Morrison v Fibbes

[2017] NZHC 128

IN THE HIGH COURT OF NEW ZEALAND

TAURANGA REGISTRY

CIV 2016-470-000166

[2017] NZHC 128

UNDER

Section 145A of the Land Transfer Act 1952

BETWEEN

FAY ELAINE MORRISON BY HER LITIGATION GUARDIAN MANDY FRANCES FIBBES

Applicant

AND

DIANA KATHLEEN FIBBES

Respondent

Hearing:

13 February 2017

Appearances:

S Carey for the Applicant

D K Fibbes the Respondent in person

Judgment:

13 February 2017

ORAL JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

F E MORRISON BY HER LITIGATION GUARDIAN M F FIBBES v D K FIBBES [2017] NZHC 128 [13

February 2017]

[1]    The respondent (Diana) is the registered owner of a property at 20B Kane Road, Papamoa (the property). A caveat was registered over that property by Diana’s sister Mandy, in the name of their mother (Ms Morrison). Mandy is Ms Morrison’s litigation guardian. Ms Morrison’s health is not good.

[2]    Interim orders have been made by the Court on 8 November 2016 sustaining the caveat until after the determination of the present application.

[3]    Ms Morrison’s money was used to buy the property. It is not in dispute that approximately $305,000 of Ms Morrison’s money was used, of which $166,000 had been returned to her by Diana. Therefore Ms Morrison paid approximately $139,000 of the purchase price of the property.

[4]    It is the case for Ms Morrison that Diana took the funds from her bank account without authority while at the time holding Ms Morrison’s Enduring Power of Attorney. Diana disputes that claim. She says the money used to buy the property was a gift from Ms Morrison.

[5]    Ms Morrison denies the funds were gifted to Diana but were to be used to purchase the property with the agreement that Ms Morrison would own a share commensurate with her contribution to the purchase price.

[6]    Therefore it is submitted Ms Morrison is the beneficiary of a constructive trust and that she was as a result entitled to lodge a caveat.

[7]    The thrust of Diana’s submissions is that Ms Morrison was of sound mind at that time when her funds were used to assist with the purchase of the property. Diana submits that at that time “the EPA (Enduring Power of Attorney) was not invoked”. Further because at that time Ms Morrison was living with Diana and Mr Fibbes the father of Diana and Mandy she says the evidence of her and Mr Fibbes is to be preferred over any evidence suggesting Ms Morrison’s gesture to help fund Diana’s purchase was other than a gift.

[8]    The affidavit evidence provided by Diana and Mr Fibbes is strongly critical of claims contrary to theirs. Diana submits that her evidence shows that it “is patently clear that no beneficial interest or other caveatable interest ever existed as a ground for the caveat”.

[9]    On behalf of Ms Morrison it is submitted that claims of a beneficial interest in the property arise in two ways:

(a)Because it is the evidence of both Mandy and Mr John Gray a solicitor that Ms Morrison told them separately that she had not authorised the removal of her money from her bank account by Diana; and

(b)A constructive trust arose because Diana agreed that Ms Morrison owned (and owns) a share in the property, which share because it has not been registered, remains a beneficial interest.

[10]   The Court will usually review competing evidential claims briefly only. It is not this Court’s purpose to reach any conclusion on those differences because today’s hearing is not suited for that purpose – and nor should it be.

Factual overview

[11]   It is not in dispute that the funds in question were withdrawn from Ms Morrison’s bank account to purchase the property when Diana was Ms Morrison’s attorney. Diana forcefully resists claims that the money was taken without her mother’s authorisation. Mr Carey’s submission is that the consistent evidence of Mandy and Mr Gray as to Ms Morrison’s contrary view creates at least a reasonably arguable case that the funds were used without prior consent. Usually, a reasonably arguable case is sufficient to warrant a caveat to stay in place.

[12]   Diana provides no evidence other than her own claims of a gift to her. There is nothing in writing confirming a gift or providing evidence of a formal arrangement.

[13]   Diana claims the support of her father in this proceeding. While his recent evidence firmly supports Diana’s position, earlier written statements he made to

Mandy Fibbes provides reason for doubt. By that earlier evidence there is reason to believe he may not have been aware of any gifting arrangement at the time.

Conclusion

[14]   Ms Morrison’s application is made under s 145A of the Land Transfer Act 1952. The claim of a beneficial interest in property need only show that the case is reasonably arguable.1

[15]Summary removal of a caveat is proper only where:

It is patently clear that there was no valid ground for lodging the caveat in the first place or patently clear that the interest… no longer existed.2

[16]   A caveat should not be removed in summary proceedings if there is a dispute of fact. The summary process is not suitable for the determination of questions of fact.

[17]   Issues of factual disputes are a feature of this case. Usually and appropriately a caveat will be sustained until determination of those factual differences by an appropriate hearing process.

[18]   Diana is firm in her commitment to her account as is, presently, her father by his evidence in support. Regardless, the truth of the matter is far from clear and should be left for determination upon a proceeding brought by Ms Morrison to recover her claim of a contribution or an interest itself in the property that her funds were unquestionably used for.

Result

[19]Ms Morrison’s application to sustain her caveat is granted.

[20]   However, that caveat will remain until 28 April 2017 and shall lapse at 4:00pm on that date unless Ms Morrison has sooner filed a proceeding in the High Court in support of her claim of an interest in the property.

1 Sims v Lowe [1988] 1 NZLR 656 at 660 CA.

2 Mall Finance & Investment Co Ltd v Slater [1976] 2 NZLR 685 at 686.

[21]   Costs are reserved for determination upon any application made after 28 April 2017.

Associate Judge Christiansen