IN THE MĀORI LAND COURT OF NEW ZEALAND TAITOKERAU DISTRICT A Applicant. TANIA TIPENE Respondent

Transcription

1 85 Taitokerau MB 2 IN THE MĀORI LAND COURT OF NEW ZEALAND TAITOKERAU DISTRICT A UNDER IN THE MATTER OF BETWEEN AND Section 18(1)(a), Te Ture Whenua Maori Act 1993 An application for determination of ownership of a dwelling situated on MOTATAU 2 SECTION 49A4F JOSEPH TIPENE Applicant TANIA TIPENE Respondent Hearing: 10 October 2011 (20 Taitokerau MB ) 13 March 2012 (39 Taitokerau MB ) 11 May 2012 (40 Taitokerau MB ) 12 November 2012 (51 Taitokerau MB ) 9 May 2013 (59 Taitokerau MB ) 20 August 2013 (66 Taitokerau MB ) 12 December 2013 (76 Taitokerau MB ) (Heard at Whangarei) Appearances: Mr W Coutts, Counsel for the Applicant Mr D Shanahan, Counsel for the Respondent Judgment: 19 August 2014 RESERVED JUDGMENT OF JUDGE M J DOOGAN Copies to: Mr W Coutts, Thomson Wilson Law, PO Box 1042, Whangārei, wmc@thomsonwilson.co.nz Mr D Shanahan, PO Box 1801, Whangārei, david@davidshanahan.co.nz

2 85 Taitokerau MB 3 Introduction [1] This decision relates to an application by Joseph Tipene ( the applicant ) to determine ownership of the dwelling known as the Old Home situated on Motatau 2 section 49A4F. [2] Tania and Gary Tipene had lived in the Old Home for approximately 24 years and have raised five children there. The Old Home was originally inhabited by Gary s grandparents. In 1984 the Old Home was in a dilapidated state and Gary s father (Toeke Tipene) invited Gary and Tania to do the Old Home up and move in. Gary, Tania, and extended whānau spent approximately three years renovating it to a standard suitable for occupation. They moved into the home late in [3] Gary died suddenly at home on 1 February Gary and Tania s two youngest children (aged eight and eleven years) were living with them in the house at this time. [4] Two weeks later Gary s older brother, Joseph, commenced this application to determine ownership of the house. Two weeks after that on 26 February 2011, Tania was told she would be required to pay rent of $50 per week for the right to occupy the house. [5] Tania left the house approximately four months later in protest at the rental policy. [6] Tania subsequently filed a notice of intention to appear to oppose Joseph s application. Tania says: 1 The Trust imposed rent which was unfavourable to me as they did not consider compensation or recognition for the renovations or that I still had two dependent children. Rather than face eviction I left with my two children in mid-june this year. [7] Tania provided detailed corroborating information as to improvements made to the dwelling and the circumstances leading up to her decision to move out. She concludes with the following: 2 The three months I have been out of my house has been very hard. I miss my husband terribly. I cannot reach to touch anything that was his to calm me. All my 1 2 Tania Kathleen Tipene, notice of intention to appear (3 October 2011). ibid at [51]

3 85 Taitokerau MB 4 children are unsettled and feel the same need as me. This letter is not an angry vendetta, nor is it a sob story to the Court, but an honest abridged account of our lives building a home and whānau to live in it. Background [8] The Old Home is one of two dwellings situated on Motatau 2 Section 49A4F. Motatau 2 Section 49A4F is Māori freehold land and is approximately hectares. Motatau 2 Section 49A4F was created by partition order on 2 March The original owners were Peeni Henare and Matire Maraea. At the time the partition order was made a further order was made under s 163(a) of the vesting the block in Peeni Henare and Matire Maraea for the lives of them both jointly and then to the survivor for life with remainder to Ngarora Mariana Peeni Henare as to the house and 1 acres and access thereto and in Ngarora Mariana Peeni Henare as to the balance. 4 Ngarora was succeeded to by Toeke Tipene the father of Gary Tipene. Toeke Tipene owned of the 100 shares. He died in [9] Gary s brothers Joseph and Ray Tipene were appointed joint executors of the will. Joseph and Ray held the land interests as executors until February 2004 when the lands were vested in equal shares in the eight surviving children of Toeke Tipene.5 Those interests were transferred shortly thereafter into the Tipene o Te Waerenga Whānau Trust ( the Trust ). Each of the eight siblings were appointed as trustees for the whānau trust.6 The Old Home [10] While Gary s whanau had undertaken some work on the dwelling in the 1970 s, it was dilapidated and not fit for occupation when Toeke Tipene invited Gary and Tania to renovate the house and occupy it. [11] Gary and Tania with the assistance of extended whānau made extensive repairs to the Old Home. When Gary and Tania commenced renovations in 1984 the house had no water, no electricity, no ablution facilities or laundry. Prior to moving in, in their spare time and with the help of Tania s father and brothers, work was done to the exterior walls Bay of Islands MB (27 BI ). 27 Bay of Islands MB 116 (27 BI 116). 10 Whangārei Registrar MB 53 (10 RGTO 53). 99 Whangārei MB 155 (99 WH 155).

