P is for Parental Contribution – A-Z of Family Law

More and more, given the state of the housing market in Australia, parents are giving money to their children during their adult years. These funds could be a gift or a loan towards purchasing a home, or be an early inheritance.

Naturally, many of the recipients are in relationships of their own and can unfortunately find themselves involved in a subsequent relationship breakdown.

The courts are frequently facing proceedings with relationships where the facts concern considerable and substantial contributions from parents, alongside the ambiguous question of how should such contributions be assessed and determined.

Yeng & Sun [2025] FedCFamC1A 106 is a decision of the appeal bench of the Federal Circuit and Family Court of Australia, consisting of Deputy Chief Justice McLelland and Justices Gill and Brasch, which dealt with an appeal from the primary judge in circumstances where extensive financial contributions were made by the husband’s parents.

For the purposes of the appeal, the primary issue surrounded the treatment of $5 million worth of financial bonds that were invested in by the husband on his mother’s behalf as a means to assist with his parent’s immigration to Australia under a ‘significant investor’ visa. However, the parent’s ultimately didn’t immigrate.

Several years later, following maturity of the bonds, it appeared that the husband utilised around $2.4 million of the net proceeds toward the purchase of Australian property in the joint names of the parties, before returning $3.4 million to his mother.

At first instance:

• The primary judge ‘added back’ the $3.4 million sum.
• Submissions on the wife’s behalf were that, should the add-back occur, the husband should receive credit by way of his contributions such that the division be 55/45 in the husband’s favour.
• The primary judge concluded upon a division of 50/50.

The husband’s grounds of appeal were that the primary judge erred in finding that the parties’ contributions were equal; and, that the primary judge provided inadequate reasoning as to this finding.

The Court commenced with a consideration of the primary judge’s reasons, in the context of the following excerpt:

reasons are not intelligible if they leave the reader to speculate as to which of a number of possible paths of reasoning the judge may have taken to that conclusion. Failure sufficiently to expose the path of reasoning is therefore an error of law (DL v The Queen (2018) 266 CLR 1).

Upon considering the primary judge’s reasons, the Court was unable to find ‘adequate reasons to explain’ [44] how a finding was made that the bonds were a financial contribution to the husband and wife equally. Of the reasons on hand, the only finding that was supported was that the bonds were a financial contribution by the husband’s mother to him alone.

No ’direct or indirect evidence of an intention on the part of the husband’s parents or either of them, to gift the Waratah Bonds funds to not only the husband but also the wife’ [45] was referred to by the primary judge.

In relation to the first ground of appeal, being the ‘miscarriage of discretion’, the Court referred extensively to key decisions:

• In many such cases that gift was made only because of that relationship and in reality as a means of benefiting that relative in that marriage. It was made “because she was a daughter of that family” (Gosper and Gosper [1987] FamCA 43).
• … a contribution by a parent of a party to a marriage to the property of the marriage will be taken to be a contribution made by or on behalf of the party who is the child of the parent unless there is evidence which establishes it was not the intention of the parent to benefit only his or her child (Kessey & Kessey [1994] FamCA 162).
• the onus [is] on the spouse who is not the child of the generous parent to place evidence before the Court that the parent did not intend to benefit only his or [her] child (W & W [2000] FamCA 1302).

Without any available evidence of the husband’s mother’s intention to gift the bonds jointly, there was no basis for such a finding that the bonds were an equal contribution.

Both grounds of appeal were upheld and the proceedings were set down for rehearing (Yeng & Sun (No 2) [2025] FedCFamC1A 134).

This decision of the appeal court conveys a few key principles:

1. Consider how a gift from a family member is given, and ensure that the intention is clearly specified.

2. The default position is that a party who receives a gift from their family member, is solely receiving it. It is not attributable to the other party.

3. If your position is that a parental contribution was joint, and not just to that parent’s child, the onus is on you and evidence must be obtained to substantiate the position.