By Sharla Stevens
We recently posted about Binding Financial Agreements (BFAs) in Australia. Couples can choose to enter into a BFA either before they enter a de facto relationship or get married, while they are in a de facto relationship, during their marriage or after separation (for both de facto and married couples). BFAs entered into before or during a relationship outline how assets will be distributed in the event the relationship breaks down.
Having an enforceable agreement gives couples certainty as to the outcome of their property matters if they do separate, rather than having to go to Court.
Recently, there have been a few cases heard in the Family Courts where the Judges have dismissed one party’s application for property settlement orders and left the parties to each retain their own assets and be responsible for their own debts after separation, rather than making any adjustments for one party.
In the recent case of Chancellor & McCoy  FamCAFC 256 the original Judge determined that it would not be just and equitable to make any property orders, despite the couple having been in a 27 year same sex relationship. The decision was appealed but the Full Court of the Family Court of Appeal upheld the original Judge’s decision. In the original Judgement a checklist of sorts was given by the Judge as to why she decided it was not just and equitable to make property orders:
- No children;
- No intermingling of finances;
- No joint bank account;
- Each acquired assets in their own names;
- Each responsible for their own debts;
- Each could use their earnings as they chose and did not consult with each other;
- No joint financial information or decisions;
- No provision for the other in their wills in the event of death;
- Mutual ignorance of value of the other person’s assets;
- The applicant’s contributions did not improve the value of her ex-partner’s assets;
- Each could plan for their future given their profession and employment;
- Neither was hindered in their own financial decision making;
- There would have been unfairness that one party who had maximized her wealth should have to share it with a party who hadn’t;
- The applicant had accumulated assets and could accumulate more.
Although these factors are not determinative it does give an example of a long term relationship where the Court did not make any property settlement orders and what factors may be taken into account.
It may still be appropriate for couples to consider entering into a Binding Financial Agreement, though, to provide them with certainty as to what the outcome will be if they separate.
If you require assistance in relation to a Binding Financial Agreement or property settlement matters more generally please contact Cristina Huesch, Sharla Stevens or Angela Li at Alliance Family Law on (02) 6223 2400.