Du Preez v Estate of Doornekamp-Wellman

[2022] NZHC 1722

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2022-485-14

[2022] NZHC 1722

BETWEEN

WILLEM DU PREEZ

First Plaintiff

GETTA SNIJDERS
Second Plaintiff

AND

ESTATE OF BARBARA ANNE DOORNEKAMP-WELLMAN

First Defendant

PETER CRELLAN KELLY (as Executor) Second Defendant

PETER CRELLAN KELLY, PPPRA

Property & Welfare (discharge) Third Defendant

PETER CRELLAN KELLY (as nephew)

Fourth Defendant

Hearing:	27 June 2022
Appearances:	W du Preez, First Plaintiff (self-represented) G Snijders, Second Plaintiff (self-represented) R L Powell for Defendants
Judgment:	19 July 2022

JUDGMENT OF ASSOCIATE JUDGE LESTER

(Strike out)

DU PREEZ v ESTATE BA DOORNEKAMP-WELLMAN [2022] NZHC 1722 [19 July 2022]

[1]    The defendants apply to strike out the amended statement of claim in its entirety. The application is primarily based on a settlement agreement between the parties arising from earlier proceedings between them. The issues I need to determine are: first, whether the settlement agreement remains enforceable or, at least, whether there is a reasonably arguable case for the plaintiffs’ claim that they are entitled to cancel the settlement agreement or, that it is void; second, if the settlement agreement remains in force, whether its terms are wide enough to bar the present proceeding.

Background

[2]    The following background is taken largely from the submissions of Ms Powell, counsel for the defendants. As Ms Powell pointed out in her oral submissions, the plaintiffs’ written submissions did not take issue with her summary of the background. Mr du Preez, who spoke on behalf of the  plaintiffs,  also did  not take  issue  with Ms Powell’s summary of the background in oral submissions.

[3]    The plaintiffs provided care to the late Barbara Anne Doornekamp-Wellman (Barbara) between 2008 and 2019, first through Presbyterian Support Services, second through a contract with a family trust and third by a purported contract with Barbara. Barbara lived alone. The defendant, Peter Kelly (Peter) is Barbara’s nephew.

[4]    I understood Ms Powell to use the term “purported” because one of the issues that led to the proceedings (resolved by the settlement agreement) on which the present application is based, was whether the defendants had a contract with Barbara.

[5]    Barbara was formally assessed as lacking capacity to manage her own affairs as to property and welfare on 18 September 2019. On that basis, Peter was appointed as Barbara’s welfare guardian and property manager under the Protection of Personal and Property Rights Act 1998 (the PPPR Act).

[6]    Peter applied for a without notice temporary protection order in favour of Barbara and himself against the plaintiffs pursuant to the Family Violence Act 2018. The application was eventually dealt with on notice and ultimately discontinued on the basis of undertakings provided by the plaintiffs.

[7]    On 25 August 2020, the plaintiffs commenced a claim in the District Court to recover payments they say were due to them from Barbara under a contract they claimed to exist.1

[8]    In Peter’s capacity as Barbara’s property manager, Peter commenced separate District Court proceedings against the plaintiffs seeking they account for funds paid to them from Barbara’s bank account. Ultimately, this proceeding was consolidated with the plaintiffs’ District Court claim. Barbara left with Mr du Preez a Will she made in 2012 and which was subject to a Codicil made in mid-2019. Under the 2012 Will Mr du Preez received 20 per cent of the residue of Barbara’s estate.

[9]    As Barbara’s property manager, Peter applied for a Will to be made for Barbara pursuant to s 55 of the PPPR Act. In February 2020, an independent solicitor reported to the Family Court that it would be appropriate for a Will to be executed for Barbara. The Family Court approved a Will in April  2020.  Barbara  passed  away  in  January 2021 with Probate of the 2020 Will being granted to Peter on 5 March 2021. Under the 2020 Will  there was no provision for the plaintiffs.  The Will  left with  Mr du Preez referred to in [8] above was not brought to the Family Court’s attention.

[10]   The plaintiffs indicated an intention to make a claim under the Law Reform (Testamentary Promises) Act 1949. It seems no proceedings under that Act were issued by them.

