Ooi v Ting

[2016] NZHC 2583

IN THE HIGH COURT OF NEW ZEALAND AUCKALND REGISTRY

CIV-2015-404-001972 [2016] NZHC 2583

IN THE MATTER OF

a declaration of trust over property at 71

De Havilland Drive, Goodwood Heights

BETWEEN

JANET OOI Plaintiff

AND

GEORGE TING Defendant

Hearing:	17 October 2016
Appearances:	P M Webb for Plaintiff No appearance for or by Defendant
Judgment:	28 October 2016

JUDGMENT OF FOGARTY J

This judgment was delivered by Justice Fogarty

On 28 October 2016 at 1.00pm Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar

Date:…………………………

Solicitors/counsel:

Denham Bramwell, Manukau/P M Webb, Auckland

Copy to Defendant

OOI v TING [2016] NZHC 2583 [28 October 2016]

[1]      This is a claim by the plaintiff for an order of this Court seeking a vesting order being a direction to the Registrar of Land to sign documents to effect the transfer of the defendant’s registered interest in this property to the plaintiff.

[2]      The case proceeds today by way of formal proof, pursuant to the Minute of

Courtney J dated 21 September 2016. That minute records in paragraph [4]:

Finally, I record that this matter is to proceed as a formal proof hearing on 17

October 2016.  Prior to that date the plaintiff’s counsel will file and serve submissions in accordance with the current timetable.   Mr Ting is to be served with a copy of this minute.  He should understand that this matter will proceed on 17 October 2016 whether he is present or not.  I note, further, that, given his history of non-compliance, no further adjournment should be granted even if he arranges fresh representation.

[3]      It is not necessary to detail the history of non-compliance.  In brief, Mr Ting has  had  many  opportunities  to  defend  these  proceedings.    He  has  employed solicitors.  They have obtained leave to withdraw.  His essential argument is that he did not understand the Declaration of Trust that he signed.  The trust is in English. He says that it was not explained to him in the Chinese language of Cantonese and he does not understand Mandarin.   On 21 September 2016, his solicitor, Mr Tong and counsel advised the Court they had no instructions.  Mr Tong applied for leave to withdraw as solicitor on the record and leave was granted.

[4]      The case being called and there being no appearance of Mr Ting, the hearing then proceeded as a formal proof.   Mr Webb, appearing for the plaintiff, took the Court through his written submissions dated 10 October 2016 and the proceedings were recorded.

[5]      The plaintiff, Ms Ooi, is the registered proprietor together with the defendant, of the property at 71 De Havilland Drive, Goodwood Heights, Auckland, being Lot

13, DP 184174 (“the property”).   The defendant, Mr George Ting, is Ms Ooi’s former employer and long term de facto partner.  Mr Ting’s occupation is as a third tier financer and property developer.

[6]      The property was conveyed into the joint names of the plaintiff and the defendant on 4 July 2001. The plaintiff ’s case is that the intention and understanding of both parties was that the purchase of the property was for the plaintiff ’s benefit.

[7]      The plaintiff did not meet the criteria required for a National Bank mortgage. In particular, she was not able to demonstrate a consistent income stream. To resolve this difficulty, the plaintiff and the defendant made a joint application for a loan which was granted by the National Bank and the mortgage was registered against the title.  The bank requirement was that the loan was in the joint names of the plaintiff and the defendant, and so that both names were to be on the title.

[8]      By 2010 Ms Ooi, had made all repayments of the mortgage and wanted to formalise the agreement in relation to the property.  The plaintiff and the defendant attended the offices of Mr Ou and instructed him to prepare a Declaration of Trust reflecting the understanding between the parties.  The Declaration of Trust, executed on 17 June 2010, is set out in all its material respects in the Judgment of Faire J in these proceedings dated 11 May 2016 at [18]:1

2.That  notwithstanding  my  joint  ownership  of  the  property  it  was always understood between Janet and me that the true intention and purchase of the property was that the property is to be for the sole ownership and benefit of Janet alone.

3.To purchase the property a loan was taken out with the National Bank (“the Bank”).  However since Janet was unable to qualify for a loan in her sole name I agreed to lend support to her by applying with Janet for a loan in our joint names.  Our combined application satisfied the Bank’s lending criteria.  It was on that basis that Janet was able to qualify for a loan.

