Carney & Carney (No. 2) 2019 FCCA 1275

The case of Carney & Carney (No. 2) [2019] FCCA 1275 expands the jurisprudence surrounding the later life property settlement.

It was a case litigated by the wife’s litigation guardian and the husband’s estate.

The parties married in 1989, the separated when the husband was admitted to a nursing home.

The Applicant wife sought $490,000 from sale proceeds and the Respondent estate sought to pay $300,000 from the house proceeds.

The wife, at the time of the decision, was 93, and the husband was 93 at the time of his death.  The husband and wife had both been married before and he had six children from his first marriage, including the representatives of his estate litigating against the Applicant.

The wife had three children from her first marriage.

During the course of the relationship, the husband introduced a property and the wife owned a house in the same street.  She was a widow and he was a widower.

During the course of their marriage, the husband received an inheritance of $49,500 from his mother, and the wife said that she had received a gift of $30,000 from her brother. She received a further sum of $208,081 from her brother’s estate and placed $142,500 into a term deposit.

The husband’s Will provided the wife with a life tenancy in the former matrimonial home and upon her death, a distribution of the proceeds between his children.

The house was in the husband’s sole name and the wife registered a caveat on the title of the home. The wife commenced proceedings seeking that the husband transfer to her 50% of the former matrimonial home or the equivalent value.

The husband, at that time, sought the dismissal of the wife’s application on the basis that they were still married.

The wife applied the inheritance monies that she received from her late brother’s estate towards acquiring a place in a retirement village for a cost of $210,000.

The former matrimonial home was sold for $935,000.

The wife had deposed to spending monies from her inheritance on renovating within the former matrimonial home and spending between $8,000 and $10,000.

The wife sought to rely on Rule 15.29A of the Federal Circuit Court so that her material could be admitted into evidence without her being subject to cross-examination. The court referred to section 64 of the Federal Circuit Court Act.

The Trial Judge exercised a discretion in favour of the wife to permit reliance on the documents.

The court considered section 79(8) of the Family Law Act which deals with a situation where one party has died after the commencement of proceedings.

The Applicant carried the onus in such a situation.

The court has to consider whether it would have been just and equitable to make an order had the party not died and whether the party having died, it remained just and equitable. (Stanford & Stanford at paragraph [24]).

In the property pool, the wife’s legal fees were agreed to be an addback and the Respondents contended there was $52,000 of “unaccounted for monies” in the hands of the wife.

An area of contention which is certainly of interest to this writer is the court’s treatment of refundable component of the nursing home fees. It had been placed on the balance sheet as a financial resource.

The court referred to Hall & Hall, a 2016 High Court case, and said:

“The reference to financial resources in the context of section 75(2)(b) has long been correctly interpreted by the Family Court to refer to a source of financial support which a party can reasonably expect will be available to him or her to supply a financial need or deficiency.  The requirement that the financial resource be that of a party no doubt implies that the source of financial support be one on which the party is capable of drawing. It must involve something more than an expectation of benevolence on the party of another. But it goes too far to suggest the party must control the source of financial support.  Thus, it has long correctly been recognised that a nomination beneficiary of a discretionary trust who has no control over the trustee but who has a reasonable expectation that the trustee’s discretion will be exercised in his or her favour as a financial resource to the extent of that expectation.  Whether a potential source of financial support amounts to a financial resource of a party turns in most cases on a factual enquiry as to whether or not support from that source could reasonably be expected to be forthcoming were the party to call on it.”

The court determined that the refundable accommodation deposit was an asset and should be included in the asset pool but not as a financial resource.

There was a discussion about some unaccounted for funds, and then the court considered whether it was still just and equitable after the husband’s death to make adjustment orders.

The court determined overall that the contributions of the parties were equal, taking into account a long marriage, each had brought funds in, each sides of the family had improved the value of the home.

The court acknowledged that the death of a party generally results in a more favourable property settlement to the surviving party.

The court gave the wife an adjustment of 10%.

The writer instructed in a case on behalf of an estate in which there was no additional s.75(2) factor adjustments to the surviving spouse as a result of the income that was available to him from the assets that he retained.  There is not always an additional adjustment for s.75(2) factors.