BOYD V VAN HOUTEN HC CHCH CIV 2008-409-002478 [2009] NZHC 460 (30 April 2009)

IN THE HIGH COURT OF NEW ZEALAND
CHRISTCHURCH REGISTRY
                                                                CIV 2008-409-002478



               BETWEEN                    MURRAY ALEXANDER BOYD
                                          Plaintiff

        
      AND                        WILLEMINA OCTAVIA VAN HOUTEN
                                          Respondent


Hearing:   
   30 April 2009

Counsel:       J M Kirkland for Appellant
               A M Corry for Respondent

Judgment:      30 April 2009


                          JUDGMENT OF FOGARTY J



[1]     This is an application for leave to appeal to the Court of Appeal from
the
decision of this Court, given by myself on 24 March last. In that decision I upheld
the decision of Judge Strettell given in
the Family Court at Christchurch on
23 September last.


[2]    As the High Court decision records in the last paragraph:

     
 With only a few modifications, I agree with Judge Strettell's analysis and
       conclusion. ...

[3]    I mention at the outset
this fact that the Family Court and the High Court
have agreed on the result of the case, and with similar reasoning, as it seems
to me it
underlines the importance of deciding that this case does raise questions of law and
fact of sufficient importance to outweigh
the cost of delay of a further appeal.




BOYD V VAN HOUTEN HC CHCH CIV 2008-409-002478 30 April 2009

[4]    I have been persuaded
by Mr Kirkland that one of the points that he wishes to
argue in the Court of Appeal has not been considered by the Court of Appeal
in the
case of Harrison v Harrison  [2005] 2 NZLR 349. That is to what extent when
applying s 21J can the Court examine the subjective mindsets of the parties when
entering into agreements
to contract out. I should add that that is my formulation of
the point.


[5]    Mr Kirkland expressed the point in the following
way:

       In paragraph 80 of his judgment, His Honour has introduced a moral test as
       well as an assessment of the subjective
mental state of the parties into the
       criteria applicable to Property agreements in addition to the requirements in
      
section 21 F (2) ­ (5).

       In the setting:

             (1) The Property (Relationship) Act 1976 as a code (section 4).

 
           (2) Its object is to settle the division of relationship property.

             (3) It is not specifically concerned
with fault, unless that involves the
                 non-disclosure of the existence of relationship property.

             (4)
The effect of an agreement includes its enforceability. If that is to
                 be determined by reference to the state of
mind of the other party, it
                 is a matter about which the certifying lawyer must be satisfied and
               
 upon which he or she is required to advise.

             The important questions of law to be addressed

             1. How far
is the Court, in considering an application to set aside an
                agreement, to be required to enter into the state of
mind of each
                party, the time the Agreement was entered into?

             2. Is the Court then required to make
a moral judgment, as the Judge
                appears to have done, in circumstances where one party alleges he or
            
   she was unaware of the mindset of the other?

[6]    Section 21J(4)(e) provides:

       21J       Court may set agreement aside
if would cause serious injustice

       ...

       (4)       In deciding, under this section, whether giving effect to an
    
            agreement made under section 21 or section 21A or section 21B
                 would cause serious injustice, the Court
must have regard to--

                 ...

                (e)    the fact that the parties wished to achieve certainty as to
the
                       status, ownership, and division of property by entering into
                       the agreement:

 
      ...

[7]     I broadly understand s 21J(4)(e) as requiring the Court, when considering
whether or not agreement should be set
aside, to make an assumption that the fact of
entering into an agreement is a fact demonstrating that the parties wish to achieve
certainty as to status, ownership and division of property. So that sub-paragraph (e)
is not of itself an invitation to the Court
to enquire into the state of mind of the
parties. However, that said, it is sub-paragraph (d) that is central to the adjudication
of this case:

                (d)    whether the agreement has become unfair or unreasonable in
                       the light
of any changes in circumstances since it was made
                       (whether or not those changes were foreseen by the parties):

That sub-paragraph does open, in my view, an enquiry into the state of mind of the
parties as was undertaken by Judge Strettell
and adopted by myself on appeal.
Interestingly, the last clause in parenthesis does presume that the Court will have
examined what
the parties foresaw.


[8]     This point raised by Mr Kirkland may well be of some consequence in other
cases. My difficulty with
the point being argued in this case is because of the fact
that Ms van Houten's lawyer sent a draft agreement to Mr Boyd's lawyer
which
recited her understanding of the circumstances of the relationship and I refer
particularly to paragraphs [59] and [60] of
the judgment under appeal


[9]     In the three paragraphs under the heading "Background" Mr Boyd and his
lawyer saw his partner's
(Mimi's) understanding of their present circumstances that
they live in a de facto relationship and of her foresight that they will in future acquire
further property. That circumstance presumes a reasonably long future
duration.
But shortly after entering into the agreement Mr Boyd ended the relationship.


[10]    There may be an argument that has
not been developed in the two hearings so
far as to the relevance of those assumptions and foreseen events by Ms van Houten
when
applying sub-paragraph (4)(d). But it was a point that was not taken in this

case and which, given the finding by Judge Strettell
in paragraph [146] of his
judgment, which is set out in paragraph [60] of my judgment, is not a set of facts
which in my view provides
as it were fertile ground for Mr Kirkland to develop his
arguments. I can see that in some circumstances the Court will tolerate
a degree of
optimism on the part of one party as to the continuity of the relationship and
scepticism on the part of another.   
   That is in the nature of things a common
occurrence.


[11]   Here, I am impressed by the fact that one party's expectations were
set out in
a document tendered to the other side as an offer to be accepted and that offer was
signed with those exceptions set out,
yet those expectations were almost wholly
mistaken. As both Judge Strettell and I have remarked, that is a significant factor
which
goes to the injustice of the arrangements.           I am not going to use this
opportunity to set out again the key reasoning in
that regard. The reasoning is set out
in greater length in two judgments and it is not easily summarised.


[12]   The application
for leave to appeal is also designed to enable Mr Kirkland to
expose and carry forward the question of disparity between what the
agreement
achieves and what might have been obtained had the parties gone to Court at the
time. He refers to the dictum in paragraph
[112] in the Court of Appeal decision in
Harrison as follows:

       [112] ... as such agreements are entered into in respect of
entitlements
       already accrued and should usually reflect the reality of those entitlements.
       ...

       (Emphasis added)

[13]   He submits that is an obiter comment not binding on this Court. Technically
that is probably correct but in fact but is highly
persuasive and was, I am sure,
intended by the Court of Appeal to guide the Judges in the Family Court and the
High Court on appeal.
It did guide Judge Strettell and myself.


[14]   As I have remarked to Mr Kirland in oral argument, I do not think it is for a
Judge
in the High Court to invite the Court of Appeal to reconsider what is clearly a
considered judgment, even if it is technically obiter.

[15]    Taking these considerations together, I am of the view that this case should
only go further if the Court of Appeal considers
it appropriate that leave be granted.
I can quite understand Mr Kirkland, in accordance with usual practice and courtesy,
coming
to this Court first to make the application, but I am not persuaded it should
be granted.


[16]    Accordingly, this application
is dismissed in this Court.


[17]    Costs are reserved pending any determination by the Court of Appeal.




Solicitors:
Saunders
& Co, Christchurch, for Appellant (Counsel: J M Kirkland)
O'Malleys, Christchurch, for Respondent (Counsel: A Corry)