LOBB v RYAN [2023] NZHC 1297

LOBB v RYAN [2023] NZHC 1297 [29 May 2023]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2022-404-000441[2023] NZHC 1297BETWEEN STUART JAMES LOBBPlaintiffAND VERENA COLLEEN RYANDefendantHearing: 18 April 2023Appearances: K Kommu for the PlaintiffL Dixon for the DefendantJudgment: 29 May 2023JUDGMENT OF WALKER JThis judgment was delivered by me on 29 May 2023 at 4 pmPursuant to Rule 11.5 High Court RulesRegistrar/Deputy Registrar[1] The issue before this Court concerns the scope and application of s 4 of theProperty (Relationships) Act 1976 (the Act). Mr Lobb claims equitable contributionfrom his former wife, Ms Ryan. Ms Ryan argues that a claim to contribution (if any)must be made within the exclusive jurisdiction of the Family Court under the Act. Shehas filed a protest to jurisdiction. Mr Lobb's application before the Court seeks to setaside Ms Ryan's protest to jurisdiction. If I decline to set aside the protest, it followsthat I must dismiss the proceeding.1Background[2] The parties were married. They separated on or around 29 October 2016. Theirmarriage was dissolved on 29 August 2019.[3] During their marriage they entered into a loan agreement with Westpac for thepurpose of buying a residential property (Westpac Property Loan). They were eachjointly and severally liable for the full amount under the Westpac Property Loan whichwas secured by a mortgage over the acquired property. Subsequently, the partiessettled a trust (Lothbury Trust). Both were trustees, along with the Public Trust. Theproperty was transferred to the trustees. The security was re-registered but the trusteesdid not take over the principal liability for the Westpac Property Loan. That liabilityremained with the parties. The trustees entered into a Deed of Guarantee andIndemnity to Westpac in respect of Mr Lobb and Ms Ryan's obligations under theWestpac Property Loan and acknowledged that the mortgage on the property securedthe trustees' liability under the Deed of Guarantee and Indemnity.[4] There is no dispute that the Westpac Property Loan was a relationship debtuntil its repayment.[5] Over the next decade or so, the credit limit under the Westpac Property Loanincreased. Repayments were varied to interest only payments. On 25 February 2015,the Public Trust retired as trustee of the Lothbury Trust and was replaced by LockhartTrustee Services No. 56 Ltd (Lockhart). The trustees of the Lothbury Trust provided1 High Court Rules 2016, r 5.49.a guarantee and indemnity to Westpac in relation to Mr Lobb and Ms Ryan'sobligations under the Westpac Property Loan.[6] By late April or early May 2015, the Westpac lending facility had beenrestructured into a two-part facility of $150,000 and $1,100,000. On 22 May 2015,the mortgage was discharged and replaced with a new mortgage (Instrument9977107.3) in favour of Westpac.[7] Following separation and during his occupation of the property, Mr Lobb madeinterest payments towards the Westpac Property Loan. Ms Ryan did not make anypayments. The Westpac Property Loan fell into arrears. Westpac served a PropertyLaw Act 2007 notice. In August 2019, the parties' marriage was dissolved.[8] On or about 27 July 2020, Mr Lobb, Ms Ryan and Lockhart were removed astrustees of the Lothbury Trust and a receiver was appointed.2[9] Mr Lobb took steps to refinance and repay all amounts due and owing underthe Westpac Property Loan. His evidence is that the sum paid by him, including allrefinancing costs and legal fees, was $1,505,963.75 (Repaid Sum). He says that thiswas to avoid a mortgagee sale.[10] As explained by Mr Lobb, the refinancing involved the following:(a) On or about 26 August 2020, WAG Trustees (2020) Limited (WTL)was incorporated to be the trustee of the WAG Family Trust, of whichMr Lobb is a beneficiary. Mr Lobb's father, Warwick Lobb, is thedirector and shareholder of WTL.(b) On or about 1 September 2020, WTL was appointed as trustee of theWAG Family Trust.(c) On or about the same date, WTL took the title of two freehold propertiesof the WAG Family Trust, being recorded as a major transaction.2 Lockhart Trustee Services No. 56 Limited v Ryan [2020] NZHC 1823.(d) WTL, as trustee of the WAG Family Trust, borrowed funds fromNorfolk Mortgage Trust secured against the two freehold trustproperties of the WAG Family Trust, and with Mr Lobb being aguarantor in his personal capacity.(e) WTL then lent Mr Lobb sufficient funds to repay all amounts claimedby Westpac as due and owing under the property loan agreement and toacquire from Westpac the interest as mortgagee.