Shannon v Shannon [2000] NZCA 402; [2001] NZFLR 230 (19 December 2000)

Last Updated: 7 December 2011

IN THE COURT OF APPEAL OF NEW ZEALAND

CA118/00

	BETWEEN	ALAN LINDSAY SHANNON
		Appellant
	AND	CHRISTINE ROBYN SHANNON
		Respondent

Hearing:	21 November 2000
Coram:	McGrath J
	Doogue J
	Young J
Appearances:	P G Mabey QC for appellant
	G M Cameron for respondent
Judgment:	19 December 2000

JUDGMENT OF THE COURT DELIVERED BY YOUNG J

Introduction

[1] This is an appeal by Alan Lindsay Shannon against a judgment delivered by Cartwright J in which she resolved against him, and in favour of the respondent, Christine Robyn Shannon, a preliminary issue which had been directed to be tried in matrimonial property proceedings between them.
[2] The preliminary issue, as framed, was:-

Did the parties to this action cease to live together as husband and wife in June/July 1985 (as the defendant husband asserts) or at Easter 1997 (as the plaintiff wife asserts)?

[3] Between 1993 and 1997 Mr Shannon accumulated significant assets. Mrs Shannon says that these assets are matrimonial property because they were accumulated while she and Mr Shannon were living together. Mr Shannon asserts that they are his separate property because they reflect income which he generated or were otherwise acquired after the parties ceased to live together as husband and wife. The relevant provisions of the Matrimonial Property Act 1976 are ss 2(3), 8 (e) and 9 (4).

The primary contentions of the parties

[4] Mr and Mrs Shannon were married on 22 June 1974. They have one child, Grant Mervyn Shannon, who was born on 14 June 1977. It is common ground that there was an initial separation in the mid-1980s. Mr Shannon claims that the separation occurred in 1985 while Mrs Shannon asserted it was in 1986. The judge clearly preferred the evidence of Mrs Shannon on this point. Whether the separation was in 1985 or 1986 is, however, of no particular moment as the judge recognised.
[5] Mrs Shannon contends that the separation lasted until the winter of 1988 and that there was then a reconciliation between her and Mr Shannon. She accepts that Mr Shannon spent comparatively little time with her but says that this was a function not of separation in the marital sense but, rather, of the exigencies of his work which carried him all over New Zealand and, from 1991, overseas. She says, however, that within the constraints of this itinerant lifestyle, Mr Shannon did continue the marriage with her, initially spending time with her in the Feilding area, in which she was living in the latter part of 1988 and the early part of 1989 and then at Tauranga where she and her sister (and her sister’s husband) began operating a motor camp in 1989. This was at Plummers Point.
[6] Mr Shannon denied that there was any reconciliation. He said that he and his wife have lived constantly separate and apart since the initial separation (which he said was in 1985 but which it was open to the Judge to accept was in 1986) down until the present. Moreover, he says that between 1988 and 1993 he was in a stable de facto relationship with another woman, Donna Hamilton, with whom he lived in Auckland. He claimed that up until around 1993 he had very limited contact with Mrs Shannon.
[7] It is common ground that there was significant contact between Mr and Mrs Shannon between 1993 and March 1997. It is also common ground that the association between Mr and Mrs Shannon ended in acrimony at Easter 1997. Relevantly, for present purposes, Mr Shannon’s financial affairs took a turn for the better during this period. This was as a result of his involvement with an American company which was involved in helicopter contracting work in Malaysia. In 1996 he sold out of that company for $US4.5 million. Quite apart from the $US4.5 million he received on the sale of his shares in the company, he had a substantial income between 1993 and 1996. Beginning in 1995 he began to acquire significant assets in New Zealand. These included apartments in a Mt Maunganui building, a deer farm at Taupo and an expensive motor vehicle.
[8] Mr and Mrs Shannon interpret the events of 1993-1997 very differently.
[9] Mrs Shannon says that this was simply a continuation of their married life with Mr Shannon, as his financial position came right, sharing his new found wealth with his family, paying for expensive overseas holidays which they all enjoyed and then establishing domestic and business bases in this country.
[10] Mr Shannon says that, as his financial position improved and he took an increased interest in (and share of the responsibility for) Grant’s education and upbringing, he necessarily had more contact with Mrs Shannon and that for reasons associated with his desire to build a relationship with Grant, he had holidays with Mrs Shannon. Further, he says that on the acquisition of New Zealand assets and, in particular, the Mt Maunganui apartments and the deer farm, Mrs Shannon was acting as his agent. He maintains that there never was a reconciliation either in 1988 or, indeed, between 1993 and 1997.

