Alalääkkölä v Palmer: rethinking Relationship Property and the importance of a contracting out agreement

Written by Saige Lindsay

In February 2024, the Court of Appeal gave a precedent-setting judgment in the case of Alalääkkölä v Palmer regarding how copyrights are treated in the context of relationship property.

Ms Alalääkkölä was a painter, who produced commercial art. The parties separated in 2017 following a 20-year marriage. Upon separation, Mr Palmer wished to continue managing the commercial art business. It was his argument that while Ms Alalääkkölä was the artist, he commercialised the work by promoting and marketing the paintings, as well as creating art cards and prints for sale. Ms Alalääkkölä rejected Mr Palmer’s wishes and claimed he had never contributed to the business Ms Alalääkkölä ran. Furthermore, the dispute arose over whether Copyrights associated with artwork could be relationship property for the purposes of the PRA.

Ms Alalääkkölä appealed the High Court decision that found in Mr Palmer’s favour.

On the questions of law, the Court of Appeal upheld the High Court’s decision that copyright in artwork is “property” for the purposes of the Property (Relationships) Act 1976. The Court of Appeal further held that the Copyrights should be classified as relationship property, rather than separate property.

The Court of Appeal further held that Ms Alalääkkölä is to retain ownership of the Copyrights in the artwork, despite them being classified as relationship property. The Court further determined that compensation was to be provided to Mr Palmer to ensure equal division of relationship property pool.

More recently, in May 2024 the Supreme Court granted Ms Alalääkkölä leave to appeal the Court of Appeal’s decision.

This case sets a new precedent that will likely influence future disputes involving intellectual property within the context of relationship breakdowns. This decision also emphasises the importance of entering into a contracting out agreement to identify and protect any copyrighted works you have as separate property if you are married or are in a de facto relationship / civil union.