FAMILY LAW
DEFINITIONS
A. Legally Recognised Relationships: Married and De Facto B. Parents
PROPERTY
A. Financial Agreements and Consent Orders
B. Time Limits for Instituting Property Settlement Proceedings C. Threshold Requirement for De Facto Property Jurisdiction D. Disclosure of Property
E. What is Property?
F. Is it Just and Equitable to Make an Order?
G. Identifying and Assessing Contributions H. Superannuation
I. Types of Financial Contributions – gifts, lottery wins and inheritances J. The Effect of Violence and/or other Negative Conduct on Contribution K. Additional Factors / Assessing Future Needs
L. Interests of Third Parties M. Bankruptcy
N. Injunctions and Transactions to Defeat Claims O. Is the Result Just and Equitable?
P. Divorce FINANCIAL SUPPORT
A. Child Support
B. Spousal / De Facto Maintenance
Provisions are different depending on whether the couple was married or de facto. Therefore provisions will be cited as: section (married)/(de facto)
All references to legislation are to:
• Family Law Act 1975 (FLA) (unless otherwise stipulated)
• Family Law Rules 2004 (FLR)
• Child Support (Assessment) Act 1989 (Cth) (CSA)
I. TYPES OF FINANCIAL CONTRIBUTIONS – GIFTS, LOTTERY WINS AND INHERITANCES Gifts
• In the case of gifts received from third parties (such as the parents of one of the parties) during marriage or a de facto relationship, the party to whom a gift is made is normally regarded as having ‘contributed’ it (In the Marriage of Gosper)
• However, the timing of receipt and the duration of the relationship will be relevant: a gift received early on in a long union is likely to be given less weight as a contribution than a gift received close to the time when parties separate, or a gift received during a short union (Pellegrino)
• All contributions by parents (and other relatives) to the property of the marriage will be taken to be contributions made on behalf of the party who is the child of the parents (or the
parties’ relative), unless there is evidence that it was not the parent’s intention to benefit just their child (In the Marriage of Kessey)
Lottery Wins
• Lottery winnings during a marriage or de facto relationship may be considered as a contribution of one or both of the parties, depending on the circumstances.
• The issue of who purchased the ticket is not decisive.
• Where the marriage involves each contributing their income (or domestic services) towards the joint partnership, the purchase of the ticket is likely to be regarded as a purchase from joint funds, and the contribution of the prize would be seen as an equal contribution by the parties (Zyk)
• Lottery wins before marriage/commencement of a de facto relationship or after separation are likely to be viewed as a contribution on the part of the party who purchased the ticket (Farmer and Bramley)
Inheritances
• An inheritance is more likely to be treated as the property of the beneficiary spouse or partner if it is received late in the relationship and if there are ‘ample funds from which an appropriate property settlement can be made and a just result arrived at’ (Bonnici)
• Bishop v Bishop:
- FACTS: H’s inheritance was the only asset of the parties. W had made main financial and homemaking contributions.
- HELD: Full Court made a property adjustment order from the inheritance but noted that if could achieve a just and equitable result from other property then inheritance would be treated as an entitlement of party receiving it.
Compensation for Personal Injury
• Depending on the circumstances, a damages award for personal injury may also provide a basis for both parties to claim that they have made relevant contributions.
• The portion of the award that relates to pain and suffering will be regarded as a contribution of the injured party, while their care by the non-injured party will amount to a contribution by the latter (Danford v Danford)
J. THE EFFECT OF VIOLENCE AND/OR OTHER NEGATIVE CONDUCT ON CONTRIBUTION Impact of Negative Conduct on Contributions
• Kowaliw: Losses should usually be shared equally unless one of the parties has:
- embarked on a course of conduct designed to reduce or minimise the effective value or worth of the matrimonial assets (e.g. transferring assets to someone else), or
- acted recklessly, negligently or wantonly with the assets, the overall effect of which has reduced or minimised their value (e.g. going on luxury holiday overseas with a new partner, eating out at expensive restaurants, investing in something they know has no prospects).
• Situations where negative conduct may have consequences in property division:
- Damage to assets
- Failure to maintain assets (e.g. house if occupying it after separation) - Wilfully depriving self of income
- Tax debts depending on how acquired - Deliberately causing losses to the other party
- Reduction of pool of assets during marriage through gambling or addiction (waste)
• Martin & Wilson:
- FACTS: 11-year de facto relationship. Ms W withdrew $90K of her super at start of litigation but lost it in a failed business venture. Mr M argued she was reckless, negligent or wanton.
- HELD: no evidence that she embarked on a course of conduct designed to reduce or minimise the property. She was attempting to enhance her super. She may have been naive, but no reason to show that the venture was impossible. Court took into account her loss of super in deciding not to make a 5% adjustment in her favour.
