Property Division in Short-term Relationships
For the purposes of family law, a relationship is usually characterised as a “short” relationship if it is not longer in duration than 5 years.
It is important to bear in mind that unlike for married couples, there is a minimum length of the relationship period for de facto couples which has to be at least 2 years, or there needs to be a child of the relationship, or a substantial contribution by the applicant resulting in a serious injustice if the claim is not heard.
So for instance, if you have been in a de-facto relationship for 12 months, there are no children and you have made no substantial contributions to the relationship, then you will normally be unable to seek any division of the property pool. In these circumstances, the parties would retain the assets and liabilities in their respective names without any other adjustments.
If, however, you have lived with your partner in a de-facto relationship for more than 2 years and contributed towards the payment of the mortgage on his/her property or other expenses or made non-financial contributions such as cooking and cleaning, you will be entitled to a certain percentage of your partner’s property, particularly if you do not own any property in your own name.
Calculating the Percentage Entitlement
The percentage value of the party’s entitlement in the matrimonial property pool in short relationships, as with any Family Law Property Matter, is derived from implementing "the 4 Step Approach" below:
1. Assessing the Assets and Liabilities of the parties at the time of the proposed property division;
2. Assessing the Financial and Non-Financial Contributions of the parties from commencement of relationship to the time of proposed property division.
3. Assessing the Future Needs Factors of the parties – such as care of the child under 18 years of age, lower future income earning capacity than the other party or any health-related needs.
4. Lastly, any proposed property division must be Just and Equitable in the circumstances.
The Court generally examines the contributions in short relationships a lot more closely and assigns such contributions considerably more weight compared to a long relationship.
Usually the asset-by-asset approach to dividing specific assets will be adopted by the Court for short relationships, as opposed to using a global approach to the division of the asset pool. This is particularly the case in situations where the parties have kept their assets separate and have not intermingled their finances. The Court, however, still has discretion to utilise the global approach even in short term relationships depending on the particular facts of the matter.
The difficulty with ascertaining the percentage entitlement in short term relationship cases is perhaps best illustrated by a case of Anson & Meek  FamCAFC 257. The parties in that matter were in a short relationship of five years and did not have any children. The Husband owned around 96.5% of all assets prior to the marriage, however the Trial Judge ruled that a division of 60/40 in favour of the Husband would be just and equitable based on the Wife’s future needs. On contributions basis, the Trial Judge awarded 80% in favour of the husband and then further adjusted this percentage due to future needs factors in favour of the Wife by another 20%, resulting in the Husband receiving only 60%.
The counsel for the Husband on appeal provided a list of case law showing a considerably greater outcome in favour of the party in similar type cases at around 92% - 95%. The Full Court noted that the Trial Judge was not constrained by the outcomes in similar types of cases, however, the Appeal was allowed by the Full Court and the orders of the Trial Judge were set aside on several grounds as the Trial Judge had failed to take into account a number of relevant considerations when assessing the percentage entitlement.
This case highlights all too well that there can be no certainty as to the outcome in matters involving short term relationships, noting also that the Court will not be guided by the outcomes in similar type cases in the past, but rather continue to apply the 4 step approach and its vast discretion as to the determination of the relevant percentage split. Notwithstanding the above, a good family law practitioner should be able to provide his or her client a likely range of outcomes within a 10% range for any matter.
This is why it is essential to have the right professional advice and assistance at the early stage of your matter to avoid huge disappointment at Court. If your legal team guarantees you a certain exact outcome at Court and/or are too aggressive in suggesting the matter should proceed to Court no matter what, this should be a warning sign for you to change your legal representation or to obtain a second opinion.
In our experience, it is significantly more beneficial and cost-efficient for all parties in a short-term relationship to resolve their property dispute out of Court by way of obtaining Consent Orders or executing a Binding Financial Agreement, thereby saving tens of thousands of dollars in legal fees for each party. No matter the issue, we can assist with obtaining the best resolution out of Court.
Contact Surge Legal now regarding any family law related queries on 02 8722 5021 and receive a free initial legal advice.