Yes. Under section 15 of the Property (Relationships) Act 1976, an economic disparity payment compensates only the income gap that was caused by the division of functions in a relationship. A forensic accountant can calculate the size of that gap, but the figure is a starting point, not the final answer. If other factors also caused the disparity, the paying party can argue for a reduced, apportioned award.
This matters because the leading case, Scott v Williams [2017] NZSC 185, created a working assumption that in a relationship run along traditional lines the division of functions caused the disparity. Accountants now build their calculations on that assumption, and section 15 claims have risen sharply since the decision. But a High Court decision, Gosbee v Gosbee [2020] NZHC 1001, confirmed that the assumption can be partially rebutted, and that compensation must reflect only the portion of the disparity the division of functions actually caused. The lesson for separating couples is simple: the accountant’s number is where the argument begins, not where it ends.
What does section 15 actually compensate?
Section 15 lets a court order one partner to pay the other a lump sum where, after separation, one partner’s income and living standards are likely to be significantly higher “because of the effects of the division of functions” during the relationship. The classic example is the partner who steps back from a career to raise children while the other keeps earning and advancing.
The wording carries a strict causation requirement. The court compensates disparity caused by the division of functions, not disparity on its own. Two partners can end a relationship with very different incomes for all sorts of reasons, and section 15 only reaches the part of that gap that flows from how they divided their roles.
There are two stages to a claim. The first is jurisdiction: was the disparity caused by the division of functions? The second is quantum: if so, what compensation is just? Section 15(3) only allows an award “if it considers it just”, which gives the court a discretion at the second stage even where the threshold is met.
How is an economic disparity payment calculated?
Since Scott v Williams, practitioners and accountants generally use what is called the disparity method, drawn from the judgment of Arnold J. In broad terms it involves five steps:
- Compare incomes: assess the likely future annual income of the lower earning partner against the likely income of the higher earning partner.
- Choose a period: decide how many years the disparity should be compensated for.
- Apply contingencies: discount for the ordinary risks of life, such as illness or redundancy.
- Find present value: convert the future stream into a present-day figure.
- Halve the result: divide the sum in half, so the full disparity is not simply transferred to the higher earner.
Forensic accountants have become central to this exercise. A Grant Thornton and New Zealand Law Society survey found the use of forensic accountants for economic disparity calculations rose to 60 percent in 2021, up from 34 percent in 2017, making section 15 the second most common reason family lawyers brief a forensic accountant. Awards have also grown, partly because the post-Scott methodology tends to produce higher figures than the approach it replaced.
Where the calculation goes wrong: the number is not the cause
Here is the problem at the heart of many section 15 disputes. The disparity calculation measures how big the income gap is. It does not measure how much of that gap the division of functions actually caused.
The Scott v Williams majority treated this as settled by assumption. Where the working assumption applies and is not displaced, the majority attributed the entire disparity to the division of functions. An accountant applying the Arnold J method follows the same logic: the model takes the whole gap and presents it as compensable, without separately testing causation.
The minority in Scott v Williams disagreed. O’Regan and William Young JJ said this is contrary to the statutory words, because section 15 only compensates disparity caused by the division of functions, not disparity in general. William Young J gave the sharpest example: if a gap is due in equal measure to the division of functions and to a partner’s innate ability, the compensation should address only half. Ignore the competing causes, and you risk overcompensating against the clear words of the statute.
The danger in a section 15 claim is mistaking a confident number for a proven case. An accountant can value the income gap to the dollar, but the model usually assumes the division of functions caused all of it. The real work is in the causes behind the number, not the number itself.
Can the assumption of causation be challenged? Gosbee v Gosbee
This is exactly the issue the High Court confronted in Gosbee v Gosbee [2020] NZHC 1001, an appeal heard by Walker J. The wife sought $550,000, calculated by her accountant using the Arnold J approach. The husband had been established in his career at the start of the marriage and earned about three times the wife’s income, and the wife had stopped working in March 2013, around two years before separation.
Walker J accepted there had been a traditional division of functions, so the working assumption of causation applied. She then made the move that should interest every relationship property practitioner. She held that Scott v Williams left open the possibility that the assumption can be partially rebutted, and that the entire disparity does not have to be treated as caused by the division of functions.
In her words, at paragraph 54, a party “is entitled to rebut that starting assumption in whole or in part. If in part, it follows logically that any compensation awarded must reflect that.” She drew a careful line between factors internal to the relationship, such as joint decisions made while together, which do not rebut causation, and external factors, such as the husband’s pre-existing career trajectory, which do. On the facts, she assessed the portion of the disparity attributable to the division of functions at only 15 to 20 percent. That turned a $550,000 claim into a realistic range closer to $40,000 to $50,000.
There is a final twist. Although Walker J found there was jurisdiction and that compensation would otherwise be due, she made no award, because the husband’s obligation to pay out the wife’s share of his pension now effectively absorbed the compensation. The appeal was dismissed. Gosbee is a single High Court decision rather than binding appellate authority, and no section 15 case has reached the Court of Appeal or Supreme Court since Scott, so it is persuasive rather than settled. But it is the clearest worked example we have of apportionment at the quantum stage.
What this means in practice
For anyone facing an economic disparity claim, the practical points are straightforward:
- Treat the calculation as the opening position: a six-figure disparity figure is a starting point that can be tested and reduced.
- Separate the causes: identify what part of the income gap flows from the division of functions and what part flows from career stage, qualifications, market factors, or choices made after separation.
- Know the internal and external distinction: decisions made jointly during the relationship rarely help rebut causation; genuinely independent, external causes are what move the dial.
- Get advice early: the strength of a causation argument depends on evidence about each partner’s position at the start and end of the relationship, which is easier to assemble sooner rather than later.
Frequently asked questions
What is economic disparity under New Zealand relationship property law?
Economic disparity is the situation where, after separation, one partner is likely to have a significantly higher income and living standard than the other because of how the couple divided their roles during the relationship. Section 15 of the Property (Relationships) Act 1976 lets a court order compensation from relationship property to address it.
Does the division of functions have to be the only cause of the income gap?
No. The division of functions only needs to be a cause, not the sole or main cause, to establish jurisdiction. But under Gosbee v Gosbee, the size of the award should reflect only the portion of the disparity the division of functions actually caused, so other causes can reduce the figure.
Can an economic disparity claim be reduced after the accountant gives a figure?
Yes. The accountant’s figure measures the income gap, not its cause. If the paying party can show that external factors also caused the disparity, a court can apportion the award, as Walker J did in Gosbee when she attributed only 15 to 20 percent of the gap to the division of functions.
Do I need a forensic accountant for a section 15 claim?
Often, yes. Forensic accountants are now used in the majority of economic disparity calculations, and their projections can be persuasive. But their figures rest on legal assumptions about causation, so legal advice on whether those assumptions hold is just as important as the calculation itself.
How long do I have to bring a relationship property claim?
Most relationship property claims must be brought within strict time limits, generally before the property is distributed and within set periods after separation. Because the limits and exceptions vary, it is best to get advice promptly after separating.
Written by Andy Bell, Partner at Lane Neave. Recommended Lawyer, Legal 500 Asia Pacific.
Last updated: 14 June 2026.
Facing an economic disparity claim?
The team at Lane Neave can advise on whether a section 15 claim stacks up and what it is realistically worth.
