Mowles v Thorburn
[2023] NZHC 2282
•24 August 2023
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2023-404-000443
[2023] NZHC 2282
UNDER the Property (Relationships) Act 1976 BETWEEN
KEVIN JOHN MOWLES
ApplicantAND
DIANNE LYNAIRE THORBURN
Respondent
Hearing: 17 August 2023 Counsel:
RJ Connell for Applicant
LL La Mantia for Respondent
Judgment:
24 August 2023
JUDGMENT OF DOWNS J
This judgment was delivered by me on Thursday, 24 August 2023 at 11 am pursuant to r 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Solicitors/Counsel:
Connell & Connell, Auckland. Evolution Lawyers, Auckland. LL La Mantia, Auckland.
MOWLES v THORBURN [2023] NZHC 2282 [24 August 2023]
The case
[1] Kevin Mowles wishes to appeal a decision of the Family Court concerning division of property, including relationship property, with Dianne Thorburn.1 The proposed appeal is significantly out of time. Mr Mowles applies to extend time. Ms Thorburn opposes the application. This judgment addresses whether time should be extended.
Key background
[2]The parties’ relationship began July 2004 and ended 28 February 2016.
[3] Each party owned property before the relationship. Ms Thorburn owned a home at 28A The Links, Mt Maunganui. Like Judge G J Wagner below, I call it The Links. Among other things, Mr Mowles owned 1,650 shares in Brevini New Zealand Ltd. I call them the shares.
[4]The two most important issues in the Family Court were whether:
(a)The parties had agreed, orally, to contract out of the Property (Relationships) Act 19762 in relation to The Links and the shares.
(b)If so, that agreement had effect notwithstanding non-compliance with s 21F of the Act (including, for example, that the agreement was oral, rather than in writing).
[5] In relation to (a), Ms Thorburn’s evidence was supported by evidence of two friends of the parties, her brother, and a mortgage broker. Mr Mowles was insistent in his affidavit evidence no agreement existed. Under cross-examination, Mr Mowles accepted there was an agreement, but one different to that articulated by Ms Thorburn.
1 Thorburn v Mowles [2022] NZFC 11802.
2 The Act.
[6] The trial was in February 2022 and took five sitting days. The Judge delivered her decision 18 November 2022. She concluded Ms Thorburn and Mr Mowles had agreed, orally, to contract out of the Act in relation to The Links and the shares; and the agreement should be given effect notwithstanding non-compliance with s 21F.3 The Judge, therefore, ordered Ms Thorburn receive the net proceeds from the sale of The Links, a sum of $335,000.
[7] The last day for filing an appeal was 16 December 2022. On 14 March 2023, Mr Thorburn filed his application to extend time.
Principle
[8] The overarching test for whether time should be extended for an appeal otherwise brought as of right is the interests of justice.4 Typical considerations include the length of the delay; reasons for it; the parties’ conduct; prejudice or hardship to the respondent; the significance of the issues raised by the proposed appeal, both to the parties and more generally; and in some circumstances, whether conditions may ensure the appeal is promptly heard.5
[9] The apparent merit of an appeal is relevant, but care must be taken with this consideration.6 Merit assessment in this context risks pre-judgment and must “necessarily be relatively superficial”.7 A refusal to extend time relying heavily on lack of merit should occur only when the proposed appeal “is clearly hopeless”.8
Analysis
[10]This is best conducted under each consideration.
3 The Judge dealt with other items of property too.
4 Almond v Read [2017] NZSC 80, [2017] 1 NZLR 801 at [38].
5 At [38]–[40].
6 At [39].
7 At [39(c)].
8 At [39(c)].
Length of the delay
[11] As observed, the Judge made her decision 18 November 2022, and the last day for filing an appeal was 16 December 2022. So, the application is out of time by 88 days, or 46 working days.
Reasons for the delay
[12]Mr Mowles filed a brief affidavit in support of his application, which reads:
Between the hearing and the judgment being delivered, (some 9 months), both my then solicitor Stephen Temm and my counsel Richard Gay, retired from legal practice, which I learnt after the decision was given.
After the judgment and on 4 December 2022 my wife Vicky’s godson aged 18 was killed in a motorbike accident. In addition during December 2022 Vicky contracted both shingles and Covid.
The shingles my wife contracted was in her left eye and for her it was excruciatingly painful. She took antiviral medication to stop the virus getting worse. She needed to take painkillers to deal with it as well.
