North v North - [2013] NZHC 2074

RESTRICTION ON PUBLICATIONS TO COMPLY WITH SS11B TO 11D OF THE FAMILY COURTS ACT 1980.

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-002070 [2013] NZHC 2074

BETWEEN NORTH Appellant

AND

NORTH Respondent

Hearing: 30 July 2013

Appearances:

R C Knight for Appellant
M W Vickerman for Respondent

Judgment:

19 August 2013

JUDGMENT OF COURTNEY J

This judgment was delivered by Justice Courtney on 19 August 2013 at 3.00 pm
pursuant to R 11.5 of the High Court Rules

Registrar / Deputy Registrar

Date……………………….

NORTH v NORTH [2013] NZHC 2074 [19 August 2013]

Introduction

[1] Mr and Ms N are party to substantive proceedings under the Property (Relationship) Act 1976 (PRA) that have been on foot since May 2010. One of the outstanding issues is the status of a company, referred to as SOL, and the substantial debts it owed to the Inland Revenue Department (IRD) in respect of PAYE and Kiwisaver arrears dating back to 2009. SOL is controlled by Mr N but Ms N asserts that it is relationship property. This appeal concerns an order made by Judge McHardy under s 25(3) PRA directing that a payment be made to the IRD in respect of this debt from joint funds held in a solicitor’s trust account following the sale of the family home.

[2] Ms N had worked for SOL in an accounting role until November 2010. There is a dispute about the nature and extent of her authority within the company and extent to which she knew of the arrears. There is dispute about the extent to which Mr N knew of the arrears and might be responsible for them through his management of the company.

[3] In November 2012 Mr N filed an application for interim distribution seeking an order for the payment of $167,690 from the funds held in the solicitor’s trust account to the IRD in respect of the PAYE and Kiwisaver arrears. At the same time Ms N filed an application for discovery against non-parties. These applications had been signalled previously. In addition, Ms N filed an application to strike out the affidavit of SOL’s accountant, Roger Hadfield, which had been filed in support of Mr N’s application.

[4] On 25 February 2013 counsel for the parties attended a judicial conference scheduled at 11.45 am for 30 minutes for the purpose of making directions in relation to the interlocutory applications. Judge McHardy acceded to a request by Mr N’s counsel, Mr Vickerman, to deal with the substantive applications, rather than simply make directions. Over the objections by Ms N’s counsel, Mr Knight, Judge McHardy stood the matter down until 2.15 pm and then proceeded to hear both applications.

[5] In a written decision delivered on 21 March 2013 the Judge granted Mr N’s application for an interim distribution,1 dismissed Ms N’s application to strike out Mr Hadfield’s evidence and found it unnecessary to deal with the application for further discovery.2

[6] Ms N appeals Judge McHardy’s decision on the grounds that the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading North v North

Details

AGLC: North v North [2013] NZHC 2074
Case: [2013] NZHC 2074
Decision Date: 19 August 2013

CaseChat Overview and Summary

In the case of North v North, the appellant, Mr N, and the respondent, Ms N, were engaged in ongoing proceedings under the Property (Relationship) Act 1976 (PRA). The central issue revolved around the status of a company, SOL, controlled by Mr N, and its substantial debts owed to the Inland Revenue Department (IRD) in respect of PAYE and Kiwisaver arrears. Ms N argued that the company was relationship property, while Mr N claimed otherwise. The appeal before the High Court concerned an order made by Judge McHardy under s 25(3) PRA, directing a payment from joint funds to the IRD. The appeal was grounded on several grounds, including whether the Judge should have required the parties to proceed on the same day, whether the Judge had jurisdiction to make the order, and whether the Judge erred in making adverse credibility findings against Ms N without the evidence being tested by cross-examination.

The court held that there was procedural unfairness in the way the matter was handled, as the parties were not adequately notified of the substantive hearing. Moreover, the court found that Judge McHardy did not have jurisdiction to make the order under s 25(3) PRA, as it did not relate to the status, ownership, vesting, or possession of any specific property. The court clarified that the payment of relationship property to a third party without their interest in the property was beyond the scope of the provisions of the PRA. Despite the jurisdictional error, the court made a declaration that the payment made to the IRD was a payment of money vested in Mr N by way of an interim distribution under s 25(3) PRA.

The appeal was allowed, and the order made by Judge McHardy was set aside. The court declared that the payment made to SOL was a payment of money vested in Mr N as an interim distribution under s 25(3) PRA. The final orders of the court included the setting aside of the original order and the declaration regarding the vesting of the payment.

Orders