Lee v Hermelin-Lee HC Auckland CIV 2010-404-690

[2010] NZHC 1071

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2010-404-000690

BETWEEN  STEVEN ANTHONY LEE Appellant

ANDCHRISTINA HERMELIN-LEE Respondent

Hearing:         24 June 2010

Appearances: S J Tee for Appellant

Judgment:      24 June 2010

ORAL JUDGMENT OF PRIESTLEY J

Counsel:

S J Tee, Morton Tee & co, P O Box 331 133, Takapuna, North Shore City 0740. Fax: [phone]

Email: [email protected]

LEE V HERMELIN-LEE HC AK CIV-2010-404-000690  24 June 2010

The Appeal

[1]      In  a  reserved  judgment,  delivered  in  the  Manukau  Family  Court  on  23

December, Judge Hikaka made various orders relating to spousal and child maintenance.  The orders in question were made in South Africa in August 1994, but registered in New Zealand in 2006.  Registration of foreign maintenance orders can be effected under Part 8 of the Family Proceedings Act 1980.

[2]      The respondent wife was represented by counsel at the Family Court hearing. However, as was apparent at a callover in February in this Court before Cooper J, counsel for the respondent was without instructions.   The respondent is thus unrepresented at this hearing

Background

[3]      It is unnecessary for me to set out much by way of background detail.  The husband was an English national and the wife Swedish.  They emigrated to South Africa in 1985.   They had two children.   Their marriage was dissolved in August

1994.  At that stage various spousal and child maintenance orders were made.  The couple have had an extensive and acrimonious litigation history in South Africa.

[4]      In late 1999 the appellant applied, in South Africa, to discharge the spousal maintenance order.  This application appears to have been withdrawn in May 2002. The husband left South Africa permanently that month, in circumstances which clearly gave rise to some expectation that his maintenance obligations would continue.  However, in June 2002, the husband made his last maintenance payment. None have been made since then.

[5]      The  husband  arrived  in  New  Zealand  in  early  2003.    It  appears  for  a considerable period of time his wife did not know his whereabouts.   Registration, however, was achieved in New Zealand in 2006.  In January 2008 the husband was notified of this registration.

[6]      As the husband was entitled to do, he applied to the Family Court for cancellation of the orders and remission of arrears.  In the alternative there was an application for suspension of the arrears that had accumulated under the child maintenance orders.

The Judge’s decision

[7]      The operative parts of Judge Hikaka’s decision were:

a)        Discharge of the registered spousal maintenance orders.

b)        The discharge of a child maintenance order relating to the parties’

daughter who at the date of the hearing was aged 24 years.

c)        Refusal to discharge the child maintenance order as it related to the parties’ son, aged 19 at the date of the hearing.

d)An  order  to  pay  a  sum  of  money  relating  to  the  son’s  tertiary education.

e)        Dismissal of the application to remit all maintenance arrears.

f)        Orders to pay maintenance arrears in respect of the parties’ daughter and son respectively in the sum of $NZ43,649.40 and $NZ56,301.40.

g)        An  order  to  pay  arrears  of  spousal  maintenance  to  the  sum  of

$NZ58,199.43.

h)Payment of scheduled costs (being expenditure payable in terms of the South African orders) in the sum of $42,591.

[8]      Thus arrears totalled just over NZ$200,000.  The husband, although he had an income from his salary (he now lives in Australia) had very little in the way of assets, probably around 25% of the arrears figure.

[9]     The appeal focuses on the Judge’s refusal to remit arrears of spousal maintenance; the order to pay all child maintenance arrears instead of suspending them and directing payment by instalments; and the scheduled costs of $42,591.16 which appears to be an amalgam of medical and educational expenses and, (as to approximately 20%), air fares for the family to travel to Sweden.

