G V L [2016] NZCA 571

G V L [2016] NZCA 571 [1 December 2016]NOTE: PURSUANT TO S 169 OF THE FAMILY PROCEEDINGS ACT 1980,ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B TO11D OF THE FAMILY COURTS ACT 1980.IN THE COURT OF APPEAL OF NEW ZEALANDCA213/2016[2016] NZCA 571BETWEEN GApplicantAND LRespondentHearing: 1 August 2016Court: Kós P, Cooper and Winkelmann JJCounsel: S R Jefferson QC and J I Hawker for ApplicantV A Crawshaw and L M Reed for RespondentJudgment: 1 December 2016 at 11.45 amJUDGMENT OF THE COURTA The application to adduce further evidence is granted.B The application to amend the application for leave to appeal is granted.C The application for leave to appeal is declined.D The applicant must pay the respondent costs for a standard application on a band A basis and usual disbursements.E This judgment may be cited as McQueen v Penn.____________________________________________________________________REASONS OF THE COURT(Given by Cooper J)[1] The applicant (the husband) seeks leave to appeal against a judgment of the High Court determining an appeal from the Family Court.1[2] The issues in dispute relate to spousal maintenance. Under s 174(5) of the Family Proceedings Act 1980 (the Act) a second appeal can only be brought with the leave of this Court. Apart from the substantive leave application, there are two procedural applications that need to be determined:(a) the husband seeks leave to adduce an affidavit in support of the application; and(b) he also seeks leave to amend the application for leave by adding a further ground of appeal that gives rise to two further questions of law.[3] All of the applications are opposed by the respondent (the wife).Background[4] The parties were formerly married and have two children. They separated on 25 May 2011 and the marriage was dissolved on 26 August 2013.[5] When they met in the United Kingdom in 2000, the husband was a senior surgical registrar in England and the wife, who was a New Zealander, was qualified as a registered nurse in this country. They moved to New Zealand to live where the husband obtained employment as a surgeon employed by a district health board from January 2010 to February 2011. He left that employment following an employment dispute, which was settled in December 2010. After a period of unemployment, he incorporated a company in September 2011, and thereafter provided specialist services as a surgeon operating through the company.[6] In the Family Court, Judge Riddell awarded the wife maintenance of $8,509 per month from the date of separation to the date of dissolution. She awarded post-dissolution maintenance at the same rate for a further two years. The1 McQueen v Penn [2016] NZHC 699; Penn v McQueen [2014] NZFC 9795.Family Court judgment was delivered on 20 February 2015. As a consequence, most of the maintenance was awarded as a lump sum, totalling $382,905. Monthly payments however were to be made beyond the date of the judgment on the 26th day of each month from March until August 2015.[7] The husband appealed against the orders made by the Family Court. In a judgment delivered on 15 April 2016 Woodhouse J reduced the total amount of maintenance payable under the Family Court judgment by $51,000 and cancelled an order that had been made for the payment of interest. Dissatisfied with that outcome, the husband now seeks leave to appeal to this Court.Approach[8] The principles relevant to an application for leave to bring a second appeal are uncontroversial. The approach was set out in Waller v Hider2 and repeated and summarised in Snee v Snee:3[22] To summarise, for leave to be granted pursuant to s 67, the appeal must raise some question of law or fact capable of bona fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the cost, both to the Court system and to the parties, and the delay involved in the further appeal. Upon a second appeal this Court is not engaged in the general correction of error. Its primary function is then to clarify the law and to determine whether it has been properly construed and applied by the Court below. It is not every alleged error of law that is of such importance, either generally or to the parties, as to justify further pursuit of litigation which has already been twice considered and ruled upon by a Court.[9] The reference in that passage to s 67 was a reference to s 67 of the Judicature Act 1908. However, this Court has taken the same approach to applications under s 174(5) of the Act.4[10] Having regard to the issues sought to be raised in the present application, it is worth noting the distinction drawn in Waller v Hider between appeals seeking to raise questions of law and those relating to issues of fact. In that case, after making the general points about this Court's role on a second appeal summarised in2 Waller v Hider [1998] 1 NZLR 412 (CA) at 413–414.3 Snee v Snee (1999) 13 PRNZ 609 (CA).4 H v P [2010] NZCA 584.Snee v Snee, Blanchard J referred to cases where what is sought to be pursued is a question of fact. He said:5When the disputed matter is entirely or largely a question of fact the task of the applicant under s 67 is harder. An issue of fact in a matter falling within the jurisdiction of an inferior Court will seldom be of public importance. It is better that we make no attempt to define the circumstances in which a factual contest can be taken to have private importance but obviously it may do so if the amount at stake is very substantial or the decision reflects seriously on the character or conduct of the would-be appellant or, as in Cuff, the judgment below has special consequences (for example, bankruptcy) for the losing party.