4 85 Taitokerau MB 5 and floors and piles. A number of windows were replaced, kitchen cupboards installed, beams in the ceilings for the kitchen and lounge were added and ceiling panels installed. Water was connected to the house by an alkaline hose from a puna. In 1987, when Gary and Tania first moved into the house they used a small gas stove to cook on. Candles and a Tilley lamp were used for lighting purposes. They also used a toilet located in the other dwelling on the block until an outhouse was established. [12] After Tania and Gary moved in, further extensive renovations were carried out including painting, plastering, fencing, roading around the drive, installation of a flush toilet, septic tank, fire place and concrete block, and rewiring and installation of a new switchboard. An extension to the Old Home added a new bathroom including a hot water cylinder, basin, interior walls and lining. A carport was erected and a range of other work was carried out to the exterior of the house and surrounds. [13] At no stage was there any suggestion that by Toeke Tipene that Tania and Gary would be required to pay rent. For at least 18 of the 24 years they were in occupation, Gary and Tania paid the rates for the block. Tipene o Te Waerenga Whanau Trust [14] The Trust was established On 21 April 2004 the application was bought by Joseph Tipene who at that time stated: 7 There are 2 dwellings on the block. My brother Gary occupies one and the other is a whanau papakainga. [15] On 18 October 2004, the Court granted Joseph Tipene an occupation order with respect to an area of 2000m² as a site for a dwelling on Motatau Sec 49A4F.8 The location of the proposed dwelling was, in general terms, across the drive from the house Gary and Tania were occupying and in an area known as the Old Orchard. No house has been built on that site and the occupation order was cancelled by consent in Whangārei MB 155 (99 WH 155). 100 Whangārei MB 269 (100 WH 269).

5 85 Taitokerau MB 6 The Trust s Rental Policy [16] Approximately two weeks after Gary s tangi Tania was told that the Trust would be implementing the new policy of charging rental, and providing she complied, she was welcome to stay. Why the trustees felt they needed to do this so soon after Gary s death is difficult to understand. It was an abrupt way to treat a grieving widow. [17] Minutes from the whānau trust meetings in February and March 2011, shortly after Gary s death, shed some light on what the trustees were trying to achieve. Minutes for the meeting of 26 February 2011 record that the Old Home occupancy is now to be under the same rental basis as the farm house. 9 All income earners are now to pay either $7.00 per night or $50.00 per week. The minutes record that in the case of Tania who is a more permanent occupier, she would pay $50.00 per week with the support of her income earning offspring. A table of contributions is included which records monthly contributions from all of Gary s seven siblings (other than Des) of $40.00 per month (Des contributing $20.00 per month as he only has one offspring and makes a significant contribution by physically assisting with the maintenance of the block). Tania Tipene s whānau is to contribute $ monthly not on monthly contribution basis but under tenancy agreement scheme. [18] The minutes of that meeting also record a response from the secretary (Joseph Tipene) to a question as to why policies, rules and procedures had suddenly become a big focus. The secretary is recorded as explaining that due to naivety, ignorance and the older members of the Trust being too involved in making their way in the Pākehā world, there was no leadership and nothing in place to direct management strategies. Coupled with affection for Gary and his family there was no desire to impose one s will on his efforts to achieve and there was an honest attempt to respect the privacy of the family and to play a supportive role rather than impose rules and policies that Gary was not inclined to want to follow anyway. However it is past the time to reflect on what should have been and start managing the estate in a proper businesslike manner it may be the Pākehā way but it works see Evidence of Tania Tipene (23 September 2011) Appendix at ibid at 2.

