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High Court of New Zealand Decisions |
Last Updated: 7 December 2018
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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
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CIV-2018-404-001109
[2018] NZHC 3087 |
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BETWEEN
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PAUL THOMAS JOHNSTON
Plaintiff
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AND
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LYNDA IRENE COOPER
Defendant
JOHN GARTH COOPER
Second Defendant
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Hearing:
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30 October 2018
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Appearances:
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S R G Judd for the Plaintiff
N Scampion for the Defendant
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Judgment:
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27 November 2018
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JUDGMENT OF ASSOCIATE JUDGE SARGISSON
This judgment was delivered by me on 27 November 2018 at 3.00 p.m. pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date.......................................
Solicitors:
Paddy Orr & Co, Auckland Smith & Partners, Auckland
S R G Judd, Auckland N Scampion, Auckland
JOHNSTON v COOPER [2018] NZHC 3087 [27 November 2018]
Introduction
[1] Few legal principles are more firmly established than that a registered proprietor is entitled to maintain or recover possession of their land against all other persons.
[2] That is the principle relied upon here by the plaintiff, Paul Johnston, who seeks summary judgment on his claim for an order for possession of his property in Cornwallis. Though Mr Johnston is the registered proprietor, the property has been occupied by the defendants — Lynda Cooper (Mr Johnston’s sister) and John Cooper (her husband).
[3] The nature of the Coopers’ occupancy is disputed. The arrangement was informal, unsupported by any written contract. For Mr Johnston, counsel argues the defendants occupied the property under an implied licence, revocable at will. Counsel for the defendants counters that Mr Johnston granted the defendants (or at least Ms Cooper) a lease for life over the property. He also relies on a defence of equitable estoppel in reliance on Mr Johnston’s representations to that effect.
[4] The present dispute arose because Mr Johnston decided, in late 2007, he no longer wants the Coopers to occupy his property. But despite a notice to vacate, trespass notice, and application to the Tenancy Tribunal, the defendants remain unmoved. Attempts to settle the dispute out of court have, regrettably, come to nothing. So Mr Johnston commenced these proceedings on 7 June 2018.
Legal principles
[5] Plaintiff summary judgment is provided for in High Court Rule 12.2(1). The driving question is whether the defendants have no defence to the claim.1 The Court must be left without any real doubt or uncertainty.2 The onus is on the plaintiff, but
1 Pemberton v Chappell [1986] NZCA 112; [1987] 1 NZLR 1, (1986) 1 PRNZ 183 (CA) at 185.
2 Krukziener v Hanover Finance [2008] NZCA 187, (2008) 19 PRNZ 162 at [26].
where evidence is sufficient to show there is no defence, the onus shifts to the defendants to demonstrate why the application should not succeed.3
[6] As is typical for such applications, this case is characterised by substantial factual disagreements, and summary judgment is not the appropriate procedure for resolving them all, or for assessing the credibility of the deponents. Still, the court need not uncritically accept evidence that is inherently lacking in credibility.4 Overall, it may take a robust and realistic approach to the evidence.
Factual background: the 2003 letter
[7] The Coopers (or initially, just Ms Cooper) have lived in various properties owed by Mr Johnston since around 1988. Mr Johnston never drew up written agreements to govern their arrangements, or required any payment of bond; but a weekly payment of rent is a consistent feature. The Coopers moved into the Cornwallis property in 2001, where they paid $250 dollars per week. They also paid the rates from about 2005 onwards.5
[8] Most of what we can learn about the parties’ arrangement concerning the property comes from a letter sent by Mr Johnston to the Coopers on 18 September 2013. The letter begins:
The matter I am referring to is the $30,000 of your money which you gave me around 25 years ago.
[9] It is common ground this sum was transferred to Mr Johnston in the late 1980s,6 following Ms Cooper’s divorce settlement with her previous husband. Ms Cooper deposes Mr Johnston “offered to invest [the money] on my behalf. I trusted my brother to look after this money for me”. Mr Johnston’s letter goes on to explain his understanding of the $30,0000 and its connection with the Coopers’ occupation of his property:
3 MacLean v Stewart (1997) 11 PRNZ 66 (CA).
4 Krukziener v Hanover Finance limited, above n 3, at [26].
6 Whether in 1985 (as she says) or 1988 (as he says).
The arrangement at the time was that I would use the money to save interest on the house that you were renting and that you would receive cheap rent. The main reason for this at the time was to hide the money from [Work and Income New Zealand].7 We never really made any formal arrangement around how long this would go on for nor what interest rate would be used for the calculation.
