Strange v Hans
[2019] NZHC 3072
•21 November 2019
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2019-404-1673
[2019] NZHC 3072
BETWEEN KENDYLL ELIZABETH STRANGE
Plaintiff
AND
VICTOR WILLIAM HANS
Defendant
Hearing: 21 November 2019 Appearances:
N N Geiger for applicant Defendant in person
Judgment:
21 November 2019
ORAL JUDGMENT OF KATZ J
Solicitors: D G Law Limited, Auckland
STRANGE v HANS [2019] NZHC 3072 [21 November 2019]
Introduction
[1] Kendyll Strange and Victor Hans are the registered proprietors, as tenants in common in equal shares, of a property situated in Pukekohe (“the property”).
[2] Ms Strange has applied for an order under s 339 of the Property Law Act 2007 (“the PLA”) for a sale of the property. She also seeks ancillary orders as to the distribution of the proceeds of sale, as well as orders relating to the collection of Mr Hans’ personal belongings from the property.
Background
[3] Ms Strange and Mr Hans were previously in a relationship, during which time they purchased the property together, on 18 November 2016, for $439,000. Their relationship ended in August 2017.
[4] In November 2018, Ms Strange’s solicitor wrote a letter to Mr Hans proposing that the property be sold. Mr Hans was agreeable to selling the property. Unfortunately, however, the parties have been unable to agree to ancillary matters, such as the conditions of sale and the distribution of the sale proceeds.
[5] After some initial correspondence there appears to have been no correspondence between the parties since March 2019 to progress matters. This application was filed in August 2019.
[6] Ms Strange submits that the relationship between the parties has deteriorated to such an extent that there is no level of trust between them or ability to co-operate. This has made it impossible for them to come to an agreement in relation to the terms of the sale.
Property Law Act provisions
[7] The Court may order a division of property under s 339 of the PLA, which relevantly 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.
...
(4)A court making an order under subsection (1) may, in addition, make a further order specified in section 343.
…
[8] The Court, in deciding whether to exercise its discretion to make an order under s 339, must have regard to the considerations set out in s 342 of the PLA:
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.
[9] If the Court, having considered the above factors, is satisfied a sale order should be made, then s 339(4) provides for further orders that the court may make to facilitate a sale and distribution of sale proceeds. The further orders the court may make are set out at s 343 of the PLA which relevantly provides:
343 Further powers of court
A further order referred to in section 339(4) is an order that is made in addition to an order under section 339(1) and that does all or any of the following:
(a)requires the payment of compensation by 1 or more co-owners of the property to 1 or more other co-owners:
(b)fixes a reserve price on any sale of the property:
(c)directs how the expenses of any sale or division of the property are to be borne:
(d)directs how the proceeds of any sale of the property, and any interest on the purchase amount, are to be divided or applied:
…
(f)requires the payment by any person of a fair occupation rent for all or any part of the property:
(g)provides for, or requires, any other matters or steps the court considers necessary or desirable as a consequence of the making of the order under section 339(1).
Should an order for sale of the property be made?
[10]The first issue is whether an order should be made for a sale of the property.
[11] Mr Hans does not oppose a sale order being made. Indeed, it appears from the correspondence that that has been his position throughout. The areas of dispute relate to the ancillary orders that are sought.
[12] I am satisfied that, in light of the total breakdown in the relationship between the parties, it is appropriate that a sale order be made.
What ancillary orders should be made?
[13] A number of the ancillary orders sought by Ms Strange are consented to. I will therefore focus only on those that are in dispute.
[14] First, there is disagreement as to who the listing agent for the property should be. I am satisfied that it should be Barfoot and Thompson, as proposed by Ms Strange. I note that they are a well-established and reputable real estate firm. They are already familiar with the property having previously done an appraisal on it.
[15]Second, Ms Strange proposes that the listing price be set at a maximum of
$500,000 and a minimum of $475,000. She has provided three appraisals in support of that listing price. They are from Barfoot and Thompson, Ray White Real Estate and Snow Money, respectively. The appraisals range from $450,000 at the lower end to $500,000 at the upper end.
[16] Mr Hans appeared to be concerned that the proposed listing price was too low. He has not, however, provided any appraisals or valuations in support of a higher listing price. I am therefore satisfied that the listing price sought by Ms Strange is appropriate.
