Huljich v Huljich

[2017] NZHC 977

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-002631 [2017] NZHC 977

BETWEEN

ELIZABETH HULJICH

Plaintiff

AND

CHRISTOPHER PETER HULJICH First Defendant

AND

PETER KARL CHRISTOPHER HULJICH

Second Defendant

AND

PAUL RICHARD HULJICH Third Party

Hearing:	28 November 2016
Appearances:	O Woodroffe and A Woodroffe for Plaintiff D H McLellan and J S Cooper for Defendants Third Party in Person
Judgment:	15 May 2017

JUDGMENT OF ASSOCIATE JUDGE SARGISSON

This judgment was delivered by me on 15 May 2017 at 3.30 p.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date.......................................

Solicitors:

PCW Law Ltd, Auckland
Harmos Horton Lusk, Auckland

D H McLellan / J S Cooper, Auckland

O Woodroffe, Auckland

HULJICH v HULJICH [2017] NZHC 977 [15 May 2017]

Introduction

[1]      This interlocutory application arises out of proceedings relating to fractured relationships in Mrs Huljich’s family.  A key issue in these proceedings is who owes Mrs Huljich the unpaid balance of approximately $264,000 on an on-demand loan of

$750,000. Two of Mrs Huljich’s sons are already parties to the proceeding.

[2]      Mrs  Huljich  seeks  leave  under  High  Court  Rule  4.56  for  the  joinder of another  of  her  sons,  Michael,  to  the  proceeding,  and  also  to  file  an  amended statement of claim adding him as a defendant. For the reasons that follow, I consider it appropriate that leave be granted.

Back-story

[3]      The back-story runs as follows. Mrs Huljich says the entire loan was made to her son, Christopher, and she would like him to pay it back. She has therefore sued him for payment.  Christopher, for his part, agrees the loan was to him, but also to his brothers, Michael and Paul. Christopher says that Paul is liable for the balance under the terms of the agreement with Mrs Huljich, as it is Paul alone who has not paid Mrs Huljich back what was drawn from the loan monies for him. Christopher has accordingly joined Paul as a third party.

[4]      Paul says he is not liable because the money he received was paid to him by Christopher and Michael, to repay a debt that they owed him.  He says it must be the case that one or both of them are liable to repay what remains owing to Mrs Huljich.

[5]      Mrs Huljich, who is in her eighties,  simply wants her money back.  Her position is that her agreement was with Christopher and Christopher alone.  She does not believe Christopher’s contentions are right. But she says that if for some reason she should be proved wrong in saying the agreement was simply with him, she would like the unpaid balance back from whoever borrowed it, whether Christopher, Paul, or Michael.

[6]      It  is  on  this  basis  that  she  applies  for  the  joinder.  The  grounds  for  the application are essentially that Michael Huljich could and possibly ought to have been joined at the outset; but in any case that his presence is now necessary to adjudicate on and to settle the question of which of Mrs Huljich’s sons owes her the outstanding balance of $264,000 on the loan.

[7]      Paul Huljich supports the application. However, Christopher Huljich opposes the  application,  along  with  his  son  Peter  Huljich  (who  is  named  as  second defendant).

[8]      The opposition relies principally on a factual analysis of affidavit evidence that has been filed to date in this proceeding. Christopher and Peter say that the documentary evidence before the Court clearly shows that the unpaid balance of the debt is traceable back to Paul. In the alternative, they contend that a claim against Michael would be time-barred anyway, as the advance was made on 21 January

2010.  Either  way,  they  say there  is  no  viable  cause  of  action  against  Michael. Christopher and Peter further say that the delay caused by allowing joinder at this stage would unfairly prejudice them as defendants.

Decision

[9]      The application is made under High Court Rule 4.56, which relevantly states:

4.56 Striking out and adding parties

(1) A Judge may, at any stage of a proceeding, order that—

…

(b) the name of a person be added as a … defendant because—

(i) the person ought to have been joined; or

(ii)  the  person’s  presence  before  the  court  may  be  necessary  to adjudicate and settle all questions involved in the proceeding.

(2) An order does not require an application and may be made on terms the

Court considers just.

[10]     For the purposes of r 4.56 there are two enquiries:

(a)       Whether the Court has jurisdiction to make an order for joinder;

(b)Secondly  if  jurisdiction  is  established,  whether  the  Court  should exercise its discretion in favour of or against joinder.

[11]     I am satisfied there is jurisdiction to make an order.  I am also satisfied as a matter of discretion that on the material presently before the Court, that there should be an order.

[12]     The presence of all three of Mrs Huljich’s sons is needed to determine the dispute over which of them is liable for repayment of the unpaid balance of the loan that Mrs Huljich made to, or via, Christopher.

[13]     There is no dispute that she is owed $264,000, but there is a genuine question as to which son is liable to pay. It may well be that Mrs Huljich’s primary contention is right. But if Christopher is right that the loan monies received by Paul remains unpaid, then this rather begs the question of whether that money was drawn by Christopher and Michael to repay a debt they owed to Paul. As Paul points out, even if the funds can be traced from Mrs Huljich’s account to his account, that is not determinative of whether he borrowed the funds or whether Christopher and Michael uplifted them to pay the debt they (allegedly) owed him.

[14]     Plainly this is a case where there should be joinder to determine what the correct position is.

[15]     I turn to the alternative argument (made with a denial of liability) that any possible claim against Michael would be time-barred anyway. At issue is not when such advance would have been made to Michael, but when the obligation to repay it arose.  That is a matter of fact which is not clear on the evidence.  I do not therefore think that this is a case of a clear-cut limitation argument.

[16]     The final issue is the submission that the proposal for joinder is simply too late to avoid serious prejudice arising from delay. I note that there is, as yet, no allocated  date  for  trial,  and  pre-trial  directions  have  still  to  be  made.   A strict

timetable can be imposed once a date for trial is allocated.  Further, any prejudice caused by delay incidental to joinder is outweighed by the clear need for joinder, and it can be adequately dealt with by costs.

Result

[17]     Leave is given to join Michael Huljich as a further defendant. Mrs Huljich is to file an amended statement of claim within 10 working days and is to take immediate steps to effect service.

[18]     Leave is reserved to Michael Huljich to file and serve a strike-out application within the time for filing a statement of defence.  (Nothing in this judgment is to be taken as determinative of any issues he might raise in support of a strike-out notice). Alternatively he is to file a statement of defence and to make initial disclosure within the time allowed in the notice of proceeding.

[19]     The timetable directions made by consent on 5 May 2017 otherwise stand.

[20]     As costs follow the event under the statutory costs regime, Mrs Huljich is entitled to costs on her application.  I make an order for costs against the first and second defendants on a 2B basis plus disbursements as fixed by the Registrar.

[21]     I  add  a  post-script.     A  judicial  settlement  conference  took  place  on

2 May 2017.   Michael Huljich volunteered to attend that conference.   As the conference was unsuccessful, it is now necessary to issue this judgment on the

joinder application.

Associate Judge Sargisson