Survivor's Claim on Death of a Cohabitant in New Zealand

The Claim of the Survivor on the Death of an Intestate Cohabitant

Scotland

Unlike surviving spouses or civil partners who acquire legal rights from sections 8 and 9 of the Succession (Scotland) Act 1964, surviving cohabitants’ succession rights are not automatic. The survivor can apply for a court order for financial provision from the estate under section 29(2) of the Family Law (Scotland) Act 2006 (hereafter “2006 Act”). However, subsection (6) provides the claim must be brought within six months following the deceased’s death. Likewise, section 29(1)(b)(i) states the survivor must have been domiciled in Scotland immediately prior to the death. This did not apply in Chebotareva v Khandro,[1] where there was heritable property situated outside Scotland. Moreover, section 29(1)(b)(ii) mentions that the survivor must have been in an immediate cohabiting relationship with the deceased.

Furthermore, the court assesses whether the claim is valid under section 29(3), by considering the size and nature of the net intestate estate, any prevailing claims, any financial benefit the survivor could acquire upon death of the deceased, and any additional appropriate matters. In Savage v Purches,[2] since the survivor had received a substantial lump sum and was in receipt of an income from the deceased’s pension trustees, section 29(3)(ii) was not applicable. Subsection (3)(iv) provides the court with unrestricted discretionary powers which again limits the success of the survivor’s claim. Even after successful application of the claim, the court will make an order based on section 29(2). Subsection (10)(c) defines net intestate estate to mean the remaining estate after the provision for the legal rights of the deceased’s spouse or civil partner, if any. This emphasises the restrictive scope for the claimant, since the deceased’s spouse or civil partner take precedence over the cohabitant. Additionally, section 29(4) purports the survivor will not be awarded any more than a spouse or civil partner would have had in similar circumstances. In 2010, there were 1,000 cases,[3] inferring many cohabitants do not use section 29. Indeed, Professor Thomson retorted that the cohabitant is usually advised to settle, due to the unpredictability of the section 29 outcome.[4] Overall, section 29 is restrictive since surviving cohabitants do not have the same “status” as other marital arrangements, hence they must first fulfil the set criteria. Even then the outcome of their claim is uncertain as it is determined by the court which has unfettered discretionary powers which Lady Smith criticised in Kerr v Mangan.[5] Based on this evidence, surviving cohabitants are in an unfavourable position, thus they must hope for reform under the Scottish Law Commission’s 2009 Report.

New Zealand

Conversely, the legal rights are automatic for de facto partners (unmarried couples) since they are treated like actual spouses or civil partners. Section 2D(1) of the Property (Relationships) Act 1976 (hereafter “1976 Act”) defines de facto relationship as two persons, the same or opposite sex, who are both 18 years or older, living together as a couple without being married, or in a civil union with each other. Subsection 2 aids the court in determining whether the relationships exist, by including whether they live together, care for children, have financial interdependence, have sexual relations, have a mutual commitment to shared life, and have public reputation. Notably, subsection 3 states that no individual factor determines a de facto relationship though Scragg v Scott,[6] illustrated that the mutual commitment to shared life is an essential factor. Here, as Scragg had assisted Scott with her investments, the court inferred that there was a mutual commitment to shared life and so a de facto relationship existed.

Before 2001, there was no entitlement to succession under intestacy or to bring a claim under the Family Protection Act 1955 (hereafter “1955 Act”). Due to the intention of Parliament to remove all discrimination based on marital status, this was reversed by the Administration Amendment Act 2001 and the Family Protection Amendment Act 2001. Hence, de factos acquired virtually the same succession rights as spouses and civil union partners in relation to intestacy, unlike in Scotland. However, de factos, may not qualify under those Acts until they have lived together for three or more years as indicated by section 2E(b) of the 1976 Act. Nonetheless, the court may instigate rulings under the 2001 Acts if they share a child or the applicant has made substantial contributions to the relationship,[7] and serious injustice would result if no order was made.[8] Notably, the 1976 Act does not apply if the de facto was not living with the deceased at the time of death.[9] In Benseman v Ball,[10] as the relationship ended before the death, the survivor was not entitled for an order. Overall, as de factos generally have the same succession rights as spouses and civil partners, their chances of a successful claim are greater than in Scotland.

