McQueen v Penn

[2016] NZHC 699

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 COURT/LEGISLATION/RESTRICTIONS-ON-PUBLICATIONS.

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV-2015-419-61 [2016] NZHC 699

UNDER	the Family Proceedings Act 1980
IN THE MATTER	of an appeal under s 174(1AA)(a) Family Proceedings Act 1980
BETWEEN	ELIJAH MCQUEEN Appellant
AND	CHERYL PENN Respondent

Hearing:	28 July and 26 August 2015
Appearances:	S Jefferson QC and J Hawker for the Appellant V Crawshaw and L Reed for the Respondent
Judgment:	15 April 2016

JUDGMENT OF WOODHOUSE J

This judgment was delivered by me on 15 April 2016 at 3:00 p.m. pursuant to r 11.5 of the High Court Rules 1985.

Registrar/Deputy Registrar

……………………………………

Solicitors/Counsel:

Mr S Jefferson QC, Barrister, Auckland

Ms J Hawker (appellant’s instructing solicitor), Wynyard Wood, Solicitors, Auckland
Ms V A Crawshaw, Barrister, Auckland

Mr R Gubb (respondent’s instructing solicitor), Beattie Rickman Legal, Solicitors, Hamilton

MCQUEEN v PENN [2016] NZHC 699 [15 April 2016]

TABLE OF CONTENTS

Para No.

Introduction  [1] Factual background  [4] The law

Approach to appeal  [9]

Statutory provisions: ss 62-65 of the Family Proceedings Act 1980      [12] Sections 63 and 64: is there an onus on the applicant?                  [20] Section 64A: submissions on applicable principles  [27]

The Family Court decision

Procedural history and nature of the evidence  [31]

The Family Court judgment: pre-dissolution maintenance                   [33] Division of functions  [34] The wife’s likely earning capacity, ongoing responsibilities

for the children, and inability to obtain work  [35] Standard of living in the marriage  [39] Other relevant circumstances  [42] The wife’s reasonable needs  [43] The husband’s means: s 65  [47]

The Family Court judgment: post-dissolution maintenance                  [48] The Judge’s credibility and related findings  [51] The orders made  [54]

Submissions on appeal  [58]
Evaluation of the appeal  [61]

The Judge’s assessment of the husband’s credibility and related

findings: matters of discretion  [63]

The essential issues and conclusions in summary  [70] Standard of living during the relationship  [80] Actual needs or reasonable needs?  [84] Did the wife provide adequate evidence of her reasonable needs

through to the date of hearing?  Did they in any event diminish

over time?  [90]

Could the wife meet her reasonable needs?  [93]

Was the wife unable practicably to meet the whole or part of her reasonable needs because of one or more of the qualifying

circumstances?  [97]

(1)  Division of functions in the marriage  [98] (2)  The wife’s likely earning capacity  [103] (3) A limited relationship property pool  [105] (4)  Responsibilities for care of the children  [107] (5)  The standard of living during the marriage  [112] (6)  Inability to obtain work  [113]

Effect of delay  [117] The husband’s means  [123] Evaluation of the husband’s means  [127] Overall assessment of quantum and terms of payment  [139]

Cross-appeal: maintenance to meet legal costs  [146] Cross-appeal: Family Court costs  [153] Costs on this appeal  [158] Result  [159]

Introduction

[1]      The appellant and respondent were formerly married.  On 20 February 2015, in the Family Court, Judge R H Riddell awarded the former wife maintenance of

$8,509  per  month  from  the  parties’ separation  on  25  May 2011  to  the  date  of dissolution on 26 August 2013, and post-dissolution maintenance at the same rate for a further two years.1    Given the date of the decision, most of the maintenance was awarded as a lump sum, totalling $382,905.

[2]      The former husband has appealed against all orders against him.  Although the marriage has been dissolved I will refer to the appellant as the husband and to the respondent as  the wife,  to preserve confidentiality for them and  for clarity and convenience.2

[3]      On the appeal the husband contends, in essence, that there should have been no order.   There is a cross appeal by the wife seeking additional maintenance to cover legal costs, and against an award of scale costs in her favour, contending that she is entitled to indemnity costs.  There is also an application by the wife for leave to adduce new evidence.

Factual background

[4]      The parties met in the United Kingdom in early 2000.   At that time the husband was a senior registrar in plastic surgery in England, having qualified as a surgeon in 1996.  The wife, a New Zealander, qualified as a registered nurse in New Zealand.  When they met in the United Kingdom the wife held a nursing position with a hospital in New Zealand.

[5]      On 1 August 2000 the wife resigned from her New Zealand job and ten days later returned to the United Kingdom to live with the husband.   They remained together in the United Kingdom until moving to New Zealand in December 2009. They married in December 2006.   There are two children of the marriage, both

daughters.  One was born in October 2007 and the other in February 2009.

1      Penn v McQueen [2014] NZFC 9795.

2      The recorded names for the parties in the intituling are pseudonyms, being the pseudonyms used for the Family Court judgment.

[6]      The husband continued working in the United Kingdom as a plastic surgeon. The wife worked as a nurse until September 2004 when she commenced dentistry study.  She was not in paid employment from that time up to the date of the hearing in the Family Court in late 2014.  The wife completed her first year in dentistry, but was unable to complete the second year because of her pregnancy with the first child.  When the second child was born she had to withdraw permanently from the dentistry course.

[7]      The parties moved to New Zealand with their children in December 2009.  In January 2010 the husband commenced work as a plastic surgeon, employed by a District  Health  Board.    He left  his  employment  in  February 2011  following an employment dispute.   The dispute had been settled in December 2010 and the husband was paid $126,078 as part of the settlement.  The husband had a period of unemployment  before  incorporating  a  company  in  September  2011,  with  his specialist services as a plastic surgeon provided through the company.

[8]      Following separation in May 2011 the wife had primary care of the children until December 2011 when shared care arrangements began.   Shared care arrangements have continued.  The older child began school in October 2012 and the younger in February 2014.

The law

Approach to appeal

[9]      An appeal in respect of a maintenance decision is in part a general appeal by way of rehearing and in part an appeal against exercise of a discretion.3

[10]     In respect of those parts of the Family Court decision subject to a general appeal, I am bound to come to my own view on the merits, and substitute my

conclusions if they are different from those of the Family Court.4   I may nevertheless

3      NGC v HAH [Maintenance] [2010] NZFLR 677 at [23]; CAM v JMP [2013] NZHC 592 at [16]- [19]. See also Douglas v Douglas [2013] NZHC 3022, [2014] NZFLR 235 at [5] citing B v F [2010] NZFLR 67 (HC)at [8]; and WPH v ITP [Length of relationship] [2009] NZFLR 745 (HC).

4      Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [3].

be persuaded by the reasoning of the lower court.   In Austin, Nichols & Co Inc v

Stichting Lodestar the Court, said:5

The  appeal  court  may  or  may  not  find  the  reasoning  of  the  tribunal persuasive  in  its  own  terms.  The  tribunal  may  have  had  a  particular advantage (such as technical expertise or the opportunity to assess the credibility of witnesses, where such assessment is important). In such a case the appeal court may rightly hesitate to conclude that findings of fact or fact and degree are wrong.6   It may take the view that it has no basis for rejecting the reasoning of the tribunal appealed from and that its decision should stand.  But  the  extent  of  the  consideration  an  appeal  court  exercising  a general power of appeal gives to the decision appealed from is a matter for its judgment.

[11]     To the extent that the appeal is against conclusions reached in exercise of a discretion, the scope of the appeal is narrower.  The appellate court cannot interfere with  the  exercise  of  the  discretion  unless  there  has  been  an  error  of  principle, relevant matters have not been taken into account, irrelevant matters have been taken

into account, or the decision is plainly wrong.7   To conclude that a decision is plainly

wrong requires substantially more than a conclusion by the appellate judge that she or he would have exercised the discretion differently.   It must be plain beyond reasonable argument that the decision in question was one that could not properly have been reached in exercise of the particular discretion available to the judge of first instance.

Statutory provisions: ss 62-70 of the Family Proceedings Act 1980

[12]     The wife’s application was subject to “principles” set out in ss 62 to 66 of the

Family Proceedings Act 1980 (the Act).  Section 66 is not relevant.

[13]     Section 62 is relevant to a discrete issue arising on this appeal.  It provides:

62       Domestic benefit irrelevant

Without  limiting  or  affecting  the  law  relating  to  any  other  benefit,  the liability to maintain any person under this Act is not extinguished by reason of the fact that the person's reasonable needs are being met by a domestic benefit.

5 At [5].

6      The authorities are numerous. They include Shotover Gorge Jet Boats Ltd v Jamieson [1987] 1

NZLR 437 (CA) and Rangatira Ltd v Commissioner of Inland Revenue [1997] 1 NZLR 129 (PC).

7      May v May (1982) 1 NZFLR 165 (CA) at 170.

[14]      Section 63 applies to pre-dissolution maintenance and relevantly provides:

63       Maintenance during marriage …

(1)       During a marriage … 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 … 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 … 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:

…

(3)       Except as provided in this section, neither party to a marriage … is liable to maintain the other party during the marriage ….

[15]     Sections  64  and  64A apply to  post-dissolution  maintenance.    Section  64 prescribes  the  same  qualifying  circumstances  as  s 63(2)  other  than  those  in paragraphs (d) and (e) of s 63(2).  The absence of paragraph (d) makes no difference to the assessment in this case under s 64 because paragraph (d) has no relevance on the facts.  The absence of the equivalent of paragraph (e) in s 64 is relevant in this case, and a point of contention.

[16]     Section 64 is subject to s 64A.  One of the grounds of appeal is that the Judge failed to address s 64A. This provision relevantly provides:

64A     Spouses  …  must  assume  responsibility  for own  needs  within reasonable time

(1)      If a marriage … is dissolved …—

(a)       each spouse … must assume responsibility, within a period of time that is reasonable in all the circumstances of the particular case, for meeting his or her own needs; and

(b)       on the expiry of that period of time, neither spouse … is liable to maintain the other under section 64.

(2)       Regardless of subsection (1), if a marriage  … is dissolved … 1 spouse  … (party A) is liable to maintain the other spouse … (party B) under section 64, to the extent that such maintenance is necessary to meet the reasonable needs of party B if, having regard to the matters referred to in subsection (3),—

(a)       it   is   unreasonable  to   require   party  B   to   do   without maintenance from party A; and

(b)       it is reasonable to require party A to provide maintenance to party B.

(3)      The matters referred to in subsection (2) are as follows: (a) the ages of the spouses …:

(b)      the duration of the marriage …:

(c)       the  ability  of  the  spouses  …  to  become  self-supporting, having regard to—

(i)        the effects of the division of functions within the marriage … while the spouses … were living together:

(ii)      the likely earning capacity of each spouse …:

(iii)      the  responsibilities  of  each  spouse   …  for  the ongoing daily care of any minor or dependent children of the marriage … after the dissolution of the marriage …:

(iv)     any other relevant circumstances.

(4)       If  the  marriage  …  was  immediately  preceded  by  a  de  facto relationship between the spouses or partners,—

(a)      for   the   purposes   of   subsection   (3)(b),   the   de   facto relationship must be treated as if it were part of the marriage

…

[17]     If entitlement and liability are established under s 63 or s 64, s 65 prescribes matters that the Court must have regard to in determining the amount payable for maintenance both before and after dissolution.  Section 65 relevantly provides:

65       Assessment of maintenance payable to spouse …

…

(2)      The matters that the Court must have regard to are as follows: (a)   the means of each spouse … including—

(i)       potential earning capacity:

(ii)      means   derived   from   any   division   of   property between the spouses … under the Property (Relationships) Act 1976:

(b)      the reasonable needs of each spouse …:

(c)      the fact that the spouse … by whom maintenance is payable is supporting any other person:

(d)      the financial and other responsibilities of each spouse …:

(e)      any other circumstances that make 1 spouse  … liable to maintain the other.

