The media has recently commented on a case where a Judge ordered that each party take an interim distribution of AUD 1 million. This was to cover their ongoing living costs while the relationship property proceedings progressed. So what is an interim distribution of relationship property, and when can one be made?
Usually, relationship property is not distributed until a final settlement has been decided (see Separation and Property Division for further information). However, an interim distribution is when a certain amount of money or property is distributed beforehand.
The Court has a wide discretion to make an interim distribution, and will commonly consider the following factors:
- The needs and circumstances of the applicant (the person wanting the distribution). If they are struggling to re-house themselves, then an interim distribution may be appropriate to help them pay a tenancy bond or deposit on a new home.
- The purpose for which the distribution is sought. Is it to tide someone over, or meet a large bill?
- The applicant’s likely share of relationship property. It would be unwise for an interim distribution to exceed their likely total entitlement.
- Any uncertainty as to the applicant’s entitlements under the Property (Relationships) Act. The general rule is that after you have been in a de facto relationship, marriage or civil union for three years or more, all relationship property should be shared equally. If there is a chance that this doesn’t apply to them or uncertainty about whether property is classified as “relationship property” or “separate property”, then an interim distribution may be inappropriate.
- The length of time until the final hearing to decide relationship property matters.
- Any delays to date, and who has caused these delays.
- The effect of a distribution on the parties’ willingness to finalise the matter. If they receive enough money now, will they delay final settlement or unnecessarily drag things out?
- Whether or not the other party (the respondent) has dissipated or spent any relationship property. If one party is frivolously spending or devaluing property, then a Court may be more likely to allow an interim distribution to the other person in order to protect against this.
- The purposes and principles of the Property (Relationships) Act, including the need to do justice between the parties.
If you have any questions about relationship property or interim distributions, please do not hesitate to contact our Wellington based family lawyers Debbie Dunbar, email firstname.lastname@example.org, phone (04) 495 9940 or Maretta Twentyman, email email@example.com, phone (04) 495 8918.
Further information can be found here: