The Full Court of the Family Court of Australia (the Full Court) has recently delivered three decisions considering contributions in financial cases – one relating to contributions made at the beginning of a relationship, one concerning contributions during the relationship and another concerning contributions made after separation.

Harriot & Arena [2016] FamCAFC 69

The Facts

The parties met in Sydney in April 1999, where Ms Harriot lived. Mr Arena was visiting from Vanuatu.

In January 2000, the parties commenced living full time in Vanuatu where they remained in a de facto relationship until separation in 2011.

To prepare for the move to Vanuatu, Ms Harriot sold her house in New South Wales and received net proceeds of $80,000 from the sale. She also varied the parenting orders in relation to a child from a previous relationship and put her job “on hold”, albeit she subsequently resigned three years later.

Of the $80,000 Ms Harriot received from the sale of her house, she used $30,000 towards the purchase of the business managed by Mr Arena in Vanuatu, and she contributed a further $30,000 towards the purchase of a home in Vanuatu.

Following her return to Australia after the separation, Ms Harriot initiated a proceeding in the Family Court of Australia for a property settlement between herself and Mr Arena.

The Decision at Trial

A trial, the Judge found that Ms Harriot’s financial contributions occurred in Vanuatu and that, consequently, those contributions did not meet the geographical requirement in section 90SK of the Family Law Act 1975 (Cth), which essentially requires that the contributions occur in Australia. As a result, the Court did not have the power to deal with the matter and a property settlement could not occur. Ms Harriot appealed the trial Judge’s decision.

The Issues on Appeal

On Appeal, the Full Court found that:

  • Ms Harriot’s financial contributions to the property of the de facto relationship, whether they were before or after the relationship commenced, were made “in relation to” the de facto relationship.
  • The proceeds of the sale of Ms Harriot’s house in New South Wales was “contributed” at the commencement of the de facto relationship, in similar fashion as to how the proceeds would be regarded as an “initial contribution” in the case of a married couple. The proceeds were held in New South Wales and as a result, they were “contributed” in that state. The fact that the proceeds were later used to acquire property in Vanuatu was irrelevant. What was important was that Ms Harriot sold her home to embark on the relationship with Mr Arena.
  • Ms Harriot’s financial contribution of $80,000 was substantial in the circumstances of the de facto relationship.

The Decision at Appeal

As a result, the appeal was allowed and Ms Harriot was able to continue the proceeding to obtain a property settlement.

Palkovich & Palkovich [2016] FamCAFC 134

The Facts

The parties commenced cohabitation in Souteast Europe in 1981. The husband immigrated to Australia for work in 1988, whilst the wife and the parties’ two children remained in Southeast Europe.

In 1990, the family emigrated from Southeast Europe to Australia, however, they returned to the Middle East in 1994, as a result of the husband’s employment. The children completed their schooling in the Middle East.

In 2001, the parties’ daughter returned to Australia to attend university. In 2003, the parties’ son returned to Melbourne for the same purpose. Thereafter, the wife regularly travelled to Australia to visit the children while they were at university.

In 2006, the parties’ son (22 years old at the time) was diagnosed with a mental illness. As a consequence, he spent time in mental health facilities and continued to be quite unwell. The wife remained living in Australia on a permanent basis after the diagnosis, however she ceased as the carer in September 2012 after she was violently attacked by her son.

The husband primarily worked and lived in the Middle East between 1993 – 2012, and returned to live in Australia after his job concluded in 2012. The husband, having finished work at this time, commenced caring for the parties’ son. The parties separated at this time (2012).

