CHISWELL v CUNYNGHAME [2020] NZHC 1651

CHISWELL v CUNYNGHAME [2020] NZHC 1651 [10 July 2020]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2019-404-531[2020] NZHC 1651UNDER The Property Law Act 2007IN THE MATTER OF an application under s 339BETWEEN IAN KEVIN CHISWELLApplicantAND DIANA PATRICIA CUNYNGHAMERespondentHearing: 17 June 2020Appearances: A J Peat for ApplicantT Greenwood for RespondentJudgment: 10 July 2020JUDGMENT OF PAUL DAVISON JThis judgment was delivered by me on 10 July 2020 at 3:00 pmpursuant to r 11.5 of the High Court Rules.Registrar/Deputy RegistrarSolicitors:Duncan King Law, AucklandGreenwood Law, OneroaIntroduction[1] Ian Chiswell (the applicant) and Diana Cunynghame (the respondent) arebrother and sister. They each own a half share of the residential property at 8 FourthAvenue, Onetangi, Waiheke Island (the property), where the respondent resides withher partner. The relationship between brother and sister has deteriorated to the pointthat they no longer speak to one another.[2] The applicant would like to sell the property and applies for leave to commencea proceeding by originating application to apply for an order for sale of the propertypursuant to s 339 of the Property Law Act 2007 (the Act). The respondent opposes theapplication.Background[3] The property was owned and occupied by the parties' mother, Ruth Chiswell(Ruth) until her death in January 2011. Upon her death, the property passed bytransmission to the applicant and respondent initially as executors of Ruth's will, andthereafter by transfer with each of them becoming the owner of a half-share of theproperty on 21 March 2011.[4] The respondent and her partner had also been living at the property prior toRuth's death, and ever since then they have continued to reside at the property. Theapplicant says that the respondent's continued occupancy of the property was initiallya matter of mutual convenience, but that there was no arrangement made or agreementbetween them that she and her partner could reside there rent free or forever.[5] The applicant says that he has been excluded from any use or enjoyment of theproperty by the respondent over the past two years or so. He says that on a number ofoccasions over the years since their mother's death he has asked the respondent to paysome rent for her use of the property, but she has repeatedly refused to do so. He saysthat he has also asked the respondent to agree to sell the property or consider somealternative arrangements, but that she has similarly refused to entertain hissuggestions.[6] The applicant says that he would now like to have the property sold so that hecan have access to the value of his half interest in the property. He says that hecurrently lives on a tight budget and needs the money presently tied up in the propertyto better support himself and his two sons. The applicant says that the house on theproperty has deteriorated over the years and without maintenance has becomerundown.[7] The applicant applies pursuant to r 19.5 of the High Court Rules 2016 for leaveto commence proceedings by originating application on the grounds that theoriginating application procedure is in the interests of justice and will assist with thejust, speedy and inexpensive determination of the dispute and matters in issue betweenhim and his sister. He says that the proceeding will be an application under s 339 ofthe Act and that the issues are clearly defined and the relevant evidence can beadequately addressed by means of affidavits. He further submits that the disputebetween the parties does not involve wide ranging factual issues, and is not such asrequires particularised pleadings, interlocutory applications, or discovery beforeproceeding to a substantive hearing.[8] The respondent opposes the granting of leave on the grounds that theoriginating procedure is not appropriate for the dispute because: she intends to bringa counterclaim; there are broad ranging issues to be resolved; discovery will benecessary; and interlocutory applications are likely.SubmissionsApplicant's submissions[9] Mr Peat, counsel for the applicant, says that the Court has a discretion to grantthe applicant leave if it considers that use of the originating application procedure isin the interests of justice. He submits the assessment of where the interests of justicelie is informed by the general objective of the High Court Rules as appear from r 1.2and the just, speedy and inexpensive determination of the matter in dispute.[10] Mr Peat submits that the originating application procedure will enable theparties to be fully informed of the issues in dispute without recourse to detailedpleadings and particulars. He submits that an application for an order for sale anddivision of the proceeds pursuant to s 339 of the Act is a straight forward applicationof a statutory provision.[11] Mr Peat notes that the Court has previously observed that applications pursuantto s 339 of the Act may not be well suited to the summary judgment procedure, whilethe fact that the proposed application will involve the application of a statutory testand statutory considerations is a factor supporting the use of the originating applicationprocedure.1 He notes that the Court has granted leave for the use of the originatingapplication procedure in a number of cases where orders for sale of properties havebeen sought.2[12] The applicant says that having regard to the nature of the dispute there will beno need for orders for discovery to be made. He notes that, pursuant to s 341 of theAct, an application for an order for sale of division of proceeds may be made by a co-owner of any property, and the relevant considerations applicable to whether the Courtshould make an order are set out in s 342.[13] Counsel submits that the deadlock that exists between the parties as co-ownersof the property is a clear basis for the making of an order for sale. Addressing each ofthe s 342 considerations, Mr Peat says that each of the statutory considerations can bereadily covered by affidavit evidence. He says that any documents considered relevantby the parties can be exhibited by affidavit.Respondent's submissions[14] Mr Greenwood, counsel for the respondent, notes that the respondent is nowaged 70 and has been living at the property for approximately 22 years. She is retiredand has modest savings and no other property in which she could reside. MrGreenwood says that faced with the possible sale of the property, the respondent1 Bayly v Hicks [2012] NZCA 589 at [31]; and Solar Bright Ltd v Martin [2019] NZHC 300 at [23].2 For example Mortenson v Tui [2019] NZHC 338.intends to both oppose the sale and to bring a counterclaim in order to seek an orderfor sale of another property jointly owned by the parties situated on Great BarrierIsland.