Carr v Whitfield
[2025] NZHC 743
•4 April 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2024-404-2408 [2025] NZHC 743
BETWEEN MELISSA RACHEL CARR
Plaintiff
AND
LEIGHTON GLEN WHITFIELD and WHITFIELD TRUSTEE LIMITED
(as trustee of the L N TRUST) Defendants
Hearing: 17 March 2025 Appearances:
Kate Eastwood for the Plaintiff
M Brugeyroux for the Defendants
Judgment:
4 April 2025
JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR
[Application to set aside defendant’s appearance under protest to jurisdiction]
This judgment was delivered by me on 4 April 2025 at 3:00pm
pursuant to Rule 11.5 of the High Court Rules
…………………………. Registrar/Deputy Registrar
Solicitors:
K3 Legal (Edwin Morrison/Kate Eastwood), Auckland, for the Plaintiff
McVeagh Fleming (Marisa Brugeyroux/Craig Andrews), Auckland, for the Defendants
CARR v WHITFIELD [2025] NZHC 743 [4 April 2025]
Introduction
[1] Ms Melissa Carr (Ms Carr) applies to set aside a notice filed by the defendants, Mr Leighton Whitfield (Mr Whitfield) and Whitfield Trustee Ltd (WTL), as trustees of the L N Trust (the Trust) protesting the jurisdiction of the High Court to hear and determine her application for summary judgment against the defendants.
Background
[2] Ms Carr and Mr Whitfield met around March 2022. Shortly after, they began a de facto relationship which continued until their separation in late May 2024.
[3] When Ms Carr and Mr Whitfield met, they each owned houses. Ms Carr owned a property at 7 Karaka Street, Helensville (Karaka Street) and Mr Whitfield lived in a house at 47 Shuttleworth Place, Manly, Whangaparaoa (the Property), owned by the Trust.
[4] Ms Carr claims that between November 2022 and May 2024, she loaned a total sum of $539,642.60 to the Trust (the loan funds), comprising the following alleged loans:
(a)An amount of $308,030 used to repay a loan held in the name of the Trust advanced on 20 November 2023;
(b)contributing to alterations, additions and repairs to the Property, totalling $205,287.60; and
(c)making mortgage repayments towards the mortgage held by the Trust, totalling $26,325.
[5] Ms Carr says that, despite demanding repayment of the loan funds, the defendants have failed to repay it. Accordingly, on 11 September 2024, Ms Carr filed a statement of claim and an interlocutory application seeking summary judgment on her claim against the defendants.
[6] On 6 November 2024, the defendants filed an appearance under protest to jurisdiction in relation to Ms Carr’s claim.
Ms Carr’s application to set aside the defendants’ appearance
[7]Ms Carr now applies to the Court for orders that:
(a)the defendants’ appearance under protest to jurisdiction dated 6 November 2024 be set aside; and
(b)the defendants pay her costs and disbursements of and incidental to her application.
[8]The grounds on which Ms Carr seeks the above orders are, in summary:
(a)the loan funds that Ms Carr advanced to the defendants were applied towards the Property, which is registered to the defendants;
(b)the defendants have acknowledged in correspondence that the loan funds were advanced by Ms Carr to the Trust and are due and owing to Ms Carr;
(c)the High Court has general and inherent jurisdiction in respect of the statement of claim and the interlocutory application for summary judgment filed by Ms Carr;
(d)no application has been made to the Family Court by either Ms Carr or Mr Whitfield under the Property (Relationships) Act 1976 (PRA);
(e)the Family Court would not have jurisdiction to make any orders under s 14A of the PRA as Ms Carr’s claim concerns a loan made to the Trust, not a loan to Mr Whitfield personally.
(f)Ms Carr never agreed or intended that any of the loan funds would be a contribution to her or Mr Whitfield’s relationship property ‘pool’; and
(g)she never discussed a ‘division’ of relationship property with Mr Whitfield at any point since their separation and, as far as she is aware, they both consider the property that they each owned prior to their relationship to be separate property.
