PB v BJB
[2014] NZHC 3165
•11 December 2014
NOTE: PURSUANT TO S 35A OF THE PROPERTY (RELATIONSHIPS) ACT 1976, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B TO 11D OF THE FAMILY COURTS ACT 1980. FOR FURTHER INFORMATION, PLEASE SEE COURT/LEGISLATION/RESTRICTIONS-ON-PUBLICATIONS.
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2014-404-000736
CIV-2014-404-001148
CIV-2014-404-001294 [2014] NZHC 3165
BETWEEN PB
Appellant
AND
BJB Respondent
Hearing: 3 September 2014 Appearances:
Appellant in Person
Lady Deborah Chambers QC and Peter McCutcheon for the
RespondentDate ofJudgment:
11 December 2014
RESERVED JUDGMENT OF MOORE J
This judgment was delivered by on 11 December 2014 at 11:00am pursuant to Rule 11.5 of the High Court Rules.
Registrar/ Deputy Registrar
Date:
PB v BJB [2014] NZHC 3165 [11 December 2014]
Contents
Paragraph
Number
A. INTRODUCTION .........................................................................................[1] B. THE APPEALS ............................................................................................[12] First appeal (Oral judgment – 3 March 2014)..............................................[13] Second appeal (Minute – 16 April 2014) .....................................................[21] Third appeal (Reserved decision – 23 May 2014) .......................................[24] Exchange rates .............................................................................................[26]
C. APPROACH ON APPEAL..........................................................................[29] D. FIRST APPEAL (ORAL JUDGMENT – 3 MARCH 2014)........................[33] Unfeasibility .................................................................................................[35] Trans-Tasman Proceedings Act 2010 ...........................................................[42] Gilbert J’s decision .......................................................................................[45] Contempt of Court .......................................................................................[51]
E. SECOND APPEAL (MINUTE – 16 APRIL 2014)......................................[64] F. THIRD APPEAL (RESERVED DECISION – 23 MAY 2014) ...................[69] Sale of the family home ...............................................................................[73] Maintenance order........................................................................................[85] Jurisdiction .......................................................................................[86]
Quantum ...........................................................................................[92] Duration..........................................................................................[102] Repugnant to justice .......................................................................[107] Unilateral deduction .......................................................................[109] Transfer of funds ........................................................................................ [114]
G. RESULT .....................................................................................................[123]
A. INTRODUCTION
[1] Mr B, the applicant married Mrs B in 1990. They separated 20 years later. Their marriage was dissolved on 29 June 2011.
[2] When they married, Mrs B was aged 25 and Mr B 47, an age difference of 22 years. At the time they were married Mr B was an independently wealthy retired German lawyer. Mrs B was an intermediate school teacher. Immediately after marriage Mrs B ceased work, focusing her energies on the home.
[3] The couple enjoyed the benefits of wealth, living together in an expensive home on Remuera Road, cruising around New Zealand and beyond aboard their 55 foot yacht and travelling extensively internationally. The couple had two children, now aged 20 and 22 respectively. One is a university student living with Mrs B in a rented flat. The other lives with Mr B in the former matrimonial home.
[4] At the beginning of the marriage Mr B had considerable wealth in three Lichtenstein companies. In 2007 two of the companies were liquidated so all assets are now held by the parties directly. The third company has no value. Neither worked in outside employment during their marriage. They lived off the proceeds and income of capital. They worked on developing their Remuera home and their properties in Germany. Mrs B received two inheritances totalling $330,000 which was applied to the relationship.
[5] Since their separation the parties have been locked in a vitriolic and sustained dispute over the relationship property. Mrs B claims that the total value of the relationship estate is in the order of $9.5 million and includes:
(a) the former family home in Remuera (valued at $2.35 million in
November 2011);
(b)two foreign currency bank accounts in the parties’ joint names. These have a combined balance of $4.4 million. Of those accounts, the most significant is held with the ANZ in Sydney containing Swiss Francs (CHF) with a value of approximately NZ$3.77 million;
(c) three properties in Germany estimated to be worth approximately NZ$3 million. One of the properties is tenanted and owned by a partnership consisting of Mrs B and their two daughters. All partners are required to authorise distributions from the partnership bank account;
(d) the 55 foot yacht; and
(e) other miscellaneous assets, including a valuable art collection, a debt, litigation proceeds, motor vehicles, etc.
[6] Mr B appeals three judgments delivered by Judge M Southwick QC in March, April and May 2014. Although there is some overlap, each relates to a different aspect of the relationship property issues engaged between the parties. For convenience the three appeals were heard together before me.
[7] While some insight into Mr B’s attitude towards his former wife as well as to the Family Court may be gleaned from the submissions filed in this Court as well as the subject matter of the appeals themselves, it is both instructive and relevant to record the observations and comments of Judge Southwick who assumed primary judicial responsibility for these proceedings. She heard the substantive claim over three days in October 2013. She also presided over associated hearings and telephone conferences both before and after that hearing.
[8] In her judgment on the substantive matter, her Honour observed that although Mr B did, throughout the proceedings, insist that no orders could be made in the local jurisdiction until the disputes in relation to the German property interests were finalised in that country he took no steps to file proceedings in Germany despite the parties having been separated for more than three years. Her Honour determined that this failure was “… a deliberate ploy on the part of the respondent to hold this Court to ransom.” She also made reference to the affidavit material filed by Mr B describing it as “… prolix, often irrelevant and repetitive”.
[9] She commented that affidavits and submissions filed by Mr B were frequently offensive, distressing to Mrs B and contemptuous of the Court despite a previous warning given by Judge McHardy to Mr B in November 2011 that the nature of his affidavit material was “unreasonably personal and abusive”.
[10] Mr B’s offensive comments have not been confined to Mrs B and the Family Court. Trenchant and extravagant criticisms claiming incompetence and unprofessionalism on the part of the experts retained by the parties, counsel for the applicant and counsel engaged to assist the Court have been levelled. The Judge described Mr B’s behaviour as “genuinely … contemptuous and mocking of the Court’s processes and powers”. She reflected on why Mr B might consider such an ad hominem attack and his persistent refusal to comply with Court orders might advance his case or assist in resolving the parties’ disputes. She noted that the conduct lent weight to Mrs B’s submission that her relationship with her former husband, both before and after separation, was characterised by an imbalance of power and control.
