Duval v Clift
[2014] NZHC 1950
•27 August 2014
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2012-404-0059
CIV-2012-404-0120 [2014] NZHC 1950
BETWEEN BILL MATTHEW COWLEY DUVAL
Plaintiff
AND
JENINE LORNA CLIFT First Defendant
BRETT MAURICE BENNISON Third Defendant
Hearing: 4-7 August 2014 Counsel:
Plaintiff in person
JP Schoolz and P Jackson for DefendantsJudgment:
27 August 2014
JUDGMENT OF FOGARTY J
This judgment was delivered by me on 27 August 2014 at 4.30 pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date: ………………………….
Solicitors: Paddy Orr & Co, New Lynn [email protected]
DUVAL v CLIFT [2014] NZHC 1950 [27 August 2014]
Introduction
[1] The plaintiff and the first defendant jointly purchased a leaky home in Auckland in 2007. Ms Clift brought to the bargain savings in excess of $200,000 and creditworthiness so that she was able to raise a loan from her bank. Mr Duval brought his expertise as a leaky home consultant, and a commitment to buy out Ms Clift after two years.
[2] At the time of the purchase, Mr Duval and Ms Clift were on good terms, having a common political interest and being members of the same church, The Church of Latter Day Saints. The performance of the contract did not run smoothly and their relationship, which was based on friendship and no more at the start, rapidly deteriorated, to the knowledge of their church leaders.
[3] At the time the property was purchased there was a property sharing agreement (psa) entered into between the parties and this was renegotiated and a variation of the psa was entered into in September 2009. Both psas obliged Mr Duval to purchase Ms Clift’s share of the property. This has not happened.
[4] In these proceedings there are now claims based on several causes of action by Mr Duval against Ms Clift and a counterclaim by Ms Clift against Mr Duval.
[5] Mr Duval’s causes of action also extend to the third defendant, Mr Bennison, who became involved in this dispute in his capacity as a senior member of their church.
The claims
[6] Mr Duval’s causes of action are:
(a) Breach of contract against Ms Clift, in that she infringed upon Mr Duval’s right to exclusive possession of 10 Paris Place, Birkenhead (the property) as from September 2009. He claims
$80,000 for lost rental income; and
(b)Breach of contract against Ms Clift for stopping him repairing the property. He claims $100,000 for the anticipated additional cost of house repairs; and
(c) Breach of contract against Ms Clift for stopping him selling the property. He claims $400,000 for lost profit; and
(d)Breach of contract against Ms Clift for breaching the property agreements and seeks $25,000 for mental pain and anguish; and
(e) Harassment for Ms Clift’s unwanted and untoward contact with him
for which he seeks $50,000 for mental pain and anguish; and
(f) Breach of privacy against Ms Clift for which he seeks $50,000 for mental pain and anguish; and
(g)Physical and psychological violence against Ms Clift for which he seeks $50,000 for mental pain and anguish; and
(h) Defamation against Ms Clift for which he seeks:
(i) $540,000 for loss of real estate agent’s sales commissions;
(ii) $650,000 for loss of leaky building consultancy fees;
(iii) $500,000 for lost income and potential profits from
Chairmanship of Tarawa Whanau Trust over five years;
(i)Incest counselling in the community against Ms Clift which exposed him and the public to risk. He seeks $50,000 for mental pain and anguish; and
(j)Defamation against the third defendant (Mr Bennison) for publishing a letter dated 10 December 2012 (the letter) designed to lower Mr
Duval in the eyes of his community and harm him professionally. He seeks $100,000 for mental pain and anguish and risk; and
(k)Intrusion upon seclusion against Mr Bennison for which he seeks: (i) $540,000 for loss of real estate agent’s sales commissions; (ii) $650,000 for loss of leaky building consultancy fees;
(iii) $500,000 for lost income and potential profits from
Chairmanship of Tarawa Whanau Trust over five years. [7] Ms Clift’s counterclaim contends that:
(a) Mr Duval is in breach of an obligation to purchase Ms Clift’s rights
and interest in the property no later than 28 February 2013;
(b)Mr Duval has failed to pay rates, insurance and mortgage payments in terms of the first agreement and the variation;
(c) Mr Duval has failed to pay interest to the first defendant in terms of the first agreement and the variation; and
(d)Mr Duval made no payments towards the National Bank loans, in breach of the agreements.
[8] Ms Clift seeks by way of counterclaim:
(a) An order for the immediate sale of the property.
(b)An order requiring the plaintiff/counterclaim defendant to immediately vacate the property.
(c) Judgment in the sum of $490,000 or, in the alternative, an order that the first defendant receives $490,000 from the proceeds of sale of the property pursuant to paragraph 2(k)B.
(d)Interest pursuant to paragraph 4(b) of the variation agreement equivalent to a sum of $9,675.
(e) Interest pursuant to paragraph 4(c) at the rate of 3 per cent per annum equivalent to a sum of $22,053.69 for the period 28 February 2011 to the date of filing this amended counterclaim.
(f) Interest pursuant to paragraph 4(c) from the date of filing this amended counterclaim continuing at the rate of $17.67 daily until payment.
(g) Judgment in the sum $150,344.79 pursuant to paragraph 4(e).
(h)An order that the plaintiff repays the National Bank loans pursuant to paragraph (f).
(i) Costs.
[9] Prayer for relief (g) is to be adjusted down as the sum is incorrectly calculated.
General narrative of events
[10] Mr Duval and Ms Clift first met when he was working for the New Zealand
First Party, about 2004, and she was a volunteer for the Party.
[11] Mr Duval had a background in building construction, particularly in roofing. He said he was working as a leaky home consultant. At the time he was also studying for his law degree, from which he subsequently graduated. He worked for a law firm in Auckland, Sorensons, as an intern law clerk.
[12] Ms Clift was employed as a mental health nurse. She enjoyed steady earnings. She had capital in excess of $200,000 and the ability to borrow from a bank.
