Stapylton-Smith v Stapylton-Smith - [2014] NZHC 1314

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2014-409-000167 [2014] NZHC 1314

BETWEEN
MILES MARTIN STAPYLTON-SMITH

Applicant

AND

KATHLEEN MARY MARTIN STAPYLTON-SMITH FRANCES MARTIN STAPYLTON-SMITH BRIDGET ANN KELLAND First Respondents

AND

JOHN MARTIN STAPYLTON-SMITH Second Respondent

Hearing: 26 May 2014

Appearances:

G P Tyrrell and M D W King for the Applicant
P M James and A L Worrill for the Respondents

Judgment:

11 June 2014

JUDGMENT OF PANCKHURST J

Introduction

[1] The applicant, Miles Stapylton-Smith, seeks an order pursuant to s 148 of the Land Transfer Act 1952 (the Act) authorising the lodgement of a second caveat. In late 2009 the applicant lodged a caveat against land at Camp Bay on Banks Peninsula owned by a family trust, of which Mr Stapylton-Smith is a discretionary beneficiary. However, the caveat lapsed in early 2010.

[2] If an order authorising a second caveat is made, Mr Stapylton-Smith will assert the same interest in the land based on a constructive trust. He considers that
work he undertook and expenditure on the land in the 1970s gives rise to an

STAPYLTON-SMITH v STAPYLTON-SMITH [2014] NZHC 1314 [11 June 2014]

equitable interest, or at least that he has a reasonably arguable case for an equitable interest.

Some background

[3] The applicant’s parents, Paul and Kathleen Stapylton-Smith, farmed the three blocks of land comprising over 300 hectares which are the subject matter of the equitable claim. Mr Stapylton-Smith Snr (Paul, or the father) died in 2004. Mrs Stapylton-Smith (Kathleen) survived her husband and recently the land has been offered for sale, but remains unsold. It seems the marketing of the property prompted the present application.

[4] Paul and Kathleen had four children: (a) the applicant – Miles
(b) Frances Martin Stapylton-Smith – Martin

(c) Bridget Ann Kelland – Bridget

(d) John Martin Stapylton-Smith – John. They were born between 1955 and 1961.

[5] In 1981 Paul and Kathleen established the Paul Henry Stapylton-Smith Family Trust. Land described in four certificates of title was settled on the trust, and the resulting debt owed to the parents was to be forgiven over time. Block 1 was created by severing off a 2275 m2 area upon which a cottage had been built (the “cottage block”). Block 2 comprised 306 ha, being an area known as the “lower farm”. Block 3 comprised 725 m2, being land on which a woolshed is located and is known as the “woolshed block”. Block 4 is land known as the “back farm” and comprises 320 ha. However, 15 years later in 1996 the Trust sold Block 4 to the youngest son, John. He farms the property and he also has a half share in the woolshed block.

[6] In 2002 the remaining land (Blocks 1, 2 and 3) was settled upon a new trust, the Camp Bay Trust, of which Kathleen, Martin and Bridget are the present trustees. The new trust was established because Paul was the only family member not a beneficiary of the previous trust and this was considered to…

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.

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Details

Case: [2014] NZHC 1314
Decision Date: 11 June 2014

CaseChat Overview and Summary

Miles Martin Stapylton-Smith sought leave to lodge a second caveat against certain land on Banks Peninsula pursuant to section 148 of the Land Transfer Act 1952. The land was owned by a family trust, of which Mr Stapylton-Smith is a discretionary beneficiary. The primary legal issue was whether there was a reasonably arguable case to support a claim for a constructive trust over the land, which would justify the lodgement of a second caveat. The applicant argued that work and expenditure on the land in the 1970s gave rise to an equitable interest. The court found that while the applicant had planted trees, built a workshop, and contributed to the construction of a cottage on the land, there was no credible evidence of an understanding that he would acquire an interest in the land. The court concluded that the applicant had at best a bare contractual entitlement to harvest and benefit from the trees and workshop, but this did not warrant the lodgement of a second caveat. The application was dismissed.

The court held that in order to establish a constructive trust, the applicant must show contributions to the property, an expectation of an interest, that such expectation is reasonable, and that the defendant should reasonably expect to yield the claimant an interest. While the applicant had made contributions to the property, there was no evidence of an understanding that he would acquire an interest in the land. The court found that the applicant had at best a contractual entitlement to harvest and benefit from the trees and workshop, but this did not warrant the lodgement of a second caveat. The application was dismissed and costs were reserved.

Orders