Family financial arrangements enabling a daughter to buy a home came unstuck with a later dispute over ownership. Cash contributions did not match ownership as registered on title to an Auckland property.
The High Court was told the Harts agreed in 2006 to assist daughter Marlene to purchase a home on Minerva Terrace, Howick. She has five other siblings.
A bank loan of $670,000 completed the purchase. Allocation of this money was less than straightforward. Parents Eric and Doreen Hart used $300,000 to pay off the current mortgage on their existing home, with the balance going towards purchase of Minerva Terrace.
Marlene and husband Brian used the remaining $370,000 to pay off a small debt, with again the balance used to buy Minerva Terrace.
The Harts subsequently came to live with Marlene’s family, renting out their own home.
The legal position was that all four were jointly liable to repay the $670,000 bank loan with joint ownership recorded on the title as the Harts holding a half share as tenants in common, Marlene and husband the other half share as tenants in common. The title did not reflect the differing economic contributions by each family.
Problems followed when Marlene’s parents died within six months of each other, in late 2016 and early 2017.
Three of Marlene’s siblings said their father’s estate was entitled to half the value of Minerva Terrace, to be divided amongst the six children as set out in their parents’ wills. A 2022 valuation valued Minerva Terrace at $1.5 million.
To force the issue, the executor of their late father’s estate applied to the High Court for a Property Law Act order that Minerva Terrace be sold. Justice Tahana gave Marlene and husband Brian first choice to buy out their parents’ share, before ordering a forced sale.
He ruled the financial evidence was that the Harts had contributed 34 per cent of the purchase price; Marlene and Brian 66 per cent. They could buy out the estate’s share for $419,250; allowing a credit for Marlene’s one sixth share of the estate.
The general rule is that ownership as recorded on the title is proof of ownership shares. This can be overturned by evidence to the contrary. In this case, there was evidence of Mr Hart telling his children during his lifetime that Marlene had ‘the documents’ proving she was entitled to a greater share.
re Estate Eric Leslie Hart – High Court (21.12.23)
24.044