[13] They talked about buying a property together. Mr Duval found a property for sale. The two of them, as purchasers, entered into an agreement for sale and purchase on 14 December 2007. The purchase price was $450,000. Mr Duval said he had negotiated it down from an asking price in excess of $600,000. The contract was on the standard Real Estate Institute and Auckland District Law Society form with further terms of sale being:
15.1The purchaser acknowledges that the property has leaky building problems and that he buys the property from the vendor on an “as is where is” basis and agrees to assume full responsibility for the property and for all known and unknown defects in the property.
15.2The purchaser confirms that he has made his own enquiries concerning the property. The purchase acknowledges that he buys the property solely in reliance on his own judgment and agrees that he will not make any claim for compensation, damages, costs or any other claim whatsoever against the vendor in relation to any matters arising from or associated with the property.
15.3Where any conflict arises between the provisions of the further terms of sale (15.1 – 15.3 inclusive) and any other provisions of this agreement, the further terms of sale shall prevail.
[14] The purchase was funded by Ms Clift paying the deposit of $45,000, then paying a further $170,000, making her cash contribution $215,000. The balance of the purchase price of $320,000 was borrowed from a trading bank. The sale was settled on 28 February 2008.
[15] On the same day, the parties entered into a “Property Sharing Deed”
recording the purchase price being contributed:
Jenine $215,000, Bill Nil Mortgage borrowing $235,000
[16] Relevant to this dispute are the following obligations:
2.1Jenine will be entitled to exclusive occupation of the property for the period 28 February 2008 to 27 February 2009 and may have any boarders or guests she may desire, provided she pays all the principal and interest instalments on the loan (the loan instalments) as they fall due.
2.3From and after 28 February 2009, Bill will be entitled to exclusive occupation of the property and be solely responsible for paying loan instalments as they fall due. He may have any boarders or guests as he may desire.
3.1The person entitled to exclusive occupation of the property pursuant to clauses 2.1 and 2.2 will be responsible for keeping the property in a neat and tidy condition and will pay for the electricity, gas and water supplies and any telephone account.
4.0 No sale, lease or charging without consent.
4.1Neither party will, without the prior written consent of the other, sell, transfer, dispose of, mortgage or charge, his or her interest in the property or any share or part of that interest.
4.2Neither party will, without the prior written consent of the other, grant a lease or tenancy of the property or licence to occupy the property or any part thereof.
5.0 Purchase by Bill
5.1It is agreed that Bill will purchase from Jenine all her right and interest in the property (the purchase) and will complete the purchase not later than 28 February 2010.
5.4If Bill completes the purchase after 28 February 2009 but on or before 28 February 2010, then the purchase price payable will be $490,000.
5.5On completion of the purchase Jenine will contemporaneously repay from her own funds the balance of the principal sum on the loan and will discharge the mortgage securing the loan and will transfer her share and entitlement to the property to Bill.
5.7If Bill does not complete the purchase by 28 February 2010, he will remain liable to complete the purchase and in addition to the purchase price will pay Jenine interest at the sum of 14 per cent per annum, calculated on a daily basis on the amount of the purchase price unpaid from 29 February
2010 down to the date of payment.
6.0 Sale of property
6.1If Bill has not completed the purchase by 28 February 2010 or if he earlier dies or disappears without contact for a period of three months or more, then Jenine may at any time
thereafter require the property to be sold on the open market. It is agreed that the property will in that case be placed on the open market and sold at the best price reasonably obtainable. The sale proceeds will then be disbursed in the following order of priority:
(i) Payment of reasonable sale costs.
(ii) Payment to Jenine of the amount of $490,000.
(iii) Payment to Jenine of interest at 14 per cent per annum on $490,000 from 29 February 2010 down to the date of payment
(iv) Reimbursement to Jenine for any repair costs to the property reasonably required to achieve the sale of the property and any amounts expended by her on works required to comply with the local authority or other notice received in terms of clause 3.3.
(v) The balance of the sale proceeds will be payable to
Bill.
6.3Bill hereby appoints Guy Harmon Wilmot Setan of Auckland, solicitor (the attorney), his solicitor with authority to act on his behalf in all things and matters relating to the sale and transfer of the residential property situated at 10
Paris Place, Birkenhead, North Shore City being contained in Certificate of Title NA94A/464 including the signing of all documents relating to the sale and transfer of that property PROVIDED THAT:
(a) The attorney may not exercise or use his power of attorney before 28 March 2010, and
(b) The attorney must first have made all reasonable attempts to have Bill fulfil his obligations relating to the sale and transfer of the property under clauses
6.1 and 6.2 of this deed and Bill must have been unwilling to cooperate or have failed to respond.
(c) (Not relevant).
[17] For reasons which will be discussed later, this property sharing deed was varied on 15 September 2009. The clauses of the relevant variation agreement to this dispute are:
2.0 Change of Completion date
2.1Wherever the date 28th February 2010 appears in the Deed as the date by which Bill is to complete the purchase of the property such date shall now read as 28th February 2013.
3.0 Interest payable to Jenine
3.1On 28th February 2013 or on the earlier completion of the purchase or cancellation of this agreement Bill will pay to Jenine the following interest amounts on the cash contribution of $215,000 which she has made to the purchase of the property:
(a) Interest at 4.5% per annum on the sum of
$215,000.00 for the twelve months commencing 28th
February 2010;
(b) For any period after 27th February 2011 interest on
$215,000.00 at an interest rate equivalent to the ASB Bank Limited twelve month term deposit interest
rate before tax. For this purpose the interest rate shall be fixed each three months in advance e.g. the interest rate for the three months commencing 28th February 2011 will be the ASB Bank twelve months term deposit rate applying at 28th February 2011 and the interest rate for the following three month period commencing 28th May 2011 will be the ASB Bank Ltd twelve months term deposit rate applying as at
28th May 2011.
[18] This agreement had a variation schedule, of which the following terms are relevant to this dispute:
1 Bill Duval continues to have exclusive possession of the property at
10 Paris Place but has agreed to permit Jenine Clift to return to the property and rent a room upon the following conditions:
(a) Bill Duval has the sole exclusive right to choose the boarders and guests he wishes to live at the property.
