Court: it must be just and equitable to make a property settlement order

by Kate Marr on September 23, 2013

Kate Marr

In the matter of Stanford v Stanford (2012) the High Court decided that it was not “just and equitable” to separate the assets of an elderly married couple just because they involuntarily separated, when one spouse was forced to move into a nursing home.

By way of background, the parties to the family law dispute married in 1971. It was the second marriage for both parties, with each having children from their previous marriages. In 2008, the wife suffered a stroke and was forced to live (without her husband) in residential care. Whilst in care, the wife developed dementia. The husband continued to provide for his wife, placing about $40,000 into a bank account to pay for her medical needs or requirements.

In 2009, the wife’s daughter (acting as the wife’s Case Guardian) applied to the Family Court of Western Australia for Orders that the $1,300,000 family home be sold and divided equally between husband and wife. Orders were also sought in respect of the husband’s superannuation entitlements and the couple’s joint cash savings.

At first instance, the Magistrate hearing the matter made Orders that based on the contributions of each party, the wife be paid $612,931. The husband then appealed these Orders.

The Full Court of the Family Court of Australia held that despite having the power to make property settlement Orders in cases of physical separation (when the marriage is still intact), the Magistrate at the first instance had not sufficiently considered the effect of the Orders on the husband. Before the final Orders were made, the wife passed away. The proceedings were continued and the Full Court ordered that upon the husband’s death, the amount of $612,931 be paid to the wife’s legal representative. Then, the husband filed an appeal to this decision in the High Court.

The High Court decided to overturn the previous Orders. The Court considered just because parties separate does not automatically demonstrate that the husband and wife have any reason to alter their property interests. Ultimately, the Court decided that prior to dividing matrimonial property, it must be shown that it is just and equitable to make a property settlement order.

It is not yet certain whether or not this determination should be made prior to or after the Court has undertaken the four step process in determining a property settlement. For further information in respect of the four step process in which the Court takes in determining property adjustment orders, please refer to http://www.armstronglegal.com.au/family-law/property-settlement/four-step-process

If you would like to seek advice regarding property settlement Orders, please contact our office.

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