Johnson v Johnson
[2024] NZHC 1742
•27 June 2024
IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY
I TE KŌTI MATUA O AOTEAROA TE PAPAIOEA ROHE
CIV-2023-454-072
[2024] NZHC 1742
BETWEEN HENRY JOHNSON
Appellant
AND
DONNICE DENISE JOHNSON
Respondent
Hearing: 27 June 2024 Appearances:
G A Paine for Appellant
C S W Leathart for Respondent
Judgment:
27 June 2024
JUDGMENT OF CHURCHMAN J
Introduction
[1] On 25 July 2023, Judge Hickman sitting in the Family Court granted an extension of time under s 24(2) of the Property (Relationships) Act 1976 (PRA) for the respondent to file her relationship property proceedings despite a delay of 18 years.1
[2]The appellant now appeals that decision.
Background
[3] The parties married in 1990 and purchased their family home in Palmerston North in 2000. Their daughter Bronte was born in May 2000. The property was registered in the joint names of the parties, and both parties names were listed on the
1 Johnson v Johnson [2023] NZFC 7452.
JOHNSON v JOHNSON [2024] NZHC 1742 [27 June 2024]
mortgage. The joint ownership was converted to a tenancy in common in November 2020.
[4] The parties separated in November 2002, with the respondent contending that she left the marriage and moved to Amarillo, Texas due to psychological abuse from the appellant. In 2004 their marriage was dissolved by a Texas Court. The appellant asserts he was unaware of the divorce, as he states he was not in a fit psychological state to comprehend the documents.
[5] From 2002 to around 2011, the parties had sporadic correspondence regarding resolution of the joint ownership of the family home.
[6] In November 2020, following advice from her new lawyers, the respondent severed the joint tenancy to the home. Her evidence is that until that point she did not understand the difference between tenants in common and joint tenants and wanted to protect her daughter’s interest in case she predeceased the appellant.
[7] On 16 May 2022, the appellant emailed the respondent asking whether she would agree if he were to set up a family trust. On 22 August 2022, the appellant’s second wife, Ms Sharifi, filed an application in the Family Court seeking orders as to ownership and division of relationship property. The respondent was named as the second respondent in Ms Sharifi’s proceedings.
[8] On 9 October 2022, the respondent filed an affidavit of assets and liabilities and a narrative affidavit in response to the proceedings filed by Ms Sharifi.
[9] On 20 March 2023, the respondent applied for orders in respect of the division of relationship property and for leave to file her application out of time.
District Court Decision
[10] In her decision, the Judge stated that although it had been 18 years since the application for determination of relationship property should have been made, both parties were aware that the issue of their joint ownership of the former matrimonial home still needed to be resolved.
[11] The Judge found that the respondent’s evidence that she had attempted to resolve matters, but the appellant had refused to engage in any constructive discussion around division of the assets was borne out when examining the correspondence between the parties and their solicitors. The Judge also noted the respondent’s statement that she did not pursue her claim between 2011-2020 due to cost, the fact she had remarried, that she was studying towards a Master’s degree in nursing, and that she was involved in a car accident in 2019 from which she required treatment. The Judge consequently found that in the circumstances the delay was not outside the realms of what is reasonable.
[12] The Judge found that it could not be said that the respondent’s claim was entirely without merit, given the fact both parties were joint owners of the home, that she had been equally liable for the mortgage, and the presumption under the PRA for equal sharing of property.
[13] The Judge concluded that the appellant had not pointed to specific prejudice other than his assertion that he understood all property matters were resolved between the parties. She noted he had remained in sole occupation of the family home since separation, and although he had paid rates and mortgage, had not paid occupational rental or any other post separation costs he could have been liable for such as spousal maintenance or child support. The Judge rejected the appellant’s argument that selling the house would deprive his children of somewhere to come and visit him, noting his other evidence suggests he does not have an ongoing relationship with his children. The Judge also rejected the appellant’s evidence that he considered property matters were resolved by the divorce, with the Judge finding this was at odds with other evidence, particularly offers made to the respondent to purchase her share of the home following the divorce.
[14] With regard to the overall interests of justice, the Judge found that if leave is not granted for the respondent to have her application dealt with out of time, there remains the problem of the respondent’s indefeasible title as a tenant in common of the family home to resolve. The Judge also noted resolution of this issue would allow Ms Sharifi to pursue and resolve her own relationship property claim. The Judge found the respondent had discharged her burden of proof to demonstrate factors which
support the Court exercising a discretion to extend the time to make an application for division of relationship property. The Judge held the interests of justice required a speedy remedy for the parties which necessitated the granting of leave to the respondent to bring her proceedings.
