The principal piece of legislation in New Zealand which deals with disputes between couples about their property on relationship breakdown is the Property (Relationships) Act 1976 (“the Act”).
Substantial 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
Various categories of people will fall outside of the scope of the Act, for example, family members such as a parent and adult child, or siblings. A boyfriend / girlfriend relationship where the parties have independent lives and do not cohabit does not have the hallmarks 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 tool to resolve any property related issues between them.
Definition of a de facto relationship
This can be found in section 2D of the Act. 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; they may be married to someone else but that does not matter;
- The parties must “live together as a couple”.
Living together as a couple
Section 2D (2) of the Act sets out a list of matters which are to be taken into account in considering whether or not there is a de facto relationship. The list is not an exclusive one. Any other circumstances can be considered; indeed, the Court must consider all circumstances. There will of course be some situations where some circumstances are more relevant than others. Furthermore, no one circumstance is a necessary condition for the purpose of determining where or not there is a de facto relationship.
The matters expressly listed in section 2D (2) of the Act are as follows:
- 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. They may have separate addresses. But the more time they spend together at the same place, the easier it will be to regard them as a de facto couple;
- Whether or not a sexual relationship exists;
- The degree of financial dependence or interdependence and any arrangements for financial support between the parties;
- 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 – commitment is an important test of whether or not there is a de facto relationship. Certain objective criteria, such as ownership of property, common address etc. are important but there must also be a subjective mental element; indicative of an emotional commitment to a shared life;
- The care and support of children – where two people have a child it does not follow that they are necessarily de facto partners; however, it can be relevant in some cases. 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 reputation and public aspects of the relationship – if two people appear together in public and attend public events together as a couple this provides objective evidence that they are a couple and reinforces the level of commitment between them.
There have been cases where the court have found there to be a de facto relationship even though the parties are not residing together. That said, whilst cohabitation is not absolutely necessary for a de facto relationship to exist, it has been held to be a very important and persuasive factor.
The three year rule
The starting point is this:
- If the court finds 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 provisions of the Act will ordinarily apply.
- 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 provisions of the Act will not apply.
There are, however, exceptions.
In respect of point (1) above, if the de facto partners have lived together for a period of three year or more the court may, having regard to all the circumstances and if it considers it “just” to do so, treat the de facto relationship as one of short duration.
Concerning point (2), if the de facto relationship is found to be one of short duration, an order may still be made under the Act for the division of relationship property if 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.
How Malley & Co can help you
If you require advice as to:
- whether or not you may be in a de facto relationship;
- whether the provisions of the Property (Relationships) Act may apply to you in the event of relationship breakdown (or the death of one of you); and
- any steps that may be taken to contract out of certain provisions of the Act,
please contact Sarah White on 03 379 0712 or email: email@example.com