Sun, 19 Jul 2009 12:00a.m.
A prominent Auckland family law barrister has described as "shocking" a landmark Supreme Court judgment which has paved the way for women to potentially get increased settlements after marriage break-ups.
The court has ruled the woman at the centre of the case is entitled to almost half of the increased value of the couple's farm, despite her former husband inheriting it before their marriage, the Herald on Sunday reported.
Barrister Anthony Grant said the case involved "the annihilation by stealth of separate property" and described it as ` `shocking".
The long-running dispute case - heard before four different courts - was expected to open the floodgates on a series of similar disputes.
The Supreme Court agreed with the Court of Appeal that the woman was entitled to a 40 percent share of the increased value of her husband's farm, which he owned before their 1979 marriage. They separated in 2003.
The husband inherited a second farm in 1995.
The woman argued that her homemaker duties allowed her husband to focus on developing the properties.
The wife won at Family Court level, but lost in the High Court. For round three, the Court of Appeal said the wife was entitled to almost $560,000 for both properties. Both parties appealed to the Supreme Court - the husband said his wife was not entitled to any of that money; she said she was entitled to more.
"The argument for the wife was that her actions since marriage had freed up the husband to undertake work solely for the benefit of his separate property and that she had prevented the debt from reaching an unsustainable level," the Supreme Court said.
"In addition to looking after the children and managing the household, she had earned over $300,000 from outside employment, all of which she had contributed to the household."
The wife asserted had it not been for her actions the farm would have been sold to ease debt, and neither party would have seen the "spectacular increase" in the value of the property.
Mr Grant said the ruling was "a stunner" because people had not been aware that "indirect contributions" involving something as ordinary as household chores could convert a spouse's separate property into relationship property.
The court acknowledged that the "general purpose" of the Property (Relationships) Act provided for the sharing of property which either partner brought into or acquired during a relationship.
However, in certain circumstances, it could become subject to the sharing regime, it said.
The case would have a major impact on all cases involving separate property, Mr Grant said.
NZPA