Shi v Wilson

[2013] NZHC 3115

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-3693 [2013] NZHC 3115

BETWEEN  LEI SHI Plaintiff

ANDNORMAN GARY WILSON Defendant

Hearing:                   22 October 2013

Appearances:           Lady Chambers QC and J W Wall for Plaintiff

H Fulton for Defendant

Judgment:                25 November 2013

JUDGMENT OF COOPER J

This judgment was delivered by Justice Cooper on

25 November 2013 at 4.30 p.m., pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date:

Solicitors:

Dyer Whitechurch, Auckland

Bell-Booth Sherry, Takapuna
Copy to:

Lady Deborah Chambers, QC, Auckland

H Fulton, Auckland

SHI v WILSON [2013] NZHC 3115 [25 November 2013]

Introduction

[1]      The applicant, Lei Shi, applies to extend the time for appealing a judgment delivered on 12 February 2009 by Judge Clarkson in the Family Court in the context of a long-running dispute over the division of relationship property.  Ms Shi further seeks to adduce new evidence on appeal, and that the appeal be consolidated with a separate proceeding that the respondent, Mr Wilson, has commenced in this Court. Mr Wilson’s  proceeding  alleges  that  Ms Shi’s  parents  and  brother  hold  certain property on trust for Mr Wilson and Ms Shi.

Background

[2]      The length of the relationship between Ms Shi and Mr Wilson was important for the division of the relationship property.  The parties evidently agreed that the question of how long their relationship had lasted should be tried as a preliminary issue.  It was common ground that the relationship commenced in December 1996. The issue of when it ended was tried before Judge Clarkson, and in her judgment of

12 February 2009 she accepted   Mr Wilson’s evidence that the  relationship had lasted until June 2006.   She rejected Ms Shi’s evidence that the relationship had ended in December 1999, and relied on evidence by third parties which she found supported Mr Wilson’s account.  Evidence that Ms Shi called from her mother was rejected as self-serving and evidence from her father was dismissed as biased. Evidence Ms Shi called from other parties was also rejected, as those persons had not had much contact with the couple.  In the credibility contest between Ms Shi and Mr Wilson, she preferred the evidence of Mr Wilson for reasons that she gave.

[3]      Judge  Clarkson’s  decision  did  not  determine the other  issues  relevant  to division of the claimed relationship property.  The substantive relationship property proceedings were scheduled to be heard in October 2012.   However, Judge Neal, another Family Court Judge, raised an issue as to jurisdiction.   Almost all of the property which was the subject of the dispute was held by Ms Shi’s parents and brother.  It appears that over the course of their relationship, Mr Wilson and Ms Shi had been engaged in buying, renovating and selling properties and, as part of that activity, members of Ms Shi’s family from time to time became registered as the proprietors of those properties.   The real issue therefore was whether there was a

constructive or resulting trust in respect of that property.  Judge Neal pointed out that the Family Court  had  no  jurisdiction  to  adjudicate on  equitable  claims  and  the proprietors of the property were not before the Family Court in the relationship property proceedings.

[4]      Consequently, Mr Wilson commenced  a proceeding in the High Court in November 2012, alleging that certain property was held on resulting trust.1  An order was made that the relationship property proceeding be transferred from the Family Court to the High Court to be consolidated with the resulting trust proceeding.

[5]      The resulting trust proceeding names Ms Shi as the first defendant, and her parents and brother as the second defendants.   The claim alleges that the de facto relationship “terminated in or about 2006”.   This is the issue that was essentially determined by Judge Clarkson.   If the relationship was of the duration claimed by Ms Shi, the Property (Relationships) Act 2002 would not apply, as s 4C(2) provides that that Act does not apply to de facto relationships that ended before 1 February

2002.  In that case, the only way in which much of the property could be claimed by

Mr Wilson would be through the resulting trust proceeding.

[6]      Before the relationship property proceeding was transferred to this Court, Mr Wilson  swore  an  affidavit  of  documents  dated  25  September  2009  which, amongst other things, included his bank statements.  He was later ordered by Judge Mather to swear an affidavit addressing certain discovery issues raised by Ms Shi. The affidavit filed in accordance with that order, which was made on 14 February

2012, attached further material of which Ms Shi claims she had previously been unaware.   It is now claimed that some of that material was relevant to the issues canvassed before Judge Clarkson and ought to have been discovered for the purposes of the hearing on the preliminary issue.  Had Ms Shi been aware of the information at the relevant time she would have been able to raise it in the context of that

hearing.

