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* Sian Elias

Separate Property – Rose v Rose
I should have know n bet t er t han t o give in t o t he Principal Judge’ s blandishment s t o agree t o speak t o you on t he subject of w hat I persist in t hinking of as “ mat rimonial propert y” . In t he f irst place, one of t he great successes of t he Family Court has been t hat appellat e court s rarely see relat ionship propert y cases. 1 The Supreme
Court , in t he seven years of it s exist ence, has seen only one w here division of asset s w as direct ly in issue. 2 Perhaps t hat is just as w ell.
The comment at or on my paper, Prof essor Peart , has said of Rose v
Rose t hat t en judges st ruggled “ in vain” t o make sense of t he legislat ion. 3 Since half of t hose w ere judges of t he Supreme Court , it does not say much f or our ef f ort . Now Prof essor Peart is very kind and (w it h Margaret Briggs) says t hat is because t he Act is cont radict ory and lacking in coherent principle. 4 But , alt hough I have some quest ions about t he legislat ion myself , I am not quit e as severe on t he Act . So if t he Supreme Court didn’ t manage t o convince in
Rose v Rose, I t hink w e should accept f ault .
I am, how ever, conscious t hat I am out of my dept h in t his t opic. And I know t hat I am addressing expert s. At t he out set , I w ish t o acknow ledge t he w ork you do as Family Court judges on a daily basis in applying t his



The Rt Hon Dame Sian Elias, Chief Just ice of New Zealand
The Supreme Court gave no subst ant ive judgments on relat ionship propert y in
2008, handed dow n t w o judgments in 2009 (including Rose v Rose), delivered none in 201 and has delivered none so f ar in 2011. The Court of Appeal has been only slight ly busier: alt hough it handed dow n no subst ant ive judgment s on relat ionship propert y in 2008, it delivered f our in 2009, one in 2010, and has handed dow n t hree so f ar t his year. The numbers in t he High Court are higher 18 subst ant ive judgment s on relat ionship propert y in 2008, 27 in 2009, 33 in
2010 and 9 so f ar in 2011 - but t hese numbers remain small compared t o t he
High Court ' s w orkload in ot her areas of law . These numbers do not include judgment s dealing w it h applicat ions f or leave or recall, judgment s on cost s or evidence, and judgment s t hat t ouch only brief ly on t he Propert y (Relat ionships)
Act 1976.
Rose v Rose [2009] NZSC 46, [2009] 3 NZLR 1.
This w as not ed in an art icle joint ly w ritt en by Peart and Margaret Briggs:
Margaret Briggs and Nicola Peart “ Sharing t he Increase in Value of Separat e
Propert y under t he Propert y (Relat ionships) Act 1976:
A Concept ual
Conundrum” (2010) 24 NZULR 1 at 2–3.
Ibid, at 3.


import ant social legislat ion conscient iously t o t he circumst ances of
New Zealand couples, of t en in t rying circumst ances.
Yours is import ant service t o our communit y. And it is dif f icult service. And I express my admirat ion t o you as a bench.
The second reason I should not have not accept ed t his invit at ion is t hat relat ionship propert y is a subject I have alw ays approached w it h dread, as a pract it ioner and as a judge. The cases are, in my experience, invariably unt idy . The ugly f act s, w hich almost alw ays emerge chaot ically , alw ays seem t o slay t he beaut if ul t heories about no f ault , clean break, equal t reat ment , and rules-based ent it lement .
Also, t hese cases require t he judge t o pick t hrough t he f aded det ails of a f ailed relat ionship. There are no short cut s. So as an appellat e judge I alw ays approach relat ionship propert y cases w it h real reluct ance. Very of t en t he case is a moveable f east , bearing lit t le resemblance in t he Court of Appeal or Supreme Court t o t he w ay it w as present ed in t he Family Court or on f irst appeal. Rose v Rose, t he case I have been asked t o t alk about t oday, is it self an illust rat ion.
Rose v Rose principally concerned ss 9A(1) and (2) of t he Propert y
(Relat ionships) Act 1976. For our overseas guest s I need t o explain t hese provisions. They are concerned w it h gains or increases in value t o t he separat e propert y of one of t he part ies during t he course of t he relat ionship. The general rule is t hat such gains or increases in value are separat e propert y in w hich t he non-ow ning spouse has no int erest .
In t w o circumst ances, t hose provided by t he dif f erent subsect ions, t he non-ow ning spouse get s t o share in t he gain. Under s 9A(1) t he increase in value becomes relat ionship propert y, subject t o t he st rong equal sharing presumpt ion of t he legislat ion 5 if t he increase in value is at t ribut able – in w hole or in part – t o t he applicat ion of relat ionship propert y. If t he non-ow ning part ner has cont ribut ed t o t he gain, direct ly or indirect ly, by his or her act ions during t he relat ionship, t hen t he increase in value is divided bet w een t he part ners according t o t heir cont ribut ion under s 9A(2). These provisions f or sharing t heref ore have very dif f erent consequences, and t he applicat ion of each depends on demonst rat ion of cause and ef f ect bet w een applicat ion of relat ionship propert y or act ions of t he non-ow ning spouse and t he gain received. Alt hough I am principally going t o speak of t hese t w o provisions, I also w ant t o t ouch on t w o ot her provisions of t he Act , ss 15 and 1 5A, by w hich t he Court can direct compensat ory payment s f rom relat ionship propert y (and somet imes f rom separat e propert y) t o a part y w hose earning capacit y has been adversely af f ect ed by t he division of f unct ions w it hin t he marriage. 5

