Bowden v Bowden
[2016] NZHC 1201
•7 June 2016
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
CIV-2015-409-702 [2016] NZHC 1201
BETWEEN JUDITH ANNE BOWDEN
Appellant
AND
PAUL GORDON BOWDEN Respondent
Hearing: 4 May 2016 Appearances:
A S Greig for Appellant
A D Marsh for RespondentJudgment:
7 June 2016
JUDGMENT OF MANDER J
[1] This is an appeal from a finding by the Family Court that there were extraordinary circumstances that made equal sharing of relationship property repugnant to justice.1 The appellant, Judith Bowden (JB), contends the Family Court erred in finding the statutory test for the exception to equal sharing established. Other grounds of appeal relate to the Court’s determination that the $100,727.17 balance of a Westpac account derived from an accident compensation payment was
separate property, and orders for the payment of an occupation rental and for rates and insurance.
Background
[2] Gordon Bowden (GB) came to New Zealand from Great Britain with his wife. He separated from his wife and she returned to England with their son, the respondent, Paul Bowden (PB) in 1998. GB remained in New Zealand, however, he
maintained contact with his family in Britain.
1 Bowden v Bowden [2015] NZFC 8921; Property (Relationships) Act 1976, s 13.
BOWDEN v BOWDEN [2016] NZHC 1201 [7 June 2016]
[3] JB and GB met in early March 2008. They commenced a de facto relationship on 27 February 2009. At that time JB relinquished the tenancy on a Housing Corporation house. They commenced living together as de facto partners in GB’s home at 17A Thistledown Place (Thistledown Place). GB and JB remained in that de facto relationship for three years and two days, until GB’s death on 1 March
2012. The day before he died GB made a will leaving his estate to PB.
[4] The relationship property was found by the Family Court to consist of:
· The home at Thistledown Place.
· A Westpac bank account in the name of GB which, as at 1 March 2012, had funds of $31,655.79.
[5] There was also a Westpac saver account in the name of GB and PB. This account held the balance of an accident compensation payment GB received prior to his death. JB claimed the funds in this account were relationship property. The Family Court Judge disagreed.
[6] Shortly prior to his death, GB had made it known that he wanted JB to be able to live at Thistledown Place for 12 months after he died. After GB’s death, PB prepared a residential tenancy agreement which provided that as from 2 March 2012
JB could continue to live rent-free in the Thistledown Place property for a period of
12 months, subject to her paying rates and insurance.
Family Court decision
[7] Having determined that GB and JB were in a de facto relationship, the Family Court Judge was required to consider whether there were extraordinary circumstances making equal sharing of the relationship property repugnant to justice under s 13 of the Property (Relationships) Act 1976 (the Act).
[8] The Family Court found the following factors relevant to its assessment which are not disputed on appeal:2
2 Bowden v Bowden, above n 1, at [101].
· The age of the parties – both were in their late 50s/early 60s.
· The parties kept their finances separate and never held a joint bank account. They did not have access to each other’s separate bank accounts.
· There were no children of the relationship.
· GB owned the family home before the relationship began. The equity in the freehold home was approximately $300,000. JB brought no assets to the relationship, other than a very small amount of her furniture.
· GB paid all of the outgoings on the home, being rates, insurance and electricity.
· JB paid GB $100 cash per week.
· GB provided most of the family chattels, his house being furnished when JB came to live with him. Her evidence was he did not sell any of his furniture.
· GB and JB did not acquire any relationship property together.
· GB and JB shared expenses in respect of food.
· JB did not give up or change her employment during the relationship and remains employed.
· GB paid almost entirely for all their holidays, including a two month trip to Europe.
· The de facto relationship lasted three years and two days, and they had known each other for a year before it began. The entire relationship, from meeting until GB’s death, was four years. That equates to 1/16 of GB’s life (4/63).
It was this combination of factors that led the Family Court to conclude that the relationship was extraordinary.
[9] The Family Court found that GB and JB provided mutual love, friendship and companionship to each other. JB provided GB with support and love in the face of
GB’s terminal illness, but was able to continue working until the last week of his life. Although she had taken some time off work to care for GB in his last few months, she did so using her leave or sick day entitlements. GB’s decline was very rapid, and JB was able to keep working until 26 February. The Family Court, however, acknowledged that had JB not been present GB may have needed hospice care when he became very unwell in the last one or two weeks of his life.
[10] The Family Court found that GB’s illness did not have an impact on the relationship until the very end of his life, and it could not be said that JB was required to provide anything out of the ordinary by way of support.
[11] The Family Court acknowledged that JB had given up the security of her state rental home, but considered that such a tenancy was not guaranteed for life, and that JB’s employment continued throughout the relationship. The relationship was only a few days beyond that which would qualify as a relationship of short duration, and JB had contributed almost nothing in dollar terms to the pool of relationship property, only some small items of furniture valued at a few thousand dollars at most. It was agreed JB would retain a motor vehicle and the household furniture in addition to the benefit of the one years’ rent-free accommodation.
[12] Having considered what countervailing factors were present and the combination of listed factors which made the relationship one that was out of the ordinary, the Court found itself satisfied there were extraordinary circumstances which rendered equal sharing repugnant to justice. As a result, the Family Court divided the relationship property on the basis of the parties' contributions, which were assessed as an 80 per cent contribution by GB and 20 per cent by JB.
