Lawrence v Baker [2013] NZHC 2378 (12 September 2013)

Last Updated: 26 September 2013

NOTE: PURSUANT TO S 35A OF THE PROPERTY (RELATIONSHIPS) ACT 1976, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B TO 11D OF THE FAMILY COURTS ACT 1980. FOR FURTHER INFORMATION, PLEASE SEE HTTP://WWW.JUSTICE.GOVT.NZ/COURTS/FAMILY- COURT/LEGISLATION/RESTRICTIONS-ON-PUBLICATIONS.

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2012-404-007634 [2013] NZHC 2378

BETWEEN P LAWRENCE Appellant

AND F BAKER Respondant

Hearing: 16 May 2013

Appearances: K A Muir for the Appellant

P J Stevenson for the Respondent

Judgment: 12 September 2013

_{JUDGMENT OF GILBERT J}

This judgment was delivered by me on 12 September 2013 at 10.30 am pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

_{Date: ......................}

P LAWRENCE v F BAKER [2013] NZHC 2378 [12 September 2013]

Introduction

[1] Mr Lawrence1 appeals against the following orders made by Judge D A Burns in the Family Court at Auckland on 5 December 2012:

(a) granting Mr Lawrence’s former wife, Ms Baker, the exclusive right to

occupy the family home until 1 December 2016;

(b) directing the immediate sale of an apartment in Australia; and

(c) requiring Mr Lawrence to pay spousal maintenance until

25 September 2013.

[2] Mr Lawrence also appeals against the Judge’s refusal to make any order to compensate him for the use of his capital and for various post separation payments he has made. He also claims that the Judge made a number of factual errors that need to be corrected.

[3] Ms Baker cross-appealed against the Judge’s refusal to make a lump sum award in her favour under s 15 of the Property (Relationships) Act 1976 to compensate her for economic disparity but this cross-appeal was abandoned at the hearing.

Approach on appeal

[4] To the extent that this appeal is against discretionary orders, Mr Lawrence must show that the Judge: made an error of law; took into account irrelevant considerations; failed to take account of relevant considerations; or was plainly wrong. The appeal must otherwise be determined in accordance with the approach

_{directed by the Supreme Court in Austin, Nichols & Co Inc v Stichting Lodestar:}2

1 These are not the parties’ real names. Pseudonyms have been used for the Appellant and the Respondent throughout this judgment to comply with ss 11B to 11D of the Family Courts Act 1980 because the judgment refers to persons under the age of 18 years.

2 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103; [2008] 2 NZLR 141 at [16].

Those exercising general rights of appeal are entitled to judgment in accordance with the opinion of the appellate Court, even where that opinion is an assessment of fact and degree and entails a value judgment. If the appellate Court’s opinion is different from the conclusion of the tribunal appealed from, then the decision under appeal is wrong in the only sense that matters, even if it was a conclusion on which minds might reasonably differ.

Occupation order

[5] Mr Lawrence and Ms Baker commenced living together in 1994 and married in 1995. They separated in 2008 and their marriage was dissolved in January 2011. The parties’ two children, now aged 17 and 14, live with Ms Baker in the family home in Glendowie, Auckland which is a four bedroom, cliff top property with a swimming pool. The Judge granted Ms Baker the exclusive right to occupy this property until 1 December 2016. By then, the parties’ daughter, who is the younger of the two children, will be 17 years old and will have completed year 12 at secondary school. This occupation order means that the property will not be sold

until 2017, some eight and a half years after the parties’ separation.3 This is longer

than any other occupation order that counsel could find.

[6] Mr Lawrence argues that this order cannot be justified. He has re-married and lives with his wife and baby daughter in Singapore where he is employed as a research scientist and professor. Mr Lawrence says that because his capital remains invested in the family home, he and his new family are unable to afford satisfactory accommodation and are forced to rent a small apartment overlooking a petrochemical plant.

