Holroyd v Holroyd
[2020] NZHC 1210
•4 June 2020
NOTE: UNDER S 35A OF THE PROPERTY (RELATIONSHIPS) ACT 1976, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B, 11C AND 11D OF THE FAMILY COURT ACT 1980.
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IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY
I TE KŌTI MATUA O AOTEAROA WHANGĀREI-TERENGA-PARĀOA ROHE
CIV-2019-488-88
[2020] NZHC 1210
UNDER the Property (Relationships) Act 1976 IN THE MATTER
of Family Court judgment dated 12 September 2019
BETWEEN
AARON MICHAEL HOLROYD
Appellant
AND
PHYLLIS MARGARET HOLROYD
Respondent
Hearing: 3 June 2020 Appearances:
Appellant in person
M H Miles for the respondent
Judgment:
4 June 2020
JUDGMENT OF PALMER J
This judgment was delivered by me on Thursday 4 June 2020 at 11.00 am.
Pursuant to Rule 11.5 of the High Court Rules
………………………… Registrar/Deputy Registrar
Solicitors/Party:
M H Miles, Whangarei Appellant in person
HOLROYD v HOLROYD [2020] NZHC 1210 [4 June 2020]
What happened?
[1] Mr Aaron Holroyd and Mrs Phyllis Holroyd met in April 1996, married in March 1999, had two children and separated on 7 July 2016.1 On 8 October 2016, Mrs Holroyd vacated the family home and Mr Holroyd remained there.
[2] In the course of entering an interim relationship property agreement, Mrs Holroyd’s lawyers identified some $640,000 in an Australian share portfolio and an Australian bank account, operated by Mr Holroyd, that had not been disclosed to her.2 Mrs Holroyd applied for orders under s 23 of the Property (Relationships) Act 1976 (the Act) determining the nature and extent of the parties’ relationship property, their respective shares in their relationship property and the division of their relationship property.
[3] During the Family Court hearing, the parties reached broad agreement on a number of aspects of their relationship property.3 That left three issues to be determined by the Court, in relation to: a marina berth held by Mr Holroyd before the parties’ relationship; Mrs Holroyd’s claim for compensation for economic disparity; and Mrs Holroyd’s claim for compensation for legal fees as a result of the non- disclosure of the shares and other funds. On 12 September 2019, Judge L King issued judgment in the Family Court in Whangārei.4 Mr Holroyd now appeals.
Section 15 of the Property (Relationships) Act 1976
[4] In general terms in relation to marriage, under s 1M, the purposes of the Act are to recognise the contribution of both spouses and provide for the just division of relationship property between them when their relationship ends. Under s 11, each spouse is entitled to share equally in the family home, family chattels and any other relationship property. Section 15 provides for a court to order that one party compensate the other because their income and living standards are likely to be significantly higher due to the effects of the division of functions within the marriage:
1 Holroyd v Holroyd [2019] NZFC 7268 at [2]–[3].
2 At [4].
3 At [8].
4 Holroyd v Holroyd, above n 1.
(1)This section applies if, on the division of relationship property, the court is satisfied that, after the marriage, civil union, or de facto relationship ends, the income and living standards of one spouse or partner (party B) are likely to be significantly higher than the other spouse or partner (party A) because of the effects of the division of functions within the marriage, civil union, or de facto relationship while the parties were living together.
(2)In determining whether or not to make an order under this section, the court may have regard to—
(a)the likely earning capacity of each spouse or partner:
(b)the responsibilities of each spouse or partner for the ongoing daily care of any minor or dependent children of the marriage, civil union, or de facto relationship:
(c)any other relevant circumstances.
(3)If this section applies, the court, if it considers it just, may, for the purpose of compensating party A,—
(a)order party B to pay party A a sum of money out of party B’s relationship property:
(b)order party B to transfer to party A any other property out of party B’s relationship property.
[5]In 2017 in Scott v Williams, a majority of the Supreme Court said of s 15:5
[264] The assessment of disparity is a broad one and it must be considered in light of provisions in the PRA that treat all contributions made by both partners to the relationship as equal. In long-term relationships where one partner has had primary responsibility for home-making and child-care and the other partner for income-earning activities, this means that the PRA operates on the assumption that any disparity at the end of the relationship is equally attributable to both partners. This assumption can be rebutted but this would not be easy to do in the case of long-term relationships.
[265] The amount of an order under s 15 is limited to the extent of the relationship property. Any order made under s 15 must be just. Thus it must compensate for the disparity but cannot create an injustice for the other party. There is no one method, formula or approach that can be applied to calculate a s 15 order as there is no single way to prescribe what is just. This will depend on the individual circumstances of each relationship and each partner.
5 Scott v Williams [2017] NZSC 185, [2018] 1 NZLR 507, at [264] per Glazebrook J supported by Elias CJ (at [331]) and Arnold J (at [329]).
The decision under appeal
[6] Mr Holroyd accepts the first and third of Judge King’s determinations. But he appeals the second determination, that he pay $100,000 to Mrs Holroyd under s 15 of the Act.6 In respect of this determination, the Judge found:
(a)The division of roles in the family was for Mrs Holroyd to stay at home, attend to the children’s needs and smooth running of the family home while Mr Holroyd worked as a shift worker and assumed responsibility for all financial matters.7 In addition, Mr Holroyd engaged in share trading before and during the course of the relationship.8
(b)The income and living standards of Mr Holroyd are significantly higher than Mrs Holroyd because of the effects of the division of functions within their marriage.9 Her future living standard is likely to be much less than his, as a result of her significantly lower income earning ability.10
(c)Mrs Holroyd would likely have continued with further study but for the division of functions within their marriage. However, the Judge was not satisfied she would necessarily have become a registered nurse, rather than an occupational therapist.11
(d)Mr Holroyd accepted a payment for economic disparity ought to be made to Mrs Holroyd but considered it should be at the level his expert assessed as appropriate, $54,000, which was half of the estimated economic disparity of $108,000.12
6 At [93](ii).
7 At [54].
8 At [58]-[59].
9 At [62].
10 At [63].
11 At [72].
12 At [64]-[65].
(e)The case of X v X still applies to determining the methodology where the advantaged party under s 15 suffers an economic shortfall.13 The overriding consideration, according to the Supreme Court in Scott v Williams, is that the award must be just. Neither judgment considered it necessary for the final award to be halved in every case.
