Brownsea v Malit
[2019] NZHC 1244
•31 May 2019
IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY
I TE KŌTI MATUA O AOTEAROA NGĀMOTU ROHE
CIV-2018-443-35
[2019] NZHC 1244
BETWEEN BARRINGTON STANLEY BROWNSEA
Plaintiff
AND
JENITH SAMBALILO MALIT
Defendant
Hearing: 31 May 2019 Appearances:
S Hughes QC for Plaintiff No appearance for Defendant
Judgment:
31 May 2019
JUDGMENT OF GRICE J
(Formal proof)
Background1
[1] In 2014 Mr Brownsea and Ms Malit were in a relationship. They both lived in Christchurch. At one stage it appeared that the relationship might develop into something permanent. That did not eventuate.
[2] While Mr Brownsea and Ms Malit were seeing each other Mr Brownsea decided to move to Hawera. He had sufficient money to purchase a property at 12 George Street, Hawera. At that stage, while thinking there was a future in their relationship, Mr Brownsea arranged for the property to be registered in both their names.
[3]The relationship did not survive the move. Mr Brownsea has remarried.
1 This decision was delivered orally on 31 May 2019. The written form has been appropriately edited and footnoted before distribution.
BROWNSEA v MALIT [2019] NZHC 1244 [31 May 2019]
[4]He now wants the property to be vested in him alone.
Legal position
[5] Mr Brownsea has filed proceedings claiming a resulting trust in his favour in the property. The basis for a resulting trust is the trust property results back to the settlor in a situation where the original proprietor had no intention to divest a beneficial interest in it. This the gives rise to the trust. Resulting trusts arise at the time a transaction occurs and not constituted by behaviour occurring after the time of the transaction.
[6] In considering the basis for resulting trusts, the Court of Appeal in Crampton- Smith v Crampton-Smith cited Lord Browne-Wilkinson in Westdeutsche as follows: 2
Where A makes a voluntary payment to B or pays (wholly or in part) for the purchase of property which is vested either in B alone or in the joint names of A and B, there is a presumption that A did not intend to make a gift to B; the money or property is held on trust for A (if he is the sole provider of the money) or in the case of a joint purchase by A and B in shares proportionate to their contributions. It is important to stress that this is only a presumption, which presumption is easily rebutted either by the counter-presumption or by direct evidence of A’s intention to make an outright transfer …
[7]The Court continued:
[37] Where the presumption applies, it is generally regarded as having dispositive effect unless the presumption is rebutted. This is explained by Farwell LJ in The Venture:3
“On its being proved that Percy Stone had advanced a certain part of the purchase money, the presumption of law arose that he was beneficially entitled to a corresponding share in the yacht. It was for the plaintiff to displace that presumption by bringing evidence to the contrary; but she has entirely failed to bring any such evidence. The Court must, therefore, give effect to the assumption, and must hold that, as the defendant paid a part of the purchase money, he acquired an interest in the yacht…”
[38] In Fowkes v Pascoe Mellish LJ also outlined how the presumption operates as a first step independent of any evidential or factual inquiry:4
2 Crampton-Smith v Crampton-Smith [2011] NZCA 308, [2012] 1 NZLR 5 at [35], citing Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 (HL) at 708.
3 The Venture [1908] P 218 (CA) at 230.
4 Fowkes v Pascoe (1875) LR 10 Ch App 343 at 353.
“In such a case, although the rule of law, if there was no evidence at all, would compel the Court to say that the presumption of trust must prevail, even if the Court might not believe that the fact was in accordance with the presumption, yet, if there is evidence to rebut the presumption, then, in my opinion, the Court must go into the actual facts.”
[39] Likewise in New Zealand this Court in Bateman TV Ltd v Bateman has adopted the discussion in The Venture and considered the presumption to have dispositive effect in the absence of rebuttal evidence:5
“In such a case, where no satisfactory evidence is produced to rebut it, a presumption will arise to a resulting trust in favour of him who finds the consideration.”
[40] As Lord Browne-Wilkinson said in Westdeutsche, the presumption may be rebutted either by the counter-presumption of advancement or by direct evidence of an intention to make an outright transfer… An outright transfer might occur by way of gift or by the transferee providing consideration. In either case, the presumption of a resulting trust would be rebutted.
[8]Therefore, I now turn to the facts in this case.
The facts
[9] This matter proceeds as on the basis of formal proof because Ms Malit has taken no steps. The proceedings were served on her in Dunedin. Mr Brownsea has heard nothing from her since the proceedings were served.
[10] Mr Brownsea has provided a chronology of events. He said that he commenced a sexual relationship with Ms Malit whom he met at the Christchurch boarding house owned by him and his now deceased wife in about February or March 2014. In October 2014 he sold the boarding house and moved into a flat. Ms Malit stayed at the flat three or four times a week but maintained her own residence.
