Verbal agreement not to make claim on house unenforceable says Court…

The High Court has decided that a promise not to make a claim on a house in the event of separation was unenforceable.

The wife bought out her ex-husband’s interest in the house before moving in to the same house with her new partner. The new partner made verbal assurances to her and other family members that the house would remain the wife’s separate property.

When they separated over 10 years later, the new partner made a claim on the house as relationship property. The wife tried to rely on the promises her new partner made to her.

The High Court held that the promise not to make a claim did not fulfil the requirements in order to make a binding agreement. Furthermore, it noted there are four requirements that must be met in order for there to be a binding agreement to divide relationship property differently than under the law. They are:

• the agreement must be in writing;
• the parties’ signatures must be witnessed by lawyers;
• the parties must have independent legal advice; and
• the agreement must be certified by a lawyer confirming he or she explained the effect and implications of the agreement before it was signed

Agreements that do not comply with these requirements, including verbal agreements, are unlikely to be enforced by the Court. If there has been agreement between partners as to how assets should be split in the event of separation, it is wise to speak with a professional experienced in the area to record these intentions correctly and legally.



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Shaun Cousins
Family Lawyer
Wellington