Hawthorn v Hawthorn - [2019] NZHC 3337

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2019-419-0121

[2019] NZHC 3337

BETWEEN
JENNIFER ANNE HAWTHORN

Plaintiff

AND

GEOFFREY DAVID HAWTHORN

Defendant

Hearing: 1 October 2019

Appearances:

M Thomson for the Plaintiff UB Keller for the Defendant

Judgment:

16 December 2019

JUDGMENT OF ASSOCIATE JUDGE SMITH

This judgment was delivered by me on [ ] at [ ], pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors / Counsel:
Grantham Law, Hamilton
Braun Bond & Lomas, Hamilton

Hawthorn v Hawthorn [2019] NZHC 3337 [16 December 2019]

[1] The plaintiff, Jennifer Hawthorn (Jenny), applies for summary judgment on a claim under s 339(1)(a) of the Property Law Act 2007 (PLA). She seeks an order for sale of a property at 206 Davy Street, Thames (the Davy Street property), and the division of the proceeds among the co-owners.

[2] The registered proprietors of Davy Street are Jenny and her brother, Geoff Hawthorn, the defendant. Each has a one-half share. Geoff opposes Jenny’s claim. He says that although he and Jenny are both registered as proprietors of Davy Street, the family’s intention was always that Davy Street would be Geoff’s property alone.

Background

[3] Jenny and Geoff’s parents, Anne and Jack Hawthorn, are both now deceased. In or about 1986, they purchased a business in Thames called the Dickson Holiday Park (the holiday park). Anne and Jack ran the holiday park operations until sometime in 1993. By then, they were in their sixties and did not want to run the holiday park on a full-time basis.

[4] On 1 July 1993, Anne, Jack, Jenny, and Geoff formed a partnership to operate the holiday park business. Anne and Jack were the major financial stakeholders.

[5] Geoff took over the running of the holiday park business in around 1993. Jenny made some contributions in the early years, including attending to GST returns, but does not appear to have made any contributions in more recent years.

[6] Anne and Jack purchased a holiday home at Tararu Road, Thames (the Tararu Road property), in about December 1993. The holiday park business provided income to meet payments on a mortgage taken out on the Tararu Road property. However, the business was not generating enough money to pay Geoff a salary. He said in his evidence that he lived at the holiday park and drew some cash over the years between 1994 and 2017, but the business generally only covered his living expenses.

[7] A set of financial statements was prepared for the family partnership in 1994. It showed that Jenny received a share of the partnership profits. However, in later years, she only received sporadic payments from the partnership, and from about 2011, at her own request, she did not take any share of the partnership profits.

[8] The Davy Street property was purchased on or about 9 December 2005. Geoff said that it was purchased for him by the partnership, on the basis that, as…

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: [2019] NZHC 3337
Decision Date: 16 December 2019

CaseChat Overview and Summary

The plaintiff, Jennifer Hawthorn (Jenny), applied for summary judgment on a claim under section 339(1)(a) of the Property Law Act 2007 (PLA). She sought an order for the sale of a property at 206 Davy Street, Thames (the Davy Street property), and the division of the proceeds among the co-owners. The registered proprietors of Davy Street are Jenny and her brother, Geoff Hawthorn, the defendant. Each has a one-half share. Geoff opposes Jenny’s claim and argues that the family’s intention was always that Davy Street would be his property alone.

The court found that Jenny is a co-owner and therefore had the right to apply under section 341 as a co-owner of the Davy Street property. However, the court was not satisfied that Jenny had shown Geoff has no reasonably arguable defence on the issue of whether an order should be made for the sale of the Davy Street property. The Davy Street property appears to have been treated as an asset of the family partnership, and the partnership had repaid the mortgage, which had been used to acquire the property. Furthermore, Jenny had not provided any evidence that she had contributed any capital to the acquisition of the property. If the Davy Street property is a partnership asset, it is difficult to see that Jenny would have any basis to call for the sale of the Davy Street property.

The court concluded that an order for the sale of the Davy Street property would not be the only possible outcome if the case were allowed to proceed to trial. The application for summary judgment was dismissed, and costs were reserved. The court made directions for the future conduct of the proceeding, including a case management conference.

The court found that Geoff has arguable defences in resulting or constructive trust and estoppel. However, since the application for summary judgment was dismissed, there is no need to address these issues at this time.

Orders