FLANAGAN & SOBEK (DECEASED)

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.