Hawthorn v Hawthorn

[2019] NZHC 3337

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2019-419-0121

[2019] NZHC 3337

BETWEEN

JENNIFER ANNE HAWTHORN

Plaintiff

AND

GEOFFREY DAVID HAWTHORN

Defendant

Hearing:	1 October 2019
Appearances:	M Thomson for the Plaintiff UB Keller for the Defendant
Judgment:	16 December 2019

JUDGMENT OF ASSOCIATE JUDGE SMITH

This judgment was delivered by me on [          ] at [         ], pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors / Counsel:

Grantham Law, Hamilton

Braun Bond & Lomas, Hamilton

Hawthorn v Hawthorn [2019] NZHC 3337 [16 December 2019]

[1]    The plaintiff, Jennifer Hawthorn (Jenny), applies for summary judgment on a claim under s 339(1)(a) of the Property Law Act 2007 (PLA). She seeks an order for sale of a property at 206 Davy Street, Thames (the Davy Street property), and the division of the proceeds among the co-owners.

[2]    The registered proprietors of Davy Street are Jenny and her brother, Geoff Hawthorn, the defendant. Each has a one-half share. Geoff opposes Jenny’s claim. He says that although he and Jenny are both registered as proprietors of Davy Street, the family’s intention was always that Davy Street would be Geoff’s property alone.

Background

[3]    Jenny and Geoff’s parents, Anne and Jack Hawthorn, are both now deceased. In or about 1986, they purchased a business in Thames called the Dickson Holiday Park (the holiday park). Anne and Jack ran the holiday park operations until sometime in 1993. By then, they were in their sixties and did not want to run the holiday park on a full-time basis.

[4]    On 1 July 1993, Anne, Jack, Jenny, and Geoff formed a partnership to operate the holiday park business. Anne and Jack were the major financial stakeholders.

[5]    Geoff took over the running of the holiday park business in around 1993. Jenny made some contributions in the early years, including attending to GST returns, but does not appear to have made any contributions in more recent years.

[6]    Anne and Jack purchased a holiday home at Tararu Road, Thames (the Tararu Road property), in about December 1993. The holiday park business provided income to meet payments on a mortgage taken out on the Tararu Road property. However, the business was not generating enough money to pay Geoff a salary. He said in his evidence that he lived at the holiday park and drew some cash over the years between 1994 and 2017, but the business generally only covered his living expenses.

[7]    A set of financial statements was prepared for the family partnership in 1994. It showed that Jenny received a share of the partnership profits. However, in later years, she only received sporadic payments from the partnership, and from about 2011, at her own request, she did not take any share of the partnership profits.

[8]    The Davy Street property was purchased on or about 9 December 2005. Geoff said that it was purchased for him by the partnership, on the basis that, as he was running the holiday park business, he should have a house. He says that he initially made the loan application for the Davy Street property in his own name, but due to his assets being tied up in the family partnership, and the fact that he had no regular salary, his loan application was declined. While the bank would not lend to Geoff, they would lend to the holiday park partnership.

[9]    That is how the acquisition of the Davy Street property proceeded. It was purchased in the joint names of Anne, Jack, Jenny and Geoff. When Anne died on  19 August 2013 and Jack on 18 August 2014, there were successive transfers by way of survivorship, with the result that Jenny and Geoff are now the sole registered proprietors.

[10]   Jenny rejected Geoff’s statement that the Davy Street property was intended to be owned solely by Geoff. She said it was purchased with the intention that it would be owned equally between the four registered owners, as recorded on the title. The Davy Street property was purchased as a joint tenancy so that, if any of the registered proprietors died, then the remaining registered proprietors would retain equal ownership between them. Jenny said that the ownership of the Davy Street property reflected Jack and Anne’s intention that it would be owned by the four family members in equal shares.

