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High Court of New Zealand Decisions |
Last Updated: 27 August 2013
IN THE HIGH COURT OF NEW ZEALAND GREYMOUTH REGISTRY
CIV2012-418-000146 [2013] NZHC 2106
BETWEEN ANTHONY JOHN MINTO Applicant
AND KEVIN JOHN PARKINSON Defendant
Hearing: 14 August 2013
Counsel: R W Maze for Applicant
J G O'Connell for Respondent
Judgment: 19 August 2013
JUDGMENT OF WHATA J
[1] Mr Minto owns a property at 31 Nelson Quay, Cobden. Mr Parkinson has resided at the property for several years. Mr Minto complains that Mr Parkinson has not been paying rent for some time, in breach of a lease agreement. Mr Parkinson says that he acquired the property pursuant to a rent to buy agreement and that Mr Minto is estopped from denying his right to be there.
[2] I am to resolve whether or not I should grant Mr Minto his application for an order for possession of land. Ultimately the key issue is whether Mr Parkinson has a legal or equitable right to occupy the property.
Background
[3] Mr Minto is the registered proprietor of a property located at 31 Nelson Quay, Cobden being 612 square metres more or less on Lot 1 Deposited Plan 925. The property was previously owned by Mr Minto together with his then partner,
Ms Shirley Joy Way.
MINTO v PARKINSON [2013] NZHC 2106 [19 August 2013]
[4] On 25 February 2000 Ms Way entered into an agreement for sale and purchase with Kevin John Parkinson, the respondent. This agreement purports to record the following:
Anthony Minto & Shirley Way have agreed that when: KEVIN PARKINSON has paid the full amount of thirty-five thousand dollars (35,000) on a “RENT TO BUY BASIS” which will complete the loan to the ANZ/Postbank for the mortgage on the property of 31 Nelson Quay, Cobden, Greymouth, that Tony & Shirley will sign over the deeds and title of the property to KEVIN PARKINSON.
KEVIN PARKINSON Agrees that they/he will re-clad the house or at least the west side of the house by winter 2000. The rest to be completed within
18 months of ownership by rent.
[5] The agreement also records:
Should KEVIN PARKINSON renege on any contract agreement signed by both them & us, re: the house on Nelson Quay Cobden, then they will receive exactly NIL amount of monetary compensation and Shirley and Tony will expect to be compensated for any costs needed or spent on any repairs, missed rates, insurance, repayments and / or loan while the house remains empty and unsold.
[6] There are other terms to this “rent to buy” agreement, namely requirements to maintain and upkeep the property, to provide for insurance, and:
Should you wish to walk out on the property at any time a courtesy call to [named neighbour]. Will be much appreciated, as she will always have a contact number for Shirley.
[7] The agreement is signed by Shirley Way and by Kevin Parkinson and is witnessed by a Judith Alice Ellery and a Justice of the Peace.
[8] Mr Minto was not aware that Ms Way and Mr Parkinson had entered this contract as he was residing, he says, in Queensland, Australia. He did not discover that there was any such agreement until 2003. Once he became aware of the agreement he instructed a solicitor, Ms Connors, to write to Mr Parkinson and to advise him that Ms Way did not have authority and that the contract was not valid. He said that he was prepared to enter into negotiations with him to purchase the property but not on the terms contained in the contract. The evidence tendered by Mr Minto in support of this is contained in a letter apparently drafted by Ms Connors and dated 1 March 2004. That letter states:
We have received instructions from Tony Minto who resides in Queensland. He has now secured a copy of an “agreement” dated 25 February 2000 signed by yourself, Shirley Way and witnessed by Mr & Mrs Ellery. Our client had never seen that agreement nor was he aware of the contents. We have discussed it with him and are sending him a copy.
The property at Nelson Quay is owned by Shirley Way and Tony Minto as tenants in common as to a half share. That being so, Shirley Way probably was entitled to enter into some agreement to sell you her half share. She however had no authority to sell the share of Mr Minto.
