Cutting a different cake

Trends and developments in same-sex couple property disputes

By Jenni Millbank

As heterosexual de facto couple breakdowns move to the Family Court, state courts may develop special expertise in the somewhat different nature of same-sex couple disputes.

When NSW included same-sex cohabiting couples in property division and inheritance law in1999, the ACT was the only jurisdiction to have already done so.¹

Since that time every state and territory in Australia except South Australia has undertaken legislative reform affording wide-ranged legal rights to gay and lesbian couples within their jurisdiction. Queensland passed amendments to property division legislation in 1999 and recognition of same-sex couples in other areas of law in 2002, Victoria passed comprehensive recognition in 2001, Western Australia in 2002, and Tasmania and the Northern Territory in 2003. South Australia has a Bill pending to the same effect, although it is uncertain whether this will pass SA’s Upper House.²

For the moment then, state and territory courts (with the exception of SA) are able to determine same-sex and heterosexual unmarried couples’ property disputes in the same manner. This will soon change, however, with the referral of powers over de facto couples’ property disputes to the Commonwealth. So far NSW, Queensland. Victoria, and the NT have enacted legislation to achieve this.³ Western Australia will not refer powers as it has it’s own Family Court (already accessible to both heterosexual and same-sex couples), leaving SA, the ACT and Tasmania yet to do so.

All the referring states have made clear that same-sex couples are included in their referral of power, but the Commonwealth has refused to accept this aspect and made clear that it will only legislate with reference to heterosexual couples.⁴ Thus it appears likely that there will remain a two-tier system of property division for some time to come, with same-sex couples relegated to state systems while heterosexual couples, both married and unmarried, are heard in the Family Court. It is timely to consider whether state courts, once stripped of jurisdiction over heterosexual de facto couples, may develop a more specialist expertise with same-sex disputes.

This article outlines some common aspects of the various state and territory approaches to de facto relationship legislation and details some of the recent same-sex property division cases, including both common law- and statute-based claims. While same-sex couples have been included in NSW statutes for six years, many recent cases, even if claiming statutory relief, continue to be determined under common law because the couples separated prior to the commencement of the amendments on 28 June 1999.

In the last few years courts have become more ready to see same-sex relationships as ‘marriage-like’, in the sense of being intimate, committed and financially interdependent. While this is a marked improvement on earlier characteristics of gay and on relationships (in a variety of doctrinal forums) as “flat-mates”,⁵ “golfing buddies”⁶ or “virgins”,⁷ it is also important to be aware that same-sex couple disputes may not be similar or identical to heterosexual couple matters in all respects.

Common features of statutory regimes

Same-sex couples and unmarried heterosexual couples are categorised variously as “de facto relationships” in NSW, WA and the NT, “de facto partners” in Queensland, “domestic relationships” in the ACT and Victoria, and “significant” relationships in Tasmania, with different definitions of the requisite relationship in each Act.⁸Yet there is in fact a considerable degree of uniformity in these laws once the substance of them is examined. Notably, in 1999 NSW included in the Property (Relationships) Act 1984 (NSW) a list of factors to be taken into account when deciding whether a couple is in a de facto relationship.⁹Importantly, these criteria were later adopted in identical or near identical versions by other jurisdictions when they amended their own laws. This suggests that differences in terminology and definition may not be as significant as they first appear.

Other common features include the general requirement of a two-year period of cohabitation to qualify for the property regime (with provisions of dispense with this requirement if hardship ensues), but no time-limit for the application of most state law. The exception to this is in Tasmania, the only jurisdiction not to require cohabitation for inclusion in any applicable law, and in the ACT, where property division is available even if a couple have not cohabited, although all other relevant legislation requires cohabitation. Tasmania also differs in that couples can register their relationship if they choose to do so.

Parties who are not in a couple relationship may also use the property division regime in the ACT and NSW and (if they have registered their relationship) in Tasmania.

Despite variation in the principles of property division (with courts in some jurisdictions, for example NSW, directed only to contribution factors while others, such as the ACT and Queensland, include the twin principles of contribution and future need in a manner similar to the Family Law Act 1975 (Cth)), common aspects of statutory development mean that the states have much to learn from each other and should watch each other’s developments closely.

Recent cases

In many of the early common law property cases in the late 1980s and early 1990s, courts appeared reluctant to apply the Baumgartner v Baumgartner (1987) 164 CLR 137 approach to find a constructive trust in cases concerning same-sex couples. In cases such as Harmer v Pearson (1993) 16 Fam LR 596 and Mauger v Pearson [1999] NSWSC 268, courts did not construe the same-sex couple as involved in a “joint enterprise” with a common intention to maintain a home together. Rather, the prevailing approach was to find a resulting trust reflecting the proportion of money each party contributed to a purchase, with a tendency to pay little regard to other financial or non-financial contributions that occurred during the course of the relationship.

