Johnson v Johnson
[2017] NZCA 147
•28 April 2017 at 4.00 pm
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| IN THE COURT OF APPEAL OF NEW ZEALAND |
| CA243/2016 [2017] NZCA 147 |
| BETWEEN | RICHARD OWEN JOHNSON |
| AND | TAMARIE ELLIS JOHNSON |
| Hearing: | 23 March 2017 |
Court: | Kós P, Miller and Brown JJ |
Counsel: | R J Hooker for Appellant |
Judgment: | 28 April 2017 at 4.00 pm |
JUDGMENT OF THE COURT
The appeal is dismissed. The husband must pay costs as for a standard appeal on a band A basis and usual disbursements.
____________________________________________________________________
REASONS OF THE COURT
(Given by Miller J)
Introduction
The parties are a formerly married couple who emigrated to New Zealand from Oregon in July 2010, only to separate on 1 January 2011. The husband took a flat in Auckland, but eventually returned to the United States. Their relationship property comprised movable assets, and most of it was situated in the United States.
In February 2011 the husband commenced relationship property proceedings in the Circuit Court of the State of Oregon, and two months later the wife commenced corresponding proceedings in the Family Court at North Shore. The Circuit Court twice rejected the wife’s protest to jurisdiction and she eventually withdrew, maintaining her protest. The husband did not pursue a protest in New Zealand. On the contrary, he participated fully in the wife’s proceeding.
The husband won a judgment, apparently by formal proof, in Oregon around November 2014. In May 2016 the wife won a judgment in the High Court at Auckland, to which her proceeding had been transferred by consent.[1] The New Zealand judgment followed a defended hearing. Both judgments dealt with the same movable assets. The Oregon judgment distributed assets between the parties and resulted in a balancing payment to be made by the wife. The New Zealand judgment adopted an agreed distribution of assets and resulted in a balancing payment to be made by the husband.
[1]Johnson v Johnson [2016] NZHC 890, [2016] 3 NZLR 227 [HC Interim Judgment].
Asher J held that the High Court had jurisdiction over the parties’ relationship property and rejected a claim that the wife was estopped by the Oregon judgment, which was not delivered on the merits so as to give rise to issue estoppel and in any event had been procured by the husband’s fraud.[2] He later gave a second, final judgment which dealt with miscellaneous matters still at issue after the earlier judgment.[3]
[2]At [16], [30] and [54]–[56].
[3]Johnson v Johnson [2016] NZHC 1606, [2016] NZFLR 634 [HC Final Judgment].
On appeal, the husband maintains that the High Court was without jurisdiction to decide the wife’s proceeding; alternatively, that the Circuit Court’s decision gave rise to issue estoppel. It is said that fraud is irrelevant because the High Court was not being asked to enforce the Oregon judgment; and in any event, Asher J’s findings were wrong.
In our opinion the litigation has miscarried, a direct consequence of the husband’s election not to settle the question whether New Zealand was forum conveniens by making a protest to jurisdiction, but rather to participate in the wife’s proceeding here. That decision appears to have induced the wife not to pursue her defence on the merits in the US, believing that New Zealand courts had jurisdiction, and it has resulted in conflicting substantive judgments of United States and New Zealand courts.
It is now necessary for us to decide what the New Zealand courts ought to do about it. The husband would have us set aside the High Court judgment, inviting us to assume that that United States Courts will not enforce it. (For reasons that will become apparent, no question arises of the Oregon judgment being enforced here.) He also maintains that the wife is estopped by the Oregon judgment. For her part, the wife says that there is no dispute that the husband submitted to the jurisdiction of the New Zealand courts and, that being so, the appeal should be dismissed. The Oregon judgment can be discounted because it was procured by fraud, the husband having falsely claimed that he had not submitted to New Zealand jurisdiction. She adds that no question of estoppel arises from the Oregon judgment in circumstances where she never submitted to the Circuit Court’s jurisdiction and the judgment was procured by fraud.
