POROS v BAX [2021] NZCA 149

POROS v BAX [2021] NZCA 149 [30 April 2021]NOTE: PURSUANT TO S 35A OF THE PROPERTY (RELATIONSHIPS) ACT1976, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B,11C AND 11D OF THE FAMILY COURT ACT 1980.IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA685/2020[2021] NZCA 149BETWEEN SPYRIDON POROSApplicantAND KYLIE BRIDGET BAXFirst RespondentAND HELEN-GAYE BAX AND WILLIAMGRAHAM BAX AS TRUSTEES OF THEGOLDEYE TRUSTSecond RespondentsCourt: Miller and Goddard JJCounsel: J D Noble for ApplicantD A T Chambers QC for RespondentsJudgment:(On the papers)30 April 2021 at 11.00 amJUDGMENT OF THE COURTA The application for leave to appeal is declined.B Mr Poros must pay one set of costs to the respondents for a standardapplication on a band A basis, with usual disbursements.____________________________________________________________________REASONS OF THE COURT(Given by Goddard J)Background[1] The applicant (Mr Poros) and the first respondent (Ms Bax) met in 2003 andformed a relationship. They were married in August 2005. They separated inMay 2014, and their marriage was dissolved in 2016. Mr Poros brought proceedingsfor the division of their relationship property under the Property (Relationships) Act1976 (PRA) in the Family Court.[2] The second respondents are the trustees of the Goldeye Trust (the Trust),against which Mr Poros pursued a number of claims in the Family Court. The Trustwas established in 2000, before Ms Bax met Mr Poros. At the time of itsestablishment, the beneficiaries included Ms Bax; her children, grandchildren andremoter issue; her siblings; the issue of her siblings; her parents; and any spouse orpartner or former spouse or former partner of any of the beneficiaries. Other thanMs Bax, all beneficiaries were identified by class rather than by name.[3] Following a 10-day hearing in the Family Court, Judge Collin delivereda judgment determining Mr Poros' claims in May 2019.1 Each party enjoyeda measure of success on the various issues considered by the Court. However,Mr Poros' claims for further payments in respect of relationship property from Ms Baxor the Trust were ultimately unsuccessful. Mr Poros appealed to the High Court.His appeal was dismissed by Jagose J.2[4] Mr Poros sought leave from the High Court to appeal to this Court. Leave wasdeclined.31 Poros v Bax [2019] NZFC 874 [Family Court judgment].2 Poros v Bax [2020] NZHC 1602 [High Court judgment].3 Poros v Bax [2020] NZHC 2769.The application for leave to appeal to this Court[5] Mr Poros now seeks leave from this Court to bring a second appeal unders 60(2) of the Senior Courts Act 2016 and s 39B of the PRA.[6] The test for granting leave to bring a second appeal to this Court is wellestablished. The appeal must raise some question of law or fact capable of bona fideand serious argument in a case involving some interest, public or private, of sufficientimportance to outweigh the cost and delay of a further appeal. As this Court said inWaller v Hider:4Upon a second appeal this Court is not engaged in the general correction oferror. Its primary function is then to clarify the law and to determine whetherit has been properly construed and applied by the Court below. It is not everyalleged error of law that is of such importance, either generally or to theparties, as to justify further pursuit of litigation which has already been twiceconsidered and ruled upon by a Court.When the disputed matter is entirely or largely a question of fact the task ofthe applicant is harder. An issue of fact in a matter falling within thejurisdiction of an inferior Court will seldom be of public importance. It isbetter that we make no attempt to define the circumstances in which a factualcontest can be taken to have private importance but obviously it may do so ifthe amount at stake is very substantial or the decision reflects seriously on thecharacter or conduct of the would-be appellant or the judgment below hasspecial consequences (for example, bankruptcy) for the losing party. Eventhen, however, leave cannot be anticipated if the applicant is seeking to disturbconcurrent findings of fact in the lower Courts.[7] Mr Poros identifies seven proposed grounds of appeal. He says his appealraises a number of issues of general importance, and raises issues of sufficient privateimportance to him that it would be unjust if leave were declined. In particular, heemphasises that an application for an order adjudicating him bankrupt is pending inthe High Court, on the basis of costs orders made in the High Court. That applicationhas been adjourned pending determination of the relationship property proceedings.Mr Poros says that if this Court declines to hear his appeal, he is likely to beadjudicated bankrupt.4 Waller v Hider [1998] 1 NZLR 412 (CA) at 413.First ground of appeal — s 44 of the PRA[8] The first proposed ground of appeal is whether s 44 of the PRA applies toa trust requiring payment of monies disposed to the settlor/spouse. This ground ofappeal arises out of an advance made by the Trust to Ms Bax in December 2009.Mr William Bax, one of the trustees, confirmed in evidence that the money wasprovided by the Trust to Ms Bax in the form of a loan rather than a distribution in orderto protect Ms Bax's interests, and prevent Mr Poros from having any claim to themoney if the marriage ended. Mr Poros says this engages s 44 of the PRA, whichapplies where a disposition of property has been made in order to defeat the claim orrights of any person under the PRA. Mr Poros says this argument was advanced inthe Family Court, but appears to have been overlooked as it was not referred to in theFamily Court judgment. Accordingly, Mr Poros submits, the High Court decision onthis issue was effectively a decision of a court of first instance and he is entitled toan appeal.