[1] Mr and Mrs Moir have, for some time, been involved in protracted litigation under the Property (Relationships) Act 1976 (the Act), involving substantial assets.
[2] An appeal was made to the High Court in respect of three judgments delivered by Judge Somerville in the Family Court at Christchurch.
[3] Chisholm J delivered one judgment on those appeals, on 20 December 2006 (HC CHCH CIV 2003-409-2621, 2004-409-2653, 2006-409-964).
[4] The applicant was dissatisfied with certain aspects of that judgment. She applied for leave to appeal to this Court on two questions of law:

Does the payment of the purchase price of each of the Great North Road, Auckland and Manchester Street, Christchurch properties from the proceeds of a loan secured over the family home at Helmores Lane, Christchurch mean that those properties and the rents derived therefrom must be classified as relationship property?

Was it open to the High Court to apportion the bank account of Ross Spencer Moir in the way it did and to determine that only part of the account was relationship property, or was the whole account relationship property? If the whole of the account was relationship property and the High Court’s apportionment was wrong, what was the correct apportionment?

[5] By a judgment delivered on 1 March 2007, Chisholm J granted leave to appeal to this Court on those two questions.
[6] Under the rules of this Court, the applicant had 20 working days from the date when the High Court granted leave to appeal to file her appeal (r 29(b)(ii) of the Court of Appeal (Civil) Rules 2005). That period expired on 29 March 2007.
[7] The applicant’s solicitor did not file the appeal timeously. This was because the respondent had indicated that there would be a cross-appeal, and had, on 12 March 2007, filed a formal application in the High Court at Christchurch seeking orders:

Extending the time within which R S Moir can apply for leave to cross appeal to the Court of Appeal;

Granting R S Moir leave to cross appeal against the decision of this Court delivered on 20 December 2006 in respect of its finding at paragraph [186] that had it reached the conclusion that the properties at Manchester Street and Great North Road and the rentals therefrom were relationship property it would have not been prepared to disagree that section 13 of the Property (Relationships) Act 1976 applied but it would have altered the allocation of relationship property from 75:25 as determined by the Family Court to 60:40. R S Moir seeks leave to appeal the contingent finding that relationship property should, but for the exclusion of the said properties and rents, be divided 60:40 in favour of himself.

[8] The applicant’s counsel was waiting for that application to be determined before filing the requisite appeal documents in this Court. That was why, through inadvertence, the applicant came to be out of time. She now needs special leave.
[9] Very responsibly, Mr Vickerman did not seek to take advantage of the lateness of the filing for the purposes of whether or not leave was granted. Neither are we troubled by that feature of the present application.
[10] Further, if the application is otherwise properly granted, it would be entirely appropriate to grant leave for the respondent’s application to cross-appeal. The issues raised thereby would, as Mr Vickerman said, have been entirely consequential, and would have arisen only if the appeal itself had been successful.

Questions of law?

Introduction

[11] What has, however, engaged our concern is whether there are appealable questions of law which can properly be raised in this case.
[12] Notwithstanding that Chisholm J had granted leave to appeal, as Ms Mitchell responsibly accepted, and as this Court has made plain enough on a number of occasions, once a party gets out of time and has to obtain special leave, it is appropriate for this Court to itself ask whether, in its view, there are questions which ought properly to be allowed to be raised on an appeal.

Question number 1

[13] The first problem which Ms Mitchell seeks to raise relates to the classification of commercial properties at Great North Road, Auckland, and Manchester Street, Christchurch, owned by the respondent, as separate property or relationship property.
[14] In his decision of 20 December 2006 Chisholm J allowed Mr Moir’s appeal and held that the Great North Road and Manchester Street properties were the separate property of Mr Moir. The Judge held that a mortgage over the family home in Helmores Lane, Christchurch which had been used in the acquisition of these properties was not “the proceeds of any disposition of relationship property” in terms of s 8(1)(1) of the Act. The Judge held that Mrs Moir was therefore not entitled to relief on that account, but he held that she was entitled to an award of $20,000, under s 17 of the Act. This because the mortgaging of the Helmores Lane, Christchurch property was an “application of relationship property” which “played a part in sustaining the value of Great North Road and Manchester Street ” (at [126]).
[15] In the applicant’s view, because the Great North Road and Manchester Street properties were acquired in part out of loans secured against the family home in Helmores Lane, it necessarily followed that the correct classification of the two commercial properties was “relationship property”.
[16] Mr Moir’s position is that the loan which was utilised in respect of both properties was for very short periods of time in each case. It was only a matter of days, during which time little in the way of rents were received, and the loan was promptly repaid from separate property.
[17] Mr Vickerman suggested that the argument is nothing less than that one drop of water (in the form of a temporary loan) can “pollute” an otherwise unsullied pond, thereby transforming it into relationship property.
[18] Ms Mitchell invited us to say that Eaton v Eaton (1981) 1 NZFLR 27 (HC) created, in effect, a “rule” which should apply in all instances. Speight J in that case held that an additional block of land was matrimonial property because its purchase price was in part the proceeds of a disposition of the property (by way of mortgage) acquired by the husband after the marriage.
[19] That case is a far cry from the present case. There the parties separated in 1976 after 22 years of marriage. Most of the duration of the marriage had been spent in establishing a farm. After the parties separated the husband became the proprietor of another block of land and the existing farm property itself became the security for the purchase of this additional block of land.
[20] Here of course the applicant is not saying that the commercial properties themselves were relationship property, but rather that the rents from the two commercial properties and the proceeds of the mortgage of the family home were relationship property on the dates when they were respectively paid into a Westpac bank account.
[21] The application proceeds on an assumption that a hard and fast rule can be, and should be, laid down as to when something is relationship property or separate property, in the sort of circumstances which have arisen in this case. In our view, the resolution of this issue in this case must depend on the facts. It is, at best for the applicant, a mixed question of fact and law. It is not the kind of question which is appropriate for a second appeal on a point of law only. The issue raised is not of general importance, insofar as it relates to the application of an undoubted distinction (already drawn by the law) to the facts of this particular case.

Question number 2

[22] The problem as to the character of mingled bank monies was helpfully dealt with by Tipping J in Allan v Allan (1990) 7 FRNZ 102 (HC). As the Judge there noted, a single bank account as a vehicle for transactions involving both matrimonial and separate property “is apt to cause problems” (at 107). The Judge continued (at 107 – 108): “Whether that intermingling results in it being unreasonable or impracticable to regard a separate property deposit into the bank account as remaining separate property will be a matter of fact and degree”. And further, at 108, the Judge said:

If money which have a separate property source come into a bank account and then go out again, either to acquire an asset or to make a substitute investment in such a way and within such a timeframe that it is practicable and reasonable to regard the substitute asset or investment as retaining the character of separate property, then that should be the classification but not otherwise.

We entirely agree with those observations.

[23] It was open to the Judge in this case to reach the determination he did. There cannot be hard and fast rules as to the allocation of funds in a mixed account. This question too does not raise a question of law of a character which is appropriate for determination in this Court on a second appeal.

Conclusion

[24] The application for special leave is accordingly dismissed. Had there been properly appealable questions of law, we would have been minded to grant leave. The solicitor’s inadvertence was excusable and a harmless error. However, the questions sought to be advanced do not raise requisite questions of law.
[25] In the particular circumstances there will be no order for costs in this Court. Costs will lie where they fall.

Solicitors:
Cuningham Taylor, Christchurch for Applicant
Sandi Anderson, Auckland for Respondent

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