In the early days the rate of interest and the rent saved did not have too large a gap. However this has changed dramatically over the years with your rent now being around $200 below market whereas interest on $30k is running at around $34 per week. This large difference has been the case for many years. However, during those years, I have been earning good money and have always been very happy to help you out even though this no longer equated. However it is fair to say that I had considered that this $30k had been written off as part of this large shortfall over many years. I perhaps should not have assumed that you felt the same way. I did not release until your comment that I have mentioned above that you considered you were still owned the $30k.
[10] With that backdrop, the letter then explains the Coopers’ options going forward:
What I want to do now is clear up this matter. I would like you and [Mr Cooper] to think about what is the best course for you. My suggestion is that either:
- you write off the $30k and continue to pay the $250 per week rent
- I pay you the $30k and rental goes to market value. I think this is probably somewhere around $450 but we can have a valuation done for this if you would like.
Alternatively, you may have some other suggestion. I am not really worried about which course we take but I would like it cleared up now so it is no longer an issue. Please give this some thought and then we can set down and have a talk about it.
[11] If the Coopers gave a written response, it is not in evidence. Ms Cooper’s evidence is that the parties met in person and it was agreed the Coopers would take the former route. That is, the parties agreed the rent payments continued at
$250 per week.
[12] Sometime in late 2017, however, Mr Johnston decided he no longer wanted the defendants occupying the property. He intended to prepare it for sale, as part of arranging his affairs for retirement. But when the Coopers initially refused to leave,
on 4 March 2018 Mr Johnston issued notice under the Residential Tenancies Act 1986 giving the defendants 42 days’ notice to vacate. The defendants had not left when the compliance period expired on 19 April 2018, and so Mr Johnston subsequently served a trespass notice in April 2018.
Tenancy Tribunal: res judicata
[13] The matter eventually went to the Tenancy Tribunal. On 24 May 2018, the Tribunal declined jurisdiction given its finding that the arrangement between the parties was “of a predominantly family nature rather than a predominantly commercial nature”.8 Such was the argument explicitly, and successfully, advanced by the Coopers.
[14] The Tribunal’s decision does not refer to the ‘life interest’ argument relied upon in opposition to this application. I infer it was not raised before the Tribunal. Counsel for Mr Johnston therefore asks whether the Coopers are estopped from raising it now. I consider not. I am not persuaded their respective submissions, before the Tribunal and now me, are necessarily in conflict. More fundamentally, res judicata does not apply because “[a] Court which declines jurisdiction cannot bind parties by its reasons for declining jurisdiction”.9
[15] For completeness, I note the Tribunal’s brief conclusion — that the Coopers reside at the property “under an implied licence to occupy” — also does not bind this Court.
Is there a tenable defence?
[16] As registered proprietor, Mr Johnston is clearly entitled to possession unless the Coopers can demonstrate a relevant legal or equitable interest in the land.
[17] The Coopers submit Mr Johnston granted the Coopers, explicitly or by implication, a life interest in the Cornwallis property (specifically, either an estate for
life or, more likely, a lease for life). Such an interest must be predicated on an enforceable contract.
[18] That contractual arrangement was apparently established when the Coopers first moved in; it is alleged Mr Johnston told them words to the effect that they should ‘treat the property like their own’, and even that ‘the property is yours’. Mr Johnston disputes making these statements and they are unsupported by any corroborating evidence. To this extent, his evidence amounts to bare assertion.
[19] But the Coopers then rely on the 18 September 2013 letter as a written affirmation, and perhaps variation, of that prior oral agreement. (An alternative submission is that the Coopers’ acceptance of the letter forms the origins of a new agreement). Ms Cooper deposes the agreement has four essential terms:
(a) Mr Johnston would keep the lump sum of $30,000, which means the Coopers would give up any rights to claim it back;
(b) The Coopers would continue to pay rent at $250 per week,
(c) The Coopers would also continue to pay council rates and maintenance costs; and
(d) The agreement was to continue indefinitely, which is then unpacked to mean for the duration of Ms Cooper’s life.
[20] The first two terms are obviously borne out by Mr Johnston’s words; but as to the third, the letter makes no explicit mention of either rates or maintenance. Even more problematic is that the letter is entirely silent as to the duration of the arrangement.
[21] Counsel argued a lifelong duration can be implied, but such a bold term is hardly necessary to give business efficacy to the agreement, nor so obvious it ‘goes
without saying’.10 Ms Cooper’s own evidence is “neither of us discussed an end date and this was because it was understood to be ongoing indefinitely”. She proffers no evidence as to the source of that ‘understanding’.
[22] That said, I find it implausible to read the letter as suggesting Mr Johnston could terminate the Coopers’ occupation at will — including on the day after the Coopers accepted the arrangement. That would require me to accept the Coopers would give up their entitlement to claim back the $30,000 without any security as to the duration of their occupation.
