Ngae v Yan
[2019] NZHC 566
•25 March 2019
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2018-404-001944
[2019] NZHC 566
BETWEEN TYRONE CHI LUNG NGAE
First Appellant
KO HOE NGAE
Second AppellantCHING YUN KONG
Third AppellantAND
AMANDA KOH SHEE YAN
Respondent
Hearing: 15 March 2019 Appearances:
D Zhang for the Appellants
N Farrands for the Respondent
Judgment:
25 March 2019
JUDGMENT OF HINTON J
This judgment was delivered by me on 25 March 2019 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules
…………………………………………………………………… Registrar/Deputy Registrar
Solicitors:
Amicus Law, Auckland Morrison Kent, Auckland
TYRONE CHI LUNG NGAE v AMANDA KOH SHEE YAN [2019] NZHC 566 [25 March 2019]
[1] The appellant is seeking to adduce further evidence on a relationship property appeal to be heard on Thursday, 2 May 2019.
[2] Before turning to the particular case, it is important to re-state the law in regard to adducing evidence on an appeal, particularly with regard to factually dense litigation such as this.
Test for adducing evidence on appeal
[3] Under r 20.16, a party to an appeal may adduce further evidence only with the leave of the court.1 Leave will only be granted if there are special reasons to admit the evidence. The new evidence must generally be fresh, and must be cogent and credible.2
[4] I should add that, although the test has long been stated in that way, given cogent means “convincing”, I do not see that a great deal is added by the word “credible” in this context.
[5] As with any evidence to be adduced, new evidence also has to be relevant and, certainly in the context of relationship property proceedings such as this, it would have to be material, not evidence of relatively minor significance.
[6] The appellant argues that evidence that does not count as being “fresh” can still be adduced if it is cogent and credible.
[7] As Mr Farrands for the respondent submits, that is not correct. There can be circumstances where evidence that is not fresh is admitted, but those circumstances will be exceptional, as well as meeting the two other criteria.
[8]This last point was addressed in Rae v International Insurance Brokers Limited
as follows:3
1 High Court Rules 2016, r 20.16.
2 Rae v International Insurance Brokers (Nelson Marlborough) Ltd [1998] 3 NZLR 190 (CA) at 192; affirmed in Paper Reclaim Ltd v Aotearoa International Ltd (Further Evidence) (No 1) [2006] NZSC 59, [2007] 2 NZLR 1 at [6].
3 Rae at 193.
While the absence of freshness is not an absolute disqualification, the criteria for admission in such circumstances must be very strict. In our view, when the evidence is not fresh it should not be admitted unless the circumstances are exceptional and the grounds compelling. In addition, it will need to pass the tests of credibility and cogency.
[9] Evidence that is not fresh is likely to be admitted in the present context, for example, where the Family Court Judge has found that a material asset is owned by one party, but it can be demonstrated by independent documentation that the ownership is otherwise.
[10] The appellant suggests that the general lack of onus in relationship property proceedings favours a broader approach to allowing in new evidence on appeal. That might impact where evidence was available to one party, but not, for good reason, to the party now seeking to adduce it. However, that would likely qualify as special or exceptional circumstances. The test for adducing new evidence in relationship property proceedings is essentially the same as in civil proceedings.
[11] I note that counsel for the appellants seemed, as is not uncommon, to be confused by the fact that the appeal is by way of rehearing, thinking that also opened the door to new evidence. That is incorrect. The appeal is by way of rehearing on the basis of the evidence available to the Family Court Judge, that is the existing Court record. The word “rehearing” is a little unhelpful in this context. It means the appeal court can form its own view, but on the basis of the record and with due deference to the expertise and fact-finding role of the lower Court.4
[12] There are very good reasons for the “rule” in Rae, and for a fairly strict approach being taken to adducing further evidence, including in the context of relationship property proceedings. Otherwise, there is a risk of substantial re-litigation of the substantive case, which is not in the interests of the administration of justice and is highly prejudicial to the other parties. In a case such as this, real practical difficulties can arise. It may be impossible or difficult to fairly evaluate the new evidence against all of the other evidence at trial, which will generally have been substantial in itself. That is particularly so in cases where the evidence is technical, and/or would require
4 Austin Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [4]–[6].
expert evidence to evaluate. In many instances, a respondent would be entitled to the opportunity to rebut the evidence, and cross-examination then becomes necessary. Also, a number of issues can overlap. Had the Family Court Judge had the new evidence before them, they might have made different findings in other regards. In short, introduction of new evidence on appeal has to be closely confined.
The Family Court judgment
[13]I now turn to the particular facts here.
