• Terms of reference
• Background to the review
• The need for this review
• The scope of the reference
• Commission’s progress to date
• Structure of this paper
• The purpose of the proposals

TERMS OF REFERENCE

1.1 By letter dated 6 September 1999, the then Attorney General, the Hon Jeff Shaw QC MLC asked the Commission to inquire into and report on the operation of the Property (Relationships) Act 1984 (NSW) with particular regard to:

• the financial adjustment provisions of the Act and in particular:
  • the effectiveness of section 20 in bringing about just and equitable adjustments of the parties’ respective interests; and
  • whether the current legislation is able to take into account superannuation entitlements effectively;
• the process of decision-making or determination of rights;
• the Commission’s Report No 36, De Facto Relationships (1983);
• the 1999 amendments incorporating the Property (Relationships) Legislation Amendment Act 1999 and the matters referred to the Legislative Council’s Standing Committee on Social Issues regarding the rights and obligations of persons in interdependent personal relationships; and
• any related matter.

NSWLRC Report 36

1.2 In 1983, the NSW Law Reform Commission delivered its report on De Facto Relationships (Report 36).¹ The terms of reference, which asked the Commission to “inquire into and review the law relating to family and domestic relationships” with particular reference to people living in de facto relationships and the rights and welfare of children living in such relationships, were very broad. Nonetheless, the Commission decided not to “attempt to cover the whole field of ‘family and domestic’ relationships”, but limited its consideration to heterosexual de facto relationships. It gave a number of reasons for this decision. These included the fact that the law as it then stood distinguished between de facto and other forms of domestic relationships; hence it was “best practice” to examine the law of de facto relationships without concurrently considering “other domestic relationships”. It was also argued that an inquiry into the broader issues implicit in the terms of reference would require extensive consultations and investigation which would delay the report:

There may well be a case for change in other areas of law affecting domestic relationships, but we think the necessary investigations can and should be undertaken as a separate exercise.²

The distinction drawn by the law accepts that de facto relationships resemble marriage to a certain extent, although not in all respects. It is this partial resemblance which has prompted legislators and policy makers specifically to confer rights and impose obligations on de facto partners in certain situations. Other domestic relationships bear less resemblance to marriage.³

1.5 Despite the narrow focus of Report 36, it was seen by some as a radical step, and the inquiry generated considerable interest and controversy. At that time, while the law recognised heterosexual de facto relationships, it did so in a piecemeal fashion, despite the fact that the number of heterosexual couples living together without marrying had increased significantly between 1971 and 1982.⁴

1.6 Given the number of ways in which State and Commonwealth law already took account of such relationships by 1983, the Commission noted that the crucial issue was not whether the law should recognise de facto relationships, but, rather, how much further the process of regulation should go.⁵ The Commission took a purposive approach to reform: examining specific areas of the law to identify anomalies or injustices, and recommending changes to rectify these problem areas. Generally, Report 36 recommended that the law be amended to remedy any such anomalous inconsistencies between married people and heterosexual couples living together on a “bona fide domestic basis”. Specifically, the Commission recommended that courts should be given power to adjust the property interests of de facto couples where it is just and equitable having regard to the contributions made by each of them. It also recommended that limited maintenance rights be made available to de facto couples.

Developments since 1983

1.7 Report 36 resulted in the De Facto Relationships Act 1984 (NSW). Less than twenty years later, the social context and legal framework in which the current inquiry is based are markedly different to that of the early 1980s. An important question for this inquiry is whether the law reflects that context. Courts and legislatures around the world have increasingly recognised and acknowledged the diversity of family forms and household arrangements in which people live. We examine some of these developments throughout this Discussion Paper.

1.8 In 1993, the Gay and Lesbian Rights Lobby produced a consultation document entitled The Bride Wore Pink.⁶ It recommended that the law be amended to recognise same sex couples as “domestic” partners, and that people in certain other close personal relationships ought also to have their relationships recognised for certain legal purposes. In addition, the document recommended that the issue be referred for more detailed consideration to the NSW Law Reform Commission.

1.9 In the ensuing years, two pieces of legislation which reflected the recommendations in The Bride Wore Pink, were introduced into NSW Parliament. The first, the Significant Persons Relationships Bill 1997 (NSW), was introduced by Ms Clover Moore MP in September 1997.⁷ The second, the De Facto Relationships Amendment Bill 1998 (NSW), was introduced by the Hon E Kirkby MLC in June 1998.⁸ Neither of these Bills proceeded to Second Reading stage.

