SUTTON v BELL [2021] NZCA 645

SUTTON v BELL [2021] NZCA 645 [2 December 2021]NOTE: PURSUANT TO S 35A OF THE PROPERTY (RELATIONSHIPS) ACT1976, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11BTO 11D OF THE FAMILY COURTS ACT 1980.IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA484/2020[2021] NZCA 645BETWEEN TODD WILLIAM FRANK SUTTONFirst AppellantTODD WILLIAM FRANK SUTTON andHOFFMAN TRUSTEES LIMITED astrustees of the TODD SUTTON TRUSTSecond AppellantAND JOANNA ELISIA BELLRespondentHearing: 27 May 2021Court: French, Clifford and Courtney JJCounsel: L J Kearns QC for First and Second AppellantB N Snedden for RespondentJudgment: 2 December 2021 at 11 amJUDGMENT OF THE COURTA The appeal is dismissed.B The first appellant must pay the respondent costs for a standard appeal ona band A basis with usual disbursements.____________________________________________________________________REASONS OF THE COURT(Given by Clifford J)TABLE OF CONTENTSIntroduction [1]Background [4]The challenged High Court decision [15]This appeal [22]The scheme of the Act [25]The contracting out regime [28]Restraining and setting aside dispositions [34]The jurisdiction issue: can a s 44 claim be made for property disposed ofbefore the relationship commences?Overview [38]Case law [42]First principles [53]Conclusion on the jurisdiction issue [60]"In contemplation" [62]Were Mr Sutton and Ms Bell "in contemplation" of a de facto relationshipwhen Mr Sutton made the disposition? [75]The evidential issue: was the High Court correct to find Mr Sutton hadtransferred Pt Chevalier to the Trust in order to defeat rights the Act wouldhave otherwise given Ms Bell? [83]Other issues [100]Valuable consideration [101]The remedial discretion [103]Result [108]Introduction[1] Todd Sutton and Joanna Bell met in July 2003. At the time Mr Sutton livedwith two flatmates in a property he owned, his former matrimonial home,in Point Chevalier, Auckland (Pt Chevalier). Mr Sutton and Ms Bell began a sexualrelationship shortly afterwards. Ms Bell moved in with Mr Sutton at Pt Chevalierin February or March 2004. The couple slept together in Mr Sutton's bedroom fromthen on. In late November 2004 Mr Sutton, with Ms Bell's knowledge, transferredPt Chevalier to the Hunt Family Trust (the Trust). The couple entered into a de factorelationship sometime between December 2004 and January 2005. They continuedto live together at Pt Chevalier until that relationship ended on 1 September 2012.[2] Ms Bell subsequently claimed a half interest in Pt Chevalier. She did so on thebasis Mr Sutton had transferred that property to the Trust in order to defeat herentitlements under the Property (Relationships) Act 1976 (the Act). The Family Courtgranted that application.1 It ordered that Pt Chevalier be transferred to Ms Bell andMr Sutton as tenants in common in equal shares.2 The High Court dismissedMr Sutton's challenge to that decision.3 With leave of the High Court, Mr Sutton nowappeals that decision.4[3] Mr Sutton's notice of appeal contained eight separate grounds, and the parties'list of issues included six. However, and as we explain below, the two principal issuesraised by this appeal as argued before us are:(a) Whether s 44 of the Act can apply to a disposition of property madebefore the relevant de facto relationship has commenced?(b) If it can, was the High Court correct to find that Mr Sutton hadtransferred Pt Chevalier to the Trust in order to defeat rights the Actwould have otherwise given Ms Bell?Background[4] After the couple's separation in 2012 Mr Sutton initially moved to a sleepoutat Pt Chevalier. Ms Bell remained in the house with their two children. Ms Bellcontinued to live at Pt Chevalier until January 2018.[5] For all of that period Mr Sutton continued to pay the outgoings on Pt Chevalier.[Redacted.][6] [Redacted.][7] Ms Bell commenced these relationship property proceedings in July 2017.She sought determination and division of all the couple's relationship property and, inparticular, equal division orders under s 44 of the Act in respect of Pt Chevalier.1 Bell v Sutton [2019] NZFC 5363 [Second FC decision].2 At [87].3 Sutton v Bell [2020] NZHC 1557 [Judgment under appeal].4 Sutton v Bell [2020] NZHC 2014 at [42].[8] The couple's relationship property proceedings, [redacted], have a complexhistory.[9] In a Family Court judgment of 27 July 2018 (the first FC decision),Judge Clarkson determined the parties' de facto relationship had begun byFebruary 2004, when Ms Bell started living at Pt Chevalier with Mr Sutton.5 It wasthen that she had recently listed the apartment she owned, and had previously lived in,on the rental market. As the Judge put it, Ms Bell's action in taking steps to rent outher apartment "was the final demonstration that they had adopted a more permanentlife together".6[10] Ms Bell's substantive s 44 application was granted by Judge Druce in aFamily Court judgment released on 17 July 2019 (the second FC decision).7 In doingso the Court proceeded on the basis of its earlier findings the parties were in aqualifying de facto relationship from February 2004 and Pt Chevalier was the familyhome from that time until its sale by Mr Sutton to the Trust in November 2004.8Having considered the evidence then before it, the Court was satisfied that s 44(1)applied to that sale.9[11] Mr Sutton appealed the second FC decision to the High Court as of right and,at the same time, applied for leave to appeal the first FC decision out of time andto adduce new evidence for that purpose.[12] That evidence comprised various emails between the couple. They had beendiscovered by Mr Sutton on old computer hard drives after the first FC decision butbefore the second FC decision. Those hard drives, it was said, were direct copies ofthe computer which Ms Bell had taken with her on leaving Pt Chevalier. Those emailsought, Mr Sutton said, to have been disclosed for the purposes of the first FC decision.5 Bell v Sutton [2018] NZFC 5556 [First FC decision]. The Judge also said March 2004 was"the latest date" which could be attributed to the commencement of the de facto relationship:at [39].6 At [41].7 Second FC decision, above n 1.8 At [17].9 At [57].Had they been, they would have been directly supportive of his propositionthe couple's de facto relationship had not started until late 2004.[13] The High Court granted both of those applications in February 2020.10[14] Mr Sutton's substantive appeals against the first and second FC decisions wereheard by Walker J in the High Court in March 2020, with the decision under appealbeing released on 3 July 2020.11 Shortly before that hearing, and as anticipated in theHigh Court's February decision, more emails were revealed on further analysis of thehard drives. Those emails were admitted by consent shortly before the hearing.The parties also agreed that cross-examination on the new emails was not required.The challenged High Court decision[15] It is useful to start by noting the High Court placed considerable emphasis onan email sent by Ms Bell to Mr Sutton on 23 February 2004. That email, in Walker J'sview, was significant in addressing the appeals against both the first and secondFC decisions. That email said:I have also been thinking about living together and the specifics of the newRelationship Property Law The basics are: If two people live together ina property deemed as "The Family Home" for at least three years, the propertycan be divided if the relationship breaks up - irrelevant of who ownedit originally! The point being though – that it is after three years!! Also theLaw covers any "property" the couple purchase together (eg household items,etc etc). Spouses or partners can agree between themselves on how to sharethe property. These agreements can be made at any stage of the relationship.Those agreements must be in writing and each spouse or partner must haveindependent legal advice. So - how I think we should work it is: - I only stayin your house for a short period of time (time limit to be defined - eg 6 - 9months) - I don't invest any major amounts of money in the upgrade ofthe property - thereby not having any 'rights' in the property's value (ie notbuying fencing etc). Gifts, cleaning, or helping you do the gardening, orthe 'table' project doesn't count! - Over the next few months, when you getsome money, you go to a Lawyer and tie up the property as a "separateproperty" - ie putting the property in trust and having it separate for the rest ofyour life. Then no matter what happens - for the rest of your life, you havethe Pt Chevalier property as your own and it can never be counted as"Relationship Property" and won't ever be at risk of being divided again. 