(f) Once Mr Lobb was the registered mortgagee of the property, WTLwould then accept from Mr Lobb a transfer of his interest as mortgagee.[11] As a consequence of the refinancing, all sums owed to Westpac under theWestpac Property Loan were paid, the obligations of Mr Lobb and Ms Ryan to Westpacfell away and WTL became the registered mortgagee of the property, having acquiredthe security interest.The Proceedings[12] Mr Lobb issued proceedings on 25 March 2022. The claim is for equitablecontribution from Ms Ryan towards the refinancing of the Westpac Property Loan.Mr Lobb relevantly pleads:(a) The defendant owed a common and/or joint obligation with the plaintiffas joint borrowers to pay at least half of the sums owing under theWestpac Property Loan.(b) The plaintiff has paid a disproportionate share of this commonobligation by paying all sums owing, being the Repaid Sum and all themonthly costs of this joint debt since April 2016.[13] The prayer for relief seeks half of the Repaid Sum (or a higher proportion asthe Court decides is fair) along with a sum representing half of the payments made byMr Lobb under the Westpac Property Loan between April 2016 and September 2020(or such higher proportion as the Court decides is fair).[14] Ms Ryan's protest to jurisdiction contends that:(a) The money owed under the Westpac Property Loan for which theplaintiff and the defendant were jointly liable was a relationship debt asdefined by s 20(1) of the Act;(b) Section 4 of the Act provides that the Act is a code which appliesinstead of all the rules and presumptions of the common law and equityto transactions between spouses in respect of property; and(c) Section 22 of the Act provides that every application under the Act mustbe heard and determined in a Family Court.3[15] Mr Lobb has applied to set aside the appearance.4 There are three main limbsto his argument:(a) The monies for which the plaintiff seeks equitable contribution are notrelationship property debts under s 20(1) of the Act;(b) The refinancing and subsequent Repaid Sum paid by Mr Lobb isentirely separate to the Property Loan Agreement, though the latterprovides factual context as to why the refinancing was incurred; and(c) Even if the refinancing and Repaid Sum is considered a relationshipdebt or transaction between the parties (which is not accepted) the claimis still within the jurisdiction of the High Court.Issues[16] The essential issues for consideration are:(a) What is the scope and application of s 4 of the Act?3 That application was made under r 5.49 of the High Court Rules 2016.4 Rule 5.49(5) of the High Court Rules 2016. Notice of interlocutory application to set aside thedefendant's protest to jurisdiction dated 3 November 2022.(b) Is there a transaction which engages s 4 of the Act?(c) Is the doctrine of equitable contribution abolished by s 4(1) of the Actand if so, what is the consequence on the question of jurisdiction.[17] Each issue has a number of sub-issues.What is the effect of the judgment in Ryan v Lobb?[18] An antecedent matter arises. The day after Mr Lobb's submissions were filed,Hinton J delivered a decision in a separate proceeding issued by Ms Ryan againstMr Lobb.5 This concerned the resettlement of the Lothbury Trust and determined theinterpretation of the resettlement clause in the trust deed. It addressed howcontributions should be interpreted under the resettlement clause in the trust deed.[19] In that proceeding, Ms Ryan volunteered that the only debt to be taken intoaccount in a resettlement is a $1.4 million debt owed to Westpac at the date ofrepayment by Mr Lobb. (It was voluntary because the Westpac Property Loan is nota liability of the trustees. It is owed by Mr Lobb and Ms Ryan personally.)[20] Relevantly for present purposes, Hinton J took the $1.4 million debt to Westpacunder the Westpac Property Loan into account as a liability of the Lothbury Trust,made orders to sell the property and determined that one half of net sale proceeds less$700,000 be resettled on Ms Ryan's new trust. She stated:6Ms Ryan accepts that a debt of $1.4m (that is a deduction of $700,000) shouldbe taken into account in a resettlement under cl 2.5(3), albeit that the trusteesare not principal debtors. Mr Lobb says that the debt now owed to his father'strust is significantly larger than $1.4m. So far as I am aware no furtheradvances have been approved by the trust/receiver and Mr Lobb has beenliable for interest payments. The mortgage could therefore only legitimatelysecure $1.4m. In any event, only $700,000 is to be deducted for purposes ofthe resettlement.5 Ryan v Lobb [2023] NZHC 689.6 At [53].