Parkins v Parkins

[2022] NZHC 2257

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

I TE KŌTI MATUA O AOTEAROA WHAKATŪ ROHE

CIV-2021-442-0041

[2022] NZHC 2257

UNDER

Section 60 of the Senior Courts Act 2016 and Rule 20.22 of the High Court Rules 2016

IN THE MATTER

of an intended appeal against a decision of the High Court in the Estate of the late Morris Ronald Parkins

BETWEEN

GRANT TREVOR PARKINS

Appellant

AND

STEVEN MORRIS PARKINS AND REECE DARREN PARKINS

Respondents

Hearing:	29 August 2022
Appearances:	R Armstrong for the Appellant G J Praat for the Respondent
Judgment:	6 September 2022

JUDGMENT OF COOKE J

(Declining leave to appeal)

[1]    By application dated 28 April 2022 the appellant applies for leave to appeal to the Court of Appeal from the judgment of this Court.1 In that judgment Gendall J dismissed the appellant’s appeal from the District Court where his claim for a constructive trust arising out of contributions he had made to a family property at Oyster Bay in the Marlborough Sounds (the Oyster Bay property) was dismissed.2

1      Parkins v Parkins [2022] NZHC 606.

2      Parkins v Parkins [2021] NZDC 11821.

PARKINS v PARKINS [2022] NZHC 2257 [6 September 2022]

[2]    The Oyster Bay property had been owned by the appellant’s parents who died in 1999 and 2010. When the appellant’s father died in 2010, he and his two brothers, who are the respondents, benefitted from their father’s estate in equal shares. The appellant alleged that his significant contributions to the Oyster Bay property entitled him to a greater share in this property by way of a constructive trust. The property was the family batch, representing a little under half of the overall value of the estate.3

[3]    In addition, the appellant applies for leave to file further evidence on the proposed appeal in the form of an affidavit from the appellant, although Mr Armstrong accepted that this application was more sensibly dealt with later by the Court of Appeal if leave was granted.

Approach to the grant of leave

[4]    Pursuant to s 60 of the Senior Courts Act 2016 leave is required to appeal from a decision of the High Court from an appeal in the District Court. Such applications for leave are dealt with under r 20.22 of the High Court Rules 2016. In Waller v Hider the Court of Appeal outlined the test for leave in the following way:4

The appeal must raise some question of law or fact capable of bona fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the cost and delay of the further appeal …

[5]    In 2008 the Court of Appeal observed that it may become necessary to restrict the test further to stop a steady increase in the number of second appeals.5 There has been no explicit recalibration of the test following these suggestions. The existing test nevertheless encompasses the appropriate assessment, giving rise to questions of proportionality. In short, there must be sufficiently compelling reasons for a second appeal.

3      The appellant does not agree with the characterisation of the property as a family batch, but nothing turns on that.

4      Waller v Hider [1998] 1 NZLR 412 (CA) at 413.

5      Downer Construction v Silverfield Developments [2008] 1 NZLR 591 at [36]–[37]; and Chief Executive of Land Information New Zealand v Luke [2008] NZCA 43 at [18].

Proposed appeal

[6]    It is accepted that both the District Court and High Court correctly identified the requirements for the establishment of a constructive trust. They are that:6

(a)there are contributions, direct or indirect, to the property in question;

(b)there is reasonable expectation, sourced in those contributions, of an interest in the property; and

(c)it must be reasonable to expect the legal owner to yield an interest in the property.

[7]    These elements reflect the overall concept that it is unconscionable for the legal owner to deny an interest to the claimant. Here both the District Court and High Court found that the appellant did make direct and indirect contributions to the Oyster Bay property.7 But both Courts concluded that those contributions did not create an expectation of an interest in the property greater than that of the appellant’s two brothers, and that it was not unreasonable for the executors of the father’s estate to fail to yield interest in the property.

