M v H
[2017] NZHC 2968
•1 December 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-2017-404-318 [2017] NZHC 2968
UNDER the Family Proceedings Act 1980 IN THE MATTER
of the Property (Relationships) Act 1976
BETWEEN
M Appellant
AND
H Respondent
Hearing: 29 November 2017 Counsel:
T J Rainey for Appellant/Applicant
S Jefferson QC for RespondentJudgment:
1 December 2017
JUDGMENT OF BREWER J
Thisjudgment was delivered by me on 1 December 2017 at 1:00 pm pursuant to Rule 11.5 High Court Rules.
Solicitors:
Registrar/Deputy Registrar
Rainey Law (Auckland) for Appellant/Applicant
Haigh Lyon (Auckland) for Respondent
M v H [2017] NZHC 2968 [1 December 2017]
[1] Ms M applies for leave to appeal to the Court of Appeal my Judgment delivered on 29 September 2017.1 Since this would be a second appeal, leave is required.2
[2] The grounds on which leave to appeal are sought have been reduced and refined. In my Judgment, I held that the Deed of Agreement as to Present and Future Property entered into between Ms M and Mr H on 27 June 2000 survived their marriage pursuant to ss 21O(b), 21P and 21R of the Property (Relationships) Act 1976 (“the PRA”).3 Mr Rainey submits:
5.The issue is whether, under the [Matrimonial Property Act 1976], an agreement between de facto partners as to the status and ownership of property would have the effect of contracting out of the property sharing regime established under the MPA in the event that those parties were to subsequently marry?
6.On that issue the Court was confronted with what it took to be two conflicting High Court decisions: N v N [1999] NZFLR 481 and A v R [2007] 2 NZLR 399. The Court preferred N v N and held that the agreement determined the rights and interests of the parties after they married notwithstanding the finding that the agreement was not a valid contracting out agreement under Section 21 of the MPA or Section 21 of the PRA.
[3] Mr Jefferson QC for Mr H opposes the granting of leave on the basis that there is no conflict of judgments of this Court to be resolved, particularly having regard to the decision of the Court of Appeal in Moor v Marston.4
[4] The circumstances in which it would be appropriate for me to grant leave to appeal are summarised in Waller v Hider:5
These proceedings under the Matrimonial Property Act 1976 began in the Family Court. The appellant husband was largely unsuccessful in his appeal to the High Court. He then applied to that Court pursuant to s 67 of the Judicature Act 1908 for leave to bring a second appeal to this Court. Fraser J declined leave. As he said, the test is well established. The appeal must raise some question of law or fact capable of bona fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the cost and delay of the further appeal: Rutherfurd v Waite [1923] GLR 34; Cuff v Broadlands Finance Limited [1987] 2 NZLR 343 at pp 346 –
347. In the latter case the Court also remarked that in the end the guiding
1 M v H [2017] NZHC 2385.
2 Senior Courts Act 2016, s 60(1). See also Property (Relationships) Act 1976, s 39B(1).
3 At [66].
4 Moor v Marston [2015] NZCA 421.
5 Waller v Hider [1998] 1 NZLR 412 (CA) at 413.
principle must be the requirements of justice. Further authorities of this Court are cited in McGechan on Procedure, para J 67.05.
[5] In my view, the issue of whether a property agreement entered into between de facto partners prior to 1 August 2001 is binding in respect of property acquired after their subsequent marriage by application of the PRA, is one of some public or general importance.
[6] The point becomes whether it is an issue capable of bona fide and serious argument.
[7] I agree with Ms M that Moor v Marston does not address the above issue. That case concerned the effect of a property agreement entered into on 31 July 1998 between two de facto partners. The parties separated in 2009. The applicant commenced proceedings under the PRA seeking a share of property that she argued was not covered by the terms of the agreement. The respondent, on the other hand, applied to strike out the proceedings on the basis that the parties had concluded an agreement providing for the division of all their property.
[8] The Court of Appeal first interpreted the clause of the agreement in dispute.6
It found that it was arguable the agreement did not cover certain property acquired after the agreement was signed.7 The property, therefore, fell within the property sharing regime under the PRA.
[9] The Court then considered the impact of s 21R on s 21P agreements:
[48] … In our view the expression “as if this Act had never been passed” in s 21R means no more than that agreements under s 21P that were valid and capable of enforcement before 1 August 2001 have effect despite the amending legislation …
(Citations omitted)
[10] The Court did not, therefore, address the impact of marriage on the parties’
agreement. The parties never married. The Court also did not refer to any of the cases
6 At [18].
7 At [45].
cited in my Judgment. Moor v Marston cannot determine whether leave to appeal should be granted to Ms M on this point.
