L v L
[2017] NZHC 2529
•17 October 2017
NOTE: PURSUANT TO S 35A OF THE PROPERTY (RELATIONSHIPS) ACT 1976, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B TO 11D OF THE FAMILY COURTS ACT 1980. FOR FURTHER INFORMATION, PLEASE SEE
THE-FAMILY-COURT/LEGISLATION/RESTRICTION-ON-PUBLISHING- JUDGMENTS.
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2017-404-625 [2017] NZHC 2529
BETWEEN L
Appellant
AND
L Respondent
Hearing: 28 September 2017 Appearances:
Appellant in person
D A T Chambers QC and A H H Choi for RespondentJudgment:
17 October 2017
JUDGMENT OF BREWER J
This judgment was delivered by me on 17 October 2017 at 11:45 am pursuant to Rule 11.5 High Court Rules.
Registrar/Deputy Registrar
Solicitors:
Morris Legal (Auckland) for Respondent
L v L [2017] NZHC 2529 [17 October 2017]
Introduction
[1] This is an appeal against a minute of Judge Twaddle in the Family Court dated 10 March 2017 issued in connection with a relationship property dispute. The appeal concerns an alleged refusal by Judge Twaddle to order discovery.
Background
[2] The appellant and respondent married in 1992. Although they had separate personal bank accounts, the parties had joint accounts and enterprises. Eventually, the marriage failed.
[3] The parties are litigating over the division of property. The date of their separation is a key issue. The respondent says the parties separated in July 2008 when she told the appellant the marriage was over and he moved into a separate bedroom. They lived separate lives in the former family home until the respondent moved out in mid-December 2015. The appellant, on the other hand, says the parties separated in mid-December 2015 when the respondent left the family home.
[4] The date of separation is important because it will determine whether property acquired from 2008 to 2015 is separate property or relationship property subject to the Property (Relationships) Act 1976 (“PRA”).
[5] A two-day hearing in the Family Court commencing 30 November 2017 has been scheduled to determine the date of separation and the validity of notices of interest lodged against the titles of two properties.1
[6] In his minute of 10 March 2017, Judge Twaddle made timetabling directions to facilitate the 30 November 2017 hearing. The part of the minute said to be a refusal to order discovery is:
[16] Ms Chubb submitted that there could be discovery issues relevant to evidence which [the appellant] may wish to put before the Court about the separation date which would need to be dealt with before there is any hearing, but I am satisfied that matters relevant to the separation date hearing could be dealt with in oral evidence and that it is not necessary for there to
1 See Property (Relationships) Act 1976, s 42.
be a discovery prior to the hearing. Discovery issues could result in unnecessary delay.
Issues
[7] There are, perhaps, three issues to decide:
(a) Is there jurisdiction under s 39(1)(a) of the PRA to bring an appeal against an interlocutory decision of the Family Court in a proceeding under the PRA?
(b)If so, did Judge Twaddle make an interlocutory decision refusing discovery?
(c) If so, should the appeal be allowed?
Jurisdiction
[8] Section 16 of the Family Court Act 1980 provides:
(1) Subject to subsections (2) to (4), the District Court Act 2016 applies, with any necessary modifications, to the Family Court and Family Court Judges in the same manner and to the same extent as it applies to the District Court and District Court Judges.
(2) Where any of the provisions of this Act conflict with any of the provisions of the District Court Act 2016, the provisions of this Act prevail.
(3) Nothing in sections 24 and 72 of the District Court Act 2016 applies in respect of Family Court Judges or the business of the Family Court.
(4) Nothing in sections 125 to 130 of the District Court Act 2016 applies to the Family Court, Family Court Judges, or the business of the Family Court, except to the extent that an enactment other than that Act provides.
[9] Section 124 of the District Court Act 2016 (“DCA”) therefore applies to the
Family Court. It provides:
(1) This Part applies to a decision of the court, other than a decision of a kind in respect of which an enactment other than this Act—
(a) expressly confers a right of appeal; or
(b) expressly provides that there is no right of appeal.
