Heeg v Heeg

[2012] NZHC 595

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

CIV-2011-442-000129 [2012] NZHC 595

BETWEEN  ULRIKE GABRIELLE HEEG Plaintiff

ANDCHRISTIAN OTTO ALFRED HEEG Defendant

Hearing:         13 March 2012

Appearances: D M Lester for Plaintiff

D J Ballantyne for Defendant

Judgment:      30 March 2012

JUDGMENT OF ASSOCIATE JUDGE MATTHEWS

[1]      On 19 August 2011 the Court issued a judgment on an application by the plaintiff, to whom I shall refer once more as Ulrike, to sustain a caveat she had registered against the title to a property owned by the defendant, her son, to whom I shall once more refer as Christian.   The basis upon which the caveat had been registered was an allegation that Christian held the property on constructive trust for Ulrike, as a consequence of a series of transactions between them which started in

2000 with the purchase of two properties in Nelson, and ended with a breakdown in their relationship in 2010. In paragraphs [6] – [18] inclusive of that judgment I set out, briefly, the background facts to the issue then before the Court. Further facts were set out in paragraphs [27] – [39]. The Court rejected Ulrike’s contention that Christian held his property on constructive trust for Ulrike, for the reasons set out in the judgment and summarised in paragraph [55]. Briefly, it was held that the assertions made by Ulrike were inconsistent with, or directly contrary to, documents created contemporaneously with each transaction reviewed, were made some years after the transactions concerned and not at any earlier point, and apart from one fact

were not supported by any document or independent evidence.

ULRIKE GABRIELLE HEEG V CHRISTIAN OTTO ALFRED HEEG HC NEL CIV-2011-442-000129 [30

March 2012]

[2]      One of the transactions between the parties, reviewed in the earlier judgment at paragraphs [12] – [15], was the transfer by Ulrike to Christian in 2003 of the two Nelson properties originally purchased in 2000.   The properties were valued, and transferred  at  the  amount  of  the  valuation.    The  solicitor  who  acted  on  the transaction, Mr Russ, drafted a deed of acknowledgement of debt.  This paper – I describe  it  thus  for  reasons  which  I  will  shortly  relate  –  is  the  basis  of  this application  for  summary judgment  on  the  first  of  five  causes  of  action  in  this proceeding.  The remaining causes of action allege constructive trusts, alternatively liability for debts arising from the same transactions, and further indebtedness in relation to different alleged advances.

Relevant principles on applications for summary judgment

[3]      Summary judgment may be entered for a plaintiff where the plaintiff satisfies the Court that the defendant does not have a defence.   The onus remains on the plaintiff at all times, but where the claim for the plaintiff is made out, prima facie entitling the plaintiff to the remedy it seeks, the defendant is placed in a position of

having to demonstrate a tenable defence.[1]

[1] Auckett v Falvey HC Wellington CP296/86, 20 August 1986.

Ulrike’s claim

[4]      The claim is based on a document with the following relevant elements: (a)  It is headed “Deed of Acknowledgement of Debt”.

(b)     It commences “Deed dated (blank) 2003”.  It is otherwise undated.

(c)     It cites the plaintiff and defendant in this proceeding as Lender and

Borrower, respectively.

(d)     It contains the following provision as an introduction:

A.     The Lender has advanced to the Borrower the sum of FOUR HUNDRED AND TWENTY THREE THOUSAND, FIVE HUNDRED DOLLARS ($423,500.00) to enable the Borrower to complete the purchase of the Lender’s share in the properties

358 Princes Drive and 14 Dunair Way, Nelson, on the following terms and conditions:

(e)     There  are  four  covenants.     The  first  is  an  acknowledgement  by

Christian that he has received the sum of $423,500. (f)  The second is in the following terms:

The Borrower shall repay the amount owing to the Lender “upon

demand” which means upon one month’s notice in writing.

