NOTE: PURSUANT TO S 35A OF THE PROPERTY (RELATIONSHIPS) ACT 1976, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B,
11C AND 11D OF THE FAMILY COURT ACT 1980. FOR FURTHER INFORMATION, PLEASE SEE
https://www.justice.govt.nz/family/about/restriction-on-publishing-judgments/	
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE	
CIV-2019-419-0145
[2020] NZHC 1602	

BETWEEN	SPYRIDON POROS
Appellant	
AND	KYLIE BRIDGET BAX
First respondent

HELEN-GAYE BAX and WILLIAM
GRAHAM BAX as trustees of the GOLDEYE TRUST
Second respondents	

Date of hearing:	15–16 June 2020 (further submissions 29 June and 6 July 2020)	
Appearances:	J D Noble and IJM MacKenzie for the appellant DAT Chambers QC for the respondents	
Date of judgment:	7 July 2020	

JUDGMENT OF JAGOSE J

This judgment was delivered by me on 7 July 2020 at 3.00pm.
Pursuant to Rule 11.5 of the High Court Rules.

………………………… Registrar/Deputy Registrar

Counsel/Solicitors:
DAT Chambers QC, Auckland Boyle Mathieson, Auckland

POROS v BAX [2020] NZHC 1602 [7 July 2020]

[1]	Spyridon Poros appeals the 14 May 2019 decision of Judge G S Collin in the Family Court at Hamilton, determining division of his and Kylie Bax’s relationship property under the Property (Relationships) Act 1976.1

[2]	After specifying such of the parties’ relationship property as was thereafter to be their separate property, including a cash wash-up for the differential in values,2 the Judge allocated half the value of the balance of their relationship property to Mr Poros.3 That value included a $2.306 m debt owed by Ms Bax to the Goldeye Trust, of which she and others claiming through her are beneficiaries, and omitted the Trust’s half-share of a $3.245 m property in Auckland’s Avondale. In net terms, the Judge calculated the relationship property’s value as comprising an outstanding relationship debt of $99,463.00 to the Trust.4

[3]	On appeal, Mr Poros seeks correction of what he asserts are multiple errors in the Judge’s identification of the parties’ relationship property, predominantly in reliance on the Family Court’s powers under s 182 of the Family Proceedings Act 1980. After dissolution of a marriage, s 182 enables the Family Court to vary settlements of the parties’ property.

[4]	Ms Bax cross-appeals the Judge’s contended error in refusing to set aside the Family Court’s dissolution of Mr Poros’ and Ms Bax’s marriage in Las Vegas, Nevada,5 which was declared void “ab initio” (from the beginning) by the Eighth Judicial District Court in Clark County, Nevada, on grounds of non-dissolution of Mr Poros’ earlier marriage to another woman in Greece.6 Thus s 182 would have no application, as there would be no dissolution order for it to attach.

Background

[5]	Mr Poros, a photographer, and Ms Bax, a model, met at a United States’ photoshoot in September 2003. They married in August 2005 and separated in May

1	Poros v Bax [2019] NZFC 874.
2	At [284].
3	At [285].
4	At Schedule B.
5	At [61].
6	Kylie Bax v Spyridon Poros D-17-558938-L (NV 2018).

2014, by which time they had three daughters. On Ms Bax’s undefended application to the Family Court in May 2016, their marriage was dissolved in July 2016.

[6]	At the time of their meeting, Ms Bax owned about NZD 600,000 in managed funds held in New Zealand; jointly with her parents, William and Helen-Gaye Bax, a property in Havenhurst Drive, West Los Angeles; a Kentucky horse stud in the name of Goldenbow LLC; and was owed NZD 1.499 m by the Goldeye Trust, of which her parents were trustees. In March 2004, the Havenhurst Drive property was sold, and Ms Bax acquired a property at Kirkwood Drive, also in West Los Angeles, at which the family lived until 2007. The family then moved to New York. Ms Bax rented out the Kirkwood Drive property, and bought another property in Tribeca’s Vestry Street on New York’s Manhattan in April 2008 in which the family lived. In 2009, the family relocated to Greece, and Ms Bax bought an Athens property for renovation. The family lived then in rented accommodation, and later again on moving to Sydney in Australia. Subsequently, the family then moved to Cambridge in New Zealand, ultimately to live in a Victoria Road property acquired by the Goldeye Trust (including with funds sourced in sale of the Vestry Street property) in November 2013, until their separation. After separation, Ms Bax sold the Greek property. The Kirkwood Drive property also was sold then, possibly by mortgagee sale. Ms Bax continues to live in the Victoria Road property.

