Australia: Death of special contributions in family law?

Last Updated: 30 July 2017
Article by Monique Robb

IN BRIEF

For a long time, there has been a debate in the family courts between those who believe that a court needs to recognise special and exceptional contributions and others who say there should be no recognition of such a beast. Those who don't support it say that to recognise the existence of a doctrine of "special contribution" creates a gender bias which invariably favours (wealthy) males.

Family lawyers all over Australia eagerly awaited the Appeal court's decision in a case, reported as Smith & Fields, which promised to bring an end to this debate. In this case, the Trial Court recognised the husband's special contribution which led the court to make a split of the marital pool in his favour of 60% because of his "ingenuity and stewardship" running the family business, in which both the husband and wife had worked.

The court on appeal has set that decision aside ordering that there be an equal division of the asset pool and effectively dismissing the notion of a special contribution, special skill or exceptional contribution.

In this case the facts were:

  • parties were married for 29 years
  • they had 3 adult children, self-supporting at the date of the trial, being 31, 30 and 25 respectively
  • the parties started with minimal assets at the beginning of their marriage
  • the husband underwent further training during the course of the marriage to become a builder – he constructed homes for the parties and every 2 years he would build a new home and they would sell the older one
  • the wife was a fulltime stay at home mum
  • given the husband's capacity to use his skills as a tradesman to construct homes, the parties eventually had a sufficient capital base from the sale of their homes which allowed them to start their own construction company
  • both the husband and wife were directors and shareholders
  • the company became very successful and it was found that the husband was the driving force behind it although the wife had had some direct involvement
  • in 2007 the husband met a woman who he later married
  • after separation, the wife became ill which resulted in her not being able to attend a number of directors meetings
  • the husband and wife divorced and the husband remarried and has a child of that union
  • the net assets were found to have a value of between $32,321,000 and $39,816,000

The wife had a number of grounds of appeal which included the Trial Judge failing to take into account that implicit in her taking on the homemaker and parenting roles in the marriage, as the children grew older, her contribution would reduce and ultimately stop. But where parties had agreed to take on different roles, she argued, it was unjust and unfair to devalue the contribution of the party taking on the homemaker and parenting roles. Given that this role is usually assumed by women, the approach would leave women with an unfair burden in the economic consequences.

The court of Appeal found that the contributions of both parties in this lengthy marriage were substantial and significant. The court also found that the wife's contributions to the welfare of the family are significant contributions and that the Act does not suggest that one kind of contribution should be treated as less important or valuable than the other. The court confirmed that by one party freeing up the other party, it results in each party being able to make more contributions within their role.

In this case, the wife's contributions were not limited to her homemaker and parenting roles in the space of the welfare of the family. She also had involvement in the business itself and she contributed prior to the establishment of the business by assisting the husband in improving and selling their homes. Selling their homes and acquiring capital required them to move regularly. As a result, while the husband continued to be involved in the business, the wife had to pack up the house on each occasion and move their belongings without the husband's assistance.

The court found that placing greater weight on the husband's contributions did not do justice to the wife's contributions which led the Appeal court to conclude that there should be an equal division of the asset pool.

When read alongside the Full Court decision in Kane & Kane, in which the Full Court stated "To the extent that the trial judge believed himself to be obliged by authority to determine the division of the property of the parties by reference to some doctrine acknowledging "special skills" in my opinion, for the reasons set out above, he was mistaken. The Act does not require and in my opinion the authorities do not mandate, any such doctrine and if judgments of the Full Court of this Court might be thought to have espoused such a principle in my opinion, they should no longer be regarded as binding" it appears clear that there is no doctrine of "special contributions" which would specify that the party to proceedings who generated significant wealth will be seen to have made greater contributions in the context of a property settlement, than a spouse who has been a primary parent or engaged in making other contributions.

It is important to note that not every case will result in an equal division of assets, the court will also consider other contributions which may lead to a different result. Given that each case turns on its own fact, expert advice should always be obtained for your personal circumstances.

For further information please contact:

Monique Robb, Senior Associate
Phone: + 61 2 9233 5544
Email: mcr@swaab.com.au

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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