Divorce, art and copyright

27 September 2021

A divorce case between an artist and her husband in New Zealand has got copyright issues thrown into the mix.

Not only will they have to divide their former abode at Marlborough Sounds, located at the northern end of the South Island of New Zealand; they may also have to split a huge collection of paintings as well and the corresponding copyright for these artworks.

Painter Sirpa Elise Alalääkkölä, born in Finland and now living in New Zealand, and husband Paul Anthony Palmer parted ways in 2017. The former couple headed to the Family Court in Blenheim for the division of their properties. Among these were Alalääkkölä’s paintings, created during the 20 years she was married to Palmer.

Last year, the judge ruled that the copyright for the artworks is not relationship property. The Copyright Act vested copyright to the creator of the artworks, the judge said, and the skills possessed by Alalääkkölä and used by her to make those artworks, already existed before she married Palmer.

Wanting an equal share of the paintings and their corresponding copyright, Palmer appealed the ruling at the High Court in Blenheim in July 2021. He said he aims to copy and sell these art pieces.

In his decision over Palmer’s appeal which was released early in September, Justice Andru Isac said that copyright in an artistic work is relationship property. He added that it seems the Copyright Act and the Property (Relationships) Act are interacting in unique ways previously not considered in New Zealand.

Isac also said that the Property (Relationships) Act required relationship property to be divided equally, at least in most cases and that this should be applied to the former couple who were married for 20 years.

“I agree with the High Court that the Family Court fell into error in stating that copyright was not relationship property because the copyright works were created using skills acquired prior to the marriage. Those skills are not themselves property, and no copyright or other property right exists purely because a person has the skill to create a work in the future,” said Paul Johns, a principal at AJ Park in Auckland.

Admitting this is an issue of family law on which he is not an expert, Johns said that the copyright fits the relevant statutory definition of ‘relationship property’ which is ‘all property acquired by either spouse or partner after their marriage…began.’ This definition is subject to certain exceptions. But, according to Johns, these exceptions don’t seem to apply in this case.

“Copyright is undoubtedly ‘property.’ Copyright comes into being on creation of an original work in which copyright can subsist. Copyright in paintings made during a marriage is therefore property acquired by the artist after their marriage began,” he explained.

For Kate Cornegé, a partner at Tompkins Wake in Hamilton, the decision is based on well-established principles under IP and relationship property laws.

“I think the Court was correct to recognize that there is tension between presumption of equal sharing and the ‘intensely individual’ nature of copyright, but copyright is a property right and is therefore different from personal goodwill - generally not relationship property,” she said. “For example, copyright can be assigned or inherited, so it will not necessarily stay with the creator.”

“I can see that there may be some practical difficulties in dealing with copyright as relationship property. The statutory presumption is that relationship property will be ‘equally shared’ between former spouses/partners. In this case, where there are multiple works, it may be possible to equally share the property by transferring copyright in some works to Mr. Palmer. However, if there was only one work and the copyright was of significant value - say, copyright in a very popular literary or musical work - then equal sharing could result in joint ownership. Joint owners need to cooperate in order to exploit a work by licensing and this could create obvious problems if the joint owners’ relationship has failed,” said Johns.

Isac ordered the case back to the Family Court, which, according to him, may have a hard time rendering a decision for the case.

According to Cornegé, it should be noted that the outcome of Palmer controlling the copyright in his ex-wife’s paintings is far from certain.

“The question of how to divide the relationship property fairly has been sent back to the Family Court, which has a wide discretion in how it reaches this decision. The Court has to ensure that there is a fair division of all the property in the pool, so the conclusion doesn’t necessarily lead to there being joint ownership of the copyright or having to split the collection of paintings down the middle. It may be that the artist ultimately keeps the paintings and the copyright in them in exchange for taking a smaller share of the marital home. Obviously this would be much more complex if copyright was the main asset of the relationship,” she said.

What may be the impact of Isac’s ruling?

The decision may spur new ways by which artists can achieve certainty as to how their artistic works will be treated in case of separation from a partner.

Cornegé explained: “We expect to see artists creating structures to keep copyright in their works in other entities, such as companies and trusts. This would not prevent a former partner from having some interest in the copyright, but it may be less likely to lead to a situation where the ex-partner would have a substantial degree of direct control over the future use of the artistic works. We also expect to see more direct mechanisms for dealing with copyright in contracting out agreements and separation agreements, but these are arrangements that will need to be considered and documented very carefully to ensure they comply with the law.”