Alloway v Bond [2015] NZHC 487 (16 March 2015)

Last Updated: 17 April 2015

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-002061 [2015] NZHC 487

BETWEEN	ROBERT MATTHEW ALLOWAY First Plaintiff
AND	ROBERT MATTHEW ALLOWAY as trustee of the KAKARAMEA PROPERTY TRUST Second Plaintiff
AND	JANE BOND Defendant

Hearing:	11 March 2015
Appearances:	First Plaintiff in Person and for the Second Plaintiff S Mitchell for the Defendant
Judgment:	16 March 2015

_{JUDGMENT OF WYLIE J}

This judgment was delivered by Justice Wylie on 16 March 2015 at 4.30 pm

_{Pursuant to r 11.5 of the High Court Rules}

ALLOWAY v BOND [2015] NZHC 487 [16 March 2015]

Introduction

[1] The defendant, Ms Bond, applies to strike out these proceedings pursuant to r 15.1 of the High Court Rules. The application is opposed by Mr Alloway.

[2] At issue is the scope of proceedings under the Domestic Actions Act 1975.

Background

[3] The first plaintiff, Mr Alloway, and the defendant, Ms Bond, first met each other in September 2009. Their relationship developed quickly, and on or about

9 September 2009 they entered into an agreement to marry.

[4] A short time later, on 15 October 2009, Mr Alloway gave Ms Bond an engagement ring. He says that it was valued at approximately $45,000. This was followed up in November 2009 when Mr Alloway says that he loaned Ms Bond a Corum Limited Edition wristwatch. She accepts that he presented her with a watch, but says that it was given to her as a gift. Further, in December 2009 Mr Alloway gave Ms Bond a Rolex Oyster Perpetual wristwatch.

[5] The couple began cohabiting in about April 2010. They moved into an apartment. They had a daughter who was born in May 2010.

[6] In January 2011 Mr Alloway set up a trust – the Kakaramea Property Trust. It purchased a property in Torbay, Auckland, and in late 2011 Mr Alloway and Ms Bond moved into that property. Mr Alloway says that the house was purchased because Ms Bond kept pressuring him to buy a house for her to live in. Ms Bond says that it was the family home and that they both lived there with their daughter. Mr Alloway provided all of the furniture and other chattels.

[7] In about May 2011 Mr Alloway gave Ms Bond access to his bank account. He says that she took money from it. She says that she only used it to buy items for family and household use. Mr Alloway also purchased additional jewellery for Ms Bond.

[8] The parties subsequently had a son who was born in November 2012.

[9] The relationship started to deteriorate in early to mid 2012. Mr Alloway was frequently out of the country on business and they spent less and less time together. Sometime between June 2012 and February 2013 the parties ceased living together as a couple, and their agreement to marry came to an end.

[10] Initially Ms Bond continued to occupy the house property owned by the trust, together with the couple’s children. Mr Alloway asserts that Ms Bond denied him access to his business equipment which was in the house, and that as a result he lost income over a period of some five days until he could replace the equipment. Mr Alloway asked Ms Bond to vacate the property and he ultimately served a trespass notice on her. The property was vacated by Ms Bond on 7 April 2013.

[11] In April 2013 Mr Alloway commenced proceedings under the Domestic

Actions Act in this Court. Inter alia, he asserts that:

(a) he made gifts to Ms Bond in the sum of some $66,000; (b) he loaned items to her with a total value of $5,800; and (c) she converted furniture and chattels worth $55,000.

Mr Alloway seeks an order pursuant to s 8(5)(c) of the Act vesting the various items of property in him. In the alternative he seeks damages of not less than $126,900. In addition to either alternative he seeks additional sums for the cost of cleaners, lost income, the costs of repairing broken chattels, funds withdrawn from his bank account, funds generated through Ms Bond’s use of the TradeMe website, and the costs of repairing damage to the front door area of the property owned by the Trust. Mr Alloway also alleges conversion, trespass and negligence and, in the latter two cases, he seeks damages.

