Snee v Snee [1999] NZCA 252; [2000] NZFLR 120; (1999) 13 PRNZ 609 (1 November 1999)

Last Updated: 30 November 2011

IN THE COURT OF APPEAL OF NEW ZEALAND

CA198/99

	BETWEEN	DIANE CAROL SNEE
		Applicant

	AND	BENJAMIN LEFORE SNEE
		Respondent

Hearing:	28 October 1999
Coram:	Richardson P Gault J Blanchard J
Appearances:	D B Collins and F M L Gush for Applicant M E J Macfarlane for Respondent
Judgment:	1 November 1999

JUDGMENT OF THE COURT

[1] The applicant seeks leave pursuant to s67 of the Judicature Act 1908 to appeal a judgment of Goddard and Durie JJ given in the High Court at Wellington on 11 May 1999, allowing the respondent's appeal from a judgment of Judge Pethig in the Family Court. Leave to appeal to this court was refused by Goddard and Durie JJ on 6 August 1999.

Facts

[2] The parties were married on 27 March 1982 and separated on 29 October 1989. They have been living apart since that date. The remaining dispute between them centres on the existence and effect of what is said to be a property agreement in terms of s21 of the Matrimonial Property Act 1976 arising from solicitors’ correspondence in May 1991.
[3] As noted above the parties separated in October 1989. On 15 November 1990 the wife applied for matrimonial property orders, custody and maintenance. The parties met together with their respective solicitors to discuss matters on 1 May 1991. On 3 May 1991 the husband’s solicitors wrote to the wife’s solicitors to record certain agreements made on, inter alia, the issue of matrimonial property.
[4] The relevant part of the letter read:

Matrimonial Property

We record the verbal agreement on the division of matrimonial property which was reached between the parties at the meeting in your offices on 1 May 1991 that

1. Chattels in the possession of each party are to be listed, together with a further list itemising chattels sough as the separate property by each party. These lists are to be exchanged and physical division of the chattels is to be arranged by the parties.
2. The business Hutt Valley Answer Services and Hutt Valley Executive Office Services are to be the separate property of [the wife].

[The husband] will be fully indemnified by [the wife] for all debts, past and future in relation to these businesses and release from his personal guarantees for bank loans pertaining to these businesses will be sought from the National Bank.

3. All Government Superannuation Fund entitlements are to be the separate property of [the husband].
4. All existing obligations and interests of each of the parties in the Rossnee companies shall be ascertained when the assets and liabilities of these companies can be properly identified and the final division of this part of the matrimonial property shall be addressed at such a time.

Pending such final division of all matrimonial property, the obligations of [the husband] as part of the Rossnee Piggeries partnership shall be met by the Pork Products partnership in respect of the balance outstanding to Central Feed Mills Limited after the payment of the lump sum from Rossnee Farm sale.

[5] On 24 May 1991 the solicitors for the wife replied:

Matrimonial Property

(a) Chattels:

[The wife] advises that the easiest way to resolve the division of chattels is to arrange a valuation on the chattels in your client’s possession and in ours. We have arranged for Central Markets to do the valuation (at our client’s cost) and we ask if you could telephone the writer to confirm Mr Plunkett can call either next Tuesday or Wednesday next week.

Paragraphs 2 and 3 of your letter agreed.

We will need to come back to you with regards to your client’s obligations to Rossnee Farm and Rossnee Piggery once the Inland Revenue position has been clarified.

[6] The case was first heard by Judge Pethig in the Family Court at Lower Hutt and judgment was delivered by him on 14 July 1998. On the subject of the property agreement the wife argued first that no concluded agreement between the parties had been reached, and second that if there was an agreement then it was unjust and should not be enforced. The Judge did not reach a view on whether a concluded agreement had been reached but on the second issue said:

I have come to the view that whether or not there was a concluded agreement, it was one which on the facts as I find them, was so plainly unjust at the time it was made that it could not possibly be enforced against [the wife] and consequently s21(12) of the Act applies.

