Tervoert v Scobie
[2020] NZHC 1039
•19 May 2020
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 20 per cent held by Mrs Scobie. The partnership with Wayne lasted from 2000 to 2011. On the sale of the farm in South Canterbury in 2009, the Trust purchased the farm Property in Taranaki.
[5] In December 2010, after having a discussion with each of her parents, Jan- Marie came from the South Island to live in one of the houses on the farm and, she says, reached a property-sharing arrangement with her parents. It is this arrangement between Jan-Marie and her parents that is at the heart of the issues in this case.
[6] After she arrived in New Plymouth, Jan-Marie secured a fulltime position as a compliance officer with Tegel Foods and lived in one of the houses rent-free on the farm. She worked on the farm before and/or after work and in the weekends.2
[7] In 2011, Mr and Mrs Scobie paid out their son Wayne the sum of $700,000 for his interest in, and work on, the Trust’s South Canterbury farm, for which he was seeking compensation. The Trust indebtedness increased from about $99,800 to
$795,000 by way of mortgage. After the payment to Wayne, Jan-Marie made available
$50,000 to the Trust and made seven monthly mortgage payments of $1,000 in respect of the Trust’s mortgage indebtedness. The parties disagree about the reasons for Jan-
Marie’s provision of this money. This is discussed later in this judgment.3
[8] The following dates provide a chronology of events in summary form over the relevant period:
2 The extent and frequency of this work is critical to the dispute between the parties.
3 See [32]-[50] of this judgment, under the heading The “arrangement”.
23 August 2000 Downsend Family Trust settled.
2009 Trust purchases Taranaki farm.
December 2010 Jan-Marie moves to Taranaki.
August 2011 Jan-Marie pays $50,000 to Mr and Mrs Scobie
24 August 2011 Memorandum of Wishes from Mr and Mrs Scobie to Trust.
6 December 2011 Deed of Acknowledgment of Debt of
$50,000 owing to Jan-Marie by Mr and Mrs Scobie.
2012 Jan-Marie alleges discussions
occurred on her acquisition of a one- third interest in the farm.
April 2011 – June 2012 Seven payments of $1,000 by Jan-
Marie toward Trust’s mortgage indebtedness.
May – June 2013 Brian Maplesden moves to farm.
30 December 2013 Payment of $5,000 from Brian Maplesden to Jan-Marie
January 2014 Brian Maplesden leaves farm.
2015 Mr Scobie is injured by a bull.
June – July 2016 Ian Thornton moves to stay with Jan- Marie on the farm.
July 2016 Gee Family stay on the farm
March 2017Gee Family moves to the farm permanently.
June 2017 Jan-Marie leaves the farm.
[9] When Jan-Marie’s sister Niki Gee and her husband moved to the farm to live and work in 2017, as requested by Mr and Mrs Scobie, family conflicts arose and as a result, Jan-Marie together with her partner Ian Thornton left the farm.
[10] Jan-Marie claims over the six and a half years she stayed at the farm, she made contributions to the Property, which included the $50,000 payment to the Trust in
August 2011, $7,000 towards the Trust’s monthly mortgage payments,4 as well as payment for farm expenses up until 2016. These are canvassed in more detail throughout this judgment. In addition, Jan-Marie also claims that she worked without wages on the Property during mornings, evenings, weekends and holidays throughout the six and a half years she resided on the Property.
[11] As a result, Jan-Marie claims that an arrangement was reached with her trustee parents that she would acquire a one-third share in the farm, enabling her to buy out her siblings on her parents’ deaths. She then made substantial contributions to the Property in the reasonable expectation, she says, that she would receive her one-third share. Alternatively, she claims that the payment of the monies and the undertaking of the work has resulted in the unjust enrichment of the Trust. As to the latter claim, Jan-Marie claims compensation on a quantum meruit basis and initially sought judgment for the sum of $306,000, plus interest on that sum at such rate as the Court deems appropriate.
[12] These claims are denied by Mr and Mrs Scobie, who say no such arrangement or agreement was reached. They say that Jan-Marie was given rent-free accommodation on the farm in return for assisting her father around the farm in the weekends and when she was not at her full-time work.
[13] Subsequent to these proceedings being issued and before the hearing, Mr and Mrs Scobie forwarded to Jan-Marie’s lawyers the sum of $73,920 in repayment of the
$50,000 loan, together with the $7,000 in mortgage payments and an amount for interest on both.5 That sum is currently being held in trust by Jan-Marie’s lawyers.
Issues
[14]There are therefore two main issues for determination:
(a)Is there a constructive trust?
4 This sum was originally pleaded as $8,000 but was reduced to $7,000.
5 As noted, the plaintiff initially pleaded the mortgage payments totalled $8,000. However, the parties have since agreed they totalled $7,000. As a result, the figure of $73,920 is $1,000 (plus any related interest calculated) over what is needed to be repaid. This is factored in to the calculations at the end of this judgment.
(b)If not, is quantum meruit available?
IS THERE A CONSTRUCTIVE TRUST?
[15] The first cause of action is a claim against the Trust, which is an express trust, for a one-third interest in the Property by way of constructive trust.6 The claim is based on either the express agreement with the trustees which, Jan-Marie says, gives rise to an institutional constructive trust or a remedial constructive trust, based on her contributions and the reasonable expectations of both herself and the trustees.
Legal principles
[16] Constructive trusts are generally said to arise by operation of law, and not by the express or implied intention of the parties. There are two main types of constructive trust – institutional and remedial. As the Court of Appeal explained in Fortex Group Ltd v MacIntosh:7
… An institutional constructive trust is one which arises by operation of the principles of equity and whose existence the Court simply recognises in a declaratory way. A remedial constructive trust is one which is imposed by the Court as a remedy in circumstances where, before the order of the Court, no trust of any kind existed.
The difference between the two types of constructive trust, institutional and remedial, is that an institutional constructive trust arises upon the happening of the events which bring it into being. Its existence is not dependent on any Order of the Court. Such order simply recognises that it came into being at the earlier time and provides for its implementation in whatever way is appropriate. A remedial constructive trust depends for its very existence on the Order of the Court; such order being creative rather than simply confirmatory.
[17] Institutional constructive trusts most commonly involve the unconscionable denial of an equitable interest, contrary to a previous agreement. This is described by
6 Although not contested in this case, since 2003 the courts have upheld a number of claims in constructive trust against an express trust. The Court of Appeal in Vervoort v Forrest [2016] NZCA 375, [2016] 3 NZLR 807 at [64] and Hawke’s Bay Trustee Co Ltd v Judd [2016] NZCA 397 at [43] confirmed the application of established Lankow v Rose [1995] 1 NZLR 277 (CA) at 282 principles to assets owned by express trusts.
7 Fortex Group Ltd (in rec and liq) v MacIntosh [1998] 3 NZLR 171 (CA) at 172-173.
the learned authors of Equity and Trusts in New Zealand, in a passage which has recently been adopted by the Court of Appeal, as follows:8
The common factor in all of these scenarios would appear to be the unconscionability of the defendant in denying the plaintiff an equitable interest in the relevant property because of a previous understanding, whether subjectively agreed upon between the parties or more commonly deemed by the law to have been appropriate in the circumstances. It is the element of consent or intention (or lack of either of these, is the case may be) that triggers the institutional constructive trust which arises to reverse the defendant’s unconscionability.
[18] One such example of an institutional constructive trust arises where there is an assertion of ownership of property to which another has contributed.9 The most obvious example of cases which fall within this category concern parties in de facto relationships,10 but the same principles have been used to recognise institutional constructive trusts in other circumstances, for example, between parents and their children.11 In the Court of Appeal decision Lankow v Rose, which concerned a de facto relationship, Hardie Boys J said:12
The essential requirements I see to be twofold: that the plaintiff contributed in more than a minor way to the acquisition, preservation or enhancement of the defendant’s assets, whether directly or indirectly; and that in all the circumstances the parties must be taken reasonably to have expected that the plaintiff would share in them as a result.
[19]He further clarified those requirements:13
Both statements need some amplification. In the first place, by contributions to assets one is not referring to those contributions to a common household that are adequately compensated by the benefits the relationship itself confers. The contribution must manifestly exceed the benefits… Further, the contributions need not be in money; they may be in services or in any other respect. But there must be a causal relationship between the contributions and the acquisition, preservation or enhancement of the defendant’s assets…
8 Jessica Palmer “Constructive Trusts” in Andrew Butler (ed) Equity and Trusts in New Zealand
(2nd ed, Brookers, Wellington, 2009) at [13.2.1]; and Almond v Read [2019] NZCA 26 at [65].
9 Palmer, above n 8, at 342.
10 For example, see Gillies v Keogh [1989] 2 NZLR 328 (CA); and Phillips v Phillips [1993] 3 NZLR 159 (CA).
11 For example, see Rea v Rea HC Wellington CIV-2003-442-61, 3 March 2004.
12 Lankow v Rose, above n 6, at 282.
13 At 282.
[20] Tipping J then formulated the following summary of what the claimant must show:14
(a)Contributions, direct or indirect, to the property in question. Clearly, a direct financial contribution to the acquisition of property will qualify. A contribution is defined as any payment or service by the claimant which either of itself assists in the acquisition, improvement or maintenance of the property or its value, or by its provision helps the other party acquire, improve or maintain the property or its value. Contributions in the home may qualify as contributions to the home.
(b)The expectation of an interest in the asset.
(c)That such expectation is a reasonable one.
(d)That the defendant should reasonably expect to yield the claimant an interest.
