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Murphy v Maaka [2015] NZHC 1009 (13 May 2015)

Last Updated: 26 May 2015

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

CIV-2014-488-000197 [2015] NZHC 1009

_{JUDGMENT OF ASHER J}

This judgment was delivered by me on Wednesday, 13 May 2015 at 3:00pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:

Patterson law, Kaitaia.

MURPHY v MAAKA [2015] NZHC 1009 [13 May 2015]

Introduction

[1] In this formal proof application the plaintiff Tamati Murphy seeks an order declaring that the defendant his former partner Gloria Maaka holds a property at

6B Bonnett Road, Kaitaia on a resulting or constructive trust for him, and an order vesting the property in him under s 52 of the Trustee Act 1956. There is an affidavit of service and I am satisfied that Ms Maaka has been properly served.

[2] Mr Murphy’s affidavit discloses that Mr Murphy and Ms Maaka commenced a de facto relationship in 1977, and lived together for approximately 14 years. They separated in 1991 and have been living apart since then.

[3] On 27 February 1989 Mr Murphy purchased jointly with Ms Maaka a residential property at 6B Bonnett Road, Kaitaia. The purchase price was $62,000 and was fully funded by a mortgage to “The Home Mortgage Company Ltd” formerly the Housing Corporation of New Zealand.

[4] Following the separation Ms Maaka moved away from Kaitaia and Mr Murphy stayed on in the home, living with three of their five children. He raised those children to adulthood at the home. Ms Maaka took the other two children to live with her. Thus, Mr Murphy has lived at the home for the last 24 years and he asserts intends to do so indefinitely into the future.

[5] Mr Murphy has undertaken sole responsibility for repayment of the mortgage over the property for the last 24 years since separation. There remains owing the sum of $15,902.30. The property is currently valued at $78,000 by the Far North Council.

[6] Ms Maaka has indicated to Mr Murphy on a number of occasions over the years that she would transfer her interest in the property to him. However, she has not taken any steps to do so.

[7] Since separation in 1991 Ms Maaka has not made any payments towards reduction of the mortgage, or made any efforts towards the maintenance or upkeep of the property. She has led a totally separate life and has not indicated any interest in

the property. His solicitors have written to her on four occasions in the last year concerning the matter, but have received no response.

The Property (Relationships) Act 1976

[8] Section 4C of the Property (Relationships) Act 1976 provides:

4C Application to existing and future de facto relationships

(1) This Act applies to—

(a) de facto relationships that began before 1 February 2002; and

(b) de facto relationships that begin on or after 1 February 2002.

(2) This Act does not apply to de facto relationships that ended before

1 February 2002.

[9] The de facto relationship between Mr Murphy and Ms Maaka began in 1977 and terminated in 1991. Therefore the provisions of the Act do not apply and the property rights as between the parties must be determined according to the law in existence prior to the 2002 amendments.

Claim based on resulting or constructive trust

[10] Prior to the 2002 amendments to the Property (Relationships) Act, property rights between partners in a de facto relationship were often determined applying the law as to constructive trusts. It was established in a series of cases including Gillies v Keogh¹ and Lankow v Rose² that where a claimant developed a reasonable expectation of an entitlement in property owned by the other party to a de facto relationship, as a consequence of contributions to the property, then the Court would

find a constructive trust in favour of the claimant if the other party should reasonably expect to yield the claimant an interest. Similarly, where a couple unequivocally expresses an intention that a property should devolve exclusively upon one of them,

_{that intention would be enforced by the constructive trust.}³

¹ _{Gillies v Keogh [1989] NZCA 168; [1989] 2 NZLR 327 (CA).}

² _{Lankow v Rose [1995] 1 NZLR 277 (CA).}

³ Cossey v Bach [1992] 3 NZLR 612 (HC) at 627–629.

[11] Here Mr Murphy appears to have been the sole contributor to the property, certainly since separation, and it has been stated to him by Ms Maaka that he was exclusively entitled to it. In those circumstances I find that a constructive trust was created and that Mr Murphy is entitled to an exclusive beneficial interest in the property.

[12] I note that since the 2002 amendments this avenue is no longer available to a partner to a de facto relationship, but a similar result could be reached under s 18B of the Property (Relationships) Act which relates to compensation for contributions made by a partner after separation.

[13] I turn to the question of the appropriate remedy. I am prepared to declare a resulting and constructive trust for Mr Murphy. This is one of the two orders sought. The other is for an order vesting the property in Mr Murphy under s 52 of the Trustee Act.

[14] It seems to me that I must first appoint the plaintiff to be the sole trustee of the property in substitution for Ms Maaka. The Court has the power to do so under s 51(1) of the Trustee Act. I have power to make an order vesting land under s 52(1)(a) of the Trustee Act, which provides:

52 Vesting orders of land

(1) Subject to the provisions of subsections (2) and (3) of this section, in any of the following cases, namely—

(a) Where the Court appoints or has appointed a trustee of any land or interest therein, or where a trustee of any land or interest therein has been appointed out of Court under any statutory or express power:

...

the Court may make an order (in this Act called a vesting order) vesting the land or interest therein in any such person in any such manner and for any such estate or interest as the Court may direct, or releasing or disposing of the contingent right to such person as the Court may direct.

[15] Accordingly I will appoint Mr Murphy as a trustee and vest the land in him under s 52(1)(a).

Result

[16] I declare that the defendant holds the property at 6B Bonnett Road, Kaitaia being Flat 2 Deposited Plan 130368 (North Auckland Registry) on a constructive trust for Tamati Murphy.

[17] I order that Tamati Murphy is the sole trustee of that property.

[18] I order that Flat 2 Deposited Plan 130368 (North Auckland Registry) being

6B Bonnett Road, Kaitaia vest in the plaintiff Tamati Murphy.

[19] Although on the face of it Mr Murphy would be entitled to costs, he does not pursue an application for costs in all the circumstances. There is no order as to costs.

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

Asher J