Siddiqui v Siddiqui

[2021] NZHC 2776

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-000798

[2021] NZHC 2776

BETWEEN

ASHISH SIDDIQUI AND YASHIKA SIDDIQUI

Applicants

AND

AMIN AZHAR SIDDIQUI AND USHA AMIN SIDDIQUI

Respondents

Hearing:

On the papers

Counsel:

G D Stringer & R Rao for Applicants

J S Cooper QC, A E Hansen & L A Sheppard for Respondents

Judgment:

15 October 2021

JUDGMENT OF PAUL DAVISON J

[Re: Application for Stay of Judgment]

This judgment was delivered by me on 15 October 2021 at 4:00 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:

Inder Lynch, Manukau, Auckland Heimsath Alexander, Auckland

SIDDIQUI v SIDDIQUI [2021] NZHC 2776 [15 October 2021]

Introduction

[1]    Ashish and Yashika Siddiqui (the applicants) have appealed against my judgment delivered on 28 May 2021 in which I found that they hold the property 126A Gloucester Road Manurewa (the property) as trustees for the respondents, and made an order directing them to transfer the legal title to the respondents forthwith when called on to do so. 1 Further orders directed the respondents on transfer of the property to them, to pay the applicants the principal sum then owing under the ANZ National Bank mortgage on the property (the mortgage), together with $92,852, and the amount of the mortgage payments made by the applicants since 30 April 2021.2

[2]    By interlocutory application dated 28 July 2021 the applicants now apply for an order staying execution of the judgment pending determination of their appeal. They seek a stay of the executory parts of the orders, namely the order directing them to transfer the property to the respondents when called on to do so, so that the property will remain in their ownership until their appeal is determined and the issues of ownership, beneficial interests, and any adjustment sums to be payable are determined by the appeal. The respondents oppose the application.3

[3]    The proceeding arises from a dispute between family members. Ashish Siddiqui is the respondents’ son, and his wife Yashika Siddiqui is their daughter-in-law. The full background giving rise to the dispute over the ownership of the property is set out in my judgment of 28 May 2021.

[4]    Both parties have filed written submissions and agree that it is appropriate that the application be determined on the papers.

Background to the application

[5]    Since the judgment was delivered the respondents have continued to reside in the house on the property, and the applicants have continued to meet the mortgage payments.

1      Notice of Appeal dated and filed 24 June 2021; CA 376/2021.

2      Siddiqui v Siddiqui [2021] NZHC 1234 at [175]–[179].

3      Notice of opposition dated 12 August 2021.

[6]    On 7 July 2021 the applicants’ solicitors wrote to the respondents requesting that they take no steps to enforce the judgment and that enforcement be stayed pending determination of their appeal.

[7]    On 22 July 2021 the respondents’ solicitors wrote to the applicants’ solicitors enclosing a copy of sealed court orders in terms of the judgment and advising that the respondents had arranged bank funding and required the applicants to transfer the title of the property to them in terms of the sealed orders.

[8]    The applicants have requested the respondents to defer execution of the judgment pending determination of the appeal. However, the respondents have arranged bank finance and wish to implement the terms of the judgment and have the property transferred to them.

Submissions

The applicants

[9]    Mr Stringer for the applicants submits that their appeal will be rendered nugatory if the stay is not granted. He notes that the applicants do not challenge the findings of a constructive trust, but rather the categorisation of it as being a common intention constructive trust, and the failure to recognise the applicants’ interests in the property.

[10]   He submits that an order staying execution of the judgment will ensure that the property will remain in the ownership of the applicants until such time as the appeal resolves the issues of the beneficial interests and any adjustment sums that may be payable to the applicants. If the judgment orders are executed the applicants will be required to transfer ownership of the property to the respondents in circumstances where they contend that they should receive a greater adjustment sum and are entitled to a proportionate share of the equity in the property.

[11]   Mr Stringer says that if the property is transferred to the respondents prior to the appeal being determined and the applicants’ appeal succeeds, resulting in the respondents being ordered to make a further adjustment payment, then the applicants

will be required to embark on a new court proceeding to obtain judgment and seek an order for sale of the property. He submits that the transfer of the property is inextricably tied to and dependant on the respondents’ interest in the property and any adjustment sum that is payable to the applicants.

[12]   Counsel says that the applicants are bona fide in pursuing their appeal and have undertaken their preparation of the document bundle, will pay the security of costs,4 and will be seeking a fixture. Mr Stringer submits that the respondents will not be injuriously affected by a stay as they remain in occupation of the property with the applicants continuing to meet the mortgage payments and thereby complying with the Court order.

[13]   Mr Stinger submits that the overall balance of convenience favours granting the stay until the appeal is resolved, and he says the applicants have the financial means to meet any damages that may arise from the stay and to meet any order for costs that may be ordered against them.

