Marginson v Bhana
[2016] NZHC 2835
•25 November 2016
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2016-404-001693 [2016] NZHC 2835
IN THE MATTER OF of an appeal against a decision of the
Family Court at Auckland
BETWEEN
KEVIN JOHN MARGINSON Appellant
AND
MADHU BHANA Respondent
Hearing: 22 November 2016 Appearances:
J G Donovan and M H Donovan for Appellant
P J Wright for RespondentJudgment:
25 November 2016
JUDGMENT OF FOGARTY J
This judgment was delivered by Justice Fogarty
On 25 November 2016 at 4.00pm Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar
Date:…………………………
Solicitors/counsel:
J G Donovan, AucklandStainton Chellew, Auckland
MARGINSON v BHANA [2016] NZHC 2835 [25 November 2016]
[1] This is an appeal against a decision of the Family Court ordering interim maintenance to a de facto wife of $1,365.75 per week. The Judge was exercising the jurisdiction in s 82 of the Family Proceedings Act which provides:
82 Interim maintenance
(1) Where an application for a maintenance order or for the variation, extension, suspension, or discharge of a maintenance order has been filed, any District Court Judge may make an order directing the respondent to pay such periodical sum as the District Court Judge thinks reasonable towards the future maintenance of the respondent’s spouse, civil union partner, or de facto partner until the final determination of the proceedings or until the order sooner ceases to be in force.
(2) [Repealed] (3) [Repealed]
(4) No order made under this section shall continue in force for more than 6 months after the date on which it is made.
(5) An order made under this section may be varied, suspended, discharged, or enforced in the same manner as if it were a final order of a Family Court.
[2] Madhu Bhana was the de facto wife of Mr Marginson for around 20 years between 1994/1995 to October 2014. Before the relationship began, Ms Bhana was employed by her de facto husband. On 20 December 2001, they entered into a s 21 agreement, which Ms Bhana has now applied to set aside.
[3] While she was Mr Marginson’s de facto wife, Ms Bhana lived very well because of her de facto husband’s earning capacity. Now, after the breakdown of the relationship she alleges that she has no capital of any assets of any substance and is unable to meet her day to day living expenses. She earns about $500 per week. She sought an order for payment for $1,463.75 per week as interim maintenance.
[4] Submissions from both sides were filed in advance comprehensively and the hearing took place on 7 July, leading to a reserved judgment the next day on 8 July. At the hearing, the de facto husband accepted that the de facto wife’s declared income and expenditure is reasonable in the circumstances except in relation to a
gambling expenditure.1 After reducing the sum for entertainment/socialising from
$200 per week to $100 per week to reflect the gambling, the Court found that there was a shortfall in the order of $1,363.75 per week, to recognise that the de facto husband’s income is significant and concluded:
In those circumstances this Court finds it appropriate and just to make an order for payment of interim spousal maintenance for a period of six months.
[5] The Judge also recognised that there was a judicial settlement conference soon to be convened regarding the substantive spousal maintenance application.
[6] The reason for the appeal is that the Judge did not simply apply s 82(1) of the
Act.
[7] In paragraphs [9] to [11] of the reserved judgment he correctly summarised the Court’s discretion in s 82, that it was unfettered, and that it was intended to be a stopgap measure:
[9] The Court has a discretion under s 82 to make an interim spousal maintenance order for a “reasonable” sum up to six months until “final determination of the proceedings”.
[10] It is observed in Ropiha v Ropiha [1979] 2 NZLR 245, at 247 that the Court has:
An unfettered discretion as to whether an order should be made at all and as to the amount of an order is made. All that can be said is that the making of an order depends on all the circumstances of the particular case. The court must do as it thinks just.
[11] When dealing with an application for interim spousal maintenance the Court is not required to conduct a detailed or extensive hearing as would be expected in the context of a substantive hearing. If jurisdiction is established, the purpose of an interim spousal maintenance application is to provide a stop gap measure designed to address any injustice or hardship which may arise between the time the substantive application is filed and the substantive hearing.
[8] He recognised that there were other sections dealing with the substantive maintenance application. He wrote:
1 Reserved judgment paragraph [36].
[15] The principles relevant in determining a substantive maintenance application are set out in s 62-66. Under s 61 it is not necessary to apply those principles to proceedings relating to interim maintenance proceedings. While the Court has an unfettered discretion whether or not to make an interim maintenance order, it is the practice of the Family Court to exercise that discretion having general regard to the principles set out in ss 62-66 (T v M [2006] NZFLR 561).
[9] So far, so good. Then in the ensuing analysis under the heading “What are the issues?” the Judge went onto a series of paragraphs in which he applied s 63 rather than s 64. Section 63 is the section which guides final orders of maintenance arising out of a marriage or civil union. Section 64 provides for the same kind of maintenance after a marriage or civil union has dissolved or a de facto relationship ends.
