Johnstone v Johnstone - [2018] NZHC 1541

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-241

[2018] NZHC 1541

BETWEEN
JACQUELINE JOHNSTONE

Plaintiff

AND

JAMES STEWART JOHNSTONE

Defendant

Hearing: 25 June 2018

Appearances:

A Ho for the Plaintiff

N Taefi for the Defendant

Judgment:

25 June 2018

ORAL JUDGMENT OF ASSOCIATE JUDGE R M BELL

Solicitors:
Martelli McKegg (A Ho), Auckland, for the plaintiff Glaister Ennor (M Robertson), Auckland, for the defendant Copy for:
Nura Taefi, Auckland, for the defendant

JOHNSTONE v JOHNSTONE [2018] NZHC 1541 [25 June 2018]

[1] On 9 February 2017, Mr and Mrs Johnstone made an agreement under s 21A of the Property (Relationships) Act 1976. Under the agreement Mr Johnstone was to pay Mrs Johnstone $1,100,000.00 within one calendar month of settlement of the sale of shares or the business of a company, in which he had an interest, or no later than 12 months from the date of the agreement, whichever occurred first. There has been no sale of the shares or the business. As 12 months have passed since the agreement, Mrs Johnstone seeks payment. She sues for the $1,100,000 and applies for summary judgment. In opposition, Mr Johnstone says that it was an implied term of the agreement that he would not be required to pay until the shares were sold; he is entitled to relief on the ground of contractual mistake; and (a matter that was raised late) the agreement should be set aside as giving rise to serious injustice under s 21J of the Property (Relationships) Act 1976.

[2] Mr and Mrs Johnstone began a de facto relationship in January 1997. While they had children from earlier relationships there are no children of this relationship. They married in March 2007 and they separated in June 2015. On 22 August 2016, they made an interim relationship property agreement. That was also a separation agreement. Under the interim agreement Mr Johnstone paid out Mrs Johnstone for an interest in a property at Hahei. They made a final agreement settling the division of relationship property on 9 February 2017, after taking part in a private mediation.

[3]The agreement of 9 February 2017 includes these provisions:

2.This agreement, together with the interim agreement dated 22 August 2016 (copy attached as document A) shall constitute a full and final settlement as between them and shall also be a full and final settlement of any claim of any kind that Jacqui may have otherwise been able to pursue as against the Johnstone Family Trust (the Trust) or against any property owned by such trust.

3.Following a private mediation held on 9 February 2017 the parties have reached agreement that Jim and/or the Johnstone Family Trust will pay to Jacqui the sum of one million and one hundred thousand dollars ($1,100,000) in full and final settlement of any relationship property claim Jacqui has intimated or could have otherwise made against Jim or the Trust (or any property owned by the Trust). Such payment…

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 Johnstone v Johnstone

Details

AGLC: Johnstone v Johnstone [2018] NZHC 1541
Case: [2018] NZHC 1541
Decision Date: 25 June 2018

CaseChat Overview and Summary

The case of Johnstone v Johnstone was heard in the High Court of New Zealand. Jacquiline Johnstone sued her former de facto spouse James Stewart Johnstone for payment of $1,100,000 under a property settlement agreement made on 9 February 2017. The agreement provided that payment was to be made either within 12 months of the agreement or one month after the sale of shares or the business of a company in which Mr Johnstone had an interest. Twelve months have passed since the agreement and there has been no sale of shares or business. Mrs Johnstone sought summary judgment and payment of the amount due. Mr Johnstone opposed the application on various grounds, including that it was an implied term of the agreement that he would not be required to pay until the shares were sold, that there was a contractual mistake, and that the agreement should be set aside as giving rise to serious injustice under s 21J of the Property (Relationships) Act 1976.

The court found that the express terms of the agreement meant that an implied term could not be added. The court also found that Mr Johnstone's mistake was one of expectation and not a relevant mistake under the contractual mistakes legislation. The court further found that it was not reasonably arguable that the agreement may be set aside for serious injustice under s 21J of the Property (Relationships) Act. The court held that the parties had wished to achieve certainty as to the status, ownership, and division of property by entering into the agreement and that the agreement was not unfair or unreasonable in the light of all the circumstances at the time it was made. The court dismissed the application for stay of the proceeding and entered judgment in Mrs Johnstone's favour for $1,100,000.00, with interest under the agreement and costs.

Orders