Jackson v Holden

[2016] NZHC 1095

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

CIV-2015-425-000100 [2016] NZHC 1095

BETWEEN

LUCY JACKSON

Appellant

AND

ERROLL HOLDEN Respondent

Hearing:	4 May 2016
Appearances:	Appellant in person Respondent in person
Judgment:	24 May 2016

JUDGMENT OF DUNNINGHAM J

Note:  The names of the parties in this judgment are fictitious to preserve the parties’ anonymity.

[1]      The  appellant,  Ms  Jackson,  appeals  the  decision  of  the  Family Court  at Invercargill given on 20 October 2015 on her application for division of relationship property.

[2]      Ms Jackson and her former husband, Mr Holden, were in the regrettable position of having more debts than assets when their relationship ended.  That was still the case by the time of the hearing.  The Judge had to determine the extent of the relationship debts, and then, how responsibility for those debts should be allocated as between the parties, taking into account the value of the relationship property each

retained.

JACKSON v HOLDEN [2016] NZHC 1095 [24 May 2016]

The notice of appeal

[3] Fami	Ms ly Co (a)	Jackson,  with  the  assistance  of  counsel,  filed  an  appeal  of  the rt’s decision on the grounds that: various amounts claimed as relationship debts by the appellant were
not recognised as debts or claimable relationship debts; and
(b)	certain credits and adjustments for the parties were either incorrectly or were not taken into account in reconciliation; and
(c)	the final reconciliation and attribution of debts was therefore in error.

[4]      Since her lawyers filed that appeal, Ms Jackson was advised that she was not eligible for legal aid.  She has chosen to continue the appeal in person.  Mr Holden also appears in person, as he did before the Family Court.

[5]      In those circumstances, and with both parties unfamiliar with the Court processes, the appeal proceeded more informally than would normally be the case. However, I was able to distil from Ms Jackson’s submissions that her key concerns were that:

(a)       Mr Holden had not complied with the Court’s orders to take over

responsibility for paying specified debts to third parties;

(b)she wanted orders that had the effect of discharging her from liability for the debts to third parties where the Court had ordered Mr Holden to be responsible for paying them;

(c)      she was unhappy that she was required to repay the loan to Mr Brown, her grandfather, when Mr Holden retains the boat that the loan was used to purchase;

(d)the Judge held that only $20,370 of the amount that was correctly claimed as owing to Ms Jackson’s parents of $35,807, was a relationship debt;

(e)      she disputed the Judge’s calculation of the value of various assets retained by her and Mr Holden.

[6]      As I explained to the parties, this appeal proceeds by way of rehearing.  That means  I  am  required  to  make  my  own  assessment  of  the  evidence  which  the Family Court Judge had to consider.   If, having regard to the submissions of the parties and the issues they raised, my conclusions as to the Judge’s findings on the evidence are different from those of the Family Court Judge, then I must find the judgment was in error and allow the appeal.1    In determining the appeal, however, the appellant bears the onus of satisfying this Court that it should depart from the decision under appeal.

[7]      Because  I  am  only  reconsidering  the  Family  Court’s  decision  as  to  the division of property as between the parties, issues relating to enforcement of the judgment, and of the parties’ liability to third party creditors, fall outside the scope of this appeal.  Those creditors’ rights to enforce repayment of the couples’ debts are not altered by the Court’s determination of responsibility for relationship debts as between the parties themselves.

The issues on appeal

[8]      In  light of my explanation as to the scope of  the appeal, and  following discussion with Ms Jackson, I established that there were nine alleged errors which she wished to pursue on appeal. These were as follows:

(a)      the Judge was in error when he said there was no evidence that the XR8 2005 Ford Falcon Ms Jackson retained was worth only $13,000, and to conclude it was worth $15,999 based on a valuation obtained

after separation;

1      Austin, Nichols and Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141.

(b)Mr Holden failed to get his Ford Falcon XR6 valued closer to the hearing as required and the Judge should not have accepted his outdated valuation of $1,000, when Ms Jackson says the vehicle was “immaculate”;

(c)       the  Judge  erroneously  valued  the  boat  retained  by  Mr  Holden  at

$6,000 when Mr Holden admitted he could get $8,000 for it;

(d)the Judge was in error to accept the valuation of $2,530 for the tools retained  by  Mr  Holden  when  Ms  Jackson  believed  the  valuation Mr Holden obtained was for not even a quarter of the tools he kept;

