Clear v Sutton
[2017] NZHC 1484
•30 June 2017
NOTE: PURSUANT TO S 35A OF THE PROPERTY (RELATIONSHIPS) ACT 1976, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B TO 11D OF THE FAMILY COURTS ACT 1980. FOR FURTHER INFORMATION, PLEASE SEE
THE-FAMILY-COURT/LEGISLATION/RESTRICTION-ON-PUBLISHING- JUDGMENTS.
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
CIV-2015-419-417 [2017] NZHC 1484
UNDER the Property (Relationships) Act 1976 AND
the Family Protection Act 1955
AND
the Law Reform (Testamentary Promises) Act 1949
BETWEEN
R C CLEAR, P K CLEAR, L J BROOMFIELD, S K JONSON AND P C CLEAR
Appellants
AND
M A SUTTON Respondent
Hearing: 22 November 2016 Appearances:
EJ Hudson for Appellants
J French for the Respondent
W Bennetti for the Estate of Max Robert ClearJudgment:
30 June 2017
JUDGMENT OF TOOGOOD J
This judgment was delivered by me on 30 June 2017 at 4.00 pm
Pursuant to Rule 11.5 High Court Rules
Registrar/Deputy Registrar
Clear v Sutton [2017] NZHC 1484 [30 June 2017]
Introduction
[1] In a judgment delivered on 16 October 2015, Family Court Judge DR Brown described Max Robert Clear as a charismatic, generous, friendly and decent man.1
He was 71-years-old when he died in November 2011, leaving behind five adult children: Pauline, Robert, Silvia, Lynette and Phillip. Their mother Kathleen had died suddenly and unexpectedly in August 2003 after 41 years of marriage to Mr Clear.
[2] At the time of his death, Mr Clear owned three neighbouring rural properties in Limmer Road, Te Kowhai, near Hamilton, which Kathleen and he had farmed for approximately 20 years up to 1983. That was when Mr Clear turned his passion for building and flying microlight aircraft into a business based at the airfield which he had established on the property in 1968. By all accounts, the business was very successful, for a time at least: it had produced over 200 aircraft by 2003, mostly for export. Up to the time of her death, Kathleen Clear worked in the business as an office administrator.
[3] In November 2003, a few months after his wife’s death, Mr Clear persuaded a neighbour, Maxine Sutton, to take up full-time employment as an office administrator in the business, Micro Aircraft Limited (and later another company formed by Mr Clear, Te Kowhai Airfield Limited). She was then aged 47 and Mr Clear was 63. Ms Sutton's evidence in the Family Court was that by February 2004 her working relationship with Mr Clear had become a personal one which developed into a sexual relationship. Ms Sutton says that, from 2006, Mr Clear and she established a de facto relationship which ended only with Mr Clear's death from cancer approximately five years later. It is a remarkable feature of the case that they were financially independent of each other and maintained separate residences throughout the five-year period, except for the last six months of Mr Clear’s life when Ms Sutton moved into the farm homestead to
care for him.
1 Sutton v Clear [2015] NZFC 8126 at [1] and [4].
[4] Mr Clear left his entire estate, worth around $3 million, to his children (the beneficiaries). The estate’s principal assets comprised the farm properties, including the airfield, and Mr Clear’s shares in the aviation businesses. Despite their apparent success, it transpired that the companies were insolvent.
[5] Ms Sutton brought proceedings in the Family Court under the Property (Relationships) Act 1976 (the PRA), the Family Protection Act 1955 and the Law Reform (Testamentary Promises) Act 1949, seeking the allocation of relationship property and provision for her out of Mr Clear's estate. Each of the claims was resisted by the beneficiaries.
[6] After a six-day hearing, Judge Brown found that Ms Sutton and Mr Clear had been in a de facto relationship (as defined in s 2D of the PRA) between 2006 and November 2011. Nevertheless, the Judge declined to grant Ms Sutton any relief under the PRA. That decision is not challenged. It had been accepted on behalf of the beneficiaries, however, that if the Family Court found that a de facto relationship between Mr Clear and Ms Sutton existed, there had inevitably been breach of Mr Clear's moral duty to make testamentary provision for Ms Sutton. The Judge ordered payment of $400,000 (around 13 per cent of the estate) as an appropriate sum to compensate Ms Sutton for that breach of duty, but made no additional provision under the Testamentary Promises Act.
[7] In a separate judgment dated 5 February 2016, Judge Brown awarded Ms Sutton $56,455 in costs (including an uplift of $10,000 on account of the beneficiaries’ failure to accept a settlement offer) and disbursements.
[8] The beneficiaries appeal against the judgment. Ms Sutton cross-appeals, in the event that the beneficiaries’ appeal should succeed, against the refusal of her testamentary promises claim. The beneficiaries also appeal against the costs decision.
The issues
[9] Judge Brown described the beneficiaries' opposition to Ms Sutton's claim in these terms:
Mr Clear's children and some of their partners effectively deny, in some cases with vehemence and anger, that there was any relationship beyond a friendship or companionship, let alone a de facto relationship, between their father and Ms Sutton.2
[10] The Family Court judgment is devoted almost entirely to the determination of the factual dispute about the nature of the relationship between Mr Clear and Ms Sutton, and whether it came within the definition in s 2D(1) of the PRA. The subsection reads:
2D Meaning of de facto relationship
(1) For the purposes of this Act, a de facto relationship is a relationship between 2 persons (whether a man and a woman, or a man and a man, or a woman and a woman)—
(a) who are both aged 18 years or older; and
(b) who live together as a couple; and
(c) who are not married to, or in a civil union with, one another.
[11] There being no doubt that Mr Clear and Ms Sutton were adults who were not married, the only issues in the Family Court and in this appeal are whether at any relevant time they lived together as a couple and, if so, for how long.3
[12] On appeal, Mr Hudson conceded on behalf of the beneficiaries that the evidence pointed overwhelmingly to Mr Clear and Ms Sutton being a close and loving couple, albeit on the basis that Mr Clear's children denied having any knowledge of that relationship during their father's lifetime. The central question, therefore, is whether the Judge was correct to find that Mr Clear and Ms Sutton were
living together as a couple at the relevant time.
2 At [26].
3 Property (Relationships) Act 1976, s 2D(1)(b).
[13] In the event that the beneficiaries should fail in their challenge to the finding of a de facto relationship, they also challenge the quantum of the award under the Family Protection Act, arguing that provision of no more than $100,000 out of the estate was appropriate to reflect the extent of Mr Clear's moral duty to Ms Sutton. The challenge to the Court's costs order is mounted primarily on the basis that Ms Sutton succeeded on only one of her three causes of action, and that it was not unreasonable for them to reject a settlement offer to accept a payment of $300,000.
[14] There is no substantial disagreement between counsel as to the applicable legal principles, both Mr Hudson and Mr French acknowledging that this case and others of its kind turn essentially on findings of fact, with the Court applying the statutory guidelines and making a judicial assessment of the evidence.
[15] Before setting out the respective arguments of counsel, it is necessary to summarise the findings of the Family Court Judge.