If the wife is correct, the possibility arises that the Circuit Court may set aside its judgment and do one of two things: permit enforcement of the New Zealand judgment or assert jurisdiction and offer the wife a hearing on the merits. We do not know whether the Circuit Court would choose to do those things, or even whether it can do them under its processes, but it is a reasonable assumption that as a matter of comity the Circuit Court would take seriously a finding that its judgment had been procured by fraud.
Narrative
The parties were United States citizens (the wife has now acquired New Zealand citizenship) who married there in 1998. They have two children born in 2005 and 2007. They obtained permanent residency in New Zealand and moved here in July 2010. Within a matter of months the marriage had broken down. The husband remained in New Zealand for a time, taking a flat, but eventually returned to the United States, returning intermittently here to see the children.
Most of the parties’ movable assets are held in the United States, and most are controlled by the husband; as a result, he has no need to enforce the Oregon judgment in this jurisdiction. They sold their family home before moving to New Zealand and retained no immovable property in the United States. They held relationship property to the value of USD$498,975.32, of which $381,949.81 was in the husband’s control after separation and the balance in the wife’s; most of these assets were in the United States. The wife owned two public relations firms, one incorporated in the US and the other in New Zealand. Asher J found that only the United States company had any value at the date of separation, and that it was worth NZD$104,000.[4]
[4]HC Interim Judgment, above n 1, at [81] and [90]–[92].
The procedural narrative that follows is abbreviated. In particular, it says little about competing proceedings in Oregon and New Zealand over care of the children, though we must say something about those later when dealing with the question of fraud.
Relationship property proceedings began on 19 February 2011, with the husband filing an omnibus petition in the Circuit Court claiming, among other things, division of relationship property. He said that he had never intended to emigrate to New Zealand and maintained his Oregon domicile. That proceeding was filed while he was still resident in New Zealand.
On 29 March 2011 the wife filed a motion to dismiss the application on the basis that the Circuit Court was without jurisdiction. It appears to have been the first step she took in that proceeding.
On 19 April 2011 the wife filed her application for relationship property orders in the Family Court at North Shore. The husband was served in New Zealand.
On 1 June 2011, Judge Grensky of the Circuit Court decided that the Oregon courts had jurisdiction. He accepted that the husband had resided in New Zealand for more than six months before filing but was unable to conclude that the husband intended to change domicile. That being so, United States law favoured the original domicile. The Court also recorded that although the wife had “initiated matters in a New Zealand court relating to marriage and children” the parties “seemed to agree” that this was not equivalent to an Oregon divorce petition; that factor also favoured the husband.
On 7 June 2011 the husband filed a notice of defence to the wife’s property proceeding. On 16 June his counsel (not Mr Hooker) filed a memorandum advising that he protested the jurisdiction of the Family Court. If that was his intention, the Family Court Rules 2002 required that he file a formal protest in the prescribed form. Had he done so, the Court must have scheduled a hearing on it.[5] The defence he had filed did not take the form of a protest to jurisdiction. Neither it nor his affidavit in support of his defence mentioned a protest to jurisdiction. It is not clear why he took this stance, but a possible explanation is that he chose not to pursue a protest because the Family Court indisputably had jurisdiction over the children.
[5]Family Court Rules 2002, r 43. The form is Form G22, sch 1 to the Rules.
On 3 May 2014 the wife again sought to have the Oregon proceeding halted, seeking an order setting aside the Circuit Court’s interim judgment. She contended that the parties were domiciled in New Zealand at relevant times and argued that the husband was estopped from litigating property issues in Oregon, having participated in litigation over the same assets in New Zealand.
On 14 July 2014 the husband consented to the New Zealand property proceedings being transferred to the High Court.
Around the same time the husband filed in the Circuit Court what was described in the High Court as an originating petition but was actually a declaration made in answer to the wife’s protest to jurisdiction. In it he asserted, among other things, that he had never submitted to the jurisdiction of the New Zealand courts. It will be necessary to return to the details of what the husband said in that document. His counsel also argued that New Zealand had not “litigated” any property issues, that the Circuit Court proceeding was first in time and that Oregon was forum conveniens.
