Meads v Muldrew
[2021] NZHC 1864
•22 July 2021
NOTE: PURSUANT TO S 35A OF THE PROPERTY (RELATIONSHIPS) ACT 1976, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B,
11C AND 11D OF THE FAMILY COURT ACT 1980. FOR FURTHER INFORMATION, PLEASE SEE
https://www.justice.govt.nz/family/about/restriction-on-publishing-judgments/
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2021-404-000426
[2021] NZHC 1864
UNDER the Property (Relationships) Act 1976 BETWEEN
SCOTT BRADLEY MEADS
Appellant
AND
KATIE SARAH MULDREW
Respondent
TURRET TRUSTEES LIMITED
Interested Party
Hearing: 23 and 24 June 2021 Appearances:
R J Collis for Appellant
C E Wiseman for Respondent
E C Gellert and B Morris for Interested PartyJudgment:
22 July 2021
JUDGMENT OF WOOLFORD J
This judgment was delivered by me on Thursday, 22 July 2021 at 4:15 pm pursuant to r 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Solicitors: ARL Lawyers (B Sheehan), Lower Hutt, for Respondent
Lowndes Jordan (L Gellert), Auckland, for Interested Party
Counsel: CE Wiseman, Auckland, for Respondent
M Beech, Tauranga, for Interested Party
MEADS v MULDREW [2021] NZHC 1864 [22 July 2021]
[1] Scott Bradley Meads appeals against pre-trial rulings of Judge D A Burns dated 5 August 2020 and the substantive judgment of Judge R von Keisenberg dated 19 February 2021 dividing relationship property between Mr Meads and his former de facto partner, Katie Sarah Muldrew.
[2] One of the principal orders made by Judge von Keisenberg directed the transfer of 19B Cathedral Place, Parnell, Auckland, owned by a third party, Turret Trustees Limited (TTL), as the sole corporate trustee for the Turret Trust, to Mr Meads so that it could be dealt with as relationship property. TTL was not represented in the Family Court. By order dated 9 June 2021 in this Court, Venning J granted TTL leave to be joined and heard as an interested party in this appeal.
Factual background
[3] Mr Meads met Ms Muldrew in August 2011. They were both civil engineers working in Christchurch. Ms Muldrew was from the United Kingdom and had arrived in Christchurch soon after the devastating earthquake in February 2011. They quickly formed a relationship.
[4] On 1 December 2011, Ms Muldrew moved into Mr Meads’ property at 16 McLellan Place, Christchurch, a house that he had purchased in January 2011, before they had met. Judge von Keisenberg found that by June 2012 at the latest, the parties were in a qualifying de facto relationship, in that they were mutually committed to each other.
[5] The parties opened a joint ASB Bank account on 16 April 2013 in anticipation of buying property together.
[6] On 3 May 2013, the parties jointly purchased two properties situated at 1 and 16 Graycliffe Street, Christchurch, from the Mainzeal receivers when that company went into receivership. The prices paid for the properties were $368,104 and $392,308 respectively. The purchases were 100 per cent funded through ASB Bank loans. The properties were registered in the parties’ joint names.
[7] The parties moved into 1 Graycliffe Street on 25 May 2013, once a Code of Compliance had been issued. After moving into 1 Graycliffe Street, Mr Meads rented McLellan Place. The parties also rented 16 Graycliffe Street and took in flatmates at 1 Graycliffe Street. They both contributed to the ASB Bank mortgages through their joint account.
[8] On 3 May 2013, at the same time as settling the purchase of the Graycliffe properties, Mr Meads refinanced his loan over McLellan Place, moving his existing mortgage from Kiwibank to ASB Bank and borrowing the sum of $171,500 together with a revolving credit facility of $100,000.
[9] On 16 September 2013, Mr Meads incorporated Coretec Consulting Limited, a vehicle for Ms Muldrew’s earnings as a geotech engineer. The company was established to enhance Ms Muldrew’s earnings. Mr Meads was the sole director of the company and the shares were held equally by Ms Muldrew and Mr Meads. Mr Meads managed the company’s bank account, transferring funds as required.
[10]During 2014, the parties continued to live together at 1 Graycliffe Street.
[11] In January 2015, Mr Meads moved to Auckland for a one-year work contract with his employer. Ms Muldrew remained living at 1 Graycliffe Street and in that year undertook a master’s degree in engineering management. The parties commuted regularly between Auckland and Christchurch, spending time with each other during this period.
[12] In early 2015, the parties agreed to sell the Graycliffe Street properties. On 3 February 2015, the parties settled the sale of 16 Graycliffe Street for $559,000. The net proceeds of sale (after repayment of the mortgage of $334,000) was approximately
$225,000. Of this, $146,000 was directly applied to repayment of part of the McLellan Place mortgage. The balance of $78,941.80 was deposited into Mr Meads’ revolving credit facility from which a further $11,000 was applied in reduction of the McLellan Place mortgage.
[13] On 27 July 2015, Mr Meads repaid the final amount outstanding on the McLellan Place mortgage.
[14] In October 2015, Ms Muldrew travelled to Ireland to complete her thesis for the master’s degree. On 3 November 2015, five days after Ms Muldrew had departed for Ireland, Mr Meads booked a flight to spend Christmas with her. Mr Meads remained in Ireland until 20 January 2016. Ms Muldrew returned to New Zealand on 10 February 2016.
[15] Meanwhile, on 19 November 2015, the sale of 1 Graycliffe Street was settled. From the sale price of $552,000, after the mortgage was repaid, the net proceeds of sale of $140,000 were deposited into the parties’ joint bank account. The total net proceeds of the sales of both Graycliffe properties was, therefore, approximately
$365,000.
[16] At trial, Ms Muldrew gave evidence that following the sale and settlement of the Graycliffe Street properties in 2015, she and Mr Meads jointly decided to make Auckland their home. Mr Meads disputed this, saying that the relationship had ended on or about 24 October 2015. Contrary to Mr Meads’ assertion, Judge von Keisenberg found that the de facto relationship ended 10 months later, on 28 August 2016, when Ms Muldrew advised Mr Meads while they were both in Samoa that she wanted to separate.
[17] Earlier, on 16 December 2015, while Ms Muldrew was in Ireland, Mr Meads emailed her proposing that they consider buying 19B Cathedral Place together (“Have a look at this!”). Ms Muldrew says that she was initially reluctant but agreed when Mr Meads told her it was in a good school zone for any children they may have. Mr Meads claimed that she declined the proposal verbally and in light of her indication, he proceeded with the purchase himself.
