When a relationship ends, dividing property can be a tricky process, especially in common law relationships. Unlike married couples, those in common law relationships may face different legal processes and considerations during a property settlement. Understanding these differences is important to ensure a fair and smooth resolution.

This guide aims to demystify common law property settlements in Australia. We will break down the legal recognition of common law relationships, outline the necessary steps for property settlement, and explore factors that influence property distribution. Additionally, we will highlight common pitfalls to avoid, helping you navigate this complex process confidently.

Knowing your rights and obligations in a common law property settlement can save you time, stress, and money. Whether you are just starting the process or finding yourself stuck along the way, this guide offers clear and simple instructions to help you move forward. 

By following the outlined steps and being aware of potential challenges, you can achieve a settlement that respects both parties’ contributions and future needs.

Understanding Common Law Property Relationships

Common law relationships, also known as de facto relationships, refer to couples who live together on a genuine domestic basis but are not legally married. In Australia, the Family Law Act 1975 recognises these relationships for property settlements and other legal matters. 

To be considered a common law relationship, the couple usually needs to have lived together for at least two years, have a child together, or have combined their finances and assets substantially.

Key Differences from Marital Relationships

While both common law and marital relationships involve sharing lives and assets, they differ in legal recognition. Married couples have automatic legal rights and obligations under the law. On the other hand, those in common law relationships must provide evidence to substantiate their relationship status. 

This might include proving cohabitation, joint finances, or shared responsibilities. The legal process for settling property disputes can be more complex for common-law couples due to these additional requirements.

Criteria for Property Settlement

To qualify for a property settlement in a common law relationship, certain criteria must be met. Firstly, the relationship must fall within the legal definition of a de facto relationship. Secondly, a claim for property settlement should be made within two years of the relationship ending. 

The court also considers factors such as the duration of the relationship, financial contributions by each party, non-financial contributions such as homemaking, and the future needs of each party. Meeting these criteria helps ensure a fair and equitable settlement.

Steps to Navigate a Common Law Property Settlement

1. Initial Assessment of Assets and Liabilities

Navigating a property settlement begins with an initial assessment of all assets and liabilities. This includes identifying all properties, bank accounts, investments, superannuation, and personal belongings accumulated during the relationship. Liabilities such as mortgages, loans, and debts should also be listed. A clear understanding of what is to be divided helps set a foundation for negotiations and ensures transparency.

2. Role of Mediation and Negotiation

Mediation and negotiation play crucial roles in reaching an agreement on property settlement outside of court. Mediation involves a neutral third party who helps both partners communicate their needs and come to a mutual decision regarding asset division. 

It’s a time-saving and cost-effective way to resolve disputes without undergoing lengthy court procedures. Mediation helps build a cooperative approach where both parties contribute to the solution, making for a smoother settlement process.

3. Legal Documentation and Court Procedures

If mediation and negotiation fail, legal documentation and court procedures become necessary. Both parties need to prepare and file affidavits detailing their assets, liabilities, income, and contributions to the relationship. The court will then schedule hearings and examine the evidence presented. 

During this stage, a judge will make a decision on how to divide the property based on legal principles and fairness. Engaging legal advice during this process can ensure that all documentation is accurate and that your interests are represented effectively in court.

Factors Influencing Property Distribution

1. Contributions to the Relationship

The court looks at both financial and non-financial contributions made by each partner to the relationship. Financial contributions can include income, savings, and property brought into or accumulated during the relationship. Non-financial contributions, like homemaking and caring for children, also play a significant role. The court aims to recognise and balance these efforts fairly. These contributions help determine how the assets and liabilities should be divided between both parties.

2. Future Needs of Each Party

Another important factor is the future needs of each party. This includes age, health, earning capacity, and financial resources. For instance, if one partner has a lower potential income or health issues that limit their ability to work, the court may allocate more resources to support them. The goal is to ensure that both partners can move forward independently and with financial stability. This balance considers both immediate and long-term needs for fairness.

