BLD v ALD [2014] NZHC 579 (26 March 2014)

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Hearing:	18 March 2014
Appearances:	L J Kearns for Appellant Respondent Appeared In Person with Mr G Croy (support person)
Judgment:	26 March 2014

(Note: This judgment was recalled and reissued on 17 February 2015. See minute of Gendall J dated 17 February 2015.)

[1] This is an appeal relating to proceedings under the Property (Relationships) Act 1976 (the Act). The appeal is against part of a judgment in the Family Court at Auckland delivered by His Honour Judge D A Burns on 24 September 2013.

[2] Also at issue here is an application by the respondent for leave to bring a cross-appeal against that Family Court judgment.

[3] The appellant and the respondent were married on 29 September 1984 and separated on 1 May 2007. There are no children of their relationship.

[4] At the time of separation the parties and their various entities it seems had the following assets:

(a) The former family home at 25 Siota Crescent, Kohimarama, Auckland (the home), which was owned by the trustees of the BL and AL D Trust. The trustees were the two parties and an independent solicitor;

(f) Shares in a number of companies including Spot X Cape to Cape Limited, Spot X Fishing Forecast Limited, Spot X Fishing Guide Limited and C.Swish Agencies;

[5] Shortly prior to the June 2013 hearing in the Family Court, the respondent filed an application under s 182 Family Proceedings Act 1980. As I understand it those proceedings for which a notice of defence has been filed still need to be progressed in the Family Court.

[6] So far as the parties’ former home is concerned, this has now been sold following certain legal difficulties which arose with neighbours. Costs and other orders were made against the appellant and the respondent following High Court litigation over these difficulties and a forced sale of the property ensued. As a result, significantly reduced net sale proceeds (of about $117,000) are now held in a solicitor’s trust account for the parties.

[7] Resolution of some property dispute matters between the parties has occurred. The remaining matters which were still outstanding however (most of which were before the Family Court) related essentially to the following:

(b) A claim for occupation rental for the home which originally had been ordered by the Family Court to be paid by the appellant;

(d) An issue concerning costs of $750 ordered to be paid by the respondent by Judge McHardy in the Family Court on 24 August

(f) An allegation that a cash adjustment in favour of the appellant should be made because of the respondent’s conduct pursuant to s 18C of the Act; and

(g) Allegations by the respondent in her cross-appeal that the Family Court erred in failing to include and value the appellant’s business interests, when it is said the appellant has also consistently refused to provide information as to the status and value of those business interests.

[8] This relationship property appeal from the Family Court is governed by s 39 of the Act. This imports s 75 of the District Courts Act 1947 which provides that all appeals to the High Court are by way of re-hearing.

[6] ...The appeal is by way of re-hearing (s 75) and falls within the scope of an appeal of the type to which the Chief Justice referred in Austin Nicholls & Co Inc v Stitchting Lodestar [2007] NZSC 103; [2008] 2 NZLR 141 at para [17]. If the appeal were allowed, this Court may make any decision that it thinks should have been made or remit the proceeding to the Family Court for reconsideration on a basis to be articulated clearly in its decision (s 76(1)).

[7] Application of the Austin Nicholls principles is not altogether easy, in the context of appeals from the Family Court. Many first-instance decisions represent a mix of findings of fact (after seeing and hearing witnesses), the formation of an evaluative judgment and the exercise of statutory discretion. Sometimes it is difficult to characterise a decision as evaluative, factual or discretionary in nature.

(a) First, I must take account of the advantage that Judge Twaddle had of hearing and seeing the witnesses give evidence before him: see Austin Nicholls at para [13].

(b) Second, to the extent that the Judge exercised any discretion in reaching his decision, I must determine whether those discretionary decisions were or were not open to him based on May v May [1982] 1 NZFLR 165 (CA) and Blackstone v Blackstone [2008] NZCA 312 at para [8]...otherwise I am free to reconsider the Family Court’s decision and to substitute my own view on questions of fact and evaluation, if I were convinced that the first instance decision was wrong...

[10] I adopt this approach and the principles outlined in Austin Nicholls in this appeal.

[11] five g	I no round	w turn first to address the appellant’s appeal. In this, he effectively raises s of appeal. These are:
	(a)	The issue concerning determination by the Family Court of an occupation rental for the parties’ previous home occupied by the
		appellant for some time;
	(b)	Issues over the date of valuation and value for the launch;

(e) Issues over the $5000 chattels adjustment payment the appellant says the respondent must pay to him, along with the outstanding Family Court costs order of $750.