[21] The effect appears to be that Ms Ryan has or at least will contribute $700,000in respect of the amount due to Westpac as at the date of the repayment by Mr Lobbonce the property is sold.7[22] Mr Dixon suggested in a memorandum filed with the Court prior to the hearingthat Hinton J's decision rendered the equitable contribution claim otiose. In oralsubmissions, Mr Dixon walked back from this proposition. He acknowledged that thedecision does not go directly to jurisdiction but submits that it bears on the outcomeof the claims in that the parties' joint liability under the Westpac Property Loan hasbeen quantified at $1.4 million. First, to the extent that Mr Lobb seeks more than$700,000 from Ms Ryan, this proceeding is a collateral attack on the judgment.Secondly and relatedly, Hinton J's judgment also dealt with payments made by MrLobb during his occupation of the property including mortgage and interest costs.Thirdly, it relates to matters properly relevant to the equitable jurisdiction.[23] Mr Kommu acknowledges only that there is some overlap between the issuesdecided by Hinton J and this substantive claim which may necessitate amendment tothe statement of claim. However, he contends the overlap is limited to quantum andthe equitable contribution claim is not extinguished. He submits that Hinton Jcrystallised the loan obligation only but not the refinancing quantum, that the refinancewas designed to avoid the sale of the property and to preserve the property for theLothbury Trust and the equitable contribution claim includes costs and interest whichare incidents of the refinancing of the Repaid Sum rather than the original borrowing.8[24] Clearly the judgment of Hinton J is material to the underlying substantiveclaim. I agree that it does not mean it is necessarily relevant to the question ofjurisdiction, as Mr Dixon concedes. I therefore put it to one side.7 The judgment of Hinton J states that the Westpac debt was redeemed or refinanced by a trustsettled by Mr Lobb Senior. Mr Lobb's evidence in the proceeding before the Court is that he paidWestpac.8 There was a faint suggestion by Mr Kommu that once the sale of the property has taken place thequantum claim may be increased although how and on what basis was not articulated. Mr Kommualso advised the Court that his instructions are that Mr Lobb is considering an appeal of thejudgment. Neither is relevant to the issues this Court is to determine.Arguments[25] Mr Kommu's submissions characterised the claim against Ms Ryan as focusedon the refinancing of the Westpac Property Loan rather than the loan itself. Hesuggests that the loan merely provides context as to why the refinancing wasundertaken. The Repaid Sum is not a relationship debt and not a transaction betweenthe parties which engages s 4 of the Act.[26] As a fallback, he submits that even if the sum repaid by Mr Lobb is considereda relationship debt or transaction between the parties which engages s 4 of the Act, theHigh Court still has jurisdiction because there is no application under the Act. Herelies on cases in which various equitable, contractual and statutory causes of actionhave been permitted in the High Court between spouses.9[27] Mr Lobb's motivation in invoking the jurisdiction of the High Court may bethat any claim he may have under the Act is now time barred. While that may be so,there is provision to obtain leave from the Family Court where circumstances warrantand any time bar cannot restore jurisdiction where there is none.[28] Mr Dixon submits that s 4(1) abolishes the doctrine of equitable contribution.Mr Lobb's claims relate to a property transaction between spouses in the form ofdischarging obligations under the Westpac Property Loan so the Act applies instead ofthe equitable rules. Thus, Mr Lobb's only remedy (if any) is to obtain orders underthe Act. That claim must originate in the Family Court. He argues that to allow theplaintiff to obtain contribution by invoking the High Court's equitable jurisdictioncontravenes not only the text of s 4(1) of the Act but subverts the Act's scheme andpolicy.