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Death does not mean the end

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Once a Family Court property case has started, the death of one or the other of the parties to the case does not mean that the case comes to an end.  The important question, however, is whether or not the death of that party has an impact on the final outcome of the trial.

When dividing property between spouses, the Court must have regard to four main factors:

  1. What did each of the parties contribute at the commencement of the relationship?
  2. What did each of the parties contribute during the relationship, not only from a financial point of view, but also from a homemaking and parenting perspective?
  3. What are each of the parties’ future needs or Section 75(2) factors?, and then
  4. Having reached a result, is it fair and equitable in all the circumstances?

In a recent case of Van Den Linden & Kordell (Kordell), the Wife died in the middle of the proceedings, and there was then a difference in opinion between her estate/legal representatives and those of the Husband, as to what adjustment should be made for any Section 75(2) factors in circumstances where the Wife was deceased, rather than alive.

At first instance, the Trial Judge determined that the Husband should receive a 70/30 split; 60/40 based on his contributions to the relationship, and a further 10% based on his future needs, or Section 75(2) factors.  The Husband appealed this decision, believing he should receive more, or a greater percentage, for future needs.  This argument was based largely on the fact that the Wife’s estate had no future needs, and reference was made on his behalf to several cases where it has been held that “the death of one party has a profound effect on the balance of Section 75(2) factors”.

Although recognizing this principle, the Full Court also said that “[the death of a party] should not detract from the need to recognize the entitlement of the deceased spouse… arising from a consideration of the respective contributions of the parties”.

In another case of Menzies & Evans His Honour Justice Smithers found that although the existence of Section 75(2) factors on the one side and the lack thereof on the other was significant, he said that “this aspect of the case should be of moderate significance only however in view of the amount of the assets, the age of the Husband, and the extent of his future needs”, and he found that extensive contributions made over a lengthy marriage were of the utmost significance in determining the matter.

A further factor raised on behalf of the Husband in Kordell was that the Husband had the full-time care, and financial responsibility for, the two children of the marriage.  The Full Court accepted this factor as relevant, although noted the necessity to be careful in taking the future maintenance needs of children into account when determining a property settlement between a husband and wife.

Making reference to the case of Steinbrenner & Steinbrenner, the Full Court expressed the view that “the assessment of the relevant factors arising under Section 75(2)…inevitably moves from a ‘qualitative evaluation’ of those factors to a ‘quantitative reflection’ of such evaluation, there will inevitably be a leap from words to figures”.  They found that “that is the nature of the exercise of discretion”, which they found the Trial Judge had exercised properly in this case, not falling “beyond the ambit of a reasonable exercise of discretion”.  The Husband’s Appeal was dismissed.

Section 75(2) is a particularly important section of the Family Law Act, relevant to the determination of all property settlement cases, and each case will be different.  It is only with the experience of a specialist family lawyer that the weight to be attached to these future needs can be properly assessed.

Contact one of our family lawyers for a confidential discussion regarding your family law questions.

Author:  Rebecca Badenoch

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