Bills Digest no. 9 2008–09
Family Law Amendment (De Facto Financial Matters and
Other Measures) Bill 2008
WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Passage history
Purpose
Background
Financial implications
Main provisions
Concluding comments
Contact officer & copyright details
Passage history
Date
introduced:25 June
2008
House:House of Representatives
Portfolio:Attorney-General
Commencement: Various dates as set
out in clause 2 of the Bill. The substantive amendments relating to
de facto financial matters (Schedules 1 and 2) commence 6 months
from the day of Royal Assent or earlier by Proclamation.
Links:
The
relevant links to the Bill, Explanatory Memorandum and second
reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/.
When Bills have been passed they can be found at ComLaw, which is
at http://www.comlaw.gov.au/.
To extend federal jurisdiction under the
Family Law Act 1975 (the Act) to financial matters arising
out of the breakdown of de facto relationships, including both
opposite sex and same sex relationships.
The Bill has been referred
to the Senate Legal and Constitutional Affairs Committee for
inquiry and report by 27 August 2008. ( the Senate inquiry ).
Details of the inquiry are at:
http://www.aph.gov.au/Senate/committee/legcon_ctte/family_law/index.htm
The Digest draws on
submissions and evidence given to the Senate inquiry.
This Bill relies on the states referring their
powers to the Commonwealth in accordance with section 51(xxxvii) of
the Constitution.
The Commonwealth Constitution allows for the
re-distribution of powers from the states to the Commonwealth in
section 51(xxxvii) by enabling a state or states to refer power to
the Commonwealth.[1]
The referral process is not spelled out in section 51(xxxvii) and
referral can be accomplished in different ways. For example the
states can agree on a draft Bill which is then enacted by the
Commonwealth. A second way is where the states refer matters in
general terms although they may well wish to be as specific as
possible in what they do refer.
The need for the states to refer power to the
Commonwealth to legislate with respect to the financial affairs of
de facto couples is predicated on the fact that the Commonwealth
otherwise lacks the power to deal with that matter. The Family Law
Act derives its constitutional basis from the marriage power, and
the divorce and matrimonial causes power (sections 51(xxi) and
51(xxii) of the Constitution).[2]
Referral of powers over the property rights of
de facto couples has been on and off the political agenda for some
time. It was raised in 1976 during meetings of the Australian
Constitutional Convention by then NSW Attorney-General who
unsuccessfully suggested the Convention should resolve that powers
over the property rights of de facto couples should be referred to
the Commonwealth. A similar suggestion was made by the
Constitutional Commission in 1988[3] and in subsequent fora and reports.[4]
In 1994, the Queensland Government announced
that it would refer its power to the Commonwealth and the
Attorney-General of the day urged other States to follow
suit.[5] In 1999, the
then Commonwealth Attorney-General, Daryl Williams QC MP indicated
that the Commonwealth would agree to a referral of powers even if
only some States wanted to refer their powers. He said:
One significant gap in the family law system is
its coverage of the 10 per cent of couples who choose to live in
defacto relationships.
I am concerned that, if they separate, de facto
couples do not have the same ability to resolve their property and
parenting issues through nationally consistent processes. This is
especiallya problem since the High Court s decision in Re Wakim,
which declared the Commonwealth/State cross-vesting scheme
unconstitutional.
The issue of the referral to the Commonwealth
of State powers concerning de facto relationships has been
discussed in the Standing Committee of Attorneys General (SCAG)
since 1992. Without a reference of state powers, the Commonwealth
does not have constitutional power to legislate in the area of de
facto relationships.
The Law Council of Australia has indicated that
its preferred approach is to have all States and Territories refer
power in relation to de facto relationship property matters to the
Commonwealth.
I believe such a move is overdue. However, I am
also a realist and I recognise that it might not be possible to get
the agreement of all the States. It is now appropriate, I believe,
to consider action on a reference of power by some States, even if
other States are not prepared to participate. I intend to raise
this issue soon with my State and Territory colleagues through the
SCAG forum.[6]
It was on 8 November 2002 at the SCAG meeting
that an in-principle agreement was finally reached for the states
to refer their powers to the Commonwealth in relation to dealing
with property disputes relating to separating de facto
couples.[7]
When announcing the introduction of the Bill,
the Attorney-General, the Honourable Robert McClelland MP, stated
that the Bill implements this 2002 SCAG agreement and also honours
a commitment in the Government s National Platform to ensure that
family law applies in a consistent and uniform way to de facto
relationships.[8] The
Attorney also stated:
Consistent with the Government s policy, the
legislation will not discriminate between opposite-sex and same-sex
de facto couples. Nothing in the legislation will alter marriage
laws.[9]
Currently, NSW, Victoria, Queensland and
Tasmania have enacted legislation allowing the referral.[10] For example, the
Commonwealth Powers (De Facto Relationships) Act 2003
(NSW) refers to the Parliament of the Commonwealth from the date of
commencement the following matters:
Financial matters relating to de facto partners
arising out of the breakdown of de facto relationships between
people of opposite sexes.
Financial matters relating to de facto partners
arising out of the breakdown of de facto relationships between
people of the same sex.
De facto relationship is defined to mean:
a marriage-like relationship (other than a
legal marriage) between two persons.
Financial matters are defined to mean any or
all of the following:
- the maintenance of de facto partners
- the distribution of the property of de facto partners
- the distribution of any other financial resources of de facto
partners, including prospective superannuation entitlements or
other valuable benefits of or relating to de facto partners.
Victoria, Queensland and Tasmania s referral
legislation is in similar terms.
South Australian and Western Australia have
not passed legislation, although Western Australia has legislation
that would give a partial referral in relation to the
superannuation interests of de facto couples. During hearings at
the Senate inquiry into the Bill, an officer from Attorney-General
s Department told the Committee that the Commonwealth
Attorney-General has been in discussions with the South Australian
Government about a possible referral.[11]
The Bill will apply in the territories by
virtue of section 122 of the Constitution.
Most states have referred their powers over
children born outside of marriage to the Commonwealth[12] meaning the Family
Court can hear all disputes relating to residence and contact with
children regardless of whether the parents were ever married.