[11]   Settlement discussions between the plaintiffs and Peter took place from mid-2021 in relation to the consolidated proceedings. There was a Judicial Settlement Conference (JSC) in the District Court in October 2021 at which a settlement was not reached. Negotiations continued through October 2021. Those negotiations took place between the solicitors and involved, with Peter’s solicitor’s approval, Peter corresponding directly with the plaintiffs’ solicitor. That is a point of concern to the plaintiffs and I will return to it below.

1      Leave to file proceedings against a person subject to a property order under s 57 of the Protection of Property and Personal Rights Act 1988 was granted retrospectively in relation to the statement of claim issued by the plaintiffs.

[12]   Eventually a draft settlement agreement was prepared by the defendant and subsequently amended by the solicitors for both parties. The plaintiffs acknowledge they received legal advice prior to signing the settlement agreement. The plaintiffs describe a three hour meeting with their solicitor prior to the settlement agreement being signed. In blunt terms, they assert they were pressured into signing the settlement agreement by their solicitor and, again, this is a point I return to below.

[13]   The settlement agreement was signed on 2 November 2021 with the plaintiffs’ signatures witnessed by their solicitor.

[14]   The present application is based on cl 11 of the settlement agreement which provides as follows:

The Parties agree that this Agreement is in full and final settlement of all matters between them (present or future and whether or not in the contemplation of the Parties and including all matters associated with Barbara Doornekamp-Wellman and/or her Estate) as to any claims, actions, or complaints involving Peter Personally and agree that no further claims, actions or complaints regardless of form arising form any matters settled by this Agreement shall be taken other than: (1) to enforce the terms of this Agreement; or (2) relating to any future act that would be a breach of the Family Violence Act undertaking in favour of Peter Personally which shall remain in full force and effect.

[15]   I note here that the parties to the settlement agreement are the plaintiffs, their company called Gettwill Investment Services Limited, and Peter Kelly as executor for Barbara.

[16]However, the settlement agreement contains the following cl 3:

This agreement confers benefits on a third party to the agreement enforceable by him, namely Peter Kelly in his personal capacity (Peter Personally).

[17]   I am satisfied that cl 3 was intended to confer the benefit of the settlement agreement on Peter and to be enforceable by him pursuant to s 17 of the Contract and Commercial Law Act 2017. The plaintiffs did not suggest Peter, in his personal capacity, was not entitled to the benefit of the settlement agreement other than claiming they are entitled to cancel or avoid it.

[18]   The settlement  agreement  also  contains  an  entire  agreement  clause  and  a non-reliance on representations clause.

[19]   The settlement agreement required the parties to discontinue their respective proceedings with no issue as to costs. The plaintiffs and their company were to prepare the notice of discontinuance of the consolidated proceeding. That notice of discontinuance was completed by the plaintiffs’ solicitor, signed by the plaintiffs’ solicitor and filed with the Court. Under the settlement agreement the plaintiffs were to pay $10,000 to Peter, which amount was paid.

[20]   On 21 December 2021, approximately seven weeks after the settlement agreement was signed, the plaintiffs filed the present proceeding.

The amended statement of claim

[21]   The amended statement of claim filed in March 2022. It sets out an extensive background and list of complaints. A secondary basis to the strike out application is that a number of the claimed causes of action cannot succeed. In the half-day hearing allocated to hear the strike out application it was not possible to deal with the challenges to each cause of action. I advised the parties that if the application based on the settlement agreement was dismissed, a further hearing to deal with the alternative basis for the strike out would be allocated.

[22]   Causes of action include malicious prosecution, breach of privacy, claims against Barbara’s estate based on estoppel, that the plaintiffs were unjustifiably or constructively dismissed from their employment as carers of Barbara by Peter and that Peter defamed the plaintiffs by alleging they had been guilty of financial abuse of Barbara.

[23]   Damages are sought along with “rescission of settlement agreement between the parties”.