(b) Jenine Clift agrees to pay room rental of boarders who may vacate property until a replacement is found (there are three good boarders currently returning approximately $375.00 a week).
…
(i) Clift’s rent will be 260 dollars a week and Clift has the first option of the master bedroom with en suite once it becomes available. Bill Duval has the sole discretion of adjusting the rent to a reasonable market rate and will do so giving reasonable notice.
…
2In return Jenine Clift agrees to extend the date for completing purchase for Bill Duval to 28 February 2013. All other conditions in original psa remain the same.
3Bill Duval will pay all rates and insurance for the property and will be responsible for the mortgage payments.
4Clift understands that Bill Duval is the sole proprietor/owner of the property in equity and contract but that she has a substantial financial interest and ownership rights in the property along with the mortgagee bank.
[19] Variation Schedule 3:
3Jenine advises that she has sent you a letter or letters concerning the apologies you have requested from her. I am further instructed to advise that Jenine agrees as follows:
(i) She will not make negative statements about you to members of your church, employers, toastmasters and others;
(ii) She will not make statements to embarrass you or undermine your credibility professionally using her position as Justice of the Peace or Mental Health nurse.
Reasons for the variation agreement
[20] There are two sets of reasons for the execution of the variation of the property sharing agreement, depending on the perspectives of the party.
[21] From Mr Duval’s point of view, he never enjoyed the quiet possession of the property he was entitled to from 28 February 2009. Rather, Ms Clift and the third defendant, Mr Bennison:
(a) Began coming back to the property complaining to his tenants that he was mentally ill, dangerous, a thief and a womaniser and they should not stay there.
(b)Took various boarders to the police station to file various complaints and encouraged them to leave the property over the 2099 2012 period.
(c) By their activities caused Mr Duval loss of rent money while he was trying to rerent the room.
[22] From the point of view of Ms Clift, she was having to meet the payments on the mortgage, contrary to the first agreement, which required Mr Duval to pay from
28 February 2009.1 Due to non-payment of the interest on the mortgage which, by
terms of the deed, was payable by Bill from and after 28 February 2009, the bank had threatened enforcement of its rights.
[23] As a result of having to meet the interest payments on the loan, Ms Clift could not also afford to rent. From her point of view, she needed to stay in the house in these circumstances for financial reasons. The parties had defaulted to the bank on interest payments in mid-May 2009 and again in June 2009. The bank contacted Ms Clift and told her the mortgage was in arrears. She saw herself as being forced to pay the mortgagee arrears or face a mortgagee sale. She had to draw from her Kiwi Saver account to cover both the June and July payments. Mr Duval left New Zealand on 3 August 2009, withdrawing $300 from the joint account, resulting in the August mortgage payment also being missed. She paid the August payment and the bank gave her a mortgage holiday for one month. As she could not afford to live elsewhere and cover the mortgage, her financial situation became untenable and, for that reason, asked Mr Duval to move back into the house in July 2009, so she could cover the payments and protect her life savings.
The presence and the departure of boarders
[24] During 2008, while Ms Clift had exclusive possession, she had a tenant. That tenant was evicted by Mr Duval on 30 January 2009, on the ground that he was concerned that crimes of incest were being committed on the premises. When Ms Clift moved back into the property in September 2009 as a tenant, there were three boarders in residence. They moved out very shortly after she moved in. There is a dispute between the plaintiff and the first defendant as to why they moved out. The first defendant’s explanation is that the three boarders were not informed that she was moving into the property and they did not want to share the house with her.
Mr Duval’s version is that she made it impossible for them to live there.
1 See [16] cl 2.3 above.
[25] There were few other boarders thereafter. One arrived in November 2009 and left in early December 2009. Another arrived on 1 December 2009 and was given notice to vacate by Mr Duval on 21 December 2009. A daughter and her mother arrived in January 2010, stayed one week having paid two weeks’ rent in advance. A friend of Mr Duval, Aleta Anderson, lived at the property between May and June 2010 and Mr Duval’s sister, Sharmane Campbell arrived in July 2010 and stayed for two weeks. Two women moved in in mid-February 2012 and left one week later.
[26] It is Mr Duval’s evidence that all these boarders left because they could not cope with living with Ms Clift. There was no evidence of Mr Duval seeking or obtaining any other boarders. However, it was Ms Clift’s evidence that the above list is not exhaustive and she was aware that other rent was paid to Mr Duval by boarders, some being there in 2009. In respect of the three tenants who moved out three weeks after she moved in, she said they were irritated with Mr Duval as he had told them she was temporarily moving into the garage (not being entitled to the master suite as per the amended psa).
Indisputable material facts
[27] The original agreement by the parties anticipated that Ms Clift’s share would be purchased by Mr Duval on 28 February 2010.2 It also envisaged that after that date Ms Clift might at any time require the property to be sold on the open market.3
The liability of Mr Duval to Ms Clift significantly increased as from 28 February
2010.4
[28] All of this is consistent with Mr Duval using his leaky home expertise to remedy the defects in the house so that it could be sold for a profit.
[29] The rent from the boarders or tenants, as they were also called, would have been the primary source of revenue to pay the interest on the mortgage. The house
operated as a boarding house. It follows that the occupants of the house did not have
2 Cl 5.1.
3 Cl 6.1.
4 Cl 5.7.
the same personal privacy as they would get if they were leasing a self-contained flat. Inevitably, that meant sharing their lives with other persons and so that arrangement, forcing strangers to live together who had not agreed to be flatmates, was conducive to unstable occupancy.
[30] Mr Duval admitted that he has not filed an income tax return for four years. He did not disclose any regular earnings of any significance. He agreed that at no time during the ownership of this property has he been able to afford to pay the interest on the mortgage. It follows, although he did not admit it, nor has he been able to afford to repair the building without bank finance. It is an indisputable fact that the building is a leaky building, as is recorded in the special terms of the sale and purchase agreement. Just how leaky is not clear. There are significant leaks. There are significant signs of ingress of water in various parts of the house, including cracks in the plaster above and around the front door.