(f)The judge calculated the quantum at $100,000 taking into account:14
(a) the parties agree that a payment on the basis that [Mrs Holroyd’s] career as an enrolled nurse is appropriate.
(b) The compensation as an enrolled nurse was assessed by [Mr Holroyd’s] experts at $108,000, half of which is $54,000.
(c) Having found that the applicant would have gone on to undertake further study to become a trained occupational therapist, recognition of the same is appropriate.
(d) [Mr Holroyd’s] earning ability as a share trader over the period of time the parties were together and moving forward.
(e) That a payment under s 15 is a compensatory award to a party who is disadvantaged at the end of the relationship
(f) There is nothing in the wording of s 15 that requires a payment to be halved. Instead, a fair and just division of relationship property must be achieved.
(g) The total value of [Mr Holroyd’s] share of the relationship property from which compensation will be paid is around
$250,000.
(h) This payment represents around 40% of the respondent’s share of the pool of relationship property available for distribution.
Submissions
[7] Mr Holroyd did not file written submissions. But he submits that the judgment contains major errors. His primary submission at the hearing was that the finding that he was a “share trader”, buying and selling shares on a regular basis, is not supported by the evidence because he was only an investor, purchasing 53 shares in seven years, holding shares for the long term and selling only four. When I asked about it, he also made the submission, which is in his notice of appeal, that the division of function
13 At [70], referring to X v X [Economic Disparity] [2009] NZCA 399, [2010] 1 NZLR 601.
14 At [88].
within the relationship was limited and not clear cut, as he spent a great deal of time at home. He submits Mrs Holroyd had 20 years to retrain but she did not want to. He submits the $54,000 recommended by his expert should be given to Mrs Holroyd, not
$100,000.
[8] Ms Miles, for Mrs Holroyd, submits the distinction between being a share trader and an investor is irrelevant. Rather, the value of the share portfolio is relevant to the assessment of economic disparity. She submits the $100,000 awarded: amounts to 10 per cent of Mr Holroyd’s half share of the total relationship property pool; does not effect a reversion of the parties’ position post separation; is appropriate using a broad-brush assessment; reflects the parties’ likely future earning capacity; reflects Mrs Holroyd’s role as primary caregiver and homemaker; reflects the likelihood Mrs Holroyd is unlikely to retrain and equalise her income at age 55; does not offend the provisions of the Act designed to create substantive equality; reflects the finding in X v X that s 15 is an opportunity to compensate a party who is disadvantaged at the end of the relationship; and is consistent with the rule of thumb identified there of awarding 10 per cent of the advantaged spouse’s share. She seeks interest on the judgment sum of $100,000 from the date of the Family Court hearing to the date the sum is paid.
Does the division of functions justify the award?
[9] Section 39 of the Act provides that a party can appeal a decision of the Family Court to the High Court. The appeal is by way of rehearing. Under Austin, Nichols & Co Inc v Stichting Lodestar, I must make my own decision on the merits of the case.15 But I must have regard to the advantage the Family Court judge had in hearing the evidence and assessing the credibility of the witnesses.16
[10] Mr Holroyd’s submission that he was an investor and not a share trader does not affect the result of this case. The value of the shares invested is relevant. And his ability to make investments is relevant. Both of these factors were taken into account
15 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141.
16 At [5].
by the Judge. The distinction Mr Holroyd draws between being an investor and a share trader does not justify a successful appeal of her decision.
[11] Mr Holroyd’s submission that the division of functions within the relationship was limited is more relevant. His evidence was that “as a Shift worker I have always had a great deal of time off during the week, and helped out at all times with the daily care of our Two Sons”.17 He said his shifts were on an eight-day rotation over a seven day week and he had 39 days leave a year. He says this could have released Mrs Holroyd from child care and enabled her to work or train.
[12] But the evidence is clear that Mrs Holroyd was the primary caregiver and homemaker and Mr Holroyd undertook shift work. That was found by the Judge, there is evidence to support it and it is even implicit in Mr Holroyd’s acceptance that there should be an order under s 15. It is a clear division of function of the sort envisaged by s 15. As the Supreme Court stated, it would not be easy to rebut the assumption that any disparity at the end of the relationship is equally attributable to both partners, in the case of a long-term relationship. It was not rebutted here. As the Judge found, and Mr Holroyd accepted, the disparity justifies an order under s 15.
[13] I do not consider there is any good reason to reduce the amount of $100,000 awarded in the circumstances of this case. It is only 10 per cent of the relationship property Mr Holroyd received. It seems unlikely to make up for the significant disparity in likely earning capacities between them. I consider the Judge’s award was just. It does not create an injustice for Mr Holroyd. Interest should be paid.
Result
[14] I dismiss the appeal. I order that interest must be paid on the $100,000 awarded by the Family Court from the date of the Family Court judgment until the date of payment at the rate specified under s 87 of the Judicature Act 1908.
Palmer J
17 Affidavit of Aaron Holroyd, 1 May 2019, at 6.
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