Merriman v Plunkett [2019] NZFC 9983

Published 25 September 2020

Relationship property division — contracting-out agreement — increase in property value — mortgage payments — post-separation contributions — occupation rent — intermingling of separate property — compensation — Property (Relationships) Act 1976, ss 18 & 21 — M v H [2018] NZCA 525 — Vector Gas Ltd v Bay of Plenty Energy Ltd [2010] NZSC 5; [2010] 2 NZLR 444 — Taylor v Trask [2018] NZFC 6291. The parties had been in a relationship for just under four years and sought a determination concerning the division of relationship property and the proceeds of the sale of the former family home. The property was owned by the parties, having joint interest , and a family trust, having an interest as a tenant in common. The ownership interests in the property were recorded in an agreement between that parties and the trust, which set-out that the parties held 81.4% and the trust 18.6%. There was a valid s 21 relationship property agreement between the parties which recorded the that the applicant's initial contribution to the purchase of the property was separate property. Following the breakup of the relationship hand subsequent sale of the property the trust was paid their share of the proceeds of the sale. At issue was how the increase of the value of the separate property should be calculated, whether either of the parties should be compensated for mortgage payments; whether there was sole or joint liability for mortgage payments defaulted on by the respondent, whether there was any liability for occupation rent, and whether the respondent was liable for interest in regard to the applicant's separate property for delay in interim distribution. These issues required interpretation of relevant clauses of the s 21 agreement, taking into consideration evidence provided by the parties, and determination of entitlements not covered by the s 21 agreement. Having reviewed the s 21 agreement and based on the plain wording of the agreement in the absence of the agreement providing a method for calculating the increase in value, the value was calculated by taking the applicant's contribution to the property's purchase of 12.3 per cent of the purchase price plus 1.3% of the net increase of value. The court found the applicant was entitled to $149,135 from the proceeds of the sale. The Judge further determined that the parties were jointly liable for a mortgage default and the respondent was not required to pay occupational rent. The respondent was awarded $19,040 for deductions from a business bank account and contributions made towards reducing the parties' mortgage. The applicant's claim for interest in regard to the delay in interim distribution was declined. Judgment Date: 2 December 2019.