Weber v Henderson
[2018] NZHC 490
•21 March 2018
IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY
I TE KŌTI MATUA O AOTEAROA TE PAPAIŌEA ROHE
CIV-2017-054-637
[2018] NZHC 490
UNDER Property Law Act 2007 IN THE MATTER
of an Application for division of property
BETWEEN
SHARRYN EVELYN WEBER
Applicant
AND
DEBRA LEE HENDERSON
Respondent
Hearing: 20 March 2018 Appearances:
M W G Riordan for the applicant
Judgment:
21 March 2018
JUDGMENT OF CULL J
[1] Ms Weber and Mrs Henderson each own a half share of a residential property in Palmerston North (the property). Ms Weber applies by way of originating application for division of the property under s 339 of the Property Law Act 2007 (the Act). She also seeks supplementary orders under s 343 of the Act to facilitate the sale of the property.
[2] Mrs Henderson was served, but did not file any response in the proceeding and nor did she appear at the fixture. Thus, the hearing of Ms Weber’s application proceeded by way of formal proof.
WEBER v HENDERSON [2018] NZHC 490 [21 March 2018]
Factual background
Events leading up to this proceeding
[3] Ms Weber and Mrs Henderson were long-time friends, who had both been renting alone after their children had moved out. In July 2017, they decided to purchase a property together, with the intention to co-habit while retaining space for their children and grandchild to stay if needed. The property, including fees, cost
$598,867.90. Ms Weber contributed $108,176.40 (including a personal loan of $4,500 obtained from GE Finance) and Mrs Henderson contributed $11,482.23. The remainder of the purchase price was financed by a mortgage of $479,200.00 from ANZ Bank.
[4] The property was purchased as tenants in common in equal shares, however, Ms Weber claims in her first affidavit that the only reason for this was that she was unaware at the time that it was possible to have unequal shares.
[5] Mortgage repayments were made from a joint account. At the date of application, 15 December 2017, Ms Weber had contributed $6,829 and Mrs Henderson had contributed $4,840.
[6] Ms Weber and Mrs Henderson have now fallen out with each other. Ms Weber claims that she feels unsafe in the property and wishes to sell, but attempts to discuss sale with Mrs Henderson have been unsuccessful.
[7] In her first affidavit, dated 14 December 2017,1 Ms Weber explains that several members of Mrs Henderson’s family are living at the property, including two daughters, the boyfriends of each daughter and one granddaughter. Ms Weber claims that she has not consented to either of the boyfriends living at the property.
[8] Ms Weber claims that she has been subject to verbal abuse and threats, and also claims that she has been “systematically excluded from all the common areas of the property”.
1 Filed in this Court on 7 February 2018, but originally filed in the District Court on 15 December 2017.
[9] The younger daughter, Britney, who is aged 18, has allegedly threatened to cut Ms Weber’s throat, although there are no further details specifying this allegation.
[10] When Britney’s former boyfriend moved in, Ms Weber questioned it, but was allegedly met with a “very aggressive” response involving a lot of swearing. A second verbal exchange allegedly occurred when Britney’s current boyfriend moved in, with Mrs Henderson apparently saying, “it’s not up to you who lives here”.
[11] On 26 November 2017, Britney asked Ms Weber to assist the babysitter looking after her daughter while she went out drinking. The baby was having trouble getting to sleep, so Ms Weber attempted to cool it down by rolling down her blankets and dampening her face. When Britney returned home at 3 am, very drunk, she woke up Ms Weber and yelled at her for the manner in which she had interfered with her baby. Britney allegedly called Ms Weber a “piece of shit” and told her to kill herself. She then pushed the contents of a bookcase towards Ms Weber, allegedly with an intention to hit her. Police were called with respect to this incident.
[12] On 2 December 2017, Mrs Henderson allegedly yelled at Ms Weber because her children had left some crumbs on the table.
[13] The older daughter, Karla, who is aged 24-25, is apparently living in the lounge with her boyfriend. Ms Weber’s daughter has allegedly informed Ms Weber that threats have been made against Ms Weber behind her back by both Karla and her boyfriend.
[14] On 3 December 2017, Karla’s boyfriend, who is residing at the address on bail, allegedly shoved two of Ms Weber’s friends, who were there helping Ms Weber remove some of her belongings.
[15] On 4 December 2017, Ms Weber returned home to find her bookcase knocked to the floor and her painting taken off the wall.
[16] On 6 December 2017, Ms Weber returned home to find numerous entryways into the property blocked off, allegedly in an attempt to restrict her access to the
property. This included cutting power to the electric garage door, removing the key to the backdoor of the garage and padlocking external gates. Ms Weber claims this is a fire risk to her, as her bedroom is next to the garage.
[17] Mrs Henderson has also allegedly made threats to call the SPCA to take away Ms Weber’s dog.
[18] In her second affidavit, dated 19 December 2017, Ms Weber alleges that, on 15 December 2017, Karla threated to “smash [her] head in”. Police were again called in relation to this incident.
[19] The joint account, from which mortgage repayments and household expenses are paid, went into overdraft on 17 December 2017 because Mrs Henderson had missed payments.
