Sheffield v Sheffield
[2024] NZHC 3937
•20 December 2024
IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY
I TE KŌTI MATUA O AOTEAROA
TE ROTORUA-NUI-A-KAHUMATAMOMOE ROHE
CIV-2024-463-998
[2024] NZHC 3937
BETWEEN MERLIN ANDREW SHEFFIELD and ANDREA ELIZABETH SHEFFIELD
Plaintiffs/ApplicantsAND
DARYL JOHN SHEFFIELD
Defendant/Respondent
Hearing: 4 December 2024 Appearances:
G D Wiles/Becky Brown for the Plaintiffs Defendant is self-represented
Judgment:
20 December 2024
JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR
[Application for summary judgment]
This judgment was delivered by me on 20 December 2024 at 11:00am
pursuant to Rule 11.5 of the High Court Rules
…………………………. Registrar/Deputy Registrar
Solicitors:
Patrick Molloy, New Lynn, Auckland, for the Plaintiffs
Counsel :
G D Wiles, Durham West Chambers, Auckland, for the Plaintiffs
SHEFFIELD v SHEFFIELD [2024] NZHC 3937 [20 December 2024]
Introduction
[1] Mr Merlin Andrew Sheffield (Mr Merlin Sheffield) and Ms Andrea Elizabeth Sheffield (together, the plaintiffs) seek summary judgment against Mr Daryl Sheffield (Mr Sheffield) on an application for the sale and division of a property at 130 Walker Road, Opotiki (the Property).
Background
[2]Mr Sheffield is Mr Merlin Sheffield’s younger brother.
[3] In 2018, the plaintiffs resolved to put in an offer to purchase the Property and offered Mr Sheffield an opportunity to invest with them in what would become a casual holiday retreat available to each of them.
[4] Prior to putting in an offer, the parties had a discussion about their future expectations and intentions regarding the Property. The plaintiffs claim that there was an agreement that the Property would be available to each of them as a holiday retreat but that they would continue to live at their current addresses as their personal residences.
[5] The purchase of the Property was then settled, and possession was taken on 28 February 2018. It is accepted that Mr Sheffield contributed equally to the overall purchase price and other associated costs of the Property.
[6] The plaintiffs claim that the arrangement worked reasonably well in the first few months of 2018. In July 2018, Mr Sheffield informed Mr Merlin Sheffield that he had been “kicked out” of his accommodation and that he intended to move to the Property and relocate his business to a local Opotiki address. Mr Merlin Sheffield objected to this proposal. Despite his objection, Mr Sheffield took up full-time residence at the Property on 9 July 2018.
[7] The parties encountered problems with the bach sharing arrangements. The plaintiffs claim that Mr Sheffield failed to maintain the Property to an acceptable standard.
[8] In April 2024, the plaintiffs obtained legal advice and a property appraisal from a real estate agent. On 8 May 2024, the plaintiffs’ solicitors wrote to Mr Sheffield enclosing a copy of the appraisal asking him to agree that the Property should be offered for a sale at an asking price of $629,000 with some room for negotiation.
[9] On 16 May 2024, Mr Sheffield acknowledged the plaintiffs’ wish to sell the Property and suggested that they obtain a valuation from a local valuer. Mr Sheffield also pointed out that he did not agree to selling the Property to the plaintiffs or for the Property to be sold.
[10] On 7 June 2024, the plaintiffs’ solicitor responded to Mr Sheffield and noted that the plaintiffs were happy to obtain a valuation of the Property from the local valuer after which they would be happy to consider selling their share to Mr Sheffield.
[11]Mr Sheffield did not acknowledge or respond to the letter.
[12] The plaintiffs now seek summary judgment against Mr Sheffield for orders for the sale of the Property and division of the proceeds of sale.
The plaintiffs’ application for summary judgment
[13]The plaintiffs seek, in summary, the following orders:1
(a) Granting summary judgment for an order pursuant to section 339(1) of the Property Law Act 2007 (the PLA) for the sale of the Property and division of the proceeds of sale among the co-owners; and
(b) making further consequential orders pursuant to section 343 PLA in terms of the schedule of draft orders annexed to the plaintiffs' statement of claim.
