YOUNG v YOUNG [2020] NZHC 3054

YOUNG v YOUNG [2020] NZHC 3054 [19 November 2020]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2019-404-1079[2020] NZHC 3054UNDER the Property Law Act 2007BETWEEN ELLA VICTORIA YOUNGPlaintiffAND SHANE MATIU YOUNGFirst DefendantJINA KIMSecond DefendantCIV-2019-404-2029UNDER the Property (Relationships) Act 1976BETWEEN JINA KIMPlaintiffAND SHANE MATIU YOUNGFirst DefendantELLA VICTORIA YOUNGSecond DefendantHearing: 6 and 7 October 2020Appearances: R G Evans for Ella YoungB N Snedden for Shane YoungA G Rowe for Jina KimJudgment: 19 November 2020JUDGMENT OF GORDON JThis judgment was delivered by me on 19 November 2020 at 2.30 pm, pursuant tor 11.5 of the High Court RulesRegistrar/Deputy RegistrarDate:Introduction[1] There are two separate, but related, proceedings before the Court. The issue atthe heart of the case is whether a son, who is a registered proprietor of a residentialproperty along with his mother, has a beneficial interest in that property.[2] The plaintiff in proceeding CIV-2019-404-1079 (the property proceeding)Ella Young, lives at 85 Mead Street, Avondale, Auckland (the property). The title tothe property records Mrs Young and her son, Shane Young (Shane)1 as the registeredowners of the property. They are joint tenants. It is Mrs Young's position that she isthe beneficial owner of all of the property. She says that the half-interest registered inShane's name is held by him on a resulting trust for her.[3] She seeks an order under s 339(1)(b) of the Property Law Act 2007 (PLA)vesting the entire property in her.[4] Mrs Young also seeks an order under s 142 of the Land Transfer Act 2017 forremoval of the Notice of Claim registered by Jina Kim, the second defendant, againstthe property.[5] Shane supports his mother's case.[6] Ms Kim is Shane's former wife. Her position is that Shane is both the legaland beneficial owner of a half-share in the property.[7] The proceeding in CIV-2019-404-2029 is brought by Ms Kim under theProperty (Relationships) Act 1976 (PRA) (the relationship property proceeding). Itwas transferred to this Court from the Family Court. Ms Kim claims that Shane'shalf-share in the property is relationship property and should be divided equallybetween the two of them. Mrs Young and Shane defend that proceeding.1 I will use Shane Young's Christian name rather than referring to him as Mr Young to avoid anyconfusion with his father, Ronald Young, who is also mentioned in the judgment.BackgroundProperty purchases[8] Mrs Young is now aged 80. She is a widow. She married her late husband,Ronald Young (Ronald), in 1958. Shane, the only child of the marriage, was born in1973.[9] Mrs Young and Ronald bought their first home at 54 Burnley Terrace, Mt Eden,Auckland (Burnley Terrace) in 1974 with their savings from paid employment andwith the assistance of mortgage funding. The home was first registered in Ronald'sname and then transferred into their joint names under the Joint Family Homes Act1964.[10] Mrs Young and Ronald sold the home at Burnley Terrace in 1988 for $140,000.Mrs Young says she and her husband worked hard in the intervening years to pay offthe mortgage.[11] Using the funds from the sale of Burnley Terrace, Mrs Young and Ronaldbought a property at 105 Canal Road, Avondale (Canal Road) for $130,000. They didnot need mortgage finance for the purchase. The sale proceeds from Burnley Terracewere sufficient to meet the purchase price. After they moved into Canal Road,Mrs Young and Ronald found the house required significant maintenance. In order tocarry out remedial work, Mrs Young and Ronald obtained a mortgage, first with UnitedBuilding Society and then Housing Corporation of New Zealand.[12] Ronald was diagnosed with terminal cancer while they were livingat Canal Road. Following the diagnosis, the couple decided to sell Canal Road. Theyfound it costly to maintain and it still had a number of defects which needed to beremedied. As well, a home of the size of Canal Road was no longer needed. Shanewas not living with his parents. He was living and working up north.[13] In September 1993, Mrs Young and Ronald sold Canal Road for $110,000.[14] That same month, Mrs Young and Ronald bought the property at 85 MeadStreet, Avondale, for $104,000. Although it was a smaller property, as a consequenceof taking out the two mortgages, and the need for repayment on sale, Mrs Young andRonald's equity in Canal Road was not sufficient to meet the purchase price of theproperty. The purchase was therefore in part funded from the sale of Canal Road andin part by way of a mortgage from the ASB bank in the sum of $40,651.07.[15] Mrs Young says that in order to obtain the mortgage funding for the purchaseof the property, as she and her husband were both beneficiaries by then, the ASB bankwould not lend to them unless one of the registered proprietors listed on the title wasworking 40 hours a week. In her statement of defence, Ms Kim accepts that in thecircumstances of Mrs Young and her late husband, normal commercial practice wouldhave been for the ASB to require a joint application by Ronald, Mrs Young and Shane;for Shane to have joint and several liability for the advance made by the ASB, and forShane to be a registered proprietor of the property.[16] Mrs Young says that at that time they approached Shane, who was still up northand working full time, and asked him to go onto the title with them so she and Ronaldcould get the mortgage funding for the purchase of the property. Shane agreed. Shanedid not make any cash contribution towards the purchase of the property. Mrs Youngsays there was no intention that Shane would have any beneficial interest in theproperty.