[13] JB continued to reside at Thistledown Place. As agreed, she did not pay any rent during the 12 month period after GB’s death. However, she has paid no rent since the expiry of that period, nor has she paid the rates and insurance costs for that first year, ending 2 March 2013. Some $4,450 has been paid by JB towards rates and insurance premiums since February 2014. JB in evidence acknowledged she should be making some payment for her occupation of the house, and she indicated she was happy to pay half of the outgoings.
[14] The Family Court found that JB should have paid the rates and insurance premiums for the first year, and should have made rental payments thereafter, although she would not be liable to pay rates and insurance in addition to rental. The Family Court acknowledged the scant evidence provided as to an appropriate rental. Based on evidence given by PB that he had been advised that a fair market rental could be between $350-$400 per week, the Family Court concluded a rental of $300 per week was payable by JB from 3 March 2013, less 20 per cent. The Family Court further concluded that JB was liable to pay the rates and insurance on the property for the first year after GB’s death, as agreed.
The appeal
[15] The grounds advanced by JB as the basis for her appeal can be summarised as follows:
(a) The Family Court erred in finding extraordinary circumstances which rendered equal sharing repugnant to justice. Namely:
(i)the Court failed to appreciate the high statutory threshold, as held repeatedly over the years by the Court of Appeal;
(ii)the Court failed to consider the statutory test in terms of a two stage process, firstly, requiring the identification of extraordinary circumstances and, secondly, why those extraordinary circumstances made equal sharing “repugnant to justice”;
(iii)that the circumstances listed by the Family Court, and upon which the Judge relied, were not extraordinary but commonplace;
(iv)the Court erred in its analysis of those circumstances by citing as discrete factors circumstances which, in reality, were the same; and
(v)the Court, in referring to the provision of some measure of support to an ill partner as not being “extraordinary” reversed the test required to establish extraordinary circumstances to justify unequal sharing.
(b)No reasons were provided by the Family Court for the division of the relationship property, 80 per cent against 20 per cent in favour of GB. Such division did not give adequate weight to the support provided by JB to GB after he was diagnosed with the terminal illness, and failed to take into account and give proper weight to other contributions made by JB to the relationship.
(c) The Family Court misapplied the test governing whether the
$100,727.17 compensation moneys was separate or relationship property. The cause of action occurred not when the injury was caused but when GB became aware of his condition as a result of exposure to asbestos. Such diagnosis was made during the course of the relationship, therefore the cause of action occurred during the relationship.3
(d)There was insufficient evidence for the Family Court to determine the appropriate rental to be $300.
(e) The requirement that JB pay rates and insurance for the first year after GB’s death, pursuant to the agreement entered into with PB, was unenforceable.
[16] The appellant sought a declaration that she was entitled to 50 per cent of the relationship property which, in addition to the items identified by the Family Court, should also include the funds in the Westpac account in the name of GB and PB, with a balance of some $100,727.17. Further, orders that JB pay rates and insurance for the first year and rental at a rate of $240 thereafter (80 per cent of $300 per week)
be set aside.
3 Gill v Gill (1995) 13 FRNZ 427 (HC).
Approach to the appeal
[17] Before embarking on an assessment of the merits, it is necessary to clarify the basis upon which the appeal Court should approach the appeal. That is of particular importance in the context of the present case because PB contended the appeal Court should be “very careful” before substituting its own decision for that of the Family Court Judge on the factual merits of the case. He submitted there was an onus on the appellant to demonstrate the Family Court’s assessment was “demonstrably wrong”. Relying on statements made by the Court of Appeal in Joseph v Johansen, PB submitted that, where the correct test had been applied and a decision reached which
was reasonably open to the Court, the decision cannot be disturbed on appeal.4
[18] The appeal is brought under s 39 of the Act and, as a general appeal, proceeds by way of rehearing.5 The appeal Court therefore is required to reach its own conclusions on the merits, and need not defer to the Judge at first instance.6
[19] The appeal Court is required to recognise the advantages of the Judge who has seen the witnesses and heard the evidence, however, that aspect is not in play in the current appeal. There was contested evidence, and the Family Court Judge was required to make credibility findings about the witnesses. However it is accepted the appeal proceeds on the basis of the Family Court’s findings of fact based on the Judge’s assessment of the evidence and her findings as to credibility.
[20] In Venter v Trenberth, Woolford J observed that a Family Court Judge is well placed to consider the factual question of whether extraordinary circumstances exist and to make the value judgment of whether extraordinary circumstances render equal sharing repugnant to justice. I agree this is the “bread and butter” of the Family Court’s task in this type of case, and it having heard from a number of witnesses before determining both the financial and non-financial contributions made by the parties to a relationship, it is unlikely the appeal Court will be better placed to make
such findings of fact.7
4 Joseph v Johansen (1993) 10 FRNZ 302 (CA); Kauwhata v Kauwhata [2000] NZFLR 755.
5 Property (Relationships) Act 1976, s 39; District Courts Act 1975, s 75.
6 Austin, Nichols and Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [3]
and [16].
7 Venter v Trenberth [2015] NZHC 545, [2015] NZFLR 571 at [16]-[18].
[21] However, as observed by Kos J in Simon v Wright, when faced with the same submission as made by PB in the present case, the more deferential approach taken by the Court of Appeal in Joseph v Johansen, cannot survive the decisions of the Supreme Court in Austin, Nichols and Co Inc v Stichting Lodestar and Kacem v Bashir.8 In Austin, Nichols, Elias CJ held:9
[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.
