Huljich v Huljich
[2018] NZHC 3429
•20 December 2018
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2014-404-002631
[2018] NZHC 3429
BETWEEN ELIZABETH HULJICH
Plaintiff
AND
CHRISTOPHER PETER HULJICH
First Defendant
PETER KARL CHRISTOPHER HULJICH
Second DefendantMICHAEL STEPHEN HULJICH
Third Defendant
Hearing: 3-7 December 2018 Appearances:
G R Little SC and D B Beard for the Plaintiff
D H McLellan QC, J S Cooper QC and H M Z Ford for Defendants
Judgment:
20 December 2018
JUDGMENT OF VENNING J
This judgment was delivered by me on 20 December 2018 at 12.15 pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date……………
Solicitors: Nicholls Law Ltd, Auckland
Harmos Horton Lusk, Auckland Counsel: G Little SC/D B Beard, Auckland
D H McLellan QC/J S Cooper QC, Auckland
HULJICH v HULJICH [2018] NZHC 3429 [20 December 2018]
Introduction [1]
Parties [2]
The claims [7]
Moneys owing under a banking facility [8]
Deceitful use of funds [9]
Renovations [10]
Rental income [11]
Mental/emotional stress claims [12]
Failure to invest [13]
Pleadings [14]
Preliminary points [16]
The plaintiff’s case generally [25]
Defendants’ case [36]The witnesses [45]
Was there a binding contract made in 1986? [48]
The “Loan Agreement” – the first cause of action against Christopherand Peter for breach of contract [56]
Second cause of action – against first and second defendants in fraud –
deceit [96]
Third cause of action – Fair Trading Act 1986 [112] Fourth Cause of action – against all defendants – breach of contract [113]
Fifth cause of action against all three defendants – moneys had and
received [120]
Sixth cause of action – against Christopher – breach of fiduciary duty as
agent [125]
The relief sought for emotional and mental distress [139] Seventh cause of action against Peter – breach of fiduciary duty [149] Eighth cause of action – breach of agency agreement against
Christopher – in relation to the renovations [155]
Ninth cause of action against Peter – deceit [168] Tenth cause of action – Fair Trading Act claim in relation to the $150,000 [172] Eleventh cause of action against Christopher– moneys had and received [176]
Twelfth cause of action – against Christopher for breach of contract in
relation to rental [191]
Thirteenth cause of action – Fair Trading Act [192]
Fourteenth cause of action – estoppel [196]
Summary – general observation [195]
Conclusion/result [199]Costs [200]
Introduction
[1] To describe this as an unfortunate case is an understatement. Mrs Huljich, an 88 year old widow, sues two of her three sons and a grandson. She alleges they have
abused her trust and have taken her money. The allegations are strenuously denied by the defendants.
Parties
[2] Elizabeth Huljich (Elizabeth) is the mother of Christopher, Paul and Michael Huljich. She is Peter Huljich’s grandmother. Elizabeth and her late husband, Peter Stephen Huljich, were successful in business and formerly owned or controlled a business and a number of properties. Elizabeth currently lives in her own home at St Heliers. Until recently, she also had a number of rental properties at Tarawera Terrace.
[3] Christopher Huljich is Elizabeth’s eldest son. He is a successful businessman. Michael is the youngest son. He is also a successful businessman. He lives in Sydney, Australia.
[4]Peter is Elizabeth’s grandson and Christopher’s son.
[5] Although Paul, Elizabeth’s middle son, is not a party to the proceedings, his relationship with his brothers and his mother is a relevant feature of these proceedings.
[6] As a result of the issues that led to these proceedings, there is a serious division between family members. On the one side are Elizabeth and Paul and their supporters, and on the other, Christopher, his son Peter, Michael and their supporters. The rift in the family seems irreconcilable at present.
The claims
[7] Elizabeth principally claims against Christopher and his son Peter but also makes a number of claims against Michael. The claims for which relief is sought fall under the following general heads.
Moneys owing under a banking facility
[8] Elizabeth says she agreed to grant a mortgage over property owned by her to provide a loan facility associated with that mortgage for the defendants’ benefit. She
seeks to recover the sum of $264,000 (together with interest) being the moneys drawn down under the facility but not repaid.
Deceitful use of funds
[9] Elizabeth says that Christopher and Peter used an account of hers to transfer money and apply it for their personal benefit. She claims the sums of $150,000 and AUD $50,000.
Renovations
[10] Elizabeth says that Christopher assisted her to manage some renovation work carried out at her property. She says that some months after the work was completed, Peter told her she owed Christopher for the renovations, convinced her to sell shares and took $150,000 of the proceeds of sale to his and Christopher’s benefit when she had already paid for the renovation work.
Rental income
[11] Elizabeth says that Christopher breached an agreement to pay the rental of a relative, Sonja Milat. She claims $95,680.
Mental/emotional stress claims
[12] Elizabeth claims general damages of $250,000 for mental and emotional distress and exemplary damages of $50,000.
Failure to invest
[13] Elizabeth also alleges that Christopher and Peter breached an agreement to invest in shares on her behalf. She claims for loss of a chance to invest.
Pleadings
[14] Elizabeth’s claims are made in a ninth amended statement of claim. She raises 14 causes of action, a number of which overlap. The heads of claim pleaded are:
·breach of contract – (first, fourth and 12th causes of action);
·fraud (deceit) – (second cause of action);
·breach of the Fair Trading Act 1986 – (third, 10th and 13th causes of action);
·money had and received – (fifth and 11th causes of action);
·breach of fiduciary duty – (sixth and seventh causes of action);
·breach of an agency agreement – (eighth cause of action);
·deceit – (ninth cause of action); and
·estoppel (14th cause of action).
[15] The defendants deny the claims and also say a number of the claims are barred from relief under the Limitation Act 1950 and/or the equitable defence of laches.
Preliminary points
[16] In the week prior to the fixture the defendants sought leave to amend the statement of defence primarily to include an additional limitation defence to the claim of moneys had and received in the 11th cause of action. Mr Little SC, counsel for Elizabeth indicated an objection to the application, but at the outset of the hearing did not pursue the objection. Leave was granted. The same limitation point had been pleaded as a defence to the eighth cause of action which claimed the same amount by way of relief. The amendment raised a matter of law only. No further evidence was required. There was no prejudice.
[17] In the course of his opening Mr Little conceded that the causes of action under the Fair Trading Act could not be sustained. He confirmed the plaintiff did not pursue them. That was a realistic concession.
[18] As noted, the present pleading before the Court is the ninth amended statement of claim. Elizabeth commenced these proceedings on 3 October 2014. Her first claim only raised one cause of action, breach of contract against Christopher solely.
[19] The claim has now expanded and evolved to include claims against Peter and Michael under various heads of claim. Even though the case has been before the Court for four years, is now at the stage of the ninth amended statement of claim and the issue of pleadings has been dealt with by both this Court1 and the Court of Appeal,2 the pleaded claim is still in an extremely unsatisfactory state.
[20] Following the Court of Appeal judgment a number of allegations from the fifth amended statement of claim which had been struck out by Associate Judge Smith were reinstated. However, the Court also directed that particulars of the reinstated pleadings were to be provided within 10 working days. That did not occur. The Court also reinstated a claim for relief in the first cause of action, which read:
(d)Judgment in a sum to be calculated for the loss of chance to invest the loan funds alongside the first and second defendants.
But again, the Court noted the correct nature of the loss claimed was not the loss of a chance but the loss of the likely investment return on the loan funds over and above the cost.
[21] Following closing submissions and while this judgment has been reserved, counsel for the plaintiff filed a memorandum seeking to draw the Court’s attention to the Court of Appeal decision. The defendants’ counsel filed a memorandum in response noting the memorandum was incorrect to the extent it suggested the pleadings at [26] and [37] of the claim had been reinstated by the decision (they had not been) and objecting to any suggestion that leave should be granted to the plaintiff to amend the statement of claim to include the allegations as no particulars had been provided.
1 Huljich v Huljich [2018] NZHC 836.
2 Huljich v Huljich [2018] NZCA 429.
[22] Leave should have been sought to file the memorandum but it was unnecessary for plaintiff’s counsel to have filed the memorandum in any event. The Court was well aware of the Court of Appeal decision. The result of the Court of Appeal decision was to reinstate certain allegations. That remains the position. The pleadings are reinstated, but without particulars the very general allegations do not advance the plaintiff’s claim in a meaningful way. Despite the Court’s direction, the plaintiff has refused to provide the particulars directed. It appears from the email correspondence the plaintiff and her advisers take the view that the particulars are sufficiently contained in the ninth amended statement of claim and the briefs of evidence. That is not satisfactory. Particulars are not provided in briefs of evidence. They are to be incorporated in the pleadings.
[23] As a result of the infelicitous pleading there remains a disconnect between the various claims which Elizabeth seeks to pursue, the claims actually pleaded and the relief sought in the various causes of action.
[24] For the reasons that follow, ultimately that disconnect is of no particular moment as the evidence does not support the basis upon which Elizabeth seeks to pursue the unparticularised and general claims in any event.
The plaintiff’s case generally
[25] Mr Little explained Elizabeth’s case in opening in the following way. Elizabeth says that an agreement was reached in about 1986 between her husband Peter, herself and their three sons to the effect that she and her husband would transfer various assets owned by them and companies controlled by them to the family on the understanding that the family (the sons) would provide and care for her and her husband for the rest of their lives in the way that they were accustomed to live. Peter died in April 1993.
[26] The sons repaid a mortgage over various investment properties and the home at St Heliers and paid for renovations to Elizabeth’s St Heliers’ home in about 1995 (the defendants say the work was in 1998 but nothing turns on that). Also, following Peter’s death the three sons paid for substantial gifts, overseas trips, new cars, and
other items for Elizabeth, and made other contributions towards her outgoings in a generous way from 1999 until about the end of 2007.
[27] During the same period Elizabeth says her grandson Peter managed her share portfolio for her. The portfolio grew from about $250,000 to $1.4 million. Elizabeth says that Peter then encouraged her to disperse those moneys amongst her family members which she largely did.