1.10 However, in October 1998, the Government referred the issues raised by the De Facto Relationships Amendment Bill to the Legislative Council’s Standing Committee on Social Issues (“the Social Issues Committee”). The Committee inquiry lapsed when Parliament was prorogued in the lead up to the March 1999 election. On its re-election, the Government reconstituted the Committee in May 1999, but not before it signalled its intention to introduce its own bill to amend the De Facto Relationships Act 1984 “to honour a commitment by Labor to extend the rights and obligations of de facto relationships to other domestic relationships between adult persons”.⁹

Property (Relationships) Legislation Amendment Act

1.11 The Property (Relationships) Legislation Amendment Act 1999 (NSW)¹⁰ (“the 1999 amendments”) amended a number of NSW Acts to include same sex couples within the meaning of “de facto relationship”.¹¹ It also created a new category of “close personal relationship” and amended a smaller number of other Acts to apply to those in such relationships. A new provision¹² defined a “child of the parties to a domestic relationship” to include “a child for whose long term welfare both parties have parental responsibility (within the meaning of the Children and Young Persons (Care and Protection) Act 1998 (NSW))”. While the legislation implemented the Labor Government’s election promise to remove discrimination between heterosexual and gay and lesbian relationships in part, some areas of the law remain unchanged. Also, while the De Facto Relationships Act 1984 (NSW) was extended to apply to a broader range of relationships and renamed the Property (Relationships) Act 1984 (NSW) (“the PRA”), the substantive content of the legislation, particularly as it relates to financial adjustment on relationship breakdown, remained largely unchanged.

1.12 Following the passage of the PRA, the Government referred to the Social Issues Committee the question of which other laws, not amended by the Act, should also be changed. The Government also referred to the NSW Law Reform Commission the vexed issue of the operation of section 20 of the PRA, which enables court-ordered financial adjustment, including superannuation, and alteration of property interests of partners in a de facto relationship. The Commission was asked to take account of the work of the Social Issues Committee in its review.

Social Issues Committee

1.13 Following a period of consultation, the Social Issues Committee reported in December 1999.¹³ It raised several other issues which it recommended the Commission investigate as part of its review. These are:

• issues surrounding the introduction of a relationship recognition system;
• definitional issues raised by the 1999 amendments;
• jurisdictional issues in relation to the District Court;
• alternatives to litigation;
• the issue of the legal recognition of non-biological parents to ensure that children in non-traditional domestic relationships are not disadvantaged; and
• the adequacy of the maintenance provision in relation to children.

1.14 The Commission believes that a review of the PRA is long overdue. Despite the Act being amended and expanded in 1999, the broader issue of legal recognition of de facto and other close personal relationships outside of marriage has not been examined since Report 36 in 1983. At that time, the Commission acknowledged that issues arising in de facto relationships were similar to those that arose in marriage, and that the law treated de facto couples unfairly, particularly on the breakdown of relationships. However, the Commission regarded marriage as being on a higher plane than other relationships. Consequently, the provisions in the recommended new statutory scheme gave more limited rights to de facto couples than were available to married couples under the Family Law Act 1975 (Cth) (“the FLA”).

1.15 The Commission considers this view to be highly questionable today given the increasing numbers of people living together, the increasing social and legal acceptance of a wider range of family forms and the prohibition of discrimination on various grounds including sex, marital status and sexual orientation. Indeed, today recognition is given to many non-marriage like relationships.

The changing social context

1.16 Much of the discourse and public policy about families in Australia has tended to focus on the nuclear family comprising parents who are married to each other raising their biological or adopted children. However, as it is becoming apparent that the nature of the family unit is a dynamic one, trends and attitudes have changed with time. For many, marriage is no longer seen as the yardstick for all close personal relationships. Marriage rates have gradually declined over time¹⁴ and divorce is on the increase.¹⁵ As a result, there is an increasing number of sole parent families.¹⁶ Indeed, some empirical projections estimate that the “nuclear family could be extinct by the end of the century”.¹⁷ While such estimates may not prove entirely accurate, they do indicate the rapid rate at which Australian families are changing.

