Woman wins 70% of assets in divorce
A Wellington woman who gave up her career to support her family has won 70 percent of the money from the fallout of her marriage in a landmark case expected to change the face of divorce settlements in this country.
The woman will receive about $1.3m in a case that resets the bar for compensation to stay-at-home parents, 11 years after a law change aimed at reducing economic disparity was passed.
There have been few watershed decisions that address the often yawning gap in income between couples when one half has stayed at home while the other continued a career and the case was a "move in the right direction", Otago University law professor Mark Henaghan said.
The woman, a nurse, separated from her surgeon husband in December 2008 after 28 years. He had been caught having two affairs.
The woman had not worked during the marriage instead looking after the children and supporting her husband's career.
The husband was at the peak of his career at separation (earning about $1 million a year) and the wife was faced with starting hers again at 54. She had managed to get work as a receptionist but was earning less than $30,000 a year.
Judge Pat Grace said the woman had been self-sufficient before her marriage, but her lifestyle and income level fell to significantly lower than her former husband's and because she stayed at home she should be compensated for it.
The judgement shows arguments in the settlement included who should get money from an extensive wine collection, which had been consumed by the wife and friends since the separation; whether three watches worth $100,000 and jewellery worth more than $162,000 were gifts or not, and whether the wife should repay half of what her husband had spent on her since the separation.
Judge Grace outlined that the couple met while both were working at a Waikato hospital in 1982, when they were both aged 28. They married two years later and had two children. The woman also had a child from an earlier relationship.
During the marriage the wife followed her husband to Wellington, Australia and England, then back to New Zealand and was supportive of steps to advance his career.
She said she started part time work in 1996 but had to stop this when the woman whom her husband was having an affair with started harassing her to the point where it became necessary to involve police.
She said the stress meant she had to give up her job.
The wife did not re-enter the workforce until the year ended March 2012. Her taxable income for that year was $8500 and for the following year, $26,200.
Lawyer Anne Hinton QC, acting for the wife, said this was a "classic case for an additional award of relationship property" in favour of the wife because of economic disparity.
Mark Vickerman, acting for the husband, said there was no economic disparity, or if there was during the marriage, it had been settled by the husband paying maintenance after the separation.
Judge Grace agreed with Hinton and said he was confident the disparity between incomes and living standards was because the wife was the stay-at-home caregiver while her husband had a career.
"The fact that [the wife] remained at home, and cared for the children, and managed the household was something that the parties agreed to. The fact the [wife] supported [her husband] whilst the parties were overseas during which time the [husband] was pursuing his career is a significant factor.
"From a realistic perspective it is abundantly clear that the [wife's] lifestyle in the future will be substantially reduced when compared with the potential lifestyle available to the [husband]."
The relationship property pool is about $1.8 million, a "relatively modest" level, Judge Grace said.
He said a division of the relationship property pool of 70 per cent to the wife and 30 per cent to the husband would be appropriate. The wife is expected to receive about $1.3 million of the property pool.
Judge Grace did not agree with Vickerman that the wife should repay maintenance given to her after the separation.
Law professor Henaghan said the case was a good example of why they the law was changed.
He said, however, people would probably think the judgement was unfair.
"People will say she has had a good life, she should be satisfied. But she created this kind of lifestyle by her support so therefore she should get a reasonable future."
Henaghan said the judgement showed it was "really hard for someone who has come out of the workforce to get anywhere near their partner".
Henaghan said the judge had taken a broad brush approach - something which he supported.
The husband has appealed.