Unequal Split of Relationship Property in NZ | Section 13

“Extraordinary Circumstances” Rule That Can Change a 50/50 Split

Under New Zealand legislation, the starting point is that all relationship property is divided equally. But that rule has a number of exceptions. One of them is where there are “extraordinary circumstances” that make equal sharing “repugnant to justice”.

That’s a deliberately high bar. Section 13 of the Property (Relationships) Act 1976 is where this exception is kept. It is reserved for exceptional cases – not situations where one partner simply feels hard done by.

Below, we look at three common scenarios.

1. “Everything we have, we have because of me.”

This is the most common argument – one person brought in most of the property (like the house) into the relationship, built most of the wealth during it, or supported the family financially for most (or all) of the relationship. Many people have raised this argument with the Court before – trying to get more than 50% in these circumstances.

However – the Court points out that the legislation says all contributions are considered equally. Running the household, caring for children and supporting a partner’s career all as relevant to this exercise just as much as paying for it all. Simply earning more is not enough – for section 13 to apply, the imbalance must be extreme.

Kidd v Russell [2018] NZFC 3989 (upheld on appeal in [2018] NZHC 3032) is an example. Ms Russell bought her mortgage-free home just before the relationship began, using money from the property settlement at the end of her previous marriage of around 25 years. Mr Kidd didn’t own anything.

They were together for six years. Mr Kidd worked, contributing his income to household costs, funded renovations and supported Ms Russell for almost three years when she wasn’t working.

They couldn’t agree – so they went to Court. The Court did find there was an extraordinary circumstance – due to the significant gap in contributions and Ms Russell’s limited ability to rebuild if she lost half the equity in her home. Ms Russell got a 70/30 split. The High Court upheld that decision on appeal.

Compare that with DMM v SGM [2012] NZFC 9808.  One partner owned the family home before the relationship began and the other brought comparatively little to the table.  Even so, the Court held this wasn’t enough to justify moving away from a 50/50 split.

The two cases show how fact specific these kinds of arguments are.  Contributing more assets won’t automatically tip the balance; the Court looks at the relationship as a whole.

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2. “We were only together for a few years and they didn’t do much to help.”

Section 13 arguments also often come up where the relationship was relatively short and one partner brought in most of the wealth. (Relationships of less than three years have their own set of rules under the Act, so section 13 usually comes into play where the relationship has lasted a little longer than that).

The typical scenario looks something like this: one partner comes into the relationship with substantial assets, the relationship lasts only a few years, there are no children, and the other partner contributes comparatively little. By separation, assets that were once separate have become relationship property, and an equal split can look more like a windfall than a fair division.

Still, the Courts are cautious. Short relationships are common. So are uneven contributions. Section 13 only applies where the case sits well outside the ordinary run of things.

Sydney v Sydney [2012] NZFC 2685 shows just how hard that threshold is to meet. The marriage lasted about three and a half years. Mr Sydney, a well-known New Zealand artist, brought virtually all of the significant assets into the relationship – including his home, his art collection (worth around $350,000) and the business that generated the couple’s income.

Mrs Sydney came into the relationship with modest assets, and much of her income during the marriage came from Mr Sydney’s artwork.

Even on those facts, the Court only adjusted the division to 60/40 in Mr Sydney’s favour. Judge Coyle accepted that extraordinary circumstances existed, but also recognised that the parties’ contributions during the relationship itself had been equal. The Court was reluctant to move too far from the starting point of equal sharing, even though the relationship was only just over the threshold.

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3. Money came from outside our relationship.

Sometimes, a large sum of money comes into the relationship property pool that has little to do with the relationship itself.

Injury/Illness Compensation

Compensation payments are a good example. Where one partner receives payments for personal injury, illness or loss of earning capacity, the Court will look closely at what the money was meant to compensate for – and whether an equal split would undermine that purpose.

In Greaves v Baldwin [2019] NZHC 3390, Mr Greaves suffered a serious medical event that left him permanently disabled. Under an income protection policy, he received ongoing payments to replace the salary he could no longer earn.

The Court accepted those payments were technically relationship property. But it also found extraordinary circumstances existed. The payments were personal in nature: they compensated Mr Greaves for earning capacity he had permanently lost. Had he stayed healthy, his earnings after separation would never have been shared in the first place.

A 50/50 split would have defeated the very purpose of the compensation. Instead, the Court divided the property 65/35 in his favour.

Inheritance

An inheritance can raise similar issues. In Wilkinson v Wilkinson [2021] NZFC 8995, a young couple had been together for around nine years when the husband inherited just over $1 million – less than 18 months before they separated. The money was used to pay off the mortgage on their home and buy a new one, so it became relationship property. The wife’s only capital contribution was her KiwiSaver.

The Court found the husband’s financial contribution was “so disproportionately beyond” the wife’s that “it simply cannot be ignored”. The timing of the inheritance, the size of it, and the parties’ age and stage of life all counted, and the Court ordered a 70/30 division in the husband’s favour.

But this category is intentionally narrow. Section 13 is not there to correct ordinary unfairness.

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How is an unequal split worked out?

If the threshold is met under section 13, each partner’s share is worked out based on their contributions to the relationship, rather than a straight 50/50 split. This means we look at what you did, and what they did with a fine-tooth comb – both financially and non-financially. Depending on the circumstances, the Court may apply an unequal spilt:

• across the whole relationship property pool; or
• to particular assets only (such as the family home), with everything else still divided equally.

There’s no fixed formula. The goal is simply to reach a just outcome on the facts.

Even successful section 13 claims rarely produce dramatic results. The Courts tend to make measured adjustments, not sweeping redistributions. Sydney v Sydney is a good reminder of that – despite Mr Sydney bringing almost all of the property into the 3.5 year relationship, the final division only shifted to 60/40.

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By Liana Yong

Liana is a Senior Relationship Property Lawyer at Clean Break, known for her pragmatic, resolution-focused approach to separation and complex property matters. She helps clients find clear, tailored solutions during challenging times.