Being married does not automatically entitle you to a property settlement

20/06/2018

In the recent case of Whent and Marbrand, the Full Court of the Family Court relying on the principles established by the High Court in Stanford and agreeing with the trial judge determined that in the particular case before them Section 79(2) of the Family Law Act operated with the result that it was not just and equitable to adjust the legal ownership of the parties in property. The Husband and Wife each kept the property that they had at the time of the trial.

It was acknowledged by the trial judge and not challenged by the Full Court of the Family Court that “In the majority of matters the decision as to whether or not it is just and equitable for the court to make property orders is resolved by the breakdown of the marital relationship and the mutual applications of the parties to the court for orders altering their respective property interests.”

However, this was not a such a case.

As in Stanford, this case has again established that whether it is just and equitable to alter the existing legal ownership of property in an application under the Family Law Act is highly dependent on the unique facts before the court at the time.

In this case those facts were as follows:
• The relationship was from September 2006 until January 2011 (5 years).
• The Husband and Wife during their relationship held no joint bank accounts, acquired no property jointly nor held joint assets.
• The home they lived in was purchased by the Wife at the start of the relationship intentionally in her name with the associated mortgage in her name and the parties did not intend it to be a joint asset, with her solely contributing the funds for purchase and subsequent renovation.
• At trial the Wife owned property worth $1,847,104 and the Husband owned property worth -$9,478.
• The Husband contributed $2,300 per month to the household which was calculated by reference to the rent he paid prior to the purchase of the home. The Judge found this was a contribution to his costs and those of his children who lived with the parties from time to time.
• The Husband and Wife split the costs of social outings.
• The Husband and Wife conducted their businesses entirely separately from the other and applied their income without recourse to the other.
• The Wife provided professional services to the Husband’s business and the Husband provided services to the Wife’s business, the Wife provided substantially more to the Husband’s business.
• In August 2013 the Husband received $1.2 million from an insurance payout as a result of suffering a chronic and potentially disabling illness and had spent it all without recourse to the Wife by the time of trial.
• In October 2014 the Husband sent the Wife an email saying that he received his insurance pay-out after they were separated and he had no financial tiesto her. The Judge interpreted this as the Husband saying the Wife had no entitlement to the pay-out.
• Two years after separation (May 2013) the Husband and Wife purchased a commercial property together as tenants in common in equal shares and each contributed one half of the purchase price.
• In October 2014 the Husband wanted to withdraw from the settlement and the Wife refinanced the mortgage and paid the Husband half of the equity. The Judge found this was a commercial agreement and not a joint matrimonial endeavour.

The Husband and Wife on occasions loaned each other money during and after the relationship ended and such amounts were all repaid.

Neither of them provided for each other in their wills.

The trial judge found against that the Husband’s credit and she preferred the Wife’s evidence where there was any contention due to the following:
• He did not disclose the receipt of $459,708 in his affidavit nor explain his non-disclosure.
• He had been convicted of crimes of dishonesty relating to misconduct in relation to a company
• He fabricated/reconstructed an alleged loan agreement with his sister
• He failed to disclose receipt of $700 per week into his household from his son and his partner

The finding about the Husband’s credit meant that he had the burden of proof to establish that he had spent the $1.2 million of insurance funds on reasonable expenses. He did not meet this burden when he did not produce documents to substantiate that claim.

What is clear from this case is that the discretion of the trial judge is something that is difficult to predict and should always be a consideration when considering whether a matter should be settled through negotiation or mediation.

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