Defendants’ position
The defendants oppose the orders on the following grounds:
(a)Ms Carr and Mr Whitfield were in a de facto relationship of short duration;
(b)the funds that Ms Carr refers to as “loan funds” are:
(i)substantial contributions by Ms Carr to the de facto relationship;
(ii)contributions made during the de facto relationship to the Property, Ms Carr and Mr Whitfield’s expenses, Mr Whitfield personally, and WTL; and
(iii)were paid in anticipation of Ms Carr taking an interest in the Property owned by the defendants;
(c)Ms Carr’s claim does not take into account, amongst other things:
(i)any other contributions made by Ms Carr and Mr Whitfield to their de facto relationship since separation; and/or
(ii)any compensation payable by Ms Carr to Mr Whitfield relating to his sustenance of Ms Carr’s separate property; and
(iii)the fact that Ms Carr and Mr Whitfield both owned a house when the de facto relationship began;
(d)Ms Carr’s proceeding is, in substance, an application for the division of the parties’ relationship property despite being couched as a claim for a loan;
(e)a failure to make orders dividing Ms Carr and Mr Whitfield’s property pursuant to the PRA — including the alleged loan funds — would result in serious injustice; and
(f)any application for the division of Ms Carr and Mr Whitfield’s property
— including the alleged loan funds — must be heard and determined by the Family Court under its exclusive jurisdiction conferred by s 22 of the PRA.
Legal principles
[10] Ms Carr’s application to set aside the defendant’s appearance under protest to jurisdiction is made in reliance on r 5.49 of the High Court Rules 2016. Relevantly, that rule provides:
5.49 Appearance and objection to jurisdiction
…
(3) A defendant who has filed an appearance may apply to the court to dismiss the proceeding on the ground that the court has no jurisdiction to hear and determine it.
…
(5) At any time after an appearance has been filed, the plaintiff may apply to the court by interlocutory application to set aside the appearance.
…
(6) The court hearing an application under subclause (3) or (5) must,—
(a)if it is satisfied that it has no jurisdiction to hear and determine the proceeding, dismiss the proceeding; and
(b)if it does not dismiss the proceeding under paragraph (a), set aside the appearance.
Legislative provisions
[11]Section 4 of the PRA provides, so far as is relevant:
4 Act a code
(1)This Act applies instead of the rules and presumptions of the common law and of equity to the extent that they apply—
(a)to transactions between spouses or partners in respect of property; and
(b)in cases for which this Act provides, to transactions—
(i)between both spouses or partners and third persons; and
(ii)between either spouse or partner and third persons.
(2)Subsection (1) does not apply where this Act expressly provides to the contrary (such as in subsection (5)).
(3) …
(4)Where, in proceedings that are not proceedings under this Act, any question relating to relationship property arises between spouses or partners, or between either or both of them and any other person, the question must be decided as if it had been raised in proceedings under this Act.
(5)This section does not apply if the de facto partners have lived in a de facto relationship for less than 3 years.
(6)However, if the court makes an order under section 25(1)(a) in respect of any relationship property of de facto partners to whom subsection (5) applies, and any question relating to relationship property arises between those de facto partners in any subsequent proceedings that are not proceedings under this Act, then—
(a)subsection (5) does not apply; and
(b)the question must be decided as if it had been raised in proceedings under this Act.
[12]Section 14A of the PRA provides:
14A De facto relationships of short duration
(1)This section applies if a de facto relationship is a relationship of short duration (as defined in section 2E).
(2)If this section applies, an order cannot be made under this Act for the division of relationship property unless—
(a)the court is satisfied—
(i)that there is a child of the de facto relationship; or
(ii)that the applicant has made a substantial contribution to the de facto relationship; and
(b)the court is satisfied that failure to make the order would result in serious injustice.
(3)If this section applies, and the court is satisfied that the grounds specified in subsection (2) for making an order on an application under this Act are made out, the share of each de facto partner in the relationship property is to be determined in accordance with the contribution of each de facto partner to the de facto relationship.
(4)Nothing in this section prevents a court from making a declaration or an order under section 25(3), even though the de facto partners have lived in a de facto relationship for less than 3 years.
