Takiro v Tiimi [2004] KICA 5; Civil Appeal 06 of 2003 (23 August 2004)

IN THE KIRIBATI COURT OF APPEAL
CIVIL JURISDICTION
HELD AT BETIO
KIRIBATI

Civil Appeal No 6 of 2003

BETWEEN:

TEEBUTI TAKIRO
Appellant

AND:

TERETIA TIMI
Respondent

Before: Hardie Boys JA
Tompkins JA
Fisher JA

Counsel: Jennifer Troup for appellant
Banera Berina for respondent

Date of Hearing: 19 August 2004
Date of Judgment: 23 August 2004

JUDGMENT OF THE COURT

Introduction

[1] At the relevant time, the appellant and the respondent's son Makin were living together on land adjoining land on which the respondent was living. With the respondent's consent, the appellant built a small store on the respondent's land, which she intended to manage.

[2] In October 2002 the appellant and Makin separated. In November 2002 the respondent removed her chattels from the store and also removed the roof, timbers and some of the concrete walls of the store from the respondent's land.

[3] The respondent commenced proceedings against the appellant claiming the value of materials removed by the appellant and loss of rent. By a judgment delivered on 30 July 2003, the Chief Justice found that the respondent was entitled to damages from the appellant resulting from her removal of the materials. After a further hearing on damages, the Chief Justice assessed the damages at $5,000 and entered judgment against the appellant for this amount. The appellant has appealed against the finding on liability and damages.

Facts

[4] The land on which the respondent was living, Teaoraereke 793a, was owned by her. The Chief Justice found that the appellant and Makin asked the respondent if they could build a store on her land. The respondent agreed. The appellant, a widow with children, had the store built, using money from a trust fund for her children. She began conducting a business from the store in February 2002.

[5] Differences arose between the appellant and Makin. They separated several times, finally in October 2002. The appellant ceased to trade from the store. Some time later, the appellant approached the respondent saying that she wanted to start the business again. The respondent refused. She said in evidence that that was because there were some people wanting to rent the store.

[6] The appellant removed her belongings that were in the store. Later the same day she had the store itself all but completely pulled down, the roof, the timbers, most of the walls: only the floor was left untouched. She used the roofing iron and the timbers to add to her own house. Some of the concrete blocks she used as a stand for water containers.

The judgment in the High Court

[7] In his judgment the Chief Justice referred to the pleadings on the basis of which he considered that the store, being a fixture built on the respondents land, belonged to the respondent: the appellant was not entitled to pull it down nor take any of the materials.

[8] Despite the lack of an express pleading, he allowed counsel for the appellant to raise a defence of equitable estoppel. He found that the respondent gave permission to the appellant to build the store and to trade from it but he did not find that the store was for the benefit of the appellant's children. The respondent did not give permission for the store to be pulled down. He concluded:

"In the absence of some representation by the plaintiff estopping the defendant from asserting her ownership the defendant had no right or title to the store nor to the materials out of which it was built. The plaintiff made no such representation. The defendant has no defence to the plaintiffs claim."

[9] In his judgment on damages the Chief Justice considered the evidence relating to the cost to the appellant to erect the store in materials and labour, accepted that some allowance should be made for the value of the foundations and other bits and pieces that were left and made an allowance for depreciation. On this evidence he concluded that damages should be assessed at $5,000 and entered judgment for the respondent accordingly.

Equitable relief

[10] On the normal application of the law relating to land and fixtures, the Chief Justice was correct in his conclusion that the store was a fixture and accordingly it belonged to the respondent as the owner of the land. The real issue in the case was whether the appellant is entitled to equitable relief.

[11] The statement of defence did not expressly seek equitable relief. But paragraph 3 of the statement of defence pleaded that the building was built with the consent of the respondent and his son and that it was clear to both the respondent and his son that the building was built for the benefit of the appellant's children. This was clearly a pleading that intended to invoke some form of equitable relief. It was in reliance on this pleading that the Chief Justice allowed counsel for the appellant to raise the issue of estoppel.

[12] In this court, counsel for the appellant submitted that the appellant was entitled to relief on the basis of unjust enrichment, resulting trust, constructive trust or proprietary estoppel. She referred us to the judgment of McGechan J in Stratulatos v Stratulatos [1988] NZHC 467; [1988] 2 NZLR 424. At 436 McGechan J, after referring to several authorities, observed "that the tide is running strongly in favour of the simple and overt imposition of a constructive trust when such is necessary to do justice rather than constructing "phantoms of common intention" in order to resolve the property relationship." He followed the following passage in the judgment of Cooke P in Pas v Kamana [1986] NZCA 93; [1986] 1 NZLR 603, 605:

"Be that as it may, at present our inquiry must focus on whether there has been a sufficient direct or indirect contribution by one de facto partner to a specific property – usually the home – to carry an interest in it.

In conducting that inquiry I respectfully doubt whether there is any significant difference between the deemed, imputed or inferred common intention spoken of by Lord Reid and Lord Diplock (and now by the English Court of Appeal in Grant v Edwards) and the unjust enrichment concept used by the Supreme Court of Canada. Unconscionability, constructive or equitable fraud, Lord Denning's 'justice and good conscience' and 'in all fairness': at bottom in this context these are probably different formulae for the same idea. As indicated in Hayward v Giordani, I think that we are all driving in the same direction. One way of putting the test is to ask whether a reasonable person in the shoes of the claimant would have understood that his or her efforts would naturally result in an interest in the property. If, but only if, the answer is Yes, the Court should decide on an appropriate interest – not necessarily a half – by way of constructive trust, as indicated in Gissing v Gissing".

Conclusion

[13] In our view, this is the approach to be adopted in the present case to do justice between the parties. Standing in the shoes of the appellant, would a reasonable person have understood that what she was proposing to do in erecting the store on the respondent's land would result in her having an interest in the store? When regard is had to the evidence that the respondent expressly agreed to the appellant erecting the building, the fact that she was proposing to use money held in trust for her children and what was then the relationship between the respondent's son and the appellant, the answer can only be "yes". To put the question another way, at the time the proposal was being discussed, would the parties have understood that the appellant intended that the store she was about to build with her children's money was to become the sole property of the respondent. The answer is obvious. If that had been considered even a possibility, we have no doubt that the appellant would not have proceeded with the project.

[14] It is our conclusion that the result of what occurred was that a constructive trust arose as result of which the appellant retained an equitable interest in the property of a value at least equivalent to the value of the portions of the building that the appellant removed. It follows from this conclusion that the respondent suffered no loss as a consequence of the removal.

Result

[15] The appeal is allowed. The respondent's claim for damages against the appellant fails. The judgment entered against the appellant is set aside. The appellant is entitled to costs in the High Court and in this Court to be taxed if not agreed.

Hardie Boys JA
Tompkins JA
Fisher JA