It is becoming increasingly more common for long distance relationships to be the norm where partners may be based overseas. Consequently, many have assets overseas, and may be curious as to how the law handles the division of relationship property.
To begin, you should familiarise yourself with the Property (Relationships) Act 1976 (“The Act”) governing this area of law.
Generally, disputes over property situated overseas as long as they’re moveable and partners are domiciled in New Zealand, the New Zealand courts will have jurisdiction over it.
The term “domiciled” means that at least one partner must consider New Zealand their home or place of residence.
What overseas property is within New Zealand’s jurisdiction?
Overseas assets are defined in s 7 of the Act as classified as either being movable or immovable. The section applies to immovable property that is situated in New Zealand, and movable property situated within New Zealand or elsewhere.
Examples of movable property include:
- Bank savings
- Proceeds of sale from immovable property
- Family chattel
Examples of immovable property include:
- Leasehold interest in land
When is property moveable or immovable?
Generally, if it’s an movable property situated overseas, New Zealand has no jurisdiction.
Courts may decide under a property relationships proceeding to not enforce equal division of relationship property which is usually the presumption under the Act.
Here are 4 exceptions to the general rule and discretions made to the general rule against moveable and immovable property residing overseas:
- Discretion to overseas movables
Various factors influence whether courts will grant an order against someone who is not domiciled in New Zealand in respect to their overseas movables. These factors include but are not limited to:
- practicality of costs in collecting relevant evidence and enforcing the order;
- reasonableness of expecting a foreign respondent to defend themselves in proceedings in New Zealand; and
- whether they make up a significant portion of relationship property.
- A claim under private international law
Another exception is an action under private international law. This includes a claim between parties under contracts or equity. Equity was developed to supplement the common law where it is unfair.
- Family Home
The exception to land can be made if the overseas immovable property was capable of being a family home at the time of the marriage or de facto relationship. In cases like this, courts would usually adjust the shares of one partners interest in the relationship property.
- Agreement in writing
Parties not domiciled in New Zealand can agree in writing for the Act to apply to their moveable and immoveable property situated in New Zealand or overseas. Hence, the easiest way to ensure that you have control is to get a relationship property agreement.
Figuring out your rights and claims to a parties’ overseas property is tricky when the courts have traditionally determined the nature of your property. But even if a court determines an asset is an immovable overseas property, this might not defeat a claim for compensation.
This article was written by Ashley Yuan.