Weale v Lovell
[2024] NZHC 3831
•13 December 2024
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV 2023-419-000120
[2024] NZHC 3831
UNDER the High Court Rules 2016, Part 18 IN THE MATTER OF
a constructive trust or resulting trust
BETWEEN
CHERI LOUSE MARY WEALE
Plaintiff
AND
ROBIN LOVELL
Defendant
Hearing: 19 November 2024 Appearances:
P A Depledge for the Plaintiff No appearance for the Defendant
Judgment:
13 December 2024
JUDGMENT OF TAHANA J
This judgment was delivered by me on 13 December 2024 at 3.30pm Pursuant to Rule 11.5 of the High Court Rules
…………………………
Registrar/Deputy Registrar
Solicitors/Counsel:
Cylde Law, Hamilton
Riverbank Chambers, Hamilton
WEALE v LOVELL [2024] NZHC 3831 [13 December 2024]
Application for orders for sale of property
[1] Prior to her passing, Ms Cheri Weale filed these proceedings seeking orders for the sale of an Otorohanga property (the property) held in the name of Mr Lovell. Ms Weale claimed that she paid money to Mr Lovell towards the purchase price of the property, and they agreed it would be owned equally. Ms Weale’s estate is now pursuing the claim.
[2] Mr Lovell has not filed a statement of defence. On 5 June 2024, Associate Judge Taylor ordered that the claim be listed for a formal proof hearing.1
[3] The key issue on appeal is whether Mr Lovell holds the property on trust for the benefit of Ms Weale and if so, what relief should be granted to Ms Weale’s estate?
[4]Before considering this issue, I set out the relevant background.
Background
[5] In May 2014, Ms Weale and Mr Lovell met at a rest home where they both worked. Ms Weale had recently immigrated from England.
Purchase of the property
[6] Ms Weale filed an affidavit in support of her claim. She deposed that Mr Lovell purchased the property on 2 April 2015. Ms Weale’s affidavit annexes data from “homes.co.nz” recording that the last market sale for the property was on 18 February 2015 for $175,000.
[7] Ms Weale says that she transferred $32,000 to Mr Lovell to be used for the deposit for the purchase of the property. Bank statements annexed to Ms Weale’s affidavit indicate that:
(a)on 24 February 2015, Ms Weale transferred $10,000 to Mr Lovell.
1 Weale v Lovell HC Hamilton CIV-2023-419-120, 5 June 2024.
(b)on 25 February 2015, she transferred another $10,000 to Mr Lovell.
(c)on 26 February 2015, she transferred another $10,000 to Mr Lovell.
(d)on 27 February 2015, she transferred $2,000 from her account. The statement does not record to whom the funds were paid.
[8] The certificate of title for the property records a mortgage to ANZ Bank New Zealand Ltd (ANZ) that was registered on 2 April 2015.
[9]Ms Weale deposes that while she was living at the property, she paid Mr Lovell
$200 per week and sometimes $450 per week. The bank statements annexed to Ms Weale’s affidavit record that payments with the particulars “auto payment rent” were paid to Mr Lovell as follows:
(a)Ms Weale paid $380 on 21 August 2019;
(b)Ms Weale made fortnightly payments to Mr Lovell of $450 ($225 per week) from 4 September 2019 to 13 November 2019; and
(c)Ms Weale made fortnightly payments to Mr Lovell of $400 ($200 per week) from 27 November 2019 to 9 June 2021.
[10]Ms Weale lodged a caveat on the property on 24 September 2021.
[11]Ms Weale deposed that she stayed at the property until February 2022.
Legal principles
Formal proof
[12] Rule 15.9 of the High Court Rules 2016 provides for judgment by way of formal proof if the defendant does not file a statement of defence. The plaintiff must
file affidavit evidence establishing, to a Judge’s satisfaction, each cause of action relied on.2
[13] Duffy J has held that “the level at which a Judge is required to satisfy herself regarding the plaintiff’s evidence is much the same as it would be if the proceeding had gone to trial.”3 I must therefore be satisfied that the evidence establishes, on the balance of probabilities, that Mr Lovell holds the property pursuant to a constructive or resulting trust.
Trust principles
[14] Ms Weale has claimed that Mr Lovell holds the property on constructive and/or resulting trust in her favour.
[15] The relevant legal principles for resulting trusts are helpfully set out by Gordon J in Woolf v Kaye as follows:4
[88]The legal principles are well settled.
