Wednesday, 12 November 2008

De facto paper

This is the very long paper I prepared for a scheduled Lexis Nexis seminar last week about the de facto property amendments to the Family Law Act. The paper does not contain reference to the 34 amendments in the Senate.


Proposed changes to de facto property matters
By Stephen Page[1]

I am indebted to the valuable paper presented by Neil Jackson at the Qld Law Society/ Family Law Practitioners Association Residential: “De Facto Matters – the story so far….. and the story to follow”

Introduction


The States legislate for De Facto Relationship Property Laws

The first State to legislate was New South Wales and this arose directly from the 1983 Report by the NSW Law Reform Commission:-

Report on De Facto Relationships

That report stated[2] :-

“We recommended that the Court, in proceedings between de facto partners, should have power to adjust their property rights having regard to their respective contributions. However, in some cases it will be necessary to determine the existing property rights to the parties under general principles of law, without recourse to the power to adjust those rights.

These cases include the following:-

When either party wishes to invoke the jurisdiction of the Court to adjust property rights;
When either party is able to invoke the jurisdiction, because the basic requirement of cohabitation for a specified time has been satisfied, or proceedings have not been instituted within the required time;
Existing rights are uncertain and must be ascertained before an order for adjustment can be made;
Where a third party claims an interest in dispute of property.


“Of course even without a specific power to issue such a declaration, the Supreme Court would be empowered to ascertain the existing rights of the parties as a prelude to making an order for settlement of property. The Supreme Court already has power to ascertain the rights of the parties in accordance with the ordinary principles of Contract & Property Law. The Court also has power, where appropriate, to issue a declaration as to the parties’ rights. Nonetheless, we think that the Court’s power to issue a declaration should be expressly included in any legislation dealing with the financial relationship between de facto partners.”

The proposal by the Commission that there be a preservation of the common law and equitable principles was adopted in the NSW legislation and subsequent legislation in all of the states and territories. Such a proposition wasn’t novel, as it has always been contained in s119 of the Family Law Act 1975:-

“119 – Married persons may sue each other

Either party to a marriage may bring proceedings in contract or in tort against the other party.”

What was clear from the beginning in NSW was that only heterosexual de facto relationships would be covered. The contentious area of same sex de facto relationships would have to wait until later. All the other states and territories also legislated to cover de facto property disputes.

Same sex relationships were covered in all states and territories save South Australia which remains limited to heterosexual couples:-

ACT 1994
NSW 1999
Qld 1999
Victoria 2001
Western Australia 2002
Tasmania 2004
Northern Territory 2004

There were certain political difficulties for those proposing that same sex couples be included. An illustration of what happened in Queensland demonstrates this. The Qld Law Reform Commission in its report on De facto relationships in 1992 recommended that there be specific legislation to cover property settlement for de facto couples and that this include same sex couples. With some fanfare, shortly thereafter the then Attorney General being Deane Wells announced that there would be such legislation, but it did not come to pass.

A subsequent Attorney-General, Matt Foley, raised the issue in the Labor Caucus, to be told by fellow caucus members that there would not be approval to cover same sex couples.

To get around this difficulty, Mr Foley proposed to caucus on a later occasion that there be alterations to the Property Law Act by the insertion of a new Part 19 which was in essence an administrative step. This was in effect the stand alone legislation proposed by the Qld Law Reform Commission, but it faced no opposition in caucus because it was seen as an administrative change, not something of controversy.[3]

The preference as stated by the Queensland Law Reform Commission in its report in 1992, and indeed by the then Queensland Attorney in 1999, was for amendments to be made to the Family Law Act to enable de facto couples to go to the Family Court to sort out their property difficulties at the same time as they sorted out their children’s matters. Unfortunately, it would not be until now that that step would occur.

The difficulties with the current State based systems are well known:

Jurisdictional issues between the States;
Inconsistent legislation both with each other and with the Family Law Act;
Differing jurisprudence, so that there are inconsistent results for similar facts in different States, and inconsistent results with married couples under the Family Law Act;
A lack of case law in some jurisdictions, making it very hard for practitioners to properly advise their clients;
The inability, with limited exceptions, to split superannuation;
Except in Western Australia, de facto couples having to litigate children’s cases in the Federal jurisdiction, and having to litigate the property cases in the State jurisdiction.
Except in Western Australia, cases were not dealt with by specialist courts, such as the Family Court of Australia and the Federal Magistrates Court of Australia.

The only State that legislated on a consistent basis with the Family Law Act was that of Queensland. This was with two exceptions: Queensland was unable to legislate to allow super splitting, and does not permit spousal maintenance claims.

Powers

The majority of States and Territories agreed at the meeting of the Standing Committee of the Attorney-General (SCAG) on 8 November 2002, to refer their powers to the Commonwealth for de facto property disputes. Since then Queensland, NSW, Victoria, Western Australia, the Northern Territory, and Tasmania have enacted legislation to that effect. The Western Australian legislation is of narrower compass.

Neither the ACT nor South Australia are yet to introduce legislation. This isn’t the problem with the ACT as the Commonwealth, as indicated by the Attorney-General, the Hon. Robert McClelland in the second reading speech, intends to rely upon its territories power, as is the case for the Norfolk Island and the Northern Territory.

Prior to the Federal Election there was the classic Mexican stand off. John Howard announced that the Commonwealth would enact de facto relationships legislation. The States (all of which were Labor) were insistent that same sex couples be included whereas the Commonwealth (which was Coalition) was insistent that they not be included.

Matters came to a head in 2007 when the Human Rights & Equal Opportunities Commission released its report “Same-Sex: Same Entitlements” tabled 21 June 2007. That report stated [4] :-


“Only married couples can access the federal Family Court to determine how to divide the property of a relationship. Same-sex and opposite-sex de facto couples must currently go to the relevant state or territory jurisdictions to decide property-related matters. Accessing two different jurisdictions creates additional costs. In addition, state and territory jurisdictions cannot consider the same range of assets when making a property settlement. Thus, de facto couples may end up with less comprehensive property settlements than those available to married couples.

New legislation proposed by the federal government should allow opposite-sex de facto couples to access the federal Family Court for property matters. However, the government has indicated that this new legislation will not assist same-sex couples. If this occurs there will be discrimination against same-sex couples as compared to opposite-sex de facto couples”.

The report [5] states the benefit of the federal property division regime:

· Covers a larger pool of the couples’ shared assets, including superannuation assets;
· Tends to attribute a higher value to non-financial homemaking contributions;
· Has broader powers to make property orders or issue injunctions against third parties, including creditors and family companies which are not in the legal control of one partner;
· Includes broad consideration of future needs as well as past considerations in making property adjustments;
· Uses informal dispute resolution systems which are cheaper and faster than the state regimes;
· Contains provision for periodic or lump sum spousal maintenance payments where appropriate (such as in cases when one party has a very limited earning capacity or where a party has extensive financial resources but few assets available for division).

In short, the federal property division regime:
· covers a larger pool of the couples’ shared property,
· can divide such property with a far greater degree of flexibility, and
· takes into account a wider range of factors and circumstances of the parties during and after the relationship in making any adjustments.

The state legislation referring power extends the reference of power of the Commonwealth to all de facto relationships that cease prior to the commencement of the Act. The Commonwealth indicated that the Bill was only going to cover those relationships that ended after the legislation was proclaimed. There has been some discussion of parties opting in by consent to the new regime, but I have not seen any Bill to that effect, nor any statement by the Attorney to that effect. .If such a regime were to be adopted, if one party were to see an advantage in not opting into the new regime, then those parties will remain under the State legislation.


Family Law Amendment (De Facto Financial Matters & Other Measures) Bill 2008

The second reading speech to the Bill was by the Attorney-General, the Hon. Robert McClelland on 25 June 2008. The Attorney stated in his opening remarks that the Bill:-

“introduces significant reform to allow opposite-sex and same-sex de facto couples to access the federal family law court on property and spouse maintenance matters on relationship breakdown.

“This Bill is long overdue, and gives the effect to an agreement between the Commonwealth, and states and territories made as far back as 2002. The Bill follows the enactment of legislation by a majority of states referring necessary powers to the Commonwealth.”

The Attorney stated early in the second reading:-

“The Bill is consistent with the government’s policy not to discriminate on the basis of sexuality. The Bill applies to both opposite-sex and same-sex de facto couples. This Bill amends the Family Law Act 1975 and related legislation to create a Commonwealth regime for handling the financial matters of de facto couples on the breakdown of their relationship.”

He goes on to say:-

“These reforms will provide a national and uniform system….


· The Bill will require parties to demonstrate a geographical connection such as residence and state as referred power or territory to gain the benefits of the new approach;
· Before a court can make an order, it will need to be satisfied that the de facto relationship lasted for at least two years, that there is a child of the relationship or that a party to the relationship made a substantial contribution to the relationship and would cause serious injustice not to grant an order. The Bill also extends to couples whose relationship both satisfies the definition of “de facto relationship” in the reference of power and is registered under state or territory law;
· The Bill provides courts with the ability to make a declaration about a range of important characteristics of a de facto relationship;
· The Bill will allow a court to make orders for the maintenance of one of the parties to the de facto relationship, or an order to clearing or altering the interests or rights of a party to a de facto relationship in respect of property;
· For the first time, the Bill will allow de facto couples to split their superannuation interests in the event of a breakdown in that relationship;
· De facto couples in participating jurisdictions will also be able to enter into binding financial agreements.”

The explanatory memorandum states:-
“The primary objective of the Bill is to extend the financial settlement regime under the Act to parties to a de facto relationship. This is achieved by conferring jurisdiction on certain courts in “de facto financial causes” involving parties to de facto relationships, and providing a new Part VIIIAB of the Act (and amendments to existing parts VIIIAA and VIIIB) to allow the court to make orders in those proceedings covered by the definition of “de facto financial cause”.

The explanatory memorandum states:-

“The Bill contains several new definitions, and amendments to existing definitions, relating to de facto financial matters. These definitions support the new provisions extending federal jurisdiction under the Act to financial matters arising on the breakdown of de facto relationships. The Bill aims to replicate the parties to de facto relationships, the financial settlement regime under Part VIIIAA and Part VIIIA and Part VIIIB of the Act, consistently with the references of powers provided by the State reference Acts. Therefore, the new and extended definitions are intended to be aligned as far as possible with the existing definitions used in the Act, and to depart only when necessary for consistency with the terminology used in the State reference Acts.”
The explanatory memorandum states:
“Part VIIIA allows for the making of binding financial agreements made in anticipation of marriage, and during and after marriage, with wider effect than the part VIIIAB financial agreement. It should be noted that part VIIIA agreements can be made in respect of arrangements for maintenance of a party to the marriage during the marriage, while part VIIIAB financial agreements are confined to dealing with financial arrangements in the event of a breakdown of the relationship.”

The explanatory memorandum states:

“The Bill expands the jurisdiction conferred on courts to deal with financial matters arising on the breakdown of de facto relationships, in addition to its existing jurisdiction in relation to matrimonial matters. In the practical operation of this expanded jurisdiction, there are real possibilities of ‘overlap’ in related matters, such as where two or more financial matters arise under the Act between parties to a marriage or parties to a de facto relationship, with one party in common.”