[11]   Geoff said that he, Jenny and their parents would frequently discuss Geoff taking legal ownership of the holiday park business, because he was essentially working there for his living. Because the Davy Street property was in the name of the family partnership (like the holiday park business), Geoff did not think it important to separate it out at that time.

[12]   The Davy Street property was initially rented, and the rent was all paid into the main bank account for the holiday park business. Geoff said that he did all the maintenance on the property, and the costs were covered by the family partnership. The expenses were accounted for in the annual financial statements for the partnership.

[13]   Geoff said that Jenny made no contribution to the Davy Street property, as she considered it to be Geoff’s house.

[14]   In response to Geoff’s statement that the rents from the Davy Street property were returned to the holiday park business, Jenny said that the rent from that property was amalgamated with all of the funds from all of the properties and “managed as a whole as part of the partnership financials”. She said that the financial statements for the properties were never individualised, and it is difficult to trace or attribute individual income/expenditure. In Jenny’s view,  no one individual made a contribution to the Davy Street property — it had a long-term tenant who paid the rates for part of the term, and there was little, if any, maintenance carried out on the property during the tenancy. The expenses incurred on maintenance were channelled through the partnership and off-set for tax purposes. No one considered the Davy Street property to be Geoff’s house, and nothing was ever said or written suggesting that it was.

[15]   Jenny accepted that she saw some of the annual financial statements and, for the most part, she did not question the distribution of the income or the expenditure. Everyone understood that the plan was to maximise tax benefits, and the intricacies of balancing the end-of-year books for the properties were left to the accountant.

[16]   The taxable income from the holiday park business was split between Geoff and his parents until 30 June 2010. After that date, Geoff was credited with all income from the partnership, and he paid the tax on it.

[17]   Jenny said that the original plan was to divide any profits from the partnership by discussion each year. She said that she discussed this with her parents, telling them that because additional income would have tax implications for her and her husband at the time, she did not want to receive any profit share. She explained that she was

in a well-paid job at the time, and she did not wish to complicate issues. Her preference was for any income attributable to herself to be invested back into the partnership rather than paid out to her as income. The capital value of the holiday park business would be gifted to her and Geoff over time. If those understandings were not reflected in the financial statements for the partnership, Jenny said she was not aware of it.

[18]   Following the death of their parents, Jenny and Geoff had some discussions about what to do with the properties. Eventually, on 14 March 2016, Jenny and Geoff entered into a deed of family arrangement to address the Tararu Road property and the holiday park business.

The deed of family arrangement (the deed)

[19]   The deed was intended to resolve disputes between Geoff and Jenny over the distribution of Jack’s estate. It referred to the imminent sale of the holiday park business, and it noted that Jack’s estate still owned the Davy Street and Tararu Road properties. The deed recorded that Jack’s will provided for the holiday park business to be left to Geoff and Jenny, and that the residue of Jack’s estate was to be left to Geoff and Jenny in equal shares.

[20]   The deed did not purport to affect the Davy Street property. The operative part provided for the division of the holiday park business, after repayment of the mortgage and any tax obligations, between Geoff and Jenny in proportions of 80 per cent and 20 per cent respectively. The deed confirmed that the Tararu Road property was to be transferred to Geoff and Jenny in equal shares (50 per cent each), in accordance with Jack’s will. An independent valuation of the Davy Street property was to be obtained, with discussions to follow between Geoff and Jenny.

[21]   Geoff said that he considered the 20 per cent of the holiday park business to Jenny was generous, given his work in the holiday park business for 23 years without any regular salary, and what he said was the family intention that both the holiday park business and the Davy Street property would eventually be his. He said that he made it clear to Jenny at the time that he believed that she had no entitlement to the Davy

Street property, as it had been purchased for him and/or that he had paid for it over the years with his contributions to the partnership and the Davy Street property.

[22]   Jenny said that she agreed to accept only 20 per cent of the net proceeds of sale of the holiday park business to resolve the situation and avoid a dispute with Geoff.