[22] While the appellate Court must make its own assessment of the merits of the case, it does not ignore the judgment the subject of the appeal.10 Errors in the first instance judgment are required to be identified, and the appellant bears the persuasive burden of satisfying the appeal Court that a different finding is warranted.11 This was emphasised by White J, in Nguy v Lee, who observed:12
The appellant bears an onus of satisfying the High Court that it should differ from the decision under appeal… It is only if the High Court considers that the Family Court decision is wrong that it is justified in interfering with it… The High Court may or may not find the reasoning of the Family Court persuasive in its own terms.
Issues
[23] From both the written and oral submissions advanced on behalf of the parties, the issues to be determined on appeal are readily discernible. They are as follows
(a) Were there extraordinary circumstances that made equal sharing of the relationship property repugnant to justice?
8 Simon v Wright [2013] NZHC 1809 at [21]; Joseph v Johansen, above n 4 at 304-305; Austin, Nichols & Co Inc v Stichting Lodestar, above n 6; Kacem v Bashir [2010] NZSC 112, [2011] 2
NZLR 1.
9 Austin, Nichols & Co Inc v Stichting Lodestar, above n 6.
10 Kacem v Bashir, above n 8.
11 Austin, Nichols & Co Inc v Stichting Lodestar, above n 6, at [4].
12 Nguy v Lee (2009) 28 FRNZ 618 (HC) at [5].
(b)Were the relative contributions of the parties to the relationship correctly assessed?
(c) Was the $100,000 compensation payment separate property?
(d)Was there sufficient evidence to make an award for occupational rental?
(e) Should the Family Court have ordered JB to pay rates and insurance?
Were there extraordinary circumstances to make equal sharing of the relationship property repugnant to justice
Did the Family Court fail to appreciate the high statutory threshold required by the
Act?
[24] Section 13 of the Act provides as follows:
13 Exception to equal sharing
(1) If the court considers that there are extraordinary circumstances that make equal sharing of property or money under section 11 or section
11A or section 11B or section 12 repugnant to justice, the share of each spouse or partner in that property or money is to be determined in accordance with the contribution of each spouse to the marriage or of each civil union partner to the civil union or of each de facto partner to the de facto relationship.
(2) This section is subject to sections 14 to 17A.
[25] JB submitted the Family Court had not accurately apprised itself of the stringency of the “extraordinary circumstances” test provided by s 13. In making that submission reference was made to s 1N of the Act setting out the guiding principles to achieve the purpose of the Act. They are as follows:
1N Principles
The following principles are to guide the achievement of the purpose of this
Act:
(a) the principle that men and women have equal status, and their equality should be maintained and enhanced:
(b) the principle that all forms of contribution to the marriage partnership, civil union, or the de facto relationship partnership, are treated as equal:
(c) the principle that a just division of relationship property has regard to the economic advantages or disadvantages to the spouses or partners arising from their marriage, civil union, or de facto relationship or from the ending of their marriage, civil union, or de facto relationship:
(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.
[26] In the course of oral argument I was taken to various statements in the case law emphasising the strength of the language used in section 13 to demonstrate the stringency of the test required to be satisfied to justify departure from the equal sharing regime.13 The approach to be taken to the statutory test reiterated over some decades now is uncontroversial and beyond doubt. “Extraordinary circumstances” and “repugnant to justice” are strong words which reflect Parliament’s intention that
the primacy of the equal sharing of relationship property is not to be eroded in the ordinary circumstances of a qualifying relationship.14
[27] Disparity and contribution by itself cannot give rise to the exception to equal sharing.15 The fact of a disproportionately greater contribution is not a circumstance which on its own will attract unequal sharing under s 13.16 However it does not follow that disparity of contributions may never be regarded as an extraordinary circumstance.17
[28] The “extraordinary circumstances” that make equal sharing of property repugnant to justice must give rise to an exceptional situation and one so out of the ordinary as to make an equal division, something which the Court “simply cannot countenance.”18 Neither an imbalance in the contributions of the parties to the relationship nor even a substantial imbalance will be sufficient to constitute an extraordinary circumstance. Such a situation in the context of relationships is
unremarkable.
13 Wilson v Wilson [1991] 1 NZLR 687 (CA) at 697.
14 Martin v Martin [1979] 1 NZLR 97 (CA) at 111.
15 Martin v Martin, above n 14.
16 At 110 per Richardson J.
17 At 112 per Richardson J.
18 Castle v Castle [1977] 2 NZLR 97 (SC) at 102; Martin v Martin, above n 14.
[29] However there may be cases where the disparity in contributions is so gross as to compel a Court to conclude that an equal division of property would be repugnant to justice. In addressing the question of whether a disparity of contributions may ever be regarded as an extraordinary circumstance, Richardson J observed:19
It would be going too far to rule out any consideration of the respective contributions to the marriage partnership whatever the circumstances. The entire range of possible circumstances is open for consideration. Circumstances may be extraordinary in kind or degree. A circumstance which is not inherently extraordinary may have some additional features which make it extraordinary. Mere disparity of contributions or even a disproportionately greater contribution is not sufficient to justify unequal sharing. But the disparity may be so gross as to be an extraordinary circumstance rendering equal sharing repugnant to justice.
[30] The whole of the circumstances taken in combination need to be reviewed on a cumulative basis before determining whether there are extraordinary circumstances that make equal sharing repugnant to justice.20
[31] JB’s critique of the Family Court’s approach to the statutory test focused on the Court’s reliance on a statement by Woolford J in Venter v Trenberth which, in reference to the statutory test, posed the question of whether equal sharing of relationship property would be “completely unfair”.21 JB submitted that applying the test of “completely unfair” was to reset the threshold at a much lower level than that consistently required by the Court of Appeal.
