Property Settlement Orders After Separation
If you separated from your former partner many years ago but never made a property settlement, you may be wondering if it is too late now to obtain a settlement. Depending upon your circumstances, it may still be possible.
- In the case of married couples, if you have already obtained a final divorce order, more than 12 months has passed since that order became final and your former partner does not consent to proceedings; or
- In the case of a de facto couple, if more than 2 years has passed since the end of the relationship, you will first have to obtain leave of the Court for any property application to be heard by the family courts (assuming that for a de facto relationship, your relationship broke down on a final basis after 1 March 2009). If leave is granted, it will be for the Court after identifying the property of the parties to determine whether or not it is just and equitable in the circumstances of the parties that an order be made altering the interests held by you and your former partner in property.
If you don’t yet have a property settlement, contact our Family Lawyers Brisbane who will be happy to advise you regards your entitlement. Obtaining that entitlement is essential for your financial future.
In the meantime, our starting point for considering whether the Court will make an order for the division of property is the 2012 case of Stanford & Stanford in the High Court of Australia. The Court considered whether an order altering property interests of parties should be made where the marriage between the husband and the wife was intact but they were separated as a result of the wife living in an aged care facility. The application for property settlement had been filed by the wife’s case guardian. The parties had lived as a couple in a home registered in the husband’s name for 40 years and the husband continued living there after the wife entered the aged care facility. That home was the only significant asset of the parties.
The husband had set aside funds to provide for the wife’s care.
The High Court determined in that case that it was not just and equitable to make any order altering the parties’ interests in property. The Court noted that where separation of parties is not voluntary, the bare fact of separation does not demonstrate that the husband and wife have any reason to alter property interests.
Each case is decided based upon its particular facts. We look then to another case in 2016 of the Federal Circuit Court of Australia (Scott & Scott) where the Court did make orders altering the property interests of parties who had been married for 32 years and separated for 30 years. The couple who were then aged 83 and 91, respectively, had never divorced and whilst there had been some discussion and previous arrangements towards making a property settlement, it had never been finalised.
At the time that the case was decided, the wife owned a property (A Property) in her name only which she had acquired post separation and which was unencumbered, with a then market value of $460,000 and held net assets, including that property, with a value of some $495,000.
The wife’s property had been purchased using an inheritance from her parents’ estate savings, monies that she borrowed from her son and the balance was obtained by way of a loan from a building society. The wife used the property registered in the name of the husband (L Property) as security for the purchase of her property but the Court was unclear as to why that was necessary. The Court was satisfied that the wife made all the mortgage repayments on this property.
The husband held nets assets with an aggregate value of $638,477. Those net assets included a property registered in the name of the husband.
The husband had purchased vacant land (L Property) in about 1951 at the commencement of cohabitation of the parties. He had borrowed the amount of the purchase price and the loan was repaid many years prior to the date that the parties separated. Prior to their marriage, the parties built a garage on the land where they lived following marriage. The wife’s aunt lent her money to put on electricity and the husband with his friend did the actual work to connect the electricity.
In 1960, the parties borrowed money and subsequently built a house on the land where they lived. That loan was fully repaid by 1981.
There was other property that was purchased in joint names and sold just prior to separation. The wife had contributed her savings to the purchase and a loan was taken out to fund the balance purchase price.
There was some dispute as to how the proceeds of sale of that property were applied but the Court took the view that it was more likely than not that money from the sale of that property was used by the Husband to purchase a further property in his sole name.
The Husband then built a house on that further property (N Property). The wife left L Property in 1987. She returned to live there in 1988 during which time the husband moved between N Property and L Property. She left L Property in 1994 when she purchased A Property in her own name.
There was evidence that the wife helped the husband around the house after he broke his hip in 2000 and that in a few later years, she did cleaning, laundry and shopping for him when he was unwell and that she continued mowing the lawn at L Property until 2009.
Since separation in 1986, the wife had continued to raise with the husband her view that she was entitled to a share of L Property. The wife in cross examination in Court insisted that the husband had promised her that L Property would be sold and that “half would be [hers]”.
At a mediation in 2003, the parties had signed a document which provided for the husband to pay the wife certain monies from the proceeds of sale of the L Property. However, the property was not sold.
The parties had been in a 32-year relationship during which they worked together to acquire, conserve and improve property which by mutual agreement they used as their home. For most of the 8 years after separation, they both continued to use of the property but for the 14 years prior to the husband going into aged care, he had had sole use of the property. Even so, the wife had continued to press her claim for a share of the property and the husband had said things indicating that he recognised her claim but no settlement had been finalised.
In these circumstances, the Court concluded that it was just and equitable to make a property settlement order.
The Court considered that the parties’ contributions during the marriage were equal and that on the basis of contributions, each party was entitled to 50% of the L Property. The Court considered that the husband had no entitlement to a share of A Property that was held in the name of the wife.
A division on that basis meant that the wife received or retained total assets of some $808,000 whereas the husband received or retained some $328,000. Whilst the Court recognised that this suggested that the wife was much better off as a result of the division, the Court noted that of those amounts the husband would pay some $235,000 in a Refundable Accommodation Deposit to his care facility whilst some $460,000 of the wife’s entitlement was tied up in the property that she occupied.
The Court further recognised that the wife was better off because of the investment that she had made in a property in the post separation period.
When considering the future needs of the parties, the Court took the view that:
- there should be no adjustment out of the property pool in favour of the wife. The wife would have sufficient funds to allow her to maintain a reasonable standard of living and enjoy some luxuries such as an overseas trip;
- Neither should there be any adjustment in favour of the husband. The husband’s pension was sufficient to pay his daily living costs with some cash remaining for some extra comforts. The Court noted that that the husband’s legal fees may impact his share of the pool but that the Court could not take this into account as the husband had not provided evidence about his legal fees.
The Court noted that there is no obligation of the Court to equalise parties’ positions.
No adjustment was made in favour of either party for future needs factors given:
- The age disparity, with the husband at 91 years of age being 8 years older than the wife;
- The wife’s additional living costs in her own home (whereas the husband was living in an aged care facility);
- That the husband should have sufficient funds to make him comfortable.