[6] Even then, however, leave cannot be anticipated if the applicant is seeking to disturb concurrent findings of fact in the lower Courts.The present case has no special features. It is a complicated but not especially unusual dispute about property vested in the husband and/or the wife.Leave to adduce further evidence[11] The husband wishes to adduce evidence by affidavit in support of his claim that the grounds of appeal raise matters of private importance.[12] We have read the affidavit for the purposes of considering whether it should be admitted, and accept counsel for the husband, Mr Jefferson QC's, characterisation of it as seeking to adduce evidence of the importance of the issues to the husband in economic terms. He claims to be unable to make the payments ordered and points to difficulties he has experienced practising as a surgeon. These he attributes to an alleged cartel arrangement in a North Island city and also to arrangements in place for the care of the children of the marriage which mean that he only works two days a week. Much of the evidence is a restatement of evidence available at the time of the hearings in the courts below. Another part of it attempts to explain evidence given by his mother by telephone from the United Kingdom on whether loans she had given him needed to be repaid.[13] We allow the affidavit to be filed for the purposes of the leave application. But ultimately, it falls short of establishing the high standard of substantial economic5 Waller v Hider, above n 2, at 413 (footnote added).6 Cuff v Broadlands Finance Ltd [1987] 2 NZLR 343 (CA).impact that might be persuasive on the question of leave to bring a second appeal in accordance with the passage we have just quoted from Waller v Hider.Leave to amend the application[14] Although the respondent opposed the application for leave to amend the application for leave, we do not consider that any prejudice could arise from granting it. There is no suggestion that the additional issues sought to be raised would add significantly to the cost or length of the hearing and we grant the application accordingly.The application for leave[15] The application for leave to appeal as filed sought to advance nine specific grounds of appeal. They were that the High Court:(a) was wrong to find as a matter of law that there is no onus of proof on an applicant for spousal maintenance under pt 6 of the Act;(b) failed to undertake the mandatory separate assessment of the evidence in order to form its own opinion when considering the matter before it;(c) failed to apply the appropriate standard of living to the amount ordered for spousal maintenance because the standard adopted was historic and not proximate to the date of separation;(d) failed to apply the statutory obligation on the wife to become self-sufficient within a reasonable period of time;(e) wrongly took into account means that were not available to the husband when determining his ability to pay;(f) was wrong to dismiss as a relevant consideration the wife's delay in bringing her spousal maintenance application;(g) was wrong to find that the husband carried an onus of proof in regards to employment that might have been available to the wife after finding there was no onus of proof on her;(h) was wrong to find as a matter of law and fact that there was no basis upon which a calculation of past spousal maintenance should be treated differently to a claim for future spousal maintenance; and(i) wrongly relied upon findings made by the Family Court Judge that were in fact not made. In particular, the Family Court Judge did not find that:(i) the husband chose to work reduced hours or a reduced number of days per week; and(ii) there was no obligation on the husband to repay debts owed to his mother.[16] Counsel subsequently filed a draft amended application for leave to appeal, adding the further ground to which we have referred. That ground alleges that the High Court failed to apply the same standard to each party — as required by the Act— when determining: the likely earning capacity of each party; the responsibilities of each party for the ongoing daily care of any dependent children; or any inability of a party to obtain work that is reasonable in the circumstances.[17] In written submissions filed in support of the application for leave to appeal, Mr Jefferson attempted to distil the grounds of appeal into 10 separate "points of law". These were as follows:(a) When, and to what extent, does an applicant for spousal maintenance carry an onus of proof?(b) When, and to what extent, does a respondent to a spousal maintenanceapplication carry an onus of proof in regard to the applicant's claim?(c) On a general appeal, what constitutes an independent analysis of the facts, evidence and law, which the appellate court is required to undertake?(d) In circumstances where a couple's standard of living has changed inthe period immediately preceding separation, what is the applicable standard of living to be applied when determining whether maintenance should be paid and in what amount?(e) To what extent must an applicant satisfy the court that he or she has taken, or is taking, steps to fulfil his or her statutory obligation to become self-sufficient?