Beach-Ward v Ward
| Jurisdiction | New Zealand |
| Judge | Ellis J |
| Judgment Date | 18 October 2022 |
| Neutral Citation | [2022] NZHC 2693 |
| Docket Number | CIV 2022-443-000003 |
| Court | High Court |
| Year | 2022 |
UNDER the Property (Relationships) Act 1976
IN THE MATTER of an appeal against a decision of the Family Court at New Plymouth
[2022] NZHC 2693
Ellis J
CIV 2022-443-000003
IN THE HIGH COURT OF NEW ZEALAND
NEW PLYMOUTH REGISTRY
TE KŌTI MATUA O AOTEAROA
NGĀMOTU ROHE
Family — appeal against a division of relationship property 52 to 48 in the appellant's favour — exception to equal sharing — occupational rent — economic disparity — division of functions — Property (Relationships) Act 1976
S E Gifford for Appellant
C A Gelston for Respondent
The appeal was dismissed.
Cherie Beach-Ward and Michael Ward formed a relationship in 2000, were married in 2003 and separated on 26 June 2018. They have three sons together. Following their separation, some, but not all, relationship property issues were resolved between them. Mr Ward sought equal sharing whereas Ms Beach-Ward sought an adjusted division (60:40) in her favour. Ultimately, Judge Harrison in the Family Court ordered an adjusted division of approximately 52:48 in favour of Ms Beach-Ward. 1
Ms Beach-Ward now appeals that decision.
At the time the parties' relationship began, Ms Beach-Ward was 32 and working as a team leader in an administration department on an annual salary of $29,000. She had joined the workforce at 16 and had no tertiary qualifications. But she had recently been widowed and had inherited her late husband's share of the family home in Papamoa, and owned a house-lot of furniture, a small boat and two motor vehicles. As a result of her husband's death, Ms Beach-Ward was also entitled to annual ACC payments of $45,000 for the next four years. She had also received a life insurance payment of nearly $350,000, although it is a little unclear what became of this.
Ms Beach-Ward also says she had at this time $50,000 of investments, although the only evidence of this in the Family Court was a Tower Managed Funds statement from 1 April 2001 showing a balance of $18,652.56. Similarly, there was no evidence of what she had done with her husband's life insurance payments totalling almost $350,000, received within the first six months of the relationship.
Mr Ward was 28 and worked as an IT professional, earning $89,000 annually. As I understand it, he owned a share in a house and a car and a boat. 3 When his relationship with Ms Beach-Ward began he moved into her Papamoa home.
Shortly after moving in, Mr Ward lost his job. He began working as an IT contractor. There is a dispute about whether — and the extent to which — he used Ms Beach-Ward's house as a base for work purposes at this time.
In 2001 Mr Ward incorporated Realise IT Ltd (Realise IT). He and Ms Beach-Ward now each own 50 shares in the company. Mr Ward is the sole director. Realise IT became the corporate vehicle for Mr Ward's IT consulting business and he has effectively been self-employed (the company's sole employee) for quite some part of the period spanning the relationship.
In late 2002, the parties relocated to New Plymouth for Mr Ward's work. The couple married in March 2003. Shortly afterwards they settled the MP and CA Ward Family Trust (the Family Trust). 4 Around this time the parties jointly purchased a property which they then sold and bought another. Both properties were mortgage-free. They subsequently used their property as security for borrowings (for investment purposes) by the Family Trust. In 2009, the couple bought their last family home on Wills Road (the Wills Road property).
At the date of separation, the Family Trust property comprised shares in an Australian investment syndicate, Lisgar Investments Pty Ltd (the Lisgar Investment), a family bach at Urenui (purchased in 2017), 49,999 shares held in New Plymouth Stainless Supplies Ltd and a $238,000 debt to ASB secured against the Wills Road property. It was agreed that the property of the Family Trust should be treated as relationship property.
The parties' three children were born between 2002 and 2007. Ms Beach-Ward worked until the birth of the first, at which point it was agreed she would become a stay-at-home parent for the children.
In 2012, Ms Beach-Ward enrolled for a child-care degree at the University of Canterbury. She later left that programme and re-entered the workforce as a part-time administrator, giving her the flexibility to take leave when their children were sick or during school holidays. By 2018, she was earning $41,000 per annum, for working 80 per cent of full time.