[12] At the outset of the hearing of this appeal; the parties acknowledged that this issue no longer formed part of the appeal. Although this question was included as a nominated ground in the appellant’s Notice of Appeal, in the later decision of Judge Burns in the Family Court dated 19 February 2014, he discharged his earlier ruling regarding occupation rent and acknowledged that it should not have been part of his earlier judgment. It was a matter to be determined under the respondent’s recently filed s 182 application before the Family Court, given also that the parties’ home for which occupation rent was sought was owned by a trust. I need say nothing more on this aspect.

[13] In his 24 September 2013 judgment in the Family Court, Judge Burns determined that the launch was to be valued at the date of separation being 1 May

2007. The value he placed on the launch at that time was $150,000. This appeal raises issues over what was the proper date for assessment of the value of the launch, and the actual value attributed.

(1) For the purposes of this Act, the value of any property to which an application under this Act relates is to be determined as at the date of the hearing of that application by the Court of first instance.

(2) However, the Court of first instance or, on an appeal the High Court, Court of Appeal, or Supreme Court may, in its discretion, decide that the value of the property is to be determined as at another date.

[15] The starting point therefore in determining the value of any property under the Act is to determine its value “at the date of hearing” of the particular action before the Family Court. That date in this case would have been June 2013 and not May 2007. Although there is some dispute as to this, at June 2013 generally it seems the value of the launch was in the vicinity of $80,000 to $100,000.

[16] In his judgment in the Family Court, Judge Burns addressed at some length this question of a valuation date for the launch. He determined that the appropriate valuation date was the May 2007 separation date essentially because, since that time, the appellant has had almost exclusive use of the launch, and to an extent he has used it as part of his business operation with related depreciation and expense claims (it seems for taxation purposes). Ultimately therefore, Judge Burns determined that in any event, even if a hearing date valuation for the launch had been adopted here as opposed to the separation date valuation which he did apply, the result would have been much the same, given adjustments to be made under s 18B and 18C of the Act for compensation payments required for use, contributions and dissipation post-

setting out a current market value between $110,000 and $120,000. This valuation went on to record that: “Presented in tidy condition five years ago Miss B Haven would have sold for $150,000. As viewed today (August 2011) in a weak market, retail value is between

(d) A valuation dated 5 November 2011 from Busfield Marine Brokers giving an estimated market value for the launch at that time between

$95,000 and $105,000 with a value for the vessel if sold under a fire sale, tender or auction situation of around $75,000 to $85,000.

[18] On this aspect, Judge Burns in the Family Court indicated at [25] that the best evidence he had of the launch value at the date of separation was the Marlow Marine valuation giving an approximate May 2007 value of $150,000.

[19] Indeed, the applicant himself in his affidavit sworn 21 May 2012 stated at paragraph 13:

13. ...At separation the boat was worth approximately $150,000. As can be seen from the valuations (Busfield Marine Brokers and Quadrant Yachts valuations) I have now obtained the boat is now worth only approximately

[20] It is this figure of $150,000 Judge Burns chose to adopt. He therefore ordered the appellant who had retained the launch to account to and adjust for one half of that sum ($75,000) in favour of the respondent. He did not however order any sum for interest payable on that amount from separation date because he considered the delays that have occurred in reaching hearing in this matter are such that it is not appropriate to exercise a discretion to award interest.

[21] In my view Judge Burns was entitled in the circumstances prevailing in this case to adopt the separation date valuation of the launch as appropriate. Certainly since that time the appellant had virtually exclusive use of the launch and earned income from it. And, like a motor vehicle, the launch was likely to be a significantly

[22] Further, as I understand the position, use of the launch by the appellant for his marine related business would have entitled him to claim depreciation and expenses against his income which it appears was likely to have happened.

[23] Although the adoption by Judge Burns of the separation date valuation was not in line with the usual s 2G starting point for valuing property under the Act, as confirmed by the Supreme Court in Burgess v Beaven²and by the Court of Appeal in

GFM v JAM,³in my judgment it was appropriate in the circumstances prevailing in

[24] As to the actual valuation figure of $150,000 for the launch adopted by Judge Burns, again I accept that he was entitled to adopt this figure as the best available evidence before the Court of the value of the launch at May 2007 in line with the Marlow Marine Valuation. It seemed to be the only independent evidence of the launch’s value as at May 2007 which was before him. And, as I have noted at paragraph [19] this valuation figure of $150,000 was acknowledged by the appellant himself in his 21 May 2012 affidavit as an appropriate value for the launch at the May 2007 separation date.