[24]   Accordingly, it is necessary to examine whether the amended statement of claim sets out an arguable basis for the plaintiffs to cancel the settlement agreement or have it set aside for duress (or whether re-pleading of the claim could provide such

a basis). Before doing so, I remind myself of the principles that apply to a strike out application.

Strike out principles

[25]   Rule 15.1 of the High Court Rules 2016 (the Rules) sets out the jurisdiction to strike out a proceeding. This application is primarily based on the amended statement of claim being an abuse of process as the settlement agreement is alleged to bar all further litigation between the parties concerning Barbara.

[26]   The applicable principles were set out by Ms Powell in her submissions and were not disputed by the plaintiffs. For the purposes of this application, it is assumed that the facts pleaded in the statement of claim are true provided they are not purely speculative.2 Before the Court will strike out a proceeding, the causes of action must be so clearly untenable that they cannot possibly succeed. The jurisdiction is exercised sparingly and only in a clear case but if the application requires questions of law to be determined, such will not exclude a strike out order being made.

[27]   Ms Powell submitted it is well established that commencing litigation contrary to litigation bar in a settlement agreement amounts to an abuse of process.3

Is there a basis for the settlement agreement to be set aside?

[28]   The plaintiffs identified a number of grounds they claim meant the settlement agreement could be cancelled by them or was voidable.

[29]   I am satisfied none of the grounds raised by the plaintiffs for challenging the settlement agreement are reasonably arguable. In summary, the reason for that conclusion is that none of the grounds asserted are a misrepresentation, breach or other misconduct by Peter.

[30]   In my view, what the plaintiffs complain of is they were let down by their solicitor in the course of the settlement process. In respect of the matters which I detail

2      Attorney-General v McVeagh [1995] 1 NZLR 558 (CA).

3      Heinz-Wattie Ltd v Hamburg Sudamerikanische Dampfschiffahrtsgesellschaft (1999) 14 PRNZ 227.

below, without deciding that the plaintiffs’ claims are correct, responsibility for none of the matters outlined can be visited on Peter. I emphasise the plaintiffs’ solicitor is not a party to these proceedings and was not heard on the application. Accordingly, everything I set out about the plaintiffs’ solicitor is based on their assertions. For the purposes of the application, I must take those allegations as capable of being proved.

First ground of challenge: Withholding of discovery

[31]   In the District Court proceedings, Peter provided substantial discovery. His list of documents is dated 1 July 2021. There is no evidence of any material delay in the list being provided to the plaintiffs’ solicitor. Again, the settlement agreement was signed   on   2 November 2021.   The   plaintiffs   assert   that   it   was   only   on      8 November 2021 that their solicitor provided them with a Dropbox containing the pdf files making up Peter’s discovery. The plaintiffs say had they been given access to the Dropbox before the October 2021 settlement conference a different outcome may have been possible. They say they would not have signed the settlement agreement if they had received/seen the disclosure.

[32]   If this allegation is true then it is clear the responsibility for the failure to provide Peter’s discovery to the plaintiffs rests with the plaintiffs’ solicitor. There is no allegation of a breach of discovery obligation by Peter. This claim cannot provide a foundation for the cancellation of the settlement agreement.

Second ground of challenge: Email letter

[33]   The plaintiffs allege that on 31 October 2021, Peter emailed their solicitor     a without prejudice letter “threatening to cause them severe financial hardship”. The plaintiffs assert the communication contained “untruths and misleading information”. The amended statement of claim pleads that the email was withheld from the plaintiffs until 7 November 2021.

[34]   In Mr du Preez’s affidavit he asserts: “[e]vidence was withheld until after the signing of the settlement”. He refers to “alleged blackmail threats and coercion to our lawyer to submit  [the  plaintiffs]  into  signing  the  agreement”.  In  his  affidavit, Mr du Preez refers to the email of 31 October 2021 and says: “[a]s for this

31 October 2021 blackmail email, we were not aware of it until 7 November 2021, when we received a copy of it.”

[35]   On the basis of that timing, the 31 October 2021 email can have had no impact on the plaintiffs’ decision to sign the settlement agreement on 2 November 2021 as they say they did not see it until 7 November 2021.

