Keir v Simms
[2025] NZHC 2086
•29 July 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2022-404-458
[2025] NZHC 2086
BETWEEN RACHAEL KEIR and JOHN RICHARD KEIR
PlaintiffsAND
ROBERT SIMMS and LYNETTE JEAN SIMMS
Defendants
Hearing: 12–30 May 2025 Appearances:
N W Woods and L Newth for Plaintiffs
D R Bigio KC, D T D Horton, L R Hebden and S O H Coad for Defendants
Judgment:
29 July 2025
JUDGMENT OF O’GORMAN J
This judgment was delivered by me on 29 July 2025 at 2 pm pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar
…………………………………
Solicitors/Counsel:
Rice Craig, Auckland
Thomas Gibbons Law, Hamilton D R Bigio KC, Barrister, Auckland D T D Horton, Barrister, Auckland
KEIR v SIMMS [2025] NZHC 2086 [29 July 2025]
Table of Contents [Para]
Overview[1]
Structure[8]
Core facts[9]
Family relationships[9]
Home Dairy Farm and Lots 1–4[10]
Deed of Family Arrangement[12]
Subdivision consents[15]
Other key properties[19]
Chronological overview [20]
Early family background[20]
Early calf-rearing business[22]
Establishment of the Home Dairy Farm[24]
Rachael’s education and early employment[28]
Payments by Rachael[30]
Bruce’s education and early employment[31]
2003/2004: Napier onion reaction[32]
Funds to Bruce and Rebecca[35]
Kiwi Road Purchase[36]
ACC and return to the Home Dairy Farm[38]
2006 — Sherwood Drive to Coral Farms[39]
Residential moves during 2007/2008[41]
Bob’s heart attack in 2009[44]
ACC work hardening and Graduate Diploma[45]
Sherwood Drive eviction and grazing[46]
Negotiations for Lots 1–4[47]
2012 Understandings[50]
2012 medical event[51]
Settlement and lease of Lots 1–4[52]
2012 — Sherwood Drive sale[53]
Water bore[55]
Farm succession seminar[56]
Transfer of Lots 2 and 4[57]
Construction of Keir home[58]
Construction of underpass[61]
2014 medical event[62]
Transfer of Lots 1 and 3[63]
2016 Tripp Andrews Consent[64]
2017 Understandings[65]
Subdivision and succession negotiations[67]
2019 breakdown of relationships[68]
Legal principles [70]
Title to land, buildings and fixtures[70]
Formalities for interests in land[72]
Constructive and resulting trust exceptions[75]
Legal principles for CICT[79]
Legal principles for RECT[85]
Contentious matters [96]
Wills and fairness policy[96]
Rachael’s health[102]
Motivations for acquisition of Lots 1–4[109]
Interwoven land holdings[119]
Farm operations and contributions[124]
Farm not for sale[149]
Construction of Keir home[152]
Succession planning and subdivision negotiations[168]
CICT Analysis[188]
Common intention of beneficial ownership?[188]
Qualifying contributions in reasonable reliance?[194]
Unconscionability?[213]
Conclusions[215]
RECT Analysis[216]
Qualifying contributions?[216]
Expectation of interest in property?[217]
Reasonableness from plaintiffs’ perspective?[220]
Reasonableness from defendants’ perspective?[222]
Conclusions[225]
Estoppel[226]
Legal principles – unjust enrichment[226]
Legal principles – estoppel[230]
Analysis — Expectation Limb[239]
Analysis — Detrimental Reliance Limb[243]
Analysis — Unconscionability[245]
Conclusions[247]
Affirmative defence — orders for possession [248]
Caveats — orders for removal[257]
Counterclaim — Deed of Acknowledgement of Debt[259]
Result[270]
Overview
[1] The plaintiffs are Rachael Keir and her husband, John Keir (the Keirs). They bring a claim against Robert (Bob) Simms and Lynette Simms (the Simms), who are Rachael’s parents and John’s parents-in-law.1 The claim is brought in respect of a farm situated in Glenbrook, Auckland.
[2] The plaintiffs seek an order that they are entitled to a 61.6 per cent proprietary interest in farmland that is legally owned by Bob and Lynette. They also seek orders requiring part of that land to be subdivided and vested in them exclusively, under the terms of an existing subdivision consent, so that the house they built on the farm and now live in has its own separate title. In the alternative to those two remedies, they seek judgment in an amount that would provide equivalent relief, plus interest and costs.
[3] The plaintiffs have pleaded three causes of action: common intention constructive trust, reasonable expectation constructive trust, and estoppel. The same factual allegations are relied on for all three causes of action, centred on two alleged understandings:
(a)An alleged understanding reached on or before January 2012 about various land sales and acquisitions within the family that would lead to the farm expanding (with the addition of Lots 1–4 across the road), the plaintiffs building their home next to their parents’ house, land around that house being subdivided and sold to them, and the entire farm eventually being handed over to Rachael and John to the exclusion of her brother, Bruce Simms.
(b)An alleged understanding reached in a meeting on 29 July 2017 about succession of the farming operation, including that John would leave his current job and contribute 20 hours of labour per week to the farm, in anticipation of a full handover.
1 As the parties share surnames, I refer to the parties by their first names throughout the judgment. I mean no disrespect in doing so.
[4] Although the above allegations are central, the plaintiffs emphasise that their claim is not confined to any particular time or set of allegations. Rather, a proper assessment requires a full understanding of the broad context of the plaintiffs’ contributions, reliance and expectations over an extended timeline of some two decades.
[5] The defendants deny any basis for the plaintiffs’ claims. They say they have consistently and openly adopted a policy of treating both of their children fairly and equally. At all material times prior to the commencement of this proceeding, this has been reflected in the provisions of their respective wills which provided for their residual assets to be split equally between their two children. They say they have never represented or agreed to any departure from this policy. They deny any representations or conduct that could reasonably result in the alleged 2012 and 2017 understandings. Up until the commencement of the proceeding and beyond, they have continued to enjoy working on the farm and have employed farm managers and others to assist. They had no plans to retire at the time of the alleged understandings in 2012 and 2017, and still actively work on the farm today despite their advancing years.
[6] In any event, express contractual negotiations between the parties around those times demonstrate that the plaintiffs did not believe they had any existing enforceable rights. Rather, the parties were seeking agreement on various key terms of any land transactions or succession plans, with the intention that those agreements would be formalised. As such, the discussions were mere negotiations or attempts to reach agreement. This does not give rise to any enforceable legal rights.
[7] The defendants say there was growing frustration on Rachael’s part about her parents not finalising any succession plan, culminating in increasing pressure and then this current proceeding commenced in 2022. This has resulted in irreparable harm to family relations.
Structure
[8]This judgment adopts the following structure:
(a)The core facts section provides an overview of family relationships and properties at the centre of the dispute, and significant evidential documents.
(b)The chronological overview section provides a high-level, non-contentious summary of the events referred to in the evidence, for the purposes of providing a timing context.
(c)I then summarise the applicable legal principles for the constructive trust causes of action, because this sets the framework through which the contentious facts must be analysed.
(d)Credibility issues are then considered under the “contentious matters” section, focusing on topics that are key to determining the merits of the legal claims.
(e)I then analyse each of the three causes of action against the elements that must be proved.
(f)Finally, I consider the orders sought by the defendants against the plaintiffs for possession, the removal of caveats and judgment on a debt.
Core facts
Family relationships
[9] Lynette was born in May 1945. Bob was born in January 1947. They married in 1970, and have two children and five grandchildren:
(a)Rachael was born in July 1974. She married John in March 2007. Their son was born in August 2011.
(b)Bruce was born in October 1975. He married Rebecca in March 2002. They have four children.
Home Dairy Farm and Lots 1–4
[10] This claim centres on a proprietary interest sought over the farmland owned by Bob and Lynette at 256–278 Glenbrook Beach Road (the Home Dairy Farm). Bob and Lynette bought 278 Glenbrook Beach Road in 1993. In June 2001, they acquired neighbouring land at 256 Glenbrook Beach Road. In 2012 and 2013, those combined farming operations were then expanded to include farming land across the road at 265–277 Glenbrook Beach Road (Lots 1–4). All four lots were acquired by Bob and Lynette under an agreement dated 8 March 2012,2 with subsequent transfers as follows:
(a)Lots 3−4 (to the north) were transferred to Bob and Lynette on 1 June 2012. They transferred Lot 4 to Rachael and John on 31 May 2013. Lot 3 was transferred to Rachael and John in March 2015.
(b)Lot 2 was leased by Bob and Lynette from 1 June 2012 and then title transferred to them on 1 June 2013. An underpass was constructed in 2014 (completed in August) to join Lot 2 to the Home Dairy Farm across the road.
(c)Lot 1 (to the south) was leased by Bob and Lynette from 1 June 2012 and then title transferred to them on 1 June 2013, with a further transfer to Bruce in March 2015.
[11] Significantly, between June 2013 and November 2013 a resource consent was sought for the Keirs to build a house near to Bob and Lynette’s, on the Home Dairy Farm. The Council requested further information under s 92 of the Resource Management Act 1991 to assess that application, and a response was provided on
2 The sale price to Bob and Lynette was $1,482,420 for Lots 1–2 and $1,617,580 for Lots 3–4. Rachael and John paid $917,580 for Lot 4, implying that the remaining amount for Lot 3 on the 8 March 2012 pricing was $700,000, which is what Bob and Lynette on-charged for the settlement in March 2015.
8 November 2013. That is a key document on which the plaintiffs rely. On 28 November 2013, the Council granted the resource consent. A building consent was subsequently granted on 9 September 2014.
Deed of Family Arrangement
[12] Prior to commencement of building for the Keir house, the family met during the second half of 2014 to discuss a written agreement about what would happen in the event Bob and Lynette decided to sell the Home Dairy Farm. Based on a precedent document, Rachael typed up a document entitled Deed of Family Agreement which had at least two iterations:
(a)The first was dated “Xth day of September 2014”. The fourth paragraph of the background section included a statement that “The Trust Partnership has agreed to spend $xxx,xxx on building the dwelling and that this value will not be increased without first obtaining written consent from Robert and Lynette”. The substantive provisions included cl 3, which stated: “The Trust Partnership agrees that Robert and Lynette may decide to sell the property at their sole discretion. In the event that this occurs one of the following options will be agreed upon by all parties”. It then set out the following three options, with a default to the first if mutual agreement proved impossible:
a. The Trust Partnership will be paid for the dwelling by Robert and Lynette to an agreed sum of X % of the cost of rebuilding the dwelling at the time of settlement of the sale. Should independent determination of the costs be required the sum will be determined based upon the average of 3 local builders estimates to rebuild the dwelling (excluding outdoor landscaping improvements) in association with the guidance of an independent registered valuer.
b. Rachael Keir and Bruce Simms will jointly have first option of purchasing the property at market value. Should both or either of these people (or legal entities which they solely or jointly control) purchase the property this agreement will stand as is with the new owner of the property.
c. Any other mutually agreed option which may arise in the future as a result of council regulations regarding titles or any other means.
(b)The second version was dated “Xth day of February 2015”. This was largely in the same form, but with some additional notations added. The fourth paragraph of the background section continued to include a statement that “The Trust Partnership has agreed to spend $xxx,xxx on building the dwelling and that this value will not be increased without first obtaining written consent from Robert and Lynette”. The options in cl 3 of this draft were:
a. The Trust Partnership will be paid for the dwelling by Robert and Lynette to an agreed sum of X % of the cost of rebuilding the dwelling at the time of settlement of the sale. Should independent determination of the costs be required the sum will be determined based upon the average of 3 local builders estimates to rebuild the dwelling (excluding outdoor landscaping improvements) in association with the guidance of an independent registered valuer.
b. Rachael Keir and Bruce Simms will jointly have first option of purchasing the property at market value. Should both or either of these people or their descendents (or legal entities which they solely or jointly control) purchase the property this agreement will stand as is with the new owner of the property.
c. The Trust Partnership will have first right to purchase the area of land associated with the house if at the time the property is sold a title is available to move to around the house site or associated land.