The sale of the holiday park business

[23]   The holiday park business was sold in April 2016. Mortgages registered over the holiday park lease, the Tararu Road property, and the Davy Street property were discharged, and the net proceeds of the sale after discharging the mortgages were

$452,124.64. From his share of the sale proceeds, Geoff paid some tax relating to income received from the Tararu Road property (relating to recovered depreciation).

The current position

[24]Geoff said that the Council’s rating valuation for the Davy Street property is

$235,000. At the time of swearing his affidavit, neither Geoff nor Jenny had obtained a registered valuer’s report on the property. He said that, in the last three months alone, he had re-carpeted the property, replaced the hot water cylinder and re-roofed the bedsitter part of the property. He said that Jenny has never been to the Davy Street property.

[25]   Geoff said that he and Jenny have not been able to come to any agreement on what is to be done with the Davy Street property. In his view, it has always been his house.

[26]   Geoff provided a table showing that, over the period from 2001 to 2017, he was allocated $689,837 from the profits of the family partnership. On that sum, he paid a total of $103,183 in income tax. He drew out a total of $328,266 in cash, leaving

$258,388 in the partnership for ongoing holiday park expenses and for the purchase and maintenance of the Davy Street property. Some of that cash was also available to support Anne and Jack.

[27]   Geoff assessed the value of the family partnership, as at 2017, at $244,013, comprising the Davy Street property plus a small amount of cash in bank accounts. The family partnership did have loans totalling $256,505, but they have been repaid in full. He said that if he had drawn out of the partnership business all of the profit allocated to him, the partnership would not have been able to operate the holiday park business, look after Anne and Jack in their retirement, or purchase the Davy Street property and service the debt on it.

[28]   Jenny said that, to the extent Geoff has incurred any costs with regard to the Davy Street property, he did so without consulting her (notwithstanding he was aware of her interest in the property). He has chosen to keep the income from, and pay any expenses on, the Davy Street property. In the past, all this had been sorted out through the partnership accounts and, as there was a long-term tenant, there were never any issues regarding the Davy Street property. She said that it has only been in very recent times, after the tenant moved out, that Geoff asserted full control over the Davy Street property, bulldozing ahead as if the property was his own.

[29]   Jenny accepted that a registered valuation will need to be done on the Davy Street property. She also acknowledged that contributions, such as the latest renovations, would need to be taken into account, as would the income from rents received on the property.

[30]   She accepted that Geoff has contributed more than she has to the holiday park business, but she said that was not the case for all of the properties managed under the partnership accounts. The family discussed the various options for financial investment, and it was decided that the purchase of the Davy Street property should benefit all equally.

[31]   The four members of the family partnership contributed in different ways. When it came to the holiday park business, Jenny contributed less, but she also benefitted less.

Geoff’s circumstances

[32]   Geoff depends on income from the Davy Street property for his living. He is 64 years old, and says that his opportunities now are few. He works part time as a self-employed handyman.

[33]   Although Geoff said that his position is that Jenny should receive nothing from the Davy Street property, if the Court decided that she is entitled to some portion of the sale proceeds, he would like the opportunity to consider whether he could afford to buy her out.

Jenny’s circumstances

[34]   Jenny said that she has been increasingly unwell in the past couple of years, and from sometime in 2018 she has been unable to work. She referred to a congenital health problem, saying that she is on a public health waiting list for surgery. She is mainly supported by her share of money from the sales of the holiday park business and the Tararu Road property.

[35]   Jenny said that she did not want to negotiate less than her fair share of the ownership of the Davy Street property. In her view, she has given away much of her entitlement under her parents’ wills to Geoff,1 and, in her view, she has made allowances for Geoff beyond what was required of her.

[36]   Jenny denied that a 50/50 split of the net proceeds of a sale of the Davy Street property would cause Geoff hardship. On the other hand, an unequal division would cause hardship to Jenny, because of:

(a)her limited ability to work having regard to her disability and deteriorating health;

(b)the fact that she has already conceded 30 per cent of her entitlement in other properties to Geoff;

1      Under the wills, Anne and Jack left Geoff and Jenny their interest in the Tararu Road property and the holiday park business in equal shares.

