Lo v Lo

[2020] NZHC 1614

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-1398

[2020] NZHC 1614

BETWEEN

HO SHING LO

Applicant

AND

HO CHEONG LO

First respondent

CHI NA KWOK

Second respondent

Hearing:	29–30 June and 1 July 2020
Appearances:	M D Lloyd for the applicant M G Keall for the respondents
Judgment:	8 July 2020

JUDGMENT OF JAGOSE J

This judgment was delivered by me on 8 July 2020 at 3.30pm.

Pursuant to Rule 11.5 of the High Court Rules.

………………………… Registrar/Deputy Registrar

Counsel:

M D Lloyd Barrister, Auckland M G Keall Barrister, Auckland

LO v LO [2020] NZHC 1614 [8 July 2020]

[1]    The applicant (“Ho Shing”) and first respondent (“Ho Cheong”) are twins and the registered proprietors of a half-share each in a six-bedroom property in Auckland’s Flat Bush. The property was acquired in May 2015 with a mortgage secured over it and another three-bedroom property in Auckland’s Papakura (since sold, the proceeds going to reduce the mortgage), of which they also were registered proprietors on its acquisition in October 2010. The two properties served sequentially as the twins’ family  home,  in  which  they  had  lived  with  the  second  respondent  (their mother (“Chi Na”), and their younger brother (“Ho Kwan” Lo) and maternal grandmother (“Yanyi” Wang). I mean no disrespect by using their common names as at the hearing.

[2]    Ho Shing now applies for orders under s 339 of the Property Law Act 2007 for sale of the Flat  Bush  property  and  division  of  its  proceeds  between  him  and  Ho Cheong, or requiring Ho Cheong to purchase his share in it. The property was valued in June 2019 at $1.250 m, over which is secured  a $662,000 mortgage.      Ho Cheong and Chi Na oppose largely on grounds Chi Na contributed the entirety of the purchase price of the Papakura property not covered by the original mortgage, which was acquired (and succeeded by the Flat Bush property) as a home for the extended family. (The Papakura property was retained as collateral for the Flat Bush mortgage, and maintained as a rental property, rent going to reduce the amount of the mortgage.) They argue Ho Shing, Ho Cheong, and Chi Na contributed roughly equal sums to the family’s living expenses (including mortgage repayments and other property expenses). That includes the twins’ payment of ‘board’ to Chi Na while living at the family home, when Chi Na ceased to obtain child support payments after they turned eighteen years of age.

Background

[3]    Chi Na separated from her sons’ father in 2001, when the three boys were twelve and eight years old. The terms of the parents’ relationship dissolution were settled in 2010, with Chi Na receiving $300,000. At the time, the extended family had been  living  in  two-bedroom  rental  accommodation,  although   Ho   Shing  and Ho Cheong also lived together for some unspecified period(s) in separate rental accommodation.

[4]    In 2010, Ho Shing and Ho Cheong both obtained financial scholarships to support their intended engineering doctorate study. The scholarships paid their academic fees and provided each an additional annual $25,000 over the subsequent three and a half years, extendable to four years (as it was for Ho Cheong). Chi Na proposed the twins’ scholarship funds, amounting to $100,000 each over four years, be used in support of a mortgage application to acquire a suitable Papakura property she had identified, the balance of which purchase price she would obtain. Lacking any English language facility, she introduced the twins to the property’s Chinese language agent, who correspondingly introduced a Chinese language mortgage broker and lawyer (all also used English language) for completion of the transaction.

[5]    By letter of 15 September 2010, the National Bank of New Zealand Limited approved fixed interest mortgage finance to the twins of a maximum $300,000 to no more than 77.92 per cent of the purchase price with indicative first year repayments minorly exceeding $45,000. The loan was conditional on – among other things – the twins’ provision of “[a] signed Certificate of Gifting being held by the Bank for an amount of $85,000.00 prior to loan drawdown”.

[6]    By email of 23 September 2010 to the twins, the broker proposed wording for the certificate,1 which was adopted: “I, Guo Zi Qi, confirm that I will give my nephews, Ho Cheong Lo and Ho Shing Lo, $85,000 to purchase the property without paying back”. Guo Zi Qi is Chi Na’s brother, her sons’ uncle. Guo Zi Qi’s name is written in Chinese language characters above his name typed in English language characters at the foot of the certificate. The certificate also is annotated with the handwritten figures “28/08/2010”.