(NOTE since decided that if a title is available prior to sale this could be transferred by John and Rachael).
[13] The witnesses are in conflict about who suggested these draft terms, and the nature of the surrounding discussions. Regardless, it is common ground that no agreement was ever reached on the Deed of Family Arrangement.
[14] Construction of the Keir home nevertheless commenced in October 2014 on land owned by Bob and Lynette. The house was not finished until 2018. Between 30 March and 2 April 2018, the Keirs moved out of Bob and Lynette’s house into their newly constructed home. They have lived there ever since.
Subdivision consents
[15] In July 2016, Rachael became aware that the newly introduced proposed Auckland Unitary Plan was going to change the rules that applied to amalgamation and subdivision of land. In those circumstances, it was agreed that subdivision consent should be sought to preserve options.
[16] On 8 August 2016, Auckland Council granted a subdivision consent prepared by Tripp Andrews Surveyors Ltd to make certain boundary adjustments, to amalgamate Lots 3–4, and for separate titles to issue in respect of land around two houses on the Home Dairy Farm (2016 Tripp Andrews Consent). The 2016 Tripp Andrews Consent had a five-year lapse date, which was later extended by one year.
[17] During 2018, the Keirs and Simms had three meetings seeking to agree terms for progressing the subdivision to achieve a separate title around each of their homes. The parties came close to agreement based on a 10-acre section around the Keir house, but they were $50,000 apart on price and driveway issues. The meetings continued into February and March 2019, this time with the addition of lawyers and tax experts, but Bob and Lynette became concerned about tax implications of development. No concluded agreement was ever achieved.
[18] After the relationship between the parties became adversarial, variations to the 2016 Tripp Andrews Consent were sought without consensus:
(a)On 30 November 2020, CKL surveyors submitted a resource consent application to the Council on behalf of Bob and Lynette that would title off both the Simms and Keir houses and divide the remainder of the Home Dairy Farm into two equal sections anticipated to be inherited at some point in the future by Rachael and Bruce. On 19 May 2021, Auckland Council granted that application on a non-notified basis (the CKL Consent variation). In a judgment issued on 30 June 2023, the Keirs succeeded in quashing Auckland Council’s decision by judicial review, on grounds including that they should have been
notified and given the opportunity to object as affected landowners of Lots 3–4.3
(b)Meanwhile, on 12 March 2021, Tripp Andrews Surveyors Ltd submitted a resource consent variation application on behalf of Rachael and John that provided for a 15-acre section around the Keir house, with a completely different driveway configuration. Bob and Lynette were not party to this application and have never consented to those variations changing title to their land. The Council granted the application on 4 June 2021 (2021 TSC Consent variation). In their prayer for relief on each cause of action, the plaintiffs seek orders against the defendants requiring the subdivision around the Keir home to be undertaken in the terms contemplated by the 2021 TSC Consent variation.
Other key properties
[19] Given the plaintiffs’ contextual reliance on a broad range of their family history, other properties are also relevant:
(a)39/47 Kiwi Road, Waiuku: Bob and Lynette bought farmland at Kiwi Road in 1982. It was sold in April 2005 to the Keir Simms Trust Partnership (operated by Rachael and John), with a lease back to Bob and Lynette for grazing. Keir Simms Trust Partnership sold the property in June 2012, to release funds for purchasing Lot 4.
(b)73 Sanctuary Drive, Glenbrook: Rachael and John purchased a property in Sanctuary Drive in September 2008. They sold it in August 2014 to release funds for purchasing Lot 3.
(c)24 Sherwood Drive, Patumāhoe: Bob and Lynette bought farmland in Sherwood Drive in 2000. They sold it with vendor finance in 2006 to Coral Farms Trading Trust (operated by Rachael and Bruce’s respective
3 Keir v Auckland Council [2023] NZHC 1658, (2023) 24 ELRNZ 886.
family trusts on a 50:50 basis). Coral Farms Trading Trust sold the property in an agreement dated 12 December 2012, which settled on 31 May 2013 with some of the proceeds used to part-repay the vendor finance, in turn used by Bob and Lynette to settle on Lot 2 on 1 June 2013.
Chronological overview
Early family background
[20]Lynette grew up on a dairy farm and started milking cows from a young age.
[21] Bob and Lynette met in 1968 and married in 1970. Two years later, the Simms instructed their solicitor to draft wills that divided their estate equally between their future children. The first of such wills was executed in 1974, around two months after Rachael was born and before Bruce was born.
Early calf-rearing business
[22] Bob and Lynette began their first farming business in 1982 by buying a 52-acre block at 39 Kiwi Road, Waiuku. They ran a calf-rearing business on that land. During this time, Lynette worked in a local coffee shop and as a library assistant and Bob travelled to work in Ōtāhuhu.
[23] In 1986 or 1987, Bob and Lynette expanded their calf-rearing business by buying a 40-acre block at Āwhitu Peninsula and, six months later, a 50-acre run-off at Onewhero. Subsequently, in 1988 they sold both properties and bought a larger 400-acre block at Hoe-O-Tainui.
Establishment of the Home Dairy Farm
[24] In 1993, Bob and Lynette sold part of the Hoe-O-Tainui land and bought 85 acres at 278 Glenbrook Beach Road, expanding their calf-rearing business to that property.
[25] In 1995, Bob and Lynette transitioned from calf-rearing to dairy farming, supplying milk to Dairy Group NZ Ltd (a precursor to Fonterra).
[26] In 2000, Bob and Lynette sold the remainder of Hoe-O-Tainui to fund the purchase of a larger dairy farm of approximately 142 acres at 24 Sherwood Drive, Patumāhoe. Bob and Lynette subdivided and sold approximately 50 acres at 24 Sherwood Drive. Those sale proceeds assisted in their purchase of the neighbouring farm at 256 Glenbrook Beach Road, which settled in June 2001.
[27] Later, in 2003, Bob and Lynette subdivided Kiwi Road, selling off the house and four acres, with the remaining 48 acres renumbered 47 Kiwi Road. Bob and Lynette also joined the titles at 256 and 278 Glenbrook Beach Road to create what is now the Home Dairy Farm (apart from a small 1.1 ha bare lifestyle block that they subdivided and sold).
Rachael’s education and early employment
[28] Between 1992 and 1996, Rachael studied at Auckland University, achieving a Bachelor of Science (Hons) majoring in chemistry. While studying, she lived at home with her parents. During the holidays she worked at BHP New Zealand Steel in the testing laboratories and process engineering departments.
[29] In 1996, Rachael was employed by Anchor Group in the dairy industry graduate training programme, obtaining a Graduate Diploma of Dairy Science and Technology (now officially a master’s degree). During that year, she worked and studied in Hamilton and Palmerston North, flatting with others. She was then employed at the Hautapu dairy factory as a product development technologist in both protein and cheese. After that job, she moved to work at Te Rapa dairy factory (NZMP and Fonterra) as an advanced process control engineer.
Payments by Rachael
[30]Between 1996 to 2003, Rachael paid around $95,000 to her parents.4
4 This was repaid with interest in April 2005.
Bruce’s education and early employment
[31] Meanwhile from 1995, Bruce Simms studied at Waikato University graduating in 1998 with a Master of Science (Technology) Degree (Hons) in Geology. Bruce worked for a short time at BHP New Zealand Steel Waikato North Head Mine site, then went overseas in 2000, returning home in 2001 with Rebecca (whom he later married). In 2002, Bruce and Rebecca purchased a home in Waterview, Auckland.
2003/2004: Napier onion reaction
[32] In July 2003, Rachael took six months’ leave from her job at Te Rapa and moved home to live with her parents. This was in a period leading up to Bob receiving a hip replacement in November 2003.
[33] From September 2003, Rachael started going out with John, who was living in Hawkes Bay and working as an electrical engineer. They travelled to see each other in the weekends.
[34] In April 2004, Rachael moved to Napier to begin contract work at Heinz Watties in Process Development. Then, in August 2004, she began work as technical manager at CSI Processors. In September 2004, Rachael had her first worksite adverse reaction to onion vapours, so she subsequently worked off-site in central Hastings.
Funds to Bruce and Rebecca
[35] Around September 2004, Bob and Lynette gave $120,000 to Bruce and Rebecca at a time after the birth of their first child when they were planning to renovate their house at Waterview.
Kiwi Road Purchase
[36] In April 2005, Bob and Lynette sold 47 Kiwi Road to the Keir Simms Trust Partnership (a partnership of John and Rachael’s trusts). The property was leased back to Bob and Lynette for grazing.
[37] In 2006, John and Rachael paid a further $25,000 to Bob and Lynette in respect of that sale.
ACC and return to the Home Dairy Farm
[38] In April 2006, Rachael had a second adverse reaction to onion vapours at work, resigned from her job with CSI Processors, and recorded a workplace injury with ACC for a diagnosed reaction to aldehyde. In June 2006, she returned to live with her parents on the Home Dairy Farm, while John remained living in Napier (where he worked).
2006 — Sherwood Drive to Coral Farms
[39] While Bruce and Rebecca were still living at Waterview, Auckland, the lessee at 24 Sherwood Drive, Patumāhoe gave notice. With that news, Bob and Lynette decided to sell the property. On 4 July 2006, it was sold to the Coral Farms Trading Trust, owned 50 per cent by Rachael and 50 per cent by Bruce and Rebecca. There is a dispute about what was said at a family meeting in 2006 planning for this transaction.
[40] During August 2007, Rachael, John, Bruce and Rebecca discussed terms that might apply if either wanted to build on 24 Sherwood Drive, but they failed to reach agreement. The property was leased to another tenant from 1 June 2008.
Residential moves during 2007/2008
[41] After the birth of their second child, in early 2008 Bruce and Rebecca sold their house in Waterview and moved to Wellington.
[42] Rachael married John on 10 March 2007. In around April 2008, John started work at ABB Ltd in Auckland.
[43] On 7 November 2008, Rachael and John took possession of the land at 73 Sanctuary Drive, having obtained a resource consent on 3 November 2008 to build a dwelling on it. In the same month, they moved from the Home Dairy Farm to another rented property at 687 Glenbrook Road. On 1 May 2009, they moved to a rented property at 5 Selva Road.
Bob’s heart attack in 2009
[44] On 5 November 2009, Bob had a heart attack followed by an operation to insert stents.
ACC work hardening and Graduate Diploma
[45] As part of her ACC return to work requirements, Rachael undertook “work hardening” and completed a Graduate Diploma in Rural Studies (Distinction) via Massey University, graduating in April 2010. Her retraining and vocational rehabilitation assessment report is dated 26 May 2010. Rachael’s ACC rehabilitation and cover lapsed on 1 April 2011.
Sherwood Drive eviction and grazing
[46] The tenant occupying 24 Sherwood Drive was evicted on 26 February 2010 after legal proceedings. After his eviction, the land was leased to Bob and Lynette for grazing.
Negotiations for Lots 1–4
[47] Rachael and John’s son was born in August 2011. The Keirs moved back into Bob and Lynette’s house on the Home Dairy Farm around 29 October 2011.
[48] Bob and Lynette initially learnt that the neighbours at 265–277 Glenbrook Beach Road were selling their land when they received a phone call, in which they responded that they were not interested.
