Ansin v Ramage

[2023] NZHC 1989

NOTE: PURSUANT TO S 35A OF THE PROPERTY (RELATIONSHIPS) ACT 1976, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B,

11C AND 11D OF THE FAMILY COURT ACT 1980. FOR FURTHER INFORMATION, PLEASE SEE

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-2358

[2023] NZHC 1989

UNDER

the Property (Relationships) Act 1976

IN THE MATTER

of an appeal under s 39 of the Property (Relationships) Act 1976

BETWEEN

JACQUELINE ANNE ANSIN

Appellant

AND

JON MORGAN RAMAGE

Respondent

Hearing:	22 June 2023
Appearances:	B Snedden for the Appellant J Hawker for the Respondent
Judgment:	27 July 2023

JUDGMENT OF WOOLFORD J

This judgment was delivered by me on Thursday, 27 July 2023 at 3:30 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:Martelli McKegg (J Lethbridge), Auckland Haigh Lyon Lawyers Ltd (J Hawker), Auckland

Counsel:            B Snedden, Auckland

ANSIN v RAMAGE [2023] NZHC 1989 [27 July 2023]

[1]    Jacqueline Anne Ansin appeals against a decision of Judge A M Manuel in the Family Court at Auckland dated 3 November 2022.1 The Judge ordered the sale of two of the parties’ major assets, being their former family home at 1 Ventnor Road, Remuera, Auckland (occupied by the appellant)  and  a  piece  of  bare  land  at  425D Boat Harbour Road, Coromandel (in the effective possession of the respondent).

Family Court decision

[2]    At the outset of the decision, Judge Manuel noted that in the Property (Relationships) Act 1976 proceedings commenced in 2021 by the respondent, he sought an interim order for sale of the Ventnor Road property (Ventnor). Ms Ansin then made a cross-application for the sale of the Boat Harbour Road property (Boat Harbour). The Judge summarised the position of the parties as follows:

[4] Mr Ramage wants to retain Boat Harbour in the parties’ property  division and is opposing an order for sale. Ms Ansin wants to retain Ventnor and is opposed to a sale of that property. Neither party can afford to pay the expenses on the property they wish to retain.

[3]    The Judge then listed the assets and liabilities available for division. The assets were:

(a)Lily & Louis Ltd (Lily & Louis), a public relations company where both parties had worked. It had been agreed that the appellant would retain the company and the respondent would eventually leave. No valuation was available.

(b)Ventnor property — two different valuations ($3.2 million and

$4.25 million) were produced. The Judge identified issues with both valuations.

(c)Boat Harbour property — a valuation for $975,000 was produced by Mr Ramage. The Judge acknowledged that there was possibly some extra value for forestry rights.

1      Ramage v Ansin [2022] NZFC 11285.

(d)LilyLumiere Ltd (the LilyLumiere funds) — the proceeds of sale for a commercial property. While the funds were under the control of the appellant, they diminished from $1.2 million to $634,000. These funds were paid into Court shortly after the 5 August 2022 hearing.

(e)Sundry items — including household chattels, jewellery, a handbag collection, artwork, a wine collection and the proceeds of the parties’ bank accounts.

(f)The respondent’s KiwiSaver balance of $118,000.

[4]The liabilities were:

(a)A BNZ mortgage of $1.7 million and a BNZ term loan of $136,532.

(b)The respondent’s GEM Visa and Amex debts amount to $21,226.

(c)The appellant’s GEM Visa and Amex debts amounting to $19,823.

(d)A BMW Financial Services debt of $7,798.

[5]    The Judge then noted the possibility of a claim against the respondent concerning his exit from Lily & Louis. The appellant alleged that the respondent had actively solicited Lily & Louis clients on behalf of his new firm, PR Partners Ltd (PR Partners). At the time, the appellant had done nothing to advance or quantify this claim.

[6]    A key finding of the Judge was that neither party was in a position to meet the mortgage and other expenses on the property they each wished to retain. That was the reason why the LilyLumiere funds had been diminished — they were needed to pay mortgages and other outgoings, as well as accountants and lawyers to advance the relationship property proceedings.

[7]    The Judge said that on the available evidence, if the appellant retained the Ventnor property it would be most unlikely that she would be able to buy the

respondent out, and meanwhile she could not afford to service the outgoings on the property. Nor was the respondent in a position to pay the outgoings associated with the Boat Harbour property.

[8]    The Judge then set out calculations by the respondent’s lawyer and considered various options for the distribution of property which would alter the figures. She concluded that if the situation had continued without an order being made for the LilyLumiere funds to be paid into Court, the funds would have eventually been exhausted and there would have been a forced sale of the properties.

[9]After reviewing the legal principles, the Judge stated:

[32]      Here, there is no identifiable disadvantage to either party in selling both properties with both of them being granted the opportunity to acquire the properties they desire if they are able to do so. If the properties are not sold the parties will continue to be disadvantaged by the ongoing dissipation of relationship property, a potential reduction in their values if the market declines (which it clearly has been) and an inability to access any capital and re-enter the housing market.

