MARY-ANN BOYSPlaintiffAND IAN EDWARD CALDERWOOD

[2005] NZHC 1834

IN THE HIGH COURT OF NEW ZEALAND  CIV 2004 404 290 AUCKLAND REGISTRY

BETWEEN               MARY-ANN BOYS

Plaintiff

AND  IAN EDWARD CALDERWOOD

First Defendant

AND  IAN EDWARD CALDERWOOD and

JOHN WOOLLEY trustees of the Aberdeen Trust

Second Defendants

AND  IAN EDWARD CALDERWOOD and

JOHN WOOLLEY trustees of the Churchill Trust

Third Defendants

AND  IAN EDWARD CALDERWOOD and

JOHN WOOLLEY trustees of the Calderwood Family Trust

Fourth Defendants

AND  IAN EDWARD CALDERWOOD and

JOHN WOOLLEY trustees of the Prospect Trust

Fifth Defendants

Date:             11 to 15 April 2005 and 18/19 May 2005

Counsel:        A E Hinton QC and A Barker for Plaintiff P Fuscic for First Defendant

R Asher QC and K Muir for Second, Third, Fourth and Fifth Defendants

Judgment:      In accordance with r 540(4) I direct the Registrar to endorse this judgment with the delivery time of 12.00 p.m. on Tuesday the 14^th day of June 2005.

RESERVED JUDGMENT OF RONALD YOUNG J

Introduction

[1]        These proceedings involve allegations of promissory estoppel, common intention trust or constructive trust as the method by which the plaintiff seeks a share of assets accumulated by the defendants during the plaintiff’s relationship with the first defendant, Mr Calderwood.

[2]        The plaintiff and the first defendant lived together in a defacto marriage from November 1985 to January 2002 when they separated. From 1985 to 2002 the various defendants accumulated assets valued by 2002 at between $17 million - 20 million. This is despite the first defendant’s bankruptcy in 1991. In her second amended statement of claim the plaintiff abandoned proceedings under the Property (Relationships) Act 1976 accepting that the relationship ended shortly before the 2002 amendments came into force incorporating defacto marriages into the property sharing regime. The second amended statement of claim elevated promissory estoppel to the forefront of the plaintiff’s case with alternative causes of action based on common intention trust or constructive trust.

[3]        The promises said to give rise to the cause of action are expressed in the plaintiff’s pleading in this way:

13.The first defendant made repeated promises throughout the relationship on his own behalf and with the actual or ostensible authority or ratification of the second to fifth defendants, that the plaintiff would never have to go out to work and that she would be taken care of in the style to which she had become accustomed.

Particulars

(i)The promises were made orally in differing language but all to the effect of the language pleaded above. They were  made over a long period of time between 1985 and 2002 to a wide circle of people including the plaintiff, her son, her mother, her sister, her brothers, members of her extended family and friends (including John and Karlene Murdoch, Julia and Graeme Curran, Christine and John Dashwood, Mary and Hugh Short, Erin and John Laban and others).  The exact dates are not known to the plaintiff.

(ii)The promises were not made in writing to the plaintiff during the relationship but they were recorded in writing before and after the relationship by the first defendant’s

letters to Tunnicliffe and Appleby dated 22 August 1995; to McVeagh Fleming dated 18 February 2002 and to the plaintiff dated 13 May 2002.

. . .

15.The first defendant further promised:

(i)from 1996 to 2002 that the family home at Red Bluff Rise was the plaintiff’s home until she died and that it was thereafter to go to the three children being his two children and the plaintiff’s son Adam, in equal shares;

Particulars

The promise was made orally to the plaintiff in differing language but all to the effect of the language pleaded above. The promise was repeated on various occasions between 1996 and 2002. The exact dates are not recalled by the plaintiff.

(ii)on acquisition of the old Ford building in Manukau City by the first defendant and John Murdoch as the Calmur Partnership and on a number of occasions following such acquisition, that the building would belong to the plaintiff and John Murdoch’s wife, Karlene Murdoch to provide some assured income in the event anything should happen to the first defendant.

Particulars

·The plaintiff does not know the exact timing of the acquisition of the Ford building but believes it to have been approximately six years old. The subsequent dates of that promise are not recalled by the plaintiff except that they were between the date of acquisition and the date of separation. The promise was at all times made orally to the plaintiff.

·The fact of the promise was also communicated to John Murdoch because of the pleaded involvement of Karlene Murdoch in the arrangement. Again, the precise dates of those communications are not known to the plaintiff but again this would have occurred between the date of acquisition and  the date of separation.

[4]        The plaintiff says that to give effect to these promises requires a capital payment of $8.9 million by the defendants to her. She says that these promises were made by the first defendant with the authority of the other defendants.

[5]A common intention trust is pleaded as follows:

18.It was the express or implied common intention of the parties that in recognition of the plaintiff’s contributions as set out in Appendix A:

(i)The plaintiff would not have to go out to work and would be taken care of in the style to which she had become accustomed. The particulars of the circumstances in which this common intention was express or implied are set out in paragraph 13 above. The particulars of the plaintiff’s lifestyle, from at least 1996, are set out in paragraph 14 above.

(ii)That the family home at Red Bluff Rise was the plaintiff’s house until she died. The particulars of the circumstances in which this common intention was express or implied are set out in paragraph 16(i) above.

(iii)That the old Ford building belonged to the plaintiff and Karlene Murdoch to provide some assured income in the event that anything should happen to the first defendant.  The particulars of the circumstances in which this common intention was express or implied are set out in paragraph 15(ii) above.

[6]        Further, the plaintiff says a constructive trust exists over all the assets of the defendants having been acquired in part as a result of direct or indirect contribution of the plaintiff. The defendants deny any promises made and deny that the plaintiff contributed directly or indirectly to the accumulation of assets by the defendants.

Background facts

[7]        The   plaintiff   started   work   for   Jonmer   Developments   in   1981   as  Mr Calderwood’s secretary. Jonmer was owned by Mr Calderwood and John Wrightson. The plaintiff had one son, Adam, born in 1974 and was separated from her husband. About the end of 1982 or early 1983 a relationship began between the parties and in March 1983 the first defendant separated from his wife. The parties’ relationship grew and by 1985 they began living together along with Adam in a house at Oceanview Road, Milford. Immediately prior to the shift the plaintiff had been living in a unit owned by her at Sunset Road, Auckland. The unit was mortgaged and she owed her husband money from their matrimonial property division. Once the parties began living together Mr Calderwood expressed the view that it would be inappropriate for Ms Boys to continue to work for him at Jonmer and so Ms Boys resigned from that position. Shortly after Ms Boys obtained a part- time job in a women’s fashion boutique for 15 hours per week which lasted for five years.

[8]        Ms Boys’ evidence is that she looked after the parties’ residences including a beach house at Leigh, looked after and attended to Mr Calderwood’s domestic needs, looked after her son until adulthood, entertained both business and personal friends and family on a large scale and provided care and support to Mr Calderwood’s elderly parents, Mr Calderwood’s children and wider family. Her evidence is that  she devoted herself in a domestic context to Mr Calderwood who was working in a job which required fulltime attention. And Ms Boys claims she contributed to the improvement of a number of the properties owned by the defendants and helped and supported Mr Calderwood in some of his investment decisions. I will consider this evidence in further detail later in this judgment.

[9]        The first defendant is a property developer/investor. When he met Ms Boys he was financially successful with a net worth of approximately $7 million. Some of these assets were in his own name and some in the Calderwood Family Trust (settled in 1976) which had as its ultimate beneficiaries Mr Calderwood’s grandchildren. As a result of the property downturn Mr Calderwood was bankrupted in 1991 after a guarantee was called in and he was unable to meet it. The trusts which held most of the family wealth survived although considerably reduced. After his release from bankruptcy he again prospered as a property developer.

House properties

[10]      At separation the parties used two properties as their homes. Firstly a property at Leigh. This property was purchased by the Calderwood Family Trust in the 1970s (along with eight others). By 1985 the Calderwood Family Trust ended up as the exclusive owner of part of the property, 4 hectares of beach front land. Two houses were built on the property and by 2002 it was valued at $6.9 million. The parties used it as a holiday home/weekend home. Significant work was done on the property from 1985 onwards.

[11]      The other property is known as the Red Bluff Rise property. This was the parties’ day to day house. Red Bluff Rise is the last of a series of houses occupied  by the parties since 1985. The first such property was Oceanview Road in Milford purchased in 1985 and owned by the Oceanview Trust.

[12]      The next house occupied by the parties was at Aberdeen Road, Castor Bay purchased in 1990 by the Aberdeen Trust. Then in 1992 a house at Churchill Road, Murray’s Bay was purchased by the Churchill Trust. Finally, in October 1995 the Red Bluff Rise house was purchased for $3.5 million by the Churchill Trust. Significant landscaping and other work was carried out on this property after purchase. The property is still owned by the Churchill Trust and is currently occupied by Mr Calderwood.

[13]      In 2001 further significant work was to be done on Red Bluff Rise. A trust was formed which purchased a house at Prospect Terrace, Milford. The parties shifted into this property with the intention that they would occupy it while renovations to Red Bluff Rise were completed. While still in this house in January 2002 the parties separated, with Mr Calderwood leaving. The plaintiff still occupies the Prospect Terrace house.

Value of houses

[14]The best evidence of the value of Red Bluff Rise and Leigh is:

a)   Red Bluff Rise 2002

(i)Value $4.5 million

(ii)Mortgages $1.8 million

(iii)Net equity therefore $2.7 million

b)   Red Bluff Rise 2004

(i)Value $6 million

(ii)Mortgages $2.8 million

(iii)Equity $3.2 million

c)   Leigh 2002

(i)Value $4 million

(ii)Mortgages $1.1 million

(iii)Equity $2.9 million

(d)Leigh 2004

(i)Value $6.9 million

(ii)Mortgages $2 million

(iii)Equity $4.9 million

[15]Total equity therefore over the two properties in 2002 was approximately

$5.6 million and in 2004 $8.1 million.

Other assets and lifestyle comments

[16]      The parties enjoyed regular trips to Australia, Asia, Europe and North America during their life together. At separation both parties had the use of expensive Mercedes motor vehicles. The Churchill Trust owned a holiday villa in Fiji which the parties used for about one to two weeks per annum. At Leigh the parties had access to an expensive boat and other “toys” for their leisure.