(3)       In  considering  the  potential  earning  capacity  of  each  spouse  … under subsection (2)(a)(i), the Court must have regard to the effects of the division of functions within the marriage … while the spouses

… were living together.

…

(5)       In  considering  the  reasonable  needs  of  each  spouse  …  under subsection (2)(b), the Court  may have  regard  to the  standard  of living of the spouses … while they were living together.

[18]     Sections 69 and 70 prescribe the express powers of the Family Court to make pre-dissolution maintenance orders (s 69) and post-dissolution maintenance orders (s 70).   Both contain provisions for orders for periodic, deferred, lump sum, and instalment payments of past and future maintenance.   Both sections also give the Family Court Judge discretions as to the period of the payment and the amount to be paid.    Subject  to  the  mandatory  considerations  in  ss 62  to  65,  these  are  wide

discretions.   Both discretions have importance in relation to the arguments in this case.  For example, under s 69(1)(a) the Family Court may make––

An order directing the respondent to pay, for such period as the Court thinks fit (but not exceeding the joint lives of the parties), such periodical sum towards the future maintenance of the applicant as the Court thinks fit.

Sections 69(1)(b) and (c) likewise allow the Court to order a respondent to pay a lump sum towards future maintenance, or for past maintenance, in such sum “as the Court thinks fit”.

[19]     Sections 70(2) and 70(3), relating to post-dissolution maintenance, provide:

70       Order for maintenance after marriage … ends

…

(2)       The Court may do the following under this section:

(a)      order either party to the proceedings, or the personal representative of either party, to pay to the other party for such term as the Court thinks fit (but not exceeding the life of the other party) such periodical sum towards the maintenance of the other party as the Court thinks fit:

(b)       make  any other order referred to in section 69(1), either instead of or in addition to an order under paragraph (a).

…

Sections 63 and 64: is there an onus on the applicant?

[20]     The first point on appeal was that the Judge was wrong in finding that the wife “had discharged the onus of proof, both as to her need for spousal maintenance and the amount sought”.   Although not put explicitly in these terms, the husband argued that, given the lack of proof, he should not have been ordered to pay any maintenance to the wife before or after dissolution.  For the husband Mr Jefferson QC submitted:

It is clear that an applicant for spousal maintenance carries the onus of proof (to  the  civil  standard)  to  establish  an  entitlement  to  maintenance  in accordance with the relevant statutory criteria (neatly summarised in the case of Wederell8).  The cases decided under ss 63 and 64 of the Act make that plain.

8      Wederell v Wederell [1994] NZFLR 928 (HC) at 931.

[21]     In Wederell Tipping J said:9

During the marriage each spouse has a liability to maintain the other to the extent necessary to meet the reasonable needs of the other. However, that liability only arises where the applicant spouse cannot practicably meet his or her reasonable needs because of one or more of the qualifying circumstances listed in s 63 as paras (a) to (e). Three questions arise. First, it is necessary to identify the applicant's reasonable needs and the amount of money required to satisfy them. Second, it is necessary to identify the extent to which the applicant cannot meet those needs. Third, it is necessary to see whether that inability arises because of a qualifying circumstance; unless that can be shown the applicant cannot obtain maintenance from the other spouse.

[22]     Although in Wederell the Judge referred only to s 63, the approach, in terms of areas of enquiry, is  similar under s 64, but  with the addition of s 64A.   Mr Jefferson submitted that the three questions identified by Tipping J amount to “hurdles that an applicant for spousal maintenance must overcome before maintenance can be ordered (either past or future) …”.  He cited some Family Court

cases in support of the propositions on onus.10

[23]     In Clayton v Clayton, Courtney J noted, in respect of a s 99 variation of maintenance application, which requires consideration of ss 62 to 66 (and s 81), that there is no specific onus to be met.11   She also said that the remarks of Robertson J in M v B applied equally to maintenance proceedings.12

[24]     In Prest v Petrodel Resources Ltd the United Kingdom Supreme Court said:13

There is a public interest in the proper maintenance of the wife by her former husband, especially (but not only) where the interests of the children are engaged. Partly for that reason, the proceedings although in form adversarial have a substantial inquisitorial element. The family finances will commonly have been the responsibility of the husband, so that although technically a claimant, the wife is in reality dependent on the disclosure and evidence of the husband to ascertain the extent of her proper claim. The concept of the burden of proof, which has always been one of the main factors inhibiting the  drawing  of  adverse  inferences  from  the  absence  of  evidence  or

9      At 931.

10     Sullivan v Sullivan [2002] NZFLR 1037 (FC) at [72]; HEG v IRG FC North Shore FAM-2007-

044-1982, 17 June 2010 at [25]-[29]; NGC v HAH, above n 3; and PCD v SGD FC Whangarei

FAM-2001-088-660, 28 June 2005.

11     Clayton v Clayton [2015] NZHC 765, (2015) 30 FRNZ 219 at [83]-[86]. Following Frost v Frost (1989) 5 FRNZ 655 (HC).  Courtney J disagreed with the concepts of onus employed by Rodney Hansen J in B v B HC Dunedin CIV-2011-412-328, 26 September 2011 at [13].

12     M v B [2006] 3 NZLR 660 (CA) at [38]-[39], [49]-[50].

13     Prest v Petrodel Resources Ltd [2013] UKSC 34, [2013] 2 AC 415 at [45].

disclosure, cannot be applied in the same way to proceedings of this kind as it is in ordinary civil litigation. These considerations are not a licence to engage in pure speculation. But judges exercising family jurisdiction are entitled to draw on their experience and to take notice of the inherent probabilities when deciding what an uncommunicative husband is likely to be concealing. I refer to the husband because the husband is usually the economically dominant party, but of course the same applies to the economically dominant spouse whoever it is.

[25]     I  am  satisfied  that  those  observations  are  applicable  to  maintenance applications under the Act, notwithstanding differences between the New Zealand and United Kingdom legislation.  The maintenance provisions of the Act do not refer to an entitlement that may be claimed, the sort of language that it might point to an onus on an applicant similar to that of a plaintiff advancing a claim in a civil action. To the contrary ss 63, 64 and 64A refer to the liability of a spouse (or partner) to maintain the other spouse.

[26]     In my judgment there was no onus on the wife in the Family Court.   The evidence she put before the Court, and elicited in cross-examination, directed to the relevant matters specified in ss 63-64A, was to be assessed by the Judge in the manner noted by the United Kingdom Supreme Court in Prest.  And there was no onus on the wife under s 65 to establish on the balance of probabilities that the husband had the means to meet her reasonable needs.

Section 64A: submissions on applicable principles

[27]     The husband’s case on post-dissolution maintenance was that, even if liability for some pre-dissolution maintenance had been established, there was no liability under ss 64-64A.  The focus of the argument was the obligation of the wife under s 64A(1) to assume responsibility for meeting her own needs.

[28]     The wife’s focus was on the provisions in ss 64 and 64A which record an ongoing liability of each spouse to maintain the other.

[29]     Both counsel referred to cases in which opinions are expressed in general terms on the scope of s 64A, including opinions that there is a “stringent test”, a test

referred to by Judge Riddell.14   The starting point is not cases, but the words used in ss 64 and 64A, construed in context.  The legislature has stated general principles in ss 64 and 64A which are to be applied in exercise of the wide discretions in s 70 to the facts of the particular case.   Generally speaking, a restatement of particular provisions in s 64 or s 64A does not assist the analysis.

[30]     I do not intend to review the various cases referred to by counsel.   It will suffice to reproduce a review of the legislation by the Court of Appeal in C v G, including its amendment in February 2002 when s 64A was added.15  The Court said:

[31]     This Court has discussed the effect of s 64 (in the form in which it stood prior to statutory amendment on 1 February 2002) in Slater v Slater16 and Z v Z (No 2).17  It is unnecessary to repeat all that was said in those decisions which describe the significant policy changes effected by the legislature in this field when the Family Proceedings Act was enacted. It is sufficient to briefly reiterate the broad statutory policy that, subject to specified  statutory  exceptions,  neither  party  to  a  marriage  is  liable  to maintain the other party after the dissolution of the marriage. Where one party is liable to maintain the other, the legislative policy is that the liability should ordinarily be temporary in nature while the maintained party consciously moves towards self-sufficiency. These concepts are eloquently captured in the following passages from the judgment of Richardson J in Slater v Slater:18

And:19

That latter subsection [then s 64(2)] expresses a legislative commitment to the social policy that any maintenance obligations following dissolution of marriage should ordinarily be temporary, not lifelong. The former spouses should go their own ways with their respective shares in the matrimonial property and free of any continuing financial responsibility for one another. The subsection contemplates that in the ordinary run neither spouse will be financially dependent on the other for more than a transitional period and that this will be so even though the effects of the three circumstances specified in s 64(1) are not entirely spent.

… maintenance is ordinarily to be viewed only as a bridge to assist the party concerned while he or she is consciously moving towards self-sufficiency.

14     Penn v McQueen, above n 1, at [94].

15     C v G [Maintenance of former partner: period of liability] [2010] NZCA 128, [2010] NZFLR

497.

16     Slater v Slater [1983] NZLR 166 (CA) at 173-175 per Richardson J.

17     Z v Z (No 2) [1997] 2 NZLR 258 (CA) at 292-296.

18     At 174.

19     At 176.

[32]      This  Court  in  Z  v  Z  (No  2)  also  referred  to  the  “clean  break” principle while emphasising that the principle should not be applied unfairly or harshly:20

Applied to maintenance after divorce, s 64 is undoubtedly intended to give effect to the clean break principle and encourage the former spouses to become independent and self-sufficient after the dissolution  of  the  marriage,  but  nothing  in  the  wording  of  the relevant sections or the scheme of the Act requires this objective to be carried through to the point where the provisions operate unfairly and harshly on one or other of the spouses.

[33]     With effect from 1 February 2002, s 64 was amended and s 64A added. The main change was to expand the range of matters to be taken into account   when   considering   whether,   notwithstanding   the   clean   break principle, it is unreasonable to require a party to go without maintenance under s 64A(2). The former s 64(3) had referred only to the age of the parties and the duration of the marriage. Section 64A(3) refers to these two matters, but also to the ability of the party to become self-supporting having regard to the division of functions in the relationship; likely earning capacity of each party; responsibilities for the ongoing daily care of any minor or dependent children of the relationship; and, as a catch-all, any other relevant circumstance.

[34]      When the Matrimonial Property Bill was reported by the Justice and Electoral Select Committee, the Committee stated the intention behind the proposed ss 64, 64A and 65 was to:21

… allow the Court to consider a wider range of circumstances in determining maintenance. Although there is currently a relatively wide discretion to award spousal maintenance, we are advised that few  orders  are  made  in  practice. The  amendments  are  aimed  at providing the Court with greater flexibility in awarding maintenance.

[35]      The  Select  Committee’s  comments  in  this  respect  echoed  the

concerns this Court raised in Z v Z (No 2) as discussed at [32] above.

…

[37]      Section  64  continues  to  provide  as  a  general  principle  that  the liability to maintain ceases on the dissolution of marriage or civil union or upon de facto partners ceasing to live together.22  But this general principle does not apply where a maintenance obligation is nevertheless found to exist under s 64 or s 64A.

