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Property settlement – court adjusts in favour of wife inspite of husband’s initial contributions

Posted by Benchmark Lawyers in Uncategorized | 0 comments

Telfer [2016] FCWA 2 (4 January 2016)

Keywords: Property – initial contributions – adjustments under s 75(2) – post separation contributions – court makes adjustment in favour of wife

Background

The Husband and Wife were married for 7 years and had 2 children, 6 and 8 years old, during which they accrued assets worth $4.25M. Initial contributions were $168,000 from the wife and $960,000 from the husband.

Held

Walters J took into consideration post-separation contributions. The husband is qualified builder and is earning $585,358 whereas the wife was doing part-time teaching while taking care of the children (income $32,926). Between 2004-2010, the husband had undertaken further studies to improve his skill set. In 2011, the parties separated.

At [198] “Clearly, the husband’s financial contributions at the commencement of cohabitation and during the course of the relationship far outweighed those of the wife. That is not to say, of course, that the wife did not make direct and indirect financial contributions to the acquisition, conservation and improvement of the parties’ property.”

The court came to a conclusion at [234], Walters J said:

In all the circumstances (including the seven-year period of cohabitation and the period between separation and the date of trial), I conclude that between 60% and 65% of the overall property pool should be awarded to the husband on the basis of his contributions from the commencement of cohabitation to the date of trial, and the balance to the wife on the same basis. As it would be intellectually dishonest of me to choose either the higher or lower figure within the range I have specified, I shall fix the midpoint – being 62.5% – as being appropriate.”

S 75(2) factors were taken into account in the split. The Court considered the husband’s substantially greater earning capacity and the wife’s primary care of the children to be the more significant factors. Other factors included their age (wife 47 and husband 50), age of children, wife’s earning capacity and husband’s support for new partner and child.

In relation to the husband’s earning capacity, the court said at [250]:

The husband’s income-earning capacity would still far outweigh that of the wife if his level of income reduced by 10%, 20% or even 30% or more. After all, and as Mr Childs conceded, the husband had a very healthy earning capacity even before the parties commenced cohabitation, and well before he very substantially his “increased his skill set” by obtaining appropriate qualifications as a builder. In addition, the husband will retain significant property assets and has the skills and drive to use them, and his substantial earning capacity, to generate further income by way of property development and/or capital appreciation.”

At the end, an adjustment of 7.5% was made under s 75(2) in favour of the wife. Therefore, the husband’s percentage would drop by 7.5 making the overall split 55% to the husband and 45% to the wife.