Herbst v Herbst
[2013] NZHC 3535
•20 December 2013
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 COURT/LEGISLATION/RESTRICTIONS-ON-PUBLICATIONS.
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2013-404-4251 [2013] NZHC 3535
IN THE MATTER of an appeal under s 39(1)(b) of the
Property (Relationships) Act 1976
BETWEEN SAREL COENRAAD PETRIUS HERBST AND PHILLIPUS MARTHINUS HERBST
First Appellants
HERBST FAMILY COMPANY LIMITED Second Appellant
SAREL COENRAAD PETRUS HERBST Third Appellant
AND ANTONINETTE CAROLINE HERBST Respondent
Hearing: 12 November 2013
Counsel: R C Knight for the Appellants
J Hunter for the Respondent
Judgment: 20 December 2013
JUDGMENT OF BROWN J
This judgment was delivered by me on 20 December 2013
At 11 am, pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Solicitors: Quay Law, Auckland 1143
Counsel: R C Knight, Auckland 1140
HERBST v HERBST [2013] NZHC 3535 [20 December 2013]
Introduction
[1] The appellants appeal from a decision of his Honour Judge I A McHardy1 delivered on 26 August 2013 finding that there had been a disposition of property under s 44 of the Property (Relationships) Act 1976 (“the Act”) and directing that, in light of the finding of a s 44 disposition, the respondent wife (“the wife”) was entitled to receive one half of the proceeds of sale of a property at Auld Street, Torbay with no allowance being made, in calculating the net proceeds of sale, for the amount of a mortgage to the sons of the former husband (‘the husband”).
[2] The grounds detailed in the notice of appeal seeking an order quashing the Family Court’s findings that there was a disposition that fell within s 44 of the Act were extensive. They stated:
1.The Learned District Court Judge erred in law and in fact in his treatment of the ante-nuptial agreement entered into by the parties in South Africa, particularly in his finding that this agreement was not valid in New Zealand in that:
a. The validity or otherwise of the ante-nuptial agreement should have been determined prior to the Learned Family Court Judge’s determination of the s44 claim as it is a factor that impacts upon the husband’s (the third appellant’s) intentions and motives in relation to any dispositions of property that were made in the immediate period after he and the respondent moved to New Zealand;
b. The obiter comments in Bergner v Nelis2 that Parliament intended agreements entered into in another jurisdiction to be given effect, should have been followed;
c. Even if the ante-nuptial agreement was not valid in New Zealand, it is persuasive evidence in relation to the classification of property brought to New Zealand from South Africa;
d. The agreement as found by the Learned Family Court Judge that the third appellant and the respondent agreed that the ante-nuptial agreement would not follow them to New Zealand at [173] of the judgment, is not a finding that the Learned Family Court Judge could make on the evidence available to him. Even if there was such an agreement (which is denied), it was not in writing (unlike the ante-nuptial agreement which was in writing) and it could not have the effect as inferred by the judgment of changing the classification of all property from separate property to
1 Herbst v Herbst [2013] NZFC 4862 [Family Court Judgment].
2 Bergner v Nelis HC Auckland CIV-2004-404-149, 19 December 2005.
relationship property once that property crossed the border into
New Zealand.
2.The Learned District Court Judge erred in law and in fact when he found that the disposition to the Trust was made for the purposes of defeating the respondent’s claims as:
a. The Learned Family Court Judge never considered the motives or intentions of the third appellant in relation to the disposition to the Trust despite this being a requirement of a finding under s44;
b. The Learned Family Court Judge actually found that the third appellant believed that the property advanced to the Trust was his separate property in [154], that estate planning structures were put in place in South Africa before the third appellant’s relationship with the respondent commenced in [159], and appears to acknowledge that the sources of the funds were the third appellant’s separate resources in [161]. In light of these findings there was no evidence for the Learned Family Court Judge to infer that the third appellant’s motives or intentions were to defeat the respondent’s claim or rights under the Act.
3.The Learned Family Court Judge erred when he intermingled findings of fact in relation to the respondent’s perceptions and later events allegedly justifying such perceptions when he made his decision under s44. Such factors are not relevant to a determination under s44 as the intention to defeat must be on the part of the party making (or directing) the disposition of property and must be ascertained as at the time of the disposition.
4.The Learned Family Court Judge erred when he did not consider the position of the Trust in relation to the disposition, as it was the recipient of the disposition and whether it received the property in good faith and has altered its position in reliance upon having an indefeasible title. The Learned Family Court Judge did appear to consider the position of the mortgagees (the first appellants) but they (at the time) were not directors of the trustee company.
5.The Learned Family Court Judge erred in fact and in law when he failed to ascertain exactly which of the respondent’s rights or claims were allegedly defeated when the disposition was made.
6.The Learned Family Court Judge erred in law when he declared the mortgage a sham and by implication set it aside as s44 does not give the Court jurisdiction to make such orders.
7.The Learned Family Court Judge erred in law and acted outside his jurisdiction when he traced the disposition to the Trust through the various sales and purchases by the Trust into the property it currently owns.
8.The Learned Family Court Judge erred in fact and in law when he accepted that at least part of the funds disposed to the Trust had their origins in property owned by the first appellants in [9] and [168] yet
found that these funds were intermingled with relationship property and by implication became relationship property.
9.The Learned Family Court Judge erred in law and in fact when he failed to take into account in ordering compensation to the respondent the funds advanced to the Trust by the first appellants.
10.The Learned Family Court Judge erred in law and in fact when he did (sic) found that the funds in the savings account, being funds held (sic) owned by the first appellants, the third appellant and the respondent were intermingled and became relationship property without first considering whether all these parties consented to the intermingling (whether expressly or by implication).
11. The Learned Family Court Judge erred in law and proceeded in a way that was prejudicial and unfair to the first appellants when he allowed the respondent to give further evidence that should have been included in her reply affidavit during the hearing (particularly in the form of exhibits that had not been discovered previously by the respondent). The first appellants, in their capacities as mortgagees were ordered to be served with the proceedings, but made the decision on the evidence as filed prior to the hearing not to participate in the hearing. However, their decision would have been different had they been privy to the new evidence given (mostly in documentary form, but also orally) by the respondent during the hearing.