4.I signed the Bank’s loan documentation and agreed to become a registered proprietor on the title so as to be able to provide to the Bank a registered first mortgage as security for the loan.

5.That I confirm that I hold my interest in the property as trustee only with Janet being the sole beneficiary.

6.The property was purchased with the loan from the Bank and with Janet paying the balance of the purchase price herself.   I did not contribute anything towards the purchase price.

1      Ooi v Ting [2016] NZHC 952.

7.That Janet made all payments due on the property including Council rates, Regional Council levies, insurance and mortgage payments.  I did not contribute anything towards any of those expenditures.

8.That I had agreed and continue to agree to transfer my interest in the property  to  Janet  or  to  anyone  else  at Janet’s  direction,  without requiring any consideration to be paid and to sign any document to give effect to such a transfer.  That the proceeds of any transfer will be for the sole benefit of Janet.

[9]      The effect of this Declaration of Trust is to confirm that the defendant held as legal interest in the property on trust for the sole benefit of the plaintiff and that the defendant  would  on  the  plaintiff’s  direction,  transfer  that  legal  interest  to  the plaintiff:

That I had purchased the property at 71 De Havilland Drive, Goodwood

Heights, Manukau (described as Lot 13 Deposited Plan 184174 on CT NA

115A/431) (hereinafter referred to as “the property”) on the 4th  day of July

2001 with Janet Kiang OOI (“Janet”) and we are both on the title of the

property together as joint tenants.

[10]     In 2013, in breach of that Declaration of Trust, the defendant demanded that the plaintiff sell the property and pay a half share of the proceeds to him.  Because there was a conflict of interest on the part of Mr Ou, who had acted for both parties, the plaintiff instructed alternative solicitors, Denham Bramwell Lawyers.

[11]     In February 2015, in further breach of this Declaration, the defendant caused his then solicitors to demand of the plaintiff that she sell the property and pay to the defendant half of the net value.  The plaintiff instructed her solicitors to reject that proposition and sought in return that the defendant transfer his legal interest in the title to her as provided for in clause 8 of the Declaration of Trust.  When no reply was received, the plaintiff’s solicitors repeated the instruction to the defendant’s solicitors.  The defendant’s solicitors replied directing the plaintiff ’s demand on 24

June 2015.   Subsequently the same solicitors advised that the defendant had withdrawn his instruction to them on 23 July 2015.

[12]     The plaintiff filed these proceedings on 21 August 2015.  The plaintiff was not able to effect personal service and an application for substituted service was made on 4 September 2015, and on 15 September 2015 service was effected under the order made for substituted service.

[13]     No response was forthcoming by the defendant by 20 October 2015, the time specified for the filing of the statement of defence.  On 27 October, counsel filed a memorandum seeking the matter be set down for formal proof.  Unfortunately that request was not dealt with by the Registry until mid February 2016, when the file was referred to Woodhouse J.  By a Minute dated 15 February 2016, Woodhouse J directed that the matter was to proceed by way of formal proof.   The defendant instructed counsel and a memorandum was filed on the defendant’s behalf seeking an extension of time for filing a statement of defence on 19 February 2016.  That

application  was  referred  to  Palmer  J,2   who  dealt  with  the  memorandum  and

application for leave.  He concluded leave should not be granted on the basis of the materials before the Court, but provided the defendant an opportunity to make a renewed application for leave on or before 18 April 2016.  No application for leave was filed.  Rather, on 12 April 2016, counsel for the defendant made an application to the Court for an order that he was no longer acting for the defendant on the basis the defendant had terminated his instruction to him.

[14]     By 18 April 2016, no application for leave had been filed by the defendant but a memorandum of counsel was received from the plaintiff’s solicitor from new counsel for the defendant on that day, seeking an extension of five days to file the application for leave and statement of defence.  However, it is not clear whether this document was filed in Court.  On 19 April 2016, counsel were directed by myself to provide a copy to the Registry.  Nothing was filed and by a minute dated 27 April

2016, I directed the formal proof proceeding to be dealt with on 11 May.

[15]     The statement of defence and affidavit from the defendant dated 4 May were then filed.  No formal application for leave to file these documents was lodged.

[16]     The matter was heard on 11 May 2016, and Faire J granted the defendant leave to defend this proceeding on the condition there would be full compliance with further  directions.3    Timetabling  directions  for  a  defended  hearing  were  set.

Indemnity costs were awarded against the defendant and paid.

