Advocates want the Government to put an end to ongoing financial and litigation abuse they say women suffer in the hands of the court system when battling relationship property settlements. Jane Phare reports.
Women trapped in the ongoing nightmare of protracted financial and legal battles want the Government to do more to fix a Family Court system they claim allows years of abuse, often leaving one party traumatised and in poverty.
Some spoke of being subjected to psychological warfare involving ongoing legal tactics, including stalling over disclosure of property, causing appeals to drag on for years, draining them of money, racking up debt and badly affecting their children. The astronomical cost of continuing to fight litigious ex partners through the courts forced some to give up, or accept offers considerably lower than their legal entitlement.
Tactics included everything from changed locks, trespass notices and eviction instructions from the Tenancy Tribunal to cutting off money, fighting for guardianship of the children, and mounting endless appeals to delay settlement.
Although financial abuse is recognised under the Family Violence Act 2018 as a form of psychological abuse, advocates say it is still not widely acknowledged by the court system or judges.
Financial abuse is recognised as a means to threaten, frighten, manipulate and control a "victim", more often than not a woman. The Ministry of Justice and NZ Bankers Association websites include information on how to recognise financial abuse. The Ministry has online tools about managing finances after breakups, and includes advice about complaining to the Banking Ombudsman if the bank appears to be at fault, for example allowing one partner to empty joint bank accounts.
But advocates say it is still not widely acknowledged by the court system.
Spending millions of dollars fighting and for what?
Women, who cannot be named because of Family Court restrictions, told stories of battling between five and 10 years with no end in sight. The ongoing litigation and financial strain took a toll on their health, mentally and physically, they said. One told the Herald that with the millions of dollars her former husband had spent fighting her, she could have bought a home for herself and her children.
Where is the blindfolded Lady Justice in all this, a woman who has been fighting for relationship property for a decade wants to know.
The Law Commission has acknowledged the problem saying in its review of the outdated Property (Relationships) Act 1976 that the act did not allow for the " inexpensive, simple and speedy" resolution of relationship property matters. "Lengthy delays and unaffordable costs can exacerbate what is already a deeply traumatic time of anxiety, uncertainty and conflict for many separating partners."
With that in mind, the commission made 140 recommendations for change in 2019 but the Government says the proposed new Relationship Property Act will be years away. Those who have faced legal battles say it's not only the law that is weak but the way in which it is implemented in the Family Court. Advocates, and people who have been on the wrong end of litigious relationship property disputes, say often the tactics are often more about power and control than about money.
Gillian*, an Auckland mother of three, has been fighting for more than six years for her share of a family home. Because the house was in trust, the court granted occupancy to her former partner. After realising she would need hundreds of thousands of dollars to fight multiple appeals brought by her ex, she left her job and went on a benefit so she would qualify for legal aid. But that enforced poverty brought its own problems.
Unable to afford bond or rent she lived with various friends. It meant that her children could not stay with her and at one stage Gillian had to go back to court to fight to get guardianship back. And the nightmare is still not over. She is staying with a relative, unable to get back to her career or have easy access to her children because of the distance involved.
Gillian is among those who are convinced that the ongoing legal tactics by an ex are more about vindictiveness and control than about the end result.
"He's actually spending more money in legal costs than he would if he had just paid me out in the beginning. But he would rather make me suffer and just keep appealing because he's got money to do so," she says.
"He has been able to do this because our justice system allows constant appeals. Each appeal takes a year–six months to get a date and then six months for a judgment to come through, and he knows that."
Although the law is on her side, the process of trying to apply that law is not.
"What is broken is the court system and that's because it is overloaded."
She can understand why women in her situation give up and walk away with little or nothing. Although her legal aid bill will be nowhere near a commercial rate, Gillian will still have to repay the money to the state out of her settlement. Legal aid bills that cannot be settled during a person's lifetime are taken out of their estate when they die.
'Manipulative behaviour and financial abuse is prevalent'
Dr Rhonda Powell, a Christchurch barrister specialising in relationship property, agrees the court system as "broken" and that working through the Family Court takes too long. Both sides will spend large amounts on legal fees before - usually - the male partner agrees to settle shortly before the hearing, she says.
"It [the Family Court] is not really equipped for dealing with manipulative behaviour and financial abuse, which is really prevalent."
Whoever has control of the money and assets has an unfair advantage, she says.
"Property is power. If you've got control of the property you can make the other person jump through a lot of hoops with few implications. People are able to drag it out to be punitive and there isn't much comeback apart from the fact that sooner or later they run out of appeals."
New Zealand charity the Backbone Collective has repeatedly called on the Government for a Commission of Inquiry after women reported being involved in traumatic Family Court proceedings that dragged on for their children's entire school years.
The collective was formed in 2017 to provide a way for women victims to share their experiences of how agencies and services respond to them, with the aim of improving the system based on feedback from more than 2000 members. Collective co-founder Deborah MacKenzie says abuse, in all its forms, often continues after people separate.
"Financial and litigation abuse is one of those tools that abusers use. They make it very difficult for women to access their joint property once they leave."
