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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV 2009-404-000462 IN THE MATTER OF an appeal under the Property (Relationships) Act 1976 BETWEEN WPH Appellant AND ITP Respondent Hearing: 3 June 2009 Appearances: P K Cobcroft for Appellant A P Miller for Respondent Judgment: 10 June 2009 RESERVED JUDGMENT OF RANDERSON J This judgment was delivered by me on 10 June 2009 at 11.30 am, pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar Solicitors: Rennie Cox, PO Box 6647, Auckland Millers, PO Box 14-520, Panmure, Auckland Counsel: P K Cobcroft, PO Box 47-345, Ponsonby, Auckland WPH V ITP HC AK CIV 2009-404-000462 10 June 2009 Introduction [1] The appellant Mr H appeals against a judgment delivered by Judge B H S Neal in the Auckland Family Court on 16 December 2008 in proceedings under the Property (Relationships) Act 1976. [2] Judge Neal found that Mr H and the respondent Ms P were in a de facto relationship which commenced in October 1997 and ended on 27 February 2005. In making this finding, the Judge rejected Mr H's contention that the de facto relationship ended in January 2002 immediately before the legislation was amended with effect from 1 February 2002 to cover de facto relationships. The Judge found that the family home shared by the couple at 11 T Street was relationship property. The T Street property had been acquired by Mr H in 1990 and registered in his name. The Judge made no orders in respect of another property in Rotorua which was registered in the name of a family trust settled by Mr H. [3] In this appeal, the sole issue is whether the Judge was correct to find that the parties were in a de facto relationship within the meaning of the Act during the period from January 2002 until 27 February 2005. Mr H accepts there was a de facto relationship between himself and Ms P in the period prior to January 2002, during which time the parties had two children together who were born in August 1997 and September 2000 respectively. The Judge's findings [4] The Judge found that the parties met in May 1995, at which time Ms P had two children residing with her from a previous relationship. There was disputed evidence as to when the couple began living together. The Judge found that the evidence on this point lacked detail but was satisfied that the de facto relationship between the parties commenced in October 1997. It was on that date that Mr H accepted Ms P moved into his T Street property. It is common ground that the T Street property comprises a dwelling described as the main house at the front and a self-contained unit of two levels at the rear. Mr H designated the main house as 11A T Street and the rear unit as 11 T Street. The main house and the rear unit are joined by a passageway but the rear unit also has a separate outside entrance. There was disputed evidence about how readily access could be obtained between the main house and the unit. It is clear that at various times, the rear unit has been rented but both the main house and the rear unit have been used by the parties and their children from time to time. As well, to help with expenses, students were taken in as boarders in the main house. [5] Initially during the relationship, Ms P was in receipt of a domestic purposes benefit. However, on July 2001 she took up employment and her benefit ceased. Mr H had been operating an airport shuttle business and also seems to have been employed in other unspecified capacities. In January 2002, he was diagnosed with a brain tumour and was no longer able to operate the shuttle business or to undertake employment. He says that, in consequence, he moved into the rear unit alone and commenced receiving a sickness benefit on a single person basis. He maintained that there were difficulties in the relationship with Ms P at that stage and he asked her to sign an agreement contracting out of the provisions of the Act. He also says that Ms P consulted a lawyer in December 2001 and again in January 2002. [6] Mr H's account is best described in his own words from an affidavit he swore on 26 September 2007: In January 2002 I asked the applicant to enter into a contracting out agreement so that I could ensure that the property at T Street remained my separate property for the benefit of my adult children as well as my children with the applicant. The applicant refused. At about the same time I found a draft affidavit relating to property proceedings in the Family Court ("D"). This had been completed by the applicant in pen. This was the final show for me and I knew our relationship as a couple was over. In early January 2002 after receiving medical advice that I had a brain tumour that needed to be removed I decided that the only way that I could keep the property at T Street separate was to ensure that the applicant and I did not live in the property together. I went onto the single person's sickness benefit