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Relationship Property, s. 182, trust

The head is reinstated

Section 182 of the Family Proceedings Act 1980, provides that the court has the power to vary the terms of a nuptial settlement where the parties’ marriage or civil union comes to an end. The seminal cases on section 182 are Ward v Ward and Clayton v Clayton [Claymark Trust]. These cases have been clear that the purpose of s 182 is to enable the courts to remedy the consequences when a nuptial settlement can no longer benefit the parties of a continuing marriage or civil union.

Preston v Preston challenges the approach to a claim under s 182 when the marriage is of shorter duration than the seminal cases referred to above. For the background to Preston v Preston see Eating its head off.

The Supreme Court approached the matter by carefully analysing the facts that underpinned Mrs Preston’s claim.

With respect to the legislative background:

In the Preston case, an amendment to the terms of the trust including a spouse or partner prior to the parties’ marriage was considered a nuptial settlement. Importantly, as noted at [31]:

In Preston, a more nuanced approach was taken to s 182 claims and an additional stage of the relevant deliberations was added.

…”

It can be difficult to rationalise s 182 with the duties of a trustee. The Supreme Court addresses this as follows:

The key points from the Supreme Court analysis are summarised as follows:
  1. What is the extent of disparity?
  2. What are the financial and non-financial considerations?
  3. What was the source of the trust assets in a more global sense? Rather than a more limited relationship property analysis.

The loss to Mrs Preston was summarised as follows:

The end result, was that:

References:

  • Preston v Preston [2021] NZSC 154
  • Preston v Preston [2020] NZCA 679
  • Preston v Preston [2019] NZHC 3389

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