Parmar v Govind
[2017] NZHC 1432
•26 June 2017
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2016-404-171 [2017] NZHC 1432
BETWEEN HETAL KANTI PARMAR
Plaintiff
AND
JAYENDRA LAL GOVIND Defendant
Hearing: 27-28 April 2017 Appearances:
J D Noble for the Plaintiff
A Kashyap for the DefendantJudgment:
26 June 2017
JUDGMENT OF GORDON J
This judgment was delivered by me
on 26 June 2017 at 3.30 pm, pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Date:
Solicitors: Boyle Mathieson, Waitakere City, Auckland
A Kashyap, Epsom, Auckland
PARMAR v GOVIND [2017] NZHC 1432 [26 June 2017]
Introduction
[1] Hetal Parmar and Roopesh Govind were married for seven and a half years. For the vast majority of that time, they lived with Roopesh’s parents, Jayendra and Nirmilla Govind, in their family home in Blockhouse Bay, Auckland (the property).1
They made a number of financial contributions towards the mortgage, rates and insurance, as well as to the day-to-day living costs of the household. Hetal, in particular, also assisted with household duties.
[2] Hetal has now filed proceedings seeking a declaration that Jayendra holds a share of the property on constructive trust for Hetal and Roopesh, reflecting their contributions to the property. Hetal seeks judgment against Jayendra in an amount to be determined, for the purpose of discharging this constructive trust. Jayendra opposes her claim.
[3] In order to succeed in her claim, Hetal must demonstrate that she and Roopesh made contributions, direct or indirect, to the property; that they had a reasonable expectation of an interest in the property; and that Jayendra should reasonably expect to yield an interest to Hetal and Roopesh. If Hetal is successful in proving her claim, it will be necessary to determine the sum which Jayendra should pay to Hetal and Roopesh to discharge the constructive trust.
[4] Hetal claims an interest on behalf of herself and Roopesh. If Hetal is successful in her claim, the judgment amount against Jayendra will form part of the relationship property to be divided between Hetal and Roopesh.
The parties
[5] Hetal and Roopesh were married in India on 20 December 2007. Shortly thereafter, Hetal accompanied her new husband back to New Zealand to live with his family. The couple have two daughters, who were born in 2010 and 2013
respectively. Hetal and Roopesh separated on 5 July 2015.
1 Because Roopesh Govind, his brother Nilesh Govind and their father Jayendra Govind all share the same surname it is convenient to refer to the parties by their first names.
[6] Jayendra is Roopesh’s father. He is elderly and is presently unemployed, although he has two properties in Fiji from which he derives a relatively modest income. Nirmilla is similarly elderly and unemployed. The couple have two sons, Roopesh and Nilesh, who live in New Zealand and three daughters who live overseas. Roopesh and Nilesh each gave evidence in support of Jayendra’s case.
The property
[7] The property is a four bedroom house located at 46 Donovan Street in Blockhouse Bay, Auckland. Jayendra purchased the property in or about June 2006 for the sum of $500,000. He is the registered proprietor.
[8] Jayendra provided $100,000 of the purchase price from his own funds. The remainder of the purchase price was funded by a mortgage of $400,000 to ASB Bank. The signatories to the mortgage were Roopesh, Nilesh and Jayendra. Jayendra accepted under cross-examination that the reason why Roopesh and Nilesh were parties to the mortgage was that he and Nirmilla did not have sufficient income to meet the mortgage repayments at the time of purchasing the property.
[9] Jayendra and Nirmilla have lived in the property since its purchase in 2006 along with Roopesh. Nilesh also lived there until he purchased his own home in
2011. Hetal moved into the property in April 2008, following her marriage to Roopesh. She and Roopesh shared one bedroom. Their daughters shared another bedroom. This arrangement continued until Hetal left the property on 5 July 2015.
[10] Valuation evidence given on Hetal’s behalf suggested that the property would have been valued at around $510,000 in July 2008, shortly after Hetal’s marriage to Roopesh. By July 2012 the value would have increased to an estimated $650,000 and as at 3 February 2017, the estimated value of the property was $1,300,000. Jayendra did not challenge the valuation evidence.
