Often when a relationship breaks down one of the priorities is the sale of the jointly owned property. In some cases where there is no agreement for sale one party may decide to take the step of applying to the Courts for an order that the property is sold.

However, before taking that step it is important to understand whether you should be applying to the Family Court or the High Court.

 

Orders for sale in the Family Court

Pursuant to sections 25 and 33 of the Property (Relationships) Act 1976 the Family Court can make an interim and final orders for sale of any relationship property and can give any directions with respect to the sale proceeds.

For the Family Court to make an order for sale the property must be relationship property, as defined in section 8 of the Act. This includes the family home, regardless of whether it is owned by one or both of the parties, and any other property jointly owned.

 

Orders for sale in the High Court

Under section 339 of the Property Law Act 2007 the Court can make orders in respect of property owned by co-owners. This includes an order for sale and the division of sale proceeds between the co-owners.

The Court can only make an order under section 339 of the Property Law Act 2007 after it has considered a number of relevant factors listed in section 342 of the Act. This includes:

  • the extent of the share in the property of any co-owner by whom, or in respect of whose estate or interest, the application for the order is made.
  • the nature and location of the property.
  • the number of other co-owners and the extent of their shares.
  • the hardship that would be caused to the applicant by the refusal of the order, in comparison with the hardship that would be caused to any other person by the making of the order.
  • the value of any contribution made by any co-owner to the cost of improvements to, or the maintenance of, the property.
  • any other matters the court considers relevant.

 

Te Hei v Bradford [2019] NZHC 371

This recent case is an example of why it is important to consider which Court has jurisdiction.

Te Hei and Bradford had begun cohabiting in May 2015 and separated in July 2017. In December 2016 they had bought a property with Bradford making a greater contribution to the purchase and ongoing payments for the property. They owned the property as joint tenants.

Te Hei applied to the High Court for an order under section 339 of the Property Law Act 2007 for an order for sale and equal division of the sale proceeds. She sought summary judgment for her application.

Bradford defended the application on the basis that although the relationship was one of short duration (being a de facto relationship lasting less than 3 years) and therefore outside the scope of the Property (Relationships) Act 1976, he was entitled to apply under the Act because of section 14A(2). He subsequently made an application in the Family Court.

Section 14A(2) says provides exceptions for when the Property (Relationships) Act 1976 can apply to de facto relationships of short duration being where there is a child of the de facto relationship or where an applicant has made substantial contribution to the relationship. The Court must be satisfied the failure to make an order under the Act would result in serious injustice.

The issue for Te Hei was that by virtue of section 22 of the Property (Relationships) Act 1976 the Family Court has exclusive jurisdiction for all applications under the Act. This meant that Bradford’s application in the Family Court took priority with the High Court acknowledging that it would be a waste of the parties’ time and resources for the litigation in the High Court to continue.

 

Conclusion

The Court concluded that if the Family Court determined that the circumstances warranted the application of the Property (Relationships) Act 1976 then matters could and should be resolved by the Family Court. If the Family Court decided otherwise then the High Court application could be used as a vehicle for resolving the division of the property.