Can my ex overturn our relationship property agreement?

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If you entered into an agreement with your ex-partner dividing your relationship property, you may be wondering whether the division of your property is final or whether you or your ex-partner could attempt to set the agreement aside.  

Agreements dividing a couple’s property on separation are designed to be in full and final settlement of any claims that the couple may have against each other in relation to their property. However, a relationship property agreement can still be set aside for a number of reasons.  

When can a relationship property agreement be set aside?

First, a relationship property agreement will be void if the formal requirements under the Property (Relationships) Act 1976 (PRA) have not been met. The requirements for a binding relationship property agreement are set out in section 21F of the PRA and are that:

  • the agreement must be in writing;  
  • the agreement must be signed by both parties;  
  • both parties’ lawyers must have witnessed them signing the agreement;
  • both parties must have received independent legal advice in relation to the agreement; and  
  • both parties must have signed the agreement under their own free will.  

Although the agreement will be void if one of these requirements is not complied with, the court can declare that the agreement has effect under section 21H of the PRA if it is satisfied that non-compliance has not materially prejudiced one of the parties.  

Secondly, a court can set aside a relationship property agreement when giving effect to the agreement would cause serious injustice. The court will consider a range of factors when deciding if an agreement would cause serious injustice, including the length of time since the agreement was made and whether the agreement has become unfair or unreasonable in light of any changes in circumstances since it was made. For example, in Shepherd v Shepherd HC Dunedin CIV-2011-412-613, 19 December 2011, the Court set aside a relationship property agreement because the husband hid information about assets in his wife’s name at the time the agreement was negotiated and signed.  

Finally, section 21G of the PRA provides that a court can set aside a relationship property agreement when it is an unenforceable contract because of any other rule of law or equity. Some common examples are as follows:

  • Duress, which is where one party entered the agreement because of a threat or pressure, which was improper.  
  • Undue influence, which is when one party has been influenced or put under pressure (that is less than the standard required for duress) that prevents them from exercising their independent judgement in relation to the agreement.
  • A mistake or misrepresentation under the Contract and Commercial Law Act 2017. For example, if both parties to the agreement make a mistake about the value of the property.  
  • When the terms of the agreement are so ambiguous that the intention of the agreement is uncertain.  

Is there a time limit on when I can apply to set aside my relationship property agreement?

If you would like to set aside your relationship property agreement, you will need to make an application within one year of your marriage dissolving or, if you were in a de facto relationship, within three years of the relationship ending. If you are already outside of that timeframe, you will need to apply to the court for an extension of time to bring your application. When determining whether to grant an extension of time, the court will consider:

  • the length of the delay;
  • the reasons for the delay;  
  • whether the person seeking to set aside the agreement has a meritorious claim to do so;  
  • whether any prejudice would be suffered by the other party to the agreement; and  
  • whether allowing the person to bring the application out of time is in the overall interests of justice.

Generally, the court will allow a person to bring an application out of time where there is a good reason for the delay. For example, the court has granted extensions of time where the parties were focused on proceedings regarding the care of their children and where their previous lawyers had caused a delay in filing proceedings.  

For more information about whether your relationship property agreement can be set aside, contact Morris.