NGAVAEVAE v HARRISON [2017] NZHC 2788

NGAVAEVAE v HARRISON [2017] NZHC 2788 [14 November 2017]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2017-404-001795[2017] NZHC 2788UNDER the Law Transfer Act 1952 and theProperty (Relationships) Act 1976IN THE MATTER of an application under s 145A(3) of theLand Transfer Act 1952BETWEEN TANGIMETUA TERUAPUKANOOSANTORIUM KAPUMARENGAVAEVAEPlaintiffAND GUY WILLIAM HARRISONDefendantHearing: 2 November 2017Appearances: K Wiseman for the ApplicantR Evans for the RespondentJudgment: 14 November 2017JUDGMENT OF ASSOCIATE JUDGE SARGISSONThis judgment was delivered by me on 14 November 2017 at 3.30 p.m.pursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy RegistrarDate.......................................Solicitors:Vodanovich Law Ltd, AucklandRhonda G. Evans, AucklandK Wiseman, AucklandIntroduction[1] The applicant, Ms Ngavaevae, seeks an order sustaining her Notice of Claimregistered over a property at 38 Terry St, Blockhouse Bay. Though Ms Ngavaevae haslived there some 17 years, the property is registered solely in the name ofMr Harrison, the respondent.[2] Ms Ngavaevae's primary argument is that she and Mr Harrison were for manyyears in a de facto relationship — albeit an unconventional arrangement where MrHarrison would only stay with her at the property two nights a week. She contendsshe has an arguable interest in the property under the Property (Relationships) Act1976 ("Act").[3] Mr Harrison accepts they had brief sexual liaisons; after all, they have twodaughters together. But he denies any de facto relationship, pointing to the fact thathe had two consecutive marriages with other women during the period in question.Any ongoing involvement with Ms Ngavaevae he puts down to a desire to stayinvolved in the lives of their two daughters.[4] For the reasons that follow, I am satisfied that Ms Ngavaevae has a reasonablyarguable interest in the property. I also consider the interests of justice favoursustaining the Notice pending a full trial of the substantive issues.Legal framework[5] I begin with the law.[6] A Notice of Claim is lodged on a property pursuant to s 42 of the Act. Theprovision is designed for the protection of partners' rights, and it has the same effectas a caveat lodged under s 137 of the Land Transfer Act 1951. Ms Ngavaevaeregistered a Notice of Claim on 28 April 2017.[7] An application to lapse a Notice is made under s 145A of the Land TransferAct. After Mr Harrison took this step, Ms Ngavaevae filed the present application on3 August 2017 to sustain the Notice, and an interim order was made to sustain thecaveat.[8] In considering whether to grant her application, the court must determinewhether Ms Ngavaevae has a reasonably arguable case for the interest claimed. Shehas the onus.1 Her case essentially turns on whether it is arguable that the parties werein a de facto relationship after 1 February 2002 — whether continuing an existingrelationship, or beginning such a relationship after this date.2[9] That contention has three components. She will need to satisfy the court shehas a reasonably arguable case that:(a) Her account of the facts is correct, or at least materially so;(b) Assuming its correctness, the kind of (unconventional) relationship shedescribes is such that would fall within the scope of the meaning of "defacto relationship" in the Act;(c) Her claim is not time-barred.[10] Even once that onus is satisfied, the Court retains discretion to remove theNotice, but the discretion is to be exercised parsimoniously.3 The Court would firstneed to be completely satisfied that Ms Ngavaevae's legitimate interests would not beprejudiced by a lapse.4Is her factual account reasonably arguable?[11] The factual disputes between the two parties run deep. It is not possible on thelimited evidence before me, and without the benefit of cross-examination, to makedefinitive findings on many of these differences.1 Castle Hill Run Ltd v NZI Finance Ltd [1985] 2 NZLR 104 (CA), (1986) 1 NZBLC 102,307 at106; Doyle v Doyle (No 2) [2004] NZFLR 43 (CA).2 Property (Relationships) Act 1976, s 4C.3 Marshall v Bourneville [2013] NZCA 271, [2013] 3 NZLR 766 at 775.4 Pacific Holmes Ltd (in receivership) v Consolidated Joineries Ltd [1996] 2 NZLR 652 (CA) at656.[12] For present purposes, it is in any case not necessary to do so. The sole questionis whether there is enough for me to be satisfied that her factual narrative is at leastreasonable arguable.The nature of the parties' relationship[13] The largest areas of contention concern the different understandings about thenature of the parties' relationship. It is common ground that the parties met in 1988,and started dating soon after. But the parties agree on little else.