Kinder v Carter
[2018] NZHC 319
•5 March 2018
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2017-409-000679 [2018] NZHC 319
BETWEEN C A KINDER
Plaintiff
AND
P M CARTER Defendant
Hearing: 26 February 2018 Appearances:
P F Whiteside QC for Applicant (Defendant) S N van Bohemen for Respondent (Plaintiff)
Judgment:
5 March 2018
JUDGMENT OF ASSOCIATE JUDGE OSBORNE
on strike out application
Introduction
[1] The parties lived together in a de facto relationship until 16 October 2016. On
16 March 2016, they had entered a contracting out agreement (the agreement) under s 21 Property (Relationships) Act 1976 (the Act). It was the third such agreement between them. It is common ground that the agreement binds the parties.
[2] Since their separation, the parties have come to have a number of differences relating to property matters.
This proceeding
[3] The plaintiff, Cheryl Kinder, sues the defendant, Philip Carter, in relation to four property matters. By her statement of claim:
KINDER v CARTER [2018] NZHC 319 [5 March 2018]
(a) Ms Kinder seeks an order of specific performance requiring Mr Carter to execute an agreement document prepared for Ms Kinder and signed by her on 27 July 2017. This document is stated to be an agreement entered into pursuant to s 21A of the Act. It would deal with the other three components of Ms Kinder’s claims as pursued in this proceeding, namely funds held in a solicitor’s trust account representing:
(i) the proceeds of sale of the family home (clause 4.1);
(ii)the Porsche motor vehicle retained by Ms Kinder and funds held in the parties’s joint bank account (clauses 3.1 and 5.1); and
(iii) other family chattels (clause 3.1).
(b)Ms Kinder seeks an order that the family home sale proceeds held in the solicitor’s trust account be paid in equal shares to the parties;
(c) Ms Kinder seeks a setting off of what she asserts to be the value of property receipts of each party – $19,200 transferred by Mr Carter from the parties’s joint account to his personal account; $29,000 representing the value of the Porsche retained by Ms Kinder; and $873.02 representing the outgoings on the family home incurred by Ms Kinder while in exclusive occupation. Ms Kinder then seeks an order that the funds held in the parties’s joint bank accounts be paid equally to the parties subject to a deduction of $20,273.02 from Ms Kinder’s share and an increase of $20,273.02 to Mr Carter’s share.1
(d)Ms Kinder seeks an order that relationship property family chattels (defined in the agreement) be sold by public auction at the shared cost of the parties and that the net proceeds of sale be distributed to the
parties equally.
1 The adjustment of $20,273.02 identified in the Statement of Claim differs from the adjustment figure identified in Ms Kinder’s 27 July 2017 (s 21A) agreement document by reason of further adjustments brought into account by Ms Kinder.
The strike out application
[4] Mr Carter applies for orders striking out Ms Kinder’s statement of claim and dismissing the proceeding.
[5] Mr Carter invokes r 15.1(1)(d) High Court Rules which provides:
15.1 Dismissing or staying all or part of proceeding
(1) The court may strike out all or part of a pleading if it—
…
(d) is otherwise an abuse of the process of the court.
[6] The alleged abuse of process is explained in the application as follows:
(a) Ms Kinder’s claim is an abuse of the process of the High Court because it is essentially for orders under the Property (Relationships) Act 1976 and must be heard and determined in the Family Court;
(b) Even the Plaintiff’s first claim for specific performance involves consideration of the parties’ rights under the Property (Relationships) Act 1976 as a result of the further actions of parties since the March
2016 agreement was completed.
[7] Ms Kinder opposes the strike out application. She asserts:
(a) The Plaintiff seeks enforcement of the parties’ agreement … which is within the jurisdiction of this Court.
(b) The Plaintiff is not seeking orders for classification of property as relationship property or determination of shares in relationship property or division of relationship property (which orders are within the exclusive jurisdiction of the Family Court).
Striking out a claim – the principles
[8] High Court Rule 15.1 makes provision for orders striking out all or part of a pleading. In this case the defendant invokes r 15.1(1)(d) (abuse of the process of the court).
[9] I adopt the meaning of the “abuse of process” identified by Paterson J in Ghose v Ghose:2
2 Ghose v Ghose (1997) 12 PRNZ 149 (HC) at 152.
The term “abuse of process” means that the process of the Court must be used bona fide and properly and must not be abused.
[10] I adopt the following as principles applicable to the consideration of this application:
(a) The Court is to assume that the facts pleaded are true (unless they are entirely speculative and without foundation).
(b) The jurisdiction is to be exercised sparingly and only in clear cases.
(c) The jurisdiction is not excluded by the need to decide difficult questions of law, even if requiring extensive argument.