[20] On 17 December 2017, Ms Weber removed her new $3,600 television from the property with a friend, Mr Stevens. From the photograph exhibits, it appears the television had been smashed in two places. Both Ms Weber and Mr Stevens were subjected to constant abuse while removing the television, as outlined in a handwritten letter by Mr Stevens.
[21] On 19 December 2017, Ms Weber was doing her hair in the bathroom, when she accidentally dropped the hairspray, which made a loud noise. Britney and a friend allegedly came into the bathroom and told her to “shut the fuck up” because the baby was sleeping. After Ms Weber responded, “I didn’t buy this house for Riley”, which refers to the baby, Britney hit Ms Weber on the forehead with a closed fist. The police were called, once more, in relation to this incident.
[22] In her third affidavit, dated 16 February 2018, Ms Weber alleges that she received a further threat from Britney, on 19 December 2017, that she would smash up Ms Weber’s bedroom furniture. Karla’s boyfriend allegedly also stood over Ms Weber in a threatening manner.
[23] On 12 February 2018, Ms Weber returned to the property to find it in a “horrible state”. The wallpaper had been shredded by a cat and there was rubbish everywhere. Ms Weber has been unable to remove her remaining property from the house, including a piano. She claims that when she returned on 12 February, she found that the internal mechanisms of the piano had been snapped.
[24] Ms Weber has moved out of the house, and has been staying in temporary accommodation since 19 December 2017. She ceased making mortgage repayments from this date, and rates are also not being paid. Ms Weber has, however, continued to make insurance payments. ANZ Bank is aware of the situation and has agreed not to take any enforcement action pending action by this Court.
History of this proceeding
[25] On 15 December 2017, Ms Weber filed an originating application without notice in the Palmerston North District Court. On 21 December 2017, Judge Rowe made an order transferring this proceeding to this Court.
[26] On 14 February 2018, Simon France J considered that a without notice application was not appropriate in these circumstances and directed Ms Weber to serve Mrs Henderson. Mrs Henderson was subsequently served on 19 February 2018.
[27] On 5 March 2018, a telephone conference was held but Mrs Henderson did not take part. In a minute, dated 6 March 2018, Clark J observed that a notice of opposition should have been filed by 5 March 2018, yet none had been. Clark J also noted that no application had been filed seeking permission to commence by way of originating application. Clark J required Ms Weber to file such an application, before a formal proof hearing could be scheduled.
[28] On 9 March 2018, Ms Weber filed an interlocutory application without notice for permission to commence the proceeding by originating application. The application was granted and the current formal proof hearing was scheduled.
Subsequent developments
[29] On 16 March 2017, Ms Weber filed a fourth affidavit explaining that the locks have now been changed at the property. She expressed concern that the occupants of the property will ignore any order of this Court, making it impossible for a real estate agent to facilitate a sale of the property. She is equally concerned they will damage the property out of spite, given that Mrs Henderson’s contribution to the property is so much smaller than Ms Weber’s. She also notes that indebtedness to ANZ Bank has increased by approximate $10,000 as a result of Mrs Henderson’s missed payments over the past three months. Accordingly, she seeks an order ejecting Mrs Henderson and her family from the property.
Orders sought
[30]Ms Weber seeks the following orders:
(a)that the property situated at 15 Trump Place, Palmerston North (Lot 135 DP 371854, Computer Freehold Register 290502) be sold;
(b)that Marisha Hes of LJ Hooker Palmerston North be appointed as the exclusive agent on the sale pursuant to an Agency Agreement signed by Ms Weber;
(c)that all occupiers of the property are to maintain the property in good tidy condition up to settlement; and
(d)that any damage to the property that requires funds to be held on settlement, or a reduction in the purchase price, shall be referred to the Court for redetermination of the proper distribution of proceeds.
[31] In addition, by way of memorandum filed on 16 March 2018, Ms Weber seeks the following order as an alternative to order (c):
(a)all current occupiers of the property must vacate the property within 14 days.
[32]In the alternative, if the Court is unwilling to eject Mrs Henderson:
(a)all current occupiers of the property, with the exception of Mrs Henderson, must vacate the property within 14 days.
[33] Ms Weber also seeks orders as to the distribution of the net proceeds of sale. The originating application specified a particular distribution for the proceeds. However, Counsel now suggests that the determination of the distribution should be deferred until after the property has sold and any damage to the property has been calculated.
Relevant legal principles
[34]Section 339 of the Act provides:
Section 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
…
(4)A court making an order under subsection (1) may, in addition, make a further order specified in section 343.
…
[35] Section 342 provides relevant considerations for a court making an order under s 339:
Section 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.
[36]Section 343 outlines supplementary orders that may be made:
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:
…
(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).
