Hohaia v Caldwell

[2019] NZHC 102

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

I TE KŌTI MATUA O AOTEAROA

TE ROTORUA-NUI-A-KAHUMATAMOMOE ROHE

CIV-2018-463-000072

[2019] NZHC 102

BETWEEN

KAREN MICHELLE HOHAIA

Appellant

AND

JASON PETER CALDWELL

Respondent

Hearing:	6 December 2018
Counsel:	T Mounsey for appellant J Daniels for respondent
Judgment:	7 February 2019

JUDGMENT OF KATZ J

This judgment was delivered by me on 7 February 2019 at 2.00 pm Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

Solicitors:           Malcolm Mounsey Clarke, Taupō

Daniell Associates, Taupō

HOHAIA v CALDWELL [2019] NZHC 102 [7 February 2019]

Introduction

[1]    Karen Hohaia and Jason Caldwell were in a de facto relationship for nearly 15 years, before  separating  in  September  2009.  They  subsequently  resumed  their relationship for a further three years or so,1 before finally separating in November 2014. They have one child together, who is aged 21.

[2]    During the period prior to and during the first separation, Ms Hohaia was employed in an administrative role at Tūrangi Glass and Glazing (2004)  Ltd  (“Glass Ltd”), a company  that  Mr  Caldwell  is  a  shareholder  and  director  of.  Ms Hohaia remained employed by Glass Ltd following the parties’ second (formal) separation in November 2014. In November 2015, however, she resigned to take up employment with another company in Tūrangi. She later resigned from that position to work at a café.

[3]    In November 2016, Ms Hohaia returned to work for Glass Ltd, four days a week. She resigned from that position on 3 October 2017. The circumstances surrounding her resignation are disputed, but were resolved through employment dispute resolution procedures. Whatever the precise reasons, it is clear the employment relationship between Ms Hohaia and Mr Caldwell had completely broken down by early October 2017. Their formerly amicable relationship had become bitter and acrimonious.

[4]    Three weeks after Ms Hohaia left her job at Glass Ltd (and almost three years after the parties’ final separation) she filed an application for a maintenance order under the Family Proceedings Act 1980 (“the Act”). She also sought an interim maintenance order.2

[5]    Judge J F Munro dismissed Ms Hohaia’s application for interim maintenance.3 Ms Hohaia now appeals that decision.

1      There is a dispute about precisely when the relationship resumed.

2      Family Proceedings Act 1980, s 82.

3      Hohaia v Caldwell [2018] NZFC 2749.

Approach on appeal

[6]    Determination of an interim maintenance application under s 82 of the Act involves the exercise of an unfettered discretion, as the Act does not specify any particular criteria against which such applications are to be assessed.4 However, even an unfettered discretion may still be subject to review on appeal.5 To succeed on appeal, Ms Hohaia, must show that the Judge acted on a wrong principle, failed to take into account a relevant matter or took into account an irrelevant matter, or was plainly wrong.6

Interim maintenance orders

[7]    An interim maintenance order is a short-term order (no more than six months)7 aimed at meeting the reasonable needs of an applicant who may otherwise have inadequate means to meet their current needs pending determination of the substantive proceeding.8 As Mander J observed in Cooper v Pinney:9

…A person is expected to assume responsibility for meeting their own needs within a period which is considered reasonable in the circumstances following dissolution of a marriage or civil union, or the ending of a de facto relationship. However, where, as a result of the end of a relationship, the resulting circumstances render one party financially vulnerable in terms of being able to meet their reasonable needs, the Act provides a comprehensive statutory scheme for maintenance. Its broad purpose is to assist in meeting the reasonable needs of a party who cannot practicably provide for those needs in a way that is just to both parties.…

[8]    The discretion to award interim maintenance is to be exercised on the basis of what the Judge thinks is a reasonable contribution towards the future maintenance of a spouse or partner, until the final determination of the proceeding or until the order ceases to be in force. The making of the order depends on all the circumstances of the particular case, and the Court must do what it considers just.10 No relevant