[29] Mr Dixon's principal argument does not depend on this Court finding thatearlier decisions of the High Court were wrongly decided. However, he argues as afall-back that they are inconsistent with the Court of Appeal decision in Kerridge vKerridge.10 His first submission is that because s 4 is substantively engaged, no claim9 Mosaed v Mosaed [1997] NZFLR 97 (CA).; Kake v Napier [2022] NZHC 2395; Lung v Li [2022]NZHC 3074; Official Assignee v Wilkie [2016] NZDC 9879.10 Kerridge v Kerridge [2009] NZCA 14, [2009] 2 NZLR 763.to equitable contribution subsists, being supplanted by the Act. Consequently, the onlyremedy which Mr Lobb could seek is an order under the Act.11 Pressed by the Courtto address whether that proposition fell within the bounds of a jurisdiction argumentMr Dixon hinted at an expansive view of jurisdiction. He submitted that jurisdictionmeans what a Court has authority to do. If there is no substantive claim as it has to bemade under the Act rather than in equity, and any claim under the Act has to be in theFamily Court, then there is no jurisdiction.The legal principles[30] Rule 5.49 of the High Court Rules 2016 relevantly provides:5.49 Appearance and objection to jurisdiction(1) A defendant who objects to the jurisdiction of the court to hear anddetermine the proceeding may, within the time allowed for filing astatement of defence and instead of so doing, file and serve anappearance stating the defendant's objection and the grounds for it.(2) The filing and serving of an appearance does not operate as asubmission to the jurisdiction of the court.(5) At any time after an appearance has been filed, the plaintiff may applyto the court by interlocutory application to set aside the appearance.(6) The court hearing an application under subclause (3) or (5) must,—(a) if it is satisfied that it has no jurisdiction to hear and determinethe proceeding, dismiss the proceeding; and(b) if it does not dismiss the proceeding under paragraph (a), setaside the appearance.[31] Rule 5.49 is to be given its ordinary meaning. The Supreme Court observed inCommissioner of Inland Revenue v Redcliffe Forestry Venture Ltd that the Court belowhad adopted an overly restrictive view of the scope of what can be addressed in anobjection to jurisdiction.12 The r 5.49 procedure is applicable in wider situations thanonly where the matter is extraterritorial, when by law the case can only be determinedby a different court or authority, and where the operation of a contractual term or11 It is not disputed that there is jurisdiction to treat relationship debts which have been repaid post-separation as qualifying contributions under the Act: Monks v Monks [2006] NZFLR 161 (HC).12 Commissioner of Inland Revenue v Redcliffe Forestry Venture Ltd [2012] NZSC 94 at [25].failure to comply with a statutory requirement precludes the High Court havingjurisdiction. The Court referred at [25] to the classic expression of the meaning ofjurisdiction set out by Diplock LJ in Garthwaite v Garthwaite:13In its narrow and strict sense, the "jurisdiction" of a validly constituted courtconnotes the limits which are imposed upon its power to hear and determineissues between persons seeking to avail themselves of its process by reference(1) to the subject-matter of the issue or (2) to the persons between whom theissue is joined or (3) to the kind of relief sought, or to any combination ofthese factors.[32] And the remarks of Lord Scott in Tehrani v Secretary of State for the HomeDepartment:14When issues are raised as to whether or not a court of law has jurisdiction todeal with a particular matter brought before it, it is necessary to be clear aboutwhat is meant by "jurisdiction". In its strict sense the "jurisdiction" of a courtrefers to the matters that the court is competent to deal with. Courts createdby statute are competent to deal with matters that the statute creating themempowered them to deal with. The jurisdiction of these courts may beexpressly or impliedly limited by the statute creating them or by rules of courtmade under statutory authority. Courts whose jurisdiction is not statutory butinherent, too, may have jurisdictional limits imposed on them by rules ofcourt. But whether or not a court has jurisdictional limits (in the strict sense)there are often rules of practice, some produced by long-standing judicialauthority, which place limits on the sort of cases that it would be proper forthe court to deal with or on the relief that it would be proper for the court togrant.[33] This tends to support Mr Dixon's more expansive approach to a jurisdictionalchallenge.Discussion[34] Section 22 of the Act provides that every application under the Act must beheard and determined in the Family Court.15 A long-standing line of authority has heldthat s 22 applies only to cases in which parties are seeking orders under s 25(1) of theAct and the exclusive jurisdiction of the Family Court is limited to such applications.1613 Garthwaite v Garthwaite [1964] P 356 at 387.14 Tehrani v Secretary of State for the Home Department [2006] UKHL 47, [2007] 1 AC 521 at [66].15 Section 11 of the Family Courts Act 1908 also provides that a Family Court shall hear anddetermine all such proceedings under or by virtue of any of the provisions of the Property(Relationships) Act 1976.16 Beginning with Jew v Jew [2003] 1 NZLR 708; Palmer v Official Assignee [2011] 1 NZLR 846;Kake v Napier, above n 8; Houston-Quay v Henson [2013] NZFC 658 (2013); Lung v Liu, aboven 8; Nation v Nation [2005] 3 NZLR 46 (CA); and AB v EF [2012] NZHC 722.