Trainor v Leotuki

• Jurisdiction: New Zealand
• Judge: Venning J,Venning
• Judgment Date: 25 November 2020
• Neutral Citation: [2020] NZHC 3121
• Court: High Court
• Docket Number: CIV-2019-404-002536
• Date: 25 November 2020

Between

Rongopaiwahine Lois Trainor (formerly known as Raewyn Louise Tofilau and also known as Raewyn Trainor)

Plaintiff

and

Timothy Junior Leotuki

First Defendant

Steve Tofilau

Second Defendant

Nicolau Alex Tofilau

Third Defendant

[2020] NZHC 3121

Venning J

CIV-2019-404-002536

IN THE HIGH COURT OF NEW ZEALAND

AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA

TĀMAKI MAKAURAU ROHE

Equity, Property — application for an order for the sale of a property — dispute between a mother and her sons — the plaintiff transferred her property to her sons inequal shares with an acknowledgement of debt — esptoppel by deed — promissory estoppel — acquiescence — Property Law Act 2007

Appearances:

N W Woods for Plaintiff

U Kuddus for Defendants

JUDGMENT OF Venning J

This judgment was delivered by me on 25 November 2020 at 4.00 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date

TABLE OF CONTENTS

Introduction	[1]
Background	[5]
Procedural history	[19]
The plaintiff's claim	[25]
The defendants' response	[26]
Witnesses	[28]
Issues	[29]
The deeds of debt	[31]
What was the family arrangement the defendants rely on?	[40]
Did the defendants provide any consideration?	[63]
Promissory estoppel	[73]
Acquiescence	[96]
Result — deeds of debt	[103]
Order for sale of the property	[104]
Extent of the share	[106]
Nature and location of the property	[107]
Other co-owners	[108]
Hardship	[109]
Contributions	[110]
Other matters	[112]
Orders	[119]
Costs	[120]

Introduction

1 This is a sad case. A mother is suing three of her four sons. At issue is a modest property at 29 Leaver Place (Leaver Place), Weymouth, which they all have an interest in, and the status of debts the sons owe their mother in relation to the property.

2 The case and the issues underlying it should have been capable of resolution. There was a settlement following an earlier mediation. Implementation of the settlement agreement was, however, subject to finance, which the defendants were not able to obtain. Matters have subsequently broken down.

3 Rongopaiwahine Lois Trainor, also known as Raewyn Trainor, the plaintiff, seeks orders under the Property Law Act 2007 (the PLA) for sale of the property and also judgment for the debts. Timothy Junior Leotuki and Steve Tofilau, the first and second defendants, agree the property has to be sold but seek a right of first refusal, and dispute any liability to the plaintiff in relation to the debts.

4 The third defendant has taken no steps since the mediation and is not represented. A fourth son, Taroi Tofilau, has settled all issues with his mother.

Background

5 The plaintiff began living with Tim Tofilau (Tim Sr) in 1969. At the time Tim Sr was 40 years old. The plaintiff was 18 years old. They later married in June 1971.

6 Raewyn and Tim Sr had four children — Timothy (Tim Jr), born 15 September 1970; Steve, born 1 December 1971; Nicolau, born 7 April 1973; and Taroi, born 11 July 1981.

7 Leaver Place was purchased and settled as a joint family home in 1975.

8 In 1983/1984 the plaintiff separated from Tim Sr and went to Australia. Tim Sr was responsible for the day-to-day care of the four boys from then on. The marriage was dissolved in 1986.

9 The plaintiff remarried but separated from her second husband in 1992. She returned to New Zealand around 1994. From 2003 until about mid to late 2007 she was living in rental accommodation at Castlefinn Drive, near Leaver Place. She then went fruit picking “down the line”.

10 The plaintiff suffered from post-natal depression and has bi-polar disorder. She has also suffered further episodes of depression and has been admitted to hospital psychiatric wards on a number of occasions during her life.

11 By 2008, Tim Sr was diagnosed with cancer and was unwell. Mr Daisley, a legal executive from Whaley and Garnett, met with members of the family to discuss the ownership of Leaver Place which remained vested jointly in Tim Sr and the plaintiff. An agreement for sale and purchase was signed on 4 March 2008. The agreement transferred Leaver Place from the ownership of Tim Sr and the plaintiff to Tim Sr as to a half-share and to the four sons as tenants in common as to a one-eighth share each. The consideration for the plaintiff transferring her one-half share was to be provided by each of the sons signing an acknowledgement of debt for $34,125 (in total $136,500), being one-half of the value of the property according to a QV valuation from 2007.

