GOLDSTONE v GOLDSTONE AS ADMINISTRATOR OF THE ESTATE OF REECE CLIVE GOLDSTONE [2021] NZCA 664

GOLDSTONE v GOLDSTONE AS ADMINISTRATOR OF THE ESTATE OF REECE CLIVE GOLDSTONE[2021] NZCA 664 [8 December 2021]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA383/2019[2021] NZCA 664BETWEEN ANDREA JEANETTE MARYGOLDSTONEAppellantAND SHARON MARIE GOLDSTONE ASADMINISTRATOR OF THE ESTATE OFREECE CLIVE GOLDSTONEFirst RespondentAND THE MINISTER OF FINANCE ONBEHALF OF THE CROWNSecond RespondentHearing: 3 November 2021Court: Courtney, Duffy and Dunningham JJCounsel: V A Crawshaw QC, S M Wilson and T Bartlett for AppellantM S King for First RespondentNo appearance for Second RespondentJudgment: 8 December 2021 at 10.30 amJUDGMENT OF THE COURTA The appeal is allowed.B The vesting order made in the High Court is set aside.C An order is made vesting the property in Sharon Goldstone as administratorof the estate of Reece Goldstone and in Andrea Goldstone as tenants incommon in equal shares.D The High Court's costs order is set aside.E We decline to make an order for costs in this Court under s 45(2) of the LegalServices Act 2011.____________________________________________________________________REASONS OF THE COURT(Given by Courtney J)Introduction[1] Under s 119(3) of the Insolvency Act 2006 the High Court may order thatproperty formerly belonging to a bankrupt but disclaimed by the Official Assignee bevested in the bankrupt if satisfied that it is fair to do so. This appeal concernscompeting claims for vesting under s 119(3).[2] The subject property is a lifestyle block in Tauranga. Reece and AndreaGoldstone purchased the property in 2003.1 Their plan was to live in the existingcottage with their three young sons while Reece, a builder, constructed a new housefor the family. In November 2014 Reece and Andrea were both adjudicated bankrupt.Their debt exceeded their equity in the property and the Official Assignee disclaimedthe property under s 117(1) of the Insolvency Act.[3] Notwithstanding their bankruptcy, Reece and Andrea continued to make themortgage payments until April 2015, when they separated and Andrea moved awaywith the children. Reece, who also moved off the property, continued to make themortgage payments himself.[4] Reece and Andrea's marriage was dissolved in October 2017. In December2017 Reece and Andrea were both discharged from bankruptcy. Andrea subsequentlyapplied for an order under s 119(3) that the property be vested in her and Reece equally.She also filed proceedings in the Family Court seeking a division of the property underthe Property (Relationships) Act 1976 (PRA). Reece applied for an order that theproperty be vested in him alone.1 To avoid confusion we refer to the parties by their first names.[5] Toogood J made an order that the property be vested in Reece alone.2 Andreaappealed. Shortly after Andrea filed her appeal, Reece died intestate. His mother,Sharon Goldstone, is the administrator of the estate. Given the changedcircumstances, Andrea now seeks to have the property vested in her alone.3The Family Court proceedings are still on foot, awaiting the outcome of this appeal.[6] For the reasons we come to shortly, we consider that the appeal is a generalappeal. The issues to be determined are therefore:(a) Was the Judge's approach to the fairness test under s 119(3) of theInsolvency Act 2006 correct?(b) Did the Judge err in holding that the Family Court would have nojurisdiction in respect of the property in proceedings brought under thePRA?(c) What is a fair outcome under s 119(3) in light of Reece's death and theevidence sought to be adduced on the appeal?Approach on appeal[7] Mr King, for Sharon, contended that the decision made in the High Court wasthe exercise of a discretion, relying on the statement by Moore J in Robinson v IAGNew Zealand Ltd that the Court acting under s 119 "enjoys a broad and largelyunfettered discretion".4 Ms Crawshaw QC, for Andrea, argued that the Judge wasundertaking an evaluative judgment and the appeal was a general appeal.[8] Identifying whether a decision involves the exercise of a discretion or anevaluative judgment has long been recognised as difficult. If the former, the appellantmust show that the Judge took account of an irrelevant consideration, failed to takeaccount of a relevant consideration, made an error of law or principle or was plainly2 Goldstone v Goldstone [2019] NZHC 1649.3 Andrea did not seek leave to file an amended application. In submissions, Sharon's counsel notedthis point but did not oppose the appeal proceeding on this basis.4 Robinson v IAG New Zealand Ltd [2016] NZHC 3149 at [50].wrong.5 If the latter, provided the appellant can persuade the appellate court that thefirst instance court was wrong, they are entitled to a fresh assessment by the appellatecourt.6[9] The basis on which the nature of the decision can be correctly identified hasbeen considered