Rebecca Savage

Ashley Jones commenced petitioning for a change in the current dissolution laws after leaving an abusive marriage herself. After waiting two years, Ashley was told she had to locate her husband and organise for him to be served with the paperwork, despite not knowing his whereabouts and a final protection order being in place. This is obviously an upsetting, frustrating and potentially dangerous situation to navigate following an abusive relationship and lengthy wait to formalise the divorce. Previously, under the Family Proceedings Act 1980, an application for an order dissolving a marriage or civil union could only be made if the parties had been living apart for a period of 2 years. Although a one party application could be made, the other party would still need to be served with the paperwork and be given a right to respond. Ashley Jones\' petition to add additional grounds for dissolution for protected persons was successful and an amendment has just been passed into law. The Family Proceedings (Dissolution for Family Violence) Amendment Bill allows family violence survivors with a final protection order in place against their spouse to dissolve their marriage immediately upon a simple application to the Family Court. Under s39A, this Bill not only eliminates the need for parties to wait for 2 years before applying for a dissolution, but also the need for the protected party to serve the other with the application. Upon receipt of the application, providing a protection order is in place, the Registrar of the Family Court may make an order dissolving the marriage or civil union. For the purpose of this Bill, a protection order means: A final protection order under the Family Violence Act 2018; or A protection order: Made under section 123B of the Sentencing Act 2002; and That becomes a final order under section 123G of the Sentencing Act 2002; or A registered foreign protection order. This is good news for victims of family violence. Please reach out to our Family law team for further information.

The death of a loved one is never easy. There are all manner of things that need to be organised when your significant other dies, such as their funeral, as well as saying goodbye and grieving. The process can become even more complicated when issues regarding their estate and relationship property arise. It is not widely known that a surviving spouse or partner has a right to make an election either to take their entitlement under the Will or to seek an order for the division of relationship property, if that is more favourable than what they are left under the Will. A concept of moral duty to adequately provide for certain family members out of your estate also exists. It is also possible to seek provision from an estate if you provided a service whilst the person was alive on the basis they promised to provide for you in their Will, but this has not been recorded in their Will. Property (Relationships) Act 1976 (“PRA”)The PRA gives a surviving spouse or partner two options. Option A is to apply for a division of the relationship property, the starting point being an equal division. Option B is to simply take what you are entitled to under the deceased’s Will or if the deceased did not have a valid Will (dying ‘intestate’), to take what you are entitled to under the Administration Act 1969. In some circumstances, the executors of an Estate can also seek permission from the Court to bring a claim against the surviving spouse/partner for division of property between the spouse/partner and the Estate. This can be complex and is less common. Why make a choice for division of relationship property rather than taking what you’re entitled to under the Will? The surviving spouse or partner could be entitled to more under the PRA than they would receive under the Will. Examples include: If no provision or inadequate provision is made for the surviving partner in the Will, for example if the family home was owned by the deceased and it has been left to their children from an earlier relationship. Where there is no valid Will . If there is an outdated Will which provides for a previous partner and not the current partner. There are specific time limits involved with making an election, so it is important that legal advice is sought promptly. Legal advice will help you make an informed decision within the correct time frame while making the process as simple as possible. Family Protection Act 1955 (“FPA”)The FPA allows for a claim to be made by a spouse or partner (and other categories of persons) for provision from a deceased’s estate if proper maintenance and support has not been provided to the surviving spouse or partner. There are a number of circumstances that the Court can take into account when determining whether to grant provision from a deceased’s estate. Applications can be made by a spouse or partner, children and grandchildren, and even stepchildren or parents if they were being financially supported by the deceased and they feel there should have been provision made for them. As with a PRA claim, there are specific time limits for bringing an application under the FPA and it is important that legal advice is sought promptly. Law Reform (Testamentary Promises) Act 1949 (“TPA”)The TPA provides an avenue to make a claim if someone provided services to the deceased and in return they promised to leave them something under the Will, but in fact no provision was made for them. Such services can include anything above and beyond the reasonable obligations expected