1      The value of the property in dispute exceeds the jurisdiction of the District Court.  That Court would otherwise have had equitable jurisdiction under s 34 of the District Courts Act 1947:  see Yeoman v Public Trust Ltd [2011] NZFLR 753 (HC).

[7]      The information in question is in various categories, but principally consists of  bank  statements,  correspondence  involving  Mr Wilson,  and  various  welfare payments that he obtained at relevant times.   There is also reference to reports obtained by Ms Shi from private investigators.

The applications for leave to appeal out of time and to adduce further evidence on appeal

[8]      Ms Shi acknowledges that her notice of appeal was filed well out of time, however, she says the delay in filing is explicable in the context of this litigation. She has been represented by various counsel in the Family Court proceedings and at times represented herself.   While she was represented before Judge Clarkson, she changed solicitors shortly after the decision was given, and around the time she was required to file an appeal.  In addition, Ms Shi’s ability to engage in the proceedings was hampered by her relatively poor English.

[9]      Furthermore, much of the further evidence that Ms Shi now seeks to have admitted was obtained through further discovery made by Mr Wilson after Judge Clarkson’s decision.  Ms Shi’s appeal rests on this further evidence (and some other evidence that relates to it). The evidence is directly relevant to the issue of whether she and Mr Wilson were living together as a couple at relevant times.  She claims that  the  further  evidence  undermines  Mr Wilson’s  credibility  in  relation  to  the evidence he gave in the Family Court, and supports her claim that their relationship ended in 1999, she submits that this issue is critical in the resulting trust proceeding and, if Judge Clarkson’s finding is left intact, she will be at a considerable disadvantage in defending that claim.

[10]     Further,  Ms Shi  submits  that  there  would  be  little  material  prejudice  to Mr Wilson  should  the Court  grant  her leave to  appeal  out  of  time.   The delay involved would not have a significant impact because the division of the relationship property is dependent in any event upon the resolution of the resulting trust proceeding, which still awaits hearing.  On the other hand, she claims there would be significant prejudice to her if leave were refused.

Ms Shi’s affidavit

[11]     Ms Shi relies for the present applications on her affidavit made on 5 August

2013.  Lady Chambers QC noted that it related to three key periods:  first, the period during which Ms Shi says their relationship ended in 1999;   secondly, the period following separation through to 2005, during which Ms Shi and Mr Wilson were living apart;  and finally, the period during 2005-2006 when Ms Shi and Mr Wilson were  living  together  but  not,  on  Ms Shi’s  evidence,  as  a  couple.    The  further evidence  sought  to  be  admitted  on  the  appeal  if  leave  is  granted  comprises documents created by independent agencies during those three periods of time.

[12]     In respect to the first time period, Ms Shi says that she left the property where she  had  been  living  with  Mr Wilson  in  December  1999,  moving  to  an  address purchased by her parents.   In August 2001 she applied for the Domestic Purposes Benefit on the basis that she was a solo parent.  Attached to her affidavit is a Work and Income form which assessed her as having separated from the respondent in December 1999.   Ms Shi has also attached a letter from the Ministry of Social Development summarising Mr Wilson’s tax payments for the years ending 1997 to

2007.  Those show that Mr Wilson was in receipt of benefit payments on the basis that he was single and unemployed between September 2000 and September 2004.

[13]     Other tax records are also attached to Ms Shi’s affidavit which show that between 1999 and 2002, Mr Wilson was in receipt of an accommodation allowance and claiming a rebate for child support payments.  This allowance was claimed on the basis that he was living alone.  Further, the child support payments in respect of which Mr Wilson sought a rebate were not connected to the son that Mr Wilson and Ms Shi had, and she did not claim child support until August 2001.  It is contended that those payments must have related to another child.

[14]     Ms Shi says that Mr Wilson and she lived separately between 1999 and 2005, and any contact was simply as a result of her family engaging Mr Wilson to carry out renovations at various properties.  Work and Income records are relied on to show that he was living in a separate property from that occupied by Ms Shi, and that he was claiming an accommodation allowance until November 2004.  He received mail

at various addresses over this period, but none of them was the address at which

Ms Shi lived.

