Sunday, 28 June 2009

UK: Just because shares go up in value is not grounds to set aside property setlement

In the recent English case of Walkden, the wife sought to set aside property settlement because 2 months after the orders were made, the husband's shares quadrupled in value due to a takeover.

The English Court of Appeal held that she was stuck with the order.

The principles for setting aside a property order in Australia are different to those in England, but the result in Walkden would also be the result in Australia on those facts.

To set aside an order made under the Family Law Act, one must turn to section 79A of the Family Law Act.

Here I will digress briefly. Section 79A applies only to married couples. Property provisions of the Family Law Act apply to de facto couples but only:
  • if one or both of them are within any State or Territory other than Western Australia or South Australia
  • if they separated on or after 1 March 2009, or both consented to the Family law Act applying to them.

If they meet these technical requirements, then section 90SN applies to them. It has similar provisions to section 79A.

Except for consent arrangements, section 79A has a two step approach:


  1. Is there a ground available to set aside or vary the order?
  2. Should the court then exercise its discretion to set aside or vary the order?

The six grounds for setting aside property orders under the Family Law Act are:

  1. By consent: s.79A(1A)
  2. There has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance: s.79A(1)(a)
  3. In the circumstances that have arisen since the order was made it is impracticable for the order to be carried out or impracticable for a part of the order to be carried out: s.79A(1)(b)
  4. A person has defaulted in carrying out an obligation imposed on the person by the order and, in the circumstances that have arisen as a result of that default, it is just and equitable to vary the order or to set the order aside and make another order in substitution for the order: s.79A(1)(c)
  5. In the circumstances that have arisen since the making of the order, being circumstances of an exceptional nature relating to the care, welfare and development of a child of the marriage, the child or, where the applicant has caring responsibility for the child (as defined in subsection (1AA)), the applicant, will suffer hardship if the court does not vary the order or set the order aside and make another order in substitution for the order: s.79A(1)(d)
  6. A proceeds of crime order has been made covering property of the parties to the marriage or either of them, or a proceeds of crime order has been made against a party to the marriage:s.79A(1)(e)

The Full Court of the Family Court has made plain, time and time again, since the decision in Molier and Van Wyk (1980) that the miscarriage of justice, for example a change in property values, is at or before the time of the making of the orders, not afterwards:

"This Court ... considers that s 79A is intended to apply only to
circumstances occurring before or at the time of the making of the order. The
term 'miscarriage of justice' does not seem apt to apply to matters which arise
after the order has been made."

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