I was once involved in such a matter where I acted for a man who was a husband in one relationship and was still negotiating with his wife about property settlement, but in the meantime had formed and ended a de facto relationship. He co-owned separate houses and businesses with each woman.
The great difficulty that my client had in that matter was that the two women, although they both liked him apparently, distrusted the other woman and considered that the other woman was seeking to enrich herself at the expense of the woman in question.

Progress of the Bill

Currently the Bill has:
· passed the House of Representatives
· been sent by the then Opposition controlled Senate to the Senate Legal and Constitutional Affairs Committee
· been reported on by that Committee on 28 August 2008
· on that day the Bill was passed by the House of Representatives
· it is the Government’s expectation that the Bill will be passed by both Houses by the end of the year, with the earliest date being late October, 2008
· it is the Government’s expectation that the Act would commence approximately 3 months after passing, to allow for regulation and rule amendments.

Senate Committee

Prior to losing its majority in the Senate, the Opposition ensured that the Bill was referred to the Senate Legal and Constitutional Affairs Committee. The members of the committee comprise four ALP senators, three Liberal senators and one Australian Greens senator. The committee recommended:-

1. That the definition of “child of a de facto relationship” in proposed s90RB of the Bill and the parenting presumptions in s60H of the Family Law Act 1975, be amended to allow children of same-sex relationships to be recognised as a child of the relationship for the purposes of the entire Family Law Act 1975. In making this recommendation, the committee recognises that the interests of the child must be of paramount consideration.
2. Without derogating from the independent and privileged status of marriage, the Federal government undertake a review of all federal legislation containing definitions of :-

· “De facto” and “Couple” relationship and “De Facto Partner” and all related definitions; and
· “Child” and “Parent”, including parenting presumptions, and all related definitions;
With a view to ensuring consistent concepts and terminology are used wherever appropriate.

3. The federal government renumber the Family Law Act 1975 and subsequent legislation.

4. The transitional provisions in the Bill be amended to enable de facto couples to “opt in” to the new regime by mutual agreement, subject to appropriate safeguards, where their relationship breaks down before commencement and their property or maintenance matters have not been finalised before commencement.

5. Subject to those recommendations that the Bill be passed.

The Committee considered, and supported the Bill and believed it should be passed as a matter of priority.

The coalition Senators supported the Bill, but suggested two amendments, one relating to polygamy, and the other relating to s.90SB.


Of course, the government does not have a majority in the Senate and either has to rely upon the co-operation of the Opposition or five Greens, Senator Nick Xenophon from South Australia and Senator Steve Fielding (Family First) from Victoria.

The Committee noted that there were many submissions and witnesses who were strongly supportive of the Bill, including:

The Family Law Section
Women’s Legal Services Australia
The Australian Institute of Family Studies.

The AIFS noted that some of the research it had undertaken showed:

· Cohabitation has become increasingly common (The 2006 census started showing that 15% of all people lived with a partner or living with a partner were ‘cohabiting’)
· The number of children being born into cohabiting relationships is increasing
· Children living with cohabiting parents appear to be less well off than those living with married parents
· Children living with cohabiting parents appear to be more likely to experience parental separation
· Cohabiting relationships are far more likely to dissolve than marriages
· Regardless of the period in which cohabitation or marriage began, the likelihood of a cohabiting relationship ending in separation within five years was at least three times the likelihood of the marriage ending in divorce within five years (25% to 30% -v- 7% to 9%

Consistency with other federal legislation

The Committee noted that it was currently enquiring into two other Bills:

The Evidence Amendment Bill 2008 and the Same Sex Relationship (Equal Treatment and Commonwealth Laws – Superannuation) Bill 2008

which contained definitions of “de facto partner” and “couple relationship” respectively. The definitions differ from the definition of “de facto relationship” in this Bill.

It also seemed that there were differences in other legislation including:

Income Tax Assessment Act
Parliamentary Contributory Superannuation Act
Social Security Act
Aged Care Act.

One witness suggested that the ideal approach would be for the Commonwealth to insert an umbrella term into the Acts Interpretation Act 1901.

I note that since that report, the Attorney has introduced into the House amendments to the Acts Interpretation Act 1901. I will deal with these at the end of the paper.

Overview of the Bill

Following the Senate Committee’s report, the Attorney circulated further proposed amendments, no doubt arising from the work of the Family Law Section amongst others. I have attached a copy of those amendments to my paper as well as the explanatory memorandum to them. They are public knowledge (despite one being marked “draft – in confidence”) and as can be seen many of the proposed amendments to the Bill of a quite technical nature. I will deal with the more substantive provisions on the assumption that these amendments will be incorporated in final version of the Bill.

Who is covered?

Those covered are those who are or were in de facto relationships, both same sex and opposite sex, in participating jurisdictions.

De facto relationships

“De facto relationships” is defined in a new section 4AA. However, it is not known whether this section will survive enactment (because of the Bill to amend the Acts Interpretation Act 1901). The type of definition in s.4AA will be familiar to Queensland practitioners, being similar to s.32DA of the Acts Interpretation Act 1954 Qld.

The relationships include both same sex and opposite sex. Section 4AA provides:

“4AA De facto relationshipsMeaning of de facto relationship
(1) A person is in a de facto relationship with another person if:
(a) the persons are not legally married to each other; and
(b) the persons are not related by family (see subsection (6)); and
(c) having regard to all the circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis.
Paragraph (c) has effect subject to subsection (5).
Working out if persons have a relationship as a couple
(2) Those circumstances may include any or all of the following:
(a) the duration of the relationship;
(b) the nature and extent of their common residence;
(c) whether a sexual relationship exists;
(d) the degree of financial dependence or interdependence, and any arrangements for financial support, between them;
(e) the ownership, use and acquisition of their property;
(f) the degree of mutual commitment to a shared life;
(g) whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship;
(h) the care and support of children;
(i) the reputation and public aspects of the relationship.
(3) No particular finding in relation to any circumstance is to be regarded as necessary in deciding whether the persons have a de facto relationship.
(4) A court determining whether a de facto relationship exists is entitled to have regard to such matters, and to attach such weight to any matter, as may seem appropriate to the court in the circumstances of the case.
(5) For the purposes of this Act:
(a) a de facto relationship can exist between 2 persons of different sexes and between 2 persons of the same sex; and
(b) a de facto relationship can exist even if one of the persons is legally married to someone else or in another de facto relationship.
When 2 persons are related by family
(6) For the purposes of subsection (1), 2 persons are related by family if:
(a) one is the child (including an adopted child) of the other; or
(b) one is another descendant of the other (even if the relationship between them is traced through an adoptive parent); or
(c) they have a parent in common (who may be an adoptive parent of either or both of them).
For this purpose, disregard whether an adoption is declared void or has ceased to have effect.”

Section 4AA(5)(b) in the Bill currently provides:

“A de facto relationship can exist even if one of the persons is legally married to someone else or in another de facto relationship”

The coalition Senators have sought that that provision be omitted on the basis that:

“A person cannot be part of ‘ a couple living together on a genuine domestic basis” with more than one person at a time unless the Parliament wants to endorse de facto polygamy. It would be hard to describe the parties as ‘a couple’ when there are other de facto partners in residence”.

Declarations about existence of de facto relationships

It will be possible to seek a declaration about the existence of a de facto relationship, but only if also seeking:
Spousal maintenance, including urgent spousal maintenance;
Declaration about property [ equivalent to s.78]; or
Property settlement.

Presumably, the reason both applications need to be made is to that the constitutional grounds are met, i.e. that there is a de facto financial cause before the court. This contrasts with that under s. 264 Property Law Act 1974 Qld when an application for a declaration of this kind can be sought by itself.

In reality, if a party were to seek a declaration about the existence of a de facto relationship, they would most likely also bring an application for a declaration about the ownership of property.
The section is s.90RD:
“90RD Declarations about existence of de facto relationships
(1) If:
(a) an application is made for an order under section 90SE [maintenance], 90SG [urgent maintenance] or 90SM [property settlement], or a declaration under section 90SL [ property declaration]; and
(b) a claim is made, in support of the application, that a de facto relationship existed between the applicant and another person;
the court may, for the purposes of those proceedings (the primary proceedings), declare that a de facto relationship existed, or never existed, between those 2 persons.
(2) A declaration under subsection (1) of the existence of a de facto relationship may also declare any or all of the following:
(a) the period, or periods, of the de facto relationship for the purposes of paragraph 90SB(a);
(b) whether there is a child of the de facto relationship;
(c) whether one of the parties to the de facto relationship made substantial contributions of a kind mentioned in paragraph 90SM(4)(a), (b) or (c);
(d) when the de facto relationship ended;
(e) where each of the parties to the de facto relationship was ordinarily resident during the de facto relationship.
Note: For child of a de facto relationship, see section 90RB.

Note: Subsection 60H(1) is given an extended application by subsection 60H(4) and subsection (3) of this section.
(2) A child of a de facto relationship who is adopted by a person who, before the adoption, is not a prescribed adopting parent ceases to be a child of that de facto relationship for the purposes of this Part.
(3) For the purposes of this section, subsection 60H(1) applies to parties to a de facto relationship who are of the same sex in a corresponding way to the way in which it applies to parties to a de facto relationship who are of different sexes.”
WARNING:
The proposed amendments to the Bill in the attachment are to this paper included a removal of the proposed s90RB and replacement with the new s90RB in those further amendments.
The explanatory memorandum states:-

“the government amendments implemented by partisan recommendations for amendments to the Bill made by the Senate Legal & Constitutional Affairs’ Committee in its report on the Bill to:-
Amend the definition of “child of de facto relationship” in proposed s90RB of the Bill and the parenting presumptions in s60H of the Act to allow children of same-sex relationships to be recognised as a child of the relationship for the purposes of the entire Family Law Act 1975 (Recommendation 1).”

Participating Jurisdictions

It is essential that you read the Bill very carefully, especially if there are issues about a binding financial agreement.
The four key sections for residence are:
Section 90SD – maintenance
Section 90SK – property settlement
Section 90RG- declaration about there being a de facto relationship
Section90UA- BFA’s.

The Senate Committee reported:

“The New South Wales Law Society was concerned about the requirement in paragraph 90SD(1)(b)(ii) that both parties needed to be ordinarily resident in a participating jurisdiction during at least a third of the de facto relationship. The society submitted that:

“…the reference to one third rather than a substantial period may lead to situations where parties are unable to [avail] themselves of this legislation because of their relationship being conducted across several states. People have become increasingly mobile. By referring to a substantial period rather that a set period the court still has discretion.

The Family Law Section raised a similar issue regarding proposed section 90UA, which provides that a financial agreement can only be made “if the spouse parties are ordinarily resident in a participating jurisdiction when they make the agreement”.

The Family Law Section pointed out that the requirements seemed ‘unduly restrictive and confusing’:

“It is unclear whether the provision as drafted contemplates the requirement that both parties reside in the same participating jurisdiction; or whether they can be in separate jurisdictions; or if it is necessary for only one party to be in a participating jurisdiction.”

In response to the concerns expressed with the New South Wales Law Society about proposed s. 90SD, the Attorney-General’s Department replied:

“The residence requirement in the bill provides a clear test, while the discretion implicit in the test suggested by the Law Society of NSW would not encourage parties to settle outside litigation. The geographical connection in section 90SD reflects the requirements under the Property Settlement legislation of most jurisdictions (NSW, Victoria, WA, ACT, NT and Norfolk Island). The ‘substantial period’ test applies in NSW, although couples are taken to satisfy the test if they have lived together in the state for one third of their relationship. SA requires couples to have lived in the state for the whole or a substantial part of the period of their relationship. Queensland and Tasmania do not have a residence requirement.”

