Most think a defacto relationship means, “Living together as husband and wife,” without the ceremony of marriage. Some might consider a relationship as “defacto” where the law does not, and vice versa.

In general, a court or tribunal will want to know if the partners live together as husband and wife, and that they intend the relationship to last into the future. If there is a dispute, the court or tribunal will look at the circumstances of the relationship, such as:

a)    How long the relationship has lasted;

b)    Whether they both live in the same house;

c)    How far their finances are intertwined;

d)    Whether they own assets together;

e)    The care and control of any children of the relationship;

f)    Whether outsiders see them as “Domestic”;

g)    Whether the partners intend the relationship to be permanent; and

h)    Whether they have a sexual relationship

It can be important to know whether there is a Domestic relationship because the law treats Domestic couples differently to married couples in areas such as:

a)    Maintenance for the partners (not child maintenance);

b)    Property division; and

c)    Any entitlements to a partner’s estate if they die without a will  

The Social Security Act does not use the words, defacto, or Domestic. Instead, it has specific criteria to decide whether two people are a “member of a couple.” These criteria touch on all aspects of the relationship, including:

a)    Joint ownership of major assets including real estate;

b)    Joint liabilities;

c)    The extent to which a couple pool financial resources;

d)    The basis of sharing of day-to-day household expenses;

e)    Joint responsibilities for children;

f)    Whether friends and others believe the relationship is genuinely domestic;

g)    Any sexual relationship; and

h)    The type of commitment between the couple, including the length of the relationship, and whether the couple believe the relationship is permanent and similar to marriage.

MAINTENANCE

In some States of Australia, this is possible, but not in Victoria, a partner can receive maintenance. However if a partner has a child from a Domestic relationship they can get some financial assistance for a period before and after the birth, as well as childbearing expenses. This can be ordered by the Family Court, but an application must be made within 12 months of the date of the birth, and preferably before the child is born.  

CHILDREN

The Family Law Act applies to all children, whether the parents are (or have been legally married or not). This means that if there is a dispute about who cares for the children, the same laws apply whether they are married or not.  

FINANCIAL SUPPORT FOR CHILDREN

The same laws apply whether the children are children of a marriage or children of a Domestic relationship. The amount of child support depends on the particular formula that applies to the partner’s circumstances. The Family Law Act lists certain situations where parentage of the child is presumed. For example:

a)    f a person is named as the parent in a register of births;

b)    If a court decides that, a person is the parent;

c)    If a person signs a document saying they are the parent, and

d)    If a domestic couple live together for a certain period before the child is born.

However, this is just a presumption. A person who disputes this presumption can still try to prove they are not the parent.  

PROVING PARENTAGE

A DNA test matches the DNA of a parent and the child. This is nearly fool proof, and is now often used instead of a blood test. If a person refuses a parentage test, one can apply for a court order to force them to have the test.  

THE CHILD'S NAME

The Registration of Births Deaths and Marriages Act say that one must register a surname for the child. If the child is born from a Domestic relationship, this law assumes the child will take the father’s surname unless the child is registered in the name of the mother. This means that the child will have the father’s surname unless both parents agree to use the mother’s surname.  

PROPERTY DIVISION

One problem that arises when a relationship breaks down is how to divide the property that has been accumulated whilst the partners were together. Property could have been acquired in a variety of ways, for example:

a)    A partner pays for the property equally, and it is registered in only one name;

b)    A partner pays for the property, and it is registered in both your names;

c)    A partner pays for the property, and it is registered in the name of the other;

d)    A deposit is paid by one, and the mortgage is paid by the other;

e)    A partner pays for the property, and the other promises to pay back half the purchase price later;

f)    A partner pays for the property, and the other maintains the property and does household duties, etc.

These are only a few of the scenarios that are faced by Domestic partners when they separate. This is why these situations can be so complicated. If partners are married, the Family Law Act decides how to divide property. Unfortunately, this law does not apply to property division in Domestic relationships. The law that does apply in most situations is the Property Law Act. However, it only applies:

a)    If the defacto relationship ended after June 1st 1988. This is because the part of the Act that deals with defacto relationships did not begin until that date; and

b)    If the Domestic relationship lasted for at least 2 years, unless;

    i)    There are children or;

    ii)    There is a serious injustice.

One must also:

a)    Be a resident in Victoria when the claim is made; and

b)    Have lived in Victoria for at least one third of the time of your relationship; or

c)    Have made a substantial financial or non-financial contribution in Victoria.

From 29 June 1998, the law covers all types of property, for example, furniture, inheritances, shares, gifts, etc. The only exception to this is if the partners ended the relationship before this date. In this case, property is limited to real property, i.e. real estate an anything built on it.