The wife’s second protest to jurisdiction was heard on 17 July 2014. She was represented by counsel and attended herself by telephone. The protest failed. There does not appear to be a reasoned judgment, but it appears likely that Judge Grensky accepted the husband’s contention that nothing had changed since the original protest to jurisdiction in 2011.
The wife did not appear at the substantive hearing in Oregon, which was held on 9 October 2014 and apparently took the form of formal proof. We are told that the husband gave evidence, offering his own valuation of the parties’ assets.
The wife did write to the Circuit Court stating that she would no longer participate in the proceedings and explaining that she relied on the proceedings in New Zealand, which she had been told was the proper forum. Her letter reiterated that the husband had submitted to New Zealand jurisdiction. She pointed out that he had consented to the transfer of proceedings to the High Court.
On 24 November 2014 the Circuit Court delivered a judgment dissolving the marriage, awarding the husband custody of the children, and dividing relationship property. The Circuit Court’s judgment recited that after retaining two competent lawyers, filing an appearance and participating in several hearings over the past three and a half years, the wife had waived her right to appear at trial. It did not otherwise give reasons for dismissing the protest to jurisdiction, or for judgment. The Court ordered a distribution of specific property and a balance payment of USD$83,067.31 to be made by the wife.
At a case management conference in the High Court on 15 April 2015, the husband, appearing in person, invited Asher J not to order discovery because that had been “covered off” in proceedings in the United States. The Judge explained that he must provide a list of documents in the New Zealand proceeding. Thereafter he complied evasively with a series of discovery orders, resulting in the wife seeking to have him debarred from taking any further steps in the proceeding. In particular, he failed to comply with orders requiring discovery of steps taken to transfer assets into trusts for the children. He claimed, to the disbelief of the Court, that the documents concerned were not within his possession or power.
On 7 October 2015, Mr Hooker, who was newly appointed for the husband, made an interlocutory application for a stay on the ground that the wife, having participated in the Oregon proceeding, was estopped from disputing its determination of property issues. However, the application was discussed at a case management conference and counsel agreed instead to hold a hearing on the merits. The hearing was held over five days, beginning in December 2015, and the interim judgment was delivered on 4 May 2016. The High Court heard viva voce evidence from the wife and the husband as well as from from two accountants as to the value of the wife’s public relations firms.
In the interim judgment Asher J rejected the husband’s argument that the Oregon judgment resulted in an issue estoppel precluding the High Court from determining relationship property issues.[6] In a final judgment delivered on 15 July 2016, which is also under appeal, the Judge settled the distribution of property. The High Court judgments did not distribute specific property held in either jurisdiction; the parties had agreed what the relevant assets were and who held them. Rather, the Judge ruled that the husband must pay the wife a balancing sum of NZD$169,215.22.[7] He awarded interest on that sum and awarded costs, with an uplift for increased costs resulting from the husband’s serial evasion of discovery.[8]
[6]HC Interim Judgment, above n 1, at [30] and [56].
[7]HC Final Judgment, above n 3, at [14].
[8]At [25], [39] and [53].
We were told that the Oregon and New Zealand judgments deal with the same items of property, but counsel were not able to explain why they differ, beyond saying that it is attributable in part to differences in valuation. We were not given to understand that there are major differences in the respective community property regimes.
The issues
We address the issues as follows:
(a)Was the High Court without jurisdiction to decide the proceeding, as the husband maintains?
(b)Should we allow the appeal on the basis that New Zealand was forum non conveniens, as the husband invites us to do by alleging that United States courts will not enforce a New Zealand judgment?
(c)Was the High Court wrong to find that the Circuit Court judgment was obtained by fraud?
(d)Does the Circuit Court judgment create an estoppel precluding the wife from pursuing relationship property proceedings in New Zealand?
(e)Was the Judge wrong to order an uplift on costs for additional expense caused by the husband’s attempts to evade discovery?