at this time. I said to the applicant that the only way that we could parent our children together would be if I moved into the rear unit. T Street is divided into two units and we were each separately responsible for our own finances. The applicant agreed and she began to live on her own with the children at 11A T Street. I paid the mortgage, rates and insurance in respect of both properties. The result was that the applicant, from January 2002 lived at 11A T Street while I lived at 11 T Street, .... I attach marked "E" bundle of five letters confirming the applicant's address as 11A T Street. [7] Effectively, Mr H's contention was that, although the parties continued to live under the same roof, they were living in separate households, maintained separate finances, their sexual relationship had ceased and their relationship was limited to their role as co-parents in respect of the children. [8] Ms P strongly disputed Mr H's account. She accepted there were difficulties in the relationship from time to time but maintained they remained together as a couple in a de facto relationship during the relevant period. There were times when, for short periods of two or three days, Mr H would "lock himself away" in the rear unit but generally they shared the double bed in the upper level of the rear unit. She accepted she had seen a lawyer in December 2001 out of concern about alleged abuse by Mr H towards herself and the children but denied seeing a lawyer in January 2002. She also accepted that a draft affidavit for relationship property purposes had been prepared around this time but was not pursued. Ms P maintained that the sexual relationship between the parties continued right through until their ultimate parting some years after 2002. She denied Mr H had moved on any permanent basis into the rear unit. She says she took time off work in 2002 to care for Mr H. [9] It is not in dispute that Ms P operated the shuttle business with effect from January 2002 onwards. She did so on a part-time basis while also undertaking other employment. Mr H accepted that this business had been set up by Ms P and himself although, curiously, Ms P denies that and says it was Mr H's business. It appears that the shuttle business continued to be operated until December 2004 when the account at the Westpac bank for the business was closed. A bank statement was produced dated 6 December 2004 showing the business bank account was sent c/- of Ms P at 11A T Street. [10] The Judge accepted that the parties had always maintained separate bank accounts and that Mr H always paid the outgoings on the T Street property. In that respect, as the Judge noted, there was no difference before and after January 2002. The Judge relied on the following further factors as indicating an on-going de facto relationship beyond January 2002: · While each party had separate finances, there was evidence of a degree of interdependence. · School fees were paid by each of the parties at different times depending on who had the ability to do so. · The parties ran a business together and although some of the money went through Ms P's bank account, it was used by both of them. · At times the parties hosted students as boarders, the income from which went into Ms P's bank account but was withdrawn and paid to Mr H from time to time by her. · When Mr H became ill in January 2002, Ms P took time out to care for him, to look after the children and to operate the shuttle business. · As late as September 2004 and March 2005, Mr H took Ms P's car for warrant of fitness inspections. · Ms P arranged funeral insurance for the entire family including Mr H in May 2002. · The parties continued to attend events together and the public presentation of the parties as a couple remained the same throughout the relevant period. · Electricity accounts for the T Street property continued to come to Ms P after February 2002 at 11 T Street. [11] Although the Judge did not make any explicit findings as to credibility, he clearly preferred Ms P's account of the living arrangements. He stated at [21]: In a statement to the Police on 24 February 2005 the applicant says that she was living in the house and the respondent was living in the contained unit which was attached to the house. That tends to corroborate the respondent's version of the situation at that time, but having heard each of the parties and having regard to the evidence, I am of the view that given the ongoing family situation that existed that the applicant's version of the living arrangements is more likely to be correct up until that period of volatility in late 2004 and early 2005. [12] The overall conclusions of the Judge were expressed at [25] and [26] as follows: When I take into account each of the matters that are set out in s 2D(2) which of course are not exhaustive and then stand back and view the relationship overall, it is my view that even if the respondent had been