[21] The latter requirement, that the defendant should reasonably expect to yield the claimant an interest, has involved the courts in an assessment of the role of the professional trustee where there are claims in constructive trust against express trusts. The Court of Appeal has modified the reasonable expectation limb in relation to non- participating trustees, by finding that the principles of trustee unanimity and non- delegation “must bend to the practical realities when one trustee is in absolute control of all trust activities and the other trustees have effectively abdicated their trustee responsibilities.”15
[22] The Court of Appeal in Gormack v Scott subsequently observed the difference between express common intention and those cases where the reasonable expectations of the parties need to be assessed in the round. Cooke P amplified the considerations in the reasonable expectation assessment as follows:16
14 At 294-295.
15 Vervoort v Forrest, above n 6, at [62].
16 Gormack v Scott [1995] NZFLR 289 (CA) at 293.
First, … [w]here there has been an express common intention applicable to the circumstances that have arisen, it is unnecessary to fall back on reasonable expectations.
Secondly, if (as the Judge thought here) the common intention was too vaguely expressed to receive implementation as such, the evidence bearing on common intention may still be relevant in considering the reasonable expectations of the parties.
Thirdly, in considering reasonable expectations, attention is not to be confined to the inception of the relationship or the time when any property in question was purchased. The inquiry extends the whole circumstances and history of the relationship. …
[23] To determine whether a constructive trust arose in these circumstances, I will address the following questions:
(a)What was the nature of the agreement, if any, between Jan-Marie and her parents?
(b)Were there qualifying contributions made by Jan-Marie?
(c)Was there a reasonable expectation that Jan-Marie would have an interest in the Property?
What was the nature of the agreement, if any, between Jan-Marie and her parents?
[24] Jan-Marie and her parents are diametrically opposed on the nature of the agreement. It should also be recorded that subsequent to Niki and Stephen Gee’s arrival to live and work on the farm in 2017, family relations have entirely broken down.
[25] The starting point for assessing the nature of the agreement entered into between Jan-Marie and her parents is the discussions that were entered into among the parties about Jan-Marie’s move to live on the Taranaki farm. I will then deal with Jan- Marie’s living and work arrangements on the farm and the legal documentation that was completed in 2011, including the Deed of Acknowledgement of Debt and Mr and Mrs Scobie’s Memorandum of Wishes to the trustees of the Trust.
The “discussions”
[26] The discussions between Jan-Marie and her parents occurred over several telephone conversations, when Jan-Marie was still living in Timaru in 2010. There was disagreement, however, about what those discussions entailed.
[27] Jan-Marie gave evidence that she had a number of discussions with her parents in which her mother sought to persuade her to move from Timaru to the farm in Taranaki. As Jan-Marie wished to have a child, she says her mother advised her there was a couple down the road from them that had a frozen embryo that they would possibly consider allowing Jan-Marie to carry. However, they would need to get to know her first.
[28] Jan-Marie then moved to Taranaki in late December 2010, securing employment at Tegel Foods, at Bell Block, near New Plymouth. She was initially employed as a compliance coordinator for the New Plymouth operation and travelled to and from the farm (a distance of 124 kilometres) each day in order to attend work.
[29] Mr and Mrs Scobie viewed their discussions with Jan-Marie in a different light. Mrs Scobie gave evidence that after Jan-Marie’s first marriage broke down, Jan-Marie brought a house at Runanga on the West Coast with her share of the relationship property division. Jan-Marie experienced difficulties in paying for house repairs and sought financial assistance from her parents. Jan-Marie’s parents were concerned both about her financial capabilities and the effects on her mental health of living on her own.
[30] Following an initial conversation between Jan-Marie and her father in 2010, Mrs Scobie says she told Jan-Marie she could live in the house on the Property for nothing, if she worked the weekends helping her father. Mrs Scobie said that she told Jan-Marie that she would not be employed by them as they could not afford to pay wages. This was the reason, she says, that Jan-Marie applied for a job at Tegel Foods. Mrs Scobie recalls that this conversation took place in Temuka, at Jan-Marie’s sisters house, Niki Gee, when Jan-Marie was visiting.
[31] When Jan-Marie arrived at the Property between Boxing Day and New Year’s Eve in 2010, Mrs Scobie said that she was “quite pushy.” Jan-Marie had asked her mother what she thought about her being a farm manager on the farm for a payment of $80,000 a year. Mrs Scobie said she told Jan-Marie this would never happen and Jan-Marie was quite annoyed with her. Jan-Marie denies that this conversation about being a farm manager and being paid $80,000 ever happened.
The “arrangement”
[32] Each of the parties gave evidence in relation to the ultimate arrangement between Jan-Marie and her parents. As with the preliminary discussions, the parties fundamentally disagree. I detail each of the parties’ accounts.
Jan-Marie’s account
[33] Jan-Marie gave evidence that after taking up her parents’ offer to stay on the farm, it became clear to her that her parents were struggling on their own in running the farm. She also could see that they were under some financial pressure. She was aware that they had had a legal dispute with her brother Wayne over work that he had previously undertaken for them and the matter was settled by a payment to Wayne. The evidence was that in August 2011, when Mr and Mrs Scobie paid out Wayne for his interest in their former South Canterbury farm, the Trust raised $700,000 by way of mortgage to pay him out.
[34] Because her parents indicated that they were struggling financially and, she says, hinted strongly that it would assist if she could contribute, Jan-Marie made a payment of $50,000 to her parents in August 2011. The payment was recorded in a Deed of Acknowledgment of Debt, which was prepared by the Trust’s solicitors and dated 6 December 2011. The document records an advance of $50,000 by Jan-Marie to the Trust, payable with interest on demand.
[35] After Jan-Marie advanced the money in August 2011, she told the Court that it was clear that the Trust was still struggling financially and she was asked by her parents to assist in the making of some of the mortgage payments. It was at that time, she says, that she discussed with her parents what would ultimately happen to the farm.
[36] Jan-Marie says that she was told by her parents that she and her two siblings would be entitled to equal one-third shares in the farm, after her parents died. She told the Court:
I was told that ultimately myself and my brother and my sister would be entitled to an equal one third share in the farm following my parent’s deaths. If I was to retain the farm myself then I would need to buy out my two siblings.
Jan-Marie realised that if she were to purchase the farm, she did not have the financial ability to buy out her two siblings’ shares.
[37] At this stage, Jan-Marie understood that both her brother and her sister, Niki, had declined their parents’ initial invitations to come to the farm to work. Jan-Marie was the only person interested in working on the Property. She concluded that if she could not buy out the shares of her brother and sister, the farm would be sold in due course. To avoid such an outcome, she believed she needed to build up some equity in the farm.
[38] Her evidence on the arrangement reached with her parents was that she would work on the farm without wages. She would contribute to the Trust in a financial way, including the $50,000 that she had already advanced and make additional payments of
$1,000 to meet the Trust’s monthly mortgage payments, when required. These additional payments occurred between April 2011 and March 2013 and totalled
$7,000. They were not part of the loan advance to the Trust, as I describe below. Jan- Marie considered that in providing her labour and finance, she would build up an equity in one-third of the property for herself.
[39] On that basis, she thought that once her parents passed away, she would have a significant advantage in having already gained an interest in the farm. Hopefully then, she would be in a position to buy out her brother’s and sister’s shares.
[40] Jan-Marie was questioned about her understanding of the agreement as to the qualifying hours of work she was required to complete to acquire her one-third share, which was put to her as being valued conservatively at $1.3 million. She said:
There was never any agreement, they would just come and get me. There was an expectation that I’d be there at 8 o’clock on a Saturday morning and a Sunday morning and then I’d just work through until I was allowed to go home.
She also said that her mother “pointed out to me I’d also have a third value in stock and plant.”
[41] Following Jan-Marie’s cross-examination and re-examination, I sought her further clarification on the arrangement that was going to give her the equity share. Jan-Marie explained:
For me, that meant an opportunity to buy the farm. I was relying on Mum and Dad to get it written down legally how it would work. They just kept telling me that if I put money in and put hours in, they were building[, l]ike, stock walling it to help me to get into the farm.
[42] I also wished to clarify Jan-Marie’s understanding of what she was signing in the Deed of Acknowledgement of Debt, namely, whether she understood that it was recording a loan to the Trust (or her parents) or otherwise. Jan-Marie replied that she did not remember going to the lawyers to sign it but remembers having the documents presented to her for signing. She said:
I understood I was putting money into the farm, I didn’t really understand whether it was a loan or not at that time, I was prepared for it to be a loan, I just trusted that Dad had gone to the lawyers and got the papers drawn up in my interests and his.
[43] Jan-Marie recalled that her mother suggested a range of interest rates to be payable on the loan and settled on four per cent. Jan-Marie was aware that she could make demand for the $50,000 together with interest.
[44] When Jan-Marie was leaving the farm in 2017, she said she tried to discuss with her father what was going to happen with the money that she had invested in the farm and he told her in colourful terms that the farm has never been so well off and no money is leaving it.
Mr and Mrs Scobies’ account
[45] Mr and Mrs Scobie challenge this evidence. They say that the arrangement was that Jan-Marie would live rent free in the two-bedroom cottage in exchange for helping her father on the farm in the weekends. Mr and Mrs Scobie therefore deny that the contributions were made in expectation, reasonable or otherwise, that Jan- Marie would receive one-third of the Property.
