New Zealand Law Commission Report on Dividing Property on Separation

The New Zealand Law Commission last week released its final report on the Review of the Property (Relationships) Act 1976.

The Act sets out how relationship property should be divided when a relationship ends by separation or death.

The report recommends a new Act be introduced covering relationships ending by separation because it considers the existing legislation to be out of date:

"Some significant changes to the law are required to achieve a just division of property between partners on separation. It is essential that the right pool of property is available for sharing. We have concluded it is no longer appropriate to share automatically the family home no matter how it was brought to the relationship. Only property acquired during the relationship or acquired for the couple's common use or benefit should be shared. We also think that some property held on trust has been wrongly excluded from the pool for division and that the courts should have clearer powers to address this. In response to the longstanding problem of how to share more fairly the economic advantages and disadvantages that can arise on separation, we have proposed an entitlement to share family income for a limited period after separation. We have also concluded it would be wrong to ignore the opportunity in this review to promote the best interests of children when their parents separate. Changes to the way in which relationship property disputes are resolved are important as well to address behaviour that causes delay and increases costs."

"Our recommendations constitute a package of reforms. Many of our recommendations work together. For example, refining the pool of property available for division is balanced by a more effective regime to share the economic advantages and disadvantages arising from the relationship or its end."

"Despite our recommendations for change, certain fundamental aspects of the law should remain as they are. The law should continue to value all forms of contribution to a relationship. This underpins the general approach of equal sharing, a '50/50 split', of relationship property. The law should continue to apply to relationships that are substantively the same – marriages, civil unions and de facto relationships of three years or more. "

The Law Commission did not consider relationships ending on death, and recommended that these should be dealt with separately.