(5)This section is subject to sections 15 to 17A.
[13]Section 22 of the PRA provides:
22 Jurisdiction
(1)Every application under this Act must be heard and determined in the Family Court.
(2)This section is subject to any other provision of this Act that confers jurisdiction on any other court.
Analysis
[14] The issue to be determined in this judgment is whether Ms Carr’s claim against the defendants is a claim for recovery of loans made by her to the defendants, in which case the defendants’ protest to jurisdiction should be set aside, or whether the true nature of her application is an application seeking that the Court determine her entitlement to relationship property and/or to make orders dividing the relationship property, in which case her application to set aside the defendants’ protest to jurisdiction should be dismissed.
Ms Carr’s position
[15] Ms Eastwood, for Ms Carr, began her submissions by canvassing the relevant authorities, referring to Houston-Quay v Henson1 and Martin v Martin,2 where she
1 Houston-Quay v Henson [2013] NZHC 294.
2 Martin v Martin [2023] NZHC 2162 at [23].
pointed to the following paragraph of the judgment which, she submits, describes the position regarding the jurisdiction of the Family Court under the PRA:3
[23] The Family Court therefore has exclusive jurisdiction over applications under the PRA. However, this does not mean the Family Court has exclusive jurisdiction over every type of civil proceeding between spouses or partners. Nor does it mean that the Family Court has exclusive jurisdiction over every proceeding in which the PRA may have some application. There is a long line of authorities, beginning with Jew v Jew, to the effect that the exclusive jurisdiction of the Family Court applies only where a party has applied for orders under the Act.
[16] Ms Eastwood also relies on the decision in Kake v Napier and refers to the following passage from the Court’s judgment which discussed the effect of s 4(4) of the PRA:4
[27] This provision contemplates that proceedings raising questions relating to relationship property may be commenced and determined in courts other than the Family Court. So long as the proceeding is not an application under the PRA, that other court will have jurisdiction, but will have to determine the question as if it had been raised in a proceeding under the PRA. In fairness to the Judge, the authorities confirming that this is the effect of s 4(4) were not cited to her.
[17]Ms Eastwood submits:
(a)the de facto relationship between Ms Carr and Mr Whitfield lasted for approximately 25 months, and therefore was a relationship of short duration;
(b)the loan funds cannot properly be characterised as a contribution to a de facto relationship. The term “contribution” cannot naturally be skewed to include circumstances where funds are advanced with the clear intention they be repaid;
(c)the parties at all times understood, and intended, that the funds were advanced by Ms Carr as a loan. The defendants, or at least Mr Leighton, were aware that Ms Carr intended to use the loan funds
3 Martin v Martin, above, n 2 (footnotes omitted).
4 Kake v Napier [2022] NZHC 2395 (footnotes omitted).
to put towards the future purchase of a house for herself and her children, and so would need to be repaid when that happened.
[18] Ms Eastwood submits that the defendants’ assertion that the loan funds were paid in anticipation of Ms Carr taking an interest in the property is inconsistent with the objective evidence including, in particular, the correspondence between the parties’ counsel. She points to the following:
(a)a letter dated 11 July 2024 in which the solicitors for the Trust recorded their instructions that “our client has expressed that he has every intention to repay your client the loan amount in full”;
(b)a letter of 16 July 2024 in which Ms Carr’s solicitors responded to the suggestion that the agreement incorporate the ability to register a notice of claim, stating “a notice of claim is not suitable in this instance, as it requires a relationship property interest, whereas all parties have agreed this is a loan”. There was no subsequent response on behalf of the Trust refuting this position;
(c)in a letter dated 24 July 2024, the solicitors for the Trust recorded their instructions that Ms Carr and Mr Leighton had agreed “Leighton and the Trust are to repay Melissa the full amount of the loan ($539,642.60) by 20 November 2024”.
(d)in an email of 20 August 2024, the solicitors for the Trust recorded their clients’ agreement that interest be charged upon the loan at a rate of
5.9 per cent “should the loan not be repaid within 10 days of the date of sale of the Property”; and
(e)in a letter of 26 August 2024, the solicitors for the Trust referred repeatedly to the loan funds in terms of an “advance” that was to be repaid or “refunded”.
