Washikita v Smith

[2022] NZHC 3524

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-001132

[2022] NZHC 3524

BETWEEN

HISAKO WASHIKITA

Plaintiff and Second Counterclaim Defendant

AND

JOHN SOLOMON SMITH

First Defendant and Counterclaim Plaintiff

AND

ROBYN CHRISTINE MCALLISTER

Second Defendant

AND

AKIRA WASHIKITA

First Counterclaim Defendant

Hearing:

2 December 2022

Appearances:

P J Davey for Plaintiff

S P H Elliott for Defendants

Judgment:

19 December 2022

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 19 December 2022 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

WASHIKITA v SMITH [2022] NZHC 3524 [19 December 2022]

Table of Contents

Para No

The background	[3]
Summary judgment principles	[30]
The claim for possession	[34]
The grounds of defence	[40]
Material disputes of fact	[42]
The alleged oral agreement
[51]
Was there an oral agreement?
Uncertainty and part performance	[69]
Constructive trust	[76]
Unconscionability	[84]
Result	[92]

[1]    Mrs Washikita and her husband live in Japan and are elderly. Mr Washikita has dementia and can take no part in this proceeding. Mr and Mrs Washikita are the owners of a property at Auckland which they purchased in 1992 from a company owned by the first defendant, Mr Smith. Since then, Mr Smith and his family, which includes the second defendant, have been allowed to live in the property rent free, although paying outgoings and maintaining the property. Mrs Washikita has required Mr Smith to vacate the property but he has not done so, and Mrs Washikita has commenced this proceeding seeking an order for possession by way of summary judgment.

[2]    The defendants oppose summary judgment. Mr Smith says he had an informal agreement with Mr Washikita granting him a right of first refusal to purchase the property and agreeing to reimburse him for all costs incurred in respect of the property. Mr Smith says he wishes to purchase the property but only if his right to reimbursement is recognised, which Mrs Washikita will not do. He also contends that he has an interest in the property under a constructive trust by virtue of his contributions to it. Finally, the defendants argue the case is unsuitable for summary judgment due to the existence of factual disputes.

The background

[3]    Mr Washikita and Mr  Smith  became  acquainted  in  around  1991  when  Mr Smith visited Japan. Mr Washikita then travelled to New Zealand in around October 1992. Mr Smith was a builder and was building a house at 14 Perotti Place, Conifer Grove, Auckland.  Mr Smith offered to sell the property to Mr Washikita for

$250,000, which he said was for “no profit”. This was said to reflect the men’s friendship, that the house was incomplete, and the possibility of future business opportunities they had discussed. Mr Smith provided a breakdown of the $250,000 as being made up of a mortgage of $190,000, chattels of $25,000, and his labour of

$35,000. There were no details of the land and building…