Loe v Hala
[2024] NZHC 3173
•30 October 2024
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2024-404-1595
[2024] NZHC 3173
UNDER the Property (Relationships) Act 1976 IN THE MATTER
of an appeal against a decision of the Family Court at Manukau
BETWEEN
WESLEY LOE and JOHN LOE as executors and trustees of the ESTATE OF
CATHERINE LANG
AppellantsAND
NEWWEI HALA
Respondent
Hearing: 17 October 2024 Appearances:
J E McLennan for the Appellants
S Chandra and Y Tan for the Respondent
Judgment:
30 October 2024
JUDGMENT OF BLANCHARD J
This judgment was delivered by me on Wednesday, 30 October 2024 at 3.30 pm pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar
Solicitors: Holmden Horrocks, Auckland
Turner Hopkins Solicitors (Y Tan), Auckland
Counsel: S Chandra, Auckland
LOE v HALA [2024] NZHC 3173 [30 October 2024]
[1]Wesley and John Loe seek leave to adduce further evidence in an appeal.1
[2] The appeal relates to a decision of Judge T Sharkey in the Family Court on 17 May 2024 making an order under s 24(2) of the Property (Relationships) Act 1976 (the Act) extending the time for Newwei Hala to make a substantive application under the Act.2 Newwei’s substantive application under the Act is to set aside a separation agreement dated 23 July 2020 made under s 21A of the Act between himself and his ex-wife, Catherine Lang.
[3] Wesley and John are Newwei and Catherine’s children. Catherine passed away on 20 August 2023 and Wesley and John are the executors and trustees of her estate.
Newwei’s substantive application
[4] Newwei’s substantive application seeks to set aside the separation agreement on two grounds. First, the agreement is void as it does not comply with the requirements of s 21F of the Act because Newwei did not receive independent legal advice as to the effects and implications of the agreement. Second, giving effect to the agreement would cause serious injustice in terms of s 21J of the Act.
[5] Broadly, the separation agreement provides that Catherine retains all property in New Zealand, Newwei retains all property in Australia and in China, and an adjustment payment of $1 million is made by Catherine to Newwei. Newwei’s evidence is that when the agreement was signed, neither party owned any property in China and two properties in Australia were only purchased by him post-separation. Newwei says that the monetary value of what he received under the separation agreement was the value of the two Australian properties and the $1 million adjustment payment, a total of $2,148,000. In contrast, Catherine received the seven properties the parties owned in New Zealand, which had a value of more than
$10 million.
1 Pseudonyms have been used instead of the parties’ real names. I will for convenience, and meaning no disrespect, refer to parties by their (pseudonymous) given names.
2 [Hala] v [Loe] [2024] NZFC 6252.
Newwei’s application for an extension of time
[6] Under s 24(1)(a) of the Act, Newwei needed to make his substantive application within 12 months of the date on which the order dissolving the marriage came into effect. The order took effect on 11 September 2020. Accordingly, Newwei needed to make his substantive application by 11 September 2021. He commenced proceedings in April 2023, 19 months after time expired. He therefore applied for an extension of time under s 24(2) of the Act.
[7] It was common ground that there are four factors guiding a determination as to whether to exercise the discretion under s 24(2):3
(a)the length of time between the expiry of the Act’s time limit and the bringing of the application;
(b)the adequacy of the explanation offered for the delay;
(c)the substantive merits of the claim; and
(d)any prejudice upon the respondents.
[8] These four factors are not a “comprehensive code”.4 The weight given to each of the factors depends on the facts of each individual case.5
Decision under appeal
[9] The application for an extension of time was heard on 17 May 2024 and the Judge gave an oral judgment.
[10] The Judge considered that 19 months was not a lengthy delay given the circumstances of the case. She found the explanation as to the delay adequate.6
3 Beuker v Beuker (1977) 1 MPC 20 (SC) at 21; and Ritchie v Ritchie [1992] NZFLR 266 (HC) at 268.
4 Ritchie v Ritchie, above n 3, at 268.
5 At 269.
6 [Hala] v [Loe], above n 2, at [34].
