Property
values in relationship disputes are to be fixed as at the date of the first
court hearing. Long-running litigation
following a twelve month marriage saw a court order for the woman to pay her
former husband a total of some $30,000.
Married in May 2002 and separated in May 2003, it was not until 2012 that some finality was reached
in a relationship property dispute between Mr Burgess and Ms Beaven.
Plans to develop a
vineyard and homestay business on a rural property at Medbury in North Canterbury
had come to nothing. Each had sold their
house in Christchurch to fund the proposed business.
Initially, the Family
Court had taken the view that Ms Beaven’s contribution had been “clearly
disproportionately greater” ordering a 65:35 split in her favour later amended
to 62:38. Ms Beaven was held entitled to
$36,250 which Mr Burgess paid.
A series of appeals
reached the Court of Appeal which ruled that an uneven split was not correct,
ordering instead the standard 50:50 split of relationship property. Both parties brought roughly the same equity
to the marriage and there had been no material difference between their
financial contributions to the date of separation. Property values were assessed as at the date
of separation in 2003.
The Supreme Court ruled
that this valuation date was incorrect.
Where there is a dispute, the Property (Relationships) Act requires
property to be valued as at the date of the first court hearing. This was the Family Court hearing in 2007,
some four years following separation.
Adjustments can be made for work done increasing the value of
relationship property between the date of separation and the first court
hearing.
From date of
separation up to the Family Court hearing, Mr Burgess was adjudged to have
increased the value of Medbury property assets by some $35,100 by keeping up
maintenance and paying mortgage, rates and insurance costs after separation. Medbury was subsequently sold in a mortgagee
sale.
Reworking the
valuation figures and including a refund of the $36,250 previously paid by Mr
Burgess resulted in a court order that Ms Beaven pay Mr Burgess $30,046 in
satisfaction of his share of the relationship assets.
Burgess
v. Beaven – Supreme Court (9.08.12)
12.024