Tipene v Tipene – Motatau 2 Section 49A4F

Māori Land Court (2014) 85 Taitokerau MB 2 (85 TTK 2)

19 August 2014

Trustees applied for confirmation they owned a dwelling on a block. Ownership was confirmed but subject to a constructive trust in favour of the prior occupant. Along with her husband (now deceased), the prior occupant had renovated and lived in the dwelling consistently with a family agreement.

Download Tipene v Tipene – Motatau 2 Section 49A4F (173 KB PDF) here.

Overview and result

Background

The applicant, Joseph Tipene (a trustee of the block) applied for a determination of ownership of a dwelling on Motatau Section 49A4F.

Joseph’s brother Gary Tipene, together with his wife Tania and their children, had lived in the house for approximately 24 years. Their occupation began after Gary and Joseph’s father had invited Gary to renovate the then derelict house and occupy it.

Two weeks after Gary’s sudden death in 2011, Tania (who was not an owner of the block) was informed by the trustees that she would need to pay rent in order to continue to occupy the house. She and her children subsequently vacated the property protesting against the rental policy.

Subsequently, Tania Tipene opposed the application for determination of ownership. She identified contributions made to renovating the dwelling and contributing to the block’s rates expenses.

The matter was first called before the Court in 2011.

The issue for the Court was whether Tania Tipene had an equitable interest in the house that the Court should recognise under s 18(1)(a) of the Act.

Section 18(1)(a) provides:

18 General jurisdiction of court

In addition to any jurisdiction specifically conferred on the court otherwise than by this section, the court shall have the following jurisdiction:

(a)to hear and determine any claim, whether at law or in equity, to the ownership or possession of Maori freehold land, or to any right, title, estate, or interest in any such land or in the proceeds of the alienation of any such right, title, estate, or interest:

Counsel were appointed to represent the parties. Valuation evidence was led.

The trustees submitted that the cost of the renovation work undertaken by Gary and Tania was offset by the period of rent-free occupation they had enjoyed and was included in the 2011 valuation of the property.

The trustees also identified that some of the repairs had been paid for using a Housing New Zealand loan.

Ms Tipene made clear that she was not seeking an ownership interest in the house. Instead she sought a right of occupation for her children or monetary compensation to recognise the improvements made to the dwelling. She submitted that general equitable principles for recognising constructive trusts should be applied, raising further the prospect of unjust enrichment to the trust if an interest was not recognised.

Discussion

The Court considered the relevance of constructive trust principles and the way these were applied in similar circumstances (looking at Stratulos v Stratulos). The Court also referred to Lankow v Rose, where the Court of Appeal had identified four features to test for the existence of a constructive trust, which if demonstrated, would mean that it was unconscionable for the legal owner to deny the claimant an interest and a constructive trust would be imposed. Following the approach in Lankow v Rose, a claimant must show: contributions, direct or indirect, to the property in question; the expectation of an interest therein; that such expectation is a reasonable one; and that the defendant would reasonably expect to yield the claimant an interest.

The Court found that these criteria from Lankow v Rose were met in this case.

[62] Applying the tests formulated by the Court of Appeal in Lankow v Rose:

a) I am satisfied that Tania and her whānau made contributions direct and indirect to the Old Home. These contributions were substantial and not just in the character of ongoing maintenance. Neither were they simply a token of appreciation for the right to occupy. Over a considerable period Gary, Tania and extended whānau restored, renovated and improved the Old Home. They literally made it into their family home.

b) I am satisfied that Tania had an expectation of an interest in the Old Home such that she, Gary and their children would (at least), be entitled to remain in the Old Home rent free while they chose to make it their family home and they still had dependent children living with them.

c) I am satisfied that such an expectation is reasonable. It is consistent with the nature of the invitation extended to Gary and Tania by Gary’s father and the way the arrangement worked for 24 years.

d) I am satisfied that the trustees can and should reasonably expect to recognise an interest of this kind. Some of their statements come close to saying as much. The key point of difference is the wish on the part of the trustees to change the nature of the arrangement to one under which Tania would pay a weekly rental for the right of ongoing occupation. The assumption appears to have been that this was fair because other members of Gary’s whānau had been contributing just as much over the years. That is wrong insofar as it relates to the Old Home. Gary and Tania assumed the burden of restoring and maintaining the house. Almost entirely through their endeavours a rundown, uninhabitable structure valued in 1984 at $8,000 is now a trust asset with a 2011 value of $55,000. It would be unconscionable for the Trust to have the benefit of that asset without properly acknowledging an interest in favour of Tania and her children.

As a result Tania Tipene had an interest in the property which should be recognised.

The Court considered the factual situation, including the tikanga in which the family arrangement arose as a practical gesture of aroha and manaakitanga. There was an understanding between Gary Tipene’s father, Gary, Tania and Gary’s siblings that in return for restoring, maintaining and meeting outgoings in respect of the dwelling, Gary and Tania would be entitled to something like a life interest.  This had ended prematurely when the trustees imposed the rental policy.

Rejecting the parties’ approaches to valuation issues the Court quantified the value of the forgone interest in the dwelling based on the idea that the family would have been entitled to another eight to ten years of occupation based on the age of the children and the original agreement.

[68] Having carefully considered the evidence and the submissions on behalf of the parties, I have concluded that a different approach is required. I consider the true nature of the arrangement was that in return for renovating and maintaining the old home, Tania and Gary would be entitled to use it rent free as their family home so long as they needed it (presumably at least until their dependent children had left home). They had for most of their time in occupation met the rates payments; they had helped maintain the farm and had raised calves for both their own and the wider whānau’s benefit. In broad terms, this was the basis on which they occupied the Old Home for some 24 years. What was compromised by the unilateral imposition of a rental policy so soon after Gary’s death was the continuity of tenure on existing terms that Gary and Tania were in good conscience entitled to.

The Court arrived at a figure of $6300 using the rental amount sought by the trustees. An award of interest was added. Total compensation amounted to $8447.60. The Court also set a three month period for payment of this amount to allow the parties an opportunity to negotiate an alternative agreement giving a right to occupy in lieu of payment.

Orders were made under:

• Section 18(1)(a) determining that the trustees were the owner of the house;
• Sections 18(1)(a) and 24B that Tania Tipene is entitled to a total judgment debt of $8447.60; and
• Section 73 that the first order determining ownership is conditional on payment of the judgment debt to Ms Tipene.

Author: Craig Linkhorn

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