(e)      the Judge erred in his assessment of the value of chattels each retained and,  in  particular,  by  taking  account  of  the  $2,350  Ms Jackson obtained by selling kitchen joinery which was to be used in the house, because she put that money into a new kitchen and that was taken into account in the valuation of the family home which she retained;

(f)      Ms Jackson had paid $50 for a valuation of the car and that was not taken into account;

(g)the Judge was in error to assume that Mr Holden had taken over the GE credit card with a debt of $2,957.45 at the time of separation when it was paid off on 19 April 2013, which she says was two weeks before separation;

(h)the  Judge  was  in  error  in  not  taking  into  account  all  the  debts Ms Jackson’s  parents  claimed  were  owed  to  them  by  the  couple, particularly when her parents were not cross-examined by Mr Holden on their assertion that all these debts were a loan;

(i)the Judge was in error to allocate to Ms Jackson the debt which was owed to Mr Brown, when Mr Holden retained the boat which was purchased with that money.

The District Court Judge’s decision

[9]      In the District Court, the Judge was faced with the difficulty that Mr Holden was self-represented, and had not complied with all directions which had been made to identify and value the relationship property and debts, and to otherwise identify the issues in dispute.  However, a pragmatic approach was taken given the additional cost and delay which would be required if full compliance was insisted on, and the parties chose to proceed with the hearing.

[10]     Before the hearing got underway, the Judge met with the parties to identify which issues were agreed and which issues he had to determine at hearing.   The hearing then proceeded and, on the evidence before him, he came to a range of findings over what was relationship property and what were relationship debts, and the values to be ascribed to them.   Those findings are summarised at [55] of his decision.    In  summary,  he  found  the  total  value  of  the  relationship  assets  was

$198,759.54, while the relationship debts totalled $232,830.45.

[11]     The Judge then divided the property and allocated responsibility for the debts as between the parties.  He did this as follows:

Appellant		Respondent
Asset	Value	Asset	Value
The family home	$167,500.00	1996 Ford Falcon XR6	$1,000.00
2005 Ford Falcon XR8	$15,999.00	Jet boat and trailer	$6,000.00
Chattels retained	$1,635.00	Tools	$2,530.00
Chattels sold	$2,350.00	Dog	$750.00
Chattels	$1,000.00
Total Assets	$187,484.00	Total Assets	$11,280.00
Debt/Liability	Debt/Liability
Valuation fees	($57.50)	Valuation fees	($174.00)
Valuation fee for house	($350.00)	ANZ Visa	($11,364.47)
Mortgage owing to BNZ as at date of hearing	($159,687.77)	GE Creditline	($2,957.45)
Farmers card at separation	($507.44)	Balance of Geneva Finance loan as at date of hearing less $3,000 to be paid by Ms Jackson	($16,657.77)
Q card at separation	($2,287.35)	ANZ overdraft facility	($2,040.49)

Meridian electricity	($570.48)
Sky TV	($300.00)
Invercargill City Council rates	($1,424.59)
Owen Brown	($11,000)
Geneva Finance payments (5 x $600)	($3,000)
ANZ loan to parents at date of hearing	($20,307.36)
Mortgage reduction since separation2	($1,000)
Total Debts	($200,492.49)	Total Debts	($33,194.18)
Net Position	($13,008.49)	Net Position	($21,914.18)

[12]     While the Judge considered that he had approximately equalised the position in terms of each party’s responsibility for the debts, the table demonstrates that this was not achieved.  Prior to allocating liability for:

(a)       the ANZ overdraft facility; (b)  the debt to Mr Owen Brown;

(c)       the debt to Geneva Finance; and

(d)      the   outstanding   balance   of   the  ANZ   loan   owed   to   Mr   and

Mrs Jackson;

(e)      the difference between the amount Ms Jackson was to retain (a net amount of $22,298.66) and the amount Mr Holden was to retain (a debt of $3,515.92), was $25,514.78.

[13]     The Judge then allocated these remaining four debts so that $34,307.36 of them went to Ms Jackson and $18,698.26 went to Mr Holden.3    He expressed the

2      On 16 January 2016, in response to an application to correct the judgment filed by the appellant, the Judge acknowledged he had omitted the credit he had decided to give for the $1,000 by which the appellant had reduced the mortgage, in the apportionment of liabilities.  He chose to reflect it by reducing the number of Geneva Finance payments the appellant had to make. However, for ease of comparing the net outcome for each party, I have reflected it as a liability which the appellant has met.

