Clayton v Clayton - [2015] NZHC 550

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

CIV-2014-463-000112 [2015] NZHC 550

BETWEEN
MARK ARNOLD CLAYTON

Appellant

AND

MELANIE ANN CLAYTON Respondent / Cross-Appellant

Hearing: 10 February 2015

Appearances:

M J McCartney QC and K E Sullivan for Appellant
J R Hosking for Respondent / Cross-Appellant

Judgment:

24 March 2015

JUDGMENT (1) OF COURTNEY J

This judgment was delivered by Justice Courtney on 24 March 2015 at 4.50 pm
pursuant to R 11.5 of the High Court Rules

Registrar / Deputy Registrar

Date……………………….

CLAYTON v CLAYTON [2015] NZHC 550 [24 March 2015]

The issue

[1] Mark Clayton appeals a final maintenance order requiring him to pay his former wife, Melanie Clayton, maintenance of $15,000 per month.1 That figure includes an allowance of $10,000 per month to cover Mrs Clayton’s legal and accounting fees in the relationship property litigation between them that has been on foot since 2007. Mr Clayton asserts that, as a matter of law, such an allowance in the maintenance order is not permitted.2

The case in the Family Court

[2] Because the present decision deals only with a point of law, it is unnecessary to canvass the lengthy procedural history of the litigation and I limit my discussion of the facts to a bare outline of the case in the Family Court.

[3] Mrs Clayton commenced proceedings under the Property (Relationships) Act

1976 (PRA) in 2007. She claimed that an extensive network of business interests controlled by Mr Clayton through companies and trusts was relationship property. She soon found that she could not meet the legal fees required for this litigation. She applied for interim and final maintenance orders. Consent orders were made in
2010. Under those orders Mrs Clayton received the former family home by way of an interim distribution as a means of funding her legal fees. Mr Clayton also agreed to meet the costs associated with the property.

[4] In 2011 the Family Court delivered a decision on the relationship property claim favourable to Mrs Clayton.3 Mr Clayton’s appeal to the High Court was unsuccessful.4 He lodged a further appeal to the Court of Appeal; it was clear that
the litigation would be ongoing.5

1      C v C [2014] NZFC 4193.
2      Mr Clayton has also appealed the decision on other grounds and Mrs Clayton has cross-appealed
The other grounds and the cross-appeal were heard separately and will be the subject of a separate judgment.
3      MAC v MAC FC Rotorua FAM-2007-063-652, 2 December 2011.
4      Clayton v Clayton [2013] NZHC 301, [2013] NZFLR 236.
5      Subsequent to the hearing of this matter the Court of Appeal delivered its decision the effect of which was largely unfavourable to Mr Clayton: Clayton v Clayton [2015] NZCA 30.

[5] Mrs Clayton applied for an order varying the consent orders to increase the monthly maintenance payments to $18,500 until settlement of her relationship property claim on the ground that her current maintenance arrangements were inadequate to meet her reasonable needs, including significant debt relating…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Clayton v Clayton

Details

AGLC: Clayton v Clayton [2015] NZHC 550
Case: [2015] NZHC 550
Decision Date: 24 March 2015

CaseChat Overview and Summary

In Clayton v Clayton, Mark Clayton appealed against a final maintenance order that required him to pay his former wife, Melanie Clayton, maintenance of $15,000 per month. This included an allowance of $10,000 per month to cover Melanie Clayton's legal and accounting fees in the ongoing relationship property litigation between them. Clayton argued that, as a matter of law, such an allowance in the maintenance order was not permitted. The court considered the statutory framework for final maintenance orders under the Family Proceedings Act 1980, which reflects the underlying "clean break" principle of that Act; a person's liability to maintain their former spouse or partner is usually expected to be temporary while the other person becomes self-sufficient. The court rejected Clayton's argument that the statutory scheme precluded a final maintenance award making an allowance for legal expenses in relation to ongoing litigation between the parties. The appeal on this point was dismissed.

The court considered four main arguments against including legal expenses in an order under s 64. First, it was argued that the wording of s 64 made it clear that the legislative intention was not to include legal and accounting costs incurred in post-separation litigation. However, the court disagreed, stating that s 64(2)(a)(iii) could extend in appropriate cases to include the need to resolve the relationship property dispute. Second, it was argued that it would be unfair to require one party to effectively fund the litigation against them. The court disagreed, stating that the payment did no more than place the party seeking maintenance in a position that would assist them to become self-supporting. Third, it was argued that including legal costs in a final maintenance order cut across the statutory costs regimes. However, the court disagreed, stating that different considerations might apply if the circumstances were such as to justify indemnity costs for very bad or unreasonable conduct. Fourth, it was argued that there was no adjustment mechanism by which the paying party could recoup funds paid as maintenance at the conclusion of the proceedings. However, the court disagreed, stating that there was no reason to expect that any adjustment would be required.

Orders