Understanding when a relationship has legally 'crystalised' is critical to understanding your legal rights and obligations should that relationship be dissolved/ended. Before you cross the bridge into a relationship, you may wish to talk with us about ways to protect your assets or position. The law surrounding relationship property can be confusing. Contact us to arrange a meeting where you can be provided with sound advice on the most beneficial strategy for you to adopt.
There is a single ground for the basis of a dissolution of marriage or civil union of living apart for two years.
The Family Proceedings Act 1980 now means that a marriage or civil union can end at the wish of one party, whatever the conduct of that party may have been, and whatever the conduct, objections, or feelings of the other party may be. Equally, though, it means that an applicant for a dissolution of marriage or civil union must wait a minimum period of two years, no matter how harrowing or urgent the circumstances of the case.
The classic definition of marriage in New Zealand law is the voluntary union for life of one man and one woman to the exclusion of all others. This involves four main elements. First, the marriage must be voluntary. Where there is an absence of consent on the part of one of the parties the marriage can be declared void ab initio. Secondly, the parties to the marriage must be of the opposite sex. Thirdly, it must be for life, in the sense that it lasts for life, unless it is previously dissolved by a decree or some other act of termination. A marriage where the parties have the present intention to dissolve it at some point in the future constitutes a marriage for New Zealand law. Lastly, the marriage must be monogamous, in that no party may contract a valid marriage while already married to someone else and that previous marriage is valid and still subsisting.
The Civil Union Act 2004, which came into force on 26 April 2005, provides a means - civil union - for gay and lesbian couples to legally and publicly commit themselves to one another. The legislation was deemed necessary due to the unavailability of legal marriage, pursuant to the Marriage Act 1955, to gay and lesbian couples. While this provided the main impetus behind the enactment of the legislation, civil union is also an alternative to a de facto relationship for heterosexual couples who choose not to marry.
To be eligible to enter into a civil union, a person must be at least 16 years of age. People aged 16 or 17 must obtain the written consent of each of their guardians, although if consent is withheld, a Family Court Judge may, on application, consent to the civil union.. A person who is already in a civil union is prohibited from entering into a civil union with another person, and a person who is married is prohibited from entering into a civil union with either their spouse (except by changing the form of their relationship in accordance with the Act) or any other person.
The Interpretation Act 1999 provides that in an enactment, the term "de facto relationship" means a relationship between two people (whether a man and a woman, a man and a man, or a woman and a woman) who:
- live together as a couple in a relationship in the nature of marriage or civil union;
- are not married to, or in a civil union with, each other; and
- are both aged 16 years or older.
However, a relationship involving a person aged 16 or 17 years is not a de facto relationship unless that person has obtained consent for the relationship in accordance with the Care of Children Act 2004. The Interpretation Act provides further that in determining whether two people live together as a couple in a relationship in the nature of marriage or civil union, the Court or person required to determine the question must have regard to the context, or the purpose of the law, in which the question is to be determined, and to all the circumstances of the relationship. A de facto relationship ends if the de facto partners cease to live together as a couple in a relationship in the nature of marriage or civil union, or one of the de facto partners dies.
The Matrimonial Property Act 1976 was renamed the Property (Relationships) Act 1976 on 1 February 2002, and the principal Act was amended to extend the property division regime to the division of relationship property of couples who have lived in a de facto relationship when they separate or one of them dies. The Property (Relationships) Act 1976 defines a de facto relationship as a relationship between two people, whether a man and a woman, a man and a man, or a woman and a woman, who:
- are both 18 or over;
- live together as a couple; and
- are not married to, or in a civil union with, each other.
In determining whether two people live together as a couple all the circumstances of the relationship must be taken into account, including, where relevant:
- The duration of the relationship;
- The nature and extent of common residence;
- whether or not a sexual relationship exists;
- The degree of financial dependence or interdependence, and any arrangements for financial support, between the parties;
- the ownership, use, and acquisition of property;
- the degree of mutual commitment to a shared life;
- the care and support of children;
- the performance of household duties; and
- the reputation and public aspects of the relationships.
When the Court is deciding if two people live together as a couple no finding in respect of any such factors, or a combination of them, is necessary, and the Court may consider such factors and any other factors, and attach such weight to any matter as appropriate in the circumstances of the case.
The concept of a de facto relationship is an inherently vague concept which can encompass a wide variety of potential situations. In cases decided prior to the Property (Relationships) Act 1976 it was held that factors relevant but not decisive to determining whether two people are living together include whether the parties are living in the same house, how long they have lived in the same house, the presence of children and the sharing of household tasks, the extent of emotional support and companionship, the extent of communication between the parties, sexual relations, whether they have holidays together, and the manner in which they appear and hold themselves out in public.
A further phrase commonly associated with de facto relationships is whether the relationship is "in the nature of marriage". In terms of the Social Security Act 1964, it has been held that the Courts must look primarily to the financial aspects of the relationship. For a relationship in the nature of marriage to exist there must be an acceptance by one partner that he or she would support the other partner and any child of the relationship if that partner had no income of his or her own or to the extent that it was inadequate.
In New Zealand the Property (Relationships) Act 1976 provides legal rules about how property should be divided when a marriage, civil union, or de facto relationship ends, including where a relationship is ended by the death of spouse or partner.
The law applies to anyone who is married, has a civil union, or who lives in a de facto relationship. This includes same sex couples, so in New Zealand same sex couples have the same property rights as heterosexual couples.