[28] Then in late April, early May 2009 Christopher approached her and said that he and Peter were short of money and needed financial assistance. Elizabeth says she agreed to provide her four rental properties at Tarawera Terrace as security for a loan facility. Christopher and Peter were to arrange it. The facility was originally for
$700,000 but was increased to $750,000. Elizabeth said that she agreed to make the facility available on the basis that once any moneys were repaid the funds would be invested on her behalf by Peter.
[29] The facility was with Kiwibank. The initial borrowings under it were repaid in August 2012 when the Kiwibank facility was replaced with a facility for the same sum of $750,000 with Sovereign.
[30] Elizabeth says that by May 2012 she had become concerned that Christopher and Peter had misled her about various matters. She set out her general concerns in correspondence with her sons. In May 2012 Elizabeth wrote to Christopher. Later, in January 2014 she wrote to Michael and then in February 2014 to Christopher and Peter.
[31] Elizabeth claims $264,000, which is the balance owing under the facility, together with interest.
[32] Elizabeth also sues for the return of $150,000 from the sale of parcels of Just Water Ltd shares in 2008. During 2007/2008 Elizabeth carried out further renovations on her home. Christopher helped to project manage the work. The renovations were completed by late 2007. Elizabeth says that in June 2008 Peter wrongly told her that she still owed $150,000 to Christopher for the renovations. He encouraged her to sell
shares she held at the time to repay the debt. She sold her Just Water Ltd shares for approximately $150,000. That sum was ultimately paid to Christopher.
[33] Next, Elizabeth also claims for rental of $95,680. One of the rental properties owned by her was occupied by Sonja Milat, her sister-in-law. For a long period of time Christopher had paid the rental for Sonja Milat but he ceased doing so in 2012. Elizabeth says there was an agreement between Christopher (and perhaps other defendants) that he would pay Sonja Milat’s rental. She says Christopher breached that agreement by stopping the payments.
[34] A major complaint Elizabeth raises is that during the period from 2012 to 2015 Christopher and Peter acquired very substantial holdings in a company, Pushpay Holdings Ltd (Pushpay). Other associated business and family members (including Michael) also obtained shares in the company. The investment turned out to be an extremely profitable one but the defendants did not make any investment in Pushpay on Elizabeth’s behalf. Elizabeth says the failure to invest was in breach of the agreement they were to make investments on her behalf when the loan facility was repaid.
[35] Elizabeth also says that Christopher and Peter were in a fiduciary relationship with her and that, in breach of that duty, they abused her trust by encouraging her to sign cheques in blank and by sending faxes to the bank using an electronic signature of hers to authorise the transfer of funds from the Kiwibank account. She claims
$150,000 and AUD $50,000.
Defendants’ case
[36] The defendants’ case is that there was never any formal agreement between Elizabeth, their father and them, pursuant to which the sons had a legal commitment to maintain their parents. Although there was no such binding legal agreement to do so, the sons did, for a number of years, fund Elizabeth’s lifestyle by providing regular holidays to Australia, other travel, replacing her car from time to time and paying for the cost of the renovations to her home in 1998 and also by contributing to the cost of renovations in 2007/2008. Christopher also paid Sonja Milat’s rental for an extended
period. Peter says that he assisted his grandmother with her investments when she asked him to do so.
[37] The defendants however deny any formal legal obligation to maintain or provide for Elizabeth, to pay Sonja’s rental, or to make investments on Elizabeth’s behalf. They say that from 1985 all three brothers were involved in a business, Best Corporation Ltd, which they sold out of in 1995 for approximately $80 million. Some of the proceeds were banked to a bank account in the name of Huljich Brothers. The proceeds were split or applied in accordance with the shareholding in Best Corporation Ltd which was 42½ per cent for each of Christopher and Paul and 15 per cent for Michael. The three brothers made individual withdrawals from the account and then made separate investments.
[38] By 2007 the Huljich brothers’ bank account was almost a million dollars overdrawn. While all three brothers had made substantial investments they were not readily realisable, and Christopher and Paul in particular had apparently sustained some losses in their investments. Christopher was concerned that Paul had withdrawn more from the account than he had contributed. He raised the matter with Elizabeth. Elizabeth suggested that she could provide her rental properties as security for a mortgage facility for the use by all her sons. That offer reflected the cooperative and supportive nature of the relationship between the family members at that time. After discussion amongst the brothers, they agreed to take up Elizabeth’s offer.
[39] However as time went on, while Christopher and Michael repaid the money they had drawn from the facility, Paul did not. Following the sale of the Queensland apartment owned by all three brothers in 2014, there still remained a balance owing of
$286,000 (including interest). Christopher and Michael take the view that Paul is solely responsible for that sum and have refused to pay it.
[40] The defendants consider that the reason Elizabeth is pursuing them is that she considers that Christopher (and to an extent, Michael) have not treated their brother Paul, fairly. Ultimately that has led to the complete breakdown in the relationship amongst the family members.
[41] The defendants also deny there was ever a partnership of Christopher, Paul and Michael. While there was the Huljich Brothers’ bank account, that was used to receive and then distribute some of the proceeds of sale of Best Corporation Ltd. There was never a business partnership between the three of them. The apartment in Queensland was never owned by a partnership. They consider each of them is separately liable to Elizabeth for their drawings from the facility. The defendants’ case is that while Christopher dealt with his mother and arranged the Kiwibank loan facility he did so as agent for all three brothers and it was always understood and agreed with Elizabeth that the money would be available to all three sons as needed but that each would be individually responsible for repayment of the sums applied to their benefit.
[42] In relation to the $150,000 renovation claim Christopher says that he project managed the renovations for his mother in 2007, and that they cost approximately
$523,000. Elizabeth initially contributed about $200,000 from the sale of some of the remaining shares in her share portfolio. While Christopher was prepared to lend her the money to complete the renovations he did expect to be repaid in due course. He agreed to purchase Elizabeth’s Just Water Ltd shares to cover the shortfall. The reason for the delay in seeking the repayment after the renovations were completed is that he thought the shares may increase in value and effectively reduce the amount Elizabeth owed them. When the shares were eventually sold in June 2008 and the $150,000 paid, Christopher says Elizabeth still owed in excess of $160,000 for the invoices which had been paid for from the Huljich Brothers’ account. No demand has been made for that.
[43] In relation to the claims for rental the defendants’ case is that, while Christopher paid Sonja Milat’s rental until 2012, there was never any legal obligation to do so. He paid the rental because Sonja and her husband were family and were not financially well off. Elizabeth had said that Sonja’s children were the ones who should be paying the rental rather than Christopher. When the relationship within the family broke down Christopher ceased paying the rental, as Elizabeth had said he should do in her letter to him in May 2012.
[44] Finally, the defendants deny any obligation to invest on Elizabeth’s behalf. Peter did hold a power of attorney for Elizabeth but he never used it. While he did
make investments for Elizabeth, they were always discussed with her. The defendants deny that there was ever a binding agreement that they would make investments on behalf of Elizabeth.
The witnesses
[45] Evidence to support Elizabeth’s factual narrative was given by Elizabeth herself, and Sonja Milat. Elizabeth also called Shane Hussey, an accountant, to provide evidence of the value of shares in Pushpay at various dates. Evidence was also given by Dr Srzich, a consultant psychiatrist and psychogeriatrician, regarding the effect of the proceedings on Elizabeth. Karen Greenwood’s (a forensic accountant) evidence was admitted by consent.
[46] The defendants’ evidence was given by Christopher, Peter and Michael. Grant Graham’s (a forensic accountant) evidence was also admitted by consent.
[47] Ms Greenwood and Mr Graham largely agree on the record of transactions through the Kiwibank and Sovereign facilities. They agree that a sum of approximately $268,306 is outstanding under the facility.
Was there a binding contract made in 1986?
[48] Although not directly relevant in that no relief is sought in the pleaded causes of action as a consequence, underlying Elizabeth’s case is her claim that in about 1986 a binding arrangement was made pursuant to which the sons agreed to provide all financial needs for both her and her husband during their lifetimes.
[49] The basis of the agreement is extremely vague. There was a difference between the terms and formation of the arrangements as pleaded and Elizabeth’s evidence-in- chief.
[50] Elizabeth pleads that such a binding agreement was made by various oral agreements and undertakings between May and August 1986 and that it led to a partnership between the three sons, and her and her husband, Peter. The partnership was to be called the Huljich Brothers’ partnership. The essential terms were that the
plaintiff would control the assets (a number of properties, some of which were owned by the parties and some by Huljich Properties Ltd – the assets also apparently included the business of H & M Ltd) and would use the assets to ensure that the ongoing obligations to support Elizabeth and her husband’s financial needs during their lifetimes were met.
[51] In her evidence Elizabeth said the agreement was made at one meeting in May, June or July 1986. The agreement was that, in exchange for Elizabeth and her husband “giving up” all their properties except the St Heliers home and four townhouses “all our financial requests” made till they both passed away were to be met by their sons.
[52] Under cross-examination and in response to the proposition that any discussions that the family may have had in 1986 were not intended to be permanently binding on anyone, Elizabeth’s response was “that’s the way the family worked and, you didn’t need to make out a list”.
[53] Taken overall I do not consider the evidence supports a finding of any partnership or of any legally binding commitment as alleged by Elizabeth. The reasons I have come to that conclusion include:
(a)A lack of specificity of the details of the terms – the concepts of “giving up all assets”, and “all our financial needs during our lifetime” being met are extremely vague and incapable of enforcement.
(b)No certainty as to the parties to the agreement – was it Elizabeth, Peter, Huljich Properties Ltd, H & M Ltd and the three sons or was it some other combination of those parties? Why was it to be called the Huljich Brothers’ Partnership if it involved Elizabeth and Peter and the companies? On Elizabeth’s pleading she and her husband were also to be partners, but her case was it was her sons who were obliged to maintain her.