The Family Court judgment
Ms Sutton’s assertions about the relationship
[16] Neither Mr Hudson nor Mr French raised any issue about the accuracy of Judge Brown's summary of the evidence presented by Ms Sutton and the beneficiaries respectively. It is convenient to repeat the Judge's record of Ms Sutton's description of the relationship in her first affidavit, which was in the following terms:
From about February 2004, Max's and my relationship became personal. Our social outings together included restaurant dinners, visiting friends, going to the movies and visiting my parents and other relations. We attended birthdays of family members together and also Christmas celebrations. We holidayed together in New Zealand. We started kayaking at Raglan after work. I bought one kayak and Max bought three so that we could take others on these occasions. From early on in this courtship, Max took a keen interest in Debby and Daniel's lives and he played a major role in their upbringing from the beginning of February 2004 onwards.
We became very close. Our relationship developed into a sexual relationship. We spent entire weekends together. I knew Max loved me very dearly. For instance, I noticed his eyes used to light up as soon as I entered a room.
At this stage, we were as discreet as possible concerning our relationship. In particular, I was apprehensive concerning the reaction of Max's children. I became very good friends with Silvia Jonson, but I sensed the other children were less than wholehearted in their acceptance of me and our relationship.
During the first years of our personal relationship, I took things very cautiously. I had been on my own for 13 years. Max was 14 years older than me. I had two children of my own and Max had five adult children.
From 2006 at the very latest, I was completely committed to our relationship. We were inseparable.
[17] The Judge continued his summary of Ms Sutton's evidence in these terms:
[12] Ms Sutton did not assert that at any stage she and Mr Clear lived together in the same household. She said that they "usually" stayed together at her house on Friday nights, his on Saturday nights and sometimes Sundays and had all their meals together during the weekend. It was her evidence that "to start with" Mr Clear's daughter Silvia was attending to most of her father's housekeeping from where she lived, virtually next door, but she slowly and with respect took on his household chores and from mid 2008 was doing "virtually everything that needed to be done".
[13] It is Ms Sutton's case that Mr Clear became an active quasi-parental figure in her children's lives. In respect of the business, she worked long and irregular hours, including weekends as a co-participant with Mr Clear. The business was doing really well and it had become the largest manufacturer of microlights in the Southern Hemisphere. It won an award as Emerging Exporter of the year in 2006. The airfield continued to expand alongside the business. The airfield buildings were significantly expanded and upgraded. A large fuel tank was installed.
[14] There were numerous trips overseas in which Ms Sutton accompanied Mr Clear.
[15] Some were categorised by Ms Sutton as business trips but others she regarded as holiday trips together: one two of these one or both of Ms Sutton's children accompanied them.
[18] The Judge noted that in November 2007, Mr Clear held a surprise 50th birthday party for Ms Sutton at the airport hangar and that in August the following year, Mr Clear arranged and met the cost of a 21st birthday party at the hangar for Ms Sutton's daughter, Debby. Ms Sutton said that in late 2009 she rejected a marriage proposal from Mr Clear saying to him that she "believed some of his children's resentment to the marriage would make life very unpleasant". The Judge recorded that Ms Sutton had said that Mr Clear paid for all of their everyday non- household expenses. Except for the last overseas trip to which Ms Sutton contributed half the cost, Mr Clear paid for their overseas travel.
[19] Ms Sutton's evidence was that Mr Clear became seriously ill in May 2010, suffering a recurrence of a cancer for which he had been treated some years earlier. Although Mr Clear's health remained good for about a year, he required another operation in May 2011. Ms Sutton said that she "then" moved permanently into his house and remained there until he died in November 2011.
[20] Among the exhibits produced by Ms Sutton were a number of greeting cards given by Mr Clear to her and vice versa. There were three birthday cards (one for her 50th birthday and the other two undateable) expressed in romantic terms, and a valentine card with similar effect. A Christmas card apparently from 2007 given to Mr Clear by Ms Sutton also contained an inscription demonstrating a serious commitment to a romantic relationship. The Judge accepted as genuine these exhibits, a photograph of Mr Clear kissing Ms Sutton on the lips with apparent passion, and a fatherly letter written by him to Ms Sutton's daughter, Debby, dated
25 March 2008.
The evidence of the friends of Mr Clear and Ms Sutton
[21] In the face of the determined rejection of Ms Sutton's assertion of the de facto relationship by the beneficiaries, the Judge noted that the beneficiaries' evidence was "answered by a broad range of their father's long-term friends and acquaintances responding with feeling as to the breadth and depth of the relationship between their
father" and Ms Sutton.4 It is no doubt on the basis of this evidence and the
inferences to be drawn from the cards and photographs that Mr Hudson, responsibly in my view, conceded that the Judge was entitled to accept that Mr Clear and Ms Sutton had a deep and loving relationship and that it was proper to describe them as a couple. It is unnecessary, therefore, to repeat the whole of the Judge's summary of the evidence. It is useful, however, to highlight those aspects of the evidence which arguably go further in establishing, in the unusual circumstances of the case, that despite sleeping in their own residences on most evenings up to Mr Clear’s death, it may be inferred that Mr Clear and Ms Sutton were living together in the
sense required by s 2D(1)(b).
4 Sutton v Clear above, n 1 at [1] and [25].
[22] The Judge recorded that Robyn Blake, who provided computer consultancy services to the business and who said she had become "good friends" with Ms Sutton and Mr Clear, says that she was introduced initially to them as being "life partners". She said that:
I noticed they spent all their time together, holiday together, went on business trips together and were involved in everything as a couple, including many family occasions. Max held Debby and Daniel (Maxine's children) in very high esteem and was like a father-figure to both of them. They both sought his advice for important events in their lives. The people who knew them also knew they were a couple. Max absolutely adored Maxine. She was his world. He loved her and she loved him back. This was very easy to see. It was "a given" that Max and Maxine were in a de facto relationship. I am positive they were more than just friends. Their lives appeared to me to be utterly intertwined in the majority of ways. I was aware at the time that Max and Maxine were not spending every night of the week under the same roof, and that each of them still owned a house. But there was no doubt from what I observed that they were "an item".
[emphasis added]
While that evidence was obviously directed at rebutting the denials of the beneficiaries that there was any romantic association between their father and Ms Sutton, it is instructive also that Ms Blake describes and gives examples of the lives of the couple as being "utterly intertwined in the majority of ways."
[23] Another witness, Beverly Cochrane, said that Ms Sutton and Mr Clear were "renowned for always being together", even though Ms Cochrane was aware that they did not live continually in the same house until Ms Sutton moved into Mr Clear's house in the months before he died. Ms Cochrane recalled a conversation with Mr Clear several months before he died in which he "assured her that he had made provision for Ms Sutton and that she would be 'fine' and 'well cared for'." Mr John Eaton, a retired pilot and a longstanding friend of Mr Clear said that the couple were regarded by all their friends as being in a permanent relationship and devoted to each other.
[24] Debby Grimwood, Ms Sutton's daughter, said that she was aware that the couple did not spend every night in the same house but she regarded them as being life partners in every sense. Another friend of Mr Clear, Mr John Grogan, said that Mr Clear's love and respect for Ms Sutton was obvious and that he could tell “she
was his life”. He said Ms Sutton “certainly spent a lot of time at Max’s house”. Those sentiments were reflected also in the evidence of Ms Judith Johnstone who lives a few 100 yards from Mr Clear's home. She also described the couple as "life partners" and said:
Maxine was an integral part of Max's life. They were both deeply in love with each other. They supported each other in every possible way. I know they did not spend every night in the same house. But they were a couple and everyone who knew them well, recognised that was the case.