The respondent

[14]   Ms Cooper QC for the respondents submits that the absence of a stay will not render the applicants’ appeal nugatory, and there is no need to preserve the applicants’ position as the holders of legal title to the property pending determination of their appeal. She notes that the applicants seek to argue on appeal that they should be recognised as having a share in the property proportionate to their financial contribution to it and that they are also entitled to various set-offs.

[15]   Ms Cooper says that it is significant that the applicants are not contending that they are solely entitled to retain legal title to the property, and consequently it is unnecessary for them to continue to hold legal title in the interim, pending determination of the appeal. She submits that the respondents will be adversely affected by a stay, noting that the judgment gave the respondents a period of three months to seek transfer of the property. The respondents have secured mortgage finance enabling them to call on the applicants to transfer the property to them, and if

4      Security for Costs is set by the Court of Appeal in the sum of $7,060 due 19 August 2021.

they are forced to wait until the appeal has been determined and the judgment is upheld, they will have to once again apply for bank mortgage finance and there is no guarantee that they would obtain it at that time having regard to their ages and financial position.

[16]   Counsel also relies on the contents of the affidavit by the respondent Mr Amin Siddiqui. In his affidavit Amin Siddiqui says that he and his wife Usha Siddiqui are both aged 65 years. He says that they have previously shown that they are able to secure bank mortgage finance and have again done so since the judgment was delivered in May 2021based on their current financial circumstances. Having regard to their ages they cannot know how much longer their financial position will continue as it currently is, enabling them to satisfy bank lending criteria. Mr Amin Siddiqui says that the bank lending criteria could change and be stricter in 2022 with the result that he and his wife may not qualify for bank mortgage finance.

[17]   He further says that a stay will also prevent he and his wife from making deliberate lifestyle changes that would affect their financial position, such as moving from full-time employment to semi-retirement or voluntary retirement. However, if the stay is granted and they then have to re-apply for bank mortgage finance in the future they could not make any such work related changes as doing so could jeopardise their prospects of securing bank finance in the future.

[18]   He further says that although the applicants have continued to meet the mortgage payments on the property which they will be required to reimburse them for, on settlement and transfer, that situation is nevertheless detrimental to them because they are making interest only mortgage payments, and the lower the level of payments being made by the applicants now, the greater amount of interest the respondents will have to pay in the long run. Furthermore, with the prospect of increased interest rates, the longer they are required to wait before the property is transferred to them, the higher the interest rate applicable to their borrowings is likely to be. A further adverse effect of not having the title to the property registered in their name is that they are unable to apply for government grants such as for home insulation despite paying the rates on the property. He says that further delay caused by granting the stay would

compound the years of distress he and his wife have experienced as a result of the long-running dispute over the property.

[19]   Ms Cooper also submits that the applicants’ grounds of appeal lack merit and have no realistic prospect of success. Ms Cooper notes that the applicants’ primary ground of appeal challenges the Court’s finding that the applicants hold the property on constructive trust for the respondents which followed the Court’s finding that at the time the property was purchased the parties had a shared intention that the respondents would have full beneficial ownership of the property. Ms Cooper submits that to succeed on this appeal ground the applicants will have to overcome the high threshold of satisfying the appellate court that it should disturb this Court’s factual findings supported by the evidence.

[20]   Counsel notes that the respondents have signed and filed an undertaking stating that if they are successful in opposing the application for stay they undertake not to sell or transfer the property until the appeal has been determined or is abandoned or before 30 June 2022, whichever event is earliest. Ms Cooper says that the date 30 June 2022 has been selected on the basis that if the appeal proceeds without unnecessary delay it ought to have concluded prior to that date. However, provided the appeal is pursued in a timely fashion, if it has not been concluded by 30 June 2022, the respondents will consider providing a further time-limited undertaking.

[21]   Ms Cooper finally submits that the overall balance of convenience favours dismissing the application for stay and thereby allowing the respondents to enjoy the fruits of the judgment. Counsel concludes by opposing an award of costs being made against the respondents and submits that as the respondents are legally aided and there are no exceptional circumstances which would justify an award of costs, no costs ought to be awarded against them in relation to the application.

Law

[22]   Rule 12(3)(a) of the Court of Appeal (Civil) Rules 2005 contains the power for a court appealed from, to order a stay of the execution of a decision under appeal. The stay may relate to execution of the whole or part of the decision or to a particular

form of execution and be made subject to such conditions as the court appealed from thinks fit, including conditions relating to security for costs.5

[23]   Referring to applications for a stay brought under r 12(3) the Court of Appeal in Keung v GBR Investment Limited explained:6

In determining whether to grant a stay the Court must weigh the factors “in the balance” between the successful litigant’s rights to the fruits of a judgment and “the need to preserve the position in case the appeal is successful”.7 Factors to be taken into account in this balancing exercise include:8

(a)Whether the appeal may be rendered nugatory by the lack of a stay;

(b)The bona fides of the applicant as to the prosecution of the appeal;

(c)Whether the successful party will be injuriously affected by the stay;

(d)The effect on third parties;

(e)The novelty and importance of questions involved;

(f)The public interest in the proceeding; and

(g)The overall balance of convenience.