Submissions
[37] Counsel for Ms Weber submits that s 343(g) of the Act provides the Court jurisdiction to eject the Hendersons, although he accepts that this is an extreme measure for which there is no precedent. Counsel acknowledges that the ejection order was not originally sought, but relies on Bayly v Hicks for the proposition that the Court has the discretion to make an order different to that sought in the application.2
[38] Counsel also notes that s 63 of the Land Transfer Act 1952, which limits the Court’s ability to eject a registered proprietor from their land, does not prevent an order under s 343 of the Act, because that provision only applies to actions under the Land Transfer Act. In support, counsel relies on the wording of s 63 itself, and s 339(2) of the Act, which states that a supplementary order under s 343 may be made “despite anything to the contrary in the Land Transfer Act 1952”.3
2 Bayly v Hicks [2013] 2 NZLR 401 (CA).
3 Property Law Act 2007, s 339(2)(a).
[39] The following reasons are given for why such an unprecedented order should be made:
(a)Ms Weber owns 90.4 per cent of the equity in the property, compared to Mrs Henderson’s 9.6 per cent;
(b)Ms Weber has made greater contributions to mortgage repayments and outgoings than Mrs Henderson;
(c)Mrs Henderson has neglected the property, and caused increased lending as a result of missed payments;
(d)Ms Weber has been forced out of the property by verbal abuse and intimidation;
(e)Ms Weber is incurring rental expenses at her temporary accommodation, while Mrs Henderson had not incurred any expenses living at the property; and
(f)the hardship on Mrs Henderson of having to find new accommodation at short notice is minimal compared to the hardship Ms Weber has already faced.
[40] The essence of counsel’s submission is that the damage and loss caused as a result of the actions of Mrs Henderson, exceed her original contribution to the property.
Discussion
[41] As the proceedings were permitted to proceed by way of originating application, Part 19 of the High Court Rules 2015 govern the procedure, accordingly evidence for Ms Webber was adduced by way of affidavits, filed in support of the application.
Sale of the Property
[42] I consider that, having regard to the relevant considerations set out in s 342 of the Act and the evidence before the Court, it would be appropriate to order a sale of the property in this case. It is clear that the relationship between the co-owners has broken down and is beyond any prospect of reconciliation. The property is no longer being enjoyed by both owners, and there appears to be no agreed resolution forthcoming from the parties. In those circumstances, a sale of the property is the only sensible solution.
[43] I accept Counsel’s submission that the hearing on the division of the proceeds should be postponed to a date after the sale. It appears that there may have been damage to the property, and there may be a risk of further damage prior to settlement. There may also be issues arising over culpability for the ceased mortgage repayments and rates payments. Finally, it appears that Ms Weber might have a claim to occupation rent under s 343(f), for the period after 19 December 2017, during which Mrs Henderson was the sole occupant owner of the property.
[44] These issues all require quantification and I accept Counsel’s submission that they are best dealt with after sale, when Mrs Henderson will be given further opportunity to respond.
Ejection order
[45] I do not consider that an ejection order is warranted at this stage. From the evidence filed, Counsel identifies two concerns: that the occupants will not comply with the Court orders and that the occupants might further damage the property. At this stage, I consider the former concern is speculative and could be promptly dealt with by an ejection order, if there is non-compliance by Mrs Henderson and her family. In the event of non-compliance, an application for an ejection order (on abridged notice) and supporting evidence can be filed, for urgent hearing.
[46] As for the potential future damage to the property, this can be dealt with as part of the distribution of the proceeds of sale. The fact that any loss caused by Mrs Henderson might be greater than her portion of the net proceeds does not provide
an adequate reason to eject her from the property. Section 343(a) of the Act allows the Court to require the payment of compensation by one co-owner to another, and s 343(f) allows the Court to require the payment of an occupation rent. Neither of these remedies depend on the size of the net proceeds.
[47] There is an additional procedural reason for not granting the ejection application. The originating application without notice was directed to be served on Mrs Henderson by France J. The application did not include the alternative ejection orders, which were filed by way of memorandum on 16 March 2018.4 The ejection application by memorandum has the equivalent effect of a without notice application, which is contrary to the Court’s direction. It is inappropriate, therefore, for this Court to make such an order without notice to Mrs Henderson.
Result
[48] The application for sale of the property is granted and the following orders are made:
(a)the property situated at 15 Trump Place, Palmerston North (Lot 135 DP 371854, Computer Freehold Register 290502) is to be sold, with the net proceeds to be held in the applicant’s solicitor’s trust account, without deduction;
(b)Marisha Hes of LJ Hooker Palmerston North is appointed as the exclusive agent on the sale pursuant to an agency agreement signed by Ms Weber;
(c)if, in the opinion of Marisha Hes, certain remedial steps need to be taken to ready the property for sale, she is to advise the applicant in writing;
(d)all occupiers of the property are to:
4 See para [31] above.
(i)maintain the property in good tidy condition up to settlement;
(ii)co-operate with Marisha Hes in the sale and marketing process; and
(iii)permit access to such persons as are required to undertake remedial work on the property.
(e)the distribution of the net proceeds of sale of the property is to be determined by this Court at a later date; and
(f)leave is granted to Ms Weber to urgently return to this Court if the occupiers of the property do not comply with the above orders or act in a way that impedes the sale process.
[49] If any amendment or addition is sought to the detail of the above orders, Counsel can apply by way of memorandum to the Registrar, before the order is sealed.
[50]Costs are reserved.
Cull J
Solicitors:
Cooper Rapley Lawyers, Palmerston North
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