Brown-Douglas v Hansford
[2024] NZHC 1554
•14 June 2024
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV-2023-419-000029
[2024] NZHC 1554
BETWEEN RENEE JEANETTE BROWN-DOUGLAS
Appellant
AND
AVON HANSFORD
Respondent
Hearing: 30 April 2024 Appearances:
K L Hoult for Appellant
R P Sutton for Respondent
Judgment:
14 June 2024
JUDGMENT OF ANDREW J
This judgment was delivered by Justice Andrew on 14 June 2024 at 11.00 am
pursuant to r 11.5 of the High Court Rules 2016 Registrar / Deputy Registrar
Date ……………………………..
BROWN-DOUGLAS v HANSFORD [2024] NZHC 1554 [14 June 2024]
Introduction
[1] This is an appeal against a relationship property decision of the Family Court.1 At issue is whether there was a disposition of relationship property, a family home, under s 44C of the Property (Relationships) Act 1976 (the PRA). Section 44C(2) provides for the Court to award compensation where a disposition of property to a trust has the effect of defeating a claim or rights of one of the partners.
[2] The other asset at issue is the yacht Windborne which is used for a charter business. The yacht was originally the separate property of Mr Hansford. Ms Brown- Douglas claims that 50 per cent of the value of the yacht Windborne (being $162,500), is relationship property pursuant to s 8(1)(ee) of the PRA. Alternatively, she seeks compensation under s 17 of the PRA (sustenance of separate property).
[3] There is also a post-separation adjustment issue (s 18B) that I need to address. Ms Brown-Douglas makes a claim under s 18B in relation to payments she made to the mortgage on the family home.
Factual background
[4] In 2002, Mr Hansford purchased the yacht Windborne. Before, during and after his relationship with Ms Brown-Douglas, Mr Hansford operated a charter business aboard the yacht. He was a sole trader. The current value of the yacht is
$325,000.
[5] In June 2005, Mr Hansford and his former wife, Ms Moore, became the registered proprietors of the property at 18 Carina Way, Whitianga (the Carina Way property).
[6] In December 2010, Ms Brown-Douglas settled the Albatross Trust. Ms Brown- Douglas and NP Legal Trustees Ltd are the trustees. The preferred beneficiary is Ms Brown-Douglas. The other beneficiaries are the children, grandchildren and great- grandchildren of Ms Brown-Douglas as well as any trust of which any of the beneficiaries are a beneficiary that the trustees have received written notice of
1 Brown-Douglas v Hansford [2022] NZFC 858.
(beneficiaries). The final beneficiaries are Ms Brown-Douglas’ children and grandchildren. Ms Brown-Douglas also has the power to nominate further beneficiaries in writing.
[7] In 2021, the Family Court determined that the parties were in a de facto relationship between April 2011 and September 2014.2 Each had been in a previous relationship prior to commencing their relationship together. When their previous separations were finalised, their respective positions concerning their relationship property were as follows:
(a)Ms Brown-Douglas received the settlement sum of $185,000 from the division of her relationship property with her ex-husband, Mr Stephen Brown-Douglas.
(b)Mr Hansford retained his share of the property at Carina Way and full ownership of the yacht Windborne from his separation with Ms Moore in exchange for a settlement payment of $239,500.
[8] The parties have no children together, although Ms Brown-Douglas has children from her previous relationship.
[9] In April or May 2011, Ms Brown-Douglas moved into the Carina Way property. At that time the property was owned by Mr Hansford and his ex-wife, Ms Moore, in equal shares. The parties subsequently lived together at the property; it was their principal residence until they separated in 2014.
[10] On 14 May 2012, Mr Hansford settled by agreement relationship property issues arising from his relationship with Ms Moore. On that day, a series of transfers of ownership for the Carina Way property occurred:
(a)A mortgage to the BNZ was discharged;
2 Brown-Douglas v Hansford [2021] NZFC 9849.
(b)The title of the property was transferred to Mr Hansford in his sole name;
(c)The title of the property was immediately (at the same time) transferred to Mr Hansford and the trustees of the Albatross Trust in equal shares; and
(d)A new mortgage to the BNZ was registered. The amount secured was
$357,693.50.
