De Facto in WA: Your Legal Rights & Obligations

Living together without being married has become increasingly common among couples in Western Australia. While this arrangement, known as a de facto relationship offers flexibility and freedom, it’s crucial to understand the legal rights and obligations that come with it.

The evolving legal and societal attitudes towards cohabitation reflect a broader acceptance of living together as an alternative to traditional legal marriage, acknowledging the changing trends and the diverse interpretations of cohabitation.

In this blog post, we’ll explore the legal framework surrounding de facto relationships in WA and provide guidance on protecting your interests. Financial agreements are a means for couples to outline and protect their legal rights and obligations, ensuring clarity, security and peace of mind in their relationship.

The Growing Trend of Cohabitation

Cohabitation has become a popular choice for many couples in Western Australia and across the country, with 2,168,351 identifying as in a de facto relationship as of the 2021 census.

According to the Australian Institute of Family Studies, the number of cohabiting couples in Australia has been steadily increasing over the past few decades. In 2016, there were approximately 1.8 million cohabiting couples in Australia, representing nearly 16% of all couples.

This figure has risen from just 6% in 1986, highlighting the significant shift in attitudes and living arrangements. Young adults have played a crucial role in this rising trend, influenced by factors such as economic changes, the availability of contraceptives, evolving sexual attitudes and the impact of higher education.

Several societal factors have also contributed to the growing trend of cohabitation:

Changing attitudes towards marriage

Many couples now view cohabitation as a viable alternative to marriage, offering similar benefits without the formal commitment or legal obligations.

Financial considerations

Cohabitation can be a more affordable option for couples, allowing them to share living expenses and build financial stability before considering marriage.

Desire for flexibility

Some couples may choose cohabitation as a way to test their compatibility before making a long-term commitment, or to maintain a sense of independence within their relationship.

Increased acceptance

As cohabitation has become more common, societal attitudes towards relationships have shifted, with less stigma attached to living together outside of marriage.

Defining De Facto Relationship & Cohabitation in Western Australia

In Western Australia, a de facto relationship is defined under section 13A of the Interpretation Act 1984 (WA).

A couple is considered to be in a de facto relationship if they live together in a marriage-like relationship and are not legally married to each other.

The Family Court of WA considers several factors when determining the existence of a de facto relationship, such as:

Duration of the relationship
Nature and extent of common residence
Degree of financial dependence or interdependence
Ownership, use and acquisition of property
Degree of mutual commitment to a shared life
Care and support of children
Reputation and public aspects of the relationship

De facto relationships are recognised by law when two people live together on a genuine domestic basis, offering them certain rights under Australian family law, similar to those of married couples.

Legal Rights of Cohabiting Couples

Cohabiting couples in WA have many of the same legal rights as married couples when it comes to property division and maintenance. The Family Court Act 1997 (WA) governs the division of property and financial resources for Western Australian de facto couples upon separation.

To apply to the Family Court of WA in relation to de facto property matters, the parties must prove a connection to Western Australia. One or both parties to the application must reside in Western Australia on the day the application is made.

They must further prove both de facto partners lived in Western Australia for at least one third of their de facto relationship or that the applicant made substantial contributions in the State.

For the rest of Australia, the division of property for de facto couples is governed by the Family Law Act 1975. These laws have similar provisions including the factors taken into account for a property settlement such as the financial and non-financial contributions made by each partner, as well as their future needs and capacity for self-support.

While cohabiting couples have access to many of the same legal rights as married couples, there are some key differences in their legal obligations and entitlements:

Family law property rights

Upon separation, the court treats the property of cohabiting couples in a similar manner to married couples. However, the process for dividing property may be more complex for cohabiting couples, as they need to prove the existence of a de facto relationship before the court can make orders.

Advantages vs Disadvantages of Cohabitation

Ultimately, the decision to marry or cohabit depends on each couple’s unique circumstances, values and goals. It’s essential for cohabiting couples to understand their legal rights and take proactive steps to protect their interests, such as entering into a binding financial agreement and creating a comprehensive estate plan.

Securing Your Future: Binding Financial Agreements

One way to protect your interests in a de facto relationship is by entering into a Binding Financial Agreement (BFA). Provided all legal requirements are complied with, a BFA is a legally binding contract between cohabiting partners that outlines how property and financial resources will be divided if the relationship breaks down.

The benefits of having a BFA in place include:

Providing certainty and clarity about financial arrangements such as the division of the property of the relationship and maintenance of the parties. .
Protecting individual assets and interests, offering security and asset protection to both parties.
Reducing the potential for disputes in the event of separation.

Essential Elements of a Valid Binding Financial Agreement

For a BFA to be legally enforceable, it must meet certain requirements:

The agreement must be in writing and signed by both parties.
The parties must provide full and frank disclosure on matters relevant to the agreement including their assets and liabilities.
Each party must receive independent legal advice before signing the agreement on whether the BFA is to their advantage or disadvantage.
The agreement must not be void, voidable, or unenforceable under the general law of contract.

It’s a legal requirement to seek independent legal advice from experienced family law professionals when drafting or reviewing a BFA to ensure that it is fair, comprehensive and legally sound.

