Williamson v Soto [2019] NZFC 2907

Published 18 September 2019

Relationship property division — de facto relationship — growth in company — overdrawn bank account — amount of cash in safe — company salary tax — Property (Relationships) Act 1976, ss 1N, 2E, 9, 14A, 17, 18 & 20 — Rose v Rose [2009] NZSC 46 — Biggs v Biggs [2018] NZCA 546 — Clayton v Clayton [2013] NZHC 309; [2013] 3 NZLR 236 — Hebberd v Hebberd [1992] 3 NZLR 517 (CA) — French v French [1988] 1 NZLR 62 (CA) — McIlraith v McIlraith [2015] NZHC 2758 — Hight v Hight [1997] 3 NZLR 396 (CA) — Hyde v Hyde [2011] NZFLR 35 (HC) — V v V [2007] NZFLR 350 (FC) — Nation v Nation [2005] 3 NZLR 46 (CA) — Ormsby v Ormsby van Selm [2012] NZFC 9016. The parties had been in a short de facto relationship (less than three years) after meeting when the respondent was hired by the applicant's company. They had several relationship property issues to resolve, these being: (a) Whether the respondent should share in the growth in the applicant's company and savings from company earnings? (b) How an overdrawn current account debt should be treated – should the respondent pay a share of this and if so, how much? (c) How much cash was in the home safe at separation? (d) How tax on the applicant's company salary should be treated? (e) Whether any adjustments should be made for payments made on the applicant's house and its property or the respondent's house and its property? Both parties provided evidence, as did relatives of the applicant's and accountants hired by the company and the respondent. Although under s 9 of the Property (Relationships) Act ("PRA") the starting point is that growth in the applicant's shares during the relationship and his savings from company earnings were separate property, s 9A(2) provides an exception. The respondent had to show a contribution made by her to the separate property shares (rather than just to the relationship). She claimed she had put in extra work at the company, but the Judge saw no evidence she had done anything than her required duties as an employee. Although she could not meet the threshold of s 9A(2), she did meet the threshold for s 17, which required that her efforts had preserved the company in the sense of ensuring its continuing existence or value. It was found that she contributed to keeping the company afloat during the difficult periods before and after the Christchurch earthquake. She was awarded a 10 per cent share of both the increase in the company shares and the savings. Based on the evidence of the company's accountant, the overdrawn account debt was valued at $192,964 and was a relationship debt to be shared equally. The respondent submitted that there was around $50,000 cash in the home safe, but could provide no evidence to support this claim. The Judge preferred the evidence of the applicant that the cash in the home safe was valued at $2,000. It was to be shared equally. Tax on the applicant’s salary was valued at $24,740 and was a relationship debt. As the income had been enjoyed as relationship property during the relationship, the debt was also considered relationship property. It was to be shared equally. Finally, adjustment of $28,500 was to be made to the respondent under the PRA, s 20E in respect of the payments she made on the parties' two properties. As each party had been partially successful the Judge recommended that costs lie where they fall, however leave was reserved for either party to file memoranda as to costs within 14 days. Judgment Date: 15 May 2019.