Appellate principles

[10]     Although the appellant is attacking the exercise of a Family Court Judge’s discretion it seems fairly clear from recent authorities that an appellate court can re- exercise the discretion on a fairly broad basis, particularly if it reaches the view that the discretionary exercise was incorrect.  (See generally Austin, Nichols & Co Inc v

Stichting Lodestar;[1] KK v HK.[2])

[1] Austin, Nichols & Co Inc v Stichting Lodestar [2008] 2 NZLR 141, SC

[2] KK v HK HC Auckland CIV-2008-404-6161, 31 July 2009, Keane J.

[11]     It is thus important for me to map briefly the route whereby the Judge arrived at his decision.

[12]     He correctly set out the relevant background.  He referred to ss 142, 99, 62-

66, and in particular s 64A of the Family Proceedings Act 1980.

[13]     In very general terms, registration of a foreign maintenance order subjects that order to the relevant statutory and other principles which apply to New Zealand orders.   It is apparent to me that the Judge was aware of the discrete rules which apply to spousal maintenance orders, and in particular the obligation imposed by s 64A(1) for a spouse to assume responsibility for his or her own needs within a reasonable period of time after dissolution.  That, as the Judge observed, is not an absolute rule and must take into consideration relevant circumstances.   The clean

break principle should not be applied too rigidly (Z v Z (No 2)),[3]

[3] Z v Z (No 2) [1997] 2 NZLR 258, 293 (CA)

[14]     For reasons which are not apparent, the Judge was of the view (at [58] of his judgment) that from 2002 onwards the wife had an “expectation” that the husband would continue to meet his obligations.   He thought the reasonableness of that expectation  would  diminish  over  time.    He then  fixed  on  what  he called  “five discrete times [when] the expectation came into focus” (at [59]).  These were when payments stopped in July 2002; during the four year period when the wife was endeavouring to find the husband; upon registration; when the husband served the application to discharge the orders; and upon the receipt of further evidence.

[15]     I doubt, with respect, whether this analysis really advances matters much.  In particular, when making decisions to discharge, vary or suspend maintenance orders, or deciding whether to remit in whole or in part arrears (s 99(4)(a)), the statute makes it very clear that the maintenance principles embodied in ss 62-66 must apply. The subjective expectation of one party is not such a principle.  On the facts of this case, the Judge needed to focus on what, in all the circumstances, was a reasonable period  of  time  for  the  wife  to  assume  responsibility  for  her  own  needs.    On expiration of that period of time, the liability of the husband would cease (s 64A(1)).

[16]     The Judge then went on to make various findings on the evidence he had heard.  These were:

[65]     I am satisfied that;

a)There is no evidence the respondent and Mr Pentz are in either a personal or business relationship;

b)There is insufficient evidence to support the contention that the respondent should be self-supporting by renting her property in Sweden;

c)        There is no evidence that the respondent has a second property in

Sweden;

d)There is insufficient evidence to support the contention that the respondent is too unwell to obtain gainful employment;

e)On account of the acrimonious relationship and its background, it is not unreasonable for either party to pursue proceedings on this application to hearing;

f)        That hearing should have taken place in August 2009.

g)        It is not reasonable for the respondent to expect the applicant to continue to maintain her.

h)        The spousal maintenance order made in 1994 and registered in New

Zealand 2006 is discharged.

Of particular relevance is the Judge’s finding that it was not reasonable for the wife to expect continued maintenance from the husband.

[17]     The Judge, however, makes no finding about when it would be reasonable for the wife to meet her own needs.  That was the critical focus for me.

[18]  When  dealing  specifically  with  maintenance  arrears,  the  Judge, understandably, [66] – [71] laid heavy emphasis on the appellant’s behaviour in leaving South Africa in June/July 2002 and ceasing to meet his obligations which at that time he had indicated (a reasonable inference from withdrawing his application to discharge orders) he would continue to meet.  The Judge found he did not accept the husband’s reasons for stopping payment.   The Judge also referred to the well established policy that if people are subject to court orders which they want to vary or modify, it is incumbent upon such person to take the appropriate steps.

[19]     The Judge, having articulated these policy matters, made the short comment at [72] that it was appropriate for the husband to pay arrears.