[31] Contrary to both the original agreement for sharing the property and the varied agreement, Ms Clift – the only owner with a regular income – has been the co-owner in fact serving the mortgage.
The scheme to remedy the leaks
[32] In 2009 the parties borrowed two sums of $30,000 each. Jenine contends that the two National Bank loans of $30,000 each were entered into at the request of Mr Duval to finance the cost of remediating the defects causing the house to leak. Mr Duval did not significantly dispute that proposition. Apart from a purchase of one door and two pails of paint, there is no evidence that he used any amount of those funds to repair the house. There were some efforts by him to paint over and seal the cracks appearing in the plaster as an interim measure. He says this interim measure was itself thwarted because Ms Clift did not agree with the colour.
[33] In the variation agreed Mr Duval agreed these loans were his responsibility:
Additional National Bank loans (2 x $30,000.00)
4.1 It is acknowledged that both parties are jointly and severally liable to
National Bank of New Zealand for the additional two loans of
$30,000 subsequent to the original purchase of 10 Paris Place. The
principal and interest instalments on these loans will be paid from the joint bank account. Subject to Jenine meeting her responsibilities to pay rent and to make up the rent of any boarder who vacates (refer variation schedule page 1) Bill will ensure that there are sufficient funds in the joint account to cover the principal and interest instalments on these two loans. Bill will then pay off the balance owing on the loans when he completes the purchase of Jenine’s interest in the property.
[34] I find the two loans of $30,000 were taken in order to repair the house, which was Mr Duval’s responsibility. The original agreement for sale and purchase and the original variation of property deed is explicable on the basis that Mr Duval’s reason for being a property owner with Ms Clift was his ability to remediate the building as part of the bargain. It was he who was going to reap the profit on the resale, subject to reimbursement of Ms Clift, she making a profit of $40,000, not taking into account the interests she paid for one year.
Correct interpretation of the two agreements, as to who owned the property
[35] Both Mr Duval and Ms Clift are the registered proprietors of the property. By cl 5.1 of the psa, the parties had agreed that Mr Duval would purchase from Ms Clift all her right and interest in the property. It follows that at the time of purchase Mr Duval had an equitable interest in the whole of the property, sharing a joint legal interest in the property with Ms Clift. Equitable interest is an interest recognised in the law of equity. It does not create a property interest “in contract”. In contract Mr Duval incurred a legal obligation to purchase Jenine’s share. He acquired no property rights in contract or in the common law of property by reason of assuming that obligation.
[36] But in the variation of the psa there is cl 4 set out in [18] above, which I
repeat:
4Clift understands that Bill Duval is the sole proprietor/owner of the property in equity and contract but that she has a substantial financial interest and ownership rights in the property along with the mortgagee bank.
[37] From the time of entering into the agreement for sale and purchase, Mr Duval has consistently believed that he was the sole owner of the property. He is not expressed to be such in the original psa.
[38] Deeds are construed so as to give effect to all of the terms in the deed. All words are assumed to have a function and not to be inconsistent.
[39] Mr Duval argued that cl 4 was intended to reflect more accurately the agreement between himself and Ms Clift whereby he was the sole owner of the property. He argued that the reference to her ownership rights in the property, appearing in the same clause, in the same sentence, confined her ownership rights to those also enjoyed by the mortgagee bank, namely her rights as the creditor, vis-a-vis herself and Mr Duval, that she ultimately had the ability to enforce the financial obligation he owed to her to purchase her interest.
[40] The policy of common law and equity is to lean in favour of reconciling all terms in agreements, and is against construing documents to take away property rights. There is no doubt at all that prior to cl 4 of the variation of the psa, at law Mr Duval and Ms Clift were joint proprietors of the property in law and that Mr Duval had an equitable interest in the whole of the property vis-à-vis Ms Clift by reason of his obligation to buy out her share. In contract there is no basis for describing Mr Duval as the sole proprietor or owner of the property. As well as cl 4, the variation of the psa also contains cl 2 of the variation schedule:
2In return Jenine Clift agrees to extend the date for completing purchase for Bill Duval to 28 February 2013. All other conditions in original psa remain the same. (Emphasis added.)
[41] The second sentence of cl 2 preserves all the other conditions in the original property sharing agreement. Therefore cl 2 and cl 4 of the variation of the psa have to be read as consistent with the original psa. That assumption is only departed from when it is impossible to reconcile one clause with another. Clause 5.1 of the original psa refers to Ms Clift’s “right and interest in the property”:
5.0 Purchase by Bill
5.1It is agreed that Bill will purchase from Jenine all her right and interest in the property (the purchase) and will complete the purchase not later than 28 February 2010.
Therefore the term “ownership rights” in cl 4 of the variation schedule of the varied psa includes “her right and interest in the property”.
[42] At common law Mr Duval and Ms Clift, as joint proprietors, did not have independent power to sell the property. The property simply could not be sold without both of their signatures on a memorandum of transfer. In the original psa, there is cl 4.0 which I repeat here:
4.0 No sale, lease or charging without consent.
4.1Neither party will, without the prior written consent of the other, sell, transfer, dispose of, mortgage or charge, his or her interest in the property or any share or part of that interest.
4.2Neither party will, without the prior written consent of the other, grant a lease or tenancy of the property or licence to occupy the property or any part thereof.
[43] Mr Duval argued that under the psa, he had the ability to commence the process of sale choosing, for example, the real estate agent, without the consent or even any notice to Ms Clift.
[44] Clause 4.1 of the original psa distinguishes “sale” from “transfer”. To read cl 4.1 as diminishing Ms Clift’s ability to sell at the expense of Mr Duval’s, is contrary to its plain language. The whole of cl 4, let alone 4.1 is, on the face of it, imposing equality on the parties, rather than giving one party greater power over the other as to sale, lease or charging. The context of the agreement reinforces the commonsense of this intention. A restrictive interpretation of cl 4 of the amended psa would enable Mr Duval to contend that he has the power unilaterally to decide when to sell the property and by whom.
