Huljich v Huljich

[2018] NZHC 836

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2014-404-002631 [2018] NZHC 836

BETWEEN

ELIZABETH HULJICH

Plaintiff

AND

CHRISTOPHER PETER HULJICH

First Defendant

AND

PETER KARL CHRISTOPHER HULJICH

Second Defendant

AND

MICHAEL STEPHEN HULJICH

Third Defendant

Hearing:

22 March 2018

Appearances:

J Katz QC and O Woodroffe for the Plaintiff (given leave to withdraw)

D H McLellan QC and J S Cooper QC for the Defendants

Judgment:

27 April 2018

JUDGMENT OF ASSOCIATE JUDGE SMITH

[1]    There are two applications before the Court. First, the defendants apply to strike out certain paragraphs of the plaintiff’s amended statement of claim dated 1 December 2017 (the fifth claim), including two newly-added causes of action which had not been previously pleaded. The defendants contend that the newly-added paragraphs should be struck out because they contain no arguable case, they are irrelevant or an abuse of process, or they are statute-barred.

[2]    If and to the extent the plaintiff’s new claims are not struck out, the defendants ask that the bulk of them be reserved to be dealt with at a separate hearing, after the

HULJICH v HULJICH [2018] NZHC 836 [27 April 2018]

trial of the main proceeding which is presently scheduled to start on 9 July 2018. The defendants also ask that any discovery relating to the new claims be deferred until after the July trial.

[3]    The final aspect of the defendants’ application is an application for further and better particulars of the fifth claim.

[4]    The second application before the Court is an application for particular discovery filed by the plaintiff, relating to the new allegations made in the fifth claim. It is opposed by the defendants.

The parties

[5]    The plaintiff (Mrs Huljich) is an elderly lady. She is the owner of a number of townhouses situated at 42 and 44 Tarawera Terrace, St Heliers.

[6]    The first defendant (Chris) and the third defendant (Michael) are two of her sons, and the second defendant (Peter) is her grandson (the son of the first defendant).

[7]    Chris is an accountant and businessman, who was at material times the managing partner of a business partnership and related entities, including the Huljich Brothers Partnership. Peter is a sharebroker, who is also a member of the Huljich Brothers Partnership. Mrs Huljich says that Peter was in control of the share dealings of the partnership and its related entities.

[8]Michael is also a businessman, and is the business partner of Chris and Peter.

Mrs Huljich did not appear at the hearing

[9]    Mr Katz QC was retained as senior counsel for Mrs Huljich in December 2017, after the fifth claim was filed. He formed the view that the fifth claim would need to be further amended, and that the interlocutory applications described above would not be ready to proceed as scheduled on 22 March 2018. He applied by memorandum for an adjournment of both the 22 March hearing and the trial of the substantive proceeding.

[10]   That application was the subject of a short conference convened by Wylie J. By minute dated 2 March 2018 the Judge declined to adjourn the hearing of the interlocutory applications. He considered that it was premature to consider whether the trial would have to be adjourned.

[11]   At the time of that conference Mrs Huljich was on holiday in Mexico, and not due to return until 20 March 2018, two days before the hearing of the interlocutory applications.1

[12]   On 15 March 2018 Mr Katz and his co-counsel, Ms Woodroffe, advised by memorandum that their instruction had been withdrawn by Mrs Huljich. They indicated their intention to seek leave to withdraw if Mrs Huljich did not herself file an appropriate notice of change of representation.

[13]   Mrs Huljich then emailed to the Court a notice of change of representation, advising that she would be representing herself from then on, until a new legal team could be appointed to act for her. She provided a new address for service, and indicated that she would not be ready to proceed with the hearing on 22 March 2018. She asked for that hearing to be adjourned. That request was opposed by the defendants.

[14]   By minute dated 21 March 2018 I directed that any request Mrs Huljich wanted to make for an adjournment of the hearing of the interlocutory applications would be considered at the hearing.

[15]   Mrs Huljich did not appear at the hearing on 22 March. Mr Katz and Ms Woodroffe sought and were granted leave to withdraw as counsel, and I proceeded to hear submissions on both interlocutory applications from Mr McLellan and Ms Cooper.2 I reserved my decision on the applications.

1      Mrs Huljich later explained in a memorandum filed on 27 March 2018 that she had taken the holiday on medical advice, to assist her in dealing with stress issues she was then experiencing.

2      Acting under r 7.40 of the High Court Rules, which materially provides that if a party is neither present nor represented at the hearing of an application, the Judge may determine the application in the party’s absence in any manner that appears just.

[16]   Following the hearing on 22 March further communications were received from Mrs Huljich, including a lengthy memorandum dated 27 March 2018 in which she set out the reasons she considered Wylie J should have adjourned the interlocutory hearing and the trial. She attached a copy of draft submissions in opposition to the defendants’ interlocutory applications for strike-out and other orders that had been prepared for her by Mr Katz on 13 March 2018 (but not then filed or served). She advised that these submissions were tendered subject to any changes her new legal team might wish to make when they were instructed.

[17]   Mrs Huljich’s memorandum of 27 March 2018 was referred to Wylie J. By minute of 10 April 2018 His Honour directed that any application to adjourn the July trial would have to be made by formal application; in the meantime, the trial date would remain.

[18]   The defendants opposed Mrs Huljich’s request to present Mr Katz’s draft submissions in opposition to their strike-out application.

[19]   Mrs Huljich, having elected to terminate her instructions to senior counsel approximately one week before the 22 March 2018 hearing, having elected not to appear at that hearing, and apparently having taken no steps by 10 April 2018 to appoint new solicitors and counsel, I concluded that I could not delay the resolution of the interlocutory applications any further. By minute dated 10 April 2018 I directed that, unless Mr Katz’s draft submissions were withdrawn by Mrs Huljich by 13 April 2018, I would consider them. If the draft submissions were not withdrawn, a short period would be allowed for the defendants to file submissions in reply.

[20]   Mrs Huljich did not withdraw Mr Katz’s draft submissions, although an email was sent to the Court at 4.25 pm on 13 April 2018 by a solicitor who had been consulted by Mrs Huljich, Mr Keall, requesting a further two days to consult with Mrs Huljich and decide whether it was appropriate for him to represent her (in light of his availability and other factors), and so that she could take advice on “whether she should agree or disagree with the suggestion that [I] should deliver a decision as proposed.”

[21]   By minute dated 16 April 2018 I declined Mr Keall’s request, pointing out that I had already ruled (on 10 April 2018) that I would not be prepared to hear submissions from new solicitors or counsel who might be instructed by Mrs Huljich.

[22]Reply submissions were filed by the defendants on 16 April 2018.

[23]   Ping Chen, the solicitor on record for Mrs Huljich, applied formally for an order under r 5.41 of the High Court Rules for a declaration that she was no longer solicitor on record (the removal application). In my minute of 10 April 2018 I directed that, as Mrs Huljich had now sought to rely on submissions prepared by her former counsel, the removal application should be served on Mrs Huljich. I indicated that if Mrs Huljich then provided a signed consent to the removal application, I would consider dealing with the removal application on the papers.

[24]   On 12 April 2018, Mrs Huljich provided a signed acknowledgement of service of the removal application and the supporting affidavit, and she confirmed that she wished to have Ping Chen removed as her solicitor in the proceeding. On 16 April 2018 I made an order declaring that Ping Chen was no longer solicitor on record for Mrs Huljich.

THE DEFENDANTS’ APPLICATION FOR STRIKE-OUT AND OTHER ORDERS

Mrs Huljich’s claims

[25]   In her first cause of action, Mrs Huljich says that in April 2009 Chris advised her that he and Peter needed financial assistance. She says that she offered to provide financial assistance to them under an oral agreement (the first loan agreement) under which:

(1)she would mortgage the townhouses;

(2)she would borrow the sum of $750,000;

(3)she would advance the sum of $750,000 to Chris and Peter;

(4)pending repayment, Chris and Peter would pay the interest on the loan directly to the lender.

(5)it was an express or implied term of the first loan agreement that the amount owed to Mrs Huljich would be repaid on demand.

[26]   The first loan agreement went ahead. Mrs Huljich mortgaged the townhouses, and she borrowed $750,000 from Kiwibank which she on-lent to Chris and Peter. Thereafter, Chris and Peter paid the interest on the loan directly to the lender.

[27]   Mrs Huljich says that Chris and Peter drew down on the first loan by 14 separate instalments, between 3 June 2009 and 21 January 2010. She says that the full

$750,000 had been drawn down by 14 September 2009. Thereafter, Chris and Peter deposited funds from time to time into the Kiwibank account, and drew down on the account from time to time to meet their financial obligations.

[28]   Mrs Huljich says that in or about May 2012, she and Chris and Peter agreed to refinance the Kiwibank debt with Sovereign. She says that she then entered into a loan agreement (the second loan agreement) with Chris and Peter under which:

(1)The funds advanced under the first loan agreement would be replaced with a second debt in the sum of $750,000 (the Sovereign debt).

(2)The same arrangement as under the first loan agreement would otherwise continue.

[29]   The second loan agreement was also implemented. Mrs Huljich re-mortgaged her townhouses and borrowed $750,000 from Sovereign. The Kiwibank debt was repaid. Chris and Peter continued to receive the benefit of the amount advanced under the first agreement, and they paid interest on the Sovereign debt directly to Sovereign, down to mid-September 2014.

[30]   Mrs Huljich says that it was an express or implied term of the second loan agreement that Chris and Peter would comply with the same obligations as were owed

under the first loan agreement, including that the amount owed to Mrs Huljich would be repaid on demand.

[31]   Mrs Huljich says that she has made demand of Chris and Peter to repay the Sovereign debt. That is denied by Chris and Peter, who have sought particulars of the alleged demand. In Mr Katz’s draft submissions an answer was provided – the demand was made when this proceeding was issued on 3 October 2014.

[32]   However, it is accepted that a total of $486,000 has been paid in partial repayment of the second loan agreement, and that $264,000 remains unpaid. Mrs Huljich says that the defendants have denied that they are liable to make any further payments, or to pay interest on the balance of $264,000.

[33]   When Mrs Huljich commenced the proceeding in October 2014, Chris was the only defendant. She sought summary judgment, seeking the sum of $264,000. Chris opposed the summary judgment application, and it was withdrawn in February 2015.

[34]   Peter and Michael have subsequently been added as defendants, and the allegations have been broadened considerably to bring in new allegations, unrelated to the original claim. The fifth claim now contains 14 separate causes of action.

The new “lifetime support” allegations

[35]   Throughout the various amendments to her statement of claim, Mrs Huljich’s first cause of action has been a breach of contract cause of action, in which she has sought to recover the $264,000 balance under the second loan agreement. That remains the case in the fifth claim, but she has added the following “background” paragraphs:

5.[Mrs Huljich] was in a partnership with her late husband, Peter Stephen Huljich and their three sons, [Chris, Peter, Michael] and Paul Richard Huljich in the formation of the partnership in the property company named Huljich Properties Limited, incorporated on 21 September 1962.

6.At all material times [Mrs Huljich] and [Chris, Peter and Michael] shared a loving family relationship with with (sic) each other.

7.[Mrs Huljich] had a high level of trust and confidence in [Chris, Peter and Michael] who dealt with all her financial affairs.

8.Over a number of years, [Chris] initiated property transactions involving the transfer of property shares out of [Mrs Huljich’s] ownership to third parties.