[17]      In addition, the four trusts owned significant assets, mostly shares in property development companies, through Mr Calderwood’s skill as a property developer. These assets are worth many millions of dollars. I will consider their (precise) value later in the judgment.

[18]      It is clear to me that the parties enjoyed an affluent lifestyle when they lived together. The first defendant’s bankruptcy occurred in 1991. During his bankruptcy the Calderwood Family Trust still had considerable assets and it seems clear that the parties were able to continue to enjoy this lifestyle.

[19]      Much of the property development undertaken by Mr Calderwood was through Jonmer Developments Limited and Jonmer Holdings Limited. In the late 1980’s Jonmer Holdings Limited was a  joint  venture  between  Mr  Calderwood, Mr Wrightson and Unity Group, a publicly listed company. In 1987 after the sharemarket crash Unity Group was placed in receivership. As a result the bankers for Unity Group looked to Jonmer Holdings to make good guarantees it had given. As a consequence of the receivership of Jonmer Holdings lenders to that company called upon Mr Wrightson and Mr Calderwood under their guarantees. Jonmer Holdings owed approximately $20 million. Both Mr Wrightson and Mr Calderwood were declared bankrupt in 1991. Mr Calderwood was released from bankruptcy in late 1994.

[20]      Within a very short period of time Mr Calderwood was able to re-establish himself in business and in a letter to Westpac Finance in November 1996 he was able to advise the bank that his income for the year ended 31 March 1996 from salaries was over $1 million.

[21]      By separation in 2002 the assets owned by the defendants totalled somewhere between $17 - $20 million and by 2004 well beyond those figures.

Causes of action – promissory estoppel

[22]      Having sketched the parties’ general situation, I turn to the causes of action, to identify what the plaintiff must prove and consider the relevant facts. The first cause of action, promissory estoppel, is based  on  allegations  of  three  promises (see paragraph 3 of this judgment).

[23]      The plaintiff says that these promises were made orally to her and that they were confirmed in writing in a letter dated 22 August 1995 and in letters 18 February and 13 May 2002 from Mr Calderwood to McVeagh Flemming and Ms Boys respectively. The plaintiff says that Mr Calderwood had actual and/or ostensible authority to bind the trusts to his promises and did so.

[24]      The first defendant in his pleadings denies ever making such statements in  the context of a future separation by the parties. He also denies in any event that the elements necessary for a promissory estoppel are present in this case.

First Promise – Income and lifestyle

[25]      I am satisfied on the evidence that the first defendant did say to the plaintiff and others (although not in these precise words) that in the event of the parties separating the plaintiff would never have to go out to work and would be taken care of. The standard to which she was to be “taken care of” is the area of uncertainty in the promise.

[26]      The plaintiff’s evidence, which was not shifted in cross-examination, included in her brief the following:

36.I would have liked a marriage.   It was discussed occasionally over    the first eight years or so and Ian would say: “When the time is right we’ll pop off and get married. Anyway you are well protected and will be looked after better than most wives if I die or in the unlikely event of us parting”. He would sometimes refer to me as his wife.

. . .

48. Over the years, despite  Ian’s  regular statements that  I would  never have to worry financially, I sought reassurance as to what would happen in the case of his death or if we ever parted. Ian would reassure me by saying that our relationship was every bit a marriage, just without the piece of paper. The repeated statement that he made to me and many other people in my hearing was that I would never have to go out to work and that I would be taken care of in the style to which I had become accustomed. I was concerned about  not being married and my vulnerability if we separated. Ian was dismissive about the possibility of our parting, but was emphatic that I was still to be looked after in the same way. He said I would never have to worry, no matter what. Ian was still making these promises within a short period of our separation.

[27]      The exact terms of the promise varied. Ms Boys said in evidence in relation to a discussion she had had with Mr Calderwood:

What if we come to a parting of the ways and he said to me time and again you will never have to worry, you will be well set up.

[28]At other times Ms Boys said the promise was:

“That I would be looked after in the manner I had become accustomed”.

[29]      For example in relation to the Red Bluff Rise promise (dealt with later in this judgment) Ms Boys was asked:

Q: Its not realistic to suggest Mr Calderwood would have proposed surrendering Red Bluff Rise to you in the event of a separation?

A:Red Bluff Rise is a very valuable property quite often with parting of the ways people have to sell properties and they have a share and that is equivalent to a decent home out of that.

[30]Her evidence was supported by the evidence of her son Adam who said:

8.The reason I have written this brief of evidence is to advise clearly, with no doubt or obstructed clarity, that a promise was made to my mother and myself, the same promise repeated on multiple occasions to multiple people, that my mother would never have to worry about her future again.

9.The promise was that in the event of death or the unlikely event they went separate ways, my mother would be kept in her existing lifestyle and this would not alter. Ian said my mother would never  be put in a position where she would have to work again. He said that she would always be able to live at Red Bluff Rise (and that when mum died, Red Bluff Rise would go equally to his daughters and me).

[31]      I found Adam to be a straightforward witness. However, it was difficult to know  if  he  was  quoting  Mr  Calderwood  or  paraphrasing  what  he  believed   Mr Calderwood had said. He was understandably anxious to support his mother. However, I saw no sign that his attachment meant he was prepared to lie. I accept  the thrust of what Adam said if not the actual words which mirrored his mother’s comments.

[32]      Mrs Curran was Ms Boys’ employer at the clothing boutique. Her and her husband were invited to many gatherings with Ms Boys and Mr Calderwood at their homes. Mrs Curran confirmed that Mr Calderwood said regarding Ms Boys’ future:

8. Ian recovered  from  his  bankruptcy  to  build  his  business  empire bigger and better than previously, with Mary-Ann staunchly by his side. Ian had many favourite sayings which he frequently used such as “go with the flow”, etc. However, the main one I remember was his often describing the lifestyle that Mary-Ann and he had created together and that she would never have to worry financially in the future. He would always ensure that she was kept in that lifestyle and would never have to work again in her life. He repeated this often, always proud to have Mary-Anne by his side.

Again I have no reason to doubt her evidence.

[33]      Mrs Laban had been a friend of Ms Boys and enjoyed the company of Ms Boys and Mr Calderwood on a number of occasions. Mrs Laban described in her evidence one such occasion when the two couples were discussing the importance of caring “for loved ones . . . even when they are no longer together”. Mrs Laban then described the conversation between herself and Mr Calderwood as follows:

6.I distinctly remember him telling me that morning that if anything should ever happy to him, whether he should no longer be alive or whether he and Mary-Ann had gone their separate ways for any reason, that he had “put things in place” for her to be taken care of in a manner so that she would not have to change her lifestyle in any way. His words were that she had been “very generously provided for and that she would be able to continue to live in the manner in which she was used to and that she would never want for anything”.

7.Ian would often boast about many things, but I remember asking  him when I heard him say this, if he meant that this would occur even if they were no longer living together. I remember thinking  that many husbands/partners would actually not want to provide for their partner so generously if they were no longer together. He confirmed to me that I had heard correctly and backed it up by telling me that Mary-Ann had taken good care of him over the years and that he would continue to provide for her no matter what.

[34]      Karlene   Murdoch   is   the   wife   of   long-time   business   partner    of   Mr Calderwood’s,  Mr  John  Murdoch,  and  a  friend  of  Ms  Boys.  I  note   that Mr Murdoch and Mr Calderwood are now disentangling their business affairs for each to go their own way. I saw no reason why Mrs Murdoch should lie or be mistaken about what she said with  respect  to  Mr  Calderwood’s  statements  and Ms Boys’ future, when she said:

7. On numerous occasions, and  over  most  of  the  period  of  our  friendship Mary-Ann’s and my own well-being was discussed by us all, including the subject of family trusts, with Ian and John both indicating that in the event of their deaths, or our relationships dissolving, we would be well provided for and kept in the manner we have become accustomed to. They also expressly said when they bought the Ford building, which I believe was in the late 1990’s, that the building would be transferred to Mary-Ann and myself. They said that although we had all of our living costs covered and assets in trust for us, we should have something in our own names to generate pocket money. To the best of my knowledge, this undertaking has not (yet) been actioned.

[35]      Ms Boys’ sister, Judith Winter, gave evidence. She was in my view a straightforward truthful witness. She properly acknowledged the contributions made

by Mr Calderwood to her family and to her personally. She expressed concern about her sister’s loss of independence during her relationship with Mr Calderwood. As to “promises” of future conduct, her evidence at paragraph 13, 14 and 15 of her brief was:

13.	More recently, a few years ago, our mother decided to give each of her three children $20,000 from money left after she had sold her home. Our brother, Christopher, and I had no capital behind us and of course Ian was aware of that. Ian was generous to me and my children and I was not really surprised when he told me that my mother should not bother to give Mary-Ann $20,000. In front of Mary-Ann, and without asking her, he suggested that her $20,000 should be given to Christopher and me. He said that Mary-Ann had no need for it. “She will always be well looked after”. It was clear that what he meant was that he would always look after Mary-Ann financially. In the event, our mother insisted that she wanted to treat each of her three children equally and Mary-Ann was given $20,000. Nevertheless, Mary-Ann lent me the $20,000 some time later when I really needed it.
14.	Ian often said to me that he would always look after Mary-Ann and that she would never have to work.
15.	In 2002, when Ian and Mary-Ann were not living together, I recall a telephone discussion with Ian when I said to him: “I know you will always look after Mary-Ann as you always promised.” Ian replied: “nothing changes”.
[36]	Finally	the evidence of Mrs Diane Williams, who is married to Ms Boys’
cousin:
3.	On a number of occasions, Dave and I were told by Ian that Mary-Ann would be well looked after if anything should happen in the future.
4.	On one occasion when we were staying with them at Leigh, Ian told us that Mary-Ann would have the beach-house for three years after he died.
5.	Ian also said to us on other occasions that she would be well looked after and would never have to work again.

I note she was not cross-examined.

[37]               Clearly all of the words identified by the witnesses are not the same. Some said the expressions used by Mr Calderwood about future conduct were only used in the context of his death. Some used phrases that focused on looking after Ms Boys

“well” or “in the manner she had become accustomed” or that Ms Boys would not “suffer” as a result of any separation. But all had the same basic thrust, a promise of future conduct in relation to Ms Boys’ financial circumstances involving her never having to work and involving a standard of living variously referred to but all with the concept of a high standard.

