The Facts

Husband brings valuable property to marriage

The husband and wife met in 1988 and were married in 1991. They had three children together who were all adults at the time of the first hearing.

When he was 12 years old, the husband had acquired a half interest in three blocks of land from his father, being Properties A, B and C. The husband and his father entered into a mortgage of $26,000 for this interest.

In 1988, the husband and the co-owner of the lots reached an agreement to divide the properties between them. This resulted in them each owning half of Property A, the husband owning all of Property B and the co-owner owning all of Property C.

In September 2001, the husband sold Property B for $215,000.

He used this money by contributing $105,000 to the family, and another $105,000 to acquire the co-owner's interest in Property A.

Husband and wife split up and commence property settlement proceedings

The husband and wife's marriage initially broke down in 2013. After several attempts at reconciliation, they separated in May 2015.

In the property settlement proceedings, the parties both conceded that their contributions during the marriage were equal.

The main issue of contention was Property A, which was rezoned in 2010 into an urban growth zone, permitting its use for residential purposes and significantly boosting its value.

By the date of the final hearing, Property A was sold for over $10 million, a significant leap from the $26,000 initial investment.

In May 2018, property orders were made in the Federal Circuit Court, awarding the wife 34% and the husband 66% of the net $9 million from the sale of Property A.

The wife lodged an appeal with the Family Court of Australia, seeking a larger share.

case a - The case for the wife

case b - The case for the husband

  • My husband quite rightly concedes that our contributions during our relationship were equal. Therefore, all our assets, other than Property A, have been divided equally. Given the extent of the financial and non-financial contributions I made during our long marriage, Property A should also be divided equally.
  • By giving my husband a 66% share of Property A, the trial judge effectively gave my husband credit for the serendipitous increase in the property's value. Property A only increased in value because it was rezoned, not because of anything my husband did personally.
  • In fact, but for me, we wouldn't have even benefited from the rezoning of Property A. Although we were struggling financially, I agreed to my husband using half of the funds from the sale of Property B to gain sole ownership of Property A.
  • I then continued to support my husband in his decision to maintain ownership of Property A, pending possible rezoning. This was a significant contribution to our marriage. Instead of selling the property as I would have preferred, we had to borrow money from my husband's family to support our children.
  • The court should order that the proceeds from the sale of Property A be divided equally between me and my husband.
  • It's true that my wife and I contributed equally during our marriage. However, the law requires the court to have regard to Property A's value at the time of these proceedings, not at the time my wife and I got married. Therefore, I contributed a $9 million asset to our marriage, which I should get the benefit of as I leave the marriage.
  • But for me bringing Property A into our relationship, there would be no property of significant value to divide. In this context, a 34% allocation to my wife seems more than fair.
  • In addition to Property A, I have made other contributions justifying a 66% to 34% split. Prior to our marriage I purchased a property, which I then made available as our family home. I also repaid the $130,000 loan that my mother made to my wife and me. I paid all the outgoings for Property B and C until their sale. I paid for a family holiday during our period of attempted reconciliation, as well as the cost of a holiday my wife took on her own. I also paid child support at a higher rate than required.
  • The court should dismiss the appeal and uphold the 66% to 34% split of the value of Property A.

So, which case won?

Cast your judgment below to find out

Nick Burton
Divorce and separation
Stacks Collins Thompson

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