Alloway v Bond
[2016] NZHC 2744
•16 November 2016
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2015-404-002831 [2016] NZHC 2744
BETWEEN ROBERT MATTHEW ALLOWAY
Appellant
AND
JANE BOND Respondent
Hearing: 8 November 2016 Appearances:
J Hosking for the Appellant
V Crawshaw for the RespondentJudgment:
16 November 2016
JUDGMENT OF HINTON J
This judgment was delivered by me on 16 November 2016 at 2.l5 pm pursuant to Rule 11.5 of the High Court Rules
……………………………………………………………………
Registrar/Deputy Registrar
Counsel/Solicitors:
Anderson Creagh Lai, Auckland
J Hosking, Barrister, Auckland
V Crawshaw, Barrister, Auckland
ROBERT MATTHEW ALLOWAY v JANE BOND [2016] NZHC 2744 [16 November 2016]
[1] The issue here is whether further evidence of Mr Alloway’s financial position, including financial statements of a number of entities, should be allowed to be adduced on his maintenance appeal.
A brief background
[2] The parties were in a de facto relationship of three to three-and-a-half years, ending in February 2013. They had two children during that time, a daughter born in May 2010 and a son born in November 2012.
[3] By a decision of Judge Burns dated 28 October 2015, Mr Alloway was ordered to pay maintenance to Ms Bond in the sum of $6,500 per month, until November 2018.
[4] Mr Alloway has appealed Judge Burns’ decision. He raises six grounds of appeal. His counsel, Ms Hosking, says the relevant grounds of appeal for present purposes, are: that the Judge failed to take into account income, accommodation and capital gains available to Ms Bond through her trust; he placed weight on the shared lifestyle of the parties when that lifestyle was no longer available to Mr Alloway, having been made redundant; and he erred as to Mr Alloway’s means, in particular after his significant change in employment and the reputational damage arising out of the fall-out from Allied Farmers Ltd/Hanover Finance.
[5] Mr Alloway has filed three affidavits that are in issue: his own affidavit dated 5 September 2016; an affidavit of Mr Houghton, chartered accountant dated
6 September 2016, and a further affidavit by Mr Alloway dated 17 October 2016 (the three affidavits). The last of these affidavits was largely in reply to an affidavit filed by Ms Bond, in support of her opposition to adducing further evidence.
[6] Ms Crawshaw, for Ms Bond, accepts that evidence which is broadly of an updating nature can be adduced, including updating evidence as to any third-party employment, or attempts to obtain such. I went through the three affidavits with her to be clear as to what was agreed. Taking a reasonably liberal approach, the end result is that the contents of paragraphs 6, 10-14, 20-23, 24 (from “I am having interviews …”) and 25, of Mr Alloway’s affidavit dated 5 September 2016, can all be
adduced without opposition. Paragraphs 12-15 of Mr Alloway’s affidavit dated
17 October 2016 can also be adduced without opposition.
[7] The balance of Mr Alloway’s two affidavits, and the entirety of Mr Houghton’s affidavit are in contention. That evidence relates primarily to Mr Alloway’s financial position. In a few instances, the content is simply repetitive.
[8] There is also updating evidence of the value of properties belonging to Ms Bond, and/or entities under her control. This is addressed at, for example, paragraph 16 of Mr Alloway’s 5 September 2016 affidavit, where he sets out the
2014 CVs of the six relevant properties. I proposed to Ms Crawshaw, and she accepts, that updating evidence as to these properties should be able to be adduced. Providing Mr Alloway meets (upfront), the cost of updating valuations from the registered valuer or valuers who previously valued these properties on behalf of Ms Bond, those valuations can be adduced. That must be achievable at relatively low cost. The valuer is to be specifically instructed to take a neutral position in determining the values. If for any reason, other than non-payment of the costs, that evidence cannot be obtained, then the evidence of the CVs at paragraph 16 and of the approximate percentage increase in values at paragraph 18 of Mr Alloway’s affidavit of 5 September 2016, can be adduced.
Test for granting leave
[9] Rule 20.16 of the High Court Rules relevantly provides:
20.16 Further evidence
…
(2) In all other cases, a party to an appeal may adduce further evidence only with the leave of the court.
(3) The court may grant leave only if there are special reasons for hearing the evidence. An example of a special reason is that the evidence relates to matters that have arisen after the date of the decision appealed against and that are or may be relevant to the determination of the appeal.
(4) Further evidence under this rule must be given by affidavit, unless the court otherwise directs.
