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march 2014

A De-facto relationship - Is it or isn't it?

Being in a de facto relationship will impact on whether (and to what extent) the Property (Relationships) Act 1976 (“the Act”) applies to you. With that in mind, any couple that is not married or in a civil union, should be aware of what it means to be in a “de facto relationship”.

To be in a de facto relationship, one of the requirements is for the two people to be “living together as a couple”. Satisfying this requirement can sometimes be problematic, as there are situations where a couple does not physically live together yet are in a de facto relationship. Conversely, a couple might live in the same house, but not be in a de facto relationship.

In determining whether two people “live together as a couple”, the Court takes into account any circumstances it considers relevant. The court is assisted in this by the factors set out in Section 2D(2) of the Act, being:

  • 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, and 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.

However, the Court has the discretion to consider or disregard any of the factors listed above. In other words the Act sets out possible criteria but each situation will be considered on its merits.

In Martin v Marshall [2014] NZHC 2354 Ms Martin sought a share of Mr Marshall’s estate on the basis that they had been in a de facto relationship for 9 years. The Court held that a de facto relationship did not exist, despite periods of co-habitation, a sexual relationship existing, the parties travelling overseas together and attending significant family occasions together. Although the parties had “shared experiences” and Ms Martin was an “intimate companion” to Mr Marshall she was “not an integral part of his life”. The parties were largely independent and there was a “real merger of lives” missing. Consequently Ms Martin was not entitled to a share of Mr Marshall’s estate beyond what was provided for in his Will.

This case highlights that the question of ‘What is a de facto relationship?’ cannot be answered easily. Certainly, the answer will vary depending on the circumstances of each relationship. Whatever stage your relationship is in, we suggest you consider this and how your property may be affected. To remove any doubt, we recommend a Contracting-Out Agreement under the Act.