What is a de facto relationship and how do I know if I'm in one?
Sad but true: break-ups happen and you never know what the future holds... If you and your partner go your separate ways, you (or they) can apply to the court for a determination about how your assets will be divided (including assets you own separately) if you are found to have been in a ‘de facto relationship’ and you:
(a) have been together two years or longer; or
(b) have a child together; or
(c) if the person making the Application made substantial contributions (being either financial, non-financial or to the welfare of the household).
As you can see, whether or not you’re in a de facto relationship is important. It could mean the difference between you keeping your assets or having to divide them with a former partner.
Common Misconceptions
Most people think a de facto relationship only occurs when you live with your partner, however that is not what the Family Law Act has to say. Even if you don’t live under the same roof, you could still be in a de facto relationship. When a court determines the status of a relationship, it must assess whether: ‘Having regard to all the circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis.’ (s 4AA(1)(c)).
In deciding whether the parties lived together on a genuine domestic basis, the court will consider:
The duration of the relationship
The nature and extent of common residence
Whether a sexual relationship exists
The degree of financial dependence or interdependence
The ownership, use and acquisition of property
The degree of mutual commitment to a shared life
Whether the relationship was registered
The care and support of children
The reputation and public aspects of the relationship.
2. How the courts interpret the meaning of de facto
The court is free to apply whatever weight it chooses to any particular circumstance in the above list, and not all of those listed need to be present. This means your relationship could be deemed de facto even though you don’t live together – or it could be deemed not de facto when you live with someone you consider your partner. That is what happened in the matter of Shelley v Markhov – this particular pair had been living together for 14 years, owned property together, were involved in a sexual relationship, attended functions together and were perceived to be a couple by members of the community, yet their Judge did not consider them to be in a de facto relationship.
The court found that Mr Markhov:
had subscribed to internet dating sites and chat rooms
made advances towards Ms Shelley’s friends and
told others he was searching for a life partner.
Also taken into account was the fact each party played only a limited role in the other’s family life.
Then again, it’s possible to have 1) lived together on and off 2) be seeing someone else and 3) have signed documents saying you are not in a relationship... but still be ruled de facto by law!
Take the matter of Allenby v. Kimble, which concerned parties who had lived together for three years in the middle of a 10-year relationship. Ms Allenby moved out but claimed she and Mr Kimble continued their relationship. Her assertion was that she only left the residence to assist with the sale of a property (she was a real estate agent). Mr Kimble claimed the relationship ended when Ms Allenby moved out. In his version, the reason she left was because he wouldn’t marry her and had asked her to sign a Financial Agreement (which would have excluded her from bringing a property settlement). Ms Allenby moved back in when Mr Kimble was away on a business trip, and continued living there after he returned.
In this case, factors weighing against the existence of a de facto relationship were:
They did not own or share any property
They did not pool their financial resources
Ms Allenby had signed Centrelink documents saying she was not in a relationship
There was evidence to suggest Ms Allenby was in a relationship with someone else.
Despite this, the court ultimately concluded there was a de facto relationship in this case.
That was found to be so because:
The parties lived together on and off
Ms Allenby said they shared a bedroom (although Mr Kimble said they did not)
They attended family events together
They went on holidays together
Mr Kimble renovated a room for Ms Allenby’s business.
The Judge hearing the matter said:
‘Individual or broad community perceptions of what might constitute a “de facto relationship” (including the individual perceptions of the parties) are not determinative of whether the law so regards it.’
Translation: you could be in a de facto relationship without knowing it – or in circumstances where society wouldn’t see you as de facto.
Don't live together? Doesn't (necessarily) matter.
Even if you each have your own place and only stay over a few nights a week, you could still be considered de facto. Justice Murphy in Jonah & White said: ‘It seems to me to be clearly established by authority that the fact that, for example, the parties live in the same residence, for only a small part of each week does not exclude the possibility that they are "living together as a couple on a genuine domestic basis" or that the maintenance of separate residences is necessarily inconsistent with parties having a de facto relationship.’
The issue is the nature of the union – not how it manifests itself into quantities of joint time.
In Malcher & Seares, the Applicant Mr Melcher argued that he and the Respondent Ms Seares were in a de facto relationship for four-and-a-half years. What was not in dispute was that they had lived together for only 11 months. The court decided they had been de facto for four-and-a-half years because:
The Respondent spent time with the Applicant’s children
She had given he and his children use of a ski lodge for their holidays
The Respondent had provided for the Applicant in her will, signifying a mutual commitment to a shared life.
Quite often, the person wanting a property settlement will allege the pair were living together in a de facto relationship, while the other partner has a very different perception of their relationship. The Judge can never entirely know whose version of events is true, and has to accept one person's story based on who they felt was more credible when giving evidence.
Case in point Moby & Schulter, where the Applicant told the court the parties lived together for five years, and then one week each fortnight for a further two years. The Respondent said they lived in separate households and stayed overnight together twice a week. The Judge found that the Applicant was a more reliable witness and declared that a de facto relationship did in fact exist.
What about in the case of an affair?
Sometimes a party really pushes the envelope and tries to bring an application where there are little grounds to do so. In Jensen & Taylor, Mr Taylor was married and living with his wife and children. He spent the occasional night with Ms Jenson over two-to-three years and they also holidayed together in Australia and Europe. Ms Jenson tried to seek a property settlement, alleging they had been in a de facto relationship. Being married to someone else, or even in a de facto relationship with someone else, will not necessarily prevent a finding of a de facto relationship with another. However in this instance, the court concluded they were not de facto because.
Each maintained a separate household
There was no relationship between the Applicant and the Respondent's children
The parties didn’t socialise together as a couple.
Even though Mr Taylor ultimately won and Ms Jensen’s application was dismissed, Taylor was required to take time off work in order to participate in the proceedings and he was required to fund his own legal costs of defending the Application.
3. What this could mean for you
Sadly, you might find yourself in a de facto relationship without knowing it, which could mean that your assets are in jeopardy. If you are uncertain as to whether a court would consider you de facto, consult a lawyer. You might wish to consider entering into a Financial Agreement to ensure your assets are protected if you separate. For further information please contact us to schedule an appointment.