[7] Section 27 of the Act gives the Court a broad discretion to grant an exclusive right to occupy the family home on such terms as it thinks fit. The breadth of the jurisdiction was emphasised by the Court of Appeal in Doak v Turner.4 In delivering

the judgment of the Court, McMullin J stated:5

It would be quite inappropriate to limit the exercise of the discretion given to the Court by considerations relevant only to a particular case. The need to

3 Mr Lawrence claims that the Judge incorrectly found that the parties separated on

_{25 September 2008. He contends that the correct date was 22 June 2008.}

4 _{Doak v Turner [1981] 1 NZLR 18 (CA).}

5 At [23].

provide a home for children of the marriage, considerations of health and age, the desirability of bringing finality to a marriage dispute and of affording parties an opportunity to re-establish themselves by retaining their shares of capital from the matrimonial home, may be some of the pressing considerations in each case. But it would be wrong to lay down a general rule that some of them must receive more weight than others. Nor is there any onus on one side to make out a case for an occupation order or against it. The Court is not directed to exercise its discretion in a particular way unless there are considerations which persuade it to a contrary view. The approach of the Court must be flexible. But ultimately the inquiry must be as to what is just and fair in the particular circumstances of the case.

[8] In 1983, after Doak v Turner was decided, the Act was amended by adding s 28A which requires the Court to have particular regard to the need to provide a home for any minor or dependent children of the marriage when determining whether to make an occupation order under s 27. While the accommodation needs of minor or dependent children must always be taken into account, these should be balanced against all other relevant considerations in the particular case, including the desirability of providing the parties with a clean break in their financial affairs so that they can re-establish themselves.

[9] In W v W,6 Robertson J considered that an occupation order of five years, which was six years and four months from separation, could not be sustained. In reducing the occupation order to two years, he observed:7

These parties are now in their mid forties. If they are not soon in a position to deal with their independent futures, it will be too late for each of them to take their modest entitlement and use it as a means of acquiring future property.

One can understand the need for disruption to be minimised and that is a compelling reason why there should be no immediate action. I am, however, not persuaded that the period which was asked for by the wife (and acquiesced in by the Judge) is sustainable against overall principle. The son of the marriage will turn 17 at the end of next year. By that time the parties will have been separated for 3½ years. It is probable that only the daughter will by then be involved in full-time secondary education. I am satisfied that the competing claims are best dealt with if the order for occupation is limited [until then].

[10] In S v W,8 Allan J made an occupation order granting the wife exclusive occupation of the family home for a period of four years, even though the parties had

6 _{W v W [1997] NZFLR 543; (1997) 15 FRNZ 611 (HC).}

7 At 616.

already been separated for nine years. However, that case involved particularly unusual circumstances and the occupation order was made in accordance with an offer made by the husband. Allan J made it clear that this was an exceptional case and that occupation orders extending over several years will not normally be appropriate:9

In the general run of cases, a s 27 order that is intended to operate for a term of several years will be regarded as offending against the clean break principle. But here, the Court is entitled to take into account the considered positions of the parties, explicitly outlined in open Court, and intended to be acted upon. The appellant [the husband] has significant separate property. He has a separate residence of his own and substantial other assets. He is not in immediate need of his share of the equity of the Massey home. His extended occupation offer reflects that position.

[11] It was not until her opening submissions in the Family Court that Ms Baker signalled her intention to apply for an occupation order in respect of the family home. She made no formal application but in closing submissions sought an occupation order until the parties’ younger child turned 18. She claimed that this was required “to ensure a stable home for the parties’ family until their secondary schooling is completed”.

[12] Ms Baker did not advance her application on the grounds that the children would not be able to attend the same schools unless the order was granted. The son will complete his secondary schooling at the end of this year and is expected to commence tertiary education at the beginning of 2014. There was no evidence that Ms Baker could not relocate to a smaller and less expensive property in the area at that stage. Nor was there any evidence that the daughter could not continue to attend the same school if they decide to move out of the area.

[13] Despite this, the Judge was concerned that Ms Baker may not be able to obtain alternative accommodation in the school zone and the children might have to change schools. This was a significant factor influencing his decision to grant the

_{occupation order:}10

8 _{S v W HC Auckland CIV 2008-404-4494, 27 February 2009.}

9 _{At [99].}

10 At [32].

If the property sells now it will have the effect of reducing the children’s standard of living. Their mother may not be able to obtain alternative accommodation in their school zone area and it could require them to have to change schools. This would have a direct impact on their education and future potential. It would also impact on their peer relationships and interests.

[14] I consider that the Judge was wrong to take this factor into account given that it was not raised by Ms Baker as a ground for her application and there was no evidence to support it.