[25] For all these reasons the appellant’s appeal relating to Judge Burns’ decision

[26] The appellant in this appeal raises a number of complaints concerning what he says are unreasonable delays and improper and inappropriate conduct on the part of the respondent which he claims has materially diminished his matrimonial

[27] In this regard, the appellant contends that the respondent has purposely and without justification delayed the resolution of relationship property issues between them in a number of ways, including the following:

(a) By her refusal to agree to an immediate sale of the launch at separation when the appellant wished to have the vessel sold at a time before a significant downturn in the market;

(b) By refusing to subsequently agree to the appellant acquiring her share in the launch a year later in 2008;

(c) By herself filing an application in 2010 seeking an order for the sale of the boat when a sale of the boat would have established its valuation as at that date of sale;

(d) By allegedly failing to comply with a Court order as to how the boat was to be properly valued;

(e) By causing inordinate delay in the proper determination of this entire matter including in this her failure throughout to comply properly with Court directions;

(f) By continually raising unjustified issues in this and other proceedings which had been otherwise agreed or determined earlier;

[28] Generally the respondent takes issue with these contentions advanced by the appellant.

[29] As I have noted already this whole matter has a long, acrimonious and convoluted history. It is not appropriate to endeavour to delve into the rights and wrongs of these and the many other allegations that have arisen between these parties. Suffice to say at this point that although there may well be some substance in several claims advanced by the appellant here, it is difficult to make a definitive finding on these aspects. The appellant’s major complaints under s 18C appear to be first, his allegation of a material diminution in the value of the launch because of

delays and disputes in having it valued and sold, and secondly, his claim that he met costs on, and was affected by the respondent’s allegedly obstructive behaviour, in the High Court litigation with their neighbours over the home. As to the launch, however, as I understand the position, the appellant has had full use and enjoyment of the launch and it has been involved in part at least on an annual basis in activities for his business. As to the appellant’s claims over the home litigation in the High Court, Judge Burns found here that this litigation was embarked on by both parties and complaints of delay and obstruction went both ways. He concluded that he was not in a position to make a finding about that, and given there was nothing new placed before me on appeal on this aspect, I agree with Judge Burns’ conclusion. I can only reach the tentative conclusion therefore that the appellant has not done enough here to show, in terms of ss 18B and 18C of the Act, that he should receive from the respondent a specific amount by way of compensation for post separation contributions to, or material diminution in, the value of the relationship property.

[30] Nor can I say with any degree of certainty here that in the Family Court Judge Burns erred significantly in not providing something by way of compensation in favour of the appellant for the respondent’s general conduct.

[31] That is sufficient to dispose of this ground of appeal which is also dismissed.

[32] The appellant’s complaint here is that in the Family Court, Judge Burns did not deal with the issue of loans which had been made to Extend Marketing Limited by the parties, loans which would constitute relationship property.

[33] On this, as I understand her submissions, the respondent acknowledges that at separation there was a loan owing by her company Extend Marketing Limited to the parties, although she says the amount outstanding under this loan was only $22,837.

[34] The appellant however contends that subsequent to separation, an analysis carried out on the respondent’s computer showed that an additional loan had been made to Extend Marketing Limited bringing the total due to the parties to a figure of

[35] At paragraph [42] of his judgment dated 24 September 2013 Judge Burns noted that this loan of $32,836.98 made to Extend Marketing Limited in his view was in contention and he disallowed any loan in his calculations. On this he said at paragraph [42] in part:

On my analysis of the evidence this loan appears to have been assessed from the wife’s own computer and bank records. I am not satisfied that the level of proof provided establishes a loan. It would need good accounting evidence which is missing. There seemed to be an element of creative accounting.

[36] Whilst Judge Burns was entitled to take the view he did of this Extend Marketing Limited loan, what is clear from the respondent’s submissions advanced on the appeal, and her specific acknowledgment at [18] of her 10 June 2013 affidavit, is that actually a loan is outstanding from Extend Marketing Limited to the parties, although the amount owing under this loan is only $22,837.

[37] Given this aspect, I find therefore that there is an outstanding loan owing by Extend Marketing Limited, the respondent’s company, to the parties. This is effectively conceded here.

[38] As to the full extent of this loan, there is no dispute as to the $22,837 figure.

[39] The evidence relating to the additional $10,000 approximately is scanty to say the least and certainly insufficient to conclude that the total debt is indeed over

[40] I find therefore that there is an outstanding loan due from Extend Marketing Limited, the respondent’s company, to the parties of $22,837 and this needs to be taken into account in the final property distribution calculations between the parties.

