Zhong v Levi HC Auckland CIV 2009-404-3190
[2010] NZHC 589
•31 March 2010
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2009-404-3190
UNDER The common law of torts and Part 13 of the
High Court Rules
IN THE MATTER OF A summary proceeding for the recovery of land
BETWEEN YING YING ZHONG Plaintiff
ANDALBERT LEVI Defendant
Hearing: 6 October 2009
Counsel: F C Deliu for Plaintiff
M V Rusk for Defendant
Judgment: 31 March 2010 at 4 pm
RESERVED JUDGEMENT OF ASSOCIATE JUDGE H SARGISSON (Application for summary judgment)
This judgment was delivered by me on 31 March 2010 at 4 pm pursuant to
Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar
Date ..........................
Solicitors:
Royal Reed & Associates, North Shore City
Thomas & Co, Waitakere City
Introduction
ZHONG V LEVI HC AK CIV-2009-404-3190 31 March 2010
[1] The plaintiff, Ms Ying Ying Zhong, applies for summary judgment. Ms Zhong is the registered proprietor of a property at 1685 Great North Road, Avondale. The defendant, Mr Albert Levi, and certain unnamed others, are in occupation of that property. Ms Zhong applies to the Court for the following:
a) Judgment for possession of the property under Part 13 of the High
Court Rules; and
b)A declaration that the defendant is unlawfully occupying and trespassing on the property.
[2] The defendant opposes this application on the principal basis that he has, or had, a right to possession as a tenant. He points to a residential tenancy agreement between himself and certain associates of the plaintiff or her father, who are the named landlords. It is not in dispute that a residential tenancy agreement of this description exists.
[3] The essential issue in this case is whether that agreement comprised a valid residential tenancy agreement between the parties that allows the defendant to claim a right to possession. This turns on the nature of the legal relationship that the defendant claims existed between the plaintiff, as registered proprietor, and his landlords, such that the latter were able to enter into the residential tenancy agreement in question and confer the possessory rights claimed.
[4] There are, further, questions as to whether resolution of this essential issue falls within the exclusive jurisdiction of the Tenancy Tribunal.
[5] This being a plaintiff’s application for a summary judgment, the plaintiff is to establish her entitlement to the orders sought and establish that there is no defence.
Background
[6] The plaintiff purchased the Avondale property in November 2008. There is dispute as to the capacity in which she purchased the property. The plaintiff contends she purchased it in her personal capacity with a view to occupying it with her husband. The defendant contends she purchased the property in the capacity of trustee for a business venture in which she was either one of several partners who each held a property for that venture distributing profits and losses between them equally, or a trustee for Mr Zhong, a partner in this same business venture.
[7] It is apparent that a business venture of this nature existed as between, at least, a Mr Wang, a Mr Li and a Ms Shen. The evidence of these three partners is that Mr Zhong agreed to join their investment group, and the existing partners accepted his joining, in late September, prior to the purchase of the property as an investment of that group. Mr Zhong acknowledges the existence of this investment group but contends that, despite Mr Wang’s efforts, he had declined to join, and that the property was not purchased pursuant to this venture.
[8] The legal form adopted by this investment group is unclear. Ms Shen, Mr
Wang and Mr Li point to C D Corporate Trustee Limited, incorporated on 21 August
2008. The directors and joint shareholders of that company, now struck off, are Mr Wang and Mr Li. Its significance is not immediately apparent. Certainly Mr Zhong was never a director or shareholder (and neither was Ms Shen) and the precise role of the company is unclear within a business venture involving, on Mr Wang, Mr Li and Ms Shen’s account, each partner holding a property individually.
[9] In any case, it is accepted that the Avondale property needed repair to restore it to a habitable state, and to this end the services of the defendant, an associate of Mr Wang’s, were engaged. Pursuant to an agreement between, at least, the defendant and Mr Wang, the defendant and his family were to reside at the property while undertaking the necessary repairs. The costs of these repairs and the value of the defendant’s labour were to be deducted from their rent.