[9] It is difficult to envisage circumstances in which s 44 of the PRA will apply toa decision by the trustees of a trust to make an advance to a beneficiary, rather thana distribution, as making such an advance will not normally defeat any pre-existingclaim or rights of the partner of the beneficiary. The proposition that s 44 applies tosuch advances generally is not seriously arguable. Mr Poros has not identified anyspecial circumstances that might lead to a different result on the facts of this case.So this first ground is not capable of bona fide and serious argument.Second ground of appeal — valuation of debt owed by Ms Bax to the Trust[10] The second proposed ground of appeal concerns the valuation of the debt owedby Ms Bax to the Trust, which the Family Court took into account as a relationshipdebt at its book value of $2,306,100.5 The argument is not easy to follow, but itsgeneral thrust appears to be that because Ms Bax was unable to pay all (or part) of thisdebt, its market value was nil. So, Mr Poros says, the Courts below should not haveproceeded on the basis that he was responsible for half this debt, with that amount($1,153,050) offset against the amounts that the Trust was found to be liable to pay to5 Family Court judgment, above n 1, at [285(e)]. See also High Court judgment, above n 2,at [19]–[23].him. The result of this approach, he says, is that the Trust is effectively permitted torecover from him an amount of approximately $403,000 which it would not otherwisehave been able to recover from Ms Bax. This result, he submits, is inconsistent withs 20A of the PRA which provides that the Act does not affect the rights of creditors ofa spouse.[11] It is not arguable that s 20A of the PRA precludes the approach adopted in theCourts below. The purpose of s 20A is to protect the rights of creditors, not to conferadditional rights on the partner of the spouse who owes a debt vis-à-vis a creditor.The setting off of the share of the debt attributable to Mr Poros against the amountspayable by him to the Trust was plainly necessary to avoid injustice to the Trust andits beneficiaries as a result of the orders made under s 44 of the PRA and s 182 of theFamily Proceedings Act 1980 (FPA). It involved an exercise of discretion under thoseprovisions, in the overall circumstances of this case. The challenge to this approachinvolves a factual inquiry of a kind that is not generally suitable for a second appeal.Nor is it seriously arguable.Third ground of appeal — s 182 of the FPA[12] The third proposed ground concerns the conclusions reached by theFamily Court and the High Court in relation to the application of s 182 of the FPA totwo commercial properties purchased by the Trust during the marriage.The Family Court held that this acquisition was not a nuptial settlement for thepurposes of s 182, and even if it was the Court would not exercise its discretion unders 182 to make an award to Mr Poros.6 That result was upheld in the High Court.7[13] Mr Poros submits that the law in relation to s 182 of the FPA is uncertain, andthat "some direction" is needed from the higher courts. However we consider that theissues raised by Mr Poros in relation to the application of s 182 in this case do not raiseany questions of general principle. Rather, they are confined to the application ofwell-established principles to the particular facts of this case. And the conclusions6 Family Court judgment, above n 1, at [236]–[238].7 High Court judgment, above n 2, at [58]–[62].reached by the Courts below on this issue are in our view plainly correct, on anyplausible approach to s 182. This ground is not seriously arguable.Fourth, fifth, sixth and seventh grounds of appeal[14] The remaining grounds of appeal are described by Mr Poros as "factual errors"made by the Courts below. None of them raises any question or principle ofwider significance. It is not the function of this Court on a second appeal to carry outfine-grained reviews of concurrent factual findings made by the Courts below aboutmatters such as the quantification of advances made by the Trust to Ms Bax, or themanner in which certain portions of the funds advanced were applied. None of thearguments that Mr Poros says he wishes to pursue is so plainly meritorious that therewould be a miscarriage of justice if it were not considered (again) by this Court.[15] The complaints Mr Poros makes about the adequacy and timeliness ofdiscovery were addressed in the Courts below. The Family Court considered that theevidence before it was sufficient to enable the Court to determine the issues before it.8Those complaints do not raise any issue that requires consideration by this Court.[16] The strongest argument in favour of granting leave is that if leave is refused, itappears Mr Poros is likely to be adjudicated bankrupt. That underscores the privateimportance of the appeal to him. Potential bankruptcy was a factor specificallyreferred to by this Court in the context of leave in Waller v Hider. However there stillmust be some seriously arguable issue that has a real prospect of success, with theresult that bankruptcy would be avoided. None of the issues identified by Mr Poroscrosses that threshold. And there is some force in the submission made by Ms Baxthat as Mr Poros now resides in Greece, being adjudicated bankrupt in New Zealandis likely to have less of an impact on him than would be the case for a party living inNew Zealand.[17] Weighing all these matters, we do not consider that the private importance ofthe appeal to Mr Poros can justify the cost and delay of a further appeal on the basisof the seven proposed grounds.8 Family Court judgment, above n 1, at [8].Result[18] The application for leave to appeal is declined.[19] Mr Poros must pay one set of costs to the respondents for a standard applicationon a band A basis, with usual disbursements.Solicitors:Boyle Mathieson, Auckland for ApplicantTurner Hopkins, Auckland for Respondents