The Family Court encountered a string of cases during the 1990s which involved “big money” matters where one spouse was credited with being responsible for the build up of substantial wealth, and in which the contributions of the homemaker and parent of the relationship were not recognised as having equal weight to that of the breadwinner.
From more recent cases, it has started to become clearer that there is no doctrine of “special skills or contributions”, and that assets should not be divided based primarily on the fact that someone had special skills to bring in the income and build up the assets.
The much awaited decision of the Full court of the Family Court in Fields & Smith was handed down on 17 April 2015. From this landmark decision it is clear that in matters involving high net-worth parties who built up their wealth and assets together throughout a relationship, the fact that one party produced the income during the relationship is not to be seen as more significant or more important than the role played by the other in making contributions to the family as homemaker and parent.
This case was an appeal on behalf of the wife and cross-appeal on behalf of the husband from property settlement orders which provided that the husband, who was a prominent Gold Coast property developer, receive 60% of the marital assets with a total value of approximately $40 million because of his “ingenuity and stewardship” in creating an extremely successful business empire.
The parties commenced their relationship with nominal assets and were married for 29 years. The wife was a “homemaker and parent” for the couple’s three children but remained involved to some extent in the business which was established and operated during the marriage. The wife appealed the trial judge’s decision. The husband cross-appealed and sought 70% of the asset pool.
The appeal was allowed and the cross-appeal dismissed with costs.
The Full Court comprising three Family Court judges namely the Chief Justice Diana Bryant; Justice Ann Ainslie-Wallace and Justice Michelle May determined that there is no binding rule of “special contributions” and in doing so adjusted the proportion of the original property settlement entitlement of the husband and wife from a division of 60/40 in favour of the husband to an equal division of 50/50 between the parties.
The judgment provides an extensive consideration of the development and application of the concept of “special contributions” and the in principle comparison of contributions to a business and contributions as homemaker and parent. The issue of adequacy of reasons to be provided by a trial judge was also considered. The judgment is a pivotal one on the often vexed issue of special contributions.
In holding that there should be an equal distribution of the parties’ assets, the Court confirmed that there is no binding rule of “special contributions” and endorsed the view of the Full Court in Hoffman & Hoffman where the Court said at paragraph 52:
“… we consider that the point being made is that there is no principle or guideline (or indeed anything else emerging from s 79), that renders the direct contribution of income or capital more important – or “special” – when compared against indirect contributions and, in particular, contributions to the home or the welfare of the family…”
At paragraph 187 of Fields & Smith the Court said:
”In this case, the contributions of both parties over a lengthy period were substantial and significant. The wife’s contributions to the welfare of the family are in themselves significant contributions and s 79 does not suggest that one kind of contribution should be treated as less important or valuable than another”.
Lavan Legal comment
Following the decision of Fields & Smith, one would think twice before mounting an argument that the breadwinner’s contribution during the relationship was of greater value than that of the homemaker and parent.
However, the decision does not impose a presumption of equality of contribution in a long marriage. Each case is different and should be treated accordingly. For example, a case involving a party who has played both a significant role in a company and the build up of wealth, as well as having played a strong parenting role, may be treated differently.
On another note, whilst there was no financial agreement in place in this case, one would hope that each of the parties (and in particular the husband who has since formed a new relationship) carefully consider the advantages of entering into financial agreements to protect their wealth and assets in future relationships.