3      This takes into account the $3,000 which the appellant was ordered to pay Geneva Finance

view that this allocation was intended to “equalise the position” between the parties. However, what the Judge did by doing this was to leave Ms Jackson with a negative equity position of $13,008.70, while Mr Holden was in a negative equity position of

$21,914.18.   Thus, it is clear the Judge was in error when he considered he had equalised  the  position.    For  completeness,  this  error  was  not  altered  by  the adjustment  he  made  on  16 January  2016  in  response  to  the  application  by Ms Jackson to correct the judgment.

[14]     I now go on to consider the nine alleged errors raised by Ms Jackson in her oral submissions.

Was the Judge correct to reject the appellant’s assertion that the Ford XR8 which she retained should have been valued at around $13,000 for the purposes of relationship property?

[15]     In  determining  the  value  of  the  Ford  XR8  motor  vehicle  retained  by

Ms Jackson,  the  Judge  accepted  that  the  valuation  provided  by  Ms  Jackson  of

$15,999 as at the date of separation “is the value that is to be attributed to the vehicle”.   He noted that Mr Holden maintained this was described as a wholesale valuation (and by implication the vehicle’s retail value was more) but he rejected both that submission and Ms Jackson’s submission that the vehicle was worth about

$8,000 being the estimated value GE Finance advised would be achieved on a fire sale after repossession, or $13,000 at the date of the hearing.  In electing to adopt the valuation of $15,999 he said “I have no evidence regarding either of those matters to substantiate a variance from the material that is before the Court, namely a valuation for $15,999”.

[16]     As  Ms  Jackson  pointed  out  on  appeal,  the  Judge’s  understanding  was incorrect, as, annexed to her affidavit of assets and liabilities was a valuation from Macaulay Motors which gave the vehicle’s wholesale value on 15 September 2015, shortly before hearing, as $13,000.  I accept therefore there was evidence before the Judge as to its value at the date of hearing which he failed to take into account. However, I still have to determine whether the value of $15,999 used in the division

of relationship property was wrong and should be amended.

before the onus fell to the respondent to assume responsibility for the balance of the debt.

[17]     It is clear that both valuations provided were expressly giving a wholesale value for the vehicle, and not a market value.  It is not clear why the market value was not provided as, ordinarily, to achieve a “just division between the spouses”,4 the value should be set by assuming a hypothetical sale by a willing, but not anxious seller to a willing, but not anxious buyer.5    In the case of a chattel such as a motor vehicle, that would normally be reflected in its market value and not what it could be sold for to a dealer who would then add a margin before reselling.  Thus, I accept Mr Holden’s  complaint  that  a  wholesale  value  was  used  may  have  had  some substance.  However, in the absence of a retail value the Court had to do its best to achieve a just division between the parties based on the evidence before it.  While I accept  that  a  wholesale  value  is  something  different  from  market  value,  in  the absence of any evidence as to market value at the time, the Judge had little option but to use this valuation.  It seems likely that, had the market value been available, the value of this asset would have been higher, which would have disadvantaged Ms Jackson.

[18]     The other concern was the date of valuation.  I accept that the presumption under s 2G, is that the date of hearing is the date of valuation of the asset.  However, there remains the ability to exercise discretion under s 2G(2) to adopt another date. Here, the Judge noted that the vehicle had been “used by the applicant for a period of time since separation” and, by implication, he has chosen to value it at the date on which she took sole possession of the vehicle and had use of it.  That was an option open to him, and he chose to do the same for the valuation of the vehicle retained by Mr Holden.  I consider that, on the basis of the material before him, he did what he could to achieve a just division between the parties in both cases by using the values for the cars which were obtained shortly after separation.

[19]     In conclusion, while I accept the Judge was wrong when he said he had no evidence that the vehicle might be worth $13,000 for the purpose of relationship property at the date of hearing, I do not consider the Judge was in error in electing

the value of $15,999, particularly when there were factors pointing to the value being

4      As required by Property (Relationships) Act 1976, s 25.

5      Hatrick v Commissioner of Inland Revenue [1963] NZLR 641 (CA).

a greater or lesser sum than this and when he took the same approach to valuing

Mr Holden’s car.