[7]    The extended family moved into the three-bedroom Papakura property after settlement, Ho Cheong sharing a bedroom with Ho Kwan, and Yanyi sleeping in the lounge. Over subsequent years, meaningful contributions to the household’s expenses (including mortgage payments, and on the properties’ improvements and maintenance) continued to be made by Ho Shing, Ho Cheong, and Chi Na (with some contributions also from Yanyi). While the Papakura property was retained as collateral for the

1      “I ****** confirm that I will give my ***** $85,000 to purchase the property without paying back.”

Flat Bush mortgage, it was maintained as a rental. It was sold in July 2018, the proceeds applied in reduction of the Flat Bush property’s mortgage.

[8]    After obtaining their doctorates, both Ho Shing and Ho Cheong are employed as engineers, Ho Shing being the first to obtain paid employment from April 2014. Ho Cheong spent a period living away from the Papakura property from May 2013 to February 2014, and then overseas in pursuing work opportunities with his father in Hong Kong from July 2014 to January 2015. Ho Kwan obtained a master’s degree in engineering in 2015, but has not since worked in paid employment. The family supported his efforts to develop an on-line gaming product, on which he has worked from his bedroom for the past four or five years. Chi Na also has not worked in paid employment, raising her children and looking after her mother instead, while diminishing the sum of her relationship property settlement. Yanyi’s contributions had come from minor domestic work she carried out for others, and from her pension.

[9]    Ho Shing and Ho Cheong initially paid all mortgage repayments and other direct property-related expenses themselves, albeit in unequal shares. Ho Cheong’s contributions were reduced on his absences from the property and later terminated while he was overseas. He returned to complete his doctoral oral examination and to secure paid employment. Ho Shing’s entreaties to Ho Cheong fully to bear a half-share of their obligations went unmet. Finding the financial burden unacceptable, and being unable to secure a resolution with Ho Cheong or Chi Na, Ho Shing moved out of the property in December 2018, and ceased contributing to any of the household’s expenses (including mortgage payments, which have  been  maintained  since  by  Ho Cheong as interest-only payments). Ho Shing’s subsequent attempts to be bought out of his share of the property, including as to one-third on Chi Na’s assertion of an interest in the property, also were unsuccessful. He brings this proceeding accordingly.

The law

[10]The Property Law Act 2007 Act provides:

339 Court may order division of property

(1)    A court may make, in respect of property owned by co-owners, an order—

(a)for the sale of the property and the division of the proceeds among the co-owners; or

(b)for the division of the property in kind among the co-owners; or

(c)requiring 1 or more co-owners to purchase the share in the property of 1 or more other co-owners at a fair and reasonable price.

(2)    An order under subsection (1) (and any related order under subsection (4)) may be made—

(a)despite anything to the contrary in the Land Transfer Act 1952; but

(b)only if it does not contravene section 340(1); and

(c)only on an application made and served in the manner required by or under section 341; and

(d)only after having regard to the matters specified in section 342.

(3)    Before determining whether to make an order under this section, the court may order the property to be valued and may direct how the cost of the valuation is to be borne.

(4)    A court making an order under subsection (1) may, in addition, make a further order specified in section 343.

(5)    Unless the court orders otherwise, every co-owner of the property (whether a party to the proceeding or not) is bound by an order under subsection (1) (and by any related order under subsection (4)).

(6)    An order under subsection (1)(b) (and any related order under subsection (4)) may be registered as an instrument under—

(a)the Land Transfer Act 1952; or

(b)the Deeds Registration Act 1908; or

(c)the Crown Minerals Act 1991.

[11]Such orders may be sought under s 341:

341 Application for order under section 339(1)

(1)    An application for an order under section 339(1) (and for any related order under section 339(4)) may be made by all or any of the following people:

(a)a co-owner of any property:

(b)a mortgagee of any property of a co-owner or co-owners if, under the mortgage and subpart 7 of Part 3, the mortgagee has become entitled to exercise a power of sale:

(c)a person with a charging order over any property of a co-owner or co- owners.

