Clayton v Clayton
[2015] NZHC 765
•20 April 2015
IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY
CIV-2014-463-000112 [2015] NZHC 765
BETWEEN MARK ARNOLD CLAYTON
Appellant
AND
MELANIE ANN CLAYTON Respondent / Cross-appellant
Hearing: 27 February 2015 Counsel:
M J McCartney QC and K E Sullivan for the Appellant
J R Hosking for the RespondentJudgment:
20 April 2015
JUDGMENT OF COURTNEY J
This judgment was delivered by Justice Courtney on 20 April 2015 at 4.00 pm pursuant to
r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Date ……………….........
CLAYTON v CLAYTON [2015] NZHC 765 [20 April 2015]
Introduction
[1] In a decision delivered on 18 June 2014 Judge Munro made an order for periodic maintenance under which Mark Clayton was required to pay his former wife $15,000 per month and provide her with a late-model vehicle suitable to her needs.1 Mr Clayton appeals the decision on the grounds that:
(a) The Judge made findings of fact that were not open to her on the evidence;
(b)No qualifying circumstance existed under s 64 of the Family Proceedings Act 1980 (FPA) that would have entitled Mrs Clayton2 to a final maintenance order;
(c) If a qualifying circumstance did exist, the Judge failed to undertake the mandatory analysis required by s 65 FPA;
(d)The Judge failed to address the issue arising under s 64A FPA whether it was unreasonable for Mrs Clayton to do without maintenance and reasonable for Mr Clayton to provide maintenance.
[2] A further ground of appeal, whether, as a matter of law, it was open to the Judge to include an allowance for legal fees in the final maintenance order, was heard separately and determined in favour of Mrs Clayton.3
[3] Mrs Clayton has cross-appealed the judgment on the grounds that the Judge: (a) failed to properly address her claim for past maintenance; and
(b)in determining her entitlement to a vehicle, failed to properly assess her reasonable needs by reference to the standard of living enjoyed
during the marriage.
1 Clayton v Clayton [2014] NZFC 4193.
2 Although the parties’ marriage was dissolved in 2009 counsel used the honorific “Mrs”. I
therefore do likewise.
3 Clayton v Clayton [2015] NZHC 550.
Appeals from the Family Court against maintenance orders
[4] The right of appeal from maintenance orders made by the Family Court arises under s 174 of the FPA. The High Court Rules and ss 74–78 of the District Courts Act 1947 apply to the appeal as if it were an appeal under s 72 of the District Courts Act. That means the appeal is by way of rehearing.4 On hearing the appeal, the High Court may:5
(a) make any decision or decisions it thinks should have been made:
(b) direct the District Court in which the decision appealed against was made—
(i) to rehear the proceedings concerned; or
(ii) to consider or determine (whether for the first time or again)
any matters the High Court directs; or
(iii) to enter judgment for any party to the proceedings concerned the High Court directs:
(c) make any further or other orders it thinks fit (including any orders as to costs).
[5] The principles in Austin, Nichols & Co Inc v Stichting Lodestar apply: if the appellant can show that the first instance judge was wrong he or she is entitled to a fresh assessment by the appellate court.6
The intertwined maintenance and relationship property litigation
The relationship property claim
[6] In addition to this proceeding Mr and Mrs Clayton are involved in longstanding litigation over relationship property. This has complicated the maintenance claim. The “clean break” principle – that after separation both parties are expected to move towards financial self-sufficiency within a reasonable period of
time7 – is premised on the notion that parties will use their respective share of the
4 District Courts Act 1947, s 75.
5 Section 76.
6 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [4] and [16] as cited by Asher J in Atkinson v Ministry of Social Development [2009] NZFLR 625 (HC) at [16].
7 Family Proceedings Act 1980, s 64A.
relationship property to start afresh. That has not happened in this case. Therefore, some explanation of the relationship property proceedings is required to fully appreciate the issues dealt with in this judgment.
[7] The parties married in 1989. Before the marriage Mr Clayton owned a sawmilling business, Claymark Industries Ltd, which owned land at Vaughan Road in Rotorua. He also owned land at Banksia Place on which the family home was later built. After the marriage the business expanded, acquiring new businesses and property. There were financial difficulties in the late 1990s and the business was restructured, with the land and buildings transferred to the Vaughan Road Property Trust (VRPT) and kept separate from the business operations.
[8] In the early 2000s there was further restructuring for the purposes of tax avoidance and creditor protection (including any potential relationship property claim that might arise in the future). Part of the restructuring included the establishment of the Claymark International Trust, through which sales to the US would be conducted.
[9] Mr and Mrs Clayton separated in 2006. Under an informal arrangement Mrs Clayton remained in the family home in Banksia Place. Mr Clayton continued to meet household and vehicle expenses and the cost of maintaining the couple’s two children, including school fees. He also paid Mrs Clayton $200 per week. Mrs Clayton was working full-time earning $42,000 per annum.
[10] In 2007 Mrs Clayton began proceedings under the Property (Relationships) Act 1976 (PRA) seeking to set aside a pre-nuptial agreement and asserting that the Claymark business interests controlled by Mr Clayton through the network of companies and trusts were relationship property which she was entitled to share. The companies include Claymark Industries Ltd, Claymark International Ltd, the Claymark Trust and the VRPT. The trusts include two “education trusts” for the couple’s children settled before separation and four trusts settled post-separation – the Denarau Resort Trust, the Sophia No 7 Trust, the Chelmsford Trust and the Lighter Quay 5B Trust. Mrs Clayton claims that the trusts’ assets are effectively property in Mr Clayton’s hands and therefore relationship property.
[11] The litigation raised issues as whether some or all of these assets were relationship property and the basis on which they should be valued. Mrs Clayton maintained that the various business interests and assets are worth in the order of
$28m. Mr Clayton maintained that, as a result of high debt and difficult trading conditions, his equity in the business group was negative.
Consent maintenance orders: March 2010
[12] The parties’ marriage was dissolved in March 2009. In October 2009
Mrs Clayton applied under ss 64 and 82 of the FPA for interim, past and future maintenance. One of the main reasons for this application was Mrs Clayton’s need to fund her increasing legal costs in the relationship property claim. That litigation was turning out to be a much more substantial and complex exercise than she had envisaged. At that point she owed over $98,000 in legal fees.
[13] The parties reached an agreement which involved an interim distribution of relationship property to Mrs Clayton by way of the family home, which would provide her with the means of funding her legal costs. Mr Clayton was to continue paying the existing level of maintenance and meet the costs associated with the property. The agreement was the subject of consent orders made by the Family Court on 18 March 2010.
