By Dharsh Nanayakkara - 26 Sep 2019
Family demographics have changed significantly over the
past 60 years. To keep up, the Property (Relationships) Act
1976 (PRA) was amended in 2002 to extend the property sharing to
heterosexual and homosexual de facto and civil union
partners.
Current census figures indicate less
traditional marriages are taking place in favour of more blended
families and multiple de facto relationships.
After extensive consultation and a thorough review of the law
affecting relationship property, the Law Commission issued a report
in 2018 that made over 100 recommendations. I focus on two of
them.
First, the Commission found that "family use'' as a basis to
classify the family home sometimes resulted in unjust outcomes, for
instance, where the home was owned by one partner before the
relationship began, or if it was received by one partner as a third
party gift or inheritance during the relationship.
The Commission recommended that the home be divided equally only
where it was:
- Acquired by either partner for the common use or benefit of
both parties; or it was
- Acquired or produced by either partner during the relationship
(excluding third party gifts or inheritances).
Under the recommendation only the increase in value of the home
is treated as divided.
Secondly, the Commission noted the prevalence of trusts in
relationship property matters and observed that determining the
rights and remedies of relationship partners was complex.
It recommended new powers be given to the courts to look
behind trusts to see the real situation and to impose obligations
on trustees. Relationship partners would also be given the
right to lodge a claim over trust property in some
circumstances.
One of the reassuring observations by the Commission is that the
current section 21 'contracting out' regime is working effectively
and is striking an acceptable balance between allowing partners to
make their own arrangements as to how their property is divided on
separation while ensuring they receive the advice necessary to make
informed decisions about such agreements.
If you have any concerns or queries relating to any of the
matters raised, please contact our Family Law team.
Contacts
Dharsh
Nanayakkara