De facto break up entitlements

If you’re leaving a de facto relationship, it’s important to seek legal advice quickly and work out what your rights are. Essential time limits apply, and if you leave things too long, you might miss out and risk losing entitlements you may have had.

If you’re entering a de facto relationship declining to get married is not enough to protect you.  You might find yourself surrendering assets or hard-earned superannuation to your de facto partner even though the parties adhered to a ‘what’s mine is mine’ arrangement during the relationship.

If you and your partner both agree to keep your assets separate, you might want to consider entering into a binding financial agreement that can protect you if things go pear-shaped down the track.  We can provide you with advice on how to enter into a binding financial agreement or even practical information on how to insulate yourself against possible future claims.

What are you entitled to in a defacto relationship?

You may be entitled to a share of the contributions made by you and your partner before or during the relationship and any future needs you may have going forward. You should seek legal advice to work out what you might be entitled to (it might be more than you’ve been led to believe).

In certain circumstances, a family lawyer might be able to advise you on a potential ‘range.’ A range is what percentage of the property pool the court might award you if the matter were litigated. Once you have this advice, you can use it to inform your position later on during negotiations. Learn more about the property settlement process.

De Facto Relationship Entitlemnts Picture

 

 

What is a de facto relationship?

De facto relationships are defined in section 4AA of the Family Law Act.  There are some factors which a court might consider when determining whether a de facto relationship exists.  Some of those factors are:

  • How long the parties were together.
  • The nature of their shared residence.
  • Whether there was a sexual relationship.
  • Whether there was financial dependence.
  • How they owned and used property.
  • Whether there was a mutual commitment to a shared life.
  • Whether they had children.
  • Whether they represented themselves to the outside world as a couple.

How long before a de facto can claim?

For a court to make an order about de facto property matters, the period of the de facto relationship must have been at least two years.  However, ff there are children or if substantial contributions were made during this short period, this rule can be circumvented. Section 90SB of the Family Law Act provides that a court can make an order for maintenance or an order declaring or adjusting property interests for former de facto couples if the court is satisfied that one of the following gateway requirements is met:

  1. that the period, or the total of the periods, of the de facto relationship is at least 2 years; or
  2. that there is a child of the de facto relationship who is a child of both parties to the relationship; or
  3. that the relationship has been registered under a prescribed law of a State or Territory; or
  4. that both of the following apply:
    • the party to the de facto relationship who applies for the order or declaration made substantial contributions to the welfare of the family or to the property; and
    • a failure to make the order or declaration would result in serious injustice to the applicant.

Short defacto relationship case

The Family Court case of Lee & Hutton [2013] FamCA 745 (30 September 2013) determined by Watts J looked at whether there was an available gateway in the Family Law Act to allow the court to entertain Ms Lee’s property settlement application.

Ms Lee relied on three different portals, asserting:

  1. that the period of the relationship was at least two years. His Honour found the period falls 16 days short of two years.
  2. that either of her two planned but sadly unsuccessful pregnancies satisfied the condition of there being a child of the de facto relationship. His honour found that those pregnancies do not satisfy the necessary jurisdictional condition.
  3. she made substantial contributions to property and/or to the welfare of the family and failure to make the order would result in serious injustice to her. His honour found that whilst Ms Lee had not made substantial contributions to property, her contributions to the welfare of the family made up of herself and Mr Hutton, particularly arising from the first unsuccessful pregnancy and the second aborted pregnancy, were substantial. His honour also found Ms Lee met the second requirement that failing to recognise these contributions would result in serious injustice to the applicant.

Consequently, Ms Lee passed through the third gateway and the court went on to consider her substantive application for property settlement.  However, His Honour did not go on to determine that issue and referred the case back to the Registry for further directions.  Those directions would almost certainly include a direction for the parties to mediate or participate in some other form of dispute resolution.

Short Chronology of Ms Lee and Mr Hutton’s background and relationship

  • Mr Hutton was born in 1963.
  • Ms Lee was born in 1969.
  • Mr Hutton had been married on two prior occasions.
  • The parties met online through a dating website in November 2008.
  • The relationship commenced on 8 February 2009 and ended on 24 January 2011.
  • Ms Lee became pregnant for the first time in August 2009 miscarried on 4 November 2009.
  • Ms Lee became pregnant for a second time at Christmas 2009 and at Mr Hutton’s insistence terminated the second pregnancy on 20 February 2010.