Applicable legal principles
[11] The leading case in New Zealand regarding constructive trusts arising from contributions to property is Lankow v Rose.2 The plaintiff and the respondent in that case had been in a de facto relationship. The plaintiff sought a declaration that property owned by the respondent was held on constructive trust for the plaintiff, in recognition of her contributions to the relationship.
[12] Each of the five judges sitting on the Court of Appeal delivered a separate judgment, broadly concurring in respect of the correct test to be applied when determining issues of this nature. The judgment of Tipping J is often cited:3
In order to be awarded a beneficial interest in property owned in law by the defendant, the claimant must first show some contribution, direct or indirect, to the property at issue. A contribution to the relationship will not qualify unless it is also, as will often be the case, a contribution to that property. This is not as restrictive an approach as it may appear. I will return to the ambit of qualifying contributions a little later.
The second thing the claimant must establish is that she expected an interest in the property. If, for any reason, she had no such expectation, a constructive trust cannot be imposed in her favour. Thirdly the claimant must show that her expectation of an interest was reasonable in the circumstances. The fourth step is for the claimant to show that the defendant should reasonably expect to yield her an interest. The fact the defendant is not willing to yield an interest or did not expect to have to do so is no bar to her claim if he should reasonably expect to do so. In that respect the Court stands as his conscience.
[13] In 2001 the Matrimonial Property Act 1976 was substantially amended and renamed the Property (Relationships) Act 1976. The amended Act is a code for determining relationship property issues and accordingly the question of a constructive trust does not arise between partners to a de facto relationship as it once did. However, the Act does not apply in respect of other family relationships, such as those between parents and children(-in-law). Contributions made to property or relationships of that nature may still provide a basis for the imposition of a
constructive trust.
2 Lankow v Rose [1995] 1 NZLR 277 (CA).
3 At 293–294.
Hetal’s position
[14] Hetal said that she and Roopesh made significant contributions towards the property in the time when they lived there: first, by way of regular contributions to the cost of the mortgage, rates and insurance; second, by way of lump sum capital contributions; and third, by way of domestic contributions to the running of the household.
Financial contributions
[15] Hetal said that she and Roopesh made financial contributions to the mortgage, rates and insurance on the property, as well as the cost of water, power, phone, internet and Sky TV (the utilities). These expenses increased over the course of the marriage as Nilesh left the household and Jayendra’s financial resources dwindled.
[16] Hetal gave evidence that between the date of the property’s purchase in 2006 and May 2011, the mortgage, rates and insurance costs were split three-ways with Jayendra, Nilesh and Roopesh (with Hetal, from April 2008) each paying one third. Roopesh (with Hetal, from mid-2008) and Nilesh each paid half of the utilities, while Jayendra and Nirmilla bought food for the household.
[17] Nilesh moved out of the home in May 2011. Hetal’s evidence was that from May 2011 until June 2014, she and Roopesh paid two thirds of the mortgage and all of the rates and insurance for the property. Jayendra paid the remaining third of the mortgage. Hetal and Roopesh also paid the full cost of the utilities, while Jayendra and Nirmilla continued to purchase food for the household.
[18] From June 2014, Hetal and Roopesh paid 100 per cent of the mortgage, rates and insurance until their separation in July 2015. Hetal said that Jayendra told her and Roopesh that he stopped paying the mortgage because he could no longer afford the repayments.
[19] Hetal said that she and Roopesh also made a number of lump sum payments to Jayendra and Nirmilla. Her evidence was that in 2012 she and Roopesh paid
around $190,000 into the mortgage account in lump sum amounts over and above the regular mortgage and rates payments. The total amount paid to Jayendra and Nirmilla in 2012 was $220,270 which substantially exceeded the amounts paid in surrounding years.
[20] On Hetal’s evidence, the total amount paid by Hetal and Roopesh into
Jayendra’s mortgage account from 2008 to 2012 was $362,967.
Domestic contributions
[21] Hetal said that she was the primary caregiver for the children during the period of her marriage to Roopesh. In the periods when she was working, Hetal said that she would get the children ready for day-care in the morning. Until she obtained her licence in late 2013, Jayendra would drive her, with the children, to day care. Jayendra would then pick the children up at 4.30 pm and look after them until Hetal or Roopesh returned from work at around 5.00 pm.