Propert y (Relat ionships) Act 1976, s 11.


In Rose v Rose t he claim by t he w if e t o share in t he increase in value of separat e propert y w as put f orw ard in t he Family Court in respect of t he t w o f arm propert ies in issue on t he basis of s 9A, w it hout dif f erent iat ion bet w een s 9A(1) or s 9A(2). 6 In t he appellat e court s, t he t w o propert ies w ere dealt w it h under t he separat e provisions, alt hough bot h w ere cases w here t here w as applicat ion of relat ionship propert y t o t he separat e propert y and so could have been dealt w it h under s 9A(1). The reason one w as dealt w it h under s 9A(2), relying on t he act ions of t he non-ow ning spouse, is because t he cont ribut ions had cont inued f or longer t han t he applicat ion of relat ionship propert y and most of t he gain in value occurred bef ore t he applicat ion of t he relat ionship propert y . And I w ant t o come on t o explain t hat t he choice t o rely on s 9A(2) w as driven not by t he t ext of t he st at ut e, but by judicial int erpret at ion of it , w hich perhaps should be reassessed.
Part of w hat I w ant t o say t oday is t o express some doubt about w het her w e have been t oo def erent ial t o precedent s developed under dif f erent legislat ive provisions in t his area of law . I w ant t o query w het her in social legislat ion such as t his it is appropriat e f or court s, part icularly appellat e court s, t o ref ine t oo much on t he t erms of t he st at ut e rat her t han simply applying it t o t he circumst ances as t hey arise, and against t he purposes and principles of t he Act . (I have t o acknow ledge culpabilit y in t his respect myself ). This is an area w here appellat e court s consciously set out in t he 198 0s t o provide guidance. That may have det ract ed f rom a f resh look in r esponse t o t he 2001 amendment s. 7
What is of course import ant t o keep in mind is t hat t he cases t hat require resolut ion t hrough t he court s are t he except ion.
presumpt ion of equal sharing and t he w ide scope of relat ionship propert y in t he Act are concept s relat ively clear t o underst and and usually are easily applied in t he vast majorit y of cases, w here t he asset s of t he part ies are all relat ionship propert y . The legislat ion should be account ed a success. Bef ore being a lit t le more crit ical, it is import ant t o remember how f ar w e have come, and how f ast . And t he social revolut ion t hat has been accomplished bot h by t he 1976
Act , and it s 2001 amendment s.


Rose v Rose FC Blenheim FAM-2003-006-000229, 6 July 2005.
Propert y (Relat ionships) Amendment Act 2001. The amendment s came int o f orce on 1 February 2002.