The Decision at Trial

At trial, the Judge concluded that the husband spent substantial periods of time in the Middle East working while the wife was attending to the primary care of the children. Further, that care continued when the children became adults, with the wife caring for the parties’ son (with the assistance of their daughter) from 2006 to 2012. Importantly, the Judge noted that:

  • “It is clear that the husband only returned in 2012, because he no longer had a job. Had he still had a job I accept he would be working in [the Middle East] or elsewhere overseas. For those 6 years and prior to that time the husband had little or nothing to do with the day to day care of the children whilst under the age of 18 years or over that age. For those 6 years the husband had nothing to do with the care of [the son] who although an adult was and is still unwell and this burden was left to the wife.”
  • “…the parties acquired valuable assets from the monies the husband earned overseas and he worked overseas in [the Middle East] from 1993 to 2012 a period of nearly 20 years and here in Australia for two years before the wife joined him. Thus for the entire time of the children growing up the [husband] was working overseas. The husband, wife and children lived together at best for ten years whilst the children were growing up, in [the Middle East] in the main. The husband was basically absent from the children’s lives for 10 years and this gap was filled solely by the wife.”

The Judge concluded by determining that although wife had made the overwhelming parenting and homemaker contributions and the husband made the overwhelming financial contribution, “an adjustment of five per cent should be made in the wife’s favour by reason of her “arduous” non-financial contributions in caring for the children in foreign countries for most of the marriage…” The husband appealed this decision.

The Issues & Decision on Appeal

The Full Court in ultimately dismissing the husband’s Appeal, held that was the Judge’s discretion to find that the wife’s nonfinancial contributions were superior and that an adjustment of 5% should be made in that regard.

Trask & Westlake [2015] FamCAFC 160

The Facts

The parties were married for approximately 11 years and had four children together who were aged 15, 13, 11 and 9 at the date of separation in 2009. The parties conducted their relationship so that the husband pursued his career while the wife was the homemaker and primary carer of the children.

The Decision at Trial

The matter went to trial four years after separation. The trial Judge held that the contributions of the husband and wife to the point of separation and those made after separation were equal. The trial Judge then adjusted the assessment by 10% in favour of the wife in accordance with the prospect factors, entitling her to 60% of the net property of the parties, which was valued at over $7.1 million.

The Issues on Appeal

The husband appealed the trial Judge’s decision on the basis that his post-separation employment with “Company E”, which resulted in his income increasing markedly from the very high income he had received during the marriage.

In the course of employment with Company E post-separation, the husband received:

  • Taxable income of $2,076, 984 in the 2010, financial year
  • Taxable income of $3,444,209 in the 2011, financial year
  • Taxable income of $1,042,426 in the 2012, financial year
  • Retrenchment payment of $2,577,000
  • Entitlement to restricted share units valued at $187,397 net of tax.

On appeal, the husband took issue with the trial judge’s assessment of the contributions made post-separation, being his substantial financial contributions and what the trial judge described as the “significant” contributions of the wife. The husband believed that the trial judge should have given greater weight to his financial contributions, and less weight to his wife’s homemaking and parenting contributions.

The husband calculated the percentage of the total value of the net property (in excess of $7.1 million) represented by his post-separation “cash injections” as a result of employment with Company E (in excess of $9 million).

The Full Court in rejecting the husband’s contentions highlighted the principle that contributions are “a matter of judgment and not computation” and recognised that it was difficult to compare the direct financial contributions of the husband to the “extremely important” contributions made by the wife in maintaining a home as a single parent to four children dealing with their parents’ separation. It was held that the trial Judge correctly accorded significant weight to the wife’s post-separation contributions and the Full Court noted that:

“… the husband arrived at his position with Company E by dint of his talents, dedication and hard work, but also by dint of the contributions made by the wife across the years preceding the employment… the husband received tangible recognition of… the “experience, knowledge and opportunities” he had obtained in his earlier employment. The contributions of the wife are much less tangible. The lack of tangible recognition, or the fact that they are not susceptible to a dollar calculation, does not render them any less important.”

The Decision on Appeal

As a result, the husband’s appeal in relation to the assessment of the contributions of the parties failed.[1]

In Summary

These cases are a timely reminder that the Court carefully analyses and gives fair weight to financial contributions, non-financial contributions and contributions to the welfare of the family, regardless of whether the contributions are made at the beginning, middle or end of a relationship. In particular, Palkovich & Palkovich and Trask & Westlake highlights the important principle that the non-financial contributions made by a stay-at-home parent are held in a high regard when compared to the financial contributions of the working parent, even in circumstances where there are millions of dollars being contributed.