[14] The parties were in a relationship of some sort, but the first appellant, Mr Ngae, disputed that it was a qualifying relationship. He said the parties pretended to be in a serious relationship, to enable Ms Koh to gain immigration status in New Zealand. There were no children. They had purchased a residential property at Burt Road, Mt Wellington in their joint names.
[15] Burt Road was purchased for $935,000, with $335,000 funded by the first appellant’s parents (the second and third appellants), and $600,000 borrowed from the ANZ Bank. The second and third appellants argued that they were the true owners of Burt Road and/or the $335,000 was a loan.
[16] Judge Parsons delivered her judgment on 13 August 2018 after a three-day hearing in May 2018. The judgment was very lengthy, occupying 209 paragraphs.
[17] Judge Parsons found that the parties were in a short-term de facto relationship of two years and six months.
[18] Because it was a short de facto relationship, Ms Koh had to show substantial contributions, making it seriously unjust that orders not be made, and if so, then the Court had to divide the property in accordance with the parties’ contributions to the relationship. There is no presumption of equality.
[19] Judge Parsons found that Ms Koh made substantial contributions to the relationship, which the Judge recorded as giving up an existing life and work in Malaysia to move to New Zealand to pursue a relationship with Mr Ngae; financial
and emotional support of him during periods of non-employment and retraining; lending him $24,000 on arriving in New Zealand to assist with paying off debts; organising and assisting with joint travel and holidays overseas; assisting Mr Ngae to reduce his debts; assistance in looking for a property to purchase; jointly applying for and gaining an ANZ home loan to aid in the purchase of the home; assistance in organising the loan and sale and purchase of the home; management of the property, including managing a tenancy/boarders, paying bills and making sure the mortgage was paid; cooking and cleaning the home with Mr Ngae; and assisting at times with his mother.
[20] The Judge found that failure to make orders would result in serious injustice. As part of her consideration in that regard she said that the general financial position of the parties at the commencement of their relationship was one of not owning anything of substantial value, and she said:
By the end of their relationship, the financial position of the parties was that they each had bank accounts (he with approximately $10,000 in his separate account and she with approximately $80,000 in hers). They each had cars (or profits from sale of the car), and they are each joint owners of the Burt Road property. The chattels are worth approximately $4,000-$6,854 and the applicant’s necklace (acknowledged to be separate property) another $4,800.
[21] The Judge said, if the Court did not intervene, they would each retain the chattels and bank balances, but the ownership in the Burt Road property would remain undivided. There would then be proceedings to sort that ownership under the Property Law Act. There would be a question as to whether Mr Ngae’s parents would seek to make any claims in that context. The Judge said that Ms Koh, as joint-owner of Burt Road, had a right to seek to have that ownership realised. She said that there would be a serious injustice in failing to intervene in the property dispute, as it would result in unresolved issues between the parties and further costs and delays.
[22] The Judge then decided that money provided by the second and third appellants to the first appellant was a gift and not a loan and that they did not have a legal interest in the Burt Road property.
[23] The Judge considered that the net value of the relationship property pool was approximately $635,000-$775,000. That basically reflected an allowance of
$1.25-$1.4 million for the value of Burt Road, less $633,000 relationship debt.
[24] There were, as noted in the passage quoted earlier, other minor assets that the Judge classified as relationship property. I return to these. Of the two bank accounts ($81,000 in the name of Ms Koh and $10,000 in the name of Mr Ngae), the second was agreed as separate property and the Judge found the first was also separate property.
[25] The Judge then set out each party’s contributions to the relationship. She assessed the parties’ non-monetary contributions as 60 per cent by Ms Koh and 40 per cent by Mr Ngae, and their monetary contributions as equal, except for the gift of
$335,000 made by Mr Ngae’s parents to him. She said there was misconduct by Mr Ngae in terms of signing for a flexi-loan by forging Ms Koh’s signature and that was misconduct that could be taken into account in determining the monetary contributions of the parties. So, whereas she would have assessed Mr Ngae’s monetary contribution at 95 per cent after taking account of the gift from his parents, she assessed it at 90 per cent to take account of his gross and palpable conduct.
[26] Weighing up the contributions, the Judge decided Ms Koh was entitled to 25 per cent of the net relationship property pool, and Mr Ngae 75 per cent. She directed a sale of Burt Road, with division to follow.
[27] Judge Parsons ordered Mr Ngae to pay $30,250 for post-separation contributions of Ms Koh, and also ordered him to pay three per cent interest from separation.
Material changes since the Family Court judgment
[28] There have been two very material developments since the Family Court judgment, on which the parties are broadly agreed.
Respondent accepts most of her bank account is not her separate property
[29] I have noted that the Judge found that the respondent’s bank account was her separate property. That was based on the respondent’s evidence that the account was all money she had prior to the relationship. It appears that the appellant had not challenged that evidence prior to the hearing, nor had he requested the respondent’s bank statements, so they were not in evidence, or available for purposes of cross-examination.