[8]    The key reason for this was the family context in which the contributions were made by the appellant. He made what can be considered to be substantial contributions to this property. He assisted his father building it. But the fact that a son substantially assists a father in building a property does not give rise to a constructive trust for the son in what is built. The family context is significant. The appellant and his siblings were likely to inherit this property in any event. This is reflected in some of Gendall J’s reasons why a constructive trust did not arise:8

(h)Grant confirmed that the work at the Property he was doing in driving bulldozers, working with the quad bikes and the like, was highly enjoyable to him and quite different to his work responsibilities as an engineer. Before the District Court he confirmed, when asked as to his motivation for his contributions to the Property, that he “loved doing it”. The Property and its development, it seems, was always at the time

6      See Blumenthal v Stewart [2017] NZCA 181 at [12].

7      Parkins v Parkins, above n 2, at [100]; Parkins v Parkins, above n 1, at [37].

8      Parkins v Parkins, above n 1, at [44(h)–(j)].

regarded as Morris’ “baby” and his pride and joy. I am satisfied here that neither Grant nor his brothers had any actual expectation that Morris would make any other provision for them in relation to the Property or adjusting distributions from his estate than what he had left in his simple 1980 will. Indeed, Grant confirmed in his evidence that he was not surprised at all by the fact his father had left his estate equally to the three brothers. That in itself might seem somewhat surprising, given Grant’s contention that his expectation of a constructive trust interest in the Property was a reasonable one, as was the fact that Morris or his estate should reasonably yield that interest.

(i)Reece in his evidence before the District Court indicated that at one point he had encouraged Grant to get something in writing from Morris to recognise his extra contributions to the Property. Reece did say he never expected Morris would provide this for Grant, and later it seems Reece did “change his tune” somewhat when Grant commenced these proceedings. Grant too never expected this to occur and that might well explain why he never asked Morris for such an acknowledgement.

(j)While Judge Tompkins was concerned to note what he saw as countervailing benefits which Morris and Rosalie in their lifetime had provided to Grant over and above those provided to his brothers, in fact it was all the circumstances I have noted above that led Judge Tompkins in the District Court to find that yielding a greater interest in the Property to Grant was not what might reasonably be deemed to have been intended, nor is it what could reasonably have been expected.

[9]    In his detailed submissions in support of leave Mr Armstrong identified a number of detailed reasons why the District Court and High Court had failed to properly identify the significant contributions that the appellant had made, or reasons why the contributions that his brothers had made had been overestimated. Whilst these are challenges to the District Court’s factual findings, I accept that they could still provide a basis to advance a general appeal. But I do not address those arguments in any detail as they do not address the key reason why the claim for a constructive trust failed.

[10]   The property was owned by the parents, and the appellant contributed to it in the context of his familial relationship. The appellant had an expectation that he and his brothers would inherit this property in due course along with the other property belonging to their parents. The contention that a constructive trust arose because he assisted in building the place in the Sounds where the family expected to spend time is unrealistic in these circumstances. This is reflected in two inter-related considerations.

[11]   First, the appellant had an expectation that the property in question would pass to him and his brothers, in whole or in part, by way of inheritance. So he was contributing to a property that he had an interest in in any event. The fact that the brothers inherited the assets of the estate in equal shares appears to have accorded with their expectations. There is a statutory regime under the Family Protection Act 1955 to address the situation where family members do not receive property in accordance with their expectations. It is not uncommon for children to claim that their parents had an obligation to leave them more in the circumstances, including because of their greater contributions. Here the appellant contributed to a particular item of property in a tangible way — by assisting in constructing it, and providing other direct and indirect financial and other contributions to it. Indirect contributions can also give rise to an interest in a property.9 A broad category of contributions can be so recognised under the Family Protection Act. A child might expect to receive at least 10 percent of their parents’ estate, although sometimes successful claims under the Family Protection Act have been higher, including because of greater contributions.10 But both the expectation that a child has in relation to their parents’ property, and the statutory regime that operates as a check on a will-maker’s freedom, give effect to the reasonable expectation that a child can have, including when they have made contributions to their parents’ property. No such claim was made here, and I understood Mr Armstrong to accept that there could be no basis upon which a Family Protection Act claim could have been upheld in the appellant’s favour.

[12]   The second related point is that the appellant has made it clear that his contributions to the Oyster Bay property gave rise to an institutional constructive trust as to only 25 per cent of the property. The claim was presented on the basis that the appellant was entitled to 25 per cent under the constructive trust, and the remaining 75 per cent is equally shared between the three brothers by way of inheritance. But the appellant has effectively received a 33 per cent beneficial interest in this property by way of inheritance. So he has received an interest that is greater than the interest he claims an entitlement to. I asked Mr Armstrong in oral argument whether he accepted that, had the appellant’s father left the appellant 25 per cent of this property and the

9      Lankow v Rose [1995] 1 NZLR 277 (CA).

10     Cartwright v Joseph [2018] NZHC 2383 at [33]–[34]; Chambers v Chambers [2015] NZHC 583 at [114]–[115]; Brosnahan v Meo [2021] NZHC 79.

remaining 75 per cent to charity with nothing to his two brothers, the appellant would have no claim. He did so. With respect that demonstrates the artificiality of the claim. It is advanced because of the relative benefits that each of the siblings have received under their father’s estate. So it is really an argument about the relative entitlements the brothers inherited under the estate rather than a claim that the appellant has been deprived of a 25 per cent interest in the property in an unconscionable way.