I note that this last assertion is not accurate regarding Queensland given the unreported judgment of B v J (2005) a decision of De Jersey CJ, that there is a requirement under Part 19 of the Property Law Act for the de facto relationship, as opposed to the location of the property, to be “in and of” Queensland.

Section 90SD provides:
“90SD Geographical requirement
(1) A court may make an order under section 90SE or 90SG in relation to a de facto relationship only if the court is satisfied:
(a) that either or both of the parties to the de facto relationship were ordinarily resident in a participating jurisdiction when the application for the order was made (the application time); and
(b) that either:
(i) both parties to the de facto relationship were ordinarily resident during at least a third of the de facto relationship; or
(ii) the applicant for the order made substantial contributions, in relation to the de facto relationship, of a kind mentioned in paragraph 90SM(4)(a), (b) or (c);
in one or more States or Territories that are participating jurisdictions at the application time.
(2) For the purposes of paragraph (1)(b), a State need not have been a participating jurisdiction during the de facto relationship.
(3) If each State is a referring State, the Governor-General may, by Proclamation, fix a day as the day on which paragraph (1)(b) ceases to apply in relation to new applications.
Note: Paragraph (1)(b) will continue to apply in relation to applications made before the proclaimed day.
(4) If:
(a) a Proclamation under subsection (3) is in force; and
(b) a State ceases to be a referring State on a particular day;the Proclamation is revoked by force of this subsection on and from that day.
(5) If, under subsection (4), a Proclamation under subsection (3) is revoked:
(a) this section has effect as if the revoked Proclamation had not been made;
but
(b) the effect of the revoked Proclamation on applications made before the specified day is not affected.”
WARNING:
There are amendments to s90SD in the proposed amendments. One of those amendments includes a new sub-section 1A:-
“the alternative condition is that the parties to the de facto relationship were ordinarily resident in a participating jurisdiction when the relationship broke down.”
The explanatory memorandum to the amendments states:-
“the amendments also address a range of essentially technical issues that have arisen in consultations on the Bill including in consultations with the Family Law Section of the Law Council of Australia, by:-
Amending new paragraphs 90SD(1)(b) and 90SK(1)(b) of the Bill to provide for couples who have lived in a participating jurisdiction and also in a non- referring state during their relationship to be able to obtain financial orders if they were ordinarily resident in a referring state or in a territory when their relationship broke down.”
Section 90SK sets out the requirements for a declaration as to property or property settlement (the equivalents of sections 78 and 79):
“90SK Geographical requirement
(1) A court may make a declaration under section 90SL, or an order under section 90SM, in relation to a de facto relationship only if the court is satisfied:
(a) that either or both of parties to the de facto relationship were ordinarily resident in a participating jurisdiction when the application for the declaration or order was made (the application time); and
(b) that either:
(i) both parties to the de facto relationship were ordinarily resident during at least a third of the de facto relationship; or
(ii) the applicant for the declaration or order made substantial contributions in relation to the de facto relationship, of a kind mentioned in paragraph 90SM(4)(a), (b) or (c);
in one or more States or Territories that are participating jurisdictions at the application time.
(2) For the purposes of paragraph (1)(b), a State need not have been a participating jurisdiction during the de facto relationship.
(3) If each State is a referring State, the Governor-General may, by Proclamation, fix a day as the day on which paragraph (1)(b) ceases to apply in relation to new applications.
Note: Paragraph (1)(b) will continue to apply in relation to applications made before the proclaimed day.
(4) If:
(a) a Proclamation under subsection (3) is in force; and
(b) a State ceases to be a referring State on a particular day; the Proclamation is revoked by force of this subsection on and from that day.
(5) If, under subsection (4), a Proclamation under subsection (3) is revoked:
(a) this section has effect as if the revoked Proclamation had not been made;
but
(b) the effect of the revoked Proclamation on applications made before the specified day is not affected.”
WARNING:
There are a number of amendments to s90SK in the amendments including a new sub-section (1A):-
“the alternative condition is that the parties to the de facto relationship were ordinarily resident in a participating jurisdiction when the relationship broke down.”
Section 90RG sets out the jurisdiction in seeking a declaration as to there being a de facto relationship:
“90RG Geographical requirement
A court may make a section 90RD declaration only if the court is satisfied that a person referred to in paragraph 90RD(1)(b) [ ie the applicant – who asserts that there was a de facto relationship between them or the respondent to that application], or both of those persons, were ordinarily resident in a participating jurisdiction when the primary proceedings commenced.”

Section 90UA sets out the requirements for jurisdiction for binding financial agreements:

“90UA Geographical requirement for agreements made in participating jurisdictions
Two or more people can make a Part VIIIAB financial agreement under section 90UB, 90UC or 90UD only if the spouse parties are ordinarily resident in a participating jurisdiction when they make the agreement.”
This last section makes plain that if one of the parties remains ordinarily resident in a non-participating jurisdiction, then a binding financial agreement will not be caught within the Act. However, it might be within the Act by virtue of section 90UE (discussed below).
There are traps for the unwary in the transitional arrangements, which I will deal with below.
South Australia

South Australia, alone of all the states, has not referred any powers to the Commonwealth. A representative of the Department told the Committee that “the Attorney-General is still in discussion and consultation” with the South Australian counterpart.

Western Australia

The then Western Australia Attorney-General, the Hon. Jim McGinty, the Family Court of Western Australia and the Law Society of WA all queried why the Commonwealth had not taken up the opportunity to provide the Family Court of Western Australia with power to make superannuation splitting orders.

Jim McGinty explained that the Family Court Act 1997 WA enables de facto partners (both same sex and opposite sex) to use the WA Family Court in property and other disputes. However he was concerned that the Bill does not implement WA’s reference of powers to the Commonwealth in the Commonwealth Powers (De facto Relationships) Act 2006 WA. He explained that this law refers powers over superannuation matters arising out of the breakdown of de facto relationships (both same sex and opposite sex). He was concerned that, by not implementing the reference of power, WA de facto partners will be discriminated against, “in comparison to those and other Australian jurisdictions in superannuation matters”.

The Family Court of Western Australia pointed out that the court was currently unable to make superannuation splitting orders for de facto couples and that the Bill’s failure to deal with this issue is:

“Unfortunate as the passage of the proposed legislation affords what would appear to be suitable opportunity to provide the Family Court of Western Australia with this additional jurisdiction.”

The Department’s position in response was:

“Implementation of the narrower reference from WA would leave jurisdictional issues arising in ‘cross-border’ cases involving WA and any state outside the scheme, where different laws applying in those states will affect outcomes in cases…”

WA is not able, under its own de facto property settlement and spouse maintenance law, to oust the jurisdiction of the other states, as the Commonwealth is able to do to the extent that it has power to do so.

Implementation of the narrower reference from WA would also require duplication by WA of future amendment to the Commonwealth’s regime relating to the making of orders altering interests in non-superannuation property held by de facto partners. Otherwise the Family Court of Western Australia, in proceedings between de facto partners with superannuation (as most couples will have) would need to take into account one set of considerations, under the Family Law Act 1975, in considering whether to make a superannuation splitting order, and another set of considerations, under WA law, in considering whether it is appropriate to make an order altering interests in their other property.”

Given the change of Government in Western Australia, it is anyone’s guess as to the outcome there.

The participating jurisdictions currently will be:
Queensland
New South Wales
Norfolk Island
Australian Capital Territory
Victoria
Tasmania
Northern Territory

Currently the non-participating jurisdictions will be:
South Australia
Western Australia

Which courts have jurisdiction?


Section 39A(1) makes it plain:
Family Court of Australia
Federal Magistrates Court of Australia
Northern Territory Supreme Court
Courts of summary jurisdiction, of Territories and participating States, such as the Magistrates Court of Queensland.
There is a limitation with Territory courts: one of the parties must be ordinarily resident in that Territory: s.39F.

Therefore the one court which would be expected to have jurisdiction, that clearly does NOT have jurisdiction is the Family Court of Western Australia. Whether this problem will be alleviated by the same judge sitting both as a judge of the Family Court of Australia and the Family Court of Western Australia (as they have dual commissions), remains to be seen.

Summary of the changes

Essentially there are four major changes:
1. The courts will have jurisdiction to deal with de facto financial causes under a new Part VIIIAB. The rules for these matters (although replicated) are essentially the same as those for married couples under Part VIII.
2. De facto couples will be able to enter into binding financial agreements, also under new Part VIIIAB. Again, essentially the rules are the same for married couples.
3. Part VIIIB, the part of the Act dealing with super splitting, has been amended to include de facto couples.
4. Part VIIIAA has been amended to incorporate references to de facto financial causes.

Because the Commonwealth legislation clearly, in participating jurisdictions, intends to cover the field, then by virtue of s109 of the Commonwealth Constitution, the amendments introduce a new regime which will, in general, override the old state regimes. However the issue of covering the field is dealt with under section 90RC. I will cover this issue further under “Transition”. There may also be some residual State powers to be considered.
The bad news is that family lawyers have to learn new section numbers. The key ones are:
Topic
Married section
De facto section
Limitation period:
Married: 1 year from absolute, de facto: 2 years from date of separation
44(3), (3A), (3B)
44(5)
Leave outside limitation period
44(4)
44(6)
Geographical requirement
NO PROVISION
90RG
Division VIII, VIIIAB does not apply when binding financial agreement entered into
71A
90SA
Together for 2 years, substantial contribution, child or relationship register before can commence property settlement, maintenance
NO PROVISION
PLA: s.287
90SB
Division VIIIAB no longer applies once parties marry
NO PROVISION
90SC
Geographical requirement
NO PROVISION
90SD
Maintenance
74
90SE
Maintenance
75
90SF
Urgent maintenance
77
90SG
Specifying amt of maintenance
77A
90SH
Modification of spousal maintenance
83
90SI
Cessation of spousal maintenance
82
90SJ
Geographical requirement
NO PROVISION
90SK
Declarations
78
90SL
Property settlement
79
90SM
Setting aside
79A
90SN
General powers of court
80
90SS
Interlocutory injunctions
114(3)
90SS(5)(i)
Injunctions in aid of a decree
114(3)
90SS(5)(ii)
Duty to end financial relationship
81
90ST
Geographical requirement
NO PROVISION
90UA
Financial agreement before marriage/relationship
90B
90UB
Financial agreement during marriage/relationship
90C
90UC
Financial agreement after marriage/relationship
90D
90UD
Separation declarations
90DA
90UF
Incidental/ancillary matters in BFA of no effect until breakdown of relationship
NO PROVISION
90UG; 90UB(3),90UC(3), 90UE(2)(b)
Maintenance in BFA
90E
90UH, with limits
Limitations on maintenance in BFA
90F
90UI
When financial agreements are binding
90G
90UJ- change to copy requirements
BFA ends on marriage
NO PROVISION
90UJ(3)
Setting aside BFA
90K
90UM- but note change for 90UE agreements
Validity and enforcement of BFA
90KA
90UN
No duty
90, 90L
90WA- however note limit with 90UE agreements
Superannuation agreements
90MH
90MHA
Separation declaration
90MP
New subsections to 90MP (7) to (12)

Limitation Periods
These are of no surprise. Section 44 will be amended to add new subsections (5) and (6):

“ (5) Subject to subsection (6), a party to a de facto relationship may apply for:
(a) an order under section 90SE [maintenance], 90SG [urgent maintenance] or 90SM [ property settlement]; or
(b) a declaration under section 90SL [declaration];
only if the application is made within the period of 2 years after the end of the de facto relationship (the standard application period).
(6) The court may grant the party leave to apply after the end of the standard application period if the court is satisfied that:
(a) hardship would be caused to the party or a child if leave were not granted;
or
(b) in the case of an application for an order for the maintenance of the party--the party's circumstances were, at the end the standard application period, such that he or she would have been unable to support himself or herself without an income tested pension, allowance or benefit.”
Enforcement

Sections 105 and 106B are to be amended so that they also cover matters arising from the breakdown of de facto relationships.