(2) A party to a proceeding in the District Court may appeal to the High Court against the whole or a part of a decision made by the District Court in or in relation to the proceeding.
[10] Section 39 of the PRA (relevantly) provides:
(1) This subsection applies to a decision of the Family Court or the
District Court, in proceedings under this Act, to—
(a) make or refuse to make an order; or
(b) dismiss the proceedings; or
(c) otherwise finally determine the proceedings.
(2) A party to proceedings in which there is made a decision to which subsection (1) applies, or any other person prejudicially affected by the decision, may appeal to the High Court against the decision.
(3) The High Court Rules 2016 and sections 126 to 130 of the District Court Act 2016, with all necessary modifications, apply to an appeal under subsection (2) as if it were an appeal under section 124 of that Act.
[11] The issue is, therefore, whether para [16] of Judge Twaddle’s minute falls within s 39(1). For it to do so, it must be a decision of the Family Court and it must do one of the three things specified in s 39(1).
[12] It has been contentious whether s 39(1) of the PRA includes a right of appeal against interlocutory and interim orders.
[13] Justice John Hansen considered this section in the context of an appeal against orders for discovery.2 He first noted:
[28] In Crick v McIlraith (supra) Chisholm J determined that no right of appeal from interlocutory orders was granted under s 15 of the Family Protection Act which is couched in the same terms as s 39 of the Property (Relationships) Act. The Judge decided that the words “otherwise finally determine the proceedings” are crucial and make it clear that the right of appeal is confined to orders finally determining the proceedings which do not include interlocutory orders. However, a strike out application is an interlocutory order and it would seem to me must fall within s 39(1)(c) because if it is successful it would finally determine the proceedings.
(Citations omitted)
2 E v E [2005] NZFLR 806 (HC).
[14] The Judge agreed with Chisholm J’s interpretation of the wording of s 39 of the PRA.3 He cited comments by Henry J4 in relation to a prior legislative form of s 39:5
… By use of the words “or has otherwise finally determined or has dismissed any proceedings” the legislation was clearly dealing only with final decisions, and not interlocutory orders. The earlier words “has made or has refused to make an order” must be construed as referring to a final order, and not to an interlocutory or interim order …
[15] Justice John Hansen therefore found that s 72 of the District Courts Act 1947 governed appeals against interlocutory orders from the District Court and the Family Court, not the PRA.6 He further commented:
[41] This may not have been the intent of Parliament, but I consider it is the effect of the legislation. Indeed, there may have been policy reasons why matters under this Act should confer an automatic right of appeal in interlocutory orders. That is because the jurisdiction of the Family Court under this Act is unlimited. If the limited jurisdiction of the District Court in civil proceedings entitles an appeal against interlocutory orders as of right, one would expect the same to follow in the Property (Relationships) Act. However, I accept there is a counter policy argument that such matters should not be bogged down (particularly at the financial lower end of the jurisdiction) with interlocutory appeals. I do not propose to take the policy argument any further because it has not been addressed by counsel. Suffice to say that there are policy arguments both ways in this Act, and the other Acts found in the 2002 amendment to the District Courts Act mentioned by Chisholm J in his decision.
[16] Justice Ronald Young adopted John Hansen J’s reasoning in SMG v EWG.7 I, however, give no weight to this case. The Judge adopted the interpretation without
analysis because the parties did not dispute it.
3 At [31].
4 Foley v Foley [1986] 2 NZLR 400 (HC) at 403.
5 Section 10(1) of the Matrimonial Property Amendment Act (No 2) 1983 amended s 39(1) of the Matrimonial Property Act 1976 to read as follows: “Where a Family Court or District Court has made or had refused to make an order in any proceedings under this Act, or has otherwise finally determined or has dismissed any proceedings under this Act, a party to the proceedings or any other person prejudicially affected may, within 28 days after the making of the order or decision
or within such further time as the Court may allow in accordance with section 73(1) of the
District Courts Act 1947, appeal to the High Court in accordance with the provisions of Part V of that Act (except subsections (1), (3), and (5) of section 71A) and those provisions shall apply accordingly with any necessary modifications.”