[14] In 2011 Mrs Clayton also received an interim distribution of $642,495 from the Lighter Quay 5B Trust.
The Family Court decision on relationship property: 2 December 2011
[15] In the meantime, the parties’ relationship property litigation was making its way through the courts. In the Family Court Judge Munro set aside the pre-nuptial agreement and determined a number of issues relating to the identification and valuation of relationship property.8 She determined that the value of the Banksia Place property transferred to Mrs Clayton under the consent orders in March 2010 was $850,000. In relation to the business assets the Judge held that all the property
owned by Mr Clayton had been acquired out of his separate property. However, the increase in value of that separate property over and above $500,000 was relationship property to be shared equally.
[16] The Judge directed that the fair market value of Mr Clayton’s business interests assessed at the relevant date (31 March 2011) by the agreed capitalisation of earnings methodology should proceed on the basis of an EBITDA of $6.75m and a multiple of 6.25. In relation to the trusts the Judge held that Mrs Clayton was entitled to a half-share in the equity of the two education trusts and the four post- separation trusts and that the VRPT was a sham so that its assets were to be treated as vesting in Mr Clayton. Final quantification of Mrs Clayton’s entitlement as a result of these and the other findings was left to the parties to resolve.
Appeal against the Family Court relationship property decision: 22 February 2013
[17] Mr Clayton and the trusts appealed and Mrs Clayton cross-appealed the Family Court decision. In the High Court Rodney Hansen J agreed that the post- marriage increase in Mr Clayton’s separate property was relationship property to be shared equally and that the valuation issues had been correctly determined in the Family Court. The Judge also agreed that Mrs Clayton was entitled to a half-share in the current equity of the two education trusts. In relation to the VRPT the Judge considered that, although the Trust was not a sham, as the Family Court Judge had found, it was illusory because the powers conferred on Mr Clayton by the trust deed allowed him to deal with the trust property as if the trust had never been created.
[18] The Judge remitted a number of other matters to the Family Court for rehearing. These included the valuation of the Banksia Place property and the issue of remedy in relation to the Sophia No 7 Trust. The appeals in relation to the Denarau Resort, Chelmsford and Lighter Quay 5B trusts were allowed and those matters also remitted back.
The Court of Appeal decision on relationship property: 26 February 2015
[19] Mr Clayton appealed the High Court’s decision. The Court of Appeal delivered its decision the day before the hearing of the present appeal.9 Each party had a measure of success but the overall effect of the Court of Appeal’s decision was favourable for Mrs Clayton.
[20] Although the Court of Appeal held that the VRPT was neither a sham nor illusory (there being no difference between the two), the Court concluded that Mr Clayton’s power to appoint himself the sole beneficiary of the trust constituted relationship property with the result that the net value of the trust’s assets as at
31 March 2011 was brought into the pool of relationship property.
[21] In relation to the education trusts, the Court of Appeal held that there had been dispositions of property by Mr Clayton to those trusts for the purpose of defeating Mrs Clayton’s rights with the result that Mrs Clayton was entitled to half the equity of those trusts. As to the post-separation trusts, the Court held that there had been dispositions of property for the purpose of defeating Mrs Clayton’s claim in relation to the Denarau Resort Trust, the Sophia No 7 Trust and, in respect of one loan, to the Chelmsford Trust. The High Court’s findings in relation to another loan to the Chelmsford Trust by VRPT and dispositions to the Lighter Quay 5B Trust were not upheld. The approach taken by the Family Court and High Court to the valuation of business interests based on EBITDA of $6.7m and a multiple of 6.25 were upheld.
[22] Mr Clayton has applied for leave to appeal to the Supreme Court.
Family Court decision varying consent orders and making final maintenance order:
18 June 2014
[23] In amongst all this, there was litigation regarding the maintenance arrangements. Mrs Clayton claimed that difficulties arose following the Family Court’s relationship property decision, with Mr Clayton refusing to pay various expenses such as health insurance and vehicle repairs that he had previously been
meeting.10 In March 2013 Judge Munro made an order requiring Mr Clayton to reimburse Mrs Clayton for vehicle repairs and to meet all vehicle expenses pending discharge of the consent orders.
[24] Over the 2013/2014 Christmas period Mrs Clayton’s vehicle, a Mercedes ML320, was damaged again. There was a dispute over when and whether Mrs Clayton would be able to uplift the vehicle from the repairer. This led to her applying in January 2014 without notice to vary the interim maintenance orders that had been made by consent to require the release of the vehicle. Judge Munro made that order. Mr Clayton applied for a rehearing. By that point, however, the vehicle had been written off and the issue of a vehicle for Mrs Clayton was left for determination at the same time as the hearing of Mrs Clayton’s amended application to vary the consent orders.
[25] In the amended application Mrs Clayton sought periodic maintenance of
$18,500 per month from May 2012 until settlement of the relationship property claim. The stated grounds included that her capital had been exhausted because current maintenance arrangements were inadequate to meet her reasonable needs in terms of living and legal expenses. In particular, she had incurred significant debt in relation to professional fees. In an affidavit supporting the application Mrs Clayton described her financial situation: the sale of the family home had produced
$722,930.22. She had received an interim distribution of $642,000. She had received $271,347.75 in costs from Mr Clayton in relation to the substantive Family Court proceedings. However, her professional fees to date were $855,113.86, the relationship property appeal still lay ahead and she had no funds to meet that cost.
[26] Against Mr Clayton’s assertion that Mrs Clayton did not require any further spousal maintenance, having already received some $1.6m by way of interim distributions and maintenance, the Judge made orders that would expire upon resolution of the relationship property proceedings for periodic maintenance of
$5,000 to meet Mrs Clayton’s reasonable personal needs and a further $10,000 per
month to cover her legal and accounting costs. The Judge also ordered that
Mr Clayton continue to make available to Mrs Clayton an automatic, late-model vehicle suitable to her needs. These orders are the subject of the present appeal.
Mr Clayton’s appeal
First ground of appeal – factual findings
[27] Ms McCartney identified four findings of fact in the decision of Judge Munro that she submits were either erroneous or against the weight of evidence. The first was the finding at [9] of the judgment that:
Mr Clayton retains control of all of the relationship property other than the distribution that was made in 2011 pursuant to the Family Court judgment. Mrs Clayton received approximately $642,000 as partial settlement.