[13]   Mr Armstrong responded by arguing that the suggestion that the appellant had inherited a greater interest in the property than the interest contended for had not been squarely raised in the District Court or High Court. I do not accept there is any substance to that point. I see this factor as being a ramification of the key conclusion reached by both Courts — that the relevant circumstances did not require the executors to yield a greater interest to that which the appellant received by way of inheritance.

[14]   These points are illustrated by the emphasis the appellant places on the view that one of his brothers at one stage accepted that was fair for him to get a greater share in this property. That brother suggested that he approach his father about this when he was still alive. By itself this factor does not have the significance placed on it by the appellant — the fact that one of the brothers once thought it was fair the appellant have a greater share in this property is no more relevant than his later view that he should not. But more importantly the appellant could have taken up the suggestion and asked his father for a greater share while he was alive. But he did not do so. He has only made this claim, and brought these proceedings, after his father had died. This is long after the constructive trust is said to have arisen. Had a request been made and his father declined it, and the appellant brought these proceedings asserting the 25 per cent interest while his father was alive, it is difficult to imagine he could have received more than the 33 per cent that he has currently inherited. His father would have had no obligation to leave the balance of the estate equally to the three brothers. A testator may leave their property as they think fit, subject to the obligations recognised by the Family Protection Act.

[15]   Mr Armstrong did not identify any authority supporting his claim for a constructive trust arising when children make contributions to parental assets. He argued that this demonstrated that the claim involved a novel point that warranted

consideration further on appeal. I nevertheless accept that a constructive trust could arise in some situations notwithstanding the family context. For example in Stratulatos v Stratulatos a son and his wife moved into his mother’s house and made substantial improvements to it.11 Unfortunately the son died and the wife was deprived of any interest. In those circumstances the Court awarded the wife, in her own right as executor of her husband’s estate, a 25 per cent interest in the property by way of constructive trust. The Court held it was unconscionable for the wife to be left without an interest in the property to which she and her husband had made substantial contributions. But the need for a constructive trust arose because the son’s death had eliminated the familial expectations that the son had.12 That is not the case here as the appellant has inherited a 33 per cent interest.

[16]   In any event the test for the grant of leave involves assessing whether any point of importance outweighs the cost and delay of a further appeal. I accept that the appellant’s point is a novel one. But even if there was an argument with some prospect of success it does not outweigh the cost and delay of a further appeal. Mr Praat contended that the value of this property was approximately $518,000, and if the appellant  succeeded  in  his  claim  his   interest   would   increase   by   $86,330.  Mr Armstrong did not accept these calculations, but accepted that the case would not be worth more to the appellant than approximately $100,000. The overall value of the estate is estimated at being no more than $1,200,000.

[17]   The claim involves a comparatively modest amount. It does not justify a second appeal. The cost of this litigation is eating away at the assets of the estate. It also delays the finalisation of the estate. It no doubt has adverse implications emotionally and for family relations, as well as financially. In my view it is time to bring the litigation to an end. I agree with the conclusions reached by Judge Tompkins and Gendall J. The prospects of success of any appeal are low in my view. The possible point of principle identified, and the amount at stake, does not warrant the cost and delay of a further appeal.13

11     Stratulatos v Stratulatos [1988] 2 NZLR 424 (HC).

12     See at p. 432 at (3).

13     I note that the proceedings have required two hearings in the District Court as a consequence of the unfortunate death of Judge Christiansen.

[18]   For these reasons the application for leave to appeal is dismissed. The respondents will be entitled to costs. My preliminary view is that costs should be awarded to the respondents on a 2B basis. If this is not agreed I will receive memoranda (no more than three pages plus a schedule) to be filed and served by the respondents within 10 working days, and responded to by the appellant within a further 10 working days.

Cooke J

Solicitors:

A R Armstrong Lawyer, Christchurch for the Appellant Knapps Lawyers, Nelson for the Respondent