6 85 Taitokerau MB 7 [19] In a written statement to Trust circulated prior to its meeting of 26 March 2011, the secretary again records that he has not wasted time clarifying the position of the Trust and its direction going forward. Joseph Tipene notes that there had been a lack of leadership and direction for which he takes some responsibility as eldest in the family. He goes on to note that it is imperative that: 11 we all realise that we are legally under a whānau trust which was by deed of a Māori Land Court order formed in 2004 records for which all trustee families received but unfortunately most did not take seriously. Again, I take full responsibility for not enforcing policies and rules as enforced under the Court order of the Māori Land Court at that time. However, all is not lost if we all play by the rules from here on, it should be, as the saying goes, a piece of cake. Trust me. I want Gary s family to feel comfortable living in the old home for as long as they want to with due regard to the policies and rules laid down by the Trust. [20] The following is taken from a document described as Talking Points for Meeting 7 June It appears to have been drafted by the Trust secretary, Joseph Tipene. 12 OLD HOME RENTAL ISSUE: We appreciate Tania s concerns regarding rent, since the family have become used to occupying the home at minimal cost. And because of Gary s individualistic ways, his health issues, and the fact that he contributed well in certain aspects, including a percentage of the upgrade of the old home, fencing, water reticulation and cattle management, we felt we couldn t impose on him the extra financial burden, since he took over rates payments of $1000 per year. The fact remains however, that all members of the Toeke Tipene family have contributed equally as much, including financial input to the farm s management and welfare since dad passed on, and they don t even enjoy the benefits of living here. Now that the property is operated under a Trust, it is even more essential that we operate legally under the Order of the Māori Land Court. If in fact Tania refuses to pay rent as directed by the Trust, there is one other option for her and that is to re-continue paying the rates, pay the house insurance, and all upkeep and maintenance aspects, including repairs and improvements, that will cost more than the $50 a week imposition. The last resort, of course, is an eviction order by the Trust and we don t want to do that unless it becomes an absolute necessity. Procedural history [21] The application was filed on 14 February The applicant sought determination of the ownership of two dwellings on Motatau 2 Section 49A4F. In documents filed in support of the application, the applicant records that Gary had recently passed away and that the Trust had decided at a meeting following his death: Evidence of Tania Tipene (23 September 2011).Appendix Evidence of Tania Tipene (23 September 2011) Appendix see Letter filed in support of Application dated 14 February 2011.

7 85 Taitokerau MB 8 to advise his family that the continued occupancy of the old home was assured, but because the homes are an integral part of the estate, the Trust wishes to make application for full ownership, in order that no person or persons may assume ownership, and that financial policy as laid down by the Trust as regards rent is retained. [22] The matter came before Judge Ambler on 20 October The parties agreed to hold a meeting and the matter was adjourned to February The matter came before Judge Ambler again on 13 March The parties had not been able to resolve the issues and a further adjournment was granted and the matter was set down for a settlement conference to be held on 11 May [23] The settlement conference was unsuccessful. On 11 May 2012 Judge Ambler issued a minute recording that fact. The trustees were directed to hold a general meeting of beneficiaries to address the vacancy in trusteeship occasioned by the death of Gary. The application to determine ownership of the old home was referred to another Judge. 16 [24] On 12 November 2012 the matter came before Deputy Chief Judge Fox who further adjourned the matter for three months in order to call for a valuation. Both parties were invited to seek appointment of legal counsel (costs to be met from the special aid fund). Judge Fox indicated that she would seek from the valuer an indication of the rental value of the house at the time Tania and Gary first moved in and then at the time Tania vacated. The indication given by Deputy Chief Judge Fox was that following receipt of the valuers report, a calculation would be done offsetting the notional value of the rental against the expenditure by Gary and Tania on the house including apportionment with respect to any monies expended for the payment rates. 17 [25] As a result of those directions, Thompson Wilson Solicitors in Whangarei were appointed to represent the trustees 18 and Mr David Shanahan was appointed to represent Tania Tipene. Mr David Chester of Northland Valuers was appointed to provide a valuation report. His report is dated 31 January Taitokerau MB 214 (30 TTK 214). 39 Taitokerau MB 173 (39 TTK 173). 40 Taitokerau MB 183 (40 TTK 183). 51 Taitokerau MB 173 (51 TTK 173). Wayne Coutts and Mr McGhee.

