De Facto Relationships

In late 2008 various States in Australia surrendered to the Commonwealth Parliament the power to deal with the financial aspects of the breakdown of de facto relationships.

Any de facto relationship which breaks down after 1 March 2009 is dealt with under the Family Law Act insofar as it relates to financial settlements.  This includes both opposite sex and same sex relationships.

In order to bring a claim for financial settlement under the Family Law Act upon the  breakdown of a de facto relationship (“DFR”), a number of requirements must be satisfied including;-

1.      A de facto relationship must have existed;
2.      At least one of the parties must be Australian Citizen, or a resident in Australia and be present in Australia on the day any Court proceedings are commenced;
3.      The period, or total periods, of the de facto relationship is a least two years, subject to some exceptions or qualifications;
4.      One or both of the parties is ordinarily resident in a State which has conferred the power upon the Commonwealth, and the parties lived in that State for at least a third of the relationship.

The States which have conferred the power to deal with DFR’s upon the Commonwealth include Queensland, New South Wales, Victoria and Tasmania.

A two year limitation period from the date of separation exists within which to commence court proceedings for financial settlement arising out of the breakdown of a DFR, or alternatively to formalise an agreement concerning financial issues.

One of the significant issues which will commonly arise is whether a DFR existed at all. Identifying the existence of a DFR is not a simple as identifying a marriage relationship. With marriage relationships, regardless of the parties’ domestic circumstances or quality of the relationship, the parties receive a marriage certificate to prove the status of that relationship. No such state issued tangible evidence exists with DFR’s.

Under Section 4AA(2) of the Family Law Act, the factors to be taken into account when determining whether a DFR exists includes:-

                    (a)  the duration of the relationship; 
                    (b)  the nature and extent of their common residence; 
                    (c)  whether a sexual relationship exists; 
                    (d)  the degree of financial dependence or interdependence, and any arrangements for financial support, between them;
                    (e)  the ownership, use and acquisition of their property; 
                    (f)  the degree of mutual commitment to a shared life; 
                    (g)  whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship; 
                    (h)  the care and support of ">children; 
                    (i)  the reputation and public aspects of the relationship.

It is not necessary that all those factors listed in Section 4AA(2) exist in any particular case. If there is any dispute as to whether or not a DFR acutally did exist, and therefore whether any claim can be brought under the Family Law Act for a financial settlement, then it may be a matter for a court to determine as a preliminary threshold  issue.

Significant consequences flow from a finding that a DFR existed. Where a DFR is held to have existed, the parties are entitled to seek a division of their net assets applying a methodology equivalent to that in marriage cases, which will result in a more generous outcome for one party who may be disadvantaged in terms of, for instance, income or care of children. If a DFR is found not to have existed, then a domestic relationship may have existed, and there may be an entitlement to bring a claim under state legislation, namely the Property (Relationships) Act.
For assistance with Family Law matters, phone Dominic Wilson, Managing Partner of Craddock Murray Neumann, on (02) 82684000. Our senior Family Lawyer is certified by the Law Society of New South Wales as an Accredited Specialist in Family Law.
Further information
Contact Craddock Murray Neumann Lawyers on (02) 8268 4000 for friendly professional service.
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Date: Aug 29, 2010

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