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BRIAN ANTHONY LAYCOCK V ANNE BARBARA CLARKE HC NEL CIV-2005-042-154 [2005] NZHC 108 (11 October 2005)

IN THE HIGH COURT OF NEW ZEALAND
NELSON REGISTRY
                                                                 CIV-2005-042-154


               IN THE MATTER OF          an Application under the Land Transfer Act
                                         1952

               BETWEEN                   BRIAN ANTHONY LAYCOCK
                                         Applicant

            
  AND                       ANNE BARBARA CLARKE
                                         Respondent


Hearing:       5 October 2005
               (Heard at Christchurch)

Appearances: P.J. Bellamy for Applicant
             Ms A Meates for Respondent

Judgment:
     11 October 2005 at 2.35pm


         JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN
      UPON APPLICATION FOR ORDER THAT CAVEAT NOT
LAPSE



[1]    The respondent is the registered proprietor of a property at Granity, Nelson
District ("the property").


[2]   
On 12 July 2004 the applicant registered a caveat over the property claiming
an estate or interest pursuant to an oral agreement
between he "as prospective
purchaser" and the respondent "as prospective vendor", and pursuant to part
performance of such agreement.
     Then on 23 March 2005 the applicant lodged a
further caveat claiming a beneficial interest in the land "as a constructive trust
of
which the registered proprietor Anne Clarke is trustee".   Before then the applicant
had withdrawn the first caveat.




BRIAN
ANTHONY LAYCOCK V ANNE BARBARA CLARKE HC NEL CIV-2005-042-154 11 October
2005

[3]       The respondent then filed an application
for lapse of caveat pursuant to
s.145A of the Land Transfer Act 1952.          She wishes to sell the property.      The
applicant's
application to sustain the caveat was filed shortly after.


[4]       According to the applicant the property was run down and had
proved
difficult to rent.     This caused concern to the respondent who said she had a
mortgage to pay and was experiencing difficulties
in meeting payment.         Previous
tenants had proved unreliable. The respondent was desperate to find somebody and
she asked him
whether he would consider living there. A rental of $125, inclusive
of power and phone was agreed.


[5]       The applicant said
that as part the negotiated tenancy the respondent agreed
to allow him to build a shed on the property. Also, and according to him,
the rental
was struck at a rate to include the sum of $100 per week needed to service the
mortgage until it was paid off. He said
she said thereafter "it will be your house and
you can do whatever you want with it".      He did not take that to mean that he would
be the sole owner of the property, but he took it to mean that he was more than just a
tenant.


[6]       After he took occupation
he asked her if she would pay to fix anything
required. He said she responded to the effect that he should do what he had to. He
expressed concerns about the garden and she said (he said) "You can concrete it over
if you want. You do what you want it's yours".
Again this confirmed in his mind
he had more of an interest in the property than simply being a tenant.


[7]       He has now lived
at the property for approximately four and a half years and
since January 2004 his son has lived with him. About three years prior
to that his
son, Anthony, had been in a relationship with the respondent and they were engaged
to be married.


[8]       The applicant
says that during his occupation he has done the following:


                     (i) Paid for and helped put up a shed.

(ii) Completed
temporary repairs to the sewage system.


(iii)Replaced all the electrical wiring around the house.


(iv) Repaired the front veranda,
replacing all the floor boards,
       which were rotten, to various degrees.


(v) Replaced the oven and rewired it.


(vi) Taken
down the old chimneys which were condemned.


(vii)Taken out the old hot water cylinder and fitted a new one.


(viii)Replaced the
old coal range with a pot belly stove.


(ix)      Replaced the old pot belly stove.


(x)       Painted the inside of the house.


(xi)      Rebuilt the bathroom, took
the lino off the floors, polished
          the floors and redid all the plumbing there and in most
          other parts of the
house.


(xii)     Put in new carpet throughout.


(xiii) Put in new light fittings throughout, including light shades.


(xiv) 
   Had Telecom re-run the phone cables.


(xv)      Rebuilt sinks in laundry and replaced cupboards.


(xvi)     Replaced glass in
over half the windows which were
          broken when he moved in.


(xvii) Fixed all the sash windows so that they opened.

 
                 (xviii) Fixed doors so that they opened and shut properly, put on
                           handles and in some
cases replaced doors.


                   (xix)   Repaired the front fence and painted the same.


                   (xx)    Replaced
a section of roof that was leaking badly and
                           repaired the same.


                   (xxi)   Replaced
some badly rotted piles.


                   (xxii) Replaced the letter box.


[9]    The applicant said that he had been intending
to repair the outside of the
house and had bought the paint to paint it, but until this application was resolved he
does not intend
doing anything.


[10]   The applicant has attached all of the invoices that he could find as evidence
of payments he has made. 
    Two of those, that total approximately $86, appear to
relate to furniture purchases. Some eleven others indicate an expenditure
in the sum
of approximately $2,500 for timber and hardware supply.          About $720 of that
amount appears related to the supply
of gas.     There is also attached an invoice for
$290 to the account of a neighbour. Finally, there is attached a copy of a quotation
for $3000 for the laying of a concrete pad for the shed.


