Glaister v Harris [2014] NZHC 2153 (8 September 2014)

Last Updated: 19 September 2014

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

CIV-2014-412-000049 [2014] NZHC 2153

BETWEEN	GEORGE PETER GLAISTER Plaintiff
AND	SONIA LEE HARRIS Defendant

Hearing:	27 August 2014
Appearances:	D R Tobin for Plaintiff R Kelly for Defendant
Judgment:	8 September 2014

_{JUDGMENT OF ASSOCIATE JUDGE MATTHEWS}

[1] The plaintiff, Mr Glaister, and the defendant, Ms Harris, are parties to a relationship property agreement dated 25 November 2011. The agreement makes provision for the division of a significant number of assets which Mr Glaister and Ms Harris held during the course of their former marriage. The meaning of four clauses of the agreement is in dispute. They relate to a contribution to the cost of an underpass beneath Kaka Point Road that was thought to be necessary as a result of the agreed division of the farms Mr Glaister and Ms Harris formerly owned. In short, Mr Glaister says that Ms Harris owes him $150,000, which she has not paid.

[2] Ms Harris says she is not obliged to pay this sum. Whilst acknowledging some obligation may exist under the clauses in question, her view is that the extent of her obligation, if any, is not established.

[3] Mr Glaister seeks judgment against Ms Harris on a summary basis, maintaining that she does not have a defence to his claim.

GLAISTER v HARRIS [2014] NZHC 2153 [8 September 2014]

The principles of summary judgment

[4] Rule 12.2 of the High Court Rules provides:

12.2 Judgment when there is no defence or when no cause of action can succeed

(1) The court may give judgment against a defendant if the plaintiff satisfies the court that the defendant has no defence to [a cause of action in the statement of claim or to a particular part of any such cause of action].

(2) ...

[5] The principles the Court is to apply on an application for summary judgment are summarised in Krukziener v Hanover Finance Ltd:¹

[26] The principles are well settled. The question on a summary judgment application is whether the defendant has no defence to the claim; that is, that there is no real question to be tried: Pemberton v Chappell [1986] NZCA 112; [1987] 1 NZLR 1 at 3 (CA). The Court must be left without any real doubt or uncertainty. The onus is on the plaintiff, but where its evidence is sufficient to show there is no defence, the defendant will have to respond if the application is to be defeated: MacLean v Stewart (1997) 11 PRNZ 66 (CA). The Court will not normally resolve material conflicts of evidence or assess the credibility of deponents. But it need not accept uncritically evidence that is inherently lacking in credibility, as for example where the evidence is inconsistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable: Eng Mee Yong v Letchumanan [1980] AC 331 at 341 (PC). In the end the Court’s assessment of the evidence is a matter of judgment. The Court may take a robust and realistic approach where the facts warrant it: Bilbie Dymock Corp Ltd v Patel (1987) 1 PRNZ

84 (CA).

[6] In Auckett v Falvey,² Eichelbaum J said:

On a summary judgment application, the onus is on the plaintiff to show that there is no defence. On the present facts, the plaintiffs are able to pass an evidential onus to the defendants by exhibiting the contract which on its face, entitles them to the remedy they now seek. The defendants are then in a position of having to demonstrate a tenable defence. However, the overall position concerning onus on the application is that at the end of the day the question is whether the plaintiffs have satisfied the Court as to the absence of a defence.

¹ _{Krukziener v Hanover Finance Ltd [2008] NZCA 187 at [26].}

² Auckett v Falvey HC Wellington CP296/86, 20 August 1986 at 2.

I take from these authorities that the correct approach of the Court to analysis of the case is:

(a) Does the evidence for the plaintiff establish a position which on its face would entitle them to the remedies they now seek?

(b) If so, has the defendant demonstrated a tenable defence?

(c) The onus which shifts to the defendant is an evidential one only; the burden of proving that the defendant does not have a defence rests throughout with the plaintiff.