10 Sutton v Bell [2020] NZHC 327.11 Judgment under appeal, above n 3.The email then quoted from a Courts of New Zealand website which definedrelationship and separate property, and how separate property might becomerelationship property. At the end of the quote was the following statement:Usually, separate property is not shared. It remains the property of the spouseor partner who owns it. However, if you really want to protect such property,you should make an agreement with your spouse or partner.The family home (even if it is in the name of one spouse or partner) and familychattels are never separate property.We discuss the significance of this email — both in terms of the commencement ofMr Sutton's and Ms Bell's de facto relationship, and Mr Sutton's intent to defeatMs Bell's rights under the Act — later in our reasons.[16] First, the Judge dealt with the appeal against the first FC decision as tothe commencement date of the de facto relationship. She was satisfied the additionalevidence supported Mr Sutton's assertion as to when the de facto relationshiphad commenced.12 That is, the emails were consistent with his narrative that Ms Bellhad initially moved in with him principally for economic reasons, and on atemporary basis. It was only in December 2004/early January 2005, when they hadholidayed together and conceived their son, that they became committed to apermanent relationship. It was on return from that holiday they asked their flatmateto move out.13 Thus, Mr Sutton had disposed of Pt Chevalier before his and Ms Bell'sde facto relationship had commenced.[17] The Judge then considered Mr Sutton's challenge to the second FC decisionwhich granted Ms Bell relief under s 44.[18] As relevant, s 44(1) of the Act provides:44 Dispositions may be set aside(1) Where the High Court or the District Court or the Family Courtis satisfied that any disposition of property has been made, whetherfor value or not, by or on behalf of or by direction of or in the interestsof any person in order to defeat the claim or rights of any person12 At [74]–[75].13 At [65].(party B) under this Act, the court may make any order undersubsection (2).(Emphasis added.)[19] Mr Sutton argued that, in terms of s 44(1), he could not have acted in orderto defeat, that is with an intention to defeat, interests in property which at the relevanttime did not exist. They did not, and could not, exist because his de facto relationshipwith Ms Bell had not, by November 2004, commenced. Similarly, and from anevidential perspective, Mr Sutton argued the finding the couple's relationship had notcommenced when he transferred Pt Chevalier to the Trust was of considerablesignificance. It went to whether Mr Sutton had intended to defeat Ms Bell'sentitlements, even if it was sufficient as a matter of law for those entitlements to beones to which she would become entitled in the future.[20] Ms Bell argued the contrary: it was not legally necessary for a de factorelationship to have begun at the time of the challenged disposition. Rather, adisposition "in anticipation" of a de facto relationship did not avoid the application ofs 44 unless it followed a valid agreement, contracting out of the Act's equal sharingregime under s 21.14[21] Having considered all the evidence, the Judge was satisfied objectively thatMr Sutton was aware the transfer of Pt Chevalier to the Trust would avoid relationshipproperty interests in that property arising in the future.15 The Judge acceptedMr Sutton may, on the basis of a belief the couple were not in a de facto relationship,reasonably have thought Ms Bell had no relationship property interests or, in terms ofher encouragement to him to form the Trust, was disavowing any interests.16 But anassessment for s 44 purposes had to be made in the context of the proximity ofapproximately one month between the commencement of the couple's de factorelationship and the establishment of the Trust.17 On that basis, and as regards whetherMr Sutton disposed of the property intending to defeat Ms Bell's interests, the Judgeconcluded:14 At [80].15 At [94].16 At [100(g)].17 At [100(k)].[101] Weighing these various factors, and Mr Sutton's knowledge of thefuture effect on Ms Bell (rather than a generalised understanding of the effect),I concur with Judge Druce's conclusion. The couple were on the cusp of a defacto relationship within the meaning of the Act at the time of the disposition,having been in an intimate relationship for a considerable period. I amsatisfied that the disposition was made in anticipation of the deepening of theircommitment to one another. Ms Bell has therefore discharged the onus ofestablishing that the disposition to the Trust was intended to defeat her interest.This appeal[22] Mr Sutton challenges the High Court's conclusion as to s 44. The two issueswe identify at [3] constitute the core of that challenge. For her part, Ms Bell does notchallenge the Judge's finding as to the date of the commencement of the couple'sde facto relationship (December 2004/January 2005), and — as is obvious — supportsher ruling on the application of s 44.[23] As relevant to the further issues raised by this appeal, Mr Sutton challengesthe following further conclusions the High Court reached:(a) Notwithstanding the Trust's acknowledgement of a debt back toMr Sutton, the integrated nature and purpose of Mr Sutton's giftingprogramme meant the Trust did not receive Pt Chevalier for valuableconsideration.18(b) [Redacted.](c) Mr Sutton had not established Ms Bell had in the Family Courtproceedings concealed evidence in the way she responded to aproduction notice.19(d) The Family Court's order for division was appropriate.18 At [109]. It should be noted that the Judge said she was "inclined" to that view, without decidingthe issue, because the conjunctive requirements of s 44(2)(a) — that the recipient of the disposedproperty received the property in good faith and valuable consideration — were not satisfiedbecause the Trust did not receive Pt Chevalier in good faith, based on Mr Sutton's knowledge ofthe disposition as trustee.19 At [119].[24] We will consider and determine this appeal by reference in turn to the six issuesidentified by the parties. Before doing so, however, we summarise the scheme ofthe Act as relevant here.The scheme of the Act[25] Section 1C summarises the Act's well-known scheme for the equal division ofrelationship property between couples at the end of their relationship:1C What this Act is about(1) This Act is mainly about how the property of married couples and civilunion couples and couples who have lived in a de facto relationship isto be divided up when they separate or one of them dies.