[42] Next, the appellant contended that Judge Burns in the Family Court had not taken into account an earlier agreement reached between the parties that the

respondent would pay to the appellant $5000 as an adjustment for additional chattels she had taken from the home in an agreed distribution. This does seem to be the case, noting [33] of his 24 September 2013 decision where Judge Burns addressed this chattels issue and stated:

[33] I consider that the wife made an offer to pay the respondent (the husband) his declared value of chattels at $5000. This was made as a tongue and (sic) cheek offer because she considers that he had the majority of them. I do not put any weight on that offer and I do not think it was appropriately considered.

[43] Before me however, there was really little dispute between the parties over this $5000 adjustment. The respondent acknowledged and agreed she had more chattels than the appellant and that a $5000 adjustment payment should be made, factors that no doubt were not before Judge Burns when he made his earlier decision.

[44] I find therefore that the respondent is to pay to the appellant this $5000 chattels adjustment figure when a final property distribution is made.

[46] On 24 August 2012 Judge McHardy in the Family Court made a costs order of $750 against the respondent in favour of the appellant.

[47] As I understand the position this costs order was not appealed by the respondent.

[48] The costs under this order remain unpaid and nothing was put before me by the respondent to indicate why in any way this costs order was wrongly made and should not be paid by her.

[49] This $750 costs order against the respondent is outstanding, the costs themselves remain unpaid, and I confirm they are to be taken into account in the final property distribution between these parties.

[50] Insofar as this may have been an aspect of the appellant’s present appeal, he

[51] As I have noted above, the cross-appeal by the respondent concerns a contention that the Family Court erred first, in failing to include and value the appellant’s business interests in her favour, and secondly, a complaint that the appellant had consistently refused to provide information or discovery as to the status and value of those business interests.

[52] The businesses concerned, as I understand it, are broadly run under a number of companies: Spot X Cape to Cape Limited, Spot X Fishing Forecast Limited, Spot X Fishing Guide Limited and C.Swish Agencies.

[53] On this aspect, the appellant submits that the respondent’s cross-appeal has no merit. If allowed he says it would again give the respondent an opportunity to further prolong these proceedings which he complains has occurred on a regular basis throughout. The appellant notes that it is contrary to Principle 1N(d) of the Property (Relationships) Act 1976 which sets out as a matter to guide the achievement of the purpose of the Act:

(d) the principle that questions arising under this Act about relationship property should be resolved as inexpensively, simply, and speedily as is consistent with justice.

[54] So far as the respondent’s request for further information concerning these businesses are concerned, the appellant raises three contentions. First, he says that the respondent has acknowledged early in this proceeding that these businesses have no value, secondly that this has been confirmed by the joint accountant for the businesses Mr Whittington, and thirdly that in any event the Family Court provided the respondent with a range of opportunities to seek discovery of specific documentation and she simply failed to properly pursue these.

[55] As to these aspects, I note that in an affidavit of assets and liabilities dated

respondent noted that so far as Spot X Fishing Forecast Limited and the parties’

...think there is a residual value of this up to May 2007, possibly liabilities since that time. Only interests in Spot X income that was diverted into this without consent or consultation...

[56] It is also clear from the affidavit sworn 9 March 2012, of Mr Whittington the parties’ former joint accountant and accountant to all the family businesses, that in his view the appellant’s businesses had no value and in the case of one had simply not traded. Spot X Fishing Guide Limited had no cash investment by either party and it had a negative equity. Spot X Fishing Forecast Limited again had no cash investment and had never traded. And Spot X Cape to Cape Limited he noted was also owned by a family trust arranged by the parties well before separation.

[57] Finally, as late as 2013, the Family Court addressed this request by the respondent for further information and discovery of matters concerning the appellant’s businesses.

[58] On 22 February 2013 Judge Maude in the Family Court issued specific directions on this and at paragraph [4] of those directions stated:

Today I am going to give [...], who is now self represented, the opportunity to file a formal application for discovery in which she is to specifically set out each item that she seeks to be discovered and with relation to each item the reason for that. [...] may respond to that. I have indicated that I will deal with the matter in chambers and there is no opposition to that once the documentation is filed. When I deal with the matter in chambers the decisions that I will be making will be (a) whether to grant discovery and if so what; (b) if not, directing the matter to hearing.

[59] Then, at paragraph [5] of his directions Judge Maude went on to direct that the respondent was to have 21 days from 22 February 2013 to file her formal application for discovery with the appellant given 14 days to respond and then the matter to be dealt with and a decision given in chambers.

[60] Subsequent to that, a formal discovery application was filed by the respondent and the appellant responded to this by memorandum.