Particulars:

(1)On 24 December 1993 [Mrs Huljich’s] 40% share in a property comprising of 12 units at 278 Balmoral Road, Mt Albert, Auckland was sold to Malcolm and Sharlene MacGregor.

(2)On 20 September 1994 [Mrs Huljich’s] 25% share in a commericial (sic) property comprising of two restaurants on the waterfront at 409 Tamaki Drive, Auckland was transferred to Tamaki Properties Ltd, a Company of which [Chris] was a Director. The sole shareholder in Tamaki Properties Limited was MCP Holdings Limited a Company of which [Chris] was a Director and Shareholder. On 2 August 1996 the property was sold to Ross Thomas Lornie, Robyn Maree Rendle and Brett Frank Lornie.

(3)On 1 March 1993 [Mrs Huljich’s] 20% share (her late husband, Peter Stephen Huljich also owning a 20% share) in a commercial property comprising of offices at 23 Shaddock Street, Eden Crescent, Auckland Central was sold to Unovis Limited.

9.In addition, [Mrs Huljich] held a 20% shareholding in Huljich Properties Limited, which owned and sold the following properties comprising of two townhouses to Robert Allen Investments Limited on 18 March 1997:

(a)5 Caulton Street, St Johns, Auckland; and

(b)2/5 Caulton Street, St Johns, Auckland.

10.[Mrs Huljich] did not receive any payment for the property transfers or sales referred to in paragraph 8 above.

11.[Mrs Huljich] did not receive any payment for her shareholdings in Huljich Properties Limited.

12.Between May and August 1986 oral agreements and undertakings were entered into between [Mrs Huljich], her late husband Peter Stephen Huljich, [Chris and Michael] and the plaintiff’s other son, Paul Huljich that in consideration of the property transfers and sales referred to in paragraphs 8 and 9 above, which benefitted [Mrs Huljich’s] children, all financial needs, requests and assistance required by [Mrs Huljich] and her late husband, during their lifetime, would be sustained. Up until 2007 such financial needs, requests and assistance included (but was not limited to):

(a)Overseas holidays with all expenses paid;

(b)New vehicles (approximately every 5 years);

(c)Funds for financial investments; and

(d)Renovation work on their residential home.

13.Up until 2007 the agreements and undertakings referred to in paragraph 12 were adhered to by [Chris and Michael].

14.Since 2007 the [Chris and Michael] have breached the agreements and undertakings referred to in paragraph 12 and failed to financially assist [Mrs Huljich].

15.The actions of the defendants set out in paragraphs 5 to 14 above and the actions of the defendants pleaded in paragraphs 16 to 136 below have resulted in [Mrs Huljich] being in a financial precarious position, in the later years of her life.

[36]   Mrs Huljich also added the following paragraph 116 to her twelfth cause of action (in which she alleges breach of contract by Chris in failing to pay rent to her on a property owned by Mrs Huljich at 42 Tarawera Terrace, St Heliers):

In addition, the Huljich Brothers Partnership has been responsible for payment of [Mrs Huljich’s] financial needs as set out in paragraph 12 above.

[37]   While paragraphs 5-15 and 116 of the fifth claim are not limited to allegations that Chris and Michael would provide Mrs Huljich with financial assistance of the kind pleaded for the rest of her life, that is a significant part of the thrust of these paragraphs, and I will adopt the phrase “the lifetime support paragraphs” in this judgment as a convenient shorthand reference to paras 5 to 15, and 116, of the fifth claim.

[38]   The defendants apply to strike out the lifetime support paragraphs. Broadly, they say that the lifetime support paragraphs:

(1)do not disclose a reasonably arguable cause of action (noting that no relief is sought in relation to the lifetime support paragraphs);

(2)the paragraphs are not relevant to any material pleaded issue; and

(3)those defects cannot be rectified by further amendment, as any cause of action which the lifetime support paragraphs did give rise to would be time-barred under s 4 of the Limitation Act 1950, the matters alleged

having occurred between 1962 and 2007, more than six years before they were first pleaded on 1 December 2017.

The new “loss of a chance” allegations

[39]   Mrs Huljich has also added a number of other paragraphs to the first cause of action, in which she pleads that the first loan agreement and the second loan agreement were intended to be short-term bridging loans only, and that once repaid the funds were to be invested by Chris and Peter on Mrs Huljich’s behalf. She says that in or about August 2009 Chris and Peter had an opportunity to repay the loan facility and invest her money in accordance with this obligation, when funds were received from a mortgage over a property owned by Michael in Sydney. She pleads that it was an essential term of the loan agreements that she would also benefit from the investment of the funds by Chris and Peter, but they failed to invest any funds on her behalf. She contends that she has lost the chance to benefit from the profits she might otherwise have made.

[40]   The specific allegations in these paragraphs – I will call them the “loss of a chance paragraphs” – are:

First agreement

18. [Mrs Huljich] and [Chris and Peter] then entered  into  an  oral  agreement (“the first agreement”) under which:

…

(e) The loan was intended to be a short term loan to assist with financial difficulties and once repaid the funds were to be invested by [Chris and Peter] on [Mrs Huljich’s] behalf, alongside their investments.

…

23.In or about 2009 in accordance with the first agreement it was an express or implied term that the loan was intended to be a short term bridging loan to assist with financial difficulties and once repaid the funds were to be invested by [Chris and Peter] on [Mrs Huljich’s]  behalf.

24.In or about August 2009, the defendants had an opportunity to repay the loan facility and invest [Mrs Huljich’s] funds, in accordance with the first agreement, when funds were received from a mortgage over a property owned by [Michael], in Sydney, Australia.

25.It was an essential term of the agreement that [Mrs Huljich] would also benefit from the investment of the funds by [Chris and Peter].

26.As a consequence of the fraudulent representation of [Chris and Peter, Mrs Huljich] was denied the financial benefits that would have accrued from prudent investments by [Chris and Peter] of the loan monies they received and utilised for their own purposes.

…

33.[Chris and Peter] failed to invest any of the funds on behalf of [Mrs Huljich].

34.[Mrs Huljich] as the elderly mother and grandmother of [Chris and Peter], was vulnerable to their actions and subjected to financial elder abuse by [Chris and Peter].

Particulars:

(a)On [Peter’s] advice, [Mrs Huljich] signed a power of attorney in favour of [Peter];

(b)On [Peter’s] advice, [Mrs Huljich] authorised [Peter] to manage a portfolio of shares, which at the time were valued at approximately $250,000.00.

(c)On or about 18 March 2005 [Peter] advised [Mrs Huljich] that her shares were valued at approximately

$1.431 million and advised [Mrs Huljich] to make monetary gifts to some of her grandchildren, including [Peter], which [Mrs Huljich] did in the amount of approximately $450,000.00.

(d)By March 2012, [Peter] advised [Mrs Huljich] that her shares had diminished to a value of approximately

$156,000.00.

(e)In 2012, [Mrs Huljich] became aware that [Peter] had ceased to invest the funds on behalf of [Mrs Huljich], without consultation with [Mrs Huljich].

(f)In April 2009, [Chris and Peter] requested financial assistance from [Mrs Huljich], as set out in paragraph

18 above. The financial assistance was to be a temporary bridging facility, to be repaid and then invested on behalf of [Mrs Huljich], by [Chris and Peter], alongside their investment funds.

(g)When [Mrs Huljich] sought legal advice in order to undertake the transaction set out in paragraph (f) above, she was advised by [Chris and Peter] to advise her lawyer that the funds were intended to be invested on her behalf by [Chris and Peter].

(h)At no time did [Chris and Peter] attempt to invest the funds and to the contrary when [Mrs Huljich] requested repayment of funds from [Chris], she was advised on 3 March 2014, that Paul was liable for the repayment of $729,000.00 and the interest payment of $198,793.84.

(i)As a result of the management of her shares by [Peter], the alleged renovations costs owed to [Chris] (referred to in Part C below), the gifting of funds to her grandchildren and the drawdown of the funds to financially assist [Chris and Peter], [Mrs Huljich] suffered financial loss and became completely financially dependent.

…

37.[Chris and Peter], in failing to repay the the (sic) outstanding balance of the Kiwibank loan and invest the funds on behalf of [Mrs Huljich], have breached the first agreement and [Mrs Huljich] has lost the chance to benefit from the profits.

38.[Chris and Peter], in failing to repay the outstanding balance of the Sovereign loan and invest the funds on behalf of [Mrs Huljich], have breached the second agreement and [Mrs Huljich] has lost the chance to benefit from the profits.

[Mrs Huljich’s] claims against [Chris and Peter]:

…

(d) Judgment in a sum to be calculated for the loss of chance to invest the loan funds alongside [Chris and Peter].

[41]   The defendants apply to strike out the loss of a chance paragraphs. They say that the loss of a chance paragraphs should be struck out because they plead a new cause of action that raises essentially different factual and legal issues to the claims previously made in Mrs Huljich’s fourth amended statement of claim and earlier pleadings, and that the claims in the loss of a chance paragraphs are clearly time-barred under s 4 of the Limitation Act 1950, as all elements of the cause of action are alleged to have occurred between April and August 2009, more than six years before they were first pleaded in the fifth claim on 1 December 2017. They say that the loss of a chance paragraphs bring in different factual and legal bases for the claim that are sufficiently material as to constitute a new cause of action (although they are not pleaded as such).

The new “breach of fiduciary duty” allegations

[42]   The next parts of the fifth claim which the defendants seek to have struck out are two new causes of action – one against Chris and one against Peter – that plead breach of fiduciary duties allegedly owed to Mrs Huljich. The new causes of action plead:

PART B: BREACH OF FIDUCIARY DUTY:

Sixth cause of action (against [Chris]) – breach of fiduciary duty as agent

66.[Mrs Huljich] repeats paragraph to 1 to 65 above.

67.[Chris] at all material times acted as agent for [Mrs Huljich].

68.[Chris], since 1986, had made oral agreements and undertakings to [Mrs Huljich] as referred to in paragraph 12 above.

69.[Mrs Huljich] was at all times entitled to rely on [Chris] not to act in any way contrary to her financial interests.

70       [Chris] owed a fiduciary duty to [Mrs Huljich]:

(a)To account to her at all times both accurately and completely for all transactions.

(b)Not to allow his personal or business interests to conflict with his duty to [Mrs Huljich] as principal.

(c)Not to profit from his position at the expense of the principal.

(d)Not to abuse the trust and confidence that [Mrs Huljich], as his elderly mother, had in him, not to act contrary to her interests.

71.In breach of his duties as agent, [Chris]:

(a)Fraudulently misrepresented to [Mrs Huljich] that the full amount of the Sovereign loan was owing to her by Paul.

(b)Fraudulently misrepresented to [Mrs Huljich] that a partial amount of $264,000.00 of the Sovereign loan was owing to her by Paul.

(c)Was responsible for unauthorised transactions from [Mrs Huljich’s] bank account.

(d)Failed to account to [Mrs Huljich] for transactions actioned by [Chris] on [Mrs Huljich’s] bank account.

(e)Acted in conflict between his fiduciary duty to [Mrs Huljich] and his personal and partnership interests.

(f)Acted in a manner that abused the trust and confidence that [Mrs Huljich], as his elderly mother, had in him.

(g)Despite demand from [Mrs Huljich], [Chris] has not repaid the sum of $264,000.00 to [Mrs Huljich].

