Martin v Martin [2016] NZCA 225 (25 May 2016)

Last Updated: 3 June 2016

IN THE COURT OF APPEAL OF NEW ZEALAND
CA74/2016 [2016] NZCA 225
BETWEEN	LESLIE PERCY MARTIN Applicant
AND	JOY ROBERTA MARTIN Respondent

Hearing:	16 May 2016
Court:	Randerson, Miller and Winkelmann JJ
Counsel:	M S McKechnie for Applicant T Sutcliffe for Respondent
Judgment:	25 May 2016 at 11:30 am

JUDGMENT OF THE COURT

1. The application for leave to appeal is declined.
2. The applicant must pay to the respondent costs for a standard application for leave to appeal and usual disbursements.

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REASONS OF THE COURT

(Given by Randerson J)

Introduction

[1] The parties to this application for leave to appeal began living together in 1991, married in 1992, and separated in 2010. Throughout their relationship of nearly 20 years, they lived on a farm at Whakamaru which Mr Martin had previously farmed in partnership with his former wife. In late 1991, the respondent Mrs Martin sold a house she owned and made available $183,504 from the proceeds so that the applicant Mr Martin could acquire his former wife’s half interest in the farm.
[2] In proceedings before the Family Court, Mrs Martin claimed that the money she made available was a contribution to the relationship and that the farm (now worth in the vicinity of $2 million) was relationship property under s 8(1)(e) of the Property (Relationships) Act 1976 (the PRA). Alternatively, Mrs Martin maintained that the farm was relationship property because it was acquired for the common use or benefit of the parties out of property owned by either or both of them before the marriage began in terms of s 8(1)(ee) of the PRA.
[3] Mr Martin’s position was the money was a loan which he repaid to Mrs Martin at her request when there were difficulties in the marriage in 1999/2000. As such, Mr Martin maintained that the farm was separate property.
[4] Other properties, of much lower value than the farm, were also at issue, as we mention below.
[5] In the Family Court, Judge Munro held that the money provided by Mrs Martin was a loan that had been substantially repaid so that the entire farm (other than the homestead) was separate property.^[1] Addressing s 8(1)(ee), Judge Munro accepted Mrs Martin’s funds were contributed to enable the purchase of a half share in the farm for their common use and benefit. On that basis, Judge Munro found that, but for the loan, s 8(1)(ee) would apply, at least to the half share acquired with Mrs Martin’s funds. However, because those funds had later been repaid, Judge Munro found that s 8(1)(ee) did not apply.
[6] Judge Munro did not make any specific finding about the application of s 8(1)(e) to the farm.
[7] Mrs Martin appealed to the High Court. Courtney J found:^[2]

• (a) On the facts, the Family Court had erred in finding that the funds Mrs Martin provided were a loan. She found that, on the totality of the evidence, Mrs Martin offered her money without any conditions attached and that Mr Martin accepted the funds on this basis. It followed that the money was to be viewed as a contribution to the relationship and the farm had not been acquired out of separate property for the purposes of s 9(2) of the PRA. Accordingly, the farm was relationship property because it was acquired after the relationship between the parties began for the purposes of s 8(1)(e).
• (b) The farm was also to be treated as relationship property under s 8(1)(ee) because it had been acquired for the common use and benefit of the parties as the Family Court had found. The evidence was that the farm was run jointly, with both parties working on it and living from the income it produced. Courtney J found that this fact would have been sufficient for the farm to have been classified as relationship property under s 8(1)(ee) even if it had been acquired from Mr Martin’s separate property.
• (c) Analysing the term of orders made in the Family Court between Mr Martin and his former wife, Courtney J found that Mr Martin and his former wife, as joint tenants, were to sell the farm with Mr Martin having the right to purchase it. In doing so, with the assistance of the respondent Mrs Martin’s funds, Mr Martin acquired the whole of the farm from the farming partnership between Mr Martin and his former wife.

