Some people deliberately decide to avoid the legalities of a marriage or a civil union and consciously live as de facto partners.  Others may develop such a relationship less consciously, sometimes by drifting into it, sometimes unaware they are, and unaware of the, potentially, significant financial implications if they separate or one partner passes away.

The main piece of law in New Zealand which deals with disputes between couples about their property when a relationship ends is the Property (Relationships) Act 1976 (“the Act”). Significant reforms in 2002 extended the scope of the Act to cover (among other matters) de facto relationships (including same-sex relationships).

When a relationship is not a de facto one

Some categories of people will fall outside the scope of the Act, for example, family members such as a parent and adult child, or siblings.  A boyfriend / girlfriend relationship where they have independent lives and do not live together does not have the features of a de facto relationship, even if it is a close personal and sexual relationship.  If a relationship is not a de facto one, these two people will have to use some other legal remedy to resolve any property related issues between them.

What is a de facto relationship?

The following are the basic criteria for a de facto relationship:

• There must be a relationship between two people;
• The relationship may be a heterosexual or a homosexual one;
• Both parties must be aged 18 years or over;
• The parties must not be married to each other;
• The parties must “live together as a couple”.

 What does it mean to “live together as a couple”?

Relevant factors can include:

• The duration of the relationship – the longer that two people have been associated together, the more likely it is they will be found to be living together as a couple.
• The nature and extent of common residence – two people may live together even though they do not reside at the same address all of the time. They may have separate addresses. But the more time they spend together at the same place, the easier it will likely be to regard them as living together as a couple.
• Whether or not a sexual relationship exists.
• The degree of financial dependence or interdependence and any arrangements for financial support between them.
• The ownership, use and acquisition of property – co ownership, especially of the common residence, is typically a sign of living together as a couple. The same can be said of using property in common, for example, a car, and buying items together.
• The degree of mutual commitment to a shared life – whilst ownership of property, a common address etc. are important there must also be a subjective mental element indicative of a commitment to a shared life together.
• The care and support of children – where two people have a child together it does not follow that they are necessarily de facto partners; however, it can be relevant in some cases. Also, a child of a de facto relationship does not just include a child born to the two people of the relationship. It may be necessary to take into consideration the care of children from previous relationships.
• The performance of household duties - for example, sharing the preparation of meals, domestic duties etc. may indicate a commitment to a shared life.
• The public aspects of the relationship – if two people appear together in public and attend public events together as a couple this may provide objective evidence that they are a couple.

Not all of these factors need to be met for there to be a de facto relationship. Any other circumstances can be considered.

The three year rule

If there is a de facto relationship and it is one in which the parties have lived together as de facto partners for three years or more, then the starting point is an equal division of their relationship property. There are, however, a number of exceptions to this.

If the de facto relationship is one in which the de facto partners have lived together for a period of less than three years, the relationship is treated as one of short duration and the starting point is the provisions of the Act will not apply, unless the court is satisfied:

• that there is child of the de facto relationship; or
• that the applicant has made a substantial contribution to the de facto relationship;

and the court is satisfied that failure to make the order would result in serious injustice.

Summary

Whether or not there is a de facto relationship can be important in terms of the potential financial consequences if the relationship were to end by separation, or death. In some situations those financial consequences may be unintended, and significant - especially if the de facto relationship is one of three years or more.

How we can help you

If you require advice as to:

• whether or not you may be in a de facto relationship;
• what that may mean for you in terms of any potential financial claims or consequences; and
• what you can do to protect your assets,

Please feel free to contact Sarah White, Consultant (03 343 8452 / sarah.white@mmlaw.co.nz) or any member of our family law team for further help and advice.