A little history
The year I st art ed legal pract ice, t he Court of Appeal decided E v E. 8
Ot her generat ions of young law yers have had ot her causes. For young w omen pract it ioners, t he injust ice of mat rimonial propert y division w as t he burning issue. It is seems incomprehensible t oday t hat Nort h P, asked t o invoke t he w ide discret ion under t he 1963 Act 9 w rot e in his judgment of t he “ w if e w ho may be able t o go int o t he arms of her lover w ell equipped w it h w orldly possessions” . 10
Our heroes t hen w ere t he f ew judges w ho w ere not w illing t o look t o cont ribut ion t o each of t he asset s in t he relat ionship (t he absurdit y of assessing cont ribut ion t o “ t he sew ing machine” , point ed out by Wild
CJ in E v E)11 and w ho considered t hat all f orms of cont ribut ion t o t he marriage w ere of equal import ance (as Woodhouse J w as prepared t o do in Haldane v Haldane). 12
I part icipat ed in ef f ort s t o get t he 197 6 Ac t passed. It w as publicly opposed by a number of senior judges. The ref orm w as necessit at ed by t he ent renched view s of many of t he judges, w hich clearly lagged behind communit y at t it udes. And, as a result , it w as an import ant policy of t he 1976 Act t hat it set up a rule-based syst em rat her t han a syst em t hat relied on w ide discret ion for judges t o come t o a just division of propert y in t he circumst ances of t he case.
The 1976 Act w as of necessit y a t ransitional measure. First , it w as daring social legislat ion f or w hich t here w as suf f icient support f or passage of t he Act – but only cont aining ref orm up t o a point . The separat e propert y provisions of t he Act w ere crit ical t o it s accept ance. It w as a beachhead f rom w hich more t horoughgoing ref orm w ould be undert aken lat er. Widow s and f arms (t he f amily f arm being t he paradigm of separat e propert y) w ere t oo hard in 1976.
And t he presumpt ion of equal sharing w as w eaker in relat ion t o mat rimonial asset s ot her t han t he f amily home and chat t els.
addit ion t o t he part ial nat ure of t he ref orm in it s ow n t erms, it occurred at a t ime t hat New Zealand societ y w as undergoing great change. Those changes t oo meant t hat t he ref orm accomplished in
197 6 w as overt aken by ot her social f orces and it s adapt at ion became inevit able w it hin a decade. The increasing pref erence f or de f act o unions rat her t han marriage, and t he rise of human right s consciousness (w it h proscript ion of discriminat ory t reat ment )

E v E [1971] NZLR 859 (CA).
The Mat rimonial Propert y Act 1963.
Ibid, at 885.
Ibid, at 865.
Haldane v Haldane [1975] 1 NZLR 672 (CA) at 685–686.


necessit at ed f urt her ref orm. Alt hough legislat ive ref orm w as in t he end a long t ime coming, t he amendment s not being enact ed unt il
200 1, in t he meant ime t he court s developed t he concept s in t he legislat ion and looked t o ot her legal concept s t o achieve comparable out comes f or couples out side marriage and (using t he 1963 Act ) t o deal w it h mat rimonial propert y af t er t he deat h of one of t he spouses.
I do not w ant t o minimise t he achievement s of t he Court of Appeal in t he early years of t he 19 76 Act in set t ling it s meaning and applicat ion. But t he experience has been more mixed t han is alw ays acknow ledged. And in some respect s t he decisions of t he 198 0s cast a shadow over t he Act as amended in 200 1 t hat may not alw ays be helpf ul. The def erence accorded t o t hat very f ine Court may have proved at t imes disabling. I w ill illust rat e t his by ref erence t o Rose v
Rose. But my point here is t hat in t he case of social legislat ion w hich has t o keep pace w it h changing condit ions and expect at ions, part icularly one t hat operat es as a code, 13 I w onder about t oo much venerat ion f or precedent . A similar point w as made by Cooke P in respect of t he New Zealand Bill of Right s Act 19 90 w hen he said t hat w it h respect t o such legislat ion precedent could not be al low ed t o be a st rait jacket . 14
The principles est ablished by Parliament in legislat ion such as t his come t o be applied in changing condit ions. It w ould be unw ise t o be t oo def init e about t he ends t hey dict at e. And perhaps w e need t o query w het her court s have approached legislat ive amendment s w it h a mind-set derived f rom precedent s adopt ed under earlier legislat ion w hich need reassessment . I know t here is respect able academic support f or t he view t hat t he legislat ion now in f orce is conf used and inconsist ent in part . But in preparing f or t his address, I have been lef t w ondering w het her t he court s – including t he Supreme Court in Rose v Rose – have t ried hard enough t o make t he Act w ork as a w hole.
Making the Act work
I w onder w hether in future cases it may be necessary to w ork a little harder at trying to make sense of the Act as a w hole than w as necessary in Rose v Rose. In some respects, that w as an easy case of contribution because the w ife had earned income w hich w as important to the retention of the separate farm properties and w as significant in its ow n terms. 15 In other cases w here contribution is less readily quantifiable, it


Propert y (Relat ionships) Act 1976, s 4.
See Ministry of Transport v Noort [1992] 3 NZLR 260 (CA) at 270; Simpson v
Att orney-General [1994] 3 NZLR 667 (CA) [Baigent ' s case] at 676.
Rose v Rose, above n 2, at [44] and [50].


may be necessary to look further to the scheme and overall purpose of the Act if the end of just division is t o be met in a particular case.
The purposes of the Act contained in s 1M are three:
(a) to reform the law relating to the property of married couples and civil union couples and of couples w ho live together in a de facto relationship:
(b) to recognise the equal contribution of husband and w ife to the marriage partnership, of civil union partners to the civil union, and of de facto partners to the de facto relationship partnership:
(c) to provide for a just division of the relationship property betw een the spouses or partners w hen their relationship ends by separation or death, and in certain other circumstances, w hile taking account of the interests of any children of the marriage or children of the civil union or children of the de f acto relationship.