[18] As noted above, on 21 December 2015, Mr Meads flew to Ireland to spend Christmas with Ms Muldrew and her family. On 20 January 2016, Mr Meads left Ireland two days earlier than planned to return to New Zealand and settle the purchase of Cathedral Place. On the same day, 20 January 2016, $101,000 was transferred from
the parties’ joint bank account to the trust account of a law firm as a 10 per cent deposit on the purchase price of $1,010,000 for Cathedral Place.
[19]On 10 February 2016, Ms Muldrew returned to Auckland.
[20] On 23 February 2016, Mr Meads transferred $33,775 from the parties’ joint bank account to the bank account of TTL, which was recorded as a loan. On the same date, Mr Meads purportedly gifted the $101,000, which had earlier been transferred to the law firm as the deposit on Cathedral Place, to TTL. On 24 February 2016, the purchase of Cathedral Place was settled, and title was registered in the name of TTL.
[21] The Turret Trust has been settled on 9 September 2011 by Mr Meads’ sister, Rachel Meads. The sole trustee is TTL, which was incorporated on 26 January 2011. The sole beneficiary of Turret Trust is Vivir Trust. In turn, Vivir Trust has multiple discretionary beneficiaries, which include Mr Meads. At the time TTL was incorporated, all the shares were held by Mr Meads’ mother, Carole Meads (Mrs Meads). The directors were Mr Meads and Mrs Meads However, Mrs Meads ceased to be a director on 31 July 2015 and a shareholder on 12 August 2015. As from that date, Mr Meads held all the shares and was the sole director of TTL.
[22] On 24 February 2016, when the purchase of Cathedral Place was settled and the title registered in the name of TTL, Mr Meads was still the sole director and shareholder of TTL. Ms Muldrew said that at the time Cathedral Place was purchased, she understood from Mr Meads that he was adding her as a beneficiary to the Turret Trust. This did not eventuate.
[23] The parties remained living at Cathedral Place until early September 2016. While they were on holiday in Samoa at the end of August 2016, Ms Muldrew informed Mr Meads that she wanted to separate. They returned to Auckland and continued living at Cathedral Place until 9 September 2016 to host a pre-arranged 30th birthday party for Ms Muldrew. Following the party, Ms Muldrew moved out of Cathedral Place.
[24] Two and a half years later, on 22 March 2019 and well after proceedings had been initiated in the Family Court, Mr Meads resigned as director of TTL and transferred all his shares to Mrs Meads. From this date, Mrs Meads was the sole director and shareholder of TTL.
Pre-trial Minute of Judge D A Burns
[25] In his pre-trial ruling of 5 August 2020, Judge Burns refused Mr Meads’ application to file five further affidavits as evidence. He also directed Mr Meads to pay one-half of the cost of preparing the bundle of documents and the full cost of a further bundle of documents relating to Mainzeal due diligence, which the Judge viewed as being of little relevance.
[26] The notice of appeal filed by Mr Meads on 25 August 2020, without the assistance of legal counsel, sought declarations:
(a)For leave to file affidavits and expert witness statements to confirm Mr Meads had no interest in property owned by a third party, held in trust.
(b)That Mr Meads’ supplementary bundle of evidence filed with the Family Court on 24 August 2020 be accepted for filing.
[27] The appeal was not able to be heard before the substantive hearing commenced in the Family Court on 30 September 2020. Following the reserved decision of Judge von Keisenberg on 19 February 2021, Mr Meads filed a second appeal. He subsequently sought leave to file seven further affidavits as evidence on this appeal. This application was heard in this Court by Peters J on 28 April 2021 and declined in a decision dated 2 June 2021. Peters J refused leave saying that the evidence was neither fresh nor cogent and was unlikely to be material.
[28] As to the second declaration sought by Mr Meads in his first appeal filed on 25 August 2020, Mr Meads did file a supplementary bundle of documents in the Family Court on 24 August 2020, which was able to be put to witnesses in the Family Court hearing.
[29] Mr Meads’ first appeal filed on 25 August 2020 is therefore dismissed, the directions sought either being dismissed by Peters J or no longer necessary, the documents having been utilised in the District Court.
Substantive Family Court judgment of Judge R von Keisenberg
[30] At the outset of her judgment, Judge R von Keisenberg noted that the parties had largely agreed on the issues for determination, which she listed as:
(a)Was there a qualifying relationship under s 2D of the Property (Relationships) Act 1976 (the Act)? If so, when did the de facto relationship commence and when did the relationship end?
(b)If there is a qualifying relationship, what is the relationship property available for division?
(c)If it is a de facto relationship of short duration, what is the relationship property still to be divided/distributed?
(d)Does s 44 apply? If s 44 does not apply, does s 44C apply?
(e)Does s 9A apply in relation to property acquired by Mr Meads prior to the parties’ relationship commencing? Does s 20E apply?
(f)Are there other adjustments which need to be made in either parties’ favour? Was Mr Meads entitled to a finder’s fee or payment claim?
[31] After recording the orders sought by the parties, the Judge turned to the first issue, that of a qualifying relationship. After reviewing the evidence, the Judge found that there was a de facto relationship between the parties of four years and two months’ duration, beginning at the latest in June 2012 and ending on 28 August 2016.
[32] Turning then to the relationship property available for division at the date of separation, the Judge noted Ms Muldrew’s claim that the proceeds of sale from the Graycliffe Street properties were relationship property. The Judge also noted her claim
that she should be compensated under either s 9A and/or s 20E in relation to McLellan Place. She further sought a share of chattels, including motor vehicles in existence at the date of separation, which were never divided.
[33] On the other hand, the Judge noted Mr Meads’ claim that, even if the Court found that there was a qualifying relationship, there was no relationship property available for division because Ms Muldrew had received her share of the proceeds of sale of the Graycliffe Street properties. Furthermore, the Judge noted that Mr Meads sought a declaration that the Court had no jurisdiction to deal with Cathedral Place, which was acquired by a third party, TTL, during their relationship.
[34] The Judge then considered the question of the proceeds of sale of the Graycliffe Street properties and noted that a key plank of Mr Meads’ argument, that there was no relationship property available for division on separation, was that he was entitled to be paid the sum of $263,000 described as a “payment claim” or what was, in effect, a finder’s fee for locating the Graycliffe Street properties. The Judge said she had little difficulty in finding that Mr Meads’ payment claim for $263,000 had no basis in fact or in law. Instead, she found that this particular claim was simply Mr Meads’ attempt to justify his appropriation of the proceeds of sale of the Graycliffe Street properties.