[35] In Kake v Napier,17 the High Court allowed an appeal from a District Courtdecision that a claim against a de facto partner for breach of contract was within theexclusive jurisdiction of the Family Court. Justice Campbell held that though thecontract breach was a transaction in respect of property, meaning that the substantiverules of the Act may have to be applied, it does not mean that the Family Court hadexclusive or any jurisdiction over the claim. He referred to and applied the line ofauthority commencing with Jew v Jew.18 He said that s 4 of the Act deals withsubstantive law, not with jurisdiction. Section 4(4) contemplates that proceedingsraising questions relating to relationship property may be commenced and determinedin courts other than the Family Court. As long as the proceeding is not an applicationunder the Act, that other court will have jurisdiction but will have to determine thequestion as if it was raised in a proceeding under the Act.19[36] Similarly, in a recent jurisdiction challenge to a claim under s 339 of theProperty Law Act 2007 between former spouses, the High Court recognised there weredivergent approaches but preferred the line of cases holding that s 4 does not excludethe jurisdiction of the High Court. It only requires the Act be applied where anyquestion relating to relationship property arises.20[37] The scope and application of s 4 of the Act is the crux of this application. Itrelevantly reads:4 Act a code(1) This Act applies instead of the rules and presumptions of the commonlaw and of equity to the extent that they apply—(a) to transactions between spouses or partners in respect ofproperty; and(b) in cases for which this Act provides, to transactions—(i) between both spouses or partners and third persons;and(ii) between either spouse or partner and third persons.17 Kake v Napier, above n 8.18 Jew v Jew, above n 15.19 At [18].20 Lung v Liu, above n 8.(2) Subsection (1) does not apply where this Act expressly provides to thecontrary (such as in subsection (5)).(3) Without limiting the generality of subsection (1),—(a) the presumption of advancement does not apply betweenhusband and wife:(b) the presumption of resulting trust does not apply betweenspouses, civil union partners, or de facto partners:(c) the presumption that the use of a wife's income by herhusband with her consent during the marriage is a gift doesnot apply between husband and wife.(4) Where, in proceedings that are not proceedings under this Act, anyquestion relating to relationship property arises between spouses orpartners, or between either or both of them and any other person, thequestion must be decided as if it had been raised in proceedings underthis Act.[38] The intention of s 4 is to cause the Act to predominate over all other legislation(and equitable and common law rules and presumptions) which might otherwise applyto the extent that issues are dealt with by the Act.21 It does not mean there is no roomfor common law or equitable remedies between spouses. I respectfully agree withCampbell J's view in Kake that this provision deals with substantive law. Applicationsmade under the Act are within the exclusive jurisdiction of the Family Court by virtueof s 22 of the Act, but s 22 is directed only to an application under the Act. It does notin its terms cover every proceeding before a court which may involve questions underthe Act. A proceeding which is not an application under the Act but which does raisea question under the Act is expressly envisaged in s 4(4).22[39] The question then is whether the fact that Mr Lobb's claim is not, in form, anapplication under the Act is determinative or whether the substance of Mr Lobb'sclaim is to be considered in the light of the substitution of the Act in place of the rulesand presumptions of the common law and of equity.21 Official Assignee v Williams [1999] 3 NZLR 427 (CA) at [20].22 Palmer v Official Assignee [2011] 1 NZLR 846 (HC). This involved an application under s 58 ofthe Insolvency Act 1967 which is not an application under the Property (Relationships) Act 1976and cannot be made in the Family Court.