residing in the back unit in an attempt to protect the property status that is not conclusive of whether they were living together as a couple. In the circumstances of this case I consider that the parties have continued to live together as a couple. In my view the de facto relationship was in existence as at 1 February 2002 and continued, albeit that it deteriorated in quality towards the end, through until 27 February 2005. [13] The Judge observed at one point of his judgment that it did not appear to be disputed that a sexual relationship continued between the parties after January 2002. It is accepted that the Judge was in error on that point, Mr H maintaining that the sexual relationship came to an end in January 2002. This point is one of a number relied upon by Ms Cobcroft in supporting Mr H's contention that the Judge erred in finding that the de facto relationship continued beyond January 2002. Approach on appeal [14] Counsel were in agreement that the onus is upon Mr H (as the appellant) to show that the Judge's conclusion was wrong. But they differed as to the basis on which an appellate court should intervene in decisions made by the Family Court. Ms Cobcroft emphasised that an appellate court is fully entitled to substitute its views on questions of fact and submitted that there is no rule of law requiring the High Court to defer to the Family Court even in a finely balanced case: D v S [2003] NZFLR 81 (CA). On the other hand, Mr Miller submitted that the correct approach is that adopted in cases such as May v May (1982) 1 NZFLR 165 and that an appellate court should not simply substitute its discretion for that of the Judge at first instance. He submitted that the appellant must show that the Judge acted on a wrong principle, failed to take into account some relevant matter, took into account some irrelevant matter or that the Judge was plainly wrong. [15] These authorities overlook the recent decision of the Supreme Court in Austin, Nichols & Co Inc v Stichting Lodestar [2008] 2 NZLR 141. The Supreme Court decided that, in a general appeal against the exercise of an evaluative judgment involving issues of fact and degree, undue deference need not be paid to the Court at first instance. If the appellate court would have come to a different conclusion from that reached by the Judge, it must follow that the original decision was wrong and the appellate court should then intervene. [16] In Blackstone v Blackstone (2008) 19 PRNZ 40, Glazebrook J, writing for the Court of Appeal, held that appeals from a discretion are not affected by Austin, Nichols and that the principles in May v May (above) continue to apply. Some reasonably plain ground ought to be made out before an appellate court will intervene. [17] I propose to adopt the approach that some reasonably plain ground should be made out before this Court intervenes on appeal while recognising, consistently with Austin, Nichols, that the appellate court should form its own opinion without undue deference to the assessment of the lower Court. I accept, however, that on issues of credibility, an appellate court should give appropriate weight to the conclusion of the Judge at first instance who has had the advantage of seeing and hearing the witnesses. That is of some significance in the present case where the Judge heard the parties cross-examined at length and also heard from Ms P's sister who had sworn an affidavit and was also cross-examined. Relevant Law [18] The section which is critical to the resolution of this appeal is s 2D Property (Relationships) Act, which provides: 2D Meaning of de facto relationship (1) For the purposes of this Act, a de facto relationship is a relationship between 2 persons (whether a man and a woman, or a man and a man, or a woman and a woman)-- (a) who are both aged 18 years or older; and (b) who live together as a couple; and (c) who are not married to, or in a civil union with, one another. (2) In determining whether 2 persons live together as a couple, all the circumstances of the relationship are to be taken into account, including any of the following matters that are relevant in a particular case: (a) the duration of the relationship: (b) the nature and extent of common residence: (c) whether or not a sexual relationship exists: (d) the degree of financial dependence or interdependence, and any arrangements for financial support, between the parties: (e) the ownership, use, and acquisition of property: (f) the degree of mutual commitment to a shared life: (g) the care and support of children: (h) the performance of household duties: (i) the reputation and public aspects of the relationship. (3) In determining whether 2 persons live together as a couple,-- (a) no finding in respect of any of the matters stated in subsection (2), or in respect of any combination of them, is to be regarded as necessary; and (b) a Court is entitled to have regard to such matters, and