Koni v Koni HC Auckland CIV 2009-404-7772

[2010] NZHC 811

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2009-404-007772

BETWEEN  DAVID WALTER KONI Appellant

ANDLYNNE ANNE KONI Respondent

Hearing:         14 April 2010

Appearances: S R Jefferson for Applicant

A P Goodwin for Respondent

Judgment:      16 April 2010 at 3:30 pm

RESERVED JUDGMENT OF COURTNEY J

This judgment was delivered by Justice Courtney on 16 April 2010 at 3:30 pm

pursuant to R 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date………………………

Solicitors:           Haigh Lyon, P O Box 119, Auckland 1140

Fax: [phone]
Corban Revell, P O Box 21180, Waitakere City 0650

Fax: [phone] – A Goodwin

KONI V KONI HC AK CIV-2009-404-007772  16 April 2010

[1]      The appellant, Mr Koni, has applied for leave to adduce further evidence in his appeal against a decision of the Family Court dealing with relationship property and post-separation contributions.   The parties had previously indicated that determination of this application would also determine the appeal.  It was clear from an early stage in the hearing that the application would succeed, at least in part.  I have, therefore, with the agreement of counsel, determined both the application and the appeal.

[2]      Mr Koni was unrepresented in the Family Court.  Judge A J Fitzgerald made a number of findings adverse to Mr  Koni because there was  no or insufficient evidence to support his assertions.  It is undisputed that the evidence Mr Koni now seeks to adduce was always available to him.  However, Mr Koni claims that he did not fully understand the need to put it before the Family Court and that a refusal to permit him to adduce the evidence now will result in serious injustice.   Mrs Koni opposes the application on the basis that at various judicial conferences prior to the Family Court hearing it was made abundantly clear to Mr Koni that he would need to produce evidence to support the assertions that he was making.

[3]      Mr Jefferson, for Mr Koni, candidly acknowledged that Mr Koni has been the author of his own misfortune to a significant extent.  Through his decision to manage the litigation himself, he failed to understand or appreciate what was required to substantiate his claims.  This failing is surprising given that Mr Koni is a chartered accountant but Mr Jefferson submitted that if Mr Koni were forced to live with the results of his error a serious injustice would result.

[4]      Mr  Goodwin,  for  Mrs  Koni,  responsibly acknowledged  that  it  would  be difficult, at least in relation to one aspect of the evidence proposed to be adduced, to deny that a serious injustice could result if the evidence were not to be considered. However, he emphasised the fact that these parties have now been separated for ten years and that Mrs Koni was entitled to certainty, having done everything she could to resolve matters in the Family Court.  Mr Goodwin also pointed out that Mr Koni himself was very particular about requiring documentary evidence from Mrs Koni to

support any claims she made for post-separation contributions so there is some irony in his seeking an indulgence in relation to his own failing to do likewise.

Relevant principles

[5]      Rule 20.16 High Court Rules permits a party to an appeal to adduce further evidence with the leave of the Court.  Other than where the evidence is necessary to determine an interlocutory application relating to the appeal, the court may grant leave “only if there are special reasons for hearing the evidence”.  However, there is wider power in the case of an appeal from the Family Court under s 39B(3) Property (Relationships) Act 1976 (PRA) which permits  the High Court or the Court of Appeal  to  receive  further  evidence  “if  it  thinks  that  the  interests  of  justice  so require”.

[6]      The  interface  between  the  predecessor  to  r  20.16  and  s  39B(3)  PRA  is described by the Court of Appeal in Nation v Nation:[1]

[1] [2005] 3 NZLR 46; see also Allen v Allen [20007] NZCA 555

[165]    The Court has power under s 39B(3) of the PRA to receive further evidence if it thinks that the interests of justice require it to do so.   This Court described the power under s 39B(3) as wider than the discretion to allow further evidence under the (now) r 24 of the Court of Appeal (Civil) Rules in Castle v Castle [1980] 1 NZLR 14 at 17. But in the same case, this Court said it would be wrong to allow an appellant (or presumably any party to an appeal) to bolster his or her case with additional evidence that was available at the lower court hearing but not adduced because of the particular view of the case being taken at that time.