(h)Has failed to meet obligations pursuant to the oral agreements and undertakings made to [Mrs Huljich] referred to in paragraph 12 above.

72.As a result of [Chris’] breach of his fiduciary duty to [Mrs Huljich], [Mrs Huljich] has suffered losses in the sum of $264,000.00 in respect of the Sovereign loan.

73.As a result of [Chris’] breach of his fiduciary duty to [Mrs Huljich], [Mrs Huljich] has suffered loss by way of being depleted of her own financial resources and her financial needs and requests not being met.

74.As a result of [Chris’] breach of fiduciary duty, [Mrs Huljich] has suffered substantial mental and emotional distress.

[Mrs Huljich] claims against [Chris]:

(a)Judgment for damages in the sum of $264,000.00 for repayment of the sovereign loan.

(b)Judgment for equitable damages in a sum to be calculated for the financial losses suffered by [Mrs Huljich] for the breach of agreements and undertakings referred to in paragraph 12.

(c)Damages for mental and emotional distress in the sum of

$475,000.00.

(d)Exemplary damages for mental and emotional distress in the sum of $50,000.00

(e)Interest.

(f)Costs.

Seventh cause of action (against [Peter]) - breach of fiduciary duty

75.[Mrs Huljich] repeats paragraphs 1 to 74 above.

76.At all relevant times [Peter] was in a fiduciary relationship of trust and confidence with [Mrs Huljich].

Particulars

(a)At all material times he was [Mrs Huljich’s] financial adviser and manager in respect of the share portfolio and other financial matters.

(b)At all material times he held [Mrs Huljich’s] power of attorney.

(c)At all material times acted as agent for [Mrs Huljich].

77.Pursuant to the fiduciary relationship, [Peter] owed [Mrs Huljich] a duty:

(a)To account to her at all times both accurately and completely for all transactions.

(b)Not to allow his personal or business interests to conflict with his agent’s duty to [Mrs Huljich] as principal.

(c)Not to profit from his position as agent at the expense of the principal.

(d)Not to abuse the trust and confidence that [Mrs Huljich], as his elderly grandmother, had in him.

78.In breach of his fiduciary duty, [Peter]:

(a)Fraudulently misrepresented to [Mrs Huljich] that the full amount of the Sovereign loan was owing to her by Paul.

(b)Fraudulently misrepresented to [Mrs Huljich] that a partial amount of $264,000.00 of the Sovereign loan was owing to her by Paul.

(c)Was responsible for unauthorised transactions from [Mrs Huljich’s] bank account.

(d)Failed to account to [Mrs Huljich] for transactions actioned by [Peter] on [Mrs Huljich’s] bank account.

(e)Acted in conflict between his fiduciary duty to [Mrs Huljich] and his personal and partnership interests.

(f)Acted in a manner that abused the trust and confidence that [Mrs Huljich], as his elderly grandmother, had in him.

(g)Despite demand from [Mrs Huljich], [Chris] has not repaid the sum of $264,000.00 to [Mrs Huljich].

79.As a result of [Peter’s] breach of his fiduciary duty to [Mrs Huljich], [Mrs Huljich] has suffered losses in the sum of $264,000.00.

80.As a result of [Peter’s] breach of fiduciary duty, [Mrs Huljich] has suffered mental and emotional distress.

[Mrs Huljich’s] claims against [Peter]:

(a)Judgment for damages in the sum of $264,000.00.

(b)Damages for mental and emotional distress in the sum of

$475,000.00.

(c)Exemplary damages for mental and emotional distress in the sum of $50,000.00.

(d)Interest.

(e)Costs.

[43]   For convenience, I will refer to these breach of fiduciary obligation pleadings as “the fiduciary duty paragraphs”.

[44]   The defendants note that the claims in the fiduciary duty paragraphs, while lacking in particulars, broadly allege that Chris and Peter fraudulently misrepresented to Mrs Huljich that the loan was owed to by Paul Huljich, the brother of Chris and Michael, and that Chris and Peter made unauthorised transactions from Mrs Huljich’s bank account and failed to account to her for transactions made on her account.

The issues on the defendants’ applications

[45]The following issues arise on the defendants’ applications:

(1)Should some or all of the lifetime support paragraphs be struck out?

(2)Should some or all of the loss of a chance paragraphs be struck out?

(3)Should some or all of the fiduciary duty paragraphs be struck out?

(4)If and to the extent that the defendants are unsuccessful in having the lifetime support paragraphs, the loss of a chance paragraphs and the fiduciary duty paragraphs struck out, should the parts which are not struck out be deferred for consideration at a later trial, after the trial scheduled to commence on 9 July 2018?

(5)Should Mrs Huljich be ordered to provide the further particulars of the fifth claim sought by the defendants?

[46]I will deal with each of those issues in turn.

Issue 1 – Should some or all of the lifetime support paragraphs be struck out?

Legal principles applicable to strike-out applications

[47]Rule 15.1 of the High Court Rules provides:

15.1     Dismissing or staying all or part of proceeding

(1)The court may strike out all or part of a pleading if it –

(a)discloses no reasonably arguable cause of action, defence, or case appropriate to the nature of the pleading; or

(b)is likely to cause prejudice or delay; or

(c)is frivolous or vexatious; or

(d)is otherwise an abuse of the process of the court.

(2)If the court strikes out a statement of claim or a counterclaim under subclause (1), it may by the same or a subsequent order dismiss the proceeding or the counterclaim.

(3)Instead of striking out all or part of a pleading under subclause (1), the court may stay all or part of the proceeding on such conditions as are considered just.

(4)This rule does not affect the court’s inherent jurisdiction.

[48]   The criteria for striking out are now well settled by the Court of Appeal decision in Attorney-General v Prince3, endorsed by the Supreme Court in Couch v Attorney-General.4 The learned authors of McGechan on Procedure summarise the principles as follows:

(1)Pleaded facts, whether or not admitted, are assumed to be true. This does not extend to pleaded allegations which are entirely speculative and without foundation.

(2)The cause of action or defence must be clearly untenable. In Couch, Elias CJ and Anderson J said:5 “It is inappropriate to strike out a claim summarily unless the Court can be certain that it cannot succeed”;

3      Attorney-General v Prince [1998] 1 NZLR 262, (1997) 16 FRNZ 258, (1998) NZFLR 145 (CA) at 267.

4      Couch v Attorney-General [2008] NZSC 45 at [33].

5 At [33].

(3)The jurisdiction is to be exercised sparingly, and only in clear cases. This reflects the Court’s reluctance to terminate a claim or defence short of trial.

(4)The jurisdiction is not excluded by the need to decide difficult questions of law, requiring extensive argument.

(5)The Court should be particularly slow to strike out a claim in any developing area of the law, perhaps particularly where a duty of care is alleged in a new situation. There is considerable authority that developments in negligence need to be based on proved rather than hypothetical facts.

[49]   A claim which is clearly statute-barred may be struck out on the basis that it is an abuse of process.6

[50]   In an appropriate case, abuse of process may constitute a separate ground for striking out a pleading.7

Defendants’ submissions

[51]   In her notice of opposition, Mrs Huljich said that the lifetime support paragraphs constitute contextual facts, necessary to understand her claim. She also said that section 4 of the Limitation Act 1950 does not apply.

[52]   Mr McLellan submits that it is not appropriate for irrelevant or immaterial background matters to be pleaded as “context”, particularly if they are then relied upon in an attempt to expand the scope of discovery (as is said to be the case here). Even if Mrs Huljich were to amend her pleading to add a new cause of action based on the lifetime support paragraphs, any such claim could be time-barred and it would be an entirely new cause of action, having an “essentially different character” from those pleaded in the fourth amended statement of claim.8

6      Matai Industries Limited v Jensen [1989] 1 NZLR 525.

7      Pharmacy Care Systems Limited v Attorney-General (2001) 15 PRNZ 465 at [31].

8      ISP Consulting Engineers Limited v Body Corporate 89408 [2017] NZCA 160 at [22].

[53]   Mr McLellan submits further that any cause of action arising from the alleged cessation of support, being an alleged breach of contract, must have accrued more than six years before 1 December 2017 and is therefore time-barred (on Mrs Huljich’s pleading, breach would have occurred in 2007).

[54]   Mr McLellan then submits that Mrs Huljich’s allegations are inherently implausible. It is extremely unlikely that Chris and Michael would ever have agreed to provide her with unlimited financial support for the duration of her lifetime, and still less likely that either they or she would have intended to create a binding contractual arrangement to that effect. If any such agreement had existed, one would have expected it to have been pleaded at the outset.

[55]   Finally, Mr McLellan submits that even if a legally binding agreement had existed that obliged Chris and Michael to provide Mrs Huljich with unlimited financial support for her lifetime, that agreement must be treated as having been cancelled and/or repudiated by 17 May 2012 when Mrs Huljich told Chris in a letter that she no longer needed his assistance, and sent him a cheque by way of partial reimbursement. In those circumstances, it is not reasonably arguable that any failure by Chris to provide financial support after that time could form the basis for a breach of contract claim.

Submissions for Mrs Huljich

[56]   In his draft submissions, Mr Katz submitted that these paragraphs form part of the contextual background to the fifth claim – they are not pleaded as a separate cause of action. Contextual facts may be pleaded if, without them, it would not be possible to understand the more critical factual allegations,9 and the defendants have not submitted that these paragraphs are irrelevant to the contextual matrix of Mrs Huljich’s claim.

[57]   Mr Katz also referred to the judgment of Associate Judge Matthews in Rule v Simpson,10 a case in which the defendant sought to strike out parts of the statement of

9      Russell v Taxation Review Authority (2000) 19 NZTC 15924 (HC) at [40], upheld by the Court of Appeal in Reay v The Attorney-General & Anor [2016] NZCA 519.

10     Rule v Simpson [2017] NZHC 2154.

claim on the basis that pleadings in relation to family history were not relevant to any of the pleaded causes of action. The plaintiff in Rule argued that as the case was “intensely factual” and concerned historical events and involved contested evidence about the intentions and actions of different parties over a long period of time, it was all the more important that a pleading contained both the essential factual elements and the context necessary to understand the critical factual allegations.11 On the facts of the case, the Associate Judge considered that the paragraphs in question did not “stray across the hazy line into evidence to an unacceptable extent”.12 His Honour noted that the paragraphs were followed by carefully-phrased separate causes of action that put the defendant on fair notice of the case it had to meet.

[58]   Mr Katz submitted that, like Rule, this case deals with a close family group, who over a significant period of time operated their family business and transactions based on trust and confidence in each other. There were no written agreements; all transactions were agreed upon verbally between the parties. Due to the level of trust in which the parties operated, it is essential for contextual facts to be before the Court regarding past conduct and the substantial level of transactions that have taken place.

[59]   Mr Katz buttressed this submission by pointing out that the transactions pleaded in the fifth claim were not isolated one-off agreements, but were part of a long history of the parties reaching financial agreements and undertakings for the benefit of various family members. Paragraphs 5 to 15 and 116 of the fifth claim set out the underlying premise on which such agreements were entered into, and they provide a background to the reliance that has been placed by Mrs Huljich on the defendants to uphold their sides of the agreements.