If you do wish to purchase his share, then he is prepared to entertain a proposal. Given the complicated nature of this and presumably your expectations from the dealings with Ms Way, I suggest that you consult a solicitor and take their advice as to your position. Please have that person contact us if you do wish to pursue a purchase.
In doing so I suggest that you obtain an appraisal so that that can be submitted to Mr Minto in Australia with our recommendation.
[9] Then on 24 December 2004 a caveat was registered by Mr Parkinson on the property. The caveat relied on the rent to buy agreement. In March 2005 Mr Minto’s lawyer wrote to Mr Parkinson’s solicitors expressly denying that Mr Parkinson had any right under the agreement but repeating that Mr Minto was prepared to sell his interest in the property. In relation to Ms Way the letter also notes:
We do not act for Shirley Way and do not know her intentions in this regard. However presumably as your client’s initial dealings were with her he has some arrangement with her he can pursue.
[10] Mr Parkinson did not respond to any of this correspondence or subsequent letters dated 25 March, 20 June and 29 October 2005 disputing the caveat and seeking additional rent. The October letter also foreshadowed a Tenancy Tribunal claim.
[11] At about the same time as the October letter, Mr Minto entered into an agreement with Ms Way for the purchase of her interest in the property. That agreement records among other things:
(a) That the parties are each the owner of one half share in the residential property at 31 Nelson Quay, Cobden;
(b) That the vendor has now agreed to transfer her half share in that
property to Mr Minto;
(c) Then on payment of the purchase price Ms Way would transfer all her interest in the property to Mr Minto;
(d) “Immediately following settlement, the PURCHASER (Mr Minto) shall take steps to remove any existing tenants, remove the caveat by Kevin Parkinson (“the Caveat”), and place the NELSON QUAY PROPERTY on the market for sale to a third party. It is acknowledged that the PURCHASER shall be under no obligation to obtain the best price, nor shall the PURCHASER be liable for any delays, losses, reduction in value, or costs that may be incurred or occur as a consequence of delay or indulgence given to any third party”;
(e) After payment of specified debts, Mr Minto was to account to Ms Way for the equivalent of one half share of the net proceeds of sale.
[12] The caveat lapsed in January 2006.
[13] Matters then drifted until 23 March 2007 when Mr Minto wrote to Mr Parkinson through a Real Estate company giving Mr Parkinson 42 days’ notice to vacate. This was followed by a proceeding in October 2007 before the Tenancy Tribunal. The Tenancy Tribunal rejected Mr Minto’s claim. The Tenancy Tribunal noted:
This matter appears to involve an agreement for sale and purchase dated
25/2/00 and accordingly it appears that this Tribunal does not have jurisdiction. It is in the nature of a long term agreement for sale and [purchase] and not a residential tenancy.
[14] Nothing of substance occurred until 24 December 2009 when Mr Minto served on Mr Parkinson a notice of termination of tenancy as he had ceased paying rental for the property. Mr Minto says that due to a family tragedy in 2009 he has
not been in a position to actively pursue this issue since the service of the notice to quit.
Mr Parkinson’s response
[15] Mr Parkinson says that there has never been any lease agreement of any nature and that his occupation has always been pursuant to what he calls the “rent to buy agreement”.
[16] He says that before February 2000 he had heard that the property was going up for mortgagee sale and so he approached one of the co-owners at the property at the time, Ms Way, and offered to enter into the rent to buy agreement. He says that pursuant to that agreement he paid $1,000 cash to her. He then arranged to pay a total of $150 per week comprised of $130 per week for Ms Way’s mortgage and $20 per week for rates and house insurance. He thought that the price agreed was simply what was owing under the mortgage.
[17] He says that he presumed that Mr Minto knew about this agreement because his name had been typed up on the written form and because Ms Way told him that he had gone to Australia. He conceded under cross-examination however that he assumed Ms Way was in control and Mr Minto had no interest in the property.
