Richardson v Cassin HC Wellington CIV-2000-485-813

[2007] NZHC 1678

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2000-485-813

BETWEEN  NEVILLE SHAUN RICHARDSON Plaintiff

AND  MARY ELIZABETH CASSIN Defendant

Hearing:         14 December 2006

Appearances: N Levy for Plaintiff

R Gordon for Defendant

Judgment:      27 February 2007

In accordance with r 540(4) I direct the Registrar to endorse this judgment with a delivery time of 10.00am on the 27th day of February 2007.

JUDGMENT OF CLIFFORD J

Introduction

[1]      This  is  an  application  by the  plaintiff  in  these  long-running  relationship property proceedings seeking fresh directions to the Court-appointed valuer and a stay of the defendant’s challenge to the existence of an agreement allegedly relevant to that valuation.

Background

[2]      The history of these proceedings  is somewhat  convoluted.   I outline  the essential points below:

RICHARDSON V CASSIN HC WN CIV-2000-485-813  27 February 2007

a)       The  parties  had  lived  together  since  April/May  of  1990.    They separated in 1999.   3 November 1999 has been accepted as the separation date for the purposes of this litigation.  As the relationship ended prior to 1 February 2002, it did not fall within the jurisdiction of the Property (Relationships) Act 1976, and accordingly the division of property fell for determination under common law principles.

b)       The  property the  subject  of  the  dispute  essential comprised  three residential properties and a company,  Business  Emphasys  Limited (“BEL”).

c)       Ellen  France  J  issued  a  decision  in  the  Wellington  High  Court (CP 275/00 3 February 2003) (“the Substantive Decision”) in which she held, applying the principles in Lankow v Rose [1995] 1 NZLR

277, that the parties should share equally in the value of BEL and the residential properties.   She noted that the valuation of BEL would need  to  be  ascertained.     She  declined  to  make  formal  orders, preferring to leave it to the parties to reach agreement on the valuation process if they could.

d)The  plaintiff  appealed  the  Substantive  Decision  but  the  Court  of Appeal  dismissed  the  appeal  (“the  Substantive  Appeal”). Accordingly, Ellen France J’s orders remained unchanged.

e)      Ellen France J then issued a further judgment, providing for implementation of her orders as to equal sharing (“the Implementation Judgment”).  In respect of BEL, the Judge ordered the appointment of an independent expert valuer.  The expert was to assess the value of BEL based on a notional liquidation of the company as of the date of separation.  Each party was to provide to the expert such records and answer such questions as he required for his assessment.

f)        An expert valuer was appointed.  He produced a draft report for the parties’ comment.   The plaintiff advised the valuer that prior to the

separation date BEL and a company owned by the plaintiff’s father, REPS, had entered into an agreement (“the Agreement”) to divide on a 50/50 basis the sale proceeds of a business, Kiwi Slippers, owned by BEL.  The plaintiff alleged that was a verbal agreement that had later been confirmed  in writing,  and  that  the  Agreement  was honoured when Kiwi Slippers was sold in April 2000.   The existence and/or validity of the Agreement is disputed by the defendant.   The valuer formed  the  view  that  this  would  have  a  material  impact  on  his valuation and that he was unable to determine the existence or validity of the Agreement, this being a legal question outside of his purview. He invited the parties to apply to the Court for directions.

g)When the parties declined so to do, the valuer applied to the Court on his own initiative.  Following a telephone conference, Ellen France J issued a minute entitled ‘Directions for expert’ (HC WN CIV-2000-

485-813 26 April 2005) (“the Minute”) in which she agreed with the valuer that the question was a legal one best determined by the Court. She directed the defendant to advise the Court if she wished to challenge the existence of the Agreement.   In the absence of such notification, the valuer would proceed to value BEL in accordance with the Agreement.  She directed that, if the defendant did challenge the Agreement, the matter should be set down for hearing.  The terms of the Minute, I was told, surprised the parties.

h)       The defendant gave notice of her challenge on 28 April 2005 and also appealed the Minute.   The Court of Appeal dismissed that  appeal (CA 83/05 8 March 2006) (“the Minute Appeal”),  on the  basis  it lacked jurisdiction to consider an appeal from a minute.  In any event, the  Court  of Appeal was  inclined  to  agree  with  Ellen  France  J’s approach.

