Johnston v Johnston - [2021] NZHC 96

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-1429

[2021] NZHC 96

UNDER the Property (Relationships) Act 1976 and the Family Proceedings Act 1980

BETWEEN

ULRIKE URSULA JOHNSTON

Plaintiff

AND

JAMES CHRISTOPHER JOHNSTON

First Defendant

JOHN WILSON HART, JAMES CHRISTOPHER JOHNSTON AND MASY TRUSTEES LIMITED AS TRUSTEES OF THE MASY TRUST

Second Defendant

Continued over

Hearing: On the papers

Counsel:

K G Davenport QC and A M Cameron for Plaintiff

J W A Johnson and N G Lawrence for Third and Fourth Defendants

Judgment:

4 February 2021

JUDGMENT OF PETERS J

This judgment was delivered by Justice Peters on 4 February 2021 at 4 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date: ...................................

JOHNSTON v JOHNSTON [2021] NZHC 96 [4 February 2021]

AND
THOMAS RUFUS JOHNSTON, RUFUS

LIND JOHNSTON AND COOK ISLANDS TRUST LIMITED AS TRUSTEES OF THE JCJ TRUST

Third Defendants

THOMAS RUFUS JOHNSTON AND JAMES CHRISTOPHER JOHNSTON AS TRUSTEES OF THE NEW ZEALAND TRUST

Fourth Defendants

Solicitors: K3 Legal Ltd, Auckland
Wynn Williams, Auckland

Counsel: K G Davenport QC, Auckland
A M Cameron, Auckland J W A Johnson, Auckland N G Lawrence, Auckland

Introduction

[1] On 27 August 2020, I dismissed applications by the third and fourth defendants, being the trustees of the JCJ and New Zealand trusts respectively, to rescind an order made in July 2019 pursuant to s 43(1) Property (Relationships) Act 1976 (“applications”, “trustees”, “order” and “PRA”).1 The order, made without notice, restrained any disposition of 12 x 1 kilogram gold bars (“bars”) held in a safety deposit box in Auckland, and estimated to be worth approximately $1.2 million in total.

[2] The trustees seek leave to appeal my judgment. The application for leave is made pursuant to s 56(3) Senior Courts Act 2016.

Background

[3] The plaintiff, Mrs Johnston, and the first defendant, Dr Johnston, are in litigation here and in Texas relating to the division of relationship property.

[4] Dr Johnston is also one of the fourth defendants, along with his brother, Mr Thomas Johnston. Mr Thomas Johnston is also one of the third defendants, along with a Cook Islands trust company, and Mr Rufus Johnston, Mr Thomas Johnston’s and Dr Johnston’s father.

[5] There is a dispute between Mrs and Dr Johnston as to which, if any, assets are or derive from relationship property. On Mrs Johnston’s view of it, the relationship property includes real property in New Zealand, a home in Texas, cash at bank here and abroad, chattels, and gold bars, including those in issue before me and others said to be in Switzerland.

[6] When Mrs Johnston obtained the order, she also obtained an order freezing the proceeds of several bank accounts and lodged notices of claim under the PRA against the certificates of title to the property in New Zealand.

1 Johnston v Johnston [2020] NZHC 2197.

[7] Mrs Johnston and Dr Johnston were able to resolve matters in respect of the…

Grounds of appeal

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

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

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

Consideration

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

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

Continue reading Johnston v Johnston

Details

AGLC: Johnston v Johnston [2021] NZHC 96
Case: [2021] NZHC 96
Decision Date: 4 February 2021

CaseChat Overview and Summary

Johnston v Johnston is a case concerning the interpretation and application of the Property (Relationships) Act 1976 and the Family Proceedings Act 1980. The plaintiff, Ulrike Ursula Johnston, filed an application to restrain the disposition of 12 x 1 kilogram gold bars held in a safety deposit box in Auckland, estimated to be worth approximately $1.2 million in total. The first defendant, Dr James Christopher Johnston, and the trustees of the MASY Trust and JCJ Trust sought leave to appeal the dismissal of their applications to rescind the order. The primary legal issue the court had to decide was whether the judge made an error of law or fact in dismissing the applications to rescind the order. The court also had to consider whether the application for leave to appeal met the criteria for such applications.

The court held that there was no arguable error of law in construing the words "in order to defeat the claim or rights of any other person" in s 43(1) PRA. The court found that the requirement for an actual intention to defeat was not necessary and that awareness or knowledge of the effect was sufficient. Although the court admitted to making some errors of fact, they were not of general or public importance or of sufficient importance to the trustees to warrant an appeal. The court further held that an appeal would delay the resolution of the wider litigation between the parties and increase the overall cost of resolution. The court declined leave to appeal, and the trustees were ordered to pay Mrs Johnston's costs and disbursements on the application.

Orders