Hill v McIvor
[2017] NZHC 2817
•16 November 2017
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2017-409-414 [2017] NZHC 2817
BETWEEN BRIAN JOSEPH HILL AND
SHELLEY JOY HILL Applicant
AND
WENDY KATHLEEN MCIVOR Respondent
Hearing: 8 November 2017 Appearances:
J M Moran for the Applicants
CWJ Fogarty for the RespondentJudgment:
16 November 2017
JUDGMENT OF MANDER J
[1] The applicants, Mr Brian Hill and his wife, Mrs Shelly Hill (the Hills), have applied for an order for the sale of a property situated at 500 Christchurch-Akaroa Road in Tai Tapu (the property).1 The respondent, Ms Wendy McIvor, does not oppose the making of the order. However, the parties have not been able to agree the division of the proceeds of the sale nor arrangements to pay the balance of a mortgage and outstanding rates.
Background
[2] In order to understand the dispute between the parties it is necessary to set out the background to the purchase of the property. Mrs Hill and Ms McIvor are sisters.
Their aunt and uncle, Kathleen and her brother Arthur Mangels, never married, nor
1 Property Law Act 2007, s 339.
HILL v MCIVOR [2017] NZHC 2817 [16 November 2017]
had children. They owned a relatively small farm in Tai Tapu spread over four separate blocks.
[3] In 2008, Mr Hill discussed with Kathleen the possible purchase of a neighbouring property as an investment. A short time later another property that neighboured the Mangels’ farm came on the market and became the focus of the family’s attention. Kathleen proposed that an isolated parcel of the existing farm (Gerkins Road) could be sold and the proceeds used to buy the neighbouring land which was considered more suitable for farming and had a house on it.
[4] Kathleen was reluctant to spend any money in excess of the proceeds of the Gerkins Road sale, and options were considered to finance the balance of the purchase price of $830,000. Mr Hill’s evidence was that Ms McIvor was having financial difficulties at the time and had made the decision to sell her house as she could no longer afford the mortgage. Ms McIvor disputes she was under such financial pressure. However, she was invited by Kathleen to participate in the purchase to obtain the house on the property as a home for herself. Ms McIvor contributed
$63,000 from the proceeds of the sale of her house, and agreed to the raising of a further $77,000 by way of a loan. The balance of the purchase price was provided by Arthur from the proceeds of the sale of the Gerkins Road property. By this time, Arthur was in a rest home and Kathleen was acting as his attorney.
[5] An issue arose regarding GST. It was initially understood the asking price was GST inclusive. However, it was revealed the price was exclusive of GST. This caused a difficulty because it meant it was necessary to raise a further $20,000-$30,000 to complete the sale. Professional advice was that if the property was put in Arthur’s name the whole farm would have to be registered for GST. Arthur was resistant to that being done and Kathleen was insistent the farm not be GST registered. She also declined a suggestion to put the property in her name. Mr Hill deposed that Kathleen proposed the property be put into the Hills’ name, reasoning that this would be sensible because “it’s all going to be yours one day”. Mr Hill’s evidence was that he and his wife at that time were the principal beneficiaries under Kathleen’s will. A partnership was formed between the Hills and Ms McIvor which was registered for GST. The
Hills advanced the cash to cover the GST component which they were able to recover by way of a refund.
[6] These arrangements were formalised by the Mangles family’s solicitors. On the solicitors’ advice the Hills were required to execute an acknowledgment of debt in favour of Arthur for the funds he contributed to the purchase (the Mangels’ debt), which represented their legal share in the ownership of the property as recorded on the title.
[7] The $77,000 loan was secured by a mortgage. However, the mortgage was over the Hill’s own home and not the property. Mr Hill deposed this was necessary because of Ms McIvor’s credit history. She had been declared bankrupt some years before, and the advice Mr Hill received was that it would be unlikely she would be able to borrow the money herself. Ms McIvor disputes this was the case. While she had some financial difficulties arising from a division of relationship property some years prior, her evidence was that by 2008 she was up-to-date with the mortgage and other outgoings relating to her previous property.
