BLAKE v BLAKE [2022] NZCA 327

BLAKE v BLAKE [2022] NZCA 327 [21 July 2022]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA641/2021[2022] NZCA 327BETWEEN MAYSIE BLAKEAppellantAND BARTLEY BLAKEFirst RespondentAND HMR LIMITEDSecond RespondentCA645/2021BETWEEN BARTLEY BLAKEAppellantAND MAYSIE BLAKEFirst RespondentAND HMR LIMITEDSecond RespondentCourt: French and Gilbert JJCounsel: D A T Chambers QC for Appellant in CA641/2021 andFirst Respondent in CA645/2021J R Billington QC and K M Lellman for Respondents inCA641/2021 and Appellant in CA645/2021Judgment:(On the papers)21 July 2022 at 3.30 pmJUDGMENT OF THE COURTA The application by Mr Blake for special leave to appeal against thejudgment of the High Court in Blake v Blake [2021] NZHC 756 is declined.B The application by Mrs Blake for special leave to appeal against the samejudgment of the High Court is declined.C There is no order as to costs.____________________________________________________________________REASONS OF THE COURT(Given by French J)Table of ContentsPara No.Introduction [1]Background to the appeal against the interim judgment [12]Valuation of shareholding [13]Fixing of contributions to increase in value [32]Declining to vest company asset in Mrs Blake [37]Leave granted in the High Court [40]Application by Mr Blake for special leave to appeal additional issues [43]Valuation of HMR's shares in SCL [47]Application of s 44 [52]Determination of contributions to the increase in value — s 9A(2) [72]Mrs Blake's application for leave to appeal an additional issue [85]Outcome [106]Introduction[1] Mr and Mrs Blake1 have been embroiled in protracted litigation under theProperty (Relationships) Act 1976 (the Act) following the breakdown of theirmarriage.[2] They were married in July 1986 and have four children. They separated inJuly 2016. The value of the property at stake is very significant, in the millions ofdollars.1 Blake is not the parties' real surname. Fictitious names have been used as was done in theFamily and High Courts in order to protect sensitive personal and commercial information.[3] The proceedings began in the Family Court where judgments were issued byJudge Wills.2 Both Mr and Mrs Blake appealed to the High Court. The appeal washeard by Whata J. The Judge issued two judgments. The first judgment was called aninterim judgment3 and the second the "economic disparity" judgment.4[4] Both parties then applied to Whata J for leave to appeal certain aspects of eachjudgment to this Court. Leave was required because an appeal in this Court would bea second appeal.5[5] Whata J subsequently granted leave to appeal to this Court on a limited numberof issues.6[6] In relation to the interim judgment, the Judge granted Mr Blake leave to appealin respect of two issues.7 That appeal has been allocated the file number CA646/2021,the appellant being Mr Blake.[7] In relation to the economic disparity judgment, the Judge granted Mrs Blakeleave to appeal on four issues.8 That appeal has been allocated the file numberCA746/2021, the appellant being Mrs Blake.[8] What we are now being asked to decide is whether other issues in respect ofwhich Whata J declined leave to appeal should also be included on appeal to this Court.[9] Before turning to address those proposed additional issues, we notetwo preliminary matters.[10] First, the leave application filed by Mrs Blake originally included anapplication for leave to appeal the High Court's declinature of a claim she brought2 Blake v Blake [2020] NZFC 212 [First Family Court judgment]; and Blake v HMR Ltd[2020] NZFC 211 [Second Family Court judgment].3 Blake v Blake [2021] NZHC 756 [Interim judgment].4 Blake v Blake [2021] NZHC 2590, [2021] NZFLR 696 [Economic Disparity judgment].5 Senior Courts Act 2016, s 60.6 Blake v Blake [2021] NZHC 2583 [First leave judgment].7 At [24] and [27].8 Blake v Blake [2021] NZHC 3575 [Second leave judgment] at [14]–[16].under s 9A(1) of the Act. However, in written submissions she has confirmed she nolonger seeks leave to appeal that part of the High Court decision.[11] The second matter is that the leave application filed by Mr Blake states hewishes to appeal against both the interim judgment and the economic disparityjudgment. However, his proposed grounds of appeal relate only to theinterim judgment.Background to the appeal against the interim judgment[12] As noted by Whata J in his first leave judgment, the application for leaveengaged three key findings from his interim judgment.9Valuation of shareholding[13] The first concerned the approach the Judge had taken to the valuation ofshareholding in a company called SC Ltd. The shares in that company were originallyowned by Mr Blake in his personal capacity and acquired by him before his marriagewith Mrs Blake. In 2003 he sold all his shares to another company that he alsocontrolled, namely the respondent HMR Ltd.[14] HMR was incorporated in 1981. Its sole shareholder was Mr Blake. He wasalso its sole director and remained so until after separation.[15] At all relevant times, HMR was the asset-holding company for a highlysuccessful manufacturing and construction business established by Mr Blake beforethe marriage. SCL was the trading/operational entity through which he operated hisbusiness.[16] In 1986, shortly before their marriage, Mr and Mrs Blake entered into amatrimonial property agreement. The agreement recorded amongst other things thatthe shares in HMR10 and SCL would be the separate property of Mr Blake.9 First leave judgment, above n 6, at [1].10 At the time the matrimonial property agreement was signed, HMR had a different name.[17] Both the Family Court and the High Court found that the shares remained theseparate property of Mr Blake but that the increase in value of those shares during themarriage was relationship property to be divided between the parties in accordancewith their respective contributions to that increase. There is no challenge to thatconcurrent finding.