20     At 293.

21     Matrimonial Property Amendment Bill 1998 and Supplementary Order Paper No 25 (select committee report) at 20.

22     Section 64(4).

The Family Court decision

Procedural history and nature of the evidence

[31]     When the wife applied for permanent maintenance, in November 2013, she also applied for interim maintenance.  There was a defended hearing on the interim maintenance application, heard by Judge Riddell in May 2014.  The Judge awarded interim maintenance of $8,509 a month, the same sum subsequently awarded for permanent maintenance.  The decision was reversed on appeal on the grounds that the  Judge  had  treated  the  wife’s  current  reasonable  needs  as  equating  to  her reasonable needs when the parties were still married without determining that one

could be equated with the other.23

[32]     The  defended  hearing  leading  to  the  present  appeal  commenced  on  13

October 2014.  This was reasonably soon after delivery of the interim maintenance decision.  The documentary evidence was voluminous.  In addition to a reasonably large number of affidavits from and for the parties on the substantive maintenance application, the documentary evidence included the affidavit evidence on the interim maintenance application and, it appears, the documents in relationship property and care of children proceedings between the parties.  The case on appeal, with limited additional material for the appeal itself, runs to some 2,220 pages.  The hearing had been set down for one day, but had to be adjourned part heard for a further full day on 18 December 2014.  Both days were fully occupied with oral evidence, and the sitting hours were extended for both days.   The wife was cross-examined for a substantial part of the first day.  The husband was cross-examined for a large part of

the second day.24   Final written submissions were provided in writing and considered

by the Judge without need for a further hearing.

23     Owen v Thomas [2014] NZHC 2200.

24     The transcript of the wife’s oral evidence, which includes some supplementary evidence-in-chief and short re-examination, is 124 pages.  The transcript of all of the husband’s oral evidence is

141 pages. Three other witnesses gave evidence for the wife, all of whom were cross-examined, although not at great length.  There was supporting evidence for the husband from his mother. This evidence was given by telephone, including cross-examination. The transcript for all of the oral evidence, including that of the wife and husband, is 320 pages.

The Family Court judgment: pre-dissolution maintenance

[33]     After reference to the statutory provisions and some of the cases, the Judge noted that the wife relied on six of the qualifying circumstances set out in s 63(2).  I attach substantial weight to most of the Judge’s findings of fact on the central issues, and on credibility findings adverse to the husband.  For this reason I will provide a reasonably full summary of the Judge’s findings on these matters.

Division of functions

[34]     The wife contended that, before separation, she had had full responsibility for the home and the children and the husband’s responsibility was providing the family income.  The husband accepted the latter but disputed the former.   The Judge preferred the evidence of the wife to the effect that there was a clear division of functions during the marriage, particularly for the final period after the wife first became pregnant – approximately four years six months.

The wife’s likely earning capacity, ongoing responsibilities for the children, and inability to obtain work

[35]     These three qualifying circumstances were assessed separately by the Judge, but the evidence relating to each bears on the evidence, and the conclusion, relating to  the  other  two.    The  husband  said  there  was  work  available  for  the  wife  in Hamilton.  The wife said there was no suitable work and none that could reasonably accommodate her responsibilities to the children.  The husband suggested that the wife could resume work as a nurse.  The wife said that this would require retraining in Auckland for a year before she could reapply for a practising certificate.   The husband suggested the wife should consider completing her dental studies by living in Dunedin and commuting to Hamilton to see the children.  The wife rejected this as unreasonable.

[36]     As to the possibility of other types of work in Hamilton, the Judge referred to

and accepted the wife’s evidence that she could not find work which offered her

sufficient flexibility for her present commitments to the children.  The Judge quoted

the following from one of the wife’s affidavits:25

It is extremely difficult however to find work where one can work two short days and two long days per week and alternate long and short Fridays.  That sort of flexibility is often available to highly qualified professionals of which I am not one.  Further if I was to work in a café on the minimum wage at

$14.25 per hour the most I could earn would be $463.00 per week gross and that is only if I could fill all the hours in and my employer was flexible about my being available for the children.  In addition I would need time to meet with my lawyer and attend Court at the various Court hearings that have been scheduled (both for relationship property, maintenance and COCA proceedings).

I have been required by WINZ to be actively looking for work since May

2014 when they wrote to me requesting me to participate in a programme designed  for  sole  parents.    WINZ  put  me  in  touch  with  any  potential

employment but I have not been able to find any employment at this point,

most of which is agriculturally based and which I am not qualified for.

[37]     The  Judge’s  conclusion,  when  considering  likely  earning  capacity,  but

relevant to the other two qualifying circumstances, was:

[46]     Her ability to earn an income was curtailed by motherhood and that has had a flow on effect.  I reject the notion that post separation a move to Dunedin for Dental School or to Auckland for nursing retraining was a viable  option.   It  was  suggested the  applicant should  consider living  in Dunedin attending Dental School and commute to see the children.  I did not regard that proposition as reasonable or realistic.   She does not have the financial wherewithal to make that possible and similarly she does not have the financial ability to relocate to Auckland for nursing training.  Her likely earning capacity remains negligible while the children are young and the care arrangements require her to be available for them on what is a split week basis.

[38]     In respect of the wife’s contention that she had been unable to obtain work or

retrain, the Judge’s conclusions were as follows:

[57]      I accept the applicant’s assertions that, with shared responsibility for the two children, it has been difficult for her to either continue her dental studies or retrain as a nurse. Furthermore the shared care arrangement makes it difficult for her to obtain anything other than part time work at a minimum wage. Despite that, the applicant attested to her efforts to find work.

What my priority is at the moment is searching for employment and

that’s what I do first and foremost.

25     Penn v McQueen, above n 1, at [44].

[58]      The applicant has completed a computer course arranged by WINZ, intended to extend her skills and they require her to be actively looking for work. Her affidavit of 19 September 2014 set out her efforts to find various employment.

Standard of living in the marriage

[39]     The Judge had considered the standard of living during the marriage earlier in her judgment when outlining the history and the circumstances of the marriage.  She referred to undisputed evidence of “a very high standard of living” during the relationship with this evidence derived from “meticulous” records maintained by the husband of all spending.  She referred to a honeymoon in French Polynesia costing between £150,000-£170,000; regular holidays and 18 overseas trips between 2000 and 2008; $108,000 spent on two trips by the wife to New Zealand; gifts or services purchased by the husband for the wife up to 2009 and costing some £38,646.84; other expenditure by the husband on or for the wife totalling $337,480; and a dog- walker employed over a four year period.

[40]     The Judge expanded on this when directly considering s 63.  She said:

[53]     The parties enjoyed a high standard of living during their marriage. As noted above at [12] the respondent was a careful record keeper of all spending.  His meticulous recall of amounts lavished on his wife is detailed in his affidavit.  His reference to the purchase of expensive jewellery for his wife, regular holidays and the discretionary spending available to her all paint a clear picture of a reasonably lavish lifestyle.  Part of that lifestyle was made possible by the respondent’s income and partly by distributions to him from his parents’ family trust.

[54]      In  addition  the  respondent  has  separate  property  in  London  and

Florida from which he derives rental income.

[55]     The kind of lifestyle enjoyed by the parties during the marriage is typified by the example given by the respondent when the applicant failed an exam in her preparatory year for dentistry. She then flew to New Zealand business class and passed her exams on her return. The respondent said:

I then took her on a luxury break to the Maldives to try and relax her, and try and ensure she started her second year in as good a frame of mind as possible.

[41]     The  Judge  recorded  that  in  the  year  up  to  separation  the  acknowledged spending of the husband and wife was $228,700.  Her conclusion on this topic was as follows:

[56]     I have little difficulty, on the evidence, in coming to the conclusion that the standard of living enjoyed by both parties during the marriage was extremely high.  It makes no difference whether one party was lavish and the other frugal in their approach.  The reality is the money was spent with the expectation that this was how they chose to live.

Other relevant circumstances

[42]     “Other relevant circumstances” is one of the three circumstances, specified in s 63(2)(a),  and  directed  to  the  ability  of  the  parties  to  be,  or  to  become,  self- supporting.  The wife relied on two other circumstances.  The Judge held that one of these could not be a relevant circumstance because of various statutory criteria.  This does not require further consideration. The other circumstance was that, as the Judge put it, “there appears to be very little by way of relationship property for the [wife] to fall back on and, if the [husband’s] position is accepted, then there is virtually no relationship property for division”.  The Judge referred to a written submission for the husband, in opposing an interim distribution to the wife of $20,000, that such payment “may result in [the wife] receiving more than she is ultimately entitled to under” the Property (Relationship) Act 1976. The Judge concluded:

[49]     Potentially then, any spousal maintenance award may be the only way in which the applicant can re-establish herself after the marriage. In my view that is a valid submission, subject of course to meeting the grounds for such an order.

The wife’s reasonable needs

[43]     The monthly sum awarded to the wife of $8,509 was the amount claimed by the wife as her reasonable needs.   She did not allow a claim by the wife for an additional monthly sum to cover legal fees.  The Judge concluded that $8,509 was a reasonable assessment based on the standard of living enjoyed at the time of separation and her conclusion that the wife’s reasonable needs had not changed.

[44]     In respect of the amount, in relative terms, the Judge cited observations in this Court of Venning J in RK v DK:26

…  the  shared  standard of living of the  parties  during the  marriage  and particularly in the period immediately prior to separation is particularly relevant  to  determination  of  the  appellant's  reasonable  needs  following

26     RK v DK [Maintenance: high standard of living] [2011] NZFLR 468 (HC) at [22].

separation  and  before  she  could  reasonably  be  expected  to  re-establish herself and re-enter the workforce.

[45]     The Judge also had regard to the standard of living of the husband following the separation, which was high.  She relied on an observation of Kós J in Hodson v Hodson:27

If he is living in comparative luxury, it hardly lies in his mouth to say that the applicant should cut her cloth more closely than he is prepared to do.

[46]     I agree with the observations of Venning and Kós JJ.

The husband’s means: s 65

[47]     In my judgment some of the Judge’s findings of fact on this important issue were wrong, although I do not disagree with the ultimate conclusion.   The Judge said:

[67]      It is significant, in my view that the respondent has been able to enjoy the same standard of living post separation.   He lives in a house purchased by his family trust for $1.4 million.  He drives a Land Rover that cost him $100,000.00, has been able to pay for expensive playground equipment for the children costing $18,000.00 and, by his own admission eats and lives well.  Even his pets would seem to enjoy a high standard of living given the $24,000.00 per annum spent on them.

[68]     The  respondent  acknowledged  his  income  has  increased  since coming to New Zealand. The most recent available figures record an annual income to April 2014 of $283,039.17.  Even taking into account his expenses that  are work related,  his calculation of  everyday expenses discloses  an expectation of living at a level even beyond that enjoyed pre-separation.  For example  the  parties’ expenditure  in  the  last  year  of  their  marriage  was

$228,700.00.    The  respondent’s  estimated  expenses  for  himself  and  his

daughters when he has them in his care, for the year to April 2014 was

$424,952.24.

[69]      He has enjoyed access to relationship property funds of $126,078.75 held in a solicitor’s trust account and sole use of tax refunds in the UK and New Zealand totalling around $15,000.   He would appear to have ready access to his mother’s trust account and he receives rental from his UK property of approximately £1,900 per month.

27     Hodson v Hodson [Maintenance] [2012] NZFLR 252 (HC) at [28].

The Family Court judgment: post-dissolution maintenance

[48]     At the beginning of her consideration of post-dissolution maintenance the Judge undertook  a detailed  survey of the statutory provisions  and  a number of cases.28    A large part of this is directed to the application of s 64A.  Although the transcript of the judgment, in this part of it, refers only to s 64, it is clear from the content that the Judge was directing her attention to s 64A and principles developed in the cases in relation to s 64A, as well as s 64.

[49]   The essence of the Judge’s reasons for the order for post-dissolution maintenance was that the applicable qualifying circumstances that existed before dissolution continued to apply, a continuing order assessed at $8,509 per month was justified and that, in exercise of what the Judge described as the “significant discretion” available to her, the order should continue for two years from the date of dissolution.