12.The Learned Family Court Judge erred in law and proceeded in a way that was prejudicial and unfair to the second and third appellants when he allowed the respondent to rely upon documents that had not previously formed part of her evidence or been discovered prior to the hearing, in breach of the respondent’s duties of disclosure as set out in M v B.3
[3] In his overview at the commencement of his oral submissions Mr Knight helpfully synthesised the several grounds under three primary heads of attack on the judgment, namely the findings that:
(a) The Antenuptial Contract dated 6 February 1999 executed in South Africa (“the Agreement”) was not valid in New Zealand and that the parties had agreed verbally or by conduct that the arrangements made in South Africa would not follow them to New Zealand (at [175] of
the Family Court judgment);
3 M v B [2006] 3 NZLR 660 (CA).
(b)That there was a disposition of property for the purposes of s 44 that was intended to defeat the wife’s claim to an interest in the Careen Grove property (at [178] of the Family Court judgment); and
(c) The mortgage registered to the sons of the husband at the time of separation was a sham (at[178] of the Family Court judgment). The appellants contend that there was no jurisdictional or evidential basis for that finding.
[4] At the conclusion of the judgment Judge McHardy noted that it was not clear whether any other orders were necessary in respect of other items of relationship property. Consequently he directed that counsel were to file memoranda within 14 days setting out any further orders sought to finalise matters. Memoranda were filed by both sides with reference to three matters, namely:
(a) Motor vehicles;
(b) A sum lent to the wife’s daughter; and
(c) The unequal split of monies deposited in bank accounts upon separation.
[5] On 25 October 2013 Judge McHardy delivered a supplementary decision in which he found:4
(a) That $9,000 be deducted from the amount due to the wife to equalise the value of the vehicles kept by the parties (at [4]);
(b)That no adjustment be made in relation to a $40,000 payment made by the wife to her daughter from funds in the parties’ joint account as either the payment was a gift, or if a loan, the husband has rights to
recover the loan from the wife’s daughter (at [8] and [9]);
4 Herbst v Herbst [2013] NZFC 8541 [Supplementary Judgment].
(c) That there should be a credit to the husband of $10,112 to equalise the amounts of the joint accounts transferred by the wife into her separate bank account (at [16]); and
(d)That the amounts due to the husband be offset against the amount due to the wife rather than be paid directly to the husband as the intent of the judgment is that the disposition pursuant to s 44 reverts as relationship property and the judgment is therefore jointly and severally against the husband (at [15] and [16]).
[6] On 11 November 2013 (the day before the hearing of the appeal) the appellants filed a memorandum seeking leave under r 20.9(4) to amend the notice of appeal by adding an appeal against findings (b) and (d) in the supplementary judgment as follows:
(a) The learned Family Court Judge erred in fact and/or in law when he failed to determine whether the $40,000 payment by the wife to her daughter was a gift or a loan, and that if it was a loan that the loan should become the wife’s separate property after she accounted for half of the value of it to the husband; and
(b) The learned Family Court Judge erred in fact and/or in law when he determined that the intent of the substantive judgment was that the whole of the (undefined) disposition reverted to relationship property when a finding under s44 was made as:
(i) The relief granted allowed the wife and the Trust to each become 50% owners as tenants in common of the Auld Street property rather than the wife and the husband;
(ii) In light of the relief granted, the logical interpretation is that the wife’s 50% share of the property becomes her separate property and the other 50% share is owned by the Trust and is not relationship property or the separate property of either the wife or the husband, but the property of a third party;
(iii) That s44 allows for payments to be made to the wife as compensation or for the transfer of the actual property or an interest in the property to a party but does not as a corollary of a finding that a disposition is one to which s44 applies, automatically convert the property disposed of into relationship property.
[7] For the respondent Ms Hunter did not oppose leave being granted to amend the notice of appeal in this manner provided that the argument presented in support
of the additional grounds was confined to the matters detailed in the memorandum dated 11 November 2013. I granted leave to amend the appeal on that basis.
The judgment under appeal
[8] The relevant history of the parties’ relationship is conveniently summarised in the first part of Judge McHardy’s judgment under the heading “Introduction” prior to his Honour’s recitation of the issues for his determination. Given the Judge’s thorough review of the facts, I refrain from reciting them again in toto. Instead in the course of my consideration of the several grounds of appeal I will draw attention to the facts which are particularly relevant to the individual grounds.
[9] The judgment proceeds to discuss the validity in New Zealand of the Agreement made in South Africa on 6 February 1999. However the analysis of that issue is deferred on the basis of the Judge’s view that that question involved a finding as to credibility which necessitated his first making findings on other issues in dispute. 5
[10] The judgment then proceeds to consider the parties’ submissions with reference to the s 44 issues. After a careful review of the evidence including a number of specific findings as to credibility the Judge records his findings at [156] and following, including that on the basis of the evidence there was a disposition that
came within the definition in s 44. 6
[11] At that point the judgment returns to the issue of the validity of the Agreement and records a conclusion that the Agreement is not valid in New Zealand.7 It was the adoption of that sequenced approach that is the subject of ground 1(a) in the notice of appeal.
[12] The Judge’s ultimate conclusions on the dispute are then captured as follows:
[178] My finding therefore is that this is a s 44 disposition. The wife is entitled to a remedy under s 44. There is no reason to exercise my discretion under s 44(4). She is entitled to one-half of the value of the Auld Street
5 Family Court Judgment, above n 1, at [43].
6 At [172].
7 At [175].
property. The creation of the mortgage raised by the sons at the time of separation is simply a sham as there was in fact no such monies owing to them by their father. It would appear that in respect of Judge Walker’s Temporary Order for Preservation of the Notice of Claim issued on
20 January 2012 Land Information New Zealand would seem to have incorrectly allowed the Notice of Claim to lapse and the mortgage to be registered.
...
[180] The decision of this Court is to the effect that the wife is entitled to receive one half of the proceeds of sale of Auld Street less the real estate agent’s commission on sale (if any) and the usual costs and disbursements of any sale. No allowance is to be made in calculating the net proceeds of sale for the son’s mortgage.
Approach on appeal
[13] This is an appeal under s 39 of the Act and accordingly the appeal is by way of rehearing.8 As the Supreme Court stated in Austin, Nichols & Co Inc v Stichting Lodestar9 the appellant bears an onus of satisfying the appeal court that it should differ from the decision under appeal and it is only if the appellate court considers that the appeal decision is wrong that the appellate court is justified in interfering with it. However as the Court further said:10
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 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. In such circumstances it is an error for the High Court to defer to the lower Court’s assessment of the acceptability and weight to be accorded to the evidence, rather than forming its own opinion.