[22] Hetal acknowledged that Jayendra and Nirmilla had assisted with the children saying “they were a big help when it came to raising my daughters. They did a fair bit of things for my children and I’m thankful to them for it.” She said that Jayendra and Nirmilla also bought things for the children. On the other hand, Hetal said that every now and then she and Roopesh would give his parents $100 or $200 in return as well as gifts. One of those gifts was a trip to Canada in 2014 that all of Jayendra and Nirmilla’s children paid for.
[23] With regard to household chores, Hetal said that Nirmilla did most of the cooking, as she did not enjoy Hetal’s food. Jayendra did the lawn mowing, while Hetal did the dishes and vacuuming. Hetal and Nirmilla shared the general cleaning duties.
Expectation of an interest
[24] Hetal said that after she and Roopesh were married, they started saving money for their future. By 2012, they had saved up a significant amount of money
and could afford to buy a property. Hetal gave evidence, however, that if they had moved out:
Jayendra would not be able to afford to pay the mortgage and outgoings for
46 Donovan Street because of which we decided that we will keep contributing to this property, with an expectation that we would receive a
share in the property instead of buying another property of our own and
leaving the parents alone.
[25] She further said:
I would say looking at the property market around that time, it was, just sensible to buy a property and own a property rather than put money, leave the money in the loan account, just to have used the interest because the property prices were rising leaps and bounds, really high at that point in time and it was only just sensible to buy a property at that point in time and it was only just sensible to buy a property rather than put the money in a loan account, the only reason we would ever do – or ever leave the money in the loan account would, was if we had an interest in the property, not otherwise.
[26] Hetal said that in or about March 2012, she and Roopesh had a discussion with Jayendra and Nirmilla, in the course of which the participants explicitly agreed that she and Roopesh would receive an interest in the property. Hetal’s evidence was that she and Roopesh said something like: “We have been putting so much money into the property, can you leave something for us in the Will?” Thereafter, Jayendra and Nirmilla each changed their wills to provide that the property would be left to Roopesh upon their deaths, on the condition that Roopesh pay $50,000 to Nilesh.
[27] Hetal said that Jayendra affirmed their interest in the house in June 2014, when she and Roopesh became responsible for 100 per cent of the mortgage payments.
Jayendra’s position
[28] Jayendra did not accept that Hetal and Roopesh made any significant contributions to the property.
[29] Jayendra said it is accepted in Indian culture that sons will continue to live with their parents after marriage. Any daughters-in-law are considered to leave their families and become a part of their husband’s family. Accordingly, when Roopesh
married Hetal, Jayendra and Nirmilla welcomed her into their home. Nilesh, however, moved out of the family home when he married.
Financial contributions
[30] Between 2008 and 2015, Jayendra said, he made regular mortgage payments of $400 per week. This money was sourced from his employment with Green Rebel Grocery Store in New Lynn as well as various investments and savings. Nilesh and Roopesh were working full-time and made various payments by way of board, until Nilesh moved out of the property in 2011. Jayendra said this was consistent with an expectation in Indian culture that parents will look after their children, until the children become capable of looking after the parents themselves. Roopesh had also received significant funds from his parents to arrange his marriage in India, as well as assisting with the purchase of a car and his business.
[31] Jayendra denied that Roopesh and Hetal ever made any capital contributions to the property.
Domestic contributions
[32] With respect to domestic contributions, Jayendra said that his wife was responsible for most of the cooking and cleaning. He said that Hetal was barely employed and spent most of her time lazing around at home. Jayendra said that he and his wife found themselves taking full care and supervision of the children, including teaching them, bathing them, feeding them, playing with them, dropping them to and from appointments and walking them to and from day care, as Hetal did not have a driver’s licence. Jayendra said that Hetal’s laziness was also a significant factor which prevented Roopesh and Hetal from leaving the property to set up a house of their own.