of a loved one. The claimant needs to prove: That they rendered services to, or performed work for, the deceased in their lifetime; That there was a promise by the deceased to reward the claimant; A link between the services and the promise; and There was no promised testamentary provision or reward provided in the Will for the claimant. The promise for compensation can be expressed or implied, in writing or verbal. The Court will consider all facts in the case when making a decision. When people get caught outThere are a few laws surrounding wills which may surprise you. The unpleasant truth is normally discovered by those who are already grieving. Administration Act 1969When a person dies without a Will or their Will is invalid, they are considered intestate. This means that distribution of their estate will occur under the Administration Act 1969. Section 77 of the Administration Act 1969 sets out the patterns of distribution according to who the intestate leaves behind, for example: a spouse or partner, children, and/or parents. Section 77 of the Administration Act 1969 is noteworthy in that, after the payment to the surviving spouse/partner of a prescribed amount and them receiving the chattels, it distributes the residue of an intestate person’s estate with one third to a spouse or partner and two thirds to any children. Therefore, it is particularly important for those who have children to leave a Will if they wish to provide more than a third of their estate to any current spouse or partner. Marriage cancels a will, but divorce does notWhen a Will exists before marriage, once a person is married, the Will is only valid if the Will states that it was made “in contemplation of the marriage”. On the contrary, when divorce or separation occurs, a Will is not automatically void. If the marriage or civil union has been legally dissolved, but the Will has not been changed, then the appointment of the spouse as executor and any disposition to the spouse under the Will (with limited exception where a disposition is in favour of children) is void and the Will must be read as if the spouse had died immediately before the Will maker. If you still wish to appoint your ex-spouse or partner as an Executor and/or include them as a beneficiary once your marriage or civil union has been dissolved, then we strongly recommend that you update your Will so that it is clear that your wishes are post-dissolution and still stand. If no legal dissolution of marriage or civil union has occurred, then the provisions of the Will that relate to the spouse are not automatically void. We strongly encourage that Wills are updated as soon as separation occurs otherwise an estranged spouse or partner may receive more than intended. If a Will is not updated, any children may be left to make a claim to the estate. Whilst separation will be a factor taken into account, it is onerous to leave family to work through this at a time which is already emotional. ConclusionIn an era where nuclear families are no longer the norm or majority, it is important to receive legal advice on, and to leave, a Will so that you can be in control of how your estate is distributed on your passing. Not only does this provide certainty for your loved ones, but it can resolve familial relationship issues before they arise in what is already a highly emotive time. The Holland Beckett Family and Estates teams would be happy to assist you, in the first instance in completing a legally valid Will, and also in working through any challenges to a Will that you face on the death of a loved one. Please do not hesitate to get in contact with us early on so that we can ensure the minimum amount of stress is placed on you throughout such difficult times.

Separation can be a difficult process. Not only are there a lot of emotions involved, but there are likely to be assets that are owned jointly, or separately but which have been used by both parties during the relationship. Working out who gets to keep what can be straight forward in some cases, but often the matter is more complex than you may expect. The Property (Relationships) Act 1976 (“PRA”) applies to marriages, civil unions or de facto relationships of three years or more. In limited circumstances, the PRA can also apply to relationships of shorter duration. What is relationship property? The PRA defines both relationship property and separate property. The family home and family chattels, whenever acquired and in whoever’s name they are legally owned, are relationship property. Contrary to popular belief, whether or not you owned the family home or chattels before the relationship, they will be relationship property dividable equally between both parties to the relationship (subject to certain limited exceptions). Family chattels can include furniture, appliances, household tools, pets, as well as cars, caravans, trailers and boats if they were used wholly or principally for family purposes. Gifts from one spouse or partner to the other are generally not regarded as relationship property – so no, you don’t have to give back the rings. Relationship property may also include superannuation and KiwiSaver, shares and investments, business interests, life insurance policies, rental and investment properties, property acquired in contemplation of the relationship, rights in respect of a trust, as well as relationship debt (which does not have to be in the parties’ joint names). Bank accounts which hold funds earned or received during the relationship are also likely relationship