[49] After mentioning that call to Rachael and to Bruce, the issue was revisited. On 23 November 2011, Bob, Lynette and Rachael meet with the vendors of 265–277 Glenbrook Beach Road. Emails negotiating the sale price were exchanged on 12 and 13 December 2011. Negotiations continued in January 2012, culminating in a signed sale and purchase agreement dated 8 March 2012. On 12 March 2012, a $100,000 deposit was paid by the Keirs, later credited to their acquisition of Lot 4.
2012 Understandings
[50]The amended statement of claim pleads the following in para 25:
On or before January 2012 it was the common intention of the Plaintiffs (on the one hand) and the Defendants (on the other hand) that:
(a) The Plaintiffs Trust would sell 47 Kiwi Road (19.6 hectares) to assist the purchase of Lot 4.
(b) The Plaintiffs’ partnership would sell 73 Sanctuary Drive, Glenbrook (4 hectares) to assist the purchase of Lot 3.
(c) The Plaintiffs would build a home on the home dairy farm at 278 Glenbrook Beach Road wherever they wanted.
(d) The Lot 3 and 4 purchases would permit future amalgamation such that a title upon land appurtenant to and upon the Plaintiffs home, together with reasonable access and amenities, would be subdivided from the home dairy farm, and transferred free of encumbrance to the Plaintiffs.
(e) The parties would exercise good faith in negotiating a formal succession plan reflecting the Plaintiffs’ contributions to the home dairy farm, and their interwoven land holdings.
(f) Bruce Simms would not be involved in this venture or the succession of the home dairy farm.
(the “2012 Understandings”).
2012 medical event
[51] On 20 March 2012, Dr Imbeau visited the Home Dairy Farm to treat Rachael for health issues.
Settlement and lease of Lots 1–4
[52] On 1 June 2012, the first tranche of settlement occurred on the property at 265−277 Glenbrook Beach Road. Lots 3–4 were transferred to Bob and Lynette, and they began leasing Lots 1–2.
2012 — Sherwood Drive sale
[53] The defendants’ evidence is that in mid to late 2012, the Simms, the Keirs, Bruce and Rebecca met at the Home Dairy Farm to discuss the sale of Sherwood Drive
by Coral Farms Trading Trust, to fund the remainder of the purchase of 265–277 Glenbrook Beach Road.
[54] The plaintiffs deny that this meeting happened in 2012. They say the defendants are confused, and Bob’s statement that the Glenbrook farm was “not for sale” was instead made during a 2006 meeting planning for the acquisition of Sherwood Drive by Coral Farms Trading Trust.
Water bore
[55] In January 2013, a water bore was drilled at the Home Dairy Farm so that a submersible pump could be installed and connected to a new water tank and added to the existing farm water system.
Farm succession seminar
[56] On 19 March 2013, the Simms, the Keirs and Bruce attended a seminar presented by Stephen Stafford-Bush, Bob and Lynette’s accountant, about farm succession.
Transfer of Lots 2 and 4
[57] On 1 June 2013, title to Lot 2 was transferred to Bob and Lynette, and Bob and Lynette transferred title on Lot 4 to Rachael and John based on the price the land was purchased for in June 2012 (less the credited deposit).
Construction of Keir home
[58] Between June 2013 and November 2013, resource consent was sought for the Keirs to build a house near to Bob and Lynette’s on the Home Dairy Farm land. The s 92 response prepared by Rachael (with the consent of Bob and Lynette) was submitted on 8 November 2013. The resource consent was granted on 28 November 2013 and the building consent on 9 September 2014.
[59] Prior to construction, Rachael typed up a draft Deed of Family Agreement dated “Xth day of September 2014”. A second version dated “Xth day of February 2015” was prepared. No agreement was ever reached on those terms.
[60] Construction of the Keir home nevertheless commenced in October 2014. It was not finished until 2018.
Construction of underpass
[61] During 2014, an underpass was constructed to join Lot 2 to the Home Dairy Farm across the road. This was completed in August 2014.
2014 medical event
[62] In October 2014, Rachael sought treatment from Dr Imbeau for a second medical event, the nature of which is recorded in contemporaneous medical notes.
Transfer of Lots 1 and 3
[63] During March 2015, Lot 3 was transferred to Rachael and John, and Lot 1 to Bruce. As part of the sale, Rachael and John accepted $300,000 of vendor finance from Bob and Lynette, secured by a deed dated 11 March 2015 (Deed of Acknowledgement of Debt). Bruce signed an identical deed for $350,000 vendor finance.
2016 Tripp Andrews Consent
[64] On 8 August 2016, Auckland Council granted the 2016 Tripp Andrews Consent.
2017 Understandings
[65]The amended statement of claim pleads the following in para 43:
On or about the 29th of July 2017 a meeting was held between the Plaintiffs and the Defendants at the Defendants’ home to discuss succession of the farming operation. It was in principle agreed:
(a) The Plaintiffs would take over the home dairy farm and purchase it in the future.
(b) The Plaintiffs’ contributions to the development and management of the farming operation and investment over the years would be fully recognised.
(c) John would leave his then current job at ABB Limited so as to take up farm duties. He would seek contract engineering work to support Rachael and John financially and provide 20 hours of labour per week to the home dairy farm.
(d) John would be remunerated through the succession plan in the future.
(e) The home dairy farm would operate as a “team”.
(f) Bruce Simms would not be involved in any farming operation or the ultimate succession of the home dairy farm.
(g) Control and operation of the home dairy farm would remain subject to Rachael’s reaction to aldehydes and operations undertaken consistent with those requirements (as readily achievable).
(“2017 Understandings”).
[66] Bob and Lynette recall no such meeting and deny ever committing to those terms.
Subdivision and succession negotiations
[67] During 2018 and 2019, the parties discussed issues of subdivision and succession, the detail of which is addressed further at [168] to [187].
2019 breakdown of relationships
[68] Following an altercation on the Home Dairy Farm on 29 September 2019, attempts to agree on the disputed issues broke down. The 3 October 2019 meeting scheduled with an independent facilitator was cancelled.
[69]Since then, the parties have been adversarial. For example:
(a)By September 2019, Rachael still retained sole access to the farm computer and farm email account, despite Bob and Lynette’s requests that she provide the login and password. Bruce assisted his parents to
set up a new email account, and reset their passwords with Fonterra and ASB.
(b)Rachael withheld access to their grandson.
(c)As referred to at [15] to [18] above, each pursued their own amended subdivision plans.
(d)In December 2021, the plaintiffs placed a caveat over the Home Dairy Farm.
(e)In March 2022, the Keirs commenced judicial review proceedings challenging the CKL Consent variation. They also commenced the present proceeding.
(f)Around mid-2022, Rachael padlocked and chained the front paddocks 1–7 on the Home Dairy Farm, to deny Bob and Lynette access to those parts of their own land. Under cross-examination, Rachael said “I did that to ensure that my animals weren’t tampered with, nothing happened and that I could retain what was the status quo”.
(g)In early 2025, after learning it was on the market, the plaintiffs placed a caveat over Lot 2.
Legal principles
Title to land, buildings and fixtures
[70] As a matter of law, buildings and permanent structures erected on land, and items that are an integral part of the land or structure, are normally “part and parcel” of the land itself.5 So, too, chattels that have been affixed to the land or buildings are
5 D W McMorland and others Hinde McMorland & Sim Land Law in New Zealand (online ed, LexisNexis) at [6.036].
“fixtures” treated as part of the land itself.6 This assessment depends on the degree and purpose of annexation.7
[71] In Lockwood Buildings Ltd v Trust Bank Canterbury Ltd, a show home supplied by Lockwood Buildings Ltd (Lockwood) was erected on land and attached to foundations like a dwelling house.8 The mortgagee succeeded in a claim for damages against Lockwood after they removed it. That decision was upheld by the Court of Appeal.
Formalities for interests in land
[72] In contracts for the sale of land, there is a long-standing presumption that parties do not intend to be legally bound until a written agreement is signed.9
[73] This is consistent with formality requirements. Dispositions of an interest in land (including by express trust) must be in writing and satisfy s 25 of the Property Law Act 2007 (PLA):
25 Writing required for certain dispositions of interests in land
(1)A disposition of any of the following must be in writing and signed by the person making the disposition:
(a)an existing interest in land acquired by taking possession of the land:
(b)an existing legal or equitable interest in land:
(c)an existing equitable interest in a mixed fund consisting partly of land and partly of other property.
(2)A trust must be created in writing and signed by the settlor if—
(a)it relates to land; and
(b)it is to take effect in the lifetime of the settlor.
6 At [6.036].
7 Fisk v Fargher Construction Ltd (in liq) [2018] NZHC 2252, (2018) 19 NZCPR 879 at [22]; and
Somme Ltd v Central House Movers Ltd [2012] NZAR 295 (HC) at [58].
8 Lockwood Buildings Ltd v Trust Bank Canterbury Ltd [1995] 1 NZLR 22 (CA). See also Keller v Daisley [2021] NZCA 351 at [179].
9 Watson v Masterton Investments Ltd [2023] NZCA 507 at [37], citing Carruthers v Whitaker
[1975] 2 NZLR 667 (CA) at 671–674.
[74] However, exceptions are provided in s 25(3) for short-term leases, and in s 25(4) as follows:
(4)This section does not affect—
(a)the creation or operation of a resulting, implied, or constructive trust; or
(b)the making or operation of a will; or
(c)the disposition of any interest in land by operation of law.
Constructive and resulting trust exceptions
[75] Referred to in s 25(4)(a) of the PLA as an exception, a resulting trust is when, absent evidence to the contrary and subject to a countervailing presumption of advancement, the law presumes a person intends to retain the beneficial ownership of funds which they advance towards the purchase price of a property, so the legal owner holds title to the property subject to the payer’s equitable interest (to the extent of his or her contribution).10
[76] Other exceptions within s 25(4)(a) include two forms of institutional constructive trust:11
(a)The common interest constructive trust (CICT), which is a type of institutional constructive trust that developed in England as a response to property claims following the end of a de facto relationship.12 The leading English cases in that context are Stack v Dowden13 and Jones v Kernott.14 For a CICT, the key question is whether a common intention can be deduced objectively from the words and conduct of the parties.
10 Mo v Yang [2022] NZCA 573 at [57]–[59]; Crampton-Smith v Crampton-Smith [2011] NZCA 308, [2012] 1 NZLR 5 at [35]–[36]; and Chang v Lee [2017] NZCA 308, [2017] NZAR 1223 at [18].
11 As discussed in Almond v Read [2019] NZCA 26, (2019) 5 NZTR 29-036 at [64], an institutional constructive trust arises in equity when the court recognises an existing trust by declaring it, whereas a remedial constructive trust is first created when a proprietary remedy is granted and not before (so it cannot be the subject of a prior caveat).
12 Laboyrie (as trustees of the Galway Trust) v Mills (as executor of the estate of Mills) [2020] NZHC 700 at [60]; aff’d Mills v Laboyrie [2021] NZCA 450, [2022] 2 NZLR 258.
