Family trust funds lost their status as separate property and became relationship property when used to buy a family home prior to separation where the family trust made a minimal cash contribution in return for a purchased half share.
Craig Porter was ordered to surrender as relationship property the half share of an Auckland Matakana property owned by his family trust after a four year relationship with Claire-Erica Mulock-Houwer came to an end in 2019.
The High Court was told Mr Porter set up a family trust to hold selected assets after an earlier relationship came to an end. This included a home at Waiuku where the two lived together as a couple.
Their subsequent purchase of a home at Matakana was funded by sale of Mr Porter’s family trust’s Waiuku property plus Ms Mulock-Houwer’s sale of other property she owned in Waiuku, together with mortgage finance of some $663,000.
Title to Matakana was registered as equal shares between Ms Mulock-Houwer and Mr Porter’s family trust.
In cash terms: Mr Porter’s family trust put in eight per cent of the Matakana purchase price; Ms Mulock-Houwer, just over twice that percentage.
Each were personally liable for mortgage repayments.
In economic terms, subsequent mortgage payments by both had the effect of enriching the asset base of Mr Porter’s family trust.
Justice Jagose upheld a Family Court ruling that Mr Porter’s family trust’s half share of Matakana was to be treated as relationship property.
Manner of Mr Porter’s family trust purchase had the effect of ‘defeating’ Ms Mulock-Houwers’ claim that the entire Matakana home was relationship property, he ruled.
Porter v. Mulock-Houwer – High Court (17.06.26)
26.183