Property Law Act 1958
Duties Act 2000

The Statute Law Amendment (Relationships) Act 2001 (Vic) came into effect on June 28 2001. It makes significant changes to a number of Victorian statutes, including the Property Law Act 1958 and the Duties Act 2000.

The object of the Relationships Act is to give legal recognition to same-sex couples and their domestic relationships, and to eradicate persisting discrimination in the specified legislation.

Two new definitions inserted by the amending legislation are 'domestic partner' and 'domestic relationship'. 'Domestic partner' is defined as "a person with whom the person is or has been in a domestic relationship". The definition is gender-neutral and includes same-sex couples within its ambit. There are two definitions of 'domestic relationship', depending on the act being amended. For property-related benefits the general definition of 'domestic relationship' - meaning "the relationship between two people, who although not married to each other, are living or have lived together as a couple on a genuine domestic basis (irrespective of gender)" - applies. The new definitions provide a clear distinction between marriage and other domestic relationships.

Property Law Act 1958

Domestic partners (irrespective of gender) who live together or have lived together as a couple on a genuine domestic basis have access to the property settlement scheme under Part 9 of the Property Law Act 1958, which provides for the court to order the transfer or sale of property and the distribution of the proceeds on the breakdown of the domestic relationship.

Determination of whether persons are domestic partners is made by taking into account "all the circumstances of their relationship". Though a specific means of determining a 'genuine domestic basis' is not provided, due to the acknowledgement of the diverse ways in which an intimate commitment can be demonstrated, guidance in determining whether the requisite domestic relationship exists can be found in the provisions of Section 275(2) of the Property Law Act, which provides that the following matters should be taken into consideration:

  • the duration of the relationship;

  • the nature and extent of common residence;

  • whether a sexual relationship exists;

  • the degree of financial dependence or interdependence and any financial support arrangements 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; and

  • the reputation and public aspects of the relationship.

However, none of these factors are determinative, nor are they relevant in every case. Thus, in addition to the criteria stipulated in Section 275(2), the court has the power to make orders adjusting the property interests of domestic partners subject to a broad discretion based on what is just and equitable. A three-step process is undertaken by the court for this purpose. The first step is to identify any property and financial resources available for distribution. 'Property' is defined by the Property Law Act as including

"real and personal property and any estate or interest in real or personal property, and money, and any debt, and any cause of action for damages and any other thing in action and any right with respect to property".

Financial resources are considered to be "any prospective claim or entitlement belonging to either domestic partner", and include superannuation and entitlements under a discretionary trust. The second consideration is what contributions have been made during the course of the domestic relationship to the acquisition, improvement or conservation of the property and financial resources by the respective domestic partners, having regard to both financial and non-financial contributions, made directly or indirectly, and to any contributions made in the capacity of homemaker or parent. Finally, the court will have regard to any written agreement entered into by the domestic partners. This three-step process, and the judicial discretion that pervades it, has been criticized as not doing enough to settle this area of law, despite the inclusion of same-sex couples in the statutory framework.

However, any order made by the court is subject to satisfaction of the provisions under Section 281, whereby the court must be satisfied that:

  • the domestic relationship has existed for at least two years (except where the domestic partners have a child);

  • failure to make the order would result in serious injustice to the applicant; and

  • substantial contributions were made for which adequate compensation could not otherwise be provided, or the applicant has the care/control of a child of the other domestic partner.

Duties Act 2000

Pursuant to the amendments, significant duty exemptions in relation to specified dutiable transfers of property now apply to domestic partners.

Section 43 (Marriage and Domestic Relationships) is amended to include the exemption of duty chargeable for the transfer of dutiable property between domestic partners within its ambit. Hence, a same-sex couple living together in a house owned by one of the partners may now register the property in the name of both partners without stamp duty. Section 44 (Breakdown of Marriage and Domestic Relationship) now provides domestic partners with an exemption from duty chargeable for the transfer of dutiable property after the breakdown, for example in a situation where one party wishes to purchase the property from the other.

Determination of the existence of the requisite domestic relationship for the purposes of the Duties Act is to be made by reference to the considerations to be taken into account under Section 275(2) of the Property Law Act.

For further information on this topic please contact Katerina Petrogiannakis or Toby Mittelman at Arnold Bloch Leibler by telephone (+61 3 9229 9779) or by fax (+61 3 9229 9889) or by email ([email protected] or [email protected]).