Loading...

Is an informal property settlement binding?

6 September 2021

Courts will usually only recognise a formal property settlement and that prevents the court from making any further adjustment to property orders.

However, in a recent case, a judge refused to make property adjustments orders sought by the ex-wife in circumstances where the parties had an informal but complete division of their property. The informal property settlement was agreed to 10 years prior.

In 2009, the family home was sold and the sale proceeds were divided between the parties, with the wife receiving 60%, and the husband 40%. At the time, they did not enter into a binding financial agreement to formalise the arrangement.

The wife used her share of the sale proceeds towards the purchase of another home, which she then renovated and sold in 2011. She then used the proceeds from the sale of that second home to buy shares in a start-up investment scheme, which promised substantial returns. However, she lost her entire investment as a result of a fraud by the scheme’s operator.

The wife then rented for a couple of years, before buying another property. Her parents paid the deposit for that property, and the rest of the purchase price was met by a mortgage loan.

The husband lived in several rented properties after the separation before he began to live with his current wife in 2016. She owned her own home and was a successful businesswoman, which enabled the husband to live a good lifestyle.

At the time of trial, the husband owned very little in the way of assets  – essentially only his car, an interest in a company that was in the process of being liquidated, and an unquantified equitable interest in his current wife’s property.

The husband issued his initiating court application, seeking parenting orders only for access to their son in 2016. His former wife filed her response seeking parenting, property, spousal maintenance and child support orders in 2017.

There was a delay of seven years and five months between the division of the property in August 2009 and the wife filing her response seeking property orders in January 2017. She had made no other attempt to seek to alter their property interests.

The judge found that the parties sold their jointly owned house, divided its sale proceeds and jointly owned chattels and went their separate ways, connected thereafter essentially only by their son.

He said the wife’s failure to seek a further altering of the property interests until the husband made his application for parenting orders was a relevant factor. And the judge then dismissed the wife’s property settlement application.

In this case, the husband was able to rely on the previous informal property settlement to avoid a further property adjustment with the wife.

However the fact that there was no documented consent order or a binding financial agreement which documented this early agreement meant that the court still had to consider and determine her property settlement application before they could dismiss it, which no doubt cost the husband considerable legal costs, as well as time and stress.

It is therefore always best to properly formalise any property settlement once an agreement has been reached so that such situations can be avoided.

If you need advice on property settlement, binding financial agreements, parenting orders or any other aspect of family law, please contact Michael Lynch Family Lawyers on: (07) 3221 4300 or email: [email protected]

Image accompanying family law article "Is an informal property settlement binding?"
2021-09-28T14:50:27+10:00

Client Testimonials

Your team’s communication with me was exceptional, I knew exactly what was happening.
A.A., Eatons Hill
The professionalism and reliability delivered by Amy Honan was fantastic. I had an urgent matter around my property sale and Amy offered to provide assistance over a weekend if I required it – that’s above and beyond!
E.F., Nundah
So pleased to have had a good, sound and knowledgeable firm.
C.W., Brookfield

I really liked the personable service by Michael Lynch Family Lawyers, the simple plain language you adopt and everyone’s patience.

A.O., Kedron
Amy, thanks very much to you and your team. Throughout my dealings with MLFL I have been continually impressed with your level of professionalism and, in particular, your understanding of circumstances and the articulate way you conduct yourself. I was completely satisfied with today’s outcome and without your experience and expertise in family law I doubt that the result would have been achieved.
M.R., West End
I always felt that the service provided by Michael Lynch Family Lawyers was of a high standard. Each time, after appointments I came away feeling secure. Keep doing what you are and maintain the ‘family feel’ that permeates your services.
C.W., Brookfield
Amy’s work was extremely professional but above all she has a manner and wisdom in dealing with people under stress. I will be recommending your firm to anyone that requires assistance.
K.H., Augustine Heights
Michael Lynch Family Lawyers always gave me competent and knowledgeable advice. I was consistently kept up to date. The meetings and phone calls were kept business-like, yet caring and thoughtful of my emotional state at the time. Thank you.
J.S., Holland Park
Your newsletters are great, I appreciate them.
K.B., Carina
I liked my solicitor keeping things as simple as possible.
S.M., Clayfield
My lawyer acted with professionalism in all her dealings with me and with the lawyer on the other side. I was always kept in the loop. I liked her approach. Thanks.
D.S., Coorparoo
Michael Lynch Family Lawyers have really listened to me. I felt confident my case was handled well. The law has changed recently, and I did not feel that a previous law practice I spoke to was suitably up-to-date.
P.B., Carindale

My solicitor is a good listener. My documentation maintained the high moral ground.

S.S., Hamilton
Thank you for providing me with a professional yet empathetic approach to gain the best outcome for me. My solicitor was excellent in explaining the processes and in representing me in Court. You have great customer service!
T.V., Everton Park
I appreciate you being upfront with fee estimates. You also have a fantastic website and the seminars REALLY helped to get me focussed.
T.C., Tarragindi

You, guys, provide extraordinary service.

A.O., North Brisbane
I was impressed by my solicitor’s attention to detail and her concern for me, and that the process was explained to me and that I understood it at all times.
B.W., Chapel Hill
The staff at Michael Lynch Family Lawyers were great. Everyone was fantastic, professional, understanding, caring and always communicated with me. I knew I was in good hands.
A.A., Eatons Hill
I appreciate my lawyer’s professional approach and her being on top of my situation.
N.S., Mt Gravatt
Amy, thank you. You have been diligent, accurate and pro-active for the entire duration of my matter. I appreciate it.
R.P., Cleveland

Michael Lynch Family Lawyers know what they are talking about.