3. Impact on Children and Dependents

The well-being of children and dependents is a primary consideration in property settlements. The court looks at who the children will live with and their associated needs. This can influence decisions on the family home and other assets that may directly affect the children’s life. Ensuring that the children’s living situation remains stable and that their needs are met is crucial. This focus aims to protect the best interests of the children involved.

Pitfalls to Avoid in Common Law Property Settlements

1. Failing to Disclose All Assets

Transparency is critical during property settlements. Failing to disclose all assets can lead to legal complications and delays. Both parties are required to provide a full and honest disclosure of their financial situation, including hidden assets or debts. Incomplete disclosure can result in unfair settlements and reflect poorly in court. Being upfront ensures a smoother process and a fair division of property.

2. Ignoring Superannuation and Future Financial Needs

Superannuation is often overlooked but is a vital part of a property settlement. Both parties’ superannuation balances are considered part of the total asset pool. Ignoring this can lead to an unequal distribution of future financial resources. 

Similarly, future needs, such as retirement plans and ongoing financial obligations, should be factored in. Considering these aspects helps ensure long-term financial security for both partners.

3. Underestimating the Importance of Legal Advice

Navigating a common law property settlement without legal advice can be risky. Legal professionals can provide valuable guidance, ensuring that your rights are protected and that the process adheres to legal standards. 

Underestimating this importance might lead to errors or imbalances in the final settlement. Seeking legal advice early can help you understand your position, prepare the necessary documentation, and avoid common pitfalls.

Understanding Your Rights: Common Law Property Division

Understanding and navigating common law property settlements can seem overwhelming, but being informed makes the process much easier. It’s important to comprehend the legal recognition of common law relationships, and the steps required to settle property disputes. If you are unsure about any aspect of your property settlement, seeking expert advice can help you navigate the complexities involved.

For personalised assistance and expert legal advice on common law property settlement agreements in Brisbane, contact Hooper & Mill Family Lawyers. We are here to help you achieve a fair and just settlement, ensuring your rights and best interests are protected every step of the way.

Family Law Amendments

The Family Law Amendment Bill 2023 provides for significant changes to the family law system in Australia. These amendements will likely prove to be as significant as the Family Law Reform Act 1995; and the Howard Government 2006 amendments to the Family Law Act 1975 (“FLA”) that these reforms will largely displace.

At the date of writing this, the Bill has passed both Houses of Parliament (as of 19 October 2023) and received Royal Assent on 6 November 2023.

The genesis of these amendments is primarily from the Australian Law Reform Commission’s Final Report No 135: Family Law for the Future – An Inquiry into the Family Law System. The 2023 Bill implements elements of Government responses to the Joint Select Committee on Australia’s Family Law System.[1]

The scope of this article is to examine the following key elements of the Family Law Amendments to come:

  • Priority to be assigned to children’s safety issues.
  • Repealing the presumption of equal shared parental responsibility contained with section 61DA FLA.
  • Replacing the current “best interest” factors in section 60CC(2) and (3) FLA with a new list of factors.
  • Increased prominence to children’s views; and
  • Clarifying the role of Independent Children’s Lawyers.

There are further significant changes from these Family Law Amendments relating to parenting matters that will not be expanded upon herein, but they include:

  • Amendment to the Objects and Principles in section 60B. In the 2006 amendments, these changes added context and overlapped with best interest factors. Interestingly this amendment is very narrow and very broad at the same time. The objects single out safety as a specific object and then refer generally to the Convention on the Rights of the Child – New York 20 November 1989 – which is a broad range of issues.
  • Simplification and clarification to the process for dealing with contravention of Orders.
  • Process concerning vexatious litigants.
  • Changes and simplification to law concerning publication of information regarding family law matters and parties.
  • Regulation of Family Report Writers.
  • Case management process.

It should also be noted that significant changes to property divisions of the Family Law Act are also making their way through the parliamentary process with the Family Law Amendment Bill 2023 No2.

