Equal property split upheld after de facto relationship ended in $20k/$1.5m divide

The High Court has upheld a lower court decision for a couple to equal property shares after separating

The High Court has upheld a lower court decision for a couple to equal property shares after separating

A pre-nuptial agreement, in which one partner from a 28 year de facto relationship agreed to receive $20,000 when the relationship finished, has been thrown out on appeal by the High Court.

The High Court upheld an earlier decision by the Family Court which ordered New Plymouth couple, Michael White and Maree Kay, an equal share of the property from their former relationship.

Shortly before the appeal judgement was released in July White agreed to pay Kay $250,000 which was half the value of a former property they lived in together at the time of the separation.

White told Stuff the judgement made him out to be the "bad guy."

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"It looks as though I tried to deceive her," he said.

"From an outsiders point of view the agreement looks unfair but the reality was that was our relationship.

"Not everyone's relationship is the same and that is what the law doesn't understand."

White said he believed the agreement, which both he and Kay wanted, was binding.

"It turned out to be rubbish but no lawyer would tell me that it was."

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He supported Kay financially throughout their former relationship and never had any intention of seeing her left destitute.

"She initially asked me for $10,000 in the agreement but I doubled it because I told her $10,000 would not last very long," he said.

He also offered to buy her a new house but she turned the offer down, he said.

Kay did not want to be involved in his business affairs, he said.

White now lived in a house he built at the time of the separation, which together with assets, is now worth $1.5million.

"When I started to build the new house she said it was 'your dream, your house and you do it,' " he said.

White and Kay had separated amicably in 2012 but eight years before the relationship ended, White asked Kay to sign a pre-nuptial agreement giving her $20,000 cash and a $13,000 car.

Kay reportedly told her lawyer when she went to sign the document that she was "signing her life away".

She did not want to sign the agreement but had felt under pressure to do so.

Kay left White in 2012 in an "fairly amicable separation", the court heard.

Later that year she registered a notice of claim of interest in the couple's Smart Road property under the Property (Relationship) Act 1976.

She also filed an application in the Family Court to void, or set aside, the pre-nuptial agreement she had signed, and to have the property divided equally between herself and White.

Evidence given in the court hearing showed the couple kept their financial affairs separate.

White was self-employed for much of the relationship, and had bought and sold three houses in Waitara and Bell Block.

Kay had worked in various jobs and looked after the household as well as caring for their daughter.

The court heard how Kay felt she was "slave" in the relationship, and under the total control of White.

White denied the allegations and told the court the pre-nuptial agreement was designed to protect Kay and ensure they each kept the property they owned.

After hearing the evidence Family Court Judge Pidwell​ declined to order the agreement void because Kay had received advice from her lawyer before she signed the agreement.

The judge however decided to allow the agreement to be set aside because it would be a serious injustice under the intention of the PRA if it was given effect.

Judge Pidwell said the proportion of the relationship property Kay would inherit was less than 3 per cent.

As such the disparity in the division of the property was so great the agreement should be set aside,  she said.

A court order was given for all the property from the relationship to be split equally between White and Kay under the Act.

Following the Family Court decision, White appealed to the High Court on both decisions.

Kay cross-appealed to the High Court that the agreement was not void.

In a reserve judgement released this month, Justice Ellis dismissed both appeals and upheld the Family Court decision.

Justice Ellis said the pre-nuptial agreement was unfair and unreasonable, and the $20,000 payment from White to Kay was "drop in the ocean," when White retained assets worth more than $1.1m.

The agreement "was a sword of Damocles hanging over Kay's head", and "the unreasonableness and unfairness of the agreement compounded over time," he said.





 - Taranaki Daily News


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