[25] Ms Johnstone said Ms Sutton had told her Mr Clear had asked her to marry him but she decided not to accept because she was apprehensive of an adverse reaction from Mr Clear’s children, or some of them.
[26] Another neighbour, Mr Noel Smith who lived four kilometres away from Mr Clear's home said that it was obvious to him in around 2008 that there was a very close relationship between Ms Sutton and Mr Clear. He said that he viewed the relationship as "all but marriage", though he was unable to say anything about how Ms Sutton and Mr Clear spent their nights.
[27] Mr Leslie Wykes, a 40-year aviation friend of Mr Clear, recalled that on one occasion on a visit to the airfield Mr Clear put his arm around Ms Sutton and said, "Les, I'm going to marry this woman, what do you think?" Mr Wykes observed that "they were a married couple in every sense, except Maxine did not have a ring on her finger". Mr Wykes would introduce Ms Sutton to others as "Max's partner". The Judge noted, however, that Mr Wykes was not aware that Ms Sutton had rejected a proposal of marriage from Mr Clear. It is worth recording also that Dr Michael Jamieson, the consultant oncologist who cared for Mr Clear in the last 18 months of his life, said Maxine was introduced to him by Mr Clear as his partner.
The beneficiaries’ evidence
[28] Given the concession made by Mr Hudson about the evidence clearly justifying the Judge's conclusion that Mr Clear and Ms Sutton had a close romantic attachment, it is unnecessary to set out the evidence of the beneficiaries disputing the proposition that they were "a couple". I accept, however, that there are aspects of
that evidence which touch also on the question of whether Mr Clear and Ms Sutton were "living together" during the period from 2006 to 2011, which Ms Sutton said, and the Judge accepted, was the period of the de facto relationship.
[29] The Judge recorded Mr Robert Clear, the eldest son, as saying that between November 2007 and November 2010 he regularly passed Ms Sutton's home at Te Kowhai on his way to and from a building site nearby. He also said that he worked at sheds very near his father's home by the airfield and never witnessed either Ms Sutton or Mr Clear staying over at the other's house or eating dinner together. Robert's wife, Kim, said that through all the years she had only seen Ms Sutton at Mr Clear's home once, and that was during the daytime. During the last month of Mr Clear's life, Robert regarded Ms Sutton as "squatting" in her father's house in a room previously occupied by Phillip.
[30] Silvia Jonson, a daughter, lived throughout the relevant period only a short distance along the road from her father's home. The Judge recorded that it was common ground that Silvia did her father's housework for him after her mother died. Her evidence was that, apart from a 12-month period from 2006 to 2007 when her brother Phillip and his partner Tina lived with and worked for Max Clear, she continued to do his housework up to his final illness. This evidence conflicts with Ms Sutton's evidence that she took on doing household chores from Ms Sutton and from mid-2008 was doing virtually everything that needed to be done. Silvia said she never saw anything of Ms Sutton at her father’s place and never saw any display of affection between them. She said she believed "they led very independent lives", notwithstanding that they worked and did other things together, including socialising on some occasions. Silvia's husband, Warren, said that he had never seen Ms Sutton's car at Max's home or Mr Clear's car at Ms Sutton's home; he thought it was unlikely that they could have been together unobserved by him.
[31] The oldest child, Pauline, lived on Waiheke Island throughout this time but was a regular visitor to Te Kowhai. She acknowledged the possibility of an intimate relationship but said, although her father was fond of Ms Sutton and that they shared some great times together, she did not believe it went beyond that. Referring to an occasion when she hosted the Clear family Christmas in her Waiheke home and
placed her father and Ms Sutton in the same bedroom (with two single beds), Pauline said the house was crowded, there was no other room and they were used to roughing it together because they travelled so much together.
[32] Phillip Clear, the youngest son, lived outside New Zealand for most of the relevant time, but for 12 months from November 2006 he returned and he and his wife moved into live with Mr Clear. Phillip worked for his father at both the airfield and around the farm. The Judge recorded that Phillip did not like Ms Sutton and says that the entire time he worked for his father he viewed Maxine as only an employee and noted that his father introduced Ms Sutton to people on the airfield as the office manager. Phillip's evidence is that while he was living with his father he never saw Ms Sutton staying at his father's place, nor knew of his father staying at Ms Sutton's. He noted that when his father and Ms Sutton visited him in Sydney in
2009, and he made his father aware they had only a single guest room, his father elected to stay at a nearby hotel.
[33] Tina Clear, Phillip's wife, said she had never seen any sign of affection between Mr Clear and Ms Sutton, nor saw them spending time at each other's homes. She said that from her close observation her sister-in-law, Silvia, took domestic care of Mr Clear's house except when she and Phillip lived there.
[34] The family also called what the Judge described as "significant evidence" from Mr Kent Colebrook, a young man whom Mr Clear had befriended through a common interest in microlight aircraft. Mr Colebrook began flight training out of Mr Clear's airstrip for 18 months from the beginning of 2006, travelling three weekends a month from Putaruru. When Mr Colebrook obtained his licence, he was invited by Mr Clear to use his microlight and for a further six months Mr Colebrook commuted to the airfield on an average of three weekends a month. In mid-2008, Mr Clear offered Mr Colebrook a bed at Mr Clear's house on those weekends when he went to the airfield to fly. So for two years, from mid-2008 until June 2010, Mr Colebrook stayed at Mr Clear's home on an average of two weekends a month on Friday and Saturday nights. In late 2008 Mr Colebrook would also spend a week night at Mr Clear's home. He modified his visiting to non-staying visits three weekends a month after Mr Clear became unwell again in June 2010.
[35] Mr Colebrook told the Family Court that from what he witnessed, Mr Clear and Ms Sutton "lived in separate homes and lived very separate lives." He said on most occasions he only saw them together when they were at the airfield in a working capacity. He said that he never thought of them as a couple in a relationship and that in the period of time he stayed with Mr Clear at his house from mid-2008 until mid-2010, Ms Sutton never stayed the night and Mr Clear always stayed with him at the house on Friday and Saturday nights. There was one occasion when they all went out for dinner and Ms Sutton returned to her house afterwards.
[36] The combined effect of the evidence of Phillip, Tina and Kent Colebrook is that Ms Sutton never spent a night at Mr Clear's residence, and Mr Clear never spent a night at Ms Sutton's residence between 2006 and 2007, or on any of the many occasions when Mr Colebrook was there for frequent weekend and occasional mid- week visits between mid-2008 and mid-2010. That is the majority of the five-year period from 2006 to 2011.
[37] The Judge recorded that "precise ... neutral and reliable" evidence was given by Ms Caroline Hopkins, Mr Clear's solicitor. She said that Ms Sutton was aware that, when Mr Clear's illness recurred in June 2010, there were attempts to leave the airfield and the microlight aviation business to a Trust of which only the children were to be the beneficiaries. Those efforts failed but after Mr Clear left hospital Ms Hopkins visited him at his home, by arrangement with Ms Sutton, to make a will. In Ms Sutton's presence, Mr Clear said he wanted his estate to go to his children equally. Ms Hopkins's evidence was that Ms Sutton did not say anything during the meeting and that Mr Clear said nothing about providing for her.