(c)the fact that Geoff has benefited from rental earnings;

(d)the fact that Geoff intentionally misled the accountant to prevent Jenny from having an interest in the Davy Street property; and

(e)any continued indulgence to Geoff will see more money lost in this litigation.

The evidence of Mr Williams

[37]   The chartered accountants who acted for the family partnership were Williams & Gibbons Ltd, Accountants. Geoff said that he had a discussion with Keith Williams of that firm on 14 December 2018 about how to organise his affairs following the sale of the holiday park business. Mr Williams provided an affidavit, attaching a copy of the following file note he made after the meeting:

14/12/18 Had discussions with Geoff — he is happy to take all income for tax purposes. He advised that [the Davy Street property] is really solely his. He is happy to have all capital in partnership amalgamated and he has sorted out moneys owing to Jenny. Too difficult for accounts to show any different position re capital. This can be sorted outside of the accounts.

Statement of claim and statement of defence

[38]   There is only one cause of action in Jenny’s statement of claim, and that is the cause of action under s 339 of the PLA. The relief sought is an order requiring the sale of the Davy Street property, with the division of the proceeds reflecting an equal division of the property, and moneys owed by Geoff in respect of rent received by him (taking account of reasonable expenditure incurred by him).

[39]   In his statement of defence, Geoff pleads that the Davy Street property was originally purchased and held in the names of the partnership for the benefit of Geoff. He pleads that he has made significant and substantial contributions to both the family partnership and the Davy Street property, while Jenny has made minimal contributions to the property.

[40]   Geoff pleads that Jenny never requested or maintained a claim that she is entitled to the rent from the Davy Street property, until after the death of Jack and Anne. She either accepted Geoff’s beneficial ownership or waived any rights in respect of the Davy Street property.

[41]   Geoff pleads that an order for the sale of the Davy Street property with an equal division of net proceeds would cause him hardship and would be inequitable.

[42]   Geoff pleads a number of affirmative defences. First, he pleads that there was a constructive trust for his benefit. He says that he has made significant and substantial contributions to the acquisition, preservation and enhancement of the Davy Street property and the family partnership assets, which Jenny has benefited from but did not contribute to. He says that it would be unjust and inequitable if Jenny were to disproportionately benefit and be enriched by a sale of the Davy Street property on a 50/50 sharing basis. In the alternative, Geoff pleads that there was a resulting trust, on the basis that the Davy Street property was purchased for him as the beneficial owner, and it is held by the registered proprietors for him. Alternatively, his labour has enabled the family partnership to pay for the property, and that it was at all material times reasonable for him to consider that he was the beneficial owner of the property.

[43]   The third affirmative defence pleaded is estoppel. The family partnership and/or Jenny is alleged to have created and/or encouraged a belief that Geoff was the beneficial owner of Davy Street, and he reasonably relied on that belief in:

(a)Working at the holiday park without regular salary, and maintaining, supporting, and enhancing family partnership and property over a period of 23 years.

(b)Jenny’s lack of contribution to the family partnership and the Davy Street property.

(c)Jenny expressly agreeing in 2011 that Geoff was to take on all the tax burden for the holiday park and the Davy Street property, with no income attributable to Jenny.

(d)Jenny not requesting or maintaining a claim of entitlement to the Davy Street property and rent money from the property until after the deaths of Jack and Anne. In the circumstances, Jenny accepted Geoff’s beneficial ownership and/or waived her rights in respect of the property.

[44]   In the circumstances pleaded, Geoff says that it would be unconscionable for Jenny to be permitted to resile from the position that Geoff is the sole beneficial owner of the Davy Street property.

