Short De Facto Relationships – Substantial Contributions and Serious Injustice

March 3, 2020

When a short de facto relationship breaks down there are limited circumstances under which the Family Court can decide on who gets what.  In order to apply in the Family Court, the parties need to satisfy at least one of the following criteria:

  1. The parties have been in a de facto relationship for a period of at least two years; or
  2. The parties have a child together; or
  3. The parties registered their relationship under the laws of a State or Territory of Australia.

Despite not meeting these criteria, a woman recently applied to the Family Court seeking an order for the alteration of the property interests of the parties to a de facto relationship.  The parties did not agree on the length of the relationship, however both agreed the relationship lasted less than the two year requirement. The woman had two children from a previous relationship but there were no children of the de facto relationship, and the parties did not register their relationship.  Consequently, the parties’ circumstances failed to satisfy the general rule to be able to take the case to the Family Court.

There is however, an exception to the general rule. 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.

These contributions to the relationship can be financial, or non-financial such as contributing to the welfare of the family as ‘homemaker’.  Also they might be made by the applicant directly, or indirectly by someone acting on their behalf.

This exception formed the basis of the woman’s claim. In addition to the woman asserting she made substantial contributions by way of home duties, she also claimed that she and others on her behalf made substantial contributions by assisting with renovations to the respondent’s various properties. She further asserted that a failure to make an order for property division would cause her to suffer serious injustice.

To consider the woman’s application, it is necessary to interpret two key concepts. Firstly, the concept of ‘substantial contribution’ and secondly ‘serious injustice’ (the two part test). The Court must consider each individually to determine whether it has the jurisdiction to make the orders sought by the applicant.

Were There Substantial Contributions?

To be regarded as having made ‘substantial contributions’ to the relationship means that the person has done more than what is ‘usual or ordinary’.  The contributions must have real worth, value or importance and be of a significant amount.  This will depend on the circumstances of each individual case.

The woman asserted that she had made direct financial contributions by increasing the equity in the respondent’s properties by assisting with renovations which increased the value of the properties and for which she was not paid. Secondly, the woman asserted that she made indirect financial contributions as the respondent had received tax benefits as the sole owner of two rental properties and his superannuation balance had increased due to her ‘support’ of his career progression. The Court held that both arguments failed for different reasons, including having no basis and being unsupported. However, the issue of assisting with renovations would be taken into account when considering non-financial contributions. Any financial contributions by the woman made towards food, utilities or entertainment were considered unsubstantial in nature.

Non-Financial Contributions

The respondent accepted the woman had made significant non-financial contributions. Namely, some 220 hours of labour to assist the respondent with renovations to his various properties. It was therefore necessary for the Court to consider each of the woman’s assertions relating to non-financial contributions made by her and on her behalf. Non-financial contributions considered by the Court included:

  1. Unskilled manual labour provided by the woman to assist with renovations to the respondent’s properties. The Court held this contribution to be substantial non-financial contributions of the woman.
  2. Contributions to the welfare of the family by the woman. The Court held that both parties contributed to the welfare of the family as both worked fulltime and assisted with the renovations. Additionally, the woman was undertaking a course of study and caring for her two children throughout the relationship. The Court noted that the respondent financially supported and cared for the woman’s two children throughout the relationship. Consequently, the Court determined this was not a substantial non-financial contribution by the woman.
  3. Unskilled labour provided by the woman’s pre-teen children. In light of their age and skill level, their contribution was held to be unsubstantial.  In any event, the respondent paid the children $400 each for their efforts;
  4. Unskilled labour provided by the woman’s mother, sister, brother-in-law and friends. All parties were compensated by the respondent for their efforts by way of free accommodation and food or cash payments.  It was therefore held that they were not indirect non-financial contribution of the woman.
  5. Skilled labour provided by the woman’s two brothers was held to be independent of any non-financial contribution of the woman. Prior to performing renovation works, the brothers discussed payment with the respondent and would not have performed the works without payment. Consequently, the brothers’ labour was held to be a business transaction. The Court noting, should the brothers be dissatisfied with the payment received they may choose to pursue legal remedies available to them independently of this application. 

The Court accepted the woman had made significant non-financial contributions through unskilled manual labour to assist with renovations to the respondent’s properties. As a result of this determination, it was then necessary for the Court to consider whether a failure to make an order altering the property interests of the parties will cause the woman to suffer serious injustice.  To do so, it was necessary to consider the concept of ‘serious injustice’.

Was there ‘Serious Injustice’?

To satisfy the second part of the test the woman needed to show that she would suffer a ‘serious injustice’ if the Court didn’t intervene.  The injustice must be of significant weight or importance

The injustice suffered needs to be more than mere or slight, but has to be of significant weight or importance, generally resulting in a serious ‘imbalance’.  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 her financial position remains the same.

On the evidence before the Court, the woman entered and left the relationship in a similar financial position, including retaining sole ownership of a property purchased prior to entering the relationship. Additionally, the woman left the relationship part way through her studies and in full time employment.  The renovations to the respondent’s properties did not significantly increase the equity in the properties, rather rendered the properties liveable and rentable.  Throughout the relationship, some seventeen months in duration, the woman lived in the respondent’s properties free of charge and was assisted financially by the respondent personally and in relation to her children.

In the end, the woman’s application was unsuccessful.  After weighing up all the circumstances, the Court held the woman failed to satisfy both aspects of the two part test as required.  The woman failed to demonstrate that she would suffer serious injustice if the Court did not make orders adjusting the property interests of the parties to the relationship.  It appears the two part threshold test may pose a challenge to applicants seeking to rely on the exception to the general rule.

If you feel that you have made significant contributions throughout your short de facto relationship which have not been recognised and have caused you to suffer serious injustice – speak to a specialist Family lawyer at Websters Lawyers to find out where you stand.  We offer a free initial consultation where you can find out about your property rights.  To see a specialist Family Lawyer called 8231 1363 or contact us here.

Beaumont & Schultes [2019] FCCA 1831