Initial Contributions are very important in terms of the assessment of the parties contributions, but especially in shorter relationships.
The assessment of an initial contribution depends on the value of the initial contribution, what it was put towards, the contributions by the other party during the relationship, having regard to the length of the relationship.
The assessment of initial contributions in a longer relationship with children will be very different from the assessment of initial contributions in a shorter relationship.
Initial Contributions – Distinguishing Jabour
In Horrigan & Horrigan [2020] FamCAFC 25 the Trial Judge ordered that the parties property be divided 78% to the Husband and 22% to the Wife.
The Wife appealed against those orders and ultimately her appeal was dismissed with the Wife to pay the Husband’s costs.
The parties began living together in 2009, married in 2010, had a child in 2011 and separated in 2017 after a period of 8 years.
The child of the relationship was aged 7 at the time of the trial. At the time of trial, the wife was 47 and the husband 64. The Wife was in receipt of maintenance from the husband and the parties had a 7 year old child who lived with the Wife and spent time with the Husband for 5 days each fortnight. They had both been previous married and had children from those previous relationships, all of whom were adults by the time the case came to trial.
At the trial, the Wife contended that the Husband had been physically and sexually abusive to her and argued that her contributions to the relationship were more onerous than otherwise as a result. The trial judge rejected this assertion.
The Husband made allegations that the Wife had gambled excessively during the relationship and that his gambling had resulted in him losing large amounts of money, to the detriment of the pool. The Trial Judge ultimately concluded that the Wife had lost approximately $40,000 from gambling.
The Trial Judge held as follows:
- The asset pool at the commencement of cohabitation was $1,700,000 of which the Husband contributed $1,500,000 and the wife contributed $195,000 or 11.5%;
- The Husband’s ‘initial’ contributions at commencement of cohabitation were far greater than the Wife’s – 88.5%/11.5% in favour of the Husband;
- At the time of trial, the pool was $3,650,000 including three properties;
- The parties contributed equally to the pool since they commenced living together and their contributions were equal up until and following separation;
- When assessing contributions, the trial judge held these should be valued as to 85%/15% in favour of the Husband.
- Having regards to future needs s75(2) factors, there should be a 7% adjustment in the Wife’s favour having regard to income earning capacity and care of the child;
- Therefore, the division of property ordered was 78%/22% in favour of the Husband.
The wife appealed.
In her appeal, the Wife argued that the trial judge had erred as follows:
Error one – The finding that the wife’s had made a contribution of 15% to the net assets, did not reflect that her contributions had conserved the husband’s properties;
- The Full Court rejected this argument as it was not supported by the evidence.
- Even though she helped with the farming duties, not possible to conclude that the Husband’s properties would be useless without her efforts.
Error two – The finding of equal contributions during cohabitation was not reflected in the outcome
- The full Court rejected this argument as “The holistic assessment process requires the myriad of contributions to be identified and weighed.”
Error three – The trial judge had not assessed the contributions holistically and quarantined pre-cohabitation contributions
- The full Court disagreed that the trial judge had undertaken a ‘mathematical exercise.’ In putting a percentage figure (11.5%) on the wife’s initial contribution the Trial Judge was simply attempting to gauge the materiality of the parties’ respective contributions.
- The trial judge did not quarantine the parties’ initial contributions
- Unlike in the case of Jabour, the Trial Judge did not isolate the Husband’s contribution of the farming properties from the myriad of other contributions – nor did the trial judge try to find a nexus between the parties’ contributions and certain items of property
- Jabour involved a long marriage of 24 years. The length of a relationship “informs the holistic assessment of contributions. Here, the parties relationship subsisted for a little less than 8 years.”
The Full Court was clear that the length of the relationship under consideration was the critical issue in considering what weight is to be given to the parties initial financial contributions in determining the just and equitable split of the pool. Over time the weight of an initial contribution by one party may diminish by the myriad of contributions of the other party. With this 8 year relationship, the initial contributions still had a significant impact on the overall outcome.
Furthermore, the Full Court held that whilst parties may have equally exerted themselves during the relationship that does not equate to equality of contribution overall – you do not just draw a line in the balance sheet and the parties thereafter share in any increase in value of the pre-cohabitation assets in the percentage of their contributions during the relationship. “Indeed such an approach would be the very antithesis of the holistic assessment of contributions during the course of the relationship.”
The Full court held that no ground of the Wife’s appeal was made out. The appeal was dismissed with costs.
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