(g)    The third covenant provides for interest to be paid by Christian at a rate to be agreed or, if not agreed, the current first mortgage lending rate on residential properties.

(h)The fourth covenant allows Christian as borrower to make repayments in multiples of $100 at any time, without penalty.

(i)     The document is signed by Ulrike and her signature is witnessed by a general manager assistant, this having occurred in Germany.   Her signature and that of the witness also appear at the foot of the first page. The document bears on both pages a seal of a notary in Frankfurt and another signature, presumably that of the notary.

(j)     The space where Christian might have signed is blank.

[5]      The case for Ulrike is formulated on the basis that Christian has not signed the deed, but that nonetheless he is bound by its terms.

[6]      In  the  pleadings  supporting  the  first  cause  of  action  Ulrike  cites  the preparation and forwarding of documentation for the transaction by Christian’s solicitor, her execution of the transfer of the properties and the acknowledgement of debt and return of those documents to the solicitor, and the subsequent transfer of the properties to Christian by registration of the transfer document.  She then pleads that Christian has not signed the acknowledgement of debt and refuses to do so and says:

The Defendant, having obtained a transfer of the Plaintiff’s interest in the properties on the terms set out in Mr Russ’ letter, is indebted to the Plaintiff in the sum of $423,500, being the amount set out in the Acknowledgement of Debt.

[7]      In discussion with counsel about the meaning of this pleading Mr Lester submitted that if a person induces another person to sign a transfer on the basis of a debt back, that person cannot be heard to say that he has not signed the acknowledgement  of  debt.    Mr  Lester noted  that  twice in  his  affidavit  filed in opposition to the application to remove the caveat from his title, Christian acknowledged that he owed Ulrike half of the value of the properties.  At paragraph

44 of that affidavit he said:

It has never been questioned that I owed her half of the value of the Princes Drive properties from the date of that transfer and free of any notion of a constructive trust.

And at paragraph 65 he said:

Since I had owed her half the value of the Princes Drive properties since

2003 and the value of her share of the properties were established by the means of the valuation, this represented a very convenient and logical way to deal with the matter.  As outlined before the NZD$1,000,000.00 was raised by selling my grandmother’s house to my mother in 2005 at a reduced price.

[8]      I will return to the latter aspects of paragraph 65 later in this judgment.

Ulrike Heeg’s evidence

[9]      The evidence in support of the application for summary judgment consisted of an affidavit sworn by a Christchurch solicitor annexing the English language versions of the affidavits sworn by Ulrike on the proceedings she brought to sustain the caveat that she had lodged against Christian’s property, and a brief affidavit from Ulrike  deposing  to  the  truth  of  the  allegations  in  the  statement  of  claim  and expressing her belief that Christian does not have a defence to the claim.

[10]     Thus the majority of the evidence by Ulrike on this application for summary judgment had been prepared and was given by her in support of her  view that Christian holds his present property on constructive trust for her.  In her affidavits she gave evidence on every transaction between her and Christian from 2000, when they bought two properties in Nelson, until a decade later.

[11]     From this evidence it is instructive to refer to a number of passages which are relevant to the claim Ulrike now makes.  This was the second transaction between Ulrike and Christian and, as noted in the earlier judgment, was at a time when Christian and Ulrike had a functional mother and son relationship, in the sense that, as she has confirmed in her evidence, she was supportive of him in his attempt to obtain permanent residence in New Zealand.

[12]     The first reference to the transfer of the Nelson properties into Christian’s

name is at paragraphs 13 and 14 of Ulrike’s affidavit dated 15 March 2011:

13.In or around July 2003 the Respondent asked me to transfer both Nelson properties into his sole name in order further to advance his Application for Permanent Residence.  He explained the criteria to me in a way which convinced me that his chances would be greatly improved if he were the sole owner of such valuable unencumbered properties in New Zealand.  I agreed to his proposal and I wanted to assist him as best I could but I wanted to ensure that as between us, it was still clear that the funds to acquire the two properties, and thus the properties themselves, belonged to me.