[38] Ms Hopkins returned to the home the next day to have the will signed. She had previously arranged that she and Ms Sutton, who were not to be beneficiaries, would be the witnesses. She was very clear, therefore, that Ms Sutton knew she was not a beneficiary and that she knew who the beneficiaries would be.
The Judge’s approach to the evidence
[39] The Family Court Judge was faced, therefore, with a dichotomy. The evidence of Ms Sutton and those witnesses who were friends of Mr Clear and her pointed firmly in the direction of not only a very close, strong and loving bond, but also to a shared commitment to an integrated life. In stark contrast, the evidence of the beneficiaries, Mr Colebrook and Ms Hopkins indicated financial and residential independence and separate lives, albeit that there may have been a close friendship and some shared recreational activities and holidays.
[40] Judge Brown referred to the provisions of s 2D of the PRA and to the principles to be extracted from what counsel agreed were the leading cases. He quoted these statements from the judgment of a Full Court of the High Court (Gendall and Ellen France JJ) in Scragg v Scott:5
[64] In determining whether a de facto relationship exists Courts are often required to assess multiple pieces of circumstantial evidence. That is why the indicia set out in s 2D are inclusive but not exhaustive. If sufficient pieces of evidence exist which, when viewed cumulatively, and through the application of common sense and proper reasoning, satisfy the finder of fact that the relationship is a de facto relationship then the statutory test is met. Weight to be given to individual pieces of circumstantial evidence may vary. If both parties say they are in a de facto relationship that may well be decisive direct evidence, depending upon the existence of other characteristics. Parties may simply present to the outside world in a particular way. They may share an emotional bond or association over an extended period and act in a way, inconsistent with any view other than that they are in a de facto relationship. It is the cumulative weight of all factors whether specified in the Act or not (because as was made clear by the minority judgment in Ruka "there will be others"), which is decisive. The approach must be broad, with various factors to be weighed up in an evaluative task, similar to those the Courts are frequently called upon to undertake when drawing conclusions from circumstantial evidence.
[41] The Judge noted that there was "considerable authority for the proposition that there is no legal requirement for the parties to have cohabited before a de facto relationship can be found to be in existence".6 He then referred to D v F,7 which concerned a proceeding in which a de facto relationship was found to exist
notwithstanding that the parties did not live together in any conventional sense. The
5 Scragg v Scott [2006] NZFLR 1076, (2006) FRNZ 942 (HC).
6 Sutton v Clear, above n 1, at [51].
7 D v F [2010] NZFLR 67 (HC).
point specifically referred to was that made by Heath J that the disputes in cases of this type often arise out of unconventional living arrangements of particular individuals, calling for an evaluative approach to determine whether the legal threshold for the establishment of the de facto relationship is met.8
[42] Judge Brown also quoted observations in G v B,9 in which Rodney Hansen J
said:
[32] ... A common residence could not ... be a necessary condition of living together as a couple, either as a matter of law or as a matter of fact.
[33] That accords with commonsense and experience. There may be compelling reasons why a couple do not share a common residence for substantial periods of time whilst remaining totally committed to a long-term relationship.
[43] Judge Brown referred to a passage in DM v MP,10 in which there are observations which I regard as having some resonance in this case. After noting that a Court must interpret the term "de facto relationship" in its specific legislative setting, Miller J said a mutual acceptance of exclusivity inheres in the notion of living "together" as a "couple"; the statutory indicia of a shared life (in s 2D(2)) are broadly consistent with a substantial degree of exclusivity in qualifying relationships. The Judge noted two points of particular relevance to that case which, I consider, are equally pertinent to the disposition of this appeal:
[27] ... First, it has been suggested that one of them, mutual commitment to a shared life, lies at the core of the definition. I take that to mean that a mental commitment to sharing life is normally required of a de facto relationship. The other indicia establish, however, that such commitment may be evidenced by conduct.
[28] Second, a de facto relationship is likely to involve cohabitation; that is how most couples choose to share their lives, and the legislation was enacted because unmarried cohabitation had become commonplace. To recognise that is not to deny that sometimes couples choose to conduct a shared life without cohabiting. Nor is it to suggest that cohabitation is paramount; the legislation says otherwise. Nor is it to suggest that a couple who cohabit are necessarily in a de facto relationship. It is merely to point to a feature that experience identifies as common to most de facto relationships and for that reason significant for a court which is assessing any given relationship.
8 D v F, above n 7, [54].
9 G v B [2006] NZFLR 1047, (2006) 26 FRNZ 28.
10 DM v MP [2012] NZFLR 385.
[emphasis added]
[44] While it may not be necessary to find a reason why a couple who are said to be in a de facto relationship have chosen not to cohabit, it is likely to be instructive. In that regard, significant evidence was given by friends of Mr Clear, Raymond Knox and Jan Pollock. They recalled that on an occasion when Mr Clear had introduced them to Ms Sutton in 2010, he described her as his "partner Maxine". They visited Mr Clear's house to visit the family when Mr Clear died. Pauline, Lynette and Silvia were there. Mr Knox and Ms Pollock described the atmosphere as pleasant while they were reminiscing with the three daughters and looking over photographs, until the time Ms Sutton came into the room and sat down on a couch. The witnesses said:
She was not invited to join us up at the table where we were sitting with the girls. It became obvious there was non-acceptance of Maxine's presence. The whole atmosphere changed. She was not involved in any way. The children ignored her as though she didn’t exist. Maxine said she would like someone to hold a ladder for her while she attended to some task at the airfield. There was no response at all to this request. No-one made any move to help her. She was completely ostracised. We were shocked by Max's children's deliberate of Maxine. We found the whole atmosphere quite shocking and distasteful.
They concluded:
From what we saw and heard over those days, it was obvious to us that Max and Maxine's relationship had never been accepted by the children.
[45] Approaching the crucial issue of the clash over the extent to which Ms Sutton and Mr Clear spent weekends together, Judge Brown said there were reasons for "some caution with Ms Sutton's evidence". She had said that Mr Clear and she spent weekends together: Friday night at her home and Saturday and sometimes Sunday at his. But the Judge noted that she did not qualify those assertions to allow for the presence of Phillip and Tina in 2006 to 2007 until she was in the witness box, and that she did not address the presence in later years of Mr Colebrook, something which the Judge said he found proved. The Judge noted also that Ms Sutton's evidence in cross-examination that she had not expected anything from Mr Clear's will arguably contradicted a number of what the Judge called "her basic positions in this litigation war", saying that it at least "displayed an ability to lose her footing, if
not the plot, in her evidence." Similarly, the Judge said that he did not accept Ms Sutton's "rather blurred evidence" that she did not know what was in Mr Clear's will.
[46] The Judge acknowledged that he was not "anywhere near certain about relatively significant matters in issue" in the proceedings, and reminded himself that, if the situation is uncertain, it is the Court's duty to find that Ms Sutton had not discharged her onus of proof. Despite his reservations about aspects of Ms Sutton’s evidence, the Judge summarised his findings thus:11
[64] In my view however, the evidence of Ms Sutton's witnesses, for reasons I have already set out, compellingly establishes a strong, committed, emotional relationship between Ms Sutton and Mr Clear. That relationship was sufficiently strong for Mr Clear to be a father figure to Ms Sutton's daughter. That relationship was strong enough to have Ms Sutton support Mr Clear through his illnesses and to move into his home for the six months until he died. That relationship was strong enough for Mr Clear and Ms Sutton to have holidays together and spend significant social and recreational time together.