[35] The Judge then considered Mr Meads’ claim that Ms Muldrew had received a share of the proceeds following settlement of the sale of the Graycliffe Street properties. The Judge did not find the claims by Mr Meads to be established on the evidence.
[36] The Judge then turned to consider s 44 of the Act and noted that Ms Muldrew sought compensation under s 44 arising from the application by Mr Meads of relationship property funds to purchase Cathedral Place in the name of TTL. At the time the property was acquired, Mr Meads was the sole director and shareholder of TTL. The Judge found that the evidence before the Court in relation to the acquisition and funding of Cathedral Place was less than optimal. The Judge noted that despite discovery orders directing Mr Meads to provide all bank accounts and related documents recording his advance to TTL and its purchase of Cathedral Place, (on
5 April 2019 and 12 July 2019), he had failed to produce the relevant sale and purchase agreement or settlement statement.
[37] Because of Mr Meads’ poor response to discovery, a further application for discovery was made. This time against TTL as a non-party. The Judge noted that Judge Burns made orders against TTL to produce all the solicitors’ trust accounts and statements and other documentation relating to the purchase of Cathedral Place. On 9 September 2019, Mrs Meads in her capacity as trustee, filed an affidavit of documents which disclosed one document, namely a copy of a share transfer transferring Mr Meads’ shares to her on 19 March 2019. Despite Judge Burns’ clear directions that she was to produce all documentation relating to the purchase of Cathedral Place, these were not provided. In a second affidavit dated 18 October 2019, Mrs Meads disclosed five further documents, including one page of TTL’s bank account showing a deposit of $33,000 from the parties’ joint account on 23 February 2016 and a copy of a gift statement in relation to the $101,000 transferred to the law firm’s trust account by Mr Meads. The gift statement dated 23 February 2016 was signed by Mrs Meads in her capacity as “being all trustees”. Mr Meads acknowledged that there had been a mistake in that his mother had signed the gifting statement when she did not become a trustee of TTL until 19 March 2019.
[38] In summary, the Judge found that Mr Meads’ evidence under cross- examination regarding the purchase and funding of Cathedral Place, the structure of TTL, who benefited from this gifting to the trust and who the final beneficiary was, was less than satisfactory and bordered on obstructiveness. The Judge noted that Mr Meads continued to claim that TTL was Mrs Mead’s trust and that he was not a beneficiary despite having gifted the trust approximately $134,000. Significantly, the Judge said that no financial accounts were produced by Mr Meads or Mrs Meads in relation to TTL. The Judge concluded that she was satisfied that the requirements under s 44(1) had been met and that Mr Meads had disposed of relationship property to TTL with the intention of defeating Ms Muldrew’s claim. The Judge also found that it was appropriate to use her discretion to make an order under s 44(2)(a) with the result that TTL must transfer Cathedral Place to Mr Meads. In view of her finding under s 44, the Judge said she did not need to consider whether s 44C applied.
[39] The Judge then noted that the following findings flowed from the determination that s 44(1) and (2)(a) applied in regard to Cathedral Place:
(a)Cathedral Place became the family home;
(b)It was the family home at the time of separation on 28 August 2016; and
(c)Under ss 8(1)(a) and 11 the presumption of equal sharing applied.
[40] The practical result, according to the Judge, was that Mr Meads must account to Ms Muldrew for half the value of the family home as at the date of hearing. The Judge then set out directions to establish the equity in Cathedral Place.
[41] As to Ms Muldrew’s claim in respect of her contributions to McLellan Place, the Judge found that the evidence fell short of establishing the grounds required under s 9A(1) or (2) to show that Ms Muldrew’s actions or the application of relationship property resulted in an increase in value of McLellan Place. Accordingly, she found that Ms Muldrew’s claim under s 9A failed.
[42] The Judge did, however, make an order under s 20E of the Act that Mr Meads was to pay Ms Muldrew $135,000 as compensation, being 50 per cent of Mr Meads’ separate indebtedness of $271,500 secured by mortgage over McLellan Place, which was paid off during the currency of the parties’ relationship. The sums of $146,000 and $11,000 were paid from the proceeds of sale of the jointly owned 16 Graycliffe Street in February 2015. Furthermore, all rent payments from 16 Graycliffe Street had been paid into Mr Meads’ separate account which serviced the McLellan Place mortgage.
[43] As to other issues, the Judge awarded occupation rent to Ms Muldrew of half the rent that Mr Meads received from a flatmate who had been paying $250 per week for the last four years. The Judge therefore ordered Mr Meads to pay $125 per week over the period from date of separation in August 2016 until the date of hearing. Mr Meads was to pay this amount from his share of equity in Cathedral Place. Finally,
the Judge directed that Mr Meads was to account to Ms Muldrew for $5,000, being half the value of relationship chattels in his possession.
Appeal against substantive decision of Judge R von Keisenberg
[44] The initial notice of appeal against the decision of Judge von Keisenberg dated 19 February 2021 was filed by Mr Meads on 15 March 2021, without the assistance of legal counsel. Amended points on appeal were filed by counsel for Mr Meads on 24 May 2021.
[45]In closing submissions, counsel further refined the points on appeal as follows:
(a)the Judge failed to give notice to TTL, the registered proprietor of Cathedral Place, that the property could be affected by an order under the Act;
(b)the Judge wrongly dismissed Mr Meads’ claim that he was entitled to remuneration for his efforts in completing building work on the Graycliffe Street properties;
(c)the Judge erred in dealing with Cathedral Place because assets owned by a company are not beneficially owned by either party to the relationship and thus do not come within the ambit of the sharing regime of the Act. A company is a separate legal entity with its own rights and liabilities. Even if one or both of the parties are the company’s sole shareholders, they do not legally or beneficially own the assets of the company;
(d)the Judge erred in making an order under s 44(1) and (2)(a) because she could not be satisfied that Mr Meads had disposed of relationship property to TTL with the intention of defeating Ms Muldrew’s claim;
(e)the Judge erred in determining that Cathedral Place became the family home. The Judge should have applied ss 11B and 13 of the Act and awarded each of the parties a share in such part of relationship property
as it thinks just in order to compensate for the absence of an interest in the family home. Alternately, if the Court classified the funds as relationship property, it should have awarded Ms Muldrew a share of the funds invested in Cathedral Place which originated from the sale of 1 Graycliffe Street in terms of s 44(2)(a).
(f)the Judge erred in making an order under s 20E for compensation in respect of the repayment of the McLellan Place mortgage; and
(g)the Judge erred in making an order for occupation rental.