[11] In this Court Mr B has perpetuated this conduct. Although observing appropriate courtesy towards the Court in the course of the hearing, both the subject matter of his appeals and the content of his submissions reflect similar attitudes as those observed in the Family Court.
B. THE APPEALS
[12] The three appeals follow the substantive relationship property hearing which took place over three days in early October 2013. The reserved decision on the relationship property issues was delivered on 23 May 2014. This is one of the decisions under appeal. The other two appeals relate to orders made following the substantive hearing but before the delivery of the reserved decision. The details of the appeals are set out below.
First appeal (Oral judgment – 3 March 2014)
[13] Following the hearing of the substantive relationship property issues in
October 2013, Judge Southwick ordered that the costs of the valuations she directed
be obtained and the fees of the lawyer engaged to assist the Court, Mr Foote, were to be “paid promptly out of the ANZ Sydney joint bank account of the parties”. That is the account said to hold approximately $3.77 million. The valuations, which involved the valuation of the art collection, were necessary to complete the information available to the Court. Given the problems already experienced in obtaining Mr B’s co-operation in progressing matters, Judge Southwick directed that should there be a failure on his part to co-operate, this was to be brought to her Honour’s attention immediately.
[14] In December Lady Chambers QC, for Mrs B, filed a memorandum advising the Court that Mr B would not authorise the transfer of $4,511.93 from the account. This sum was to cover the costs of Mr Foote and the valuations. It was Mr B’s view that he had complied with the Court’s order by authorising the bank to release the funds but only if the bank provided him with an exchange rate he determined rather than the rate which the bank set, noting “I am not naïve enough signing such an instruction. The bank dictates the exchange rate with the result that the customer will get bad rate.” Mr B indicated that he would pay the sum from his own funds but only if “my wife agrees that the equivalent CHF is transferred from the Australian joint account into my NZ foreign currency account”.
[15] Mrs B refused to agree to this variation and sought to enforce the original order. Judge Southwick issued a second minute in January 2014 indicating she would not amend the order and that Mr B was required to comply. She issued a direction that “[i]f the payment has not been unreservedly authorised by the respondent in the plain terms of my order and within two days of the date of these directions, I will give serious consideration to vesting the account in the applicant.”
[16] This did not deter Mr B. He filed a further memorandum four days later, observing “[o]bviously I co-operated in the payment process properly and with diligence. Legally no Judge has discretion allowing ANZ to cheat me by using a bad exchange rate.” It is appropriate to also add that in her minute the Judge had made an order that Mr B allow an art valuer to re-enter the family home, which he was then occupying, to complete an unfinished art valuation. Mr B refused to allow the valuer to enter the house.
[17] In February her Honour issued a further minute in which she recorded that Mr B’s objections to compliance were not accepted, noting that “[f]ollowing release of final judgment, it is open to the respondent to propose some form of costs award in his favour should he hold the view that consent was unreasonably refused pursuant to … his memorandum.”
[18] Despite these repeated orders Mr B steadfastly refused to comply with the
Judge’s orders.
[19] It was against this background that Judge Southwick issued an oral judgment on 3 March 2014 in which she determined:1
(a) Mr B was in contempt of Court and ordered him to pay a fine of
$1,000;
(b)the amount of NZ$10,000 was to be paid immediately to Mrs B for the specific and sole purpose of paying fees rendered by Mr Foote and for the payment of any valuation fees resulting from the valuations ordered by the Court;
(c) the payment of NZ$10,000 was to be drawn from the parties’ joint Australian ANZ CHF account in Sydney and deposited into the trust account of Mrs B’s instructing solicitor; and
(d) Mr Foote’s brief be extended to assist in the process of implementing
the order.
[20] Mr B appeals this decision on the grounds the order is “objectively unfeasible”, unenforceable under the Trans-Tasman Proceedings Act 2010 and in
breach of Gilbert J’s decision.2 He also appeals the finding of contempt.
1 BJB v PB [2014] NZFC 156 [BJB v PB Oral Judgment].
2 BJB v PB [2012] NZHC 1951; [2014] NZFLR 780.
Second appeal (Minute – 16 April 2014)
[21] On 16 April Judge Southwick issued a minute which included the following orders:
(a) Mr B was to immediately pay from his New Zealand cheque account the sum of NZ$10,000 into the trust account of Mrs B’s instructing solicitor; and
(b)Immediately following that transfer the parties were directed to sign all documents necessary to transfer the equivalent of CHF (exchange rate .74 or better) from the ANZ Sydney account to Mr B’s ASB foreign currency account.
[22] These orders were made following a further refusal by Mr B to pay the
$10,000 ordered by her Honour on 3 March 2014. Her Honour expressed her reluctance to make the variation noting that she did not accept Mr B’s reasons for non-compliance with the original order.
[23] Mr B also appeals this variation on the basis that he did not consent to the order and also on similar grounds to the first appeal.
Third appeal (Reserved decision – 23 May 2014)
[24] This appeal relates to Judge Southwick’s decision following the substantive hearing in October 2013. Mr B appeals every aspect of this decision except those which decline relief to Mrs B. For this reason it is appropriate to set out Judge Southwick’s orders in full.3 They are as follows:4
Sale of the home
a. The family home at 192 Remuera Road is to be immediately sold.
b. The respondent is to vacate the home within 10 days of the date of distribution of the decision.
3 PB v BJB [2014] NZFC 3293 [PB v BJB Family Court].
4 At [162].
c. Pending sale, there is to be an occupation order in favour of the applicant.
d. Within five days of the date of the decision, the respondent is to provide to the applicant and Mr Foote documentary evidence that all the houseowners’ and householders’ insurance policies are current with premiums paid.
e. Within seven days, the parties are to agree upon the agency which will market the property. Failing agreement Barfoot and Thompson will market the property.
f. In the event of the house not selling before 18 July 2014, the parties and counsel to assist are, within seven days thereafter, to file memoranda which set out their proposals to immediately advance sale.
g. Mr Foote is to oversee the sale process and to provide conveyancing services.
h. Costs attached to the sale process will be paid either from sale proceeds or from the ANZ foreign currency account.
i. Funds received from sale will be held in the trust account of Counsel to Assist or a joint bank account agreed by the parties. Each party may each utilise up to one half of the net proceeds of sale for the purpose of purchasing alternative accommodation subject to any property so purchased having registered against the title thereto, a notice of claim of interest by the other party.
j. On vacating the property, the respondent may take with him only those items of furniture and chattels which are agreed in writing. If there is a dispute as to division at the date of sale, items are to be stored at the parties’ joint expense.