13 Stack v Dowden [2007] UKHL 17, [2007] 2 AC 432.
14 Jones v Kernott [2011] UKSC 53, [2012] 1 AC 776.
(b)The reasonable expectations constructive trust (RECT), which is based on the principles in Lankow v Rose.15 In that case, the New Zealand Court of Appeal followed a different path, focusing on the reasonable expectations of the parties, and the contributions to the property made in reliance on those expectations.16
[77] There has been ongoing debate about the inter-relationship between these two types of institutional constructive trust:
(a)In Harvey v Beveridge, the Court of Appeal declined to determine whether a CICT is restricted to de facto relationships, and whether the RECT has replaced the CICT in New Zealand.17
(b)In Almond v Read, the Court of Appeal suggested that a CICT might simply describe one type of situation in which a reasonable expectation will be found to exist.18
(c)On the other hand, in Mills v Laboyrie, the Court of Appeal was not attracted to the proposition that a CICT is a “subset” of a RECT, because (among other things) the remedy for a RECT is strictly proportionate to reasonable expectations based upon contribution, whereas for a CICT the Court fulfils the common intention even if the intended rights might be disproportionate to the contribution.19
[78] In setting the boundaries of these equitable exceptions, courts regularly sound a caution that proprietary rights fall to be governed by “settled principles”,20 otherwise the law on constructive and resulting trusts would devolve into “the indulgence of
15 Lankow v Rose [1995] 1 NZLR 277 (CA).
16 Laboyrie (as trustees of the Galway Trust) v Mills (as executor of the estate of Mills), above n 12, at [62].
17 Harvey v Beveridge [2014] NZCA 72, [2014] NZAR 677 at [45]–[46] [Harvey (CA)].
18 Almond v Read, above n 11, at [71].
19 Mills v Laboyrie, above n 12 at [53]–[54].
20 Hudson v Hathaway [2022] EWCA Civ 1648, [2023] KB 345 at [70] and [72].
idiosyncratic notions of fairness and justice”,21 “the formless void of individual moral opinion”,22 a “joker or wild card”,23 or a “portable palm tree”.24
Legal principles for CICT
[79]The elements of a CICT are as follows:25
(a)The parties must have a common intention that they will share the beneficial ownership of the relevant property.
(b)To support the constructive trust, the plaintiff must have relied on the common intention and made qualifying contributions to the property.
(c)Overall, it would be unconscionable for the defendant to resile from the common intention and deny the plaintiff’s beneficial interest.
[80] If established, the quantum for relief will differ depending on whether the parties formed a common intention regarding the size of the plaintiff’s beneficial interest or whether the Court must determine that aspect in proportion to the plaintiff’s contributions.26
[81]The following principles apply to identifying a qualifying common intention:
(a)There must have been an intention “common to the claimant and the legal owner” to share beneficial ownership of the property and such intention must be “unequivocally expressed by words or conduct”.27
21 Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752 at [17], quoting
Muschinski v Dodds (1985) 62 ALR 429 at 451–452.
22 At [17], quoting Muschinski v Dodds, above n 21, at 451–452.
23 Hudson v Hathaway, above n 20, at [70], quoting Cobbe v Yeoman’s Row Management Ltd, above n 21, at [46].
24 At [72], quoting Chief Constable of Kent v V [1983] QB 34 (CA) at 45.
25 Based on the factors identified in Chambers v The New Zealand Guardian Trust Co Ltd [2023] NZHC 2084 at [144].
26 Harvey v Beveridge [2013] NZHC 1718, [2013] NZAR 1364 at [57]–[58] [Harvey (HC)]; rev’d
Harvey (CA), above n 17, but without disturbing this reasoning.
27 At [26] and [59].
(b)It must be an “actual, subjective, intention albeit found ‘objectively’ by the Court to exist on the evidence”.28 The relevant intention is that which was reasonably understood by the other party to be manifested by that party’s words, conduct and the “whole course of dealing between the parties”.29
(c)The common intention is usually required to have existed at the time of the acquisition of the disputed property. Proprietary contributions are usually in reliance on a pre-existing common intention.30
(d)In exceptional cases, the parties can form a common intention after the acquisition to change the beneficial ownership of the property to override the titleholder’s rights.31 “Compelling evidence” is required to prove a post-acquisition change in beneficial ownership.32
(e)The burden rests on the plaintiff. Proof of a CICT is not a “task to be lightly embarked upon”. Family disputes involve “strong feelings” that often lead the parties “honestly but mistakenly, to reinterpret the past in self-exculpatory or vengeful terms”.33
[82] Although in England it appears that any detrimental reliance may suffice to establish a CICT,34 the New Zealand position is that contributions to the property over which a trust is asserted are likely required:
28 At [38]–[39] and [59].
29 Stack v Dowden, above n 13, at [61].
30 Almond v Read, above n 11, at [69].
31 Harvey (HC), above n 26, at [31]–[33] citing Gissing v Gissing [1971] AC 886 (HL) at 905 per Lord Diplock; Lloyd’s Bank Plc v Rosset [1991] 1 AC 107 (HL) at 132 per Lord Bridge; and Stack v Dowden, above n 13, at [138] per Lord Neuberger. Following Jones v Kernott, above n 14 at
[14] referring to an “ambulatory” constructive trust, it appears that English law no longer subscribes to the theory that post-acquisition common intentions are “exceptional”. See also Mark Bennett “Harvey v Beveridge: Common Intention Constructive Trusts in New Zealand?” (2015) 46 VUWLR 959 at 967 n 58.
32 Stack v Dowden, above n 13, at [138] per Lord Neuberger.
33 At [68].
34 See the discussion in Hudson v Hathaway, above n 20, at [70]–[153].
(a)In Harvey v Beveridge, the Court of Appeal said it was well-established that for a RECT, the plaintiff needed to prove contributions to the property.35 For a RECT, the prerequisite is that there be a causal relationship between the plaintiff’s contribution(s) and the acquisition, improvement or maintenance of property. A RECT can only be recognised in respect of the increase or preservation of value flowing from such contributions.
(b)When considering a CICT claim, the Court of Appeal in Harvey doubted the High Court’s reasoning that for a CICT it was unnecessary to demonstrate property-based contributions. The Court observed that “in the absence of any evidence of contribution or any other factor, there would appear to be no element of unconscionability” to support recognition of a CICT.36
(c)In Mills v Laboyrie, the Court of Appeal reiterated the view it earlier expressed in Harvey. One of the appeal questions was whether a CICT could be created without property contributions. The Court labelled that an “improbable concept”, and it doubted the “avoidance of the need for evidence of contribution as a rationale for the distinction between” a RECT and a CICT.37
[83] Recent High Court authorities have required the alleged beneficiary of a CICT to prove contributions to the subject property in the same way as required under a RECT.38
35 Harvey (CA), above n 17, at [46].
36 At [46].
37 Mills v Laboyrie, above n 12, at [55].
38 See for example Baker v Baker [2024] NZHC 2699 at [11]–[12]; Stills v McCormack [2023] NZHC 2224 at [64] (the plaintiff must “show relevant contributions to the property”); and Chambers v The New Zealand Guardian Trust Co Ltd, above n 25, at [143]–[144] (noting that the plaintiff must prove she “contributed in more than a minor way to the maintenance, preservation and improvement” of the property).
[84] Under a CICT, the Court fulfils the parties’ common intention even if that involves recognising a beneficial interest that exceeds the plaintiff’s contributions.39 Quantification follows a two-stage test:
(a)If the parties have formed a common intention regarding the size of the plaintiff’s beneficial interest, the Court must give effect to that intention.40
(b)Where there is no common intention regarding the size of the beneficial interest, the Court must quantify the plaintiff’s interest by reference to principles of proportionality and fairness.41
Legal principles for RECT
[85] In Lankow, Tipping J set out four factors that a claimant needs to prove to establish a RECT:42
(a)contributions, direct or indirect, to the acquisition, improvement or maintenance of the property or its value that are more than minor;
(b)there was an expectation of an interest in the property;
(c)such an expectation was a reasonable one; and
(d)the defendant should reasonably expect to yield an interest.
[86] If those elements are met, “equity will regard as unconscionable the defendant’s denial of the claimant’s interest” and will recognise a RECT.43
39 Harvey (HC), above n 26, at [59].
40 At [58] (citing David Hayton and others Underhill and Hayton Law of Trusts and Trustees (17th ed, Sweet & Maxwell, London, 2007) at [35.49]). That approach mirrors Jones v Kernott, above n 14, at [46]–[47] and [52]. See also Oxley v Hiscock [2005] Fam 211 (CA) at [69].
41 Harvey (HC), above n 26, at [58]. In Oxley v Hiscock, above n 40, Chadwick LJ said at [69] that the parties will be entitled to a share which the court considers fair having regard to the course of dealing between the parties.
42 Lankow v Rose, above n 15, at 294.
43 At 294.
[87] The jurisdiction to recognise a RECT is not an “exercise in general wealth distribution”. Nor is it a jurisdiction to award compensation for a plaintiff’s “disappointment or financial loss upon an intended permanent relationship coming to an end”.44 The starting point is that the plaintiff has “no beneficial interest in the property and must demonstrate” that their contributions “justify an entitlement to a beneficial interest”.45
[88]The following key principles apply in respect of the contributions limb:
(a)Given that a RECT is a proprietary claim,46 the contributions will not qualify unless they are to the property at issue,47 albeit they need not be monetary in nature.48 Personal contributions to the defendant or their family are not enough. Rather, they must be to the defendant as “property owners”.49
(b)There must be a causal relationship between the alleged contribution and the “acquisition, preservation or enhancement” of the property.50 It is only the “increase or preservation of value” flowing from the plaintiff’s contributions that attracts equity’s intervention.51 Financial expenditure that is “not reflected in any increase in value” does not qualify — expenditure does “not always represent value”.52
(c)Contributions to the property may be direct or indirect. Direct contributions are ones that of themselves assist in acquiring, improving or maintaining the property.53 Indirect contributions are ones that help the other party achieve that same outcome.
44 Nuthall v Heslop [1995] NZFLR 755 (HC) per Tipping J at 757.
45 K P Malcolm Ltd v Malcolm [2012] NZCA 230 at [55(b)]. See also Lankow v Rose, above n 15, at 295.
46 Lankow v Rose, above n 15, at 282 per Hardie Boys J.
47 At 294 per Tipping J.
48 See Vervoort v Forrest [2016] NZCA 375, [2016] 3 NZLR 807 at [47]; and Wakenshaw v Wakenshaw [2017] NZCA 252, [2018] NZAR 532 at [25].
49 Ogilvie v Li [2023] NZHC 1629 at [97].
50 Wakenshaw v Wakenshaw, above n 48, at [25]; see also Chin v Payne (as the executor of the estate of Payne) [2022] NZHC 3095 at [49].
51 Vervoort v Forrest, above n 48, at [69]. See also Peterberic v Eady [2020] NZHC 2130 at [49].
52 Nuthall v Heslop, above n 44, at 761.
53 Lankow v Rose, above n 15, at 295 per Tipping J.
(d)While a strict arithmetical exercise is not required,54 to qualify, the contributions must be more than minor55 and have added “significant value to the property”56 to establish a “situation of sufficient disproportion to merit Equity’s intervention”.57
(e)Furthermore, the contributions must “manifestly exceed” any benefit that the plaintiff derives from the arrangements.58 Benefits can be of a monetary or non-monetary nature (for example, the advantage and security of being provided a home, emotional support, relationship benefits).59 Rent-free accommodation is a well-recognised qualifying benefit.60
[89] Services carried out on the property or as part of an associated business can qualify as contributions under the above framework. However, to exceed what normally occurs and is expected within a family unit,61 the services must be of a “frequency or endeavour” that elevates them to something more.62
[90]Examples include the following:
(a)In Nuthall v Heslop, the plaintiff worked as an unpaid secretary on the defendant’s farm and for his jet boating partnership business. The High Court rejected the submission that a RECT was justified because the services eliminated or lessened the business’s expenses and reduced the defendant’s need to spend. None of the defendant’s assets were
54 K P Malcolm Ltd v Malcolm, above n 45, at [55(c)].
55 Wakenshaw v Wakenshaw, above n 48, at [25].
56 See Blake v Blake [2022] NZHC 3161 at [37]; and Vervoort v Forrest, above n 48, at [75].
57 Blumenthal v Stewart [2017] NZCA 181, [2017] NZFLR 307 at [53].
58 Wakenshaw v Wakenshaw, above n 48, at [25]. See also Lankow v Rose, above n 15, at 282 per Hardie Boys J; and K P Malcolm Ltd v Malcolm, above n 45, at [55(d)].