However, disputes about property have not as yet been referred to
the Commonwealth, so unmarried couples have been forced to use the
federal Family Court for disputes over children and state courts
for disputes over property.[13]
The laws concerning the property of de facto
couples vary from one State to another.[14] There is a threshold before the
statutes apply which is usually living together for at least two
years. A period less than this typically suffices if they have a
child together. In some States such as Queensland[15]and Western Australia, there is
little or no difference between the principles that apply on the
breakdown of de facto relationships and the principles which apply
on the breakdown of marriages.[16] In other States such as New South Wales and
Victoria, there are some significant differences in the way that
married couples and de facto couples are treated in the law.
However, Victoria has recently enacted, but not yet
implemented,[17]
new legislation on the subject[18] which is more similar to Queensland and Western
Australia.
The main difference between the laws in
different States is whether the courts, in dividing the property of
the former de facto partners, take account of the future needs of
the other partner as they do for married couples. In New South
Wales and Victoria (at present), the law is confined to dividing
the property on the basis of the past contributions of the parties.
There is no additional component to take account of future needs or
financial resources. By contrast, in other States there is an
allowance made for future needs and resources in dividing the
property.
Another difference relates to spousal
maintenance. In South Australia, Queensland and Victoria a primary
caregiver cannot access maintenance payments from their ex partner,
whilst in New South Wales and the ACT spousal maintenance is only
available until the child reaches 12 years of age.[19]
Possibly the most significant difference
between all the State laws and the Family Law Act is that there is
no power under State law to make orders which will split the
superannuation entitlements.
The courts may only take account of a
significant imbalance in superannuation entitlements by giving the
other partner more of the tangible property. Under the Family Law
Act, the courts have more options. The superannuation can be valued
in accordance with formulae that are defined in regulations, and
the court may split the entitlements in various ways if this is the
best way of doing justice between the parties.
States and
territories de facto legislation and same sex
relationships
Every state and territory formally recognises
both opposite sex and same sex relationships in some manner. When
the various states and territories passed laws recognising same sex
couples, these reforms included access to existing state property
division regimes for de facto couples so that now same sex couples
have equal access to such laws in all states and territories.
The Family Court of Western Australia is the
only state Family Court created under the provisions of the
Commonwealth Family Law Act. As such the Court exercises both state
and federal jurisdiction in family law matters.
The Court has for some years been exercising
jurisdiction in cases involving property disputes between parties
to de facto marriage relationships including same sex
couples.[20] The
Family Court of Western Australia argues that as a result, parties
in de facto relationships have much the same rights and obligations
as parties to marriages following the breakdown of their
relationships.[21]
There is however one exception and that relates to the ability of
the Court to make superannuation splitting orders .
The Western Australian Attorney-General in his
submission to the Senate inquiry into this Bill[22] notes that it does not implement
the Western Australian Parliament s reference of powers contained
in the Commonwealth Powers (De facto Relationships) Act
2006 (WA). This Act refers powers over superannuation matters
relating to de facto partners arising out of the breakdown of de
facto relationships and relates to both same sex and opposite sex
relationships. The Attorney-General argues that by not implementing
the Western Australian reference of power, de facto partners in
that state will, in comparison to those in other Australian
jurisdictions in superannuation matters, be discriminated against.
If the Commonwealth Bill took up the WA reference of powerthis
discrimination would be avoided.[23]
There appears to be no federal Government
explanation of why the Bill does not implement the WA reference of
powers in relation to superannuation.
Several
submissions to the Senate inquiry into the Bill requested the Bill
be amended to recognise the unique status of registered
relationships. Further discussion of this issue is on page 16 of
the Digest.
Relationships registers have been created in
some states and territories to allow legislative recognition of
couples relationships. Tasmania s Relationship Act 2003,
the Australian Capital Territory s Civil Partnerships Act
2008 and Victoria s Relationship Act 2008 (to come
into effect later in 2008) each provide for the registration of
couple relationships including both same sex and opposite sex
relationships. The legislation also provides for the registration
of interdependent relationships.
The Commonwealth Attorney-General has stated
that the federal Government strongly supports and indeed thinks it
would be a good thing if states and territories would agree upon a
uniform system of registration of same sex relationships; indeed
close personal relationships, along the lines of the Tasmanian or
Victorian models.[24]
Note that the general discussion below
includes only debates about the broad principles of the Bill. The
relevant Main Provisions section of the Digest contains debate
about specific provisions such as the definition of de facto
relationship , the definition of child of the relationship the
status of relationships registers, and the geographical
jurisdictional requirements is found in the relevant
Several submissions to the Senate inquiry
supported the Bill on the basis that it promotes equity and
efficiency. Women s Legal Services Australia submits that the
Family Court is the appropriate institution to resolve all property
and spousal maintenance disputes, as opposed to state and territory
supreme courts. The Family Court has experience and expertise in
relationship matters and its processes and procedures provide the
most efficient pathway for resolution of disputes following
relationship breakdown. In particular the conciliation and
mediation procedures of the Family Court have traditionally been
effective in resolving the vast majority of such disputes at a
relatively early stage, avoiding the need for litigation.[25]
Professor Jenni Millbank from the Faculty of Law,
University of Technology, Sydney, states that the general approach
of the reforms directed towards gender neutral de facto
relationships is correct, sensible and equitable. Further the
discretionary approach to property adjustment means that
unmeritorious claims can be dealt with and the ability to enter
into binding financial agreements means that couples who do not
wish to be covered by the regime may exit it at any stage in their
relationship.[26]
The Bill is strongly supported by the Law
Council of Australia as being much needed and socially advantageous
legislation which is long overdue given the high and
ever-increasing percentage of Australians who live, regardless of
gender, in marriage-like relationships in preference to formal
marriage.[27] The
Australian Institute of Family Studies states that according to the
2006 Census, persons living in a cohabiting relationship accounted
for 15% of all persons living with a partner in 2006 compared with
10% in 1996.[28]
Since December 2002, the Family Court has the
power to divide superannuation contributions between the parties
(Part VIIIB of the Act).[29] Superannuation funds are a significant asset, indeed
often the largest asset a person owns. State courts do not have the
power to divide such funds. Providing de facto couples with access
to the Act s superannuation splitting regime will provide parties
with maximum flexibility in structuring their property settlements,
promoting the likelihood of settlements that are just and equitable
in all the circumstances .[30]
The Bill is said to be beneficial to children
s rights. Aspects of the Family Law Act s property distribution
scheme are specifically oriented towards protecting a child s right
to an adequate standard of living. In some state property regimes
for de facto couples the court may only take into account past
contribution, in contrast to the family law regime s twin focus on
past contribution and future needs. From a children s rights
perspective, it is essential that courts examine the future needs
of the parties to ensure primary caregivers have access to the
resources necessary to care for children on a long-term
basis.[31]
Human rights organisations and gay and lesbian
rights groups are in strong support of the Bill, particularly of
the definition of de facto that treats de facto couples, including
same sex couples, in a similar fashion to married couples for the
purposes of property division. The New South Wales Gay and Lesbian
Rights Lobby notes that this reflects current practice in state and
territory de facto regimes, which between 1994 and 2006 were
amended to include same sex couples or were introduced from the
outset with same sex couples included. Their submission argues that
the inclusion of same sex couples is therefore well established and
anything less would be a backward step.[32]
The Law Council also strongly supports equal
access to the law for same sex couples, their position being that
any step towards eliminating discrimination brings us closer to
meeting our international human rights obligations, makes us a
fairer, more just community and ought to be greeted with strong
approval .[33]
The Bill has also been criticised for raising
fundamental moral and social questions that have not been properly
considered.
