Stanford v Stanford [2012] HCA 52

On appeal from the Full Court of the Family Court on 15 November 2012, the High Court was asked whether it was “just and equitable” to make a property settlement order in circumstances where a husband and wife had separate Wills in favour of their children from earlier marriages, and where the wife died before the Full Court delivered judgement upon an application to alter property interests made by the daughters of the wife as her case guardian.  

The High Court considered the following facts:

  • The husband and wife married in 1971, each having children by their respective first marriages
  • They were married for 37 years and made their matrimonial home in a house registered in the husband’s name and acquired by him during his first marriage
  • In 1995 the husband made a Will in which he left that house, subject to a life tenancy in favour of his wife, to the children of his first marriage
  • In December 2008 the wife suffered a stroke and was admitted to fulltime residential care and thereafter developed dementia. Through all this the husband continued to provide for her and deposited $40,000.00 into a bank account to provide for her medical needs or requirements whilst in that care 
  • In August 2009, the wife by her daughter as a case guardian applied to the Family Court of Western Australia for a division of property such that the husband’s house was to be sold and the proceeds to be divided equally between the husband and wife and that all other assets of the husband be divided equally between them 
  • If successful, clearly the children of the wife stood to benefit upon their mother’s death whereas under the Will of the husband, they stood to gain nothing.

In the first instance the Federal Family Court Magistrate made an order that the husband pay 42.5% of his assets to the wife totalling $612,931.00 within 60 days. This would require the husband to sell his home notwithstanding that he was already making provision for his wife’s financial support and care in the supported residential care.  

The husband appealed to the Full Court of the Family Court, but before delivering their judgment the wife died. Subsequently, the Full Court ordered that on the husband’s death 42.5% of the marital property be paid to the wife’s legal personal representatives; effectively, that such a sum be paid to the wife’s daughters.  

The husband appealed on grounds:

  • that the Family Court did not have power to make the orders that it made as it was an “in tact marriage” and that upon the wife’s death the only persons to benefit if a property settlement order were made would be her children from a different marriage, and
  • that it was not just and equitable to make any property settlement pursuant to s79(8) of the Family Law Act.

The High Court rejected the husband’s first argument as the proceedings instituted on behalf of the wife and heard in the Federal Magistrates Court were a matrimonial cause as defined in s4(1) of the Family Law Act and that it was not relevant that the marriage was “in tact” at the time the proceedings were issued by the wife’s daughter.  

When considering an application for property settlement under s79(8)(b), the High Court considered the proper question to be whether: had the party not died, would it have been just and equitable to make an order, and whether the party having in fact died, it is still just and equitable to make an order?  

It was the fact that during the wife’s lifetime proceedings were commenced by her daughter as a case guardian and that it was opposed by the husband. When the wife died, the claim instituted on her behalf continued and not as some new or different claim. This denied the argument of the husband that the claim that was being continued was a claim by the beneficiaries of the wife’s estate and not a “matrimonial cause” as defined in the Family Law Act.

The proper question for the High Court in determining the claim was to consider whether it would have made an order with respect to the property if the wife had not died and whether it was still appropriate to make an order with respect to property. This enquiry required by the Act demonstrates that the proceedings retained the character they had when instituted.  

In deciding this question the High Court held that:

  • The involuntarily separation (the wife’s stroke and dementia) of the parties, and the bare fact of separation, did not demonstrate that the husband and the wife have any reason to alter the property interest of commonly used assets when they were able to, and did live together
  • The Full Court and the Federal Magistrate had erred in not taking account of the consequences that would follow for the husband if the property settlement order were to be made as sought on behalf of the wife. The husband would be required to sell the matrimonial home in which he was still living despite the needs of his wife then being met by the provision of full-time care, a further provision of money against future contingencies and the possibility, if needed, of making a maintenance order
  • The daughter of the wife accepted that the “very dominant consideration” in the Full Court’s decision to make the orders it did was its conclusion was that the wife’s contributions during the marriage established a “moral obligation
  • Whether it was just and equitable to make a property settlement order was not answered by pointing to moral obligations which is apt to mislead as it assumes rather than demonstrates the existence of a legal right to a property settlement 
  • If the word “moral” was used to refer to a claim or an obligation then there is nothing to be gained by describing a wife’s contribution as giving rise to a “moral” obligation as it has no legal foundation in the Family Law Act or elsewhere and it was a term that in this case did mislead the Magistrate and the Full Court. Rather the rights of the parties were to be determined according to law and not by reference to other non-legal considerations.

The High Court concluded that it was not shown that had the wife not died, it would have been just and equitable to make a property settlement order. The needs of the convalescing wife could have been met by the provision of full-time carer, a further provision of money against future contingencies and the possibility, if needed, of making a maintenance order.  

The husband’s appeal to the High Court was allowed with costs and the wife’s application for a division of property was dismissed.

Comment - At the time of the wife’s application by her case guardian daughter all Australian States and Territories, except for Western Australia, included some provision for inheritance claims by step-children. The husband in this case was the major asset holder in the marriage, and his Will gave those assets to his children from his first marriage. The wife’s daughters would not have been able to challenge his Will under the Inheritance (Family and Dependants Provision) Act 1972 (WA). On 22 November 2012, that act was amended to permit claims by a step-child.