Malcolm Edward Rabson v Linda Gallagher

• Jurisdiction: New Zealand
• Judge: Elias CJ,William Young,Arnold JJ
• Judgment Date: 05 April 2017
• Neutral Citation: [2017] NZSC 44
• Docket Number: SC 3/2017
• Court: Supreme Court
• Date: 05 April 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

[2017] NZSC 44

Court:

Elias CJ, William Young and Arnold JJ

SC 3/2017

IN THE SUPREME COURT OF NEW ZEALAND

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.

Counsel:

Applicant in person N Levy for First Respondent

S A Barker for Third Respondent

JUDGMENT OF THE COURT

A The application for leave to appeal is dismissed.

B The applicant must pay costs of $2,500 to each of the first and third respondents.

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 directions if required and to any party to apply to this Court for clarification of any matter relating to these orders.

4 The applicant's application for leave to appeal to this Court was refused. 4 He complained that the effect of the orders was to confer on the first respondent an effective priority in respect of the proceeds of sale of the three properties. In dismissing the application, this Court observed: 5

The payments ordered to be made to Ms Gallagher are, however, on account of her overall entitlement and leave has been granted to any party to apply to the Court of Appeal for clarification of any matter related to its orders.

Mr Rabson would therefore be able to seek from the Court of Appeal an adjustment of its orders if there were to be a change of circumstances for which he bore no responsibility and, as a consequence, the orders would lead to an overpayment of Ms Gallagher. We should add that it is not at this stage apparent that this may occur.

5 Mr Rabson applied to the Court of Appeal for clarification of the orders pursuant to the grant of leave reserved. His specific questions were these:

• 1.0 Was it the expressed...