8 85 Taitokerau MB 9 [26] The matter was then referred to me. I convened a teleconference on 14 March 2013 and set the matter down for a hearing in Whangarei on 9 May During the course of that hearing, the outline of a possible agreement emerged. The parties required more time to discuss details and the matter was adjourned to the August sitting of the Court in Whangarei. All counsel were then directed to advise the Court as to progress at least two weeks prior to that hearing. [27] Counsel for the trustees advised the Court by letter dated 13 August 2013 that a potential agreement which might allow for resumption of occupation of the Old Home by one of Tania s children could not be advanced because an alternative source of funding to carry out some remedial works on the house could not be found. The matter would need to go to a full hearing. [28] A hearing took place on 12 December Unfortunately the minutes for that hearing were delayed and not released until early April By a further minute dated 7 April 2014, I advised the parties that I would issue this decision as soon as possible. 21 Submissions for the Trust [29] Mr Coutts for the trustees argued that the application should be dealt with first by analysis of the valuation and then consideration of any additional matters that ought to be taken into account. [30] Mr Coutts submitted that taking into the fact that Gary and his family moved into the Home in 1987, carried out work on the Old Home between 1984 and 1987 to make it habitable and vacated the property in June 2011 the calculations on the valuation are: 22 Value of Home as at June 2011 $55, Less value of Home as at 1984 $8, $47, Notional rental of $40.00 per week from 1987 to 2011 (24 years at $ pa) $49, Taitokerau MB 151 (59 TTK 151). 76 Taitokerau MB 146 (76 TTK 146). See 76 Taitokerau MB 103 (76 TTK 103). At the time I estimated that a decision would issue in late May or early June. Submissions on behalf of applicant (12 December 2013) at [5]-[8].

9 85 Taitokerau MB 10 ($2,920.00) These calculations have been made strictly in accordance with the methodology envisaged by Deputy Chief Judge Fox at the hearing of 12 November 2012 and show that on face value Gary is indebted to the Trust in the sum of $2, [31] Mr Coutts argued that by adopting an opening value based on a lower value at 1984 (rather than the 1987 value) and by adopting the lowest notional weekly rental he had erred in favour of Gary and Tania. Mr Coutts also submitted that it was not necessary to determine in detail the extent or cost of the work undertaken by Gary and Tania during their occupation because that was captured in the valuation of the property as at June That value is said to reflect in depreciated terms the cost of the improvements paid for by Gary between 1984 and [32] Mr Coutts further argued that the Court ought not to put any weight on the repairs paid for out of the Housing New Zealand suspensory loan as this required no out of pocket expenses by Gary and Tania and the value of that expenditure was reflected in the value of the home as at June [33] On the basis that rates are universally accepted as a revenue charge against an occupier, Mr Coutts submits that those payments should lie where they fall. Mr Coutts also notes that the rental assessment in respect of the home makes no allowance for the fact that during much of the occupation Gary and Tania were able to use the whole of the land on which the home is situated. [34] In summary, Mr Coutts submitted that Gary and Tania would not be entitled to compensation in respect of repairs and maintenance on the home and that the Court should make an order under s 18(1)(a) of the Act that the home runs with Motatau 2 Section 49A4F and accordingly is the property of the Trust. Submissions for Tania Tipene [35] Mr Shanahan submitted that Mrs Tipene had indicated that she wanted the Old Home back for her children and if that was not possible then she wanted recognition in the form of compensation for the improvements to the Old Home done by herself, her late husband, her children and her whānau. Mr Shanahan pointed to the Court s jurisdiction

10 85 Taitokerau MB 11 under s 18(1)(a) which includes claims at law or in equity as to any right title, estate or interest in any Māori freehold land. On that basis Mr Shanahan submits the Court has jurisdiction to consider Mrs Tipene s claim for compensation and to apply general principles of constructive trust and/or unjust enrichment. [36] Mr Shanahan also relied on the valuation but approached calculation of compensation on the basis that the Court has a broader jurisdiction to award an amount to reflect the contributions made by Mrs Tipene and her late husband which would represent the benefit accruing to the whānau trust which would otherwise constitute unjust enrichment. [37] Mr Shanahan points to developments in the law in relation to constructive trust principles and submits that notwithstanding the absence of any lease, licence to occupy or other formal arrangement relating to her occupation of the old home, those principles would allow the Court to award compensation for what has clearly been contributions by her and her family to the acquisition, preservation or enhancement of the Trust assets. [38] Mr Shanahan submits that the work, money and improvements made by Mrs Tipene and her late husband over 26 years placed the Trust in a situation where it has been unjustly enriched at the expense of Mrs Tipene. Restitution for such improvements should be ordered by the Court by way of a compensatory payment to Mrs Tipene and her children. [39] Mr Shanahan points to extensive evidence of the nature of the work undertaken and relying on the valuation evidence submits that taking the market value of the property as at June 2011 ($55,000) and then deducting the market value of the original dwelling as at 1984 ($8,000), the Court should consider making a payment of the difference to Mrs Tipene ($47,000). To that should be added a further sum of $5,000 representing a modest contribution on account of her lost use of capital which has been applied towards preservation, enhancement and improvement of the old home (including payment of rates as well as maintenance and repair of the farm land). [40] From this amount Mr Shanahan submits that it is not appropriate to deduct any amount on account of rent. Mr Shanahan points to evidence of a family arrangement