[38]               Mr Calderwood’s evidence was somewhat different. In his brief of evidence he said:

7I did not ever say to her or anyone else at any time that she could expect to continue to enjoy exactly the same standard of living in the event that we separated, that she enjoyed while we were living together. I did, however, make it clear to her and the trustees of the Fifth Defendant in particular that, in the event that I died while we were together, it was my intention that Mary-Ann would be well provided for. Mary-Ann was always aware, however, that I did not own significant assets in my own name and she was aware that significant assets including the holiday house at Leigh and the house at Red Bluff Rise were owned by the Second to Fourth Defendants in trust and that she could not expect to have a legal interest in them.

8One of the matters that she complained of over the years was that, because we were not married, she perceived that she had no financial security, particularly with the family trust structure that existed. ...

[39]               Mr Calderwood’s acceptance (in paragraph 8 above) that Ms Boys was concerned about her lack of financial security because they were not married is logically attached to the question Ms Boys says she posed to Mr Calderwood – what will happen if we separate? Mr Calderwood’s awareness that Ms Boys was concerned is consistent with my view of Ms Boys’ evidence and Mr Calderwood’s response to her concern. Mr Calderwood’s claim that his reassurance was only in relation to his death simply does not coincide with Ms Boys’ concern, namely her lack of financial security because they were not married. Mr Calderwood said that if he had said “You are well provided for” or “You will never have to work in your lifetime” then those comments were taken out of context. He says they were only made in the context of what would happen upon his death, if the parties were living together happily at the time. Further, the defendant said:

138 I did assure Mary-Ann over the years that in the event I died,  she  would be well provided for. I did not have discussions with her, or other people as to what would happen if we separated.

144 The basic statement that was always made to Mary-Ann was that she would never have to go and work and would be looked after. I did explain to Mary-Ann that my intentions were always to provide a home unencumbered and a reasonable income stream. This discussion was in the context of what would happen if I died and we were still together.

150My comments to her about never having to go and work were in the context of my dying and did not refer to the prospect of us separating. However, after separation, I did address the issue.  Thus  I agree with Mary-Ann that I said things to her like, if I die “you will never have to worry financially” and if I die “you will be well protected and will be looked after better than most wives”.

151Although these were made in the context of my death, I am prepared to look after Mary-Ann in a way that means that she will have her needs catered for and should not have to worry financially. I have offered to provide $1 million or an asset of that value from which she can earn income.

152I never said to her anything about the trustees or in any way committed the trusts in regard to what Mary-Ann might get. The statements that I made to her were entirely personal to me and were what I personally saw as appropriate for her. I specifically deny that I said to her that I had made it clear to my trustees that she should be looked after ahead of my children. Indeed the contrary was always the case; my children have always been my priority and she has known that throughout our relationship.

153I wrote a letter to John Woolley on 18 February 2002 not long after the separation and I gave a copy of it to Mary-Ann. I had no intention of being reunited with Mary-Ann and as a result of discussions we had I assured her that in the unlikely event of anything happening to me she would not be left high and dry. When Mary-Ann received a copy of this letter she rang me and told me that it was not worth the paper it was written on.

[40]               In cross-examination Mr Calderwood was asked about the evidence of witnesses as to his promises to Ms Boys in the event of separation. In response, having had put to him paragraph 7 of his brief where he denied any conversation with Ms Boys or anyone about events if the parties separated, he said:

And you say, paragraph 7, “I did not every say ... together” and you say thats a correct statement ?. I dont ever remember having any discussions with

anybody other than Maryanne about what would happen if we separated Ive heard some of the witnesses say that statement was made and I deny that it was not a subject that normally crops when youre a couple living happily together I certainly did make the statement that Maryanne will be looked after and I’ll never resile from that

You say you never promised [witness interposes] ?..... Ive used the expression she would be kept in a manner that she was accustomed to I dont deny that it was generally in the context of my death if we were living happily together at the time of my death on the second occasion which is after post separation I was really concerned about Maryannes health she’d lost a lot of weight she did not look very good at all she was quite hysterical when we spoke that prompted me to write a letter on 18 February to try and settle her down and let her know that she wouldn’t be abandoned as such.

But you said that these statements were generally made on – talking about the occasion of your death – might they have been made in a context she might have understood about any eventuality ?. Im sure she would have

inferences from statements can be varied I dont doubt some of the things Ive said would probably be construed differently from what I intended, I guess thats fair.

So she may have construed from what you said that you were always going to provide for her in the manner she may have become accustomed ?. Im

not sure in terms of separation its never the same as if you die there are 2 completely sets of circumstances I have never resiled from the fact that Maryanne would be in a nice home which would be unencumbered she would have reasonable investment income thats why the offer was put on the table early in the piece so she knew something was there for her.

From Maryanne’s perspective she was concerned about her security during the relationship ?..... I dont think she was generally overly concerned because she said to me on a number of occasions I know youll always look after me.

But you say that the promises you made to her were only in the event of death you gave her no reassurance as to what would happen if you separated?. I dont recall any of those discussions, only perhaps in that one

letter after she was very upset when we separated.

Before you separated ?. I dont recall it, I do recall over time a couple of

conversations but they were very general and there were no definitive arrangements put in place if we separate it was obvious all the way through I was concerned if anything happened to me the impacts on Maryanne because she was involved in the first trust the Oceanview Road she was then involved in the Aberdeen Trust she was then involved in the Churchill Trust and that was to ensure in the unlikely event of me dying or getting killed that she would be ok.

[41]               Counsel for Ms  Boys  then  turned  to  the  letter  of  13  May  2002  from  Mr Calderwood to Ms Boys. The relevant portion of this letter is:

I have always said and I reiterate, it was always my intention to have Prospect Terrace unencumbered and for you to receive income to enable you to live in the style that you [have] been accustomed, and I can assure you that I am continuing to work towards this end. I would point out to you that the above offer probably represents an income before tax of between

$120,000 and $150,000 per annum which is more than most senior executives in big organisations earn.

[42]And then in cross-examination the following exchange:

Youre writing to Maryanne and in the second to last paragraph you say “I have always said ... accustomed” so youre saying you have always said Maryanne received income to enable her to live in the style she had become accustomed ?. That would be a reasonable level I would accept

You would accept she should have enough income to live in the style to which she had been accustomed taking a reasonable position as to that style

?. I think a reasonable position is correct.

And you accept that thats what youve always said ?..... I think this is probably the only time this was said in the context of separation I think in every other context or circumstances its really been more in terms of me being killed or dying.

Youre talking here about what youve always said and you had separated presumably youre talking about what is relevant to the separation ?. My

sort of assessment of style that youre accustomed what Ive are shown to me are 2 entirely difference things.

You can say you can ensure Maryanne youre continuing to work towards that end, are you accepting that you did promise Maryanne that she would be able to live following a separation in the style to which shed been accustomed with a reasonable measurement of that style if youre accepting that she would accept that as well its a question of measuring that style do you agree with that ?..... I agree its a basis Id like to explore. The figures  that Ive seen -

[43]               Then attention turned to the letter of August 1995. I reproduce that letter in full:

22^nd August 1995

Mr B E Tunnicliffe and Mr D R Appleby Trustees of the Three Calderwood Trusts PO Box 37-661

PARNELL

Dear Bruce and David

Following on from our earlier conversations I would like to put on record the way that I see things regarding the various Trusts that I have settled.

Calderwood Family Trust

Beneficiaries:             Susie and Kate

Main Assets:              Property at Leigh

Loan to the Aberdeen Trust

The shares in Delron Investments Ltd held by Premium property Management Ltd in trust

Shares in Premium Commercial Real Estate Ltd Shares in Woodson Investments Ltd (property in Woodson place)

Share in Kawakawa flats Loans to various projects

Shares in Companies as per the attached schedule

This is the Trust that I would like to see preserved exclusively for my two daughters. As far as the Leigh property is concerned I would like Maryann  to have a wind-down period of say two years after my death and she would also have the right to take any household chattels from the property that she wished.

The Churchill Trust

Beneficiaries:             Maryann and myself

Final Beneficiaries: Adam, Susie and Katie in equal shares

Main Assets:              House at 19 Churchill Road, to be transferred ex the

Aberdeen Trust

I would like this Trust to always own the home and to eventually have sufficient income for Maryann to live in the manner she has become accustomed.

In the meantime the insurance policies on my life to an approximate value of

$1.5 million are to be transferred from the Aberdeen Trust to the Churchill Trust.

Aberdeen Trust

Beneficiaries:             Maryann, Adam, Susie and Katie.

Main Assets:              Shares in all the various companies as per the

attached schedule, also a share in the Oggi Product Partnership.

I would like to think that the profits when they mature from a lot of developments within these various companies will be channelled back via me to the Churchill Trust. I would also like to see any guarantees confined  to this Trust. As this Trust is a Discretionary Trust I would like to ask the Trustees once the Churchill Trust is in a position to achieve its goals to exercise discretion in favour of my daughters Susie and Katie via the Calderwood Family Trust.

In the unlikely event that something happens to me prior to the Churchill Trust being set up with the unencumbered home and sufficient investment income for Maryann I would like the Trustees to give the Churchill Trust first call on available funds in the Aberdeen Trust to achieve that goal before their discretion enables the residual funds to be transferred to the Calderwood Trusts.

Personal Situation

Currently I am a partner in the Calderwood Murdoch Partnership, and the Calderwood Ross Partnership. The shareholding in the Sport Drinks group  of companies is also held by me personally. I would like any activities, companies, partnership, funds other than personal effects etc, to be transferred to the Calderwood Trust for the benefit of my two daughters.

As far as my personal possessions are concerned I would like these to go to my daughters with the proviso that certain items of sentimental nature be available for Maryann, and my two daughters are not to unreasonably deny her these.

Yours faithfully

I E CALDERWOOD

[44]               Mr Calderwood confirmed that he had offered the plaintiff the occupancy of the house at Prospect Terrace for her life (valued at $900,000) plus $1 million in cash, the Mercedes car, jewellery and other investments in Ms Boys’ possession worth an additional $300,000 to $400,000 a total of near $2.3 million, although the Prospect Terrace house was owned by a trust. This Mr Calderwood considered met his obligation to ensure the plaintiff did not have to work during her lifetime and could live at a reasonable standard.

[45]               Mr Calderwood tried to explain away the correspondence, especially the 2002 letters, as essentially reassuring Ms Boys that he would look after her at his death if they were still living happily together. This was not convincing at all. The correspondence written post separation could only have referred to and intended to be a reassurance to Ms Boys as to her position after separation. The position at Mr Calderwood’s death was no longer relevant. Nor overall did I find convincing Mr Calderwood’s denial that he talked to others about Ms Boys’ financial position if they separated. I note Mr Calderwood’s position seemed to be that he had never spoken with Ms Boys about a post separation position and nor did he discuss these things with other people. He said the discussions were limited to what would happen if he died. I consider his evidence on this aspect of the case was changeable, equivocal and vague.

