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Property Settlements – Step Four

Under the Family Law Act 1975, the court and legal system often use a 4 step process to decide what might be an appropriate division of assets between you and your ex partner.

In this 4 week blog series, we are going to explore 1 step at a time to help you understand the family law process you may find yourself involved in. This is week 4 and we are looking at step 4.

If you missed our previous in this series, you can check them out here.

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Step Four: Is it Just and Equitable?

The last step in a property settlement, is to look at the overall division and consider the practical effect ensuring an result which is just and equitable.

For example, where a wife receives 60/40 division of the asset pool in favor of the wife, but the wife will need to sell the former matrimonial home to enable her to afford to pay the husband his share. The parties had been separated for 10 years and during that time the husband had allowed the wife to continue to live in the former matrimonial home where she was solely responsible for the mortgage and bills, without communicating with him about it’s maintenance. The Court may adjust any proposed settlement so as to prevent the wife from needing to sell the former matrimonial home.

Real Life Examples

In this series, we have looked at how the Family Law system uses a 4 step process to determine property matters. Now we will look at a real life example of how this process is applied in 2019:

In Jabour [2019] FamCAFC 78 (10 May 2019) the Full Court (Alstergren CJ, Ryan & Aldridge JJ) heard the wife’s appeal against Judge Mercuri’s property order, in particular a contributions-based assessment of two-thirds: one third in favour of the husband after a 25 year marriage that produced 3 adult children.

The husband owned a half interest in three parcels of land (comprising 30, 30 and 44 acres) at cohabitation, having bought them from his father in 1975 for $26,000. After 11 years of marriage, he sold his interest in the 30 acre lots to acquire all of the 44 acre lot. Originally used for a farm, the property was rezoned for residential use in 2010 and was sold in October 2017 for $10,350,000. The net pool was $9,033,913 plus superannuation of $371,686.

At first instance, the Court found  that the parties’ contributions during cohabitation were equal; observed that the value of the property represented almost 90 per cent of the non-super pool; cited Williams [2007] FamCA 313 and Zappacosta [1976] FamCA 56 when assessing contributions; and concluded that the husband “bringing … Property A … into the relationship has made a significant contribution which needs to be appropriately recognised in the division of property between the parties”.

On appeal the Full Court said in assessing contributions at 53:47 in favour of the husband:

There is no doubt that they both worked hard and over many years they both contributed to the full extent of their capacity within the roles each took within the marriage.

“Whatever was the value of the property at the commencement of the relationship its significance has been largely lost given the myriad of the contributions by each of the parties to their various business ventures, through their employment and care of the family over a long relationship, including the contributions made to the retention of the property which we have discussed above. There is no doubt that they both worked hard and over many years they both contributed to the full extent of their capacity within the roles each took within the marriage. As was said in Wallis … it is important that this miscellany of other s 79(4) factors is not accorded a subsidiary role in the assessment of contributions.”

“The reason that there is significant property to be divided is that Property A was fortuitously rezoned which caused its value to skyrocket. … [T]his increase in value does not favour one party over the other. Thus although the property was introduced by the husband it was merely the springboard for the events which followed and relevantly the revaluation.”

“Throughout the relationship the parties’ contributions to this property were no different to their other contributions.”

“The only contributions that point away from a finding of equality of contributions where both parties worked very hard to support and maintain their family over 27 years, are the initial contributions made by the husband of the former matrimonial home and Suburb A properties. Although the former was not the subject of the final division, it nonetheless was a contribution of some utility as it served as the family home for many years.”

“Giving the appropriate weight to these contributions, we consider that they are properly reflected by finding that the contributions favour the husband by 53 per cent and the wife 47 per cent. As there are no other matters to be taken into account, this will be the division of their non-superannuation property. …”

This case is a good example of how contributions before a relationship and during a relationship are assessed.

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If you have questions about property settlement matters, you can contact one of our experienced staff to discuss how the Family Law system may apply to you.

Ebony Cunningham – Senior Associate

Ebony graduated with Honours in a Bachelor of Law and Legal Practice and a Bachelor of Behavioural Science (Psychology) in 2011.

Ebony specialises in the areas of family law, criminal law and civil litigation. Ebony is a member of the complex criminal panel and the family law general panel for the Legal Services Commission of South Australia.

Contact: ebony@bersee.com.au
(08) 8725 6969

Legal Secretary: Ms Lauren Lewis
Contact: lauren@bersee.com.au