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De Facto Property Settlement (Domestic Partnerships)

When parties separate after having lived in a de facto relationship for a period of at least 2 years, it is necessary to divide the assets of the relationship in order to sever the parties’ financial relationship and provide certainty to each party moving forward in their lives.

What is a De Facto Relationship?

What if the Relationship was Less Than Two Years?

How are Property Rights Decided?

When Can I Apply for Property Orders?

What is a De Facto Relationship?

For the purpose of the Family Law Act, a de facto relationship is one where the couple are not legally married to each other, are not related by family, and live together on a genuine domestic basis.  There are numerous factors that the Court can take into account to determine whether, and for how long, a de facto relationship existed although none of them is a necessary requirement.  These can include:

  • the duration of the relationship;
  • the nature and extent of their common residence;
  • whether a sexual relationship exists;
  • the degree of financial dependence or interdependence, and any arrangements for financial support, between them;
  • the ownership, use and acquisition of their property;
  • the degree of mutual commitment to a shared life;
  • whether the relationship was registered (under the Relationships Register Act in South Australia);
  • the care and support of children;
  • the reputation and public aspects of the relationship.

A de facto relationship can exist even if one of the two is legally married to someone else or is in another de facto relationship.

What if the Relationship was Less Than Two Years?

If the relationship has been for less than two years (and there are no children) an application can still be made to the Family Court if either of the two exceptions apply:

There Court may assist if:

  1. The applicant has made substantial contributions during the de facto relationship; and
  2. A failure to recognise the substantial contributions would cause the applicant to suffer serious injustice.

In making this determination, the Court will consider contributions to the relationship made directly by the applicant or indirectly on the applicant’s behalf.  The Court will also have regard to both financial and non-financial contributions.  Non-financial contributions may include contributions to the welfare of the family in the capacity of homemaker.

(If the couple have made a binding financial agreement however, there is no time period for which the relationship must have existed before that agreement can be enforced.)

What are ‘substantial contributions’?

This is a matter of degree and will be considered in light of the circumstances of the de facto relationship as a whole.  The Court is mindful that contributions are to be considered in the context of the short nature of the de facto relationship, otherwise the general 2 year relationship requirement would be of little purpose.  The Court has considered this concept in various cases and has interpreted ‘substantial contributions’ to mean:

  1. ‘something more than usual or ordinary’;
  2. ‘contributions having real worth, value or importance’; and
  3. ‘ample or considerable amount, quality or dimension’ or ‘large’.

What is ‘serious injustice’?

The injustice suffered needs to be more than mere or slight. It must be of significant weight or importance.  It must be ‘of a type that the Court cannot tolerate’ and that ‘requires the Court to intervene’.  The level of injustice needs to evoke the concepts of unfairness and serious imbalance before the Court will depart from the general rule.

When making this determination the Court will also have regard to the position of the applicant at both the commencement and breakdown of the de facto relationship.  It is unlikely the Court will consider the applicant is likely to suffer serious injustice if their financial position remains the same.

How are Property Rights Decided?

For the purpose of property settlement proceedings separating de facto couples are treated the same way that separating married couples are treated. The same considerations apply when determining the appropriate division of the assets of the relationship, including:

  1. The initial contributions of each party. What did each party own at the commencement of the relationship?;
  2. What contributions, both financial and non-financial, did each party make throughout the relationship?;
  3. What, if any, additional contributions did each party make throughout the relationship? For example, did one party receive any lump sum payment during the relationship, perhaps an inheritance or insurance payout?; and
  4. What are the likely future needs of the parties? Are these relatively even, or does one party have a more significant future needs? Considerations may include a significant disparity in the future earning capacity of one party, primary care of children or a disability that limits one party’s ability to earn income, etc.

When Can I Apply for Property Orders?

It is important to note that different time limits apply to de facto couples and married couples who seek to file property settlement proceedings in the Family Court or Federal Circuit Court.  De facto couples are subject to a 2 year limitation in which to file property settlement proceedings, with the 2 year time limit commencing from the date of separation.  An application can only be made after that time if the Court is satisfied that hardship would be caused to the person or a child if they aren’t permitted to do so (or if the application is for maintenance, the person is unable to support themselves without an income tested pension, allowance or benefit.)

Need Help?

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*Please note: Websters lawyers is a South Australian based law firm, handling matters exclusive to South Australia, with offices located in Adelaide, Ridgehaven and Smithfield.

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