(2) This Act applies differently depending on the length of the marriage,civil union, or de facto relationship:(a) in the case of marriages and civil unions, special rules applyto marriages and civil unions of less than 3 years:(b) in the case of de facto relationships, this Act usually appliesonly when the de facto partners have lived together for at least3 years, but it may apply to shorter de facto relationships incertain circumstances.(3) In general, the couple's property is to be divided equally between thecouple.[26] The Act's presumptive equal division regime for relationship property wasapplied first to marriage relationships when the Act came into force on1 February 1977 as the Matrimonial Property Act 1976. Major reforms in 2001 sawthat approach extended to de facto relationships, both same and opposite sex.20 At thattime the Act was given its current title. Civil unions were brought within the scope ofthe Act in 2005.21[27] From the start, the Act has provided both:(a) the freedom for couples to contract out of the Act's presumptive equaldivision regime;22 and20 Property (Relationships) Amendment Act 2001.21 Property (Relationships) Amendment Act 2005.22 Property (Relationships) Act 1976, s 21.(b) powers for the courts to restrain, set aside and compensate fordispositions which, in general terms, defeat claims that might in theirabsence have arisen under the Act.23The contracting out regime[28] The Act's contracting out regime promotes couples', rather than anindividual's, autonomy. Section 21 provides that "[s]pouses, civil union partners, orde facto partners, or any two persons in contemplation of entering into a marriage,civil union, or de facto relationship" may contract out of the provisions of the Act.Section 21F stipulates formal requirements to ensure that each party to such anagreement makes a free and informed decision:21F Agreement void unless complies with certain requirements(2) The agreement must be in writing and signed by both parties.(3) Each party to the agreement must have independent legal advicebefore signing the agreement.(4) The signature of each party to the agreement must be witnessed by alawyer.(5) The lawyer who witnesses the signature of a party must certify that,before that party signed the agreement, the lawyer explained to thatparty the effect and implications of the agreement.[29] Thus parties may contract out of rights and entitlements before, but whilstin contemplation of, and after the commencement of a qualifying relationship,including a de facto relationship. Contracting out may be achieved by any agreementthe parties "think fit with respect to the status, ownership, and division of theirproperty (including future property)".2423 The courts' power here has a long pedigree. Section 81 of the Matrimonial Proceedings Act 1963was the first iteration of the court's power in its modern form. However, under s 34 of theDivorce and Matrimonial Causes Act 1928, courts could set aside a "deed, conveyance, agreementor instrument" made "in order to defeat the claim or rights of a petitioner [under the Act] in respectof damages, alimony, agreement or instrument".24 Section 21(1).[30] Subject to the fulfilment of the formal requirements, the courts will enforcethe couple's bargain except only for avoidance on the "serious injustice" ground foundin s 21J:21J Court may set agreement aside if would cause serious injustice(1) Even though an agreement satisfies the requirements of section 21F,the court may set the agreement aside if, having regard to allthe circumstances, it is satisfied that giving effect to the agreementwould cause serious injustice.(2) The court may exercise the power in subsection (1) in the course ofany proceedings under this Act, or on application made forthe purpose.[31] Mandatory considerations when making the "serious injustice" assessment areprovided in s 21J(4). They include:(a) the provisions of the agreement:(b) the length of time since the agreement was made:(c) whether the agreement was unfair or unreasonable in the light of allthe circumstances at the time it was made:(d) whether the agreement has become unfair or unreasonable in the lightof any changes in circumstances since it was made (whether or notthose changes were foreseen by the parties):(e) the fact that the parties wished to achieve certainty as to the status,ownership, and division of property by entering into the agreement:(f) any other matters that the court considers relevant.[32] As to "serious injustice", Fisher on Matrimonial and Relationship Propertyobserves:25The effect of s 21 is that contracting out is realistically possible onlyto the extent that the agreement is not so "unreasonable" as to give riseto "serious injustice". Consciously or otherwise, a comparison is madebetween the effect of the agreement and the effect of the Act.25 Fisher on Matrimonial and Relationship Property (online ed, LexisNexis) at [5.29].[33] The particular significance of s 21 in this context is, therefore, Parliament'sclear intention that couples were to be able to contractually avoid rights which underthe Act would only come into existence in the future.Restraining and setting aside dispositions[34] The enabling of contracting out in s 21 is complemented by the restraints foundin ss 43 to 47 on dispositions which would take property beyond the reach of the Act.[35] In summary:(a) Section 43 empowers the court to restrain dispositions of propertyabout to be made "in order to defeat the claims or rights" under the Act.(b) Section 44, as set out above, gives the court the power to set aside suchdispositions after they have been made. In doing so the court may orderthat the person to whom the disposition was made, or a person who hasreceived the disposed property from that person, transfer the propertyor pay money into court, as the court directs. Such relief may not beordered, however, to the extent that the person from whom it is soughtreceived the property in good faith and for valuable consideration.Orders under s 44 can be made irrespective of whether the propertyin question was, at the time of its disposition, relationship property.(c) Section 44C allows the court to order compensation where, sincethe beginning of a marriage, civil union or de facto relationship,relationship property has been disposed to a trust and that dispositionhas had the effect of defeating claims or rights under the Act ina situation where s 44 does not apply. Such compensation may involvethe payment of a sum of money, the transfer of property (whetherrelationship property or otherwise) or payment of income of the trust.(d) Sections 44F and 45 provide further protection where property has beendisposed to "qualifying" companies, and where family chattels havebeen disposed of.(e) Sections 46 and 47 protect the interests of mortgagees and creditorsgenerally.[36] The establishment of the Act's presumptive equal sharing scheme wasthe product of a concerted programme of legal reform over a lengthy period of time,both as regards the range of relationships and the extent of a couple's property to whichit applies. Although now well understood, and no longer controversial, that was notalways the case. That regime forms an important part of New Zealand's social andlegal fabric. It goes without saying that when interpreting provisions of the Act,its underlying philosophies and principles are of fundamental importance.[37] More particularly, as we now explain, the relationship between the s 21contracting out provisions and the s 44 avoidance provisions provides the basis forresolving the first of the issues we are to address: that is the significance or otherwiseof the existence of a qualifying relationship, here a de facto one, for the availability ofrelief under s 44.The jurisdiction issue: can a s 44 claim be made for property disposed of beforethe relationship commences?Overview[38] The question here is whether s 44 can be used to set aside a disposition ofproperty made before the commencement of a qualifying relationship. As we havesaid, the High Court's finding Mr Sutton and Ms Bell's de facto relationshipcommenced in December 2004/January 2005 is not challenged on appeal.