COULTER V FONG HC WN CIV-2003-485-2052

COULTER V FONG HC WN CIV-2003-485-2052 13 December 2005IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY CIV-2003-485-2052IN THE MATTER OF an application under the Property Law Act 1952 BETWEEN DEANNE MYRA COULTER Plaintiff AND NEIL STEWART FONG Defendant Judgment: 13 December 2005 In accordance with r540(4) I direct the Registrar to endorse this judgment with a delivery time of 11.30am on the 13th day of December 2005.JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL[1] In a Minute I issued in this matter on 14 October 2005 I provided a final opportunity to both the defendant and the plaintiff, to put before the Court any material for my consideration with regard to the division of sale proceeds in this matter. [2] Since that Minute, the defendant through his new counsel has filed an affidavit dated 7 November 2005, and submissions from his counsel dated 28 November 2005. In turn, the plaintiff has filed a reply affidavit dated 11 November 2005 and her counsel has filed submissions dated 25 November 2005. [3] I have now had an opportunity to consider these additional affidavits (together with the earlier affidavit of the plaintiff dated 4 October 2005) and the submissions filed.[4] I now give my decision with respect to final division of the property sale proceeds between the plaintiff and the defendant. [5] The starting point in this consideration must be the Order of this Court made on 14 July 2004, as varied in a Minute I issued in this matter on 16 May 2005. [6] At paragraph 3 of the 14 July 2004 Order:The equity (from the property sale) will be divided equally between the parties subject to the below provisions.[7] The equity defined in the Order referred to the value or final sale price of the property, less the figure owed under the mortgage to the Westpac Banking Corporation as at 1 January 2002 and less usual sale costs. [8] It is not contested between the parties that before the net sale proceeds are divided, the defendant Mr Fong is to receive $3,516.69, being reimbursement of principal repayments made by him on the parties' Westpac mortgage subsequent to separation. [9] Taking this into account, it is accepted that the net sale proceeds, the bulk of which is currently held on interest-bearing deposit by Mr Tait, the solicitor for the parties, is $126,043.33. [10] The plaintiff's position is that the starting point is that any equal division of this sum must be subject to necessary adjustments which have been caused by what she describes as "Mr Fong's refusal to co-operate with the sale process" and his obstructiveness and failure to assist implementation of the Court's consent orders in any way. [11] As to this, the plaintiff states that costs were unnecessarily incurred as a result of the defendant's consistent and repeated failures to: a) Vacate the property b) Keep rates payments up to datec) Remove rubbish from the property d) Ensure the property was secured in a proper manner [12] These additional costs, according to the plaintiff, are: a) Unpaid Porirua City Council rates and penalties incurred during the period of the defendant's occupation of the property - $1,298.92 b) Rubbish removal costs - $286.63 c) Security services (security guards were required according to the plaintiff to keep the house secure prior to settlement) - $1,890.00 d) Locksmith charges for changing locks - $290.67 e) Additional costs of Mr Tait, the solicitor acting with respect to the sale for additional attendances incurred solely as a result of the defendant's actions and lack of co-operation - $3,224.88. [13] In addition, the plaintiff states that the defendant has failed to pay his half share of the costs of obtaining the Telfer Young valuation as required in the consent order. This one half share totals $270.01, is clearly payable by the defendant, but remains unpaid. [14] His liability for many of these amounts is disputed by Mr Fong. His counsel in a written submission dated 28 November 2005 states at paragraph 5:5. The defendant's actions subsequent to the making of the consent orders were trying. However it is submitted that Ms Coulter's actions in obtaining a writ of possession and having Mr Fong removed from the property by police and security guards, with attendant costs, were, with respect, somewhat disproportionate.(emphasis added) [15] But, having reviewed all the material before the Court, I am satisfied that the defendant here clearly did not comply with a number of aspects of the Order made inthis Court on 14 July 2004. Significantly, this was an order consented to by both parties including the defendant. [16] In particular, that order stated at paragraphs (8) and (12):(8) Mr Fong shall co-operate with the sale process. And (12) The parties will endeavour to assist with the implementation of these orders as far as practicable.