[60]   Mr Katz pointed out that the lifetime support paragraphs are not limited to “lifetime support allegations”. They show that there is a history of:

(1)the defendants utilising Mrs Huljich’s financial resources without proper accounting or reimbursement to her;

11 At [31].

12 At [42].

(2)Mrs Huljich operating on such a high level of trust with the defendants, allowing them to make financial decisions on her behalf; and

(3)the defendants agreeing to financially provide for Mrs Huljich in consideration of Mrs Huljich providing financial backing to them, to assist them with their financial needs.

[61]   Mr Katz submitted that the lifetime support paragraphs are relevant to a number of other parts of the fifth claim, being causes of action in which paragraphs 5 to 15 have been repeated. In particular, paragraphs 5 to 15 are directly relevant to the matters pleaded against Chris in the sixth cause of action, where Mrs Huljich pleads that Chris owed her a fiduciary duty … (d) not to abuse the trust and confidence that Mrs Huljich, as his elderly mother, had in him, not to act contrary to her interests. Mrs Huljich also pleads in her sixth cause of action that Chris failed to meet his fiduciary obligations pursuant to the oral agreements and undertakings made to Mrs Huljich as referred to in paragraph 12 of the fifth claim (one of the lifetime support paragraphs).

[62]   Mr Katz submitted that paragraphs 5 to 15 of the fifth claim also provide relevant context to other parts of the fifth claim (including some parts of the fifth claim which also formed part of Mrs Huljich’s fourth amended claim), in which she alleges that the defendants made a number of unauthorised and fraudulent transactions while operating her bank account.13 The pattern of conduct, and in particular the manner in which the defendants took complete control of Mrs Huljich’s financial situation, is said to provide relevant context to those allegations.

13  In her second cause of action, which is not the subject of the defendants’ strike-out application,  Mrs Huljich alleges fraud against Chris and Peter between January 2009 and June 2010. She says that they caused 14 faxes to be sent to Kiwibank, purportedly bearing instructions from Mrs Huljich to Kiwibank to transfer sums of money from Mrs Huljich’s accounts, including $150,000 to a company of which Peter was a director and AUD50,000 to Jason, another son of Chris. Mrs Huljich contends that the 14 faxes were forgeries that she did not sign or authorise, and constituted fraudulent misrepresentations to Kiwibank that the requests for transfer or payment had been made by her.

Chris and Peter deny the alleged fraud. They say that Mrs Huljich authorised them to administer the Kiwibank facility, and that Mrs Huljich authorised Chris and Peter to use an electronic signature to sign correspondence on her behalf, and that she assisted Peter in creating the signature by providing a signature on a blank piece of paper for him to use. They also plead that Mrs Huljich was aware of the payments.

[63]   Mr Katz also referred to allegations made in the fourth amended statement of claim (and repeated in the fifth claim) that, during certain renovation work carried out on one of Mrs Huljich’s St Heliers properties (in which Chris acted as her agent), Peter (as Mrs Huljich’s sharebroker) advised Mrs Huljich that she owed Chris a further

$156,000. The relevant pleading is that, due to her trust and reliance on Chris and Peter, Mrs Huljich agreed to sell her shares in a company called Just Water, and pay the amount of $150,000 to Chris, without any accounting to her. The lifetime support paragraphs are said to provide relevant context to those allegations.

[64]   The lifetime support paragraphs are also said to be relevant to paragraphs 108 to 111, and 118 of the fifth claim, which relate to another alleged agreement between Mrs Huljich and Chris, under which Chris agreed to pay market rent for Mrs Huljich’s property at 3/42 Tarawera Terrace, which was to be occupied by another family member, Sonja Milat. (This agreement is said to be connected to an historical agreement between Chris and Ms Milat and her late husband, under which Chris said he would provide rent-free accommodation to Ms Milat and her late husband in consideration for Mr Milat providing building and maintenance services on various properties. The lifetime support paragraphs are said to be relevant to showing a pattern of conduct, where family agreements were made by Chris, in which he would agree a financial responsibility for various people, in consideration of a benefit that was given to him.

[65]   Mr Katz noted that Mrs Huljich is not claiming any breach of contract in respect of the allegations in the lifetime support paragraphs. But when viewing the fifth claim as a whole (including the lifetime support paragraphs), it can be seen that there has been an ongoing practice between the parties where the defendants have taken control of Mrs Huljich’s financial affairs, and a modus operandi by Chris, which make Mrs Huljich’s contention that there were agreements to provide financial support for her for the duration of her life entirely viable.

Discussion and conclusions on Issue (1)

[66]   First, I do not think I need to be concerned with the defendants’ submission that the lifetime support paragraphs do not disclose a reasonably arguable cause of

action: it is clear from Mr Katz’s draft submissions, and indeed from the pleadings themselves, that the lifetime support paragraphs were not intended to form a stand- alone cause of action. The case for Mrs Huljich is that they are intended to provide contextual background only, to assist with the understanding of other parts of the fifth claim, including the sixth cause of action, where breach of fiduciary duty is alleged against Chris.

[67]   For example, the pleadings at paragraphs 6 and 7 of the fifth claim that Mrs Huljich and the defendants shared a loving family relationship with each other, and that Mrs Huljich had a higher level of trust and confidence in the defendants, who dealt with all of her financial affairs, appear to me to be arguably relevant to the paragraph 70 allegation against Chris that he owed fiduciary obligations to Mrs Huljich, having regard, inter alia, to the trust and confidence that Mrs Huljich, as his elderly mother, reposed in him (fifth claim, paragraph (70d)). Likewise, the allegations at paragraphs 8 to 11 of the fifth claim arguably add relevant context to the various allegations made by Mrs Huljich that Chris initiated the transfer of properties from Mrs Huljich’s ownership to third parties, without payment to her. The allegations at paragraphs 12 to 14 relate specifically to the oral agreements and undertakings allegedly made between May and August 1986, and Chris’ failure to meet those obligations is now expressly pleaded as a breach of fiduciary duty by him (fifth claim, paragraph 71(h)). The pleading at paragraph 116 of the fifth claim, that Huljich Brothers Partnership had been responsible for payment of Mrs Huljich’s financial needs as set out in paragraph 12, also arguably provides reasonable and appropriate context to aid the understanding of an important pleading.

[68]   I accept Mr Katz’s submissions based on Russell v Taxation Review Authority14 that contextual facts may be pleaded if, without them, it would not be possible to understand the more critical factual allegations. In my view, it is not sufficiently clear (that is, sufficiently clear to justify a strike-out order) that the lifetime support paragraphs do not come into that category. As Associate Judge Matthews noted in Rule v Simpson,15 where the boundary lies between contextual facts and necessary pleadings can be a hazy line, and particularly given the broad pleading in the sixth

14 Above n 9, at [40].

15 Above n 10, at [42].

cause of action that Chris owed fiduciary duties to his mother I think it is at least arguable for Mrs Huljich that the “hazy line” has not been crossed.

[69]   That conclusion deals also with Mr McLellan’s submissions that the new allegations are not relevant to any material pleaded issue (arguably they are in the sense of providing permissible context), and that the defects cannot be rectified by further amendment (as any cause of action which they did give rise to would be time- barred). The paragraphs are not said to give rise to any stand-alone cause of action, and to the extent the defendants raise limitation arguments in support of their application to strike out the lifetime support paragraphs, those arguments can be addressed under Issues (2) and (3), in the context of the defendants’ application to strike out specific causes of action of which the lifetime support paragraphs do or may form part.

[70]   I am not prepared to make a finding on the strike-out application that the allegations in the lifetime support paragraphs are inherently implausible. The starting position with a strike-out application is that the pleaded allegations are to be accepted as being capable of proof at trial, and I do not see any basis to take a different view in respect of the lifetime support paragraphs. And whether or not Mrs Huljich may have cancelled any such lifetime financial support agreement (as referred to by Mr McLellan in his submissions) seems to me to be a matter of defence rather than strike- out; I do not consider it appropriate to deal with that argument before trial.

[71]   Subject to what might be the answers on Issues (2) and (3), the answer on issue 1 is “no”.

Issue 2 – Should some or all of the loss of a chance paragraphs be struck out?

The defendants’ submissions

[72]   Mr McLellan submits that the loss of a chance paragraphs should be struck out because they plead a new cause of action that raises essentially different factual and legal issues from the claims in the fourth amended statement of claim and earlier pleadings, and that cause of action is clearly time-barred under section 4 of the Limitation Act 1950.

[73]   There will be a new cause of action if particular allegations are of an “essentially different character”. The assessment of whether a cause of action is new is objective, and the consideration must be the substance of what is pleaded rather than the form.16

[74]   In this case, Mr McLellan submits that there is a new factual basis for the claim, including the new allegation of an agreement between Mrs Huljich and Chris and Peter that they would repay the loan at the earliest opportunity and invest the funds for Mrs Huljich alongside their own investments. The allegation that such a term of the loan agreement existed was first made in the fourth amended statement of claim dated 29 May 2017, but then there was no associated allegation of breach, nor any claim for relief in respect of any such breach. Prior to the fourth amended statement of claim, Mr McLellan says that the allegation had not previously been made in any form. Mrs Huljich is also now claiming an entirely new and different remedy, namely unquantified damages for loss of a chance. Mr McLellan submits that these differences in both the factual and legal bases for the claim are sufficiently material that the loss of a chance paragraphs constitute a new cause of action, despite the fact that they are not pleaded as such.

[75]   Mr McLellan submits that all the necessary elements of this new cause of action are alleged to have occurred between April and August 2009, more than six years before they were first pleaded on 1 December 2017. For example, Mrs Huljich pleads in paragraph 24 of the fifth claim that the defendants had the opportunity to repay the loan in August 2009 and they failed to do so.

[76]   Mr McLellan submits that these allegations cannot pass muster as contextual facts, necessary to understand an essential pleading. That argument is untenable in circumstances where the loss of a chance paragraphs constitute an entirely new substantive claim. In those circumstances, the loss of a chance paragraphs should not be permitted to circumvent a limitation defence.

[77]   Mr McLellan notes Mrs Huljich’s contention that the loss of a chance claim is not time-barred, as time did not begin to run until November 2014 (after Mrs Huljich

16     ISP Consulting Engineers Limited v Body Corporate 89408, above n 8, at [22].

commenced this proceeding), being the earliest date on which she says she had reasonable knowledge of the claim, due to dishonest concealment by the defendants. The argument is based on section 28 of the Limitation Act 1950, which has the effect of extending the limitation period in certain circumstances. Relevant to this case, the essential elements of s 28 are:

(1)the right of action has been concealed by fraud of the defendants or their agents; and

(2)the plaintiff did not discover the fraud, or could not with reasonable diligence have discovered it, until less than six years before the claim was filed.

[78]   Mr McLellan submits that Mrs Huljich has not provided any evidence, nor has she pleaded any particulars in her reply, in support of her claim that the loss of a chance claim was concealed by the defendants’ fraud. Nor has she provided any evidence or particulars to support her claim that she did not discover (and could not reasonably have discovered) the fraud until November 2014.

[79]   Mr McLellan acknowledges that a strike-out application proceeds on the basis of the facts alleged, but submits that the Court is not obliged to accept any assertion, no matter how implausible.

[80]   Mrs Huljich’s claim of fraudulent concealment is an example of an allegation that is so plainly untenable that the Court should not accept it. First, she has known all along what the relevant terms of the first and second loan agreements were, and there clearly could not have been any fraudulent concealment of that. Obviously the new alleged loan terms that she now relies upon were not concealed from her.