[46]               Mr Calderwood’s letter of 18 February 2002 to McVeagh Fleming, Ms Boys’ lawyers, confirms the terms of the promise in Mr Calderwood’s words. He refers to Prospect Terrace and says:

As you know Mary-Ann and I are having time apart at the moment and there has been no resolution discussed or agreed for any settlement. However I embarked on a course of action over two years ago because I was aware that the potential for conflict between Mary-Ann and my daughters was a real possibility. As you know we were living in a large home in Campbells Bay which was owned by the Churchill Trust, the beneficiaries of which are Mary-Ann and my two daughters. In the event of my death I assumed that a property of the size that Mary-Ann and I shared would not be kept long-term by her. I assumed therefore that it would be sold and so we would not be talking a question of a home but of money. For this reason I decided to form a trust that was exclusively for the benefit of Mary-Ann and this trust is called The Prospect Trust.

[47]               While the letter is expressed to be only where Mr Calderwood dies it is clear that was not its purpose. Mr Calderwood accepted in cross-examination (see paragraph [49] of this judgment) that the letter was intended to reassure Ms Boys, who was extremely upset about the separation, of his intention for the future given their separation. This letter was followed up by a further letter in May 2002 where  as relevant he said:

I have always said and I reiterate, it was always my intention to have Prospect Terrace unencumbered and for you to receive income to enable you to live in the style that you [have] been accustomed, and I can assure you that I am continuing to work towards this end. I would point out to you that the above offer probably represents an income before tax of between

$120,000 and $150,000 per annum which is more than most senior executives in big organisations earn.

[48]               Mr Calderwood in his letter of 18 February 2002 to McVeagh Flemming, began by saying:

I am writing this letter to you and will be giving a copy of it to Mary-Ann, so she is left in no doubt as to where she sits in the unlikely event of anything happening to me.

[49]               As to this, I asked Mr Calderwood the following questions in evidence in relation to the letter of 18 February:

THE COURT
Youve described the visit from Ms Boys upset and angry ?. Correct.

Youd separated from her youd left she was upset and angry and feeling vulnerable because she didnt know how she would be looked from tomorrow onwards?. Correct

You wanted to reassure her ? I did.

Whats death got to do with it ?. Fair point

Youre intention was to reassure her from what would happen from  now  on?. I know now, she said whats to me if you drop dead tomorrow that was
the statement I thought fair enough she probably thought if I am not around she would be looked after, she knew that I would look after her, if you drop dead tomorrow whats going to happen to me.

Your position has been any reassurances while you were happily together were in the context if I die and we’re living happily together these are the reassurances I give you, but that isn’t the position in February 2002 because this is no longer happily together and the reassurances youre giving her are reassurances she will get sufficient income to live in the manner we enjoyed while living together ?... I do see the contradictions, in my mind the letter was really designed to let Maryanne know she wouldn’t be left high and dry she would be provided for reasonably.

Whether separated or at your death ?. Yes, that’s correct.

And so again what we’re really talking about is whats enough money to fulfil your promise ?. (Nods yes).

[50]At paragraph 3 of the letter he said:

As we bought another home in Prospect Terrace in Milford it was settled in the name of this trust and currently Mary-Ann is residing there. There is a mortgage on the property and it was my intention to repay that mortgage and top this trust up with whatever it takes to provide Mary-Ann independently with sufficient income to live in the manner that she enjoyed while we were living together.

[51]And finally

But this letter is to clearly emphasise to you that I will be working towards creating The Prospect Trust in the form outlined irrespective of whatever resolution Mary-Ann and I may reach.

[52]               The third and final letter of relevance is dated 22 August 1995. This was from Mr Calderwood to his trustees and accountants. He identified the three trusts he had an interest in. The Calderwood Family Trust owned the Leigh property along with a number of other assets. As to the Leigh property the defendant said:

As far as the Leigh property is concerned I would like Maryann to have a wind-down period of say two years after my death and she would also have the right to take any household chattels from the property that she wished.

[53]               As to the Churchill Trust, he said (Mr Calderwood and Ms Boys were beneficiaries):

I would like this Trust to always own the home and to eventually have sufficient income for Maryann to live in the manner she has become accustomed.

[54]As to the Aberdeen Trust as relevant the plaintiff said:

In the unlikely event that something happens to me prior to the Churchill Trust being set up with the unencumbered home and sufficient investment income for Maryann I would like the Trustees to give the Churchchill Trust first call on available funds in the Aberdeen Trust to achieve that goal before their discretion enables the residual funds to be transferred to the Calderwood Trust.

[55]               I prefer the evidence of Ms Boys and her other witnesses that discussions were had about Ms Boys’ position if the parties separated. I am less certain about  the exact form the lifestyle promise took. This is perhaps unsurprising given the context of the conversations and the difficulty of remembering conversations some years ago. The only written material available is the letters from Mr Calderwood referred to in this judgment.

[56]               Mr Calderwood makes the point, that many of the detailed plans expressed by him changed over the years as circumstances changed and Mr Calderwood’s views changed. I accept that general proposition, and accept that what Mr Calderwood  may have specifically had in mind with respect to individual trusts and properties changed over the years. What however did not change, in my view, was Mr Calderwood’s broad commitment to Ms Boys to set her up with a home and sufficient income so that she could live “well”. This included the proposition that  Ms Boys would have sufficient funds such that she would not be required to work again. As I have observed it is not possible now to reconstruct the exact terms of the promise relating to lifestyle. Mr Calderwood did promise the plaintiff would never have to work again.  That much is clear.  What standard of living that involved is  less clear. I accept the defendant did use such words as “style to which you have become accustomed”. On other occasions it was a more modest promise of the

plaintiff being “looked after” or “looked after well” or to a “standard that most wives would not expect”. These words may not all have been explicitly used but they were the thrust or meaning behind the words used. I took from the plaintiff’s evidence  that she understood  that  she  was  not  in  fact  being  promised  that  if  she  and  Mr Calderwood separated she would suffer no change in her standard of living. She recognised that was obviously unrealistic. I am satisfied that the sum of the various promises made was that Mrs Boys would have sufficient assets to generate an independent income sufficient to enjoy a lifestyle which, taking account of the parties’ separation, reflected the style that they had enjoyed while living together. Inevitably there is a lack of precision about such a promise but in my view not to an extent that the promise is unenforceable.

Red Bluff Rise promise

[57]               The plaintiff says at paragraph 15.1 of the second amended statement of claim that:

15       The first defendant further premised:

(i)From 1996 to 2002 that the family home at Red Bluff Rise was the plaintiff’s home until she died and that it was thereafter to go to the three children being his two children and the plaintiff’s son Adam, in equal shares;

Particulars

The promise was made orally to the plaintiff in differing language but all to the effect of the language pleaded above. The promise was repeated on various occasions between 1996 and 2002. The exact dates are not recalled by the plaintiff.

[58]               Mr Calderwood’s evidence was that shortly after purchase of the house he said to Ms Boys that she could live in the house for her life after his death assuming they were living together at the time. He says that promise changed when he realised the potential problem between his children’s rights and Ms Boys’ rights with respect to the Red Bluff Rise property. He denies ever making a promise to Ms Boys in the context of a separation. Ms Boys says:

55.In 1995 we bought the Red Bluff Rise property together and I was     on the title. We both loved the Red Bluff Rise property and did a huge amount of work on it. After all of our moves, this was to be  our permanent home. From the time we moved in there, Ian said

repeatedly that this was to be my home for my lifetime. He said the property was in trust for me for my life and then it was to go to the three children.  He said, again repeatedly, that he had made it clear  to his trustees that I should be looked after ahead of his children.

[59]               In the context of the purpose of Prospect Terrace, Ms Boys says the  following conversation took place:

71.In late 2000, Ian told me to start looking for a place we could move   into while we did the major alterations we had planned for so long at Red Bluff Rise. He said to find something at around $600,000. I found Prospect Terrace. He had started talking about forming a trust that “would be a little extra security for me”. He said he would put Prospect Terrace into that Trust. I said – “but you can’t take me out of Red Bluff Rise”. He replied that Prospect Terrace was just an investment property but it would be extra security; that it was only temporary accommodation for us and that nothing had changed as far as Red Bluff Rise was concerned. He said Red Bluff Rise was still and always would be my home. He also said to work  or business colleagues in my presence: “we own four homes, Leigh, Red Bluff Rise, Prospect Terrace and Christchurch”.

[60]In cross-examination the relevant passages were:

Diane William a witness you’re calling she says that Maryanne would have the beachhouse after he died is that the sort of thing that Mr Calderwood would say about Leigh?……The beachhouse was in trust and he did mention that in the case of his death or whatever happened in the future that I could have a period of 2 years that I could use the house and take an[y] of the chattels out that I wanted, I worried about the fact that ok if I could only use the place after he died, for two years and I wasn’t in that trust and he always reassured me and said well you’ve got the other trust.

When he was talking about you being able to use the beachhouse for that 2 year period he was talking only about in event of his death that's what he was directing his remarks to?……Quite possibly his death.

He wasn’t going to say to you and didn’t say to you if we separate you can use Leigh for 2 years?……He said to me after separation you can use Leigh at any time you like and the Fiji villa.

Are you talking about after you separated he said that to you?……Yes.

I’m asking you about the relationship I’m suggesting to you during the relationship whenever he talked about you being able to have some use of Leigh he was doing so in the context of his death and only in that context?……I don’t really recall.

And similarly when he discussed with you what might happen in relation to Red Bluff Rise, he was talking about what might happen in relation to Red Bluff Rise when he died?……Absolutely not.

Again there’s a world of difference between Mr Calderwood dying and discussing with you, you being able to use it for a while in that event and  you separating when he himself would want to use Red Bluff Rise?……He always said in the case of separation you will always be set up in the style you’re accustomed and set up in a house at that level maybe not quite that level or something in that category, it was a main concern for me because I wasn’t working I needed reassurance that what if we came to a parting of the ways and he said to me time and [time] again you will never have to worry, you will be well set up.

I suggest that what he said to you in relation to Red Bluff Rise and in relation to what would happen in the future was simply that you would be looked after you wouldn’t have to work again?……No that’s not right.

