Malcolm Edward Rabson v Linda Gallagher

JurisdictionNew Zealand
CourtSupreme Court
JudgeElias CJ,William Young,Arnold JJ
Judgment Date05 April 2017
Neutral Citation[2017] NZSC 44
Date05 April 2017
Docket NumberSC 3/2017

[2017] NZSC 44

IN THE SUPREME COURT OF NEW ZEALAND

Court:

Elias CJ, William Young and Arnold JJ

SC 3/2017

Between
Malcolm Edward Rabson
Applicant
and
Linda Gallagher
First Respondent
Malcolm Edward Rabson as Trustee of the Malcolm Rabson Family Trust
Second Respondent
Wayne Seymour Chapman as Trustee of the Gallagher—Rabson Family Trust
Third Respondent
Counsel:

Applicant in person N Levy for First Respondent

S A Barker for Third Respondent

Application for leave to appeal — the applicant wished to appeal the Court of Appeal's (CA) refusal to give clarification of its orders — following litigation under the Property (Relationships) Act 1976, the CA determined that the first respondent was entitled to payment of $1.2 million — its orders included provision for the parties to apply to the Court for clarification of any matter relating to the orders — the effect of the orders was that the applicant would receive less than 50 per cent of the relationship property pool if the net realisation from the sale three properties (after paying the respondent and the Court appointed trustee) was less than what was then anticipated — the applicant queried whether this was what had been intended by the Court — whether the orders had resulted in a miscarriage of justice.

Held: The proposed appeal did not raise any question of public or general importance, so the application for leave to appeal had to rest on the miscarriage ground.

If R could credibly argue that his reduced share of the relationship property pool resulted from “a change in circumstances for which he bore no responsibility” (to use the language of the earlier leave judgment), he would be well on the way to obtaining leave, either to appeal against the most recent CA judgment or, alternatively, if it were to be concluded that the reservation of leave was not as extensive as the SC thought in the earlier leave judgment, against the earlier judgment.

In fact, however, he could not credibly maintain such an argument because, as noted by the CA, the differences in amounts received by G and A could be explained:

(i) G's priority right to payment as upheld by the SC;

(ii) the relationship property was fixed by reference to the amounts of the acknowledgement of debts, not the value of the properties,

(iii) the GRFT's ability to meet its debt obligation depended on the quantum of the proceeds of sale of the three residential properties;

(iv) the expenditure of GRFT trust funds necessitated in addressing a series of legal challenges by R; and

(v) the implications of certain other litigation such as the judgments obtained by the liquidators of companies of which R was a director, against the GRFT and a declaration in other litigation that the plaintiffs in that case were entitled to payment from funds held by C as trustee towards settling their judgment debt.

There was no good reason why the first respondent's share of the relationship property should be diminished by expenses associated with R's litigiousness.

The application for leave to appeal was dismissed.

REASONS

1

Litigation between the applicant and the first respondent under the Property (Relationships) Act 1976 resulted in orders made by the Court of Appeal in 2011. 1 The Court determined that the first respondent was entitled to payment of

$1,239,081. 2 This figure represented, inter alia, the High Court Judge's assessment of the value of debts owed by the Malcolm Rabson Family Trust. The payments to the first respondent were to be funded from the proceeds of sale of three properties held by the Gallagher-Rabson Family Trust (GRFT). As perceived by the applicant, the effect of the orders was that he would receive less than 50 per cent of the relationship property pool if the net realisation from the three properties (after allowing for the expenses of the trustee) was less than what was then anticipated. That perception accords with the practical effect of the orders. However, for the purposes of the Court of Appeal (and the High Court as well) the relevant relationship property consisted of the debts. The valuation/division proceeded on the basis that those debts were worth their face value.
2

The orders made by the Court of Appeal generally followed the form of those made by the High Court Judge. There is no explicit explanation in either the High Court or Court of Appeal judgments for the way in which the order was structured. We think it likely that the structure was intended to ensure that difficulties generated by Mr Rabson in relation to the GRFT and the properties it owned would not diminish the amount that Ms Gallagher would receive. That has been the practical effect of the orders.

3

The orders of the court provided: 3

Leave is reserved to the GRFT trustee to apply to the High Court for further...

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