Scott & Scott: Property Settlement 30 Years After Separation

by Bree Staines on October 21, 2016

Bree Staines

The matter of Scott and Scott [2016] FCCA 1659 (5 July 2016) was decided in the Federal Circuit Court of Australia by Judge Terry. The interesting facts in this case are that the parties were aged 83 and 91 and at the time the matter went before the Court they had been separated for 30 years – they married back in 1950 and separated in 1986. The matter finally came before the Court when the husband changed his Will and removed the wife as a beneficiary, and expressed intention to sell the family home to fund a refundable deposit for residency in an aged care facility. The wife did not receive any of the proceeds of sale from the home.

Under the Family Law Act 1975 (Cth) parties to a marriage can apply for property settlement up until 12 months after a divorce order comes into effect. After that time, you need to apply to the Court for leave (permission) to apply. When determining the property settlement pursuant to section 79(4) of the Act, the Court takes into account:

  • the property pool;
  • the parties’ initial contributions;
  • the parties’ financial, non-financial and homemaker/parenting contributions during the relationship and after separation;
  • the parties’ future needs; and
  • whether the property division is just and equitable.

Ultimately, all items in the property pool at the time of the Court proceedings need to be taken into account. In long relationships, it is usually the case that contributions from each party are to be considered equal, as any large initial contributions are eroded away during the course of joint decision making during the relationship. In a case like Scott and Scott, post separation contributions are of great importance. For example, whilst an asset may remain to be held in joint names, one party may be making more significant ongoing contributions towards it after separation, such as payment of the mortgage on the family home, which then causes their contributions to the property pool to increase. Alternatively, it may not be appropriate for some post separation debts or assets, such as receipt of an inheritance, to be considered to be part of the property pool. The future needs factors that are of most significance to consider whether either party needs a percentage adjustment in their favour is age, income earning capacity, medical expenses, and care of dependants. When parties are quite elderly like Mr and Mrs Scott, there may be many relevant future need factors, however, this may also be offset by their life expectancy.

In this case, the wife adduced evidence that she had made ongoing financial and non-financial contributions to the property pool by assisting in the maintenance and cleaning of the former family home, caring for the husband when he was ill. The parties both resided in the family home both together and separately for different periods. At times the husband also resided in the parties’ second property that was built in 1985 (which was sold during the post-separation period). The wife eventually purchased her own unit post separation in 1994. Both the husband and the wife had future needs factors due to their health and elderly ages, however, they were likely to be considered to be the same for both party and not ultimately result in an adjustment to the property division. Furthermore, the husband contacted that it was not just and equitable pursuant to the high Court case of Stanford for a property division that included the family home to take place.

In summary, the final Orders made by Judge Terry in this matter were:

  • the family home be sold with the husband and the wife each receiving 50% of the proceeds of sale
  • the wife be given all of her personal possessions and other homewares and furniture from the family home
  • the husband and the wife keep all other property in their respective names.

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