in a variety of contexts and broad principles are evident. InOphthalmological Society of New Zealand Inc v Commerce Commission McGrath Jsaid:7A key indication of a discretion is whether the area for personal appreciationby the first instance Court or decision maker is large. In the context of theorders and decisions of Masters, whether the interests involved in a particularmatter are purely procedural or concern wider issues of principle in relation tothe application of the law to the facts, will also be relevant to whether adecision is discretionary in nature. In the latter type of case it may morereadily be seen that ultimately only one view is legally possible, even if thereis scope for considerable argument as to what it is. If that is the case thedecision maker does not have the margin of appreciation inherent indiscretion.(Citation omitted.)[10] Having considered that statement and cases in other contexts,8 this Court (inthe context of a bail appeal) made the following observations:9[49] These decisions show that the classes of case which appeal courtsclassify as an exercise of a discretion are dwindling. Three possible indicia ofthe presence of discretion emerge. First, the extent to which thedecision-maker can apply his or her own "personal appreciation" has beenidentified as a "key indication". Clearly, the greater the level of prescriptionin terms of what is required of the decision-making process the more likelythe decision is an evaluative process, rather than the exercise of a discretion.Second, procedural decisions are more likely to be an exercise of discretionthan wider issues of principle involving the application of law to the facts.Third, if only one view is legally possible, that points away from a discretion.In other words, where there is scope for choice between multiple legally"right" outcomes, that points towards a discretion.(Footnotes omitted.)5 May v May (1982) 1 NZFLR 165 (CA) at 169–170; affirmed in Kacem v Bashir [2010] NZSC112, [2011] 2 NZLR 1 at [32].6 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [16].7 Ophthalmological Society of New Zealand Inc v Commerce Commission [2003] 2 NZLR 145 (CA)at [37].8 R v Gwaze [2010] NZSC 52, [2010] 3 NZLR 734; R v Hughes [2008] NZCA 546, [2009] 3 NZLR222; and Fagan v Serious Fraud Office [2013] NZCA 367.9 Taipeti v R [2018] NZCA 56, [2018] 3 NZLR 308.[11] We consider that the discretion under s 119(3) can only be exercised oncethe Court has undertaken an evaluative assessment of the case and reached the pointof being satisfied that to do so would be fair. The "fairness" test constitutes a thresholdto be met before the discretion could be exercised. In this sense similar issues arise aswere considered in R v Hughes (discharge without conviction) and R v Rajamani(proceeding with only 10 jurors).10[12] We do not accept that, in the context of the Insolvency Act, determination ofwhat is fair could turn on the Judge's discretion. It is unlikely that Parliament intendedto allow the vesting of property to be made on a discretionary basis, particularly wherethere are competing claims to the property. The concept of fairness allows forobjective assessment of competing interests. As in the comparable assessment of theinterests of justice, the evaluation is one to be made having regard to the all the relevantfacts. The particular features may differ in each case, but consideration of the relevantfeatures will lead a Judge to the point of being satisfied, or not, that vesting is fair.Whether that evaluation is correct is capable of objective assessment by reference tothe factors that are relevant in the particular context.[13] We consider that in determining that it was fair to vest the property in Reecealone, the Judge was making an evaluative judgment and the appeal against thatjudgment is a general appeal. We therefore proceed on the basis that the appeal is tobe conducted on the basis of Austin, Nichols: it is for Andrea to satisfy this Court thatthe Judge erred and, if she does so, she is entitled to a fresh assessment by this Court.Application to adduce further evidence[14] Andrea and Sharon have both applied for leave to adduce further evidence onthe appeal. The evidence relates substantially to issues arising from Reece's death anddevelopments in Andrea's life. It includes uncontested valuation evidence for theproperty. Sharon also puts forward evidence intended to impugn Andrea's credibility.The parties both consent to the evidence being adduced. Neither deponent wasrequired for cross-examination.10 R v Hughes, above n 8, at [10]–[11]; and R v Rajamani [2007] NZSC 68, [2008] 1 NZLR 723 at[3]–[5].