Are Relationship Property Agreements/Prenups Actually Enforceable in New Zealand?
This is general information, not legal advice. For guidance on your situation, contact us directly.
Relationship Property Agreements (often referred to as “pre-nuptial agreements” or “contracting out agreements”) allow couples to agree how their property will be divided should their relationship end. Under the Property (Relationships) Act 1976 (“PRA”), these agreements permit parties to depart from the statutory presumption of equal sharing of relationship property.
While they provide certainty and control, contracting out agreements are not immune from judicial scrutiny. Section 21J of the PRA allows courts to set aside agreements where enforcing them would result in “serious injustice.” Understanding how this test works—and how to minimise the risk of set aside—is critical for anyone seeking to contract out of the PRA.
Understanding “Serious Injustice” Under the Property (Relationships) Act
The concept of serious injustice is intentionally flexible, allowing courts to assess each case on its facts. The PRA does not define the term, but courts typically examine:
Provisions of the agreement – are the terms fair and reasonable in light of the parties’ circumstances, including both financial and non-financial contributions?
Timing – how long since the agreement was entered into, and have circumstances changed?
Fairness at the outset – was the agreement inequitable when signed?
Changes in circumstances – e.g. income, health, or asset shifts that make enforcement unjust.
Intent for certainty – while courts respect parties’ desire for certainty, this does not outweigh serious injustice.
Other factors – such as child care responsibilities or the overall wellbeing of the parties.
New Zealand Cases Where Prenups Were Upheld or Set Aside
Courts weigh the parties’ intentions against fairness in practice:
Tracey v Tracey [2024] NZHC 3960: After a 29-year relationship, an agreement allocating nearly all increases in Mr Tracey’s property to him was set aside. The Court held that ignoring Mrs Tracey’s decades of non-financial contributions and leaving her with minimal assets would be seriously unjust.
Starr v O’Meehan [2017] NZHC 1889 – A short-term relationship (just over three years). The agreement preserving each party’s separate property was upheld. Despite some pressure on Ms Starr, the Court found the terms fair, given the duration and contributions.
Winders v Winders [2018] NZHC 860 – An 80/20 division favouring Mr Winders was upheld. Mrs Winders had contributed minimally to the property’s purchase, and the Court found she benefited overall. This confirmed unequal agreements can stand if fair and freely entered.
White v Kay [2017] NZHC 1643 – After 28 years, an agreement leaving Ms Kay with nothing was struck down. The overwhelming disparity in outcomes, combined with the long relationship, created serious injustice.
How High Is the Threshold for Serious Injustice?
Judgments often assert that the bar for serious injustice is high. However, case law shows that agreements can be, and often are, set aside where they depart too far from the Act’s principles—particularly its presumption of equal contributions.
While serious injustice also covers issues like duress, incomplete disclosure, or unforeseen events, courts do tend to import the Act’s equality presumption into the analysis.
Relationship property agreements are often sought precisely because one party (usually wealthier, or with greater future prospects) wishes to avoid this outcome and depart from the Act’s equal contribution presumption. Yet the courts tend to import that presumption back into the serious injustice analysis.
This creates tension: while the law theoretically permits parties to strike their own bargain, in reality agreements that depart too far from the Act risk being invalidated.
What Wealthy Individuals Should Know Before Signing a Prenup in NZ
Wealthier parties often enter agreements early in a relationship to protect assets or a growing business. They may reasonably want an arrangement that keeps wealth maximally separate, especially where their financial resources already reduce the other party’s burdens (cleaners, au pairs, staff).
However, courts may still find serious injustice where the agreement disregards non-financial contributions over a long relationship. The reality is that even if both parties freely accept an unequal deal at the outset, its enforceability decades later is uncertain.
Best Practices to Make a Relationship Property Agreement Enforceable
To improve enforceability, orthodox guidance is:
Enter the agreement early in the relationship.
Recognise both financial and non-financial contributions.
Ensure comprehensive, independent legal advice.
Avoid pressure or coercion.
Review and update the agreement over time.
Avoid provisions that diverge too significantly from equal division for relationship property acquired during the relationship.
The challenge is obvious: if the safest course is to align with the Act, the utility of the agreement is reduced.
Why Relationship Property Agreements Still Matter Despite the Risks
Despite limitations, agreements remain useful:
Deterrent effect – Litigation is costly and risky. An agreement increases the barrier and legal risk for a party seeking to challenge and strengthens settlement leverage. Even if an agreement is vulnerable, the cost and uncertainty of challenging it often leads to earlier, more favourable settlement.
While a robust agreement usually doesn’t try to keep all property separate property indefinitely, it can still strike a balance that is usually more favourable than an adjudicated outcome would be.
Certainty –even an agreement that makes concessions towards the logic of the Act is still more certain than leaving division up to the courts, and can allow the parties to separate with less cost, stress, and delay.
Protection of pre-relationship wealth – Agreements are particularly effective at ring-fencing property brought into the relationship and preventing intermingling.
Drafting Approaches: Conservative vs Creative Prenup Structures in NZ
Agreements that try to keep all property separate indefinitely often face the greatest risk of set aside. There is also mixed authority on the question of whether a provision that creates serious injustice can be severed leaving the rest of the agreement intact - so if a single provision creates serious injustice, the entire agreement risks set aside. That means that an agreement that could have offered some protection (e.g. in relation to pre-relationship separate property) is seriously undermined if it also includes provisions that are likely to create serious injustice (e.g. provisions dictating how property derived during the relationship, often over decades, is to be divided).
In many cases, we would recommend a “conservative” agreement that attempts to keep pre-relationship wealth and inheritance separate, but that leaves the Act a lot more intact when it comes to future relationship property.
However, creative approaches for a client seeking to keep their property more separate may include:
The addition of a family trust as a separate layer of protection (though trusts are not infallible either);
Stepped settlements – providing the dependent party with greater entitlements as the relationship endures (e.g. after 5, 10, 20 years);
Sunset clauses – agreements or provisions that expire after a set period.
Trigger clauses – shifting outcomes when specific events occur (e.g. childbirth).
Multiple agreements – separate relationship property agreements dealing with pre and post relationship property; or a maximally protective agreement and a second more balanced agreement that is triggered if the first agreement is set aside.
The risk with creative approaches however is that, while there are examples of such agreements in other jurisdictions, there is little in the way of New Zealand precedent to inform how a New Zealand court would deal with such agreements. Creative drafting should be undertaken only with expert advice tailored to the parties’ circumstances.
Conclusion: The Limits and Value of Prenups in New Zealand
Relationship Property Agreements cannot guarantee ironclad protection. But they remain one of the most effective tools available for managing risk, deterring claims, and protecting pre-relationship wealth.
With careful drafting, regular review, and provisions that acknowledge both parties’ contributions, they can significantly improve outcomes and provide greater certainty—even if courts ultimately retain the power to intervene.
Protecting your wealth and planning for the future requires more than standard templates. At Gordian Legal, we combine deep legal expertise with innovative, tailored solutions to craft agreements that reflect your unique circumstances and ambitions. Contact us to explore how a carefully structured relationship property agreement can provide certainty, safeguard assets, and minimise risk.