[14] I will approach my consideration of the grounds of appeal within the
structure of Mr Knight’s tripartite analysis.11
8 Property (Relationships) Act 1976, s 39(3); District Courts Act 1947, s 75.
9 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [4].
10 Family Court Judgment, above n 1, at [16].
11 See [3] of this judgment.
Does the Agreement apply?
[15] The husband and wife first met in 1996 and soon thereafter commenced living in a de facto relationship. On 6 February 1999 they signed the Agreement and they were married in 17 March 1999.
[16] The parties had both been previously married and had adult children from former relationships. They each owned certain assets in their own right at the time they commenced their relationship. The South African law requires that when two people are married in South Africa they must choose whether they will have community of property or no community of property and they must elect whether to expressly exclude the Accrual System under their matrimonial property legislation.
[17] The Agreement is entitled “Anti-nuptial Contract With the Exclusion of the Accrual System in Terms of the Matrimonial Property Act, 1984”. Having recited that the parties intend to marry the Agreement states:
1. That there shall be no community of property between them.
2. That there shall be no community of profit or loss between them.
3. That the Accrual System provided for in terms of Chapter 1 of the
Matrimonial Property Act, 1984 ... is expressly excluded.
[18] The husband maintained that because of the operation of the Agreement there was no relationship property to divide including the principal asset in dispute namely the property at Auld Street.
[19] Section 7(1) provides that the Act applies to immovable property that is situated in New Zealand. However that is subject to the exception in s 7A which, in material part, states:
7A Application where spouses or partners agree
...
(2) Subject to subsections (1) and (3), this Act does not apply to any relationship property if—
(a) the spouses or partners have agreed, before or at the time their marriage, civil union, or de facto relationship began,
that the property law of a country other than New Zealand is to apply to that property; and
(b) the agreement is in writing or is otherwise valid according to the law of that country.
(3) Subsection (2) does not apply if the Court determines that the application of the law of the other country under an agreement to which that subsection applies would be contrary to justice or public policy.
[20] The Judge’s reasoning as to why that Agreement is not valid in New Zealand
is captured in [173] – [174]:
[173] I therefore return to the issue of the validity of the Agreement. As I indicated the outcome in relation to that issue very much relied upon the veracity of the parties’ evidence. I accept the wife’s version of events leading up to the immigration. I accept that she was persuaded to come to New Zealand on the promise of a new start which included an understanding that what was achieved here would be equal. In other words, there was an understanding that when the parties came to New Zealand the Agreement would not follow them.
[174] It is also relevant that the Agreement did not contemplate a move to New Zealand. It is silent as to what was to happen in respect of joint property. The bottom line if the Agreement is to be given validity in New Zealand is that the wife will leave a marriage of some 11 years with virtually nothing – to argue that this will not result in an inequity between the parties as the move to New Zealand has not changed their circumstances beggars belief.
[21] Those paragraphs appear to incorporate several different bases for the conclusion reached: a finding based upon the veracity of the parties’ evidence that an understanding was reached that the Agreement would not apply in New Zealand; a finding relating to the terms (and hence scope) of the Agreement itself under s 7A(2); and a conclusion as to the consequences if the Agreement is valid which appears to involve a finding under s 7A(3).
[22] Mr Knight argued that the Judge took a narrow approach to his analysis of the Agreement focusing solely on whether it should be enforced in New Zealand for the purposes of s 7A and giving little or no consideration to the evidential value of the Agreement with reference to the parties’ intentions at the time of the acquisition of the property at Careen Grove. Drawing attention to clauses 1 and 2 of the Agreement recited above, Mr Knight submitted that the Judge was in error in concluding that the Agreement was silent as to what was to happen in respect of joint
property. 12 He further submitted that by enacting s 7A it must be taken that Parliament intended that agreements entered into in other jurisdictions should be given effect at law absent any clear evidence to the contrary, citing a dictum of Heath J in Bergner v Nelis.
[23] Ms Hunter submitted that the Family Court was right to conclude that the Agreement ought not to apply in New Zealand because it did not meet the test in s 7A(2)(a) in that the Agreement entered into did not coincide with the start of the parties’ relationship. Relationship property remained therefore for division in accordance with the Act. In response to Mr Knight’s submission based on the clauses in the Agreement she submitted that those clauses did not indicate how legally owned joint property should be dealt with in New Zealand, noting what she submitted was a fundamental difference in that in South Africa the parties had had separate accounts whereas in New Zealand the parties had two joint accounts. She submitted that the obiter dictum in Bergner v Nelis was considered but properly put to one side by the Judge on the specific facts of the case.
[24] With reference to Bergner v Nelis while the comment was clearly an obiter dictum13 it is nevertheless a reasonably firm expression of view:
[27] It is, at least, seriously arguable that Parliament intended agreements entered into in another jurisdiction to be given effect, irrespective of the result of the application of the chosen law, unless (for example) the parties had insufficient connection to the chosen law to justify its use. If that were not so, there would be little point in the parties choosing the law of another jurisdiction to govern their property arrangements.
[25] Quite apart from the way in which the Judge responded to that obiter dictum,14 I consider that Heath J’s observation was directed to the contrary to justice and public policy overrides in s 7A(3). While that subsection appears to be relied upon by the Judge as one basis for his conclusion on the issue of the applicability of the Agreement, in my view that subsection does not come into play in the present
case because of the view I have formed that s 7A(2) has no application.
12 Family Court Judgment, above n 1, at [174].
13 It was part of a discussion headed “Matters Not in Issue on Appeal”.
14 Family Court Judgment, above n 1, at [41].
[26] There are two reasons why I consider that s 7A(2) does not apply so as to exclude the operation the Act. First I do not consider that the Agreement provides “that the property law of a country other than New Zealand is to apply to” any relationship property. In my view the Agreement specifically addresses the provisions of the South African matrimonial property legislation and in particular the Accrual System and the concept of “community of property” which applies in that jurisdiction. I do not consider that the Agreement contemplates immovable property in other jurisdictions. Indeed it is silent on the issue of the property law which is to apply to any such immovable property. I construe the Agreement as one which contracts out of the relevant South African matrimonial property legislation but does not explicitly state which country’s property laws are to apply to any relationship property acquired in other jurisdictions.
