The ordinary rule is that upon the death of a party to property settlement proceedings under the Family Law Act 1975 (Cth), no further steps can be taken. The case automatically comes to an end.
The reason for the ordinary rule is that the case is entirely personal to the parties to the marriage Smith v Smith (No 3) (1986) FLC 91-732. The rule was recognised as applying to a property case under section 79 of the Family Law Act 1975 (Cth) by the Full Court of the Family Court in Sims and Sims (1981) FLC 91-072.
However, in 1983 section 79 was amended by inserting section 79(8). Since that time, a property case can be continued after the death of one party to a marriage (and now a de facto relationship) by the substitution of the deceased’s legal personal representative. Section 90SM (8) was inserted for de facto couples from 1 March 2009.
The principle in Sims remains applicable if proceedings have not yet commenced before a party dies. Section 79(8) only deals with the continuation of proceedings, not the commencement of them.
In determining if property proceedings should continue after the death of a party, there is a two-step test which was confirmed by the High Court in Stanford v Stanford (2012) FLC 93-518. The majority said (at 86,639):
“In cases where section 79(8) applies, a court must consider whether, had the party not died, it would have been just and equitable to make an order and whether, the party having died, it is still just and equitable to make an order.” (Original emphasis)
Section 79(8) achieves three objects:
- a property case by or against the deceased spouse can be continued by substituting the legal personal representative for the deceased;
- the court can make property orders following the death of one of the parties in certain circumstances; and
- an order made under section 79(8)(b) can be enforced on behalf of, or against, the deceased’s estate.