14.I do not know how the transfer process was determined, whether it was by the Respondent or on the advice of his solicitor.  I trusted the Respondent to do the right thing and I simply agreed to transfer both properties to the Respondent as sought by him provided always that my interest in the properties was retained.  I always regarded myself as still the owner of both properties as I had initially provided all the purchase price funds for both properties.

[13]     The next reference is in paragraph 19:

19.The debt stated to be owing to me by the Respondent was for only one half of the total value of the two properties.  I did not understand that in any way I was relinquishing my interest in the other half of the value of the properties.   I had provided all of the original purchase price of both and had not at any stage effected any gifting to the Respondent.  No gifting was done at the time of this transfer either, so far as I am aware, not (sic) at any subsequent time.

[14]     It will be noted that in paragraph 13 Ulrike maintains that the two properties belonged  to  her,  in  paragraph  14  she  also  maintained  that  her  interest  in  the properties was retained, but in paragraph 19, having referred to the deed of acknowledgement of debt for half the total value of the two properties, then appears to accept that she had relinquished at least that half share in the properties.  This is because having stated the amount of the debt she refers to relinquishing her “other

half  of  the  value  of  the  properties,”  which  is,  I assume,  the  half  which  is  not represented by the debt.   This must be seen against the background to the whole transaction, which is that there is a dispute about the source of the funds to buy the properties  (whether  they  were  Ulrike’s,  or  were  funds  belonging  to  her  late husband’s estate, in which Christian has an interest).

[15]     In paragraph 20 Ulrike says:

It was our intention and my expectation that I would continue to have an interest in the properties and that this transaction was purely to place the Respondent in a more favourable position for immigration purposes.   I believed  that  the  Respondent  was  therefore  holding  the  two  Nelson properties on trust for  me.    I had  no  knowledge  of  the  implications  of completing this transaction on the basis of the documentation which I signed and received no advice in that regard.  I believed that I was transferring the properties to my son to assist him for other purposes; However I certainly expected to retain an interest in the properties in some way and always expected full repayment of all my funds one day.

[16]     In this paragraph, Ulrike maintains that the transfer to Christian, somehow resulted  in  her  retaining  an  interest  in  the  properties,  and  that  in  signing  the document on which she now relies in this proceeding, she “had no knowledge of the implications of completing this transaction on the basis of the documentation which I signed” and she received no advice on it.

[17]     Annexed to the same affidavit as exhibit R is a letter dated 8 February 2011 from Mr P C Maciaszek, the solicitor instructed by Ulrike in New Zealand, to Christian. At paragraph 7 Mr Maciaszek said:

Your mother agreed to this course of action as she wished to support your application for permanent residence in such practical way as she was able. The transfer was effected however on the basis that, notwithstanding the change of registered proprietor, the actual ownership of the two properties remained the same as at the time of settlement of the two purchases namely that your mother was the owner of both as she had paid the purchase price of both properties.

[18]     The Court is entitled to assume that Mr Maciaszek’s statements accurately reflect the instructions of Ulrike, given that she has produced the letter as an exhibit to her affidavit without in any way suggesting that it does not accurately reflect the position.

[19]     Again, therefore, Ulrike asserts that she continued to own the properties. Whilst consistent with paragraphs 13 and 14 of her first affidavit, the letter and these two paragraphs are inconsistent with paragraph 19.  The stance now taken is that the properties were relinquished but a debt was retained for a half share of their value, is materially different, and consistent with paragraph 19.  In paragraph 20 Ulrike denies any knowledge of the implications of the transaction and documentation she signed. Given the inconsistencies in her previous assertions, this may be correct, but I cannot assume that, given the contradictory evidence before the Court on the extent of her understanding of the English language, and Christian’s evidence that the witness to her signature on the documents speaks fluent English and German.

