B v B Coa

• Jurisdiction: New Zealand
• Judge: Wild J
• Judgment Date: 18 June 2012
• Neutral Citation: [2012] NZCA 255
• Docket Number: CA206/2011
• Court: Court of Appeal
• Date: 18 June 2012

BETWEEN

B

Appellant

and

B

Respondent

[2012] NZCA 255

Court:

O'Regan P, Wild and Miller JJ

CA206/2011

IN THE COURT OF APPEAL OF NEW ZEALAND

Appeal from a High Court decision which ordered the appellant to pay the respondent $145, 000 — parties were separated — parties had agreement that respondent was to pay child support and appellant was to pay respondent from settlement of house — respondent stopped paying child support — appellant started receiving Domestic Purposes Benefit — whether appellant had agreed to release respondent from his child support obligations — whether appellant entered into the release agreement under duress — whether release agreement unconscionable.

Counsel:

A Barker for Appellant

G P Mason and T R Vanderkolk for Respondent

• A The appeal is allowed.

• B The summary judgment order under appeal is quashed.

• C The respondent's claim in the High Court is to proceed to trial in the ordinary way.

• D The respondent is to pay the appellant's costs for a standard appeal on a band A basis with usual disbursements.

• E This case may be reported and cited as Barnes v Barnes.

JUDGMENT OF THE COURT

REASONS OF THE COURT

(Given by Wild J)

Introduction

1 This judgment anonymises the names of the parties and the children. Although they are not the parties? names, for ease of later citation, this case may be reported and cited as Barnes v Barnes.

2 Mrs B appeals against an order, by way of summary judgment, that she pay

$145, 000 to Mr B by 6 June 2011. The order was made by Associate Judge Gendall on 4 March 2011. 1

3 The payment order was based on the Relationship Property part of an agreement (we will refer to it as ‘the Agreement’) between the parties which also provided that Mr B was to pay Mrs B $4, 000 per month as child support.

4 Mrs B unsuccessfully submitted to the Associate Judge that her $145, 000 obligation to Mr B was interdependent with Mr B's child support obligation to her, which she alleged he had breached. She argued that she only agreed to pay the $145, 000 on the basis that the monthly $4, 000 child support payments continued and were to be used to raise a mortgage on one of the three properties that the Agreement vested in her to finance the $145, 000 payment to Mr B.

5 Mr B's answer to that ‘interdependence’ argument was that Mrs B had agreed to release him from his child support obligation (we will call this ‘the release agreement'). He thus had no obligation to Mrs B capable of being ‘interdependent’. Mrs B responded that any release agreement was voidable at her instance for duress or as an unconscionable bargain. Those were her two defences to Mr B's reliance on the release agreement.

6 The Associate Judge held that the release agreement was not vitiated by duress, and that it was not reasonably arguable that the release agreement was an unconscionable bargain. It followed that Mrs B had no arguable defence to Mr B?s claim for the $145, 000. Thus, the Associate Judge entered summary judgment in favour of Mr B for that sum.

7 The issues for us are:

Issue (c) is relevant to issue (b), so we will deal with it before we come to issue (b). But first some background is needed.

• (a) Did the parties agree that Mr B's child support obligation had ended? Framed differently, did the parties enter into what we have called the release agreement?

• (b) If yes to (a), did Mrs B enter into the release agreement under duress, and/or was the release agreement unconscionable?

• (c) Was Mr B in breach of his obligation to pay $4, 000 per month child support when the parties entered into the release agreement (if indeed they did enter into such an agreement)?

Background

8 After separating about six months earlier, Mr and Mrs B signed the Agreement on 15 December 2008. Each party was independently legally advised by a solicitor who certified the Agreement pursuant to s 21F of the Property (Relationships) Act 1976. There is no suggestion that the Agreement is not enforceable. Under the heading ‘Parenting’, the Agreement dealt with the care and support of “their three daughters”. It then dealt with their property under the heading

‘Relationship Property’. Two provisions of the Agreement, one under each heading, are relevant to this appeal:

Parenting

…

• 4. [Mr B] agrees to pay $4, 000.00 per month directly into a bank account nominated by [Mrs B], as Child Support for the 3 girls. On this basis [Mrs B] agrees not to apply to the Inland Revenue Department for an assessment for Child Support against [Mr B]. [Mrs B] and [Mr B] agree that they will periodically discuss and increase Child Support payments to account for inflation and any other changed circumstances. Payments will continue until mutually agreed otherwise by [Mr B] and [Mrs B].

