Are You in a De Facto Relationship?

It is common knowledge that when a married couple in New Zealand get divorced, they, generally speaking, get half each of all the property owned by the parties.  In New Zealand this asset division also extends to de facto relationships of more than three years, but what is a de facto relationship?  A marriage is easy to identify:  there is a wedding, someone cuts the cake, there is usually an adorable child in charge of the rings and most importantly, a legal document; a marriage certificate which says you are married.  However, de facto relationships are not so easy to identify.

The Property (Relationships) Act 1976  ("PRA") defines a de facto relationship as a relationship between two persons who live together as a couple.  In determining whether or not they live together as a couple, the Court takes all the circumstances of the relationship into account.  Some factors listed in the PRA are:  the duration of the relationship, the nature and extent of common residence, whether or not a sexual relationship exists, the degree of mutual commitment to a shared life, care and support of children and degree of interdependence of finances.

The most common de facto relationships are when a couple move in together, pay bills together, pay rent together, buy property together and appear in public as a couple.  However, various factors can be taken under consideration and no one particular factor (or lack thereof) will guarantee a relationship as a de facto relationship.  Under the Act and various cases, a couple do not necessarily have to share the same house to be regarded as being in a de facto relationship.  A de facto relationship has been found in one case even though the parties lived in different countries for much of the relationship.

A recent case however, shows a slightly different extreme.  In Watene v Lord [2017] NZHC 388, the parties in the case had two children together but they were born prior to the parties living together.  While the parties shared a home from 1997 to 2012, the Court held that they lived separately at the same address.  Each party had their own bedroom and they kept their finances relatively separate.  It appears the Court saw the relationship between the parties as more of a flatmate situation.

Due to the combination of factors and flexible approach by the Courts, it can often be hard to know whether a de facto relationship exists and if it does, when did it start.  Unlike a marriage or civil union there is no legal certificate to mark the occasion.  While you may believe you are not in one, a Court may have a different opinion and you and your partner could be subject to a property split under the PRA.  In situations like this it can be a good idea to look at what is colloquially known as a "pre-nup", which can apply to de facto relationships too.

If you have any questions or concerns about whether or not you may be in a de facto relationship and subject to the property division provisions of the Property (Relationships) Act should it end, it is a good idea to get some legal advice.

Please contact Peter Fuscic on (09) 306 6746 (pfuscic@mcveaghfleming.co.nz) from our Auckland City Office.

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