[7] If this case were to proceed to trial, the Court would consider whether Mr Glaister had established the requisite elements of his claim on the balance of probabilities, the civil standard of proof. It will be immediately apparent from r 12.2 and from the passages quoted from Krukziener v Hanover Finance Ltd and Auckett v Falvey that the onus on him, on an application for judgment on a summary basis, is substantially greater. The reason is also self evident. Entering judgment on a summary basis deprives those against whom allegations are made of a full trial at which both his and Ms Harris’ versions of events would be fully aired in oral evidence, including cross-examination.

Relevant clauses of the agreement

[8] The clauses of the agreement which are in issue on this application are these:

Ashlea Underpass

6 In order for this farming division to work Peter will be required by Clutha District Council to install an underpass on Kaka Point Road that Koau may be farmed as a dairy farm as part of “Ashlea”. He has obtained advice from Fulton Hogan that the site is not suited to an underpass installation, but that if an underpass were constructed the cost would exceed $300,000.

7 Peter will lodge an application for resource consent for the underpass within 4 months of the date of execution of this agreement.

8 Sonia will contribute $150,000 to the cost of the underpass, to be held in Polson McMillan’s Trust account and to be paid out either within 2 years of consent being granted, upon provision of an

invoice from the engineer, or in compliance with Clause 9 as full and final payment of her contribution to this cost. This obligation is conditional upon Peter meeting his obligation under clause 6 within the specified time frame.

9 Should the Clutha District Council not approve an underpass then the cost of reinstating the dairy shed and associated work to make the Koau land operable as a dairy unit shall be borne equally by Sonia and Peter save that Sonia’s contribution shall not exceed

$150,000. This work to be completed within 2 years of the Clutha

District Council declining its consent under clause 6.

It is common ground between Ms Kelly and Mr Tobin that the reference to this condition in the final sentence of clause 8, to an obligation under clause 6, should refer in fact to an obligation under clause 7.

Mr Glaister’s case

[9] Mr Tobin says that clause 8 of the agreement means exactly what it says – Ms Harris is obliged to contribute $150,000 to the cost of the underpass. This sum was set aside as agreed, Mr Glaister met his obligation under clause 6 within the specified time frame, and an invoice was produced from an engineer instructed by Mr Glaister indicating that payment of $150,000 was now due. He says that it was not necessary for Mr Glaister to lodge an application for resource consent, as resource consent for the work was not required, and that he lodged within the period of four months referred to in clause 7 an application for building consent, which was the only consent that was required. He says that a code compliance certificate was issued by the Clutha District Council and there has been no suggestion that any consent is required from the Otago Regional Council.

[10] Mr Tobin therefore says that his client is entitled to summary judgment for the sum of $150,000. He says that Ms Harris does not have any defence to the claim. Ms Kelly argues otherwise; I will refer to Mr Tobin’s responses to her arguments in turn.

Ms Harris’ case

[11] Ms Harris says first that this proceeding is, in essence, for specific performance of the agreement made by Mr Glaister and Ms Harris, pursuant to s 21A

of the Property (Relationships) Act 1976 (PRA). This section entitles parties in the position of Mr Glaister and Ms Harris to enter an agreement settling any differences between them over relationship property. She says that the Family Court has exclusive jurisdiction in relation to all applications under the PRA unless the Family Court itself transfers a proceeding to the High Court.

[12] Secondly, Ms Kelly says that the agreement must be interpreted in the context in which it was entered, and that her client has established, on the evidence, a sufficiently arguable case that when interpreted in that context, her client’s obligation was to pay half of the cost of the required work in building the underpass, up to a maximum of $150,000.

[13] Thirdly, Ms Kelly says that when Mr Glaister and Ms Harris entered the agreement they did so in the mistaken belief that the cost of the underpass would exceed $300,000, or that in any event her client mistakenly thought that, and Mr Glaister knew that to be the case. She says that Ms Harris is entitled to relief under the Contractual Mistakes Act accordingly.

[14] Fourthly, Ms Kelly says that the agreement does not express the common intention of Mr Glaister and Ms Kelly at the time it was entered. Their intention was that Ms Harris’ contribution to the cost would be up to a maximum of half the actual cost, and if (when interpreted in context) the agreement provides otherwise, then it should be rectified.