[11] She also found that, on the face of it, the merits of Newwei’s application were sufficient to justify an extension of time being granted. Her assessment was that there is an answerable case. There are clearly disputed facts relevant to the separation agreement and whether it should be set aside. However, the Judge said those issues are for the substantive hearing.7
[12] Finally, the Judge considered that any prejudice against Wesley and John was outweighed by the prima facie case that needed to be answered.8
[13] For these reasons, and stepping back and considering the matter in totality, the Judge considered that leave should be granted to Newwei to bring his application out of time.9
Law relating to adducing further evidence on appeal
[14] The application is made under r 20.16 of the High Court Rules 2016. Under r 20.16(3) the Court may only grant leave if there are “special reasons for hearing the evidence”. In B v A, Wylie J outlined the relevant principles:10
(a)the Court can receive further evidence if it thinks that the interests of justice require it to do so;
(b)it is wrong to allow an appellant 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 the time;
(c)admitting further evidence on appeal is exceptional rather than routine. A change of heart about how a case should have been run will not suffice. The prospect of further evidence triggering a substantial re-litigation before the appellate Court of the substantive case will count against admitting the further evidence;
(d)generally, the further evidence must be fresh, credible and cogent;
(e)evidence will not be regarded as fresh if it could, with reasonable diligence, have been produced at the trial;
(f)the absence of freshness is not an absolute disqualification. When the further evidence is not fresh, it will not generally be admitted unless
7 At [37].
8 At [39].
9 At [41].
10 B v A [2020] NZHC 580, (2020) 26 PRNZ 58 at [25].
the circumstances are exceptional and the grounds compelling. In addition, the further evidence needs to pass the tests of credibility and cogency;
(g)the interests of justice require the parties to put their best case forward at trial, in order to avoid wasting the Court’s limited time and resources. A high value is placed on finality when the parties have been afforded the opportunity and failed to take it; and
(h)the standard to be met is “rightly high”.
[15] The current application was not made under s 39B(3) of the Act, but it also applies in this context. Under this provision the Court may receive further evidence “if it thinks that the interests of justice so require”. Despite the heading to s 39B being “Appeals to Court of Appeal”, this provision applies in the High Court (as well as the Court of Appeal).11
[16] In Hodgson v Hodgson, the Court of Appeal considered the interplay between High Court r 20.16 and s 39B.12 The Court of Appeal indicated that where both apply, the correct standard for the court to apply in determining whether further evidence should be allowed is the interests of justice test in s 39B(3).13 This is because “the interests of justice” is a lower standard than the “special reasons” standard that applies under r 20.16.14
[17] However, the Court went on to conclude that, if the evidence is not fresh, there is no practical difference between the interests of justice and special reasons.15 It appears that it is only if the evidence is fresh that the difference between the two standards becomes relevant.
Wesley and John’s application for leave to adduce further evidence
[18] At the same time as Wesley and John filed their appeal against the Judge’s decision, they also made their application for leave to adduce further evidence on appeal. The evidence that they seek to adduce is all, they contend, relevant to the
11 Sutton v Bell [2020] NZHC 327, [2020] NZFLR 27.
12 Hodgson v Hodgson [2015] NZCA 404, [2015] NZFLR 979.
13 At [37].
14 At [36].
15 At [45].
merits of the substantive application. It is not relevant to any of the other considerations taken into account by the Judge in making her decision.
[19]The further evidence is in four categories:
(a)A table that Wesley and John say shows companies in China that Newwei had an interest in.
(b)Chinese medicine prescriptions that Wesley and John say provide evidence that Newwei was prescribing medication to Catherine.
(c)WeChat messages that Wesley and John say show that Newwei understood the terms of the separation agreement and its effects and implications.
(d)Documents related to life insurance taken out by Newwei and Catherine through the BNZ.
Is the evidence fresh?