12 Tim Sr died on 8 July 2008 before the transaction could be completed. His share of Leaver Place vested entirely in the plaintiff by survivorship. On 21 July 2008, a second agreement for sale and purchase was signed. The terms of that agreement recorded that the plaintiff transferred the property to her four sons in equal one-quarter shares. The consideration was provided by each of them executing a deed of acknowledgement of debt for $68,250 ($273,000 in total).

13 At the time, Tim Jr and Steve lived at Leaver Place. The plaintiff had also returned to live there for Tim Sr's tangi. From 2012 to the present, Steve has been living at the property. Tim Jr has also lived there from time to time after 2008.

14 Shortly after the meeting with Mr Daisley at which the documents were signed, the plaintiff went to see another lawyer, Mr Sanders, and provided him with an authority to obtain her files. On 4 August 2008, Mr Daisley forwarded a copy of the plaintiff's will, the July agreement for sale and purchase, and the original deeds of debt to Mr Sanders. In January 2009, Mr Sanders wrote to Mr Daisley noting that the plaintiff had not received independent legal advice and had been subjected to what seemed to be an unconscionable bargain when she had agreed to transfer the property. Mr Sanders noted that the plaintiff was living in a garage on the property at Leaver Place without running water or electricity.

15 About this time, the plaintiff left Leaver Place after a dispute with her sons. Mr Sanders retired from practice shortly after and nothing further was done. For the next eight years the plaintiff lived at various addresses about the North Island and was working and able to look after herself.

16 Then, in 2017, the plaintiff took advice from another lawyer, Ms Hunter, which resulted in letters of demand being sent, in September 2017, to the defendants and their brother Taroi calling up the debt.

17 In settlement of the plaintiff's claim against him in relation to the debt, Taroi transferred his one-quarter interest in the property to the plaintiff on 20 March 2018.

18 The plaintiff then issued proceedings in the District Court against the remaining defendants seeking an order for sale. When issues were raised as to the jurisdiction of that Court a similar application was filed in this Court. On 18 December 2019, a mediation was held. A settlement was agreed, but its implementation was conditional upon the defendants raising finance. That never happened.

Procedural history

19 In July 2018, the plaintiff brought a summary judgment application in the District Court seeking orders for sale of Leaver Place pursuant to s 339(1)(a) of the PLA. The defendants filed defences. During the course of the proceedings an issue was raised as to the jurisdiction for the claim, as Leaver Place had a valuation of $530,000.

20 To address the jurisdictional issue a claim was also filed in this Court seeking orders for sale of the property under the PLA. The defendants failed to take any steps to respond to the proceedings in this Court and the matter was allocated a formal proof hearing. At that hearing the defendants entered an appearance and sought leave to defend the claim. On 3 July 2020, Gault J declined to enter judgment by formal proof and granted leave to the defendants to defend on terms. 1

21 In the meantime, on 7 March 2019, an amended statement of claim had been filed in the District Court. The amended claim pleaded the deeds of debt, demand by the plaintiff, and sought judgment against each of Steve, Tim Jr, and Nicolau for the principal sum of $68,250, together with interest and costs.

22 The first and second defendants then filed statements of defence in this Court on 17 July 2020. On 3 August 2020, the District Court proceedings were transferred to this Court and consolidated with the proceeding in this Court.

23 There were then various pre-trial applications involving the admissibility of evidence and an extension of time for the defendants to file their evidence.

24 The Court now has all issues before it for resolution, including the plaintiff's claim for judgment based on the deeds of debt transferred from the District Court and the plaintiff's claim for orders under the PLA for the sale of the property and ancillary orders.

The plaintiff's claim

25 The plaintiff seeks:

• (a) an order for the sale of Leaver Place;

• (b) her share of occupation rent calculated at a rate of $450 per week from 27 March 2018 to 27 March 2019 and at $500 thereafter until the date of sale;

• (c) judgment in the sum of $68,250 against each of the first, second and third defendants, together with interest; and

• (d) ancillary orders providing for the terms of sale of Leaver Place and distribution of the proceeds of sale, after deduction from the defendants' share of any judgment the plaintiff might obtain against each of the first, second and third defendants.

The defendants' response

26 The defendants oppose the plaintiff's claim. The defendants say that a family arrangement was made at the time the agreement for sale and purchase and deeds of debt were executed. That family arrangement was to the effect that the plaintiff would...