PART VIIIAB--FINANCIAL MATTERS RELATING TO DE FACTO RELATIONSHIPS

at http://www.austlii.edu.au/au/legis/cth/consol_act/fla1975114/

"(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

In de facto property settlement matters, the steps are:

(a) to identify and value the net property of the parties (usually at the date of the trial);

(b) to consider the contributions of the parties within paragraphs (a)-(c) of s 90SM(4);

(c) to consider s 90SM(4)(d)-(g) ; and

(d) to consider whether the order proposed is just and equitable: s 90SM(3).

Asset by Asset or Global Approach?

57. In de facto property proceedings, the Court may make such order as it considers appropriate. The usual approach in property proceedings between married parties is for the court to consider the property of the parties as an overall pool. It is open to the court to undertake the asset by asset approach. In Norbis v Norbis[16] [[1986] HCA 17; (1986) FLC 91-712 ] Mason and Deane JJ, with whom Brennan J agreed, said [High Court of Australia judges]:

    • ...Which of the two approaches is the more convenient will depend on the circumstances of the particular case. However, there is much to be said for the view that in most cases the global approach is the more convenient. It follows that the Full Court is quite entitled to prescribe that approach as a guideline in order to promote uniformity of approach within the Court. In saying this we are not to be understood as denying the legitimacy of the trial judge's ascertainment in the first instance of the financial contributions of the parties by reference to particular assets. It is difficult to conceive how the trial judge in many cases could otherwise take account of such contributions as he is required to by s.79(4)(a) of the Act...

    • ...Again, it seems to us that it will depend on the circumstances of the particular case, though in the majority of cases the global approach will be the more convenient and for this reason the Full Court is entitled to prescribe its adoption as a guideline in the majority of cases. The Family Court has rightly criticized the practice of giving over-zealous attention to the ascertainment of the parties' contributions, and we take this opportunity of expressing our unqualified agreement with that criticism, noting at the same time that the ascertainment of the parties' financial contributions necessarily entails reference to particular assets in the manner already indicated. [17]

58. In my view it is appropriate to apply these principles in this de facto property proceeding. The parties’ de facto relationship continued for around 19 years. The parties pooled their income for their joint expenses. Both parties have made direct and indirect financial and non-financial contributions to the acquisition, conservation and improvement of the property of the parties (see further in these Reasons).

….

1. (a) Can a financial claim be made against you, xxxxxx

 

(4) In considering what order (if any) should be made under this section in property settlement proceedings, the court must take into account:

(a) the financial contribution made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:

(i) to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or

(ii) otherwise in relation to any of that last-mentioned property;

whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and

(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:

(i) to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or

(ii) otherwise in relation to any of that last-mentioned property;

whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and

(c) the contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship and any children of the de facto relationship, including any contribution made in the capacity of homemaker or parent; and

(d) the effect of any proposed order upon the earning capacity of either party to the de facto relationship; and

(e) the matters referred to in subsection 90SF(3) so far as they are relevant; and

(f) any other order made under this Act affecting a party to the de facto relationship or a child of the de facto relationship; and

(g) any child support under the Child Support (Assessment) Act 1989 that a party to the de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the de facto relationship.

23. In Kardos v Sarbutt [2006] NSWCA 11; (2006) 34 Fam LR 550 the parties had lived together for three years. There were no children of their relationship. .....

24. The Court of Appeal (Basten JA, Hunt AJA and Brereton J) allowed an appeal by Ms Kardos .... In so doing the court said that to give due weight to the relative contributions of the parties it was appropriate to recognise that capital gains are often the product of the initial introduction of property rather than of ongoing contributions. It was said that increments in capital value of an asset held at the outside [sic] of a relationship were not part of the fruits of the relationship but arose as a result of the asset having been held by one of the parties at the commencement of the relationship and not the result of the joint efforts of wage earning, homemaking and parenting and mutual support. Brereton J said at [61]:

If one party has a house worth $250,000 at the outset and it appreciates during the relationship to be worth $750,000, the contribution is of a house which at separation is worth $750,000 – not of money worth $250,000.