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Vervoort v Spears

Vervoort v Spears

Case [2015] NZHC 808 23 April 2015

Contract Formation

Unconscionable Conduct

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-6668 [2015] NZHC 808

BETWEEN
EMILIE VERVOORT

Plaintiff

AND

RAYMOND DENNIS SPEARS and WILLIAM DUFFY as trustees of the William Duffy Family Trust

First Defendants

WILLIAM DUFFY Second Defendant

Hearing:
18 September 2014. Further submissions 19 September 2014,

5 February 2015, 9 March 2015

Appearances:

P Finnigan for the Plaintiff
No appearance for the Defendants

Judgment:

23 April 2015

JUDGMENT OF ELLIS J

This judgment was delivered by me on Thursday 23 April 2015 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date:………………………….

Counsel/Solicitors:
P T Finnigan, Barrister, Auckland

VERVOORT v SPEARS & DUFFY [2015] NZHC 808 [23 April 2015]

[1] Ms Vervoort seeks orders granting her an interest in assets held by her estranged partner, Mr Duffy (the second defendant), and by his family trust (the trustees of which are the first defendants). Mr Duffy lives in Fiji and that is where much of the property at issue is located.

[2] In part because of the Fijian connection the defendants challenged this Court’s jurisdiction to hear the claims. That challenge was rejected by Associate Judge Sargisson in March 2013.1 Rather than seeking a review of that decision there was an unsuccessful attempt to appeal to the Court of Appeal.2 Since that time (late
2013) the respondents have taken no further steps to defend the claim, which therefore proceeded before me essentially by way of formal proof.3

[3] Unfortunately for Ms Vervoort, and notwithstanding Mr Finnigan’s truly

valiant efforts on her behalf, her claims bristle with legal and factual difficulties.

Background

[4] The somewhat troubled relationship between Ms Vervoort and Mr Duffy lasted from 1999 until 2011, although there were a series of separations and reconciliations during that time. Ms Vervoort alleges Mr Duffy has problems with alcohol and that he physically and mentally abused her. There are no children of the relationship.

[5] On 1 August 1994, well before the relationship began, Mr Duffy settled the William Duffy Family Trust (the trust). The trustees of the trust were named as the first defendants in these proceedings. Mr Russell Forrest was replaced as trustee by Mr Raymond Spears in December 2010.4

[6] Ms Vervoort claims an interest in the assets of this trust, the majority of which are situated in Fiji, on the basis of contributions she says she made to the

1      Vervoort v Forrest [2013] NZHC 590.
2      The Court of Appeal declined jurisdiction: Duffy v Vervoort [2013] NZCA 522.
3      Because a statement of defence was filed it is strictly a rule 10.7 matter. As that rule makes clear, Ms Vervoort is, of course, still required to prove her case.
4      Mr Forrest entered into a Deed of Settlement with Ms Vervoort on 28 February 2014. The proceedings against Mr Forrest have been discontinued.

property. The current financial statements of the trust are unavailable, but it appears it has approximately $7 million in assets. Extensive affidavit evidence has been filed…

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.

Continue reading Vervoort v Spears

Details

AGLC: Vervoort v Spears [2015] NZHC 808
Case: [2015] NZHC 808
Decision Date: 23 April 2015

CaseChat Overview and Summary

Emilie Vervoort brought proceedings against her former partner, William Duffy, and his family trust, the William Duffy Family Trust. Ms Vervoort sought an interest in the assets held by Mr Duffy and the trust, as well as maintenance payments. The trust was established by Mr Duffy in 1994, before the relationship began, and the majority of its assets are located in Fiji. The defendants challenged the jurisdiction of the court, but this was rejected. The court found that the two agreements between the parties were voidable due to undue influence, duress, or unconscionability. However, the court held that the trust was not a sham or an emerging sham. The claim for a constructive trust over the trust's assets was dismissed due to the unanimity rule and the rule against delegation. The court also found that there were difficulties with a claim against Mr Duffy personally based on estoppel or constructive trust, as the significant assets were owned by the trust, not Mr Duffy. Although Ms Vervoort established a potential relationship property claim in relation to some low-value moveables, such a claim was either barred by the agreements or worth considerably less than the payment she had already received under them. The court dismissed all claims except for the potential relationship property claim and the claim for maintenance, which Ms Vervoort could pursue if she chose to avoid the agreements.

The court's reasoning was based on the evidence presented, the applicable legal principles, and recent legal developments. The court considered the circumstances in which the agreements were signed, the conduct of the parties, and the nature of the trust. The court also examined the relevant legal authorities and case law to determine the validity of the trust, the applicability of the unanimity rule and the rule against delegation, and the potential for promissory estoppel. The court concluded that the agreements were voidable, the trust was not a sham, and the claims for a constructive trust and estoppel were not tenable. The court also found that the potential relationship property claim and the claim for maintenance were limited in scope and value, but could be pursued if Ms Vervoort chose to avoid the agreements.

Orders