The split: when couples call it quits

One-third of long-term relationships fail. MATHEW DEARNALEY looks at the new rules covering division of property between partners.

Marriages and de facto relationships of whatever sexual leaning will be treated equally under the law from next year - not only if they hit the rocks but also on the death of a spouse.

Opposition parties accuse the Government of undermining the mutual promise of marriage and attacking the norm of equal division of matrimonial property among divorcing couples. They say neither of the governing parties foreshadowed such a wide-ranging change in their election campaigns.

But the Coalition says the 1976 Matrimonial Property Act badly needed reform, as it left many non-career partners caring for children in relative poverty, and hundreds of thousands of people in de facto unions were also left in the cold.

The Property (Relationships) Bill will put a heavy onus on all de facto partners to assess their commitments to each other, with the sobering likelihood of facing major claims on their assets if they break up after three years together.

More than 230,000 people live in de facto heterosexual relationships - a 100 per cent increase since 1986 - and there are unknown thousands in same-sex unions.

Auckland family law specialist Antonia Fisher says that with about one-third of relationships likely to fail, a law encouraging people to face their financial responsibilities from romantic beginnings can only be good.

Not that couples who embarked on trial runs before committing themselves to long-term relationships will be automatically entitled to half of each other's property if their love turns cold.

They will have to have lived together for at least three years after turning 18, and they can sign contracts exempting themselves from the new law as long as they do so after seeking legal advice.

The legislation, which passed its final stages in Parliament last week, is believed to be the first in the world to lump wedlock in with de facto and same-sex relationships.

But Australia, for example, gives defined property protection rights to de facto couples who have been together for two years or more.

What are some of the objections to the new legislation?


It is not just Opposition parties and the Catholic Church which object to what National deputy leader Bill English says is a bid to "roll up the whole messy process of human relationships under one rigid framework."

Even some advocates of same-sex marriages are saddened that Parliament is regulating for the break-up of relationships yet to be acknowledged in law.

New Zealand's Catholic bishops say they support registering same-sex couples to afford them access to certain legal rights and benefits available to married partners, but they oppose blurring the clear distinction between marriage and other relationships.

National accepts a need to give de facto couples more rights, but wants it done under a separate law, and sees as cosmetic a backdown by the Government to retain references to husbands and wives in the legislation rather than subsume them into the neutral term "partner."

Attorney-General Margaret Wilson says, however, that the new law is all about the division of property, rather than making moral judgments on whatever forms of relationship people choose to enter into.

She says it is simply a matter of fairness to ensure "relationship" property is distributed equitably in accordance with the equal status of men and women, and with anti-discrimination clauses of the Human Rights Act.

Besides, the Ministry of Justice is considering as a separate project the prospect of giving same-sex marriages recognition in law.

My partner and I have been together two years but aren't sure if we want to spend the rest of our lives with each other? What happens if we break up before the law takes effect on February 1?


Until now, those in de facto relationships have been excluded from provisions of the 1976 Matrimonial Property Act enforceable through the Family Court, although they had limited rights under common law.

The matrimonial law provided married couples who divorced after three years with equal shares of the family home, cars and chattels unless there were extraordinary circumstances rendering such a division repugnant to justice.

Other matrimonial property, such as a holiday home or company shares, was to be shared equally unless one partner made a greater contribution to the marriage than the other.

If the marriage lasted less than three years, the division of property was determined in accordance with the contribution each spouse made to the partnership. Antonia Fisher says this principle also applied outside wedlock, but only under the common law concept of constructive trust.

Applications had to be taken to the High Court for property division orders according to contributions made.

Cases were often long and costly, and there could be no expectation of an equal split even after three years' unmarried cohabitation, although the length of the relationship was among factors to be weighed up.

She recalls gaining a 45 per cent property share for a female client whose de facto relationship broke up, but that was a rarity and only because the woman had three children to support and had been with her partner for 12 years.