1.17 Many more couples today choose to live together without marrying. Indeed, the number of couples describing themselves as de facto couples doubled between 1982 and 1999.¹⁸ There has also been a rise in the number of people who live together in a de facto relationship prior to marriage.¹⁹ For gay and lesbian couples, marriage is not an option. As for same sex de facto couples, their number is difficult to estimate for two main reasons. First, it is only in the last decade that empirical research has considered gay and lesbian people and their relationships as a separate category for analysis,²⁰ and secondly, the data collected concerning same sex couples and families may not yield accurate results.²¹ It is fair to say that any inferences drawn from data, particularly census data, regarding the number of gay and lesbian relationships are likely to be an underestimate.

1.18 There has also been an increase in the number of relationships where one person acts as the carer providing domestic support or personal care for the other.²² Between 1992 and 1999, the number of carers rose from 1.5 million²³ to 2.3 million.²⁴ In the light of the changing social and domestic relationships shown by these statistics, the Commission considers a review of the law purporting to recognise such relationships to be timely.

Law needs updating

1.19 When the De Facto Relationships Act was introduced in 1984, it was a landmark piece of legislation. It was the first to give clear statutory rights to people living in de facto relationships to seek court orders for an adjustment of property interests when their relationships broke down. It was also the first legislation of its kind to allow, and indeed, encourage couples to make legally binding cohabitation agreements. The legislation essentially followed the recommendations made by the Commission in Report 36. As mentioned earlier, the Commission at that time concluded that de facto couples were also entitled to an accessible and fair statutory system to help resolve these issues when their relationships broke down. However, according to the Commission in 1983, de facto couples were not to be equated with married couples.

1.20 This policy was based on the view that a de facto relationship differed from marriage because marriage required a public commitment and that the law should reflect this difference. This was made abundantly clear in Evans v Marmont where one of the majority judges said:

One thing is clear. It was not the intention of the NSW Parliament in 1984 to equate de facto relationships with marriage, or to make the same provisions with respect to de facto partners as the Family Law Act, at that time, made with respect to married people.

There are some similarities between the provisions of the Family Law Act and those of the De Facto Relationships Act. There are also differences. Those differences are substantial, conspicuous, and deliberate.²⁵

1.22 This discrepancy in approach between marriage and de facto relationships persists today in the PRA. Newer models of property division in other Australian jurisdictions, on the other hand, have veered away from the NSW approach and moved towards a broader discretionary model, based on the FLA. The question for the Commission, almost 20 years after its first investigation into this area of law, is whether the changes in the social, legal and economic landscapes today require a further legal response in NSW.

1.23 Another important reason for reviewing the Act now is because of its extended coverage. One of the primary questions asked throughout this part of the discussion paper is whether the current provisions apply appropriately and adequately to those people in a diverse range of relationships which are now contemplated by the Act. The 1999 amendments to the PRA extended the coverage of the Act so that a wider range of people, including cohabiting same sex couples and people in close personal relationships, were covered within its scope. However, these amendments did not change the substantive provisions of the original Act in relation to the powers of the court to adjust parties’ interests in property or to make orders for maintenance. Whether the claim is brought by a person in a de facto relationship or a person in a close personal relationship, exactly the same substantive provisions apply. Unfortunately, as one commentator has noted, this means that “any current difficulties of interpretation are likely to continue, but now be visited upon the wider class of potential claimants.”²⁷ Nor did the 1999 amendments consider the effectiveness of the current provisions for making binding agreements, or the treatment of superannuation in property proceedings under the Act.

THE SCOPE OF THE REFERENCE

1.24 A glance at the terms of reference indicates that the main focus of the Commission’s inquiry is on property and financial issues. While the Commission gives due consideration to those issues, it is impossible to discuss and make proposals about property division and financial adjustments on the breakdown of relationships without examining the types of relationships which the law now regulates.

1.25 Examining the broader nature of relationships and the legal consequences that attach to them is necessary also because the terms of reference require the Commission to consider the effects of the 1999 amendments. As mentioned earlier, the 1999 amendments made consequential changes to some NSW laws as a result of the new definitions of de facto and close personal relationships, but left a number of other laws unchanged.