[36]   However, at the hearing, Mr du Preez referred to the exhibits to his affidavit which included an email sent by Peter to the plaintiffs’ solicitors on 31 October 2021. This email was forwarded to the plaintiffs by their solicitor on 1 November 2021. This does appear to be the same email as exhibit 12 referred to by Mr du Preez, as the letter says he did not see until 7 November 2021. Accordingly, it is reasonably arguable that the plaintiffs were in error in saying they did not receive the email letter prior to signing the settlement agreement. It may be they did not read the email when it was forwarded to them on 1 November 2022. However, I cannot find in the email letter any improper threat. The paragraph that seems to be in issue is as follows:

A final thought, in case you need a little more to help Willem over the line. While obviously it would be best not to provoke Willem if he is ready to sign, if that is not the case, then perhaps it would help your clients to agree to settle things if you explained to them in more detail the range of consequences that could follow from Getta’s frank explanation that paying all suppliers cash, under the table, is just the way that Willem does things? It seems to me that they do not appreciate that there are potential difficulties that may arise as    a result of calling each of these informal contractors as witnesses to testify about Willem’s business practices and clientele, which will of course be relevant to how much time he had available to spend caring for Barbara. Although Willem states that Boris is dead, his sun Shurik is certainly not, and Getta says that he also worked as a labourer for them. Similarly, the plumber Tony Perkins is still in business, and if he has (as Getta states) done extensive work on Barbara’s house, then he will be obliged by his professional obligations to have compliance records for those works, and so I would have imagined that those would be subject to your clients’ discovery obligations. Incidentally, Getta says that Boris was one of the two builders who constructed Willem & Getta’s home in 2008, so the records for that may provide assistance if your clients need help remembering his surname.

[37]   There is no threat in the above paragraph. It does not contain a threat to cause the plaintiffs “severe financial hardship”.   It is a common sense identification of   the real world difficulty of approving payments without appropriate records. Further, the plaintiffs’ solicitor did not consider the letter inappropriate or to contain threats when he sent it on to the plaintiffs.

[38]   The day after the email was forwarded to the plaintiffs they had a three hour meeting with their solicitor. That meeting is the next ground for challenge of the settlement agreement.

Third ground of challenge: Three hour meeting with solicitor

[39]   The plaintiffs say the three hour meeting was not a pleasant one, they were pressured into signing the settlement agreement by their solicitor, they were unwilling to sign and they were scared. In short, they claim they were under duress from their solicitor to sign the settlement agreement.

[40]   It is self-evident from stating the plaintiffs’ complaint that responsibility for the duress they complain of  does not lie with Peter.   This claim does not establish    a tenable basis to challenge the settlement agreement.

Fourth ground of challenge: Solicitor’s attendances

[41]   The plaintiffs say that on 29 October 2021 and 31 October 2021, Peter had “two attendances” with their solicitor. Whether this was in person or more likely by phone or email is not clear but, as recounted earlier, Peter was directly involved in communicating with the plaintiffs’ solicitor. This was apparently with the consent of Peter’s solicitor who was copied in to the email correspondence. How this communication might invalidate the settlement agreement was not developed by the plaintiffs.

[42]   Mr du Preez went so far as to imply there was some arrangement or understanding between Peter and the plaintiffs’ solicitor to bring the proceedings to an end. He did not put it that way, but suggested they both had a motivation for bringing the proceedings to an end. Mr du Preez said the plaintiffs’ solicitor had not complied with a direction to file a statement of claim in a proceeding where the plaintiffs had sought a freezing order in relation to Barbara’s estate and it, in effect, suited the solicitor to get rid of the proceeding.

[43]   Again, it is plain from this allegation that the plaintiffs’ complaint is with the alleged conduct of their solicitor.

Fifth ground of challenge: Misrepresentation

[44]   Ms Snijders, the second plaintiff, submitted there had been some form of misrepresentation by Peter in or prior to the signing of the settlement agreement which included reference to a protection order. This is a reference to the Family Violence Act at the end of cl 11 of the settlement agreement.

