My ex-wife is claiming economic disparity and wants a $150k payout - The Ex-Files with Jeremy Sutton

Someone who has taken time out of work to raise children could claim compensation for economic disparity upon separation. Photo / 123rf

As we say goodbye to 2024 and welcome in 2025, it’s a good time to catch up on the very best of some of the Herald columnists we enjoyed reading over the last 12 months. From politics to business, these are some of the voices and views our audience loved the most. Today it’s five of the top columns from The Ex-Files with Jeremy Sutton.

My ex-wife is claiming economic disparity and wants a $150k payout - March 17, 2024

Family Court judges have the discretion to award one party compensation where there is a disparity between the separating parties’ income and living standards at the end of a relationship. Photo / 123rf

Q: My wife and I separated last year after a marriage of 10 years. We are negotiating the division of relationship property through our respective lawyers. Yesterday, my ex-wife’s lawyer sent through a settlement proposal. In the proposal, in addition to half our assets, she asks for a lump sum payment of $150,000 as “compensation for economic disparity”. The letter points out she is working part-time as a secretary earning $70,000 per annum and her career progression has been constrained by childcare commitments, and if she had continued to progress her career, it would not be unreasonable to assume but for the division of functions during the relationship with me that she would now be earning approximately $120,000 per annum. What is economic disparity, and how do you suggest I respond? By way of further background, I am working in the IT industry earning about $150,000 per annum. Also, I believe my ex-wife could work fulltime and put the children (aged 7 and 9) in after-school care, but she chooses not to. Is this relevant?

A: Relationship property is generally divided equally in New Zealand. Despite this, Family Court judges have the discretion to award one party compensation where there is a disparity between the separating parties’ income and living standards at the end of a relationship.

The intention behind economic disparity awards is to recognise that during the relationship, the partners may have arranged their affairs so that one partner had a greater focus on home-making and raising children, enabling the other to focus on their career. The consequence is that at the time of separation, the parties are not on an even footing. A “typical” case would be a wife or mother who has taken time out of work to raise children, enabling the husband/father to advance his career.

Based on the information you have provided, I agree your ex-wife probably has a claim for economic disparity compensation. Your marriage was relatively long, and your ex-wife appears to have had greater child-raising responsibilities. There is a substantial disparity in your current income levels and it is usually presumed that if this is the case there will be a disparity in living standards. You should consider negotiating an agreed sum for economic disparity. Read more >

My fiance called it off - can I get the engagement ring back? - February 13, 2024

Can you get a ring back if an engagement is called off? Photo / 123RF

Q: My fiance called off our engagement several months ago. At the time, this came as a shock to me. We had been living together for around a year. I thought our relationship was strong. We planned to get married next February. I had paid a non-refundable deposit to secure a popular Waiheke wedding venue. I also paid for the engagement ring she selected at an eye-watering cost. I thought she would be reasonable and return the ring to me. So far, she has ignored my messages about this. I believe she should repay me half the cost of the wedding venue deposit and return the ring to me. What are my chances of getting an order to this effect from the Family Court? Is this something worth me pursuing?

A: In short, yes, you could apply for orders from the Family Court, but it probably would not be worth it.

The Domestic Actions Act 1975 allows the court to restore a party who is financially worse-off after an engagement has ended to the position they would have been in had the engagement not occurred. It is important to note this legislation does not apply to those who have been in a de facto relationship for three years or more; in this case, the relationship property legislation applies. An agreement to marry that is terminated is required, so this legislation will also not apply to those in de facto relationships who have not become engaged.

There is the need to draw a distinction between cases where couples have lived together from those where they have not. Where couples have lived together, it is more appropriate to deal with applications under this legislation “holistically” and look at all assets, rather than isolated assets such as engagement rings. The contributions made by both parties to the relationship will also need to be considered: both financial and non-financial (for example, housework and caring for children). This sort of investigation by the court would likely mean a longer hearing time and more detailed evidence. This spells more uncertainty as to the outcome and higher legal fees. Read more >

Protecting your assets when starting a new relationship - February 11, 2024

Is a trust the best way to protect my assets from a new partner? Photo / 12rf

Q: I have just started a new relationship. I would like to establish a trust to protect myself from any relationship property claim. I am thinking about appointing two family members who live overseas.

A: You should not rely on the trust to protect your assets from a relationship property claim by your new partner. In the past, some considered it sufficient to transfer assets to a trust before a “de facto relationship” began. However:

1. You may already be in a “de facto relationship” depending on how a variety of factors (set out in the legislation) are interpreted. To some degree this is subjective.

2. Even if you are not, a transfer of a property to a trust shortly before the beginning of a de facto relationship should not be relied on. Recently, the Supreme Court set aside the transfer of a property to a trust shortly before a couple moved in together because the court found the transfer was made “in contemplation of the de facto relationship”.

You and your new partner should negotiate and sign a contracting out agreement (“pre-nup”) setting out how your respective assets are to be divided in the event of your separation. You may still wish to establish a trust, but it should not be for the main purpose of protecting your assets from a relationship property claim for this relationship. Read more >

What can I do about my ex-partner being drunk while he’s in charge of our kids? - March 3, 2024

My children have made remarks which suggest my ex-partner is drinking heavily again, what should I do? Photo / 123rf

Q: My partner and I have been separated for a few months. We have two boys together, aged four and seven. The boys spend three nights every second weekend with him. The children have made remarks which suggest my ex-partner is drinking heavily again. Alcohol use was an issue for him when we first got together but with my encouragement he had completely stopped. Should I stop contact because of the drinking? I am concerned it is a safety issue.

A: First and foremost, the children need to be physically safe while in your ex-partner’s care. If he is heavily intoxicated (or even just intoxicated) then he will not be able to properly supervise them. They are still relatively young. From the information you have provided it sounds as if alcohol use is an issue for him and he is not able to drink moderately.

There is no one correct approach to deal with the issue. It depends on the level of risk you and your lawyer assess the situation as posing: did your ex-partner require assistance from supports such as a doctor or organisation such as Alcoholics Anonymous last time he was using alcohol? If so, would he be prepared to re-engage? Would he likely adhere to a written commitment not to use alcohol when the children are with him or is he only likely to adhere if there is a Court order?

It is only in relatively rare cases that an order will be made stopping contact between children and a parent completely. Usually, if there are safety concerns an order will be made that the contact is supervised, either by an agreed friend, a relative or at a supervised contact facility until the issue is addressed. Read more >

Is your KiwiSaver relationship property? - September 29, 2024

You can withdraw your KiwiSaver to fund a relationship property settlement through the Family Court.

Q: My partner and I have been together for five years. While I have put 8% of my salary into KiwiSaver, my partner has also been in a high-income job but has not been contributing to KiwiSaver. I have been contributing to KiwiSaver for 15 years. My partner has been spending money on holidays overseas and an expensive car. That car has reduced its value significantly. My partner is 45, and I am 60.

Is the KiwiSaver/superannuation fund relationship property? Can I withdraw money from my KiwiSaver to pay my partner out a share of her relationship property claim?

A: Yes, your relationship property is the property owned by you and/or your partner that needs to be divided (generally 50/50) when you separate. What constitutes relationship property is legally determined by the Property (Relationships) Act 1976.

For many couples, KiwiSaver is their biggest asset after their family home.

The proportion of any superannuation scheme entitlement that occurs during the relationship is relationship property. This includes KiwiSaver funds.

Any proportion of your KiwiSaver or superannuation fund acquired before your relationship will remain your separate property. Read more >