DIVISION OF PROPERTY IN SHORT-TERM RELATIONSHIPS

 

What is a short term relationship and relevant factors assessed by the Courts

Generally, a short-term relationship is five (5) years or less in duration. 

 

As with all property division matters, the Court has a wide discretion and it depends on the facts and circumstances of each case. The Court applies the four (4) steps to a short-term relationship as it does to any other property division under section 79 of the Family Law Act (“the Act””): 

 

1.    Value of assets in property pool; 

2.    Contributions (financial and non-financial); 

3.    Section 75(2) of the Act or “future needs” factors; and

4.    Division that is just and equitable. 

In short term relationships:

1.    It is not unusual for Courts to apply an asset-by-asset/separate pool approach rather than the more common global approach (an overall proportion of total assets); and 

2.    Giving considerably more weight to initial contributions than in longer term relationships. 

 

Cases

Anson & Meek

The case of Anson & Meek [2017] FamCAFC 257, entailed a marriage of approximately five years with no children. At the time they started living together the husband held 96.5% of the property of the parties, and the wife 3.5%. “The nature of the parties … interests in property did not change … during cohabitation.” The primary asset was a farming property which the husband purchased prior to the marriage for $1,000,000.00, which increased in value by about $800,000 at the time of trial.  The trial Judge ruled that:

- the parties’ contributions were equal during the marriage; 

- 80/20 in favour of the husband due to the initial contributions; 

- then made an adjustment of 20% in favour of the wife for “future needs”, due to her depression and lack of income earning capacity. 

The husband appealed the trial Judge’s ruling of a 60/40 split. The Husband maintained the Trial Judge’s assessments were “outside an acceptable range particularly having regard to the short-term period of cohabitation in circumstances where [there was an] overwhelming financial contribution by the husband,” and “the increase in value of the farming property … in circumstances where the property was an initial contribution by the husband.”

In ruling on behalf of the husband by a majority, the Full Court of the Family Court stated:

“If the point is that, where there is a short marriage, where there are no children and where the parties’ contributions to their assets and to welfare of the family from the commencement of the relationship to the time of the hearing is equal, any disparity in initial financial contributions is of critical importance in determining the overall contributions of the parties, then such a position is easily arrived at by the application of principle alone.”

And thereafter:

“The equality of contributions other than the initial financial contributions made the latter of critical importance, in the circumstances of this case. They so favoured the husband that we do not see the circumstances justified a result that the wife received 40 per cent of the property even on the basis, as we have said, that there should be a generous adjustment in her favour. Quite simply, the result is disproportionate to the facts … In other words, we consider that the award made was unreasonable … and that there has been an error in the application of principle.”

The matter was remitted to the Federal Circuit Court for rehearing. 

Rose & Mitchell

The case of Rose & Mitchell [2016] FCCA 771, was a marriage of just over three (3) years with one child. The asset pool was relatively modest, the major asset being the former matrimonial home which the husband had purchased prior to the marriage. The Court found the wife had “the major burden of looking after the child.” The Court assessed the parties’ contributions at 90/10 in favour of the husband. The Court awarded the wife a further 15 per cent for future needs as the primary care giver of the child, the final outcome being 75/25 per cent in favour of the husband. 

Summary

In summary, the financial contributions of each party, particularly initial contributions, will be given paramount consideration by the Courts in short term relationships. Non-financial contributions may still be relevant but harder to “offset” against significant initial contributions, compared to longer relationships where these are eroded over time. “Future Needs” may also come into play but less so in childless relationships. 

 

John Castanho 
Special Counsel/ Lawyer
Simonidis Steel Lawyers
Brisbane, 13 December 2018