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Continuation of family law property settlement proceedings after the death of a party

Erdem v Ozsoy reviews the law regarding the continuation of family law property settlement proceedings after the death of a party. This case involves a husband and wife who separated and lived separately prior to the commencement of property settlement proceedings. Proceedings were commenced in November 2009 and the wife died of cancer in 2011 prior to the finalisation of proceedings.

Section 79(8)(b) and 79(2) of the Family Law Act  (‘the Act’) require the court considering an application for a property settlement order, which is continued by or against the legal personal representative of a deceased party, to determine:

1.       whether it would have made an order with respect to property if the deceased party had not died; and

2.       whether despite the death, it is still appropriate, just and equitable to make an order.

It is important to note that the continuing claim remains a matrimonial cause of action and does not metamorphose into a claim by the beneficiaries of the estate of the deceased party. The Court must ignore the claims of the beneficiaries of the deceased party’s estate.

Would the court have made an order with respect to property had the deceased party not died?

The Court must be satisfied that at the time of the death, the deceased spouse had a good cause of action for an order under the relevant section, in respect of which s/he had invoked the Court’s jurisdiction before his/her death. It is sufficient if the Court is of the opinion that it would have made an order with respect to property if the death had not occurred, not necessarily the precise order requested.

In this case, the husband and the wife had separated well before the commencement of property settlement proceedings. Therefore, the assumptions that underpinned the property arrangements that they had made during their cohabitation had been “brought to an end by the voluntary severance of the mutuality of the relationship”. It therefore follows that the court would have made an order.

Is it still appropriate to make an order?

The onus of establishing that it is still appropriate to make a property order rests on the party who is seeking the order. Factors considered in this case in determining whether it was still appropriate to make an order were:

  • whether there is any consequence of the death of the party on the financial position of the surviving party (e.g.. such as a property in joint names reverting to the surviving party); and
  • the fact the deceased party does not have any continuing maintenance needs for themselves after death.

The Court found that the intermingling of the wife’s financial arrangements with those of her family members dictated that it would be neither just nor equitable to ignore monies to which the wife would ordinarily have been entitled. Furthermore, given the husband had more than enough assets to ensure a division of property on the basis that the court had found, the husband’s financial security was assured, and therefore it was still appropriate to make the order.

The Court has the power under section 75(2) of the Actto make an adjustment to a party’s property settlement entitlement in order to take account of, among other things, both parties’ future needs and earning capacity. This is because the Court’s jurisdiction provides relief and rulings to the parties and not in regard to the property they hold. The Court found in this case that it was appropriate to make a section 75(2) adjustment in the surviving parties favour due to the death of the other party. To refuse to make an adjustment in the present proceedings would be to run the risk of making orders which are neither just nor equitable.

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