[8] Mr Martin’s application for leave to appeal to this Court was refused by Courtney J on 12 February 2016.^[3]

The application for leave

[9] Mr Martin now seeks the leave of this Court to bring a second appeal. The application is governed by s 67 of the Judicature Act 1908. The relevant principles are not in dispute. 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 a further appeal.^[4] As this Court stated in Waller v Hider, on a second appeal this Court is not engaged in the general correction of errors.^[5] Its primary function is to clarify the law and to determine whether it has been properly construed and applied by the courts below. Where the disputed matter is entirely or largely a question of fact, the task of an applicant for leave is harder. An issue of fact in the matter falling within the jurisdiction of an inferior court will seldom be of public importance.
[10] Mr McKechnie’s primary focus in his submissions in support of the application was to challenge the factual finding made in the High Court in respect of the funds made available by Mrs Martin at the commencement of the relationship of the parties. It was submitted that the factual finding made in the High Court was completely at variance with the finding in the Family Court; the High Court had failed to address the status of property acquired by Mrs Martin in her own name at Kawhia after Mr Martin had repaid her; and no allowance or adjustment was made on account of those monies.

Discussion

[11] We have reviewed the factual findings made in both the Family Court and the High Court. We accept that the courts below reached opposite conclusions on the status of the funds provided by Mrs Martin. But we are not persuaded that the findings made by Courtney J in the High Court were not reasonably open to her or that there is any appearance of error in that respect such as to warrant the grant of leave for a second appeal on an essentially factual issue. As Courtney J pointed out, the contemporaneous evidence at the time the funds were provided was scant and predominantly circumstantial. There was virtually no direct evidence as to what was said between the parties about the status of the funds. The only written record was Mr Martin’s unilateral inclusion in the farm accounts of an amount of money (which differed from the amount of the funds actually provided by Mrs Martin). This was described in the accounts as a loan.
[12] The High Court Judge relied in part on Mr Martin’s own evidence that Mrs Martin had provided the funds with no strings attached. The Judge considered that the critical piece of mutual conduct was Mrs Martin’s request in 1999 for repayment of the money when she was considering leaving the marriage. In her evidence, Mrs Martin did not describe her demand as being for repayment of any loan. She simply wanted back the funds she had provided. However, as the Judge said, Mrs Martin would unquestionably have had a claim to half of the homestead and chattels so her request was equally consistent with a request for payment of relationship property that was hers in any event. Mr McKechnie challenged the Judge’s reasoning on this point but we are not persuaded that Mrs Martin’s request for funds was consistent only with an acceptance that the funds provided nearly 20 years before were a loan or, even if it were, that it signified she was thereby accepting she had no further claim to a share in the farm upon which it was accepted she had worked hard and which had increased very substantially in value.
[13] Irrespective of the correct determination of the factual issue about the funds Mrs Martin provided, we are not persuaded that a second appeal has any reasonable prospects of success. There are concurrent findings in the Family Court and in the High Court that the farm was acquired for the parties’ common use or benefit after their relationship began. Mr McKechnie confirmed this is not in dispute. Courtney J was plainly right to find that the farm was acquired out of property owned by either of the parties or both of them before their relationship began. It follows that the farm was properly classified as relationship property under s 8(1)(ee). The same conclusion would follow from the application of s 8(1)(e) of the PRA on the footing that it was acquired by either of the parties after their relationship began.
[14] Mr McKechnie also mentioned the proceeds of sale of the Kawhia property. But it follows from our conclusion about the status of the farm that the High Court correctly determined that these proceeds were also relationship property since the funds provided by Mr Martin to enable Mrs Martin to acquire Kawhia were derived from the farm. Similarly with the status of another property Mrs Martin acquired at 34 Pokuru Road which the Family Court Judge had erroneously thought the parties had agreed was separate property. This was acquired in part from funds provided by Mr Martin that also derived from the farm. As such, it was correctly characterised in the High Court as relationship property.
[15] Finally, we mention another property Mrs Martin acquired at 36 Pokuru Road. Although Mr Sutcliffe acknowledged it was anomalous to do so, Mrs Martin had accepted it was Mr Martin’s separate property and, on the assumption that leave to appeal would be refused, this finding was not challenged.

Result

[16] For the reasons given, the application for leave to appeal is declined.
[17] The applicant must pay to the respondent costs for a standard application for leave to appeal and usual disbursements.

Solicitors:
H S Edward, Rotorua for Applicant
Gavin Boot Law, Hamilton for Respondent

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^[1] Martin v Martin [2014] NZFC 3492.

^[2] Martin v Martin [2015] NZHC 1823.

^[3] Martin v Martin HC Rotorua CIV 2014-463-123, 12 February 2016.

^[4] Snee v Snee [1999] NZCA 252; [2000] NZFLR 120, (1999) 13 PRNZ 609 (CA) and Waller v Hider [1997] NZCA 221; [1998] 1 NZLR 412 (CA).

^[5] Above n 4, at 413.