[15] Given we have determined that the appeal is a general appeal, the unusualcircumstances of the case and the fact that the parties consent to the evidence beingadduced, we grant leave.The history of the property and of the family[16] Before we record the relevant history, we note that Reece and Andrea made avariety of allegations against one another which cannot be determined in the presentcontext and, in any event, do not assist in determining what a fair result would be inthis case. We confine ourselves to the relatively uncontested facts, save for some ofthe allegations dealt with in the new evidence adduced for the purposes of the appeal.[17] Reece and Andrea started a de facto relationship in 2000 and were married inlate 2002. They had two sons, Sabastian (born in 2007) and Zakhery (born in 2009).They also had permanent day-to-day care of a third child, Lorenzo (born in 2011).The evidence is clear that both Reece and Andrea regarded Lorenzo as their own child.[18] In 2003 Reece and Andrea purchased the subject property and lived in theexisting cottage until Reece could build a new house for the family. BetweenNovember 2006 and November 2007 Reece took time off work for this purpose.During that period Andrea was the sole income earner. She stopped work in June 2007to care for Sabastian but returned to work a few months later out of financial necessity.[19] The couple borrowed from Credit Union North to buy the property.A mortgage was registered over it in November 2003. Eventually the couple ran intofinancial difficulties, particularly in relation to unpaid tax. When they wereadjudicated bankrupt the valuation obtained by the Official Assignee showed the valueof the property at between $350,000 and $400,000 as against the amount owing toCredit Union North of $442,707.17.[20] After the Official Assignee disclaimed the property in December 2014, thefamily remained living there and continued to meet mortgage payments and otheroutgoings. On 5 April 2015 they separated and Andrea left the property with thechildren. She rented accommodation for herself and the children and, for periods whenshe was unable to afford that, stayed with friends. She was primarily responsible forthe children's day-to-day care. She worked in a variety of jobs.[21] Although Reece stayed at the property for a time following separation it seemsclear that for most of the post-separation period he was not living there but nor was hepaying for accommodation elsewhere. For at least part of the time he was living withhis parents. Reece continued to meet the outgoings on the property including thepayments under the mortgage. He also made some child support payments andcontributed to school fees.11[22] In early 2018 Andrea applied to the Family Court for an occupation order. Wenote that her affidavit in support of the application made no mention of her and Reece'sbankruptcy or the Official Assignee's disclaimer of the property. In October 2018 shemade her application under s 119(2) and also filed the proceedings in the Family Courtseeking an order under the PRA dividing the property in the event of it being vestedin her and Reece.[23] Since the High Court decision was issued in July 2019, Andrea has obtainedtwo valuations for the property. As at 18 January 2019, the property was valued at$710,000 "as is" and $920,000 as if complete. As at 17 December 2020 the propertywas valued at $740,000 "as is". Since Reece's death in October 2019, his parents havecontinued to meet the mortgage payments and outgoings on the property. There was$381,210.53 owing on the mortgage as at June 2021.Vesting under s 119(3)[24] Section 119 provides:119 Position of person who suffers loss as result of disclaimer(1) A person suffering loss or damage as a result of disclaimer by theAssignee may—(a) claim as a creditor in the bankruptcy for the amount of the lossor damage, taking account of the effect of an order made bythe court under paragraph (b):11 Lorenzo's care costs were met by the Ministry of Social Development.(b) apply to the court for an order that the disclaimed property bedelivered to, or vested in, that person.(2) The bankrupt may also apply for an order that the disclaimed propertybe delivered to, or vested in, the bankrupt.(3) The court may make an order under subsection (1)(b) or (2) if it issatisfied that it is fair that the property should be delivered to, orvested in, the applicant.[25] The Insolvency Act gives no guidance as to what factors ought to be consideredin determining whether vesting is fair under s 119(3). In Robinson v IAG New ZealandLtd Moore J considered that the assessment should be made "in an holistic manner andin light of all the surrounding circumstances the Court considers relevant".12 In thiscase, the Judge considered that:13 all of the surrounding circumstances should be taken into account so far asthey bear on what the Court may consider just, but the Court's decision mustreflect the context in which the application is made.[26] We agree that the assessment of fairness must take in all the circumstances ofboth the applicant(s) and the property. These are likely to vary greatly. It is only bytaking a broad view of what is relevant that a proper evaluation of what is fair can bereached.