[40] Mr Dixon relies on Burt v Yiannakis.23 That was a case about substantivejurisdiction rather than a challenge to procedural jurisdiction. One of the key issueswas whether the New Zealand Court had jurisdiction to consider claims in equityrelating to overseas immovables in the property relationship context. Family Courtproceedings had been transferred to the High Court. One party then commenced aHigh Court proceeding advancing various claims based in equity in relation toproperties overseas—constructive trust, estoppel and resulting trust. The counterpartyapplied to strike out those claims relying on ss 4(1) and 7(1) of the Act. Thatapplication was earlier dismissed on the basis it was at least arguable that the Courthas jurisdiction. In delivering judgment following a substantive trial, Asher J held:(a) If equitable claims involve property transactions between spouses orpartners, the Act applies as a code.(b) "Transaction" is a word with broad meaning and means all exchangesor interactions concerning property between spouses and partners thathave material consequences, or would have if implemented. It also hasthe wider meaning of a property related event that occurs betweenpartners during a qualifying relationship.24(c) Section 4(1) is not limited to relationship property but applies to"property" generally and can be seen as deliberately drafted broadly tocover all or any claims that arise between spouses or partners.25(d) Section 4(3) operates to give examples of some equitable presumptionsthat do not apply but it is highly unlikely that the legislature would haveintended some equitable doctrines to apply, but others to be excluded.26(e) Section 4 functions as a jurisdictional bar in respect to claims broughtin the common law or equity that relate to foreign immovables.2723 Burt v Yiannakis [2015] NZHC 1174.24 At [29].25 At [27].26 At [34].27 At [48].(f) The equity proceeding proposes a back door avenue for a party to arelationship property claim to obtain financial compensation fordealings with a foreign immovable. It would wrench the purpose andtext of the Act to allow claims against foreign immovables by the backdoor. The intention of the Act was to create a complete regime for allrelationship property claims with an exception in relation to foreignimmovables.28[41] I agree with Mr Kommu that Burt primarily deals with the issue of immovableforeign property which is not on all fours. Nonetheless, the principles set out havesome application to the issues before the Court.Qualifying transactions[42] The Act is the principal source of law for determining property disputesbetween spouses and de facto partners, not an exhaustive code.29 Section 4 does notoperate to bar all equitable claims between spouses or partners, only those applyingto:(a) transactions between spouses or partners in respect of property; and(b) in cases for which this Act provides, to transactions between both andthird persons and between either spouse or partner and third persons.[43] The Court of Appeal has previously held that the High Court has jurisdictionto hear proceedings brought in equity. In Mosaed v Mosaed,30 the wife claimed herhusband had breached his fiduciary obligations when he failed to disclose receipt ofan offer to purchase their co-owned property for a price double that recorded in aconsent order dividing the relationship property. Section 4 was raised at trial as a barto the recovery of profits, not as a jurisdictional challenge in its narrowest sense. TheCourt of Appeal rejected an argument that s 4 precluded an account of profits for28 At [74] and [78].29 RL Fisher (ed) Fisher on Matrimonial and Relationship Property (online ed, Lexis Nexis) at[1.23].30 Mosaed v Mosaed, above n 8.breach of fiduciary obligation. Holding that the breach in question was an informationfailure and not a transaction between the husband and wife in respect of property,Richardson P for the Court said that "[s 4] is not directed to a breach of an equitableobligation of that kind resting on all fiduciaries." And:31In terms of s 4(1) the Act has effect in place of the rules and provisions of thecommon law and of equity to the extent, and only to the extent that they applyto transactions between husband and wife in respect of property. Its concernis with the identification and classification of interests in property, their valueand division. Accounting for a profit arising from breach of fiduciary duty isa different inquiry from the just division of matrimonial property.