Transition

Item 86 of the Bill is clear:-

(1) “Parts VIIIAB and VIIIB of the new Act do not extend to a de facto relationship that broke down before commencement.

Note 1 – After commencement State/Territory law will apply to any proceedings to enforce, discharge, suspend, revive or vary an order or injunction also commenced in relation to the maintenance or the distribution of the property of the parties to the de facto relationship arising out of the breakdown of the de facto relationship.

Note 2 – After commencement, State/Territory law will continue to apply to any proceedings pending at commencement for an order or injunction in relation to the maintenance, or the distribution of property, of the parties to the de facto relationship arising out of the breakdown of the de facto relationship.

Note 3 – After commencement, State/Territory law will continue to apply if the parties to the de facto relationship have made or may, an agreement about financial matters arising out of the breakdown of the de facto relationship.

Note 4 – Section 90UE of the new Act will not apply in relation to an agreement made, by the parties to the de facto relationship under a non-referring state de facto financial law, about financial matters arising out of the breakdown of the de facto relationship. Such an agreement will not be effected by the new Act.


(2) To avoid doubt, s90RC of the new Act does not exclude the operation of any state or territory law in relation to the de facto relationship.

Note – Sub-section 39A(5) of the new Act will not apply in relation to the de facto relationship because the effect of this item is that a de facto financial cause relating to that relationship cannot be instituted under the new Act.”

Section 39A(5) is the otherwise catchall provision:


“A de facto financial cause that may be instituted under this Act must not, after the commencement of this section, be instituted otherwise than under this Act.”

Section 90 RC(2) provides, as if there could be any doubt:-

“Parliament intends that the de facto financial provisions are to apply to the exclusion of any law of a State or Territory to the extent that the law:-

(a) deals with financial matters relating to the parties to de facto relationships arising out of the breakdown of those de facto relationships; and
(b) deals with those matters by referring expressly to de facto relationships (regardless of how the state or territory law describes those relationships).

Note 1 – if, for example, both this part and the law of the non-referring state deal with the distribution of property between the parties to a de facto relationship that has broken down after the commencement of this section, then the parties can only seek to distribute the property under this Part. Sub-section 2 has the effect of preventing the parties from seeking to distribute the property under the state law.

Section 90RC(3) provides:

“Despite sub-section (2), Parliament does not intend that the de facto financial provisions are to apply to the exclusion of the law of a State in relation to a financial matter relating to the parties to a de facto relationship arising out of the breakdown of the relationship if:

(a) a court cannot make an order under this Part in relation to that financial matter because of s90SB, s90SD or s90SK; and
(b) there is no binding Part VIIIAB Financial Agreement dealing with that financial matter.

Example 1:

Abbie and Bob are parties to a de facto relationship that has broken down, and have never been ordinarily resident in a participating jurisdiction. Sub-Section 3 has the effect that state law will govern financial matters arising out of the breakdown of their relationship.

Example 2:

Cleo and Dan are parties to a de facto relationship that has broken down after the commencement of this section. Early in their relationship, they make a Financial Agreement under the law of a non-referring state, but later spend most of their relationship in a participating jurisdiction. Cleo and Dan now have a sufficient geographical link with a participating jurisdiction for either of them to apply for an order under this Part in relation to financial matters arising out of the breakdown of their relationship. This means that Sub-Section (3) will not apply and that their financial agreement will not be enforceable under state law because of sub-section 2. However their financial agreement will be enforceable under this part as a Part VIIIAB Financial Agreement (see s90UE).”

The explanatory memorandum states:

“As mentioned, sub-section 90RC(3) has the effect that State law will apply to a de facto relationship if the geographical requirements under s.90SD or s90SK cannot be met for orders and declarations to be made about property or maintenance and de facto financial matters under Federal law, however, it is important to remember that a geographical connection can be established under s.90UA for the application of Federal law in relation to a financial agreement made under the Act on the basis of residence in a participating jurisdiction, which creates another situation where federal law may apply to displace State law, even if the tests required under s.90SD or s.90SK are not satisfied. This means that:
· If the parties have made a part VIIIAB financial agreement then Federal law applies to the de facto financial matters …
· If the parties are unable to make a part VIIIAB financial agreement because the geographical requirements under s.90UA for making a part VIIIAB financial agreement cannot be met, then State law applies, and
If the parties are able to meet the geographical requirement under s.90UA for making a part VIIIAB financial agreement, but have not made such an agreement, then State law may apply unless and until the parties make a part VIIIAB financial agreement, when Federal law applies to override any previous State orders or financial agreements made in the non-participating jurisdiction”.

The Senate Committee noted that:

“the effect of s90RC is to carve out an “exclusion zone” for the operation of new Federal de facto financial provisions, to the exclusion of State and Territory laws dealing with or referring to those matters. Those areas of operation of State and Territory laws excluded by Federal law unnecessarily confined to the scope of the state referred powers, being in relation to financial matters arising out of the breakdown of de facto relationships, and to the area dealt with under Federal law”.

One witness criticised the inability not to opt in beforehand as ‘very harsh’. The Attorney-General’s Department’s response to the suggestion of opting in was:

“The application of the Bill to relationships that have already broken down provides a clear test relating to the relationships to which the new regime will apply. It also reflects the same approach taken by each state and territory, with the exception of the Northern Territory, when its property settlement regime was introduced. Suggestions that couples should be able to ‘opt in’ to the new regime by mutual agreement, particularly where they ‘opt in’ from the adjudicated determination of issues between them would need to be accompanied by safeguards, to ensure informed choice and also to protect those in an unequal bargaining position”.

Following the Senate Committee’s report, the Attorney has decided, evidently, to allow opting in to occur. I will deal with this below.

The New South Wales Law Society was concerned about the impact of s. 90RC and the transitional provisions on the validity of agreements made before the commencement of the Bill. The society pointed out that many parties have entered into agreements under New South Wales law and that it was concerned that the Bill should include a specific provision to ensure that a party will not be able to set aside such agreements “simply because the legislation has changed”.

The response by the Attorney-General’s Department was:

“The Law Society of NSW in its submission to the Committee suggests that the ground in new section 90UM(1)(f) might apply to set aside an agreement made under NSW law. It is difficult to see how a change in the law, subsequent to the making of an agreement, about how property settlements between de facto couples are determined, would make it impracticable to carry it out. New section 90UM(1)(f) is in equivalent terms to sections 90K(1)(c) and 79A(1)(b) of the Family Law Act 1975, applying to binding financial agreements and property alteration orders between married couples. The Department notes the tests of impracticability in section 79A(1)9b) of the Act has been discussed in cases before the Family Court of Australia.”

Opting In

In the further amendments, the Attorney has proposed a new item 86A which provides:-

Opting in to the new regime

Choosing the new regime

(1) the parties to a de facto relationship that breakdown before commencement may choose from Parts VIIIAB and VIIIB, and sub-section 114(2A)[sole use] of the new Act to apply in relation to the de facto relationship note:-

(i) whether the parties will be able to obtain an order under those provisions of the new Act, or make a Part VIIIAB Financial Agreement, will depend upon whether the tests found in those provisions is satisfied for the de facto relationship.

(ii) Divisions 3 and 4 of this Part, and S90UE of new Act, are not affected by a choice under this item. Those Divisions, and section, relate to de facto relationships that (if they are to break down) will break down after commencement.

When a choice can be made

(2) A choice under sub-item (1) can be made if:-

(a) the choice is unconditional;
(b) sub-items (3), (4) and (5) are satisfied for the choice.

A choice is irrevocable.

(3) This sub-item is satisfied with choice if no order (other than an interim order) under a preserved law of a state or territory has been made by a court in relation to either of the following:-

(a) how all or any of the:-

(i) property; or
(ii) financial resources

that either of the parties to the de facto relationship had or acquired during the de facto relationship is to be distributed;

(b) the maintenance of either of the parties to the de facto relationship.

(4) This sub-item is satisfied for the choice if:-

(a) the parties have not made a designated state/territory financial agreement in relation to their de facto relationship; or

(b) if the parties have made such an agreement, that agreement has ceased to have effect without:-

(i) any property being distributed; or
(ii) any maintenance being paid;

under the agreement

(5) This sub-item is satisfied for the choice if:-

(a) the choice is in writing and signed by both of the parties to the de facto relationship; and

(b) each of the parties was provided, before the choice was signed by him or her, with:-

(i) independent legal advice from a legal practitioner about the advantages and disadvantages, at the time that the advice was provided, to the party of making the choice; and

(ii) a signed statement by the legal practitioner stating that this advice was given to the party.

(6) For the purposes of Part VIIIAB of the new Act, a choice can be included in a Part VIIIAB Financial Agreement for which the parties of a spouse party.

Setting aside a choice


(7) A court may make an order setting aside a choice if the court is satisfied that, having regard to the circumstances in which the choice was made, it would be unjust and inequitable if the court does not set the choice aside.

(8) A court setting aside a choice under sub-item (7) may make such order or orders (including an order for the transfer of property) as it considers just and equitable to, so far as is practicable, return the rights of:-


(a) The parties to the de facto relationship; and

(b) Any other interested persons affected by the choice;
to their position immediately before the choice is made.

(9) Sub-sections 90UM(8) and (9) of the new Act apply in relation to setting aside a choice as if:-

(a) A reference in those sub-sections to sub-section 90UM(1) or (6) of the new Act were a reference to sub-item (7) or (8); and

(b) The reference in those sub-sections to s90UM of the new Act were a reference to this item.”

In addition to other changes there is also to be a new Item 90A which is a replication of Item 86A.

The supplementary explanatory memorandum states the government is implementing the Committee’s recommendation:-

“That the transitional provisions in the Bill be amended to enable de facto couples to “opt in” to the new regime by mutual agreement, subject to appropriate safeguards, where their relationship breaks down before commencement and their property and/or maintenance matters have not been finalised before commencement.”


The supplementary explanatory notes state:-

“Amendment 5 is one of the series of amendments to replace the term “Binding Financial Agreement” where it occurs in the Bill, which may seen as introducing a new concept in the Act, with the phrase, “Financial Agreement that is binding on the parties to the agreement”, or a similar phrase. The phrase is already used in the Act’s financial agreement provisions for married couples.”


Transition for agreements

One of the effects of item 86 is that agreements that were entered into between de facto partners after the breakdown of their relationship but before commencement remain in force under State legislation; in Queensland under Part 19 of the Property Law Act 1974.

Agreements falling under the Bill:

Checklist

Has the relationship broken down?