[15] Fifthly, Ms Kelly says that her client’s obligation under clause 6 was expressly conditional upon Mr Glaister lodging an application for resource consent within four months of the date of execution of the agreement, and he did not do so. Ms Kelly says that as a result her client is not under any obligation to make the payment sought.

[16] Finally Ms Kelly says that there was a term implied into the agreement that the actual cost of the necessary works would be established, and that this should take into account a contribution to those costs of $62,500 which Mr Glaister has received from the Clutha District Council. Ms Kelly says that as a result, on the evidence the

outlay by Mr Glaister on the works is less than $200,000. Her client should only be required to pay half the amount actually incurred by Mr Glaister, and that she is not liable to pay the sum of $150,000 as Mr Glaister contends.

Discussion

[17] The first issue raised by Ms Kelly – whether this Court has jurisdiction to hear and decide this application – has been decided by this Court in Edwards v Edwards.³ In that case Mrs Edwards applied for summary judgment by way of specific performance of a heads of agreement made as a result of a judicial settlement conference in the Family Court at Kaikohe. The agreement recorded a division of relationship property. The signatures of the parties had been witnessed by their respective solicitors but no certificates had been appended under s 21F(5) of

the PRA. It was anticipated at the time that a more comprehensive relationship property agreement would be prepared and signed. Although this document was prepared it had not been signed. At the time the High Court considered the application for summary judgment, the Family Court had issued a Minute noting its advice to the parties that the agreement was not an agreement under s 21 of the PRA, nor an order of the Court. Counsel were not agreed on this point and an application had been made to the Family Court under s 21H of the PRA for an order that the heads of agreement have effect notwithstanding non-compliance with the requirements of s 21F.

[18] Against this background, the High Court said:⁴

[22] Courts exercising civil jurisdiction, the High Court and the District Court have overlapping jurisdiction with the Family Court for the enforcement of agreements to divide property following the break-up of a marriage. The High Court’s jurisdiction arises generally under s 16 of Judicature Act 1908. The District Court’s civil jurisdiction under s 29 of the District Courts Act 1947 is subject to claims for no more than $200,000. It has an equitable jurisdiction and may give equitable relief [District Courts Act 1947, ss 34 and 41]. Before the reforms under the Property (Relationships) Amendment Act 2001, the Family Court had jurisdiction to enforce s 21 agreements by way of applications for division of property which sought orders in terms of the agreement [Fisher on Matrimonial and Relationship Property (looseleaf ed, LexisNexis) 5.14, citing Thaisen v Thaisen (1981) 4 MPC 198, Bishop v Bishop (1981) 4 MPC 17, Newport v

³ _{Edwards v Edwards [2012] NZHC 1630.}

⁴ At [22].

Cook (1982) 1 NZFLR 439, Belt v Belt (1989) 5 FRNZ 258 and Wicksteed v Wicksteed [2001] NZHC 977; [2002] NZFLR 28. See also P E S v D N S (2006) 25 FRNZ 863 at [20]-[24]]. The Court can make orders dividing property under s 25, including the panoply of orders available under s 33. The position remains the same following the reforms. By parallel reasoning an agreement to settle a claim under s 182 of the Family Proceedings Act could be the subject of an application for relief under s 182 seeking orders in terms of the agreement. Under s 16 of the Family Courts Act 1980, the Family Court has the ancillary jurisdiction of the District Court under s 41 of the District Courts Act. This allows the Family Court to give equitable relief for any matter that is within its jurisdiction.

[19] I adopt his Honour’s reasoning and find that this Court has jurisdiction to determine Mr Glaister’s application for summary judgment.

[20] Ms Kelly’s second argument is that when properly interpreted in the context in which it was executed, the agreement means that Ms Harris should be liable for no more than a one-half share of the total cost to Mr Glaister of building the underpass, up to a maximum of $150,000.