[81]   Mr McLellan then submits, by reference to affidavits filed by Mrs Huljich and Chris at earlier stages of this proceeding, that Mrs Huljich received bank statements for the loan accounts and could see what transactions had occurred. Notwithstanding that knowledge, her affidavit in support of her application for summary judgment made no mention of any agreement for the funds to be made available on a short-term

basis only and then reinvested on her behalf. Contrary to the allegation she now makes that the loan was to be repaid at the earliest opportunity, she said in one early affidavit, dated 3 October 2014, that, “(T)here was no definite time limit agreed. It was implicit in the first agreement that the debt would be repaid and I asked for that to happen.”

[82]   Mr McLellan acknowledges that in a later affidavit, dated 15 October 2015, Mrs Huljich did refer to having had an expectation that the loan would be repaid and invested, but she did not suggest that that was a term of the loan agreement. Nor did any of her letters to the defendants suggest that she believed they were under any obligation to repay the loan and invest the funds on her behalf.

[83]   Mr McLellan referred to a passage in Mrs Huljich’s affidavit of 15 October 2015 which was said to show that as early as October 2009 she was already concerned about the repayment issue she now raises. The relevant paragraph in the affidavit (paragraph 22(v)) states:

In October 2009, I went to Chris’ home for dinner together with my sister-in- law Sonja Milat. Whilst I was there Chris produced the chequebook to me and asked me to sign 5 more cheques … I went home feeling very sad that since Chris had asked me to pre sign five more cheques, Chris and Peter were not going to pay back the temporary mortgage loan and invest for me. My suspicions grew with each month as they never mentioned their intention of paying back the Kiwibank loan and then use the facility for me to invest with Peter.

[84]   Having regard to that evidence, Mr McLellan submits that the suggestion now made that Mrs Huljich reasonably lacked knowledge of the loss of a chance claim until November 2014 is completely untenable: there is no basis on which it could properly be alleged that the cause of action has been concealed by the defendants’ fraud. That is an improper allegation that should not have been made.

Submissions for Mrs Huljich

[85]   In his draft submissions, Mr Katz noted that a cause of action accrues when every fact exists that it would be necessary for Mrs Huljich to prove in order to support her right to judgment. In respect of the loss of a chance claim, the cause of action must accrue as at the time of the breach. The issue of if and when the breach occurred will be for the Court to determine at a substantive hearing.

[86]   Mr Katz accepted that there had to be a demand for the loan to be repaid before any breach could have occurred, as until a demand was made for the loan, there could have been no obligation to invest the funds. On that basis, the earliest the alleged breach could have occurred would have been 3 October 2014, being the date the summary judgment application was filed and demand was effectively made for repayment of the loan. On that basis, the loss of a chance claim was filed within the statutory time limit.

[87]   Mr Katz referred to a letter from Mrs Huljich to Chris dated 17 February 2014. He characterised the letter as one where Mrs Huljich was seeking a reassurance that the loan monies would be repaid. Mrs Huljich was not seeking specific repayment at the time, and it was then not necessary for the re-investment aspect to be raised by her. However, in a reply letter from Chris dated 3 March 2014, Chris specifically confirmed that 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 Mrs Huljich’s behalf for her benefit over the long term. In the same letter, Chris was said to have represented that the amount of $729,000 plus interest then owing on the loan was payable by his brother, Paul, and that Mrs Huljich should seek payment from Paul directly.

[88]   Mr Katz submitted that the contention that Paul personally owed the $729,000 plus interest to Mrs Huljich was an untenable misrepresentation. $486,000 of that sum had been paid to Paul not from Mrs Huljich’s funds, but from the working capital of the Huljich Brothers Partnership. A further $243,000 was paid to Paul through a series of blank cheques signed by Mrs Huljich and paid to him by Chris or Peter, but that occurred without Mrs Huljich’s knowledge. It was not until she received discovery in or about November 2014 that she became aware of the method in which payments had been made to Paul, and therefore became aware that any representations that Paul owed her the amount of $729,000 plus interest were false. This is pleaded in paragraph 32 of the fifth claim.

[89]   Subsequently the $486,000 was paid to Mrs Huljich from the sale of the Sydney apartment co-owned by Chris, Michael, and Paul (the $486,000 having been put into the apartment from the working capital of Huljich Brothers Partnership).

Discussion and conclusions on issue (2)

[90]   There was nothing to prevent Mrs Huljich from further amending her claim by adding an additional cause of action, if that is what she has done here, providing it was not statute-barred and she did so before the close of pleadings date.17 There is no issue over the latter – the close of pleadings date was 16 February 2018, and the fifth claim was filed on 1 December 2017. Time in a breach of contract case runs from the date of breach, so the limitation question would be whether the breach alleged by Mrs Huljich occurred before 1 December 2011 (the date six years before the new cause of action in contract was first pleaded).

[91]   To the extent the new cause of action alleges that Chris and Peter breached their obligations by failing to repay and re-invest in August 2009, the claim is clearly outside the six-year limitation period. However, that is not the case that was advanced in Mr Katz’s draft submissions – he accepted that no obligation to re-invest on Mrs Huljich’s behalf could have arisen before she had served a demand for repayment, and that did not occur until the proceeding was commenced in late 2014.

[92]   I think Mr Katz was correct in taking that view. Mrs Huljich’s claim as pleaded remains that the loans were repayable upon demand, and any alleged obligation on Chris and Peter to re-invest the loan funds on Mrs Huljich’s behalf could only have arisen if Chris and Peter had come under a prior obligation to treat the loan funds as belonging to Mrs Huljich (i.e. as if they had been repaid to her). As they had not repaid the loan funds, any such prior obligation would have arisen only if she had made a demand for repayment.

[93]   In those circumstances at least those parts of the loss of a chance paragraphs that allege breach by failure to re-invest on Mrs Huljich’s behalf in August 2009, or at any time before the proceeding was commenced and the payment demand is said to have been made, would have to be struck out. But the allegations of breach by failure to invest on Mrs Huljich’s behalf after the demand was made cannot stand either, as the demand for repayment that was part of the relief claimed by Mrs Huljich when she

17     High Court Rules, r 7.77 (2).

issued the proceeding was inconsistent with any ongoing duty on Chris and Peter to invest on Mrs Huljich’s behalf.

[94]   On that basis there is no need to consider Mrs Huljich’s alternative argument that the time limit was extended under s 28 of the Limitation Act 1950, due to dishonest concealment on the part of Chris and Peter.

[95]   Nor is there any need to consider whether the loss of a chance paragraphs form part of a new cause of action – in the view to which I have come the loss of a chance allegations are untenable in any event, and should be struck out regardless of whether they constitute a new cause of action.

[96]   The answer on Issue (3) is therefore “yes”, and there will be orders striking out subparagraph 18(e), paragraphs 23, 24, 25, 26, 33, 37, 38 and subparagraph (d) of Mrs Huljich’s claim for relief on her first cause of action.

[97]   I do not consider it appropriate to strike out all of paragraph 34 of the fifth claim. Many of the allegations in this paragraph (which is repeated as part of all other causes of action, including the new causes of action alleging breach of fiduciary duty against Chris and Peter) are not concerned with the central contentions that the loan was intended to be a short-term bridging loan only, and that Chris and Peter had an obligation to repay and re-invest on Mrs Huljich’s behalf. For example, the introductory part of paragraph 34 arguably provides relevant context for the sixth and seventh causes of action, and the particulars pleaded at subparagraphs 34(a) – (d) do not appear to be directed to the “loss of a chance” claim. Similarly, I do not think subparagraph (i) is necessarily restricted in its reach to the loss of a chance claim.

[98]   On the other hand, subparagraphs 34(e), (f) and (g) are clearly part of the contentions that I have found untenable. There will be an order striking out these subparagraphs. The rest of paragraph 34 will stand.

Issue 3 – Should some or all of the fiduciary duty paragraphs be struck out?

The defendants’ submissions

[99]   Mr McLellan submits that the sixth and seventh causes of action are time- barred under s 4 of the Limitation Act 1950, as both causes of action accrued more than six years before they were first pleaded in the fifth claim on 1 December 2017.

[100]   The only quantified loss Ms Huljich claims to have suffered from the alleged breaches in both causes of action (apart from her claims for damages for mental and emotional distress) is the $264,000 outstanding under the loan agreement. Mr McLellan submits that, for any alleged breaches of fiduciary duty to have had a causal connection with this loss, they must have occurred by 21 January 2010, which is the date of the last alleged payment out of the loan funds. In the sixth cause of action (against Chris), Mrs Huljich also pleads that she has suffered loss through her financial resources being depleted, but the pleading lacks particulars and is in substance no more than a repetition of the claim in respect of the $264,000 loan amount and the lifetime support allegations.

[101]   In response to Mrs Huljich’s contention in her notice of opposition and in her reply that these claims are not time-barred because dishonest concealment by Chris and Peter meant that she could not, with reasonable diligence, have had knowledge of the claims before November 2014, Mr McLellan submits that Mrs Huljich has provided no supporting evidence, nor pleaded any supporting particulars in her reply. He submits that the claim of fraudulent concealment is untenable because:

(1)Mrs Huljich agreed to and was involved in obtaining the loan;

(2)Mrs Huljich received bank statements for the loan account and could see what transactions occurred at the time; and

(3)Mrs Huljich was concerned as early as October 2009 that the loan had not been repaid (referring to Mrs Huljich’s affidavit of 15 October 2015, referred to at paragraph [83] of this judgment).

[102]   At all times Mrs Huljich had knowledge of all of the facts which are material to these two causes of action.

[103]   On the issue of whether Mrs Huljich was misled into believing that the balance of the loan was owed by Paul, and not by Chris and Peter, Mr McLellan refers to the bank records, and to the fact that Mrs Huljich acknowledged in her affidavit of 15 October 2015 that she met with Chris and Michael on 24 and 25 May 2012 to go through the records for the mortgage loan. Detailed records as to who had received the loan money were presented to her then. There could have been no fraud concealing any cause of action relating to that issue.

Submissions for Mrs Huljich

[104]   In his draft submissions, Mr Katz noted first that, pursuant to s 4(9) of the Limitation Act 1950, the six-year time limit prescribed under s 4 does not apply to any claim for equitable relief unless applied by the Court by analogy.18 Mrs Huljich has not made any submission as to how the equitable relief sought in the sixth and seventh causes of actions falls within the ambit of s 4 by way of analogy.

[105]   The remedies Mrs Huljich seeks in her sixth cause of action are damages for repayment of the loan ($264,000), equitable damages for financial losses (to be calculated), damages for mental and emotional distress, and exemplary damages. In her seventh cause of action, she claims damages for repayment of the loan ($264,000), damages for mental and emotional distress, and exemplary damages.

[106]   Mrs Huljich denies that these claims are statute-barred, but even if the Court were minded to make such a finding, Mr Katz submitted that, in respect of the alleged breach at paragraph 71(h)19 of the fifth claim, the breach constitutes an ongoing act and cannot be statute-barred in respect of failures occurring after 1 December 2011.