[32] I do not find this criticism sustainable. The Family Court Judge acknowledged the test was a stringent and difficult one to overcome, and in considering the statutory threshold explicitly referred to the purposes of the Act, namely to recognise the equal contribution of de facto partners to the de facto relationship and to provide for a just division of relationship property between partners when their relationship ends.
[33] Further, the Family Court Judge referred to the relevant principles set out in s
1N when applying the statutory test noting the principle that men and women have
19 Martin v Martin, above n 14, at 112.
20 Joseph v Johansen, above n 4, at 304 and 306 per Cooke P and Richardson J.
21 Venter v Trenberth, above n7 at [16].
equal status, that all forms of contribution to the de facto relationship are treated as equal and the principle that a just division of relationship property must have regard to the economic advantage or disadvantages to the partners arising from the relationship or from the ending of the de facto relationship. There then followed a discussion of the respective contributions and circumstances of the relationship which included both monetary and non-monetary contributions.
[34] I accept that for the statutory test to be established the case must be so out of the ordinary that the equality principle must be displaced. The reasons for equal sharing will need to be unusually weak or the reasons for recognising contributions unusually strong.22 Where a disparity in contributions to a relationship is relied upon to justify an unequal division, such disparity must be gross such as to render it repugnant to justice to allow for an equal division to take place.
[35] Viewed in those terms, whether a description of equal sharing of relationship property as being “completely unfair” accurately reflects the threshold required by s
13 is perhaps moot. However, I do not consider that issue critical to the determination of the appeal because it remains for the appeal Court to correctly apply the statutory test against the undisputed facts, and decide whether a different finding was warranted.
Did the Court fail to consider the statutory test as a two stage process?
[36] JB submitted the Family Court erred in not treating “extraordinary circumstances” and “repugnant to justice” as two separate tests. I do not consider the Family Court Judge conflated the two elements of the statutory test.
[37] Section 13 provides a two-fold test which firstly requires the identification of extraordinary circumstances and secondly a consideration of whether those extraordinary circumstances render equal sharing repugnant to justice23. However by the very construction of the section the two limbs are related. In Kauwhata v
Kauwhata, Baragwanath J observed that whether circumstances which fell within the
22 R L Fisher (ed) Fisher on Matrimonial and Relationship Property (looseleaf ed, LexisNexis) at
[12.28].
23 Martin v Martin, above n 14.
narrow category of “exceptional” were also such as to warrant rejection of equal sharing as repugnant to justice was a distinct issue, but that the same facts were relevant to it.24
[38] In determining that second issue, which is one of fact and judicial evaluation, the whole of the circumstances taken in combination need to be considered. The Family Court Judge identified the factors she considered relevant to her assessment of whether the circumstances in this case were extraordinary. She considered that a combination of factors rendered the relationship out of the ordinary or extraordinary. After considering the potentially countervailing factors set out at [9]-[12] the Judge declared herself satisfied there were extraordinary circumstances which rendered equal sharing repugnant to justice.
[39] A similar criticism that the two issues had not been considered separately was made and rejected by the Court of Appeal in Joseph v Johansen.25 Judge Keane identified two features of the relationship, namely an imbalance in capital and other financial contributions that had developed by the end of the marriage, and the husband’s alcoholism as being “quite out of the ordinary.” The Judge considered those two circumstances, individually and together, were extraordinary and made equal sharing repugnant to justice.
[40] The Court of Appeal held there was nothing in the Judge’s approach to suggest he thought satisfying the test of “extraordinary” would itself meet the second limb of the test. Both needed to be satisfied. Similarly in the present case, notwithstanding any argument as to the merits of the conclusion reached that the circumstances rendered the situation extraordinary, the Family Court Judge did firstly find there were extraordinary circumstances before separately assessing
whether they rendered equal sharing repugnant to justice.
24 Kauwhata v Kauwhata, above n 4, at [51].
25 Joseph v Johansen, above n 4.
Were the circumstances listed by the Family Court and upon which it relied extraordinary?
[41] JB submitted that most of the circumstances identified by the Family Court Judge set out at [8] were commonplace and that taken together could not amount to being “extraordinary.” She submitted there was nothing extraordinary about one person providing the whole of the assets to a relationship, nor a situation where upon one person moving into another person’s home most of the original furniture remains. JB contributed $100 per week to expenses and the fact she retained her job throughout the relationship was not extraordinary. Similarly the fact GB paid for a European holiday, particularly in the circumstances the holiday took place amounting as it did to a farewell trip by a dying man, had no bearing on such an assessment. It was submitted that there was nothing unusual in the parties keeping separate finances, particularly for people who enter into a relationship in late middle- age.
[42] JB submitted that greater weight should have been given by the Family Court to the support she provided to her dying partner and how she acted to her disadvantage in giving up her state house tenancy to enter into the de facto relationship with GB. Because, in her submission, these circumstances were commonplace and not extraordinary, they could not render equal sharing repugnant to justice.
[43] I agree there is nothing novel about a relationship where one partner makes significantly greater monetary contributions (whether by way of income, capital or both) to the relationship than the other.26 The mere fact of a disproportionately greater contribution by one partner is not a circumstance which ordinarily on its own can attract unequal sharing under s 13. The disparity must be so gross as to be an extraordinary circumstance rendering equal sharing repugnant to justice.
