WL v AJ - [2023] NZHC 703

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

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IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

I TE KŌTI MATUA O AOTEAROA AHURIRI ROHE

CIV 2020-441-77

[2023] NZHC 703

IN THE MATTER OF the Property (Relationships) Act 1976

AND

IN THE MATTER OF

a claim in equity for constructive trust and knowing receipt

BETWEEN

WL

Plaintiff

AND

AJ

First Defendant

RA

Second Defendant

CIV 2021-441-41

BETWEEN

AJ

Plaintiff

AND

WL

Defendant

Hearing: 3–5 October 2022 (further memorandum filed 17 October 2022)

Counsel:

P N Ross for Plaintiff

E V R Stannard and M A B Black for Defendants

Judgment:

31 March 2023

JUDGMENT OF MALLON J

WL v AJ [2023] NZHC 703 [31 March 2023]

Table of contents

Introduction [1]

Background [5]

The relationship [5]

The Agreement [10]

After the Agreement [12]

Contributions during the relationship [16]

Property [23]

Law [25]

General provisions [25]

Division of relationship property [28]

De facto relationships of short duration [34]

Contracting out agreements [36]

The Agreement [44]

Circumstances of the Agreement [44]

Content [56]

Findings on content and circumstances of Agreement [63]

Is the Agreement to be given effect [68]

Is this a contracting out agreement under s 21 [68]

Does the Agreement satisfy the s 21F criteria? [72]

Should the Agreement be given effect under s 21H [75]

Void for duress, undue influence or lack of certainty [82]

Serious injustice [84]

Equal division of relationship property [93]

Compensation for post-separation contributions [100]

Order for division or sale [102]

Costs [105]

Result [106]

Introduction

[1] WL and AJ lived together as a couple for approximately 17 years inclusive of periods of separation. Early in their relationship, WL purchased a property (the Property) for $128,000. During an early period of separation, they signed an agreement (the Agreement), prepared by WL’s sister, purporting to exclude the Property as relationship property. Neither party received independent legal advice at the time they signed the Agreement.

[2] AJ now claims half the equity in the Property, occupational rent for the period WL has lived in the Property following their separation, and a declaration that the

contracting out agreement is void or for it to be set aside on the basis that it is seriously unjust. She also seeks equal division of the other relationship property.

[3] WL seeks an order that the Agreement be given effect so that the Property is his separate property and for the rest of the relationship property to be divided equally. If the Court invalidates the Agreement, then he seeks a division of not less than 80 per cent of the relationship property in his favour and an order that no adjustments be made for occupational rent.

[4] WL also brought High Court proceedings alleging that AJ had used relationship property funds to contribute to her brother’s deposit on his house (RA’s house). WL…

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 WL v AJ

Details

AGLC: WL v AJ [2023] NZHC 703
Case: [2023] NZHC 703
Decision Date: 31 March 2023

CaseChat Overview and Summary

The parties had been in a de facto relationship for 17 years and had three children together. They owned a property (the Property) which WL purchased in 2001. They signed an agreement (the Agreement) in 2004 that purported to exclude the Property as relationship property. AJ sought an order that the Agreement be set aside, and that the Property and the rest of the relationship property be divided equally. WL sought an order that the Agreement be given effect so that the Property was his separate property and for the rest of the relationship property to be divided equally. If the Agreement was not upheld, WL sought a division of not less than 80 per cent of the relationship property in his favour and an order that no adjustments be made for occupational rent. WL also sought an order that AJ had used relationship property funds to contribute to her brother’s deposit on his house. AJ brought a cross-claim for the equitable remedies of constructive trust, knowing receipt and breach of fiduciary duty. The court found that the Agreement was void because it did not comply with s 21F of the Property (Relationships) Act 1976. The court also found that the Agreement should not be given effect under s 21H because the lack of independent legal advice materially prejudiced AJ’s interests. The court found that the Agreement was void for lack of independent legal advice and would cause serious injustice. The court held that the property should be divided equally. The court also held that AJ’s claim for occupation rent under s 18B of the PRA was dismissed. The court declined to make an order for sale of the Property and WL should have the opportunity to settle AJ’s claim in an orderly fashion and in a reasonable timeframe.

Orders