When New Zealand’s Supreme Court released its judgement on the Sirpa Alalääkkölä divorce case (which The Big Idea previously covered here) it was met with anger and despair by the majority of the creative community in Aotearoa. 

In a landmark decision that has sent ripples through New Zealand's creative community, the Supreme Court has found that copyrights in artworks created during a marriage are “property” under the Property (Relationships) Act 1976 (PRA), and in this case are to be treated as relationship property.  

So what can creatives take from it - to ensure they're not caught short if they find themselves in a similar situation?

Case refresher

This finding came in the case of Sirpa Elise Alalääkkölä v Paul Anthony Palmer, a divorce that has captured national attention, particularly among the creative community. 

The case centred on whether copyrights - which are intangible and personal in nature - could be classified as "property" and thus subject to division during a relationship property settlement.  

Alalääkkölä, a successful artist, argued that copyrights were personal property stemming from her skill and personality. In contrast, Palmer, her ex-husband, contended that they were relationship property acquired during their 20-year marriage. 

Initially, the Family Court sided with Alalääkkölä, deeming the copyrights to be her separate property. However, both the High Court and Court of Appeal later ruled in favour of Palmer, leading to the case being kicked up to the Supreme Court of Aotearoa.  

The Supreme Court has unanimously ruled that copyrights are indeed "property" under the PRA and can be classified as relationship property if acquired during a marriage. 

Both Alalääkkölä and Palmer accepted that the unsold artworks, as physical objects, were relationship property, but disagreed about whether the copyrights in the artworks were “property” under the Act. 

While acknowledging the complexities in dividing copyrights, the Court dismissed arguments that the intangible and personal nature of copyright excludes it from the PRA’s property framework.  

The Supreme Court did however stress that the division of copyrights must consider the creator’s reputation and future income, urging courts to design settlements minimising conflict and harm to authors, which should be reassuring to creatives. 

The case has now been remitted back to the Family Court to determine the value and distribution of the artworks and their copyrights.  

Concerns from artists

This decision marks a significant precedent in New Zealand’s legal treatment of intellectual property within relationship property settlements. 

It has sparked an emotive and concerned response from the creative community, with many artists feeling that their copyrights are not adequately protected by law in the event of a partnership split. 

Alalääkkölä, who has been battling her ex-husband for years over the copyright on her work, expressed her heartbreak and frustration. "I had hoped to be able to keep the house and studio, but I feel like I have nothing to lose now," she said.  

Her lawyer, Clive Elliott KC, acknowledged the importance of the decision but noted that it was not as clear-cut as people might think. "The saving grace here is that the court did recognise that this was a unique situation," he said. 

Elliott observed that the Supreme Court had confirmed that the artist had the right to control the copyright on her art “and to a large measure the way the valuation is conducted,” and acknowledged that intellectual property and relationship property lawyers looked at the issue “through a very different lens”. 

Alalääkkölä was ordered to pay Palmer $15,000 in costs, plus disbursements and Palmer relinquished his rights to a half-share in the copyrights, arguing that the value should be made up in other marital property. 

As the case returns to the Family Court for the final chapter, the creative community in New Zealand remains on edge, watching closely to see how this precedent will impact future cases involving intellectual property and relationship property settlements. 

NewsRoom reported that the disappointed Alalääkkölä was planning to leave the country. 

Previously - until the Matrimonial Property Act 1963 was superseded by the 1976 Act - women, at best, received one-third of the value of the matrimonial home, regardless of how much work they may have put in to growing a business or developing a farm.  

The fact that in this case it was the husband who was the dependent may have clouded public opinion somewhat. 

With that in mind, it would be wrong to blame the law itself, though perhaps it behoves Parliament and the Judiciary to consider a fairer framework for negotiating these things. 

How do you protect your mahi from divorce?

In 2021, the most recent record, the divorce rate was 6.2 divorces per 1,000 estimated existing marriages, the lowest since the law changed in 1981 making it easier for couples to divorce. The divorce rate is similar to 1974 levels, when it was 6.4 divorces per 1,000 marriages.

Any creative should seriously consider a prenup agreement before walking up the aisle. 

It is a nuanced and quite complicated set of judgments, that will be difficult for many artists and creatives to follow, observes Caroline Stone of Creative Legal Services, specialising in New Zealand copyright law in the creative sector. 

“In my view,” says Stone, “while the initial judgment delivered by Family Court Judge Grace was more pragmatic - and for that reason appealing to many creatives - the higher courts finding that the copyright is relationship property, but should remain in the ownership and control of Ms. Alalääkkölä ,and instead have its value determined in order to distribute the relationship property fairly is a more legally accurate outcome... although it does create difficulties in how the copyright value will be determined.” 

“One thing this decision does make very clear,” she explains, “is that there is still a lot of uncertainty and misunderstanding regarding copyright. More needs to be done to both educate and inform creatives on the value of their copyright and how best to protect it - including entering into an agreement with a partner or spouse.

"I can see why artists will feel dismayed at this result, but hopefully knowledge is power, and having this decision means that artists and creatives will have a better understanding of the value in their copyright and avoid being blindsided as Ms. Alalääkkola has been.”