De Facto relationships and property settlements
Currently in New South Wales, the Property (Relationships) Act 1984 (NSW) governs the way in which proceedings can be brought by a party to a de facto relationship who is seeking a property adjustment to jointly owned property.
A de facto relationship is defined as a relationship between two adult persons who live together as a couple and are not married to one another or related by family. In determining the nature of the relation the things considered in the circumstances in determining whether two persons are in a de facto relationship include the duration of the relationship, normal minimum requirement being two years unless there is a child involved, the nature and extent of common residence, whether or not there is a sexual relationship, financial relations between the parties, care and support of children, degree of mutual commitment and the ownership, use and acquisition of property. The definition includes same sex couples.
To commence proceedings in NSW, there are certain statutory jurisdictional based requirements, such as the length of residency in NSW during the relationship, and what have been substantial contributions, of either a financial and non-financial type, by the parties in relation to property and or financial resources of the parties. An adjustment of the property upon the application of one of the parties may be ordered by the Court who would apply a just and equitable division having regards to the contributions of the parties, both financial and non-financial by the parties. Superannuation interests can also be considered in applications for property adjustment. There is no presumption for equal division of property.
Apart from the jurisdictional issues governing the proceedings in de facto couples as compared to married couples, the outcome for de facto parties does not take into account post separation needs of the parties. In an application brought under the Commonwealth legislation, i.e. the Family Law Act, the Family Court looks at the needs of the parties post separation, when deciding on how to respond to an application to adjust the marital property. The ‘needs of the parties’ may include such considerations as the ages and health of the parties, capacity of either of them to earn an income, the financial impact that dependant children will have, and other commitments that the parties may have, any disparity in the post separation standard of living of the parties, the need to protect the party who wishes to continue as the ‘parent’ and other matters the Court considers appropriate.
Given the inequities between the two jurisdictions there is currently a proposal that will soon allow the de facto couples, including same sex couples, to use Commonwealth legislation and the Federal Courts to resolve financial issues as well as any parenting issues they may have. New South Wales along with other States, have now passed legislation allowing power in this area to be referred to the Commonwealth; and recently, the Commonwealth passed the Family Law Amendment (De facto Financial and Other Measures) Bill 2008 on 10th November 2008. This bill is yet to be enacted. Significantly, the new Act allows for maintenance applications for de facto parties, not general right under current legislation, and a similar ‘needs’ considerations post separation to be considered in an application to adjust property interest’s in de facto financial applications, which are similar in terms to the Family Law Act 1975 (Cth).
The Family Law Act requires a four step process in its applications, where the Court is asked to identify and value the property of the parties, look at the contributions of the parties, then consider the needs of the parties and whether the proposal is just and equitable.
The new Bill is couched in similar language, and importantly, now incorporates a ‘needs’ component currently not provided for in the State legislation.
The new Bill will allow for an equality of treatment of the parties whose relationship breaks down regardless of whether the parties are married or a de facto couple. The Act also provides the same protection for third parties and for the use of financial agreements to allow parties to come an agreement, before, during and after a de facto relationship, which will oust the jurisdictions of the Court. The added benefit for those couples with children is that it will allow them to affect a solution to their breakup in the one jurisdiction which specialises in this difficult area of law, with range of counselling and other non legal based services which is not available in State and Territory jurisdictions.
Another relevant piece of pending legislation is the Same-Sex Relationships (Equal Treatment in Commonwealth Laws General Reform) Bill 2008 which passed the Federal Senate on 24 November 2008, which impact on same sex couples. No doubt this area of developing law will be of great interest to legal and social commentators.
If you are interested to know something more about De Facto relationships and property settlements and Family Lawyers then please visit our website www.laclawyers.com.au
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