(c)If the “agreement” as pleaded refers to a partnership of the three Huljich Brothers the evidence does not support there was ever any such
partnership. Christopher and Michael, two of the alleged partners, deny any such partnership. The Court has no evidence from the alleged partner, Paul. No documentation has been produced to support the existence of a partnership. While the agreement is alleged to be oral, a partnership would have had accounts and financial statements. Nothing of that kind has been produced. The use of a joint bank account does not support a finding of partnership, particularly where there is a credible explanation for the Huljich Brothers’ bank account. The sons used the joint bank account to deposit the proceeds of sale of Best Corporation Ltd and made separate withdrawals from that account for their individual investments.
(d)The family relationship does not support an intention to create legal relations in this context. While in Fleming v Beevers the Court of Appeal rejected the notion of a presumption against such an intention, the Court did acknowledge that a transaction between family members will not necessarily support an inference of an intention to create legal relations.3 The Court confirmed it was necessary to focus on the facts in each case. The evidence and facts of the present case do not support an intention to create legal relations in the sense of the obligation Elizabeth seeks to rely on.
(e)In the correspondence with Michael and Christopher prior to the commencement of the proceedings neither Elizabeth nor her solicitors at the time referred to the 1986 agreement she now seeks to rely on.
(f)When Elizabeth first issued proceedings in 2014, she made no reference to the alleged 1986 agreement. It was not raised until December 2017 in the fifth amended statement of claim.
[54] I accept the position is as submitted on behalf of Christopher and Michael. They accept they have a moral obligation to care and provide for their mother as loving
3 Fleming v Beevers [1994] 1 NZLR 385 (CA).
and dutiful sons, which is what they have done in the past, but there is no binding legal obligation to do so.
[55] While the family may have discussed the future care and financial position of Elizabeth and her husband in the mid-1980s, there was no legally binding commitment made by Christopher (or the other two sons) as to the future care of their parents. The financial assistance which it is agreed was later provided by the sons was provided pursuant to the natural love and affection felt by the sons towards their parents, particularly Elizabeth after Peter’s death, and was provided by sons who were financially well able to provide such assistance, given the success of Best Corporation Ltd.
The “Loan Agreement” – the first cause of action against Christopher and Peter for breach of contract
[56] Elizabeth pleads that in about April 2009 Christopher told her that he and Peter needed financial assistance. She offered to assist by providing a banking facility secured over her rental townhouses. A term of the agreement was that $750,000 would be advanced to Christopher and Peter. She then pleads an express (or implied) term that once repaid, the funds were to be invested on her behalf. Elizabeth then alleges that under a second agreement the Kiwibank facility would be replaced by the Sovereign facility, but under the same arrangement. She says demand was made by the issue of the proceedings in October 2014, and that after taking account of the payment of $486,000 a balance of $264,000 remains owing.
[57]The relief claimed in the first cause of action is judgment in the sum of
$264,000 together with interest of $22,500 to May 2016 (a total of $286,500). Also, as noted, the Court of Appeal judgment reinstated a prayer for relief for loss of a chance to invest the loan funds alongside the first and second defendants.
[58]In her evidence-in-chief in support of the claim Elizabeth said:
17. To the best of my recollection, in approximately late April/early May 2009, I was at Christopher's home for dinner with my sister-in-law Sonja Milat. As I was about to leave Christopher's home after dinner, he told me in Sonja Milat's presence that, he and Peter were short of money and needed financial assistance. I said that, if they were that
short they could mortgage the townhouses. Christopher said that they would arrange it.
She later said that Christopher and Peter made the request for the loan. She was not aware of any discussions they may have had with Paul and Michael beforehand. Sonja Milat said she was at Christopher’s home when Christopher told Elizabeth that he and Peter were short of money and suggested that Elizabeth mortgage the town houses.
[59] Elizabeth’s evidence was that her understanding was the loan was short-term and once Christopher repaid the borrowing, Peter would use the facility to make investments in shares for her as he had done in the past.
[60] The defendants explain the background and the agreement relating to the loan facility in a different way. As noted above, the brothers had been very successful in a food business, Best Corporation Ltd. After the sale of the business in 1995 some of the proceeds of sale were deposited into the Huljich Brothers’ bank account. However, by 1999, the funds in the account had all been drawn and applied to other investments. The Huljich Brothers’ account was overdrawn. Christopher had maintained it, but it was close to its overdraft limit of $1 million. Between 2008 and 2009 Paul had regularly requested further money to fund his American business interests and in relation to litigation associated with his business in America. Christopher had to deposit funds into the account to maintain the overdraft within its limit.
[61] Christopher said that in April or May 2009 he told Elizabeth that Paul was regularly drawing money from the Huljich Brothers’ account which he could not afford to cover any longer. Christopher says that it was in response to that discussion that Elizabeth offered to provide a mortgage facility which each of the three sons would be able to draw on. Christopher said it was clear from his discussion with Elizabeth that Paul needed funds and that each brother would be responsible for repaying what they each borrowed. Christopher said he would discuss the matter with his brothers.
[62] After a telephone conference between the three brothers at which Elizabeth’s offer was discussed, it was agreed to proceed with the mortgage facility. Christopher says he then told Elizabeth that the three sons agreed to take up her offer of the use of the facility.
[63] Michael confirmed the telephone conference Christopher referred to took place and that it was made clear that all three brothers would be able to draw on the facility, and it was obvious to him they would each, individually, be responsible for repayments.
[64] Peter was clear in his evidence. He never approached Elizabeth to ask for funding and did not personally receive funding from the facility.
[65] Under cross-examination Elizabeth seemed at times to accept the defendants’ case that the agreed arrangement was for the facility to be made available for all three sons, with the son who borrowed the money being responsible for its repayment. Her cross-examination included the following exchanges:
Q. But in your discussion, and I suggest to you that it was with Christopher, you wanted all three brothers to be able to draw on the mortgage facility?
A. He said they were short of money, I wouldn’t know where that money went to. It – naturally they would draw on it, all of them, and I know
…
And:
Q.– if you wouldn’t mind. What I put to you, and I think you agreed, was that naturally all three brothers would be able to draw on the overdraft facility?
A.Well, Chris was in charge, yes, I suppose it would, whatever way they did it, yes.
Later:
Q. Yeah, so whoever needed the money would have to repay the money?
A. Yeah, well…
Q. Yes?
A. No, I don’t think so. No, it was Chris and Peter’s, they were in charge. They were the ones that lost the money, there is a lot, millions there, they lost it all.
[66] Although Christopher’s evidence regarding the background to the loan was not directly challenged Mr Little cross-examined Christopher about the loan on the basis
of a letter Christopher had written to Elizabeth on 3 March 2014. The focus of the cross-examination was on the suggestion that following repayment there was an obligation to make investments on Elizabeth’s behalf. In the letter of 3 March 2014, Christopher said:
(7)To confirm, the mortgage funds were to be used as a temporary bridging facility for the family to use (including Paul) and following repayment an opportunity for Peter to invest on your behalf for your benefit over the long-term.
[67] However, Christopher was not cross-examined on the immediately preceding paragraph of his letter where he set out his understanding of the loan agreement:
(6)I am also worried about the mortgage on your investment properties (1/42 Tarawera Terrace, 2/42 Tarawera Terrace, 3/42 Tarawera Terrace and 4/42 Tarawera Terrace). In mid-2009, the mortgage was taken out by you after consultation with Paul, Michael and I. It was first suggested by Paul after discussing potential liquidity concerns and then offered by you. It was not requested by me or Peter, however Peter did help you organise the mortgage with the bank as requested by you.
[68] Michael was not cross-examined about the discussions leading up to the facility being granted.
[69] On behalf of the plaintiff Mr Little sought to make something of the fact that Christopher had backdated a tenancy agreement with Sonja Milat, which was used to support the application to Kiwibank for the facility. Christopher accepted that he had backdated it to 1995. He explained the backdating on the basis that Sonja Milat had been a tenant at the property from that time. While the document should not have been backdated, Christopher is correct that Sonja Milat had been a tenant from around that time, so that there was no misrepresentation about the fact of the tenancy. Sonja signed the agreement. I regard the backdating as of little relevance to Elizabeth’s claim against Christopher.
[70] Next, it seems clear that Christopher suggested to his mother she should tell her lawyer that she was arranging the facility in order to borrow to invest in shares. While borrowing to invest in itself is a strange thing for a then 78-79 year old to be doing, it is obvious that Christopher did not want the solicitor to know the true purpose of the borrowing, which was to provide a finance facility for her sons (who had just
over 10 years earlier sold a business for $80 million). Christopher explained this on the basis he was “embarrassed”. While the embarrassment is understandable, the fact he told his mother to mislead her lawyer as to the purpose of the facility does not reflect well on Christopher.
[71] Despite that, on balance I accept Christopher’s evidence and the defendants’ case that Elizabeth was aware that the facility was to be used by all three sons and that she made it available on the basis and in the expectation that whoever borrowed funds under the facility would repay the funds. There was no agreement between Elizabeth and Christopher that he and Peter would be personally liable for the repayment of the facility.
[72]I have reached those conclusions for the following reasons:
(a)The logic of the case – by early 2009 the Huljich Brothers’ bank account had been overdrawn for a number of years. The bank accounts confirm that. During 2008/early 2009 Paul continued to seek substantial sums and he was threatened with action by his own lawyers in America following an unsuccessful court case. That is also confirmed by the documents. Between April 2008 and March 2009 Paul requested Christopher to transfer $300,000 and USD $252,500 for his benefit. While Christopher and Michael were also in tight liquidity situations, there was no reason why Christopher would accept any liability to Elizabeth to repay moneys that Paul might borrow under the facility. It was Paul’s need for funds which had caused issues with the Huljich Brothers’ bank account and the need for the facility.
(b)Related to that, a number of separate cheques were drawn on the facility account in favour of Paul between October 2009 and January 2010. The cheques were filled out by Christopher and Peter. If Christopher was solely responsible to repay the facility why would he incur a further obligation to Elizabeth for Paul’s borrowing when it was Paul’s use of the Huljich Brothers’ account which was a major driver of the need for the facility in the first place?
