Having half share of the family home held by a family trust which had bought that half share with its own resources meant it was excluded as relationship property.
After a three year de facto relationship between Whitianga couple Renee Brown-Douglas and Avon Hansford ended in 2014 a detailed dispute followed over what were relationship assets, how they should be divided, and whether the Property (Relationships) Act even applied.
Both had been in previous relationships.
In 2021, the Family Court ruled that the Act applied. The couple had been in a de facto relationship for nearly three and a half years. Relationship property was to be divided as if married.
Their family home had been a property at Carina Way, in Whitianga.
It had been owned previously by Mr Hansford with his former spouse. When a final wash-up of that relationship was concluded in 2012, ownership of Carina Way was reorganised: Mr Hansford owning a half share; the other half held by Ms Brown-Douglas’ family trust, the Albatross Trust.
Mr Hansford is not a beneficiary of Ms Brown-Douglas’ Albatross Trust.
In dispute was how to divide the $327,500 net proceeds from sale of Carina Way, a sale made four years after their relationship ended.
Mr Hansford’s half share of Carina Way was relationship property.
The Family Court ruled Mr Hansford was entitled to a half share of the Albatross Trust’s share of Carina Way. By holding her share in the name of a family trust, Ms Brown-Douglas was making a ‘disposition’ that had the effect of defeating Mr Hansford’s relationship property claim to her half share, the trial judge ruled.
This was not correct, ruled the High Court on appeal.
Albatross Trust purchased the half share owned previously by Mr Hansford’s former spouse using its own assets, not relationship property assets, Justice Andrew said. Albatross Trust’s half share of Carina Way was never relationship property.
Net proceeds from sale of Carina Way are to be divided half to Albatross Trust and one quarter each to Mr Hansford and Ms Brown-Douglas, he ruled.
Also in dispute was the status of Mr Hansford’s $325,000 charter yacht: Windborne.
It is not relationship property, Justice Andrew ruled.
Before, during and after his relationship with Ms Brown-Douglas, Mr Hansford used the yacht for his charter business. It remained Mr Hansford’s separate property. It had never been used wholly or principally for family. It was not a family chattel.
Mr Hansford had previously agreed that Ms Brown-Douglas could assume full ownership of their business Blackbeard Smokehouse as compensation for help she had provided in sustaining his charter business.
Brown-Douglas v. Hansford – High Court (14.06.24)
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