One party claimed that her brother tricked their parents into transferring the property to him
The Court of Appeal has rejected a constructive trust claim in a property dispute between two siblings.
In Patel v Patel [2023] NZCA 630, Jayshree Patel appealed the dismissal of her claim against her brother, Hermant, and his wife, Rita, for 50% of the value of various properties held by them or their company, Krisaj Properties Limited. Jayshree asserted that these properties were held subject to constructive trust because they were acquired using their deceased parents’ wealth.
Jayshree claimed that transferring the family home to Hermant and Rita in 2004 was not lawful. She claimed that Hermant deceived their parents by transferring family assets to him for less than fair value, and he allegedly used their parents’ wealth to acquire properties valued at $10m. The judge rejected her claims, finding that their parents, Ratilal and Shanta, consented to the transfer and “they were not duped.”
Jayshree argued that the judge committed an error in finding that the transfer of the family home to Hermant and Rita in 2004 was lawful and that the financial contributions made by her parents to Hermant and Rita had been properly accounted for. Jayshree raised the matter to the Court of Appeal.
Jayshree argued that based on the available evidence, it can be inferred that her parents made very significant contributions to the family over their lifetimes not properly accounted for by Hemant and Rita. She referred in particular to unaccounted-for unemployment benefit payments, superannuation payments, and evidence of regular withdrawals out of Shanta’s accounts to a general account out of which the loan and interest payments owing by Krisaj were made.
The court rejected Jayshree’s argument, finding no direct evidence that Ratilal or Shanta received an unemployment benefit or made contributions directly to Krisaj.
Jayshree maintained her argument that her parents were tricked unlawfully into transferring their property to Hermant and Rita in 2004. However, the Court of Appeal found that Jayshree failed to prove any fraudulent act or similar wrongdoing by Hermant and Rita. The court found ample basis in the evidence to support the conclusion that Ratilal instigated the property transfer. The court also found evidence that Hermant and Rita were responsible for the mortgages over the various properties.
Ultimately, the court rejected Jayshree’s complaint about trickery. The court said the transfer was simply part of a mutually beneficial familial arrangement. The appeal court had not identified any material error in the judge’s reasoning. The court considered the judge’s observation that the overwhelming weight of the evidence supports a finding that this was a close and loving family and that the contribution to the financial and emotional well-being of Ratilal and Shanta by Hemant and Rita was significant.
The court acknowledged that the parties could have better documented the transfer of the contested property to Hermant and Rita. Nonetheless, the court was satisfied that Ratilal and Shanta approved it as part of a lifelong commitment between the family. Accordingly, the court dismissed Jayshree’s appeal.
