Yates v Moore [2019] NZFC 9676

Published 18 September 2020

Notice of interest against title — lapse of notice — relationship property — when separate property becomes relationship property — tenants in common — property maintenance — chattels — property sharing agreement — disparity in contributions — constructive trust — unconscionable bargain — undue influence — Property (Relationships) Act 1976, ss 9A, 17, 21F, 21G, 21P, 21R, 42 — Property (Relationships) Amendment Act 2001, s 15 — LAC v KAY HC Dunedin CIV-2010-412-000057, 21 May 2010 — Gemmell v Harlow (2006) 25 FRNZ 887 (HC) — A-G for England and Wales v R [2004] 2 NZLR 577 (PC) — Pharmacy Care Systems Limited v A-G (2004) 17 PRNZ 308 (SC) — Marston v Moor [2013] NZHC 2249 — Gustav & Co Ltd v Macfield Limited [2007] NZCA 205 — JMM v TM [2013] NZCA 671 — Rose v Rose [2009] NZSC 46, [2009] 3 NZLR 1 — BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 (PC) — Mobil Oil New Zealand Limited v Development Auckland Limited [2016] NZSC 89, [2017] 1 NZLR 48 — Lankow v Rose [1995] 1 NZLR 277 (CA) — Judd v Hawke’s Bay Trustee Company Limited and Hodgkinson [2014] NZHC 3298. This was an application to prevent a notice of claim from lapsing on property in the name of the respondent. The parties had been in a de facto relationship for 27 years between 1992 and 2019. There had been a property sharing agreement in place, which stipulated terms around the parties' separate property, in particular that specific property listed in the agreement was to remain separate. The circumstances around the signing of the agreement were in contention, as was the effect of the agreement. The issues for determination were whether the agreement could be set aside under the principles of undue influence and/or unconscionable bargain; if not, whether the agreement prevented the applicant from seeking an interest in the property under the Property Relationships Act (the PRA) or the law of constructive trusts; and whether any elements of the PRA or the law of constructive trusts were satisfied on the evidence. In relation to the first two issues, the Judge held that there had been no undue influence as the respondent had not exercised unfair exploitation over the applicant in order to get her to sign the agreement; nor was there an unconscionable bargain as the applicant had received legal advice prior to signing the agreement which advised her against doing so, and she was not operating under any kind of mental impairment or disability. In relation to the effect of the agreement it was argued for the applicant that the house in question was not listed in the agreement Schedules, and therefore there was nothing in the agreement to prevent the applicant from making a claim any increase in value of the property pursuant to ss 9A and 17 of the PRA attributable to her contributions. Counsel for the respondent argued that there was a "gap" between the wording of Clauses 5 and 6 of the agreement, and that a term could be implied into cl 6 that any increase in the value of other separate property acquired under that clause was also separate property. The Judge preferred the argument of the applicant, having regard to the legislative history of ss 9 and 9A and the principles of contractual interpretation, that Clause 6 did not exclude the application of s 9A. On the issue of the law of constructive trusts, the Judge found that more evidence was required to support the applicant's claim, in particular the increase in value attributable to her contributions and how cl 10 of the agreement (providing a lump sum in "full and final settlement" of the applicant's interest in the separate property) might apply. The Judge was satisfied that the applicant at this stage had grounds to claim to the interest in the property, and made an order preventing the lapse of notice of claim until final determination of the matters between the parties. Judgment Date: 27 November 2019.