11 85 Taitokerau MB 12 which included sharing of the stock grazed on the property and the invitation to Gary from his father to come home and make good the old home for himself and his family. Mr Shanahan submits that Mrs Tipene is prepared to give up her previous expectations of a right of occupation or ownership of the old home based on the statements of Gary s father. The Court should however take this into account when considering what is appropriate because any indication that rental would be imposed on her and her late husband and children for continued occupation of the home was never considered. It would also be inconsistent with the spirit of the invitation made by Gary s late father. Had rent been imposed at the outset the circumstances today would likely be significantly different. To now retrospectively impose a rental charge would be to second guess the intentions of all parties. Issue [41] The issue in this case is whether Tania Tipene has an equitable interest in the Old Home that the Court can and should provide for under s 18(1)(a) of the Act. Law [42] Section 18(1)(a) of the Act provides the Court with the jurisdiction: To hear and determine any claim, whether at law or in equity, to the ownership or possession of Māori 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. [43] Tania Tipene is not an owner in Motatau 2 Section 49 A4F. Ordinarily her children would be entitled to succeed to Gary s shares and Tania would be entitled to a life interest however in this instance the shares in Motatau 2 Section 49A4F are vested in the Trust. Gary and Tania s children are beneficiaries of the trust. 23 [44] There is no occupation order with respect to both dwellings on the block. Therefore ownership of the dwelling run with the land and are now the property of the 23 I note for completeness that for succession purposes a beneficial interest in Māori freehold land is deemed to include the interest of the freehold owner in all buildings and other fixtures attached to the land, and all things growing on the land Te Ture Whenua Māori Act, s 99(2).

12 85 Taitokerau MB 13 Tipene o Te Waerenga Whānau Trust. It is well established that in circumstances such as this it is the trustees who have the power to decide what happens on the land. 24 [45] The Trust order grant powers to the trustees to permit occupation by descendants (of Gary s parents). This includes power to reserve or provide for one or more of the descendants to personally occupy defined parts of the land, to permit erection of dwellings and to lease or license to any descendant at a reduced rent. 25 Gary and Tania s occupation predates the formation of the Trust and has never been the subject of a legal instrument such as a lease or occupation order. [46] In Stock v Morris Judge Ambler reviewed the case law in which the question of the rights of a non-owner to an order under s 18(1)(a) had arisen. 26 Judge Ambler notes that s 18(1)(a) enables the Court to do equity in relation to Māori freehold land and while the kaupapa of the Act promotes the interest of owners the Court cannot allow the actions of owners to cause injustice to non-owners. 27 Judge Ambler identified the following principles: 28 There is no bar to the Court making a s 18(1)(a) order in favour of a non-owner. However, an order vesting interests in the land or a right to possession of the land (or part of it) in favour of a non-owner will likely offend the kaupapa and provisions of the Act. Although in Grace the Court of Appeal did not completely rule out that possibility. Where the Court concludes that a non-owner is entitled to equitable relief, the Court will in the first place look to awarding monetary compensation. If monetary compensation is inappropriate, the Court may award ownership of the house if it can be removed from the land. The Court will take into account the non-owner s free occupation of the land as a factor. Ultimately, each case depends on its own facts. Constructive Trust principles [47] Mr Shanahan argued that this was an appropriate case for the imposition of a constructive trust which would recognise the contributions that Tania, Gary and whānau had made to the dwelling Eriwata v Trustees of Waitara SD Section 6 and 91 Land Trust (2005) 15 Aotea Appellate MB 192 (15 WGAP 192). 99 Whangārei MB 155 (99 WH 155). Stock v Morris Wainui 2D2B (2012) 41 Taitokerau MB 121 (41 TTK 121). ibid at [65]. ibid at [70].