[19] Ms Eastwood submits that the Property is owned by the Trust, and there is no evidence that Mr Leighton has a non-discretionary interest in the Property and accordingly it does not constitute relationship property within the scope of s 8 of the PRA.
[20] Ms Eastwood submits that neither Ms Carr nor Mr Leighton have applied for orders under the PRA. Ms Carr’s claim for repayment of loan funds is not a claim for a division of relationship property, the main cause of action pleaded is failure by the Trust to repay the loan that she advanced. She submits that in accordance with established authority, summarised in Kake v Napier,5 even if a claim were brought under the PRA by either Ms Carr or Mr Leighton, that would not derogate from the High Court’s jurisdiction over her present claim for repayment of the loan.
[21] Ms Eastwood submits that although the application of loan funds to the Property (via mortgage repayments and improvements) could potentially be characterised as a “transaction … in respect of property”, that does not mean that the Family Court has exclusive jurisdiction over Ms Carr’s claim. It may mean (subject to findings as to whether the PRA applies) that the rules of the PRA may have to be applied by the High Court which hears Ms Carr’s claim.
Defendants’ position
Application of the PRA
[22] Ms Brugeyroux, for the defendants, submits that although Ms Carr and Mr Whitfield’s de facto relationship was one of short duration, being less than three years, by virtue of s 14A, the PRA still applies to their relationship. She points to s 14A(2) of the PRA and submits that:
(a)section 14A(2)(a)(i) applies as Ms Carr’s children lived with Ms Carr and Mr Whitfield, and formed part of their family; and
5 Kake v Napier, above n 4.
(b)Ms Carr made a substantial contribution to the de facto relationship which means that paragraph (2)(a)(ii) also applies.
[23] Ms Brugeyroux submits that the application of s 14A means that Ms Carr is entitled to a share of her and Mr Whitfield’s relationship property and this should be determined by the Family Court under the PRA.
[24] Ms Brugeyroux’s submissions at [15] to [18] assert that not all the payments that were made into the Trust bank account were for the use and benefit of the Trust. Ms Eastwood submits that these issues (also reflected at [22] and [33] of Ms Brugeyroux’s submissions) relate to quantum, not to the issue of the High Court’s jurisdiction. In this respect I agree with Ms Eastwood’s position that these issues are relevant to quantum.
What is the true nature of Ms Carr’s application?
[25] Ms Brugeyroux submits that the true nature of the payments made by Ms Carr to the Trust should be determined based on the parties’ intentions at the time the payments were made, not after Ms Carr and Mr Whitfield’s relationship came to an end.
[26] Ms Brugeyroux submits that the trustees must act unanimously and that there is no evidence before the Court that Ms Carr ever spoke to the director of WTL about her advancing a loan to the Trust, or any evidence that both trustees agreed to borrow funds from Ms Carr. Ms Eastwood disputes this, and points to Ms Carr’s reply affidavit at paragraph [26](a) where Ms Carr refers to a meeting held with Mr Varney, a director of WTL, regarding the loans she had made to the Trust. I also note Mr Varney was involved in the correspondence in July 2024 which included the draft s 21A Agreement (mislabelled as a s 21 Agreement) which acknowledged Ms Carr’s loan at recital F.
[27] Ms Brugeyroux submits that when the parties’ intentions at the time Ms Carr made each payment to the Trust is considered, the funds paid by Ms Carr cannot, whether objectively or subjectively, be classified as a loan. She submits:
(a)When Ms Carr paid the amount to the Trust bank account to pay off the mortgage held by the Trust, her intention was to acquire an interest in the Property in proportion to the equity in the Property at the time of her investment. In discussions between the trustees, the property sharing agreement was drafted and sent to Ms Carr and Mr Whitfield on 15 May 2024, and makes reference to Ms Carr acquiring an equitable interest in the Property, not a loan. The fact that these funds were referred to by the parties as a loan in July 2024 does not change the character of the funds at the time those funds were paid to the Trust.