[10] The general test is that evidence must be fresh, cogent and likely to be material.1
[11] The main focus, as is apparent from the example of a “special reason”, provided in r 20.16(3), is that the evidence be fresh, i.e. it should be evidence that has arisen after the date of the decision appealed against. The courts have said that evidence is not fresh, if it could with reasonable diligence have been produced at trial.2
[12] While it is clearly not the end of the enquiry, if the evidence is not fresh, there would generally need to be exceptional circumstances, and the grounds compelling, for it still to be admitted on appeal. It will also need to be credible and cogent.3
[13] An example of a case where evidence was not fresh, but was allowed in on appeal, is Koni v Koni.4 An accountant represented himself in relationship property proceedings. He asserted that a post-separation property purchase was made with non-relationship property, but failed to provide proof. The Family Court found the proceeds of sale of the property were relationship property. Mr Koni was allowed to adduce (apparently uncontroversial) documentary evidence on the appeal on the basis there was a high risk of serious injustice otherwise, and it seems the appeal on that point was then allowed. There was also other evidence let in, mainly on post-
separation contributions, and the matter was remitted back to the Family Court on the agreed basis that it would not be feasible for the High Court to attempt to determine the remaining issues on appeal if further evidence were adduced.
[14] I note that Koni was a case under the Property (Relationships) Act 1976 and s 39B(3) permits the High Court to receive further evidence if it thinks that the
interests of justice require. The Court of Appeal in Hodgson v Hodgson said, in the
1 See Andrew Beck (ed) McGechan on Procedure (looseleaf ed, Brookers) at [HCR 20.16.02], citing Telecom Corp of NZ Ltd v CC [1991] 2 NZLR 557 (CA).
2 Rae v International Insurance Brokers [1998] 3 NZLR 190 (CA) at 192.
3 Above n 2, at 193.
4 Koni v Koni HC Auckland CIV-2009-404-77, 16 April 2010.
particular context of evidence that is not fresh, there is no practical difference between the interests of justice and special reasons.5
Are there special reasons to let in the “financial information”?
[15] Some of the evidence is new, in the sense that it has been collated and reduced into accounting format since the Family Court hearing.
[16] However, could the evidence, with reasonable diligence, have been produced at trial?
[17] A major stumbling block for Mr Alloway is that, unlike Mr Koni, he positively declined to provide the level of financial information that would have enabled the Family Court to assess his overall financial position. While it was asserted before me that Mr Alloway could not provide further information because of the cost, he also gave other reasons under cross-examination in the Family Court. He said, for example, that he was not prepared to provide bank statements of Carbon Group Ltd, because they had “nothing to do with the proceedings”. They were provided on the last day of the hearing, and apparently showed personal expenditure was being incurred through the companies. Financial statements for Carbon Group Ltd are amongst the documents now sought to be adduced.
[18] Faced with a situation where extensive information requests had been made by Ms Bond, of which a significant number were still outstanding, Ms Bond did as parties are generally advised to do in that situation, which is to press on and ask the Court to infer that it cannot rely on what the other party says. Judge Burns drew exactly that conclusion. Furthermore, he did not just rely on the non-provision of information. At [50], for example, Judge Burns said there were a number of major factors that caused him to seriously question the respondent’s evidence and put little weight on it. Judge Burns listed these factors as follows:
(i) there are a number of significant contradictions in the respondent’s case, e.g. he says that he is impoverished and facing bankruptcy but discloses to the Court significant overseas travel;
5 Hodgson v Hodgson [2015] NZCA 404 at [45]. For the leading decision on s 39B, see Nation v
Nation [2005] 3 NZLR 46 (CA).
(ii) he says his income is very modest but has had the confidence to get married and have another child while that position has been in place. Either he has been careless with other people’s lives and incurring further responsibility beyond the children of this relationship or he has greater confidence in his ability to make an income than disclosed;
(iii) he has failed in a significant way in complying with his disclosure/discovery requirements and to present accounts on the courtroom steps is unsatisfactory. I draw an adverse inference from this tactical approach;
(iv) he says that he is not able to afford to pay for a chartered accountant or the arrears incurred by the chartered accountant so that the latest set of accounts are available but yet acknowledged in evidence that he had paid for advice to prevent a tax prosecution. He appears to be able to prioritise expenditure when it suits him but not otherwise;
(v) he displayed in court a contentious attitude towards the applicant and a dismissive approach to his obligations to support the person providing primary care. He stated that he regarded her as a gold digger and she had not pulled her weight. This attitude coloured his approach to his obligations;
(vi) his income from 2008-2012 averaged in excess of $400,000.00 per annum. It is likely that if he wanted, this level of income could continue. He has the ability and a proven track record. I concluded he has manipulated his affairs to make it look as bad as possible.
[19] In those circumstances, it is difficult to see how full financial information can then be adduced on an appeal. That would necessarily involve at least full enquiry into that evidence by counsel and an accounting adviser for Ms Bond, and would very likely involve evidence in reply and quite possibly, cross-examination. Ms Hosking acknowledged, as she had to, that if the evidence were let in, the matter would most likely have to be referred back to the Family Court. Given the failure to provide full disclosure formed an element of a credibility finding, Mr Alloway would presumably be asking for that finding to be revisited. In effect, the introduction of the evidence in this case would lead to a retrial. Palpably, that would be unfair to the respondent. It would also seriously undermine due court process.
