The initial separation:
Pierce and Chloe had been married for 17 years. On 7 May 2006 they decided to separate. At the time Pierce and Chloe jointly owned two properties and each had their own vehicle, share portfolio and superannuation. Chloe was working as a dental assistant and Pierce was a self-employed plumber.
Pierce and Chloe were able to negotiate an agreement as to how their property was going to be divided between them. Prior to negotiating, the properties and the business were valued by experts to ensure accurate values of those assets were used for negotiations.
An agreement reached and formalised by way of Consent Orders in the Family Court. The orders were on 23 August 2006. When final property settlement orders are made by the court, they are considered to be in full and final settlement. There are only limited circumstances in which the orders can be set aside.
The orders provided for Pierce to retain one property, his vehicle, shares, superannuation and business. He was also required to pay Chloe the sum of $175,000. On top of the payout, Chloe retained one property, her vehicle, shares and superannuation. Pierce and Chloe did everything required to effect to the orders.
On 22 March 2007 Pierce and Chloe decided to get back together. As they had not yet been separated for more than 12 months, neither had applied for a divorce. Pierce moved into Chloe’s property and they resumed living as a married couple. Although Pierce and Chloe carried out the terms of the property orders, they quickly recommenced combining their finances and purchasing joint assets.
The second split:
On 3 January 2019 they separated again. Since reconciling in March 2007 they had purchased another property held in joint names and opened a joint bank account. Chloe had also ceased working as a dental assistant to work for Pierce’s business, doing the book keeping and marketing. Upon separation Chloe ceased working for the business and became unemployed.
What happens to their property settlement?
The period of reconciliation after the orders made in 2007 is 12 years. Pursuant to the orders made in 2007, Pierce and Chloe had divided their property by agreement based on the circumstances at the time. Given they have reconciled and separated, they will again need to address the issue of property settlement. An adjustment of property interests will be required as they have jointly held property.
As there are already property settlement orders in place from 2007, the parties will need to:
- Agree to new orders (replacing the initial orders)
- Enter into a Binding Financial Agreement finalising property settlement
- Seek court intervention to resolve the matter
If court intervention is required, an application will need to be made to the court to set aside the 2007 orders.
For final property orders to be set aside one of the following must be established:
- The parties consent to the orders being set aside; or
- 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; or
- 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; or
- 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; or
- 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, 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; or
- 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.
If one of these grounds is established, the court has the discretion to either set aside the order or vary it, if appropriate.
Binding Financial Agreement (Prenuptial Agreements)
If you have separated and entered into final property orders, and then reconciled and want to avoid going through the property settlement process as set out in the Family Law Act 1975 you could enter into a Binding Financial Agreement. The Binding Financial Agreement would provide for how the property division is to be carried out in the event you and your partner separate again.