A question asked is whether a Commonwealth
legislative regime should apply uniformly to de jure (i.e.
married), de facto and same sex relationships. It is suggested that
different legislative regimes should apply to these relationships
because they are different and those who choose to enter
de facto and same sex relationships do not wish their relationship
to be regulated in exactly the same way as de jure couples.
Patrick Parkinson, Professor of Law, University
of Sydney, and specialist in family law, states that the Bill
raises important issues which have a major impact on the lives of
Australian families and therefore should not be imposed upon the
Australian people without further research being done to ensure
that it is wanted by both same sex and opposite sex de facto
couples and by the general community.[34]
Professor Parkinson argues that the sociological
evidence available suggests that there are significant differences
between people who have chosen to marry and those who have not. The
evidence would suggest that de facto relationships are typically
rather more conditional and are less likely to involve sharing of
property.[35]
Parkinson says that what the Bill does is to take
the marriage paradigm, the idea that marriage is a lifelong
socioeconomic partnership, and applies it to people who have never
chosen that, who had had a free choice whether to choose it, and,
who would be shocked to know that they are being treated as if they
are married when they are not.[36]
There are big issues about property owned before
the relationship began. The Family Court treats marriage as a
socio-economic partnership and, the longer it lasts, the less
weight it gives to whoever brought the property into the
relationship. Professor Parkinson contends that this can be quite
at odds with the intentions of people in de facto relationships for
whom what I have is mine and what you have is yours . That is
perfectly sensible and egalitarian way to organise a relationship,
but is not how the Family Court sees marriage.[37]
While Professor Parkinson acknowledges that
binding financial agreements can give couples choice to contract
out of the property regime of the Act and to divide their property
in some other way, he believes this is a largely theoretical
solution. Such agreements are expensive and they are not an answer
to the dilemma about choice.[38]
A number of submissions to the Senate inquiry
criticised the Bill for undermining the institution of marriage by
treating marriages and de facto relationships as being entirely
equivalent.
They point to sociological evidence suggesting
that the Government should be promoting marriage because of its
much greater stability. FamilyVoice Australia (formerly Festival of
Light Australia) states that there are two key reasons for
distinguishing marriage from other relationships and granting it a
privileged status in comparison to other relationships. Firstly,
marriage provides the best environment for raising children.
Secondly, marriage regulates the relationships between men and
women in a way that benefits both men and women as well as
society.[39]
FamilyVoice Australia also argued that same
sex relationships particularly, were not equal to marriage because
they confer none of the benefits of marriage and family on
Australian society.[40]
FamilyVoice concludes there is no compelling
reason that the benefits of the Family Law Act should be extended
to de facto couples (either same sex or opposite sex
relationships).[41]
Marriage, as defined in the Marriage Act
1961 at section 5 means the union of a man and a woman to the
exclusion of all others, voluntarily entered into for life .
Many submissions put the view that the Bill does
undermine the institution of marriage because its provisions
recognise not only the person in a marriage relationship but that
the same person can also be in a separate de facto
relationship.[42]
They argue the definition of de facto
relationship in the Bill[43] would openly bestow on adulterous relationships a legal
status - of de facto relationship. Furthermore, it would give the
third party a claim on the property and possible maintenance from
the adulterous spouse which necessarily would impact on what is due
from that person to his or her spouse. FamilyVoice Australia
states:
This provision directly undermines the status
of marriage in Australia by giving legal status to relationships
entered into in direct contravention of the nature of marriage,
acknowledged by law to be the union of a man and a woman to the
exclusion of all others.
Traditionally, the law has held upheld the
rights of the wife over the claims of a mistress. This provision
would reduce marriage to just another relationship. A married man s
adulterous affairs with either women or men could be treated by a
court as equal in status to his marriage. A married woman s
adulterous affairs with either men or women could be treated by a
court as equal in status to her marriage.
This provision would allow supporters of
polygamy to engage in multiple simultaneous legally recognised
relationships as long as only one of these was a marriage.[44]
Financial implications
The Bill will confer additional jurisdiction
on federal courts. The Explanatory Memorandum states that in
anticipation of the increased workload, additional resources were
provided to the courts in the 2007-08 Budget.[45]
The figures from the 2007-08 Budget Paper No.
2 are set out below.[46] While they show additional resources for the Federal
Magistrates Court it is of note that the cost will be met from the
existing resources of the Family Court of Australia.
Mr Duggan, an officer
with the Commonwealth Attorney-General s Department at hearings of
the Senate inquiry confirmed that there will be four additional
magistrates made available to the Federal Magistrates Court and one
additional Family Court judge to deal with the additional
workload.[47]
It is of note that many provisions in this
Schedule relating to de facto financial matters essentially
replicate provisions in Part VIII of the Act regarding financial
matters for married couples. Where this is the case the Digest does
not provide detailed explanation but does refer to the equivalent
provisions.
Items 2 to 23 of Schedule 1
are definition provisions. They include new definitions (such as de
facto financial cause ) and also modifications to existing
definitions (such as financial matters ). Most of the definitions
are designed to encompass de facto relationships into the current
Family Law Act provisions.