[50]  The Judge’s conclusions were based in considerable measure, and understandably, on the findings of fact relating to the pre-dissolution application. The Judge also discussed and made findings on additional issues specific to, or more specific to, the post-dissolution period.   These latter conclusions are noted in my evaluation, to the extent necessary.

The Judge’s credibility and related findings

[51]     At the conclusion of her judgment the Judge made some strong findings adverse to the husband on his credibility.  This included an assessment adverse to the husband as to the way in which he approached what amount to statutory responsibilities under ss 63 and 64 of the Act.  As with the Judge’s findings of fact on numbers of central issues, I attach considerable weight to her general findings on credibility and the related aspects of the husband’s approach.

[52]     In relation to the husband’s approach to his statutory responsibilities, the husband had argued in the Family Court that he had not been unreasonable in his

28     Penn v McQueen, above n 1, at [76]-[100].

approach to provision of some financial support for the wife.  The nature of at least some of this was recorded by the Judge as follows:

[125]    Essentially the respondent’s standard of living has remained at a very high level. The applicant is existing at a subsistence level. The respondent claimed that around the time of separation he made an offer to settle the applicant in a home to be purchased by his family trust, on the face of it a very generous offer. However some of the conditions attached to that offer were arguably onerous. They included:

1.That   she   formally   withdraw   any   claim  for   economic disparity.

2.That she withdraw any claim to relationship property funds held in a solicitor’s trust account which the respondent has already expended.

3.        She receive $200.00 per week in lieu of her claim to the

respondent’s superannuation.

4.In the event that the applicant elected for any reason to leave the property before the girls reached maturity, then he would expect reparation (not specified) to be paid.

[53]     The Judge described the husband’s general approach to the wife’s evidence, and her assessment of the husband’s credibility, as follows:

[131]    I note that every fact and every allegation has been picked over in minute detail in this case.  The respondent has disputed almost every aspect of  the  applicant’s  case.    Voluminous  affidavits  have  been  filed  and  the hearing has taken longer than is usually the case for spousal maintenance matters.

[132]    It could certainly be argued that significant sums are at stake, but the decision has been made more difficult by the degree of nit picking engaged in by the respondent and his evasiveness at answering the most simple of questions.    He  was  reluctant  to  answer  questions  in  a  straightforward manner, even when asked if certain letters and emails had been written by him, when it appeared obvious that they had.

[133]    I found his answers in cross examination to be significantly self serving. He appeared to blame the applicant for a whole raft of problems, from his failure to pass exams, to various difficulties in his career, to the spending during the marriage.  He appeared to give the applicant little credit for her contributions to the marriage, and painted a picture of a husband and father struggling financially post separation if the shortfall of $141,913.07 in his 2013-2014 budget is to be believed.

[134]    The applicant on the other hand was a compelling witness.  I accept that her financial circumstances have not improved since separation.   She remains living at a hand to mouth level of existence which is a far cry from

the standard of living she enjoyed with the respondent prior to the end of the marriage.

[135]    My  broad  sense  of  the  situation  is  sufficiently  compelling  to conclude that I accept the applicant’s version where there has been any clash in the evidence.

The orders made

[54]     The order for maintenance under s 69 was for the 27 month period from separation on 25 May 2011 to dissolution of the marriage on 26 August 2013.  There was an order that the total for this period of $229,743 be paid in one sum within 42 days of 26 February 2015 (being six days after delivery of the judgment).

[55]     At 26 February 2015 past maintenance under s 70 totalled $153,162.   This also was to be paid in one lump sum within the same 42 day period.  The remaining six  months  for s 70  maintenance,  expiring on  26 August  2015,  was  to  be paid monthly.

[56]     The total of past maintenance to be paid within 42 days was, therefore,

$382,905.   The husband had paid some instalments pursuant to the interim maintenance order and these, together with any other payments for maintenance, were to be deducted from the total.

[57]     The Judge also ordered that interest at a rate of 4% per annum was to be paid on any late payments of a lump sum or an instalment.

Submissions on appeal

[58]     The main thrust of the husband’s case on appeal is conveniently provided by reproducing his points on appeal, as follows:

The Family Court Judge:

1.Was wrong in finding that the respondent had discharged the onus of proof, both as to her need for spousal maintenance and the amount sought.

2.Misapplied the law and facts in relation to the parties’ standard of living during the relationship both as a ground for maintenance and as to quantum.

3.Failed to place any weight, or appropriate weight, on the delay by the respondent in bringing her application for spousal maintenance, and in so doing, permitted the respondent to profit from that delay.

4.Failed to take into account the benefit income that the respondent had received during the relevant period, thus over-compensating her for the period in which lump sum spousal maintenance was granted.

5.Wrongly took into account the other means of the appellant as justification for awarding maintenance in the amount sought.

6.Took into account the limitations of the relationship property pool and appears to grant spousal maintenance to the respondent as a means by which to compensate her for that, which is an irrelevant consideration  pursuant  to  ss 63  and  64,  Family  Proceedings Act

1980.

7.Failed to take into account the financial resources available to the respondent including jewellery valued at up to $90,000.

8.Unreservedly  accepted  the  respondent’s  evidence  in  its  entirely without addressing and responding to the challenges raised to that evidence.

9.Failed  to  take  into  account  the  evidence  suggesting  that  the respondent was ready and available to work from 2012 at which time she instead set up a business.

[59]     Point 1 may be divided into three separate points: whether the wife had the burden of proof; assessment of her reasonable needs; and assessment of her means. For reasons already recorded I am satisfied that the wife did not carry a burden of proof.  This element of point 1 does not require further consideration.  That earlier conclusion also applies to part of what is contained in point 8; an underlying premise for the submissions on point 8 was that the wife had the burden of proof.   The remainder of point 8 was directed to the Judge’s adverse credibility finding against the husband and the Judge’s other adverse findings related to the husband’s general approach to the wife’s applications.  I will consider this part of the appeal next.  The other points on appeal are addressed in my evaluation, but under different headings and in a different sequence.

[60]     Ms  Crawshaw,  in  her  submissions  on  the  appeal,  supported  the  Judge’s findings on all matters, and developed submissions on numbers of these points, both legal and factual.

Evaluation of the appeal

[61]     As  indicated  by  the  heading,  this  main  section  is  my  evaluation  of  the

husband’s appeal. The issues raised on the wife’s cross-appeal are addressed later.

[62]   The various issues in respect of pre-dissolution and post-dissolution maintenance are, in general, addressed in a compendious way, rather than dealing with the relevant circumstances first in respect of s 63 and related provisions, and then, again, in respect of s 64 and related provisions.  I have concluded that, for the purposes of this appeal, the issues can adequately be addressed in a compendious way for most issues.

The Judge’s assessment of the husband’s credibility and related findings: matters of discretion

[63]     This section addresses the husband’s point 8.  It also records the reasons why I am satisfied that there are no grounds for interfering with the Judge’s conclusions on the husband’s credibility.  This in turn supports my conclusion that there are no grounds to come to conclusions different from those of the Judge on most of the central issues of fact.

[64]    The husband’s point 8 is directed in express terms only to the Judge’s observation, quoted above, that “every fact and every allegation has been picked over in minute detail” by the husband.29   Mr Jefferson’s submission was that, to the extent that these comments influenced the outcome, “this was an irrelevant consideration, and at best, an unhelpful commentary”.  Mr Jefferson also submitted, more generally, that the husband was entitled to challenge the wife’s evidence and

that the Judge “unreservedly accepted [the wife’s case] despite clear evidence to the contrary”.

[65]     There was ample foundation for the Judge’s observations.  Every contention of any consequence of the wife was challenged.   The appeal was also very wide ranging.   If the Judge’s observations were directed solely to the way in which the

husband chose to approach the case in court – what may be described as a litigation

29     Penn v McQueen, above n 1, at [125]-[126], quoted above at [52].

strategy – I agree that this would be an irrelevant consideration in relation to the issues arising under ss 63 and 64.  But this must be read in context.  This forms a very small part of the Judge’s overall assessment of credibility.  The few sentences in question  were  preceded  by  the  Judge’s  discussion  of  two  offers  made  by  the husband, one of which was quoted above.  The Judge was justifiably critical of the terms  of those offers  and  their  terms  were indications  of the husband’s  overall approach  to  his  responsibilities.    I  am  satisfied  that  these  matters  were  then justifiably taken into account as part of the Judge’s assessment of the husband’s credibility.   The remainder of the Judge’s discussion is expressly directed to credibility.

[66]     This case turned in large measure on the Judge’s findings of fact in respect of the very large amount of evidence she received.  Critical parts of this evidence were the oral evidence in cross-examination of the husband and the wife.  Contrary to the husband’s submission, I am satisfied that the Judge did take account of the husband’s challenges to the wife’s evidence.   The husband’s real complaint is that the Judge preferred the wife’s evidence on the important questions of fact.

[67]     This is also a case where the Judge had a material advantage, compared with a Judge on appeal, in relation to the weighing of evidence and consequential findings of  fact.    This  will  be  apparent  from  the  earlier  summary  of  the  Family Court proceedings and the course of the hearing.  A very large part of the hearing, over the two extended days, was devoted to oral evidence of the wife and then the husband and with most of that being devoted to cross-examination of each of them.   The Judge had an added benefit in that she had undertaken an assessment of many of the important factual issues only five months before when she heard the wife’s application for interim maintenance, with a reserved judgment delivered two weeks later.   This added advantage is not diminished by the fact that the decision was reversed on appeal, because the appeal decision was on a point of law.

[68]     Another factor bearing on my assessment of the weight to be given to the Judge’s findings of fact, and particularly on findings of fact and degree, is that the Judge was sitting in the Family Court and she was an experienced Judge in this specialist jurisdiction.  This is of particular relevance in respect of matters requiring

evaluation beyond basic fact finding.   This applies to numbers of the important conclusions required to be reached, including the effect of qualifying circumstances under ss 63 and 64, assessment of the reasonableness of the wife’s statement of needs,  assessment  of  the  impact  of  responsibilities  to  the  children,  during  the marriage and after separation, assessment of the ability of the wife to obtain paid employment that was not only adequate but also reasonable in all the circumstances for her to do, and assessment under s 64A of the duration of the post-dissolution maintenance order.

[69]     Up to this point I have been referring to the credibility findings and findings of fact, or findings of fact and degree.  There were also the Judge’s conclusions in exercise of the discretions under ss 69 and 70.  The limited scope on an appeal for reversing conclusions in exercise of a discretion have already been noted, as have the statutory provisions making express provision for exercise of a discretion.   These considerations are necessarily taken into account in the evaluation of specific issues which follows.

The essential issues and conclusions in summary

[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.

[71]     Unless the other spouse has no means to pay any maintenance, the court must then assess the maintenance to be paid, and the terms of payment, in exercise of the discretions provided in s 69 as to the period of the order and the amount.

[72]     The  essential  enquiry  under  s 64  is  the  same,  except  that  there  is  the additional enquiry under s 64A.  The power to order post-dissolution maintenance is contained in s 70, but the discretions are the same in relation to the period and the amount.  This includes the discretion, bearing on s 64A, to order payment “for such term as the court thinks fit (but not exceeding the life of the other party)”.

[73]     There was no material error by the Judge in her outline of the statutory provisions to be applied and the relevant principles developed in the leading cases. Mr Jefferson submitted that there were a number of errors of law, but many of these involved mixed questions of law and fact with the real focus being on questions of fact.  On my assessment there were only three contentions of substantial error of law.

[74]     The first suggested error of law was the submission that there was an onus on the wife and that she had failed to meet the onus on her.  There was no error by the Judge in that regard for the reasons already recorded.