[44] In order to accurately assess whether the disparity in the financial contribution of the parties is of such a dimension to be considered gross, the contextual circumstances of the relationship need to be assessed. As the Family
Court Judge observed, it is trite that no two relationships are the same. An obvious
26 de Malmanche v de Malmanche [2002] 2 NZLR 838 (HC) at [50].
and extreme disparity of financial contributions in one relationship may not be considered so gross as to constitute an extraordinary circumstance, yet in another setting the same financial disparity may attract such a categorisation.
[45] An obvious example of the former situation is where one partner may bring substantial assets to a relationship and provide the sole source of income while the other partner brings nothing and remains at home. However, over the course of a significant period children are raised, opportunities foregone, and respective roles performed which will render the disparity of limited relevance in the overall context of the relationship as a whole. Judged over the length of a relationship, an early substantial disparity in capital or financial contributions may pale into insignificance.
[46] In the present case, the Family Court focussed on the relative maturity of the parties at the time they entered into the de facto relationship. They were independent people who continued to order their affairs as they had prior to the relationship. They kept their finances separate and neither had access to each other’s bank accounts. Both were in paid employment and continued with their occupations. GB and JB holidayed together, however, the evidence was that GB paid almost entirely for their holidays, including a two month trip to Europe.
[47] Unsurprisingly because of the age of the parties there were no children of the relationship. Each of them provided love, friendship and companionship to the other. Leaving to one side for present purposes the circumstances of GB’s illness and subsequent death, there is no other notable feature of the relationship of just over three years. It is against that background that the financial contributions are to be assessed.
[48] The two items of relationship property were Thistledown Place and GB’s Westpac Bank account. GB owned the family home before the relationship began. He paid all the outgoings on the home including rates, insurance and electricity. JB contributed $100 per week in cash, but beyond that made no other financial contribution other than to share food expenses. JB brought a small amount of her furniture to the house, but most of the family chattels were provided by GB as the
house was already furnished when JB came to live with him, although I do not consider that fact to be of any great consequence.
[49] More importantly, however, it is clear that JB brought no capital assets to the relationship, nor did the two of them as partners acquire any relationship property together. As the Family Court Judge observed, it is notable that JB in her affidavit of assets and liabilities provided for the purpose of the Family Court proceeding did not even disclose her own bank accounts. Every item she listed was owned by GB before the relationship began and nothing added during the course of the relationship.
[50] It is against that background that the Family Court concluded there were extraordinary circumstances. Such circumstances derive from the gross disparity in the respective financial contributions of the two parties to the relationship. Having reviewed the circumstances carefully myself, I have not been brought to the position where I could consider the Family Court’s decision to be wrong. I agree with the conclusion reached.
[51] I consider the Family Court gave due weight to the care that JB provided to GB in the last months of his life, including the fact that if JB had not been present GB may have needed to go into hospice care. GB’s decline was rapid. He was still travelling in December 2011 and January 2012, and it is apparent that his illness did not impact on the relationship until the very end of his life. JB provided particular care and love during that period, but of itself there is no evidence it was out of the ordinary from that provided by a partner in such a situation.
[52] The other factor on which JB places reliance is the submitted disadvantage of her entering into the de facto relationship and having to release the tenancy on her state rental home. I accept this step taken by JB is a mark of her level of commitment to the de facto relationship, but it only serves to underline the absence of any capital contribution by her and the fact that by moving into Thistledown Place (where she paid only the nominal sum of $100 per week) her living arrangements essentially remained unchanged.
[53] Turning to the statutory test of whether those extraordinary circumstances would make equal sharing of the relationship property repugnant to justice, it is necessary, as the Family Court Judge did, to bear in mind the purpose of the Act to recognise the equal contribution of de facto partners to the relationship and to provide for a just division of relationship property between partners when the relationship ends. I have already set out at [25] the relevant principles which are to guide the achievement of the purpose of the Act, including the principle that all forms of contribution to the de facto relationship are treated as equal and the principle that a just division of relationship property has regard to the economic advantages or disadvantages to the partners arising from their de facto relationship or from its ending.
[54] Being cognisant of the purpose of the Act and those principles, I agree with the Family Court Judge’s conclusion that an equal sharing of relationship property in the circumstances of this particular case would be repugnant to justice.
[55] I accept the submission made by JB that it is important not to devalue the intangible benefits of love, friendship, companionship and support which no doubt JB provided, in particular during the last few months of GB’s life. However, those contributions to the relationship were mutual and while there is no presumption that a contribution of a financial nature should be considered of any greater value than a contribution of a non-monetary nature, I do not consider the Family Court’s analysis,
nor mine, breaches that presumption.27
[56] It follows that I am satisfied the Family Court did not err in its assessment of whether there were extraordinary circumstances. Further, that it was entitled to conclude that those extraordinary circumstances rendered equal sharing repugnant to justice in the circumstances of this case. A finding with which I agree.
Identification of factors relevant to the assessment of extraordinary circumstances
[57] JB was critical of the Family Court’s identification of the factors listed as relevant to its assessment of whether the circumstances were extraordinary. She
27 Property (Relationships) Act 1976, s 18(2).
submitted that some of the circumstances cited as discrete factors were “in reality” the same. In offering that critique JB gave as an example the Family Court Judge observing that JB brought no assets to the relationship other than a very small amount of her furniture and effectively repeated that observation as a discrete point by observing that GB provided most of the family chattels, his house being furnished when JB came to live with him.
[58] I do not find that criticism persuasive. It is the overall effect of the circumstances of the relationship which must be analysed, and I do not consider any repetition of the type suggested has led the Family Court Judge into error in her assessment.