Expectation of an interest
[33] Jayendra denied making any representation that Roopesh and Hetal would receive an interest in the property. His intention was that the whole of the property should pass to his wife when he died. Jayendra said that he and his wife prepared
their wills in a rush in March 2012, prior to an overseas trip. Each left the property to the other but in the event that the other did not survive the testator by 30 days, then the house would go to Roopesh. That was because he was already living there and Nilesh had a home of his own. They trusted that, given their sons’ relationship, Roopesh would settle any dues with his brother informally and merely stated an amount of $50,000 in the will for Nilesh as a minimum. Jayendra said that the wills were amended again after he and his wife returned from overseas.
Evidence of other family members
[34] Roopesh and Nilesh each gave evidence in support of Jayendra.
[35] Roopesh in his evidence was less critical of Hetal, although he denied that the couple had any expectation of an interest in Jayendra’s home. Rather, he said, any contributions reflected an expectation in Gujurati culture that the eldest son would live with his parents and care for them, even after his marriage.
[36] He went on to say that he had considered purchasing his own property and had discussed this with his father. He said they reached an arrangement whereby Roopesh would retain his savings for his own property in his father’s loan account to reduce the loan interest payable until Roopesh had his finances in order and found a suitable property to buy. At that point, Roopesh said, his savings would be returned to him by his father. He said he transferred various amounts at irregular intervals and believed that the total amount would not exceed $150,000.
[37] Roopesh said he did not feel as if he was under any urgent need to buy a property and was very comfortable leaving his savings in his father’s loan account for as long as necessary. He did not expect to receive a share or interest in the property through this arrangement.
[38] He denied that there was any conversation with his parents about leaving something in their wills for him.
[39] Roopesh also said he was personally indebted to his parents for financial assistance they had provided him over the years which allowed him to start his
business, purchase a car and pay for both his first and second weddings. He said these were informal arrangements and he made repayments from time to time when he was in a position to do so. He said the total sum was approximately $50,000 and that had since been satisfied.
[40] Nilesh largely confirmed the evidence given by his father and brother. Additionally, Nilesh deposed that while he lived with his parents, he tended to help out with payments. He said there was no formal agreement in place, as in Indian culture, children do not expect to receive any current or future interest in the family home.
Did Hetal and Roopesh make contributions to the property?
[41] I am satisfied that Hetal and Roopesh made significant contributions to the property during their marriage.
Financial contributions
[42] I found Hetal to be a credible witness. She filed detailed evidence which contained an analysis of expenditure. It was supported by documentary evidence, mainly bank statements. These showed payments from two joint accounts which Hetal shared with Roopesh into Jayendra’s mortgage account between 2008 and
2015. There were also payments during 2012 from a further account for which Roopesh was the sole signatory. Hetal did not provide any documentary evidence of payments made towards insurance costs. However, those costs were relatively insignificant in comparison to the other amounts paid to Jayendra and Nirmilla. Jayendra did not challenge her evidence on this point.
[43] In contrast, Jayendra chose to file no documentary evidence on this, or any other issue. While he made concessions under cross-examination as to the amounts paid by Hetal and Roopesh, those concessions were not readily made.
[44] The first of those concessions related to the total sum Hetal said was paid towards the mortgage and rates. Under cross-examination, Jayendra said he hadn’t checked to ascertain whether the amount stated by Hetal was correct, nor had he
asked anyone else to check. He said the figure “could be right” or “could be correct.” Then, as to the 2012 payments, it was put to Jayendra in cross-examination that Hetal and Roopesh put $220,000 into paying the mortgage and rates that year. His initial response was “[t]hat they may have but I haven’t checked that”. When asked again, Jayendra replied “[m]aybe, yes”. I find it surprising, under the circumstances, that Jayendra omitted to check these key details, if that indeed was the case.
[45] Under cross-examination Roopesh similarly accepted that the amount recorded by Hetal was correct. His response was “Yeah probably, yeah.” Upon further questioning he answered, “Yes”.
Domestic contributions
[46] Jayendra’s criticism of Hetal’s alleged failings in relation to the care of her children and lack of help with household duties had a distinct tone of personal dislike. This was mirrored in the evidence of Nilesh and to a lesser extent Roopesh. I formed the view that this ‘animus’ coloured the evidence not only of Jayendra but also Nilesh in relation to Hetal’s care of the children and household duties and to a lesser extent the evidence of Roopesh.
