The much-anticipated laws which extend de facto rights to same-sex couples, the new NSW Property (Relationships) Act, is now up and running. Here, two family law specialists analyse some of its legal effects.
Similar legislation is now in place in other Australian States and Territories. See: Legislation Act (ACT) 2001, s169, Domestic Relationships Act (ACT) 1994, s3, De Facto Relationships Act (NT) 1991, s3A, Acts Interpretation Act (QLD) 1954, s32DA, De Facto Relationships Act (SA) 1996, s3, Relationship Act (TAS) 2003, s4, Property Law Act (VIC) 1958, Interpretation Act (WA) 1984, s13A.
It's been a long time coming, but on the 26 May  the NSW Legislative Council passed a new piece of legislation in relation to the rights of people who live together. It fundamentally extends property and inheritance rights for same-sex couples but goes further than that. The Bill was introduced into Parliament very quickly. It went through the Upper House with only Fred Nile, Mr Tingle from the Shooters Party and David Oldfield from One Nation voting against it. It received Royal assent on 7 June and came into operation on the 28 June.
There is still controversy about the appropriateness of the de facto model for the legal recognition of same sex relationships, as voiced in the Bride Wore Pink and the Bride Wore Pink II. Extensive consultation with the Gay and Lesbian Rights Lobby during the drafting stage has addressed some concerns. But, controversy aside, the impact of the legislation for NSW residents is widespread and will hopefully see the introduction of cheaper and simpler resolutions to property disputes between same sex partners on the breakdown of a long-term relationship.
For the full text of the Property (Relationships) Act go to: www.legislation.nsw.gov.au
The Property Relationships Legislation Amendment Act enormously broadens the categories of persons who are entitled to seek adjustment of property and maintenance.
The new definition of de facto relationship and the wider definition of domestic relationship affect a whole plethora of other legislation. So for example, solicitors doing conveyancing need to know about these changes.
The most important ramification is that gay and lesbian couples now are subject to the same de facto relationships laws as heterosexual couples. That is, same sex couples can make claims for property adjustment and maintenance. But more than that, the Amendment Act also introduced amendments to a whole range of other laws, to extend those laws to lesbian and gay couples.
The Duties Act, which deals with stamp duty, will now apply to gay and lesbian couples just as much as it applies to de facto partners. So there will be specific exemptions for transactions arising out of the redistribution of property following the breakdown of a homosexual relationship. The cover is also extended to gay and lesbian couples who have a partner die intestate. His or her partner will be entitled to a share of the estate including the house in which they lived. The Motor Accident Act and the Law Reform Miscellaneous Act [have] been amended so that rights flowing to a dependent partner will now flow to a homosexual partner. The Family Provisions Act has been extended in the same way as has decision making in illness and after death under the Mental Health Act and the Guardianship Act.
How Does It Work?
The Property (Relationships) Act now makes it clear when determining whether or not a de facto relationship exists you have to look at the following factors:
- the duration of the relationship;
- the nature of the accommodation where the parties live;
- whether or not there is a sexual relationship;
- the degree of financial dependence between the parties;
- whether or not they have owned, used or acquired property together;
- the degree of mutual commitment to a shared life;
- whether or not they have had children;
- how household duties are performed; and finally
- how they present themselves to the outside world.
The Act however goes on to say that this is not meant to be an exhaustive list, so other pertinent factors will be taken into account.
A domestic relationship also includes de facto relationship but it also includes a new creature called a close personal relationship.
A close personal relationship has three elements:
- It has to be between two adult persons.
- They have to be living together.
- One or each of them has to provide the other with domestic support and personal care.
It should be noted that in this respect the definition of domestic relationship is narrower than the definition in the only other piece of same sex legislation in Australia which is found in the ACT. Here there is no requirement for parties to actually even live together. The ACT law covers non-cohabitees.
Does It Change the De Facto Relationships Act?
The important thing to remember about the new Property Relationships Act is that it has not really changed the substantive law that existed under the De Facto Relationships Act. It has just extended the number of people who are covered by it.
Under the old Section 20 and the new Section 20 which are identical, the first thing the Court has to do is establish who has what property and then after that, depending upon contribution, an alteration to those property interests can be made.
So it is a two stepped process. In the first step, the Court would have to consider arguments in relation to the resulting trusts and constructive trusts to establish who had the beneficial interest in what property.
So in that sense, those equitable principles will still be considered in claims under the De Facto Relationships Act but the Court is not necessarily bound by the strict application of those principles because Section 20 gives the Court the wider duty to make just and equitable adjustments based on contributions.
How and Where are Claims Dealt With?
Property claims under the Act can be dealt with in the Local Court, the District Court or the New South Wales Supreme Court. The introduction of the new legislation does not change the Family Court of Australia's jurisdiction over matters involving the arrangements for children post-separation.
Unlike marriage, the model is presumptive. Satisfy the definitional criteria and you are automatically subject to the Act. Your partner may legitimately bring an action against you on the breakdown of the relationship. For persons whose relationships are shorter, say three or four years, this prospect may be frightening.
But for those who have been in relationships for upwards of 20 or 30 years and suddenly find themselves separated and without property in their name, the new legislation provides a welcome relief from the tortuous and prohibitively expensive pursuit of remedies through the NSW Supreme Court's Equity Division.
One or both the parties must be resident in New South Wales to make a claim and both must have been resident in New South Wales for a substantial period of their relationship (at least one-third) or alternatively, the party commencing the proceedings must have made a substantial contribution to the relationship in New South Wales.
The claim must be filed within two years of the breakdown of the relationship and both parties must be alive. If a party to the proceedings dies while the proceedings are ongoing the claim may be continued against that party's estate, but only in relation to property settlement, any maintenance claim does not survive a party's death.
If one party is unable to support him or herself adequately following the breakdown of a relationship, then he or she may have a claim for maintenance.
The test for payment of maintenance is quite strict. Maintenance is only likely to be awarded where one party has the care of a child of the relationship or his or her income earning has been [a]ffected because of the relationship.
Importantly, the Act provides for Domestic Relationship Agreements (similar to cohabitation or pre-nuptial agreement[s]) and Termination Agreements (a non-litigious way of legally ending a domestic relationship). This enables parties to discuss and put into writing their intentions with regard to property prior to entering into it or during a long-term relationship.
If you execute a Termination Agreement the normal stamp duty exemptions that formally applied to Separation Agreement[s] for de facto couples now extend to Termination Agreements between anybody who has been in a domestic relationship.
Suzanne Christie is a solicitor at Watts McCray, Sydney.
Garry Watts is a Partner at Watts McCray, Sydney and Parramatta.
both specialise in family law.