[61]               Adam Boys said that Mr Calderwood had said with respect to his mother, “She would always be able to live at Red Bluff Rise and that when mum died Red Bluff Rise would go equally to his daughters and me”. In cross-examination he said:

. . . Mr Calderwood said and then you tell me ?. Mr Calderwood said that
she would have full use of the property till he died.

It would be an extraordinary thing for Mr Calderwood to leave Red Bluff Rise so Maryanne Boyes could live there in the event of them separating any discussion of that surely was in the context of him dying ?. Not the case I

dont see it as extraordinary at all they’d been together for a very long time

[62]               Mr Calderwood’s evidence was quite different. He denied he had said that Red Bluff Rise was to be their permanent home. He said his history illustrated regular development and sale of properties including the parties’ homes. He  accepted that shortly after the purchase of Red Bluff Rise he had said to Ms Boys that after he died she could live in the house until her death with the house ultimately going to his daughters. However, he says he realised that such an arrangement  would not work. He said Ms Boys had made it clear she did not want to live in such a large house on her own after his death and he thought the “mixed” ownership/occupancy regime between Ms Boys and his daughters would inevitably lead to conflict. He denied ever saying in the event of separation Ms Boys could use the Red Bluff Rise house for her lifetime. He said that he understood from Ms Boys that she thought the house was too large for her on her own and she had become tired of the constant workmen at the house who were engaged to keep the property functioning. In particular, he said:

146Discussions took place between me and Mary-Ann about the potential of Red Bluff Rise as a family legacy. On occasions in

around 1997/1998, I said to Mary-Ann that if I died, she could stay on in Red Bluff Rise for a while. The statements were just part of  the discussion about what would be appropriate and fair in the event of my death. They did not relate to what would happen if I  separated.

147Around 1999/2000 I realised that the prospect of Mary-Ann and her son sharing Red Bluff Rise with my daughters in the event of my death was simply not practical. This was particularly coloured by  the fact that Mary-Ann herself did not particularly like Red Bluff Rise, and indicated to me that she would not wish to live there on her own.

149I emphasise that Mary-Ann in these discussions was quite emphatic  that she did not wish to live in Red Bluff Rise if I was not around because the property was too big.

[63]               Having  heard  the  evidence  on  this   matter,   I   am   not   satisfied   that Mr Calderwood promised to allow Ms Boys to occupy the Red Bluff Rise home until her death in the event of their separation.  If he did, he changed his mind and told  Ms Boys about this change.

[64]               It is clear that in the mid to late 1990s after the purchase of Red Bluff Rise Mr Calderwood did say that Ms Boys could stay on at Red Bluff Rise for a while in the context of his death. This was to ensure that after his death Ms Boys had some continuity of residence. I reject the claim, however, that Mr Calderwood said that  Ms Boys could live in the house for her life if the parties separated. In my view, to make such a promise would make little or no sense. I accept that Ms Boys did make it clear that the Red Bluff Rise house was too large (it is 6,000 square feet) for her if she was left on her own and that much of the “gloss” of the house had been lost for her because of the constant company of workmen which she resented. I am satisfied that Mr Calderwood recognised the potential conflict between his daughters and Ms Boys and occupancy and ownership of Red Bluff Rise after his death. Ms Boys’ occupancy of the house was potentially 20 years or more inevitably leading to conflict and resentment. I also consider that despite Mr Calderwood’s protestations that the Red Bluff Rise house was just another property to be developed, it was in my view in quite a different category for him. Mr Calderwood had put significant time, energy and money into the property. I do not accept that he would promise to give away occupancy to Ms Boys for her lifetime in the event of a separation. Adam’s evidence may have been accurate in the early days of the ownership of the

house. However I accept Mr Calderwood’s evidence that once he realised such an arrangement was ripe for conflict he changed his mind about allowing Ms Boys long term occupancy. I am satisfied that Mr Calderwood’s evidence is accurate when he said that he made it clear to Ms Boys that he would not allow her to live in the Red Bluff Rise house for her lifetime and that his two children were to inherit the property. I therefore reject the plaintiff’s claim based on this alleged promise.

Ford Building promise

[65]               I now turn to the second “property specific” promise pleaded by the plaintiff. This is set out in paragraph 15(ii) of the second amended statement of claim as follows:

15.      The first defendant further promised:

(iii)on acquisition of the old Ford building in Manukau City by the first defendant and John Murdoch as the Calmur Partnership and on a number of occassions following such acquisition, that the building would belong to the plaintiff and John Murdoch’s wife, Karlene Murdoch to provide some assured income in the event anything should happen to the first defendant.

Particulars

·The plaintiff does not know the exact timing of the acquisition of the Ford building but believes it to have been approximately six years old. The subsequent dates of that promise are not recalled by the plaintiff except that they were between the date of acquisition and the date of separation. The promise was at all times made orally to the plaintiff.

·The fact of the promise was also communicated to John Murdoch because of the pleaded involvement of Karlene Murdoch in the arrangement. Again, the precise dates of those communications are not known to the plaintiff but again this would have occurred between the date of acquisition and  the date of separation.

[66]               Having heard the evidence I am not satisfied a clear and unequivocal promise was ever made by Mr Calderwood in the terms pleaded. Ms Boys in her evidence simply said she confirmed that paragraph 15 of the statement of claim was correct.

[67]               Mrs Murdoch who Ms Boys claimed had also been promised an equal share in the property said in cross-examination significantly as follows:

Did you take what they said about the Ford building to be something that might happen or something that would happen ?. might happen.

And did they make any comment about what income you would expect to get from that building ?. No.

[68]               Mr Calderwood’s evidence accords with Mrs Murdoch’s evidence that he and others gave an illustration of how Ms Boys could be provided with an income sufficient to meet her needs through a building such as the Ford building. This was not, however, any form of direct promise that Ms Boys would be given the Ford building. Nor did Mrs Murdoch consider that it was a promise made to her. Nor do

I. Mr Calderwood’s statement with regard to the Ford building confirms his express desire to ensure that Ms Boys had sufficient income on which to live. The assignment of ownership of a rent-producing property such as the Ford building was one way of achieving this end. However, in my view, no promise was ever made to assign ownership of this particular building to Ms Boys. Apart from anything else, Mr Calderwood was never in a position to do so. He only owned one-eighth of the building and there is no evidence that he was ever in a position to buy out the other partners. Nor did Ms Boys suggest that in fact he was in a position to give the building to her in any event. I therefore reject the suggestion that any clear and unequivocal promise as pleaded by Ms Boys was ever made to her with respect to the Ford building.

The law – promissory estoppel

[69]               As to the necessary ingredients of the cause of action of promissory estoppel, I adopt the statement of Richardson J in Burbery Mortgage Finance & Savings Limited v Hindsbanks Holdings Ltd [1989] 1 NZLR 356 at 361 as follows:

... It is well settled that where one party has by words or conduct made to the other a clear and unequivocal promise or assurance intended to affect the relations between them and to be acted on accordingly, then once the other party has taken him at his word and acted on it, the one who gave the promise or assurance is bound by that assurance unless and until he has given the promisee a reasonable opportunity of resuming his position (16 Halsbury’s Laws of England (4^th ed) para 1514)

[70]               Promissory estoppel has essentially been subsumed within the concept of equitable estoppel in recent years. The principle has been expressed as the law’s concern with the injustice or unfairness of resiling from underlying assumptions that have been acted upon (see for example judgment of Cooke P in Gillies v Keogh [1989] 2 NZLR 327). Both parties accept the key to promissory estoppel is unconscionability.

[71]Thus to establish such an estoppel, three elements need to be proved:

(1)Encouragement of an expectation or belief by a promissor.

(2)Reliance by the promissee on that belief. Two caveats to this principle. Firstly, the promissor must intend or know the promissee will rely on a promise (see Crabb v Arun District Council [1975] 3 All ER 865). Secondly, it must be reasonable for the promissee to rely upon the promise. (See Gillies v Keogh (supra)).

(3)There must be detriment to the promissee as a result of reliance upon the promise. Relevant here is the proposition that abstaining from action may be sufficient to constitute detriment (see Australasian Temperance and General Mutual Life Association v Johnston [1933] NZLR 408).

[72]               Detriment in a defacto relationship was considered in Gillies v Keogh (supra) at 347:

Applying estoppel principles

Approaching the general issue with those two caveats in mind I consider that, with some limitations, the doctrine of estoppel provides an appropriately principled approach, short of legislation, to the resolution of property disputes arising on breakdown of defacto relationships in cases where the parties have not dealt expressly with the matter, and an actual common intention cannot be discerned. The three elements, encouragement (of a belief or expectation), reliance and detriment have to be considered in the light of the actual relationship of the parties, the way they lived their lives. The existence of a sexual relationship standing alone is obviously not enough; nor is mixed flatting even though it may involve a degree of pooling of resources to meet current living needs; and those living together may have investments or other assets which they clearly wish to exclude from the pool.

But where there is a defacto relationship of substantial duration in which, as in marriage, the parties contribute to their lives together in their different and agreed ways, through financial contributions and through other services, and family assets are acquired or improved for the purposes of that relationship, but with title to an item of property being taken or retained in the name of one alone for reasons not inconsistent with a sharing of property, those circumstances, without more, may lead to the ready inference that contributions made in those circumstances were made in reliance on an expectation of sharing and constitute a detriment to the other party.

[73]               As to promissory estoppel in a defacto property claim see Lankow v Rose [1995] 1 NZLR 277, especially the judgment of Gault J at 288, 289. The approach of Hardie Boys J in Lankow v Rose sets an appropriate basis to consider the task given in cases such as this. At p281 Hardie Boys J said in reply to a submission that the defacto wife was entitled to nothing:

Such a contention would have prevailed once upon a time. But in my  opinion it is not tenable on the facts of this case, and in the light of the development in recent times of what has always been a fundamental principle of equity, that a person will not be permitted to assert strict legal rights in an unconscionable manner: see for example the speech of Lord Diplock in Gissing v Gissing [1971] AC 886 at p 905, the judgment of McMullin J in Pasi v Kamana [1986] 1 NZLR 603 at p 607, and that of Cooke P in Gillies v Keogh [1989] 2 NZLR 327 at p 331.

