Kumar v Wendt - [2018] NZHC 72

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2016-485-000695 [2018] NZHC 72

IN THE MATTER OF Section 339 of the Property Law Act 2007

IN THE MATTER OF

1332 High Street, Lower Hutt

BETWEEN

VINOD KUMAR AND LAGI KUMAR Plaintiffs

AND

MOANA LOUISE WENDT Defendant

Hearing: 5 February 2018

Counsel:

F J Handy for Plaintiffs
K P L Ah Kuoi for Defendant

Judgment:

8 February 2018

JUDGMENT OF COLLINS J

Introduction

[1] The issue in this case is encapsulated in the following question:

Are Mr and Mrs Kumar, who were each registered as proprietors of a one- third share of a property as tenants in common with Ms Wendt entitled to two- thirds of the net proceeds of the sale of the property, and other moneys?

[2] Save in one minor respect, the answer to this question is “no” because, at the time the parties became registered as tenants in common on the title to the property they intended Ms Wendt and her partner, Mr Fuimaono, would be the beneficial
owners of the property.

KUMAR v WENDT [2018] NZHC 72 [8 February 2018]

Background

[3] Mr Fuimaono, who is the brother of Mrs Kumar, commenced a relationship with Ms Wendt in 1997. Their relationship was marked by periods of instability. In
2009, Ms Wendt decided to leave Mr Fuimaono and move to Auckland with their two children. Ms Wendt explained in her evidence that Mr Fuimaono soon followed her to Auckland and persuaded her to return to Wellington. Part of the inducement offered by Mr Fuimaono for Ms Wendt and their children to return to Wellington was that
Mr and Mrs Kumar were willing to assist Ms Wendt and Mr Fuimaono in purchasing a home in Wellington. This proposal appealed to Ms Wendt because it would mean she and her family would no longer be dependent on Housing New Zealand for their accommodation.

[4] At the time, Mr Kumar and his wife lived in a freehold property in Wainuiomata. They had also developed a small property investment portfolio comprising three “rental properties”.

[5] In 2010, Ms Wendt and Mr Fuimaono decided they wished to purchase a property at 1332 High Street, Lower Hutt (the property). To do so they needed to raise a mortgage. Mr Fuimaono, however, had a poor credit rating and could not borrow money from a bank. To overcome this impediment, Mr and Mrs Kumar agreed to assist Mr Fuimaono and Ms Wendt by joining Ms Wendt as mortgagors on the basis that Mr Fuimaono and Ms Wendt would assume responsibility for making the mortgage repayments. In order to become registered as mortgagors, Mr and Mrs Kumar also became registered as proprietors of the property, as tenants in common with Ms Wendt.

[6] The purchase price for the property was $197,500. Two mortgages were arranged with ANZ Bank (ANZ) for $164,000 and $41,000 that were secured against the titles to the property and Mr and Mrs Kumar’s…

Grounds of appeal

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

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

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

Consideration

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

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

Continue reading Kumar v Wendt

Details

AGLC: Kumar v Wendt [2018] NZHC 72
Case: [2018] NZHC 72
Decision Date: 8 February 2018

CaseChat Overview and Summary

In Kumar v Wendt, Vinod and Lagi Kumar, the plaintiffs, sought to claim two-thirds of the net proceeds from the sale of a property in Lower Hutt, which they had purchased alongside Moana Louise Wendt, the defendant. The dispute arose from the terms of their ownership, with the Kumars arguing that their registration as tenants in common entitled them to a larger share of the proceeds, whereas Wendt contended that they had intended to be the beneficial owners of the property. The case was heard by Collins J in the High Court of New Zealand, Wellington Registry.

The central legal issue revolved around whether the Kumars were entitled to two-thirds of the net proceeds from the sale of the property and other associated monies. The court needed to determine the nature of the trust, if any, that existed over the property and whether the Kumars' intentions at the time of purchase aligned with their current claims. The legal principles involved included the presumption in favour of registered interests, the ability to rebut this presumption through equitable doctrines such as constructive or resulting trusts, and the provisions of the Property Law Act 2007.

Collins J concluded that the Kumars had intended to assist Wendt and her partner, Fuimaono, in purchasing their home, and thus, they were not the beneficial owners of the property. The judge found that the Kumars' registration on the title was purely to facilitate the purchase and that they had no intention of benefiting from the increased equity in the property. Consequently, the court ruled in favour of Wendt, awarding her the bulk of the net proceeds from the sale. The Kumars were, however, entitled to a small portion of the $10,000 that was paid into Wendt's personal account, as it was not evident that this money was intended for the property or as a gift. The final order divided the net proceeds accordingly, with Wendt receiving the majority share, and the Kumars receiving a smaller sum. The court also ordered costs in favour of Wendt.

Orders