Christine and Te Rahui Cowan’s attempts to stop their father selling the Wellington family home to a property developer have foundered while litigation piles up exposing both of them to claims for hundreds of thousands of dollars damages.
After their mother’s death in 2019, tensions in the Cowan household coalesced around their father’s sale of the Lyall Bay family home to property developer Kurt Gibbons. Having purchased five neighbouring sections, Mr Gibbons $1.1 million purchase of the Cowan family home enabled his property development to be extended from 21 townhouses to thirty. All thirty townhouses have been pre-sold, the Supreme Court was told.
Christine and Te Rahui claim their late mother intended the family home be retained as papakainga; a home base. Christine has lived at the property nearly all her life. The house was purchased by their parents in 1974 with loan assistance from the then Maori and Island Affairs Department. Their mother Marama was Maori; her widowed husband John is Pakeha.
Learning of their father’s sale, Christine and Te Rahui lodged a caveat over title to Lyall Bay. This had the effect of blocking the sale, pending a court case arguing claims of papakainga.
The Supreme Court was told this caveat lapsed inadvertently. It took a court case to get a replacement caveat registered. And with it came a court-ordered requirement that Christine and Te Rahui compensate their father for any financial damages suffered should their claim fail. Potential personal liability spiralled. John’s contract for sale has a penalty interest clause for late settlement with penalty interest in excess of $120,000 already due. Any delay in completing the sale also exposed John to damages for Mr Gibbon’s increased building and financing costs.
Regardless of the outcome of their papakainga claim, Christine and Te Rahui face liability for substantial damages; compensation to their father. They applied to the Supreme Court for a cap on liability, limited to the sum of $10,000 Christine lodged in a lawyer’s trust account. Rules around registering a second caveat require substantial protection for the property’s owner should a claim not succeed, the Supreme Court stated. Christine and Te Rahui remain fully liable for all losses their father faces whilst the caveat remained, the court ruled.
Evidence was given that the Lyall Bay caveat was removed after a court hearing in 2021, enabling the property to be transferred to Mr Gibbon’s property development company. The court ordered net proceeds of sale be held in a solicitor’s trust account until the papakainga claim is resolved.
Cowan v. Cowan – Supreme Court (12.04.22)
22.073