• A failed investment made by one of the parties during the relationship is ‘part of the financial ups and downs of married life’, it is not negative conduct that must be taken into account for the purpose of assessing contributions (Charles)
Impact of Violence on Contributions
• Domestic violence is a relevant factor when assesses contributions if there has been a course of violent conduct by one party towards the other that is demonstrated to have had a
‘significant adverse impact’ upon that party’s contribution to the relationship or made contributions more ‘arduous’ (Kennon)
• Post-separation contributions ‘of any kind’ (including domestic violence) are relevant to determining a just and equitable outcome (Baranski)
• Note that Kennon principle is infrequently applied which has resulted in relatively small adjustments for violence in the past.
• The impact of family violence might also be considered under section 75(2)(o)/90SF(3)(r) – The court can take any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account.
• Marando:
- FACTS: Italian couple, married for 48 years, three children. Evidence from wife that husband had been physically and psychologically abusive towards the wife throughout the entire marriage. Children supported this evidence.
- HELD: court adjusted wife’s contributions by adding 5% (that is, giving her 55% on the basis of contributions instead of 50%) of the net asset pool of $982,000.
K. ADDITIONAL FACTORS / ASSESSING FUTURE NEEDS
• In addition to identifying and assessing contributions, the court must take into account the factors set out in section 79(4)(d)–(g)/90SM(4)(d)–(g) when making an order for property division.
• The main focus are the factors listed in section 75(2)/90SF(3), which are brought into section 79/90SM by section 79(4)(e)/90SM(4)(e).
Section 79(4)(d)–(g) / 90SM(4)(d)–(g) Factors
• In considering what order should be made, the court shall take into account (79(4)/90SM(4)):
(d) the effect of any proposed order upon the earning capacity of either party; and (e) the matters referred to in subsection 75(2)/90SF(3) so far as they are relevant; and (f) any other order made under this Act affecting a party to the relationship or a child of the
relationship; and
(g) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
Section 75(2) / 90SF(3) Factors
• In considering what order should be made, the court should take into account the following factors:
Age and health – 75(2)(a)/90SF(3)(a)
• The court shall take into account the age and state of health of each of the parties.
Financial resources and employment capacity – 75(2)(b)/90SF(3)(b)
• The court shall take into account the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful
employment.
Care of children – 75(2)(c)/90SF(3)(c)
• The court shall take into account whether either party has the care or control of a child of the relationship who has not attained the age of 18 years.
Ability to support self and children – 75(2)(d)/90SF(3)(d)
• The court shall take into account commitments of each of the parties that are necessary to enable the party to support himself/herself and a child or another person that the party has a duty to maintain.
Responsibility to support other person – 75(2)(e)/90SF(3)(e)
• The court shall take into account the responsibilities of either party to support any other person.
Eligibility for pension, allowance or benefit – 75(2)(f)/90SF(3)(f)
• The court shall take into account the eligibility of either party for a pension, allowance or benefit under Australian law or the law of another country, or under any superannuation scheme, and the rate of any such pension, allowance or benefit.
Standard of living – 75(2)(g)/90SF(3)(g)
• The court shall take into account a standard of living that in all the circumstances is reasonable.
Creditor’s debt – 75(2)(ha)/90SF(3)(i)
• The court shall take into account the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt.
Duration of relationship – 75(2)(k)/90SF(3)(k)
• The court shall take into account the duration of the relationship and the extent to which it has affected the earning capacity of the parties.
Protection of parent – 75(2)(l)/90SF(3)(l)
• The court shall take into account the need to protect a party who wishes to continue that party's role as a parent.
Cohabitation with another person – 75(2)(m)/90SF(3)(m)
• The court shall take into account, if either party is cohabiting with another person, the financial circumstances relating to the cohabitation.
• i.e. court should consider any financial impact of re-partnering.
• DJ v AJ:
- FACTS: husband complained that since ‘the wife had for some years been in a relationship with a gentleman in Hobart, the court thus erred in failing to take into account the financial benefit to the wife of that relationship’.
- HELD: The Full Court agreed with the trial judge that section 75(2)(m) was not established as there was no cohabitation. There was no evidence that the relationship was other than boyfriend– girlfriend.
Child support – 75(2)(na)/90SF(3)(q)
• The court shall take into account any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future.
Other circumstances – 75(2)(o)/90SF(3)(r)
• In considering what order should be made, the court shall take into account any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account
Important Guidance on Additional Factors
• The section 75(2)/90SF(3) factors are not limited to making adjustments on the basis of need.
Rather, the fact of a disparity in the earning capacity of the parties may be enough to warrant a further adjustment on the basis of section (Waters v Jurek).
• Apply a global approach when making adjustments based on the additional factors (T v T)
• The section 75(2)/90SF(3) factors should be considered not just individually, but overall (Tomasetti).
• In high asset cases where the nexus between the wife’s contribution and the property is weaker, the court can utilise the section 75(2)/90SF(3) factors to give the wife a more generous outcome (Figgins):
- FACTS: the relationship was short and the property comprised the husband’s inheritance worth $22.5 million.
- HELD: Full Court awarded the wife $600,000 for contributions, and a further $1.9 million on the basis of section 75(2).