[65] Ms Sutton's witnesses' evidence makes it plain that at least within the circle within which they felt comfortable, she and Mr Clear were overt in their relationship. It is also plain from the published material following Mr Clear's death that their relationship seems to have been known within at least some sections of the aviation world.[12] The letter received by Ms Sutton from the Prime Minister's office following Mr Clear's death possibly implies that the Prime Minister was aware of the relationship.
[47] The Judge, however, did not find it established that there was any regular pattern of the couple spending nights at each other's home. Moreover, he expressed himself as being unsure of the reason, speculating that it may have been that family issues caused habits to be formed in the earlier part of the relationship which became fixed. He suggested a need for discretion may have played a part, speculating that early caution at the prospect of the children's resentment of the presence of a new, younger woman in their father's life so soon after their mother's death caused there to be caution and circumspection over public displays of intimacy. The Judge thought that this may have fused with other factors, over time, such as the fact that they were relatively senior of age and that they were working together throughout the working
week.
11 At [64]–[65].
12 In an obituary published in an aviation magazine, Ms Sutton was described as Mr Clear’s
partner.
[48] As an example of both sides (Ms Sutton and the beneficiaries) misunderstanding what the other was thinking or doing, the Judge referred to Phillip Clear's belief that his father and Ms Sutton had elected to go to a hotel rather than share the one guest room.13 The Judge inferred that the election to go to the hotel was more consistent with them concealing their relationship (on the evidence that they had already spent many nights together) than with there not being a
relationship.
[49] The Judge concluded his evaluation in these terms:
[67] … [Mr Clear’s and Ms Sutton’s] commitment to each other was, in my view, absolute and was made clear to, and accepted by, a broad range of people in their lives and in their work.
[68] The fact that they did not intermingle property and finances is not in my view inconsistent with them being in a de facto relationship: it is not, in my view, remarkable that two older persons with established financial structures would so choose.
[69] Weighing the "cumulative weight of all these factors" I find that Ms Sutton and Mr Clear were in a de facto relationship. I have no reason to reject Ms Sutton's evidence that it began in 2006 and it ended on Mr Clear's death in November 2011.
Submissions for the appellants
No de facto relationship
[50] Mr Hudson's challenge to the judgment was founded in essence on a criticism of Judge Brown's approach to the evaluation of the evidence, and particularly the credibility of the witnesses, on the central issues on which the sides clashed. Counsel complained that the Judge did not say that he accepted or rejected particular aspects of the evidence applying conventional assessment tools. He submitted, for example, that the Judge was obliged to make adverse findings against Ms Sutton on crucial areas where her evidence was contrary to that of the beneficiaries and their witnesses, who were not subsequently cross-examined on those matters. Notably,
those issues included the lack of evidence from any person, other than Ms Sutton
13 At [66].
herself, that she had spent time overnight at weekends with Mr Clear, and that it was she rather than Silvia who had attended to Mr Clear's housekeeping needs.
[51] Mr Hudson emphasised that evidence which the Judge found credible established that Ms Sutton spent little or no time at Mr Clear's property during the three years (out of a total of five years of the claimed relationship) when Phillip and Tina were living at the house in 2006 and 2007, and when Mr Colebrook was there regularly at weekends in 2008 to 2010. Counsel was also critical of the Judge for failing to give due weight to Ms Hopkins's evidence that Mr Clear never discussed with his solicitor the nature of his relationship with Ms Sutton. He argued that it might have been expected that, had Mr Clear regarded the relationship as a committed and permanent bond, he might take advice as to the implications for his estate planning.
[52] Mr Hudson argued that it was significant not only that Mr Clear did not tell Ms Hopkins about the relationship but that his decision not to make any provision for Ms Sutton demonstrated that he did not see the relationship as one which called for any recognition in his will. Mr Hudson submitted that Judge Brown failed to address that indicator against Ms Sutton's claim.
[53] Similarly, counsel argued that the absence of any contribution by either party to the separate property of the other runs contrary to the proposition that although they may have been a couple they were also "living together".
[54] Mr Hudson submitted that it was a mystifying aspect of the evidence that Ms Sutton and Mr Clear should endeavour to conceal their relationship from Mr Colebrook who, after all, came into the category of the many other witnesses with whom they were prepared to share expressions and other evidence of their intimacy.
[55] Mr Hudson observed that, although Judge Brown clearly regarded it as remarkable that there was no evidence of substantial cohabitation, the Judge was unable to find a reason why they kept that aspect of their lives very separate.
[56] Counsel also adverted to another factor not mentioned by the Judge. When Ms Sutton demonstrated an interest in the microlight business to such an extent that she wished to invest in buying a hangar on the airfield, she was required to borrow the $40,000 required for her to do so. In Mr Hudson's submission this was evidence against the existence of a de facto relationship and evidence of a lack of any intention on the part of Mr Clear that their property interests should be merged.
[57] That led Mr Hudson to submit that it was important that the statutory context of the definition of de facto relationship involved the consequence that, if a relationship was found to exist, property would be shared between the partners. Mr Hudson did not argue that it was necessary to show either a subjective or objective intention to share property. He submitted, rather, that because property sharing is a consequence of a finding that a de facto relationship existed, a court should not easily find that a couple were "living together" in circumstances where there was an absence of any intermingling of property and scant evidence of cohabitation.
Award of $400,000 under the Family Protection Act too high
[58] On the question of the quantum of relief provided by the Court under the Family Protection Act, Mr Hudson said the Judge's assessment was that Mr Clear would have appreciated that due to the financial position of the business, Ms Sutton was in a vulnerable financial position. That submission was based on the revelation following Mr Clear's death that the business was not as successful as it appeared outwardly and that it was in fact running at a loss. Moreover, the Judge held that the size of the estate was such that Mr Clear's duty to Ms Sutton was to provide her with sufficient funds to discharge her indebtedness and give her a comfortable nest egg into and through retirement. It was accepted by Mr Hudson that it would be appropriate to approach the provision to Ms Sutton under the Family Protection Act as if she were a second wife; and that the provision of a lump sum was appropriate given the size of the estate. Counsel emphasised, however, the relatively short duration of the relationship, particularly bearing in mind the period when Phillip and Tina were living at the house and the apparent absence of Ms Sutton during the times when Mr Colebrook was there. Mr Hudson acknowledged that some recognition
might be given to the assistance provided by Ms Sutton during the final stages of Mr Clear's illness. Mr Hudson referred to undisputed factors which were relevant to his submission that an award of no more than $100,000 was appropriate to recognise the relationship as found by the Court, namely:
(a) the estate was largely made up of land and building acquired by Mr Clear and his wife, Kathleen, from Mr Clear's grandparents and parents;
(b) Ms Sutton enjoyed an equity of $240,000 in her home;
(c) there was no evidence of any contribution by Ms Sutton which increased the value of the assets of the estate, the property having been acquired before the relationship and the company being insolvent at the time of Mr Clear's death;
(d)Ms Sutton had enjoyed "a generous salary" from the business and had been rewarded by overseas trips;
(e) Ms Sutton made no contribution to Mr Clear's household; (f) there were no children of the relationship;
(g)although Ms Sutton lived with Mr Clear during the last six months of his life, he was able to work during that period except for the last week;
(h)family members, particularly Silvia and Lynette, also undertook a significant role in caring for Mr Clear following both surgeries in
2010 and 2011;
(i)after leaving Hamilton, Ms Sutton received a salary of $33,800 a year and an additional $15,600 by way of rental income;
(j) Ms Sutton's children were no longer dependent upon her; and
(k)while Ms Sutton had undergone treatment for a lump on her breast, the diagnosis and subsequent treatment established it would be unlikely to have any significant impact on her ability to lead a full and active life.
