Ooi v Ting
[2016] NZHC 952
•11 May 2016
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2015-404-1972 [2016] NZHC 952
IN THE MATTER of a declaration of trust over property at 71
De Havilland Drive, Goodwood Heights
BETWEEN
JANET KIANG OOI Plaintiff
AND
GEORGE TING Defendant
Hearing: 11 May 2016 Counsel:
PM Webb for plaintiff
MJW Lenihan for defendantJudgment:
11 May 2016
JUDGMENT OF FAIRE J
This judgment was delivered by me on 11 May 2016 at 5 pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date……………
Solicitors: Denham Bramwell, Auckland
Simpsons Lawyers, Auckland
Ooi v Ting [2016] NZHC 952 [11 May 2016]
Introduction
[1] The plaintiff seeks orders that the defendant’s refusal to sign documents to effect a transfer of a property at 71 De Havilland Drive, Goodwood Heights, Manukau described as Lot 13, Deposited Plan 184174 on CT NA115A/431 is a breach of a declaration trust made by the defendant on 17 June 2010.
[2] In addition, the plaintiff seeks directions designed to give effect to carrying into force the declaration of trust.
Background
[3] The background is set out in the judgment delivered by Palmer J on 21 March
2016. I adopt his Honour’s summary and therefore do not repeat it.
The formal proof listing and the application for leave to defend
[4] Following Palmer J’s judgment, the solicitors who had acted for the
defendant sought, and were granted leave to withdraw on 19 April 2016. [5] On 27 April 2016, Fogarty J recorded subsequent events. He:
(a) Noted that no application for leave to defend had been filed by the defendant. Palmer J had directed that an application was required if the defendant sought leave to defend; and
(b) Directed that the case be set down for formal proof. [6] The Registry listed the proceeding for formal proof today.
Preparation for the formal proof hearing
[7] In preparation for the formal proof hearing the plaintiff has sworn and filed an affidavit in support. Her counsel has filed a memorandum in support of the request for entry of judgment.
[8] On 5 May 2016, an affidavit by the defendant and a statement of defence was lodged with the court. Those documents put in issue:
(a) The plaintiff’s claim that she provided all the funds for the purchase and retention, including payment of mortgage, of the subject property; and
(b)That the declaration of trust relied upon by the plaintiff was a document executed by the defendant under a mistake as to its effect, ie, essentially he relied on the plea of non est factum.
The hearing
[9] I expressed to counsel my concern as to whether there was sufficient material before the court to enable it to deal with the formal proof hearing. I do not specifically criticise the plaintiff for this, because the situation has come about because of material that has been placed before the court in an unsatisfactory way by the defendant.
[10] The defendant’s position, as I have said, has been unsatisfactory throughout. The position has been exacerbated by the fact that no formal application for leave to defend has been filed, as contemplated in the directions made by Palmer J. The defendant’s disregard of the notice of proceeding and the orders and directions of the court is most unsatisfactory. However, I am not satisfied that the problems that have occurred cannot best be met by an indemnity cost order and an order made in reliance on r 7.48, in case there should be any further defaults.
[11] I discussed possible directions with counsel so that they could provide me with any comment on same. I emphasise that they were not asked to consent specifically to the orders that I make.
Application for leave to defend
[12] Rule 15.9(3) provides:
15.9 Formal proof for other claims
…
(3) After a proceeding is listed for a formal proof hearing, no statement of defence may be filed without the leave of a Judge granted on the ground that there will or may be a miscarriage of justice if judgment by default is entered, and on such terms as to time or otherwise as the Judge thinks just.
[13] Authorities which have considered what is required have relied on the position which the court addresses when considering an application to set aside judgment by default.1
[14] The leading case on applications to set aside judgments by default is the Court of Appeal decision in Russell v Cox.2 There the Court of Appeal emphasised that the issue is whether it is just in all the circumstances to set aside the judgment. That test is, in essence, the same as that set out in r 15.9(3), which requires that the court determine whether “there will or may be a miscarriage of justice if judgment by default is entered”.
[15] Factors which have assisted the court in this determination are: (a) That the defendant has a substantial ground of defence; (b) That the delay is reasonably explained; and
(c) That the plaintiff will not suffer irreparable injury if the judgment is set aside.
[16] The Court of Appeal emphasised that whilst the three factors have long been considered the factors of dominant importance in a consideration of this matter, they are not elevated to conditions which must be a necessary prerequisite to the exercise
of the discretion.
1 Ooi v Ting [2016] NZHC 481 at [8] citing Shoye Venture Ltd v Wilson & Anor [2013] NZHC
2339 at [13] and Neumayer v Kapiti Coast District Council [2014] NZHC 417 at [7]-[8].
2 Russell v Cox [1983] NZLR 654 (CA).
[17] Mr Webb properly acknowledged that the crux of the case was whether or not the defendant had established a substantial ground of defence. Indeed, Palmer J had recognised that the question of delay and the issue of irreparable injury, whilst important, were not the dominant factors in the exercise of discretion in this particular case.
[18] The plaintiff’s case relies upon a declaration of trust signed by the defendant on 17 June 2010 which contains the following:
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 quality 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.
7.That Janet had made all payments due on the property including Council rates, Regional Council levies, insurance and mortgage payments. I did not contributed 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.