Was the Judge in error to accept the value of $1,000 for the Ford Falcon XR6 retained by Mr Holden?

[20]     Ms Jackson in her submissions said that this vehicle which was retained by Mr Holden was “immaculate” and should have been valued at more.  However, as the  Judge  said,  the  only  valuation  provided  for  the  vehicle  was  $1,000  as  at April 2014.   This was on the basis it was in “a rough condition” as stated in the valuation.  Whatever improvements have been done on it have been undertaken by Mr Holden after this date.  In those circumstances, I consider it is appropriate that the valuation which was closer to the time of separation is the one to take into account.   If Mr Holden has improved the vehicle through his own exertion since obtaining possession of it, there is no requirement to take that into account to achieve a just division of relationship property.

[21]     I therefore do not consider the Judge was in error to accept the valuation of

$1,000 which was supplied by Ms Jackson, and this ground of appeal accordingly fails.

Did the Judge erroneously value the boat and trailer at $6,000?

[22]     The jet boat and trailer was uplifted by Mr Holden post-separation, and he obtained a valuation of it at $6,000.  Ms Jackson challenges that valuation.  It is her understanding that $11,000 was borrowed from her relative, Mr Brown, to purchase the  jet  boat  and  trailer.    At  the  time  of  purchase,  the  boat  was  assessed  by Steve Gooding Marine Limited as being sea worthy and Ms Jackson says that the boat and trailer’s valuation at that time was $10,000, although there is no valuation evidence to that effect.

[23]     A valuation  was  obtained  on  11 April  2014  from  Steve Gooding Marine Limited which noted that the “trailer will need work and the floor and the rear of the boat is slightly soft and will need repaired (sic) at some stage”.   It gave an “as is condition” value of $6,000 inclusive of GST.  At this hearing, Mr Holden explained

that the boat was in need of repair and his acknowledgement that he could get $8,000 for it would be if he put the time into repairing it.

[24]     In all the circumstances, I can see no reason to displace the valuation of

$6,000 which was adopted by the Judge, there being no reliable evidence to displace that valuation which was obtained after separation.

Was the Judge in error to accept the valuation of tools at $2,530, when the appellant said that only reflected a small portion of the tools he retained?

[25]     In Ms Jackson’s narrative affidavit, she claimed that Mr Holden retained work tools “which I estimate to be of a value in excess of $20,000” and “tools from the garage which I estimate to be worth approximately $15,000”.  She said that the respondent should have these tools valued.  Mr Holden, however, says that “my tools are insured for $6,000 and second hand value would be alot (sic) less than that”.

[26]     Mr  Holden  belatedly  provided  a  valuation  of  tools  in  his  possession undertaken by William Todd and Co (2011) Ltd.  It valued a range of tools including a  welder,  radiator  tester  kit,  brake  testing  kit  and  panel  removing  kit,  plus  a Sidchrome mechanics toolbox and contents in a Jonesway mechanical toolbox (on wheels) and its contents.  The total value of the tools listed was $2,530.  Ms Jackson says this did not value “even quarter of them”.  However, Mr Holden says he took Mr Todd to his place of work and he valued all the tools he had there.

[27]     On appeal, I simply do not have adequate evidence to displace the Judge’s finding that this was a reasonable valuation of the tools Mr Holden retained.  While Ms Jackson asserts that there were a range of other tools which were not valued, without evidence of what those were and what their value would be, I am unable to disturb the Judge’s finding. Accordingly, this ground of appeal fails.

Did the Judge err in his assessment of the value of chattels each retained?

[28]     Ms  Jackson  challenged  the  Judge’s  conclusion  that  she  retained  chattels valued at $1,635 and Mr Holden retained chattels valued at $1,000.  In support of this,  she  referred  to  photographs  which  she  had  produced  as  an  exhibit  at  the

Family Court hearing, which showed numerous items which were put into the jet boat when the boat was delivered to Mr Holden.

[29]     As the Judge said, the photographs appeared to show a range of tools, items which would be associated with the boat itself, and some used household items. Mr Holden said that most of the goods which came in the boat were either broken, or were rubbish and were disposed of.

