Prescott v Thompson
[2020] NZHC 3322
•15 December 2020
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV 2019-404-002190
[2020] NZHC 3322
BETWEEN PETER RICHARD PRESCOTT
Plaintiff
AND
VIOLET GEORGINA THOMPSON
First Defendant
AND
THE KINNEY STEEN THOMPSON TRUST
Second Defendant
AND
THE KINNEY STEEN THOMPSON LIMITED
Third Defendant
Hearing: 19 November 2020 Counsel:
No appearance by the Plaintiff
R Harrison QC for the Defendants
Judgment:
15 December 2020
JUDGMENT OF VAN BOHEMEN J
This judgment was delivered by me on 15 December 2020 at 2.00pm Pursuant to Rule 11.5 of the High Court Rules
…………………………
Registrar/Deputy Registrar
Solicitors/Counsel:
R Harrison QC, Auckland Boyle Mathieson, Auckland
Blackstone Chambers, Auckland
PRESCOTT v THOMPSON [2020] NZHC 3322 [15 December 2020]
Introduction
[1] In October 2019 the plaintiff, Peter Richard Prescott, commenced a proceeding against his former partner, Violet Thompson, the Kinney Steen Thompson Trust, a trust which Ms Thompson settled in 2005 and which invests in and administers rental properties (the Trust), and Kinney Steen Thompson Ltd (KSTL), the trustee of the Trust. Subsequently, Mr Prescott discontinued the proceeding with respect to the Trust but maintained his claims against Ms Thompson and KSTL as trustee.
[2] The statement of claim alleges five causes of action, most of which refer to sections of the Property (Relationships) Act 1976 (PRA). The relief sought is an order under the PRA to void a contracting out agreement that Mr Prescott and Ms Thompson entered into in accordance with s 21 of the PRA.
[3] By notice dated 22 January 2020, the defendants appeared under protest to object to the High Court’s jurisdiction to hear the proceeding on the grounds that Mr Prescott’s claims were purportedly brought under the PRA and were out of time, having regard to s 24(1)(c) of the PRA, and the High Court lacked jurisdiction to hear the claims.
[4] In June 2020, Mr Prescott applied to set aside the defendants’ protest to jurisdiction. That application was opposed by the defendants.
[5] The application to set aside the defendants’ protest to jurisdiction was set down for 19 November 2020. Because Mr Prescott failed to appear, the protest to jurisdiction was heard by way of formal proof.
Relevant background
[6]According to Ms Thompson:
(a)She and Mr Prescott were in a de facto relationship from October 2011 until March 2012 and from July 2012 until October 2016
(b)In November 2013, Ms Thompson and Mr Prescott signed a contracting out agreement under which Mr Prescott agreed that any contributions made by Mr Prescot to the relationship or to any property would not result in Mr Prescott obtaining an interest in Ms Thompson’s property;
(c)The relationship ended on 19 September 2016.
[7] Mr Prescott denies that the relationship ended on 19 September 2016. He says that from that date he and Ms Thompson entered into a “temporary living apart arrangement” and that the actual date the relationship ended requires a judicial determination.
Related proceedings
[8] In 2017, Mr Prescott brought a claim in the District Court in Auckland alleging that Ms Thompson had made a contractually binding promise that the Trust would sell him a property in Huntly at a fixed price and would take into account the value of work he did on the property. On 8 March 2019, Judge Cunningham dismissed Mr Prescott’s claims.1
[9] Mr Prescott’s appeal against that decision was deemed abandoned for failure to pay security for costs.
[10] Mr Prescott then applied for judicial review of Judge Cunningham’s decision and earlier decisions by the District Court not to grant applications by Mr Prescott to adjourn the District Court hearing.