Jurisdiction
The husband’s complaint that New Zealand courts were without jurisdiction can be disposed of shortly. Under the Property (Relationships) Act 1976 (the PRA) New Zealand courts enjoy jurisdiction over movable property anywhere in the world provided one of the parties is domiciled in New Zealand.[9] At the time the wife’s proceeding was commenced, both were still resident in New Zealand and the wife at least was domiciled here, as Asher J found.[10] His conclusion about the wife’s domicile is not in dispute on appeal. Had he been overseas, the husband might have been served lawfully under the District Court Rules,[11] but he was in fact served in the jurisdiction.
[9]Property Relationships Act 1976, s 7(2).
[10]HC Interim Decision, above n 1, at [17].
[11]Family Court proceedings involving service outside the jurisdiction are governed by the District Court Rules 2014: Family Court Rules, r 130; and District Court Rules, rr 6.23, 6.24 and 6.25.
Further, the husband submitted to New Zealand jurisdiction, choosing to participate on the merits rather than pursue a protest to jurisdiction. Notably, he participated by filing a defence and his affidavit of assets and liabilities, and by consenting to the proceeding being transferred to the High Court, all of this before the Circuit Court held its substantive hearing and issued its judgment.
So it is beyond doubt that as between the parties the High Court had jurisdiction over movable property in the United States. Contrary to Mr Hooker’s submission, the Court was not limited to dealing with any assets the Circuit Court had not addressed.
The Family Court might have been asked at the outset to exercise its jurisdiction under s 7(3) of the PRA to decline, on forum conveniens grounds, to make an order affecting movable property situated in the United States.[12] But neither the Family Court nor the High Court was called upon by the husband to answer that question. Rather, both proceedings continued and having got a judgment in Oregon the husband invoked estoppel. Mr Hooker argued that the New Zealand proceeding should be stayed, the Circuit Court having decided all relationship property issues so as to create an estoppel. For his part, Mr Knight, for the wife, resisted the claim on the ground that the Circuit Court lacked jurisdiction to deal with property in New Zealand and its judgment was not enforceable in New Zealand.
Should the appeal be allowed on the ground that New Zealand was forum non conveniens?
[12]This approach reflects this Court’s decision in Wing Hun Printing Co Ltd v Saito Offshore Pty Ltd [2010] NZCA 502, [2011] 1 NZLR 754 at [68].
Assumptions about forum conveniens underlie the husband’s argument before us that the judgment should be set aside because United States courts will not enforce it. He assumes, in particular, that the Circuit Court has settled finally that it is forum conveniens and will not revisit its judgment on the merits, either directly or, as Asher J suggested, by refusing to allow its judgment to be pleaded as a bar to enforcement proceedings.
We are not prepared to adopt these assumptions. We accept that had s 7(3) of the PRA been addressed at the outset, a New Zealand court might properly have decided that Oregon was forum conveniens. But as we have just noted, the husband chose instead to submit to New Zealand jurisdiction. It is too late for him to protest now.
Further, we do not know what attitude United States courts would take to enforcement of the New Zealand judgment once aware that the husband had submitted to New Zealand jurisdiction. As we next go on to explain, we agree with Asher J that the husband made false claims about this before the Circuit Court.
Was the Oregon judgment procured by fraud?
We begin by setting this issue in context. We are not being asked to enforce the Circuit Court judgment, but the husband invites us to recognise it by allowing his appeal on the ground that New Zealand courts ought to defer. The proper standard against which that plea should be assessed is whether a New Zealand court would enforce the judgment. As to that, it is long settled that a New Zealand court will not enforce a foreign judgment that was obtained by fraud.[13] The principle ultimately at work is that a party should not be able to take advantage of its own wrong. Comity does not dictate that a court should recognise such a judgment, for “fraud unravels everything”.[14]
[13]Abouloff v Oppenheimer (1882) 10 QBD 295 (CA) at 300; and Svriskis v Gibson [1977] 2 NZLR 4 (CA) at 10.