6 At [40].
7 SMG v EWG [2007] NZFLR 27 (HC) at [12].
[17] Whether s 39 of the PRA encompasses appeals against interlocutory orders is, of course, an issue of statutory interpretation. As per s 5(1) of the Interpretation Act
1999, the meaning of the enactment must be ascertained from its text and in light of its purpose.
[18] I respectfully disagree with John Hansen J’s view. I see no reason why s 39 of the PRA should be interpreted as only governing appeals against final orders.8
The plain reading of the text does not require that interpretation.
[19] The section confers a general right of appeal and s 39(1)(a) is phrased generally: “make or refuse to make an order”. There is nothing in the text to suggest that s 39(1)(a) cannot capture interlocutory orders. Justice John Hansen focused on the use of the phrase “otherwise finally determine the proceedings” in s 39(1)(c). He was of the view that this indicated the subsection’s scope was only intended to capture final orders. But this is the third limb in the subsection. There are two preceding limbs. I regard the term ‘otherwise’ in s 39(1)(c) as relating to s 39(1)(b), which reads “dismiss the proceedings”. Section 39(1)(c), therefore, captures other types of decisions which determine proceedings, but do not dismiss them.
[20] Further, s 39 is intended to grant parties a right of appeal to the High Court. Treating s 39 as applying only to final decisions results in the awkward situation where parties will have a general right of appeal of interlocutory orders under s 124 of the DCA, but the High Court will have no statutory jurisdiction to deal with the appeal. This is because of the operation of s 16(4) of the Family Court Act, which provides that nothing in ss 125 – 130 of the DCA applies to the Family Court or the business of the Family Court “except to the extent that an enactment other than that Act provides”. If the DCA has to govern this appeal because s 39 of the PRA does not apply, the Family Court Act dictates that both ss 127 (appeals must be by way of rehearing) and 128 (powers of the High Court on an appeal) of the DCA cannot apply. So, although an appellant would be entitled to appeal under s 124 of the
DCA, the Court would have no statutory power to do anything about it.
8 See also Smith v Smith HC Whangarei CIV-2003-488-394, 12 March 2004; Crick v McIlraith
HC Dunedin CIV-2004-412-37, 1 June 2004.
[21] In my view, the better interpretation is that s 39 of the PRA provides jurisdiction to bring an appeal against an interlocutory decision of the Family Court.
[22] This interpretation is consistent also with the evident intent of the Family Court Act in its appeal provisions. The Family Court has a varied jurisdiction prescribed by a number of statutes. So, s 16(4) provides for a right of appeal to the High Court (because it prescribes the application of s 124 of the DCA) and leaves it to the statutes conferring jurisdiction to define the nature and scope of the appeal right. For the PRA, the section that does that is s 39. If s 39 were intended to limit appeals to final decisions then I would expect it to say so, and to block the truncated path of appeal under s 124 of the DCA.
[23] I conclude that there is jurisdiction under s 39(1)(a) of the PRA to bring an appeal against an interlocutory decision of the Family Court in a proceeding under the PRA.
Did Judge Twaddle make an interlocutory decision refusing discovery?
[24] Section 39(1)(a) applies to a decision of the Family Court under the PRA to make or refuse to make an order.
[25] The appellant submits that Judge Twaddle erred in law by dismissing his oral application for discovery and finding that discovery was unnecessary. As I have said at [6] ,the appellant relies on Judge Twaddle’s comment:
[16] Ms Chubb submitted that there could be discovery issues relevant to evidence which [the appellant] may wish to put before the Court about the separation date which would need to be dealt with before there is any hearing, but I am satisfied that matters relevant to the separation date hearing could be dealt with in oral evidence and that it is not necessary for there to be a discovery prior to the hearing. Discovery issues could result in unnecessary delay.
