Chapter 19
Relationship property and trusts


19.1The Preferred Approach Paper included a chapter on sections 44 and 44C of the Property (Relationships) Act 1976 (PRA) and section 182 of the Family Proceedings Act 1980 (FPA).366 These provisions apply to give relief to a disadvantaged spouse or partner on the breakdown of a relationship where property has been transferred to a trust. Submitters on the earlier Second Issues Paper367 singled out sections 44 and 44C of the PRA as inadequate. Some argued that these sections do not go far enough to ensure a just division of assets produced or enhanced by a relationship.
19.2Our overall approach to this review of the law of trusts has been to address matters of core trust law rather than problems that arise solely at the point where trust law interacts with other policy areas. However, we chose to include in the Preferred Approach Paper the proposal that section 182 of the FPA be amended to extend to de facto partners.368 We also suggested, as an option for comment, that section 44C(2)(c) of the PRA could be amended to provide the court with broader compensation powers. While we were cautious about proposing changes to the PRA and FPA given the scope of our review, these two potential amendments were identified during the course of our work as reforms that would go some way to addressing identified concerns.
366Law Commission Review of the Law of Trusts – Preferred Approach (NZLC IP31, 2012) at ch 17.
367Law Commission Some Issues with the Use of Trusts in New Zealand: Review of the Law of Trusts – Second Issues Paper (NZLC IP20, 2010).
368Preferred Approach Paper, above n 366, at P59.