Schmidt v Ebada Property Investments Limited

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

 CA678/2019
CA225/2020
 [2025] NZCA 125

BETWEEN	ANTHONY MIKHAL SCHMIDT First Appellant TAYLOR JADE SCHMIDT Second Appellant
AND	EBADA PROPERTY INVESTMENTS LIMITED First Respondent BRIAN PATRICK GARRITY Second Respondent

CA75/2020
BETWEEN	TAYLOR JADE SCHMIDT First Appellant ANTHONY MIKHAL SCHMIDT Second Appellant
AND	EBADA PROPERTY INVESTMENTS LIMITED First Respondent BRIAN PATRICK GARRITY Second Respondent

Hearing:	22 June 2023 (further submissions received 4 December 2024)
Court:	Goddard, Brewer and Osborne JJ
Counsel:	First Appellant in CA678/2019 and CA225/2020 and Second Appellant in CA75/2020 in person A J Woodhouse for Second Appellant in CA678/2019 and CA225/2020 and First Appellant in CA75/2020 N J Scampion and J T Kohu-Morris for Respondents
Judgment:	17 April 2025 at 10.00 am

JUDGMENT OF THE COURT

AThe appellants’ application for leave to amend the statement of claim is declined. 

BThe respondents’ application for leave to put a further authority before the Court, and for leave to make an application to strike out the proceedings, is declined.

CThe appeals are dismissed.

DMr Schmidt must pay costs to the respondents for a standard appeal on a band A basis, with usual disbursements.

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REASONS OF THE COURT

(Given by Goddard J)

Table of contents

Para no

Introduction

The parties’ dealings
High Court proceedings
Appeals to this Court
Summary of result
Post-hearing application to amend the Schmidts’ claims
Respondents’ post-hearing application

Result

The parties and the relevant trusts

The events that gave rise to the parties’ dispute

Events in 2002
Mr Schmidt reconnects with Mr Garrity
The Schmidts come under increasing financial pressure through 2005
Transfer of the Kaiaua Road property to Ebada
Date of alleged declaration of trust by Ebada
Payments from Transit to STL
Mr Garrity borrows further amounts against the Kaiaua Road property
Further financial pressure and a threatened mortgagee sale of the Bell Road property
Transfer of the Bell Road property to Ebada
Email exchange about use of STL funds from sale of Bell Road property
Some more fictions
Ebada comes under increasing financial pressure
Discussions about unwinding the arrangements
Ebada sells the Bell Road property
Discussions continue in relation to Kaiaua Road property
Mortgagee sale of Kaiaua Road property
Other interactions between the parties

The proceedings

The trial

High Court judgment

The central issue for determination by the High Court
Credibility findings
First cause of action — intentional breach of express trust
Second cause of action — breach of institutional constructive trust
Third cause of action — knowing assistance/knowing receipt
Fourth cause of action — breach of fiduciary duty
Fifth cause of action — undue influence

Result

Costs judgment

Issues on appeal

Did the arrangement between the Schmidts and Mr Garrity contemplate Ebada acting as a trustee?

Breach of fiduciary duty and undue influence claims

Mr Schmidt’s other grounds of appeal

Application for leave to amend statement of claim

The respondents’ post-hearing application

Costs appeal

Costs on appeal

Result

Introduction

The parties’ dealings

1. In 2005 Schmidt Trustee Ltd (STL) owned two properties:…