Turret Trustees Limited (TTL)
[46] TTL seeks to have the Family Court order transferring title of Cathedral Place to Mr Meads quashed. It submits that the order should never have been made against TTL in the following circumstances:
(a)Prima facie Cathedral Place does not fall within the statutory relationship property regime. It is owned by TTL for its beneficiary, Vivir Trust, and not Mr Meads or Ms Muldrew. Mr Meads has never been a trustee or beneficiary of Turret Trust, which was settled by his sister. Vivir Trust has multiple discretionary beneficiaries, including Mrs Meads’ two children, her siblings and her siblings’ and children’s children.
(b)Without hearing from TTL’s counsel and with “little evidence”, the Family Court found that TTL was a person to whom a disposition was made otherwise than in good faith or for valuable consideration and ordered the transfer of the property. Before making this order:
(i)The Court appears to have assumed that Mr Meads was a beneficiary of the trust; he was not and never has been a beneficiary of Turret Trust; he is but one of multiple discretionary beneficiaries of Vivir Trust; and
(ii)Mrs Meads’ non-appearance at Court as a witness was an issue, although 12 days prior to the hearing the Court had ordered that she could not attend.
(c)TTL was not given notice of its property being at risk in the proceeding, nor was it heard in the Family Court. TTL did not authorise Mr Meads in writing to appear on its behalf or seek the Court’s permission to do so. The mandatory requirements of s 37 of the Act were not satisfied in this case. An adjournment to give TTL proper notice was sought during the hearing but declined without reasons.
(d)It was simply unnecessary for the Family Court to make orders against TTL. The Court should be slow to make orders against a third party in circumstances where the rights between the parties could be adjusted.
Approach on appeal
[47] The Family Court at first instance has made a decision as to the duration of the de facto relationship between the parties, determined that Cathedral Place is relationship property, ordered compensation under s 20E(1)(c) of the Act and directed payment of occupation rent and a half share of chattels. The Judgment is a mix of findings of fact (after seeing and hearing witnesses), the formation of an evaluative judgment and the exercise of statutory discretions.
[48] I take into account the advantage that the Judge had of hearing and seeing the witnesses give evidence before her. I am however free to reconsider the Family Court’s decision and to substitute my own view on questions of fact and evaluation if I am satisfied that the first instance decision was wrong.1 However, to the extent that the Judge exercised a statutory discretion in reaching a decision, I must determine whether those discretionary decisions were open to her in terms of May v May.2 In the case of statutory discretions, the onus is on Mr Meads to show the Judge acted on
1 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141.
2 May v May (1982) 1 NZFLR 165 (CA) at 169-170.
wrong principle, or that she failed to take into account some relevant matter or that she took into account some irrelevant matter or that she was plainly wrong.
Discussion
Notice to TTL
[49] The Judge recorded that during his cross-examination by counsel for Ms Muldrew, Mr Meads sought to adjourn the hearing on the basis that TTL, as sole corporate trustee for the Turret Trust, had not been given proper notice. The Judge declined to adjourn the hearing. A principal issue in the appeal is whether the notice given to TTL was adequate.
[50]The requirement to give notice is set out in s 37 of the Act, as follows:
37 Persons entitled to be heard
(1)Before any order is made under this Act, such notice as the court directs shall be given to any person having an interest in the property which would be affected by the order, and any such person shall be entitled to appear and to be heard in the matter as a party to the application.
(2)In proceedings commenced after the death of one of the spouses or partners, this section is modified by section 92.
[51] The purpose of s 37 is to ensure that the interests of a third party will not be adversely affected by orders made under the Act without adequate warning and opportunity to be heard.3 Section 37 does not, however, specify any particular kind of notice.
[52] The Act is social legislation, which should be interpreted in a way which achieves its implied purpose.4 Requiring formal notice to be given to parties already before the Court, even if only as witnesses, is artificial.5
[53] Knowledge of an agent relating to the subject matter of the agency and acquired while acting for the principal is generally imputed to the principal.6 The
3 Webb v Webb [2017] CKCA at [49].
4 Property (Relationships) Act 1976, s 37.
5 Murray v Murray [2010] BCL 499 (HC) at [41].
6 Peter G Watts and FMB Reynolds Bowstead and Reynolds on Agency (22nd ed, Sweet and Maxell, London, 2020) at [8-208].
factual question is therefore whether TTL knew at all material times that a claim was being made against trust property and that it had an opportunity to be heard.
[54] I am of the view that TTL had sufficient notice in terms of s 37 because of the following factors:
(a)Mr Meads was the sole director and shareholder of TTL when he purchased Cathedral Place. He remained the sole director and shareholder until 16 months after relationship property proceedings were commenced by Ms Muldrew.
(b)A year before proceedings were commenced, Ms Muldrew’s lawyer wrote to Mr Meads:
Your relationship property pool comprises … 19B Cathedral Place, Parnell, Auckland. This property was purchased by your company Turret Trustees Limited using approximately
$140,000 of joint funds from the sale of 1 and 16 Graycliffe Street, Halswell, Christchurch and was used as your family home during your time in Auckland. Your interest in this property is clearly relationship property, regardless of how ownership is recorded on the title.
(c)Ms Muldrew’s list of assets set out in her application for orders under the Act, dated 30 November 2017, included the shares in TTL. She sought orders pursuant to s 44 of the Act to determine whether the disposition of Cathedral Place was made in order to defeat her claim.
(d)On 5 April 2019, Judge Druce made directions for discovery by sworn affidavit from Mr Meads of:
All bank account records and related documentation relevant to [Mr Meads’] advance of funds to the TTL Trust (sic) and the Trust’s purchase of the property at 19B Cathedral Place, Auckland.
Mr Beech will confirm by 10 May what ownership and/or beneficial interests [Mr Meads] may have in the Vivir Trust.
On 10 May 2019, seven weeks after he handed over control of TTL to his mother, Mr Meads filed an affidavit in which he stated:
I do not have in my possession information relating to TTL Trust (sic), nor am I a director nor shareholder nor beneficiary of this trust. I do not have control of nor ability to request the information that is being asked for.
I am not a director nor shareholder of the trustee company that was involved in the purchase of 19B Cathedral Place and do not have in my possession the information which has been requested. I have requested the information and it has not been provided.
(e)On 24 May 2019, Ms Muldrew brought two applications for further discovery: one against Mr Meads and one against TTL. At the time the address for service for TTL was still Mr Meads’ address of 19B Cathedral Place. It remained 19B Cathedral Place until 4 October 2019.
