Lobb v Ryan
[2021] NZCA 425
•31 August 2021 at 3.30 pm
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA277/2020 [2021] NZCA 425 |
| BETWEEN | STUART JAMES LOBB |
| AND | VERENA COLLEEN RYAN |
| Court: | Miller and Cooper JJ |
Counsel: | MRT Colthart for Applicant |
Judgment: | 31 August 2021 at 3.30 pm |
JUDGMENT OF THE COURT
AThe application for an extension of time for leave to appeal the refusal to make occupation and ancillary orders is declined.
B The application for leave to appeal the refusal to make maintenance orders is declined.
CThe applicant must pay costs for a standard application, with disbursements on both applications, for a standard application on a band A basis.
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REASONS OF THE COURT
(Given by Miller J)
This judgment responds to two applications for leave to appeal.
The judgments under appeal
On 28 June 2019, Judge Burns dismissed two applications by Mr Lobb. He declined Mr Lobb’s application for occupation of an Orakei Rd property and ancillary orders for lack of jurisdiction under the Property (Relationships) Act 1976 (the PRA).[1] In this application Mr Lobb also requested that the Court amend a Westpac home loan agreement for oppression, but this was declined for want of jurisdiction under the Credit Contracts and Consumer Finance Act 2003 (the CCCFA).[2]
[1]Lobb v Ryan [2019] NZFC 5249 [Occupation judgment]. The ancillary orders sought were: a furniture order, an order requiring Ms Ryan to contribute toward the parties’ joint debts, and an order requiring Ms Ryan return the appellant’s financial and personal documents and records.
[2]At [8].
Judge Burns also declined Mr Lobb’s further application for spousal maintenance under the Family Proceedings Act 1980 (FPA) primarily on the basis that Mr Lobb earns sufficient income and Ms Ryan could not afford it.[3] In that judgment he also commented that Mr Lobb had chosen the wrong jurisdiction in applying for maintenance under the FPA when he really sought contributions to alleged relationship liabilities (relevant under the PRA).[4]
[3]Lobb v Ryan [2019] NZFC 5254 [Maintenance judgment].
[4]At [9].
On 30 April 2020 in the High Court at Auckland, Powell J dismissed Mr Lobb’s appeal against the two judgments of Judge Burns.[5] He held that although the basis on which the Family Court found it had no jurisdiction to make an occupation order was erroneous, that Court did lack jurisdiction to make the order under the PRA because the Orakei Rd property (owned by a trust) was not prima facie relationship property.[6] There was similarly no jurisdiction to make the ancillary orders sought (for various furniture and payments from Ms Ryan) because they necessarily attached to the making of an occupation order.[7] In obiter the Judge also said he would have declined to make an occupation order even if there had been jurisdiction.[8]
[5]Lobb v Ryan [2020] NZHC 834 [Occupation and maintenance appeal].
[6]At [27]–[31].
[7]At [32].
[8]At [33].
Powell J further held that the Family Court indeed lacked jurisdiction to reopen the Westpac loan contract under the CCCFA and could not have done so in any event as Westpac was not a party to the proceeding.[9]
[9]At [38]–[41].
In respect of maintenance, Powell J stated that it was clear Mr Lobb was using an application for spousal maintenance to reside at the Orakei Rd property.[10] The application sought money well beyond that needed to meet Mr Lobb’s reasonable needs,[11] there was insufficient information before the Court to be satisfied Mr Lobb is unable to meet his reasonable needs,[12] and, in any event, none of the circumstances set out in s 63(2) of the FPA had been proved.[13]
Further appeal to this Court
[10]At [50].
[11]At [53].
[12]At [60].
[13]At [65].
An appeal from the High Court under s 174 of the FPA lies by leave of this Court.[14]
[14]Family Proceedings Act 1980, s 174(5).
An appeal against occupation and ancillary orders lies by leave under s 39B of the PRA, which incorporates relevant provisions of the Senior Courts Act. Mr Lobb was required to first seek leave of the High Court. If leave was declined, as it was,[15] he could apply to this Court for leave.
