Introduction
Property division in the wake of relationship breakdowns can be challenging, just see Little v. Little [2020] NZFC 6638. This case highlights the consequences of adopting fixed positions in relationship property and the risk of giving the court and a judge control of the process and outcome.
Background
After 15 years together, Janet and Colin Little separated in 2015. They signed a contracting out agreement in 2005, which classified the family home as Colin’s separate property. No doubt to Colin's surprise, the court set aside this agreement, deeming the home as relationship property. The court found that Janet did not fully understand the implications of the agreement, and it was signed under circumstances that made it unfair, lacking informed consent and legal fairness.
Key Issues
1. Equal Division of Assets: Following the court's ruling about the flawed contracting out agreement, the couple eventually agreed to a 50:50 division of most assets, including the family home valued at $690,000. However, disputes over smaller assets and debts persisted.
2. Occupation Rent and Economic Disparity: Janet sought compensation for Colin’s exclusive occupation of the family home post-separation and a lump sum for economic disparity due to her role as primary caregiver.
3. Property Deterioration: Janet argued that Colin’s neglect led to a decline in the home’s value, further complicating the equitable division.
Court’s Decision
The court awarded Janet $52,500 as compensation for Colin’s sole occupation of the home and an additional $20,000 for property deterioration. The judge emphasised the need for fairness, acknowledging Janet’s significant post-separation contributions and the economic disadvantages she faced.
Conclusion
This case underscores the importance of flexibility in resolving property disputes. Had negotiation or mediation been pursued, both parties had the chance to avoid many thousands of dollars in legal costs, not to mention the intense emotional strain. As an observer, it looks like Colin sought to enforce what he saw as his legal rights but was unable to convince the family courts that this was fair. Asking the court to make a final decision that clearly disadvantages one party to a marriage is risky business. Colin now knows this. The lesson, avoid court and reach toward fairness.
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