[44] Mosaed was approved and applied by the Court of Appeal in Kerridge vKerridge.32 The wife sued the husband and trustees after the husband transferred thefamily home to a trust without her knowledge or agreement. One of the issues waswhether s 4 of the Act barred the proceedings. At first instance, the Associate Judgedeclined to strike out the relevant causes of action. He applied Mosaed and said thatthe substance of the claimed wrong and the remedy sought are not matters that the Actprovides for. It was only in the circumstance where the Act contains provisions thatcover the same ground as the rules and presumptions of common law and equity, thatit can displace them. On an application for review, Heath J upheld the first decisionbut relied on s 51 of the Act which relates to tortious claims between spouses whichhe said had primacy. He did not traverse the application of s 4.[45] On appeal, the Court upheld the result for different reasons. It held that s 4 didnot bar the wife from maintaining the proceedings in the High Court as the exchangesbetween the spouses on which the claims were based were not collectively atransaction between them and the tortious claims did not hinge upon an allegedtransaction between the parties. The Court said:33Mrs Kerridge's claims of deceit, negligent misstatement and breach of duty ofcare, like Mrs Mosaed's equitable claim for accounting of profits, is not in thecategory of property transactions caught by s 4 and is therefore not barred bythe PRA.31 At 102.32 Kerridge v Kerridge, above n 9.33 At [53].[46] Mr Lobb's claim for equitable contribution can be distinguished from thesecases as I am satisfied there is a qualifying transaction under s 4(1). I set out myreasons.[47] First, the Westpac Property Loan was a debt incurred by the parties jointly. Itwas a relationship debt within the meaning of s 20 of the Act. It was also a transactionas that term is understood in s 4 of the Act.34[48] Secondly, I do not accept Mr Kommu's submission that the only transactionbefore the Court is the separate repayment which does not fall within s 4(1).35Mr Lobb is making a claim for equitable contribution. Contribution is a doctrine ofboth equity and the common law under which parties who share a coordinate liabilityare entitled to seek contribution, each from the other or others, for any payment orother detriment incurred in meeting that liability, so that the burden is shared properlyamong those liable for it.36[49] The essence of the equitable duty to contribute then is that the liabilities of theparties are coordinate. In other words, that there is some obligation which both, or all,share and in respect of which a payment by one will relieve the other, or others, inwhole or in part from a liability which they could otherwise be called on to meet.37[50] Thirdly, but relatedly, in his statement of claim, Mr Lobb claims Ms Ryan isliable to repay Mr Lobb because they were jointly liable under the Westpac PropertyLoan. The basis on which a claim to contribution exists must hinge on theextinguishing of the Westpac Property Loan because only then would there becoordinate liability required for a claim to contribution. Ms Ryan is not a party to therefinancing which was a unilateral action by Mr Lobb. As Mr Dixon put it, the onlyreason why Ms Ryan could conceivably be in the picture is because of the connectionbetween the repayment and discharge of the liability of both Mr Lobb and Ms Ryan35 Mr Lobb also deposes that the refinancing is a separate transaction to the Westpac Property Loan.36 Laws of New Zealand, Equity (online ed, Lexis Nexis) at [84]; Albion Insurance Co Ltd vGovernment Insurance Office (NSW) (1969) 121 CLR 342 (HCA) at 350.37 At [85].under the Westpac Property Loan.38 Mr Kommu's submission that the claim againstMs Ryan is focused on the refinancing or Repaid Sum recasts the pleading. It is alsoartificial to suggest that the equitable contribution claim only falls out of the repaymentrather than the original loan (relationship debt).[51] Fourthly, as the relevant transaction for the purposes of a claim to contributionis the extinguishing of the parties' liability to Westpac, there is a transaction fallingwithin either s 4(1)(a) or s 4(1)(b)(ii). It could fall under the latter because it can becharacterised as a transaction by one spouse and a third party in respect of relationshipproperty. The Act provides for these cases since payment of debts post separation forparties jointly responsible is a qualifying contribution under s 18B. Payment may betaken into account in the division of property under s 25 of the Act.39[52] The Act therefore takes the place of the rules and principles of equitablecontribution. As Mr Lobb's claim (on the current pleading at least) is one that ceasesto exist due to the operation of s 4(1), I find that this Court does not have jurisdictionto grant the remedy he seeks. Relying on the wider view on jurisdiction under r 5.49set out in Commissioner of Inland Revenue v Redcliffe Forestry Venture Ltd, a plaintiffwho seeks equitable contribution from their spouse in these circumstances can onlydo so by making an application under the Act, rather than in the equitable jurisdiction.