The High
Court dismissed a son’s claim against his late mother’s estate to ownership of
property at Little River on Banks Peninsular because his claim that the property
is held in trust was tainted by his own fraud.
Lewis Graham claimed three undeveloped sections
at Council Hill Road in Little River were his, though registered in the name of
his mother at the time of her death in 1997.
Eighteen years later, her estate was still not finalised. Daughter Elizabeth had the Public Trustee
appointed as replacement executor of their mother’s estate because the two siblings
as joint executors could not agree that Lewis was the beneficial owner.
The High Court was told Lewis had purchased the
Little River property in August 1973 for about $700. As undeveloped land it was over the years
leased out for grazing. He and his wife
planned to apply for a Housing Corporation loan, but would not be eligible if
Lewis already owned property. Evidence
was given that the property was transferred into his mother’s name. This done, Lewis qualified for a loan and was
offered a Housing Corporation section at Parklands in Christchurch. After paying a deposit, he took a refund and
instead purchased an existing home in another Christchurch suburb, Richmond.
When their mother died twenty years later,
Lewis claimed the Little River property was his alone and did not form part of
their mother’s estate. It was held in
trust on his behalf, he said. The Public
Trust required Lewis to prove his claim.
Lewis said he transferred the property to his
mother as a subterfuge to qualify for a Housing Corporation loan. He claimed to still be the beneficial owner
and produced receipts for some rate payments and some water charges levied on
the property. Lewis said he chose to
have the properties remain registered in his mother’s name to keep them hidden
should his marriage fail and there be a relationship property claim.
This conflicted with legal documents evidencing
the transfer which stated his mother paid a purchase price of $2000. Lewis was paid $2000 by his mother around
this time, but he said it was part payment for a car he transferred to her. There was also evidence of ongoing
discussions with the local council over implementation of a sewage system for
Little River. Council correspondence and
telephone records showed Lewis repeatedly denying responsibility for the property
in question, referring Council staff to his mother.
Justice Dunningham expressed doubts about
aspects of Lewis’ evidence, saying his explanations appeared contrived. Her Honour said the evidence was that Lewis’
mother was a careful person who kept good records. If she still owed Lewis $2000 it would be
expected to feature in her will. If she
was holding the land in trust for him, that too would have been recognised in
her will.
Justice Dunningham ruled that there was not
sufficient evidence to support Lewis’ claim the land was held on trust for
him. Even if it were held on trust, she
said, it would be a trust established for the fraudulent purpose of getting a
low-asset Housing Corporation loan and Lewis could not rely on his own fraud to
rebut documentary evidence that the Little River property was sold to his
mother.
The Little River property forms part of the
late Mrs Graham’s general estate. Both
her son and daughter share the estate equally.
Graham
v. Graham – High Court (7.07.15)
15.075