What is my partner entitled to if we split?

A common question we are asked by our clients is – what is my partner entitled to if we split?

There is no automatic right to a property settlement with your ex-partner in Australia. The cases are clear that the purpose of section 79(2) of the Family Law Act is to ensure that the Court’s power is not exercised in an unprincipled fashion. There must be a principled reason to interfere with the existing legal and equitable interests of the parties in their property. In other words, the Court will not alter the rights of parties in property unless it is just and equitable to do so and the alteration of property interests goes no further than the justice of the matter demands.

To learn more about the meaning of ‘just and equitable’ and when the court will consider that it is just and equitable to alter the interests of parties in property, read our article: What is just and equitable? 

To learn more about how to protect your assets in a relationship, read our article: Tips to protect your assets in a De Facto relationship. The tips equally apply to you if you are married.

Can I protect my assets by keeping finances and assets separate?

A mutually informed decision of both parties to keep finances and assets separate is relevant when a court is determining whether it is just and equitable to make an order altering the parties interests in property, but it is certainly not determinative. It depends on all the circumstances of the case.

Oamra & Williams – A mutually informed decision by both parties to keep assets and finances separate is not determinative

In the case of Oamra & Williams [2021] FamAFC 117 – The wife filed an appeal against the order of the Trial Judge that the property pool be divided 55%/45% in favour of the Wife.

The wife appealed on the basis that it was not just and equitable to make an order altering the interests of the parties in their property.

The circumstances of the relationship were as follows:

1. The parties cohabited from 1998/1999, married in 2004 and separated in 2007 (relationship 18 years);
2. There were 4 children of the relationship who at the time of the Hearing were 18, 16, 14 and 12; The children lived with the Wife and there were consent orders made by the Court that they spend time with the Father in accordance with their wishes;
3. The parties made the mutual decision to keep their finances and assets separate;
4. The relationship was unusual in that neither owned joint property, there were no joint bank accounts and the parties contributed to household expenses in a structured way based on an agreed budget;
5. The Wife’s evidence was that the parties deliberately and meticulously kept their finances separate and that the parties made their own decisions as to how to use their income and made investment choices without reference to each other.

The trial judge rejected the Wife’s submission that it was not just and equitable to make an order and ordered that the property pool be divided 55% to the Wife and 45% to the Husband based on the Wife’s greater financial contributions. There was no future needs adjustment. This resulted in a cash payment by the Wife to the Husband of $275,000, with the Wife to keep the property in her name.

The Wife appealed. The Wife’s primary argument on appeal was that the Court should have found that it was not just and equitable to make any order altering the interests of the parties in their property given the manner in which the parties voluntarily arranged their financial circumstances. She alleged there was an express or implied presumption that the parties would keep their own property separate. The Wife also challenged the Trial Judge’s determination of the contributions of the parties, treatment tax & legal fees. The wife asserted that the Trial Judge erroneously required that the assumptions be “mutual” and that error contaminated the trial judge’s decision as to whether it was “just and equitable” to make an order. The Wife argued that there was no warrant to read into the obiter dicta of the High Court in Stanford, any requirement for mutuality in any stated or unstated assumptions that the parties would keep their finances entirely separate and to separately retain the benefits of their efforts to the exclusion of the other. Finally, the Wife argued that the Trial Judge failed to give adequate reasons to support that there was a principled reason to interfere with the current legal & equitable interests of the parties.

The primary issues for determination on the appeal were:

1. Whether it was just and equitable to make any property settlement order,
2. Whether there needed to be mutuality in any stated or unstated assumptions that the parties would keep their finances entirely separate and to separately retain the benefits of their efforts to the exclusion of the other.

The Appeal Court considered the Trial Judge’s findings and in rejecting the Wife’s appeal, held as follows:

•  A consideration of whether it is just & equitable to make an order will potentially be informed by the circumstances which gave rise to those arrangements between the parties.
• It was common ground that both parties made a mutual informed decision to keep property & finances separate. This is important as the court distinguished a case where the decision to keep finances separate and to acquire property in one party’s name solely is imposed on the other.
• Even where it is established (as here) that the parties made a mutual, informed decision to keep finances separate, that does not necessarily lead to an automatic conclusion that it is not just and equitable to make an order altering the interests of the parties in their property. The determination must be made in the context of all the circumstances of the case.
• The Trial Judge rejected the Wife’s submission that there was an absence of joint financial decision making and sharing of financial information and held there must be mutuality in the assumption that the parties would keep finances separate and to separately retain the benefits of their efforts to the exclusion of the other.
• The Trial Judge held there was an express agreement that the purchase of property was to provide for the joint future of the parties and the children. The fact that the Husband nominated his children to take his super didn’t change that.
• The Trial Judge was correct in stating that mutually informed & consensual assumptions may be relevant to the enquiry of whether it is just and equitable to make an order but that doesn’t lead to the automatic conclusion that it is not just and equitable to make an order altering the interests of the parties in their property and the determination must be made in the context of all the circumstances.
• Upheld Trial Judge finding that there must be mutuality in the assumption that the parties would keep their finances separate and to separately retain the benefits of their efforts to the exclusion of the other.
• Held the Trial Judge was correct in rejecting the Wife’s submission and the Wife could not rely on unilateral unstated assumptions.
• The Trial Judge gave adequate reasons to satisfy the standard of giving principled reasons why it was just and equitable to alter the parties interests in their property through the finding, for example, that the purchase of the property would be for the future benefit of both parties.
• Regarding the reference in Stanford to the ‘common use’ of property and the express/implied assumptions about the property arrangements that are brought to an end by separation – the Court held that the “use” of property during cohabitation is not confined to a legal or equitable entitlement to use property. The reference in Stanford to ‘use’ contemplates a long relationship where a party has made significant contributions under s74(1)(c) but has no legal or equitable entitlement to use the property which the parties have been using during the relationship.

What have we learned regarding the question – what is my partner is entitled to if we split?

The lesson to be learned in this case is that a mutual decision by the parties to keep their finances and assets separate does not automatically lead to a conclusion that it is not just and equitable to alter the interests of the parties in their property. The determination must be made in all the circumstances of the case. There must be mutuality in the assumption that the parties will keep their finances and assets separate and to retain the benefits of their efforts to the exclusion of the other. A party cannot rely upon unilateral unstated assumptions that this is what will occur.

Are you unsure as to the question – what is my partner entitled to if we split?

If you are considering separating, seek advice promptly so you can make smart decisions following separation that will save you time and money. Contact us to book a reduced rate initial consultation with one of our experienced Brisbane Family Lawyers and we will answer your question – what is my partner entitled to if we split.