[11] In January 2015 Mr Brownsea entered into a contract to purchase 12 George Street, Hawera and paid a $50,000 deposit in February 2015. He paid the balance of the purchase price of $196,644 to settle the purchase on 26 February 2015. No funds were provided by Ms Malit.
5 Bateman TV Ltd v Bateman [1971] NZLR 453 (CA) at 463.
[12] In the meantime Mr Brownsea remained in Christchurch. In February 2015 Ms Malit returned to her husband with whom she had been maintaining a relationship she was seeing Mr Brownsea.
[13] Subsequently Mr Brownsea moved into Ms Malit’s home for about three months in April 2016. He was made redundant in July 2016 so he went on holiday to the United States in July 2016 with Ms Malit. He paid all the costs.
[14] In July Mr Brownsea also moved into the property at 12 George Street, Hawera. Ms Malit visited him there for a couple of days in October.
[15] In January 2017 Mr Brownsea loaned Ms Malit $20,000. This was paid to her in two sums of $10,000 each. In January or February 2017 he went to Christchurch to sort his affairs. He discussed with Ms Malit the future of their relationship. She made it clear she did not intend to commit to a relationship with Mr Brownsea. The relationship never resumed after that. Ms Malit refused to transfer her legal interest in the Hawera property to him for no consideration.
[16] In February 2017 Mr Brownsea consulted his lawyers. As a result he brought the present proceedings seeking the declaration of a resulting trust in the property and the vesting of the property in him alone.
[17]The relevant factors arising are:
(a)He paid the full purchase price for the property.
(b)He put it in both their names at the time because he anticipated establishing a long term relationship with Ms Malit.
(c)That never did not occur.
(d)While the parties stayed together from time to time there is no suggestion they were living together in a relationship in terms of the Property (Relationships Act) 1976.
[18] In any event it would have been a relationship of short duration, that is less than three years.6 There is no bar to the proceedings being brought in this Court claiming a resulting trust. The presumption of resulting trust is negated in the case of relationship property when the de facto relationship has existed for more than three years but this is not the case here.7
Resulting trust
[19] I am satisfied that the purchase proceeds for the property at 12 George Street, Hawera were provided entirely by Mr Brownsea. Therefore, the presumption arises that he should take the benefit of the property. There is nothing before me that would rebut that presumption that the whole property belongs to him beneficially.
[20] Ms Malit has been served with the proceedings. She has made no contact with Mr Brownsea since they were served.8 Accordingly, I am satisfied that a resulting trust has been established. Mr Brownsea is entitled to the property situated at 12 George Street, Hawera.9
[21] I am satisfied that Mr Brownsea takes the benefit of the resulting trust of the share registered in Ms Malit’s name in that property. Accordingly the property is vested in the name of Mr Brownsea.
Claim for repayment of advances made by Mr Brownsea to Ms Malit
[22]As a separate claim, Mr Brownsea seeks judgment for the sum in recovery of
$20,000 for two separate advances of $10,000 he made to Ms Malit. He has sought repayment from her and not received it.
[23] Mr Brownsea in his amended statement of claim says that Ms Malit has refused to pay the money.
6 Property (Relationships) Act 1976, ss 2E and 14A. There were no concurrent family court proceedings involved in this matter which would require the matter to be determined by the Family Court.
7 Property (Relationships) Act 1976, s 10(S).
8 Ms Malit has taken no step in the proceedings.
9 The title identified TNF1 421 Taranaki Land District.
[24] Mr Brownsea says he said there was never any dispute the money was a loan and to be repaid. From that I infer that demand has been made in accordance with the statement of claim but the money has not been repaid.
[25]Mr Brownsea is entitled to judgment for the sum of $20,000.
[26] There is no evidence of any interest arrangement therefore I do not consider it is appropriate to make an order for payment of interest.
Orders
[27]Accordingly, I make the following:
(a)A declaration that the interest of the defendant in the property at 12 George Street, Hawera is held in a resulting trust in favour of Mr Brownsea.
(b)Vesting the interest in the property registered in the defendant’s name in the name of Mr Brownsea.
[28]Judgment in favour of Mr Brownsea for the sum of $20,000.
[29]An order for costs in favour of Mr Brownsea.
Addendum: costs award calculation10
[30] As the matter proceeded by way of formal proof a category 1, band A basis for calculation of costs is appropriate pursuant to rr 14.3 and 14.5. Leave is reserved for three days following the delivery of this written version of the decision for a memorandum (if necessary) on this point.
Grice J
10 Addendum added following judgment.
0