Working as a solicitor, Jennifer Andrews ensured her 2001 purchase of an Auckland residential property was structured having her two children hold title as trustees for herself and her spouse. Two decades later, she was in court challenging her estranged daughter-in-law’s claim to an interest in the Panmure property as relationship property.
Daughter-in-law Rebecca Crowe claimed the property had become her family home and was now relationship property.
The High Court was told the Mareth Street property was purchased in April 2001 from a deceased estate. Ms Andrews arranged for title to be taken in names of her son Mathew McGinty (then flatting elsewhere in Auckland) and daughter Rachel (then working overseas as a professional yachtswoman). Both children signed written acknowledgements that they held title in trust for their parents.
Mathew and Rebecca took up occupation of Mareth Street four years later, after their 2005 marriage. They paid rent to Mathew’s parents. Over time, more than $300,000 was spent upgrading what was a rundown two bedroom state house. This money came from Mathew’s mother, now widowed.
After Mathew and Rebecca separated in 2017, Rebecca identified that title to Mareth Street was held in the names of estranged husband Mathew and his sibling. Rebecca lodged a claim against the title, saying Mareth Street was relationship property.
She said any landlord/tenant relationship was a fiction: there was no tenancy agreement or bond; rent paid was below market rates, amounting to a ‘rent to buy’ deal; and the money spent on upgrading the property was not evidence of her parents-in-law beneficial ownership but was a gift to their son.
Justice O’Gorman ruled Residential Tenancy Act rules do not apply properties occupied by a landlord’s family. No tenancy agreement or bond was required.
The nominal rent paid did not evidence any ‘rent-to-buy’ arrangement. Rent-to-buy arrangements typically see an above market rent paid; payment for the right to occupy plus contributions towards the purchase price.
Mareth Street was not relationship property, Justice O’Gorman ruled. It was held in the names of Ms Andrew’s children on an express trust for their parents. Subsequent to the death of her spouse, Ms Andrew became the sole beneficial owner of Mareth Street.
This express trust came into existence prior to Mathew’s and Rebecca’s occupation of Mareth Street. Cash to complete purchase of Mareth Street came solely from Ms Andrews and her spouse. There was clear written acknowledgement by the two children that the property was held by them in trust for their parents. It was never Mathew’s relationship property.
Andrew v. McGinty – High Court (8.07.24)
24.172