When will these Family Law Amendments occur?

The 2023 Bill has passed both houses and it received Royal Assent from the Governor General on 6 November 2023.

The Bill sets out commencement provisions in a table providing for a transition to the new system 6 months after proclamation for the majority of the substantive provisions. Thus, amendments relating to Objects, Parental Responsibility and Best Interest Factors, Contravention Applications, Independent Children’s Lawyers Duties and Hague Convention matters, Case Management and Procedures, Publication of Family Law Proceedings, communications and identifying parties and Family Report writers, will take effect from 6 May 2024.

Priority to children’s safety issues

As stated above, section 60B concerning the “objects and principles” is to be repealed and substituted for 2 objects. These are (paraphrased):

  1. Ensure the best interests of children are met by ensuring their safety[2].
  2. Give effect to Convention on the Rights of the Child done at New York on 20 November 1989[3].

In terms of matters that relate to the “safety” of children, the Bill does not repeal definitions contained within FLA of “Abuse”[4] or Family Violence[5]. Notably, section 4AB(3) definition of family violence provides:

For the purposes of this Act, a child is exposed to family violence if the child sees or hears family violence or otherwise experiences the effects of family violence.

Thus, there are numerous factual situations that can be relevant to the object of ensuring the safety of a child, with family violence and exposure to family violence likely to be a prominent consideration.

With respect to the second limb of the objects, the Convention Articles 1 to 41 in Part 1 refers to a wide range of matters including the following examples:

  • Freedom from discrimination – race, colour, sex, language, religion, political or other opinion, national, ethnic or social origin, property, disability, birth or other status.
  • Ensure the child has such protection and care as is necessary for his or her well-being.
  • A child shall have the right to maintain on a regular basis, save in exceptional circumstances, personal relations and direct contacts with both parents.
  • States parties shall use their best efforts to ensure recognition of the principle that both parents have common responsibilities for the upbringing and development of the child.
  • Parents (or guardians) have the primary responsibility for the upbringing and development of the child. The best interests of the child will be their basic concern.

The above are just some examples of matters covered by the convention and it behoves family law practitioners to become familiar with the contents. Many of the Convention Articles also cover matters which relate to ensuring the safety of children, overlapping with the new section 60B(a).

The former version of section 60B also made it clear it was an object of the FLA to, inter alia, “protect children from physical or psychological harm from being subjected to, or exposed to, abuse, neglect or family violence”. The new section 60B(a) omits the word “neglect” however neglect is referred to in the new section 60CC(2)(a).

There is a clear focus on safety issues and these changes are not occurring in a vacuum. Family Violence is a high-profile political issue nationwide, and as of August 2023 in Queensland significant changes occurred in Domestic and Family Violence legislation. These changes included:

  • Amendments to the Criminal Code and definitions.
  • For cross applications – changes with respect to the way in which applications are heard and to identify which applicant may be in greater need of protection.
  • Use of criminal and domestic violence history and a requirement for this information to be made available.
  • Wider power to award costs.
  • Reopening of proceedings where orders were made in the absence of the respondent and rules of substituted service of the respondent.
  • Explanations with respect to what constitutes evidence of domestic violence.
  • Directions to a jury in criminal proceedings involving domestic violence.
  • Transitional provisions.

You can read about these changes in our article here.

Practitioners will need to consider responses to Protection Order Applications very carefully given the broader consequences for Parenting Proceedings after these Family Law Amendments.

The old and new section 60B both refer to protecting children however the 2023 Bill’s removal of a reference to rights of children, for example, children’s right of having the benefit of both of their parents (and other significant persons) meaningful involvement in their lives, adequate and proper parenting, ensuring parents fulfil their duties, and meet their responsibilities, etc. The changes appear to elevate the protective concerns and relegate the former rights and duties to the broad range of matters referred to in the Convention.

Further emphasis of the priority to be afforded to safety is contained within the amendments to the best interest factors discussed below.

