Author: Carol Pages, Pages Family Law.

Couples can enter into financial agreements before, during or after their marriage or defacto relationship.  When prepared before or during the relationship, the aim is typically that each party will have certainty about the division of their assets if their relationship breaks down.  Financial agreements can be attractive where the parties have unequal wealth, or where one or both parties would like to protect assets for children of a previous relationship, or both.

Separately, the starting position at law in whether or not to divide assets in a property settlement application is:

1. to identify the existing property of the parties, then
2. considering whether any order adjusting those property interests would be just an equitable in the circumstances of the case.  

For example, changing the ownership of an asset from one party to the other.

In summary, the simple fact of a relationship does not automatically result in an entitlement to a property division.

In the recent case of Min & Orton (No 3) [2024] FedCFamC1F 387 (6 June 2024) the Court considered both of the above issues – financial agreement and whether it was just and equitable to make a property order.

Background

The financial agreement was entered into before the parties started living together.  They lived together, and later married.  

In earlier litigation, the Court found that the financial agreement was not binding, and ceased to operate upon the marriage of the parties.  The husband’s attempts to rectify the agreement arguing that both he and the wife had a common intention that the financial agreement continue, was unsuccessful.

As the financial agreement did not apply, the wife was able to make an application to the Court for a property settlement.

The wife was 54 and the husband 73 at the time of the hearing.  Their relationship was for 7 years.  The parties had no children.  The net property pool was just over $7,000,000, the wife held just over $970,000 of those assets, which equated to 14%. The husband held the remaining 86%.

Relevant facts included:

• – the parties continued to keep their finances separate (as they had set out in the financial agreement);
• – the husband wanted to protect his assets from his daughters, and a condition of entering into the relationship in his view was for their financial affairs to be separate;
• – it was a relatively short relationship with no children;
• – the husband brought the overwhelming majority of the assets into the relationship;
• – the husband made almost all of the financial contributions of the relationship;
• – there was no intermingling of assets;
• – although there were some contributions by the wife for homemaking and assistance in the husband’s business this was nominal and ‘modest’ in the Court’s view.

What the court said

• – that leaving the current assets of the parties undisturbed would be just and equitable (in other words, each party keeps their own);
• – as an alternative, that if the Court were to follow the process of assessing contributions and future needs, that the wife’s contributions would be assessed as 12%, and her future needs adjustment would result in an additional 2%, again supporting the 14% of the net pool already in her possession.

Summary

It is important to receive advice relevant to your circumstances.  

For example, if you have a financial agreement for your de facto relationship, it is important that this either clearly states that it applies in the future if you choose to marry, or that you will enter into a new financial agreement if you do marry.

Alternatively, if you would like to make an application to the Court for a property division, it is important to receive advice about your likely range of settlement, and your recommended steps both before and during Court proceedings.

_________________________________

The content of this article is provided for information purposes only and does not constitute legal advice.  We recommend that you seek legal advice relevant to your own circumstances and we would be happy to assist you.

Carol Pages of Pages Family Law is an Accredited Specialist in Family Law.  If you would like advice about your own separation, please contact Pages Family Law at info@pagesfamilylaw.com.au or on 03 9121 8077.