[18] In the Family Court, Judge Wills held that as at 1986 the value of shares inHMR was $1,002,000 and the value of shares in SCL was $333,000.11 The Judgeadjusted those figures for inflation so as to express the 1986 value in present-day dollarterms, arriving at a figure of $6,835,197.12 Because Mr Blake had sold his shares inSCL to HMR in 2003, the valuation of shares in SCL was subsumed within thevaluation of shares in HMR.[19] In assessing the increase in the value of shares in HMR since 1986 for thepurposes of the proceeding, the parties through their expert witnesses agreed avaluation date of 31 March 2018. Although the valuers could not agree on the2018 value and hence the amount of the increase in value, there was no dispute therehad been a very substantial increase in the value of shares in HMR between 1986 and2018.[20] In the Family Court, the Judge fixed the value of shares in HMR as at 31 March2018 at $115,113,076.13 As for the amount of the increase in the company's sharevalue since the marriage, the Judge fixed that at $113,780,076.14[21] The valuation of HMR was one of the primary issues in dispute in theHigh Court as it had been in the Family Court, the most significant point ofdisagreement being the correct valuation of its shares in SCL.[22] A complicating factor in determining the value of those shares was thatthree months before the couple separated and before the valuation date, Mr Blake had11 The value for HMR was agreed by the parties' respective valuers but not the value of SCL:First Family Court judgment, above n 2, at [164], [171] and [327(a)]. The value for SCL fixed inthe Family Court was upheld by the High Court: Interim judgment, above n 3, at [104].12 First Family Court judgment, above n 2, at [223].13 At [327(b)].14 At [327(c)].entered into a shareholding agreement with their oldest child, John, to sell some ofHMR's shares in SCL to John's trust. Between 1 April 2016 and 31 March 2018,HMR sold 8.4 per cent of its shares in SCL to the trust for the sum of $833,270.That price was calculated by reference to a formula contained in the shareholdingagreement.15[23] Mrs Blake, who had consistently opposed any sale of the shares during themarriage, sought an order setting the sale aside under s 44 of the Act.[24] The general effect of s 44 is that the court will set aside a disposition ofproperty or order the payment of compensation if three prerequisites are satisfied:(a) the disposition was made in order to defeat the rights of an applicantunder the Act;(b) the absence of either valuable or adequate consideration; and(c) the absence of good faith on the part of the transferee.16[25] The section also provides that the Court must deny relief under s 44 if thetransferee received the property in good faith and so altered their position in relianceon the validity of the disposition that it would be inequitable to grant relief.17[26] In the High Court the Judge found that in selling the shares, Mr Blake'sintention was to defeat his wife's relationship property claim in respect of the value ofthose shares and that the consideration paid for them by John's trust was inadequate.18[27] However because the Judge also found that John had altered his position ingood faith and for valuable (albeit inadequate) consideration, he considered it wouldbe unjust to require John's trust to pay compensation to Mrs Blake under s 44.19Instead, the Judge considered the just solution would be to exercise the Court's powers15 In fact the price paid was short of the amount required by the formula.16 Property (Relationships) Act, s 44(1) and (2).17 Section 44(4).18 Interim judgment, above n 3, at [143], [145] and [177(c)(i)].19 At [145]–[146].under ss 18C and 25 of the Act and put Mrs Blake in the position she would have beenin had the shares not been sold and HMR at the date of separation still had a100 per cent shareholding instead of its actual holding of 91.6 per cent.20 In hisassessment, it would be inconceivable that the Court could not remedy a $9.7 milliondiminution in relationship property value caused by a property transaction entered intoin breach of s 44.21[28] We pause here to interpolate that the Family Court also endorsed a valuationbased on a 100 per cent shareholding but not because it considered the sale infringeds 44, but because of a provision in the shareholding agreement. The Family Courtconstrued the provision in question as a buy-back provision enabling HMR to acquirethe shares back from John's trust at the original purchase price. That meant that forthe purposes of a valuation based on a hypothetical sale by a willing but not anxiousseller who will act in a way that maximises their commercial advantage, it could beassumed that HMR would trigger the buy-back clause and so regain 100 per centshareholding.22[29] Whata J disagreed with the Family Court's construction of the shareholdingagreement, ruling that it did not empower HMR or Mr Blake to force John to sell theshares back.23[30] There has been no cross-appeal against Whata J's construction of the buy-backclause and therefore the correctness of the decision to adopt a deemed 100 per centshareholding must rest on the reasoning in the High Court and not the Family Court.[31] In determining the value of that shareholding, both the Family Court and theHigh Court did so by reference to expert evidence of fair market value based oncapitalisation of earnings. Whata J arrived at a valuation of $23,704,848.2420 At [147].21 First leave judgment, above n 6, at [13].22 First Family Court judgment, above n 2, at [71]–[82].23 Interim judgment, above n 3, at [79]–[84].24 Economic Disparity judgment, above n 4, at [61(a)]. By contrast, the Family Court fixed the valueof 100 per cent of the SCL shares at $26,482,500: First Family Court judgment, above n 2, at [139]and [326(a)(iii)].Fixing of contributions to increase in value[32] The second key finding in respect of which leave to appeal was sought relatedto Whata J's application of s 9A(2) of the Act. Section 9A lists the circumstances inwhich separate property becomes relationship property. Section 9A(2) provides:(2) If any increase in the value of separate property, or any income orgains derived from separate property, were attributable (wholly or inpart, and whether directly or indirectly) to actions of the other spouseor partner, then—(a) the increase in value or (as the case requires) the income orgains are relationship property; but(b) the share of each spouse or partner in that relationshipproperty is to be determined in accordance with thecontribution of each spouse or partner to the increase in valueor (as the case requires) the income or gains.