[166]    In this case, the new evidence would be evidence that was available at the Family Court hearing. It would inevitably be used to bolster the case of one or other party.  The evidence may itself be contentious, leading to the need for reply evidence (and possibly cross-examination).    Further submissions on the new evidence, possibly necessitating a further hearing would be required.  There would be a real danger of triggering a substantial re-litigation of issues in the context of the second appeal.

The Family Court decision

[7]      Mr and Mrs Koni separated in 2000.  At that stage there was an agreement reached between them regarding the occupation and sale of the relationship home. However, no further proceedings were brought to determine other aspects of relationship property until late 2006.   Matters then proceeded slowly through the Family Court.  An agreement reached at a settlement conference regarding work to be undertaken to the property to ready it for sale broke down.   In late 2007 the parties  returned  to  court  with  a view  to providing a timetable for  the filing of affidavit evidence and identification of issues for resolution.

[8]      Initially Mr Koni was represented but his counsel was unable to continue dealing with the matter because of ill-health.  He engaged different counsel who was subsequently appointed to the Family Court bench.  Mr Koni was referred to a third lawyer but says that by that stage he felt that only he could do justice to his case. The result was that by early 2008 Mr Koni was managing the litigation himself.

[9]      As one might expect after so many years there were numerous items of property, chattels and post-separation payments in dispute.  The major issues were the status of a parcel of shares in Dorchester Pacific Ltd, an apartment in Waterloo Quadrant and post-separation contributions by the parties.   These issues were identified at the judicial conference in March 2008 and it was made clear to Mr Koni that full details regarding the shares and the apartment had to be provided.

[10]     Mr Koni filed ten affidavits in the proceedings but it seemed common ground that these affidavits did not deal adequately with the issues.  In particular, Mr Koni failed to provide the necessary documentary evidence to support his assertions.  As a result, the Judge was left to try and deal with the issues that had been identified without the benefit of adequate evidence.   Unsurprisingly the Judge found against Mr Koni in respect of these various issues and there is no criticism of him for doing so.  Mr Koni wishes to adduce evidence, mainly documentary, to address these major items and also some of the less significant items of property and post-separation contributions.

[11]     The issue of the Dorchester shares and the apartment at Waterloo Quadrant are linked.  It was common ground that at the time of separation Mr and Mrs Koni owned a substantial parcel of Dorchester shares which were subsequently sold.  In an affidavit sworn in early 2008 Mrs Koni expressed the belief that the apartment may have been purchased in part with the proceeds of the sale of Dorchester shares.  She also identified an entity referred to as “the Redpath Trust” which could be relevant to the acquisition of the apartment.   Astoundingly, in light of the evidence he now wishes to adduce, Mr Koni responded to these issues with a bare denial that the apartment was relationship property and asserting only that it was purchased with non-relationship property.  In none of his ten affidavits did he make any mention of the Redpath Trust.  At the hearing Mr Koni claimed that the purchase price of the apartment of $379,000 was funded entirely from his own money, including $14,000 from his mother’s estate and a mortgage from the ASB of $240,000.

[12]     The Judge found on the evidence that at the time of separation Mr and Mrs Koni had owned Dorchester shares which were sold progressively between the date of separation and April 2006.  Approximately $375,000 was realised from the sale of the  shares.    The  Judge  found  that  about  $250,000  had  been  used,  as  Mr  Koni claimed, to meet mortgage payments on the family home.   The balance of about

$125,000 was used, the Judge inferred, to purchase the apartment in Waterloo Quadrant (which had since been sold).   The result was a finding that relationship property in the form of the Dorchester shares was used to partly fund the purchase of the apartment.  The Judge ordered that the nett proceeds of the sale of the apartment be shared equally:

[73]      Although Mr Koni claims to have acquired further Dorchester shares after separation, he has provided no evidence to support the claim, despite the fact that this was identified as an important issue pre-trial.  Indeed, when the issue was before the Court on 18 June 2008 the Court recorded the need for Mr Koni to provide sufficient documentation to clarify this issue.   Mr Koni has not done so.  In particular, there is no evidence to show that any post-separation shares Mr Koni might have acquired were sold and used in the purchase of Waterloo Quadrant.  Therefore the only Dorchester shares of which there is any evidence are those which are relationship property…

[74]     …The inference I draw is that the proceeds of the sale of the relationship property Dorchester shares were used to purchase the apartment and I find that to be so.