[39] Mr Sutton argues that because his de facto relationship with Ms Bell had notcommenced by November 2004 (when Pt Chevalier was transferred into the Trust),her rights under the Act had not come into existence. He could not, therefore, haveintended to avoid them.[40] We do not agree. As we now explain, whether a qualifying relationship hascommenced is not determinative of the availability of a s 44 claim. Rather, what isdeterminative is the status of the relationship at the time of the challenged disposition,accepting it is yet to become a qualifying relationship.[41] In our view, for a claim to be available the couple, at the time of the disposition,must have reached a stage where there was mutual contemplation of beginninga qualifying relationship. That approach is consistent with the Act's contracting outregime. That established, the question will then be whether the disposition was madein order to defeat rights which would have otherwise arisen under the Act.Case law[42] The significance, for s 44 claims, of the existence or not of entitlements underthe Act at the time of the disposition has been considered in a number of cases.[43] One group of those cases involves dispositions of property made afterthe commencement of a de facto relationship but before the Act's equal sharing regimefor de facto relationships came into force on 1 February 2002.[44] The first of those, Ryan v Unkovich, involved a strike-out application on thebasis it was impossible to have an intention to defeat rights not then in existence.26Emphasising the strike-out context, French J concluded "the mere fact the dispositionspre-dated 1 February 2002 is not in itself sufficient to dispose of the claim".27 In doingso, the Judge reasoned:(a) At the time of both transactions, and as the Judge put it referring tothe subsequent enactment of the Act, "it was widely known that majorlegislative change was on its way".28(b) As a matter of general principle, an intention to defeat future claimswas capable of constituting an operative intention to defeat.2926 Ryan v Unkovich [2010] 1 NZLR 434 (HC).27 At [40].28 At [27].29 At [42](i).(c) There was nothing in s 44 which expressly required the rights andinterests to exist at the time of the disposition.30[45] The Judge also emphasised the significance of the fact that, at the relevant time,a de facto relationship existed. In doing so, the Judge noted the decision ofGenc v Genc which held that the existence of a qualifying relationship was a necessarypre-condition for a claim under s 44.31 Thus in Mr Unkovich's case the factual basisfor his subsequent legal entitlement — his de facto relationship with Ms Ryan —already existed. Accordingly, to exclude automatically all dispositions prior to1 February 2002 from the ambit of s 44 was not, the Judge concluded, consistent withParliament's purpose.32[46] In Gray v Gray, Heath J resolved similar issues adopting French J's analysis.33[47] Finally, in SMW v MC the High Court endorsed French J's reasoning in Ryan,observing:34[64] It is immaterial that at the time of the disposition, C had no rights inthe property. There is nothing in s 44 which expressly requires that the rightsand interests must exist at the time of disposition. Such an interpretation isconsistent with the finding that an intention to defeat another party's rights orclaims includes an intention to defeat a future claim, as discussed below.[48] Whilst those cases concluded s 44 may apply to a disposition entered into inorder to defeat future rights, they did not consider whether the same could be said ofa disposition made before the commencement of the relevant relationship. Moreover,and relying on Genc, the Courts in Ryan and Gray proceeded on the assumptiona qualifying relationship must exist at the time of the disposition for there to bea challenge under s 44.[49] But Genc did not go that far. Reflecting the previous law, Mrs Genc claimedan interest in the family home, transferred by Mr Genc to his family trust beforethe couple married, on the basis the trust was a sham or Mr Genc's alter ego. In doing30 At [42](ii).31 Genc v Genc [2006] NZFLR 1119 (HC) at [96].32 Ryan v Unkovich, above n 26, at [42(vi)].33 Gray v Gray [2013] NZHC 2890 at [33]–[40].34 SMW v MC [2013] NZHC 396, [2014] NZFLR 71 (footnote omitted).so, she asserted the couple were in a de facto relationship from 1994 until they marriedin 1999. The Family Court found the couple had only begun a de facto relationshiparound the time they married, and went on to dismiss Mrs Genc's argument the trustwas a sham or Mr Genc's alter ego.[50] On appeal, in upholding the Family Court's findings, the High Courtreasoned:35[71] The Judge in this case found that the parties were not in a de factorelationship within the meaning of the Act at any time priorto the announcement of their intention to marry towards the end of 1998.I have upheld that finding. It follows that the property which Mr Genctransferred to the trust was his separate property, [72] Consequently, although the property became the home of theparties after the date upon which the de facto relationship commenced,towards the end of 1998, it was not property to which Mrs Genc could lay anyclaim by virtue of the relationship at the time the trust purchased it,or subsequently. It has never been relationship property.[51] But claims under s 44 are not limited to relationship property. And given thatapproach, the fact the disposition was made before the couple's de facto relationshipcommenced was not relevant jurisdictionally or evidentially to the availability ofa s 44 claim. Accordingly, it is not clear what — if anything — we should takefrom Genc.[52] That issue has featured to a relatively minor extent in two subsequent decisionsof the High Court. Those decisions are not, however, of great assistance.36First principles[53] Given the state of authority on the jurisdiction issue, or more accuratelythe lack thereof, it is appropriate we consider the matter on the basis of first principles.35 Genc v Genc, above n 31.36 See further JEF v GJO [2012] NZHC 1021, (2012) 3 NZTR 22-010 and K v V [2012] NZHC 1129.In JEF v GJO, the High Court proceeded on the assumption that it was necessary for a de factorelationship to exist at the time of the challenged transaction, and it was accepted the dispositioncould only be challenged by arguing the trust was invalidly constituted. In K v V, the High Courtdid not accept the appellant's arguments that a transfer could not be caught by s 44 because it pre-dated the inclusion of de facto relationships in the Act, citing Ryan v Unkovich, above n 26. TheJudge found, on an evidential basis, that the disposer did not have an intention to defeat an interesthe did not think existed at the time.[54] The first of those principles is the scheme and purpose of the Act. We needsay no more on that than we have already. We also recognise the general propositionthat where Parliament protects third party interests from transactions that wouldadversely affect those interests, it can choose to protect not only interests which existat the relevant time, but also interests which may come into existence subsequently.[55] Having said that, we acknowledge the apparent appeal in this context ofthe binary proposition that, until a qualifying relationship is in existence, it is difficultto see how a disposition can be made in order to defeat property entitlements thatwould otherwise arise under that relationship. After all, how can such a prediction bemade if the qualifying relationship has not commenced?