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Higgins v Higgins [2019] NZFC 3703

Published 18 September 2020

Order for sale of family home — interim distribution — relationship property division — joinder of trustees as parties — jurisdiction — trust powers — Property (Relationships) Act 1976, ss 1, 2, 25, 33, 44 — Clayton v Clayton [2016] NZSC 29 — C v C (No 2) [2006] NZFLR 908 — McGill v Crozier [2001] NZFLR 870 — McGill v Crozier (2001) 21 FRNZ 157 — Gough v Gough [1992] NZFLR 396. The applicant sought the sale of the parties' family home, which he was occupying after being granted protection and occupation orders. There was some difficulty as the home was owned by a trust; the respondent submitted that the Court had no jurisdiction to order its sale. It was noted that the court's powers to deal with property in a trust are limited and that the Family Court does not have the power to direct the sale of capital owned by a trust. However, under s 33(3)(m) a court may vary the terms of a trust in order to give effect to orders made under ss 25-32. After analysis of the relevant clauses of the trust deed, the court found that the rights each party held in respect of the family trust were relationship property; the parties had an equal share of the debt which the trust owed to them. The court made directions varying the terms of the family trust to enable the applicant to sell the family home. It was noted that the applicant was an older person who could not afford the mortgage payments after the respondent had arbitrarily stopped her payments, and that he needed to purchase a new home for himself and his daughter, sooner rather than later. Taking this into consideration, in order to achieve a just result, preserve the parties' equal rights to the property and preserve property values, the court exercised their discretion to make an interim order for distribution of the relationship property to the applicant. Proceeds of the sale were to be held on trust by a law firm, who could make an interim distribution to facilitate the applicant purchasing a home, the quantum of which to be determined after the sale of the home. Judgment Date: 20 May 2019. * * * Note: names have been changed to comply with legal requirements. * * *