Since the decisions of Stanford and Bevan, the Family Court has considered a number of cases where it has been argued that even after a long relationship it would not be just and equitable (or fair) to Order that a property settlement occur.
The cases above reinforce that when an Order is made for a property settlement under the Family Law Act, it is important to remember that while a Court may make such Orders as it considers appropriate, the Court shall not make an Order unless it is satisfied, in all the circumstances, it is just and equitable to make the Order.
The specific facts of Stanford and Bevan where quite different to most applications for property settlement which are typically heard before the Court. However, the Judgements have caused the Court to closely consider what Orders should be made in these circumstances.
The Court has reinforced that an individual’s legal and equitable entitlements to property (the property that an individual legally owns or beneficially has an interest in) does not alter merely because a couple are married. A long marriage will not in itself automatically give rise to entitlements which will require the Court to alter those interests in property. A Court must find that it is just and equitable to make an Order altering a party’s entitlements in property.
Separation alone does not establish a right to any adjustment of those existing entitlements.
A recent decision of Fielding & Nichol the Family Court of Western Australia considered whether it was just and equitable to make an Order for property settlement when the parties could not agree on the division of their assets following the end of their 12 year de facto marriage.
The husband sought an equal division of the assets, which primarily comprised of the real estate each party owned before the commencement of their relationship. The wife contended that it would not be just and equitable to make any Orders altering property interests. She proposed that the husband’s application be dismissed, which would have the effect of each party keeping the real estate they owned at the start of the relationship.
The parties primarily maintained their own separate property throughout their relationship. They lived in a property owned by the wife and the husband claimed a division of this property in his favour. The husband relied upon the length of the relationship and that he had done work around the property.
The Court ultimately agreed with the wife. In reaching this conclusion the presiding judge reinforced what was stated by the Full Court in Chapman & Chapman and Bevan & Bevan.
The Court found that there were a number of factors that established it was not just and equitable to adjust the parties’ property despite the length of the relationship and the contributions that had made. The presiding judge stated:
51: I have determined that it would not be just and equitable to make any Order altering property interests in the present matter.
52: In arriving at my decision, I have taken into account the following matters:
the husband’s insistence (and the wife’s agreement) throughout the relationship that the parties’ financial affairs should be kept entirely separate, with the intention that each would continue to hold their property separately, in circumstances where each party was mature, intelligent, and not in any way overborne by the other;
the fact that the assets were indeed kept entirely separate and the great bulk of them now exist in precisely the same form in which they were held at the commencement of the relationship (save for the fact that the wife now has an encumbrance over her property for which she is solely responsible);
the absence of any evidence to suggest the husband refrained from accumulating other assets (assuming he had the capacity to do so), or otherwise changed his position, as a result of having the benefit of using the wife’s home during their relationship and having assumed they would live out their days together;
the fact that neither party made any provision for the other to receive an interest in their property in the event of their death (save for the minor issue of the car, which lends support to the conclusion that the parties otherwise intended that the other would never obtain an interest in their assets);
the extent of the work done by the husband around the wife’s property was not such as to lead to a conclusion that it would be just and equitable to adjust existing property interests, especially given that the husband (and, for part of the time, his son) lived in the property free of rent; and
the ages and state of health of both parties, and the fact that although the wife has property of somewhat greater value than the husband’s, each party nevertheless has a significant asset which could be realised to meet needs that cannot be met from current income (noting that, at present, both are able to meet their necessary expenditure from their own income).
53: Having thus concluded it would not be just and equitable to alter the existing interests in property, I propose to dismiss the husband’s application.
As a consequence the husband’s application was dismissed and, notwithstanding the 12 year relationship, the Court did not find that it was just and equitable to make an Orders for property settlement.
The Court however confirmed that although the decision in Stanford v Stanford has reinforced that the Court must establish that it is just and equitable to make an Orders for property settlement as a stand-alone issue, the High Court also emphasised that the requirement will be readily satisfied in most cases. Although Bevan & Bevan serves as a good example of how the just and equitable requirement can prove to be a barrier to granting any relief even in a long marriage that was terminated voluntarily, the Court recognised such an outcome is likely to be uncommon.
What the decisions of Stanford, Bevan and Fielding & Nichol do reinforce is that it is extremely important to obtain specialised legal advice when undertaking a family law property settlement.