Imagine this scenario…

The high earning businessman

Throughout the course of his fifteen-year marriage, the husband has solidified himself as a successful entrepreneur in the business world, with business assets of more than $10 million. Perceivably, his exceptional business acumen has earned him a significant income throughout the years which he has applied to the marital pool.

The stay-at-home mum

Whilst being a stay-at-home mother to the parties’ four children, the wife has also assisted with the business in various ways in her capacity as a director and shareholder. So how does a court view the husband’s ‘special skills’ that have, for the most part, been responsible for the large increase to the parties’ assets?

What the courts have to say

Until recently, it could be successfully argued that the husband’s ‘special skills’ and entrepreneurial ability which lead to the parties’ accumulation of assets meant he should receive a higher percentage of the asset pool.

This line of reasoning largely undervalued the contributions made to homemaking and parenting.

Today, courts have quashed the existence of a doctrine of ‘special skills’ or ‘special contributions’ that was historically argued in high wealth cases.

In the case of Fields & Smith, the Full Court of the Family Court noted that the legislative power to alter property interests “does not provide endorsement for any category of contribution related to any class of property (for example, high wealth) being, by virtue of that category or class, more valuable or important than another. In each case the contributions made by the parties must be evaluated in the context of the facts particular to that case1.

Essentially, the Full Court settled once and for all that the Family Law Act 1975 does not impose any principle to render direct financial contributions any more important or special than indirect contributions, particularly contributions to the home or welfare of the family.

What does this mean for me?

If you are in a similar situation to either of the parties in the above scenario, what you need to know is this:

  • Courts are given a wide discretion to weigh up the different contributions of parties to a marriage or de facto relationship when making orders to alter property interests.
  • Section 79(4) of the Family Law Act 1975 gives the court power to make orders in property settlement proceedings having regard to:
    • Direct financial contributions (eg. paying the deposit on the family home);
    • Direct financial contributions to the conservation or improvement of property (eg. renovations to the family home);
    • Indirect financial contributions (eg. one party paying rates and bills while the other pays the mortgage);
    • Non-financial contributions (eg. one party staying home to look after the children which enables the other to work full-time);
    • Contributions to the welfare of the family (eg. homemaking and parenting).
  • When making an order pursuant to s 79 of the Act, the court will use their discretion to weigh up and assess each contribution against the other.
  • Cases are always decided on a case-by-case basis.

The above information is merely a short overview of factors that will be considered by a Court in property proceedings. If you would like some advice specific to your circumstances, please do not hesitate to contact our team on 1800 994 279.

 

*Fields & Smith [2015] FamCAFC 57 at 43.


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