Jones v Jones HC Auckland CIV 2010-404-1742

[2010] NZHC 1525

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2010-404-001742

BETWEEN  CORINNA BETTY JONES Plaintiff

ANDPHILIP RONALD JONES Defendant

Hearing:         6 August 2010

Appearances: C F Allen for the Plaintiff

G Harrison for the Defendant

Judgment:      6 August 2010

JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

This judgment was delivered by me on

06.08.10 at 4:30pm, pursuant to

Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors/Counsel:

C Allen, Holland Beckett Solicitors, Tauranga – [email protected]

G Harrison, Barrister, Auckland –  [email protected]

P Ganda, Ganda & Associates, Auckland – [email protected]

CORINNA BETTY JONES V PHILIP RONALD JONES HC AK CIV 2010-404-001742  6 August 2010

[1]      The issues between the former wife and husband concern three relationship property  Agreements  entered  into  between  them.    They  were  married  on  12

December 2001.  Mr Jones is a US resident.  Mrs Jones describes herself as residing between Palmerston North, New Zealand and San Diego, United States of America. Mrs Jones says the parties separated in the beginning of August 2009, she says their separation was effective from 3 September 2009.   During their relationship they lived in a property at 68 Taipan Place, Alfriston.   The first two Agreements, (a Contracting Out Agreement dated 7 December 2001, and an Amended Contracting Out Agreement dated 7 April 2004) were completed in New Zealand.  The parties’ signatures were witnessed by separate lawyers each of whom certified they gave independent legal advice as to its terms and explained the effect and implications of the Agreement prior to it being signed.

[2]      The third Agreement was a Settlement Agreement dated 18 December 2009. It was signed by both parties but signatures were not witnessed or certified in the manner of the two Contracting Out Agreements completed in New Zealand.

[3]      Mr Jones claims the Settlement Agreement purported to make provision for the status, ownership and division of the parties’ respective property and in particular to discharge the rights and obligations provided for in the Amended Contracting Out Agreement.   Mrs Jones claims the Settlement Agreement was void and legally unenforceable pursuant to s 21F of the Property (Relationships) Act 1976 (the Act).

[4]      Mrs Jones applies for summary judgment in the sum of $421,857.25.   She says that is the amount she is entitled to pursuant to the provisions of the Amended Contracting Out Agreement.  Alternatively Mrs Jones seeks judgment for liability be entered against Mr Jones and for quantum to be reserved for a further hearing.

[5]      At the core of the two Contracting Out Agreements is an Agreement  to provide payment of a compensation sum to Mrs Jones in lieu of her not having a registered interest in the Taipan Place property in which they lived while residing in New Zealand.  The Settlement Agreement did not refer to a compensation sum.

[6]      Mr Jones asserts the Settlement Agreement was a valid Agreement according to recognised principles of contract law in that it unambiguously, and in writing, identifies the key elements that reflected the common intention of the parties to finally settle all issues between them after the end of their relationship.  Although the Agreement did not strictly comply with s 21F of the Act the Court is able to validate the Agreement in whole or in part by use of its discretionary powers contained in s

21H of the Act.   Mr Jones asserts this should occur because the Court can be satisfied that:

(a)Mrs  Jones  was  aware  of  her  rights  under  the  Contracting  Out Agreements before entering into negotiations, on her own initiative with Mr Jones over the October – December 2009 period;

(b)The terms of a Settlement Agreement were agreed to largely at Mrs Jones insistence, after three months of being legally represented in the USA by an attorney, and she was not under any emotional pressure to sign the Settlement Agreement;

(c)      The   Settlement   Agreement   is   a   binding   Agreement,   wherever measured;

(d)The Settlement Agreement was signed by Mr Jones in good faith and in reliance upon Mrs Jones wish that she wanted to settle on the terms set out;

(e)      Some of the terms of the Settlement Agreement have already been performed including the payment to Mrs Jones of US$10,000 immediately following the signing of the Settlement Agreement;

(f)It can be inferred that Mrs Jones would have signed the Settlement Agreement regardless of whether or not her signature had been witnessed or certified.