[20] This is not a situation, as in Koni, where, at least in respect of the main issue, there were apparently uncontestable, straight-forward documents to be produced. Mr Houghton annexes (summarised in broad terms) a “summary of financial performance and financial position of Mr Alloway and associated entities for years
ended 31 March 2010 to 31 March 2015”; draft statements of financial position for the Alloway Rural Investment Trust for the years 2010 to 2015; draft statements of financial position of the Kakaramea Property Trust for the years 2011 and 2012 to
2015; draft balance sheet and profit and loss statement for Plastico Ltd for the years
2013 to 2015; financial statements for Carbon Group Ltd for the 2015 year, and statement of profit and loss for Carbon Group Ltd for the 2015 year; and draft statement of financial position for Alloway Family Trust for the years 2010 to 2015.
[21] Further, it is (necessarily) not just a matter of producing all of these accounts. Mr Houghton’s affidavit opens with five pages of commentary, parts of which are not particularly easy to follow.
[22] The various financial statements are mainly in draft. While I was advised by counsel, that the statements can probably be provided in final form, that was not readily apparent from Mr Houghton’s affidavit. He says he is satisfied that the material he has prepared is “a fair representation of Rob’s true financial position for the 2010-2015 years”, and that he and his staff “have spent an enormous amount of time collating material to get the accounts finalised”, but he also refers to the lack of records that have been kept, the difficulty in compiling information to produce credible financial statements and the fact he has had to rely in some cases on management accounts and on Mr Alloway’s personal bank statements for the period March 2010 to March 2015. The financial statements have also all been prepared some years after the events. The evidence cannot, in its current state, be described as having a high level of cogency.
[23] I appreciate that Mr Alloway says the financial evidence could not have been produced at the hearing, because he has only now been able to pay his accountant to carry out what has obviously been a significant task, of ascertaining the financial position of himself and all associated entities. While I accept that is probably the primary reason why the documentation has not been prepared, there appear to be other reasons, as alluded to by Mr Houghton at paragraph 3 of his affidavit. More importantly, it is not just the draft accounts that were not provided prior to the Family Court hearing, but source documents, including bank statements. Cost was not stopping production of these source documents. They were not provided,
(or provided too late) because Mr Alloway did not consider he had to, including taking into account the interests of third parties.
[24] Judge Burns expressly addressed, at [50](iv)], the question of whether Mr Alloway could have obtained the accounting information earlier, as I have already recited. I am not in a position to go behind his conclusion. I note that the cost of accounting work for the tax prosecution appears to have been relatively minimal, but it is clear that there were other sums available to Mr Alloway from time to time. More important, is the point that Mr Alloway could have provided full source information, which may itself have been sufficient to demonstrate his own case, particularly when read with the earlier asset position statements that were apparently before the Court.
[25] Ms Hosking submits that there will be a risk of serious injustice if the leave application is not allowed. She cites Koni again, in support of that submission. She says that, if as a result of the financial information not being made available, the judgment is upheld on appeal, enforcement of it will mean the appellant’s bankruptcy. I accept that potentially serious implications for a party will be relevant on an application for leave to adduce, and that they were in Koni. However, in other respects, Koni is distinguishable, particularly because there was no deliberate obstruction of the information, but rather apparent oversight, and, as I have said, the key information at issue consisted of documents that were straight-forward and not contestable. This is a very different case.
[26] Furthermore, the assertion of pending bankruptcy was also made by Mr Alloway in the Family Court, so the potential seriousness of the issue was known to him at that point. Given that level of concern on his part, instead of opposing introduction of financial evidence, he should have been concerned to have as much as possible before the Court. I therefore put little weight on this point.
[27] I am conscious that Mr Alloway was self-represented, but that cannot be a factor on its own, nor am I persuaded that it is particularly material in any event. There is not one rule for self-represented parties and another rule for others. I see no reason, in particular, why unrepresented, capable business people, such as
Mr Alloway, should be granted the sort of indulgence sought here, per se. For that reason, I would have been unlikely to let in that part of the evidence in Koni, that did lead to referral back on two issues, at least not without a significant indemnity costs order.
[28] I note Ms Crawshaw’s submission that Mr Alloway presumably did appreciate the relevance of his full financial position (including capital), as he was himself relying, in the Family Court, on Ms Bond’s capital position.
[29] I conclude that the evidence at issue is not evidence relating to matters that have arisen after the date of the decision, and there are not otherwise special reasons for hearing the evidence. I am therefore not prepared to grant leave to adduce Mr Houghton’s affidavit, nor those parts of Mr Alloway’s two affidavits that are still under contest.
Conclusion
[30] Leave to adduce the three affidavits is declined. The three affidavits are to be removed from the file. The appellant is given leave to adduce all of the evidence referred to earlier at [6] and [8]. That evidence is to be filed and served by Friday
16 December 2016.
[31] The respondent’s affidavit in reply is also to be removed. She has leave to file an affidavit in reply to the permitted evidence within 14 days of the date of service.
[32] The respondent is entitled to costs on a 2B basis. Such costs are to be paid by
Friday 16 December 2016.
------------------------------------------------ Hinton J
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