[3]      That brings us to the present application.

The present application and submissions

[4]      In  this  application,  the  plaintiff  seeks  directions  ordering  the  expert  to complete his valuation in accordance with the Agreement.  He also seeks to stay the defendant’s challenge to the existence of the Agreement on the grounds that the defendant is estopped, because her challenge contradicts her previous evidence and the Court has already decided the issue.  He says, particularly as regards submissions made in the Minute Appeal, that the defendant cannot maintain her allegation that the existence of the Agreement was not something of which evidence had been given in the Substantive Decision proceedings, and had only been raised in response to the valuer’s draft valuation.   Ms Levy, for the plaintiff, characterised this as the defendant’s “recent invention” allegation.

[5]      Ms Levy submitted that the issue of the Agreement’s existence was decided at the Implementation Judgment hearing.  She referred to submissions she made at that time in response to the defendant’s draft orders.   She says that the defendant acknowledged the existence of the Agreement during the course of argument, and that that concession was recorded in the Judge’s decision.

[6]      Ms Levy further argued that the defendant’s own evidence at the trial proves she knew about the agreement.  If Ms Levy had been aware of that at the time of the telephone conference – she was not as she did not appear at the trial – the decision of Ellen France J would most likely have been different.  Furthermore, the reason why there has been no previous factual finding on this issue is because the defendant failed to dispute the point.  The plaintiff submits that, if the Court is of the view that there is room for a genuine dispute, then the defendant was obliged to raise the issue at an earlier point, relying on Wire Supplies Ltd v CIR [2006] 2 NZLR 384 and Fraser v Robertson [1991] 3 NZLR 257.

[7]      For the defendant, Mr Gordon submitted that none of the previous decisions of this  Court  or  of  the  Court  of  Appeal  have  determined  the  existence  of  the Agreement.   Rather, all questions relating to the valuation of BEL were expressly left over by the Court for resolution, if necessary, at a later date.

[8]      In respect  of the  exchange  at  the  Implementation  Judgment  hearing,  the defendant’s interpretation differs from the plaintiff’s.   The defendant says that the draft order was objected to by the plaintiff on the basis that there had been no factual findings to date that justified an order either way, either excluding or including the effect  of  the  Agreement.    That  position  continues  –  the  issue  has  yet  to  be determined.

[9]      Mr   Gordon   addressed   the   recent   invention   argument   in   his   written submissions by a reference to there possibly having been confusion over when the plaintiff first referred to or asserted the existence of the Agreement.  Before me, he appeared to go further than that, and acknowledged that it would not be possible for the defendant to maintain the “recent invention” argument as characterised by the plaintiff.  That, however, did not change that position overall.

[10]     Fundamentally, Mr Gordon submitted that the existence of the Agreement was not a matter previously resolved.   That was the only interpretation consistent with Ellen France J’s directions of 26 April 2005, setting a fixture for the determination of the issue.

[11]     I note, finally, that subsequent to the hearing before me, I received further written submissions from Ms Levy together with, after prompting by Mr Gordon, a memorandum requesting leave to file those submissions.  I have read and considered those further submissions.

Discussion

[12]     I am not satisfied that the existence of the Agreement has been previously determined.  I have reached that view for the following reasons.

[13]     In the Substantive Decision Ellen France J, although she referred to a number of aspects of the BEL business, including the Kiwi Slippers operation, made no reference to the Agreement nor reached any finding in that regard.

[14]     In respect of the passages of evidence quoted from the trial, I note that the defendant’s evidence goes only so far as to acknowledge that the plaintiff told her about the existence of an agreement.  All this records is the plaintiff’s statements to the defendant.  It is equivocal as to the actual existence of the Agreement.  Whilst it is also true that there is a reference in the evidence of the plaintiff to BEL receiving

50% of the sale proceeds of the Kiwi Slipper business, that evidence at best simply records that receipt, and says nothing as to whether or not an agreement existed pursuant to which, in terms of the valuation exercise, that receipt affected or was otherwise relevant to the valuation of BEL at the date of separation.