1 Notice of interlocutory application for summary judgment by plaintiffs against defendant dated 16 August 2024 at [1].
[14]The grounds on which the orders are sought are, in summary:2
(a) Such orders are authorised by Part 6 Subpart 5 of the PLA and are appropriate in all the circumstances.
(b) The plaintiffs are co-owners as to a half share of the Property. Mr Sheffield is a co-owner of the remaining half share of the Property. The plaintiffs have offered to sell their share in the Property to Mr Sheffield, but he has refused to accept that offer and has refused to sell the Property on the open market.
(c) Mr Sheffield has made a permanent home for himself at the Property, contrary to the original intention of the parties that it would continue to remain available to each of them (at short notice) as a holiday bach.
(d) The plaintiffs are suffering hardship from (inter alia) their inability to release their equity in the Property.
(e) Mr Sheffield has no arguable defence to the application.
[15] Mr Sheffield has not filed any notice of opposition to the plaintiff’s application, nor has he filed any affidavit evidence. By email dated 20 November 2024, Mr Sheffield agreed that the Property should be sold.
Hearing
[16] At the hearing Mr Wiles, for the plaintiffs, made submissions in support of the orders sought.
[17] Mr Sheffield was self-represented. While Mr Sheffield has agreed to the sale of the Property, at the hearing he expressed his opposition to the plaintiffs’ claim for rent in respect of the Property and to the plaintiffs’ claim for reimbursement of expenses in respect of the Property.
2 At [2].
Legal principles
[18]Rule 12.2(1) of the High Court Rules provides:
12.2 Judgment when there is no defence or when no cause of action can succeed
(1)The court may give judgment against a defendant if the plaintiff satisfies the court that the defendant has no defence to a cause of action in the statement of claim or to a particular part of any such cause of action.
[19] The relevant principles governing a summary judgment application are well established:3
The question on a summary judgment application is whether the defendant has no defence to the claim; that is, that there is no real question to be tried: Pemberton v Chappell. The Court must be left without any real doubt or uncertainty. The onus is on the plaintiff, but where its evidence is sufficient to show there is no defence, the defendant will have to respond if the application is to be defeated: MacLean v Stewart. The Court will not normally resolve material conflicts of evidence or assess the credibility of deponents. But it need not accept uncritically evidence that is inherently lacking in credibility, as for example where the evidence is inconsistent with undisputed contemporary documents or other statements by the same deponent or is inherently improbable: Eng Mee Yong v Letchumanan. In the end the Court’s assessment of the evidence is a matter of judgment. The Court may take a robust and realistic approach where the facts warrant it: Bilbie Dymock Corp Ltd v Patel.
[20]The wording of r 12.2 “may give judgment” indicates a residual discretion.
Having regard to the various authorities, the position appears to be as follows:4
(a) The discretion implied by the use of the word “may” is to be restrictively applied. In a great majority of cases, once the court is satisfied the defendant has no defence, there is no room for the exercise of discretion.
(b) The residual discretion may be invoked to avoid oppression or injustice to the defendant where:
3 Krukziener v Hanover Finance Ltd [2008] NZCA 187, [2010] NZAR 307 at [26] (citations omitted).
4 Andrew Beck and others (eds) McGechan on Procedure (online ed, Thomson Reuters) at [HR12.2.11].
(i)The proceeding involves the actions or possible liability of a third party which is not before the court;
(ii)The proceedings are such that the opportunity should be given to allow discovery or other interlocutory applications to be concluded;
(iii)The circumstances of the case disclose very unusual features, the presence of which leads the court to conclude that the entry of summary judgment would be oppressive or unjust; or
(iv)The combination of complex issues of fact and law justify the dismissal of the application for summary judgment, either as a matter of discretion or because the court cannot be satisfied that the defendant has no defence.
