Relationship Property Disputes
With approximately 8000 relationships ending in NZ in 2017 (Statistics NZ), it is hardly surprising that the Family Court is bogged down, and it is taking far too long for people to access the courts in order to resolve relationship property disputes.
As it should be, the Family Court’s priority is the protection of children and related issues. Resolution of financial disputes and division of assets is much further down the ranks. Of course, when relationships end it is common that there are assets, such as businesses or investments, that need to be taken into account and valued so they can be dealt with fairly. It is the resolution of such financial matters that allows people to move forward and regain some control over their lives, and until things are sorted out, their options are limited.
Normally it is hoped that the parties will work constructively together to reach a resolution and minimise costs. However, there are exceptions where one party suspects the other of hiding things and such distrust adds a whole extra level of time and cost blowout. Whether their suspicions are founded or not, this situation is never constructive in finding a solution, and very often we see disputes extended while parties clarify what information there is (and if it is correct). Reaching a resolution can take years – five years is not uncommon, and there is one current case that is still dragging on after 11 years! This process incurs significant legal costs, which are often markedly disproportionate to the value of the assets involved, and the time cost can mean people are penalised due to opportunities they miss out on. The solution
Section 38 of the Property (Relationships) Act
allows for the appointment of an investigator by the Court. This person is given the power to request information, assess it for reliability, and report to the Court as an independent party. The costs for the investigation are borne by the Crown initially, but the Court can order costs to be split or one party to pay if they are at fault.
In our experience, appointment of an investigator by the Court under Section 38 is unfortunately relatively rare. It appears that the Courts take a ‘hands off’ approach and only use Section 38 as a last resort. Bearing in mind that our Family Court is currently swamped, and it can take years for people to get the outcome they deserve, we consider that if used more frequently (but appropriately), Section 38 could reduce everyone’s costs and reduce the time the Courts currently spend on addressing parties’ distrust of each other. This could be achieved at little or no cost to the Crown and would lead to achieving what everyone wants – to sort everything out and bring matters to a close quickly and fairly.
We have a great deal of experience in this area and believe the use of Section 38 would be a very productive tool if used appropriately. In our opinion it would contribute significantly to the smooth and more efficient resolution of relationship property disputes. If you are involved in a matrimonial dispute where there is a business involved and you have questions or would like some help, please contact us:
(09) 522 7955, [email protected]
or fill in our online form