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Chadda v Devadhikar [2020] NZFC 5873

Published 16 February 2021

Relationship property dispute — relationship debt — whether loan or gift — gift inter vivos — intention of transferrer — Property (Relationships) Act 1976 — Knight v Bliss [1954] NZLR 55 (SC) — Chang v Lee [2017] NZHC 1382 — N v N [2010] NZFLR 161 (HC) — Warren v Gurney [1944] 2 All ER 472 (CA) — M v B [2006] 3 NZLR 660 (CA). This was an application for the division of the parties' relationship property. The parties had been married for just over three years before separating, and had one child together. At issue was whether the $121,325.09 advanced to them by the applicant's parents to buy the parties' family home was a loan or a gift. If the money was found to be a loan, then it would constitute a relationship debt. The applicant also sought to broaden the scope of the hearing to include chattel and vehicle valuation and the exception to equal sharing and economic disparity. The applicant argued that it was a loan, as the amount constituted her parents' entire savings, and given that they were elderly (and were to be cared for by the applicant and the respondent) and had two other children to whom they had obligations, it could not have been construed as a gift. Further, there was a deed which had been drawn up. There were issues surrounding who had signed the deed and whether it had been witnessed correctly. The respondent argued that the money was a gift. There is a long-standing presumption that transfer of money from a parent to a child is intended to be a gift or transfer of property, but this is rebuttable by evidence that it was not intended to be a gift. Given the context and family circumstances surrounding the advance of money, the Judge found that the money was in fact a loan from the applicant's parents. As it had been found to be a loan, the applications for economic disparity and exceptions to equal sharing did not need to be considered. The Judge determined that the valuation of both vehicles remained the same. Counsel for the applicant had provided the Court with draft orders on the basis that the money was a loan; counsel for the respondent had not provided any draft orders. Having found that the money advance was a loan, the Judge made orders based on the draft provided by the applicant, with some amendments. Judgment Date: 15 November 2020. * * * Note: names have been changed to comply with legal requirements. * * *