[17] It is not known whether there was any written agreement regarding thebeneficial ownership of the property. The solicitor who acted for Mrs Young andRonald on the purchase has passed away and his files cannot be located.[18] Mrs Young says she and Ronald lived in the property and accepted fullresponsibility for paying the mortgage and all outgoings, including rates andinsurances associated with the property. They did not on any occasion ask Shane toassist with mortgage payments or for any outgoings on the property.[19] Ronald died on 2 July 1998. In his will Ronald left all of his estate to his wife.Mrs Young's evidence was that at the date of Ronald's death, he and Mrs Young werethe only ones living at the property. Shane says he came back to Auckland before hisfather died and began to live permanently at the property after his father's death.[20] After Ronald's death Mrs Young continued to make all payments on theproperty, including mortgage payments, rates and insurances. She sought assistancefrom WINZ to meet the mortgage payments after Ronald's death. Shane did not assistwith any mortgage payments nor did he make any payments for rates or insurance.The mortgage was repaid by Mrs Young on 22 December 1999.[21] When Shane began living permanently at the property after Ronald's death, heinitially paid some rent to his mother. Subsequently, in substitution for rent, he helpedhis mother with maintenance around the house in return for accommodation.[22] Shane supported his mother's evidence. He said he made no cash contributionstowards the purchase of the property, he did not live at the property at the time of itsacquisition, nor did he make any payments towards the property. His inclusion on thetitle was simply to help his parents satisfy the ASB's loan criteria. In his oral evidencehe said he thought he was acting more as a guarantor because he was in stableemployment.[23] Mrs Young and Shane both say that even after Shane came to live at theproperty he still considered it belonged to his mother.[24] On Ronald's death title devolved to Mrs Young and Shane as survivors. Therewas a joint application by Mrs Young and Shane for transmission by survivorshipdated 29 November 1999. This document formed a significant part of Ms Lim's casethat Shane has both a legal and beneficial interest in half the property. I will return tothe document later in this judgment.[25] At the time of signing the application for transmission of the property toMrs Young and Shane, there was still an amount owed to the ASB Bank secured bythe mortgage. The outstanding balance was repaid the following month.Marriage of Shane and Ms Kim[26] After a 10 month visit to New Zealand some time prior to 2000, Ms Kim cameback to New Zealand in 2004. She met Shane in New Zealand that year. They did notlive together before their marriage which took place in June 2006 in South Korea. InJanuary 2007, after returning to New Zealand, they came to live with Mrs Young atthe property. They lived there until they separated in February 2012. During that timethey travelled back to South Korea on occasion. Shane estimates they would havelived in South Korea for about a total of two years between January 2007 and February2012. Ms Kim did not agree with this estimate. But she agrees that each time theywent to South Korea it was for a period of around one or two months. She says theywent there at least four times, approximately every 18 months.[27] They do agree that on all the occasions they went to South Korea, the propertyremained their place of domicile. They were only ever visiting South Korea and didnot go there to stay permanently. They agree that on one occasion they lived in SouthKorea for around 10 to 11 months.[28] It is not disputed that Shane and Ms Kim did not make any rental or boardpayments to Mrs Young while they were living in the property. They did make somepayments towards the internet and power. They also undertook some renovations.Mrs Young says they were never finished and Shane agrees.[29] In February 2018, Ms Kim filed the relationship property proceeding in theFamily Court. As noted, in that proceeding she claims Shane's half share in theproperty is relationship property. She seeks half of that half-share. Given her interestin the property, Mrs Young was joined as a party to the relationship propertyproceeding, pursuant to s 37 of the PRA.[30] In order to protect her interest in the property, Mrs Young also filed the propertyproceeding in the High Court seeking the orders and declarations referred to above.Issues[31] The following issues arise:(a) Is Shane's legal interest in the property held subject to a resulting trustin favour of Mrs Young?;(b) If so, should the Court:(i) make an order against Shane, that the legal title to the propertybe transferred into Mrs Young's sole name; and(ii) make an order against Ms Kim that the Notice of Claimregistered against the title to the property by Ms Kim beremoved?(c) If Shane does not hold his legal interest in the property on a resultingtrust how should that interest be divided between Shane and Ms Kim?[32] In the property proceeding, Ms Kim does not plead that, in the event the Courtwere to find Shane holds his interest in the property on a resulting trust for his mother(in other words that Mrs Young has the entire beneficial interest), a constructive trustarises in favour of Shane and Ms Kim based on their contributions to the property. Inhis oral submissions Mr Rowe, for Ms Kim, confirmed she does not advance thatargument.