[28] Ms McCartney argued that this finding did not take into account the fact that Mrs Clayton had received the family home which was valued at between $850,000 and $950,000 at the date of separation, household chattels and a further $30,000 paid at separation and that the very question of whether further relationship property existed was a contested one. I agree that the Judge should have made specific mention of Mrs Clayton’s receipt of the family home (albeit the value was a matter that had been remitted to the Family Court) and $30,000 in cash. However, by the time I heard the appeal the Court of Appeal had delivered its decision, the effect of which is that the assets of the VRPT, two post-separation trusts (the Denarau Resort Trust and the Sophia No 7 Trust) and dispositions made to the two education trusts are relationship property. In these circumstances, although the Judge misstated the extent to which Mr Clayton retained control of the relationship property, the end result is not affected.
[29] The second finding said to be an error is the finding that Mrs Clayton had been deprived of her share of capital in circumstances where the share of relationship property had not been determined and there was a large variation between the parties as to quantification of the Family Court judgment. Presumably this is a reference to [11] in which the Judge said:
It is Mrs Clayton’s position that Mr Clayton continues with his luxurious
lifestyle. She claims that due to the ongoing litigation, she had been
deprived of her share of capital and has had to live in reduced circumstances, in addition to having to fund ongoing litigation.
[30] This paragraph is located in the section of the judgment in which Judge Munro refers to the relevant provisions under the FPA and outlines Mrs Clayton’s case. It is obvious from [11] that the Judge was not making a finding but merely recording Mrs Clayton’s position. Nevertheless, it is also evident from the Judge’s later conclusion that she accepted that Mrs Clayton had been deprived of her share of capital but such a finding could not be regarded as an error; at the time it was made the position regarding the parties’ relationship property was as set out in Rodney Hansen J’s decision delivered in February 2013. Under that judgment it was clear that Mrs Clayton had been deprived of her share of capital. That remains the position now by virtue of the Court of Appeal’s judgment. It is true that there is still a significant issue as to quantification and that Mr Clayton has sought to appeal to the Supreme Court but as matters stood both in the Family Court and High Court and as they stand now it is correct to say that Mrs Clayton has been kept out of her capital. More significantly, for present purposes it has cost her a substantial amount to reach the point of being able to identify which property is relationship property in order to embark on the exercise of quantifying its value.
[31] The third contested finding is the finding that the parties had a luxurious lifestyle during their marriage. This is presumably the finding at [10]:
When the parties were living together, they had a luxurious lifestyle, which involved overseas travel, entertaining, the purchase of expensive European cars, expensive jewellery and generally a high standard of living. This was all controlled by Mr Clayton and the couple’s lifestyle was funded through his business.
[32] Ms McCartney submitted that this finding was against the weight of evidence. First, it was strongly challenged by Mr Clayton in his evidence. In his affidavit sworn on 30 November 2009 Mr Clayton denied that he and Mrs Clayton had an extravagant lifestyle, saying that he was “careful with my expenditure and I endeavoured to ensure that the applicant was also similarly careful”. He pointed out that although the family travelled to Fiji each year they stayed at comfortable but not luxurious hotels and that, apart from a business trip to Germany which Mrs Clayton accompanied Mr Clayton on, there were no other significant overseas holidays.
However, Mr Clayton was not cross-examined on this because he did not appear at the hearing.
[33] Ms McCartney pointed out, secondly, that Mrs Clayton’s own evidence was inconsistent because, whilst describing the luxurious lifestyle she had enjoyed during her marriage and claiming that she would not think twice about buying luxury grocery items, eating out and purchasing whatever clothes she wished, she also claimed that Mr Clayton was frugal and niggardly.
[34] There is, clearly, a subjective element in determining whether a lifestyle is luxurious. But there seemed no disagreement that the parties entertained, drove expensive European cars and generally enjoyed a high standard of living. It is evident that the money for these items (travel, cars and entertaining) was funded from Mr Clayton’s businesses. I therefore do not accept that the Judge’s finding was against the weight of evidence.
[35] The fourth finding under challenge is the finding that Mrs Clayton had to live “in reduced circumstances”. This appears to be a reference to [11] which I have already set out and which was not actually a finding made by the Judge. I accept, however, that it is implicit in the Judge’s later findings that she agreed that Mrs Clayton’s circumstances were less than when she had been married. That finding was justified. The point was not, as Ms McCartney argued, just that there had been a reduction in the value of the home in which Mrs Clayton was living. The real difference is that Mrs Clayton now has substantial debt as a result of having to fund the relationship property proceedings and that debt impacts on her living circumstances.
[36] The first ground of appeal therefore fails.
Second ground of appeal – error in finding a qualifying circumstance under s 64
[37] Under s 64(1) a spouse or partner is liable to maintain the other spouse or partner following dissolution:
… to the extent that such maintenance is necessary to meet the reasonable
needs of the other spouse, civil union partner or de facto partner, where the
other spouse, civil union partner or de facto partner cannot practicably meet the whole or any part of those needs because of any one or more of the circumstances specified in subsection (2).
[38] The relevant circumstances identified at s 64(2) are:
(a) The ability of the spouses, civil union partners, or de facto partners to become self-supporting, having regard to—
(i) the effects of the division of functions within the marriage or civil union or de facto relationship while the spouses, civil union partners, or de facto partners lived together:
(ii) the likely earning capacity of each spouse, civil union partner, or de facto partner:
(iii) any other relevant circumstances:
...
(c) The standard of living of the spouses, civil union partners, or de facto partners while they lived together.
[39] Taken together these sections mean that a party’s liability to maintain exists only where two conditions are satisfied – first, that such maintenance is necessary to meet the reasonable needs of the other party; secondly, that the other party’s inability to meet the whole or any part of those needs is caused by one of the “qualifying
circumstances” set out at s 64(2).11 Section 64(2)(a)(iii), which is relevant in this
case, has its origins in amendments made to the Act in 2002 designed to allow the Court to consider a wider range of circumstances in determining maintenance and provide the Court with greater flexibility in doing so.12
[40] The Judge’s findings as to Mrs Clayton’s reasonable needs were:
[17] Mrs Clayton has filed an affidavit of financial means and their sources. Her income for the 52 weeks preceding the hearing, which includes her salary of $46,000, and maintenance payments from Mr Clayton of
$10,400, gives an annual income of $56,400 (leaving aside the $1000 board payment that she received when her daughter and son in law boarded with
her temporarily). She has no personal assets other than chattels. She has settled a family trust of which she is a discretionary beneficiary, and that trust has purchased the home in which she lives, valued at $427,000.
