Herbst v Herbst - [2014] NZCA 430

IN THE COURT OF APPEAL OF NEW ZEALAND

CA305/2014
[2014] NZCA 430

BETWEEN

SAREL COENRAAD PETRUS HERBST AND PHILLIPUS MARTHINUS HERBST
First Applicants

HERBST FAMILY COMPANY LIMITED
Second Applicant

SAREL COENRAAD PETRUS HERBST
Third Applicant

AND

ANTOINETTE CAROLINE HERBST
Respondent

Hearing:	25 August 2014
Court:	O’Regan P, Ellen France and Miller JJ
Counsel:	R C Knight and T A Chubb for Applicants J H Hunter for Respondentr
Judgment:	2 September 2014 at 12.30 pm

JUDGMENT OF THE COURT

AThe application for leave to appeal is dismissed.
BThe applicants must pay the respondent costs on a band A basis together with usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Miller J)

Introduction

The applicants seek leave to appeal from a judgment of Brown J on appeal from the Family Court in relationship property proceedings.
The question is whether the respondent Antoinette Herbst, the former wife of the third applicant Sarel Herbst, enjoys an entitlement to the former marital home at Torbay, Auckland. Mr Herbst claims that she does not, because a prenuptial agreement signed in South Africa in 1999 provided that there would be no community of property between them, and because the home is owned by a trust of which Mrs Herbst is not a beneficiary.
The couple emigrated to New Zealand in 2000. They bought a home at Gulf Harbour. On settlement the home was registered in Mr Herbst’s name only. He subsequently transferred the home to the trust and still later a mortgage was granted to Mr Herbst’s sons to secure advances they had allegedly made to their father. The Trust sold the Gulf Harbour property and bought several other homes in succession, the last of which was the Torbay home. That was acquired in 2004. The couple separated in 2010.
In the Family Court Judge McHardy found on the facts that the South African prenuptial agreement did not follow the parties to New Zealand; once here they agreed to apply the New Zealand relationship property regime, which brought the South African agreement to an end.[1] The Judge also found that the trust was set up for the purpose of defeating Mrs Herbst’s claim to the property, so that s 44 of the Property (Relationships) Act 1976 applied, and the mortgage was a sham created for the same purpose; in particular, no advances were actually made.
[1]Herbst v Herbst [2013] NZFC 4862.
Brown J upheld these findings on appeal.[2] He refused leave by reference to the settled criteria in Waller v Hider,[3] observing that the applicants really seek to challenge the Family Court’s findings of fact and characterising the proposed questions of law as academic in light of those findings.[4]
[2]Herbst v Herbst [2013] NZHC 3535, [2014] NZFLR 460.
[3]Waller v Hider [1998] 1 NZLR 412 (CA) at 413.
[4]Herbst v Herbst [2014] NZHC 967 at [13].
The applicants identify the following questions which they say warrant a second appeal:
(a)whether the South African agreement was enforceable under s 7A…

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 Herbst v Herbst

Details

AGLC: Herbst v Herbst [2014] NZCA 430
Case: [2014] NZCA 430
Decision Date: 2 September 2014 at 12.30 pm

CaseChat Overview and Summary

In the case of Herbst v Herbst, the applicants, Sarel Herbst, Phillipus Herbst, and Herbst Family Company Limited, sought leave to appeal a decision from the High Court of New Zealand, which had upheld a judgment from the Family Court. The central issue was whether Antoinette Herbst, the former wife of Sarel, was entitled to the former marital home at Torbay, Auckland. The applicants argued that the South African prenuptial agreement, which provided for no community of property between them, should apply and that the home was owned by a trust of which Mrs Herbst was not a beneficiary. Conversely, Antoinette Herbst contended that the prenuptial agreement did not apply in New Zealand and that the trust was set up to defeat her claim.

The legal issues revolved around the enforceability of the South African prenuptial agreement under New Zealand law, the application of section 44 of the Property (Relationships) Act 1976, and whether the mortgage granted to Sarel Herbst's sons was a genuine transaction or a sham. The Court of Appeal needed to determine if the High Court's decision to dismiss the appeal was correct. Specifically, they needed to assess whether the applicants' proposed questions of law were indeed academic in light of the High Court's factual findings.

The Court of Appeal found that the High Court had properly considered the merits of the case afresh and upheld the findings of fact made by the Family Court. The judges determined that the prenuptial agreement was not enforceable in New Zealand, and the trust was established to prevent Antoinette Herbst from claiming the property. Furthermore, the Court of Appeal found that the mortgage to Sarel Herbst's sons was a sham, created to further this purpose. Based on these findings, the Court of Appeal concluded that no purpose would be served by a second appeal and dismissed the application for leave to appeal. The applicants were ordered to pay the respondent's costs on a band A basis, along with usual disbursements.

Orders