Spousal maintenance
k. The respondent will pay spousal maintenance of $1,797 per week and, in addition, will pay the sum of $5,000 per month, representing a contribution to the applicant’s future professional fees.
l. The respondent will pay the sum of $52,000 as past maintenance for the period from July 2011 until December 2012.
m. The respondent will pay the sum of $2,072.57, representing his unilateral deduction of maintenance due to the applicant pursuant to the interim order.
n. In the event of the respondent failing to pay these sums from another source they are to be deducted from the ANZ foreign currency account as a payment from the respondent’s interest in that account.
o. The application for payment of legal fees of $80,000 is declined.
Interim Distribution of $175,000
p. The application for interim distribution of $175,000 is declined.
Implementation of Orders
q. Pursuant to s 33 of the Property (Relationships) Act, there is a final order transferring the funds held in the joint ANZ foreign currency account in Australia to an equivalent account held in New Zealand.
r. Counsel to Assist the Court is to promptly implement this order including facilitating the process of registration.
s. Upon transfer to an ANZ bank in New Zealand, that account is to be vested in the applicant.
t. No withdrawals are to be made from the resultant New Zealand ANZ
account unless at the direction of this Court.
[25] Following the delivery of Judge Southwick’s decision Mr B applied to this Court for a stay of execution. This was heard by Wylie J on 13 June 2014.5 He declined the application with one exception. In relation to the order that the ANZ account be vested in Mrs B6 he granted a temporary stay, ordering that this would become permanent if Mr B complied with Judge Southwick’s orders that:
(a) he vacate the home;
(b) he provide documentary evidence of the house insurance; and
(c) he pay spousal maintenance, including past maintenance and the sum unilaterally deducted from previous payment he comply.
Exchange rates
[26] Although the following discussion does not relate to a specific ground of appeal, it provides a useful background and context to the wider exchange rate
argument advanced by Mr B.
5 PB v BJB [2014] NZHC 1329.
6 PB v BJB Family Court, above n 3, at [162](s).
[27] In her judgment of 23 May 2014 Judge Southwick referred to the unilateral deduction of maintenance in one of her orders.7 The background to this order is that an agreement was reached by consent in December 2012. Judge Clarkson ordered that each party would be paid $6,000 by way of spousal maintenance and there would be an interim distribution of $100,000 from the joint foreign account. The amount of €66,000 was exchanged into New Zealand dollars on behalf of Mrs B by
her instructing solicitor. He left it to the bank to determine the applicable exchange rate. Later that day, Mr B exchanged a quantity of Euros for New Zealand dollars and obtained a better rate than that obtained by the instructing solicitor.
[28] Mr B claims that the instructing solicitor caused him a loss of approximately
$2,500 as a result of not negotiating a more effective exchange rate. For this reason he later refused to sign the authority for the full $6,000 maintenance payment, unilaterally deducting $2,072.50 from the payment to compensate for the less advantageous exchange rate.
C. APPROACH ON APPEAL
[29] The appeal is brought under s 39 of the Property (Relationships) Act. The hearing is a general appeal, by way of rehearing.8
[30] The principles in Austin Nichols & Co Inc v Stiching Lodestar9 are applicable and consistent with the approach to general appeals from the Family Court as set out in D v S which stated: 10
An appeal to the High Court from the Family Court is an appeal by way of rehearing. Whilst the High Court will naturally give weight to the views of the specialist Court and may in some cases think it best to remit the case for reconsideration, it is fully entitled to substitute its views on questions of fact, including the issue of what is in the best interests of the child or children concerned. There is no rule of law requiring the High Court to defer in these respects to the Family Court even in a finely balanced case.
7 PB v BJB Family Court, above n 3, at [162](m).
8 Section 39(3) imports the High Court Rules and ss 74-78 of the District Courts Act 1947. Therefore, under s 75 of the District Courts Act, the appeal is by way of rehearing.
9 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141.
10 D v S [2003] NZFLR 81 (CA) at [18].
[31] In C v W Dobson J noted that this approach also applies to appeals involving relationship property disputes.11
[32] I shall now consider and determine each of the appeals as described above.
D. FIRST APPEAL (ORAL JUDGMENT – 3 MARCH 2014)
[33] Mr B’s grounds of appeal in relation to the first appeal focus on four matters, namely:
(a) the “unfeasibility” of the order to pay NZ$10,000 into the instructing solicitor’s trust account;
(b) that the order is unenforceable under s 66 of the Trans-Tasman
Proceedings Act 2010;
(c) that the orders conflict with the judgment of Gilbert J; and
(d) the finding of contempt of Court. [34] These grounds are dealt with below.
Unfeasibility
[35] The background to Judge Southwick making this order is discussed above. That history discloses repeated refusals by Mr B to comply with the order. These refusals lead to further telephone conferences and hearings between December 2013 and March 2014. Mr B claims that the order to pay NZ$10,000 out of the ANZ CHF account is “objectively unfeasible”. The essence of his argument is that a CHF/NZD exchange rate needed to have been agreed upon given the fact that the order required the payment to be made in New Zealand dollars from an account holding Swiss Francs. Mr B submits that such an order is impossible to comply with “… because nobody can withdraw NZ dollars from an account containing only CHF” and that
“performance is objectively impossible”.
11 C v W HC New Plymouth CIV-2010-443-192, 28 July 2010 at [5].
[36] He submits by way of analogy that “[i]f Lady Chambers QC has only strawberries in her cellar and Judge Southwick QC orders her to take potatoes out of that cellar performance is impossible …”.