[75]     The second suggested error of law was that, at least in respect of the claim for past maintenance (which covered approximately two years six months by the date of the application and around three years six months by the date of hearing), the Judge should have assessed the wife’s reasonable needs by reference to her actual expenditure at the date of hearing ($39,450 per annum) and not by reference to the wife’s budget of $8,509 per month ($102,108 per annum).  The husband’s argument in  this  regard  is  wrong.    Delay by  an  applicant  in  bringing  an  application  for maintenance may have some evidential relevance, and could bear on those parts of the decision involving exercise of a discretion, but there is no foundation for the proposition of law advanced.  It is based on a distinction between past maintenance and future maintenance which is not provided for in the Act and would run counter to the provisions that are in the Act.

[76]     The third submission of a substantial error of law was that the Judge failed to apply s 64A.  That contention is also incorrect.  As already recorded, the Judge did consider the statutory provision and the principles developed in some of the cases, and she clearly turned her mind to application of the provisions to the facts as she found them.  The real complaint from the husband is that, if there was a proper basis for some post-dissolution maintenance, the term of two years was too long.  At this point, as the Judge said, she was exercising a discretion.  There was no error by her justifying this Court interfering with her exercise of the discretion.  It was exercised subject to the constraints in ss 64-65 and, in particular, s 64A.  In any event, I am satisfied that the two year period was a reasonable period having regard to the factual circumstances  of this  case.    Given  the statutory expression  of  the discretion  in s 70(2)(a) – as the court thinks fit but not exceeding the life, in this case, of the husband – applied to all of the relevant circumstances of this case, a post-dissolution period of two years was well within range.

[77]     On findings of fact, or fact and degree, in relation to the central issues, I am also satisfied that there was no material error by the Judge, except in one respect. The exception concerns evidence relied on by the Judge to conclude that the husband had adequate means to pay maintenance as assessed.  But there was other evidence justifying a conclusion that the husband did, in large measure, have capacity to pay the maintenance as assessed. This is discussed later.

[78]     In summary, my broad conclusions are:

(a)       There  was  ample  evidence to  support  the Judge’s  conclusion  that

$8,509 per month represented the wife’s reasonable needs and that this was the appropriate figure for the full period of the combined maintenance orders.

(b)The  Judge  concluded  that  the  wife  did  not  have  any  financial resources to meet any of her needs.   That conclusion is also amply borne out by the evidence.

(c)      The third main enquiry was whether the wife could not meet her reasonable needs because of one or more of the qualifying circumstances.  I agree with the Judge’s conclusions on the evidence that all but one of the qualifying circumstances relied on by the wife were established.  The husband was therefore liable under ss 63 and

64, subject in both cases to the assessment under s 65 and further subject, in the case of s 64, to s 64A.

(d)      There was no error by the Judge under s 64A.

(e)      I am satisfied that the assessment required to be made under s 65 justifies a conclusion that the husband should pay maintenance assessed at $8,509 per month, and in large measure for the total period as assessed by the Judge, but subject to an overall review of the amount of the lump sum.

[79]     The remaining sections of this evaluation expand on some of the matters already  noted  and  address  the  other  principal  submissions  for  the  husband  not already considered.

Standard of living during the relationship

[80]     The  question  as  to  the  standard  of  living  during  the  relationship  is appropriately dealt with first because it bears on the assessment of the wife’s reasonable needs as well as being one of the qualifying circumstances under ss 63(2) and 64(2).

[81]     Mr Jefferson submitted that the Judge erred in her assessment of the shared standard of living of the parties.  The principal contentions were as follows: a lot of the evidence referred to by the Judge was of an historical nature and, in particular, related to the period before the children were born; the standard of living dropped substantially in New Zealand and the husband ceased work three months before the separation; although the expenditure over the year up to separation was $228,700, a lot of this had to be borrowed; and the Judge’s assessment of reasonable needs at

$8,509 per month did not equate to the assessed standard of living during the relationship.

[82]     The Judge did refer to evidence of a high standard of living in the earlier years of the relationship, which included the de facto relationship, and much of this was before the children were born.  If this evidence stood in marked contrast to the general standard of living after the children were born, and after they moved to New Zealand, the more historical evidence would not be of much relevance, and if it provided the foundation for the assessment of reasonable needs following separation there may have been an error.  But there was no error.  Some types of expenditure ceased, such as extended holidays overseas, but the accepted level of expenditure in the year immediately before separation indicated a high standard of living, and many of the items on which this money was spent indicated the same.   Line by line comparison between items on which money was spent before separation, and items on which the wife sought to spend money after separation is not justified, let alone microscopic examination of the detail.

[83]     The remaining arguments for the husband are not relevant.  The level of his income before, or after, separation is not relevant to the assessment of the standard of living.  And the related submission, referring to borrowings to maintain the standard of living, is also not relevant to determining what that standard of living was.

Actual needs or reasonable needs?

[84]     Mr Jefferson argued that the wife’s budget recording a total of $8,509 a month for expenses represented what  she wished  for  rather than her  current  or reasonable needs.30    He argued that there was no evidence of her current financial needs, and that she did not update her evidence.  He argued that it was not right to consider a greater sum as a past maintenance award than the sum actually spent by the  wife,  especially  where  there  was  no  evidence  of  suffering  on  her,  or  the

children’s part.31

30     The total of $8,509 excluded a claim for legal fees.  This is one of the wife’s claims disallowed

by the Judge and one of the matters subject to the cross-appeal.

31     Smith v Smith [2007] NZLFR 33 (FC).

[85]     The wife’s financial statement included income between October 2012 and October 2013 of $34,660 and expenditure during the same period of $39,450.  Mr Jefferson submitted from this that, at most, the wife’s reasonable needs were no more than $39,450 and that the husband’s maximum liability could not exceed the difference between expenditure and income of $4,790 for the year.   The husband nevertheless resisted liability for this sum on various grounds to be discussed below. There were challenges to specific items in the budget, such as a claim for $600 a week for rent when the actual amount was $300, and claims for items such as haircuts, dental and medical costs, a cleaner and health insurance.  And the last two items were also challenged on the basis that the wife’s actual expenditure did not include expenditure on a cleaner or on health insurance.

[86]     I am satisfied that the husband’s argument is wrong in principle and that the Judge’s approach was correct as a matter of law.  There is no statutory provision, or principle developed in the cases, which requires the evidential foundation for assessment of past maintenance to be different from the evidential foundation for the assessment of future maintenance.

[87]     I am also satisfied that the Judge’s assessment of the wife’s reasonable needs was correct.   The assessment of reasonable needs is fact-specific.32    What the applicant for maintenance has actually spent is not relevant, except to the extent that it may inform on an evidential level what the applicant’s reasonable needs are.33

[88]     The husband on the appeal made much of an alleged failure of the wife to produce documentary evidence in support of her claims of needs and of means.  It is convenient to deal with this submission in respect of the wife’s evidence of means as well as her evidence of needs.   Reference was made, in particular, to a failure to provide bank statements before the commencement of the hearing.  On a procedural point this is not indicative of any material failure by the wife.   A notice by the

husband to the wife to produce bank statements was not delivered until after the first

32     See, for example: Z v Z (No 2), above n 17, at 294; M v B, above n 12, at [196]-[197], [220] and

[256].

33     A case in point is a case referred to by Mr Jefferson, Smith v Smith, above n 31, at [108].

However, that case does not bear on the points of principle and is quite different from the present case on the facts.

day of the hearing in the Family Court and, therefore, after the wife had given her evidence.  In addition, the wife had already provided bank statements as an exhibit to an affidavit in relationship property proceedings.  In any event, a failure to produce bank statements, or other documentary evidence which may or may not be available, does not mean that the wife has failed to provide evidence of her reasonable needs or of her means.  There was evidence.  There is nothing inherently inadequate in the evidence that was provided.

[89]     I am not persuaded that there are any grounds to interfere with the Judge’s assessment of the wife’s reasonable needs at $8,509 per month  – $102,108 per annum.   It was a reasonable reflection of the shared standard of living.   It could reasonably be based on the acknowledged expenditure of close to $230,000 per annum in the year immediately before separation.  It was reinforced by reference to the standard of living in preceding years.  The assessment was well within the range for an evaluative judgment by a Family Court Judge based on all of the relevant evidence.

Did the wife provide adequate evidence of her reasonable needs through to the date of hearing?  Did they in any event diminish over time?

[90]     Mr Jefferson submitted that the wife had failed to provide evidence of her needs at the date of hearing in October 2014, her only affidavit evidence being for the 12 months ending October 2013.   He also submitted that the Judge failed to direct herself to ongoing reasonable needs.  To an extent this part of the argument was founded on the appellant’s argument about an onus on the wife as applicant, with the submissions in that regard merging into submissions as to the adequacy of evidence, which is a different point.

[91]     There was ample evidence for the Judge to conclude that the wife’s claim as to her reasonable needs at the date of hearing were the same as they had been in the preceding years, and I agree with the conclusion.   The sufficiency of the Judge’s conclusions on these matters is indicated by recording her findings.  She said:

[71]      There  is  no  evidence  that  the  applicant’s  reasonable  needs  have changed since separation.  She is now facing grossly changed circumstances since the marriage ended and her inability to meet her own reasonable needs

between separation and dissolution can be directed [sic] sheeted home to the effect of the division of function within the marriage, her responsibility for the children and her inability to find work between separation and the date of dissolution.

…

[103]    On the evidence, the applicant’s circumstances remain unchanged. She still lives in a rental property. Her sole source of income is the Domestic Purposes Benefit (with an occasional loan from her family for which she is required to make repayments).  Her inability to make ends meet has been the subject of approaches to the respondent when she has experienced particular financial hardship.   While the respondent has given her money, that was clearly construed as a loan to be ultimately repaid.

A  similar  conclusion  was  recorded,  in  forceful  terms,  in  the  discussion  of credibility.34

[92]     There  was  a  related  argument  for  the  husband  that  the  Judge  failed  to recognise that the wife’s reasonable needs would, or would be likely to, reduce over time.  The reasonable needs were based on the shared standard of living, and I am unpersuaded that the impact of the shared standard of living, or its relevance, somehow diminished with the passage of time.  The passage of time is relevant in other respects, and s 64A is again the central statutory provision.   But there is no principle which justifies an automatic conclusion that over time the impact of a shared standard of living would diminish.  This point is different from the ability of an applicant, such as the wife in this case, to manage in straitened circumstances. Managing in straitened circumstances cannot possibly be advanced as some sort of disqualifying factor, but that is what the husband in effect argued.

Could the wife meet her reasonable needs?

[93]     I have already noted, and rejected, the husband’s argument that, at best from the wife’s perspective, there was a shortfall of only $4,790 between needs and means (and that was for the 12 months to October 2013 only).  The question here is: what items may properly be brought into account in assessing the wife’s means?   The husband calculated the shortfall by deducting the WINZ benefit of $34,450 received by the wife from her actual expenditure for the year of $39,240. The husband further

contended that the wife had means to make up the difference.  These means were

34 In the Family Court judgment at [134], recorded above at [53].

jewellery owned by the wife, and said by the husband to be worth $100,000, money available to the wife from the wife’s mother, and advances the husband had made to the wife.

[94]     The wife’s means do not include the benefit from WINZ.35     Mr Jefferson argued that, although benefits cannot be taken into account when assessing ongoing spousal maintenance, they could be taken into account on claims for past maintenance.  I do not agree. The law is clear.