[17] Third, Ms Strange seeks to be reimbursed for certain outgoings that she has paid since Mr Hans left the property. Although Mr Hans has made some contributions to his share of the outgoings, Ms Strange says that there is currently a shortfall of
$5,531.72 owing by Mr Hans in respect of his share of the mortgage, rates and insurance. She has provided a detailed breakdown of the sums claimed.
[18] Mr Hans said he has not been able to check the accuracy of the calculations because Ms Strange has all the relevant documents in her possession and did not provide him with copies when he requested them.
[19] Although there is a lack of supporting documentation, the quantum claimed does not appear to be inflated. It is broadly commensurate with the weekly payments that Mr Hans acknowledged making when he was living at the property, albeit reduced to take account of extra payments (such as Sky TV bills) that Mr Hans also previously contributed to.
[20] Mr Hans submitted that he should not be required to pay the mortgage/outgoings shortfall, given that Ms Strange has had occupation of the property throughout the relevant period and he has had to pay to live elsewhere. He submitted, in effect, that she should pay “occupation rent” equating to his share of the outgoings.
[21] Ms Strange’s position, on the other hand, is that she should not have to pay occupation rent as Mr Hans had to leave the property as a result of a family violence incident in October 2018. Mr Hans was charged with male assaults female in relation to that incident. He was convicted of that charge in June 2019 and sentenced in October 2019. Pending trial, Mr Strange’s bail conditions prohibited him from living at the property. He has since given an undertaking not to go on the property. Mr Geiger submitted, in effect, that Ms Strange should not have to bear the financial consequences of Mr Strange’s criminal conduct.
[22] The issue of occupation rent is not straightforward. Given the circumstances in which Mr Hans left the property it is appropriate that Ms Strange have a reasonable period of occupation without having to pay occupation rent. That period should not, however, extend indefinitely. Mr Hans has had to incur the costs of living elsewhere and is simply not able to pay mortgage costs as well as rent. Ms Strange, meanwhile, does not appear to have made any efforts to obtain a flatmate or boarder to help pay the mortgage and outgoings.
[23] In my view the appropriate compromise is for Mr Hans to bear his share of the mortgage and outgoings up until 15 November 2019 (in respect of which there is a shortfall of $5,531.72). Going forwards, however, Ms Strange should pay occupation rent by meeting Mr Hans’ share of the mortgage payments and outgoings up to a maximum of $250.00 per week. (Currently Mr Hans’ share of the mortgage and outgoings is $246.32 per week, on Ms Strange’s calculations).
[24] The last issue in dispute relates to how Mr Hans is to go about retrieving his belongings from the property. It is apparent from the correspondence that this has been the key issue in contention between the parties. Their failure to resolve this matter has proved to be a road block to resolution of the remaining, relatively minor, issues regarding the sale process (as set out above).
[25] There has been extensive correspondence between solicitors for the parties on this topic. In short, Mr Hans wanted to be able to collect his belongings (which are apparently extensive) in person. Ms Strange would not agree to that. She took the position that Mr Hans could not do so, as he was precluded from coming onto the
property by his bail conditions. She was not prepared to consent to a variation to those conditions to enable Mr Hans to collect his property. She was, however, willing to agree to Mr Hans’ brother collecting some of his property, and he has done so.
[26] The ancillary order now sought by Ms Strange in relation to this issue is that Mr Hans be entitled to pick up his belongings at the property on the last weekend prior to the settlement date (assuming, of course, that the house sells). She seeks to have a representative present at the property while Mr Hans removes his belongings on that weekend.
[27] The matter is complicated somewhat by the fact that Mr Hans has given an undertaking in Family Court proceedings not to visit the property unless it is specifically agreed and arranged with Ms Strange through her lawyer. Obviously, however, that undertaking does not preclude this Court from making an ancillary order enabling Mr Hans to visit the property to uplift his belongings.
[28] Mr Hans noted that he moved out of the property a considerable time ago now. He has therefore been without his belongings for a very lengthy period. He wishes to collect them as soon as possible.
[29] It is not reasonable, in my view, to expect Mr Hans to have to wait (possibly many months) until the house is sold to uplift his own belongings. He should be able to collect them promptly.
