Thakurdas v Wadsworth
[2018] NZCA 516
•21 November 2018 at 11.00 am
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA413/2018 [2018] NZCA 516 |
| BETWEEN | PETER ARUN THAKURDAS |
| AND | GARRY DESMOND WADSWORTH AND SHARON ANNE ELIZABETH WADSWORTH AS TRUSTEES AND EXECUTORS OF THE ESTATE OF SABA THAKURDAS OF AUCKLAND (DECEASED) |
| Hearing: | 25 October 2018 |
Court: | Miller, Clifford and Gilbert JJ |
Counsel: | S R Jefferson QC and L M Reed for Appellant |
Judgment: | 21 November 2018 at 11.00 am |
JUDGMENT OF THE COURT
AThe appeal is dismissed.
BThe appellant must pay the respondents costs for a standard appeal on a band A basis and usual disbursements.
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REASONS OF THE COURT
(Given by Miller J)
The question in this appeal by leave is whether personal representatives of a deceased spouse may bring an application under s 182 of the Family Proceedings Act 1980 (the Act).[1] The Family Court and High Court both held that the personal representatives may bring an application.[2] For reasons we may state quite shortly, we agree.
The facts
[1]Leave was granted in Thakurdas v Wadsworth CIV-2017-404-1950, 6 July 2018 (Minute of Jagose J).
[2]Wadsworth v T [2017] NZFC 5833, (2017) 4 NZTR 27-014; and Thakurdas v Wadsworth [2018] NZHC 1106, [2018] NZFLR 451 [HC judgment].
For our purposes the facts are few and uncontroversial. Peter and Saba Thakurdas married in 1991. There is one child of their marriage, Faraaz, who is aged 22.
On 13 March 2002, the spouses settled a family trust under which they and Faraaz are discretionary beneficiaries and Faraaz is the final beneficiary. It is common ground that this this is a nuptial trust, entered on the premise that the marriage would endure. The trustees were Mr and Mrs Thakurdas and a mutual friend, Mr Trevor Atwood. The trustees held the former family home at Gillies Avenue, Epsom, Auckland, and leased it to Mr and Mrs Thakurdas.
The Family Court dissolved the parties’ marriage on 15 October 2014. On 3 December 2014 Mrs Thakurdas brought proceedings under the Property (Relationships) Act 1976 (the PRA) seeking division of property. Those proceedings have not been resolved.
On 23 January 2015 Mrs Thakurdas succumbed to cancer. Faraaz is the sole beneficiary under her will.
The family home has been sold and its proceeds are held in trust pending resolution of this litigation.
On 18 June 2015 the respondents, who are Mrs Thakurdas’s personal representatives, brought an application under s 182 of the Act, seeking an order for equal distribution of the net proceeds of sale of the family home between Mr Thakurdas and the estate. It is common ground that this application was brought within a reasonable time following dissolution of the marriage. It was met with a protest to jurisdiction on the ground that her claim under s 182 was personal in nature and abated on her death.
The appellant’s case
Under s 182(1), which we set out below, the Family Court may inquire into the existence of any nuptial settlement made on the parties to a marriage or civil union and may make such orders as it thinks fit with respect to property settled, for the benefit of the parties or the children of their relationship. The Court’s power to so intervene arises on dissolution of the marriage or civil union and subsists for a reasonable time afterward.
Mr Jefferson QC, for the appellant, argued that s 182 is premised on a “continuing provision”, to be distinguished from the separate PRA regime for division of relationship property. He argued that s 182 is a product of its history in English law, and he invited us to follow the decision of Ormrod J (as he then was) in D’Este v D’Este, in which the jurisdiction was characterised as personal in nature, such that it abated on death.[3]
May a personal representative apply under s 182(1)?
[3]D’Este v D’Este [1973] Fam 55 (HC) at 59, referring to Matrimonial Courts Act 1965 (UK), s 17.
This is a question of statutory interpretation, so we begin with the statutory language. Section 182 provides:
182 Court may make orders as to settled property, etc.
(1)On, or within a reasonable time after, the making of an order under Part 4 of this Act or a final decree under Part 2 or Part 4 of the Matrimonial Proceedings Act 1963, the Family Court may inquire into the existence of any agreement between the parties to the marriage or civil union for the payment of maintenance or relating to the property of the parties or either of them, or any ante-nuptial or post-nuptial settlement made on the parties, and may make such orders with reference to the application of the whole or any part of any property settled or the variation of the terms of any such agreement or settlement, either for the benefit of the children of the marriage or civil union or of the parties to the marriage or civil union or either of them, as the Court thinks fit.
(2)Where an order under Part 4 of this Act, or a final decree under Part 2 or Part 4 of the Matrimonial Proceedings Act 1963, has been made and the parties have entered into an agreement for the payment of maintenance, the Family Court may at any time, on the application of either party or of the personal representative of the party liable for the payments under the agreement, cancel or vary the agreement or remit any arrears due under the agreement.
(3)In the exercise of its discretion under this section, the Court may take into account the circumstances of the parties and any change in those circumstances since the date of the agreement or settlement and any other matters which the Court considers relevant.
(4)The court may exercise the powers conferred by this section, notwithstanding that there are no children of the marriage or civil union.
