A nearly finalised Auckland property development is to be valued on an ‘as is’ basis, not an ‘as completed’ basis, the High Court ruled in a relationship property dispute.
This saw relationship property assets reduced by $700,000 on appeal from a Family Court ruling in a drawn-out property dispute between Simon O’Connor and Katarzyna Gnap following their decade long relationship.
One of their arguments centred on valuation of a property development in Birkdale on Auckland’s North Shore.
The court was first required to untangle terms of funding for the Birkdale project provided by Mr O’Connor’s fellow investor Gerhard Simanke plus further funding from a family estate for other property purchases.
It was only after Mr O’Connor and Ms Gnap separated that these informal funding lines were recorded in writing, leading to allegations that evidence was being cooked up to buttress Mr O’Connor’s claims this funding was a relationship debt; created to reduce Ms Gnap’s relationship property payout, it was alleged.
The funding was ruled a relationship debt.
The property development in dispute involved Mr O’Connor’s newly-formed company 258 Birkdale Road Ltd purchasing from Mr Simanke a house and land with intention of subdividing the land into three lots and construction of two further houses.
Shares in 258 Birkdale were agreed to be relationship property.
Value of these company shares equated to the value of the underlying assets: the land and buildings.
The Family Court accepted at date their relationship property dispute came to a hearing that the project was worth $3.04 million, on the basis the project was complete.
The High Court ruled it was wrong to value the project as if it were complete. It wasn’t. There were still costs to come: payment of a development levy; final survey costs; obtaining code compliance certificates; and getting new titles issued.
These are all costs a potential buyer would take into account if sold, Justice O’Gorman ruled.
The Birkdale project was valued ‘as is’ at a reduced figure of $2.39 million.
O’Connor v. Gnap – High Court (10.06.26)
26.174