13 85 Taitokerau MB 14 [48] In Stratulatos v Statulatos a constructive trust was applied in similar circumstances. In that case a mother gave a house to her son upon his marriage. The son and his wife took possession and spent considerable money renovating and improving the property. They paid rates and insurance and prior to the marriage had also made some mortgage repayments. The son died intestate and the mother who had reclaimed legal ownership of the property sought to evict the wife. The wife claimed proprietary estoppel and a constructive trust in respect of the renovations and improvements. 29 [49] In considering whether or not a constructive trust arose, McGechan J approached the question in the following way: 30 Standing in the shoes of the plaintiff as claimant (both as successor to Spiros and in the plaintiffs own right), would a reasonable person have understood that their efforts would result in an interest in the property? The answer must be yes. It was a major upgrading of the property over a considerable period of time, and significant personal effort and expense. It went far beyond routine maintenance, or a gesture of appreciation for a right to occupy. The plaintiff s family assisted in a way which would not have been forthcoming unless it was known that the plaintiff herself would gain benefit. Testing the situation by converse, would it have been reasonable to suppose they expected no rights in the property? Testing the question more generally, why else would they undertake this major task? The answers are obvious. If no interests in the property was to be gained, I have no doubt this young couple would have put their money and efforts into obtaining a first home elsewhere without cloudy title. [50] Justice McGechan concluded that there was no difficulty finding either proprietary estoppel or a constructive trust. The learned judge took into account the fact that the house was the traditional home of the Stratulatos family and that it would offend conscience to convey that home (or a share of it) to a former wife. At the same time restricting the wife s recovery to a mere reimbursement of expenditure and effort would also offend conscience. The Court concluded that awarding a fractional interest in the property was the appropriate approach, which once paid out would mean that the former wife must vacate the property. Against that interest in the property there should be an appropriate allowance for use and occupation by the wife of the mother s remaining interest. Justice McGechan noted: 31 In conscience, I consider some leeway should be given the plaintiff over the period immediately following Spiros s death before any such contra is imposed. She was a widow recently and unexpectedly bereaved. One would not ordinarily increase her grief by immediate demand she pay rent to stay in the family home Stratulatos v Statulatos [1988] 2 NZLR 424 per McGechan J. ibid at 437. ibid at 440.

14 85 Taitokerau MB 15 [51] A period of one year following her husband s death was considered appropriate before any rental should be imposed against the plaintiff s interest. [52] Mr Shanahan referred me to the decision of the Court of Appeal in Lankow v Rose. 32 [53] In that case the Court of Appeal awarded a de facto partner a beneficial interest in a property legally owned by her former partner. The Court did so by imposing a constructive trust. Equity cannot alter or interfere with the defendant s legal estate. However, on the premise that the defendant is acting unconscionably by denying the claimant a beneficial interest, equity treats the defendant as a constructive trustee for the legal estate to the extent of the claimants assessed interest. By this means equity requires the defendant to account to the claimant for her interest. 33 [54] The Court of Appeal identified four features which if demonstrated would mean it would be unconscionable for the legal owner to deny the claimant an interest. In these circumstances, the Court would intervene to impose a constructive trust. A claimant must show: 34 a) Contributions, direct or indirect, to the property in question; b) The expectation of an interest therein; c) That such expectation is a reasonable one; d) That the defendant would reasonably expect to yield the claimant an interest. [55] I now consider the application of these principles to the circumstances of this case. I do so aware that the land on which the Old Home sits is taonga tuku iho and that the whānau arrangements at the heart of this case also need to be considered in the context of the tikanga within which they arose Lankow v Rose CA 176/93, 2 December ibid at 8. Ibid at 8-9