(c)Elizabeth was aware of Paul’s position. She clearly considered that Paul had not been treated fairly by his brothers. That is apparent from her later letter to Michael of 11 May 2012, and her lawyer’s letter to Christopher of the same date. Those communications, together with the proceedings subsequently issued as an application for summary judgment against Christopher solely suggest an ex post facto rationalisation to support Paul by initially pursuing the claim against Christopher solely (and then later Michael and Peter).
(d)As noted, there was no joint liability to repay as between the brothers. There was no partnership between them. After selling their interests in Best Corporation Ltd, the brothers had then made separate financial investments and had separate commitments. They did not carry on business as a partnership. Paul made his life in America, Michael in Australia and Christopher remained in New Zealand. Further, as noted, Christopher and Michael deny any partnership and there is no documentary evidence of such a partnership. The money was not borrowed by a partnership, but by the sons individually.
(e)While Elizabeth places emphasis on the fact Christopher (assisted by Peter) arranged the facility, it made sense for them to do so. They were the family members on the ground in Auckland. Paul was in America and Michael in Sydney. For a number of years Christopher had administered the Huljich Brothers’ bank account. Christopher effectively acted as agent for his brothers in dealing with Elizabeth about the facility. On his evidence, which I accept on the point, Elizabeth knew he was acting in that capacity. There would have been no need for the telephone conference with his brothers if Christopher was assuming sole responsibility for repayment of the facility.
(f)I discount the evidence of Sonja Milat. It was very general and to be fair to her, she conceded she is a close friend of the plaintiff and had discussed her evidence with her. She was trying to help Elizabeth. I note she went so far as to say that Christopher had suggested to
Elizabeth that she could mortgage the townhouses. Elizabeth did not go that far in her initial evidence. Her evidence was that she volunteered the offer to mortgage the townhouse. While Sonja did not concede she was confused, she presented as frail in the witness box. I do not accept her recollection of the events is accurate.
(g)Elizabeth’s allegation about the terms of the agreement have changed significantly over time. In the first statement of claim she alleged an oral agreement that Christopher would borrow the $700,000 (later
$750,000) which she would advance to him and that he would repay it on demand. She also swore an affidavit at that time and confirmed that it was never part of her discussions with Christopher that anyone else would be responsible for the repayment of the facility and that she had never made any loan agreements with other family members. However, in her evidence to this Court she now claims it was part of the agreement Peter and Michael were also responsible for the loan. The two positions, both of which are made on oath, are not able to be reconciled.
(h)Under cross-examination by Mr McLellan QC Elizabeth was equivocal in her answers and appeared to accept that whoever drew the money would have to repay it until she realised that she may have made a concession which did not fit her case. She then changed her response.
(i)Although Paul was not a witness, the fact he agreed, in fact insisted, that the sale proceeds of the Kings Row apartment at Paradise Waters in Australia (“Kings Row apartment”) of which he was a joint owner were to be applied to repay the loan is consistent with him acknowledging a responsibility to repay the facility borrowings. It is also consistent with Christopher’s and Michael’s evidence regarding the teleconference the brothers had before the facility was drawn.
(j)Christopher had very limited involvement when the Kiwibank facility was replaced by the Sovereign facility. In an earlier hearing Elizabeth’s
then senior counsel conceded the claim under this head was in relation to the “second advance” and that the first advance could no longer be relied on.
[73] I find that Elizabeth agreed to provide the Kiwibank (and later Sovereign) facility on the basis it was to be for the benefit of, and used by all three sons on the understanding (which Elizabeth shared) that they were to be individually responsible to repay the funds drawn by them.
[74] If that was the finding of the Court, the plaintiffs’ expert Ms Greenwood confirmed that she “more or less” agreed with the defendants’ expert, Mr Graham that Christopher and Michael have repaid all borrowing attributed to them, but Paul had not, and that Paul was responsible for the outstanding sum owing on the Sovereign account, including interest.
[75]Mr Graham’s summary amended calculation produced by consent is:
2009-2016 Chris Paul Michael Elizabeth Receipts Payments 450,562.84
(610,144.10
441,848.81
(183,037.50)
95,992.55
(169,425.00)
(988,404.20)
962,606.60
Nett capital transactions
payable/(receivable)
(159,581.26)
258,811.31
(73,432.45)
(25,797.60)
Share of interest payable/(receivable) 42,705.74
167,686.11
32,117.47
(242,509.33)
Nett benefit Received/
(contribution claimable)
(116,875.52)
426,497.42
(41,314.98)
(268,306.93)
[76] The summary shows that both Christopher and Michael have in fact repaid more of the facility than they borrowed. The balance owing to Elizabeth of $268,306 is owed by Paul.
[77]Ms Greenwood’s evidence was:
8.I agree with Mr Graham's calculations (more or less) if his assumptions are correct.
9.Those key assumptions are:
a.That the Kiwibank facility was for the benefit of all three Huljich brothers (both individually and as partners in the Huljich Brothers Partnership) and that all three brothers, including Paul Huljich knew and accepted that the funds that they received were sourced from a loan provided by Mrs Huljich for which they had liability.
I understand that Mrs Huljich's evidence is that she agreed to lend the money to Chris. If this is accepted by the Court, then any liability of Paul Huljich (if there is a liability) may be to parties other than Mrs Huljich. Similarly, Chris Huljich may be liable to Mrs Huljich notwithstanding that he may or may not have a claim on his brother. Mr Graham's calculations proceed on the basis that all the brothers received their benefit from the Kiwibank facility.
b.That the proceeds from the sale of the Kings Row property should be attributed equally to each of the brothers (i.e. 1/3, 1/3, 1/3) and not on the basis of some other split, including their partnership proportionality.
c.That, because the proceeds from the sale of the Kings Row property (allocated by Mr Graham 1/3/ 1/3/1/3 as between the brothers) resulted in Chris and Michael paying more than they were said to have borrowed, Paul Huljich should incur an interest liability to Chris and Michael for the period from October 2014 to August 2016. Mr Graham has included an amount of interest of approximately $210,000 as due on Chris and Michael's overpayments in his calculation of the
$376,846.93 share of interest payable due by Paul.
d.That expenses, paid from the Huljich Brothers bank account (using funds provided·to the partnership by the Kiwibank facility) are allocated between the partners in the 42.5%, 42.5% and 15% percentages. These amounts are immaterial but still assume Mrs Huljich lent the money to the partnership and that the partners knew this.
[78] The factual findings above confirm that there was no partnership and that the brothers were individually liable to Elizabeth to repay the amounts they borrowed using the facility. That answers Ms Greenwood’s first point. The other main issue in relation to Mr Graham’s assumptions relates to the equal attribution of the proceeds of sale of the Kings Row apartment amongst all three brothers. Mr Little suggested the sale proceeds should be divided in accordance with the shares in the “partnership” of
42.5 per cent each for Christopher and Paul and 15 per cent for Michael.
[79] I am not able to accept that submission for a number of reasons. First, for the reasons given there is no Huljich Brothers’ partnership. The interests of 42.5 per cent for Christopher and Paul with 15 per cent for Michael were the shares the brothers held in Best Corporation Ltd. They were no doubt paid out in those proportions when their interests in the company were sold. But the holding of shares in those proportions in a company does not create or constitute a partnership at that time or later. As noted, there is no evidence of a partnership between the brothers, let alone in that ratio.
[80] The only direct evidence of the ownership of the Kings Row apartment was Christopher’s evidence that the unit was held in his sole name but that it was owned one-third each by the brothers. It was not a business asset. It was not rented but rather it was a holiday home which the parties all used, albeit infrequently, and on the basis that Michael, being the brother living in Australia, took care of the outgoings on it. Michael confirmed the proceeds of sale went to repay the mortgage facility.
[81] The email correspondence between Christopher and Paul leading up to the sale of the property does not suggest Paul had a 42.5 per cent share in the property. Christopher had suggested the moneys be applied to repayment of the Huljich Brothers’ overdraft account but Paul insisted it be applied to repayment of the then Sovereign facility. Of course by that time Paul had an outstanding balance in relation to the moneys applied to his benefit from the Sovereign facility of approximately
$420,810. It was to his benefit to reduce that sum by as much as possible, but there is no evidence that at the time he ever suggested he was entitled to a credit of 42.5 per cent of the sale proceeds.
[82] In summary on this aspect of the first cause of action, the plaintiff fails to establish there was a contract with Christopher and Peter which included terms that Christopher and Peter would be liable to repay the Kiwibank (and later the Sovereign facility) on demand. Rather, I find that Christopher, on behalf of his brothers (Peter was not involved) agreed with Elizabeth that she would provide a banking facility to her sons for their individual use on the terms that the son for whose benefits the payments were made would be liable to repay it. The expert accountants, Ms Greenwood and Mr Graham, agree that on that basis, Christopher and Michael have repaid more than they borrowed and the balance due under the facility is owed by Paul.
[83] The remaining aspect of the first cause of action is the claim it was a term of the facility arrangements that the defendants would make investments on Elizabeth’s behalf when the loan was repaid.
[84] Underlying this claim is Elizabeth’s feeling that she has been abandoned by Christopher and Peter and that she missed out on the opportunity to invest in Pushpay in particular which a number of the other members of the family and their friends invested in at an early stage. Those that did have made substantial sums of money as a result. Mr Hussey’s evidence confirms the substantial returns made on the investments.
[85] Elizabeth claims that Christopher, and Peter in particular, had an obligation to invest on her behalf. Elizabeth says that it was part of the agreement when she made the Kiwibank loan facility available that when the moneys were repaid the defendants would make investments on her behalf.