[7]	The capital contributions for all these acquisitions came from Ms Bax or entities associated with her. They were supported at times by mortgage financing secured over various of the properties. Evidence of accounting for proceeds from sales of the properties is incomplete and often opaque, involving transfers of funds between Ms Bax and entities connected with her (including the Kylie Bax Revocable Trust, of which Ms Bax was sole trustee and beneficiary). Noting the “bitter and acrimonious disputes” between the parties,7 and their evidence as partial and hostile,8 the Judge “treat[ed] all affidavits and oral evidence with caution and [did] not accept any party as entirely reliable or credible”.9

7	At [3].
8	At [4]–[5].
9	At [6].

[8]	What is clear, however, is the couple’s earnings during their relationship were modest, at best. Their “luxurious” and “glamorous” lifestyle, as found by the Judge,10 principally was funded by expenditure of the proceeds from sale of various of Ms Bax’s assets, and a loan of some NZD 2.306 m from the Goldeye Trust. There is no evidence of any material capital contribution from Mr Poros, although some mortgage repayments appear to have been drawn from the couple’s joint bank accounts.

Approach on appeal

[9]	Appeals to this Court from the Family Court are general appeals conducted by way of rehearing,11 in which the appellant bears the onus of satisfying me I should differ from the Family Court’s decision. I only am justified in interfering with that decision if I consider the decision is wrong – in other words, the Judge erred.12

[10]	I then am to come to my own assessment of the merits of the case afresh, without deference to the Family Court (save for some caution in differing on witness credibility, when I have not had the advantage of observing the witnesses).13 I may rely on the Judge’s reasons in reaching my own conclusions, but the weight I give those reasons is a matter for me.14

[11]	To the extent the decision involved exercise of the Judge’s discretion, I only may interfere with it if the appellant establishes the Judge acted on wrong principle, did not address relevant matters or took into account irrelevant matters, or was “plainly wrong”.15

[12]	After hearing the appeal I may make any decision I think should have been made, or direct the Family Court to rehear the proceeding or consider and determine any particular matter.16

10	At [29].
11	Property (Relationships) Act 1976, s 39(3); see also District Court Act 2016, s 127.
12	Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [13].
13	At [13].
14	Kacem v Bashir [2010] NZSC 112, [2011] 2 NZLR 1 at [31].
15	May v May (1982) 1 NZFLR 165 (CA) at 170; and Blackstone v Blackstone [2008] NZCA 312, (2008) 19 PRNZ 40 at [24].
16	Property (Relationships) Act 1976, s 39; High Court Rules 2016, r 20.19(1).

Relevant law

[13]	Part 4 of the Family Proceedings Act 1980 provides for proceedings relating to the status of a marriage. It includes provision for the Family Court to make orders dissolving a marriage, including as “undefended”, on the ground “the marriage … has broken down irreconcilably”.17

[14]	On application under s 23 of the Property (Relationships) Act 1976, being satisfied of a marriage’s dissolution, the court may divide the relationship property between the spouses.18 By such division, each spouse is entitled to share equally in the family home, the family chattels, and any other relationship property.19 In calculating the net value of relationship property for such division, the total value of the relationship property is to be ascertained as at the date of separation, for subsequent deduction of any relationship debts.20

[15]	‘Relationship property’ generally is all that acquired by either spouse before the relationship began, if acquired in contemplation of the relationship and for the spouses’ common use or benefit, and after the relationship began. It extends to property acquired after the relationship began for their common use or benefit, if acquired out of property owned by either or both spouses before the relationship began, or out of the proceeds of any disposition of such property.21 Otherwise, “[a]ll property of either spouse or partner that is not relationship property is separate property”, as is property acquired out of it, and the proceeds of its disposition.22 ‘Relationship debt’ similarly is a debt incurred by the spouses jointly or in the course of a common enterprise, or to acquire, improve or maintain relationship property, or for the spouses’ benefit in the course of managing their household affairs, or to bring up their children.23

[16]	Section 44 of the 1976 Act enables the court to set aside dispositions of property made to defeat any person’s rights under the Act. Section 44C enables the

17	Family Proceedings Act 1980, ss 37–39 and 42.
18	Property (Relationships) Act 1976, s 25.
19	Section 11.
20	Section 20D.
21	Section 8.
22	Section 9.
23	Section 20.

court to compensate disposition of relationship property to a trust with effect to defeat a spouse’s claim or right under the Act.24

[17]	Section 182(1) of the 1980 Act relevantly provides:

182 Court may make orders as to settled property, etc

(1)	On, or within a reasonable time after, the making of an order under Part 4 of this Act…, the Family Court may inquire into the existence of any agreement between the parties to the marriage … relating to the property of the parties or either of them, or any ante-nuptial or post-nuptial settlement made on the parties, and may make such orders with reference to the application of the whole or any part of any property settled or the variation of the terms of any such agreement or settlement, either for the benefit of the children of the marriage or civil union or of the parties to the marriage or civil union or either of them, as the court thinks fit.