(f)On 10 July 2019 at the hearing of the applications for discovery, Mr Beech appeared for Mr Meads. Mr Beech noted that Mrs Meads had not been served with the application. When asked whether an email address for service had been provided as requested, Mr Beech told the Court he would act as a “conduit” for Mrs Meads and ensure she received copies of relevant orders or requests. At the hearing, Mr Beech provided the Court with a glossary which stated that the beneficiaries of the Vivir Trust were Mrs Meads and her children. Her children are Mr Meads and his sister, Rachel Meads.
(g)Judge Burns subsequently made orders for discovery against TTL. The Judge noted in relation to costs that he considered Mrs Meads’ relationship with her son to be sufficiently close to warrant any costs she incurred to be reserved and added to any claim for costs by Mr Meads at hearing.
(h)Mrs Meads eventually swore two thin affidavits on behalf of TTL on 9 September 2019 and 18 October 2019. On 16 March 2020, Mr Meads and his counsel were notified that Mrs Meads was required to attend the hearing for cross-examination on her affidavits. On 30 March 2020, Mr Meads was served with a further formal written notice to the same
effect. Mrs Meads chose not to attend and give evidence. It is not correct that the Court ordered that she was not to attend the hearing.7
[55] Mr Meads knew of Ms Muldrew’s claim against trust property while he was the sole director and shareholder of TTL. I agree with counsel’s submission that Mr Meads’ knowledge was imputed to and stayed with TTL after control was handed over to Mrs Meads. Mr Meads appears to know exactly what happened when Cathedral Place was purchased by TTL, although in the Family Court hearing the Judge noted there was no disclosure of any relevant documentation for the purchase or financing of Cathedral Place. In a chronology prepared by Mr Meads and filed in Court for the purposes of this appeal, Mr Meads states:
January 2016
· Scott returns early from Ireland
· 20th January transfers $101k of his compensation for completing Graycliffe properties to solicitor
· 29th January dispute with vendor for breach of vendor warranties. Vendor confirmed that roof had been repaired in accordance with building code and did work with building consent. Estimated $300,000 to repair. Vendor claims only
$60,000 to repair. $101,000 held by independent solicitor and not transferred to vendor’s solicitors.
20 February 2016
· Law Society decision directs that the $175,000 is to be deducted from purchase price of Cathedral Place and this is to be held in solicitors trust account pending resolution of dispute. Funds still held.
23 February 2016
· Scott Meads documents $101k gift of his compensation for completing Graycliffe properties to Turret Trust. $101,000 still held in independent solicitors trust account. $175,000 total still held.
· Turret Trustees Limited as Trustee of Turret Trust purchases 19B Cathedral Place for a reduced purchase price of
$835,000, $860,000 borrowed by Turret Trust.
· Carole and Paul help Scott move into Cathedral Place.
[56] In an affidavit affirmed on 28 May 2021 and filed in this Court in support of the application by TTL as trustee of the Turret Trust to join the proceedings as an interested party, Mrs Meads also discloses knowledge of the purchase of Cathedral
7 By Minute dated 8 September 2020, Judge Burns refused Mr Meads’ request to have five authors of statements attached to his affidavit be available to give evidence. Mrs Meads was not one of the five authors. Mr Meads did not seek leave to file an affidavit from Mrs Meads.
Place and the fact that at least one of two properties in Christchurch was jointly owned [by Mr Meads with Ms Muldrew]. She states:
7. On 24 February 2016 the property at 19b Cathedral Place, Parnell, Auckland (Property) was purchased by Turret Trust for $1,010,000. I annex marked “C” a copy of the sale and purchase agreement. Before it went ahead, Scott discussed with me (because of my involvement with Vivir Trust) whether Turret Trust should purchase the Property. Scott talked to me about contributing funds from a property sale, which he would gift to Turret Trust. I was aware of the two properties in Christchurch. I understood from Scott that the proceeds of one property were his own and the other property was jointly owned.
[57] The sale of 1 Graycliffe Street had settled on 19 November 2015 and after the mortgage was repaid, the net proceeds of sale of $140,000 had been deposited into the parties’ joint bank account. Mrs Meads should have known that if Mr Meads was to use joint funds to purchase Cathedral Place in the name of TTL then Ms Muldrew would have some sort of claim against the property.
Payment claim for Graycliffe Street properties
[58] Notwithstanding that the Graycliffe Street properties were purchased in their joint names, Mr Meads claims Ms Muldrew agreed that he would be compensated for his time and effort in sourcing the properties, undertaking due diligence, arranging finance, overseeing the completion of the properties and obtaining a code of compliance for them. He specifically says that in May 2013, Ms Muldrew agreed that a payment claim under the Construction Contracts Act 2002 of $263,000 was payable to him. It was issued on 26 April 2013, addressed to the “soon to be owners of 1 and 16 Graycliffe Street”, became payable in May 2013, and was to be paid on the sale of the properties, whenever that might be. Mr Meads says the amount of the claim was the difference between the purchase price and the estimated value of the properties upon completion. Mr Meads claims that he would not have proceeded with the joint purchase of the properties unless Ms Muldrew had agreed to the payment.
[59] In evidence at trial, Ms Muldrew strongly denied under cross-examination by Mr Meads that she had previously seen the payment claim prior to its inclusion in a supplementary bundle of documents prepared for the hearing. It had not been attached to any of Mr Meads’ affidavits filed earlier in the proceeding.
[60] The Judge said she had little difficulty in finding that the payment claim had no basis in fact or law. The Judge was also satisfied that Ms Muldrew had never seen a copy of the document prior to its inclusion in the supplementary bundle. No evidence was adduced by Mr Meads of any written communication between the parties at the time the properties were purchased or at the time of sale that Mr Meads was owed this fee. The Judge found that the claim by Mr Meads for payment was simply an attempt by him to justify his appropriation of the proceeds of sale of the Graycliffe properties following the event.
[61] On appeal, counsel for Mr Meads did not refer to any evidence that may cast doubt on the Judge’s findings. He merely submitted that the Judge “erred in not accepting [Mr Meads’] allocation of funds to reimburse himself for the work carried out by him on the Graycliffe properties[for] which he rightfully should have been compensated”, without identifying any particular error on the part of the Judge.
[62] There is no documented agreement between the parties about compensation for Mr Meads’ time and effort in relation to the purchase and completion of the properties. Furthermore, the Judge was entitled to accept and prefer the evidence of Ms Muldrew. She had heard the witnesses and was well placed to make an assessment of them.
[63] The use of a payment claim under the Construction Contracts Act is also quite inappropriate. The purpose of the Construction Contracts Act is to facilitate regular and timely payments between the parties to a construction contract. Mr Meads and Ms Muldrew were not parties to a construction contract and the work undertaken by Mr Meads was not construction work in terms of the Construction Contracts Act.