[11]   As the applicant explains, these are the only invoices he could
find, but there
were many he had not kept. He says he is not "great on record keeping".


[12]   The applicant says that the cost
of the garage was $7,261, inclusive of the
$3000 concrete laying cost. He said "I had a garage built on the property".


[13]   In
about 2003, and after he had been in the property for more than two years,
he said "the respondent asked me to sign a tenancy agreement.
I didn't really think
much about it".    In his words "I simply thought it was a way of evidencing the
changes that had been made
in the sum I was paying her $130". He signed it

because he wanted to be seen as responsible and reliable, and because he had
faithfully
made all payments requested.


[14]   The applicant's position is explained by the following:


       "I accept that I do not have
the sole interest in this property, but I don't
       believe it is fair to say I have no interest at all and was simply a tenant.
The
       work that I have done on the property is well in excess of what a tenant
       would do and it wasn't done on the basis
that I would get some benefit from
       the house when the respondent sold it."

       Further:

       "The reason Anthony and
I have put so much time into the house was
       because I believed, on everything the respondent had said to me, that I had an
       interest in the property and I could stay there basically until I died or chose to
       leave. I was building up an equity
in this property through my hard work
       and investment. There was nothing in the respondent's behaviour prior to
       her
breaking up with Anthony that led me to believe otherwise."

[15]   The applicant attached a valuation showing the property to be
valued at
$42,000, including $15,000 on the dwelling and $6000 on the shed and
improvements.     The applicant wants an opportunity
to buy the property at market
value, less an appropriate amount for the work that he has done on it.


[16]   The application is
also supported by an affidavit from the applicant's son
Anthony. He deposed that it was his impression at the time the tenancy arrangement
was originally struck that once his father had
paid off the mortgage he would have an
interest in the property and could stay there for as long as he liked.


[17]   He remembers
a conversation when the respondent was asked if she was
prepared to pay any money for repairs. He recalls her response as being along
the
lines of "as you are living there now, it is over to you to do it".      He deposed that
much of the work they did on the house
was with materials they already owned.
Also they supplied a lot of their own labour.


[18]   Anthony acknowledges also being responsible
for poor record keeping and
otherwise supports his father's recollection of statements from the respondent from

which the Court
is invited to infer did transfer an interest in the property to the
applicant.


[19]       The application is also supported by
an affidavit from a Mr K. Gilbert. He
has lived in Granity all his life and has come to know the applicant over the last five
years
or so.


[20]     Mr Gilbert said that before the applicant's occupation the property was "a
total wreck and not habitable". He was
present when the applicant purchased some
carpet, and later when it was laid.      He helped clean up the property and make
repairs.
    He was present when the decision was made to paint the inside of the
house.      He helped with repiling and painting, with patching
holes in walls, with
laying pipes and with the doing of plumbing work.         He helped re-run all of the
electrical and telephone
wires, and was present when the new power board was
fitted. He even helped to put up the garage, knock down the chimneys, and to
put in
the wood burner and the water cylinder.


[21]     He confirms the statements of the applicant and Anthony that on occasions
when the respondent visited the property she was pleased with the work that had
been done. He said he also heard the respondent say
words to the effect that once
the applicant had paid the mortgage off, the house would go into his name for the
rest of his life.


[22]     Finally, there is the affidavit of Ms A. Symonds filed in support. She is the
mother of Anthony and the ex wife of the
applicant. She was also the respondent's
former work boss.        She recalls visiting the property on an occasion when the
respondent
and Anthony were there. She said to the applicant "You've got to stop
spending money on this place, it's not yours and you'll never
get it back".        She
reports that the respondent "immediately chipped in with words to the effect that
after the mortgage was
paid off she would sign it over to him".     She said "I didn't
really take notice of the exact words or consider what they really
meant, but I did get
the clear message from what was said and the way it was said that Brian would get
an interest in the house".

[23]   In opposition, the respondent deposed that the property was transferred to her
by survivorship following the death of her
husband in December 1999.           It was
always her intention that the property be transferred equally to her three children
upon
her death.


[24]   She said the tenancy of the property was the applicant's idea. She said the
tenancy agreement was signed from
the time the applicant moved in. The rental was
struck at $125, being $100 for rent and $25 for power and phone.


[25]   She said
the applicant wanted to paint the inside because he did not like the
colour of the existing paint.


[26]   She said her relationship
with Anthony lasted approximately 12 months and it
ended in January 2003.          As regarding the applicant's claims of work done
she
responds:


                   (i) She increased the mortgage on the property by $11,000 to
                       cover the
cost of work required, including a sum of
                       approximately $6000 for the garage and the laying of the
      
                concrete floor. She paid these costs and the applicant and his
                       son said they would erect it.

                   (ii) She has no knowledge
of repairs to the sewage system, nor of
                        electrical wiring being replaced, nor of the replacement of
    
                   floor boards on the front veranda.

                   (iii)She purchased the new oven.

                   (iv)
The chimneys had been condemned.

                   (v) She has not seen the documentation in relation to the hot water
       
               cylinder.

                   (vi) There was already a pot belly stove in the lounge and she
                    
   agreed that he could remove it.