The evidence adduced in the High Court

[11] The trial before Cartwright J took nine days. Many witnesses were called to give evidence and a large amount of documentary evidence was produced.
[12] The two principal witnesses were, of course, Mrs Shannon, on the one hand, and Mr Shannon, on the other. A third very important witness was Grant.
[13] Grant’s position warrants sympathy. From the time he was about nine until he was around sixteen, Mrs Shannon had primary responsibility for his care and upbringing. The occasions on which he saw his father were comparatively limited; this on any view of the evidence. From 1993 on, his father took an increasingly active role in his life. His father was instrumental in him learning to fly helicopters and later fixed-wing aircraft. By the mid 1990s his father was a seriously wealthy man who was extraordinarily generous to Grant. Grant spent a good deal of time with his father and he was closely involved with his father’s business interests in Malaysia and America.
[14] Grant swore three affidavits in the proceedings. The first of these affidavits could be said, broadly, to support the position adopted by his father. The second affidavit could be said, broadly, to support the position adopted by his mother. The differences between the first and second affidavits, however, are very much matters of nuance and emphasis and these affidavits can sit reasonably comfortably side by side. Grant then swore a third affidavit in which he rejected his second affidavit. In his third affidavit he claimed that he had, in effect, been forced by his mother to swear the second affidavit and that the words in that affidavit were hers and not his.
[15] Grant and his father were estranged as at the date of trial. There were perhaps a number of reasons for this but they included what Grant had said in his second affidavit.
[16] When Grant turned up to give evidence neither party knew exactly what he was going to say. As it turned out, his evidence involved a rejection of his third affidavit (which he claimed he had been forced to sign by his father under threat of prosecution for perjury in relation to the second affidavit). Further, his oral evidence, as a whole, broadly supported the position of his mother.
[17] As well as the evidence of Mr and Mrs Shannon and Grant Shannon, Cartwright J also heard many other witnesses.
[18] Mrs Shannon’s witnesses corroborated her account of events. They spoke of frequent contact between Mr and Mrs Shannon in the latter part of 1988 and the early part of 1989 including a shared holiday at Cooks Beach over the summer of 1988/1989. So this was consistent with her evidence of there having been a reconciliation. They also spoke of active participation by Mr Shannon in the negotiation and eventual purchase of the motor camp at Plummers Point. On any view of it, Mrs Shannon’s financial contribution to this purchase was funded from matrimonial property. As well, Mr Shannon, himself, contributed some of the finance which was required for the purchase. He was also involved in physical work on the grounds. On Mrs Shannon’s case all of this was not consistent with Mr and Mrs Shannon then being separated. There was also evidence of visits by Mr Shannon to the motor camp when Mrs Shannon was there and to Mr and Mrs Shannon acting as a married couple when these visits occurred – including sharing the same sleeping arrangements.
[19] From 1993 or 1994 through to Easter 1997 (which is when Mrs Shannon said that the marriage broke up) there was evidence of much contact, evidence which was consistent with Mrs Shannon’s contention that the marriage was still in place. This involved frequent telephone contact (evidenced by telephone records), expensive holidays together, gifts and then the very substantial outlays of cash by Mr Shannon on the apartments at Mt Maunganui (title to which was eventually taken in the name of Mrs Shannon) and the Taupo deer farm. Mrs Shannon was closely associated in the implementation of these purchases. Other people involved in these transactions gave evidence of seeing her participation as being consistent with her being the wife of Mr Shannon. Further, there was evidence suggesting that Mr and Mrs Shannon lived together in the Mt Maunganui apartment.
