Hearing:	30 July 2014
Court:	O’Regan P, Wild and French JJ
Counsel:	L A Andersen and J L Bates for Appellant D R Tobin for First and Third Respondents No appearance for Second Respondent
Judgment:	7 August 2014 at 11.30 am

JUDGMENT OF THE COURT

AThe appeal is allowed.
BThe judgment of the High Court is set aside. Judgment is entered against the respondents jointly and severally in favour of the appellant in the sum of $37,500.
CThe cross-appeal is dismissed.
DThe respondents are to pay the appellant’s costs as for a standard appeal on a band A basis with usual disbursements.
EThe costs orders made by the High Court on 26 June 2014 are quashed. Costs in the High Court are to be re-determined by that Court in light of this judgment.

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REASONS OF THE COURT

(Given by Wild J)

Introduction

This appeal and cross-appeal are from a judgment Panckhurst J delivered on 5 December 2013.[1] The main issue is whether the Judge erred in declining to impose a constructive trust on a property owned throughout by a trust.
[1]Murrell v Hamilton [2013] NZHC 3241 [High Court judgment].
Three points are taken on the cross-appeal. They challenge, in different respects, the Judge’s finding that the appellant had made a valuable contribution to the property in issue and the Judge’s quantification of that contribution.

The facts

The appellant, Ms Murrell, and the first respondent, Mr Hamilton, began a relationship in early 2002.
In January 2004 they moved into a house under construction in Devon Street in Arrowtown. The house was being built by the building company operated by Mr Hamilton, who was himself a builder. The property was owned by the W E Hamilton Family Trust (the Trust). This was Mr Hamilton’s family trust.
Over the next three years construction of the house was finished and the section landscaped. Based on photographs taken some time after the event, Panckhurst J observed “it is apparent that the property was finished and presented in an attractive manner”.[2]
[2]At [28].
In February 2007 Ms Murrell and Mr Hamilton moved to Dunedin and the Arrowtown property was rented. It was sold about two years later, in March 2009, for $573,418.
Following her separation from Mr Hamilton in February 2010, Ms Murrell brought the claim determined by Panckhurst J in the judgment under appeal, to which we now turn.

The judgment under appeal

Panckhurst J set out the now well established elements of a constructive trust claim in the relationship property context:[3]
(a)       contributions, direct or indirect to the property in question;
(b)       the expectation of an interest in the property;
(c)       that such expectation is reasonable; and
(d)that the defendant should reasonably expect to yield the claimant an interest.
[3]At [15]. The Judge drew these from this Court’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 Murrell v Hamilton

Details

AGLC: Murrell v Hamilton [2014] NZCA 377
Case: [2014] NZCA 377
Decision Date: 7 August 2014 at 11.30 am

CaseChat Overview and Summary

In Murrell v Hamilton, the Court of Appeal of New Zealand reviewed a case concerning a constructive trust claim brought by Jane Murrell against William Hamilton and others regarding a property in Arrowtown. Murrell and Hamilton had lived together in a house owned by the W E Hamilton Family Trust, which was operated by Hamilton. After their separation, Murrell sought a constructive trust on the property, arguing she had made significant contributions to it and had a reasonable expectation of an interest in it. The High Court dismissed her claim, finding the property was owned by the Trust throughout, and thus the claim against the Trust could not proceed.

The Court of Appeal found that Murrell had indeed made valuable contributions to the property, and that it was unconscionable for the trustees to deny her claim. The Court held that the property's ownership by the Trust did not preclude a constructive trust, as long as the trustees had stimulated her reasonable expectations of an interest in the property. Given the circumstances, the Court found that both trustees had effectively allowed Hamilton to control the property, making it unconscionable for them to deny Murrell's claim. The Court of Appeal allowed the appeal, set aside the High Court's judgment, and entered judgment in favour of Murrell for $37,500, representing a 15 per cent interest in the property. The cross-appeal by the respondents was dismissed, and the Court ordered that the respondents pay Murrell's costs of the appeal. Additionally, the Court quashed the costs orders made by the High Court and directed that they be re-determined.

Orders