What happens when you enter a second marriage with significant assets or an existing family home? Should your new partner be entitled to a stake in these if your relationship later ends?
Those questions and more will be on the table next week when legal experts from across the country discuss how to reform New Zealand's Property (Relationships) Act, which has been deemed unfit for purpose in the 21st century by the Law Commission.
University of Otago – Ōtākou Whakaihu Waka Law researchers will lead the Property (Relationships) Act 1976: Fifty Years On National Conference at Parliament, with funding from the Michael and Suzanne Borrin Foundation.
Professor Margaret Briggs
Director of Otago's Children's Issues Centre Professor Nicola Taylor and fellow Otago family law experts Professor Nicola Peart and Professor Margaret Briggs are directing the initiative, which will involve presentations from some of the country's sharpest legal practitioners, including judges from all the courts.
The Otago researchers are collaborating with their colleagues Professor Bill Atkin from Te Herenga Waka – Victoria University of Wellington, and Professor Mark Henaghan from Waipapa Taumata Rau – University of Auckland.
Professor Peart says when the Matrimonial Property Act was introduced in 1976 it brought a "radical change" by shifting the legal focus to contributions to the relationship rather than to property.
"Its premise was that marriage is a partnership to which each spouse is presumed to contribute equally, but in different ways."
Each partner shares equally in their matrimonial property, which applies on separation, unless certain exceptions apply or the spouses contract out of the Act.
The Act has worked well in many respects, particularly for couples whose first relationship has ended and who built up their assets during the relationship, she says.
"Former partners start from an entitlement to an equal share of their relationship property. That means they will generally share the family home and family chattels equally and any other assets they have accumulated through their joint efforts."
However, the Act does not work well for second relationships or for couples who come into the relationship with significant assets, she says.
"The family home is classified as relationship property, even if it was owned and fully paid for by one of the partners before the relationship began, which is now seen as unfair.
"One of the partners has not contributed to its acquisition and should not be entitled to a half share on separation.
"The partners can contract out of the Act, but that requires independent legal advice and the non-owning partner is likely to be advised not to sign a contract that excludes an entitlement to a half share of the home or other relationship property."
The Act was amended in 2001 to include de facto partners who had lived together for three or more years, and it was also extended to relationships ending on death. It was then amended in 2005 to include civil unions.
But it has not kept up with a changing society, Professor Taylor says.
"The law took effect fifty years ago when the norm was a relationship involving marriage between a man and a woman in which they raised their children, and their assets were accumulated together over time."
While amendments reflected the shift away from marriage and the greater recognition of a more diverse range of intimate adult relationships in 21st century family law, including same-sex relationships, New Zealand has undergone a period of significant social change since the law was first enacted.
Fewer people are marrying and more people are living in de facto relationships, Professor Taylor adds.
"More relationships end in separation, and re-partnering is more common. New Zealand is also more ethnically diverse and our population is aging.
"These demographic and social trends are intensifying, so it is vitally important that the law continues to keep pace with people's patterns of partnering, family formation, values and attitudes as to what is fair when property is divided at the end of a relationship."
The Law Commission's review of the Act from 2016-2019 concluded that it was no longer fit for purpose and its 2019 report recommended repeal of the Act and the adoption of a new statute, which would apply only on separation. Property entitlements on death were considered in a separate review of succession law.
So far, the Government has not acted on the Law Commission's 140 recommendations, but it is a big job, Professor Peart says.
"In the current climate of uncertainty and the state of the economy, there appears to be little political will to act on the Law Commission's recommendations.
"We hope that by holding this conference in the Beehive that Parliament will be persuaded to take action. Separation and death affect people every day."
The Honourable David Goddard KC, Chairperson, Grants and Scholarships Committee at the Michael and Suzanne Borrin Foundation, says the Foundation is pleased to support the conference.
"It provides an opportunity to reflect on the Property (Relationships) Act 50 years after its enactment and to discuss its future.
"Our vision is an Aotearoa New Zealand where everyone knows and understands the role and value of the law, and everyone enjoys the protection and opportunity it provides.
"By bringing together researchers, practitioners, and policymakers, this conference will help advance understanding and evidence-based reform of a law that has profound consequences for separating couples, families and children."