[8] Ms McIvor also maintained that she had understood the loan was secured by a mortgage over the property and that it was not until 2012 that she became aware the Hills had raised a mortgage over their home to finance the $77,000 loan. Mr and Mrs Hill dispute Ms McIvor’s belief as to which property was mortgaged. It is not necessary to resolve these conflicts because it is not contested that Ms McIvor made regular payments to the Hills’ bank account over the course of many years after the purchase of the property to service the loan. Furthermore, there is no issue that the
$77,000 loan represented a component of Ms McIvor’s total share in the property.
[9] The net result of these arrangements was that the registered title to the property reflected the parties’ respective legal interests. Based upon the purchase price of
$830,000, the Hills were recorded on the title as having a 69/83rd share, and
Ms McIvor a 14/83rd share (the ownership ratio). It appears that at that time all family members were comfortable with these arrangements. Mr Hill deposed that he and his wife had understood they would inherit the farm under Kathleen’s will, and had even
told Ms McIvor they would transfer ownership of the property to her when that occurred.
[10] Arthur died in January 2013. Kathleen was the sole beneficiary under Arthur’s will, and in her capacity as the sole executor she assigned the Mangels’ debt to herself. Kathleen passed away in May 2015. Prior to her death a deep dispute arose within the family about arrangements regarding the farm, and subsequently over Kathleen’s estate. Mr and Mrs Hill did not inherit the farm. The principal beneficiaries under Kathleen’s will were Ms McIvor’s sons. As a consequence proceedings were commenced by the Hills under the Law Reform Testamentary Promises Act 1949. That proceeding was settled and resulted in the debt recorded in the deed of acknowledgement being forgiven.
[11] Sadly, as a consequence of the family dispute over Kathleen’s estate there remains a significant rift between the parties. Difficulties emerged regarding responsibility for the mortgage payments and rates. In combination these circumstances have led to the present application. While there is agreement that the property should be sold, the parties have not been able to agree terms regarding the distribution of the sale proceeds.
The application
[12] Ms McIvor consents to the making of an order for the sale of the property. She is also agreeable to the following additional arrangements:
(a) That the property be sold by public auction to be organised by the Hills using a reputable real estate agent of their choosing.
(b)Because Ms McIvor is presently in the process of arranging alternative accommodation and expects to be able to move by mid/late-November
2017, she consents to a sale within any reasonable time thereafter. Her preference is for the sale to occur before the end of this year.
(c) Ms McIvor will cooperate with all aspects of the sale process, including signing any necessary authorisation including, for example, a listing
agreement. She agrees to clean the interior, mow the lawns adjacent to the house and leave the gardens in a tidy and satisfactory condition prior to quitting the property. Thereafter these items will be the responsibility of the Hills.
(d)While the property is on the market any viewings can be arranged directly with the Hills.
[13] The division of the proceeds of sale and the priority of their distribution is in dispute. However, the following matters are agreed:
(a) The legal costs and disbursements are to be deducted from the sale proceeds.
(b)Any real estate agent’s fees, advertising expenses and other such charges (with the exception of any commission) are to be deducted from the sale proceeds.
(c) Any real estate agent’s commission is to be apportioned on a 69/83rd share payable by the applicants and a 14/83rd share payable by the respondent.
The disputed issues
[14] The Hills seek the following ancillary orders which are not agreed by
Ms McIvor:
(a) The balance of the mortgage ($85,458.43) be paid by Ms McIvor out of her share of the sale proceeds.
(b)Payments made by the Hills ($12,457.74) to meet principal, penalty and other costs associated with the mortgage be repaid to them from Ms McIvor’s share of the sale proceeds.
(c) Interest at the rate of five per cent per annum calculated monthly be paid by Ms McIvor to the Hills on the payments referred to in (b).
(d)Ms McIvor pay all outstanding rates payable to the Selwyn District Council out of her share of the sale proceeds up until the date of the settlement of sale of the property.
(e) Ms McIvor repay to the Hills payments made by them to meet Selwyn
District Council rates arrears, penalties and interests.
