The recent case of Blackwell & Scott highlights the need to promptly comply with property settlement orders.
The simplified facts are:
- On 24 February 2014 orders were made for property settlement with the consent of both the husband and the wife.
- The parties owned two properties. One order provided that, by 23 May 2014, the husband pay the wife $130,000 and, in return, he retain one of the properties.
- The intent of the orders was to provide for an equal division of the property.
- At the time that the orders were made the relevant property was valued in the range of $600,000 – $650,000.
- As the husband had not paid the $130,000, on 11 September 2014 the wife filed an Application with the Court seeking to have the consent orders set aside and new orders made.
- On 18 June 2015 the husband paid the wife $130,000.
- In November 2015 the husband paid the wife interest on the late payment of the $130,000.
The wife relied on a section in the Family Law Act which says “If, on application by a person affected by an order made by a court … the court is satisfied that … a person has defaulted in carrying out an obligation imposed on the person by the order and, in the circumstances that have arisen as a result of that default, it is just and equitable to vary the order or to set the order aside and make another order in substitution for the order … the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order … in substitution for the order so set aside”.
The matter came before a Judge of the Federal Circuit Court on 29 February 2016. The evidence before the Judge was that the relevant property was valued at $860,000 at 16 December 2014 and that it was valued at $1m at 26 October 2015.
The Judge set aside the Orders made on 24 February 2014. He left the matter of making new orders for a later date.
The husband appealed to the Full Court of the Family Court. His appeal was unsuccessful. The Full Court said that because of the husband’s default the wife did not get the bargain that she negotiated ie a property settlement order that would have the effect of equally dividing the net value of the assets. The Full Court decided that in these circumstances it was just and equitable that the orders be set aside and new orders made.
The moral of the story … comply with court orders!
The husband was ordered to pay the wife’s costs of the appeal.