[18] In accordance with the agreement, he says he set about making payments of the mortgage, rates and insurance to a nominated bank account.
[19] He then says he first heard from the applicant three or four years later. He says that Mr Minto asked if he could help pay $2,000 to make up some of the shortfall owing to the ANZ bank. Mr Parkinson said he was unable to help him. He says they met and went to the ANZ bank and changed the bank account over to Mr Minto’s name and then Mr Parkinson continued to pay as usual.
[20] He says that a few years later the applicant phoned him and said that he wanted a loan on the house. By this time Mr Parkinson said he had paid more than the $35,000 owing under the agreement and stopped making the weekly payments.
He says that Mr Minto acknowledged that Mr Parkinson had paid for the house but that Mr Minto had not received any share of the payments.
[21] He recalls receiving a letter from B H Connors, solicitor. In response he instructed a solicitor to lodge a caveat then records receiving a letter informing him that his caveat had lapsed on 11 January 2006. He recalls receiving a further letter from B H Connors dated 23 March 2005 but he ignored these letters because he thought he could rely on the agreement because of advice he had received.
[22] He also recalls receiving correspondence from local property managers in the period 20 June 2005 to 4 May 2007. He says he ignored this correspondence as well.
[23] He also says that he has carried out a number of improvements on the property. He says he has undertaken the following repairs:
a) Fitted new aluminium windows in the patio.
b) Fitted new aluminium sliding back door from the patio. c) Installed a new stove.
d) Installed a new hot water cylinder.
f) Installed a roof beam above the wood burner to rectify roof sag
caused by someone’s prior removal of the wall.
g) Painted the house and the roof.
[24] He says that he has tried to insure the property separately but cannot do so
because it is in the applicant’s name.
Assessment of evidence
[25] With the benefit of the evidence, it is clear to me that:
(a) Mr Minto had no knowledge of the agreement between Mr Parkinson and Ms Way until 2003;
(b) Mr Parkinson knew that Mr Minto and Ms Way had separated and assumed that Mr Minto had no interest in the property at the time he signed the agreement;
(c) There was never any meeting of minds at any time between Mr Parkinson and Mr Minto in terms of the legal basis for Mr Parkinson’s occupation of the property – both simply asserted their respective legal positions;
(d) Mr Parkinson never relied on any representation from Mr Minto as to his legal entitlements. Rather he simply asserted rights under the rent to buy agreement in the face of Mr Minto’s rejection of it.
[26] Mr Maze sought a finding that Mr Parkinson either knew that Ms Way was acting without authority or was wilfully blind to that fact. I am not prepared to make that finding. I accept as plausible that he simply thought Ms Way controlled the property without recourse to Mr Minto. What is clear, as I have said, is that Mr Parkinson did not think that Mr Minto had given his authority for the purchase. Nor do I accept that Mr Minto said to him at any stage that he approved or accepted that there was a valid rent to buy agreement.
The claim and opposition
[27] Mr Minto’s application makes the following claims:
(a) Mr Minto is the owner of the property;
(b) Mr Parkinson is the occupier of the property;
(c) There is a lease agreement in existence between the applicant and the respondent evidenced by:
(i) Mr Parkinson is in occupation of the property; and
(ii) He was at that time paying rent;
(iii) The applicant allowed Mr Parkinson to remain in possession of the property in exchange for the payment of rent;
(d) Accordingly Mr Parkinson’s lease was in the nature of a tenancy at will, the terms of which required payment of $150 per week by Mr Parkinson to the owner, ie Mr Minto.
(e) The respondent is in breach of the lease agreement having stopped payments in 2006;
(f) A notice was served on the respondent to quit on 24 December 2009; (g) The respondent has failed or refused to vacate the land.
