Avison v McFarlane - [2014] NZHC 1889

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2014-485-1260 [2014] NZHC 1889

BETWEEN
NGAIRE JANE ELIZABETH AVISON

Plaintiff

AND

WAYNE JAMES MCFARLANE and NGAIRE JANE ELIZABETH AVISON and DAVID WILLIAM BUTLER

First Defendants

WAYNE JAMES MCFARLANE and NGAIRE JANE ELIZABETH AVISON and DAVID WILLIAM BUTLER Second Defendants

WAYNE JAMES MCFARLANE Third Defendant

DAVID WILLIAM BUTLER Fourth Defendant

Hearing: 22 May 2014

Appearances:

J C Gwilliam for Plaintiff
R J B Fowler QC for the First, Second and Third Defendant

Judgment:

12 August 2014

JUDGMENT OF ASSOCIATE JUDGE SMITH

Introduction

[1] The plaintiff (Ms Avison) and the third defendant (Mr McFarlane) began living together in a de facto relationship in 1996. They married in November 2006, but separated a little under five years later, in October 2011. There were no children
of the relationship.

NGAIRE JANE ELIZABETH AVISON v WAYNE JAMES MCFARLANE and NGAIRE JANE ELIZABETH AVISON and DAVID WILLIAM BUTLER [2014] NZHC 1889 [12 August 2014]

[2] Relationship property proceedings between Ms Avison and Mr McFarlane are pending in the Family Court.

[3] While they were living together, Ms Avison and Mr McFarlane established two family trusts, the Avian Trust and the Oasis Trust. Both were trustees of the two trusts. The other trustee (of both trusts) is Mr David Butler, a Lower Hutt solicitor. Initially, claims were brought against Mr Butler by Ms Avison, but those claims have now been discontinued.

[4] In the present proceeding, Ms Avison seeks certain orders in respect of the assets of the Avian Trust and the Oasis Trust. The orders sought include declarations identifying the assets of each of the two trusts, and orders for specific performance by the trustees of their obligations under a clause, which appears in identical terms in each of the two trust deeds, which was triggered by notice given by Ms Avison following her separation from Mr McFarlane. The clause required the trustees to re-settle one half of the trust assets on a new trust nominated by the party giving the notice – in this case, Ms Avison.

[5] Ms Avison applies for summary judgment on her declaration and specific performance claims.

[6] There is no opposition to the relief sought by Ms Avison in respect of the Oasis Trust, except in respect of Ms Avison’s claim for costs. Mr Fowler confirmed that orders can be made by consent in respect of the claims for declaratory relief and specific performance in respect of that trust.

Background

[7] When Ms Avison and Mr McFarlane began living together, they lived in a property owned by Mr McFarlane at 33 Avian Road, Upper Hutt (the home). Mr McFarlane also owned two adjoining sections, at 29 and 31 Avian Road (respectively, “No. 29” and “No. 31”). No. 29 and No. 31 were primarily used for grazing stock.

[8] The home had been owned by Mr McFarlane and a former partner. The interest of that partner was bought out by Mr McFarlane and Ms Avison, Ms Avison purchasing a one quarter share…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Avison v McFarlane

Details

AGLC: Avison v McFarlane [2014] NZHC 1889
Case: [2014] NZHC 1889
Decision Date: 12 August 2014

CaseChat Overview and Summary

Avison v McFarlane is a case involving property disputes between a former de facto couple. The plaintiff, Ms Avison, and the third defendant, Mr McFarlane, established two family trusts, the Avian Trust and the Oasis Trust, during their relationship. Ms Avison seeks certain orders in respect of the assets of these trusts, including declarations identifying the assets and orders for specific performance by the trustees of their obligations under a clause triggered by her separation from Mr McFarlane. This clause required the trustees to re-settle half of the trust assets on a new trust nominated by the party giving notice, in this case, Ms Avison.

The court had to decide whether Ms Avison's application for summary judgment on her declaration and specific performance claims should be granted. The court considered two defences raised by Mr McFarlane. The first defence was that the transfer of No. 29 and No. 31 to the Avian Trust was impressed with a trust in favour of Mr McFarlane's daughters, making them always held in trust for the daughters. The second defence was that the transfer of No. 29 and No. 31 and the subsequent gifting programme were invalid for non-compliance with s 21F of the Property (Relationships) Act 1976.

The court found that the first defence was not suitable for resolution on the summary judgment application, as there was insufficient evidence to establish a constructive trust in favour of Mr McFarlane's daughters. However, the court acknowledged that Mr McFarlane's daughters should be joined as defendants in the proceeding to allow them to be heard on their claims.

As for the second defence, the court found it reasonably arguable that there was an agreement between Ms Avison and Mr McFarlane made for the purpose of contracting out of the provisions of the Act. The court could not rule out this defence as inarguable and decided that the summary judgment application would be dismissed insofar as it sought orders in respect of No. 29 and No. 31.

In conclusion, the court made the following orders: (1) By consent, the assets of the Oasis Trust available for resettlement were declared to consist of funds (approximately $100,000) held in the name of the Oasis Trust in an account with the ANZ Bank. (2) An order for specific performance was made against the second defendants as trustees of the Oasis Trust, requiring them to resettle one half of the assets of the Oasis Trust (or their monetary equivalent) on the Peony Rose Trust. (3) The summary judgment application was refused insofar as it sought a declaration that the assets of the Avian Trust available for resettlement included No. 29 and No. 31. (4) Subject to order number 5 below, the application for specific performance against the first defendants as trustees of the Avian Trust was refused. (5) Counsel were given the opportunity to file memoranda on the question of whether it is appropriate to make a declaration that the home is an asset of the Avian Trust available for resettlement and whether any orders by way of specific performance are appropriate in respect of the home. (6) The costs of the application were reserved.

Orders