When Property Orders Following Divorce Will Not be Made
Our Divorce Lawyers on Brisbane’s Northside discuss when a property order may not be made following divorce.
When Should I Contact Brisbane Northside Divorce Lawyers?
- I am divorced or want to obtain a divorce;
- I am seeking a property settlement with my former partner;
- I want to confirm parenting arrangements with my former partner;
- I am not sure about limitation periods that may apply.
It is wrong to assume following divorce that both parties to a former marriage have an interest in all property held by them jointly or in their separate names. In many cases, both parties will have such an interest but the determination of an actual interest will depend upon the facts surrounding the parties’ relationship.
In the case of Zaruba & Zaruba, the Full Court of the Family Court of Australia considered that it was not just and equitable for an order to be made altering the wife’s interest in a property held in her sole name.
In that case, the parties had been divorced for over 20 years and had separated their finances almost 30 years prior. They had divorced in 1996 but had shared the same residence until 2005. The wife had given birth in 1996 to twins who lived with the parties although it was accepted that they were not the husband’s biological children.
The husband had no superannuation whilst the wife had a very modest superannuation interest. There were however, two real properties, one being the former matrimonial home and the second property (M Property) being owned solely by the wife with an agreed value at trial of $1,000,000. That property was always unencumbered.
M Property had been purchased by the wife originally as vacant land in 1993 for $74,000, some 5 years after the parties had separated their finances in early 1988. Since 1988, the parties had then maintained separate finances
The wife had bought M Property almost solely from monies provided by her friend, Mr S. Construction of a house on the land commenced in 2004 and was funded by wife’s mother as to $125,500 with Mr S providing a further amount of around $150,000. This all occurred then some 15 years after the parties separated their finances.
The husband made no financial contribution to the acquisition, maintenance or preservation of Mindarie Property. From 2005 the wife “and the children occupied the property to the exclusion of the husband”.
At trial, the net property of the parties and superannuation interest of the wife totalled $1,535,272.
What Did the Court Decide?
The trial judge took what is known as an asset by asset approach in considering the parties’ respective claims for property settlement under section 79 Family Law Act 1975 (Cth).
The trial judge had determined that the husband had in effect made a contribution to the M property which was assessed as 10 per cent of its value (or $100,000).
However, the Full Court said that the trial judge was in error in not considering whether it was just and equitable to make any order pursuant to section 79(2) of that Act in respect of the M Property (or indeed with respect to the husband’s cash and shares and the wife’s superannuation interest.)
That section 79(2) provides, amongst other things, that the court shall not make an order with respect to the property of the parties to the marriage or either of them altering the interests of the parties to the marriage in the property unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
The Full Court concluded that on the evidence before the Court, it was not just and equitable to make any order altering the wife’s interests in M Property (or the husband’s cash and shares or the wife’s superannuation).
Even if section 79(2) of the Family Law Act 1975 permitted of an order being made in respect of M Property, the Full Court found that the evidence did not show that the husband had made “non-financial and indirect” contributions to M Property in the period between its purchase in 1993 and the wife’s departure from their shared residence in 2005.
The wife’s acquisition, preservation, and improvement of the M Property had taken place without reference to the husband who had only become aware of its existence after it was purchased.
The fact of performance by the husband of “some parental responsibilities” for the wife’s children did not result in the husband acquiring an interest in the M Property to which the wife herself had made virtually no financial contribution.
The Full Court allowed the wife’s appeal and declared that the wife held her interest in the M Property to the exclusion of the husband.
Speak to a Divorce Lawyer on Brisbane’s Northside
If you are thinking of obtaining a divorce or require assistance to finalise a property settlement with your former spouse or partner, contact our experienced Divorce Lawyers Brisbane Northside at LGM Family Law. Our team of Divorce Lawyers Brisbane are here to help and offer a free initial 15-minute call. You are also welcome to book a fixed-fee initial consultation with us for more detailed advice tailored to your circumstances.
No matter your situation, we will assist you to resolve your family law issues and leave you free to get on with life. For more information and resources on divorce, visit our page here.