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

• The persons are not legally married to each other; and
• The persons are not related by family; and
• Having regard to all the circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis.

There are a number of circumstances which will help determine whether a couple are living within a de facto relationship, namely: 

• The duration of their relationship;
• The nature and extent of their common residence;
• Whether a sexual relationship exists;
• The degree of financial dependence or interdependence, and any arrangements for financial support, between them;
• The ownership, use and acquisition of their property;
• Their degree of mutual commitment to a shared life;
• Whether the relationship has been registered, in a State or Territory with laws for the registration of relationships;
• The care and support of children of the relationship; and
• The reputation and public aspects of their relationship.

For the purposes of the Family Law Act a de facto relationship can exist between two persons of different sexes and between two persons of the same sex.  Further, a de facto relationship can exist even if one of the persons is legally married to someone else or in another de facto relationship.

The Laws apply to people who are ordinarily resident in New South Wales, Victoria, Queensland, Tasmania, the Australian Capital Territory, the Northern Territory or Norfolk Island at the time that their de facto relationship breaks down.

Parties must apply to a Court within two years of the end of the de facto relationship.  In limited circumstances, a court may grant leave to make an application after the end of that period.  The most frequently relied upon exception to the two year rule is if there is a child of the relationship.

It is possible for a couple to make it clear that they do not want these laws to apply to their relationship. Couples can enter Financial Agreement providing how they will distribute their assets, liabilities and financial resources and maintain each other if their relationship was to break down.

If the Court is called upon to make a determination in relation to the division of the matrimonial assets they must be satisfied that an outcome is just and equitable for both parties in the circumstances.

In order to determine what a fair and equitable division of matrimonial assets is, the Court will firstly determine whether it is appropriate for the Court to make an order altering the property interests of the parties.

If the Court considers intervention is required, then the following steps are followed:

Step 1 – Identify and value the net property of the parties (usually at the date of trial);

Step 2 – Consider the contributions made by each of the parties;

Step 3 – Consider each of the parties’ future financial needs; and

Step 4 – Consider whether the proposed order is just and equitable.

For the purposes of  “Step 1”, property under the Family Law Act is defined to be all that is real and personal.  This can include real estate, vehicles, shares, companies and even assets owned by a trust.  It is important to note that superannuation is also considered “property” and is therefore calculated as an asset for the purposes of reaching settlement.

In order to assess the “Step 2”, the Court relies on the factors outlined in section 79(4) of the Family Law Act.

Here the Court looks at the financial and non-financial contributions made within the relationship, namely: 

• Financial contributions made directly or indirectly by the parties towards the acquisition, conservation or improvement of any property i.e. income, gift or inheritance, or parent’s contribution towards the purchase of the matrimonial home.
• Non-financial contributions made directly or indirectly by the parties towards the acquisition, conservation or improvement of any property. Such contributions will include, for example, a person’s contribution towards the care of the children of the relationship and contributions made as homemaker etc.
  It is important to note that in certain instances, for example, wasting funds on gambling or unexplained expenditure, may be determined to be a negative contribution and work against a party at settlement.

In order to assess “Step 3”, the Court considers a non-exhaustive list of factors outlined in section 75(2) of the Family Law Act.  These factors focus on the future circumstances of the parties.

Some of these factors include: 

• The age and health of the parties;
• Income, property, and financial resources as well as the ability to obtain gainful employment;
• Who has the majority care and control of any children less than 18 years of age and the need to protect that party who wishes to continue the role of the parent;
• Responsibilities to support the other party either through child support or spousal maintenance;
• Whether there are any other financial resources such as superannuation, pensions or life insurance; and
• The length of the relationship, including the period of cohabitation prior to the marriage.

Only after giving careful consideration to steps 1 to 3 will the Court turn their attention to “Step 4” by determining whether the proposals presented by the parties are just and equitable.

There is a one-year limitation period that operates from the date parties are granted a Divorce within which to commence proceedings within the Family Court or Federal Circuit Court relating to a Property settlement.  An application outside the one-year period will only be accepted if the Court has granted leave to the applying party and is satisfied that the party will suffer a significant detriment if a property settlement is not completed.

Should the parties reach an agreement prior to the final hearing, then the matter is formalised through one of the following avenues:

• Consent Order: which is an order that both parties agree to and which is made by the Court.
• Financial Agreement: is an out of Court agreement, which requires both parties to obtain legal advice.

It is important to understand that the way property will be divided between you and your former spouse will depend upon your individual circumstances and may not be the same as others you have heard about.

A decision is based on the facts of  your individual situation to bring about a just and equitable outcome in the circumstances.