Supreme Court departs from 50/50 rule in lawyer’s divorce case

In a win for women who stay home, the Supreme Court has ruled in favour of a woman known only as Ms Scott, in a landmark relationship property case.

The five judges of the top court were asked how to divide property between Mr Williams, a partner at a law firm, and Ms Scott, who also trained as a lawyer. The names used in the decision are not the parties’ real names.

Ms Scott had spent much of her married life caring for the couple’s two children and supporting her husband at home and at work doing accounting services and legal work.

During their marriage the pair had built up a substantial pool of assets including a Remuera property, which was subdivided into two, three commercial properties in New Lynn, a half share in another commercial property, a beach house in Omaha, a half share in a Fiji property and another property in Auckland, and Mr Williams’ interest in the law firm.

By the time the case had reached the Supreme Court the remaining outstanding issues were an order over the Remuera homes, the value of his business, and a lump sum payment under section 15 of the Property (Relationships) Ac.

While there is a presumption under the present law that, when couples break up, assets will be split 50/50, s15 of the act can award lump sum payments or the transfer of property to redress economic disparity.

This can happen when one person in the relationship builds up their career while the other stays home and supports the family.

Applying s15, the Family Court had ordered Mr Williams to pay Ms Scott $850,000 while the High Court changed the order to $280,000. The Court of Appeal had revised this to $470,000.

In the top court, a majority of Justice Susan Glazebrook, Justice Terence Arnold and Justice Mark O’Regan said the order should be $520,000. Chief Justice Sian Elias thought the question should go back to the Family Court while Justice William Young thought that the order should be $188,000.

On the Remuera properties issue, all five judges were in agreement that the Family Court order that Ms Scott keep the Remuera properties should remain. A majority of the court also agreed with the lower courts’ approach that the valuation of the legal practice should be restored.

The ruling comes as the Law Commission continues to consult on whether the current law achieves a just division of property when a relationship ends.

Public consultation is open until February 2018, with a final report to the government due in November 2018.