Clarke v McAlister - [2018] NZHC 1749

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-Ā-TARA ROHE

CIV-2018-485-53

[2018] NZHC 1749

UNDER the Property Law Act 2007

IN THE MATTER

of an application under s 339(1)(c) of the Act

BETWEEN

JOHN MILNE CLARKE

Plaintiff

AND

MALCOLM CLARKE MCALISTER

Defendant

Hearing: 4 July 2018

Appearances:

Mr S Bisley and Ms A Bloomfield for plaintiff Ms P Davidson for defendant

Judgment:

17 July 2018

JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

[1] In 1951 Mr Rupert and Mrs Isobel Clarke built a family home at 9 Doctor’s Road, Mataura, Southland. Mr and Mrs Clarke had two children, Madeleine and John, who grew up in the property. John is the plaintiff in this proceeding. Madeleine married Mr Terry McAlister and had one child, Malcolm, who is the defendant.

[2] Mr Rupert Clarke died in 1972 and Mrs Isobel Clarke became sole owner of the property by survivorship. Mrs Isobel Clarke died in 1997. She left the property to her children as tenants in common in equal shares, so that Madeleine and the plaintiff each became the owner of a half interest. Madeleine died in 2016. She left her interest in the property to the defendant. As her executor the defendant became the legal owner of a half interest in the property. He is also the beneficial owner. As matters stand the administration of Madeleine’s deceased estate is not complete and

CLARKE v MCALISTER [2018] NZHC 1749 [17 July 2018]

— legally —the property is still owned as to half by the plaintiff and as to half by the defendant in his capacity as Madeleine’s executor.

[3]A feature of this case is the level of agreement between the parties:

(a)they agree that, as a result of unfortunate but ultimately irrelevant family issues, their continued joint ownership of the property is untenable;

(b)the plaintiff is prepared to purchase the defendant’s half interest in the property;

(c)the defendant is prepared to sell his half interest to the plaintiff;

(d)there is valuation evidence from Chaddeton Valuation Ltd to the effect that the market value of the property as at 16 October 2017 was
$124,000. Whether that evidence remains current I am not in a position to say. But the parties agree that it does. In those circumstances it seems appropriate for the Court to accept $124,000 as an agreed market value;

(e)on that basis, it is common ground between the parties that the starting point for considering an appropriate sale and purchase price for a half interest in the property is $62,000.

[4]So far so good.

[5] Where the parties part company is in relation to the consideration that should be paid by the plaintiff to the defendant for the latter’s half share in the property.

[6] The parties have apparently attempted but failed to resolve this issue and the plaintiff has commenced this proceeding and applied for summary judgment in order to force the issue.

[7] The plaintiff seeks relief in the form of an order pursuant…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Clarke v McAlister

Details

AGLC: Clarke v McAlister [2018] NZHC 1749
Case: [2018] NZHC 1749
Decision Date: 17 July 2018

CaseChat Overview and Summary

In Clarke v McAlister, the plaintiff, John Milne Clarke, sought to compel the defendant, Malcolm Clarke McAlister, to sell his half share of a family property located in Mataura, Southland. The property had been built by the plaintiff's parents and later inherited by John and his sister Madeleine, who passed away in 2016. The defendant, as executor of Madeleine's estate, held a half interest in the property, which he was willing to sell to John. However, the parties could not agree on the purchase price, leading to the plaintiff applying for summary judgment under section 339(1)(c) of the Property Law Act 2007, which empowers the court to order a co-owner to purchase another co-owner's share at a fair and reasonable price.

The primary legal issue before the court was whether the plaintiff could reduce the purchase price based on the disparity in financial contributions made to the upkeep of the property during the period of joint ownership. The plaintiff argued that since the death of Mrs Isobel Clarke in 1997, he had paid for the upkeep of the property, expending over $124,000, while the defendant and Madeleine had made minimal contributions. The court had to determine whether the plaintiff's financial contributions could be taken into account in setting a fair and reasonable price for the defendant's half interest.

The court found that the plaintiff's claim was properly brought against the defendant in his capacity as executor, despite the intitulements to the proceeding not explicitly stating this. The court also dismissed the argument that credibility issues precluded summary judgment, holding that the plaintiff's explanation for the financial contributions was plausible in the absence of contrary evidence. Regarding the contributions that could be considered, the court ruled that payments for rates and insurance, which make up a significant portion of the payments made by the plaintiff, could be taken into account as part of the property's maintenance. The court further held that the plaintiff's disproportionate use of the property justified an adjustment of $15,000 to the purchase price.

Accordingly, the court granted the plaintiff's application for summary judgment, ordering the plaintiff to purchase the defendant's half interest in the property for $15,000 and directing that the costs of the proceeding be borne by the parties as they saw fit, either equally or individually if they chose to engage separate solicitors.

Orders