property despite being in the name of only one of the parties. Taonga and heirlooms, as well as chattels used wholly or principally for business purposes, are excluded from the definition of family chattels. This means these items will usually be separate property rather than relationship property, however this is decided on a case-by-case basis. What is separate property? Any property that is not relationship property is separate property. Such property does not need to be divided between the parties to the relationship. Generally, separate property also includes: Property which was acquired by either party whilst they were not in a relationship and that has not been used during the relationship for family purposes; Property acquired out of separate property or any proceeds of sale of separate property; Any increase in value of separate property and any increase in income or gains derived from separate property; Property acquired from a third person by gift, inheritance, or as a beneficiary of a third person’s trust. It is important to keep property acquired by succession, survivorship, gift, or under a third party’s trust separate if you intend it to be separate property. If property can be seen to have been intermingled with relationship property, making it unreasonable or impracticable to regard it as separate property, it will become part of the relationship property pool. How is relationship property divided? While relationship property is generally divided equally between the parties of the relationship, there are limited circumstances where division should occur in unequal proportions. This may be due to economic disparity between the parties because of the effects of the division of functions within the relationship or in extraordinary circumstances that would make equal sharing repugnant to justice – although this is a high threshold to meet. Disclosure In order for your lawyer to advise you on what the full relationship property pool consists of and what your legal entitlements are, a process of disclosure by both parties of all assets, debts and interests must take place. Values will be determined, as well as the status of the item as relationship property or separate property. Following the completion of that process, the division of property can usually then be agreed by way of negotiation. Will we need to go to Court? Most people do not need to resort to the Family Court in order to resolve their relationship property division. It is only if an agreement cannot be reached between you and your former spouse/partner that Court proceedings are needed. Who gets what? You won’t walk away with half of a car so don’t get the chainsaw out. Generally, global division of relationship property can be reached without property needing to be sold – or cut in half. This involves taking into account the total value of the assets being retained by each party, and one global adjustment figure being paid by one party to the other party to ‘equalise’ the overall division so that each party is keeping 50% of the total net value of the relationship property pool. What about the pets? With the classification of pets such as cats and dogs as family chattels, you obviously will not both be able to keep your fur babies. The court has formulated their own way of determining who gets to keep the pet based on the pet’s best interests. This means the court considers things like who takes the best care of the pet, who is able to provide the best home for the pet and the pet’s needs. Independent legal advice Each party must receive independent legal advice as part of entering into a legally binding Separation Agreement. To be valid as a full, final and binding settlement, any agreement must be in writing and signed by both parties after independent legal advice and in the presence of their lawyers. If you find yourself experiencing a break up of a long term relationship, the specialist Family Law team at Holland Beckett can offer you practical and pragmatic advice with care and sensitivity. We have a team of lawyers who are experienced in negotiating and drafting Separation Agreements, or taking matters to court if needed.

This article was published in the New Zealand Law Journal, where our family team comments on a recent Court of Appeal case where ongoing maintenance was awarded to a de facto partner for an extended period of time, and explains why the current maintenance system needs an overhaul. In March 2020, the High Court heard the matter of Kwok v Rainey [2020] NZHC 923. It was a substantive hearing on the near full gamut of relationship property claims possible under New Zealand’s relationship property regime, with some highly interesting findings (particularly in relation to costs as damages, at [244] to [264]). However it had one concerning outcome: it found that Mr Rainey was liable for maintenance to Ms Kwok of over half his yearly income for a period of 3.5 years, which was almost half the length of the relationship itself. On appeal (Rainey ato David Rainey Family Trust v Kwok [2021] NZCA 199), this ruling was overturned, and Mr Rainey was ordered to pay the High Court level of maintenance for a period of two years, and a vastly reduced maintenance sum for a further nine months. This article posits the Kwok v Rainey is a clear example of why the current regime can produce unjust outcomes, why reform is needed and why Family Income Sharing Arrangements (FISAs) may provide the answer. This case illustrates both the inadequacies of the current law and the injustice that can occur