[37] I do not accept this submission. It is implicit in the order that the equivalent of NZ$10,000 is to be withdrawn from the CHF account. Such a literal interpretation of the order defies common sense. Contrary to Mr B’s submission, there is no ambiguity in the Judge’s order. Mr B’s submission is that the operative part of the judgment is ambiguous and, “to avoid chaos and secure legal certainty” it should not be interpreted in the fashion directed by the Court.
[38] Mr B’s complaint is that the order, as expressed, allows the bank to determine the exchange rate with the result that a poor rate is likely to be utilised.
[39] Mr B submits that “legally no Judge has discretion allowing ANZ to cheat me by using a bad exchange rate” and also “I am not naïve enough signing (sic) such an instruction. The bank dictates the exchange rate with the result that the customer will get bad rate.”
[40] Furthermore, Mr B submits that he did not consent to the order made by
Judge Southwick.
[41] That Mr B may not obtain the exchange rate he believes is either the best or most appropriate, is not a basis on which he can lawfully resist compliance or found an appeal. While it may well be the case that Mr B, with his extensive foreign exchange dealing skills, may be able to secure a rate more favourable than others, this does not prevent the Judge from making an order she was entitled to make. The background to Mr B’s dogged refusal to comply led the Judge to conclude, reasonably in my view, that this order was necessary to give effect to her earlier orders and in particular to ensure that Mr Foote was paid as were the valuers who had undertaken the valuations ordered. It follows that I reject Mr B’s submission on this ground.
Trans-Tasman Proceedings Act 2010
[42] Mr B submits that the order is unenforceable because s 66 of the Trans- Tasman Proceedings Act 2010 applies only to final and conclusive judgments. Interim judgments are not registrable or enforceable in Australia.
[43] This submission misses the point. The order was made in the reasonable expectation that the parties who had control of the account would work together to give effect to the order.
[44] Jurisdictional unenforceability is not a basis on which Mr B can claim that the order is “objectively unfeasible”. Judge Southwick made the order that Mr B was to release the funds. He had the ability to do so because he controlled the account. The fact that the account is situated in Australia provides no justification for Mr B not to comply with the order. He has the ability to comply with the order and has refused. It follows that I also reject this ground of appeal.
Gilbert J’s decision
[45] Mr B submits that Judge Southwick’s order that payment should be made from the CHF account directly conflicts with the decision of Gilbert J. Gilbert J held that the distribution of the CHF account was inappropriate until the substantive relationship property issues had been resolved. He said:12
It is clear from the judgment that the Judge's primary reason for declining to order an interim distribution of $1 million to the appellant was that he was not persuaded that the foreign currency accounts, from which the distribution was to be funded, were unquestionably relationship property. He considered, rightly in my view, that it would be inappropriate to order an interim distribution from those accounts prior to the determination of their proper classification.
[46] It is important to remember that Gilbert J’s judgment was delivered in 2012
some 14 months before Judge Southwick heard the relationship property case in
October 2013. Her Honour was well aware of the existence of the decision and
12 BJB v PB, above n 2, at [41].
made specific reference to it in her oral judgment of 3 March 2014.13 Her Honour stated:14
I acknowledge an earlier decision of Gilbert J in finding that there should be no interim distribution of the funds held in the ANZ joint account pending the hearing of the substantive matter. I have however now heard the matter and am persuaded that there is adequate relationship property to allow for a margin of error should it be the case that the ANZ account is found to be the respondent’s separate property. His Honour did not have the advantage of hearing all the relevant evidence in that regard.
[47] It is also noteworthy that the application before Gilbert J was for the interim distribution of $1 million from the CHF account as opposed to the relatively modest sum of $10,000 in the present case.
[48] The order made by Judge Southwick is not in direct conflict with the judgment of Gilbert J. Plainly, Gilbert J was correct when he determined there should be no interim distribution of the funds given they amounted to a little under
$4 million and thus represented approximately 40 per cent of the estimated value of the whole of the relationship property estate. An interim distribution of that proportion would be wholly inappropriate for the reasons given by Gilbert J. However, Judge Southwick was ordering a much more modest distribution from one of the very limited available sources of cash. Furthermore, if the CHF account was later found to be separate property an adjustment could easily be made to compensate Mr B when final orders are made.
[49] Furthermore, when Gilbert J made his orders in August 2012 neither the protracted nature of the proceedings nor Mr B’s obstruction of the process would have been known to the Judge. He no doubt rightly assumed that the relationship property dispute would be settled expeditiously as is intended by the Act.15
[50] It follows that I do not accept Mr B’s submission that the Judge’s order was
contrary to and inconsistent with the judgment of Gilbert J.
13 BJB v PB Oral Judgment, above n 1, at [17].
14 At [17].
15 Property (Relationships) Act 1976, s 1N(d).
Contempt of Court
[51] In the same judgment her Honour found that Mr B was in contempt of the
Family Court both in the face of the Court and outside the Court. She fined him
$1,000 and ordered that that sum be paid into Court within 21 days of the judgment.
[52] The background to this finding lies in the repeated and consistent refusals by Mr B to comply with Judge Southwick’s order to transfer the sum of $4,511.93 to meet Mr Foote’s fees and the costs of the valuations.
[53] After setting out the instances of non-compliance16 her Honour recorded that in her February minute she directed that time should be allocated to allow Mr B to make any submissions in response to her indication that he was in contempt of Court. Her Honour gave Mr B the opportunity, yet again, to comply with the orders. Unequivocally he indicated he would not comply unless it was on his terms rather than the Court’s.
[54] Her Honour after setting out the Family Court’s power to punish for contempt of Court,17 referred to the decision of Williams J in P v F in which his Honour, in the context of a guardianship matter, observed: 18
Insofar as s 41 applies to the jurisdiction of the Family Court, it must be read in light of the overriding objectives imposed by the Care of Children Act and the Children, Young Persons and Their Families Act.
[55] Her Honour referred to the three categories of contempt, namely contempt in the face of the Court, contempt outside the Court involving statements or actions that might denigrate or undermine the authority of the Court and contempt outside the Court being wilful disobedience of a Court order.
[56] In the context of Mr B’s conduct her Honour made specific reference to the
principle contained in s 1N(d) of the Property (Relationships Act) 1976 which states:
That questions arising under this Act about relationship property should be resolved as inexpensively, simply and speedily as is consistent with justice.