[20] As discussed above, evidence will not be regarded as fresh if it could, with reasonable diligence, have been produced at the first instance hearing. In my view, none of the further evidence that Wesley and John seek to adduce can properly be considered fresh.
[21] In their evidence they give three reasons as to why they did not put the table of Chinese companies, the Chinese medicine prescriptions or the WeChat messages before the Family Court. First, they were emotionally distressed because of their mother’s death. Second, they were confused about the legal process. Third, the lawyer who had been representing their mother when she died ceased acting.
[22] The evidence is unclear on exactly when the evidence became available to Wesley and John. However, Mr McLennan agreed that it was a reasonable inference to draw that the evidence was available to them by the end of last year.
[23] There was a case management conference on 1 February 2024. Wesley and John were not legally represented at the time. They attended the case management conference personally. At the case management conference, Judge Southwick told them they would need to get a lawyer to advise them and to help them prepare affidavits. She also made timetable orders requiring them to file any affidavits by 29 February 2024.
[24] Wesley and John did not instruct a new lawyer until around 26 February 2024. On that date, Mr McLennan filed a notice of change of representation. As Wesley and John’s affidavits were due in only a few more days, it was necessary to extend the date for filing of their evidence. On 21 March 2024, a joint memorandum of counsel was filed extending the date for their evidence to 28 March 2024. They filed their evidence on that date. This was around seven weeks before the hearing before the Judge on 17 May 2024.
[25] This timeline shows that, while Wesley and John may previously have been prevented from presenting evidence by emotional distress, confusion about the legal process and unavailability of their previous lawyer, this was no longer the case well prior to the 17 May 2024 hearing. They had the evidence available to them since the end of the previous year and there was sufficient time for them to put the evidence before the Court.
[26] The evidence was in Chinese and needed to be translated before it could be filed. Wesley and John suggest in their evidence that it was not possible to have the evidence translated in the time available to them. However, I do not accept this is correct. As I have explained, Mr McLennan was engaged on 26 February 2024. The evidence was not due until 28 March 2024. This was sufficient time to have the material translated. If further time was needed, they could have sought a further extension of the 28 March 2024 deadline.
[27] The BNZ insurance documents were not originally part of the application to adduce further evidence. Around three months after the application was filed, Wesley and John filed a further affidavit exhibiting the documents and saying that they wish to adduce them as further evidence as well.
[28] Wesley and John’s affidavit provides no explanation as to why it took so long to locate the insurance documents. Accordingly, there is no basis for me to find that the evidence could not, with reasonable diligence, have been produced at the hearing. Therefore, I must also treat this evidence as not being fresh.
Are the circumstances exceptional and the grounds compelling?
[29] As I have said, in Hodgson v Hodgson, the Court of Appeal said that where the further evidence is not fresh, there is no practical difference between the interests of justice and special reasons. Accordingly, as I have found that none of the evidence is fresh, what I must determine is whether “the circumstances are exceptional and the grounds compelling”.16 In my view, the further evidence is a long way from meeting this standard.
[30] An important general point here is that Wesley and John are not appealing a final decision of the Family Court in relation to Newwei’s substantive application under the Act. They are merely appealing a decision to extend the date by which Newwei was required to file his substantive application. The further evidence Wesley and John seek to adduce is said to go to the merits of Newwei’s substantive application. But, as I have explained, that was only one of the matters considered by the Judge in deciding to extend the time for filing. The Judge considered that the merits of Newwei’s application were sufficient because her assessment was that there was an answerable case. The question of whether the circumstances are exceptional and the grounds compelling must be judged with these points in mind.
[31] Wesley and John seek to adduce the table of companies because, they say, it shows that Newwei had significant assets in China at the time of the separation agreement. However, in my view this table would have no impact on the outcome of their appeal.