[20]     Ulrike swore a further affidavit on 14 June 2011. At paragraph 18 she said:

... thus it was my intention that the Nelson properties be transferred into his name to enable him to apply for residency but that I would remain the beneficial owner of the Nelson properties in all respects.

[21]     At paragraph 19 she said:

...  Furthermore my English is very basic and at a colloquial level.  In other words I can speak and understand spoken English a little but cannot read or write it very well.   I could not understand the document sent to me for signing, particularly because it was a legal document, but I signed it because I trusted the Applicant.

[22]     And at paragraph 20:

... I had no real understanding of the legal effect of the Agreement signed.  I was always of the understanding that the transfer of the Nelson properties into the Applicant’s name was a formality for residency and that I would retain the ownership of the Nelson properties.   I again confirm that the purchase of the Nelson properties were from my funds and had nothing to do with my deceased husband’s estate.

This  evidence  aligns  with  paragraphs  13  and  14  in  Ulrike’s  first  affidavit  but although presented to the Court in support of this summary judgment application, is completely inconsistent with the claim Ulrike is now making.

Discussion of this evidence

[23]     The difficulty for Ulrike in applying for summary judgment on the basis of the document which I have described in paragraph 4 is that in her sworn testimony, she has twice disavowed an understanding of that document and maintained that notwithstanding its terms, the effects of the transaction the parties entered  were completely different.  Her own solicitor recorded that the “actual ownership of the two properties” remained with Ulrike, thereby disavowing the acknowledgement of debt, because his instruction amounts to an assertion that whilst the legal title to the properties was transferred to Christian, the beneficial interest in them remained with his client; as I have already pointed out in the judgment dated 19 August 2011 this is manifestly inconsistent with half their value now being represented by a debt.

[24]     The Court is faced with a deponent who has given sworn testimony that the consequence of the transfer to Christian was, despite the way it was documented, a transfer to Christian only for the purpose of assisting his residency and did not transfer to him ownership of the properties, which he retained.   The Court has rejected that assertion for the purposes of sustaining a caveat against Christian’s property, on the basis that it is inconsistent with contemporaneous documents.  Now Ulrike is attempting to rely on one of those contemporaneous documents, the effect of which is the exact opposite of the effect she has sworn the transaction had, and at the same time disavows any understanding of the document.   The evidence for Ulrike is far from sufficiently reliable to satisfy me on an application for summary judgment that Christian is indebted to her under this document.  Stated quite bluntly, Ulrike’s evidence needs to be given in person and with cross-examination before a trial Judge so that her explanations can be assessed for credibility.

[25]     Apart from confirming the truth of the pleading in the statement of claim, nowhere in her affidavits does Ulrike specifically state that Christian is indebted to her pursuant to the document on which she now relies.  Certainly she refers to an expectation of receiving full repayment of all her funds one day, but that is in the context  of  an  expectation,  promoted  in  the  earlier  proceeding,  that  she  is  the beneficial owner of the property in which Christian and his family now reside.

[26]     I have not overlooked passages in the evidence of Christian in which he has acknowledged that he owed his mother half of the value of the Princes Drive properties from the date of the transfer of those properties to him (see [7] above).

[27] However, like Ulrike, Christian sought to diminish any legal effect of the document described in paragraph [4]. At paragraph 43 of the same affidavit he said:

Since it was clear to me and my mother that no monies were to be paid for my mother’s share of the Princes Drive properties, I took no issue with the Deed of Acknowledgement of Debt that Mr Russ had prepared.

And at paragraph 45:

Since we enjoyed a trusting relationship for all of our lives, it was not a concern for either of us whether the Deed of Acknowledgement of Debt was signed or not.   It was considered a mere formality.   I do not remember whether it was eventually signed or not and in any event had I realised the possible implications of signing the Deed of Acknowledgement of Debt, I most certainly would not have signed them as it was never part of our agreement that I would owe any monies to my mother.