[86] Peter accepted that from about 2002 he agreed to help Elizabeth with her investments at her request. He helped her set up a share trading account and on each occasion he saw a potential investment opportunity he would raise it with her and discuss it with her. If she agreed he would arrange it with her brokers. Elizabeth had accounts with Direct Broking in New Zealand and Citi Smith Barney in Australia. But Elizabeth was in control of her share portfolio and all withdrawals were paid into her personal bank account with ANZ. Peter said his assistance with regard to Elizabeth’s investments largely ceased in 2009 when Elizabeth cashed up most of her portfolio. Peter denied that he had encouraged Elizabeth to sell her shares to make gifts to him and other grandchildren.
[87] Perhaps the high point of Elizabeth’s case is that Christopher acknowledges he told Elizabeth to tell her solicitors that she was borrowing the money for investments and in his letter of 3 March 2014 in response to her letter of 20 January 2014 Christopher said:
(7)To confirm, the mortgage funds were to be used as a temporary bridging facility for the family to use (including Paul) and following repayment an opportunity for Peter to invest on your behalf for your benefit over the long-term.
[88] But even that concession by Christopher does not describe a binding, contractual obligation. The phrase “an opportunity … to invest” does not support such a commitment.
[89] Further, any investment opportunity was to arise when the drawings were repaid. The drawings under the facility have never been repaid. While the Kiwibank facility was refinanced $264,000 remains owing. To the extent Elizabeth’s case is that the moneys were to be invested when the facility was repaid, the pre-condition was never met.
[90] Next, even after the major repayment of $486,000 from the sale of the Australian apartment reduced the outgoings to around $286,000 in September 2014, Elizabeth did not suggest or request that that sum be redrawn and be invested on her behalf. Rather she issued proceedings to recover the balance.
[91] Then, as Christopher noted at a later point in his letter, he and Peter would have been happy for Elizabeth to invest with them if Paul met his obligation to repay his borrowing:
(11)Given Paul has utilised $729,000.00 of the outstanding mortgage, can I suggest you ask him to repay this sum immediately, along with
$198,793.84 being the interest costs I have incurred to date on your behalf. On receipt of the $198,793.84 I will then pay the remaining mortgage balance of approximately $3,134.20, which will bring the mortgage account to a nil balance. We are more than happy for you to invest alongside us once you have recovered these outstanding funds from Paul. If you do not wish to invest these funds, can I suggest the mortgage is repaid and the account closed.
(emphasis added).
[92] There are further issues with Elizabeth’s claim in this regard. Insofar as the investment in Pushpay is concerned, Mr Hussey’s evidence is premised on the basis that investments would have been made in October 2014. But by that date the relationship between the parties had broken down. It is unrealistic to suggest Elizabeth could have had any expectation that Christopher and Peter would make investments on her behalf at that stage.
[93] The following factors also count against a finding of a binding contractual obligation to invest.
(a)Christopher denies there was ever any agreement the funds would be invested on Elizabeth’s behalf once repaid. Christopher’s explanation of the circumstances leading to the establishment of the facility is supported by Michael. Michael was not cross-examined on the issue.
(b)The pleading is of an “implied” or express term that once the facility was repaid the defendants would make investments on Elizabeth’s behalf. There is no basis for such an unusual term to be implied.
(c)Elizabeth’s evidence was equivocal and general on the issue of an express term. At best it seems Elizabeth may have “thought” that the defendants might invest on her behalf. Elizabeth’s cross-examination disclosed the following:
Q.And that at the – when the monies were repaid to you, your sons and Peter were obliged to invest the monies on your behalf, is that right?
A. That was at the time, yes.
Q.But you say that that was part of the agreement that you reached in your discussion with Chris back in 2009?
A. That’s what I thought they would do, yes.
Q.That was what you thought they would do, do you claim that it was a term of your agreement with Chris that he would invest the monies upon repayment to you?
A.Yes, well that’s why I did the mortgage at the time, so I felt that if they were to invest, and that’s what Mr Connell put on the agreement, that they would then invest the money for me.
Q. That was what you thought might happen?
A Well, that was supposed to happen, yeah.
…
Q.Well, if your situation was different, for example, if you needed the money for renovations or whatever it might be, the boys weren’t – wouldn’t have been obliged to invest the monies, would they?
A.We didn’t get into all that type of detail, it was a – it was – they wanted a mortgage, I gave it to them. It was family and that’s how it was and they were going to look after it and Chris told me not to worry about anything and I didn’t, it was up to them.
Q.So you thought that at the end of the term when the money was repaid, they might invest the monies for you?
A. Well, that was what I was given to understand, that they would invest for me, yes –
(d)Next, in May 2012 Elizabeth wrote to Christopher and told him to stop making the interest payments. She made no reference at the time to her present position that he (and Peter and perhaps Michael) were liable for repayment of the principal or that there was any obligation to make investments on her behalf.
(e)In the letter to Michael of 20 January 2014 to Michael, Elizabeth said that Christopher had “told her to tell” Mr Connell that she would be investing the money with Peter. Importantly, though, Elizabeth does not say that Christopher and/or Peter were under a duty or obligation to make investments for her. In context, an available inference is that she did not regard that what Christopher had told her to tell Mr Connell as correct. Christopher accepts he told her to tell Mr Connell that she would use the facility to make investments.
[94] The general allegation that Christopher and Peter had a binding obligation to invest on Elizabeth’s behalf is not supported by the evidence. It cannot be sustained, quite apart from the difficulty that the only relief pleaded is a loss of chance which, as the Court of Appeal said, was unusual and apparently contradicted the claim for repayment.
[95] The first cause of action must fail. Although the claim against Peter was only raised on 21 August 2015 it is unnecessary to consider the limitation issue raised on his behalf by Ms Cooper QC in relation to the claim against him as there is no credible evidence that Peter had any liability in relation to the facility.
Second cause of action – against first and second defendants in fraud – deceit
[96] In the second cause of action Elizabeth alleges that Christopher and Peter arranged for a number of faxes purporting to be from her to be sent to Kiwibank between January 2009 and June 2010 instructing Kiwibank to transfer sums of money in New Zealand or Australian dollars from the Kiwibank accounts. She also alleges that Christopher and Peter encouraged her to sign cheques in blank which led to moneys being drawn from the Kiwibank account. Elizabeth seeks to recover New Zealand $150,000 and AUD $50,000.
[97] The defendants accept that Peter prepared a facsimile letterhead for Elizabeth and that, apart from the first facsimile letter which Elizabeth signed, they used an electronic signature which she had previously provided to Peter to facilitate the transfers. They say they did so with Elizabeth’s knowledge. There was no cheque book for the Kiwibank facility when the account was first opened so the initial payments had to be authorised by way of the faxed letters. Christopher says he told Elizabeth about the first transfer and that she signed the letter of authority and was happy for them to communicate with the bank in that way.
[98] Although Elizabeth pleads that all the facsimile instructions were not authorised by her, she accepted in the following exchange that at least the first such facsimile letter of authority was actually signed by her.
Q.That signature on 1633, [being a fax letter dated 3 June 2009 to the bank authorising the transfer of $195,000 from the Kiwibank to the Huljich Brothers’ account] Ms Huljich, is your own handwriting –
A. Yes.
Q. – made on that letter –
A. Yes.
Q. – by you personally?
A.Yes, that is my signature certainly. The others are perfect there with the stamp.
[99] The defendants also accept that they asked Elizabeth to sign some cheques in blank. When Elizabeth received the chequebook she brought it around to
Christopher’s house and gave it to him. He then wrote out some cheques for her to sign, including one to pay her solicitor’s invoice for registering the mortgage and also to arrange mortgage guarantee insurance, but he also asked her to sign some cheques in blank so he would not have to go back to her when a further payment was required. Christopher said Elizabeth agreed with that arrangement. Elizabeth accepted that she signed the cheques in blank and left it to Christopher or Peter to fill out the details.
[100] Christopher says that Elizabeth was aware of the activity in the account. He noted that Elizabeth received physical copies of the bank statements at her address and that when she brought the statements to him the envelopes had been opened.
[101] Peter’s evidence was to the same effect as Christopher’s as to the reasons for the facsimile instructions to the bank.
[102] In Amaltal Corp Ltd v Maruha Corp the Court of Appeal confirmed that the elements of the tort of deceit involve:4
·a false representation as to a past or existing fact;
·which the defendant knew to be untrue, or which the defendant had no belief in its truth or was reckless as to its truth;
·with the intention that the claimant should have acted on the representation; and
·action by the claimant in reliance on the representation; and
·the claimant must suffer damages as a result of relying upon the representation.
[103] There are a number of difficulties with Elizabeth’s claim under this head. First, at least in terms of the faxed letters, the representation was to the bank rather than to Elizabeth. To the extent it was a representation that it was a direction from Elizabeth,
4 Amaltal Corp Ltd v Maruha Corp [2007] 1 NZLR 608 (CA).
she accepted that the first facsimile letter was signed by her. She also accepted that she signed the cheques in blank. Mr Little sought to make something of the fact the telephone number on the instructions was incorrect. I accept Peter’s evidence it was a mistake. Only one numeral was incorrect.
[104] However, more fundamentally, neither the bank nor Elizabeth has sustained a loss in relation to the sums that Elizabeth claims as a consequence of the use of the faxed letters and the pre-signed cheques. The claim relates to payments of $150,000 on 13 July 2009 to a company associated with Christopher, Peter and Michael and a further sum of AUD $50,000 (NZD $62,569.94) on 23 July 2009. The AUD $50,000 was paid to Christopher’s son Jason. The transactions are not in dispute. In fact, Christopher accepts that he received the benefit of an additional sum of $50,000 on 24 July 2009.
[105] The clearest explanation concerning the operation of the various accounts relating to the Kiwibank facility is to be found in Ms Greenwood’s evidence. As she confirmed, the facility was broken down into four sub-accounts, 00, 01, 02 and 03. The 00 sub-account was referred to as the “Now” account and was an operating sub- account. The others were sub-loan facilities. Funds were drawn from the sub-accounts and transferred to the Now account from where they were dispersed to third parties.