[33] In the Family Court, Judge Wills noted that in cases of lengthy traditionalmarriages such as that of Mr and Mrs Blake, the starting point in fixing respectivecontributions to the increase in value of assets is one of equality.25 The Judge notedthat HMR had grown over a long period of time and that by assuming primaryresponsibility for the home and the children, Mrs Blake had enabled her husband todevote his time to the business and its development during the many years of themarriage.26 However, the Judge went on to find that presumption was displaced inthis case for two reasons.[34] The first was that it was Mr Blake who had introduced the companies into theproperty pool and the second was his pre-marriage acquisition of skills and attributeswhich were "uncommon" and required recognition.27 Taking those factors intoaccount, she assessed the relative contributions to the increase in value to HMR asbeing 60:40 in favour of Mr Blake.28[35] Whata J disagreed with a differential of that scale which he considered wasinconsistent with the Judge's other finding of equal contributions during the25 First Family Court judgment, above n 2, at [207] and [211]–[212], citing Scott v Williams [2017]NZSC 185, [2018] 1 NZLR 507 at [325] per Arnold J.26 At [220].27 At [219] and [221].28 At [225].marriage.29 He held that a proper division in the increase of the value of HMR was50:50 less $3.5 million to account for the contribution by Mr Blake as at the date ofthe marriage. He also directed the division was to occur after the $3.5 million hadbeen deducted from the value of the increase.30[36] As explained by Whata J, the purpose of the $3.5 million deduction was toaccount for the inflation component of the increase in value. The Judge consideredthat would fairly reflect the distinct contribution made by the separate property to theoverall increase in the value of HMR. The figure of $3.5 million was not the fullamount of the inflation component but, assuming a starting point of $5.5 million asadvocated by Mr Blake's valuer, it represented 60 per cent. The Judge did not allowa deduction of the full amount because he considered an adjustment was needed toacknowledge Mrs Blake's indirect contributions.31Declining to vest company asset in Mrs Blake[37] The third key finding in respect of which leave was sought related to arestaurant venue, owned by HMR.[38] Mrs Blake runs a hospitality business out of the venue and, relying on theSupreme Court decision in Clayton v Clayton [Vaughan Road Property Trust],she sought an order under s 33 of the Act vesting ownership of the property in her.32Both the Family Court and the High Court declined to make a vesting order.33[39] In the High Court, Whata J doubted there was jurisdiction under s 33 to makesuch an order and further held the case could not be brought within the Claytonprinciples.34 Mrs Blake's relief, in his view, lay in the division of the increase in valueof HMR, not its specific assets.35 He was satisfied that given she would receive an29 Interim judgment, above n 3, at [129]–[130] and [133].30 At [135].31 At [134].32 Clayton v Clayton [Vaughan Road Property Trust] [2016] NZSC 29, [2016] 1 NZLR 551.33 Second Family Court judgment, above n 2, at [46]; and Interim judgment, above n 3, at [165].34 At [164]–[165].35 At [165].equivalent monetary value for 50 per cent of the property, the refusal to make a vestingorder would not result in any substantive unfairness.36Leave granted in the High Court[40] The two issues in respect of which Whata J granted leave to appeal against theinterim judgment both relate to his ruling under s 9A(2).[41] The Judge formulated the two issues in the following terms:(a) Was the High Court wrong to have regard to the key person discount?(b) Did Mr Blake's pre-marriage contribution of skills and attributes justifya 20 per cent differential in the relationship property division?37[42] The "key person discount" referred to in the first issue is a reference to theJudge's finding that the valuation should take into account that the earnings of SCLwere significantly dependent on Mr Blake remaining involved in the business due tohis acumen and experience.38Application by Mr Blake for special leave to appeal additional issues[43] The application which is opposed raises numerous proposed grounds of appeal.They are grouped around three topics:(a) the proper approach to the valuation of HMR's shareholding in SCL;(b) the application of ss 44 and 18C, concerning the disposition of SCLshares by HMR to John's trust; and(c) the application of s 9A(2), concerning the increase attributable to theactions of Mrs Blake and the value of her contributions.36 First leave judgment, above n 6, at [25].37 At [24] and [27].38 Interim judgment, above n 3, at [99].[44] It was common ground that in order to obtain leave to extend the scope of anexisting second appeal, an applicant must persuade us that the proposed additionalappeal grounds raise questions of law or fact capable of bona fide and serious argumentinvolving some interest public or private of sufficient importance to outweigh the costand delay in extending the scope of the appeal.