[30]     In  Ms  Jackson’s  earlier  narrative  affidavit  she  said  “we  have  split  the household chattels between us.  In terms of the household family chattels it seems approximately equal and I take no further issue”.  At that stage she only took issue with the value of the tools Mr Holden retained.

[31]     The  only evidence  before  the  Court  as  to  the  value  of  chattels  was  the valuation of $1,635 for chattels retained by Ms Jackson, which Mr Holden accepted. The Judge discussed the disputes over the value of the chattels which Mr Holden received and, in the absence of evidence, other than the photographs (which would have included some of the tools which were valued), and the competing views of Ms Jackson and Mr Holden as to their value, he concluded that “a figure of $1,000 would be appropriate”.  He supported this conclusion by noting that “the expectation of the value of chattels is usually higher than the reality of the situation”, and, “judging by the material that the photos show, the chattels would have little value if they were serviceable”.  In light of the limited evidence before the Court, I consider there is no reason to depart from the Judge’s estimate that Mr Holden retained chattels valued at approximately $1,000.

[32]     More  importantly,  though,  from  Ms  Jackson’s  perspective,  the  Judge recorded that she retained an asset of $2,350, being the value of joinery which the couple purchased with the intention of using in the family home, but which she sold to a friend for $2,350, after separation.

[33]     In her second narrative affidavit, Ms Jackson explained that the sale proceeds were used to assist with new kitchen joinery for the family home.  She reiterated that at this hearing and said, therefore, that this sum should not have been taken into

account as a separately-valued chattel, as its value was already reflected in the value of the family home.

[34]     I agree.  While Mr Holden understood she had used these funds to pay other debts, there is no reason to depart from her assertion that the sale proceeds of the kitchen joinery were used to fund the installation of other joinery into the family home.  As the family home was valued and accounted for as an asset being retained by Ms Jackson she should not have been considered to have received the benefit of

$2,350, in addition to the benefit of the net equity in the family home. [35]   Ms Jackson’s appeal on this point is allowed.

Did the Judge take account of all valuation fees met?

[36]     Ms Jackson’s complaint in this regard was that each party got a credit for valuation fees they had incurred, but the Judge had omitted to give her credit for a

$50 valuation fee she incurred for valuing one of the two cars.   I accept there is evidence to support this valuation cost and this should be added as a credit to Ms Jackson.

[37]     Her appeal on this point is allowed.

Was the unpaid balance of the GE credit card a relationship debt?

[38]     Ms Jackson pointed out that statements for the GE credit card showed that it had been paid off on 19 April 2013, which she said was two weeks before separation. She  therefore  disputed  that  any  debt  incurred  on  this  card  after  that  was  a relationship debt.  However, Mr Holden pointed out that the statements for the credit card showed the balance as at 19 July was $2,957.45 (being the figure used in apportioning the relationship debts).  As the parties only separated on 7 July 2013, this amount was properly taken into account as a relationship debt.

[39]     I accept that the narrative affidavits before the Court confirm the couple separated on 7 July 2013, so it was appropriate for the Judge to take into account the balance owing on the GE credit card shortly after this date.

[40]     This ground of appeal therefore fails.

Was  the  Judge  correct  to  assess  the  relationship  debt  owing  to  Mr  and

Mrs Jackson senior at $20,307.36?

[41]     One of the couple’s biggest obligations is the amount owing to Ms Jackson’s parents.  Her parents provided affidavit evidence outlining the financial support they provided to the couple over the years.  This included drawing down bank loans of

$25,100 and $10,000 to help the couple meet their debts.  The balance outstanding on those two loans, shortly before hearing, was $20,307.36.  The Judge accepted that this amount was lent to the couple and was a relationship debt which needed to be repaid.

[42]     However, Ms Jackson’s parents also outlined other financial assistance they provided  to  the  couple.    These  included  using  their  Q  card  to  purchase  the engagement  and  wedding  ring  set  for  their  daughter  and  the  wedding  ring  for Mr Holden from Michael Hill Jewellers.  They claimed the amount the couple owed for those rings was approximately $2,000. They also say that their GE card was used to purchase a laptop for the couple from Harvey Norman and a tablet and mobile telephone for Mr Holden from Noel Leeming, with the total amount being spent on the GE card being $2,325.