The discretion enables the Family Court to remedy any adverse consequence dissolution has on retention of benefit from the nuptial settlement.25

Issues on appeal

[18]	I approach the appeal on the basis of the grounds of appeal specified in Mr Poros’ notice of appeal as constituting error in the Judge’s decision, subject to abandonment of particular grounds in the course of argument. While that likely is orthodox, I apprehend the written and oral submissions tendered by Mr Poros’ counsel, Jeremy Noble, range more widely, in substantial part asking me to take a different view of, or draw different conclusions from, particular evidence from that found by the Judge.

[19]	Specifically, in submission, Mr Noble disputes the Judge’s refusal to set off debts between Ms Bax and the Goldeye Trust.26 That is not an error expressly contended by the notice of appeal. Although I asked Mr Noble at the outset of the hearing to clarify how the 50 or so headings of his written submissions related to the ten stated grounds of appeal, that was not done. He demurred from specifying any

24 The Judge made an order under s 44C in relation to the proceeds of sale of the Athens property, which he found had been disbursed through William Bax to the Goldeye Trust to defeat Mr Poros’ claim or right under the Act; Poros v Bax, above n 1, at [157] and [285(f)]. It is not appealed.
25 Clayton v Clayton (Claymark Trust) [2016] NZSC 30 at [60].
26 Poros v Bax, above n 1, at [263].

alternative to the Judge’s division, saying words to the effect there were “so many variations”.

[20]	The notice of appeal outlines the judgment sought on appeal as a 50/50 division of all relationship property, together with vesting in Mr Poros of “half of the net equity of the Goldeye Trust” (in the Victoria Road and Avondale properties, and proceeds of sale of the Athens property) under s 182 of the Family Proceedings Act 1980, and “an order finding that there is no relationship debt owing” by Ms Bax to the Goldeye Trust. But the last draws on the appeal ground the loan to Ms Bax by the Trust was a disposition made to defeat Mr Poros’ rights,27 not that it was subsumed by Ms Bax’s loan to the Trust.

[21]	I therefore do not address the disputed set-off. However, after contemplating the parties’ respective submissions on it over the weekend after the hearing, I enquired of counsel:28
… if the Family Court should have reduced the Goldeye Trust’s debt to Ms Bax by the amount of her share of the relationship debt owed to the Trust (to the extent it was able to be met by the Trust’s assets to which Mr Poros had a claim) and, if so, the mechanism by which that may have been achieved.

[22]	Ms Bax’s counsel, Deborah Chambers QC, responded the parties’ submissions were to be understood as addressing “an issue of valuation of debt which is consistent with the notice of appeal”. There was no appeal against the Judge’s refusal of set off. Even so, the sanctity of separate property does not permit it to be brought into measures with relationship debt, and its set off is only to substitute a portion of Mr Poros’ liability to the Goldeye Trust with his coterminous liability to Ms Bax for post- separation contributions.29 Thus such set off is “of no practical effect”.

[23]	Although essaying a wider recalculation of the relationship property’s valuation, Mr Noble essentially agrees. I therefore am reinforced in my decision not separately to address the Judge’s refusal to set off.

27	See [40] and following below.
28	Minute, 22 June 2020, with reference to Poros v Bax, above n 1, at [284(d)] and [285(e) and (h)].
29	Property (Relationships) Act 1976, s 18B.

—proceeds of sale from Kirkwood Drive property

[24]	The Judge found the Kirkwood Drive property sold for  USD 1.185 m on    29 April 2015, the proceeds being insufficient to meet debts secured over it.30 The outstanding USD 23,000 was a relationship debt, but not paid. The Judge therefore determined the proceeds had “a nil value” for division’s purposes.31

[25]	Mr Poros accepts the proceeds repaid a first mortgage of USD 948,000 with Wells Fargo Bank, but disputes they repaid two additional credit facilities of USD 130,000 each, the former a second mortgage with Wells Fargo Bank and the latter a loan from a third party financial institution. Mr Noble argues the records of the property’s sale, taken together with the absence of settlement documentation, only is sufficient to support the first repayment, and reconstructs the transaction as “what must have happened”. In particular, Mr Noble says an inference was available “the documents would not have favoured [Ms Bax]”. Thus the Judge erred, by not valuing the proceeds at USD 237,000.