[45] The relevant principles were usefully summarised by Whata J in his first leavejudgment:39[7] As stated in Waller v Hider, the Court of Appeal is not engaged inthe general correction of error.40 Rather, its primary function is to clarify thelaw and to determine whether it has been properly construed and applied bythe Court below.41 Where findings are non-concurrent, and there is a real issueof law or principle at stake, the threshold may be met. However, the principleexpressed in s 1N(d) of the PRA must be carefully weighed: issues arisingunder the Act should be resolved as inexpensively, simply and speedily as isconsistent with justice. This calls for close examination of the utility of theproposed appeals.[46] Mindful of those principles, we turn to consider each proposed ground.Valuation of HMR's shares in SCL[47] Mr Blake contends that the only proper basis on which the shares could bevalued was by reference to the mandatory terms of the shareholding agreement whichcontained a formula for assessing fair market value. In his submission, it was an erroron the part of both the Family Court and the High Court to "pretend that the[shareholding agreement] did not exist" and he wishes to advance that point in theappeal.42[48] We address the separate issue of whether it was an error to assess value on thebasis of a 100 per cent shareholding rather than the actual shareholding later in thisjudgment.43 The present argument is the general applicability of the shareholding39 First leave judgment, above n 6.40 Waller v Hider [1998] 1 NZLR 412 (CA) at 412.41 At 412.42 Under this topic, Mr Blake also submits it was an error to assess the value on the basis of a100 per cent shareholding rather than the actual shareholding of 91.6 per cent. However thesubmissions address that issue in more detail under the s 44 topic. We agree that is the morelogical place for that issue to be discussed.43 See [68]–[71] below.agreement formula to the shares regardless of how many shares were owned by HMRat the date of valuation.[49] Although this proposed ground of appeal is entirely case-specific and not ofgeneral importance, we accept that the monetary implications for the parties are verysignificant. There is said to be a difference of approximately $11 million between thevalue calculated in accordance with the shareholding agreement and the value as foundby Whata J.[50] We accept that the fact the amounts at stake are substantial is relevant to leave.However, it does not of itself mean that leave should automatically be given.The proposed ground must still be seriously arguable and in our view it is not.[51] The approach taken by both Courts to determine fair market value for thepurposes of the Act by reference to the hypothetical "willing but not anxious" buyerand seller test was entirely in accordance with orthodox valuation principles andestablished case law.44 We consider it is not tenable to suggest the Judges should haveinstead based the valuation on a formula prepared for the purpose of supporting astaged sell-down of equity to a family member. There was ample evidence to supportthe concurrent findings in both Courts that the formula in the shareholding agreementdid not produce a fair market value and that the use of the formula would result in anunjust outcome. We consider that finding unassailable.Application of s 44[52] Although Whata J ultimately held that relief under s 44 was not available toMrs Blake, his finding that the sale of the shares was done in order to defeat her rightstogether with his finding that the consideration paid by John's trust was inadequateformed the basis of his decision to adopt a 100 per cent shareholding.[53] Mr Blake contends there were both factual and legal errors in the High Court'sanalysis of s 44 creating a disparity in the order of $18 million. In particular, he seeksto challenge the findings regarding intent and adequacy of consideration. He also44 Z v Z [1989] 3 NZLR 413 (CA).seeks to challenge Whata J's use of "a fictional shareholding" of 100 per cent on thegrounds that as a matter of law it was not available as a means to order relief undereither s 18 C or s 2545 of the Act.Intention to defeat Mrs Blake's rights[54] In the Family Court, Judge Wills specifically found the sale was part of asuccession plan to secure John's involvement in the business and that there was nointention on the part of either Mr Blake or John to defeat Mrs Blake's interests.46[55] The Judge went on to say that regardless of her factual finding regarding intent,various decisions of the Supreme Court and the High Court have held that if adisposition has the effect of defeating an applicant's rights and the person disposingof the property knows that, then they are to be regarded as intending to defeat thatinterest even if that was not their purpose.47 The authorities the Judge cited in supportof this proposition were the Supreme Court decisions of Regal Castings Ltd vLightbody48 and Horsfall v Potter49 as well as the decisions of the High Court inRyan v Unkovich50 and K v V.51[56] Mr Blake says ,contrary to what was wrongly assumed by the High Court,Judge Wills' comments were simply a citation of authorities and not a specific findingthe requisite intent existed in this case. We disagree. That is not a tenableinterpretation of the Family Court judgment.52 The paragraphs that follow thereference to the authorities make it clear the Judge considered s 44 was potentiallyavailable. Otherwise, there would have been no point to them.