(2)    Every person who is one of the following must, if not already a party to the proceeding on that application, be served with a copy of that application:

(a)a co-owner of the property:

(b)a person who has an estate or interest in the property that may be affected by the granting of the application:

(c)a person claiming to be a party to, or entitled to a benefit under, an instrument relating to the property.

(3)    The court to which that application is made may, by order made on an application for the purpose, change, or dispense with service on, the people who must be served under subsection (2).

[12]   Section 342 then sets out mandatory relevant considerations on making orders under s 339(1):

342 Relevant considerations

A court considering whether to make an order under section 339(1) (and any related order under section 339(4)) must have regard to the following:

(a)    the extent of the share in the property of any co-owner by whom, or in respect of whose estate or interest, the application for the order is made:

(b)    the nature and location of the property:

(c)    the number of other co-owners and the extent of their shares:

(d)    the hardship that would be caused to the applicant by the refusal of the order, in comparison with the hardship that would be caused to any other person by the making of the order:

(e)    the value of any contribution made by any co-owner to the cost of improvements to, or the maintenance of, the property:

(f)     any other matters the court considers relevant.

Section 339(4)’s “related order[s]” are specified at s 343.

[13]   The provisions’ history recently has been recounted by the Court of Appeal.2 Earlier, the Court of Appeal considered:3

Under this new broad discretionary regime it is appropriate for a judge to stand back from the submissions and proposals of the parties, and consider what, on an overview, taking into account the relevant considerations, is the most just and practical way through the impasse before the court, even if the answer may not reflect the orders sought by the parties. By definition the cases that come before the court arise where parties are locked into an ownership position which they cannot resolve because of the positions they have taken, and where a way out may be by a path neither has to that point contemplated.

2      Yozin v New Zealand Guardian Trust Company Ltd [2019] NZCA 202 at [45]–[60]. See also Thomas Gibbons Section 339 of the Property Law Act 2007: a tragedy of the commonly owned? (2017) 25 Waikato Law Review 59.

3      Bayly v Hicks [2012] NZCA 589, [2013] 2 NZLR 401 at [32].

[14]   ‘Co-owner’ is defined to  mean  “a  tenant  in  common  or  a  joint  tenant”.4 It broadly is accepted such extends to equitable interests.5

Assessment

[15]   Ho Shing’s application for s 339 orders was permitted without notice to be brought as an originating application, Downs J observing – of Ho Shing’s barebones initial affidavit, evidencing primarily ownership of the Flat Bush property and his attempts to realise his share – “the likely issues are narrow. So too anticipated evidence”.6 That promise did not eventuate, trial extending to a third unscheduled day, and sitting extended hours predominantly to  accommodate  cross-examination  of Ho Shing, Ho Cheong, and Chi Na. Cross-examination of the last on the third day was foreshortened by the translator’s unavailability due to her prior commitment at another court in the afternoon, and closing submissions thereafter also then were time-limited, at counsel’s preference to avoid lengthy adjournment.

[16]   Perhaps understandably, ten years on, there is little record of the circumstances of the Papakura property’s acquisition. The bulk of evidence came with Ho Cheong’s affidavit in opposition, Ho Shing’s reply affidavit, and Ho Cheong’s response to it. Ho Cheong’s opposition provided his and Ho Shing’s joint bank statements, and extracts from his own to show various of his expenditures. In reply, Ho Shing supplied the National Bank’s 15 September 2010 letter, the broker’s provision of text for the sought Certificate of Gifting, and the certificate itself. He also provided his own comparable bank records and narrative summaries of the application of his withdrawals, as well as his and Ho Cheong’s joint bank statements, and various information relating to the ability he contended Ho Cheong had to support financing of a replacement four-bedroom house on sought sale of the Flat  Bush property.      In response, as recently as 24 June 2020, Ho Cheong provided his own and Chi Na’s

4      Property Law Act 2007, s 4 definition of “co-owner”.

5      Chang v Lee [2017] NZCA 308 at [22]; Yozin v New Zealand Guardian Trust Company Ltd, above n 2, at [66]; Read v Almond [2015] NZHC 2797 at [232], upheld on appeal in Almond v Read [2019] NZCA 26 at [66]–[70]; Fraser v Butler [2017] NZHC 120 at [44]–[52]; and Holland v Holland [2017] NZHC 1037 at [21]. See also Thomas Gibbons’ commentary, above n 2, at 71–72: “D. Equitable Interests”.

