Saturday, 23 August 2008

Federal Magistrates Court: property settlement after death

Section 79(8) of the Family Law Act allows for property settlement proceedings to be continued after the death of a party.

In the recent Federal Magistrates Court case of Cornell v Stokes, the wife died before the proceedings had been completed. The husband, albeit ultimately unsuccessfully, argued that because the wife had died that he should not have to pay anything further to her estate.

Federal Magistrate Wilson considered the caselaw under s.79(8) and found that the following principles applied:

From the above authorities, I conclude that the appropriate way in which to deal with a case where one of the parties has died since the commencement of proceedings is as follows:

The party representing the deceased party to the marriage must demonstrate that, at the time of the death of the party so represented, the court would have made an order in favour of that party. In so doing, the party is not limited to the state of evidence at the date of death;

In reaching an opinion about that first prerequisite imposed by s.79(8)(b)(i) of the Act, the Court is not required to determine precisely what orders would have been made in that deceased party’s favour, just that an order would have been made in that party’s favour;

To reach that opinion, the Court must embark upon the exercise in s.79(4) of the Act;
Having determined that it would have made an order in the deceased party’s favour had he or she survived, the Court must then consider whether it is still appropriate to make an order;

In that regard, the Court’s discretion should not be exercised lightly, and should only be exercised in limited circumstances, so as to satisfy moral obligations that remain unsatisfied;

The deceased party to the marriage has a prima facie moral entitlement to his or her contributions based entitlements to matrimonial property;

The size of the pool and the needs of the surviving spouse, including s.75(2) factors must be taken into account in formulating any orders.

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