Central to the Bill is the definition of de
facto relationship in proposed section 4AA (item
21). It provides that a person is in a de facto
relationship with another person if:
- they are not married to each other; and
- they are not related to each other by family; and
- having regard to all the circumstances of the relationship:
- they have a relationship as a couple living together on a
genuine domestic basis.
Importantly the new provision makes it clear
that a de facto relationship can exist:
- between two people of opposite‑sex and same sex, and
- between two people where one partner is legally married to
someone else or in another de facto relationship. (proposed
paragraphs 4AA(5)(a) and (b)).[48]
Under proposed subsection
4AA(2), the circumstances to be considered in determining
if two people have a relationship as a couple may include any or
all of the following:
- the duration of the relationship
- the nature and extent of their common residence
- whether a sexual relationship exists[49]
- the degree of financial dependence or interdependence, and any
arrangements for financial support, between them
- the ownership, use and acquisition of their property
- the degree of mutual commitment to a shared life
- whether the relationship is or was registered under a
prescribed law of a state or territory as a prescribed kind of
relationship
- the care and support of children, and
- the reputation and public aspects of the relationship.
No particular finding is required in relation
to any one of these circumstances in deciding whether the persons
have a de facto relationship (proposed
subsection 4AA(3)). The Court therefore
has a significant discretion.
These circumstances are set out in almost
identical terms to the definition in section 4 of the Property
(Relationships) Act 1984 (NSW) with the addition of a criteria
relating to whether the relationship is registered. The list is in
contrast to the non specific definition in the referral legislation
which defines a de facto relationship as a marriage-like
relationship (other than a legal marriage) between two persons.
[50]
The definition of de facto relationship has
been at the centre of debate about the Bill.
Relationships registers
Several submissions to the Senate inquiry
expressed concern about the status that the definition gives to
relationships registers. They submit that where a relationship is
or was registered as described in (g) that this should be
conclusive proof that that has been a relationship as a couple
living together on a genuine domestic basis as required by
paragraph 4AA(1)(c).
For example, Wayne Morgan, Senior Lecturer,
College of Law ANU, is of the opinion that registered relationships
should not be defined as a sub-category of de facto relationships.
If, however, the Government decides to pursue this route, at the
very least, proof of registration of a relationship under a state
or territory law must be conclusive proof of the existence of a de
facto relationship under Commonwealth law, without the need to
prove the usual criteria that must be proved before a (presumptive)
de facto relationship is taken to exist (such as cohabitation).
[51]
Judy Harrison, Senior Lecturer, College of
Law, ANU argues such an adjustment would promote certainty, reduce
dispute, save legal costs and court time. It is also more dignified
and less intrusive.[52]
Interdependent relationships
Another question is whether the definition
should include interdependent relationships. Senator George
Brandis, in discussions at hearings during the Senate inquiry,
suggested that the Bill is being inspired by a desire to remove
unjust discrimination against people in a certain category of
relationship that is same sex relationships. In order to be
socially just, discrimination against people in all close loving
domestic relationships, however defined, should be removed. Senator
Brandis posed the question that, leaving aside marriage, which is
acknowledged as having a special cultural and moral status, why
should the Bill privilege some permanent loving domestic
relationships and discriminate against others.[53]
Departmental response
At the Senate inquiry hearings, the
Attorney-General s Departmental officer, Mr Duggan noted that
because of the Commonwealth s lack of power in regard to de facto
relationships, the legislation rests entirely on references of
power from the states. Therefore it is necessary for the Bill to
mirror as far as possible the referral legislation. In the referral
legislation a de facto relationship means a marriage like
relationship between two persons.[54]
The undisclosed legal advice received by
Attorney-General s Department suggested that the definition in the
Bill is what is encompassed in the referring legislation and
therefore gives the strongest constitutional link.
Mr Duggan also pointed out that the breadth of
relationships that could be registered under state law means that
there may be relationships that would not otherwise be regarded as
a de facto relationship and arguably the Commonwealth power under
the referrals does not extend that far.[55]
In other words, Mr Duggan argued that the
Commonwealth does not have the power to make a registered
relationship determinative (as opposed to indicative) of there
being a de facto relationship. For example a relationship
registered for only a short time may not come within power because
generally speaking a definition of a de facto relationship would
usually relate to a relationship of some longevity.[56]
With regard to interdependent relationships,
the Commonwealth could also not include in the definition such
relationships because they are not marriage like relationships
.[57]
The Bill creates a new de facto financial
cause in subsection 4(1) of the Act (item 3). A de
facto financial cause includes:
- proceedings for distribution of property or financial resources
(including superannuation)
- proceedings for provision of maintenance between parties to a
de facto relationship, and
- proceedings involving third parties, binding financial
agreements, and related bankruptcy matters.
Due to the particular reference of power from
the states, the definition limits the proceedings in these matters
to proceedings taken once the relevant de facto relationship has
broken down.
Item 33 inserts in Part V of
the Act a new Division 2 dealing with jurisdiction
in de facto financial causes , containing proposed sections
39A to 39G. The new sections are the
equivalent of section 39 and 40 in respect of matrimonial
causes.Proposed section 39A provides that a de
facto financial cause may be instituted under the Act in certain
courts, namely the Family Court of Australia, the Federal
Magistrates Court of Australia, the Supreme Court of the Northern
Territory, and courts of summary jurisdiction in a participating
jurisdiction. Under provisions in item 36 an
application relating to de facto financial causes must be made to
the court within two years from the date the relationship ended. An
application can only be made after that date if the court grants
leave based on hardship or inability to self support.
Item 50 inserts
proposed Part VIIIAB into the Family Law Act. It
contains the central mechanism of the Bill to deal with financial
matters[58]
applicable to parties to a de facto relationship.
Part VIIIAB proceedings are defined as
proceedings for orders with respect to:
- the maintenance of a party to the de facto relationship
- property of the parties to a de facto relationship, or
- proceedings in relations to Part VIIIAB financial agreements
(item 11).
Participating jurisdictions is another
threshold concept and key term used often in the Bill.
Proposed section 90RA defines participating
jurisdictions as each referring state and the territories.
Proposed subsection 90RA(3) clarifies that a state
is not a referring state if it only refers to a limited class of
matters. This would appear to be a reference to Western Australia
that has provided a reference in relation to superannuation matters
only. The territories are participating jurisdictions as the Bill
will apply in the territories by virtue of section 122 of the
Constitution.
