Lobb v Symons
[2024] NZHC 1569
•14 June 2024
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2023-404-003037
[2024] NZHC 1569
BETWEEN BLAIR MARSTON LOBB
Applicant
AND
ALISON JILL ELIZABETH SYMONS, GRAHAM MURRAY SYMONS and YOUNG + CARRINGTON TRUSTEES
(2016) LIMITED as trustees of the SYMONS FAMILY TRUST
Respondents
Hearing: 20 May 2024 Appearances:
B M Lobb in Person
V Crawshaw KC / G G Edwards for the Respondents
Judgment:
14 June 2024
JUDGMENT OF ASSOCIATE JUDGE GARDINER
This judgment was delivered by me on 14 June 2024 at 2.00 p.m. pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date.......................................
Solicitors:
Morris Legal, Auckland
V Crawshaw KC, Auckland
LOBB v SYMONS [2024] NZHC 1569 [14 June 2024]
Introduction
[1] These proceedings arise out of the separation of Blair Lobb and his ex-wife, Alaina Lobb, who is the daughter of the first-named respondent, and step-daughter of the second-named respondent.
[2] Mr Lobb lodged a caveat against the title of a property at 168 Paritai Drive, Orakei (Paritai Drive property) owned by the respondents as the trustees of the Symons Family Trust (SF Trust). The trustees applied to lapse the caveat.
[3] Mr Lobb now applies to sustain the caveat on the basis that the trustees of the SF Trust hold the property on constructive trust for him because of direct and indirect contributions he has made to the property.
[4] The trustees oppose the application on the basis that Mr Lobb has not made any contributions to the Paritai Drive property, there was never a reasonable expectation that he would have an interest in the property, and it is not reasonably arguable that the SF Trust should reasonably expect to yield to Mr Lobb any interest in the property.
[5] The issue for the Court to determine is whether Mr Lobb has an arguable case that his caveat ought to be sustained based on a constructive trust.
Background facts
[6] The SF Trust was settled by deed dated 11 May 2001. The Surrey Trust is the sole beneficiary of the SF Trust. The Surrey Trust was also settled by deed dated 11 May 2001. The original beneficiaries of the Surrey Trust included spouses and partners of the children of Alison and Graham Symons. By deed dated 20 March 2020, spouses and partners were excluded as beneficiaries of the Surrey Trust.
[7] On 18 February 2013, Mr Lobb settled the BML Trust. On 28 March 2013, the BML Trust purchased a property at Remuera Road.
[8]Mr Lobb and Ms Lobb met in around October 2013.
[9]On 22 November 2013, the Alaina McKee Trust was settled.
[10] On 29 November 2013, the Alaina McKee Trust purchased a property at 12 Purchas Hill, Stonefields (Purchas Hill property) with Ms Symons (Ms Lobb’s mother). Ms Symons contributed to the purchase price of the property and was a co- owner as to a two-fifths share, with the Alaina McKee Trust owning a three-fifths share. Ms Lobb and Mr Lobb had been dating for around one month at this time and Mr Lobb was not involved in the transaction.
[11] Mr Lobb and Ms Lobb began living together in around January 2014. They were married in March 2015.
[12] On 21 December 2016, Ms Lobb and Mr Lobb purchased the Purchas Hill property from Ms Symons and the Alaina McKee Trust. There is a factual dispute as to why this transaction took place and at whose instigation. Mr Lobb says that he agreed to buy the property with Ms Lobb and have the BML Trust guarantee the mortgage to help Ms Symons and the SF Trust who were experiencing cashflow difficulties at the time. Mr Symons refutes that, saying that at the time Ms Lobb was on maternity leave and could not secure a mortgage in her name alone. Mr Symonds says his understanding was that Mr Lobb suggested he and Ms Lobb instead purchase the property in their joint names.