The “ principles” provided for in s 1N are “ to guide the achievement of the purpose of this Act” :
(a) the principle that men and w omen have equal status, and their equality should be maintained and enhanced:
(b) the principle that all forms of contribution to the marriage partnership, civil union, or the de facto relationship partnership, are treated as equal:
(c) the principle that a just division of relationship property has regard to the economic advantages or disadvantages to the spouses or partners arising from their marriage, civil union, or de facto relationship or from the ending of their marriage, civil union, or de facto relationship:
(d) the principle that questions arising under t his Act about relationship property should be resolved as inexpensively, simply, and speedily as is consistent w ith justice.

In M v B16 the Court of Appeal w as cautious about s 1M and 1N.
Robertson J did not accept that the purposes and principles in s 1N and s 1M provided the court w ith “ a generalised mandate w hich can avoid or obscure the structural framew ork w hich Parliament adopted” . 17 He considered that “ [i]f a court, at the end of each relationship property case, is going to enter into a topping-up or discounting exercise in the name of being just, then parties and their advisers w ill not have

M v B [2006] 3 NZLR 660 (CA).
Ibid, at [33].


confidence as to the outcome of litigation” . 18 I have some doubts about how far this approach is available after the 2001 amendments, doubts shared by Hammond J in M v B19 although there are statements supportive of the Robertson J view in Rose v Rose. 20
The Act’s internal consistency
Subsections 9A(1) and (2) have been criticised as inconsistent w ith the philosophy of the 1976 Act in important respects. 21 In particular, it is suggested they undermine the concept of separate property, and reintroduce a role for w ide discretion in respect of division of property under s 9A(2) (contrary to the rule-based approach consciously brought in w ith the 1976 Act). 22 It is also said that the courts are left w ithout effective direction in the exercise of that discretion because, unlike the division of other property, s 9A(2) is concerned w ith division according to contribution not to the partnership but to the particular asset. 23 This w as a criticism voiced by the Supreme Court in Rose v Rose: 24
It [s 9A(2)] gives no guidance about how this task [evaluating contributions to the increase in value] is to be performed but a significantly different approach from that under subs (1) is plainly required. The principles found in s 1N ... have little or no application under s 9A(2)(b). Nor does s 18 w hich deals w ith contributions to the marriage, rather than contributions to an increase in value of a particular piece of separate property. The circumstances in w hich that increase occurred require careful assessment but arithmetical exactitude cannot be achieved and in the end the evaluation of the relative contributions is likely to be a matter of general impression.

Briggs and Peart also criticise the disparity in result betw een s 9A(1) and s (2): if the gain is attributable in part to the application of separate property, the gain becomes relationship property and is shared equally; if the gain is attributable in part to the actions of the non-ow ning spouse, the gain is divided according to contribution. 25
These criticisms may perhaps be overstated.
The policy in the separation of outcome betw een ss 9A(1) and (2) seems to be that the application of relationship property causative of increase in value is

Ibid, at [36].
Ibid, at [227].
See, f or example, Rose v Rose, above n 2, at [46].
Briggs and Peart , above n 3, at 18–19.
Ibid, at 18.
Rose v Rose, above n 2, at [46].
Briggs and Peart , above n 3, at 14–15.


treated as a form of intermingling (similar to that provided for in s 10).
The policy in respect of direct and indirect contributions (a vexed and much litigated question under the original s 9(3) in the 1976 Act, w hich the courts had been reluctant to apply especially in relation to family farms unless the contribution w as tangible and measurable in money or money’s w orth), w as to recognise indirect contributions, in reform of the law . I think it is important to note that s 9A(2) is not a discretionary remedy. The Act requires division according to contribution to value; a judgment, not a discretion. This last is a different concept than is applied in the Act as a w hole, w hich looks to contribution to the domestic partnership and it is difficult to know how the contribution provisions relating to the relationship are to be used in this context . And it is true that there is a high risk that the “ hypnotic influence of money” w ill skew the assessment of contribution w ithout care. 26 But the legislative tools are there. And if the Act cannot be made to w ork in the spirit intended, the fault w ill be that of the judges.
A more coherent approach to causation in the relationship property context A part icular dif f icult y w it h t he provisions dealing w it h t he gain in value of separat e propert y in a relat ionship has been causat ion.
Family f arms and businesses have alw ays caused part icular dif f icult y in relat ion t o issues of causat ion, bot h in t he applicat ion of t he f ormer s 9(3) and in t he applicat ion of it s successor provision, s 9A (t he sect ion in issue in Rose v Rose). The cases on s 9(3) required proof of direct causality betw een the non-ow ner spouse’ s actions or application of matrimonial property and the increase in value.
That link is maintained in application of s 9A.
In Hartley v Hartley, Somers J expressed the view (not explicitly joined in by other members of the Court and arguably obiter) that “ attributable” meant “ ow ing to or produced by” so that increase in value before the application of matrimonial property (or spousal contribution) w as excluded from the gain available for division. 27 The continued application of Hartley w as assumed in Rose v Rose28 and seems to have been the reason w hy the w ife’ s claim in respect of Cloverlea, the property w ith w hich she had the longest association, w as put forw ard on the basis of contribution, rather than the application of relationship property (w hich occurred at a later stage). Whether s 9A is limited to increases in value after contribution or application of separate property may require further