[27] The requirement of s 7A(2)(a) is that any agreement must have been made “before or at the time their marriage ... or de facto relationship began”. The Agreement was entered into on 6 February 1999, that is shortly before the parties’ marriage in South Africa on 7 March 1999. However the parties entered into a de facto relationship substantially earlier in 1997. My second reason for concluding that s 7A(2) does not apply is because I agree with Ms Hunter’s submission that the section contemplates that any such agreement will have been entered into or coincide with the commencement of the parties’ relationship.
[28] In my view that conclusion gains support from s 2B of the Act which provides:
For the purposes of this Act, if a marriage was immediately preceded by a de facto relationship between the husband (A) and the wife (B), the de facto relationship must be treated as if it were part of the marriage.
[29] If the de facto relationship is treated as if it were part of the marriage, then I consider that the point in time at which the relevant relationship commenced for the purposes of s 7A(2)(a) would be in 1997. That being a date prior to the date of the Agreement, I consider that s 7A does not apply in the present case. I note that there
is support for this interpretation of the legislation in the discussion in Relationship
Property in New Zealand under the heading “Cohabitation preceding marriage”.15
Was there a section 44 disposition?
[30] Section 44(1) provides:
(1) Where the High Court or a District Court or a Family Court is satisfied that any disposition of property has been made, whether for value or not, by or on behalf of or by direction of or in the interests of any person in order to defeat the claim or rights of any person (party B) under this Act, the Court may make any order under subsection (2).
[31] The events relevant to the disposition and the subsequent property transactions are conveniently recited in two paragraphs in the judgment:
[11] ...
On 27 June 2000 the husband and the wife signed an agreement to buy 6 Careen Grove Gulf Harbour for $350,000. The agreement included a handwritten addition of the word “or nominee” as purchaser.
On 31 July 2000 the purchase of 6 Careen Grove was settled in the husband’s sole name only (the wife says unbeknown to her). There is a disagreement as to how this purchase was funded.
On 8 August 2000 the Herbst family company (“the company”) was incorporated followed by the Herbst Family Trust (“the Trust”) being settled on the next day.
On 7 September 2000 6 Careen Grove was transferred to the
Trust. It was sold on 7 August 2002 and replaced on 5 October
2002 by 5 Vinewood Drive.
On 17 August 2003 Hogarth Rise was purchased to replace
5 Vinewood Drive which was sold on 5 October 2003.
On 6 August 2004 Auld Street was purchased to replace
Hogarth Rise which was sold and settled on 2 December 2004.
On 17 October 2004 ASB mortgage documents were signed to provide bridging finance for the purchase of Auld Street.
...
15 Bill Atkin and Wendy Parker Relationship Property in New Zealand (2nd ed., LexisNexis, Wellington, 2009) at [8.5.6].
[124] In respect of Careen Grove there is the following documentary trail:
(i) The purchase price was $350,000 with a deposit of $34,500 and settlement on 26 July 2000;
(ii) 3 ASB bank cheques were deposited in Sarel Herbst Junior’s
trust account with Chamberlains on 24 July 2000 for $36,000,
$77,023.51 and $203,430.56;
(iii) The $203,430.56 came from the ASB Holding account which
was in both the husband and wife’s names;
(iv) $140,000 of the money deposited into Mr S Herbst Junior’s trust account was transferred to Phillip Herbst’s trust account;
(v) $140,000 each was transferred each from the accounts of the sons to the Careen Grove purchase account;
(vi) The respondent also contributed $36,454.07 to the purchase, plus the deposit of $34,000 which equates roughly to the
$70,000 that he is documented as advancing to the Trust for the purchase of the Careen Grove property and which has
subsequently been forgiven – except perhaps for $1,000.
[32] So far as the amendment to insert the nomination clause in the Careen Grove agreement is concerned, it appears that the impetus for this was advice given by Phillip Herbst, one of the first appellants, to his father.16
[33] The husband was one of the original directors of the Herbst Family Company
Ltd (“HFCL”). HFCL became the trustee of the Herbst Family Trust (“the Trust”).
[34] The arguments on appeal primarily addressed the following issues so far as the asserted s 44 disposition was concerned:
(a) What constituted the disposition?
(b) Was the disposition made in order to defeat the wife’s claim?
(c) The position of the Trust in relation to the disposition. (d) Tracing funds through various purchases.
I address each of those matters in turn.
16 Family Court Judgment, above n 1, at [162] and see also [85], [137]-[138].
What constituted the disposition?
[35] The points on appeal were formulated on the basis that the disposition as found by Judge McHardy was a disposition to the Trust.17 Certainly that is the way in which the judgment is framed.18
[36] However an argument was mounted for the appellants to the effect, as I understood it, that there was ambiguity in the judgment in that the judgment considered as potential dispositions both the amendment of the agreement for sale and purchase by the parties to include the words “and nominee” and the funds used to purchase the property. The criticism was made that the judgment does not make clear which of these acts was the disposition to which s 44 applied, namely whether it was the nomination of the Trust as purchaser or the advance of funds to the Trust for the purchase.
[37] The argument was developed to the effect that if the alleged disposition was the nomination of the Trust, then both the husband and the wife signed the amendment to the agreement for sale and purchase in the knowledge that the Trust was to become the ultimate purchaser of the property. Therefore the disposition was made with the consent of and by both parties and not just the husband. It was then submitted that, as the amendment to the agreement to allow the Trust to be nominated as the purchaser was done with the consent of both parties, then the alleged disposition asserted to be in breach of s 44 must be the advance of funds to the Trust for the purchase of the property.
[38] However it was then contended that the source of the funds to purchase the property was from the husband’s separate property or from the sons’ property and that, although those funds were temporarily held in a bank account that became a jointly-held bank account, that fact did not change their separate property character.
[39] The wife’s response was that the appellants had made a quantum leap from
the jointly signed agreement for the purchase of Careen Grove to the transfer to the
Trust, a leap that ignored the intervening steps. It was submitted that there must
17 For example points on appeal 2, 4 and 7.
18 Family Court Judgment, above n 1, at [156] and [169].
have been an actual nomination of the agreement for sale and purchase from the joint name of the parties who signed the original agreement for sale and purchase dated
27 June 2000 to the husband’s sole name. Attention was drawn to the certificate of title 96B/9 (North Auckland Registry) which recorded a transfer from the Johnsons to the husband (the date of registration being 31 July 2000) and a subsequent transfer from the husband to HFCL (the date of registration being 7 September 2000).