[15]     Reference was also made to Mr Wilson’s bank account statements, showing that he made frequent withdrawals from an ATM at Wyndham Street, shortly after receiving his benefit payments.  These regular withdrawals were relied on to support a claim that Mr Wilson was living in the central city.  Mr Wilson’s explanation for those withdrawals was that he was employed at a construction site nearby.

[16]     Ms Shi’s affidavit also annexes a “PAX Movement History” report, said to demonstrate that Mr Wilson went on a number of overseas trips during the relevant period.  In evidence in the Family Court, he said that he went to Australia “two or three times”, but the further evidence shows he made a total of nine trips, including five to Sydney and other trips to Suva, Nadi, Taipei and Bangkok.  On one occasion, in  February  2001,  he  applied  for  an Australian  tax  number,  indicating  that  he intended to move permanently to Australia to seek work.

[17]     It was accepted that the parties lived together during 2005-2006.  However, Ms Shi seeks to rely on two reports by a private investigator, dated respectively 5 and 22 January 2007 which she claims support her contention that Mr Wilson was in a relationship with another woman, a Ms Chen, during that time.   She claims the evidence also supports Ms Shi’s claim that Ms Chen gave birth to a child fathered by Mr Wilson, conceived at some time in February 2006.

[18]     Other exhibits attached to the affidavit were Telecom accounts, which Ms Shi claims demonstrate that the pair were paying different Telecom accounts during the relevant period.   Also attached was a temporary driver’s licence for Mr Wilson, having an expiry date of 6 June 1999 and recording that his address at the time was a property in Kohimaramara, where Ms Shi says she never resided.

[19]     Finally, there was evidence said to demonstrate inappropriate sexual activity having taken place which resulted in the criminal prosecution of Mr Wilson.  Ms Shi claims that evidence “altered the complexion” of the evidence adduced in the Family Court, and might have altered the Judge’s evaluation of the couple’s relationship.  In

my view, this material is of no probative value and it has not been influential in my consideration of the present applications.

Principles to be applied

[20]     The issues relevant on both the application for leave to appeal out of time and the application to adduce further evidence ultimately turn on whether granting the applications is desirable in the interests of justice.   The factors to be taken into account when exercising the discretion to extend the period for bringing an appeal are well-established.   In Ritchie v Ritchie, in an often cited passage, Anderson J

outlined those factors as follows:2

… (a) the length of time which has elapsed between the expiry of the time limit  fixed  by  the  statute  and  the  bringing  of  the  application;    (b)  the adequacy of the explanation offered for the delay;  (c) the merits of the case; (d) prejudice to the respondent.  But the real enquiry to be made is whether it is just to grant leave in all the circumstances and the four factors which have been mentioned are only tests by which the justice of the application is to be measured.

[21]     More recently, Ellis J identified the following relevant factors in Dyall v

Simpson:3

(a)       The reasons for the delay;

(b)       The merits of the proposed appeal;

(c)       Any prejudice to the other party; and

(d)       Where the overall interests of justice lie.

[22]   As to the admission of further evidence on appeals under the Property (Relationships) Act, there is broader scope to admit such evidence than in ordinary civil appeals to the High Court.  The proper approach is that explained by Heath J in Coory v Coory:4

[15]     The jurisdiction to admit further evidence on appeal is informed by “the interest of justice”.  That is a broader test than otherwise applies in civil appeals to this Court: r 716 of the High Court Rules.  In appeals to which r

2      Ritchie v Ritchie [1992] NZFLR 266 (HC) at 268.

3      Dyall v Simpson HC Auckland CIV-2011-404-2027, 5 July 2011.

4      Coory v Coory HC Auckland CIV-2008-404-4431, 14 November 2008.

716 applies, leave may only be granted if there were “special reasons for hearing the evidence”: r 716(3).

[16]      The test under s 39B(3) was discussed in Nation v Nation [2005] 3

NZLR 46 (CA) at [165], as follows:

“[165] This Court has power under s 39B(3) of the PRA to receive further evidence if it thinks that the interests of justice require it to do so. This Court described the power under s 39B(3) as wider than the discretion to allow further evidence under (now) R 24 of the Court of Appeal (Civil) Rules 1997 in  Castle v Castle [1980] 1

NZLR 14 at p 17. But in the same case, this Court said it would be wrong to allow an appellant (or presumably any party to an appeal) to bolster his or her case with additional evidence that was available at the lower Court hearing but not adduced because of the particular view of the case being taken at that time.”

