Thompson v Parlour [2012] NZHC 3096 (21 November 2012)

Last Updated: 19 February 2013

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-6103 [2012] NZHC 3096

UNDER the Land Transfer Act 1952

BETWEEN TREVOR WAYNE THOMPSON AND SW TRUST SERVICES LIMITED AS TRUSTEES OF THE EL DORADO TRUST

Applicants

AND MYRA GRACE PARLOUR Respondent

Hearing: 19 November 2012

Appearances: C M Murphy and P T Hall for Applicants

J D Noble for Respondent

Judgment: 21 November 2012

_{JUDGMENT OF PETERS J}

This judgment was delivered by Justice Peters on 21 November 2012 at 11 am pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date: ...................................

Solicitors:

Simpson Western, Auckland: [e-mail] / [e-mail]

Boyle Mathieson, Auckland: [e-mail]

THOMPSON V PARLOUR HC AK CIV-2012-404-6103 [21 November 2012]

[1] The Applicants (“Trustees”) seek orders:

(a) that the notice of claim (“notice”) lodged by the Respondent under s 42 Property (Relationships) Act 1976 (“Act”) against the title to the property at 32 Earlsworth Road, Mangere East, Manukau, Auckland (“property”), being more particularly described as an estate in fee simple with a Unique Identifier of NA494/221, North Auckland Registry be removed; and

(b) costs on a solicitor and client basis. [2] The Respondent opposes the application.

[3] The Trustees are the trustees of the El Dorado Trust (“Trust”) and are the registered proprietors of the property. The Respondent has lodged the notice on the basis that she has a claim to an interest in the property by virtue of a de facto relationship with Mr Thompson, the first named trustee. Mr Thompson denies the relationship. The Trustees deny that the Respondent has an interest in the property.

[4] The parties have filed affidavits in support of their respective positions. There is a substantial conflict on the evidence as to critical matters. At the hearing on 19 November 2012, counsel for the Respondent informed me that the Respondent commenced proceedings in the Family Court on 15 November 2012. My decision is reached on the affidavit evidence before me and nothing I say should be taken as pre-empting any decision that the Family Court might reach.

[5] It is common ground between the parties that the principles set out in the Court of Appeal’s judgment in SM v ASB Bank Ltd[1] are to be applied in determining the Trustees’ application. The principles are as follows:

[35] The principles applying to applications for removal of caveats under s 143 of the [Land Transfer Act] are well-established. The onus is on the caveator to show that he or she has a reasonably arguable case for the interest claimed. Even if a reasonably arguable case to sustain the relevant

interest is established, the court may nevertheless make an order for removal where it is satisfied that the caveator can have no reasonable expectation of obtaining a benefit from the continuance of the caveat or if the caveator’s interest can be reasonably accommodated in some other way. It is not in dispute that these principles apply equally to an application to remove a notice of claim of interest under the [Act]. (citations omitted).

[6] Accordingly, the issues which arise are:

(a) whether the Respondent has a reasonably arguable case for the interest claimed; and

(b) if so, should the Court nevertheless make an order for removal.

Discussion

[7] In her affidavit evidence the Respondent contends that she was in a de facto relationship with Mr Thompson between December 2011 and September 2012 and that the property was purchased for her or for them both to live in. I say more below about the circumstances in which the property was purchased.

[8] In his evidence, Mr Thompson denies that such a relationship existed at the time alleged and denies that the property was purchased for the reason alleged. Mr Thompson’s evidence is that he and the Respondent lived together for a short period from November 2004 to the end of February 2005, and that any relationship thereafter was purely one of friendship. Mr Thompson’s denial of such a relationship is supported by affidavits from close friends and family members.

[9] It is not possible to resolve this conflict of evidence but regardless, on the Respondent’s own evidence, any relationship would be of about 10 months’, and therefore of short, duration.[2]

[10] Section 14A of the Act sets out the circumstances in which the Court may make an order for the division of relationship property where there has been a de facto relationship of short duration. It is common ground that to obtain an order in this case the Respondent would have to satisfy the Court that she had made a

substantial contribution to the relationship and that a failure to make an order would result in serious injustice.[3] I have reservations as to whether, on the evidence at present, it could be said that the Respondent made a substantial contribution to the relationship.

[11] There are, however, two more important points in my view.

[12] The first is that I am not satisfied that the property is, or ever has been, relationship property within s 8 of the Act and the second is that the Trustees became bound to an unconditional contract to sell the property to independent third parties before they received notice of the claim.

Relationship property

[13] The Trustees’ case is that the property is not, and never has been, relationship property. There is no dispute that the Trustees are the registered proprietors but the Respondent’s contention is that Mr Thompson disposed of the property to the Trust after problems arose in the alleged relationship.