(f) Ms McIvor is then to be paid the balance of her 14/83rd share of the sale proceeds with the balance being disbursed to the Hills.
[15] The issues between the parties distil to those concerning the division of the sale proceeds, the mortgage, and the rates.
Approach to the distribution and division of the sale proceeds
[16] The Property Law Act 2007 provides as follows:
339 Court may order division of property
(1) A court may make, in respect of property owned by co-owners, an order—
(a) for the sale of the property and the division of the proceeds among the co-owners; or
...
(4) A court making an order under subsection (1) may, in addition, make a further order specified in section 343.
[17] Section 343 of the Act empowers the Court to make additional orders directing how proceeds of any sale are to be divided or applied, and directing how the expenses of any sale or division of the property are to be borne. In making an order under s
339(1) and any related orders under subs (4), the Court must have regard to the factors set out in s 342. That provision provides:
342 Relevant considerations
A court considering whether to make an order under section 339(1) (and any related order under section 339(4)) must have regard to the following:
(a) the extent of the share in the property of any co-owner by whom, or in respect of whose estate or interest, the application for the order is made:
(b) the nature and location of the property:
(c) the number of other co-owners and the extent of their shares:
(d) the hardship that would be caused to the applicant by the refusal of the order, in comparison with the hardship that would be caused to any other person by the making of the order:
(e) the value of any contribution made by any co-owner to the cost of improvements to, or the maintenance of, the property:
(f) any other matters the court considers relevant.
The extent of the share in the property of any co-owner by whom, or in respect of whose estate or interest, the application for the order is made
[18] The shares in the property are acknowledged as those recorded on the title;
14/83rd share held by Ms McIvor and a 69/83rd share held by the Hills.
The nature and location of the property
[19] It was submitted there was nothing in particular about the nature and location of the property that ought to impact on any orders made by the Court. However, I do note the evidence that Ms McIvor’s personal use and interest in the property was limited to the house and its immediate external surrounds, rather than the rest of the block which was used for farming.
The number of other co-owners and the extent of their shares
[20] Ms McIvor is the only other co-owner with a 14/83rd share in the property.
The hardship that will be caused to the applicants (the Hills) by the refusal of the order, in comparison with the hardship that will be caused to any other person (Ms McIvor) by the making of the order
[21] In assessing how the proceeds should be distributed, counsel are agreed the assessment is fact specific and that the objective is to arrive at an outcome that is fair to both parties.
[22] Mr Fogarty on behalf of Ms McIvor submitted that a relevant consideration was the background to how the Hills acquired their unencumbered beneficial share in the property as a result of the settlement of the testamentary promises proceedings. He submitted the Hills had gone from a position of being obligated to repay the Mangels' debt that had been formally acknowledged at the time Arthur contributed the funds to purchase the property, to having the “lion’s share” of the capital.
[23] Mr Fogarty compared the favourable position of the Hills with Ms McIvor’s position. It had clearly been her aunt’s intention to provide Ms McIvor with a home at the time the property was purchased. That home has now effectively been lost and Ms McIvor must make new arrangements to house herself. Furthermore, her liability to fully repay the loan has now triggered as a result of the decision to sell. Mr Fogarty submitted the hardship to Ms McIvor is significantly greater than that which the Hills may suffer as a result of the division of the property.
[24] Mr Moran, on behalf of the Hills, submitted the capital raised by the $77,000 loan related directly to Ms McIvor’s share in the property. Two loan top-ups were obtained at Ms McIvor’s request, totalling some $23,000. The first was to buy a car and the second to meet other personal financial obligations. That increased the principal sum owing on the loan to approximately $100,000. This evidence is not challenged by Ms McIvor and there can be no real dispute that she is responsible for its repayment. Any hardship resulting from its repayment arises from her direct responsibility for the debt, and her failure to continue with the mortgage payments. This caused significant inconvenience to the Hills who had to service the loan themselves.
