2 Nov 2018

Proposed law changes to relationship splits could reduce litigation

12:31 pm on 2 November 2018

Lawyers and courts may have fewer divorce property disputes to deal with if changes are made to the law covering relationship splits.

Divorce papers and wedding ring

Photo: RNZ/Teresa Cowie

Eight proposals have been put forward by the Law Commission to improve the Property Relationships Act, which hasn't been updated in more than four decades.

One proposal is if one partner owns a home before the relationship, only the property's increase in valuation would be split - not the house itself. Another is that a court should have greater powers to share a trust-owned property.

The Law Society's chair of family law section, Kirsty Swadling, said the proposals provide clarity and certainty about who gets what.

"At the moment the issue regarding trusts and relating to the inequality of the positions of the two spouses or partners after the relationship ends is very much in the discretion of the court - so it's quite unpredictable."

Ms Swadling said there would be a bedding down time, but the commission is trying to suggest something that does give more predictability.

"Particularly when you look at their proposals relating to the family income sharing arrangement, where they actually are talking about a formula which can just be calculated by anybody, they wouldn't need a lawyer to do that."

But Ms Swadling said independent legal advice would still be needed if people chose to enter into a contract at the start of the relationship or if they entered a settlement agreement at the end of the relationship.

She said proposed changes to the Property Relations Act need to be considered together, as if only the proposal to move away from a 50-50 property split were introduced it could disadvantage women.

"That is a concern and I think it's very important that if the change that is proposed in respect of the family home is made, that it needs to have with it the other suite of changes that they're proposing that ameliorate that particular variation to the current regime."

The proposal that people with children who had been together for at least 10 years or who had made economic or career sacrifices such as staying at home to care for children would need to share their income for a limited period after they separate to help ameliorate that, Ms Swadling said.