A recent case shows why it is important to resolve family law property settlements sooner rather than later, especially for high wealth clients.
Case study: Task & Westlake
The Full Court of the Family Court heard the case of Trask & Westlake in 2015. The facts of the case are as follows:
- The parties had been married for 13 years.
- There were four children of varying ages 15, 13, 11 and 9.
- The parties separated in 2009.
- The parties did not issue proceedings to resolve property matters until four years later in 2013.
- The Trial Judge at first instance decided that the contributions by the Husband and Wife during the relationship were even. The wife was the primary home maker and parent and the husband was the primary income earner.
- The Husband was a high income earner and at the date of the first Trial the assets of the parties were $7,000,000.00. Post separation the Husband continued to earn a significant income. Between the date of separation and the date of the first Trial the Husband had contributed a further $9,000,000.00 from his employment. The Husband argued that his post separation contributions ($9,000,000.00) were in fact greater than the asset pool of $7,000,000.00 and on that basis he should receive a greater share of the assets.
- Both parties were unemployed at the time of the Trial.
Not surprisingly, the Trial Judge found that after a 13 year marriage with four children, the parties had contributed evenly throughout the relationship. The wife had contributed as the home maker and parent and the husband had contributed as the income earner. These roles were equated.
The Trial Judge then went on to say that the wife should be entitled to an adjustment of 10% based on the Husband’s significant earning capacity, and the fact that he had a financial resource (share portfolio worth around $187,000.00).
The Husband appealed to the Full Court of the Family Court and he argued as follows:
- That his income earned in the four years post separation and before the Trial and first instance ($9,000,000.00) exceeded the actual asset pool of the parties (estimated to be $7,000,000.00).
- That his post separation contributions in earning approximately $9,000,000.00 should be given greater weight than the Wife’s home maker and parent role post separation. In support of that argument he suggested that the youngest child was 9 and that they were slowly moving towards independence, and the substantial time that had passed between the parties separation and the Court Hearing.
The Full Court dismissed the Husband’s Appeal and made the following comments:
- The husband was a high income earner and had achieved great success as a result of his talent, dedication and hard work, but he was also assisted in achieving this earning capacity by the home maker and parent contributions made by the wife since separation.
In other words, the Wife’s contribution as home maker and parent for the children from the date of separation to the date of the first Hearing was equal to the husband earning $9,000,000.00 post separation.
- That the percentage of the total value of the property represented by the husband’s post separation cash injections can be a useful measuring stick: “The assessment of contributions remains a matter of judgment and not of computation”.
In other words, while the husband’s earning of $9,000,000.00 post separation represented more than the asset pool of $7,000,000.00, an assessment of contributions is not done in a mathematical sense, this is a matter of judgment for the individual Judge.
- The Court went on to say it was easy to calculate and value the husband’s contributions directly from his income but it was a lot more difficult to value the wife’s contributions as a home maker and parent as often these contributions are not tangible or able to be reduced to a dollar value. Notwithstanding that, it did not mean that the Court found home maker and parent contributions were equal to and not less important than the Husband’s financial contributions.
- The original decision of the Judge was upheld by the Full Court.
In most cases, it is important to resolve Family Law property settlements sooner rather than later, especially when acting for high wealth clients.