[59] To the extent that Judge Brown took into account Ms Sutton's health difficulties, Mr Hudson suggested that the subsequent events did not justify any uplift in the amount that should have been awarded by reference to the circumstances at the time when the breach of moral duty occurred.
[60] Mr Hudson submitted that an award of $100,000 would enable Ms Sutton to clear the indebtedness over her property and leave her with a small nest egg.
Costs
[61] As to costs, Mr Hudson submitted the Judge erred in uplifting the award by
$10,000 because of the failure to accept the settlement offer. He said Judge Brown failed to have regard to the fact that whether or not the parties lived in a de facto relationship was only part of the consideration in respect of Maxine's claim under the Family Protection Act and not relevant at all to the claim under the Law Reform (Testamentary Promises) Act.
[62] Further, the "Calderbank offer" was not limited to an offer to settle for
$300,000 but was an "all or nothing" offer seeking other remedies extrinsic to the proceedings. Counsel argued that the Judge erred in failing to take account of the fact that Ms Sutton was not successful in her relationship property claim and that Ms Sutton gave evidence, which had to be refuted by an accountant, that she had contributed to an increase in the value of the estate's property. In Mr Hudson's submission, the reasonableness of the family's conduct in rejecting the offer should be assessed at the time the offer was made, and that the family was justified in taking the view then that there was insufficient evidence to establish the existence of a de facto relationship.
Submissions for the respondent
The Court was right to find that a de facto relationship existed
[63] In his response to Mr Hudson's criticism of the Judge's approach to the primary issue of the existence of a de facto relationship, Mr French emphasised that this was a second relationship for both parties who were relatively mature when the relationship was found to have begun in 2006. He argued that, as a result, some of the factors set out in s 2D(2) carried less significance than they might in a case of younger partners said to have entered into a first relationship in the nature of a marriage.
[64] In essence, Mr French supported the Judge's reasoned approach, arguing that the appellants had failed to identify where the Judge went wrong in his assessment. He particularly disputed the proposition that the Judge had conflated the issue of Mr Clear and Ms Sutton being a couple with the question of whether or not they were living together. He emphasised that the absence of substantial cohabitation and the mingling of property needed to be considered in the light of the ages and stages of life reached by the participants, viewed particularly in light of the perceived attitude of the children to the development of the relationship within a relatively short time of their mother's death.
[65] Mr French emphasised the evidence of the friends of the couple who, recognising that they did not live together in the conventional sense, described them (to use the words of Robyn Blake) as "utterly entwined" and "literally inseparable". Mr French said their friends regarded them as being not only in a devoted relationship but in one which was permanent and exclusive. He referred to the evidence of Mrs Judy Johnstone who, with her husband, had known Max Clear for
20 years. She described the relationship as being much more than just a romance, saying it involved 100 per cent commitment on both sides:
They were life partners. They meant everything to each other. As well as being together at the airfield [for work] they spent virtually all the off-work hours in each other's company.
[66] Mr French stressed particularly the evidence of Mr Knox and his partner, Jan Pollock, emphasising that Mr Knox made it clear in his evidence that he was a reluctant witness.
[67] Overall, Mr French argued that despite the absence of cohabitation to any significant degree, the Judge was entitled to include that they were more than just sexual partners and good companions; that they lived integrated lives, sharing both business and recreational interests, common friends and common experiences, including while on holiday.
[68] Mr French submitted that although the Judge had said, at [66], that he was unsure of the reason why there was no regular pattern of Ms Sutton and Mr Clear spending nights together at each other's homes, he in fact accepted that the explanation lay in the concealment of the relationship from the children which developed over time into a pattern obviously mutually acceptable to them. Whether or not it would have been wiser for Mr Clear to have revealed the true situation to his children was beside the point; the animosity of the beneficiaries towards Ms Sutton has justified the approach which Ms Sutton and Mr Clear took.
[69] The appellants’ case was criticised by Mr French for being based on a quantitative rather than qualitative assessment under s 2D. Counsel emphasised that this was a permanent and long-term commitment rather than one which was intermittent, and that it continued notwithstanding the limitations on cohabitation imposed by the presence of Phillip and Tina, and Mr Colebrook, in Mr Clear's house.
$400,000 under the Family Protection Act a fair outcome
[70] As to the quantum of the Judge's award under the Family Protection Act, Mr French observed that both he and Mr Hudson accepted that, in fixing the sum of
$400,000 as appropriate, the Judge had exercised a discretion. He submitted that it was incumbent on the appellants to show that the Judge erred in principle, or took account of an irrelevant factor, or ignored a relevant factor, or was plainly wrong.
[71] Mr French argued that the authorities supported the Judge's view that Ms Sutton's health issues were a relevant factor in the assessment of the appropriate quantum.14 Mr French said that the result of the finding that Ms Sutton was in a de facto relationship with Mr Clear gives her the status of a second wife and, in a case where the competing needs of children was not relevant, a provision of less than
15 per cent of a $3million estate was not overly generous.
[72] Mr French emphasised Ms Sutton's efforts in supporting and encouraging Mr Clear in his aviation business and his broader involvement in the airfield and flying. Those matters were of the utmost importance to Mr Clear and the evidence indicated that she made a substantial, though not necessarily financial, contribution. As to Ms Sutton's personal circumstances, Mr French pointed to the facts that her after tax income was only $25,000 per annum; that she has a modest vehicle and little or no money in the bank; that her investment in the hangar provided her with no substantial return; and that she is vulnerable "health-wise".
Costs
[73] As to costs, Mr French argued that it does not matter that the settlement offer made by Ms Sutton might not have been strictly Calderbank offer because of the addition of other factors. The question is simply whether the appellants failed without reasonable justification to accept the settlement offer, whether in the form of
an offer under r 14.10 or some other offer to settle or dispose of the proceeding.15
The Judge's decision was essentially discretionary and the appellants have not demonstrated any error.
Discussion
[74] Judge Brown did not expressly refer to the s 2D(2) indicia of a de facto relationship. I accept that they are not exhaustive and that none is a necessary
element of a qualifying relationship, but they provide a useful pathway in the
14 Little v Angus [1981] 1 NZLR 126 (CA).
15 Rule 14.6(3) High Court Rules.
evaluative exercise which the Court is required to undertake. Subsections 2D(2) and
(3) of the PRA are as follows:
2D Meaning of de facto relationship
(1) …
(2) In determining whether 2 persons live together as a couple, all the circumstances of the relationship are to be taken into account, including any of the following matters that are relevant in a particular case:
(a) the duration of the relationship:
(b) the nature and extent of common residence: (c) whether or not a sexual relationship exists:
(d) the degree of financial dependence or interdependence, and any arrangements for financial support, between the parties:
(e) the ownership, use, and acquisition of property:
(f) the degree of mutual commitment to a shared life: (g) the care and support of children:
(h) the performance of household duties:
(i) the reputation and public aspects of the relationship. (3) In determining whether 2 persons live together as a couple,—
(a) no finding in respect of any of the matters stated in subsection (2), or in respect of any combination of them, is to be regarded as necessary; and
(b) a Court is entitled to have regard to such matters, and to attach such weight to any matter, as may seem appropriate to the Court in the circumstances of the case.
