Shane Hannah stepped in to assist brother Jason refinancing his Rotorua home with the High Court ruling that over a decade later the two were party to a scheme designed to cheat Jason’s estranged de facto partner out of her share of the home.
Justice O’Gorman ruled Kerri-Anne Halliday was entitled to half the equity in the Morey Street property, a home she and their two daughters had left over ten years previously.
Jason and Kerri-Anne first met in about 1999.
At the birth of their first daughter, they were living with Kerri-Anne’s mother and stepfather, later moving into the Morey Street property owned by her stepfather, paying rent.
Borrowing to buy proved difficult. A fixed term loan from second-tier lender Liberty Finance was the best offer they had. Her stepfather left in money as vendor finance. By March 2007 the two were joint owners of Morey Street.
The High Court was told of a tempestuous relationship between the two, escalating over the next three years. Kerri-Anne moved out, later reconciling.
Against this background, the Liberty Finance loan fell due. Household income was again insufficient to interest any first-tier lender. Jason’s brother Shane came to the rescue, lending his creditworthiness to a loan application.
Evidence was given that a loan was secured from BNZ, with ownership of Morey Street restructured: Jason and brother Shane were listed as joint owners, with Shane signing a deed acknowledging he held his half share on trust for Kerri-Anne. He did not contribute to mortgage payments, but was liable if payments were not kept current.
Eighteen months later, Jason and Kerri-Anne separated permanently. Jason stayed at Morey Street, paying all outgoings including mortgage payments.
Each contacted separate lawyers to finalise relationship property claims. Nothing was agreed.
A decade later, Kerri-Anne learnt that Jason now had full ownership of Morey Street, with brother Shane having transferred the half share registered in his name to Jason. She sued.
Evidence was given that Shane had told lawyers that he held the half share in trust, but said it was in trust for his brother. This was dishonest, Justice O’Gorman ruled. Shane knew this was untrue, she said. The deed signed years previously was clear; the half share was held in trust for Kerri-Anne. Transferring this half share to brother Jason was in breach of trust.
Jason argued that Kerri-Anne had abandoned any interest in the property. She had not contributed financially. Jason said when he asked her post-separation what contributions she was going to make towards the house she replied: ‘Get fucked, your house, your problem.’
Kerri-Anne denied ever saying that.
Justice O’Gorman said that even if any such statement was made it was more an indication of frustration in that she had now had to use her own cash to support herself and their daughters.
Justice O’Gorman ruled Kerri-Anne is to be treated as co-owner of Morey Street, with the property to be sold.
Jason is entitled to a credit for his money spent on outgoings and upkeep of Morey Street, less a notional rent for the years he had sole occupation. On the court’s calculation this results in a net figure of $9700 in Jason’s favour.
Halliday v. Hannah – High Court (1.07.24)
24.166