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Sutherland v Lane

Sutherland v Lane

Case [2020] NZHC 721 8 April 2020

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Property Law

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IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

I TE KŌTI MATUA O AOTEAROA WHAKATŪ ROHE

CIV-2017-442-37

[2020] NZHC 721

IN THE MATTER of the estate of DAVID WAYDE CARSON (Deceased)

BETWEEN

MICHELLE DAWN SUTHERLAND

Plaintiff

AND

ROBERT ALAN LANE AND ANISSA

JEAN BAIN in their capacity as trustees and executors of the estate of DAVID WAYDE CARSON (Deceased)

Defendants

Hearing: 2 and 3 March 2020

Counsel:

R J Buchanan for Plaintiff J V Ormsby for Defendants

Judgment:

8 April 2020

JUDGMENT OF THOMAS J

Table of contents

Introduction [1]

The claim [3]
Background [9]

Mr Carson’s wills  [11]
The Trust  [13]
Memorandum of guidance  [15]
The Estate  [21]
The Children and Grandchildren’s claim  [25]
Ms Sutherland  [27]
The Property  [33]

Other assistance [56]

Mr Carson’s illness  [60]
Family Court costs award  [62]
The Will  [66]

SUTHERLAND v LANE [2020] NZHC 721 [8 April 2020]

Observations [72]

Plaintiff’s case [76]

Did Mr Carson give the Property to Ms Sutherland? [78]
Did Mr Carson hold the Property in trust for Ms Sutherland either under
an express oral trust or under a constructive trust? [90]

The law [90]
Analysis [99]

Equitable estoppel  [128]
Result  [143]
Costs  [144]

Introduction

[1] Michelle Sutherland had a close relationship with her uncle by marriage, the late David Wayde Carson. He gave her financial and emotional support when her marriage broke up and purchased her family’s beach house in his own name. He died, leaving an estate of $17 million. He bequeathed Ms Sutherland $500,000, named her as a discretionary beneficiary under a trust that inherited his residuary estate, and instructed his trustees that she should receive at least $25,000 annually, trust assets permitting. He did not, however, leave the beach house to Ms Sutherland. She claims he purchased it on her behalf and it was always intended for her.

[2] Her claim is opposed by the defendants, who are the trustees and executors of Mr Carson’s estate (the Executors).

The claim

[3] Ms Sutherland says she has been in uninterrupted possession of the beach house at 139 McKellar Place, Whangamatā (the Property) from the time Mr Carson purchased it on her behalf. She has been solely responsible for the Property’s maintenance and payment of utilities. While Mr Carson might have paid the rates, he never once visited the Property or made any use of it for himself. He did not hold a key and had told Ms Sutherland that the Property was hers.

[4] Ms Sutherland claims that the Property was purchased for her by Mr Carson, who held it in trust for her either under an express oral trust or under a constructive trust. She seeks a declaration to that effect.

[5] Alternatively, Ms Sutherland claims that in the circumstances, Mr Carson gifted her the Property.

[6] The Executors oppose the claim. While they accept Mr Carson wanted Ms Sutherland to use the Property from time to time, they say he purchased the Property himself and intended to retain ownership of it. They note…

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 Sutherland v Lane

Details

AGLC: Sutherland v Lane [2020] NZHC 721
Case: [2020] NZHC 721
Decision Date: 8 April 2020

CaseChat Overview and Summary

The plaintiff, Michelle Dawn Sutherland, brought an action against the executors and trustees of the estate of her uncle by marriage, David Wayde Carson, deceased (the Defendants), to establish a trust in her favour over a beach house which Mr Carson had purchased during his lifetime. The Defendants opposed the claim. The plaintiff sought a declaration that the Property was held by Mr Carson in trust for her either under an express oral trust or under a constructive trust. In the alternative, she claimed the Property was gifted to her. The Defendants argued that Mr Carson purchased the Property for himself and intended to retain ownership of it. They further argued that the circumstances did not give rise to a constructive trust. The Defendants also relied on s 25 of the Property Law Act 2007 to argue that any trusts or dispositions are void or invalid. The Court held that the plaintiff had not established that Mr Carson had given the Property to her, nor had she shown that Mr Carson held the Property in trust for her. In particular, the Court found there was no evidence of a trust relationship between the parties, nor of an intention to create a trust. The Court also rejected the plaintiff's alternative claim that a constructive trust arose from the circumstances. The Court further held that there was no basis for the plaintiff to establish a claim for equitable estoppel. The Court concluded that it would not be unconscionable for the executors to depart from any promise Mr Carson might have made. The plaintiff's claim was dismissed.

Orders