[64] I am not persuaded that the Judge was wrong to find the payment claim invalid and to treat the profit on sale of the Graycliffe Street properties as relationship property.
19B Cathedral Place / Order for transfer under s 44
[65] Counsel for the appellant advances three interrelated points in relation to Cathedral Place. First, it did not come within the ambit of the Act because it was
owned by a company, TTL. Secondly, it was not open to the Judge to make a finding that Mr Meads had intended to defeat Ms Muldrew’s claim when he disposed of relationship property to TTL. Thirdly, Cathedral Place was not the family home, but compensation may have been considered for the lack of a family home or in respect of relationship property invested in Cathedral Place, if the funds from the sale of 1 Graycliffe Street were correctly characterised as such.
[66] While I acknowledge that assets owned by a company are not beneficially owned by either party to a relationship and thus do not normally come within the ambit of the sharing regime of the Act, Cathedral Place was transferred into Mr Meads’ name in accordance with an order under s 44(1) and (2) of the Act. TTL is clearly a person in terms of s 44(2)(a) against whom an order can be made.
[67] The family home is also approached differently from other property. It is relationship property whenever acquired.8 Its provenance is irrelevant.9 It is accorded special status in relation to the division principles in the Act. It is sometimes said to be “entrenched”. In determining whether a property is a family home, the inquiry focuses on the use of the dwelling rather than the time of acquisition or the source of funds with which it was acquired.
[68] In Newman v Lee,10 the husband owned a property jointly with his mother. It passed to him by survivorship on her death. The family moved in and the parties separated a year later. The husband alleged that his wife had engineered the move to take advantage of the property regime. Fogarty J upheld the lower court finding that the property was the family home. In De Malmanche v De Malmanche,11 it was irrelevant that the family home had been acquired by the husband before marriage and that the mortgage had been paid with a gift from the husband’s mother.
[69] I am of the view that it was open to the Judge to find that Cathedral Place was the family home in terms of the definition in s 2 of the Act from the date of its purchase
8 Property (Relationships) Act 1976, s 8(1)(a).
9 Property (Relationships) Act, s 10(4)
10 Newman v Lee HC Greymouth CIV-2004-418-3, 23 March 2004.
11 De Malmanche v De Malmanche [2002] 2 NZLR 838, (2002) 22 FRNZ 145 (HC).
in February 2016 until the date of separation in August 2016 after an order had been made for its transfer to Mr Meads. The definition of family home is:
The dwellinghouse that both of the partners used habitually as the only family residence.
[70] This was an entirely factual question. Given the Judge’s finding that the relationship continued until August 2016, Cathedral Place was the parties’ residence for six months after it was purchased in February 2016.
[71] It was also open to the Judge to find that Mr Meads had disposed of relationship property to TTL with the intention of defeating Ms Muldrew’s claim. A similar situation arose in Re Polinghorne Trust, Kidd v Kidd,12 where the husband signed an agreement to purchase a property on behalf of himself or his nominee. Prior to settlement, a trust was established, and the husband nominated the trustees to settle the purchase. The nomination was held to be a disposition for the purposes of s 44, notwithstanding that the beneficiaries of the trust included the wife and the parties’ two children.
[72] In Kwok v Rainey,13 Mr Rainey transferred a block of land into trust during his de facto relationship with Ms Kwok. It was his separate property, but he planned to build their home on the land and wanted to protect the property from any future claim Ms Kwok may have under the Act. Section 44 is by its terms available for disposition, not just of relationship property but of separate property. The classification of the asset only becomes relevant at the end of a relationship.
[73] In Public Trust v Rogers,14 Powell J made an order under s 44 of the Act setting aside a disposition of proceeds from the sale of a family home to a company on the basis that the payment was made to defeat the claims of family protection proceedings plaintiffs.
[74] Mr Meads was quite clear in his evidence at trial that he registered Cathedral Place in the name of TTL in an attempt to ensure that Ms Muldrew would not benefit
12 Re Polkinghorne Trust, Kidd v Kidd (1988) 3 FRNZ 636; (1988) 4 NZFLR 756 (HC).
13 Kwok v Rainey [2020] NZHC 923.
14 Public Trust v Rogers [2018] NZHC 2622.
from it. As far as he was concerned, the money he put into the purchase was his own separate property and Ms Muldrew would get none of it.
[75] Section 11B provides that where there is no family home or the family home is not owned by one of the partners, the Court must award each partner an equal share in such part of the relationship property as it thinks just in order to compensate for the absence of an interest in the family home. However, here, there is a family home which is owned by Mr Meads following the order for transfer to his name made under s 44 of the Act. Section 11B therefore does not apply.
[76] Furthermore, although ss 11B and 13 are alternative compensatory provisions, they require a pool of relationship property from which an extra share can be allocated to one of the parties. In the present case, there was no relationship property of any value for division at the end of the relationship. Mr Meads had either applied it to his separate property – McLellan Place – or disposed of it to TTL to assist in its purchase of Cathedral Place.
[77] Finally, it was also open to the Judge to order the transfer of Cathedral Place to Mr Meads under s 44, rather than just the funds which had been applied to its purchase. As the Judge noted, Mr Meads and his mother did not disclose any relevant documentation relating to the purchase or financing of the property or financial statements for TTL. In those circumstances, the Judge could not be sure whether TTL could comply with any order under s 44 relating to the funds advanced. The one thing that was certain was that TTL owned the property and an order for its transfer to Mr Meads would be effective.
Payment of mortgage on McLellan Place / Order for compensation under s 20E
[78] Mr Meads claims that McLellan Place was separate property and the mortgage which was refinanced at the same time as the purchase of the Graycliffe Street properties was also his separate personal borrowing. The amount refinanced was
$271,500 consisting of a term loan of $171,500 and a revolving credit facility of
$100,000.
[79] There was some controversy at the hearing about the sum of $54,391.34, which was said to have been transferred from the funds jointly borrowed for the purchase of the Graycliffe Street properties to Mr Meads’ separate personal ASB Bank account in two tranches on 6 May 2013 and 22 May 2013. Mr Meads claimed that the funds transferred were in fact his separate property, which had been incorrectly drawn down by the bank on the purchase of the Graycliffe Street properties. Mr Meads says prior to the refinancing, the mortgage owing on McLellan Place was $171,460.17. He also had a personal overdraft of $45,669.52. These two sums total $217,129.69. Mr Meads says his separate facilities totalling $271,500 were wrongly fully drawn down first and used to fund both separate and joint purposes. The joint facilities were only partially drawn, just sufficient to fund the balance of the purchase costs after the amount drawn from the separate facility to fund the purchases. The sum of $54,391.34, which he transferred back to himself was the difference, more or less, between the separate facilities of $271,500 and Mr Meads’ indebtedness of $217,129.69.