[33]      Despite her assertions to the contrary, Ms Ansin has not prepared any current evidence to show she is in a position to acquire Ventnor as part of her share of the relationship property. Without using the LilyLumiere funds, neither of them are in a position to pay the outgoings on the properties they are occupying nor fund the costs of progressing these proceedings.

[34]      Having regard to the purpose and principles of the Act, I direct an order for sale of both the Ventnor and Boat Harbour properties, with the parties to file a joint memorandum setting out the terms within seven days or, if they are unable to reach agreement, separate memoranda.

Principles on appeal

[10]   This  is  an appeal  against  a decision of a Family Court Judge made under    s 25(4) of the Property (Relationships) Act 1976 (the Act). Section 25(4) provides the Court with a broad power to make interim orders for the sale of relationship property “if it considers it appropriate in the circumstances”. Although there is some contradictory authority, counsel accepts there is a right of appeal to the High Court against such orders pursuant to s 39 of the Act.

[11]   On any appeal under s 39, the appellant bears the onus of satisfying the Court that the decision under appeal was wrong.2 When the appeal is against the exercise of a discretion, the appeal is not by way of rehearing. Rather, the principles set out May v May apply,3 which require the appellate court not to interfere unless the Judge acted on a wrong principle, failed to take a relevant matter into account, took account of an irrelevant matter or was otherwise plainly wrong. If not an exercise of discretion, but a matter of judgment, a different approach is required in accordance with Austin, Nichols & Co Inc v Stichting Lodestar,4 where Elias J stated:

[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. In such circumstances it is an error for the High Court to defer to the lower Court’s assessment of the acceptability and weight to be accorded to the evidence, rather than forming its own opinion.

[12]   Counsel for the respondent argued that the sale order was the exercise of a discretion. Counsel for the appellant argued otherwise. There is, however, no simple test of universal application to determine whether the making of a sale order is the exercise of discretion or a matter of judgment and the distinction may, in any event, be seen as conceptionally blurred. Whichever pathway is chosen, the key question is whether the decision appealed from is wrong.

Grounds of appeal

[13]The notice of appeal lists the grounds of appeal as:

(a)The Family Court erred in making an order for the sale of the Ventnor property.

(b)The Family Court erred in failing to determine the s 43 (and variation) application and s 38 application.

2      Williams v Scott [2014] NZHC 2547, [2015] NZFLR 355 at [40]–[45].

3      May v May (1982) 1 NZFLR 165 (CA).

4      Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 (footnote omitted).

(c)The Family Court did not consider all the relevant factors for and against sale of the Ventnor property.

(d)The Family Court erred in failing to take into account that the appellant had not had an opportunity to file affidavits in response to the respondent’s affidavit of 22 March 2022.

(e)The Family Court erred by placing disproportionate weight on the appellant not having advanced or quantified her claim in relation to the compensation she seeks from the respondent as a result of his establishment of a rival public relations company after separation. This is a key issue within the substantive proceedings which were put on hold pending determination of the interlocutory matters. The appellant’s claim has been unable to be quantified to date because the shares in Lily & Louis have been unable to be valued and this formed the basis of a s 38 interlocutory application made orally at the hearing on 5 August 2022 by the respondent to appoint a financial expert to complete the Lily & Louis financial statements, without which no claims can be further advanced.

(f)The Family Court erred in failing to consider the impact on the appellant’s ability to acquire the Ventnor property taking into account the presently unknown quantum of the appellant’s claim in respect of Lily & Louis.

(g)The Family Court erred by placing disproportionate weight on the parties’ respective inability to meet the mortgage and other expenses on the property they respectively sought to retain. Whilst the parties have relied on the application of the LilyLumiere funds to pay the two mortgages since separation, the appellant’s position is that upon resolution of the substantive relationship property matters, she anticipates being able to do so.

(h)The Family Court erred in failing to place sufficient weight on the appellant’s evidence of her lending capability as at December 2020 and her claim for compensation from the respondent in respect of the alleged material diminishment of the value of Lily & Louis.

(i)The Family Court erred by adopting values for items of property for which the status and value of such property are in dispute in the substantive proceedings including the apportionment of the value of the LilyLumiere funds, the Stonyridge Larose wine, the BNZ mortgage account and Lily & Louis.

(j)The Family Court erred in failing to recognise the identifiable disadvantage to the appellant in selling the Ventnor property given the appellant does not have the opportunity to acquire the property without determination of the substantive matters.

(k)The Family Court erred in dismissing the appellant’s claim that she had concluded an agreement with the respondent when the evidence was incomplete.

Appellant’s submissions

[14]   Counsel for the appellant (who was not counsel who drafted the notice of appeal) explained that the grounds of appeal (a), (c), and (e)–(j) were all aspects of the same basic proposition that the Judge should not have ordered the sale of the major relationship property asset, the Ventnor property, before resolving major substantive claims about other aspects of relationship property.