(c) Even where the court is not satisfied that a defence has been made out, in exceptional circumstances the application may be adjourned to allow for other processes to be followed.
Analysis
[21] Following the hearing on 4 December 2024, Mr Wiles negotiated on the plaintiffs’ behalf to endeavour to reach agreement on consent orders with Mr Sheffield. Mr Wiles filed a memorandum dated 12 December 2024 setting out the progress of these negotiations and the ultimate breakdown of the negotiations.
Plaintiffs’ submissions
[22] As to the applicable law, Mr Wiles submits that under s 339(1)(a) of the PLA, the Court may make an order for the sale of co-owned property and for the division of proceeds among co-owners. He notes that upon making such an order the Court may also make further orders under s 339(4) as specified in s 343. He notes that in
considering whether to make an order for sale or a further order, the Court must have regard to the relevant considerations identified in s 342.5
[23] While Mr Sheffield has agreed to the sale of the Property, I nevertheless include in this judgment consideration of the s 342 factors.
[24] Mr Wiles submits that circumstances which influenced Campbell J to order the sale of jointly-owned property in Loader v Loader6 are equally applicable in this case. Mr Wiles addresses each of the relevant considerations listed in s 342 as follows:
(a) Plaintiffs’ share in the property (s 342(a))
The plaintiffs own a half share in the Property. Mr Sheffield owns the other half. The plaintiffs want the Property sold, and as is noted at [15] and [23], Mr Sheffield has agreed that the Property is to be sold.
(b) Nature and Location of the property (s 342(b))
The Property is located approximately 6 kilometres east of Opotiki and is 1 hectare in area. In a recent valuation report prepared by Mr Graham Hill, registered valuer, he describes the property as “a small lifestyle property” which is “east facing, with rural and coastal views, with a dwelling and sheds. It is situated in an average location for rural residential properties, in the Tablelands locality in the Opotiki District and saleability is expected to be average should the property be offered for sale on the open market.” Mr Hill assessed the market value of the Property at $746,000 (including GST (if any)) and any chattels.
(c) Other Co-Owners (s 342(c))
There are two parties interested as co-owners in equal shares – the plaintiffs on the one hand and Mr Sheffield on the other. There is no mortgagee or other interested third party involved.
5 Loader v Loader [2024] NZHC 1608.
6 Above, n 5 at [16](a) to (d).
(d) Hardship Considerations (s 342(d))
(i)The plaintiffs have fallen out with Mr Sheffield on a personal level. Mr Sheffield continues to live in the Property as his personal residence, with the result the plaintiffs cannot realistically obtain any benefit from the Property. His permanent presence is a genuine disincentive for the plaintiffs to use the Property. While the plaintiffs have managed to “book” the Property for a weekend or short holiday period from time to time, their stays at the Property have more recently become soured by the need to use their time to either tidy up or clean the Property and carry out basic maintenance tasks, made necessary as a result of Mr Sheffield’s neglect of the Property.
(ii)The plaintiffs are suffering hardship from the current situation in that they are getting no benefit from their ownership of the Property. Their capital asset is locked into the Property and is not available to them for any alternative investment. The plaintiffs are nonetheless paying the lawnmowing contractor to maintain the grounds and have also incurred significant expenses for repairs.
(iii)As Mr Merlin Sheffield has deposed in his affidavit, there is a broader element of hardship associated with his inability to gain any benefit from his inheritance from his father’s estate. On the other hand, Mr Sheffield has incurred no expense for the use of the Property, other than his 50 per cent capital contribution and his contribution towards rates and insurance costs associated with the Property.
(iv)The evidence is that Mr Sheffield’s share of the proceeds of sale should be sufficient to enable him to purchase outright an alternative property in or around Opotiki that would suit his accommodation needs, and accordingly he is unlikely to suffer any substantial hardship as a result any sale of the Property.
(e) Value of the parties’ respective contributions to improvements to, and maintenance of the Property (s 342(e))
On the evidence, the plaintiffs have carried a disproportionate burden of the responsibility for maintaining or improving the Property, as set out in the affidavit evidence.