[11] In my view, however, the Court of Appeal’s reading of s 21R is consistent with my Judgment. The statutory language is clear. There is nothing in the PRA to suggest that the parties’ marriage alters their s 21P agreement.
[12] The only case which favours Ms M’s view, as I mention in my Judgment, is
A v R.8 Justice Chisholm discussed the effect of s 21R on s 21P agreements:
[50] There does not appear to be any logical reason why Parliament would have relaxed its longstanding contracting out philosophy by allowing the requirements of s 21F to be ignored in cases where a marriage had been preceded by a de facto relationship. All Parliament was seeking to do was to preserve the status quo for pre 1 August 2001 agreements between de facto partners. To achieve that it simply needed to ensure that such agreements continued to have effect as if the 2001 Amendment Act had not been passed. There was no need to wind the clock back to the situation before the 1976 Act came into force.
…
[71] … While an agreement might govern the status of assets as at the date of marriage, it cannot (unless it meets the requirements of ss 21 and 21F or it has been validated under s 21H) govern the status of assets acquired post marriage …
…
[73] … The underlying purpose of ss 21P and 21R is to preserve the status quo in relation to agreements entered into by de facto partners before 1 August
2001. Thus even if the parties to such an agreement subsequently marry the
agreement can determine the status, ownership or division of their assets as at the date of marriage provided, of course, the agreement was valid and enforceable before 1 August 2001. But, assuming the agreement is not validated under s 21H, it cannot determine the status, ownership or division of assets acquired after marriage (or assets acquired before marriage which are nevertheless governed by the Act e.g. family home and chattels) unless it meets the requirements of ss 21 and 21F.
[13] The Judge held that the cases9 which suggested that an agreement entered into by de facto partners survived their subsequent marriage either misconstrued the effect
of ss 21P, 21O and 21R or were consistent with his decision.10
8 A v R [2007] 2 NZLR 399 (HC).
9 N v N [1999] NZFLR 481 (HC); MJW v RDW [2005] NZFLR 918 (FC); K v F [2005] NZFLR
852 (FC).
10 At [68], [71]-[72].
[14] I will summarise those cases briefly. In N v N, the dispute arose from a property agreement entered into in 1990 by a de facto couple.11 The agreement provided for the parties’ property to be jointly owned by them as tenants in common. The parties separated shortly after their marriage in 1995.
[15] In finding that the agreement determined the contributions of the parties12 at the time of, and after, their marriage, Potter J commented:13
Any decision which failed to recognise the Agreement in these terms, would have undesirable outcomes. A party might be discouraged from marrying if he or she was aware that by marrying, such an agreement would cease to determine the parties' rights to property …
[16] In MJW v RDW, the dispute resulted from a property agreement entered into in
1995 by a de facto couple.14 The agreement provided for the family home to be the separate property of one party. They later separated after their marriage in 1997. But the appellant claimed a half share of the home, arguing that the agreement was no longer binding due to the effect of the marriage.
[17] In dismissing the appeal, Judge Ryan acknowledged the conflicting High Court decisions, but based his conclusion on the purpose of the PRA:
[11] … The purpose of enacting this package of specific provisions relating to de facto property agreements, was to make it clear that a valid and enforceable contract entered into by de facto partners in relation to the status or ownership of a property would continue to be valid and enforceable notwithstanding their later marriage.
[18] The Judge concluded:
[14] Provided a s 21P agreement is contractually valid in accordance with ordinary principles (as opposed to those codified in the Act), then that agreement must be recognised and given effect to …
[19] Lastly, in K v F, the parties entered into an agreement in 1993 while living in a de facto relationship.15 After their marriage in 1994, they separated in 2001.
11 N v N, above n 9.
12 The argument was around the application of s 13(1)(c) of the Matrimonial Property Act 1976.
13 At 498.
14 MJW v RDW, above n 9.
15 K v F, above n 9.
[20] Judge Druce acknowledged the conflicting decisions, finding:
[34] N v N is authority for the proposition that where parties to a de facto relationship enter into a valid and binding contract as to the sharing of property, that agreement can and should determine the parties’ interest in that property irrespective of subsequent marriage. On the face of it, this principle would now appear to be enacted in s 21R (although limited to pre 1 August
2001 agreements).
[21] The Judge then decided to follow Judge Ryan’s reasoning in MJW v RDW.16
[22] I note that Ms M critiques Judge Collin’s decision17 to distinguish A v R on factual differences. She says those facts are not material to the reasoning adopted by the Court in its decision. I am inclined to agree with that point, although I disagree with the reasoning.
Decision
[23] On the basis that there is conflicting High Court authority, and Moor v Marston
does not determine the issue, I grant leave to appeal.
Brewer J
16 At [38].
17 [M] v [H] [2016] NZFC 10609.
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