[56] We also acknowledge it can be argued that to require the existence ofa qualifying relationship for jurisdiction under s 44 to exist would recognise individualautonomy. But that is not consistent with the s 21 contracting out regime founded onthe principle of couples' autonomy. And, as Fisher on Matrimonial and RelationshipProperty notes, the scheme of the Act gives only limited protection to pre-qualifyingrelationship assets:37Unlike the traditional community of acquests38 and the more modern deferredcommunity of surplus39 matrimonial property regimes overseas, theProperty (Relationships) Act 1976 gives limited protection to pre-marriage orrelationship assets. Nowhere in the Act are they expressly and positivelyprotected as separate property. Only to the limited extent that they escapethe numerous relationship property categories (s 8(1)(a)-(l), s 9A(1) and (2),and s 10(4)) do such assets fall into the residue of separate property (s 9(1)and (2) and s 10(1) and (2)).[57] The limited nature of that protection indicates s 44 should not be applied in amanner inconsistent with s 21, which expressly contemplates the making ofagreements prior to the commencement of a qualifying relationship. If s 44 did notapply at all to dispositions made before a qualifying relationship began there wouldbe considerable potential to 'hollow out' s 21. A soon-to-be-spouse or partner couldunilaterally dispose of property and thereby shield it from the Act's property-sharing37 Fisher on Matrimonial and Relationship Property, above n 25, at [5.21] (footnotes in originalomitted).38 Where pre-marriage realty (but not the personalty) is treated as separate property.39 Where pre-marriage assets remain separate property while both share in after-acquired assets.regime, and the courts' s 44 oversight. Moreover, it would seem strange if attemptsmade before the commencement of a qualifying relationship, to lawfully contract outof equal sharing, could be set aside under s 21J; but that unilateral, and hencenon-consensual, attempts made at the same time would fall outside the courts'jurisdiction under s 44. In our view, therefore, Parliament cannot have intendedthe existence of a qualifying relationship at the time of a disposition of property to bea necessary pre-condition for the availability of s 44 relief.[58] That conclusion is strengthened when it is remembered ss 44C and 44F(relating to dispositions to trusts or to qualifying companies respectively) — which donot require an element of purpose — only apply to dispositions made sincethe relationship began.[59] A further aspect of the Act also supports that conclusion, particularly as regardsde facto relationships. Sections 14, 14AA and 14A deal respectively with marriages,civil unions and de facto relationships of short duration: that is, and in general, onesthat have lasted for less than three years.40 Those provisions affect the expectation ofequal sharing, notwithstanding that the relationship has commenced at the time ofthe impugned disposition.41 If a de facto relationship remains one of short duration,an order for the division of relationship property cannot be made under the Act exceptin certain circumstances.42 But there is no suggestion a challenge under s 44, toa disposition made during that initial period of a de facto relationship whichsubsequently ceased to be of short duration, would face a jurisdictional or evidentialchallenge on the basis that entitlement was at that time yet to come into existence.Conclusion on the jurisdiction issue[60] For all those reasons we are satisfied a claim under s 44 can be made whereproperty is disposed of before the start of the relevant qualifying relationship.[61] The question therefore becomes, in a jurisdictional sense, when in the courseof a "relationship" does that possibility arise? Walker J did not separately consider40 Property (Relationships) Act, s 2E.41 Sections 14(2) and 14AA(2).42 Section 14A(2).that question but went to the eventual one of Mr Sutton's intent — was the dispositionmade "in order to defeat" pursuant to s 44(1)? There is, we acknowledge, considerableoverlap between those two questions in the case of a pre-qualifying relationshipdisposition. But, guided by the approach taken under s 21 as to what constitutes"in contemplation" as the pre-condition for valid contracting out agreements, we thinkthe better approach is to separately consider the "when" question we have just posed— albeit the answer in a particular case is evidentially dependant — separately fromthat of the disposer's intention."In contemplation"[62] We have noted the Act's recognition in s 21 that parties can contract out of theequal sharing regime in contemplation of entering into a de facto relationship.That helped us to conclude s 44 can apply to dispositions made prior to thecommencement of a de facto relationship. But just what constitutes suchcontemplation remains a difficult question. That is because of the essentialcharacteristics of a de facto relationship. As the statutory definition of that termrecognises, parties will be in such a relationship when, objectively assessed, they areseen to "live together as a couple".43 A de facto relationship can, therefore, commencewithout there having been any "contemplation" of that occurring as will not be the casefor marriages and civil unions. The formalities of entering those latter qualifyingrelationships require contemplation. At the same time, it can also be said that oncea couple mutually contemplate a de facto relationship, that is mutually accept itsdesirability, that relationship may well have already come into existence. Such is thenature of things.[63] Taking what guidance we can from that acknowledgement, we think what ismeant by the phrase "in contemplation" in the context of contracting out is the mostuseful starting point for identifying the existence of the characteristics of a relationshipwhich can provide the context necessary for there to be an intention to defeatentitlements for s 44 purposes.43 Section 2D(1)(b).[64] As the High Court recognised, a disposition made with such a purpose, but onenot focused on the future entitlements of a specific person, is not enough.44Rather, the disposer must already be in a relationship with a specific person which isof sufficient significance, in terms of possible future rights under the Act, to enablethe conclusion to be drawn that the disposer could have acted in order to defeat thatperson's possible future rights.[65] As noted, the Judge was satisfied the disposition was made "in anticipation ofthe deepening of their commitment to one another".45 It is not clear what the Judgemeant by her phrase "in anticipation". She may have used it as a synonym for theAct's phrase "in contemplation". If she did, she did not analyse the evidence in termsof established meaning of that phrase. The phrase "in contemplation" is usedelsewhere in the Act:(a) The definition of relationship property in s 8 includes property ownedby either spouse or partner immediately before their qualifyingrelationship began, if acquired in contemplation of that relationship andintended for their common use or benefit.46(b) Section 16 provides for the court to adjust the shares of the spouses orpartners when dividing the relationship property including where,before a qualifying relationship began, each spouse or partner owned ahome capable of being a family home, and one sold such a home"in contemplation" of that relationship.