[14]Owens Bank v Bracco [1992] 2 AC 443 (HL) at 489 per Lord Bridge of Harwich.
Asher J’s findings should be set out in full:[15]
[15]HC Interim Judgment, above n 1, at [43]–[55].
[43] Mr Johnson made a number of statements in a petition dated 15 July 2014, which it can be presumed was the originating document on which the Oregon Court relied in making its various orders in November.
[44] Mr Johnson asserted that he and the children continued to be domiciled in the United States. That is arguably inaccurate as he and the children have been physically residing in New Zealand since 2010. However given the distinction between residence and domicile, which is far from straightforward, I do not consider that to be a misrepresentation amounting to fraud. He then stated that: NZ refuses to register and honour the amended limited judgment entered into the records of the Circuit Court of the State of Oregon ... awarding me sole legal custody of the children.
[45] This is an inaccurate statement. There had never been a refusal to register the amended limited judgment of the Oregon Court. There is indeed no process for such “registration”. The Oregon judgment was referred to in the New Zealand proceedings.
[46] It is also to be noted that in that Family Court decision it was observed:
However, during submissions Mr Johnson instructed his counsel he would obtain a discharge of the temporary order in the Oregon Court; would cooperate to ensure any order made in this Court was registered in the Oregon Court, and if considered by he and his wife to be useful, would also cooperate in obtaining orders in the Court in Oregon which reflected the orders made here. He also instructed his counsel to consent to these undertakings being incorporated as conditions of any orders which I make.
[47] It was contrary to this explicit position which Mr Johnson had avowed in New Zealand, as well as factually wrong, for him to say that there had been a refusal in New Zealand to register and honour custody orders in his name. On its own however, I would not find this fraudulent.
[48] In his petition Mr Johnson went on to say:
I have never submitted to jurisdiction of the NZ courts regarding custody or property disposition.
[49] This statement was entirely misleading, and must have been known by Mr Johnson to be misleading, or he must have been reckless as to whether it was true. His mother is a lawyer and he has at times represented himself in these proceedings. Having heard him give evidence he appears to me to be a person who has a good understanding of legal concepts. He would have known that he had participated actively in both the care of children proceedings, and in the property proceedings. He had acceded to the discovery orders and consented to the transfer of the property proceedings from the Family Court to the High Court.
[50] He then stated:
The court of New Zealand has dissolved my marriage to respondent, as it is an administrative process, in that all NZ requires is that one party resides in NZ for two years.
[51] This was also misleading. It indicates that his marriage is not fully or properly dissolved, and indeed this is clearly how the Oregon Court interpreted it, as the Oregon Court proceeded to dissolve the marriage. The marriage in New Zealand had already been quite plainly finally dissolved in New Zealand, and it was wrong for Mr Johnson to indicate that this was something less than a full dissolution. It was a complete legal process, and one in which Mr Johnson had participated.
[52] Mr Johnson went on to say “nor has any discovery been obtained”. This was plainly false. Mr Johnson had acceded to discovery orders being made, and had provided some documents on discovery. He had been personally involved in these processes.
[53] He then stated:
I reiterate, I have never represented to NZ courts that I agreed to or submitted myself to their jurisdiction for distribution of marital property or custody of my children.
For the reasons already given, this was plainly false. Mr Johnson was well aware of his extensive involvement in the New Zealand proceedings.
[54] It must be assumed that this was very material information relied on by the Oregon Circuit Court. On any objective test, these false statements were recklessly made. They were more than negligent. Having heard Mr Johnson give evidence and be cross examined, I am satisfied that he knew he had willingly and fully participated in the New Zealand proceedings, that his marriage was dissolved, and that he had participated in discovery, and he was at the very least reckless as to whether what he was saying was correct.
[55] This, in my view, is sufficient to cross the threshold as to the level of fraud required for issue estoppel not to apply in respect of the Oregon judgment. A party cannot be allowed to rely on a judgment to base an issue estoppel, when it has been attained by wilfully or recklessly misleading the foreign Court as to what was happening in the New Zealand Courts. That would run contrary to justice and good sense.