6      Lo v Lo CIV 2019-404-1398, 16 July 2019 (minute) at [2].

bank statements and similar summaries, as well as receipts for payments attributed to Chi Na of utilities at the Papakura property until May 2015.

[17]   Nonetheless, the little contemporaneous information other than bank records is far from self-contained. For example, the National Bank’s letter plainly follows some communication with or from the parties, presumably proposing the twins’ scholarship funds to support a $300,000 mortgage and the availability of the balance of the $385,000 purchase price. But what that communication may have been is unknown. No evidence was adduced from bank officers, or explanation furnished for its absence. It is unclear if the bank relied on the twins’ scholarship funds as an income stream to support the lending. The precision of the bank’s “77.92%” (or $300,000) maximum lending of a minimum $385,000 purchase price, the genesis of its requirement for a “signed Certificate of Gifting being held by the Bank for an amount of $85,000.00 prior to loan drawdown”, and the transaction’s parties being only     Ho Shing and Ho Cheong all beg some first-hand narrative from the bank, the broker, or the lawyer. But none is given.

[18]   Neither are the terms of the twins’ scholarships given any greater detail. I do not know when the scholarships commenced or ended, or what their annual $25,000 payments were intended to or did in fact support. I apprehend they may have been to subsidise living expenses, rather than to be regarded as a source of taxable income such as may support an application for mortgage finance. Ho Shing’s and Ho Cheong’s sometimes unequal mortgage contributions during the initial months of the Papakura property’s ownership are explicable by Ho Cheong continuing to pay their rental on the flat he shared with Ho Shing, until replacement tenants were found in early 2011 for the balance of their rental term. Equal contributions appear at least to have been made during the two years from March 2011 to March 2013. Ultimately, it appears agreed Ho Shing contributed some $78,000, and Ho Cheong some $46,000, in mortgage payments on the Papakura property. Equal total payments appear also to have been made in relation to the Flat Bush property mortgage from May 2015 until Ho Shing’s departure in December 2018, leaving aside a $9,000 deposit claimed to

have been made by Ho Shing on settlement of the Flat Bush property,7 and crediting

$11,250 attributed to “boarders” for the subsequent six months in 2015.

[19]   Nor is there anything approaching an adequate explanation of the provenance of the proffered ‘Certificate of Gifting’. In reply, Ho Shing represented it as certifying “[t]he $85,000 was in fact given as gift to my brother and I, by our uncle”. But there had been no communication between the twins and their uncle since they were small children. Ho Shing intimated the $85,000 contributed by Chi Na to the Papakura property’s purchase may have been in  discharge  of  her  liability  to  their  uncle. Ho Cheong and Chi Na say Ho Shing printed the document and asked Chi Na to write their uncle’s name in Chinese script, which  Ho Shing could not do and  she did.    Ho Shing allows it was “possible that [he had] typed it up”, but he had “no memory of how that gift certificate came to be about”, although he sent it to the bank. Chi Na denies having had any liability to her brother, the twins’ uncle. There can be no doubt the certificate’s text has its origins in the broker’s 23 September 2010 request, but there is no adequate explanation for its “28/08/2010” annotation, Ho Shing speculating in response to my query of him the “8”s are its author’s choice of a more “lucky” sequence in Chinese numerology. But the author is not identified.

[20]   All the above illustrates the singular inappropriateness of the originating application procedure for this dispute. The originating application procedure is “generally used for cases where it is not necessary to have full pleadings and interlocutory steps such as discovery for the proper determination of the issues”.8 “[A]ppropriate case management directions” can address such interlocutory issues as may arise,9 but the truncated procedure is not to be used “as a shortcut”.10 Without initial discovery here, the evidentiary documents have not provided the foundation for

7      Ho Shing claims the $9,000 was paid into the twins’ joint loan account at his instruction of the transaction’s lawyers, to whom he provided a $9,995 bank cheque at the time. The $9,000 entry is narrated as “SOLICITOR ASSISTANCEREFUNDED” (sic) without reference to source (as entries otherwise are identified). The money-go-round is implausible. No evidence is forthcoming from the instructed lawyers. I infer the $9,000 may be the bank’s concessionary contribution to legal fees incurred on the transaction, and Ho Shing’s payment to the lawyers being of the qualifying legal fees. Thus there is a $500 imbalance in Ho Shing’s favour, taking into account the bank’s $5 bank cheque fee.