[20] Mr Shannon was able to call an equally significant number of witnesses whose evidence was in stark contrast to that of Mrs Shannon and her witnesses. This evidence pointed to a marriage which broke down in the mid 1980s and was never resurrected.
[21] According to Mr Shannon’s witnesses, Mrs Shannon acted throughout as a separated woman, saying as much to some of the witnesses and speaking in generally disparaging terms of Mr Shannon. There was a good deal of evidence as to Mr Shannon’s relationship with Donna Hamilton which was said to have been conducted openly and in a way which was practically inconsistent with his marriage to Mrs Shannon continuing in any real sense. Further, there was evidence which challenged Mrs Shannon’s contention that she had lived in the newly acquired apartment at Mt Maunganui. On this point, Mr Shannon’s case (which was supported by evidence of others) was that she was merely an occasional visitor to the apartment.
[22] Each side could also point to documentary evidence.
[23] Mrs Shannon was able to produce a driver’s licence which was issued to Mr Shannon which gave his address as Kimbolton Road, Feilding. On Mr Shannon’s evidence he never lived at the Kimbolton Road, Feilding address (where Mrs Shannon was undoubtedly living in the latter part of 1988). He explained this address as probably resulting from an error on the part of his secretary who, for some reason, when filling in a form required for his new driver’s licence, provided his son’s address rather than the address in Auckland at which he was then living (which, on his evidence, was a motel in Papakura). Mrs Shannon could also point to a number of documents signed by Mr Shannon in which he gave his address as being the Plummers Point Motor Camp, Tauranga. As well, in 1992 Mrs Shannon’s sister was involved in preparing a company profile for Mr Shannon’s Malaysian venture. In the drafts which passed between New Zealand and Malaysia he was described as being “married”. His explanation of this was that he never saw these drafts.
[24] Mr Shannon could also point to some documentary evidence which supported his position. In 1992 Mrs Shannon obtained a community services card by representing to WINZ that she was separated, a statement which Mrs Shannon had to acknowledge in cross-examination was a lie but which she claimed she had made at Mr Shannon’s insistence. When she enrolled Grant for boarding school in 1989, she gave Mr Shannon’s address as being Malaysia. This was at a time when he was, in fact, living in Auckland and was, therefore, consistent with Mrs Shannon not then knowing where Mr Shannon lived at the time. She claimed that this was just a mistake but it was certainly an odd mistake to make. Further, there was at least one set of documents which was produced in which Mr Shannon gave his address at the house in which Donna Hamilton lived.
[25] So the documentary evidence able to be adduced on each side was, therefore, far from decisive.
[26] Finally, we note that each side led evidence which, in some respects relevant to the case, was not the subject of cross-examination. Presumably this was a result of oversight or litigation fatigue. Mr Mabey QC for Mr Shannon in his submissions to us made a good deal of Mr Cameron’s failure to cross-examine two witnesses whose evidence, on the face of it, was seriously adverse to Mrs Shannon. Mr Mabey was then met by the et tu quoque argument from Mr Cameron that significant evidence, very adverse to Mr Shannon, was not, itself, the subject of cross-examination by Mr Mabey.