[14] I begin with Ms Ngavaevae's account.[15] In brief, she says they were in a de facto relationship from 1988 until 2007,apart from a brief interruption between 1991 and 1992. Prior to this interregnum, shesays they lived together as a de facto couple at Mr Harrison's property atPremier Avenue, Point Chevalier.[16] Between around 1992 and 2007, Ms Ngavaevae deposes they settled into aroutine as a de facto couple which she describes as follows:(a) Mr Harrison would visit her and the two girls at their place (first inKingsland and then at Terry Street) all day Saturday and on Tuesdayevenings.(b) Invariably on these occasions he would stay over in her bed until themorning and they were intimate during these times. Indeed, she saysthat he usually brought a change of clothes with him, and kept toiletriesat her home.(c) They would celebrate Christmas with both families; celebrate birthdaystogether and other important family events; attend the girls' sports,school events, and occasionally church; and even go to dinner with hiswork colleagues from time to time. She says family and friendsrecognized their relationship. She would sometimes be introduced byMr Harrison as his "missus".[17] Ms Ngavaevae acknowledges this was an unconventional arrangement, whichshe puts down to his "womanizing". It would seem she was unaware where he wouldstay on the other nights, at least after he sold the Premier Ave property in 1993.[18] Her words describe the arrangement best: "I accepted he spent time with otherwomen but I always thought we were his family and he would come back to us".Counsel for Mr Harrison interpreted this as an admission that he had in some senseleft the relationship behind. A more nuanced reading, however, is that there was aconsistent routine that "worked for them", and still involved them sharing the intimacyof a married couple and operating as a family.[19] The position changed in or around 2007, she continues, when she found outthat Mr Harrison had a little boy from another relationship. She suggests it was at thispoint she realised there was another family in Mr Harrison's life. The relationshipended shortly after. That, at least, is her narrative.[20] Mr Harrison's is another story.[21] Mr Harrison claims no recollection of this supposed de facto relationship. Hisposition is that there was an 'off and on' relationship between 1988 and 1990, duringwhich time their first child, Natasha, was conceived. He also acknowledges, of course,that their second child, Danielle, was conceived during a further, brief sexual liaisonin 1993.[22] But he flatly denies most of Ms Ngavaevae's factual assertions. While hecannot remember exactly when the relationship ended he is sure it was before hebought Premier Avenue in 1993, and he denies ever living together in that property.While he accepts regularly visiting Ms Ngavaevae's home and participating in familyoutings, activities and celebrations, he says this owed solely to his devotion to hisdaughters, not to any romantic involvement with Ms Ngavaevae. He rejects anysuggestion that he stayed over with her.[23] Instead, he stresses that during the period Ms Ngavaevae claims they were ina de facto relationship, he was in fact married to other women. It appears he was in arelationship with one woman between 1995 to 2005, whom he married in 1999; andthen with another from 2005, whom he married in 2010.[24] He also points out Ms Ngavaevae was financially independent, and in fact thatshe was supported by a Domestic Purposes Benefit for a couple of brief periods whileshe was not working. There appears to be some disagreement as to whetherMr Harrison paid any child support to her.The property[25] There are also divergent views concerning the property at 38 Terry Street,which Mr Harrison purchased in 1999.[26] Ms Ngavaevae says the object of the purchase was to provide a home for herand their daughters, indeed that Mr Harrison promised the property would be put intrust for her and their daughters. Specifically, the three units on the property wereperfect for their purposes: she and the girls would be able to live in one flat whilereceiving the income from the other two to cover the mortgage and other expenses.[27] Consistent with that story, her position is that they searched for propertiestogether, both attended the 38 Terry St auction and made a joint decision to go aheadwith the purchase. She accepts that Mr Harrison paid a deposit of around $30,000 andalso arranged a mortgage, but she maintains that the payments for property rates,mortgage, insurance, and maintenance were all paid by her out of her income and therent from the other two flats.