[19] The defendant’s position is set out shortly in paragraph 21 of his affidavit of
4 May 2016, which provided as follows:
For that, the Plaintiff brought me before a lawyer by the name of Eugene Ou and I was asked to sign a document in English. This lawyer did not speak my native language and did not explain to me what I was signing in any
language that I could understand. The plaintiff was well aware that I do not read English and she told me what I was signing was a document to confirm our respective half share. I was also not given a chance to bring the document away for independence legal advice before signing it. However, I trusted the Plaintiff over out long-standing friendship and signed the document. I believed that the document was for the purpose she had advised me without a second thought.
That allegation, on its face, pleads non est factum.
[20] The pleadings and the position of the parties, however, also requires a determination whether any funds were advanced towards the purchase or retention of the subject property by the defendant as the plaintiff asserts.
[21] In short, therefore, this case requires a determination of two issues, namely: (a) Is the plaintiff’s non est factum plea justified?
(b)Did the defendant make any financial contribution to the purchase or retention of the subject property?
[22] There is no documentation before me dealing with the financial provision made by the parties. I am therefore not assisted greatly by the material that is currently before the court on that issue.
[23] On the issue of non est factum, I take account of the defendant’s claim in relation to his understanding of language, particularly written language. I am satisfied that this case falls within the possibility of a “may be a miscarriage of justice if judgment by default is entered”. In those circumstances, the better course is to give leave to defend but, in view of the fact that there have been significant failures on the defendant throughout, the order should be tagged to make it plain that any further non-compliance with the court’s orders will result in the prayer for relief set forth in the statement of claim being ordered.
[24] Counsel were in agreement that the discovery issues can properly be dealt with by the parties complying with their initial disclosure obligations pursuant to r 8.4 of the High Court Rules.
[25] Accordingly, it is now appropriate that I make directions so that this case can proceed through to trial. In making those directions, I canvassed with counsel the likely time for trial and it was agreed that even allowing for the fact that there may be a need for interpreters, the case will easily be disposed of within three days.
[26] When I weigh up all the circumstances of this case, I am satisfied that leave to defend should be granted but on strict terms. The discussion I have had with counsel indicates that there is a need for a formal statement of defence and, in view of the indication of the nature of the defence, a reply will be required. There are unlikely to be any interlocutory directions or orders required. The matter can therefore be set on a programme through to trial.
[27] Because there have been defaults on the defendant’s part to date, I am satisfied that any order granting leave to defend should be on terms. Rule 15.9(3) contemplates imposing terms when granting leave. It is for that reason that I intend making orders in reliance on the court’s jurisdiction under r 7.48 because of the breaches of express provisions of the Rules that have already occurred on the defendant’s behalf and the direction given by Palmer J.
[28] I am also satisfied that the case requires an order for indemnity costs in respect of the steps that have had to be taken by the plaintiff in this proceeding to date. Indemnity costs are justified in this case when I have regard to the provisions of r 14.6(4) and, in particular, the circumstances set out in subrule (4)(a) and (b) of that Rule. Necessarily, the quantum of the indemnity costs will have to be fixed when I have the benefit of memoranda from counsel. To that extent the quantum of the orders that I make is accordingly reserved until such time as I have received appropriate memoranda from counsel and can determine the issue.
Orders and directions
[29] I make the following orders and directions:
(a) I grant the defendant leave to defend this proceeding on condition that he complies with the following matters:
(i)A statement of defence which pleads to the current statement of claim and includes an affirmative defence based on the plea of non est factum is filed and served no later than 23 May
2016;
(ii) That the defendant provide copies of his initial disclosure
documents to the plaintiff’s solicitors no later than 23 May
2016;
(iii)Counsel for the defendant shall file and serve a memorandum in opposition, within three working days after receipt of the plaintiff’s counsel’s memorandum for costs, which I shall direct in a later paragraph;
(iv)The defendant shall pay the costs that I order in relation to this matter to date within five working days of the issue of a minute from the court specifying the quantum of such costs.
(b)In the event that the defendant fails to comply with the conditions referred to in the previous paragraphs, judgment shall be entered against the defendant in terms of the prayer for relief contained in the plaintiff’s current statement of claim.
[30] I make the following further orders:
(a) Counsel for the plaintiff shall file and serve no later than 13 May
2016, a memorandum which sets out the indemnity costs sought by the plaintiff for steps taken in this proceeding up until the present time;
(b)The plaintiff shall file and serve any reply to an affirmative defence or allegation in accordance with rr 5.62 and 5.63 within 10 working days of the service of a statement of defence by the defendant in accordance with the directions made in this judgment;
(c) A copy of the plaintiff’s initial disclosure documents shall be provided to the defendant’s solicitors within five working days of this judgment.
Trial directions
[31] I allocate three days for the trial of this proceeding. It shall be heard on
17 October 2016. I fix the close of pleadings date for this proceeding as 1 July 2016. I further order:
a) The plaintiff’s briefs of evidence including a list of the documents to be included in the common bundle shall be served by 1 August 2016.
b)The defendant’s briefs of evidence including a list of the documents to be included in the common bundle shall be served by 29 August 2016.
c) The common bundle (r 9.4) together with the plaintiff’s chronology pursuant to r 9.9(2) shall be filed and served by 12 September 2016.
d)The defendant’s response to the plaintiff’s chronology pursuant to r 9.9(3) shall be filed and served by 26 September 2016.
[32] In all other respects the rules contained in rr 9.1 to 9.16 of the High Court
Rules shall apply.
[33] I reserve, pending receipt of the memoranda referred to in the orders that I
have made, the issue of the quantum of indemnity costs that I have ordered.
JA Faire J
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