It will be seen that fraud was alleged in several respects, most arising from the declaration that the husband filed in the Circuit Court on 15 July 2014, when proceedings in New Zealand were well advanced. It was said that: the husband asserted US domicile, when the parties had emigrated to New Zealand; he claimed New Zealand refused to “register” an interim judgment of the Circuit Court awarding him custody; he did not disclose that he had expressly told the Family Court through counsel that he would obtain a discharge of that interim judgment and co-operate to ensure that any New Zealand judgment on custody would be registered in Oregon; he claimed that he had never submitted to New Zealand jurisdiction regarding custody or property disposition; he claimed that no discovery had been obtained in New Zealand; and he claimed that his marriage had not been finally dissolved in New Zealand.
Asher J found that these statements were misleading or false, though the domicile claim was arguable. Mr Hooker sought to persuade us otherwise. He first tried to diminish the claims by saying they were part of the evidence and the wife could have rebutted them. We accept that the wife did claim that he had submitted to jurisdiction but it is not clear what information about the New Zealand proceedings the Circuit Court had before it. Mr Hooker did not assert that the Circuit Court dealt directly with the truth of the husband’s claim that he had never submitted to jurisdiction, and the evidence that we have of its decision does not assist.[16]
[16]See by way of contrast House of Spring Gardens v Waite [1990] 3 WLR 347 (CA) at 355.
Counsel next argued that the husband’s claims were correct, or at least honest, because property issues had not been decided in New Zealand, the parties had agreed to put proceedings on hold here, discovery had not been obtained, the husband had protested jurisdiction and he was in the process of seeking orders that the children return to live with him in Oregon.
We reject these submissions. As Asher J found, the parties’ marriage had been finally dissolved in New Zealand. The husband had not made a protest to jurisdiction. Instead, he had, by July 2014, unequivocally submitted to New Zealand jurisdiction in a number of ways: he had filed a defence to property and parenting applications and his evidence in opposition to the property application; he had opposed discovery sought against him in both the Family and High Courts; he had obtained a relocation order in the Family Court (later set aside on appeal); and he had consented to the transfer of the property application to the High Court.
Asher J heard evidence from the husband, giving him a significant advantage over us. His assessment that the husband must have made some of the statements knowing they were false was plainly open to him. He was satisfied that the husband was aware of what he had done in the New Zealand proceedings and had a good understanding of legal concepts. The record tends to support these conclusions. In particular, the husband must have understood the concept of submission to jurisdiction. It had already arisen in connection with the wife’s first protest, and with his own defence. He was represented by counsel who was evidently aware of the issue.
When directing himself as to the requirements of fraud, Asher J held that for issue estoppel purposes the standard of fraud is set by Derry v Peek, [17] under which it suffices if a statement was made recklessly as to truth.[18] In Emajor v Emajor, Gilbert J declined to follow Asher J’s decision in this case, taking the view that deliberate dishonesty is required.[19]
[17]HC Interim Judgment, above n 1, at [40].
[18]Derry v Peek (1889) 14 App Cas 337 (HL) at 374 per Lord Herschell.
[19]Emajor v Emajor [2016] NZHC 2022 at [71].
We are approaching the case from a conflict of laws perspective and treating the fraud as one going to the Circuit Court’s jurisdiction rather than the merits of its substantive decision. When considering fraud as a defence to enforcement of a foreign judgment, New Zealand courts have long followed Abouloff v Oppenheimer, under which the party resisting enforcement must show that the judgment was obtained by intentional dishonesty.[20] Another way of approaching the issue in this case is to adopt, in the absence of any evidence of United States practice, the standard a New Zealand court would use when assessing a claim that a domestic judgment had been obtained by fraud. The test is found in Commissioner of Inland Revenue v Redcliffe Forestry Venture Ltd, in which the Supreme Court held that the test requires “conscious and deliberate dishonesty” going to the heart of the impugned judgment.[21]
[20]Abouloff v Oppenheimer, above n 13; and Svrikis v Gibson, above n 13.
