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MAP98

Separate Property - "his and hers; not ours"

NZ $27.50
incl GST
Author(s): Vivienne Ullrich, Bruce Andrews
Published: 8 June, 1998
Pages: 45

   

Introduction


The first focuses on the nature of matrimonial property. The important aspects of this model are s 8 which defines matrimonial property expressly by listing those items which are matrimonial property, and s 9 defines separate property as “all property of either spouse which is not matrimonial property”.

As all property acquired by either the husband or the wife after the marriage is defined as matrimonial, for the majority of couples the bulk of their property will be defined as matrimonial. Property will only be defined as the separate property of one spouse or the other if it meets very limiting criteria set down in sections 9 and 10. As lawyers who are most likely to be involved in matrimonial property issues at the time a couple separates, and because in that context we are looking at the division of matrimonial property only on the basis of contributions to the marriage partnership, we tend to see separate property as the exception.

It may be more conceptually correct to regard the status of property as separate as the basic concept underlying the Act, and to regard matrimonial property as the exception to the general rule. No property is matrimonial property until there is a marriage. Unless there is an event which precipitates a division of property, such as a contracting out agreement, a separation or a bankruptcy, property held by either spouse during the marriage is, in effect, separate property. Each spouse is free to deal with his or her property as he or she wishes. If they wish to have an equal say in property matters, they must own the asset jointly, or as tenants in common in equal shares, or in shares divided on some other basis. Each spouse has his or her income to spend however he or she wishes. If assets are acquired from that income, they may become matrimonial property, once there is a precipitating event, but not until then. Each spouse can run up debt and only that spouse can be pursued by the creditor. The creditor can satisfy his or her debt out of any property held in the name of the debtor spouse, regardless of whether that property might be defined as matrimonial if there were to be a precipitating event. Once the precipitating event has occurred and debts are divided, s 20 defines matrimonial debt as the exception (s 20(7)), and unsecured personal debts are debited against the matrimonial property owned by the debtor spouse, and then only if there is no separate property to satisfy it (s 20(5)). In certain circumstances, such payment from matrimonial property will be compensated.

The Matrimonial Property Act 1976 does not set up a regime of community property. It sets up a regime of deferred sharing of property which only comes into play when formal legal steps are taken to bring it about. If the separate property provisions of the Act are viewed from this standpoint, they become easier to understand.

When the precipitating event does occur, however, the baseline shifts and property which up until this point has been held in the name of one spouse and dealt with as he or she chose, becomes matrimonial property to be shared with the other spouse.

At the same time, property which is defined as separate property may not be completely immune from making some contribution to the matrimonial pool. Thus, by the operation of s 9(3), by s 10 or by s 17, property which is not defined as matrimonial property may nevertheless have some part of it included for division between the spouses.

 

Content outline

  • Section 9 - what is separate property?
  • Blurring the boundaries - becoming matrimonial property
  • Two homes available
  • Section 19 - dealing with property
  • Section 20 - debts: separate or matrimonial?
  • Reform
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