Johnston v Johnston - [2020] NZHC 2197

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-1429

[2020] NZHC 2197

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

BETWEEN

ULRIKE URSULA JOHNSTON

Applicant

AND

JAMES CHRISTOPHER JOHNSTON

First Respondent

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

Second Respondents

Continued over

Hearing: 3 March 2020

Appearances:

K G Davenport QC and A M Cameron for Applicant

J W A Johnson and J J Anson-Holland for Third and Fourth Respondents

Judgment:

27 August 2020

JUDGMENT OF PETERS J

This judgment was delivered by Justice Peters on 27 August 2020 at 2 pm pursuant to r 11.5 of the High Court Rules

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

JOHNSTON v JOHNSTON [2020] NZHC 2197 [27 August 2020]

AND
THOMAS RUFUS JOHNSTON, RUFUS

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

Third Respondents

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

TRUST

Fourth Respondents

Solicitors: K3 Legal Limited, Auckland
Wynn Williams, Auckland

Counsel: K G Davenport QC, Auckland
A M Cameron, Auckland

[1] This judgment determines applications by the third and fourth defendants to rescind an order made by Downs J on 17 July 2019.1

Background

[2] The plaintiff and first defendant, Mrs Johnston and Dr Johnston, separated in 2018. In June 2019, Mrs Johnston commenced proceedings in the Family Court at Auckland, seeking orders under the Property (Relationships) Act 1976 (“PRA”). Dr Johnston has equivalent proceedings on foot in Texas, in the United States, where he lives with the couple’s children.

[3] The other defendants are trustees of various trusts associated with the couple or at least with Dr Johnston. Despite some initial uncertainty, it seems reasonably clear those now named as the third and fourth defendants are the trustees of the JCJ Trust and New Zealand Trust respectively and that there is no “Masy Trust”. Each of Dr Johnston and Mr John Hart has sworn an affidavit to the latter effect. Mr Thomas Johnston is Dr Johnston’s brother and Mr Rufus Johnston his father.

[4] The trust deeds are not before the Court so quite who are the beneficiaries of each trust is unknown.

[5] Dr Johnston and the third and fourth defendants protest the jurisdiction of the Court. Mrs Johnston has applied to set aside these protests.

Orders of 17 July 2019

[6] On 28 June and 3 July 2019 respectively, Mrs Johnston applied, without notice, to the Family Court for orders pursuant to s 43 PRA to restrain the disposition of, first, funds in bank accounts and other investments in New Zealand and overseas and, secondly, gold bars, and other gold (if any) stored at an institution in Switzerland. At Mrs Johnston’s request, the Family Court transferred the proceedings to the High Court on 17 July 2019. Downs J made the orders sought the same day.

1 J v J [2019] NZHC 1674.

[7] Thereafter Dr Johnston,…

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 [2020] NZHC 2197
Case: [2020] NZHC 2197
Decision Date: 27 August 2020

CaseChat Overview and Summary

The High Court of New Zealand recently handed down its judgment in Johnston v Johnston, a case involving a property dispute between former spouses, Ulrike Ursula Johnston and James Christopher Johnston. The case revolves around a series of orders made by the court to restrain the disposition of certain assets, including gold bars, following the couple's separation in 2018. The third and fourth defendants, trustees of trusts associated with the parties, sought to rescind these orders, arguing that the court lacked jurisdiction and that the orders were made in error. The primary legal issue before the court was whether the orders made under section 43 of the Property (Relationships) Act 1976 were justified and should be maintained.

Justice Peters, who delivered the judgment, examined the evidence regarding the ownership and disposition of the gold bars, considering the changing accounts provided by Dr Johnston. The court also evaluated the potential impact of orders made in Texas, where Dr Johnston resides, and whether they could bind the trustees of the trusts in question. Ultimately, the court found that there was sufficient evidence to infer that a disposition of the gold bars might occur, which could defeat Mrs Johnston's claims under the Act. Given the significant concerns about the potential for asset dissipation and the lack of clarity surrounding ownership, the court decided not to rescind the orders made by Downs J. The court also noted a proposal made by the trustees to resolve the matter through independent verification of the gold bars, but this did not result in an agreement among the parties.

In conclusion, Justice Peters dismissed the application to rescind the orders, allowing them to remain in effect. The court reserved the right to revisit the matter if necessary, particularly in light of any outcome from the application to set aside the protests to jurisdiction. The decision underscores the court's vigilance in preventing the dissipation of assets in the context of relationship property disputes.

Orders