Challenges & Considerations

While BFAs can offer significant protection, it’s important to be aware of potential challenges and limitations.

In certain circumstances, a court may set aside a BFA if it is found to be unjust or unenforceable. This can happen if there has been fraud, duress or unconscionable conduct, or if circumstances have changed significantly since the agreement was made.

When assessing the validity of a BFA, the court considers several factors:

Fraud

If one party has deliberately misrepresented or concealed information that would have materially affected the other party’s decision to enter into the agreement, the court may set aside the BFA. For example, if one partner hides significant assets or debts during the negotiation process, this could be considered fraud.

Duress

If one party has been pressured or coerced into signing the agreement against their will, the court may find the BFA to be invalid. This could include situations where one partner threatens to end the relationship or withhold financial support if the other does not sign.

Unconscionable conduct

If the agreement is grossly unfair or one party has taken advantage of the other’s vulnerability or lack of knowledge, the court may set aside the BFA. For instance, if one partner has a significantly lower level of financial literacy and has not received adequate legal advice, the court may find the agreement to be unconscionable.

Changed circumstances

If the circumstances of the couple have changed so significantly since the agreement was made that it would be unjust to enforce it, the court may set aside the BFA. This could include situations where one partner develops a serious illness or disability, or where the couple has children and the agreement does not adequately provide for their needs.

Example of an Invalid Binding Financial Agreements

The Family Court of Western Australia heard a wife’s application to set aside a post-separation financial agreement under section 90C of the Family Court Act.

The agreement, signed in December 2014, divided the asset pool 95% to the husband and 5% to the wife. However, the husband had deliberately not disclosed to the wife that he had signed a contract in October 2014 to sell the family farm property for $2.6 million, significantly more than the $2.217 million value stated in the agreement. The husband also failed to disclose his purchase of a new farm property and that the value of the farming business was substantially understated in the agreement.

The court found that the wife was in a position of special disadvantage at the time she signed the agreement and in the period since separation. The husband had exploited the wife’s psychological vulnerabilities, controlled her access to the children, pressured her to obtain legal advice and sign the agreement and dictated the terms of the $50,000 property settlement without her input.

The wife felt powerless and believed she had no choice but to sign the agreement.

The presiding judge was satisfied that the husband had engaged in unconscionable conduct in the making of the financial agreement. The court rejected the husband’s arguments that the wife’s application was statute-barred or that the doctrine of laches applied.

Consequently, the court ordered that the financial agreement be set aside.

scales, property settlement judgement, illustration

Navigating Property Division for Cohabiting Couples

If a cohabiting couple separates without a BFA in place, in Western Australia the division of property will be determined by the court based on the principles of the Family Court Act 1997 (WA). The court will consider a range of factors in future separation, including:

The financial and non-financial contributions made by each partner to the acquisition, conservation, or improvement of property.
The contributions made by each partner to the welfare of the family, including as a homemaker or parent.
The effect of any proposed order on the earning capacity of either partner.
Any other relevant factors, such as the duration of the relationship and the needs of any children.

The court must make orders that are just and equitable, taking into account the unique circumstances of each case.

Documenting Contributions

Throughout the course of a cohabiting relationship, it’s important for both partners to keep records of their financial and non-financial contributions. This documentation can serve as valuable evidence in the event of a separation, supporting each partner’s claim to a fair share of the property.

Examples of financial contributions include:

Income from employment or investments.
Payment of mortgage, rent, or household expenses.
Purchase of significant assets, such as a home or car.

Non-financial contributions may include:

Homemaking and household management.
Caring for children or other family members.
Renovations or improvements to the family home.
Supporting the other partner’s career or education.

Couples should keep relevant documents, such as bank statements, receipts and invoices, to demonstrate their contributions. It may also be helpful to maintain a shared record or spreadsheet detailing each partner’s contributions over time.

Time Limits for Property Settlement Claims

There are time limits for making a property settlement claim after the breakdown of a de facto relationship. Under the Family Court Act 1997 (WA), a person must apply for property orders within two years from the date of separation.

If more than two years have passed since the separation, a person may still apply for property settlement orders, but they must first seek permission from the court.

The court will consider factors such as:

The hardship that would be caused to the applicant or a child if leave were not granted.
The extent to which the applicant would be unable to support themselves without an order for property settlement.
Any other relevant matters.

Given these time limits, it’s crucial for cohabiting couples to seek legal advice promptly after separation to ensure they apply for property orders within the prescribed period. Delaying action may result in a loss of entitlements or a more complex and costly legal process.

Taking the First Steps: Seeking Independent Legal Advice

If you are in a cohabiting relationship or considering entering into one, it’s crucial to seek legal advice from experienced family law professionals. They can help you understand your legal rights and obligations, prepare or review a BFA and provide guidance on estate planning and other important matters.

At Perth Divorce Lawyers, our knowledgeable team is here to help you navigate the complexities of de facto law in Western Australia. We can assist you with property settlement, care and living arrangements for children of the relationship, maintenance and financial agreements.