[10] The sections provide:
63 Maintenance during marriage or civil union
(1) During a marriage or civil union, each party is liable to maintain the other party to the extent that such maintenance is necessary to meet the reasonable needs of the other party, where the other party cannot practicably meet the whole or any part of those needs because of any 1 or more of the circumstances specified in subsection (2).
(2) The circumstances referred to in subsection (1) are as follows:
(a) the ability of the parties to be or to become self-supporting, having regard to—
(i) the effects of the division of functions within the marriage or civil union while the parties are living together or lived together:
(ii) the likely earning capacity of each party: (iii) any other relevant circumstances:
(b) the responsibilities of each party for the ongoing daily care of any minor or dependent children of the marriage or civil union after the parties ceased to live together:
(c) the standard of living of the parties while they are living together or lived together:
(d) any physical or mental disability:
(e) any inability of a party to obtain work that—
(i) it is reasonable in all the circumstances for that party to do; and
(ii) is adequate to provide for that party:
(f) the undertaking by a party of a reasonable period of education or training designed to increase that party’s earning capacity or to reduce or eliminate that party’s need for maintenance from the other party, where it would be unfair, in all the circumstances, for the reasonable needs of the party undertaking that education or training to be met immediately by that party—
(i) because of the effects of any of the matters set out in paragraphs (a)(i) and (b) on the potential earning capacity of that party; or
(ii) because that party has previously maintained or contributed to the maintenance of the other party during a period of education or training.
(3) Except as provided in this section, neither party to a marriage or civil union is liable to maintain the other party during the marriage or civil union.
64 Maintenance after marriage or civil union dissolved or de facto relationship ends
(1) Subject to section 64A, after the dissolution of a marriage or civil union or, in the case of a de facto relationship, after the de facto partners cease to live together, each spouse, civil union partner, or de facto partner is liable to maintain the other spouse, civil union partner, or de facto partner to the extent that such maintenance is necessary to meet the reasonable needs of the other spouse, civil union partner, or de facto partner, where the other spouse, civil union partner, or de facto partner cannot practicably meet the whole or any part of those needs because of any 1 or more of the circumstances specified in subsection (2).
(2) The circumstances referred to in subsection (1) are as follows:
(a) the ability of the spouses, civil union partners, or de facto partners to become self-supporting, having regard to—
(i) the effects of the division of functions within the marriage or civil union or de facto relationship while the spouses, civil union partners, or de facto partners lived together:
(ii) the likely earning capacity of each spouse, civil union partner, or de facto partner:
(iii) any other relevant circumstances:
(b) the responsibilities of each spouse, civil union partner, or de facto partner for the ongoing daily care of any minor or dependent children of the marriage or civil union or (as the case requires) any minor or dependent children of the de facto relationship after the dissolution of the marriage or civil union or (as the case requires) the de facto partners ceased to live together:
(c) the standard of living of the spouses, civil union partners, or de facto partners while they lived together:
(d) the undertaking by a spouse, civil union partner, or de facto partner of a reasonable period of education or training designed to increase the earning capacity of that spouse, civil union partner, or de facto partner or to reduce or eliminate the need of that spouse, civil union partner, or de facto partner for maintenance from the other spouse, civil union partner, or de facto partner if it would be unfair, in all the circumstances, for the reasonable needs of the spouse, civil union partner, or de facto partner undertaking that education or training to be met immediately by that spouse, civil union partner, or de facto partner—
(i) because of the effects of any of the matters set out in paragraphs (a)(i) and (b) on the potential earning capacity of that spouse, civil union partner, or de facto partner; or
(ii) because that spouse, civil union partner, or de facto partner has previously maintained or contributed to the maintenance of the other spouse, civil union partner, or de facto partner during a period of education or training.
(3) For the purposes of subsection (2)(a)(i), if the marriage or civil union was immediately preceded by a de facto relationship between the spouses or civil union partners, the effects of the division of functions within the marriage or civil union include the effects of the division of functions within that de facto relationship.
(4) Except as provided in this section and section 64A,—
(a) neither party to a marriage or civil union is liable to maintain the other party after the dissolution of the marriage or civil union:
(b) neither party to a de facto relationship is liable to maintain the other de facto partner after the de facto partners cease to live together.
[11] Curiously, if not uniquely, there is a significant degree of commonality of provisions in s 63 and in s 64. Subsections 2(a) and 2 are identical, 2(b) is very
similar as is (c). These criteria were set out. The Judge also referred as relevant criteria any physical or mental disability or inability to obtain work that is reasonable or adequate, the ability to work being slightly differently expressed between the two sections and citing the common criteria of a reasonable period of education and training designed to increase the earning capacity subsection 2(f) in s 63 and subsection 2(d) in s 64.