[10] The plaintiff accepts that she knew the defendant was to reside at the property while undertaking repairs, though not his family. Mr Zhong, somewhat inconsistently, accepts that he knew of and acquiesced to the defendant undertaking
the necessary repairs but that Mr Wang went “behind his back” in permitting the defendant to reside at the property.
[11] The accounts of the defendant, Mr Wang, Mr Li and Ms Shen are different again. On their accounts, the agreement referred to above was reached at a meeting of the four business partners (being Mr Zhong, Mr Li, Ms Shen and Mr Wang), at which the plaintiff was present, on 5 January 2009. The agreement was formalised in a residential tenancy agreement of that date between Mr Sun (an employee of Mr Wang’s) and Mr Li for the investment group and the defendant. The tenancy agreement provided for a fixed term to 6 January 2010 and a weekly rental of $250 to be paid into Mr Sun’s bank account. The cost of repairs was to be deducted from this. Mr Zhong expressly denies this, contending, variously, that he never agreed to let the defendant live as a long-term tenant, had not in any case been authorised by the plaintiff to so agree, and that he suspects the residential tenancy agreement was “conjured up” by Mr Wang.
[12] The defendant and his family were residing at the property on 22 April 2009 when the plaintiff and Mr Zhong visited the property to, on their accounts, check on repairs. The plaintiff recounts that she was shocked to find the defendant’s family in occupation. She asked them to leave and an argument ensued. The plaintiff left.
[13] On 4 May 2009 the plaintiff and her partner visited the property with two police officers. The defendant was not present. On that day the defendant served a trespass notice on the plaintiff and Mr Zhong.
[14] On 5 May 2009 two police officers visited the property, at the request of the plaintiff, to remove the defendant and his family. Upon their presenting the residential tenancy agreement the police desisted. The plaintiff now seeks to effect recovery by way of summary judgment.
[15] The defendant opposes the orders sought on summary judgment, claiming a right to possession. In addition, in respect of the visits by the plaintiff and, on the plaintiff’s instructions, the police, the defendant counterclaims on three bases. First, that the plaintiff’s actions are in breach of the defendant’s right to quiet enjoyment of
the premises afforded him by s 38 of the Residential Tenancies Act 1986. Secondly, that the plaintiff has committed an offence under s 4(4) of the Trespass Act 1980 in wilfully trespassing after having been warned to stay off the property by way of the trespass notice served on 4 May 2009. Thirdly, that the plaintiff has breached the contract between the plaintiff and the defendant under which the plaintiff is said to owe labour costs only partially offset against rent. The defendant does not seek that these be resolved by way of summary judgment.
Legal principles on summary judgment
[16] The legal principles applying to applications for summary judgment are not in dispute. They were succinctly expressed by the Court of Appeal in Krukziener v Hanover Finance Ltd [2008] NZCA 187 at [26]:
The principles are well settled. 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 [1987] 1 NZLR 1 at 3 (CA). 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 (1997) 11 PRNZ 66 (CA). 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 [1980] AC 331 at 341 (PC). 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 (1987) 1 PRNZ
84 (CA).
Discussion
The plaintiff’s application for judgment for possession
[17] This case is concerned with entitlement to possession of the property in question. The plaintiff is the registered proprietor of that property. The proper starting point in such instances, as this Court recently noted in Kelly v Green HC Tauranga CIV-2009-470-426, 27 January 2010 at [4], is that the registered proprietor is entitled to exclude all other persons from his or her land. The plaintiff as registered proprietor thus has a prima facie entitlement to the orders sought.
[18] This being an application by the plaintiff for summary judgment the onus rests on the plaintiff to establish, further, that there is no defence. The defendant contends a residential tenancy agreement is, or was, operative in respect of the property, conferring on him a right to possession.