[26]	The Judge was explicit his objective was to “deal with matters as inexpensively, simply and speedily as is consistent with justice”. Despite not having exercised interlocutory remedies to obtain such, Mr Poros alleged at trial substantial “gaps in the evidence”. Many were addressed by provision of “substantial additional documentary evidence” during trial’s adjournment after seven days’ hearing in April 2018, for its three-day resumption in August 2018.32

[27]	So far as the USD 130,000 second mortgage and later loan were concerned, the Judge found the former “most likely … was applied to meet family outgoings and living expenses and to meet the commitments of the parties which exceeded their modest income”,33 and the latter secured by “a third-party trust lien registered against the property” to prepare the property for sale.34 He accepted Ms Bax’s explanation the property was sold by foreclosure as “confirmed by bank and legal documentation and

30	Poros v Bax, above n 1, at [69].
31	At [75].
32	At [8].
33	At [65(f)].
34	At [68].

the subject property history”.35 The Judge considered “all of the available evidence suggests that the property was sold due to pressure from the bank arising from mortgage arrears”.36 He concluded “Ms Bax did not receive any benefit from the proceeds of the sale of Kirkwood Drive”.37

[28]	The Judge did not err in that conclusion, which was open to him on the evidence. The initial USD 875,000 mortgage had grown to USD 948,000 at the point of the property’s sale, consistent with defaults in payments. The bank’s documentation illustrated Ms Bax’s liability to it. Her lawyer’s letter contesting foreclosure identified the third-party loan.

[29]	The only inference available from the absence of more complete financial information is what Ms Bax may have had would not have assisted her. But the evidence also is what evidence she provided. Even so, the balance of the inference is only to reduce the weight of that evidence, because Mr Poros has no countervailing evidence to strengthen.38 The Judge’s finding, while not based on conclusive evidence, nonetheless was open to him.

—proceeds of sale from Athens property

[30]	Mr Poros claims the Judge erred in refusing to award interest on his share of the proceeds from the Athens property on 13 October 2016.39 The Judge concluded interest should not be paid, as his receipt “is offset against his share of the relationship debt owed by Ms Bax to Goldeye”.40 No submissions were addressed directly to the issue. In equalising the two sums, the Judge did not err.

35	At [70].
36	At [72].
37	At [74].
38 Perry Corporation v Ithaca (Custodians) Ltd [2004] 1 NZLR 731 (CA) at [154].
39    The same claim is raised in relation to the Kirkwood Drive proceeds at [24] above, and the $81,000 at [31] below. Given my findings in relation to those issues, the question does not arise but otherwise would be answered similarly.
40 Poros v Bax, above n 1, at [158].

—Ms Bax’s advance of $81,000 to Goldeye Trust

[31]	Mr Poros contends the Judge erred by not treating an entry in the Goldeye Trust accounts for the year to 31 March 2004 as an advance of relationship property by Ms Bax to the Trust.

[32]	The Goldeye Trust was established by deed dated 28 April 2000. On that date Ms Bax lent the Trust NZD 1,499,990.00. The Judge found:41

During 2001, 2002 and 2003, three gifts of NZD27,000 each were made by Ms Bax to Goldeye. The amount shown in the 31 March 2003 Statement of Financial Position reflects those gifts together totalling NZD81,000, and shows the debt to Ms Bax being $1,418,790.00. In the Statement of Financial Position dated 31 March 2004 an amount of NZD1,499,990 is again shown in the accounts as the amount owed to Ms Bax.

The Judge concluded the reversal of the tax-free gifting had been a change in the way the accounts were prepared: “[they] do not indicate Ms Bax advanced any money to Goldeye over and above the original loan …”.42 In other words, there was no advance of relationship property.

[33]	The Judge’s conclusion was available to him on the evidence. He has not erred.

—Goldeye Trust’s status

[34]	Mr Poros says the Judge erred in finding the Goldeye Trust was not a sham, and in failing to hold Ms Bax’s powers in relation to the Trust as relationship property “equal to the value of the net assets of the Goldeye Trust”.