[15] The Judge also considered that Mr Lawrence would not be prejudiced by delaying the sale of the family home because he would receive the net proceeds of sale of an apartment owned by the parties in Queensland, Australia. The Judge ordered that this property be sold and that the net proceeds be vested in Mr Lawrence pending the sale of the family home:11

I consider the needs of the children to have a stable home outweighs the needs of the husband to have his capital at this stage. Also because the other relationship property [the Australian property] is going to be vested in him he will not be prejudiced.

[16] However, in reaching this conclusion, the Judge overlooked the mortgage of approximately AUD $296,000 secured against this property. This is apparent from the directions he gave concerning the deductions to be made from the gross proceeds of sale:12

From the gross sale proceeds the following is to be deducted:

(i) Real estate agents’ commission (if any) of and incidental to

the sale;

(ii) Any reasonable legal fees of and incidental to the sale;

(iii) Any capital gains tax that has to be paid to the Inland Revenue Authorities in Australia, estimated at the time of hearing of $39,980.00.

_{(iv) I direct that the wife}13 _{is to be reimbursed for the wife’s half}

_{share of the cost supplied to the property since [separation]}14

11 _{At [29].}

12 _{At [39].}

13 _{This is a slip. The Judge intended to refer to the husband.}

14 The word “separation” was accidentally omitted.

of $15,160.50. The husband is also to be reimbursed for the joint valuation cost with the respondent share being $375.50.

(v) The other adjustments I have ordered in this judgment.

[17] Assuming the property sells for the price indicated by the valuation of AUD $510,000, the balance after payment of real estate agent’s fees, legal fees, stamp duty, capital gains tax and the mortgage would be approximately AUD $154,000 or NZD $190,000. If there had been no mortgage on the Australian property, one could understand the Judge’s conclusion that Mr Lawrence would not be prejudiced because the amount available on sale would be comparable to his share of the net equity in the family home. However, taking into account the mortgage, the amount available to Mr Lawrence will not be comparable to this and will not be sufficient to enable him to acquire a replacement property. The Judge’s conclusion that Mr Lawrence would not be prejudiced by deferring the distribution of his share of the capital invested in the family home because he will receive the proceeds of the Australian property cannot be sustained.

[18] The Judge also made an error concerning the daughter’s age when setting the expiry date for the occupation order. He appears to have had in mind that the occupation order should continue until the daughter turns 16. He referred to this as the “statutory age” and noted its significance under the Care of Children Act 2004. The Judge also noted that the daughter will turn 16 in July 2016 whereas, in fact, she will turn 16 in July 2015. This error influenced his decision to continue the occupation order until 1 December 2016:

[31] Ms Stevenson sought for it to go to 18. I consider that is too long. The Care of Children Act provides for the jurisdiction of that Court to end at the age of 16. That is the statutory age. She will be attaining 16 in July 2016 so extending it through to December is not that long and will enable her to complete her exams. Both parents put a lot of emphasis on their children’s education.

[19] In summary, I am satisfied that the Judge made three material errors in exercising his discretion to grant Ms Baker the exclusive right to occupy the family home until 1 December 2016. First, he wrongly assumed, without any supporting evidence, that the children may not be able to continue their education at their current schools unless the occupation order was made. Second, he overlooked the

mortgage on the Australian property in concluding that Mr Lawrence would not be prejudiced by delaying the sale of the home. Third, the Judge seems to have considered that the occupation order should continue until the daughter turns 16 and he mistakenly believed that this will occur in July 2016.

[20] These factual errors formed the basis of the Judge’s decision to grant Ms Baker exclusive occupation of the family home until 1 December 2016. Once these errors are corrected, I consider that such a lengthy occupation order cannot be justified and is contrary to the clean break principle. Mr Lawrence is 46 and Ms Baker turns 50 this year. Their marriage ended long ago and each must now go their own way. They cannot do this until the family home is sold. Without access to their capital, neither can re-establish themselves independently.

[21] The parties have substantial equity in the home. Seagar & Partners, registered valuers, valued the family home as at October 2011 at $1,040,000. Auckland house prices have risen since then. The mortgage as at 31 July 2012 was approximately $134,000. Taking into account Ms Baker’s share of other relationship property, there should be sufficient funds to enable her to relocate to her own property.