[19] If he is right about the existence of the agreement, it will be immaterial that any right to possession under the agreement may have ceased (contrary to the plaintiff’s submission). Part 13 of the High Court Rules, under which the plaintiff seeks relief, applies only to recovery of land occupied by “unlawful occupiers” as defined for the purposes of that Part, and that definition expressly excludes a tenant holding over after the termination of a tenancy:
13.1 Interpretation
In this Part, unlawful occupier means a person who—
(a) occupies or continues to occupy land of the plaintiff without the licence or consent of the plaintiff or the plaintiff's predecessor in title; and
(b) is not a tenant or subtenant holding over after the termination of a tenancy or subtenancy.
13.2 Application of Part
(1) This Part applies to every proceeding in which the plaintiff claims the recovery of land that is occupied solely by 1 or more unlawful occupiers.
…
[20] The plaintiff’s recourse were this defence to succeed would be, instead, to the Tenancy Tribunal by way of an application for a possession order under s 64 of the Residential Tenancies Act 1986.
[21] However, the determination as to whether such a residential tenancy agreement is, or was, operative, and valid in that it conferred on the defendant a right to possession, lies outside of the jurisdiction of this Court. Rather, it falls squarely within the jurisdiction of the Tenancy Tribunal under s 77 of the Residential Tenancies Act 1986. The section relevantly provides that:
77 Jurisdiction of Tribunal
(1)Subject to subsection (5) of this section, the Tribunal shall have jurisdiction to determine in accordance with this Act all disputes arising between landlords and tenants in relation to any tenancy to which this Act applies or to which this Act did apply at any material time.
(2) Without limiting the generality of subsection (1) of this section, the
Tribunal shall have jurisdiction to do the following things:
…
(b)To determine whether there is or is not, or was or was not at any material time, a tenancy agreement to which this Act applies in force in respect of any residential premises, and to determine the terms of and the parties to any such agreement
…
[22] That jurisdiction is exclusive. Section 82 provides, subject to exceptions that do not apply here, that “no court or other body shall have originating jurisdiction in respect of any matter that is within the jurisdiction of the Tribunal”. The plaintiff’s proper recourse is therefore to the Tenancy Tribunal.
[23] I am satisfied, in any event, that this case is unsuitable for summary judgment and were I incorrect in my concluding that the determinations sought in this case lie outside of the jurisdiction of this Court, I would decline the plaintiff’s application on this distinct basis. For completeness, my brief reasons follow.
[24] The defendant’s right to possession under the residential tenancy agreement will depend on whether that agreement creates a valid tenancy between the defendant and the plaintiff. The defendant claims that it does. He claims it does so because the legal relationship between the plaintiff and landlords is such that the latter were entitled to confer upon the defendant his right to possession, as partners to a business venture in respect of property of that venture which the plaintiff held as trustee.
[25] It is readily apparent that the nature of this relationship, and thus the validity of the tenancy between the parties, is subject to conflicting evidence.
[26] On the plaintiff’s account, corroborated by Mr Zhong, she purchased the property for her personal benefit. She is the registered proprietor. Her bank
statements disclose that she makes monthly interest payments and she deposes that these are towards a mortgage over the property. Neither the plaintiff nor Mr Zhong were partners to the business venture between Mr Wang, Mr Li and Ms Shen, though such a business venture did exist and Mr Zhong had been invited to join. The residential tenancy agreement was either a fabrication or, at the least, entered into without the knowledge, much less the authority, of the plaintiff. The defendant is an unlawful occupier and is trespassing on the plaintiff’s property.
[27] On the defendant’s account, corroborated by Mr Wang, Mr Li and Ms Shen, she purchased the property as a trustee for the business venture or for her father as a partner to that venture. Mr Wang paid a $20,000 deposit on the property as evidenced by a cheque butt. Minutes confirm the plaintiff’s and Mr Zhong’s presence at meetings of the partners to the business venture, confirm Mr Zhong’s joining that venture, confirm the purchase of the property for that venture under the plaintiff’s name and confirm the entry into the residential tenancy agreement by that venture with the defendant. This is all expressly denied by the plaintiff and Mr Zhong: Mr Zhong was unaware of Mr Wang paying a deposit and believes the minutes, as well as the residential tenancy agreement, were fabricated for the purpose of this hearing.