[74]               Hardie Boys J observed that different common law jurisdictions in Canada, England and Australia have  developed  (different  but)  similar  approaches.  In  New Zealand various approaches have been taken from estoppel, common intention trusts to constructive trusts. He concluded that (p282):

... from the ordinary circumstances of a shared life the requisite expectation properly can, and will, be inferred. To displace the inference, some  particular feature must be demonstrated, as it was in Gillies v Keogh, where one party made it clear to the other at all times that she was asserting the property was hers and hers alone: see p 340

[75]               Typically these approaches have been in the context of direct contributions, financial or otherwise to an asset to which is then created an expectation of a share in the property. The promissee’s work and contribution in relation to the asset has been identified as the detriment which would go financially unrewarded without the “promise” being given effect to.

[76]               In considering detriment, the benefits received during a relationship will be relevant. While expressed in the context of a constructive trust claim Hardie Boys J in Lankow v Rose (supra) said:

The contribution must manifestly exceed the benefits. Putting it in conventional estoppel terms, the plaintiff’s contributions must have been to his or her detriment; or in Canadian terms there must have resulted by the end of the relationship in the enrichment to the juristically unjustified deprivation of the other.

[77]               In an estoppel context there must be detriment after taking account of the benefits during a relationship. Only then will an unconscionability arise for which equity requires redress.

Remedy – promissory estoppel

[78]               I agree with McGechan J in Stratulatos v Stratulatos [1988] 2 NZLR 424 at 438 when he said:

What is clear, in my view, at the end of the day, is that the range of available remedies should not be cluttered by arbitrary rules. The relief available, broadly speaking, is that which is necessary to cure the underlying unconscionability: nothing more, and nothing less.

[79]               Indeed any other approach would be contrary to the principles of equity. The plaintiff submits, however, that the “usual” order especially in defacto property claims has been a fulfilment of the expectation created. Thus the plaintiff submits that a “reliance” based assessment of damages is inappropriate in defacto property claims where attempting to value lost opportunities in life illustrates that promise fulfilment is a better measure of damages. The defendants submit this is entirely the wrong approach. They submit that a simple “promise fulfilment” assessment of damages ignores benefits received during a relationship and ignores the “equity” of the situation by potentially ordering windfall damages wholly out of proportion to any detriment suffered. They stress that damages in estoppel are not based on some form of specific performance of the promise but are designed to reflect the unconscionability of the circumstances especially including the “proportionality between the expectation and the detriment”. (See Jennings v Rice [2002] EWCA  159 CA at para 36).

[80]               The defendants say two comments by Cooke J in Gillies v Keogh support this argument. At p333 he said:

In defacto union cases often, though not always, the degree of sacrifice by one partner will be a guide to the measure of any unjust enrichment of the other.

[81]And at p334:

Subject to what has just been said, a second and equally obvious  major factor to be weighed is the value of the broadly measurable contributions of the claimant by comparison with the value of the broadly measurable benefits received. Contributions to household expenses, or to maintenance, repairs or additions, may amount to no more than fair payment for board and lodging and the advantages of a home for the time being. More than that is commonly needed to justify an award.

[82]               The value of the performance of household services and its place in contemporary society has recently been expressed by Baragwanath J in Taylor v Watson (CA 271/01, 6 August 2002) in this way:

[12] . . . The judiciary, like the New Zealand Parliament in enacting last year’s legislation, have come to realise that a narrow focus on contributions of finance and direct dealing with assets, that disregards the human contributions which facilitate the process of asset acquisition, is a flawed economic perception and also unjust. The topic has received careful consideration and somewhat different treatment in the jurisdictions with which ours has most in common.  It may be noted that the English Law Commission has  recently found the issues to be of such difficulty and complexity as to be beyond the scope of legislation; instead they have been left to the continuing development of the judge-made principles of equity. In New Zealand the courts in developing and applying such principles have sought to steer a just and sensible course between on one side what has been called "an exercise in general wealth distribution"  (see Nuthall v Heslop (1995) 13 FRNZ 518, 521) and on the other a futile search for certainty; futile because it is not feasible to retrace each contribution of each party and its enduring result. The courts’ approach is conventionally expressed in terms of making an award corresponding to the reasonable expectation of the parties as generally commensurate with their respective contributions to the property: see Lankow v Rose [1995] 1 NZLR 277 (CA). But regard must be had to the reality that in the case of a lengthy relationship, to which both parties have committed their complementary talents and resources, a just result can be depicted only in primary colours employing a broad brush. . . .

. . .

[16] There is force in the submissions as to the value of Mr Taylor’s contributions. But they do not in our view meet the fundamental point of the value of those of Ms Watson. Throughout the relationship she was the homemaker and in addition did whatever she reasonably could to assist with the practical work in which Mr Taylor was so heavily engaged. It is indisputable that in the latter sphere her contribution does not compare with his. But the  intangible value to Mr Taylor of the constant company and loyal devotion of a loving partner who gave him and the relationship her all is to be characterised not as ancillary but as a core contribution to Mr Taylor’s capacity to relocate, acquire, develop and maintain assets in his name. Here, as in Hunter v Copland (2001) 21 FRNZ 28, it is simply impossible to unravel decision by decision and asset by asset how it was that the various properties came to be acquired and in some cases disposed of to advantage en route to the position as at separation. In King v Church [2002] NZFLR 555, 567 the matter was put this way

[33] Here there was the very kind of division of family responsibilities that has in the past been common between husband and wife. The law has moved on from a presumption that only financial contributions to a matrimonial home are significant, towards one that the different contributions are complementary and of equal worth. The values that have led to the Relationships Act existed prior to its enactment. The performance of household duties is now taken for granted as warranting recognition on division of property following separation of the parties of a male-female relationship. While New Zealand judge-made law has not gone as far as the Canadian by treating all assets of the parties as components of a “joint family venture”, the concept of a “family home” and the value of household duties as a contribution to it has long become deeply seated in the New Zealand values system. It would in our view be contrary to that values system, by which the Court must be guided in developing the common law, to excise from consideration of “contributions to the home” the performance of household duties – whether provided by a female or a male.

[83]               While these comments were made in the context of a constructive trust claim they have relevance to a claim in estoppel and to detriment.

[84]               I do not consider it is appropriate, as the plaintiff urges, to approach this case with the presumption that if I find there is a promise, it should be fulfilled because

this  is  a  defacto  property  claim.     I approach the matter of remedy with these principles in mind.

(1)The overriding consideration is to cure the unconscionability.

(2)There must be a proportionality between the expectation and the detriment. This is essentially an expression of equity.

(3)The provision of household services can constitute detriment including loss of these opportunities and such services should be seen in a contemporary context.

(4)Benefits received during a relationship are relevant to detriment and remedy.

Discussion : Promissory estoppel

[85]I turn now to the facts of this case. I am satisfied that:

(i)There was an enforceable promise (see paragraph [56] of this judgment).

(ii)That Mr Calderwood did encourage Ms Boys to believe his promise.

(iii)That Mr Calderwood  intended  his  promise  be  relied  upon  and  Ms Boys did, reasonably, rely upon it.

(iv)That as a result of this reliance Ms Boys suffered detriment.

[86]               As to (ii) above as I have observed the whole context of the promise illustrated it was intended to be accepted by Ms Boys. Mr Calderwood made the promise in the context of concern expressed by Ms Boys about her future vulnerability. Mr Calderwood reassured her with the promise that he would look after her.

[87]               As to (iii) above there is no doubt that Ms Boys did rely, and it was reasonable for her to rely, upon the promise. Again the context is important. Understandably Ms Boys  felt  vulnerable  financially.  She  was  not  married  to  Mr Calderwood. She had given up her employment and her house. Reasonably she looked for an assurance for the future. Mr Calderwood  gave  that  assurance  and  Ms Boys relied upon it.

[88]               I turn now finally to (iv) detriment. This was a relationship of 17 years. The plaintiff, I am satisfied, was a hardworking person who dedicated herself to the care of the first defendant, the houses and the domestic arrangements. I am satisfied that while Mr Calderwood did not expressly tell Ms Boys that she should not work, he made it clear that any such employment should not interfere with his domestic needs. I am certain, for his business and personal needs, he wanted an agreeable, well dressed, hardworking and available companion. Ms Boys fulfilled those  expectations until I suspect she became rather bored with the passive role she was to play. I am satisfied that Ms Boys kept the two large houses immaculately. I am satisfied she was a hardworking and excellent hostess, at a family and business level, for Mr Calderwood. Her contribution to the family was I think quite out of the ordinary with regard to Mr Calderwood’s parents. I am satisfied that Ms Boys did make a special contribution to their care over a considerable period of time. I note that Mr Calderwood’s business took him away from home often and that therefore the care of Mr Calderwood’s elderly parents fell to a not insignificant degree on Ms Boys. I acknowledge in balance that Mr Calderwood was, in his turn, generous in loaning money to Ms Boys’ family.

[89]               I am satisfied Ms Boys stayed with Mr Calderwood in part because of his promises to look after her. I am satisfied that if she had been told, when their relationship began, that at the end of the relationship in 17 years’ time she would have no house and because of her age and qualifications modest employment opportunities she would have hesitated to live with Mr Calderwood. I accept that when the relationship began Ms Boys had limited employment opportunities and limited assets. She did not claim to have sacrificed a well paid career. She did however sell her house losing the significant inflationary effect of the Auckland housing market. What earnings she had from her part-time employment I am

satisfied she contributed to the household expenses generally. While I accept the defendant’s claim there was no need for her to do so she did contribute in this way. Similarly when she sold her house she lent the capital, $120,000, to the Aberdeen Trust. The interest she received was also used for household expenditure.  And so in a financial sense Ms Boys contributed what she had.

[90]               Part of Mr Calderwood’s success was his personal approach to many investors. Putting together “the deal” obviously involved many hours typically beyond ordinary working  hours  for  Mr  Calderwood.  Sometimes  this  involved Ms Boys’ presence at functions but typically it did not. This did involve Mr Calderwood’s absence from the home and the resultant loss of companionship for Ms Boys. This is no doubt part of the give and take of the relationship. However,  this is typically expressed in the idea that the absence of a partner working long nights is ultimately for the benefit of the relationship and the parties’ long-term lifestyle. Seen in this way the detriment becomes clear.  Ms Boys accepted the loss of companionship because she was told she would be looked after (whether separated or not) as a result of Mr Calderwood’s efforts.

[91]               As against these detriments, there were considerable benefits. Ms Boys did enjoy an excellent lifestyle involving expensive housing including a beach house, expensive cars and holidays. Essentially, she  wanted for nothing in her lifestyle.  Her son from her first marriage was treated similarly. She did not have to use her capital from her marriage to support herself in any way. She was free to use it as she chose. She had considerable disposable income. These considerable benefits must also be taken into account.