[22] Although Ms Baker has not worked during the marriage, she should be able to obtain employment. She has a Bachelor of Science in biochemistry and molecular biology and a post graduate diploma in psychology. Ms Baker’s economic disparity claim under s 15 was presented on the basis that she would be able to resume employment at the end of September 2012 and the Judge accepted that she should be able to gain employment immediately.15

[23] Section 39(3) of the Act gives this Court the powers set out in s 76 of the District Courts Act 1947, including the power to make any decision it considers ought to have been made in the Family Court. I consider that the appropriate course is to vary the occupation order so that it will now expire on 1 March 2014. Although this will still result in Ms Baker having exclusive occupation of the family home for

_{more than five years following separation, I consider that the further period between}

15 At [70].

now and the revised expiry date is appropriate as it will allow Ms Baker sufficient time to make arrangements to relocate.

Sale of the Australian property

[24] The Act does not apply to immovable property situated outside New Zealand except where the parties agree in writing pursuant to s 7A which provides:

This Act applies in any case where the spouses or partners agree in writing that it is to apply.

[25] The parties agreed to the Court having jurisdiction over the Australian property for the purpose of determining their respective interests in the relationship property but neither sought an order for its sale.16 Despite this, the Judge directed the immediate sale of the property on the basis that the net proceeds would be vested in Mr Lawrence pending the sale of the family home. The Judge made this order because he considered that it would alleviate Mr Lawrence’s need for capital and overcome any prejudice caused to him by delaying the sale of the family home:17

I consider that the property needs to be sold and I decline therefore to fix a valuation. The husband says that he needs capital and has made a claim for capital from the home. One way of alleviating his need for capital is to sell the Australian property.

[26] However, as noted, the Judge overlooked the mortgage in concluding that vesting the proceeds of sale of this property in Mr Lawrence would overcome any prejudice to him caused by delaying the sale of the family home. The primary reason given by the Judge for ordering the immediate sale of the Australian property was therefore incorrect.

[27] Both parties would be disadvantaged if the property is sold because of the sale costs including stamp duty, real estate agent’s fees and legal fees that would be

16 In his submissions, Mr Lawrence asked that he be entitled to retain this property. Ms Baker did not file any cross-application and in her defence dated 24 August 2010 she did not seek any specific relief in relation to the Australian property. In her opening submissions, she proposed that Mr Lawrence account to her for the value of the property less the mortgage secured against it and capital gains tax.

17 At [40].

incurred. Mr Lawrence wishes to retain the property and is willing to account to Ms Baker for her half share assessed on the basis that he will meet all sale costs if he later decides to sell the property.

[28] For the reasons given, I consider that the order for sale of the Australian property should be set aside. The property should be vested in Mr Lawrence on the basis that he must account to Ms Baker for her half share when the family home is sold.

Maintenance

[29] The Judge ordered Mr Lawrence to pay ongoing spousal maintenance at the rate of $780 per week until 25 September 2013, being five years from the date the Judge found the parties to have separated. Mr Lawrence appeals against both the quantum and duration of the order.

[30] Mr Lawrence did not challenge the quantum of spousal maintenance sought by Ms Baker at the hearing in the Family Court and the Judge fixed quantum on this basis. In these circumstances, I do not consider that it is appropriate to interfere with the Judge’s determination of quantum.

[31] However, Mr Lawrence did challenge the duration of the spousal maintenance sought by Ms Baker at the hearing in the Family Court. Mr Lawrence argues that the Judge made three material factual errors in ordering that spousal maintenance should continue until 25 September 2013:

(a) he incorrectly stated that the marriage lasted 15 years rather than

13 years;

(b) he failed to take into account the expert evidence given on behalf of Ms Baker that she would be able to re-enter the workforce no later than September 2012; and

(c) he failed to take into account that Ms Baker only sought maintenance for a period of 12 months from the date of hearing which commenced on 6 August 2012.

[32] The first of these errors is immaterial and would not have had any bearing on the Judge’s decision. I note that although the parties were married for 13 years rather than 15 years as stated by the Judge, they had been living together for

14 years.

[33] As to the second alleged error, the Judge took into account the expert’s view that Ms Baker could return to work in September 2012. However, he was not constrained by that view. The Judge recognised the need for Ms Baker to gain employment and become self-sufficient. He considered that she needed a reasonable notice period and that this would be achieved by ordering spousal maintenance until

25 September 2013. The Judge noted that this would coincide with the children becoming more independent. This was presumably a reference to the son completing his secondary schooling at the end of this year.

[34] I also consider that the third alleged error is immaterial. It seems clear that the Judge chose 25 September 2013 as the end date for spousal maintenance on the basis that this was five years after Mr Lawrence moved out of the family home.

