Rehu v Moke
[2020] NZHC 254
•24 February 2020
NOTE: PURSUANT TO S 35A OF THE PROPERTY (RELATIONSHIPS) ACT 1976, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B,
11C AND 11D OF THE FAMILY COURT ACT 1980. FOR FURTHER INFORMATION, PLEASE SEE
https://www.justice.govt.nz/family/about/restriction-on-publishing-judgments/
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2019-409-0080
[2020] NZHC 254
IN THE MATTER OF an appeal under s 39 of the Property (Relationships) Act 1976 BETWEEN
MANAIA INIA REHU
Appellant
AND
EDIE CARROL HUNAPO MOKE
Respondent
Hearing: 9 and 10 December 2019 Counsel:
J V Ormsby and A L Bodman for appellant
I M Mitchell and A F L Novis for respondent
Judgment:
24 February 2020
RESERVED JUDGMENT OF DOBSON J
Contents
The circumstances of the relationship [3]
Financial dealings [14]
The Family Court proceedings [20]
Were the January-May 2008 payments loans or gifts? [22]
Claims to increases in the value of respective residential properties [53]
Chattels [63]
Claim for unequal division of property [76]
Summary [83]
Costs [84]
REHU v MOKE [2020] NZHC 254 [24 February 2020]
[1] This judgment deals with an appeal from orders made under the Property (Relationships) Act 1976 (the Act) dealing with various issues between the parties. The judgment under appeal was delivered by Principal Family Court Judge Moran in the Family Court at Christchurch on 21 January 2019.1
[2] A number of the findings that are challenged on appeal are inter-related. The appeal is a general one to which the principles in Austin, Nichols & Co Inc v Stichting Lodestar apply.2 Accordingly, whilst considering what might be an appropriate extent of deference to accord the Judge, given the specialist nature of the jurisdiction and her advantage in having seen and heard the witnesses, my task is to reach my own view. If I am satisfied that the judgment is wrong on any of the material issues, then I am to determine the appeal on the basis of my own findings.3
The circumstances of the relationship
[3] Both parties are mature adults for whom this was not their first serious relationship. The appellant (Mr Rehu) is now retired and the respondent (Ms Moke) is an experienced company director who is qualified as an accountant.
[4] In late 2007, Mr Rehu had sections of land at Moeraki that he was considering selling. A third party known to both parties was aware that Ms Moke was looking to buy coastal land near a marae. The mutual friend made the connection and arranged for the two to meet at a Christchurch restaurant. Mr Rehu is more effusive about their first meeting than Ms Moke. He claims that it was “love at first sight” and that he knew immediately that she was the woman he wanted to spend the rest of his life with.
[5] Nothing came of Ms Moke’s possible interest in the Moeraki section, but she did invite Mr Rehu to accompany her to a promotional event on 1 December 2007. They spent that night together at Ms Moke’s home, which was the start of their intimate relationship.
1 Rehu v Moke [2018] NZFC 339.
2 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141.
3 At [5].
[6] In January 2008, the couple spent time together in Australia, having travelled there separately. On Ms Moke’s return to Christchurch, she promptly flew to Auckland for business reasons. She was met there by Mr Rehu in a Porsche motor vehicle that he had just purchased. In that same month, she transferred $10,000 to Mr Rehu, which he applied to pay the remaining cost of the Porsche.
[7] Also during January 2008, the couple travelled together in New Zealand, staying with members of each of their respective families in Hamilton, Rotorua, Ōpōtiki and Tokomaru Bay. A purpose of this trip was for Mr Rehu to travel to Whangara on the east coast to commence the process of being tattooed with his puhoro. The first session of tattooing lasted for about two weeks and Ms Moke remained with him as his supporter throughout.
[8] At this time, Mr Rehu was employed in and from Singapore on a four week on, four week off basis. He worked on oil rigs and undertook other assignments associated with the oil drilling business. It was highly paid employment.
[9] The parties are at odds as to the extent to which they were together in the first six months of 2008. Mr Rehu claims that they lived together whenever he was in New Zealand. He was not challenged on that in cross-examination during the Family Court hearing. However, Ms Moke claims that she kept her distance somewhat and maintained her own independent life. She instanced declining Mr Rehu’s invitation to his son’s 21st birthday party, received when they were together in Australia, on the ground that she did not know the boy. They did return together to Whangara in March 2008 for Mr Rehu to complete the second session of his puhoro, and on that trip they again visited members of their respective families.