[75] In discussing the criteria and the Judge's evaluation of them, I note Mr Hudson's submission of the need for caution when evaluating evidence given by only one of the asserted parties to the relationship. While that is true, there was evidence before the Court in this case from which Mr Clear's views of the relationship might be inferred. I refer, for example, to the birthday cards and the observations of close friends about what he said and how he conducted himself during the relationship.
The duration of the relationship
[76] Although Mr Hudson was critical of the Judge's acceptance of Ms Sutton's evidence that the de facto relationship began in 2006, without identifying any evidence justifying that conclusion, I consider the Judge was entitled to that view. As the many cases in which the commencement date of a de facto relationship is a central issue demonstrate, the very nature of the relationship often makes it difficult to determine with any precision when a relationship developed from a friendship or a romantic involvement to a qualifying relationship. Whereas a marriage or civil union is known to have begun on the day the parties make the necessary public declaration, the result of the Court's enquiry in cases such as this is that the law imposes "the legal status of a de facto relationship retrospectively upon parties whose relationship gradually and without conscious election assumed that
character."16 I assess Ms Sutton's nomination of 2006 (without being precise as to
the date) as being the year by which she and Mr Clear could reasonably be said to have cemented their bond into a lasting and exclusive relationship after having its origins in a working relationship leading to friendship and to a romantic and sexual liaison. The Judge was entitled to accept that assessment by Ms Sutton in the absence of any evidence that there had been a falling out or a change in the relationship which might have indicated that it did not have a qualifying character.
[77] On the basis of Ms Sutton's assessment, it was a five-year relationship at least. That may be regarded as reasonably substantial, given that it was terminated only by Mr Clear's unfortunate death; there is nothing in the evidence to suggest that it would not otherwise have lasted much longer. It is instructive also that under the PRA, the legislature has determined that a relationship of longer than three years is not one of short duration.17
[78] The length of the period during which there was a close and exclusive bond weighs in favour of a qualifying relationship.
16 DM v MP, above n 10, at [23].
17 Section 2E(1)(b)(i).
The nature and extent of common residence
[79] The weight of the evidence falls heavily in favour of a finding that Mr Clear and Ms Sutton did not share a common residence at any stage. Even accepting Ms Sutton's evidence of an arrangement whereby they would spend certain weekend nights at each other's houses, there was no evidence that they had in any sense set up house together. The Judge was entitled to accept that Ms Sutton rarely visited Mr Clear's house during the time Phillip and Tina were living there and on the frequent occasions between 2008 and 2010 when Mr Colebrook was staying. Although I remind myself that the absence of a common residence is not a disqualifying factor, it weighs against the existence of a qualifying relationship.
Whether or not a sexual relationship exists
[80] Ms Sutton said that the relationship had a sexual element and it would be surprising, given the observations of their friends, the effusive expressions of affection in the cards written by Mr Clear, and the photograph of the kiss if that were not the case. The beneficiaries suggested that Mr Clear's surgery following prostate cancer indicated that a sexual relationship might be doubted. It is in answer sufficient to say that prostate surgery does not preclude sexual fulfilment and that, in any event, the descriptions of their father's vitality and enthusiasm makes it unlikely that he would have been interested only in a platonic relationship. I have no doubt there was a sexual component.
Degree of financial dependence/interdependence and arrangements for financial support.
[81] It seems clear that, beyond meeting the cost of most of the holidays and paying for what Ms Sutton referred to as non-household needs, there was no financial dependence or interdependence or any arrangements for financial support. That militates against the existence of a qualifying relationship.
Ownership, use and acquisition of property
[82] It is plain there was no common ownership of property or mingling of assets in any way.
Care and support of children
[83] I do not read this criterion as being confined to the consideration of care and support for infant children. A broader issue relevant to this case, where the parties were mature adults with adult children, is the extent to which there was any support given by one of the asserted parties to the children of the other. In this case the evidence points to an affectionate and supportive relationship between Mr Clear and Ms Sutton's daughter, Debby, indicative of a greater commitment between Mr Clear and Ms Sutton than merely a friendship or intermittent affair.
Performance of household duties
[84] Judge Brown did not resolve the apparent conflict between the evidence of Ms Sutton and Silvia Jonson over who carried out household duties for Mr Clear. While it might have been helpful for him to have done so, this is not a particularly weighty consideration given the finding that there was no common residence and no cohabitation in a conventional sense.
Reputation and public aspects of the relationship
[85] It seems clear on the evidence that the beneficiaries did not observe behaviour between their father and Ms Sutton of a nature which would necessarily have led to the conclusion that they were in a deeply committed relationship. The allocation of a common bedroom to Ms Sutton and Mr Clear by Pauline during the Christmas visit to Waiheke Island may indicate that Pauline had some idea that the relationship was an intimate one. It is not difficult to conclude from the evidence that a deliberate decision was made by Mr Clear and Ms Sutton to behave differently towards each other when in the company of any of the children.
[86] Ms Sutton’s evidence, and that of Mr Knox and Ms Pollock, justified the Judge’s conclusions about the decision to keep the relationship from the beneficiaries. An example of the continued animosity of the beneficiaries to Ms Sutton occurred in the course of the hearing of the appeal. Addressing me on Ms Sutton's settlement offer which indicated that she would accept a payment of
$300,000, Mr Hudson made the observation that the offer was made with conditions, including one which required the beneficiaries to disclose to Ms Sutton the whereabouts of Mr Clear's ashes. Counsel confirmed from the Bar that that information had not been provided by the hearing of the appeal. It was apparent that, notwithstanding the extensive evidence given by their father's friends about Mr Clear's deep affection and close bond with Ms Sutton; the evidence of the romantic inscriptions on birthday cards; and Ms Sutton's own expressions of a deep love for their father, the beneficiaries continued to withhold from her evidence of where Mr Clear's ashes were kept. That seemed to me to underscore and justify Ms Sutton's view that the children would not welcome the knowledge that Mr Clear and she had a permanent and exclusive emotional bond which embraced all aspects of their lives.
[87] I agree with Judge Brown that the evidence of the many friends called on behalf of Ms Sutton leads overwhelmingly to the conclusion that they were publicly and by reputation a couple who were in a devoted, stable and exclusive relationship. The references to the couple being life partners, "utterly intertwined" and being integral to each other's lives more than justified the conclusion that, among their friends and acquaintances, particularly in aviation circles, they were regarded, as Mr Wykes said, as "a married couple in every sense". I note the Prime Minister's letter of condolence addressed to Ms Sutton, and the obituary in the Aviation News showing a photo of Ms Sutton and Mr Clear together and the reference to Ms Sutton as "his partner". It is also relevant that, in addressing the major health issue confronting Mr Clear towards the end of his life, Ms Sutton was introduced to the oncologist and referred to in hospital records as his partner.
