Relationship property law needs urgent reform – researchers

Why are children’s needs often sidelined when relationship property is divided? What happens when a person enters a second marriage with significant assets or an existing family home?

Those questions and more are on the table as legal experts from across the country meet at Parliament to discuss how to reform New Zealand’s Property (Relationships) Act, which many say is no longer fit for purpose.

University of Auckland Law School Professor Mark Henaghan is speaking at the Property (Relationships) Act 1976: Fifty Years On National Conference this Friday, 3 July.

He's been vocal about the need for reform.

He says under the Property (Relationships) Act, children’s needs are rarely at the centre of decision-making.

“The primary caregiver and children are often worse off post-separation. Primary caregivers, usually mothers, can face severe economic disadvantage as the family home - the main asset - is sold to satisfy both parties’ claims. For children, this disrupts their education, support networks and sense of identity.”

The Property (Relationships) Act conference, organised by University of Otago researchers and supported with funding from the Michael and Suzanne Borrin Foundation, also involves presentations from legal practitioners, including judges from all courts.

Director of Otago’s Children’s Issues Centre Professor Nicola Taylor and fellow Otago family law experts Professor Margaret Briggs and Professor Nicola Peart are leading the conference.

In 2002, the Property (Relationships) Act (the PRA) expanded on the original Matrimonial Property Act 1976, which applied only to married couples. Since then, Peart says it has worked well in many respects, particularly for couples whose first relationship has ended and who built up their assets during the relationship.

However, she says the Act doesn’t work well for second relationships or for couples who come into the relationship with significant assets.

Law Commission finds Act not fit for purpose

A Law Commission review of the Act from 2016-2019 found that it was no longer fit for purpose.

The Commission's 2019 report recommended repeal of the Act and the adoption of a new statute, which would apply only on separation. Property entitlements on death were considered in a separate review of succession law.

Henaghan says the Law Commission made strong recommendations, including changes to how family homes, economic disparity, trusts and asset disclosure are treated, to better reflect modern relationships and reduce lengthy disputes.

So far, the Government has not acted on the Commission’s 140 recommendations.

“In the current climate of uncertainty and the state of the economy, there appears to be little political will to act on the recommendations,” says Peart.

“We hope that by holding this conference in the Beehive, Parliament will be persuaded to take action. Separation and death affect people every day.”

The Honourable David Goddard KC, Chairperson of the Grants and Scholarships Committee at the Michael and Suzanne Borrin Foundation, says the conference provides an opportunity to reflect on the Act 50 years after its enactment and to discuss its future.

“By bringing together researchers, practitioners, and policymakers, this conference will help advance understanding and evidence-based reform of a law that has profound consequences for separating couples, families and children.”