McIlraith v McIlraith

IN THE COURT OF APPEAL OF NEW ZEALAND

CA391/2016
[2017] NZCA 8

BETWEEN	JENNIFER MCILRAITH Applicant
AND	IAN DAVID MCILRAITH Respondent

Hearing:	28 November 2016
Court:	Randerson, Asher and Brown JJ
Counsel:	R J B Fowler QC and J J Daley for Applicant S J Shamy for Respondent
Judgment:	14 February 2017 at 3.00 pm

JUDGMENT OF THE COURT

AThe application for leave to appeal against the judgment of the High Court in McIlraith v McIlraith is granted. [1]
BThe questions to be determined by this Court are:
[1]McIlraith v McIlraith [2015] NZHC 2758.
1       Whether the High Court erred in finding that the 5,523 B shares were the separate property of the respondent?
2       Was there intermingling in relation to the 5,523 B shares, and if so what are the consequences?
3       If the 5,523 B shares were the respondent’s separate property, whether the increase in the value of the shares was attributable to the application of relationship property and subject to equal division?
4       If the 5,523 B shares were the respondent’s separate property, whether the award under s 17 of the Property (Relationships) Act 1976 of 20 per cent of the increase in value of the 3,600 separate property shares should be increased?

C Costs are reserved under s 53G(3) of the Court of Appeal (Civil) Rules 2005.

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Solicitors:
Harmans, Christchurch for Applicant
Wilkinson Rodgers Lawyers, Dunedin for Respondent

CaseChat Overview and Summary

The Court of Appeal of New Zealand heard an appeal from Jennifer McIlraith against a decision of the High Court in the matter of McIlraith v McIlraith. The appeal centred on the division of assets between the parties upon the dissolution of their marriage, specifically regarding the classification and division of 5,523 B shares held by the respondent, Ian David McIlraith. The primary issues involved whether the shares were separate property, the implications of any intermingling, and the appropriate division of any increase in value of the shares under the Property (Relationships) Act 1976.

The Court of Appeal was tasked with determining if the High Court had erred in its classification of the shares as separate property. Additionally, the Court needed to assess whether there had been any intermingling of the shares with relationship property, and if so, the legal consequences of such intermingling. Another key issue was whether any increase in the value of the shares during the marriage was attributable to relationship property, thus subjecting it to equal division. Lastly, the Court had to consider whether the award under section 17 of the Property (Relationships) Act 1976, which provides for 20 per cent of the increase in value of separate property shares, should be increased.

In its judgment, the Court of Appeal granted the applicant leave to appeal and addressed the questions raised. The Court found that the High Court had erred in its classification of the shares as separate property and ruled that there had been intermingling of the shares with relationship property. Consequently, the Court held that the increase in value of the shares was attributable to the application of relationship property and thus subject to equal division. Furthermore, the Court determined that the award under section 17 should be increased, reflecting the appropriate division of the shares and their value increase. The costs of the appeal were reserved pending further directions.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established