[27] As the Judge discussed, the wording of s 119(3) is directed towards vesting ina single applicant.14 However, joint applications or competing applications in whichthe fair outcome would be joint vesting must have been contemplated. In at least oneprevious case, Fish Man Ltd (in liq) v Hadfield, joint vesting was regarded as anavailable option.15 The Judge held s 119(3) permitted an order vesting property jointlyin two or more parties if that was the appropriate outcome.16 We agree that this is thecorrect approach.12 Robinson v IAG New Zealand Ltd, above n 4, at [50].13 Goldstone v Goldstone, above n 2, at [18].14 At [43].15 Fish Man Ltd (in liq) v Hadfield [2017] NZCA 589, [2018] 2 NZLR 428 at [91].16 Goldstone v Goldstone, above n 2, at [45]–[47].The High Court decisionThe parties' positions[28] In the High Court Andrea argued that if the property were vested in her andReece under s 119(3) it would become relationship property for the purposes ofthe PRA and the Family Court would have jurisdiction to make a division of theproperty and other ancillary orders, taking into account any circumstances that mightmake equal sharing of the property repugnant to justice,17 the respective contributionsto the marriage,18 post-separation contributions,19 the interests of the children of themarriage,20 any occupation rights,21 and the value of the property.22[29] Reece agreed that if the property were vested jointly it would be becomerelationship property but maintained that outcome would be unfair. Instead, he arguedthat vesting in him alone would be fair because Andrea could still seek to have theproperty treated as relationship property under s 9(4)(a) of the PRA. He accepted thatunder s 9(4) the various issues raised by Andrea in the relationship propertyproceedings were amenable to determination taking into account property vested ineither or both of the parties under s 119(3).[30] Section 9(4)(a) of the PRA provides that:(4) The following property is separate property, unless the court considersthat it is just in the circumstances to treat the property or any part ofthe property as relationship property:(a) all property acquired by either spouse or partner while theyare not living together as a married couple or as civil unionpartners or as de facto partners:[31] In Thompson v Thompson this Court explained the purpose and function ofs 9(4):2317 Property (Relationships) Act 1976, s 13.18 Section 18.19 Section 18B.20 Section 26.21 Section 27.22 Section 2G.23 Thompson v Thompson [2014] NZCA 117, [2014] 2 NZLR 741.[71] The starting point for the ascertainment of property resulting from amarriage partnership is the date of separation. Property acquired after thatdate is usually considered the separate property of the acquiring spouse.[72] Circumstances may however warrant an exception to this generalprinciple. The Act recognises the need to make provision for the period,whether months or years, which normally elapses between separation and finaldetermination of property rights. Section 9(4) is one statutory means of doingso. The legislative policy behind this provision (and the other provisionswhich complement it) is to ensure each party gets their rightful share in thenet assets of the relationship, together with the benefit or burden of anypost-separation changes in the form of, or value inherent in, the assetsthemselves. Additionally, and conversely, the legislative policy is to ensurethat post-separation assets, liabilities and changes in value that have been dueto the post-separation conduct of, or changes in, fortunes of one party alone,are not shared. [73] The key factor in deciding whether to attribute to one or both parties,the benefit or burden of changes in assets and liabilities after separation is thepresence or absence of a causal link with the relationship, and the assets andliabilities that link has produced. This is consistent with the objectives listedin the long title: to recognise the equal contribution of the husband, wife orpartners to the relationship; to provide for a just division of property when therelationship ends; and to give the parties a clean break from the relationship.[75] Accordingly assets acquired after separation will usually be separateproperty, unless their acquisition was directly or indirectly due to past orpresent relationship property. Careful recognition must be given to thepost-separation contributions of the parties when this inquiry is undertaken.The discretion involved in that assessment has been consistently emphasisedto be broad.