[95]     In relation to  the wife’s jewellery, the husband’s argument amounts to a submission that the Court can take account of property owned by an  applicant, whatever its form, and that there was an error of law by the Judge in failing to take into account the jewellery owned by the wife.  The relevant provisions of the Act are silent on the question whether capital may or may not be taken into account.  But numbers  of  the  circumstances,  or  criteria,  prescribed  in  ss 63-65  do  contain expressions clearly confined to income, or the ability to produce income, with no other expressions related to capital.   Section 65(2)(a) is fairly explicit, at least in relation to mandatory considerations in respect of means – “potential earning capacity” and “means derived from” relationship property.  And the latter, which in any event has no relevance to the present issues, is directed to means derived from relationship property, not the value of the property itself.   There was certainly no error by the Judge in failing to take  the value of the jewellery into account in

assessing the wife’s means.36

[96]     The evidence of money received by the wife from her mother, and from the company she was seeking to establish with a partner (and which she hoped would produce income in the future), was sufficient to establish that these were loans.  It was not a source of income for the wife.  The Judge was also justified in ignoring the advances made by the husband to the wife, because they were advances the wife

would in the end be required to account for by some form of set-off.  To the extent

35     Section 62 of the Act; Ropiha v  Ropiha [1979] 2 NZLR 245 (CA) at 250; Richardson v

Richardson [2011] NZCA 652, [2012] 1 NZLR 796 at [23]-[27].

36     See Collins v Collins [2014] NZHC 2121 at [26]-[27]; B v B [Maintenance] [2008] NZFLR 789 (HC) at [33]; T v H [Spousal maintenance] [2006] NZFLR 560 (HC) at [57]; FH v LH [2013] NZHC 1044 at [10]-[11]; G v G [2001] 1 NZLR 491 (HC); and M v B, above n 12, at [258].

that there were other payments by the husband to the wife which were maintenance payments, which did occur with some partial payments of the interim maintenance order, they are to be taken into account in reduction of the total amount owing for maintenance.  But they do not constitute evidence of means available to the wife to be deducted from the amount assessed as the wife’s reasonable needs.

Was the wife unable practicably to meet the whole or part of her reasonable needs because of one or more of the qualifying circumstances?

[97]    The husband’s points on appeal were directed in express terms to three qualifying circumstances only: the standard of living during the marriage (point 2); the limited relationship property pool (point 6); and inability to obtain work (point

9).  However, in the course of submissions Mr Jefferson did challenge the Judge’s findings on other qualifying circumstances.  I will consider the husband’s arguments, to the extent not already addressed, under subheadings relating to the six qualifying circumstances identified by the Judge, and in the order that they appear in s 63(2) and s 64(2).

(1)      Division of functions in the marriage

[98]     The husband argued that there was no material division of functions in the relationship; at least none that afforded a qualifying circumstance to the wife.  He contended that he was an “extremely hands on father”.

[99]     I am not persuaded that there are grounds to reverse, or modify, the Judge’s conclusion that there was a marked division of functions and that in the wife’s case this was a qualifying circumstance.  This conclusion was founded not only on the Judge’s assessment of the evidence, and the weight to be attached to it, but also on her credibility findings.  I am also satisfied that the Judge was right to conclude that this was a qualifying circumstance which endured through to the conclusion of the hearing in December 2014, and would continue to endure until August 2015 when the maintenance payments were to cease.

[100]   The husband argued that, even if there was a material division of functions during the relationship, the effect of this ceased when the parties moved to New

Zealand, or at least when the wife refused to move to Dunedin, or Auckland, or

Nelson, to re-qualify as a nurse or to complete qualifications as a dentist.

[101]   I agree with Ms Crawshaw’s submissions on this point.   The division of functions did not change when the parties moved to New Zealand  and did not improve the wife’s situation in a way material to her application for maintenance.  In respect  of  the  husband’s  argument  about  moving  out  of  Hamilton,  I  am  not persuaded that there are any grounds to interfere with the Judge’s acceptance of the wife’s evidence: that possibilities that the entire family move before the separation were not pursued because it was impracticable; and that suggestions that she should have moved after the separation were both unreasonable and impracticable.

[102]   There is a related point of principle.  It is not for the Court, after the event, retrospectively to reassess what the parties might have done.  As Rodney Hansen J said in X v X [Economic disparity]: “it is not for the Court to suggest that at some point in the marriage a different choice … could or should have been made, even if greater opportunities then existed”.37    This approach was approved by the Court of

Appeal.38

(2)      The wife’s likely earning capacity

[103] The husband did not advance substantial submissions in respect of this qualifying circumstance.  There were comprehensive submissions to the effect that there was work available for the wife which she should have undertaken, but that relates to a different qualifying circumstance –inability to obtain work.  There may be a degree of overlap of evidence relating to earning capacity and the ability to obtain work.  But they are clearly distinct concepts, and intentionally made such in s 63.  Inability to obtain work is not a qualifying circumstance under s 64, but likely earning capacity is, and the latter must have the same meaning in s 64 as it has in s 63.

[104]   An applicant’s earning capacity needs to be assessed in relation to other

qualifying circumstances, and in this case, in particular, in relation to the wife’s

37     X v X [economic disparity] [2007] NZFLR 502 (HC) at [116].

38     X v X [economic disparity] [2009] NZCA 399, [2010] 1 NZLR 601 at [102]-[103].

reasonable needs having regard to the standard of living during the marriage.  I am satisfied that the wife’s ability to become self supporting – to meet her reasonable needs  at  an  appropriate  level  –  was  adversely  affected  by  her  limited  earning capacity.  And that limited earning capacity arose because of, or was caused by, the other qualifying circumstances that applied in the wife’s case and, in particular, the division of functions in the marriage.

(3)      A limited relationship property pool

[105]   One of the husband’s points on appeal was that the Judge wrongly took into account “the limitations of the relationship property pool”.   The essence of the husband’s argument was that the Judge was effectively seeking to compensate the wife for a lack of relationship property with value of any consequence; that maintenance was being provided as a substitute for division of relationship property. There is a slightly ambiguous statement by the Judge.  She referred to contentions of the husband that the total of relationship property might not exceed $20,000 in value (and there were submissions that the wife may in fact be indebted to the husband under the Property (Relationships) Act).   The Judge then said that “any spousal maintenance award may be the only way in which the [wife] can re-establish herself after the marriage”.

[106]   I am satisfied that the Judge was not intending that maintenance should be a substitute for relationship property.   I believe that what the Judge was saying was that it appeared unlikely that the wife would obtain any substantial capital, through a division of matrimonial property, from which she could, at least in part, meet her reasonable needs.  The Judge was entitled to have regard to that potential source of means as another “relevant circumstance” in s 63(2)(a)(iii) and the corresponding

provisions in both s 64 and s 64A.39     And under s 65, in assessing quantum, the

Judge was required to have regard to the means of both parties, derived from any division of property under the Property (Relationships) Act.

39     Section 64(2)(a)(iii) and s 64A(3)(c)(iv).

(4)      Responsibilities for care of the children

[107] The husband argued that the child care arrangements did not constitute qualifying circumstances for the wife, whatever the division of functions in the marriage may have been, because the child care arrangements were those proposed by the wife and she refused to change them in ways which would have enabled her to meet her own needs.  The husband also submitted, and as a separate contention, that at least from the time both children were at school the wife’s responsibilities for care of the children had altered in a material way.

[108]   The first submission may be seen as amounting to a submission that the wife caused her own inability to meet her reasonable needs by insisting on shared child care arrangements.  It is an unattractive argument and I do not accept it.  I agree with Ms Crawshaw’s submission that the decisions about the care arrangements for the children involve considerations quite separate from those bearing on maintenance. The child care enquiry is directed principally to the children’s best interests.   The enquiry on the maintenance application is whether the actual care arrangements put in place, and in this case by agreement, had a relevant effect on the wife’s ability in a practicable way to meet her own needs. Additional arguments of the husband that he was prepared to make changes – in general terms to spend more time caring for the children  and  therefore  provide  the  wife  with  more  time  to  undertake  paid employment – do not advance the case for the husband.

[109]   The second main argument was to the essential effect that the wife should have obtained paid employment at least when the younger child started school, in February 2014, if not earlier.  This was around two years ten months after separation and six months after dissolution of the marriage.  This argument is therefore mainly of relevance to the final 18 months of the order for post-dissolution maintenance to be paid for a total of two years.

[110]   Mr Jefferson referred to cases where maintenance had ceased when a child, or the youngest child, turned five.  Ms Crawshaw cited cases where maintenance had continued after the youngest child had gone to school.  There is no need to refer to individual cases decided on their particular facts.  There is no bright dividing line in

respect of this qualifying factor based on the age of the child, or whether children have begun their schooling.  I am not persuaded that the wife’s responsibilities for care  of  the  children,  which  existed  as  a  qualifying  circumstance  at  least  until February 2014, came to an end at that date.  Attendance of the children at school did not somehow relieve the wife of ongoing responsibilities for them at times when she might have undertaken paid employment.  What it did do, in a practical way, was to reduce the amount of time that the children were in her immediate care.   But the assessment that had to be made by the Judge, and that has to be made on this appeal, is whether the wife’s responsibilities to the children, once both of them were at school, continued to impact on her ability to meet the whole or any part of her reasonable needs.  I am satisfied that they did.

[111]   There is a further important consideration.   Even if the earlier impact of responsibility for the children had diminished entirely, or at least in a substantial way,  the  other  qualifying  circumstances  remained  (other  than  the  absence  of available work following dissolution which is not in s 64).   And that observation applies in the same way to the other qualifying circumstances to the extent that any of them may have diminished or disappeared over time.

(5)      The standard of living during the marriage

[112]   I have already discussed the issues relating to the standard of living during the marriage and the impact of that on the assessment of the wife’s reasonable needs. The conclusions of fact  in that regard apply when considering this matter as  a qualifying circumstance. The evidence does not require further discussion. The high standard of living during the marriage and up to separation is a qualifying circumstance.   And it is one which had relevant effect on the assessment of maintenance for the whole of the period that the assessment was made.

(6)      Inability to obtain work

[113]   In respect of qualifying circumstances, this was another of the husband’s primary points on appeal (point 9).   The recording of the point on appeal was a condensation of a more detailed submission, but it does direct attention to what

seems to be the husband’s main contention: it was asserted that the wife was ready and available to work from 2012, but instead she set up a business.

[114]   The wife, with a partner, established a company in April 2012.  The evidence established that the wife spent a reasonable amount of time trying to develop the business.  It had not got off the ground by the date of hearing.  In cross-examination the wife said that she was trying to develop a new career for herself, having lost two others.   The essence of the husband’s argument was that the evidence justified an inference that the wife was devoting a substantial amount of time in pursuing this activity, which was not producing any income, and that as a result the wife was not undertaking  work  which  she  had  plenty  of  time  to  undertake  and  which  was available to her.   Mr Jefferson submitted that there was an error in the Judge’s conclusion that suitable work was not available to the wife, and that this error was compounded by the Judge’s failure even to address the submissions for the husband based on the evidence relating to the wife’s company.

[115]   Assuming,  without  deciding,  that  the  time  spent  on  the  company  was material, there had to be sufficient evidence not only that jobs were available but also, in terms of the statutory provision, that there was a job “reasonable in all the circumstances for” the wife to undertake and “adequate to provide for” the wife. The evidence for the husband in respect of available work was limited.  The wife’s evidence was to the essential effect that she had made significant efforts to obtain paid work, and despite responsibilities for the children.  She had also completed a computer course arranged by WINZ which was intended to extend her skills.  She had not been able to obtain employment.  The only work that she might have been able to undertake, given her responsibilities for the children, would have been part time work at a minimum wage, but this would have been dependent on a minimum wage employer being willing to provide work on a limited number of days, or for a limited number of hours and some days.

[116]   The Judge accepted the wife’s evidence.  I am not persuaded that there are any grounds to interfere with her conclusion.  And it warrants emphasis that, even if this qualifying circumstance did not apply, other qualifying circumstances did.

