Henry v Henry
[2024] NZHC 1841
•9 July 2024
NOTE: PURSUANT TO S 169 OF THE FAMILY PROCEEDINGS ACT 1980, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B, 11C AND 11D OF THE FAMILY COURT ACT 1980. SEE
https://
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. SEE
https://
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2024-404-000015
[2024] NZHC 1841
BETWEEN COLIN SAMUEL HENRY
Appellant
AND
LORRAINE ALTHEA HENRY aka LORRAINE ALTHEA MORGAN
Respondent
cont’d ….
Hearing: 23 May 2024
Further submissions: 9 June 2024
Appearances:
C Henry in Person
J Macdonald for Respondent (CIV-15) and Second Respondent (CIV-3123)
Judgment:
9 July 2024
JUDGMENT OF ANDREW J
This judgment was delivered by Justice Andrew on 9 July 2024 at 3.00 pm
pursuant to r 11.5 of the High Court Rules 2016 Registrar / Deputy Registrar
Date …………………………..
HENRY v HENRY [2024] NZHC 1841 [9 July 2024]
CIV-2023-404-003123 BETWEEN
COLIN SAMUEL HENRY
ApplicantAND
THE FAMILY COURT AT AUCKLAND
First Respondent
LORRAINE ALTHEA HENRY
Second Respondent
Introduction
[1] This is an appeal against a decision of the Family Court in relationship property proceedings.1 There is also a parallel judicial review proceeding arising from the same Family Court judgment.
[2] At issue is the jurisdiction of the Family Court to make orders in respect of a nuptial trust under s 182(1) of the Family Proceedings Act 1980 (FPA).
[3] Under s 182 of the FPA, the Family Court has the power to vary the terms of a nuptial settlement where the parties’ marriage or civil union comes to an end. The purpose of s 182 is to enable the courts to remedy the consequences of the failure of the premise on which the nuptial settlement was made, that is, a continuing marriage.2 The Family Court has the power to prevent one party from benefiting unfairly from the settlement at the expense of the other in the changed circumstances.3
[4] The parties, formerly husband and wife, are the settlors of the Boucanier Trust, which previously owned their family home. It is a nuptial trust and hence a post-nuptial family settlement for the purposes of s 182(1) of the FPA. The parties disagree about how the proceeds of the sale of the home should be divided between them.
[5] Mr Henry says that the Family Court had no jurisdiction under s 182 because Mrs Henry’s application was made before the order for dissolution was made. He also challenges the decision of the Family Court Judge to award an equal share of the proceeds of the sale of the family home.
Factual background
[6] The parties were married for 16 years. They met in 1986, married in July 2001, and separated in 2017. In 2002, they had the only child of the marriage, a son, Jannick Henry.
1 Morgan (Henry) v Henry [2023] NZFC 11590.
2 Preston v Preston [2021] NZSC 154, [2021] 1 NZLR 651, citing Ward v Ward [2010] NZLR 31 (SC).
3 Ward v Ward, above n 2, at [20].
[7] On 18 May 2006, the Boucanier Trust (the Trust) was established by deed. The parties are the settlors of the Trust, and Mrs Henry has been a trustee since 2006. The parties, together with their son, are discretionary beneficiaries. Their son is the final beneficiary.
[8] On 31 May 2006, the Trust purchased 20 Anchorite Way, Red Beach, Orewa. That was the family home for the duration of the marriage.
[9] In 2017, the parties separated but continued to reside in the family home until it was sold in December 2020. When the parties separated, the principal asset of the Trust was the family home.
[10] The sale proceeds of $748,734 have been retained in the trust account of the solicitor for the Trust, and an advance has been made to Mr Henry in the sum of
$225,000 and to Mrs Henry in the sum of $75,000.
[11] On 23 March 2021, Mrs Henry applied for orders under s 44 of the Property (Relationships) Act 1976 (PRA) and s 182 of the FPA.
[12]On 5 May 2021, a dissolution order was made.
[13] On 12 May 2021, Mr Henry was served with the applications, including the s 182 application.
[14]Mr Henry is now 72 years old, and Mrs Henry is 55.
Decision of Family Court Judge
[15] The Family Court Judge held that the Boucanier Trust was a “paradigm example of a post-nuptial family settlement”, being a discretionary trust established by a husband and wife during their marriage to hold core family assets.4
[16]The Judge addressed two key issues:
4 Morgan (Henry) v Henry, above n 1, at [7].
(a)Whether he had jurisdiction to make orders under s 182 of the PRA in circumstances where the application was filed six weeks before the marriage was dissolved; and
(b)If there is jurisdiction, how was the discretion to be exercised under s 182?