11 Slater v Slater [1983] NZLR 166 (CA) at 173 per Richardson J.
12 Matrimonial Property Amendment Bill 1998 and Supplementary Order Paper No 25 (select committee report) at 20, as discussed by the Court of Appeal in C v G [2010] NZCA 128, [2010] NZFLR 497 at [34].
[18] Her expenses for the 52 weeks prior to hearing were $127,478 which includes her legal and accounting fees for that period of time. They total
$72,298, leaving $55,180, being her personal expenses. With the exception of the legal and accounting costs, the affidavit discloses that she has
managed to meet her personal living costs from her income, including the maintenance paid by Mr Clayton.
[19] Mrs Clayton has also filed an anticipated budget, including provision for ongoing legal and accounting fees of $12,889.94 per month. Excluding those fees, the monthly shortfall is $6,739.11. Mrs Clayton has calculated her costs on the basis that she would take over the costs of running a car and pay her own medical insurance. The significant difference between her actual costs and her anticipated budget are that her actual costs have been limited to her income and it is her evidence that she is unable on her income and without access to capital to lead the lifestyle that she was able to lead prior to separation, or indeed that she considers she is entitled to lead. Her claim includes such discretionary items as $1000 per month for overseas travel, $700 for alcohol and entertaining as well as $300 for “gifts and extras” and $1,500 per month for clothing.
[20] The issue is whether her claim is reasonable, and whether it is reasonable to require Mr Clayton to pay such maintenance to cover these needs. It is clear that pending resolution of relationship property proceedings a party should not be reduced to subsistence level, particularly when the other party has access to all of the capital. In my view, Mrs Clayton can expect to continue to live a reasonably comfortable lifestyle pending resolution of the ongoing litigation, but her anticipated monthly budget in my view exceeds what could be classified as reasonable needs. For that reason I find that the amount that Mr Clayton should pay by way of ongoing maintenance to meet Mrs Clayton’s reasonable needs is $5,000 per month.
(emphasis added)
[41] The Judge went on to hold that Mr Clayton should also pay Mrs Clayton
$10,000 per month to cover her ongoing legal and accounting costs.
[42] The issue on this ground of appeal is whether, in respect of the $5,000 per month for personal expenses and $10,000 per month for legal and accounting expenses, the Judge erred in finding that Mrs Clayton came within one of the qualifying circumstances set out at s 64(2).
[43] Ms McCartney submitted that Judge Munro appeared to have approached the issue of maintenance on the basis of either s 64(2)(a)(ii), namely Mrs Clayton’s likely earning capacity, or s 64(2)(c), namely the spouses’ standard of living while they lived together. However, she argued that Mrs Clayton could not satisfy either of the conditions for an order for maintenance; first, maintenance was unnecessary as
the evidence showed that Mrs Clayton could meet her reasonable needs from her income as a legal secretary; secondly, the Judge erred in having regard to the standard of living during the marriage in determining Mrs Clayton’s reasonable needs and that the budget put forward by Mrs Clayton was excessive. She emphasised that at the time of the maintenance hearing it had been more than five years since the parties’ marriage was dissolved.
[44] Mrs Clayton’s argument was that, although she worked full-time earning
$46,000 per annum, it was unreasonable to suggest that she should become self- supporting while the relationship property was substantially undivided and that her budget was reasonable.
[45] In terms of Mrs Clayton’s legal costs, I held in my first judgment that the “catch-all” provision in s 64(2)(a)(iii) can extend in appropriate cases to include the need to resolve a relationship property dispute between the spouses.13 Therefore, a qualifying circumstance – litigation that is so expensive as to prevent a party from becoming self-supporting and being able to meet her reasonable needs – does exist in this case to allow Mrs Clayton to receive legal costs as part of her maintenance from Mr Clayton. Furthermore, on the evidence, the figure of $10,000 for legal expenses is reasonable. Given the size of these payments, however, I think it reasonable to
require an undertaking that they will be directed solely towards legal and accounting fees and disbursements.
[46] The $5,000 per month for personal expenses raises more difficult issues. Ms McCartney submitted that the Judge took a wrong approach because she appears to have settled on that sum on the basis that Mrs Clayton was unable “to lead the lifestyle that she was able to lead prior to separation, or indeed that she considers she is entitled to lead” on her income and without access to capital. I do not accept this submission. On my reading of the judgment the Judge did not determine Mrs Clayton’s reasonable needs by reference to the standard of living during the marriage (which Mrs Clayton characterises as unusually high). Rather, she took the
benchmark of a “reasonably comfortable lifestyle”
13 Clayton v Clayton [2015] NZHC 550 at [12] and [13].
[47] In the circumstances, this approach cannot be criticised. Three courts have now held that Mrs Clayton has an entitlement (albeit unquantified) to relationship property that is controlled by Mr Clayton and if Mrs Clayton had received even a portion of that relationship property, she would not require further assistance to maintain a reasonably comfortable lifestyle. In these circumstances it cannot realistically be argued that she should enjoy less than a “reasonably comfortable” lifestyle while Mr Clayton pursues his appeals.
[48] I find that in the unusual circumstances of this case, there does exist a qualifying circumstance that entitles Mrs Clayton to maintenance that covers her personal expenses, namely Mrs Clayton’s inability to meet her reasonable needs because she has been unable to access her share of relationship property, which is an “other relevant circumstance” under s 64(2)(a)(iii).
[49] However, Ms McCartney submitted that, in any event, the level of expenditure that the Judge accepted as reasonable was, in fact, excessive. The submission was based on the fact that Mrs Clayton had been living on a budget of around $58,40014 per year for personal expenses before the hearing, but produced an anticipated budget for personal expenses of $108,300. It is particularly notable that the anticipated budget should be so high when the previous actual budget allowed
$7,000 for child maintenance, which is no longer required. The anticipated annual budget included substantial and inexplicable increases for some items; for example, the allowance for clothing increased from $4,500 to $18,000 and the budget for food and household supplies which had been running at $7,000 increased to $14,400. In addition, various items of expenditure were included that had not appeared in the original budget, including $12,000 for travel and holidays and $4,200 for alcohol and entertaining.
[50] The Judge did not order maintenance to the extent requested by Mrs Clayton, which would have been at a level of more than $6,000 per month, but still allowed maintenance on a very generous scale. Combined with Mrs Clayton’s net income of
around $36,000, the maintenance order provides Mrs Clayton with a budget for her
14 The Judge put the figure at $55,180 but there appear to be calculation errors in the budget; for the purposes of this hearing the difference is immaterial.
personal expenses of nearly $100,000 per year. The Judge did not fully articulate the basis on which she approached Mrs Clayton’s reasonable needs, simply making a broad assessment of what was reasonable and awarding maintenance on that basis.
