Just and Equitable and the drip-feed settlement

As family lawyers, we are all aware of the requirement in the Family Law Act that orders for property settlement, whether made by consent or after a contested hearing, must be just and equitable and sever, as much as practicable, the financial relationship between the parties. Most of us have negotiated settlements with a deferred payment or a payment to be made by a number of instalments. The most protracted timeframe in my matters has been about 5 years from the date of the orders. In one case the parties agreed to defer the sale of a property (and therefore the distribution of the sale proceeds) because they were aware that an impending development in the area would increase its value substantially. There were thus good reasons for this delay and both parties were mindful of those reasons, but I always thought it was still something of a stretch – until I read the case below.

In Hinkler v Anglin [2020] FamCAFC 167, a Judge in the Federal Circuit Court made a property settlement order, on a contested basis, for the wife to pay the husband $38,750 in instalments of $150 per fortnight. If left undisturbed, this arrangement would have taken 10 years to implement and with no provision for security or interest. To make it clear – this was an order for property settlement, not spouse maintenance.

The Full Court unhesitatingly said that this order did not provide “finality of proceedings” per the requirement in s 81 of the Family Law Act and could not be considered just and equitable per s 79(2).

Hinkler v Anglin is a useful example of the Full Court identifying clear errors of law and providing concise reasons for judgment. Going beyond the obvious deficiency of the order under appeal, it is also a reminder to remember the basics – as the High Court said in Stanford, orders for property settlement that involve the adjustment of the parties’ interests are not automatic and can only be made if just and equitable. The just and equitable requirement permeates the process and must be reflected not only in the fact that the order was made, but also the provisions that it contains. The finality requirement is closely related to the just and equitable requirement – in circumstances where a marriage or de facto relationship has permanently broken down, finality and a “clean break” are inherent characteristics of a just and equitable property settlement.