[28] Mr Harrison candidly accepts he obtained Ms Ngavaevae's approval to thepurchase, that he wanted to house her and their daughters, and that they have continuedto live at the property from the outset. He also acknowledges that all three now occupyall three units as an extended family group.[29] But at this point his account parts company. He denies ever promising to putthe property in trust; he posited that the property simply represented an opportunityfor him to invest in rental property. Importantly, he insists that Ms Ngavaevae's stayin the unit was governed by a tenant-landlord relationship. This was a convenientarrangement commercially, he says, as well one that ensured ready access to hisdaughters.The evidence[30] It is nigh on impossible to determine truth from fiction by a simple comparisonof the two accounts. The court must fall back on the (admittedly limited) documentaryand affidavit evidence adduced by both parties.[31] In support of his account, Mr Harrison has produced an undated tenancyagreement signed by Ms Ngavaevae. It appears genuine, and Ms Ngavaevae acceptsshe must have signed the agreement, although she professes to have no recollection ofseeing it.[32] Ms Ngavaevae counters with a "catalogue" of photos showing the two of themtogether, or with their two daughters, which to the reasonable observer speaks stronglyof a committed, and loving relationship. She also produced jeweller's certificates fora three ruby and diamond rings, which she says he gifted to her in 1988 and 2002.Accompanying the certification is a photograph of her wearing the two diamond rings.Another document she produced was a health insurance policy covering herself, MrHarrison, and their daughters.[33] Both parties have the benefit of various affidavits filed in support of theirrespective positions. There are affidavits in support of Mr Harrison from his first wifeand then also his flatmate from the Premier Ave property: both refute any suggestionof an ongoing romantic or sexual relationship between the two parties.[34] Ms Ngavaevae's pastor, on the other hand, deposes to seeing the parties atchurch together, and to his honest belief that they were in a relationship. He recountscounselling Mr Harrison to marry Ms Ngavaevae. Whether Mr Harrison acquiescedin the pastor's reading of the nature of the parties' relationship is an unansweredquestion, but on the current evidence I cannot assume thatMr Harrison rejected it. Tellingly, the two daughters also side with their mother'saccount. For instance, they remember him routinely staying over and their parentsbeing sexually intimate during these times. They also recall their parents acting like acouple during all kinds of family outings. They describe their shock when they foundout it had all been a lie.What can we say about the facts?[35] The evidence only takes us so far. The tenancy agreement is troubling toMs Ngavaevae's case, but much remains unclear about the parties' commercialrelationship. I am unwilling to rule out her case on this basis. By the same token, thedocumentary evidence adduced by Ms Ngavaevae appears compelling, butMr Harrison unsurprisingly offers a range of explanations which, if true, may welldeflate her claims.[36] The affidavit evidence is divided, and one can only presume some of thedeponents are either not entirely independent or objective, or else are misconceived asto the reality of the relationship. Counsel for Mr Harrison seeks to discredit thedaughters' affidavits because of their young age during this period.5 I acknowledgetheir youth — although, to put that in perspective, the oldest daughter was around17 when the relationship supposedly ended in 2007 — but I am not prepared to throwout their clear and consistent evidence solely on that basis. One could also say theyare in a privileged position to understand the truth of their parents' relationship.[37] In short, unanswered questions abound. Without the benefit of a full trial, thecourt remains largely in the dark as to truthfulness of the conflicting accounts. Counselfor Mr Harrison overreaches the evidence by her submission thatMs Ngavaevae patently lacks an evidential foundation. Such a definitive finding isunsafe in my view.[38] The long and short of the matter is that I am satisfied that Ms Ngavaevae'saccount is at the very least arguable.Is it reasonably arguable the kind of relationship she describes would qualify5 Chapman v P HC Wellington CIV-2007-485-1372, 2 July 2009 at [77] and [84].under the Act?