[21] Ms Kelly relies on the principles enunciated by the Supreme Court in Vector Gas Ltd v Bay of Plenty Energy Ltd.⁵ It is not necessary that there be an ambiguity in the wording of a contract before the Court can resort to considering pre- contractual materials as an aid to interpretation. Reference may be made to negotiations in order to establish the commercial context, and the subject-matter if it shows objectively what the parties intended their words to mean.

[22] I will consider the contextual evidence on the difficulty of the negotiations that led to settlement, the extent to which an equal division of assets was sought, the expected cost of the works, and whether it was foreseen at the time that a subsidy would be available.

[23] The agreement between the parties was reached after some four years of negotiation, which included three mediations, all in the context of a wider range of difficulties between Mr Glaister and Ms Harris arising from the termination of their marriage. Various adjectives are used by each of them to describe the atmosphere

_{which prevailed. Ms Harris says:}

⁵ Vector Gas Ltd v Bay of Plenty Energy Ltd [2010] NZSC 5, [2010] 2 NZLR 444.

... negotations, in respect of the division of our relationship property featured the same stress, acrimony and combativeness which characterised our post-separation relationship generally.

Mr Glaister refers to there having been a long and bitter dispute about division of relationship property. Mr S J Rodgers, solicitor for Mr Glaister says that the relationship between his client and Ms Harris was “fractious in the extreme” and he says that he cannot recall a more difficult and acrimonious division of matrimonial property than this one. Ms S L McMillan, solicitor for Ms Harris, described negotiations as fraught in the extreme.

[24] From this I infer that settlement was wrought on a hard anvil, and whilst this might, viewed one way, support a literal interpretation of the agreement as there was ample opportunity to record their agreement accurately, it also supports the view that each party, giving little if any slack to the other, had a close eye on the principle of equality.

[25] The agreement settled division of the farming operation previously carried out by Ms Harris and Mr Glaister. It records their intention to enter a further agreement dealing with the remainder of their property. It refers to a number of blocks of farmland, some of which were agreed to pass to Mr Glaister and others to Ms Harris. Both of them say that one of the aims of the property division was to ensure that each had a viable farm. Ms Harris also says that a further and overriding consideration was for the farms to be divided equally between them as anticipated by the PRA. They were assisted in this by Mr Johnstone, a chartered accountant dealing primarily in agricultural business and advice, who, as she put it:

... juggled and re-juggled various farms and cattle numbers and machinery etc numerous times to try to achieve that equal and sustainable outcome for each of us.

[26] Mr Glaister says, however, that considerable time was spent negotiating a way through what he describes as:

... the difficult task of dividing the farming operation into two roughly comparable dairy farms.

and

I say roughly comparable because I never thought that it would be possible to have an exact equality of outcome.

and

To the extent that it is suggested that the aim behind the agreement was to achieve exact equality, I dispute that. Exact equality was never possible.

[27] Mr Tobin laid some emphasis on this, submitting that the clauses in issue in this case should not be construed with the aim of ensuring that exactly equal contributions were being made to the cost of the underpass. The evidence of Ms Harris and Mr Glaister conflicts on this issue. The nature and extent of the assets (farm, stock and plant worth around $20m in value, with $8m in equity) suggests that precision of outcome would inevitably be elusive, and the agreement does not include any provision for a cash or other adjustment to square up any disparity in the value of assets received. These factors suggest that exact equality was not a required outcome, but an outcome as close as reasonably practicable would accord with the basic tenor of the PRA, and the evidence of Ms Harris and Mr Johnstone. This element of the context suggests that the correct interpretation of the clause should reflect equal contributions to an expense which was reasonably significant. In contrast, the literal interpretation for which Mr Tobin argues leaves it open for one party to gain an advantage at the expense of the other.

[28] A third element of the context in which the agreement was entered is the expected cost of the works at that time. Ms Harris says that she was initially reluctant to agree to pay half the cost of the underpass, but she wanted to know how much she would have to pay if she did agree to do so.

[29] Mr Glaister approached Fulton Hogan, a large contracting company. In its letter to Mr Glaister the company made the following points:

• The area for the intended underpass is close to sea level and it would be necessary to redirect scheduled drains on both sides of the road to allow access and egress.

