It is one of New Zealand’s biggest-ever divorce settlements, and a small fortune is being spent on accountants and lawyers as it drags on. At stake is a claimed (but disputed) $59 million worth of relationship property here and across the Tasman, as well as a large superannuation fund. Tim and Sophie Biggs are both now living in Australia. He is involved with the agricultural investment business Laguna Bay. Assets being scrutinised include the $8m-plus former family home on Closeburn Station, overlooking Lake Wakatipu (now on the market).
Tim and Sophie Biggs were together for six years, married for five, with one three-year-old child resulting from the relationship. Sophie filed an application under the Property (Relationships) Act shortly after their split, and by early 2018 her legal and accounting expenses were in excess of $300,000. She is seeking a share of the wealth owned by trusts and companies she says Tim Biggs controlled, and to which she had added value. Some of the property is beyond the reach of New Zealand courts.
Tim seeks to protect assets which he says represent wealth he held prior to the relationship. Sophie Biggs’ claims rest in part on her having performed “the role of homemaker and caregiver for the couple’s child, by entertaining corporate clients, and by assisting and supporting the husband with his various business ventures”. His version is that he was at home a lot himself, sharing that domestic load, his wife was not involved professionally with clients, and work did not consume a lot of his time.
Interesting issues have arisen:
Sophie Biggs sought an order that on settlement of the sale of the family home, she was to receive half of the net sale proceeds, with the other half being held until her other claims were settled. The High Court noted that an interim distribution must be less than the applicant’s ultimate potential share of relationship property, and should take into account needs and circumstances. The risk of Tim Biggs not paying any judgment debt was negligible, so there was no reason why he should not also receive a share of the sale proceeds. The Court ordered a payment of $200,000 as an interim distribution, to assist with her legal and accounting fees. Upon the sale of the family home the $200,000 was to be repaid to Mr Biggs from her share of the sale proceeds.
The Court’s thinking here was that the sum ordered should not be so small as to leave the applicant financially stressed, and make it difficult for her to receive necessary legal and accounting advice. Nor should it be an amount that encouraged a mindset of unlimited funds with which to pursue claims through litigation.
Now, the Court of Appeal has decided that the interim payment of $200,000 is “too conservative”. Mr Biggs must pay $400,000 to his ex-wife. The assumption the Court of Appeal makes is that “her claim to a share of separate property may be vindicated, and we accept that valuation and legal costs reasonably associated with the claim will be considerable.”
Then there is the discovery process, which will be of interest to many people in corporate life, or contracting to businesses. There have been extensive discovery requests. Sophie Biggs wanted her accountant to audit how trusts and companies had been established, and how they had operated during and after the marriage. The accountant sought to do that by looking not only at the usual records like annual accounts, but also by examining bank statements, email correspondence, work papers and general ledgers.
The High Court’s thinking regarding discovery was that it must be reasonably necessary, not unduly onerous. Sophie Biggs’ requests were excessive and disproportionate, had led to delays and significant costs, and had impeded resolution and fostered an intensely adversarial approach. The Court of Appeal, though, has ordered more discovery, to ascertain how much time Tim Biggs did put into his business affairs. The Court says it has relevance, given Sophie Biggs’ assertions.
The High Court had things to say about the role of legal and other professional advisers. Counsel have a responsibility, it said, to have proceedings resolved inexpensively and efficiently, commensurate with a just resolution. This big, lengthy case will be instructive for practitioners, but also for couples involved in these high-stakes arguments. Costs in even the biggest of separations need not approach half a million dollars.
This case has since been appealed to the New Zealand Court of Appeal.