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Divorce House Ownership: Maintaining Separate Finances Could Mean That You Keep Your Home

Divorce House Ownership

Divorce House Ownership: Why Stated and Unstated Assumptions About Property Matter

In the vast majority of cases, the court will readily find that the parties held certain assumptions arising from their relationship concerning their property arrangements prior to the court’s involvement. This is significant because it will ordinarily constitute a basis for the court to exercise its power to make orders dividing the property of relationship. Zaruba & Zaruba [2017] FamCAFC 91 is a recent Full Court decision examining the question of when these assumptions might be absent from a particular relationship.

Background

The parties had separated their financial affairs roughly 30 years prior to the matter being brought before the Full Court. They had divorced for over 20 years and had not lived in the same home for roughly 10 years.

The main subject of the appeal related to two items of real estate valued at approximately $1,450,000. This blog shall focus on the court’s decision in relation to one of those properties – the Mindarie Property. The trial judge made orders in relation to the Mindarie property. Those orders were appealed on the basis that the trial judge did not have the power to make such orders.

Divorce House Ownership: Assumptions About the Use, Preservation and Improvement of Property Matter

The Full Court held that the trial judge did not have the power to make orders in relation to the Mindarie property. This determination was based on the Full Court’s finding that it would not be just and equitable to make such an order.

In determining whether it is just and equitable to make an order in relation to property, the court must consider the parties’ common assumptions, both stated and unstated, concerning the use and acquisition of the relevant party. The evidence before the court did not support the conclusion that there were any assumptions arising from the parties’ marital relationship concerning the acquisition, preservation, use or improvement of the Mindarie property. This finding was supported by the following.

First, the wife’s acquisition, preservation and improvement of the property bore no relationship to the husband. The wife was the sole registered owner of the property. And the property was acquired almost entirely from monies gifted to the wife by one of her friends, Mr S, and her mother.

Second, the parties’ had separated their financial affairs approximately 5 years prior to the wife purchasing the property. Additionally, construction commenced on the home that was ultimately built upon the property some 15 years after the parties had separated their finances.

Divorce House Ownership: Separate Finances for a Considerable Period of Time and The “Just and Equitable” Requirement

Zaruba & Zaruba [2017] FamCAFC 91 is the latest case in series of recent Full Court decisions that underscore the significance of maintaining separate finances to the question of whether it is just and equitable to make property orders. The trend seems to be that when parties to a property dispute maintain separate finances – especially for a considerable period of time – the court may be reluctant to make orders in relation to property affected by the financial separation.