16 Refer to [8 ]-[11] above.
17 District Courts Act 1948, s 41; Family Courts Act 1980, s 16.
18 P v F [2009] NZFLR 833 (HC) at [46].
[57] Her Honour observed that the orders were made for the purpose of meeting the principles of an inexpensive, simple and speedy resolution of relationship property matters. She noted that the persistent refusal by Mr B detracted from those principles. His reasons for non-compliance had been repeatedly rejected by her Honour. She described his attitude as “arrogant and at times rude in conveying refusal”. She noted that since October 2013 the Court had been required to respond to a number of memoranda and submissions as a result of Mr B’s refusal. That, and the inability to finalise all valuations, had been a distraction from the task of resolving the issues and had resulted in the applicant incurring unnecessary additional costs.
[58] It was for these reasons that her Honour found Mr B to be in contempt of the
Court both in the face of the Court and outside the Court.
[59] P v F states that:19
… Punishment for contempt must be reasonably necessary in the context of the statutory objective and the facts of the case.
[60] It is plain that this principle was at the forefront of her Honour’s mind when she examined Mr B’s non-compliance in the context of the principles and purposes of the Property (Relationships) Act.
[61] Mr B submits that he was punished unjustly because the Judge erred in finding he breached two of the orders. He submits that he refused to allow the valuer to re-inspect the art collection because the re-inspection was absurd given that the valuer had inspected the items two or three times previously and had taken photographs. Mr B also questioned the valuer’s competence. On the question of refusing to pay Mr Foote’s bill he said he had offered an alternative to the unfeasible order.
[62] Mr B’s summary of his justification for continuing to refuse to comply with
Judge Southwick’s orders underscores the very difficulty which the Judge was
confronted with and why, given the blatant and dogged refusals to comply with the
19 At [51].
Court orders, her Honour’s finding was entirely appropriate. Mr B in his submissions put it in the following terms:
Being guilty [of] not obeying these two absolutely senseless and unfeasible orders is as much out of proportion as the capital punishment for petty larceny of food.
[63] Mr B was given very considerable latitude by the Court. He failed to respond to the numerous opportunities provided to him by the Court to comply with its orders. His failure to comply not only unnecessarily prolonged the hearing but resulted in the incurring of unnecessary legal expenses on the part of Mrs B. His non-compliance obstructed the advancement of the proceedings. I am satisfied that her Honour was entirely justified in finding Mr B in contempt of Court and the fine of $1,000 was, in all the circumstances, a modest penalty.
E. SECOND APPEAL (MINUTE – 16 APRIL 2014)
[64] On 16 April 2014, just six weeks after the delivery of the oral judgment discussed above, which ordered the withdrawal of NZ$10,000 from the parties’ joint ANZ CHF account in Sydney, her Honour issued another minute directing Mr B to immediately pay from his New Zealand cheque account $10,000 to the trust account of Mrs B’s instructing solicitor. Her Honour further ordered that immediately following the transfer, the parties were to sign all necessary documents to transfer the equivalent in Swiss Francs (at an exchange rate of 0.74 or better) from the ANZ Sydney account to Mr B’s ASB foreign currency account.
[65] As noted earlier, these orders were made following Mr B’s further refusal to comply with the orders made on 3 March 2014. Mrs B had reluctantly agreed to a variation of the order and Judge Southwick specifically noted that the variation should not have been required and did not represent an acceptance by the Court of Mr B’s opposition. She noted that she would allow the variation as a pragmatic solution to resolve the question of the payment of the costs to Mr Foote and the valuers.
[66] Mr B repeatedly submits that he did not consent to the order and that it was
not consistent with his only “legally binding offer” made following a telephone
conference. The offer he refers to was an offer to pay Mr Foote’s fees out of his own funds following which the CHF funds would be transferred in accordance with the better exchange rate of either the ANZ or ASB. The order that $10,000 be paid, rather than the $4,511.93 for Mr Foote’s bill and the valuer’s cost, was not offered by him. This submission fundamentally misapprehends the nature of a Court order. It does not require the consent of the parties to make it enforceable. Indeed, in the present case, the Court was not required to amend the order. Mrs B gave her reluctant consent no doubt in the hope it might operate to break the stalemate. Whether Mr B consented to it or not is of no moment. Mr B was, and remains, required to comply with the orders irrespective of any issue of consent by either party.
[67] In relation to this appeal Mr B also repeats his arguments regarding unfeasibility, unenforceability, the Trans-Tasman Proceedings Act 2010 and inconsistency with Gilbert J’s decision. These have already been discussed above and rejected.
[68] It follows that this appeal must also fail.
F. THIRD APPEAL (RESERVED DECISION – 23 MAY 2014)
[69] This appeal relates to the orders which were made by Judge Southwick following the substantive hearing in October 2013.
[70] Judge Southwick, in a detailed and careful 50 page judgment, traversed the history of the relationship property issue and made orders, some final, others interim, designed to advance the issues between the parties towards a final outcome. Her orders are set out in full at [24] to [25] above. Essentially Mr B appeals every order with the exception of those which decline relief to Mrs B.
[71] Despite the expansive nature of this appeal the grounds advanced by Mr B
centre on three distinct orders, namely:
(a) the sale of the family home;
(b) the maintenance order; and
(c) the vesting of the CHF account in Mrs B.
[72] Each of these grounds is separately examined below.
Sale of the family home
[73] At the time of the hearing the parties had been separated for almost three years. It was submitted for Mrs B that she was entitled to move on with her life particularly given her current, limited living circumstances. It was also submitted to Judge Southwick that unless robust steps were taken Mr B would continue to deliberately delay and refuse to co-operate, with the consequence that the settlement of property issues would be further frustrated and delayed.
[74] In ordering the sale of the family home her Honour rejected Mr B’s claimed wish to retain the property because of her concern that to do so would facilitate Mr B’s strategy of deliberately delaying the resolution of the relationship property issues. Her Honour was also influenced by the evidence that Mr B had not been maintaining the property to a reasonable standard during his post-separation occupation and he had failed to insure the house notwithstanding Mrs B’s lawyer’s request that he do so.