[40] While Ms Hunter submitted that there were several potential candidates as a qualifying disposition, I consider that the disposition was the transfer of the property from the husband to HFCL as trustee of the Trust.
[41] I do not consider that the Judge made any error in supposedly failing to identify that transfer as the relevant disposition. On the contrary, I consider that his references to the disposition to the Trust were, and were intended to be, references to the transfer by the husband to the Trust. In that regard I note that in the detailed discussion which preceded the inevitably more succinct statements of conclusion, the Judge had recognised the fact of the transfer from the husband to the Trust.19
[42] So far as concerns the submission that the source of funds used to purchase the Careen Grove property were sources from the husband’s separate property or the sons’ property, on this issue as well I accept the submission for the wife that the funds that were used to purchase the property were relationship property funds. It was submitted firstly that there were intermingled funds of both parties and secondly they were received from an ASB account that was in the joint names of the husband and wife. Whereas the original ASB Flexisaver account had been in the husband’s sole name, he then converted it into a joint account and opened a joint cheque account alongside that. Consequently the wife’s submission (which I accept) was that in New Zealand the funds placed in those accounts became relationship property as being jointly acquired property for the common use or benefit of both the husband
and the wife.
19 At [157] and [163].
Was the disposition made in order to defeat the wife’s claim?
[43] The Judge’s ultimate finding on this issue is reflected in [169]:
[169] The evidence is compelling that what then took place was designed to ensure that the wife was cut out of any possible interest in that property. There was a disposition that occurred that she was misled about. The disposition to the Trust was for the purposes of ensuring that she was deprived of any possible claim.
[44] In the course of reciting the parties’ submissions the Judge referred to the decision of the Supreme Court in Regal Castings Ltd v Lightbody noting that the question of intention to defraud (or defeat) must be determined at the time of alienation but that intended prejudice may be to future claimants.20 It was noted that as recorded in Regal Castings the question of intent to defraud is one of fact and the Court is concerned with practical risk.21 His Honour went on to note not only the implications of Regal Castings for the Court of Appeal decision in Coles v Coles22 but also the judgment of French J in Ryan v Unkovich.23 Her Honour there accepted that the principles enunciated in Regal Castings were sufficiently general to apply to s 44 and that knowledge of a consequence could be equated with an intention to
bring it about.
[45] Mr Knight submitted that upon analysis of all the evidence adduced it was difficult to infer how the husband could have had an intention to defeat the wife’s interests. The factors to which reference was made included that:
(a) The wife could not have had any interest in funds that belonged to the sons;
(b)Even if the Agreement did not apply in New Zealand, its existence was relevant evidentially;
20 Regal Castings Ltd v Lightbody [2008] NZSC 87, [2009] 2 NZLR 433 (SC).
21 Family Court Judgment, above n 1, at [56].
22 Coles v Coles (1987) 4 NZFLR 621 (CA).
23 Ryan v Unkovich [2010] 1 NZLR 434 (HC) at [33].
(c) Contrary to what I have concluded above, funds deposited in the parties’ joint bank account could be properly identified as separate property;
(d)The husband could not have had any intent to defeat the wife’s interests when he did not believe (on reasonable grounds) that she had an interest in the Careen Grove property.
[46] For the wife it was submitted that there was ample evidence upon which the Judge could rely for the finding that the structures were intended to defeat the wife’s interests. The points made echoed the passage in the judgment at [91]:
[91] ... The question is posed: how the property initially came to be registered in the husband’s sole name without the involvement of the wife or any legal advice to her is both a mystery and a serious concern. The point is made that the fact that it then ended up in the Trust to the wife’s exclusion, again without any legal advice when at the time the parties were living in the property as their family home, completes the defeating of her interest in circumstances that clearly satisfy s 44, quite apart from any improper conduct of all those involved.
[47] Ms Hunter also reminded me that it is well settled law that where the court appealed from has had the advantage of hearing and seeing the witnesses, an appellate court will not lightly depart from findings made on that basis.24
[48] There are several parts of the judgment where Judge McHardy made credibility findings which are material to his conclusions and which I consider that it would be inappropriate for me to disturb. So far as the events surrounding the Careen Grove purchase are concerned I note, in particular, the following paragraphs:
[104] The husband’s memory does not extend to providing to this Court a comprehensive explanation as to what occurred at that time. He said in his initial affidavit that in reality his sons dealt with most of the necessary legal documents. The wife’s position is that she did not know why certain steps were taken in relation to the Trust and in relation to the Trust ultimately owning the Careen Grove property.
[105] Both the husband’s sons provided evidence to the Court. Sarel Herbst Junior provided affidavit evidence and was cross-examined on that evidence. Somewhat surprisingly given his apparent involvement in the various transactions, Phillip Herbst did not provide an affidavit but was
24 Austin, Nichols & Co Inc v Stichting Lodestar above n 9.
called during the hearing providing a brief of evidence and was available for cross-examination.
[106] With due respect the evidence of both the sons tended to confuse the picture even more. It certainly did not clarify the position. It did establish the rather generalised evidence provided by the husband was not correct. ...
[49] The Judge’s overall conclusion on credibility is at [171] which immediately precedes his conclusion at [172] that there was certainly a disposition within the definition of s 44:
[171] I prefer the wife’s evidence in relation to the disputed facts. The husband was simply not able to credibly explain away the evidence that was before the Court. His evidence was shown to be some cases to be clearly wrong, i.e. his assertions in respect of closed corporation ownership and his claims as to where the money was transferred by him to New Zealand came from. This cast significant doubt on the reliability on the whole of his evidence. His sons’ evidence only served to confirm that unreliability.
[50] Mr Knight was also critical of the Judge in supposedly giving greater weight to and focus on events subsequent to the purchase of Careen Grove whereas he said that the circumstances that existed at the time of purchase were or should have been the primary focus in determining the core elements of s 44. However I consider that Ms Hunter’s submission is correct that there is no barrier to the Court taking into account subsequent conduct of the parties as material to the determination of the intention at the time of the disposition.
