A Menage A Trois – Can Relationship Property Be Divided Three Ways?

The Property (Relationships) Act 1976 applies to couples whether they are in a marriage, de facto or civil union relationship. The purpose of the Act is to recognise the equal contribution of both people to a relationship and to provide for just division of property where a relationship ends by separation or death. If you are in the mood for a romantic page-turner which reaffirms the enduring nature of love and human connection, the Property (Relationships) Act 1976 may not be the statute for you. It is, however, a useful legal framework which has significantly improved the way relationship property matters are resolved in practice.

Broadly speaking, if two people have lived together in a relationship for three years or more before separating, the relationship is covered by the equal-sharing rules in the Act. In a textbook scenario, the couple would slice up the relationship property pie and have half each. But what happens if the relationship breakdown involves not a couple, but three people?

In a recent High Court case, A and B were married for several years before C entered the relationship. The three lived together in a house purchased in C’s name for 15 years with all parties contributing to the household. After the relationship broke down, A and B both made separate relationship property claims in the Family Court for a one-third share of the house. The Family Court referred the case to the High Court which was tasked with deciding whether they had jurisdiction under the Property (Relationships) Act 1976 to determine the property rights of three persons in a poly-amorous relationship.

Like a love triangle trying to squeeze through a circle, polyamory does not easily fit into New Zealand’s legal matrix. The Property (Relationships) Act 1976 does contemplate someone being married to one person whilst simultaneously being in a de facto relationship with another, just not all three people being in the same relationship. The High Court considered the potential property rights of A, B and C in the context of the multi-party relationship and by dividing the relationship into dyadic parts but decided that it would be unworkable to stretch the equal-sharing rules to fit A B and C’s situation. It was said that “Parliament has premised the Act on the notion of coupledom” and if the couple requirement was to be circumvented there would be no logical limit to the number of people in a relationship under the Act.

On this basis, the High Court decided that the Act did not apply to a three-way relationship. They did however note that the claimants could still have recourse to equity for a remedy, which is lucky! Because as we all know – equity delights to do justice, and not by halves.