• Consents would be required from both the Otago Regional Council and the Clutha District Council.

• With only minimal information then available on ground conditions they could not rule out settlement of the structure becoming an issue.

• Technical issues would not be insurmountable but it was likely that the total cost would be well beyond what it would be prudent to expend.

• Without an approved design only an indicative price could be given, and that indication was that the cost would be in excess of $300,000.

[30] Ms Harris says that on the basis of this information she agreed to pay half the estimated minimum cost, but no more. She had concerns about what she saw as Mr Glaister’s tendency towards extravagance which she had experienced over the course of their marriage. She notes that Mr Glaister now says that the cost was

$254,963.79, and that he has a grant of $62,500 towards the cost from the Clutha District Council. On these figures, if the agreement were interpreted literally, she would be contributing $150,000 to a total cost of around $190,000. She says this would be a bizarre outcome which she would never have agreed to.

[31] Mr Glaister does not agree. He says it was not ever the intention of the parties that Ms Harris would pay only half the cost up to a maximum of $150,000. He says he spent considerable time and effort, and utilised his own equipment, to get the underpass built cheaply. He says that had he used Fulton Hogan or another contractor, the cost would have been in excess of $400,000. In essence he says the savings in cost are his. Mr Tobin accurately points out that the agreement does not bind Mr Glaister to using Fulton Hogan or any other contractor, nor does it prevent him doing all or part of the work himself. And it does not prevent him applying for a subsidy from the Council.

[32] On the evidence before me it does not seem that either party was aware of the availability of this subsidy at the time the contract was negotiated. This, too, is part of the context in which the agreement was entered.

[33] Mr Johnstone says that it was always the fundamental premise of the negotiations that the assets would be split equally, and the liabilities shared equally but there was one exception to this. He says that Ms Harris would not agree to open- ended exposure for half of the cost of the works and that was the context in which a limit on her exposure of $150,000 was agreed. He says that they did not allocate the risk of the construction cost being less than the estimate which Mr Glaister had obtained, because their agreement was that the cost would be shared equally,

reflecting their equality of status, contribution and consequences. He says that it was never intended that one party would profit from the other.

[34] Ms McMillan says that Ms Harris had a determination that she should achieve a 50/50 split of relationship property. She accepts that while the nature of the properties concerned did not readily lend itself to an absolutely equal physical division, the emphasis was always on achieving an outcome that was as close to

50/50 as possible. The only exception to this was that Ms Harris was reluctant to simply agree to pay half of an open-ended sum for the underpass, and for that reason she insisted on imposing a maximum of $150,000 based on the estimate of $300,000

Mr Glaister had obtained. The same applied to the alternative proposition, if an underpass were not achievable – reinstatement of a dairy shed, as described in clause

9 of the agreement.

[35] Ms McMillan says she cannot recall that there was ever the slightest suggestion that Ms Harris’ financial exposure would be different if the shed rather than the underpass was constructed, or visa versa. In essence, she says, it went without saying that the deal was the same. She also says that had there been a difference in the financial exposure of her client under clauses 8 and 9 she would have advised her to obtain her own quotations for an underpass and for reconstruction of the dairy shed, to establish which would be of lesser cost to her.

[36] Mr Rodgers has a different view. He says that it was not his understanding nor, to his knowledge, that of Mr Glaister that the options in clauses 8 and 9 were to be treated equally. He says it was always assumed that the underpass would cost in the vicinity of $300,000 while it would be unlikely that refurbishment of the dairy shed would cost anywhere near that sum.

[37] This summary of the evidence demonstrates, in my view, that at the time the agreement was reached there was an expectation that the underpass would cost

$300,000 or more, that it was not contemplated at that point that it might cost less, and that no-one turned their mind to the possibility of a subsidy towards the cost being available from the Council. In my judgment, examination of these elements of the context in which the agreement was reached, at trial, has the potential of

establishing that clause 8 should be interpreted in such a way that Ms Harris is obliged to contribute to the actual cost to Mr Glaister of building the underpass, up to a maximum sum of $150,000.