59 Lankow v Rose, above n 15, at 282 (“the benefits the relationship itself confers”); Ogilvie v Li, above n 49, at [115] (“advantage and security” of living in the property); and Blumenthal v Stewart, above n 57, at [38] (“balance of [emotional] support” flowed to the claimant).
60 See, for example, Wakenshaw v Wakenshaw, above n 48, at [27]; Woolf v Kaye [2018] NZHC 2191, [2019] 3 NZLR 93 at [332]; Chin v Payne (as the executor of the estate of Payne), above n 50, at [61]; and Ogilvie v Li, above n 49, at [109] and [115].
61 Blumenthal v Stewart, above n 57, at [40]; and Lindsay Breach Nevill’s Law of Trusts, Wills and Administration (14th ed, LexisNexis, Wellington, 2023) at [5.8], citing Lai v Huang [2019] NZHC 1822. See also Ogilvie v Li, above n 49, at [114].
62 Blumenthal v Stewart, above n 57, at [40].
“worth more at the end of the relationship” due to the plaintiff’s services.63 Nor as a matter of evidence was it established that the defendant would necessarily have incurred the additional expenditure had the plaintiff not provided the claimed services.64
(b)In Lai v Huang, the plaintiffs claimed to have worked for many years on a farm in the expectation of receiving it in the future. On the evidence, the High Court held that the plaintiff “grossly exaggerated” their alleged labour, and the services “did not add significant value to the property”.65
(c)Cosmetic contributions and services that added no property value were rejected by the Court of Appeal in both Blumenthal and Vervoort. For example, the Court rejected services such as locating properties for purchase; refurbishment; caring for animals; mowing lawns; spraying weeds; checking and maintaining electric fences; keeping the property pest-free; and tidying up a tenanted property.66
[91] Under the second limb, the focus of the inquiry is on the plaintiff’s expectation(s). As Tipping J noted in Lankow, the “claimant must establish that she expected an interest in the property”.67 A plaintiff’s expectation may be inferred from the parties’ conduct and the surrounding factual circumstances.68 The test is an objective one.69 Part of the inquiry turns on the “degree of sacrifice” made by the plaintiff.70 For example, in Lankow, the Court found that the plaintiff made an “obvious sacrifice” by making contributions to her own significant financial
63 Nuthall v Heslop, above n 44, at 758.
64 At 760.
65 Lai v Huang, above n 61, at [69] and [74].66 Vervoort v Forrest, above n 48, at [8]–[9] and [75]; Blumenthal v Stewart, above n 57, at [25]−[27] and [40].
67 Lankow v Rose, above n 15, at 294. See also Gillies v Keogh [1989] 2 NZLR 327 (CA) at 344 per Richardson J noting that the question is whether “a reasonable person in the shoes of the claimant” would have expected an interest in the relevant property.
68 Gillies v Keogh, above n 67, at 331 per Cooke P and 344 per Richardson J.
69 For example, see Lankow v Rose, above n 15, at 287–288; and Gillies v Keogh, above n 67, at 333 per Cooke J.
70 Gillies v Keogh, above n 67, at 333.
disbenefit. Accordingly, the Court said it “would have been surprising” if the claimant lacked an expectation of an interest.71
[92] The following principles apply for the third limb of assessing whether the plaintiff’s expectation of an interest in the property was reasonable:
(a)The reasonableness test is objectively assessed from the position of a reasonable person standing in the plaintiff’s shoes.72
(b)The inquiry extends to the “whole circumstances and history of the relationship”.73 For example, in Henri v Public Trustee, the Court held it was unreasonable for the plaintiff to expect to receive her parents’ house (the only asset of significance in their estate) to the exclusion of her sister.74
(c)A plaintiff’s expectation will not be reasonable if the defendant has “positively declined” throughout the relationship to acquiesce to any shared beneficial ownership. The sole legal owner can protect their position by making it clear that while “use of the property is shared, ownership is not”.75
[93] The Lankow test was developed in the context of relationship property claims between de facto partners.76 While there is no obstacle to recognising a RECT in other contexts,77 in Parkins Gendall J observed that in non-de facto contexts, the courts are “less ready to infer an intention actual or deemed, to cede part of a property owner’s legal interest to another”.78
71 Lankow v Rose, above n 15, at 291 and 298.
72 Gillies v Keogh, above n 67, at 334.
73 Almond v Read, above n 11, at [69], quoting Gormack v Scott [1995] NZFLR 289 (CA) at 47−48 per Cooke P.
74 Henri v Public Trustee HC Auckland CP235/98, 27 October 1998 at 21–22.
75 Gillies v Keogh, above n 67, at 334.
76 Hudson v Robway Farms Ltd [2012] NZHC 748 at [39].
77 Almond v Read, above n 11, at [66], n 49.
78 Parkins v Parkins [2022] NZHC 606 at [31], n 11, noting that the context of the early case law is important and, “[c]ircumstances in the past where the Courts have appeared more ready to intervene seem to have involved relationships in the nature of marriage and the like … It seems too that where contributions to an asset occurred in other relationships, for example within families
[94] The fourth Lankow element is that the defendant should reasonably expect to yield a beneficial interest to the plaintiff.79 In particular:
(a)The test is objective. As Tipping J noted in Lankow, the fact that the defendant is “not willing to yield an interest or did not expect to have to do so” is no bar. Rather, the question is whether the defendant “should reasonably expect” to yield a beneficial interest.80
(b)The question is whether “in all the circumstances both parties must be taken reasonably to have expected that the claimant would share in the assets” as a result of their contributions.81 Inquiring into the defendant’s reasonable expectations is the “other side of that coin”: the “reasonable expectations on both sides have to be considered”.82
(c)Focusing on both parties’ expectations reinforces the doctrinal rationale of the RECT — giving effect to the intentions of both parties, whether “subjectively agreed” or “deemed”.83
[95] Under a RECT, the plaintiff’s beneficial interest is “strictly proportionate” to the reasonable expectations arising from the plaintiff’s contributions.84 In Lankow, Tipping J rejected the proposition that the amount of the plaintiff’s interest is “at large and is to be determined according to broad notions of justice”.85
or between strangers, the Courts have shown a greater reluctance and will be less ready to infer an intention actual or deemed, to cede part of a property owner’s legal interest to another”. See also Cooke J’s reasons in Parkins v Parkins [2022] NZHC 2257 at [10].
79 For example, see Lankow v Rose, above n 15, at 282 per Hardie Boys J and 288–289 per Gault J; Wakenshaw v Wakenshaw, above n 48, at [25] and [36]; Gormack v Scott, above n 73, at 47–48; Chambers v The New Zealand Guardian Trust Co Ltd, above n 25, at [135]–[136]; Almond v Read, above n 11, at [67]; and Gillies v Keogh, above n 67, at 334 per Cooke P and 344 per Richardson J.
80 Lankow v Rose, above n 15, at 294.
81 Wakenshaw v Wakenshaw, above n 48, at [25]; and Lankow v Rose, above n 15, at 282 per Hardie Boys J.
82 Gillies v Keogh, above n 67, at 334 per Cooke J.
83 Jessica Palmer “Institutional Constructive Trusts” in Andrew Butler (ed) Equity and Trusts in New Zealand (Thomson Reuters, Wellington, 2009) at [13.2].
84 Harvey (HC), above n 26, at [59]. See also Lankow v Rose, above n 15, at 295 per Tipping J.
85 Lankow v Rose, above n 15, at 295.
Contentious matters
Wills and fairness policy
[96] One of the central issues is whether Bob and Lynette had a consistent policy of treating their children fairly (as equally as possible), recognising that this will not always mean identically. One reason was Lynette’s background, in which the family farm had gone to her oldest brother, whereas the comparatively modest assets promised to her ended up being shared with her siblings. I accept the defendants’ evidence that Lynette wanted equality for her children, and Bob had always agreed with that approach.
[97] Bob and Lynette each described in evidence how they have been consistent and transparent about this policy. They openly discussed the terms of their wills with both of their children, disclosing their residual assets were to be divided equally. This was in their first wills made in 1974 and through all subsequent amendments in 2004 and 2008. Rachael accepted in cross-examination that her parents told her this.
[98] The parents also referred to this policy as underlying their approach on family property transactions. This is what led to 24 Sherwood Drive being bought by Rachael and Bruce jointly, through the Coral Farms Trading Trust. When selling this property, Bob and Lynette gave both children the opportunity of purchasing it.
[99] It is also reflected in the structure of their on-sales of Lots 1 and 3 in March 2015. Bob and Lynette offered $350,000 of vendor finance to each of their children. As matters eventuated, Rachael and John only borrowed $300,000, because John had inherited $50,000 and used that towards acquiring Lot 3, but that was their choice. The offer of vendor finance was made to both children equally.
[100] The Keirs nevertheless allege that, as part of the 2012 Understandings, Bob and Lynette agreed to exclude Bruce from “this venture or the succession of the home dairy farm”. Based on the evidence, I do not accept that allegation is credible:
(a)Rachael confirmed that she never mentioned to Bruce any alleged agreement that he would be excluded from the Home Dairy Farm, nor was it documented. If her parents passed away before implementation, Rachael accepted in cross-examination that there was no objective evidence for proving the alleged agreement as against Bruce.
(b)Rachael suggested that she never discussed this with Bruce because her father asked her not to. I simply cannot reconcile this with Bob and Lynette’s open and transparent conduct with their children, and the close relationship they maintained with Bruce throughout. As referred to in respect of succession, there were several meetings of the family and with lawyers and other advisers about that topic, yet Rachael never made this allegation in any of those contexts, nor did she record it in any contemporaneous writing (despite being a prodigious note-taker).
(c)It is inconsistent with Bruce discussing the acquisition of Lots 1–4 with Bob and Lynette prior to his email dated 14 February 2012, and his direct involvement in that acquisition, purchasing Lot 1. Rachael asserted in her evidence that Bruce was “not involved in any way”, yet Bruce was forwarded copies of emails with the vendors, and a draft of the sale and purchase agreement before it was executed.
(d)During cross-examination and legal submissions, counsel for the plaintiffs sought to characterise Bruce as the “prodigal son”, because he moved to Wellington for many years. I find this aspersion entirely unwarranted. Bruce remained close with his parents throughout, returning to Auckland for visits and to assist his parents on the farm on a regular basis (both with and without his wife and children). He has always spoken with his parents over the phone regularly, usually several times a week. His parents never suggested that he needed to remain in Auckland or work more on the farm — they employed farm managers and farm assistants for that.
(e)The Home Dairy Farm constitutes the vast majority of Bob and Lynette’s assets. It is far-fetched to construct a scenario in which the Home Dairy Farm could be transferred to Rachael and John, with Bruce treated equally and fairly from other assets. At an age when they might need their assets given looming health and retirement considerations, I see no reason for Bob and Lynette to take any financial risks of that nature, especially if this was to their own detriment.
[101] The plaintiffs also suggested that Bruce had been treated advantageously in some respects:
(a)By the loan of $100,000 used towards renovation of their home in Waterview and a payment of $30,000 used to buy a boat. I accept the evidence of Bob, Lynette and Bruce that the former was a loan that was later repaid. The latter was done with a view to Bob and Lynette enjoying trips on the boat during family holidays. Furthermore, the parents had spent far greater sums on Rachael over the years for her horses, compared with Bruce’s less financially demanding hobbies growing up, such as tennis.
