NOTE: PURSUANT TO S 35A OF THE PROPERTY (RELATIONSHIPS) ACT 1976, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B,
11C AND 11D OF THE FAMILY COURT ACT 1980. FOR FURTHER INFORMATION, PLEASE SEE
https://
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2023-404-1350
[2024] NZHC 2449
UNDER
Part 18 of the High Court Rules 2016 and the Property (Relationships) Act 1976
IN THE MATTER OF
Declarations of a constructive trust
BETWEEN
DIANNE FAYE TAYLOR
Applicant
AND
SCOTT FRANCIS VERNON
First Respondent
cont:/
Hearing:
2 July 2024
Appearances:
J McCartney KC and Mr J Oliver-Hood for Applicant
V A Crawshaw KC, S M Wilson and P Baine for First Respondent
Judgment:
29 August 2024
JUDGMENT OF O’GORMAN J
[Applications for an interim distribution and to exclude privileged evidence]
This judgment was reissued by me on 27 September 2024 pursuant to r 11.10 of the High Court Rules 2016.
Registrar/Deputy Registrar
…………………………………
Solicitors/Counsel:
J McCartney KC, Auckland Rennie Cox, Auckland
V A Crawshaw KC, Auckland Wilson Harle, Auckland
TAYLOR v VERNON [2024] NZHC 2449 [29 August 2024]
…cont’d
ANDSCOTT VERNON and HORIZON HURSTMERE TRUSTEE LIMITED as
trustees of the Scott F R Trust Second Respondents
SCOTT VERNON and HORIZON HURSTMERE TRUSTEE LIMITED as
trustees of the Horizon Hurstmere Trust Third Respondents
HORIZON THORNES TRUST LTD as
trustees of the Horizon Thornes Trust Fourth Respondents
SCOTT VERNON and HORIZON HURSTMERE TRUSTEE LIMITED as
trustees of the Horizon Family Trust Fifth Respondents
[1] This judgment determines two interlocutory applications in the context of substantive proceedings involving claims by Ms Taylor against her former partner, Mr Vernon, and related trusts and trustee companies. The two interlocutory applications are:
(a)an application by Ms Taylor seeking an interim distribution under s 25(3) of the Property (Relationships) Act 1976 (PRA) of $2 million; and
(b)an application by Mr Vernon for the exclusion of evidence under s 67(1) of the Evidence Act 2006, on the grounds that Ms Taylor has obtained copies of his legally privileged communications and has improperly referred to and sought to use those communications, plus without prejudice settlement negotiation material, in breach of privilege.
[2] Ms Taylor and Mr Vernon were in a de facto relationship for approximately 15 years from November 2006 to March 2022 (with a period of separation). During the relationship, the parties entered into two agreements under ss 21 and 21A of the PRA.1 Ms Taylor is applying to set aside those agreements under ss 21F and 21J of the PRA (for non-compliance with the requisite formalities and for serious injustice) and also for fraudulent misrepresentations under the Contracts and Commercial Law Act 2017 (CCLA).
[3] If the two agreements are set aside, Ms Taylor submits this will substantially increase the property pool available for distribution as relationship property under the PRA. Ms Taylor alleges that the resulting value of the property pool (including trust interests) would be about $170 million, of which about $145 million arises from…
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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AGLC
Taylor v Vernon [2024] NZHC 2449
Case
[2024] NZHC 2449
Decision Date
CaseChat Overview and Summary
In the case of Taylor v Vernon, the High Court was presented with two interlocutory applications within the context of ongoing substantive proceedings. Dianne Faye Taylor, the applicant, sought an interim distribution of $2 million from Scott Francis Vernon, the first respondent, to cover her legal and expert costs, immediate deferred maintenance, living expenses, and contingencies. Conversely, Scott Vernon sought to exclude certain privileged communications obtained by Taylor from his emails without his consent, as well as settlement negotiation material, on the grounds of breach of privilege. The court granted Taylor's application for an interim distribution, considering factors such as the possible prejudice to Vernon, the purpose and principles of the Property (Relationships) Act 1976, Taylor's needs and circumstances, the purpose of the interim distribution, and the effect on the settlement prospects. The court held that Taylor's request for an interim distribution was less than her likely share of the relationship property and would not unduly prejudice Vernon. Consequently, the court ordered Vernon to pay Taylor $2 million within four weeks, subject to Taylor providing an undertaking to repay any excess amount if her share of the divided property was less than $2 million. Regarding Vernon's application to exclude privileged communications, the court maintained the privilege on the specified documents and communications, ruling that Taylor could not use the privileged material obtained without Vernon's consent. The court held that the privileged communications were within the acceptable range of advice Vernon was entitled to seek in the context of negotiating contracting out agreements and that disallowing privilege for such advice would undermine the requirement for independent legal advice as a precondition of entering into a valid agreement under the Property (Relationships) Act. Additionally, the court upheld the privilege on settlement negotiations between the parties, finding that the communications were intended to be confidential and were made in connection with an attempt to settle the dispute. The court concluded that maintaining privilege for the settlement communications did not unfairly prejudice Taylor’s interests and that the circumstances did not qualify as an exception under the statutory "interests of justice" exception. The court ordered that the privileged material be inadmissible and that any references to it be redacted or removed from the proceedings. Costs were to lie where they fell unless the parties could not agree on them.