[11] On 15 May 2020, Palmer J dismissed Mr Prescott’s judicial review application.2
[12] In his decision, Palmer J reviewed Mr Prescott’s conduct during the District Court proceeding and Mr Prescott’s conduct during the judicial review proceeding. Palmer J stated:
1 Prescott v Thompson [2019] NZDC 4646.
2 Prescott v Thompson [2020] NZHC 1004.
[27] I dismiss the application for judicial review. … I do note that Mr Prescott is clearly litigious. The evidence before me indicates he takes technical points, his evidence is unreliable and he uses hyperbolic language to paint himself as a victim and others as oppressors. If he carries on as he has been, he runs the risk of a court considering whether he is vexatious in the future and whether he should be restricted under s 166 of the Senior Courts Act 2016 from commencing proceedings.
[13] In a subsequent decision, Palmer J awarded costs against Mr Prescott on a 2B basis with an uplift of 25 per cent.3
Developments in this proceeding
[14] Between 23 January 2020 and 23 March 2020, Mr Prescott and Mr Harrison, counsel for the defendants, filed various memoranda regarding Mr Prescott’s claims and the defendants’ protest to jurisdiction. In his memoranda, Mr Prescott explained that he had commenced the proceeding in the High Court because he had understood that the value of the claim he wished to make was beyond the jurisdiction of the District Court. In his memoranda, Mr Harrison noted, among other things, that it was for Mr Prescott to respond to the defendants’ protest to jurisdiction.
[15] On 30 March 2020, the case management conference that had been set down for the proceeding was vacated because of the COVID-19 emergency.
[16] In April 2020, Mr Prescott applied to transfer the proceeding to the Family Court.
[17] After a telephone conference on 27 May 2020, by minute dated 28 May 2020, Smith AJ dismissed Mr Prescott’s application.4 The Associate Judge was not certain that all of the relief sought by Mr Prescott was within the jurisdiction of the Family Court and he was not satisfied that an order for transfer would be appropriate. The Associate Judge considered that a fresh start, with fresh pleadings, would be preferable if the Family Court had jurisdiction.
3 Prescott v Thompson [2020] NZHC 1858.
4 Prescott v Thompson HC Auckland CIV-2019-404-002190, 28 May 2020 (Minute of Smith AJ).
[18] The Associate Judge made timetable orders for the hearing of Mr Prescott’s application to set aside the protest to jurisdiction.
[19] The hearing of the application to set aside the protest to jurisdiction was set down for 7 September 2020.
[20] On 31 August 2020, Lang J declined an application by Mr Prescott for an adjournment on the basis Mr Prescott wished to instruct counsel, subject to obtaining legal aid. Lang J directed Mr Prescott to arrange for the lawyer who Mr Prescott hoped to engage to file a memorandum advising the Court where matters stood with respect to legal aid.5
[21] On 3 September 2020, I adjourned the hearing that had been set down for the following day upon the filing of a memorandum from counsel advising that she had been approached by Mr Prescott for advice and was awaiting the outcome of the legal aid application.6
[22] On 19 October 2020, Woolford J set down the hearing of the application to set aside the protest to jurisdiction for 19 November 2020.7
[23] On 18 November 2020, counsel who had been willing to act for Mr Prescott if legal aid were granted advised that legal aid had been declined and sought leave to withdraw.
[24] Mr Prescott did not appear at the hearing on 19 November 2020 or otherwise make contact with the Registrar.
[25] On 20 November 2020, Mr Prescott advised the Registrar that he was filing a new application for legal aid.
5 Prescott v Thompson HC Auckland CIV-2019-404-002190, 31 August 2020 (Minute of Lang J).
6 Prescott v Thompson HC Auckland CIV-2019-404-002190, 3 September 2020 (Minute of van Bohemen J).
7 Prescott v Thompson HC Auckland CIV-2019-404-002190, 19 October 2020 (Minute of Woolford J).
[26] On 4 December 2020, Mr Prescott advised the Registrar that legal aid had been granted.
Relevant provisions of Property (Relationships) Act and Family Court Act
[27]The PRA provides:
22 Jurisdiction
(1)Every application under this Act must be heard and determined in the Family Court.