[17]     The  approach  I  take  to  the  application  is  to  consider  first  the relevance of the “new” evidence and its cogency.  If the new evidence were relevant and cogent and there was a valid explanation for not having it before the Family Court, there may be good reason to allow the evidence to be admitted.  However, even if that threshold were met, the desirability of finality in litigation needs to be taken into account, particularly if there were likely  further  delays  due  to  the  need  for  Mr  Coory  to  respond  to  any evidence admitted.

[23]     Where the evidence is relevant and cogent, it may be admitted even where it is not fresh evidence.  In Bourneville v Bourneville Williams J said:5

[33]     … the conclusion must be that the appellant knew all the additional material existed well before the Family Court hearing and that, with the exercise of reasonable diligence, the appellant could have put in evidence before the Family Court all the material now sought to be put in evidence on this appeal.

[34]     For  general  appeals,  that  conclusion  would  normally  provide  a strong indicator towards dismissal of the present application but, as earlier mentioned, appeals under the Property (Relationships) Act 1976 s 39B (3) require demonstration that the receipt of further evidence is in the interests of justice, arguably a broader and less restrictive test with which applicants must comply.   That test may be paraphrased as posing the question as to whether, had this contested material been put in evidence in the Family Court, it might reasonably be regarded as possibly making a material difference to the outcome and accordingly whether the interests of justice mandate its receipt on appeal.   Thus, the question is whether it is in the interests of justice – accepting that applies to both parties – to permit the appellant to put the documentary material in evidence and rely on it in support of her appeal.

5      Bourneville v Bourneville HC Auckland CIV-2007-404-2656, 11 February 2008 at [33]-[34].

Analysis

[24]     Clearly there has been a long delay in seeking leave to appeal.  However, I accept that Ms Shi’s ability to mount an appeal against Judge Clarkson’s decision depended upon her obtaining the further evidence, and that process has taken some time.  Much of the evidence was not discovered by Mr Wilson and therefore had not come to Ms Shi’s attention until well after the expiry of the appeal period.  Counsel for the respondent, Mr Fulton, did not respond directly to the suggestion that the material attached to Ms Shi’s affidavit ought to have been before Judge Clarkson, other than to say he understood that the parties had agreed that the length of the relationship would be considered as a preliminary issue in the Family Court, and had co-operated to ensure that that issue could be quickly determined.   He was not counsel at the time, but the inference I think he was intending me to draw was that discovery may not have been as complete as it might have been because of the circumstances.

[25]     Lady Chambers submitted that the evidence of Work and Income records, tax records and bank statements is relevant to whether the couple were living together from December 1999, bears on Mr Wilson’s credibility, and might have affected the result.

[26]     Mr Wilson claims that the benefits the pair received on the basis of being single were a result of an arrangement between them to lie about their status to the relevant agencies, so as to claim the benefits in question.  However, there may be difficulties with that stance given that it appears that Mr Wilson did not claim a benefit until approximately nine months after Ms Shi had moved to a different address, and Ms Shi’s claim for the domestic purposes benefit and child support was not made until nearly a year after that.  The timing of Ms Shi’s application for child support also raises credibility issues as tax records indicate that Mr Wilson was claiming a rebate for child support payments made prior to Ms Shi’s application even though he denies having any other children.

[27]     Mr Wilson’s explanation of the withdrawals at the Wyndham Street ATM is also bears on his credibility because of the fact that he was receiving an unemployment benefit from Work and Income.

[28]     It is also pertinent that Mr Wilson and Ms Shi were paying for separate phone accounts, and that Mr Wilson made a number of trips to Australia going so far as to apply  for  an Australian  tax  number.    Evidence  tending  to  suggest  that  he  was seriously considering moving to Australia to work is clearly relevant to whether he and Ms Shi were still living in a relationship.

[29] There are some aspects of the intended further evidence that I do not consider should be adduced. They include the references to inappropriate sexual activity on Mr Wilson’s part (already referred to at [19] above) and also the private investigation reports. Insofar as the latter is concerned, a private investigator’s report dated 12

November 2007 was before the Family Court, and that report stated that Mr Wilson had been in a relationship with Ms Chen for over three years and that they had had a daughter together.  Consequently, it is difficulty to see how the two further reports could have influenced the Judge’s decision and the reports are not fresh in any relevant sense.

