BHANABHAI as sole trustee of THE YI LU FA TRUST v LOWNDES [2019] NZHC 1441

BHANABHAI as sole trustee of THE YI LU FA TRUST v LOWNDES [2019] NZHC 1441 [21 June 2019]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2019-404-214[2019] NZHC 1441BETWEEN MANU CHHOTUBHAI BHANABHAI assole trustee of THE YI LU FA TRUSTPlaintiffAND PETER HILTON LOWNDESDefendantHearing: 21 June 2019Appearances: A R Gilchrist for the PlaintiffNo appearance by or for the DefendantJudgment: 21 June 2019Reissued: 25 June 2019JUDGMENT OF ASSOCIATE JUDGE MATTHEWS[1] The plaintiff, Mr Bhanabhai is the sole trustee of The Yi Lu Fa Trust ("theTrust"). The defendant, Mr Lowndes, is a barrister. He is the former husband ofYi Ywei Lowndes ("Mrs Lowndes").[2] Mr and Mrs Lowndes lived in a home in Epsom during their marriage ("theproperty"). The property is owned by the Trust. Mr Lowndes still lives there. Hecontinued to live in the property after he and Mrs Lowndes separated. In thisproceeding, Mr Bhanabhai seeks an order for possession of the Epsom property. Heapplies for summary judgment.[3] Neither Mr nor Mrs Lowndes is a beneficiary of the Trust. Both are describedas appointors. The final beneficiaries are the children of Mr and Mrs Lowndes, withsubstitution of grandchildren if a child has predeceased. The Trust Deed provides awider range of discretionary beneficiaries to include not only the final beneficiariesbut also their spouses and former spouses, and any other person or body as the trustees,with the unanimous consent of the appointors, shall revocably or irrevocably appoint.The Appointors hold power jointly to appoint new trustees.[4] There is neither a lease nor a tenancy agreement in place between the trust andMr Lowndes.[5] There is a mortgage against the property. Payments due under the mortgageare in arrears. The mortgagee has served a Property Law Act notice on Mr Bhanabhai.The Trust does not have funds to meet its obligations under the mortgage. The noticehas expired, and the mortgagee is poised to commence mortgagee sale proceedings.There are relationship property issues between Mr and Mrs Lowndes and it seems thatMr Lowndes is no longer servicing the mortgage in return for occupation of theproperty.[6] A notice to vacate the property was served on Mr Lowndes, requiring him tocomply by 21 December 2018.[7] A further notice was given to him on 31 January 2019 requiring him to vacatethe property by 6 February 2019.[8] Rule 13.2 of the High Court Rules provides that Pt 13 of the Rules applies toevery proceeding in which a plaintiff claims recovery of land which is occupied solelyby an "unlawful occupier". An "unlawful occupier" is defined in r 13.1 as:a person who –(a) occupies or continues to occupy land of the plaintiff without thelicence 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 atenancy or subtenancy.[9] A plaintiff relying on Pt 13 may apply for summary judgments, as in this case.[10] Rule 12.2 of the High Court rules provides that the Court may give judgmentagainst a defendant if a plaintiff satisfies the Court that the defendant does not havea defence to a cause of action in a proceeding.[11] The onus is on the plaintiff to satisfy the Court that this position has beenestablished.[12] In Johnson v Cooper, the High Court noted:1Few legal principles are more firmly established than that of (sic) a registeredproprietor is entitled to maintain or recover possession of their (sic) landagainst all other persons.[13] Initially, Mr Lowndes opposed the making of the orders sought, and filedpapers in opposition. As the record of the case management of this proceeding shows,a timetable was set for the filing and service of submissions. This time was laterextended. The case was scheduled to be argued at a fixture before me on 21 June. Aweek before that Mr Lowndes indicated that he would not be defending the case,putting forward medical information to the Court on a confidential basis. I understoodhim to be seeking an adjournment. I directed the Case Officer to enquire whether thismaterial could be made available to counsel for the plaintiff, as it was my intention tothen hear both sides in relation to the requested adjournment. Mr Lowndes expresslyrefused this course. The Court was therefore in possession of information relevant toMr Lowndes' request for an adjournment but could not hear the plaintiff in relation toit. As a result, I then set a further timetable for Mr Lowndes to file any submissionshe wished to file and shortly before that deadline he informed the Court that he wouldnot be doing so. He did not appear today, his attendance having been excused.