Ex-wife wins relationship property claim for Trust property...

The Supreme Court has recently dismissed an appeal from a husband claiming that his ex-wife had no relationship property interest in a house that he had transferred to a Trust.

The husband transferred the property to the Trust on 29 November 2004. The lower Courts determined that the husband and wife’s de facto relationship began at some point between December 2004 and January 2005.

The couple had two children, one born in 2005 and the other in 2009. They separated in September 2012. The wife began relationship property proceedings in 2017, which included a claim of half an interest in the property that was transferred to the Trust.

The Court had to determine whether they should make an order under the Property Relationships Act. To read more about the specifics of this provision, read here 

In order to determine whether an Order should be made, the Court had to consider two factors:

a.    Whether the property had been transferred since the de facto relationship began; and

b.    Whether the transfer had the effect of defeating the wife’s claim to the asset as relationship property or her rights to it.

On the first point, the Court decided that the transfer did not have to take place after the de facto relationship had actually begun. Instead, it will be sufficient that the couple had a de facto relationship in contemplation when he made the transfer.

In this case, the time between the transfer and a de facto relationship officially beginning could have been a matter of mere days, if the commencement of the relationship was in December 2009. In any case, the Court noted the transfer happened within two months of a de facto relationship starting.

The Court decided that the couple had a clear intention to enter a de facto relationship when the transfer was made, considering factors such as their living situation and the duration of their relationship. The Court also found that the relationship was “showing signs of permanence”. Therefore, the transfer was in anticipation of the de facto relationship commencing.

The Court also decided that the transfer was made with the intention to defeat the wife’s claim or rights to the property. The husband had received legal advice in relation to the property becoming relationship property prior to the transfer.

Further, the Court decided that it is enough for a person to know the transfer would defeat a person’s claim or rights and they proceed with it anyway. There does not have to be a direct intention to defeat the claim.

The husband was found to have known that the transfer would defeat his wife’s claim or rights. Both legal elements were therefore satisfied and the Court refused to grant the appeal to the lower courts’ decision as to Orders. The Trust property was therefore included in the relationship property pool to be divided between the husband and wife.

It is important to be aware of your rights and obligations in terms of relationship property proceedings. If you are confused about these, it pays to seek advice from a professional with experience in the area.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.

Shaun Cousins and Hunter Flanagan-Connors