[13] The purchase price of $1,450,000 was funded by a mortgage in both Mr Lobb and Ms Lobb’s names of $1,018,000 guaranteed by the BML Trust, together with a loan from the Alaina McKee Trust of $432,000. An amount of $89,000 was paid to Ms Symons on settlement. Mr Symons’ evidence is that this figure was calculated based on the contributions Ms Symons had paid towards the mortgage from 29 November 2013 to 21 December 2016 (around $30,000 per year). Mr Lobb disputes that this was the basis for the $89,000. He asserts that the transfer to Ms Symonds was a “lifeline” to her as the family was in financial difficulty, or alternatively that he was “blackmailed” into providing financial support. Mr Lobb claims that he expected to be repaid, either directly or through the Symons Family Trust.
[14] In July 2013, the BML Trust purchased a property at 10 Lingarth Street, Remuera (Lingarth Street property). This property became Ms Lobb and Mr Lobb’s family home.
[15] On 8 May 2019, Ms Lobb and Mr Lobb sold the Purchas Hill property. The net proceeds from the sale of the Purchas Hill property were applied to reduce the mortgage against the Lingarth Street property (owned by the BML Trust).
[16]In September 2021, the SF Trust purchased the Paritai Drive property.
[17] Ms Lobb does not have an interest in the Paritai Drive property other than an indirect beneficial interest as one of the discretionary beneficiaries of the Surrey Trust, which is the sole beneficiary of the SF Trust.
[18] Mr Lobb and Ms Lobb separated on 1 October 2021. Ms Lobb moved out of the Lingarth Street property into the Paritai Drive property on 10 October 2021. Ms Lobb pays $4,000 per month to the SF Trust to rent the Paritai Drive property. She also pays outgoings such as water, electricity and internet.
[19] Ms Lobb and Mr Lobb have not yet settled the division of their relationship property. In that context, Ms Lobb claims an interest in the Lingarth Street property based on a constructive trust. She lodged a caveat against the Lingarth Street property on 30 September 2022 and filed proceedings in this Court claiming a constructive trust.
[20] In response to Mr Lobb’s application to lapse the caveat against the Lingarth Street property, Ms Lobb applied to sustain the caveat. That application was resolved by consent, the caveat remaining in place.
Legal principles
Caveats
[21] As the Court of Appeal recently affirmed in Green & McCahill Holdings Ltd, Ara Weiti Development Ltd, an order for the removal of a caveat should only be made
if it is patently clear that the caveat cannot be maintained. The proper test is whether a claim is arguable or not.1
[22] The principles upon which the jurisdiction to remove a caveat is to be exercised are well settled:
(a)The onus is on the caveator to show a reasonably arguable case for the interest claimed.2 If the caveator does not establish a reasonably arguable case, the caveat must be removed or allowed to lapse.3
(b)Disputed facts cannot be determined on applications to remove a caveat.4 To order a caveat to lapse, it must be "patently clear" the caveat cannot be maintained because there was no ground for lodging it at the time it was registered, or because such ground no longer exists.5
(c)Even if the caveator establishes a caveatable interest, the Court retains a residual discretion to remove the caveat.6 That discretion must be exercised cautiously.7 The Court must be "completely satisfied" that the legitimate interests of the caveator will not be prejudiced.8
Institutional constructive trust
[23] Mr Lobb claims to have a reasonably arguable equitable interest in the property in proportion to his contributions as the beneficiary of a constructive trust.