(b)By the $50,000 difference in vendor finance when Bob and Lynette on-sold Lots 1 and 3. I accept the defendants’ evidence that this was a choice made by Rachael and John. The same lending was offered to both children.
(c)The plaintiffs also allege that Bruce might have received a more favourable price on Lot 1 compared with Lot 3 (they were each sold to the children for $700,000). I accept Bob and Lynette’s evidence that they regarded the two sales as fair and equal as between the children, based on the sales price of the vendors to them,86 the apportionments were agreed with both Rachael and Bruce at the time, and Rachael chose her preferred lots before Bruce did.
86 Above n 2.
Rachael’s health
[102] Rachael’s workplace injury was diagnosed in 2006. Between February 2008 and June 2010, Rachael recorded any new and variable exposures or symptoms to identify triggers. Since 2010, these have been managed by mitigation measures. Such steps have included controlling or avoiding exposure to the following:
· Onion and garlic vapours
· Cleaning chemicals, such as sulphuric acid or any other strong cleaning compounds containing aldehydes, sulphur compounds or solvents
· Air fresheners
· Pest killers in general (fly spray etc)
· Candles and Gas (heaters, cook tops etc)
· Fumes from fires (wood burning or other)
· Talcum powders
· Hair products
· Printing chemicals (in office environments)
· Rubber or tyre products
· New buildings (most likely new formaldehyde from mdf, paint and varnishes)
· New cars (vinyl isomers, rubber & poly-organics)
· Urban environments (smog — spending too long in town or city)
· Certain house environments (mouldy, smoky, gas, mdf etc)
· Some air conditioning units (chilled or heated airborne irritants)
· Diesel, petrol and aviation fuel fumes
· Chlorine in pools
· Certain plants (lilies, roses, woolly nightshade etc)
· Palm kernel powder
· Vapour from broiler chicken houses
· Pressure situations e.g. exams
· Cars, buses, airplanes, airports or any aviation fuels
· Freshly Printed Products; newspapers, faxes, photocopies etc.
[103] Rachael also identified that the following types of food cause symptoms if consumed:
· Any food or drinks with preservatives e.g. sulphites, benzoates
· Wine or any Alcohol
· Onions, Garlic or Peppers
· Pork or Ham
· Eggs
· Peanuts (but not all nuts)
· Most anti-oxidants e.g. Anti-oxidant 319 (tertiary-butyl hydroquinone)
· Bleached flour or sugar (and foods made from these)
· Oranges or Feijoas (possibly NOS organic acids, citrus, limolene etc)
· Corn and products made from corn, corn flour etc
· Manuka honey
· Dairy products
· Most processed foods
[104] These needs were willingly accommodated by Bob and Lynette while Rachael was living with them, and by Bruce’s family whenever they visited where Rachael was staying. Steps taken to prioritise Rachael’s health and well-being included:
(a)no wi-fi;
(b)shutting all windows when the lawns were mown;
(c)no farm fertilisers in close proximity to the house; and
(d)ensuring that visitors to the house did not wear perfumes/deodorant or clothes washed in ordinary detergent (if not done in advance, any visitor
would need to enter at the side door, shower and put on clothes washed in special detergent).
[105] In addition to the above issues, there were two health events during March 2012 and October 2014 that were referred to extensively in evidence, relevant for the care and concern that Bob and Lynette demonstrated for their daughter, and the impact it had on their respective contributions within the household and on the farm. Counsel for the plaintiffs cross-examined the defendants on this topic, putting to them that their evidence was fabricated, even though their descriptions were consistent with the plaintiffs’ witness (the medical practitioner who attended) and his contemporaneous medical notes. I accept that the events occurred in the way described in those contemporaneous medical notes. I do not ultimately need to determine the disputed issues about the duration of Rachael’s recovery time.
[106] More material is the impact of Rachael’s allergies and sensitivities on finding suitable home and work environments. The plaintiffs’ position is that they would have continued with construction of a house at 73 Sanctuary Drive, but for the 2012 Understandings.
[107] To the contrary, as analysed in respect of the acquisition of Lots 1–4, I accept as far more credible the evidence from the defendants’ witnesses, that the decision to move back to the Home Dairy Farm in October 2011, and Rachael and John’s interest in purchasing Lots 3–4 across the road, were driven by her health motivations.
[108] These health conditions are also relevant for assessing Rachael’s contributions to the farm, and her suitability for dairy farm work (for example, she cannot spend much time in the milking sheds), as opposed to better remunerated consulting roles.
Motivations for acquisition of Lots 1–4
[109] The plaintiffs’ case in relation to the 2012 Understandings relies on an assertion that Rachael returned to the Home Dairy Farm in October 2011 at the request of her parents, because they were planning to expand the farm and they wanted it to go to Rachael, to the exclusion of Bruce.
[110] Those allegations are directly inconsistent with the evidence of Bob, Lynette, Bruce, Rebecca and Garry Box (the farm manager who was living and working on the Home Dairy Farm in October 2011). Bob, Lynette, Bruce and Rebecca all gave evidence about conversations they had with Rachael, or overheard Rachael having, on the day she came to see if her parents would let her move back to the Home Dairy Farm in October 2011:
(a)All four witnesses say Rachael moved back because her rental property had been sold and she was struggling to find another rental to live in that was suitable for her health.
(b)At the time, her son was only two months old. They needed somewhere to live.
(c)When Rachael arrived, she was visibly upset and told Bob that she could not find a rental property that was suitable for her health. Out of concern for Rachael’s well-being, Bob said that she could move home to the farm.
(d)Bruce and Rebecca witnessed these conversations because they were visiting the farm as part of celebrating Bruce’s birthday with his parents.
(e)Mr Box’s evidence is that he was directly told by Bob and Lynette at the time that “Rachael and John moved back because of Rachael’s health”.
[111]Rachael says the above evidence was a “complete falsification”.
[112] On this starkly conflicting account of those facts, I find the evidence called on behalf of the defendants more credible and consistent with the objective and circumstantial evidence.
[113] It is common ground that Bob and Lynette turned down the opportunity to purchase Lots 1–4 when they were first offered it. That is consistent with their evidence that they had no interest in expanding the farm operations at the time. Bob and Lynette’s evidence was that this first offer occurred in around November 2011, whereas Rachael’s evidence was that the first offer occurred in July 2011. Either way, I accept the evidence of Bob and Lynette that they were 64 and 66-years-old at the time and felt that they were too old to take on a large amount of debt and were very satisfied with the profitable farm they already had. At that age, they were not interested in expanding the work burdens of the farm.
[114] Bob and Lynette say that Rachael was the driver for them changing their mind. Rachael discussed the opportunity with them and said she wanted to buy the land for three reasons:
(a)to build a house on the land over the road (on Lot 4);
(b)to sell Kiwi Road and Sanctuary Drive so all their land assets would be in one place; and
(c)she was concerned that if the family did not purchase Lots 1–4, someone else might buy it and crop the farmland, which would cause spray drifts affecting her health on the Home Dairy Farm.
[115] Bob described this as “pressure” and Lynette described it as “nagging”. Whether or not those perceptions are accurate, I accept that Bob and Lynette had no interest in acquiring Lots 1–4 except to accommodate Rachael’s preferences. This is consistent with them declining the opportunity in the first place. I also accept Bruce’s evidence as truthful, trying to talk his parents out of buying the land just because Rachael wanted to stop cropping on it and so she could build a home there. The fact that such a discussion took place is supported by the following:
(a)Bruce’s email to his sister on 14 February 2012 asking how things were going with “your [moves] considering across the road????”.
(b)On 29 March 2012, Ms Hawkins (Bob and Lynette’s lawyer) made a file note of discussions recording that, if necessary to reduce debt, Lots 1–2 could be sold, but Lots 3–4 would probably be retained and there were plenty of good building sites on Lot 4 that could be built on outside the coastal marine reserve (despite a midden located near the waterline on Lot 4). This demonstrates that Bob and Lynette were not wedded to Lots 1–2 to expand the farm. Rather, their focus was ensuring Rachael could build on Lot 4.
(c)Mr Stafford-Bush gave evidence that he recalled a discussion with Bob and Lynette that they were reluctant to purchase the land because they did not want to take on more debt at their age, but they were being encouraged by Rachael to purchase. This was also consistent with Mr Box’s evidence about discussions with the Simms at the time about the reasons for their prospective purchase.
(d)Bob, Lynette, Bruce, Rebecca, Mr Box, Mr Stafford-Bush and Kim-Shiree Grant (the Simms’ lawyer) were all consistent as to their knowledge of the reasons why the Simms were purchasing Lots 1–4 and the fact that none of those witnesses had discussed or heard about questions of succession being raised at the time.
[116] Much of this evidence was accepted in cross-examination by Rachael. She accepted that her parents turned down the offer to buy the farm when they were first approached by the vendors. She accepted that her parents did not want to buy the farm themselves. She said that was because they “didn’t have enough money”, but also accepted it was “not really something that you’re gonna do at the age that they are on their own”.
[117] Rachael also accepted many of the underlying reasons put forward by the Simms as their explanation for the purchase. She accepted that the acquisition had the effect of consolidating her landholdings in one place, saying “that’s what the action was” and “that’s what occurred”, but she claimed that it “wasn’t the driving focus for us”. She acknowledged speaking with Bob and Lynette at the time about “the need
for the environment of the farm to remain suitable for my health”, including “restrictions on cropping onions and other sprayed crops” and asking them for “a covenant on the farm and over the road” to prevent sprays. She also accepted that her parents were assisting her in the acquisition of Lots 3–4, and that there are good building sites on Lot 4.
[118] Overall, I find that Lots 1–4 were only acquired because Rachael was the driving force behind this for her own reasons. The consequence of such a decision was a need to make economic use of the land, but that was not the reason for the purchase.
Interwoven land holdings
[119] A common theme of the plaintiffs’ evidence and legal submissions is an allegation that landholdings and farm operations were “interwoven”.
[120] To the contrary, I find it significant that the landholdings were not interwoven (I deal separately with the issue of the Keirs’ house being constructed on land legally owned by Bob and Lynette). In each material instance in which decisions were made about changes in family control and use of land, this was formally agreed. This occurred with the transfers of title for the Kiwi Road and Sherwood Drive properties, and by Bob and Lynette agreeing to pay for grazing in respect of land used but not owned by them. While the farm operations did expand to include grazing on Lots 3–4, this was done at grazing rates set at the arm’s length price previously agreed with the vendors of that same land. The defendants’ evidence supports their position that this remained a fair market level at that time.
[121] In terms of the financial statements prepared for farm operations, these also reflected distinct farm operations separated by legal title, rather than any interweaving or uncertainty. The financial statements for the Home Dairy Farm are in the name of R & L Simms, recording that Bob and Lynette were each 50 per cent partners. They record expenses including the lease charges for run-off. Both Bruce and Rachael saw such financial statements from time to time.
[122] It is common ground that there was no actual partnership with Rachael in respect of the Home Dairy Farm. Rather, the plaintiffs’ expert Mr Hussey only used this as a notional method to quantify the plaintiffs’ constructive trust claims.
[123] Beyond the question of how the land was legally held, some accommodations were made in how it was used, reflecting family dynamics. Those were predominantly in Rachael’s favour, such as the round yard and surrounding paddocks on the Home Dairy Farm used for Rachael’s horses, and her separate calf-rearing business.
(a)A belief or expectation has been created or encouraged through some action or representation (or omission to act) by the party against whom an estoppel is alleged (the Expectation Limb).