(b)Ms Carr did not speak to the director of WTL before paying the funds into the Trust bank account and accordingly there could be no clear intention that the funds were received by the trustees as loans and that the funds were to be repaid.
(c)Ms Carr’s funds were used to pay the couple’s (and Ms Carr’s children’s) everyday living expenses, all of whom reside at the Property. These payments include contributions towards utilities and a proportion of the funds for the mortgage payments. Accordingly, these are contributions made to the cost of the parties living at the Property during the relationship, and are not loans from Ms Carr to the Trust.
(d)Ms Carr claims that any payments made—irrespective of who made the payment, to whom payment was made, and the purpose of the payment—have all become loans from Ms Carr to the Trust.
[28] Ms Brugeyroux submits that the contemporaneous documents clearly show that Ms Carr’s funds were not intended to be a loan at the time they were paid and should be more properly classified as relationship property, relying on the following:
(a)Mr Whitfield discussed changing the name of the Trust to “L M Trust” (from the “L N” Trust); changing his will to make Ms Carr the executor; making Ms Carr his Enduring Power of Attorney; and paying off the full amount of the mortgage. These discussions occurred in September
2023 and in November 2023 Ms Carr made the payment used by the Trust to pay off the mortgage.
(b)The parties’ intentions expressed in the correspondence with their lawyers in February 2024 and April 2024 are to the same effect.
(c)The correspondence between Mr Whitfield and Ms Carr and their lawyer in May 2024 shows that the parties’ continued intention was for Ms Carr to acquire a share in the Property. Further, the draft Property Sharing Agreement records the parties’ intention as:
(i)to acknowledge that each party had contributed equity towards the Property;
(ii)that each party’s contribution to the Property’s equity should be protected;
(iii)that they would both enjoy the benefits of the remaining value of the Property in equal shares; and
(iv)that they would both contribute to the ongoing costs of the Property.
[29] Ms Brugeyroux also points to the draft s 21A agreement as supporting the fact that Ms Carr is seeking to recover relationship property, not loans, and she submits the agreement was sent by Ms Carr’s lawyers to Mr Whitfield’s lawyers in June 2024 and if Ms Carr’s payments had been loans, she would have sent Mr Whitfield loan documents, or a deed of acknowledgement of debt, instead of a s 21A Agreement.
Proceeds of the sale of Karaka Street
[30] Ms Brugeyroux submits the net proceeds of sale from Ms Carr’s property at Karaka Street are relationship property and not Ms Carr’s separate property. She submits that Karaka Street was sold by Ms Carr and Mr Whitfield as a couple in a de facto relationship of short duration.
[31] In response to this, Ms Carr’s evidence is that the property was sold in November 2022, and she did not commence her de facto relationship with Mr Whitfield until December 2022 when she moved into the Property to live with him.
[32] There is clearly a conflict of evidence on this issue and this cannot be resolved in this judgment.
Does the High Court have jurisdiction to determine Ms Carr’s claim?
[33]Ms Brugeyroux seeks to distinguish authorities relied on by Ms Eastwood:
(a)In relation to Houston-Quay v Henson,6 she submits that s 14A of the PRA did not apply so the case can be distinguished.
(b)In relation to Martin v Martin,7 she submits that this was an application under s 174 of the Companies Act 1993 not a proceeding relating to the division of relationship property and orders under the Companies Act are under the exclusive jurisdiction of the High Court. Accordingly, the case is distinguishable.
(c)In relation to Kake v Napier,8 she submits this case is distinguishable as it related to a construction contract which could not be dealt with under the PRA.
[34] Ms Brugeyroux submits that it is not necessary or fatal to the protest to jurisdiction that neither party has filed a claim in the Family Court under the PRA. She relies on the decision in Belle v Pearsall9 in which the Court had to consider whether the plaintiff’s claim for a distribution of proceeds of the sale of the parties’ former family home fell within the jurisdiction of the High Court where, at the time of the hearing, no application had been made in the Family Court under the PRA. She submits the High Court held that the Family Court nevertheless had exclusive jurisdiction to determine the issue concerning the proceeds of the sale of the parties’
6 Houston-Quay v Henson, above n 1.
7 Martin v Martin, above n 2.
8 Kake v Napier, above n 4.
9 Belle v Pearsall [2023] NZHC 3147.
former family home, and therefore the High Court did not determine the issues even though an application to the Family Court had not been filed by the respondent.