[33] The parties agree that if I were to determine that Shane holds his share of theproperty on a resulting trust for his mother then:(a) that disposes of Ms Kim's claim for half of Shane's share in theproperty. (The Court will still need to make some orders regardingseparate property. The terms of those orders are agreed betweenMs Kim and Shane); and(b) there is no opposition to the Court making the orders under s 339(1)(b)of the PLA against Shane and ordering that Ms Kim's Notice of Claimon the title of the property be removed.Submissions[34] Although Ms Evans, for Mrs Young, refers to the presumption of a resultingtrust, her submissions focus on the actual intention of the parties. She emphasises thefact that Mrs Young and Ronald provided all the funds for the purchase of the propertyand that Shane did not make any financial contribution to the purchase.[35] She submits that Shane held title to the property initially on a resulting trustfor both his parents and, following the death of his father, on a resulting trust for hismother.[36] Mr Snedden, for Shane, refers to Shane's evidence that he did not, at the timeof purchase, and does not now consider he has an interest in the property. The jointapplication for transmission (which I will come to) is not an indication of a contraryintention, nor does it support the counter presumption of advancement.[37] Mr Rowe, for Ms Kim, says there is a statutory presumption that, as Shane hasa legal interest, he also has an equitable interest. This presumption, which he also saysis rebuttable, is set out in s 47 of the Land Transfer Act 2017.2 He submits that itcannot be said that Mrs Young and Ronald made the sole contribution to theacquisition of the property simply because they provided the cash for its purchase. Hesays Shane also contributed to the purchase by accepting liability under the mortgage.[38] Mr Rowe further submits that the joint application for transmission of theproperty rebuts the presumption of a resulting trust and supports the counterpresumption of advancement on the balance of probabilities. He says the jointdeclaration in the application confirms Mrs Young understood and accepted that Shanewas both the legal and beneficial owner of a half share in the property.2 Formerly Land Transfer Act 1952, s 61.Legal principles[39] Shane's legal interest is indefeasible.3 The register does not record anyequitable obligation to which Shane is subject. But remedies in personam remainavailable despite the protections afforded to registered proprietors by the LandTransfer Act 1952. As Lord Wilberforce said in Frazer v Walker:4 their Lordships have accepted the general principle, that registration underthe Land Transfer Act 1952 confers upon a registered proprietor a title to theinterest in respect of which he is registered which is immune from adverseclaims, other than those specifically excepted. In doing so they wish to makeclear that this principle in no way denies the right of a plaintiff to bring againsta registered proprietor a claim in personam, founded in law or in equity, forsuch relief as a Court acting in personam may grant.[40] The legal principles regarding a resulting trust which arises in response to apresumed intention of the transferor or settlor of property are well settled.5 In Potterv Potter, the Court of Appeal summarised the principles in this way:6[14] In the present context the essence of a resulting trust is that a personproviding or contributing to the purchase price of property conveyed partly orwholly into the name of another retains a beneficial interest in the property tothe extent of his or her contribution if there is nothing to indicate that he orshe intended to confer the beneficial interest on the legal transferee: see, forexample, Bateman Television Limited (in liquidation) v Bateman and Thomas[1971] NZLR 453 (CA) and Efstratiou v Glantschnig [1972] NZLR 594 (CA).The settlor must have expressed no intention to dispose of his or her beneficialinterest. To fill the vacuum, the law presumes an intention to retain thebeneficial interest which the settlor has never effectively alienated. The trust"results" from the lack of effective disposition to another.[15] A refinement to that principle is that where the settlor transfers thelegal title to property for an express purpose, the transferee receives it subjectto a trust for the attainment of that primary purpose. If, for whatever reason,effect can not be given to the primary purpose effect must be given to thecontingent secondary purpose of restoring the property to the settlor. Thegeneral principles are set out in Barclays Bank Limited v QuistcloseInvestments Limited [1970] AC 567; Baumgartner v Baumgartner (1987) 164CLR 137; and Cossey v Bach [1992] 3 NZLR 612.3 Land Transfer Act 1952, ss 35, 41 and 62. The presumption Mr Rowe identifies in relation to s 47of the Land Transfer Act 2017 is that of joint tenancy in the absence of words of severance whichwould create a tenancy in common. That provision does not affect the status of any equitableinterests in the land.4 Frazer v Walker [1967] NZLR 1069 (PC) at 1078.5 Charles Rickett and Jessica Palmer "Proprietary remedies" in Peter Blanchard (ed) Civil Remediesin New Zealand (2nd ed, Brookers, Wellington, 2011) 423 at 439-440.6 Potter v Potter [2003] 3 NZLR 145 (CA) at [14]-[16].