[15]   He submitted that the Judge was wrong to determine that the appellant would be most unlikely to be able to afford to buy the respondent out of the Ventnor property when the parties’ debt levels may be quite different by the time of a substantive hearing. The value of the Ventnor property should be determined at the date of hearing and the appellant would not know until then if she can retain it. He also submitted that there was no prejudice to the respondent if an order for sale of the Ventnor property was not made now.

[16]   Counsel explained that there was no appeal against the order for sale of the Boat Harbour property valued at $975,000. If it did sell for that sum, then it could be applied to the BNZ mortgage and term loan totalling $1,722,105.89, which were secured against both the Ventnor property and the Boat Harbour property. That would reduce the parties’ indebtedness to the BNZ to $747,105.89. This would also lead to a substantive reduction of the current monthly payments of approximately $16,000 to the BNZ.

[17]   Counsel noted that apart from the Ventnor and Boat Harbour properties, there was a third source of capital — the sum of $634,670.87 paid into Court on 8 August 2022 on the direction of the Family Court. This was the sum that remained of the net sale proceeds of $1,244,33647 realised from the sale of a commercial property by LilyLumiere on 24 November 2020.

[18]   I was advised by counsel that the sum held by the Court was now $430,000 with the sum of $46,000 being held by the solicitors acting for the respondent in order to pay the mortgage over both properties and other joint liabilities over the next little while.

[19]   Counsel is critical of the Judge referring to this money as being “frittered away” or “eaten away”, when, with the resignation of the respondent, the appellant became the sole director of LilyLumiere and she was entitled to use the funds for the payment of debts and liabilities relating to relationship property. Counsel submits that this characterisation was wrong and affected the Judge’s reasoning. Counsel took me to the documentation which included a schedule prepared by the appellant which, he said, demonstrated that the LilyLumiere funds were either disbursed with the consent of the respondent or used for the payment of joint liabilities.

[20]   Counsel is also critical of the Judge’s comments that the appellant had done nothing to advance her claims concerning the respondent’s exit from Lily & Louis since her affidavit of March 2022, and that it was too soon to say whether she would be successful with the claim. Counsel asserted there was a “decent argument” relating to 12 clients who had left Lily & Louis for PR Partners.

[21]   As to the three remaining grounds of appeal, counsel acknowledged they were weaker points or else fell away. In the end, counsel did not advance them.

Discussion

[22]   Whatever test is applied, the appellant has not shown the Judge to have been wrong to have made the order for sale of the Ventnor property. It is also a decision with which I agree.

[23]   First, s 25(4) does not restrict the categories of relationship property that can be the subject of an interim sale order. It affords a broad power “if it considers it appropriate in the circumstances”.

[24]   Second, the appellant does not wish to sell the Ventnor property because she is emotionally attached to it. That is not a reason for delay. The appellant has not advanced any calculations to suggest that the parties would be financially advantaged if the property was retained rather than sold. To the contrary, the respondent has provided calculations to show that the parties’ financial circumstances will continue to deteriorate if the Ventnor property is not sold. The appellant acknowledges she cannot afford to service the outgoings on the property.

[25]The appellant states:

It is imperative that the LilyLumiere funds are applied until relationship property matters are resolved in order to preserve our relationship property assets to avoid a mortgagee sale of both [the respondent’s] and my jointly owned properties …. I cannot afford to personally pay these liabilities without the application of the LilyLumiere funds and [the respondent] has refused to pay.

[26]   Third, it was open to the Judge to make the finding that it was most unlikely that the appellant would be able to afford to buy the respondent out. The appellant has a valuation of $3.2 million for the Ventnor property. If the Boat Harbour property is sold for $975,000 and the proceeds of sale used to reduce the indebtedness on the Ventnor property, the indebtedness to the BNZ would reduce to $747,105.89. The net equity in the property would then be $2,452,894.11. To retain the property the appellant would have to make an equalising payment of $1,226,447.06 to the

respondent and refinance the existing mortgage. This calculation leaves aside other relationship property such as the respondent’s KiwiSaver account and the inchoate claim by the appellant over the transfer of clients.

[27]   Fourth, the terms of an order for sale of the Ventnor property will enable the appellant to purchase the property at market value if, contrary to the Judge’s finding, she is able to purchase the property. The appellant would be able to do so by making an offer along with other members of the public.

[28]   Fifth, the sale of the Ventnor property would clear all outstanding mortgage liabilities and provide a surplus of funds which could be held to cover all other claims the parties make against each other as well as provide a cash distribution to the parties.

[29]   Lastly, the order for sale of the Ventnor property is consistent with the purposes and principles of the Act, in particular, the principle that questions about relationship property should be resolved as inexpensively, simply, and speedily as is consistent with justice.

Result

[30]   The parties’ financial circumstances will continue to deteriorate if the Ventnor property is not sold. The Judge was not wrong to order the sale of the property. The appeal is dismissed.

Costs

[31]   Costs should follow the event. If the parties cannot agree, counsel are to file memoranda of no more than five pages by 31 July 2023 and I will make a decision as to costs on the papers.

Woolford J