She also had started losing hair although this is now back to normal.
In addition just before Christmas my manager at work to whom I reported gave short notice that he was leaving the company and this added greater strain on me because it put more responsibility and stress on me at that time during the appeal period.
As a result of the stress of the case, shingles and her godson’s death, Vicky needed to seek counselling advice from a psychologist.
Vicky’s illness had a huge toll on me while still trying to work at my employment.
As a consequence immediately after judgment, I was therefore without a solicitor or counsel. Mr Gay asked me to sign a change of representation document on 14 December 2022, in which he stepped away from the proceedings and he asked me to acknowledge that he had done so. It was prepared by Mr Gay and is attached hereto and marked “A”. It was not prepared by me. It made me feel unsupported. I signed this without independent advice. I therefore became self-represented. Also I received no contact from Mr Temm despite my attempts to do so.
Mr Gay did give me a number of names of potential solicitors or barristers to contact, but did not introduce me to them.
I have never been involved in litigation before, either civil, family or criminal.
Mr Gay advised me that I had one month to appeal but could seek leave to appeal out of time.
Mr Gay did point out to me that I may be liable for costs. We did not get the submissions from the Applicant’s counsel until 24 February 2023 in which she sought $155,558.03 costs. We were devastated as we were then advised that Mr Gay’s costs were for a similar amount, and again did not know what to do.
I found it difficult to find someone who would take the matter on. I had approached as many as a dozen lawyers to see whether they could give us assistance. None of them were prepared to take on the matter, probably at such a late stage.
We first contacted Connell & Connell by phone on approximately 7 March 2023.
I was not able to arrange a meeting with my new solicitors until Sunday 12 March 2023.
As a result, until Sunday 12 March 2023 I have had no solicitor able to give me considered advice on whether to lodge an appeal in respect of the judgment given by the Court.
I have tried to keep the Family Court Registrar informed as to my position and sought an extension of time for costs submissions until Monday 13 March 2023.
[13] Mr Connell, who now acts for Mr Mowles, described the delay as “fully explained”.
[14] Mr Mowles’ affidavit is equivocal as to when Mr Gay told him he had a month to lodge a notice of appeal. I raised this point with Mr Connell. He said Mr Gay “didn’t spring it on [Mr Mowles] on the 14th of December and I’ve had that confirmed”. Mr Connell also confirmed what he had helpfully recorded in a memorandum of counsel: Mr Gay “did earlier assist in an analysis of the judgment”.
[15] It therefore appears Mr Mowles was informed of the appeal period in reasonable time after the Judge released her decision, and given some advice about the decision. On this view, Mr Mowles’ evidence that “Mr Gay advised me that I had one month to appeal but could seek leave to appeal out of time” suggests a reasonable amount of time was still available to lodge a notice of appeal. The record precludes greater specificity.
[16] On behalf of Ms Thorburn, Ms La Mantia said Mr Mowles’ affidavit was broad-brush; did not exhibit any corroborative material, for example, email exchanges with lawyers Mr Mowles had approached after Mr Gay’s withdrawal; and therefore,
“not substantiated with evidence”. Ms La Mantia submitted the real reason for the delay concerned costs. On 24 February 2023, she filed and served a memorandum on behalf of Ms Thorburn seeking costs of $155,558.03. Ms La Mantia noted Mr Mowles referred, in his affidavit, to being “devastated” on learning “Mr Gay’s costs were for a similar amount”.
[17] In response to Ms La Mantia’s first submission, Mr Connell said the affidavit was prepared in haste.
[18] Absent cross-examination, I am not well placed to assess the accuracy or otherwise of Mr Mowles’ evidence the appeal period was marred by misfortune. But, even taking the evidence at face value, Mr Mowles does not appear to have treated the prospect of an appeal as a priority until after 24 February 2023, when he learned he was potentially liable for costs of $300,000 or more.9 Expressed another way, the various difficulties apparently confronting Mr Mowles do not appear to have been material causes of the delay, as against distressing background. Another marker supports this conclusion: Mr Gay did not withdraw until 14 December 2022, 26 days into the appeal period.
[19]It follows the delay is not explained adequately.