[15]     The matter is not referred to in the Substantive Appeal.

[16]     The   matter   also   does   not   appear   to   have   been   determined   at   the Implementation Judgment hearing.   The plaintiff relies on an exchange that took place during submissions, which apparently resulted in the Judge’s statement in the Implementation Judgement, referred to at [5], and the deletion of a paragraph from the draft order excluding the effect of the Agreement.  That paragraph had read:

The expert shall value the Kiwi Slipper business at its sale price in April

2000; but with no sales commission payable to the plaintiff’s father.

[17]     Ms Levy referred  me to  her  written  submissions  for  the  Implementation

Judgment hearing on this point.  These read:

The order sought at paragraph 15(e) of the Defendant’s draft orders is that the Kiwi Slippers business be valued at its April 2000 sale price, but with no sales commission payable to the plaintiff’s father.  Effectively the Court is being asked to set aside a transaction entered into by BEL, and for which neither the plaintiff nor BEL can have any redress.   There have been no factual findings that would justify such an order, and it is submitted that the Court cannot give such a direction to the accountant/s conducting the valuation.

[18]     The Judge commented, as regards the deletion of that paragraph:

I note here that there was a dispute over an aspect of the valuation of the Kiwi Slipper business but the defendant conceded the plaintiff was right about that.  The order set out in the appendix reflect the agreed position on the Kiwi Slipper business.

[19]     Ms Levy’s argument was that the concession referred to by Ellen France J must be seen as accepting the reasoning behind the result submitted by her in this application on behalf of the plaintiff.

[20]     Again,  this  is –  in  my  view  –  at  best  equivocal.    The  plaintiff  and  the defendant differ on the interpretation to be given to this exchange.    Both interpretations are open, although – and importantly – only the defendant’s interpretation is consistent with the Judge’s later directions setting the matter down for a fixture.  Additionally, a concession at the Implementation Judgment hearing of the kind asserted by the plaintiff would have been more likely to result in a reversal of the draft order to record the effect of the alleged agreement, rather than its non- effect.  Instead, the Judge simply deleted the reference from the draft order, which supports the defendant’s submission that the matter was, in the absence of relevant factual findings at the time, left over for future resolution if and when it became necessary.

[21]     To conclude, I am not persuaded that the Court has previously determined the existence of the Agreement so as to result in a res judicata capable of estopping the defendant from pursuing her challenge.  I also accept the defendant’s submission that the Judge’s approach to the existence of the Agreement, to the extent it was adverted to, was to leave it over for future resolution as and when necessary.  It follows from that  conclusion  that  the  defendant  cannot  be  impeached  for  failing  to  put  the existence of the Agreement in issue at an earlier point.  It is speculation to suggest Ellen France J might have made a different decision, following the telephone conference, had Ms Levy been aware of, and drawn the Judge’s attention to, testimony at the trial.

Further directions

[22]     The result of the foregoing discussion is that the plaintiff’s application is dismissed and the challenge to the Agreement will be heard.   This proceeding has already been unreasonably protracted, and I am conscious that over seven years have elapsed since the separation date upon which the valuation is based.   It is highly desirable that this proceeding be finally determined in as expeditious a manner as

reasonably possible, and that a hearing now be held in terms of the Minute as to the existence and/or validity of the Agreement.

Directions

[23]     I therefore direct as follows:

a)       The matter is to be set down for one half day’s hearing to determine the existence and validity or otherwise of the Agreement.  The parties will liaise with the Registrar to determine a suitable time and date for the matter to be heard before me.

b)       In addition to the standard directions, the parties will file with the Court an agreed statement of issues to be determined at the hearing. The agreed statement is to be filed no later than two working days

before the hearing.

Clifford J

Solicitors:

C D Sygrove, Wellington, for Plaintiff

Buddle Findlay, Wellington, for Defendant