(d)The onus is on the defendant/applicant to establish that the process of this Court is being abused.3
The jurisdiction of the High Court
[11] For this Court’s jurisdiction over the subject-matter of the proceeding, Ms
Kinder relies on s 21L of the Act which reads:
21L Enforcement of agreements
(1) Remedies that, under any enactment or rule of law or of equity, are available for the enforcement of contracts may be used for the enforcement of agreements under section 21 or section 21A or section
21B.
(2) This section is subject to the provisions of this Part.
[12] I adopt the discussion of enforcement jurisdiction by Associate Judge Bell in
Edwards v Edwards where his Honour observed:4
[22] Courts exercising civil jurisdiction, the High Court and the District Court, have overlapping jurisdiction with the Family Court for the enforcement of agreements to divide property following the break-up of a
3 The defendant’s position might also have been asserted through a protest to jurisdiction under r 5.49 High Court Rules. In that event, the onus to establish that the Court does not have jurisdiction would equally have been on the defendant. See Andrew Beck and others McGechan on Procedure (online looseleaf ed, Thomson Reuters) at [HR 5.49.14].
4 Edwards v Edwards [2012] NZHC 1630 at [22]; applied in Glaister v Harris [2014] NZHC 2153, [2014] NZFLR 987 at [19].
marriage. The High Court’s jurisdiction arises generally under s 16 of Judicature Act 1908. The District Court’s civil jurisdiction under s 29 of the District Courts Act 1947 is subject to claims for no more than $200,000. It has an equitable jurisdiction and may give equitable relief.5 Before the reforms under the Property (Relationships) Amendment Act 2001, the Family Court had jurisdiction to enforce s 21 agreements by way of applications for division of property which sought orders in terms of the agreement.6
[13] Responsibly, Mr Whiteside QC for Mr Carter conceded that this Court may have jurisdiction to determine an application for specific performance of a relationship property agreement. In his written synopsis, he suggested, however, that the decision in Edwards v Edwards may be seen as contrary to the 1981 conclusion of Holland J in Thaisen v Thaisen.7 The analysis of Holland J in Thaisen v Thaisen, in relation to the Matrimonial Property Act 1976 as it then stood was that, by reason of the Act being an exclusive code, specific performance was not available as it was not included in the relief prescribed by that Act. The Thaisen decision was, in its own time, of doubtful authority – Greig J, a year later, refused to follow it in Newport v Cook. Greig J instead upheld a husband’s right to pursue in the High Court specific performance of a matrimonial property agreement.8 Associate Judge Bell’s analysis in Edwards v Edwards, as set above at para [12], serves to explain that the Property (Relationships) Amendment Act 2001, by enacting s 21L, removed any doubt as to the jurisdiction of this (and the District) Court to hear applications for enforcement.9
The exclusive jurisdiction asserted by Mr Carter
[14] In his submissions for Mr Carter, Mr Whiteside identifies three components of Ms Kinder’s claim as involving “significant new points”. These are the claims in relation to the Porsche car, the cash adjustment and the proposal for an auction sale process. Mr Whiteside submits that what is involved in relation to each of those is a “transaction between partners in respect of property”, and therefore, pursuant to s
4(1)(a) of the Act, falls within the code represented by the Act. Mr Whiteside submits
5 District Courts Act 1947, ss 34 and 41.
6 R L Fisher (ed) Fisher on Matrimonial and Relationship Property (looseleaf ed, LexisNexis) (“Fisher”) at [5.14], citing Thaisen v Thaisen (1981) 4 MPC 198, Bishop v Bishop (1981) 4 MPC
17, Newport v Cook (1982) 1 NZFLR 439, Belt v Belt (1989) 5 FRNZ 258 and Wicksteed v
Wicksteed [2002] NZFLR 28. See also P E S v D N S (2006) 25 FRNZ 863 at [20] – [24].
7 Thaisen v Thaisen, above n 6, at 200.
8 Newport v Cook [1983] 1 NZLR 118. See also the discussion in Fisher, above n 6, at [5.15] fn 2.
9 Since applied to order specific performance in Richter v Huber HC Napier CIV-2004-441-784, 17
March 2005 at [44], [46].
that Ms Kinder’s claims (pursued in this proceeding) must be heard and determined in the Family Court by reason of s 22(1) of the Act. Mr Whiteside refers to Shirtliff v Albert,10 as an example of a summary judgment application made in the High Court that was stayed because the application (for sale of the property owned by the plaintiff and her former partner) fell within the jurisdiction of the Family Court pursuant to s
22(1) of the Act.