[30] On 27 November 2018, subsequent to filing of this appeal, the respondent provided her bank statements. She acknowledges that it was wrong for her to say that the account was all pre-relationship money. She accepts that the bank statements will come into evidence on the appeal, should it proceed.
[31]What the bank statements actually show is that there was only approximately
$24,000 in the account at the date the Judge found the relationship commenced, namely September 2013. The balance has all been deposited since, with quite a number of debits and credits appearing over the short period of the relationship. The respondent not only concedes provision of the bank statements, but concedes, as it would appear she has to do, that “up to $57,000” of the money in the account at the date of separation could be relationship property.
[32] On the face of it, not only would $57,000 be relationship property, there would be a question as to whether the $24,000 in the account at the outset has been intermingled and its character therefore lost. I proceed on the basis it remains separate.
[33] I am advised by Mr Farrands that there has been some post-separation payment from the respondent to the appellant from that account, to the order of $10,000, or perhaps a little more.
[34] The consequence of this change is that the amount by which the respondent has been out of pocket significantly reduces, as she has had possession of more relationship property than thought.
Burt Road not worth more than $1 million
[35] The other significant development is that the parties now agree that Burt Road is likely worth not more than $1 million, and after costs of sale will likely net less than
$1 million.
[36] This significantly reduces the approximate net relationship property, which further reduces the amount outstanding to the respondent.
Overview of likely relationship property division
[37] The two developments noted above make a very material difference to this case.
[38] My analysis below is broad-brush and makes some assumptions that may be favourable to one side or the other, but, on the new figures, I consider it realistic.
[39] The relationship property now comprises Burt Road, the parties’ two vehicles worth $9,150 and $23,000, the respondent’s bank account of $57,000, family chattels of $5,000 odd and a necklace worth $4,800.5
[40]Treating Burt Road as worth $1 million, less the total relationship debt of
$633,000, the approximate equity of that property is $367,000.
[41]The total net relationship property is therefore approximately $466,000.
[42] The Judge has awarded Ms Koh 25 per cent. Assuming that stands up, she would be due in total about $116,000. But she already has her motor vehicle worth
$23,000 and, say, $47,000 retained by her from her bank account, allowing for a
$10,000 payment to Mr Ngae. That assumes she retained no part of the chattels, or the necklace, (which is in dispute). On that basis, she would only be due about $46,000 from the appellant for her share of the relationship property.
5 I comment on the necklace later.
[43] These are obviously rounded numbers, but it is important for everyone to bear these numbers in mind, on both this application and the appeal.
[44] The Judge also directed that Ms Koh be paid approximately $30,000 by way of occupation rent, and similar post-separation adjustments. And she ordered that interest be paid to her at three per cent per annum.
[45] In light of the numbers as they are now broadly agreed, Ms Koh is due so little, that the concept of her receiving occupation rent is most unlikely to stand up. In real terms, her post-separation “investment” in Burt Road is no more, and has been no more since separation, than $46,000 out of a total property value of $1 million.
[46] Pretty clearly, and I have no doubt the Judge would have taken the same approach based on the above figures, any post-separation adjustment would be by way of interest (not occupation rent) on the amount due to Ms Koh for the period (at most) between separation and now. Any other form of adjustment seems to be unjustifiable and unnecessarily complicated, plus that also disposes of the appellant’s argument on appeal that he should receive an adjustment for payment of post-separation outgoings on Burt Road. All mortgage and other outgoings would remain to his account.
[47] The appropriate interest rate may be a matter for argument, but allowing say four per cent per annum for three years, that would represent approximately $6,000, such that Ms Koh would be due about $52,000.
[48] I note the point flagged by the Judge that, if Ms Koh’s bank account were included as relationship property, her percentage contribution might need to be re-assessed, there being a further contribution “from her”. However, that seems to be based on a scenario of the bank balance still being sourced from separate property, but having converted to relationship property. That is not, however, the case. That part of the account that is now being categorised as relationship property, has been acquired during the relationship, effectively out of rental from Burt Road. That is not a contribution “from Ms Koh”. I do not see the corrected classification of that money altering the Judge’s assessment of the parties’ respective shares. Standing back, a
75/25 division seems more than fair to the respondent, and she has not cross-appealed that finding.
[49] As I said to counsel after exploring these points with them, there is only modest money at stake. The proceeding needs to be settled promptly.
The evidence sought to be adduced
[50] Putting to one side the respondent’s bank statements, which now come in by consent, there are three categories of other evidence the appellant seeks to adduce:
(a)Evidence of post-separation contributions.
(b)Further bank statements of the appellant and a forensic report of Ms Payne analysing all payments during the relationship.
