De Facto Partners’ Property Disputes

Now in the Family Court

Major amendments to the Family Law Act 1975 (Cth) came into effect from 1 March 2009 to allow former partners in a de facto relationship involved in a property dispute to bring an application in the Family Court or the Federal Magistrate Court.

These changes affect both heterosexual and same sex de facto couples.

The States and Territories reached an agreement (except Western Australia which has made similar amendments to its version of the Family Law Act many years ago) to create the new uniform laws to be applied by the Family Court and the Federal Magistrates Court.

Existing State and Territory laws will continue to apply in relation to:

1.      de facto relationships that ended before 1 March 2009; and

2.      other ‘domestic relationships’ which do not fall under the definition of ‘de facto relationships.

There are a number of requirements in order for a de facto relationship to fall under the new provisions of the Family Law Act.

What Is a De Facto Relationship?

The Family Law Act defines a de facto relationship as ‘a couple living together on a genuine domestic basis. In order for the Court to come to a conclusion about whether a relationship comes under the definition is must consider a number of matters including:

1.      the duration of the relationship;

2.      whether a sexual relationship exists;

3.      the degree of financial dependence or interdependence;

4.      the ownership, use and acquisition of their property; and

5.      whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship; the care and support of children.

A de facto relationship can ‘exist between 2 persons of different sexes and between 2 persons of the same sex’; and

In addition, ‘a de facto relationship can exist even if one of the persons is legally married to someone else or in another de facto relationship’.

Persons biologically related to each other who live together do not come under the definition in the Act.

Sometimes, a domestic relationship may exist, for example, between a son or a daughter who care for an elderly parent and it is conceivable that a claim may be open, say, for the carer for property adjustment. Such a claim would not be available under the Family Law ct but may still be available under one of the State or Territory laws.

De Facto Relationships Must Have Ended After 1 March 2009

In order for a claim to be open under the Family Law Act the de facto relationship must have ended after 1 March 2009.

Frequently, it is difficult to establish when a relationship has ended as for example:

1.      Parties may be living separately because of work requirements or travel;

2.      A party may consider that a relationship has ended yet the financial relationship continues, he/she continues to live under the same roof with his partner, to share meals, domestic tasks and generally to represent to the world that they are still together.

The above are examples in relation to applications for divorce. The applicant must establish that the marriage has broken down irretrievably and that the parties have separated for no less than 12 months. One important, specific, requirement in such cases is evidence that the intention to separate has been communicated to the other party.

Presumably, in order to establish that a relationship does not fall under the Family Law Act, the Court will require evidence that the intention to separate has been communicated to the other party before 1 March 2009. (examples?)

“Opting in”

Parties may consent to their case coming under the jurisdiction of the Family Law Act even in cases where the relationship ended before 1 March 2009.

Domicile

In order for a de facto partnership case to fall under the new provisions of the Family Law Act at least one person from the couple must ordinarily live in a ‘participating State or Territory’ at the time of making the application and the couple must have lived in that State or Territory for at least a third of their relationship.

The Two-Years Requirement

In order for a court to make a property order, parties must have cohabited for a period or periods totalling no less than two years or:

a.       The parties must have a child or children of the relationship; and or

b.      they made substantial contributions to the relationship even though it lasted less than two years.

Time Limit

An application for property orders must be filed within two years after the parties separated.

Otherwise, the applicant must obtain the leave of the Court to file his/her application out of time.

What are the reforms?

The new de facto property regime introduced a number of reforms including:

1. When the Court must decide what would be an appropriate property adjustment, it is required to:

(a)   Assess the financial and non financial contributions that each party made to the relationship in different ways including contributions “on behalf of” one of the parties: and

(b)  Make a comparison of the financial circumstances of each of the parties to decided whether there should be an adjustment in favour of one as against the other taking into account such factors as the parties respective ages, health, capacity to work, disparity in income, whether a party has the care of children who are dependants etc.

The latter requirement, for example, does not currently exist under the Property Relationships Act (NSW)1984 but will exist in relation to de facto couples from NSW under the Family Law Act from 1 March 2009.

2. The Family Court will have the power to split one of the parties’ benefits and entitlements under his/her superannuation fund and transfer a share to the other party;

3. When the parties dispute includes children and property, it will now be possible for the totality of the issues in dispute to be decided by one Court at the same time thereby saving the parties considerable time and costs.

For more information or to make an appointment please contact:

Carlos Turini at: cturini@elringtons.com.au or call Carlos on: 02 6206 1300

Further Reading:

De Facto Relationships : “Contracting out of the Family Law Act”

De Facto Relationships and Superannuation Splitting

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For more information call Carlos Turini on 02 6206 1306 or email Carlos at Carlos.Turini@elringtons.com.au