Effect of delay

[117]   Mr Jefferson submitted that the Judge ignored the fact that the wife had waited some two years six months after separation to bring her claim and noted that the case concluded approximately three years six months after separation and 17 months after dissolution; the Judge had simply concluded that she did not consider that the issue of delay was “of any great moment”.  Mr Jefferson further submitted:

At the time the case was heard, there was no sudden and immediate change to the [wife’s] standard of living.  By failing to undertake any analysis of the [wife’s] current financial needs the Family Court Judge has allowed her to profit significantly from her delay in bringing proceedings.   It cannot be right that an applicant can wait 3 years, bring [a] claim for maintenance, and then  be  awarded  a  significant  financial  windfall  based  on  an  outdated standard of living for which she produces no evidence.

[118]   There was no error of principle by the Judge.  She plainly turned her mind to the issue.  To the extent that there was some error it was that she did not provide reasons for her conclusion beyond what is implicit in her concise statement.  I am satisfied that the delay in this case is not a disentitling factor.  Apart from one other matter, which I will come to, Mr Jefferson’s submissions were founded on three decisions.40    Smith v Smith and W v C are distinguishable on their facts in terms of the standard of living enjoyed by the applicant for maintenance in the preceding period when assessed in relation to reasonable needs.  In the third case, FXJH v HY-

MY, the application was made five years after separation.  The result in that case was to reduce the claim for past maintenance from just over $37,000 to $11,440.  The Judge was not in that case purporting to apply any principle.  What is more, it was not simply the delay that resulted in the reduction, but the Judge’s assessment of the parties’ means and needs.

[119]   Some statutory basis, or principle derived from the express provisions of the Act, is needed for delay, in itself, to be a basis for reducing maintenance an applicant would otherwise be entitled to, whether that is past maintenance or future maintenance.   An assertion that the wife in this case will receive “a significant financial windfall” does not reflect the relevant provisions of the Act or any principle

founded on those provisions.   And the proposition does not in any event stand

40     Smith v Smith, above n 31, at [112]; FXJH v HY-MY FC North Shore FAM-2009-044-966, 27

April 2011 at [346]; W v C [2014] NZFC 8295 at [18] and [35].

scrutiny.   It might equally be said that an applicant who has lived in straitened circumstances for well over three years, and then receives a lump sum for those past years, suffers a loss.  There is, at a basic level, a loss of the value of the money, and a corresponding advantage to the other party.   More importantly, there is no compensation for the fact that the claimant has lived in straitened circumstances, and that could arise through no fault of the claimant in seeking to get the claim before the court.  In one of the decisions cited by Mr Jefferson there is an observation that the respondent in the Family Court “would have been justified in thinking that his

income and assets were his to apply as he wished”.41    If there is evidence to that

effect, coupled with evidence of, for example, fault by the applicant in advancing the claim, these matters may bear on decisions to be made in exercise of a discretion. But that is a different matter.

[120]   There is no principled  basis to treat  delay as  an automatic disqualifying factor, whether going to quantum or to basic entitlement.  The Act itself makes the position clear.   Section 63(1), applied directly to this case, states that the husband from the date of separation to the date of dissolution was liable to maintain the wife if the prescribed circumstances existed.  Section 64 is to the same essential effect. Section 65(2) provides that the Court must have regard to the five specified matters in determining the amount of maintenance payable both during and following dissolution.   There are four specific matters in  s 65(2)(a)-(d), none of which is concerned with delay.  Paragraph (e) refers to “any other circumstances that make one spouse liable to maintain the other”.  That could not include delay; delay is not a circumstance that made the husband in this case liable to pay maintenance to the wife.

[121]   The remaining matter, earlier adverted to, was what Mr Jefferson described as the husband’s “theory” as to why the wife had delayed in bringing her application. The theory was that the only reason the wife applied for maintenance when she did was that the younger child was about to turn five, at which point the wife would be required by WINZ to be available for work, but she did not want to work; she wanted  to  continue  to  devote  herself  to  trying  to  develop  her  business.    It  is

unnecessary to explore the theory of a party, as opposed to a submission of counsel

41     FXJH v HY-MY, above n 40, at [346].

based on the evidence.   There was no error by the Judge in failing to address the husband’s theory on this point any more than there would have been error in failing to address theories of the wife.  The relevant considerations in respect of the general matters referred to by the husband come into play under express statutory provisions. In relation to the wife, the essential question was whether, having regard to the statutory directions, she was able to meet all or some of her reasonable needs.  The Judge concluded that she could not.  I agree with the Judge.

[122]   Delay may be relevant to exercise of a discretion, but it is not, of itself, disentitling.  It did not demonstrate that the wife’s reasonable needs were lower at any particular point of time.  It did not demonstrate that at some point in time the wife was suddenly able to meet her reasonable needs.  And delay of itself did not bear on the question whether the husband could meet some or all of the wife’s reasonable needs.

The husband’s means

[123]   Mr Jefferson submitted that there was no evidence from which the Judge could have found that the husband could pay the total lump sum of $382,905 within

42 days of the judgment, and no sufficient evidence to find that the husband could pay the ongoing amount of $8,509 per month.   He submitted that the evidence showed: when the parties separated the husband was unemployed; he was in debt to his mother for £600,000; his income for the year to March 2012 was only $1,098.19 and in the year to March 2014 it was $20,830.17; and there was a deficit between his income and living expenses in the 2014  year of $141,913.07, which  had to be covered by gifts and loans from his father’s will trust and from his mother.

[124]   As noted in the factual background, the husband left his employment with the District Health Board in February 2011, following settlement of an employment dispute and payment to him of compensation of $126,078.   He incorporated a company in September 2011 to provide his specialist services as a plastic surgeon through the company.   On the basis of statements of financial performance of the company for the years to 31 March 2012, 2013 and 2014 it was making a loss.  Over those years the “trading income”, being the provision of  the husband’s services

through the company, was successively $15,267 (apparently for around four months only), $94,399 and $206,556.

[125] Mr  Jefferson  also  submitted  that  the  Judge’s  assessment  was “impressionistic”.  This was recorded at the conclusion of the written submissions on this issue as follows:

Another way of viewing the decision (although not couched in these terms) is that the Family Court Judge was essentially saying “because I perceive you to be a wealthy man, you should be paying something”.   This is a perversion of the statutory scheme.

[126]   Mr  Jefferson  submitted  that  there  were  three  primary  contentions.    The essence of these can be reduced to two propositions: (1) the husband’s means were very limited and insufficient to justify any maintenance order; and (2) money available to the husband from his mother and his father’s will trust should not have been taken into account.

Evaluation of the husband’s means

[127]   There were errors by the Judge in the figures she used for assessment of the husband’s income, although some of this may have occurred because of the way in which figures were presented in the husband’s affidavit of financial means.   The Judge referred to an annual income to April 2014 of $283,039.17 and the husband’s estimated  expenses  “for  himself  and  his  daughters”  for  the  same  period  as

$424,952.24.  $243,013.84 of the income figure was stated to be “gross income from business”.   This appears to be a reference to the gross income of the husband’s company.   The gross income figure is in fact more than the total trading income recorded in the financial statements for the year to 31 March 2014 ($206,556) so there may be some additional income from other sources.  But the important point in relation to the figure used by the Judge is that it is gross income, not only before tax but also before deduction of business expenses. The expenses figure of $424,952.24, referred to by the Judge as being expenses for the husband and his daughters, in fact includes significant expenses which appear to be for the business.   The husband’s statement of his income and expenditure does  not distinguish  in any clear way

between personal income, expenses and tax, and gross income, expenses and tax of the company.

[128]   Assuming business and personal income and expenses were combined in this way  there  were  errors  by  the  Judge  in  her  assessment  of  the  figures.    I  am nevertheless satisfied that a maintenance order assessed at $8,509 per month was justified, subject to an overall review of the total for past maintenance and the terms of payment.

[129]   The focus of the husband’s first main argument is on evidence of his actual and direct income.  This obviously is important, but it is by no means determinative. The evidence establishes that the husband’s actual income was substantially more than suggested. And his earning capacity was high.

[130]   Section 65(2)(a)(i) requires the Court to have regard to the potential earning capacity of both parties.  The focus in this part of the judgment must therefore be on the potential earning capacity of the husband as well as his actual direct and indirect income.  Mr Jefferson gave emphasis to evidence relating to the period during which the husband was unemployed, and very low actual and direct income that followed. But his potential earning capacity was high.   This is amply demonstrated by his salary as an employee of the Waikato District Health Board for the 45 week period to cessation of employment on 23 February 2011.  The income after tax was $266,540. This converts to $308,000 after tax for a full year; a monthly after tax figure is

$25,666.   This is to be compared with the wife’s reasonable needs of $8,509 a

month.

[131]   The husband’s income by way of salary from the company was modest.  It is clear enough that the low level arose in part from the fact that the business was being developed.  But the Judge also concluded that the husband chose to work reduced hours, or a reduced number of days per week.  There was no submission persuading me that this finding was wrong; that the low income was not, at least in part, the result of a choice by the husband which had the effect of keeping his income low, although his responsibilities to the children must also be brought into account.

[132]   In  relation  to  actual  and  direct  income, the  submission  for the  husband, recorded above, was that his taxable income for the 2014 year was $20,830.17.

$20,000 of that was the husband’s shareholder’s remuneration from his company. Where a professional person chooses to conduct his or her profession through a company, it is possible to reduce the direct payment to the person providing the professional service below what it would be if the professional person contracted directly with clients.  The husband is the sole director and sole shareholder of the company.  The financial information recorded in the husband’s affidavit of financial means indicates that he did not distinguish in practice between income and expenses of the company and his personal income and expenses. Analysis of the shareholder’s current account for the company for the 2014 year confirms this.  It also indicates that the husband’s actual income was substantially more than the base salary of

$20,000, and there was additional indirect income.

[133]   The current account records an opening balance in the husband’s favour of

$177,295.  This increased over the year to 31 March 2014 by a further $270,534. Two items making up the additional sum are interest of $20,000 and “income from inheritance” of $249,980 (emphasis added).   Debits against the current account include a substantial number of personal expenses.  These include: spending money

$8,050; John Deere ride-on mower $5,911; food $30,260; household and household utilities $58,372; travel and holidays $7,275; sports and leisure $14,446; and household renovations/upgrades $47,698.  The debits were offset by five items, one of which has the notation “Father’s Will Trust Payment” for a sum of $83,055. Unlike the inheritance payment there is no indication whether this sum was a loan, or a gift, or a different type of income.   The end result in the current account at 31

March 2014 was that it had increased to a credit balance in the husband’s favour of

$373,399.

[134]   The Judge referred to evidence of other direct income and other evidence of means.42     This included income of £1,900 a month from a property in  London estimated  to  be  worth  £650,000-£800,000.   There is  a  condominium  in  Florida estimated to be worth $75,000.   He had $35,153 in personal New Zealand bank

accounts and £23,892 in personal United Kingdom bank accounts (although he said

42 See above at [47].

that £17,000 had been transferred from his mother).  The house the husband lives in was purchased by trustees of a trust, a point given emphasis by the husband.  But in an email from the husband to the wife, setting out a proposal for settlement, he said that he could “see the possibility of a way for myself, or one of my Family Trusts to house you and the children” (emphasis added).

[135]   I reject Mr Jefferson’s submission that the Judge’s approach to the question of the husband’s means was simply impressionistic.   There may have been errors of interpretation of some specific figures, but the conclusion that the husband had the means to meet the reasonable needs as assessed is borne out by closer analysis of a range of figures.