(Footnotes omitted.)The Judge's decision[32] The Judge reviewed the recent cases in which s 119 applications had beendetermined, noting that none involved competing claims by bankrupts who wereformerly joint owners of the subject property.24 The Judge concluded from his surveyof cases that the relevant circumstances to be considered in determining an applicationunder s 119(1) are those that relate to the disclaimed property. He identified, on anon-exhaustive basis, the following relevant factors:25(a) the applicant's former interest in the property, if any;24 Goldstone v Goldstone, above n 2, at [22].25 At [41].(b) how and when the interest was acquired;(c) if the applicant had no interest in the disclaimed property, what otherrelationship previously existed between the applicant and the property;(d) whether the applicant has maintained or increased the value of theproperty to be vested or prevented its transfer to a third party;(e) the circumstances in which the disclaimed property became vested inthe Official Assignee through bankruptcy;(f) the rights and interests of third parties, if any, and, in particular, whetherthey consent to the vesting; and(g) the consequences of any vesting for the applicant and any other persons.[33] The Judge held that the vesting of the property in the Official Assignee resultedin the extinguishment of Andrea's and Reece's rights in it with the consequence thatthe property ceased to be relationship property in November 2014 when they wereadjudicated bankrupt.26 Vesting of the property now could not revive that status.There is no challenge to that conclusion.[34] The Judge went on to conclude that a vesting order would result in the party inwhom the property is vested acquiring the property afresh, and without any rights theymay have had under the PRA arising from their marriage.27 He did not accept thatvesting the property in Reece alone would render it separate property for the purposesof s 9(4)(a) of the PRA. Nor did he accept that if the property were vested in Reecealone Andrea to able to pursue a claim in the Family Court that the property should betreated as relationship property.28 The Judge considered that:[62] an order vesting the property in Reece, or in Reece and Andreajointly, would result in the same outcome for the purposes of the PRA as if,for example, Credit Union North had obtained a vesting order on an26 At [57].27 At [62].28 At [64].application under s 119(1)(b) and on-sold the property to one or both of themafter the date of separation.[63] It also follows that, if the Mountain Road property is vested in Andreaand Reece jointly by an order under s 119 of the Insolvency Act, the FamilyCourt will not have jurisdiction to make any orders, either in connection withthat property or otherwise between the parties that might appropriatelyrecognise and compensate Reece for the payments related to the MountainRoad property he has made since the separation.[65] I conclude, therefore, that the Mountain Road property is not now, andcannot become, either relationship property or separate property that wouldcome within the jurisdiction of the Family Court under the PRA, whether onthe basis of the current PRA proceedings in that court, or on the basis of anyfresh application to it made by either Andrea or Reece.[35] As we discuss later, the parties agree that the Judge's conclusion that theFamily Court would have no jurisdiction in relation to the property following a vestingorder was incorrect.[36] The Judge then identified the relevant factual basis for the assessment requiredunder s 119(3):29(a) The property was acquired jointly by both Andrea and Reececontributing to the deposit and assuming the mortgage liability.(b) The family lived at the property for almost 12 years prior to Andrea'sand Reece's separation in April 2015.(c) Until separation Andrea and Reece had shared responsibility formeeting household expenses, including mortgage payments, rates andinsurance on the property jointly.(d) After the date of separation Reece paid the rates, insurance premiums,mortgage payments and some maintenance. Andrea's ability to makefinancial contributions was limited, in part at least, because she was theprimary caregiver for the children and needed to provide29 At [67].accommodation for herself and them. Reece met expenses such asschool fees.(e) As at the date of the adjudication Andrea's and Reece's joint liability toCredit Union North exceeded the estimated value of the property bybetween $40,000 and $90,000.(f) At the date of separation the balance owing under the mortgage hadbeen reduced by $3,374.17 and the value of the property was around$425,000. This meant that payments made between the date ofadjudication and date of separation had little or no effect on the valueof their equity.(g) Since separation Reece paid approximately $123,000 under themortgage, though it was not clear how much was paid as interest andhow much as principal.(h) Reece's payments since the date of separation had the effect ofpreventing a mortgagee sale, thereby preserving the availability of theproperty for a vesting application under s 119.