(c)Evidence of a Police complaint regarding the respondent’s necklace.
[51]This evidence occupies two large bound volumes.
[52] At the end of the hearing, the appellants’ counsel, Mr Zhang, said he would accept a ruling that none of the evidence be admitted, but he still sought a judgment.
Post-separation payments
[53] The appellant wants to introduce evidence of all of the post-separation expenditure in support of his claim for an adjustment regarding that expenditure.
[54] This evidence is not fresh and there are no exceptional circumstances justifying it being admitted. To the contrary, it is far too detailed and convoluted to be allowed in on the appeal.
[55] As I have already noted, I doubt this evidence will even be relevant. In light of the material agreed changes in the case, it seems inevitable in terms of post-separation adjustments that there would be just one adjustment reflecting the reality that the house has been in effect owned by the appellant since separation
(treating the debt as his full responsibility), and the respondent has been owed a modest cash sum. There is no need then to be troubled by who has paid what, or who has failed to receive what, since separation. Post-separation adjustment becomes a relatively simple matter.
[56] Even if that were not the view taken on the appeal (if it proceeds), I am sure there is sufficient evidence on the record for the appellant to still run his argument, particularly in terms of the major expense of interest, as against the realistic benefit to him in occupying/letting the property. To the extent there is a shortfall in the evidence, that is the appellant’s problem. Convoluted evidence of this nature cannot be let in on appeal.
[57] I note in this regard that Mr Zhang confirmed that there had been little, if any, reduction in principal on the mortgage, so no adjustment is sought in that regard.
The appellant’s bank statements and Ms Payne’s report
[58] The appellant then seeks to adduce extensive evidence of his own bank statements and a very long report by an accountant purporting to analyse the expenditure of the parties during the relationship.
[59] I asked the purpose of doing so and was told that this was relevant to show the respondent’s financial contributions; his family’s financial contributions over and above their payment for the purchase of the house; the flow of funds generally, and the source of the $81,000 bank account.
[60] I reject the application in respect of all of this material. None of it is fresh. Again, there are no exceptional circumstances, and it is very lengthy and convoluted.
[61] This evidence is also of little relevance. The parties’ financial contributions are in fact a relatively simple matter, as can be seen from the Family Court judgment. There was little at the start. They each earned income at different points in the range of $30,000-$40,000 per year. The appellant’s parents gifted him $335,000 and any other money came from Burt Road rental, which they equally managed.
[62] It is too late to adduce evidence of financial contributions, over and above the sum of $335,000, from the appellant’s family. Further, it may be that these, in any event, were applied to pre-relationship debts of the appellant’s, the extent of which is itself unclear.
The necklace
[63] The necklace was valued at the princely sum of $4,800. The Judge ultimately classified it (several times) as relationship property, although describing it in the passage cited above as separate property. Neither counsel referred before me to any issue about the Judge’s classification.
[64] The issue raised by the appellant on appeal is that the Judge wrongly found, in a Minute subsequent to her judgment, that the necklace was in the possession of the appellant, when he says it was in the possession of the respondent. The appellant wishes to adduce evidence of a Police complaint he made, to the effect that the necklace had been taken from Burt Road by the respondent.
[65] This evidence is not fresh. It is not even cogent in the sense that it does not prove who actually had possession of the necklace as at the time of the hearing.
[66] Even more importantly, this is simply de minimis. On the basis the necklace is relationship property, it would only involve the appellant’s paying at most $1,200 to the respondent for her 25 per cent share of it.
[67] I am sure the parties are capable of sorting this issue between them. They know who actually has the necklace.
Conclusion
[68] I therefore decline to admit any of the additional evidence sought to be adduced, save for the respondent’s bank statements, which come in by consent. The other proposed evidence is not fresh, and there are no special reasons justifying its being allowed in. Extensive documentary and expert evidence is not appropriate on appeal.
[69] On a current analysis of the relationship property, the rejected evidence is also of minimal likely relevance.
[70] Based on the above, the parties should be settling this matter as soon as possible. In light of the figures as now known, it is clearly not in the interests of either party for the proceeding to go on. I understand there is an outstanding issue as to costs in the Family Court. The Family Court Judge should be provided with a copy of this judgment, in addition to the submissions she already has, but, other than the point relating to the respondent’s bank account, I do not see my decision making any material difference to her costs judgment. She proceeded on the basis of information provided to her by the parties at the time and it seems that the major issues in the Family Court were whether there was a de facto relationship and the ownership of Burt Road, or related claims on the part of the second and third appellants.
[71] The respondent is entitled to category 2B scale costs on this application. Even allowing for admission of the respondent’s bank statements, that point was conceded ahead of the hearing, and the appellant has failed on the application in substantial part.
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Hinton J
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