[10] In April 2008, they rendezvoused in South East Asia whilst Mr Rehu was located there for his work and Ms Moke was on a trip that had been planned since before meeting Mr Rehu to visit nieces in Thailand.
[11] When they first met, Ms Moke was living in her own mortgage-free property in Lyttelton Street, suburban Christchurch. When in Christchurch, Mr Rehu lived in his property at Omaru Road, Rapaki that was built on Māori land. Mr Rehu contends
that his property became their home quite soon after they began seeing each other, with the Lyttelton Street house being their “town house”. Ms Moke disputes his claim as to the amount of time he spent at her Lyttelton Street property.
[12] Ms Moke moved some of her belongings into the Omaru Road property during the first six months of 2008 and then relocated the balance of her belongings there in July 2008.
[13] The parties became engaged during a trip to India in August 2008 and they were married in August 2010. They separated in October 2014.
Financial dealings
[14] After the initial $10,000 advance in January 2008 to assist with the purchase of the Porsche, Ms Moke advanced a further $138,000 to Mr Rehu at the end of February 2008. It is tolerably clear that this payment was applied by Mr Rehu to pay off a debt owed under a relationship property settlement with a previous partner.
[15]At the end of May 2008, Ms Moke made a further payment to Mr Rehu of
$202,000. The Judge found that amount was applied to discharge a bank loan that Mr Rehu had previously borrowed.
[16] From about the end of July 2008, Mr Rehu transferred at least substantial portions of his salary into an account controlled by Ms Moke and thereafter she had prime responsibility for the couple’s finances until their separation.
[17] In June and July 2014, Mr Rehu received three substantial payments comprising redundancy and involuntary termination payments, plus the proceeds of surrender of a life insurance policy linked with his employment.
[18] In terms of their real estate assets, Ms Moke’s Lyttelton Street home was at least partly tenanted for significant periods during the marriage. It was burgled and suffered significant fire damage in December 2012, which damage was repaired by the application of proceeds of an insurance policy.
[19] During the relationship, substantial renovations were also undertaken at Mr Rehu’s Omaru Road property.
The Family Court proceedings
[20] Mr Rehu commenced relationship property proceedings in August 2015, which took a little more than three years to come to hearing in the Christchurch Family Court. Determinations were sought on:
· the status of the payments totalling $350,000 by Ms Moke to Mr Rehu between January and May 2008;
· the status of the parties’ former home at Omaru Road;
· the status of insurance pay outs in respect of earthquake damage to the Omaru Road property of $149,849.51;
· claims by Mr Rehu to the increase in value of Ms Moke’s Lyttelton Street property;
· division of family chattels;
· the status of payments received by Mr Rehu in connection with termination of his employment; and
· compensation to Ms Moke for Mr Rehu’s repayment of a personal debt.
[21]Some of these issues do not require consideration on appeal.
Were the January-May 2008 payments loans or gifts?
[22] Ms Moke claimed repayment of the advances she had made totalling $350,000 between January and May 2008. She categorised them as loans, and also sought interest on their repayment. Mr Rehu denied liability to repay the amounts, contending that they were contributions to relationship property made after the
relationship had commenced. Accordingly, although not entirely decisive, a critical issue in determining the status of those payments was identifying the date on which their relationship began for the purposes of the Act.
[23] Assessments of whether a de facto relationship was in existence at a particular point in time are governed by the provisions in s 2D of the Act. The necessary pre- condition that is relevant here is that the two persons have to be living together as a couple, as required by s 2D(1). Subsections (2) and (3) provide guidance in deciding this issue, in the following terms:
(2)In determining whether 2 persons live together as a couple, all the circumstances of the relationship are to be taken into account, including any of the following matters that are relevant in a particular case:
(a)the duration of the relationship:
(b)the nature and extent of common residence:
(c)whether or not a sexual relationship exists:
(d)the degree of financial dependence or interdependence, and any arrangements for financial support, between the parties:
(e)the ownership, use, and acquisition of property:
(f)the degree of mutual commitment to a shared life:
(g)the care and support of children:
(h)the performance of household duties:
(i)the reputation and public aspects of the relationship.