[75] Mr B does not dispute the jurisdiction of the Family Court to sell a family home prior to the resolution of the substantive proceedings. His argument is that such a course is not appropriate in the present case.
[76] Mr B claims that the Court may well determine that he has the sole interest in the house because he is the sole legal owner, it was purchased prior to the marriage and Mrs B has made no contribution to the property or to any other part of the matrimonial property pool. He submits that even if he is unsuccessful, it is likely he will receive substantial funds given that all the assets in the relationship pool were owned by him prior to the marriage. This, he argues, will provide him with sufficient funds to buy out Mrs B’s interest.
[77] In support of this submission Mr B refers to cases which support the proposition that where one party wishes to retain the property by purchasing the interest of the other party the Courts will ordinarily take some convincing before ordering a sale prior to the substantive hearing.20
[78] This issue was squarely before Judge Southwick. After referring to the relevant case law she said:21
All the cases referred to by the respondent are distinguishable from the present for one significant reason. None contain the element of the party who wishes to retain the property, deliberately delaying resolution of issues. I find that that element is present in this case to an extent that demands that I should not regard the respondent’s wish to retain the home as being of significant importance.
[79] Lady Chambers submits that Judge Southwick’s order was made following careful consideration of all the relevant evidence and consistent with the existing law. The parties have been separated for three years. There was an abundance of evidence demonstrating a strategy on the part of Mr B to delay the resolution of the relationship property issues, commencing, at the earliest, with a refusal to accept service. He also declined mediation, frustrated the sale of the boat, declined to participate in aspects of discovery, and refused to comply with Court orders.
[80] Judge Southwick was correct to regard these circumstances as justifying a departure from the general principle that the Court should be cautious before ordering the sale of the family home particularly if there is a prospect that it may be retained by one of the parties. Given the period of separation, an order for the sale of the family home will release funds in order to provide some level of financial independence. In my view the need for financial independence, combined with the evidence of the house not being properly maintained or insured, justified the Judge
in concluding that the sale of the house was required.
20 RS v PL FC Taumarunui FAM-2007-068-0078, 27 November 2007; Hughes v Hughes FC Wanganui FAM-2007-083-160, 21 May 2008; LNS v BBS FC Pukekohe FAM 2010-057-000322, 18
November 2010; LNS v BBS FC Pukekohe FAM 2010-057-000322, 18 November 2010.
21 BJB v PB Family Court, above n 3, at [29].
[81] I do not overlook Mr B’s submission that until matters are resolved in relation to the German realty, final orders should not have been made. In support of this submission he cites Samarawickrema v Samarawickrema which states: 22
The claims in respect of the foreign property are to be decided by local law, and should not be the subject of compensating adjustments in respect of the New Zealand assets to ensure that the final division of total assets reflects a New Zealand approach.
[82] Gilbert J noted that he did not accept that a foreign removable asset could never be taken into account when considering the division of relationship property, observing there may be room for such assets to be taken into account when considering an extraordinary circumstances claim under s 13. He accepted that foreign removable assets cannot be taken into account as though it is relationship property in determining the division of such property.23
[83] Judge Southwick took into account both the principles expressed in
Samarawickrema and Gilbert J’s comments stating that:24
On the basis of the evidence now before the Court it is difficult to imagine a situation where the equal division of the family home as protected by s 11 of the Property (Relationships) Act could or should be impacted upon by the decisions of the Courts in Germany. Such a proposition raises the real spectre of doing exactly what the Court of Appeal warned against in Samarawickrema.
[84] I agree with her Honour. To take into account the properties in Germany when assessing the share under local legal principle would, indeed, be a “compensating adjustment” which Samaramawickrema warns against. Therefore it was appropriate for her to make a “final order” in regards to the relationship property in New Zealand.
Maintenance order
[85] Mr B appeals this order on two grounds, namely:
22 Samarawickrema v Samarawickrema [1995] 1 NZLR 14 (CA) at 20.
23 BJB v PB, above n 2, at [30].
24 BJB v PB Family Court, above n 3, at [37].
(a) there is no jurisdiction to make a final maintenance order at an interim stage; and
(b)in the event that ground fails, the amount of spousal maintenance ordered is excessive.
Jurisdiction
[86] Mr B submits that a final maintenance order may only be made once the relationship property proceedings have been resolved. In support of this submission he relies on M v B which states that an assessment of the parties’ reasonable needs cannot sensibly be made until the relationship property has been divided.25
[87] The Family Proceedings Act 1980 (“FPA”) clearly provides for different levels of maintenance. The first level is interim maintenance designed to protect the position of a party who does not have adequate means pending determination of the substantive proceedings. Interim maintenance is only given for a six month period. Most interim maintenance cases involve parties who have recently separated and are yet to reach agreement about the division of relationship property. Interim
maintenance orders have been described as “a stop gap measure”.26 The purpose of
interim maintenance hearings is to facilitate ready access to the Court in order to provide a financial bridge between the filing of an application for a final maintenance order and it being heard. It is not intended that parties must repeatedly return to Court for awards of interim maintenance whilst relationship property proceedings remain unresolved, particularly in a case such as the present where there is evidence that one party is pursuing a strategy of delay. Mrs B’s application for interim maintenance came before her Honour Judge Clarkson in November 2012. At that time Mr B was represented by senior counsel and it appears there was a significant degree of agreement between the parties. An interim maintenance order
was made.
25 M v B [2006] 3 NZLR 660 (CA) at [121].
26 Nicola Peart (ed) Brookers Family Law – Family Property (online looseleaf ed, Brookers) at
[FA82.01].
[88] The application before Judge Southwick in the present case was a maintenance order to meet the reasonable needs of Mrs B until the division of relationship property. The application was made pursuant to ss 63 and 64 of the FPA. In that way it was a final order rather than an interim order.
[89] Winkelmann J in NGC v HAH considered whether a final order could be given prior to the final distribution of property.27 She held that:28
I have no doubt that it is preferable that property division is decided either before or at the same time as final maintenance. But it is not mandatory that relationship property is divided before final maintenance. It is easy to imagine circumstances in which there is a lengthy delay between dissolution and final resolution of property issues. In such circumstances it could cause injustice if the Court was precluded from ordering maintenance… Obviously, the reasonableness of any final maintenance order needs to be revisited in light of the final disposition of that property. There may also need to be an adjustment ultimately in terms of s 32 of the Property (Relationships) Act 1976.