Reversal of test to establish extraordinary circumstances
[59] A further identified error raised by JB related to the Family Court Judge’s reference when assessing the contribution of JB to her care and support of GB during his illness as not being “extraordinary”. The complaint made is of the use of the term “extraordinary” which it was submitted reversed the test required to establish extraordinary circumstances to justify unequal sharing.
[60] Again, I do not find that argument convincing. The Family Court Judge referred to that term in the context of assessing whether the level of support and care provided by JB was of an order such to displace the gross disparity in the respective financial contributions made to the relationship. I accept the reference to the term “extraordinary” in the context of making an assessment of whether there are extraordinary circumstances to meet the s 13 test may lead to confusion.
[61] I am satisfied however the point sought to be made by the Family Court Judge was that JB’s care of GB was not of an order outside that ordinarily expected of one partner supporting an ill partner, and to that extent did not go beyond the mutual care, love and support that each of the parties to the relationship provided to the other. I do not consider the Judge’s use of the term led her to place any onus on JB or led her into error in her application of the s 13 test.
Were the relative contributions of the parties to the relationship correctly assessed?
[62] The Family Court divided the relationship property on the basis of the partners’ contributions which were assessed as an 80 per cent contribution by GB and 20 per cent by JB.
[63] JB submitted that in assessing the contributions of each of the partners to the relationship the Family Court failed to refer to s 18 of the Act which provides a list of both monetary and non-monetary contributions. She submitted the Family Court significantly miscalculated the level of contribution made by her in providing care to GB from the time he learnt he was suffering from lung cancer until his death as a result of this terminal illness.
[64] I do not consider anything arises from the Family Court not referring to s 18. It is clear from the judgment that the Family Court Judge canvassed all relevant factors in assessing the respective contributions of the partners to the relationship. Significantly, JB has not identified any particular factor listed in s 18 which is present in the circumstances of this case which was not considered by the Family Court. In the absence of identifying such an omission, any criticism of a failure to cite s 18 is empty.
[65] The Family Court considered at length the circumstances of GB’s illness and the care provided by JB throughout that latter stage of their relationship. I accept that it must have been of considerable comfort to GB in the absence of his immediate family in New Zealand to have the benefit of her love and care over that obviously difficult period. However, the Family Court Judge carefully assessed the relative contributions of the partners to the relationship, and in particular the support provided by JB in respect of his terminal condition. The Family Court Judge specifically took into account the intangible benefit of companionship and support and noted the particular relevance of those considerations as a result of GB being diagnosed with a terminal illness in December 2010.
[66] In terms of the material non-monetary contributions each partner provided to the other in terms of love and support, the 20 per cent allocation of the relationship
property to JB in large part represents the particular care provided by her during GB’s relatively short incapacity. I do not therefore consider the Family Court erred in its division of the relationship property. It is also to be noted when considering that division that by agreement JB retained a motor vehicle, the household furniture and additionally one year’s rent-free accommodation.
Was the $100,727.17 compensation money separate property?
[67] The Family Court determined the funds in the Westpac saver account in the name of GB and PB with a balance of some $100,727.17 traceable to the compensation received by GB was his separate property. The entitlement to compensation arose as a result of asbestosis which, unbeknownst to GB, he had contracted when working in the United Kingdom, and was only diagnosed in 2010. The Family Court held the entitlement to compensation arose many years before JB met GB in New Zealand. That finding was based on a determination the “cause of action” which gave rise to that entitlement occurred prior to the commencement of the relationship. The payment was therefore deemed to be separate property.
[68] Relying on the authority of Gill v Gill, JB submitted the Family Court misapplied the test governing whether the compensation payment was separate or relationship property. 28 She submitted because the cause of action arose not when the injury was actually caused, namely at the time of his exposure to asbestos in the United Kingdom, but when he became aware of his condition in New Zealand, the cause of action accrued during the course of the relationship. JB submitted it followed that the $100,727.17 compensation money was relationship property.
[69] PB submitted the issue of when a cause of action accrues and the role of reasonable discoverability in that determination is not clear, referring to the Supreme Court’s analysis in Murray v Morel & Co Ltd of the earlier Court of Appeal decision of G D Searle & Co v Gunn.29 Alternatively, PB argued the Accident Compensation legislation governed the situation and that no issue of discoverability or relevant
question of limitation arose in the context of GB’s compensation claim. He
28 Gill v Gill, above n 3.
29 Murray v Morel & Co Ltd [2007] NZSC 27; G D Searle & Co v Gunn [1996] 2 NZLR 129 (CA).
submitted reasonable discoverability was of no relevance to the present situation and that GB’s right to compensation accrued at the time he contracted the condition and therefore prior to the relationship commencing.
[70] The parties focus in respect of this issue was primarily on the decision of Tipping J in Gill v Gill and the concept of accrual in the context of a tort based action. In my view, what is determinative of the issue is the correct application of the relevant accident compensation legislation, however it is necessary to briefly discuss the doctrine of reasonable discoverability and its ambit.
Doctrine of reasonable discoverability
[71] The long established meaning of accrual of causes of action relates to the occurrence of all material facts required for a claim to succeed, not to the knowledge of those facts.30 However, over time a number of exemptions have been created arguably to meet the injustices that can result from strict statutory limitation periods.