[45]   While previously a protection order was sought against the plaintiffs, no order was in place at the time of signing the settlement agreement. As noted earlier, the proceedings seeking a protection order were discontinued upon the plaintiffs giving an undertaking – such being noted in the Minute of Judge O’Dwyer of the Family Court dated 2 October 2020.

[46]   Ms Powell submitted in reply that cl 11 of the settlement agreement required the plaintiffs to provide a contractual undertaking to not act in a way that would contravene the Family Violence Act. Accordingly, the reference to the Family Violence Act was contractual shorthand for the conduct the plaintiffs undertook not to engage in. The undertaking provided to resolve the Family Violence Act proceeding still remains in place. The plaintiffs are in error when they say the undertaking was set aside by Judge O’Dwyer. Clause 11 of the settlement agreement records that the undertaking “… shall remain in full force and effect”.

[47]   Nothing in this complaint reflects on Peter. The settlement agreement is clear on its terms as to what is required. The plaintiffs had legal advice on the settlement agreement, signed it and met their obligations under it.

Sixth ground of challenge: The company Gettwill Investments Services Ltd

[48]   I noted earlier that the settlement agreement referred to the plaintiffs’ company, Gettwill Investment Services Limited (Gettwill).

[49]The settlement agreement contained the following signature part:

Willem du Preez as director for Gettwill Investment Services Ltd.

Below that:

[Witness to signature of Willem du Preez as director of Gettwill Investment Services Ltd]

Mr du Preez signed below that and his signature was witnessed by his solicitor.

[50]   The plaintiffs’ notice of opposition says Gettwill has two directors and that only one director was informed about the settlement and signed the settlement agreement. They say the second director was not informed and did not consent to nor sign the settlement agreement.

[51]   I am satisfied this ground does not provide a basis for the plaintiffs to challenge the settlement agreement.  It amounts to the plaintiffs relying on their own wrong.   If they are asserting Gettwill’s constitution (which is not before the Court) required two directors to sign then it is their own breach that has led to Mr du Preez’s co-director not being involved in the settlement agreement.

[52]   Gettwill is not a party to this proceeding. No order was sought against it. If the company were to assert it was not bound by the settlement agreement then it would have to overcome s 18 of the Companies Act 1993.

[53]   The plaintiffs asserted Peter was aware there were two directors of Gettwill. The fact Gettwill has two directors does not, without more, mean two directors must sign an agreement for it to be valid against Gettwill. A settlement agreement is not an agreement that has to be in the form of a deed triggering the requirements of s 180(1) of  the Companies Act 1993.  The settlement agreement  here  is not in the  form of  a deed.

[54]   Mr du Preez had Gettwill endorse the settlement agreement through having its solicitor execute the notice of discontinuance. Mr du Preez cannot rely on his own failure to involve his co-director in the settlement to deprive Peter of the benefit of the settlement – especially when Gettwill was represented by a solicitor who actioned the settlement on its and on behalf of Mr du Preez.

Seventh ground of challenge: Settlement Agreement one-sided and unfair

[55]   The plaintiffs say the settlement agreement is one-sided and unfair. This is not of itself a ground to set aside the agreement. The plaintiffs say the settlement agreement contained no certificate signed by their solicitor certifying they had been given independent advice. Such is not required for a settlement agreement to be valid. This argument cannot survive the plaintiffs’ own evidence that they had a three hour session with their solicitor before the settlement agreement was signed.

[56]   Again, if the plaintiffs say the advice they received was inadequate and they were pressured to sign the settlement agreement, these are matters for them to take up with their then solicitor. The plaintiffs say the settlement agreement provides no provision for termination or for breach and has no commencement or termination date. There is nothing in these points. Neither are prerequisites for a valid agreement. The settlement agreement was effective from the date it was signed.

Conclusion

[57]   I am satisfied none of the matters raised by the plaintiffs gives rise to an arguable basis for saying the settlement agreement is voidable or could be cancelled for misrepresentation or breach.

[58]   I conclude the settlement agreement is therefore in force and I now turn to consider the scope of cl 11 of the settlement agreement.