[66] As can be seen, the circumstance of a couple acting in contemplation ofbeginning a qualifying relationship is used to define the point in their relationshipat which the law recognises that, although that qualifying relationship is yet to comeinto existence, the effect of some formal legal step should be assessed in terms of theconsequences it will have if such a relationship does commence. Accordingly,consideration of what is meant by "in contemplation" provides guidance as to when44 Judgment under appeal, above n 3, at [96].45 At [101].46 Property (Relationships) Act, s 8(1)(d).a disposition can properly be characterised as having been made to defeat futureentitlements of the person s 44(1) refers to as "Party B".[67] What is meant by "in contemplation" as regards de facto relationships hasreceived little attention. The phrase "in contemplation of marriage" has a longerpedigree, and has been considered in a number of cases, not only in the context of s 44but also for wills made in contemplation of marriage and for property acquiredin contemplation of marriage.[68] What constitutes "in contemplation" of entering into a marriage wasconsidered by this Court in M v H.47 This Court accepted Brewer J's analysis inthe High Court that the Act's contracting out provision should, as relevant here,be interpreted as having been intended to apply to couples having a "clear and presentintention" to become married.48 In doing so, this Court rejected the submission thatto "contemplate" simply means to "entertain the possibility of such an occurrence".49As this Court said:50The implications of the [contracting out] agreement cannot be explained in atangible and useful way [under the formalities provisions, for example,the independent advice requirement] if the marriage that might bring theparties within the sharing regime of the [Matrimonial Property Act 1976] isno more than a distant prospect. This indicates that the words "incontemplation of their marriage to each other" means a marriage actuallyintended at the time the agreement is entered into, as Brewer J found.At the time they entered into the agreement, June 2000, the parties had no planto marry. The [Matrimonial Property Act] did not apply to them and there wasno expectation that it would do so. The appellant was not able to make aninformed decision about whether to contract out of her rights under the Actbecause she had no such rights and did not expect to acquire them in theforeseeable future.[69] This Court also noted support for that strict approach could be found in casesconcerning whether a will survives a subsequent marriage:47 M v H [2018] NZCA 525, [2018] NZFLR 918.48 At [47] and [55]; referring to M v H [2017] NZHC 2385, [2017] NZFLR 751 at [47].49 At [48].50 M v H, above n 47, at [51] and [55].[52] The expression "in contemplation of a marriage" has long beenused in legislation governing wills. Section 13 of the formerWills Amendment Act 1955 read:Notwithstanding anything in s 18 of the principal Act or anyother enactment or rule of law, a will expressed to be made incontemplation of a marriage shall not be revoked by thesolemnisation of the marriage contemplated.[53] In Re Natusch, McGregor J considered that the expression requiredthat at the time of making the will, the testator intended marriage as a likelyfuture event.[54] The current Wills Act 2007 uses a similar formulation. It providesthat a will is revoked if the will-maker marries or enters into a civil union butnot in certain circumstances including where the will was made incontemplation of a particular marriage or civil union. In Re Stirling(deceased), Heath J was not satisfied that a will had been made incontemplation of marriage even though the testator was engaged and intendedto marry at the time the will was made. This was because there was noevidence that he was advised of the legal implications of making a will incontemplation of marriage.(Footnotes omitted.)[70] We consider that the approach requires adaptation in the context of de factorelationships. As noted, the transition from a "dating" relationship to a de facto one,as defined by the Act, generally involves an evolution rather than a formal legal step.Therefore it would not, in our view, be appropriate to apply the strict tests that applyto determining "in contemplation of marriage" to "in contemplation" of a de factorelationship.[71] The issue here is not whether the qualifying relationship has begun, butwhether, between the couple, a relationship in fact exists of such a character as to bringthe s 44 protection into play. In our view, an intention to defeat cannot be entirelyabstract. That is, the entitlements in question at the time — whether actual or future— must be those of a person who is a party to a relationship in which a qualifyingrelationship is "in contemplation" and which subsequently becomes such arelationship, and which then ends. That is consistent with the approach under s 21.There the temporal requirement for an effective contracting out is that the couple are"contemplating" a qualifying relationship.[72] We recognise the need to provide, insofar as possible, certainty to persons inthe situation of a developing relationship. We consider that certainty requires amilestone as to when the exercise of one's (separate) property rights will becomefettered by the need to consider — and agree on — the implications for their partner.[73] To that end, we prefer to be guided by the words of the Act itself. At the heartof the definition in s 2D of a "de facto relationship" is the requirement for two personsto "live together as a couple". "In contemplation of entering into a de factorelationship" in s 21 therefore means, at its simplest, contemplating living together asa couple.[74] Generally, the decision to live together represents a couple preparing to maketheir relationship more serious. We are satisfied that, in most cases, a decision to livetogether creates a strong but rebuttable presumption that there exists betweenthe parties mutual contemplation of entering a de facto relationship. Rebuttable,because an analysis of the contextual factors in s 2D(2) may indicate that, even wheretwo people agree to live together, they are not doing so "as a couple". That analysisdistinguishes true couples from those in relationships of less significance, such asthe 'friends with benefits' situation. Ultimately, an inquiry into the substantivecharacteristics of the relationship may be necessary.Were Mr Sutton and Ms Bell "in contemplation" of a de facto relationship whenMr Sutton made the disposition?[75] In the present case, we are satisfied that when Mr Sutton disposed ofPt Chevalier to the Trust in November 2004, he and Ms Bell were in contemplation ofentering a de facto relationship. They had been, by that time, in an exclusiverelationship for approximately 16 months and had been living together for eight ofthose months. They presented to their families and friends as a couple, and were bythat time a serious and committed couple.[76] We acknowledge that one of the motivations for Ms Bell moving in withMr Sutton was to establish her new business from his home office. But we are notconvinced that was the sole motivation. Rather, that motivation would appear to havecoincided with the decision to take the next step in the development oftheir relationship.[77] By the time she had moved in, Ms Bell had also visited Mr Sutton's sister inAustralia with him and had spent Christmas with Mr Sutton's family. While Mr Suttondownplayed the significance of those events as demonstrating his commitment to her,we agree with Ms Bell that they show she was more than a "tag on girlfriend".We do not think that, in the context where Mr Sutton had ended his marriage onlymonths prior, he would have involved Ms Bell in his family life in that way withoutforeseeing that his relationship with her could well become an enduring one.