[51] A number of relevant examples are noted in the judgment: for example the fact that the wife was requested to sign further sale and purchase agreements; the fact that the husband ought to have known that to express the vendor on the Careen Grove sale agreement as “Herbst Sarel and Antoinette Herbst Family Trust” 25 was incorrect; the continuation of that pattern with the Vinewood sale and purchase agreement referring to the vendor as “Herbst Family Trust (Sarel and Antoinette)” and similarly with the Hogarth sale and purchase agreement.26 It appears that the wife was also misled into signing guarantees and assuming personal liability for bridging finance for Auld Street on the misunderstanding that she was to be a
director of the trustee company.27
25 Family Court Judgment, above n 1, at [141].
26 At [142].
27 At [67] and [132].
[52] This material was noted in the observation at [177] immediately prior to the s 44 disposition finding at [178]:
[177] The wife was not party to any discussions as to why a Trust should own Careen Grove. I do not accept on the evidence before the Court that she had any understanding of what the husband put in place and that the continuation of her name appearing on the agreements of sale and purchase confirms this. More particularly, the steps she took in relation to the bridging finance when Auld Street was being purchased amply demonstrate that she was blissfully unaware of the legal niceties. She approached the bank thinking that she was a co-owner, the bank proceeded on that basis; the documentation confirms this. The fact that she was not disabused of her obvious believe (sic) that she was a co-owner at this time demonstrates that she was being hoodwinked by the husband carrying on the lie that had been created by the initial disposition to the Trust.
The position of the Trust in relation to the disposition
[53] For the husband it was submitted that before an order could be made under s 44 the Court needs to be satisfied that the recipient of the property received it other than in good faith and for adequate consideration. The judgment was attacked on the basis that the Family Court had erred in failing to consider the Trust’s position in relation to the alleged disposition, it being contended that the Judge appeared to have imputed both the husband and the trustees with bad faith.
[54] Mr Knight submitted that there was no evidence before the Family Court to suggest that the Trust received Careen Grove otherwise than in good faith and for valuable consideration. He said that there is no analysis by the Judge as to the consideration provided by the Trust, it being in the form of acknowledgments of debt in favour of both the sons and the husband.
[55] Such criticisms need to be seen in the light of the evidence which the husband placed before the Court. Mr Chamberlain, a solicitor and director of HFCL, had made an affidavit deposing as to his understanding of the purposes of the Trust and as to his being unaware of any attempt to defeat the wife’s interest in the
property. As the Judge noted28 it was demonstrated during cross-examination that
there were matters of which Mr Chamberlain had no knowledge and he conceded
28 At [102].
that the statements recorded in his affidavit were based on things that he had been told.
[56] Then in a paragraph prior to those dealing with credibility29 the judgment records that although Mr Chamberlain had made a thorough search of his firm’s records there had been no sign of two crucial files, one being for the creation of the Trust and the other being the file for the Trust’s purchase of the Careen Grove property. The Judge noted that it was indeed unfortunate those files were not able to be located given that they would have unlocked for the Court a good deal of information as to what actually took place at the time.
[57] I consider that the husband’s submission on appeal as to the absence of evidence before the Family Court needs to be seen in the context of the paucity of evidence which the husband in fact was able to place before the Court.
[58] In response the wife pointed out that at the time of the disposition of the Careen Grove property to the Trust the husband was a director of HFCL which was the trustee of the Trust. It was submitted that under ordinary principles of law he would, as director, have been a “directing mind” and consequently his knowledge as agent was to be imputed to the company principal. It was further submitted that, having found that the husband’s motives were other than in good faith, the Court did not need to go further and separately consider the situation of HFCL: the requisite intention could be, and by implication was, inferred from the fact of the knowledge and intention of the husband.
[59] I agree with that analysis. While it is not set out in the judgment explicitly in that way, I consider that it is implicit in the Judge’s reasoning and I find no error in the judgment on this issue.
Tracing funds through various purchases
[60] As the first extract from the judgment at [31] above records there was a sequence of sales and purchases of replacement properties culminating in the
29 At [104] to [106], quoted at [48] of this judgment.
ownership of the property at Auld Street the subject of the proceedings. The Judge concluded that the wife was entitled to one half of the value of the Auld Street property and directed the trustee of the Trust to take all necessary steps required to sell Auld Street so that the wife could be paid her entitlement.
[61] For the husband it was submitted that the effect of the orders was to trace the funds that were disposed of to the Trust through the various purchases and sales of homes starting with the Careen Grove property and ending with the Auld Street property. However it was argued that, while property can be traced to third parties pursuant to s 44, it cannot be traced into a new form. Accordingly it was submitted that it was not within the Court’s jurisdiction to make the orders in relation to the
Auld Street property. Reliance was placed upon TCM v JET.30
[62] In that case an order had been made setting aside a disposition by a person who was bankrupt. An application was made for relief pursuant to s 44(2) seeking a transfer of certain residential properties to the Official Assignee.
[63] In support of the application reliance was placed on dicta of the Court of Appeal in Walker v Walker,31 particularly the following statements by Cooke J and Sir Thaddeus McCarthy respectively:
If by the date of the hearing some of the property is traceable into another form of property within the jurisdiction of the Court under the Act, any order will naturally be made in relation to the property in its new form. But this should not prevent the Court from using the machinery provisions to make proper compensation to one spouse for post-separation acts of the other which, if not compensated for, would in effect alter the sharing intended by Parliament.32
...
I do not read s 25 as merely giving a choice of means by which the Court can achieve a division arrived at, as at the hearing date, in strict compliance with specific sections. It is much wider than that. It is designed to enable the Court to do justice which conforms to the objectives revealed by the Act as a whole. But I also believe that it is a power to be used with restraint, not extravagantly, and bearing in mind the important objective of equal sharing as at the end of the marriage partnership.33
30 TCM v JET [2012] NZFC 7463.
31 Walker v Walker [1983] NZLR 560 (CA).
32 At 568.
33 At 574.
[64] The Family Court Judge in TCM v JET did not consider that Walker v Walker provided authority for the course sought in that particular case, namely in order to undertake a tracing exercise in respect of property which had vested in a third party.