In contrast, the Supreme Court of WA did find constructive trust at the conclusion of a 15-year lesbian relationship in Millar v Smith [1998] WASC 222, although the greater earning power of the legal title holder meant that the court ordered a two-thirds/one-third division in her favour. This has been a fairly common result in the later cases where property has been acquired within the relationship, and is comparable with claims made by women in heterosexual relationships where they are often lesser income-earners.

In West v Mead [2003] NSWSC 161 a lesbian couple separated after a 15-year relationship into which two children were born, one to each of the women. Unlike the situation in many heterosexual cases where the non-title-holder of real property is usually the primary caregiver to the children and often makes the major non-financial contributions, in this case it was the defendant who was both the title-holder and the primary caregiver. While the title-holder was thus a main provider of non-financial contributions, the non-title holder was the primary breadwinner for the couple. In essence, the assets coming into the relationship was almost all on the plaintiff’s side.

An unusual feature of the case was that the couple had never lived in the property subject to the claim. The parties lived in a home belonging to the defendant’s mother while the defendant’s mother lived in a much smaller home unit owned by the defendant. As the claim for a proportion of the shared property could not be made on the relationship property, it was instead made over the property in the defendant’s name that the parties had never lived in. Nonetheless, the court was prepared to accept that there was a joint endeavour and held that the defendant had to account to the plaintiff for half of the value of the increase in the equity of the property over the time of the relationship. Note, however, that this equated to only an 11 per cent share of the property in total.

In Penzikis v Brown [2005] NSWSC 215 two women were in a 16-year relationship, of which the first eight or nine years were a romantic relationship. The following seven years involved a shared home, bed and finances but no sexual relationship, the court appeared to treat these later years as not forming part of the de facto relationship by suggesting that the non-couple section of the Act could have been of importance in determining the claim.

In addition to the inclusion of same-sex couples within the de facto relationship category, the 1999 amendments created a new category of “close personal relationship”, intended to cover close cohabiting relationships of interdependence across a small member of laws, including property division and family provision. This category is defined as “a close personal relationship (other than a marriage or a de facto relationship) between two adult persons, whether or not related by family, who are living together, one or each of whom provides the other with domestic support and personal care (mot involving payment)”.¹⁰

Some concern has been expressed at its inception that this category was overly broad, even nebulous.¹¹ As yet, such concern has not been justified, with very restrictive readings of the category in the few property and inheritance cases in which it had been raised. In Dridi v Fillmore [2001] NSWSC 319 the court interpreted this category as requiring proof both of domestic support and personal care. While “domestic support” was interpreted as including domestic activities such as shared cooking, shopping or washing of clothes, “personal care” was very narrowly defined as requiring “assistance with mobility, personal hygiene and physical comfort”.¹²It would be rare indeed for an able-bodied adult to require such assistance, thus this approach to “personal care”, if followed, would severely limit the applicability of the category, excluding a wide range of non-traditional relationships. However, this issue has not been addressed yet by an appellate panel, and the remark in Penzikis v Brown suggesting the cohabiting ex-lovers could be covered by it indicates that the question is far from settled.

In Penzikis v Brown the issue of when the relationship ended was a very important one, as it could have almost halved the period of time in which the parties were making contributions. Ultimately, this did not have to be determined, as the parties ceased cohabitation only days prior to the commencement of the Act and thus neither the de facto nor the close personal relationship provision applied.

The court instead considered an equitable claim over the whole period of the cohabiting relationship. As in West v Mead, there was quite a sharp assets/income divide in the relationship, with the plaintiff earning several times the income of the legal title-holder and paying most of the mortgage and expenses through the relationship. The property had been acquired by the defendant two years prior to the relationship. In that instance, without the impact of care giving for children to even out the impact of financial contributions, the court ordered a 35 per cent share of the property to the plaintiff.

Most recently, in Robinson v Rouse [2005] TASSC 48 two men were in a 16-year relationship as a couple and then continued to cohabit for an additional two years after their sexual relationship came to an end and the defendant had re-partnered. An interesting feature of this case is the fact that the men lived separately for the first eight years of the relationship, but the court had no difficulty in finding that they nonetheless had a joint compromise through the entire relationship. It held that as the couple was working together on the farm and planning towards their eventual shared home there, these were all relevant contributions. This case is also unusual in that the court explicitly characterised the relationship from the outset as “marriage-like”.