[51] When comparing Mrs Clayton’s old budget with her anticipated budget, it is significant that she is now meeting costs associated with property maintenance, vehicle expenses and health care that were largely met by Mr Clayton under the previous arrangement. They alone add approximately $17,000 per annum to her living expenses. Therefore, even if the items said by Ms McCartney to be excessive were removed from the budget, there would still be a shortfall between Mrs Clayton’s income and her current reasonable needs because her circumstances have changed since she was able to live a reasonably comfortable lifestyle on
$58,400 per year.
[52] Nevertheless I accept that there are items in the anticipated budget that are either inexplicably high or appear to be duplicated (such as separate items for both alcohol and entertainment). Out of necessity, as the Judge did, I find that the most practical course is to make a broad assessment. My assessment is that a reasonable budget in this case would see personal expenses in the order of $68,400 per year. Taking Mrs Clayton’s net income of $36,000 into account, this leaves a shortfall of
$32,400 per year, requiring maintenance from Mr Clayton of $2,700 per month for personal expenses.
[53] This ground of appeal therefore succeeds in part. The maintenance order requiring Mr Clayton to pay $5,000 in personal expenses will be quashed and substituted with an order for maintenance of $2,700. I was not addressed on whether the payments in excess of what I have found to be reasonable should be repaid and make no finding on that possibility.
[54] As a final point Ms McCartney submitted that, although Mrs Clayton had claimed that the interim distribution of $642,000, the $250,000 from the proceeds of Banksia Place after the purchase of her new home, and the $30,000 paid to her on separation (a total of $922,000) had all been used in legal fees, the Judge had failed
to take into account the $200,000 that Mr Clayton had paid in costs from the Family
Court proceedings and $42,000 from the High Court appeal.
[55] I agree that the Judge should have recognised the costs paid by Mr Clayton and treated them as having reduced Mrs Clayton’s debt in relation to legal expenses. However, both that debt and the costs related to past expenses (a matter that I come to later), whereas the Judge was concerned at this point with ongoing maintenance. It is evident that the legal costs associated with the forthcoming appeal were very substantial. Mrs Clayton referred to her counsel’s estimate of $100,000 for that appeal. The Judge did not make any error in concluding that Mrs Clayton’s earning capacity could not stretch to meet those expenses.
Third ground of appeal – failure to undertake the mandatory analysis required by s 65
[56] Ms McCartney submitted that, even if a qualifying circumstance under s 64 had been established, the Judge failed to undertake the mandatory analysis then required by s 65, which identifies the matters that “a court must have regard to in determining the amount [of maintenance] payable”. The matters to which the court must have regard are set out at s 65(2) as follows:
(a) The means of each spouse, civil union partner or de facto partner, including –
(i) Potential earning capacity:
(ii) Means derived from any division of property between the spouses or de facto partners under the Property (Relationships) Act 1976:
(b) The reasonable needs of each spouse, civil union partner, or de facto partner:
(c) The fact that the spouse, civil union partner, or de facto partner by whom maintenance is payable is supporting any other person:
(d) The financial and other responsibilities of each spouse, civil union partner, or de facto partner:
(e) Any other circumstances that make one spouse, civil union partner, or de facto partner liable to maintain the other.
[57] Ms McCartney submitted that the Judge failed to consider, either adequately or at all, Mrs Clayton’s reasonable needs, Mr Clayton’s ability to pay, the fact that Mr Clayton is now supporting his children and his current partner, and that Mr Clayton has other financial responsibilities in relation to the Claymark business.
[58] I have already set out my findings as to Mrs Clayton’s reasonable needs. I therefore turn to the Judge’s failure to consider Mr Clayton’s means and his other obligations.
[59] Mr Clayton’s ability to make further payments was put in issue when Mrs Clayton first applied for maintenance in 2009. In a “notice of defence” (presumably a notice of opposition), Mr Clayton said plainly that:
I am unable to afford to make increased maintenance payments to the applicant.
[60] In his affidavit in opposition Mr Clayton went to some length to describe the financial difficulties facing his business and said:
I simply do not have the resources to make further payments to the applicant
… I do not have any spare cash and am unable to make drawings from
Claymark … I also have a number of personal debts including my legal fees.
Presently I owe $143,806.17 to Buddle Findlay which I am endeavouring to pay in instalments. As I have stated previously I also have a contingent liability of approximately $37m under my guarantee of Claymark’s debts.
[61] In a second affidavit filed in February 2010 Mr Clayton referred to his salary of $280,000 and to the fact that he drew amounts in excess of that in the 2009 year. He explained that those drawings were made against his current account, reducing amounts owed to him by the Claymark Group. In that affidavit Mr Clayton again referred to the financial difficulties facing the Claymark Group, noting that all of the group’s properties were collateral against bank borrowings.
[62] However, the issue was not raised in either the “notice of defence” or the affidavit in opposition filed in March 2014 in response to Mrs Clayton’s application to vary the 2010 consent orders. Mr Clayton’s affidavit was directed primarily to the issue of Mrs Clayton’s car. It is possible that either he or his counsel (not the same counsel as on appeal) thought that the matter would proceed on the basis of the
affidavits filed in 2009 and 2010. However, any such misunderstanding was corrected at the conference held with the Judge about three weeks before the hearing. The Judge’s minute of that conference records that:
[6] Mr Clayton has been served with [Mrs Clayton’s affidavit in support] and has filed an affidavit in reply. He raises no issue in his affidavit as to his ability to pay increased maintenance. He rather raises issues in terms of Mrs Clayton’s reasonable needs. That will be the issue for the hearing therefore.
[7] Mr Clayton is not going to be available on 19 May. He was advised, through his counsel on 24 March, of the date of hearing. It is only today apparently that he has advised his counsel, Ms Harley, that he will be out of the country. It would have been incumbent on him to advise his lawyer of that much earlier if he was wanting to take part in that hearing.
[8] Given that the issue of his ability to meet maintenance has not been raised by him it is therefore not an issue at the hearing. The hearing will proceed on the basis of establishing Mrs Clayton’s reasonable needs.
[63] Among the directions made by the Judge at that hearing was the following:
Given that Mr Clayton will not be present I grant leave for submissions to be filed on his behalf on the issues that he has raised and that is not to include his ability to pay maintenance, given that the opportunity for him to do that has now passed, given that he has filed an affidavit in response.