Margaret Wilson cites cases of estranged partners leaving a de facto relationship after three years with as little as 10 per cent of accrued property, and she says it is high time there is one set of rules for all New Zealanders.

"It is only fair that all contributions - whether financial or domestic - are recognised as valuable contributions to a relationship."

What will the new law do for me?


You and your partner must have been together in a de facto relationship for at least three years after each of you turns 18 to be covered.

After that, you will be treated the same as married couples, with an assumption that if you separate you will receive an equal share of any property accumulated as part of your relationship.

But property you owned before moving in with your partner and then kept separate from the relationship will be regarded as yours alone, and therefore unassailable, unless the Family Court considers it just to treat it as part of your union.

The court may waive the three-year qualifying rule if it is satisfied there are special circumstances, such as if you and your partner have had a child.

What if we have deliberately avoided marriage just so we won't have to divide our property if our relationship ends?


The Government accepts that there may be many in this position, such as older people who have been married before and do not wish to become economically entangled with a new companion, especially if they want to protect their children's inheritance.

Your and your partner will therefore be entitled, whether married or not, to sign a pre-nuptial contract stipulating some other property arrangement if you break up. But first you must seek legal advice, and a lawyer must witness both your signatures.

A Family Court judge may also overturn a contract deemed likely to cause serious injustice.

This was questioned in submissions by the Law Society's family law section, given that mere injustice, whether deemed serious or not, was reason enough for annulling a pre-nuptial contract signed under the Matrimonial Property Act.

But the Government decided a higher threshold was needed to give reasonable certainty that agreements would be upheld, especially now that a wider range of relationships will be brought into the fold.

There is also an acknowledged risk that some people in de facto relationships may not to be able to persuade their partners to contract out of the legislation.

And the stakes will be higher, as property salted away into trusts will not enjoy immunity from being carved up, as was the case under the Matrimonial Property Act.

Margaret Wilson's answer is that if she was in such a position, she would reassess whether a partner unwilling to sign on the dotted line was the right person with whom to continue a relationship.

Won't it be costly to sign a pre-nuptial agreement?


The Government is considering a model contract to reduce costs to couples, but a minority select committee report by National and Act MPs quotes lawyers' estimates ranging from $250 to $2000 for each partner to a relationship.

They also point to advice by lawyers that a short-form contract would create uncertainties and potential litigation costs.

Couples will be entitled to start forming alternative contracts on August 1, giving them six months to consider their options before the new regime starts.

Auckland lawyer Geoff Harrison says there will inevitably be offers to send away for do-it-yourself contracts, but these could be extremely risky.

They would be far more difficult to get right than wills, although he is advising all his clients considering a second marriage or long-term relationship to secure a contract.

How will a Family Court judge determine whether we are a de facto couple?


By considering a range of circumstances such as the length of the relationship, whether it was sexual, the degree of financial dependence or interdependence, the performance of household duties, and the care and support of children.

What if we have been married for more than three years but want a divorce?


Will the new law mean any changes for us? Yes. Judges will be able to vary the usual 50-50 split and award lump-sum payments based on predictions of future earning power where there are likely to be significant differences between the incomes and living standards of each partner.

This is one of the most contentious parts of the new law and is pitched at cases where, for example, one partner has lost vocational skills by putting a career on hold to run the home and care for children.

National and Act say it will give lawyers a field-day, inviting their clients to "have a go" in court and forcing judges to indulge in fortune-telling to predict future circumstances.

They ask what happens if a high-income earner is ordered to give an estranged spouse more than 50 per cent of the couple's property and is then made redundant.

Their preference is for a return to maintenance payments to spouses, a practice generally replaced by the "clean-break" principle of 50-50 divisions under the 1976 legislation.

But Antonia Fisher says judges felt unduly restrained when making maintenance orders, and the provision for lump-sum compensation to redress economic disparity will give them wider discretion to ensure just results.