[106]Ms Greenwood’s evidence was:
Chris Huljich has identified the three payments that were made to Huljich Ltd and Jason Huljich from the Kiwibank facility. The Kiwibank bank statements record these three payments from the facility as follows:
(a)$150,000 transferred on 13 July 2009. This payment is identified by Chris Huljich as being made to him.
(b)$62,569.94 narrated as TT which usually means telegraphic transfer offshore on 23 July 2009. This payment was identified by Chris Huljich as being made to his son Jason Huljich.
(c)$50,000 transferred on 24 July 2009. This payment is identified by Chris Huljich as being made to him.
[107] Ms Greenwood then went on to note that Christopher Huljich identified a deposit of $265,000 made to the Kiwibank facility on 11 September 2009 from Huljich Ltd. The Kiwibank statements record the receipt as a direct credit from Huljich Ltd.
She agrees that the above drawings and the repayment of $265,000 were made. On her calculation, taking into account the moneys applied to the benefit of Huljich Brothers’ account she considers that the interest and fees attributed to Christopher Huljich would have been in the order of $2,984.15. She concludes it likely the repayment of $265,000 by Christopher Huljich factored in his estimate of his share of the interest cost. In fact the balance was $2,430.06. The difference of $555 (approximately) is de minimis.
[108] In short the amounts claimed under this cause of action were repaid to the facility in September 2009. Quite apart from the credible explanation offered by Christopher and Peter as to the reasons for the use of the facsimile authorisations involving Elizabeth’s electronic signature and for asking Elizabeth to pre-sign cheques in blank, Elizabeth has suffered no loss under this head. The plaintiff’s second cause of action must fail.
[109] The claims would, in any event, be barred pursuant to the provisions of the Limitation Act 1950. As a claim in tort, the cause of action accrues when loss is first suffered.5 Any loss must have arisen at the latest by 23 July 2009, being the date the last payment for which relief is sought was made. The claim was not pleaded until the third amended statement of claim on 4 March 2016, so is out of time. Elizabeth cannot rely on dishonest concealment, as there is no evidence of concealment (or of any attempt at concealment). Elizabeth received the bank records at her address. She knew the withdrawals were being made from the Kiwibank facility.
[110] Mr Little sought to answer the limitation argument raised by Ms Cooper by generally referring to Murray v Morel & Co Ltd.6 He submitted that Parliament had “endorsed the discoverability rule” from that case in enacting the Limitation Act 2010. The case does not assist the plaintiff. The Limitation Act 1950 applies.7 Further, as Tipping J observed in Murray v Morel & Co Ltd:
[34] In the end the judge must assess whether, in such a case, the plaintiff has presented enough by way of pleadings and particulars (and evidence, if the plaintiff elects to produce evidence), to persuade the court that what might
5 Matai Industries Ltd v Jensen [1989] 1 NZLR 525 (HC) at 533.
6 Murray v Morel & Co Ltd [2007] NZSC 27, [2007] 3 NZLR 721.
7 Limitation Act 2010, s 61; Limitation Act 1950, s 2A.
have looked like a claim which was clearly subject to a statute bar is not, after all, to be viewed in that way, because of a fairly arguable claim for extension or postponement. If the plaintiff demonstrates that to be so, the court cannot say that the plaintiff’s claim is frivolous, vexatious or an abuse of process. The plaintiff must, however, produce something by way of pleadings, particulars and, if so advised, evidence, in order to give an air of reality to the contention that the plaintiff is entitled to an extension or postponement which will bring the claim back within time. A plaintiff cannot, as in this case, simply make an unsupported assertion in submissions that s 28 applies. A pleading of fraud should, of course, be made only if it is responsible to do so.
[111] While the comments were made in the context of a strike-out application they are generally applicable. The plaintiff has failed to produce anything by way of pleadings, particulars or evidence to give the required “air of reality” to the contention an extension to the time bar should apply. The claim is statute barred.
Third cause of action – Fair Trading Act 1986
[112]The third cause of action concerning the Fair Trading Act has been abandoned.
Fourth Cause of action – against all defendants – breach of contract
[113] The fourth cause of action is a further cause of action for breach of contract based on the facility agreement but in this cause of action the claim is against Michael as well as against Christopher and Peter. The pleading includes the following:
If the Court finds that each of the brothers are under an obligation to repay any funds received by that particular brother, then the third defendant [Michael] must also be liable to repay any particular funds that he has received.
[114] There is then an allegation that Michael has received $121,632.29. No further details or particulars are provided.
[115] Judgment is sought against all three defendants in the sum of $264,000 or a proportionate pro rata factor of that sum.
[116] For the reasons given above, while there was an obligation on each of the three brothers, including Michael, to repay the funds borrowed by them and Michael did draw down and use the facility, the evidence from both forensic accountants confirms that, following the payment of the proceeds of sale from the Kings Row apartment
into the account, the attribution of Michael’s one-third share of those proceeds more than repaid the borrowings he had undertaken from the facility. There remains nothing further owing by Michael under the facility.
[117] For the reasons given previously, Christopher has also repaid his borrowing and Peter has no liability under the facility.
[118]This cause of action fails against all three defendants.
[119] Further, as Ms Cooper submitted, this cause of action would also be time- barred. The last use of the facility pleaded occurred in January 2010. This cause of action was pleaded for the first time in the fourth amended statement of claim on 29 May 2017, so is more than six years out of time.
Fifth cause of action against all three defendants – moneys had and received
[120] The fifth cause of action is admirably brief. The plaintiff simply repeats the previous paragraphs of the statement of claim and then pleads that the defendants had no right to retain and/or had improperly disposed of funds received to their benefit from the plaintiff. By way of relief the plaintiff seeks judgment in the sum of $264,000 against the defendants jointly and severally.
[121] The claim can also be dealt with briefly. For the reasons given above the funds received by Christopher and Michael under the facilities have been repaid. To the extent there was an obligation to repay the moneys had and received by them by operation of the facility, the obligation has been met.
[122]There is no evidence that Peter received any funds personally from the facility.
[123] The cause of action cannot be sustained against any of the defendants and must be dismissed.
[124] Like the fourth cause of action it would also be barred as out of time in any event. The last of the borrowing attributed to any of them was to Christopher in
January 2010. The claim was first raised in the fourth amended statement of claim on 29 May 2017.
Sixth cause of action – against Christopher – breach of fiduciary duty as agent
[125] The sixth cause of action is a difficult claim for the plaintiff. Mr Little did not directly address the substance of it in his opening or closing submissions. The claim is deficient in a number of respects. Various allegations are raised which do not logically lead to the ultimate relief claimed.
[126] The plaintiff first says that she relied on Christopher entirely in respect of property management of the rental properties at 42 Tarawera Terrace after her husband’s death. But there is no allegation of loss arising from that pleading. Next, there is then a repetition of the claim that Christopher had agreed in 1986 (with other members of the Huljich Brothers’ partnership) to support the plaintiff in her financial needs during her lifetime.
[127] Then there are general allegations of various fiduciary duties, to account, not to act in a position of conflict, not to profit from his position and not to abuse the plaintiff’s trust and confidence in him.
[128]That is followed by the claims that Christopher breached the duty by:
(a)fraudulently misrepresenting that the full amount of the Sovereign loan was owing by Paul;
(b)fraudulently misrepresenting that part of the $264,000 of the Sovereign loan was owing by Paul;
(c)making unauthorised transactions from the Kiwibank account (the
$150,000, $62,569 (AUD $50,000) and $50,000 discussed above);
(d)failing to account for transactions using the bank account;
(e)acting in conflict with his fiduciary duty to her by using the Kiwibank account for his own benefit;
(f)abusing the trust and confidence that she, as his elderly grandmother, had in him (although that must be clearly wrong given the claim is against Christopher);
(g)failing to repay the $264,000;
(h)failing to meet continuing obligations under the 1986 agreement.
[129] The relief ultimately claimed is $264,000 for repayment of the Sovereign loan; damages for mental and emotional distress of $250,000 and exemplary damages in the amount of $50,000.
[130] The evidence falls significantly short of establishing any liability as a fiduciary in the ways alleged or of breach in the ways alleged.
[131] As noted the pleading initially appears to hark back to the earlier general allegation of some form of legal commitment in 1986 to provide lifetime support for Elizabeth and her husband. But no loss is pleaded as a consequence of such an alleged breach.
[132] Further, I have already rejected the plaintiff’s case that there was any binding contract or enforceable obligation that Christopher and his brothers would care for Elizabeth for life. Recasting the obligation as a fiduciary duty does not improve the plaintiff’s case. The evidence falls well short of establishing any such duty.
[133] Similarly, a number of the allegations repeat allegations raised in the previous contractual causes of action. There is nothing in those allegations based on contractual arrangements (which have been rejected) to support the existence of a fiduciary duty, let alone a breach of such duty.
[134] The allegation of misrepresentation as to Paul’s obligations arises from a spreadsheet Christopher had prepared to show his mother what he said Paul’s position
was regarding the use of the Kiwibank facility. The spreadsheet was designed to explain that Paul had taken more money than he had repaid. Even if the spreadsheet was established to be incorrect, no loss follows from that. Elizabeth did not rely on it. She still does not accept that Paul owes anything.
[135] Further, in any event, the last transactions which led to the amount now claimed of $264,000 had been made prior to Christopher’s production of the schedule on 24 May 2012.
[136]Next, as noted above, the transactions ($150,000, AUD $50,000 and NZD
$50,000) were repaid. To the extent it is suggested Christopher somehow acted inappropriately by drawing from the Kiwibank facility generally, and used the bank account for his benefit, that cannot stand alongside Elizabeth’s claim that he asked her to establish the facility for his use. On any view of it, Elizabeth knew the facility was to be used by her sons.
[137] As to the failure to repay or account the expert accountants both agreed that Christopher has more than repaid the money he drew from the account.
[138]The claim for the $264,000 claimed cannot succeed.