[17] His Honour noted Mr Henry’s position that the proceeds of sale should not be divided equally between the parties because he is now 72 years old and Mrs Henry is 55 years old. He recorded Mr Henry’s position that he is suffering from significant chronic and acute health issues and that his financial needs are significantly greater than his ex-wife’s.
[18] On the issue of jurisdiction, his Honour held that the language in s 182(1) is “clear enough”.5 The Family Court cannot make or complete its inquiry as to whether there is a post-nuptial settlement and, if so, whether and how to exercise its jurisdiction, until the parties’ marriage is dissolved.
[19]His Honour further held:6
(a)The section does not specifically say that “no application can be filed” in the Family Court until the marriage is dissolved;
(b)The s 182 application was filed on 23 March 2021. Although this application was filed, and some of the parties’ evidence was filed before the marriage was dissolved in April 2021, the hearing before him did not commence until 4 October 2023;
(c)The inquiry under s 182 occurred, and any orders his Honour decided to make would be occurring, “within a reasonable time” after the dissolution;
5 Morgan (Henry) v Henry, above n 1, at [37].
6 Morgan (Henry) v Henry, above n 1, at [38]–[40].
(d)It is not correct that an “application” cannot be filed until the marriage is dissolved. It is the “inquiry” or “substantive hearing” that can only occur on or after dissolution.
[20]Accordingly, there was jurisdiction to make an order under s 182.
[21] In addressing the second issue of the exercise of discretion, the Judge first referred to the three-stage analysis in the Supreme Court decision of Preston v Preston.7 His Honour then traversed the history of the Trust and the relationship of the parties, concluding that there was a significant gap or difference between the expectations the parties had prior to separation/dissolution and the positions they are in now.8 He noted that there is “of course no presumption of a 50/50 split”. He held, however, that with a “conventional relationship” of comparatively long duration “like this one”, there would need to be good reason to depart from an equal division of Trust assets. That is in “good part” because of the presumption of equal contribution to and equal sharing of the relationship that arises by analogy from the relevant provisions of the PRA.9
[22] The Judge noted that, when looked at objectively, the parties’ marriage was a successful one. The relationship subsisted for around 16 years. They have a son,
Jannick, of whom they are both rightly proud.10
[23]His Honour held:11
The fact that their relationship subsisted for as long as it did reinforces my finding that they each made contributions of a different kind to the relationship and there is nothing to displace the presumption that those contributions were of approximately equal value. I take into account the principle in [s] 1M(b) of the PRA that all forms of contribution are treated as equal.
7 Preston v Preston, above n 2, at [39].
8 Morgan (Henry) v Henry, above n 1, at [78].
9 Morgan (Henry) v Henry, above n 1, at [81].
10 Morgan (Henry) v Henry, above n 1, at [82].
11 Morgan (Henry) v Henry, above n 1, at [87].
[24] The Judge referred to the age difference between the parties, to Mr Henry’s current medical issues, and to the dissatisfaction that both parties had expressed with “some aspects of their past relationship”, holding that:12
Although Mr Henry’s immediate needs and his needs in the near future are likely to be significantly higher than [Mrs Henry’s], the fact that [Mrs Henry] will need support for a longer period of time, leads me to the conclusion that the just outcome is an equal division of the net proceeds of sale of the Anchorite Way property.
[25]His Honour made the following orders:
(a)The remaining assets of the Boucanier Trust held on deposit are to be distributed so as to ensure that Mr Henry and Mrs Henry have each received an equal share of the assets the Trust held;13
(b)The Boucanier Trust “is to be dissolved” following that distribution;
(c)The costs of distribution and winding up of the Trust and any taxes and reasonable fees incurred are to be paid from the funds on deposit before further distribution is made to the parties.
Approach on appeal
[26]As Gault J held in Whyte v Whyte:14
[15] [Appeals under the FPA] are by way of rehearing. This Court’s approach on a general appeal is settled following the Supreme Court’s decisions in Austin, Nichols & Co Inc v Stichting Lodestar and Kacem v Bashir.15 The appellate court has the responsibility of considering the merits of the case afresh.16 The appellate court must be persuaded that the decision is wrong, 17 but the weight it gives to the reasoning of the court below is a matter for the appellate court’s assessment. Those exercising general rights of appeal are entitled to judgment in accordance with the opinion of the appellate court, even where that opinion is an assessment of fact and degree and entails a value judgment. If the appellate court’s opinion is different from
12 Morgan (Henry) v Henry, above n 1, at [104].
13 As his Honour held, that means that Mrs Henry will first need to receive $150,000 as an equalising payment, with the balance of the funds to be divided equally between the parties (see at [105]).
