COMMENT
In my last column I wrote about Stuart and Barb. They had separated and Stuart's family had helpfully got their lawyers to draft a separation and relationship property agreement just weeks after the separation.
Barb wanted to sign the agreement, which provided that she would get a one-off payment of $200,000,
and Stuart would keep other property and take on the mortgages.
Barb's lawyer wanted more information but Stuart wanted her to sign immediately. Barb rang her lawyer and demanded to go in there and then and sign the agreement the Robertsons' lawyers had drafted.
"I want the money now, I've got nowhere to live and they are offering me a good deal. I want it sorted," she said.
Barb's lawyer did not certify the agreement that day. Under provisions in the Property Relationships Act certain requirements must be fulfilled before the agreement is legally valid.
The lawyer who witnesses the signature of a party to the agreement must also certify that she or he gave their client full and independent advice about the agreement.
Cases heard in recent years have set out that truly independent advice must include finding out what property is available for division and the value of that property.
That goes so far as to require evidence of, say, the value of a business from its accounts and in some cases may require an independent accountant to look over the accounts.
The reason for requiring a full inquiry for such independent advice is so that lawyers can explain to clients how they would fare if they did not sign the agreement but instead took their entitlements under the act.
That comparison is vital because the client is in no position to consider whether the compromise to be made under the agreement is fair or not without such information.
Barb was so unhappy with her lawyer's insistence that she get the information before proceeding further that she took her file away.
Her sister had a friend who was a lawyer and she suggested Barb saw her.
"Just remember, you're the client. You tell her what to do."
The new lawyer wanted to see the original file. Once she had done so she explained that her advice would be no different from Barb's first lawyer.
She also insisted that the information be obtained. Barb could do some of this herself, such as getting information from the bank about the couple's total indebtedness and obtaining registered valuations on the three properties they owned.
Stuart would have to show them the latest business accounts and the new lawyer recommended that these be checked by an independent accountant.
Once the information from the bank and valuer was provided it was clear there was significantly more property available than Barb had thought. The family home had increased in value vastly.
Although the two rental properties were negatively geared they, too, had increased in value and since the couple had bought them five years ago had a combined equity of $400,000.
The former family home was worth $700,000 less a mortgage of $200,000. Without including the business or shares, the property available for division was $900,000.
"Why would you accept a $200,000 one-off payment when your share of relationship property is at least $450,000?" asked Barb's lawyer.
When the lawyer wrote to Stuart's lawyer advising that she could not sign the agreement in its present state, Stuart's reaction was not pretty. Again he went around to see Barb and confronted her.
"You know Mum and Dad gave us the deposit for the house. We would have got nowhere without them. I had thought we would be able to be friends. I never thought you'd rip Mum and Dad off like this."
But this time Barb's sister was in another room and heard the conversation. Barb was wavering and her sister went with her to see the lawyer. The lawyer explained that even though the Robertsons had provided the $50,000 deposit for the purchase of the family home, that had been lost into the relationship property pool.
The home had increased in value substantially since then.
Finally the business accounts arrived. So did the share details. The shares were worth around $10,000 but the business was quite profitable and added considerably to the value of relationship property.
Barb eventually settled for slightly less than she was entitled to because she wanted to acknowledge the Robertsons' original contribution.
But it was a long way from the deal Stuart had tried to pressure her to sign in the fortnight after their separation.
* Vivienne Crawshaw is a family law specialist with Gubb & Partners in Auckland. She can be contacted by email.
COMMENT
In my last column I wrote about Stuart and Barb. They had separated and Stuart's family had helpfully got their lawyers to draft a separation and relationship property agreement just weeks after the separation.
Barb wanted to sign the agreement, which provided that she would get a one-off payment of $200,000,
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