Alalaakkola v Palmer - [2021] NZHC 3101

IN THE HIGH COURT OF NEW ZEALAND BLENHEIM REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WAIHARAKEKE ROHE

CIV-2020-406-5

[2021] NZHC 3101

BETWEEN
SIRPA ELISE ALALAAKKOLA

Applicant

AND

PAUL ANTHONY PALMER

Respondent

Hearing: On the Papers

Counsel:

C L Elliott QC for Applicant B A Fletcher for Respondent

Judgment:

17 November 2021

JUDGMENT OF ISAC J

[Leave to Appeal and Costs]

Introduction

[1] Ms Alalaakkola applies for leave to appeal a decision of the High Court1 determining an appeal from the Family Court.2 There is also a question of costs.

[2] I have concluded that leave should be granted on the question of law outlined at [17]. I have also awarded Mr Palmer costs on a 2B basis.

Background

[3] For the purposes of this application, only a brief summary of the proceeding is required.

1 Palmer v Alalaakkola [2021] NZHC 2330.
2 Alalaakkola v Palmer FAM-2017-006-00016, 10 February 2020; Alalaakkola v Palmer [2020] NZFC 1635. It is the second decision that determined the issue of copyright in the artworks and occupational rent.

ALALAAKKOLA v PALMER [2021] NZHC 3101 [17 November 2021]

[4] Ms Alalaakkola is a painter. During her 20-year marriage to Mr Palmer she created a number of original works. On separation an issue arose as to the status of copyright in the paintings: did the copyright amount to relationship property? The Family Court found copyright in the artworks was Ms Alalaakkola’s separate property. Mr Palmer appealed that finding to this Court, as well as an issue relating to occupation rent which is not relevant to this application.

[5] In a judgment delivered on 7 September of this year I allowed Mr Palmer’s appeal in part.3 I found that the copyright in the paintings was relationship property. In summary, my reasons for this conclusion were:

(a)Copyright is a proprietary right, and the definition of property in s 2 of the Property (Relationships) Act 1976, in particular the phrase “any other right or interest” at s 2(e), captures copyright in artworks;

(b)There is no indication in either the Copyright Act or the Property (Relationships) Act that s 16 of the Copyright Act — which effectively vests the exclusive right to copy the work in its author — was intended to remove intellectual property from the reach of the Property (Relationships) Act; and

(c)At the point Ms Alalaakkola put her skill towards the production of an artwork during the course of the relationship, the subsequent copyright in that work became relationship property, as it came into existence during the relationship.

[6] In light of those findings, I found it was not open for the Family Court Judge to exercise a discretion on whether or not to transfer an interest in the copyright to Mr Palmer, or indeed to allow an unequal division of the copyright. The equal sharing presumption may only be displaced in extraordinary circumstances that make equal sharing repugnant to justice. I did not consider that to be the case here. I therefore remitted this issue back…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] NZHC 3101
Decision Date: 17 November 2021

CaseChat Overview and Summary

In the High Court of New Zealand, the case of Alalaakkola v Palmer involves an application for leave to appeal a decision regarding the copyright of artworks created during a marriage. The central legal issue is whether copyright in artistic works produced during the marriage constitutes "property" under the Property (Relationships) Act and, if so, whether it should be classified as relationship property or separate property. The Family Court initially ruled that the copyright in the artworks was separate property, but the High Court reversed this decision, finding that the copyright in the artworks was relationship property. The applicant, Ms Alalaakkola, seeks leave to appeal to the Court of Appeal on this legal issue.

The court carefully considered the grounds of appeal presented by the applicant, focusing on whether the appeal raises a question of law of sufficient importance to warrant a second appeal. The court concluded that the appeal does indeed raise such a question, particularly concerning the interaction between the Property (Relationships) Act and the Copyright Act, an issue that has not been judicially considered before in New Zealand. The court determined that the question for the Court of Appeal should be framed broadly enough to encompass the central legal issue while avoiding overly restrictive or factually specific questions. Thus, the court granted leave to appeal on the question of whether copyright is "property" for the purposes of the Property (Relationships) Act and, if so, how it should be classified under the Act.

In terms of costs, the court awarded costs to Mr Palmer on a 2B basis. The court found that Ms Alalaakkola, who chose not to participate in the High Court proceedings, should not be exempt from costs simply because she did not engage in the appeal. The court emphasized that the determination of costs should be both predictable and expeditious, and it saw no reason to deviate from the usual principle that the party who fails in a proceeding should pay the costs of the party who succeeds.

Orders