8 April 2013. In a minute he issued on that date Judge McHardy refused the application and stated:

I have considered each party’s positions and agree with Ms Kearns (counsel for the appellant). Sufficient opportunities and time have been accorded the applicant [...] to complete relevant discovery.

[62] He then set the substantive matter down for a two hour hearing. That hearing before Judge Burns took place on 14 June 2013 and resulted in his judgment of

[63] Later, these same disclosure and discovery issues were raised once again before Judge Burns. He heard these in a short cause hearing on 20 January 2014, and on 19 February 2014 Judge Burns issued a reserved judgment which specifically addressed questions of revisiting these disclosure and discovery issues raised by the respondent. In that considered judgment at paragraph [16] Judge Burns stated:

I am not prepared to revisit the discovery disclosure issue. This was the subject of a ruling by Judge McHardy. It was well before the hearing. I am bound by the decision made by a fellow Family Court Judge and cannot sit on appeal of prior ruling. I have no jurisdiction to be able to revisit a decision with respect to disclosure/discovery made prior to my involvement in the case. I decline therefore to make a discovery order as sought by the wife on the basis that the issue is closed and the hearing has proceeded and been dealt with...

[64] It is this aspect of Judge Burns’ 19 February 2014 judgment which is effectively the subject of the respondent’s cross-appeal here.

[65] As I have noted this entire dispute has a long, convoluted and unnecessarily complex history for what is essentially a relatively straight forward property dispute between these parties. As I have noted they were married for nearly 23 years and separated almost seven years ago. That their property issues have not been resolved to date on what is not an overly complex matter is more than a little surprising, and entirely regrettable. Matters must come to an end at some point.

[66] In my judgment the respondent has had more than enough opportunities to seek the additional information concerning the appellant’s business interests that she now claims she must have. For some time it seems that it was accepted by all parties that these businesses had little value and certainly the parties’ independent accountant Mr Whittington has provided affidavit evidence generally to this effect.

[67] Given a detailed analysis of the history of this whole matter, to some extent it is difficult to escape the conclusion suggested by counsel for the appellant that the respondent here wishes to drag matters out further for no good reason but simply to achieve more delay. But before me the respondent strongly disputed this. She claimed that she was seeking this further information in her words only in the general “interests of justice to ensure a fair result is achieved”. In my judgment it is difficult to accept that argument however, given that right from the outset counsel acting for the appellant indicated that the joint accountant had been instructed to make available to the respondent all information she required including with regard to the appellant’s businesses and no complaints or unmet demands appeared to result. Nearly some seven years later as I see the position it is not appropriate to make an

(c) In August 2011 it appears the respondent utilised an existing authority to obtain duplicate copies of bank statements held by the appellant from the date of separation (at a cost to the appellant of some

(d) Despite Mr Whittington, the parties joint accountant, in his affidavit in this proceeding confirming a range of matters including that the appellant’s businesses had little or no value, in the Family Court he was not required for cross-examination.

(e) On 27 August 2012 the appellant provided a written authority to counsel who was at that point acting for the respondent to enable her to obtain information directly in respect of the appellant’s bank accounts including a BLD cheque account and a C.Swish business cheque account. Then on 17 October 2012 the respondent wrote to counsel for the appellant seeking other extensive financial information. As I understand it, in response accounts for the following companies were provided:

(i) Spot X Fishing Guide Limited; (ii) Spot X Fishing Forecast Limited; (iii) Spot X Cape to Cape Limited;

(f) On several occasions the Family Court accepted that prior to separation it seemed to be the respondent who had access to and controlled the parties’ financial situation and further, that it was of the view that the companies operated by the appellant had negative equity or no residual value.

respondent and any suggested claim to the appellant’s business interests have been

appropriately dealt with and long closed. The respondent’s cross-appeal is without merit and it is dismissed.

[70] As to costs, the appellant’s appeal has succeeded in part and failed in part. Each party has therefore had some success. Costs on that appeal in my view should therefore lie where they fall. There is to be no order made as to costs on the appeal itself.

[71] So far as the respondent’s cross-appeal is concerned, this has been dismissed and in my view the appellant should be entitled to an award of costs on his successful opposition to this cross-appeal.

[72] Costs therefore are now awarded to the appellant on his successful opposition to the respondent’s cross-appeal calculated on a category 2B basis together with disbursements (if any) on that cross-appeal as approved by the Registrar.

BETWEEN	BLD Appellant
AND	ALD Respondent

High Court of New Zealand Decisions

BLD v ALD [2014] NZHC 579 (26 March 2014)