[7]      As to the quantum of Mrs Jones claims Mr Jones raises the following points to dispute the calculation of the compensation sum claimed to be due:

(a)      The  sum  does  not  reflect  the  current  value  of  the  Taipan  Place property which went for sale on March 2010 and did not sell;

(b)No formal  valuation  of  the  current  condition  of  the  property was undertaken;

(c)The Amended Contracting Out Agreement provides for Mrs Jones to receive 50 per cent of the net value of the property and Mrs Jones’ claim has not deducted current mortgages secured against it, which are substantial;

(d)The US$10,000 already paid to Mrs Jones has not been deducted from the amount claimed;

(e)Mrs Jones is due to account also for the rental Mr Jones has paid for her new apartment, for the payment of a car and the purchase of furniture, and as well in respect of a further payment of US$8,000 to her.

The Agreements

The Contracting Out Agreement

[8]      It was dated five days before the parties married.   Schedules attached to it described the property that was to remain the separate property of each.   The Agreement notes that it was a Contracting Out Agreement.   Any increase in the value, income or gains of separate property were acknowledged to be the property of the separate owner.   The Agreement was witnessed and certified by independent solicitors.   As well Mrs Jones completed a disclaimer recording that although she had been advised by her solicitor not to sign the Agreement she intended to do so nonetheless.

[9]      It recorded that the conditions and terms of the Contracting Out Agreement continued to apply subject to the amendments contained in the Amended Contracting Out Agreement.  In particular it noted the parties:

Wish to record their Agreement that the property that they reside in which is owned by the Taipan Trust is not relationship property and that no claim will be made against that property under the Property (Relationships) Act by either of them.

... as the home they currently live is not owned by either of them but by a trust and that the future homes that they live in are likely to be (sic) that same trust or by other trusts, there should be a mechanism to compensate Corinna for the absence of any interest in the family home in accordance with sections 8 and 11B of the Property (Relationships) Act 1976 and this Agreement.

...

‘Compensation for Absence of Family Home’

4Philip and Corinna agree that in compensation for the fact that no family home is currently owned by the parties and for the fact that they envisage that no family home will be owned by the parties during the relationship, Corinna shall be entitled to receive a sum of money in compensation for the value of their family home calculated as follows:

(a)     The house currently occupied by the parties at 68 Taipan Place, Alfriston, has been give a market value of $715,000.00.  It owes a mortgage of approximately $150,000.00 to ASB Bank a net equity of $565,000.00.

(b)     The parties agree that 50% of that net equity, being the sum of

$282,500.00 as at 18 July 2003, shall be the sum payable by

Philip to Corinna in terms of this clause as at 18 July 2003 (“the compensation sum”).

(c)     The value of the compensation sum shall be adjusted annually in accordance with any annual percentage increase or decrease in the median sell price for housing in the Auckland District as published by the Real Estate Institute of New Zealand or such reasonably comparable  statistics as  are available should that information not be available or not be published at the relevant time.

5Philip and Corinna agree that the compensation sum shall be payable to Corinna in the following events:

(a)     In   the   event   that   Philip  and   Corinna  separate  then  the compensation sum shall be payable to Corinna in full within 3 months of the date of separation.

(b)     In the event that Corinna Jones dies within 3 months after the date of separation then the compensation sum will be paid by Philip to the estate of Corinna Jones.

(c)     In the event that the compensation sum is not paid to Corinna within 3 months of the date of separation then Philip will pay interest on any sum outstanding at the rate of 12%.

(d)     In the event that Philip dies and Corinna elects to take, pursuant to what is currently option A in Section 61 of the Property (Relationships) Act 1976 or any equivalent section in any Act or Acts passed in substitution therefor then the provisions of this  Agreement  shall  apply and  Corinna  shall  be  entitled  to receive payment of the compensation sum within 3 months of her notifying Philip’s executors of her election.