1.26 The terms of reference also require the Commission to have regard to the matters referred to the Social Issues Committee. The Committee specifically identified matters concerning interdependent personal relationships, extending beyond purely financial concerns, which warranted further investigation by the Commission. The clearest example of such matters is the Committee’s recommendation that greater legal recognition is needed regarding the relationship between parents in de facto relationships and their non-biological children.

COMMISSION’S PROGRESS TO DATE

Preliminary Paper

1.27 The Commission released a short preliminary paper in February 2000, flagging the major issues that arose in the course of our research and seeking views on those issues and any others that had not been canvassed. Several submissions were received in response.

Seminars

1.28 On July 7 2000, the Commission hosted a seminar which was opened by the former Attorney General, the Hon Jeff Shaw QC, on its review of the PRA. A distinguished panel of speakers, including the Honourable Madame Justice Claire L’Heureaux-Dubé, Dr Owen Jessep and Ms Hayley Katzen, delivered papers.²⁸

1.29 The Commission also hosted a workshop in December 2000 at which Ms Paula Ettelbrick, Family Policy Director of the National Gay and Lesbian Taskforce (US) and a number of others involved in relationships law reform discussed approaches to relationship recognition.

STRUCTURE OF THIS PAPER

1.30 As noted above, while the main focus of the Commission’s reference is on property and financial matters, broader considerations necessarily arise concerning relationships generally. In Chapter 2, the Commission looks broadly at the types of personal relationships in which people may be involved, and examines when, how and why the law attaches legal consequences to those relationships. Where children are involved, the interests and welfare of those children and the relationship they have with their parents is always an important factor to consider. While the law recognises the relationship between children and their biological or adopted parents in a marriage or de facto relationship, only limited recognition extends to non-biological children of parents in de facto relationships. Chapter 3 examines the legal recognition of non-biological parent/child relationships with a view to ensuring that children of parents in non-traditional (particularly same sex) relationships receive equal recognition and protection under the law.

1.31 Chapters 4 to 8 deal with financial and property issues under the PRA. Under the current law, couples in de facto or other close personal relationships may reach an enforceable agreement concerning the distribution of their assets on the breakdown of their relationship. In Chapter 4, the Commission examines the provisions dealing with such financial agreements to see whether an appropriate balance has been achieved between, on the one hand, enabling people to make their own legally binding agreements and, on the other, providing adequate safeguards to protect people from making, and being held to, unfair bargains.

1.32 Where a couple cannot reach an agreement, the court may make orders under section 20 of the PRA concerning the distribution of assets. In Chapters 5 and 6, the Commission looks at the operation of section 20 to see whether it is adequate to bring about just and equitable property division orders, especially in light of the broader range of relationships to which the PRA now applies, and discusses broader issues concerning property. Chapters 7 and 8 examine the powers of the court to make orders concerning superannuation and maintenance for partners in a relationship, respectively.

1.33 The methods and appropriate forum for dispute resolution under the PRA are discussed in Chapter 9. The Commission identifies deficiencies in the current framework that impede the delivery of a fair, accessible, timely and affordable resolution of disputes, and canvasses options for reform.

THE PURPOSE OF THE PROPOSALS

1.34 In this Discussion Paper, the Commission has formulated a number of proposals based on tentative views about aspects of the law that the Commission considers are in need of reform or clarification. The proposals do not, however, represent our final conclusions. They are intended to attract comment from interested groups and members of the public. The Commission welcomes submissions on the proposals and will be consulting with relevant interest groups and members of the public following the release of this Paper. All views and comments will be considered by the Commission before finalising recommendations for reform in the Report to be submitted to the Attorney General.

1. NSW Law Reform Commission, De Facto Relationships (Report 36, 1983) (“NSWLRC Report 36”).

2. NSWLRC Report 36 at para 1.4.

3. NSWLRC Report 36 at para 1.4.

4. NSWLRC Report 36 at para 3.8. Table 3.1 shows that the number of de facto couples, as a proportion of all married and de facto couples, increased from 0.6% in 1971 to 4.7% in 1982.