[46] Of the advances, Mrs Scobie says that after Jan-Marie arrived to live on the farm, she told her mother that she had received a $50,000 pay-out in a relationship property split from an ex-boyfriend and that she was afraid she would spend it, in light of her previous difficulties with money. Mrs Scobie says Jan-Marie asked if she could lend her parents the money, so they would effectively be holding it for safe-keeping.
[47] On the basis of Mr and Mrs Scobie’s agreement with this arrangement, they had their solicitor draw up the Deed of Acknowledgement of Debt, which they all signed. Mrs Scobie said that they did not really need the money from Jan-Marie, as it was not going to do “an awful lot” and they:
… took that money on for her [Jan-Marie] so that she didn’t feel as if she would want to spend it and waste it and we gave her an interest rate which is accumulated … but that was why we did for her not for us.
[48] Mrs Scobie said that it was then Jan-Marie’s further suggestion in 2011 that she lend them a further $1,000 per month, for similar safe-keeping reasons, which she did up to a total of $7,000. These payments were not included in the Deed of Acknowledgement of Debt.
[49]Mr and Mrs Scobie contend that both the advances, the $50,000 and the
$7,000, were agreed to be a loan; that they remained a loan and the loan is now fully repaid, as at September 2019. They deny that the character of the advances of funds from Jan-Marie changed after February 2012.
[50] In summary, Mr and Mrs Scobie are adamant that at no stage, either before or after signing the loan documentation, did they agree with Jan-Marie or suggest to her that she would have an additional interest in the farm because of her loan or the money
she had advanced to them. Mr Scobie specifically stated that at no stage did he promise Jan-Marie a share in the farm or agree to pay to her for any work she did around the farm or the payments she made.
The legal documents
[51] Mr Armitstead is the solicitor for the Downsend Family Trust and is the professional third trustee, being the representative of the Downsend Trustee Ltd. He gave evidence about the two documents which were drawn up on the instructions of Mr and Mrs Scobie between 2010-2011.
[52] He confirmed that on 21 September 2011, Jan-Marie and her parents attended in his office, where he took instructions to prepare the Deed of Acknowledgement of Debt which was subsequently signed on 6 December 2011 by the parties. His understanding was that Jan-Marie had funds available and was interested in getting a return on those monies by putting them into the farming operation. That meant that she obtained a better interest rate than the banks. He thought he would have discussed the interest rates and given an opinion on whether the interest rate offered was fair.
[53] During his evidence in the hearing, Mr Armitstead disclosed the existence and contents of a Memorandum of Wishes of Mr and Mrs Scobie to the trustees of the Trust dated 24 August 2011. This had not been discovered or disclosed to the parties prior to his evidence.
[54] Mr Armitstead had drafted the document on Mr and Mrs Scobie’s instructions, after he had attended on them to update their wills. He posted to them a draft of their Memorandum of Wishes on 2 December 2010. They signed it on the 24 August 2011, one month before they gave him instructions in relation to the Deed of Acknowledgment of Debt to Jan-Marie.
[55]The Memorandum of Wishes records that:
(a)The farm together with all livestock and farm plant not be sold for a period of 10 years from the date of the death of the survivor of Mr and Mrs Scobie.
(b)If any of their children want to farm the land or be employed by the Trust as a manager of the farm, that the trustees give them the opportunity to do so.
(c)If at the end of the 10-year period any of the children want to purchase the land, the trustees assist them to do so on reasonable terms. That may include leaving monies in at interest rates deemed appropriate to ensure that the family member(s) can purchase the farm, livestock, and plant.
(d)On the winding up of the Trust, the trustees are to treat their children equally.
(e)In the event of any of their children’s death, that child’s children, if any, shall take an equal share from the Trust that his or her parent would have received had he or she survived.
[56]The Memorandum was not to be disclosed to any beneficiary of the Trust.
[57] Under cross-examination, Mr Armitstead agreed that it was not unusual in a farming scenario that farmers who have worked land for a long period of time want their family to be able to farm that land, if the family wishes to do so. The inclusion of the sentence in the Memorandum identified at (c) above, which reads this “may include leaving monies in at interest rates deemed appropriate”, was not unusual in his view.
[58] Mr Armitstead said in response to a question from me that, although he could not recall any discussion that the farm may be ultimately divided among the three children, there was a “great desire” by the parents that if their family members wanted to farm the Property, the trustees should give every assistance to them to do that. But in doing so, the children are to be treated equally.
Analysis
[59] From a review of the evidence on the “agreement” between Jan-Marie and her parents, the one agreed fact is that Jan-Marie was to live in the two-bedroom cottage on the farm, rent free and work with her father in the weekends on the farm. It was also uncontested that Mr and Mrs Scobie could not pay Jan-Marie for her work when she arrived in 2010, and that is why she obtained fulltime work at Tegel Foods. However, I am not satisfied on the evidence that there was a common intention that Jan-Marie would acquire a one-third proprietary interest in the farm, by making her contributions by way of finance and her labour.
[60] It is clear from the sequence of events as described by Mr Armitstead that Mr and Mrs Scobie had updated their wills in 2010. As a consequence, they ultimately signed a Memorandum of Wishes in August 2011, expressing their desire that if one of their children wished to buy the farm, then they should be given every assistance to do so by the trustees to buy out their siblings. Importantly, they made it clear to the trustees that the children were to be treated equally.
[61] As noted above, Mr and Mrs Scobie signed the Memorandum of Wishes in August 2011 and one month later attended in Mr Armitstead’s office, with Jan-Marie, to give instructions about the Deed of Acknowledgment of Debt. In my view, if the provision of $50,000 by Jan-Marie was expressly provided to the Trust for the purposes of acquiring her one-third share in the long term, that is a matter that would have been raised and discussed by her parents with Mr Armitstead, when giving their instructions on the debt repayment. This was the opportunity that such an arrangement for property-sharing could have been discussed with Mr Armitstead when Jan-Marie and her parents attended his office in September 2011, or possibly when they attended again in December 2011. This did not occur. That indicates to me that neither Mr and Mrs Scobie in their parental role nor in their capacity as trustees turned their minds as to how a one-third share of the farm was to be acquired before their deaths. I note specifically that the equal sharing of the Property among the children was to happen on their deaths.
[62] Instead, the Deed of Acknowledgement of Debt specifically records that the sum was an advance to the Trust as a loan and an interest rate was payable when the capital sum was demanded for repayment.
[63] Although Mr and Mrs Scobie deny there was ever an agreement reached with Jan-Marie, Mr Scobie did accept that there “may” have been a discussion in 2012 between Jan-Marie and himself as to what was going to happen to the farm once he and his wife passed away. When further pressed, he then denied that there was such a discussion and said nobody knew what his plans where.
[64] After considering all of the evidence, it is likely, in my view, that there was some discussion about the possible future plans for the farm, but I find that there was no express agreement or common intention between Jan-Marie and her parents, that Jan-Marie’s work and contributions would ultimately lead to her acquisition of a one- third share in the farm prior to their deaths. I also note that there was no discussion between Jan-Marie and her sister Niki at any stage about any potential purchasing of Niki’s share by Jan-Marie at some date in the future.
[65] In finding that there was no express agreement reached between the Trust and Jan-Marie, I have preferred the evidence of Mr and Mrs Scobie on this issue. However, I accept the evidence of Jan-Marie that the provision of $50,000 by her was of benefit to the Trust. I deal with this further below under the second issue.
Conclusion
[66] I conclude that there was no express agreement or common intention that Jan- Marie was to acquire a one-third share of the Property by way of her contributions. I therefore reject the plaintiff’s claim that an institutional constructive trust arose by way of an express agreement.
[67] I turn then to consider whether a constructive trust nevertheless arose, by virtue of Jan-Marie’s contributions and the parties’ reasonable expectations.
Were there qualifying contributions made by Jan-Marie?
[68] As noted above,17 the first question is whether there were any contributions made by Jan-Marie that qualify for the first step in the constructive trust analysis.
[69]Jan-Marie submits that she contributed to the Property in the following ways:
(a)she provided an initial payment in August 2011 of $50,000;
(b)she made various payments to the Trust between November 2011 and March 2013 totalling $7,000, being the Trust’s mortgage repayments;
(c)she made various payments towards farm expenses between February 2011 and November 2016, totalling $13,546;
(d)she worked without wages on the Property during morning, evenings, weekends and holidays throughout the time that she resided on the Property.
[70] The parties take markedly different positions about the nature of the financial payments made by Jan-Marie to the Trust, in describing the work undertaken by Jan- Marie, and about the farm expenses. I deal with each of these under their respective headings.
Jan-Marie’s financial payments
[71] In summary, Jan-Marie claims the $50,000 payment to the Trust and the $7,000 paid in mortgage repayments forms the financial contribution she made to the Trust. Mr and Mrs Scobie say that the $50,000 payment in 2011 was a loan, not a part payment on account of an interest in the Property and that any payments made towards the mortgage debt owed on the Property were loans only.
[72]As already noted, the Deed of Acknowledgement of Debt describes the
$50,000 payment as a loan to the Trust, repayable on demand with an interest rate of
17 See [20] of this judgment.
four per cent. Both parties admit that repayment of the $57,000 plus interest was never demanded by Jan-Marie. However, one month before this hearing, the Trust forwarded to Jan-Marie’s lawyers the sum of $73,920 in repayment of the $50,000 loan plus the “mortgage payments” together with an amount for interest. As noted, that sum is currently being held in trust by Jan-Marie’s lawyers.