[43]     They also said they had used their Farmers card to purchase baby items and clothing for their two grandchildren and they had paid for fuel for the couple’s motor vehicles and that expenditure totalled approximately $500.  They also claimed that

$10,000 was placed on their American Express credit cards to assist with costs associated with the daughter and son-in-law’s wedding and with family presents and other matters.  Finally, they said there were various cash advances made over time for family expenditure totalling $1,175.  They therefore claimed that “at the time of separation, the total amount of $42,756 was owing”.   This took into account the loans from the ANZ, the credit card and store card use, and the cash advances.  By the time of hearing they calculated that the amount owing was $35,807.  They said that they had received no payments from Mr Holden, only payments from their daughter, even though Mr Holden had agreed that, after separation, he would make repayments for the cards and other advances at $350 per month.

[44]     Mr Holden’s position is that he accepts that the two of them borrowed from her parents in order to pay off their own debts which included an overdraft of the National  Bank,  their  Farmer’s  card,  a  debt  to  GE  Finance,  and  their  Q  card. However, he does not accept that other assistance they received from Ms Jackson’s parents was provided on the basis they were loans which were to be repaid.

[45]     The  Judge  discussed  the  evidence  relating  to  the  monies  received  from Ms Jackson’s parents.  He noted that Mr Holden acknowledged he and Ms Jackson agreed to repay the money that had been raised by her parents by the way of two loans from the ANZ bank.

[46]     The  Judge  however,  was  more  sceptical  about  the  claims  that  the  other amounts spent by her parents were all expended on the basis they were loans which were repayable.  In relation to the claim that $2,000 was spent on the purchase of wedding rings, the value of the purchase of the ring was $1,969 and that sum was billed to Mr Jackson’s Q card on 11 April 2008.  However, the Judge noted there was no evidence that this amount was ever sought to be repaid, nor any evidence of any discussion  regarding  repayment  of  this  sum  until  that  assertion  was  made  by Ms Jackson in the course of these proceedings.  In any event, I note that any claim for repayment of this sum would now be statute-barred, as the claim for repayment is being made more than six years after the sum was advanced.

[47]     The Judge concluded that the purchases of the tablet, mobile phone and laptop on Mr and Mrs Jackson’s GE card were gifts, rather than “a debt that was being incurred which would have to be repaid”.  Similarly the use of the Farmers card to buy baby items for the grandchildren and fuel for the cards was concluded by him to be “an action taken by caring grandparents that would have been expected in normal family relationships.  It is not a debt that was ever written down and signed off as being claimable, and no discussion about the repayment of it was ever made”.

[48]     In respect of the money advanced from the American Express card to meet wedding expenses, the Judge held that “normal society expectations regarding weddings  are that parties share the cost of the weddings, or the parents or the

families, if they can contribute to it”, and, “there is no evidence that there was ever an agreement between them for repayment”.

[49]     In  relation  to  whether  other  expenditure  by  Ms  Jackson’s  parents  was intended to be repayable, the Judge had to resolve a clear conflict between the evidence of Ms Jackson which was “we have used my parents cards on the basis that we meet the payments”, and Mr Holden’s evidence that he was not aware of this at all.  While Ms Jackson points out that her parents were not cross-examined on this issue by Mr Holden, this was no doubt a consequence of Mr Holden’s lack of familiarity with Court procedure.

[50]     Furthermore, the Judge still had to make a rational decision based on the evidence he was presented with.   Given  that the parents had  not kept accurate records of what was owing, nor concluded any agreement during the couple’s marriage as to how those amounts were to be repaid, I consider it was open to the Judge to conclude that he was not satisfied, on the balance of probabilities, that the amounts the parents had spent on their wedding and subsequent gifts and financial support for the couple, were anything other than gifts.  The fact that the parents had only tried to gather the information about what was alleged to be owing, and to quantify it  at  the  point  the  relationship  property proceedings  were  commenced, reinforces to me that it was reasonable for the Judge to conclude these amounts were not true debts.  Instead, it appears that repayment of these sums was sought to help their daughter in the final allocation of relationship property and relationship debts.

[51]     The appeal on this ground also fails.

Was  the  Judge  in  error  to  make  Ms  Jackson  responsible  for  the  debt  to

Mr Brown, when Mr Holden retained the boat?

[52]     The couple borrowed $11,000 from Ms Jackson’s grandfather, Mr Brown, in order to purchase the jet boat and trailer.   While the evidence suggests that the purchase price of the boat and trailer did not account for the entire amount borrowed, there can be no doubt that the sum borrowed was a relationship debt.