[11] In addition, on that same day, Mr Hansford paid Ms Moore $239,500 pursuant to their settlement agreement. That agreement was not before me, however I accept the evidence of Mr Hansford in respect of it.
[12] Following the parties’ separation in September 2014, Ms Brown-Douglas and her children remained in occupation of the Carina Way property until an order for sale was made (by consent) in 2018 following an application to the Court by Mr Hansford.
[13]In October 2018, the Carina Way property was sold to a third party for
$670,000. As of 15 January 2020, the net sale proceeds of $327,490 (after discharging the mortgage over the property and making interim distributions to each party of
$50,000) are held in the trust account of Rennie Cox, solicitors.
Procedural history
[14] Mr Hansford originally opposed jurisdiction. His position was that the parties had been in a relationship for under three years’ duration.
[15] Following a hearing, the Judge made a determination that the parties had been in a de facto relationship for more than three years and accordingly there was jurisdiction for the Court to make orders under the PRA.3
3 Brown-Douglas v Hansford, above n 2.
[16] On 22 December 2021, the Judge made timetabling directions. They were not complied with by Mr Hansford.
[17] On 29 September 2022, the Judge refused an application by Mr Hansford to file an affidavit out of time, and the proceedings were set down for a hearing.
[18] Ms Brown-Douglas and her counsel then clearly anticipated that the hearing would proceed by way of formal proof. Written submissions in anticipation of a formal proof hearing were filed by Mrs Hoult.
[19] The hearing did not proceed by way of formal proof. Mr Hansford appeared and was represented by counsel. Both parties were cross-examined and made submissions. The Judge noted that Mr Hansford’s lack of evidence “made the resolution of what should have been otherwise straightforward issues, difficult.”4
Decision of the Family Court
The Carina Way property
[20] The Family Court Judge (the Judge) held that the Carina Way property was a relationship home. She noted that the parties were living in the property as at the date of separation. She noted it was in part owned by a family trust “which is not relationship property.” The other half was, however, owned by Mr Hansford and therefore it fell within the definition of the family home.5
[21] The Judge referred to the purpose of the PRA, identified in s 1M, namely the recognition of the equal contribution of both partners and the provision of a just division of relationship property when the relationship ends.
[22] The Judge then addressed the application of ss 44 and 44C of the PRA. She held that under s 44 the property does not have to be relationship property. However, under s 44, the disposition must have the effect of defeating the other party’s rights under the PRA. The Judge held that there was no evidence to support the grounds
4 Brown-Douglas v Hansford, above n 1, at [12].
5 Brown-Douglas v Hansford, above n 1, at [20].
under s 44 being made out. This was because s 44 requires the disposition be made with the intention of defeating the other party’s rights. There was no evidential foundation to support the conclusion that the disposition to the Albatross Trust was made with an intent to defeat Mr Hansford’s rights.6 That finding is not challenged on appeal.
[23] In addressing the application of s 44C, the Judge held that the issue for decision was whether the disposition to the Albatross Trust was a disposition of relationship property.7 In concluding that there was a disposition of relationship property, the Judge concluded that the property was the parties’ relationship home for the following reasons:8
(a)The parties were living in the home prior to the transfer to the Albatross Trust;
(b)The property at the relevant stage was transferred to Mr Hansford in his sole name on 14 May 2012. Prior to that, Mr Hansford and his previous wife had been the registered proprietors;
(c)The effect of a disposition to the Albatross Trust therefore was that it had removed the half-share of the property from the relationship property pool; and
(d)The parties paid the mortgage payments personally for the duration of the relationship until separation. Therefore, those payments were relationship property.
[24] In exercising her discretion under s 44C, the Judge then held that it was just and equitable that there be a transfer of 50 per cent of the half-share of the relationship property owned by the Albatross Trust to Mr Hansford:9
6 Brown-Douglas v Hansford, above n 1, at [27].
7 Brown-Douglas v Hansford, above n 1, at [29].
8 Brown-Douglas v Hansford, above n 1, at [33].
9 Brown-Douglas v Hansford, above n 1, at [34].
I also need to take into consideration the principles under the PRA and given the duration of the parties’ relationship, in my view it is just and equitable that there be a transfer of relationship property that is 50 per cent to Mr Hansford. Leaving the other half-share in the ownership of the trust which in effect would cancel out the claim by Ms Brown-Douglas that she is entitled to a half- share of relationship property held by Mr Hansford and in real terms effects a 50 per cent distribution of relationship property.