[39] The Act provides that relationship property is to be shared equally betweenparties to a qualifying de facto relationship.6 The family home is particularlyconsidered relationship property.7[40] Section 2D defines a de facto relationship for the purposes of the Act, andoutlines the indicia the court looks to in determining whether a couple falls within thatdefinition:2D Meaning of de facto relationship(1) For the purposes of this Act, a de facto relationship is a relationshipbetween 2 persons (whether a man and a woman, or a man and a man, or awoman and a woman) who:a) Are both aged 18 years or older; andb) Live together as a couple; andc) Are not married to, or in a civil union with, one another.(2) In determining whether 2 persons live together as a couple, all thecircumstances of the relationship are to be taken into account, including anyof the following matters that are relevant in a particular case:a) the duration of the relationship:b) the nature and extent of common residence:c) whether or not a sexual relationship exists:d) the degree of financial dependence or interdependence, and anyarrangements for financial support, between the parties:e) the ownership, use, and acquisition of property:f) the degree of mutual commitment to a shared life:g) the care and support of children:h) the performance of household duties:i) the reputation and public aspects of the relationship.6 Act, s 11.7 Section 8.[41] These considerations are not exhaustive, and no one element is a prerequisiteto establishing a qualifying relationship. Still, they "provide a useful pathway in theevaluative exercise which the court is required to take".8[42] If her account of the facts is accepted, or largely so, there is much that weighsin favour of their relationship qualifying as a de facto relationship under s 2D. Inparticular, on her narrative:(a) They were in a relationship for almost two decades, during which timethey operated as a couple and were viewed by others as such.(b) They had a degree of shared care and support for their two children,even if she did she the bulk of the parenting;(c) They shared their lives, both in the weekly routine of his regular visits,which often involved sexual intimacy, but also in their sharedparticipation in key family events and milestones; and(d) Perhaps most significantly, he agreed to have a second child with her,and he bought a house she particularly approved of for her and theirtwo children to live in. Consistent with that, the property has been theirhome for years. (Even though he now casts the relationship as simplyone of landlord and tenant, that is a deliberate distortion of a morecomplex reality).[43] That said, there are some significant wrinkles:(a) They were largely financially independent, and apparently even in alandlord and tenant relationship for some unspecified time.(b) They did not cohabit full-time; and8 C v S [2017] NZHC 1484 at [74].(c) He was married to other women throughout most of their relationship,and it looks likely these marriages were his main relational priority.[44] Each of these three 'wrinkles' requires further analysis.The importance of co-habitation and financial interdependence[45] The Act is social legislation: it reflects, or at least should reflect, contemporarysocial mores. The Act, and its judicial interpretation, must therefore be responsive todevelopments in social mores. In that regard, these are interesting times. The LawCommission observes that "relationships are now much more diverse and thisdiversification is expected to continue".9 In fact, 'unorthodox' relationships are moreoften than not the ones that end up under the judicial microscope.[46] These changing social mores have influenced judicial readings of the test in s2D. It is now recognised that parties' separate finances are not a "reliable indicator ofthe nature of the relationship between them". After all, separate financial arrangementsare these days a common feature of settled de facto or married couples.10[47] Equally well-established is the principle that cohabitation is not an essentialprerequisite of a de facto relationship.11 In fact, if New Zealand statistics are trackingalong the same lines as the United Kingdom and Australia, then just under 10 per centof adult relationships will not involve cohabitation.12 As the High Court observed inG v B:13There may be compelling reasons why a couple do not share a commonresidence for substantial periods of time whilst remaining totally committedto a long-term relationship.9 Law Commission Dividing Relationship Property: time for a change? Te mātatoha rawa tokorau– Kua eke te wā (NZLC, SP41, 2017) at [4.23].10 W v L [2017] NZHC 388, [2017] NZFLR 299 at [31].11 G v B [2006] NZFLR 1047, (2006) 26 FRNZ 28 (HC) at [32]; C v S [2017] NZHC 1484 at [41]-[43].12 Law Commission Dividing Relationship Property at [4.25]; see also Law CommissionRelationships and families in Contemporary New Zealand – He hononga Tangata, he honongawhānau i Aotearoa o nāianei (NZLC SP22, 2017) at Chapter 1.13 G v B [2006] NZFLR 1047, (2006) 26 FRNZ 28 (HC) at [33].