[53]     The only basis for this appeal was that Ms Jackson felt aggrieved that she was still responsible for the debt when she did not have the benefit of the asset that the debt related to.   That said, Mr Holden equally pointed out that he retained responsibility for the Geneva Finance debt, when he did not retain the XR8 motor vehicle which was purchased using that finance.

[54]     I  am  satisfied  that  there  is  no  basis  for  interfering  with  the  Judge’s determination on this count.   He endeavoured, as best he could, to apportion the relationship debts which were still to be paid, fairly between the couple.  While, as a matter of practicality, the party retaining the asset should also be responsible for the debt relating to that asset, the Judge here was faced with a dilemma in that the debts far exceeded the value of the assets.   Mr Holden needed to retain some assets to equalise the division, and as Ms Jackson retained the house and most valuable car it was logical that he retained the boat and trailer.  Furthermore, as the debt was owed to Ms Jackson’s grandfather, it was unsurprising that the Judge held Ms Jackson should be responsible for the debt to her relative.  Again, there is no error arising simply because the debt has not followed the asset.

[55]     This ground of appeal also fails.

Correctly apportioning the relationship property and the relationship debts

[56]     In light of the outcome of this appeal, where I have found that the judge has not given Ms Jackson credit for the liability of the $50 valuation fee and has erroneously taken account of the asset of $2,350 relating to the sale of joinery, the allocation of debts and assets must be adjusted accordingly.

[57]     When  these are taken  into  account,  it  is  clear  that  Ms  Jackson  has  still retained less of the debt burden than Mr Holden when the Judge intended the debt position to be equalised.  It can be equalised by placing more of the Geneva Finance debt burden against Ms Jackson (which, in any event, she said she has been paying).

[58]     As a consequence, taking account of the matters raised on appeal, the value of the assets Ms Jackson is retaining decreases by $2,350 to $185,134 and her debts

or other liabilities increase by $50 to $200,542.49, leaving a net debt position of

$15,408.49 as compared with Mr Holden’s net debt position of $21,914.18.

[59]     To achieve a roughly equal allocation of debts, as intended by the judge, I consider Ms Jackson should meet more of the Geneva Finance payments.   If she makes 10 payments of $600, this would approximately equalise the position as shown in the following table:

Appellant		Respondent
Asset	Value	Asset	Value
The family home	$167,500.00	1996 Ford Falcon XR6	$1,000.00
2005 Ford Falcon XR8	$15,999.00	Jet boat and trailer	$6,000.00
Chattels retained	$1,635.00	Tools	$2,530.00
Dog	$750.00
Chattels	$1,000.00
Total Assets	$185,134.00	Total Assets	$11,280.00
Debt/Liability	Debt/Liability
Valuation fees	($107.50)	Valuation fees	($174.00)
Valuation fee for house	($350.00)	ANZ Visa	($11,364.47)
Mortgage owing to BNZ as at date of hearing	($159,687.77)	GE Creditline	($2,957.45)
Farmers card at separation	($507.44)	Balance of Geneva Finance loan as at date of hearing less $6,000 to be paid by Ms Jackson	($13,657.77)
Q card at separation	($2,287.35)	ANZ overdraft facility	($2,040.49)
Meridian electricity	($570.48)
Sky TV	($300.00)
Invercargill City Council rates	($1,424.59)
Owen Brown	($11,000)
Geneva Finance payments (10 x $600)	($6,000)
ANZ loan to parents at date of hearing	($20,307.36)
Mortgage reduction since separation	($1,000)
Total Debts	($203,542.49)	Total Debts	($30,194.18)
Net Position	($18,408.49)	Net Position	($18,914.18)

Outcome

[60]     The appeal is allowed in relation to:

(a)       the  claim  the  sum  of  $2,350  was  erroneously  listed  as  an  asset retained by Ms Jackson;

(b)      the claim the Judge had overlooked the cost of a valuation met by

Ms Jackson;

(c)       the claim that the final reconciliation and attribution of debts was in error, albeit that required a correction in Mr Holden’s favour.

[61] As between the parties, entitlement to the assets and responsibility for the debts is as attributed in the table at [59] above.

Copy to: Appellant

Defendant