[28] Mr Parkinson opposes the application on the following grounds:
(a) There has never been any lease in existence between the parties;
(b) The principle of equitable estoppel is established based on the applicant’s actions in affirming a continuation of the rent to buy agreement in the parties’ own discussions and face to face meetings and the acceptance of the monies being paid by the respondent being transferred from Ms Way’s account to his own and his acknowledgement and acceptance of the improvements made to the property;
(c) The rent to buy agreement created an equitable interest in the property
which was affirmed by the applicant’s own actions.
Assessment
[29] In light of the evidence it is abundantly clear that there was no lease. The parties never agreed that there was a tenancy in the nature of a lease as between them. Mr Minto simply asserted that the rent to buy agreement was invalid and assumed that there was a tenancy, while Mr Parkinson insisted that it was valid and that he had a legal right to occupy as the owner of the property under the rent to buy agreement. His caveat and strident refusal to engage in discussion about rental increases is ample evidence of his position. Mr Minto’s application under the auspices of s 248 of the Property Law Act 2007 therefore cannot succeed, because there is no lease to terminate.
[30] But the absence of the lease then begs the question as to Mr Parkinson’s status in respect of the property and I invited Mr Maze to consider whether the pleadings needed to be amended. Without conceding the position, he sought leave to amend the pleadings so that an alternative claim could be resolved, namely whether Mr Parkinson has a legal or equitable right to occupy the property. Mr O’Connell opposed this course. He said the better approach is to determine the proceedings on the pleadings, allow the parties to reflect on their positions and if necessary file further applications directed to the known facts.
[31] Rule 1.9(2) of the High Court Rules allows:
1.9 Amendment of defects and errors
...
(2) The court may, at any stage of a proceeding, make, either on its own initiative or on the application of a party to the proceedings, any amendments to any pleading or the procedure in the proceeding that are necessary for determining the real controversy between the parties.
...
[32] This is a case, as Mr Maze put it, crying out for resolution of the real controversy. The basis for Mr Parkinson’s occupation has been disputed since at least 2003. He has not been paying rent since 2007 and the Tenancy Tribunal refused to consider Mr Minto’s application for want of jurisdiction. This then is the sensible forum for resolution of the respective claims. In addition, I see no
unfairness to Mr Parkinson. He must have known that his legal and equitable entitlements were squarely in issue.
[33] I therefore allow an amendment to the proceedings to enable consideration of whether Mr Parkinson has a legal or equitable entitlement to occupy the property.
Resolution
[34] In my view, the rent to buy agreement cannot be enforced against Mr Minto. First, Mr Minto, being at the key time a part owner of the property, did not sign the agreement. There is nothing to suggest on the evidence that Ms Way had ostensible authority to sign on his behalf or that Mr Parkinson was led to believe that Ms Way signed on his behalf with his authority. Quite the reverse, Mr Parkinson said he assumed that Ms Way was in control and that Mr Minto had no interest in the property. The agreement, therefore, on its face, is not enforceable against Mr Minto in terms of s 24 of the Property Law Act 2007 or its preceding equivalent, and s 2 of the Contracts Enforcement Act 1956. As Tipping J observed in T A Dellaca v PDL
Industries Ltd :[1]
Section 2(2) of the Act provides that a contract such as that in issue in the present case shall not be enforceable by action unless the contract or some memorandum or note thereof is in writing and is signed by the party to be charged therewith or by some person lawfully authorised by him. It is beyond doubt that the contract, memorandum or note must contain all the material terms of the contract sought to be enforced. ...
[35] Mr O’Connell nevertheless argued that I should interpret the agreement to mean that Ms Way’s half share was transferred to Mr Parkinson. But in reality the agreement cannot bear that qualification without fundamentally altering its essential terms. The agreement purports to “sign over the deeds and title of the property to KEVIN PARKINSON.” That cannot be sensibly qualified to simply assign only Ms Way’s half share. Further and in any event, any purported assignment of a right to permanently occupy by virtue of the sale cannot be enforced against Mr Minto for
the reasons just expressed.
