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De Facto Relationships - Is a Property Settlement Always a Certainty? Recent Case Law

10/02/2020

It is easy to assume that at the end of a de facto relationship there will be an entitlement to a property settlement.  In reality that may not always be the case.   

When is a Relationship a De Facto Relationship? 

A person is in a de facto relationship with another person if:

  1. They are not married to each other and not related to each other by family; and
  2. Having regard to all the circumstances of their relationship they have lived together as a couple on a genuine domestic basis

If there is a dispute as to whether a relationship is truly a de facto relationship the Family Court of Australia or Federal Circuit Court will look at various factors to decide whether there is a de facto relationship.  These factors include:

  • The duration of the relationship.
  • The nature and extent of the common resident. 
  • Whether a sexual relationship exists. 
  • Financial dependence and interdependence.
  • Ownership use and acquisition of property. 
  • Mutual commitment to a shared life. 
  • Registration of the relationship (Registry of Births, Deaths and Marriages). 
  • Care and control of children. 
  • Reputation and public aspects of the relationship. 

When Can a Court Make an Order for Property Division following breakdown of a De Facto Relationship

A Court can only make an Order for maintenance or property division in relation to a de facto relationship if the Court is satisfied that:

  1. The period of total periods of the relationship is at least or two years duration; or
  2. That there is a child of the relationship;
  3. That the party to the de facto relationship who applies to the Court for Orders has made substantial contributions and that failure to make an Order for declaration will result in serious disadvantage to the applicant; or
  4. The relationship is or was registered under a prescribed law of a state of territory. 

Case of Beaumont and Schultes

In the recent case of Beaumont Schultes the Court heard an application for property division made by Ms Beaumont.  The relationship had lasted only 18 months and there were no children of the relationship.  The Applicant asserted that she had made substantial contributions and that she would suffer serious disadvantage if an Order was not made.  The Court found that the Applicant had made some substantial contributions but did not find that she would suffer any serious disadvantage. The Applicant lost the case. 

The Court however dismissed the application for a number of reasons:

(a)       The relationship was a short relationship – less than 2 years. 

(b)       Both parties were more or less in the same financial position at the end of the relationship as they were at the beginning of the relationship. 

(c)       The Applicant could not show a direct financial contribution to acquisition, maintenance or improvement of property.

(d)       The Applicant had assisted with some renovations but this had done little to increase the value of the property. 

(e)       The Applicant was living rent free. 

(f)        The de facto husband paid for most things including entertainment.

(g)       The Applicant could not show that a serious injustice would result in no Order being made.   

What are the Contributions that a Court Looks For?   

These relate to matters to be taken into consideration in relation to maintenance of a former spouse. 

(4)       The court must take into account:

(a)       the financial contribution made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or

(b)       the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or

(ii)       otherwise in relation to any of that last-mentioned property;

(c)       the contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship and any children of the de facto relationship, including any contribution made in the capacity of homemaker or parent; and

(d)       the effect of any proposed order upon the earning capacity of either party to the de facto relationship; and

(e)       the matters referred to in subsection 90SF(3) so far as they are relevant.  In this regard the matters referred to in subsection 90SF(3) covers most aspects however not all aspects in relation to maintenance.  This can be discussed in conference as to what matters have an effect on the financial ability of each party to contribute.

(f)        any other order made under this Act affecting a party to the de facto relationship or a child of the de facto relationship; and

(g)       any child support under the Child Support (Assessment) Act 1989 that a party to the de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the de facto relationship.

At Watson & Watson our experienced Senior Family Law Solicitors can assist you in navigating de facto relationship break downs in relation to property/financial settlement and provide advice regarding division of assets and the likelihood of entitlements (if any) of your estranged partner.  Please contact Richard Watson Senior Family Law Solicitor or his Personal Assistant to discuss your concerns and seek advice sooner rather than later to ensure an equitable outcome when it comes to property/financial settlement.

This is only a preliminary view and is not to be taken as legal advice without first contacting Watson & Watson Solicitors on 9221 6011.

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