The relief sought for emotional and mental distress
[139] Elizabeth also claims damages for emotional and mental distress and for exemplary damages under this cause of action and under the next, seventh cause of action. The pleading to support the claims is brief. It is that “as a result of the first defendant’s breach of fiduciary duty the plaintiff suffers substantial mental and emotional distress”.
[140] Evidence was lead from Dr Srzich of the plaintiff’s condition. The doctor confirmed that when he met Elizabeth in October 2017 she presented with symptoms of a major depressive episode that had developed in the context of the stress related to the court action. In his opinion the episode was probably triggered by several related factors. Elizabeth was distressed by what she saw as her sons’ and grandson’s mistreatment of her and how she believed they had misappropriated money and the
rift that it caused. Further, the court proceedings that she had brought and continued over the previous four years were a significant stress in themselves.
[141] There are several difficulties with Elizabeth’s claim for emotional and mental distress. Damages for emotional and mental distress are not available for breach of contract unless an object of the contract is to avoid such distress.8 As noted, the claims advanced, while pursued under a fiduciary duty heading, are effectively a repetition of the breach of contract claims.
[142] More fundamentally, for the reasons set out above Elizabeth’s perception that Christopher and Peter have breached any obligations to her is misconceived. To the extent that that perception has caused her to suffer emotional and mental distress from depression it is, regrettably, self-inflicted. It is not something that the defendants bear responsibility for as a matter of fact or law.
[143] As for the claim for exemplary damages, such damages are not available for breach of contract.9 While they may be available for breach of fiduciary duty, no such breach has been established.
[144] Next, insofar as the proceedings themselves have contributed to the stress it has to be observed that Elizabeth has chosen to bring these proceedings and indeed she sought publicity concerning the proceedings. Elizabeth accepted that she had approached the news media shortly after issuing the proceedings and had been interviewed and photographed for an item in the New Zealand Weekend Herald of 8 November 2014.
[145] It was Elizabeth’s decision to bring the proceedings when it may not have been necessary to do so. Prior to the issue of proceedings Christopher had, in March 2014, offered to meet with Elizabeth or her lawyer to discuss her concerns, had confirmed that he would pay for an audit, and had suggested an arbitration.
8 Bloxham v Robinson (1996) 7 TCLR 122 (CA).
9 Paper Reclaim Ltd v Aotearoa International Ltd [2006] 3 NZLR 188 (CA) at [180]–[183].
[146] Further, it is relevant that when the proceedings were initially issued Christopher almost immediately made an open offer to pay the moneys claimed at the time (without an admission of liability, and reserving his right to seek repayment from others). That offer was made on 17 November 2014. Further open offers have been repeated on several occasions throughout the course of the proceedings.10
[147] To the extent the delay in resolving the proceedings may have contributed to stress is relevant, the procedural history of this case discloses that the responsibility for the delay in the conclusion of the proceedings lies with Elizabeth. During the course of the proceeding she has changed advisers on several occasions and has failed to comply with directions of the Court.
[148] The claims for damages for emotional and mental distress associated with the proceedings or for exemplary damages cannot succeed.
Seventh cause of action against Peter – breach of fiduciary duty
[149] The seventh cause of action focuses on Peter and alleges that he was in a fiduciary relationship with the plaintiff as her financial adviser, manager and agent in respect of her share portfolio and property manager. The relief claimed is the
$264,000.
[150] The allegations made against Christopher in the sixth cause of action are effectively repeated with the addition of a pleading that Peter abused Elizabeth’s trust and confidence by:
(a)ceasing to make investments on her behalf;
(b)not providing accounts to her of investments he had made;
(c)encouraging her to make gifts to grandchildren;
10 On 28 June 2017, and on 12 and 26 November 2018.
(d)requiring her to sell her Just Water Ltd shares (which is dealt with below).
[151] Again Elizabeth’s evidence about the obligations was general and vague. By contrast, Peter’s evidence was to the point and had an air of reality. He said that Elizabeth controlled and made the final approval of her investments (on his recommendation). That evidence was not challenged by cross-examination. Peter was not directly challenged on his evidence that Elizabeth made decisions about investing. What was established in his cross-examination was that in 2008 when the Just Water Ltd shares were sold he was still assisting his grandmother but the relevant statements all went to her address. Further, it is clear from Elizabeth’s financial statements from March 2007 to March 2011 that a full reporting of her investments was available to her. I accept Peter’s evidence on this issue. I also accept his evidence that Elizabeth decided to make the gifts to grandchildren (that she now complains of) without any pressure from him.
[152] Finally, there is no evidence Peter received any of the funds from the Kiwibank or Sovereign facility. There is no causal connection between Elizabeth’s general allegation against Peter under this head and the relief claimed of $264,000.
[153] The claims for emotional and mental distress and exemplary damages fail for the reasons given above.
[154]The claims cannot succeed and must be dismissed.
Eighth cause of action – breach of agency agreement against Christopher – in relation to the renovations
[155] The eighth cause of action arises out of the renovations to Elizabeth’s home in 2007/08, and particularly the sale of her shares in Just Water Ltd in June 2008 to realise the $150,000 which was ultimately paid through the Huljich Brothers’ bank account to Christopher. Elizabeth alleges that Christopher, as her agent in relation to the renovations, breached his agency duties by claiming she owed him $150,000.
[156] Elizabeth said that, in early 2007 she approached Christopher to have her home renovated on the understanding her sons would pay for the renovations as they had with the previous renovations in 1995. She said that Christopher told her that he and Peter were short of money and that she should use her money from shares invested to pay for the alterations. She said that Christopher and Peter sold her shares to fund the
$350,000 for the alterations. The renovations were completed by the end of 2007.
[157] Elizabeth also said that Christopher agreed to manage the renovation project and to produce invoices for payment. When he produced such invoices he would help her write out a cheque either to pay the invoices or to reimburse him where he had paid them. Elizabeth also said that specific details of the invoices were to be fully scheduled in summary sheets prepared by Christopher for her benefit. She then said that all the work was fully carried out by the end of 2007 so she was very surprised when, in June 2008, some seven months later, Peter telephoned her to tell her that Christopher wanted to be reimbursed for $150,000. Elizabeth said she was concerned that Peter effectively required her to sell her Just Water Ltd shares. She said she felt it was very wrong because no invoices or other documentation had been given to her regarding the $150,000 Peter demanded, but she acceded to the request. But then later, in about 2012 she became suspicious and initially raised the matter in her correspondence with Michael.
[158] Christopher’s (and Peter’s) evidence is that Elizabeth had not asked Christopher and his brothers to pay for the renovations. Elizabeth funded about
$200,000 of the renovations costs from her own funds from the sale of shares before the brothers started to lend her money to complete the renovations. Christopher agrees that he helped Elizabeth organise the renovations by keeping track of expenses, dealing with contractors and making decisions about the furniture and the like. Christopher said that when it became clear more money was to be required than Elizabeth had, he agreed that his brothers and he would purchase her Just Water Ltd shares. They were not sold immediately as it was hoped they would increase in value and thereby repay more of the borrowing. Christopher made payments from the Huljich Brothers’ bank account to pay for the renovations by a number of cheques in Elizabeth’s favour totalling $310,000. Christopher produced a record of the cheques between 17 October and 17 December 2007 for the Huljich Brothers’ bank account,
the notations of which refer variously to the share purchase, Elizabeth’s loan and advance. The cheques total $310,000.
[159] Christopher also paid some relatively minor accounts and contractors’ invoices directly. Christopher said that, at around the time the renovations were completed in 2007, he gave Elizabeth a schedule of the cost of renovations which showed a total cost of about $523,000. When Peter told Christopher in mid-2008 he did not think the Just Water Ltd shares would increase much in value, the decision was made at that time to sell them. After the payment of $150,000 from the sale of the Just Water Ltd shares approximately $160,000 still remained owing by Elizabeth for the renovations. That has not been repaid. No demand has been made of Elizabeth for that sum.
[160] During the course of cross-examination Elizabeth accepted that she did sell shares to fund the initial costs of the renovations. On 25 July 2007 she sold shares through City Group and received proceeds of sale of just under $295,000. She also accepted that Christopher would go through with her and show her invoices and assist her with writing out cheques to pay for the cost of the renovations. When taken to a three page document, which Christopher had prepared and which detailed the cost of the renovations from August through to December 2007 and showed the total cost of
$523,191.99, Elizabeth suggested it was the first time she had seen it. However, as counsel pointed out, the document had been provided during Elizabeth’s own discovery.
[161]When it was put to Elizabeth that the $523,000 was funded from approximately
$200,000 of her own cash with the balance being funded from her sons, (before the further payment of $150,000) her response was that “I can only say it’s very clever, very clever”.
[162] But the expert evidence confirms Christopher’s account as to the cost of the renovations and the sources of payment for them. Mr Graham has verified the transactions listed in the schedule prepared by Christopher by cross-referencing them to cited invoices and to the records of Elizabeth, Christopher and the Huljich Brothers’ bank accounts. Mr Graham concluded that the renovation works cost an aggregate of
$533,009. Of this approximately $160,000 was ultimately borne by the Huljich Brothers’ joint account in the form of net deposits to Elizabeth’s relevant bank account:
(a)$310,000 was contributed and then $150,000 repaid;
(b)$3,282.18 was borne by Christopher Huljich personally in the form of direct payments to suppliers from his personal account; and
(c)$7,015 was borne by the Huljich Brothers’ joint account in the form of direct payments to suppliers.
[163] As noted Mr Graham’s evidence came in by consent. Ms Greenwood did not directly address the renovation issue.
[164] The evidence overwhelmingly supports the defendants’ case in relation to the 2007 renovations, namely that the renovations cost in excess of $530,000 and that the Huljich Brothers (including Christopher) had contributed a significant sum to the renovations carried out on Elizabeth’s home. The amount contributed by the brothers through the Huljich Brothers’ bank account was in excess of $310,000. The $150,000 paid by Mrs Huljich to the account of the Huljich Brothers and then subsequently drawn by Christopher from the sale of the Just Water Ltd shares reduced that sum by
$150,000 but there remains a balance due and owing by Elizabeth which has not been demanded.
