Harvey v Ijan Beveridge

• Jurisdiction: New Zealand
• Judge: White J
• Judgment Date: 20 March 2014
• Neutral Citation: [2014] NZCA 72
• Docket Number: CA521/2013
• Court: Court of Appeal
• Date: 20 March 2014

BETWEEN

Megan Ann Harvey

Appellant

and

Ijan Beveridge

Respondent

[2014] NZCA 72

Court:

Randerson, White and French JJ

CA521/2013

IN THE COURT OF APPEAL OF NEW ZEALAND

Appeal from a High Court decision which refused to grant the appellant's summary judgment application for the respondent to vacate a unit and pay mense profits — appellant was the executrix and trustee under the will of the deceased — respondent lived in a unit owned by the deceased — he had lived there rent free from 2008 — respondent refused to vacate the unit after the death of the owner on the grounds that he was in lawful possession of the unit as the beneficiary of a constructive trust based on the common intention of defendant and the deceased — whether deceased entitled to resile from his intention to gift the unit — whether there was a distinction between “reasonable expectations” and “common intention” constructive trusts whereby the latter did not require evidence of some contribution, direct or indirect, to the property at issue.

Counsel:

A R Armstrong for Appellant

R E Murphy And C R Becker for Respondent

• A The appeal is allowed.

• B Summary judgment is entered for the appellant.

• C The respondent is ordered to give up possession of Unit 4, 35 Division Street, Riccarton, Christchurch (Land Registration number CB35B/1148) to the appellant within 28 days of the date of this judgment.

• D The appellant is entitled to mesne profits from the respondent in respect of the Unit from 24 January 2012 to the date on which possession of the Unit is given to the appellant.

• E The quantum of the mesne profits is to be determined, if necessary, by the High Court.

• F There is an order pursuant to s 143 of the Land Transfer Act 1952 that Caveat 9255862 lodged by the respondent against dealings in the Unit be removed.

• G The respondent is to pay the appellant costs for a standard appeal on a band A basis and usual disbursements.

• H Costs in the High Court, which were reserved, are to be fixed by the High Court in light of this judgment.

REASONS OF THE COURT

(Given by White J)

Introduction

1 The appellant, the Reverend Megan Harvey, is the executrix and trustee under the will of the late Dr Mark Byrd who died on 24 January 2012.

2 The respondent, Mr Ijan Beveridge, is the occupier of Unit 4, 35 Division Street, Riccarton, Christchurch. The Unit was owned by Dr Byrd and has been occupied by Mr Beveridge rent free since about 2008.

3 There was evidence that Dr Byrd intended that the Unit should belong to Mr Beveridge, but it was not transferred to him during Dr Byrd's lifetime and there was no provision in Dr Byrd's last will, which was dated 3 September 1999, relating to the Unit or to Mr Beveridge.

4 Following the death of Dr Byrd, notice was given on behalf of his estate to Mr Beveridge to vacate the Unit. Mr Beveridge declined to do so on the ground that he was in lawful possession of the Unit as the beneficiary of a constructive trust based on the common intention of Dr Byrd and Mr Beveridge. Mr Beveridge lodged a caveat against dealings in the Unit.

5 The Reverend Harvey issued proceedings against Mr Beveridge in the High Court at Christchurch seeking by way of summary judgment an order that he give up possession of the Unit and that he pay mesne profits at the rate of $350 per week from 24 January 2012 and costs. An order for the removal of the caveat was also sought.

6 Mr Beveridge issued a separate proceeding claiming a declaration that the Reverend Harvey holds the Unit on constructive trust for him and an order that she transfer the Unit to him.

7 The Reverend Harvey's application for summary judgment was dismissed by Associate Judge Osborne on the ground that she had failed to establish that Mr Beveridge had no defence to the claim. 1 The Associate Judge reached this conclusion because, on a review of the elements of a “common intention” constructive trust, he did not find any element which Mr Beveridge must establish “to be indisputably missing on the evidence available at summary judgment.” 2

8 The Reverend Harvey appeals against the Associate Judge's decision on the ground that Mr Beveridge has no defence to the claim because:

• (a) While on the evidence Dr Byrd may have intended to give the Unit to Mr Beveridge, Dr Byrd took no steps to perfect the gift in his lifetime or under his will.

• (b) Dr Byrd had not during his lifetime settled the Unit on Mr Beveridge under an express trust which in terms of s 25 of the Property Law Act 2007 needed to be in writing and signed by Dr Byrd.

• (c) A “common intention” constructive trust requires more than merely an express oral trust. There must be something that makes it unconscionable for the trust not to be recognised. There is no suggestion that Mr Beveridge made any significant contribution to the value of the Unit or that he changed his position in any way in reliance on Dr Byrd's expressed intention. There was nothing unconscionable in Dr Byrd resiling from his alleged expressed

  intention and making no provision for Mr Beveridge in his will.