Presumption of equal shared parental responsibility removed in Family Law Amendments

Two of the Howard Government’s most significant amendments to the determination of parenting matters were the introduction of 61DA and section 65DAA.

Sections 61DA and 65DAA relate to the creation of the rebuttable presumption that equal shared parental responsibility is in the best interests of a child[6]; and specifying the pathway for the Court to take in determining a parenting matter where the presumption applies[7]. The presumption does not apply to matters where there are reasonable grounds to believe a parent had engaged in family violence or abusive behaviour.

The pathway provides for consideration of equal time (subject to best interests and reasonable practicability) before moving to consider “substantial and significant time” (again subject to best interests and reasonable practicability) before looking at other time should the former two considerations be ruled out (subject to best interests).

The changes in 2006 had a significant effect on the conduct of interim applications, as set out in the decision of Goode v Goode[8]. The often-cited case with respect to the conduct of interim proceedings prior to that time was Cowling v Cowling[9]. Put simply, Cowling provided that on an interim application the best interests of children were usually served by maintaining the status quo of the arrangements prior to the application.

Goode v Goode had the effect of displacing Cowling and Cowling’s significance due to the necessity of following the pathway in section 65DAA when the equal shared parental responsibility presumption applied. Over time in practice the Court “side stepped” the necessity of applying the pathway in Goode v Goode on an interim application by not making any Order allocating Parental Responsibility. Section 61DA(3) provides:

When the court is making an interim order, the presumption applies unless the court considers that it would not be appropriate in the circumstances for the presumption to be applied when making that order.

 The Bill repeals sections 61DA, 61DB and 65DAC and substitutes a new section 61DAA which provides:

61DAA Effect of parenting order that provides for joint decision‑making about major long‑term issues

  • (1) If a parenting order provides for joint decision‑making by persons in relation to all or specified major long‑term issues in relation to a child, then, except to the extent the order otherwise specifies, the order is taken to require each of the persons:
    1.  (a) to consult each other person in relation to each such decision; and
    2.  (b) to make a genuine effort to come to a joint decision.
  • (2) To avoid doubt, this section does not require any other person to establish, before acting on a decision about the child communicated by one of those persons, that the decision has been made jointly.

The notable differences between the new and old sections are:

  • The removal of the word “parental” and substituting the language to refer to “decision making responsibility”. Part 2 of the 2023 Amendment Bill refers to Parental Responsibility in the heading.
  • Removal of section 65DAC – and specifically subsection 2 that requires a decision regarding major long-term issues to be made jointly. The new section simply requires consultation and a genuine effort to come to a joint decision.

Therefore, it seems it will no longer be a breach of a Parenting Order allocating shared decision making if a party unilaterally decides to change a child’s school, initiate a medical procedure, change a child’s name or relocate a child’s residence etc, provided there has been consultation and a genuine effort to reach agreement. The effect of this is unclear, and there will likely need to be clarification as matters involving these issues are litigated.

An immediate observation is that under the section 65DAC requirements, the litigation typically occurred before a decision was made on a major long-term issue. Now it appears to be likely that any litigation will occur subsequently – when changing a child’s circumstances post decision may be a significant consideration with respect to best interests.

Understanding the new factors – what do they mean in practice?

The Howard Government repealed the old section 68F and replaced it with section 60CC(2) and (3) best interest factors. The 2006 changes further introduced two categories of factors – “primary and additional” with the two primary considerations relating to the child having a meaningful relationship with both parents and the need to protect children from harm.

The 2023 Family Law Amendments amend section 60CC and removes these two categories and replaces them with “general considerations” and “additional considerations” (with the latter solely referring to Aboriginal and Torres Strait Islander culture issues).