[38] Further, there is a conflict on the evidence on whether the intention of the agreement overall was to achieve equality or whether that was only to be a desirable outcome with the principal aim being to create two viable dairy farms. This conflict cannot be resolved on affidavit evidence. It may be a factor relevant to interpretation, so it must be decided at trial.

[39] It follows, therefore, that Mr Glaister’s application for summary judgment cannot succeed. In this circumstance it is not necessary for me to discuss and make findings in relation to the other defences raised by Ms Harris, but in case I am wrong in my conclusion on interpretation, I will also discuss whether Ms Harris established before me that she has a tenable basis for relief under the Contractual Mistakes Act.

[40] In my opinion, Ms Harris has established a sufficient evidentiary base to show the prospect of her attaining relief under the Contractual Mistakes Act, on the basis that at the time the contract was entered she and Mr Glaister were influenced in their respective decisions to do so by a mistaken belief that the cost of building the underpass, which Mr Glaister would incur, would be a sum exceeding $300,000. Alternatively, at trial the evidence may establish that Ms Harris was influenced in her decision to enter the contract by a mistaken view that the underpass would cost at least $300,000, a mistake that was material to her decision to enter the contract, and was known to Mr Glaister. It was Mr Glaister who produced the estimate from Fulton Hogan, and in a draft of the agreement sent by Mr Rodgers to Ms McMillan eight days before the Fulton Hogan estimate was sent, it is recorded that Mr Glaister himself estimated the cost at $300,000.

[41] As well, it is arguable on the evidence before me that both Mr Glaister and Ms Harris were influenced in their decisions to enter the contract by the mistaken belief that the full cost of the works would be paid by Mr Glaister without any subsidy from an outside source.

[42] I therefore find that an arguable case for relief under the Contractual Mistakes

Act has been established.

[43] Mr Tobin argues that even if Ms Harris has an arguable case for relief under the Contractual Mistakes Act, such relief is not available in relation to an agreement to which the PRA applies.

[44] The starting-point for Mr Tobin’s argument is s 4 of the PRA:

4 Act a code

(1) This Act applies instead of the rules and presumptions of the common law and of equity to the extent that they apply –

(a) to transactions between spouses or partners in respect of property;

and

(b) in cases for which this Act provides, to transactions –

(i) between both spouses or partners and third persons; and

(ii) between either spouse or partner and third persons.

(2) Subsection (1) does not apply where this Act expressly provides to the contrary (such as in subsection (5)).

(3) Without limiting the generality of subsection (1), -

(a) the presumption of advancement does not apply between husband and wife:

(b) the presumption of resulting trust does not apply between spouses, civil union partners, or de facto partners:

(c) the presumption that the use of a wife’s income by her husband with her consent during the marriage is a gift does not apply between husband and wife.

(4) Where, in proceedings that are not proceedings under this Act, any question relating to relationship property arises between spouses or partners, or between either or both of them and any other person, the question must be decided as if it had been raised in proceedings under this Act.

(5) This section does not apply if the de facto partners have lived in a de facto relationship for less than 3 years.

(6) However, if the court makes an order under section 25(1)(a) in respect of any relationship property of de facto partners to whom subsection (5) applies, and any question relating to relationship property arises between those de facto partners in any subsequent proceedings that are not proceedings under this Act, then –

(a) subsection (5) does not apply; and

(b) the question must be decided as if it had been raised in proceedings under this Act.

[45] Mr Tobin says that the consequence of s 4(1) is that the PRA applies instead of the Contractual Mistakes Act to any issues that arise in relation to mistake in entering a property agreement.

[46] Mr Tobin notes that s 4B(1) provides that nothing in s 4 affects the law that applies where either spouse or partner is acting as a trustee under any deed or will. Section 4B(2) provides that for the purpose of that section every enactment and every rule of law or of equity continues to operate and apply accordingly as if ss 4 and 4A had not been passed. Mr Tobin says that this provision would not be necessary in relation to spouses or partners acting as trustees, unless the effect of s 4 was that enactments and rules of law or equity do not continue to apply.