[45] The law has long recognised that a decision when to sell the property is a material incident of a right of ownership of a property. Mortgagees exercising a power of sale are given the right to choose the time of sale, whether or not that is in the interests of the registered proprietors. That is a qualification of the registered proprietor’s rights. Mr Duval did not cite any authority such as other cases construing similar clauses to the contrary.
[46] Clause 4 of the original psa sits alongside cl 5.5 The core of the psa was that Mr Duval would purchase from Ms Clift her interest no later than 28 February 2010, three years after the purchase. Clause 5 needs to be read alongside cl 6.1,6 under which the parties agreed that if Mr Duval did not complete the purchase by 28
February, Ms Clift “may at any time thereafter require the property to be sold on the open market”. That clause gave her the unilateral right to choose the time of sale. No such express power is given to Mr Duval anywhere in the psa, nor in the variation of the psa.
[47] It follows that neither agreement gave Mr Duval, as distinct from Ms Clift, a unilateral right to require the property to be sold on the open market at any particular time.
[48] It follows that Mr Duval never had the right unilaterally to decide when the property would be sold. On the contrary, it was only Ms Clift who had that power, which accrued only after 28 February 2010, upon the default of Mr Duval.
[49] This interpretation is important because, as we will see, it is a significant part of Mr Duval’s claim that Ms Clift frustrated his efforts to sell the property using Harvey Real Estate, while he was employed by Harvey Real Estate.
Has Mr Duval proved that Ms Clift’s behaviour on the property caused the
losses he pleads in all his separate causes of action?
General considerations
[50] Mr Duval’s particular complaints about the behaviour of Ms Clift can be
divided into four categories:
(a) Her behaviour towards boarders.
(b)Her invasion of his privacy, and that of his partner/guest, while living in the property.
5 See [16] above.
6 See [16] above.
(c) Her disruption of his efforts to sell the property.
(d)Her anonymous complaints to his employers, Harvey Real Estate and possibly LJ Hooker.
[51] During the period of time that Ms Clift has resided in the house, there has not been any continuity of boarders and in recent years there have been no boarders at all.
[52] During the concurrent residency of Ms Clift and Mr Duval, they have behaved badly to each other in petty ways. The trial issue is as to the extent, and as to the serious nature or not of their conduct.
[53] There is no doubt Mr Duval believes and has believed for some time that his position as an agent for Harvey Real Estate, and later for LJ Hooker, was undermined by anonymous complaints about him made by Ms Clift.
[54] Mr Duval’s complaints about Ms Clift, in all these respects, depends on his evidence alone. He called no other witness. He had an opportunity to subpoena relevant managers of his employers over the period of time. He could have subpoenaed past boarders, assuming they could be traced. There was no evidence that he could not trace them.
[55] For want of corroboration, the case proceeded on a “he says, she says”
dispute which had many of the characteristics of a contested domestic proceeding.
[56] I have no doubt that from very early on, the relationship between Mr Duval and Ms Clift became dysfunctional and has continued to be so. That was clearly the belief of their church elders. A significant cause of the dysfunction was Mr Duval’s belief that he was the sole owner of the property, based in part upon his ongoing assumption that he would, in due course, buy Ms Clift out. This is an important but erroneous assumption, as explained above.
[57] Throughout the trial it became clear that Mr Duval is by nature an optimist and very self-confident. He thinks he is a very capable real estate agent, without
being able to give evidence as to ever having made any significant sales of property. He believes he has significant skills as a leaky home consultant, without providing any concrete examples of his experience.
[58] I have no doubt that he genuinely believes that if he could have put enough boarders into the property, he could have raised rents which would have enabled him to meet his obligations to pay the interest on the loans. That said, there is no evidence that he ever used any of the rental income to make any interest payment on the loans. There is some evidence that he must have received some rental income. There is clear evidence that his own income was small and was insufficient to sustain his cost of living expenses, let alone meet the interest on the mortgage on the three loans. Over the last four years Mr Duval has not filed income tax returns.
[59] On judging the issues of fact, the Court has been confronted by Mr Duval’s very optimistic projections of how the property could be tenanted with boarders, while property owners also lived in the house. Second, there was no clear evidence from Mr Duval as to how the house was to be repaired. Clearly there was no prospect of suing the vendors in the light of the special conditions of sale. There was no coherent argument that the Auckland Council could be sued, the only evidence in that respect being that the cause of action against the Council, was treated as abandoned by the Watertight Homes Tribunal. There was no evidence as to how the remediation work could be completed within the sum of $60,000 drawn down by the two loans. And, on the contrary, it was clear that these funds were spent by Mr Duval on personal expenditure, except for the purchase of a door and possibly two pails of paint.
[60] Mr Duval’s optimism carries over into the scale of the claim for damages set out above. As I have already had occasion to mention, there is no proof of any history of significant sales during his employment as a real estate agent. Mr Duval admitted two sales and claimed that he facilitated however many others. There is no proven history of any prior income as a result of his leaky home consultancy history. He worked as an intern or law clerk for Sorensons, but there was no proof of that income. There was no proof of any prior income from the Chairmanship of Tarawa
Whanau Trust. Yet, in defamation claims against Ms Clift, he seeks respectively
$540,000, $650,000 and $500,000 in respect of these three items.
[61] As to the defamation damages, during the hearing Mr Duval asked the Court to assume that senior persons in his church would disseminate personal sensitive material to all 4,000 church members under their pastoral care. And, likewise, that Harvey Real Estate would have widely reported anonymous phone calls to their staff.
[62] As previously noted, he also seeks $400,000 for lost profit upon selling the property. He claims $100,000 for the anticipated cost of house repairs without any detail as to how that sum is made up and, contrary to the two borrowings of $30,000 each, none of which was spent on the property.
[63] The lack of any support for these figures reinforces what I call his optimistic character and self-confidence in what he would have achieved, but for the interference of the first and third defendants. He believes he has suffered these losses, but has not proved his case.