(f) When do an applicant's choices sever the causal link between thedivision of functions in a marriage and an inability to meet reasonable needs?(g) Is the court entitled to disregard restrictions imposed by a third party provider of resources in assessing whether those resources constitute means available to the respondent for the purposes of s 65 of the Act?(h) To what extent is an applicant's delay in applying for maintenance incircumstances where he or she was advised as to his or her entitlements and elected not to apply a relevant consideration in a spousal maintenance proceeding?(i) Should one party be permitted to make choices which have the effect of limiting his or her potential earning capacity (and therefore their ability to become self-supporting), whilst at the same time the other party is required to make choices to enhance his or her earning capacity?(j) Should the Court differentiate between the parties when considering their ability to obtain work, or the effects of their ongoingresponsibilities for the minor and dependent children of the marriage in circumstances where those responsibilities are evenly shared?[18] As a general proposition, it would be surprising if a case involving spousal maintenance and a pre-eminently factual contest between the parties could give rise to so many points of law. Although Mr Jefferson has attempted to express the issues as questions of law, the questions have been drafted as general issues as if inviting a series of declaratory pronouncements without reference to the actual facts traversed in the courts below. It may be that this was an attempt to avoid the strictures inWaller v Hider about the inherent difficulty of characterising private factual disputes as giving rise to matters of public importance.7 Be that as it may, the Court would rarely consider it appropriate to answer questions couched in such general terms.[19] Faced with this multitude of grounds of appeal and claimed points of law, we asked Mr Jefferson at the hearing to concentrate on what he considered to be the strongest grounds. In response, he referred to the issues concerning the onus of proof, and the relevant standard of living, that is, the issues in [15(a)] and [15(c)] above, while not abandoning the other points raised.Onus of proof[20] The applicant contended in the High Court that the Family Court erred infinding that the wife "had discharged the onus of proof, both as to her need forspousal maintenance and the amount sought".8 Woodhouse J recorded the argument made by Mr Jefferson that an applicant for spousal maintenance must prove to the civil standard that she (or he) is entitled to maintenance in accordance with the relevant statutory criteria set out in the Act.[21] Section 63 of the Act deals with maintenance during a marriage. Section 63(1) provides that each party to a marriage or civil union is liable to maintain the other party to the extent that such maintenance is necessary to meet theother party's "reasonable needs", where the other party "cannot practicably meet the7 Waller v Hider, above n 2.8 McQueen v Penn, above n 1, at [20].whole or any part of those needs" because of any one or more of the circumstances specified in subs (2). Section 63(2) then sets out what those circumstances are.[22] Section 64 of the Act contains similar provision in respect of maintenance after a marriage or civil union has been dissolved. For present purposes, nothing turns on the differences between the provisions and we do not need to set out s 64.[23] Section 69 then empowers the Family Court to make a maintenance order in favour of either spouse of a marriage, and s 70 contains a similar power in respect of maintenance after dissolution of a marriage. Relevantly, the Court's power in each case is to order payment of such sums "as the court thinks fit".9[24] Notwithstanding the breadth of that language, it is clear that the power of the Court to award maintenance is limited by the terms of ss 63 and 64. The liability tomaintain is only "to the extent that such maintenance is necessary to meet the reasonable needs of the other party" and, in addition, s 65 prescribes matters that the Court must have regard to in determining the amount payable. Certain kinds of conduct and misconduct may also be taken into account, in accordance with s 66(1).[25] Mr Jefferson submitted that the effect of the High Court judgment is that an applicant for spousal maintenance could seek an order from the Court requiring her former husband to maintain her at a level that she says is appropriate, without being required to produce evidence to support her claim. He asserted that is what was decided here. He argued that the approach taken by the High Court is contrary to the wording of the statute, and to cases that have been decided in the Family Court. He also maintained that, whether intentionally or not, the Court had effectively required the husband to prove that there was no suitable employment available to the wife at relevant times.