[23] As I read the letter, the $30,000 was intended to make up the difference between the weekly rent of $250 and the going market rate. Plausibly, then, the parties’ understanding was that the Coopers could remain in the property until the $30,000 had been ‘used up’.
[24] We have no evidence as to how long that period might be, nor any reasonable mechanism by which to resolve the ambiguity. It is therefore likely, in my view, the 2013 letter cannot support an enforceable agreement given such uncertainty on an essential term. If so, the Coopers may have an action against Mr Johnston to reclaim the $30,000 (as counsel seemed willing to accept in the end). Either way, the letter does not support the Coopers claim to a life interest.
[25] In any respect, the letter is not signed by the plaintiff as is required for an enforceable disposition of land under the Property Law Act 2007.11
[26] That obstacle can be surmounted, in my view, by appeal to the doctrine of part performance — even if I put to one side my reservations as to whether there is even a sufficiently certain agreement to perform. I cannot see any part performance which, viewed independently of the agreement, was done on the footing a ‘life interest’ contract was in existence.12 Three points merit attention.
12 Mahoe Building Ltd v Fair Investments Ltd [1994] 1 NZLR 281 (CA).
[27] First, the fact the Coopers paid rates and undertook some maintenance on the property (often without consent, and at their own expense) will not suffice. The 2013 letter does not evince these are contractual obligations for the Coopers to perform. And even if those obligations could be established, their performance would not resolve the uncertainty as to the duration of their occupation. For the Coopers’ conduct is readily explicable in terms of moving to bridge the gap between the
$250 rent and (what Mr Johnston submits was) the higher market rate.
[28] Second, I am unconvinced by counsel’s submission that Ms Cooper, if she knew she was not obtaining a life interest in the Cornwallis property, would have instead invested her $30,000 in purchasing her own property. This speculation ignores that Ms Cooper’s original intentions for the $30,000 remain elusive, and nowhere in her own evidence does she say she gave Mr Johnston the money in exchange for a life interest. Furthermore, the counterfactual wrongly presumes she gained nothing from the ‘exchange’: but the money was applied towards the reduction of the mortgage, apparently justifying a lower rent.
[29] Finally, it is telling that Ms Cooper did not reference the life interest argument until her counsel’s submissions in this application. This includes her appearance before the Tenancy Tribunal earlier this year. Her own evidence that she “was open to considering” Mr Johnston’s proposal in November 2017 for her to purchase the Cornwallis property stands in tension with her counsel’s present submissions.
[30] Counsel makes one final argument: he says Mr Johnston is estopped in equity from going back on his alleged promise to grant the Coopers a life interest. This argument offers the Coopers no solace. For the reasons stated earlier, I do not consider Mr Johnston created or encouraged any belief or expectation the Coopers’ possessed a life interest in the property.13
[31] Running throughout counsel’s various arguments is the (somewhat hopeful) suggestion the Coopers’ case would be bolstered by further, yet uncovered evidence, if only his clients’ case was granted the opportunity to progress to trial. But that does not provide a secure basis on which I can withhold summary judgment.
13 Gillies v Keogh [1989] NZCA 168; [1989] 2 NZLR 327 (CA) at 346 and 508.
[32] So where does that leave the Coopers? I make no definitive finding on how the parties’ arrangement should be classified. Most likely, their arrangement is either a tenancy of uncertain duration under s 105 of the 1952 Act (terminable on one month’s notice) or an implied licence at common law.
[33] Counsel argues for a contractual, rather than bare, licence – the termination of which would depend on ordinary principle of contractual interpretation.14 I have found the 2013 letter is likely too uncertain as to duration to ground an enforceable contract; but even if I am wrong in that, I see no evidence to support the position the licence endures even now. I am satisfied that Mr Johnston’s notice to vacate, trespass notice, and issuing of the Tenancy Tribunal proceeding constituted termination of any contractual licence, if such was still in existence at those times.
Result
[34] It follows the defendants have no tenable defence to the plaintiff’s claim for repossession. Summary judgment is accordingly granted.
[35] The plaintiff is entitled to vacant possession of the property at 111 Cornwallis Road, Cornwallis, Auckland (described as Lot 1 Deposited Plan 153362 on certificate title NA91C/157). I order the defendants provide vacant possession on a date to be agreed between the parties, or failing that, as specified by the Court.
[36] Counsel are encouraged to confer as to a reasonable period by which the defendants are to comply with this judgment – bearing in mind that we are approaching the end of the year – and file joint memoranda within 5 working days of this judgment, specifying the material date. If the parties cannot agree, the Court will specify its own date.
[37] As costs follow the event under the statutory costs regime, I order the defendants to pay the plaintiff 2B costs and disbursements as fixed by the Registrar.
Associate Judge Sargisson
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