2      Ooi v Ting [2016] NZHC 481.

3      Ooi v Ting, above n 1.

[17]     The defendant filed a statement of defence on 23 May.  On 30 June, counsel for the defendant filed an application seeking leave to withdraw from acting.

[18]     In the meantime, a hearing date was set for 17 October 2016 and the plaintiff has since filed a brief of evidence, affidavit of documents and a common bundle.

[19]     The matter was listed for mention on 21 September.  As I have already noted, Courtney J granted counsel for the defendant application to withdraw and re-listed the matter for formal proof on 17 October 2016, on terms which I have set out at the outset.

[20]     Given  the  terms  of  Courtney  J’s  order  and  the  non-appearance  of  the defendant, in the course of the formal proof hearing I ruled procedurally that there was no legal basis for me to consider the particulars of the defendant’s statement of defence on 23 May.   I also noted that it was not necessary to hear counsel for the plaintiff’s submission that nothing raised by the defendant has any merit as credible defence.

[21]     The Declaration of Trust having been proved and the findings of fact being those as set out above, it follows that the plaintiff is entitled to a declaration, first, that the defendant is bound by the Declaration of Trust which he exercised and which is set out above.   Second, the defendant is in breach of that Declaration of Trust.  Third, the plaintiff’s plea for relief for a vesting order is the appropriate relief for the breach of trust by the defendant.

[22]     A vesting order has been drawn up, relying on the judgment of Penlington J in Kimber v Carver.4    The facts of that case were similar to this matter in that two parties entered into an agreement to create a trust for the purpose of property which the plaintiff had no interest other than to assist the defendant in obtaining finance. The parties later executed a Declaration of Trust setting out the fact that the plaintiff held the property in trust for the defendant and her mother, and he would, when

called  to  do  so,  transfer  the  property to  the  defendant  and  her  mother  without

4      Kimber v Carver HC Hamilton CP37/97 9 October 1998, relying on s 52(1)(g) of the Trustee Act

1956.

requiring consideration.  After some time the parties lost contact and the defendant requested  the plaintiff to  transfer the property in  terms  of the trust  deed.   The plaintiff refused to do so unless the defendant compensated them.   Penlington J found that the defendant’s claim satisfied all the requirements of s 52(1)(g) of the Trustee Act 1956 and granted the vesting order.  The matter was also dealt with by way of formal proof as the plaintiff took no steps in response to the counterclaim.

[23]     Accordingly, the formal order of the Court is as follows:

(a)      The   property   at   71   De   Havilland   Drive,   Goodwood   Heights, Auckland, currently registered in the names of the plaintiff and the defendant is held on trust by the parties for the sole benefit of the plaintiff;

(b)Pursuant to s 52(1)(g) of the Trustee Act 1956 the right, title and interest of the defendant, George Ting, in the property at 71 De Havilland Drive, Goodwood Heights, Auckland, being Lot 13, DP

184174 as described in CT NA115A/431 North Auckland, is vested absolutely in the plaintiff, Janet Ooi of Auckland, Administrator;

(c)      To give effect to the above vesting order, the Registrar General of the Land (Land Information New Zealand) is authorised to record the transfer of title to the property comprised in Certificate of Title NZ115A/431 from George Ting and Joon Kiang Ooi to Janet Ooi as the sole registered proprietor.

Costs

[24]     I agree in these circumstances that costs should be on an indemnity basis.  Mr Webb has provided the Court with two calculations.  Firstly, to assist the Court scale costs on a 2B basis, particularly setting out the different items of attendance and reaching  the  sum  of  $17,505.50.     Including  disbursements,  the  total  sum  is

$17,641.75.   The indemnity costs are based on the defendant having acted unnecessarily in defending the proceeding and breaching numerous directions of the Court.    I  am  satisfied  that  the  defendant’s  behaviour  since  the  first  award  of

indemnity costs referred to above, has continued to amount to the kind and flagrant and distinctly bad behaviour that provides a proper basis for indemnity costs.

[25]     The costs borne by the plaintiff since the formal proof hearing in May 2016, up and including the Court appearance on 17 October 2016, on an indemnity basis, total a sum of $21,070.61.   I am satisfied in the circumstances that this claim is appropriate and bears an appropriate relationship to the claim on a 2B basis as set out above. Accordingly indemnity costs are awarded against the defendant in the sum of

$21,070.61.

Fogarty J