The yacht Windborne
[25] The Judge held that Windborne was not relationship property at the date of separation. It was not property that was purchased in anticipation of the relationship; it was purchased well prior to the parties commencing their relationship.10
[26] The Judge then noted that the only other way in which a property may have become relationship property was pursuant to s 2 of the PRA, namely that the boat was used wholly or principally for family purposes.
[27] The Judge held that there was an absence of evidence that the yacht was used wholly or principally for family purposes. She therefore rejected Ms Brown-Douglas’ claim for a share of the value of the yacht Windborne or compensation with respect to it.
[28] The Judge was also asked to make a determination as to any claim Ms Brown- Douglas had in respect of Windborne Charters. This is the charter business which was run using Windborne. Ms Brown-Douglas sought to keep the whole of a business called the Blackbeard Smokehouse which was formed during the relationship and was relationship property in exchange for her contributions to the charter business.
[29] The Judge accepted that some of the value of the charter business was likely relationship property as a result of Ms Brown-Douglas’ contributions either increasing the value of the business or sustaining it. The Judge therefore allowed Ms Brown- Douglas to keep all of the proceeds from the sale of the Blackbeard Smokehouse as compensation for this. That finding is not challenged on appeal.
10 Brown-Douglas v Hansford, above n 1, at [35].
Post-separation contributions
[30] The Judge noted Ms Brown-Douglas’ claim that she had made post-separation contributions to the Carina Way property in the amount of $99,758.31. She noted that under s 18B of the PRA, the Court has a discretion whether to award compensation for payments made post-separation.11
[31] The Judge reduced the amount of $99,758.31 claimed by Ms Brown-Douglas to a figure of $75,132.31 by deducting the figure of $24,626. The Judge held that Ms Brown-Douglas would have been already compensated for that figure by a reduction in the debt owed by the Albatross Trust. The Judge then concluded that she was left to consider a half-share of post-separation contributions in the amount of
$36,424.88.12
[32] The Judge then noted that Ms Brown-Douglas had had the occupation of the Carina Way home post-separation. She also noted that Ms Brown-Douglas had paid rent for that property in the early stages of the relationship in the amount of $350.00 per week.
[33] The Judge concluded that she was not prepared to exercise her discretion in favour of Ms Brown-Douglas under s 18B.
Relevant legal principles
[34] This is a general appeal to be conducted by way of a rehearing.13 The appellant bears the onus of satisfying the appeal court that it should differ from the decision under appeal. It is only if the appeal court considers that the appealed decision is wrong that it is justified in interfering with it.14
[35] This Court is permitted, and required, to arrive at its own conclusion of the merits, in respect of matters of both facts and law.15 Although an appellate court may
11 Brown-Douglas v Hansford, above n 1, at [49].
12 Brown-Douglas v Hansford, above n 1, at [51].
13 High Court Rules 2016, r 20.18.
14 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141, at [4].
15 Austin, Nichols & Co Inc v Stichting Lodestar, above n 14, at [5].
properly hesitate to interfere where the first instance court enjoys an advantage, such as in assessing credibility,16 and can recognise the limitations of the record as a means of re-visiting factual findings,17 it is not required, or permitted, to intuitively defer to the lower court’s evaluation as to the weight to be afforded to the evidence.18
Analysis and decision
[36]There are three issues I need to address:
(a)Did the Judge have power to make an order under s 44C?
(b)Did the Judge err in failing to consider s 8(1)(ee) of the PRA and/or s 17 with respect to Windborne? If so, should I make orders under either of those sections?
(c)Did the Judge err in declining Ms Brown-Douglas’ claim under s 18B (post-separation contributions)?
Did the Judge have power to make an order under s 44C?