Notice of opposition

[45]   Geoff also filed a notice of opposition, setting out his position substantially as described in his affidavit and statement of defence.

Summary judgment applications by plaintiffs — legal principles

[46]Rule 12.2(1) of the High Court Rules 2016 provides:

12.2 Judgment 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.

…

[47]   The principles applicable to the plaintiffs’ summary judgment applications were summarised by the Court of Appeal in Krukziener v Hanover Finance Ltd as follows:2

[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: Pemberton v Chappell [1987] 1 NZLR 1 (CA) at 3. 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 MacLean v Stewart (1997) 11 PRNZ 66 (CA). 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

2      Krukziener v Hanover Finance Ltd [2008] NZCA 187, [2010] NZAR 307.

contemporary documents or other statements by the same deponent, or is inherently improbable: Eng Mee Yong v Letchumanan [1980] AC 331 (PC) at

341. 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: Bilbie Dymock Corp Ltd v Patel (1987) 1 PRNZ 84 (CA).

[48]   The Court of Appeal has recognised that the summary judgment procedure may not be well suited to s 339 applications because relief under s 339 is discretionary and, in most cases, the Court is required to weigh a number of factual considerations in coming to its decision.3 But as Edwards J noted in Phillipps v Phillipps, this Court has, on a number of occasions, entered summary judgment  on applications under     s 339.4 The essential point appears to be that, for the Court to grant summary judgment on a s 339 application, the evidence must be such that there is only one possible outcome. Although the relief sought is in the discretion of the Court, the plaintiff may yet succeed if he or she can effectively negate all possible outcomes except the outcome sought in the statement of claim.5

Relevant provisions of the PLA

[49]Sections 339, 342 and 343 of the PLA materially provide:

339 Court may order division of property

(1)A court may make, in respect of property owned by co-owners, an order—

(a)for the sale of Davy Street and the division of the proceeds among the co-owners; or

(b)for the division of Davy Street in kind among the co-owners; or

(c)requiring 1 or more co-owners to purchase the share in Davy Street of 1 or more other co-owners at a fair and reasonable price.

…

(3)Before determining whether to make an order under this section, the court may order Davy Street to be valued and may direct how the cost of the valuation is to be borne.

3      Bayly v Hicks [2012] NZCA 589, [2013] 2 NZLR 401 at [31].

4      Phillipps v Phillipps [2019] NZHC 15, referring (inter alia) to the judgment of Associate Judge Bell in Carey-Venable v Carey [2016] NZHC 2646. See also Coffey v Coffey [2012] NZHC 1765; Ramsey v Mercer [2013] NZHC 2659; and Webster v Ren [2017] NZHC 479.

5      Carey-Venable v Carey, above n 4, at [6].

(4)A court making an order under subsection (1) may, in addition, make a further order specified in section 343.

(5)Unless the court orders otherwise, every co-owner of Davy Street (whether a party to the proceeding or not) is bound by an order under subsection (1) (and by any related order under subsection (4)).

(6)An order under subsection (1)(b) (and any related order under subsection (4)) may be registered as an instrument under—

(a)the Land Transfer Act 2017; …

…

342Relevant considerations

A court considering whether to make an order under section 339(1) (and any related order under section 339(4)) must have regard to the following:

(a)the extent of the share in Davy Street of any co-owner by whom, or in respect of whose estate or interest, the application for the order is made:

(b)the nature and location of Davy Street:

(c)the number of other co-owners and the extent of their shares:

(d)the hardship that would be caused to the applicant by the refusal of the order, in comparison with the hardship that would be caused to any other person by the making of the order:

(e)the value of any contribution made by any co-owner to the cost of improvements to, or the maintenance of, Davy Street:

(f)any other matters the court considers relevant.