[25] Mr Moran submitted any hardship to Ms McIvor was the inevitable consequence of selling the farm. That necessary step was not in dispute. In response to the contention that the Hills have been the fortunate beneficiaries of a settlement entitling them to a beneficial interest in the property, Mr Moran submitted the context of that settlement and the nature of the Hills’ claim against the estate has to be taken into account. In that regard it was emphasised their claim was founded on the applicants’ contributions to the farm and the assistance provided over many years based on the understanding they would inherit the Mangels’ farm.
The value of any contribution made by any co-owner to the cost of improvements to, or the maintenance of, the property
[26] Ms McIvor’s evidence was that she paid for a septic tank not long after she moved onto the property which cost her some $1,300. She referred to the septic tank breaking down on at least two further occasions which cost her a further $2,000. Ms McIvor paid all the house insurance premiums, and maintains she spent a further
$20,000 towards the maintenance of the property. She made specific reference to meeting the cost of painting rooms in the house, and carrying out rewiring in the roof cavity to the cost of about $1,500.
[27] A difficulty for Ms McIvor in seeking recognition for these items of maintenance is that it has been recognised that where co-ownership ends in a sale, a co-owner is generally only entitled to an allowance which reflects any increase to the value of the land as a result of his or her expenditure.2 Ms McIvor led no evidence to demonstrate that her expenditure increased the value of the property. Expenditure on repairs and improvements which have such an effect can provide a basis to obtain equitable relief. However, the person seeking such relief is equally “required to do equity” and a person in occupation may be liable to pay rent for any period of their sole occupation.
[28] In the circumstances, I do not consider the nature and extent of the expenditure identified by Ms McIvor is capable of being recognised as a contribution which requires a discrete adjustment of how the proceeds of sale should be distributed. I am fortified in that view by the fact that any such argument might justifiably be met by a claim for rental during the period Ms McIvor occupied the property after the death of Kathleen.
Any other matters the Court considers relevant
[29] The Court, in the exercise of its broad discretion under s 339(1), is entitled to take into account any matters that it considers relevant.3 A feature of the background
leading to the sale of the property is the family dispute over Kathleen’s estate which
2 T Bennion and others New Zealand Land Law (2nd ed, Thomson Reuters, Wellington, 2009), at
[6.6.11].
3 Bayly v Hicks [2012] NZCA 589, [2013] 2 NZLR 401.
resulted in the Mangels’ debt being forgiven. However, the application for the sale of the property and the contested ancillary orders is not an opportunity to re-litigate the rights and wrongs of the family dispute regarding Kathleen’s estate, nor the merits of the settlement of the litigation that arose from it.
Division of the sale proceeds
[30] Realistically, there can be no issue as to the parties’ respective shares in the property based on the original purchase price. In April 2017, the property was assessed as having a current market value of $975,000. A sale may therefore potentially result in a $145,000 capital gain over some nine years. The question that has given me some pause is whether that capital gain should be divided between the parties in accordance with the ownership ratio. Mr Fogarty submitted the Hills obtained a significant “windfall” by gaining an unencumbered share of the property without having invested any capital of their own towards its original purchase, and would obtain an unwarranted premium from the capital gain on its sale.
[31] The Hills’ position is that no distinction should be made between the original purchase price and its current market value, and that the proceeds of sale should be distributed in accordance with the ownership ratio. Mr Moran emphasised that Ms McIvor, both prior to Kathleen’s death and, perhaps more pertinently, after her death, enjoyed the benefit of the property rent-free. He argued the testamentary promises settlement effectively ratified the Hills’ view that, at least for that latter period, they had been entitled to a beneficial interest in the property which matched their legal ownership as recorded in the title. Mr Moran submitted that Ms McIvor will receive her share in the capital gain based on her ownership of the property, and it is fair and equitable that the Hills share in the capital gain on the same basis.
