SKNWhen marriages or de-facto relationships come to an end, it is suggested that parties finalise the financial and property matters between them.

The Family Court can make legally enforceable orders in respect of dividing the assets and liabilities of married and de-facto couples. There are also benefits of entering into orders including stamp duty exemptions and capital gains tax rollover relief when assets are transferred between parties.

The Court initially looks at the value of the parties’ assets and liabilities and then assesses the contributions made by the parties to the acquisition, maintenance and or improvement to those assets throughout the relationship.

Contributions may encompass direct financial contributions such as making mortgage repayments and indirect financial contributions such as working in an unpaid role in a family business. Non-financial contributions also include contributions made to the care of children and to the upkeep of the family home for instance.

After the court has considered the contributions made to the pool of assets, it may also consider if there are any special factors which might lend it to make an adjustment in one party’s favour. Examples include if one party cares full time for children, suffers from ill health, is older, or has no ability to work and earn income.

The court must be satisfied that any orders it makes in respect of financial matters, are fair and reasonable when considering all the facts and circumstances of the case.

The Family Court matter of Wah & Golah [2016] concerned a property settlement where the marriage lasted eight years but where the husband made overwhelming financial contributions at the commencement of the relationship and throughout the marriage.

At the time the matter was determined by the court, the asset pool of the parties was valued at $3.9 million.

At the commencement of cohabitation the husband owned two properties, shares, significant money in bank accounts, superannuation and motor vehicles. It was determined that the husband’s initial contributions totalled $2.4 million whilst the wife contributed just $280,000.

There were no children to the marriage. The wife was a full time homemaker and had minimal earning capacity at the commencement of the marriage.

Late in the marriage, the wife suffered a car accident which caused ongoing medical problems, but otherwise her earning capacity remained unchanged from the date of cohabitation.

The trial judge determined that the assets should be divided 87.5% to 12.5% in the husband’s favour. The wife appealed the primary judgment, seeking an adjustment due to her greater future needs, and the husband opposed an adjustment based on his significant financial contributions made to the marriage.

The Court of Appeal determined that it was just and equitable to maintain the division in the husband’s favour, but due to the wife’s ill-health and the likelihood that she would be unable to work in the future, the wife received an additional $786,000 in order to ensure that she could find appropriate accommodation and support herself in the future.

As you can see, regardless of initial financial contributions made by one party, the court must look at all financial and non-financial contributions and possibly other special factors including future needs when determining a property settlement.

At Everingham Solomons we have the expertise and experience to assist you with property law matters because Helping You is Our Business.

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