[35] Despite Mr Muir’s careful submissions to the contrary, none of the alleged errors justifies this Court interfering with the Judge’s decision regarding the duration of spousal maintenance. I consider that the Judge’s decision was available to him on the evidence and that he made no error of law in reaching it. I am not persuaded that it was wrong even though, for the reasons I give later in this judgment, I find that the parties separated on 22 June 2008, not 25 September 2008 as found by the Judge.

Compensation for post separation contributions

[36] In his opening submissions in the Family Court, Mr Lawrence sought compensation under s 18B of the Act in the sum of $81,447 for Ms Baker’s use of his capital resulting from her exclusive right to occupy the family home. This sum was calculated by adopting a 5 per cent per annum return on Mr Lawrence’s half of the equity in the home from June 2008, being the date Mr Lawrence claims the parties separated, to August 2012, being the date of hearing.

[37] Section 18B of the Act relevantly provides:

(1) In this section, relevant period in relation to a marriage... means the period after the marriage... has ended... but before the date of the hearing of an application under this Act by the Court of first instance.

(2) If, during the relevant period, a spouse... (party A) has done anything that would have been a contribution to the marriage... if the marriage... had not ended, the Court, if it considers it just, may for the purposes of compensating party A –

(a) order the other spouse... (party B) to pay party A a sum of money:

[38] An award of compensation under s 18B cannot be made in favour of a party unless that party has done something during this relevant period that would have qualified as a contribution to the marriage had it not ended. Assuming that threshold test is satisfied, the Court must then determine whether it is just to make an order in the particular circumstances of the case. This will require the Court to assess the value of the contribution and balance it against all other relevant considerations. These may include any offsetting contributions made by the other party. It may be necessary to consider the arrangements made for the care of dependent children and spousal maintenance because, to some extent, these matters may all be interconnected. In exercising its discretion to make an award of compensation pursuant to s 18B, the Court must endeavour to achieve a just division of relationship property in accordance with the purpose and principles of the Act as set out in ss 1M and 1N.

[39] The Judge declined to make any award under s 18B for the reasons he gave in the following section of his judgment:18

I decline to make an order for occupation rental. I consider that the needs of the children to have a roof over their head and the husband’s responsibility to ensure that that occurred extinguishes any right or claim to any adjustment for the wife’s use of his capital in the home. There are other compensatory factors available to the husband. The Australian property will be sold at current market and so he will benefit from any increase in value. The superannuation fund will be valued at the date of separation without interest adjustment which is another form of compensation to the husband. He has had the benefit of significant income since separation. Whilst he has acted responsibly in maintaining the home and the wife and children nevertheless

18 At [37].

this is part and parcel of his ongoing responsibility. If I ordered the wife to pay some form of occupational rent it would be a way of her effectively paying him for what he should have done as part of his responsibility. I consider her devotion to the children and providing for them emotionally and physically rules out any adjustment in the husband’s favour. I consider that her contributions as defined by s 18 equate with or match the husband’s financial contributions by way of direct financial support or indirect financial support by way of the home not being sold.

[40] Mr Muir submits that the Judge may have been influenced in declining to make any order under s 18B by his mistaken belief that Mr Lawrence will gain access to significant capital following the sale of the Australian property. I do not accept this submission. Although the Judge referred to Mr Lawrence benefitting from any increase in value of the Australian property, it appears that he declined to make any award under s 18B because he considered that Mr Lawrence’s contribution was balanced by Ms Baker’s offsetting contribution in caring for the parties’ children. I can see no error in that approach, particularly given that spousal maintenance was assessed on the basis of Ms Baker remaining in the family home and caring for the children.

Other alleged errors

Separation date

[41] Mr Lawrence argues that the Judge was wrong to find that the parties separated on 25 September 2008. He contends that the correct date is 22 June 2008.

[42] The Judge accepted that the correct test for determining the separation date is as stated by Rodney Hansen J in X v X,19 namely:

A couple cease to live together as husband and wife or, to use an interchangeable term, begin to live apart, when there is a physical separation and a mental attitude on the part of at least one of the parties to cease cohabitation.