The judgment of Cartwright J

[27] With that background in mind we turn to the judgment of Cartwright J.
[28] She commenced by holding that the initial separation was in 1986 and not 1985, a view clearly open to her. We accept that this particular finding was not “critical to the determination of the primary issue”.
[29] Broadly speaking she accepted the evidence of the plaintiff and her witnesses. In part this reflected simply a credibility preference but there were other circumstantial details to which she referred. For instance, she noted that the telephone records of numerous calls in the years down to Easter 1997 could not all be explained away by Mr Shannon’s wish to contact and speak to his son. There were gifts given to Mrs Shannon by Mr Shannon. His initial partial explanation (that she wished to make purchases for herself and her credit card limit had expired) was not consistent with her credit card records which showed an unexpired credit limit at the material time. Cartwright J was heavily impressed by Mrs Shannon’s role in the acquisition of significant assets in New Zealand involving the purchase of the apartments at Mt Maunganui and the deer farm at Taupo. She noted that Mrs Shannon was closely involved in the selection of an expensive motor vehicle during this time. In relation to all of this, Mrs Shannon was handling banking arrangements in New Zealand through which funds were remitted by Mr Shannon from overseas for the purpose of these transactions. Cartwright J was also impressed by the evidence of Mr Bill Shaw who had a long involvement with Mr Shannon and was well aware of his relationship with Donna Hamilton (and other women) but who regarded Mr and Mrs Shannon as having a “functional if somewhat unconventional marriage”. In accepting his evidence, Cartwright J recognised, but discounted, motives which Mr Shaw might have had to favour Mrs Shannon. Further, she preferred the evidence of the plaintiff and her witnesses as to what had happened in late 1996 and early 1997, in particular, as to whether Mrs Shannon was residing with Mr Shannon at the Mt Maunganui apartments. In this respect, Mrs Shannon’s evidence was supported by that of Grant.
[30] Cartwright J then addressed the significance of Mr Shannon’s relationship with Donna Hamilton which commenced in 1988. Cartwright J was of the view that Mr Shannon did set up a home with Donna Hamilton in Auckland and that he spent many weekends with her there between 1989 and 1991. This was consistent with Donna Hamilton’s evidence which was that she and Mr Shannon had lived together for two years and had had a relationship for another three years. The judge, however, took the view that Mr Shannon had concealed his relationship with Donna Hamilton from Mrs Shannon and, likewise, he had, in substance, concealed from Donna Hamilton his continuing relationship with his wife. As to this she referred to some very limited contact between Donna Hamilton and Grant (with Grant saying in evidence that he had been under the impression that Donna Hamilton was his father’s secretary) and the fact that Grant had never stayed with his father and Donna when he visited Auckland. This conclusion was consistent with the evidence of Grant and, indeed, Mr Shannon as analysed in argument before us by Mr Cameron.
[31] The judge, therefore, concluded that Mr Shannon did not abandon his marriage to the plaintiff during his relationship with Donna Hamilton. She noted:-

Although his commitment to [the marriage] was undoubtedly much weaker than previously, nonetheless it survived this extra curricular relationship.

[32] Cartwright J was of the view that Mr Shannon’s explanations of the holidays which he shared with Mrs Shannon after his relationship with Donna Hamilton had ended were not consistent with the facts. On the other hand, Mrs Shannon’s evidence was supported by one independent witness, Mark Mayston, who was a friend of Grant.
[33] Cartwright J plainly rejected Mr Shannon’s explanation of the acquisition of the Mt Maunganui apartments, the motor vehicle and the Taupo deer farm in respect of all of which Mrs Shannon had played significant roles.
[34] Cartwright J then turned to the evidence of Grant. She set out the unhappy history of the affidavits to which we have referred. She was critical of Mr Shannon’s role in all of this. In the end, she accepted Grant, in his oral evidence, as a witness of truth.
[35] The judge then came to her final conclusions:-

[47] I have touched on general issues surrounding credibility but wish now to return to summarise my findings in relation to the principal witnesses. I am satisfied first, that although the plaintiff may well have exaggerated the closeness of her relationship with the defendant, nonetheless it was an ongoing marriage relationship from the time of reconciliation in 1988. I am satisfied from her evidence that she has described a picture of a marriage in which although of necessity there were frequent and lengthy physical separations, nonetheless particularly from the early 1990s there was an intensifying contact and regular discussions concerning all of their joint affairs whether they be business or personal. Basically I accept that the plaintiff was truthful in her evidence even if it is hard to believe that she did not suspect the defendant of having affairs or relationships with other women from time to time during the course of their marriage. That of itself, of course, does not necessarily imply the end to a marriage relationship. History is littered with examples to the contrary.