[64] As I endeavoured to explain to Mr Duval on a number of occasions during the trial, issues in civil trials are decided on the balance of probabilities. In respect of all these allegations and claims for losses, the burden of proof was on him. He had to prove as more probable than not that the conduct and the consequences of the conduct of Ms Clift and Mr Bennison made it more probable than not that he suffered these damages.
[65] Had there been a specific claim, for example, for loss of rent paid by the three boarders who left after Ms Clift joined, coupled with efforts to replace them and new arrangements to make sure they were comfortable with Ms Clift as a co-inhabitee of the house, one can envisage the Court scrutinising with more sympathy the argument that Ms Clift had caused Mr Duval some losses by reason of her difficulty as a fellow boarder in the house. But there was no such evidence and no such modest claim.
[66] The particular events that Mr Duval relied upon occurred over short periods of time in 2008 and 2009. We are now in 2014. Over the last few years there appears to have been a stalemate where, with both Mr Duval and his guest, Ms Anderson, and Ms Clift being the only occupiers of the house.
[67] I turn to the individual claims.
First defendant’s breach of plaintiff ’s right of exclusive possession of 10 Paris
Place
[68] This is a pleading that Ms Clift disturbed Mr Duval’s right to exclusive
possession of 10 Paris Place under the original property sharing agreement from late
2009. The only boarder he refers to is Ms R Yamada. The pleadings generally refer to other boarders in the midst of allegations that Ms Clift returned to the property and unsettled them, without naming any individual boarder. The pleading refers to Ms Clift requesting to move back to the property on 13 September without referring to Mr Duval’s non-payment of the bank loans and there are general allegations that upon her return, the boarders moved out. We know from the evidence that those were the three boarders discussed above. Then, without any particularisation, comes the claim that “the plaintiff has suffered the loss of approximately $80,000 rental otherwise payable by the first defendant for herself from the tenants who had vacated the property”.
[69] There is simply no effort to justify that claim either in the pleadings by particulars, nor in the evidence of Mr Duval. The Court has not attempted, and cannot attempt to form a judgment on the probabilities as to even a fraction of that loss. If the Court did, the Court would then have to offset the cost to Ms Clift of funding the loan payments after the loan went into default during the same period due to the plaintiff not meeting his obligations.
[70] This claim fails.
First defendant’s obstruction of plaintiff ’s attempts to repair the house
[71] This pleading contends that Mr Duval relied on assurances made by the vendors that the building had been repaired and did not leak, contrary to the express terms of the agreement. It then pleads that Mr Duval undertook various ongoing repairs to mitigate damage beginning in April 2008 and continuing into April 2011. No particulars are provided. It relies on para 1(h) of the schedule of the variation of the psa signed in September 2009 providing no construction repairs be done to the property without the express authorisation of Mr Duval. He complains Ms Clift installed locks blocking access to the top third floor level, denying access to an important area for ongoing maintenance, and pleaded generally, without particulars, that Mr Duval had been unable to inspect all of the property. He then assumes that there is an inability to repair the property.
[72] Mr Duval pleads it is premature to calculate the cost of the additional work.
[73] These pleadings have to be considered alongside the original purpose for this joint venture. The contribution that the plaintiff was bringing to it was his expertise as a leaky homes consultant, not any funds.
[74] The claim proceeds with an assumption, not established by any particulars, that the want of repair of the property is entirely the fault of the first defendant. Then, having pleaded it is premature to calculate the cost of the additional work, it contends it is likely to be in the vicinity of $100,000, there having been two previous borrowings of $30,000 each.
[75] Again, this claim fails because it has not proved any material particular, let alone a cost on the balance of probabilities. It is inherently counter intuitive. It alleges conduct contrary to the economic interest of Ms Clift. She has now been locked into ownership of this property for nearly seven years, during which it has deteriorated, during which she has funded the borrowings, during which she has received no financial contribution from Mr Duval contrary to the agreements, and during which the property has likely deteriorated further. Why would she want to frustrate the repairs? This cause of action fails.
First defendant’s obstruction of the plaintiff ’s attempts to sell the property
[76] I have already found that Mr Duval never had the exclusive right to control the sale of the property. On the contrary, the sale remained a joint power of the two property owners. Independent of that finding, there was in fact very little attempt by the plaintiff to sell the property. On 7 May 2009 he listed it on Trade Me for
$620,000. It needs to be kept in mind that it was purchased two years before for a much lower sum, at what was then generally regarded to be the peak of the market. He also says that during the Rugby World Cup he listed it for sale at $1.2m, hoping to interest overseas visitors. There was no evidence that Mr Duval ever discussed constructively with Ms Clift the sale of the property. He elected to retain Harvey’s Real Estate for whom he worked, against her wish.
[77] The sale of this property, a leaky home, is and was always going to be a difficult exercise if it was sold before being repaired. The bargain that Ms Clift entered into had, as its primary purpose, her rights being purchased promptly by Mr Duval by 28 February 2010. That gave him three years to repair the house, in order to sell it at a good profit. The plaintiff, again, has not pleaded particulars which justify the contention that the first defendant has obstructed bona fide and valid attempts to sale on his part, let alone justify a loss of an estimated $400,000. On his own figures, that assumes that he would have sold the property after repair. But in fact, on his own evidence, he was endeavouring to sell the property prior to repair. He is claiming against Ms Clift obstruction of those sales but also seeks damages on the assumption the property would be repaired before it was put on the market. The claim is incoherent and fails.
First defendant’s breaches of the property agreement
[78] This pleads a number of complaints: Ms Clift, as a mental health nurse, counselling a boarder who Mr Duval contended had an ongoing incest problem, despite his opposition to this; that Ms Clift had not paid rent for herself; that she had not paid rent for absent tenants; that she made statements to undermine his professional credibility; that she caused damage and destruction of the property; that she endeavoured to repair the property herself and prevented Mr Duval from
repairing the property. Mr Duval seeks general damages for mental pain and anguish of $25,000.