[12] Ms Bond filed a statement of defence to these proceedings in September

2013.

[13] In May 2013 Ms Bond applied for orders pursuant to the Property (Relationships) Act 1976 in the Family Court at North Shore. Mr Alloway has filed a defence to those proceedings. The second plaintiff trust has also been joined as a party, as has a separate trust settled by Ms Bond.

[14] Initially counsel then appearing for Mr Alloway suggested that the Domestic Actions Act proceedings in this Court should be “parked up” until the Family Court proceedings were resolved. Mr Mitchell for Ms Bond agreed and on 2 October 2013

Associate Judge Christiansen adjourned the proceedings for a period of six months. The proceedings were called again on 26 March 2014. It was then clear that progress in the Family Court proceedings was slow, but Associate Judge Christiansen adjourned the proceedings for a further six months. They were called again on 15

October 2014. Mr Mitchell advised that he had instructions to file a strike out application, and a timetable was put in place to this end.

[15] The proceedings in the Family Court have not as yet been set down for hearing. There have been arguments between the parties as to discovery. In addition, there were competing applications for security for costs. These interlocutory matters were dealt with by Judge Burns in December 2014.¹

Submissions

[16] Mr Mitchell appearing for Ms Bond argued that the property that is the subject of the Domestic Actions Act proceedings is owned by the parties, and that the majority of the property consists of domestic chattels. He argued that the proceedings before the Family Court will resolve all issues of property that need to be determined between the parties, and that the proceedings under the Domestic Actions Act simply replicate the Family Court proceedings. He submitted that as a result, the proceedings under the Domestic Actions Act are unnecessary. Further, he argued that this Court does not have jurisdiction. He referred to s 8(1) of the Domestic Actions Act. He submitted that the termination of the parties’ agreement to marry is irrelevant to the dispute between them. He argued that this is not a case where either Mr Alloway or his trust are able to establish that any of the actions

taken relate to the agreement to marry, or that the termination of that agreement gives rise to the disputes between them in relation to property.

[17] Mr Alloway, appearing on his own behalf, and on behalf of his trust, argued that the statement of claim under the Domestic Actions Act discloses arguable causes of action, and that the subject matter of the claim is different to and not duplicated by the proceedings in the Family Court. He argued that this Court does have jurisdiction by virtue of s 8 of the Domestic Actions Act.

Relevant principles

[18] Rule 15.1 gives the Court jurisdiction to strike out all or part of a pleading if it discloses no reasonably arguable cause of action, or is likely to cause prejudice or delay, or is frivolous or vexatious, or is otherwise an abuse of the process of the Court.

[19] The criteria to be applied in a strike-out application are well settled. They were discussed by the Court of Appeal in Attorney-General v Prince.² I summarise them briefly as follows:

(a) Pleaded facts, whether or not admitted, are assumed to be true.

(b) A cause of action or defence must be clearly untenable before it will be struck out.

(c) The jurisdiction is to be exercised sparingly, and only in clear cases.

(d) The jurisdiction is not excluded by the need to decide difficult questions of law.

(e) The Court should be particularly slow to strike out a claim in any developing area of the law.

[20] These principles were endorsed by the Supreme Court in Couch v

Attorney-General³.

Analysis

[21] Section 8(1) of the Domestic Actions Act provides as follows:

Where the termination of an agreement to marry gives rise to any question between the parties to the agreement, or between 1 or both of the parties to the agreement and a third party, concerning the title to or possession or disposition of any property, any such party may, in the course of any proceedings or on application made for the purpose, apply to the court for an order under this section.