[30]     I consider that the other evidence, however, is sufficiently cogent to justify it being admitted if the appeal is allowed to proceed.  That is not to say, of course, that the further evidence would be determinative.  Judge Clarkson gave detailed reasons for the findings that she made.  However, in my view, Ms Shi’s application should succeed and it will be in the interests of justice if the further evidence is able to be taken into account.

[31]     This case has the special aspect that the issue of the length of the relationship can legitimately be raised (and has been pleaded) in the context of the resulting trust proceeding, at least by the second defendants.  Mr Fulton at one stage suggested that as a consequence of Judge Clarkson’s decision, there was an issue estoppel.  While that might be arguable in the case of Ms Shi, it can hardly apply in the case of the other defendants who were not parties to the relationship property proceeding.  As I understand it, they claim that the property which is the subject of the resulting trust

claim is their money.  The issue is therefore open and will need to be addressed by relevant evidence.  That being the case, there is less prejudice than might often be occasioned by granting leave to appeal out of time.

[32]     It is also relevant that the evidence in question should have been discovered earlier, to ensure that all relevant materials were before Judge Clarkson.  It would be unfortunate if the possible effect of the new evidence was not able to be weighed when considering the relevant issues in the High Court.  The possibility of this Court reaching a different conclusion from that already reached in the Family Court on the length of relationship issue cannot be ruled out.   It would be problematic if there were conflicting decisions of this Court and the Family Court on what is essentially a factual issue common to both proceedings.  This is another special aspect of this case which in my view favours the grant of both the application to extend the time for appealing and to adduce the further evidence on appeal.

[33]     Mr Fulton submitted that prejudice would arise from the fact that the parties have  expended  much  time  and  effort  in  dealing  with  what  they thought  was  a relationship property claim down to the point at which the jurisdictional issue was raised and the matter was transferred to this Court.   However, I consider there is force in Lady   Chambers’ response that if there is prejudice as a result of wasted effort  that  is  not  something  for  which  Ms Shi  ought  to  be  held  responsible. Mr Wilson was the applicant in the Family Court and it should have been apparent to his advisors that the target of his proceeding was in large part property in the hands of third parties.

[34]     It is unsatisfactory that Ms Shi did not seek to appeal the decision within time.   However, in the special circumstances of this case I consider there is both justification for the delay by virtue of the documents that only came to her attention after Judge Clarkson’s decision, and no real prejudice to Mr Wilson if leave is granted.  That is so because he will need to traverse in the High Court the issues relevant to the length of the relationship in any event.

[35]     For those reasons, the overall interests of justice favour the granting of the applications.

Consolidation

[36]     There was no real contest about the issue of consolidation.  The proceeding that originally started as a relationship property proceeding in the Family Court has been transferred to this Court.   It will now need to be determined, as well as the resulting trust proceeding commenced in this Court.

[37]     The order made by the Family Court for the transfer of the proceeding to this Court purported also to direct that it be consolidated with the resulting trust proceedings commenced in this Court by Mr Wilson.  It was not competent for the Family Court to make such an order.6   The present application is for consolidation of the appeal with the resulting trust proceeding.

[38]     Insofar as the present application is concerned  there  is no reason not to consolidate the appeal with the resulting trust proceeding.   Mr Fulton raised some interesting issues as to how the evidence given in the Family Court would be treated for the purposes of such an appeal in the context of consolidated proceedings.  I do not consider that those issues can or should be addressed by me for the purposes of this judgment.

[39]     In the circumstances, although the application did not seek it, I also consider it will be appropriate for there to be consolidation with the substantive relationship property proceedings transferred from the Family Court.  There is plainly a common question of fact applicable to all three proceedings, and hearing them together will result in a more efficient process than if the relationship property proceedings are left to pursue a separate course.   I note that the power to order consolidation under r 10.12 of the High Court Rules may be exercised by the Court of its own volition.

Result

[40]     For the reasons given, I grant Ms Shi’s application to extend the time for

appealing, and adduce further evidence on the appeal with the exception of the

6      The power of consolidation conferred by r 135 of the Family Courts Rules 2002 applies only to proceedings in a Family Court: r 5(2).

evidence  at  paragraphs  [41]–[47]  and  Exhibits L-P of her affidavit  affirmed on

5 August 2013.

[41]     I also grant the application for consolidation.