Once you have established that you are (or might be) in a de facto relationship (What is a De Facto Relationship) the next question is:
Are you at risk of, or entitled to make a claim, for property settlement or spousal maintenance?
Under the Family Law Act:
A court may make an order regarding property or maintenance, in relation to De facto Relationships only if the court is satisfied:
(a) that the period, or the total of the periods, of the de facto relationship is at least 2 years; or
(b) that there is a child of the de facto relationship; or
- the party to the de facto relationship who applies for the order or declaration made substantial contributions and
- (a failure to make the order or declaration would result in serious injustice to the applicant; or
(d) that the relationship is or was registered under a prescribed law of a State or Territory.
De facto property claim checklist
When assessing whether you have a claim, or are at risk of one, some of the questions your lawyer might ask you include:
- Was your relationship registered? (e.g. under the Civil Unions Act 2012 ACT)
- Did you live together for 2 years or more?
- Do you live in NSW, ACT, Victoria, Tasmania, Queensland, NT or SA?
- Did you live in NSW, ACT, Victoria, Tasmania, Queensland, NT or SA for at least a third of the de facto relationship?
- Did you separate after 1 March 2009 (for relationships in New South Wales, Victoria, Tasmania, Queensland and the territories) or after to 1 July 2010 (for relationships in South Australia)?
- Did you separate more than 2 year ago?
- Do you own shared property with your partner?
- Do you financially support your partner, or do they financially support you?
- Have you made substantial contributions to your partner’s assets?
- Has your partner made substantial contributions to your assets?
- Do you have a Binding Financial Agreement? (prenup)
2 years and/or a child
The most commonly used criteria to qualify to bring a property claim, is if the de facto relationship has been for a total of 2 years or more and/or if the parties have a child. Likewise, if your relationship was registered (for example, in the ACT, under the Civil Unions Act 2012 ACT) this can be grounds to apply. However this is far less common.
If you circumstances fall into any of these categories, then you may be at risk of, or entitled to apply to the Court for a division of property and/or maintenance.
What if you don’t meet the 2 year rule?
But what if you don’t have children, and have been together for less than 2 years? Well, there still might be a possible claim if substantial contributions can be shown and if it can also be shown that not making an Order would result in serious injustice.
What does substantial contributions mean?
In one 2005 case, which has been quoted by other Judges since, the Judge said: In my view, substantial means something more than usual or ordinary. In my view, is aimed at more exceptional circumstances… In that particular case, one year’s homemaking contributions were not treated as “substantial contributions”, and the claim was dismissed.
In a 2013 case, the party making the claim had made financial contributions worth tens of thousands of dollars to the parties lifestyle in the form of holidays, household expenses and entertainment costs. She had also made some non-financial contributions to her partner’s business.
However, in that case, the Judge considered those contributions to be “minimal” in light of the other party’s contributions, which included furniture, an overseas holiday, household expenses, restaurant charges, improvements to and interest payments and outgoings on his property, as well as the major role in the business. Her claim therefore failed.
Likewise, in a 2016 case, the de facto wife contributed some funds to the de facto husband’s account, which were then used for the relationship. She also assisted in the de facto husband’s business. However, the Judge found that “The contribution of $22,500 to the lifestyle expenses of the parties over a 20 or 22 month period is not, in my view, out of the ordinary, unusual or exceptional. The transfer of monies from one partner to another for various joint purposes is common in domestic relationships.” Her contribution to the business was also held to not be “substantial’. Her claim was also unsuccessful.
What should you do?
Caution needs to be taken in these types of cases and advice from a solicitor experienced in family law should be obtained before considering an Application to the Court. This can be a complicated area of the law, and commencing Court action can have serious consequences.
If you bring a claim and you are unsuccessful, it may be that not only do you spend a lot of money on legal fees, you could also end up having to pay some of the other party’s costs as well!
What can you do to protect yourself?
If you are worried you might be at risk of a claim in the future, one way to protect yourself is with a Binding Financial Agreement or prenup. These can be entered into either before you are in a de facto relationship or during a de facto relationship. You can read more about prenups in our blog post ‘Are Prenups Binding in Australia?’.
Or contact us to make an appointment for advice regarding your individual circumstances.