Result
[25] Having considered the evidence from the plaintiffs, the submissions by Mr Wiles (including his submissions as to the factors under s 342 of the PLA), and having regard to Mr Sheffield’s agreement to the sale of the Property, I am satisfied orders should be made for the sale of the Property and division of the proceeds of sale between the plaintiffs and Mr Sheffield, pursuant to s 339(1)(a) of the PLA.
[26] As to orders sought by the plaintiffs for deduction of amounts to compensate them for sums paid for expenses associated with maintaining the Property and a fair occupation rent, Mr Sheffield has filed no evidence in opposition to the plaintiffs’ claims. While he made various objections to them at the hearing, in the absence of any sworn evidence opposing these claims, in my view the plaintiffs are entitled to orders for the amounts as claimed.
Orders
[27]I make the orders set out in the Schedule to this judgment.
…………………………….. Associate Judge Taylor
SCHEDULE OF ORDERS
1. Pursuant to section 339(1)(a) Property Law Act 2007 (the Act) the following orders are made:
(a) An order for the immediate sale of the property located at 130 Walker Road, Opotiki, being an estate in fee simple contained in Record of Title GS6B/858 (Gisborne Registry) (the Property); and
(b) an order for the division of the proceeds among the plaintiffs and Mr Sheffield, as co-owners of the Property, in accordance with their respective shares as recorded on the Record of Title for the Property.
2. The following further orders are made pursuant to sections 339(4) and 343 of the Act:
(a)Mr Sheffield is to vacate the Property by 31 January 2025;
(b)following vacation of the Property by Mr Sheffield, within the timeframe specified in 2(a) above, the plaintiffs shall have the sole occupation of the Property to enable them to facilitate the sale of the Property;
(c)the plaintiffs have the sole right to select a real estate agent, sign any listing agreement required to facilitate the sale of the Property and to determine the sale and marketing process for the Property;
(d)the parties having agreed on a minimum sale price of $685,000 (including GST) they each agree to accept any unconditional offer equal to or greater than that sum;
(e)should the parties be unable to achieve a sale at or above the minimum sale price (as above) within the period of 2 months from
commencement of the real estate marketing campaign, they shall negotiate in good faith in an effort to agree a reduction in the minimum sale price. Failing agreement, the parties are granted leave to return to Court for further directions;
(f)Mr Sheffield shall, on provision of the same by the plaintiffs (or their duly appointed agents) sign any sale and purchase agreement complying with the minimum price condition and any authority or instruction form, tax statement or any other documentation that would in the ordinary course be required to be signed to facilitate the sale;
(g)the proceeds of sale of the Property (sale proceeds) and any interest on the sale proceeds, are to be divided among the plaintiffs and Mr Sheffield as co-owners of the Property, in accordance with their respective shares as recorded on the Record of Title to the Property, but subject to any adjustments made in paragraphs 2(i)-(l) below;
(h)the expenses of and associated with the sale of the Property, including but not limited to real estate agents’ fees, are to be deducted from the sale proceeds before those sale proceeds are divided among the plaintiffs and Mr Sheffield;
(i)Mr Sheffield’s share of the sale proceeds is to be charged with the costs of any repairs reasonably necessary to prepare the Property for sale;
(j)Mr Sheffield is to pay to the plaintiffs the sum of $14,771.22 by way of compensation to them for sums paid by them for expenses of and associated with the Property. That amount is to be deducted from Mr Sheffield’s share of the sale proceeds;
(k)Mr Sheffield is to pay to the plaintiffs a fair occupation rent, being the sum of $44,065.00, such amount to be deducted from Mr Sheffield’s share of the sale proceeds;
(l)Mr Sheffield is to pay to the plaintiffs their actual costs and disbursements of and incidental to this proceeding, reasonably incurred. That amount, once determined, is to be deducted from Mr Sheffield’s share of the sale proceeds.
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