Law Commission proposes reforms to relationship property law, submissions still open

Mon 26 Nov 2018

The Law Commission has published an issues paper outlining its preferred approaches to reforming the Property (Relationships) Act 1976 (PRA). Submissions ...

The Law Commission has published an issues paper outlining its preferred approaches to reforming the Property (Relationships) Act 1976 (PRA).

Submissions are still being accepted until 14 December 2018.

The Law Commission began reviewing New Zealand’s relationship property legislation in 2016. In October 2017, the Law Commission published an issues paper and study paper inviting public feedback. It will make its recommendations to Government in 2019.

Based on submissions that have been made so far, the Law Commission has outlined recommended reforms in its issues paper: Review of the Property (Relationships) Act 1976: Preferred Approach: Te Arotake i te Property (Relationships) Act 1976: He Aronga i Mariu ai (2018). The Law Commission has also published a brief Frequently Asked Questions document that summarises key points from the issues paper.

The Law Commission website outlines seven key proposals from these proposed reforms:

"The family home should no longer always be shared 50-50. Instead, if one partner owned the home before the relationship, only the increase in value during the relationship should be shared. Homes acquired during the relationship will still be shared equally.
People who have children, have been together for 10 years or more, or who have built or sacrificed careers because of the relationship should be eligible for Family Income Sharing Arrangements or “FISAs”. Under a FISA, the partners would be required to share their combined income for a limited period after they separate, to ensure the economic advantages and disadvantages from the relationship are shared more fairly.
A court should have greater powers to share trust property when a trust holds property that was produced, preserved or enhanced by the relationship.
The rules should continue to apply to all marriages, civil unions and de facto relationships lasting three years, unless the partners enter into a contracting out agreement.
Partners should still be entitled to share equally in all relationship property, subject to limited exceptions.
Children’s best interests should be given greater priority under the PRA. This includes giving the primary caregiver of children a default right to stay in the family home in the period immediately following separation.
A range of measures to promote the just and efficient resolution of PRA matters and to address behaviour that causes delay and increases costs. This includes making sure partners properly disclose to each other all relevant information about their property, whether or not they go to court."

The reforms outlined in the paper will be recommended to the Government in 2019, subject to additional feedback. You can still submit feedback until 14 December 2018 by emailing pra@lawcom.govt.nz.

Update: The Law Commission has published a brief outlining recommendations for a new Act to address dividing property when people separate.

Relationship of family violence (including child abuse) to the PRA

The Law Commission's first issues paper included questions about whether family violence should be an exception to the general rule of equal sharing and whether family violence could be considered misconduct during the relationship when considering the division of property. Chapter 3: Division in the new issues paper considers these questions.

The Law Commission does not propose introducing a specific exception to equal sharing for family violence. It agrees with a submitter's view that any amendments to the PRA that respond to family violence should "follow a full and proper examination of the causes of family violence in New Zealand and 'across-the-board solutions rather than one-offs in largely unrelated legislation'." It proposes that "any reform to the PRA that has the effect of penalising perpetrators of family violence should be considered within the context of the Government’s broader efforts to address the impacts of family violence in the community, and alongside wider issues including access to justice and appropriate support for victims of family violence." (paragraph 3.68)

In this Chapter, the Law Commission provides three preferred approaches:

"P [proposal] 11: The PRA should continue to provide that each partner is entitled to share equally in all relationship property, subject to limited exceptions."

"P12: The PRA should be amended to clarify that a court can take into account a partner’s misconduct that satisfies the threshold in section 18A(3) when deciding whether there are extraordinary circumstances which make equal sharing repugnant to justice under section 13."

"P13: The Government should consider the division of property at the end of a relationship under the PRA, in the context of its wider response to family violence."

Chapter 7: Children's Interests explored how children's best interests are addressed during separation under the PRA. The Law Commission found that under the current PRA, children’s interests do not have a significant role (see paragraph 7.11). A number of preferred approaches have been recommended in this area. Excerpts of these include:

"Children’s best interests should be a primary consideration"
"a court should have the power to set relationship property aside for the benefit of any minor or dependent children of the relationship"
"a presumption in favour of granting a temporary or interim occupation or tenancy order on application by the primary caregiver of any minor or dependent children of the relationship."
"lowering the threshold for appointing a lawyer for child to 'necessary or desirable', consistent with the Family Proceedings Act 1980"
"review the effectiveness of the Child Support Act 1991 in meeting children’s needs and setting the level of financial support to be provided by parents for their children"

Chapter 9 addresses tikanga Māori. The Law Commission noted that "... consultation on matters where tikanga Māori is especially relevant has been limited" (see paragraph 9.2). The Law Commission did propose preferred approaches related to tikanga Māori when the family court is involved:

"P49: The Family Court should be enabled to appoint a person to make an inquiry into matters of tikanga Māori and report to the Court."

"P50: Family Court judges should receive education on tikanga Māori."

"P51: Further consideration should be given to warranting Māori Land Court judges to sit alongside judges in the Family Court where there is a difficult matter of tikanga Māori at issue."

In addition, Chapter 10: Resolution considered the use of family dispute resolution services and settling matters out of court.

For more information, including initial questions and considerations of family violence and child abuse, see our previous story Review and consultation on relationship property law.

More information and related news

The Backbone Collective has published findings from surveys of victims of domestic violence about their experiences with family court. For more information including links to their reports see our story Backbone Collective releases new report on Lawyer for Child.

The Government setup an independent panel to review the 2014 Family Court reforms. Also see our Reading list on Family justice system, Family Court.

Researchers from the University of Otago published a report summarising a survey of public attitudes about how relationship property is divided when a couple separates.

Grant Thornton New Zealand and the New Zealand Law Society (Family Law Section) published a report, New Zealand Relationship Property Survey 2017, summarising results from a survey of family law practitioners.

Update: Grant Thornton New Zealand and the New Zealand Law Society’s Family Law Section have published an updated New Zealand Relationship Property Survey 2019.

Update: The Government has released the response to the Law Commission report, Review of the Property (Relationships) Act 1976 Te Arotake i te Property (Relationships) Act 1976. The responses states that the Government will wait to consider the recommendations of the Law Commission report until after the completion of the recently launched Law Commission’s review of succession law. Reviewing the succession law was one of the recommendations of the report on property. The Government felt that acting on the recommendations and possible legislative change should incorporate outcomes from both a review of the property law and review of succession law.