Discussion
[32] The Hills accept the only reason their names were originally included on the title was because of the GST issue, the background to which I summarised at [5]. Absent the need to overcome that difficulty, the Hills would not have appeared on the title as owners in any capacity, nor would it have been necessary on the solicitors’ advice for an acknowledgement of debt to have been signed by the Hills in recognition
of the funds which Arthur contributed to the purchase. The Hills, apart from temporarily raising the funds to pay for the GST element of the purchase price, which was quickly recovered, made no other financial contribution to the property’s purchase. It was not until the testamentary promises litigation was settled that their formal legal interest in the property was converted to a beneficial interest as a result of the agreement to forgive the Mangels’ debt.
[33] I have given close consideration to whether these circumstances should result in any adjustment to the ownership ratio for the purpose of distributing that part of the sale proceeds which represents the increased capital value of the property. Ultimately, I have decided that no modification is warranted, and that the same division should apply to the total proceeds of sale.
[34] The Hills’ share in the property derives from a term of the settlement of the testamentary promises claim which was formalised by a consent order. The ambit of the present proceeding does not allow that settlement to be re-litigated. It is not feasible to assess the merits of the Hills’ testamentary claim based, as it was, on their contributions to the Mangels’ farm, the assistance provided to Kathleen, and alleged promises made by the aunt. Nor is it necessary to make any determinations in relation to the contested evidence regarding the Hills’ past support of Ms McIvor.
[35] The Hills’ share in the proceeds of the sale is founded on their legal and beneficial interest in the property which follows from the forgiveness of the Mangels’ debt as a result of the settlement of the testamentary promises proceeding. The agreement to forgive a debt which is inextricably linked with the purchase of the property had the effect of converting the Hills’ strictly legal interest to one entitling them, together with Ms McIvor, to the full benefits of ownership. This included the right to realise the market value of the property in accordance with their full share in the property. A division of the proceeds of the asset in accordance with the ownership ratio does not result in any unfair enrichment or windfall to the Hills, but is a consequence of an agreed term of the settlement of the earlier litigation and the sale of the jointly held property.
[36] Importantly, notwithstanding the chain of events that led to the Hills retrospectively acquiring their beneficial interest in the property, it is not clear to me why Ms McIvor should be entitled to a greater share in the capital gain beyond her own beneficial interest. Ms McIvor has not demonstrated to me how her contribution and/or use of the property over the years would make it fairer for her to participate in the capital gain to a greater extent beyond her ownership entitlement. As I understood her argument, she had always believed the property was “Mangels’ land” and not the Hills’. I accept that was not, at least until the death of Kathleen, an unreasonable assumption, but it does not provide a basis upon which to justify a share in the proceeds of sale greater than her own share in the property.
[37] Accordingly, the parties are to share in the proceeds of sale of the property in accordance with the ownership ratio subject to the ancillary orders relating to the mortgage, the rate and other costs associated with the sale.
The mortgage
[38] There is no dispute that Ms McIvor contributed $63,000 cash to the purchase of the property and that the balance of her 14/83rd share comprised her contribution of
$77,000 which was raised by way of a loan. The current balance of the loan stands at
$85,458.43. The main reason the loan balance has increased is because of a further
$23,000 borrowed by Ms McIvor. Up until December 2015, Ms McIvor made regular repayments totalling approximately $40,000 towards the mortgage. However, in the wake of the family dispute regarding Kathleen’s estate, Ms McIvor’s payments became infrequent and she eventually stopped servicing the loan in April 2016. This has required the Hills to meet the loan repayments themselves to the amount of
$12,457.74.
[39] Much of the dispute regarding the $77,000 loan related to the mortgage which was secured over the Hills’ own home. Ms McIvor’s evidence was that she was unaware of this arrangement, and that she believed the mortgage securing the loan was taken out over the property. The Hills dispute Ms McIvor’s ignorance of that arrangement. A somewhat elongated process was put in place whereby Ms McIvor serviced the loan by paying fortnightly instalments into the Hills’ bank account, who
in turn paid the bank. This tends to support the Hills’ version that Ms McIvor was not in a position to directly obtain credit from the bank. However, these disputed evidential issues are irrelevant to determining who is responsible for the mortgage repayments.