14 Whyte v Whyte [2022] NZHC 2607 at [15] (some footnotes omitted).
15 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [13] and [16]; and Kacem v Bashir [2010] NZSC 112, [2011] 2 NZLR 1 at [31]–[32].
16 Kacem v Bashir, above n 15, at [31].
17 Austin, Nichols & Co Inc v Stichting Lodestar, above n 15, at [13].
the conclusion of the tribunal appealed from, then the decision under appeal is wrong in the only sense that matters, even if it was a conclusion on which minds might reasonably differ.
[27] To the extent the Judge’s decision involved the exercise of discretion under s 182, the approach of an appellate court is that the appellant must show that the Judge acted on a wrong principle, failed to take into account some relevant matter, took account of some irrelevant matter, or was plainly wrong.18
Analysis and decision
Issue (a) – Jurisdiction
[28] Mr Henry contends that the decision of the Family Court Judge was a nullity as his Honour “lacked jurisdiction” to make the s 182 order. Mr Henry says that, because the decision was a nullity, it cannot be appealed, and that is why he has brought the judicial review proceedings. Mr Henry submits that, when the s 182 application was filed, the relevant dissolution order had not yet been made. He argues that, at that time, the “purported application” was of no force or effect, its intention was to engage the Family Court’s jurisdiction, but it could not do so, as the prerequisite for the Family Court did not then exist – namely the dissolution order.
[29] He further argues that, because the application was “always a nullity”, it remained a nullity. He says that “[n]either the passage of time nor the latter issuance of an order dissolving the parties’ marriage could convert [the nullity of the application] into a validity.”
[30] The issue for this Court is one of statutory interpretation. The starting point is that the meaning of legislation is to be ascertained from its text and in light of its purpose and its context.19
[31] As the Judge held, the wording of s 182 is clear and does not support Mr Henry’s interpretation. The section expressly says that it is “on, or within a reasonable time” after the making of an order for dissolution of marriage that the
18 May v May (1982) 1 NZFLR 165 (CA) at [169]–[170]. See also Kacem v Bashir, above n 15, at [32].
19 Legislation Act 2019, s 10.
Family Court may “inquire into” the existence of any post-nuptial settlement that is made on the parties. It is only then that orders may be made as to the application of the “whole or any part of any property settled” or the variation of the nuptial trust.
[32] The section does not say that no application can be filed in the Court until the marriage is dissolved. The timing of the exercise of the jurisdiction hinges on when an order dissolving the parties’ marriage is made and not when the s 182 application is filed. In any event, on the facts of this case, while the application was filed prior to the order for dissolution, it was not served on Mr Henry until after that date.
[33] The case relied upon by Mr Henry, namely Clarke v Clarke,20 does not support his interpretation. In that case, the Court held that it had no jurisdiction under an equivalent statutory provision to vary a settlement until the decree for dissolution had been made absolute. In this case, as the Family Court Judge noted, the hearing before him commenced on 4 October 2023, well after the marriage was dissolved in 2021. He conducted the inquiry and made the orders “within a reasonable time” after the dissolution. The position in Clarke v Clarke was otherwise, and the obiter and somewhat equivocal comments made by Kennedy LJ are of no real assistance.
[34] In my view, the position is correctly set out in Fisher on Relationship Property:21
The application under s 182 of the Family Proceedings Act 1980 may be filed at any time after the commencement of the principal dissolution proceedings providing it is not heard until the principal order under Part 4 dissolving the marriage or civil union is made. Neither the hearing nor the order under s 182 can precede the dissolution because it is only “on making an order under Part 4 of this Act” that the Court is to “inquire into the existence of any agreement etc”. Section 182(2) has similar wording.
[35]I also agree with the following commentary in The Law of Trusts (NZ):22
In practice the application [s 182] is usually foreshadowed well before it is filed and as long as the marriage is dissolved by the time the matter is adjudicated there is no practical reason why an application under s 182 should not be filed at the same time as an application seeking orders under the
20 Clarke v Clarke [1911] P 186.
21 RL Fisher (ed) Fisher on Relationship Property (online ed, LexisNexis) at [6.6] (footnotes omitted).
22 Jo Hosking Law of Trusts (online ed, LexisNexis) at [2.13].
Property (Relationships) Act 1976. Long delays in getting fixtures mean that it would unnecessarily delay to hold off filing until the marriage is dissolved.