[16] In either case the rationale is that notwithstanding the disposition oflegal title, the settlor has retained the beneficial interest throughout, in theformer case without qualification, and in the latter subject to the contingencythat it would be superseded by fresh beneficial interests if and when the statedprimary purpose were attained.[41] In the leading case of Crampton-Smith v Crampton-Smith,7 the Court of Appealreferred8 to the well-known statement by Lord Browne-Wilkinson in WestdeutscheLandesbank Girozentrale v Islington London Borough Council of the two types ofresulting trusts:9... (A) where A makes a voluntary payment to B or pays (wholly or in part) forthe purchase of property which is vested either in B alone or in the joint namesof A and B, there is a presumption that A did not intend to make a gift to B:the money or property is held on trust for A (if he is the sole provider of themoney) or in the case of a joint purchase by A and B in shares proportionateto their contributions. It is important to stress that this is only a presumption,which presumption is easily rebutted either by the counter-presumption ofadvancement or by direct evidence of A's intention to make an outrighttransfer ... (B) Where A transfers property to B on express trusts, but the trustsdeclared do not exhaust the whole beneficial interest ...[42] In New Zealand, a resulting trust remains the orthodox response when a partyhas contributed to the purchase price of a property which is then registered in the name(or names) of another (or others).10 In Crampton-Smith, the Court of Appeal statedthat where the presumption applies it is generally regarded as having dispositive effectunless the presumption is rebutted.11 The presumption may be rebutted either by thecounter-presumption of advancement or by direct evidence of an intention to make anoutright transfer. In either case the presumption of a resulting trust would berebutted.12 The burden lies on the opposing party to adduce evidence to rebut thepresumption.13[43] The key issue is what was intended at the time of the transaction.7 Crampton-Smith v Crampton-Smith [2011] NZCA 308, [2012] NZLR 5.8 At [35].9 Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 (HL)at 708.10 Hemu Trade Company Limited v Le [2018] NZHC 982 at [60] citing Jessica Palmer "ResultingTrusts" in Andrew Butler (ed) Equity and Trusts in New Zealand (2nd ed, Thompson Reuters,Wellington, 2009) 307 at [12.3.1]. See also the Court of Appeal's recent discussion of the keyprinciples of a resulting trust in Chang v Lee [2017] NZCA 308, [2017] NZAR 1223 at [18]-[21].11 At [37] and [39].12 Crampton-Smith v Crampton-Smith, above n 7, at [40].13 At [42] referring to William Swadling "Explaining Resulting Trusts" (2008) 124 LQR 72 at 74.[44] Finally, the Court of Appeal stated in Crampton-Smith that where there isevidence of an actual intention to create a trust, then there is generally no need to relyon any presumed intention and vice versa. But in a case where the presumed intentioncoincides with the actual intention of the party contributing the funds, then each maybe considered as supporting the other.14Discussion[45] This case is somewhat different from the more common situation where a partywhose name is not on the title argues that a resulting trust arises by virtue of theirfinancial contribution to the acquisition of the property and that is resisted by theperson who has legal title. In this case, Shane agrees with his mother that he has nobeneficial interest and that he holds his half share on trust for her. Both Mrs Youngand Shane say that this intention existed at the time of the acquisition of the property.In other words, it is not a recent construct to avoid legal liability in the relationshipproperty proceeding.[46] It is not disputed that Mrs Young and Ronald provided the cash contributionfor the purchase of the property and that Shane did not make any cash contribution. Ifthe cash contribution is the only contribution taken into account, there is a presumptionof a resulting trust arising at the time of acquisition in favour of Mrs Young andRonald.[47] However, as noted above, along with his parents, Shane signed the ASBmortgage documents and in doing so assumed mortgage liability. As also noted above,Mr Rowe submits that assumption of mortgage liability by Shane constitutes a directfinancial contribution to the purchase price. If that were the case Mrs Young, Ronaldand Shane would each hold a beneficial interest calculated in relation to the cashcontribution and their respective contributions by way of their mortgage liability.[48] Mr Rowe relies on the judgment of Davidson J in Mamat v Mamat.15 As faras I am aware that is the only judgment in this jurisdiction which has considered the14 At [44].15 Mamat v Mamat [2018] NZHC 639.issue. In coming to his decision Davidson J noted the absence of any New Zealandjudicial or other commentary16 but referred to Equity and Trusts in Australia17 whichdiscussed the judgment of Calverly v Green.18 Davidson J applied the reasoning inthat case and took into account the shared mortgage liability as creating a beneficialinterest.