For de facto couples not covered by the Family Law Act 1975 (Cth) (see Two year time requirement), the following principles apply. Note that there is no longer any state legislation that covers de facto relationships and property issues.
Property held in joint names
If the property in dispute is in joint names, the court will usually order that the property be divided equally unless it can be shown that one person should receive more. If it is in the name of one partner only, there are several legal concepts that can be used by the other partner to support a claim to an interest in the property. Whichever remedy, or combination of remedies, is used by a partner who is seeking to enforce property rights, each case finally depends on its facts. The following list sets out the most common of the possible remedies. The law in this area is extremely complex and legal advice should be sought by anyone who wants to make a claim under any of these arrangements.
Property held for the benefit of the other party
If one partner clearly states that he or she holds certain property for the benefit of the other, this amounts to an express declaration of trust. This is not effective as far as real property (a house or land) is concerned unless the declaration is in writing. The only exception is in cases where the lack of writing would amount to equitable fraud.
There is an implied trust where property is held by one person with an unexpressed or presumed intention that some other person has an interest in it - for example, where, on the purchase of property, some of the purchase price is paid by someone other than the purchaser. To find out if there is an implied trust in a particular case, it is necessary to examine:
- what kind of contribution was made and whether that contribution was intended as a gift
- if there was a gift, what was the real, rather than the presumed, intention of the person making the gift.
A constructive trust is difficult to define. It could be said that it is a trust imposed by the court in order to satisfy the demands of justice and good conscience, without any reference to the express or presumed intentions of the person involved. Courts have found that a constructive trust exists in some cases where one party worked on building or renovating a house, but not in others where there was responsibility for ordinary housework and maintenance. Decisions have gone either way depending on the particulars of each individual circumstance.
Conferring property interests on the other party
Partners can confer property interests on one another by the use of an express contract. Express contracts should be in writing and conform with the normal laws of contract. Sometimes a court will find that there was an implied contract. The court presumes that, as reasonable people, the partners would have agreed to a certain contract. Its use is limited to appropriate situations.
Recognising money spent on property
A partner may rely on the concept of proprietary estoppel in support of a property claim where the partner has spent money or otherwise disadvantaged him or herself:
- while acting on the mistaken belief that he or she already owns, or will own, an interest in property sufficient to justify the expenditure
- while the real owner of the property actively or passively encourages the mistaken belief
- where there is no bar under the rules of equity to the granting of a remedy.
Legally binding gifts between partners can be made in three ways:
- by clear words in a deed (document)
- when a person intends to pass property to the recipient and actually delivers it to the recipient
- when a person intends to pass property to the recipient and the person's actions amount to the delivery of the property to the recipient.
The Family Mediation Service at Relationships Australia, Centacare, or private mediators can assist in resolving de facto property disputes. There is usually a fee for these services.
The content of the Law Handbook is made available as a public service for information purposes only and should not be relied upon as a substitute for legal advice. See Disclaimer for details. For free and confidential legal advice in South Australia call 1300 366 424.