Kake v Napier
[2022] NZHC 2395
•19 September 2022
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV 2022-404-872
[2022] NZHC 2395
UNDER Part 9 of the District Courts Act 2016 IN THE MATTER OF
an appeal against a decision of the District Court at Manukau
BETWEEN
JANE SARAH KAKE
Appellant
AND
ROSS WAYNE NAPIER
Respondent
Hearing: 31 August 2022 Appearances:
J T Burley and K L Chiu for the appellant C J Pendleton for the respondent
Judgment:
19 September 2022
JUDGMENT OF CAMPBELL J
This judgment was delivered by me on 19 September 2022 at 11.00 am pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar
KAKE v NAPIER [2022] NZHC 2395 [19 September 2022]
Introduction
[1] Jane Kake sued Ross Napier in the District Court. She alleged Mr Napier had breached an oral contract for building work he carried out on Ms Kake’s property. Mr Napier filed an appearance objecting to the jurisdiction of the District Court to hear and determine the proceeding. He said the proceeding had to be determined in the Family Court. Ms Kake then applied to set aside Mr Napier’s appearance.
[2] On 11 May 2022, Judge J H Lovell-Smith found that Ms Kake’s claim fell for determination under the Property (Relationships) Act 1976 (the PRA) and so the Family Court had exclusive jurisdiction over it. Her Honour dismissed the claim in the District Court for want of jurisdiction.1
[3]Ms Kake appeals.
Background
[4] Ms Kake and Mr Napier met in 2008. In February 2009, Mr Napier proposed marriage to Ms Kake. She accepted. However, the proposal was made public only in 2011 or 2012.
[5] Ms Kake owned a property in Māngere Bridge. She had purchased it in 2005. From 2012–2015, Mr Napier carried out building work on the property.
[6] Ms Kake and Mr Napier married in December 2016. They separated in October 2017.
[7] In July 2021, Ms Kake claimed against Mr Napier in the District Court. She claimed there was an oral contract between them governing the building work on the property. She said Mr Napier had breached that contract by overcharging her.
[8] As part of the background to the claim, Ms Kake said that from around 4 May 2010 until 5 December 2011, she loaned various sums of money totalling $9,317.11 to Mr Napier. In lieu of repayment, the parties agreed that Mr Napier would carry out
1 Kake v Napier [2022] NZDC 8408.
building work on the Māngere Bridge property. The cost of his labour would be set off against the loans already made and loans that would continue to be advanced to Mr Napier.
[9] Mr Napier objected to the District Court’s jurisdiction to hear and determine the claim. He said that the arrangement with Ms Kake was properly characterised as contributions made as part of a de facto relationship, which had begun when they became engaged in 2009. He said the dispute therefore had to be addressed pursuant to the provisions and principles of the PRA and was within the exclusive jurisdiction of the Family Court.
[10] Ms Kake applied to set aside Mr Napier’s appearance. She argued that her claim was not under the PRA and so the District Court possessed jurisdiction.
District Court judgment
[11] The parties agreed that Ms Kake’s application could be determined on the papers. They filed substantial affidavits in support of their respective positions. They also filed lengthy and detailed written submissions. The main focus of this material was on how long the parties had been in a de facto relationship before their marriage.
[12] In her decision, Judge Lovell-Smith referred to s 11(1)(e) of the Family Court Act 1980. This paragraph provides that the Family Court must hear and determine all proceedings “under or by virtue of” the PRA. She said the Family Court clearly had exclusive jurisdiction over matters “involving” the PRA and that the District Court was entirely barred from hearing a claim under that Act. That was reinforced by s 4 of the PRA, which established that the PRA was a code in respect of “transactions between … partners in respect of property”, unless the partners had lived in a de facto relationship for less than three years. Accordingly, she said, if the matter fell to be determined under the PRA, she was required to refuse to exercise jurisdiction.2
[13] The Judge said she was required to determine two issues. First, had the parties lived in a de facto relationship for at least three years (a qualifying relationship)?
