Mihiteria King’s film company Blacklime Ltd used a circuitous route to pay wages for her son, allegedly part of scheme allowing him to escape child support liability but later leading to a relationship property argument whether $21,600 was relationship money or a loan.
Ms King’s son Scott James Douglas lived with Rebecca Annan for over three years. Ms Annan alleged the ‘money-go-round’ was set up by Mr Douglas in 2013 to cheat on child support payments arising from an earlier relationship. Reducing declared wages reduced his personal liability for child support.
The High Court was told Mr Douglas and Ms Annan purchased a house at Browns Bay on Auckland’s North Shore in late 2013. Title was taken in the name of their family trust: Fresh Start Trust. From that date, weekly payments of $600 were paid by Mr Douglas’ father into the Fresh Trust bank account. This money was used to pay down bank borrowings. When the two later separated, Mr Douglas and his parents claimed the weekly payments were a loan; demanding repayment of $21,600 from sale of the Browns Bay house.
Evidence was given that Mr Douglas’ parents resisted disclosing source of the weekly payments. Only after concerted legal pressure was it identified that the payments came from Ms King’s film company, being first paid into her husband’s bank account and then transferred to Fresh Start Trust. Justice Lang ruled the weekly payments were from Blacklime and intended to supplement Mr Douglas’ reduced wages as a Blacklime employee. The payments were never intended to be a loan, he said. The $21,600 was not to be deducted as a debt before splitting 50/50 the net proceeds from selling Browns Bay, he ruled.
Annan v. Douglas – High Court (13.07.20)
20.123