Between 2009 to 2017, Mr Ward worked for a power company (first providing project management services, then as a manager). After taking redundancy in 2017, he began consulting again (six months later) through Realise IT. By 2018, he was earning $134,000 per annum.
The parties separated on 26 June 2018. For the first six months of their separation (until December 2018) they took weekly turns at living at the Wills Road property so the children could remain in place. Each of them stayed at the Urenui bach during the weeks they were not at Wills Road. Income and expenses during this period were shared.
In November 2018 the Family Trust sold its Lisgar shares for roughly $310,000. 5
It seems to have been around this point the relationship soured. It was agreed the Family Trust should sell the bach, which then occurred. 6 Mr Ward remained at the Wills Road property while Ms Beach-Ward — who could no longer stay in the bach — chose to make other, less satisfactory, accommodation arrangements. 7 These seem to have involved her renting rooms in several farmhouses for $200 per week. It also seems she may have floated the possibility for making an economic disparity claim under the Property (Relationships) Act 1976 (the PRA) at around this time.
In any event, on 21 December 2018 Mr Ward's lawyer sent an email to Ms Beach-Ward's lawyer, advising her client's view that the parties were “not close to agreement and clearly our involvement may be considerable next year.” Under the heading “Financial Matters Generally” she said:
We propose moving forward that the funds held in the parties' Trust account are used to pay all expenses associated with maintaining relationship property, caring for the children and normal living expenses for each of the parties. Mr Ward will pay the credit cards this month from those funds. We propose each party retains their own income to pay for discretionary items such as personal clothing, holidays and items associated with them personally.
For whatever reason, neither Ms Beach-Ward nor her lawyer responded to this email at the time.
On 6 May 2019, Mr Ward unilaterally repaid the Family Trust's debt to ASB from money available in the Trust's bank account which, at that point, had a credit balance of $447,342.13 as a result of the sale of the bach and the Lisgar Investment.
Shortly after this, Ms Beach-Ward reimbursed herself $13,000 for her costs (rental and otherwise) from monies in the Family Trust account without issue from Mr Ward.
On 4 June, Ms Beach-Ward unilaterally withdrew $223,400 from the Family Trust account. She used the money (along with funds of her own) to purchase a property in Midhirst, near Stratford. The Midhirst property has since seen a considerable ($140,000) increase in capital value. The sale settled, and Ms Beach-Ward moved into the property, in November 2019.
Between December 2018 and December 2019, Mr Ward effectively had full-time care of the three boys (with occasional overnight stays with Ms Beach-Ward). 8 From December 2019 (after Ms Beach-Ward had moved into her new home) the couple's youngest son began week about stays with each of them.
Following extensive negotiations between the parties, the Wills Road property was sold in May 2021 for $1.5 million.
I do not propose to set out the Family Court judgment in any detail here. That is because it is more convenient to address the relevant, discrete, aspects of it in the context of the specific grounds of appeal now advanced by Ms Beach-Ward. In general terms it suffices to record that the Judge:
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(a) resolved specific disputes about what was or was not relationship property;
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(b) held that, because the Midhirst property had been purchased (in part) with Family Trust funds (relationship property), 40 per cent ($56,000) of the increase in capital value of the Midhirst Property was relationship property; 9
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(c) recorded that the total value of the relationship property pool (as so determined) was $1,905,979.80; 10
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(d) rejected a claim by Ms Beach-Ward under s 13 of the PRA that her greater capital contribution at the outset of the relationship warranted a 60:40 division in her favour; 11
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(e) determined the pool should — subject only to Ms Beach-Ward's s 15 economic disparity claim — be divided equally; 12
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(f) determined Ms Beach-Ward's economic disparity claim under s 15 of the PRA (slightly) in her favour, resulting in her receiving a two per cent greater share of the relationship property pool. 13
The specific issues raised by the notice of appeal are:
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(a) the Judge's valuation of Mr Ward's company, Realise IT;
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(b) the Judge's alleged failure to bring to account a payment of $30,000 made towards expenses associated with the parties' sons' racing hobby (Ms Beach-Ward says this amount should be included in the pool as a relationship property asset retained by Mr Ward);
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(c) the Judge's alleged failure to bring to account Mr Ward's withdrawal and use of further funds from the Family Trust account between 25 January 2019 and 17 February 2021 (which Ms Beach-Ward also says should be included in the pool as a relationship property asset retained by Mr Ward);
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