[107]   In respect of the alleged breaches arising from the failure to repay the second loan agreement, Mr Katz submitted that the earliest occasion when this cause of action

18     Johns v Johns [2004] 3 NZLR 202 (CA) at [68].

19     In this subparagraph, Mrs Huljich alleges that Chris “(H)as failed to meet obligations pursuant to the oral agreements and undertakings made to [Mrs Huljich] referred to in paragraph 12 above.”

could have accrued was 3 October 2014, being the date of the summary judgment application and the date on which Ms Huljich made demand for payment. However, he submitted that, pursuant to s 25(4) of the Limitation Act 1950, a fresh accrual of the cause of action occurred on 22 September 2014, being the date that the amount of

$486,000 was paid to Mrs Huljich – under s 25(4), the cause of action is deemed to have accrued as at the date of that last payment.

[108]   On the fraudulent concealment issue, Mr Katz referred to a letter from Chris to Mrs Huljich dated 3 March 2014, in which Chris advised Mrs Huljich that Paul had received the benefit of $729,000 of the loan and was liable to her for repayment of this amount plus interest. That claim was repeated by the defendants’ instructing solicitor on 4 April 2017.

[109]   Mr Katz submitted that those claims amounted to a concealment of the full facts. $486,000 had been paid to Paul from working capital through Huljich Brothers Partnership on account of drawings, and had not been paid from Mrs Huljich’s funds. In respect of the balance of $243,000, it was not until Mrs Huljich received discovery in or about November 2014 that she became aware of the method by which the payments had been made to Paul, and therefore became aware that any representations that Paul owed her the $729,000 plus interest were false.

[110]   Further in support of the fraudulent concealment claim, Mr Katz submitted that the fact that Mrs Huljich agreed to and was involved in obtaining the loan is not relevant to whether she had or could reasonably have had knowledge of how and to whom the funds had been disbursed. Nor is the fact that she may have received bank statements relevant to that question. No funds were paid by electronic transfer to Paul’s bank account, and the only payments made to Paul were made by cheque drawn by Chris or Peter (blank cheques signed by Mrs Huljich). The payee of these cheques was not recorded on the bank statements. Mrs Huljich’s concerns regarding repayment of the loan are also irrelevant to the issue of her knowledge of how and to whom the loan funds had been disbursed.

[111]   In response to the defendants’ submission that Chris made a full presentation to Mrs Huljich in May 2012, including detailed records as to who had received the

loan money, Mr Katz noted that Mrs Huljich does not allege that the relevant spreadsheet shown to her by Chris was itself fraudulent. The spreadsheet was a transactional record only, and did not prove or disclose that the $729,000 plus interest was payable by Paul. The fraudulent concealment arises from the assertions that it was Paul who owed the $729,000 plus interest, and that Mrs Huljich needed to seek repayment from him, without any further disclosure being made to her as to how the funds were actually disbursed to Paul.

[112]   Mr Katz noted that the defendants have also alleged abuse of process in support of all of their strike-out claims. He submitted that no grounds have been advanced to support that contention. At the time the trial date was set, Mrs Huljich clearly advised the Court and the defendants that an amended statement of claim was to be filed, and that further discovery would be required. Timetabling orders were made, and Mrs Huljich complied with those timetable orders. Mrs Huljich is entitled to have her claims heard by the Court, and delays to date have been contributed to by unsuccessful interlocutory applications and steps taken by the defendants, and not simply by Mrs Huljich amending her pleadings. And it is a circular argument for the defendants to claim that Mrs Huljich’s new claims may jeopardise the trial date, when the delay in hearing and determining of interlocutory applications (caused by the defendant) may also bring the trial date into jeopardy.

Discussion and conclusions

[113]   In his reply submissions Mr McLellan accepted that the six year limitation period imposed by s 4 of the Limitation Act 1950 may apply by analogy to a breach of fiduciary duty claim, depending on the nature of the alleged breach. He also accepted that the question of whether the payment of $486,000 made in September 2014 had the effect of extending – or “refreshing” – the limitation period on the claim against Chris for recovery of the $264,000 balance owing under the second loan agreement (under s 25(4) of the Limitation Act 195020) will require further evidence

20     Section 25 of the Limitation Act 1950 materially provides:

25 Fresh accrual of action on acknowledgement or part payment

…

(4) Where any right of action has accrued to recover any debt or other liquidated pecuniary claim,

… and the person liable or accountable therefor acknowledges the claim or makes any payment

and cannot be dealt with on a strike-out application. He withdrew the application insofar as subparagraph 71(g) is concerned.

[114]   However, Mr McLellan maintained the submission that s 25(4) applies only to the sixth cause of action to the extent that it seeks to recover debt – it does not apply to the claims for unliquidated damages, including equitable damages, exemplary damages, and damages for mental and emotional distress. He also submitted s 25(4) can have no application to the seventh cause of action, as no payment was made by Peter.

[115]   The breaches of fiduciary duty alleged against Chris are pleaded at paragraph 71 of the fifth claim.

[116]   I do not think the breaches alleged at subparagraphs 71(a) and (b) are statute- barred. By analogy with the time limit imposed for contract claims by s 4 of the Limitation Act 1950 (six years from date of breach), the cause of action based on these subparagraphs had to accrue not earlier than 1 December 2011 if it was to be in time, and it is alleged that it did. The Sovereign loan was not taken out until 2012, and the defendants now accept that the claim for the $264,000 was effectively refreshed (as against Chris) by s 25(4) of the Limitation Act and is not out of time. The strike-out application will be dismissed insofar as it is based on the breaches of fiduciary duty alleged in these subparagraphs.

[117]   Turning to the remaining subparagraphs of paragraph 71, I am not prepared to strike out subparagraphs 71(c) – (f) at this stage. Further particulars of these subparagraphs will be required, and I am not able to determine on a strike-out application whether the allegations at subparagraphs (c) and (d) (to the extent they are based on events occurring before 1 December 2011, to which a six year time limit running from the dates of the events might apply) might be saved by s 28 of the Limitation Act 1950. Consideration of the s 28 issues will require a more detailed examination of the facts than is possible on the limited evidence available on a strike- out application, and it is better left for trial.

in respect thereof, the right shall be deemed to have accrued on and not before the date of the acknowledgement or the last payment. …

[118]   As for subparagraphs 71(e) and (f), further particulars will again be required, identifying the alleged acts relied upon, and when they are said to have taken place. I decline to strike these subparagraphs out at this stage, but leave will be reserved to the defendants to apply to bring their strike-out application back on for hearing (insofar as it relates to these subparagraphs) within five working days of Mrs Huljich providing the further particulars I have mentioned.

[119]   Turning to paragraph 71(h), I accept that a six year time limit, running from the dates of alleged breach, should apply by analogy to the claim of failure to comply with the alleged 1986 oral agreement and undertakings. There appears to be little in practical terms to distinguish this alleged breach of fiduciary duty from a breach of contract case, so the ordinary six year time limit for a breach of contract case should apply by analogy.

[120]   There is no s 28 question here of concealment of the cause of action – Mrs Huljich knew what the alleged undertakings and agreements were, and she knew what she had and had not received under them. The result is that the claim for breach of the oral agreements and undertakings referred to in paragraph 12 pleaded at subparagraph

(h) of paragraph 71, will be struck out to the extent that the breaches are said to have occurred before 1 December 2011.

[121]   In respect of the period after that date, I accept Mr Katz’s submission that the 1986 oral agreements and obligations were – at least arguably – intended to impose serial ongoing obligations, with a fresh cause of action accruing in respect of each (alleged) failure to provide the overseas holiday, or the new vehicle, or other benefit Mrs Huljich might prove was not provided as it allegedly should have been. In reaching that view I take into account the unusual nature of the alleged obligations, involving as they do the ongoing maintenance and support of an elderly lady. The position is not sufficiently clear for me to conclude, on the basis of the pleadings alone, that the parties did not intend to create serial obligations of the kind to which I have alluded, the breach of each of which would give rise to a fresh cause of action. I decline to strike out paragraph 71(h) to the extent the breaches are alleged to have occurred on or after 1 December 2011.

[122]   I do not consider that the pleading of the relief claimed on either the sixth or seventh causes of action can or should affect the result of the strike-out application, which is based only on limitation grounds (although further particulars of the claim for equitable damages will be required).

[123]I now turn to the seventh cause of action, against Peter.

[124]   The allegations of breach against Peter are set out in paragraph 78 of the fifth claim. They are identical to the allegations of breach made against Chris, except that paragraph 71(h) (alleged failure to comply with the 1986 agreements and undertakings) is not repeated in the allegations against Peter.

[125]   I think substantially the same reasons and results must apply to the application to strike out the seventh cause of action against Peter as applied in respect of the sixth cause of action against Chris. Paragraphs 78(a) and (b) do not appear to allege breaches of fiduciary duty occurring before 1 December 2011, and they will stand. Paragraphs 78(c) and (d) (responsibility for unauthorised transactions on Mrs Huljich’s bank account, and alleged failure to account to her for those transactions) are insufficiently particularised, and may raise issues under s 28 of the Limitation Act 1950 which are better left for trial. Further particulars will be required of subparagraphs 78(e) and (f), identifying the acts relied upon and when they are said to have taken place. I decline to strike out subparagraphs 78(e) and (f) at this stage, but leave will be reserved to the defendants to apply to bring their strike-out application back on for hearing (insofar as it relates to these two subparagraphs) within five working days of Mrs Huljich providing the further particulars I have mentioned.

[126]   Turning to subparagraph 78(g), relating to the failure to repay the $264,000 to Mrs Huljich, I accept that s 25(4) of the Limitation Act would not apply if Peter did not make or contribute to the payment of the $486,000. But I do not consider that assists the defendants. The $264,000 would not have been repayable unless and until demand was made for repayment by Mrs Huljich, and there is no present suggestion that a demand was made by her before 1 December 2011. I decline to strike out the seventh cause of action insofar as it is based on the alleged breach at paragraph 78(g) of the fifth claim.

Issue 4 - If and to the extent that the defendants are unsuccessful in having the lifetime support paragraphs, the loss of a chance paragraphs and the fiduciary duty paragraphs struck out, should the parts which are not struck out be deferred for consideration at a later trial, after the trial scheduled to commence on 9 July 2018?

[127]   To the extent that the defendants’ strike-out application has been unsuccessful in respect of the following paragraphs, the defendants ask in the alternative that certain of the new paragraphs pleaded in the fifth claim be deferred, with any discovery which may be required in relation to them, to a second trial, to take place after the trial presently scheduled for 9 July 2018.

[128]   The particular paragraphs in the fifth claim the defendants say should be tried separately are:

(a)  the lifetime support paragraphs;

(b)  the breach and quantum elements of the loss of a chance paragraphs (namely, paragraphs 24, 26, and paragraph (d) of the claim for relief in the first cause of action in the fifth claim); and

(c)  those elements of the sixth cause of action that relate to the lifetime support allegations (paragraphs 68, 71(h), 73 and paragraph (b) of the claim for relief).

[129]   Mrs Huljich opposes the application for separate trials. In his draft submissions, Mr Katz submitted that the application for split trials flies in the face of the defendants’ assertion that the matter needs an expeditious resolution. He suggested that the defendants’ primary purpose in seeking a split trial was to defer the need to provide discovery on the issues arising out of the “new claims”.

Legal principles applicable to staged trial orders

[130]   The defendants rely on r 10.4 and r 10.15 of the High Court Rules. Those rules provide:

10.4     Court may order separate trials

When justice requires, the court may order separate trials of causes of action and it may also direct the sequence of the separate trials and make any supplementary order that is just.

(c)if the documents are in the person’s control, to make those documents available for inspection, in accordance with rule 8.27, to the other party or parties.