5. NSWLRC Report 36 at para 4.2.

6. Gay and Lesbian Rights Lobby, The Bride Wore Pink: Legal Recognition of Our Relationships (1st ed, Sydney, 1993).

7. NSW, Parliamentary Debates (Hansard) Legislative Assembly, 25 September 1997 at 584.

8. NSW, Parliamentary Debates (Hansard) Legislative Council, 24 June 1998 at 6319.

9. Hon J Shaw QC MLC, “Carr Government introduces Property Relationships Bill” (Media Release, 11 May 1999).

10. For a detailed chronology of the process leading to the enactment of the 1999 amendments, and of its parliamentary progress, see J Millbank and K Sant, “A Bride in her Everyday Clothes: Same Sex Relationship Recognition in NSW” (2000) 22 Sydney Law Review 181 at 193-205.

11. A “domestic relationship” is either a de facto relationship or a close personal relationship: s 5(1).

12. s 5(3).

13. NSW Legislative Council Standing Committee on Social Issues, Domestic Relationships: Issues for Reform (Report 20, Parliamentary Paper 127, 1999)

14. It is now estimated that 28% of men and 23% of women will never marry in their lifetime: Australian Bureau of Statistics, Marriages – Couples choose civil celebrants (Cat No 3310.0, Media Release, 21 September 2000).

15. In 1999, figures indicated that 46% of marriages were likely to end in divorce: Australian Bureau of Statistics, Main Features – Marriage and Divorces (Cat No 3310.0, 1999).

16. As a percentage of all families with children under 15 years of age, 12.7% were sole parent families in 1990, whereas in 2000, they represented 18.2% of all families: Australian Bureau of Statistics, Australian Social Trends 2001 (Cat No 4102.0) at 34.

17. “The Australian nuclear family could be extinct by the end of the century. True” The Age (7 August 2000). In a recent study, KPMG Consulting found that there were 7.1 million households in Australia at June 1998. All household types increased over the year to June 1998, with the exception of the traditional nuclear family, which contracted by 14,268 or 1.1% to 1.330 million. KPMG noted that, if this rate of decline were to continue, the nuclear family “would become extinct by 2092”: KPMG Consulting, Population Growth Report 2000 (11th ed) «www.kpmg.com.au/index.htm». See also E Schmitt, “Nuclear Families Drop Below 25% of Households for First Time” New York Times (15 May 2001).

18. In 1982, 4.7% of all couples described themselves as de facto couples, whereas in 1999, it was estimated (based on marriage and population statistics) that 9.4% of all couples could be living in a de facto relationship: Australian Bureau of Statistics, Main Features – Marriage and Divorces (Cat No 3310.0, 1999).

19. In 1999, 69% of all registered marriages were preceded by the couple living together, as opposed to 23% in 1979: Australian Bureau of Statistics, Main Features – Marriage and Divorces (Cat No 3310.0, 1999).

20. J Millbank, “If Australian Law Opened its Eyes to Lesbian and Gay Families, What Would it See?” (1998) 12 Australian Journal of Family Law 99.

21. This is due largely to the fact that, in the 1996 census, there was no separate category for people to nominate themselves as gay or lesbian and also no separate category for same sex relationships. Same sex partners could nominate themselves as such by ticking “other” or by ticking the “de facto” box. If neither of these options was taken, people in a same sex relationship were identified by the Australian Bureau of Statistics as living without a partner: Australian Bureau of Statistics, Census 1996 – Household Form at Question 5. See also Australian Bureau of Statistics, Census Dictionary (Cat No 2901.0), which states that de facto marriage includes same sex relationships where nominated. The 2001 census repeated that format.

22. See para 2.19 for a definition of “domestic relationship”.

23. B Cass, “Australian Families: the Next Ten Years”, paper presented at the International Year of the Family Conference (Adelaide, November 1994) at 11.

24. Australian Bureau of Statistics, Disability Ageing and Carers: Summary of Findings (Cat No 4430.0, 1998) at 10.

25. Evans v Marmont (1997) 42 NSWLR 70 at 78 (Gleeson CJ and McLelland CJ in Eq).

26. See Chapters 4-9 of this Discussion Paper for an analysis of how the PRA differs from the FLA in the determination of property and financial matters.

27. O Jessep, “Financial Adjustment in Domestic Relationships in NSW: Some Problems of Interpretation”, paper prepared for NSW Law Reform Commission seminar (Sydney, 7 July 2000) «www.lawlink.nsw.gov.au/lrc.nsf/pages/seminar01.04» at para 1.2.