Stone v Stone - [2025] NZHC 622

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2023-404-000869

[2025] NZHC 622

BETWEEN
REBECCA ANN STONE

Plaintiff

AND

DARRELL STONE

First Defendant

REBECCA ANN STONE, DARRELL STONE AND BRUCE KENNETH DELL as

Trustees of THE STONE FAMILY TRUST Second Defendant

Hearing: 10-12 February 2025

Appearances:

J W A Johnson, C Chung & S T Dymond for the Plaintiff

R D Butler, S C I Jeffs & P R Symonds for the First Defendant No appearance for the Second Defendant

Judgment:

24 March 2025

JUDGMENT OF TAHANA J

This judgment was delivered by me on 24 March 2025 at 3.00pm Pursuant to Rule 11.5 of the High Court Rules

…………………………

Registrar/Deputy Registrar

Solicitors:
Holland Beckett Law, Tauranga Bankside Chambers, Auckland Tompkins Wake, Auckland

STONE v STONE [2025] NZHC 622 [24 March 2025]

Introduction

[1] The parties were married and are now separated. They settled their relationship property issues and entered into a settlement agreement on 9 February 2022 (the Settlement Agreement). It is agreed they are now deadlocked in the implementation of the Settlement Agreement because they were unable to sell the family home at St Heliers (the Property) at auction at the agreed reserve price.

[2] Given that the parties have the same last name, I will refer to each of them by their first name to avoid confusion.

[3] Ms Stone (Rebecca) claims the parties agreed that if the Property sells below the agreed reserve, Mr Stone (Darrell) will pay the shortfall to her and therefore the Settlement Agreement includes an implied term requiring the parties to proceed with a sale even if it is not by auction to achieve the best obtainable price. Rebecca claims that Darrell has breached that implied term and should now be ordered to proceed with the sale of the Property.

[4] In his defence, Darrell says he had a mistaken belief that the Property was worth $2,580,000 based on a property valuation in 2021. Darrell claims that this mistaken belief entitles him to relief under the Contract and Commercial Law Act 2017 (the Act) and that the Court should order he and Rebecca share equally in any shortfall below the agreed reserve price.

[5] The parties therefore disagree as to how the deadlock should be resolved. Either Darrell has breached an implied term to proceed with sale of the Property to achieve the best obtainable price or there has been a contractual mistake and relief should be granted to Darrell that requires each party to share the shortfall equally.

[6]The issues I need to determine are: Claim—breach of contract:
(a)Does the Settlement Agreement contain an implied term that:

(i)if the Property is not sold by way of auction, then Rebecca and Darrell would take all reasonable endeavours to obtain the best obtainable price through a sale method on advice from Barfoot and Thompson, including by way of negotiation; and

(ii)Rebecca and Darrell would agree to sell the Property at the best obtainable…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2025] NZHC 622
Decision Date: 24 March 2025

CaseChat Overview and Summary

In the High Court of New Zealand, the case of Stone v Stone involved a dispute between former spouses Rebecca and Darrell Stone over the sale of their family home at St Heliers. The parties had entered into a settlement agreement on 9 February 2022 but were now deadlocked on how to proceed with the sale of the property, which had not been achieved at auction. Rebecca claimed that the settlement agreement implied a term requiring the parties to use all reasonable endeavours to obtain the best obtainable price for the property, even if it meant selling it below the agreed reserve price of $2,600,000. Darrell argued that he was entitled to relief under the Contract and Commercial Law Act 2017 due to a mistaken belief about the property's value. The court had to determine whether an implied term existed in the settlement agreement, whether Darrell breached that term, and if he was entitled to relief for his mistaken belief. After considering the evidence and arguments, the court found that an implied term did exist in the settlement agreement, that Darrell breached that term by refusing to agree to a sale at a price below the agreed reserve, and that he was not entitled to relief for his mistaken belief. The court ordered specific performance, requiring Darrell to comply with the implied term, and awarded costs to Rebecca.

The court's decision was based on the principle that the implication of a term is a standard of strict necessity, and that an unexpressed term can only be implied if the court finds that the term would spell out what the contract, read against the relevant background, must be understood to mean. The court found that the implied term was necessary to give efficacy to the settlement agreement and that it was reasonable and equitable because it gave effect to the agreement that Darrell pay the settlement sum of $4,500,000. The court also found that Darrell's mistaken belief about the property's value was not a valid basis for relief under the Contract and Commercial Law Act 2017, as he had knowledge of the uncertainty surrounding the property's weathertightness and had assumed the risk of mistakes when he entered into the settlement agreement.

Orders