[28] The plaintiff has expressed concerns, which I share, as to the admissibility of certain of the defendant’s evidence. Letters from Mr Li and Mr Sun are annexed to Mr Levi’s affidavit rather than being deposed by those persons. Minutes are translated by an unnamed translator who has not sworn to the accuracy of that translation (though they are attached to Ms Shen’s sworn affidavit). The cheque butt has little evidential value and one presumes more convincing evidence of Mr Wang’s alleged payment of the deposit would have been easily obtainable. These go to the credibility of the defendant’s evidence, to the extent that that evidence is admissible at all.
[29] However, the plaintiff’s evidence is not without its inconsistencies. The plaintiff concedes that she knew the defendant was to reside at the property while undertaking repairs, an acknowledgment her father does not make despite it being apparent that he was far more instrumental in engaging the defendant’s services. In
the same affidavit, Mr Zhong contends that Mr Wang “did on several occasions try to convince me to join his group but I refused” but then that “[t]his whole story of an investment group is simply a lie”.
[30] This case reduces in large part to disputed issues of fact. There are material conflicts of evidence and to resolve those conflicts the Court would have to assess the credibility of the deponents. In these circumstances the summary judgment procedure is plainly not appropriate in terms of the long-established principles expressed in Krukziener. The evidence, even when approached in a robust and realistic manner, is insufficient to establish that there is no defence. This is the case even excluding from consideration that evidence in relation to which concerns as to admissibility have been raised. The plaintiff has not discharged her onus.
The plaintiff’s application for a declaration that defendant an unlawful occupier and a trespasser
[31] My conclusions above dispose of the plaintiff’s application for a declaration that the defendant is an unlawful occupier in terms of r 13.1 of the High Court Rules. The definition of unlawful occupier excludes a tenant holding over after the termination of a tenancy. On the facts as they stand whether or not the defendant is a tenant holding over is a determination falling outside of this Court’s jurisdiction, and is, in any case, a dispute I cannot resolve on an application for summary judgment.
[32] This brings me to the plaintiff’s application for a declaration that the defendant is a trespasser. On the defendant’s own account the term of the fixed-term tenancy on which he relies has expired. He is therefore in wrongful (if not, for the purposes of Part 13 of the High Court Rules, unlawful) occupation of the property as a tenant holding over after the termination of a tenancy. In that sense he may be a trespasser. But it does not follow that he is amenable to an action for trespass. Trespass is actionable at the suit of the person in possession. This situation is
discussed in Stephen Todd (ed) The Law of Torts in New Zealand (5th ed, Brookers,
Wellington, 2009) at [9.3.01]. The plaintiff is not in possession of the Avondale property.
[33] I have received no submissions as to the appropriateness of the declaration sought in these circumstances and on this basis I decline to make the declaration.
[34] The plaintiff’s remedy lies in an action for recovery either under Part 13 of the High Court Rules if she can establish, at the Tenancy Tribunal, that no valid tenancy existed, or under s 64 of the Residential Tenancies Act 1986 if she cannot.
Result
[35] The plaintiff’s application for summary judgment is declined.
[36] I reserve costs in accordance with the decision of the Court of Appeal in NZI Bank Ltd v Philpott [1990] 2 NZLR 403.
[37] The proceeding is adjourned to the chambers list for further mention on 22
September 2010 at 2:15 pm to allow the plaintiff an opportunity to make the necessary applications to the Tenancy Tribunal. Depending on the outcome, further
directions can be made on this proceeding or this proceeding can be struck out.
Associate Judge Sargisson
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