Court reverses a transaction after the husband’s death
The Federal Circuit and Family Court of Australia has broad powers to protect property. The Court can set aside a transaction that is designed to defeat an existing or anticipated family law order.
The Court has often dealt with cases, where one spouse has sought to dispose of real estate.
Background
One such case involved a husband, upon discovering that he was terminally ill, transferring a house owned by him to his 2 children from a previous relationship. The wife learned about the transfer and commenced Family Court proceedings.
The husband passed away before he could be served with the Court Application and was therefore represented by the executor of his estate at trial.
The wife sought that the transfer be set aside on the basis that if the husband was still alive the Court would have made an order for property settlement. The executor argued that the Court should not make an Order for property settlement as the husband and the wife were not separated.
Court Decision
The Court found that it was likely that both parties could foresee that the wife would apply for property settlement Orders following the transfer of the property and it was not necessary for the proceedings to have commenced at the time of the transfer.
There was evidence that the husband and his children kept the transfer secret from the wife and this implied that the husband was, in fact, attempting to avoid a claim by the wife to the property.
The Court was satisfied that as a result of the circumstances of the transfer, the wife having obtaining legal advice previously and the fact the wife brought the application, that the marriage was not “continuing in the normal way”.
The Court agreed with the wife’s argument and exercised its power to reverse the transfer of the property.
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