The new general considerations in subsection 2 are:

  •  (1) Subject to subsection (4), in determining what is in the child’s best interests, the court must:
    1. consider the matters set out in subsection (2); and
    2. if the child is an Aboriginal or Torres Strait Islander child—also consider the matters set out in subsection (3).
  • (2) For the purposes of paragraph (1)(a), the court must consider the following matters:
    1.  (a) what arrangements would promote the safety (including safety from being subjected to, or exposed to, family violence, abuse, neglect, or other harm) of:
      1.  (i)the child; and
      2. (i) each person who has care of the child (whether or not a person has parental responsibility for the child);
    2.  (b) any views expressed by the child;
    3.  (c) the developmental, psychological, emotional and cultural needs of the child;
    4.  (d) the capacity of each person who has or is proposed to have parental responsibility for the child to provide for the child’s developmental, psychological, emotional and cultural needs;
    5.  (e) the benefit to the child of being able to have a relationship with the child’s parents, and other people who are significant to the child, where it is safe to do so;

anything else that is relevant to the particular circumstances of the child.

 The protective factors in section 2)a) above are further amplified by section 2A which provides that in considering the matters in section 2)a) the Court must also consider:

  • History of family violence, abuse or neglect involving the child or a person caring for the child.
  • Any Family Violence Order applied to the child or member of the child’s family.

Subsection 4 relates to Consent Orders and widens the Court’s discretion. For Consent Orders in a parenting matter the Court is no longer required to be satisfied as to best interests but may, but is not required to, have regard to all or any of the matters set out” in section 60CC(2) or (3).

In terms of the differences between the 2006 best interest factors and the 2023 Family Law Amendments, the following differences stand out:

  • As stated above, there is a clear move away from primary and additional factors. The amendments to section 60CC refer to general and additional consideration however the additional considerations only relate to cultural issues for Aboriginal and Torres Strait Islander children. There is no priority given to any of the general considerations in the 2023 Bill.
  • The wording of the factors for protective issues have changed. The former version of section 60CC(2)(b) referred to “the need to protect the child from… harm”. The new section 60CC(2)(a) refers to “what arrangements would promote the safety…of the child and each person who has care of the child.”

Like previous legislation listing Best Interest factors, the 2023 Bill contains a broad statement in section 60CC(2)(f) which provides for “anything else that is relevant to the particular circumstances of the child.” Thus, the matters the Court can have regard to are not limited and will depend on the facts of each case. However, the following factors from the prior version of section 60CC have been removed and not replaced specifically:

  • The nature of the child’s relationship with parent’s or other persons such as grandparents.
  • The extent to which each parent has participated in decision making about major long terms issues, spending time, and communicating.
  • The extent to which a parent has fulfilled or failed to fulfill maintenance obligations.
  • The likely effect of a change in the child’s circumstances.
  • Practical difficulties and expense of spending time.
  • Maturity, sex, lifestyle and background of the child and parents.
  • Attitude towards the child and responsibilities of parenthood demonstrated by each of the child’s parents.
  • Whether it would be preferable to make an Order less likely to lead to institution of further proceedings.

The tone of the Howard Government amendments seemed to elevate the status of a parent. The above factors that were omitted refers specifically to parents in many instances, along with the changes to 60B, and removal of the phase “parental responsibility” from the new section 61DA seems to indicate parents and people caring for a child have no distinction.  The new section 60CC(2)(e) is similar in language to the old section 60CC(2)(a) however it also refers to “other people who are significant to the child” and not parents exclusively as the former provision did.

How will a child’s views be given greater prominence and independent children’s lawyers?

Children’s views have featured in each version of the Best Interest Factors:

  • Pre 2006 – section 68F(2) – any wishes expressed by the child and any factors (such as age and level of maturity or level of understanding) that the Court thinks are relevant to the weight it should give to the child’s wishes.
  • 2006 – section 60CC(3)(a) – any views expressed by the child and any factors (such as maturity or level of understanding) that the Court thinks are relevant to the weight it should give to the child’s views.
  • Post 6 May 2024 – section 60CC(2)(b) – any views expressed by the child.

The new wording removes the reference to factors such as maturity and level of understanding however it is safe to assume judicial officers will continue to take these circumstances into account (for younger children in particular).

