#8550 - Matrimonial Property - Family Law

FL 5 Matrimonial Property 1

Cases 1

System of reasoning for applying s 79: 2

1. Note validity of legislation on this topic and ‘matrimonial cause’ (Kowalski) 2

2. Consider first whether financial agreement – if binding then that takes the place of s 79: s 71A 3

3. Court has power to declare all interests in property between the parties to a marriage: s 78 3

4. Have proceedings been instituted in time: 12 months: s 44(3) 3

5. Power of court to redistribute property: s 79 FLA 3

6. Two step process: (a) look at contributions retrospectively (b) current and prospective economic positions of parties 4

Step (1): look at contributions retrospectively: S 79(4)(a)-(c) 5

Step (2): look at current and prospective economic positions of parties: s 79(4)(d)-(g), and in particular s 79(4)(e) requires examination of s 75(2) factors 8

7 Injunctions under s 114 and s 4 para (e) def of matrimonial cause (Mullane – occupancy rights not an injunction, 10

8 s 106B setting aside transactions made to defeat orders (heath) 13

9 Power to set aside property restributions orders: s 79A 15

Appendix: Statutory provisions 15

Cases 22

Readings:

• Kowalski

  • Even if parties marry, and then divorce, and then later reconcile, the court can consider under the FLA the entire relationship whether arising out of the contribution before during or after the formal marriage was entered into or dissolved.

• Mallet

  • Principles:

    • Court required under s 79 to make order as it thinks fit when satisfied tat it is just and equitable that an order should be made

    • Principle which court is expressly required to apply so far as practicable is that it will make such orders as will finally determined financial relationships between parties to marriage and avoid proceedings between them: s 81

• Ferraro

• Figgins

• Omacini

• Horsley

• Waters and JUrek

• MUllane

• Ascot Investments

• Taxation v Worsnop

• Heath

• Kennon

• Fairchild

• para (ca) of Matromonial cause in s 4(1) of FLA –

(ca) proceedings between the parties to a marriage with respect to the property of the parties to the marriage or either of them, being proceedings:

(i) arising out of the marital relationship;

(ii) in relation to concurrent, pending or completed divorce or validity of marriage proceedings between those parties; or

(iii) in relation to the divorce of the parties to that marriage, the annulment of that marriage or the legal separation of the parties to that marriage, being a divorce, annulment or legal separation effected in accordance with the law of an overseas jurisdiction, where that divorce, annulment or legal separation is recognised as valid in Australia under section104;

Was held in Fisher v Fisher that para (ca)(i) in context of s 79(8) valid.

• Note that once a marriage has been celebrated between the parties, the entire relationship between the parties whether arising out of the contributions before, during or after the formal tie of marriage wa entered into or dissolved, falls within the ambit of Pt VIIII of the FLA. Principle explains why contributions made between cohabitants who later marry are judged according to the criteria set out in the FLA and not property act: Kowalski

• If out of time under s 44 to apply under s 79, may still seek court to investigate and declare any existing property interests under s 78

If out of time, need leave of court under s 44(3AA). Two grounds under s 44(4).

• Hardship would otherwise be caused to a party to the relevant marriage or a child if leave were not granted: s 44(4)(a)

  • See whitford
    OR

• S 44(4)(b) For spousal maintenance - “the case ofproceedingsin relation to the maintenance of a party to amarriage--that, at the end of the period within which theproceedingscould have beeninstitutedwithout the leave of thecourt, the circumstances of theapplicantwere such that theapplicantwould have been unable to support himself or herself without an income tested pension, allowance or benefit.”

• In property settlement proceedings, the court may make such order as it considers appropriate under s 79(1) FLA:

1. Altering interests of parties: in the case of proceedings with respect to the property of the parties to the marriage or either of them--altering the interests of the parties to the marriage in the property; or

2. Altering interests of bankruptcy trustee: in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the marriage--altering the interests of the bankruptcy trustee in the vested bankruptcy property;

Including:

3. an order for a settlement of property in substitution for any interest in the property; and

4. an order requiring:

   1. either or both of the parties to the marriage; or

   2. the relevant bankruptcy trustee (if any);

to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.

• Rule: court will not make order unless satisfied that in all circumstances it is just and equitable to make the order: s 79(2) FLA.

  • (What is just and equitable cannot be determined unless the court considers the s 79(4) two steps: Neale)

• Process: After determining what interests are held by the parties, there are two steps in determining what order should be made about property interests: first, the court considers contributions retrospectively (s 79(4)(a)-(c)); and second, the court considers the current and prospective economic positions of parties (s 79(4)(e) and thus s 75(2); s 79(4)(d)-(g) including s 79(4)(e) and thus s 75(2)). (Mallet)

• Consider entire relationship: Kowalski. “A more logical and consistent approach is one which is based on the proposition that once a marriage has been celebrated between the parties, the entire relationship between the parties whether arising out of the contributions before, during or after the formal tie of marriage wa entered into or dissolved, falls within the ambit of Pt VIIII of the FLA. Principle explains why contributions made between cohabitants who later marry are judged according to the criteria set out in the FLA and not

• No rule as to whether to take a global approach or asset-by-asset approach – but often make more sense to take a global approach: Act doesn’t tell the trial judge what to do. TO that extent it’s up to the trial judge’s discretion as to what is the appropriate way to proceed. BUT the HCA said that a global approach would make more sense unless there is some reason to single out particular assets: Norbis

  • For example: if someone had a considerable amount of money before marriage that would be significant or sometimes things happen after separatin that would have significance. Or in doctor and nurse case the fact that he had an inheritance tipped the balance.

• Parties have a duty to disclose: Weier. If someone fails in their duty to disclose all assets that could be a reason to overturn an order if it’s already been made or if its during the trial judge’s proceedings and it’s fairly clear that one is lying the court can take a robust view in making an assessment of what assets exist and making orders accordingly.

• Time of valuation is generally at time of hearing: Wardman.

• Short marriages: if short marriage and nothing much happened in terms of acquiring assets then court may try to put parties back before they were married: Anastasio . However there is no definition of a short marriage and this is just a common sense approach.

• Orders can be made for children: Doughterty. (Rare case where there is a family farm and 1 children forwent job and education to stay on farm so court considered it just and euiqtable to make an order to split property for H and W and adult child.)

Cases:

• Informal agreement doesn’t prevent later proceedings: Neale . Although may be unfair have to consider s79(4).

Statute:

• Financial contribution to acquisition or improvement to property: the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them: s 79(4)(a)
  and

• contribution other than financial contribution to property: the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of...