[28]     Without this evidence being tested at trial, also, it is not appropriate to draw any conclusions from it.  Perhaps it bolsters Ulrike’s case based on debt, if accepted solely in that sense.  However, like Christian, Ulrike also regarded the document as a mere formality.

[29]     At paragraph 20 of her affidavit dated 14 June she said:

I was always of the understanding that the transfer of the Nelson properties into the Applicant’s name was a formality for residency ...

[30]     In paragraph 9 of his affidavit dated 16 November 2011 sworn in opposition to this application, Christian said:

For completeness, I deny that there was ever an ‘acknowledgement of debt’ or that there was any agreement between me and the plaintiff that could be constructed as such an agreement.  I would not have agreed to this nor did I. As I pointed out in my affidavit for the caveat proceedings, my mother and I agreed that the purchase price of the property was to be offset against the unpaid entitlement out of my father’s inheritance and that we decided to deal with the matter in such a way to avoid any encumbrances for both parties.

[31]     There  are  two  potentially  significant  difficulties  for  Christian  with  this evidence.  First, it conflicts with his plain statements to the contrary about the effect of the documents executed in 2003, given in his earlier affidavits.  Secondly, those documents were executed in 2003 but the offset referred to (to which I refer in more detail shortly), is said to have taken place in 2005.  The only evidence given about agreement reached in 2003 is that the properties would be transferred to Christian to assist  his  application  for  residency.    Ulrike  and  Christian  agree  on  this  point. Evidence in relation to an offset against his entitlement from his father’s estate suggests that topic only arose in 2005.

[32]     Despite those difficulties I am mindful that the onus of proving that the defendant does not have a defence rests at all times with the plaintiff.  For present purposes, the most that can be said of this evidence is that it does not assist the defendant,  but  my concern  rests  principally with  the inconsistent,  and  therefore necessarily (in this context) unreliable evidence of the plaintiff.

The alleged 2005 agreement

[33]     Christian maintains that he has, in any event, repaid to Ulrike any moneys he may have owed to her as a consequence of the way Mr Russ, solicitor, structured the transfer of the two Nelson properties to Ulrike, by setting off any indebtedness he may have had against his entitlement to moneys from his late father’s estate, which were under Ulrike’s control.   In May 2004 he sold to Ulrike a property he had inherited from his grandmother, located in Hamburg.  Ulrike paid for it in cash, but at a discount of €60,000.  He also owned a property adjacent to Ulrike’s house, but on a separate title.  He maintains he agreed to sell this to Ulrike for €150,000 and received payment for it in two instalments.   These transactions are described in paragraphs 16 and 17 of the judgment dated 19 August 2011.  It is noted there that Ulrike regards the payments made to Christian as advances, whereas he maintains they were payments for these properties. As noted in that judgment:

[17]  ...  I was informed, also, that there were a significant number of other financial transfers between these parties over the years but I was not given details.  The relevance of their having occurred is that Ulrike and Christian entered into a number of apparently complex and intermingled financial

transactions, in the context of his being entitled to funds from his father’s

estate at the discretion of Ulrike (or ultimately on her remarriage or death).

[34]     In his affidavit dated 17 May 2011 he gave evidence on the former of these property transactions and the agreement reached with his mother on it.  He then said:

62.  It was also agreed however that we would need to find a way to make sure I received my share out of my father’s inheritance at some point, since my mother was not prepared to find work to secure her income and she was constantly depleting her assets and ultimately my share of the inheritance.

63.  The agreement we reached was simple.  My mother forgave any monies I may have owed her in accordance with how Mr Russ structured the transfer.  In return, I partially forgave any claims I had to my father’s estate.

64.  This reflected both of our wishes in that I did not want to continue to encumber my mother’s holdings in Germany and she did not want to encumber my holdings in New Zealand.

