Sroubek aka Antolik v Bozhenko - [2023] NZHC 1995

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-2463

[2023] NZHC 1995

BETWEEN
KAREL SROUBEK aka JAN ANTOLIK

Plaintiff

AND

ALEXANDER BOZHENKO and NATALIA BOZHENKO

Defendant

EKATERINA BOZHENKO

Counterclaim Plaintiff

Hearing: 19 July 2023

Counsel:

Plaintiff in person

W A McCartney for the Defendants / Counterclaim Plaintiff

Judgment:

28 July 2023

JUDGMENT OF ASSOCIATE JUDGE BRITTAIN

This judgment was delivered by me on 28 July 2023 at 12 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors/Counsel:
Davies Law, Auckland
Carson Fox Legal, Auckland

SROUBEK v BOZHENKO [2023] NZHC 1995 [28 July 2023]

Introduction

[1] The plaintiff, Karel Sroubek, and the counterclaim plaintiff, Ekaterina Bozhenko, were in a relationship from 2011 and married in 2016. Following the dissolution of their marriage in 2020, they have been involved in litigation as they endeavour to untangle their financial affairs.

[2] In 2020, Mr Sroubek commenced this proceeding, claiming an equitable interest in a property at 22 Abbotts Way, Ellerslie, Auckland (the property), owned by the defendants, Alexander and Natalia Bozhenko, the parents of Ms Bozhenko. Mr and Mrs Bozhenko live in Russia.

[3] Mr and Mrs Bozhenko and Ms Bozhenko have counterclaimed against Mr Sroubek, claiming amounts allegedly due from Mr Sroubek under a loan agreement, and for outstanding rent in respect of the property.

[4] In 2021, Ms Bozhenko commenced a proceeding in the Family Court seeking orders in respect of relationship property. The relationship property proceeding has been transferred to this Court and consolidated with this proceeding.

[5] Mr and Mrs Bozhenko now seek an order that Mr Sroubek give security for costs in respect of his claim.

Background

[6] On 17 June 2015, Mr Sroubek and Ms Bozhenko successfully bid at auction and signed an agreement for sale and purchase to buy the property for $1,702,000. On 29 June 2015, they met with Bruce Webster, an accountant, to discuss their plans for the property.

[7] An email from Mr Webster to them the day after the meeting records discussion of a possible joint venture as between Mr Sroubek, Ms Bozhenko and Mr and Mrs Bozhenko, for the purpose of subdividing and developing the property.

[8] On 15 July 2015, Mr Sroubek and Ms Bozhenko nominated Mr and Mrs Bozhenko to complete the purchase. The purchase was settled on 17 July 2015. The price was funded in part by a loan advance from ASB Bank of $1,100,000. The balance of the funds appear to have come from Mr and Mrs Bozhenko. Title was registered in the names of Mr and Mrs Bozhenko. Mr Sroubek and Ms Bozhenko moved into the old villa on the property.

[9] The parties have different views as to the basis on which the property was purchased and the contributions made by each party, if any, to the purchase and development of the property.

[10] Mr Sroubek claims that he is beneficially entitled to a 25 per cent ownership interest in…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] NZHC 1995
Decision Date: 28 July 2023

CaseChat Overview and Summary

In the case of Sroubek aka Antolik v Bozhenko, the High Court of New Zealand considered whether Karel Sroubek, the plaintiff, should provide security for costs in his claim against Alexander and Natalia Bozhenko, the defendants, for an alleged equitable interest in a property. Ekaterina Bozhenko, the former partner of Sroubek and the daughter of the defendants, also filed a counterclaim against Sroubek for alleged unpaid rent and a loan default. The court needed to decide if it would be just to require Sroubek to provide security for costs under the High Court Rules, considering his financial situation and the merits of his claim.

The court assessed whether the threshold for requiring security for costs was met, focusing on Sroubek's residency and his ability to pay costs if his claim was unsuccessful. The court found that while Sroubek was not currently residing outside New Zealand, there was reason to believe he would be unable to pay costs if unsuccessful due to his financial history, including imprisonment, liquidation of his business, and lack of current evidence of income. The court also considered the merits of Sroubek's claim, finding it tenable, and the relationship property proceeding that required resolution alongside Sroubek's claim. Despite the defendants' delay in applying for security for costs, the court concluded that it was just not to require security for costs, balancing the interests of both parties and the need for a comprehensive resolution of all claims.

The application by Alexander and Natalia Bozhenko for security for costs was dismissed. The proceeding was adjourned for a case management conference to be scheduled by the Registrar.

Orders