[80] The Judge did record that Mr Meads transferred a total of $54,391.34 of jointly borrowed funds to his separate personal ASB account in two tranches on 6 May 2013 and 22 May 2013 without considering Mr Meads’ claim in detail, which she found difficult to follow.
[81] I am of the view that the claim regarding the transfer of the sum of $54,391.34 between accounts is something of a red herring. Mr Meads acknowledges using those funds to complete the construction of, and obtain the code compliance certificates for, the Graycliffe Street properties. He has itemised expenses totalling $52,910 for which he said he expected to be repaid on sale of the Graycliffe Street properties. (He says he also used $20,000 from jointly borrowed funds to complete construction of the Graycliffe Street properties). As for Mr Meads’ payment claim of $263,000, there is no documented agreement between the parties about repayment of these costs. No evidence was adduced by Mr Meads of any written communication between the parties at the time the Graycliffe Street properties were purchased or at the time of sale. If it was the separate property of Mr Meads, it became relationship property when it was knowingly used by Mr Meads for the improvement of the jointly owned Graycliffe Street properties. The Judge found that she was not able to conclude on the evidence before her that $54,000 of joint borrowings transferred to Mr Meads’ separate account
was either repaid to the joint account or otherwise taken into account through his payment of joint costs. Accordingly, the Judge found that his application for a declaration that the funds received by him were repaid failed. I am not persuaded on appeal that the Judge’s conclusion was wrong. When those funds were applied to the Graycliffe Street properties, they lost their character as separate property.
[82] Returning to the mortgage over McLellan Place, Mr Meads was indebted to the ASB Bank in the sum of $271,500 when he refinanced McLellan Place on 3 May 2013. The mortgage was fully repaid just over two years later, on 27 July 2015. Mr Meads was in a de facto relationship with Ms Muldrew during the entirety of this 27-month period. As noted above, Mr Meads says he used $52,910 to complete construction of the jointly owned Graycliffe Street properties. He also acknowledges personally receiving all the rents on the jointly owned Graycliffe Street properties, which were paid into his separate account, which serviced the McLellan Place mortgage. Counsel for Ms Muldrew estimates the amount to be approximately
$62,000 (about 90 weeks at $685 per week). Mr Meads disputes this amount. He says it was only $50,960.
[83] Then when the jointly owned property at 16 Graycliffe Street was sold, Mr Meads paid the sum of $146,000 off the McLellan Place mortgage. The final balance of $78,941 from the sale of 16 Graycliffe Street was deposited into Mr Meads’ personal bank account, from which another sum of $11,000 was used to pay off the McLellan Place mortgage. Ms Muldrew claims that other relationship property such as Mr Meads’ salary received by him during their relationship also contributed to the repayment of the McLellan Street mortgage, either directly or indirectly.
[84]In those circumstances, the Judge ordered Mr Meads to pay compensation of
$135,000, being half the McLellan Place mortgage repaid during the course of their relationship under s 20E(1)(c) of the Act. I am not persuaded on appeal that the Judge was wrong to do so.
Occupation rent
[85] Mr Meads has continued to occupy Cathedral Place since separation from Ms Muldrew. While the relationship was still ongoing, the parties had a flatmate from
March 2016 until the date of their separation in August 2016. Subsequent to separation, Mr Meads has continued to have a flatmate who has paid rent of $250 per week. Mr Meads has not accounted for one-half of the rent to Ms Muldrew.
[86] Section 18B of the Act enables a Court to order the payment of compensation to one party from the other party for contributions made after separation. The Judge awarded Ms Muldrew the sum of $125 per week from the date of separation in August 2016 until the date of hearing in September 2020.
[87] Counsel submits that the Judge erred in making an order for occupation rental for Cathedral Place in circumstances where Mr Meads occupied a property owned by another entity to which he paid rent. There was, however, no evidence led by Mr Meads to confirm the payment of any rent to TTL, which was consistent with his failure to disclose information about the purchase of the property or the financial statements for TTL. In those circumstances, on appeal, I cannot say the Judge was wrong to order payment of occupation rent of $125 per week.
Financial summary
[88] Finally, on instructions from Mr Meads, his counsel annexed a financial summary (prepared by Mr Meads himself) to counsel’s written closing submissions.
[89] The first table headed: “Separate borrowings summary” summarises Mr Meads’ personal borrowings from the ASB Bank on 3 May 2013. I accept that on that day, Mr Meads personally borrowed approximately $54,000 more than was required to repay his existing mortgage on McLellan Place and his revolving credit facility.
[90] Mr Meads says that he then used these additional funds to pay the costs involved in completing the jointly owned Graycliffe Street properties.
[91] Mr Meads’ second table is headed: “Joint costs paid out of separate funds – 12- 3194-xxxxxxx-xx (ie paid by respondent during build) repaid upon sale”. He then lists 26 payments totalling $52,910 to which he has added interest of $4,850, being 20 months’ interest at 5.5 per cent ($242.50 per month), making a total of $57,760,
which he says was repaid from the proceeds of sale of 16 Graycliffe Street on 3 February 2015.
[92] Mr Meads’ third table is headed: “Shared living costs 25th May 2013 to November 2015”. It lists rents received from flatmates in 1 Graycliffe Street (where the parties lived) and from 16 Graycliffe Street totalling $66,355. It then lists interest costs for 1 and 16 Graycliffe Street totalling $107,470.11, living costs on 1 Graycliffe Street between 3 May 2013 and 3 February 2015 of $29,803 and rental costs in Auckland of $18,500 between 15 January 2015 and 30 January 2016. Total expenses are said to be $155,773.11. Mr Meads therefore suggests that there was a deficit in shared living costs of $89,418.11.
[93] Mr Meads’ fourth table is headed: “Net contributions by parties to joint account between 25 May 2013 to November 2015”. Mr Meads says that he contributed
$108,714 net to the joint account, while Ms Muldrew only contributed $39,170 net. He then sets these figures off against the deficit of $89,418.11 listed in the third table (50 per cent of which is attributed to each of the parties) to arrive at a balance. He claims, therefore, that the account balance of $64,004.95 is owed to him, and that Ms Muldrew owes him a further $5,539.05 to cover her equal share of living costs for this period.