[7] The Judge determined that the total value of the matrimonial property was $230, 712 and that of this the wife had received property worth $29, 287. This disparity led him to find that the agreement was plainly unjust. He determined that the parties should receive an equal share of their matrimonial property and he ordered the husband to pay the wife the appropriate sum to achieve this.
[8] The husband appealed to the High Court. The case was heard by a full court consisting of Goddard and Durie JJ and judgment was delivered on 11 May of this year.
[9] The High Court determined that the May 1991 arrangements constituted a valid and enforceable matrimonial property agreement. The High Court held that there was no disparity in the division of the matrimonial property giving rise to an injustice requiring the court’s intervention. In particular Goddard and Durie JJ said that they were

of the opinion that the learned Judge erred in considering the justness of the arrangement or agreement in terms of the book values of assets and not in terms of the value of the agreement to the parties. In any event, he omitted certain items from the reckoning. Were a full account taken, the conclusion is not one that could reasonably have been drawn.

Grounds of appeal

[10] Mr Collins for the applicant proposes three grounds of appeal. The first, a mixed question of fact and law, concerns the question of whether the division of matrimonial property was unjust. The legal issue sought to be argued and said to be of general importance is the extent to which the real value of matrimonial property can be overridden by a court’s assessment of a notional value of an agreement to the parties. The factual issue is whether the High Court was wrong to find that the Family Court had miscalculated the value of the matrimonial property.
[11] Second, the applicant wishes to appeal the High Court’s finding that there was “an informal agreement of sufficient clarity and certainty to constitute an enforceable contract”.
[12] The third ground of appeal concerns the question of whether there was material prejudice to the wife through non-compliance with s21(4) – (6) of the Matrimonial Property Act 1976. Section 21 (6) requires that the solicitor witnessing a party’s signature on a matrimonial property agreement certify that he or she has explained to that party the effect and implications of the agreement. The High Court held in this case that the applicant was not materially prejudiced by the failure to comply with this subsection.

Leave to appeal

[13] We turn now to consider whether these are matters that are appropriate for a second appeal pursuant to s67 of the Judicature Act 1908.
[14] Section 67 of the Judicature Act 1967 provides:

The determination of the High Court on appeals from inferior Courts shall be final unless leave to appeal from the same to the Court of Appeal is given by the High Court or, where such leave is refused by that Court, then by the Court of Appeal.

[15] The principles applicable to the granting of leave to bring a second appeal were stated by this Court in Waller v Hider [1998] 1 NZLR 412. What we said in that case, at 413-414, bears repeating at length:

The appeal must raise some question of law or fact capable of bona fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the cost and delay of the further appeal: Rutherfurd v Waite [1923] GLR 34; Cuff v Broadlands Finance Ltd [1987] 2 NZLR 343 at pp 346 – 347. In the latter case the Court also remarked that in the end the guiding principle must be the requirements of justice. Further authorities of this Court are cited in McGechan on Procedure, para J 67.05.

Notwithstanding frequent reminders of the test, applications continue to be made which have little or no prospect of success. Counsel are of course to be commended for making all reasonable efforts to advance the cause of their clients but after a first appeal they must draw back and appraise the state of the case dispassionately, asking whether in truth the disputed matter contains the requisite element of sufficient importance. The scarce time and resources of the High Court and of this Court are not to be wasted, nor additional expense for an unsuccessful client incurred without realistic hope of benefit.

Upon a second appeal this Court is not engaged in the general correction of error. Its primary function is then to clarify the law and to determine whether it has been properly construed and applied by the Court below. It is not every alleged error of law that is of such importance, either generally or to the parties, as to justify further pursuit of litigation which has already been twice considered and ruled upon by a Court.