[32] The table suggests that Newwei had interests in the companies but provides very limited other information. No indication is provided about the assets of the companies other than a figure for “Registered Capital” for five out of the seven
16 B v A, above n 10, at [25(f)].
companies. The Registered Capital figures for the five companies range from CNY 500,000 to CNY 5,780,000. These are significant sums of money, but it is unclear what relationship the Registered Capital figure has with the actual value of the companies. Further, the information includes an “Official Note” for each company saying that the business licence of the company concerned had been revoked. In four cases the business licence is said to have been revoked in 2004. In the other cases, the business licence was revoked in 2005, 2008 and 2018. A possible inference from the fact that the companies had their business licences revoked at least two years before the separation agreement was signed in 2020 is that, by the time the agreement was signed, they no longer had any value. For these reasons, while I accept the table might be relevant to Newwei’s substantive application, I consider that a judge hearing Wesley and John’s appeal would put the table aside and give it no weight.
[33] Wesley and John in their evidence allege that the Chinese medicine prescriptions show that Newwei prescribed Catherine with traditional Chinese medicine. They say he was not qualified to do so. They say that he “falsified his academic background” to obtain registration as a healthcare professional and provided medical advice based on “fabricated experience”. Their evidence provides no explanation as to how this could be relevant to the appeal. Mr McLennan submitted that the prescriptions go towards Newwei’s credibility. However, in my view evidence of that kind would not have any impact on the outcome of the appeal.
[34] The WeChat messages are said to be relevant to the appeal because Newwei’s case is that he did not receive legal advice regarding the effects and implications of the separation agreement and therefore he was unaware of how unfavourable the deal was to him. It is submitted that the messages show that he was, in fact, fully aware of the agreement.
[35] I agree that the WeChat messages are relevant to whether Newwei understood the terms of the agreement. However, as Ms Chandra submitted, whether he understood the terms of the agreement and whether he received legal advice regarding
their effect and implications are two separate questions.17 With this in mind, while again I accept that the WeChat messages might be relevant to Newwei’s substantive application, I do not think that they would make any material difference to the outcome of the appeal.
[36] Wesley and John allege that Newwei coerced Catherine into taking out a life insurance policy with the BNZ with him as the registered property holder. They say that under the separation agreement Catherine was supposed to receive assets in New Zealand and this includes the benefit of the life insurance policy because it was taken out in New Zealand. They say that before Catherine died she tried to make a claim under the policy but Newwei, as the policy holder, blocked her from doing so. Instead, in breach of the separation agreement he “fraudulently” claimed under the policy and received a payout.
[37] Wesley and John wish to adduce the BNZ insurance documents to support these allegations. However, I agree with Ms Chandra that these documents do not add materially to the picture presented in evidence that is already before the Court. Catherine herself provided in the Family Court an affidavit dated 11 June 2023. She refers to taking out the life insurance policy in 2011. Nowhere in the affidavit does she suggest that she was coerced into doing so, but she says that, under the terms of the separation agreement, she is entitled to the benefit of the policy and that she claimed under the policy, but Newwei blocked her. Further, Newwei acknowledged in an affidavit he filed in the Family Court that he received a payout under the policy of $581,627. The documents Wesley and John wish to adduce do not materially add to this picture.
[38] For these reasons, my conclusion is that the circumstances are not exceptional and the grounds for the evidence being permitted are not compelling.
[39] Ms Chandra submits that the further evidence is also not credible in a number of respects. This includes because there are some translation errors. She raises various
17 Coxhead v Coxhead [1993] 2 NZLR 397 (CA) at 403; Gould (aka Timm) v Timm [2013] NZHC 92, (2013) 29 FRNZ 290 at [27]; Thurston v Thurston [2014] NZHC 2267 at [60]; and Williams v Hacking [2017] NZHC 799 at [7].
other issues. However, because of my conclusions above, I do not need to consider these points.
Result
[40]The application is dismissed.
[41] Newwei is entitled to costs in relation to the application. To that end, I categorise the appeal as a category 2 proceeding. Allocation B is appropriate for each step taken in relation to the application. Reasonable disbursements are also payable.
Blanchard J
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