[65] However, having stated that Walker v Walker was distinguishable from the factual matrix before him, the Judge made more general statements about the availability of the remedy of tracing in the context of relationship property, which statements are relied upon by the husband in the present case. Among the authorities referred to by the Judge was a judgment of Wild J in Fraser v Buxton.34 In the decision declining leave for a further appeal to the Court of Appeal his Honour said:
[15] To summarise, I am unpersuaded that a tracing exercise is appropriate at all. Even if it is, authority suggests that equitable tracing principles have more application to relationship property. Even if they do, their application here does not produce the result contended for by Mr Corkill.
[66] A further High Court authority cited by the Family Court Judge was KMH v CLH35 which concerned an appeal against a decision of a Family Court Judge declining an application to transfer the proceedings to the High Court. In allowing the appeal and directing that the proceedings be transferred to the High Court Fogarty J noted that it was more probable than not that the disputes between the parties there would include applications for relief in equity in respect of assets exceeding $200,000 and said:
[48] ... Those applications in equity to the High Court will probably be broader than the limited remedies available by way of ss 44 and 44C of the Act. For example, neither of those provisions presume to give the District Court the full powers of tracing and removal of trustees held by Judges with inherent jurisdiction (being the Judges of the High Court, Court of Appeal and Supreme Court). Second, they do not give to the Family Court the statutory powers of the High Court Judges under the Trustee Act 1956.
[67] The Judge’s conclusion in TCM v JET on this issue was as follows:
[43] Furthermore, on the wording of s 44(2)(c), the Court may trace “the property” to “any person”. This suggests that the property which was disposed of may be traced to a third party, however it may not extend to trace the property into a new form. This could be what the High Court was referring to in KMH v CLH when it observed that ss 44 and 44C did not
34 Fraser v Buxton HC Wellington, CIV-2008-485-1101, 24 February 2009.
35 KMH v CLH [2012] NZHC 537, [2012] NZFLR 688.
presume to give the District Court the full powers of tracing of the High
Court. Although the ability to trace into a new form could be seen as an
‘ancillary remedy’, taking into account the High Court’s comments in Fraser v Buxton that tracing principles are not applicable to relationship property, it may not be appropriate to apply the s 41 District Courts Act power in this case.
[44] In conclusion, it can be interpreted from the decisions considering the equitable jurisdiction of the Family Court, that the jurisdiction is limited when it comes to the Family Court, and particularly relationship property matters. It seems, from the wording of s 44(2)(c), that the property can be traced to third parties, but that it cannot be traced into a new form. Accordingly, I decline to make an order vesting the O Street and R Place properties in the Official Assignee.
[68] In the present case a disposition of the Careen Grove property was made by the husband to the Trust in contravention of s 44. That property was utilised as the family home. Over time that property was replaced by other properties as recited in the judgment at [11],36 all of which were used as the family home. I find it a very surprising proposition that the Family Court would have the jurisdiction to make the orders which are sought if the Careen Grove property was still the family home but that any jurisdiction which the Family Court has to make such an order is lost once the family home was sold by the Trust and replaced with another family home.
[69] In my view the Family Court did have the jurisdiction to make the orders which were made in relation to the Auld Street property. I consider that the authority to make those orders derives from the powers in s 44(2)(b) in conjunction with the power in s 44(3) whereby the Court may make such further order as it thinks fit for the purposes of giving effect to any order under subsection (2). In that regard I consider that the reference to “property” in s 44(2) should be given a broad interpretation so as to embrace the family home whether it be the first house that is purchased or any subsequent replacement house.
[70] I do not consider that it is necessary to resort to a fine analysis of the jurisdiction of the District Court in equity and in particular with reference to the equitable remedy of tracing. In my opinion in the context of the issues which this case confronts the dicta recited above in Walker v Walker are applicable, albeit they
were concerned with the provisions of the Matrimonial Property Act 1976.
36 At [31] of this judgment.
[71] Finally on this issue I note the further submission of Ms Hunter that in respect of each subsequently acquired property relationship property was applied by the wife under the false belief, induced by the appellants, that she had an interest in the Trust that was for her benefit. Accordingly it was submitted that each such event would give rise to a separate claim pursuant to s 44. That argument may indeed be open on the particular facts of this case. In that regard I refer to passages in the judgment which note the fact that the wife was requested to sign the documentation disposing of Careen Grove and in turn requested to sign documentation relating to the acquisition and disposal of the replacement properties.
[72] However, having regard to the significance of the issue for this and other cases, I prefer to, and do, base my decision on the conclusion that the Family Court had jurisdiction to make the order in relation to the Auld Street property irrespective of the particular circumstances which may have occurred in the present case concerning the completion of the documentation pertaining to each subsequent purchase.
The status of the sons’ mortgage
[73] The parties separated on or about 20 October 2011. On 11 November 2011 the wife registered against the title to Auld Street, NA118C/192, a notice of claim of interest pursuant to s 42(2) of the Act. On 21 December 2011 a mortgage was registered against the title in favour of the first appellants.
[74] With reference to that mortgage the Judge’s finding was:
[178] ... The creation of the mortgage raised by the sons at the time of separation is simply a sham as there was in fact no such monies owing to them by their father.
[75] The documentary support for the mortgage was a document entitled “Deed Recording Loan Advance & Mortgage Terms” dated 13 December 2011 between the sons as lenders and HFCL (as trustee of the Trust) as borrower. In the recitals to the deed it was stated that the lenders had each advanced the borrower $140,000 in July
2007, that the total amount of the loan was used by the borrower to purchase the
Careen Grove property, that a mortgage of Careen Grove was never granted, that
Careen Grove was subsequently sold and the borrower was now the owner of Auld Street, that the lenders had made written demand of the borrower for repayment and in lieu of payment the borrower had offered the lenders a mortgage of Auld Street as security for the loan.
[76] In support of her assertion that the indebtedness was of the sons to the father the wife referred to both documentary evidence and evidence adduced from Marina Herbst, the former wife of Phillip Herbst, who gave evidence of the fact that it was the younger generation which owed money to the older generation and not the other way around.37 The wife’s argument was recorded in the judgment in this way:
[69] As to sham, the submission is made that the mortgage registered over the title on behalf of the sons is clearly fraudulent. The deed of acknowledgment of debt tendered as supporting the debt in fact shows the sons owing the father the money – not the other way around. The calculation tendered by the wife as Exhibit D, the solicitor’s trust account ledger, and the payment of interest in the sum of initially $700 per month together with the clear evidence of Marina Herbst (referred to below) supports the wife’s position that the boys owed their father money and that debt was the source of part of the purchase price for Careen Grove.
