Complex copyright case sets new precedent in New Zealand Supreme Court Decision

Complex copyright case sets new precedent in New Zealand Supreme Court Decision in Alalääkkölä v Palmer Case

Introduction to the case

Copyrights are a big deal in the world of intellectual property. They give creators exclusive rights to their original works, which can be extremely valuable to the owners. Recently, the Supreme Court issued a decision which has clarified how copyrights are treated in relationship property disputes in New Zealand.

The story

Sirpa Alalääkkölä, an artist, created many artworks during her 20-year marriage to Paul Palmer. When their relationship ended, the dispute centred around whether or not the copyrights which attached to the artworks could be “property” for the purposes of division, and then whether or not that property ought to be relationship property or separate property. 

Family Court decision

Judge Grace in the Family Court found that:

• Copyrights are classifiable as property under the Property (Relationships) Act 1976 (PRA).
• As a result of those copyrights being derived from Ms. Alalääkkölä’s particular skills, they were to be classified as her separate property.

High Court decision

Justice Isac in the High Court disagreed with Judge Grace and found that:

• Copyrights fall within the definition of property in the PRA.
• If acquired during the relationship, the copyrights should be classified as relationship property.

Court of Appeal decision

The Court of Appeal, with Justices Collins, Katz, and Mallon, held that:

• Copyrights are property for the purposes of the PRA.
• Copyrights should be classified as relationship property if acquired during the relationship.
• Ownership of the copyrights should remain with Ms. Alalääkkölä, but Mr. Palmer should receive a compensatory adjustment from other relationship property to ensure an equal division.

Supreme Court decision

The Supreme Court had to decide whether copyrights are "property" under the PRA, how they should be classified, and how to ensure an equal division of relationship property. They concluded that:

• Copyrights are indeed property under the PRA.
• Copyrights created during the relationship are relationship property. In classifying copyrights as relationship property, the Supreme Court identified that copyrights are “economic rights” which are different and distinct from “moral rights”.
• The case was sent back to the Family Court to determine the value and distribution of the artworks and copyrights.

Key point 

This decision is another example of the focus on equal sharing of assets which are acquired during relationships. The only way to properly safeguard those assets from a relationship is for both partners to enter an agreement which contracts out of the provisions of the Property (Relationships) Act 1976 and which protects certain property from division in the event of separation or death. The specialist family team at Haigh Lyon is well equipped to deal with such agreements. 

Need Help?

If you need assistance with relationship property matters, contact Jennie Hawker at @email or Amanda Donovan at @email.