[47] Mr Tobin says that the sole basis of any possible remedy for Ms Harris is s 21J by which the Court may set aside an agreement if giving effect to it would cause serious injustice.

[48] Neither counsel directed me to any case in which the argument advanced by Mr Tobin has been considered. Nor has my own research located any direct authority on this issue. Cases referred to by counsel do not, in my view, assist.

[49] Mr Tobin referred the Court to Mosead v Mosead.⁶ In that case, the Court of Appeal considered s 4 of the Matrimonial Property Act 1976, the then current section largely equivalent to s 4 PRA. The appellant sought remedies on the grounds of fraud, misrepresentation and breach of fiduciary duty in relation to the respondent’s conduct prior to her execution of a matrimonial property agreement. The Court found that s 4 did not preclude a remedy being granted in a proceeding for breach of fiduciary duty. The duty resting on the respondent was an equitable obligation which rests on all fiduciaries. The breach established was a failure by the respondent to provide to the appellant information relevant to her decision to enter the agreement. The Court found this was not a transaction between husband and wife, but a separate

_{equitable obligation.}

⁶ Mosead v Mosead [1997] NZFLR 97 (CA).

[50] This case is not directly in point in relation to the Contractual Mistakes Act. It relates to an equitable obligation, whereas the Act provides for remedies in defined circumstances that are directly derived from the state of mind of the parties in entering a contract. It does not assist, therefore, on the issue now before the Court.

[51] Ms Kelly referred to Phillips v Phillips.⁷ In that case the Court of Appeal, upholding the High Court, set aside a consent order made to give effect to an agreement settling the respective property rights of each party to a former de facto relationship. The Court found that both parties were influenced by the same mistake in entering the agreement, and this influenced their decision to do so. The case is of no application, however, to the present case; Mr Glaister and Ms Harris were parties to a marriage so the PRA applies.

[52] There are, however, a number of cases in which the High Court and the Court of Appeal have proceeded on the basis that statutory and equitable relief is available in relation to an agreement under the PRA. They lend some assistance in deciding the issue raised by Mr Tobin.

[53] The latest is Manning v Manning.⁸ A proceeding had been brought in the High Court by Mrs Manning for payment of a sum of money which she said was payable to her under a relationship property agreement. The High Court found in her favour and Mr Manning appealed. The High Court applied Vector Gas Ltd v Bay of Plenty Energy Ltd⁹ and that approach was approved by the Court of Appeal. The latter observed that it was not suggested that as the court was interpreting a relationship property agreement a different approach to interpretation should be taken.¹⁰

[54] The Court of Appeal concluded that the interpretation placed on the agreement by the High Court was correct, and it noted that rectification was also

_{briefly dealt with in the High Court. Both that Court and the Court of Appeal}

⁷ _{Phillips v Phillips [1993] 3 NZLR 159 (CA).}

⁸ _{Manning v Manning [2013] NZCA 671.}

⁹ _{JMM v TMM [2012] NZHC 2522 at fn 4.}

¹⁰ Manning v Manning, above n 7, at [29].

considered that rectification was not relevant,¹¹ so whilst this is not clear authority for the proposition that rectification, or other relief whether in equity or under statute, is available in relation to a property agreement under the PRA, neither the High Court nor the Court of Appeal excluded that prospect.

[55] Relief under the Contractual Mistakes Act was considered, on the facts, in Everist v Burbury.¹² Whether, as a matter of law, relief could be granted under that Act from the consequences of an agreement under the PRA does not appear to have been raised. Rather, the judgment proceeds on the assumption that relief under the Contractual Mistakes Act could be available. The Family Court had proceeded on that basis and in this court the learned Judge discussed the prospect of relief being

granted under the Act.

[56] I note, too, that the Court discussed s 21J of the PRA. It does not appear to have been argued that that was the sole basis upon which the Court might grant relief from the effect of the agreement which had been entered, nor did the Court so suggest.