4      Ropiha v Ropiha [1979] 2 NZLR 245 (CA) at 247; and Norcross v Norcross [2015] NZHC 896 at [22].

5      Collins v Collins [2014] NZHC 2121 at [9]; and Norcross v Norcross [2015] NZHC 896 at [24].

6      May v May (1982) 1 NZFLR 165 (CA) at 169–170;  and Owen  v Thomas  [2014] NZHC 2200 at [43].

7      Family Proceedings Act 1980, s 82(4).

8      Ropiha v Ropiha [1979] 2 NZLR 245 (CA); and Collins v Collins [2014] NZHC 2121 at [10]-[11].

9      Cooper v Pinney [2016] NZHC 1633 at [32].

10 At [20]. See also, Ropiha v Ropiha [1979] 2 NZLR 245 at 247.

considerations are stipulated and there are no mandatory considerations for a Judge to take into account, so long as the discretion is exercised reasonably.11

[9]    The Court is not required to apply the principles which govern the making of permanent maintenance orders, but those principles may be taken into account, if appropriate in a given case. Here, as the parties’ de facto relationship has ended, s 64 (which is subject to s 64A) sets out the general principles that would govern the making of a final maintenance order. Specifically, on such an application one party is liable to maintain the other to the extent necessary to meet that party’s reasonable needs if, and only if, the other party cannot practicably meet all or part of his or her reasonable needs and such inability is a result of the effect(s) of one or more of the following:

(a)the ability of partners to become self-supporting, having regard to:

(i)the effects of the division of functions within the relationship while the partners lived together;

(ii)the likely earning capacity of each spouse, civil union partner, or de facto partner;

(iii)any other relevant circumstances:

(b)the responsibilities of each partner for the ongoing daily care of any minor or dependent children of the relationship;

(c)the standard of living of the spouses, civil union partners, or de facto partners while they lived together;

(d)the undertaking by a partner of a reasonable period of education or training to reduce or eliminate their need for maintenance.

11     Owen v Thomas [2014] NZHC 2200 at [44].

[10]   Section 64 will be satisfied if one of the above circumstances is established as a real and substantial cause of the inability to meet needs.12

[11]   During the course of a marriage or civil union, s 63 provides that two other factors are also relevant to the obligation to maintain, namely an ongoing inability by a party to meet their needs because of:

(a)a physical or mental disability; or

(b)an inability to obtain reasonable and adequate work.

However, no liability to maintain on these bases (in terms of a final maintenance order) continues after the dissolution of the marriage or civil union.

[12]   At the Family Court hearing, Ms Hohaia relied on two of the s 64 factors in support of her interim maintenance claim, namely the impact of the division of functions within the relationship on her ability to become self-supporting, and her likely earning capacity. Given that s 84 confers an unfettered discretion, Ms Hohaia also argued that her inability to obtain reasonable and adequate work was relevant in the interim maintenance context (even if it would not be a relevant factor in the final maintenance order context).

[13]   The established approach to an application for an interim maintenance order is for the Court to first assess the applicant’s reasonable needs and then their own ability to meet those needs, before proceeding on to an assessment of what needs the respondent has and whether they can meet the applicant’s needs, if the applicant is unable to do so.13 The Court must then determine, in light of these various factors, whether it should exercise its discretion to order interim maintenance.

[14]Judge Munro followed the accepted approach.

12     S v S [1983] NZLR 166, (1983) 1 FRNZ 54 at 62.

13     See Collins v Collins [2014] NZHC 2121 at [13]. See also, Ropiha v Ropiha [1979] 2 NZLR 245 (CA) at 247.

The Judge’s assessment of Ms Hohaia’s reasonable needs

[15]   There is no challenge on appeal to the Judge’s assessment of Ms Hohaia’s reasonable needs, which I set out by way of background.

