Divorce House Ownership
Divorce Settlement: Assessing the Weight of Property Brought Into a Relationship
August 10, 2017

Financial Settlement in Divorce: In the Context of a 23 Year Relationship, the Weight of an Initial Financial Contribution May Not Be Offset by the Other Party’s Contributions So as to Support a Finding of Equal Contributions

Separation agreement

Financial Settlement in Divorce: Introduction

Oftentimes, a party to a property dispute will have owned property at the beginning of the relationship. The weight attributed to such property in assessing the parties’ overall contributions will largely depend upon:

  1. the value of the relevant property at the beginning of the relationship;
  2. the use to which the property was put;
  3. the current value of the property; and
  4. the contributions of the other party.

These issues were explored in the first instance decision of Lawler & Lawler (1988) 12 FamLR 319. The parties had been in a relationship for approximately 23 years and had 2 children. They separated under 1 roof after approximately 20 years of cohabitation. The husband had left the matrimonial home, whereas the wife and the parties’ children continued living there. Roughly 7 years after the parties’ had separated, the wife applied for property orders with respect to a property pool of approximately $440,000.

Financial Settlement in Divorce: Introduction

The Family Court held that the parties contributions should be assessed at 55/45 in favour of the husband. In applying Lee Steere and Lee Steere (1985) FLC ¶91-626, the court held that:

“The longer the duration of the marriage, depending on the quality and extent of a contribution, the more the proportionality of an original contribution is eroded. This occurs not by the passage of time but by the offsetting contribution of the other spouse.”

The offsetting contributions of the wife were not accorded sufficient weight so as to support a finding of equal contributions. The husband had made a substantial initial financial contribution on account of the parties’ first home and its subsequent sale proceeds. The home was purchased in 1966 for $30,000. It was sold in 1971 and the husband made a net profit of $17,000. The sale proceeds were invested into the parties’ sewing machine business. The husband had also contributed on account of his business earnings accumulated during the course of the relationship.

The wife, on the other hand, had made contributions both the husband’s business and as a homemaker and parent. Post-separation, she contributed to contribute as a homemaker and parent to the extent that her health would allow.

For these reasons, the court determined that the parties’ respective overall contributions should be assessed at 55/45 in favour of the husband. However, an adjustment of 5% was made in favour of the wife.

Financial Settlement in Divorce: Concluding Remarks

Lawler is example of the ‘eroding’ effect that the parties’ offsetting contribution may have upon an initial financial contribution, such as a house owned at the beginning of a relationship. The fact that the sale proceeds were applied to the husband’s business was also significant in assessing the weight of his overall contributions. It is also useful illustration of the principle that non-financial contributions are given a real, and not token, weight.