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Goldstone v Goldstone

Goldstone v Goldstone

Case [2021] NZCA 664 8 December 2021

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IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA383/2019
[2021] NZCA 664

BETWEEN	ANDREA JEANETTE MARY GOLDSTONE Appellant
AND	SHARON MARIE GOLDSTONE AS ADMINISTRATOR OF THE ESTATE OF REECE CLIVE GOLDSTONE First Respondent
AND	THE MINISTER OF FINANCE ON BEHALF OF THE CROWN Second Respondent

Hearing:	3 November 2021
Court:	Courtney, Duffy and Dunningham JJ
Counsel:	V A Crawshaw QC, S M Wilson and T Bartlett for Appellant M S King for First Respondent No appearance for Second Respondent
Judgment:	8 December 2021 at 10.30 am

JUDGMENT OF THE COURT

AThe appeal is allowed.
B    The vesting order made in the High Court is set aside.
CAn order is made vesting the property in Sharon Goldstone as administrator of the estate of Reece Goldstone and in Andrea Goldstone as tenants in common in equal shares.
D    The High Court’s costs order is set aside.
E    We decline to make an order for costs in this Court under s 45(2) of the Legal Services Act 2011.

____________________________________________________________________

REASONS OF THE COURT

(Given by Courtney J)

Introduction

Under s 119(3) of the Insolvency Act 2006 the High Court may order that property formerly belonging to a bankrupt but disclaimed by the Official Assignee be vested in the bankrupt if satisfied that it is fair to do so. This appeal concerns competing claims for vesting under s 119(3).
The subject property is a lifestyle block in Tauranga. Reece and Andrea Goldstone purchased the property in 2003.[1] Their plan was to live in the existing cottage with their three young sons while Reece, a builder, constructed a new house for the family. In November 2014 Reece and Andrea were both adjudicated bankrupt. Their debt exceeded their equity in the property and the Official Assignee disclaimed the property under s 117(1) of the Insolvency Act.
[1]To avoid confusion we refer to the parties by their first names.
Notwithstanding their bankruptcy, Reece and Andrea continued to make the mortgage payments until April 2015, when they separated and Andrea moved away with the children. Reece, who also moved off the property, continued to make the mortgage payments himself.
Reece and Andrea’s marriage was dissolved in October 2017. In December 2017 Reece and Andrea were both discharged from bankruptcy. Andrea subsequently applied for an order under s 119(3) that the property be vested in her and Reece equally. She also filed proceedings in the Family Court seeking a division of the property under the Property (Relationships) Act 1976 (PRA). Reece applied for an order that the property be vested in him alone.
Toogood J made an order that the property be vested in Reece alone.[2] Andrea appealed. Shortly after Andrea filed her appeal, Reece died intestate. His mother, Sharon Goldstone, is the administrator of the estate. Given the changed circumstances, Andrea now seeks to have the property vested in her alone.[3] The Family Court proceedings are still on foot, awaiting the outcome of this appeal.
[2]Goldstone v Goldstone [2019] NZHC 1649

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 Goldstone v Goldstone

Details

AGLC: Goldstone v Goldstone [2021] NZCA 664
Case: [2021] NZCA 664
Decision Date: 8 December 2021 at 10.30 am

CaseChat Overview and Summary

The Court of Appeal of New Zealand was presented with an appeal in the case of Goldstone v Goldstone, where Andrea and Reece Goldstone, a formerly married couple, competed for vesting of a property that had been disclaimed by the Official Assignee due to their bankruptcy. The property was a lifestyle block in Tauranga which the couple had purchased in 2003. After their adjudication of bankruptcy in 2014, the Official Assignee disclaimed the property, which was then subject to a vesting application under s 119(3) of the Insolvency Act 2006. The primary issue before the court was to determine a fair outcome under s 119(3) in light of Reece’s death and the changed circumstances since the High Court’s decision.

The Court of Appeal held that the appeal was a general appeal and that the Judge in the High Court had erred in his assessment of what was fair under s 119(3). The Court found that the Judge had failed to take into account the relevant factors weighing in favour of each party’s application, and that his view that the Family Court lacked jurisdiction to deal with the property was a significant factor in his reasoning. The Court also found that Reece’s death had significantly altered the landscape against which the s 119(3) assessment would be made, warranting a fresh assessment.

The Court of Appeal concluded that vesting the property jointly in Andrea and Sharon Goldstone as tenants in common in equal shares was the fair result for the purposes of s 119(3). The appeal was allowed, the vesting order made in the High Court was set aside, and a new order was made vesting the property in Sharon Goldstone as administrator of the estate of Reece Goldstone and in Andrea Goldstone as tenants in common in equal shares. The Court declined to make an order for costs in this Court under s 45(2) of the Legal Services Act 2011.

Orders