Tracey v Tracey - [2024] NZHC 3960

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

I TE KŌTI MATUA O AOTEAROA WHANGĀREI-TERENGA-PARĀOA ROHE

CIV-2023-488-90

[2024] NZHC 3960

IN THE MATTER of an appeal of a decision made pursuant to section 21J of the Property (Relationships) Act 1976

BETWEEN

DAVID REGINALD TRACEY

Appellant

AND

CAROL RAE TRACEY

Respondent

Hearing: 7 March 2024

Appearances:

S Henderson and T Edwards for the Appellant A Kennedy for the Respondent

Judgment:

20 December 2024

JUDGMENT OF ROBINSON J

This judgment was delivered by me on 20 December 2024 at 10:00 am pursuant to Rule 11.5 of the High Court Rules

…………………………………………………………………… Registrar/Deputy Registrar

Solicitors:
Henderson Reeves, Whangārei Just Law, Kerikeri

TRACEY v TRACEY [2024] NZHC 3960 [20 December 2024]

Introduction

[1] On 2 September 2006, after 14 years together and 12 years of marriage, David Tracey and Carol Tracey entered into a relationship property agreement (the Agreement) pursuant to s 21 of the Property (Relationships) Act 1976 (the PRA). At that time, their marriage was still a happy one. Unfortunately it broke down almost 15 years later in July 2021.

[2] In a reserved judgment dated 23 August 2023, Judge Howard-Sager in the Family Court at Kaitaia determined that the Agreement should be set aside.1 Although the Judge was satisfied that the requirements of s 21F of the PRA had been complied with, she was also satisfied for the purposes of s 21J that giving effect to the Agreement would cause serious injustice.

[3]Mr Tracey appeals.

Background

[4] Much of the factual background is not in dispute. It is set out at paragraphs [8]–[33] of Judge Howard-Sager’s judgment.

[5] Mr and Mrs Tracey met in December 1992. They were both separated from former partners and had been through relationship property settlements. Mrs Tracey has two children from her previous relationship. Mr Tracey has three. They have no children together.

[6] Around Easter 1993, Mrs Tracey moved to Mr Tracey’s family farm in Tracey Road, Kaitaia. The farm has been in Mr Tracey’s family since the late 1800s. They resided in a home (the Cottage) which Mr Tracey’s father built just after the War in 1948. Mrs Tracey describes the Cottage as being in poor condition and says that living in it contributed to her poor health. Mr Tracey disputes that the Cottage was in such poor condition, but accepts that very little had been done to it since it was built. In any event, Mrs Tracey says that Mr Tracey promised her that he would renovate the

1 Tracey v Tracey [2023] NZFC 9125 [Judgment].

Cottage. Mr Tracey acknowledges that he assured Mrs Tracey he would do so when financial circumstances permitted.

[7] Mr and Mrs Tracey married in March 1994. In that year, Mrs Tracey started a new business exporting flowers to Japan. Mr Tracey enabled his farm to be used as security for Mrs Tracey’s small business loan of $60,000. She set up sheds and a hot house in which to grow the flowers. Mr Tracey assisted by building…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Tracey v Tracey

Details

AGLC: Tracey v Tracey [2024] NZHC 3960
Case: [2024] NZHC 3960
Decision Date: 20 December 2024

CaseChat Overview and Summary

In Tracey v Tracey, the High Court considered an appeal against a Family Court decision to set aside a contracting-out agreement between the parties, David and Carol Tracey. The agreement, signed in 2006, delineated the division of property between the parties in the event of separation, heavily favouring David. The Family Court had set aside the agreement, finding that upholding it would cause serious injustice to Carol. David appealed this decision.

The court examined the factors outlined in s 21J of the Property (Relationships) Act 1976 to determine whether the agreement would cause serious injustice. The court agreed with the Family Court's assessment that the agreement was unfair and unreasonable when made and had become more so over time. The disproportionate division of assets, the erosion of Carol's rights, and the lack of recognition of her contributions to the relationship and the family home were key considerations. The court emphasised that while parties are generally free to contract out of statutory provisions, there must be no unfairness or unreasonableness at the time the agreement is made and subsequent changes should not render the agreement unjust. In this case, the 95:5 split of assets in David's favour was deemed to constitute a serious injustice to Carol, particularly given the length of their relationship and the substantial increase in the value of their assets over time. The appeal was dismissed, and Carol was awarded costs.

Orders