[75]      Mr Koni’s evidence at the hearing was that he sold the apartment “a year or so ago” but he cannot recall what he got for it.  He thought it was about $10,000 more than he paid for it.  His evidence in this respect (that he could not recall what the apartment sold for) was implausible and unsatisfactory.

[76]      Mr Koni is to provide documentary proof to Mrs Koni at her address for service of the details of sale of the apartment within 14 days.  The nett proceeds of sale which are relationship property are to be shared equally.

[13]     In his affidavit filed in support of the application for leave to adduce evidence Mr Koni has deposed to settling a trust known as the Redpath Trust in April 1999, to the purchase by the trustees of the apartment in Waterloo Quadrant in 2006 and the contribution by the trustees to the purchase of $139,000 made up of dividends and sale proceeds of Dorchester shares owned by the trustees and an inheritance from Mr Koni’s mother.   Annexed to his affidavit is a copy of the trust deed for the Redpath Trust, a copy of a title search for the apartment showing the transfer to trustees of the Redpath Trust and dividend statements evidencing ownership of Dorchester shares by the trustees of the Redpath Trust.

[14]     On the face of it, this evidence strongly supports the assertions made by Mr Koni in the Family Court and seriously undermines the conclusion reached by the Judge as to the circumstances in which both the Dorchester shares and the apartment were acquired.  I reiterate that there has been no criticism of the Judge, who was placed in the unenviable position of attempting to make findings without the most basic documentary evidence.  Nevertheless, the striking difference between the position as it appeared to the Family Court Judge and the position as it appears now with the benefit of these documents means that there is a very high risk of serious injustice to Mr Koni if the matter is not determined afresh with the benefit of the documents.  I do not overlook the fact that the evidence was always available to Mr Koni and it was through Mr Koni’s own failings that it was not placed before the Court.  However, the risk of injustice of such magnitude cannot be permitted.  The evidence  relating to  the  Redpath  Trust  and  Dorchester  shares  may therefore be adduced.

Post-separation contributions

[15]     The next significant issue in the Family Court was the extent of respective post-separation contributions.  Both parties sought compensation for post-separation contributions.   Some of Mr Koni’s claims were accepted.   However, three claims totalling approximately $95,000 were rejected for want of any or sufficient evidence. Mr Koni seeks to adduce evidence to support these claims.  Mr Jefferson submitted that in light of the substantial amount involved leave should be granted to adduce evidence in respect of them, even though the evidence was undoubtedly available at the time and even though it is possible that Mr Koni may not succeed to the full extent of his claim even with the evidence.

[16]     Mr Goodwin opposed granting leave to adduce evidence in relation to these post-separation contributions.   His position was that it would involve reviewing years  worth  of  invoices  and,  further,  Mr Koni’s  failure  to  produce  evidence  to support these claims was to be viewed against the fact that he did adduce some evidence to support other claims and was very particular about requiring Mrs Koni to produce invoices for amounts she was claiming.   Further, if post-separation issues were to be re-visited then Mrs Koni would certainly wish to adduce rebuttal evidence and may, in addition, seek to adduce evidence about post-hearing contributions by her towards preparation of the house for sale in the months following the hearing.

[17]     Mr Goodwin’s submission has merit.  However, whilst difficult to accept in a man  of  Mr  Koni’s  education  and  experience,  I am  satisfied  that  Mr  Koni  was labouring under a complete misapprehension of what was required of him.   The amount involved is not insignificant and, if these payments were indeed made then there is a risk of serious injustice.   I allow the application in relation to the items dealt with at [37](h), (i) and (j) of the judgment.

Boat

[18]     The next substantial item in respect of which Mr Koni wishes to adduce evidence is a boat.  This was relationship property and should have been able to be dealt  with  easily.     However,  it  has  generated  a  disproportionate  amount  of

aggravation between the parties because Mrs Koni removed the boat prior to the hearing and refused (and still does) to disclose where it is being stored.

