Your Property and the Family Law Act

Family Law: 18 March 2019

You might now just be able to keep it!

In Stanford[1] the High Court told us that before you take property from one party to a marriage or relationship and give it to the other you had to work out who actually owned it and first consider whether it was just and equitable to alter the existing ownership. The High Court said it was only if you came to a view that it was just and equitable to take from one and give to the other, that you were permitted to proceed.

The facts in Stanford were unusual and it wasn't difficult to come to the view that it wasn't just to alter the parties' interest in their property. 

In Bevan[2] the Full Court of the Family Court applied Stanford and didn't alter the parties' interest in their property. Like Stanford the facts screamed that any alteration of property interests would be unjust.

This led to a reformulation of the process in property matters. The new formulation is:

• The Court must identify the existing legal and equitable interests of the parties in the property, the liabilities and financial resources of the parties at the time of the hearing and then whether it is just and equitable to make a property settlement order.
• Such a consideration should not be guided by an assumption that the parties' rights to or interests in property are or should be different from those that then exist. The question is whether those rights and interests should be altered.
• There is no presumption that one or other party has the right to have the property of the parties divided between them or a right to an interest in marital property.
• The Court needs to conclude that it would be unjust or unfair to leave property rights intact. 

If the Court resolves that it is just to alter property interests then it considers:

• the contributions made by the parties;
• the needs of the parties;
• the means available to satisfy them; and
• the "justice and equityof the actual orders to be made.

I however thought this was "smoke and mirrorsand there was to be no substantial change to outcomes post Stanford and Bevan. This view was confirmed by the repeated regurgitation of:

"In many cases, the requirement to consider whether it is just to alter property interests is readily satisfied where the parties are no longer in a marital or de facto relationship and, thus, for example, the common ownership or use of property by husband and wife will no longer be possible or the express or implicit assumptions that underpinned existing property arrangements, such as the accumulation of assets or financial resources by one for the benefit of both, have been brought to an end with the relationship€¦In particular, such a circumstance arises where both parties seek adjustive orders but are unable to agree as to same.€

But, Stanford offered Courts a mechanism to be just and slowly, very slowly we are seeing instances where what is just is actually occurring. 

So:

• Eufrosin [3] :The wife wins $6,000,000 after separation and the Court applies Stanford and gives the Husband none of the win. Why, because it wasn't "theirsand "theyhad nothing to do with the win.
• Kristoff [4] :The defacto party says she made contributions by cleaning, cooking, washing and ironing so give me some of his property. The Court says these contribution are not enough to make it just to take his property from him and give it to her.

"The applicant made some contributions to the relationship. She helped to clean the respondent's Property B€¦ after he moved out. She helped with Property M. I assume that when she stayed at the Property G property she helped with domestic tasks just as I imagine she did when she lived in (omitted). She made no significant financial contribution. Her contributions were not such as to justify the court making orders altering the interest of the respondent in his property in her favour.€

The facts in Kristoff are not usual, but Stanford was available and the Court was prepared to use it to thwart a claim which until now would have gotten the applicant money.

I suspect Stanford will be used in a lot of cases where the facts don't warrant a property adjustment, but until now would have seen one occur.

If you are facing someone making a claim against you think about Stanford. Maybe, just maybe it will help you defeat an unjust claim!

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[1] Stanford v Stanford (2012) 247 CLR 10

[2] Bevan v Bevan (2014) FamCAFC 19

[3] Eufrosin v Eufrosin (2014) FamCAFC 191

[4] Kristoff v Emerson (2015) FCCA 13