Assessing the Weight of Property Brought Into a Relationship
Divorce Settlement: Introduction
Occasionally, 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’ contributions will depend on:
- The parties’ overall contributions; and
- The use to which the property owned at the beginning of the relationship was put.
Pierce & Pierce (1998) 24 FamLR 377 is a decision of the Full Court where these issues were explored in relation to the husband’s initial financial contributions.
Pierce involved an appeal from the husband against property orders made by the trial judge. At the time of the trial, the husband and the wife were 39 and 37 years of age, respectively. They began living together in 1982 and separated in 1996. There were two children of the relationship. They were 8 and 6 years of age at the time of the trial and they both lived with their father.
The net assets of the parties were approximately $320,000, with the most substantial asset being the former matrimonial home valued at $260,000. At the beginning of their relationship, the husband and wife had assets valued at $226,000 and $11,500, respectively. In 1990, the parties purchased the former matrimonial home with the husband contributing $200,000 and the wife contributing $10,000.
Divorce Settlement: The Trial Judge’s Decision
Save for the parties’ respective contributions to the former matrimonial home, the trial judge assessed contributions as equal. Additional weight was attributed to the husband’s greater contribution to the former matrimonial home, given that it was financed using funds acquired before the parties’ consummated their relationship. This caused the trial judge to assess the parties’ respective contributions at 55/45 in favour of the husband, having regard to the length of the relationship diminishing the weight attributed to the husband’s more substantial financial contributions. The husband appealed on the basis that contributions ought to have been assessed 80/20 in his favour.
Divorce Settlement: The Full Court’s Decision
The Full Court held that the trial judge had erred in his assessment of the parties’ respective contributions. This was based on his failure to attribute sufficient weight to the greater initial financial contributions of the husband and his post-separation contributions in caring for the children.
With regards to initial financial contributions, the Full Court held that their significance is determined by reference to their weight. In assessing their weight, initial financial contributions must be viewed in the context of the parties’ overall contributions. Moreover, the use to which an initial financial contribution is put will also have an affect on its weight.
In examining the trial judge’s findings in light of these principles, the Full Court determined that the trial judge did not attribute sufficient weight to the husband’s initial financial contribution. The trial judge was correct in his finding of equality of contribution concerning the parties’ respective contributions, save for the husband’s initial financial contribution. But the husband’s initial financial contribution should have been accorded greater weight, given that it used to purchase the former matrimonial home which in turn constituted the vast majority of the parties’ wealth. Accordingly, in re-exercising the court’s discretion, the Full Court determined that contributions should be assessed 70/30 in favour of the husband.
Pierce shows that it is not the duration of the relationship that determines the weight to be attributed to initial financial contributions. Instead, the weight of an initial financial contributions is determined by reference to the parties’ overall contributions and the use to which the relevant asset is put.