(3)In determining whether 2 persons live together as a couple,—
(a)no finding in respect of any of the matters stated in subsection (2), or in respect of any combination of them, is to be regarded as necessary; and
(b)a court is entitled to have regard to such matters, and to attach such weight to any matter, as may seem appropriate to the court in the circumstances of the case.
[24] In this case, the Judge rejected Mr Rehu’s claim that it was “love at first sight” and that their de facto relationship commenced from their first meeting in November 2007. In working through the indicia, the Judge found that apart from the imminent
commencement of a sexual relationship, none of the relevant circumstances listed in s 2D were adequately present before the end of June 2008.4
[25] On the basis that the advances totalling $350,000 were all made prior to commencement of the de facto relationship, and on the basis that it would “beggar belief” that a woman in Ms Moke’s position would simply make gifts totalling
$350,000 to a “new found lover”, the Judge decided that the amounts were loans, not gifts.5
[26] Whilst Ms Moke claimed interest, the Judge found that there was no evidence of any agreement that interest would be charged, so the loans were treated as being interest-free.6
[27] Reviewing the evidence on the characteristics of their developing relationship in light of the submissions on appeal, the following features are relevant to its characterisation:
· A relationship of sorts developed quickly after their first meeting. In Mr Rehu’s case it was very shortly after termination of a previous relationship, whereas Ms Moke had been on her own for some time.
· There was relatively intense courting when other commitments permitted, both in New Zealand and overseas. The evidence suggests Mr Rehu was more demonstrative than Ms Moke about a commitment, and was prepared to express himself in somewhat gushy terms.
· Very shortly after the commencement of their courting, Ms Moke was prepared to make very substantial financial advances, without anything in writing or even orally agreed express terms. There was no credible evidence of an interest rate being stipulated and agreed. Whilst Mr Rehu enjoyed high earnings, Ms Moke was demonstrating substantial trust in him by undertaking the financial transactions as she did. Ms Moke is an
4 Rehu v Moke, above n 1, at [7] and [16].
5 At [22].
6 At [29].
experienced accountant and business woman who could not claim to have been duped by Mr Rehu.
· It appears they presented themselves to their respective whānau and others as being a couple, from an early point when travelling in the North Island in January 2008. It is, however, difficult to attribute any particular weight to each of them presenting the other to their whānau, because it occurred in circumstances that could have signalled a relationship anywhere on a continuum from a casual sexual relationship that was going nowhere, to a relationship steadily maturing into one that would qualify as a de facto relationship under the Act.
· They did spend a substantial amount of their free time in each other’s company, subject to the constraints mostly imposed by Mr Rehu’s work, but in some instances also by Ms Moke’s work commitments. The extent of the time they were apart, for whatever reason, inevitably distinguishes this from a relationship in which both parties lived under the same roof throughout the first half of 2008.
· The nature of the chattels and personal items relocated by Ms Moke into Mr Rehu’s house before July 2008 is not entirely clear, so cannot be distinguished from the different nature of remaining items she moved into his house in July 2008. However, in the circumstances of this relationship the maintenance of her separate address in Lyttelton Street, apparently leaving there all that she needed for day-to-day life, is an indication inconsistent with their living together as a couple in that period.
[28] On 26 November 2019, Mr Rehu’s solicitors filed an interlocutory application to adduce further evidence on the appeal. That comprised a further affidavit from Mr Rehu addressing a number of factual matters. He sought to produce a Police report from a burglary and fire at Ms Moke’s Lyttelton Street property, which recorded his Porsche having been stored in the garage at the property. He also sought to adduce email exchanges that confirmed the list of payments made by the insurer of the
Lyttelton Street property after it had been damaged. The payments totalled more than
$250,000.
[29] Mr Rehu also deposed to further details of travel in early 2008, intended to advance his claims as to the extent to which the parties were in each other’s company during periods overseas. Lastly, the affidavit attached a 2009 tax return for Ms Moke.
[30] Ms Moke opposed the admission of the further affidavit on the ground that all of the information had been available to Mr Rehu prior to the Family Court hearing. If Mr Rehu’s fresh affidavit was to be admitted, then Ms Moke sought to file a further affidavit responding on the factual matters he had deposed to.