65.  Since I had owed her half the value of the Princes Drive properties since

2003 and the value of her share of the properties were (sic) established by the means of the valuation, this represented a very convenient and

logical  way  to  deal  with  the  matter.     As  outlined  before,  the

NZD$1,000,000.00 was raised by selling my grandmother’s house to

my mother in 2005 at a reduced price.

66.  While most of our discussions were informal, my mother wanted me to confirm that I had relinquished my claims to my father’s estate. While I did not see this as necessary I recognised that it was sensible in the circumstances.

[35]     Christian  then  annexed  a  letter  he  maintains  he  wrote  to  his  mother  on

18 February 2005 and set out an English translation of it.   He referred first to the payment of €150,000 for the property adjacent to the family home and stated that as a consequence he no longer had any claim out of the inheritance of his father.  He then continued:

Every obligation to pay any part of the inheritance of my father is no longer relevant since the formally joined owned properties in New Zealand have been transferred into my name and further my mother paid my obligations out of the inheritance from my grandmother hence I do not have any more claims against my mother.

[36]     I confess I find the arithmetic hard to follow.  If Ulrike agreed to buy both the properties in Germany from Christian, and paid for them (as he maintains) it is unclear how this might amount to satisfaction of his entitlement under his father’s

estate, let alone how satisfaction of that entitlement might, in dollar terms, have offset  the  sum  he  acknowledged  as  owing  under  the  document  described  in paragraph [4] above.  However, Ulrike does not take issue with that in her affidavit in reply.  Rather, at paragraph 22, she said:

There was never any agreement between the Applicant and me that I would forego my shares of the Nelson properties in return for the Applicant forgiving any claims over my deceased husband’s Estate.   I refer to the exhibit annexed as “N” to the Applicant’s Affidavit.  I state that I have never seen or received this letter and the agreement that it relates to is not true at all.

[37]     Ulrike then went on to set out her view that the payments Christian maintains were for two properties, were instead advances she made to him and which are also repayable.

[38]     In the context of an application for summary judgment, I must be satisfied that the defendant does not have a defence. The evidence on this point is unclear and conflicting between Christian and Ulrike.  It does not take me to a point where I am satisfied that the agreement which Christian maintains was entered does not provide him with a complete defence to the claim now made.

Other defences raised

[39]     Mr Lester acknowledged that the limitation period for proceedings to recover a debt which is repayable upon demand commences from the date of the advance and that accordingly action to recover the debt would be statute barred if it were not acknowledged by deed.   He submitted, however, that in the circumstances of this case Ulrike is entitled to sue on the deed, for which the limitation period is 12 years. He submitted that equity treats Christian as having signed the deed and, accordingly, the 12 year limitation period would apply.

[40]     Mr Ballantyne argued that the document on which Ulrike relies is not a valid deed and accordingly the limitation period for a claim on the debt is governed by s

4(1) of the Limitation Act 1950, as a claim in contract, rather than by s 4(3), as an action upon a deed.   Mr Lester argued, however, that his client’s claim under the document was based on the equitable principle by which equity treats as done that

which ought to be done, with the result that the deed which should have been signed as part of the transaction by which Christian took title to the Nelson properties, must be regarded in equity as having been executed, and therefore the combined effect of s 4(9) and 4(3) of the Limitation Act is that the limitation period has not expired.

[41]     Because  I  have  determined  that  this  application  for  summary  judgment cannot succeed for the reasons I have set out, it is unnecessary to make a final determination on this argument.  Nor did either counsel refer me to any authority in support of or contrary to this proposition.  In the circumstances it is preferable that I merely record that this argument was raised but not express a view on it.

Defence of laches?

[42]     The document upon which Ulrike sues was prepared in July 2003 and signed by Ulrike around that time.   This proceeding was issued in August 2011, approximately eight  years later.    Mr  Lester submitted  that  a delay without  any prejudice is not sufficient to found a defence of laches when the delay is inside the limitation period.  He referred me to paragraph 38.1.4 in A Butler (Gen ed), Equity &

Trusts in New Zealand (2nd  ed, 2009), where reference is made to Eastern Services

Ltd v No 68 Ltd.[2]

[2] Eastern Services Ltd v No 68 Ltd [2006] 3 NZLR 335 (SC).

