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Property in Divorce Settlement: Is Substantial Wealth a More Valuable Category of Contribution?

Property in Divorce Settlement: Weighing Substantial Wealth Against Domestic Contributions

From 1999 until 2006, there was a series of a cases that dealt with the issue of whether additional weight should be attributed a party’s immense wealth when assessing the parties’ respective contributions. This gave rise to some controversy on account of the fact that immense wealth and substantial financial contributions are the only type of contributions that attracted additional weight. Proponents of this view did not lend any support to the prospect of attributing additional weight to domestic contributions.

Whether additional weight could be attributed to substantial financial contributions was considered by the Full Court in Fields & Smith [2015] FamCAFC 57. Fields involved an appeal by the wife against a property order causing a 60/40 division of matrimonial property in favour of the husband.

The parties were married for 29 years. Neither of them had any significant assets when they began living together. The husband was primarily responsible for financially supporting his family as an owner of a successful construction company. The wife, on the other hand, was mainly responsible for caring for the parties’ 3 children, although she had some involvement involvement in the husband’s business operations.

The main issue on appeal related to the parties’ contributions. The wife submitted that a proper exercise of judicial discretion would have awarded her 50% of a net asset pool of $32-$39 million dollars. The husband, in contrast, submitted that he should receive 70% of the parties’ net assets.

Property in Divorce Settlement: The Full Court’s Decision

The Full Court allowed the wife’s appeal. This was based on its finding that the trial judge had failed to provide adequate reasons in support of his finding that the husband’s contributions outweighed the wife’s.

The trial judge found that “…the husband’s business acumen, skill and talents…have been significantly greater than those of the wife…” However, the trial judge also found that the wife’s domestic contributions were significantly greater than the husband’s. Since domestic contributions are given real, rather than token, weight, the Full Court held that these findings did not explain the trial judge attributing greater weight to the husband’s financial contributions.

This determination was supported for the the Full Court’s rejection of the notion of a class of contribution (e.g., substantial wealth) attracting greater weight than other categories of contribution:

“..the words of s 79 do not provide endorsement for any category of contribution related to any class of property (for example, high wealth) being, by virtue of that category or class, more valuable or important that another.”

Instead, contributions are to be assessed on the facts of the case at hand. And since the trial judge did not make any factual findings that may have justified an assessment of contributions in the husband’s favour, the Full Court allowed the wife’s appeal.

Concluding Remarks

Fields serves as a reminder that the party’s domestic contributions are not necessarily overshadowed by the tremendous industry and substantial financial contributions of the opposing party. The husband in Fields was undoubtedly very shrewd businessman. He had no assets and the beginning of the relationship and grew the matrimonial asset pool to $39 million at the date of trial. As extraordinary as this might seem, it was not enough to justify a more favourable assessment of contributions.

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