to attach such weight to any matter, as may seem appropriate to the Court in the circumstances of the case. (4) For the purposes of this Act, a de facto relationship ends if-- (a) the de facto partners cease to live together as a couple; or (b) 1 of the de facto partners dies. [19] If the parties were no longer living in a de facto relationship as at 1 February 2002 then the provisions of the Act do not apply to their relationship (s 4C(2)). [20] On the facts of the present case the focus of the inquiry must be on s 2D(1)(b), namely whether the parties were living together as a couple at 1 February 2002. Subsection (2) requires an examination of all the circumstances of the relationship including the nine identified factors. Subsection (3) clarifies that it is not necessary for the Court to make specific findings on the identified factors and that the weight to be attached to any such factors is a matter for the Court to the extent considered appropriate in the circumstances of the case. [21] As the Full Court in Scragg v Scott [2006] NZFLR 1076 observed at [64]: In determining whether a de facto relationship exists Courts are often required to assess multiple pieces of circumstantial evidence. That is why the indicia set out in s 2D are inclusive but not exhaustive. If sufficient pieces of evidence exist which, when viewed cumulatively, and through the application of common sense and proper reasoning, satisfy the finder of fact that the relationship is a de facto relationship then the statutory test is met. Weight to be given to individual pieces of circumstantial evidence may vary. If both parties say they are in a de facto relationship that may well be decisive direct evidence, depending upon the existence of other characteristics. Parties may simply present to the outside world in a particular way. They may share an emotional bond or association over an extended period and act in a way, inconsistent with any view other than that they are in a de facto relationship. It is the cumulative weight of all factors whether specified in the Act or not (because as was made clear by the minority judgment in Ruka (above) "there will be others"), which is decisive. The approach must be broad, with various factors to be weighed up in an evaluative task, similar to those the Courts are frequently called upon to undertake when drawing conclusions from circumstantial evidence. [22] A common sense objective evaluation of relevant factors is required and care must be taken not to treat the factors identified specifically in s 2D(2) as necessarily determinative of the outcome of the central inquiry. [23] The relevant authorities were recently considered by Priestley J in Benseman v Ball [2007] NZFLR 127. The Judge helpfully reviewed the authorities on desertion or separation under the former Matrimonial Proceedings Act 1963 and the determination of when a married couple were "living apart" prior to the 2002 amendment of the Matrimonial Property Act 1976. These authorities discussed the requirements for physical separation accompanied by a mental element "adverse to cohabitation." [24] After reviewing these authorities, Priestley J concluded: [43] The reciprocal rights and duties of spouses to consortium arose out of a marriage. New Zealand legislation, so far as the Act is concerned, does not distinguish between de facto relationships and marriages. Consortium is not an incident of a de facto relationship in the sense that it is a legal duty such as marriage imposes on spouses. Nonetheless it would be unreal, given the policy of the Act and related family legislation, to invoke different tests for de facto relationships and marriages. The rupture of consortium which desertion or living apart brought to a marriage is, in my judgment, qualitatively identical to the cessation of cohabitation which can occur in de facto relationships. Usually, but not always, a physical separation will be conclusive evidence of the cessation of the relationship. In some cases, the necessary animus must be established. [44] The acceptance of a two faceted approach to the determination of whether parties to a de facto relationship are living together as a couple for the purposes of the Act is evident in the Family Court decisions of O v K [2004] NZFLR 507 (FC) and Ferguson v Fish (FC North Shore, FAM-2003- 044-1895, 13 September 2004, Judge Ryan). [45] In O v K Judge Fitzgerald found that s 2D required the same approach to analysis as that under the Matrimonial Property Act when determining the date of separation (at 511). This approach was approved by Judge Ryan in Ferguson v Fish who went on to state that: [17] "Living apart" which is in my view the same as "ceased to live together as a couple" involves a physical separation and a state of mind by either or both parties deciding to no longer cohabit. [46] Against that background, it would be an error to construe, as Mr Benseman has done, para [51] of