Hosseini v Hosseini - [2021] NZHC 2317

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-1170

[2021] NZHC 2317

UNDER Section 339(1) Property Law Act 2007

BETWEEN

MAHSA HOSSEINI and MAHYA HOSSEINI

Applicants

AND

MONA HOSSEINI and MEHDI SHIRASEB

Respondents

Remote hearing: 2 September 2021

Appearances:

C A Murphy for the applicants J D Noble for the respondents

Judgment:

6 September 2021

JUDGMENT OF JAGOSE J

This judgment was delivered by me on 6 September 2021 at 3.30pm.
Pursuant to Rule 11.5 of the High Court Rules.

………………………… Registrar/Deputy Registrar

Counsel/Solicitors:
C A Murphy, Barrister, Auckland Gregory Simon Law, Auckland Boyle Mathieson, Auckland

HOSSEINI v HOSSEINI [2021] NZHC 2317 [6 September 2021]

[1] The applicants (“Mahsa” and “Mahya”) and the first-named respondent (“Mona”) are sisters (and the second-named respondent (“Mehdi”) Mona’s husband). Given the commonality (although not universality) of their Hosseini surnames, I mean no disrespect by referring to the parties by their distinguishing given names.

[2] The parties are the registered owners of a property in Auckland’s Three Kings. The property was acquired in September 2017, with the assistance of a bank loan secured by a mortgage over it. The property served as Mona and Mehdi’s family home.

[3] The parties agree I may make orders for the property’s sale and division of the proceeds between them. Predominantly at issue is reconciliation of that division equally between them, to account for their contended unequal contributions during the period of their ownership of it.

Background

[4] The parties acquired the property on 8 September 2017 for $1.210 million. Mona and Mehdi paid the $120,000 deposit. The balance of the purchase was funded from a $968,000 loan advance from the ANZ Bank, secured by a first charge mortgage over the property, and the rest from Mahsa and Mahya. That ‘rest’ was $122,000 toward the purchase price, and $1,307.50 in conveyancing expenses.

[5] In principle, the parties took the benefits and burdens of the property’s ownership in equal shares. In fact, Mahsa’s and Mahya’s contributions included a loan from Mona and Mehdi of $30,000 or more, without express provision for either principal repayment or interest payment or accrual. Rental obtained from the property contributed to the bank loan repayments, any shortfall being borne equally by the parties (except for a period from October 2017 to June 2018, when Mahsa and Mahya subsidised Mona’s and Mehdi’s contributions by a total of $1,700). And Mona and Mehdi spent $10,396.15 on maintenance and improvements to the property.

The law

[6]The Property Law Act 2007 Act provides:

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
(b)for the division of the property in kind among the co-owners; or
(c)requiring 1 or more co-owners to purchase the share in the property of 1 or more other co-owners at a fair and reasonable price.

(2) An order…

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 Hosseini v Hosseini

Details

AGLC: Hosseini v Hosseini [2021] NZHC 2317
Case: [2021] NZHC 2317
Decision Date: 6 September 2021

CaseChat Overview and Summary

The case of Hosseini v Hosseini involved Mahsa and Mahya, the applicants, and Mona and Mehdi, the respondents. The applicants and respondents were sisters and their respective spouses who jointly owned a property in Auckland’s Three Kings. The applicants and respondents jointly applied for orders for the property's sale and division of the proceeds between them. The predominant issue was the reconciliation of the division of the proceeds to account for their contended unequal contributions during their ownership of the property.

The legal issues the court had to decide included whether the respondents had the benefit of concessionary rental over the period at issue, and if so, whether any such benefit was offset by their additional outgoings on the property. The court also had to determine if compensation or fair occupation rent was required as between the parties. The court had to consider the mandatory considerations set out in section 342 of the Property Law Act 2007, such as the extent of the share in the property of any co-owner, the nature and location of the property, and the value of any contribution made by any co-owner to the cost of improvements to, or the maintenance of, the property.

The court found that the evidence did not permit an exact calculation for reconciliation on division of the sale's proceeds between the parties. The court considered that actual capital contributions to the purchase price were made approximately 60 per cent by Mona and Mehdi and 40 per cent by Mahsa and Mahya. The bank loan repayments appeared to have been made at a rate of $2,352.56 a fortnight, thus $518.14 each. The contribution of Mona’s and Mehdi’s weekly $300 rent reduced each owner’s equal fortnightly repayments to $438.14, Mona’s and Mehdi’s gross fortnightly payments of loan repayment and rent thus being $738.14 each. The court found that Mona and Mehdi’s combined fortnightly payments of $1,476.28 were approximately also 60 per cent of the fortnightly $2,352.56 bank loan repayments. The court considered that this seemed a reasonable basis on which to find the parties' equal treatment overall was restored, offsetting any benefit Mona and Mehdi may have obtained in occupation of the property.

The court ordered that the property be listed immediately for sale by public auction at a reserve price of $1.5 million. The court appointed Josh Muir of Auckland’s Lockhart Legal as the parties' lawyer on the transaction. The court also ordered that the sale proceeds be disbursed in a specific priority, including the discharge of the amount due and owing under the mortgage at the date of payment, payment of any outgoings including any rates, payment of any real estate agent’s commission, marketing costs, auction costs, and legal fees incurred in connection with the sale and transfer of the property, and the balance to be divided equally between the four owners. The court also recorded the parties’ agreement to contribute equally to the cost of waterblasting the house in preparation for its sale. The court reserved costs for determination on short memoranda of no more than five pages.

Orders