Clause 11 of the settlement agreement

[59]   Mr du Preez accepted at the hearing that cl 11 of the settlement agreement was in wide terms. The plaintiffs did not in their written or oral submissions submit the agreement, if it was in force, did not apply to the present proceeding.

[60]   The parties – that is the plaintiffs (and Gettwill) and Peter (as executor) agreed to settle on a full and final basis all that is between them. That settlement covered present and future claims, including future claims not then known, that is “… not in the contemplation of the parties”. The settlement was not limited to matters

concerning Barbara’s estate, as the settlement is said to include all matters associated with Barbara and her estate.

[61]   The full and final settlement was intended to cover “… any claims, actions or complaints …” involving Peter personally. The terms used in respect of the settlement concerning Peter are straightforward plain English terms.

[62]   I accept Ms Powell’s submission that the settlement agreement was intended to bring all matters between the parties to an end. I also accept her submission that  cl 11 of the settlement agreement is a bar to the present proceeding. Again, the plaintiffs did not advance an alternative or narrower interpretation of cl 11. The scope of the matters settled by cl 11 was not limited by reference to a proceeding as in Proprietors of Maraetaha No. 2 Sections 3 and 6 Block Inc. v Williams.4 Both as executor and personally, the scope of the settlement in favour of Peter is broad.

[63]   I find cl 11 of the settlement agreement is a bar to the present claim and it is therefore an abuse of process. Peter’s application to strike out the amended statement of claim is granted.

[64]   Ms Powell addressed the fact that the settlement agreement did not refer to Peter in his capacity as Barbara’s property manager. Ms Powell submitted this was because Peter’s authority as such ceased upon Barbara’s death. Thereafter, Peter continued his responsibilities for Barbara’s affairs as her executor.

[65]   I do not see how Peter is described in the settlement agreement as impacting on my conclusion. The settlement agreement is a bar to the claim against Peter in relation to allegations against him as Barbara’s attorney. Agents, that is attorneys, are personally liable for their torts.5 Accordingly, any claim in tort against Peter as attorney is against him personally. If Peter’s wrong was within his authority from Barbara then, now that Barbara has died, any claim against her will now be against her estate. Peter will be personally liable for any wrong he committed outside his

4      Proprietors of Maraetaha No. 2 Sections 3 and 6 Block Inc. v Williams [2013] NZHC 3244.

5      (Hawes and D Lester (eds) The Laws of New Zealand on Agency (online ed, LexisNexis) at [34]-[39] and [130]-[131].Laws of New Zealand on Agency paras [34] and [35] and paras [130] and [131].

authority. In short, the bar on personal actions against Peter applies to claims that aim to make him personally liable for his wrongs as agent, that is, attorney of Barbara.

[66]   If I am mistaken in concluding that the settlement agreement protects Peter in his role as Barbara’s property manager then the only claim that appears to be based on Peter acting in that capacity is that he unjustifiably dismissed the plaintiffs from Barbara’s employment. The Employment Relations Authority has exclusive jurisdiction in respect of such claims. If I am mistaken that the settlement agreement is a bar to this claim then I strike it out on the basis this Court does not have jurisdiction to deal with a claim for unjustified dismissal.

Costs

[67]   Ms Powell has signalled an intention to seek indemnity costs relying in part upon cl 10 of the settlement agreement which provides that if the settlement agreement is  breached  by  the  plaintiffs  they  will  be  liable  for  all  enforcement  costs  on   a solicitor-client basis. But for that, I would have made a costs award in favour of Peter on a 2B basis plus disbursements as fixed by the Registrar.

[68]   If Ms Powell seeks to pursue indemnity costs then she is to file a memorandum of not more than five pages, together with the necessary supporting documentation within 10 working days of the date of this Judgment. The plaintiffs shall have a right of reply, again not more than five pages, to be filed within a further 10 working days and I will then deal with costs on the papers.

Associate Judge Lester

Solicitors:

Lance Pratley Law, Wellington (for Defendants)

Copy to counsel:

R : Powell, Barrister, Christchurch (for Defendants)

Copy to:

W du Preez (self-represented First Plaintiff) G Snijders (self-represented Second Plaintiff)