A property sharing agreement between relatives morphed into a legal argument whether it was a landlord/tenant relationship or shared ownership: Carolyn Mallon and her husband claim part-ownership of her son’s Bay of Plenty property; son Lewis Griffiths says she and husband Anthony were only tenants who had sought building extensions to allow them a more comfortable retirement. It was not the first time the Mallons claimed ownership rights to a family member’s home.
In 2017, Mr Griffiths finalised purchase of a home on Tawhero Street at Mamaku, near Rotorua. He borrowed $20,000 from his mother and stepfather to complete the purchase. Two years later, the Mallons shifted in with what later became a disputed living arrangement.
The High Court was told all three jointly agreed on plans for an extension to Tawhero Street. Further bank funding was arranged with an extension to Mr Griffiths’ existing mortgage. As a condition of this further loan, the Mallons funded repayment of a $24,500 personal debt of Mr Griffiths and signed a tenancy agreement for their continued occupation of Tawhero Street. The Mallons paid half the cost of architect’s plans and resource consents before building work commenced.
A February 2022 property share agreement between all three required the Mallons pay $285 per week; in return Tawhero Street could not be sold without their consent, they could not be evicted without their consent and should Ms Mallon die before her husband then he similarly could not be evicted without his consent.
Within months, possibility of eviction arose. Mr Griffiths had separated from his partner. Sale of Tawhero Street loomed as part of a relationship property settlement. The court was told there was an altercation in late 2022 when Mr Griffiths attempted to change the locks at Tawhero Street and to remove the Mallons’ vehicle and their belongings.
The Mallons registered a caveat against title to Tawhero Street, claiming shared ownership by reason of their contributions to the purchase and subsequent extensions. They claim $131,400 cash plus a one half share of any capital gain on sale. Mr Griffiths says their contributions were a combination of unsecured loans, to be repaid, and rent paid as tenants.
Associate judge Taylor ruled the caveat remain. It is arguable a constructive trust existed, he said. Proof of any ownership interest requires a full court hearing.
Mr Griffiths told the court a common pattern has become apparent; in 2017 the Mallons registered a caveat over his sister’s property in respect of a converted garage on that property where they had then been living. The Mallons say they paid to convert this garage into a two bedroomed cottage for their retirement.
Mallon v. Griffiths – High Court (12.06.23)
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