[72] The most well known example of this is the decision of the Privy Council in Invercargill City Council v Hamlin.31 That case concerned a cause of action in negligence brought against a local authority for approving defective foundations in a house. The Privy Council held that the cause of action arose when the defect was discovered or could have been discovered by reasonable diligence. Importantly, however, their Lordships confined the ratio of their decision to the problem created
by latent defects in buildings.
[73] Since then, the principle has experienced a number of extensions, albeit on a somewhat inconsistent basis.32 However, the Supreme Court’s decision in Murray v Morel & Co Ltd now casts some doubt over a wider principle of reasonable discoverability, although the majority in that case was not prepared to overrule earlier decisions of the Court of Appeal to that effect. Tipping J, after a lengthy
analysis of the principle concluded:
30 Murray v Morel & Co Ltd, above n 29, at [64] per Tipping J.
31 Invercargill City Council v Hamlin [1996] 1 NZLR 513 (PC).
32 See S v G [1995] 3 NZLR 681 (CA); G D Searle & Co v Gunn, above n 29; Gill v Gill, above n 3, although it is debatable whether Tipping J actually applied the principle.
[69] In my view the numerous references in the Limitation Act to accrual of a cause of action can only be construed as references to the point of time at which everything has happened entitling the plaintiff to the judgment of the Court on the cause of action asserted. Save when the Limitation Act itself makes knowledge or reasonable discoverability relevant, the plaintiff’s state of knowledge has no bearing on limitation issues. Accrual is an occurrence-based, not a knowledge-based, concept.
…
[74] Against this background and the factors I have discussed, the introduction, by decision of this Court, of such a fundamental change as that proposed in this case would be to alter in a substantial way the balance which Parliament has struck between the interests of plaintiffs and defendants. That change would be substantially to the advantage of plaintiffs and substantially to the disadvantage of defendants.
[74] The claim under consideration does not concern any statutory limitation period, rather it is an accident compensation claim. On that basis, no doctrine of reasonability discoverability applies and it is unnecessary to review the Court of Appeal’s consideration of that issue prior to the Supreme Court’s decision in Murray v Morel & Co Ltd.33
[75] As a prelude to the discussion of the Accident Compensation Act 2001 it is worth noting the following observation by Blanchard J in the same case:34
It is not without moment that Parliament has reformulated the Accident Compensation Scheme and the Injury Prevention, Rehabilitation and Compensation Act 2001, and relevantly amended it in 2005, so that it now provides cover for persons in the position of the plaintiffs in S v G (in s 21A) and in Searle (in s 20(2), read with s 32), thereby limiting the practical application of those cases for the future. But there has been no legislative overruling of the Court of Appeal’s interpretation of the Limitation Act.
[76] I turn now to the circumstances of GB’s accident compensation payment and
the application of the Accident Compensation Act 2001.
Accident Compensation Act 2001
[77] GB suffered from asbestosis contracted in the United Kingdom. It is not disputed he was not diagnosed until 2010, by which time the de facto relationship
33 Murray v Morel & Co Ltd, above n 29.
34 At [4].
had commenced. However, there is otherwise very little information about the circumstances of the claim and the subsequent compensation payment.
[78] In 2010 the Accident Compensation Act 2001 was in force. A person had cover for a personal injury, including one caused by a work-related gradual process, disease, or infection. Schedule 2 of the Act listed “lung cancer or mesothelioma diagnosed as caused by asbestos” as a personal injury classified as a work-related disease. Cover appears to have been limited to exposure to an environmental work disease in New Zealand, or to a person ordinarily resident in New Zealand when the
exposure occurred.35 GB’s exposure appears to have occurred while he was working
in the United Kingdom. However, as noted, there is a paucity of information relating to the circumstances of that work-related disease, and the question of eligibility was obviously not a matter within the Family Court’s purview, nor is it an issue before me on the appeal.
[79] Sometimes work-related conditions, as in the present case, can be latent for a long period even to the extent of predating the commencement of the scheme. The Act however extends its reach to such cases to include persons who contract a disease while performing employment tasks.36 Importantly, where the compensation concerns a work-related gradual process, disease, or infection, s 37 operates as a deeming provision to fix the date on which the injury was suffered. It provides:
37Date on which person is to be regarded as suffering personal injury caused by work-related gradual process, disease, or infection
(1) The date on which a person suffers personal injury caused by a work-related gradual process, disease, or infection is the earlier of the following dates:
(a) the date on which the person first receives treatment from a medical practitioner or nurse practitioner for that personal injury as that personal injury:
(b) the date on which the personal injury first results in the
person’s incapacity.
...
35 Accident Compensation Act 2001, ss 30(4A)(b) and 24.
36 Section 30(6) and (7).
Accordingly, under the Accident Compensation Act 2001, GB was deemed to have suffered the injury when he was diagnosed in 2010.
[80] Storer v Storer provides an example in the context of a relationship property dispute of the application of the Accident Compensation legislation to determine when the right to compensation arose.37 Mr and Mrs Storer were married in 1973 and separated in October 1982. In June 1981, whilst the parties were living together, Mr Storer was involved in a motor accident resulting in the loss of an eye. He was paid accident compensation in the form of periodic payments for loss of earnings under the Accident Compensation Act 1972. These payments extended over a period of approximately three months. In 1983, Mr Storer received a further award of two
lump sums for non-economic loss. Judge Bisphan was asked to determine whether these payments were separate or relationship property.
[81] Importantly, the Family Court held the position was governed by the Act and explicitly by ss 119 and 120 of the 1972 Act which provided that where a person suffers personal injury by accident lump sum payments are payable for non- economic loss. As a result, the right to compensation accrued during the marriage and it did not matter when the right actually crystallised in the form of a monetary payment.