Whether because of the miscarriage or termination there is is a “child of the relationship”

His Honour considered at length the decided authorities regarding the definition of “child” before deciding that neither the foetus lost through miscarriage nor the embryo terminated by the applicant, was a child for the purpose of s 90SB(b) of the Act.

What if there had been a child of the parties who had died before the time of the order

His honour then went on to consider whether the child had to be alive at the time of the order.  He found that Parliament’s failure to use the words “is or was” in the drafting of the relevant section of the Family Law Act indicated that Parliament intended the s 90SB(b) gateway to refer to a living child at the date of the order.

Watt J went on to say, “Even if the foetus or the embryo were “children” for the purposes of s 90SB of the Act, in the circumstances of this case they do not currently exist.  I acknowledge this interpretation leads to the circumstance where the death of a child born to the parties that were in a de facto relationship (which does not meet any of the other tests in s 90SB) extinguishes the possibility of a claim being made by a party under the Act. It also seems that an applicant who had a valid application at the time the application was filed ceases to have any right to have an order made in circumstances where a child of the relationship died between the time of the application and the time of the order (if s 90SB(b) of the Act is the only gateway relied upon).”

The Third Gateway/Portal – Section 90SBC

 This entry point has two requirements both of which must be met.  They are:

  1. the party who applies for the order or declaration made substantial contributions to the welfare of the family or to the property; and
  2. a failure to make the order or declaration would result in serious injustice to the applicant.

The First Requirement – Contribution

Contribution to property

Ms Lee claimed that she made a contribution to the property by the improvement of the respondent’s business assets (in accordance with s 90SM(4)(b) of the Act). Whilst the court accepted Ms Lees evidence that in a period of just less than two years she had:

  1. provided suggestions and feedback on names for various products, which Mr Hutton implemented;
  2. wrote an email for Mr Hutton to the major shareholder of his business which helped improve a strained relationship between Mr Hutton and that shareholder;
  3. participated in meetings and revised documents for Mr Hutton’s company;
  4. coordinated the production of a promotional video for the company.

His Honour found she had not made the “substantial” contributions required by the Act.

Contribution to the welfare of the family

His Honour found that a contribution made by one party in a childless de facto relationship for the welfare of both parties was a contribution to “the welfare of the family”.  However, that contribution had to be found to be substantial “judged within the confines of a period of fewer than two years” where the household employed a cleaner and gardener.

His Honour found that if the extent of the applicant’s contributions to the welfare of the family, had been limited to the evidence of the various household tasks, assistance and support provided by Ms Lee during the less than two-year relationship would not on their own have been substantial as they were not unusual or out of the ordinary.

His Honour then went on to consider Ms Lee’s further contributions to the welfare of the family as “an intended parent”:

“I accept that in this case, the applicant’s contributions to the welfare of the family also include her participating with the respondent in attempting to enlarge their family by having a child.…… [including] the applicant committing to carry a child to term on two occasions; being involved in medical consultations; her physical discomfort during the two pregnancies and the physical effects and emotional and psychological pain arising from the foetal demise and from the termination of the second pregnancy…….I acknowledge that minds might differ about what factual circumstances might satisfy the requirement that there be a substantial contribution to the welfare of the family. In exercising the discretion to make a declaration, the court must consider the facts of a particular case.……… Based upon the facts detailed above, the [Ms Lee’s] contributions to the welfare of the family in attempting to have a child with the respondent lifts her overall contributions to the welfare of the family out of the ordinary. For the purpose of s 90SM(4)(c) of the Act, I find that the applicant’s contribution to the welfare of the family constituted by the respondent and herself when evaluated within the context of their relationship and their mutual expectations was substantial.’

The second requirement – serious injustice to the applicant

The second requirement in relation to the issue of substantial contributions and that is “a failure to make the order or declaration would result in serious injustice to the applicant”. Because the question before Watt J was limited to whether a gateway a requirement had been met he noted: “the ultimate precise result cannot be known until there is full testing of the evidence at a final hearing” and that a “broad-brush” approach should be taken.

