FLANAGAN & SOBEK (DECEASED)

Case [2014] FamCA 696

FAMILY COURT OF AUSTRALIA

FLANAGAN & SOBEK (DECEASED) [2014] FamCA 696

FAMILY LAW – PRACTICE AND PROCEDURE – Where the respondent died during the pendency of these proceedings and the executrix of his deceased estate was substituted for the deceased as the respondent.

FAMILY LAW – PROPERTY SETTLEMENT – Death of a party – Where the proceedings concern the alteration of property interests of two former de facto spouses, one of whom is deceased – Discussion of the statutory tests in s 90SM(8)(b) of the Family Law Act and its interaction with s 90SM(3) – Where ss 90SM(8)(b) and 90SM(3) are satisfied – Where it would have been just and equitable to make property settlement orders had the deceased not died, and still is despite his death.

FAMILY LAW – PROPERTY SETTLEMENT – Where an application for alteration of property interests takes priority over the claims of the beneficiaries upon the deceased estate – Where significant weight attached to the disparate initial contributions of the parties, which were not eroded by their subsequent contributions during the relationship, which are regarded as equal – Where the applicant received a large inheritance after separation and that inheritance is not quarantined – Where the deceased estate dissipated funds to pay for legal fees incurred in these proceedings – Where the applicant has limited capacity to obtain future gainful employment and will have sole and exclusive responsibility for raising the parties’ two children – Applicant entitled to 67.5 per cent of the net assets collectively held by her and the deceased estate – Applicant to be paid the ordered amount out of the deceased estate.
Family Law Act 1975 (Cth) ss 79, 90SF, 90SM, 117
Beklar & Beklar [2013] FamCA 327
Bevan & Bevan [2013] FamCAFC 116
Bourke & Bourke [1998] FamCA 69
Browne v Green (1999) FLC 92-873
Chorn v Hopkins (2004) FLC 93-204; (2004) 32 Fam LR 518
Fisher v Fisher (1986) 161 CLR 438
Grace v Grace [2012] NSWSC 976
Macedonian Church v Eminence Petar (2008) 237 CLR 66
Marriage of Bonnici (1992) FLC 92-272; (1991) 15 Fam LR 138
Marriage of Burke (1992) 16 Fam LR 324; (1993) FLC 92-356
Marriage of Coghlan (2005) 33 Fam LR 414; (2005) FLC 93-220
Marriage of Figgins (2002) 29 Fam LR 544; (2002) FLC 93-122
Marriage of Love (1993) 17 Fam LR 263; (1994) FLC 92-441
Marriage of Mason (1993) 17 Fam LR 269; (1994) FLC 92-446
Marriage of Wall (2002) 29 Fam LR 1; (2002) FLC 93-110
North v North; Public Trustee of NSW (Intervener) (1987) FLC 91-831
Parrott v Public Trustee of NSW (1993) 17 Fam LR 785; (1994) FLC 92-473
Pierce v Pierce (1999) FLC 92-844; (1998) 24 Fam LR 377
Stanfordv Stanford (2012) 247 CLR 108
W & W [2000] FamCA 1302
APPLICANT: Ms Flanagan
FIRST RESPONDENT: Mr Sobek (Deceased)
SECOND RESPONDENT: Ms Leoni
FILE NUMBER: NCC 2659 of 2012
DATE DELIVERED: 28 August 2014
PLACE DELIVERED: Newcastle
PLACE HEARD: Newcastle
JUDGMENT OF: Justice Austin
HEARING DATE:

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AGLC
FLANAGAN & SOBEK (DECEASED) [2014] FamCA 696
Case
[2014] FamCA 696
Decision Date

CaseChat Overview and Summary

This matter concerned an application for the alteration of property interests between two former de facto spouses, where the respondent, Mr Sobek, died during the proceedings. The executrix of his deceased estate was substituted as the respondent. The proceedings were brought under Part VIIIAB of the *Family Law Act 1975* (Cth).

The court was required to determine whether it was just and equitable to make property settlement orders despite the death of one of the parties, and how the parties' respective contributions and post-separation financial circumstances should be weighed in the division of assets. Specifically, the court considered the application of sections 90SM(3) and 90SM(8)(b) of the *Family Law Act*, and whether the applicant's inheritance received after separation should be quarantined from the property pool.

Justice Austin found that the statutory tests under sections 90SM(3) and 90SM(8)(b) of the *Family Law Act* were satisfied, meaning it remained just and equitable to make orders despite Mr Sobek's death. The court attached significant weight to the disparate initial contributions of the parties, which were not eroded by their subsequent equal contributions during the relationship. The court also determined that an inheritance received by the applicant after separation was not quarantined. The court noted that the deceased estate had dissipated funds paying for legal fees in these proceedings. The applicant was found to have limited capacity for future gainful employment and would have sole responsibility for the parties' two children.

The court ordered that the applicant receive 67.5 per cent of the net assets collectively held by her and the deceased estate. The executrix was ordered to pay the applicant the sum of $165,953 from the estate. The applicant was declared the sole legal and beneficial owner of assets in her possession, and the executrix was to be the sole legal owner of all other estate assets, subject to the beneficiaries' interests. Each party was to be solely liable for debts relating to assets in their possession. Costs were reserved.

Orders

Orders of the court

1.

By way of alteration of property interests pursuant to Part VIIIAB of the Family Law Act, the respondent shall forthwith do all acts and things necessary, in her capacity as executrix of the estate of the late Mr Sobek, to pay to the applicant the sum of $165,953 from the estate.

2.

Upon payment in full pursuant to Order 1 hereof, the respondent, in her capacity as executrix of the estate of the late Mr Sobek, shall be:

(a) The sole legal owner (as between the parties) of all other estate assets, subject to the beneficial interests of the beneficiaries in the estate; and

(b) Solely liable for and shall indemnify the applicant against any and all debts attaching or relating to the property of the estate, any debts owed by the estate, and any debts incurred by her on behalf of the estate.

3.

The applicant is the sole legal and beneficial owner (as between the parties) of all assets in her possession, including but not limited to:

(a) The real property and improvements comprising Folio Identifier …, being the property known as V Street, Town C, NSW;

(b) The … Ford Focus car;

(c) All bank accounts and other investments held in her name; and

(d) Her superannuation interest held with First State Super.

4.

The applicant is solely liable for and shall indemnify the respondent against any and all debts attaching or relating to the property in her possession and any debts in her name.

5.

In the event of either party refusing or neglecting to sign within 7 days of a written request to do so any document necessary to implement the terms of these orders the Registrar of the Family Court of Australia at Newcastle is empowered to execute such documents on behalf of the parties pursuant to s.106A of the Family Law Act.

6.

Costs are reserved for 28 days.

7.

Any and all other outstanding applications are dismissed.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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