MCMANAWAY v CAFFELL [2019] NZCA 351

MCMANAWAY v CAFFELL [2019] NZCA 351 [1 August 2019]NOTE: PURSUANT TO S 35A OF THE PROPERTY (RELATIONSHIPS) ACT1976, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B,11C AND 11D OF THE FAMILY COURT ACT 1980.IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA176/2019[2019] NZCA 351BETWEEN CAMPBELL DAVID MCMANAWAY ANDCAMPBELL DAVID MCMANAWAY ASTRUSTEE OF THE MCMANAWAYFAMILY TRUSTApplicantsAND VIVIEN JOY CAFFELLRespondentCourt: Gilbert and Courtney JJCounsel: S L Abdale for ApplicantsP J Egden for RespondentJudgment:(On the papers)1 August 2019 at 2.30 pmJUDGMENT OF THE COURTA The application for leave to appeal is declined.B The applicants must pay the respondent costs on the application as fora standard appeal on a band A basis and usual disbursements.____________________________________________________________________REASONS OF THE COURT(Given by Gilbert J)[1] The applicants apply for leave to bring a second appeal from a judgment ofthe Family Court in August 2017 determining Ms Caffell's claims under the Property(Relationships) Act 1976 (the Act) following her separation from Mr McManaway inMay 2012.1 The applicants' appeal to the High Court against this judgment wasdismissed on 19 December 2018.2 Ms Caffell's cross-appeal was allowed.[2] The applicants applied to the High Court for leave to bring a further appeal tothis Court. That application was declined by the High Court on 12 April 2019.3The applicants now apply to this Court for leave to appeal.Background[3] When the parties met, Mr McManaway had a substantial fishing business.The couple entered into an agreement under s 21 of the Act in January 2005 whichprovided that these assets would remain Mr McManaway's separate property. In earlyFebruary 2005, Mr McManaway transferred these assets to the McManaway FamilyTrust (the trust) for approximately $1.9 million funded by an acknowledgement ofdebt by the trust to Mr McManaway.[4] In September 2005, Mr McManaway incorporated a company calledCando Fishing Ltd (Cando) which leased the assets of the fishing business fromthe trust. Mr McManaway and Ms Caffell were the directors of this company, butMr McManaway owned all 100 of its shares.[5] In 2006, Mr McManaway transferred 99 of the shares to the trust for noconsideration. The Family Court found that this transfer was intended to defeatMs Caffell's claim to this property and was therefore caught by s 44 of the Act.The Family Court awarded Ms Caffell 20 per cent of the value of Cando assessed atthe date of hearing, which was five years after separation. The Family Courtsubsequently determined this amount to be $760,405.41 Caffell v McManaway [2017] NZFC 6348 [Family Court judgment].2 McManaway v Caffell [2018] NZHC 3403 [High Court judgment].3 McManaway v Caffell [2019] NZHC 813.4 Caffell v McManaway [2018] NZFC 1528 at [34].[6] The issues raised by Mr McManaway's appeal to the High Court were:5(a) Were the Cando shares relationship property at the time they weretransferred to the trust?(b) If so, should the shares have been valued at the hearing date rather thanat the date of separation?(c) Was the allowance of 80 per cent sufficient to recogniseMr McManaway's post-separation contributions to the value of Cando?(d) Was the valuation correct?[7] The issues raised by Ms Caffell's cross-appeal were:(a) Was the allowance of 20 per cent of the value of Cando sufficient?(b) Should an order have been made under s 44(2) of the Act giventhe shares were transferred in order to defeat her claim?[8] Dunningham J dismissed the appeal and allowed the cross-appeal. The Judgemade additional orders the object of which was to provide compensation to Ms Caffellcalculated as 50 per cent of the value of Cando shares as at 31 March 2012(approximating the date of separation) plus 20 per cent of the increase in value ofthe shares between that date and 31 March 2017 (approximating the date of hearing).6The trust was to pay 99 per cent of this sum and Mr McManaway the balance.The Judge did not have sufficient information to determine the valuation as at31 March 2012 and accordingly the issue of quantification was referred back tothe Family Court for determination.7Proposed appeal[9] The grounds of the proposed appeal to this Court are:5 High Court judgment, above n 2, at [5]–[7].6 At [105].7 At [99] and [107].(a) Were the shares in Cando Mr McManaway's separate property in termsof the s 21 agreement?(b) If not, should they have been valued at the separation date?(c) Was Mr McManaway adequately compensated for his post-separationcontributions to Cando by the 80 per cent division?Should leave be granted?[10] Disputes about relationship property following separation should bedetermined as expeditiously as possible consistent with justice.8 Parties need promptresolution and finality so they can get on with their lives. There is only one right ofappeal from a decision of the Family Court. Any further appeal is exceptional andrequires leave.9 Leave will only be granted if the proposed appeal raises a "questionof law or fact capable of bona fide and serious argument" involving an interest ofsufficient public or private importance to outweigh the cost and delay of a furtherappeal.10[11] For the reasons set out below, we are satisfied the grounds of the proposedappeal do not meet this high threshold.[12] It is not seriously arguable that the shares in Cando, which was notincorporated at the time of the s 21 agreement, were Mr McManaway's separateproperty in terms of that agreement. As the Courts below found, these shares wereplainly relationship property.[13] Section 2G of the Act provides that the value of any property to which anapplication under the Act relates is to be determined at the date of the hearing of thatapplication by the court of first instance. However, the Court has a discretion to valuethe property at another date. The Family Court and the High Court followed the usualapproach of assessing the value of the shares at the date of hearing and making8 Property (Relationships) Act 1976, s 1N(d).9 Senior Courts Act 2016, s 60(1).10 Waller v Hider [1998] 1 NZLR 412 (CA) at 413.an adjustment for post-separation contributions. It is not seriously arguable thatthe High Court was wrong to assess the value of the shares at the date of hearing andadjust for post-separation contributions by taking a percentage of the increase in valuebetween the date of separation and the date of the hearing.[14] The appropriate percentage to reflect post-separation contributions is simplya question of fact. It involves no question of sufficient private or public importancethat could outweigh the cost and delay of a further appeal.[15] The dispute between these parties about the division of their relationshipproperty has been ongoing since 2013. They are each entitled to finality. The interestsof justice would not be served by allowing a further appeal to this Court.The application for leave to bring a second appeal must accordingly be declined.Result[16] The application for leave to appeal is declined.[17] The applicants must pay the respondent costs on the application for a standardappeal on a band A basis and usual disbursements.Solicitors:Preston Russell Law, Invercargill for ApplicantsWhite Fox & Jones, Christchurch for Respondent