What is a de facto relationship?
A de facto relationship is a relationship between two people who are both over 18 and who live together as a couple but are not married or in a civil union.
In modern life people have all sorts of different relationships, so it's sometimes not that easy to know whether a relationship is a de facto relationship. If a court is called on to decide whether a couple has been in a de facto relationship there are a numbers of factors the judge will consider things such as:
- Whether the couple share a home.
- What their financial arrangements are: Do they own property together? Have they mixed their finances?
- Whether they support and care for children together.
- How long the relationship has lasted;
- The degree of their mutual commitment to a shared life;
- The public aspects of their relationship- are they known to friends and family as a couple.
However, all relationships are unique so the existence or absence of any factor is not decisive. The court will decide how important any factor is in particular relationship. For example, today some de facto couples live in different cities, or even countries, for long periods of time due to their work commitments, but are still committed to shared a life.
How long must you have lived together to be covered by the Act?
Married couples and civil union partners are covered by the law from the date of their marriage or civil union. However, if their marriage or civil union has lasted less than three years, then their relationship is said to be of "short duration"" and different rules apply to how their property is divided.
Generally the Act only applies to de facto partners who have lived together for three years or more. It will sometimes apply to de facto partners who have lived together for less than three years where there is a child, or where one partner has made a substantial contribution to the relationship.
If you lived together in a de facto relationship before you were married or were civil unioned, then the period you lived together counts as if it were part or your marriage or civil union.
What property is shared at the end of a relationship?
Not all property is shared at the end of a relationship. There are two types of property under the Act: relationship property and separate property.
Usually, relationship property is shared and separate property is not.
Relationship property includes a number of categories of property, but for most people the most significant items are:
- Their family home -this is relationship property no matter when or how it was acquired.
- The family chattels -these are things such as the household furniture and family car. Like the family home these items are also relationship property no matter when or how they were acquired;
- Generally property acquired by either spouse or partner during the relationship is relationship including income from wages or salary;
- Property owned jointly or in equal shares with the other souse or partner like a joint bank account;
- Any part of superannuation scheme attributable to the relationship;
- Gifts or inheritances that are mixed with other relationship property a typical example is where an inheritance is used to pay the mortgage on the family home.
Essentially, separate property is anything that is not relationship property. In broad terms separate property this includes most property a person owned before a relationship will be separate property, property acquired out of separate property, the proceeds from the sale of separate property, any increases in the value of separate property and gifts and inheritances.
Are there ways separate property can become relationship property?
If separate property is kept separate from relationship property it will stay separate. However, there are a number of ways separate property can become relationship property. A couple of common examples are:
- Where a partner mixes their separate property with relationship property. This can happen where one partner uses an inheritance, or savings they had before their relationship, to help buy or renovate the family home, or to pay off pay the mortgage.
- Where the actions of one spouse or partner have helped increase the value of separate property. This can happen where a partner has helped to renovate a rental property which the other partner owned before their relationship began.
There are other ways as well.
While some people are happy to mix their separate property with relationship property for the benefit of their family, many people do so without realising that the consequence is that their separate property has become relationship property. If you want to protect your separate property you should make an agreement with your partner which will ensure your separate property is protected no matter how it is used.
How is relationship property shared?
If a relationship has lasted more than three years (whether it's a marriage, civil union, or de facto relationship) all relationship property is divided equally unless there are extraordinary circumstances which would make equal sharing repugnant to justice.
Different rules apply to marriages, civil unions and de facto relationships that have lasted less than three years.
Where a marriage or civil unions has lasted less than three years, the house and family chattels will be divided according to the contributions of each party if the house or family chattels were owned by one partner before the marriage or civil union began or they were received by gift or inherited during the marriage or civil union, or one partner has made a disproportionately greater contribution to the partnership. There is a presumption that all other relationship property should be shared equally unless one partner has made a clearly greater contribution that the other.
Most de facto relationships that have lasted less than three years are not covered by the Act at all. However, if there is a child, or one partner has made a substantial contribution to the de facto relationship, the court can order that relationship property is shared according to the contribution each partner made to the relationship.
Are there exceptions to equal sharing of relationship property?
Yes. There are exceptions to equally sharing. These exceptions include:
Where the court considers there are extraordinary circumstances which would make equal sharing repugnant to justice; or
Where the income and living standards of one partner are likely to be significantly higher at the end of the relationship than the other partner the court may award compensation. The court must consider a number of circumstances in deciding whether to make such an award.
Is it necessary to go to court to divide property?
No. In fact, the majority of couples do not end up going to court.
Most people are able to negotiate am settlement agreement between them about how their property will be divided with the help of a lawyer. It is essential to get legal advice about a settlement agreement. These agreements must be in writing and each partner must get independent legal advice about the agreement from a lawyer.
If no agreement can be reached then the partners can apply for the court to decide how their property should be shared.
Can you contract out of the Act?
Yes. You can contract out of the Act. You can make your own agreement about how you and your partner will own property and how it will be divided if your relationship ends. Contracting out agreements are now very common in New Zealand, but it is vital to get legal advice about the agreement. There are rules about how the agreement must be prepared for it to be binding including that the agreement must be in writing, signed by both partners and each partner must have independent legal advice before signing. Note that the courts have indicated that a 20 minute or so quick perusal and brief explanation from your independent solicitor would probably not constitute adequate advice. You should allow an hour or so for a full explanation of the situation and legal ramifications of your decision.