The NZ Property (Relationships) Act (Act) contains various provisions for compensatory adjustments in the division of relationship property. These include situations when separate property becomes relationship property (s9A), economic disparity claims (s15), sustenance (s17) or diminution (s17A) of separate property, compensation for contributions made after separation (s18B) and compensation for property disposed of to trust (s44C).
The latest New Zealand Relationship Property Survey asked practitioners the subject areas they had instructed a forensic accountant since the start of 2020. The technical nature of the Act’s compensatory sections means forensic accountants are often instructed to prepare calculations and assessments in support. As such, we believe the findings are also likely to broadly indicate how family lawyers are making use of these sections when advising their clients.
The table below indicates the compensatory areas family lawyers instructed a forensic accountant in 2020 and 2021. Instructions by geographic region and lawyer experience are also summarised:
Compensatory areas of appointment by lawyers instructing a forensic accountant in last two years
The most common areas of expert appointment were s15 and s44C. Our research demonstrates the prevalence of s15 instructions reflects the increased use of that section following the decision in Scott v Williams. The volume of s44C appointments is likely to reflect the large number of family trusts in New Zealand.
The distribution of instructions by geographic region also provides an interesting insight – there is generally more use of these provisions in Auckland compared to the rest of the country, especially for s15 claims. We can only speculate as to the reason(s) for this uneven distribution. It may be that the demand is client-led, or it may reflect issue(s) on the lawyer’s side.
The distribution of instructions by practitioner experience also suggests that except for s15, practitioners with more experience appear to be making greater use of these provisions. Again, we speculate, but if one equates greater practitioner experience with higher client fees, an implication is that access to these more technical provisions for those on lower budgets is more limited.
Accordingly, based on this research it appears that NZ family lawyers may not yet be making full use of the compensatory provisions of the Act. Further research is required to identify why that might be the case and how it might be addressed.