Last year we published an article titled The curious case of Sutton v Bell – How your de facto relationship status can impact your ability to restructure your property on the Court of Appeal decision in Sutton v Bell  NZCA 645.
In Sutton v Bell  NZCA 645, the Court of Appeal held that if a couple are “in contemplation” of a de facto relationship, a court may set aside a disposition of property (such as the transfer of assets to a trust) under section 44 of the Property (Relationships) Act 1976 (the Act).
Yesterday, the Supreme Court unanimously dismissed the appeal against the Court of Appeal’s decision.
As noted in our earlier article, this case clearly demonstrates that if you dispose of property and that disposition defeats your partner’s rights under the Act when you are “contemplating” a de facto relationship, your partner will have recourse to that property under the Act.
The transition from a “dating” relationship to a de facto one is an evolution and can be a real grey area. However, if you are considering moving in with your partner or your relationship is developing then it is important that you take formal steps to protect your separate property rights. The most important being entering into a contracting out agreement under section 21 of the Act, also known as a relationship property agreement. While these agreements can seem costly and awkward, they are the best way to protect your separate property.
If you have any questions about this article, please get in touch with our Private Wealth Team or your usual contact at Hesketh Henry.
Disclaimer: The information contained in this article is current at the date of publishing and is of a general nature. It should be used as a guide only and not as a substitute for obtaining legal advice. Specific legal advice should be sought where required.