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De facto to equal married in the bust-up property stakes

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Married couples may no longer be “on a higher plane” than de facto couples, who should have the same rights to property under settlements, says the NSW Law Reform Commission.

Such equality would give de facto spouses women in particular a bigger claim on property, including superannuation, when a relationship ends, and a stronger right to spousal maintenance.

Existing NSW property law is the last bastion of discrimination against de facto couples. Earlier reforms ended differential treatment in matters such as custody of children and disputes over wills.

A commission discussion paper says cohabiting women are disadvantaged in property disputes compared with married women because the state government believed at the time it enacted the Property (Relationships) Act 1984 that “de facto couples were not to be equated with married couples”.

Nearly 20 years on, says the paper, commissioned by the Attorney-General, the number of de facto couples had doubled. “For many, marriage is no longer seen as the yardstick for all close personal relationships.”

Property disputes by married couples are dealt with under the Family Law Act 1975, which takes into account a couple’s financial and non-financial contributions to the marriage (including home-making), and a couple’s future financial needs.

This usually means a 50-50 division of property. A full-time home-maker who cared for children and reduced her earning capacity, can argue for a bigger share, including spousal maintenance, based on future needs.

For de factos, state law takes into account only a couple’s past financial and non-financial contributions. “Future needs” are not considered.

The implication is that marriage gives “rise to an obligation toward the other party’s future welfare, but other relationships do not”, the paper says.

The length of the de facto relationship (besides a required minimum of two years’ co-habitation), how the couple arranged their financial affairs, and how those decisions affected future earning capacity were also not taken into account.

As well, a de facto wife’s contributions as home-maker had been under-valued, the paper says. NSW judges had often offset her contributions against her enjoyment of “free rent” and food.

Tom Altobelli, an associate professor at the University of Western Sydney law school, said de facto couples could rack up huge legal fees simply for the woman to secure an equal division of property.

A woman who had lived in a de facto relationship for 32 years, and was a full-time home-maker and parent, was awarded 16 per cent of the value of the property by the NSW Supreme Court in 1999. Appealing against the decision in 2001, she won 50 per cent.

“But this case would have got nowhere near a court and cost nothing in legal fees under the Family Law Act,” Professor Altobelli said.

He said marriage was different from a de facto union more people entered it with a sense of long-term commitment. “But that is irrelevant; I see people at the end of a relationship mums who have cared for kids and been out of the workforce. We have been getting this wrong and people have been suffering.”

The ACT and Tasmania have adopted the Family Law Act model and Queensland a similar model.

The commission welcomes submissions including on whether the law should require a two-year minimum cohabitation before it makes its final recommendations to the Government.

By Adele Horin. – 613 Words
24 June 2002
The Sydney Morning Herald