Proposed subsection 90RB
defines a child of a de facto relationship and makes specific
reference to existing subsection 60H(1) applying to same sex
relationships. Subsection 60H(1) deals with children born through
assisted reproductive technologies (ART) and provides for a
presumption of parentage.
Section 90RB has been welcomed by the Law
Society of New South Wales noting that it is in line with recent
amendments by the NSW Government to the Status of Children Act
1996 and the Births, Deaths and Marriage Registration Act
1995.[59]
However a number of submissions to the Senate
Inquiry, including Professor Jenni Millbank, raised concerns about
the limitations and discriminatory aspects of the definition.
Millbank says the effect of the Bill is to recognise the
parent-child relationship of children born through ART in
two-female parent families only for the purposes of property
division proceedings and not for the purpose of any child-related
provisions under the Act.[60] She argues:
It makes no sense to acknowledge the existence
of a parent-child relationship for the purpose of property division
but not for the purpose of child support or child maintenance,
parental responsibility or for decisions about time with
children.[61]
As Professor Millbank points out, in recent years
the approach of the states and territories (WA, NT, ACT, NSW, and
Victoria later in 2008) is that a female de facto partner of the
birth mother is also accorded parental status. These newer
presumptions are not reflected in the current subsection 60H(1)
which continues to use male-gender specific terminology. She argues
the current section has been demonstrated to be confusing,
inconsistent with state law, uncertain and discriminatory. She says
it is in clear need of amendment.[62]
At Senate inquiry hearings, the
Attorney-General s officer, Mr Duggan explained that in relation to
the question of parenting presumptions more generally, the
Commonwealth is currently considering a request by state and
territory ministers to consider amendment of subsection 60H(1) to
allow children of same sex relationships to be recognised as a
child of the relationship for the purpose of the section.[63]
Proposed section 90RC sets
out the relationship between the Bill and state and territory laws.
Where federal jurisdiction applies to de facto financial matters
under the provisions of the Bill, state and territory laws dealing
with the same subject matter are excluded.[64]
A major difference between a marriage and
a de facto relationship is
establishing when a de facto
relationship has commenced or ended.[65] In a
de facto relationship, identifying whether a relationship existed,
and when it has ended can be more difficult than in a marriage.
Proposed sections 90RD 90RH would assist, by
providing courts with the ability to make a declaration about a
range of characteristics of a de
facto relationship.
Proposed section 90RD enables
the court to make a declaration about the existence of a de facto
relationship for the purposes of primary proceedings involving
maintenance or property orders. The court declaration may also
declare any or all of the following matters:
- the period of the relationship
- whether there is a child of the relationship
- whether one of the parties to the relationship made a
substantial contribution
- when the relationship ended, and
- where each of the parties was ordinarily resident during the
relationship.
Any party[66] to a primary proceeding may apply for a
declaration and such a declaration has effect as a judgement of the
court (proposed sections 90RF and
90RE respectively). Upon application by an
affected person a court may vary or set aside a declaration if
there are new and relevant circumstances (proposed section
90RH).
Proposed section 90SB is a
threshold provision and another key provision in the Bill. Before a
court can make an order relating to maintenance, urgent
maintenance, alteration of property interest, or declaration of
interests in property, it must be satisfied that:
- the relationship lasted for a period totalling 2 years, or
- there is a child of the de facto relationship (defined in
section 90RB), or
- there have been substantial contributions by a party and
serious injustice would result to that party if the order or
declaration was not made, or
- the de facto relationship is or was registered under a
prescribed law of a State or territory.
This requirement does not arise in proceedings
in relation to maintenance or property of parties to a marriage
under Part VIII, but is derived from equivalent provisions
operating under state de facto legislation. For example it
essentially repeats the existing section 17 of the Property
(Relationships) Act 1984 in New South Wales but adds the
concept of registration of a relationship.
The Law Society of New South Wales supports
the use of the wording total period of the de facto relationship in
subsection 90SB(1) noting that it will avoid the problems that have
occurred in cases under the Property (Relationships) Act about
whether relationships with a break should be considered to be
separate de facto relationships or whether the aggregated periods
should count as a single relationship.[67]
Proposed section 90SC
provides that Division 2 will not apply if the de facto partners
marry. However prior orders, declarations or injunctions that were
made in this division previously may be enforced or varied. If they
are set aside, another can be substituted.
Proposed section 90SD deals
with the threshold question of geographical requirements in
relation to maintenance. Either or both parties must be ordinarily
resident in a participating jurisdiction when the application for
the maintenance order is made and in addition either:
- both parties must be ordinarily resident for at least a third
of the relationship in the jurisdiction, or
- the applicant must have made substantial contributions to the
relationship.
This residence or contribution requirement
must be in a state that is a participating jurisdiction when the
application was made, however it is not necessary that the state
was a participating jurisdiction during the de facto relationship.
This qualification allows for residence or contributions to be
accumulated in states that refer powers after commencement of the
Bill (for example possibly South Australia).
The Law Society of New South Wales notes that
this is similar to section 15 of the Property (Relationship) Act in
New South Wales. However the Society is concerned that the
reference to one third rather than a substantial
period may lead to situations where parties are excluded
unfairly from using the legislation because their relationship has
been conducted across several states. As it observes, people have
become increasingly mobile. By referring to a substantial period
rather than a set period the court would still have a
discretion.[68]
Proposed section 90SK sets
out the geographical requirements that must be established before
the court can make an order or declaration about property in
relation to the breakdown of a de facto relationship. It is the
same requirement as for orders for maintenance in proposed section
90SD.
The existing spousal maintenance provisions in
the Act are contained in Part VIII. These provisions concern: the
liability of one party to a marriage to maintain the other party;
the enforcement of this liability through a maintenance order; and
the variation of an existing maintenance order.
The provisions in the Bill relating to
maintenance for parties to a de facto relationship will largely
mirror the spousal maintenance provisions set out in Part VIII of
the Act.
Proposed section 90SE sets
out the power of the court in making maintenance orders. After the
breakdown of the relationship, a court may make an order for
maintenance for a party to a de facto relationship as it considers
proper . The court must join any bankruptcy trustee or trustee of
personal insolvency agreement as a party to proceedings if certain
conditions are satisfied. The section is the equivalent of section
77 that deals with the power of court in matrimonial maintenance
proceedings.