[35]	As noted at [32], the Trust was established with Ms Bax’s NZD 1.499 m loan. The Judge found it used those funds to acquire a half-share in Blandford Lodge,43 a Matamata horse stud (the other half-share owned by the Kytare Family Trust,44 of which Ms Bax’s parents also are trustees).45

41	At [162].
42	At [163].
43	At [161].
44	At [174].
45	At [2(e)].

[36]	In 2009, Ms Bax requested the Goldeye Trust sell its half-share in Blandford Lodge, to give her access to the proceeds. The half-share was sold for more than twice the price of its original acquisition by the Trust, NZD 500,000 of the proceeds applied to reduce mortgage debt over the Trust’s Avondale property, and the balance paid into Ms Bax’s bank account,46 in part treated in the Trust’s accounts as a NZD 2.306 m loan to her.47

[37]	The Judge considered Ms Bax’s parents “could be criticised for the way they ran aspects of Goldeye”, but for articulated reasons did not consider they “surrendered control of the trust to Ms Bax to such an extent that it could be described as a sham or the alter ego of Ms Bax”.48 The Judge said:49
(1)	he deficiencies, even in totality, have not reached the level where [Ms Bax’s parents] could be said to have surrendered their responsibility as trustees and allowed Ms Bax to have assumed total control.

[38]	Mr Poros argues that is to disregard Ms Bax’s exclusive obtaining of any benefit from the Trust throughout its operation, exacerbated by Ms Bax’s sole signatory status on opening of its bank account in March 2013, and use of the account for her own purposes. He points additionally to her own solicitors only acting on the Trust’s sale of the Blandford Lodge half-share, her father’s receipt of the Athens’ property sale proceeds as trustee into his personal bank account, and the inadequacy of the Trust’s financial records.

[39]	But those points expressly or implicitly were taken into consideration by the Judge. He noted the trustees’ retention of control against Ms Bax’s interests.50 It was a conclusion open to him on the evidence. A ‘sham’, moreover, is “a pretence: a document that does not evidence the true common intention of the parties”.51 Here, it cannot be said no trust was intended to be created. Neither can it be said Ms Bax’s

46	At [176].
47	At [177].
48	At [172].
49	At [173].
50	At [172].
51 Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue [2008] NZSC 115, [2009] 2 NZLR 289 at [33]; affirmed in Clayton v Clayton [Vaughan Road Property Trust] [2016] NZSC 29 [2016] 1 NZLR 551 at [113].

powers in relation to the Trust are so broad no trust was created.52 The Judge did not err.

—NZD 2.306 m relationship debt owed by Ms Bax to the Goldeye Trust

[40]	Mr Poros says the Judge erred in concluding either NZD 2.306m was a loan to Ms Bax from the Goldeye Trust or, absent “credible evidence” the monies were used for s 20(1) purposes, was a relationship debt.

[41]	It appears common ground the Judge’s narration of the sale proceeds of the Trust’s half-share in Blandford Lodge errs. The Judge describes the purchase price as “NZD3,009,000.00”, distributed “NZD500,000.00 … to reduce the BNZ mortgage debt secured over [the Avondale property]” and “[t]he balance … paid” into Ms Bax’s HSBC Geneva account.53 But the evidence is the purchase price was NZD 3,759,070.50. Further, it appears accepted the NZD 3.260 m balance of proceeds were more widely distributed also to Ms Bax’s New York and New Zealand bank accounts (respectively, NZD 500,088.94 and NZD 30,000.00), and to a creditor (NZD 10,425.00). The deposit into Ms Bax’s HSBC Geneva account amounted to some NZD 2.700 m.

[42]	But the Judge was neither conducting, nor required to conduct, any forensic reconstruction of the Blandford Lodge proceeds. Instead, fully cognisant of the records’ shortcomings,54 the Judge concluded:55
In the absence of any other document, the best evidence of what was intended in respect of the Blan[d]ford Lodge proceeds is contained in the 2010 accounts of Goldeye, which from the outset record the advance as a loan to Ms Bax. All subsequent accounts continued to treat the funds as a loan. I place significant weight on the fact that the accounts were prepared at a time when no suggestion of separation existed.

Given the error in narration, the Judge’s reference to “Blan[d]ford Lodge proceeds” must be understood as meaning the amount of the advance or loan. The Judge is aware the periodic amount of the loan is an accounting calculation, rather than directly

52	Clayton v Clayton [Vaughan Road Property Trust], above n 51, at [128]–[130].
53	Poros v Bax, above n 1, at [176].
54	At [178]: “it is not possible to precisely trace the way in which those funds were used”.
55	At [186].

derived from the amount of the advance.56 Although Mr Noble casts aspersions on the accounts’ legitimacy, that is a matter going to their weight and to which the Judge gave consideration.57 The Judge did not err in finding a NZD 2.306m loan to Ms Bax from the Goldeye Trust.