In making his determination His Honour noted that:

  • Ms Lee’s application to the Family Court, as a result, was made as a result of a threat by Mr Hutton to sue her in an NSW state court for $169,733.02 which Mr Hutton says Ms Lee owes to him; and
  • if Ms Lee successfully invokes the de-facto property adjustment provisions of the Family Law Act, the NSW State law is excluded and the ability of Mr Hutton to sue Ms Lee for a debt in a State court is ended. If not Mr Hutton would be able to sue Ms Lee for the debt in a state court, in circumstances where the State court could, as his Honour put it, “largely not take into account the history of the parties particularly their efforts to have a child together”.
  • there was a substantial financial disparity between the parties in Mr Hutton’s favour. Mr Hutton estimated his net wealth to be $4 million to $5 million.

His Honour found that there would be serious injustice if Ms Lee were precluded from obtaining the order under s 90SM of the Act.

Is a de facto partner a spouse?

Under the Family Law Act, your de facto partner is treated in an almost identical way to a married spouse.  At the end of the relationship, you might still be liable or be entitled to spousal maintenance or a property split in your favour, just like a marriage.

What are the critical time limits I need to think about?

You have until two years after the de facto relationship ended to finalise your de facto property or maintenance issues.  We strongly recommend doing something about it well before this time limit expires.  Difficulties may arise if the parties have different opinions about exactly when the relationship ended.  Perhaps the parties lived under the same roof for a while. Maybe a party filed a form with Centrelink months earlier.  Leaving things for over 12 months is a bad idea and advice about your de facto property matters should be sought as soon as possible.

How are de facto property splits worked out?

Your family lawyer will consider the property pool, the contributions you and your partner made during the relationship and any future needs you or your partner may have going forward.  In certain circumstances, they might be able to advise you on a potential ‘range.’ A range is what percentage of the property pool the court might award you if the matter were litigated.  Once you have this advice, you can use it to inform your position later on during negotiations.  You should seek legal advice to work out what you might be entitled to (it might be more than you’ve been led to believe). Learn more about the property settlement process.

How to protect yourself in a de facto relationship?

A binding financial agreement is a unique document prepared by your solicitor which says how you and your partner’s property will be divided when you separate.  It operates instead of the rules of the Family Law Act.  For many people, this is quite ideal, especially when they want to quarantine assets they built up before the beginning of the de facto relationship.

Because parties are effectively contracting out of the Family Law Act, the Family Court has been quite happy to overturn poorly drafted agreements or where specific procedures were not appropriately followed.

It is, for this reason, it is vital you receive quality legal advice about your agreement and what steps are required, and you ask your solicitor to make sure they tick all the boxes.

If you’re thinking of getting a binding financial agreement, contact us.

De facto relationships and children?

Parenting matters are treated the same as de facto relationships as they are for couples who are married.  The court addresses the children’s best interests as a paramount consideration.  Like all parenting matters, it’s best to work things out in an amicable, sensible and mature fashion with your former partner, unless there are concerns about domestic violence or child abuse.

How long is a de facto relationship?

For a court to make an order about de facto property matters, the period of the de facto relationship must have been at least two years. If there are children or if substantial contributions were made during this short period, this rule can be circumvented.

Difference between a de facto relationship v marriage?

Under the Family Law Act, your de facto partner is treated in an almost identical way to a married spouse. At the end of the relationship, you might still be liable or be entitled to spousal maintenance or a property split in your favour, just like a marriage.

If you’re entering a de facto relationship declining to get married is not enough to protect you. You might find yourself surrendering assets or hard-earned superannuation to your de facto partner even though the parties adhered to a ‘what’s mine is mine’ arrangement during the relationship.

Are same-sex considered to be in a de facto relationship?

Yes. A de facto relationship is any relationship between two people who live together in a marriage-like relationship, including same-sex couples.

Do I have to register my de facto relationship?

There is no obligation to register a de facto relationship to be entitled to a property settlement. Not all states or territories make provision in their state legislation for the registration of de facto relationships.

Need advice now?

Cudmore Legal Family Lawyers Brisbane Co is on hand to deal with all of your de facto family law matters, before and after separation.