(2)This section is subject to any other provision of this Act that confers jurisdiction on any other court.
23 Who can apply
(1)The following persons may apply for an order under section 25(1)(a) or (b) or an order or declaration under section 25(3):
(a)either spouse or partner, or both of them jointly:
(b)any person on whom the spouses or partners have made conflicting claims in respect of property.
…
25 When court may make orders
(1)On an application under section 23, the court may—
(a)make any order it considers just—
(i)determining the respective shares of each spouse or partner in the relationship property or any part of that property; or
(ii)dividing the relationship property or any part of that property between the spouses or partners:
(b)make any other order that it is empowered to make by any provision of this Act.
(2)The court may not make an order under subsection (1) unless it is satisfied,—
…
(b)in the case of a de facto relationship, that the de facto partners no longer have a de facto relationship with each other; or
…
(3)Regardless of subsection (2), the court may at any time make any order or declaration relating to the status, ownership, vesting, or possession of any specific property as it considers just.
[28]The Family Court Act 1980 provides:
11 Jurisdiction of Family Court
(1)The Family Court must hear and determine all the proceedings that are to be heard and determined by the court under or by virtue of any of the provisions of—
…
(e) the Property (Relationships) Act 1976:
…
[29] The effect of these provisions is that a de facto partner who is no longer in a de facto relationship may apply under s 23 of the PRA for an order under s 25 of the PRA but that any such application must be heard and determined by the Family Court.
The protest to jurisdiction
[30] Mr Harrison, counsel for Ms Thompson, submits the Court should dismiss Mr Prescott’s proceeding in its entirety because most of the claims are made under the PRA and the only relief claimed is under the PRA and that, as a consequence, the entire proceeding falls within the jurisdiction of the Family Court.
[31] Mr Harrison further submits that, to the extent any claim may not fall within the Family Court’s jurisdiction, it is non-viable as pleaded and should be struck out because Mr Prescott has had ample opportunity to remedy his claim but has not done so. Mr Harrison points out that at paragraph 3.3 of their notice of opposition dated 3 July 2020 to Mr Prescott’s application to set aside the protest to jurisdiction, the defendants stated:
3.3To the extent (if any) that the plaintiff’s statement of claim as currently drafted is capable of being amended so as to plead (in a manner compliant with the High Court Rules, in particular Rules 5.17, 5.26,
5.27 and 5.31) a cause or causes of action falling within the jurisdiction of this Court, it is now incumbent on the plaintiff to amend his statement of claim so as to allege a cause or causes of action (not under the PR Act), within this Court’s jurisdiction. If the plaintiff does not do so, his present statement of claim should be struck out. Either
on the grounds of lack of jurisdiction or pursuant to all or any of HCR Rule 15.1(1)(a), (b), (c) or (d).
[32] Lastly, Mr Harrison submits that if the Court decides that it does have jurisdiction with respect to one or more claims and does not strike out those claims, Mr Prescott should be directed to replead that claim subject to Court-ordered conditions.
Mr Prescott’s position
[33] Although Mr Prescott did not appear at the hearing on 19 November 2020, Mr Prescott addressed the protest to jurisdiction in his application to set aside the protest dated 23 June 2020 and in his affidavit sworn on 31 July 2020.
[34] In his application to set aside the protest, Mr Prescott said Smith AJ had “come to the view that various aspects of my claim appear to fall under the jurisdiction of the High Court” but did not say in which respects. In his affidavit, Mr Prescott said that Smith AJ had determined that the Family Court would be the appropriate Court only if the Family Court had jurisdiction over all parts of his claim, and the Smith AJ had determined the Court did not have such jurisdiction. Mr Prescott said Smith AJ had found that the first cause of action was a claim against a third party and that, because he was seeking an equitable split of Trust assets, the matter came within the jurisdiction of the High Court.
