Background
The general rule is that when parties are together for three years or more their relationship property is divided equally including the family home, motor vehicles and other chattels.
There are many cases where a vehicle or boat are used almost exclusively by one party during the relationship. The question arises should such an asset be divided equally.
The Law
The Relationship Property Act specifies that relationship property includes “motor vehicles, caravans, trailers, or boats, used wholly or principally, in each case, for family purposes”.
It then goes on to say it does not include:
- Chattels used wholly or principally for business purposes;
- Money or security for money;
- Heirlooms;
- Taonga.
Example
A client has imported a luxury boat from overseas in 2013. The relationship begins at the end of 2014.
There are significant repair costs in relation to the boat and servicing which the party that imports the boat meets.
The other party does not like the boat being part of the relationship but there are different views as to how much of the time the boat is used and for what length of time.
Is the luxury boat a family chattel?
The classification of assets as “family chattels” is a question of fact which depends very much on use.For example, in the case of W v W, the court accepted the wife’s submission that a motor cycle that was principally used by the husband and never used by the wife was a family chattel because it freed the family car for the wife’s use.
Ideally, if you were bringing an expensive chattel into the relationship, you would sign a section 21 contracting out agreement so it remained the separate property of the person who purchased it.
Conclusion
The past use as a family chattel may not be enough. My experience is that courts take a wide view of the definition of a family chattel.
