The Court is generally reluctant to reopen final property orders as the primary objective of the orders is to conclusively determine the financial relationship between parties to a marriage/ de facto relationship and avoid further litigation between them.
The Court will allow orders to be set aside in the following limited circumstances:1
- The parties consent to the orders being set aside or varied; or
- The Court is satisfied that:
- There has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance
- Circumstances have arisen since the order was made that it is impracticable for the order to be carried out or part of the order to be carried out;
- A person has defaulted in carrying out an obligation under the order and as a result of the default it is just and equitable to set aside or vary the order;
- Circumstances have arisen since the orders were made, which are of an exceptional nature relating to the care, welfare and development of a child of the marriage/ de facto relationship, where the Applicant has a caring responsibility for the child and the Applicant will suffer hardship if the orders are not varied or set aside; or
- A proceeds of crime order has been made covering property of the parties to the marriage/ de facto relationship.
Consent
A person may make an application to set aside or vary final property orders where all parties to the proceedings consent to this arrangement. The purpose of this provision is to avoid unintended economic hardship and to avoid unintended consequences for parties. For example, the Court has been willing to set aside final property orders in circumstances where parties have subsequently reconciled their relationship.
Miscarriage of Justice
The most common situation involving a miscarriage of justice generally occurs where one party to the proceedings has suppressed material evidence. For example, where one party intentionally fails to disclose the value of a significant asset such as a house or business prior to the final orders being made. Once this criteria has been established, the Court must also be satisfied that as a result of this conduct, a miscarriage of justice has occurred.
The Court will not set aside final property orders if the failure to disclose an asset would not have changed the outcome of the Court’s original decision. For example, the Court is unlikely to reopen final property orders in circumstances where a party failed to disclose funds held in a bank account if the overall outcome would nevertheless have been the same.
Impracticality
The “impracticality” factor is particularly relevant in the current COVID-19 pandemic as the economic landscape continues to change significantly. The Court has commonly held that the standard for “impracticability” must be more than simply being unjust or difficult for the orders to be implemented. The Court has instead applied a high standard, requiring orders to be “practically impossible” to comply with.
This factor may be relevant in circumstances where after final orders were made, a party subsequently loses their job, and is therefore unable to comply with an order requiring payment to the other party or where additional time is required.
Default
The Court may reopen orders where one party fails to comply with final orders and the Court considers it “just and equitable” to rectify the default. The Court has held that the defaulting party is unable to rely on this provision, unless the circumstances which related to the default were outside of their control. The principle behind this is to ensure the defaulting party does not benefit from their own wrongdoing. If for example, one party deliberately failed to transfer their interest in the family home to the other party without any reasonable basis for their non-compliance, the Court would not reopen the orders.
Care, Welfare and Development of a Child
In order to satisfy this criteria, a party must first satisfy the Court that the circumstances are of an exceptional nature. The Court has a broad discretion in relation to this criteria. Examples of “exceptional circumstances” include:
Circumstances where a child suffers a chronic illness after final orders were made;
A party suddenly dies unexpectedly and is therefore unable to comply with the orders;
One party continuously fails to pay child support.
In addition to this criteria, the Applicant is required to demonstrate to the Court that as a result of the exceptional circumstance, the applicant or the children will suffer hardship if the Court do not vary or set aside the orders.
Proceeds of Crime
This factor is less common and arises where a Court has made a proceeds of crime order against the parties’ assets. Even if this ground is established, the Court has a discretion whether to set aside or vary the final orders.
Lessons Learned
As detailed above, there is limited scope available for parties to set aside or vary final property orders. Even if parties are able to successfully demonstrate to the Court that one of the relevant criteria has been satisfied, it is ultimately in the Court’s discretion whether or not to set aside or vary the orders.
It is therefore imperative that parties ensure they obtain comprehensive legal advice from a family lawyer prior to entering into any final property orders.
Please contact our office on (03) 8393 0144, if you would like to discuss your options or prospects of changing or varying a final property order with one of our experienced family lawyers.
Sources:
Sections 79A (for married couples) and 90SN (for de facto couples) of the Family Law Act 1975 (Cth).