15 85 Taitokerau MB 16 Discussion [56] In this case there is uncontroverted evidence that Gary and Tania were invited by Gary s father to restore the old home to be a home for them and their young family (Tania was pregnant with her first child at that time). Tania s father (Wii Niha) provided a letter of support in which he records a conversation that took place between Gary and his father in the following terms: 35 In 1984 when Tania was hapu with her first tamariki Belinda, Tania and Gary and my wife Minnie May (now deceased) and I were at home when Joseph (Toeke) Tipene visited. His conversation was matter of fact and quite direct to his son. Kei hoki mai ki te kāinga whakatikatika i te whare, whai whare mā koe me tō whānau. [57] No one disputes Toeke Tipene s right to make that offer. Tania and Gary accepted the invitation and carried out very substantial improvements to the dwelling to make it habitable before moving in late in Although Toeke Tipene died in 1986 there was no evidence that any of Gary s siblings ever took issue with his right to reside in the dwelling or ever expected that he and Tania would pay rent. The evidence points to a common understanding between Gary s father, Gary, Tania and Gary s siblings that in return for restoring, maintaining and meeting the outgoings in respect of the old home, Gary and Tania would be entitled to live there for so long as they wished. For some 24 years until Gary s untimely death, this was how the arrangement worked, with no apparent issue. [58] Since the formation of the Trust in 2004 and up until the time of Gary s death in 2011, there was no evidence of any discussion or demand from the trustees to Gary and whānau that they commence paying rent. The evidence suggests that any such approach was avoided because it was assumed that Gary would oppose. [59] Whilst there are some similarities with the facts in the Stratulatos case there are some distinguishing features. Toeke Tipene was prompted to invite Gary and Tania to restore the old home in recognition of their need for a home. Gary had returned from the South Island and Gary and Tania were living with Tania s parents in a caravan on their property. It was a practical gesture of aroha and manaakitanga to his son and his son s partner. Tania s whānau then pitched in and assisted with both labour and expense in making the home habitable. The evidence does not suggest a contract-like expectation of 35 Letter of support from Wii Niha (17 September 2011).

16 85 Taitokerau MB 17 financial return or capital gain in return for funds and labour expended. Tania and Gary would have been aware of the significance of the old home to Gary s whānau. They were being offered the opportunity to restore it and live in it because Gary s father recognised their need at the time. What Tania and Gary would have reasonably expected nonetheless is security of tenure given their investment of time and resources to maintain and improve the house. It became their family home as envisaged by Gary s father. They were still raising their children there when Gary died. [60] The implicit understanding appears to have been that in return for their investment in restoring and maintaining the old home, Gary and Tania would be entitled to a life interest (or something similar). In practical terms and applying the questions posed by Justice McGechan in Stratulatos v Stratulatos, would Gary and Tania have undertaken such a major investment of time and energy in restoring the home and then occupying it over a number of years if they thought they would have no interest in it, at least while they had dependent children at home? It is clear to me that the answer would be no. Findings [61] I am satisfied that this is an appropriate case for the imposition of a constructive trust. [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.

17 85 Taitokerau MB 18 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. What Orders Are Appropriate? [63] In Lankow v Rose Justice Tipping observed that a constructive trust can be given practical effect by such means as the justice of the case requires. 36 The most common means are either a vesting order or an order for payment of the assessed value of the beneficial interest. A vesting order is not sought in this instance. I note for completeness that I share the reservations expressed by Judge Ambler in the Stock v Morris case as to whether or not a non-owner can be granted a right of possession under s 18(1)(a). 37 [64] This is not a case where it would be practical to consider removing the house in lieu of monetary compensation. I also note that Tania is no longer seeking an ownership interest in the house but is instead seeking remedies by way of a right of occupation for her Lankow v Rose CA 176/93, 2 December 1994 at 8. Stock v Morris Wainui 2D2B (2012) 41 Taitokerau MB 121 (41 TTK 121) at [72].

18 85 Taitokerau MB 19 children or monetary compensation in recognition of the improvements made to the dwelling. [65] How the constructive trust ought to be executed in this case requires consideration of what the justice of the case requires. In this particular case it seems to me that a constructive trust would best be given practical effect by an award of monetary compensation. If Tania wishes to consider a possible resumption of occupation by one of her children it may be possible to negotiate that in lieu of compensation. That will be a matter for the parties to consider in light of this judgment. [66] As to the amount of compensation, I do not think that simply adopting the 1984 and 2011 values and then imposing a deduction to represent a notional rental represent s a fair response to the nature of the arrangement. I also think there is force in Mr Shanahan s submission that to approach it on this basis would result in a degree of unjust enrichment to the Trust. On the other hand, neither am I persuaded by Mr Shanahan s submission that I should simply accord to Tania and Gary the full benefit of the capital gain between 1984 and 2011 (plus additional compensation) with no deductions. That would be akin to recognising ownership per se, which I don t think was inherent in the nature of the arrangement. [67] I accept the force of Mr Coutts submission that it is neither possible nor necessary to determine in detail the extent or cost of particular works undertaken by Gary and Tania during their occupation because such value is in depreciated terms captured in the value of the property as at June I also accept that the value of the works paid for by the Housing Corporation loan (said to be approximately $27,000) should not be regarded as a direct financial contribution by Gary and Tania personally. Providing they complied with the terms of the suspensory loan it did not represent an out of pocket expense. I do not have any detailed evidence concerning the Housing Corporation suspensory loan or the works that were funded by it. I note this simply to highlight the difficulty of quantifying a beneficial interest strictly in accordance with the methodology envisaged by Deputy Chief Judge Fox. I also note that on the basis of Mr Coutts calculations, Gary and Tania would not be entitled to compensation at all. Given the relatively modest value of the house as at June 2011, the application of even a low notional rental for the entire period has

