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In most cases, it is easy to assume that where parties have been in a long recognised legal relationship, whether married or de-facto, that the parties had embarked on a joint endeavour which included their respective financial affairs. It then follows that upon separation, a property settlement should occur. In the majority of cases this will be the approach taken by the Court.
However, following the High Court decision of Stanford v Stanford  HCA 52, when determining property matters, the Court must first determine that it would be just and equitable to make a property adjustment between the parties. The recent Full Court decision of Chancellor & McCoy  FamCAFC 256 has helped to clarify situations where it may not be appropriate, or in other words not just and equitable, to make any adjustment. This decision involved a same sex couple who had been in a de facto relationship for approximately 27 years. At the end of the relationship, the Applicant had net assets of $720,000, whilst the Respondent had net assets of $1,700,000. The Applicant submitted that the relationship was a long relationship and that both parties had contributed to the de-facto matrimonial pool.
In finding that it was not just and equitable to make any division, Judge Turner relied on the following facts:-
Interestingly, Judge Turner noted “the payment of monies by [the appellant] to [the respondent] of $100 to $120 per fortnight for most of the relationship, whether classified as mortgage repayments [the appellant’s terminology] or rent or board [the respondent’s terminology], I find, given the small amount of payment in respect to the overall size of the pool accumulated by [the respondent], cannot be viewed as financial intermingling, but as financial assistance to the other party as the home owner who provided housing for the parties to live during the entirety of the relationship.” [paragraph 27 c]
Judge Turner also noted that whether the separation of finances was initially conscious or subconscious was irrelevant, what was important was that the parties continued to conduct their relationship without intermingling their finances for the entirety of their relationship.
The decision of Chancellor & McCoy  FamCAFC 256 is an example of where parties have able to retain their respective assets without a Financial Agreement.It should be noted that this fact scenario is rare. In most cases, the Court will likely find that it is just and equitable to make a property adjustment between the parties. As a family lawyer, I advise my clients to consider the ramifications of intermingling financial affairs with their partners. Parties who wish to retain control over their respective property and assets after they separate should still consider entering into a Financial Agreement. A Financial Agreement is a legally binding document that outlines how a couple would like their assets divided in the event of separation. A key benefit to a Financial Agreement is that it removes the Court’s power to determine how your assets will be divided.
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