[37] The object of s 44C is to strengthen the PRA in relation to trusts where a disposition of relationship property has the effect of defeating one of the parties’ rights under the legislation, but where there is no intention, or at least no evidence of an intention, to defeat that party’s rights.19
[38]The requirements of s 44C are that the disposition must be:20
(a)To a trust;
(b)Of relationship property;
16 Austin, Nichols & Co Inc v Stichting Lodestar, above n 14, at [5].
17 Emmerston v A Professional Conduct Committee of the Medical Council of New Zealand [2017] NZHC 2847 at [77], citing R v Bertrand (1867) LR 1 PC 520
18 Austin, Nichols & Co Inc v Stichting Lodestar, above n 14, at [16].
19 Nation v Nation [2005] 3 NZLR 46, at [143].
20 Nation v Nation, above n 19, at [144].
(c)Made since the marriage or de facto relationship began;
(d)By either or both spouses or de facto partners;
(e)One to which s 44 does not apply; and
(f)With the effect of defeating the claim or claims of one of the spouses or partners.
[39] If the Court concludes that s 44C(1) is satisfied, then it can exercise its discretion to make an order pursuant to s 44C(2) if it considers it just to do so.
[40] Section 44C(4) provides guidance to the Court as to the factors to be taken into account in deciding whether it is just to exercise its discretion:
(a)The value of the relationship property disposed of to the trust;
(b)The value of the relationship property available for division;
(c)The date or dates on which relationship property was disposed of to the trust;
(d)Whether the trust gave consideration for the property and, if so, the amount of the consideration;
(e)Whether the spouses or partners or either of them is or has been a beneficiary of the trust; and
(f)Any other relevant matter.
[41] In Nation v Nation, the Court held that the remedies under s 44C are compensatory. They are designed to put the applicant in the position that they would have been if the disposition had not occurred.
[42] In this Court, Ms Brown-Douglas challenges the Family Court Judge’s determination that the effect of the disposition of the half-share to the Albatross Trust was that it removed a “half-share of the property from the relationship property pool”. Ms Brown-Douglas submits that the disposition of a half-share of the Carina Way property to the trustees was not a disposition of relationship property, and the Judge therefore lacked jurisdiction to make an order under s 44C. She relies on the uncontested evidence she gave in the court below:
(a)The purchase price of the Carina Way property from Mr Hansford and Ms Moore was $480,000;
(b)A half-share of the purchase price payable by the Albatross trustees was
$240,000;
(c)The Albatross trustees funded their half-share purchase by way of cash of $188,782 and a loan of $51,218;
(d)As at 14 May 2012, Mr Hansford owned a half-share of the Carina Way property. He did not own 100 per cent of that property;
(e)As at the settlement date of 14 May 2012, Ms Moore was paid $239,500 by way of settlement as between Ms Moore and Mr Hansford;
(f)Based on the sale value of $480,000, the payment to Ms Moore of
$239,500 represented the purchase of her half-share of the Carina Way property;
(g)In addition to the $239,500 required to be paid to Ms Moore by Mr Hansford, as at 14 May 2012, Mr Hansford repaid the existing BNZ borrowing in the amount of $114,988.37.
(h)As at 14 May 2012, Mr Hansford and the trustees, jointly borrowed
$357,693.50 from the BNZ secured by way of mortgage against the Carina Way property.
[43] Based on that uncontested evidence, Ms Brown-Douglas further submits that the proper conclusion to be drawn is as follows:
(a)Prior to 14 May 2012, Mr Hansford owned 50 per cent of the Carina Way property;
(b)On 14 May 2012, the half-share of the Carina Way property owned by Mr Hansford was relationship property pursuant to s 8 of the PRA, because it was a property occupied by Mr Hansford and Ms Brown- Douglas;
(c)As at 14 May 2012, the remaining half-share of the Carina Way property was not owned by either party but rather, was owned by Ms Moore. Therefore, her half-share was not relationship property;
(d)The half-share of the property that belonged to Ms Moore was purchased by the Albatross trustees on 14 May 2012.
[44] Ms Brown-Douglas says that the half-share of the property was acquired by the Albatross Trust directly, using separate funds owned by that Trust and not sourced from relationship property. On the basis of the authorities X v Y21 and P v P,22 she says that a disposition of relationship property has not occurred. The purchase was made directly by the Albatross trustees, and relationship property did not fund the purchase.
[45] In both X v Y and P v P, the Court held that where a trust acquires property as purchaser from a third party, s 44C does not apply. That is because the disposal is not by either, or both, spouses or partners to the trust.