[48] The defendant’s evidence by contrast revised the history of the marriage relationship fundamentally. I do not accept that the regular periods of physical and telephone or fax contacts were all to keep in touch with Grant or, when they involved the plaintiff, purely in Grant’s interests. Nor am I satisfied that his relationship with Donna Hamilton supplanted his marriage with the plaintiff. I accept Bill Shaw’s assessment that this was a convenient arrangement for the defendant who lived in Donna Hamilton’s home and largely at her expense while continuing to keep in close contact, unbeknown to her, with the plaintiff. It is consistent with the defendant’s deceitfulness over his relationship with Donna Hamilton that Grant was completely oblivious of its nature. Although he met Donna Hamilton he never stayed in her home with the defendant and assumed that she was someone who worked for his father. Moreover, there is evidence that the defendant had other relationships some of which may even have overlapped with that with Donna Hamilton. It is clear that this was a man who wanted his marriage to continue but engaged in extra-marital affairs while being assiduous to keep this information from his wife. The friends who observed particularly the relationship with Donna Hamilton, clearly saw what he intended them to: namely that they were partners and his marriage was over. By the same token those who saw him with the plaintiff believed what they saw: namely that this was a marriage in all senses. And if the defendant engaged in relationships with other women from time to time this was not at the expense of his marriage with the plaintiff.

[49] Grant’s evidence I have already touched on. I was impressed with his honesty. He neither exaggerated and nor was he evasive. He is a young man of intelligence who in spite of a promise from his father to the contrary has been drawn into a dispute which has been very destructive for him emotionally and financially. It is clear that finding himself caught between his parents he came to a decision finally to tell the truth as he saw it, regardless of the consequences for him. As with all children caught in this situation, he has only his parents to blame for what has occurred and undoubtedly it will affect his relationship with each of them in the future.

Summary

[50] In summary then I accept the plaintiff’s evidence and in particular that of Grant Shannon. I find that there was a reconciliation between the parties in 1988 and that the marriage subsisted until a final parting of the ways at Easter of 1997. The parties therefore began to live apart for the purposes of the matrimonial property proceedings from Easter of 1997.

Argument for the appellant on appeal

[36] The issue for Cartwright J was entirely one of fact. It is not suggested that Cartwright J made any error of law. So the appeal was not an easy one for Mr Mabey QC to argue for Mr Shannon.
[37] Mr Mabey argued the case by reference to three general complaints:-

1. An alleged inconsistency between the judge’s conclusions and the reality of the relationship with Donna Hamilton.
2. The significance that the judge’s impressions of Grant played in her decision.
3. The judge’s focus on the evidence of the primary witnesses.

[38] We turn to discuss each of those heads.

Inconsistency between the judge’s conclusions and the reality of the relationship with Donna Hamilton

[39] Mr Mabey sought to argue that the relationship between Donna Hamilton and Mr Shannon was such as to be entirely inconsistent with a continuation between 1988 and 1993 of the marriage relationship between Mr and Mrs Shannon. We accept that there were very substantial and weighty arguments which Mr Shannon could deploy relating to this relationship – arguments which required careful consideration in the High Court.
[40] Mr Mabey stressed that Cartwright J had accepted the evidence of Donna Hamilton. On that evidence, her relationship with Mr Shannon commenced about the same time as the alleged reconciliation between Mr and Mrs Shannon. Further, given Mr Shannon’s itinerant habits (associated with his employment) and Ms Hamilton’s evidence that he spent ninety percent of the weekends with her in Auckland between 1989 and 1991, there was not much time left for him to sustain a matrimonial relationship with Mrs Shannon.
[41] All of that is true. But Mrs Shannon was not claiming that she and Mr Shannon were together for substantial periods of time during the period 1988-1991. So it is not as though Donna Hamilton’s evidence is inconsistent with that of Mrs Shannon. Further, there is Mr Shannon’s driver’s licence with the Kimbolton Road, Feilding address. As well, although Mr Shannon was able to produce one set of documents on which his address is the property in which Donna Hamilton lived, Mrs Shannon has been able to produce a number of documents, referable to the same period, in which he has given his address as care of the Plummers Point Motor Camp.
[42] Mr Mabey was not able to point to any misapprehension by the judge of the nature of Donna Hamilton’s evidence (which the judge seems to have analysed accurately).