[43]	Mr Noble focuses on the other distributions as justifying deductions in those amounts from the amount of the loan. I do not understand the logic. Blandford Lodge proceeds paid to Ms Bax in amounts exceeding the loan must be distributions to her, presumptively as separate property unless acquired for the couple’s common use or benefit,58 or used to acquire or improve other relationship property.59 If relationship property, its value is taken into account by the value of assets at the date of separation. The Judge expressly finds no evidence the funds were used to acquire undisclosed property or had been retained in undisclosed accounts. In all likelihood, as the Judge concluded:60
(1)	heir income was limited, and their expenses were only met by resort to capital assets. It is not difficult to extrapolate that funds advanced to Ms Bax were used to rent properties, renovate homes, acquire assets and maintain the lifestyle of the family.

Again, such was a conclusion available to him on the evidence. He did not err in determining the loan (and more) was incurred for at least s 20(1)(c), (d), and (e)’s purposes or benefit.

[44]	Mr Poros also asserts the lack of documentation of Ms Bax’s New York bank account supports an inference “the documents would not have favoured [her]”. As I have said,61 the only available inference is the documents may not have assisted her. But I cannot fathom what adverse impact the documents may have had: the $500,000 initially was separate property; if it did not become relationship property, it remained outside Mr Poros’ reach. It does not have effect to reduce the amount of the loan to Ms Bax, in a sum less than the balance deposited to her HSBC Geneva account.

56	At [184].
57	At [187].
58	Property (Relationships) Act 1976, s 8(1)(ee).
59	Section 9A(3).
60	Poros v Bax, above n 1, at [192].
61	At [29] above.

—relationship property used to purchase Avondale property

[45]	Mr Poros contends the Judge erred in concluding no amount of the Wells Fargo USD 130,000 credit facility was advanced to the Goldeye Trust for application as a deposit on the purchase of the Avondale property.

[46]	The Judge’s reasons for so concluding are the absence of any evidence of such payment into the Trust, the New Zealand property’s settlement six weeks before Ms Bax’s drawdown of funds in the United States, the Trust having sufficient funds to settle without resort to overseas funds, and Ms Bax’s and her father’s denials of overseas funds for the purchase being supported by the evidence.62

[47]	I do not have any basis to doubt his conclusion. The Judge did not err.

—Property (Relationships) Act 1976, s 44

[48]	Under each of the preceding two grounds of appeal, Mr Poros seeks orders under s 44 of the Property (Relationships) Act 1976 in relation to both the $2.306 m loan and the Avondale property. As I have explained,63 s 44 enables the making of orders to set aside dispositions of property made to defeat any person’s rights under the Act.

[49]	So far as the loan is concerned, Mr Noble relies on Ms Bax’s memorandum of guidance to the trustees, made contemporaneously with the Trust’s establishment, in which she indicates:

If a beneficiary is married, in order to protect the beneficiary from the possibility of a matrimonial property claim in the event of a breakdown of his or her marriage, you should take into consideration the stability of the marriage and the purpose to which a distribution would be applied in deciding whether to make the distribution:
i)	to a trust of which that beneficiary is a beneficiary (assuming this is legally possible);
ii)	by way of an interest free, repayable on demand loan;
iii)	outright to that beneficiary.

62	Poros v Bax, above n 1, at [65] and [197].
63	At [16] above.

[50]	The logic of the argument is, if simply a distribution to Ms Bax, her subsequent application of it to the couple’s lifestyle was to convert it into relationship property, to be valued by reference to relationship assets at the date of separation. But, as a relationship debt, it lies to be set off against that value. Hence, in terms of s 44, it is a disposition to defeat Mr Poros’ claim or rights under the Act. But the chain of logic is broken by the subsequent requirement Ms Bax apply the loan to the couple’s lifestyle. It is that application which gives Mr Poros any claim or right to her separate property. Thus the Trust’s earlier disposition to her as a loan cannot have been to defeat his claim or right. And it is “the disposing party’s knowledge of the effect the disposal will have on the other party’s rights” that matters.64 The disposal had no effect on Mr Poros’ rights.

[51]	Given my finding as to  funding the Avondale  property,65 I do  not  consider s 44’s application to it.

