On separation, people may choose to enter into a Separation and Property Division agreement recording how they will divide up their property.

There are four formal requirements that need to be met in order for the agreement to be binding.

  • The agreement must be in writing and signed by both parties.
  • Each party’s signature must be witnessed by a lawyer.
  • Each party must receive independent legal advice from a lawyer as to the effects and implications of the agreement before signing the agreement.
  • The lawyer who witnesses the signature of a party must certify that they have advised that party as to the effects and implications of the agreement.

In some situations a person may wish to overturn an agreement after it has been signed.  For instance if they feel that the agreement that was signed is unfair, where they feel that they were pressured into signing the agreement, or where they feel that they received inadequate legal advice.

A person may apply to the Family Court to set aside an agreement even though the agreement satisfies the four requirements set out above. This should generally be done within three years of the end of a de facto relationship, or within a year of the dissolution of a marriage or civil union, although it is possible to apply to extend that time limit.

The Court may set an agreement aside if, having regard to all the circumstances, it is satisfied that giving effect to the agreement would cause ‘serious injustice’.

The Court has a broad discretion to decide what constitutes serious injustice, and will consider the following factors when making its decision:

  • What the agreement says;
  • How long it has been since the agreement was made;
  • Whether the agreement was unfair or unreasonable in the light of all the circumstances at the time it was made;
  • Whether the agreement has become unfair or unreasonable in the light of any changes in circumstances since it was made (whether or not those changes were foreseen by the parties);
  • The fact that the parties wished to achieve certainty as to the status, ownership, and division of property by entering into the agreement; and
  • Any other matters that the Court considers relevant.

The onus of proving that the agreement causes serious injustice is on the party seeking to have the agreement set aside. It can be a difficult test to prove, and so parties should think carefully and consider the legal advice they receive before they sign an agreement.

Accordingly, if you are considering making an application to overturn an agreement, it is best to seek legal advice prior to making your application. Your lawyer can then advise you on the Court process, your chances of success, the costs involved with making an application, and can prepare the necessary documentation and represent you in Court. 

For more information on setting aside an agreement, please contact Mikayla Turner on (04) 473 6850 or at mturner@raineycollins.co.nz.