While parents had gone a long way in supporting a son with personal and mental health issues, the High Court ruled his mother did not have to sell him a house debt free when there was never any agreement for sale.
The family lived in Christchurch. The parents owned a number of investment properties. The mother herself owned a property on Aorangi Road in Bryndwr. Their son owned a Merivale property, financed in part with a $100,000 loan from his parents. The High Court was told Merivale was uninhabitable after the Christchurch series of earthquakes. Family agreed their son could live at Aorangi Road. Family plans evolved through uncertainties following the earthquake but solidified into what was loosely called a ‘land swap.’ Merivale would be redeveloped with family money, the son getting a credit for the land value and taking ownership of one of two units to be built on the site. When it became clear he would not have sufficient financial resources to buy in, it was proposed the son buy Aorangi Road instead. This stalled when the son demanded he get Aorangi Road debt free and without having to pay the $100,000 borrowed when buying Merivale. He was trespassed from Aorangi Road following incidents of violent behaviour.
Son took to court, claiming ownership of Aorangi Road. There was an oral agreement to sell, he said. Under the Property Law Act, contracts for sale of land are not enforceable unless in writing. There is an exception; the doctrine of part performance. Oral agreements for sale of land are enforceable where the critical terms have been agreed and one party has carried out their part of the bargain.
Mother and son had never agreed terms for Aorangi Road, Judge Paulsen ruled. There had been discussions for a sale at $500,000 but repayment of the $100,000 borrowed for his previous Merivale purchase was the sticking point. When the son refused to sign a contract for the Aorangi Road purchase which acknowledged $100,000 was still owing from Merivale, his mother abandoned proposals for the sale, Judge Paulsen said. There was never any contract for sale of Aorangi Road to the son, oral or written.
Auton v. Auton – High Court (7.05.20)
20.074