Submissions
Appellant’s submissions
[15]Mr Paine for the appellant submits that:
(a)The Judge erred in granting leave to the respondent to file an application under the PRA 18 years out of time.
(b)The Judge failed to place any weight on the respondent having taken no steps to resolve relationship property issues during at least seven years of that period.
(c)The Judge failed to recognise that the respondent thought he had resolved all relationship property matters.
(d)The Judge failed to take into account any prejudice accruing to the appellant on the basis that he had lived in and maintained the home for over 18 years paying all outgoings without any assistance from the respondent.
(e)The Judge confused the onus of proof by adversely commenting on what the appellant may or may not have done rather than focussing on whether the delay was explainable or inexcusable.
(f)In dismissing the respondent’s application, the Judge could not make orders determining the share or division of the property.
(g)The appellant had located some material (not placed before the Court in this appeal) which confirmed the existence of an Amarillo Bank account.
Respondent’s submissions
[16]Ms Leathart for the respondent submits that:
(a)The Judge acknowledged the burden of proof lies on the respondent to demonstrate factors to support the Court exercising a discretion to extend time and correctly found this was discharged, with the question of whether the appellant took steps to resolve the matter being a separate matter with no onus placed on the appellant.
(b)The Judge was correct to conclude that transferring proceedings to the High Court would offend the principle under the PRA that questions arising under the PRA should be resolved as inexpensively, simply and speedily as is consistent with justice.
(c)The Judge was entitled to prefer the evidence of the respondent, particularly with regard to the $10,000 offer by the appellant, and draw conclusions based on the parties’ credibility.
(d)The Judge placed appropriate weight on the appellant’s attempts to resolve relationship property issues balanced against the appellant’s lack of willingness to engage constructively in negotiations and the history of family abuse.
(e)The Judge correctly concluded that the appellant failed to convince the Court that the respondent’s interests in the relationship property should not be realised.
(f)The Judge correctly concluded that by dismissing the leave application, there is no live application and therefore the Court would have no jurisdiction to make orders under s 25 of the PRA.
Approach on appeal
[17] Appeals from determinations under the PRA are governed by s 39 of the PRA, which provides a right of appeal to the High Court for any decision of the Family Court to make or refuse to make an order, dismiss the proceedings, or otherwise finally determine the proceedings. An appeal against a decision concerning whether to grant leave to commence a relationship property proceeding out of time is an appeal against the exercise of discretion.2 Where the decision appealed was from an exercise of discretion, the principles in May v May3 apply. The appellant bears the onus of satisfying the Court that the decision under appeal was wrong, and must demonstrate that:
(a)the Judge made an error of law or principle;
(b)the Judge failed to take relevant considerations into account;
(c)the Judge took irrelevant considerations into account; or
(d)the decision was otherwise plainly wrong.
Analysis
Did the Judge incorrectly place a burden of proof on the appellant?
[18] Mr Paine refers to the Judge’s statement that the appellant had taken “no steps to resolve the dilemma created by joint ownership of the family home which remains unresolved”. He submits that there is no onus on the appellant to take steps, yet the Court was critical of his “failure to engage” which was a ground heavily relied upon by the respondent. Mr Paine further contends that the Judge placed on the appellant an onus to provide details regarding the offer of $10,000 to purchase the respondent’s share in the property.
[19] It is evident from an examination of the judgment that the Judge did not reverse the burden of proof and place an onus on the appellant. When considering the overall
2 Wang v Ma [2019] NZHC 1821 at [7].
3 May v May (1982) 1 NZFLR 165 (CA).
interests of justice, the judge must have regard to all relevant circumstances. It was therefore open to the Judge to consider the fact that the appellant had not taken any steps to resolve the issue of the continuing joint ownership of the property following their divorce. That the Judge did not place an onus on the appellant is clear in the preceding sentence where she states:4
While the burden of proof lies on Ms Johnson to demonstrate factors to support the Court exercising a discretion to extend the time to make an application for division of relationship property, she has done this.
[20] I accept the submission of the respondent that the failure of the appellant to take steps was a separate issue to the onus of proof imposed on the respondent. In respect of the evidence around the $10,000 offer, the Judge did not place an onus of proof on the appellant, but rather found the respondent’s evidence more convincing.
Did the Judge fail to have regard to the terms of the Texas divorce?
