What is a de facto relationship?

by Maretta Twentyman & Debbie Dunbar - Morrison Kent

The Property (Relationships) Act 1976 defines this as a relationship between any two persons who are both aged 18 years or older, who live together as a couple, and who are not married to, or in a civil union with, one other.

The tricky question is determining whether people are “living together as a couple”. The answer can have potentially severe consequences, as the general rule applying to property division between couples is that once you have been living in a de facto relationship (or marriage or civil union) for three years or more, in the event of separation all relationship property is divided equally.

The Act provides some guidance, and states that all the circumstances of the relationship are to be taken into account, including any of the following matters:
  • The duration of the relationship;
  • The nature and extent of common residence;
  • 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;
  • The degree of mutual commitment to a shared life; 
  • The care and support of children;
  • The performance of household duties; and 
  • The reputation and public aspects of the relationship.  

However none of these factors are decisive, and the Court has stressed in recent years that they are merely indicative. It is a matter of fact and degree in each case as to whether the particular circumstances satisfy the overall assessment of whether people are living together as a couple.

At one end of the spectrum, there is no real question when people live in the same home and have children together. However it gets a little murkier when there is no clear start or end date to a relationship, and the living arrangements have varied. People can be held to be living together as a couple even though they do not live under the same roof, which means it is not always easy to know when property consequences can flow from a relationship. 

Some situations where the Court has found a de facto relationship to exist include:

  • Where people have maintained separate homes over a period of many years, but nonetheless been found to lead a life most would regard as “shared”;
  • Where a foreign divorce has been pronounced, but people have continued to live in the same home; and
  • Where a relationship began as that of flatmate/boarder, but there were degrees of emotional dependency and sexual intimacy.  

If you have any concerns about how your relationship would be classified, it is best to get early legal advice to clarify your position. You may wish to take steps to protect your assets, such as by signing a Contracting Out Agreement.

If you would like any further information or advice please contact either of the article authors: Maretta Twentyman or Debbie Dunbar, or the Morrison Kent Wellington office (04) 472-0020. 

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