Chancellor & Mccoy
In a recent decision of the Family Court of Chancellor & Mccoy, involving a same sex de facto relationship of 27 years, it was held that no property settlement order was just and equitable.
The Court denied an appeal from the finding of a Trial Judge that it was not ‘just and equitable’ to make an order altering the existing interests of the parties in their property as both parties had kept their financial affairs separate during the relationship.
This case has had an impact on the advice given by lawyers to separated couples in relationships where the parties remained financially independent.
Case Study – Chancellor & Mccoy, No property order
The parties commenced cohabitation in 1983 and separated in 2010. During the relationship, Mr Mccoy Purchased several properties in which the parties both lived. Whilst living at Mr Mccoy’s properties, Mr Chancellor contributed financially to the household and also assisted with labour in Mr Mccoy’s renovations to the properties. Mr Mccoy remained solely financially responsible for purchasing the properties, paying the mortgage and all renovation costs.
Mr Chancellor also purchased one property during the relationship with monies he received from his uncle, and the balance of the purchase price was provided through a mortgage in his sole name. Mr Chancellor rented this property to his sister for reduced rent, and was solely financially responsible for paying the mortgage.
After separation, Mr Chancellor received a large inheritance of cash and property from his uncle’s estate.
Mr Chancellor filed an application to the court seeking a property division on the basis that both parties contributed to the large property pool and it was therefore just and equitable for the court to make an order altering the interests of the parties in their property.
The interests of the parties in their property were similar but for Mr Mccoy started to make voluntary payments to his superannuation from 1999 by way of salary sacrifice. At the time of Trial, this had resulted in his assets being worth more than double that of Mr Chancellor.
Relying on principles stated by the High Court in the case of Stanford, in Chancellor & Mccoy no property order was made by the Court. The Judge held that it was not just and equitable to make a property settlement order due to the “lack of financial intertwining, the lack of financial planning for the future, the evident separation of finances and the continued individual ownership of property.”
In Chancellor & Mccoy, no property order was made for the following reasons:
- The parties conducted their financial affairs separately and there was no intermingling of finances (Mr Chancellor’s payments to Mr Mccoy while living at his property were considered financial assistance not intermingling);
- They did not have joint bank accounts;
- Each party was free to use their money as they chose;
- Each party retained property in their own name;
- They were responsible for their own debts;
- They were not involved in each others financial decision making or made aware of the others financial situation;
- Neither made significant improvements to the value of the other’s property (there was no evidence that the financial and non-financial contributions of Mr Chancellor to Mr Mccoy’s properties when assisting in renovating improved the value of these properties);
- Neither party made provision for the other through their will or life insurance.
- At the end of the relationship, Mr Chancellor was left with significant assets accumulated by him during the relationship, including two houses, several motor vehicles and superannuation.
- Mr Mccoy had retired by the time of trial and Mr Chancellor was still in employment and had the capacity to accumulate more assets and contribute to his superannuation fund.
The court decided in essence that the just and equitable outcome was that each party be allowed to keep the assets they had, without any adjustment.
This decision was appealed on numerous grounds including that the decision was manifestly outside the range of the reasonable ambit of discretion. All appeals were dismissed.
Chancellor & Mccoy, no property order – What have we learned?
In Chancellor & Mccoy, no property order was made after a relationship of 27 years. The Court in that case emphasised that there is no automatic right to a property settlement.
This case will not change anything for the majority of couples. It remains very rare for a court to find that parties to a relationship are not entitled to an order for the division of their property. In most circumstances, an order for the division of property will be considered just and equitable as most couples share the use of their property under certain assumptions that come to an end when the relationship ends.
However, Chancellor & Mccoy may have significant implications for couples who choose to remain financially independent.
If you are uncertain whether and what your entitlements are to a division of property following separation, you should seek legal advice.
Contact our Petrie family law expert Courtney Barton to discuss your individual circumstances and to determine your rights and entitlements. We will provide you with advice and a plan to help you move on with your life, quickly and cost effectively.