[16]Ms Hohaia’s income for the year to 24 October 2017 was approximately

$40,000. That income derived from salary or wages from the café and, subsequently, Glass Ltd. Ms Hohaia’s expenses for that period totalled approximately $46,000, which Judge Munro considered was modest.14 Ms Hohaia’s ongoing weekly expenses (her “reasonable needs”) were $686.50, and Judge Munro accepted those expenses were reasonable.

[17]   Since Ms Hohaia left her employment at Glass Ltd on 3 October 2017, she has relied on a Job Seekers benefit and casual lawn mowing work which pays $100 per week. Given that welfare payments are not relevant to an assessment of maintenance, Ms Hohaia sought interim maintenance payments of $567 per week, which together with the $100 of other income would constitute an amount sufficient to meet her reasonable needs.

Did the Judge err in the approach she took to assessing Ms Hohaia’s ability to meet her own reasonable needs?

[18]   Judge Munro found that Ms Hohaia had the ability and resources to generate sufficient income to meet her reasonable needs, and accordingly dismissed the application. Ms Hohaia challenges various aspects of the Judge’s analysis of this issue.

Did the Judge err in assessing the relevance of Ms Hohaia’s loss of employment at Glass Ltd?

[19]   As noted above, at the time of the parties’ final separation in November 2014, Ms Hohaia was employed at Glass Ltd. A year later, in November 2015, she resigned to take up employment with another company in Tūrangi. She later resigned from that position to take up employment in a café. In November 2016, Ms Hohaia returned to work for Glass Ltd. Her employment relationship with Mr Caldwell broke down,

14     Hohaia v Caldwell [2018] NZFC 2749 at [15].

however, and she resigned again on 3 October 2017. Unfortunately, on this occasion she says that she was unable to find suitable alternative work in Tūrangi.

[20]   Ms Hohaia’s evidence is that she left Glass Ltd because her work conditions had become intolerable. On her view, she was constructively dismissed. She clearly feels deeply aggrieved about the loss of her job at Glass Ltd, compounded by her subsequent inability to find work at a comparable level of remuneration and responsibility.

[21]   Against this background, Mr Mounsey submitted that the Judge wrongly found that the interim maintenance award was being sought by Ms Hohaia to further compensate her for her loss of employment in the family business. In particular, the Judge stated that:15

[30]   I find that [Ms Hohaia’s] loss of employment is not a matter relevant to the issues of interim maintenance. Whatever the rights and wrongs of the employment situation, it has been settled and Ms Hohaia has received some compensation. I do not consider that an award of interim maintenance can be used to further compensate Ms Hohaia for the employment situation…

[22]   Although not expressly stated, it is implicit in this passage that the Judge was concerned that Ms Hohaia’s motive for bringing the application, at least in part, may have been to obtain further “compensation” for her loss of employment at Glass Ltd. Based on the evidence before her, it was not unreasonable for the Judge to harbour such a concern. Further, the express comments made by the Judge are correct, on their face. She identified that the rights and wrongs of the employment dispute between Ms Hohaia and Mr Caldwell, which were traversed at some length in the evidence before the Court (presumably on the basis that one or both parties considered such matters to be relevant) were not relevant to determining issues of interim maintenance. That was a valid point to make. An award of interim maintenance cannot be used to further “compensate” Ms Hohaia for what she believes was her constructive dismissal from Glass Ltd. Employment issues were addressed through a separate dispute resolution process.

15     Hohaia v Caldwell [2018] NZFC 2749.

Did the Judge err in finding that the application was brought (at least in part) for extraneous reasons?

[23]   The Judge also identified two other reasons for the application being brought. In particular, she stated that:16

… The reason for the application being brought now is twofold. Firstly, the progress of the substantive relationship property proceedings has not progressed [at a pace] which Ms Hohaia expects. She blames Mr Caldwell for delays in progressing matters. Secondly, she has a sense of injustice that Mr Caldwell has control over and access to relationship property which she does not….