343Further powers of court

A further order referred to in section 339(4) is an order that is made in addition to an order under section 339(1) and that does all or any of the following:

(a)requires the payment of compensation by 1 or more co- owners of Davy Street to 1 or more other co-owners:

(b)fixes a reserve price on any sale of Davy Street:

(c)directs how the expenses of any sale or division of Davy Street are to be borne:

(d)directs how the proceeds of any sale of Davy Street, and any interest on the purchase amount, are to be divided or applied:

(e)allows a co-owner, on a sale of Davy Street, to make an offer for it, on any terms the court considers reasonable concerning—

(i)the non-payment of a deposit; or

(ii)the setting-off or accounting for all or part of the purchase price instead of paying it in cash:

(f)requires the payment by any person of a fair occupation rent for all or any part of Davy Street:

(g)provides for, or requires, any other matters or steps the court considers necessary or desirable as a consequence of the making of the order under section 339(1).

Issues

[50]The following issues fall to be determined:

(a)Is it reasonably arguable for Geoff that Jenny is not a co-owner of the Davy Street property for the purposes of s 339 of the PLA?

(b)If the answer to Issue (a) is “No”, is the only possible outcome of the application under s 339 of the PLA that an order should be made for the sale of the Davy Street property?

(c)If the answer to Issue (b) is “Yes”, what orders should the Court make?

(d)Does Geoff have arguable defences in (i) resulting or constructive trust, or (ii) estoppel?

Issue (a) — Is it reasonably arguable for Geoff that Jenny is not a co-owner of the Davy Street property for the purposes of s 339 of the PLA?

[51]In my view, Jenny is a co-owner.

[52]   “Co-owner” is defined in s 4 of the PLA as a “tenant in common or a joint tenant”, and an “owner” includes “the holder of an estate in fee simple or a life interest in the land”. Jenny and Geoff are the holders of an estate in fee simple in the Davy Street property, and Jenny is a “co-owner” because she is a joint tenant with Geoff.

[53]   I do not think trustees were intended to be excluded from the operation of the s 339 regime: co-owners who happen to be trustees will presumably have no less need for the ability to seek relief under s 339 than any other kind of co-owner, and I can think of no reason why they would be denied access to the s 339 regime simply because they do not hold a beneficial interest in the property in question. In my view, that view is consistent with s 342(a), which lists as one of the relevant considerations the Court must have regard to on a s 339 application as the following:

the extent of the share in the property of any co-owner by whom, or in respect of whose estate or interest, the application for the order is made.

[54]   The words “any co-owner by whom, or in respect of whose estate or interest” show that s 342(a) contemplates a s 339 application being made by an applicant in someone else’s interests.

[55]   For those reasons, I do not think there is any standing issue: Jenny had the right to apply under s 341 as a co-owner of the Davy Street property.

Issue (b) — If the answer to Issue (a) is “No”, is the only possible outcome of the application under s 339 of the PLA that an order should be made for the sale of the Davy Street property?

[56]   I am not satisfied that Jenny has shown Geoff has no reasonably arguable defence on this issue. Certainly, Jenny is registered as a co-owner of the Davy Street property, but there is no evidence that she ever contributed any capital to the acquisition of that property, whether directly or indirectly through the partnership.

[57]   The Davy Street property appears to have been treated as an asset of the family partnership. The earliest financial statements for the partnership that were produced, being those for the year ended 30 June 2007, show the Davy Street property as one of the assets of the partnership. Depreciation was claimed on the Davy Street buildings in that year and in subsequent years, and rental from the property was paid into the partnership account. No separate financial statements appear to have been prepared for the partnership acting as a trustee in receiving rents from the property, and the “trust” money appears to have been intermingled with general partnership funds.

[58]   Furthermore, it was the partnership who repaid the Westpac mortgage, which had been used to acquire the Davy Street property. That is apparent from the solicitors’ settlement statement on the sale of the holiday park business and the certificate of title to the Davy Street property, both of which show that the mortgage was repaid on or about 29 April 2016. (The settlement statement was addressed to “Hawthorn Family Partnership c/- Geoff and Jenny Hawthorn.”)