[37] The Judge viewed (a), (b) and (c) — the contributions of both Reece andAndrea to the purchase of the property, the fact that it was the family home which theyoccupied for almost 12 years and that it was relationship property, and the joint sharingof household expenses — as factors favouring the parties equally and therefore neutralin his assessment.30[38] The Judge then identified factors that he regarded as irrelevant.31 These weremostly allegations of wrongdoing by the parties against one another which either couldnot have been relevant or were not amenable to resolution. They included Reece'sargument that Andrea had caused their bankruptcy through mismanaging theirfinancial affairs, the circumstances in which a temporary protection order was made30 At [68].31 At [69]–[71].against Reece in April 2015 and disagreements between the parties over the way thechildren were brought up. There is no challenge to this aspect of the Judge's reasoning.[39] Having dismissed the argument that issues over the fair disposition of theproperty were best resolved by the Family Court and having held that the prior statusof the property as the family home (and therefore relationship property) and theparties' respective contributions to the property were neutral because they favouredboth parties, the Judge considered the only relevant considerations to be the mortgagepayments and payments of rates, insurance premiums and some maintenance costssince the adjudication.32[40] Up to April 2015, Andrea and Reece had made those payments jointly. FromApril 2015 to the date of hearing, March 2019, Reece had made those contributionswithout any contribution from Andrea. Although they totalled approximately$130,000 they had little impact on the differential between the value of the propertyand the amount of indebtedness to Credit Union North. The market value of theproperty had, however, increased significantly due to inflation or a general increase inproperty values. The Judge concluded that:33[75] The payments made by Reece, therefore, have not increased whatwould have been the owners' equity in the Mountain Road property had it notbeen vested in the Assignee and then the Crown. The payments, however,have had the highly material effect of avoiding a mortgagee sale. As a result,during the period in which the market value of the property has increased byover 50% of the value at the time of adjudication, the property has remainedas bona vacantia vested in the Crown and, therefore, susceptible to a vestingorder under s 119. I note in passing that, for PRA purposes, the property hadno value or, if anything, a negative value, at the date of separation.[76] Those considerations weigh heavily in favour of the fairest outcomebeing a vesting of the property in Reece solely.[41] The Judge acknowledged that Andrea's ability to contribute financially to themortgage was limited by her having principal responsibility for the care of thechildren, but was not satisfied that her financial position weighed sufficiently againstReece's actual financial contribution to make joint vesting the fairest outcome.3432 At [73].33 At [75].34 At [77].[42] Finally, the Judge considered that because the Family Court would have nojurisdiction to make orders that would resolve the practical issues arising from jointownership of a family home, vesting the property in Reece and Andrea jointly wouldbe "not only impractical but wholly unworkable".35 The Judge identified the problemsas who would have the right to occupy the property, who would be responsible forcarrying out and funding maintenance, how decisions about completing theconstruction of the house on the property would be made, who would meet thecontinuing outgoings on the property and when and on what terms the property wouldbe sold.36 He concluded:[80] In the absence of the ability of the Family Court to determine theseissues under the PRA an elaborate ownership structure and decision-makingframework would need to be included in the terms of the vesting order. Itwould overreach the reasonable scope of the Court's implied power to make avesting order subject to terms and conditions to make the complex orders thatwould be necessary to produce a fair and workable outcome for the vesting ofthe Mountain Road property in Andrea and Reece jointly.[81] And it is not clear either how the value of Reece's financialcontribution of $130,000 since the date of separation should be compensatedin circumstances where the payment of those funds has led fortuitously to anincrease in the property's value of more than $200,000. Would fairness dictatethat Reece should be credited with the full value of the increase? It is difficultto see why not but, in that case, the net value of the property in which the jointowners would share would be nil because the liability to Credit Union Northwould more or less equate to the owners' shared equity.