No sufficient connection between financial contributions and the property's acquisition: court
The High Court dismissed an application to sustain a caveat over a Taumarunui property, ruling the applicant failed to show a reasonably arguable beneficial interest.
The property, part of a broader transaction involving a motel business and three properties, is owned by a company whose director disputed the applicant’s claims. The director argued that the applicant made no direct financial contribution to the purchase or maintenance of the property and could not have reasonably expected an ownership interest.
The applicant contributed funds toward the purchase of the motel and two of the properties, asserting that these payments entitled them to an equitable interest in the third property, which was acquired separately by the company.
The applicant claimed that a disputed memorandum of understanding supported their expectation of an interest in the property. The memorandum allegedly outlined a future transfer of the property to the motel business under certain conditions. The company denied the memorandum’s validity and maintained that the property was purchased as a personal investment using its own funds.
The High Court determined that the applicant did not establish a sufficient connection between their financial contributions and the acquisition of the disputed property. It found that the applicant’s payments related to other assets in the transaction and that the property was acquired separately by the company using its own resources.
The court also rejected the argument that the memorandum of understanding created a reasonable expectation of an interest in the property. It noted that the memorandum described a potential future transaction contingent on specific conditions and did not confer any current or guaranteed ownership interest.
The court dismissed the application, ruling that the applicant did not have a reasonably arguable case for a beneficial interest in the property. The applicant was ordered to cover the company’s legal costs and reasonable disbursements.