[31] I agreed with counsel at the outset of the hearing that I would treat the new evidence as admitted de bene esse, and to review after hearing argument whether it was appropriately included.
[32] I am satisfied there was no prejudice to Ms Moke, subject to having regard to both updating affidavits, and I have accordingly included their contents in the review of the evidence.
[33] On one view, the substantial payments by Ms Moke to Mr Rehu so soon after they commenced a relationship of any sort suggests a meaningful degree of financial interdependence, or at least dependence by Mr Rehu on Ms Moke, in circumstances where she trusted him sufficiently to undertake the transactions without any terms agreed in writing, or even orally.
[34] Mr Rehu attributed a greater level of cultural significance to Ms Moke’s support for him whilst having his puhoro tattooed than she now acknowledges. At least from Mr Rehu’s perspective, her support for him through that experience reflected the role of a close companion.
[35] Considerable attention focused on an email sent by Mr Rehu to Ms Moke on 20 February 2008 whilst he was working somewhere near Singapore. It included:
… we are going to have a lovely future together as one, this I no [sic] for sure, baby.
Thanks for talking with me about that money issue. I was to embarrassed to ask ya …
… Thanks for offering to help me, pay Shirley her money, really really appreciate it Edie … I’ve got it all covered Edie. Once I sell Moeraki the money will come back girl …
…
Once we get all this sorted, we can save and start putting some funds away for our old age, make investments and I can start sorting all the land out that is willed to me …
[36] There was no email response to that email in evidence. Certainly, to the extent it suggested that Ms Moke initiated the prospect of paying money to Mr Rehu, Ms Moke did not take the opportunity to respond to stipulate her understanding that the payment was a loan.
[37] On the other hand, the reference to “once I sell Moeraki the money will come back” might suggest acknowledgement by Mr Rehu of the obligation to repay the amount involved.
[38] Advances of these significant amounts relatively early in such a relationship do signal a commitment by Ms Moke to the relationship. Providing a total of $350,000 for Mr Rehu’s use would be unlikely to occur in a casual or temporary relationship. The issue is what were the terms on which that commitment was made.
[39] The stark distinction in law between a loan and a gift in circumstances such as the present is potentially inadequate to fully reflect the circumstances, and the impact those circumstances have on a decision under the Act as to whether this would contribute to a positive finding that the parties were living together as a couple.7
[40] The reality is that they were not continuously living together as a couple. Even if Mr Rehu could establish that they lived together except when his work required him to be out of New Zealand, the developing relationship did not have sufficient characteristics to qualify whilst Ms Moke maintained the extent of independent living
7 L v P [Division of Property] [2008] NZFLR 401 (HC) at [44].
at her Lyttelton Street home in the periods during the first six months of 2008 when Mr Rehu was not in Christchurch.
[41] I accordingly agree with the Judge’s finding that, in terms of an on-going relationship in which Mr Rehu would continue to be absent for work purposes for significant periods, the permanence signalled by Ms Moke moving her chattels and personal belongings into his home changed the nature of the relationship to one that qualified under the Act.8 Shortly thereafter, in August 2008, they indicated a permanent commitment to each other by becoming engaged.
[42] Although not decisive, the fact that the advances were made prior to the parties being in a de facto relationship for the purposes of the Act does make it more difficult for Mr Rehu to sustain his claim that the payments were intended to be gifts.
[43] Reconstructing all the circumstances of the evolving relationship, the absence of an agreement that the advances were loans cannot be determinative in making out his claim. I am satisfied that, if asked at the time of the advances whether he had an obligation to repay them in the event the relationship ended within, say, three or six months, then Mr Rehu could not credibly deny an obligation to repay the amounts he had received.
[44] Conversely, if the marriage had lasted, say, 12 or 15 years during which the parties’ assets had been completely intermingled, it is equally unlikely that Ms Moke would maintain a claim that the advances were loans, retain character as her separate property and in respect of which she was still entitled to demand repayment.
[45] Seen in this light, it is untenable to characterise the advances as unconditional gifts. At the time they were made, they were advances for which Ms Moke was entitled to require repayment, subject to the prospect that, dependent on the positive development of their relationship and their relationship property, she might elect in the future not to enforce the obligation.