The claim was made over two related properties on the farm. Both properties were brought into the relationship by the defendant, who was given one and inherited the other, but both were maintained and improved through the efforts of the plaintiff, including in years prior to the defendant gaining title. In this case, unlike the others discussed, both income and assets were on the side of the defendant, while the plaintiff, earned very little money. The plaintiff also contributed as a homemaker and also through his labour on the farm property and in building a dwelling on the house property. The court granted the plaintiff 45 per cent of the proceeds and 20 per cent of the value of the farm property. While it is hard to compare property cases with varying levels of financial contributions, this seems to be a high-water mark in terms of the value accorded to non-financial contribution in a same sex couple case.

Distinct issues in gay and lesbian cases

It is important to note that same-sex matters may have distinct features compared to heterosexual cases. For instance, it appears very common for same-sex couples to have property in only one partner’s name even when sharing mortgage payments. This is explained by the fact that until 1999 couples in NSW could not amend the title to include a partner’s name without becoming liable for stamp duty on the value of the property. Even now many couples do not realise that the law has changed to allow a transfer of title to or from a partner without incurring stamp duty. It is also likely that a number of same-sex cases under the statutory regime will come out of time, as former partners are not fully aware of their rights and only seek legal assistance a long time after separating.

A review of the case law indicates that it is relatively common for lesbian and gay couples to separate slowly and remain cohabiting for a long period – even years – after they have ceased to be romantically involved. At what point do they then cease to be a ‘couple’? This issue also occurs in heterosexual de facto cases, but appears to be more common in same-sex cases where couples may continue to share important aspects of their lives, such as a bed, social life or finances, for some time before ending cohabitation.

It also appears to be somewhat more common for same-sex couples to have openly non-monogamous but nonetheless committed and stable relationships compared with heterosexual couples. While some commentators feared that courts would not construe non-monogamous relationships as de facto relationships, thus far, in a number of inheritance and property cases involving gay and bisexual men, courts have held that the relationships were eligible.¹³

Another important difference is that lesbian couples increasingly have children born into their relationships using assisted conception. If on separation the child or children remain living with the birth mother, she is not able to use the Child Support Assessment Act 1989 (Cth) to gain child support from the other mother. This exclusion from the statutory mechanism requires lateral thinking about other avenues for child support and how to build them into a case.

Lesbian families can use promissory estoppel¹⁴but this is uncertain, has an evidentiary burden, and requires the use of the Supreme Court. In NSW there is the additional option of including a claim for maintenance in a statutory property claim on the basis that the party is unable to support herself due to the care of a child to the age of 12.¹⁵It is also worth considering, for the future, proactive measures such as putting child support agreements in place through domestic relationship agreements.

In some cases lawyers must work hard to make the court aware that same-sex couples are not always identically situated to heterosexual couples. For instance, in a 2001 case the court held it against the credit of a gay man that he was not prepared to answer, in open court, questions about whether his former partner had died of AIDS, and that in filing-out a government application for an interdependency visa for his present partner, he had not disclosed that they met through an escort agency.¹⁶it requires sensitivity to draw to the court’s attention the fact that a gay person in that situation would be exposing himself to considerable risk of discrimination by responding truthfully, and that lack of candour in such circumstances might be reasonable.

Conclusion

Although the legislative changes are still largely not being applied, they have already been influential. Courts hearing common law cases seem much more ready to see same-sex cases as akin to those brought by heterosexual couples, and more ready to credit financial and non-financial contributions than previously. It will be interesting to see how this case develops once heterosexual de facto cases are removed from the jurisdiction, perhaps once again reinforcing a different legal and social status of these relationships.

In 2002 in one of the first cases in NSW in which a gay partner’s family provision claim was heard under the de facto category, the survivor made a claim for the shared residence. The claim was largely successful and the result comparable to that which would be granted to an opposite-sex partner. However, the Supreme Court Master concluded the judgement thus: “The relationship was a long one. It was for 31 years. It had it’s own commitments between the two parties to the relationship, but it must be noted that, in fact, it was only a de facto relationship and in this sense one cannot quite compare it to the situation of a married heterosexual couple who have made the public commitment of marriage …”.¹⁷This remark suggests that in Australia unmarried relationships, whether legally recognised or not, may still be considered as ‘only’ de factos, as inherently less than ‘the real thing’ of marriage (even, or perhaps especially, when the latter option is not available to same-sex couples).