[24] To establish a constructive trust based on contributions to the acquisition or improvement of the property, a claimant must demonstrate that they have:
1 Green v McCahill Holdings Ltd v Ara Weiti Development Ltd [2022] NZCA 218, (2022) 23 NZCPR 259 at [82] and [98].
2 Sims v Lowe [1988] 1 NZLR 656 (CA) at 660.
3 Bank of New Zealand v McLachlan HC Christchurch CIV-2009-409-2545, 7 December 2009 at [15].
4 Lindsay v Noble Investments Ltd [2015] NZCA 588 at [12].
5 At [15].
6 Pacific Homes Ltd (in rec) v Consolidated Joineries Ltd [1996] 2 NZLR 652 (CA) at 656.
7 At 656.
8 At 656.
(a)made contributions, direct or indirect, to the acquisition or improvement of the property;
(b)an expectation of obtaining an interest in the property;
(c)that such an expectation is reasonable; and
(d)the legal owners can reasonably be expected to yield interest in that property.9
[25] Mr Lobb details the contributions he claims to have made to the Paritai Drive property in his affidavit filed in support of his application.10
Does Mr Lobb have an arguable beneficial interest in the Paritai Drive property?
Mr Lobb’s claimed interest
[26] Mr Lobb’s alleged contributions largely relate to the Purchas Hill property, specifically Mr Lobb and Ms Lobb’s purchase of the Purchas Hill property from Ms Symons and the Alaina McKee Trust in December 2016. As noted, the purchase price was funded by a mortgage in Mr Lobb and Ms Lobb’s names of $1,018,000, guaranteed by the BML Trust, together with a loan from the Alaina McKee Trust of
$432,000.
[27] Mr Lobb claims that he was pressured to purchase the Purchas Hill property at an inflated price.11 He complains that he and Ms Lobb made a loss on the property when they sold it some years later for $1,326,533. The result is a debt of $430,000 owed by him and Ms Lobb to the Alaina McKee Trust. It is clear that Mr Lobb’s real concern is that he and Ms Lobb overpaid for Purchas Hill to the benefit of Ms Symons and the Alaina McKee Trust.
[28] Mr Lobb claims to have contributed to the Paritai Drive property by buying Purchas Hill, in three ways. First, he claims that the $89,000 paid to Ms Symons from
9 Lankow v Rose [1995] 1 NZLR 277 (CA) at 294.
10 Affidavit of Blair Lobb, dated 14 March 2024.
11 $1.45 million, compared to the government valuation of $1 million.
the settlement funds was “repurposed” to purchase the Paritai Drive property. Second, he claims to have contributed to the $455,000 capital gain made by the SF Trust or Ms Symons on Purchas Hill. Third, by reducing Ms Symons’ debt and therefore enabling her to borrow to purchase the Paritai Drive property.
Assessment
[29] Mr Lobb has not made out an arguable case to a beneficial interest in the Paritai Drive property.
[30] First, there is no evidence that the $89,000 received by Ms Symons on the sale of Purchas Hill to Mr Lobb and Ms Lobb was redirected to the SF Trust and/or used to purchase the Paritai Drive property.
[31] To establish a reasonably arguable case for a caveat there must be evidence tending to prove the facts relied upon. Mere assertion is not enough. If there is no evidence to prove the facts, the caveator will not have made out a reasonably arguable case for those facts.12
[32] The SF Trust had no financial interest in the Purchas Hill property. The fact that the SF Trust was the original purchaser (later nominating Ms Symons) and the Alaina McKee Trust had advanced funds to pay the deposit for this property is irrelevant. The deed of acknowledgement of debt for $432,000 was between the trustees of the Alaina McKee Trust as lender and Mr Lobb and Ms Lobb as borrowers. Ms Symons and the SF Trust were not a party to this deed.
[33] Mr Symons’ evidence is that the Paritai Drive property was purchased entirely with a bank loan from TSB Bank dated 16 September 2021 which provided total lending facilities of $3,150,000.13 He has provided evidence showing that funds from the TSB loan were used to settle the purchase.14 I note that there is no evidence verifying the source of funds for the deposit.
12 Body Corporate 329331 v Escrow Holdings Forty-One Ltd [2017] NZHC 754 at [8]–[9].
13 Affidavit of Graham Symons, dated 2 February 2024, exhibit E.
14 Affidavit of Graham Symons, dated 2 February 2024, exhibit F.
[34] Fundamentally, there is no evidence tending to show that the $89,000 paid to Ms Symons was used by the SF Trust to acquire the Paritai Drive property some six years later. This allegation is pure speculation.