[82] In my view reasonable discoverability principles devised to circumvent the injustices of limitation periods applying to latent defects have little application in determining when a right to statutory compensation arises under the Accident Compensation legislation. The Act itself governs the situation. It follows that in the case of a person suffering a personal injury caused by work-related gradual process disease or infection the date on which the person suffers the personal injury is the
date on which the person first received treatment.38 At that point, a right to
compensation for that personal injury triggers.
[83] That entitlement or right to compensation is to be contrasted with the concept of being covered for personal injury by the Act. In Bryant v Attorney-General the
37 Storer v Storer (1984) 3 NZFLR 88 (DC).
38 Section 37(1)(a).
plaintiff suffered from mesothelioma, a work-related disease which he had contracted while working in New Zealand.39 The plaintiff, however, discovered and was treated for the disease whilst living in Australia. The plaintiff, in an attempt to avoid his civil action being barred, attempted to rely on the deeming provision under the 1999 Act which was drafted in almost identical terms to s 37 of the 2001 legislation. He argued the injury actually occurred in Australia so that he was not
covered by the Accident Compensation Scheme. In considering the deeming provision under the 1999 Act, Heron J held the provision fixed the time of the personal injury by accident but did not exclude cover in the circumstances of that particular personal injury by accident which was a result of a process suffered or undertaken in New Zealand.40
[84] In GB’s case, while he appears to have been covered by the scheme at the time he was exposed to the work environment which caused his condition, his entitlement to the compensation payment of $128,642.56 (the original payment amount) accrued when the personal injury was deemed to have occurred. This was at the time when treatment was first sought which occurred during the relationship therefore making the compensation payment relationship property. This ground of appeal therefore succeeds.
Was there sufficient evidence to make an award for occupational rental?
[85] JB submitted that insufficient evidence had been placed before the Family Court to determine that an appropriate rental to be paid after the elapse of one year was $300.
[86] There is no dispute that the Family Court may award compensation if one of the partners to the relationship retains occupation of the family home after separation.41 Subject to the overarching issue of the division of relationship property and the setting of an appropriate rental, there was no issue that JB should not be making some payment for her occupation of the house after the rent-free period of
the first year.
39 Bryant v Attorney-General HC Wellington CP44-00, 7 August 2000.
40 At [37].
41 Property (Relationships) Act, s 18B.
[87] The Family Court relied upon evidence given by PB, based on his own research from the internet, of the appropriate rental for the Thistledown Place property. JB submitted the rental should have been assessed by a registered valuer before the Judge, who herself commented upon the scant information provided about the appropriate level of the rent, imposed that liability upon her.
[88] I accept the evidence provided was not of an optimum quality, however, I reject the submission that it was so inadequate that it could not be relied upon to set an appropriate rental. The Family Court Judge built in some margin of error by setting the rental at $300 per week notwithstanding the evidence produced by PB from his review of the “TradeMe” site of similar rental properties being $350. JB did not adduce any evidence herself to contradict the evidence provided, nor on appeal has she sought leave to adduce any evidence which might raise concerns about the reasonableness of the rental set by the Family Court.
[89] In order to find this ground of the appeal sustained, I would need to be satisfied there was no evidential basis upon which the Family Court could have set the $300 per week rental. There is nothing before me to suggest the Judge’s determination was wrong, and I consider she was entitled to rely on PB’s research.
Should the Family Court have ordered JB to pay rates and insurance?
[90] JB sought to argue the requirement that she pay rates and insurance for the first year after GB’s death, pursuant to a “tenancy agreement” entered into with PB after his father’s death, was unenforceable. The position taken by JB on this issue is somewhat contradictory. If I was to find the agreement void or unenforceable it would follow that she would be rendered liable to pay rental for the first year of her occupation, or at least an 80 per cent share of that rental. I did not understand her to contend for that, nor did JB seek to disturb the Family Court’s finding that she was not liable to pay rates and insurance as a rent paying tenant thereafter.
[91] Insofar as JB retained a 20 per cent interest in Thistledown Place as a result of the division of the relationship property, there was nothing invalid or illegal about an agreement to allow JB as one of the shareholders in the property to exclusively occupy the property for a fixed period on particular conditions. Part of that
agreement included JB’s responsibility to pay rates and insurance. I therefore do not consider the Judge erred in making an order to that effect. Such order which required the contributions already paid by JB towards those costs since February
2014 to be taken into account.
Conclusion
[92] In summary, I have found the Family Court did not err in finding extraordinary circumstances which rendered equal sharing repugnant to justice. Nor do I consider the division of relationship property, 80 per cent against 20 per cent in favour of GB to be wrong.
[93] I have, however, concluded the $100,727.17 in the Westpac account in the name of GB and PB was relationship property and, accordingly, JB is entitled to a 20 per cent share in that sum. An adjustment will therefore need to be made to allow for that finding.
[94] I have further concluded that there was sufficient evidence to enable the Family Court to determine an appropriate rental of $300, and that it did not err in requiring JB to pay rates and insurance for the first year after GB’s death.
Result
[95] I make an order declaring the $100,727.17 to be relationship property. In accordance with the ratio of the division of the relationship property, JB is entitled to a 20 per cent share.
[96] The appeal is otherwise dismissed.
[97] If costs are in issue, brief memoranda may be filed within 14 and 21 days respectively.
Solicitors:
Mark Wilson Lawyers, Christchurch
Saunders Robinson Brown, Christchurch
7
3
1