Property in divorce worries businessmen

Press, 23 May 1977, Page 4

Property in divorce worries businessmen

PA Auckland Divorce could be driving New Zealand businesses to the wall. The root of the problem is the Matrimonial Property Act, which came into force on February 1 and has already drawn criticism from two Supreme Court judges. The act provides for the equal sharing of property, and this could include business assets. Many businessmen whose marriages are “on the rocks” are known to be worried about the future of their businesses. Some firms might go into liquidation by default in such circumstances. It does not matter if a successful businessman’s wife has played no part in running the business. According to a Victoria University law lecturer, Mr W. R. Atkin, a businessman will “have to rely upon more than his industry and skill in business and his wife’s business inactivity if he is to overcome the equal-divi-sion rule as far as busi-

ness assets which come within the matrimonialproperty category are concerned,” “He will have to adduce evidence that he played over ail a much greater part in all the other aspects of the marriage as well."

There is a proviso under the act where extraordinary circumstances exist which the Court feels would render equal sharing “repugnant to justice.” While there has been no legal definition of these circumstances, Professor R. Webb says that “repugnant to justice” were meant to be strong words. Speaking earlier this year at a Legal Research Foundation seminar, he said: “It would appear that the equal-sharing rule is to be departed from in circumstances that are truly extraordinary ...

the words are designed to catch the really outrageous case of unequal effort ...” The Auckland President of the Family Law Reform

Associations (Mr G. K. Bunce) said that such problems were predicted by his organisation when the act was in its committee stages.

“It is creating all sorts of problems already — the ramifications are enormous,” he said. Problems with the act were also predicted by the President of Federated Farmers (Mr J. T. Kneebone). Farming, especially, posed a problem with the equal-share provision. In many cases it would be impossible to cut a farm in half, and so it would have to be sold.

The equal-sharing provision, though not necessarily that involving business, has been criticised in the courts. In Auckland, Mr Justice Barker said that the new act might occasionally prevent the Court from doing complete justice between the parties. In Christchurch, Mr Justice Roper said that the act resulted in "something less than justice.”