[89] The circumstances in which a resulting trust of the type relied on in this case will arise is set out in the well-known statement by Lord Browne- Wilkinson in Westdeutsche Landesbank Girozentrale v Islington London Borough Council,5 which was affirmed in New Zealand in Crampton-Smith v Crampton-Smith:6
… where A makes a voluntary payment to B or pays (wholly or in part) for the purchase of property which is vested either in B alone or in the joint names of A and B, there is a presumption that A did not intend to make a gift to B: the money or property is held on trust for A (if he is the sole provider of the money) or in the case of a joint purchase by A and B in shares proportionate to their contributions. It is important to stress that this is only a presumption, which presumption is easily rebutted either by the counter-presumption of advancement or by direct evidence of A’s intention to make an outright transfer … A resulting trust is not imposed by law against the intentions of the trustee (as is a constructive trust) but gives effect to his presumed intention …
[90] In Stack v Dowden, the majority of the House of Lords confined the applicability of resulting trusts, at least in the context of contributions of an
2 High Court Rules 2016, r 15.9(4).
3 Ferreira v Stockinger [2015] NZHC 2916 at [35].
4 Woolf v Kaye [2018] NZHC 2191 at [88]–[94].
5 Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669; [1996] 2 All ER 961 (HL) at 708.
6 Crampton-Smith v Crampton-Smith [2011] NZCA 308; [2012] 1 NZLR 5 at [35]–[36].
unmarried couple, to the purchase of a property while they were living there.7 However, the New Zealand Court of Appeal, in Crampton-Smith v Crampton- Smith, confined their Lordships’ observation to the context of that particular case.8
[91]As noted by Fitzgerald J in Hemu Trade Co Ltd v Le:9
[60] In New Zealand therefore, a resulting trust remains the orthodox response when a party has contributed to the purchase price of property which is then registered in the name (or names) of another (or others). If proved, a resulting trust establishes a proprietary interest or right in rem.
[92] Where the presumption of a resulting trust applies, it is generally regarded as having dispositive effect unless the presumption is rebutted.10
[93] The presumption of a resulting trust can be rebutted by proving that the transferor intended a different consequence, such as an outright gift or loan. The presumption may also be rebutted by the counter-presumption of advancement. The onus is on the transferee,11 in this case, Mr Kaye.
[94] Both the weight of the presumption and the nature of the evidence required to displace it differ according to the circumstances of the case.12
Is there a resulting trust in favour of Ms Weale?
[16] If Ms Weale paid $32,000 to Mr Lovell to purchase the property, the presumption is that she did not intend to gift the money to Mr Lovell. I must determine whether the evidence establishes that Ms Weale paid the money to purchase the property. There are some discrepancies in the affidavit evidence of Ms Weale.
[17] Ms Weale deposes that settlement took place on 2 April 2015. The homes.co.nz data indicates that the last market sale for the property was on 18 February 2015. The record of title records that a mortgage was registered on 2 April 2015.
[18] I consider that the information from homes.co.nz is likely to be more reliable evidence of the actual date of sale than the date a mortgage was registered on the title.
7 Stack v Dowden [2007] UKHL 17; [2007] 2 AC 432.
8 Crampton-Smith v Crampton-Smith , above n 6, at [36].
9 Hemu Trade Co Ltd v Le [2018] NZHC 982.
10 Crampton-Smith v Crampton-Smith , above n 6, at [37]; referring to The Venture [1908] P 218 (CA) at 230.
11 Crampton-Smith v Crampton-Smith , above n 6, at [42]; where the Court of Appeal referred with approval to William Swadling “Explaining Resulting Trusts” (2008) 124 LQR 72 at 74.
12 Crampton-Smith v Crampton-Smith , above n 6, at [41]; referring to Fowkes v Pascoe (1875) LR 10 Ch App 343 at 353.
[19] I accept that the evidence establishes that Ms Weale advanced $30,000 to Mr Lovell in late February 2015, shortly after he purchased the property. Ms Weale does not explain why the $2,000 advanced on 27 February 2015 does not record Mr Lovell in the particulars. In circumstances where she has previously advanced him
$30,000, I accept Ms Weale’s evidence that the $2,000 was also advanced to Mr Lovell so that the total amount advanced was $32,000.
[20] There is then the issue of the weekly payments. Ms Weale says that while she was living at the property and after she left the property, she paid $200 per week and sometimes $450 per week. Ms Weale does not depose as to the date she started living at the property but implies that this was immediately after it was allegedly purchased in April 2015. She says she moved out of the property in February 2022.
[21] The bank statements do not disclose any payments to Mr Lovell (other than the initial $32,000) from the date of purchase in February 2015 to 21 August 2019. That is a period of four and a half years. Payments were then made from August 2019 to June 2021 (just less than two years). Ms Weale says that she stayed in the property until February 2022. There are no bank statements indicating any payments from June 2021 to February 2022.
[22] There is then the correspondence from Mr Lovell. At the hearing, Mr Depledge provided the Court with email correspondence between him and Mr Lovell. I note that it is not annexed to any affidavit, but it is relevant to any potential defences to Ms Weale’s claim.
[23] The correspondence indicates that Mr Lovell’s view is that “Weale was a tenant” and that he “repaid [her] in kind and so forth.” In his emails, Mr Lovell says he helped a “[l]ady in distress, abandoned by her family” and her financial support assisted in a house for her to rent.