[47] I find that Jayendra overstated his and his wife’s role when he said that they took full care of the children while Hetal “… continued to laze around at home.” For a start, Hetal breastfed her two daughters. Even if that were her only role, which I do not accept, then on that basis Jayendra has been less than accurate.
[48] By contrast, Hetal, while firm in her evidence, was restrained in the way she referred to the members of the Govind family. She freely acknowledged that Jayendra and Nirmilla had played a significant role in caring for her children and expressed gratitude for their assistance.
Conclusion regarding contributions
[49] As I have said, Hetal’s evidence was detailed and included an analysis of
expenditure. Despite that fact, the calculations set out in her brief of evidence do not
precisely align with the bank statements provided. The reasons for this inconsistency are not entirely clear from Hetal’s evidence. However, an examination of the bank statements reveals the following.
[50] There is a clear pattern of fortnightly payments to Jayendra’s mortgage
account which continues for the entirety of the period between April 2008 and July
2015, save for one missing payment in June 2013. From April 2008 until April 2011, Hetal and Roopesh made payments, usually of $450 but sometimes less. In May
2011, when Nilesh left the home, the payments increased to around $900. Then, in June 2014, the payments increased again, this time to around $1000 a fortnight. In total, Hetal and Roopesh made between $133,000 and $134,000 worth of fortnightly payments to Jayendra’s mortgage account. The exact amount is obscured by other payments, which were sometimes incorporated into the fortnightly payment.
[51] The bank statements also support Hetal’s claim that she and Roopesh made a
number of significant capital contributions in 2012. Specifically, the bank statements reveal the following payments:
Date Amount 10 April 2012 $58,053.00 10 April 2012 $41,915.08 15 April 2012 $50,000.00 5 October 2012 $20,000.00 21 December 2012 $17,215.64 21 December 2012 $2,785.00
[52] These payments were made in some cases from a joint account shared by Hetal and Roopesh, and in other cases from an account held in Roopesh’s name only. Over the course of 2012, Hetal and Roopesh made capital contributions totalling
$189,968.72. That amount differs from Hetal’s calculation by $900. The difference is attributable to a $900 payment made to Jayendra’s mortgage account on 7
December 2012, apparently in error, since it was immediately refunded. Hetal in her
calculations included this payment as a capital contribution and did not account for the refunded amount.
[53] The bank statements also show rates payments made to the Auckland
Council, totalling $10,038.60 between 2010 and July 2015.
[54] There are other payments by Roopesh and Hetal to Jayendra’s mortgage account during the period of their marriage, totalling approximately $25,000. The purpose of these payments is unclear. There are also unexplained payments from Jayendra’s mortgage account totalling approximately $22,000. In the absence of any evidence regarding the nature of those payments, and in light of the relatively close correspondence between these two amounts, I set these unexplained payments to one side.
[55] I am satisfied that between April 2008 and July 2015 Hetal and Roopesh made financial contributions of between $333,000 and $334,000 to the mortgage and rates for the property. That amount comprises fortnightly payments of between
$133,000 and $134,000; capital contributions of $189,968.72; and rates payments of
$10,038.60. I also accept Hetal’s uncontradicted evidence that in those years she and
Roopesh paid a total of around $4,400.00 towards insurance of the property.
[56] These contributions towards the mortgage, rates and insurance assisted
Jayendra to maintain the property or its value.
[57] Hetal acknowledged that, as members of the household, she and Roopesh could reasonably be expected to make financial contributions towards their living costs. Hetal has investigated TradeMe listings for the Blockhouse Bay area and estimates that the total “rent” she and Roopesh might have expected to pay over the seven year period of their marriage would be around $63,280. I am not persuaded that figure is necessarily correct. Hetal is not an expert in these matters and the valuation evidence provided by Mr Head did not address this point. I am however satisfied that the amounts actually paid by Hetal and Roopesh towards the mortgage, rates and insurance vastly exceeded the amount of rent which the couple might
otherwise have been expected to pay to share a similar house over a similar period of time.