[90] Plainly, both in terms of the legislation and on the authority of this Court, Judge Southwick had jurisdiction to make the orders she did. It is important to emphasise that this is not a final order in the literal sense. As noted by Winkelmann J once the substantive property dispute has been resolved the Court has the ability to make adjustments and I note that such adjustment can occur on any change in circumstance. Furthermore the order is not an indefinite order.
[91] I agree with Lady Chambers that it would be unjust to withhold maintenance until the final division of property. Mr B accepts that Mrs B needs funds to maintain herself but notwithstanding that, appears to submit that she should be effectively left unable to meet her reasonable needs pending the resolution of relationship property proceedings and despite the fact that Mr B is a wealthy man and there is a significant amount of relationship property.
Quantum
[92] Mrs B sought both past and final spousal maintenance orders in her application. Spousal maintenance of $1,797 per week was ordered together with
27 NGC v HAH [2010] NZFLR 677 (HC).
28 At [64]-[66].
$5,000 per month being a contribution to Mrs B’s future professional fees. This
amounts to a total of $12,188 per month.
[93] Mr B submits that this amount is excessive and inappropriate. In support of
this submission he refers to Gilbert J’s comment that $10,000:29
… appears to be sufficient to meet the applicant’s needs for living expenses
and legal fees.
[94] He also submits that $10,000 for maintenance and legal fees was regarded as sufficient by Judges McHardy and Clarkson.
[95] However, on Mr B’s own evidence in the Family Court he acknowledged that approximately $6,000 per month was what Mrs B needed to pay rent.30 That sum did not include legal fees. Furthermore, as noted by Judge Southwick in her judgment, Mr B was unable to identify any expenses claimed by Mrs B which were unreasonable.31
[96] It is appropriate to observe that Judge Southwick had before her a great deal more financial evidence than Judge Clarkson had when she heard the interim maintenance application. In all the circumstances I am not satisfied that Mr B has established that the amount ordered Judge Southwick is excessive.
[97] I do not overlook Mr B’s submission that Mrs B is in a position to obtain employment and that he should not be required to pay maintenance. He submits that Mrs B has the ability to support herself to a far greater extent than she admits. At 49 years of age and as a qualified teacher with a university degree he claims she has the ability to earn a salary in excess of $60,000. He says she could have started teaching immediately after separation. Judge Southwick’s sustained involvement in these proceedings justified her in making the observations that Mrs B has been subjected to unpleasantness and threats from Mr B in relation to the settlement of the outstanding property disputes. Her Honour observed that this had had a debilitating
effect on Mrs B and her ability to get on with her life. She noted that it was likely
29 BJB v PB, above n 2, at [40].
30 BJB v PB Family Court, above n 3, at [69].
31 At [69].
that once the property issues had been resolved Mrs B would be in a better position to obtain employment opportunities.32 Earlier in her judgment, Judge Southwick noted that Mrs B “impressed at hearing as being tentative, lacking in confidence and still damaged by the circumstances of her marriage and separation”.33
[98] As noted earlier Judge Southwick, as part of the maintenance orders, ordered Mr B to pay Mrs B $5,000 per month as a contribution towards her future professional fees.
[99] Mr B’s submissions in relation to Mrs B’s legal representation are highly
offensive and do not warrant repetition. In summary, Mr B submits that the award of
$5,000 per month is excessive.
[100] Mrs B gave evidence she was unable to meet the costs of her legal fees. Mr B did not challenge that evidence. Due to the complicated nature of the proceedings Mrs B has required the assistance of three lawyers: counsel and instructing solicitor and a German lawyer, resident in New Zealand, who is assisting with interpretation and advice in relation to German tax matters. In my view the phrase “reasonable needs” is sufficiently broad to include future as well as past legal costs particularly in a case such as the present where the relative financial strengths of the parties is uneven.
[101] In accordance with C v G it is apparent that legal fees can be expected to be ongoing and are therefore appropriately included in the maintenance order. 34
Duration
[102] Additionally, Mr B submits that the duration is excessive. Judge Southwick ordered that maintenance be paid until May 2016 but granted leave to either party to apply to vary or discharge the order should the property issues be resolved prior to
that date or circumstances substantially changed. She stated:35
32 At [110].
33 At [82].
34 C v G [2010] NZCA 128, [2010] NZFLR 497 at [52].35 BJB v PB Family Court, above n 3, at [109].
In this case I find that it is just that a final order should cease on the expiration of a reasonably assessed timeframe to complete relationship property issues. There will remain an ability to vary that order in the meantime. The respondent himself expressed the view that it will only be at that time that both parties’ positions will have clearly crystallised, so empowering each to order their lives financially.
[103] It is plain that Judge Southwick’s order was not necessarily intended to extend until May 2016. Her Honour specifically took into account that the circumstances which confronted her at the hearing may well change in a sufficiently substantial fashion to justify variation. Furthermore, she specifically contemplated that the outstanding relationship property issues may have been settled or otherwise determined by that date. The order is sensibly flexible enough to accommodate the effect of relevant changes prior to May 2016.
[104] Lady Chambers indicated in the course of the hearing that the final relationship property hearing would be likely to proceed in early 2015.
[105] As noted earlier in this judgment a final maintenance order may be appropriate where there is a lengthy delay between separation and the final resolution of the proceedings. In all the circumstances it cannot be said that the duration of the order made by Judge Southwick is excessive.
[106] I would also observe that to date the delay in progressing the resolution of the outstanding matters between the parties is almost exclusively caused by the actions of Mr B. Thus, at least to some extent, any earlier variation to the spousal maintenance order prior to May 2016 will be in his hands.
Repugnant to justice
[107] Mr B also submits that he should not be liable for maintenance because Mrs B’s conduct has been such that it would be repugnant to justice to require him to pay maintenance.36 In support of this submission he referred to what he described as stolen security papers, that Mrs B tried to cancel the registration in the land register and tried to sell the realties in Germany which she holds in trust. Mr B submits that
Mrs B has stolen German land charge certificates, attempted to clear the titles to
36 Family Proceedings Act 1980, s 66(2)(b).
allow her to sell the properties contrary to his interests as well as other instances of conduct claimed to be for the purpose of defeating his interests.