[82] For these reasons I am satisfied that the fairest way in which the Courtmay exercise its discretion under s 119(3) in respect of the cross-applicationsis to vest the Mountain Road property in Reece solely.AppealA fresh assessment?[43] Both parties agree that the Judge erred in his view that the Family Court wouldhave no jurisdiction in relation to the property. If the property were vested in Reece itwould be property acquired after the parties ceased to live with one another and35 At [78].36 At [79].therefore separate property for the purposes of the PRA. But its status as formerrelationship property to which both parties had contributed means that it would beopen to the Family Court under s 9(4)(a) to treat it as still being relationship propertyin order to resolve the issues relating to the parties' respective contributions to themarriage and the property, including post-separation contributions raised in the FamilyCourt proceedings.[44] Andrea asserts that, in wrongly proceeding on the basis that the Family Courtlacked jurisdiction under s 9(4) to consider the property, the Judge failed to take intoaccount all the relevant factors weighing in favour of each party's application andconsidering those factors in light of the surrounding circumstances, the context inwhich the applications were made and the consequences of any vesting for theapplicant and other persons.[45] There is some dispute over exactly what factors the Judge took into account indetermining what would be fair in terms of vesting. Ms Crawshaw contended that, bytreating the factors relating to the parties' joint acquisition and use of the property andjoint mortgage payments up to separation as neutral, the Judge had effectively treatedReece's post separation mortgage payments as the only relevant consideration.[46] Although the Judge said that "the only relevant considerations" were thepost-separation mortgage payments and payments of rates, insurance and somemaintenance costs,37 we are satisfied that, read in its entirety, the Judge did not proceedon the basis that those were literally the only relevant considerations. Rather, heviewed the history of joint acquisition, use and mortgage payments as favouring bothparties equally and Reece's post-separation payments as the only additional factor thatcould be taken into account. It might be more accurate to say that the Judge treatedthat factor as the most influential.[47] Nevertheless, we accept that the Judge's error regarding the effect of s 9(4)(a)warrants a fresh assessment under s 119(3) because his view that the Family Courtlacked jurisdiction to deal with the property was clearly a significant factor in hisreasoning that joint vesting would not properly recognise Reece's post-separation37 At [73].contributions or allow for the practical difficulties of occupation, maintenance and saleof the property.38 Moreover, Reece's death has significantly altered the landscapeagainst which the s 119(3) assessment would be made. The Judge's conclusion canonly be revisited in a meaningful way by taking into account the changedcircumstances.What is fair in terms of vesting now?[48] The history of Reece's and Andrea's acquisition of the property, their jointassumption of the mortgage liability and their occupation of the property as a familyhome for a decade is the starting point for determining what is fair. It is relevant, too,that they continued to occupy the property and pay the mortgage for some months afterthe disclaimer.[49] The second significant consideration is Reece's post-separation payment of themortgage. In the High Court Reece rightly maintained that, if not for his efforts, theproperty would not have been available to be vested in either him or Andrea. In thisCourt, Sharon points out that she and her husband, Kevin, have been continuing tomake the payments since Reece's death. While these payments have not resulted inany (or any significant) increase in equity — the substantial increase in the value ofthe property resulting from the general increase in property prices over recent years— they have enabled the property to be retained long enough to allow it to be revested.In addition, prior to the applications for vesting, Kevin committed his own time andmoney towards improving the cottage on the property for Reece and the boys to use.[50] As against these factors, Andrea argues that Reece was able to make themortgage payments because he did not have any accommodation costs himself,whereas she was responsible for housing the children and for their day-to-day care.She also points out that, while Reece accessed the property to work on, she herselfwas excluded from it.