[43]     It is plain that consideration would need to be given to a number of factors to determine whether laches was or was not a defence in this case including the length of the delay, any evidential difficulties created by it, the nature of the transaction involved,  the  relationship  between  the  parties,  prejudice  to  the  defendant  and whether an equitable remedy is sought.   The evidence before me gave only scant details on a number of these issues and is quite insufficient for a comprehensive analysis  of  this  potential  defence  in  the  context  of  this  summary  judgment application.   Because of the length of the delay, the number and the extent of the transactions between Ulrike and Christian subsequently without reference by Ulrike to the alleged debt, her sworn testimony inconsistent with her believing that a debt

was owing, and her claimed lack of understanding of the document upon which she

now relies  to  bring this  proceeding,  I cannot  rule it  out as  a possible defence. Beyond that it is again preferable not to comment further.

Outcome

[44]     The application for summary judgment is dismissed.

Costs

[45]     Mr  Ballantyne  sought  costs  in  favour  of  his  client  in  the  event  he  was successful.   In his written submission he described the plaintiff’s claims as being without merit and inappropriate for resolution by way of summary judgment.  In the notice of opposition the claim is described as frivolous and vexatious.

[46]     Costs  should  generally  be  reserved  on  dismissal  of  an  application  for summary judgment, for assessment after trial: NZI Bank Ltd v Philpott.[3]

[3] NZI Bank Ltd v Philpott [1990] 2 NZLR 403 (CA).

[47]     In Philpott it was also noted that it is an abuse of process to proceed by way of summary judgment where it is clear there is an arguable defence, and in Vision Aluminium Ltd v McLaughlan,[4] the learned Master observed that no defence is more clearly arguable than a dispute of fact.  Costs were awarded to a successful defendant in Apostolatos v NZ Insurance Co Ltd,[5]  where the Court formed the view that the plaintiff should have realised at an earlier stage either that applying for summary judgment was not warranted or that if it was warranted the application ought to have been abandoned soon after the comprehensive notice of opposition and affidavit were filed.

[4] Vision Aluminium Ltd v McLaughlan HC Christchurch CP123/90, 8 June 1990.

[5] Apostolatos v NZ Insurance Co Ltd HC Wellington CP118/90, 1 June 1990.

[48]     Ultimately, awarding costs is in the discretion of the Court.

[49]     In this case, the application for summary judgment was brought on the basis of the evidence given by Ulrike on her claim that she had a caveatable interest in

Christian’s property based on his holding that property for her on a constructive

trust.  As discussed in this judgment aspects of her own evidence do not support the contention now made that Christian is indebted to her under the document described in paragraph 4 of this judgment, a document which she says she did not in fact understand and which she, at least by implication, maintained in the earlier proceedings should be disregarded, as the true nature of the transaction whereby she transferred the Nelson properties to Christian in 2003 was that she in fact retained the beneficial interest in those properties.

[50]     Further, the conflicting evidence between Ulrike and Christian on whether or not any indebtedness had been offset against an entitlement under his late father’s estate, which was under the control of Ulrike, was squarely raised in the affidavits filed on the earlier proceedings and thus plainly in issue long before this proceeding was brought.

[51]     For these two reasons I find that this application for summary judgment should not have been brought.  In my opinion this justifies departing from the usual rule and awarding costs to Christian on the application.

[52]     Christian is awarded costs on a 2B basis plus disbursements to be fixed by the Registrar.

J G Matthews

Associate Judge

Solicitors:

Geddes & Maciszek, PO Box 13467, Riccarton, Christchurch. Counsel – Dale Lester. Email: [email protected]

C & F Legal, PO Box 1049, Nelson 7040. Email: [email protected]