As can be seen, it is only where the termination of an agreement to marry gives rise to a dispute about property, that application can be made. Once an application is made, either this Court or the Family Court has jurisdiction.⁴

[22] The Act was brought into force to abolish actions for breach of promise of marriage. It also abolished the actions for damages for adultery, for enticement of a spouse, for harbouring of a spouse or child, and for enticement or seduction of a child. The provisions contained in Part II of the Act, dealing with property disputes arising consequent on the termination of agreements to marry, are succinct. Section

8(3) provides that on application, the Court is required to make such orders as it thinks necessary to restore each party to the agreement, and any third party, as closely as practicable to the position that party would have occupied if the agreement had never been made. To give effect to this subsection, the Court can, notwithstanding that the legal or equitable interests of all parties in any property may be defined, or that a party may have no legal or equitable interest in any property,

make orders for:⁵

(a) the sale of all or any part of the property, and the division or settlement of the proceeds in such shares and upon such terms as it

_{thinks fit;}

³ _{Couch v Attorney-General [2008] NZSC 45, [2008] 3 NZLR 725 at [33].}

⁴ _{Domestic Actions Act 1975, s 9(1).}

⁵ Section 8(5).

(b) the partition or division of the property;

(c) the vesting of the property owned by one or two parties and two or more parties in common in such shares as it thinks fit;

(d) the conversion of joint ownership into ownership in common in such shares as it thinks fit; or

(e) the payment of money by any party to any other party or parties.

The Court is directed not to take into account or attempt to ascertain or apportion responsibility for the termination of the agreement to marry.

[23] Casey J in the Court of Appeal has expressed reservations, obiter, about the application of the Act where the parties enter into a de facto relationship. He noted as follows:⁶

The claim was put forward both on the grounds of a constructive trust and under s 8. ...

In this Court the contest was simply over the proper amount and counsel were agreed that it would be the same, whether under a constructive trust or under the Act.

My reservation about applying the latter to these circumstances arises from the opening words of subs (1)—“Where the termination of an agreement to marry gives rise to any question between the parties etc.” These parties not only agreed to get married, but they also agreed to live in a “de facto” domestic and sexual relationship, and it was their decision to embark on that which can be seen as leading to the acquisition of the house property and to its maintenance as their family home. Similarly, it was the termination of that relationship which led to the dispute about dividing their property. The concurrent agreement to marry appears to be no more than a facet of that more fundamental association. It seems quite artificial to regard this question about the property as being merely the result of their broken engagement. This is borne out by the difficulties experienced in trying to restore the parties to the position they would have been in if the agreement to marry had never been made, as enjoined by s 8(3).

Rather than introduce into the arena of domestic property disputes a new category of “engaged de factos”, I would prefer to see s 8 confined to what I think is its real purpose—namely, the settlement of disputes about property acquired to mark the engagement (such as the ring in this case), or in contemplation of the marriage envisaged by it, rather than in furtherance of

⁶ Oliver v Bradley [1987] NZCA 70; [1987] 1 NZLR 586 (CA) at 591.

some other personal relationship. I do not think the legislation was ever intended to apply to the de facto situation in this case ... However, in the absence of any argument about the application of the Act, I content myself only with the expression of these reservations.

[24] Since these comments were made, the Property (Relationships) Act has been extended to introduce a statutory regime for the resolution of property disputes between de facto partners.⁷ Nevertheless, the Domestic Actions Act was not repealed, and clearly it can still be relevant where there is a property dispute arising out of an agreement to marry and the parties do not, either before or after the agreement, enter into a de facto relationship.

[25] Casey J’s reservations have been shared by other judges, for example, Judge Somerville in the Family Court,⁸ and Judge Boshier in the District Court.⁹

Neazor and Woolford JJ have both taken the view that the purpose of the Domestic Actions Act is that expressed by Casey J – namely the settlement of disputes about property acquired to mark the engagement, or in contemplation of the marriage envisaged by it.¹⁰ Neazor J held that there must be a “necessary connection” between the property arrangements in dispute and the intended marriage.¹¹

[26] The issues for determination which will arise on a cause of action based on s 8 of the Domestic Actions Act are essentially factual. They are as follows:¹²

(a) Was there an agreement to marry between the parties? In this case the answer is clearly yes. This is admitted in the pleadings.

