As we come to the end of the holiday season a lot of relationships may have resulted in break-ups, and the Law Commission is pushing for changes to make sure things are even-handed for both parties following a split.
Hidden Figures: Marriage, Civil Union and Divorce rates. Photo: 123RF
In November last year, the Commission announced eight proposals to improve the Property Relationship Act, which has not changed in 43 years.
Submissions on the Commission's proposals also closed just before Christmas.
To look at what the law provides for, and what changes might be made, Auckland family lawyer Jeremy Sutton and the law commissioner leading the review of the Act, Helen McQueen speak to Nine to Noon’s Kathryn Ryan.
Sutton says it is a busy time for lawyers right now as the holiday season usually results in a lot of break-ups.
Under existing law, after three years living together as a couple property is split 50-50. However, McQueen says that is not always fair.
“What we’ve done is set out a package of reforms … which are designed to achieve a law that meets most New Zealanders’ expectations of fairness when a relationship ends on separation,” she says of the Commission’s proposals.
McQueen says one of the key changes they’re proposing is that the family home should no longer be shared 50-50, and what would be shared if one partner brings the family home to the relationship would be only the increase in value during the relationship.
“We’re suggesting moving away from this automatic sharing … we think that is a better balance.”
Secondly, McQueen says they have suggested that the courts should have greater powers to share trust property, where a trust holds property that was produced, preserved or enhanced by the relationship.
She also suggests that there needs to be a better approach to sharing the economic advantages and disadvantages that can occur at the end of a relationship.
For example, couples make equal but different contributions to their family-joint venture and they do that in the expectation that they’ll continue to share in the fruits of that joint venture, but that falls away and that expectation is not met if the couple separates, she says.
She says economically the disadvantaged partner suffers a double loss.
On the family home, Sutton says he agrees with McQueen that the existing law is not always fair. He says he sees a lot of cases where that pre-separation property is shared 50-50.
“I believe most clients and most New Zealanders would feel that that’s just not right, it should only be the time that the parties are living together that they share.”
He says it’s important that the law is changed.
He also says most people who go into someone else’s home wouldn’t ordinarily expect that that home would be shared 50-50, that’s just what the law is.
On whether one should be buying in fairly from the start, he says if everything is agreed on fairly that would save disagreement later on.
However, as much as he would like people to make their own choices without laws that is not always the case and the laws are needed to outline what is fair.
Another thing that needs to be looked at is contribution protection, says Sutton.
People can’t buy houses these days and so it falls to family members and there’s huge issues going through the courts at the moment about whether the money is a gift or a loan, he says.
“We’re not that good as a country or as people in terms of documenting what our intentions are going to be.”
He also says a University of Otago study showed that prenuptial agreements are only done 6 or 7 percent of the time.
He would welcome the idea of trusts being created during relationships because if it goes to court later on it’s usually the disadvantaged person who is affected as they can’t keep continuing to pay costs for court proceedings.
McQueen says the current proposal includes giving courts greater discretion to call things, which she thinks will help.
But Sutton says he would prefer to see mediation resolve the matters first as court takes too long. “I don’t believe at the moment the courts are working well enough in relationship property.”
There needs to be more resources given, he says.
Both Sutton and McQueen agree that Section 15 of the Relationship Property Act is not working well.
Section 15 provides the court with the power to order compensation from relationship property.
McQueen says the Commission has suggested putting in time periods around Section 15. So where a couple has a child together, has been together ten years or more, or if one partner has reduced employment to support the family then they will automatically be eligible to share the difference in their incomes after separation for up to five years.
Sutton says some change needs to occur and that up to five years seems like a long time.
But McQueen says that what they’re trying to address is when one partner leaves the relationship in a grossly worse off position than the other partner.
She gives the example of when a woman might stay home but work part time, so she can care for children, and her partner is working full time with his career taking off. Financially he is in a better position, and Section 15 doesn’t address that, she says.
McQueen says the thinking is five years allows one to train, re-start their career or get back on their feet.
As well as Section 15, Sutton also says the system needs to look at dispute resolution, getting people out of the court system earlier, so that children are less likely to be affected.
“The way matters are resolved is a major big deal,” he says.
McQueen proposes that people understand the law better. She wants different options to be available when resolving a dispute, including access to community organisations who can provide individual support.
She says the Commission is intending to provide their final report to the Minister Responsible for the Law Commission, Andrew Little, in June with a final recommendation.