Payment of Compensation Sum

6	Philip   (or   Philip’s  executors   should   Philip   be  dead)  shall   be responsible for payment of the compensation sum.  In the event that Philip (or his executors, should Philip be dead), are not in a financial position to pay the compensation sum to Corinna then Philip or his executors shall take reasonable steps to ensure that the trustee for the time being of the Taipan Trust, or other trust which owns the home lived in by the parties at the relevant time, pays the compensation to Corinna.
7	Corinna acknowledges that the terms of this Agreement are in full and final settlement of any claim that she may have in respect of relationship property and that she will bring no additional claims for compensation  against  Philip  or  against  any  trusts,  companies  or entities with which Philip is associated.
[10]	As	earlier  noted  this  Agreement  too  was  witnessed  and  certified	by

independent solicitors.

Settlement Agreement

[11]     It records:

This Agreement concludes all marital, financial and business matters past, present and future between the parties and shall be considered as full and final settlement of any and all matters between the parties relating to the marital, financial and business affairs of them personally, all their respective assets and any and all companies they may own, control, influence or have vested shareholdings or equity positions in.

1The dissolution of the marriage and any future action, litigation or disputes between the parties is to take place in New Zealand under New Zealand law as both parties are New Zealand Residents with a New Zealand Prenuptial Agreement with New Zealand children.  No legal action between the parties is to take place in the USA and any action commenced or contemplated in the USA must immediately cease.

4       Phil agrees:

a.      To not seek damages, costs, reparation or pursue further any action for the estimated $100,000 in damage that was caused by the email Corinna sent on the 9th December making statements about PIC.

b.      To  cover  all  Palazzo  costs  and  not  seek  damages,  costs  or reparation for the termination of Corrinas Apt Lease.

c.      To  take  ownership  of  all  debt  currently  on  Corinnas  New Zealand  Credit  Card  as  of  today’s  date  and  to  make  the minimum monthly payments on that debt until such time the balance can be paid by Phil.  The balance is to be paid in full by the 31st December 2010.

d.      To  account  and  pay  all  taxes  in  any  companies  Corinna participated in prior to the 30th October 2009.

e.      To pay Corinna the sum of $10,000 USD on signing of this Agreement and $1,000 USD a month for the next 15 months. Monthly $1,000 payments to start 30 days after the signing of this  Agreement  and  are  to  continue  for  the  15  consecutive months thereafter.

f.      To  make  no  negative  public  or  private  statements  about

Corinna.

g.      To make no Facebook comments or posts about Corinna at all and to remove any and all negative Facebook posts and videos / audio of Corinna.

h.      To sign over ownership and responsibility of all goods stored from the contents of Corinnas apartment on the date this Agreement is signed.

5       Corinna agrees:

a.      That   this   Agreement   supersedes   and   replaces   all   prior Agreements   between   the   parties   regarding   their   marital, personal  or  business  affairs  and  concludes  all  outstanding matters between the parties.

b.      That Corinna has no ownership, profit share, equity or right to derivate any type of payment, compensation or position form

any company, trust or entity that Phil currently or historically has ownership, an interest in, influences or controls.

c.      That Corinna has no ownership, profit share, equity or right to derivate any type of payment, compensation or position with the Presidential Inner Circle USA LLC and that she agrees to no longer   have   any   association   or   representation   with   that company.

d.      That  apart  from  the  terms  of  this  Agreement  that  no  other payments, ownership or transfer of assets is due to Corinna.

e.      That  Corinna  will  provide  Phil  with  open  and  unrestricted access to Jack and Cheinnelle.

f.      That Phil has no obligation to make any support or alimony payments  at  all  for  either  the  children  or  Corinna  in  any country.

g.      To make no negative public or private statements about Phil.

h.      To make no Facebook comments or posts about Phil at all and to remove any and all negative Facebook posts and videos / audio of Corinna.

i.       To  operate  one  Facebook  account  and  to  request  Facebook remove and delete the Corinna B Jones account.

j.       To write an email to all people she sent the PIC email on the 9th of December to advising “All matters are resolved between the parties   and   that   Corinna   has   chosen   to   pursue   other opportunities will not be having any further involvement with the Presidential Inner Circle which is now being satisfactorily guided by President Phil Jones”.  A copy of this email and the list of people it is to be sent to from the 9th December distribution list is to be sent to Phil within 24 hours of signing this Agreement.