[59]   In part of her evidence, Jenny appeared to contend that the various properties, including the Davy Street property, were not owned by the partnership at all. She said:

The individual titles reflected our parents’ intention of ownership and the accounts for each of the properties were amalgamated under the umbrella of a family partnership for financial purposes only.

[60]   Whatever might have been the reason for the purchase, that statement appears to acknowledge that it was the partnership that purchased and became the owner of the Davy Street property.

[61]   The family partnership was presumably dissolved automatically when Anne died6 (I have no evidence to the contrary), and although a new partnership may have continued (consisting of Jack, Jenny and Geoff) following Anne’s death, I think the deed made it clear that no partnership would continue in existence after the deed was signed.

[62]   Neither party provided any evidence of the terms of any partnership agreement, and absent any agreement providing otherwise, the distribution of net partnership assets on dissolution would have fallen to be carried out under the Partnership Act 1908. The relevant provisions appear to be ss 42 and 47, but neither party directed any evidence or submissions to what the result would be if those provisions were applied.

6      Partnership Act 1908, s 36.

[63]   Jenny said in her reply evidence that her preference (at least in more recent years) was that any income that was attributable to her should be invested back into the partnership rather than paid to her as income. How that might affect the parties’ respective entitlements on a dissolution is not clear.

[64]   If the Davy Street property is a partnership asset, I do not think I have a sufficient basis to conclude that Geoff has no reasonable argument that Jenny has got all she was entitled to get from the proceeds of the partnership, and that nothing more is due to her. If that did prove to be the case, it is difficult to see that Jenny would have any basis to call for the sale of the Davy Street property.

[65]   For completeness, I add two comments on this issue. First, Geoff might argue that Jenny has already received her interest in the family partnership. I do not think that is necessarily correct. The deed contained a specific “carve-out” for the Davy Street property, leaving it for later discussion. If the Davy Street property is a partnership asset, the settlement of Jenny’s share in the partnership evidenced by the deed could only have been a partial settlement.

[66]   Secondly, Geoff might argue that there was a family agreement, or understanding, that the net partnership assets were in fact his sole property. Again, I do not think that is clear on the evidence. Jack and Anne continued to share in the partnership profits up until about 2011, and occasional payments were made to Jenny. All partners remained liable on the Westpac mortgages, and I do not think the fact that a partner (or partners) might have elected to take no share of the partnership profits could, without more, be construed as a surrender of any share they might have had in the capital of the partnership. Furthermore, Recital C in the deed provided that “the Estate still owns property at Davy Street and [Tararu Road]”.

[67]   Any continuing interest of Jack’s estate in the Davy Street property is arguably inconsistent with Geoff being the sole beneficial owner of all partnership assets.

[68]   Those will be issues for trial, but, on any view of it, I do not consider that the determination of the partners’ respective entitlements to share in the remaining assets of the former partnership is an exercise suitable for the summary judgment jurisdiction.

[69]   In the foregoing circumstances, I am unable to say that an order for sale of the Davy Street property would be the only possible outcome if the case were allowed to proceed to trial. The application for summary judgment will be dismissed accordingly.

Issue (c) — If the answer to Issue (b) is “Yes”, what orders should the court make?

[70]In view of my conclusion on Issue (b), there is no need to address this issue.

Issue (d) — Does Geoff have arguable defences in (i) resulting or constructive trust, or (ii) estoppel?

[71]Again, my conclusion on Issue (b) means there is no need to address this issue.

Result

[72]   The application for summary judgment is dismissed. In accordance with usual practice on a plaintiff’s unsuccessful application for summary judgment, costs are reserved.

[73]I make the following directions for the future conduct of this proceeding:

(a)Any reply by Jenny to the affirmative allegations in Geoff’s statement of defence is to be filed and served by 31 January 2020;

(b)The registrar is to arrange a case management conference for the first available time and date after 1 March 2020.

Associate Judge Smith