[58] There were other financial contributions as well. These, in my view, were in the nature of a “give and take” arrangement. While Hetal and Roopesh (and Nilesh until 2011) paid the outgoings such as water, power, phone, internet and Sky TV, Jayendra and Nirmilla purchased all the food for the household. Jayendra was prepared to concede that “was our mutual arrangement.” I therefore put these contributions to one side.
[59] As to domestic contributions, I prefer the evidence of Hetal. I find that she had the primary role in caring for her two children and that Jayendra and Nirmilla assisted as grandparents might when the members of the family are living in one household, as was the case here. I also find that while Nirmilla had the primary role in cooking for the family, other household duties were shared. I therefore put the domestic arrangements to one side for the purposes of determining this proceeding.
Did Hetal and Roopesh have a reasonable expectation of an interest?
[60] I am satisfied that Hetal had a reasonable expectation that she and Roopesh would receive an interest in the property in exchange for their financial contributions.
[61] That expectation is evidenced by Hetal’s description of the discussion in March 2012 and the events which followed. I refer particularly to the changes which Jayendra and Nirmilla made to their wills in March 2012 and to the large lump sum payments made by Hetal and Roopesh from April 2012.
[62] Jayendra and Nirmilla each amended their will on 29 March 2012. The terms of the amended wills were identical, at least with respect to the disposition of the property. Jayendra and Nirmilla each provided that the property would be left to their surviving spouse (if any) but otherwise that the property would be left to Roopesh, on the condition that he pay $50,000 to Nilesh. There was no provision in the wills for Jayendra and Nirmilla’s three daughters.
[63] These terms are entirely consistent with the expectation which Hetal said was agreed between the parties during their discussion in March 2012. Roopesh (and Hetal, by virtue of their marriage) would receive the property, reflecting his financial contributions to the mortgage. Nilesh would receive a much smaller sum than Roopesh, to reflect his more minor contributions. The daughters, who had not contributed to the property in any way at all, would receive no interest. Jayendra acknowledged as much in cross-examination:
Q. Well, why would you in March 2012 be giving them the whole of the house prior to them putting in all of that money?
A. We are going overseas so we gave the whole house to him. Q. You had three other children overseas didn’t you?
A. Yeah but I couldn’t give them, they’re all married.
Q. Exactly so you were giving it to Roopesh and also to Nilesh because they’re the ones who’d made the contributions to that house didn’t you?
A. Yes.
Q. Whereas your children overseas, you’ve got a daughter who lives in Toronto, you’ve got a daughter in Bangkok and your other daughter lives?
A. In Sydney –
Q. In Fiji.
A. Fiji yeah. Sydney now.
Q. And so none of those children were left anything in your will because they had contributed nothing to that house had they?
A. Yes.
[64] I do not accept the explanation offered by Jayendra that the wills were “made in a rush” before he and Nirmilla went overseas and were later altered. There is no documentary evidence to support that. The wills were signed on 29 March 2012 and Jayendra and Nirmilla left New Zealand for an overseas holiday on 4 April 2012. However, there is no evidence of when the instructions for the wills were given to their solicitors. Nor did Jayendra provide any documentary evidence of a later alteration to his will, which should have been a simple matter to prove.
[65] Following the discussion and the amendment to Jayendra and Nirmilla’s wills, Hetal and/or Roopesh made a number of lump sum payments to Jayendra’s mortgage account, set out at [51] above.
[66] Jayendra under cross-examination maintained that these sums did not represent a capital contribution to the property. He said that Roopesh had chosen to pay the money into the mortgage account to reduce the interest payable, on the basis that Jayendra would return the money at some point in the future when Hetal and Roopesh required the money for the purchase of their own property.
[67] Hetal said she had no knowledge of any discussions with Jayendra to the effect that the lump sums would be applied to reduce the loan amount and would be repaid in the future. She further said:
Roopesh and I did have discussions about, whether we should buy a property or should we just reduce the mortgage of the existing property with an expectation of return or not is what we were contemplating on and after all the thoughts and discussions about how we would manage our finances working out what we would do, and stuff like that, figured that Jayendra and Nirmilla would not – were not happy to sell this property and for us to buy a new one using the collective money and all of us stay together, what that meant was leaving 46 Donovan Street property as is and us buying a new property, either an investment or we stay at – which would actually mean that we would end up paying two mortgages because Jayendra and Nirmilla Govind would not be able to afford to pay the mortgage on 46 Donovan Street. After working out everything, we decided that we will instead just reduce the mortgage on this property to a fair degree and then use the equity on the property to buy another property maybe, which is why we kept reducing the loan amount and that is what was my understanding.