[43] Mr Lawrence argues that the Judge misapplied this test in concluding that the parties separated on 25 September 2008 because he said that it was only then that the

_{requisite mental attitude was accepted by both parties:}20

19 X v X [2007] NZFLR 502 (HC) at [22].

I find that the date of separation was as contended for by the wife which is

25 September 2008. I consider it was only then that the two elements of physical separation and the mental attitude accepted by both parties came

into being. Whilst the husband was expressing an intention to separate there

was some ambivalence in the messages that he was giving for the period between June and September. His returning to the family home on occasions meant that the wife was entitled to consider that he had not formed any final intention to separate at that stage. This is especially so with the background of the parties and the previous separation that had occurred.

[44] I accept Mr Lawrence’s contention that the Judge misapplied the test. It does not matter whether or not Ms Baker appreciated that Mr Lawrence had decided to cease cohabitation. The questions in this case are whether Mr Lawrence intended to cease cohabitation and did so. The evidence on these questions was clear. Mr Lawrence moved into a separate bedroom on 22 June 2008 intending to cease cohabitation from that time. The parties did not thereafter resume cohabitation in the same bedroom. On 23 June 2008, Mr Lawrence sent Ms Baker an email attaching a Parents’ Guide to Caring for Children after Separation. Ms Baker recognised that the parties would be living apart. She sent an email on 22 July 2008 proposing that they live in two separate households financed separately.

[45] I accept this aspect of Mr Lawrence’s appeal and find that the parties

separated on 22 June 2008.

Post separation expenditure

[46] Mr Lawrence sought compensation for post separation expenditure, being mortgage interest, rates and other expenses together totalling the sum of $53,029. He seeks 50 per cent of this sum, being $26,514.50. Ms Baker did not contest this claim in principle but she disputed Mr Lawrence’s calculations. In view of my finding as to the correct separation date, these post separation payments will need to be further adjusted in any event. I expect that counsel should be able to agree on the required adjustments. However, should they be unable to do so, I will determine the matter following the filing of further memoranda in accordance with the timetable

_{set out at the end of this judgment.}

20 At [20].

Income from boarder

[47] Mr Lawrence also sought compensation in the sum of $1,050 in respect of monies received by Ms Baker from a boarder from 15 March 2012 to 8 August 2012. The Judge disallowed this claim noting that Ms Baker will have incurred increased costs, including food, which would have to be taken into account in determining the net return. He also noted that the family needed this money because the amount they were receiving from Mr Lawrence at that time was insufficient to cover their living costs. I am not persuaded that the Judge was wrong to dismiss this claim in all of the circumstances.

Maintenance arrears

[48] The Judge ordered Mr Lawrence to pay arrears of spousal maintenance in the sum of $9,850. This was calculated by comparing the amount paid by Mr Lawrence in the period from 29 July 2009 to 13 July 2010 with the amount ordered by way of interim maintenance on 14 July 2010. Mr Lawrence claims that the Judge erred in making this order because he failed to take into account overpayments he made in the prior period from separation until 29 July 2009. The Judge accepted Ms Baker’s claim but did not explain why he was not prepared to take into account payments made in earlier period in excess of the amount ordered.

[49] Ms Baker submits that there were no overpayments because spousal maintenance paid prior to the interim maintenance order was as determined by Mr Lawrence. That is correct but the same can be said in relation to any underpayments during this period. I cannot see any good reason why underpayments should be taken into account but overpayments disregarded.

[50] I consider that the correct approach is to take overpayments as well as underpayments into account in the period from separation to the date of the interim spousal maintenance order on 14 July 2010. From that date, Mr Lawrence must pay in accordance with the Family Court’s orders. Any arrears in this period must be

paid. However, during the period from separation on 22 June 2008 until the date of the Court’s order on 14 July 2010, overpayments and underpayments must be taken into account in determining whether there are any arrears. On the basis of the information supplied by Ms Baker, there were no such arrears if they are assessed on that basis. The Judge’s order requiring payment of arrears of $9,850 for this period must therefore be set aside.

Rates

[51] The Judge ordered Mr Lawrence to pay outstanding rates of $3,114.95 because the interim maintenance order was made on the basis that he would pay the rates. Mr Lawrence says that he paid the rates for 2010 and 2011. He acknowledges that he did not pay the rates for 2012 and that he was responsible for doing so until

6 August 2012. From that date, Ms Baker became responsible for the rates because these were taken into account in the Judge’s assessment of ongoing quantum of spousal maintenance.

