F X J H v H Y-M Y

 
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IN THE FAMILY COURT AT NORTH SHORE

FAM-2009-044-000966

In the Matter of the Property (Relationships) Act 1976

And in the Matter of the Family Proceedings Act 1980

Between
F X J H
Applicant
and
H Y-M Y
Respondent
Appearances:

R Reed for the Applicant

R Hooker and T Homes for the Respondent

Application for declaration that a s21 Property (Relationships) Act 1976 (“PRA”) (spouses or partners may contract out of PRA) prenuptial agreement be declared void or set aside due to serious injustice — parties met in China and applicant came out to NZ on a three month visa to visit respondent — agreement was prepared and signed and the parties married a month later in NZ — three children and five years later the parties separated — whether the agreement was void pursuant to s21F PRA (agreement void unless complies with certain requirements) or should be set aside due to serious injustice — whether s15 PRA (Court may award lump sum payments) or spousal maintenance claims were made out.

NOTE: PURSUANT TO S 35A OF THE PROPERTY (RELATIONSHIPS) ACT 1976, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B TO 11D OF THE FAMILY COURTS ACT 1980. FOR FURTHER INFORMATION PLEASE SEE WWW.JUSTICE.GOVT.NZ/FAMILY/LEGISLATION/RESTRICTIONS.

NOTE: PURSUANT TO S 169 OF THE FAMILY PROCEEDINGS ACT 1980, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B TO 11D OF THE FAMILY COURTS ACT 1980. FOR FURTHER INFORMATION PLEASE SEE WWW.JUSTICE.GOVT.NZ/FAMILY/LEGISLATION/RESTRICTIONS.

At issue was whether the agreement was void pursuant to s21F PRA (agreement void unless complies with certain requirements) or should be set aside due to serious injustice pursuant to s21J PRA (Court may set agreement aside if would cause serious injustice); whether Mrs Y was entitled to a s15 PRA (Court may award lump sum payments) claim or spousal maintenance.

Held: It had to be remembered that 11 years had elapsed since the agreement was signed and exact recollection of events was an impossibility. On Mrs Y's own evidence she was aware that it was a pre-nuptial agreement and C explained it to her in her own language, though there was no conclusive evidence that C discussed with Mrs Y her entitlement under the PRA at the time of signing. As Mr Y had already signed the agreement there was no basis to accept the submission that Mrs Y believed C was acting for both of them, especially since Mr Y was not present for most of the meeting. The agreement was not “complicated and unclear”. The schedules listing the parties separate property were very specific. There was no evidence presented by Mrs Y of what provisions she may have wished to alter if given the chance for negotiation. There was no legislative basis which required active negotiation by the parties as a necessary condition for the enforceability of any property agreement. The onus was on Mrs Y to establish that the advice she received was not at the standard of “independent legal advice” ( Zhou v Ye). Mrs Y was not able to do so. There was nothing to suggest that C did not discharge his duties.

The phrase “serious injustice” constituted a high threshold for Mrs Y — Wood v Wood, Nguy v Lee, and Harrison v Harrison. The Court was obliged to have regard to all the circumstances. Any one of the factors in s21J(4) PRA might not be sufficient. There was no evidence that the length of time of the marriage had any particular significance and the case could be distinguished from LT v TT, as the parties had no joint property at the time of signing. It was accepted that there had been discussions about Mr Y's wish to enter a contracting-out agreement before Mrs Y came to NZ. The agreement was not unfair at the time it was signed. The agreement also did not become unfair or unreasonable due to a change in circumstances. The relationship panned out roughly as the parties expected (except for the eventual separation). It was intended that the parties would have children and therefore there was no expectation for Mrs Y to obtain employment. Neither party was in a position to acquire any additional property during the relationship unlike in the 18 year relationship in LT. Mr Y clearly wanted to protect his assets and Mrs Y her bank accounts and property interests in China. There was no evidence Mr Y put Mrs Y under pressure to sign the agreement. There was no evidential basis for the implied naivety on the part of Mrs Y that she did not understand the effect of the agreement. Although Mrs Y had primary care of the three children, Mr Y was providing for the children by way of child support. Mrs Y was not able to satisfy the threshold for serious injustice.