(Emphasis added)
[26] On the other hand, the respondent submits:
1. … There was no application for discovery accompanied by a
supporting affidavit as required by r 141 of the Family Court Rules
2002. Without these documents before it the Family Court had no jurisdiction to make an order for discovery anyway.
[27] I agree with the respondent. The appellant’s submission is misconceived. This was not a decision refusing discovery. The Judge could not have made such a decision. There was no formal application for discovery and supporting affidavit as required by r 141 of the Family Court Rules 2002, a procedure designed to focus scrutiny on what discovery is reasonably necessary. Judge Twaddle did not, therefore, have jurisdiction to make an order for discovery. The Judge was merely expressing his preliminary view on a submission by counsel that there might be discovery issues. There was nothing in what Judge Twaddle said that would have prevented the appellant from making an application in accordance with r 141.
[28] I find there was no decision of the Family Court to be appealed.
The merits of discovery
[29] I am conscious that the hearing of the preliminary issues is imminent and that the appellant could still seek to persuade the Family Court to order discovery. Accordingly, I will say something about the merits of discovery as sought by the appellant for the benefit of the parties and for the consideration of any Family Court Judge before whom the issue might be raised.
[30] The respondent’s case is that although the parties were living in the same household from 2008 to 2015, property acquired during that time period is not subject to the PRA as they had ceased living together as a married couple.9
[31] The appellant takes the opposite position. He submits the parties were living together as a couple as normal during that period.10 The appellant, therefore, submits it is not possible for him to properly and fairly formulate his claim for relationship property without having discovery of the respondent’s bank statements, as well as financial statements of a number of entities they were, or she was, involved in. As
the intermingling of finances is a relevant statutory factor, these documents would, the appellant submits, show the couples’ interdependence financially.11
[32] In contrast, the respondent submits the discovery sought will have no bearing on the issues to be decided at the hearing on 30 November 2017. They will also be irrelevant if she is correct about the separation date. She submits that it is, therefore, unduly onerous and not reasonably necessary to require discovery of the scope and nature sought by the appellant.
Principles
[33] I regard Kós J’s decision in Dixon v Kingsley as the guiding case on discovery in relationship property cases.12 Justice Kós set out the relevant principles as follows:
[20] In my view the following are the essential principles governing discovery in relationship property litigation:
(a) A robust approach should be taken to discovery consistent with the purposes and principles of the Act: the need for just division, but also inexpensive and efficient access to justice.
(b) Such discovery must not be unduly onerous.
(c) Such discovery must be reasonably necessary at the time sought.
(d) The scope of discovery should therefore be tailored to the need of the Court to dispose, justly and efficiently, of relationship property issues under the Act.
(e) More substantial discovery may well be ordered by the Court where it has reason to believe that a party has concealed information or otherwise sought to mislead either the other party or the Court as to the scope of relationship property. But even here, the scope of discovery should be no more than is required for the Court to fairly and justly determine relationship property rights. It is just that in such a situation, more is likely to be required to meet that requirement.
[34] In my view, given the respondent’s concessions as to the intermingling of
finances, and given that the appellant had no legal role in some of the entities
concerned, discovery on the scale sought by the appellant would not be reasonably necessary for the 30 November 2017 hearing. It might be that a more tailored discovery would be appropriate (and I do not express a view on that), but it would have to be clearly aimed at the issues to be adjudicated and reasonably necessary for the just and efficient disposal of them.
Conclusion
[35] The appeal is dismissed.
[36] The respondent is entitled to costs. I fix these on a 2B basis. They may be fixed by the Registrar if the parties cannot agree.
Brewer J
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