[64] It appears that Mr Clayton’s then counsel, Mrs Harley, did not express any disagreement with the hearing proceeding on this basis. Regrettably, Mrs Harley, who was seriously ill at the time of the hearing, died a few months later and so is unavailable to assist on this point.
[65] The Judge made her decision on the basis that there was no issue over whether Mr Clayton could afford to pay maintenance, noting at [14] that:
In this case the issue to be determined is what constitutes Mrs Clayton’s reasonable needs. Mr Clayton’s ability to pay maintenance was not raised in his defence and he was not present at the hearing. It was directed at a pre- hearing conference that given that he had raised no issue as to his financial circumstances, the hearing would proceed in his absence, the only issue being what constituted her reasonable needs in the circumstances.
[66] In these circumstances the Judge’s approach on this point is understandable.
However, I find this a difficult issue because it is plain from the totality of the
evidence,15 and from the agreed statement of facts produced by counsel for the purposes of this appeal, that there is an issue over whether Mr Clayton can afford to continue paying maintenance at the current level.
[67] Ms McCartney submitted that orders made in July 2014 (and subsequently varied) under s 43 PRA restraining the disposition of the property of any company or trust associated with Mr Clayton had far-reaching effects and have affected Mr Clayton’s financial position, given that his personal obligations had been met, to a significant extent, by drawings from trusts or companies forming part of the Claymark group.
[68] Although this change in circumstances was not put forward as a specific ground of appeal it was signalled in an application by Mr Clayton to adduce further evidence for the purposes of the appeal. That application was ultimately resolved on the basis that counsel would file an agreed statement of facts, which they did. As I noted, it is evident from that statement that the issue of Mr Clayton’s ability to pay does arise in the context of the s 65 argument. However, I do not consider that the outcome would be different even if this issue were taken into account.
[69] Mr Clayton’s position, as described by Ms McCartney, can be summarised as follows: his personal salary is capped at $280,000 ($186,000 after tax). However total income and drawings are, by agreement with the group’s bank, available up to
$350,000 before tax. Mr Clayton has some substantial personal obligations such as a life insurance policy required by his lender ($33,443 per annum) and his own legal costs (which are in arrears). In addition, Ms McCartney pointed out that Mr Clayton has the responsibility of keeping the business group afloat, which requires significant effort on his part. He has personally guaranteed the group’s debt which currently sits at around $37m.
[70] Ms McCartney also pointed to the fact that Mr Clayton has reached the brink
of bankruptcy twice over payment of costs awards and rejected Mrs Clayton’s
characterisation of this state of affairs as demonstrating how difficult Mr Clayton is,
15 Counsel referred, without objection, to the affidavits filed in 2009 and 2010 in relation to Mrs
Clayton’s application for interim, present and past maintenance.
submitting instead that, given his significant exposure to company debt, Mr Clayton would not have allowed this state of affairs to exist unless he genuinely was financially pressed. She also pointed out that the companies’ lenders have been sufficiently concerned to appoint an independent committee to oversee the operation of the business.
[71] In addition, Ms McCartney raised the fact that Mr Clayton continues to support his children and his current partner, though there was no evidence provided in support of the latter responsibility.
[72] By agreement with the ASB and with Mrs Clayton, Mr Clayton has been borrowing from VRPT to meet his maintenance obligations so those payments are not being met from his personal salary. So although Mr Clayton clearly could not meet his maintenance obligations from his personal income he does have a source from which those obligations can be met. He is effectively accessing his capital to do so. In some circumstances a person in Mr Clayton’s position can be required to access capital assets for this purpose and I consider this case to be one in which it is reasonable to require that.
[73] On the basis of the Court of Appeal’s decision, the VRPT represents relationship property. As I have already discussed, if Mrs Clayton had had access to that asset earlier she would have been in a position to meet her own living and legal expenses without recourse to maintenance. As a result, I am not satisfied that the change in circumstances resulting from the restraining orders could have the effect of depriving Mr Clayton of the ability to met maintenance that is otherwise reasonable for him pay.
Fifth ground of appeal16 – failure to consider unreasonableness and reasonableness under s 64A(2)
[74] Finally, Ms McCartney submitted that Judge Munro erred because she failed to consider the factors set out at s 64A(2). That section provides that, despite the
“clean break” principle set out at s 64A(1), after a relationship ends a spouse will be
16 The fourth ground of appeal was determined in Clayton v Clayton [2015] NZHC 550.
liable to maintain the other spouse to the extent necessary to meet the latter’s
reasonable needs:
… if, having regard to the matters referred to in subsection (3),—
(a) it is unreasonable to require party B to do without maintenance from party A; and
(b) it is reasonable to require party A to provide maintenance to party B.
[75] The matters set out in subsection (3) are the spouses’ ages (s 64A(3)(a)); the duration of the marriage (s 64A(3)(b)); and the ability of the spouses to become self- supporting having regard to the effect of the division of functions while they were living together, the likely earning capacity of each spouse, their respective childcare responsibilities and any other relevant circumstances (s 64A(3)(c)).
[76] Ms McCartney pointed to case law to support her submission that where there are no dependents and both parties have the ability to work, the period of time after which it is reasonable for a party to become self-supporting is not more than five years. In this case, the marriage was dissolved in 2009, Mrs Clayton was 43 at that point, and her ability to become self-supporting has not, it is submitted, been affected by any of the factors listed at s 64A(3)(c).
[77] Although Judge Munro may not have explicitly considered the test at s 64A(2), it is implicit in her judgment that she did find it would be unreasonable for Mrs Clayton to do without maintenance and it was reasonable to require Mr Clayton to pay it. For the reasons I have already canvassed I consider that it is reasonable for Mr Clayton to pay maintenance.
Mrs Clayton’s cross-appeal
Refusal to allow past maintenance
[78] In her application for variation of the maintenance orders that were made by consent in 2010, Mrs Clayton applied for “a further order for past maintenance”. In counsel’s written submissions at the May 2014 hearing Mrs Clayton sought to have increased maintenance payments backdated to May 2012 – the point at which she
ceased to have the benefit of the former family home. I was told that the question of past maintenance was also addressed in oral submissions.
[79] However, the Judge did not address this issue in her decision. Mrs Clayton applied to have the judgment recalled so that it could be addressed. In a minute dated 9 July 2014 the Judge accepted that she had not addressed the issue but declined to recall the judgment and instead gave reasons in the minute for not having allowed the claim for past maintenance:
Mr Clayton continued to pay maintenance as per the previous order, albeit with some difficulties. Some provisions of the interim order referred to expenses related to the house retained by Mrs Clayton, which was sold in
2012 and so were no longer payable.
