Relationships

Modern Love - The Ballad of Ted and Mary

The Property (Relationships) Amendment Act 2001 introduced a number of radical reforms to family property law, one of which was the highly publicised extension of former matrimonial property legislation to encompass heterosexual and same sex de facto couples. The significant increase in the number of de facto couples in the last 20 years has no doubt been the driving force for the amendment. Census statistics of 2001 illustrate the considerable number of New Zealanders (approximately 336,000) who identify themselves as having a partner, but not being legally married. Now, under the Property (Relationships) Act 1976, de facto couples are subject to virtually the same property sharing regime as married couples.

"Yeah, everyone knows that" remarked Ted. "From the second you officially move in with your partner you become half of a de facto couple and the clock starts ticking".

Mary, Ted's girlfriend of about 5 years, lived in a comfortable two bedroom rented home with her son, Ben. More often than not, Ted would spend his evenings at Mary's home and sleep over. Ted had grown close to Ben over the years and enjoyed hanging out with him doing 'guy stuff' such as building model airplanes. Ted also rented a flat – he liked to call it his 'bachelor pad'. He basically used it as a storage place for his big furniture and sporting stuff. He hardly slept there anymore but liked to have the option of being able to escape to it if he and Mary needed some time out.

Ted had to admit that he had it "pretty sweet". He would stay at Mary's home about five nights per week, including Saturday and Sunday. Mary cooked him dinner, did his washing and on occasion, helped him out with his business. Ted sporadically contributed to the household expenses but usually only if Mary nagged him about it. Mary and Ted did not operate joint bank accounts. This living arrangement suited Ted down to the ground. He paid the rent on his flat but ran his business for the most part from Mary's home. As a result, he had managed to save a big chunk of his income over the years and now had a nice little nest egg in his personal bank account.

Earlier this year Mary asked Ted to take the 'de facto plunge' and suggested that they move into a common residence. Ted was a little nervous about 'officially' living with Mary but reassured himself that, more likely than not, he would have three years before his relationship would fall within the equal sharing provisions of the Property (Relationships) Act 1976.

Unfortunately for Ted, the law is not that simple. A 'de facto relationship' is defined as:

"a relationship between 2 persons:
(a) who are both aged 18 years or older; and
(b) who live together as a couple; and
(c) who are not married to one another."

Of the three factors, determining whether two people "live together as a couple" is the most complex issue. Guidance as to its elements is provided by the Act - the list of factors is an inclusive one and "all the circumstances of the relationship are to be taken into account". One of the factors is the "nature and extent of common residence". Literature suggests that this factor explores both the quality and quantity of the shared lives of the parties – with 'extent' referring to how much time the couple spent living together and 'nature' referring to the type of shared living arrangements.

Unbeknownst to Ted, it may be possible for Mary to claim that a de facto relationship was sustained several years earlier, even though separate residences were maintained. Furthermore, a finding that there is no common residence may not necessarily be fatal to her potential claim for equal sharing of relationship property assets under the Act.

While it will be obvious in some cases whether or not a de facto relationship exists, in other situations the existence or otherwise of a de facto relationship will be open to question. It is our view that parties may be found to be in a de facto relationship, not only on the date on which they physically commence living together, but prior to this when they 'intend' to be partners on a permanent basis and present themselves to the world as a couple. Thus, the emphasis is on the intent of the parties to remain as partners, rather than an emphasis on the duration that they physically live together. It will be interesting to follow the developments of case law on this issue.

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Last updated: June 2004

This article is intended to be brief in nature and should be used for information only. It should not be relied on as legal advice.