Property Division

The family law recognises the need to protect the property interests and rights of parties to all relationships, including those to a de facto relationship and same-sex relationships. This means that, where certain circumstances are satisfied, parties to a de facto relationship or same-sex relationship can approach the Family Law Court for Orders for the division of assets of the relationship.

Historical background

In 1984, NSW became the first Australian jurisdiction to make special laws for non-marital heterosexual cohabitation, through the passing of the De Facto Relationships Act 1984. Previously, these relationships were dealt with under normal Property Law principles which led to injustices, especially for homemakers who were typically women. 

Further reforms were introduced with effect from 28 June 1999 by the Property (Relationships) Legislation Amendment Act 1999. The name of the De Facto Relationships Act 1984 was changed to the Property (Relationships) Act 1984 and the law dealing with financial adjustment including division of property, adult maintenance and financial agreements, was extended to same-sex partners.

A new federal legislation in relation to financial adjustment in relation to the breakdown of same-sex and opposite-sex de facto relationships came into force in early 2009. The Family Law Amendment (De Facto Financial Matters and other Measures) Act 2008 was passed on 10 November 2008 and most of the principal provisions of this legislation came into force on 1 March 2009. The reforms included the insertion of Part VIIIAB of the Family Law Act 1975, which deals with property adjustment, adult maintenance and financial agreements between de facto partners (same sex or opposite sex) in a manner similar to that currently provided for under Part VIII of the Act in relation to married persons. 

In his reading speech, the Attorney General said:—

 “… This much needed reform will give separating de facto couples the same rights as divorcing couples under the comprehensive Commonwealth family law system. It provides a consistent approach to de facto property disputes across state and territory borders”.

Division of property

Whilst the amendments to the Family Law Act now give separated de facto couples (both opposite sex and same-sex relationships) the same rights as separating married couples, there are additional “gateway issues” that the law considers in the case of de facto relationships that differ to the commencement and the conduct of the proceedings between parties to a marriage relationship.

The gateway issues that need to be considered are:

1. The existence of a de facto relationship

2. The duration of the relationship

3. The geographical requirements

4. The relationship breakdown time frame

For a detailed analysis of the above gateway issues see our article on “De Facto Relationships – Gateway Issues“.

Once the gateway issues have been met by satisfying the Court of all of the following requirements:

1. The parties were in a genuine de facto relationship which has broken down;

2. The parties meet one of the following four gateway criteria:

  (a) That the period for the de facto relationship is at least 2 years; or

  (b) That there is a child in the de facto relationship; or

  (c) That the relationship was registered under a law of a State or Territory; or

 (d) When assessing property or custodial claims in cases of a breakdown of a relationship, it is recognised that significant contributions were being made by one party and the failure to issue an order would result in a serious injustice;

3. The parties have a geographical connection to a participating jurisdiction; and 

4. The relationship broke down after 1 March 2009,

then the Court may make such an Order as it considers appropriate in dividing the parties’ property. 

The four step approach

Broadly speaking, the four-step approach to property division can be set out as follows:

1. Assess the extent of the assets and liabilities of the parties and determine its value (i.e., determine the net asset pool);

2. Consider what contributions have been made by the parties, including direct and indirect contributions of a financial character and non-financial character, and contributions to the welfare of the family including contributions as home-maker and parent (i.e., the “contributions stage”);

3. Consider the circumstances which relate to the present and future needs of the parties and to their means, resources and earning capacity, actual and potential (i.e., the “future needs” stage);

4. Consider the effect of the above findings and resolve what property division is just and equitable in all the circumstances of the particular case.

In applying the above “four-step approach” to property division the Court must specifically take into account the matters set out under section 90SM(4) as follows:

1. 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; and

2. 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; and 

3. 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 

4. the effect of any proposed Order upon the earning capacity of either party to the de facto relationship; and 

5. the matters referred to in subsection 90SF(3) so far as they are relevant, such as:

– the age and state of health of each of the parties to the de facto relationship (the subject de facto relationship); and

– the income, property and financial resources of each of the parties and ability to gain employment

– whether either party has the care or control of a child of the de facto relationship

– the responsibilities of either party to support any other person

– the eligibility of either party for a pension, allowance or benefit

– a standard of living that in all the circumstances is reasonable

– the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party

– the duration of the de facto relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration

– if either party is cohabiting with another person – the financial circumstances relating to the cohabitation

– any child support that is being provided for a child of the de facto relationship

Pursuant to section 90SM(3) of the Act the Court must not make an Order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the Order.

Time limits

The application for a declaration or Orders for alteration of interest must be commenced within 2 years of the breakdown of the relationship. An application, however, can be made for leave to commence the proceedings after the 2 year period. 

If you were a party to a de facto relationship or same-sex relationship and require assistance in negotiating a family law property settlement or in making an Application to the Family Law Courts for an Order for the division of assets, our experts at Prime Lawyers – Family Law Division can help. Contact us to make an appointment with a family lawyer at your nearest Prime Lawyers office.

Pay at the end Family Law

At Prime Lawyers, we recognise that there are many people who have an entitlement to property, however, are unable to engage the services of an experienced family lawyer, due to a lack of available funds. For this reason, Prime Lawyers also offers the “Blue Ribbon” payment option for approved Family Law clients. The “Blue Ribbon” payment option to approved clients is a deferred payment option, where Prime Lawyers’ legal fees are paid once the matter has ended.

To read more about “Blue Ribbon”, or to apply to join many current and former family law clients we have assisted under “Blue Ribbon” visit our Blue Ribbon Payment Option page.

We have offices in Sydney, Parramatta, Chatswood, Sutherland and Wollongong.