When determining a financial settlement, the Family Law Act 1975 (Cth) is clear that there must be finality. That is, there must be a ‘clean break’ between the parties with no ongoing financial connection so as to avoid future proceedings between them. But what happens if you want to remain co-owners?
What is joint tenancy?
Most couples hold property as ‘joint tenants’ – that is, they equally share ownership. If one joint tenant passes away, their interest in the asset automatically passes to the other owner(s). This is known as the right of survivorship.
‘Tenants in common’, on the other hand, hold a defined share of the property which is separate from the other owner. This interest forms part of the estate of each owner and, on their passing, is distributed according to their will.
What happens if we want to remain as joint tenants?
Of course, the most logical step to take when seeking a financial settlement is to sever your joint tenancy so as to eliminate the right of survivorship and ensure your interest forms part of your estate. The parties will then become tenants in common, and their interest becomes separate and distinct.
However, sometimes this option does not suit everyone. For example, what if the asset in question is a successful business and, while the parties want to end their personal relationship once and for all, they want to remain business partners?
In Vancovich v Dunfield  FamCA 393 a husband and wife lodged consent orders with the Family Court seeking to remain as joint owners of a business, but the Registrar refused to make the orders on the basis of the ‘clean break’ principle. On review, the Court of Appeal accepted that, given the parties had obtained independent legal and financial advice, the proposed orders were ‘just and equitable’. This was decided on the condition that any further proceedings in relation to the co-ownership are to be brought under the Corporations Act 2001 (Cth) and not in the Family Court.
As such while the Court is willing to make exceptions, its reluctance in doing so clear; you must demonstrate some exceptional circumstance which explains why severing the joint tenancy would be unjust and unequitable.
So what can I do?
At CD Lawyers we specialise in drafting consent orders which cater to your specific needs. While remaining as joint tenants for the indefinite future may be off the table in non-commercial settings, we endeavour to meet the requirement of finality whilst allowing you to remain as joint tenants as long as necessary to serve the purpose of your special circumstance.
Please note that the above is general information and should not be relied upon as legal advice. All situations are different and legal advice must always be tailored to the specific situation.