[35] In written submissions, dated 26 August 2020, Mr Prescott submitted that Smith AJ had already found that the Court had jurisdiction and had accepted that Mr Prescott had a valid dispute as to the date his relationship with Ms Thompson had ended.
[36] I note that Mr Prescott went to some lengths in his affidavit to substantiate his claim that his separation from Ms Thompson did not mean the end of their relationship. It is unnecessary for me to address that question because the date on which the relationship ended does not bear on whether the Family Court has jurisdiction over Mr Prescott’s claims.
Mr Prescott’s claims
[37] Mr Prescott’s statement of claim, dated 14 October 2019, appears to have been drafted personally by Mr Prescott and without the assistance of a solicitor or counsel. It alleges five causes of action which refer to sections of the PRA as follows:
(a)Constructive trust and unjust enrichment against the Trust – ss 15, 15A(b), 18(1)(f)(ii) and 18(1)(g) of PRA;
(b)The contracting out agreement between Ms Thompson and Mr Prescott is void because Mr Prescott was “coerced” into signing the agreement under “physiological duress” that “interfered with [his] independent decision-making process”. Mr Prescott also claims he did not have “completely independent” legal advice – ss 21F(1), (3) and (5); 21G, 21J and 21M of PRA;
(c)The contracting out agreement is unreasonable and unjust – ss 15 and 15A of PRA;
(d)The contracting out agreement does not meet the requirements of a valid contract because it is unjust and because there was no valuable consideration from Mr Thompson to support a valid contract – s 21K of PRA;
(e)The Trust is illusionary and a sham.
[38] The statement of claim did not seek separate relief under each cause of action. Rather, it referenced s 21M of the PRA and asked the Court:
… to make an order under the provisions of the Act to void the contracting out agreement so as to have the effect of the contracting out agreement having never been made and so enable an equitable split of Trust assets.
Questions for decision:
[39] Having regard to ss 22, 23 and 25 of the PRA and to the respective positions of the defendants and Mr Prescott, the questions to be decided are:
(a)Did Smith AJ make any findings regarding the jurisdiction of the High Court and the Family Court?
(b)Are all or any of Mr Prescott’s claims applications under s 23 of the PRA for orders under s 25 of the PRA?
(c)If any of Mr Prescott’s claims are not applications under s 23 of the PRA for orders under s 25 of the PRA, should they be struck out pursuant to rr 15.1(1)(a), (b), (c), or (d) of the High Court Rules 2016?
(d)If any of the claims is not struck out, should the Court impose any conditions on Mr Prescott?
Did Smith AJ make findings concerning the jurisdiction of the High Court and Family Court?
[40] It is clear from Smith AJ’s minute of 28 May 2020 that the purpose of the telephone conference the previous day was to consider Mr Prescott’s application to transfer the proceeding to the Family Court. At [3], Smith AJ recorded that the defendants opposed the transfer order, had filed an appearance under protest and contended that Mr Prescott should either discontinue the present proceeding and start afresh in the Family Court or their protest should be heard and then dismissed. Having decided not to transfer the proceeding,8 Smith AJ then directed Mr Prescott to file an application to set aside the protest to jurisdiction and made timetable orders to hear that application.9
[41] There can be no doubt, therefore, that Smith AJ did not decide the protest to jurisdiction or find the High Court had jurisdiction with respect to the proceeding generally.
[42] Nor did Smith AJ make any findings with respect to the Family Court’s jurisdiction. One of the reasons Smith AJ gave for declining to transfer the proceeding was that he was not satisfied that all of the relief claimed was within the jurisdiction
8 Minute of Smith AJ, above n 4, at [18].
9 At [21]-[22].
of the Family Court.10 However, the Associate Judge then specifically recorded that he was making no finding on that matter.11 Nor did Smith AJ find that any of the claims were within the jurisdiction of the High Court. The Associate Judge was careful not to decide the jurisdictional issue one way or the other.