8      Fisk v X [2014] NZHC 2797 at [18] citing Groves v TSSN Ltd (in Liq) [2012] NZHC 2402, [2013] 1 NZLR 111 at [25], and Hong Kong v Shanghai Banking Corporation v Erceg (2010) 20 PRNZ 652 (HC).

9      Fisk v X, above n 8, at [19].

10 Hong Kong v Shanghai Banking Corporation v Erceg, above n 8, at 659.

the parties’ respective cases, which then have been articulated in belated hindsight to encompass their apparent relevance.

[21]   No attempt was made to obtain or provide any comprehensive or independent accounting of the parties’ intermingled finances. For example, in addition to the uncertainty of the twins’ scholarship funds’ application, I do not know what contribution the Papakura property’s rents may have  made  to  reduction  of  the  Flat Bush mortgage, or then if those should be attributed exclusively to Ho Shing and Ho Cheong, and if so in what shares. Ho Cheong seeks to make up his $32,000 deficit on contributions to the Papakura property’s mortgage by claiming his additional

$33,000 mortgage interest payments on the Flat Bush property since Ho Shing’s departure to May 2020. Thus mortgage payments to date slightly favour Ho Cheong. But I cannot determine what payments, whether directly from Ho Shing or Ho Cheong or indirectly from the Papakura property’s rents or proceeds or the Flat Bush property’s “boarders”, go to reducing the mortgage principal or only servicing the mortgage debt. Only the former, as with Chi Na’s capital, is a contribution to the properties’ realisable equity.

[22]   A bundle of Chi Na’s bank account statements was sought to be adduced on the last day of trial, further to substantiate the progressive reduction of her relationship dissolution settlement, arguably in expenditure on the extended family’s welfare. Explaining I would not be undertaking reconstruction of the parties’ finances from scratch, I declined to receive Chi Na’s additional bank statements.

[23]I turn to s 342’s mandatory considerations.

—the extent of Ho Shing’s share in the Flat Bush property

[24]   So far as its registered proprietorship is concerned, Ho Shing owns a half share in the Flat Bush property (and Ho Cheong the other half). But Chi Na’s equitable interest (if any) requires to be taken into account. There is no dispute the parties’ only capital involved in the Papakura and Flat Bush properties’ acquisitions is the initial

$85,000 sourced from Chi Na’s bank accounts. No further capital was introduced on acquisition of the Flat Bush property. Ho Shing’s counsel, Michael Lloyd, argues if

Chi Na has any interest, it cannot be greater than her initial 22 per cent contribution, meaning Ho Shing’s and Ho Cheong’s interests each cannot be less than 39 per cent.

—the nature and location of the property

[25]   The June 2019 valuation evidence is of a modern 312m2 two-storey six- bedroom home, including “relatives accommodation”, with attached double garage on a 423m2 residential lot. The extended family appears to be its first occupants. The ‘relatives  accommodation’  is  on  the  ground   floor,  comprising  “a  living  room, a kitchenette, two double bedrooms with double built-in wardrobes and a bathroom”. Ho Cheong explained Yanyi, whose mobility is age-limited and who had been hospitalised after a fall, occupies the ground floor accommodation.

[26]   The property’s general living area also is on the ground floor, with four bedrooms (two each with an ensuite bathroom and walk-in wardrobe, and the other two also with double built-in wardrobes) and a bathroom on the upper level. The valuer describes Flat Bush as enjoying “steady demand in particular for new build developments due to its handy location and schooling. Demand is showing signs of easing as with overall values”.

