Is living in a nursing home legally separation?

29-April-2012 Family Law By admin


In short, the answer is “yes”. But a recent decision of the Family Court has raised issues regarding how ageing couples may be affected by property settlements should they be physically separated due to declining health. 

Mr Stanford purchased a house in 1962 with his first wife. Seven years later he divorced and remarried and his second wife moved into the home.  Both Mr and Mrs Stanford had children from previous marriages. In 2008 Mrs Stanford suffered a stroke and was placed in full-time care while Mr Stanford remained living in the family home which was now worth $1.375 million. Mr Stanford provided $40,000 for Mrs Stanford’s care and visited her three times a week. 

Mrs Stanford’s daughter believed the care her mother was receiving was inadequate and therefore requested that she be moved to another aged care facility nearby, which required a $300,000 bond. No funds were available to pay this bond and hence Mrs Stanford’s daughter commenced legal proceedings on the basis that Mr and Mrs Stanford were separated and that the matrimonial home should be sold and the proceeds used to fund the wife’s care. 

In the initial hearing the Federal Magistrate declared that Mr and Mrs Stanford were separated for the purposes of family law despite the fact that they did not intend to separate and lived apart only because Mrs Stanford required permanent care.  This decision was based on the fact that the couple would “never live together again” and that most of the elements of a normal marital relationship had ceased to exist. The Court ordered the house be sold and $612,000 go toward Mrs Stanford’s care.  


This result sparked an appeal from Mr Stanford’s children who urged the court to “recognise and enhance marriage as a voluntary relationship entered into for life, and protect the institution” and argued that the court had no jurisdiction to order a property settlement since the couple had not separated. The Full Court disagreed saying that the Court “clearly had the power” to make an order for a property settlement.


However the court overturned the Federal Magistrate’s decision, stating that the Judge “failed to consider the various options … and in our view wrongly exercised her discretion”. The Full Court based its decision on the fact that Mrs Stanford would not have needed a lump sum payment to provide for her financial future. It also noted that her health was deteriorating and hence she may not benefit from being moved to the higher-cost facility. The court was awaiting final submissions from both parties when Mrs Stanford died.


The decision in Stanford’s case confirms that elderly couples who remain married but are physically separated because of one party’s ill health are separated for the purpose of Family Law and that consequently the Family Court has power to order property settlements in relation to the assets of such couples.
 

High Court appeal and decision

IMPORTANT NOTE: This case was later brought to the High Court on appeal by Mr Stanford and the appeal was allowed. In November 2012, the High Court set aside the property settlement orders made by the Full Court on the basis that it was not just and equitable to have made an order for property settlement in this case. To view the details of the High Court decision, go to http://streeterlaw.com.au/blog/high-court-clarifies-legal-separation-of-elderly-couple-property

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