[26] In dealing with these issues, the High Court referred to observations made by Tipping J in Wederell v Wederell:109 Family Proceedings Act 1980, ss 69(1)(a)–(c) and 70(2)(a).10 McQueen v Penn, above n 1, at [21]; Wederell v Wederell [1994] NZFLR 928 (HC) at 931.During the marriage each spouse has a liability to maintain the other to the extent necessary to meet the reasonable needs of the other. However, that liability only arises where the applicant spouse cannot practicably meet his or her reasonable needs because of one or more of the qualifying circumstances listed in s 63 as paras (a) to (e). Three questions arise. First, it is necessary to identify the applicant's reasonable needs and the amount of money required to satisfy them. Second, it is necessary to identify the extent to which the applicant cannot meet those needs. Third, it is necessary to see whether that inability arises because of a qualifying circumstance; unless that can be shown the applicant cannot obtain maintenance from the other spouse.[27] The Judge then recorded a submission made by Mr Jefferson in the High Court that the matters referred to by Tipping J amounted to "hurdles that anapplicant for spousal maintenance must overcome before maintenance can be ordered (either past or future)".11 The Judge rejected that submission noting that the language of the legislation did not refer to an entitlement able to be claimed by a spouse, but rather to the liability of one spouse to maintain the other.12 Applying observations of Courtney J in Clayton v Clayton (Maintenance payments),13 and of Lord Sumption in Prest v Petrodel Resources Ltd,14 he held that there was no onus on the wife in the Family Court.15 He said:16The evidence she put before the Court, and elicited in cross-examination, directed to the relevant matters specified in ss 63–64A, was to be assessed by the Judge in the manner noted by the United Kingdom Supreme Court inPrest. And there was no onus on the wife under s 65 to establish on the balance of probabilities that the husband had the means to meet her reasonable needs.[28] We have no doubt that Woodhouse J's approach was correct. The question of whether or not orders should be made is to be resolved by the court on the evidence that is called. It is clear that the court must be satisfied that maintenance is necessary to meet the reasonable needs of the party claiming it, and that she or he cannot practically meet those needs having regard to the relevant circumstances specified in11 At [22].12 At [25].13 Clayton v Clayton (Maintenance payments) [2015] NZHC 765, (2015) 30 FRNZ 219 at [83]‒[86].14 Prest v Petrodel Resources Ltd [2013] UKSC 34, [2013] 2 AC 415 at [45].15 At [25]–[26].16 At [26].the Act. Such matters will require the Court to be satisfied to a civil standard of proof.17[29] Normally, the applicant will be the source of the evidence that the court needs before it can be satisfied of the relevant matters, but the statutory language is not such as to create an onus on an applicant. It is of course the case that both parties will carry an evidential onus in respect of matters they wish to establish: clearly a court would not be able to make an order if the evidence before it were not such that it could reasonably be satisfied that the order was justified. But that is a different proposition from that which Mr Jefferson seeks to advance, namely that the wife had a persuasive onus of proof.[30] In M v B this Court dealt with a similar argument in the context of claims concerning relationship property.18 Noting that that Relationships (Property) Act 1976 dealt with property rights and entitlements, and referring to statutory language that the Court need only be "satisfied about a state of events", Robertson J observed that notions of onus of proof fit "uncomfortably" within that legislativeregime.19[31] The same is true in the present context. We are satisfied that the issue sought to be raised is not capable of bona fide and serious argument. The question here, as in other cases, is whether there was sufficient evidence for the Court to be satisfied of the relevant matters arising under the statutory provisions. That question can be addressed without any need to focus on issues concerning onus of proof.[32] A second appeal on this ground cannot be justified.The appropriate standard of living[33] Mr Jefferson noted that the husband's case in the Family Court and theHigh Court had been advanced on the basis that the parties' standard of living haddiminished substantially following their migration to New Zealand 17 months before17 Family Proceedings Act, s 167.18 M v B [2006] 3 NZLR 660 (CA).19 At [39].they separated. It had diminished further when the husband's fixed-term post ended in February 2011 and would continue to do so. These were indisputable and undisputed facts. However, Mr Jefferson complained that both Courts below had applied an historic and exceptionally high standard of living when fixing the quantum of the maintenance award. Mr Jefferson said that there had not previously been any analysis in decisions of this Court in relation to the issue of which standard of living should be applied when fixing the quantum of any maintenance where the standard of living had changed prior, but proximate, to separation. He claimed that there would be a public interest in having that matter addressed and in the circumstances of this case the private importance of the issue to the husband justified a second appeal.