[164]   In Assa Abloy New Zealand Ltd v Allegion (New Zealand) Ltd, the Court followed a four-stage approach in considering an application under r 8.19:31

(1)Are the documents sought relevant, and if so how important will they be?

(2)Are there grounds for belief that the documents sought exist? This will often be a matter of inference. How strong is that evidence?

(3)Is discovery proportionate, assessing proportionality in accordance with Part 1 of the Discovery Checklist in the High Court Rules?

(4)Weighing and balancing these matters, in the Court’s discretion applying r 8.19, is an order appropriate?

31     Assa Abloy New Zealand Ltd v Allegion (New Zealand) Ltd [2015] NZHC 2760 at [14].

Documents sought in categories (1) and (3)

[165]   The documents in these two categories appear to relate only to the allegations in the loss of a chance paragraphs, which I have struck out. As such, the documents are not relevant to any issue in the proceeding.

[166]   I add in respect of the category (3) documents (documents relating to investments made by Chris and Peter since 2009, and their true rate of return) that I would not in any event have considered it proportionate to order discovery. The ultimate issue would have been the return Mrs Huljich would have obtained if the loan funds had been reinvested on her half, and that is a matter for objective evidence about investment opportunities at the relevant times, and the returns available on them. Disclosure of the details of Chris’ and Peter’s personal investments would be neither necessary nor proportionate in those circumstances.

Documents sought in category (2) – all documents pertaining to Mrs Huljich’s shareholding portfolio managed on her behalf by Peter

[167]   Mrs Huljich says that Peter told her in June 2008 that he had made only one investment on her behalf, namely an investment of approximately $156,000 in a company called Just Water. But in their fourth amended statement of defence the defendants referred to a June 2008 discussion Mrs Huljich had with Peter “regarding her remaining investments”.32

[168]   In her written submissions Ms Woodroffe submitted that the defendants have accepted that the documents relating to the Just Water investment were discoverable (and have been discovered), and she submitted that any other investments held by Mrs Huljich at that time are relevant to the issue of what was discussed and agreed between Mrs Huljich and Peter at this time. She submitted that the documents relating to Mrs Huljich’s shareholding portfolio as managed by Peter are also material to this issue.

[169]   In her submissions in opposition, Ms Cooper submitted that the defendants provided discovery of documents relating to the sale of Mrs Huljich’s Just Water

32     Fourth amended statement of defence, paragraph 52; repeated at paragraph 86 of the defendants’ statement of defence to the fifth claim.

shares in their joint affidavit sworn on 26 November 2015. She submitted that no allegations have been made about any other aspect of Mrs Huljich’s share portfolio, and accordingly no other documents are relevant.

[170]   As for the defendants’ reference to the plural “investments” at paragraph 86 of their defence to the fifth claim, Ms Cooper submitted that the use of the plural rather than the singular noun “does not necessarily indicate any disagreement over this issue”. But even if there was a disagreement it would be inconsequential to the matters in issue.

[171]   I have declined to strike out paragraph 34(i) of the fifth claim, which is repeated in, and forms part of, the claim against Peter for alleged breaches of fiduciary obligation. For convenience, I set out paragraph 34(i) below:

34 [Mrs Huljich], as the elderly mother and grandmother of [Chris and Peter], was vulnerable to their actions and subjected to financial elder abuse by [Chris and Peter].

Particulars

…

(i)As a result of the management of her shares by [Peter], the alleged renovations costs owed to [Chris] (referred to in Part C below), the gifting of funds to her grandchildren and the drawdown of the funds to financially assist [Chris and Peter], [Mrs Huljich] suffered financial loss and became completely financially dependent.

[172]   At paragraph 78(f) of the fifth claim, Mrs Huljich alleges that Peter acted in breach of his fiduciary obligations to her by acting “in a manner that abused the trust and confidence that [Mrs Huljich], as his elderly grandmother, had in him”. While paragraph 78(f) has not been properly particularised, Mrs Huljich does plead that she has suffered loss in the form of mental and emotional distress, and she seeks damages for that alleged loss.

[173]   In those circumstances, I do not think it is possible to say that none of the documents in category 2 are relevant to an issue pleaded (but not yet adequately particularised) in the fifth claim.

[174]   I take from Ms Cooper’s submissions that the exercise of providing documents pertaining to Mrs Huljich’s shareholding portfolio, at least as at June 2008, would not be oppressive – as I understood her submissions, the JustWater investment was then the only investment Peter was managing on Mrs Huljich’s behalf. I note too that Mrs Huljich said in the fifth claim33 that Peter ceased investing funds on her behalf in 2012.

[175]   Having regard to those considerations, I direct that Peter is to file and serve an affidavit, within 10 working days, confirming (if it is the case) that the only share investment he managed on Mrs Huljich’s behalf between June 2008 and 2012 was the JustWater share investment. If other share investments were made in that period on Mrs Huljich’s behalf, details of those investments are to be stated in the affidavit, and disclosure of relevant documents provided.

[176]   Without a clearer pleading from Mrs Huljich of her breach of fiduciary duty claims against Peter, I am not prepared to direct discovery under this heading in respect of any period prior to June 2008 or after March 2012.

Documents sought in category (4) – “all documents pertaining to the renovation undertaken on Mrs Huljich’s property in 2007, including (but not limited to) contractors’ invoices and payments either by the defendants or by Mrs Huljich from the sale of her shares by Peter”

[177]   In her written submissions, Ms Woodroffe noted the defendants’ claim that all documents in this category have been discovered. She asked for a direction that the defendants file an affidavit to that effect.

[178]   In her submissions in opposition, Ms Cooper advised that four additional documents in this category were located and provided to Mrs Huljich on 8 December 2017. She accepted that a supplementary affidavit should be filed in respect of these documents, but submitted that there is no evidential basis for any further order.

[179]   I accept Ms Cooper’s submission, and direct that, within 10 working days of the date of this judgment, the defendants are to file and serve a supplementary verified

33     At paragraph 34(e).

list disclosing the four additional documents referred to by Ms Cooper at paragraph 24 of her written submissions dated 15 March 2018.

Documents sought in category (5) – “documents pertaining to Chris’ and Peter’s financial positions as at April 2009 to May 2012 (the dates of the first and second loan agreements referred to in the fifth claim”

[180]   In her written submissions, Ms Woodroffe submitted that these documents are relevant to the purpose of the loan, liability for its repayment, and to the loss of a chance allegations. When Michael’s Sydney property was sold in August 2009, Ms Woodroffe submitted that if any of the proceeds of sale were paid to Chris or Peter that would be relevant to their financial positions during the periods of the first and second loan agreements (which would in turn be relevant to the purpose for which the loans were required, and in particular whether the funds were still required by Chris and Peter in 2012 to assist their financial situation).

[181]   Ms Cooper submitted that the documents sought are irrelevant, and the request manifestly disproportionate. The financial positions of Chris and Peter cannot bear on the central issues of what were the terms of the alleged oral loan agreement, and who were the parties.

[182]   I accept Ms Cooper’s submissions on this part of the application. Chris’ and Peter’s financial positions cannot be relevant to the terms of the loan agreements or the parties who would be liable thereon, and I have struck out the loss of a chance paragraphs, including Mrs Huljich’s claim of alleged loss caused by Chris and Peter failing to invest on her behalf when the opportunity to do so allegedly arose on the sale of the Sydney property in August 2009. The application for particular discovery of this category of documents is dismissed.

Documents sought in category (6) – “all documents pertaining to overseas holidays, new vehicles, funds for financial investments and funds for renovation works (prior to the renovation referred to in Part C of the fifth claim) that have been advanced to Mrs Huljich by either Chris, Peter or Michael.”

[183]   Ms Woodroffe submitted that these documents are relevant to Mrs Huljich’s allegations at paragraph 12 of the fifth claim (and consequentially to her claim for relief (d) in the sixth cause of action). She submitted that the defendants have admitted

that prior to 2012 Chris and Michael provided Mrs Huljich with overseas holidays and “other gifts”, and that documents relating to the admitted holidays and gifts are relevant.

[184]   Ms Cooper again submitted that these documents are irrelevant, and the request for them manifestly disproportionate. She submitted that the request is hopelessly broad and ill-defined, and it is not clear how the documents sought would be relevant to any matter in issue. Chris and Michael admit at paragraph 13 of the statement of defence to the fifth claim that, prior to 2012, they (with Paul) provided Mrs Huljich with overseas holidays and other gifts. There is no issue about whether this occurred; the only issues are whether they had any legal obligation to do these things, or to continue to do so. In addition, the sweeping scope of the discovery sought is unreasonable and oppressive.

[185]   I accept Ms Cooper’s submissions on this part of the application, and the request for particular discovery under this heading is dismissed accordingly. There is no dispute that Mrs Huljich was provided with the overseas holidays and other gifts, and to be relevant for discovery purposes a document must generally be material to some dispute disclosed by the pleadings (statements of claim and defence), in the sense that the document would advance one party’s case or damage the other party’s case. Here, there is no such disputed issue, and the issues appear to be those identified by Ms Cooper: were Chris and Michael obliged to provide the overseas holidays and other gifts, and if so did they breach some (pleaded) contractual or other obligation when they stopped providing them?

[186]   I also agree with Ms Cooper that it would be oppressive to require the defendants to provide what could be quite extensive discovery, where that discovery is likely to provide little assistance on the issues to be determined at trial.

[187]The application for particular discovery under this heading will be dismissed.

RESULTS

[188]The results of the two applications are as follows.

The defendants’ application

(1)Paragraphs 18 (subparagraph (e) only), 23, 24, 25, 26, 33, 34 (subparagraphs (e), (f) and (g) only), 37 and 38 of the fifth claim, and subparagraph (d) of the claim for relief on the first cause of action, are struck out.

(2)Paragraph 71(h) of the fifth claim is struck out to the extent Mrs Huljich relies on any breaches allegedly committed before 1 December 2011.

(3)Subject to orders (1) and (2) above, the defendants’ application to strike out parts of the fifth claim is refused.

(4)The defendants’ application for staged trials in respect of particular parts of the lifetime support paragraphs, the loss of a chance paragraphs and the fiduciary duty paragraphs that have not now been struck out, and for deferred discovery in respect of those paragraphs, is refused.

(5)Mrs Huljich is ordered to provide further and better particulars of the fifth claim as directed at paragraph [155] – [159] of this judgment, within 15 working days of the date of this judgment. These further and better particulars are to be incorporated in a sixth amended statement of claim, which is to be filed and served within the 15 working days. For the avoidance of doubt, the direction to file and serve the sixth amended statement of claim is not intended to be a grant of leave to Mrs Huljich to amend the fifth claim after the close of pleadings date, except as may be strictly necessary to provide the specific further particulars she has been ordered to provide.

(6)Leave is reserved to the defendants to apply by memorandum, within five working days of the filing and service of Mrs Huljich’s sixth amended statement of claim, to bring back on for hearing their strike- out application insofar as it relates to the allegations at paragraphs 71(e) and (f), and 78(e) and (f), of the fifth claim.

(7)Costs – the application has been successful in part and unsuccessful in part. Mrs Huljich has succeeded on one aspect of her application for particular discovery, and failed on the others. In those circumstances,  I think the fairest course may be to reserve costs on the defendants’ application. However, I did not hear submissions on costs, and Mr McLellan did ask to be heard on the issue. If the parties are unable to agree, the defendants may file and serve a memorandum on costs within 15 working days. Any memorandum in reply from Mrs Huljich is to be filed and served within 10 working days of her receipt of the defendants’ memorandum.