When the disputed matter is entirely or largely a question of fact the task of the applicant under s 67 is harder. An issue of fact in a matter falling within the jurisdiction of an inferior Court will seldom be of public importance. It is better that we make no attempt to define the circumstances in which a factual contest can be taken to have private importance but obviously it may do so if the amount at stake is very substantial or the decision reflects seriously on the character or conduct of the would-be appellant or, as in Cuff, the judgment below has special consequences (for example, bankruptcy) for the losing party. Even then, however, leave cannot be anticipated if the applicant is seeking to disturb concurrent findings of fact in the lower Courts.

.....

The cost to the litigants in coming to this Court, including preparation of submissions and written materials as required by the Practice Note for civil appeals, oral presentation of the substance of the case (at least half a day), travel and accommodation expenses of both counsel and other normal disbursements would not in the aggregate be much less than $10,000. (As best we can assess it, half as much again would be expended by the Court system in processing, hearing and determining the appeal.) To this can be added moneys already spent on the s 67 application in the High Court (and there was a cost to the system of that action). On a cost-benefit analysis, the view may be taken that a second appeal would add unjustifiably to the burden already shouldered by these litigants. The limited chance of success on the s 67 application and again at any substantive hearing ought to be carefully weighed against the relatively modest net benefit sought by the applicant.

[16] Since Waller v Hider the number of applications to this Court for special leave pursuant to s67 has in fact increased. In the year to date we have heard seven such applications: Gallichan v Gallichan (CA 174/99, judgment 20 September 1999), Churtonleigh Retirement Home Ltd v Renwick (CA 109/99, judgment 20 September 1999), St Clair Brown v Payless Plastics Limited (CA 196/99, judgment 20 September 1999), Cranson v New Zealand Trainers’ Association Inc (CA 187/99, judgment 23 August 1999), Imbeau v Dental Council of New Zealand (CA 201/99, judgment 27 May 1999 (leave pursuant to s64(17) Dental Act 1988 where similar principles said to apply)), Gazzard and Nicolson v Papakura Realty and Anor (CA 224/98, judgment 3 May 1999), Black v Shakespeare (CA 37/99, judgment 22 March 1999). Last year we heard six: K v K (CA 40/98, judgment 18 November 1998), English v Vorstman (CA 166/98, judgment 16 November 1998), Slight v Slight (CA 19/98, judgment 16 November 1998), Amcor Trading (NZ) Ltd v Harrison (CA 138/98, 13 August 1998 (no jurisdiction)), Kemp v Gillanders (CA 269/97, judgment 16 March 1999), Brogden v Walsdorf (CA 71/96, judgment 23 February 1998).
[17] In Arnold v Livestock Traders International Pty Ltd (CA 105/98, judgment 10 December 1998), where leave had been granted by the High Court, this Court referred to Waller v Hider in commenting that the case was inappropriate for leave and in Hutt City Council v New Zealand Railways Corporation (CA 171/97, judgment 17 June 1998) we emphasised the limited nature of the second appeal.
[18] Leave to appeal was granted in only one of the cases mentioned above; that case, Cranson v New Zealand Trainers’ Association, involved an important point of law and the additional consideration that a judgment of this Court, relied on by the High Court in reversing the District Court, was itself under appeal to the Privy Council.
[19] Counsel applying for leave pursuant to s67 tend to rely on the principles stated in Cuff v Broadlands rather than this Court’s more recent statements in Waller v Hider. Counsel’s unwarranted optimism about their prospects of success perhaps reflects the lack of emphasis in McGechan on Procedure at J67.05 on the restricted approach identified in Waller v Hider.
[20] Our research has revealed only one case in the past ten years where a party has been granted leave by the Court of Appeal pursuant to s67 and then gone on to succeed. And in that case, Engineering Dynamics Ltd v Norgren Martonair(NZ) Ltd & Victor Hydraulics Ltd (CA105/96, judgment 29 October 1996) the Court commented that “legal costs and expenses have long since exceeded the sum claimed. ... The plaintiff’s gain, should it succeed, will be offset by legal costs and expenses and the defendants’ legal costs and expenses, should they succeed, will exceed the amount which they save in being exonerated from liability. ... Assuming that counsel and their clients were prepared to adopt a responsible, realistic and commercially tenable attitude, this dispute was [undoubtedly] capable of settlement.”
[21] Also of relevance to the limited role of a second appeal is the increase in jurisdiction of the District Court (for example the increase of the monetary limit on civil appeals to $200, 000 in 1991). This necessarily increases the appellate role of the High Court in hearing appeals pursuant to s71A of the District Courts Act 1947. It is the High Court, as the intermediate appellate court, that has primary responsibility for correcting error and ensuring the justice is done to the parties. Only if the case involves some wider public interest will the expense, both to the parties (in this case counsel estimated the legal costs of a further substantive hearing at up to $20,000) and to the court system, of a second appeal be justified. (As to the division of responsibilities between intermediate and final appellate courts see Meador, Rosenburg and Carrington, Appellate Courts: Structures, Functions, Processes and Personnel (1994) at 5. The Court of Appeal of New Zealand fulfils a hybrid role acting as both an intermediate and a final appellate court).
[22] To summarise, for leave to be granted pursuant to s67, the appeal must raise some question of law or fact capable of bona fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the cost, both to the court system and to the parties, and the delay involved in the further appeal. Upon a second appeal this Court is not engaged in the general correction of error. Its primary function is then to clarify the law and to determine whether it has been properly construed and applied by the Court below. It is not every alleged error of law that is of such importance, either generally or to the parties, as to justify further pursuit of litigation which has already been twice considered and ruled upon by a Court.