Proposed section 90SF details
the principles the court is to apply and the matters to considered
when making such maintenance orders. The general principle that the
court must apply is that a party to a de facto relationship must
maintain the other party:
- only to the extent he or she is able to do so and only if that
other party is unable to support himself or herself adequately by
reason of :
- having the care and control of a child of the relationship
under 18 years
- his or her age or physical or mental incapacity for appropriate
gainful employment, or
- for any other adequate reason.
In applying the principle the court must take
into account the matters set out in proposed subsection
90SF(3). Section 90SF essentially replicates the
equivalent provisions for the maintenance of a party to a marriage
(sections 72 and 75). However, note the additional
paragraphs 90SF(3)(o), (p) and
(s) which require the court to take into account
the terms of any order or declaration made in related proceedings
either between parties to another de facto relationship or parties
to a marriage. Items 42 43, make corresponding
amendments to subsection 75(2).
Proposed section 90SG
provides that urgent maintenance orders may be made, pending the
completion of the substantive maintenance proceedings (equivalent
of section 77 that deals with urgent spousal maintenance
orders).
Proposed section 90SI sets
out the matters a court must consider when making an order to
modify existing maintenance orders (equivalent of section 83). Of
note is proposed subparagraph 90SI(3)(a)(i) which
allows for modification of a de facto maintenance order if the
court is satisfied that the payee s circumstances have changed,
including where the person has entered into a stable and continuing
de facto relationship. The Bill also makes an equivalent amendment
in relation to maintenance orders for parties to a marriage
(item 48, proposed subparagraph 83(2)(a)(i)).
Proposed section 90SJ
provides that a maintenance order ceases to have effect upon:
- the death of the party
- the death of the person liable to make payments under the
order
- the marriage of the party, unless in special circumstances a
court otherwise orders.
The New South Wales Law Society recommends
that entering a new de facto relationship should be included as a
terminating event for spousal maintenance (unless a court otherwise
orders in special circumstances) in the same way that remarriage is
a terminating event for married couples under subsection
82(4).[69]
Proposed section 90SL allows
the court to declare the title or rights to property of the parties
in a de facto relationship in relation to the breakdown of that
relationship. Proposed section 90SM allows the
court to make such orders as it sees fit altering the property
interests of the parties. The provisions equate to existing
sections 78 and 79 respectively.
There are some additional provisions which
deal with concurrent proceedings. Proposed subsection
90SM(10)) provides that other parties are entitled to
become a party to the proceedings. Other parties include:
- parties connected to the de facto relationship by reason of
being in a marriage or another de facto relationship with one of
the parties
- a party to a relevant binding financial agreement, and
- any other person whose interests may be affected by the making
of an order.
Proposed subsections 90SM(12) and
(13) provides that a third party may apply in these
circumstances for property orders or declarations.
Note there are corresponding amendments to
section 79 in items 45 and 46
which expand the parties to proceedings under that section.
The Law Society of New South Wales notes that
the drafting of these sections does not attempt to establish any
criteria by which the Court determines the priority between a de
facto property settlement claim and a marriage claim, whether based
on the nature of the relationship, the length of the relationship
or marriage, or the date of separation in either case. The Law
Society observes that it is implicit in the drafting of these
provisions that the legislature intends to leave it to the Courts
to develop precedents and principles to guide the determination of
just and equitable outcomes in such disputes.[70]
Proposed section 90SN allows
for a person affected by a section 90SM order to apply for a
variation or setting aside of that order. The grounds are the ones
that apply under section 79A to set aside an order under section 79
of the Act with respect to the property to a marriage.
Under proposed section 90SM
mentioned above, third parties (including creditors) and bankruptcy
trustees are entitled to become parties to proceedings regarding de
facto property matters. Proposed sections 90SO to
90SR deal with the procedural matters of giving
notice that the Rules of Court may provide for in relation to third
parties and bankruptcy trustees. They are the equivalent of
sections 79G and 79H for matrimonial property matters.
Proposed section 90SS sets
out the powers of the court when making maintenance and property
orders in relation to Division 2 matters. It corresponds to section
80 that deals with the powers of the court under Part VIII in
relation to matrimonial matters. In addition, proposed
subsections 90SS(5) to (11) provide
supplementary injunctive powers to a court exercising jurisdiction
in other proceedings (for example in relation to bankruptcy or
insolvency proceedings) for an order in circumstances arising out
of the relationship. These injunctive powers replicate parts of
section 114.
Proposed section 90TA deals
with the court powers to make orders and injunctions binding third
parties. The drafting is unusual and complex. It provides for Part
VIIIAA provisions[71] with appropriate modifications to also apply to orders
and injunctionsunder Division 2 of Part VIIIAB relating to the
maintenance or property of parties to a de facto relationship. The
modifications are set out in proposed subsections
90TA(2) and (3). They provide, for
example, that references in Part VIIIAA to marriage be replaced
with references to de facto relationship and references to section
79 be replaced with references to section 90SM . They do not alter
the central effects of the sections.
Since 2000, Part VIIIA of the Act has enabled
parties to a marriage to enter into a binding financial agreement
concerning their property, financial resources and
maintenance.[72]
The effect of such an agreement is to enable parties to opt out of
the financial provisions of the Act.
Division 4 of the Bill deals with financial
agreements and de facto relationships referred to as Part VIIIAB
financial agreements . Notably the Bill has incorporated and where
applicable replicated the Act s financial agreement provisions that
affect parties to a marriage. However a notable difference between
the existing provisions and the proposed provisions is that a Part
VIIIAB financial agreement can only deal with matters in the event
of the breakdown of the relationship. The Explanatory Memorandum
notes that this restriction is due to the specific terms of
referred state powers.[73]
Proposed section 90UA
contains a geographical requirement for Part VIIIAB financial
agreements. The spouse parties[74] can only enter into a Part VIIIAB financial
agreement if they are ordinarily resident in a participating
jurisdiction when they make the agreement.
The Law Council of Australia states that it
is unclear whether the provision as drafted require that both
parties reside in the same participating jurisdiction; or whether
they can be in separate jurisdictions; or if it is necessary for
only one party to be in a participating jurisdiction.
