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Tervoert v Scobie

Tervoert v Scobie

Case [2020] NZHC 1039 19 May 2020

Constructive Trust

Reasonable Expectation

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IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY

I TE KŌTI MATUA O AOTEAROA NGĀMOTU ROHE

CIV-2018-443-11

[2020] NZHC 1039

BETWEEN
JAN-MARIE TERVOERT

Plaintiff

AND

NOEL GEORGE ARCHIBALD SCOBIE MARIE JUNE SCOBIE

DOWNSEND TRUSTEE LIMITED

Defendants

Hearing:
21 October 2019 – 23 October 2019

18 December 2019

Counsel:

P J Mooney for the Plaintiff S J Shamy for the Defendants

Judgment:

19 May 2020

JUDGMENT OF CULL J

Contents

Background.............................................................................................................. [4]
Issues....................................................................................................................... [14]

IS THERE A CONSTRUCTIVE TRUST?......................................................... [15]

Legal principles...................................................................................................... [16]
What was the nature of the agreement, if any, between
Jan-Marie and her parents?................................................................................. [24]

The “discussions”................................................................................................ [26]

The “arrangement”............................................................................................. [32]

Jan-Marie’s account............................................................................................. [33]
Mr and Mrs Scobies’ account.............................................................................. [45]

The legal documents............................................................................................ [51]

Analysis................................................................................................................ [59]

Conclusion........................................................................................................... [66]

Were there qualifying contributions made by Jan-Marie? [68]

Jan-Marie’s financial payments........................................................................... [71]

TERVOERT v SCOBIE [2020] NZHC 1039 [19 May 2020]

Jan-Marie’s work on the farm.............................................................................. [78]
Jan-Marie’s account............................................................................................. [78]
Jan-Marie’s witnesses.......................................................................................... [83]
Mr and Mrs Scobie’s account.............................................................................. [88]
Their witnesses.................................................................................................... [91]
Analysis of Jan-Marie’s work on the farm......................................................... [100]
The farm expenses.............................................................................................. [113]
Conclusion......................................................................................................... [120]

Was there a reasonable expectation that Jan-Marie

would receive a proprietary interest?................................................................ [122]

Analysis.............................................................................................................. [128]

Conclusion on constructive trust........................................................................ [135]

IS QUANTUM MERUIT AVAILABLE?........................................................... [137]

Legal principles.................................................................................................... [141]

Request for/free acceptance of services.............................................................. [146]

Benefit................................................................................................................... [150]

Reasonable price.................................................................................................. [156]

Unjust enrichment as an alternative?................................................................ [169]

Conclusion............................................................................................................ [172]
RESULT............................................................................................................... [174]

[1] Jan-Marie Tervoert (Jan-Marie) claims a one-third share of the family farm, which is held in a family trust. She seeks a declaration that the trust holds her share on constructive trust for her. In the alternative, Jan-Marie claims a $306,000 payment for her six years of labour on the family farm, including payments she made towards farm supplies and expenses.

[2] Jan-Marie is the daughter of the defendants, Noel and Marie Scobie, who are also trustees of the Downsend Family Trust (the Trust).1 The Trust holds the farm property at Huinga, Stratford in Taranaki (the Property).

[3] Jan-Marie claims that she made both financial and labour contributions to the Property over a six-year period in the expectation that she would acquire a one-third interest in the Property. This forms the basis of her constructive trust claim. In the alternative, she claims payment by way of implied contract with the Trust for compensation on a quantum meruit basis for her services to the farm over six and a half years.

1 The third trustee is Downsend Trustee Ltd, represented by the solicitor of the Trust, Mr Armitstead.

Background

[4] Mr and Mrs Scobie farmed at Peel Forest in South Canterbury for 25 years, in partnership with Mr Scobie’s parents. On Mr Scobie’s father’s death, Mr and Mrs Scobie purchased their half share of the partnership. In 2000, they took their son Wayne into a partnership involving stock and plants. It was at this time, on 23 August 2000, that Mr and Mrs Scobie settled the Trust. The holdings were 40 per cent owned by Wayne, 40 per cent held by Mr Scobie and…

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 Tervoert v Scobie

Details

AGLC: Tervoert v Scobie [2020] NZHC 1039
Case: [2020] NZHC 1039
Decision Date: 19 May 2020

CaseChat Overview and Summary

In Tervoert v Scobie, the plaintiff Jan-Marie sought a declaration that she held a one-third interest in a family farm, which was held by the Downsend Family Trust, on constructive trust. Alternatively, she sought payment for her labour on the farm on a quantum meruit basis. The defendants, her parents Noel and Marie, denied any agreement to share the farm with Jan-Marie. The court found that there was no express agreement between Jan-Marie and her parents that she would acquire a one-third share of the farm by way of her contributions. However, the court found that Jan-Marie had made significant financial contributions and unpaid labour to the farm, which benefitted the Trust. The court found that while Jan-Marie had a reasonable expectation of receiving a proprietary interest in the farm, this expectation was not reasonable as there was no arrangement for her to work towards an interest in the farm. The court rejected the constructive trust claim but found that Jan-Marie was entitled to payment on a quantum meruit basis for her services to the farm. The court ordered the Trust to pay Jan-Marie $163,506 plus interest from 1 January 2011 to 1 June 2017 at four per cent per annum.

Orders