Relationship property disputes often raise difficult questions of what property is subject to the equal-sharing regime under the Property (Relationships) Act 1976 (PRA) and how this should be divided when a romantic relationship ends.

The landmark Supreme Court decision of Alalääkkölä v Palmer [2025] NZSC 9 considered the novel issue of whether copyright in artworks should be treated as relationship property and, if so, how copyright in the artworks should be divided between the parties.

In this article we discuss the Court’s findings and how the case raises further questions about the treatment of copyright as relationship property.

Background

Ms Sirpa Alalääkkölä, a Finnish artist, moved to New Zealand in 1993, where she met and married Mr Paul Palmer in 1997. However, they separated in 2017. Alalääkkölä claimed that during their marriage she had to sacrifice her art career to support the family financially, turning into what she described as a "painting machine" to produce commercial art. By around mid-1998, her paintings became the main source of income for the family.

Palmer claimed he played a significant role in promoting and marketing Alalääkkölä’s art. However, Alalääkkölä contended that Palmer did not contribute substantially to making, marketing, or selling her art. Alalääkkölä opposed Palmer's continued commercial involvement with the artworks.

The case was first considered by the Family Court in 2020, which found that copyright in Alalääkkölä’s artworks created during the relationship was Alalääkkölä’s separate property. However, on appeal, the High Court, Court of Appeal, and Supreme Court each found that copyright in the artworks should be treated as relationship property.  

The key issues in the case were whether copyright in Alalääkkölä’s artworks were considered relationship property, and if yes, how the rights should be divided between Alalääkkölä and Palmer. There was no dispute that the physical artworks were relationship property.

Is copyright in the artworks relationship property?

By the time the case reached the Supreme Court, the dispute only related to copyright in a stock of Alalääkkölä’s unsold paintings that were created during the relationship.

The distinction between relationship property and separate property was a key issue. The default position under the PRA is that parties in a romantic relationship are entitled to share equally in the relationship property once the relationship ends, unless there are extraordinary circumstances that would make equal sharing unfair or unjust. Whereas separate property is kept by the owner and is not shared with the other party when a relationship ends.

The Supreme Court upheld the Court of Appeal and High Court’s findings that copyright is a type of property and can therefore be considered relationship property. This means that copyright in artworks created by a party during a relationship should be treated as relationship property under the PRA.

The Supreme Court also upheld the distinction between copyright and moral rights under the Copyright Act 1994, holding that moral rights (which includes an artist’s right of attribution, and the right of an artist to object to derogatory treatment of their work) are personal to the artist and are not relationship property.

How should the copyright be valued and distributed?

In the Court of Appeal, Alalääkkölä argued that she should retain ownership of the copyright in her artworks to protect her artistic integrity and future interests.  Palmer argued that the copyright should be divided equally between them.

The Court of Appeal considered the broader context of copyright law, which grants exclusive control over creative works to their creators to encourage artistic production for the public good. It emphasised that the division of relationship property under the PRA should reflect the unique and personal nature of the copyright, especially where the copyright works are artistic and personal in nature.

The Court of Appeal considered that it was appropriate for Alalääkkölä, as the creator of the artworks, to retain control over their commercialisation as transferring copyright to Palmer could negatively impact Alalääkkölä's artistic reputation, livelihood, and moral rights.  The Court of Appeal therefore held that Alalääkkölä should retain copyright in the artworks, but that Palmer would need to receive a compensatory adjustment to ensure an equal division of the overall value of the relationship property.

In the Supreme Court, Palmer was willing to allow Alalääkkölä to retain the copyright in the artworks provided that he was compensated for it. How the copyright should be valued was therefore the remaining issue for the Supreme Court to consider.

Interestingly, the Supreme Court found that “because an original artwork is closely associated with an artist’s personality and reputation, the right to decide whether and when to disclose it to the public should be respected so far as it can be exercised consistent with a just division of relationship property”. The Supreme Court then went on to find that while a just division of the relationship property will be by value, this should be achieved in a way that “protects Ms Alalääkkölä’s control over previously unpublished works that she does not now wish to publish”.

Taking this into account, the Supreme Court recognised that the artworks at issue fell into four categories that would affect how the corresponding copyright is valued: (1) incomplete, unsuitable, or damaged works; (2) Ms Alalääkkölä’s private collection of paintings including a diary of her life and other sensitive works; (3) one-off unique paintings to be sold on the basis that they would be the only copy; and (4) works that have been or are intended to be the subject of multiple copies.

The Supreme Court gave directions as to how the Family Court should assess the value of the works falling within each category, and remitted the matter back to the Family Court to determine the value and distribution. The Supreme Court’s directions recognised that the values would depend on various factors, such as that some works may never be published while others were intended by the artist to be exploited commercially.

Our comments

In our view, the finding that copyright is capable of being treated as relationship property is a sensible outcome and appears to align with the position taken by some of New Zealand’s other key trading partners. It is also a welcome acknowledgement that copyright is a form of property.

However, the case does raise some curiosities that we would welcome further guidance on from the courts. For example:

1. The Court of Appeal observed that the situation may be different if the dispute was over copyright in different types of works, such as engineering drawings. The Supreme Court’s findings were also influenced by artworks being closely associated with an artist’s personality and reputation. It is therefore unclear how other types of copyright works might be divided in relationship property disputes.
2. The valuation and distribution of copyright works as relationship property could be more complicated if both parties contributed to creating the work (for example, if they co-authored a book) or if both parties have created separate works that have been combined together (for example, if one party composed music that the other party performed for a sound recording).
3. While the Supreme Court did not go so far as to recognise a common law right of an author to disclose an unpublished work to the public, the Supreme Court’s findings do open the door to a possible argument for such a right in New Zealand. The recognition of such a common law right could be problematic, though, as it would seem inconsistent with the exclusive right of a copyright owner (rather than the author) under the Copyright Act 1994 to show the work in public.  Arguably, this could amount to the creation of an additional moral right, beyond those granted by statute.

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Special thanks to Bridget de Lautour and Minerva Peters for their assistance in writing this article.