8 O’Shea v Rothstein HC Dunedin CIV-2002- 412-8, 11 August 2003 at [20]; L v P [Division of Property], above n 7, at [44]–[46].
[46] In the stark terms that the law requires, the outcome must therefore be that the advances were loans, repayable on demand.
[47] Mr Ormsby advanced two further propositions against Mr Rehu being liable to repay the advances made in early 2008:
(a)First, that if not gifts, then the payments were “contributions to the relationship”. That cannot avail Mr Rehu if the relevant relationship had not started when the payments were made.
(b)Second, that if there was a contractual debt, then time ran during the relationship so that the Limitation Act 2010 would be a defence to a demand for repayment. However, for advances made on terms that they were repayable upon demand, time would not begin to run for limitation purposes until the lender made demand. No limitation issue could arise.
[48] In the Family Court, the Judge reasoned that because the loans were made prior to the parties being in a de facto relationship, they did not constitute property to which the Act applied. The consequence was that the Court could not make an order requiring repayment or take Mr Rehu’s liability to make that repayment into account in settling orders on other assets and liabilities that were found to constitute relationship property.9
[49] The Family Court finding that they were loans repayable on demand advanced interest-free were therefore no more than declaratory of the liability. It was contemplated that, if necessary, Ms Moke would have to commence separate District Court proceedings to enforce her claim to repayment of the loans.
[50] On argument of the appeal, Mr Ormsby indicated that a determination on the status of the advances was sought, even if the same outcome applied by virtue of the transactions falling outside the scope of relationship property. I can accordingly do no more than declare Ms Moke’s claim for repayment of the $350,000 to be a valid one
9 Rehu v Moke, above n 1, at [16].
for which, on the state of the evidence in these proceedings, there appears to be no possible defence.
[51] If the Family Court finding of Mr Rehu’s liability to repay the $350,000 characterised as loans was upheld, then Mr Ormsby’s fall-back submission was that the extent of that liability should be taken into account in determining the division of relationship property. He submitted that the circumstances would then arise for an exception to equal sharing under s 13 of the Act. This was advanced on the basis that during the course of their relationship, Mr Rehu had contributed some $1.2 million to the relationship, contrasted with Ms Moke’s income over the same period of $288,000. Such a significant disparity of contribution in a relationship where the finances were controlled by Ms Moke was arguably sufficiently extraordinary to make equal sharing of relationship property repugnant to justice.
[52] That alternative claim can only be evaluated when all other issues in the appeal are resolved.
Claims to increases in the value of respective residential properties
[53] Substantial monies were spent both on Mr Rehu’s Omaru Road property and Ms Moke’s Lyttelton Street property during the period of their relationship. The Omaru Road property is on Māori land and the Judge accordingly had no option but to acknowledge that it was excluded from the Court’s jurisdiction under s 6 of the Act.10 The judgment recognised that if Ms Moke could make out an interest in that property, it was one that she would have to pursue in the Māori Land Court.
[54] That need to bifurcate the fora in which a resolution is achieved is recognised as extremely frustrating for both parties. On the approach the Judge took in the Family Court, the Lyttelton Street property had been retained by Ms Moke as her separate property. The Judge would only have been prepared to entertain a claim by Mr Rehu to an interest in that property, had his Omaru Road property been subject to division under the Act. In that event, the Judge foresaw the prospect that it would be manifestly unjust not to make an order for compensation in Mr Rehu’s favour in respect of
10 Rehu v Moke, above n 1, at [30].
increase in value of the Lyttelton Street property.11 However, as the Court did not have jurisdiction in respect of Omaru Road, the Judge treated that as an end of any possible order in Mr Rehu’s favour in relation to Lyttelton Street.
[55] In the appeal, Mr Rehu advanced a claim under s 9A of the Act to a half share in the increase in value of the Lyttelton Street property during the period of the relationship.12 An insurance policy of their combined interests provided cover for the Lyttelton Street property and relationship property had been used to pay the premia on that policy. Claims under that policy were met by the insurer to deal with the damage caused by the burglary and fire in December 2012. Mr Rehu’s most recent affidavit provided details of payments totalling more than $250,000 that had been expended on the property. It appears that the majority of those payments were made directly by the insurer to tradesmen retained to carry out the work.
