University of Auckland professor Mark Henaghan. Photo: Otago University.
Experts say the government should not abandon Law Commission recommendations that would have overhauled relationship property laws in New Zealand.
In 2019, the Law Commission tabled a report that said the law for dividing property when couple separated was out of date. It proposed a number of changes, including to how the family home was shared.
Instead of dividing a family home equally on separation, no matter who owned it at the outset of the relationship, the commission said if it was already owned by one partner or was a gift or inherited, only the amount it increased in value during the relationship should be divided.
It also wanted to give courts more power to divide trust property, and suggested that settlements could involve family income sharing agreements that would force people to share income with their ex-partners for a period of time.
The government at the time said it would consider the recommendations alongside a succession law review.
In 2022, it said it accepted that reform was needed in both areas of law. The Ministry of Justice would consider the recommendations and any additional work required.
The Ministry of Justice said given the scope of the commission's recommendations, the complexity of these areas of law, and the engagement required with a broad range of stakeholders, the work to achieve these reforms would take several years. Timing for this work would need to be balanced against other government priorities.
Last week, a spokesperson for Justice Minister Paul Goldsmith said it was not part of the government's current work programme.
University of Auckland professor Mark Henaghan said the review had offered excellent recommendations.
He said the Law Commission's public questionnaire showed 60 percent of those who responded did not think a family home should automatically be shared after three years if one party bought the home before the relationship began.
He said the commission had also offered good recommendations for dealing with economic disparity and trusts.
He said it could take years to get to the bottom of cases where one party was hiding property in companies, trusts and complex business arrangements.
"The Law Commission has recommendations on how to require quicker disclosure of assets. These are examples of what needs to be improved. There are more."
Divorce coach Bridgette Jackson said the current law was causing a "huge amount" of stress.
She said she had one client who ended a relationship and had to give up half her house. She then entered another relationship and the same thing happened. "She said to me it felt like she as being penalised for having more than one relationship."
Jackson said there was no structured system for income sharing at present and that left lower-earning partners vulnerable. "That's predominately the women, who are the caregiver ... five out of six women when they go through divorce are left with the children physically and financially. Another stat is that one in three women are actually left in poverty.
"I've worked with parents who desperately want to stay in the family home so their children could stay at the same school - stability, consistency, all of that, which is really important for children as they're going through this process.
"But there isn't a lot of protection and a lot of people end up being forced to sell and move at the same time as the separation, which is huge upheaval for particularly the children."
She said more people were opting for de facto relationships and did not realise how the law would apply to them.
"When a step parent has contributed for a decade but are not being recognised in that property division at all ... from where I sit at the coalface in the trenches, these outdated rules I think from my perspective ... create legal hurdles and it really creates a lot of real financial hardship, a lot of prolonged stress and emotional fallout for families.
"It should be on the government's agenda to relook at all of this."
Righteous Law litigation principal Kalev Crossland said he supported many of the Law Commission's recommendations, particularly that there be more focus on children.
"When couples break up, they're the ones that sort of bear the brunt ... they're the ones having to move school, sleep on couches, staying with relatives or whatever.
"The Law Commission said the children's best interest should be given a greater prominence, and that's certainly something that I would agree with."
He said the automatic division of a family home could particularly be a problem for second and third relationships.
Family income sharing arrangements could also be helpful in situations where one partner's career was held back to look after children or support their spouse's career.
The income-sharing agreements the commission proposed would have the other person paying a portion of their income until the lower-earner was back on their feet.
"It's not forever, just for a limited time to offset the financial imbalances the relationship created."
Crossland said there could also be more recognition of Māori land and taonga passed down within a family.
He said, in his experience, it took longer to get through relationship property litigation than other areas of law, such as employment issues.
He said a wealthier partner could sometimes hire more expensive lawyers and slow the process.
"That has the unfortunate side effect of wearing down the other party and they may be forced into doing an out of court settlement on, on terms that you know, don't really reflect the full merits just because they've been worn down in the litigation."
He said it would help if the court had tools to help keep the process moving, and facilitate mediation more effectively.
"What I often say to people when I'm in these negotiations and people are fighting over money, is I say to both of them, ultimately, 'why do you work so hard in life to accumulate these assets? What's going to happen to them?'
"And they say, well, 'it's for the kids, just to bring them up well. And when I die to pass it on' and when they both are in an agreement with that, you often have a breakthrough."
Green Party justice spokesperson Lawrence Xu-Nan said the government should pick up the commission's recommendations.
"Separation and divorce can be a very stressful process, and the division of assets is often a big part of that stress. So it's worth looking at changes that could make things easier, particularly for people who are leaving abusive relationships and are especially vulnerable."
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