Costly divorce litigation a saga of ‘misery’
Costly proceedings illustrate why court should be the ‘last resort’ in relationship property disputes. Rob Stock reports.
Court of Appeal judge Stephen Ko´s has described the result of a divorcing Whakata¯ne couple’s expensive and extended court battle over their assets as ‘‘misery’’.
Justice Ko´s said the case, which concluded just four days before Christmas after the couple incurred six-figure legal costs, was ‘‘everything relationship property litigation should not be’’.
The couple had met in 2007, married in 2010, and split in 2015.
The legal battle that followed, rivalling the length of their marriage, centred on the division of property: a small business and a family home held in his family trust since before the relationship began, a plot of land for a holiday home bought after they got together, and relatively modest chattels.
The claim had spawned three sets of High Court proceedings after beginning in the Family Court, Justice Ko´s said in his December 21 judgment.
It endedwith thewife being required to pay just over $137,000 in legal costs and expert witness fees to her ex-husband , who earlier in the year told the High Court at Tauranga his actual costs were even higher.
And yet, Justice Ko´s said, the only order varying the splitting of the assets from the starting point of the litigation was for thewoman to make an extra payment of just under $16,000 to her ex-husband.
Justice Ko´s was the second judge to be shocked by the case.
In December 2019, Judge J Fitzgerald in the High Court at Tauranga, said: ‘‘Important values reflected in the Property (Relationships) Act are the desirability of processes for resolving relationship property disputes which are simple, inexpensive and speedy, and minimise the opportunities for animosity, blaming and belittling behaviour.
‘‘Unfortunately, the nature and progress of these proceedings have been the antithesis of such values.’’
The multiple judgments in the couple’s case did not canvass why it dragged on so long.
But family lawyers say there are risk factors that can result in divorces turning into costly legal battles, ranging from the personalities of those involved, to economic disparity, where one party looks set to come out the relationship farwealthier than the other.
Any court fight over property is costly. A 2019 survey of family lawyers by chartered accountants Grant Thornton found legal representation during divorce was not cheap.
More than half the lawyers surveyed charged $301 to $400 an hour, a further 14 per cent charged between $401 and $500, and 2 per cent (all in Auckland) charged more than $500.
Combined with hearing fees, litigants often faced other costs such as property valuations, forensic accountant services, business valuations and senior counsel.
There are non-monetary costs as well.
Fighting through the higher courts can also be dehumanising, says lawyer Selina-Jane Trigg from Family Law Results.
‘‘And when you go to court, there’s no guarantee you keep your privacy,’’ she says. Some cases, like that of former Queenstown couple Stephen (Tim) and
Sophie Biggs, make national headlines.
Barrister and mediator Kirsty Swadling says there are a number of noncourt routes couples can take to hammering out a property settlement.
Options include ‘‘round the kitchen table discussions’’ where splitting couples work out agreements, afterwards formalising them through lawyers.
Negotiating through lawyers, whether by correspondence or roundtable meeting, or a combination, is another option, she says. Formal mediation, or arbitration processes are also available, she says.
Some family lawyers are also specially trained in collaborative process, taking clients through a series ofmeetings in a formally documented way, where the threat of court is removed as a negotiating tool.
Trigg, who is trained in collaborative processes, says the focus is on a respectful, less legalistic process, often driven by a desire to establish aworkable base for co-parenting children.
One of the country’s few ‘‘divorce coaches’’, Kimberlee Sweeney, from Degrees of Separation, says: ‘‘Court should be the last resort.’’
‘‘Relationship property should be quite straightforward. It’s not becausewe have things like trusts, and economic disparity, but mainly becausewe are people,’’ Trigg says.
Some people are almost impossible to negotiate with, she says.
‘‘Often it’s the case in the more litigious cases that you have got a person, or people who struggle with relationships, their employment relationships, family, neighbours,’’ Trigg says.
Sweeney says: ‘‘If you are dealingwith a bully, or a narcissist, they tend to go straight to court because that’s what they think they should do.’’
Those are not necessarily male traits.
‘‘40 per cent ofmy clients are male, and coming out of tricky relationships with difficult wives,’’ Sweeney says.
Feelings can also be running high, if a relationship ends messily.
Swadling says: ‘‘Separation is generally a time of heightened emotions, which canmake rational decision-making more difficult.’’
The value of assets to be divided can also be a factor, says Trigg.
In most splits involving family lawyers, the assets at stake are relatively modest, amounting to little more than equity in a family home.
The Grant Thornton survey of family lawyers found $500,000-$1 million was the most common relationship property pot, but relationship assets can be substantial among older splitting couples.
‘‘The silver splitters can be more acrimonious because of the complexity, and because there are more assets,’’ says Trigg.
Sometimes there’s a deeplyheld philosophical disagreement over who is entitled towhat, especially when it comes to business assets developed during the term of a relationship.
‘‘Sometimes it’s themen, because thewoman has stayed at home, and looked after the children, and he doesn’t feel she’s entitled to it,’’ Sweeney says.
Bitter fights can develop over family homes.
At themoment a family home is shared equally, even if itwas owned by one party only at the start of the relationship, Swadling says.
This was something many people found unfair, and some might try ‘‘novel arguments’’ to prevent such a split, even if they had only a small chance of succeeding.
‘‘The aggrieved partymight feel so strongly they are willing to take that route even if it is more likely to fail than not,’’ Swadling says.
Could lawyers play a part in escalating some divorces?
In the Grant Thornton survey, more family lawyers ticked ‘‘dealing with unrealistic/ aggressive/inexperienced’’ opposing lawyers as a problem in their professional lives ahead of ‘‘dealing with unrealistic client expectations’’.