[24] There is then a document annexed to Ms Weale’s affidavit which she said is from Mr Lovell. That document records that Mr Lovell considers that Ms Weale owes him over $50,000 for:
(a)painting the ceiling and cleaning the mat — $1,750, $109 and $30 (total of $1,889).
(b)a trip to the United Kingdom — $15,000.
(c)subsidised rental of $250 per week for 104 weeks — $26,000;
(d)groceries being $80 per week for 104 weeks — $8,320;
(e)general damages for the caveat — $5,000; and
(f)general damages for conduct towards his partner — $5,000.
[25] Mr Lovell’s defence appears to be that Ms Weale was a tenant, that she lived in the property for 104 weeks (less than two years) and he helped her out by paying for groceries and allowing her to live at the property at a reduced rent.
Did Ms Weale advance monies for the purpose of purchasing the property?
[26] I accept the evidence indicates that Ms Weale did advance $32,000 to Mr Lovell but this appears to have been advanced after the purchase of the property on 18 February 2015. The mortgage was not registered until 2 April 2015 so Mr Lovell must have purchased the property in February 2015 without requiring any finance requiring security against the property.
[27] If Ms Weale advanced the funds to purchase and then live in the property, she does not explain why there is no evidence of any payments (other than the $32,000 in February 2015) until August 2019. The payments do not support Ms Weale’s implied assertion that she lived in the property and paid half of the borrowings from April 2015 until February 2022. I do not therefore accept that Ms Weale paid $200 per week from the time that the property was purchased.
[28] There is then Mr Lovell’s assertions (although not on oath) that he had repaid Ms Weale and had paid for her and her son to go to the United Kingdom.
[29] Given the discrepancies in the evidence, I am not satisfied that it establishes that the parties had agreed to purchase the property together and to contribute equally to the mortgage payments. There is no evidence of Ms Weale contributing to any mortgage payments until August 2019.
[30] Further, Mr Lovell was liable for any lending secured against the property. His handwritten note suggests this required weekly payments of approximately $500. He appears to have paid any borrowings from April 2015 until August 2019 on his own. Mr Lovell’s position appears to be that Ms Weale was a tenant and that he charged her subsidised rent. Ms Weale’s response to the “reduced rent” was that this was because they were both living at the property. Ms Weale however, does not explain why there are no payments until August 2019 some four years after the purchase. That suggests that the $32,000 may have been an advance for payment of rent, a loan to Mr Lovell, or a contribution to the purchase price.
[31] There is then the issue of whether Mr Lovell holds the property pursuant to a constructive trust. That requires that the plaintiff contributed more than a minor way to the acquisition, preservation or enhancement of the property and that the parties must be taken to have expected that the plaintiff will share in them as a result.13 The contributions of the plaintiff must manifestly exceed the benefit that the plaintiff derives from the arrangement.14
[32] It is unclear whether the funds were advanced to purchase the property because the transfers were six to nine days after the purchase. Even if the $32,000 was a contribution to the property purchase price, Ms Weale has not provided any evidence that she made any further contributions to the property until August 2019, some four and a half years later. Ms Weale appears to have resided at the property from the time it was purchased in 2015 without any further payment until 2019. I am not satisfied that the contribution manifestly exceeds the benefit she received. If the parties intended that they would own the property equally, or in proportion to their contribution to the purchase price, Ms Weale would have been liable for her share of the property’s expenses (maintenance, rates, insurance). If Ms Weale had understood
13 Lankow v Rose [1995] 1 NZLR 2777.
14 Parkins v Parkins [2022] NZHC 606.
that she was an owner with Mr Lovell, there is no explanation for why she started paying rent in August 2019.
Conclusion
[33] I am not satisfied that the evidence advanced by the estate is sufficient to establish, on the balance of probabilities, that Mr Lovell holds the property on trust for Ms Weale for the reasons below:
(a)Ms Weale advanced funds to Mr Lovell after he purchased the property.
(b)Ms Weale recorded the payments to Mr Lovell in 2019 to 2021 as “rent”. That is consistent with Mr Lovell’s assertion that she was a tenant and not an owner of the property.
(c)Mr Lovell has asserted that he repaid Ms Weale and paid for her to travel to the United Kingdom. In the absence of the Court being able to hear from Mr Lovell and Ms Weale, there remain credibility issues which count against determining that the monies were advanced to purchase the property.
(d)If I am wrong and the $32,000 was paid as a contribution to the purchase price, the contribution did not manifestly exceed the benefits Ms Weale received because she resided in the property without paying anything further for four and a half years. She also resided in the property from July 2021 to November 2022 without contributing to any property expenses.
[34] For the reasons above, I am not satisfied that the evidence establishes a trust (whether resulting or constructive) in favour of Ms Weale. I therefore dismiss the claim.
Tahana J
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