When those who are married decide to separate, or a de-facto relationship comes to an end, the division of that couple’s relationship property can be pursued under the Property (Relationships) Act 1976 (The Act). The Act provides a set of rules that detail who can use it, what property can be divided and how you divide and distribute that property.

When the Act came into effect, it was seen as a fresh way to approach the division of relationship property. The Act introduced the principle of equal division – the contributions of each party to the relationship are seen as equal. It does not matter if one party was the main ‘bread-winner’ and the other was a home-maker. In later years, the Act was amended to allow the rules around the division of relationship property to apply to those de-facto couples who are in a relationship of three years or more.

More than 40 years have passed since the Act was first enacted and its once fresh face is starting to show its age. Overall, it appears the Act has not been able to keep up with different types of relationships, lifestyles, and expectations that are present in New Zealand society today.

Increasingly, people are turning to legislative instruments, like trusts, to try and defeat possible claims under the Act. Trusts are often used to ring-fence and protect property from being classified as relationship property which can be divided under the Act.

There are also concerns that the Act does not provide a legal mechanism to deal with issues such as the custody of children, child support, spousal maintenance and domestic violence, which are often present when a relationship comes to an end.

In light of these issues, the New Zealand Law Commission has been tasked to review the Act to see what changes need to be made to make the Act more user-friendly and relevant.

There have been suggestions that the Act should provide counselling for those couples going through a difficult separation. The use of counselling could resolve those personal issues that often underpin those prolonged and costly proceedings brought to the New Zealand Courts.

There have also been calls for the Act to better reflect the interests of children who may be affected by the separation and division of relationship property. New Zealand’s Children’s Commissioner, Judge Andrew Becroft, recently discussed the possibility of including the well-being and best interests of a child as a consideration when looking at the division of relationship property. This would ensure a division of relationship property that reflects the children’s interests, a result that might not necessarily reflect an equal division which is the current principle under the Act.

The New Zealand Law Commission recently asked for submissions on how the law around the division of relationship property might be improved. A report compiling these responses is expected to be released to the Minister in November 2018.

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