While recognising the need for a
geographical connection under the referring legislation, the Law
Council argues the provision seems unduly restrictive and
confusing. It is not uncommon for parties to reside in different
locations before they enter their relationship and some may not
even live in the same country when an agreement is made. Similarly,
many parties also relocate soon after separation and before
settling financial arrangements.[75]
Judy Harrison recommends that the ambiguity
in this section could be resolved by the following wording that the
spouse parties:
are ordinarily resident in a participating
jurisdiction, being the same or a different participating
jurisdiction, when they make the agreement.[76]
Proposed section 90SA
provides that if there is a binding financial agreement under Part
VIIIAB that binds the parties then maintenance and property
provisions in Division 2 will not apply. However, the exclusion
does not apply to proceedings between a de facto partner and a
bankruptcy trustee (proposed subsection
90SA(2)).
Part VIIAB financial agreements are
essentially agreements made:
- before a de facto relationship according to
proposedsection 90UB
- during a de facto relationship
according to proposedsection 90UC
- after break up of a de facto
relationship according to proposedsections 90UD),
or
- agreements covered by section 90UE
(item 10, subsection 4(1)).
Before a de facto relationship
commences, parties may make a Part VIIIAB financial
agreement if that agreement is expressed in writing as an agreement
made under section 90UB and relates to any of the following matters
mentioned in proposed subsection 90UB(2):
- how the property or financial resources owned by the spouse
parties at the time of the agreement or acquired at a later time
are to be distributed in the event of a break down of the
relationship
- matters relating to the maintenance of the spouse parties
- ancillary or incidental matters (proposed subsection
90UB(3))
Financial agreements made according to
proposed subsection 90UB(1) may vary or terminate
previous financial agreements (proposed subsection
9UB(4)).
Proposed sections 90UCand
90UD provide for the making of written financial
agreements during a de facto relationship and
after breakdown of the relationship. They are drafted in
similar terms and about similar matters as proposed section 90UB
above.
Proposed section 90UE is a
transitional provision. It provides rules for recognition of
financial agreements made under non-referring state legislation as
Part VIIIAB agreements in the event that the state refers power
after commencement of the new Act.
Proposed subsection 90UF
provides that in the event of a breakdown of a de facto
relationship, a separation declaration is required for the
provisions relating to property or financial resources of a binding
financial agreement to come into effect. This is the equivalent to
a section 90DA separation declaration for financial agreements
affecting parties to a marriage. It is an anti-avoidance measure
aimed to protect the rights of creditors.[77]
Proposed section 90UI
provides thatif a provision in a financial agreement about
maintenance would have the effect of making a person reliant on
social security payments rather than on maintenance payments, the
court will retain its jurisdiction under the Act to make a
maintenance order. This is to ensure that people can not agree away
their obligations to maintain the other party, with the effect of
increasing the burden on the social security system and is similar
to the marriage maintenance provisions.
Proposed section 90UJ sets
out the requirements for legally binding financial agreements. The
agreement must:
- be signed by both parties
- not be terminated nor set aside by a court, and
- contain an annexure with certificates indicating that each
party has received independent legal advice as to the effect and to
the advantages/disadvantages of the agreement.
After signing a financial agreement, the
original must be given to one party and a copy of the agreement to
the other party (proposed paragraph 90UJ(1)(e)).
There is no requirement that the agreement be registered with the
court.
A Part VIIIAB financial agreement ceases to be
binding if, after making the agreement, the parties marry each
other (proposed subsection 90UJ(3)).
Proposed section 90UK
provides that upon death of a party to the agreement, the agreement
will be binding on the legal personal representative of the
deceased party.
Proposed section 90UL enables
parties to vary or revoke a financial agreement by either including
a provision to that effect in another agreement according to
proposed subsections 90UB(4), 90UC(4) or 90UD(4)
or by making a written termination agreement. To be legally binding
a termination agreement must fulfil similar requirements to those
set out in proposed section 90UJ. The provision
has a similar effect to section 90H of Part VIIIA.
Proposed section 90UM sets
out the circumstances in which a Part VIIIAB financial agreement
may be set aside by a court. The circumstances include where:
- the agreement was obtained by fraud
- a party entered into the agreement with the purpose of
defrauding creditors, or with reckless disregard of the interests
of creditors
- the agreement is void, voidable or unenforceable, or
- it is impracticable for the agreement, or part of it, to be
carried out in the circumstances that have arisen since the
agreement was entered into.
The court may also set aside an agreement in
circumstances that have arisen since the agreement was entered into
that are of an exceptional nature relating to the care, welfare and
development of a child and in which the child or a party to the
agreement would suffer hardship.
As the Explanatory Memorandum notes, the
grounds are identical to the ones relating to setting aside a
financial agreement between parties to a marriage (existing section
90K).
Proposed section 90UN
provides that the principles of law and equity apply in determining
whether a Part VIIIAB financial agreement is valid, enforceable or
effective. It is the equivalent of section 90KA. It may provide a
broader basis for making decisions.
Proposed section 90VA to
VD deal with proceeds of crime and forfeiture
issues that might arise out of Part VIIIAB financial agreements.
Proposed section 90WA provides exemption from duty
for instruments executed under certain provisions in Part VIIIAB.
They replicate equivalent provisions of Part VIII[78] with appropriate
modifications.
Items 51 to
78 make amendments that provide for the extension
of the application of Part VIIIAB to superannuation interests held
by a party to a de facto relationship.
Superannuation is to be treated as property
for the purposes of de facto financial causes (items 3,
52 and 53). Under proposed
subsection 90MC(2) proceedings dealing with a
superannuation interest of a party to a de facto relationship will
be able to be instituted in the Family Court of Australia, the
Federal Magistrates Court, the Supreme Court of the Northern
Territory and courts of summary jurisdiction in participating
jurisdictions. Proposed section 90MHA provides
that a Part VIIIAB financial agreement may include an agreement
that deals with superannuation interests of the parties as if those
interests were property. The part of the agreement that deals with
superannuation interests is to be referred to as a superannuation
agreement . It replicates section 90MH in similar terms in relation
to superannuation agreements between parties to a marriage.
The transitional provisions are complex and
difficult to understand without reference to the examples given
under the provisions.
Item 86 provides that the new
Act will not apply to de facto relationships which broke down
before commencement.