[35] Second, Mr Lobb’s allegation that Ms Symons or the SF Trust made a capital gain of $455,000 on Purchas Hill is incorrect. SF Trust did not own any part of the property. Ms Symons had a two-fifths share and she was paid only $89,000. It does not matter how that payment is characterised, or how the figure was arrived at. It is not disputed that this is the cash amount Ms Symons received. Again, there is no evidence that any of this $89,000 was used to purchase the Paritai Drive property.
[36] Third, Mr Lobb’s assertion that by reducing Ms Symons’ personal debt he enabled the SF Trust to borrow to purchase the Paritai Drive property is again speculative. There is no evidence to suggest that the Trust was able to secure the borrowing from TSB Bank because Ms Symons’ debt position was improved because of an $89,000 payment she received some six years earlier.
[37] Mr Lobb also appears to claim that Ms Lobb’s rental payments of $4,000 per month to the SF Trust for renting the Paritai Drive property are indirect contributions by him to the property. He refers to withdrawals of $9,000 he and Ms Lobb made from their joint bank account and asks the Court to infer that Ms Lobb has been using these funds to pay her rent and alleges this is an indirect contribution by him.
[38] There is no evidence about the funds Ms Lobb is using to pay the rent. She is working and it can just as easily be inferred that she is using her income to pay rent to SF Trust. In any event, if she used her share of relationship property to pay her rent, that is relationship property and not a contribution by Mr Lobb.
[39] Nor can child support payments made by Mr Lobb to Ms Lobb each week constitute a direct or indirect financial contribution to the Paritai Drive property. Mr Lobb is under a statutory obligation to pay child support and these payments do not qualify as a contribution giving rise to an equitable interest in the property.
[40] Finally, Mr Lobb is not a beneficiary of the SF Trust. Even if he were, a discretionary beneficiary does not have a beneficial interest in land owned by the Trust.15
[41] That is the end of Mr Lobb’s application. There is simply no evidence tending to show that he has made direct or indirect contributions to the acquisition or enhancement of the Paritai Drive property.
[42] Mr Lobb emphasises that he has sought discovery of the SF Trust’s records. He submits that without records about the $89,000 paid to Ms Symons and payment of the Paritai Drive deposit and purchase price, it is not possible to know whether he has made an indirect financial contribution.
[43] Mr Lobb’s claim to an interest in Paritai Drive is misconceived. To establish an equitable interest in the Paritai Drive property based on a constructive trust, he must show that he contributed to the property expecting to obtain an interest in the property (by virtue of those contributions), that such an expectation was reasonable, and that the SF Trust can reasonably be expected to yield an interest to him. I cannot see how Mr Lobb could possibly have expected to obtain an interest in the Paritai Drive property when he made the alleged contributions some six years before the SF Trust bought Paritai Drive. This is a legal flaw in Mr Lobb’s claim that cannot be remedied by discovery.
Result
[44]Mr Lobb’s application to sustain his caveat is dismissed.
[45] The SF Trustees apply for indemnity costs because Mr Lobb has been on notice since 1 December 2023 that he does not have a caveatable interest in the property.
[46] I did not hear from Mr Lobb on the application for indemnity costs. I therefore invite Mr Lobb to make any submissions on costs in a memorandum of not more than four pages, to be filed within 10 working days.
15 Rutherford v Rutherford [2015] ZNHC 878, [2015] NZAR 1303 at [18], citing Napier City Council v Residual Health Management Ltd HC Napier CIV-2004-441-35, 30 March 2004 at [20].
[47] As to the outstanding interlocutory applications by Mr Lobb for discovery, and by the SF Trust trustees for security for costs, these are now moot and are therefore are struck out.
Associate Judge Gardiner
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