(b) Was the property that one party gave to the other related to the agreement? In this case the answer will depend on the evidence at trial. It may be some of the property, for example, the engagement

_{ring, did relate to the agreement to marry, but that other property dealt}

⁷ _{Property (Relationships) Amendment Act 2001.}

⁸ _{Lee v Mahon [2002] NZFLR 1136.}

⁹ _{Nye v Reid [1993] NZFLR 60.}

¹⁰ Zhao v Huang [2014] NZHC 132, [2014] NZFLR 782 at [39]; Stopforth and Roddick (1990)

_{6 FRNZ 392 (HC).}

¹¹ _{Stopforth and Roddick, above n10, at 936.}

¹² Nye v Reid above, n 9. Stopforth v Roddick above n10.

with, particularly after the parties started living together, did not relate to the agreement to marry.

(c) Did the termination of the agreement directly cause a loss in respect of the property? In this case the answer will depend on what item of property is being considered.

[27] In my view, the Court’s jurisdiction under s 8 is limited to cases where property in dispute was acquired or dealt with to mark or as part of the agreement to marry, and the dispute arises immediately and demonstrably from termination of the agreement. There must be a necessary connection.

[28] I very much doubt whether Mr Alloway will be able to succeed in his proceeding under the Domestic Actions Act in relation to many of the items of property he has put in dispute in his statement of claim. Nevertheless, for the purpose of a strike-out application, I am required to take the pleaded facts as I find them. They are assumed to be true, as long as they are not entirely speculative and without foundation.

[29] In his statement of claim, Mr Alloway has pleaded as follows:

Had Robert and Jane not made an agreement to marry, Robert would not have:

(a) Purchased the items given to Jane, with a total value of $66,101.07 (b) Loaned items to Jane with a total value of $5,799

(c) Allowed Jane to withdraw $17,920 from his bank account

(d) Allowed Jane to spend on herself an amount to be determined at the hearing, but being at least $23,010.13, from his bank account

(e) Funded Jane’s purchase of items to re-sell on TradeMe, both the amount of the purchases and the amounts of the sale to be quantified before hearing

(f) Lost income of $7,500

(g) Had to pay for cleaners to clean the House Property following her occupation of it

(h) Had his furniture and chattels worth $55,000 converted

While Ms Bond has denied this allegation in her statement of defence, it is a pleaded fact. It cannot be said to be speculative and without foundation. I must assume for present purposes that it is correct. Accordingly, I cannot find that the cause of action based on s 8(1) of the Domestic Actions Act is clearly untenable.

[30] Further, and in any event, other causes of action raised in the statement of claim allege conversion, trespass, and negligence. They are not issues which could readily be decided by the Family Court in the context of the Property (Relationships) Act proceedings. While the cause of action alleging conversion seeks orders requiring Ms Bond to return loaned items and furniture to Mr Alloway, or alternatively the payment of a monetary sum, the cause of action alleging trespass seeks damages in an amount to be determined by the Court, as does the cause of action alleging negligence.

[31] In the circumstances, I am not persuaded that it is appropriate to strike out Mr Alloway’s statement of claim and I decline to do so. The application is dismissed.

[32] I do, however, observe that the parallel proceedings are unfortunate. There is a risk of contradictory findings. It may be possible to transfer the Domestic Actions Act proceedings to the Family Court. Alternatively, it may be preferable for this Court to deal with the Domestic Actions Act proceedings first, because the outcome will affect the scope of the Family Court proceedings. These issues were not canvassed before me, however, and I take them no further. The proceedings in this Court are to be placed in the Duty Judge list for mention at 10.00 am on 25 March

2015 so that directions can be given for their disposition.

Costs

[33] Mr Alloway appeared on his own behalf. He is not entitled to a costs order. He may, however, be able to claim his reasonable disbursements. If disbursements are to be claimed, I direct as follows:

(a) Mr Alloway is to file a memorandum detailing the disbursements he seeks to recover from Ms Bond within 10 working days from the date of this judgment,

(b) Ms Bond is to reply within a further 10 working days.

[34] I will then deal with the application on the papers, unless I require the assistance of counsel.

Wylie J