That list does not include the apparent strength of the appeal but that has been treated as an additional factor.9

Analysis

[24]   In considering the balance between the respondents’ rights to the fruits of the judgment and the need to preserve the position, in case the appeal is successful, by reference to the Keung factors, the most relevant factors are: whether the appeal will be rendered nugatory unless an order for stay of execution of the judgment is made, and particularly staying the order requiring the applicants to transfer the property to the respondents; whether the successful party will be injuriously affected by a stay; and the overall balance of convenience. It is not suggested that: the applicants are not bona fide as regards their appeal; there are any third parties involved who will be

5      Court of Appeal (Civil) Rules 2005, rr 12(3) and (4).

6      Keung v GBR Investment [2010] NZCA 396 at [11].

7      Duncan v Osborne Buildings Ltd (1992) 6 PRNZ 85 (CA) at 87.

8      Dymocks Franchise Systems (NSW) Pty Ltd v Bilgola Enterprises Ltd (1999) 13 PRNZ 48 (HC) at [9].

9      Body Corporate No 188529 v North Shore City Council (No 6) HC AucklandCIV-2004-404-3230, 11 February 2009.

affected; there are novel or important questions involved; or there is any issue or matter of public interest.

[25]   However, I consider that the most compelling factor is the injurious affect that a stay of execution will be likely to have on the respondents and their future ability to obtain bank mortgage finance, to enable them to conclude the settlement with the applicants upon transfer of the property to them. At their present ages of 65 years, the respondents’ ability to satisfy bank mortgage lending criteria will undoubtedly become more difficult and problematic with the passage of time by reason of their ages, and by reason of their  financial  circumstances,  their  incomes  and  employment.  As Mr Amin Siddiqui stated in his affidavit, the likelihood of interest rate increases over the next few years is a realistic assumption, as are changes to bank lending criteria which may become more difficult or even impossible for the respondents to comply with in the future. Interest rate increases and lending criteria changes are likely to occur over the interval of time, prior to determination of the applicants’ appeal, and in the event that the respondents are successful but unable at that future time to obtain bank finance for the transfer of the property, the whole underlying purpose of their claim in the proceedings would be frustrated. In my view the very real possibility of that occurring is a weighty factor when considering the balance of convenience and overall interests of justice in this case.

[26]   The respondents are currently in a position to finance a transfer of the property and they have provided an undertaking not to sell or transfer it pending determination of the appeal by 30 June 2022. In this context it is also relevant to note that the present opportunity to acquire a house for themselves may well be the only opportunity that they are likely to have. Indeed it was that very situation that led to the arrangements which they made with the applicants regarding the purchase of the property.

[27]   In my view the applicants’ appeal will not be rendered nugatory by declining to grant a stay. Provided the respondents still own the property when the appeal is determined, and should the appeal be successful, the property in the hands of the respondents will still be available to be made the subject of an appellate court’s orders. Conversely however, if a stay is ordered and the respondents are prevented from using their currently available mortgage finance to require and effect a transfer of the

property to themselves, even if they successfully oppose the appeal they may find themselves in a position in which they are no longer able to obtain the mortgage finance that would enable them to secure ownership of the property in their own names.

[28]   When these two competing scenarios are weighed, I consider that the real risk that the respondents’ claim to ownership of the property could be entirely frustrated due to the delay that will occur before a transfer of the property to the respondents was required to be implemented by the applicants, significantly outweighs the purely financial consequences for the applicants should they succeed in their appeal and seek to recover an additional sum of money from the respondents.

[29]   It is also relevant that after such a lengthy history of the dispute between these family members that the respondents are able to take advantage of their successful claim of ownership now and take such steps as may be available to them to maximise their opportunity to reduce their borrowing and consolidate their financial position by fixing interest rates and repaying principal. While they can derive significant benefits from doing so, they will not be adversely affecting the position of the applicants should they be successful in their appeal and become entitled to a proportionate share of ownership of the property or to the payment of an additional sum greater than that provided for by the judgment under appeal.

[30]   Standing back, I consider that the overall balance of convenience strongly favours the respondents and I accordingly conclude that the application for stay of execution of the judgment, and particularly the order requiring the applicants to transfer the property to the respondents on the basis set out in paragraphs [175]–[176] of my judgment,10 should be declined.

Result

[31]   The application for an order for stay of execution is declined and their application dismissed.

10     Siddiqui v Siddiqui, above n 2.

[32]   The respondents having succeeded are entitled to an award of costs and to recover their reasonable disbursements. I direct the parties to each file a costs memorandum. The respondents are to file and serve their costs memorandum within 10 working days of delivery of this judgment. The applicants are to file and serve their costs memorandum within five working days following service of the respondents’ memorandum. The memoranda are not to exceed three pages in length apart from annexures.

Paul Davison J