—the number of other co-owners and the extent of their shares

[27]There is no direct evidence Chi Na intended to make an outright transfer of the

$85,000 to Ho Shing and Ho Cheong. Partly at  issue in considering the  extent of  Ho Cheong’s and, in particular, Chi Na’s shares in the property are battling rebuttable presumptions:11 the presumption of advancement, by which a parent is presumed by devotion to their children’s interests to have gifted any sum of money provided to them;12 and the presumption of a resulting trust, by which contributors to a property’s purchase price are presumed not to have relinquished beneficial ownership of the funds provided.13 In the latter circumstance, benefits attached to property acquired with the funds “should be shared according to their respective contributions”.14

11 Horsfall v Potter [2017] NZSC 196 at n 29.

12 Woolf v Kaye [2018] NZHC 2191 at [157]–[203].

13 Chang v Lee [2017] NZCA 308 at [18]–[20], citing Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 (HL) at 708, applied in Crampton-Smith v Crampton-Smith [2011] NZCA 308, [2012] 1 NZLR 5 at [35].

14 Chang v Lee, above n 13, at [27].

[28]   The former presumption may be rebutted on the evidence here by Chi Na’s determined identification of at least the Papakura property as suitable for her extended family’s residence, her design of the financial scheme by which it could be acquired including her contribution of the non-mortgage balance, and possibly (if regard is permitted for post-transfer rebuttal evidence)15 the properties’ continuous provision since October 2010 of accommodation for the extended family. The latter presumption is reinforced by Chi Na’s dogged pursuit of financial support for her extended family, through her sons’ adolescence supported by government assistance prior to their age of majority and receipt of her relationship dissolution settlement, and subsequently by the twins’ contributions of at least ‘board’ and the scholarships’ funding stream to support their residences’ mortgages. Her steady diminution of her relationship dissolution’s settlement, while not entirely selfless, also illustrates the extended family’s financial intermingling for mutual support. But, while there are grounds to presume a resulting trust in favour of Chi Na, I am not satisfied there may not be at least third-party evidence capable of rebutting it.

[29]   It is artificial in those circumstances to seek to isolate the properties’ funding, whether or not including other expenditure exclusively on the properties, as appropriately defining the extent of the parties’ respective shares here.

—comparative hardships

[30]   Ho Shing claims his qualifying hardship, if his application was refused, to be denial of his desires “to be  able  to  buy  [his]  own  property  free  and  clear  of  [Ho Cheong] and [Chi Na] … [and] to lead an independent life” as a man in his early 30s.

[31]   Ho Cheong says Ho Shing is leading an independent life, and retains his interest in the Flat Bush property. But, if the application was granted, Ho Cheong says he could not support the borrowing required to acquire Ho Shing’s share. With reliance on on-line mortgage calculators – as the only income earner now in the household, even with proceeds from his or his and Chi Na’s shares in the sold Flat Bush property

– they are unable to support borrowing sufficient to acquire another home for its

15     Narayan v Narayan [2010] NZFLR 161 (HC) at [47].

remaining four occupants. They would have to return to the sort of cramped accommodation the Papakura property had been acquired to escape, whether acquired or rented.

[32]   In reply, Ho Shing strongly disputes those consequences. While accepting  Ho Cheong’s lone income puts acquisition of a substitute four-bedroom property out of his reach, again in reliance on on-line mortgage calculators, that would not be the case if either Ho Kwan and/or Chi Na obtained even minimum wage employment. Ho Shing objects to his effectively enforced support of their non-productive lifestyles for so long as he is prevented from realising his share of the  Flat  Bush  property.  By reference to on-line directories of four-bedroom rental properties in East Auckland, he contends their average $750 weekly rent is “very affordable” on Ho Cheong’s approximate $1,000 weekly income (after tax).

—value of contributions to properties’ improvements and maintenance

[33]   Tellingly, the parties’ evidence does not clearly distinguish between contributions to the properties’ improvements and maintenance, and their contributions to family expenses overall. Ho Shing and Ho Cheong both identify specific items of their respective expenditure falling within the  former  category; Chi Na identifies some $15,000 spent by her on initial renovations of the Papakura property. But also extensively evidenced by each Ho Shing and Ho Cheong are their expenditures on household utilities and insurance, payments  to  and for Chi Na,    Ho Kwan, and Yanyi, and Chi Na’s household expenditure.

