Preston v Preston

[2021] NZSC 154

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IN THE SUPREME COURT OF NEW ZEALAND

I TE KŌTI MANA NUI

 SC 10/2021
 [2021] NZSC 154

BETWEEN	KATHARINE ELIZABETH PRESTON Appellant
AND	GRANT LEE PRESTON First Respondent GRANT LEE PRESTON AND FISHER PARTNERS TRUSTEES LIMITED AS TRUSTEES OF THE GRANT PRESTON FAMILY TRUST Second Respondent

Hearing:	3 August 2021
Court:	Winkelmann CJ, Glazebrook, O’Regan, Ellen France and Williams JJ
Counsel:	V T M Bruton QC, I M Hutcheson and N L Walker for Appellant J M McCleary and R C van den Broek for Respondents
Judgment:	9 November 2021

JUDGMENT OF THE COURT

AThe appeal is allowed.

B        Orders are made that the Grant Preston Family Trust pay the Huntbos Family Trust $141,000 and release any claim to the $192,000 of the funds held on joint account (the Grant Preston Family Trust share of these funds is $102,000 and the Huntbos Family Trust share is $90,000). 

CThe Grant Preston Family Trust deed is amended by removing the appellant as a discretionary beneficiary.

DLeave is reserved to the parties to seek further directions or orders that may be necessary to give effect to this judgment.

EThe first respondent must pay the appellant costs of $25,000 plus usual disbursements.  We certify for second counsel.  Unless the parties can agree, costs in the Courts below are to be redetermined in those Courts in accordance with this judgment.

____________________________________________________________________

REASONS
(Given by Ellen France J)

Table of Contents

Para No.
Introduction	[1]
The background	[9]
The facts	[10]
The Courts below	[19]
The High Court decision	[19]
The Court of Appeal decision	[21]
The case for the parties	[25]
The approach to s 182	[27]
Relevant provisions	[27]
Purpose and principles	[32]
A three-stage process	[39]
The approach to the third stage	[40]
Concluding observations	[51]
Did the Court of Appeal apply the correct approach?	[59]
The second stage of the inquiry – the scale of the disparity	[60]
Treatment of contributions	[66]
The source of assets treated as decisive	[74]
The appropriate orders	[75]
Result	[83]

Introduction

1. Under s 182 of the Family Proceedings Act 1980, the court has the power to vary the terms of a nuptial settlement where the parties’ marriage or civil union comes to an end.[1]  This Court in Ward v Ward[2] and, more recently, in Clayton v Clayton [Claymark Trust][3] considered the principles to be applied in determining whether orders should be made under s 182.[4]  These cases made it clear that the purpose of s 182 was to enable the courts to remedy the consequences of the failure of the premise on which the nuptial settlement was made, that is, a continuing marriage.[5]

   [1]The regime under s 182 of the Family Proceedings Act 1980 applies to civil unions as well as marriages.  Because we are dealing with a marriage, we will refer to marriage only in the judgment. 

   [2]Ward v Ward [2009] NZSC 125, [2010] 2 NZLR 31.

   [3]Clayton…