(5)An order made under this section may from time to time be reviewed by the court on the application of either party to the marriage or civil union or of either party's personal representative.
(6)Notwithstanding subsections (1) to (5), the court shall not exercise its powers under this section so as to defeat or vary any agreement, entered into under Part 6 of the Property (Relationships) Act 1976, between the parties to the marriage or civil union unless it is of the opinion that the interests of any child of the marriage or civil union so require.
The legislation makes no express provision for survivorship of claims.
We make several points about subs (1) as a matter of construction:
(a)The Family Court’s jurisdiction does not arise on application made under s 182. Rather, it may inquire into matters encompassed by the section on or after dissolving a marriage or civil union (or the making of another relevant order). The legislation accordingly appears to envisage that the Court may act on its own initiative in the interests of the parties, or their children; presumably the occasion may arise when the Court is dealing with other matters.
(b)The subject matter is any agreement for the payment of maintenance or relating to property, and any nuptial settlement. If an agreement, it must be between the parties. If a nuptial settlement, it must be made on the parties.
(c)The Court’s jurisdiction is flexible; it may make any order it thinks fit for the benefit of the parties or their children.
Nothing about the statutory language or its evident purpose — that of doing justice in particular circumstances by modifying arrangements that were premised on an enduring relationship — suggests that only a party to the relationship may invoke the jurisdiction. Such a limitation is inconsistent with language allowing the Family Court to inquire. On its face, the language of inquiry confers a broad jurisdiction that may be invoked by anyone possessing what the Court finds to be an interest in such agreement or settlement that is sufficient to warrant such inquiry. The limit to those who may ask the Court to inquire is likely to be found in the purposes of such inquiry, that of changing arrangements made for the benefit of the parties or their children now that the premise of those arrangements has failed.
As counsel observed, the section appears to have its genesis in an English practice of settling property on a child upon his or her marriage.[4] We remark that, as Hinton J explained in the judgment under appeal, the jurisdiction is in a sense archaic.[5] In Thomson v Thomson, Jeune P approved a statement that the jurisdiction is intended to allow the court to divert money settled on a wife where she has been found guilty of adultery.[6] But what matters for present purposes is that history indicates the right to apply is not confined to a spouse suing in the capacity of a beneficiary or party.
[4]Thomson v Thomson [1896] P 263 (CA) at 267–268.
[5]HC judgment, above n 2, at [62].
[6]Thomson, above n 4, at 267–268.
The proposition that the jurisdiction is personal in nature is seemingly not now good law in England. Ormrod LJ, as he became, later qualified his opinion, saying in Purse v Purse that while death may abate proceedings in divorce, it all depends on the relief claimed.[7] And in Barder v Caluori, Lord Brandon said there is no general rule that a suit in divorce abates with the death of a party.[8] It depends, rather, as the nature of the claim and the jurisdiction involved.[9]
[7]Purse v Purse [1981] Fam 143 (CA) at 155.
[8]Barder v Caluori [1988] AC 20 (HL).
[9]At 37.
As Mr Illingworth QC submitted for the respondents, s 182 is concerned with money or property; and a case such as this it is property not owned by the parties but held on trust for them. A spouse’s claim under s 182 is not premised on a continuing relationship: quite the reverse. It bears no relationship to a claim for, say, loss of consortium or specific performance of a contract of service. We find that the jurisdiction is not personal in nature and did not abate on the death of Mrs Thakurdas. It follows that the appeal must fail.
We add that it is now settled law that s 182 serves an important purpose in relationship property litigation, allowing courts to address property settled under nuptial trusts. The Supreme Court has held that s 182 empowers a court to review a settlement and remedy the failure of the premise — an enduring relationship — on which it was founded, ensuring that one party does not benefit unfairly at the expense of another.[10] It would be inconsistent with that approach to invariably preclude any claim by the personal representatives of a deceased former spouse.
[10]Clayton v Clayton [Claymark Trust] [2016] NZSC 30, [2016] 1 NZLR 590 at [60].
Both counsel addressed the other parts of s 182, noting that subs (2) and (5) allow personal representatives to apply in certain circumstances. Mr Jefferson sought to read these provisions down, suggesting that they are confined to the case where an order under s 182(1) has been made before death. A court might interpret these provisions in that way, since they deal with the case where an antecedent order or agreement is being varied, but we agree with the Judge that there is no good reason to do so.[11]
[11]HC judgment, above n 2, at [42]–[44].
It does not follow that anyone may apply under s 182. Questions of standing may arise. It may be possible for the settlor or a child of the marriage to apply for example. We need not determine that here, since it is manifest that the respondents have a sufficient interest. This is now in substance a dispute between father and son. Mrs Thakurdas wanted to claim her share of relationship property and leave it to Faraaz, and her personal representatives are pursuing that objective by bringing this proceeding. An inquiry into whether his interest ought to crystallise or remain that of a discretionary and final beneficiary is comfortably within the scope of s 182.
Result
The appeal is dismissed.
The appellant must pay the respondents costs for a standard appeal on a band A basis and usual disbursements.
Solicitors:
Penny Patel Law, Auckland for Appellant
Niamh McMahon, Auckland for Respondents
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