[15]Lobb v Ryan [2020] NZHC 2031 [High Court appeal].
Mr Lobb also sought to appeal the CCCFA decision but that application was not pursued in argument before us and we treat it as abandoned. It was in any event hopeless for the reasons given by the courts below.
Accordingly, we are dealing with two leave applications. The pathways differ but the test for this Court to grant leave is the same. The Court is not engaged in the general correction of error. Rather, its function is to clarify the law and determine whether it has been properly applied by the courts below.[16] Not every error of law is of such importance as to justify further pursuit of litigation which has already been twice considered and ruled upon.[17]
[16]Waller v Hider [1998] 1 NZLR 412 (CA) at 413.
[17]At 413.
Submissions were filed on both sides. We record that we have considered all of them, including a memorandum in reply filed by Mr Colthart, who now represents Mr Lobb, on 25 June 2021.
Extension of time
Mr Lobb, who was self-represented at the time, filed an application for leave to appeal all the orders below in this Court on 25 May 2020. He was within time, or would have been had this Court jurisdiction.
In a minute dated 19 June 2020 Brown J noted that this Court had jurisdiction to hear only the maintenance issue. He advised that Mr Lobb must first apply to the High Court for leave on the occupation order and CCFA issues. If the High Court refused, he could apply here. His appeal in relation to maintenance would be held in abeyance meantime.
Mr Lobb responded to the minute. He applied to the High Court, where Powell J declined leave on 11 August 2020.[18] He did not apply to this Court for leave until prompted by the Court in March 2021. It appears that he thought that he did not need to file a leave application in this Court after the High Court judgment. This was an error. He is now represented, and counsel submits he should be forgiven for this mistake, particularly given the original application to this Court was filed promptly.
[18]High Court appeal, above n 15.
In our view Brown J’s minute was clear. It explained that the application for leave to appeal the maintenance decision was in abeyance and the Court was without jurisdiction with respect to the others. He was required to apply for special leave after leave was refused by Powell J. We recognise that Mr Lobb represented himself, but he is clearly well capable of doing so. He had no difficulty seeking leave in the High Court after the need to do so was drawn to his attention. If he made an error by not seeking special leave in time it was not a reasonable one in the circumstances. We decline the extension.
We have nonetheless addressed the merits of the leave application below on both the occupation and maintenance grounds.
Spousal maintenance
Mr Lobb submits Powell J erred in his approach to the test for spousal maintenance. Following Z v Z, the Judge ought to have started by assessing what Mr Lobb’s reasonable maintenance costs were, then assessing whether they were met.[19] Instead, the Judge approached the analysis the wrong way around.
[19]Z v Z (No 2) [1997] 2 NZLR 258 (CA) at 293–294.
The respondent says the applicant has failed to indicate the error in Powell J’s argument. She notes the test for maintenance laid down in McQueen v Penn:[20]
[70] The mandatory elements of the court’s enquiry for pre-dissolution maintenance are:
(a)What are the reasonable needs of the applicant?
(b)To what extent, if any, is the applicant unable to meet those needs?
(c)If there is a shortfall between reasonable needs and means, does this arise from one or more of the qualifying circumstances in s 63(2)?
(d)If a shortfall arises the court must have regard to the provisions of s 65. Amongst other things, s 65 refers to the means of both parties, but in a practical way questions in that regard in relation to the applicant are likely already to have been determined. The critical enquiry under s 65 in respect of means concerns the means of the other spouse.
[20]McQueen v Penn [2016] NZHC 699, [2016] NZFLR 795 at [70].
The respondent says that the Judge did follow that approach by assessing whether the figures put forward by the applicant were reasonable expenses. The Judge concluded there was no evidential basis for the claimed expenses.
