Property (Relationships) Act 1976, s 13

The court can order an uneven division of relationship property where there are extraordinary circumstances that make equal sharing very unfair, or “repugnant to justice”. This means that equal division would be totally unfair to one of the partners. In this case, each person’s share is decided according to their contributions to the relationship (including non-financial contributions). The circumstances need to be exceptional to meet this test.

Property (Relationships) Act 1976, ss 15, 15A

An uneven property division may be ordered when the income and living standards of one partner are likely to be significantly higher than the other partner at the end of the relationship.

This is called economic “disparity”.

The disparity has to exist because of the way you organised your lives and income while together. This is called the “division of functions”. For example:

• one partner stayed at home and looks after the children while the other worked, or
• one partner supported the other while they were studying and gaining a qualification.

If one partner has been economically disadvantaged by the division of functions within the relationship, the court can decide to make an uneven division of the relationship property by awarding a lump sum to one partner out of the other partner’s relationship property.

If the partner who is in the better economic position has also been able to increase the value of their separate property during the relationship, due to the division of functions, the court can provide compensation to the other partner out of either relationship property or separate property.

In deciding whether to order an uneven division of relationship property in the above situations, the court can consider:

• the likely earning capacity of each person, and
• the responsibilities of each person for the ongoing daily care of any dependent children of the relationship, and
• any other relevant circumstances.

Property (Relationships) Act 1976, s 16

Sometimes when a relationship begins, both partners own a home that could have become the shared or “family” home. But, when the relationship property is to be divided, the home (or the proceeds of the sale of the home) of only one partner is included in the relationship property. In these cases, the court may adjust the division of relationship property to compensate for this. The court may also make an adjustment if one home was sold before the relationship began because the two parties were then planning to set up house together.

Property (Relationships) Act 1976, ss 9A, 17, 17A

Where the value of one spouse’s or partner’s separate property is increased by:

• the direct or indirect actions of the other partner, or
• the use of relationship property,

then the increase in the value of the separate property is considered to be relationship property and is divided according to the contributions of each partner to the increase.

Where the separate property of one partner has been helped by:

• the direct or indirect actions of the other partner, or
• the use of relationship property,

the court may increase the share of the other partner in the relationship property or order that they be paid compensation.

Where the separate property of one partner has been reduced in value by the deliberate action or inaction of the other partner, the court may reduce the share of the other partner in the relationship property.

Property (Relationships) Act 1976, ss 2E, 14, 14AA

For marriages and civil unions that last less than three years, the general principle is that equal sharing won’t apply to the family home and property (“chattels”) if:

• they were owned by only one of you at the date of the marriage or civil union, or
• they were acquired by only one of you after the date of the marriage or civil union by succession, survivorship, trust or gift by a third person, or
• one of your contributions to the marriage or civil union (including non-financial contributions) was far greater than the other.

In these cases, the family home and chattels will be divided according to each partner’s contribution to the marriage or civil union.

For other relationship property, equal sharing applies unless one partner has made a clearly greater contribution to the marriage or civil union. In these cases, the relationship property will be divided according to each partner’s contribution to the marriage or civil union.

Property (Relationships) Act 1976, ss 2E, 14A

If a de facto relationship lasts for less than three years, the Property (Relationships) Act will usually not apply. Instead, the general rule is that the parties each take out what they brought into the relationship and retain the property that is in their own name. If one partner wishes to claim a share of the other’s property, this can only be done by applying to the High Court and arguing that there is a “constructive trust” in place.

However, the Property (Relationships) Act may still be used for a de facto relationship of short duration if:

• either:
  • there is a child of the relationship, or
  • the applicant has made a substantial contribution to the de facto relationship (including non-financial contributions),

• and the court is satisfied that not making the order for the division of relationship property would be very unfair (result in a “serious injustice”).

If this is the case, the relationship property will be divided according to the contribution of each partner to the de facto relationship.