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Recent Developments in the Family Law Act with Regards to Property held by Defacto Couples.

Recent developments in the Family Law Act 1975 (“the Act”) have come into effect as of 1 March 2009.  A general overview of the amendments clearly enunciates the fact that the legal distinction between the definition of a defacto couple and a married couple is now a thin line. This effectively means that some defacto couples may tread dangerous waters if initially the parties had been of the understanding that such relationships are formed to avoid the legal implications of a marriage. The amendments reveal that the fishing net has been cast widely to bring defacto couples and married couples under one overarching unifying principle.

To begin with, defacto couples now have access to the Family Court of Australia and the Federal Magistrates Court (the “Family Law Courts”) for property and spousal maintenance matters, just like married couples. The new laws also provide that separating defacto couples should obtain property settlements on the principles that apply to married couples under the Act. Consequently, the Family Law Courts can order a division of any property owned by the defacto couple separately or together as joint owners. An order that the superannuation held by each partner be spilt, is also possible when this was unheard of before. Previously, defacto couples were not entitled to share their partner’s superannuation, notwithstanding the number of years they had been together.

The ambiguity lies, however, in determining what exactly is a defacto relationship, considering that such relationships are not normally in writing or registered. The only guidance the Act provides is to assess whether two people (including of the same sex), who are not married or related by family, are involved in a relationship on a genuine domestic basis. This may very well be the loophole that certain parties wanting out of the relationship without any legal consequences may rely on. However, the scope of such an argument is yet to be decided by the court. Nonetheless the legislation provides that defacto couples can either choose to be or not to be covered by these new laws via a binding financial arrangement. The choice must be in writing and signed by both parties after each has obtained independent legal advice and received a signed statement from their lawyer that the advice was given. If the parties choose not to be covered by the new laws, they still may negotiate a binding financial arrangement in relation to property distribution and spouse maintenance if the relationship breaks down.

On the other hand, it is a consolation to same-sex couples that their rights will be recognized in the same manner as heterosexual couples. The definition of defacto couples has been widened to include same sex couples. The Law Council of Australia has also strongly welcomed this change, indicating that any progression towards eliminating discrimination means being one step closer to fulfilling Australia’s international human rights obligations. Moreover, the amendments denote that the rights of affected couples will not be confined to determination by States and Territory legislation but will be disputed in accordance with federal laws, thereby promoting a consistent scheme under which defacto couples’ rights and disputes are resolved.

At Berrigan Doube, we note that any policy change comes with both positive and negative influences and it is essential to go through the legislation together with a solicitor with a fine-tooth comb to obtain the best legal advice in relation to the specific needs of you and your spouse. If you have any queries in relation to the above or seek assistance in respect of family law matters please contact BDL.