Cowan v Cowan - [2021] NZCA 31

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA75/2021
[2021] NZCA 31

BETWEEN	CHRISTINA MARAMA COWAN First Applicant TE RAHUI JOHN COWAN Second Applicant
AND	JOHN ARTHUR COWAN Respondent

Hearing:	24 February 2021
Court:	Miller and Goddard JJ
Counsel:	J Mason and S H Roper for Applicants C D Batt and M J Moore for Respondent
Judgment:	24 February 2021

JUDGMENT OF THE COURT
(On application for interim relief)

AThe Court orders under s 146 of the Land Transfer Act that the applicants may lodge a second caveat over the Lyall Bay property protecting their claim to beneficial ownership of that property. This order will lapse at 1.00pm on 25 February 2021 if by that time the applicants have not both filed an undertaking as to damages in this Court.
BIt is a condition of the order that John be permitted to enjoy sole occupancy of the Carterton property and that it be made available to him by Thursday, 4 March 2021. It is also a condition of the order that by 4 March 2021 the applicants file proceedings in the High Court to establish their claim to the Lyall Bay property.

C Costs are reserved.

____________________________________________________________________

REASONS OF THE COURT

(Given by Miller J)

Before us is what is described as an application for an interim stay of execution pending appeal. It concerns a caveat that was lodged over properties at 170 Queens Drive in Lyall Bay, Wellington, and at 11 Nobel Street, Carterton, claiming an interest in the land under an “implied” trust.
The appeal has been brought urgently, and the stay sought, because the respondent, John Cowan, has entered into an agreement to sell the Lyall Bay property to a developer, and the transaction is to settle on 25 February 2021. He intends to use the proceeds for his own benefit.
In the judgment under appeal, delivered on 19 February 2021, Associate Judge Johnston refused an order that the caveat not lapse. With that order (at the latest), the caveat lapsed. Before us Ms Mason accordingly sought the Court’s leave under s 146 of the Land Transfer Act 2017 to lodge a second caveat; in the alternative, an injunction restraining John from transferring the property.
Contrary to the view taken by the Associate Judge, it seems to us arguable that the first applicant, Christine Cowan, has a caveatable interest in the Lyall Bay property.
John Cowan is the father of the applicants and the registered owner of both properties. He acquired sole legal title by survivorship after his late wife, and the mother of the applicants, Marama Cowan, died on 19 March 2019.
In an agreement dated 21 May 2002 between John and his wife he agreed that he would “sells and gifts his share” of the “joint family home” at Lyall Bay to Christine. The agreement is in evidence. He admits it but says it was entered at an unhappy time and without legal advice and no steps were ever…

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.

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Details

Case: [2021] NZCA 31
Decision Date: 24 February 2021

CaseChat Overview and Summary

The Court of Appeal of New Zealand was asked to consider an urgent application for interim relief concerning the ownership of two properties, located at 170 Queens Drive in Lyall Bay, Wellington, and 11 Nobel Street, Carterton. The applicants, Christina Cowan and Te Rahui Cowan, sought to lodge a second caveat over the Lyall Bay property, claiming beneficial ownership under an implied trust. The respondent, John Cowan, is the registered owner of both properties and the father of the applicants. The applicants sought the relief urgently as the respondent intended to sell the Lyall Bay property to a developer, with the transaction set to settle on 25 February 2021. The applicants argued that they had a caveatable interest in the Lyall Bay property, which the Court of Appeal found to be arguable.

The central legal issue before the Court of Appeal was whether the applicants had a caveatable interest in the Lyall Bay property, which would protect their claim to beneficial ownership. The Court found that it was arguable that Christine Cowan had a caveatable interest in the Lyall Bay property. The Court considered the 2002 agreement between John Cowan and his late wife, Marama Cowan, which stated that John would sell and gift his share of the joint family home at Lyall Bay to Christine. The Court also examined the 2019 relationship property settlement agreement, which outlined a distribution of property between John and the children, with the Lyall Bay property to be held on trust for the benefit of Christine and a younger sibling.

The Court of Appeal concluded that the applicants were entitled to lodge a second caveat over the Lyall Bay property to protect their claim to beneficial ownership. The Court found it arguable that Christine Cowan was the beneficial owner of the Lyall Bay property and that John Cowan knew of this when he agreed to sell the property to a developer. The Court further found that it was in the interests of justice for the applicants to be given leave to lodge a second caveat over the Lyall Bay property. The Court's order would lapse if the applicants did not file an undertaking as to damages by 1:00 pm on 25 February 2021. The Court also ordered that John Cowan be permitted to enjoy sole occupancy of the Carterton property and that the applicants file proceedings in the High Court to establish their claim to the Lyall Bay property by 4 March 2021. Costs were reserved.

Orders