[78] Ms Bell had claimed that it was Mr Sutton who had persuaded her to move inby "pointing out that there was a home office from which I could begin mynew business". But she also said that before moving in, she had been staying withMr Sutton most nights of the week. Mr Sutton rejected the latter claim.He had maintained right up until the first Family Court hearing that Ms Bell hadmoved in "as a flatmate". As the context shows, that was clearly an understatement.Under cross-examination, Mr Sutton conceded: When she moved in, we did sleep in the same bedroom, however she hadher own bedroom as well which she had all her stuff in and she had her ownwardrobe in that room, so she had her own bedroom, with her own wardrobe,the office that she was operating her business from and then she would sleepin my bed.[79] As Judge Clarkson noted in evidence once Mr Sutton gave that answer, the facthe and Ms Bell shared a bed had been "left out" of his affidavits.[80] While Mr Sutton and Ms Bell lived at Pt Chevalier with a flatmate untilJanuary 2005, it is not uncommon for couples to do so. And although Mr Sutton andMs Bell kept separate accounts throughout 2004, we do not think having joint accountsis necessary for a couple to be contemplating a de facto relationship; rather, havingjoint accounts is more likely evidence of a de facto relationship already in existence.[81] After moving in together, Mr Sutton and Ms Bell became more involved ineach other's lives. That is the gist of the emails from March 2004 onwards.Those emails refer to mundane everyday events and to more significantevents together. For example, in one email Ms Bell said they needed to go groceryshopping together and that it was "[her] turn to pay". Other emails show her arrangingpurchases of firewood and refer to her cleaning the yard for Mr Sutton. They alsoshow that they both holidayed together to Rotorua on Queens Birthday weekendin 2004, and while planning that trip Mr Sutton signalled his desire to holiday againwith Ms Bell in July/August of that year. Indeed, at the end of September/October,they both went to Malaysia for a 10-day holiday, returning via Australia to again visitMr Sutton's sister.[82] We are satisfied that by the time Mr Sutton made the disposition,his relationship with Ms Bell — particularly because of the duration of the relationshipand the apparent signs of permanence — was sufficiently serious to demonstratethe parties were in contemplation of a de facto relationship.The evidential issue: was the High Court correct to find Mr Sutton hadtransferred Pt Chevalier to the Trust in order to defeat rights the Act would haveotherwise given Ms Bell?[83] The Judge prefaced her discussion of this issue by summarising what she sawas the correct approach to determining the presence or otherwise of thenecessary intent. Referring to the approach in Ryan,51 as approved by this Court inPotter v Horsfall,52 she summarised that approach in the following way:53Thus, the inquiry for establishing intention is directed to the disposing party'sknowledge of the effect of the disposal on the other party's rights. From this,intention may be inferred, and it is not necessary to show that the disposingparty was motivated by a desire to bring about that consequence.[84] It is useful to note here that this statement summarises the position reached asregards the decision of this Court in Coles v Coles,54 and the Supreme Court'ssubsequent decision in Regal Castings Ltd v Lightbody.55 In Coles, this Court had saidthat "in order to defeat" required the disposer to have had a "conscious desire"to remove property from beyond the reach of the courts.56 The Supreme Court in51 Ryan v Unkovich, above n 26, at [33].52 Potter v Horsfall [2016] NZCA 514, [2016] NZFLR 974 at [40]–[41].53 Judgment under appeal, above n 3, at [91].54 Coles v Coles (1987) 4 NZFLR 621 (CA).55 Regal Castings Ltd v Lightbody [2008] NZSC 87, [2009] 2 NZLR 433.56 Coles v Coles, above n 54, at 624.Regal Castings, decided in the context of the meaning of "intent to defraud" unders 60 of the old Property Law Act 1952, put the test differently. It said that ifthe disposer had knowledge that their disposition would defeat creditors' recourse tothat property, the disposer must be taken to have intended that consequence.57That wider principle from Regal Castings was adopted by French J in Ryan forthe purposes of s 44:58 I accept the principles enunciated in Regal Castings are sufficiently generalto apply to s 44. In particular, I accept that in so far as the Coles formula failsto distinguish between intention and motive, it is contrary to the reasoning ofthe Supreme Court and should not be followed. Knowledge of a consequencecan be equated with an intention to bring it about.[85] Taking that approach, Walker J agreed with the Family Court Mr Sutton hadbeen aware of the effect of transferring Pt Chevalier to the Trust: that it would notbecome a family home if he entered into a de facto relationship.59 Mr Sutton'sevidence in the Family Court confirmed that understanding. Moreover it was likelyhe had received legal advice to that effect.60 Those factors alone, the Judge noted,supported the conclusion Mr Sutton was aware of the impact of the Trust on any ofMs Bell's potential rights.61[86] Powerful confirmation that was the case was to be found in the February 2004email Ms Bell had sent to Mr Sutton pointing out to him the property consequences ofde facto and other qualifying relationships for his ownership of Pt Chevalier.62 In lightof that possibility, and what Ms Bell knew would be Mr Sutton's father's concern ifthey were to live together, she recommended that over the next few months, when hegot some money, he went to a lawyer to tie up the property as a "separate property"— putting the property in trust and having it separate for the rest of his life. That emailwas, as is apparent, of particular significance as to the dispute over the date of thecommencement of the de facto relationship. As the Judge put it, it spoke of57 Regal Castings Ltd v Lightbody, above n 55, at [54] per Blanchard and Wilson JJ.58 Ryan v Unkovich, above n 26, at [33]. See further the discussion in Fisher on Matrimonial andRelationship Property, above n 25, at [9.42], which notes that the Supreme Court's decision onappeal in Horsfall v Potter [2017] NZSC 196, [2018] 1 NZLR 638 adopted language "redolent ofthat in Regal Castings" without actually citing it, and so may "implicitly be taken to have endorsed[this Court's] application of the Regal Castings test".59 Judgment under appeal, above n 3, at [92].60 At [93].61 At [94].62 Set out at [15] above."the impermanent and unsettled nature of their living arrangement" at the time.63But it also went to the question of Mr Sutton's knowledge prior to disposition ofpossible future relationship property interests arising in Pt Chevalier.64[87] Some months later, in September that year, Ms Bell and Mr Sutton attended anAuckland home show. They won a prize of a free consultation at a firm of solicitors.On 24 September 2004 Mr Sutton spoke to those lawyers and, as already noted, basedon the legal advice he received the Trust was settled on 9 November and Pt Chevaliertransferred to the Trust on 29 November.[88] At the end of the day the Judge based her conclusion that Mr Sutton hadthe necessary intention to defeat Ms Bell's future interests on his knowledge of theeffect of the trust arrangements and for their proximity of effecting those arrangementsto the subsequent commencement of the de facto relationship.[89] As we see it, the two main areas of analysis here concern the extent ofMr Sutton's knowledge as to the effect a trust would have on Ms Bell's rights; and thesignificance of Ms Bell's encouragement of the establishment of the Trust.