Pask v Liu - [2024] NZHC 1176

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2023-409-000576

[2024] NZHC 1176

BETWEEN
GUY KENNETH PASK

Applicant

AND

ANITA LIU

Respondent

Hearing: 6 May 2024 (via VMR at Wellington)

Counsel:

S P Rennie for Applicant G D Jones for Respondent

Judgment:

13 May 2024

JUDGMENT OF LA HOOD J

An application for a freezing order over relationship property

[1] Guy Pask (the applicant) applies for a freezing order over assets under the control of his former partner, Anita Liu (the respondent), in the context of complex relationship property proceedings.

[2] The parties separated in June 2022 following a ten year relationship, during which they accrued a significant pool of assets valued at approximately $20 million. They have one child, aged eight. Their asset pool –– comprising cash in bank accounts, three residential properties, shares in public companies, and shares in their own business, Double Lux Ltd (DLL) –– now manifests in a number of legal proceedings post-separation, in what has been accurately described by Ms Liu’s lawyers as a “battle of attrition” between the parties.

PASK v LIU [2024] NZHC 1176 [13 May 2024]

[3] In July 2023, Mr Pask commenced proceedings in the Family Court under the Property (Relationships) Act 1976 (the Act) ultimately seeking distribution orders (including interim orders), and orders for the preservation of cash and shares held by Ms Liu.

[4] On 26 October 2023, Mr Pask made this freezing order application to the High Court to freeze five Australian bank accounts and shares in publicly listed companies with a total value of up to approximately $4.5 million (the assets). Mr Pask seeks to freeze his claim to a half share of these assets. Ms Liu accepts that the assets are relationship property although there remains a dispute about how they should be divided. Mr Pask’s application for interim preservation orders in the Family Court seeks essentially the same orders sought in this Court, but the Family Court has been unable to hear that application.

[5] Most of the couple’s assets were placed in Ms Liu’s name, or with entities she controls, to prevent potential claims by Mr Pask’s former wife. Following separation, Mr Pask unilaterally appropriated the business of DLL (clients, employees, receivables, work in progress) to Studio Pask Ltd, a new company of which he is the sole shareholder. He says this was necessary due to Ms Liu’s failure to pay him a reasonable salary following separation. Consequently, the respondent is deprived of her sole income source (DLL’s profits), which Mr Pask acknowledges is relationship property.

[6] Ms Liu, as the sole director of DLL, issued proceedings against Mr Pask and Studio Pask Ltd in the Employment Relations Authority in relation to the appropriation of DLL. She has also applied to the Family Court for spousal maintenance of $45,000 per month for her deprivation of income. Meanwhile, the trustees of the Liu Family Trust, which owns two of the residential properties, have applied to 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 Pask v Liu

Details

AGLC: Pask v Liu [2024] NZHC 1176
Case: [2024] NZHC 1176
Decision Date: 13 May 2024

CaseChat Overview and Summary

Guy Kenneth Pask applies for a freezing order over assets controlled by his former partner, Anita Liu, in the context of complex relationship property proceedings. The parties separated in June 2022 following a ten-year relationship during which they accrued significant assets valued at approximately $20 million. They have one child, aged eight. The assets in dispute include cash in bank accounts, three residential properties, shares in public companies, and shares in their business, Double Lux Ltd (DLL). The parties are engaged in a "battle of attrition" with multiple legal proceedings post-separation. Mr Pask seeks to freeze five Australian bank accounts and shares in publicly listed companies valued at up to approximately $4.5 million. He claims a half share of these assets, which Ms Liu accepts are relationship property but disputes how they should be divided.

The legal issue before the court is whether the test for making a freezing order under rule 32.5(4) of the High Court Rules 2016 applies to all freezing order applications, including those in the context of relationship property disputes. The court must determine whether there is a danger that a judgment or prospective judgment will be wholly or partly unsatisfied due to the disposal of assets. The court examines the principles established in Hannay v Mount and Oak Hotels & Resorts NZ Ltd v Body Corporate 358851 and holds that the test in rule 32.5(4) applies to all freezing order applications. The court rejects Mr Pask's argument that rule 32.2 provides a separate and distinct test for making a freezing order.

The court concludes that the application should be declined because there is no danger that Ms Liu will be unable to compensate Mr Pask for any dissipation of the assets from the pool of relationship property that will be available when the Family Court makes orders for division of that property. The court notes that even if the full value of the assets sought to be frozen are dissipated, the $5.4 million remaining available will be more than sufficient to compensate Mr Pask. The court emphasises that a freezing order cannot be used to force Ms Liu, who can ultimately meet any judgment, to hold assets for Mr Pask's benefit.

The court declines the application for a freezing order and indicates that it is disappointing that appropriate undertakings could not be agreed to meet both parties' concerns. The court invites the parties to have further discussions and cautions them against further extending this litigation by arguments over costs. The court preliminarily views that Ms Liu is entitled to scale costs on a 2B basis. If costs cannot be agreed, the parties are to file memoranda within a specified timeframe.

Orders