… Ms Hohaia is seeking access to her entitlement to relationship property to enable her to set up her business and get on with her life. If Ms Hohaia’s desire is [to] obtain a share of her entitlement to property for this purpose then it is surprising that there has been no application for an interim advance of that entitlement … She focuses significantly on her perceived injustice that Mr Caldwell can continue his lifestyle and grow his business when she is not able to access funds to do the same. The purpose of interim maintenance is not to remedy that perceived injustice….

[24]   Mr Mounsey submitted that the Judge was wrong to assume that the application was made because the substantive proceedings  had  not  progressed  and  because Ms Hohaia felt a sense of injustice that Mr Caldwell has control over and access to the relationship property which she does not.

[25]   Ms Hohaia referred in her affidavit to the fact that Mr Caldwell had been free to develop his career as a business owner, while she was only able to work part-time (and largely for the family business). She also noted that while she is unable to find work, Mr Caldwell “takes all the profit from the business as drawings”. Mr Mounsey’s submissions stated that Ms Hohaia seeks interim maintenance so that she can have a small amount of capital with which she could move to a larger centre for a job, form her own business or pursue a different course of employment — “none of those prospects are available to her as she has no access to her relationship property entitlement”.

[26]   Given this context, it was clearly open to the Judge to conclude that Ms Hohaia was at least in part motivated by a perceived sense of injustice, together with

16     Hohaia v Caldwell [2018] NZFC 2749 at [29]–[30].

frustration that she has not (yet) been able to access capital resources that she believes she is entitled to.

[27]   Section 82 of the Act does not limit what considerations the Judge may take into account. The possible existence of the “motives” referred to by the Judge do not preclude the making of an interim maintenance order if such an order was otherwise assessed as being necessary and appropriate. Nevertheless, these broader contextual factors may be relevant to the Court’s overall assessment, including its assessment of aspects of Ms Hohaia’s evidence. The Judge’s findings on this issue were open to her, and cannot be said to be irrelevant to the exercise of her discretion.

Did the Judge err in her assessment of the significance of the division of functions in the relationship

[28]   Judge Munro, when assessing Ms Hohaia’s ability to meet her own reasonable needs, responded to Ms Hohaia’s claim that her inability to support herself arose partially out of a division of functions within the relationship, the earning capacity of both parties and the standard of living they enjoyed while they lived together. The Judge stated that:17

[25]      The division of functions within the relationship will generally relate to a spouse assuming primary responsibility for care of children and running a household. I do not consider that this is a relevant consideration in this case. The parties separated in 2009. No claim for interim maintenance on this ground was made at that time as Ms Hohaia continued with her employment. She continued with her employment also after [the second and final] separation. This is not a case where the care of children or running a household has had any significant impact on Ms Hohaia’s ability to continue in employment.

[26]      Similarly, there is no evidence as to whether her ability to support herself is due to her earning capacity. The test is not whether she has a similar earning capacity to Mr Caldwell, the question is whether she has the earning capacity to support herself.…

[29]   Mr Mounsey submitted that the Judge erred by finding that the division of functions in the relationship was not a relevant factor in this case. He maintained that the division of functions directly impacted on the ability of Ms Hohaia to continue to acquire experience, skills and qualifications.

17     Hohaia v Caldwell [2018] NZFC 2749.

[30]   In my view, it was open to the Judge to find that the division of functions in the relationship was not a relevant consideration in the particular circumstances of this case. While Ms Hohaia was primarily responsible for running the household during the course of her relationship with Mr Caldwell, and in that regard was responsible for taking the children to and from school18 and household chores, she also worked in paid employment throughout the relationship. Before Glass Ltd was purchased, Ms Hohaia worked part-time at a school, working with special needs children. Once the business was purchased, she gave up her part-time job and worked for the business “doing whatever needed to be done”, including working as the receptionist, managing the accounts and working in the workshop. By the time the relationship ended, the children were adults and so she did not have continuing parental obligations that might have otherwise interfered with her obtaining full-time work.

