A brother’s claim to part ownership of his sister’s land near Coatesville in Auckland was dismissed by the High Court, but Stephen Hitchcock was entitled to $575,000 for his financial assistance in paying off her mortgage and helping pay costs of subdividing her rural residential property.
The court was told of Susan Murphy’s on again-off again plans for subdivision, complicated by her objections to brother Stephen growing cannabis on site which led to a prison sentence on conviction for his first offence and home detention for a second later offence.
Ms Murphy came to own the four hectare Coatesville property in her own right after buying out her then husband’s share.
The High Court was told brother Stephen assisted financially in 2003, paying off the balance of her $147,000 mortgage at a time when she was diagnosed with a potentially dangerous cancer. He subsequently lived on site, staying for extended periods in a Portacom cabin at back of the property.
Plans for subdivision waxed and waned over many years, with various proposals discussed between the two.
Sister Susan always made it clear that her brother could take ownership of part of any subdivision with the money she owed him deducted from the market price.
Ultimately, what could not be agreed was the form any subdivision would take and how much Stephen was in fact owed. They wound up in court.
Whilst original discussions centred on Stephen taking title to part of a subdivided back half of the property, Susan eventually sold off the back half without further subdividing it; sold in May 2022 at $2.65 million.
Justice Johnstone ruled Stephen had a valid claim to part proceeds of this sale.
Correspondence between the two made it clear Stephen would be reimbursed following any subdivision. A constructive trust existed, with compensation from sale proceeds. This carried out the effect of their prior common understanding, with previously agreed terms no longer able to be implemented since the subdivided land had been sold.
The two siblings could not agree on how much Stephen was owed. There was limited written evidence. Other evidence was contradictory, or inconclusive.
Susan said much of what Stephen was claiming as compensation for work done around the property amounted to expenses incurred for his own benefit, growing cannabis.
Justice Johnstone ruled Susan was required to pay at least $500,000; the amount she stated in correspondence through 2016/17 as being the credit she would give her brother on his purchase of a then intended subdivided section.
Payment of a further $75,000 was ordered; money she borrowed from her brother in 2017.
Hitchcock v. Murphy – High Court (29.11.24)
25.041