[53] I am satisfied that the Act covers the same ground as the rules and presumptionsof equitable contribution on which Mr Lobb relies. The remedy is one which theFamily Court is not only empowered to make under the Act but, according to thelegislative regime, may only be brought under the Act because the Act takes the placeof the rules and principles of equitable contribution.40 An equitable claim forcontribution is not available but has been displaced by s 4 of the Act in respect ofqualifying transactions between spouses or de facto partners.38 I note that Mr Dixon relies on the characterisation that this involves a relationship debt rather thanthe submission that there is no tenable claim because there is otherwise no coordinate liability.39 Monks v Monks, above n 10; and Johnston v Johnston (1998) FRNZ 142 (CA) at 145–146. InJohnston, the Court said "The deduction of debt is part of the overall exercise of valuation, anexercise which is subject to discretionary adjustment under s 2(2) The fact that they may havebeen paid after separation cannot, in logic or in fairness, prohibit such an exercise. The schemeof the Act does not dictate otherwise."40 Flavell v Chote [2021] NZHC 2262 at [35].[54] I do not read s 4(4) of the Act as creating any tension. At first blush thisprovision supports the view that the Family Court's jurisdiction is exclusive onlywhere there is an application under the Act. However, I accept the submission that,purposively construed, it is intended to ensure that inter-spousal rights are determinedin accordance with the Act where they may arise in ordinary civil proceedings, not tocircumvent the jurisdiction of the Family Court where the substance of the claim isone that has been subsumed by the Act and the Family Court is empowered to dealwith.41 This interpretation does not undermine 4(4) of the Act.[55] Finally, none of the cases cited to the Court are on all fours. In the line of casesstarting with Jew v Jew where it has been found the High Court has jurisdiction to hearcases that involve relationship property, the applications were in respect of third partyproperty,42 brought under another statutory provision,43 pleaded causes of actions thatwere not in substance covered under the Act,44 or in circumstances where it wasquestionable that a qualifying relationship existed.45[56] In Kake, Campbell J expressly (and with respect correctly) noted that thebreach of contract claim was not one which could be converted to an application underthe Act.46 While he also considered that jurisdiction does not turn on whether there isa transaction in respect of property but whether it is an application under the Act, Iconsider that the analysis permits an "in substance" view to be taken.[57] Similarly, Lung is distinguishable since the remedy sought by the applicant wasone provided by statute rather than a common law or equitable rule.47 In Kerridgethere was no transaction engaging s 4.4841 See Official Assignee v Williams, above n 21, where it was held that the High Court had jurisdictionto hear the Official Assignee's application to set aside a gift from the bankrupt husband to hisspouse but it would be decided under the Matrimonial Property Act 1976 rather than theInsolvency Act 1967.42 Jew v Jew, above n 20.43 Palmer v Official Assignee, above n 20; Lung v Liu, above n 8.44 AB v EF, above n 20.45 Houston-Key v Henson, above n 20; Kake v Napier, above n 8.46 Kake v Napier, above n 8, at [23]. The Family Court is a creature of stature and has jurisdictiononly over those matters conferred by statute.47 The application was made under the Property Law Act 2007.48 Kerridge v Kerridge, above n 9.Result[58] Accordingly, I decline to set aside the protest to jurisdiction. It follows that Imust dismiss the proceeding.[59] In the ordinary course, Ms Ryan is entitled to costs on a 2B basis. Agreementon costs is encouraged. If the parties cannot agree costs, they may file memoranda ofno more than 3 pages including schedules no later than 14 working days after the dateof this judgment. Any memorandum in response to be filed and served within a furtherseven days and any reply memorandum within three days thereafter.............................................................Walker J