Currently children’s views are typically determined and communicated to the Court through the Family Report interview process. Independent Children’s Lawyers (“ICL”) and Judges can meet with children to determine their views – however this rarely occurs in practice. This will change post 6 May 2024 with amendments to section 68LA making it mandatory for ICL’s to meet with children unless exceptional circumstances apply.

In the Family Law Amendments, section 68LA(5) provides that an ICL must meet with the child and provide the child with an opportunity to express any views to which the proceedings relate. The ICL can determine when, how often and how meetings take place; and when, how often and how the child is provided with the opportunity to express a view[10].

The ICL is not required to meet with the child if:

  • The child is aged under 5 years.
  • The child does not want to meet with the ICL.
  • There are exceptional circumstances that justify not meeting with the child[11].

Exceptional circumstances include if performing the duty would:

  • Exposing the child to the risk of physical or psychological harm that cannot be managed safely.
  • Have a significant adverse effect on the wellbeing of the child[12].

If the ICL proposes to not perform the duty, before making Final Orders the Court must:

  • Determine whether it is satisfied the exceptional circumstances exist.
  • If the circumstances do not exist – make an Order requiring that the ICL meets with the child and that the child has an opportunity to express his or her views[13].

The above is likely to amount to a significant change in the process in matters where an ICL is appointed and underscores that the 2023 Bill places an emphasis on children being heard in the proceeding. Another effect may be less resort to Impact Reports and Family Reports in cases where children are older, more mature, and able to articulate a clear view.

Other matters and conclusion

Further changes of interest are the insertion of the “overarching purpose of the family law practice and procedure provisions” in section 95. To paraphrase these provisions to facilitate the just resolution of disputes, matters must be conducted in a way:

  • Ensure safety of families and children.
  • Consistent with best interests being paramount.
  • According to law.
  • Resolution as quickly, inexpensively, and efficiently as possible.
  • Just determination of proceedings.
  • Efficient use of judicial and administrative resources.

The above also needs to be read in the context of section 96 which places duties upon parties and practitioners. Parties are required to conduct proceedings consistently with the overarching purpose while lawyers have a duty to:

  • Take account of the duty of parties.
  • Assist a party to comply with the duty.

Section 96 also provides the Court may take into account failure to discharge the above duties in making Costs Orders[14] and that the Court has a discretion to make such Costs Orders against lawyers personally – that cannot be recovered from the client[15].

In conclusion 2024 will see a significant shake up to the way in which practitioners will need to approach parenting matters and the conduct of proceedings. Similarly, to the years following the 2006 amendments, there will likely be further guidance provided by important cases clarifying what the changes mean in practice. In the meantime, practitioners should familiarise themselves with the amendments and be cognisant of their duties towards the overarching purpose.

Peter Hooper and Shaun Mill specialise in all areas of Family Law. Please contact us here or call us on 3207 7663 if you require assistance wtih your family law matter.

 

[1] Family Law Amendment Bill 2023 – Attorney General Department – Citizens Space.

[2] Family Law Amendment Bill 2023 section 60B(a).

[3] Family Law Amendment Bill 2023 section 60B(b).

[4] Section 4 – an assault including sexual assault or involving a child in sexual activity directly or indirectly.

[5] Section 4AB – violent or threatening behaviour, coercive behaviour, assault, sexual assault and abuse, stalking, derogatory taunts, intentionally damaging property, injury or death to an animal, unreasonably denying financial autonomy or financial support to meet reasonable living expenses, keeping family or cultural connections, depriving liberty.

[6] Section 61DA

[7] Section 65DAA

[8] [2006] FamCA 1346 (15 December 2006)

[9] [1998] FamCA 19

[10] Section 68LA(5AA)

[11] Section 68LA(5B)

[12] Section 68LA(5C)

[13] Section 65LA(5D)

[14] Section 96(4)

[15] Section 96(5) and (6)

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