The parties’ conduct
[20] Under this heading, Ms La Mantia invited attention to Schedule A of her client’s notice of opposition to the application. The schedule contains a list of Mr Mowles’ alleged behaviours throughout the litigation. The schedule does not cite any instance of Mr Mowles non-compliance with court orders, or litigation-related delay. I, therefore, address the schedule later (under the banner of prejudice).
[21]No other conduct was offered as relevant.
9 Ms Thorburn’s costs of $155,558.03 and Mr Gay’s costs for “a similar amount”.
The significance of the issues raised by the proposed appeal
[22] Mr Connell has prepared a draft notice of appeal, which contains these grounds:
(a)The Court erred in fact and in law;
(b)The Court failed to give due weight to the lack of any written record or acknowledgement in writing of the alleged agreement by the parties or by any person who was independent of the parties;
(c)The Court failed to consider or give proper weight to the Appellant’s substantial contributions to the acquisition of property which was relationship property as compared to the Respondent, even when her contribution of her separate property asset, or the proceeds of sale of it, in or about 2009, to the property pool is taken into account;
(d)The Court failed to give due weight to the Respondent’s subsequent consent during the relationship to the transfer of her asset in 2009 (which asset was her separate property) to a company (a LAQC) incorporated by the parties together and for which the shares were relationship property;
(e)The Court failed to take into consideration that when the Respondent sold or transferred her separate property to the said LAQC company in 2009 she then received consideration which she applied to repay or reduce debts which were relationship debts of the parties;
(f)The Court failed to consider or give due weight to the lack of any independent advice being provided to the parties at any point in time especially in 2004 in respect of any alleged informal agreement or in 2009 in respect of the novation or variation of it;
(g)The Court failed to properly consider fully the consequences of the use and application of property that was the Respondent’s separate property.
(h)The application is made in reliance on sections 8, 9, 9A, 21F, 21H, 21J and 44 of the Property (Relationships) Act 1976.
[23] All of the proposed grounds of appeal ultimately relate to The Links; its treatment by the parties’ oral agreement; and the Judge’s decision to allow Ms Thorburn to keep the net sale proceeds of $335,000 as her property rather than dividing that sum equally between the parties.
[24] Mr Connell contended the decision raised an important point of principle as the parties transferred The Links to a loss attributing qualifying company they had established after the commencement of their relationship—hence the property had been intermingled with relationship property—and yet the Judge treated The Links as
Ms Thorburn’s own. Mr Connell said lawyers would read the decision and wonder how The Links was not relationship property within s 8(1)(ee) of the Act. The decision therefore had “precedent effect”.
[25] I disagree. First-instance decisions of the Family Court are treated, unsurprisingly, as first-instance decisions. Furthermore, the Judge appears to have treated The Links as retaining the character of Ms Thorburn’s personal property despite its transfer to the company because of the oral agreement that existed between her and Mr Mowles. Paragraphs [64], [92], and [101]–[103] of the decision say this:
[64] Ms Thorburn asserts the parties entered an oral agreement in early 2004 to the effect that, in the event they separated, The Links would always be hers and the Brevini shares would always be Mr Mowles’. She essentially asserts that by ‘The Links would always be hers’, the parties meant either the property itself, equity in the property or any proceeds of sale of the property, whatever the case might be. On that basis, she claims she is entitled to the
$335,000 from the 2015 sale of The Links to Renee as her separate property.
...
[92] I also consider that agreement was sufficiently certain. Both in cross- examination and in his submissions, Mr Gay challenged Ms Thorburn’s inconsistencies in describing the alleged agreement. He said she sometimes described it purely in terms of The Links as a property; sometimes in terms of her equity in The Links; and she alleged no mechanism by which the proceeds of sale of any property introduced by either party would entitle that party to be compensated upon separation. While I accept Ms Thorburn does describe the agreement in terms of a property, and an equity-based designation at various points in her evidence, I do not think that undermines the consensus between the parties. Instead, based on the evidence in particular of Ms Thorburn, Ms Vlasich and Mr Askwith, it seems clear the agreement was that Ms Thorburn would retain The Links or its value (for example, if it were sold, as it indeed was), whatever the case might be. In the event, The Links was sold, and I consider there was still consensus between the parties that Ms Thorburn would be entitled to the proceeds of that sale.
…
[101] Next, the Court should determine the extent to which the agreement reflects potential entitlements under the PRA. The likelihood of prejudice is greater the more the informal agreement differs from the outcome the PRA would have provided.