[79] Given the context whereby Mr Duval was in default of paying interest on all of the loans and failing to repair the property himself, this claim is disassociated from reality. Mr Duval has not proved that Ms Clift’s conduct prevented his ability to repair the house. It has no merit and is dismissed.
The first defendant’s harassment of the plaintiff
[80] The claim begins with this particular:
The first defendant has filed three separate law suits against the plaintiff, made numerous false police complaints, and changed legal counsel five times.
[81] This is the first of ten particulars. A significant number of particulars are complaints about the visit of two members of the Mormon Church, the pleadings being that they arrived because they were incited to come by Ms Clift and were attempting to give mental health counselling “for what she claimed were his sins”.
[82] There is no doubt that the relationship between the plaintiff and the defendant was completely dysfunctional. There were numerous incidents of petty behaviour on both sides. But there is no basis for the general damages for mental pain and anguish of $50,000. Mr Duval’s complaints for Ms Clift’s behaviour have to be evaluated against the indisputable context that he was in breach of his financial responsibilities under the agreement which rapidly, within twelve months let alone for seven years, has become an ongoing disaster for Ms Clift. This claim fails.
First defendant’s breach of the plaintiff ’s right to privacy
[83] This claim centres on an incident when the first defendant was taking pictures
of the interior of the plaintiff’s bedroom.
[84] The exhibits before this Court include the plaintiff taking photographs of the defendant and the defendant taking photographs of the plaintiff. Neither wanted photographs taken of the other. Both sides were guilty of irrational and emotive
behaviour. The facts of this case are far removed from those in the decision of C v Holland.7 The correct perspective to examine this behaviour is in the context of the whole of the dysfunctional relationship between these two parties, including particularly their respective frustration and dissatisfaction with the bargain which has locked them together, irretrievably at present, in common possession of a house they both want sold. The tort of intrusion or breach of privacy has never been applied to
such a set of facts. It is a tort more applicable to unwanted intrusion between strangers.
[85] The evidence that the first defendant has been caught looking through a hole cut for light fittings in the second floor bathroom ceiling is inconclusive and certainly does not justify the allegation that she was endeavouring to peer into the bathroom when the plaintiff was having a shower. (There was an ongoing lighting issue.) This claim fails for want of merit, particularly for want of proof, for a lack of sufficient seriousness and for the need to take into account the mutual dysfunctional behaviour of each party to the other.
First defendant’s physical and psychological violence
[86] The first particular relates to a contention that Ms Clift had fights with her roommate. I put that to one side as it does not disclose any cause of action justifying a judgment in favour of Mr Duval. The second one relates to an occasion when Mr Duval and Ms Clift had a meal together. I prefer Ms Clift’s evidence that that was a rare occasion of some degree of civility between them. The third refers to a row which occurred when Mr Duval was in his studio talking to his girlfriend on his computer when an argument began. The police were called to that incident but did not lay any charges. Then there is an allegation that she has made numerous false complaints to the police. There are no significant particulars. There is no basis of proof of finding of facts on the balance of probabilities which would justify general
damages of $50,000 being sought. These claims are dismissed.
7 C v Holland [2012] NZHC 2155, [2012] 3 NZLR 672.
First defendant’s defamatory communications to family, clients and employers of the plaintiff
[87] This was a claim for a sum of $540,000 being damages for loss of real estate
agent’s commission and $650,000, a loss of leaky building consultancy fees and
$500,000 for loss of income and potential profits from chairmanship of the
Chairmanship of the Tarawa Whanau Trust.
[88] I have already made general findings leading to the inevitable conclusion that these claims are extravagant, that they simply have not been established. Adding to that, they include telling one boarder that the plaintiff could not be trusted and was mentally ill, complaining about an unknown woman calling a local real estate agent employed by Harvey’s. That woman was not called as a witness. The allegation was the unknown woman was the defendant. That was not proved on the balance of probabilities.
[89] The defamation centres upon three sets of complaints: the complaints of the first defendant to the North Shore Police; and the complaint about the first defendant writing to Harvey Real Estate complaining about the plaintiff listing the property for sale with their firm, advising that she had not agreed and asking to take the sign down. That was conduct I find to be lawful. Third, there is an allegation of repeated anonymous calls to the real estate agent complaining about Mr Duval.
[90] Mr Duval did not call any corroborating evidence from the police, nor from
Harvey Real Estate.
[91] There was an assertion that but for this conduct, he would have been making one sale a month, earning $9,000 per sale and would have earned $540,000. Similarly, he complains that Ms Clift’s conduct lowered him in the eyes of his professional community, resulting in the loss of leaky building consultancy fees which, based on $250 an hour at ten hours a week for five years, amounted to
$650,000. There is no evidence at all that he ever earned significant funds as a real estate agent or as a leaky building consultant. The logic is extremely tenuous. The damages claimed are not proven on the balance of probability.
[92] Mr Duval complained that this criticism of him, including criticism to his sister, affected his status within his family and cost him his position as head of land holdings for his whanau and being passed over in the leadership of a major Maori land claim. All of this is uncorroborated. He did not call his sister. He did not call any member of the Maori community to which he refers.
[93] These claims were not proved on the balance of probabilities. They are dismissed.
First defendant’s incest counselling in the community and at the property, placing others at risk
[94] This is another angle of Mr Duval’s contention of the plaintiff that one of the boarders was a victim of incest, that Ms Clift knew and that she should not have allowed the girl to stay on the property. The fact of incest is disputed by Ms Clift. None of this is proved on the balance of probabilities. I accept that this girl was, for a time, boarding at the property. The claim fails.
Conclusion in respect of claims against the first defendant
[95] All claims by Mr Duval against Ms Clift fail for want of corroboration, for want of particulars, for want of proof of the particulars on the balance of probabilities and for want of proof of damages, all on the balance of probabilities.
Plaintiff ’s complaints against the third defendant.
[96] There are two causes of action. The first is the claim of intrusion upon seclusion and the second is defamation.