[14] The facts relevant to this part of the case are as follows.

[15] Mr Thompson settled the Trust by Deed of Trust dated 1 October 2003. The Trust is a discretionary trust, with the beneficiaries including Mr Thompson, his children and their children (if any). As a general rule, a discretionary beneficiary does not have an interest in trust assets. The Respondent submits, however, that the property is relationship property or subject to claw back under s 44 of the Act on the basis that Mr Thompson nominated the Trustees as purchasers and that an inference can be drawn that he did so to defeat any claim that the Respondent might make.

[16] I do not consider that I can draw any such inference on the affidavit evidence before me.

[17] Mr Thompson entered into the agreement for the purchase of the property (“agreement”) on or about 25 June 2012. The purchase price was $310,000.00. The agreement provided that the purchaser was “Trevor Wayne Thompson and or nominee”. Mr Thompson’s evidence is that he entered into the agreement in the expectation that he would nominate the Trustees as purchaser but that it was more convenient for him to enter into, and negotiate, the agreement in his name alone.

[18] The evidence filed to date includes an affidavit sworn by Sarah Elizabeth O’Grady on 19 November 2012. Ms O’Grady is a solicitor employed by Simpson Western, the firm of solicitors acting for the Trustees in this proceeding and that acted on the purchase of the property. Ms O’Grady’s evidence is that the firm was informed in the early part of 2012 that the Trustees might purchase a property and that Simpson Western opened a file in the Trustees’ name on 14 March 2012 re “Purchase of Property 2012”. The solicitors altered the reference on their file to “Purchase of 32 Earlsworth Road, Mangere East” on 5 July 2012; on 10 July 2012 they sent an engagement letter to the Trustees in respect of the purchase; and the vendors’ settlement statement dated 23 July 2012 records the Trustees as the purchaser.

[19] In my view the preponderance of that evidence is consistent with the view that it was always intended the Trustees would acquire the property in their capacity as Trustees of the trust.

Sale

[20] Then there is the matter of the sale that is now on foot. The critical point is that the Trustees bound themselves to sell before they received notice of the Respondent’s claim. If the notice of claim is preserved, there is a clear risk that the purchasers will cancel and sue the Trustees for any loss caused as a result of the Trustees’ failure to settle.

[21] The Trustees entered into an agreement for sale of the property on

16 September 2012. The purchasers are independent third parties. The sale price is

$330,000.00. The agreement became unconditional on 28 September 2012 and on

3 October 2012 the parties agreed that settlement would take place on 9 October

2012.

[22] Although the Respondent lodged the notice on or about 1 October 2012, the Trustees did not learn of the notice until 5 October 2012. The Trustees’ solicitors wrote to the Respondent’s solicitors the same day, took issue with the notice and advised that the notice would prevent settlement if it were not removed before

9 October 2012. The Respondent did not remove the notice and she has refused subsequent requests that she do so.

[23] The Trustees are unable to settle whilst the notice is lodged against the title. The purchasers served a settlement notice on 9 October 2012 and interest for late settlement is now accruing at the rate of 12 per cent per annum. The equity in the property is estimated to be approximately $40,000 less the sum of the accrued interest for late settlement.

[24] Given my doubts as to whether the Respondent has an arguable case for the interest claimed and given the matter of the sale, I propose to make the order that the Trustees seek in [1](a) above.

[25] I have considered whether I ought to impose any conditions on the removal of the notice.

[26] As I understand it, once the sale is settled, the Trustees will repay advances made to them to enable the purchase of the property. These advances were made to them by a bank and by Mr Thompson, the advance from Mr Thompson being funded in whole or in part by a third party, Mr Ian Redpath.

[27] I have considered whether I should require that a sum from the proceeds of sale be retained in trust for a period to protect the Respondent. I have decided not to do so for the following reasons.

[28] The Respondent’s dispute is with Mr Thompson, not the Trustees. Mr Thompson was not a party to the application in his personal capacity. He does,

however, have assets which might be preserved, if not by consent, by order of the Court, to ensure that the Respondent’s position is protected. The Family Court is now seized of the issues between the parties and it is open to the Respondent to seek an order from the Family Court to protect her position if she wishes. There is evidence that Mr Thompson has interests in other assets which are available to meet any entitlement that the Respondent may have.

Result

[29] I make an order in terms of paragraph [1](a) above.

[30] I did not hear submissions as to costs. I reserve costs at present. As I understand it, the Respondent is legally aided but the parties may submit memoranda as to costs if they wish.

.................................................................

M Peters J

---

[1] SM v ASB Bank Ltd [2012] NZCA 103.
[2] Property (Relationships) Act 1976, s 2E(1)(b).

[3] Ibid, s 14A.