[49] It is not necessary in this case to consider whether to follow Davidson J or not.That is because I am satisfied on the evidence that there was no intention to confer abeneficial interest in the property on Shane and a resulting trust arose in favour ofMrs Young and Ronald at the time of acquisition of the property. My reasons are asfollows:(a) The entire cash contribution for the purchase of the property wasprovided by Mrs Young and Ronald. That cash contribution wasderived from the sales of previous homes owned by them. They builtup the equity in those other properties from their savings;(b) Shane did not assume any mortgage liability for the loans securedagainst the previous property owned by Mrs Young and Ronald (CanalRoad);(c) Shane's assumption of mortgage liability for the purchase of theproperty arose from ASB's requirement, because Mrs Young andRonald were both beneficiaries, that a person in full time employmentassume liability together with Mrs Young and Ronald;(d) That requirement resulted in Shane being registered on the title of theproperty;(e) The arrangement proceeded on the basis that Mrs Young and Ronaldwould have full responsibility for repaying the mortgage and all othercosts, including insurance and rates associated with the property;16 At [117].17 GE Dal Pont Equity and Trusts in Australia (7th ed, Thomson Reuters, Sydney, 2019) at [26.85].18 Calverley v Green (1984) 155 CLR 242.(f) Following Ronald's death, Mrs Young continued to accept fullresponsibility for repaying the mortgage as well as the rates andinsurances. She sought assistance from WINZ to make those payments;(g) When Mr Young began living with his mother permanently in theproperty he did not contribute to any of those payments. I consider thatif the intention had been that Shane have a beneficial interest in theproperty, it would be somewhat unusual for him to stand by when hismother was struggling to make the mortgage payments after his father'sdeath, when he was living in the property;(h) The absence of any intention at the time of acquisition that Shane havea beneficial interest in the property is also consistent with the fact thathe did not assist his mother with rates, insurance and other propertyassociated costs; and(i) When he returned to live at the property with his mother, Shane initiallypaid rent to his mother. That is inconsistent with his having a beneficialownership interest in the property.[50] Having found there was no intention at the time of acquisition of the propertythat Shane would have a beneficial interest, it follows that I accept the evidence ofMrs Young and Shane is not contrived so as to deprive Ms Kim of her claimed interestin the property.[51] Mrs Young's answer to questions put to her on that issue had a degree of logicto them. It was put to her that it was only once she had been told by Shane that Ms Kimwas making a claim against the property that she decided she would assert she ownedthe full interest in the house because she had never said it before.[52] She asked rhetorically who was she going to tell. Mr Rowe again put it toMrs Young that it was not until 2017 after Ms Kim and Shane had separated that shemade an assertion that she was the owner of the entirety of the property. AgainMrs Young's response was logical. She asked why should she. As far as she knew "Ididn't have to worry about my house".[53] I do not consider any of the matters raised by Mr Rowe, contradict the intentionthat Shane would not have a beneficial interest. I address each of those matters in turn.[54] First there is the joint application for transmission by survivorship signed byMrs Young and Shane. Mr Rowe submits that this is "crucial evidence in this case".[55] The transmission to Mrs Young and Shane following Ronald's death wasregistered under the now repealed Land Transfer Act 1952. The application fortransmission by survivorship is a standard form document. It was a joint applicationsigned by both Mrs Young and Shane and was dated 29 November 1999. They eachsay they have no memory of signing the document. I accept their evidence on thatissue.[56] Ronald's death certificate is attached to the document. It then records, as partof the standard form, that the deceased and "we" (Mrs Young and Shane) wereregistered as the proprietors as joint tenants and not tenants in common of the property.[57] Mr Rowe places great weight on cls 4 and 5 in the standard form which thenfollow. I also add cl 6 for completeness. Those clauses read:4. The said deceased and ourselves were so registered as proprietors ofthe said estate(s) or interest(s) in our own right and except as above orhereafter set forth free from all trusts or equities whatsoever.5. Except as above or hereafter set forth no person holds or is entitled toany share or interest at law or in equity affecting the said estate(s) andinterest(s) of which the said deceased and ourselves were so registeredas proprietors.6. That we verily believe we are entitled by virtue by survivorship of thesaid deceased to be registered as proprietor(s) of the said estate(s) andinterest(s).[58] In cross-examination Mr Rowe put to Mrs Young that the document meant thatShane was acquiring or getting the total ownership of a half share of the property. Sheresponded, "Well, when I signed that wasn't in my mind".[59] Notwithstanding that evidence, Mr Rowe submits that those clauses recognisethat Shane was not only the holder of a legal interest but had a beneficial interest inhis half share as well. He submits the clauses are clearly to be read as stating thatShane did not hold his legal share on a resulting trust.