[21]Commissioner of Inland Revenue v Redcliffe Forestry Venture Ltd [2012] NZSC 94, [2013] 1 NZLR 804 at [28]–[29].
We record that we were not called upon to review the standard in this appeal. Counsel did not take the point that the standard applied by Asher J is too low. There are pending appeals in which the standard may require examination. In this one, nothing turns on it. In our opinion, the Judge’s findings establish conscious and deliberate dishonesty which, because it addressed submission to jurisdiction, must have gone to the heart of the Circuit Court’s decision to dismiss the wife’s second protest to jurisdiction.
Is the wife estopped by the Oregon judgment from pursuing relationship property proceedings in New Zealand?
We can deal with this question shortly. Asher J held correctly that a judgment of a foreign court on the merits may found an issue estoppel.[22] The questions in issue are whether the Oregon judgment was a final decision on the merits and whether it should be denied preclusive effect because it was procured by fraud, which is a recognised defence to an action for enforcement of a foreign judgment in New Zealand and must equally supply an answer to a plea of estoppel in substantive proceedings.[23]
[22]HC Interim Judgment, above n 1, at [24]–[26]. See also KR Handley Spencer Bower and Handley: Res Judicata (4th ed, LexisNexis, London, 2009) at [6.02].
[23]Svriskis v Gibson, above n 12, at 10.
Asher J held that the Oregon judgment was not a decision on the merits but rather a default judgment.[24] Further, the wife was not estopped, for the judgment was obtained by fraud.[25]
[24]HC Interim Judgment, above n 1, at [30].
[25]At [56].
It is not in dispute that the Oregon judgment was final. Departing from the Judge, we think it likely that it was a decision on the merits. Asher J noted that it made no findings of fact or law and no determination of the value of relationship property, but appears to have “rubberstamped” the orders proposed by the husband.[26] As the Judge recognised however, a default judgment may qualify as final and conclusive where it decided the issues “with precision”.[27] The Oregon judgment did that, in the sense that it identified and distributed the same assets that were in issue in the New Zealand proceeding.
[26]At [30].
[27]SHC Corporation v O’Brien (1991) 3 PRNZ 1 (HC) at 17.
However, we need not decide that issue finally, since we have agreed with the Judge that the judgment was procured by the husband’s fraud, and so cannot found an estoppel.
Costs in the High Court
The husband also appealed against Asher J’s decision to grant increased costs because of various matters relating to discovery in the High Court.[28] Mr Hooker contended that Asher J was wrong to consider the husband had seriously breached his discovery obligations, and in particular that he was wrongly blamed for not disclosing details of trusts he had unilaterally transferred relationship property into but which he had no legal or beneficial interest in.
[28]HC Final Judgment, above n 3, at [53].
This complaint can be dismissed shortly, as in our view Asher J was completely correct to characterise the husband’s compliance with his discovery obligations as a series of “serial failures”.[29] Tailored discovery was ordered in the Family Court in September 2013, and as Asher J noted it was not until May 2015 that some attempt was made by the husband to comply. The process following that point in May 2015 resulted in multiple minutes and teleconferences in the High Court attempting to conclude that discovery, and that process clearly justified increased costs. Further, Asher J was entirely justified in rejecting the husband’s implausible suggestion he had no ability to obtain documents from the trusts; he had sent the money to them and one of the trustees was his mother who he was clearly in close contact with.[30] These matters clearly justify increased costs under the High Court Rules and we are not persuaded Asher J was wrong to impose them.[31]
Decision
[29]At [50].
[30]At [52].
[31]High Court Rules, r 14.6(3)(b).
The appeal is dismissed. The husband must pay costs as for a standard appeal on a band A basis and usual disbursements.
Solicitors:
Vallant Hooker & Partners, Auckland for Appellant
Martelli McKegg, Auckland for Respondent
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