9 Mr Beveridge supports the decision of the Associate Judge.

Factual background

10 Bearing in mind that in terms of the summary judgment rules the onus of satisfying the court that a defendant has no defence rests on the plaintiff, 3 we propose to treat the evidence and pleadings for Mr Beveridge as establishing the relevant factual background for the purpose of determining whether he has a defence to the claim for possession of the Unit.

11 The Unit was initially purchased by Dr Byrd in 1992 as a residence for his mother. After her death, he made the Unit available to friends and acquaintances in need of accommodation.

12 Mr Beveridge met Dr Byrd in about 1992 through their mutual employment at the University of Canterbury. Dr Byrd was a lecturer in the Psychology Department and Mr Beveridge worked as a technician.

13 They became close friends after Mr Beveridge was sentenced to a term of imprisonment in 2000. Dr Byrd was supportive of Mr Beveridge and visited him frequently in prison, on a weekly basis from 2003 to June 2008.

14 Following Mr Beveridge's release from prison in June 2008, Dr Byrd offered him the use of the Unit as his home. Mr Beveridge initially occupied the Unit as a guest, but within a few weeks, in about July 2008, Dr Byrd and Mr Beveridge formed “a common and unequivocal intention” that the Unit was held on trust by Dr Byrd for Mr Beveridge. Dr Byrd stated to Mr Beveridge on numerous occasions that the Unit was the property of Mr Beveridge. According to Mr Beveridge, Dr Byrd repeated statements to the effect that the Unit “is yours”.

15 During the period from 2008 to 2012 Dr Byrd did not require Mr Beveridge to pay any rent or outgoings. Mr Beveridge offered payment to Dr Byrd on occasions, but this was refused in strong terms.

16 At no stage did Dr Byrd inspect the Unit or undertake any duties that would be expected of an owner or a landlord of a property. Mr Beveridge undertook and paid for some improvements to the Unit. When he sought permission from Dr Byrd to do so, Dr Byrd said that he did not need to know the details and that it was Mr Beveridge's property so he could do as he chose.

17 Mr Beveridge ceased offering payment and seeking permission to make improvements to the Unit as he had formed the intention that he was “the beneficial owner” of the Unit.

18 In November 2008 Dr Byrd had an accident which caused him to become a paraplegic. Dr Byrd was admitted to the Burwood Spinal Injuries Unit of Christchurch Hospital and subsequently the St John of God Hospital in Halswell, Christchurch.

19 During Dr Byrd's time at the Spinal Injuries Unit and in hospital Mr Beveridge visited him daily. Dr Byrd asked Mr Beveridge to be his advocate in health and personal matters. Mr Beveridge also undertook all of the help and support that Dr Byrd needed.

20 As Dr Byrd's own residence was unsuitable for a paraplegic person, Mr Beveridge arranged for it to be renovated to accommodate Dr Byrd, but he then died on 24 January 2012.

21 After the Canterbury earthquakes beginning in September 2010, Dr Byrd took no proprietorial interest in the damage to the property and Mr Beveridge organised all insurance claims. 4

22 In about June 2008 Dr Byrd arranged for Mr Beveridge to have the use, by way of a loan, of a motor vehicle owned by Dr Byrd. In contrast to the arrangements in respect of the Unit, Dr Byrd was explicit in directing the terms on which the motor vehicle was lent and remained his property.

23 At no time during his life did Dr Byrd revoke his intention for Mr Beveridge to be “the beneficial owner” of the Unit.

24 Following the death of Dr Byrd, it was found that his last will, which had been made on 3 September 1999 with Young Hunter, lawyers in Christchurch, made no reference to the Unit or Mr Beveridge. Other persons, including the Reverend Harvey, were named as the beneficiaries under the will.

25 There is also undisputed evidence from the Reverend Harvey that Mr Beveridge and another friend of Dr Byrd both separately searched Dr Byrd's residence for a later will, but were unable to find one. Mr Beveridge also advertised twice seeking a response from any lawyer who held a will made by Dr Byrd, but there was no response. Dr Byrd did not make another will through Young Hunter and he did not give any instructions to or have any discussions with Young Hunter regarding making a new will. Dr Byrd did not give any instructions to Young Hunter regarding Mr Beveridge.

26 In addition there is undisputed evidence that Mr Beveridge initially considered making a claim under the Law Reform (Testamentary Promises) Act 1949, but ultimately decided not to pursue such a claim.

High Court judgment

27 After referring to the nature of the proceeding, a chronology of key events and what Mr Beveridge did not assert, 5...