[19]     At the hearing the Judge had before him a 2008 valuation for $40,000.  He ordered that Mr Koni retain the boat and account to Mrs Koni for $20,000.  Mr Koni, however, wishes to have the boat re-valued and to adduce that evidence in the appeal.   Although the issue of re-valuation was raised during the hearing, neither Mr Goodwin nor Mr Jefferson knew whether there had been any request for re- valuation prior to the hearing.  Mr Goodwin submitted that the Judge was entitled to proceed on the basis of a 2008 valuation because in relation to a chattel of this nature, reliance on a one-year-old valuation is not unreasonable.

[20]     There are aspects about the boat that are of concern.  Mrs Koni seems to have had possession of the boat since well before the hearing; at [60] the Judge refers to this issue having been raised at a previous hearing.  She has, however, consistently refused to disclose its whereabouts.  Given the circumstances in which the boat was removed and the ill feeling which has prevailed between the parties for so long, I do not think it is reasonable to impose a year-old valuation on Mr Koni without, at least, independent confirmation that the boat was, at the date of hearing, in the same condition as it was when that valuation was carried out.  If the boat had deteriorated in Mrs Koni’s care it would be unjust to expect Mr Koni to account to her for half of the $40,000 while retaining a boat worth significantly less than the valuation.  For this reason I also will allow Mr Koni to obtain a fresh valuation of the boat and to adduce that as evidence.

Other issues

[21]     In addition to these three major issues Mr Koni wishes to raise other, smaller matters,  such  as  whether  a  ride-on  mower  stored at  the  house  was  relationship property or his separate property.   However, there is a point at which the consequences of Mr Koni’s ill-judged decision to represent himself fall short of injustice.  There have already been substantial judicial resources directed towards the resolution of this case.  The parties have now been separated for ten years.  Mrs Koni is entitled to finality in the litigation process and, with the exception of the boat, the

issues that will be revisited following this application are not of her making.  As a result, I decline to allow any further evidence to be adduced other than on the issues identified above.

Next step

[22]     Counsel were both agreed that if the application for leave to adduce further evidence was allowed, the proper course would be to remit the matter to the Family Court.   Having heard submissions on this issue I also accept that it would not be feasible for this Court to attempt to determine the issues raised on the appeal if the further evidence is to be adduced.  It is highly likely that there will be not only the further evidence from Mr Koni, which is the subject of the application, but also rebuttal evidence from Mrs Koni.  In addition, Mr Jefferson has identified potential legal issues arising under s 44C PRA in relation to the establishment of the Redpath Trust.

[23]     I therefore make the following orders:

a)       The application to adduce further evidence is allowed to the extent of evidence relating to the Dorchester shares and the Waterloo Quadrant apartment, the post-separation contributions dealt with at [37](h), (i) and (j) of the Family Court decision and the boat.

b)Mrs  Koni  is  to  make  the  boat  available  to  Mr  Koni’s  valuer  for inspection within 7 days of being requested to do so.

[24]     Consequent on the outcome of the application to adduce further evidence, the appeal is allowed and the matter remitted to the Family Court for a hearing of the issues in respect of which further evidence is to be adduced.

[25]     I was addressed on the issue of costs in respect of both the application and appeal generally.  As to the appeal, it was agreed that no issue of costs arose because the appeal itself did not require any further steps once the outcome of the application

to adduce further evidence was known.   I accordingly make no costs award in relation to the allowing of the appeal.

[26]     The position is, however, different in relation to the application for leave to adduce  further  evidence.     Although  Mr  Koni  has  succeeded  in  part  on  this application  Mr  Jefferson  responsibly  acknowledged  that  he  could  not  expect  to obtain costs given that the application was necessitated by his own failings.

[27]     Mrs Koni has, likewise, successfully opposed the application in part, though on the significant issues her opposition was unsuccessful.   However, she had reasonable grounds for opposing the application at least in relation to the post- separation contributions.  With the exception of my reservations about the boat, the significant issues in this application are not ones for which she bears any responsibility and after ten years of separation and some four years of litigation she could reasonably have expected to achieve certainty following a defended Family Court hearing.  There will therefore be costs awarded to Mrs Koni on a 2B basis in

respect of the application for leave to adduce further evidence.

P Courtney J