[20]     He also found (at [78]) that he was satisfied the applicant had the means to pay arrears “in the broadest sense”.  That finding is problematic, given the evidence before the judge of the husband’s somewhat parlous capital position.

[21]     Mr  Tee’s  submissions  was  that  although  the  Judge  had  understandably weighed  the  principle  which  obliged  the  husband  to  meet  his  maintenance obligations and to take positive steps (as he had in South Africa) to vary or modify the order if he disagreed with it, this was but one of the various matters the Judge was obliged to weigh.   In particular, submitted Mr Tee, the Judge failed to give effect  to  the  clear  policy  considerations  of  s 64A  which  obliged  a  party  to  a dissolution to become effectively self-supporting within a reasonable period of time.

[22]     When the marriage was dissolved the wife was aged approximately 36.  On the facts of this case the wife had received approximately nine years of spousal maintenance payments post-dissolution, and an entitlement to maintenance for a further six years since maintenance payments had ceased.  In Mr Tee’s submission, under New Zealand law, such a long period of entitlement to spousal maintenance would be most unusual.  Such a situation would be normally limited to cases where the division of the functions inside a marriage, or possibly responsibilities to special- needs children, justified continuation of spousal maintenance for a lengthy period. Section 64A(3) sets out the various matters to which a court should have regard. There is no evidence, submitted Mr Tee, that any of these factors were present for the wife to call into aid.  That submission is correct, and there was no finding of the Judge to the contrary.

[23]   Different considerations, of course, apply to ongoing child maintenance obligations.   In respect of his children, the husband voluntarily assumed, and was ordered to pay, a large range of child maintenance costs.  That obligation effectively would have continued into the tertiary education phase and was, in terms of the orders, to cease when the children were no longer resident with their mother.

[24]     I have reached the clear view, on the facts before me, the Judge, despite his very lengthy and careful judgment, has failed to give adequate weight to the relevant s 64A principles.   I am also satisfied that there are no apparent reasons why he should not have addressed the application for remitting arrears and have given substantial relief in that area.

[25]     I am informed from the Bar (and am assuming that information was before the Judge) that although currently in possession of modest capital, the husband, who now resides in Australia, enjoys an income of approximately NZ$90,000 per annum. He is thus well able to make some contribution towards the costs incurred (both current and historic) for the children and in particular his son.

[26]     I see no basis on which, in terms of New Zealand maintenance principles, the wife could have justified a continuation of spousal maintenance beyond May 2002. Like Judge Hikaka, I share some uneasiness about the arguably deceptive conduct of

the husband in this area who, having given assurances that he would continue his maintenance obligations and withdraw his South African applications, then made no further  payments  and  disappeared  from  the  South  African  scene,  remaining  in contact with his children in only a surreptitious way.   By any stretch of the imagination, this conduct must have been designed to create obstacles for the wife in pursuing him under the South African orders.  I consider the Judge was entitled to weigh this factor, it being a factor which is not excluded or relevant in terms of ss 64(2) and 64A(3).  However, as I have said, it is difficult to see how a balanced approach, weighing all relevant statutory factors, would have justified the result the Judge reached.

[27]     The appeal is therefore allowed and I make the following orders by way of substitution.  Unless expressly modified on this appeal, the orders of Judge Hikaka otherwise remain intact.

a)      All arrears which have accumulated under the registered spousal maintenance order are remitted in terms of s 99(4)(a).

b)The   arrears   which   have   accumulated   in   respect   of   the   child maintenance orders (being $46,649 and $56,301) are suspended, such arrears are to be paid by the appellant at the rate of $125 per week.

c)       The arrears for scheduled costs (referred to in [94] of the judge’s judgment, are similarly suspended.  They are to be paid at the rate of

$50 per week.

[28]      I note that in respect of the still operative child maintenance order relating to the parties’ son, the Judge has ordered monthly payments effective until 15 October

2011.  The appellant has not challenged that order, nor do I interfere with it in any way.

Costs

[29]     No costs issues arise.

.......................................… Priestley J