A recent decision of the High Court of Australia overturned a decision allowing a child of a marriage to apply for a property settlement on behalf of her mother.

The husband and wife were married in 1971 and had been married for 37 years. Their marriage was a second marriage and each had children from their first marriage. The former matrimonial home which they had shared for 37 years was registered only in the husband’s name when it was transferred to him by his former wife under a property settlement.

The husband made a Will in 1995 providing a life tenancy in the house to his wife but otherwise left his estate to his children. In 2005, the Wife made a Will leaving her estate to her children.

The wife suffered a stroke in December 2008 and was admitted to full time residential care. She eventually developed dementia. The husband continued to provide financial support for her.

In 2009, the wife’s daughter (as the wife’s case guardian) applied for orders in the Federal Magistrates Court for orders under the Family Law Act. The orders sought included a sale of the former matrimonial home and an even division of the proceeds between the husband and wife. Initially, the Federal Magistrate decided that there should be a division of 57.5% to the husband and 42.5% to the wife. The Federal Magistrate ordered the husband to pay to the wife the sum $612,931.00.

The husband appealed to the Full Court of the Family Court of Australia. After the appeal had been heard, but before the judgment of the Full Court, the wife died. The Full Court allowed the appeal. The Full Court found that it was an “intact marriage” and said that it was “difficult to ascertain the reason why the Magistrate came to her conclusion given the wife did not have a need for a property settlement as such and that her reasonable needs could be met in other ways particularly by maintenance”.

However, the Full Court then went on to make orders that, when the husband died, the sum which had been fixed by the Magistrate of 42.5% be paid to the wife’s legal personal representatives.

The husband appealed to the High Court. In allowing the appeal the High Court said:

“No basis was identified at first instance, on appeal to the Full Court, or in argument in this Court, for concluding that it was just and equitable to make any order dividing the parties’ property between them. It was not shown that the wife’s needs during her life were not being or would not be met. The legal personal representatives of the Wife supported the Full Court’s reasoning but pointed to no additional consideration as bearing upon this question.

It was not shown that, had the wife not died, it would have been just and equitable to make a property settlement order. It follows that it was not open to the Full Court to find that it was still appropriate to make an order with respect to property”

Peninsula Solicitors ..…Criminal Law..…Family Law…..Conveyancing…..Financial Services..…Estate Planning…..Central Coast Legal Services