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Ask Patrick H. Your Own Question
Dip Law LPAB - Sydney based lawyer
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Hi, im in a very complicated position. I am the sole trader
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Hi, i'm in a very complicated position. I am the sole trader of 2 business one of which is "run" by my life partner. we have been together full time since may 2006. I have been in my house since 1978 which was built by my father. I have paid down the mortgage twice since then. Once with my first husband, then i had to re-mortgage to buy him out, then after my present partner and i separated for 1 1/2 years in 2004/2006 i got the mortgage down to 3500. when my partner reconciled with me he had zero money, no car, no job and 20grand credit card debt. he worked for a truckdriving co for 18months or so, then he quit and i agreed to set him up with a business to run. re-mortgaged my house and bought a truck and bobcat. a little while down the track, when things seemed to be going well, we employed another operator, then another and my partner started to stay at home a fair bit. i re-mortgaged my house again up to 150000 to buy further equipement.
at this point in time I now owe 120000 on the house, 70000 on an excavator, and about 20000 on a bobcat, all these debts are in my name only. I am also 3 years behind with my taxes and 1 year behind with BAS because this past year we have started going downhill work wise. in fact the bank account is 100000 lower than this time last year. A lot of this is because we have helped out family while the going was good. and the going suddennly got bad. My partner is now a complete alcoholic, and stays at home all day everyday drinking from 5 in the morning, falling asleep during the day, then drinking till bed-time at night. This situation has become unbearable to me, and I am strongly considering seperating from him. however he wont leave the house, and is demanding 300000 to leave or he wont go. - I need to know where I stand legally. I dont think it would be fair to give him ANYTHING but I need to have some idea. Thank-you
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replied 4 years ago.
Hello and thank you for your question.
Only a fully briefed lawyer can give you a firm answer as to what your actual entitlement is likely to be if you split up with your de facto partner, because it will require a detailed examination of your family and financial history as well as a detailed knowledge of all your and your husbands current assets and liabilities, however the following explanation of the way in which the Family Law Act provides for the division of property should assist your understanding and give you some idea of your likely entitlements.
Under the Family Law Act the property of a separating couple (which includes all property in either parties name and superannuation) is divided as a whole, based on what the court considers fair having regard to:
1. the financial AND non financial contributions of each party throughout the relationship; and
2. having regard to any special factors which would warrant an adjustment in favour of one party or the other. Typically these include considerations such as where one party will have the care of children of the relationship, or where one party has health issues which will impair their ability to support themselves.
So in your case it is important to understand that the court works out the total pool of assets less the liabilities and then works out what share of the total each party is entitled to and only then decides which particular assets each party gets. The court does not separately decide what share of each asset a party gets, nor will it generally assign assets to one party and debts to another, but rather only allocates each asset and any debts, after determining each parties overall entitlement based on the net asset pool (assuming debts are first paid off).
If, as appears to be the case here, it were the case that you have effectively contributed the whole financial cost of the asset pool and there were no special factors, then you likely would receive the vast bulk of the asset pool. The husband would usually be entitled to some share, because a court would almost certainly accept that he must have made at least some non financial contributions in terms work in the businesses in the usual course of the marriage and so should be entitled to some share. This might be disputed if there is strong evidence that his conduct or poor work ethic had in fact contributed to the overall losses that the asset pool has suffered in recent years, but such an argument would likely not completely diminish his entitlement. Also it is possible his alcoholism could be treated as a medical condition which the court may find warrants some provision being made in his favour.
Also be aware that the longer the relationship the more even apportionments tend to be although where one party has contributed the vast majority of the asset pool, then absent strong special factors, such as children or severe health issues in favour of the other party, it would be rare that their entitlement ever reached 50%. In short reltaionships without special factors the courts tend to divide the property in proportions close to the financial contributions of the parties.
Although only a fully briefed lawyer can give you a firm opinion of your percentage entitlement, based only on the information provided, and the assumptions that you have contributed all significant assets; that the marriage has been of intermediate duration (10 or so years) with no special factors, and that the asset pool is still fairly substantial; I would guesstimate you will be would be entitled to something between 70 and 90%. Naturally there are many variables which I am not aware of which could potentially greatly affect the distribution, and your version of the history may be disputed by your husband, so the above really is a guesstimate, but hopefully should give you some insight as to the approach a court would take.
Although you appear to be attempting to negotiate an informal settlement, be aware that under the Family Law Act informal settlements are not legally binding so if you settle this way you run the risk that the agreement may be set aside later and a court imposed settlement be substituted.
I trust the above assists your understanding.
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Thank you and good luck.
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