A husband’s financially catastrophic purchase of a second home post-separation adversely affected his estranged spouse’s relationship property payout with her having to share the mortgage expense. In turn, he complained she had not maximised her earning potential by failing to progress a medical career.
All names were anonymised by the Family Court.
Evidence was given that the two married in 2006, separating fourteen years later.
He works in IT.
She trained as a doctor, working initially fulltime at several District Health Boards. She turned down the opportunity for specialist training; a sensitivity to blood causing her to faint.
After taking on locum work, she later retired from the medical profession to raise their four children. By time of the Family Court hearing in 2025, the children’s ages ranged from sixteen to nine.
The biggest relationship property issue in dispute at the Family Court was the status of two properties.
The family home occupied by the wife post-separation was valued at between $2.6 million and $2.8 million. She has primary responsibility for the children.
The second property, occupied by the husband, was purchased post-separation; funded in part by an inheritance from his father, the balance with $1.2 million mortgage finance.
This purchase was, in part, designed to provide a stable environment for shared custody of their children.
The court was told it has been a catastrophic investment. To date of the court hearing, its value had dropped some $700,000 to around $1.15 million. Mortgage interest was running at nine thousand dollars per month, paid solely by the husband.
The loan used to buy this second property was secured against both homes. The wife said she had been dead against the purchase; her spouse should have rented, she said.
Both agreed the primary family home had to be sold; to clear the mortgage.
No agreement could be reached on who would assume full ownership of the second property, and at what price. In a falling market, there was no certainty as to current prices.
To break the deadlock, Judge Muir imposed a ‘Russian Roulette’ auction.
The husband was given two weeks to make a written offer as to the price he is willing to acquire the property he currently occupies.
She was given two weeks to then decide whether she accepted a sale at that price, or instead, was willing to take ownership, buying at the offered price.
Russian Roulette ensures a fair price is put forward, given that the person setting the offer price may end up as either buyer or seller.
The flaw is that Russian Roulette assumes each side has sufficient financial resources to complete a purchase at the offer price.
As part of the relationship property wash-up, Judge Muir ruled the wife was liable to compensate her husband for half the mortgage costs he had been paying, continuing until the mortgage was cleared with sale of their primary family home.
As at date of the court hearing, her accrued half share of mortgage interest paid was $117,000.
In turn, the husband was ordered to pay her $478,000: half the value of his Kiwisaver account ($130,000) and a section 15 adjustment ($348,000).
Section 15 of the Property (Relationship) Act allows adjustments for disparity in income-earning potential when spouse has sacrificed career prospects to care for children.
Courts refuse to analyse the reasons behind couples’ allocation of domestic and childcare duties, looking instead at how these duties were allocated.
Section 15 compensation is then awarded to the spouse sacrificing career for family; what an economist would recognise as compensation for the opportunity cost of giving up career advancement.
This compensation is a capital sum intended to recognise the lesser income now available post-separation. In court, what commonly follows is arguments about potential post-separation job prospects.
The husband said his spouse could easily return to a well-paying medical job.
Judge Muir said that is not plausible.
Her medical registration has lapsed. Re-registration requires full-time supervised work; an activity not possible with her current childcare responsibilities.
The court was told she currently works part-time on an informal temporary contract as an administrator. Name of her employer was suppressed in the publicly issued court judgment.
Justice Muir ordered payment of $348,000 section 15 compensation.
The all-up effect of these Family Court calculations is to have the husband receive about 40 per cent of their net assets by value; his spouse receiving some sixty per cent.
‘Houser v. Houser’ – Family Court (20.08.25)
25.184