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DE FACTO PROPERTY SETTLEMENTS AND COVID-19: WHAT YOU NEED TO KNOW

The COVID-19 pandemic has brought much of our regular life grinding to a halt. Even the companies, shops, government departments and other places that remain open are operating under changed conditions. Anxiety and uncertainty abounds, and for those who’ve been in a de facto relationship that has broken down, the pandemic has added some additional factors to the inevitable property settlement equation.

Here, we answer some common questions and highlight issues you need to be particularly aware of over the coming weeks and months if you’ve been in a de facto relationship.

Was I in a de facto relationship?

First things first. Some people are a little unsure of whether the relationship they were in would be seen as a “de facto” one in the eyes of the law. It’s an important distinction, since legal consequences can flow from a relationship being a de facto one – including whether you’re entitled to apply to the court for financial orders.

The Family Law Act recognises a de facto relationship where you are living as a couple on a genuine domestic basis but are not married or related by family. The definition specifically includes same-sex relationships. This definition is the same throughout all Australian states and territories – including Western Australia which has its own Family Law Court system.

The most recent statistics indicate 10.6% of Australians over the age of 15 years are in a de facto relationship.

How do courts work out if you’re one of those Australians in a de facto relationship? There’s a list in the legislation that guides the court and includes these things:

  • the duration of the relationship
  • the nature and extent of the common residence
  • whether a sexual relationship exists
  • the degree of financial dependence or interdependence, and any arrangements for financial support
  • the ownership, use and acquisition of property
  • any mutual commitment to a shared life
  • whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship
  • the care and support of any children
  • the reputation and public aspects of the relationship.

The more of these factors that are present, the more likely the relationship is a de facto one. Ultimately, though, each family law case will turn on its own unique set of facts.

Can I apply to the court for property orders following a de facto relationship breakdown?

If you’ve been in a de facto relationship for at least two years, the answer is yes.

However, you can also apply for property orders if:

  • there is a child of the relationship, or
  • one party has made substantial contributions and a serious injustice would be caused to that party if no order is made in their favour, or
  • the de facto relationship was registered under a state law.

I haven’t applied for property orders yet – is that a problem?

It could be.

You must apply for de facto financial orders within two years of the breakdown of your relationship, in accordance with section 44 (5) of the Family Law Act 1975. If you haven’t applied within this time period, you need the Court’s permission to apply.

The situation is a little more difficult for property settlements following a de facto relationship when compared to property settlements following a marriage. For married couples, the time limit is only one year but that time limit starts running when the divorce order takes effect.

A divorce order date is clear – it’s indisputable.  However, for de facto couples the time starts running from the date of separation. That date can be a lot less clear.

How does all this work in the real world? Let’s consider some hypothetical cases.

CASE 1: Max and Stevie

Max and Stevie are living under the one roof at the moment but had been leading separate lives for some time. How long?

Well, Max considered the relationship over after they’d had a huge row at a friend’s party 22 months ago. Stevie, on the other hand, has been a little more optimistic about the future of the relationship – especially after they resumed a sexual relationship for a few months recently.

That all ended once the COVID-19 crisis began, though – there’s just too much stress with Max working long hours in a hospital and Stevie losing her job and all of her income. They both agree it’s over.

But when was it “over”? Twenty-two months ago or when the crisis began and their brief fling ended?

Here’s what Max needs to know:

  • If the separation occurred 22 months ago, he has only two months left to apply to the court for property orders before the limitation period runs out.
  • He will need the court’s permission to apply for orders once the limitation period runs out.
  • Max should immediately consult one of our Sydney family lawyers and discuss what evidence he needs to put together to begin the application.
De facto property settlement

CASE 2: Silvana and Tarik

Silvana and Tarik, who have a young daughter aged 7, have separated. Tarik has now been left to the full-time care of their daughter and his son aged 14 from a previous marriage. Silvana has always referred to Tarik’s’ son as her son.

Since separation, Tarik and the children are all living in a small studio apartment with the children sharing bunk beds. Silvana has moved on with a new partner, Samson, and is living with him in a multi-bedroom mansion in Potts Point.

Tarik came into the relationship with few assets. Silvana had a home in her name, a self-managed super fund that owns two properties (purchased during the relationship) and mortgages which appeared to have heavily increased over the past few years. She’s now acting a little suspiciously, entering into different businesses with Samson and offering Samson loans. She claims she’s now making losses on her business activities and investments.

Tarik says they separated 18 months ago but Silvana says this is nonsense. Although they were living together and going to parties with their son, she says the relationship ended 3 years ago.

Silvana pays nothing to help with their daughter. Silvana’s lawyer tells Tarik the relationship is outside the two year time limit and therefore it’s virtually bad luck for him. Tarik emailed the lawyer to say he just forgot to do anything about it all because of all the stress.

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Here’s what Tarik needs to know:

  • Despite Silvana’s lawyer’s positions about the case, he can make an application for permission to seek orders after this time.
  • If he sought his own independent advice from one of our Sydney family lawyers, about huis family law issues he’d be told that an application will be permitted if the court is satisfied:
  • he or the child would suffer hardship if it’s not granted, or
  • in the case of an the application for maintenance, that at the end of the standard two year application period he is unable to support himself without an income tested pension, allowance or benefit.

In making its decision, the court will weigh up the hardship caused to the parties in refusing or allowing the application. Hardship is about more than just loss in the eyes of the law – Tarik would have to show his case is worth pursuing and has a real chance of succeeding. He’d also need to show why he didn’t make the application before the time limit expired, but this last issue is usually more of a hurdle when so many years have passed since the time limit expired.

If, like our couples in the scenarios above, you’re in a situation where the separation date may be disputed or may be running out, talk to our Sydney family lawyers about your options.

A deadline isn’t my only dilemma – can you help?

In the above scenarios, and perhaps in your situation, there may be a whole host of other issues going on.

Stevie may be concerned that she’s now unable to contribute to the bills – and wondering what implications that will have for a property settlement. She may also be scared to act, since there’s a history of domestic violence in the relationship and she doesn’t want to inflame things and while they are still forced to live together.

Max may be wanting it to be over so he can move on – but not wanting to lose out while experts are predicting a downward spiral in house prices.  Max therefore wants any defacto property settlement or outcome to be delayed and therefore if proceedings are issued within time and based on his version of events, he is not too worried about well-known court delays in hearing matters on a final basis (sometimes 2 – 3 years).  Stevie wants and defacto property settlement now, because she can afford to keep the house with expected 10-30% drop predicted in house prices and pay out Max at the same time, but is worried as her lawyer has told her Max might be able to ask for the matter to be adjourned for a few years, which open to the court to do under the Family Law Act.

Tarik may be worried because a friend has told him the court is unlikely to even be able to hear his application for 12 months or more about whether he can proceed out of time. He may be worried about what Silvana will get up to in the meantime since her lawyer is writing to him saying she has no obligation whatsoever to disclose any documents to him about her finances. There might be nothing left by the time his application is heard. He might have even more pressing issues. Perhaps he has some big bills coming up, including some for the children, and he’s worried they will soon be homeless.

While we may have been forced to press pause on many aspects of our life, we can’t press pause on legal time limits. It’s important to get family law advice now from one of our Sydney family lawyers if you have concerns or are unsure of where you stand, especially during this COVID-19 period and where de facto property settlement covid issues are impacting in family law matters.

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