[46] In his submissions, Mr Sutton, for Mr Hansford, contended that the Judge’s decision under s 44C was an orthodox one, returning the parties to the position they would have been in but for the disposition to the Albatross Trust. He noted that without the compensatory order made by the Judge the effect would be that
21 X v Y [2015] NZFLR 664.
22 P v P [2005] NZFLR 689.
Mr Hansford’s 50 per cent share of the family home would be reduced to 25 per cent, with Ms Brown-Douglas retaining 25 per cent and the Albatross Trust retaining 50 per cent of the net sale proceeds.
[47] The starting point, as the Judge correctly noted, is that the Carina Way property was the family home. The parties were living in the property as at the date of separation. It was the dwellinghouse that they both habitually used as the principal family residence.23
[48] As the Judge correctly concluded, the half of the property owned by Mr Hansford fell within the definition of a family home and was relationship property under s 8.
[49] It is against that background, and the sequence of the particular transactions that took place on 14 May 2012, that the issue of whether there was a disposition to the Trust under s 44C falls for determination.
[50] In my view, it is necessary to consider the substance of the transactions that occurred on 14 May 2012. The truly critical issue that arises is whether the disposition to the Trust was a disposition of relationship property that had the effect of defeating the claims of Mr Hansford under the PRA. Unless those requirements are made out, the discretionary power to award compensation under s 44C is not available.
[51] The Judge was clearly and understandably frustrated by a lack of evidence from Mr Hansford and, in particular, what must have been his first-hand knowledge of the critical transactions.24 However, I find that she was in error in concluding that the effect of the disposition to the Albatross Trust was that it removed the half-share of the property from the relationship property pool. In reality, the 50 per cent share of the property transferred to the Albatross Trust was never part of the Brown-Douglas and Hansford relationship property pool.
23 Property (Relationships) Act, s 2, and Uyue v Zhou [2024] NZCA 145 at [12].
24 At [12] of the judgment.
[52] As Mrs Hoult submitted, in substance what occurred on 14 May 2012 was that the half-share of the property that previously belonged to Ms Moore, Mr Hansford’s former wife, was purchased by the trustees for full value, using separate funds owned by the Albatross Trust and not sourced from relationship property. $188,782 was advanced by way of cash. The source of these funds was the relationship property settlement between Ms Brown-Douglas and her ex-husband. The additional $51,218 was sourced by way of a loan. That loan was a joint loan between the Albatross Trustees and Mr Hansford, secured by way of mortgage, for $357,693.50, but I accept that at least $51,218 of that was attributable to the Albatross Trust for their purchase of a half-share of the property. This means Ms Moore’s share of the property never became relationship property in respect of the relationship between Ms Brown- Douglas and Mr Hansford.
[53] The joint loan enabled Mr Hansford to repay existing BNZ borrowing in the amount of $114,988.37 as well as making the required payment to Ms Moore. If not for the joint loan, Mr Hansford would likely have to have sold the property to meet his obligations.
[54] The effect of the contemporaneous transactions on 14 May 2012 was not to defeat or deprive Mr Hansford of any claim to the family home. Rather, those arrangements allowed him to retain his half-share in the home after meeting his significant obligations to both his former wife and the bank.
[55] I conclude that the requirements of s 44C were not made out and the Judge therefore did not have the power to make an award under that section.
[56] Even if I am wrong in that conclusion, I would have found that the Judge was in error in the exercise of her discretion under s 44C to make a compensatory adjustment. The value of the consideration applied by the Albatross trustees and the circumstances of the disposition (including the Albatross Trust taking on a significant mortgage obligation which was to the benefit of Mr Hansford) in exchange for their
half-share of the property meant that the exercise of the discretion, if the power existed, was, in my view, plainly wrong.25
[57] It may be, as Mrs Hoult accepted, that the loan and interest payments paid during the parties’ relationship does qualify as the application of relationship property for the purposes of s 44C. However, it was incumbent upon Mr Hansford to put evidence of the value/quantum of the relationship property he says he was deprived of. He did not do so.