This appeal does not meet the test for leave. Mr Lobb is incorrect to say the Judge did not consider what his reasonable expenses were before concluding his claimed expenses were unnecessary. The Judge did first assess the reasonableness of Mr Lobb’s expenses by considering whether some of the expense claimed (in particular, expenses to remain at his current residence) were reasonable.[21] He concluded they were not. This was an orthodox approach to assessing spousal maintenance. The appeal does not justify a further hearing in this Court.
Occupation and ancillary orders under the Property (Relationships) Act 1976
[21]Occupation and maintenance appeal, above n 5, at [47] and [51]–[58].
Under s 27 of the PRA, a court may only make an occupation order if the property in question is “relationship property”. In this case, the property over which the applicant seeks a vesting order (23 Orakei Road) is owned by a trust. Neither party claims 23 Orakei Road itself is relationship property. The applicant and respondents are both discretionary beneficiaries of the Trust. They are also two of the three trustees. By resolution dated 17 June 2005, the trustees permitted the applicant and respondent to reside at 23 Orakei Road in their capacity as discretionary beneficiaries.
Mr Lobb says their right to reside at the property is a property right which can be relationship property. He says the Judge was wrong to conclude there was no jurisdiction to make an occupation order and wrong to focus on the fact that the right to occupy was given to the parties in their capacity as discretionary beneficiaries. What matters is that the right to occupy had vested. He says the right is in fact fully vested and irrevocable because he is one of the trustees whose vote would be required to remove his occupation right and he would never deprive himself of that right.
Ms Ryan says the right to occupy 23 Orakei Road remains discretionary because it can be altered by the trustees at any time.
The conventional view is that a discretionary beneficiary has no legal or equitable in interest in the assets of a trust until the trustees have exercised their discretion in favour of the particular beneficiary.[22] In this case the trustees are able to remove the right for the discretionary beneficiaries to live at the property at any time. This suggests that the right has not fully vested in Mr Lobb. Since the right of occupation needs to be ongoing, it is different to a discretionary beneficiary receiving something one-off, such as a payment from the trust.
[22]Nation v Nation [2005] 3 NZLR 46 (CA) at [74], citing Hunt v Muollo [2003] 2 NZLR 322 (CA) and Johns v Johns [2004] 3 NZLR 202 (CA).
We accept that in reality, both Mr Lobb and Ms Ryan as trustees would have to make a unanimous decision to remove their own rights of occupation. We add that it has been argued that a resolution giving the beneficiaries exclusive rights to possess the home (provided that right has not come to an irreversible end) is sufficient for the Court to have jurisdiction under s 27.[23] This is a question of law that might warrant leave in an appropriate case.
[23]Nicola Peart “Occupation Orders under the PRA” [2011] NZLJ 356 at 358 and 359.
However, the outcome in this case does not rest on the answer to that question of law. Powell J concluded that even if there were jurisdiction to make an occupation order, he still would have declined to do so in this case for two reasons: the order would be unnecessary given Mr Lobb is currently residing at 23 Orakei Road (and his right to do so is undisputed by Ms Ryan); and he preferred not to make orders that would interfere with other decision‑makers and proceedings.[24] Mr Lobb has not made any submissions disputing those findings, which we consider plainly available. Both courts below concluded that he was making tactical use of maintenance and occupation orders to advance his position in a relationship property dispute.[25] (In fairness, it should be said that it seems Ms Ryan was behaving in similar manner.) We think the prospects of ultimate success are so low as to not warrant leave.
Disposition
[24]Maintenance and occupation appeal, above n 5, at [33].
[25]Maintenance and occupation appeal, above n 5, at [50]; and Occupation judgment, above n 1, at [14].
We decline to grant an extension of time to apply for leave to appeal the occupation and ancillary orders. Leave to appeal the maintenance orders is declined. Mr Lobb must pay costs, with disbursements on both applications, for a standard application on a band A basis.
Solicitors:
Grant & Co, Auckland for Applicant
Vodanovich Law, Auckland for Respondent
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