The Court of Appeal was recently asked to consider whether a multi-million dollar family home in Remuera should be sold. The High Court had ordered a sale, and provided that the proceeds should be divided between the parties. The wife appealed.
The case concerned a divorced couple who had been engaged in a 9 year long court battle following a 25 year marriage. The husband was a partner of a successful law firm; and the wife was a qualified accountant and lawyer, who had been the stay-at-home parent for their two children over many years.
Dividing relationship property is often done by vesting in each party items of property amounting to the value of their entitlement, which is generally an equal share in all relationship property (see Separation and Property Division for further information). An adjustment payment is then made to offset any inequality and equalise the division. For example, if one party keeps the family home then they should “buy out” the other party and make an adjustment payment for half of its value.
In this case, the wife wanted the family home to be vested in her (on the basis of a valuation undertaken in 2013), but the husband wanted it to be sold.
The Court noted that there is no presumption in favour of vesting. The power to vest is discretionary and each case turns on its particular facts. If one party has strong associations with the property, or there are interests of children to be considered, then the decision may be in favour of vesting. However if there is uncertainty as to the value of the property, or there has been a passive increase in value which would result in one party receiving a windfall, then a sale may be more appropriate. The intention of the Property (Relationships) Act is that there be equal sharing, and this should not be superseded by any vesting of particular property.
Whilst the wife here argued that she had a strong association with the property and ran her business from it, the Court viewed this neutrally as the business was able to be moved. There was no goodwill associated with the particular location. Little weight was put on the interests of the children, who were now in their 20s and had moved away. These factors, coupled with the uncertain value of the property, led the Court to agree that the home should be sold.
If you have any questions about the division of relationship property, please do not hesitate to contact our Wellington based family lawyers Debbie Dunbar, email email@example.com, phone (04) 495 9940 or Maretta Twentyman, email firstname.lastname@example.org, phone (04) 495 8918.
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