The
High Court set aside a 100:0 relationship property agreement favouring Michael
White after a 28 year de facto relationship came to an end. The clear power imbalance between spouses and
a deliberate failure to identify property covered by the agreement when signed
meant his former spouse Maree Kay was entitled to a half share in all relationship
property now valued in total at more than one million dollars.
Ms Kay is entitled to a
half share in her former husband’s assets: the former family home in Smart
Road, New Plymouth; all his bank accounts; five vehicles and shares in his
company Contact to Contacts Ltd. These
assets have yet to be valued.
The court was told the
two lived in a de facto relationship from the mid-1980s to 2012. Parting was described as fairly amicable,
coming after their daughter reached age eighteen. When Ms Kay left, she took her car and
$20,000 cash given her by Mr White at her request. Two years later, she took action claiming a
share of relationship property. Ms Kay
had signed a relationship property agreement in 2004, agreeing she would
receive nothing if their de facto relationship came to an end. An independent lawyer who witnessed her
signature advised against signing.
Courts have power under
the Property (Relationships) Act to set aside agreements which are unfair or
unreasonable when signed or have become unfair and unreasonable in the light of
subsequent events. Justice Ellis ruled
the agreement was unfair from its inception.
At the time she signed, Ms Kay had lived with her spouse for twenty
years. She had existing rights to a
share in the family home. She had raised
their child. She had supported her
husband domestically while he had grown his business and property
interests. She had spent her own meagre
earnings on the family’s day-to-day expenses.
She worked for a time in a sewing factory and when their daughter was
older worked as a caregiver in a local rest home. The assets Mr White allowed her take on
separation amounted to less than three per cent of his net worth.
Justice Ellis ruled the
relationship property agreement was poorly and opaquely drafted to the extent
it would not fully inform a lawyer giving independent advice on the merits of
signing. The agreement did not identify
or value the separate property then in existence. It suggested misleadingly that Ms Kay held
separate property in her own name. It
did not in any way shield Ms Kay from her husband’s debts; Mr White’s stated
justification for the 100:0 split.
White
v. Kay – High Court (17.07.17)
17.080