—BNZ mortgage over Victoria Road property

[52]	Although the unconditional agreement for sale and purchase of the Victoria Road property named “Ms Kylie Bax, Mr Spiros Poros and/or nominee” as purchaser, Ms Bax and Mr Poros lacked funds to pay its NZD 1.261 m purchase price. Ultimately, the property was acquired by the Goldeye Trust, funded from proceeds of sale of the Vestry Road property.66 In February 2014, BNZ advanced the Trust NZD 260,000, which the Trust provided to Ms Bax and Mr Poros for the property’s renovation and furnishing on terms they serviced all the property’s outgoings, including the mortgage.67 In May 2014, the couple separated. Ms Bax met the property’s outgoings thereafter.68 To value the Victoria Road property as relationship property, the Judge deducted the amount of the mortgage.69

[53]	On appeal, Mr Noble conducted an extensive forensic examination of transactions recorded in Ms Bax’s bank account statements during the periods prior to

64	Potter v Horsfall [2016] NZCA 514 at [41].
65	At [45]–[47] above.
66	Poros v Bax, above n 1, at [203]–[210].
67	At [213].
68	At [215].
69	At [217].

the BNZ mortgage and after the couple’s separation to conclude the mortgage was in substantial part to meet other of Ms Bax’s liabilities to the Goldeye Trust, alleged to have been incurred for her personal benefit. He calculates just over half the mortgage was not relationship debt.

[54]	Mr Noble’s assertion is drawn from entries in the Goldeye Trust’s BNZ bank account, which shows “loan funds” deposits of NZD 160,000 and NZD 100,000, and an “extra paymt” withdrawal of $159,000, in February 2014. Mr Noble contended “almost $159,000 was … deposited into [Ms] Bax’s BNZ bank account by Goldeye Trust from funds it borrowed from BNZ between 27 November 2012 and 23 April 2013” while the couple was living in Sydney. He then sought to trace the application of those funds to show they predominantly were applied to Ms Bax’s personal expenditure.

[55]	I cannot follow the logic, which must be founded on the proposition the Goldeye Trust’s BNZ bank account statements also serve to record the totality of the couple’s financial relationship with the Trust; that they are in effect a comprehensive proxy for that relationship. That is an improbable proposition, particularly given the close dealings between Ms Bax and her parents, unlikely to have been (and on particulars facts not) mediated exclusively through their bank’s accounting. The Judge found the mortgage was raised by the Trust for the Victoria Road property’s renovation and furnishing, because “the trustees … did not consider the renovations were required or that the Trust should be responsible for the costs of furnishing the home”.70 That finding is not disputed in its terms on appeal.

[56]	Ms Chambers says the analysis Mr Noble would have me accept was not raised before the Judge. I do not know what contrary evidence may have been raised against it. I will not enter into the analysis for a first time on appeal. The Judge did not err.

—occupation rent for the Victoria Road property

[57]	Mr Noble abandoned this head of issues on appeal. I therefore disregard it.

70	At [213].

—Family Proceedings Act 1980, s 182

[58]	The Goldeye Trust acquired the Avondale property on 20 July 2005, some eighteen months into the spouses’ relationship and four weeks prior to their marriage. The Trust was settled on terms its “beneficiaries” included Ms Bax, her “children, grandchildren and remoter issue”, her siblings or their issue, her parents, and:

any wife, husband, widow, widower, former wife or former husband for the time being of any Beneficiary …;

any person who is living or has lived with a Beneficiary … on a domestic basis in such a manner as if they were legally married to each other, although they may not be so married;

[59]	Under s 182, the first enquiry is of the existence of “any ante-nuptial or post- nuptial settlement made on the parties [to the marriage or civil union]”. A “generous approach” is taken, requiring only “there must be a connection or proximity between the settlement and the marriage”.71 Property acquired by a trust after it is settled can also come within the definition of settlement. This is because the settlement is “the trust itself and any trust property (whenever acquired) must be part of the settlement”.72

[60]	The Judge held “[d]espite there being an identifiable spouse when [the Avondale property] was purchased, there was a remoteness in the transaction”, principally by reason of Mr Poros’ lack of involvement with either the transaction or the property.73 If he was wrong in that, he:74
… would not exercise the discretion that exists to resettle any part of [the Avondale property] on Mr Poros because the acquisition … occurred prior to the parties’ marriage, utilising funds earned by Ms Bax either prior to the commencement of their relationship or having their origins in funds earned prior to the relationship, in circumstances where no direct contribution was made to [the Avondale property] by either party at any time during their relationship. There is nothing to indicate there was at any time an intention that Mr Poros receive any benefit from the [Avondale property], nor that he

71 Clayton v Clayton (Claymark Trust), above n 25, at [32], approving Ward v Ward  [2009] NZCA 139, [2009] 3 NZLR 336 at [27]; and [34], adapting Kidd v Van Den Brink HC Auckland CIV 2009-404-4694, 21 December 2009 (Harrison and Winkelmann JJ) at [18], and citing Kidd v Van Den Brink [2010] NZCA 169 at [8] and Re Public Trustee (SA) (1985) 10 Fam LR 610 at 622.
72 At [33], citing Ward v Ward [2009] NZCA 139, [2009] 3 NZLR 336 at [32]–[33].
73 Poros v Bax, above n 1, at [237].
74 At [238].

had at any time any reasonable expectation that any portion of the [Avondale] property would be settled on him.

