Proposed changes to the PRA

In this article, Jeremy shares his views on the proposed changes to the Property (Relationships) Act 1976.

  1. Why do our divorce laws need to change and how have they adversely affected married couples and their children?

It’s been more than 40 years since New Zealand’s divorce laws were first set out and 18 years since those laws were last amended substantially. Our society has changed since then - we now tend to live longer, our partnerships are shorter, we form them later in life and many of us have more than one significant partnership during our lifetime. This means often wealth is brought into relationships, rather than partners marrying early and creating wealth while they are together. The law needs to reflect our changing way of life.The current laws which mandate a 50:50 split of assets in a separation are just not fair in many situations. The law also doesn’t provide a simple remedy for the partner who is economically disadvantaged after a separation.Our divorce laws also need to support children’s needs better. The New Zealand Family Court has a child-centred approach for care of children. However, this traditionally has not been a focus for relationship property matters. Children need to be considered from a financial perspective; particularly when one party takes primary care of the children or when finances are an issue.Overall, these reforms seek to create a more level playing field for the financial disadvantaged party.

  1. To what extent will these changes be universally accepted, or do you anticipate any resistance to them, and if so from whom?

I think most New Zealanders will agree that the law changes will result in a fairer split of property and they will welcome the greater priority placed on children in a separation.The FISA model of income sharing won’t be welcomed by the party with the higher income as they would be better off financially under the existing laws. Under the current law, the onus is on the lesser income party to make a discretionary section s15 claim.Generally, section 15 is accepted only when there are children of the relationship. FISA creates a statutory formula like child support that would offend many people. It is likely to result in significant litigation and is controversial.

  1. Why has it taken us so long to address some of these issues and how long will it be before the changes are implemented?

The Family Court has not seen these reforms as a priority given that it involves property and not children. There has been no political motivation to address property reforms earlier.Society and wealth have changed significantly in the past 20 years.Relationships are much shorter and often not for life. People are entering into relationships in their 30’s or 40’s when they have significantly more wealth largely due to the property boom.The time it takes for the changes to be implemented depends on parliament. The report has been tabled in parliament and the government will now consider the recommendations.

  1. What are your views on the Law Commission's proposals regarding (a) property division, (b) family income sharing arrangements, (c) trusts, (d) children's best interests?

Overall, I believe the proposals will result in a fairer separation for everyone affected by a separation.

  • The removal of the default 50:50 split and enabling people to retain the wealth they brought into the relationship would result in a fairer separation.
  • I think the FISA model would work well to support the disadvantaged party. The current law allowed for spousal maintenance and S15 economic disparity claims. However, awards under Section 15 are becoming increasingly unpredictable and conservative. Further, the cost of applying for one is so high, an application is only worthwhile when there is a significant relationship property pool. This means the current laws are not able to benefit the people most in need.
  • The proposals regarding trusts will provide more effective remedies where trusts are concerned. At the moment, it is difficult and costly to make a claim on trust property. Often it is the disadvantaged person who is affected negatively by the existence of the trust and they are unable to pay large costs for court proceedings.
  • I’m pleased to see that children’s best interests are being looked after in the proposed law changes. Giving the primary caregiver a default right to stay in the family home in the period immediately following separation is very important for the children. It will provide consistency, allowing them to stay at their existing school, to be around friends and in a familiar environment.
  1. Are there any areas not covered by the Commission's proposals that you would like to see addressed?
  • A more streamlined process in the family court, similar to the High court process.
  • The court fix a timetable at the very first case conference. In the High Court, a hearing date and a timetable is set at the very first case conference. At the moment, files are dealt with very randomly in the Family Court. It is very difficult to get a final fixture date and there are huge delays. These delays are due to lawyers, clients and the lack of court resources.
  • For one or two Judges, be allocated a file. This has been trialed, but it has not been working with the shortage of judges.
  • Tougher penalties when Court directions are not complied with. For instance, if relevant documents have been requested and are not provided within a set period of time, I would like to see real and not nominal costs for the offending party.
  • A regular emergency list or call over of files that need action. In the criminal jurisdiction, you can bring your matter on earlier, before a Judge, because of the circumstances of that matter.
  • I would like to see the government take steps to make the law more accessible and understandable. This can be done in the form of guidelines. People need to know about the process and the options for resolution. Guidelines should also be in other languages. This could be with YouTube videos or podcasts. We are a multicultural society and the law needs to be more accessible to everyone. Often couples are able to determine relationship property matters without going to a lawyer.

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