[56] In addition, Mr Rehu claims to have done substantial work by way of painting, gardening and fencing at the property, demonstrating his commitment to it and justifying an interest in it. Ms Moke disputes the extent to which Mr Rehu worked on the property. She also disputes the extent of time he claims to have spent working or staying there.
[57] I am not persuaded that the relative extent of physical effort invested by Mr Rehu at Lyttelton Street, when taken together with the financial commitment of relationship property in funding maintenance and other outgoings, most particularly the insurance premia, can be reduced to a de minimis extent that precludes his having an interest in the increase in its value.13 I respectfully adopt a somewhat different course to that taken in the Family Court, but acknowledge that orders on the terms I consider appropriate are dependent on there being a consistent approach to Ms Moke’s claim to an interest in the increase in value in Mr Rehu’s property.
11 Rehu v Moke, above n 1, at [37]–[38].
12 Property (Relationships) Act 1976, s 9A; Rose v Rose [2009] NZSC 46; [2009] 3 NZLR 1 at [24]– [26].
13 Property (Relationships) Act 1976, s 9A; Nation v Nation [2005] 3 NZLR 46 at [69]–[71]; Fisher on Matrimonial and Relationship Property (online ed, LexisNexis) at [11.41].
[58] The parties recognise that there is currently no clear evidence on the value of Lyttelton Street in mid 2008 when the relationship commenced. Although there are now records of the extent of monies applied to effect repairs, valuation at the end of the relationship is also somewhat unclear.
[59] On all the evidence, I consider that there is a compelling case for each party to be acknowledged as having an interest in the increase in value during the period of the relationship of the properties retained as their separate property, and that interest would be relationship property. However, settling orders in this appeal on that basis is precluded by the uncertainty of outcome in the Māori Land Court of Ms Moke’s reciprocal claim in relation to the Omaru Road property. On the available evidence as expanded by counsel, it appears that there may be an increase in the value of Mr Rehu’s property of approximately $80,000-$100,000 more than the equivalent increase in value of Ms Moke’s property.
[60] In the interests of finality, I would endorse as an appropriate resolution consistent with the principles of the Act that each party recognise that the other retains that separate property. That would be subject to the reciprocal claims made by each to the increase in the value of the other’s property during the relationship by Mr Rehu paying to Ms Moke a sum in the vicinity of $40,000 to $45,000, being one half of the likely difference. I urge the parties to accept that a resolution along these lines is infinitely preferable to further litigation, and would contribute to a cost-effective conclusion where the alternative will inevitably incur further substantial costs that should be seen as unnecessary.
[61] The order I consider appropriate in respect of Lyttelton Street is dependent upon a consistent approach being adopted in relation to the increase in value of Mr Rehu’s property. Such an outcome could be achieved consistently with the Act, without resort to s 16.
[62] Mr Rehu is accordingly not entitled to enforce any order in relation to the interest I have recognised, unless and until the position in relation to the increase in value of the Omaru Road property is resolved consistently with the indication I have provided, or other terms acceptable to Ms Moke.
Chattels
[63] The Family Court judgment dealt with division of the relationship chattels in the following terms:14
[39] Having called evidence on this subject, including that of an expert valuer, Mr Lowrey, the parties, to their credit, reached the following agreement:
· Of the chattels that had not been valued, Ms Moke may select what she wants and the balance to be either sold, with the proceeds to be equally divided, or given to the local marae. I direct accordingly.
· As to the chattels that had been valued, agreement as to value had been reached with the result that Mr Rehu owes Ms Moke
$117,950. I direct that he pay her this sum.
[64] Mr Rehu challenges those directions on the basis that the Judge erred in treating the parties as having reached agreements to that effect.
[65] Claims to a division of family chattels were the subject of submissions filed with the Family Court after the substantive hearing. The Judge took from Ms Moke’s post-hearing submissions that agreement had been reached on the terms reflected in the judgment. Further submissions filed with the District Court on Mr Rehu’s behalf disputed that position. On appeal, counsel argued on Mr Rehu’s behalf that the orders in respect of chattels needed to be revisited because they were based on a misunderstanding that agreement had been reached.
[66] Beyond that point, the extent of differences between the parties had been helpfully narrowed by counsel by the time of the argument on appeal. The parties were at odds over the treatment, and in a number of cases the valuation, of individual items including chattels, a range of motor vehicles and the dates on which an overseas bank account maintained by Mr Rehu ought to have been valued by conversion into New Zealand dollars. During oral submissions, counsel did their best with what remained a messy aspect of the dispute.