Mrs Huljich’s application

[189]   I make orders that, within 10 working days of the date of this judgment, Peter is to file and serve the further affidavit referred to paragraph [175] of this judgment, and the defendants are to file and serve the further affidavit referred to at paragraph

[179] of this judgment. Subject to those orders, Mrs Huljich’s application for particular discovery is refused.

[190]   If the parties are unable to agree on costs memoranda may be filed. Any memorandum by the defendants is to be filed and served within 15 working days. Any memorandum in reply from Mrs Huljich is to be filed and served within 10 working days of the her receipt of the defendants’ memorandum.

FURTHER DIRECTIONS

[191]   I will refrain from making any further directions at this stage. If either party considers that the trial scheduled for 9 July 2018 should be adjourned (because of any impact of the orders made in this judgment or for any other reason), a formal application for adjournment should be filed and served by not later than 21 May 2018. Any such application is to be referred to the Auckland Civil List Judge for determination. By the same date, any party contending that the trial can and should proceed as scheduled on 9 July 2018 is to file and serve a memorandum setting out

any proposed amendments to the existing timetable orders that are considered necessary or appropriate to allow the trial to proceed on that date.

Associate Judge Smith

SCHEDULE

Particulars sought in relation to the fifth claim Paragraph 5

1.Provide particulars of the alleged partnership including:

a.The date or dates on which the partnership was formed;

b.Whether the partnership agreement was written or oral;

c.The terms of the partnership agreement and whether they were express or implied;

d.The name of the partnership; and

e.The purpose and/or business of the partnership.

Paragraph 8

2.Provide particulars of the manner and circumstances in which it is alleged the first defendant “initiated” the property transactions alleged in paragraph 8, including details of what consultation with the plaintiff took place prior to the transactions.

Paragraph 12

3.Provide particulars of each of the oral agreements and undertakings alleged including details of:

a.The date or dates of each of the alleged oral agreements and undertakings;

b.The terms of the alleged oral agreements and undertakings and whether they were express or implied;

c.By whom and to whom each statement relied on as forming part of the alleged oral agreements and undertakings was made;

d.The time, place and circumstances in which each statement relied on as forming part of the alleged oral agreements and undertakings was made.

Paragraph 13

4.Provide particulars of the actions by which the alleged agreement was adhered to by the first and third defendants including the time, place and circumstances of such actions and by whom they were carried out.

Paragraph 14

5.Provide particulars of the actions or omissions by which it is alleged the first and third defendant have breached the alleged agreements and undertakings since 2007 including details of:

a.The specific terms of the alleged agreements and undertakings which have been breached;

b.The acts or omissions by which they were breached;

c.The date or dates on which the breaches occurred; and

d.Whether each of the breaches was by the first or third defendant or both.

Paragraph 15

6.Provide particulars of the “financially precarious” position which the plaintiff alleges she is in, including details of:

a.The current assets and liabilities of the plaintiff; and

b.The sources of income of the plaintiff.

Paragraph 23

7.Provide particulars of the alleged express or implied term including:

a.Whether it was an express or implied term;

b.If it was an express term, whether it was written or oral, and the specific words used either in writing or orally that constitute the term;

c.If it was an implied term, the basis on which the plaintiff says it should be implied;

d.Whether the term provided for a specific period for the “short term bridging loan” and, if so, when it is alleged the loan was required to be repaid; and

e.Whether the term specified how the funds were to be invested once repaid and whether this was to occur in consultation with the plaintiff or without further reference to her.

Paragraph 26

8.Provide particulars of:

a.The alleged fraudulent misrepresentation, including:

i.  whether the representation was written or oral;

ii.  the precise words used;

iii.  who made the representation;

iv.  the date or dates on which the representation was made;

v.    the place, time and circumstances in which the representation was made;

vi.  the basis on which it is alleged that the representation was untrue; and

vii.   the basis on which it is alleged the representation was fraudulent, including any facts relied on as showing that the first and/or second defendant knew the representation to be untrue; and

b.The alleged financial benefits which would have accrued to the plaintiff.

Paragraph 32(e)

9.     Provide particulars of how it is alleged that the spreadsheet was a fraudulent misrepresentation including:

a.The basis on which it is alleged that the spreadsheet was untrue; and

b.The basis on which it is alleged the spreadsheet was fraudulent, including any facts relied on as showing that the first, second or third defendants knew the spreadsheet to be untrue at the time it was provided to the plaintiff.

Paragraph 32(g)

10.Provide particulars of how it is alleged that the first and second defendants fraudulently misrepresented to the plaintiff that the amount of $729,000 was owed to her by Paul including:

a.Details of the representation relied upon, including the date, location and circumstances in which the representation was made;

b.The basis on which it is alleged that the representation was untrue; and

c.The basis on which it is alleged the representation was fraudulent, including any facts relied on as showing that the first or second defendants knew the representation to be untrue at the time it was made.

Paragraph 33

11.Provide particulars of how it is alleged the first and second defendants should have invested funds on behalf of the plaintiff including:

a.What authority from the plaintiff the first and second defendants had or required to make the investments;

b.The date or dates on which the investments should have been made;

c.The nature of the investments that should have been made;

d.The amount of the funds that should have been placed in each investment; and

e.The term of the investments.

Paragraph 34(a)

12.Provide particulars of the date on which the plaintiff signed a power of attorney in favour of the second defendant.

Prayer for relief in respect of first cause of action

13.Provide particulars of the interest paid by the plaintiff on the Sovereign loan since the first and second defendants stopped paying interest.

14.Provide particulars of the alleged loss arising from the loss of a chance to invest the loan funds alongside the first and second defendants and the manner in which this has been calculated.

Paragraph 34(b)

15.Provide particulars of the date on which the plaintiff authorised the second defendant to manage a portfolio of shares, whether the authorisation was written or oral, and the terms of that authorisation.

Paragraph 34(e)

16.Provide particulars of when, how and from whom it is alleged that the plaintiff became aware that the second defendant had ceased to invest funds on her behalf and particulars of the funds which he had ceased to invest.

Paragraph 34(i)

17.Provide particulars of the financial loss alleged to have been suffered by the plaintiff and the facts and circumstances relied on to support the allegation that she is completely financially dependent.

Paragraphs 36, 37 and 38

18.Provide particulars of:

a.When and how demand was made by the plaintiff for repayment of the Sovereign loan;

b.When it is alleged that the first and second defendants ought to have repaid the Kiwibank and Sovereign loans;

c.What investments it is alleged they ought to have made; and

d.The profits which it is alleged the plaintiff has lost.

Paragraph 56

19.Provide particulars of the conduct which is alleged to constitute misleading and deceptive conduct, including:

a.The nature of the conduct and, if it consists of representations, whether they were written or oral and the precise words used;

b.The date or dates of the conduct;

c.The place, time and circumstances in which the conduct occurred;

d.The basis on which it is alleged that the conduct was misleading and deceptive; and

e.Whether it was conduct of the first or second defendant or both.

Prayer for relief in respect of fourth cause of action

20.Provide particulars of the interest paid by the plaintiff on the Sovereign loan since the first and second defendants stopped paying interest.

21.Provide particulars of the rate of interest for which the plaintiff is liable for the Sovereign debt.

Paragraph 67

22.Provide particulars of the alleged agency relationship between the plaintiff and first defendant including:

a.When the alleged agency was entered into;

b.Whether the agency agreement was written or oral, and express or implied;

c.The scope and terms of the alleged agency and in relation to each term, whether it was express or implied;

d.If the agency agreement or any term was implied, the basis on which it is alleged it should be implied.

Paragraph 68

23.Provide the particulars requested above in relation to paragraph 12.

Paragraphs 71(a) and (b)

24.Provide particulars of how it is alleged that the first defendant fraudulently misrepresented to the plaintiff that the full amount or

$264,000 of the Sovereign loan was owed to her by Paul including:

a.details of the representations relied upon, including the date, location and circumstances in which each representation was made;

b.the basis on which it is alleged that each representation was untrue; and

c.the basis on which it is alleged that each representation was fraudulent, including any facts relied on as showing that the first defendant knew the representation to be untrue at the time it was made.

Paragraph 71(g)

25.Provide particulars of the alleged demand from the plaintiff to the first defendant to repay the sum of $264,000 to the plaintiff including the date of the demand and whether it was written or oral.

Paragraph 71(h)

26.Provide particulars of the obligations that it is alleged the first defendant has failed to meet and the manner in which he has failed to meet them.

Paragraph 73

27.Provide particulars of the financial resources which the plaintiff says have been depleted and the financial needs and requests which she alleges have not been met, including:

a.The date or dates on which the requests were made;

b.The terms of the requests;

c.How the requests were made and whether they were written or oral;

d.To whom the requests were made; and

e.The responses that were received to the requests.

Prayer for relief for sixth cause of action

28.Provide particulars of the financial losses alleged to have been suffered by the plaintiff for the breach of agreements and undertakings referred to in paragraph 12.

Paragraph 76(a)

29.Provide particulars of the alleged fiduciary relationship between the plaintiff and second defendant including:

a.When the alleged financial adviser relationship was entered into;

b.The scope and terms of the alleged financial adviser relationship;

c.Whether the alleged financial adviser relationship was written or oral, and express or implied;

d.When the plaintiff gave the second defendant a power of attorney and the period for which this was held;

e.The basis on which it is alleged that the second defendant acted as agent for the plaintiff and the scope and terms of the alleged agency.

Paragraph 78(a) and (b)

30.Provide particulars of how it is alleged that the second defendant fraudulently misrepresented to the plaintiff that the full amount or

$264,000 of the Sovereign loan was owed to her by Paul including:

a.Details of the representation relied upon, including the date, location and circumstances in which the representation was made;

b.The basis on which it is alleged that the representation was untrue; and

c.The basis on which it is alleged the representation was fraudulent, including any facts relied on as showing that the second defendant knew the representation to be untrue at the time it was made.

Paragraph 78(g)

31.Provide particulars of the alleged demand from the plaintiff to the second defendant to repay the sum of $264,000 to the plaintiff including the date of the demand and whether it was written or oral.

Paragraph 95

32.Provide particulars of the basis on which it is alleged that the statement by the second defendant was untrue and the basis on which it is alleged the second defendant knew, or had no belief in or was reckless as to whether the representation was untrue.

Paragraph 100

33.Provide particulars of the conduct which is alleged to constitute misleading and deceptive conduct including:

a.The nature of the conduct and, if it consists of representations, whether they were written or oral and the precise words used;

b.The date or dates of the conduct;

c.The place, time and circumstances in which the conduct occurred; and

d.The basis on which it is alleged that the conduct was misleading and deceptive.

Paragraph 115

34.Provide particulars of when and where the alleged promise was made, the precise terms of the promise, and whether it was made orally or in writing.

Paragraph 116

35.Provide the particulars requested above in relation to paragraph 12.

Paragraph 130

36.Provide particulars of the conduct which is alleged to constitute misleading and deceptive conduct including:

a.          The nature of the conduct and, if it consists of representations, whether they were written or oral and the precise words used;

b.The date or dates of the conduct;

c.The place, time and circumstances in which the conduct occurred; and

d.The basis on which it is alleged that the conduct was misleading and deceptive.