Separation and de facto property orders

An interesting case regarding de facto relationships

A recent case involving a same-sex couple who had been living de facto for 27 years will be of interest to anyone coming out of a de facto relationship.

In Chancellor & McCoy [2016] FamCAFC 256, the Full Court of the Family Court of Australia dismissed an appeal which sought to overturn the trial judge’s dismissal of an application for alteration of property interests.

Judge Turner had dismissed the Appellant’s application for property settlement on the basis that it would not be just and equitable to make an order adjusting the parties’ property interests.

The Appellant appealed her Honour’s decision by Notice of Appeal filed on 22 February 2016. The appeal was heard on 7 November 2016 and the decision of the Full Court delivered on 2 December 2016.

Dealing with unequal assets during separation

Both parties were working in education when they commenced their relationship in 1982 and their careers had progressed along parallel lines. 

At the time of separation the Respondent’s assets and superannuation were worth more than double those of the Appellant.

The net value of the Respondent’s assets was approximately $1.7 million, while the net value of the Appellant’s assets was approximately $720,000. The most significant difference was that the Respondent had superannuation worth $887,724 whereas the Appellant’s superannuation was worth only $204,177.

At the time of trial the Appellant was 59 years of age and the Respondent was 55 years of age. The Respondent had retired and re-partnered and was caring for her elderly parents. The Appellant was still working and had not re-partnered.

The initial determination regarding a property order

In finding that it would not be just and equitable to make any order altering the parties’ existing property interests, the trial judge took into account the following:

  • There had been no intermingling of finances
  • The parties did not have a joint bank account
  • Each party acquired property in their own name
  • Each remained responsible for their own debts
  • Each could use their wages as they chose without explanation to the other
  • There was a complete lack of joint financial decision making
  • There was the absence of sharing of any information with each other as to their financial situation or individual decision making, and
  • At the time of separation the parties were unaware as to the worth of the assets acquired by each of the parties during the relationship, and the decisions that had been made in respect to the acquisition of these assets.

Her honour also referred to the fact that neither party had taken any steps to ensure that the other would receive their property or superannuation in the event of their death (the Respondent had executed a Will giving her entire estate to her parents).

In determining that it was not just and equitable to make a property order, the trial judge referred to authorities and legal principles set out in Stanford [2012] HCA 52, Bevan [2013] FamCAFC 116 and Fielding & Nichol [2014] FCWA 77.

Appealing property division after separation

There were several grounds of appeal put forward by the Appellant, including that her Honour held this de facto couple, and particularly the Appellant, to a higher standard than other de facto couples.

However the Full Court did not find merit in any of the grounds of appeal.

The Full Court said (at paras 35 and 36):

…The somewhat unusual manner in which the parties arranged their affairs can be seen as distinguishing the present case from the ‘many cases’ referred to in Stanford… where there is ‘common use of property’ and ‘express and implicit assumptions that underpinned the existing property arrangements’. 

There was, of course, ‘common use’ of the homes owned by the respondent, but there was also a modest periodic payment by the appellant referable to her occupation of those homes. Furthermore, her Honour made no findings that would point to any ‘express and implicit assumptions’ that the parties would ultimately share in the other’s property…

Whilst orders were made in relation to the costs of the appeal, it is interesting to note the trial judge’s comments regarding the making of a costs order at the initial hearing, that is, that it was only after all the evidence was presented at the final hearing and after a comprehensive analysis of the material by the court that the outcome had crystallised.

For experienced advice and assistance with separation or divorce, contact the Family Law team at McCarthy Durie Lawyers here or talk to us on 3370 5100.