[61]	Settlement of the Goldeye Trust is not a nuptial settlement. Its establishment in April 2000 is plainly in the discretionary interests of Ms Bax and such beneficiaries as may be associated with her. Even on a ‘generous approach’, it cannot be characterised as a settlement “made on the parties [to the marriage]”, which then was entirely without contemplation. Ms Bax’s parents, as trustees, conducted the Trust to acquire and dispose of property in the course of its operation, as was the settlor’s intention. Similarly, such is not in itself to make those settlements ‘on the parties to the marriage’.

[62]	The connection or proximity of the Avondale property settlement to Mr Poros solely is one of timing. The Judge found no relationship property had funded its acquisition, only Ms Bax’s separate property could have been contributed,75 the property was “self-supporting”, and neither Ms Bax nor Mr Poros otherwise were involved with the property’s acquisition or operation.76 Given the marked disaffection with which the trustees appear to have regarded Mr Poros, taken together with Ms Bax’s guidance to them to “consider the reasonable needs and requirements of my children as paramount and having priority over the needs and requirements of all other beneficiaries”, that timing alone is insufficient to establish sufficient connection or proximity between the Avondale property settlement and Ms Bax’s and Mr Poros’ marriage to qualify as a settlement made on them. The Judge did not err.

—costs

[63]	The Judge reserved costs, taking the preliminary view no costs order should be made as “none of the parties have been entirely successful with adverse findings having been made against all of them”.77 In a separate judgment of 18 October 2019,78 the Judge noted his subsequent awareness of Mr Poros’ rejection of without prejudice settlement offers which “would have placed him in a much better position than that

75	At [176].
76	At [200]–[201], and [237].
77	At [239].
78	Poros v Bax [2019] NZFC 8302.

finally determined by the Court”.79 Given the parties’ agreement the proceeding was categorised 3 for costs purposes, and applying a 25 per cent uplift – for Mr Poros’ unnecessary contribution to the time or expense of the proceeding by failing, without reasonable justification, to accept a settlement offer – the Judge ordered Mr Poros to pay each Ms Bax and the Goldeye Trust costs of NZD 53,100 and disbursements respectively of NZD 1,642.97 and NZD 2,197.80.80 In keeping with his initial inclination, the Judge only awarded costs, albeit at an increased rate, for steps taken in the proceeding after the first settlement offer was rejected. Such is entirely orthodox, and wholly within the Judge’s discretion.

[64]	I apprehend Mr Poros’ challenge to the costs award predominantly is founded on apprehension of his success on appeal. As that is not the case, but in any event, the Judge did not err.

Cross-appeal: void marriage

[65]	The parties agree the Judge lacked jurisdiction to set aside the dissolution order.81 Thus the Judge did not err.

[66]	Instead, although not raised as such on Ms Bax’s notice of cross-appeal, Ms Chambers urges I exercise my inherent jurisdiction to do justice by setting aside the dissolution order as ‘illogical’ on the marriage’s void status.

[67]	That would not be just on this appeal, as it would undermine the Judge’s reliance on the dissolution order to give him jurisdiction for the s 182 order he made,82 which otherwise is not challenged on appeal. Also, had the marriage been declared void by the Family Court, rather than the Nevada court, the Judge would have retained jurisdiction to make s 182 orders.83 The interesting cross-border issues arising from the Nevada court’s intercession are not justly addressed on this appeal.

79	At [47].
80	At [52]–[55] and [62].
81	Poros v Bax, above n 1, at [61].
82	Poros v Bax, above n 1, at [249].
83	Family Proceedings Act 1980, s 182(1)’s reference to Part 4, and Part 4’s s 31.

Result

[68]	Mr Poros’ appeal is dismissed.

[69]	Ms Bax’s cross-appeal is dismissed.

Costs

[70]	Noting Mr Poros’ status as a aided person,84 I reserve costs for determination on short memoranda of no more than five pages – annexing a single-page table setting out any contended allowable steps, time allocation, and daily recovery rate – to be filed and served by Ms Bax within ten working days of the date of this judgment, with any response and reply to be filed within five working day intervals after service.

—Jagose J

84	Legal Services Act 2011, s 45.