[92]At the end of the relationship she had:

(a)Her capital from her house of $120,000. However there had been no capital growth of this sum over 15 years;

(b)Household  furniture  in Prospect Terrace.    Given it is now second- hand I consider it is likely to be worth no more than $15,000;

(c)A Mercedes motor vehicle valued at perhaps somewhere between

$80,000 and $100,000;

(d)Shares worth $21,918;

(e)Jewellery worth somewhere between $75,000 and $100,000 if sold; Total $312,000 - $357,000.

[93]               Of that capital approximately $175,000 to $230,000 came from the relationship. I note that Ms Boys apparently came to the relationship with some furniture and so I do not count the Prospect Terrace Furniture in this analysis.

[94]               During these 17 years, indeed since 1991 Mr Calderwood and his various trusts have been able to accumulate assets worth somewhere between $17.3 million and $20 million. I accept in doing so he has exhibited exceptional skill. When the parties’ relationship first began in 1985 he (and the trusts) seem to have been worth approximately $7 million. That had decreased by his bankruptcy in 1991 although the Calderwood Trust still had significant assets. I also accept that it could not be said Ms Boys made any direct contributions to any of Mr Calderwood’s businesses. While I accept in a general sense Mr Calderwood may have discussed his day’s work with Ms Boys and sometimes Ms Boys may have been taken to look at property developments in the weekend it would be an exaggeration to say she contributed in any direct way to his business.

Ostensible Authority

[122]           Richardson J in New Zealand Tenancy Bonds v Mooney [1986] 1 NZLR 280 at 283 identified the essential elements of ostensible authority as:

The doctrine of apparent or ostensible authority applies where a person by words or conduct represents or permits it to be represented that another person has authority to act on his behalf: in such a case he is bound by the acts of that other person with respect to anyone dealing with him as an agent on the faith of any such representation, to the same extent as if that other person had the authority that he represented to have, even though he had no actual authority.

[123]           The key is that the authority for the agent (here Mr Calderwood) must be given in some way by the trustees so creating, when viewed objectively, an apparent or ostensible authority for him to bind the other trustees. Typically any ostensible

authority will need to be inferred from the circumstances. If the agent is cloaked in the ostensible authority of the trustee by the trustees then the agent can bind the trust. Fundamentally, therefore, the plaintiff must establish that when Mr Calderwood made his promise regarding the future conduct in relation to Ms Boys that he had the ostensible authority of the trustees to do so.

[124]           The plaintiff submits that given the evidence that the trusts were always treated as if Mr Calderwood’s and the trustees always acted on Mr Calderwood’s instructions then the trustees clearly left it to Mr Calderwood to make the decisions with respect to the trusts. The defendants say the evidence does not establish any such authority was given or permitted by the other trustees. They submit in any  event that one trustee simply cannot delegate his or her power to another trustee (see Rodney Aero Club Inc v Moore [1998] 2 NZLR 192 and Niak v Macdonald [2001] 3 NZLR 334 (CA)). In Niak the Court said per Patterson J at 338:

[16]It  is an established rule of trust law that  a trustee must not  delegate his or her duties or powers, not even to co-trustees. Delegation is, however, allowed where such delegation is specifically permitted by the trust instrument, is specifically permitted by statute, or is practically unavoidable and is usual in the ordinary course of business and the particular agent is employed in the ordinary scope of his or her business – see Garrow and Kelly’s Law of Trust and Trustees (5th ed, 1982) at p 256. A trustee has a duty to act personally and this duty requires trustees to be unanimous in any decision they make. In Duncan v McDonald [1997] 3 NZLR 669, this Court said at p 679:

“It can be accepted that the power of attorney was legally ineffective in so far as it purported to authorise someone to exercise a co-trustee’s powers, for a trustee may not make a general delegation of powers and duties; and, as Mr Simmonds gave no authority for the carrying into effect of the specific transaction, Mr Duncan was not acting in terms of s 29(1) of the Trustee Act 1956.”

[125]           These cases do not suggest that one trustee cannot act on a specific occasion for all if he or she has the approval of all the trustees. Indeed in a practical sense this identifies the way in which many private trusts actually function. It is also clear given the admonition against delegation of responsibility by trustees that any  claimed approval by one trustee to act in a particular way by all trustees must be clearly established.

[126]           Here the plaintiff has been unable to establish such clear authority. There can be no doubt that Ms Boys knew that many of the assets including Red Bluff Rise and Leigh were owned by trusts. Having heard her give evidence, I consider she did not effectively turn her mind to the position of the various trusts in relation to the promise  made  to  her  by  Mr Calderwood.   I  think  she  simply  assumed  that    Mr Calderwood would be able to make good on his promise. The correspondence referred to of August 1995 as well as the earlier letter of 1990 and the letters post separation, do not establish that the trustees authorised Mr Calderwood to agree to commit the trust assets to his promise. There is simply no evidence that the trustees agreed to this course of action at all. Mr Woolley, one of the trustees, did not even have put to him in cross-examination that he agreed to such an arrangement and given that Mr Calderwood is not a beneficiary in some of the relevant trusts, it would be difficult to believe a lawyer and trustee would agree to such an arrangement at least with respect to those trusts. Nor was it suggested to Mr Calderwood that he had authority from the trustees to make the promises he did. Finally Ms Boys did not assert that she believed Mr Calderwood was acting with the approval of all the trustees. Therefore for the reasons given I cannot see that Mr Calderwood had any ostensible authority to bind the trusts.

Alter ego

[127]           Finally the plaintiff submits the Courts are entitled to ignore a trust structure if  they  are  satisfied  that  the  trust  structure  was  a  sham  and  that  effectively  Mr Calderwood treated the trusts as his alter ego (see Prime v Hardie (2002) 22 FRNZ 553 and Glass v Hughey [2003] NZFLR 865). I accept the proposition that it is open in such cases involving relationship property to conclude that a trust is a sham and the alter ego of the settler. However the facts here are well short of establishing such a situation. Firstly Mr Calderwood as I have said is a beneficiary  of some but not all of the trusts. Secondly, the correspondence I have referred to from Mr Calderwood to the trustees put proposals to the trustees with respect to the trusts. This was not the action of someone who has used the trust property of his own. There was, however, as I have recounted, some evidence of attempts to direct trustees by Mr Calderwood. It is not extensive and does not establish that the trusts are his alter ego. I am not satisfied therefore that the plaintiff can establish on the evidence that the trusts are Mr Calderwood’s alter egos. For these reasons, therefore,

the plaintiff’s claim that any judgment can be entered also against the trusts is rejected.

Quantum

[128]           I take into account in assessing quantum, the capitalisation figures and (I take into account) the benefits received and previously identified. It is difficult in the balance to assess what lost opportunities Ms Boys has had. I accept that she did not have significant assets in 1985 nor were her employment or academic qualifications that which would be likely to result in a high paying job. On the other hand there is the probability of marriage and accumulation of assets in a partnership with a husband. She would have recognised the need for retirement income and so no  doubt ordered her affairs accordingly as well as she was able. Because of the  promise made to her she considered she had to do none of this because she was already provided for.

Value of defendant’s assets

[129]           Both parties called expert accounting evidence regarding the net value of the assets owned  by  the  defendants  at  separation.  Mr  McCurrach  who  has  been  Mr Calderwood’s and the trusts’ accountant for a number of years valued the assets at a net $17.3 million (approximately). Mr Hussey, an independent accountant who gave evidence for the plaintiff said the net assets were worth $20 million (approximately). Because of the way in which  I approach the question of damages  in this case the difference is not important nor is it necessary for me to make findings regarding the differences. I assume a 2002 net value of assets halfway between the two figures at $18.6 million.

[130]           I now turn to consider the question of quantum. I have identified the  approach to remedy where the cause of action is promissory estoppel.  I consider  first quantum based on a constructive trust claim. In doing so I acknowledge the inconsistency with my trust liability findings. However, I consider that in the search for a proper basis for an award of damages for promissory estoppel in this case, given my findings regarding Ms Boys’ contributions, such an analysis is useful. I consider that, as part of the search for a proper sum of damages to meet the unconscionability, it is also helpful to assess the capital that would be required to meet the promise that I consider was made.

[131]This analysis underlines the major contribution to the house properties over

17 years plus a  very  modest  contribution  to  the  extensive  business  assets  by  Ms Boys. I keep in mind it has been the special talents of the first defendant that has provided an exceptional level of assets. The Red Bluff Rise and Leigh properties have a combined net value of $5.6 million in 2002 and about $8.1 million by 2004. The Leigh land was owned by Mr Calderwood at the commencement of the relationship thus reducing the value of these two assets as far as the joint efforts of the parties are concerned. An award of 30 to 35 percent of the net value of the two house properties could fit the equity here. This would equal $1.5 million - $1.7 million in 2002; $2.65 million - $3.01 million in 2004. I consider a further five percent of the net value of the other business assets could be justified. The other assets, which I took to be valued at $18.6 million (half way between the disputed figures of $17.3 million and $20 million) less the net value of the houses at $5.6 million was $13 million thus five percent is $650,000 making a range of

$2.15 million - $2.35 million in 2002, to $3.3 million - $3.66 million in 2004.

[132]           As an alternative I consider Mr Hussey’s evidence and Mr Hagen’s critique of what capital is required to meet the promise Ms Boys identified. I take into account my conclusions as to the terms of the promises actually made. This again is no more than a factor in assessing quantum to purge the unconscionability.

Analysis of capital required

[133]           I now turn to an assessment of what capital might be required to meet the promises as alleged by Ms Boys.

[134]           Mr Hussey was asked to assess the capital value of what the plaintiff identified were promises made by Ms Boys. He assessed the capital sum required to give effect to the promises as follows:

8.For the reasons that  I explain later in this  affidavit,  I assess that,  as of 2002, the annual sum required to fund the contended promise was

$376,000 and that $9,493,926 would have been required to have been paid in 2002 in order to fund the expenditure of $376,000 p.a. for the balance of Ms Boys’ life as is detailed in the table below:

[135]           He reduced that to $8.9 million based on the acceptance by the plaintiff that the claim for a separate sum for overseas travel should be abandoned and subsumed within the general expenses claim. The first defendant called Mr Hagen, an accountant, in reply. There are several underlying assumptions in the calculations that the parties agree on and several they do not. I reproduce Mr Hagen’s table one from his evidence which identifies the areas of agreement in dispute between him and Mr Hussey relating to these underlying assumptions.