[68] Jayendra’s evidence in support of his version of events was not convincing. When asked about how much he had agreed to refund his son and daughter in law if they ever asked for it, he said he left it for the time when they were going to buy a house. It would be “whatever they needed, it may be $150,000, it may be $200,000. I would give to them.” In response to another question, Jayendra denied that there was any agreement at all and indicated that amount to be repaid to Hetal and Roopesh, if any, would be entirely at his discretion.
[69] When asked whether he could afford to pay the mortgage on his own if the money were returned to Hetal and Roopesh to fund the purchase of their own home,
Jayendra insisted that he would have been able to do so. I found his evidence on this issue similarly unconvincing and opaque. Jayendra said in his evidence in chief:
13.Between 2008 and 2015, I continued to make my own regular mortgage repayments of $400.00 per week. My income generally consisted of my employment with Green Rebel Grocery Store in New Lynn, Auckland, various investments abroad and savings.
[70] However, in cross-examination Jayendra accepted that his mortgage repayments were fortnightly not weekly and that his employment at Green Rebel Grocery Store had ended some time prior to the date in 2008 when Hetal began living with his family.
[71] Jayendra claimed that he had $30,000 in savings which he could have used to meet mortgage repayments. He did not produce any bank statements to support this assertion.
[72] Jayendra also said that he owned properties in Fiji, one in his own name and another owned by a company of which he and “all my brothers” were the directors. He estimated the value of the property in his own name to be “probably” between FJ$800,000 and FJ$1,000,000 and the other property to be over FJ$5,000,000 of which he said he had a one-fifth share. The property in his own name, Jayendra said, earned him about FJ$5000 per annum. The other property produced an income for him of around FJ$35,000. He said his total income per annum from the two properties was around NZ$26,700. He also said, if it had been necessary he could have sold the Fiji properties in order to meet mortgage payments on the property. However, Jayendra provided no documentary evidence in support of his claims. He did not produce any evidence regarding his ownership of the properties, nor did he provide any evidence regarding the value of the properties. His evidence on this point was lacking in substance.
[73] Events in 2014 provide further support for Hetal’s claim that there was an existing agreement that Roopesh and Hetal would receive an interest in the property in return for their financial contributions.
[74] Hetal said that in June 2014 there was a conversation between her, Roopesh and Jayendra about mortgage repayments. This conversation took place shortly before Jayendra and Nirmilla flew to Canada for a lengthy holiday to stay with one of their daughters. In that conversation, Hetal says that Jayendra said that he could no longer afford to pay the mortgage and that “I’ve made a will and the house is
eventually going to be yours.” As previously noted,4 from June 2014 Hetal and
Roopesh began paying 100 per cent of the mortgage, rates and insurance.
[75] Both Jayendra and Roopesh denied that there was such a conversation. Jayendra was cross-examined on why he stopped making mortgage payments in June
2014, if not for the reasons given by Hetal.
Q. Why would you stop paying the mortgage then?
A. Because the mortgage itself was very low and I don’t have to pay. If I wanted I could – just sold my property then bring the money and pay this for, plus I had some cash with me back in my, in my savings.
Q. Well if you had all that cash why didn't you pay the mortgage off? A. Well I didn't want to pay.
[76] As with other aspects of Jayendra’s evidence, I found this response to be less
than satisfactory.
[77] Finally, there is the matter of the money which Jayendra apparently loaned to Roopesh in connection with his business venture, weddings and car. Roopesh estimated that his father had loaned him as much as $50,000 in order to meet these expenses. I find that the extent of the indebtedness was overstated. The loan for a laptop for Roopesh to start his web development business was “$5000 or so” according to Roopesh. As to the wedding in India, Hetal said according to custom the bride’s parents paid. Jayendra appeared to accept that, but said nevertheless he bore the cost of flying his family to India. The amount of the loan for a car was
$10,000. The existence of this loan and Roopesh’s obligation to repay the money cannot explain the very large lump sum payments that were made in 2012 and does not impact on my assessment of whether Hetal and Roopesh had an expectation of
an interest in the property.