Yes : Then the Family Law Act Part VIIIAB under the amendments might apply. Go to question 2.

No: Then the Family Law Act Part VIIIAB may not apply. If the agreement does not contain financial provisions, then the Family Law Act will not apply until the relationship has broken down, and only State and Territory jurisdiction (if it still exists) will apply. The Family Law Act, so far as ancillary matters is concerned, will only apply to the agreement when the relationship has broken down: s.90UG, although the financial aspects of the agreement will be binding provided the formal requirements are met. It may be possible to enter into a cohabitation agreement under State or Territory law that is binding, and may remain the exclusive jurisdiction, even after the commencement of the amendments. I will discuss this issue near the end of the paper.

Have the parties now married?
Yes: The Family Law Act does not apply to the agreement, unless it was also expressed to apply under section 90B: s.90B, 90UJ.
No: The Family Law Act may apply- go to question 3.


Were both parties at the time of signing the agreement ordinarily resident in a participating jurisdiction?

Yes: Then the Family Law Act might apply. Section 90UA requires the “spouse parties” to reside in a participating jurisdiction. Go to question 5.
No: Then section 90UE might apply. It is set out below. It seeks that agreements made in non-participating States become agreements under the Family Law Act. Importantly, the agreement needs to be made under a non-referring State de facto financial law: 90UE(1)(e). If the agreement purports to be made under the Family Law Act, or under laws of a referring State or Territory, then s.90UE does not apply. Check the agreement carefully. Go to question 4.


Section 90UE provides:
“90UE Agreements made in non-referring States that become Part VIIIAB financial agreements
How State agreements can become Part VIIIAB financial agreements
(1) This section applies if:
(a) 2 people (the couple) have made a written agreement, signed by both of them, with respect to any of the matters (the eligible agreed matters) mentioned in subsection (3); and
(b) the agreement was made under a non-referring State de facto financial law;
and
(c) either:
(i) a court could not, because of that law, make an order under that law that is inconsistent with the agreement with respect to any of the eligible agreed matters; or
(ii) a court could not, because of that law, make an order under that law that is with respect to any of the eligible agreed matters to which the agreement applies; and
(d) at the time the agreement was made, the members of the couple were not the spouse parties to any binding Part VIIIAB financial agreement with respect to any of the eligible agreed matters; and
(e) at a later time (the transition time), the couple's circumstances change so that:
(i) if the de facto relationship has not broken down--sections 90SB, 90SD and 90SK would not prevent a court from making an order or declaration under this Part in relation to the eligible agreed matters if the de facto relationship were to break down; or
(ii) if the de facto relationship has broken down--sections 90SB, 90SD and 90SK do not prevent a court from making an order or declaration under this Part in relation to the eligible agreed matters; and
(f) immediately before the transition time:
(i) the agreement was in force under the non-referring State de facto financial law; and
(ii) the couple were not married to each other.
Paragraph (a) extends to agreements made before the commencement of this section, and to agreements made with one or more other people.
Note: This section extends to agreements made in contemplation of a de facto relationship, during a de facto relationship or after a de facto relationship has broken down.
(2) For the purposes of this Act, the agreement is taken, on and after the transition time, to be a Part VIIIAB financial agreement to the extent that the agreement deals with:
(a) the eligible agreed matters; and
(b) matters incidental or ancillary to the eligible agreed matters.
Note: This means that, after the transition time, the agreement can only be enforced, varied, terminated or otherwise set aside under this Act.
Eligible agreed matters
(3) The matters referred to in paragraph (1)(a) are the following:
(a) how all or any of the:
(i) property; or
(ii) financial resources;
of either member, or both members, of the couple at the time when the agreement is made, or at a later time and during a de facto relationship between them, is to be distributed;
(b) the maintenance of either member of the couple;in the event of the breakdown of a de facto relationship between them, or in relation to a de facto relationship between them that has broken down, as the case requires.
(4) For the purposes of paragraph (1)(c), disregard whether the non-referring State de facto financial law permits the court to make such an order if the court varies or sets aside the agreement.
WARNING:
There are a number of amendments to s90UE, the most significant of which is adding a new note to:-
“Part P2 of Schedule 1 to the Family Law Amendment (De Facto Financial Matters and other Measures) Act 2008 deemed certain agreements, made under a law of a State that is or becomes a participating jurisdiction, or made under a law of a Territory, to be Part PVIIIAB Financial Agreements.”
The explanatory memorandum to the amendments states that the reason for the note is to alert the reader to the existence of significant transitional provisions that may not appear in a reprint of the Act.
Question 4

If the parties signed when in a non-participating State, do they now live in a non-participating State?

Yes: Then the Family Law Act provisions do not apply. State legislation applies.
No: Then the Family Law Act provisions do apply. Go to question 5.

The answer is contained in items 89 and 90 of the Bill:

“89 When this Division appliesThis Division applies if Parts VIIIAB and VIIIB of the new Act:
(a) extend to a de facto relationship; or
(c) would, but for item 90, extend to a de facto relationship;
only because a State has become a later participating jurisdiction.
Note: This Division will not apply to a de facto relationship that breaks down during the period starting at commencement and ending at the transition time for the State if, during that period, section 90UE of the new Act has applied in relation to the de facto relationship. This is because it is section 90UE, and not the State becoming a participating jurisdiction, that has caused Part VIIIAB of the new Act to extend to the de facto relationship.
Example 1: Amy and Ben made an agreement in a non-referring State and then moved to, and spent most of their relationship in, an earlier participating jurisdiction. Their relationship broke down after commencement, but before the non-referring State became a later participating jurisdiction. Their residence in the earlier participating jurisdiction means section 90UE of the new Act will cause Amy and Ben's agreement to become a Part VIIIAB financial agreement.
Example 2: Cathy and Don made an agreement in a non-referring State and did not move from that State. Their relationship broke down after commencement but before the non-referring State became a later participating jurisdiction. That State becoming a later participating jurisdiction is the only way that Part VIIIAB could only apply to Cathy and Don's relationship. This means this Division, and item 90, will apply. The effect of item 90 is that State law will continue to govern Cathy and Don's agreement.
Example 3: During their de facto relationship, Emily and Fred made an agreement in a non-referring State and did not move from that State. Their relationship broke down after the non-referring State became a later participating jurisdiction. That State becoming a later participating jurisdiction is the only way that Part VIIIAB could only apply to Emily and Fred's relationship. This means this Division, and item 92, will apply. The effect of item 92 is that Emily and Fred's agreement will become a Part VIIIAB financial agreement.

90 De facto relationships that break down before transition time for a later participating jurisdiction
(1) Parts VIIIAB and VIIIB of the new Act do not extend to the de facto relationship if it broke down before the transition time for the State.
Note 1: After the transition time, the law of the State will apply to any proceedings etc. to enforce, discharge, suspend, revive or vary an order or injunction in force at the transition time in relation to the maintenance, or the distribution of property, of the parties to the de facto relationship arising out of the breakdown of the de facto relationship.
Note 2: After the transition time, the law of the State will continue to apply to any proceedings pending at the transition time for an order or injunction in relation to the maintenance, or the distribution of property, of the parties to the de facto relationship arising out of the breakdown of the de facto relationship.
Note 3: After the transition time, the law of the State will continue to apply if the parties to the de facto relationship have, before the transition time, made an agreement (to which section 90UE of the new Act had not applied) about financial matters arising from that breakdown.
Note 4: After the transition time, the law of the State will continue to apply if the parties to the de facto relationship, after the transition time, make an agreement about financial matters arising from that breakdown.
(2) To avoid doubt, section 90RC of the new Act does not exclude the operation of any State or Territory law in relation to the de facto relationship.
Note: Subsection 39A(5) of the new Act will not apply in relation to the de facto relationship because the effect of this item is that a de facto financial cause relating to that relationship cannot be instituted under the new Act.”

Question 5

Was the agreement entered into before the Family Law Act changes came into effect?

Yes: The agreement might be covered by the Family Law Act changes. Go to question 6.

No: The agreement was only executed after the changes came into effect. Hooray- you should be under the Family Law Act.


Question 6: Was the agreement entered into after the de facto relationship broke down?

Yes: The agreement is binding under State or Territory law, not the Family Law Act. The Family Law Act does not apply: item 86 of the Bill.

No: The agreement is covered under the Family Law Act. In non-participating jurisdictions, section 90UE applies. In participating jurisdictions, items 87 and 88 of the Bill apply. Agreements in contemplation of the relationship are covered under item 87. Agreements made during the relationship are covered under item 88. Go to question 7.

Item 87 provides:
“87 Pre-commencement agreements--made in contemplation of de facto relationships
(1) This item applies if:
(a) before commencement, 2 people (the couple) who were contemplating entering into a de facto relationship with each other made a written agreement, signed by both of them, with respect to any of the matters (the eligible agreed matters) mentioned in sub item (3); and
(b) the agreement was made under a preserved law of an earlier participating jurisdiction; and
(c) a court could not, because of the preserved law, make an order under that law that is inconsistent with the agreement with respect to any of the eligible agreed matters; and
(d) immediately before commencement:
(i) the agreement was in force under the preserved law; and
(ii) if the couple had entered into the de facto relationship--the de facto relationship had not broken down; and
(iii) the couple were not married to each other.
Paragraph (a) extends to an agreement made with one or more other people.
Note: Agreements made in non-referring States are not covered by this item. Those agreements continue to be governed by State law unless they are transformed into Part VIIIAB financial agreements (see section 90UE of the new Act and Division 4 of this Part).
(2) For the purposes of the new Act, the agreement is taken, on and after commencement, to be a Part VIIIAB financial agreement made as mentioned in subsection 90UB(1) of the new Act to the extent that the agreement deals with the eligible agreed matters.
Note: After commencement, the agreement can only be enforced, varied, terminated or otherwise set aside under the new Act.
(3) The matters referred to in paragraph (a) of sub item (1) are the following:
(a) how all or any of the:
(i) property; or
(ii) financial resources;
of either member, or members, of the couple at the time when the agreement is made, or at a later time and during the de facto relationship, is to be distributed in the event of the breakdown of the de facto relationship;
(b) the maintenance of either member of the couple in the event of the breakdown of the de facto relationship;
(c) matters incidental or ancillary to those mentioned in paragraph (a) or (b).
(4) For the purposes of paragraph (c) of sub item (1), disregard whether the preserved law permits the court to make such an order if the court varies or sets aside the agreement.”(emphasis added)
Item 88 provides:

“88 Pre-commencement agreements--made during de facto relationships(1) This item applies if:
(a) before commencement and while in a de facto relationship, the parties to the de facto relationship (the couple) made a written agreement, signed by both of them, with respect to any of the matters (the eligible agreed matters) mentioned in sub item (3); and
(b) the agreement was made under a preserved law of an earlier participating jurisdiction; and
(c) a court could not, because of the preserved law, make an order under that law that is inconsistent with the agreement with respect to any of the eligible agreed matters; and
(d) immediately before commencement:
(i) the agreement was in force under the preserved law; and
(ii) the de facto relationship had not broken down; and
(iii) the couple were not married to each other.
Paragraph (a) extends to an agreement made with one or more other people.
Note: Agreements made in non-referring States are not covered by this item. Those agreements continue to be governed by State law unless they are transformed into Part VIIIAB financial agreements (see section 90UE of the new Act).
(2) For the purposes of the new Act, the agreement is taken, on and after commencement, to be a Part VIIIAB financial agreement made as mentioned in subsection 90UC(1) of the new Act to the extent that the agreement deals with the eligible agreed matters.
Note: After commencement, the agreement can only be enforced, varied, terminated or otherwise set aside under the new Act.
(3) The matters referred to in paragraph (a) of sub item (1) are the following:
(a) how all or any of the:
(i) property; or
(ii) financial resources;
of either member, or members, of the couple at the time when the agreement is made, or at a later time and during the de facto relationship, is to be distributed in the event of the breakdown of the de facto relationship;
(b) the maintenance of either member of the couple in the event of the breakdown of the de facto relationship;
(c) matters incidental or ancillary to those mentioned in paragraph (a) or (b).
(3) For the purposes of paragraph (c) of sub item (1), disregard whether the preserved law permits the court to make such an order if the court varies or sets aside the agreement.”(emphasis added)
This was for Queensland practitioners a trick question. That is because an agreement entered into between parties during the relationship but before it ended (the critical concept under the Commonwealth legislation) could be either a cohabitation agreement or a separation agreement. A separation agreement does not need separation. It could have been made when the parties contemplated separation, but their relationship had not broken down.
Section 264 of the Property Law Act 1974 provides:
“264 Meaning of cohabitation agreement
(1) A cohabitation agreement is an agreement--
(a) made by de facto partners--
(i) in contemplation of starting their de facto relationship; or
(ii) during their de facto relationship; and
(b) dealing with all or some of the de facto partners' financial matters.
(2) A cohabitation agreement includes a cohabitation agreement varying a cohabitation agreement.
(3) It does not matter whether--
(a) a cohabitation agreement is made before or after the commencement of this section; or
(b) there are other parties to a cohabitation agreement; or
(c) a cohabitation agreement deals with other matters. “

Section 265 of that Act provides:

“265 Meaning of separation agreement
(1) A separation agreement is an agreement--
(a) made by de facto partners--
(i) in contemplation of ending their de facto relationship; or
(ii) after their de facto relationship has ended; and
(b) dealing with all or some of the de facto partners' financial matters.
(2) A separation agreement includes a separation agreement varying a cohabitation agreement or separation agreement.
(3) It does not matter whether--
(a) a separation agreement is made before or after the commencement of this section; or
(b) there are other parties to a separation agreement; or
(c) a separation agreement deals with other matters.” (emphasis added)

Question 7: has there been formal compliance with section 90UM(5)?
Yes: You might have a binding agreement.
No: The court might set the agreement aside.

Section 90UM(5) provides:

(5) This subsection applies if:
(a) at least one of the spouse parties to the agreement was not provided, before signing the agreement, with independent legal advice from a legal practitioner about the following:
(i) the effect of the agreement on the rights of that party;
(ii) the advantages and disadvantages, at the time that the advice was provided, to the party of making the agreement; or
(b) if the advice was provided to one of the spouse parties--a signed statement by the legal practitioner stating that the advice was provided was neither:
(i) included in, or attached to, the agreement; or
(ii) given to the party;
and it would be unjust and inequitable, having regard to the eligible agreed matters (within the meaning of section 90UE) for the agreement, if the court does not set the agreement aside.

So even if your agreement might have complied with the formal requirements of the Property Law Act and contractual requirements, but if there has not also been compliance with s.90UM that in itself might be grounds for setting aside.
Children
Section 90RB provides:
“90RB Meaning of child of a de facto relationship
(1) For the purposes of this Part, any of the following is a child of a de facto relationship:
(a) a child of whom each of the parties to the de facto relationship are the parents;

(b) a child adopted by the parties to the de facto relationship or by either of them with the consent of the other;
(c) a child who under subsection 60H(1) is a child of the parties to the de facto relationship.
This subsection has effect subject to subsection (2).”
(2) A child of a de facto relationship who is adopted by a person who, before the adoption, is not a prescribed adopting parent ceases to be a child of that de facto relationship for the purposes of this Part.
(3) For the purposes of this section, subsection 60H(1) applies to parties to a de facto relationship who are of the same sex in a corresponding way to the way in which it applies to parties to a de facto relationship who are of different sexes.”
This is a wider definition than that contained in s.60H of the Family Law Act.

Concerns were raised about s. 60H of the Family Law Act to the Committee. The Committee noted:

“Section 60H makes presumptions about who are the ‘parents’ of a child born as a result of assisted reproductive technology (ART) for the purposes of the Family Law Act. Section 60H effectively recognises a birth mother and the male partner of a birth mother as parents. However, a female partner of the birth mother (a lesbian co-mother) and a male partner of a birth father (a gay co-father) are not considered to be parents. As HREOC pointed out in the same sex, same entitlements report, a child born to a same sex couple will often only have one legal parent for the purposes of the Family Law Act.

The Committee noted that various descriptions of proposed section 90RB(3) was that it was ‘convoluted’, ‘ illogical’ and ‘iniquitous’ and ‘unduly complex’. In particular several submissions pointed out that it would mean that lesbian co-parents would be recognised under the Family Law Act, but only in relation to property matters and not matters regarding children.”

At the meeting of the standing committee of Attorneys-General on 25 July 2008, state and territory ministers requested the Commonwealth consider amending section 60H to allow children of same sex relationships to be recognised as a child of the relationship for the purposes of this section.


The Attorney has since announced by media release that he was circulating a draft to Senators about changes to section 60H. That draft has not yet coalesced into a Bill.


Maintenance and Property Matters

Under proposed s90SB before making a maintenance or property order, the Court must be satisfied that:

· The relationship lasted for a period, or periods, totalling two years; or
· There is a child of the de facto relationship (as defined in s90RB); or
· The parties to the de facto relationship who applies for the order or declaration made substantial financial contributions and serious injustice would result to that party if the order or declaration was not made; or
· The relationship is or was registered under a prescribed state or territory law.

The explanatory memorandum states that this requirement, is derived from equivalent provisions operating under state law before the commencement of these provisions.

By way of comparison, s.287 of the Property Law Act 1974 Qld provides:

“287 Type of de facto relationship
A court may make a property adjustment order only if it is satisfied--
(a) the de facto partners have lived together in a de facto relationship for at least 2 years; or

(b) there is a child of the de facto partners who is under 18 years; or

(c) the de facto partner who applied for the order has made substantial contributions of the kind mentioned in section 291 or 292 and failure to make the order would result in serious injustice to the de facto partner.”


Division 2 ceases to apply in relation to a de facto relationship if the parties marry – in which case existing Part VIII of the Family Law Act applies.

Currently the States or Territories that have relationship registers are:
· Tasmania
· Victoria and
· the ACT.
The Liberal Senators recommended the proposed section 90SB be omitted and substituted with the following:

A court may make an order under section 90SE or 90SG, in relation to a de facto relationship, only if the court is satisfied:

(a) that there is a child of the de facto relationship; or
(b) that the relationship is or was registered under a prescribed law of a state or territory.
A court may make a declaration under section 90SL if it is satisfied that the applicant or respondent was in a de facto relationship with another party to the proceedings;

A court may make an order under section 90SN, in relation to a de facto relationship only if the court is satisfied:

(a) that there is a child of the de facto relationship; or
(b) that
(i) the party to the de facto relationship who applies to the order made substantial contributions of the kind mentioned in paragraph 90SM(4)(i), (b) or (c); and
(ii) a failure to make the order would result in serious injustice to the applicant; or
(c) that the relationship is or was registered under a prescribed law of a state or territory.

If the court has power to make an order under section 90SM by reason only of the fact that the party to the de facto relationship or applies to the order made substantial contributions of a kind mentioned in paragraph 90SM(4)(a), (b) or (c), then the court is limited in its considerations under section 90SM, to paragraphs 90, SM4(a), (b) or (c).

The Senators say that the effect of the amendments would be as follows:

(i) Declarations of legal or an equitable interest:
Anyone who is in a de facto relationship ought to be able to get a declaration of legal or equitable title by application of the general law. There is no reason to limit the clarity relief, as this Bill currently does, to people who have been in relationships for two years or have a child or satisfy one of the other conditions;
(iii) Property alteration and ‘spousal maintenance’:
The court will have the power to divide the parties’ property and to award ‘spousal maintenance’ in the same way as if they were married, if:
· there is a child of the de facto relationship;
· the relationship is or was registered under a prescribed law of a state or territory
(iv) In situations where one of the parties has made substantial contributions, including contributions as a homemaker, then this would be an additional ground for the court to exercise its powers to take account of the contributions, even when there are no children of the relationship. However, the powers of the court will be limited to the fair recognition of contribution. Thus the court would have power to make whatever orders are just and equitable on the basis that the parties’ respective contributions, even where their relationship is unregistered or they do not have a child of the relationship if, for example:
· The woman has made substantial contributions as a homemaker, looking after the children of the male partner; or
· The man has made substantial contributions to the woman’s home by engaging in renovations.

These provisions therefore provide full protection to people who have made substantial contributions that would otherwise not be recognised.”


To put it bluntly, I consider that the coalition Senators have got it wrong and that rather than having a fairly simple test as currently occurs under State law which with some minor variation would be repeated under Commonwealth law i.e.

1. they have been in a de facto relationship for two years; or
2. they have a child; or
3. there are substantial contributions; or
4. they have a registered relationship;

the two year component is being removed.

This may not be such a drama in places such as the ACT, Tasmania or Victoria where there are relationship registers, but if the parties are not registered either because they have chosen not to do so or in jurisdictions, such as Queensland, where there is not a relationship register, and they do not have a child, the immediate argument will be whether the contributions were substantial or not. This would lead to an increase in litigation and costs, rather than the reverse.


Maintenance Orders

Proposed s90SE allows the court to make orders for the maintenance of one of the parties to the de facto relationship after the breakdown of that relationship. According to the explanatory memorandum “this largely replicates the effect of s74 in relation to parties to a marriage”.

Proposed s90SF replicates the provisions of s75(2).



Property settlement

This sub-division contains provisions enabling the court to make a declaration of property interest (proposed s.90SL) which replicates 78, and orders for property settlement (proposed section 90SM), which in turn replicates s. 79.

Proposed s.90SK contains a geographical requirement linking the parties to the de facto relationship to a participating jurisdiction before a court can make a property order in relation to a de facto relationship including financial agreements, division 4 or part VIII AB. This will allow parties to a de facto relationship in participating jurisdictions to enter into binding financial agreements. Similarly as with the current s. 90B, s.90C and 90D, agreements will be able to be made before, during a de facto relationship or after it has broken down.

In essence the provisions for financial agreements for de facto couples replicate those for married couples with the exceptions of the requirement for jurisdiction and that a Part VIIIAB financial agreement ceases to be binding if the parties to the agreement marry each other – proposed s.90UJ(3).


Section 75(2)

There is to be a new section 75(2)(naa). This is similar to the existing s75(2)(n) which deals with Orders that have been made or proposed to be made or vested bankruptcy property.

The explanatory memorandum states that this paragraph:

“Recognises that the additional jurisdiction now conferred on the court in de facto financial matters opens up the prospect of orders or declarations being made or proposed in related part VIIAB proceedings, involving parties or property in common between the part VIIIAB proceedings and proceedings involving parties to a marriage under s. 74 and 79, so that the outcome in these related matters may affect the court’s consideration of the spousal maintenance or property settlement proceedings before it. (The Bill makes reciprocal provisions in s. 90SF that replicate the effect of paragraph 75(2)(naa)…)”

There is to be a new s75(2)(q) which is to take into account the terms of any Part VIIAB Financial Agreement that is binding on a party to the marriage.