[34] In dealing with this issue, Woodhouse J noted that the Family Court Judge had referred to evidence of a high standard of living in the earlier years of the relationship, and much of that evidence related to the period before the children had been born. He said:20If this evidence stood in marked contrast to the general standard of living after the children were born, and after they moved to New Zealand, the more historical evidence would not be of much relevance, and if it provided the foundation for the assessment of reasonable needs following separation there may have been an error. But there was no error. Some types of expenditure ceased, such as extended holidays overseas, but the accepted level of expenditure in the year immediately before separation indicated a high standard of living, and many of the items on which this money was spent indicated the same. Line by line comparison between items on which money was spent before separation, and items on which the wife sought to spend money after separation is not justified, let alone microscopic examination of the detail.[35] The Judge recorded his view that other arguments raised by the husband were not relevant. In this category he put the level of his income before, or after, separation: the relevant task of the Family Court was to assess the standard of living enjoyed during the relationship. It was not relevant to that issue that, after thehusband's employment circumstances changed, his income had declined and he hadresorted to borrowings to maintain the standard of living.2120 McQueen v Penn, above n 1, at [82].21 At [83].[36] We can see no arguable error in the approach taken either by the Family Court or the High Court on this issue. The standard of living of the parties while they are living together or lived together are matters specifically referred to at ss 63(2)(c) and 64(2)(c) of the Act and is essentially a question of fact. The Family Court Judge referred to evidence which satisfied her that the couple enjoyed a very high standard of living during the relationship; evidence that was derivedfrom "meticulous" records maintained by the husband of all expenditure.22 The evidence also satisfied the Judge that in the year up to when the parties separated their acknowledged expenditure was $228,700.23 While it appears their standard of living was higher prior to the move to New Zealand, as Woodhouse J noted, the expenditure of $228,700 in the year up to separation showed the standard remained high in New Zealand.24[37] We see no relevant legal issue in this, nor any factual issue of sufficient importance to warrant a second appeal.Other issues[38] As has been seen, the written submissions received in support of the application for leave ranged more widely than the two matters discussed so far. Of the remaining matters raised, the most prominent is an assertion that the High Court Judge did not properly examine the factual basis for the conclusions reached in the Family Court. Mr Jefferson complained that Woodhouse J did not undertake any separate analysis of the evidence and that he simply adopted the findings made bythe Family Court Judge "in their entirety". As a consequence, the husband did not receive the second consideration of the evidence to which he was entitled on appealhaving regard to the Supreme Court's decision in Austin, Nichols & Co Inc v Stichting Lodestar.25[39] We do not consider that Mr Jefferson has fairly characterised the High Court judgment. The Judge was aware of his obligations in accordance with the judgment in Austin, Nichols & Co Inc to which he referred and from which he quoted one of22 Penn v McQueen, above n 1, at [53].23 At [68].24 McQueen v Penn, above n 1, at [82].25 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141.the most important paragraphs.26 Further, the submission that the High Court Judge simply adopted all of the findings made by the Family Court Judge is incorrect. Togive one example, in relation to the assessment of the husband's means, the Judgecommenced his analysis with this observation: "In my judgment some of the Judge'sfindings of fact on this important issue were wrong, although I do not disagree withthe ultimate conclusion."27[40] While in most cases the Judge did agree with factual conclusions reached by the Family Court Judge, it is clear from the terms of the judgment that he turned his mind to whether those findings were justified, and expressed his agreement on a reasoned basis. Austin, Nichols & Co Inc does not require anything more. In this case, we are in no doubt that the High Court Judge reached his own conclusions on the issues raised, even where that involved an assessment of fact and degree andentailed a "value judgment".28 In the end, he also reached a different view on the amount of the maintenance orders that should be made. As has been seen, he reduced the amount payable by $51,000. We are satisfied on this aspect of the case that there is no basis for allowing a further appeal.[41] None of the other matters raised as suggested grounds for a second appeal satisfy the high threshold necessary for leave.Result[42] The application to adduce further evidence is granted.[43] The application to amend the application for leave to appeal is granted.[44] The application for leave to appeal is declined.[45] The applicant must pay the respondent costs for a standard application on a band A basis and usual disbursements.26 McQueen v Penn, above n 1, at [10], quoting Austin, Nichols & Co Inc, above n 25, at [5] per Elias CJ.27 McQueen v Penn, above n 1, at [47].28 Austin, Nichols & Co Inc, above n 25, at [16].[46] This judgment may be cited as McQueen v Penn.Solicitors:Wynyard Wood, Auckland for ApplicantBeattie Rickman Legal, Hamilton for Respondent