Two recent Full Court cases illustrate the importance of parties having their property settlement finalised as soon as possible following separation.
The reason for this is that if it is necessary for the Court to determine how the matrimonial assets will be divided between the parties, it will do so based upon the value of the asset pool at the time of Trial rather than at the time of separation.
If one party or the other receives an inheritance or windfall post separation, that will be included in the asset pool for division between the parties.
In the recent case of Calvin v McTier [2017]1, the Husband appealed against the Trial Judge’s decision that the Husband’s post separation inheritance would be included in the parties’ divisible asset pool.
The Husband had received the inheritance four years after the parties separated and at the time of Trial $430,686 of the inheritance remained unspent.
The Trial Judge assessed the parties’ contributions to the pool at 75/25% in favour of the Husband, including a 10% adjustment in favour of the Wife to take account of her future needs.
Chief Justice Bryant and Justices Ryan & Aldridge of the Full Court of the Family Court dismissed the Husband’s appeal, with costs.
The Full Court commented that ‘both the relevant definition of ‘matrimonial cause’ and section 79 [of the Family Law Act 1975 (Cth)] refer to all of the property held by the parties at the time of the hearing before the Court’ and ‘all of the property held by both of the parties or either of them can therefore be subject of orders [for property settlement], regardless of when particular assets were acquired.’2
Similarly, in the case of Holland [2017]3 the Wife appealed against the Trial Judge’s decision that the property inherited by the Husband 3 years after separation (which property was worth $715,000) be excluded from the parties’ divisible asset pool.
Justices Ainslie-Wallace, Murphy & Aldridge of the Full Court of the Family Court commented that ‘it is wrong as a matter of principle to refer to any existing legal or equitable interests in property of the parties or either of them as ‘excluded’ from, or ‘immune’ from consideration in applications for [property settlement].’4
These two recent cases demonstrate how important it is to have property settlement finalised as soon as possible following separation, such that any inheritances or windfalls received post-separation remain the property of that party only.
Once agreement is reached as to how the matrimonial assets will be divided, this agreement can then be formalised by way of Consent Orders and/or a Binding Financial Agreement. In the absence of an Order or BFA, parties’ agreements with respect to the division of their property are not legally
binding. Therefore, it is prudent to consult a solicitor practising in family law as soon as possible following separation.