[35] In response to this, Ms Eastwood submits Belle v Pearsall was a case involving a married couple with joint property and therefore clearly within the jurisdiction of the Family Court under the PRA , as distinct from Ms Carr’s debt recovery claim which is not the same as a claim for compensation under the PRA.
Result
[36] I am of the view that the High Court has jurisdiction to determine Ms Carr’s claim. The reasons for this are:
(a)There is a significant body of evidence that supports Ms Carr’s assertion that the payments she made to the Trust were a loan, repayable by the Trust. This was recorded in correspondence and draft documents for the period from May to August 2024, when the Trust was being legally advised. I do not find credible the Trust’s reversal of its position to now characterise these payments as contributions by Ms Carr to the de facto relationship. I do not accept the defendants’ argument that the true nature of Ms Carr’s application is an application to deal with relationship property. It is an application to recover a loan which has been accepted as owing by the defendants.
(b)It is arguable that the de facto relationship, although a relationship of short duration, is subject to the PRA by virtue of s 14A and accordingly orders can be made in respect of relationship property. However, neither party has made an application under the PRA for orders. Under the authority of Kake v Napier,10 where no application has been made under the PRA, the High Court has jurisdiction but will have to determine questions relating to relationship property as if they had been raised under the PRA. Belle v Pearsall11 is distinguishable as that was
10 Kake v Napier, above n 4.
11 Belle v Pearsall, above n 9.
a situation dealing with the proceeds of sale of the parties’ former family home, clearly a matter covered by the PRA, as distinct from Ms Carr’s debt claim.
(c)While there may be some issues as to quantum, and some payments by Ms Carr may ultimately be determined to be contributions to the de facto relationship, this does not disqualify the High Court from having jurisdiction. To the extent any of the payments are determined not to be part of the loan funds, then the High Court would deal with these as if the issue had been raised under the PRA in accordance with s 4(4) of that Act.
(d)While there had been documents prepared proposing that Ms Carr take an equity interest in the Property, from the evidence, this was an alternative means of dealing with the funds she had invested as opposed to repaying the loan. These documents did not proceed. At the time this proposition was being advanced, the relationship between Ms Carr and Mr Whitfield came to an end. Given the circumstances under which the agreements were prepared and then did not proceed, I do not consider that the preparation of the draft s 21A agreement or the draft property sharing agreement add much weight to the argument that Ms Carr’s advances were contributions to the relationship property rather than loans.
(e)While there is clearly no formal documentation of the trustees of the Trust accepting loan funds from Ms Carr, it is not an unreasonable assumption by Ms Carr that because Mr Whitfield was aware of the circumstances in which she was advancing the funds, and it was known that they were being used for Trust purposes (at least partially in terms of paying off mortgages held by the Trust and renovating the Property owned by the Trust), that the trustees had impliedly accepted the loans. It is also apparent from Ms Carr’s evidence that Mr Varney, the sole director of the other trustee, WTL, was aware of the loans and was
involved in discussions regarding the loans and in preparation of draft documents which referenced the loans.
Orders
[37]I make the following orders:
(a)Ms Carr’s application to set aside the defendants’ protest to jurisdiction is granted;
(b)as Ms Carr is the successful party, costs should follow the event. Counsel are directed to endeavour to agree costs and failing agreement being reached within a period of 20 working days from the date of this judgment, counsel for Ms Carr will file a memorandum as to costs (not to exceed five pages) within five working days after the expiry of the 20 working day period, and counsel for the defendants will file a memorandum (not to exceed five pages) in response within five working days of receipt of counsel for Ms Carr’s memorandum. A decision as to costs will then be made on the papers.
…………………………….. Associate Judge Taylor
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