Parker - [2016] NZHC 3124

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2016-485-000815 [2016] NZHC 3124

UNDER section 119 of the Insolvency Act 2006

IN THE MATTER OF

the bankruptcy of Stacey Maree Foskett

BETWEEN

BEN JAMES PARKER Applicant

Judgment:
(On the papers)

19 December 2016

JUDGMENT OF ASSOCIATE JUDGE SMITH

[1] The applicant, Mr Parker (formerly known as Ben James Mashiter) applies for an order under s 119(1)(b) of the Insolvency Act 2006 (the Act) vesting in him the interest of his former partner, Stacey Maree Foskett, in the property at
31 Weraroa Road, Waverley, South Taranaki District, being a fee simple estate, legal description Lot 2-3, Deposited Plan 2195, being the land contained in Certificate of Title WN188/243 (the Waverley property), to the intent that Mr Parker will become the sole registered proprietor of the property.

[2] Mr Parker says that he started his relationship with Ms Foskett in 2008. They purchased the Waverley property for $160,000 in August 2008, in their joint names. Thereafter they lived on the Waverley property during their relationship.

[3] The parties also purchased a property in Matipo Street, Whanganui (the Matipo property), as a rental investment. They used a company, SRB Properties Ltd (SRB), as the vehicle for this investment. SRB acquired the Matipo property for
$124,000, but Mr Parker says that the capital value of the Matipo Property is now

only $73,000.

PARKER [2016] NZHC 3124 [19 December 2016]

[4] Ms Foskett and Mr Parker obtained finance for these purchases from Sovereign Financial Services Ltd, through that company’s lending arm, Mortgage Holding Trust Company Ltd. For convenience, I will refer to the lender in this judgment as “Sovereign”.

[5] Ms Foskett and Mr Parker separated on or about 31 August 2011. After they separated, the Waverley property and the Matipo property were rented to third parties. Ms Foskett and Mr Parker eventually negotiated a relationship property agreement, which was signed in December 2013. From the separation until the agreement was finalised Mr Parker managed the tenancies for both properties and met any shortfall between the rental income and the mortgage, rates, and insurance payments. He says that he also spent approximately $20,000 renovating the properties.

[6] As part of the relationship property agreement, Mr Parker agreed that Ms Foskett could move back into the Waverley property for a period of time, after which both properties would be sold. Unfortunately, Ms Foskett ran into financial difficulties, and she became bankrupt on 22 January 2015.

[7] At the time of Ms Foskett’s bankruptcy there was no equity in either property, and no value in Ms Foskett’s shares in SRB. The loan from Sovereign, secured over both properties, now totals approximately $230,000, against a combined capital value of the properties of only approximately $207,000.

[8] The Official Assignee disclaimed her interest in the Waverley property, and in

Ms Foskett’s shareholding in SRB, on 31 March 2015.

[9] Mr Parker now wants to protect his position as best he can by having the Waverley property transferred into his…

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 Parker

Details

AGLC: Parker [2016] NZHC 3124
Case: [2016] NZHC 3124
Decision Date: 19 December 2016

CaseChat Overview and Summary

In this case, the applicant, Mr Parker, sought an order under s 119(1)(b) of the Insolvency Act 2006 vesting in him the interest of his former partner, Stacey Maree Foskett, in a property located at 31 Weraroa Road, Waverley, South Taranaki District, to the intent that he will become the sole registered proprietor of the property. The property, purchased by the parties in joint names, had become subject to a mortgage to Sovereign Financial Services Ltd. After the parties separated, Mr Parker managed the tenancies for both properties and met any shortfall between the rental income and the mortgage, rates, and insurance payments. As part of the relationship property agreement, Mr Parker agreed that Ms Foskett could move back into the Waverley property for a period of time, after which both properties would be sold. Unfortunately, Ms Foskett ran into financial difficulties, and she became bankrupt on 22 January 2015. The Official Assignee disclaimed her interest in the Waverley property, and in Ms Foskett’s shareholding in SRB, on 31 March 2015. The Crown, through the Secretary to the Treasury, provided a letter advising that it did not object to the Court making the vesting order which Mr Parker sought, and that it did not wish to be heard on his application.
The court had to decide whether it would be fair to make an order vesting the Waverley property in Mr Parker. The court considered the effect of the disclaimer on Mr Parker’s liabilities in relation to the Waverley property and the fact that he is now solely liable for the outgoings, including the payments to Sovereign under the mortgage. The court also considered the fact that Mr Parker does not have any significant savings or other assets and appears to be at considerable risk under the Sovereign mortgage if for any reason there are difficulties recovering rent from the properties. The court was satisfied that it would be fair to make an order vesting the Waverley property in Mr Parker.

The court ordered under s 119(3) of the Act that the interest of Stacey Maree Foskett in the Waverley property (being the land at 31 Weraroa Road, Waverley, South Taranaki District described as Lot 2-3 Deposited Plan 2195, title identifier WN188/243, Wellington Land Registration District), is vested in Ben James Parker (formerly known as Ben James Mashiter).

Orders