…

Relationship Property

…

• 9. [Mrs B] and [Mr B] agree that [Mrs B] shall pay [Mr B] $145, 000.00 for his share of the three properties mentioned above. She shall pay the $145, 000.00 to [Mr B] on and before the 30 May 2010.

9 Mr B complied with cl 4 from December 2008 to October 2009 inclusive, paying the $4, 000 around the fifth of each month. By November 2009 tension had arisen between the parties. This resulted from two, perhaps related, items of information that had been given to Mr B. The first was that Mrs B was in a relationship with a man who had been a close friend of Mr B's. The second was that the youngest girl may not be his daughter. Mrs B had agreed to resolve the paternity concern by taking a DNA test on 12 November 2009. In an email on 9 November she asked Mr B's solicitor to advise him of this, and also to advise Mr B “that he is currently in arrears [of] this month's child support payment”. Mrs B sent further emails to Mr B's solicitor on 10 and 11 November advising that she had still not received the November child support payment. In the 11 November email she stated:

Unfortunately as I have still not received any Child Support from your client for the month of November, I am unable to afford to make the journey to Palmerston North tomorrow. I will phone the clinic in the morning to cancel the DNA appointment. As I am also almost out of food, household provisions and have outstanding bills to take care of, I am left with little option but to approach Social Welfare for financial assistance. Can you please inform your client that I will be required to present his relevant details (employer, home address etc) to the Social Welfare Dept. and I will endeavour to provide the correct necessary facts.

10 By letter dated 16 November, Mr B's solicitor advised Mrs B:

It should be noted that the Separation and Property Agreement signed by you and our client did not specify a date on which the child support payment had to be made, simply that an amount would be paid each month. Our client advises that this month?s payment will be made before the end of the month.

11 Mrs B received that letter in the mail on 18 November. She emailed Mr B's solicitor that day advising:

As you mentioned in your letter, it was not specified in our Separation Agreement which date of each month the agreed Child Support payment would be payed. Your client has previously payed thereabouts on the 5th of each month for the past 12 months. Therefore in the spirit of our agreement, I naturally assumed I would receive his contribution every 4 weeks, not the 8 week unplanned timeframe you have only just notified me of. If for some reason your client was unable to afford his November Child Support obligation until the end of the month, and he had communicated that to me, I may have been able to make other arrangements to carry us through till the end of the month. Consequently as I did not receive a timely response to the three emails I sent you last week (09/11/09, 10/11/09, 11/11/09) explaining our precarious financial situation, I was left with little alternative but to approach the MSD for an emergency food grant. I explained my situation to my appointed Case Manager, admitting to the insecurity your clients' fiscal control was having on my families' well being and was left no alternative but to also apply for the Domestic Purposes Benefit. Consequently I will no longer require your client's monthly support contributions, I would appreciate if you could please let him know in a timely manner so as to save him an unnecessary transaction.

In the affidavit she swore on 20 December 2010 opposing Mr B?s application for summary judgment, Mrs B stated “On November 16th I applied to go onto the Domestic Purposes Benefit”.

12 On 25 November Mr B?s solicitor emailed Mrs B acknowledging her 18 November email and asking:

Could you please advise the date that you commenced receiving the Domestic Purposes Benefit so that our client can arrange any final payment to be made directly to you.

13 Mrs B'xss response to this was an email on 27 November stating:

Can you please inform your client the date I commenced the DPB is not of his concern. When my children and I needed money for food and household bills, your client made no attempt to communicate the unprecedented delay I would encounter for the month of November, ignoring my 3 urgent emails explaining our situation, until it was too late. Your clients intent seemed mean and uncaring towards his childrens wellbeing and his actions forced me to take measures that no longer require his direct financial assistance and no longer allow me to receive any further assistance from him.

14 On 10 March 2010 Mr B?s solicitor (he had changed to a new solicitor) wrote to Mrs B asking whether she had put in place arrangements to pay the $145, 000 on or before 30 May 2010.

15 Mrs B responded on 21 March:

...