We are often asked by our clients, 'Will my new partner's financial circumstances impact my property settlement?'.

When determining how to appropriately divide matrimonial assets, one of the matters that the court must assess is the future needs of each party.

The Family Law Act 1975 (Cth)  sets out a number of circumstances which the court needs to consider with respect to the future needs of the parties.

One of the matters that the Court will need to consider is:

"if either party is cohabiting with another person-the financial circumstances relating to the cohabitation"

The practical effect of this consideration is that if a party has begun living with another person, the other person's financial circumstances may need to be considered when the court assess the parties' future needs.

A clear example of how living with another person may impact the future needs of a party, is that some day-to-day expenses will be halved by living with another person. It may also be the case that due to the new relationship; the party has an increased ability to borrow funds in the future which may reduce the need for the Court to adjust for their future needs.

As we have established that the financial circumstances of a new partner are a relevant matter, another issue arises: Is it necessary to provide disclosure of my new partner's financial circumstances to the other party?

If the matter is before the Court, each party will attend to filing a Financial Statement which will require that they advise of how much the new partner earns on a weekly basis. It also requires that the party disclose the expenses that the new partner is paying for that party.

But does the requirement to make disclosure go any further than this and, if no evidence is provided, what could be a potential consequence?

About the Matter

This matter was considered recently by the Court in Pates & Pates.

In Pates, the Husband argued that his new wife did not work and he supported both her and their two young children, and that this should result in an adjustment in his favour. Opposing this, the Wife argued that he had failed to provide sufficient evidence/disclosure around his current wife's financial position, which should cause the trial judge 'considerable disquiet'  due to the 'lack of transparency and disclosure' made.

In Pates, the Court found that there is no general obligation for a new partner to provide full financial disclosure. However, if a party is seeking to establish that there should be an adjustment of the property pool in their favour due to their new partner's financial circumstances, they have the burden of proving this.

Result of the Matter

As a result of the Husband's failure to provide sufficient evidence in support of his argument, along with the wife providing evidence that suggested that his assertions were inaccurate, the trial judge rejected the Husband's application for an adjustment on this basis.

Takeaways 

The lesson from Pates is that while there is no requirement for full and frank financial disclosure of a new partner's financial circumstances if you wish to seek an adjustment of the property pool in your favour due to their financial circumstances, it is important to ensure that sufficient evidence is before the Court in support of your claim.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.