[73] Although the $50,000 advance was recorded as a loan, the circumstances and context in which the advance was made is relevant to an assessment of contributions. As noted above, I have accepted Jan-Marie’s evidence that, at the time, the Trust was facing some financial pressure. $700,000 had been raised by way of mortgage through the Trust to repay Wayne in 2011. In that financial year ending 30 June 2012, where Jan-Marie’s advance of $50,000 is recorded in the Trust’s financial statements, there is a concomitant reduction of $75,397 in Loan 1003 to the National Bank.
[74] I consider it is significant that in the year the $50,000 payment was made, the Property was suffering from significant loses, in the sum of $360,889 as at 30 June 2011, two months before the advance was made. In the following year ended 30 June 2012, the loss was only $78,395. Although I have found there was no express agreement between Jan-Marie and the trustees that Jan-Marie’s contributions would ultimately lead to her acquisition of a one-third share in the farm, I find that the
$50,000 payment constitutes a significant financial contribution to the Property from which the trustees of the Trust benefitted.
[75] It is in the same financial year that Jan-Marie made several payments of $1,000 towards the farm mortgage. Mr Armitstead, in a letter dated 8 December 2011, records that Jan-Marie is lending the further sum of $1,000 on a monthly basis from August 2011 and asks Mr and Mrs Scobie for those loan monies to be accounted for in the Trust’s financial accounts.18 Mrs Scobie acknowledged in cross-examination that, “well if you think $1,000 per month every now and then is going to help then yes, it would help. We’re talking hundreds of thousands [of debt] here.” She then added
18 The $1,000 payments were not made consistently each month. The Disclosure Schedule of Payment records that from August 2011 to the year ending 30 June 2012, Jan-Marie made the monthly payment in August, October, November 2011 and January, April and June 2012.
“in the scheme of things, $1,000 was wonderful, yes, but it did not do a lot.” She maintained her stated view that “we were doing it for Jan not for ourselves.”
[76] I do not accept Mr and Mrs Scobie’s position in relation to Jan-Marie’s payments. Apart from Mr Armitstead recording that Jan-Marie was lending further sums of $1,000 on a monthly basis, there is no provision for interest on those sums and nor was the Deed of Acknowledgment of Debt varied to include the additional sums, payable on demand, with interest. These payments were made when the Trust was financially pressed to meet the mortgage payments. The financial evidence reveals that from 2011 to 2012, the financial position of the Trust benefitted from Jan- Marie’s additional payments because at the time the Trust was experiencing significant losses. By 2013, as the Trust’s financial accounts show, the farm was in a better financial position.
[77] I therefore conclude that the $50,000 payment and the $1,000 payments totalling $7,000 were qualifying financial contributions to the Trust.
Jan-Marie’s work on the farm.
Jan-Marie’s account
[78] Jan-Marie describes the unpaid labour she put in over the six and a half years she was living on the Property. Although there is no record of these hours, in early 2016 Jan-Marie kept a diary for one week to account for the work she had been doing on the farm. From this record and her memory, Jan-Marie estimates that she worked about 30 hours per week for 48 weeks of each year. She was holding down a full-time job at Tegel Foods but she describes working for two hours either before or after work each day, as well as 20 hours in the weekends. Generally, she says she devoted the whole of her weekends to the farm and the vast majority of her holidays from Tegel were spent working on the farm.
[79] “Work” was often dependent upon what Mr Scobie wanted Jan-Marie to do. The general farming tasks involved taking care of and feeding the dogs, collecting pig food and taking care of the pigs and animals, including any sick animals when required. More specific farm work involved stock work, mustering, feeding out,
mowing thistles, mowing ragwort, feeding out hay, hay making and carting, building things, such as a protection barrier around the new water tanks so the cattle would not rub on them, painting, break fencing, repairing fences, fixing water systems, maintenance, manual thistle grubbing, and repairing sheds. Jan-Marie says she fixed machinery, did repairs and marked calves. She says it was her who generally pushed the animals forward so her father did not have to be in the run up, because the work is dangerous and it is necessary to be able to move quickly out of the way. She sorted and moved cattle, mustered goats and sheep, moved sheep, drenched sheep and lambs, dipped them and took dead animals to the offal pit.
[80] Jan-Marie described that certain jobs were saved by her father for when she was home to help. For example, marking the calves, drenching sheep and mustering because it was “hard on him”. It depended on whether she was available or not and sometimes they would get up and go mustering at five in the morning before she went to work.
[81] Jan-Marie also says she set up contracts for the farm and did training, preparing for farm assurance audits and health and safety requirements. She cleaned the rental property, being the other cottage rented to tenants, cleaned the wool shed before shearing, undertook the chemicals and animal medicine rotation and looked after any pups that were born.
[82] When asked to clarify when she took holidays, it was accepted that in her first year on the farm, Jan-Marie flew back to the South Island for long weekends to spend with her boyfriend. However, over the six and a half years that she was on the farm, Jan-Marie was firm that she only took one week’s holiday in Phuket, “two or three” long weekends to go to Dunedin, and the “odd day” when she had to attend a Tegel conference or a “start up” in another city, in which case she would fly out on a Sunday to be at the destination at 5 am in the morning.
Jan-Marie’s witnesses
[83] Jan-Marie’s description of events was supported by her two witnesses, her current partner, Mr Thornton, and her former manager at Tegel Foods, Ms Newell.
[84] Mr Thornton confirmed that Jan-Marie worked long hours, not only in full time employment at Tegel Foods but also putting in long hours on the farm. Before he moved in with Jan-Marie on the farm in mid-2016, he described the time they were able to spend together as “very limited” because of the hours she spent working both at Tegel and on the farm.
[85] After Mr Thornton moved onto the farm he confirmed how hard Jan-Marie was working, either in the morning before going to Tegel or after returning from work, sometimes both. He described her travelling out of her way to go into New Plymouth after work to pick up food for the pigs twice a week and that it was not unusual for her to work either annual holidays or statutory holidays on the farm, when she was not working at Tegel.
[86] Mr Thornton also says he assisted Jan-Marie and her father on the farm by fixing the video camera system on the driveway to eliminate stock theft, feeding pigs, helping Mr Scobie shift breaks and feeding out, as well as other jobs.
[87] Ms Newell, Jan-Marie’s former Tegel manager, confirmed that Jan-Marie sought time off from her job with Tegel because she had particular farm duties that needed to be met. She was aware that Jan-Marie was assisting her parents on the family farm in Taranaki, where and when she could. She confirmed that Jan-Marie’s usual practice was to take one or two days off from work on various occasions throughout the year and some of those requests were specifically to work on the farm.
Mr and Mrs Scobie’s account
[88] Mr and Mrs Scobie both viewed Jan-Marie’s contributions to the farm in a different light. They say that her unpaid work on the farm was to compensate Mr and Mrs Scobie for providing Jan-Marie with rent-free accommodation on the Property. Further, they and their witnesses dispute that Jan-Marie did any real farming work as she was an inexperienced farm worker and therefore not as valuable as her brother Wayne, or her brother-in-law Stephen Gee, both of whom had extensive farm experience.
[89] Again, Mr and Mrs Scobie said Jan-Marie did not ever work a 30-hour week on the farm. They say she was working full time at Tegel Foods, which is about 50 minutes’ drive from the farm, so she would be away for most of the day and was not doing “any particular work” before or after her working day at Tegel. She also completed a Master’s degree through Auckland University while she lived on the farm, from which it is implied there was little time for her to work on the farm.
[90] Mr and Mrs Scobie concede that Jan-Marie helped occasionally on weekends but this was to compensate for her rent-free accommodation. They did not view Jan- Marie’s contributions in the same way as those provided by Stephen Gee. They saw her work as assisting her father only.
Their witnesses
[91] Mr and Mrs Scobie called evidence from a number of witnesses, including from their daughter and son-in-law, Niki and Stephen Gee; Ms Hetherington, a tenant on the Property from late 2010 to 2012; and Mr Maplesden, a boarder of Jan-Marie’s from about May 2013 to January 2014.19
[92] Niki Gee gave evidence that throughout her various visits to the farm between 2010 and 2017, she did not recall Jan-Marie doing much substantive work on the farm. In July 2015, when Niki flew up to the farm to help muster and scan ewes, she said that Jan-Marie “didn’t really have a clue what was going on as she had never been present round scanning time. Mid-afternoon she took off.” She also disputed the advice that Jan-Marie had given her about the dry ewes. When Niki returned to the farm on 1 October 2015 for a week, she said she did not see much of Jan-Marie and queried the reason that Jan-Marie was required to work at Tegel on the Saturday of that week.
[93] Niki also gave evidence about the work she and her husband undertook on the farm between 12 July and 25 July 2016. She said they hardly saw Jan-Marie the whole two weeks they were there. She reiterated the evidence from her parents that Jan-
19 They also called evidence from Mr Armitstead, the Trust’s solicitor, which is traversed at [51]-
[58] of this judgment, and Mr Myers, a registered valuer who gave evidence as to the valuation of the house on the Property in which Jan-Marie lived.
Marie had not had a great deal of experience living and working on farms and considered Jan-Marie was bossy and pushy with her parents, organising people to come out to do work on the farm, even if her father said no. She said Jan-Marie would also buy things for the farm, even after her parents had disagreed.
[94] Niki’s husband Stephen Gee confirmed that neither he nor Niki wished to move to Taranaki to work on the Property when asked by Mr and Mrs Scobie, first in 2009 and then a number of times over the subsequent years. He described Mr Scobie’s accident in 2015, when a bull had pushed him against a gate and he had fallen over. As a result of that accident, Stephen confirmed that Mr Scobie had a limp and gradually acquired a very bad cough. Both he and Niki were concerned about his health.