(b)Reasonable reliance on the belief or expectation by the party alleging estoppel, coupled with detriment if the belief or expectation is departed from (the Detrimental Reliance Limb).122
(c)Viewed in light of all the circumstances, it would be unconscionable for the party against whom the estoppel is alleged to resile from the belief/expectation (the Unconscionability Limb).123
[232] For the Expectation Limb, the defendant must have created or encouraged the belief or expectation held by the plaintiff. For it to be unconscionable to resile from the belief etc, the defendant must have “played such a role” in its creation that their conscience is bound.124 Any express representations relied on must be clear, unequivocal and unambiguous,125 and one that “might reasonably expect to be relied upon by the person to whom it was made”.126 This might not apply when discussions are conditional and only anticipate the future, with the possibility that the “circumstances of the representor or of [their] relationship with the representee, or both, may change and bring about a change of intentions”.127
[233]The second Detrimental Reliance Limb includes two sub-elements:128
(a)Reasonable reliance on the belief or expectation; and
122 Some authorities treat reasonable reliance and detriment as two discrete limbs. See discussion in McMorland, above n 5, at [18-007]; Thorner v Major, above n 121, at [29] per Lord Walker. By contrast, other cases collapse reliance and detriment into one limb: Wilson Parking New Zealand Ltd v Fanshawe, above n 119, at [44].
123 Wilson Parking New Zealand Ltd v Fanshawe, above n 119, at [44]; and McMorland, above n 5, at [18-007].
124 Every-Palmer, above n 119, at [19.2.1].
125 Wilson Parking New Zealand Ltd v Fanshawe, above n 119, at [44]. Reaffirmed recently in Doig v Tower Insurance Ltd [2019] NZCA 107, [2021] 2 NZLR 127. See also Every-Palmer, above n 119, at [19.3.4].
126 Thorner v Major, above n 121, at [56], quoting Walton v Walton (14 April 1994, unreported).
127 At [19].128 Taylor v Small [2019] NZCA 152, (2019) 20 NZCPR 151 at [75]; and Rudyard Holdings Ltd v Kiwibank Ltd [2014] NZHC 1253 at [139]–[142].
(b)Detriment will be suffered if the belief or expectation is departed from.
[234] An estoppel cannot succeed if the representee’s belief or expectation is “not reasonable as judged by the standard of a reasonable person” in the position of the representee.129 Reasonable reliance is defeated if:
(a)the representee did not hold the belief;130 or
(b)the representee had actual or constructive knowledge that the representation made was untrue.131
[235] The representee’s decision to rely on the belief/expectation must also be reasonable, assessed objectively in light of the context.132 Ongoing reliance must also continue to be reasonable. So, if the representee learns that the defendant no longer intends to live up to their representations, the representee is then obliged to mitigate its position.133 Detrimental reliance is necessary because otherwise there is no injustice in the defendant resiling from the belief or expectation. The relevant detriment is what the representee “would suffer” if the representor is permitted to depart from the expectation, not the mere disappointment from the unfilled promise of a future benefit.134 In assessing detriment and deciding on remedy, the Court must weigh any countervailing benefits received by the plaintiff.135
[236] In terms of the third Unconscionability Limb, whether it is unconscionable to resile from a representation turns in part on an assessment of the reasonableness of the representee’s reliance, the level of detriment that will be suffered, and what involvement or culpability the defendant had for generating the relevant belief or expectation.136 In particular:
129 Every-Palmer, above n 119, at [19.2.2(1)]; and Rudyard Holdings Ltd v Kiwibank Ltd, above n 128, at [139].
130 Every-Palmer, above n 119, at [19.2.2(1)].
131 Waitemata Electric Power Board v King Builders Ltd [1993] 1 NZLR 312 (CA) at 317; and
Equiticorp Industries Group Ltd (in stat man) v R (No 47) [1998] 2 NZLR 481 (HC) at 716–717.
132 Commonwealth of Australia v Verwayen (1990) 170 CLR 394 (HCA) at 445.
133 Every-Palmer, above n 119, at [19.2.2(3)].
134 At [19.2.3].
135 See for example Winter v Winter [2024] EWCA Civ 699, [2024] All ER (D) 94 (Jun) at [30], citing Davies v Davies [2016] EWCA Civ 463, [2016] WTLR 1547 at [38(vi)]; and see Henry v Henry [2010] UKPC 3, [2010] 1 All ER 988.
136 Every-Palmer, above n 119, at [19.2.4(1)].
(a)In Guest, the United Kingdom Supreme Court stated that unconscionability might not be established if there is a change in circumstances, e.g., the promisor “falling on hard times and needing to sell the property to pay his creditors, or to pay for expensive medical treatment or social care for himself or his wife”.137
(b)In Thorner v Major, Lord Scott similarly referred to the promisor resiling due to the need to fund full-time nursing care or medical treatment.138
[237] Relief for equitable estoppel focuses on what appropriately addresses the equity arising from the attempted departure from the belief or expectation.139 To guide the discretion, the following principles apply:
(a)Unconscionability attracts the jurisdiction of courts of equity and “moulds the remedy”.140 All relevant circumstances must be considered as part of the assessment of how to satisfy the equity.
(b)In some cases, both the promise and the detriment are reasonably precisely defined at the time of repudiation, “where one is in a sense the quid pro quo of the other although falling short of contract”.141 These types of cases generate the strongest justification for enforcement of a plaintiff’s expectations.142
(c)By contrast, if neither the promise nor the detriment is clear, there is “much greater scope for a departure from full enforcement, even if there are no other problems making it just to do so”.143
137 Guest v Guest, above n 121, at [74].
138 Thorner v Major, above n 121, at [19].
139 Wilson Parking New Zealand Ltd v Fanshawe, above n 119, at [44].
140 Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 419.
141 Guest v Guest, above n 121, at [77].
142 At [77].
143 At [77].
(d)If the plaintiff’s expectation is “seriously disproportionate” to the level of detriment suffered, the court is unlikely to grant expectation-based relief.144 To do so would overcompensate the plaintiff and be unjust to the defendant.
(e)“Enforced cohabitation” is a recognised basis for departing from an expectation-based remedy.145 Warring parties cannot be required to continue living together without each party suffering.146 Instead, the courts usually alleviate the unconscionability “either by a mixed in specie and monetary award, or by a pure monetary award”.147
[238] Examples of estoppel cases involving assurances by the owner of the property that the claimant would be granted an interest include the following:148
(a)In Inwards v Baker, the father encouraged his son to build a bungalow on the father’s land, creating an expectation that the son would be allowed to remain there for his lifetime, or as long as he wished it to remain his home.149 After the father died, the trustees of his will tried to evict the son. The son’s claim of estoppel succeeded. In effect the father, and after his death the trustees of his will, were estopped from denying that the son’s licence to occupy the land was an irrevocable one.150 In New Zealand, claims against the estate of a deceased can be pursued under the Law Reform (Testamentary Promises) Act 1949 and the Family Protection Act 1955.
(b)In E.R. Ives Investment Ltd v High, a neighbour encroached on the defendant’s land, putting the foundations of a block of flats a foot over the boundary.151 The resulting dispute was resolved by an agreement that the foundations could remain, but the defendant would be given an
144 Wilson Parking New Zealand Ltd v Fanshawe, above n 119, at [118].
145 Guest v Guest, above n 121, at [32].
146 At [62]–[65].
147 At [63].
148 See Connor Seddon and Henry Brandts-Giesen “Proprietary estoppel” [2021] NZLJ 195.
149 Inwards v Baker [1965] 2 QB 29 (CA).
150 Cobbe v Yeoman’s Row Management Ltd, above n 21, at [22].
151 E.R. Ives Investment Ltd v High [1967] 2 QB 379 (CA).
equitable right of way. In reliance on that, the defendant built a garage that could only be accessed using the right of way. A subsequent purchaser of the flats was aware of that at the auction, but later alleged it was void as unregistered. The Court of Appeal upheld the decision that the purchaser was estopped from denying the right of way.
(c)In Carroll v Bates, the mother had given her daughter the keys to the family home and told her that she would be left it when her mother and father died.152 The family treated the home as if the daughter owned it and the daughter invested considerably in the property. The Court found that there had been clear representations to the daughter as well as the rest of the family. Those representations had been enough to cause the daughter to rely on them to her detriment in the amount she invested.
(d)In Hamilton v Kirwan, the deceased asked his daughter to live on his rural property.153 The daughter and her partner were hoping to build a dwelling house on the land separate from an existing bach. They needed some assurance of security before spending time and money on building. In a meeting with several witnesses, the deceased reassured the daughter that, on his death, she would inherit the property equally with her brothers. In reliance on those unequivocal representations, she constructed a house and business premises. The father subsequently gifted the property into a trust for which his sons were beneficiaries, but his daughter was not. Granting the proprietary estoppel claim, the Court declared that the transfer of the property to the trust was null and void and ordered the property to be distributed between the sons and daughter as tenants in common in equal shares.
(e)In Gillett v Holt, Mr Holt had made several assurances to his friend and farm manager, Mr Gillett, over a period of some 40 years, that he would
152 Carroll v Bates [2018] NZHC 2463, [2018] NZAR 1570.
153 Hamilton v Kirwan [2020] NZHC 2149.
inherit the bulk of Mr Holt’s estate.154 After their relationship soured, Mr Holt changed his will to leave his estate almost entirely to another person. The High Court found that the relevant assurances, while sufficiently clear, could not reasonably have been understood by Mr Gillett as being irrevocable. Mr Gillett’s appeal was upheld, on the grounds that the assurances were tantamount to a promise, repeated unambiguously on many occasions before other witnesses.
Analysis — Expectation Limb
[239] Submissions on the estoppel cause of action were only faintly pursued, on the basis that the primary causes of action are those seeking constructive trust remedies, with the same factual allegations relied on.
[240] The pleading says an enrichment arose “as a result of the [plaintiffs’] vulnerabilities and/or the [defendants’] representations” as alleged in the constructive trust causes of action. The unconscionability is said to be “denying the [plaintiffs’] claims”.
[241] On the facts as analysed above, the plaintiffs have failed to establish any representations that could form the basis of an estoppel claim. As was the case in Cobbe v Yeoman’s Row Management Ltd,155 there is no coherent formulation of the content of the estoppel or of the proprietary interest that the estoppel was designed to protect.
[242] The issues are more finely balanced for allowing a house to be built on the Home Dairy Farm, but I find that there was no promise of an interest in land or irrevocable licence to occupy, of the type relied on in each of the cases referred to in
[238] above. To the contrary, the draft Deeds of Family Arrangement reflected the position of Bob and Lynette that they remained unconstrained in deciding how to deal with the land, and any solution to address expenditure by the Keirs on construction was dependent on negotiation and agreement.
154 Gillett v Holt, above n 120.
155 Cobbe v Yeoman’s Row Management Ltd, above n 21, at [17].
Analysis — Detrimental Reliance Limb
[243] The plaintiffs allege detrimental reliance, for which they seek an order estopping the defendants from denying the plaintiffs’ claim and an order directing the defendants to implement the amalgamations and partitions in the 2021 TSC Consent variation, together with a claim for alleged losses consisting of a mix of loss of opportunity and for their contributions, disgorgement of profits, general damage for stress and inconvenience, and costs of relocation.
[244] As with the constructive trust causes of action, I am not satisfied that the plaintiffs have suffered detrimental reliance by acting on any enforceable representations. Rather, there have been benefits provided in both directions in the context of family arrangements, and a decision by the Keirs to take the risk of building on the Home Dairy Farm knowing that the parties had failed to agree on terms to address the problem that the Keirs did not own that land.