[165] The evidence also satisfies me that, despite her protestations otherwise, Elizabeth knew that she would be responsible for the renovations. She sold a substantial parcel of shares to pay for the initial part of the renovation work. She would not have done that if she expected her sons to pay for the renovations. Indeed even in her own evidence she said Christopher had said he was short of money and that she should sell her shares to pay for the renovations.
[166] The claim for breach of agency fails. To the extent Christopher had an obligation to account accurately to Elizabeth regarding the renovation project, he has fulfilled that obligation.
[167] The claim is also statute-barred in any event. The sum claimed is the $150,000 that Elizabeth paid in June 2008. This cause of action against Christopher was not raised until the second amended statement of claim in December 2015. It is also out of time.
Ninth cause of action against Peter – deceit
[168] In this cause of action Elizabeth seeks judgment against Peter for the $150,000 being the sum realised on the sale of her Just Water Ltd shares.
[169]Elizabeth alleges that Peter knew that Elizabeth did not owe Christopher
$150,000 but misled her in saying that it was owing and caused her to act in reliance on that falsehood to pay $150,000 to Christopher via the sale of the Just Water Ltd shares.
[170] For the reasons given above, Elizabeth did owe at least $150,000 to the Huljich Brothers (including Christopher) for the renovations. There was no misrepresentation by Peter.
[171] The claim would also be statute barred. It was not raised against Peter until the second amended statement of claim in December 2015.
Tenth cause of action – Fair Trading Act claim in relation to the $150,000
[172]This cause of action under the Fair Trading Act has been abandoned.
Eleventh cause of action against Christopher– moneys had and received
[173] Again, this cause of action is based on Elizabeth’s claim in relation to the payment of $150,000 from the sale of the Just Water Ltd shares. She claims Christopher had no right to retain the $150,000.
[174] For the reasons given above this claim cannot succeed. Elizabeth owed the Huljich Brothers (including Christopher and the other brothers) at least $310,000 for the renovations. The $150,000 was a part payment towards that debt.
[175] The claim is also statute barred. It was not pleaded until the fourth amended statement of claim in May 2017.
Twelfth cause of action – against Christopher for breach of contract in relation to rental
[176] The 12th cause of action claims that Christopher “agreed to pay rental on the property to the plaintiff that would otherwise be payable by Sonja, at market rates”. Damages of $95,680 are claimed.
[177] The first issue with this claim is to identify the parties to, and the terms of, the alleged contract.
[178] Sonja Milat, Elizabeth’s sister-in-law, gave evidence that she and her late husband Tony moved into one of the rental townhouses owned by Elizabeth in 1996. They were not required to pay rent. She says that she understood from Christopher that although Elizabeth owned the townhouse the Huljich brothers were responsible for payment of the mortgage and other outgoings on the property. Tony later passed away in 1999. Her evidence is that shortly before his death Tony asked Christopher to reassure him and her that the Huljich brothers would continue to allow them to live rent free in the property and that Christopher agreed.
[179] Sonja also says that in April 2013 she met with Christopher and Peter and during the course of the meeting Christopher indicated that if she supported Christopher and Peter against Paul they would continue paying the rent on the townhouse. She later learnt that Elizabeth had effectively taken over payment of the rental and was disappointed that Christopher had broken his agreement with her late husband.
[180] Elizabeth’s evidence about the rental arrangement was that she understood Christopher had reaffirmed a longstanding agreement with Tony on his deathbed that Christopher would pay the Milat’s rent. But in 2012, when Christopher and Peter said they were in financial strife she said she would take over the obligation from 28 May 2012. She gave Sonja the balance out of her own savings each week to bring the rent up to the level that had formerly been paid to keep in line with the mortgage outgoings.
[181] Even without referring to the defendants’ evidence, and considering only the plaintiff’s evidence, it is difficult to make out a binding contractual agreement between Elizabeth and Christopher that required him to pay her the rent on the unit occupied by Sonja Milat. Mr Little conceded there were issues with the claim.
[182] Christopher’s evidence was that from around 1987 Tony and Sonja had lived in a townhouse at 2/5 Caulton Street, which was owned by a company controlled by the three brothers, Huljich Properties Limited. Rental was not charged because Tony and Sonja did not have a lot of money. They needed a place to live. Tony’s construction business failed and he was later declared bankrupt in 1994. In 1997, when Tony was ill and unable to work, Christopher and his brothers paid him $1,100 a month to help him and Sonja with living expenses. After Tony’s death that was reduced to $650 a month. Christopher says that Tony renovated two of the rental properties owned by Elizabeth at Tarawera Terrace and that in 1995 he and Elizabeth agreed that Tony and Sonja could move into one of the rental properties after it had been renovated. Christopher then arranged for the rent that Elizabeth would ordinarily receive to be paid from the Huljich Brothers’ account. The Milats continued to live rent free.
[183] Christopher says that when he spoke to Tony shortly before he died, Tony asked him if he would look after Sonja and perhaps buy her a smaller car. Christopher says he agreed but there was no discussion about the rent. After Tony died he and his brothers continued to pay the rent on the Tarawera Terrace rental property for Sonja. The rental was increased to $400 a week in 2010. He said they paid it just because it seemed the right thing to do.
[184] Christopher said that actually Elizabeth did not like the fact her sons were paying the rent when Sonja’s children were not. In May 2012 she told him in her letter that Sonja was to pay the rent that he had formerly been paying. She said she was sure she could manage. Christopher says that even after the letter of 17 May 2012 he did not stop the automatic payment for Sonja’s rent until he was confident she was able to manage the payments. He only cancelled the payment of rental from 16 November 2012.
[185] Christopher denies he tried to “bribe” Sonja in the way she suggested. He notes that by the time of the meeting in April 2013 he had already stopped paying her rent.
[186] Michael’s evidence was to similar effect. He agreed that he and his brothers had paid Tony and Sonja’s rent for many years as they did not have a lot of money and the brothers were happy to assist. He said they helped them with other things too, including provision of some money from time to time and they had offered to buy Sonja a new car at one point. He said they did this because they could afford to help them and you always looked after family. Michael had never heard it suggested before this proceeding there was any agreement between Tony and the brothers they would pay rent either in exchange for his building work or any other arrangement. Michael says he never entered such an agreement. He also observed, like Christopher, that Elizabeth was annoyed that Michael and his brothers were paying Sonja’s rent. She considered Sonja’s children who were in America had good jobs and they should pay it.
[187] Christopher was not directly cross-examined on the issue other than having it generally put to him that Sonja Milat took a different view. Michael was not cross- examined on the issue at all.
[188] The evidence falls well short of establishing any legally binding obligation on the part of the Huljich brothers generally or Christopher specifically to pay rental on behalf of Mrs Milat. Even on the plaintiff’s best case the terms are not precise. If there was such an agreement, the plaintiff’s case appears to be that it was with Tony, rather than Elizabeth. The party who would be entitled to enforce it would be Tony’s estate, not Elizabeth.
[189] Further, there is nothing in Elizabeth’s letter of May 2012 to suggest that she regarded Christopher and the brothers as being under any particular obligation to the Milats at that time. There is no reference to the ongoing obligation Elizabeth now argues for.
[190] The claim based on breach of a contract to pay Sonja Milat’s rental is not made out on the evidence. It must fail.
Thirteenth cause of action – Fair Trading Act
[191]This cause of action has been abandoned.
Fourteenth cause of action – estoppel
[192] The last cause of action pleaded against Christopher is an allegation of estoppel. It is said that it would be unfair and inequitable in all the circumstances for Christopher to renege on the representations made to Elizabeth that he would pay Sonja’s rental.
[193]To make out an enforceable estoppel, Elizabeth had to establish:11
(a)the creation or encouragement of a belief or expectation;
(b)reliance on that belief or expectation;
(c)detriment as a result of that reliance; and
(d)that it would be unconscionable for the party against whom the estoppel is alleged to go back on his or her word.
[194] But, there is no evidence that Christopher promised or represented to Elizabeth that he would pay Sonja Milat’s rental for life (or perhaps while she remained in one of the Tarawera Terrace units). Further, and importantly, Christopher kept paying the rental until November 2012, some six months after Elizabeth told Christopher to stop paying the rental. Once Elizabeth told Christopher to stop paying the rental, it cannot possibly be said that she was relying on a representation that he would do so.
[195]The pleaded claim cannot be sustained on the evidence. It cannot succeed.
11 Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd [2014] NZCA 407, [2014] 3 NZLR 567 at [44]; and Hansard v Hansard [2014] NZCA 562 at [5].
Summary – general observation
[196] On the basis of the evidence and documents before the Court the only claim which could have been responsibly pursued by the plaintiff would have been a claim to recover the $264,000 owing under the facility on the basis the facility was made available to all three sons as partners in a partnership so that Christopher (and Michael) would have been individually and severally liable for the balance owing by the partnership as a whole.
[197] To have made out that claim the plaintiff would have had to establish there was such a partnership and that the partners had entered an agreement with her in relation to the facility. Apart from the fact the claim was not pleaded that way, for the reasons given above I am satisfied that not only has the plaintiff failed to establish such a partnership but rather the evidence supports the conclusion that there was no such partnership.
[198] Finally, I observe that even if the plaintiff had succeeded on that basis against Christopher and/or Michael on the evidence before the Court (accepting that Paul has not given evidence or been heard) they would have been entitled to an indemnity from Paul (in relation to any such judgment) and would have been entitled to recover more than that to take into account the further payments they made to the facility over and above their share of their obligations.
Conclusion/result
[199] None of the pleaded claims can succeed against any of the three defendants. The claims are dismissed and judgment is entered for the defendants.
Costs
[200] The defendants are entitled to costs. I would certify for second counsel. However, at counsel’s request I reserve the issue of costs. Counsel can file memoranda if they wish to address that issue. To give the parties time to consider their position
the defendants are to file a memorandum by 22 February 2019 and the plaintiff to reply by 15 March 2019.
Venning J
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