Are all or any of Mr Smith’s claims applications under s 23 of the PRA for orders under s 25 of the PRA?
[43] As Mr Harrison acknowledged, the Court of Appeal has held, albeit in the context of a protest to jurisdiction concerning service of proceedings outside New Zealand, that it is necessary to consider a protest to jurisdiction with respect to each cause of action separately.12
[44] The claims in the second, third and fourth causes of action are all based on the contracting out agreement and assert that it is either void or should be set aside because, according to Mr Prescott, the requirements of s 21F of the PRA were not complied with, he was coerced into signing the agreement and its provisions are unfair and unjust. In the prayer for relief which applies to all five causes of action, Mr Prescott asks for an order under the PRA to declare the contracting out agreement void.
[45] It is implicit in these causes of action and the prayer for relief that Mr Prescott is seeking orders under:
(a)Section 21F of the PRA that the contracting out agreement is void; or
(b)Section 21J of the PRA that giving effect to the contracting out agreement would cause serious injustice.
[46] In terms of s 25(1)(b) of the PRA, therefore, Mr Prescott is seeking orders that the Family Court is empowered to make under the PRA. They are, therefore, claims that must be brought in the Family Court.
10 At [15].
11 At [17].
12 Wing Hung Printing Co Ltd v Saito Offshore Pty Ltd [2011] 1 NZLR 754 (CA), at [57].
[47] In the fifth cause of action, Mr Prescott simply asserts that the Trust is illusory and a sham. No reference is made to the PRA but the relief sought is the same order under the PRA. In addition, it is apparent that the purpose of the allegation is to establish a basis for the Trust to be set aside so that the Trust’s assets would be held to be Ms Thompson’s assets and should be regarded as relationship property. In that respect, therefore, the fifth cause of action is also, in essence, an application for an order under s 25 of the PRA.
[48] For these reasons, I accept that the Family Court has jurisdiction with respect to the second, third, fourth and fifth causes of action and that those causes of action should have been brought in the Family Court. Accordingly, I uphold the protest to the High Court’s jurisdiction with respect to the second, third, fourth and fifth causes of action and dismiss those causes of action.
[49] The situation is not as clear with respect to the first cause of action, as Smith AJ discussed.
[50] In the first cause of action, Mr Prescott alleges that he made direct financial contributions to the Trust and that these establish a constructive trust in his favour over Trust assets. The references to sections of the PRA do not change the nature of the allegation or, of themselves, bring the claim under the PRA. Nor does the prayer for relief. If found to exist, the alleged constructive trust would not have any consequences for the contracting out agreement. The constructive trust and the contracting out agreement are conceptually distinct.
[51] For these reasons, I do not accept that the Family Court has jurisdiction with respect to the first cause of action and set aside the protest to jurisdiction with respect to that cause of action.
Should the first cause of action be struck out pursuant to rr 15.1(1)(a), (b), (c), or
(d) of the High Court Rules?
[52]Rule 15.1 of the High Court Rules provides:
15.1 Dismissing or staying all or part of proceeding
(1)The court may strike out all or part of a pleading if it—
(a)discloses no reasonably arguable cause of action, defence, or case appropriate to the nature of the pleading; or
(b)is likely to cause prejudice or delay; or
(c)is frivolous or vexatious; or
(d)is otherwise an abuse of the process of the court.
[53] Mr Harrison submits that Mr Prescott’s claim under the first cause of action is non-viable on its own, would necessarily should be struck out under all or any of the above rules and cannot readily be severed from the statement of claim.
[54] I do not accept that submission. I agree that, as drafted, the first cause of action is deficient and would be unlikely to succeed as pleaded. In particular, apart from alleging that Mr Prescott made direct financial contributions to the Trust over a five- year period, the statement of claim provides no details of what those contributions amounted to or the bases on which they were made. Even so, the facts as pleaded establish a distinct cause of action that is not contingent on any claim under the PRA. Despite the deficiencies, it cannot be said that the statement of claim fails to disclose a reasonably arguable cause of action.
