Division of Property upon a Relationship Breakup
Fri Oct. 3rd 2014
In the absence of a “Contracting Out Agreement” division of property is primarily governed by the Property (Relationships) Act 1976 (“the Act”) where married couples, civil union couples and those in de facto relationship separate or one of them dies.
Generally a couple’s property (being relationship property) is to be divided equally between them providing:
- the relationship is not one of short duration (i.e. for a period of not less than 3 years); or
- equal sharing is not “repugnant to justice”.
In dividing property, it is important to distinguish between “relationship property” and “separate property”. Generally relationship property includes (and this list is not exhaustive):
- the family home and family chattels;
- all property owned jointly or as tenants in common in equal shares;
- all property owned by either spouse or partner immediately before their marriage, civil union or de facto relationship began, if:
- the property was acquired in contemplation of the marriage, civil union or de facto relationship; and
- the property was intended for the common use or common benefit of both spouses or partners.
Separate property includes (and this list is not exhaustive):
- all property that is not relationship property;
- (subject to certain progressions of “the Act”) all property acquired out of separate property and the proceeds of any disposition of separate property;
- (subject to certain progressions of “the Act”) any increase in the value of separate property, and any income or gains derived from separate property.
Two purposes of “the Act” are:
- to recognise the equal contribution of the husband and wife to the marriage partnership, of civil union partners to the civil union and of the de facto partners to the de facto relationship;
- to provide for a just division of relationship property when the relationship ends by separation or death and in certain other circumstances and to take account of the interests of any children.
The guiding principles to achieve the purposes of “the Act” are:
- that parties have equal status and the equality should be maintained and enhanced;
- all forms of contribution to the relationship are treated as equal;
- just division of relationship property as regards to the economic advantages or disadvantages to the spouses or partners arising from their relationship; and
- the questions arising under this Act about relationship property should be resolved as inexpensively, simply, and speedily as is consistent with justice.
Careful consideration should be given to issues of relationship property at the time of the relationship breakup for obvious reasons. The Act contains a number of exceptions and provides Court discretion in a number of areas. These are too numerous to mention in this article which should be properly considered with the benefit of legal advice.
The contents of this article are for general information only and does not constitute legal advice and should not be substituted for professional legal advice obtained from your solicitor.