The significance that the judge’s impressions of Grant played in her decision

[43] Mr Mabey was concerned as to the impact Grant had had on the case; this for two reasons. The first was that the judge accepted Grant as a witness of truth despite the zigzag course he pursued in his three affidavits and his oral evidence. The second was that the judge was plainly unimpressed by Mr Shannon’s behaviour over all of this. She saw him as having pressured Grant, unfairly, in terms of what he should say and, further, that when Grant supported his mother this was, at least, a contributing factor in a complete estrangement between him and Mr Shannon.
[44] Mr Mabey claimed that the finding of the judge that Mr Shannon had pressured Grant into the swearing of the third affidavit was unfair in the circumstances, particularly given that Grant was living at the time in the Yukon and his father was in New Zealand and the terms of the affidavit were settled with Mr Shannon’s legal representatives. He also asserted that the threats attributed by Grant to his father as to all of this were implausible.
[45] We can understand the arguments. But the constraints of the appellate process are such that we are obliged to defer to the trial judge’s appreciation of the evidence based as it was, in this case, on a lengthy trial and a sustained opportunity to evaluate the evidence of Mr and Mrs Shannon and Grant. Her assessment of Grant and his evidence was very much associated with her assessment of Mr and Mrs Shannon and the personalities of all involved. We simply could not interfere with her findings of fact on these issues without usurping her role as the trial judge.

The trial judge’s focus on the evidence of the primary witnesses

[46] It will be recalled that when the judge came to summarise her findings she did so in relation to the “principal witnesses”. These were Mr and Mrs Shannon, Grant, Donna Hamilton and Bill Shaw.
[47] Mr Mabey noted that there was a good deal of evidence to which the judge did not refer either in her earlier survey of this case or when the judge came to summarise her findings in relation to the principal witnesses. For instance, she did not refer to the documentary evidence some of which was, at the very least, difficult for Mrs Shannon to explain in a way which was consistent with the broad thrust of her evidence. Likewise, she did not address some of the evidence adduced on behalf of Mr Shannon which was not subject to cross-examination and which again was broadly inconsistent with the thrust of Mrs Shannon’s evidence.
[48] As this argument was developed, Mr Mabey demonstrated (if demonstration was necessary) that the case which Mr Shannon had been able to advance at trial was formidable. Mr Mabey persuasively argued that it would have been better if the trial judge had referred to this evidence and explained why, in the end, she did not see it as decisive.
[49] On the other hand, as Mr Cameron took us through the evidence which supported Mrs Shannon, it became apparent to us that matching each argument which Mr Mabey had been able to deploy was an equally cogent and corresponding argument for Mrs Shannon.
[50] As we have noted, there was documentary evidence associated with Mr Shannon which was, at the very least, inconvenient from his point of view. As well, for every witness who Mr Cameron did not cross-examine but probably should have, there was a corresponding witness whose evidence was not challenged by Mr Mabey. Allowing for the eight days of evidence which the judge heard, she may perhaps have taken the view that the problem was not too little cross-examination but too much.
[51] Each side had a set of witnesses whose evidence, from the affidavits and the transcript of the oral evidence which we have read, seems to have been plausible. It was not a case where a counting of heads was likely to be helpful.
[52] In that context, we think it understandable that the judge, in the end, focused her discussion on her assessment of the stories told by the principal witnesses whom she identified and did this against the context of certain key and indisputable facts which she reviewed.
[53] In short, we see no error of approach in her judgment and we are certainly not persuaded that it was wrong.

Conclusion

[54] This was a case which, on our assessment of the evidence, could have been decided either way. That, however, is not a warrant for this court to allow the appeal. We can only interfere with findings of fact in limited circumstances. We are satisfied that this case is not one of those rare cases in which it would be proper for us to interfere with findings of fact made at trial. The decision reached may be unpalatable to the appellant but it was clearly one open to Cartwright J on the evidence before her.
[55] The result is that the appeal is dismissed.
[56] The respondent is awarded costs in the sum of $5,000 together with reasonable disbursements and travelling and accommodation expenses for counsel as may be fixed by the Registrar.

Solicitors
Sharp Tudhope, Tauranga for appellant
Bush & Forbes, Tauranga for respondent