when it is improperly applied. Facts Wan Lan Kwok, a Hong Kong resident, met David Rainey, a builder from Tauranga, when she was in New Zealand in August 2008. There was evidence that Ms Kwok was working (albeit without a visa). Both were in their mid-forties and had come from previous long-term relationships with two adult children each. They quickly developed a relationship. By 1 March 2009, Ms Kwok was living and working with Mr Rainey in New Zealand. When granted a resident’s visa on the basis of her partnership with Mr Rainey in August 2011, Ms Kwok relocated to New Zealand. During the relationship Ms Kwok assisted Mr Rainey on building sites with basic labour from time to time and was paid a wage by his company. Mr Rainey was also employed by his company as a builder. Mr Rainey, having seen his assets halved on two occasions as a result of relationship property proceedings, was committed to the relationship but wanted to protect his own assets. After the couple had lived together for approximately two and a half years, Mr Rainey sought advice from the law firm Gascoigne Wicks (GW) as to how to do so. By this stage Mr Rainey had purchased a section in Tauranga where he intended to build a house. Based on GW’s advice, Mr Rainey set up a trust which was to own the section. Mr Rainey then built a house on the section and they lived there as a couple until the relationship came to an end in September 2016. Both parties were of modest means. Ms Kwok was 55 at the time of the hearing and had lived in New Zealand on and off for 12 years. Mr Rainey was 54, and unable to work full time as a builder after battling cancer. Mr Rainey has had two previous marriages, and had two adult children with his first wife. Mr Rainey and Ms Kwok had no children together.  In October 2018, Ms Kwok had received an interim maintenance order by the Family Court of $200 per week for six months.  In March 2020 at the High Court hearing, Ms Kwok sought a half share in the house (held in trust), the current account of Mr Rainey’s building company, $785 of maintenance per week and a half share of the family chattels. Overview of present law  Post-separation maintenance is governed by the Family Proceedings Act 1980 (FPA). The overarching statutory policy is that neither party to a de facto relationship is liable to maintain the other after ceasing to live together (s64), A ‘clean break’ principle is imposed, which encourages former partners to become self-sufficient. There are statutory exceptions to this general policy. The relevant sections for determining a de facto maintenance application are ss 64, 64A, 65, 66, 69 and 70. Principally, s 64 deals with maintenance in a de facto relationship (as was the case in Rainey v Kwok). This section provides that each partner is liable to maintain the other only to the extent necessary and where the other partner cannot practicably meet their own reasonable needs because of specified circumstances (s64; s64A). Sections 69 and 70 provide the Court with a broad discretion as to how payment will be made and how it is to be calculated. However, these wide powers are then tempered by ss 64 and 64A, which set out the only circumstances in which one party will be liable to maintain the other after the relationship ends. Section 65 then prescribes matters that the Court must have regard to in determining the amount payable, and certain kinds of conduct and misconduct may also be taken into account (s 66). Ultimately, the Court can consider any relevant circumstance in determining if the maintenance threshold is met (s64; s64A), and must consider factors relating to both payer and payee’s means and financial responsibilities when determining quantum (s65). It cannot be a punishment for the breakdown of the relationship (G v C FAM-2007-004-2155/2156, 8 October 2008 as cited in C v G [2010] NZCA 128 at [17]). Having a broad discretion certainly provides the tools for a fact specific result, accepting that there is no one size fits all in maintenance, However, in the writers opinion, the present system also can produce unjust results. Interestingly, case law on interim maintenance has developed a justice inquiry (Ropiha v Ropiha [1979] 2 NZLR 245 at 247; Cooper v Pinney [2016] NZHC 1633 at [20]), but this ‘sanity check’ has not developed in the final maintenance inquiry. The High Court judgment Thomas J ordered that Mr Rainey pay $785 per week for (in effect) 3 and a half years. That was almost half the length of the entire relationship, and in circumstances of both parties being of modest means, both in their forties when they met, no children together and Ms Kwok taking no steps to obtain employment in the four years between separation and the hearing. Her Honour, citing Slater v Slater [1983] NZLR 166 (CA) at 174, held that parties cannot be expected to be self-supporting until they have received their share in relationship property. The appeal The High Court decision was overturned in part. The Court of Appeal (Cooper, Gilbert and Goddard JJ) held that a reasonable period for Ms Kwok to become self-supporting would be two years, had she had her relationship property. Because Ms Kwok did not have her share for four years (due to the High Court litigation), a period of two years at $785 per week and nine months at $200 per week was ordered. The Court also held that her Honour was wrong to impose the inflexible principle of requiring relationship property before partners can be expected to support themselves. Worryingly, the Court of Appeal did not think it was necessary