A partner must claim within two years after the date that the relationship ended. The court can ignore this rule if convinced that a partner would be caused real hardship. The other partner can say that allowing the claim after the usual period caused them hardship too.

Amongst other issues, the court will:

a)    Identify which property it intends to consider;

b)    Decide what contributions have been made by each partner (it does not look at contributions before they started living together);

c)    Calculate what the partner making the claim has already received for their contribution; and

d)    Decide whether this is enough, given the level of the contribution.

Under the Property Law Act, contributions considered by the court can be:

a)    Financial and non-financial contributions made directly or indirectly to the purchase, maintenance and improvement of any of the property; or

b)    Contributions to the welfare of a partner or the family – this includes contributions as a homemaker or a parent.

The Property Law Act says that the court must also consider any written agreement between the partners.

TRUSTS

A court can look at a “trust” i.e. the judge will look behind a financial transaction at the real intention of the partners to decide who will benefit from the property (and to what extent). To prove that a trust exists, the person claiming the share in the property must show that:

a)    They acted to their disadvantage, i.e. they gave up something like time (e.g. doing renovations without payment) or money (e.g. paying the rates and mortgage), and

b)    At the time of these actions, the partner must believe they were going to get an interest in the property. Sometimes a court will find that one partner is entitled to a share of the property because it would be unconscionable if this did not occur, i.e. where it would be unfair not to give the partner a share of the property, even if there was no evidence of a mutual intention to give the partner a share.  

COURT ORDERS

Types of orders include:

a)    Adjusting the property interests of one partner in favour of the other. This is similar to what Family Court judge can do to change the property interests of married couples. The court does not have to transfer the ownership of property from one partner to another;

b)    Deciding that one partner is entitled to a lump sum payment as compensation, and

c)    Ordering the sale of the property and distribution of the proceeds.

The County Court and the Supreme Court can hear disputes about Domestic property division under the Property Law Act. Choosing a court depends partly on the value of the property. The Family Court can hear some disputes where there is a related issue, for example, if there are children and an issue about the care of the children needs to be decided as well as property division.  

FINANCIAL AGREEMENTS

Partners can make a financial agreement:

a)    Before they start living as Domestic partners;

b)    After they start living as Domestic partners; or

c)    When they decide to separate, and need to agree on what will happen to finances.

Many different issues can be included in such an agreement. For example:

a)    How to divide money on a weekly basis. This will depend on whether one partner stays at home with children, or whether they want to keep wages separate, etc;

b)    Ownership of the property, even if it is held in the name of only one partner;

c)    Who pays the mortgage, and how this affects ownership of the property;

d)    What will happen if one partner cannot continue making mortgage payments?

e)    Whether money in a joint bank account is owned by both partners;

f)    Who owns superannuation benefits that are in the name of only one partner?

g)    What happens if a female partner gets pregnant and can no longer contribute to her superannuation;

h)    How property will be divided if the Domestic relationship ends;

i)    What will happen to the agreement if they decide to marry?

j)    A list of the various assets that each own at the time they start the relationship;

k)    Whether there will be any maintenance payments after the end of the relationship;

l)    Whether the length of the relationship will be considered in deciding a division of property, etc.

The Property Law Act tells the court to consider “any written agreement entered into by the Domestic partners.” Although the court is not bound by what the agreement contains. An agreement will make it easier to deal with the division of property if the Domestic relationship ends. Of course, this depends on whether the agreement was fair and reasonable in the first place. A court can then make sure that a partner abides by the terms of the agreement if there is a dispute. The court can also be asked to interpret the terms of the agreement. The court will want to know:

a)    Whether the financial agreement fairly represents both partners’ intentions in deciding what the financial arrangements will be; and

b)    Whether the agreement can be seen on its own. Alternatively, if there are other things that should be looked at (like any other understandings between both partners).  

DEATH OF A DOMESTIC PARTNER

The law that covers estates is called the Administration and Probate Act. Under this law, a partner can run into problems if:

a)    A Domestic partner is not mentioned in the will; or

b)    A member of the deceased’s family challenges the will.

If one dies without a valid will, there is intestacy. Assets will be distributed according to a legal formula. This formula is set out in the Administration and Probate Act. First in line are the surviving spouse and the children (including children born outside marriage). If there is no living spouse or children, the assets pass to any living next of kin. If necessary, a search will be made to identify any living next of kin.

Finally, if there are no living next of kin, the assets pass to the Government. This means that if there is no will, a surviving Domestic partner is not entitled to share in the estate of their partner. This is another reason why it is important to make a will. A Domestic partner can make a claim against the estate in the same way as a legal spouse if left out of the will.  

NEED MORE INFORMATION

Behan Legal assists and advises on these important issues. For an appointment, call 03 9646 0344.