[95] Stephen too described the time he came to the farm in 2016 for three weeks, to undertake a fencing project at Mr Scobie’s request. He said that he and Wayne did the first part of the fencing, and then Wayne went back to the South Island and he and Niki finished it. During the time they came up for the three-week period, they stayed in Jan-Marie’s house while she went to stay with her partner, Mr Thornton. Stephen said they saw Jan-Marie and Mr Thornton come out once during that three-week period to put boards on the cattle yards, but gave evidence that “the only time I saw Jan do any work during that three weeks was for two hours putting those planks on.”
[96] Stephen described that Mr Scobie was struggling to run the farm because of his age, the limp from the accident and his bad cough, and had been paying people to come and help him. He confirmed that he was told by Mr Scobie that he was paying labourers $26 per hour to crutch sheep and that Jan-Marie had organised other people to help, but Mr Scobie had not authorised it.
[97] When Stephen and Niki decided to move to the Property, they arrived in March 2017. Stephen gave evidence that Jan-Marie helped them set up the house on the farm, including organising a fridge and beds. He said that from the time they moved to live up on the farm, he did not see Jan-Marie doing any work around the farm but Mr Thornton “apparently had the job of feeding the pigs before we arrived”
and he kept doing that for a couple of weeks after they arrived. Stephen said that that was the only work he saw either of them do after his and Niki’s arrival on the farm.
[98] Ms Hetherington, a tenant on the other cottage on the farm from late 2010 to 2012, was called to give evidence that she did not see Jan-Marie doing a lot of work on the farm. She said she would drive past Jan-Marie’s house in the morning and as far as she knew Jan-Marie had gone to work at Tegel. She gave evidence that she saw Jan-Marie in the weekends sometimes riding a quad bike, but did not see her doing any particularly large amounts of work around the farm. In cross-examination, she agreed that from her house, she could not see over the back of the farm where there were big hills. She accepted that although she could see a large portion of the farm, there was a significant part of the farm she could not see. She also accepted that from her house, it was difficult to see what was happening around Jan-Marie’s house and conceded that although it was not common to see Jan-Marie through the week, there were times she had seen her out on the farm on the weekends.
[99] Mr Maplesden was called to confirm that he paid Jan-Marie $5,000 board for his eight months stay. Of particular relevance, he confirmed that when Mr and Mrs Scobie went away for 10 days, he helped Jan-Marie shift beef cattle around the Property, as well as feeding chooks, pigs and dogs. He confirmed Jan-Marie took a couple of days off work during that time.
Analysis of Jan-Marie’s work on the farm
[100] As is not uncommon in cases where family relationships have broken down and claims are made for property interests, there is rarely agreement on the amount of work done or its value.
[101] I find that Mr and Mrs Scobie minimised the work which Jan-Marie described. First, they said that she was not properly qualified as a farm worker and the work she did was done under the supervision of Mr Scobie, who was teaching her “the ropes”. Secondly, they say that the work was done in order to meet her obligations for free rental accommodation and support from her parents, including the provision of meals.
[102] I prefer the evidence of Jan-Marie. I accept that she did undertake the work that she described, fitting it around her work at Tegel Foods and occasionally seeking leave from Tegel to do so. I found her partner, Mr Thornton, to be a credible and reliable witness, who stepped into Jan-Marie’s shoes to help in the morning before he left for work, feeding pigs, helping Mr Scobie to shift breaks, feeding out, as well as other jobs. He also assisted, when he could, in the weekends. He confirmed the times Jan-Marie took off work from Tegel Foods to work on what would otherwise be either annual holidays or statutory holidays and noticed the strain that the long hours were placing on her. He acknowledged that he had no farming experience, but when he was not doing shift work in his employment, he too would be helping out on the farm where possible.
[103] I consider the work described by Jan-Marie, Mr Thornton and Mr Maplesden was not just “assisting” in the weekends. It is testament to the fact that the farm depended on the labour and work Jan-Marie was doing when her parents were not able to do all that was required. Mr Maplesden corroborates Jan-Marie’s evidence that when Mr and Mrs Scobie were away from the farm, for example at cattle sales, they relied on Jan-Marie to run and manage the farm in their absence.
[104] I take into account in reaching my finding that Mr Scobie was attacked by a bull in 2015 and was physically affected by the accident. Further, Mrs Scobie did not work on the farm once Jan-Marie arrived. The reluctance of Mr and Mrs Scobie to acknowledge Jan-Marie’s work is at odds with the lack of evidence that other labourers were regularly employed to help. It strikes me that if Jan-Marie was so inexperienced and so hopeless, much more labour would have been necessary. Although there is some evidence that Mr Scobie would hire in labourers, particularly to crutch sheep at
$26 an hour, and Jan-Marie herself would hire labour from time to time for specific tasks, there is no evidence to suggest that regular labourer assistance was required. I draw the inference that that is due to the fact that Jan-Marie was on the farm doing the regular farm work required.
[105] I also record that I found the evidence of Ms Newell to be informative and corroborative of Jan-Marie’s evidence. As her manager, Ms Newell worked to accommodate Jan-Marie as much as she was able to, recognising that there was a need
to be flexible because Jan-Marie had particular farm duties that needed to be met. She was aware that Jan-Marie was assisting on the family farm, helping her parents where and when she could. A number of the requests for leave were specifically for working on the farm. That evidence corroborates the account given by Jan-Marie.
[106] Stephen Gee is an experienced farm worker and when he and Niki arrived at the farm, they both said that they did not see Jan-Marie doing much work on the farm. On the three-week occasion in 2016, Jan-Marie had vacated her cottage so they and their son could live in it. I consider it is hardly surprising that Jan-Marie took the opportunity to leave them to assist on the farm while she either spent more time at Tegel Foods, or with her partner Mr Thornton, while the Gee’s were in residence.
[107] I find that Jan-Marie’s work and labour went beyond “family just helping out.” The hours of work are not recorded but I find they were considerable. Nor do I find they can be minimised because of Jan-Marie’s inexperience. Clearly, experienced farm workers, such as Stephen Gee, have skills for which they are paid. Jan-Marie’s work was necessary on the farm and her suggested solutions, such as hiring a tractor to feed out and the hire of the Burkhart bale feeder, were ultimately accepted by Mr Scobie as helpful.
[108] I deal then with, the provision of meals and accommodation which Mr and Mrs Scobie have claimed as offsets for Jan-Marie’s work. Turning first to accommodation, I note that Wayne never had to pay for accommodation on the farm in the South Island and nor were Niki and Stephen Gee asked to pay for rent either when they came to work on the farm. Obviously, those side benefits came with working on the family farm, as each of the family members experienced when working for their parents. I note in particular that Mr Scobie acknowledges that they did not wish to make a profit from Jan-Marie for her renting the house on the farm. It is also evident that Jan-Marie did not have exclusive occupation of the house, as on occasions it was made available for other family members, such as the Gee’s when they came to live and work on the farm in July 2016.
[109] I do not consider it appropriate in these circumstances to make a deduction or offset Jan-Marie’s contributions around the farm for accommodation. The provision
of accommodation formed part of the general family arrangements which Mr and Mrs Scobie had in place for all the children.
[110] As for the provision of meals, it is evident that Mrs Scobie provided meals and lunches in the weekends for Jan-Marie. Most nights, Jan-Marie joined her parents for a family meal. Jan-Marie said her mother insisted on it, but Mr Scobie said Mrs Scobie thought she was helping Jan-Marie. In the weekends, she and her father had lunch together to make the day more efficient for completing activities on the farm. Mrs Scobie described how her “husband is a very efficient worker and he’s in and out. He doesn’t like mucking around and I have… his lunch ready when he comes in.” She further confirmed that when Jan-Marie and Mr Scobie came in for lunch, “[t]hey didn’t muck around” and they would be back out again.
[111] I find that the work completed by Jan-Marie outweighed any obligations she “owed” for free rental accommodation or support from her parents by way of meals. The provision of meals was part of the family dynamics and in the weekends enabled more work to be done. For all of the above reasons, I prefer the evidence of Jan-Marie and her witnesses on the work that Jan-Marie completed on the Property.
[112] I therefore find that Jan-Marie’s work around the farm is a qualifying contribution. Jan-Marie contributed in more than a minor way to the preservation and enhancement of the Property and thereby benefitted the Trust. These contributions were not adequately compensated by the provision of meals or free accommodation.
The farm expenses
[113] The remaining alleged contributions are the farm expenses between 2011 and 2016. Such farm expenses include payments for timber, painting and gardening companies, petrol, farm whistles, gate clips, flea treatments and food for dogs, tools, a borer, maintenance of a chainsaw, a tractor, plumbing and oven repairs, tractor and bale feeder hire and purchase, building equipment, replacement of fire bricks, vet services and software for tracking payments, totalling nearly $14,000. Jan-Marie claims these were all necessary expenses that she had to pay on behalf of the Trust to ensure the operation of the farm.
[114] Mr and Mrs Scobie agree that such payments were made but submit that the vast majority of the expenses were made on Jan-Marie’s own accord. They also say that they had paid Jan-Marie’s relocation expenses from Timaru to Taranaki. Importantly, Mr and Mrs Scobie concede that some expenses were made with their knowledge and they accept liability for those payments. These include the gate clips, the replacement of fire bricks, and the tractor and bale feeder hire.