Scragg v Scott as authority for the proposition that a de facto relationship remains afoot until such time as one party communicates the end of the relationship to the other. Such an approach would be an over simplification. Cohabitation is an important aspect of the necessary inquiry. But there must also be a focus on whether one party regards the relationship as being at an end. Ultimately, as the Full Court observed in Scragg v Scott, this will be a matter of inference. [47] Relationships of varying quality will obviously exist between partners and spouses post-separation. What courts must examine is the totality of the evidence to determine, often inferentially, the date on which the critical ingredient of consortium or living together as husband and wife or a couple came to an end. On the facts of this case, although Mr Benseman might not have considered he and Mrs Foster had ceased living together as husband and wife, quite apart from the recital in the August 2001 agreement, there was ample evidence that Mrs Foster had a different view. Her animus would suffice. [25] Ms Cobcroft also referred the Court to the summary of principles adopted by Barker J in U v U [1994] NZFLR 474 at 478 when considering the expression "living apart" under previous legislation. In that case, Barker J accepted that spouses may "live apart" in the same residence. Or, to put the matter another way, the parties may no longer be "living together as a couple" even though living under the same roof. In the end, the evaluative task must be one of fact and degree taking into account all of the circumstances of the case. Grounds of appeal [26] The grounds of appeal advanced by Ms Cobcroft may be summarised as follows: a) The Judge placed insufficient weight on the statement Ms P gave to the police on 24 February 2005. b) The Judge failed to identify any qualitative change in the relationship between the parties as at February 2005 (when he found the relationship had ended). c) The correct characterisation of the relationship was that the parties were separated co-parents living in the same property in order to care for the children. d) The Judge placed too much weight on evidence that was without foundation or was wrong. e) The Judge placed undue weight on his erroneous factual finding that a sexual relationship continued after January 2002. f) The Judge gave undue weight to the addresses given by Mr H when obtaining the warrants of fitness for Ms P's motor vehicle. g) The Judge failed to weigh factors pointing against a finding that the parties continued to live together as a couple after 1 February 2002. Discussion [27] The evidence before the Judge comprised affidavits from the parties and Ms P's sister. In addition, a substantial body of further documentation was produced at the hearing when the parties were cross-examined. There being no suggestion that the Judge applied any wrong legal principle, the onus is on Mr H to establish that, viewed overall, the Judge's conclusion on the evidence was wrong. [28] I have reviewed the entire transcript of evidence and all the affidavit and other documentary evidence. I am not persuaded that the Judge's assessment was wrong. Indeed, I am satisfied that the Judge was entitled to reach the conclusion that the parties were still living together as a couple on and after 1 February 2002. It is appropriate in the circumstances of this case to recognise the advantage the Judge had in seeing and hearing the witnesses and in preferring the account given by Ms P. [29] Dealing in turn with the points raised by Ms Cobcroft, Ms P's statement to the police in February 2005 that "she was living in the house and Mr H was living in the self-contained unit" did not greatly assist Mr H's case because it related to a state of affairs some three years after the relevant date. The Judge was entitled to reach the conclusion that "given the ongoing family situation that existed that the applicant's version of the living arrangements is more likely to be correct up until that period of volatility in late 2004 and early 2005". By that stage, it is common ground that the parties were in serious dispute, Ms P having applied for protection and occupation orders in December 2004. This fact is also sufficient to dispose of Ms Cobcroft's second ground of appeal. Clearly, there was a qualitative change in the relationship as at February 2005 involving a major breakdown in the relationship of the parties. [30] The submission that the correct characterisation of the relationship was of separated co-parents living in the same property was not seriously open on the evidence. Key factors here are Mr H's acceptance that Ms P's earnings were used to pay shared bills; his acknowledgement that he was present as a "support role" for the homestay students accommodated at the address from the Oceania College in 2002 "because they wanted a family, they prefer like a husband and wife and