Superannuation splitting

Existing part VIII B of the Family Law Act with provides for superannuation splitting will be extended to de facto couples. The Attorney-General explained in his second reading speech that, for the first time:

“The Bill will allow de facto couples to split their superannuation interests in the event of a breakdown in that relationship. This will enable recognition of the important contribution many de facto couples make over the course of their relationship to each other’s superannuation to be reflected in the proper apportionment between them of what they have accumulated for their retirement.”


Amendment of s83
Currently to obtain modification of spousal maintenance orders, one of the grounds under s83(2)(a)(i) is that the circumstances of a person for whose benefit the order was made have so changed. The amendment would insert after “change” (including the person entering into a stable and continuing de facto relationship).
What is curious about this provision is that there is no definition of what is a “stable and continuing” de facto relationship.
As Neil Jackson points out in his paper:-
“ the one fundamental difference between spousal maintenance, pursuant to s74; and the proposed de facto relationship maintenance (pursuant to s90SE), is that a de facto maintenance order can only be made after the breakdown of a de facto relationship”.


Cessation of spousal maintenance

Proposed s.90SJ is an equivalent to s.82.4 of the Family Law Act so that a maintenance order in a de facto relationship ceases to have effect upon the death or marriage of the party. The family law section recommended that the proposed section 90SJ be amended to provide that maintenance orders cease if a party re-partners by entering into another de facto relationship.

Duty of court to end financial relations

Proposed s. 90ST states the duty of the court to end financial relations and avoid further proceedings between the parties to the de facto relationship in the same way as an equivalent to s.81. The NSW Law Society considered that the provision was “superfluous” and commented that “family law academics have long doubted the public policy basis and need for section 81”.


Amendment to Part VIIIA – Financial Agreements

The most significant amendment is that there is a new definition in s4(1) of “spouse party”. The explanatory memorandum states:-

“Several of the amendments in Part 1 of Schedule 3 to the Bill clarify that a Financial Agreement under Part VIIIA of the Act, between parties to a marriage, can include another person or persons as a party to the agreement. In relation to such an agreement, a “spouse party” is defined to mean a party to the agreement who is a party to the common plate of marriage (s90B, Marriage (s90C) or former marriage (90D) to which the agreement relates. Division 4 of Part VIIIAB of the Act makes provision in similar terms for financial agreements under Part VIIIAB between parties to a de facto relationship. In relation to Part VIIIAB Financial Agreement, they quote “spouse party” is defined to mean a party to the agreement who is a party to the contemplated de facto relationship (s90UB) or de facto relationship (s90UC) to which the agreement relates”.

Section 90UJ(1)(e) contains new provisions about when a binding financial agreement is binding:
“(e) after the agreement is signed, the original agreement is given to one of the spouse parties and a copy is given to each of the other parties.”

Curiously there is no replicated amendment of section 90G.

Part VIIIAB as set out in the table in large part replicates the current Part VIIIA dealing with binding financial agreements to cover those who are to be, are in or were in a de facto relationship to be covered by the Act.

Third Parties

The proposed s90SM(10) and the amended s79(10) permit a third party such as a creditor to become a party to a de facto relationship property proceedings.
Part VIIIAA applies to de facto relationship property disputes by virtue of proposed s90TA.


s79A

The new s90SN is a duplication of s79A.

Powers of Court

s90SS sub-sections 1 – 4 is a duplication of s80(1)-(3) and proposed s90SS(6) – (8) is a duplication of s80(4) – (6).

The injunctions s90SS(5) – (11) duplicate the supplementary injunctive powers under s114(3) – (7).

WARNING:

The amendments add a new s114(2A) which allows for injunctions to be made regarding property and for sole use. The supplementary explanatory memorandum states:-
“new sub-section 114(2A) will enable de facto couples to obtain court orders or injunctions, as married couples can under paragraphs 114(1)(b), (e) or (f), relating to the property of both or either of them, or to the use or occupancy of a specified residence of both or either of them.”.

The explanatory memorandum states:-
“the amendments also provide power for the courts to make injunctions relating to the property of de facto couples, including orders for the “use or occupancy” of former residences that the couple had, in a similar way to the power that the courts have in relation to married couples...... this amendment amends s114 to insert new sub-section 114(2A) to enable de facto couples to obtain court orders for injunctions, as married couples can under paragraphs 114(1)(b), (e) or (f), relating to the property of both or either of them or to the use or occupancy of a specified residence of both or either of them.”
New sub-section 114(2A) will provide that the court may make such order or grant such injunction as it considers proper relating to:-

- the use or occupancy of a specified residence of the parties to the de facto relationship or either of them:-
Paragraph 114(2A)(a) and
- where a court has made an order or granted an injunction under paragraph 114 (2A)(a), make an order or grant an injunction restraining a party to the de facto relationship from entering or remaining in that residence, or in any area in which that residence is located:-
Paragraph 114(2A)(b), and
- the property of the parties to a de facto relationship or either of them:-
Paragraph 114(2A)(c)
An order or injunction under new sub-section 114(2A) will only be able to be made in relation to a de facto relationship in respect of which a spouse maintenance order or an order or declaration about property can be made under Part VIIIAB.”

Other drafting issues

New South Wales Law Society made some suggestions for technical amendments to the transitional provisions for “consistency and clarity” and pointed out a possible typographical error in item 69 and proposed sub-section 90BMP(5).

The Family Law Section noted that it had identified various other technical issues in relation to other provisions that it was working on with the Department, which included a detailed list of the provisions which required clarification or correction, but considered none of these were major issues.


Separation Declaration

s90UF is a duplicate of s90DA which requires a separation declaration to ensure certain parts of a financial agreement are of force and effect.
WARNING:
Following consultations with the Family Law Section the definition of “Declaration Time” in sub-sections 90UF(6) and 90DA(5) is amended, according to the explanatory memorandum:-

“say where, a separation declaration is required for a financial agreement and have both parties have signed the agreement, the “declaration time” is measured from the time that the declaration is first signed by one of the spouse parties.”
…a separation declaration signed by at least one spouse party to a Part VIIIAB Financial Agreement is required before its post-breakdown property distribution provisions have force or effect. Where both spouse parties have signed a separation declaration, this amendment will ensure that the “declaration time” is measured from the time that the declaration is first signed by one of the spouse parties (and not last signed as the Bill proposes), noting that the signature of one party is sufficient.”

Setting aside
Proposed s90UM is identical to s90K with one exception.

s90UM(5) provides that where one of the spouse parties was not provided before signing the agreement with independent legal advice from a legal practitioner on the two stated grounds or the advice was provided to one of the parties but the statement was not included in or attached to the agreement or given to the party and it would be “unjust and inequitable, having regard to the eligible agreed matters…. If the court does not set the agreement aside”.

This provision is new. What is curious about this provision is that unlike Black & Black (2008) FLC 93-357; where strict compliance with the Binding Financial Agreement provisions is required, this provision seems to make clear that strict compliance is not required but that substantial compliance is sufficient.

Why this amendment has not been extended to s90K is a mystery. One would hope there is consistency between the two approaches.

Stamp Duty Exemption

A general exemption from duty applies in relation to orders or agreements under s90WA(1) however s90WA(2) says that in effect that if an agreement has been entered into in a non-referring state, but by virtue of s90UE becomes a Part VIIIAB Agreement under the Act, then there is isn’t retrospective exemption from duty – duty was payable at the time the agreement was entered into.

Superannuation

Part VIIIB will extend by virtue of the new s90MA to parties to a de facto relationship.

There is to be a new sub-section 2 to s90MC so that the superannuation interest for de facto financial causes is to be treated as property.

Enforcement

s105, 106B will also apply to de facto financial matters.

Children

There is to be a new s90RB, which has been changed following the Senate Committee Report. s60H is to be replaced.
The supplementary explanatory memorandum states:-
“the government amendments implement the by partisan recommendations for amendments to the Bill made by the Senate Legal & Constitutional Affairs Committee and its report on the Bill to:-
- amend the definition of “child of de facto relationship” and proposed s90RB of the Bill and the parenting presumptions in s60H of the Act to allow children of same-sex relationships to be recognised as a child of the relationship for the purposes of the entire Family Law Act 1975.”
The new s90RB provides:-
“90RB meaning child of a de facto relationship”

For the purposes of this part, a child is a child of a de facto relationship if the child is the child of both of the parties to the de facto relationship.
Note:
To determine who was the child of a person see Sub-Division D of Division 1 of PartVII.

There is to be new s60EA:-

“for the purposes of this Sub-Division, a person is the “de facto partner” of another person if:-

(a) a relationship between the person and the other person (whether of the same sex or a different sex) is registered under a law of a State or Territory prescribed for the purposes of s22B of the Acts Interpretation Act 1901 as a kind of relationship prescribed for the purposes of that section; or
(b) the person is in a de facto relationship with the other person.”

S60H(1) and (4) are to be repealed. There is new sub-section (1) which will provide:-

“(1) if:-
(a) a child is born to a woman as a result of the carrying out of an artificial conception procedure while the woman was married to, or a de facto partner of, another person (the other intended parent); and
(b) either:-
(i) the woman and the other intended parent consented to the carrying out of the procedure, and any other person who provided genetic material used in the procedure consented to the use of the material in an artificial conception procedure; or
(ii) under a prescribed law of the Commonwealth or of a State or Territory, the child is a child of the woman and of the other intended parent;
Then, whether or not the child is biologically a child of the woman and of the other intended parent, for the purposes of this Act:-
(c) the child is the child of the woman and of the other intended parent; and
(d) if a person other than the woman and the other intended parent provided genetic material – the child is not the child of that person.”

There are to be new s60HA and 60HB they provide:-
“60HA children of de facto partners”

(1) for the purposes of this Act, a child is the child of a person who has, or had, a de facto partner if:-
(a) the child is a child of the person and the person’s de facto partner; or
(b) the child is adopted by the person and the person’s de facto partner or by either of them with the consent of the other; or
(c) the child is, under sub-section 60H(1) or s60HB, a child of the person or the person’s de facto partner. This sub-section has effect subject to sub-section (2).

(2) a child of current or former de facto partners ceases to be a child of those partners for the purposes of this Act if the child is adopted by a person who, before the adoption, is not a prescribed adopting parent.
(3) in the Section:-
“this Act” includes:-
(a) the standard Rules of Court; and
(b) the related Federal Magistrates Rules.

S60HB – Children born under surrogacy arrangements

(1) If a court has made an order under a prescribed law of a state or territory to the effect that:-
(a) a child is a child of one or more persons; or
(b) each of one or more persons is a parent of a child;

Then, for the purposes of this Act, the child is the child of each of those persons.

(2) In this section:-
“this Act”includes:-
(a) the standard Rules of Court; and
(b) the related Federal Magistrates Rules.
The supplementary explanatory memorandum states that the new sub-section 60H(1) “deals with most married and opposite and same-sex de facto couples”. Opposite-sex de facto couples were previously covered in sub-sections 60H(4). This sub-section is repealed.