14 Rehu v Moke, above n 1, at [39].
[67] Doing the best I can in light of the final position left with me by counsel, the dispute in relation to chattels was relatively confined. After the Family Court hearing, Ms Moke prepared a schedule which adopted the values of all relevant chattels as established by a valuation undertaken by McCrostie Valuers of Christchurch, who Mr Rehu had nominated. The schedule may reasonably have given the Judge the impression that it was agreed. Mr Rehu did not accept the valuation of all items but it was realistically accepted that on appeal I could not recast the values attributed to any of the individual items.
[68]All the chattels valued totalled $313,825. Mr Rehu conceded that the sum of
$3,375 should be excluded for pounamu items treated as taonga belonging to Ms Moke prior to commencement of the relationship. Accordingly, Mr Rehu contended for total chattels available for division at $310,450. However, that total included an amount of
$8,000 for further items of pounamu which Ms Moke claimed as her separate property, but in respect of which Mr Rehu argued there was no evidence they had been acquired before the commencement of the relationship. It would follow that those items ought to be included as relationship property. On the evidence as drawn to my attention, I am satisfied there was sufficient evidence for Ms Moke to make out that claim to the separate status of the additional items of pounamu. That reduces the total valuation of chattels to be divided to $302,450.
[69] Mr Rehu had maintained an account with HSBC. To the extent that the balance at the time of separation was relationship property, Mr Rehu valued the account at
$423,740. Ms Moke’s valuation of the balance in the account was initially $428,361, but at the hearing Ms Mitchell conceded that the conversion rate adopted for Mr Rehu was the more appropriate one so the amount to be included is $423,740.
[70] Working from the “high level analysis” figures provided to me by Mr Rehu’s counsel during the hearing, those adjustments, when other assets are added to the chattels, would reconcile at $815,758.
[71]At an earlier point in the dispute, Mr Rehu made an interim distribution of
$345,697 to Ms Moke, which he appears to have funded substantially out of the sale of assets and application of cash payments he had received.15
[72] Deducting $8,000 for the disputed pounamu items from both the total of relationship property and the total of assets listed in Mr Rehu’s schedule retained by Ms Moke results in an overpayment in her favour once the interim distribution paid to her is taken into account. However, before quantifying that amount, it is necessary to take into account two additional items, the character and quantum of which were not in dispute.
[73] Ms Moke accepts that she has received Māori land rentals that were the separate property of Mr Rehu in the amount of $5,182. On the other side of the ledger, there is no challenge to the Family Court Judge’s finding that Mr Rehu applied
$16,500 advanced to him by Ms Moke for the purposes of discharging a personal debt.
[74] Adapting Mr Rehu’s high level analysis discussed during the hearing, the position to this point is as follows:
Total relationship property $815,758 Appropriated as to:
· Mr Rehu $347,586
· Ms Moke (including interim distribution) $468,172
[75] Accordingly, Ms Moke has received $120,586 more than Mr Rehu, one half of which is $60,293. That amount is to be adjusted by an increase of $5,182 for the Māori land rental, less $16,500 being Mr Rehu’s obligation to reimburse Ms Moke for funding of his repayment of a personal debt. The current extent of overpayment on this basis is accordingly $48,975, which is appropriately treated as a credit owed by Ms Moke to Mr Rehu, subject to resolution of the outstanding issues. I decide the outstanding issues relating to these items on those terms.
15 I note that the comparable schedule appended to submissions for Ms Moke included this interim distribution at the lower amount of $345,303, but from the other evidence it appears the higher figure contended for Mr Rehu is the more reliable.
Claim for unequal division of property
[76] Mr Ormsby argued for Mr Rehu that if the Family Court ruling on the status of Ms Moke’s $350,000 advances to Mr Rehu in the first half of 2008 was upheld on appeal, then the consequence would be a sufficiently unequal and/or unfair division of all potential assets as to warrant an order for unequal division of the remaining relationship property pursuant to s 13 of the Act. In material part, that provision is as follows:
13 Exception to equal sharing
(1) If the court considers that there are extraordinary circumstances that make equal sharing of property or money under section 11 or section 11A or section 11B or section 12 repugnant to justice, the share of each spouse or partner in that property or money is to be determined in accordance with the contribution of each spouse to the marriage …
[77] An initial difficulty in considering this argument is the uncertainty over the final division of relationship property. I have undertaken an analysis of the arguments available on such an application, on the assumption that the competing claims to a share of the increase in value of the parties’ separate properties at Lyttelton Street and Omaru Road are resolved along the lines of my suggestion at [60] above.
