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Fair Settlement in Divorce: How Does the Court Consider Post-Separation Inheritances, Redundancy Payments, Long-Service Leave and a Poor Economy in the Context of a Property Dispute?

family law cases

Fair Settlement in Divorce: Assessing the Weight of the Parties’ Respective Contributions

When it comes to lengthy relationships, the court will usually assess contributions as equal. But what about inheritances, redundancy payments and long-service leave received near end of the relationship? Do they receive special treatment, or are they regarded as acquisition of property to which both parties have contributed? These issues were explored in the influential first instance decision in Burke & Burke (1992) 112 FLR 250.

The parties in Burke married in 1961 and separated approximately 30 years later. The husband was employed at a bank from the beginning of the parties relationship until 1989, when he was made redundant. The wife, on the other hand, was responsible for domestic tasks and raising the parties’ children for the first 10 years of the relationship. She began working on a full time basis in 1983, and received an inheritance after the parties separated. At trial, the husband and wife were aged 55 and 54, respectively.

Fair Settlement in Divorce: The Court’s Assessment of the Parties’ Contributions

In regards to the wife’s post-separation inheritance, Forgarty J determined that it should be excluded from the pool of matrimonial assets. The husband did not contribute to the wife’s inheritance. This fact could have been dealt with by increasing the weight accorded to the wife’s overall contributions. Or the inheritance could have been excluded from the pool of matrimonial assets. The latter approach, Forgarty J held, was the more convenient option.

In regard to the husband’s redundancy payment, Fogarty J determined that the parties had equally contributed to its acquisition. In the context of this particular case, the redundancy payment was treated as “property” for the purpose of determining the parties’ financial dispute. It had been paid to the husband and was subsequently deposited into an approved deposit fund. Had it not been paid, it may have been considered a financial resource. And since the accrual period relating to the payment coincided with the parties’ cohabitation, Forgarty J determined that the parties’ had equally contributed to its acquisition.

The husband’s long-service was also found to have been acquired by virtue of the parties’ equal contributions. It was taken and a capital sum and preserved in pool of matrimonial assets, so it was considered property for the purpose of s 79 of the Family Law Act. As with the husband’s redundancy payment, the period of accrual coincided with the parties’ cohabitation. Accordingly, the court determined that the parties’ had equally contributed to the husband’s long-service leave.

Fair Settlement in Divorce: s 75(2) Factors

Having considered the parties’ respective contributions, the court went on to examine the spousal maintenance considerations set out in s 75(2) of the Act.

In this regard, it was found that the husband should receive a 10% adjustment. At the time of trial, the economic conditions of the country were very poor and the husband had no prospects of obtaining gainful employment. And although the wife was employed, Fogarty J took judicial notice of the fact that she would be competing for an inadequate number of teaching positions with younger applicants, equally qualified applicants. Accordingly, Fogarty J determined that the husband receive 60% of the net value of the parties assets, save for the wife’s inheritance.

Fair Settlement in Divorce: Concluding remarks

Burke underscores the point that the weight attributed to acquisitions of property either at the end of a relationship or post-separation depends on extent to which the parties contributed to the property in question. When it comes to capital sums that accrued during the course of the relationship, it seems plausible to infer that a finding of equality of contributions is likely. But when it comes to property that is both acquired post-separation and regarded as the sole contributions of one of the parties, the court may exercise its discretion to exclude that property from the pool of matrimonial assets.