2 At [13]–[14].
Secondly, was the transaction relating to the building work a “transaction in respect of property” (in terms of s 4 of the PRA)? The Judge said that if the answer to both issues was “yes”, she had to dismiss Ms Kake’s claim for want of jurisdiction.3
[14] On the first issue, the Judge found the parties shared a strong degree of mutual commitment to a shared life. They were engaged to be married, demonstrating mutual emotional commitment. The couple’s financial arrangements disclosed a significant degree of financial interdependence. Both parties accepted there was some cohabitation in 2010, and again from 2013–2015. The pair holidayed and went on trips together.4
[15] Viewed objectively and in its totality, the substance of the parties’ relationship was more than mere friendship. The Judge concluded that they were in a de facto relationship from at least when the proposal of marriage was made public in 2011 or 2012. Ms Kake and Mr Napier had therefore been in a qualifying relationship.5
[16] On the second issue, the Judge took the view that s 4’s reference to a “transaction in respect of property” was broad and inclusive. Mr Napier’s engagement to carry out work on the property was a “transaction in respect of property”.6
[17] Having reached those two conclusions, her Honour found that Ms Kake’s claim was within the jurisdiction of the Family Court. She therefore dismissed the claim in the District Court for want of jurisdiction.7
Ms Kake’s appeal
[18] Ms Kake accepts that the Family Court has exclusive jurisdiction to hear proceedings under the PRA. But she says her claim against Mr Napier is not under the PRA. It is a claim for breach of contract, not a claim for division of relationship
3 At [17].
4 At [18]–[21].
5 At [23].
6 At [24].
7 At [25]–[26], referring to Zhou v Qian [2014] NZHC 1662 at [12]; and Houston-Quay v Henson
[2013] NZHC 294.
property. She says that being in a qualifying relationship does not mean that the PRA is engaged for all dealings and disputes between the parties to that relationship.
Issue on appeal
[19] As noted earlier, in the District Court the parties’ main focus was on whether they had been in a qualifying relationship. That remained a significant focus in the written submissions on the appeal. At the hearing of the appeal, however, I suggested to Mr Burley, counsel for Ms Kake, that it was not necessary for me to determine whether the parties had been in a qualifying relationship for more than three years. Mr Burley accepted that. He said that Ms Kake’s position was that, even if the parties had been in a qualifying relationship, her claim was not within the exclusive jurisdiction of the Family Court.
[20] I will therefore assume (without deciding) that the Judge was correct to find that the parties were in a qualifying relationship. The sole issue that I have to decide is whether Ms Kake’s claim is within the exclusive jurisdiction of the Family Court.
Is Ms Kake’s claim within the exclusive jurisdiction of the Family Court?
[21] Section 22 of the PRA provides that “[e]very application under this Act” must be heard and determined in the Family Court. This provision is given further effect in s 11 of the Family Court Act, which provides that the Family Court must hear and determine all proceedings “that are to be heard and determined by the court under or by virtue of any of the provisions of” the PRA. It follows that the District Court has no jurisdiction over any application under the PRA.8
[22] The Family Court therefore has exclusive jurisdiction over applications under the PRA. Clearly, though, this does not mean that the Family Court has exclusive jurisdiction over every type of civil proceeding between spouses or partners. Nor does it mean that the Family Court has exclusive jurisdiction over every proceeding in which the PRA may have some application. There is a long line of authorities,
8 See, further, District Court Act 2016, s 78(1)(d).
beginning with Jew v Jew, to the effect that the exclusive jurisdiction of the Family Court obtains only where a party has applied for orders under the Act.9
[23] The PRA allows applications to be brought for a range of orders. The orders are primarily to do with determining the respective shares of each spouse or partner in relationship property and dividing that property.10 It is unnecessary to describe all the other orders that may be sought under the PRA. It suffices to say that, in her claim against Mr Napier, Ms Kake does not apply (in form or substance) for any order under the PRA. She merely claims damages for Mr Napier’s alleged breach of a building contract. This is not a claim that is, or could be, made by way of an application under the PRA.11
[24] Because Ms Kake’s claim is not an application under the PRA, the Family Court does not have exclusive jurisdiction over it. The District Court does have jurisdiction.
