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Divorce Property Settlement Guidelines: How Previous Decisions and Initial Contributions Influence the Court’s Assessment of the Parties’ Entitlements

Divorce property settlement guidelines: Divorce Property Settlement Guidelines: What Are the Boundaries of a Court’s Discretion to Make Orders Concerning the Division of Property?

The court is empowered to make orders concerning the division of property under the Family Law Act. What the court deems a just and equitable division of property is determined by reference to the relevant statutory considerations and common law principles. These considerations circumscribe the boundary between an appropriate exercise of judicial discretion and error.

In Wallis & Manning [2017] FamCAFC 14, the appellant wife sought to overturn the trial judge’s decision on the basis that:

    the trial judge erroneously characterised one of the parties’ properties and attendant water licences as a gift from the husband’s father, when it was, in fact, purchased by the parties.

Specially, the wife disputed the trial judge’s assessment of the parties’ contribution based assessment of 70/30 in favour of the husband.

The parties had been married for approximately 27 years, with their marriage ending in mid-2010. Their three children had all reached adulthood by the time the proceedings were underway. The net value of the parties’ property amounted to approximately $1.91 million. This mainly consisted in the parties’ three properties upon which they conducted a farming business, and a number of valuable water licences. The water licences were integral to the business’ operations. In addition, the parties each owned modest superannuation.

The facts concerning the parties’ respective contributions were agreed upon and consisted in the following:

    both parties applied their efforts in accordance with their respective abilities;
    the wife was generally responsible for domestic tasks, including rearing the parties’ children; whereas the husband was generally responsible for contributing to the family’s financial support;
    both parties took part in operating the farming business;
    the wife had a book-keeping role in relation to the business until 2000, when she scrutinised the businesses accounting affairs less intensely;
    the wife also engaged in paid work outside of the parties’ farming business; and
    the husband contributed two properties and water licences by means of a gift from his father approximately thirty years prior to trial.

Divorce Property Settlement Guidelines: Is a Failure to Consider Previous Decisions an Appealable Error?

In assessing the parties’ respective contributions, the trial judge undertook two discrete inquiries:

    one relating to the gifts contributed by the husband’s father, and
    the other relating to all other contributions.

This approach may be appropriate in cases where a particular contribution is of such importance that distinguishing it from other contributions may be convenient. But in adopting this approach, it is important to guard against the prospect of the other contributions being accorded a peripheral role in the court’s overall assessment. This is because the fundamental task of the court’s inquiry under s 79(4) of the Act is to weigh and assess all types of contribution during the course of the parties’ relationship.

Consistently with this approach, the trial judge held that the “miscellany of contributions made by each of the parties in the nearly 30 years between the commencement of cohabitation and the trial should be seen as equal.” The gift, however, justified an “adjustment” of 30% in favour of the husband, so as to create an overall assessment of contributions of 30/70.

The basis for the trial judge attaching such weight to the gifts from the husband’s father resembled what has been described as a “springboard argument” in the case law. That is, were it not for the gift, the parties would not have had the land they owned and the farming business they developed.

The wife’s case was partly predicated upon the claim that the parties’ respective contributions ought to have been assessed 45/55 in favour of the husband. Both parties maintained that, with the exception of the gift from the husband’s father, their contributions should be assessed as equal. They differed, however, in relation to the weight the trial judge should attach to the gifts. The wife’s position was that an overall assessment of 35/65 in favour of the husband. This was based on her argument that the trial judge had both:

    attached excessive weight to the gift from the husband’s father; and
    failed to regard any of the authorities concerning contributions in the context of a lengthy marriage.

The Full Court held that there was no basis to conclude that the trial judge had erred on the first-mentioned basis alleged by the wife. In arriving at this finding, the Full Court remarked that, while no two cases are exactly similar, comparable cases should be used more often as a guide to assessing the parties’ contributions. If, however, comparable cases are to be used in this way, there must be some analysis in regards to establishing their comparability.

Counsel for the wife cited four cases that were submitted as being relevantly comparable to the case under consideration. Accordingly, counsel argued that the cases in question, taken with all other relevant aspects of the case at hand, provide a criterion by which an appropriate assessment might be determined. The deficiency in counsel’s argument, however, consisted in a failure to establish the comparability between the cases cited and the cases under consideration.

Nonetheless, the wife did succeed in establishing the second-mentioned ground. Hence, the appeal was allowed and court’s power to re-exercise its discretion was enlivened. In doing so, the Full Court assessed the parties’ respective contributions as 42.5/57.5 in favour of the husband.

One of the pre-eminent considerations that lead the Full Court to arrive at this assessment was the length of the parties’ relationship. The parties had been married for 27 years. In this regard, it was held that the length of the relationship will substantially affect the court’s assessment of initial financial contributions when viewed in the context of the totality of contributions. The longer the relationship, the more likely it is that the other party will have made counterbalancing contributions that diminish the weight attached to an initial financial contribution.

The gifts from the husband’s father were donated relatively early in the parties’ relationship. But the current state and value of the parties’ parities were, in one way or another, due to significant efforts from both parties. These efforts were exerted in accordance with the parties’ respective skills and talents. There was a mutual understanding between that parties that they would contribute in equal proportions, even though their contributions may, in some respects, differed in kind. The difference and kind relates to the fact that the wife assumed a more prominent role with respect to household tasks, whereas the same holds true in relation to the husband financially supporting he family. For these reasons, the Full Court determined that the parties’ respective contributions should be assessed at 42.5/57.5 in favour of the husband.

Divorce Property Settlement Guidelines: Guidelines and Initial Financial Contributions

Wallis & Manning reaffirms two well-established principles that are fundamental to the court’s assessment of the parties’ respective contributions. The first that any appeal to precedent in support of a particular assessment of the parties’ contributions must involve some argument establishing the comparability of the cases in question. Merely referring to the facts of a previously decided case is insufficient in this regard. The second principle is that the longer the relationship, the more likely it is that a party’s countervailing contributions may lessen the significance of the other party’s initial financial contributions.