Reid v Reid [1979] 1 NZLR 572 (CA) at 581 per Woodhouse J.
Hart ley v Hart ley [1986] 2 NZLR 64 (CA) at 75.
See Rose v Rose, above n 2, at [29].


consideration in a case w here it arises on the contention of the parties, a matter I discuss further shortly.
Under the former s 9(3) indirect actions of the non-ow ner spouse w ere treated as insufficient to establish a causal link w ith increase in value.
Thus, in Palmer v Palmer, 29 the w ife’ s domestic contribution w as held too indirect to be causative of increase in value of the shares in the husband’ s company. In Walsh v Walsh, 30 Cross v Cross31 and French v
French32 it w as held that the non-ow ning spouse had not show n that her w ork on the farm had increased its value. Cooke P in French v French said that the w ife’ s w ork w as “ no more creative than that of a farm labourer” and that her efforts had not “ significantly enhanced the assets” . 33 The Court of Appeal w as more comfortable w ith treating the farm w ork of a w ife as “ sustenance” of separate property under s 17, paving the w ay for the payment of compensation as a matter of discretion, instead of treating the increase as matrimonial property under s 9(3) (in respect of w hich there w ould be equal sharing under s 15 unless the ow ner’ s contribution to the marriage partnership w as clearly greater). 34
In 1997 the Court of Appeal in Hight v Hight 35 adhered to the causative approach taken in French v French, over the dissent of Thomas J, saying that the w ife’ s contribution w ould have to take the form of something tangible, such as construction of new improvements, to justify application of s 9(3). Although in Rose v Rose the Supreme Court continued to require the non-ow ning spouse to prove that the increase in value w as attributable to his or her actions, it at least departed from the standard of “ clear and appreciable” contribution used in earlier cases such as Walsh and Cross and allow ed that any impact beyond the trivial w ould be sufficient.
The 2001 amendments meant that indirect contributions w ere required to be taken into account, pensioning off the notion that contribution had to be tangible.
In Rose v Rose it w as recognised that the new subsection 9A(2) w as intended to overcome the problem that the actions of the non-ow ner spouse could be considered too remote from any increase in the value of separate property w here there w as no direct physical connection betw een the act ivity and the increase in value: 36

Palmer v Palmer (1982) 5 MPC 116 (HC).
Walsh v Walsh (1984) 3 NZFLR 23 (CA).
Cross v Cross (1984) 2 NZFLR 433 (CA).
French v French [1988] 1 NZLR 62 (CA).
Ibid, at 66.
Hight v Hight [1997] 3 NZLR 396 (CA) at 408–409.
Rose v Rose, above n 2, at [44].

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It follow s that an increase in value is divisible betw een the parties unless it can truly be said that it has not derived from the conduc t of the non-ow ning spouse in any material w ay. That may be the situation in the case of a purely passive investment but, w ith an asset like a farm or other business in w hich the ow ning spouse w orks, it w ill often be likely that some conduct of the non-ow ning spouse w ill have had some direct or indirect influence on any increase in value ... By her attentions to the household and the children and by defraying a significant proportion of the family’ s domestic expenses by means of her earnings from employment,
Mrs Rose enabled her husband to spend very long hours on the affairs of the partnership and allow ed him to moderate his draw ings so that more labour and more money ... w as available to the partners ... If it had not been for her financial contribution produced by w orking off the farm, it is very likely all of Cloverlea w ould have been sold and the opportunity of later developing the vineyard w ould not have existed.