[57] In the High Court, Whata J held that the effect of the authorities cited byJudge Wills was that on the facts of this case Mr Blake must be taken to have intended45 The written submissions refer to s 44 but because Whata J did not order any relief under s 44, weassume that is an error and was intended to be s 25 which the Judge did rely on along with s 18C.46 First Family Court judgment, above n 2, at [240].47 At [241].48 Regal Castings Ltd v Lightbody [2008] NZSC 87, [2009] 2 NZLR 433 [Regal Castings (SC)judgment].49 Horsfall v Potter [2017] NZSC 196, [2018] 1 NZLR 638.50 Ryan v Unkovich [2010] 1 NZLR 434 (HC).51 K v V [2012] NZHC 1129.52 See First Family Court judgment, above n 2, at [241]–[258].to defeat, as in hinder, whatever relationship property claim his wife might have inrelation to the HMR shares and expose her to potential loss. He stated:53Absence of motive or purpose to cause loss to Mrs Blake and the [advisors']valuation are not determinative factors. Rather, the fact that Mr Blake carriedon with the share sale in the face of Mrs Blake's strong objections is directevidence of an intent to carry on with that sale regardless of the impact on herrelationship property rights in respect of those shares or any loss she mightincur as a consequence. In short, his intention was clear [—] to dispose of theshares whatever the impact on [HMR's] share value and therefore onMrs Blake's relationship property claim.[58] There were thus concurrent findings of the requisite intent, something whichis a factor against leave being granted.[59] However, Mr Blake wishes to advance a further argument that even if therewere concurrent findings, then both Judges and indeed a number of other judges beforethem have misunderstood and misapplied Regal Castings. He contends that, correctlyunderstood, Regal Castings is not authority for the proposition that knowledge of theconsequences of a disposition will on its own be sufficient to establish the requisiteintent. More is required. There was more, he says, on the facts in Regal Castings —for example the impugned transaction was executed in secret — and what the Courtsaid about knowledge must be seen in that context.[60] On the face of it, this proposed ground of appeal could potentially involve aquestion of law of general importance. However, we are not persuaded it is seriouslyarguable that the courts, including this Court in two recent decisions,54have misunderstood Regal Castings.[61] In Regal Castings, the Supreme Court was considering an appeal from amajority decision in this Court.55 The Supreme Court expressly endorsed thereasoning of the minority judgment that "[k]nowledge of a consequence is equatedwith an intention to bring it about" and confirmed that the majority had erred because53 Interim judgment, above n 3, at [143] (footnotes omitted).54 In Dyer v Gardiner [2020] NZCA 385, [2020] NZFLR 293 at [90], this Court stated that theintention requirements of s 44 may be satisfied where the person responsible for the disposition isaware that the effect of the disposition is to defeat a claim or the rights of another person regardingthe property. See also Sutton v Bell [2021] NZCA 645, [2021] NZFLR 610.55 See Regal Castings Ltd v Lightbody [2007] NZCA 396, [2008] 2 NZLR 153 [Regal Castings (CA)judgment].it had confused motive or purpose with intention.56 The Court said it was "essential"to distinguish between the two; it was not necessary to show the transferor wanted theother party to suffer a loss or that it was their purpose to cause it.57 While weacknowledge that Regal Castings was not about intention under s 44 of the PRA58we do not consider that to be a tenable reason to limit its application here. The generalprinciple must be the same.59[62] We conclude there is no reasonable prospect of a challenge to the High Court'sapplication of Regal Castings succeeding on appeal.Adequate consideration[63] For s 44 to be engaged in this case, the disposition has to be made other thanfor either "valuable consideration" under s 44(2)(a) or "adequate consideration" unders 44(2)(b).[64] In the Family Court, the Judge held the consideration paid under theshare agreement was both valuable and adequate.60 According to Mr Blake,she reached that conclusion after a "thorough" examination of the relevant law andfacts. He says in contrast Whata J's finding to the contrary was reached withoutoffering any legal or factual justification for overruling the Family Court on this point.[65] It is well established that the terms "adequate consideration" and "valuableconsideration" have different meanings. What may be valuable consideration must bemore than nominal consideration but can fall short of fair market value whereas"adequate" consideration must bear some reasonable relationship to the true value of56 Regal Castings (CA) judgment at [99(a)] per William Young P (dissenting); aff'd Regal Castings(SC) judgment, above n 48, at [46] and [54]–[55]; and Regal Castings (SC) judgment, above n 48,at [50] and [53].57 Regal Castings (SC) judgment, above n 48, at [53].58 It concerned the interpretation of the phrase "intent to defraud creditors" under s 60(1) of theProperty Law Act 1952.59 Since Regal Castings, the Supreme Court has had occasion to consider s 44 in the case ofHorsfall v Potter, above n 49. Mrs Blake places weight on that decision. However, this issue wasnot specifically addressed by the Supreme Court because on the facts knowledge of theconsequences and the motive/purpose of the transaction were aligned.60 First Family Court judgment, above n 2, at [257].the property although it may very well be less than that since the term used is adequate,not full.61[66] As mentioned, John's trust paid $833,270 for an 8.4 per cent shareholding.Whata J found the fair market value for 100 per cent of the shares was $23,704,848.628.4 per cent of that figure is $1,991,207 which means the price paid fell short of fullconsideration by $1,157,937. In percentage terms the price paid was only41.8 per cent of the fair market value.[67] In our view, in those circumstances it is not seriously arguable that there was areasonable relationship between the price and true value.Relief available under ss 18C and 25[68] Section 18C empowers the Court to order payment of a sum of money tocompensate a party where relationship property has been materially diminished invalue by deliberate action on the part of the other party. Mr Blake seeks to argue thats 18C did not apply because the HMR shares remained in the company in the form ofthe purchase price paid by John's trust.