The Commonwealth Parliament has recently passed the Family Law Amendments (De Facto Financial Matters and Other Measures) Act 2008. The legislation brings de facto relationship property division under the Family Law Act. However, this long anticipated and far reaching change in the law for the division of property of de facto couples will not apply in South Australia.
Western Australia and South Australia are the only two States not to have referred power to the Commonwealth to legislate about de facto couples. Accordingly, South Australia is still governed by the State legislation, the Domestic Partners Property Act. The non referral of powers by South Australia creates a difficult landscape for de facto couples. Currently, de facto couples in South Australia will miss out on important provisions which will apply to their interstate neighbours.
The important new de facto provisions relate to issues of jurisdiction, spousal maintenance, superannuation splitting, orders and injunctions against third parties and financial agreements.
Currently under the State law, to establish jurisdiction to bring a claim for division of property the parties must have lived together in a de facto relationship for three years, or there is a child of the relationship.
Under the amending legislation, the relationship need only be for two years. Further and importantly, if the applicant has made substantial contributions to property to the extent sufficient to cause a serious injustice if an adjustment were not made, then that will be sufficient to establish jurisdiction. Accordingly under the amending legislation, the relationship could be for a very short period, perhaps as long as it takes to write a cheque!
Spousal maintenance, often referred to as alimony, has always been part of the law for married couples but not de facto couples in this State. However the amendments now give the important and valuable right to make a claim for spousal maintenance upon the breakdown of a de facto relationship.
Superannuation splitting allows a superannuation interest to be shared by in effect creating two separate accounts, one for each spouse. Until the amending legislation, superannuation splitting only applied to persons who were married. Superannuation splitting however will now be extended to those de facto couples outside South Australia including same sex couples whose relationship breaks down.
Orders And Injunctions Against Third Parties
Protection for creditors including trustees in bankruptcy now appears under the new legislation at every relevant stage in proceedings between de facto spouses. Previously difficulties were involved in proceedings where third parties were involved. Often a party to a de facto relationship was at a distinct disadvantage in the case of a bankruptcy when compared with the law applying to married persons.
Under the current State law it is possible to have a Certified Domestic Partners Property Agreement to make provision for the division of property of de facto couples in the event of breakdown of the relationship. These are very similar to binding Financial Agreements which married persons, or those about to marry, can have under the Family Law Act. However, de facto agreements which may be entered into under the current State law may be found wanting, if (presumably when) the State Government refers power to the Commonwealth and those de facto agreements have to be interpreted under the regime of the amending legislation.
Although the intention of the legislation appears clear, which is to accept all pre-amendment agreements provided they conform with the legislation under which they were made at the time, this raises two areas of uncertainty. Firstly it is possible under the State legislation to have a Domestic Partners Property Agreement which will be presumptively binding although it does not have a Lawyers Certificate of independent advice. However, under the amending legislation all Financial agreements require Lawyers Certificates and it is therefore probable that a non certificated Agreement will fail because of the absence of such a Certificate. The other area of uncertainty arises from a landmark family law decision in a case called Black which has made it clear, that conforming with the spirit and intention of the law is not sufficient. The ramifications of the decision in Black create considerable uncertainty for agreement makers under the present State law ...... dammed if you do and dammed if you don't!
The amending legislation bridges the gap between the manner in which property is divided between married and unmarried couples upon the breakdown of a relationship. In the past for many, a de facto relationship was a lesser version of marriage and provided a way of preserving financial independence as an alternative to the financial consequences of marriage. For others, it represented a commitment of equal force to a marriage and although they felt deserving of the same rights as a married couple, often one party's commitment was not capable of being reflected in the applicable State law in the event of the breakdown of the relationship.
Whatever the view taken by society the new legislation will soon treat all relationships, married or de facto as being the same under the law if parties live together for at least two years, or have a child together or one makes a substantial contribution to property. As to what constitutes a substantial contribution remains to be determined but traditionally Courts exercising family law jurisdiction, have if anything, taken a broad view of what constitutes unjust enrichment of one partner arising from a domestic relationship.
Persons who have gone through a difficult and perhaps costly separation will not perceive the new legislation in a very favourable light. Those wishing to remain financially independent can only rely upon the new form of Financial Agreement under the amending legislation.
All of this for the moment of course is conjecture for those living in South Australia. It seems inevitable that the State Government will refer power to the Commonwealth. The big question is when and what happens in the meantime. The only thing that can be said with certainty is that parties who wish to regulate their affairs by an agreement should ensure that the agreement complies not only with the current State legislation, but also has the capacity to stand up to scrutiny under the new Commonwealth de facto property law amendments. It is a complicated area and one which should only be undertaken with a legal practitioner experienced in this highly specialised area.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.