[21] Mr Paine submits that the respondent failed to disclose her interest in the property in New Zealand to the Texas Court. He contends that the issue of whether the Texas Court was aware of the New Zealand property when it issued the decree is important, as the appellant believed because of the wording of the decree that the respondent agreed there was no property to be divided, as the statement in the Texas Court and the Amarillo Bank account were “netted off” against each other. It is consequently claimed there is prejudice to the appellant that the Judge failed to adequately consider.
[22] I accept the submission of the respondent that, regardless of whether she disclosed her interest in the New Zealand property, since this was outside the jurisdiction of the Texas Court, it would not have affected the divorce decree. The Judge did consider the appellant’s evidence regarding the Texas matters, including the alleged withdrawal of $11,000 from the Amarillo Bank account, and rejected the appellant’s evidence that he had considered property matters resolved as between the parties. She did not err in doing so.
4 Johnson, above n 1, at [43].
Should the Judge have transferred proceedings to the High Court?
[23] Mr Paine submits that transferring the proceeding to the High Court would be appropriate, as the requirement of a simple, speedy and inexpensive resolution can be easily achieved by an application under the Property Law Act 2007 (PLA). He states that since the respondent’s claim is as a tenant in common, this can be dealt with under the PLA. It is argued that this would be quicker than dealing with the matter in the Family Court, as there are a number of disputed facts that will require evidence from both parties.
[24] As identified by the Judge in her decision, this is not simply a matter of a claim to half the family home as a tenant in common, but is in the context of a relationship, with other matters the appellant may be liable for such as occupational rent. Consequently, a proceeding under the PLA would not be appropriate. The Judge correctly determined that transferring the proceedings to the High Court would incur significant further cost and delay and offend against the principle of an inexpensive, simple and speedy resolution.
Did the Judge err in her findings on the evidence?
[25] In respect of the evidence, Mr Paine submits that there were no details provided on the respondent’s health problems that were relied on to explain the delay, including whether they concern the respondent or their child, and whether this affects the respondent’s ability to work. He states there are no details on the respondent’s financial circumstances, whereas the appellant is said to have completed all necessary affidavits with his financial position “not good”. Mr Paine also submits that the Judge erred in finding the respondent’s claim that the appellant offered $10,000 to purchase her share of the property had a “ring of truth about it” despite no evidence to support it.
[26] It was open to the Judge to find that an adequate explanation for the delay was made out on the evidence provided. In Ritchie v Ritchie5 the Court found far fewer substantial reasons for delay, namely that both parties were content with the situation
5 Ritchie v Ritchie [1992] NZFLR 266 at 7–9.
until recently, to be sufficient for leave to be granted. I accept the submissions of the respondent that the fact the respondent has not filed an affidavit of assets and liabilities is irrelevant to the issue of whether leave should be granted. The fact the appellant has filed such an affidavit and the respondent has not does not mean there is prejudice to the respondent, and as noted, such an affidavit has been filed in Ms Sharifi’s proceedings and has been provided to the appellant.
[27] With regard to the factual findings on the $10,000 offer, the Judge considered the surrounding circumstances of the appellant’s trip to America to see the respondent after he found out about the divorce, and concluded these supported a $10,000 offer occurring. It was open to the Judge to make such a finding, particularly as no other evidence was available given this offer was said to be made orally. In any event, this finding was not determinative of the application, as it was merely one of a number of factors considered by the Judge in declining to accept the appellant’s evidence that he had considered the property matters resolved by the divorce.
[28] The Judge correctly determined that granting leave to appeal out of time was necessary to allow this relationship property matter to finally be resolved, and that declining to do so would prevent the respondent from realising her interest in the property. The Judge was right to find the respondent’s claim had merit, and that any prejudice to the appellant was insufficient to prevent the application for leave being granted. PRA proceedings in the Family Court are a more appropriate way of resolving the present issues than PLA proceedings in the High Court.
Conclusion
[29] The appellant has failed to demonstrate that the Judge erred in law or principle, failed to take relevant considerations into account, took irrelevant considerations into account, or came to a decision that was otherwise plainly wrong.
[30]The appeal is dismissed.
[31] I invite the parties to settle costs, but if that is not possible within 14 days, the respondent is to file a memorandum of no greater than three pages in length with the
appellant to file a similar memorandum in reply no later than seven days after service of the respondent’s memorandum. Costs will then be determined on the papers.
Churchman J
Solicitors:
Brittens, Palmerston North for Appellant J B Morrison, Wellington for Respondent