Living rent-free on land owned by a family trust and growing produce for her own use and roadside sale did not give Sophie Lai any right to share in a $20 million Coatesville farm sale.
Taiwanese immigrants Mr and Mrs Huang purchased the rural Coatesville property north of Auckland in 1996 through their family trust. They also owned property in the Auckland suburb of Epsom where second son Chun-Ta lived rent-free with future spouse Sophie Lai. Fast forward twenty years: Sophie and Chun-Ta have two children, are now divorced and Sophie claims a share of the family trust’s $20 million Coatesville sale. As a consequence of the divorce, she is no longer a beneficiary of the Huang family trust, but her children remain beneficiaries.
Evidence was given of Chun-Ta and Sophie shifting to Coatesville around 2003. The Huang family trust leased the land initially to kiwi-fruit growers, later to strawberry farmers. Chun-Ta and Sophie occupied a house on the property, rent-free. They used land around the house to grow vegetables for themselves and for sale, along with cultivation of calla lilies for commercial sale. They retained the proceeds; revenue did not show up in family trust accounts. Sophie claimed her work around the property created a constructive trust; she was entitled to share in profits from the sale. Justice Edwards ruled the work done was well compensated by her living rent-free on the land. There was evidence Sophie had primary employment interests outside the home; working variously in real estate, in a health and beauty salon and a sushi shop. Sophie also argued it was unconscionable for her to be cut out; her then father-in-law had promised she would benefit if she worked hard and looked after the land. Justice Edwards said there was no evidence of promises she and Chun-Ta would be left the land; rather Mr Huang emphasised to family the land was valuable and was to be retained by the trust for the benefit of all family members. Mr Huang died in 2012.
Lai v. Huang – High Court (30.07.19)
19.141