Family & Relationships

Drafting consent orders

Many couples are able to work constructively together to reach an informed and mutually acceptable financial settlement following separation, without the assistance of lawyers or the Court.  This is a wonderful outcome for the family concerned, but it is crucial for all parties to properly document, formalise and implement their settlement agreement to avoid future disputes.

In the case of Dace and the Estate of the late A Dace [2015] FamCAFC 215, Mr Dace and the executors of the estate of his late Wife (who had died after the parties reached a settlement agreement) went through two trials disputing the interpretation of consent orders, first in the Federal Circuit Court and subsequently on appeal to the Full Court of the Family Court of Australia.

At issue was whether Mr Dace was required to pay the Estate approximately $250,000 following the sale of some real properties for a higher price than originally expected.  Mr Dace argued that, as he had paid the outgoings and mortgage expenses for the properties, the Estate must contribute to those expenses before it could benefit from the higher sale price.

Ultimately, while the Court agreed that Mr Dace would normally have a right of contribution from the Estate for these costs, the drafting of the orders was such that that presumption should not apply and he was ordered to pay the Estate the total sum it claimed and further to pay its costs incurred in the trial and the appeal.

This was no doubt a costly, drawn out and terribly difficult period for Mr Dace and the Executors of the Estate.  Ultimately, Mr Dace lost the substantive case and also bore responsibility for ‘party/party' costs.  Because party/party costs are calculated according to a scale, it is reasonably certain that the Estate was not fully compensated for its legal expenses. 

It is the job of lawyers to as the ‘what if’ questions that inform the drafting of settlement documents.  Substantial monetary and emotional expense could have been entirely avoided if the original consent orders had been drafted carefully and comprehensively.

Nick Ellis - Lawyer