to determine Mr Rainey’s actual income because he could earn a “reasonably good income” as a builder. When dealing with parties of modest means (not the Mr Clayton’s of the world:  see Clayton v Clayton (Vaughan Road Property Trust) [2016] 1 NZLR 551, [2016] NZFLR 230, [2016] NZSC 29)) actual affordability should certainly be a relevant circumstance to take into account (s65). That aside, the maximum actual income for Mr Rainey referred to in the decision was approximately $80,000 per annum. Payment of $785 per week equates to approximately $40,000 per annum. The Court therefore considered it reasonable for Mr Rainey to pay in effect 50% of his income to Ms Kwok whilst paying all outgoings and expenses for the family home (including the mortgage). Ms Kwok also benefitted from the delay caused by litigation by the increase in value of the family home. Issue: unfair and uncertain Despite the broad discretion, in practicality, the Court’s inquiry is very applicant/payee focused. Certainly, where a more traditional relationship exists, the current maintenance provisions do the job. However, it is the writer’s view that where the ‘payer’ is not a high-income earner, the outcome can cause real financial harm. The Court’s inquiry does not seem to place enough weight on the functions of the relationship and actual affordability for the respondent. Under the FPA, it must still be reasonable for the respondent to pay maintenance and for it and be causally connected to the relationship. It can lead to unpredictable outcomes.  In Rainey, Ms Kwok claimed that her age and inability to speak English prevented her from being able to gain employment.  Yet those factors existed when she first came to New Zealand before meeting Mr Rainey, and she had taken no steps to improve her circumstances post-separation. Proposed Reform In 2017, the Law Commission undertook a review of the relationship property regime in New Zealand and sought to modernise it in line with New Zealand’s changing society. Ultimately, the Law Commission recommended that s 15 of the Property (Relationships) Act 1076 (PRA), ss 63, 64, and 82 of the FPA be repealed and replaced with a FISA regime. A partner would only be entitled to a FISA if their relationship was 10 years or longer (unless the parties had children together) or the applicant’s contributions to the relationship either advanced the respondent’s career or was at the sacrifice of the applicant’s career. Subject to orders for adjustment where serious injustice is caused, there would be a cap on the time period for which maintenance could be paid (for up to five years) and a statutory formula for calculation of payments. The formula is based on the family income received during the relationship (as opposed to future earning capacity). A key focus for FISA is ensuring that partners are only entitled to FISA if their financial need is connected to the relationship. The Commission commented that if it was not, it should be the State’s responsibility to financially support that person. In 2019, the Government responded to the FISA proposal, accepting that the current PRA framework is no longer fit for purpose. It declined to give effect to the recommendations at the time but will consider them concurrently with the Law Commissions review of succession law. The Law Commission is currently reviewing submissions on succession. The Court of Appeal in Rainey v Kwok made no specific comment on the social policy of maintenance, the need for justice in maintenance orders or the Law Commission’s PRA recommendations. This despite hearing submissions on the points as comparison tools for the Court’s maintenance assessment. Will FISA work? In effect, FISA will work like the Inland Revenue’s child support scheme via a default implementation system. Like the child support scheme, FISA is recommended to have set calculation formulas that can apply immediately on separation but be adjusted by the Court if necessary to prevent injustice. In the writers opinion, the FISA system is a step in the right direction to anchor the core principle of a causal connection between a party’s needs and the obligation to support . The certainty provided by predicable eligibility characteristics (length, children, contributions – albeit with some flexibility as is necessary) is a key benefit. The predictability of the scheme also paths the way for parties to resolve their own maintenance issues without necessarily needing to use the clogged justice system or incur legal fees. The most beneficial aspect is the heightened eligibility threshold. Anecdotally, the writer knows many relationships that easily meet the de facto threshold (s2D of the PRA) but are not of such a level of seriousness where the parties commit to financially supporting one another on separation, particularly for relationships in the younger adult generation. Had the FISA scheme been in place, Mr Rainey may have avoided liability to maintain Ms Kwok. This would have been a fair result given that this was a late-in-life relationship for parties with no children together and modest means. Next steps The legal profession now eagerly awaits for the Law Commission finishing its review on succession law. With the Government’s acknowledgement that the system needs to change, it is hoped that a new system can be predictable, user friendly and, above all, only applicable in circumstances where the seriousness of the relationship justifies ongoing support. This article was published in the December 2021 edition of the New Zealand Law Journal