Analysis — Unconscionability
[245] In the circumstances, there is no unconscionability in the position now taken by the defendants. There was no relevant representation to which the defendants should be held in equity. The Simms made an offer in 2018 that was more than fair, to sell the Keirs 10 acres around their house at below market value to achieve a subdivision. That offer was rejected by the Keirs because they wanted to drive the price down by a further $50,000. The Simms have not acted unconscionably in any way.
[246] As was the case when the Keirs decided to proceed without agreement on the Deed of Family Arrangement, it remains within the decision-making power of the Simms to assess what they wish to do in terms of discretionary payments, testamentary dispositions and questions of succession.
Conclusions
[247]Accordingly, the third cause of action for unjust enrichment/estoppel also fails.
Affirmative defence — orders for possession
[248]If the Keirs’ claim fails, the Simms have sought possession orders as follows:
An order requiring the plaintiffs to give up possession and vacate the property at 256–278 Glenbrook Beach Road, RD 1, Waiuku, being all that land contained and described in the identifier Lot 2 DP 327986, to take effect one month from the date of judgment or at such other time as the Court considers appropriate.
[249] When a claim seeking a proprietary interest fails, the corollary will often be that the proprietor is entitled to orders for possession against the claimant:
(a)In Harvey v Beveridge, the Court of Appeal found that Mr Beveridge had failed to establish a CICT or a RECT, so he had no defence to a summary judgment application for possession by the executrix of the will.156 The Court ordered Mr Beveridge to give up possession within 28 days.
(b)In Woolf v Kaye, Virginia Woolf lived in a house on land owned by Alwyn Kaye for 36 years.157 She brought a constructive trust against Mr Kaye. He defended the claim and applied for possession orders. Ms Woolf’s claim failed, with the result that Mr Kaye was both the registered proprietor and sole beneficial owner of the property. The Court determined that Ms Woolf had no legal right to occupation, so there was “no reason not to make an order for possession of the property”.158 The Court granted an order to take effect two calendar months from the date of the judgment.
(c)In Washikita v Smith, the Court made possession orders in favour of a registered proprietor who had successfully defended a constructive trust counterclaim.159 The Court allowed from 19 December 2022 until 28 February 2023 (or two months, 10 calendar days) for the property to be vacated.
156 Harvey (CA), above n 17.
157 Woolf v Kaye, above n 60.
158 At [357].
159 Washikita v Smith [2022] NZHC 3524.
[250] In this case, it is common ground that Bob and Lynette are the sole registered owners of the Home Dairy Farm. Success or otherwise on their application for possession turns on whether the Keirs have a beneficial interest in the land pursuant to a CICT/RECT, or whether the Simms can be estopped from enforcing possession (such as if the Simms had granted the Keirs a life interest or lease).
[251] The only basis on which the plaintiffs opposed possession orders in their statement of reply was an allegation they “reside” in the house “with the Defendant’s consent”. The only type of consent pleaded are the three causes of action, considered above.
[252] In Hinde McMorland & Sim on Land Law, the authors describe a bare licence as follows:160
An express bare licence is a privilege granted by one person to another to do something which would otherwise be unlawful, but unaccompanied by any circumstances which might give rise to a right in the licensee that the licence should not be revoked at any time. Such a situation will exist where there is no contract and no circumstances giving rise to an equitable estoppel.
[253] Such a bare licence is revocable at will. The licensor need only communicate the revocation to the licensee by express notice. Following revocation of a bare licence, a licensee is entitled to a reasonable period to enable them to leave the premises and remove their property.161
[254] Any bare licence to live in the Keir house has now been revoked. The Simms’ pleading expressly seeks orders requiring the Keirs to vacate the Home Dairy Farm. That pleading constitutes express notice and is fundamentally incompatible with continuation of the licence.
[255] During opening arguments, counsel for the defendants drew to the Court’s attention the absence of a prayer for compensation in response to the possession application. The Keirs did not seek to amend their pleading to request consequential orders requiring the Simms to pay compensation for the Keir house. If consequential
160 McMorland, above n 5, at [18.004].
161 At [18.015].
orders had been sought, counsel for the Simms say their response would have been as follows:
(a)Following a grant of vacant possession, the only tenable enrichment received by the Simms is the improvement value to the land created by the house.
(b)The Simms cannot logically have received or retained the benefit of the money expended by the Keirs in building their house. Doctrinally, that expenditure is of not of direct benefit to the Simms and does not qualify as “enrichment”. The money spent to build the house only benefited the Simms to the extent that it increased the value underlying the Home Dairy Farm itself.
(c)For those reasons, the only enrichment in respect of which the Keirs could have sought consequential relief was the amount by which Mr Hopping said the house improved the value of the land (now assessed at $675,000 with the code compliance certificate issued).
(d)However, awarding such a sum to the Keirs would overcompensate them, given the significant benefits they received from the Simms in connection with the house.
[256] Accordingly, the Simms say the Keirs have no legal occupation rights or right to compensation, and must yield to Bob and Lynette’s exclusive rights as registered proprietors. I accept that is the case, and that two months is a reasonable time for them to vacate.
Caveats — orders for removal
[257] It is common ground that the caveats protected the proprietary interests that have been claimed in this proceeding. As those causes of action have failed, this constitutes a res judicata determination that the plaintiffs have no such proprietary
interest to support those registered caveats. It follows that the caveat lodged against the Home Dairy Farm must be removed immediately.162
[258] The parties have filed memoranda confirming that such steps would be taken to reflect the outcome of this proceeding.163
Counterclaim — Deed of Acknowledgement of Debt
[259] The Simms’ counterclaim seeks to enforce the Deed of Acknowledgment of Debt under which they secured the balance of the $300,000 the Keirs owe for the purchase of Lot 3 in March 2015. The Simms seek the sum of $300,000 (plus GST if any), together with the penalty interest according to the terms of the deed.
[260]The Deed of Acknowledgement of Debt’s key terms are as follows:
(a)Clause 1 states that the Keirs owe the Simms the “principal sum” as of 17 March 2015 which the Simms loaned on a 3-year term. Recital (a) defines that sum as “$300,000.00 (plus GST if any)”.
(b)Clause 2 obliges the Keirs to repay the principal sum “upon 17 March 2018”, unless early repayment was requested (which did not occur).
(c)Clause 4 states that the interest rate on the principal sum was zero per cent until the repayment date of 17 March 2018.
(d)Clause 5 states that if the Keirs fail to pay all or part of the principal sum by the repayment date, then the Simms:
shall be entitled to charge [the Keirs] the penalty rate of 6% per annum on any unpaid balance from the repayment date until the principal sum and any interest owing is repaid in full.
162 After the hearing but prior to the delivery of this judgment, the defendants confirmed that the plaintiffs’ caveat over Lot 2 has lapsed and accordingly that aspect no longer requires resolution by the Court.
163 In French v Dolbel [2023] NZHC 91 at [34], an Associate Judge doubted whether he had a residual discretion to order removal of a caveat other than procedures for removal under ss 142 and 143 of the Land Transfer Act 2017. However, in Woolf v Kaye, above n 60, orders were made for removal of a caveat upon determination of the constructive trust claims and related counterclaims.
[261] There is no requirement in the Deed of Acknowledgement of Debt for a demand for payment. In any case, the counterclaim in this proceeding constitutes an explicit demand for repayment.
[262] The Keirs plead a first affirmative defence of pre-contractual representation, namely:
(a)The Simms represented the debt secured under the deed would only be called upon “on the occasion of necessity on the farm, and otherwise the debt was merely one component of the understandings regarding farm succession”.
(b)They say they were “induced” by that representation to execute the deed and in reliance on the same shifted their and their family’s position.
(c)The representation “must be treated as if it were a term of the contract, such that the Plaintiff denies repayment is due” pursuant to s 35 of the Contract and Commercial Law Act 2017.
[263] The plaintiffs have failed to establish that such a representation was ever made by the Simms prior to signing the Deed of Acknowledgement of Debt or subsequently.
(a)Bob and Lynette gave evidence that they always expected this debt to be repaid.
(b)In cross-examination, Rachael accepted she received independent legal advice before executing the deed. She accepted she was advised to discuss a lower interest rate and the clause that allowed the Simms to require repayment of the debt with six months’ notice. She accepted she discussed both points with her parents, who agreed to lower the interest rate, but wanted to retain the ability to require immediate repayment of the debt. She agreed to those terms and asked for final
agreements to be drawn up along those lines. She stated that she intended to repay the debt before the repayment date.
[264]The Keirs plead estoppel as a second affirmative defence:
(a)They allege the defendants promised the plaintiffs that the advance recorded in the deed would not be called on, save “necessity for the farm”, except upon the occasion of death, where on the defendants intended to forgive the debt.
(b)The Keirs say they “completed the purchase of Lots 3 and 4 and otherwise contributed to the farm” in reliance on this promise, causing them detriment, and that it would be unconscionable if the Simms were “permitted to break their promise and to call up the advance”.
[265] I accept the defendants’ evidence that no such promise was ever made. This is inconsistent with the express terms of the Deed of Acknowledgement of Debt and the concessions made by Rachael under cross-examination. Bob openly accepted that the debt owed by Rachael in relation to 47 Kiwi Road was intended to be forgiven, but when asked whether the same applied to the debt in relation to Lot 3, he said that was “not correct in any shape or form” and “totally different”. His evidence struck me as fair and credible, taking into account the financial context. In contrast, the plaintiffs’ allegations varied and were inconsistent. They plead representations were made in July to August 2018, but that could not be relied on for completion of the Lot 3 purchase in 2015.
[266] The third alleged affirmative defence is waiver and acquiescence. Among other things, the plaintiffs allege the Simms:
... knew or ought to have known that through their words (including but not limited to the understandings contained in the SOC) and their conduct in voluntarily accepting the Plaintiffs contributions as pleaded in the SOC to the farm, that they did waive such rights and entitlements to call in the debt pursuant to the Deed of Acknowledgement of Debt.
[267]The threshold to establish waiver of a contractual right is high:164
What is required is an informed choice manifested in clear and unequivocal words or conduct by the waiving party conveyed or communicated to the other. Additionally, a party alleging waiver will generally need to show that it has relied on the representations of the waiving party.
[268] I accept the defendants’ submissions that there is no logical connection between the Keirs’ alleged contributions and the debt secured by the Deed of Acknowledgement of Debt. Furthermore, there is no evidence to substantiate an informed choice manifested in clear and unequivocal words by the defendants.
[269] Accordingly, the defendants’ counterclaim seeking to enforce payment under the Deed of Acknowledgement of Debt succeeds.
Result
[270]I dismiss the plaintiffs’ claim.
[271] I make an order that Caveat No. 11974754.1 on the property at 256 Glenbrook Beach Road, being all that parcel of land containing 76.89 ha more or less being contained in Lot 2 on Deposited Plan 327986, Identifier 113794 (North Auckland Registry) is removed.
[272] I make an order requiring the plaintiffs to give up possession and vacate the property at 256–278 Glenbrook Beach Road, RD 1, Waiuku, being all that land contained and described in the identifier Lot 2 DP 327986, to take effect two months from the date of this judgment.
[273]I make an order requiring the plaintiffs to pay the defendants the sum of
$300,000 (plus GST if any), together with interest accruing at the penalty rate of six per cent per annum from 17 March 2018 until the date of repayment.
164 Dangerous Goods Compliance Ltd v Farquhar Lelean Holdings Ltd (in liq) [2022] NZHC 3041 at [144] (footnotes omitted). See also Neylon v Dickens [1978] 2 NZLR 35 (PC) at 38.
[274]If costs cannot be agreed, then the defendants may file a memorandum within
15 working days, and the plaintiffs may file a memorandum within a further 15 working days, for costs to be determined on the papers.
O’Gorman J
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