6The parties also understand and acknowledge that they are each responsible for their own immigration Visa applications, that neither party is responsible for the other and that each party is being independently represented in this matter by Immigration Attorney Ron Rehling.

7That the terms and contents of this Agreement shall remain forever private and confidential between the parties and that this Agreement will not be discussed or disclosed to any other person apart from being absolutely legally necessary.

[13]     As earlier noted the Settlement Agreement was not witnessed or certified as is required by the Act.   That said, it is clear that the Settlement Agreement was concluded   in   the   conclusion   of   emailed   correspondent   between   attorneys representing the parties.  That correspondence describes points in issue between the

parties affecting reputation and business interests as well as, in general terms, some property.   In the outcome Mrs Jones signed the Settlement Agreement in circumstances from which the Court can infer she may have received legal advice about its terms.

Considerations

[14]     This case is about whether or not Mr Jones has no reasonable grounds of a defence.  Sometimes summary judgment is an appropriate procedure for seeking to enforce an Agreement made pursuant to s 21 of the Act but this case is not just about enforcing the provisions of such an Agreement, it concerns a claim that subsequent to the Agreement in question, they reached another Agreement.  Summary judgment is not about dismissing that other Agreement even if clearly that other Agreement does not comply with the requirements of s 21.  It is not in issue that the Settlement Agreement does not comply but that is not the end of the matter because s 21H provides that the Court may declare that an Agreement has effect if it is satisfied that the non compliance is not materially prejudice the interests of any party to the Agreement.  Further by s 21H a Court may make a declaration for that purpose.

[15]     The  argument  for  Mrs  Jones  is  that  a  Court  would  not  make  such  a declaration in this case.  Well it might be for a Court would be concerned about the significant downward change in the benefits Mrs Jones would receive by the terms of the Settlement Agreement.  The Court might consider that change to be materially prejudicial to Mrs Jone’s interests.  But, it seems to me there is more to it than that because in the lead up to the making of the Settlement Agreement, which Mr Jones prepared,  Mrs  Jones  was  in  receipt  of  legal  advice.    Although  details  between lawyers did not address a global settlement in relation to property, it did address property issues.

[16]     Mrs Jones now says she was under pressure to sign the Agreement.   That claim needs to be tested by evidence.  Also and significantly it is not disputed that Mrs  Jones  received  payments  of  cash  and  other  property  benefits  under  the Settlement Agreement.  The value of those, whatever that value is, may need to be

taken into account if Mrs Jones is successful in her claim for payment of a compensation sum.

[17]     Ms Allen argued that Mr Jones has had the opportunity to apply for the Settlement Agreement to be validated, but he has not availed himself of this.  That might be so but it does not follow that Mr Jones does not have an arguable defence.

[18]     In the balance I am persuaded the Court could not safely rule out Mr Jones’ defence without further evidence being heard, in particular relating to the circumstances of the making of the Settlement Agreement.   To ensure it is I am requiring Mr Jones to file an application for validation in the Auckland Family Court whereby the terms of section 22 any application must initially be filed.   Counsel agree that the hearing should take place in the Auckland Family Court.

Orders

1.The application for summary judgment is dismissed but costs are reserved to be determined in the resolution of the parties’ dispute.

2.By 3 September 2010 Mr Jones is to file his validation application together with any affidavits in support.

3.By 1 October 2010 Mrs Jones is to file her opposition and affidavits in opposition to that application.

4.       The High Court proceeding is adjourned to a chambers list in September

2010 for the purpose of review.  It may be that by the time of that call the parties would wish to consolidate the Family Court proceeding with the High Court proceeding.   An order for that purpose will have to be made by a Family Court Judge.

Associate Judge Christiansen