[31]   Ms Hohaia continued working throughout the period of the relationship, after the first separation, and after the final separation. This suggests that her ability to obtain employment (including with employers other than Glass Ltd) was not significantly impacted by the fact of separation, which is why the Judge considered that the division of functions was not a particularly relevant factor.

[32]   There is nothing to suggest that the Judge erred in concluding that Ms Hohaia’s inability to find work following her resignation from Glass Ltd was not causally linked to the division of functions within the relationship.

Did the Judge err in her assessment of Ms Hohaia’s ability to find work?

[33]   Mr Mounsey submitted that the Judge erred in her assessment of Ms Hohaia’s ability to find work.

[34]   Ms Hohaia’s evidence was that she could not find work. Her evidence on the issue, however, was somewhat sparse. She deposed that it is difficult to obtain employment in Tūrangi:

…unless I want to go and flip burgers on minimum wage. I have registered with WINZ Job Seekers however nothing suitable has come up.

18     While Ms Hohaia only has one child with Mr Caldwell, she also has two children from a previous relationship.

[35]Ms Hohaia has managed to find limited casual work mowing lawns, earning

$100 per week, but deposed that this was unlikely to be sustainable as a full-time role because of her age, even if full-time work of that nature was available. She could not find any roles that would provide her with an income similar to what she had earned at Glass Ltd.

[36]   Mr Mounsey took issue with the Judge’s comment (following her reference to Ms Hohaia’s employment history and reported job prospects) that:19

[23] There is no further evidence before the Court of any steps being taken by Ms Hohaia to obtain employment. There is no evidence as to employment availability in Tūrangi and neither is there evidence of any possible alternatives such as moving to a larger centre where employment may be more readily available.

[37]   Mr Mounsey submitted that the Judge was wrong to consider that there was no evidence of possible employment alternatives that Ms Hohaia had considered, such as moving to a larger centre. He submitted that such a requirement is not in the Act and any suggestion that Ms Hohaia is required to move towns to obtain employment is unduly harsh, given that she has no access to capital and minimal income.

[38]   Ms Daniell, for Mr Caldwell, noted that it is not uncommon for residents of Tūrangi to obtain employment in  Taupō,  and  that  there  was  no  evidence  that  Ms Hohaia had made any efforts in this regard.

[39]   While the assessment under s 82 is unstructured and based on what the Judge considers reasonable, as Kós J noted in Hodson v Hodson, applicants are not expected to take employment at a significant geographical remove from their present location.

A robust sense of fairness must prevail.20

[40]   In my view, the key point the Judge was making was that Ms Hohaia had provided only limited evidence of any attempts to find work. I accept that Ms Hohaia is not required to move to a larger centre, a significant distance away, to find work (and if the Judge suggested otherwise, that was incorrect). Ms Hohaia is, however,

19     Hohaia v Caldwell [2018] NZFC 2749.

20     Hodson v Hodson HC Napier CIV-2011-441-618, 6 December 2011 at [29].

required to make reasonable efforts to find work, and to provide sufficient evidence to the Court of those efforts. It appears from Ms Hohaia’s evidence that at least some work is available in Tūrangi, such as “minimum wage” work in the fast food industry. Ms Hohaia does not believe, however, that such work would be “suitable” for her. She does not explain, however, what her job criteria are, and where she draws the line between suitable and unsuitable work. For example, would she be prepared to accept an entry-level position in the short-term, on the basis that promotional opportunities might then be available?