[69] That argument might be tenable were the disparity between the fair marketvalue and the purchase price not so significant. As it is, we consider the Judge wasamply justified in finding that the action of Mr Blake in selling the shares hadmaterially diminished the relationship property, being the increase in value of theHMR shares.63 The order made was plainly within the scope of s 18C and to contendotherwise is to advance a contention that is not seriously arguable.[70] As for s 25, that too confers a very broad remedial power. It provides that theCourt may make any order it considers just in determining the respective shares ofeach party in any part of relationship property.61 Welch v Official Assignee [1998] 2 NZLR 8 (CA) at 12.62 Economic Disparity judgment, above n 4, at [61(a)].63 Interim judgment, above n 3, at [145].[71] Had Whata J not made the order he did, we consider it beyond argument thatthere would have been an injustice to Mrs Blake as a result of a transfer for inadequateconsideration intended to defeat her rights. The order made was thus clearly withinthe scope of s 25.Determination of contributions to the increase in value — s 9A(2)[72] As we understand it, there is and was no dispute that the increase in value ofHMR during the marriage was due to the joint efforts of both Mr and Mrs Blake.What is in dispute is the weight to be attached to Mr Blake's pre-marriagecontributions to the increase in value.[73] It will be recalled that Whata J fixed contributions to the increase in value byfirst deducting $3.5 million from the amount of the increase in value on account of theinflation-adjusted value of Mr Blake's separate property at the date of marriage andthen dividing the remainder of the increase equally between the parties. This was adeparture from the Family Court decision. The Family Court had fixed the relativecontributions at 60:40 in favour of Mr Blake.[74] On appeal to this Court, Mr Blake contends Whata J was wrong to disturb theFamily Court's differential and seeks to have it reinstated.[75] As previously mentioned, the High Court has already granted leave to appealon the grounds of two alleged errors relating to its application of s 9A(2). The noticeof application for special leave to appeal also seeks to argue that the High Court erredin:(a) conflating Mrs Blake's contributions to the relationship withcontributions by her to the increase in value of the HMR shares;(b) failing to give due recognition to the principles of separate propertypursuant to s 9A when reducing the inflation-adjusted value ofMr Blake's separate property at the date of marriage from $5.5 millionto $3.5 million as an acknowledgment of Mrs Blake's alleged indirectcontribution;(c) finding a lengthy traditional marriage was to be counted as acontribution to the increase in value of the HMR shares; and(d) failing to take into account when fixing the contribution at 50 per centthe effect of taxation and other realisation costs which would beincurred in order to satisfy the monetary judgment against Mr Blake.[76] Before addressing these proposed additional grounds, it is important to bear inmind the issues in respect of which leave has already been given, namely whetherMr Blake's pre-marriage contribution of skills and attributes justify a 20 per centdifferential in the relationship property division and the relevance of the key persondiscount.[77] As we understand it, those two issues are intended to address a complaint thatthe Judge erred in his weighing of the respective contributions to the increase in valueof the HMR shares and in particular gave no or insufficient recognition to Mr Blake'sskills and attributes acquired before the marriage. The $3.5 million discount was onlyrecognition of the existence of separate property, that is to say recognition ofMr Blake's contribution to the increase in value by introducing the shares to theproperty pool in the first instance and took no account of his personal characteristicswhich the Family Court had described as "uncommon".64 As Whata J put it, the centralcomplaint is that all of Mr Blake's pre-marriage contribution should have beenafforded distinct credit over and above the inflation-related increase in the separateproperty value.65[78] The "key person risk" issue bears on the existence or sufficiency of anyrecognition for personal characteristics because Whata J considered his approach tokey person risk meant the increase in value had already been discounted toaccommodate Mr Blake's personal characteristics.66 Mr Blake will be arguing that thekey person risk is irrelevant to the s 9A(2) analysis, that it is not a recognition of64 First Family Court judgment, above n 2, at [219].65 First leave judgment, above n 6, at [22].66 Interim judgment, above n 3, at [129]–[130]. See also First leave judgment, above n 6, at [4].contributions made to the property and nor does it provide any economic benefit toMr Blake.[79] Turning then to the additional proposed questions.[80] As regards proposed question (a), we are unable to identify any part ofWhata J's analysis that entails conflation of contributions to the property withcontributions to the increase in value.[81] Proposed question (b) raises an issue about the sufficiency of the $3.5 millionallowance for the purpose of recognising Mr Blake's contribution of introducing theproperty to the pool. However, the bare assertion that the reduction from $5.5 millionto $3.5 million failed to take account of the principles of separate property under s 9Ais just that, a bare assertion which is not amplified in Mr Blake's written submissions.We therefore take the matter no further, other than to observe that it is an entirelycase-specific issue.