Sometimes I meet a person who happily tells me that they have “sorted” their property settlement with their ex, informally, “just between us”. No paperwork, no orders, no lawyers. “We just did what we agreed”. That might sound pretty good – but as a family lawyer, I see risk. A recent decision of the Full Court of the Family Court (Bevan and Bevan 2013) highlights again, the risk in relying upon informal settlements.
The facts are interesting, but some parts are probably not exceptional. The husband and wife had been married for 22 years and had two children. Their fortunes blossomed during the marriage but suffered serious challenge before separation in 1994. The downturn in their fortunes appeared to affect the husband significantly. The husband declared he would make a new and separate life elsewhere. He told the wife and other people that she could keep the Australian property. The husband then went to sea.
There was some intermingling of finances after 1994, but the wife dealt with the assets from the marriage, as she saw fit, including selling property and applying the proceeds without input from the husband. In the 10 years following separation, the parties had some holidays together and the husband contributed further lump sums to the parties’ accounts.
The parties divorced on 22 July 2010. An application for property settlement must be filed within 12 months of divorce. With 2 days to spare, and 17 years after separation, the husband filed for property settlement.
Imagine the most recent part of this ‘journey’ for the parties – the matter goes to trial in December 2012, Senior Counsel is engaged on both sides. None of the property at the trial was owned by either party at separation. Despite the long delay by the husband in bringing his application, and in the face of his repeated prior representations that the wife could “have it all”, the trial Judge makes an order for property adjustment between the parties.
The wife appeals. Senior Counsel is again engaged. In April 2013, the Full Court allowed the appeal but did not make a redetermination. Submissions were invited from counsel for both parties. And so the wait continued for these parties, some 19 years after they separated.
Hindsight is a wonderful thing. But we can be clear about this here and now: informal settlements are risky. People change their minds. What might have seemed ‘ok’ at one point may look ‘unfair’ later on. Financial circumstances change and the vicissitudes of life can fall heavily on one or both.
Reaching agreement at the end of your relationship about the division of your property is ideal. Be smart though. Get advice about the settlement and how to formalise it from specialist family lawyers. See it as an investment in certainty and management of risk. No doubt Mrs Bevan wished she had.
This article was published in B2B Magazine September 2013 (Issue 86) and can be read online here.
Di Simpson is a Director at Dobinson Davey Clifford Simpson Family Law Specialists, 18 Kendall Lane, New Acton, Canberra ACT 2601 and can be contacted on (02) 6212 7600.