On balance I was not satisfied that there were sufficient grounds to justify an award of past maintenance and did not accept that claim.
[80] Ms Hosking submitted that the Judge failed to take into account the fact that the circumstances giving rise to the application arose in May 2012 and took into account an irrelevant factor, namely Mr Clayton’s compliance with the 2010 consent orders. I consider that there is merit in both points.
[81] I consider that the Judge did make an error in her treatment of this issue. If the judgment could not properly be recalled and the issue dealt with then, nor was it possible to deal with it by way of a minute. I also accept Ms Hosking’s criticism of the reasons that were given. I therefore turn to consider this issue afresh.
[82] In the 2009 application for interim, past and future maintenance orders, which led to the 2010 consent orders, Mrs Clayton sought a lump sum for past maintenance of $108,498.70. Although not specified, the application was, presumably, brought in reliance on s 69(1)(c) FPA, which allows for lump sum payments to be ordered in respect of past maintenance, and s 70, which permits maintenance orders to be made following the dissolution of a marriage.
[83] The 2014 application for variation of the consent orders was made pursuant to s 99 FPA, which permits the variation of maintenance orders where the Court “is satisfied that it ought to do so having regard to the principles of maintenance set out
in sections 62 to 66 and in section 81”. An order increasing the amount payable may, if the Court thinks fit, take effect from a date earlier than the date of the order for variation though not earlier than the date on which the grounds for the variation arose.17
[84] There was a slight difference between the parties as to the correct approach to be taken on an application under s 99. This arose from a difference between the approaches taken by Tipping J in Frost v Frost18 and by Rodney Hansen J in B v B19 regarding the existence of an onus of proof. In Frost v Frost Tipping J appeared to treat s 99 as not giving rise to an onus of proof but merely requiring the Judge to be satisfied:20
In my view when an application is made to vary the terms of a registered maintenance agreement the Court is entitled to consider what circumstances have led to the application for variation, even if those circumstances be simply the effluxion of time. Although the jurisdiction under s 99 is not circumscribed by reference to a change in circumstances or any other criterion, it can hardly have been Parliament’s intention to facilitate a change to an order of the Court or an agreement of the parties unless something had happened to justify that change or there was or had become something inherently unfair or unreasonable in the terms of the agreement which justifies a re-examination.
[85] In B v B Rodney Hansen J treated s 99 as imposing a specific onus on the applicant:21
The onus is on the applicant to show that the order should be varied. That requires proof that there has been a change of circumstances from those prevailing at the time the original order was made. The change must have led to a situation where the variation of the order is required having regard to the relevant statutory provision.
[86] I agree with Tipping J that s 99 contemplates merely that there will have been a change in circumstances that justifies varying an existing order or agreement. It is not a matter on which one party or the other bears an onus of proof, though in a practical sense it will usually be the applicant who places information before the
Court to satisfy the judge that an order should be varied. This approach is consistent
17 Section 99(3).
18 Frost v Frost (1989) 5 FRNZ 655 (HC).
19 B v B HC Dunedin CIV-2011-412-328, 26 September 2011.
20 At 659.
21 At [13].
with the statement made by the Court of Appeal in M v B in the context of the PRA and which is equally apt in the context of maintenance proceedings.22 Robertson J observed that:
The scheme of the PRA made it clear that, “although there is not a fully inquisitorial system, a Court needs only to be satisfied about a state of events which has existed, or which exists. Notions of onus of proof fit uncomfortably within this legislative regime.23
[87] I have already described the circumstances leading to Mrs Clayton’s application to vary the orders made in March 2010.24 The grounds cited for the application included that:
The grounds for variation existed as at May 2012 (if not earlier) in that I sold Banksia Place at that time and incurred further significant debt in regard to professional fees.
[88] In her affidavit in support of the application, Mrs Clayton described the 2010 consent order as having been made to satisfy her immediate need for property against which to borrow to meet legal fees. It was envisaged that the issues between the parties would be resolved at mediation within a reasonably short time. However, mediation was unsuccessful and the legal fees escalated to the point where they consumed all of the equity in the Banksia Place property. Mrs Clayton acknowledged that she had received money from the Lighter Quay Trust but said that those funds had also gone to cover the shortfall between her income and expenses, particularly the legal and accounting fees. She asserted that she had received from Mr Clayton (presumably in both property and income) a total of $1,365,349 but that her legal and accounting fees alone had totalled $855,113.86.
[89] Ms McCartney did not accept that the ongoing litigation and costs associated with it amounted to a change in circumstances. She submitted that there was no change in circumstances justifying a variation because at the time of the consent orders in 2010 both parties contemplated that Mrs Clayton would sell the Banksia Place property in which case Mr Clayton would no longer be responsible for the
outgoings.
22 M v B [2006] 3 NZLR 660 (CA).
23 At [39].
24 At [28]ff above.
[90] I accept that at least from the time the Banksia Place property was sold, Mrs Clayton was unable to meet her ongoing legal expenses from her income and nor did she have sufficient capital for that purpose. Had the application for maintenance been resolved in 2010 on the basis that Mrs Clayton would continue to incur legal fees at a significant rate for at least another five years and probably longer, the outcome would almost certainly have been different. At that time it was anticipated that her legal costs would not be ongoing because the parties’ dispute would be settled and that, to the extent some further legal costs might be required, the Banksia Place property would provide an adequate means of funding those costs.
[91] It is now clear that this approach was flawed; the Banksia Place property was never going to be sufficient to both house Mrs Clayton and provide a means for her to meet her legal expenses. Whether Mr Clayton complied with the maintenance arrangement agreed to in these circumstances is not relevant. It is clear that a significant and increasing need existed at least from May 2012 and the Judge erred in failing to address it.
[92] Ms McCartney also submitted that since costs in respect of each step of the litigation have been addressed through costs awards in Mrs Clayton’s favour, there is no basis on which to make a further order; to do so would amount to double- counting. I do not accept this submission. Maintenance addresses an identified need with the intention of avoiding a shortfall between income and reasonable expenditure. The purpose of making an allowance for legal expenses in a maintenance order recognises that the party seeking maintenance faces an ongoing
expense for which there is no reliable source of funding.25 In comparison, costs
awards are intended to provide only a contribution to a party’s legal costs unless grounds for indemnity costs are made out. Therefore, relying on scale costs alone will, inevitably, result in a shortfall.