Mrs Y had no basis for a s15 PRA economic disparity claim. On the evidence before the Court Mrs Y's receipts from benefits exceeded Mr Y's funds after tax. It was accepted that Mrs Y had a larger share of the childcare responsibilities. The living styles were not significantly different, nor was either extravagant. There was difficulty in establishing how much Mrs Y would have been able to earn had she been earning, given that she had only recently actively commenced learning English. As in Weir v Weir, Mrs Y gave up her career prior to any relationship with Mr Y commencing so the termination of her employment was not overly connected with the relationship. The disparity was not a consequence of the relationship function. Even if there were grounds for an economic disparity claim, any award would only be a nominal amount ( B v B).

Mrs Y sought spousal maintenance pursuant to s63 Family Proceedings Act 1980 (“FPA”) (maintenance during marriage or civil union). The threshold requirements were set out in Wederell v Wederell. Mrs Y's assessment of her reasonable needs was not excessive and she was entitled to factor entertainment costs into her assessment. If she chose to spend any spousal maintenance on the children's entertainment rather than her own, that did not reduce her reasonable needs or convert the need into an unnecessary expense.

The fact that Mrs Y was on a benefit did not extinguish Mr Y's liability to maintain her — s62 FPA (domestic benefit irrelevant). The case law on the matter of the effect of a benefit on the calculation of spousal maintenance was conflicting and a Court of Appeal decision on the matter was pending. Mrs Y was not able to show that on the balance of probabilities future spousal maintenance should be ordered. The circumstances that supported an order for past spousal maintenance under s63(2) FPA had changed — the youngest child was now at school, freeing Mrs Y to work and Mrs Y was learning English which would remove the language barrier that may have affected her ability to become self supporting in the past. It was not appropriate that liability should continue on the basis that Mrs Y enjoyed a slightly higher standard of living when with Mr Y. Because Mrs Y waited five years to seek spousal maintenance and with the assessment of the parties means and needs, Mr Y was not liable for the full amount of past maintenance sought by Mrs Y ($110 per week over 79 months). The appropriate sum was for the equivalent of $110 per week since the proceedings were commenced.

Order that Mr Y pay Mrs Y $11,440 in respect to past spousal maintenance. All other causes of action dismissed.

(S 21F, S 21J and S 15 of the Property (Relationships) Act 1976 S 63 and S 65 of the Family Proceedings Act 1980)

RESERVED JUDGMENT OF JUDGE J H Walker

J H Walker
1

These proceedings relate to matters under the Property (Relationships) Act 1976 (the Act).

2

The primary application by the wife, F X J Y (Mrs Y), is seeking a declaration that the s 21 prenuptial agreement dated 16 December 1998 (the agreement) between the parties be declared void pursuant to s 21F of the Act, or set aside because of serious injustice pursuant to s 21J of the Act.

3

The Respondent in these proceedings is the husband, H Y-MY (Mr Y).

4

In addition, the Applicant is seeking orders relating to division of relationship property, an order under s 15 of the Act relating to economic disparity and orders for occupational rental and for spousal maintenance.

Background
5

The parties were both born in China. Mr Y was living in New Zealand and previously was married here. He returned to China in 1996, when he and Mrs Y (then Ms H) met. In 1997, when Mr Y visited China again, the parties talked about their relationship and starting a family. Enquiry was made as to whether Mrs Y would be eligible to emigrate to New Zealand. The parties continued correspondence and the future Mrs Y applied to come to New Zealand on a three month visa. She arrived in New Zealand on 12 December 1998.

6

In early December 1998, the solicitors for Mr Y drafted an s 21 agreement under the Act (“the agreement”) and this was signed by Mr Y in front of his solicitor. Arrangements were made for the future Mrs Y to see a solicitor in Auckland, Mr Chai, and she met with Mr Chai on 16 December 1998 and signed the agreement.

7

The parties married in New Zealand in January 1999 and had three children: S L Y, born in August 1999 (currently aged 11), R Y, born in April 2001 (currently aged 9) and M Y, born in June 2005 (currently aged 5). The parties separated in December 2004. M was born after the parties separated.

8

There were consent orders made in the Family Court on 3 May 2006 whereby the children remain in the day to day care of Mrs Y, with Mr Y having contact on Saturdays from 6.00 pm to Monday at 8.00 am and half of each school holiday.

Issues to be determined
9

1. The validity of the agreement.

2
    Whether the agreement is void pursuant to s 21F of the Act. 3. Whether the agreement should be set aside due to serious injustice pursuant to s 21J of the Act. 4. Is the Applicant entitled to a s 15 claim under the Act? 5. Is the Applicant entitled to a spousal maintenance order, and if so what orders should be made? 6. Is Mrs Y entitled to an occupational rental claim and if so what orders...

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