The Supreme Court agreed w ith the Court of Appeal’ s division of the increase in value in respect of Cloverlea (40% to the w ife and 60% to the husband) because of the husband’ s contributions in the acquisition of the land (and allow ing him credit for the inflation and the general increase in the value of viticulture land over the period of the w ife’ s contributions). 37
Briggs and Peart have questioned the Supreme Court’ s adoption of a low , and largely impressionistic, threshold for acceptance of contribution to value.
They suggest that the Court effectively starts w ith a presumption of contribution, at least in the case of the sort of division of functions w ithin the Rose marriage, if gains have been more than w ould be expected from a passive investment. It is said that in Rose v Rose the Supreme Court presumes that an increase in value is relationship property “ unless it can truly be said that it has not derived from the conduct of the non-ow ning spouse in any material w ay” , as in the case of a purely passive investment. 38 It is suggested that this appears to remove the former onus on the non-ow ner to prove actions and their direct or indirect causal connection to the increase in value and puts the boot “ on the other foot” : 39
It w ill be up to the ow ner to provide evidence that the increase in value is unrelated to the non-ow ner’ s actions, for example by show ing that the increase is solely or almost entirely due to inflation or market forces.


Rose v Rose, above n 2, at [51].
Briggs and Peart , above n 3, at 16, cit ing f rom Rose v Rose, above n 2, at [44].

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It is the case that in Rose v Rose the impression is given that the contribution of the ow ning spouse to gain above that w hich can be expected of a passive investment must be demonstrated. Without demonstrated additional contribution, it may not be difficult to infer that the non-ow ning spouse’ s contribution w hich has freed up effort that w ould otherw ise be gained for the partnership is equal. I do not see this as a legal presumption. But I do think it is an available inference on the facts, at least in the case of the joint efforts in the marriage undertaken by Mr and Mrs Rose. Nor do I think assessing the facts in this w ay is to undermine the Act’ s policy in separate property. It recognises that, w ithin this partnership, the opportunity for gain from separate property w as an opportunity created by the division of responsibilities and the management of expectations betw een the partners, as w ill very often be the case. That seems to me to be an available view of the facts based on common experience.
That is not to say there is not help to be obtained from the policies and scheme of the Act in considering w hat may amount to an indirect contribution and how it may cause an increase in value of separate property. The insistence in the 2001 reforms that indirect contribution may contribute to the value of separate assets requires a more contextual reading of s 9A(2), w hich may be critical in a case w here the non-ow ning partner cannot point to the financial contribution made by
Mrs Rose.
In Rose v Rose, the Supreme Court, adhering to the view that causal connection w ith increase in value had to be established, suggested that little help in the application of s 9A(2) w as to be obtained from the s 18 identification of “ contribution” to the partnership and, given that division w as to be in accordance w ith contribution to the increase in value, from the purpose and principles described in ss 1M and 1N, introduced into the Act in 2001. 40 It may be that in Rose v Rose some of the statements may be too definite on this point.
It seems to me that “ indirect” contribution to value must be assessed in the context of the Act as a w hole and that ss 1M and 1N and s 18 do bear on w hat is indirect contribution, although it must be one capable of adding value to separate property. It seems appropriate to look to the forms of contribution to the partnership identified in s 18 as guides for the manner in w hich indirect contribution may be made.
Thus, the forgoing of a higher standard of living than w ould otherw ise have been available, or the giving of assistance to the partner that aids

Rose v Rose, above n 2, at [46].

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the ow ning spouse in the carrying on of his occupation or business, if it has an indirect impact on the increase in value of separate property
(because for example the labour of the ow ning spouse can be applied to building up the separate assets), is properly subject to s 9A(2). Relevant too is the purpose that relationships are ones betw een equals w ho make equal contribution and the principle that all forms of contribution to the partnership are to be treated as equal.
The scheme of the Act recognises the interconnectedness of effort w ithin the partnership.
Where it enables one spouse to obtain gains from separate property, the
Act requires such gain to be divided according to contribution.
It w ould be inconsistent w ith the Act as a w hole for that contribution to be assessed only in terms of contribution in money’ s w orth. The concept of indirect contribution necessarily imports a judgment based on all the circumstances, as a matter of substantive outcome, because the forms of contribution cannot be exactly quantified. And, in an Act that has a policy of achieving outcomes that are “ just” , 41 it does not seem right to leave out a concern to achieve a just division under s 9A(2). It is therefore inevitable that an assessment be in part impressionistic. The forms of contribution are not susceptible to exact comparison. Such approach is also justified by the principle that resolution of questions about relationship property must be as inexpensive, simple, and speedy as is consistent w ith justice. The Courts are right to avoid requiring the parties to provide the sort of evidence w hich is disproportionate to the value at stake (a point made in New Zealand in M v B, 42 and in the
United Kingdom in Miller v Miller). 43
A more relaxed view of causation of increase in value may leave the aw ard of compensation for increased share for sustenance of separate property under s 17 to apply principally in those cases w here property has not increased in value but its retention and maintenance has been assisted by the efforts of the non-ow ning spouse. The division under s 9A(2), by contrast, aims not to compensate for effort, but to recognise an entitlement to property through contribution to the gain in separate property. The correct contribution approach to application of

relationship property


I have suggested that in an appropriate case it may be necessary to reconsider w hether it is only gain from the date of first application of relationship property or other contribution that comes w ithin the gain

Propert y (Relat ionships) Act 1976, s 1M(c).
M v B, above n 16, at [167].
Miller v Miller [2006] 2 AC 618 (HL) at [26].