[108] Although Judge Southwick did not address this aspect directly and I received no submissions from Lady Chambers on the point, it appears that Mrs B investigated taking steps to realise these properties but was thwarted by various legal obstacles. There is no evidence of illegal or improper behaviour on her part. It seems that the steps she took were taken in an attempt to locate funds rather than to obscure them or their existence or deny Mr B of his interests.
Unilateral deduction
[109] This ground of appeal relates to the order Judge Southwick made in the following terms:37
The respondent will pay the sum of $2,072.57, representing his unilateral deduction of maintenance due to the applicant pursuant to the interim order.
[110] The background to this order is that Judge Clarkson made an order that the sum of $100,000 be paid out to each party. Mr B sought to have that sum expressed in Euros. He consented only to signing the withdrawal of €66,000. Mrs B, in an effort to facilitate the payment, agreed to this course. The ANZ converted the amount to New Zealand dollars which were paid to Mrs B. Mr B, it seems, deducted an amount off the final maintenance order in recognition of the exchange rate difference. Judge Southwick’s order was intended to rectify that unilateral deduction.
[111] This ground of appeal is analogous to and consistent with Mr B’s conduct in
relation to other foreign exchange issues.
[112] Plainly he was not authorised to make a unilateral deduction from an amount lawfully ordered by the Court simply by reason of his belief that a more favourable exchange rate should have been obtained.
[113] Accordingly this ground of appeal also fails.
37 PJB v PB Family Court, above n 3, at [62](m).
Transfer of funds
[114] This aspect of the appeal relates to the ancillary orders designed to facilitate the implementation of the primary orders made by her Honour.38
[115] Her Honour recognised that she had made a number of orders the effectiveness of which and compliance with relied upon access to the parties’ joint ANZ foreign currency account in Australia. Her Honour noted that the history of Mr B’s non-co-operation with Court orders relating to this particular account led her to conclude with a level of prescience which her sustained involvement in the proceedings provided, that the same refusal to co-operate would continue following the release of the decision. This led her Honour to consider the provisions of s 33(1) of the Property (Relationships) Act 1976 which provides:
The Court may make all such other orders and give such directions as may be necessary or expedient to give effect, or better effect, to any order made under any of the provisions of sections 25 to 32 of this Act.
[116] Her Honour, after noting that the order for the sale of the family home and peripheral orders were made pursuant to s 25 of the Act and the requirement in s 32 for the Court to have regard to any order made under the FPA for the maintenance of a spouse, led her to conclude that it was necessary to turn her mind to what orders needed to be made to ensure access to the joint ANZ foreign currency account. She concluded that in order to give effect to the orders it was both necessary and expedient to make a final order that the funds held in that account were to be immediately transferred to an equivalent ANZ account in New Zealand. In making this order her Honour did not ignore Mr B’s claim that the whole of the funds in that account were his separate property. However, her Honour concluded that these interests, if they existed, would not be compromised for three reasons, namely:
(a) the funds would be utilised only for essential payments arising out of
the parties’ joint responsibility to meet the marketing costs associated with the sale of the home. It would also include Mr Foote’s costs;
38 At [162](q) to (t).
(b)she had already preserved the right of Mr B to make application to the Court for a further interim distribution from the account should that be necessary in order to accommodate his short term needs pending the sale of the house; and
(c) should reimbursement by Mrs B be required there would be sufficient funds from other relationship property sources to meet those costs.
[117] Mr B does not appear to dispute the Judge’s jurisdiction to make such an order but submits that because the joint funds may be classified as his separate property the order should not have been made. Indeed, Mr B goes further, describing it as a perversion of justice which would mean the parties could not operate the account jointly.
[118] Furthermore, Mr B submits that this order contradicts Gilbert J’s decision. However, as already noted, Gilbert J’s decision was made at an early stage in these proceedings at a time when it was not anticipated that they would become as convoluted and protracted as they are. The essence of his judgment was that the funds should not be distributed until their identity had been settled.
[119] I do not accept that Judge Southwick’s decision contradicts the reasoning and effect of Gilbert J’s decision. Her Honour was careful to ensure that any distributions would be limited and made only with the authority of an order of the Court. The purpose of the order was to make available an immediate and accessible source of funds in order to facilitate the effect of her Honour’s other orders including the sale of the home. Such a course would avoid the rancour and debate concerning foreign exchange rates. Any Court making orders for the payment of sums from this account would be well aware of Mr B’s claim that the funds in the account are separate property. It is most unlikely that any order would be made of the sort which concerned Gilbert J. The order simply recognises that there must be an effective and readily available source of funds from which to pay immediate costs.
[120] In any event, the proceeds of the sale of the house will, to a large extent, mitigate the need to have recourse to the CHF account.
[121] It is clear that the Court may make orders in regard to jointly owned assets and, indeed, property which is separate property.39 There is also the general power contained in s 25(3).
[122] In my view Judge Southwick’s directions in relation to the implementation of her orders were both appropriate and sensible in the circumstances. Indeed, given the background to this matter it was the only effective option available to the Judge in order to ensure that effect was given to the substantive orders. In doing so, she ensured that Mr B’s position was protected in the event that the funds were determined to be his separate property.
G. RESULT
[123] The appeals are dismissed and the orders made by Judge Southwick are confirmed.
[124] I am of the view that in the circumstances costs in favour of Mrs B should be awarded on a 2B basis but reserve leave to the parties to file memoranda on the issue of costs.
[125] In the event either party wishes to make submissions on costs I direct that
Mrs B is to file and serve any memorandum no later than 5:00pm on Monday,
2 February 2015 and Mr B to file and serve any memorandum by 5:00pm on
Monday, 9 February 2015.
Moore J
Solicitor/Counsel:
Mr McCutcheon, Auckland
Lady Chambers QC, Auckland
Copy to:
Mr B, Auckland
39 Property (Relationships) Act, ss 33(3)(b), (e), (g), (i) and (n).
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