[82] As for proposed question (c) — holding that a lengthy traditional marriage wasto be counted as a contribution to the increase in value of separate property — we findthe question somewhat puzzling. The presumption of equality in such cases is settledlaw and we are unaware of any reason to reconsider it.[83] Proposed question (d) seeks to challenge the 50:50 differential on the groundthat it failed to take into account the effect of taxation and other realisation costs whichwill be incurred when withdrawing funds from HMR in order to satisfy any monetaryjudgment against Mr Blake in favour of Mrs Blake. This question in the context ofs 9A(2) is new.67 That is to say it was not the subject of any leave application in theHigh Court. We note further that Mrs Blake claims it was not even raised at thesubstantive hearings in either the Family Court or the High Court and she questionshow the judges can be criticised for failing to respond to an argument that was neverput to them. It is entirely case-specific, does not involve a question of general67 Leave was sought and declined in the High Court in respect of a similar question in the context ofthe valuation of HMR: See First leave judgment, above n 6, at [12(c)], [14] and Appendix A.importance and in the absence of any detail does not appear to entail a sufficientlyimportant private interest.[84] For the reasons traversed above, we decline to grant leave in respect of any ofthe proposed questions advanced by Mr Blake. In our view, none of them meets therequisite threshold.Mrs Blake's application for leave to appeal an additional issue[85] It will be recalled that as also happened in the Family Court, the High Courtdeclined to make an order vesting ownership of one of HMR's assets — the restaurantvenue — in Mrs Blake. Whata J also declined to grant Mrs Blake's leave to appealthat aspect of his decision.68[86] HMR purchased the restaurant venue during the marriage in June 2015.The venue is important to Mrs Blake because she operates her business out of it.She has a connection to the venue and therefore disputes the view (taken by Whata Jin his first leave judgment) that payment of a monetary sum is sufficient and thatvesting is not necessary to do justice.69[87] Mrs Blake argues leave should be granted and relies on two alternativearguments:(a) It is seriously arguable that s 33(3)(e) and 33(3)(j) of the Act empowerthe Court to make orders vesting any property — not just relationshipproperty or property in which a spouse/partner has an interest — as partof the division of relationship property.(b) Alternatively, if contrary to the above it is necessary for onespouse/partner to have an interest in the property to give the Courtjurisdiction under s 33(3), then it is seriously arguable that such aninterest does exist in the present case under Clayton v Claytonprinciples.68 First leave judgment, above n 6, at [25].69 At [25].[88] It appears to have been the first argument that was the focus in theFamily Court whereas in the High Court it was the second argument.[89] Section 33 is headed "Ancillary powers of court". Subsection (1) states:The court may make all such other orders and give such directions as may benecessary or expedient to give effect, or better effect, to any order made underany of the provisions of sections 25 to 32.[90] The section then goes to provide a non-exhaustive list of the types of ordersthe Court may make.70 The list includes at s 33(3)(e) an order for the partition orvesting of any property and at s 33(3)(j) an order for the transfer of land or any interestin land.[91] In the Family Court, Judge Wills pointed out that s 33 does not confer anoriginating jurisdiction. Its purpose is to enable the implementation of substantiveorders already made under other provisions of the Act.71 In light of that purpose,the words "any property" that appear in the section should, the Judge considered,be construed as confined to property which is or could be dealt with in the making oforders under ss 25 to 32. That in turn meant there must be an interest held by one ofthe parties in the specific piece of property for which a vesting order is sought.72[92] In this case neither Mr nor Mrs Blake had any beneficial interest in therestaurant venue.73 It was not relationship property and it was not separate property.It was owned by HMR, a different legal personality from its shareholder and director,Mr Blake. A shareholder has no beneficial interest in the assets owned by a company.74[93] In challenging that reasoning, Mrs Blake acknowledges that s 33 is an ancillaryimplementation provision but submits that just as the High Court ordered Mr Blake topay her a sum of money ($51,929,647) to give effect to its orders declaring hersubstantive rights to the property pool, there is no reason why it could not have usedanother method of implementation. Mrs Blake argues that s 33(3)(e) does not require70 Property (Relationships) Act 1976, s 33(3).71 Second Family Court judgment, above n 2, at [40].72 At [43].73 See at [22]–[23], [30]–[33] and [36].74 At [23], citing Strait Views Ltd v Hannaway (2005) 6 NZCPR 725 (HC) at [23] and [28].that the property to be vested or partitioned must be either relationship property orseparate property.