[93] For these reasons I am satisfied that from May 2012 the maintenance Mrs Clayton was receiving was inadequate to meet her ongoing legal costs and that, as a result, she exhausted the equity in her home which she was not required to do.
Subject to Mr Clayton’s ability to pay, I consider that the Judge should have varied
25 See the discussion in Clayton v Clayton [2015] NZHC 550.
the 2010 consent orders, with the variation taking effect from May 2012. I do agree, however, that any amount paid to Mrs Clayton by way of costs orders since 2012 should be taken into account, otherwise there would be a risk of double-counting. To do so will require details of the legal costs incurred by Mrs Clayton in the period between May 2012 and June 2014 and the legal costs awarded against and paid by Mr Clayton during that period. I do not have sufficient information to attend to this exercise myself and will invite counsel to file memoranda on the point.
Provision of vehicle
[94] As part of Mrs Clayton’s application to vary the consent orders, she sought an order requiring payment of a lump sum of approximately $65,000 to enable her to purchase a car similar to that which she had when she separated. Alternatively, she sought an order requiring Mr Clayton to provide her with a vehicle of a similar standard to which she had during the marriage.
[95] Mrs Clayton’s evidence was that during the marriage Mr Clayton provided her with a late-model vehicle (frequently European) which was updated regularly. At the time of separation she was driving a Mercedes SUV which she continued to drive, with Mr Clayton meeting the maintenance and running costs until the vehicle was written off in 2014 following an accident. From that point Mrs Clayton has been very unhappy with the vehicles provided. The first was a manual Kia Rio which broke down. The next was a 2008 Hyundai Sonata.
[96] The Judge made an order that Mr Clayton was to continue to make available an automatic late-model vehicle suitable for Mrs Clayton’s needs, which order was to expire upon the final resolution of all relationship property proceedings. The Judge’s reasoning was:
[32] The vehicle currently provided is adequate in that it appears to be reliable and meets Mrs Clayton’s requirement for transport. She raises no issue about the adequacy of the car as a means of transport. However, she has a sense of entitlement to a car commensurate with that which she was previously provided with. Further, she does not wish to be beholden to Mr Clayton for provision of a car without consultation with her as to make and model. She points out that since separation Mr Clayton has continued to drive a new Audi, updating regularly.
[33] The provision of a lump sum payment would put Mrs Clayton in a significantly better position than she was during the marriage in regards to vehicles. She would then have an asset which she could sell, which was not previously the case. Such a lump sum payment, if made, would need to be treated as an interim distribution of relationship property in the final calculation.
[34] However, the test for maintenance payments remains that of reasonable need. Whilst there have been difficulties over recent months, I am satisfied that the vehicle now provided does meet her needs, if not her aspirations. I am not satisfied that the grounds are met for inclusion in a maintenance order of a lump sum to enable the purchase of a vehicle of Mrs Clayton’s choice.
[97] Ms Hosking submitted that the Judge had approached the issue of the vehicle unreasonably, with regard to the standard of living that Mrs Clayton enjoyed during the marriage. She submitted that the provision of a new vehicle was a feature of the marriage and it was therefore a reasonable need and should have been included as part of Mrs Clayton’s expenses. She further submitted that the Judge failed to consider the alternative option proposed by Mrs Clayton, namely inclusion of a vehicle lease as a reasonable expense to enable her to lease a vehicle of her choosing. She sought to have the order that the Judge made quashed and maintenance increased by $650 a week to address the reasonable need for a vehicle.
[98] It is, of course, true that the reasonable needs of a party seeking maintenance are to be considered against the standard of living enjoyed during the marriage and not to be read down to the bare necessities of life.26 I do not, however, consider that the Judge made any error in her approach to the vehicle issue. During the marriage Mr Clayton was able to arrange the provision of a vehicle for Mrs Clayton without incurring any personal expenditure and without actually having to purchase any
vehicle personally. Mrs Clayton was well aware of this. I am satisfied that Mr Clayton does not now have the ability to meet the cost of providing a late-model vehicle to Mrs Clayton from his personal income. Further, increasing the amount of maintenance by a substantial cash figure would provide Mrs Clayton with a greater benefit than existed for her during the course of the marriage. This ground of appeal
therefore fails.
26 Z v Z (No 2) [1997] 2 NZLR 258 (CA); M v B [2006] 3 NZLR 660 (CA).
Conclusion
[99] On Mr Clayton’s appeal I have concluded that:
(a) Judge Munro did not make errors in the findings of fact as asserted;
(b)Qualifying circumstances under s 64 FPA did exist so that Mrs Clayton was entitled to an order for final maintenance for both legal and personal expenses. However, the level of maintenance allowed for Mrs Clayton’s personal expenses was too high, so this ground of appeal succeeds in part;
(c) Judge Munro did not make any error in not considering Mr Clayton’s ability to pay. Although the restraining orders made after the judgment did result in a change to Mr Clayton’s circumstances it did not affect the outcome;
(d)It was implicit in Judge Munro’s judgment that she considered it reasonable for Mrs Clayton to receive maintenance and not unreasonable to require Mr Clayton to pay it. There was no error in that conclusion.
[100] Mr Clayton’s appeal is therefore allowed in part:
(a) The maintenance order requiring payment of $5,000 per month for living and personal expenses is quashed and substituted with an order for $2,700;
(b)The maintenance order requiring payment of $10,000 for legal and accounting fees stands but is varied so as to require Mrs Clayton to provide an undertaking that these payments will be directed only towards legal and accounting fees and disbursements.
[101] On Mrs Clayton’s cross-appeal I have concluded that:
(a) Judge Munro did err in dismissing the application for variation of the
2010 consent orders backdated to 2012;
(b)Judge Munro did not make any error in her decision regarding the provision of a better quality vehicle to Mrs Clayton.
[102] Mrs Clayton’s appeal is therefore allowed in part:
(a) Variation of the 2010 consent orders is to be backdated to May 2012.
The amount owed by Mr Clayton will be offset against costs awards previously made in Mrs Clayton’s favour. This issue is to be addressed by memoranda filed on behalf of Mrs Clayton within 14 days and on behalf of Mr Clayton within 21 days;
(b)Mrs Clayton’s appeal in relation to the provision of a vehicle is dismissed;
[103] If parties wish to address the issue of costs on this appeal they may do so by memoranda filed on behalf of Mrs Clayton within 14 days and on behalf of
Mr Clayton within 21 days.
P Courtney J
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