[15] Mr Whiteside submits that other aspects of Ms Kinder’s four sets of claims seek an order for division of relationship property funds or involve transactions between the partners in respect of their property or a mixture of the two.
Discussion
[16] Section 21L of the Act establishes this Court’s jurisdiction to enforce agreements made under s 21 of the Act, notwithstanding that in other relationship property matters the Family Court will have exclusive jurisdiction.
[17] What the Court must determine is whether Mr Carter has discharged the onus of establishing that Ms Kinder’s application to this Court does not involve a bona fide reliance upon the Court’s enforcement jurisdiction.
[18] Mr Carter has not satisfied the Court that Ms Kinder’s proceeding is to be viewed as improper or pursued in bad faith.
[19] Both parties accept that their s 21 agreement remains on foot. Allegations made by one against the other as to breach of aspects of the agreement are a distraction
– they do not affect the Court’s jurisdiction to entertain an application for the enforcement of the agreement which neither has purported to cancel. Aspects of the agreement have been performed, including, importantly, the sale of the couple’s home and the conversion of its equity into cash now controlled by a stakeholder.
[20] Each component of Ms Kinder’s claims may be properly viewed as focused on enforcing the provisions of the s 21 agreement:
• The claim for disbursement of the proceeds of sale of the home derives from a clause providing for equal distribution of such funds.
• The claim for distribution of funds held in joint bank accounts (subject to adjustments for benefits obtained by each party) derives from the same clause providing for equal division of such funds.
• The recognition or claiming of adjustments flows from various clauses dealing with equal division of chattels, equal division of the joint bank account and the obligation of the occupant of the family home to pay for outgoings associated with their occupation.
• The claim for the sale of chattels derives from the clause providing for equal division or, failing agreement on equal division, the sale of the chattels and equal distribution of their value.
• The claim for specific performance of an (implied) agreement to execute a s 21A agreement derives from the clause whereby the parties agreed to equal division of the funds held in the joint account but with distribution to occur “on the signing of a s 21A agreement…”.
[21] Conceptually, Ms Kinder’s claim for orders by way of enforcement of the s 21 agreement is plainly within the jurisdiction of this Court. Whether or not this Court will grant all the orders sought in their present form or amended form will be a matter for further argument and possibly evidence. What the parties committed themselves to through the s 21 agreement was (amongst other things) the identification of four items of relationship property that were to be shared equally. Those were the family home, the family chattels, the joint bank account of the parties and any asset acquired using funds sourced from the joint bank account. The parties also committed themselves to taking detailed steps to determine how the division of their equally owned property would be achieved, for example, by the specific clauses invoked by Ms Kinder. Ms Kinder is entitled to pursue in this Court her proposition that the matters on which the parties disagree can be properly dealt with as part of orders which
the Court might make in order to ensure the parties complete the process of division to which they committed themselves in their s 21 agreement.
[22] What distinguishes this case from authorities cited in submissions for the defendant is that the parties here have already committed themselves to division through a s 21 agreement. Ms Kinder seeks orders enforcing that agreement. The parties in Shirtliff v Albert, relied upon by Mr Whiteside, had not entered a s 21 agreement.11 Rather, the plaintiff had commenced the proceeding in order to obtain orders as to how property owned by herself and her former partner should be divided.
[23] Mr Carter has not satisfied the Court that Ms Kinder’s application is an abuse of process.
Costs
[24] Counsel agree that the costs of this application are appropriately to be dealt with on a 2B basis. There does not appear to be a sound reason for departing from the approach that Mr Carter, as the unsuccessful party, should pay costs.
[25] Mr Whiteside nonetheless submitted that in the event the application were unsuccessful, I should reserve the incidence of costs. He took that position because Ms Kinder had initially commenced this proceeding with a summary judgment application, subsequently withdrawn after a notice of opposition was filed. Mr Whiteside wishes to make submissions as to the fixing of costs now on the summary judgment application with the consequence that a setting off may occur.
[26] In the circumstances, I will reserve the incidence of costs of this application with the Court to deal with the costs of both this application and the summary judgment application upon the papers upon receipt of submissions.
Orders
[27] I order:
(a) The defendant’s application dated 9 November 2017 is dismissed;
(b) The costs of the application are fixed on a 2B12 basis;
(c) The incidence of costs and disbursements is reserved, with submissions to be filed:
(i) by the plaintiff within 10 working days (six page limit);
(ii)by the defendant within five working days thereafter (six page limit);
(iii)by the plaintiff (in reply on the costs of the summary judgment application) (within five days thereafter).
Associate Judge Osborne
Solicitors:
Kearney & Co, Christchurch Counsel: S N van Bohemen Malley & Co, Christchurch
Counsel: P Whiteside QC, Christchurch
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