[94] As regards authority, Mrs Blake submits that the case law on the scope of s 33is limited and inconsistent,75 making the issue one of general importance warrantingguidance from this Court. Although not aware of any case in which the Court hasmade an order in respect of company property under s 33(3)(e) or 33(3)(j), she arguesthe courts have been open to the possibility of making orders in respect of third parties.Mrs Blake cites as examples the following decisions: Johanson v Johanson,76Hau v Hau,77 and Zhou v Yue.78[95] However, those decisions are all cases where the property in issue was eitherowned by one of the spouses jointly with the third party79 or where there was a claimof beneficial ownership by one of the spouses against the third party,80 or converselya third party was claiming beneficial ownership of a property legally owned by one orboth of the spouses.81[96] Thus in Zhou, the High Court held that the Family Court had jurisdiction tomake a vesting order sought by the third party because in its "inventory-taking"function the Court would decide whether under s 25(3) the property was relationshipproperty owned by one or both of the spouses and that determination would inevitablyalso decide that the third party either did or did not own an interest in the property ashe claimed. The third party was a party to the proceeding and jurisdiction existedunder s 33(e) or 33(3)(j) for the Family Court to give better effect to its determinationof the ownership of the property.8275 As an example of inconsistency, she cites the contrast between the decisions of the Family Courtand the High Court in Turner v del la Varis [2020] NZFC 10016; and Turner v del la Varis[2021] NZHC 776, [2021] NZFLR 418.76 Relying on the obiter comments made in the case: Johanson v Johanson (1993) 10 FRNZ 578(CA) at 581.77 Hau v Hau [2018] NZHC 881, [2018] NZFLR 464.78 Zhou v Yue [2019] NZHC 2167.79 Hau v Hau, above n 77.80 Hau v Hau, above n 78; and Johanson v Johanson, above n 76.81 Zhou v Yue, above n 78.82 At [54].[97] The crucial distinction between these cases and this one is that in all the othercases the beneficial ownership of the property and hence its status under the Act wasthe subject of an order under the Act to which the s 33 vesting power was thus trulyancillary. Here there is no contest about the legal and beneficial ownership of therestaurant venue: it is the property of HMR and always has been.[98] The interpretation of s 33 being advocated by Mrs Blake does such violence tothe ancillary nature of the section and to the property rights of third parties that we donot consider it is seriously arguable. In short, we can say with confidence that it is astep too far and has no prospect of succeeding on appeal.[99] Turning then to the alternative argument founded on the Supreme Courtdecision in Clayton.83 Clayton was a case about trust structures. The husband in thatcase owned a block of land. During the marriage, he executed a declaration of trustsettling the property on a trust of which he was the sole trustee and a discretionarybeneficiary. The other discretionary beneficiaries included his wife and their children.Under the trust deed, the husband had the power to appoint or remove discretionarybeneficiaries and trustees. It also gave him the power in his capacity as trustee to payor apply all of the capital to any of the discretionary beneficiaries, to bring forward thevesting date and to resettle the trust fund. The deed further empowered a trustee whowas also a beneficiary to exercise a power in his own favour, to exercise powerswithout considering the interests of all beneficiaries and in a way that might becontrary to the interests of all beneficiaries.[100] The Supreme Court held that although the trust was not a sham,the combination of powers and entitlement conferred on the husband amounted ineffect to a general power of appointment in relation to the assets of the trust and wererights which gave him an interest in the trust assets for the purposes of the Act.84The powers conferred on him were relationship property and because he could appointthe entire assets to himself at any time, the value of the power was equal to the valueof the net assets of the trust.8583 Clayton v Clayton, above n 32.84 At [68]–[70], [80] and [114]–[117].85 At [98(a)] and [104]–[107].[101] In the course of its reasoning, the Supreme Court held that the definition of"property" under the Act was broader than traditional concepts of property and that itmust be interpreted in a manner that reflects the fact it is social legislation and with asense of "worldly realism".86[102] The Clayton principles have never been applied to corporate structures butMrs Blake says whether they should be is an important issue for determination by thisCourt. She points out that New Zealand families increasingly have assets held incompanies. And that is likely to increase now that Clayton makes it more difficult forspouses/partners to structure their way out of the Act by using trusts.[103] In her submission, there is a strong argument that the Clayton principles shouldapply and that a distinction between trusts and companies is not sustainable. Just likethe husband in Clayton, Mr Blake has such extensive control over the assets of athird party that consistent with the policy of the Act and the extended definition ofproperty he should be regarded as having an interest in those assets.[104] We agree that the potential application of Clayton to companies is a questionof general importance. However, we are satisfied that the present case is not theappropriate vehicle. That is because even if the Clayton principles are as a matter oflaw capable of applying to companies, Mrs Blake's proposed appeal on this pointcannot succeed. That is because Mr Blake's directorship and shareholding in HMRpre-dates the commencement of his relationship with Mrs Blake. It follows, as notedby Whata J in his first leave judgment, that whatever Mr Blake's powers might be inrelation to HMR they are not relationship property.87 Classification of the relevantpowers in Clayton as relationship property was pivotal to the reasoning.[105] We therefore decline Mrs Blake's application for leave to appeal.Outcome[106] The application by Mr Blake for special leave to appeal against the judgmentof the High Court in Blake v Blake [2021] NZHC 756 is declined.86 At [38] and [79].87 First leave judgment, above n 6, at [5].[107] The application by Mrs Blake for special leave to appeal against the samejudgment of the High Court is declined.[108] Neither party having succeeded, there will be no order as to costs.Solicitors:LeeSalmonLong, Auckland for Appellant in CA641/2021 and First Respondent in CA645/2021Tompkins Wake, Tauranga for Respondents in CA641/2021 and Appellant in CA645/2021