- 13 -

divided under s 9A(1) or 9A(2), as reliance on Hartley suggests. The point may not be of practical significance in applicat ion of s 9A(2) because of the requirement that division of the gain is according to the respective contributions of the spouses to it (because a lift in value show n to result from other reasons than can be attributable to the contribution of the non-ow ning spouse w ill not count). But the question of timing is of considerable practical importance in the application of s 9A(1).
In Rose v Rose, for example, the application of relationship property (the partnership assets applied in the development of Cloverlea) came at a relatively late stage in the marriage. The w ife’ s contributions, by contrast, had begun w ith her marriage, more than 20 years before. 44
She received 40% of the increase in value of the property over the course of the marriage under s 9A(2). 45 The w ife w ould have received
50% if the gain had been treated as relationship property under s 9A(1), but on the approach of Somers J in Hartley v Hartley the period of gain w ould have been from the first application of relationship property, a matter of a few years only before the marriage ended.
It may also be necessary to question further the view that the increase in value shared is the increase after the first application of matrimonial property or the actions of the non-ow ning spouse. This w as accepted by the Supreme Court, in application of Hight v Hight itself, despite
Somers J in Hartley. 46 The approach w as not challenged by the w ife
(and explains her reliance on s 9A(2) in relation to Cloverlea, although the same conditions of application of relationship property – the partnership assets – w ere present as in relation to Poplars).
As indicated, I think it may be necessary to reconsider this approach.
There is no direct textual support for it in s 9A(1) and, indeed, the reference to “ in w hole or in part” may be thought to be against it. It may lead to anomalous results if a non-trivial application of relationship property is made at an early stage or at any rate before significant gain in value unrelated to the application of relationship property. On the other hand, a strictly causative inquiry may justify the Hartley approach.
I do not how ever think the matter is as self -evident as it has been treated. And if the policy is based on a notion like intermingling, it may not be conceptually sound.
Entitlement to share in property and claims to compensation

Rose v Rose, above n 2, at [10].
Ibid, at [51].
Ibid, at [29].

- 14 -

The significant reforms introduced in 2001 responded to w idespread recognition that equal division of relationship property, even w ith share in the gain to separate property w here the non-ow ning spouse contributes to it or it is achieved w ith application of relationship property, may not result in just outcomes.
Tw o aspects w ere of particular concern: the recognition that the division of responsibilities w ithin the partnership may have adversely impacted on the earning capacity of one of the partners, and the recognition that such detriment might have been in circumstances w here a non-ow ning and disadvantaged partner had contributed to the increase in value of the separate property of the ow ning partner. Sections 15 and 15A w ere enacted to address this perceived unfairness. Some commentators have criticised this development as contrary to the policies of the Act because they introduce discretionary redistribution of property w hich cut s across the entitlement rules. 47 Other commentators have suggested that the combination of entitlements and compensation is imaginative and appropriate. 48
Under ss 15 and 15A, the Court may, as the heading to these provisions makes clear, “ make orders to redress economic disparities” through payment of lump sums or transfer of property. Both of these sections
“ overrid[e] sections 11 to 14A” . 49 These are the sections w hich provide for equal division of relationship property and establish a high threshold
(“ extraordinary circumstances that make equal sharing ... repugnant to justice” ). 50 The scheme of the Act is arguably that the orders to redress economic disparity, w here the conditions for such orders are met, are more important than equal sharing, at the end of the day.
This scheme may have been the trade off for not placing an economic value on future earnings, as had been discussed but rejected in the 1988
Working Group w hich preceded the 2001 reforms. 51 The limitation of compensation to the existing assets means that it is not inconsistent w ith a principle of clean break and remains a property division (w hich looks to the future economic position of the parties) rather than an attempt to distribute future earnings.