[97] The third defendant is a successful businessman and senior member of The Church of Latter Day Saints. In December 2011, he was appointed to the Bishopric as counsellor to Bishop Stone, the Bishop of the State (or Diocese) within which Mr Duval and the Ms Clift were members of the church congregation.
[98] In 2009, the third defendant was assigned as Mr Duval’s “home teacher” and
met with him often in the latter part of 2009 and into 2010. As a home teacher his
responsibility was to care for his welfare – both spiritual and temporal. Home teaching is a worldwide practice of this church and is the primary vehicle through which the church caters to the needs of its members.
[99] Mr Bennison recorded that on at least one occasion Mr Duval told him he would not repair the house because he was concerned that Ms Clift would demand half his profits, claiming they were in a relationship. He also expressed a fear that she might phone his employer and claim he had mental health issues. Mr Bennison says that Ms Clift talked to him about her concerns and he heard her side of the story. He had concerns about the tense situation between them and wanted to help both. He made an enquiry to see whether or not his son could stay as a boarder. By early
2010, it became clear to him that Mr Duval was determined to pursue a case against Ms Clift in the High Court. From 2011, he has had a ministerial relationship with Ms Clift and, in that capacity, she has approached him on some of the issues that are discussed earlier in this judgment. There was a tornado on 3 May 2011, as a consequence of which two men from the church visited Ms Clift, only to be turned away by Mr Duval.
[100] In December 2012, Mr Bennison sent a “to whom it may concern” letter summarising the dispute to Bishop Stone, who was his immediate superior. He acknowledges that Bishop Stone was likely to have sent it on to President Higgins, he being the most senior local church authority. President Higgins already knew about the dysfunctional relationship between these two church members.
[101] There was no proof that this reasonably candid document was ever circulated among the church generally. It was Mr Bennison’s evidence that the church had a very sensitive and careful policy about the disclosure of private information beyond those who had spiritual and temporal responsibilities for particular church members.
[102] Against this context, which I accept, I turn then to Mr Duval’s claims against the Mr Bennison. The first and most significant claim is the defamation claim where Mr Duval seeks damages of $100,000 for the “to whom it may concern” letter. He pleads that it was widely published to the 100,000 members of the Mormon Church. Yet the only evidence of circulation of that letter was to Bishop Stone and probably
to President Higgins. I am satisfied that, in the circumstances, Mr Bennison having pastoral duties assigned to him, including participating in the temporal and spiritual welfare of Ms Clift, against a background where he had similar responsibilities in respect to of Mr Duval, had a qualified privilege in reporting to his Bishop what he was doing and his assessment.
[103] Similar communications are made in many Christian chuches and non- Christian institutions throughout the world. There is absolutely no evidence of any circulation beyond Bishop Stone and probably President Higgins. There is no evidence of any damage being suffered by Mr Duval. This claim for defamation fails.
[104] The second cause of action is intrusion on seclusion. This was an argument that Mr Bennison had encouraged the two members of the Mormon Church who came on to the property after a cyclone to check on Ms Clift’s welfare. At best this is a claim of trespass. It rests on the fragile premise that Mr Duval is the sole owner of the property, which I have rejected. It also rests on the premise that this was a deliberate trespass. The claim has no merit at all and is dismissed.
General conclusion on the plaintiff ’s claims
[105] All the claims made by Mr Duval are without merit, have not been proved on the balance of probabilities, and have been dismissed.
The counterclaim
[106] I refer to [7], [8] and [9] of this judgment. Mr Duval has breached his obligation to purchase Ms Clift’s interest in the property by 28 February 2013, being the last date under the variation of the psa. He has conceded he does not have sufficient provable income in order to borrow money. He does not therefore have the ability to obtain finance to purchase Ms Clift’s interest in the property. He has no assets that he can sell to enable him to purchase Ms Clift’s interest in the property or, if he has, he has not disclosed them.
[107] He has failed to pay the rates, apart from two recent payments made to the
Auckland Council and the insurance.
[108] He has failed to pay mortgage loan payments and he has not paid any other contractual interest to Ms Clift, as required to post-28 February 2010. He has admitted he has borrowed an additional $5,000 from Ms Clift and interest on that loan is running at 10 per cent per annum.
[109] Ms Clift is entitled to call for the sale of the property at any time since
28 February 2010 by reason of cl 6 of the initial psa which has been amended as to the date and interest liabilities by the variation of the psa.8
[110] In the counterclaim, Ms Clift seeks to rely upon her rights in cl 6 of the psa and is asking the Court for a remedy akin to an order for specific performance against Mr Duval that the property be placed on the open market. These proceedings have been afoot since 2012. I am satisfied that cl 6.3 has been triggered as it is plain that for the past few years, right down and through the trial, Mr Duval has refused to place the property on the open market on terms acceptable to Ms Clift.
[111] Ms Clift seeks an order for immediate sale of the property and consequential orders to ensure that any proceeds of sale are allocated pursuant to the property sharing agreement as amended.
[112] Mr Duval claims can be seen broadly as his answer to the counterclaim. All his claims have failed. There is no immediate, let alone medium term, prospect that he is capable, let alone will, repair the house. Accordingly, Ms Clift is entitled to the remedies she seeks and may file an order for sealing computing her entitlements, with submissions in support justifying the calculations and sale arrangements limited to five pages. Mr Duval has leave to file a reply, limited to critiquing the
calculations, of five pages, within five working days of being served.9
8 See cls 2 and 3 set out in [17] above.
9 See r 11.2(d).
[113] Careful attention needs to be paid by both parties to the arrangements for sale of the house, so that any sale will be completed by Mr Duval or his attorney as one of the transferors. This Court has power to grant complete control to Ms Clift.10
[114] The availability of other remedies is reserved.
[115] Both Ms Clift and Mr Bennison are entitled to costs on a 2B basis. Costs will be settled by the defendants filing an application for costs of no more than five pages within five working days. Mr Duval is entitled to file submissions in reply of no
more than five pages.
10 See High Court Rules, rr 11.20 and 11.22, particularly 11.22(4).
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