[30] Finally, there is the issue of costs. Mr Geiger submitted that if I order the sale of the property then costs should necessarily flow to his client, as the successful party. The matter is somewhat more complex than that, however. Mr Hans has never opposed a sale of the property. The difficulty is that the parties have been unable to agree on ancillary issues such as the terms of sale, and how and when Mr Hans was to uplift his belongings from the property. Ms Strange appears to have been somewhat difficult in her approach to the latter issue. This in turn has frustrated Mr Hans and, as a result, he does not appear to have made much effort to progress the resolution of other issues in relation to the sale. As is common in cases of relationship breakdown,
the parties have been unable to engage in constructive dialogue on the relevant issues, even with the assistance of lawyers.
[31] Taking all of these matters into account, I am of the view that Ms Strange should receive some costs, as she has been put to the expense of applying to the Court for a sale order, together with ancillary orders. On the other hand, Mr Hans did not oppose a sale, and the failure to agree the terms of sale cannot be laid entirely at his door. Further, a significant impediment to a constructive resolution was the position that Ms Strange took on the issue of Mr Hans collecting his property.
[32] Taking all of these matters into account, the appropriate costs award in my view is that Mr Hans pay costs to Ms Strange on a 2B scale basis, reduced by 50 per cent to reflect the factors I have identified.
Result
Order for sale:
[33] I make an order pursuant to s 339(1) of the Property Law Act 2007 directing the sale of the property (particulars of which are set out in the statement of claim) on the following terms:
(a)The property is to be listed for sale by negotiation on usual terms with Barfoot & Thompson.
(b)The listing price is to be set at a maximum of $500,000 and a minimum of $475,000.
(c)The property is to be sold if an offer of no less than the minimum listing price is received and becomes unconditional.
(d)The Registrar is authorised to take such steps as may be necessary to affect the sale, including:
(i)selecting and engaging a firm of solicitors independent of each party to act for them in relation to the sale and the conveyancing
of the property, if the parties are unable to agree between themselves a suitable independent firm of solicitors;
(ii)signing the listing authority with Barfoot and Thompson on behalf of either party if that party fails to do so;
(iii)signing the sale and purchase agreement on behalf of either party if that party fails to do so; and
(iv)taking any other steps that may be required to facilitate the transfer to the new owner following the sale, if one or both of the parties do not take the necessary steps.
(e)The parties are to co-operate with all aspects of the sale process including (without limitation) keeping the property clean, tidy and presentable for sale, and making reasonable access available for viewing as the agent or agents requires or require.
Proceeds of Sale
[34] The proceeds of the sale of the property are to be distributed in the following priority and manner:
(a)repayment of all sums secured by mortgage or loans over the property;
(b)payment of any real estate agent’s commission, marketing costs (including valuations), auctions costs and legal fees incurred in connection with the sale and transfer of the property;
(c)$50,000 to Ms Strange, being her initial cash contribution to the purchase;
(d)reimbursement of $5,531.72 to Ms Strange, being sums paid by her in respect of Mr Hans’ share of outgoings (including mortgage payments,
rates, and other expenses related to the property) from October 2018 until 15 November 2019;
(e)any outstanding rates or insurance premiums on the property;
(f)legal fees and disbursements attendant on the sale;
(g)the reasonable fees of the Registrar for the process required by this order;
(h)the award of costs set out at [37] below, if those costs have not been paid prior to settlement; and
(i)the remaining proceeds of sale after payment of all sums referred to in the above order are to be paid to Ms Strange and Mr Hans in equal shares.
Occupation rent
[35] I direct that Mr Hans is not required to pay his half share of the outgoings for the property from 15 November 2019 until the date of sale, in lieu of occupation rent from Ms Strange, provided that his share of the outgoing does not exceed $250.00 per week. (I note that it is currently $246.32 per week).
The uplift of Mr Hans’ belongings
[36] Mr Hans (together with any person(s) he requires to assist him) is to pick up his belongings from the property on the weekend of 14 and 15 of December. Mr Hans is to have free access to the property between 9.00 am and 8.00 pm on both Saturday and Sunday. Ms Strange is required to leave the property during those hours. She may, however, have a representative at the property in her absence. To avoid the risk of matters escalating matters further, however, that representative is not to be Ms Strange’s mother.
Costs
[37] I make an order of costs in favour of the plaintiff on a 2B scale basis, but the quantum of the award is reduced by 50 per cent. In the (hopefully unlikely) event of any dispute as to quantum, the matter may be referred to me for determination.
Leave
[38] Leave is reserved to either of the parties, or the Registrar, to apply for such further orders as may be thought necessary to give effect to these orders.
Katz J
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