The degree of mutual commitment to a shared life
[88] I accept Mr French's submission that what is called for in the assessment to be made under s 2D is qualitative rather than quantitative. Standing back and looking at the evidence of the relationship as a whole, I am not persuaded by Mr Hudson's argument that the Judge was not entitled to conclude that the evidence compellingly established an absolute commitment to a strong emotional relationship between Ms Sutton and Mr Clear. Ms Sutton's evidence that Mr Clear had asked her to marry him is corroborated by the evidence of Mr Wykes who said that Mr Clear had told him that was his intention.
[89] Separate sleeping arrangements aside, they lived their lives together. They worked together and Ms Sutton's commitment to the business was more than merely that of an employee. It is evidence that she embraced Mr Clear's passion for microlight aviation and integrated herself into his involvement with the wide circle of friends and acquaintances who shared his enthusiasm. Although the relationship was kept separate from Mr Clear's children, the evidence established that Ms Sutton's parents and children regarded him as a member of the family. Ms Sutton's presence at the Clear family Christmas on Waiheke Island suggests that Mr Clear, at least, considered Ms Sutton to be a part of his family also.
[90] It is not decisive that cohabitation, the mingling of property and financial interdependence were absent. Socially and emotionally and on a day-to-day basis, Ms Sutton and Mr Clear were deeply committed to a shared life. After all, they were not young adults, starting out on life building assets together. By the time of Mr Clear's death, they were mature people, albeit in different individual financial circumstances, living wholly intertwined lives.
[91] It is significant, in my view, that Mr Clear's wealth lay entirely in the value of the family farm. Putting the land to one side and acknowledging that the aviation business was worthless, Mr Clear had not accumulated any other assets. In those circumstances, it is unsurprising that he decided that the only beneficiaries of his estate would be his children. Albeit at a modest level, Ms Sutton had her own home and the ability to earn an income. She did not have to support her children. I do not
consider it persuasive that Mr Clear, in those circumstances, decided to make no testamentary provision for Ms Sutton. The finding that he and Ms Sutton were in a de facto relationship, however, means in law that he erred in doing so.
[92] The Judge was entitled to reach the conclusion he did about the nature of the relationship and its duration. I dismiss the appeal against that finding.
Quantum of award under the Family Protection Act
[93] It having been accepted that the establishment of a de facto relationship would lead inevitably to the conclusion that Mr Clear had breached his moral duty to Ms Sutton by making no provision for her out of her estate, the Judge took a broad approach to the exercise of his discretion to award compensation. I am not persuaded that he erred in the way he addressed the issues. Acknowledging the origin of the estate's principal asset – the farm – and accepting that Mr Clear's children and Ms Sutton were all financially independent of him, it was reasonable for the Judge to look at Ms Sutton's personal circumstances in assessing what would be a fair provision for her from the estate. There was no evidence that any of the children had any greater need.
[94] The Judge was entitled to come to the view that, given the pleasure and companionship that Ms Sutton must have given to Mr Clear in the last five to seven years of his life, her comfort and support during the difficult last six months, and her status, effectively, as his second wife, the Judge was right, in my view, to look at the benefit that an award in the vicinity of $400,000 would provide for her. Not only would it enable her to clear away the security over her Te Kowhai property, it would provide her with a reasonable capital sum during the latter years of her life, bearing in mind her reducing ability to earn an income and the adverse implications of her ill health. The allocation of 13 per cent of the estate to Ms Sutton in those circumstances was available to the Judge and I have no inclination to interfere with it. I dismiss that part of the appeal also.
Costs
[95] The Judge's assessment of scale costs of $46,445 is challenged by Mr Hudson only insofar as he submits that the Judge should have taken into account that Ms Sutton's claim under the PRA did not succeed. I do not think this is a case in which it is appropriate to look at proportionality in terms of the beneficiaries having successfully resisted one aspect of the claim. As the scope of the Family Court judgment demonstrates, the issue which occupied most of the evidence and the argument was whether or not Ms Sutton and Mr Clear were in a de facto relationship. Ms Sutton succeeded on that argument. That left three alternative claims to a remedy for Mr Clear's failure to make provision for Ms Sutton in his will.
[96] Bearing in mind the nature and value of the respective separate property of the parties, it was almost inevitable that the claim for relief under the PRA would fail. However, it was also inevitable that the claim under the Family Protection Act would succeed. The parties were not required to do more in arguing the quantum of relief than point to evidence which was relevant to the primary issue.
[97] The uplift of $10,000, or nearly 20 per cent, for increased costs could only have been justified by reference to the rejection by the beneficiaries of Ms Sutton's attempts to settle the claim. The Judge's consideration of the claim for increased costs was perfunctory. He said:
[12] Calderbank issues in this proceeding are clouded by the inclusion in communications of a number of incidental items not reflected in the Judgment. Mr French seeks an additional award of $10,000 to reflect pursuant to R 14.6(3)(b)(v) the rejection of the applicant's essential final offer to settle for $300,000. I think that is a reasonable claim in the circumstances and I so order.
[98] Rule 14.6(3)(v) of the District Court Rules 2014 provides that the Court may order a party to pay increased costs if the party opposing costs has contributed unnecessarily to the time or expense of the proceeding by failing, without reasonable justification, to accept an offer of settlement, whether in the form of an offer under r 14.10 or some other offer to settle or dispose of the proceeding. An offer under r 14.10 is one that is expressly stated to be without prejudice except as to costs and relates to an issue in the proceeding.
[99] There was no analysis by the Judge of the settlement offer made by Ms Sutton, either as to its content or its timing, and the Judge did not give any reasons why it was unreasonable of the beneficiaries to have rejected it. It was not sufficient for the Judge to resort to the exercise of his general discretion as to costs under r 14.1.18
[100] The settlement offer related to matters outside the scope of the proceeding including:
(a) The return to Ms Sutton of a scooter and kayak which she claimed to be hers;
(b) The purchase by the estate of Ms Sutton's hangar at a cost of $40,000;
(c) The forgiveness or extinguishment of hangar rental then due and owing;
(d) An acknowledgement that Ms Sutton was Mr Clear's de facto partner;
and
(e) Advice to Ms Sutton as to the whereabouts of Mr Clear's ashes.
[101] The offer including the payment of $300,000 was said by Mr Hudson to have been put on an "all or nothing" basis.
[102] In the circumstances, there was no justification for the Judge simply to award increased costs because he considered the rejection of an "essential final offer to settle for $300,000" brought about a reasonable claim.
[103] Accordingly, I allow the appeal against the costs decision. Scale costs only were justified.
18 New Zealand Carbon Farming Limited v Mighty River Power Limited [2016] NZCA 624.
[104] The costs order is quashed and replaced with an order that in respect of costs
in the Family Court, the respondents in that Court should pay Ms Sutton:
Scale costs 46,455.00 Disbursements
5,903.52
Witnesses' expenses
8,067.46
$60,425.98
Result of appeal
[105] In the end result the appeal is allowed in part only so far as the costs order is concerned, and dismissed in all other respects.
Cross-appeal
[106] The appeal against the order under the Family Protection Act having failed, it is unnecessary to address the cross-appeal. I dismiss it accordingly.
Costs on the appeal
[107] Having succeeded in the substantive aspects of the appeal, Ms Sutton is entitled to costs on a Category 2B basis.
[108] If costs cannot be resolved between the parties, Ms Sutton shall file and serve a costs memorandum by 28 July 2017. Any costs memorandum in reply shall be filed and served by 25 August 2017. Costs shall then be dealt with on the papers unless the Court directs otherwise.
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Toogood J
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