defendant moved overseas in 2018, ceased contributing to mortgage payments, and the relationship between the parties deteriorated. Despite attempts to reach an agreement, the plaintiff was forced to bear all the costs associated with the property, prompting the current application.

The legal issues before the court included whether the court should exercise its discretion under section 339 of the Property Law Act 2007 to order the sale of the property and how the proceeds should be distributed. The court considered various factors, including the shares held by each party, the nature and location of the property, the number of other co-owners, the hardship caused by refusal of the order, the value of contributions, and any other relevant matters. The court found that the defendant had not engaged in the proceedings and that there would be significant hardship to the plaintiff if the situation continued. The court also noted that the defendant would recover his investment and share of the capital gain and that his liability under the mortgage would end.

The court concluded that it was appropriate to order the sale of the property and for the plaintiff to purchase the defendant’s half-share. The fair and reasonable price of the property was fixed at $510,000. The proceeds of the sale were to be applied to repaying the parties' joint loan, their respective loans, overpayments made by the plaintiff, valuation fees, legal costs, and conveyancing costs. The defendant was to be paid his share of the net proceeds after these payments were made. The court fixed costs and disbursements at $10,376.97 in favour of the plaintiff. The defendant was given an opportunity to object to the distribution of proceeds within five working days of being served with the judgment and draft settlement statements.

Orders