[48] But can 'womanising' (as she originally saw it) or else 'being married toanother woman' constitute such a "compelling reason" — as opposed to say, work orfamily commitments or even a lifestyle decision? Certainly, the reasons for partiesnot cohabiting or not sharing finances will influence whether such behaviour is seenas indicating a lack of serious commitment to a shared life. But emphasising somefeatures of the relationship may well misrepresent a relationship that in realityinvolved two people who were deeply and intimately attached to each other.Contemporaneous relationships[49] The Act makes provision for contemporaneous relationships: whether two defacto relationships or a marriage or civil union and a de facto relationship. In suchcases, the property order relating to one de facto relationship will be satisfied fromproperty attributable to that specific relationship.14[50] It would be fair to say that establish a contemporaneous de facto relationshipis likely to be difficult in practice. On my reading of recent authorities, assumptionsof exclusivity still linger on in judicial interpretations of a 'qualifying relationship'under the Act.[51] Clifford J in Thompson v Public Trust opines:15It seems to me that, whilst the law accepts that two de facto relationships mayexist at the one time, that is unusual. Moreover, the fact that a person continuesa relationship with another person whilst at the same time entering into anddeveloping a second relationship with another are, in my view, relevantconsiderations for the Court when determining whether that secondrelationship has reached the stage of a de facto relationship.[52] This logic is more explicitly spelt out in M v P.16 After tracing the legislativepurpose and history of the Act, Miller J observes that:17 a mutual acceptance of exclusivity, relative to other potential partners ingeneral, inheres in the notion of living "together" as a "couple" The14 Act, ss 52A and 52B. Bigamy, however, remains an offence under ss 205-207 of the Crimes Act1961.15 Thompson v Public Trust [2014] NZHC 1374, [2014] NZFLR 902 at [43].16 M v P [De facto relationship] [2012] NZHC 503, [2012] NZFLR 385.17 At [26].statutory indicia of a shared life are broadly consistent with a substantialdegree of exclusivity in qualifying relationships.[53] Miller J goes on:18 contemporaneous de facto relationships are not likely merely because thelegislation admits their existence. On the contrary, a contemporaneous de factorelationship with a different partner tends to show that the relationship beforethe court lacks the character of a life lived as a couple. The legislation governsdivision of the property of a relationship between two people and there mustbe natural limits to one's capacity to spend the only life that one has incontemporaneous bilateral relationships with more than one person.[Emphasis added][54] The rationale, it seems, is that a de facto relationship requires a joint mentalcommitment to "live together as a couple",19 and a court will be reluctant to recognisesuch an intention when the relationship lacks the essential feature of exclusivity.[55] And indeed, it is perhaps tempting to assume that Mr Harrison's marriages toother women indicates he had no intention to fully share his life with Ms Ngavaevaein the manner contemplated by the Act. This is especially so if (as Mr Harrisonmaintains) those other relationships occupied the lion's share of his time and relationalenergy.[56] Still, at least in principle, the Act makes room for situations such as we find inthis case, which the court must be careful not to down play in favour of personal bias.And to my mind, there are compelling reasons to resist that temptation to assume theywere not in a de facto relationship.[57] For one, the jurisprudence in this area is still embryonic. Courts are only justbeginning to wrestle with the novel complexities presented by various forms ofcontemporaneous relationships. In particular, difficult questions remain as to how andto what extent the judicial dictum in M v P can be read consistently with the Act'sunabashed acknowledgement that contemporaneous relationships are possible.18 At [29].19 M v P [De facto relationship] [2012] NZHC 503, [2012] NZFLR 385 at [27].