[52] Mr Lawrence says that the unpaid rates for which he is responsible for 2012 must be less than the amount the Judge ordered him to pay. He says that the rates are approximately $2,800 per annum and that the portion of these for which he is responsible in the 2012 year is approximately 7/12th of that being $1,633. However, Ms Baker produced a letter from Auckland Council dated 25 June 2012 showing that overdue rates at that date amounted to $3,114.95. It appears that this may include a

penalty for late payment.

[53] On the basis that Mr Lawrence was obliged to pay the rates until

6 August 2012 and the rates arrears as at 25 June 2012 were $3,114.95 as stated by Auckland Council, I can see no error in the Judge’s order that Mr Lawrence pay these arrears.

Mr Lawrence’s personal property

[54] Seagar & Partners valued the chattels at $22,505. On that basis, the Judge ordered Ms Baker to pay one half of that sum to Mr Lawrence.

[55] Mr Lawrence claims that the Judge was wrong in making this order. He claims that he is disadvantaged by the fact that he has had to re-establish himself from scratch whereas Ms Baker has been able to retain all of the chattels in the family home and pay a price fixed by the valuation. Mr Lawrence also says that the valuation does not take account of items Ms Baker sold on TradeMe. Ms Baker acknowledges that she sold a pen and a kayak on TradeMe. Mr Lawrence submits that Ms Baker should be required to pay further compensation in the sum of $5,000.

[56] I am not prepared to interfere with the Judge’s decision on this issue and

decline to award the further compensation Mr Lawrence now seeks.

Tax credit

[57] The Judge ordered Mr Lawrence to pay $1,527.48 from the proceeds of sale of the Australian property, being one half of a tax credit relating to earnings for the financial year ending 31 March 2009. Mr Lawrence says that the Judge was wrong to make this order because he failed to take into account that part of this credit was for tax that he paid post separation from his separate property. On the basis of my finding that the parties separated on 22 June 2008, Mr Lawrence says that Ms Baker

is only entitled to 3/12th of that figure being $381.87. I agree. The order is varied

accordingly. The adjustment is to be made when the family home is sold.

Post separation costs incurred in relation to the Australian property

[58] The Judge directed that Ms Baker was to be reimbursed for her half share of the costs paid in relation to the Australian property since separation amounting to

$15,160.50. This was clearly a slip. Both parties accept that the Judge intended to direct that Mr Lawrence be reimbursed for Ms Baker’s half share of this cost. The costs were paid by Mr Lawrence, not by Ms Baker.

Result

[59] The appeal is allowed in part. The orders made in the Family Court are varied as follows:

(a) The order pursuant to s 27 of the Act granting Ms Baker the exclusive right to occupy the family home until 1 December 2016 is varied so that it will now expire on 1 March 2014. The property is to be placed on the market for sale on or before that date.

(b) The order directing the immediate sale of the Australian property is set aside. This property is to be vested in Mr Lawrence. He is to account to Ms Baker for her half share of the equity in this property ignoring sale costs when the family home is sold.

(c) The Judge’s finding that the parties separated on 25 September 2008

is set aside. The correct separation date is 22 June 2008.

(d) Mr Lawrence is entitled to compensation for post separation expenditure in accordance with [46]. If the parties are unable to agree on the required adjustments, Mr Lawrence should file a memorandum within 21 days of the date of this judgment. Any memorandum from Ms Baker in reply should be filed within 14 days thereafter.

(e) The order requiring Mr Lawrence to pay arrears of spousal maintenance in the sum of $9,850 is set aside.

(f) The order requiring Mr Lawrence to pay $1,527.48 in respect of the tax credit is replaced by an order requiring him to pay $381.87. The adjustment is to be made when the family home is sold.

(g) The slip in the Family Court judgment directing that Ms Baker is to be reimbursed for her half share of the costs paid in relation to the Australian property since separation amounting to $15,160.50 is corrected to reflect the Judge’s intention that Mr Lawrence should receive this sum.

[60] The parties asked me to reserve costs. My provisional view is that

Mr Lawrence is entitled to costs on the appeal on a 2B basis. However, should the

parties be unable to agree on the issue of costs, I will deal with the matter by way of memoranda. Any application for costs should be made by memorandum to be filed and served within 14 days of the date of this judgment. Any memorandum in reply should be filed and served within 14 days thereafter.

[61] I reserve leave for either party to make further application for directions should there be any disagreement as to the final form of the orders required to give

_{effect to this judgment.}

M A Gilbert J