Women are forced to borrow from friends and family, or sell belongings to pay legal costs, Mackenzie says. By the time many achieve settlement of relationship property there isn't much left because of their legal debts, some as high as $500,000.
"The litigation abuse forces mothers and children into poverty."
Some women are forced to represent themselves, which is difficult and challenging, she says.
"They find it hard to work. These Family Court proceedings are like a fulltime job. They're traumatised. It impacts every part of their life."
Auckland businesswoman Sarah Sparks is one who, after churning through nearly $2 million in legal fees fighting a relationship property battle, was forced to represent herself in her ongoing 10-year saga.
She spent weeks recently preparing for a Court of Appeal case to dispute costs of $141,000 (the original claim was for $444,000) awarded against her when she discontinued an application in the High Court after learning that the equity of the claim had been eroded.
Threatened with bankruptcy, Sparks took time off work to research and prepare for the case.
"I've never done this before and there's no playbook around that. I will give it my best shot."
Ten years on she is still renting, unable to buy a house. She wonders how many women choose to stay in a bad relationship or leave with little or nothing rather than face years of litigation resulting in poverty.
It's not about the money
Women involved in ongoing litigation over property settlement say they soon realise it's not only about the money. "It's vengefulness. It's all about power and control. It's about defending egos and rationale. It's ruthless," one told the Herald.
Senior lecturer Ayesha Scott says those working in the court system need to recognise when "abusers may be using the court system as another weapon in their post-separation arsenal".
Scott, of Auckland University of Technology's business school, says in a research paper that financial abuse is used to entrap and terrorise a partner as a form of coercive control, behaviour that often continues post-separation.
Scott interviewed 15 New Zealand women about their experiences with Intimate Partner Violence (IPV), including financial abuse, and the Family Court.
One woman reported having to live with her daughter, post-separation, in a rundown caravan in a field, without electricity or sanitation. Others spoke of reduced incomes, stalled career progression and hours spent preparing for court appearances, particularly those who were forced to self represent.
Some of the women, up against litigious ex partners, reported spending between $300,000 and $450,000 on legal fees with little outcome.
Sparks and the Backbone Collective want to see the court move from an adversarial system to an inquisitorial model. They favour a panel of specialists and experts to provide judges with information needed to make informed decisions.
University of Auckland law academic Professor Mark Henaghan wants tougher penalties for people who do not disclose their property and assets. Spouses can spend years, and hundreds of thousands of dollars, trying to get access to assets and valuations, he says.
"People can say 'it's not mine, it's owned by the trust'. That's unfair. It's like playing a game of sport and the other person hides the ball so you can't get hold of it."
If Henaghan had his way, litigants would need to reveal all assets at the beginning of the process, including those held by trusts and companies. Non-compliance would result in stiff penalties or forfeiture of the property.
"People would get onto it fairly quickly. The problem is there are no disincentives in the system. The disclosure process takes too long."
Some cases that come before the Family and High Courts are highly complex, Henaghan says. People can have up to 200 companies and 150 trusts, and it can take years and expensive forensic accountants to unravel.
Severe forms of financial abuse can be just as coercive and controlling as physical forms of violence, Henaghan argues, and should therefore be viewed as just as serious. That control is permitted by the legal system, he says, because extensive litigation is needed to access property in trusts.
Henaghan has first-hand experience, having assisted people, mostly women, who find themselves at the gruelling end of relationship property litigation. People give up and accept far less than they are entitled to, he says.
"That was not what the legislation was designed to do. It was designed to give a fair result at the end of a relationship."
Lady Justice is blind to financial abuse
Sparks says Lady Justice is blindfolded to signify impartiality and holds equally balanced scales to signify the obligation of the law to weight the evidence. But Lady Justice isn't seeing the effect of an "avalanche of litigation" and financial abuse.
"They [the opposing party] identify everything they can use procedurally against you and they deploy it. Then you've got to respond as part of the process. That requires time, effort, money, preparation and your presence," she says.
"If you haven't got the resources and you are deficient when you arrive in court, and you're not as well matched, you are on a hiding to nowhere."
She wants to know why judges can't have more discretion in cases where it is obvious the actions of a litigious partner is causing distress and financial hardship to the family. Sparks argues there should be mechanisms to enable people to share relationship property more easily rather than the "privileged mindset" of being able to afford to go to the High Court.
"Justice shouldn't have a price tag on it."
The Law Commission has picked up on this point, recommending in its 2019 review that the court's powers to make interim or early distribution of relationship property should be strengthened and clarified so one party is not disadvantaged.
For Sparks, her battle won't end when her relationship property settlement is finalised. She vows to keep lobbying and speaking out until she sees change.
"I've sacrificed a decade of my life. It's got to have a purpose. If I can change it so that our kids are in a different world where there are better standards, more holistic, encompassing legislation, where it's easier to get access to assistance in a civil claim case, then those 10 years have been worth it. If it takes me another 10 years so be it."
* Gillian's name has been changed to protect her identity.