Krzanic v Sullivan - [2015] NZHC 1861

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-005275 [2015] NZHC 1861

BETWEEN
MARINA ZELKA KRZANIC

First Plaintiff

AND

DRAGI PETER KRZANIC AND LUTKA KRZANIC AND MARINA ZELKA KRZANIC Second Plaintiffs

AND

TIMOTHY PETER SULLIVAN Defendant

Hearing: 3 August 2015

Appearances:

H McIntosh for the Plaintiffs
Defendant in person

Judgment:

6 August 2015

JUDGMENT OF NATION J

Background

[1] The first plaintiff, Ms Krzanic, and the defendant, Mr Sullivan, lived together in a de facto relationship between 2004 and 2010 and during an attempted reconciliation in 2012.

[2] The second plaintiffs (the trustees) are Ms Krzanic and her parents, as trustees of the DLM Family Trust (the DLM Trust) of which Ms Krzanic is also a beneficiary.

[3] In May 2011, Ms Krzanic began relationship property proceedings against
Mr Sullivan in the Family Court at North Shore. The application was struck out in the Family Court on 29 August 2012 after there had been a directions conference

KRZANIC & ORS v SULLIVAN [2015] NZHC 1861 [6 August 2015]

with a Judge on 2 July 2012. There had been no appearance for Mr Sullivan. Counsel appearing for Ms Krzanic told the Court that he had not been able to obtain instructions. A Judge had directed that, if there was no progress after that conference, the proceedings were to be forwarded to a Judge in chambers for strike out. In an affidavit relating to an interlocutory application before this Court, Ms Krzanic said the proceedings were not pursued because of the attempted reconciliation during 2012.

[4] In these proceedings filed in December 2013, Ms Krzanic sought judgment for $640,000 lent to Mr Sullivan in two instalments during 2005. The trustees sought judgment for $200,000 in respect of loans made by the trustees in 2008, the loans to be repayable in three months with interest at 7 per cent.

[5] On 17 February 2014, Mr Sullivan filed an interlocutory application to strike out the statement of claim on the basis that issues had been previously resolved through the strike out of Ms Krzanic’s relationship property proceedings in the Family Court. That application was dismissed in a judgment of Associate Judge
Christiansen of 18 June 2014.1

[6] By notice filed on 13 August 2014, Mr Sullivan issued various interrogatories for the plaintiffs to answer. Ms Krzanic swore an affidavit in response on 21 August
2014.

[7] On 11 August 2014, Mr Sullivan filed a statement of defence to the substantive claims and a counterclaim. In his statement of defence he denied there were debts owing to either of the plaintiffs. He pleaded that Ms Krzanic’s claim was barred by the Limitation Act 1950. In respect of both parties’ claims, he also pleaded that they had been the subject of the relationship property proceedings earlier commenced in the Family Court and were the subject of a settlement between Ms Krzanic and Mr Sullivan.

[8] In the alternative, through a counterclaim, Mr Sullivan pleaded that whatever interest Ms Krzanic had in these debts was relationship…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Krzanic v Sullivan

Details

AGLC: Krzanic v Sullivan [2015] NZHC 1861
Case: [2015] NZHC 1861
Decision Date: 6 August 2015

CaseChat Overview and Summary

The case of Krzanic v Sullivan involved a former de facto couple, Marina Krzanic and Timothy Sullivan, who were involved in a complex dispute over financial claims. The plaintiffs, Marina and the trustees of the DLM Family Trust, sought judgment for debts owed by Sullivan. The first plaintiff sought $640,000 for loans made to Sullivan in 2005, while the trustees sought $200,000 for loans made in 2008. Sullivan admitted to owing the debts but argued that the claims should be stayed pending resolution of relationship property claims in the Family Court. The court had to determine whether to stay the enforcement of the judgments until the resolution of the relationship property claims.

The legal issues before the court were whether the High Court should stay the enforcement of the judgments pending the determination of the relationship property claims in the Family Court, and if so, what terms should be imposed to ensure that the stay would be in the interests of justice. The court considered various factors, including the potential merits of Sullivan's relationship property claims, the conduct of the parties in the proceedings, and the need to avoid duplication of Court hearings and the burden on the parties and the Courts.

The court found that a stay on terms would be in the interests of justice. It noted that the claims arose out of a de facto relationship where the ultimate entitlements between the parties were to be determined in accordance with the Property (Relationships) Act. Enforcing the judgments without taking into account the overall accounting required between the parties would be contrary to the requirements of the Act. The court also noted that if either the first or second plaintiffs were to seek to enforce the judgments, there would inevitably be an application for stay with evidence to support that application, which would require detailed consideration of the merits of the relationship property counterclaim. The court imposed terms for the stay, including that Sullivan file a new application under the Property (Relationships) Act, provide detailed affidavits, and comply with directions from the Family Court. The court also reserved leave for the plaintiffs to apply for a lifting of the order for stay if Sullivan breached the conditions or directions of the Family Court.

Orders