Willman v Coronno HC Wellington CIV 2010-485-868

[2010] NZHC 1056

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV 2010-485-000868

BETWEEN  BRIAN WILLIAM WILLMAN Plaintiff

ANDCLAUDE TENNYSON CORONNO First Defendant

ANDMENJULYN CORONNO Second Defendant

Hearing:         14 June 2010

Counsel:         R C  Laurenson for plaintiff

C T Coronno first named defendant in person (and on behalf of M Coronno)

Judgment:      14 June 2010

ORAL JUDGMENT OF ASSOCIATE JUDGE ABBOTT

Counsel:

Peterson Law Limited, PO Box 342, Wellington

C T and M Coronno, 19 Kingston Heights Road, Wellington

WILLMAN V CORONNO & ANOR HC WN CIV 2010-485-000868  14 June 2010

[1]      The plaintiff (Mr Willman) has applied by way of summary judgment for an order  granting  him  possession  of  a  property  at  19  Kingston  Heights  Road, Wellington.

[2]      Mr Willman obtained the property from the defendants in July 2009.   The defendants were in financial difficulties.   Mr Willman agreed to assist them by taking property pursuant to an agreement for sale and purchase, which provided that Mr Willman would acquire the property on terms set out in a declaration of trust executed contemporaneously with the agreement for sale and purchase.

[3]      The objective of the parties was for Mr Willman to pay the funds needed to allow the defendants to clear the existing mortgages on the property, and provide a buffer sum (in the order of  $32,000) to  be  applied in payment of the costs of financing and the outgoings over the following twelve months.  The parties agreed that the defendants would remain in the occupation of the property (under a licence to occupy) until sale.  This arrangement was to provide time for the property to be sold at its optimum price.  Under the terms of the deed of trust, Mr Willman was to account to the defendants for surplus funds after clearing the borrowings that he took out to settle the defendants’ prior mortgages, and reimbursing himself for any outstanding outgoings, the costs of sale and any other expenses incurred.

[4]      The twelve month period has nearly expired, and the buffer sum has been exhausted.   The property has been marketed at least since December 2009.   Mr Willman came to the view, prior to issuing this proceeding, that he needed to obtain vacant possession in order to effect a sale.

[5]      Mr Willman spoke to the defendants, and endeavoured to have them vacate the property.  They said that they would vacate as and when a sale was due to take place, but were unwilling to vacate ahead of that.  Accordingly, after taking the view that it was necessary to have vacant possession to obtain an agreement, Mr Willman issued this proceeding.

[6]      The proceeding was served on the defendants on 16 May 2010.  They have taken no steps.

[7]      When  the  application  was  called,  counsel  for  Mr  Willman  produced  an updating affidavit from Mr Willman, producing an agreement for sale and purchase of the property dated 31 May 2010.  That agreement is conditional on the purchasers satisfying themselves on various aspects of the transaction by tomorrow.   The agreement contains a specific clause making the agreement conditional on vacant possession, whilst also making provision for the possibility that vacant possession might not be available by the date of possession (15 July 2010), and for cancellation of the agreement if vacant possession is not available by 15 October 2010 (at the latest).

[8]      Mr  Coronno  appeared  at  the  hearing  today,  notwithstanding  that  the defendants have not filed any opposition.   Essentially he wishes to have time to procure an agreement at a higher value.  He contends that he has persons who are interested in the property, although he acknowledges that no one in fact has made an offer and he was unable to produce any evidence today of a higher bid.  He seeks further time and claims, as grounds for opposing an order today, that the parties have an agreement that Mr Willman would not enter into any agreement without prior consultation with him.   He maintains that this was an oral agreement made at the time that the parties entered into the underlying agreement, declaration of trust and licence to occupy.

[9]      Counsel for Mr Willman submitted that Mr Willman was entitled to an order today.   He argued that the only issue for the court was whether Mr Willman was acting in accordance with the terms of the trust.  He contended that if Mr Willman had acted in accordance with the terms of the trust price was not relevant to the determination.

[10]     Whilst  I appreciate that the defendants will wish to achieve the best recovery possible out of any sale of the property (it has been their family home for many years), I am not persuaded that Mr Willman is acting in any way contrary to the deed of trust.

[11]     The defendants have taken no steps.  Mr Coronno’s claim that he had an oral agreement as to consultation over price is unsupported by any evidence, and cannot

be supported in any way by any terms within the deed of trust.  It is material that the declaration  of  trust  and  the  related  licence  to  occupy  were  prepared  by  the defendants’ solicitor.  Mr Coronno informed me that the alleged oral agreement took place between the parties in the presence of the defendants’ solicitor, and at the time that the declaration of trust was signed.  I find it unlikely that there would have been an agreement of that sort without either an amendment to the declaration of trust or, at the very least, some other written acknowledgment at the time.  In that respect I note the evidence of Mr Willman that there were no collateral arrangements in relation to sale.

[12]     Mr Coronno also says that he found a financier to meet Mr Willman’s interest and outgoings on the property, so as to allow an extended period of marketing. Although there is no evidence of this before me, I am prepared to accept this. However,  I do  not  see  that  it  alters  the  overall  position.    Mr  Willman  had  an entitlement, pursuant to the terms of the declaration of trust, to be clear of this matter.

[13]     I also doubt that this property is likely to sell at the higher prices that the defendants obviously have in mind.  Mr Willman has produced evidence of efforts of marketing since December 2009.  The defendants’ expectations have, unfortunately, been coloured by a registered valuation obtained some time ago, and before the recent economic downturn.  That valuation was in the high $700,000’s.  Mr Willman has produced marketing reports from  agents which present a  clear and uniform picture that the price that was being sought (around the $700,000 mark) was unrealistic.  I am satisfied from the evidence on the file that Mr Willman had done all that he could reasonably have been required to do to obtain a realistic sale price.

[14]     I also take into account that the defendants have chosen not to file  any opposition, and have not refuted Mr Willman’s evidence that there were no collateral arrangements.

[15]     Lastly, I accept the submission made by counsel for Mr Willman that if there was any merit in the defendants’ complaint that the present agreement is at an under value,  the defendants  would  have the right  to  sue Mr  Willman  in  respect  of  a

possible breach of trust.   They would also have rights of appeal.   In either event, however, they will need to produce the evidence in support of that contention.  That is lacking at this time.

[16]     From my reading of the file, Mr Willman has acted very generously towards the defendants.   He is at risk that if this matter does not settle, the value of the property may not be sufficient to meet the debt that he has incurred in endeavouring to help the defendants.  As I have said, I consider that he is acting in accordance with his obligations under the deed of trust.  He is entitled to the order for possession.

[17]     I make an order accordingly that the plaintiff is granted vacant possession of

19 Kingston Heights Road, Kingston, Wellington as set out in paragraph 3 of counsel’s memorandum of 14 June 2010.  The order is to take effect after 28 June

2010.

[18]     Counsel  for  Mr  Willman  also  sought  an  order  for  costs  either  on  a solicitor/client basis, or on a scale 2B basis.  There is no provision in the declaration of trust for costs on a solicitor/client basis.  In the circumstances of the case I do not consider there to be a basis for indemnity costs.   I consider that scale costs are appropriate.  Counsel has provided a memorandum setting out those costs, adjusted to allow for the fact that it has now taken a full half day to reach this matter in the list today, and to deal with it.  I make an order in terms of the memorandum, that the defendants  pay  the  plaintiff  costs  on  a  2B  basis  of  $8,480,  together  with

disbursements of $1,140.

Associate Judge Abbott