—other relevant matters

[34]   I cannot from the evidence segregate the parties’ expenditure on the properties’ improvements and maintenance, as may be attributed to their co-ownership interests, from that more generally incurred by them in the extended family household’s overall interest. Certainly each has expended thousands of dollars on items capable of being associated more with co-ownership than collective living expenses. But each also has expended thousands of dollars on those collective living expenses, and seemingly on the basis all expenditure was referable to that extended family interest, rather than to any particular co-ownership interest.

[35]   Ho Cheong provided a summary of his, Ho Shing’s, and Chi Na’s “Expenditures for the family during Oct 2010 – May 2020”, largely based on ‘estimates’ (extending to the cost of fuel and parking costs attributable to his transport of the brothers to university), and highly criticised by Ho Shing for significantly underestimating  his  more  established   expenditure.   Under   cross-examination, Ho Cheong said he “trust[ed]” Ho Shing’s records as “more accurate” than his estimates. The summary appears prepared to support Ho Cheong’s and Chi Na’s contentions the parties’ appropriate shares should be half to Chi Na, the other half equally shared between the twins (diverging from their opposition’s contention the division should be 25 per cent to Chi Na, for equal sharing of the balance between the twins). It is contested in its terms by Ho Shing, but not denied a relevant assessment of the parties’ contributions.

[36]   Again, all narratives of expenditure are partial, and lacking any comprehensive or orthodox approach to forensic accounting, while deploying also unorthodox treatments (by Ho Cheong, for example, in excluding payments of mortgage interest as a proxy for rent otherwise payable by the twins). Crucially, there is no attempt to provide a ‘group’ account from the parties’ bank statements, which are the only objective financial records in evidence. Chi Na’s bank statements show the steady depletion of her relationship dissolution settlement, although Ho Shing is critical of her personal expenditure on a car and overseas travel. He suggested, effectively, his and Ho Cheong’s payments of board to Chi Na indemnified their general living costs; Chi Na said that was “not even enough for just food”.

—“the most just and practical way through the impasse”

[37]   Ho Cheong and Chi Na initially contended for a “family home agreement”, by which the properties were acquired in the twins’ names, subject to Chi Na’s interest, to ensure the family “would always have a home to live in”. Under cross-examination, Ho Cheong accepted there was no ‘agreement’ as such (as Ho Shing denied), but said there was an “understanding” the properties would be “family property” of which Chi Na would have (in Chinese language) “a part”. No evidence was adduced from third parties involved in the transactions as may give any greater or more objective certainty for their formulation, or Chi Na’s exclusion from the ownership record.

While there are disputed contentions Chi Na’s requests formally to be included in the properties’ documentation were rebuffed on indeterminate grounds, it seems plain Chi Na was the motivating force for both properties’ acquisitions, to provide the family with secure and satisfactory accommodation as their collective finances permitted.

[38]   Standing back, it is plain there was no detailed understanding of – still less, agreement on – the parties’ individual interests in the properties, or how any such may be realised. The evidence is more supportive of the properties’ collective acquisition for the extended family’s longer-term accommodation, to be supported by each party according to their respective means. Critically, that included application of Ho Shing’s and Ho Cheong’s scholarship funds, without which – as much as Chi Na’s capital – the Papakura property could not have been acquired. The balance of application of the parties’ money is consequential on establishment of that starting position. I do not know if such collectivity is reflective of any Chinese cultural approach to family and/or property, such as may have commended itself to Chi Na in proposing the initial arrangement, or if there is a basis to enforce it in New Zealand law. I am hesitant to impose a black letter solution to what may be a more rainbow problem.

[39]   Nonetheless, nothing bound any party to another, but  particularly  neither  Ho Shing nor Ho Cheong to each other and Chi Na, to remain in the family residence or to contribute to the extended family’s finances when not in residence. The evidence of their respective absences and corresponding non-contribution illustrates Ho Shing’s assertions of his and Ho Cheong’s equal and exclusive obligations to support the mortgages is unsound. While Chi Na’s contribution of at least the Papakura property’s capital may deny Ho Shing’s and Ho Cheong’s exclusive ownership of the Flat Bush property, I cannot go further to create terms for the parties’ joint ownership of it or its termination.