[58] Second, the present facts raise additional complications. Specifically, onMs Ngavaevae's account there appears to be an element of deceit, or at least seriousmisunderstanding, in the parties' relationship. Ms Ngavaevae accommodatedMr Harrison's womanising but had no knowledge of — and quite possibly would nothave consented to — Mr Harrison conducting two full-blown, committed relationshipsat the same time. The daughters also accuse him of deception. As one daughterdeposes:I've known for a long time about the other women. However, I alwaysbelieved we were his family and they were his side women, nothing important.[59] On the one hand, it might be suggested that this weighs against there being ade facto relationship for the reasons discussed earlier. Yet Mr Harrison appears to havegone out of his way to keep the relationship alive, and to reinforceMs Ngavaevae's belief that he was fully committed to sharing his life with her, evenif only 'part-time'. So on the other (and I would suggest dominant) hand, I am notsure the Act would tolerate Mr Harrison escaping his obligations by effectively playingoff his two relationships one against another. Going that route opens up the possibilityof exploitation of a vulnerable party, and of a dominant party benefiting from theirown deceit.Summary[60] There is no denying that Ms Ngavaevae's claim faces potential legal hurdles.Even if true, her factual narrative does not provide an easy 'fit' within the contours ofa qualifying relationship under the Act.[61] But there is enough flexibility in the Act, and sufficient pointers to the potentialfuture trajectory of judicial interpretation for me to be satisfied she has an arguablecase at law.Is Ms Ngavaevae's claim time-barred?[62] The court has a discretion to grant an extension of time in s 24(2), and theprinciples guiding that discretion are set out in May v May. The Court will look tofactors such as the length of the delay; adequacy of the explanation for that delay; thesubstantive merits of the applicant's claim; and the prejudice which the delay mayhave caused to the opposing party.20[63] I have already commented on the merits: her case is arguable but notoverwhelming. The delay is considerable but not necessarily prohibitively so.21 Interms of prejudice, Mr Harrison contends that he has arranged his financial affairs sothat the property and mortgage secured against the property are his only assets andliabilities. He says the property is the only asset he can borrow against to repay anydebt he owes, but the Notice prevents him from being able to deal with his property ashe chooses.[64] The key issue, in my view, is the adequacy of the explanation for the delay. MsNgavaevae's explanation is simply that she assumed, until very recently, that theproperty was still held in trust for her and their two daughters.[65] This explanation is perhaps surprising given that she supposedly discoveredthe extent of his lies in 2007. Counsel for Mr Harrison also points out that he and hisfirst wife, Sau, moved into the property with Ms Ngavaevae in 2006. One might haveexpected Ms Ngavaevae to have clarified her legal rights in the wake of thesedevelopments.[66] Still, I am not prepared to write off her explanation as inherently implausible;it remains sufficiently arguable for the purposes of this application.Conclusion[67] In the round, I consider Ms Ngavaevae's claim reasonably arguable at thelevels of both fact and law.[68] Put simply, it is not possible on the evidence as it stands to make safeconclusions about the nature of the parties' relationship up to 2007. Is this a case of aperson who so organised his life and financial affairs as to enjoy a relationship with20 May v May (1982) 1 NZFLR 165, (1982) 5 MPC 92 at 169.21 See Ritchie v Ritchie [1992] NZFLR 266 (HC), (1991) 8 FRNZ 197.two "wives" and families? And if so, what are the implications of such a finding?These are important unresolved questions.[69] My findings on the evidence weigh strongly in favour of sustaining the caveat,subject only to the court's overriding discretion to withhold such a remedy. And, inthe circumstances, I see no reason to exercise that discretion.[70] Without discounting the prejudice faced by Mr Harrison, Ms Ngavaevae wouldalso face considerable prejudice. She faces the prospect of losing the home she livesin with her daughters, and so having nothing left to satisfy her claim by the time hersubstantive case is heard.Result[71] The application to sustain the Notice is granted on terms that leave is reservedfor Mr Harrison to come back to court if Ms Ngavaevae does not pursue her claimexpeditiously.[72] As costs follow the event under the statutory costs regime, Ms Ngavaevae isentitled to an order for costs. The respondent is to pay her costs of and incidental toher application on a 2B basis plus disbursements as fixed by the Registrar._____________________Associate Judge Sargisson