[55] Nor do I accept that the claim is likely to cause prejudice or delay beyond that normally caused by any proceeding or that the claim is, on its face, frivolous, vexatious or an abuse of process. Whatever Mr Prescott’s conduct in the judicial review proceeding, in the District Court proceeding that preceded that proceeding, or in any other proceedings, I do not consider that Mr Prescott has acted vexatiously in this proceeding, even if he has been late in seeking adjournments as he sought to obtain legal aid in order to be able to instruct a solicitor.
[56]I agree that Mr Prescott should have understood the clear signals in paragraph
3.3 of the defendants’ notice of opposition of 3 July 2020 that a strike out application was likely if his pleadings were not amended. However, Mr Prescot was not represented at that stage and later tried to obtain the services of a legally-aided lawyer. In those circumstances, it is not surprising that Mr Prescott did not attempt to amend his pleading, particularly if he had hopes of obtaining legal aid.
[57] I consider that it cannot be said that in putting forward his first cause of action and in not amending the pleading in respect of that cause of action, a lay litigant such as Mr Prescott was acting with any procedural impropriety, acting with an improper motive or was seeking to obtain a collateral advantage beyond that legitimately obtained from a court proceeding.
[58]For these reasons, I decline to strike out Mr Prescott’s first cause of action.
[59] I also consider that Mr Prescott should be permitted to replead his first cause of action, particularly now that it appears he has been granted legal aid and can call on the assistance of a lawyer.
Should the Court impose any conditions on Mr Prescott?
[60] I agree with Mr Harrison that, drawing on the example of Simon France J in DGN v Auckland District Court,13 it would be appropriate to impose conditions on Mr Prescott to ensure that the proceeding is resolved as soon as possible and that Ms Thompson is not unnecessarily troubled by the proceeding. For these reasons, I make the orders set out below.
Result and orders
[61] I uphold the defendants’ protest to jurisdiction with respect to the second, third, fourth and fifth causes of action in the plaintiff’s statement of claim dated 14 October 2019 and dismiss those causes of action.
[62] I set aside the defendants’ protest to jurisdiction with respect to the first cause of action in the plaintiff’s statement of claim dated 14 October 2019 and decline to strike out that cause of action.
[63] I direct the plaintiff to replead his first cause of action, subject to the following conditions:
13 DGN v Auckland, Manukau, Papakura and Waitakere District Courts [2018] NZAR 137 (HC), at [23]-[24] and [41].
(a)The amended pleading is to be limited to the constructive trust alleged in the first cause of action in the plaintiff’s statement of claim dated 14 October 2019 and shall be directed only at the third defendant as trustee of the Kinney Steen Thompson Trust;
(b)The amended pleading is to be referred to a duty judge no later than 22 February 2021 before it is accepted for filing;
(c)If the amended statement of claim is accepted for filing, the plaintiff must comply with his obligations under r 8.4 of the High Court Rules 2016 and provide disclosure of all documents referred to in the amended claim, and any additional principal documents in the plaintiff’s control on which the plaintiff intends to rely at the hearing of the amended claim.
Costs
[64] Mr Harrison submits that the defendants are entitled to indemnity costs because Mr Prescott chose to run arguments lacking any merit and to a completely unreasonable degree. I do not accept that submission. The relevant arguments have been about jurisdiction. While he misinterpreted their import, Mr Prescott relied on comments made by Smith AJ in his minute of 28 May 2020. On the jurisdictional issues, Mr Prescott did not seriously dispute that most of the causes of action were within the jurisdiction of the Family Court.
[65] For these reasons, while I accept that the defendants are entitled to costs to date on a 2B basis, including costs in relation to the telephone conference before Smith AJ on 27 May 2020, I do not accept there is any case for an uplift, whatever Mr Prescott’s behaviour in other proceedings.
G J van Bohemen J
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