[60] I do not read the clauses in that way. They are to be read in the light of ss 122(2)and 123(2) of the Land Transfer Act 1952. The former provided:Every such application shall accurately define the estate or interest claimed bythe applicant, and shall state, so far as is within the knowledge of the applicant,the nature of every estate or interest held by any other person at law or inequity affecting the same, and that he verily believes himself to be entitled tothe estate or interest in respect of which he applies to be registered asproprietor [61] Section s 123(2) provided:The person so registered as proprietor shall hold the estate or interesttransmitted subject to all equities affecting the same, but for the purpose ofdealing therewith shall be deemed to be the absolute proprietor thereof.[62] Both Mrs Young and Shane correctly stated their legal interest. As this was ajoint declaration, cl 5 refers to the interest of any person other than Mrs Young andShane. Section 123(2) makes it clear that Shane's interest continues to be held subjectto "all equities affecting the same". In other words it preserves the resulting trust.[63] The document does not indicate an intention on the part of Shane andMrs Young that Shane would have a beneficial interest either at the time of theacquisition of the property or when the document was signed. As to advancement, theintention of the parties, as I have found, at the time of acquisition provides a counterto any presumption of advancement. The transmission document does not alter thatposition.[64] For completeness, I add that at the time the transmission document was signedon 29 November 1999, Mrs Young had still not paid off the mortgage. There was noevidence that the ASB had indicated a willingness to have Shane's name removed fromthe title. In that case, the requirement that a person who was working 40 hours a weekbe liable under the mortgage presumably still applied.[65] The next matter raised by Mr Rowe is what Shane allegedly said about hisownership of the property to Ms Kim.[66] In her affidavit sworn 15 February 2018, Ms Kim says that prior to coming toNew Zealand, Shane told her he was a half owner of the property and that his motherowned the other half. Shane made it clear to her they would live in the property withhis mother. That statement was put to Shane and he said he did not recall saying thathe was the owner of the property. He said he would have referred to it as "Mum andDad's" or, after his father passed away, "Mum's".[67] Under cross-examination Ms Kim's evidence on this issue was much less clearcut than the way it is expressed in her affidavit and was somewhat contradictory. Shesaid she thought there was a conversation that occurred prior to the conversation thattook place in Korea. She said: "I didn't really search or ask who's owns this place.Just naturally in my mind I kind of knew he owned that so I just recall that ourconversation went that way". She then said she knew Shane's personality, "Hewouldn't really tell me like this stuff like, oh this is my house, he wouldn't do thatyeah". She said there must be some reason that she found out.[68] But then, contradicting herself, Ms Kim said that in the early stages of theirrelationship, and given he was an adult living with his mother, she questioned him onthe ownership of the house by asking "Do you live with your mother? So is this yourhouse or you mum's house?". Her evidence was that he responded his name "is onthe house". She said at that point she did not ask anything further because ifsomebody's name is on the house then that means he owns it.[69] In the face of Ms Kim's contradictory evidence, namely that is not somethingShane would say and then that he did say his name "is on the house", and given Shanehad no recollection of a such a statement, I cannot make a finding that Shane toldMs Kim he owned half the house and that his mother owned the other half. Even if Iwere to accept that those comments had been made by Shane, they would have beenof limited assistance. The Court's task is to determine the equitable interests as at thedate of acquisition of the property in 1993.[70] Next Mr Rowe relies on improvements made to the property after Shane andMs Kim returned from Korea at the beginning of 2007. Shane says they decided tolive with his mother in her home on their return so they could save money by notpaying rent. This would allow the two of them to have money to travel back to SouthKorea each year to visit Ms Kim's family. Shane says that when they started living atthe property Ms Kim did not like its condition and wanted to make some changes anddo some updating so that she would feel comfortable living in the property. He saidhis mother wanted them to feel welcome and agreed to those changes.[71] Ms Kim and Shane initially lived in a tent on the property while they carriedout those renovations. Mrs Young agreed under cross-examination that the workcarried out by Shane and Ms Kim included removing unwanted items, cleaning outrubbish, stripping wallpaper off walls, painting the doors and the windows, replacingthe vinyl floor, painting the exterior of the house and roof, replacing the deck andfence, insulating the floor and walls, renovating the bathroom, kitchen and lounge.Shane and Ms Kim replaced some furniture items too.[72] It was also not in dispute that those improvements were funded with part of the$13,000 Ms Kim's parents had given them towards their new life in New Zealand.The balance Ms Kim and Shane used for living expenses for three months untilMs Kim started work in paid employment in April. It was also not in dispute thatShane and Ms Kim took out a joint loan of $10,000 to cover costs.[73] Ms Kim says she considered their work enhanced the equity she and Shane hadin the house. Shane's evidence, however, was that this work was in lieu of any rentalpayments.