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Little v Little [2020] NZFC 3532

Published 10 March 2021

Relationship property dispute — settled property — trusts — contracting out agreement — nuptial settlement — marriage of long duration — Property (Relationships) Act 1976, ss 2B, 21, 44 & 44C — Family Proceedings Act 1980, s 182 — Ward v Ward [2009] NZSC 125, [2010] 2 NZLR 31; [2009] NZCA 139, [2009] 3 NZLR 336 — Clayton v Clayton [2016] NZSC 30, [2016] 1 NZLR 590 — P v P [2019] NZHC 3389 — Williams v Williams HC Christchurch CIV-2006-409-002948, 1 May 2009. This was an application for orders pursuant to the Property (Relationships) Act 1976 (PRA) and the Family Proceedings Act 1980 (FPA) in relation to property transferred to a trust. The parties had been married for 20 years (actually married for 16 and in a prior de facto relationship for 4 years, which under the PRA was counted as a continuous marriage) and had two children together. The respondent father had a family funeral home business. The parties had reconciled after their initial relationship breakup; the applicant became pregnant with the parties' first child, and the parties married. Prior to the wedding, the parties had discussed the possibility of a contracting out agreement to exclude the funeral home business from relationship property. The agreement never eventuated as the respondent was not happy with the counter proposal, and nine days prior to the wedding the respondent settled the business and shares in a trust with the children as final beneficiaries. The applicant sought to have the transaction vesting shares in the respondent's name to the trustees of the trust (PRA, s 44); compensation from the trust for the application or transfer of relationship property to the trust (PRA, s 44C); and rearrangement of the trust for appropriate financial adjustment (FPA, s 182). The applications under ss 44 and 44C could be better dealt with under s 182 and those applications were dismissed. In relation to the s 182 application, the leading case of Clayton outlined a two-stage test: determine whether there is a nuptial agreement; and determine whether, and in what manner, the court's discretion should be exercised. The Court considered that there was a nuptial settlement, as the property had been vested in the trust nine days prior to the wedding. The Court also determined that it was appropriate in the circumstances to exercise its discretion as it would otherwise be unfair to the applicant who had a reasonable expectation in a share of the assets accumulated during the marriage. The Judge directed that the assets of the Trust be divided into two parallel trusts, one under the control of each party, directed that the Applicant be added as a beneficiary of the Trust in the meantime, but provided leave for either party to apply to the Court for further directions. Judgment Date: 26 May 2020.