Do you know what your property entitlements are following the breakdown of your relationship?
You should not simply assume that you will be entitled to a division of property with your former partner following the breakdown of your relationship.
In the majority of cases, the court will make an order providing for each party’s property entitlements. However, you should know that if you were before the family court, the judge hearing your case is only entitled to make an order altering property interests if the judge considers that it is “just and equitable” to do so. In many cases where an application for a property settlement order is made in the family court, that just and equitable requirement is satisfied but this is not always so.
Suppose for example that a couple had lived in a de facto relationship for over 20 years and during that time each party acquired property. You may imagine that a court in that situation would be willing to make an order for each party to obtain their property entitlements following the breakdown of their relationship.
However, in a relatively recent case which was on appeal to the Full Court of the Family Court of Australia, where a de facto same sex couple had lived in that relationship for 27 years but had kept their finances almost entirely separate, the Full Court upheld (or confirmed) the decision of the trial judge that it was not “just and equitable” to make any order for property settlement.
The trial judge in that case had concluded that it was not just and equitable to make any order declaring the property entitlements of each party based upon certain matters which included the following:
- There was no intermingling of the parties’ respective finances;
- The parties did not have a joint bank account;
- Each party had acquired property in their own name with little detail of an acquisition of property by one party being provided to the other party;
- Each party remained responsible for their own debts
- Neither party explained or accounted to the other party as to how they used the remainder of their wages;
- There was no element of joint financial decision making;
- Neither party made provision for the other party in a will or as a beneficiary to superannuation funds or life insurance policies;
- Neither party at the time of separation was aware of the value of assets acquired by the other party during the relationship or decisions that the other party had made regarding acquisition of assets.
The trial judge considered that it was relevant in deciding not to make an order declaring or altering the property entitlements of each party that the parties had for some 27 years continued to conduct their relationship without intertwining their finances.
One party (who brought the appeal) had provided housing held in her sole name for the parties to live in during the whole of the relationship. The other party had paid her some $120 per fortnight for most of the relationship. The trial judge found that whether that fortnightly payment was classified as mortgage repayment or rent or board, as the payment by that party was small relative to the size of the asset pool accumulated by the other party, that payment could not be regarded as financial intermingling. Instead, the trial judge considered it as financial assistance to the other party as the home owner who provided housing for the parties throughout the relationship.
The trial judge also found that there was no evidence that the financial and non-financial contributions made by the party bringing the appeal to properties of the other party had improved the value of those properties so that the party bringing the appeal had no equitable interest in the properties owned by the other party. This further supported the court’s decision not to make an order declaring the property settlements of each party.
The Full Court of the Family Court of Australia considered that the finding by the trial judge that the parties lacked future goals or plans was “part and parcel” of the trial judge’s finding that the parties kept their finances separate and were not accountable to each other in the conduct of their financial affairs.
The Full Court also considered that the trial judge had placed appropriate significance on the fact that neither party in the relationship had acted to ensure that the other party would benefit from their property or superannuation in the event of death of that party. The Full Court said then that, in the absence of evidence, the trial judge could not have concluded (and did not in fact conclude) that either party assumed that there would be some redistribution of property in the event that the relationship came to an end for reasons other than the death of one of the parties.
It is very important then to closely consider how you and your former partner conducted your relationship and especially your financial affairs so that you can know whether the family courts would likely be willing to make an order declaring property entitlements for you and your former partner. In the majority of cases, an order of that kind would be available between parties to a relationship.
LGM’s Brisbane Family Lawyers are ready to assist with division of property and property entitlements following the breakdown of a relationship.