                   (vii)The bathroom was in good order when the applicant moved
            
          in.

                   (viii)The house was carpeted throughout when the applicant
                       moved in.


                  (ix)There were light fittings in the house when the applicant
                       moved in, and there were telephone
lines.

                   (ix)The laundry was in good working order when the applicant
                       moved in.

      
            (x)Two windows only were broken that required fixing, and the
                       windows and doors were in working
order except in the dining
                       room.

                   (xi)She has no knowledge of alleged repairs or painting
to the
                       front fence, or repairs to the roof, or replacement of house
                       tiles, or replacement
of the letter box.

                   (xii)The sewage system has never been discussed with her.

[27]   She says she has had no
discussion with the applicant in relation to the
outside of the house. The respondent is critical of the quality of evidence provided
by the invoices. She says she paid for some, and others related to the time when the
property was occupied by another tenant, and
others clearly do not relate to the
property, or are otherwise in dispute to explain what the payment was for.


The Law


[28] 
 The applicant has the onus to show there is a reasonably arguable case that he
has acquired a caveatable interest in the land pursuant
to a constructive trust.   He
has to be able to show through unequivocal statements certain facts which, if
accepted by the Court,
would give rise to a constructive trust. The Court does not
have to be convinced of the truth of the statements made by the applicant
as long as
the statements are unequivocal and amount to an arguable case.


[29]   The Court should refrain from attempting to resolve
genuine conflicts of
evidence, or to assess the credibility of the parties' statements in their affidavits.
This does not mean that
that evidence is to be accepted uncritically where it is
inconsistent with undisputed contemporary documents or if it is inherently
improbable in itself.

[30]   To establish there is a constructive trust the Court needs to consider either the
parties' common
intention, or a party's reasonable expectation.


[31]   If a common intention cannot be found then there should be demonstrated
"a
direct or indirect contribution by the claimants in relation to the property in
circumstances such that it should be inferred
that the claimant would have
understood that those efforts would naturally result in an interest in the property".
(Gillies v Keogh
 [1989] 2 NZLR 327). In that case Richardson J went on to say:



       "That involves determining whether the elements of encouragement (of a
     
 belief or expectation), reliance on that, and detriment were present."

[32]   In Lankow v Rose  [1995] 1 NZLR 277, at page 294 Tipping J summarised
what a de facto claimant must show to prove a claim of constructive trust:


       "1.     Contributions,
direct or indirect, to the property in question.

       2.      The expectation of an interest therein.

       3.      That such
an expectation is a reasonable one.

       4.      The defendant should reasonably expect to yield the claimant an
            
  interest."


Considerations


[33]   No common intention by the parties has been demonstrated.            At all times
their relationship
was one of landlord and tenant.          Reported recollections by
different persons of the same conversation demonstrate inconsistencies.
          Those
records are vague and, as it appears to me, unreliable.         The question is whether,
against the background of
claimed contributions the applicant's expectation to have
been yielded an interest in the property is a reasonable one.


[34]  
In my judgment the respondent should not reasonably be expected to yield
the applicant an interest. This Court's jurisdiction is
a robust one. I have already in
the previous paragraph commented on the contradictory and unreliable nature of the

assertions allegedly
made by the respondent. The conduct of the parties needs to be
assessed against contemporary standards and objectively.


[35]  
On my critical examination of the evidence the applicant's assertion does not
pass the threshold of credibility. The invoices exhibited
prove little if anything, and
doubts cast upon them in the evidence of the respondent are largely unchallenged.
The applicant's first
claim is his allegation to have paid for the garage.         The
acceptable evidence is that he did not.     He claims to have laid
new carpet.     The
acceptable evidence is that the carpet laid was anything but new. He claims to have
undertaken a raft of what
appears to be maintenance work for the most part, a good
deal of it without reference to, or with the authority of, the respondent.


[36]   Clearly the applicant made no contribution to the purchase of the property
and the value of the contribution he asserts
to have made is unquantifiable by
reference to any independent report.


[37]   He seems to be claiming an interest equal to the
extent of his contribution,
and somehow thereby to convert the cost of his contribution into a share of the value
of the property.
Even if he could do this, the reality is that because of s.140 of the
Property Law Act 1952 he would only receive a refund of the
value of the
contributions he has made ­ less, of course, any costs associated with the sale of the
property.


[38]   What the applicant
has obtained, if anything at all, is an interest in the use of
the property only, and that is insufficient to sustain a claim for
a caveat. By his own
account most of the work undertaken initially, including the building of the garage
(the cost of which was provided
by the respondent) was so that he could inhabit the
property and use it for the purposes of running his business there.


[39]  
If the applicant has any claim at all then it is sufficient only to support a
claim to recover the cost of works which he says were
authorised by the respondent.
That kind of claim will not justify recognition of an interest which he claims by this
application.

[40]   The application is dismissed.


[41]   Counsel advise both parties are legally aided.     In those circumstances no
purpose
will be served by an order for costs. There is no order for costs.




__________________________________



Solicitors
Fletcher
Vautier Moore, Nelson for Applicant
Annie Meates, Nelson for Respondent