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Property Order or Maintenance, a fine distinction

Monday 14th February 2022

By: Thomas Jenkins

Property Order or Maintenance, a fine distinction

Thorpe & Stirling (2021) FLC 94-066; [2021] FedCFamC1A 86

This Full Court judgement concerns a husband’s appeal against enforcement orders.

In 2014, the parties initially settled their family law property matter and final orders were made by consent. Notably, one of the orders (Order 36) required the husband to act as guarantor and to pay 100% of the contributions on a (future) mortgage loan not exceeding $500,000.

In 2019, the wife remarried. Consequently, the husband argued that pursuant to section 82(4) of the Family Law Act, Order 36 no longer had effect. Section 82(4) outlines that orders for spousal maintenance to a party shall cease to have effect upon the remarriage of that party.
The wife issues proceedings in the Federal Circuit Court of Australia seeking to enforce Order 36. At first instance, the Court granted the wife's application to enforce Order 36.

The Husband appealed to the Full Court. In holding that Order 36 was in fact a spousal maintenance order, the Full Court outlined the following reasons:

  • The subjective intention of the parties was irrelevant. It is the nature of the order itself and the power exercised which determines whether an order is a property or maintenance order;
  • Adjustments to property interests under section 79 of the Family Law Act, are based on divisions of existing capital interests. Order 36 creates obligations separate from the division of the property pool; and
  • The Husband’s liability to pay the mortgage could exceed what he otherwise received from the consent orders. The consent orders entered into provided for the husband to receive property valued at $324,000 or around 36% of the property pool. If the Husband’s payments on the $500,000 mortgage were categorised as a property order, this percentage would gradually decrease to the point where he received less than 0% of the property pool.

The wife submitted that, in the event that Order 36 was found to be a maintenance order, the Court should order the payments to continue due to ‘special circumstances’. Section 82(4) does allow the Court to Order the continuation of maintenance payments upon remarriage in special circumstances, however the Full Court refused to construe Order 36 in this way, particularly as no special circumstances had been identified.

The husband was found to have no obligation to continue the mortgage payments under Order 36.

The husband did not seek any order for costs.

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