[94] Mr Meads’ fifth table is headed: “Amounts received by the parties upon sale of properties”. The first entry is dated 3 May 2013 and claims the sum of $263,000 is owed by the owners of 1 and 16 Graycliffe Street (Mr Meads and Ms Muldrew jointly) to himself personally. This is the payment claim which the Judge rightly found had no basis in fact or law.
[95] The second entry is dated 3 February 2015 and records $146,000 of “personally secured, jointly owned debt repaid”. This sum was directly applied to repayment of part of the McLellan Place mortgage. I am unsure if Mr Meads is here acknowledging that joint property was used to repay personal debt. I consider that it clearly was. The same entry records Mr Meads as being repaid the sum of $56,941.80, being separate property he had used to complete the jointly owned Graycliffe Street properties.
[96] The last entry in the fifth table, dated 19 November 2015, acknowledges Mr Meads’ receipt of $134,000, which included the sum of $64,004.95 he considered owed to him for the parties’ imbalanced contributions to the joint account between 25 May 2013 and November 2015 (Table 4) and a balance of $70,000.
[97] Mr Meads therefore claims that he received $216,000 in payment of debts owed, compensation paid from gross proceeds and an equitable distribution of $64,000 for his imbalanced contribution to the parties’ joint account.
[98] As to amounts allegedly received by Ms Muldrew upon sale of the Graycliffe Street properties, Mr Meads claims in the fifth table that Ms Muldrew received
$22,000 from the sale of 16 Graycliffe Street and $10,000 from the sale of 1 Graycliffe Street. He says that Ms Muldrew therefore received a total of $32,000 from the sale of the two properties, but still owed $5,500 to meet an equal share of their living costs.
[99] As to the sum of $22,000, it was paid into the parties’ joint account on 3 February 2015. At the time the account was $21,829.25 overdrawn, so the payment effectively cleared the overdraft on the joint account. Mr Meads disingenuously says he does not know how Ms Muldrew spent the money.
[100] The reference given by Mr Meads to the amount of $10,000 received by Ms Muldrew on the sale of 1 Graycliffe Street is to a personal bank statement in the name of Mr Meads. On 24 November 2015 it records a payment of $15,020 to Ms Muldrew (who was then in Ireland) and a receipt of $10,020 from Ms Muldrew. Ms Muldrew produced an email dated 24 November 2015 to explain that $5,000 was to meet ongoing expenses in Ireland while $10,000 was to be paid by way of a gift from them both to Ms Muldrew’s mother. The email states:
It’s too expensive to keep taking bits and pieces out. Could you please transfer
$15,000 into my account. That will be $10,000 for Mum and $5000 to cover the rest of my time in Ireland. I’ll transfer the $5000 from my account into the savings account …
Thanks babe xx
[101]Mr Meads therefore asserts that the sale of the Graycliffe properties generated
$0 net profit, as costs (including construction costs) exceeded revenue.
[102] I understand that these financial tables were prepared by Mr Meads himself during the Family Court hearing. His calculations are based on several erroneous premises. First, his efforts to identify and recover “separate property” as if it is a debt owed to him (Tables 1, 2 and 5) fail to recognise that personal property loses its status as separate property when it is applied to jointly owned or relationship property. Absent a contracting out agreement, separate property is simply absorbed into the pool of relationship property. This occurred when both parties contributed finances and labour to complete the construction of the Graycliffe Street properties. The capital gains made upon the sale of these houses remained relationship property when it was used to pay off the mortgage on McLellan Place, and pay the deposit on Cathedral Place. Second, Mr Meads’ estimates in relation to shared living costs (Table 3) are meaningless because both Mr Meads and Ms Muldrew were working as engineers over this period. Their income undoubtedly contributed to shared living costs, but this has not been calculated or included in the revenue column. The purported deficit is therefore meaningless. Third, the implication that Ms Muldrew “owes” a deficit on account of her unequal contribution to the couple’s joint account (Table 4) is at odds with the purposes and intent of the Act, which is to recognise that partners make different, but equally valuable contributions to a relationship. This table, again, illustrates Mr Meads’ misapprehension about relationship property. Jointly owned or relationship property was not confined to one joint account in the name of Mr Meads and Ms Muldrew. For all these reasons, I find that Mr Meads’ financial summary does not assist my assessment of whether or not the appellant’s grounds of appeal are made out.
[103] It would seem however that Mr Meads may now have a better understanding of relationship property than when he prepared this financial summary during the Family Court hearing. In a memorandum dated 10 March 2021 filed in response to Ms Muldrew’s costs submissions in the Family Court, Mr Meads states:
I treated income earned by either party as separate and only through completing a contracting out agreement with my current partner this year have I come to realise that what I thought was each partner’s separate income is considered shared property.
Date of valuation for Cathedral Place
[104] One further point to be resolved is the issue of property valuation. Counsel for Ms Muldrew notified the Court and Mr Meads’ counsel by memorandum dated 9 April 2021 that she would seek valuation of Cathedral Place at the date of appeal rather than the date of the Family Court hearing.
[105] Section 2G of the Act sets out the date at which the value of property is to be determined. It provides:
2G Date at which value of property to be determined
(1)For the purposes of this Act, the value of any property to which an application under this Act relates is to be determined as at the date of the hearing of that application by the court of first instance.
(2)However, the court of first instance or, on an appeal the High Court, Court of Appeal, or Supreme Court may, in its discretion, decide that the value of the property is to be determined as at another date.
[106] It is normal practice that property should be valued at the date of first hearing. This is on the basis that where each partner has had the benefit of increases in value in some property they have retained, it would be unfair to value only some assets at a different date.15
[107] Counsel notes that Ms Muldrew retained only her personal belongings, a lamp and a print. She has not had the benefit of any relationship property. In those circumstances, counsel submits it would be unjust for Mr Meads alone to receive the benefit of passive market increases since September 2020, the date of first hearing. There is, however, only nine months between the Family Court hearing and the appeal hearing and no evidence of what the passive market increase may have been over that time. There is a statutory presumption of valuation of property as at the date of first hearing. Ms Muldrew has not shown manifest injustice and I am not persuaded that I should depart from that presumption.
15 Scott v Williams [2017] NZSC 185, [2018] 1 NZLR 507 at [52].
Result
[108] The appeal against the judgment of Judge R von Keisenberg dated 19 February 2021 is dismissed.
[109] The orders set out in [180](a) to (e) of the judgment of Judge R von Keisenberg dated 19 February 2021 are confirmed, together with the mechanism for calculating the equity in Cathedral Place set out in [151](a) to (d) of Her Honour’s judgment.
[110]Costs are to follow the event.
Woolford J
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