[41]   Further, if limited work opportunities are available in Tūrangi, as Ms Hohaia deposes, it is not unreasonable to expect that her job search might need to extend to Taupō. Taupō cannot be described as a “significant” geographical remove from Tūrangi. Such that it is unreasonable to expect her to explore opportunities in Taupō. The distance between the two towns is about 50 kilometres and would involve similar commuting time to that faced by many workers in larger centres such as Auckland or Wellington. Obviously, whether it would be realistic for Ms Hohaia to accept work in Taupō (if available) would depend on a number of factors, including the salary offered relative to the travel costs that she would need to incur. There is no evidence, however, that Ms Hohaia has made any effort to explore work opportunities outside of Tūrangi.

[42]   Overall, I am not satisfied that the Judge erred materially in her assessment of Ms Hohaia’s efforts to find employment. The Judge was entitled to take account of the fact that limited information had been provided, and Ms Hohaia has previously supported herself over a period of many years (including during extended periods of marital separation). Her employment history is not limited to Glass Ltd. It is therefore clear that Ms Hohaia has marketable job skills. Ultimately, it was open to the Judge, on the fairly limited evidence before her, to decline to accept that Ms Hohaia had made reasonable efforts to find work.

Conclusion on whether the Judge erred  in  the  approach  she  took  to  assessing Ms Hohaia’s ability to meet her own reasonable needs

[43]   Judge Munro considered that Ms Hohaia had the ability to meet her own reasonable needs and any inability to do so lacked an evidential basis and was not attributable to the parties’ separation.

[44]   It is not for this Court to substitute its own assessment of Ms Hohaia’s ability to meet her own reasonable needs for that of the Family Court. The Judge was, however, required to exercise her unfettered discretion reasonably in all the circumstances. To succeed on appeal, Ms Hohaia, must show that the Judge acted on a wrong principle, failed to take into account a relevant matter or took into account an irrelevant matter, or was plainly wrong.21 For the reasons outlined above, I have not been persuaded that any of these requirements are met.

Did the Judge err in her assessment of when the period of maintenance would begin?

[45]   Mr Mounsey submitted that the Judge wrongly assessed whether maintenance was required on the basis of an inability to meet needs as at the date of the hearing, rather than as at the date of the application.

[46]   In A v B, after a delay of over two years from the date of the application being filed, the Judge considered it pertinent to examine the situation of the parties at the time of the hearing, rather than the date the application was filed.22 However, other cases have either backdated their orders or discussed the possibility of doing so.23

[47]   I have not been persuaded that the Judge erred by failing to approach the issue of interim maintenance as at the date of the application, rather than the date of the hearing. The discretion is broad, and the interests of justice must prevail. In any event, nothing turns on this issue. There is nothing to suggest that a different outcome would have been reached if the interim application was assessed as at the date it was made, rather than as at the date of the hearing.

21     May v May (1982) 1 NZFLR 165 (CA) at 169–170;  and Owen  v Thomas  [2014] NZHC 2200 at [43].

22     A v B [2012] NZFC 2847.

23     LMM v SLB [2012] NZFC 4663; and Robinson v Robinson [2000] NZFLR 916 (HC).

Did the Judge err by stating that she did not need to consider Mr Caldwell’s ability to pay maintenance?

[48]   Mr Mounsey submitted that the Judge erred because she failed to go on to consider Mr Caldwell’s ability to meet Ms Hohaia’s needs, after determining what those needs were.

[49] In accordance with the approach set out at [13] above, an assessment of whether Mr Caldwell could meet Ms Hohaia’s reasonable needs was not required, in light of Judge Munro’s findings.

Result

[50]The appeal is dismissed.

[51]   The appeal has previously been categorised as Category 2 for costs purposes. My preliminary view is that the respondent, as the successful party, is entitled to an award of costs on a 2B scale basis. Given, however, that I have not heard from the parties on costs issues, leave is reserved to file memoranda if agreement cannot be reached between counsel. Any memorandum on behalf of the respondent is to be filed by 21 February 2019. Any memorandum in response from the appellant is to be filed by 28 February 2019.

Katz J