[115] With regard to the remaining expenses, Mr and Mrs Scobie deny that they were legitimately incurred on behalf of the farm. They say they had farm accounts with various suppliers in the area and did not need or ask Jan-Marie to go around buying the items that she now seeks remuneration for. Some payments were clearly for the benefit of Jan-Marie herself. For example, some of the payments were for repairs on the house she was living in. One example is a $250 payment to repair the oven door.
[116] Other payments are less clear. For example, there is a payment in March 2016 of nearly $300 for gardening services. Jan-Marie submits this related to work undertaken around the various gardens that Mr and Mrs Scobie refused to do themselves. Mrs Scobie on the other hand submits Jan-Marie sometimes employed gardeners to do her gardens as while working full time and undertaking her Masters degree, she did not have time to do them herself.
[117] During the hearing, it was accepted by Jan-Marie that the schedule of farm expenses should not include items that occurred before the time her claim in constructive trust arose and nor should she claim the relocation costs dated 8 February 2011.
[118] There was a lot of cross-examination about items which did not have the approval of Mr and Mrs Scobie, yet Jan-Marie nevertheless proceeded to order or purchase. I find that in the round the items claimed, less the payments conceded by Jan-Marie, contributed in a more than a minor way to the preservation and enhancement of the Property. They were items that benefitted the Property, to the value of $13,546.
[119] Accordingly, I find that the total of reasonable expenses is $13,546, and I view these as qualifying contributions.
Conclusion
[120] In summary, I consider the payments made by Jan-Marie to the Trust by way of the Deed of Acknowledgement of Debt and the mortgage payments were significant financial contributions to the Trust, particularly given they occurred at a time of the Trust’s financial constraint. Similarly, Jan-Marie’s labour on the farm and the payments made for farm expenses are qualifying contributions from which the Trust benefitted.
[121] I turn then to consider whether, in light of these contributions, Jan-Marie had a reasonable expectation of a proprietary interest in the Property.
Was there a reasonable expectation that Jan-Marie would receive a proprietary interest?
[122] There are two parts to the “reasonable expectations” limb of the test. The first is whether Jan-Marie had a reasonable expectation that she had a proprietary interest in the Property. The second is whether Mr and Mrs Scobie should reasonably expect to allow Jan-Marie a proprietary interest in the Property. I address them both together.
[123] Jan-Marie claims that her contributions were made in the expectation that she would be entitled to one-third of the Property. She says the expectation is reasonable given the discussions she had with her parents and her anticipation that in due course, all three siblings would share equally in the Trust or in their parents’ estate. Further, she says the contributions she made to the property were “stock walling” her interest because her work was unpaid. Jan-Marie understood that this would be equivalent to her one-third share which she had “earned”, thus reducing the amount to be paid to her siblings in relation to the Property value if she were to buy them out. Jan-Marie claims that as her contributions enabled the farm to survive and operate, it was reasonable for her to expect an interest in the Property for that input and for Mr and Mrs Scobie to expect to allow that interest.
[124] Mr and Mrs Scobie challenge their daughter’s expectation. As noted, they say that Jan-Marie was living on the farm in a cottage and undertaking weekend work on the farm in exchange for rent. They say that farm expenses were met by the farm account and Jan-Marie’s payments, which they did not approve, does not give rise to an expectation that she would be reimbursed for such expense. Mr Scobie recalls:
At no stage did I promise Jan a share in the farm or agree to pay her for any work she did around the farm or payments she made.
[125] When it was put to Mrs Scobie that the work that Jan-Marie did greatly exceeded what would otherwise have been rental, Mrs Scobie replied “well that was her choice then.” Mrs Scobie also acknowledged that she encouraged Jan-Marie to attend various farming courses and acknowledged that it was something that her daughter could use in the future at some point. Mrs Scobie acknowledged such courses could be useful if Jan-Marie was to take over the farm in the future but qualified her response with “I can’t see it happening yep, but I see what you mean.” Mr Scobie himself also acknowledged that although Jan-Marie was working without pay, she was likely to get a pay-out “down the line”. That pay-out was going to be “whatever I thought it was valued at, her input”.
[126] When Mrs Scobie was referred to their Memorandum of Wishes and asked whether, after 10 years, it was intended that one of the children be able to take over the farm, she responded:
If they were great savers and worked hard and went without and put themselves forward yes but not to come at us for money for it.
[127] Mr Armitstead oversaw the interest rate for Jan-Marie’s advance and wanted to ensure it was fair and included in the Deed of Acknowledgement of Debt. However, as addressed above, no discussions were undertaken with him that would lead to a reasonable expectation on his part or an understanding that Mr and Mrs Scobie had a reasonable expectation that Jan-Marie would acquire a proprietary interest in the Property.
Analysis
[128] I accept that there was some discussion from Mr and Mrs Scobie about the ultimate wish they had that their children each obtain a third share in the farm. This arises from Mr Scobie’s acknowledgement that there may have been a discussion in 2012 between himself and Jan-Marie to that effect, although he denied it shortly afterwards. Such a discussion fits with the arrangements that Mr and Mrs Scobie had discussed and implemented with their solicitor in the Memorandum of Wishes.
[129] However, the Memorandum of Wishes makes it plain that there was no arrangement for Jan-Marie to work towards an interest in the farm. It is also difficult to understand how the equity arrangement would work. From their Memorandum of Wishes, Mr and Mrs Scobie desired to have all their children treated equally on their deaths, so potentially Jan-Marie would already have a third interest in the Property at that time, without making any specific contributions to build-up that equity.
[130] Jan-Marie’s evidence on how the arrangement would work is vague. Whilst she understood that she was working towards acquiring her third share, it is a leap to conclude that on her parent’s death, she would have already completed $1.3 million (or more) worth of work equating to a value share of a third before she was to pay-out her siblings. And what was to be paid out was unclear. Would Jan-Marie’s share be deducted off the value of the farm, which would then be divisible by three and her siblings receive a one-third share net of Jan-Marie’s “acquired interest?”
[131] How Jan-Marie’s equity acquisition was to be calculated was never expressed or explained during the hearing. If the Memorandum of Wishes was to be implemented by the trustees, then Jan-Marie would have already had an expectation of a third share by dint of the Memorandum of Wishes itself. Her work on the farm would be irrelevant, unless there was some arrangement for a deduction from the overall value of the farm, before the respective third shares were valued. Clearly, on the evidence before me, this expectation was fraught.
[132] As I have found, Jan-Marie’s contributions were not trifling. I consider, however, that Jan-Marie’s labour and contributions on the farm are best recognised by way of a compensatory or restitutionary payment and not by way of the recognition or
imposition of a constructive trust. Mr Scobie acknowledges that Jan-Marie was entitled to something “down the track”. Mrs Scobie, when cross-examined, said that Jan-Marie would likely be paid out by “some of the cash that we’d accumulated because that’s the way we were thinking of it that we would give them some cash in our will” when Mr and Mrs Scobie died.
[133] It is clear that Jan-Marie was the only sibling putting herself forward to work on the farm in early 2011. However, her position needs to be considered in light of how her other siblings have been compensated for their work. Wayne’s partnership of 11 years with his parents was met by a payment of $700,000. The arrangement with Niki Gee and her husband is a wage of $333 each and at the time of the hearing, no other arrangement had been entered into. Her siblings have been paid in cash payments and have not acquired specified interests in the Property.
[134] I find, therefore, that Jan-Marie’s expectation of a third share or a proprietary interest in the Property as a result of her contributions was not a reasonable one. I also find that Mr and Mrs Scobie could not have had a reasonable expectation that Jan- Marie would acquire an interest in the Property for her contributions.20
Conclusion on constructive trust
[135] I therefore find the constructive trust claim, both institutional and remedial, fails.
[136]I turn now to the second issue and that is whether Jan-Marie has a claim in
quantum meruit for her services to the Property.
IS QUANTUM MERUIT AVAILABLE?
[137] In the alternative, Jan-Marie claims that at Mr and Mrs Scobie’s request she made the $50,000 payment, the mortgage payments, paid for farm supplies and undertook work upon the Property, as outlined above. She claims that, based on the principles of unjust enrichment, the Trust should compensate her for her contributions on a quantum meruit basis.
20 For comparison, see Rea v Rea, above n 11, at [31].
[138] I note at the outset that quantum meruit provides for restitution of the value of services or work, it does not provide for restitution in claims to money.21 However, the parties have agreed that the $50,000 loan and the $7,000 in mortgage payments are to be paid back to Jan-Marie, with interest. I therefore deal with those payments in assessing a “reasonable price” for the quantum meruit claim. This section focusses on the work undertaken on the Property and the farm expenses related to that labour. Jan- Marie estimates that the hours worked were 30 hours per week for 48 weeks of each year for a period of six and a half years.
[139] Although there is no actual hourly rate that can be referred to for her labour input, Jan-Marie relies on what was paid to her sister and brother-in-law when they replaced her on the farm. They received $333 each per week for three days work and the figure remained the same when the work increased to seven days a week. As a comparison, the statutory minimum wage for an adult ranged between $13 per hour in 2011 to $15.75 per hour in 2017.
[140] Mr and Mrs Scobie, for the reasons outlined under the constructive trust analysis, refute that Jan-Marie is entitled to any payment. As I have already noted, however, Mr Scobie acknowledged that Jan-Marie was likely to get a pay-out “down the line” at whatever he valued her input, and Mrs Scobie acknowledged that at some point, if the children saved and worked hard, they might be able to take over the farm.