[74] There was no real contribution by way of other payments that might be madeby an owner. Ms Kim and Shane made only limited contributions to the phone/internetand power. Mrs Young said this lasted for about one year and then they stopped. Shesaid then she paid the bills herself. She also continued to pay for the gas and all otherexpenses on the home including utilities, rates and insurances. Mrs Young's evidenceas to the limited payment towards the phone/internet and power is supported byreference to Ms Kim's bank statements which show the automatic payment forMercury Energy and for Telstra Clear being loaded in June 2009. The bank statementsthen show that there was in fact only one automatic payment to Mercury Energy whichwas in June, and two to Telstra Clear, one in June and one the following month in July2009.[75] Even if I were to accept Ms Kim's statement that she saw this renovation workas adding to the value of the property, it does not necessarily follow that Shaneconsidered he had a present interest in the property and that he had communicated thatto her. It might equally reflect his expectation that he would inherit the property onhis mother's death. In responding to questions under cross-examination regarding theassumption of mortgage liability at the time of purchase, it was put to him that he knewhe would get the property in the long run. His response was that he did not need tosign anything to do that. Being the only son, he said he would likely inherit theproperty regardless of whether any documents were signed.[76] I therefore do not consider the evidence of renovations to the property pointagainst the parties' intention at the time the property was acquired that Shane wouldnot have a beneficial interest.[77] Finally Mr Rowe refers to Shane subletting a bedroom in the house.Mrs Young agreed he did and that Shane retained the money from the two studentsconcerned. Shane likewise accepted he sublet the room. He said it was after hisseparation from Ms Kim. He said he did so because the room was empty and it putsome money towards the house. While this is arguably consistent with a person havingan ownership interest in the property, I do not consider that, on its own, it is ofsufficient weight to undermine all of the evidence pointing the other way.[78] For all the above reasons, I conclude that Shane's legal interest in the propertyis held subject to a resulting trust in favour of Mrs Young.[79] There is no opposition by Shane to his mother's application under the PLA thatthe legal title be transferred into his mother's sole name. Because of my decision onthe resulting trust, Ms Kim does not have an interest in this issue. I will thereforemake an order by consent.[80] Mr Rowe accepted that if I were to find, as I have done, that Shane's legalinterest is held subject to a resulting trust for his mother, then Shane's interest is notrelationship property. There is then no basis for Ms Kim's Notice of Claim to remainregistered against the title to the property. I will order that the Notice of Claim beremoved.Relationship property proceeding[81] In the event I am wrong in my decision on Mrs Young's property proceeding,I will briefly consider the relationship property proceeding.[82] If it were decided that Shane holds both the legal and beneficial interest in halfthe property there is no issue between Shane and Ms Kim that the property isrelationship property.19 As was said by Duffy J in Hau v Hau:20[11] Section 25(3) permits the Court to make orders or declarationsrelating to the status, ownership, vesting or possession of any specific propertyas the Court considers just. As a preliminary step to making orders ordeclarations under ss 25(1) and (3), the Court must first classify the subjectproperty as relationship property in accordance with the definitions given in s8 of the PRA. Section 33 provides the Court with ancillary powers to givebetter effect to orders made under s 25. Those powers include the power in s33(3)(e) to order the partition or vesting of any property.[12] Accordingly, the PRA provides a pathway in the case of inter vivosseparations for spouse A to seek orders recognising that property which spouseB co-owns with a third party is nonetheless spouse B's relationship propertyin which spouse A has an interest.[83] The parties are also agreed that the value to be adopted for the property is$700,000 in accordance with a valuation dated 20 September 2017. Under s 2G(1) ofthe PRA, the date on which the value of property is to be determined is the date of thehearing by the Court of first instance (in this case the High Court). However, unders 2G(2) the Court has a discretion to decide that the value of the property is to bedetermined as at another date. Having regard to the agreement of the parties I wouldhave exercised my discretion to adopt the figure of $700,000 in accordance with thevaluation from a registered valuer. Shane's interest is therefore $350,000. Half thatinterest is $175,000.19 Section 8(1)(a).20 Hau v Hau [2018] NZHC 881, [2018] NZFLR 464 at [11]-[12].[84] Mr Snedden submits that this is a case where the Court might consider unequalsharing under s 13 of the PRA. He refers to the following factors: Shane's contributionof a half share and substantial equity enabled Shane and Ms Kim to jointly borrow$10,000; it comprises nearly the entire pool of relationship property; the income ofboth parties enabled them to meet loan repayments; the labour and efforts of bothparties contributed to the improvements to the property; both parties were able to saveand travel due to rent free accommodation in the property; and both parties are likelyto have made non-financial contributions of equal value.