BETWEEN EDWIN MICHAEL BATE Appellant AND EMMA KATE BATE Respondent - [2023] NZHC 3060

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-001945

[2023] NZHC 3060

BETWEEN
EDWIN MICHAEL BATE

Appellant

AND

EMMA KATE BATE

Respondent

Hearing: 22 March 2023

Counsel:

R P Sutton for Appellant

G M Sandelin and A P Pearce for Respondent

Judgment:

6 July 2023

Memoranda of Counsel:
Reasons:

10 and 16 August 2023

31 October 2023

REASONS JUDGMENT OF HINTON J

This judgment was delivered by me on 31 October 2023 at 4.45 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date: ………………………….

Counsel/Solicitors:
R P Sutton, Hamilton
G M Sandelin, Auckland Holland Beckett Law

BATE v BATE [2023] NZHC 3060 [31 October 2023]

Introduction

[1] Mr Bate appealed an interim spousal maintenance decision of Judge Ginnen delivered on 11 September 2022 in the Family Court at Manukau (the interim maintenance decision).1

[2] The appeal raises the interesting question of when spousal maintenance should include legal and accounting fees for ongoing disputes between the parties.

[3] On 6 July 2023, I delivered a results judgment allowing the appeal.2 The interim maintenance award was reduced from $1,682 to $582 per week after deducting a sum of $1,100, being the approximate sum included on account of Mrs Bate’s legal and accounting fees. This was on the basis that 50 per cent of the proceeds of sale of the parties’ rental property (approximately $610,000), or such lesser amount as Mrs Bate requested, be paid to her forthwith by way of an interim distribution, and that the balance of the sale proceeds be held on interest-bearing deposit pending agreement or order of the Court. No order was made as to costs and any costs order made in the Family Court was set aside.

[4]These are my reasons.

Background

[5] Mr and Mrs Bate were married for approximately 20 years, separating on 22 July 2020. They have three children now aged between 15 and 20. The oldest is living away from home at university.

[6]Their main assets at separation included:

(a)The family home, worth $1.5–2 million according to Mrs Bate or
$2.2 million (plus) according to Mr Bate.

1 Bate v Bate [2022] NZFC 8276.
2 Bate v Bate [2023] NZHC 1752.

(b)A sum of approximately $1.23 million being the net proceeds of sale of a rental property owned by the parties, sold since separation. That sum was on interest-bearing deposit at the time of the hearing of this appeal.

(c)Mr Bate’s interest in a small legal practice in a provincial town. The value of Mr Bate’s interest in the practice is yet to be ascertained but, on the information presently before the Court, it appears unlikely to be significant. His current account was in credit at separation in a sum of under $200,000.

[7] The parties owe about $340,000 to the Remus Jems 3 Trust. I refer to this as the Bate Seniors Trust as it was settled by Mr Bate’s parents with property accumulated by them and…

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: [2023] NZHC 3060
Decision Date: 6 July 2023

CaseChat Overview and Summary

Edwin Michael Bate appeals against an interim spousal maintenance decision made by Judge Ginnen in the Family Court on 11 September 2022. The appeal raises the question of when spousal maintenance should include legal and accounting fees for ongoing disputes between the parties. On 6 July 2023, Hinton J allowed the appeal, reducing the interim maintenance award from $1,682 to $582 per week, after deducting the sum of $1,100, being the approximate sum included on account of Emma Kate Bate's legal and accounting fees. This decision was made on the basis that 50 per cent of the proceeds of sale of the parties’ rental property (approximately $610,000), or such lesser amount as Emma requested, be paid to her forthwith by way of an interim distribution, and that the balance of the sale proceeds be held on interest-bearing deposit pending agreement or order of the Court.

The court considered the legal principles governing interim spousal maintenance, including the broad discretion under s 82 of the Family Proceedings Act 1980, and the well-established approach to interim spousal maintenance orders. The court also examined the cases where legal fees have been claimed as part of interim or final maintenance, and drew from them broad principles, including that legal and accounting fees can be treated as an expense in a spousal maintenance claim, provided they are ongoing, and a cautious approach is taken to inclusion of legal fees in a maintenance award.

The court found that Mr Bate does not have the means to pay towards Mrs Bate’s legal fees, as he has a shortfall in terms of his own expenses (including child support) and an even greater shortfall taking into account the further payment he will have to make to Mrs Bate of $582 per week. The court also considered it objectionable and contrary to public policy that trustees of the Bate Seniors Trust should be expected to fund legal fees of a daughter-in-law of the settlors in proceedings against their son. Furthermore, the court found that even if Mr Bate had the means, this case does not fit into a category where legal fees should be included in interim maintenance, as it is not a situation where one person has endless resources and the other is starved of funds.

For the above reasons, the court allowed the appeal and made the orders set out in its judgment dated 6 July 2023. The court also noted that no account has been taken for present purposes of interest Mrs Bate will receive on the distribution to her of approximately $610,000 (that is, the court has not taken into account that her income will increase). At present interest rates, she will receive interest of approximately $30,000 gross per annum. The question of adjustment between the parties can be taken into account ultimately on division of relationship property.

Orders