Judy Harrison argues that that this barrier is
harsh given that the referring states, the territories and the
Commonwealth agree that the family law system will be far more
accessible and suitable for de facto relationship financial matters
compared to the existing state and territory options. She
recommends that the provisions be adjusted so that de facto couples
may opt in to the new Act by mutual agreement when:
- whose relationship broke down before commencement, and
- whose maintenance or property matters have not been finalised
by the making of a final order or agreement before
commencement.[79]
Items 87 and 88
make rules for pre-commencement financial agreements. These are
financial agreements made before commencement of the new Act under
laws of a state or territory that is a participating
jurisdiction at commencement. They provide that federal law will
apply to these agreements as if they were Part VIIIAB financial
agreements.
Division 4 (items 89 to
92) deals with pre-transition time financial
agreements. These are financial agreements made before commencement
of the new Act under laws of a state that is not a
participating jurisdiction at commencement but becomes a
participating jurisdiction at a later date.[80] These agreements will continue to be
governed by state law unless they are transformed into Part VIIIAB
financial agreements according to proposed section 90UE.[81]
The Law Society of New South Wales in its
submission expressed concern that the aim of the transitional
provisions appears to be to treat financial agreements made under
state laws of participating jurisdictions before the introduction
of this Bill as agreements made under the Bill. It claims that this
does not recognise the fact that different provisions applied to
these agreements and that there are different grounds for setting
aside these agreements. The Law Society recommends that if these
agreements are to be treated as Part VIIIAB agreements and
therefore enforceable as such, then there should be a specific
provision to ensure that a party will not be able to set aside the
agreement simply because the legislation has changed.[82]
Schedule 2 contains consequential amendments
to other related legislation that flow from the extensions of the
Act to de facto financial matters.
In relation to bankruptcy, items
4-18 amend the Bankruptcy Act 1966 to ensure that
the provisions dealing with both family law and bankruptcy matters
are taken to include de facto financial matters as well as
matrimonial financial proceedings. For example, items 5,
6 and 7 insert proposed
subsection 35(1A) in the Bankruptcy Act. The provision
confers concurrent bankruptcy and family law jurisdiction on the
Family Court of Australia in any matter arising out of the
bankruptcy of a bankrupt party to a de facto relationship. It
mirrors existing subsection 35(1) that provides similar
jurisdiction in cases where a party to a marriage is bankrupt.
Schedule 3 of the Bill proposes amendments to
the Act relating to the provisions concerning financial agreements
between married couples, separation declarations and superannuation
splitting.
The Bill is undoubtedly a significant piece of
legislation with quite profound implications for couples, both
opposite sex and same sex, living in de facto relationships.
At a technical level, the Bill is complex in
its drafting style and both the Law Council of Australia and the
New South Wales Law Society have called for a re-write of the
complete Family Law Act to make it more comprehensible and user
friendly.
The Bill appears to have bipartisan support
within Parliament and yet it has also been the subject of quite
divided debate within the wider community. Human rights
organisations, gay and lesbian lobby groups and representative
bodies of the legal profession support it for applying family law
in a consistent and uniform way to de facto relationships across
the country and for eliminating discrimination.[83] Groups identifying as being pro-
heterosexual family have criticised it and see it as undermining
the institution of marriage and the traditional family.[84]
The definition of de facto relationship ,
which is central to the Bill, raises a number of questions. One of
these is the status accorded prescribed state and territory
registered relationships. The Bill, due to apparent limitations
imposed by the wording of the state referral legislation, treats
these registered relationships as indicative, but not determinative
of, the existence of a de facto relationship.
As former Family Court Chief Justice Alistair
Nicholson has argued, such an approach
[ ] is inappropriate as a matter of policy as
those couples who have formalised their relationships have
positively chosen not to simply be regarded as de facto partners
under [ ] law.[85]
Given also the Attorney-General s recent
encouragement of state registration schemes, there would appear to
be good reason for reopening SCAG discussions on this
matter.[86] A
broadening of the state referral legislation so that all state and
territory registered couple relationships, including interdependent
relationships, might have automatic access to the financial
settlement regime under the Family Law Act may lead to a more
equitable outcome.
Finally, the changes to be introduced by this
Bill raise issues of resources for the Family Court. Allowing
opposite sex and same sex de facto couples to access the Family
Court for property and maintenance matters will substantially
increase demand on the federal family law system. While new
Magistrates are to be appointed, it might be asked whether the
Government has allocated other appropriate resources to address the
increase, to ensure that parties and practitioners do not face a
blow out in local registry waiting times for appointments with
family court consultants, court dates and judicial decisions. The
new Act is also likely to increase demand on community-based family
dispute resolution services (FDR). As the Women s Legal Service
Australia notes, Family Relationship Centres and other FDR
providers must be adequately resourced to ensure that all parties
can access dispute resolution and obtain the requisite FDR
certificates in a timely way.[87]
The financial information in the Explanatory
Memorandum warrants further consideration.
[1]. Section 51(xxxvii) also
enables a state or states to adopt a Commonwealth law enacted as a
result of a referral of power.
[7]. The Hon Daryl Williams,
Attorney-General, Commonwealth wins de facto property
power, media release, 8 November 2002.
[8]. The Hon Robert McClelland,
Attorney-General, Financial burden lifted from separating de
facto couples, media release, 25 June 2008.
[11]. (Mr Kym Duggan,
Assistant Secretary, Family Law Branch, Attorney-General s
Department, Senate Standing Committee on Legal and Constitutional
Affairs, Committee Hansard, 7 August 2008, [Proof copy].
Subsequently referred to as SLCA Hansard.
[18]. Relationships Act 2008
(Vic).
[36]. Patrick Parkinson,
Senate Standing Committee on Legal and Constitutional Affairs,
Committee Hansard, 5 August 2008, [Proof copy].
[47]. Kym Duggan, op.
cit.
[50]. The state referral legislation is described above at
p. 6. The reader is referred to the Senate inquiry hearings for
further discussion on why the Bill includes this list of indicia as
opposed to the non specific definition in the referral
legislation.
[51]. Wayne Morgan, Submission No. J59, SLCA inquiry. Note
also Submission No. 37, from Miranda Stewart, Associate Professor,
Melbourne University Law School.
Mary Anne Neilsen
25 August
2008
Bills Digest Service
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