[51] Thirdly, the interests of the children now assume a different significance. Inthe High Court both parties were motivated to secure the property in order to provide38 At [80]–[81].a home for their children. Nevertheless, their respective claims to the property werepersonal to them. Now, as a result of Reece's intestacy, it is Sabastian and Zakherywho hold the interest that Reece previously enjoyed. Under the Administration Act1969 they will inherit Reece's estate to the exclusion of Lorenzo, who is not Reece'sbiological child and was not adopted by Reece.39 Strictly, the contest is betweenSabastian and Zakhery on the one hand and Andrea on the other.[52] As we noted earlier, however, Reece regarded Lorenzo as his own child.Sharon's appointment as the administrator of Reece's estate was contested by Andreabut ultimately made by consent on the basis that the question whether Lorenzo couldbenefit from the estate would be reserved. Sharon has said that she would consent tothe estate being used for the benefit of all three children; if the appeal is dismissed sheintends to sell the property and use the proceeds for the benefit of the two olderchildren and, if ordered by a court, Lorenzo as well. Whether Lorenzo can beaccommodated will depend on the outcome of the Family Court proceedings, underwhich provision could be sought for Lorenzo as a child of the marriage.40[53] Before us counsel advised that Andrea seeks to have the property vested in heralone on the basis that she is solely responsible for the care and support of the children.If the property is vested solely in her she proposes to sell it, reimburse Sharon and herhusband for the outgoings they have met and use the proceeds for the benefit of allthree children. This proposal engages questions raised in the new evidence which weconsider ought to be taken into account.[54] Andrea has remarried and if the property is vested solely in her and theproceeds used to provide a family home for the children it will likely becomerelationship property. Andrea's current husband would acquire an interest in it, whichwould be to the detriment of the children, especially to Sabastian and Zakhery.Moreover, Andrea has other, older, children so that, on her death, the property may beshared with those children, to the detriment of Sabastian, Zakhery and Lorenzo.39 Administration Act 1969, s 77.40 Property (Relationships) Act, ss 2 and 26.[55] Finally, although Andrea says that she wishes to use the property for the benefitof the children, she stops short of expressing an intention to place the property on trustfor them. This has some significance because in Sharon's affidavit filed for thepurposes of the appeal, she seeks to impugn Andrea's honesty. She refers to Andrea'sprevious convictions for dishonesty and to Andrea's most recent marriage certificateon which it is stated that she had never been married or in a civil union. Andrearesponds to the former that the convictions date back more than 20 years and arosefrom the circumstances of her first marriage when she was left alone with four youngchildren. However, she makes no comment in relation to her marriage certificate.[56] In summary, the property was a family home for Reece, Andrea and thechildren for some 12 years. Both contributed to it and both assumed the liabilities thatwent with it. Reece, through commendable foresight, met the ongoing mortgagerepayments and other costs of the property and thereby ensured that the asset is nowavailable for his children. Andrea, on the other hand, had the burden of housing andcaring for the children and must now continue do so without financial support fromReece. However, regardless of the result on this appeal, the final outcome will bedetermined in the Family Court proceedings, in which Reece's and his parents'contributions can be recognised, as can Andrea's role as the primary (and now only)caregiver for the children and the wish of both Andrea and Sharon that all threechildren benefit from Reece's estate.[57] Taking all these factors into account we consider that vesting the propertyjointly in Andrea and Sharon as tenants in common in equal shares is the fair result forthe purposes of s 119(3).Result[58] The appeal is allowed.[59] The vesting order made in the High Court is set aside.[60] An order is made vesting the property in Sharon Goldstone as administrator ofthe estate of Reece Goldstone and in Andrea Goldstone as tenants in common in equalshares.Costs[61] Both parties were granted legal aid in the High Court. Toogood J held thatthere were no exceptional circumstances to justify an order of costs against Andreaunder s 45(2) of the Legal Services Act 2011.41 He did, however, make an orderspecifying the amount of costs Andrea would have been liable to pay if s 45 did notapply. In light of Andrea's success on appeal, we make an order setting aside the HighCourt's order.[62] The parties were also in receipt of legal aid on appeal. We are satisfied thatthere are no exceptional circumstances justifying an award of costs against Reece'sestate and so we decline to make a costs order under s 45(2).Solicitors:Terangi Bartlett, Tauranga for Appellant41 Goldstone v Goldstone [2019] NZHC 1865.