Herbst v Herbst [2014] NZCA 430 (2 September 2014)

Last Updated: 12 September 2014

IN THE COURT OF APPEAL OF NEW ZEALAND
CA305/2014 [2014] NZCA 430
BETWEEN	SAREL COENRAAD PETRUS HERBST AND PHILLIPUS MARTHINUS HERBST First Applicants HERBST FAMILY COMPANY LIMITED Second Applicant SAREL COENRAAD PETRUS HERBST Third Applicant
AND	ANTOINETTE CAROLINE HERBST Respondent

Hearing:	25 August 2014
Court:	O’Regan P, Ellen France and Miller JJ
Counsel:	R C Knight and T A Chubb for Applicants J H Hunter for Respondentr
Judgment:	2 September 2014 at 12.30 pm

JUDGMENT OF THE COURT

1. The application for leave to appeal is dismissed.
2. The applicants must pay the respondent costs on a band A basis together with usual disbursements.

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REASONS OF THE COURT

(Given by Miller J)

Introduction

[1] The applicants seek leave to appeal from a judgment of Brown J on appeal from the Family Court in relationship property proceedings.
[2] The question is whether the respondent Antoinette Herbst, the former wife of the third applicant Sarel Herbst, enjoys an entitlement to the former marital home at Torbay, Auckland. Mr Herbst claims that she does not, because a prenuptial agreement signed in South Africa in 1999 provided that there would be no community of property between them, and because the home is owned by a trust of which Mrs Herbst is not a beneficiary.
[3] The couple emigrated to New Zealand in 2000. They bought a home at Gulf Harbour. On settlement the home was registered in Mr Herbst’s name only. He subsequently transferred the home to the trust and still later a mortgage was granted to Mr Herbst’s sons to secure advances they had allegedly made to their father. The Trust sold the Gulf Harbour property and bought several other homes in succession, the last of which was the Torbay home. That was acquired in 2004. The couple separated in 2010.
[4] In the Family Court Judge McHardy found on the facts that the South African prenuptial agreement did not follow the parties to New Zealand; once here they agreed to apply the New Zealand relationship property regime, which brought the South African agreement to an end.^[1] The Judge also found that the trust was set up for the purpose of defeating Mrs Herbst’s claim to the property, so that s 44 of the Property (Relationships) Act 1976 applied, and the mortgage was a sham created for the same purpose; in particular, no advances were actually made.
[5] Brown J upheld these findings on appeal.^[2] He refused leave by reference to the settled criteria in Waller v Hider,^[3] observing that the applicants really seek to challenge the Family Court’s findings of fact and characterising the proposed questions of law as academic in light of those findings.^[4]
[6] The applicants identify the following questions which they say warrant a second appeal:

(a) whether the South African agreement was enforceable under s 7A of the Property (Relationships) Act;

(b) whether s 44 applies; in particular, whether both Judges below erred by equating the effect of a disposition to the Trust with its purpose, contrary to the approach required under Regal Castings Ltd v Lightbody^[5]; and

(c) whether the interests of the mortgagees, Mr Herbst’s sons, have been overlooked.

They say that Brown J failed to consider the merits of the case afresh and come to his own conclusions on the evidence, and they appeal to the interests of justice.

[7] We do not accept that Brown J failed to consider the merits afresh. He found, for example, that the funds used to acquire the Gulf Harbour property were relationship property. He examined the Family Court Judge’s credibility findings and reasoning, referring to circumstantial or contemporaneous documentary evidence. He did not defer to the Family Court Judge’s robust and carefully reasoned findings of fact to a greater extent than is appropriate. For example, he was satisfied that there was ample evidence on which the Judge could conclude that the mortgage was a sham.^[6] Mr Knight sought to persuade us otherwise, but the exercise merely confirmed that the findings below are well founded in the evidence, which points to there never having been any advances by the sons and the mortgage being registered as a device.
[8] The argument with respect to the South African agreement is academic on these facts. So too is the s 44 argument; it is clear that both Judges below found that the trust was in fact established to defeat the wife’s claim.
[9] Having regard to these conclusions, we agree with Ms Hunter, for the respondent, that no purpose would be served by a second appeal.
[10] The application is dismissed. The applicants must pay the respondent costs on a band A basis together with usual disbursements.

Solicitors:
Quay Law, Auckland for Applicants
North Harbour Law, Auckland for Respondent

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^[1] Herbst v Herbst [2013] NZFC 4862.

^[2] Herbst v Herbst [2013] NZHC 3535, [2014] NZFLR 460.

^[3] Waller v Hider [1997] NZCA 221; [1998] 1 NZLR 412 (CA) at 413.

^[4] Herbst v Herbst [2014] NZHC 967 at [13].

^[5] Regal Castings Ltd v Lightbody [2008] NZSC 87, [2009] 2 NZLR 433.

^[6] At [80].