JES v JBC HC Wellington CIV 2005-485-1046

[2007] NZHC 1577

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV 2005-485-1046

CIV 2006-485-001259

IN THE MATTER OF     the Property (Relationships) Act 1976

BETWEEN  JES Appellant

AND  JBC Respondent

Hearing:         5 February 2007

Appearances: R P Harley for Appellant

M G Gazley for Respondent

Judgment:      5 February 2007

RESERVED JUDGMENT ON APPLICATION FOR LEAVE TO APPEAL OF MILLER J

[1]      JES moves for leave to appeal from my judgment of 6 November 2006.  The parts of the judgment that she wishes to appeal concern the classification of the Medical Assurance Society debt as a relationship debt, the valuation of JCO Limited, duration of spousal maintenance, and costs.

[2]      The test is to be found in Waller v Hider [1998] 1 NZLR 412. The appeal must raise some question of law or fact capable of bone fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the cost and delay of the further appeal. The primary function of the Court of Appeal on a second appeal is to clarify the law to determine whether it has been properly construed and applied. Not every alleged error of law is of such importance as to justify a further pursuit of mitigation. That said, in the end the guiding

principle is the requirements of justice.

JES V JBC HC WN CIV 2005-485-1046  5 February 2007

[3]      JBC opposes, contending that the issues raised are without merit and pointing out that the pool of relationship property was not much more than $400,000 while JES claimed to have incurred costs of $135,000 in the Family Court alone.

[4]      The first issue concerns the treatment of the Medical Assurance Society debt. The Family Court held that it was a relationship debt, and I agreed.   Ms Harley maintains that I erred on the facts, and further erred by failing to apply Park v Park [1980] 2 NZLR 278, and Castle v Castle [1980] 1 NZLR 14.

[5]      I accept that the true characterisation of the Medical Assurance Society debt raises a question of law, namely whether a loan can be characterised as a relationship debt when it cannot be traced to any specific payment for renovations to the family home.  It confronts, however, clear factual findings in the Family Court that the debt was incurred for relationship purposes and must have been used for those purposes since there was no other source of funds that might have been used to pay for the renovations.  It is true that the account used to pay for renovations was also used to pay tax on the income of the company used to sell JBC’s professional services but that too is in substance a relationship purpose.  I do not think that the issue raised by Ms Harley is of sufficient importance to justify a second appeal.

[6]      The second issue is whether I was right to find that the Family Court Judge erred by placing a value on imputation credits when valuing JCO Limited, the shares in which were matrimonial property.   I heard evidence on this question, which was not fully developed in the Family Court, and that factor counts in favour of granting leave.   Nonetheless, I do  not think  that  this  issue  justifies a further  appeal.    It concerns  a  relatively  modest  sum  of  $72,000  and  raises  no  issue  of  wider importance, since the question is whether JBC is able or likely to use the imputation credits and that depends upon his particular circumstances.

[7]      The third issue is whether I erred in holding that the Family Court misapplied s.64A of the Family Proceedings Act when assessing the duration of spousal maintenance.  I held that the Family Court Judge omitted to apply the principle that JES  was  obliged  to  take  responsibility  for  meeting  her  own  needs  within  a reasonable period of time, having regard to the division of functions within  the

marriage.  Ms Harley made two points.  The first is that I held incorrectly that the Family Court failed to consider s.64A at all.  That is not correct; see paragraphs [43] and [51] of my judgment.  The second is that an appellate court ought not interfere lightly with a discretionary award of maintenance.  But while that is true, Ms Harley candidly acknowledged that the award made in the Family Court in this case was unprecedented.   I have hesitated on this point  because the  issue  is of no  small importance to JES; it involves a very substantial sum of money.   Nonetheless, the principle that I applied is to be found in the legislation itself.  It is its application to the facts that causes difficulty.  I do not think that the issue justifies a second appeal.

[8]      The last issue concerns costs.  Ms Harley maintains that I erred in deciding that the Family Court Judge awarded costs pursuant to time allocations.  The Family Court, she contended, did not apply the schedule at all but based its award on JBC’s actual costs, taking one quarter of that figure.  She emphasised that the starting point for fixing costs should be the scale.  The difficulty with this submission is that the amount involved is only $15,000 plus disbursements and, as I pointed out in my judgment, the approach taken by the Family Court was actually generous to JES.  An award based on scale would be significantly greater, as Ms Harley acknowledged. As the Court of Appeal pointed out in Waller v Hider, it is incumbent on counsel to ask themselves whether in truth the issue is sufficiently important to justify a second appeal.   In my view, this issue is not.   It is not necessary to address Mr Gazley’s point that the application is in any event out of time.

[9]      The application for leave to appeal is dismissed.

Solicitors:

Russell McVeagh, Wellington for Appellant

M Gazley, Wellington for Respondent

F Miller J