ENDNOTES

Although note that the Act used an open non-couple category to do so: see Domestic Relationships Act 1994 (ACT). See also the Legislation (Gay, Lesbian and Transgender) Amendment Bill 2003 (ACT).
See Property (Relationships) Legislation Amendment Act 1999 (NSW); Property Law Amendment Act 1999 (Qld); Discrimination Law Amendment Act 2002 (Qld); Statute Law Amendment (Relationships) Act 2001 (Vic); Acts Amendment (Lesbian and Gay Law Reform) Act 2002 (WA); Law Reform (Gender, Sexuality And De Facto Relationships) Act 2003 (NT); Relationships Act 2003 (Tas); Relationships (Consequential Amendments) Act 2003 (Tas); Statutes Amendment (Relationships) Bill 2004 (SA).
Commonwealth Powers (De Facto Relationships) Act 2003 (NSW); Commonwealth Powers (De Facto Relationships) Act 2003 (Qld); Commonwealth Powers (De Facto Relationships) Act 2003 (Vic); Commonwealth Powers (De Facto Relationships) Act 2003 (NT).
“State attorneys-general have all agreed that if state power over de facto property disputes is to be referred to the Commonwealth it should include all power in relation to de factos under state legislation, including same-sex de factos”. Queensland, Parliamentary Debates, Legislative Assembly, 9 September 2003, 3274 (Rod Welford, Attorney General and Minister for Justice); Northern Territory, Parliamentary Debates, Legislative Assembly, 7 October 2004, 5366 (Dr Peter Toyne, Attorney-General and Minister for Justice); NSW, Parliamentary Debates, Legislative Assembly, 5 September 2003, 3236 (Neville Newell, Parliamentary Secretary); Victoria, Parliamentary Debates, Legislative Assembly, 14 October 2004, 1059 (Rob Hulls, Attorney General).
This analogy was used at first instance but expressly rejected by Samuels JA in majority on appeal: Ball v Newey (1988) 13 NSWLR 489, at 492.
Wilson & Anor v Qantas Airways (1985) EOC 92-141 at 76,398.
QFG and GK v JM (1997) EOC 92-902.
Property (Relationships) Act 1984 (NSW) s4(1); Interpretation Act 1984 (WA) s.13A(1); Property Law Act 1974 (Qld) s.260(1); De Facto Relationships Act 1991 (NT) s.3A(10; Property Law Act 1975 (Vic) s.275(1); Domestic Relationships Act 1994 (ACT); Relationships Act 2003 (Tas) s.4(1).
These include:

the duration of the relationship;
the nature and extent of common residence;
whether or not a sexual relationship exists;
the degree of financial dependence or interdependence;
any arrangements for financial support between the parties;
the ownership, use and acquisition of property;
the degree of mutual commitment to a shared life;
the care and support of children;
the performance of household duties; and
the reputation and public aspects of the relationship.

The Property (Relationships) Act 1984 (NSW) s.4(2) notes that all of the circumstances are to be taken into account and no one factor is required to find that a de facto relationship exists. The criteria were drawn from D v McA (1986) 11 Fam LR 214 at 227 per Powell J.

Property (Relationships) Act 1984 (NSW) s.5(1)
See for example Robert Benjamin, “Far Reaching Consequences of De Facto Legislation” (1999) 37 (6) Law Society Journal 62.
Dridi n Fillmore, paras 104-108 per Master Macready. The Master held that such care could be provided by “(a) The person concerned. (b) An employed valet or lady in waiting, (c) a mother for her sick child or (d) a daughter for her elderly incapacitated mother” and held that “The legislation in terms excludes the first two but would include the last two examples”: at 106-107. The Master repeated this restrictive holding in a family provision case: see Devonshire v Hyde [2002] NSWSC 30. This approach was approved by Acting Master Berecry in Hinde v Bush [2002] NSWSC 828 but has not yet been considered by an appellate panel.
See Jenni Millbank and Kathy Sant, “A Bride in Her Every-day Clothes: Same Sex Relationship Recognition in NSW” (2000) 22 Sydney Law Review 18. Cases thus far where non-monogamy has not impeded a finding of a de facto relationship are: Devonshire v Hyde [2002] NSWSC 30; Dridi v Fillmore [2001] NSWSC 319 (in this case the relationship did not meet the time requirement).
See W v G (1996) 20 Fam LR 49.
Property (Relationships) Act 1984 (NSW) s.27.
Dridi v Fillmore [2001] NSWSC 319, at para 77.
Mair v Hastings [2002] NSWSC 522 para 50.