[102] On the one hand, it could be said that The Links could have been lost to Ms Thorburn as it was intermingled with relationship property. However had it been formally ‘protected’, that it is Ms Thorburn’s separate property accords with the PRA rules being property she owned pre-relationship (as with the Brammer pension for Mr Mowles for example).
[103] I find on balance that Mr Mowles is not materially prejudiced by enforcing the oral agreement. Had it been formally documented it would have accorded with the law in any event. It was clearly Mr Mowles’ intention right up until some point after separation. Furthermore, upholding the agreement accords with the PRA purposes and principles, in particular ss 1M(c) and 1N(c).
…
[26]So, no real issue of principle arises.
[27] Plainly, however, the case is important to the parties. If successful, Mr Mowles would presumably be entitled to half of $335,000.
Apparent merit of the appeal
[28] The parties differ in relation to this consideration. Mr Connell described the appeal as “distinctly arguable”; Ms La Mantia as “weak”.
[29]The various grounds of appeal reduce to two propositions:
(a)No oral agreement existed, contrary to the Judge’s determination.
(b)Even if it did, the agreement should not be given effect.
[30] The first proposition is heavily factual. Factual determinations are not immune from appeal, but they do attract deference, even under Austin, Nichols & Co Inc v Stichting Lodestar.10 Ms Thorburn’s evidence on this topic was supported by evidence of two friends of the parties, her brother, and a mortgage broker. Mr Mowles’ evidence on this topic was inconsistent. This aspect of the appeal presents as weak, albeit not “clearly hopeless”.11
[31] Mr Connell stressed, as an aspect of the second proposition, that the Judge “omitted” to consider the effect of the transfer of The Links to the loss attributing qualifying company. The paragraphs of the decision cited at [25] may address this. The second proposition presents as arguable, not more.
10 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141.
11 Almond v Read, above n 4, at [39(c)].
Whether conditions might ensure the appeal is promptly heard
[32]Mr Connell was prepared to accept an early, one-day fixture.
[33] Mr Connell also said I could confine leave to some grounds of appeal, and not others, in reliance on inherent power. This submission was offered without reference to authority, and I say no more about it.
Prejudice or hardship to the respondent
[34] Mr Connell submitted there was no prejudice to Ms Thorburn by an out-of- time appeal as Mr Mowles had paid $335,000 in accordance with the decision, and any ongoing stress or anxiety about the case is simply “part of the process”.
[35] I accept the first aspect of Mr Connell’s submission, but not the second. I explain, beginning with Ms La Mantia’s schedule, in which she notes Mr Mowles:
(a)Asserted in an affidavit there was a “reasonable period of time [when Ms Thorburn] was not in work” and “again there were a number of periods where she was not working and contributing financially”. The implication was that Ms Thorburn was not pulling her weight. Ms Thorburn adduced evidence from three witnesses to the effect she was a hardworking, conscientious employee. Mr Mowles did not cross- examine on this issue.
(b)Had a trespass notice served on Ms Thorburn at her workplace, after she allegedly went to one of his properties. Mr Mowles provided no evidence to substantiate the allegation. Nor did he raise the issue through counsel, with a view to dealing with it informally, and by less embarrassing or intrusive means.
(c)Asserted in an affidavit Ms Thorburn had a “chequered history with recent changes of address” and described her as “of no fixed abode”.
[36] Given this background, it is reasonable to conclude the case has caused Ms Thorburn stress and anxiety. Ms Thorburn presumably assumed Mr Mowles would not appeal when by early March 2023, he still had not done so. Now, Ms Thorburn must confront the prospect of an appeal when she might otherwise have believed, on good grounds, the case was over.12 To borrow Ms La Mantia’s submission, Ms Thorburn, “cannot move on”.
Conclusion
[37] The appeal is important to Mr Mowles and at its highest, arguable. No real point of principle arises; the case is heavily factual. Ms Thorburn would suffer some hardship if time were extended, given delay and the matters identified above. The delay is significant, and as observed, inadequately explained. Remaining criteria add little. I am, therefore, not persuaded an extension of time is commensurate with the interests of justice.
Result
[38] Permission is declined to extend time for an appeal, and the application is dismissed.
[39]I award 2B costs to Ms Thorburn in relation to the application.
……………………………..
Downs J
12 Beyond determination of costs.
0
2
1