Why a Timely Divorce Settlement is Crucial

It can be tempting, when going through the pain and confusion of a divorce, to put off the property settlement. Often, the dread of prolonged conflict and unsettling a more comfortable routine leads divorcing couples to put the property settlement in the “I’ll do it later” department.

A recent Supreme Court case in Queensland highlights the need for divorce settlements to take place in a timely manner.

In that case, Mr & Mrs Alagiah separated in 2006 and were then divorced in 2012.  While some attempt was made to effect a property settlement between them, Mr Alagiah died in 2013 before property settlement proceedings were concluded or commenced.  Mr Alagiah died intestate and as a consequence, Mrs Alagiah, as his former spouse, did not receive any of his Estate.

Shantha Alagiah (the applicant) was married to Dr Ratnam Alagiah, a university professor, for 22 years until their divorce on 25 May 2012. At the time of the divorce and throughout 2012, various attempts were made by the applicant’s solicitors to reach a concluded agreement with Dr Alagiah in relation to a property settlement. On 7 March 2012, the applicant’s solicitors wrote to Dr Alagiah listing the matrimonial assets, including superannuation assets and properties in New South Wales and Queensland, and advised that they had been instructed by the applicant to “commence negotiations with respect to property settlement.” The marriage was then dissolved by a decree of the Family Court of Australia which became absolute on 25 May 2012.  The solicitors for Dr Alagiah (the deceased) advised the applicant’s solicitors in February 2013 of their client’s death and advised that they did not hold his last Will and Testament and were not aware if such a document existed.

At the time of his death, the applicant was residing with her elderly mother in India, having returned to India to care for her after the separation in 2006. She resided with her until her mother’s death on 12 April 2014.  It was clear that, whilst she was in dire financial need throughout 2012, she was not in fact being supported by the deceased prior to his death. In the applicant’s affidavit sworn 21 September 2015, she stated that after the separation, her mother was her sole source of support.

Whilst the applicant and the deceased entered into negotiations in an attempt to finalise their outstanding property law matters by way of a family law property settlement, no agreement had been reached and no proceedings had in fact been commenced at the time of the deceased’s death. The Family Law Act 1975 does not contemplate the institution of property proceedings after the death of one or more of the parties. Therefore the applicant could not find find remedy in the context of family law.

moneyWith that in mind, Mrs Alagiah commenced what is commonly referred to as a Family Provision Application in the Supreme Court of Queensland pursuant to the Succession Act 1981 (the Act), claiming provision from her former husband’s Estate for her proper maintenance and support.

One of the matters that the Supreme Court had to determine was whether Mrs Alagiah was entitled to so apply.

The Act sets out those persons who are eligible to apply for Family Provision.  Such an eligible person includes a “spouse”, and the Act defines a spouse to include a dependant former husband, wife or registered partner of a deceased person being a person:

  1. Who was divorced from the deceased; and
  2. Had not remarried or entered into a registered relationship with another person before the deceased’s death; and
  3. Was on the deceased’s death receiving or entitled to receive maintenance from the deceased.

There was no doubt that Mrs Alagiah satisfied the first and second of those criteria.  The issue then became whether she satisfied the third criteria.

After considering earlier cases, Justice Lyons accepted that for Mrs Alagiah to be entitled to receive maintenance from her late former husband, she must have had at the date of his death, an actually crystallised right to payments of maintenance such as a right under an existing order of the Family Court or a binding agreement.  Justice Lyons went on to find that whatever moral claims Mrs Alagiah had against her former husband, she was not a dependant former spouse as defined in the Act and was therefore not entitled to bring a Family Provision Application.  Her Application was refused.

Dr Alagiah’s estate was distributed according the rules of intestacy and accordingly Mrs Alagiah did not receive anything from her ex-husband’s estate.

This is an example of why settling property during or after a divorce ought to be done as efficiently as possible. If you have a question relating to divorce or property settlements, please contact us today for your FREE, 10-minute phone consultation.