Family Law Property Settlements and “Special Contributions”

Deciding on how to divide the assets and liabilities after the breakdown of a relationship is not an easy task. One of the factors the Family Court takes into consideration is what each party has contributed to the relationship, both financially and non-financially, during the relationship.

Until recently there has been an informal notion of “special contributions”. This notion was argued by a wealthy party in order to lay claim to a significant proportion of the assets due to their “exceptional” skill or talent in building that fortune. Such an argument is usually made in matters that involve large amounts of money and highly educated, qualified or talented people, such as investment bankers, property developers, or even successful entertainers.

In a recent case of Kane v Kanehowever, the principal of “special contributions” was challenged. This case involved a couple who separated in 2009. The total assets were calculated to be $4.2 million, of which $3.4 million formed part of a Superannuation Fund.

Upon establishing the superannuation fund with equal contributions from both parties, the husband decided to invest a large proportion of those funds in the share market. This investment paid off and a large profit was made. At the hearing, because of the Husband’s “skill in selecting and pursuing the investment” he was awarded two-thirds of the balance of the fund.

The Wife lodged an appeal to the Family Court of Australia. On hearing the appeal the Family Court overturned the decision of the Judge of the lower Court stating that the Judge had placed “unacceptable weight” on the Husband’s “special skills”. It was noted:-

“It is difficult to correlate effort and skill (even if special) with result. Frequently, the financial result of a contribution (whether physical or intellectual labour or imagination, foresight and perspicacity) will be influenced by external factors beyond the control of the party contributing”.

The appeal was therefore granted and the matter has been sent back for a re-hearing before a different Judge… so watch this space!

In another recent case of Smith v Fields, a wealthy Gold Coast property developer was awarded 60% of the couple’s $30-39 million asset pool because of his “ingenuity and stewardship” running the family business in which they both worked.

This was despite the Judge acknowledging that the parties had a “practical union of both lives and property” with both making contributions in their respective sphere. Again this matter has been appealed and we are waiting for a decision.

Overall it appears that the Courts may no longer be accepting a “special contribution” argument for a greater percentage adjustment of the net assets. Time will tell.

This is a very complicated area of the law and you should always get expert advice from an experienced Family Lawyer to know where you stand. Brazel Moore Lawyers can provide you with discreet, sensitive support and advice to assist you. Call (02) 4324 7699 to speak to an experienced Family Law Solicitor.