Legal principles
[141] Quantum meruit is a common law remedy that allows recovery of a reasonable payment for services rendered. As a restitutionary remedy, quantum meruit is commonly thought to rest on the principle of unjust enrichment, though courts have granted the remedy with no evidence of enrichment.22 Essentially, quantum meruit is founded on the principle that a person is entitled to reasonable reward for time and effort expended on another’s behalf, at the behest or with the acquiescence of that other, the time and effort not being intended nor appearing to be gratuitous.23 The
21 Cassels v Body Corporate 86975 (2007) 8 NZCPR 740 (HC) at [40].
22 Cassels v Body Corporate 86975, above n 21, at [41].
23 Professor Watts “Restitution – A Property Principle and a Services Principle” [1995] NZ Recent Law Review 49 at 70, cited in Cassels v Body Corporate 86975, above n 21, at [41].
principle recognises that the remedy is plaintiff-centred, focussing on protecting the plaintiff’s interests rather than stripping the defendant of its gains.24
[142] Relief under this head usually, or at least historically, involves failed or unenforceable contracts. In Villages of New Zealand (Pakuranga) Ltd v Ministry of Health, Winkelmann J noted that the ability to recover remuneration by way of a restitutionary claim for services provided arises in two common contexts: first, where services have been provided under a contract which is subsequently found to be void or unenforceable for some reason; and second, where services are provided in anticipation of a contract being concluded, which is ultimately not concluded.25 In that case, it was the latter category.
[143] However, an implied contract or promise is not a prerequisite to relief.26 Today, as noted, a quantum meruit claim is generally seen as being a restitutionary claim. As such, it is said to be based upon unjust enrichment principles. As Winkelmann J elaborated in Villages of New Zealand, quantum meruit, like other claims for restitution at common law, “is solidly based upon principles of unjust enrichment, rather than upon a notion of implied contract.”27 She then quoted the following passage from Lord Browne Wilkinson in Westdeutsche Landesbank Girozentrale v Islington Borough Council:28
Subsequent developments in the law of restitution demonstrate that this reasoning is no longer sound. The common law restitutionary claim is based not on implied contract but on unjust enrichment: in the circumstances the law imposes an obligation to repay rather than implying an entirely fictitious agreement to repay… In my judgment, your Lordships should now unequivocally and finally reject the concept that the claim for moneys had and received is based on an implied contract. I would overrule Sinclair v Brougham on this point.
24 At [42].
25 Villages of New Zealand (Pakuranga) Ltd v Ministry of Health HC Auckland CIV-2003-404-5143, 6 April 2005 at [72].
26 Buysers v Dean [2002] NZFLR 1 (HC) at [22].
27 At [76].
28 At [76], citing Westdeutsche Landesbank Girozentrale v Islington Borough Council [1996] AC 669.
[144] The elements of quantum meruit have been summarised in Villages of New Zealand, and approved in the Court of Appeal, as follows:29
(a)a request to provide services or free acceptance of the services; and
(b)a benefit from the provision of services.30
[145] Essentially, Jan-Marie must establish that she provided services to Mr and Mrs Scobie, from which they benefited, or “enjoyed measurable enrichment”.31
Request for/free acceptance of services
[146] In this case, Jan-Marie did not plead that her services were requested but her evidence detailed how there was expectation that she would do farm work all weekend. Mr Scobie came to collect her on Saturday mornings and they both had lunch prepared by Mrs Scobie because they did not want to waste much time. The inference that I have taken from the evidence is that they worked consistently and without let-up most weekends. I am satisfied that Jan-Marie provided services around the farm that were freely accepted by Mr and Mrs Scobie.
[147] Mr and Mrs Scobie say that they did not ask Jan-Marie to spend money and perform a number of the “services” she performed around the farm. Although there is no record of the hours put in, Jan-Marie estimates that she worked about 30 hours per week for 48 weeks of each year on the farm, performing tasks such as stock management and mustering, attending to fences or moving fences for stock, feeding out and assisting generally around the farm including making gates, painting, general maintenance, cleaning sheds or repairing items.
[148] From the evidence of the type of assistance that Mr Scobie was given by Jan- Marie, I form the view that Jan-Marie was doing work that otherwise would have been
29 Villages of New Zealand, above n 25, at [73]. This formulation of the elements of quantum meruit has since been cited with approval by the Court of Appeal in Morning Star Ltd v Canam Construction Ltd CA90-/05, 5 August 2006 at [23].
30 Though see Morning Star, above n 29, at [50] for a discussion on whether the claimant must show that the defendant received an actual benefit from the services.
31 Buysers v Dean, above n 26, at [15].
paid by a farm labourer (albeit that she was inexperienced or junior). I note that Mr Scobie told the Court that he would normally pay labourers for crutching sheep
$26 an hour and Mr Scobie’s accident in 2015 meant there were a number of tasks for which he needed more assistance.
[149] While Mr and Mrs Scobie submit that Jan-Marie did not ever work a 30-hour week on the farm, they concede that she assisted in the weekends. They say this was to pay for her rent. For reasons already addressed, I do not accept that submission. I accept Jan-Marie’s evidence about the extent of the work she performed on the farm which goes over and above anything that might be in exchange for free rent, and I am satisfied that the provision of services was freely accepted by Mr and Mrs Scobie on behalf of the Trust.
Benefit
[150]The next issue is the nature of the benefit that gives rise to the cause of action.
[151] As noted by this Court in Villages of New Zealand, in Canada, the Supreme Court has drawn a distinction between cases involving the positive conferral of a benefit upon the defendant, for example, money, and cases involving a “negative” benefit, in the sense that the benefit conferred upon the defendant is that it has been spared the expense, such as, for example, the provision of services.32 In the latter, the Supreme Court of Canada has held that recovery would only be allowed where the plaintiff had provided the service under a compulsion and thus discharged a statutory or contractual obligation of the defendant.33 The Court was prepared to allow an extension of the rule to situations where, even if there was no statutory or contractual obligation, the provision of services was requested or freely accepted and there was an undeniable or “incontrovertible benefit” to the defendant from the provision of the services.
[152] This line of authority has been followed in New Zealand: in cases where there was no implied contract, there must be a clear benefit received by the party against
32 At [86], citing Regional Municipality of Peel v Her Majesty the Queen in right of Canada (1992) 98 DLR (4th) 140 (SCC).
33 At [86].
whom the claim is made for quantum meruit to succeed.34 In Villages of New Zealand, Winkelmann J somewhat altered the analysis in describing the incontrovertible benefit doctrine as follows:
[87] … If the plaintiff has provided a service at the request of the defendant, or the defendant has freely accepted those services, and the defendant knew or should have known that the plaintiff expected to be paid for them by the defendant, then the cause of action is made out. In my view the “incontrovertible benefit” doctrine is better regarded as an extension to the request/free acceptance model of quantum meruit, such that where it cannot be said that the defendant requested or freely accepted the services, such as where the defendant was ignorant of the provision of the services, the plaintiff may still recover if the defendant has been incontrovertibly benefited by the services.
[153] Essentially, if other conditions are met, then, proof of benefit (in an economic value sense) is unnecessary.35 This passage has since been cited with approval by the Court of Appeal in Morning Star Ltd v Canam Construction Ltd.36 In discussing the doctrinal dispute of quantum meruit and whether there must be a benefit, the Court of Appeal held:
[50] We will not attempt to resolve the doctrinal dispute here. It is sufficient to say that there is a general agreement that a plaintiff will be able to establish a quantum meruit claim where the defendant asks the plaintiff to provide certain services, or freely accepts services provided by the plaintiff, in circumstances where the defendant knows (or ought to know) that the plaintiff expects to be reimbursed for those services, irrespective of whether there is an actual benefit to the defendant.
[154] Despite this, Winkelmann J was satisfied that the defendant in that case benefited from the services provided, even though they were provided to third parties. She accepted that the services provided benefited the defendant in the sense of enriching the defendant if that enrichment is measured objectively and in economic terms.37 The above-cited passage has been cited with approval more recently by this Court in BDM Grange Ltd v Trimex (New Zealand) Ltd, and it appears the law has not much evolved.38
34 Buysers v Dean, above n 26, at [23].
35 Morning Star, above n 29, at [24].
36 Morning Star, above n 29.
37 Villages of New Zealand, above n 25, at [84].
38 BDM Grange Ltd v Trimex (New Zealand) Ltd [2017] NZHC 1259 at [54].
[155] In this case, I find that, for reasons above-outlined, the Trust benefitted both from Jan-Marie’s labour and her payments towards the farm expenses, which together qualify as “services”. Mr Scobie acknowledged she would receive a payment “down the line”, which I consider shows his appreciation that payment was wanting, given the relationship between the parties.39
Reasonable price
[156] Having found that Jan-Marie’s work on the farm and payment for farm expenses were services provided by her which were accepted by Mr and Mrs Scobie and which were beneficial to the Trust, I now need to fix a reasonable price for the services. As this Court has held, there is seldom just one price that meets the test of reasonableness.40 The Court is frequently called upon to exercise judgment on imperfect information.41 The authorities have established several principles that the Court should consider in assessing what is a reasonable price:42
(a)the starting point is the market price;
(b)the courts should be influenced by a price that the person receiving the services has agreed to pay for them where there has been agreement – such a price is compelling evidence of what the parties themselves thought reasonable; and
(c)the court must consider the special position of the parties and the value that the services may have for them – that is particularly so where there is no readily definable market value.
