you're reading...
Relationship Property, s. 182, trust

A Little guidance on s 182

Section 182 of the Family Proceedings Act 1980 empowers “… the courts to review a settlement and make orders to remedy the consequences of the failure of the premise on which the settlement was made” in circumstances where a nuptial settlement has been made upon a trust of which either or both of the spouses (or civil union partners) can benefit.   To make an application under s 182 the the parties must have married and subsequently divorced.

The review invokes, as noted in Clayton v Clayton (Claymark Trust) “a two-stage process”:

“The first is to determine whether the [settlement] is a nuptial settlement. The second is to assess whether and, if so, in what manner the Court’s discretion under s 182 should be exercised.”

A generous approach is taken with respect to whether a settlement is a nuptial settlement. As noted in Little at [14]:

“ … To be an “ante-nuptial or post-nuptial settlement” in terms of s 182, the arrangement must be one that “makes some form of continuing provision for both or either of the parties to a marriage in their capacity as spouses, with or without provision for their children”.  ‘In their capacity as spouses’ means “only that there must be a connection or proximity between the settlement and the marriage” If the settlement is documented, determination of its qualifying character is “primarily one of construction of the settlement documentation”, to “be construed in accordance with ordinary principles, while remembering that a generous approach to the issue of whether a settlement is a nuptial settlement is required.””

The court has a discretion whether to exercise the powers afforded by s 182.  This discretion, if exercised allows the court (as noted in Ward at [53]):

“… to remedy the consequences of the failure of the premise of a continuing marriage. The comparison is undertaken … between the position under the settlement had the marriage continued and the position that pertains after the dissolution. This is not backward looking to the time of settlement. It is forward looking, comparing the position under the settlement assuming a continuing marriage against the current position under a dissolved marriage.”

Importantlythere is no formulaic or presumptive approach and each case will turn on its own facts.  In deciding whether to exercise the discretion facts that will be taken into consideration include:

  • changes in circumstances since the initial settlement
  • the expectations of the parties with respect to the expected disposition of trust assets in the context of a continuing marriage
  • derivation of benefit from the Trust’s assets will not be at the expense of continuation of the long-standing family business

The extent of discretion makes it difficult to determine the outcome for any particular case.  However, the following observation of Jagose J in Little v Little  at [30]is illustrative and helpful:

“Remedying the consequences of the marriage’s failure thus cannot be assessed by reference to the Trust’s assets themselves. It is to be assessed firstly by reference to the increase in net value of the Trust’s assets between settlements and dissolution, which was to support any continuing marriage. It would be necessary then objectively to calculate Mrs Little’s share in that increased value,  starting from a social expectation of equality, but taking into account relevant factors as the trustees may be anticipated to have taken into account had the marriage endured, including need and other current or future benefits, whether for Mr Little, Mrs Little, or the children.  The object should be a monetary figure, which the trustees would be ordered to pay by application of any part of the property settled.”

The take home message is the need to analyse each case by reference to the settlements onto trust, the increases in value that supported the continuing marriage; and the identification of a monetary figure referable to the application of settled property.  The highwater mark of 50/50 sharing in Clayton should not be presumed to be the standard measure of outcome from a s 182 application.


  • Little v Little [2020] NZHC 2612
  • Clayton v Clayton (Claymark Trust) [2016] NZSC 30
  • Ward v Ward [2009] NZCA 139
  • Kidd v Van Den Brink HC Auckland CIV 2009-404-4694, 21 December 2009


No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s



%d bloggers like this: