Financial Settlements In “Short” Relationships
By Elizabeth Moore, Lawyer, MST Lawyers
Where a relationship of fewer than seven years breaks down, the Australian Family Law Courts usually place significant weight on the financial contributions made by the parties in the short time they spent together. In the recent case of Anson & Meek, the court considered the very significant initial financial contributions made by one party against the non-financial contributions, lost income earning opportunities and the future needs of the other when determining what each party should receive by way of final settlement.
In Anson and Meek the marriage had lasted for five years, and the parties were in their mid-50s at the time of trial. There were no children resulting from the marriage. The couple had assets both in Australia and overseas. The court found that the husband brought 96.5% of the property pool into the relationship when the parties first started living together. This comprised of a farming property in Australia and other assets overseas.
During the marriage, the husband and wife moved overseas to follow the husband’s employment. The wife resigned from her paid employment in Australia and left behind qualifications and a significant income package of $180,000 plus benefits. She was not able to secure similar employment while overseas with the husband or when she returned to Australia. At the time of trial, the wife worked part-time, earning approximately $65,000 per annum.
At the time of trial, the husband’s assets totalled approximately $3. 6 million. His Australian assets were valued at $1.9 million. The wife’s assets totalled approximately $126,000.
In considering the financial contributions, the court acknowledged the husband’s overwhelming financial contributions but also acknowledged that the wife paid the rent for the parties’ apartment from March 2011 to January 2012.
The court gave significant weight to the unique non-financial contributions made by the wife to the relationship, including her following the husband overseas and giving up her employment in doing so. The wife’s lawyers argued that the wife’s loss of future earnings should be considered with significant weight. The court noted that the wife made direct financial contributions to the maintenance of the property held by the husband. These contributions included preparing the property for the parties to move into after the former farmer vacated the premises, the book-keeping for the property and physical work on the farm comprising planting trees and researching different types of grain. Both parties looked after the farm during their separation.
The judge took into account evidence from the wife’s psychologist that she was ‘suffering from adjustment disorder with depression’. She said her condition was primarily attributable to the end of the marriage, the circumstances in which it occurred and the loss of her career and the ongoing litigation. The husband had a young child that resulted from another relationship post-separation.
At first instance, the trial judge decided that the wife should receive a 20% adjustment based on contributions and an additional 20% after considering the wife’s future needs. A total 40% of the value of asset pool overall.
The trial judge stated that in consideration of the factors (particularly given the wife’s reduced earning capacity), the outcome was just and equitable.
The husband appealed the decision on the basis that the allocation to the wife was too generous given his significant financial contributions and ultimately the appeal was allowed.
On Appeal the Full Court took the view that the trial judge erroneously gave too much weight to the wife ‘s lost income and the calculations on this point. The Full Court found that the calculation of loss of income for the wife was flawed because there was not sufficient evidence to support the formulation of the calculation.
The Full Court found that it was important for cases with similar factors be considered in order to assess a just and equitable outcome. As a result, the appeal was allowed, with two of the judges stating that the 40% outcome was too favourable to the wife and ‘disproportionate to the facts’. The case was remitted for rehearing.