[12] Ms Donovan for the appellant, Mr Marginson, argued that whilst there was no obligation on the Judge to go beyond the criteria contained in s 82 of the Act, having elected to go to ss 62 to 66, he fell into an error of Wednesbury reasonableness when considering the criteria of s 63 rather than s 64. She could not pinpoint any specific difference in criteria. Rather, she argued that although the sections are almost practically the same, wives tend to get greater awards under s 63 than de facto wives get under s 64. In this regard she relied upon the decision of
Wederell v Wederell2 where the Judge said:
The philosophy behind s 64, as evident from subsection 2, is that each spouse, after dissolution, must assume responsibility within a reasonable time for meeting his or her own needs. Periodic maintenance post a solution is therefore of a transitional nature. The qualifying circumstances under s 64
… are narrower than those under s 63 …
[13] She had to accept that that was a dictum in the context of making final orders. I do not think the dictum has any application to an interim order intended and capable of lasting only six months in the immediate aftermath of a breakup of the relationship.
[14] While it was an error to consider the criteria in s 63, instead of like criteria in s 64, it is another question as to whether it was a material error.
[15] The error was drawn to the Judge’s attention. On 8 November the Judge heard application by Mr Marginson for a stay of the judgment and an application by Ms Bhana for costs and recall of the judgment for corrections to be made. The Judge recorded the concession by counsel for Mr Marginson that all the arguments and oral submissions at the first hearing focussed on s 64, and that s 63 did not feature at the
hearing. The Judge confirmed that the comprehensive written submissions filed on
2 Wederell v Wederell (1994) NZFLR 928.
behalf of each party referred only to s 64. That s 63 was not mentioned and not referred to at the hearing. He went on:
[10] I cannot understand why I have referred to s 63 in my judgment, but I have. It may have been because I was under the pressure of only visiting Manukau for the day to deal with a short cause list. I recall working late that evening to complete my judgment. It was the only judgment I reserved that day. I suspect I dictated reference to s 63 in error.
[16] He recorded a submission on behalf of Mr Marginson, made again today before me that the material difference between the two sections is that there is an ongoing duty to support a spouse but not a de facto partner. The Judge then decided not to recall his judgment, for two reasons set out as follows:
[13] I have decided on balance to decline to recall my judgment for the purpose of replacing reference to s 63 with s 64. Exercising my discretion with circumspection, another Judge or bystander reading my decision may conclude that I have relied on the s 63 criteria rather than the arguably more restrictive test under s 64 because of the specific reference to s 63 in my judgment. However, the nature and tone of my judgment suggests I have relied on s 64 criteria. I especially remember forming the view in paragraph [34] of my judgment that interim maintenance for six months was likely to be at the outside limit of Mr Marginson’s obligation. It is for this reason I commented in paragraph [34] that a substantive order was quite a different matter.
[14] Another reason for exercising my recall discretion with circumspection is that an appeal of my decision is due to be heard on 22
November, which is only two weeks away. The High Court is entitled to review and replace my decision, especially as it was the product of a
submissions’ only hearing.
[17] The Judge granted a stay – the most significant consideration being that this High Court appeal was due to be heard within two weeks of his second hearing. That another two weeks, he thought, was not going to make a great deal of difference.
Analysis
[18] Counsel agreed that the decision of May v May applies. There is an error of law in the written text of the written decision. For May v May to apply, it needs to be a material error.
[19] Ms Donovan did not argue that the Judge could not have come to the same decision for the same amount by simply relying on s 82.
[20] Her argument depended on the proposition that having elected to go to s 62 –
66 for guidance, error of law in the application of s 63 was a material error of law. There are two problems with this argument. Firstly, as we have seen, there is substantial commonality of criteria between the two sections. While final orders for spouses who were married, as distinct for final orders for de facto spouses may be
more generous,3 it does not flow that interim orders, of their nature approximate to
the breakup of the relationship are likely to be significantly different. No authority for that proposition was cited.
[21] And indeed it would be surprising if there were such authorities as that would to contrary to s 82 which does not signal any differentiation of the kinds made in ss
63 and 64 when awarding interim relief.
[22] For these reasons, the appellant has not made out a material error of law. In as much as there is a residual discretion, the circumstances favour dismissing the appeal. The funds as I understand it, have been paid into Court. The respondent de facto wife has received nothing. Should it turn out that the award was too generous when the final awards were made, the Court can consider offsets.
[23] In the meantime, justice would not be served by further delaying the payments of the interim maintenance. Further delay would thwart the purposes of the Family Proceedings Act 1980. Accordingly, this appeal is dismissed. The reserved decision of the Family Court dated 8 July 2016 should be given effect immediately.
[24] The respondent is entitled to costs, to be calculated on a 2B basis. If the parties cannot agree costs, I will receive submissions limited to five pages,
exchanged in advance.
Fogarty J
3 Above n 2.
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