One of the fundamental steps in determining a property settlement is to assess the contributions of both parties to the acquisition, conversation and maintenance of the property. Assessing their contributions, both initially and during a relationship, is fundamental to this step of the process.
What credit should be given where one party has made significant initial contributions was highlighted in the case of Anson & Meek [2017] FamCAFC 257. The Family Court had to consider an appeal where the argument of the Husband was that the trial judge didn’t give enough weight to his initial contributions when making property settlement orders.
The case highlights the importance of obtaining advice about likely range of outcomes in property settlement matters, rather than relying on any “range” said to be established by “short marriage cases”. Rarely are two cases identical, and even if they are, the likelihood of them being decided in the same way by different judges is slim.
The Facts of the Case
The parties were married in April 2008 and separated in March 2013. Their relationship lasted for approximately 5 years. They had no children together.
The major asset in their asset pool was a farm purchased for just over $1,000,000 in mid-2007. The husband bought this property using his savings of $400,000. He had borrowed $745,000 to fund the rest of the purchase price, stamp duty and related costs. By the time of the trial, the farm was worth $1,700,000.
When they started living together, the husband held 96.5% of the property of the parties, and the wife held 3.5%. The initial contributions of the parties almost exclusively favoured the husband. During the five-year relationship the parties’ respective contributions did not change.
The trial judge found that although the parties made equal contributions during the relationship, the initial contributions of the husband resulted in an overall split of the pool, based on their contributions, 80% to the husband and 20% to the wife.
However, the trial judge made final orders dividing the pool of assets and superannuation between the parties in the proportions of 60% to the husband and 40% to the wife, finding a 20% adjustment in favour of the wife for Section 75(2) factors (commonly referred to as “future needs/future factors”) was appropriate in the circumstances.
The husband appealed the final 60/40 division in his favour. The Husband argued that the outcome was outside an acceptable range of outcomes, because of the short length of the relationship and the husband’s significant initial contributions. The Husband’s barrister argued that the trial judge did not consider comparable cases which were referred to the trial judge, which counsel argued established a range of outcomes applicable to the case given these factors.
The Full Court allowed the husband’s appeal, although the judgment was divided.
His Honour Justice Murphy provided an analysis in his judgment of the “short marriage cases” referred to the Court by the barrister for the husband. The Full Court found that the trial judge’s failure to do so in first instance was an error.
The cases established a “range of outcomes” of between 92% and 95% in favour of the party making the significant initial contribution, where similar circumstances existed.
On that basis, his Honour found that the trial judge had made an error by failing to take into account relevant considerations, which included an assessment of contributions in cases comparable with the present.
The majority judgment of Justices Aldridge and Cleary gave a different view. They confirmed that while comparable cases could be looked at to derive consistency in the application of principles of law, they were not helpful to the exercise of the Court ’s discretion when making orders for property settlement. Their Honours considered that discretionary error was best illuminated by reference to comparable cases.