Slade v Slade - [2016] NZHC 133

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-2747 [2016] NZHC 133

BETWEEN
KEVIN GEORGE SLADE

First Plaintiff

KEVIN GEORGE SLADE, MAURICE BARTON, BETTY BARTON and ED JOHNSTONE & CO TRUSTEES LIMITED as trustees of the AMANDA SLADE TRUST

Second Plaintiffs

AND

CAROLYN PATRICIA SLADE First Defendant

CAROLYN PATRICIA SLADE and RAEWYN NONI DURANT as trustees of the SCIADOPITYS HAVEN TRUST Second Defendants

Hearing: 11 February 2016

Appearances:

A R Nicholls for plaintiffs
R Thompson for defendants

Judgment:

11 February 2016

(ORAL) JUDGMENT OF LANG J

[on application for rescinding freezing orders]

SLADE v SLADE [2016] NZHC 133 [11 February 2016]

[1] This proceeding relates to part of the proceeds of sale of a house property situated at 195 Postman Road, Dairy Flat (the property). The property was sold on
18 November 2015, and a portion of the proceeds of sale is currently being held in a solicitor’s trust account by virtue of freezing orders made on a without notice basis by Woolford J on 20 November 2015.

[2] The Court is now required to determine whether the freezing orders should remain in effect.

Background

[3] Mr and Mrs Slade were originally the joint owners of the property, having purchased it in November 2001 with the assistance of a mortgage from a bank. This occurred some four months before their marriage on 15 March 2002.

[4] On 11 June 2004, Mr and Mrs Slade transferred the property into their names as tenants in common in equal shares. Each then immediately transferred his or her share of the property to a family trust. The family trusts continued to own the property as tenants in common in equal shares up until the date upon which it was sold. There is no evidence before the Court regarding the terms on which Mr and Mrs Slade transferred the property to the two trusts.

[5] Mr and Mrs Slade separated in September 2010. Mr Slade remained living in the property after that date. Thereafter, he says he continued to meet all outgoings payable in respect of it.

[6] By March 2015, Mr Slade had accumulated a debt of approximately

$230,000 to the Commissioner of Inland Revenue (the Commissioner). This related to unpaid income tax, together with interest and penalties, for the years ended
31 March 2005 to 31 March 2010 inclusive. The Commissioner obtained judgment against Mr Slade in respect of this debt, and then moved to enforce the judgment by way of bankruptcy proceedings.

[7] Mr Slade was subsequently able to reach an accommodation with the Commissioner under which the Commissioner agreed to halt the bankruptcy proceedings provided Mr Slade paid the tax debt from the proceeds of sale of the property. When the property was sold, each trust received the net sum of
$276,044.40. Mr Nicholls advises me from the bar (because there is no evidence on the point) that the solicitors acting for Mr Slade’s family trust then paid the sum of approximately $255,000 from its share of the sale proceeds…

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.

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Details

Case: [2016] NZHC 133
Decision Date: 11 February 2016

CaseChat Overview and Summary

The case of Slade v Slade involved a dispute over the proceeds of the sale of a property located at 195 Postman Road, Dairy Flat. The property was originally owned jointly by Mr. and Mrs. Slade, who later transferred their interests to family trusts. Following their separation, the property was sold, and a portion of the proceeds was held under freezing orders. The primary issue before the court was whether these freezing orders should remain in effect. The plaintiffs, Mr. and Mrs. Slade, sought to have the freezing orders rescinded, arguing that Mrs. Slade should contribute to the debt Mr. Slade owed to the Commissioner of Inland Revenue, which was settled from the sale proceeds.

The court had to determine if the plaintiffs established a good arguable case, whether there was a risk of asset dissipation, and if the plaintiffs provided a meaningful undertaking as to damages. The court found that the plaintiffs had not established a good arguable case, as their claim under the Property (Relationships) Act 1976 fell outside the jurisdiction of the High Court. Furthermore, there was no evidence to suggest that Mrs. Slade's family trust held the proceeds on her behalf, nor was there any indication that the trusts were used to render the parties judgment-proof. The court concluded that the proceeding should be transferred to the District Court, where the merits of the claim could be properly assessed.

The court set aside the freezing orders made by Woolford J on 20 November 2015, with the order to take effect on 28 February 2016. The proceeding was transferred to the District Court with immediate effect. The defendants were awarded costs on a category 2B basis, with the plaintiffs jointly liable for those costs.

Orders