Conclusions in the present case

[23] Returning to proposed grounds of the present appeal, we first note that the issue of whether the May 1991 arrangements formed a concluded agreement is a question of construction, not raising any wider issues justifying consideration by means of a second appeal (see Churtonleigh Retirement Home Ltd & Ors v Renwick (CA109/99, judgment 20 September 1999)). Similarly, the question of whether there was material prejudice to the wife resulting from non-compliance with s21(6) is a matter of fact for assessment in the courts below and is not suitable for a second appeal. We therefore turn to consider whether the remaining ground of appeal – that the High Court was wrong to speak in terms of the value of the property to the parties – is an issue of law of general importance amenable to appeal pursuant to s67.
[24] Section 21(10) of the Matrimonial Property Act 1976 provides:

(10) In deciding whether it would be unjust to give effect to an agreement under this section the Court shall have regard to:

(a) The provisions of the agreement:

(b) The time that has elapsed since the agreement was entered into:

(c) Whether the agreement was unfair or unreasonable in the light of all the circumstances at the time it was entered into:

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

(e) Any other matters that the Court considers relevant.

[25] As Goddard and Durie JJ noted, the section does not require the value of the assets distributed to each party to be calculated according to their book values; rather the section allows for broad judicial discretion in determining whether the agreement is unjust. Although the concept of reasonableness in s21(10)(c) involves a comparison between the benefits to each party under a challenged agreement and the likely benefits of an award under the Act (see Fisher on Matrimonial Property at 5.82) there is no requirement that the Court confine itself to book values in answering the broader question of whether the settlement was unjust. That would be an incorrect approach. A fair division between husband and wife will ordinarily require consideration of current (usually market) values. And where it is a question of the reasonableness of the agreement regard may be had to their assessment of what particular assets were worth to them. The balancing exercise is a matter of discretion and the High Court’s decision to have regard to the value of the agreement to the parties in combination with other factors (such as delay) is not a decision that is properly subject to challenge on a second appeal.
[26] Leave to appeal is declined. The respondent husband is entitled to costs on the application which are fixed at $2,000 plus any reasonable disbursements as fixed, if necessary, by the Registrar.

Solicitors
Gillespie Young Watson, Lower Hutt, for applicant
Sainsbury Logan & Williams, Napier, for respondent