[90] First, we start by observing, as did the High Court, that whether Mr Suttonconsciously desired to defeat Ms Bell's rights is not the issue.65 As we have explained,what is relevant is what Mr Sutton intended, including as demonstrated by what heactually knew of the disposition's effect.[91] We accept that the intent to protect Pt Chevalier from a division of relationshipproperty may not have been Mr Sutton's sole intent. He was likely to have beenmotivated in part by his grandparents' experience,66 and perhaps more broadly,to protect his home for the benefit of any children he was, at that time, yet to have.Under cross-examination at the hearing before Judge Druce, Mr Sutton gavethe following evidence:63 Judgment under appeal, above n 3, at [67].64 At [94].65 At [90].66 That is, the taking of 50 per cent of the value of Mr Sutton's grandparents' house to pay forMr Sutton's grandmother's rest home fees.Q. You understood that the benefit, or a benefit of a family trust wouldprotect a home from a division of relationship property, is that right?A. I understood that the family trust protected a home from all sorts ofincidences and the one that was at the top of mind at that stage was mygrandmother's estate that had just been completely cleaned out by resthome subsidies that had been taken off her, so it was top of [mind]Q. Okay so can you just answer the question, you understood that amongstother things, a family trust could protect a home from division ofrelationship property?A. I did understand that, yes. But I understood that a trust protects a homefrom a number of things, a number of features and that was actually partof the, that was when I went to see, to see Mr Shearer, he steppedthrough all the types of things that trusts do, he said, "This is," and atthat, was, we talked a lot about future kids, you know, when you havekids and you have future generations, this looks after this asset forfuture generations.[92] Mr Sutton's knowledge was based, in part at least, on the advice of his lawyer,Mr Sherer. Mr Sherer gave evidence at the second Family Court hearing he had talkedMr Sutton through the general workings of a trust and its benefits for asset protection,including as regards the division of relationship property. Mr Sherer also said that thetopic of rest homes was discussed.[93] For the purposes of s 44(1) it is sufficient if the intent to defeat a partner'sinterests is merely one of the disposer's various purposes. In Dyer v Gardiner,this Court held that even though Ms Gardiner had transferred shares to a trust to ensurea portfolio of assets could grow to provide ongoing financial support to her disabledson, her knowledge the arrangements would also ensure Mr Dyer had no recourseto the shares meant her disposition was made in order to defeat Mr Dyer's rights.67As Collins J put it in K v V, the requirement for a disposer to have the intent to defeat"need not be the sole aim of the transaction, or the dominant aim, it will suffice that itwas one of their aims".68[94] Mr Sutton accepted before Judge Druce that he understood the possibility thatif he was to enter a permanent relationship with Ms Bell there was a possibility67 Dyer v Gardiner [2020] NZCA 385, [2020] NZFLR 293 at [103].68 K v V, above n 36, at [110].Pt Chevalier would become the family home (and therefore liable to division underthe Act). Indeed, Ms Bell had told him as much in the February 2004 email.[95] We are satisfied Mr Sutton knew the consequences the disposition wouldcause: that can be sufficient to establish an intent to bring it about.[96] What, then, is the significance of Ms Bell's encouragement, as evidenced bythe February 2004 email, of Mr Sutton to take that course of action?[97] We recognise that Ms Bell appears to have supported and encouragedthe creation of the Trust and the transfer to it of Pt Chevalier. But ultimatelythe decision to undertake those actions was Mr Sutton's, on the advice of his counsel.Ms Bell's email of February 2004 helps to inform the motivation for the establishmentof the Trust. Ms Bell was not saying that she did not or would not have any rights inPt Chevalier under the Act. She was, in effect, acknowledging that those rights couldarise and that Mr Sutton should put Pt Chevalier into trust to prevent such an outcome.That is, she was acknowledging the purpose of the transaction. She was, in effect,agreeing to contract out.[98] But the Act mandates that a person cannot consent to a waiver of their rightsor entitlements except where a contracting out agreement has been made andthe formalities in s 21F are complied with. There clearly was no such agreement inthis case. If agreements that do not comply with the formalities are void (except inthe limited circumstances set out in s 21H), then it is not clear to us why Ms Bell'sapparent position in the February email (that Pt Chevalier should be Mr Sutton'sseparate property) should influence our objective assessment of Mr Sutton's intent inmaking the disposition under s 44. The most that can be said for Mr Sutton is that,with Ms Bell's apparent blessing, he did not make the disposition maliciously.But that is not a requirement of s 44(1). An intent, or knowledge of the effect of thedisposition, suffices. The "conscious desire" approach no longer reflects the test.69That means that a disposition made in good faith, but nevertheless in order to defeat,meets the threshold for s 44(1).69 As discussed at [83] and [84] above.[99] It follows that the High Court was correct to find Mr Sutton transferredPt Chevalier to the Trust in order to defeat Ms Bell's rights.Other issues[100] There are four, supplementary, issues which we can deal with relativelysuccinctly.Valuable consideration[101] The first is whether a debt-back gifting programme constitutes valuableconsideration. We do not consider it necessary to deal with this question because,as the High Court found,70 the good faith and valuable consideration requirements ofs 44(2) are conjunctive, and we do not think that the Trust received Pt Chevalier ingood faith because Mr Sutton's intent to defeat can be attributed to it.[102] [The following five paragraphs have been redacted.]The remedial discretion[103] Mr Sutton says the Court should exercise its remedial discretion to ringfencehis initial contribution to the purchase of Pt Chevalier and to postpone the vesting date.He does so on the basis of [redacted], and Ms Bell's knowledge of the effect oftransferring Pt Chevalier to the Trust. For the same reasons as we have already given,we put no weight on those factors.[104] Finally, Mr Sutton says that Ms Bell failed to discover documents, in particular,bank statements from 2004, and concealed the emails produced by consent inthe hearing before Walker J. The Judge held that, without seeing and hearing fromthe witnesses, she was not prepared to make a finding that Ms Bell had activelyconcealed relevant documents. Theoretically, there were alternative explanations.71[105] We are in the same position and for the same reasons do not consider itappropriate to make such a finding.70 Judgment under appeal, above n 3, at [103].71 Judgment under appeal, above n 3, at [119].[106] Accordingly, we decline to exercise our remedial discretion.[107] For all those reasons, the appeal is dismissed.Result[108] The appeal is dismissed.[109] The first appellant must pay the respondent costs for a standard appeal on aband A basis with usual disbursements.Addendum[110] For the purposes of publication, we have omitted parts of or all the originalparagraphs [5]–[7], [23(b)] and [102]–[107] of this judgment to comply with ss 11Bto 11D of the Family Courts Act 1980.Solicitors:Tompkins Wake, Auckland for First and Second AppellantsBelvedere Law, Auckland for Respondent