[25] Judge Lovell-Smith found otherwise, saying that the Family Court has exclusive jurisdiction over matters “involving” the PRA. Regrettably, the Judge was not referred to the line of authorities that confirm that the Family Court has exclusive jurisdiction only over applications under the PRA.
[26] The Judge also relied on s 4 of the PRA, saying that it reinforced that the Family Court has exclusive jurisdiction over matters involving the PRA. I respectfully disagree. Section 4 deals with substantive law, not with jurisdiction. Section 4(1) states that the PRA applies instead of the rules and presumptions of the common law and equity to the extent that they apply to (among other things) “transactions between spouses or partners in respect of property”. Section 4(4) then states:
Where, in proceedings that are not proceedings under this Act, any question relating to relationship property arises between spouses or partners, or
9 Jew v Jew [2003] 1 NZLR 708 (HC) at [41]. See also AB v EF [2012] NZFLR 661 (HC) at [31] and [36]–[43]; Lai v Huang [2016] NZHC 2828; and Minister of Education v McCartney [2017] NZHC 47 at [14]–[21].
10 Property (Relationships) Act 1976 [PRA], s 25.
11 Ms Kake could, alternatively, frame her claim as one in debt (on the basis that, if Mr Napier had charged her in accordance with the contract, he would still owe her money). Such a claim would also be unable to be made by way of an application under the PRA.
between either or both of them and any other person, the question must be decided as if it had been raised in proceedings under this Act.
[27] This provision contemplates that proceedings raising questions relating to relationship property may be commenced and determined in courts other than the Family Court.12 So long as the proceeding is not an application under the PRA, that other court will have jurisdiction, but will have to determine the question as if it had been raised in a proceeding under the PRA.13 In fairness to the Judge, the authorities confirming that this is the effect of s 4(4) were not cited to her.
[28] It follows that, contrary to the Judge’s analysis, jurisdiction did not turn on whether the engagement of Mr Napier to carry out the building work was a “transaction … in respect of property”. Undoubtedly, Mr Napier’s engagement was a transaction in respect of property. That means that the substantive rules of the PRA may have to be applied by the court hearing Ms Kake’s claim,14 but it does not mean that the Family Court had exclusive (or any) jurisdiction over her claim.
[29] Ms Pendleton, counsel for Mr Napier, submitted that Mr Napier’s work on Ms Kake’s property had increased its value and that that increase was relationship property. She submitted that Ms Kake’s claim against Mr Napier was intertwined with Mr Napier’s claim (yet to be advanced) in respect of that increase in value, and that it was more appropriate that both issues were dealt with in the Family Court.
[30] I accept that if Mr Napier brought such a claim it would be within the exclusive jurisdiction of the Family Court. But the possibility of such a claim, or even the bringing of such a claim (whether by way of counterclaim or otherwise), would not convert Ms Kake’s claim for breach of contract into an application under the PRA, and so would not detract from the District Court’s jurisdiction over her claim.
[31] For these reasons, I conclude that the Judge should not have dismissed Ms Kake’s claim for want of jurisdiction.
12 Palmer v Official Assignee [2011] 1 NZLR 846 (HC).
13 Sloan v Cox [2004] NZFLR 777 (HC) at [40].
14 I say “may” because it is not obvious that any of the substantive rules in the PRA have any bearing on Ms Kake’s claim for breach of contract.
Result
[32]I allow Ms Kake’s appeal. I set aside the Judge’s dismissal of Ms Kake’s claim.
[33]Ms Kake is entitled to costs on the appeal.
Campbell J
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