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My partner has used our joint money on drugs, gambling, and affairs.  Can I have more than 50% of the relationship property?

I totally understand why you would want to get more than 50%.  It is so unfair that he/she has spent your money in this way.  Surely you should get this back when you separate.  Unfortunately, New Zealand relationship property law has a no-fault system so generally, you would not be entitled to 50% more even when the ex has behaved terribly.  However, there are circumstances where unequal division has been considered appropriate.

Section 13 of the Property (Relationships) Act 1976 (the Act) provides for an exception to equal sharing where there are “exceptional circumstances”.  In 2016, a High Court case, Bowden v Bowden, drastically deviated from the equal sharing rule by giving 80% to the deceased husband’s estate and 20% to the surviving spouse based on “extraordinary circumstances”.

Section 13 of the Act is a notoriously stringent test and successful applications are rare but obviously not impossible as seen in Bowden v Bowden.  When deciding on whether to deviate from equal sharing, courts consider three things:

1. Are there extraordinary circumstances?
2. Do those extraordinary circumstances make equal sharing repugnant to justice?
3. What should the division be considering the parties’ contributions?

You might consider that spending joint money on drugs, gambling and affairs is an extraordinary circumstance that makes equal sharing repugnant to justice.  Yet, there are cases where these circumstances have not been considered extraordinary.

In Joseph v Johansen (1993) 10 FRNZ 302, Judge Richardson held that the test “is not to make an assessment against some kind of marriage norm, but rather to consider whether tested against the whole range of marriages the particular circumstances are to be characterised as ordinary.”  I guess spending money on drugs/affairs is normal?  I dunno, it doesn’t seem fair but the reality is, spending joint money on drugs/affairs, on its own is not considered extraordinary.

Under section 13 of the Act, successful cases can be categorized into five kinds:

1. Injection of capital 

For example, in one case the husband received a huge inheritance and then used that money to pay off the home loan on the family home.  Not long after, the relationship ended. The court considered that was an extraordinary circumstance that makes equal sharing repugnant to justice.  It would be so unfair if the inheritance was divided equally.  Keep in mind though, had the relationship ended years later, it would have had a completely different outcome so if you are wanting to keep your inheritance safe from relationship property, I recommend a Contracting Out Agreement (pre-nup).

2. Brevity of the relationship 

The longer a relationship lasts, the more difficult it is to find exceptional circumstances. In one case, over $200,000 was injected into the relationship property near the end of the relationship.  In this case the claim failed because of the relationship was 22 years.  However, in other cases where couples have been together for long periods, courts have given unequal division, so it really depends on the circumstances.

3. Gross disparity of contributions 

Contributions is a tricky one because we automatically think in terms of money.  I gave more money towards purchasing the house, therefore I have contributed more to the relationship property.  Courts don’t see contributions in that way.  Contributions also include non-financial contributions such as taking care of your spouse, children, the housework, etc.  In one case, the husband had purchased the family home prior to the relationship.  The wife didn’t work and the relationship was not much longer than 3 years.  Yet, the court gave equal division of the family home because she had contributed to the relationship by looking after him until he passed away.

4. Non-contributing partner 

In Bevan v Bevan [1977] 1 MPC 23 (SC) and in Johansen v Joseph (1992) 9 FRNZ 643, [1993] NZFLR 248 (High Court) the husband in both of these cases spent his income on alcohol and gambling and did not support their families in any way. They basically left their wives and children to defend for themselves.  The courts held that this was extraordinary circumstances making equal division repugnant.

I know, I said if your ex spent money on drugs, gambling, and affairs, you couldn’t more than 50% of the relationship property.  That is still true.  That on it’s own is not sufficient to meet the high threshold.  In these cases the husbands left their families and didn’t support them in any way.  They were left to defend for themselves after spending all their money.

In D v D (1997) 15 FRNZ 302, [1997] NZFLR 424 the wife’s mental illness required her to be in residential care for most of the couple’s 24-year marriage. The Court found that she contributed only 20% to the marriage partnership so they divided the relationship property accordingly by giving her gave her 20% and the husband 80%.  A bit sad for the wife, I feel for anyone who has had to go into residential care but if I put myself in the husband’s shoes and it would be unfair if he didn’t get 80%.

5. Negative contributions 

Contributing negatively to a relationship such as deceit and broken promises can amount to extraordinary circumstances.  In one case, the forgery of a wife’s signature on loan documents was sufficient for the wife to successfully obtain a greater than 50% share.

The test for “repugnant to justice” is just as notoriously stringent as the test for extraordinary circumstances.  Many cases fail because courts are not satisfied that equal sharing would be repugnant to justice, despite there being extraordinary circumstances.  Courts look at the overall circumstances so using joint money in an unfair manner is not sufficient on its own for a court to hold unequal sharing.  There would have to be more such as disparity of contributions and/or negative contributions.  However, if successful, the courts will quantify the parties’ contributions to the relationship to reach a just division.

One way to ensure that there is fair division at the end of a relationship, is to have a Contracting Out Agreement that covers all your concerns.  This will not only protect your assets but make life easier because the agreement will have in place what is considered your separate property and how to divide the relationship property.  This avoids you having to hire a lawyer to negotiate a settlement because an agreement was made prior to your relationship beginning. 

If you want to know more, feel free to call me on 07 839 7632 or email me at hayley@ghslaw.co.nz