Property orders, maintenance orders, what’s the difference and does it matter?

Yes, there is a difference and yes, it does matter.

Put simply, a property order refers to those orders that divide parties’ assets, liabilities and financial resources upon separation. In proceedings for property settlement, the Court has jurisdiction to make any such order to alter a parties’ interest in property as it considers appropriate (pursuant to section 79 of the Family Law Act (“the Act”) for parties to a marriage and section 90SM of the Act for parties to a de facto relationship).

Alternatively, a spousal maintenance order refers to financial support made payable to a former partner following separation. The Act recognises that both parties of a marriage or de facto relationship have an equal duty to financially support their partner (where they can) and this duty continues after separation. Spousal maintenance payments can be ordered to be made as a lump sum payment or periodic payments for a specific period of time. The amount of spousal maintenance to be paid will depend on a number of factors, including what the party can afford.

There are important consequences in making the distinction. Whether an order made by consent was properly characterised as a property settlement order or a spousal maintenance order was the question on appeal in the recent decision of Thorpe & Stirling [2021] FedCFamC1A 86. The order in question required the husband to continue to pay the wife’s mortgage until the loan was discharged. Sometime after the consent orders were made, the wife re-married and thereafter the husband refused to make the loan repayments.

The husband argued that the order should be characterised as a spousal maintenance order, as spousal maintenance order will cease to have effect upon the death of either party or if the person whose benefit the order was made, re-marries. Thus, the husband considered his obligation to be discharged upon the wife’s re-marriage.

The wife argued that the order was a property settlement order which does not cease and sought for it to be enforced.

The trial judge agreed with wife and made orders for its enforcement.

The husband appealed and the decision was overturned. The Full Court (Aldridge, McEvoy & Altobelli JJ) reasoned that the order for the husband to continue to pay the wife’s mortgage creates an obligation on the husband which is completely separate to the division of the parties’ property. The Court said if an order does not alter the parties’ interests in their property it is not an order made under section 79 of the Act.  Section 79 does not empower the Court to make an order against property which does not presently exist (Walters and Walters (1986) FLC 91-733; Best and Best (1993) FLC 92-418). In this case, the parties’ existing property at the time of their settlement included a house, superannuation and some chattels.  It was determined that such property had already been divided between the parties and their property settlement had been completed.

Therefore, as a spouse maintenance order, the husband’s obligation to pay the mortgage ceased on the wife’s remarriage.

As can be seen in this case, Family Law is a complex area of law and it is imperative that orders are drafted with precision and care. Our expert team of Family Lawyers at Solari & Stock are highly trained and experienced in all Family Law areas and able to assist you through any issues that may arise.

Article written by Riccarda Stock
Photo by Dillon Kydd on Unsplash