Harrison v Harrison - [2013] NZHC 2181

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-002424 [2013] NZHC 2181

BETWEEN
MARIA SIMONE HARRISON AND

ANGELA KAREN HARRISON Plaintiffs

AND

PATRICK DAVID HARRISON Defendant

Hearing: 14 March 2013

Counsel:

A C C Hooker for Plaintiffs
D A T Chambers QC for Defendant

Judgment:

27 August 2013

JUDGMENT OF KEANE J

This judgment was delivered by on 27 August 2013 at 12pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar
Date:

Solicitors:
A Hooker, Auckland
B Hopkins, Auckland

HARRISON v HARRISON [2013] NZHC 2181 [27 August 2013]

[1] On 19 October 2009 Maria Harrison and Patrick Harrison, who had separated in December 2007 after a marriage exceeding 20 years, entered into a separation and relationship property agreement first in their personal capacities; and then also in their capacities, with Michael Simpson, as trustees of the Riley Business Trust.

[2] The Riley Business Trust owned 47 per cent of the shares of Carpet One NZ Limited, an asset central to their division of property. The property they agreed to divide was indeed, as the preamble to their agreement says, largely held by trusts, the Riley Business Trust and by their own mirror trusts, the M S Harrison Family Trust and the P D Harrison Family Trust.1

[3] They agreed that, in their division of relationship property, they had taken into account the distribution of trust assets also to be made under the agreement and that, as to that also, it was to have the status of a relationship property agreement under the Property (Relationships) Act 1976 and the Family Proceedings Act 1980. They undertook, in the exercise of their powers as trustees of their parallel trusts, to sign all resolutions and other documents required to give effect to the division.2 As Riley Business Trust trustees they confirmed they had resolved to distribute that trust's assets as the agreement required.3

[4] On settlement date, 30 October 2009, they agreed, Patrick Harrison was to take sole title to the former home (in reality to assume a very significant debt because their equity was small) and was, therefore, to assume the interest in the home held by the Maria Harrison Trust as well as the Patrick Harrison Trust. He was to assume their full beneficial interest in the Riley Business Trust. He was to take title to all the shares in his name in three companies, and title to three other properties and two various other property items. Conversely, he was to assume sole responsibility for a debt owed to the Riley Business Trust for marriage living expenses.

[5] According to a schedule to the agreement the total property to be divided was worth $5,871,021, and a half share was worth $2,935,510. Patrick Harrison was to

1      Preamble paras (a) - (c); cl 1.
2      Paragraph (d).
3      Paragraph (e).

take property worth $5,794,021 and Maria Harrison $77,000. Maria Harrison's half share was to be accorded to her by a $3.6M adjustment, giving her slightly in excess…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Harrison v Harrison

Details

AGLC: Harrison v Harrison [2013] NZHC 2181
Case: [2013] NZHC 2181
Decision Date: 27 August 2013

CaseChat Overview and Summary

The case of Harrison v Harrison involved a dispute between Maria Simone Harrison and Patrick David Harrison over the division of property following their separation. The central issue was whether Patrick Harrison, in his capacity as a trustee of the Riley Business Trust, was personally liable for outstanding instalments of a $3.6 million adjustment sum agreed upon in their separation and relationship property agreement. Maria Harrison, represented by A C C Hooker, sought summary judgment against Patrick Harrison for the unpaid instalments, arguing he was liable both as a principal debtor and a guarantor. Patrick Harrison, represented by D A T Chambers QC, denied any personal liability, asserting that his obligations as a trustee were limited to the assets of the trust.

The court had to determine whether Patrick Harrison's assumption of both primary and secondary liabilities as a trustee meant he was personally liable beyond the trust's assets. The court found that while Patrick Harrison's primary liability as a trustee was limited to the trust's assets, his secondary liability as a guarantor was intended to provide Maria Harrison with additional recourse to him personally. This interpretation was necessary to achieve a "just division" of their relationship property, as required by the Property (Relationships) Act 1976. The court concluded that Patrick Harrison's personal liability as a guarantor should be limited to the value of the trust's assets, thereby ensuring Maria Harrison's security while adhering to the terms of the agreement.

The High Court granted summary judgment in favour of Maria Harrison, holding Patrick Harrison personally liable as a guarantor for the outstanding instalments up to the value of the trust's assets. Additionally, the court awarded costs and disbursements to Maria Harrison, with the specific amounts to be determined by the Registrar.

Orders