The yacht Windborne
[58]Ms Brown-Douglas contends that the Judge erred in fact and law:
(a)In finding that the yacht Windborne was not relationship property because it was purchased prior to the parties’ relationship commencing;
(b)In finding the provisions of s 8 of the PRA did not apply to the yacht
Windborne; and
(c)Alternatively, in failing to provide her with compensation from Mr Hansford with respect to the yacht Windborne pursuant to s 17 of the PRA.
[59] In particular, Ms Brown-Douglas contends that the Judge erred in law in failing to consider ss 8(1)(ee) and 17 of the PRA.
[60] Section 8(1)(ee) of the PRA provides that where property has been acquired after the beginning of co-habitation for the common use or common benefit of the parties, then that property is relationship property, if it was acquired using separate property.
25 May v May (1982) 1 NZFLR 165 (CA); see also Kacem v Bashier [2010] NZSC 112, [2011] 2 NZLR 1.
[61] Section 17 of the PRA provides that the Court may make an adjustment in the parties’ share of relationship property where the separate property of a spouse or partner has been sustained by:
(a)The application of relationship property; or
(b)The actions of the other spouse or partner.
[62] Ms Brown-Douglas contends that as at the commencement of her relationship with Mr Hansford in 2011, he was the owner as to a half-share of the yacht Windborne. She says that the other half was owned by Ms Moore. Ms Brown-Douglas contends that a clear inference can be drawn that as at 14 May 2012, Mr Hansford paid Ms Moore for her half-share of Windborne. The funds used were the new borrowings from the BNZ mortgage.
[63]Ms Brown-Douglas further argues as follows:
(a)Mr Hansford purchased Ms Moore’s half-share of the yacht Windborne after the relationship had commenced with Ms Brown-Douglas. Accordingly, at a minimum, a half-share of the Windborne yacht is relationship property pursuant to s 8(1)(ee). This is because:
(i)a half-share of the yacht Windborne was purchased after the commencement of the parties’ relationship; and
(ii)the yacht Windborne was purchased for the common use or benefit of both parties.
[64] In reliance on those submissions, Ms Brown-Douglas claims: the value of the yacht Windborne is $325,000 so that a half-share of that amount is $162,500. At a minimum, pursuant to s 8(1)(ee), the half-share of $162,500 is relationship property. If that amount is then divided equally, the amount payable by Mr Hansford to her with respect to the yacht Windborne is $81,250.
[65] I find that there is no basis for disturbing the Judge’s findings that the yacht Windborne was not purchased in anticipation of a relationship. As she found, the yacht was purchased well prior to the parties commencing their relationship. I also agree with her finding that the yacht was not used wholly or principally for family purposes and therefore was not a family chattel. Her Honour was best placed to assess the evidence and reached the conclusion that the primary use of the boat was for a charter business. I further find that s 8(1)(ee) is not applicable. That section only applies if the property is acquired out of property owned by either spouse or partner or by both of them before the de facto relationship began. On the appellants own case, the source of the payment to Ms Moore for her share of Windborne was further borrowing from BNZ. Therefore, s 8(1)(ee) does not apply and the Judge was not in error to not address it.
[66] However, I find that the Judge was in error in failing to give consideration to s 17 of the PRA. That provision was expressly addressed by counsel for Ms Brown- Douglas in her submissions in the Family Court. However, the Judge did not address them at all. She was required to do so.
[67] Again, I accept and acknowledge the obvious and justified frustration expressed by the Judge at the lack of evidence in particular from Mr Hansford on this and other issues. In the ordinary case, an appropriate response from this Court would be to remit the matter back to the Family Court for her Honour to address the application of s 17. However, where the amount at issue is modest, the financial capacity of the parties to sustain further litigation limited and a real risk of further non- engagement, I decline to adopt that approach. I will consider as part of my general powers on appeal, the claims under s17.
[68] As to the claim under s 17, I note that to “sustain property” is a higher threshold than to assist in relation to it.26 The funds that Ms Brown-Douglas says were used by Mr Hansford to pay his ex-wife, Ms Moore, for her share of Windborne were borrowings taken on by the Albatross Trust and not by her (I accept that Ms Brown- Douglas did apply personal funds to the ongoing mortgage commitments). As to her
Cosseo v Cosseo [2018] NZHC 2779., [2019] NZFLR 156 at [73], citing Hebberd v Hebberd
[1992] 3 NZLR 517 (CA) at 521 and Mitchell v Mitchell (1982) 2 NZFLR 182 (HC) at 188.
personal actions, I find that Ms Brown-Douglas’ indirect contributions to the yacht
Windborne are too remote to have sustained the value of the vessel.