[78] In asset terms, that would mean that both then retained, free of any claims, their respective properties at those addresses at whatever current valuations are appropriate. Mr Rehu will have retained motor vehicles of relatively substantial value, compared with the vehicles and chattels allocated as the property of Ms Moke. There is nothing exceptional about such an outcome.
[79] Mr Rehu would presumptively be required to discharge the balance of his debt owed for the advances in the first half of 2008 by payment of approximately a further
$300,000 after allowing for the credit to him for overpayment in the interim distribution. The use he made of those advances was substantially to repay debts incurred prior to meeting Ms Moke.
[80] On this argument, the feature of the couple’s financial affairs relied on most heavily by Mr Ormsby was the disproportionate contribution of salary made by Mr Rehu relative to Ms Moke’s income. Mr Rehu contributed some $1.2 million
compared with Ms Moke’s contribution of $288,000, in a relationship where Ms Moke took control of all their finances during that period. I am satisfied from the evidence that the parties maintained a relatively high standard of living during the period of their relationship, no doubt influenced by the size of Mr Rehu’s salary. They both enjoyed the advantages and trappings that came with the ready availability of income and the evidence does not suggest that Mr Rehu was pressured by Ms Moke to spend at a level beyond that which he was comfortable with. In those circumstances, the substantial disproportion between his and her contributions to their disposable income does not raise any spectre of repugnancy to justice when dealing with a division of what is relationship property on the usual principles applying under the Act.
[81] It may be that Mr Rehu feels aggrieved at the status of the advances he received from Ms Moke in the first half of 2008 being – at least from his perspective – recast after the relationship ended. From his perspective, calling up loans that he treated as gifts which contributed to their relationship is unfair to an extent that redress is warranted by an unequal division of the rest of the property that does fall under the Act or is to be treated consistently with the principles of it.
[82] However, those circumstances do not qualify as rendering equal sharing repugnant to justice under the stringent test required by s 13.16
Summary
[83]Accordingly, the outcome of the appeal is as follows:
(a)I concur with the Family Court judgment that the advances by Ms Moke to Mr Rehu in the first half of 2008 should be treated as loans, advanced interest free on demand.
(b)The appropriate resolution of the parties’ complementary claims to increases in the value of their separate properties at Lyttelton Street and Rapaki ought to be resolved by applying the same formula, namely that the other party has a one half interest in the increase in the value of
16 Martin v Martin [1979] 1 NZLR 97 (CA) at 111; Browne v Starke [2016] NZFC 7132 at [42]– [43]; Joseph v Johansen (1993) 10 FRNZ 302 (CA) at 107.
those properties during the period of the relationship. Given the absence of jurisdiction to make orders in respect of Mr Rehu’s Omaru Road property, no order in respect of his claim to one half of the increase in value of Ms Moke’s Lyttelton Street property is enforceable unless and until agreement is reached or orders made by the Māori Land Court on equivalent terms in respect of the Omaru Road property.
(c)The remaining disputes in respect of division of chattels are to be dealt with in the terms outlined in [75] above.
(d)There is no case for Mr Rehu to bring a claim for unequal division of property under s 13 of the Act.
Costs
[84] Neither party addressed costs in their submissions. My provisional view is that the appeal has been largely unsuccessful, but unusual aspects about the terms on which the dispute was left by the Family Court arguably justified the bringing of the appeal. Subject to the parties sensibly resolving their complementary claims to the increase in value of their otherwise separate properties, I would be inclined to award Ms Moke a modest portion of scale 2B costs on her opposition to the appeal.
[85] I will receive memoranda if necessary, but am not to be taken to encourage any further contests between the parties.
Dobson J
Solicitors:
Cavell Leitch, Christchurch for appellant
Cunningham Taylor Law, Christchurch for respondent
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