4 At [18].
[78] I am satisfied that Hetal and Roopesh expected to gain an interest in the property. Furthermore, in light of the evidence set out above and particularly considering the size of the financial contributions made by Hetal and Roopesh, I am satisfied that expectation was a reasonable one.
Should Jayendra reasonably expect to yield an interest in the property?
[79] Between April 2008 and July 2015, Jayendra received more than $330,000 from Hetal and Roopesh. If Jayendra were to have his way, that sum would remain in his possession. He would have no legal obligation to recognise the contributions of Hetal and Roopesh in any way.
[80] There is also the opportunity cost to Hetal and Roopesh of making financial contributions to the property, in lieu of purchasing their own home. Had Hetal and Roopesh invested $200,000 or more into their own property in 2012, instead of paying the money to Jayendra, they would likely now possess a valuable asset. Instead they have nothing.
[81] I am satisfied that Jayendra should reasonably expect to yield an interest in the property to Hetal and Roopesh. To permit any other outcome, in the circumstances of this case, would be entirely unconscionable.
Conclusion on constructive trust
[82] Hetal has demonstrated on the balance of probabilities that she and Roopesh made contributions, direct or indirect, to the property; that they had a reasonable expectation of an interest in the property; and that Jayendra should reasonably expect to yield an interest to Hetal and Roopesh.
Quantification
[83] Hetal seeks a declaration that Jayendra holds a one-third share of the property for her and Roopesh as beneficiaries of a constructive trust. The figure of one-third is based on the financial contributions Hetal and Roopesh made in 2012, which on the basis of the bank statements provided by Hetal amounted to approximately
$216,000.5 In July 2012, the property was valued at approximately $650,000. Thus the contributions of $216,000 represented almost exactly one-third of the value of the property at that time.
[84] There are other matters which must be taken into account. There are the contributions which Hetal and Roopesh made towards mortgage, rates and insurance in the years other than 2012, which amounted to approximately $122,000. There is also the matter of the benefits which Hetal and Roopesh derived from their living arrangements, in particular the absence of rental payments. Hetal estimated that she and Roopesh might have expected to pay something in the region of $63,000 in rental payments between April 2008 and July 2015.
[85] I do not accept that the figure of $63,000 is necessarily an accurate estimate of the benefits which accrued to Hetal and Roopesh from their residence in Jayendra and Nirmilla’s home. I am however persuaded that the financial benefits to Hetal and Roopesh would be met or outweighed by the contributions which they made towards the mortgage, rates and insurance in the years other than 2012 as discussed in [83] above.
[86] Taking these matters into consideration, I am satisfied that the one-third share claimed is fair. I accept the basis on which Hetal makes the claim. For completeness, I note that I do not make any adjustment on account of the financial contributions towards the costs of the utilities or on account of domestic contributions, which were part of the “give and take” nature of the household.
[87] Hetal’s unchallenged evidence is that the value of the property at 22 February
2017 was $1,300,000. The one-third share of the property which Jayendra holds on constructive trust is valued at one-third of that amount, being $433,333.33.
Result
[88] I make a declaration that Jayendra Govind holds the property as a trustee for
Hetal Parmar and Roopesh Govind as beneficiaries of a constructive trust.
5 Comprising fortnightly payments of $23,156.00, capital contributions of $189,968.72 and rates payments of $3,136.18.
[89] I award judgment in the sum of $433,333.33 (being one third of $1,300,000)
in favour of Hetal Parmar and Roopesh Govind to discharge the constructive trust.
Costs
[90] Costs should follow the event. I invite the parties to try and reach agreement and file a joint memorandum by 10 July 2017. In the event that agreement cannot be reached, the plaintiff should file a memorandum by 17 July 2017 and the defendant
by 24 July 2017. Memoranda should not exceed five pages.
Gordon J
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