My ex-partner sold our home without telling me. What can I do?
One of the unfortunate realities of the breakdown in a relationship is also, more often than not, a breakdown in trust. This can, at times, lead to one party engaging in conduct dissipating assets of a relationship in an attempt to minimise or defeat the other’s property settlement claim.
Section 106B of the Family Law Act 1975 (Cth) provides the court with the power to set aside transactions made or proposed to be made to defeat an existing or anticipated family law order, regardless of intention. Therefore, even if a property is sold with the best of intentions and without malice, the court has the power to set aside its sale.
Some examples of transactions that have been reversed under section 106B include:
- Transfers of real estate to third parties or a proprietary company or a trust.
- Securing a mortgage over real estate.
- Forgiving debt.
A recent case example of the court considering 106B application is the matter of Bedenock & Faldyn & Anor [2020] FCCA 1530.
In this case, the husband had brought an application to set aside the sale of a property by the wife. The parties had not been living together since November 2016, the wife sold the property in 2018 and did not give the husband notice or seek his consent to do so.
The husband’s father had also intervened in proceedings seeking that the wife repay him the sum of $143,915.86 in capital loans.
The property was listed for sale with a real estate agent, with the original method of sale being by public auction. However, this was changed prior to sale to be via private treaty.
The property was sold for $340,000, and the net proceeds of sale was approximately $200,000. The husband submitted that the transaction ought to be set aside.
Although the court was of the view that at the time of sale, an application by the husband for a property settlement should have been foreseen as likely or reasonably probable, the husband was unsuccessful in getting the sale set aside.
The husband:
- Had not produced evidence in support of his claim that the property was sold under value (he relied on a valuation that was 2 years old).
- Did not demonstrate that the sale had the effect of placing the asset out of reach of the husband, as there was no evidence that the balance of the proceeds of sale were not sufficient to meet an anticipated order.
- Did not have evidence to demonstrate that the purchasers were not genuine and independent purchasers.
Why does this matter for me?
If you are considering separating, or have recently separated, you should seek expert legal advice before making an significant financial decisions, particularly if you are considering restructuring your assets or wanting to retain a particular asset, such as the family home by way of an overall settlement.
Similarly, if you have recently purchased a property and have been informed that the property may be the subject of family law proceedings you should seek advice.
If you would like further information about how the court approaches applications made under 106B of the Family Law Act 1975 (Cth), are concerned your former partner is attempting to sell or transfer assets without your consent or knowledge, or you would like to discuss your options for asset protection, please contact Sage Family Lawyers on 03 9070 9839 or info@sagefamilylawyers.com.au