These changes will mean that s60H(1) applies, as well as to married couples, to current or former de facto partners who are of the same-sex and the current former de facto partners who are of different sexes where child are born as a result of artificial conception procedures. This would mean that female same-sex de facto couples would be recognised as the parents of a child born with a couple’s consent to the artificial conception procedure and one of them is the birth mother. In addition, genetic material from other than the couple must be used with the relevant donor’s consent. The provision provides that the child is to be the child of the woman giving birth and her de facto partner…..
New section 60HA sets out the rules for determining when a child is a child of a person who has, or had a de facto partner. The child will be a child of the person if the child is a child of both the person and the person’s de facto partner. In addition the child will be a child of the person if either the person or the person’s de facto partner adopted the child with the consent of the other and the child will be a child of the person if under sub-section 60H(1) the child is a child of the person and the person’s de facto partner.

S60(1) sets out the rules for determining the parentage of children born as a result of artificial conception procedures for both married and de facto couples…

New s60HB deals with children born under surrogacy arrangements. It provides that where a court order has been made under a prescribed law of a state or territory relating to the parentage of a child that order will determine the parentage of the child.”

S60I – Proposed minor amendments to 60I (5) which is the certificate provision to reflect amongst other things that 1 July 2008 was the date in which the certificate is required before any proceedings are commenced under PartVII.

Other Acts being amended

It is generally a recognition that financial agreements for de facto couples can be considered in the same way as financial agreements between married couples such that there are amendments proposed to:
· A New Tax System (Family Assistance) Act 1999
· Bankruptcy Act 1966
· Child Support (Assessment) Act 1989
· Child Support (Registration & Collection) Act 1998
· Federal Magistrates Act 1999
· First Home Saver Accounts Act 2008
· Income Tax Assessment Act 1997
· Proceeds of Crime Act 2002
· Social Security Act 1991
· Veterans’ Entitlements Act 1996.

The explanatory memorandum states:

“The courts conferred with the jurisdiction of de facto financial causes of the Family Court of Australia, the Federal Magistrates Court of Australia, the Supreme Court of the Northern Territory, in courts of summary jurisdiction and the participating Magistrates Court.... State courts in states that are not ‘participating jurisdictions’ (as described in new section 90RA inserted by the Bill) cannot exercise jurisdiction under the Bill. The Family Court of Western Australia is not included as the court on which jurisdiction is conferred. Under sub-section 39B(1) in de facto financial causes, and while Western Australia and South Australia are not referring states, their courts of summary jurisdiction are not invested under sub-section 39B(2) with Federal jurisdiction and de facto financial causes under the Act.”

As provided for in s39A and 39B it is possible for the Family Court of Australia and the Federal Magistrates Court of Australia located and operating in a non-participating jurisdiction to exercise jurisdiction and de facto financial causes under the Act, but this would arise only in limited situations, where the cases link to a participating jurisdiction. This could happen, for example, with the geographical requirements under s90SD or 90SK are established in connection with a participating jurisdiction, so that Federal jurisdiction can apply, but the court determines that the better venue for determination of the matter is in a Federal court having jurisdiction of not being located in a non-referring state, perhaps because the parties’ child related matters are pending in that court.”

Principles of the Act
Section 43 is being amended so that the principle of the ‘need to preserve and protect the institution of marriage as the union of a man and a woman to the exclusion of all others voluntarily entered into for life’ does not apply in relation to the exercise of jurisdiction in relation to de facto financial causes.

Related matters
Same Sex Relationships (Equal treatment in Commonwealth Laws- General Law Reform) Bill 2008

This is one of a suite of bills that the Government has put before the House to remove discrimination against same sex couples. Most significantly, the Bill proposes that there be amendments to 68 Commonwealth laws, but most pointedly insertion of new sections 22A to 22C of the Acts Interpretation Act. These proposed sections provide:
“22A References to de facto partners
For the purposes of a provision of an Act that is a provision in which de facto partner has the meaning given by this Act, a person is the de facto partner of another person (whether of the same sex or a different sex) if:
(a) the person is in a registered relationship with the other person under section 22B; or
(b) the person is in a de facto relationship with the other person under section 22C.
22B Registered relationships
For the purposes of paragraph 22A(a), a person is in a registered relationship with another person if the relationship between the persons is registered under a prescribed law of a State or Territory as a prescribed kind of relationship.
22C De facto relationships
(1) For the purposes of paragraph 22A(b), a person is in a de facto relationship with another person if the persons:
(a) are not legally married to each other; and
(b) are not related by family (see subsection (6)); and
(c) have a relationship as a couple living together on a genuine domestic basis.
(2) In determining for the purposes of paragraph (1)(c) whether 2 persons have a relationship as a couple, all the circumstances of their relationship are to be taken into account, including any or all of the following circumstances:
(a) the duration of the relationship;
(b) the nature and extent of their common residence;
(c) whether a sexual relationship exists;
(d) the degree of financial dependence or interdependence, and any arrangements for financial support, between them;
(e) the ownership, use and acquisition of their property;
(f) the degree of mutual commitment to a shared life;
(g) the care and support of children;
(h) the reputation and public aspects of the relationship.
(3) No particular finding in relation to any circumstance mentioned in subsection (2) is necessary in determining whether 2 persons have a relationship as a couple for the purposes of paragraph (1)(c).
(4) For the purposes of paragraph (1)(c), the persons are taken to be living together on a genuine domestic basis if the persons are not living together on a genuine domestic basis only because of:
(a) a temporary absence from each other; or
(b) illness or infirmity of either or both of them.
(5) For the purposes of subsection (1), a de facto relationship can exist even if one of the persons is legally married to someone else or is in a registered relationship (within the meaning of section 22B) with someone else or is in another de facto relationship.
(6) For the purposes of paragraph (1)(b), 2 persons are related by family if:
(a) one is the child (including an adopted child) of the other; or
(b) one is another descendant of the other (even if the relationship between them is traced through an adoptive parent); or
(c) they have a parent in common (who may be an adoptive parent of either or both of them).
For this purpose, disregard whether an adoption is declared void or has ceased to have effect.
(7) For the purposes of subsection (6), adopted means adopted under the law of any place (whether in or out of Australia) relating to the adoption of children.”

That Bill has also been referred to the Senate Constitutional Legal Affairs Committee for consideration and report.

In his second reading speech, the Attorney-General stated:

“This Bill removes discrimination against same sex couples and their children and many of the laws that were identified by the Commissioner and the audit.

The Bill will ensure in each law it amends that same sex couples and their families are recognised.
The amendments and the Bill recognise a same sex partner and adopt a similar approach to that taken in the first Bill [same sex relationships] equal treatment in Commonwealth Laws (Superannuation) Bill ] to recognise a child in a same sex family.

The general approach taken by the Bill is that “a child” will include a child that is the product of a relationship, where one partner is linked biologically to the child or where one partner is the birth mother of the child.”

Mr. McClelland dealt with the proposed sections 22A to 22C:

“The Bill includes the new definition of de facto partnerships which will be included in the Acts Interpretation Act.

This definition will become the standard definition for most Commonwealth laws, and the laws that will be amended will, in most cases, pick up that definition.

It will provide a more consistent and uniform approach to defining who was the de facto partner across the range of Commonwealth laws.

It will apply to de facto partnerships whether the parties to the relationship are of the same sex or different sexes. One thing there with same sex wasn’t hyphenated.

This definition will recognise two different types of relationships.

The couple will be taken to be in a de facto relationship if they have a relationship as a couple living together on a genuine domestic basis having regard to a number of circumstances included with them the definition.

Registered relationships: The definition will also specifically and clearly recognise relationships that have been registered under prescribed state and territory relationship registration schemes.

What this will mean is that couples who have registered their relationships under a state or territory law will not have to demonstrate the circumstances to satisfy the definition of de facto partner under most Commonwealth laws.

They will be taken to be a de facto partner on the basis that they have satisfied the requirements for registration under the relevant state or territory laws.

This will provide a significant incentive for couples to register their relationships under state or territory schemes……it is also, of course, an incentive for … states and territories (other than current [other than exist in Tasmania, Victoria and ACT] but do not have such schemes to develop and implement their own. The Federal Government’s position is that, should they do so, they should be consistent with the general principles that exist in the schemes of Victoria, Tasmania and ACT.”

Acts that take a different approach.

The definition in the Acts Interpretation Act will not be used in all the Acts being amended by the Bills.

Some Acts, such as the Social Security Act and the Migration Act and the Veterans’ Entitlement Act, currently have their own approach to defining who was a member of a couple or de facto partner or a child of the person.

Queensland developments

As at the date of preparation of this paper (3 October), the Queensland Attorney-General, the Hon. Kerry Shine, is contemplating amendments to Part 19 of the Property Law Act. It is too early to tell, at the time of preparation of this paper, as to what those amendments (if any) might be.




Stephen Page
Harrington Family Lawyers
Brisbane

3 October 2008
[1] Stephen Page is a partner of Harrington Family Lawyers and is an accredited family law specialist. He is the author of the Australian Divorce Blog and the Australian Gay and Lesbian Law Blog.
[2]pPp190-191
[3] Discussions between the writer and Mr Foley
[4] p.271
[5] At p.273

2 comments:

Anonymous said...

I was separated from my de facto partner on 16 Feb 2009. I have 2 children with him, and two children from my former marriage. My ex de facto partner and I re bought the home from my previous marrriage, which I had substansial equity in already.
I have been a homemaker looking after him and our and my children for seven years.
Is he entitled to the equity in the home that I had aquired before our relationship.
And if both persons need to sign to be treated under the new laws as of 1st march 2009, it will make things very difficult, as the person who is not going benifit from signing, is obviously not going to sign. If this is the case, where is the justice in this for someone such as myself, who should be entitled to the superanuation he recieved while I stayed at home looking after his children and home. And should be eligabe for spousal maintenance as I have been out of the workforce for a considerable time. We have been everything a married couple are, but without the marriage certificate. We separated less that two weeks before the new laws were passed.
There should be some amendment to the law of both parties having to sign when there are children involved.

Stephen Page said...

You should get good legal advice- the sooner the better.

There have been some changes to the Bill after I prepared my paper. One of the most significant changes is that couples who split up before 1 March 2009 can opt in to the new regime, but there are technical requirements before they can do so. In reality, if both parties want to (and there's the rub), they should be able to opt in. Obviously if a person thinks that it is not to their advantage to opt in, they won't.

Anonymous raises a number of issues aside from the separation date:
1.initial contributions almost always weigh very heavily whether under the old de facto regime or under the Family Law Act.
2. super can be split under the old regime, but only if there is a self-managed super fund. Otherwise we have the vague concept of a financial resource- it can be taken into account. Again, if the super existed before the relationship, initial contributions would be taken into account.
3. spousal maintenance might be payable for those who separated before 1 March. In some States, such as Queensland, there is no ability to get spousal maintenance under the old regime, but in NSW, for example, it is possible to obtain spousal maintenance. The ability to obtain spousal maintenance is sometimes overblown- often the cost of getting it is about the same as the maintenance to be paid- making the whole exercise futile. Property settlement under the old regime can in some places, like Queensland, take into account future factors, such as the care of children, the inability to work, differing earning capacities and the need to retrain. Each State is different.
4. the effect of different types of contributions will weigh differently in each State under the old regime. Both SA and WA have not adopted the new regime.
5. Finally, child support still applies. Often the amount to be paid for child support far exceeds that of spousal maintenance.