19 85 Taitokerau MB 20 the effect of overtaking the capital gain on the property during the period of Gary and Tania s occupation. I do not consider this to be a fair outcome either. [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. [69] When Tania left the Old Home in June 2011, her youngest child, then aged eight, and an elder child, then aged 11, were living at the house with her. It is not unreasonable to suppose that but for Gary s untimely death and the subsequent introduction of the rental policy by the Trust, the family would have remained in the home for at least another eight to ten years (all other things being equal). [70] It is possible to calculate an approximate value on that entitlement. For the purposes of this calculation, I will assume a middle figure of nine years and calculate the occupancy right on a per annum basis as follows: Rental at $50.00 per week (a figure nominated by the trustees in 2011) $2600 per year times nine years equals $23,400. Less rates approximately $1200 per annum times nine equals $10,800. Less other miscellaneous outgoings such as insurance, routine maintenance allow $500 per annum times nine equals $4500. Total $6300. [71] There will be an order that Tania is entitled to compensation in the sum of $6,300, plus interest (of $2, see paragraph 73 below). The total sum of $8, is to be paid within three months from the date of judgment. This is so as to provide time for the

20 85 Taitokerau MB 21 Trust to arrange payment and also for Tania if she chooses to do so, to negotiate with the Trust to see if agreement can be reached as to whether that amount could be satisfied by way of a right to occupy in lieu of payment (assessed at the rate of $50.00 per week up to the maximum value of $8,447.60). [72] The trust claims ownership of the Old Home and is entitled to an order under s 18(1)(a) determining it to be the owner. But that is subject to the equities in favour of Tania. Tania is entitled to compensation applying constructive trust principles. I therefore propose to make the s 18(1)(a) order conditional upon payment of compensation and interest to Tania Tipene in the sum of $8, [73] In addition to the conditional s 18(1)(a) order I will also make an order in favour of Tania by of a judgment debt against the Trust in the sum of $6,300. That order will also be pursuant to s 18(1)(a). Interest will be payable on the debt at the rate of 11% per annum from 15 June 2011 to today s date pursuant to s 24B of the Act. There will also be a charging order pursuant to s 82 charging Tania s interests in Motatau Section 49A4F and the Old Home with the total judgment debt. Orders [74] I make the following orders under Te Ture Whenua Māori Act 1993: (a) Section 18(1)(a) determining the Tipene o Te Waerenga Whanau Trust to be the owner of the house known as the Old Home situated on Motatau 2 Section 49A4F; and (b) Sections 18(1)(a) and 24B determining that Tania Tipene is entitled to a judgment sum of $6,300 against the Tipene o Te Waerenga Whanau Trust together with interest at the rate of 11% per annum from 15 June 2011 to today s date being $2, giving a total judgment debt of $8,447.60; and (c) Section 73 the order in paragraph (a) is conditional on the Tipene o Te Waerenga Whanau Trust within three months paying the judgment debt to Tania Tipene (or at Tania s election reaching agreement with her that all or

21 85 Taitokerau MB 22 some of the judgment debt may be satisfied by granting Tania or her nominee the right to occupy the Old Home on the same terms and conditions that applied whilst Gary Tipene was alive, assessed at a value of $50 per week (up to a total value of $8,447.60); and (d) Sections 37(3) and 82 by way of charging order charging Tania Tipene s interests in Motatau 2 Section 49A4F and the Old Home with the judgment debt of $8, Pronounced in open Court at Whangarei at 5pm on Tuesday the 19 th day of August M J Doogan JUDGE