[36] Mr O’Connell’s plea to equity does not assist Mr Parkinson. No authorities
were cited to me, but the relevant principles are well established:[2]
19.2 Invoking modern equitable estoppel doctrine: elements
Although the modern approach is “to depart from strict criteria and to direct attention to overall unconscionable behaviour” it is nevertheless clear that the party alleging an estoppel must show that:
(a) A belief or expectation has been created or encouraged through some action, representation, or omission to act by the party against whom the estoppel is alleged;
(b) The belief or expectation has been reasonably relied on by the party alleging the estoppel;
(c) Detriment will be suffered if the belief or expectation is departed from; and
(d) It would be unconscionable for the party against whom the estoppel is alleged to depart from the belief or expectation.
[37] First the agreement was signed by Mr Parkinson knowing that he did not have Mr Minto’s authority – he assumed Mr Minto had no interest and there was no representation by Mr Minto or Ms Way implying that he had given his authority. Second, Mr Minto never affirmed by conduct or otherwise that Mr Parkinson had an enforceable right of ownership. While the correspondence admitted the possibility of Mr Parkinson acquiring a half share, it never suggested that Mr Minto accepted that Mr Parkinson held an interest in the land itself enforceable against Mr Minto. Third, Mr Parkinson never relied on any such representation. He simply asserted his rights under the agreement from the outset. He remained on the property and paid rent in furtherance of his asserted rights under the agreement, not because he believed Mr Minto had affirmed the agreement. Fourth, the detriment suffered resulted from Mr Parkinson’s insistence that he was entitled to occupy under the rent to buy agreement and in the face of Mr Minto’s statements that it was not valid. Fifth, I see nothing unconscionable in Mr Minto receiving the rent payments. He clearly signalled to Mr Parkinson that he was receiving those payments as part of a
tenancy, not as part of the rent to buy agreement.
[38] Mr Minto’s acquisition of Ms Way’s half share, knowing that Ms Way has purported to sell the property to Mr Parkinson is however problematic. But I accept Mr Maze’s submission that Mr Minto could legitimately treat the agreement between Ms Way and Mr Parkinson as invalid and proceed to regularise ownership of the property in the way that he did.
[39] Having said all of the above, none of this should be taken to preclude whatever claims Mr Parkinson may have:
(a) Against Ms Way for (on the evidence before me) misrepresenting that she had authority to assign the property to him; and/or
(b) Against Ms Way in respect of the rent to buy agreement; and/or
(c) Against Mr Minto for any payment made under the invalid agreement or for improvements to the property undertaken by Mr Parkinson.
[40] I offer no view as to the merits of any such claims, except that my decision does not by itself preclude them.
[41] Given the above, I find that Mr Parkinson does not hold a legal or equitable right to occupy the property enforceable against Mr Minto as the registered proprietor of it.
Result
[42] I make the following orders:
(a) I declare that Mr Parkinson has no legal or equitable right to occupy the property located at 31 Nelson Quay, Cobden, enforceable against Mr Minto;
(b) I grant leave to the parties to file submissions on consequential relief within ten working days;
(c) I reserve leave to the parties to seek the further assistance of the Court within ten working days.
[43] I am minded to let costs lie where they fall. Mr Minto did not succeed on his pleaded action. However the underlying dispute was resolved in his favour. Nevertheless, if the parties cannot agree, I grant leave to file submissions of no greater than three pages in length.
Solicitors:
R A Fraser & Associates, Christchurch
Purnell Creighton, Christchurch
[1] T A Dellaca v PDL Industries Ltd [1992] 3 NZLR 88 (HC) at 97-98.
[2] James Every-Palmer “Equitable Estoppel” in Andrew Butler (ed) Equity and Trusts in New
Zealand (2nd ed, Thomson Reuters, Wellington, 2009) 601 at 613-614.
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