R.M., Warwick
I really appreciated the happiness of your secretarial staff.
G.C., Clayfield
Thank you, you placed my needs first, you were aware of the need to reach a final result and not get caught up in the personal issues of the other party.
S.L., Moranbah
I like your friendly service and the ability to speak to my solicitor directly.
R.G., Wishart
Your team is professional, warm, friendly and real.
N.R., Crows Nest

I was always confident that I was getting the very best advice.

T.S., Flinders
May I take this opportunity to express my gratitude to you and your staff for the excellent professional services I received. In a word, priceless.
D.H., Hendra

Michael Lynch Family Lawyers are easy to deal with, and your systems are good.

D.T., Ferny Grove

I was very impressed with the initial interview. Everything was well-explained, and the advice was honest about what I should expect.

C.M., Morningside

Your staff is knowledgeable, professional and very calm.

A.C., Helensvale
My family lawyer was very helpful in assisting me to combat a very ugly situation without stooping to the low levels that the other solicitor attempted to take us.
M.J., Manly
If I need a family lawyer in the future I’ll be heading to Michael Lynch Family Lawyers again.
C.W., Brookfield

I’m very glad ‘Michael Lynch Family Lawyers’ is my lawyer and not the other side’s solicitor.

S.S., Hamilton

Thank you, you kept me sane in a difficult situation and gave me the encouragement and the confidence to keep going. You made me feel extremely comfortable.

A.M., Chambers Flat

At Michael Lynch Family Lawyers I got professional and ‘no-nonsense’ advice, costs were within quoted amounts and my matter was resolved quickly – well done!

L.R., Ascot
Many thanks for your assistance – life is now great – I’m moving on.
J.K., Mansfield
My solicitor provided a personalised service, prompt and quick responses and cost information prior to my commitment.
G.C., Southport
I like that my lawyer treated me like a friend and kept jargon to a minimum. She was easy to contact and kept me informed.
L.R., Samford
Thank you for your ongoing conciliatory approach in this matter and as always I appreciate your level headed advice. I certainly feel that I ended up with the right Solicitor.
S.C., Nundah
A personalised and professional service. Information has been clear and provided timely to assist my decision-making.
S.S., Hamilton
Lovely to deal with and provides a balanced view in what are very difficult circumstances.
A.C., Morningside
Thank you for the outstanding legal advice you have provided and professionalism in which you conduct yourself. I am truly thankful that it was you who represented me.
M.T., Stafford
Michael is very personable and very good at covering the material and explaining the strategy.
J.O., Hawthorne

My lawyer was the most knowledgeable of all lawyers I spoke to when looking for a lawyer. Michael Lynch Family Lawyers showed professionalism.

R.R., Brighton

Thank you for being very personable, professional and always providing me with the most appropriate advice in my times of difficulty. The other party’s lawyers were extremely aggressive, while Michael Lynch Family Lawyers remained calm and professional.

S.D., Parkinson
Amy, thank you for all that you have done during this matter. You impressed me with your professionalism from our initial meeting, and you have proven beyond doubt, to have had the skills and knowledge required. You are a credit to the company, and I would highly recommend you to anyone in a similar situation.
R.P., Cleveland
Thank you for the great newsletter. Your article on “Coping with Christmas” is brilliant – clear, caring and helpful. Thanks again!
C.T., Bribie Island

I have appreciated the way that you and the staff at your firm have handled my situation. I would especially like to mention the professional and caring way my lawyer conducted my case, I am deeply grateful and extremely happy with the results. I will be referring others to your service.

J.H., Wellington Point

Thank you for helping me through this difficult time. You have been caring, compassionate and efficient. Some of my divorcing friends have not been so fortunate. In my mind, you are the best family lawyer in Brisbane. If anyone I know needs a good family lawyer, I will tell them to speak to you. Thanks again.

B.T., Clayfield
I was guided through a really difficult time with expertise of Michael Lynch Family Lawyers. I am more than happy with the outcome of mediation.
J.H., Windaroo
Michael, thank you again for your presence here yesterday. We really appreciated the clarity and accessibility of your presentation. It is a rare thing to find somebody who not only has expertise, but also has a skill in communicating it.
J.S., Brisbane

I just wanted to get in touch to say thanks for helping me get through my custody and settlement. Thanks again to you and your staff. You have had a significant positive impact in my kids’ lives!

B.S., Brisbane

Thank you Debra for all the work you did for me, you both made the process manageable and brought sense to the chaos.

R.B., Toowong

I would like to thank your firm for the support and compassion shown while dealing with my matter.

C.M., Brisbane

Thank you very much to everyone at Michael Lynch Family Lawyers. Thank you for helping me get my life back and make a fresh start. To have that fresh start without fear and anxiety is priceless.

A.A., Perth

Many thanks to Stephanie for her help and support through this time, I was incredibly impressed with her work.

L.K., North Lakes

We had such a positive experience with Michael Lynch Family Lawyers, and we highly recommend their services. Meticulous attention to detail, attended quickly to every additional request we made, and made sure we always knew exactly where we were every step of the way. Our lawyer took what was such a stressful and emotional time for our family, and made the process feel so smooth and seamless.

N.B., Brisbane

My lawyer has been an amazing help through this stressful time. I will remember her help for the rest of my life. Thank you.

J.H., Brisbane

After utilising the mediation services team recommended by your organisation, my ex-partner and I were able to reach some interim agreements about parenting. I am incredibly grateful for the advice provided by Debra Effeney; and found your firm’s services to be exceptionally professional. If we needed to consult a family lawyer in the future, we would have no hesitation in reconnecting with your firm.

K.M., Paddington