[17] Having considered all the material before the Court, I accept the contentions made by counsel for the plaintiff that the defendant failed to co-operate with the sale process in many significant respects. He should therefore bear sole responsibility for the costs noted at paragraphs [12] and [13] above, costs which have resulted directly from his breach of the Court orders noted in paragraph [16] above. [18] Deducted from the defendant's one half share of the sale proceeds therefore should be those amounts, which come to a total of $7,261.11. [19] In addition, the plaintiff seeks a further contribution from the defendant for what she describes as additional attendances required by the solicitors acting on her behalf in this matter as a result of the defendant's repeated obstruction and breaches of the Court's orders. As I understand it, the plaintiff's solicitors' costs in this matter since the Settlement Conference on 14 July 2004 under the legal aid scheme totalled $4,419.41. [20] For the same reasons as those noted in paragraph [17] above, I am satisfied that under the circumstances here, the defendant should meet these costs which, but for his actions, would otherwise have been unnecessary, from his one-half share of the sale proceeds. [21] The defendant in his affidavit dated 7 November 2005, and in submissions dated 28 November 2005 made by his counsel, seeks an amount by way of reimbursement for what he describes as actual costs incurred by him in readying the property for sale and increasing its value. He says that he arranged to have theproperty repainted in September 2004 prior to receipt of advice from the plaintiff in mid October 2004 that she would not consent to funding renovations. Further, the defendant states that he completed the concrete car pad on the property. He says he is not seeking payment for labour costs of work on this car pad, but he does, however, seek to recover his actual expenditure for materials for that project. [22] The defendant submits that the work he carried out on the property in having it repainted, and in completing the car pad, were not renovations, but rather were improvements recommended by a real estate agent which clearly enhanced the valuation of the property and thus maximised its final sale price. He submits that his expenditure on the property contributed to it realising an increased sale price, a price some $22,000.00 higher than the market valuation obtained, and that it is therefore appropriate he be reimbursed for that expenditure. [23] In response, the plaintiff contends that the defendant was on notice from October 2004 that he would not be reimbursed for any work he did on the property, and that if indeed he did work subsequent to that time, he did so as a volunteer and cannot claim compensation for it. [24] Further, the plaintiff notes that there was no provision made in the earlier consent order for any further work to be done to the property. [25] The plaintiff also takes issue with certain invoices provided by the defendant, and, as I understand it, goes so far as to suggest that some of the invoices provided may indeed be "false" or at least "questionable". [26] That said, there does not appear to be any dispute that the defendant did carry out certain work at least to finish the concrete car pad. The claimed repainting is somewhat less clear. There is, as I see it, a reasonable inference that the work carried out is likely, to some extent, to have enhanced the desirability of the property on a resale basis. [27] That said, in my view, the defendant should be entitled to some reimbursement for this. The plaintiff seems to accept that $461.70 worth of concreteand $36 worth of building mix was acquired and delivered to the property. The position concerning painting of the house, however, and whether indeed this may have been done, is entirely unclear. And the fact that the defendant may have been on notice from October 2004 that he would not be reimbursed for any work he did on the property is also a complicating factor. [28] I accept, however, that the defendant should be reimbursed for work carried out to improve the property, even if this may be only on an ex gratia basis. A sum of $1,000.00 (representing $500.00 for materials cost and $500.00 towards labour) is, in my view, an appropriate figure. [29] The final calculations for division of the sale proceeds are therefore as follows (taking into account total net sale proceeds noted in paragraph [9] hereof of $126,043.33, less $1,000.00 reimbursement to the defendant for work noted in paragraph [28] above):A) Total Funds payable to the Plaintiff(i) Plaintiff's one half share of net sale proceeds $62,521.67 (plus interest) (ii) Plus reimbursement of costs sought $4,419.41 _________ Total $66,941.08========B) Total Funds payable to the Defendant(i) Half share of sale proceeds $62,521.66 (plus interest)(ii) Plus agreed compensation for reduction in mortgage principal $3,516.69 (iii) Plus reimbursement work on Property $1,000.00 _________ $67,038.35 Less half share of valuation fee $270.01 Less Porirua City Council Rates and penalties $1,298.92Less rubbish removal costs $286.60 Less security costs $1,890.00 Less Locksmith's costs $290.67 Less Mr Tait's additional solicitor attendances $3,224.88 Less contribution to plaintiff's costs $4,419.41 _________ $11,680.49 _________ Total $55,357.86======== [30] From these final calculations, therefore, the plaintiff is to receive from the retained sale proceeds the sum of $66,941.08, plus interest. The defendant is to receive from the retained sale proceeds the sum of $55,357.86, plus interest. Orders to this effect is now made. [31] A further direction is made to the effect that from the house sale proceeds held by Mr Tait, the following payments are to be made (if they have not already been paid): Telfer Young - Mr Fong's half share of valuation fee $270.01 [32] Leave is reserved for either party on three days notice to approach the Court further if any clarification of the calculations relating to these orders may be required. ________________________________Associate Judge D.I. GendallSolicitors:Catriona Doyle & Rohan Cochrane Law Office, Porirua for Plaintiff Fitzherbert Rowe, Palmerston North for Defendant