[40] Ms McIvor was very clear both in her affidavit and in her oral evidence that the $77,000 loan together with her $63,000 contribution provided the means by which she obtained her 14/83rd share in the property. Documentation drafted by the solicitors at that time confirm that was the case. It follows that she must take responsibility for the loan. Ms McIvor does not disavow that the $77,000 loan funded a component of her share in the property, nor that she personally drew on the loan facility to meet her own personal and family needs in subsequent years. Her obligation to service the loan is evidenced by the many years she regularly made payments into the Hills’ bank account for that purpose.
[41] It follows that Ms McIvor is obligated to take responsibility for the current loan balance of $85,458.43. She is also liable to reimburse the Hills $12,457.74 for the payments they have made after Ms McIvor unilaterally stopped paying instalments. However, I do not consider the Hills may insist on Ms McIvor paying interest on those payments.
[42] The Hills were instrumental in arranging the loan facility with the mortgage over their home. Ms McIvor clearly agreed to service the loan, and over many years made regular payments. The breakdown in that arrangement has arisen as a result of the wider family dispute regarding Kathleen’s estate. Prior to the breakdown in family relationships, all parties, including the Hills, appeared comfortable with the loan being secured against their home. No consideration appears to have been given, and certainly no agreement reached, implied or otherwise, that Ms McIvor would be held liable to pay interest to the Hills should she default in her obligation to service the loan beyond that charged by the bank.
[43] While the Hills ought not to have been placed in the position of having to use their own money to service the loan, the fact they were required to do so was the product of the way they had originally structured the purchase of the property, which
it appears they were anxious at the time to ensure could be completed. Understandably, they did not anticipate the deep family division that was to arise in the future. However, no provision was made regarding the respective rights of the parties should a family member default in their obligations under this family arrangement. Because of this unusual background to the way the family organised and secured the loan facility, I do not consider the Hills can insist on the imposition of interest on the payments they made to service the mortgage.
[44] For these reasons, I also consider the Hills should take responsibility for the legal costs and associated expenses involved in discharging the mortgage and settling the loan.
Rates
[45] Responsibility for the payment of rates levied against the property was divided equally between Ms McIvor and Kathleen. The position up until Kathleen’s death in May 2015 was summarised by Mr Hill without dispute as follows:
Amount levied up until Kathleen’s death $9,410.95
• Half share $4,705.48 • Amount paid by Kathleen $3,807.17 • Shortfall $898.31
• Half share $4,705.48 • Amount paid by Ms McIvor $4,434.41 • Shortfall $271.07
[46] The rates position following Kathleen’s death was summarised as follows:
Amount levied since Kathleen’s death $5,766.00
• Amount paid by Ms McIvor $3,620.00
• Shortfall $2,146.00 • Extrapolated shortfall for period 21.09.17– 8.11.17 $478.10 • Total shortfall $2,624.10 • Amount paid by the Hills
$1,500.00
[47] The Hills seek orders to the effect that Ms McIvor reimburse them for the rates they have paid and that the balance of the rates arrears be paid by Ms McIvor out of her share of the sale proceeds.
[48] Mr Fogarty on behalf of Ms McIvor submitted that, because of the family nature of the transaction in 2008, arrangements regarding how outgoings on the property, including responsibility for rates for which the owners of the property are liable, were never formally documented and this led to an ad hoc approach. The arrangements that were in place up until Kathleen’s death regarding the rates is likely indicative of Ms McIvor’s understanding that the land upon which her home was situated was Mangels’ land. She effectively owned the house, and the balance of the property was available for grazing as part of the wider Mangels’ farm. Kathleen and Ms McIvor appear to have agreed as between themselves that they would equally share responsibility for the rates. Because of the shortfall of $271.07 in Ms McIvor’s half share during that period, that amount must remain her responsibility.