[136]           I do not consider that equity in this case in fact requires a strict mathematical calculation to fulfil the promises for reasons previously given. However such an analysis can be a helpful guide in assessing the overall sum required. I consider that it is a helpful guide in assessing the capital required for a particular lifestyle. I therefore consider the differences between the assumptions of Mr Hussey and Hagan and the facts which are said to give rise to the assessment of capital required.

[137]           Firstly the assumptions set out in table one above. The parties differ on the long term inflation rate. The “long term” in this case is the plaintiff’s life expectancy of 32 years. Mr Hagen’s rate at two percent is a mid point between the inflation rate provided for in the Reserve Bank of New Zealand Act of 1% to 3%. Mr Hussey’s rate is based on a consideration of the judgment of Venning J in Accent Management v CIR (2005) 22 NZTC 19,027. There the long term inflation rate for New Zealand was assessed at between 2.5% and 5.75%. I consider Mr Hussey’s evidence is to be preferred on this point. Mr Hagen has simply assumed that the Reserve Bank Act will always apply and that the Reserve Bank will always be able to achieve an average inflation rate within the range provided. Mr Hussey’s conclusion arises  from significant expert economic evidence and analysis given in the Accent Management case. Mr Hussey’s conclusion seems more solidly based on actual analysis rather than Mr Hagen’s best guess. I therefore prefer Mr Hussey’s evidence on this and accept his rate at 2.75 percent. This reflected I note the bottom range of the inflation figures available.

Return on investment

[138]           Both parties agree that the long term government stock rate of 6.5% can typically be used. Where the investment is in property Mr Hagen says there are returns available on average at one percent better than the government stock rate of

7.5 percent. There is no evidence what investments Ms Boys anticipated with any capital sum she  receives.  Both  accountants  agree  the  key  for  investments  for Ms Boys should be the risk free rate. On that basis I consider the 6.5 percent figure Government rate is the appropriate return rate to be used. Property return figures are speculative and not based on the evidence.

Marginal tax rate

[139]           Mr Hussey has assumed a tax rate  of  39  percent,  the  top  personal  rate. Mr Hagen suggested 33 percent, the tax rate for trusts, because he had been told the capital may be invested through a trusts structure. Any capital payment is payable to Ms Boys as the plaintiff. Therefore the tax rate used should be the individual rate. There is nothing to establish any money invested will be invested by her in a trust. It would be speculation to assume so. I therefore adopt a 39 percent tax rate as the appropriate rate.

[140]           I turn now to Mr Hussey’s calculations, the assumptions they are based on and Mr Hagen’s response. Again Mr Hagen has produced a comparative table which I include below as being helpful:

8.Table 2 illustrates my assumptions in relation to the annual value of  the “promises” in comparison to Mr Hussey’s before arriving at overall value as at separation date in January 2002.

I consider each entry in turn.

Use of residence

[141]           This is based on a proposition that a property similar in value to Red Bluff Rise of $6 to $7 million, would cost on average at least $2,000 per week  to  rent.  Mr Hagen assumes $1,750 per week. There is little between the two accountants here. The evidence of $2,000 per week rental is based on a $2.5 million house. Rentals are apparently unlikely to increase beyond this weekly sum with increasing house value. I would not have been prepared to accept a calculation based on the rental of a $6.5 million house. For reasons previously given, I do not consider that the promise made was to allow Ms Boys to occupy a $6.5 million house. The $2.5 million value on which the weekly rent of $2,000 was based is, I note, less than 50% of the value of Red Bluff Rise on separation.  I would be prepared to allow rental of

$1,500 per week which based on the information provided would allow Ms  Boys  to

rent a house valued at well over a million dollars. The capital required to rent such a house based on Mr Hussey’s figures would be approximately $2 million.

Use of Leigh

[142]           I have accepted that the use of Leigh was not an independent promise to make the house of Leigh available until Ms Boys’ death but the provision of a comfortable holiday house for four weeks per annum for life.   I therefore accept   Mr Hagen’s value at $132,000. This figure requires adjustment to account for the underlying assumptions that I have adopted from Mr Hussey’s analysis. This would increase the value to approximately $160,000.

Use of Fiji

[143]           The evidence establishes two weeks use of a villa in Fiji and thus Mr Hagen’s calculations are essentially correct at $150,000 plus an additional amount to take  care of the differing underlying assumptions. I assume a total of $180,000.

General lifestyle

[144]           The annual general lifestyle figure is set by the plaintiff at $132,000 net of tax. This is the amount the plaintiff says she needs to continue her lifestyle independent of her housing, both residential and holiday, her holidays (to Fiji) and the annual cost of keeping her Mercedes vehicle “current”. This sum is  based  on Ms Boys’ evidence that on average since separation she has had to spend this sum to live. This is I note independent of her housing costs claim.

[145]           I consider this sum is well in excess of what is reasonably required to ensure Ms Boys does not have to work again and can live in the way that I have identified. The capital cost of a residence is based on a rental payment which includes within it the cost of rates and maintenance for the house. The $132,000 per annum was based on an analysis of Ms Boys’ expenditure during 20 months or so after  separation.  The $11,000 per month average included payments of $3,000 per month on the mortgage at Prospect Terrace. The true average therefore discounting the mortgage payments was $8,000 per month. The plaintiff’s expenditure pre-separation, even accounting for Mr Calderwood’s purchase of most of the bulk groceries was in my view well below $8,000 per month. There is limited pre-separation material on which to make this assessment. There are however American Express and Visa card

statements of the plaintiff’s that illustrate for a few years prior to separation each account ranged between $1,000 and $2,000 per month with a total average of $2,800 from 1999-2001. In addition Ms Boys had her house keeping of $1,500 per month and as I have remarked, Mr Calderwood bought some although not all of the food, mostly the bulk food purchases. I accept the range of expenditure on the household, keeping in mind there were two persons living there, was in the $5,000 to $8,000 range. Given there were two persons at the house and the cost of keeping one is less, an allowance of $5,000 per month expenditure seems generous. This is approximately half that claimed by the plaintiff. A suitable capital sum based on Mr Hussey’s figures is $1.5 million.

Overseas trip

[146]           As I understand it the plaintiff accepts that this sum can now be included within the general expenses claim. I note however for completeness that in 17 years the parties appear to have gone on three significant trips beyond Fiji which could have been taken into account.

Vehicle costs

[147]           The plaintiff assumes a replacement Mercedes motor vehicle every three years. The first defendant a top of the range Japanese car. This difference ($507,000 for the plaintiff, $223,000 of capital for the defendant) is very much about the perception of the promise made. As I have observed I consider that Ms Boys accepts the promise made was not to ensure nothing changed at all for her financially. This was clearly unrealistic and not what either Mr Calderwood intended or Ms Boys thought. Expecting therefore to have a new Mercedes motor vehicle every three years is I consider an expectation based on an unrealistic assessment involving no change from the parties’ previous circumstances. I accept as appropriate half the plaintiff’s figure of $250,000.

Discussion

[148]Collectively the capital required on this analysis would be approximately

$4 million. From the $4 million should be deducted in any event the value of the assets taken by Ms Boys, the Mercedes car, the jewellery, the shares and furniture. Those total between $220,000 and $250,000 a total therefore of approximately $3.75 million. To use the other comparators this sum of $4 million would be

approximately 35 percent on the net assets accumulated by Mr Calderwood and the trusts from commencement of relationship to separation. At separation the value of the assets was $18.5 million and at commencement of the relationship approximately

$7 million. Another analysis of relevance is that this sum of $4 million is more than 50 percent of the net value of the two house properties at Red Bluff Rise and Leigh at separation in 2002.

[149]This compares with the range of $2.075 million—$2.27 million in 2002 and

$3.27—$3.6 million in 2004 from the constructive trust analysis.

[150]           I consider overall the capital figure required to give effect to the promise and as assessed in this judgment rather inflates the sum required to meet the unconscionability arising from the failure to honour the promise. It fails to take into account the significant benefits Ms Boys and her son enjoyed during her lifetime. This was a significant factor both enjoying as I have detailed a luxurious lifestyle.

[151]           Balancing all factors I consider that a figure of $3 million is just. That sum would exclude the assets currently in Ms Boys’ possession. This sum would provide Ms Boys with $1.5 million to purchase a house. While it may not be to the standard the parties had during their relationship, a house valued at $1.5 million in a New Zealand context, even in Auckland, is still in the very top price range of quality housing in Auckland. It takes into account the house is solely for Ms Boys. It would then leave Ms Boys with $1.5 million to invest. At 6.5 percent the  Government  bond rate this would give her a pre-tax income of $97,500. In addition she has an expensive motor vehicle along with furniture from the Prospect Road House and her shares and jewellery. This  is  certainly  sufficient  income  and  assets  to  enable  Ms Boys to live very well without having to work.

Judgment

[152]           For reasons given the award of damages is with respect to the promissory estoppel cause of action against the first defendant only. It is not concerned with what assets the first defendant may or may not have. All causes of action against the second to fifth defendants are dismissed. The plaintiff’s cause of action in common intention trust against the first defendant is also dismissed. As to the constructive

trust cause of action I have found this established also against the first defendant.  For the reasons given and because this was an alternative cause of action to promissory estoppel I have given no final assessment on what trusts could be imposed over property of the first defendant to reflect this cause of action.

Interest

[153]           The plaintiff sought interest on any sum awarded. I am not prepared to make any order for interest. Ordinarily given the assessment of damages was essentially based on the parties position in 2002, interest would follow. However, in this case the defendant has provided free of any cost to Ms Boys a residence at Prospect Street along with, for a period of 20 months, monthly expenditure averaging $8,000 (deducting the $3,000 mortgage payments). These contributions are equivalent the defendant says to a sum of $358,000. I have no reason to doubt that sum. In those circumstances therefore I do not see that it would be appropriate to order interest since 2002 on the $3 million capital sum.

Costs

[154]           The plaintiff may file memoranda as to costs within 14 days. The first defendant and the second defendant and the fifth defendants (separately) within a further 14 days. The plaintiff will need to respond particularly to the second to fifth defendant’s memorandum. She has a further 14 days within which to do so.

“Ronald Young J”

Solicitors

Snedden & Associates, Auckland, for Plaintiff McVeagh Fleming, Auckland, for First Defendant

Morgan Coakl, Auckland, for Second, Third, Fourth and Fifth Defendants