Cossio v Cossio - [2019] NZHC 367

NOTE: PURSUANT TO S 35A OF THE PROPERTY (RELATIONSHIPS) ACT 1976, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B,

11C AND 11D OF THE FAMILY COURT ACT 1980. FOR FURTHER INFORMATION, PLEASE SEE

https://www.justice.govt.nz/family/about/restriction-on-publishing-judgments/

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-000814

[2019] NZHC 367

BETWEEN
THERESA LAI FONG WONG COSSIO

Respondent/Appellant

AND

MATTHEW COSSIO

Applicant/Respondent

Hearing: 7 March 2019

Appearances:

R C Knight and T A Chubb for Respondent/Appellant M Vickerman for Applicant/Respondent

Judgment:

7 March 2019

ORAL JUDGMENT OF VENNING J APPLICATION FOR LEAVE TO APPEAL

Solicitors: TGT Legal, Auckland
Ewart & Ewart, Auckland

Counsel: M W Vickerman, Auckland

COSSIO v COSSIO [2019] NZHC 367 [7 March 2019]

Introduction

[1] In a decision delivered on 26 October 2018 this Court allowed an appeal from a decision of Judge S J Maude in the Family Court.1 The Family Court Judge had held that Mr Cossio’s shares in a company, J Cossio Ltd (JCL), were Mr Cossio’s separate property because, although the shares were acquired during the marriage, the Judge considered they had been transferred to him as part of Mr Cossio’s father’s succession plan and therefore s 10 of the Property (Relationships) Act 1976 (the Act) applied.

[2] This Court held that Mr Cossio’s shares in JCL were relationship property. The shares had not been acquired by succession. Applying the decision of the Court of Appeal in Mills v Dowdall2 the Court held the shares were transferred to Mr Cossio for value, namely $445,458, which created a debt owing by Mr Cossio to his father. While that debt was reduced by dividends from a company which was separate property, the shares were not acquired by the reduction of that debt. They were acquired at the time of their transfer to Mr Cossio. The subsequent repayments of the debt that was created at that time, whatever the source, were simply the reduction of a liability.

Application for leave

[3] Mr Cossio seeks leave to appeal. In support of the application Mr Vickerman submits:

(a)Mills v Dowdall was not addressed by the Family Court Judge;

(b)the application of the case in this proceeding extends its reach beyond the facts in Mills v Dowdall;

(c)the application of Mills v Dowdall in this case conflicts with ss 9, 8 and 10 of the Act; and

1 Cossio v Cossio [2018] NZHC 2779.
2 Mills v Dowdall [1983] NZLR 154 (CA).

(d)resolution of the application of Mills v Dowdall in this case is a question of law of public interest of significant importance which outweighs the cost and delay of a further appeal. Clarity is desirable.

[4] Mr Vickerman confirmed he accepted that Mills v Dowdall was correctly decided on its facts but argued that it should be restricted to the situation it involved, namely the transfer of property accompanied by gifting programmes which are no longer applicable.

[5] There is also…

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 Cossio v Cossio

Details

AGLC: Cossio v Cossio [2019] NZHC 367
Case: [2019] NZHC 367
Decision Date: 7 March 2019

CaseChat Overview and Summary

In Cossio v Cossio, the High Court of New Zealand considered an application for leave to appeal a decision which held that shares in a company were relationship property under the Property (Relationships) Act 1976. The applicant argued that the Court of Appeal decision in Mills v Dowdall was wrongly applied to the facts of the case. The Court held that the principle in Mills v Dowdall was correctly applied and there was no reasonable argument to appeal the decision. The Court focused on the nature of the transaction, finding that the shares were acquired for value and thus became relationship property. The Court rejected the argument that the shares were acquired by the repayment of a debt from dividends, noting that the shares were acquired at the time of transfer. The Court also found that the argument that the case of Mills v Dowdall should be restricted to its specific facts was unpersuasive. The application for leave to appeal was dismissed with costs awarded to the respondent.

The Court of Appeal's decision in Mills v Dowdall remains good law and its principles were correctly applied to the facts of Cossio v Cossio. The Court found that the shares were acquired for value and thus became relationship property, regardless of the subsequent repayment of the debt from dividends. The Court rejected the argument that the application of Mills v Dowdall was confined to its specific facts or that it was incorrectly applied in this case. The Court held that the focus should be on the nature of the transaction, which was an effective transfer of property for valuable consideration. The applicant's argument that the shares were acquired by the repayment of a debt was rejected, as the shares were acquired at the time of transfer. The Court found that there was no reasonable argument to appeal the decision and dismissed the application for leave to appeal with costs awarded to the respondent.

Orders