[57] In Hildred v Strong,¹³ the Court granted relief under s 7 of the Contractual Mistakes Act 1977 by way of a variation of an agreement entered under the Property (Relationships) Act. The judgment does not contain a discussion of the jurisdictional issue raised by Mr Tobin.

[58] Finally, counsel referred me to Fisher on Matrimonial and Relationship

Property.¹⁴ At paragraph 5.35 the learned authors state:¹⁵

The legal implications of those agreements not purporting to affect the statutory relationship property regime are governed by the conventional law of contract. Examples are “farming partnership agreements” between parties and inter-party loans. In addition, the word “agreements” is used to describe those transactions falling within s 21. However, it seems clear that, subject to express qualifications, a contract in the strict legal sense is contemplated for the purposes of and s 21 (para 5.38). When considering agreements for the purpose of s 21 a large body of common law and equity is applicable, in

¹¹ _{At [60].}

¹² _{Everist v Burbury (2008) FRNZ 334 (HC).}

¹³ _{Hildred v Strong HC Welling CIV-2003-485-204, 25 November 2005.}

¹⁴ Fisher on Matrimonial and Relationship Property (online looseleaf ed, LexisNexis).

addition to the specific statutory requirements of those sections. Consideration must therefore be given to the way in which conventional contractual principles have been applied to relationship property agreements when considering capacity (para 5.39), formation (para 5.40), legal intention (para 5.41), form (para 5.42), consideration (para 5.43), illegality (para

5.47), misrepresentation and mistake (para 5.48), non-disclosure (para 5.49)

and discharge (para 5.50). Many of these principles are also applied by analogy when setting aside consent Court orders (para 5.95).

[59] At paragraph 5.48, where misrepresentation and mistake are discussed, the learned authors note that in some cases remedies drawn from conventional contract law are the preferable or the only relief available. After referring to relief based on misrepresentation, the learned authors say:¹⁶

Alternatively the false assumption may be due to a mistake on the part of either or both of the contracting parties. Broadly speaking conventional contract law affords a remedy if the mistake was material and its existence known to the other party (traditionally known as unilateral mistake), if it was common to both parties (common mistake) or if the parties each made different mistakes about the same matter (mutual mistake).

The learned authors then proceed to refer to relief in equity and under the Contractual Mistakes Act. There is no suggestion that relief under the Act is not available in respect of agreements entered under the PRA.

[60] The cases to which I have referred support the proposition that remedies are available under the Contractual Mistakes Act in respect of agreements under the PRA. In my view, this is the position. Section 4 does not expressly provide that other statutes do not apply to such agreements. It relates to “the rules and presumptions of the common law and of equity”. They must be read “subject to this Act” (s 4A) but I do not find the application of the Contractual Mistakes Act to be inconsistent with, or modified by, the PRA. I have not overlooked s 4B(2) or Mr Tobin’s argument on it, but in my view a more direct exclusionary provision would be required to abrogate the application of a statute which specifically deals with a material aspect of contractual formation and is derived from common law principles of long standing.

[61] I therefore find that the Contractual Mistakes Act applies to agreements under the PRA.

[62] For these reasons, also, the application for summary judgment cannot succeed.

[63] As noted earlier in this judgment Ms Kelly also argues that the agreement should be rectified, that there should be an implied term in the agreement that the actual cost of the underpass should be disclosed and that half the cost net of the Council contribution must be the maximum exposure of her client, and that there was no liability to make a payment at all given the condition in clause 8. Because the application by Mr Glaister for summary judgment has not succeeded for the reasons I have given, it is unnecessary to discuss these issues, and I prefer not to comment on them as the case will now proceed to trial and they may be issues for consideration at that time.

Outcome

[64] Mr Glaister has failed to establish that Ms Harris does not have an arguable defence to his claim. The application for summary judgment is dismissed.

[65] Ms Kelly expressly asked to be heard in relation to costs. I reserve costs;

memoranda may be filed within five working days for reference to me. Memoranda must be confined to no more than three pages.

J G Matthews

Associate Judge

Solicitors:

Wilkinson Rodgers, Dunedin.

Polson McMillan Lawyers, Dunedin.