Daniella and Nick were married for 13 years and had three children when they separated in 2016.  Shortly after separating the parties executed a Separation and Property Division Agreement.  In addition to setting out how property was going to be divided, the agreement also set out the parties’ agreement around care and contact of the children, and around child support. 

The parties agreed that Daniella would pay child support to Nick, and that Nick would assume the role as primary caregiver until the youngest child was 18.  Daniella had contact with the children every second weekend, as she worked very long hours in her role as a marketing manager for a global company.  In exchange for receiving significant child support payments from Daniella, Nick agreed to divide the relationship property equally, even though he would likely have been entitled to a larger share of the property (because he took a break in his career to raise the children over the last 8 years).

Things seemed to be going fine until recently, when Daniella become unemployed as a result of her employer going under.  She was no longer able to pay child support, and she also did not want to go back to working as many hours as she had been previously.  She wanted to make up for time lost with the children and she wanted Nick to go back to fulltime work, so that she could become the primary caregiver, and Nick could pay her child support instead.

Nick did not agree with Daniella’s proposal.  In particular, he was unhappy that he only received half of the relationship property, when he could have been entitled to more.  Nick only agreed to the equal division of property because he thought that he would be the primary caregiver of the children until they were 18, and he would therefore receive substantial child support from Daniella in the meantime. 

The agreement between the parties was properly executed, and it was therefore binding and enforceable.  That means, either party could ask the court to enforce it.  It is, however, also possible for either party to apply to the court to set aside the agreement because it results in a ‘serious injustice’.  If the court agrees, then the whole agreement will need to be set aside (not just the disputed terms).  In other words, the parties are right back to where they were after they first separated.  This has resulted in a huge amount of uncertainty for both Nick and Daniella who have since used their respective shares of the property to purchase new properties with their new partners.  How could this have been avoided?

It can be problematic to lump property division, childcare and child support into one agreement.  In the first place the Property Relationship Act expressly states that it relates to property only.  In addition, in most circumstances it is better to keep these things separate.  This is because relationship property is usually static and agreements dividing it can be drafted and finalised at a set point in time.  The children’s needs however, will continue to change over time, and the parties’ abilities to care for them are also subject to change.  This can make child support agreements no longer workable, and in need of updating.  If part of the agreement is being updated there is an argument that the whole agreement should be revisited.  To avoid being in a situation where everything falls to pieces, it is best to keep property division agreements separate.  That way, if there is a dispute around childcare and child support, it can be resolved without potentially needing to review or set aside the entire agreement.  

Jaenine Badenhorst
Family Lawyer
Wellington