she wanted me to be there..."; his acceptance that he arranged to take her motor vehicles to obtain warrants of fitness in 2004 and 2005; the fact that Ms P had taken out funeral insurance with Tower Insurance in 2002 for both herself, Mr H and all the children; the high probability on the evidence that Mr H received the benefit of at least some of the earnings from the shuttle business after February 2002 (as evidenced for example by a payment of $800 in August 2002); Mr H's acknowledgement that Ms P took time off work to care for him after his operation on 2002; the fact that electricity accounts were sent to Ms P at 11 T Street between 2002 and 2004 both for that property and the Rotorua property; Ms P's evidence (supported by her sister) of the ongoing relationship of the parties as a couple and the social functions they attended as a couple; and a portrait photograph of the family group in 2004. [31] As already noted, it is accepted that the Judge erred in finding that there did not appear to be any dispute that a sexual relationship continued. And, it is also accepted that the Judge mentioned in several other parts of his judgment that the sexual relationship continued. However, as Mr Miller submitted for Ms P, it was open for the Judge to reach the conclusion that the sexual relationship did continue. The Judge was entitled to prefer Ms P's evidence on this point, particularly when she was not cross-examined on this issue. Given all the other evidence of the ongoing nature of their relationship between 2002 and 2005 and the fact that they continued living under the same roof, it was reasonable for the Judge to conclude in all the circumstances that the sexual relationship did continue. [32] Ms Cobcroft submitted that the Judge was wrong to treat the warrant of fitness issue as noteworthy. She focused her attention on the different addresses given by Mr H when he took Ms P's car to obtain the warrant. On 23 September 2004 the address given was 11A T Street and on 30 March 2005 it was 11 T Street. Ms Cobcroft submitted that the 2004 address was consistent with Mr H's evidence that Ms P was by then living in the main house (which he had designated as 11A) and, on the 2005 occasion, she had moved to another address altogether so the address of 11 T Street was given. [33] I must say I have difficulty in accepting the significance of the subtleties over the addresses. The distinction between 11 and 11A T Street was not official. I was told that, in fact, there are no separate letter boxes. As well, the references to 11 and 11A were so variable as to suggest the choice was somewhat random. In any event, despite the suggestion that the parties were simply "co-parenting", the fact that Mr H obtained the warrant of fitness on each occasion for Ms P's car is more consistent with the Judge's finding than not. It was not something explicable solely on the basis that he was helping with the care of the children. [34] As to possible negative factors that it was said the Judge did not consider, it is clear that the Judge did take into account that the parties had separate bank accounts and that there was no evidence of joint acquisition of property. That state of affairs existed throughout the relationship. The Judge also noted that Ms P had consulted a lawyer in December 2001 and cannot be said to have disregarded that fact. He was entitled to accept her explanation that she was considering a separation at that time but did not take the issue further and the relationship continued. [35] Ms Cobcroft also submitted that the Judge did not take into account the fact that Mr H applied for and obtained a single person's sickness benefit in January 2002. I do not regard this as a significant factor. It was not highlighted in evidence at the hearing and there may have been other explanations for Mr H's conduct in this respect. Importantly, the Judge was entitled to prefer Ms P's overall view of the relationship given the concessions made by Mr H in a number of respects as already identified and the corroboration of Ms H's account by her sister, the documentary evidence and photographs. Conclusion [36] I am not persuaded that the Judge was wrong to conclude that the parties remained in a de facto relationship over the period he defined. It follows that the appeal is dismissed. [37] I am not aware whether the appellant is legally aided. If not, there will be an award of costs in favour of the respondent against the appellant on a 2B basis with disbursements to be fixed by the Registrar. [38] If the appellant is legally aided, then counsel should advise the Court within two weeks of the date of this judgment. [39] The Family Court is now at liberty to proceed with the determination of any outstanding issues. ______________________________ A P Randerson J Chief High Court Judge
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URL: http://www.nzlii.org/nz/cases/NZHC/2009/696.html