Judgment Day

Agreed property settlement rejected to protect vulnerable spouse.

Background

Mr and Ms Giordano are married and remain in a relationship, despite no longer living together as Ms Giordano lives in an aged care facility due to significant mental impairment. There were no children of the relationship.

Because of Ms Giordano’s incapacity, the Public Trustee was appointed as her case guardian and administrator of her estate under orders made by the State Administrative Tribunal.

Mr Giordano and the Public trustee filed an Application for Consent Orders seeking that the home registered in the sole name of the Wife be transferred into the names of the parties as joint tenants. All other assets were to remain in their respective names.

The home was purchased in 1984 in Ms Giordano’s sole name for $45,000. There was no mortgage and the home was paid for a superannuation payout when the wife stopped working when she was approximately 49 years of age. The wife also owned a further property at the start of the relationship.

There was no evidence as to why the home was purchased in the sole name of Ms Giordano. The Husband said he had only just become aware that he was not on the title.

It was agreed that the Husband contributed around $137,000 to the marriage from compensation payments.

The home is now worth approximately $640,000. There are minimal other assets and no superannuation. Both parties rely on an aged pension.Mr Giordano lived in the home.

Following its appointment, the Public Trustee was required to protect Ms Giordano’s financial interests, including securing her interest in the home and assessing whether a transfer signed by Ms Giordano in January 2024 were in her best interests. The evidence before the Court did not explain what steps, if any, the Public Trustee had taken to independently assess or approve the proposed property transfer.

Findings

1. Even though the parties consented to the Orders, the Court is still required to consider whether it was just and equitable to make the Orders sought. Pursuant to the Family Law Act, the Court cannot make an order unless it is satisfied that it is just and equitable to make that Order.
2. It is not necessary for there to be a breakdown in the relationship for the Court to make an Order. There can be circumstances other than a voluntary separation of the parties where the Court can be satisfied that it is just and equitable to make an order for the alteration of property interests.
3. The Court cannot be satisfied that it is just and equitable to make the orders sought, particularly as there was no evidence that the public trustee performed its duties under the required Tribunal orders.
4. The Court was also concerned that approving the Orders now could permanently affect the parties’ future rights. If the marriage were to end later, the Court would be unable to make further property orders, except in very limited circumstances.
5. The matter was adjourned to allow the parties an opportunity to consider the Court’s concerns and provide further evidence if they wanted to pursue the Application.

Significance and Implications

This case confirms that the Court does not simply “rubber-stamp” consent orders. Even where all parties agree, the Court must independently assess whether the proposed orders are fair and appropriate. This is especially important where one party lacks decision-making capacity. The case reinforces that the Court must be satisfied that proposed consent orders are just and equitable, even where all parties agree. The Court’s role is protective, not administrative, and consent alone will not justify property orders.

The Court reaffirmed that a breakdown of the marriage is not strictly required before property orders can be made. However, where a relationship is ongoing, there must be a clear and compelling explanation as to why changing property ownership is necessary at that time. Without such justification, the Court is unlikely to intervene. An intact marriage significantly raises the threshold for establishing that an alteration of property interests is appropriate.

When a party has impaired decision-making capacity, the Court adopts a protective role. The interests of the incapacitated party must be clearly identified and supported by evidence. Orders that reduce or risk that party’s property interests will not be approved unless there is strong evidence they are for that person’s benefit.

The case highlights that the Public Trustee (or any guardian or administrator) must do more than simply consent to orders. The Court expects evidence that the trustee has independently assessed the proposal, complied with tribunal appointment conditions, and formed a considered view that the orders are in the protected person’s best interests.

The decision underscores a significant risk in making property orders during an intact marriage. Once property orders are made, the Court may be prevented from making further orders in the future if the relationship later breaks down, except in very limited circumstances. The Court will be cautious about approving orders that could irreversibly affect future entitlements.

This decision serves as a reminder that property adjustments under the Family Law Act are an exceptional remedy where a marriage remains intact, and that the Court’s protective function is paramount where vulnerability and capacity issues arise.