Bill At kin “ The Legal World of Unmarried Couples – Does t he New Zealand
Approach Shed Any Light on t he Fut ure?” (13th World Conf erence of the
Int ernat ional Societ y of Family Law , Vienna, 2008); see also Nicola Peart “ The
Propert y (Relat ionships) Amendment Act 2001: A Concept ual Change” (2008)
39 VUWLR 813 at 828.
Joanna Miles “ Dealing w it h Economic Disparit y: An Analysis of Sect ion 15
Propert y (Relat ionships) Act 1976” [2003] NZ L Rev 535 at 567.
Propert y (Relat ionships) Act 1976, subs 15(4) and 15A(4).
Ibid, subs 13(1).
“ Report of t he Working Group on Mat rimonial Propert y and Family Prot ect ion”
(Depart ment of Just ice, Wellington, 1988) [“ Report of t he Working Group” ] at 8–

- 15 -

Wild J’ s view in Rose v Rose that the conditions for exercise of the discretion under s 15A mirror those in s 9A(2)52 has been criticised as failing to appreciate that it is the actions of the ow ning partner during the partnership that must have contributed to the value of separate property, not the actions of the non-ow ning partner. 53 It is the case how ever that there may be some overlap in that indirect contributions of the non-ow ning spouse may have freed the ow ning spouse to increase the value of separate property. The point that is of importance is that recourse to s 15A may be maintained in parallel w ith an application under s 9A(2). The claims are not exclusive of each other.
The s 9A(2) claim is one of entitlement (w ith the share to be received how ever a matter for assessment by reference to the contribution of the non-ow ning partner to the increase in value of separate property). 54 The s 15A claim, by contrast , is one for discretionary relief to provide compensation to redress economic disparities. Like the claim under s 15, also for discretionary relief, jurisdiction to make an order depends on demonstration that there w ill be significant disparity in income and living standards betw een the spouses after their separation because of the effects of the division of functions w ithin the marriage.
The difference betw een the tw o provisions is that under s 15 the limit to the redistribution of property by w ay of compensation is the relationship property, w hereas under s 15A it can extend to the separate property if gain in the value of the property resulted from the effort of the ow ning partner w hile the couple lived together. The freedom to make money on his or her ow n account is therefore itself recognised as a division of function w ithin the marriage w hich it is proper to recognise by making w hat w ould otherw ise be separate property available for the purposes of compensation. To date, applications under s 15A have met w ith little success. Nor have lump sum payments under s 15 been generous, even w hen the amount of relationship property is significant. And there have been attempts from time to time to make invidious inquiries about w hether the disadvantaged spouse chose not to w ork or w anted to play tennis. (As
Baroness Hale remarked in Miller, no one ever seems to complain that the earning spouse enjoyed his or her w ork.)55




Rose v Rose HC Blenheim CIV 2005-406-155, 14 Oct ober 2005 at [94].
Nicola Peart (ed) Brookers Family Law – Family Propert y (looseleaf ed, Brookers) at [PR15A.03].
Joanna Miles “ Financial Provision and Property Division on Relat ionship
Breakdow n: A Theoret ical Analysis of the New Zealand Legislat ion” (2004) 21
NZULR 268 at 292.
Miller v Miller, above n 43, at [154].

- 16 -

I am not sure w hy these provisions seem to be regarded w ith disfavour.
It may be that if the courts are not w illing to use these provisions, that the pressure for further legislative reform (perhaps through a community of surplus regime attaching to separate property – such as w as urged by one member of the 1988 Working Party)56 w ill build up. It is likely that, lacking it, the courts w ill continue to be faced w ith claims for recognition of earning capacity enhanced during the marriage, as a species of property. It seems to me that w e should first make conscientious use of the pow ers Parliament has provided, in the spirit intended.

It w ould be a pity if the solutions arrived at by Parliament in the 2001 amendments are not given a fair chance. No solution w ill ever yield perfect justice. But it does seem to me that the combination of entitlement and compensation (limited by the existing assets) provides opportunity to address most injustice. It is true that the compensatory payments introduce more discretion. But the discretion is not imposed on the proper area of entitlement.
And once that fails to yield substantive justice, there is no real option to discretion. And although there is some conceptual aw kw ardness (as the 1 988 Working Group thought in considering a combined entitlement and compensatory regime) in using property division to serve the ends of future needs, the disabling effects of relationship division of responsibility on the nonearning spouse and the corresponding asset represented by the incomeearning capacity of the earning spouse, enhanced during marriage, are rightly compensated by departure from equal sharing rather than maintenance, allow ing the partner w ith the greater earning capacity or the income-generating separate property to rebuild later. Rose v Rose isn’ t any sort of destination. But it is a step along the w ay to achieving just outcomes in the separation of property follow ing the breakdow n of a relationship. ************


“ Report of t he Working Group” , above n 51, at 15 –16.

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