[157] Although Mr and Mrs Scobie acknowledged that some form of payment might be due to Jan-Marie in the future, it was unedifying to have Jan-Marie’s unpaid labour over six and a half years, albeit in the mornings and evenings and weekends as opposed
39 Cassels v Body Corporate 86975, above n 21, at [43].
40 Cassels v Body Corporate 86975, above n 21, at [50].
41 At [50].
42 At [51]-[54].
to being fulltime, diminished with the benefit of hindsight and in the context of a disputed claim amidst a broken family relationship.
[158] As noted, Stephen Gee and his wife Niki Gee are paid at the rate of $333 each, or $666 total, per week and Mr Gee is working as a fulltime farm labourer. Mr Mooney suggested that in effect Stephen Gee was probably earning closer to $450 per week while Niki Gee was earning the remainder. They too have free accommodation and there is no evidence to suggest that a deduction was being made from their payment for such accommodation. Their payments were made to them on their arrival at the farm. I note that Niki Gee is not a qualified farm worker, which she acknowledged. I also contrast the $700.000 payment to Wayne, who was working fulltime on the South Canterbury farm for 11 years and was not charged accommodation for the years he lived on that farm with his parents.
[159] I am therefore unattracted to the submission that Jan-Marie’s work was in lieu of her payment for accommodation and indeed I have rejected that submission. Jan- Marie should be entitled to equitable compensation in the form of payment now for those services, not later “down the line”. Nor should such payment be confused with any testamentary intention.
[160] I did not have the benefit of detailed evidence on quantum. However, I have the following financial information which serves to provide a basis for a “reasonable price” for Jan-Marie’s services.
[161] The starting point, as Mr Mooney submits, is the rates paid to Stephen and Niki Gee. They each are paid $333. Niki Gee described the work that she does around the farm. I could discern little difference to Jan-Marie’s work. Stephen Gee was also paid $3,000 for fencing work completed in mid-2016. This was not a price he nominated but was paid by Mr Scobie, without demand or arrangement. And as noted, Mr Scobie acknowledged that when he required labourers to work on the farm, for crutching for instance, he would pay them $26 per hour.
[162] A further consideration is the relevant minimum wage payable in 2012. No accounting or expert evidence was called in respect of historical wage rates for farm
labour. Mr Mooney, however, contrasted the minimum wage payable in 2012 as being
$13.50 per hour with the rate in 2017, which was $15.75 per hour.
[163] Mr Mooney submits that even on the basis of a minimum wage over the period of 2011 to 2017, an average of $14.50 per hour for 30 hours per week amounts to $438, weekly. This figure is reached by averaging the minimum wage in 2012 and 2017 and accepting that Jan-Marie worked 30 hours per week. On this basis, Jan-Marie’s claim is approximately $23,000 per annum, which over six and a half years, amounts to almost $150,000. I accept this figure is appropriate for Jan-Marie’s labour on the farm for the period from 2011 to 2017.
[164] It is then appropriate to add both the farming expenses of $13,546 and Jan- Marie’s initial cash input of $50,000, together with her payments totalling $7,000 and interest on both those figures at four per cent. This brings the total amount to
$238,426.
[165] Mr and Mrs Scobie have claimed that $2,000 should be deducted because those were payments made in respect of Jan-Marie’s hospitalisation and costs. Jan-Marie disputes this deduction because she did not seek those payments. I consider that the hospital costs are of a personal nature, unrelated to the Property and were never subject to repayment at the time. I do not consider it is appropriate in this context to make such a deduction.
[166] It was agreed however that the sum of $73,920 paid on 6 September 2019 by the Trust needs to be deducted from the final amount. I am unaware of the period for which the interest on Jan-Marie’s advances has been calculated. As noted earlier, Jan- Marie initially pleaded the mortgage payments totalled $8,000. However, the parties have since agreed they totalled $7,000. As a result, the figure of $73,920 is $1,000 (plus any related interest) more than what is needed to be repaid.
[167] I consider that a fair and equitable payment to Jan-Marie in restitution for her work and monetary advances is therefore $238,426 less $73,920 and less the $1,000 and related interest, making the final amount payable by the Trust to Jan-Marie of
$163,506, subject to adjustments for interest.43 On that sum, interest is payable at the rate of four per cent from 1 January 2011 to 1 June 2017, subject to any interest already included in the $73,920 payment.
[168] I have taken 1 January 2011 as the date closest to when Jan-Marie’s work started on the Property, for which the compensatory payment and interest is ordered. I adopt the interest rate of four per cent because it is the figure agreed between the parties on the advances made by Jan-Marie to the Trust. In the circumstances, I consider this a fair rate to be adopted for the period concerned.44 The Court has a wide discretion to determine whether interest should be awarded. The principle upon which the Court exercises its discretion to award interest is that the plaintiff has not had the use of money which should have been available to her and she should be compensated for that.
Unjust enrichment as an alternative?
[169] For completeness, I deal with Mr Mooney’s submission that the Trust was unjustly enriched by Jan-Marie’s contribution. This was not pleaded as a stand-alone cause of action but was part of the submission made on the restitutionary remedy of quantum meruit. The elements of unjust enrichment are an enrichment of the defendant by the plaintiff by receipt of a benefit; that benefit at the expense of the plaintiff; and circumstances rendering it unjust that the enrichment be retained.45
[170] However, unjust enrichment has not been recognised as a stand-alone cause of action in New Zealand.46 Counsel who have attempted to plead unjust enrichment as a stand-alone cause of action has always been met with resistance from the courts. In Villages of New Zealand, Winkelman J explained:
43 I have not been provided with precise evidence about how the interest has been calculated on the
$73,920 figure. For present purposes, I have subtracted the $1,000 from the $73,920 figure and I note that any interest related to that $1,000 will need to be deducted from my final figure.
44 The Judicature Act 1908 interest rates are subject to the Court’s discretion and, in this case, I consider four per cent is an appropriate sum. Although the Judicature Act 1908 was repealed on 1 January 2018 by the Senior Courts Act 2016, this claim remains to be dealt with under the old Act: Interest on Money Claims Act 2016, sch 1, cl 1.
45 Villages of New Zealand, above n 25, at [94]; National Bank of New Zealand Ltd v Waitaki International Processing (NI) Ltd [1999] 2 NZLR 211 (CA) at 215 and 226; Investment Trust Companies v Revenue and Customs Commissioners [2017] UKSC 29, [2018] AC 275; and Fuati v Peng [2019] NZHC 1859.
46 Fuati v Peng, above n 45, at [34].
[99] I have held that the plaintiff is entitled (on the basis of estoppel and quantum meruit) to recover reasonable remuneration for the services provided by it for a portion of the time for which it seeks recovery. As it apparent from the analysis in respect of the quantum meruit judgment, the three elements identified above [relating to unjust enrichment] do underpin that finding. Accordingly, even were I to recognise a cause of action in unjust enrichment independent of existing accepted causes of action, it would likely be of academic interest only, the outcome for the plaintiff would be identical to its quantum meruit cause of action. In any case, I do not accept that there is yet such as independent cause of action. The elements identified by Laurenson J can accurately be identified as the common threads running through the various forms of action, both at common law and equity, which give rise to a claim to restitution or compensation in respect of a benefit conferred. However, when extracted in this bare form, and taken in isolation, the principles identified are singularly unhelpful in identifying in what circumstances such relief is available. It says nothing of the type of “benefits” for which relief is available, and most importantly nothing of the circumstances in which it would be “unjust” for the benefit to be retained. To avoid such a cause of action bestowing unfettered judicial discretion, the detailed rules worked out by the Courts over the last several centuries in relation to the common law equitable restitution causes of action would continue to be resorted to for guidance. Alternatively, a whole new set of rules would be required. …
Accordingly, because the present case clearly falls within the well-established principles allowing recovery [through quantum meruit], I do not propose to attempt to express an alternative formulation of an ‘unjust enrichment’ cause of action.
[171] I similarly adopt the Court’s reasoning and conclusion here. This case falls within the well-established principles of restitution through quantum meruit and in any event, the analysis is the same as that for quantum meruit.47
Conclusion
[172] I am satisfied, after hearing the evidence, that Jan-Marie’s evidence is to be preferred over that of Mr and Mrs Scobie. It is plain that her labour and related farm expenses were “services” which Mr and Mrs Scobie freely accepted. I find that these services provided a substantial benefit to both her parents, the farm, and ultimately the Trust. Without her input, Mr and Mrs Scobie would likely have had to have paid for additional help. As a result of her input, I consider the farm operation was able to be kept running smoothly and for the most part successfully. I did not consider the evidence from Mr and Mrs Gee and Mr and Mrs Scobie, that diminished Jan-Marie’s work over the six years, to be persuasive.
47 See also BDM Grange Ltd, above n 38, at [48]-[49].
[173] Jan-Marie’s claim in quantum meruit succeeds in the sum of $163,506 together with interest from 1 January 2011 to 1 June 2017 at four per cent per annum, subject to any adjustment to the interest component already paid.
RESULT
[174]The plaintiff succeeds in part.
[175] The plaintiff’s claim in constructive trust fails. Her claim in equitable relief by way of quantum meruit succeeds.
[176] The plaintiff is entitled to payment from the defendants of the sum of $163,506, together with interest at the rate of four per cent per annum from 1 January 2011 to 1 June 2017.
[177] Leave is reserved to the parties to file memoranda to clarify the final calculations, if there is any uncertainty as to the final sum payable.
Cull J
Solicitors:
Mooney and Webb, New Plymouth for the Plaintiff
Ian Robertson and Co, Christchurch for the Defendants.
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