[14] It follows that summary judgment can now be entered for the Trust. The onlyissue remaining to be decided is costs.[15] Mr Gilchrist for the Trust advises that the Trust has incurred fees of around$23,000 on this case. He asks for an uplift over costs on a 2B basis on the ground thatthe Trust has been put to additional expense by Mr Lowndes not complying with1 Johnson v Cooper [2018] NZHC 3087. See also Public Trust v Tearikinoorangi Jacobs, HCAuckland, 17 December 2007, CIV-2006-404-7873.timetable directions, and by Mr Lowndes allowing the case to go as far as it did beforehe withdrew his opposition.[16] I have reviewed the opposition put in by Mr Lowndes and the extensivematerial filed in support of it. In essence, Mr Lowndes sees this case as part of a muchwider relationship property dispute with Mrs Lowndes, which to a point isunderstandable given that the Trust's house was formerly their home. However,Mr and Mrs Lowndes elected to have their home owned by a Trust, in which they havelittle if any interest, and the extent to which the Trust asset is relationship property isat best moot. The beneficiaries are their children. However, that is a matter fordetermination on other proceedings if it cannot be agreed. I refer to it in the presentcontext because the application of clearer thinking to the single issue raised in thiscase should have shown Mr Lowndes that he did not have a tenable defence to thiscase, from the outset. Indeed, it appears that the case could have been avoidedaltogether. In any event the outcome now arrived at was in my view the likely resultof this case.[17] Mr Bhanabhai, the sole trustee, has informed the Court in his affidavit that thenet proceeds of sale will be retained pending agreement as to how they should beapplied, or a Court order. Thus, from a financial perspective, if Mr Lowndes has anyinterest in the Trust he is not prejudiced by giving up possession, leaving argument asto his entitlement to any part of the Trust funds for another day.[18] It follows that I accept Mr Gilchrist's submission that Mr Lowndes conduct inrelation to this case has contributed unnecessarily to the time during which both theTrust and the Court have been engaged on it, and therefore to the expense to which theTrust has been put. Mr Lowndes failed to comply with directions of the Court, and inmy opinion pursued an argument that lacked merit. In my view he should haveaccepted the Trust position from the outset.[19] Mr Lowndes opposes costs in the order suggested by Mr Gilchrist. He seeks afurther hearing. I do not agree that a further hearing is necessary. This is astraightforward matter and the Court has allocated time for it to be argued today. Scalecosts on a 2B basis amount to $14,160.53, approximately two-thirds of the actual costsincurred by the Trust. Having considered the matter, I am satisfied that an uplift of20 per cent is justified.[20] Accordingly, I make the following orders:(a) Orders in terms of paragraph (a) in the prayer for relief in the statementof claim.(b) An order that Mr Lowndes will give the Trust vacant possession of theproperty by 5 pm on Monday 8 July 2019.(c) Leave is reserved to the trust to apply on this proceeding for suchfurther orders as may be required to give effect to the orders now made.(d) Mr Lowndes will pay to the Trust costs on a 2B basis as calculated inaccordance with the memorandum of counsel for the plaintiff dated20 June, with a further 20 per cent uplift pursuant to r 14.6.(e) Mr Lowndes will in addition pay disbursements in a total sum of$1,900._____________________________Associate Judge MatthewsSolicitors:Dyer Whitechurch, AucklandCopy to counsel: A Gilchrist, Barrister, AucklandP H Lowndes, Auckland