De Facto Spouses Dispute Property Settlment
Uhlmann & Rosenthal [2022] FedCFamC2F 1582 (21 November 2022)
The parties are in a de facto relationship of approximately 14 years. The parties are in dispute over whether it is just and equitable to make an order for property settlement. The Court, in making its orders, assessed the parties' management of finances.
Facts
The applicant or the de facto husband, Mr Uhlmann (“the husband”) was born in 1956 and is currently 66 years of age. The respondent or the de facto wife, Ms Rosenthal (“the wife”) was born in 1957 and is 65 years of age. The wife says the parties commenced cohabitation in or about November 2003. The husband says 2006 although in both the Initiating Application filed 24 March 2021 and the Amended Initiating Application filed 17 February 2022, the husband asserts that cohabitation commenced in 2005. Each has adult children from former relationships who lived with the parties from time to time.
The husband says that pursuant to s 90SM (3) of the Act, it would not be just and equitable to make an order for division of property.
In the alternative, he seeks an order that provides for an alteration of superannuation accumulated during the relationship only.
When questioned as to what would happen with the self-managed super fund if the Court acceded to the husband’s primary position, the husband’s counsel said the parties would either continue to stay in the fund together or would deal with their interests in it by agreement between them.
The wife seeks the non-superannuation assets of the parties be divided 60% to the husband and 40% to the wife and that each party otherwise retain their respective superannuation interests.
The wife had the sole benefit of the proceeds of sale of her Suburb S property, of approximately $86,058 (“the proceeds of sale”).
The husband says the entirety of the proceeds of sale should be added back to the pool. The wife says that only $50,000 of the proceeds should be included in the pool, that being the approximate amount she paid to support her adult son but not the amounts that went to her legal fees or the $9,000 which remains in the savings account and is therefore already in the pool. The husband submits that the amount paid by the wife for legal fees is unknown.
Issue
Whether or not it is just and equitable to make an order for property settlement.
Applicable law
Family Law Act 1975 (Cth) s 90SM - authorises the Court following the breakdown of a de facto relationship to make such orders between the parties as it considers appropriate.
Bevan & Bevan [2013] FamCAFC 116; (2013) 279 FLR 1 - provides a structured process towards the ultimate requirement, which is to ensure that a property settlement order is only made when the Court is satisfied that it is just and equitable to do so, and that the terms of the order itself are also just and equitable.
Analysis
Assuming the Court is satisfied that it is just and equitable to make an order for property settlement, the Court must identify the parties' legal and equitable interests in the assets arising from their relationship, together with their liabilities. The Court should then assess each party's contributions during the relationship. The husband’s counsel conceded that it was not appropriate to include the husband’s Mastercard debt in the pool. With respect to the wife’s Motor Vehicle 2, counsel for the husband in his written submissions states that the husband seeks for it to be included in the pool but that it is a “button faintly pressed”.
During the trial the husband’s counsel called for the wife’s lawyers trust account and this was not answered. The Court is not required to add back the assets that were in existence when the matter was heard, as parties are not expected to enter a state of suspended economic animation following the breakdown of their relationship. The wife had sufficient income from which to meet her reasonable living expenses (as well as her adult son’s expenses if she so chose). This is even without the income of her tenant and despite the failure to include her additional expenses at item 32 of her financial statement.
Conclusion
Within 60 days of the making of Final Orders in the proceedings, the Applicant should pay the Respondent the sum of $506,133.60.
As to the Mr Uhlmann Family Trust:
- The Respondent should do all necessary acts and things and sign all necessary documents to:
- Transfer or assign to the Applicant or his nominee the Unpaid Present Entitlements standing to her credit in the sum of $23,868;
- Give effect to her removal as a beneficiary of the Trust.
- The Applicant should indemnify the Respondent and keep her forever so indemnified against any claim or liability of whatever nature arising out of the financial dealings of the Trust including but not limited to any liability for income tax whether such liability may relate to the past, present or future financial dealings of the Trust.
The Respondent should do all acts and things necessary to transfer to the Applicant all her right, title and interest in the party’s timeshare.
Except as otherwise provided in these Orders, the Applicant and the Respondent are each entitled to be the sole legal and beneficial owners of all items of property including money, motor vehicles, insurances, equities, superannuation entitlements and personal effects currently in the possession or control of each of them respectively.