[15] Mr Greenwood submits that the respondent's intention to bring a counterclaimis a factor that should lead the Court to conclude that the originating applicationprocedure is not suited to the determination of the dispute between the parties.[16] Mr Greenwood says that the issue of the relative hardship that would be causedto the parties by an order for sale is a relevant consideration which the Court must takeinto account. He submits that as both parties have indicated they will suffer hardship,the competing contentions will give rise to a broad range of factual issues surroundingthe issue of any hardship claimed by them resulting from the making or declining ofan order for sale. Mr Greenwood says that supporting documents to establish theparties' financial positions will be required and therefore discovery will be necessary.[17] Mr Greenwood further says that the applicant may revive his previous claimfor the payment of rent by the respondent and, were he to do so, there would be thepossibility of interlocutory applications being required in relation to such a claim. Hesays that there may also be a question of issue estoppel in relation to representationsmade by the applicant and relied on by the respondent regarding her remaining in theproperty following their mother's death.Discussion[18] The type of proceeding suited to the employment of the originating applicationprocedure was considered in Hong Kong and Shanghai Banking Corporation Ltd vErceg wherein Asher J observed:3[25] These cases show that the type of proceeding suited to the originatingapplication procedure is a straightforward application, not requiring detailedpleadings or interlocutory orders for its fair resolution. Such a type ofproceeding tends to be an application under a specific statutory provision,where the issue that arises can be clearly defined, and the issues confined. Theprocedure is not well suited to the determination of substantive rightsinvolving the application of common law doctrines as distinct from statutory3 Hong Kong and Shanghai Banking Corporation Ltd v Erceg (2010) 20 PRNZ 652 (HC).tests. It is not well suited to cases involving multiple parties, and cases wherethere is the possibility of cross-claims or counterclaims.[19] The present case is, in my opinion, well suited to being brought by way of theoriginating application procedure. Here, the issue in dispute is whether the applicantsucceeds in obtaining an order for sale of the property pursuant to s 339 of the Act. Asa co-owner, the applicant is qualified to bring such an application. The considerationsthat the Court is required to take into account in determining the application arestipulated by s 342, and the evidence relevant to those considerations can be presentedefficiently and effectively by affidavits.[20] In my view, the proposed proceeding is an example of a relativelystraightforward application of the statutory test and considerations prescribed by s 342of the Act rather than the determination of substantive rights and the application ofcommon law doctrine and principles. Moreover, I do not consider the employment ofthe originating application procedure will cause any unfairness or prejudice to therespondent. The applicant's contentions are clear and there is no advantage to begained by recourse to the standard procedure, requiring full pleadings with particularsin order to ensure that both parties are fully and fairly informed of the case beingadvanced by the other. The issues are defined and the evidence to be presented will beaccordingly confined to that which is relevant to those issues.[21] Although the respondent has signalled an intention to bring a counterclaim andthereby introduce the question of whether another property situated on Great BarrierIsland and also in the co-ownership of the parties should be sold or divided, such co-ownership of another property ought not to preclude the Court determining anapplication under s 339 in relation to the property which is the subject and focus of thecurrent dispute between the parties. If the parties are unable to resolve the issuesarising from their co-ownership of the property on Great Barrier Island then they mayhave recourse to the procedure under s 339 of the Act, but that would be a discrete andseparate matter that is not appropriate for determination within the scope of theapplicant's proposed originating application proceeding.[22] The respondent may of course present evidence of any matters relevant to theissue of whether she would be likely to suffer hardship as a result of the making of anorder for sale of the property and distribution of the proceeds of sale, and also placeany other evidence before the Court that she contends to be relevant to the question ofwhether or not it should make an order for sale.[23] Finally, standing back and viewing the matter overall, I consider that the useof the originating application procedure is in the interests of justice and will betterachieve the objective of the High Court Rules of securing the just, speedy andinexpensive determination of the dispute between the parties as to whether theproperty should be sold and the proceeds divided.4Result[24] The application by the applicant for leave to commence the proceeding byoriginating application under Part 19 of the High Court Rules 2016 is granted.[25] Having succeeded, the applicant is entitled to costs. I direct the parties to filecosts memoranda which are not to exceed three pages in length. The applicant isdirected to file and serve his costs memorandum within 5 working days of the date ofdelivery of this judgment. The respondent is to file and serve her costs memorandumwithin 5 working days following her receipt of service of the applicant's costsmemorandum._____________Paul Davison J4 High Court Rules 2016, r 1.2.