New Zealand Law Society - Muted Government response on relationship property law reform

Muted Government response on relationship property law reform

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The Government has released its response to the Law Commission report, Review of the Property (Relationships) Act 1976 Te Arotake i te Property (Relationships) Act 1976.

The effect of the Government response appears to be not to implement almost all of the recommendations at present, but to wait until the Law Commission has carried out a review of succession law requested by the Minister of Justice on 12 July 2019.

Image of Law Commission

The wide-ranging Law Commission review of the Property (Relationships) Act 1976 was presented to Parliament on 23 July 2019. Its report made 140 recommendations, and concluded that while many of the existing provisions of the legislation are satisfactory, the Act as a whole is no longer fit for purpose.

The Act had not been comprehensively reviewed since its inception, and the Law Commission was asked to review it "to ensure that it is operating appropriately and effectively."

The Law Commission recommended that a new Relationship Property Act be introduced, and included recommendations for change across the whole relationship property regime.

The Law Commission also recommended that relationships ending on death should be subject to a separate review, within the context  of a broader review of succession law.

Law Commission thanked

The Government response thanks the Law Commission for its work. It acknowledges the Law Commission's assessment that the Act is no longer fit for purpose for 21st century New Zealand. However, it notes that relationships ending on death were not considered as part of the review.

The Government says it accepts the recommendations for a review of succession law.

"The Government response, in regard to the remaining Law Commission recommendations, is not to give effect to them at this time," it says.

"In the past, New Zealand modernised the law on separation but not for relationships that ended by death as, like now, succession law needed examining. The Government considers that a return to differing rules for relationships ending by separation and by death would be undesirable."

As a result, the Government says, it intends to consider the report's remaining recommendations after completion of the Law Commission's succession law review.

"This will ensure government consideration can be undertaken on the two topics concurrently," it says.

The Law Commission says it is in the process of determining the scope and timeframe of the review of succession law.

New Zealand Relationship Property Survey 2019

Participants in the New Zealand Relationship Property Survey 2019, which was carried out in mid-2019 by Grant Thornton and the New Zealand Law Society's Family Law Section, showed broad agreement with the Law Commission's recommendations in its review - although there was not unanimous support for change.

Giving the Family Court more power to deal with property held in a family trust was either supported (or strongly supported) by 74% of the 253 practitioners who participated in the survey.

Treatment of family home from 50/50 sharing to 50% of the increase in value was supported by 62% of respondents. There was similar support for the replacement of section 15/spousal maintenance with family income sharing arrangements, at 59% in favour.

This included agreement with a recommendation that if one partner owned the family home before the relationship, only the increase in value during the relationship should be shared.