[40]   Without some foundation for terms for the Flat Bush property’s realisation,    I also cannot identify grounds to justify the property’s sale. Ho Shing’s want to be “free and clear” of his mother and twin – “tired of carrying the majority of the burden of looking after [the extended family]” – is not enough, even as he hopes:

It might encourage my mother and younger brother to become more independent, get jobs, earn some income, my mother to learn English and to become more engaged in New Zealand life, which I feel would be really good for them financially but also as people. At the moment they are living very sheltered, very ‘unreal’ lives. I would like to think once that happens we can begin restoring the damaged relationships between us.

Ho Shing’s resort to the self-help remedy of departure from the family home and cessation of contributions to its expenses has since December 2018 relieved him of his perceived burden.

[41]   Achievement also of Ho Shing’s financial independence by realisation of “[his] equity” is, however, to be at  the  expense  of  at  least  his  58-year-old  mother’s  and 85- year-old grandmother’s accommodation. Had resulting questions of hardship only to be addressed between the three adult brothers, each qualified engineers in the early years of their careers, the contest may have been more evenly matched. But to insist his mother’s forced assimilation into New Zealand society – after some indeterminate but extended period living here, enveloped in her own culture and language while bringing up her children and caring for her mother – and his grandmother’s loss of appropriate certain accommodation at her stage of life are “just and practical” concessions to his ambition goes too far.

[42]   Even if sale might nonetheless be commended, the parties’ approach to the evidence suggests division more fairly may be determined in terms of the parties’ contributions to the extended family unit, rather than separately on the properties’ acquisition, improvement and maintenance. But the financial evidence is inadequate to determine fair division on either scale.

[43]   Last, I am uncertain there presently is an “impasse” I should overcome. Any ‘impasse’ is founded on the proposition Ho Shing is entitled now to realise his share in the Flat Bush property, exclusively as a consequence of his being one of two proprietors registered on its certificate of title. But, for all the reasons I have recounted in this section of my judgment, that registration inadequately records the position as between the parties. And, distinctly from the position under prior legislation,16 the registration does not give a co-owner any right to division or sale.

16     Holster v Grafton (2008) 9 NZCPR 314 (HC) at [39], citing Fleming v Hargreaves [1976] 1 NZLR 123 (CA) at 127.

[44]Notwithstanding s 339’s remedial nature, I will not make any such orders.

[45]   However, this proceeding has been brought seemingly in anticipation a right to sale and division exists. That is reflected by Ho Shing’s initial focus on his co- ownership of the Flat Bush property, and consequent resort to the originating application procedure on Ho Cheong’s refusal to permit realisation of his share. Constructive determination of the parties’ interests also has been confounded by reliance solely on the parties’ own evidence, rather than including such as may be proffered by third parties with knowledge of the property acquisitions’ constituent arrangements, and by the absence of comprehensive and comprehensible evidence of the parties’ financial dealings, whether exclusively on the properties or including for the extended family.

[46]   It would be unjust and impractical if this judgment was taken to estop any of the parties from seeking s 339 orders anew, even without any material change in circumstances, in adequately evidenced ordinary proceedings. I therefore will reserve all parties leave to do so.

[47]   My decision should not be understood as upholding any party’s ultimate contention for success or failure in this proceeding. In particular, Ho Cheong cannot expect to retain Ho Shing indefinitely as  co-owner  of  the  Flat  Bush  property.  And neither have I held Chi Na has an equitable interest in the property.

Result

[48]   Ho Shing’s 12 July 2019 originating application for orders under s 339 of the Property Law Act 2007 is dismissed. Each party has leave to issue ordinary proceedings seeking relief under that provision in relation to the co-ownership of the Flat Bush property.

Costs

[49]   In my preliminary view, no party can claim comprehensively to be successful in the proceeding, and the family context of the proceeding also justifies avoiding

continued grounds for dispute, such that costs should lie where they fell – that is, legal costs be borne by the party incurring them.

[50]   If that is not accepted, or the parties cannot otherwise agree, I reserve costs for determination on short memoranda of no more than five pages – annexing a single- page table setting out any contended allowable steps, time allocation, and daily recovery rate – to be filed and served by Ho Cheong and Chi Na within ten working days of the date of this judgment, with any response and reply to be filed within five working day intervals after service.

—Jagose J