[49] After Kathleen’s death the Hills assumed that Ms McIvor, as the sole occupier of the property, would take full responsibility for the rates. However, in my view, the same equal sharing arrangement which was in place until Kathleen’s death should be applied for the period after her death, with the Hills stepping into the shoes of Kathleen for that purpose. Kathleen’s shortfall prior to her death should also be divided equally between the parties. Because the Hills did not enjoy the benefit of any use of the property and Ms McIvor did not pay any rental for her continued occupation after Kathleen’s death, I do not consider it appropriate to divide responsibility for rates in accordance with the ownership ratio. However, the Hills were co-owners and
therefore liable for the rates levied against the property.4
4 Local Government (Rating) Act 2002, ss 10, 11 and 12.
[50] Taking the total amounts levied since Kathleen’s death up until 8 November
2017 ($5,766 + $478.10 = $6,244.10) divided equally between the parties leaves each responsible for the sum of $3,122.05. To be added to that is the equal share in the shortfall in Kathleen’s half share prior to her death ($898.31 ¸ 2 = $449.15). Added together, each party is responsible for the sum of $3,571.20. From that equal portion is to be deducted the respective amounts they have paid (Ms McIvor $3,620, the Hills
$1,500). When Ms McIvor’s shortfall for the period prior to Kathleen’s death ($271.07) is taken into account, this leaves her owing the sum of $222.27, and the Hills $2,071.20. These sums, as with the balance of the mortgage, will no doubt have to be adjusted depending on the balance of the rates as at the date of settlement of the sale, but they illustrate the approach to be taken.
Result
[51] There will be an order for the sale of the property at 500 Christchurch-Akaroa Road, Tai Tapu, being Identifier CB42A/440 (Canterbury Registry) and the division of the proceeds amongst the co-owners pursuant to s 339 of the Property Law Act
2007.
[52] The following directions are made:
(a) The property is to be sold by public auction to be organised by the applicants and a reputable real estate agent of the applicants’ choosing;
(b)The sale is to occur within a reasonable time after the respondent has found alternative accommodation;
(c) The respondent is to cooperate with all aspects of the sale process including, but without limitation, by signing any necessary authorisations, and by cleaning the interior of the property, mowing the lawns adjacent to the house, and leaving the gardens in a tidy and satisfactory condition, prior to quitting the property. Thereafter the upkeep of the property for the purpose of sale is to be the applicants’ responsibility.
(d)While the property is on the market, any viewings can be arranged directly with the applicants once the respondent has quit the property.
(e) When the property is sold, the proceeds of sale are to be disbursed in the following priority and manner:
(i)the legal costs and disbursements are to be deducted from the sale proceeds;
(ii)any real estate agent’s fees, advertising expenses and other such charges (with the exception of any commission) are to be deducted from the sale proceeds;
(iii) any real estate agent’s commission is to be apportioned as to a
69/83rd share payable by the applicants and a 14/83rd share payable by the respondent.;
(iv)any GST payable on the sale is to be apportioned as to a 69/83rd share payable by the applicants and a 14/83rd share payable by the respondent;
(v)from the respondent’s 14/83rd share the applicants are to be repaid payments they have made on behalf of the respondent to service the loan secured by way of a mortgage over the applicants’ home;
(vi)from the respondent’s 14/83rd share the applicants are to be repaid the principal sum owing on the loan as at the date of settlement of sale of the property, including all interest up to the date of settlement of sale of the property;
(vii)all Selwyn District Council rates arrears, penalty and interest are to be equally shared between the applicants and the respondent as at the date of settlement of sale of the property and paid out of their respective shares of the sale proceeds;
(viii)the respondent is then to be paid the balance of her 14/83rd share of the property sale proceeds; and
(ix) the balance of the sale proceeds are to be paid to the applicants.
(f) Leave is granted to the parties to seek any further orders that might be required to enable the sale of the property or directions in clarification.
Costs
[53] Subject to either party wishing to be heard, I determine that costs should lie where they fall. I consider because of the family background to the circumstances giving rise to the application it was inevitable that Court intervention would be required to resolve issues arising out of the sale of the property. Neither party has taken an unreasonable position and each has achieved some vindication of their position in relation to particular issues.
Solicitors:
Meares Williams, Christchurch
Cameron & Company, Christchurch
0