If the claim is successful, the survivor can apply for the provisions under section 61 of the 1976 Act. Option A allows the survivor to apply for a division of relationship property in accordance with the Act’s provisions.[11] Option B allows the survivor to retain his or her property, and take assets that he or she owned with the deceased as joint tenants by survivorship.[12] Section 56 mentions that the survivor may apply for an award under the 1955 Act demonstrated in B v Adams.[13] Therefore, when the claim of a surviving de facto is permitted, he or she has multiple beneficial options to choose from, unlike in Scotland. When Option A is elected, section 76(3) applies stating that the survivor forfeits any provision and entitlement to succeed to the estate so it is equally divided among the parties under section 11. Section 13 states that it will be divided according to the parties’ respective contributions to the relationship if sharing would be contrary to justice, though this rarely happens in practice.[14] Usually they will apply for further provision from the estate under the 1955 Act as indicated in EM v SL.[15] If the deceased had multiple surviving partners then each one can select an option as illustrated in Chapman v P,[16] where there was a de facto and a widow. The former elected option B as her intestate entitlement was lucrative for her, while the latter elected option A which allowed her to take half of the estate. If more than one elects option A then section 52A of the 1976 Act will apply stating that the estate will be divided in chronological order to which the relationships occurred, and if they were simultaneous then the claims will be satisfied from the assets attributable to the particular relationship. If not, then section 52B provides the claims will be determined by the contributions that each relationship made to the acquisition of the property. Given this evidence, there are more choices for survivors in New Zealand, compared with Scotland. Section 65 states that the survivor must have been advised by a lawyer on the effects of the options and signed a written notice. When this has been lodged with the administrator of the estate, the choice of option will be operative.[17] Section 62(1)(a) states the choice must be made within six months of the death, otherwise the survivor will be treated as having elected option B as indicated by section 68. Section 62(3) and (4) state the court may grant an extension of time if the estate has not been fully distributed.

The court can set aside either option, if it would be unjust to enforce the options under section 69, which applies if the choice was not freely made, the survivor had not fully understood its effect, the survivor has become aware of information relevant to the making of the choice, or another person has made an application under the 1955 Act or the Testamentary Promises Act 1949 against the deceased’s estate. In Mulder v Mulder,[18] the court held the survivor failed to establish these factors existed, hence the option could not be revoked. Although both options can have negative consequences, de factos in New Zealand have a higher chance of success under intestacy than in Scotland.

Conclusion

The outcome of the survivor’s claim is more favourable in New Zealand than in Scotland, mainly because de factos obtain automatic and certain rights after the intestate’s death. The New Zealand 1976 Act appears less restrictive that the Scottish 2006 Act since spouses or civil partners do not take precedence over the financial provision in New Zealand. Given the recent persuasive argument from Sheriff Principal Dunlop, arguing that a surviving cohabitant should obtain the same rights as a spouse or civil partner unless there are significant reasons not to,[19] perhaps it is time to reform Scots Law on intestacy so it parallels New Zealand.

[1] 2008 Fam LR 66.

[2] 2009 Fam LR 9.

[3] Briefing 51, ‘No longer living together: how does Scots cohabitation law work in practice?’ (Centre for Research on Families and Relationships, October 2010).

[4] Joe Thomson, Family Law in Scotland (7th edn, Bloomsbury Professional 2014) 212.

[5] [2014] CSIH 96.

[6] (2006) 25 FRNZ 942 (HC).

[7] Property (Relationships) Act 1976, s 14A(2)(a).

[8] ibid (b).

[9] Administration Act 1969, s 2(1).

[10] [2007] NZFLR 127.

[11] (n 7), s 61(2)

[12] ibid (3).

[13] (2005) 25 FRNZ 778.

[14] Nicola Peart, ‘New Zealand Report on New Developments in Succession Law’ (EJCL, Vol 14.2, 2010) 11.

[15] [2005] NZFLR 281.

[16] Peart, (n 14) 9, citing Unreported High Court Wellington CIV-2007-485-1372, 2 July 2009.

[17] (n 7), s 65(4).

[18] [2009] NZFLR 727.

[19] Thomson, (n 4) 213, citing Kerr v Mangan 2013 SLT (ShCt) 102 23 (Dunlop).