[85] Mr Snedden refers to two examples where the Court ordered unequal sharing.First, in P v P,21 the Family Court Judge found the division should be 70:30 in thehusband's favour. The Judge applied s 13 to a relationship that extended over 10 yearswith one child (twice as long as the relationship in this case) and the Judge notedneither the family home nor the investment property was the product of the parties'mutual effort within the marriage.[86] The second case is Yu v Zhang,22 where the Family Court Judge applied s 13on a 65:35 basis given the significant disparity in contributions. The case involved afive-year marriage with one child where advances of $874,000 were made byMr Zhang's parents. The Judge referred to s 18(1)(d), noting the acquisition orcreation of relationship property was exclusively the result of the contribution madeby the respondent from his family.[87] Whether extraordinary circumstances exist for the purposes of unequal sharingunder s 13 of the PRA is a factual question and whether they are repugnant to justiceis a value judgment.23 Ultimately, the Court must ask itself: is this case so out of theordinary that an equal division is something the Court simply cannot countenance?24[88] The fact that money has been acquired by inheritance or gift and devoted to thefamily home is not of itself inherently extraordinary.25 In de Malmanche v de21 P v P (2002) 22 FRNZ 380 (FC).22 Yu v Zhang [2018] NZFC 6121.23 Kidd v Russell [2018] NZHC 3032, [2018] NZFLR 841 at [27].24 Castle v Castle [1977] 2 NZLR 97 (HC) at 102; Martin v Martin [1979] 1 NZLR 97 (CA) at 102.25 Family Law Service (NZ) (online ed, LexisNexis) at [7.366.07].Malmanche,26 Priestley J observed there is nothing extraordinary in itself aboutbringing a family home into a relationship. Such circumstances exist in many NewZealand relationships.27[89] In this case the marriage was for five years. The relationship was somewhatlonger but because of the parties' religious beliefs they did not live together beforetheir marriage. On their return from their wedding in Korea, Shane and Ms Kim beganliving in the property and carried out improvements. There was nothing unusual inthe marriage. Both spouses worked, both made contributions to the expenses and bothmade other contributions to the household. Ms Kim used part of the $13,000 providedby her parents for improvements to the property.28[90] I do not consider the very high threshold has been met justifying unequalsharing of the family home. There are insufficient grounds to find extraordinarycircumstances that make it repugnant to justice for the family home to be dividedequally.[91] However, had I decided the case on this basis, I would have carefullyconsidered the ancillary powers of the Court under s 33. Mrs Young is elderly and theevidence suggests she would struggle to cope with the financial consequences of thesale of the property. There may have been a case for postponement of vesting unders 33(3)(d) or an order for the payment of a sum of money ($175,000) by Shane toMs Kim. However, I do not take those matters any further given the decision I havemade in the property proceeding.Result and orders[92] Shane's legal interest in the property at 85 Mead Street, Avondale, Auckland isheld subject to a resulting trust in favour of Mrs Young. In consequence, I make thefollowing orders:26 de Malmanche v de Malmanche [2002] 2 NZLR 838 (HC).27 At [133].28 There was a lack of clarity about the precise sum used as the evidence given was that the sum of$13,000 was used both for improvements and for living expenses for a period of three months.(a) Under s 339 of the Property Law Act 2007 (by consent), the legal titleto 85 Mead Street, Avondale, Auckland (being Lot 17 DP 50560, recordof title identifier NA1A/900) is transferred into the sole name ofElla Victoria Young; and(b) Under s 142 of the Land Transfer Act 2017, the Notice of Claimregistered against the title to 85 Mead Street, Avondale, Auckland(document 10856905.1) by Ms Kim is to be immediately removed.[93] As a consequence, Ms Kim's application under the PRA brought in the FamilyCourt and transferred to this court is dismissed save for the following:(a) Order by consent under s 33(3)(c) vesting in Shane and Ms Kim thoseitems in the attached schedule recorded in the columns under theirnames as separate property.Costs[94] I did not hear from the parties on costs. Costs are therefore reserved. If theparties are able to agree costs a joint memorandum should be filed within 20 workingdays of the date of this judgment. If costs cannot be agreed then Mrs Young is to fileand serve her memorandum within five working days of the date for the jointmemorandum. Shane and Ms Kim may each respond within a further five workingdays by filing and serving a memorandum.[95] Memoranda should not exceed four pages, excluding any attachments. I willdetermine costs on the papers.___________________________________Gordon JValue Jina ShaneAssetChattels already dividedASB 12-3045-0610113-00 463.72 463.72ASB 12-3045-0610113-50ASB 12-3077-0111781-00ASB 12-3077-0111781-50KB 38-9003-0060966-01 1.53 1.53KB 38-9003-0060966-05 0.96 0.96Subtotal 466.21 463.72 2.49LiabilitiesHolding Trust Co LtdSubtotalNet relationship property 466.21 463.72 2.49Half share 233.11AdjustmentsEqualise half share -230.62 -230.62 230.62Sale of Toyota Tino 5,000.00 -2,500.00 2,500.00