[36] The interpretation adopted by the Judge, namely that he did have jurisdiction, is entirely consistent with the policy underlying family law legislation – that related proceedings should be managed and determined together. As Ellis J, giving the decision for the Court of Appeal, held in Booth v Booth:23
This is because of the clear policy concern underlying family law legislation that related proceedings should be managed and determined together. It is only in that way that the court could have a complete and clear view of the litigation landscape affecting a particular family – and only then can the court properly calibrate the property distribution. …
That policy is also reflected in s 160 of the FPA, which contemplates the joinder of proceedings under that Act with related PRA proceedings and allows a court to hear and determine such proceedings together.
[37] I find that the Family Court did have jurisdiction to make the s 182 order. There was no error in the Judge’s approach.
[38] I also find that Mr Henry’s claim about a lack of jurisdiction could have been accommodated within the general right of appeal under s 174 of the FPA. There was no need for the separate judicial review proceedings. The claim about a lack of jurisdiction is an allegation that the Judge in the Court below committed a material error of law. As the leading text, Joseph on Constitutional and Administrative Law, notes:24
… the “simpler construct error of law” has replaced ultra vires as the organising principle of administrative law. The courts embrace the discretionary nature of judicial review and the methodology of “overall evaluation”.
[39] There is no reason or rationale for reading down s 174 to exclude an appeal on the ground of error of law based on a lack of jurisdiction. The decision of the Family Court was and remains a binding, valid, and operative decision until such time as it is set aside by a court of competent jurisdiction (i.e. this Court). The decision, even if
23 Booth v Booth [2020] NZCA 451, [2020] NZFLR 509 at [33]–[34].
24 Philip Joseph Joseph on Constitutional and Administrative Law (5th ed, Thomson Reuters, Wellington, 2021) at 987 (footnote omitted), citing A J Burr Ltd v Blenheim Borough Council [1980] 2 NZLR 1 (CA). See also Matthew Smith The New Zealand Judicial Review Handbook (2nd ed, Thomson Reuters, Wellington, 2016) at 1066.
jurisdiction is contested, was and is a decision that can be appealed under s 174. The claim of a nullity does not remove the decision from the ambit of s 174.
Issue (b) – Challenge to the equal sharing order
[40] Mr Henry also challenges the decision of the Judge to make an order under s 182 that the parties share equally in the proceeds of sale of the Anchorite Way property. He contends that the Judge proceeded on the erroneous presumption of a 50/50 sharing.
[41] There can be no dispute that the Court has a discretion under s 182. The Court “may” inquire into the existence of any nuptial settlement and “may make” such orders as it thinks fit. However, it is not necessary for me to decide in this case whether, on appeal, I should treat the decision under challenge as one to which the May v May test applies or, rather, adopt an evaluative approach in accordance with Austin, Nichols & Co Inc v Stichting Lodestar.25 That is because, in my view, there was no error of any kind in the decision of the Judge to order equal sharing of the proceeds.
[42] It is unsurprising in a case such as this that the Judge made an award for equal sharing. The parties were married for a long time and there is a relatively modest amount of money at issue. The Trust was established during the marriage, and it owned the family home. The Judge gave careful consideration to the respective positions of the parties and correctly addressed the relevant criteria, including the two-stage process set out in Preston and Clayton. The Judge also addressed the difference in age and income-earning potential between the parties.
[43] It is relevant to record what the Supreme Court in Preston v Preston said about equal sharing:26
First, we understand from the parties that, in marriages of similar duration and circumstances to those apparent in Ward and Clayton, cases are generally being settled on a 50/50 basis. Although the point was made in Clayton that there is no presumption of a 50/50 split, we do not see any dissonance between the principles underpinning s 182 and settlements proceeding on the basis of equal sharing in cases with facts similar to those in Ward and Clayton.
25 See [26] and [27] above.
26 Preston v Preston, above n 2, at [52] (footnote omitted).
[44]Accordingly, I dismiss Mr Henry’s challenge to the order for equal sharing.
Cross-appeal
[45] Having dismissed the main appeal, it is not necessary for me to address Mrs Henry’s cross-appeal.
[46]The cross-appeal is dismissed.
Result
[47]The appeal and the judicial review proceedings are dismissed.
[48] I find that the Judge had the jurisdiction to make an order under s 182. Furthermore, there is no basis for disturbing the finding he made ordering equal sharing.
[49] As to costs, having succeeded, I am of the preliminary view that Mrs Henry, the respondent in both proceedings, is entitled to costs on a 2B basis, plus disbursements (i.e. costs on both proceedings). If the parties cannot agree, then submissions (no more than three pages) are to be filed and served within 21 days.
Andrew J
0
4
0