[136]   The Judge was also entitled to have regard to the husband’s standard of living after separation.  He continued to enjoy a high standard of living and plainly lived in comfort.   Observations by a full Court of this Court in DG v LG are relevant.43

There was an appeal against a maintenance order.  The appellant argued that in the relevant period he had virtually no income and that all his money consisted of borrowings. The Court’s response was:

When, however, as the Judge found, the appellant had continued to live extravagantly and in the expectation that his income would return to something like its former glory, it was unfair and unrealistic for the Judge to assess the appellant as though he had no income. At the very least, the Judge was entitled to regard the appellant’s approach to his own resources and needs  as  a  reasonable  and  conservative  indication  in  respect  of  those resources and the needs of the respondent.

The first sentence may be unclear without the context.   Given the Family Court Judge’s findings in that case, what was clearly meant by the first sentence was that “it would have been unfair and unrealistic for the Judge to assess the appellant as though he had no income”.  There are material similarities between the facts of that case and the facts of this case.

[137]   The other main contention for the husband, and one advanced in other parts of his submissions, was that the availability of money from his mother and his

father’s will trust should not have been brought into account.  I do not agree.  As I

43     DG v LG [2000] NZFLR 712 (HC) at [13](b).

have already recorded, by reference to the financial statements for the husband’s company,  there  was  family money that  came  to  the  husband  as  income.    It  is recorded as such in accounts for which he was responsible as the sole director of the company.   In addition, it was clear from the evidence that further and substantial sums of money were readily available to the husband from these sources.  This is established from the evidence of the husband himself, and his mother.  The husband said that, by the date of separation, he was indebted to his mother in a sum of

£600,000.  The Judge concluded that there was no obligation to repay any of this. The husband said that there was no prospect of his mother making money available to pay maintenance to the wife, but that is not the point.  The point is that money is readily available to the husband from his mother, and from his father’s will trust, to meet his own outgoings.

[138]   I am satisfied that there is a principled basis from the relevant evidence to support the Judge’s conclusion that the husband had means to pay maintenance assessed at $8,509 a month, and to pay most of that as arrears, subject, as I have said, to an overall review of the total of the arrears and the terms of payment.

Overall assessment of quantum and terms of payment

[139]   The total liability under the Family Court maintenance orders is $433,959, leaving aside credits for some payments already made and the Family Court order for interest for late payments.  Although I am satisfied that the Judge was justified in her assessment of the wife’s needs at $8,509 a month, and her conclusion that the husband had, and has, the means to pay maintenance based on that assessment, I nevertheless consider that an overall review of the total is required. And there is also need to review the terms of payment; there was weight in the husband’s submission that an order to pay $382,905 within 42 days was possibly onerous.  But I reject the husband’s submission that there was no evidence to justify an order for a substantial lump sum payment.

[140]  With many applications for maintenance the Court is required to make assessments into the future if the claimant has established grounds for maintenance to be paid for a reasonable period of time into the future.  In this case in the Family

Court,  apart  from  the  six  month  period  from  February  to  August  2015,  the assessment could be made with the benefit of hindsight.  I have already concluded that the fact that the wife did not make her applications for interim and final maintenance until 30 months after the separation, does not in some way defeat her claim for maintenance, or relieve the husband from liability.  But in my judgment it is relevant to the broad judgment required to be made at this point.

[141]   It is a fact that, for a period after separation (and indeed commencing before separation) the husband was not in paid employment.  If the wife had applied for a maintenance order during this period, it is reasonably possible that she would not have obtained an order at that time.

[142]   Weighing against those considerations, which justify reducing the total to be paid, and in addition to conclusions already reached on the various issues there are the following considerations.   Over the period when the husband had no direct income from his own employment, and reduced income when he was establishing his company, he did not pay any maintenance, in spite of the significant financial resources readily available to him and enabling him to buy an expensive house while his wife and children lived in sub-standard rental accommodation.  The husband also has had the benefit of deferred payment for a lengthy period, with a corresponding material disadvantage to the wife.   Further, and notwithstanding the husband’s emphasis on a period of unemployment followed by low direct income, he had sufficient financial resources to offer to buy a home for the wife and the children. The offer was hedged around with conditions, but that is not relevant in the present context.    The  husband  had  also  received  the  compensation  of  $126,000  on  his leaving the hospital job, although the husband contends the wife enjoyed the benefit of part of this before the separation.

[143]   In large measure what is required is a broad evaluative judgment of fairness. This does not mean that the carefully constructed statutory provisions, which are there for the benefit of both parties, are simply to be set to one side.  But the matters now requiring consideration come within the broad discretions contained in ss 69 and 70.

[144]   In my judgment the lump sum, which is for a total of four years three months, should be reduced by $51,000.   This is a rounded equivalent of six months maintenance at $8,509 a month.  Assessment of this reduction also takes account of the fact that the husband has not paid any interest on the arrears and I consider it appropriate to set aside the Family Court order for interest; not because it was wrong in principle but as part of this overall review.  The original lump sum of $433,959 is therefore reduced to $382,959.  The amount payable is to be further reduced by the sum of any amounts already paid by the husband pursuant to the order for interim maintenance and further amounts paid by the husband pursuant to the order in my interim judgment of 26 August 2015.   I will leave it with counsel to agree on the amount or refer the issue back to the Court if need be.

[145]   The remaining matter requiring determination is the terms of payment of the lump sum.   On an assumption that the husband has already paid approximately

$99,000 the net balance now payable will be $283,959.44   The net sum, whatever the

precise amount may be, is to be paid in one sum by 24 June 2016.  If payment is not made on that date interest is to be paid at 4% per annum commencing on 25 June

2016.

Cross-appeal: maintenance to meet legal costs

[146]   The wife contended that the Judge was in error in not including a sum of

$1,666 per month for legal costs in the assessment of reasonable needs.  The Judge’s

conclusion on this claim was succinct:

[140]    … I have considered the case law in which such awards have been made.    I would have made such an order, were it not for the significant award already directed to be paid for spousal maintenance.   In the circumstances, I decline to make any award of past legal costs.

[147]   I have concluded that the cross-appeal on this issue should be dismissed, although for reasons different from those of the Judge.  My reasons, which do take

account of the submissions for both parties, can be stated reasonably concisely.

44     This is based on: (1) a memorandum of Ms Crawshaw dated 2 March 2015 stating that $43,000 for maintenance had earlier been paid by the husband; (2) the order in my judgment of 26

August 2015 with a total payable to date of $56,000.

[148]   Ms Crawshaw submitted that the wife had incurred significant costs in the maintenance proceedings, including the application for interim maintenance.  When the claim for legal costs was made, in the course of the substantive hearing now under appeal, the maintenance proceedings were effectively at an end, subject to any appeal.  There was no principled basis to include in the maintenance award a sum for

costs in those proceedings at that stage.45   Costs in the proceeding can be the subject

of a costs award and should be regulated by applying the costs rules and principles.

[149]   In addition, as Mr Jefferson submitted, there is no evidence of costs sufficient to justify any order.  The wife’s application to adduce new evidence bears on this. The evidence sought to be adduced was documentary, relating to the sum obtained by the wife on sale of jewellery and copies of invoices for legal fees.  The evidence relating to the jewellery is admissible, although I have resolved issues in that regard in favour of the wife without need to consider that evidence.  The invoices for legal fees are not admissible.  The grounds for admitting new evidence on an appeal are well established and not met in this case.

[150]   The other point is that it appears that at least until around November 2014 the wife was in receipt of legal aid and, as I understood it, by the time of the appeal was again  in  receipt  of  legal  aid.     Given  the  conclusions  already  reached,  it  is unnecessary to determine whether maintenance could be awarded for legal costs covered by legal aid, whether accrued legal aid debt or for ongoing costs, but it seems doubtful.  The legal aid regime has its own mechanisms for recovery of costs

from the other party, when appropriate.46

[151]   The wife’s legal costs claim also related to relationship property proceedings. Again, there is no evidence sufficient to make any award. As Mr Jefferson noted, the only clear evidence of legal expenses was evidence of already incurred costs of

$4,830 as at 28 November 2013, but no explanation as to what the amount related to. Any  award  for  ongoing  relationship  property  proceedings  required  a  proper

evidential foundation, even if there was no formal onus on the wife.   And the

45     C v G, above n 15.  See also: GCH v SMH [2014] NZHC 211, (2014) 29 FRNZ 727; Collins v

Collins, above n 36; cf RK v DK, above n 26, at [58].

46     And see also A v A [2001] 1 WLR 605 (Fam D).

allowance could properly only be for a limited time through to termination of all maintenance in August 2015.

[152]   I am satisfied that the cross-appeal on legal costs should be dismissed.

Cross-appeal: Family Court costs

[153]   At the conclusion of her substantive judgment, the Judge made an order that the husband pay costs to the wife on a 2B basis.  Ms Crawshaw, by memorandum, asked that the order be reconsidered and sought indemnity costs, not then particularised, on the grounds that the wife had made a Calderbank offer to settle for a sum less than the total of the order made.  This was opposed by the husband.  On

13 April 2015 the Judge issued a minute stating: “Given an appeal has been filed, I consider it inappropriate to make a costs determination until the outcome of the appeal is known”.  The wife then applied for the judgment to be recalled.  Following this Judge Riddell issued a formal judgment stating that, on review of the matters that I have just outlined, she considered that it would be inappropriate to reconsider her original decision and that any challenge to it should be by way of an appeal.

[154]   On this cross-appeal Ms Crawshaw’s submission was that the Family Court decision on costs should be set aside because the wife had not been heard on the issue and the matter should then be referred back to the Family Court.

[155]   Mr Jefferson submitted: the award of costs was within the Judge’s discretion; a case for indemnity costs has not been made out; in the Family Court the wife did not indicate that she wanted to be heard on costs; and the Calderbank letter was not referred to at trial, or on appeal.47

[156]   I  am  satisfied  that  the  question  of  costs  in  the  Family Court  should  be determined on this appeal. The wife has had full opportunity to present the argument on costs in the course of this appeal.  And although Ms Crawshaw may not have made reference to the Calderbank letter, it is in the case on appeal and I have

considered it.  To refer the matter back to the Family Court would add unnecessarily

47     A v A [2000] NZFLR 174 (HC).

to the costs of, and uncertainties for, the parties.  I am as well placed to review the matter as Judge Riddell would be if it was sent back to the Family Court.

[157]   The Judge reviewed her original decision in the light of the memoranda for the wife and husband.  She concluded that the decision should stand.  In coming to the decision the Judge was exercising a wide discretion available to her.   Having reviewed  the Calderbank offer,  and  taking account  of a wide range of relevant circumstances traversed in this judgment, I am not persuaded that there was any appealable error in the Judge’s exercise of her discretion.  This cross-appeal is also dismissed.

Costs on this appeal

[158]   Mr Jefferson advised that the husband wished to be heard on the question of costs on the appeal.  Submissions for the husband on costs are to be filed within four weeks of the date of this judgment.  Any submissions for the wife in response are to be filed within a further three weeks.  Submissions are not to exceed 10 pages.  I will determine the question of costs on the papers.

Result

[159]   The Family Court orders under ss 69 and 70 of the Act are set aside as to quantum only.

[160]   In substitution for the Family Court orders, in respect of quantum, there is an order that the husband pay the wife a sum of $382,959 no later than 4:00 pm on 24

June 2016, subject to the following:

(a)      That sum is to be reduced by the sum of all payments made by the husband to the wife as maintenance payments, whether interim maintenance or final maintenance.   The parties are to endeavour to agree on the amount.  If agreement cannot be reached the issue is to be referred back to this Court for determination.

(b)      If payment of the adjusted sum is not made by 4:00 pm on 24 June

2016 interest is to be paid at a rate or 4% per annum from 25 June

2016, save that leave is reserved to apply for further directions if any material issue arises in respect of the payment date because of difficulties in determining the net sum to be paid.

[161]   The cross-appeals of the wife are dismissed.

[162] Memoranda on costs on this appeal and the cross-appeal are to be filed as directed at [158].

Woodhouse J