[77] The basis for the Judge’s conclusion that the mortgage was a sham was his conclusion that, rather than the father being indebted to the sons, in fact the sons were indebted to the father.
[78] The primary paragraphs which led to the Judge’s conclusion are:
[154] The confusion as to who had lent what to whom was highlighted by the cross-examination of Peter Chamberlain as to the document he had exhibited as Exhibit B to his affidavit of 18 January 2012. There was exhibited a document entitled “Deed recording loan advance and mortgage terms” dated 13 December 2011 which Mr Chamberlain said was a deed entered into by the company and its two creditors in relation to the demand that the company had received. That document referred to annexure A which was supposedly a deed of acknowledgement of debt dated 24 July 2000 recording the purported loan. However Mr Chamberlain had to concede that that annexed deed was actually acknowledging a debt between Sarel Junior and Sarel Senior and was in respect of a supposed debt or lending done in December 1996. Mr Chamberlain had to accept that document did not support the proposition that it was proof of funds lent by the son to the trustee company.
37 Family Court Judgment, above n 1, at [90].
[155] This simply highlights the difficulties for the husband in endeavouring to maintain that there were bona fide loans occurring from his sons to him. This is particularly the case given the evidence that was provided in affidavit form by Marina Herbst to the effect that at no stage did they lend money to the husband. On the contrary she said they owed him money as was confirmed in the property division agreement between her and Phillip which was annexed to her affidavit.
[79] Marina Herbst’s evidence was supported by the fact that in the Separation and Relationship Property Agreement between her and Phillip Herbst there was a specific provision referring to the fact of “a relationship debt owning to Phillip’s father” for which Phillip was to be solely liable.
[80] There was ample evidence upon which the Judge could conclude that the creation of the mortgage raised by the sons at the time of separation was a sham on the basis that there was no indebtedness to them. I consider that the Judge’s factual conclusion on this issue was correct.
[81] However Mr Knight submitted that the Family Court had no jurisdiction under s 44 to declare a mortgage a sham, citing Smith v Smith.38 Although that proposition does not appear to be expressly stated in that case, I accept that the Court’s s 44 powers are as stated in s 44(2) and (3). In Smith v Smith the mortgage itself was the disposition under consideration.
[82] Nevertheless in considering the circumstances of any particular case the Family Court is not obliged to treat a transaction at face value if it is manifest that the transaction satisfies the test of amounting to a sham. The relevant principles were summarised by Richardson J in NZI Bank Ltd v Euro-National Corporation
Ltd:39
The legal principles are well settled. First the true nature of a transaction can only be ascertained by careful consideration of the legal arrangements actually entered into and carried out. It is not to be determined by an assessment of the broad substance of the transaction measured by the overall economic consequences to the participants. The forms adopted cannot be dismissed as mere machinery for effecting other purposes. At common law there is no half-way house between sham and characterisation of the transaction according to the true nature of the legal arrangements actually entered into and carried out. A document may be brushed aside if and to the
38 Smith v Smith (1988) 4 NZFLR 569 (DC).
39 NZI Bank Ltd v Euro-National Corporation Ltd [1992] 3 NZLR 528 (CA) at 539.
extent that it is a sham in two situations. The first is where the document does not reflect the true agreement between the parties in which case the cloak is removed and recognition is given to their common intentions. The second is where the document was bona fide in inception but the parties have departed from their initial agreement while leaving the original documentation to stand unaltered. Once it is established that a transaction is not a sham its legal effect will be respected.
(emphasis added)
[83] The Judge concluded on the basis of the evidence that the deed did not reflect the true agreement between the sons and their father. Indeed he concluded that it was the sons who were indebted to the father. However having reached that conclusion the Judge did not purport to set aside the mortgage or make any other order with reference to the title to the property. In that respect Mr Knight’s submission that the Judge gave no consideration to the indefeasibility processes of the Land Transfer Act 1952 is with respect misconceived.
[84] As Ms Hunter correctly submitted:
3.5The indefeasibility provisions of the Land Transfer Act 1952 are irrelevant. The Court made the proper orders in terms of the division of property, namely that no allowance ought to be made for the sham mortgage in calculating the sum due to the wife, the Court did not order the removal of the entry on the title, to which the indefeasibility provisions would be relevant.
Other matters
[85] The final point on appeal concerned a complaint that there had been unfairness in the way in which the wife had been allowed to refer in the course of her oral evidence to documentation which had not been discovered. M v B40 was cited for the proposition that in relationship property cases all parties must provide to the other as soon as possible all documents in their possession or control which are relevant to determining the issues before the Court. As earlier noted this is a dispute where there had been difficulties in gaining access to all the relevant material.41
However Mr Knight indicated that the appellants did not seek to place great weight on the issue but wished to emphasise that the Judge should have been more
cognisant of the difficulties in engaging with the husband’s evidence before drawing
40 M v B, above n 3.
41 At [56].
the conclusions at [94] of the judgment. I do not consider that those matters bear on the outcome of this appeal.
[86] Two aspects of Judge McHardy’s supplementary decision were challenged.42
So far as the first matter is concerned, I consider that the Judge decided that the
$40,000 payment by the wife to her daughter was a gift.43 However the Judge went on to address the alternative proposition, namely that the payment was a loan, simply making the point that if, contrary to his perception of the parties’ intentions, one or other of them wished to take the position that the payment was not a gift, then it was open to that person to seek repayment of that person’s share. I do not see any basis for complaint in that analysis.
[87] The second issue concerned the ruling that the adjustment by way of a credit to the husband should be made by offset rather than payment. I do not consider that there was any error in the Judge’s approach in accepting the argument made for the wife that an offset rather than a payment by the wife was the appropriate direction in the circumstances.
Disposition
[88] On certain aspects of the judgment my reasoning is different from that of the Family Court Judge. However I am in agreement with the conclusions which the Judge reached and I find no error in his ultimate determination. Consequently the appeal is dismissed.
[89] The wife is entitled to costs. Any memorandum as to costs by the wife is to be filed by Friday 24 January 2014. Any memorandum in response is to be filed by
Friday 7 February 2014.
Brown J
42 See [6] of this judgment.
43 Supplementary judgment, above n 4, at [8].
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