[69] I also record the position of Ms Brown-Douglas in her formal proof submissions dated 22 September 2022:
In the interests of obtaining final orders, Ms Brown-Douglas is prepared to put to one aside any claim that she may have against the boat Windborne and the associated charter business. Accordingly, in the context of the other orders sought by Ms Brown-Douglas, she agrees to an order being made that Windborne and any associated business shall be Mr Hansford’s separate property.
[70] I accordingly dismiss Ms Brown-Douglas’ claim under s 17 of the PRA. The appeal in relation to the yacht Windborne fails.
Post-separation contributions – s 18B
[71] The evidence for Ms Brown-Douglas was that she had made post-separation contributions to the Carina Way property in the amount of $99,758.31. She claimed half of that amount by way of post-separation contributions under s 18B of the PRA.
[72] On appeal, she does not challenge the decision of the Judge to reduce the claimed amount of $99,758.31 to $75,132.31 (by deducting $24,626 that her Honour held would have been a reduction in the debt related to the Albatross Trust). Ms Brown-Douglas accepts that the general approach taken to the starting point of quantum was open to the Judge.
[73] However, Ms Brown-Douglas does challenge the Judge’s exercise of her discretion under s 18B not to award any compensation for post-separation contributions.
[74]Mrs Hoult submitted as follows:
(a)It is settled law that pursuant to s 18B, a compensatory figure is payable to a party who makes contributions to the de facto relationship following separation.
(b)To continue paying all loan, interest and other outgoings for the Carina Way property since separation (as Ms Brown-Douglas did) amounted to post-separation contributions to the de facto relationship after separation.27
(c)In a situation where her Honour ordered that Ms Brown-Douglas was to receive no relationship property from the Carina Way property because the compensatory figure she held was payable pursuant to s 44C, it is entirely unjust to compound Ms Brown-Douglas’ loss by failing to provide her with an order for post-separation contributions.
[75] I accept that there is merit to Mrs Hoult’s submission about the Judge’s finding of a lack of evidence with respect to maintenance payments. Ms Brown-Douglas did provide the Court with detailed financial calculations relating to the reduction of loan and principal made by her personally and the amount of house insurance, rates and house maintenance paid.
[76] However, I am not persuaded that ultimately the Judge was in error in exercising her discretion not to award any compensation under s 18B. Her Honour was entitled to take into account the benefit that Ms Brown-Douglas enjoyed from her occupation of the home post-separation and the submission made by Mrs Hoult of a compounding loss because of the Judge’s decision under s 44C no longer applies given I have reversed that decision.
[77] I decline to disturb the Judge’s finding in relation to the s 18B issue of post- separation contributions. The discretion was not exercised in accordance with a wrong principle or was otherwise plainly wrong.28
Result
[78]The appeal is allowed in part and on the following basis:
27 Chong v Speller [2005] NZFLR 400 (HC).
28 May v May, above n 25, at 170.
(a)The decision of the Judge to make an order under s 44C ordering the net proceeds from the sale of the Carina Way property to be divided 50 per cent to Mr Hansford and 50 per cent to the Albatross Trust is quashed. Instead, I make an order that the net proceeds are to be divided 50 per cent to the Albatross Trust, 25 per cent to Mr Hansford and 25 per cent to Ms Brown-Douglas;
(b)The appeal in relation to the yacht Windborne is dismissed;
(c)The appeal against the Judge’s finding not to make any compensation order under s 18B (post-separation contributions) is dismissed.
[79] As to costs, having succeeded, I am of the preliminary opinion that Ms Brown- Douglas is entitled to costs and on a 2B basis plus disbursements. My initial assessment is that there should be no reduction in costs on account of the fact that Ms Brown-Douglas’ appeal in relation to both the yacht Windborne and s 18B is dismissed.
[80] If the parties cannot agree on costs, then memoranda are to be filed (no more than three pages) within 21 days.
Andrew J
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