At Byron Bay Family Law and Mediation Services, we have wide experience in matters related to divorce property settlement. We take the time out to understand your concerns and offer the best possible solutions based on your individual situation. Our property settlement lawyers have an unrivalled reputation and can help you make an informed decision. We understand that separation is a stressful phase and assure you that we will be there for you when you need us. Reaching a mutually acceptable financial agreement in divorce can be daunting. With our bespoke service, we will approach your case to deliver a favorable financial outcome. We are driven by the zeal to ensure a fair settlement and you can count on us even for the most complex cases.

Divorce Settlement in Australia

At Byron Bay Family Law and Mediation Services, we have wide experience in matters related to divorce property settlement. We understand that even if your finances are separate, there is the need for a formal financial settlement. Our experienced lawyers possess the expertise and understanding to enable you to handle the financial aspects of divorce as successfully as possible. We will outline ways to reach a fair settlement so that you do not face any legal disagreements in future. Approachable and experienced, our lawyers will help you get the results you want.

Reaching Financial Agreement in Divorce

After you have taken the decision to divorce, sorting out the financial aspects can be a complex task. There is much to consider but with the backing of our expert property settlement lawyers, you can be sure that you will be supported at every step. We take the time out to understand your concerns and offer the best possible solutions based on your individual situation. Our property settlement lawyers have an unrivalled reputation and can help you make an informed decision. We understand that separation is a stressful phase and assure you that we will be there for you when you need us. Reaching a mutually acceptable financial agreement in divorce can be daunting. With our bespoke service and clear legal advice, we will approach your case to deliver a favorable financial outcome. We are driven by the zeal to ensure a fair settlement and you can count on us even for the most complex cases. We will ensure that your interests are protected and the divorce proceedings are as amicable as can be.

If you have any queries about family law property settlement, do not hesitate to book a consultation. We are here to answer any questions that you may have and will be happy to guide you through the process of a divorce property settlement.

Property Settlement Lawyers

If you have any queries about family law property settlement, do not hesitate to book a consultation. We will be happy to assist you.

Oftentimes, particularly in circumstances where parties to a separation are amicable and consider that they “get along well”, spouses divide their assets according to a personal agreement – that is, an agreement negotiated personally between the parties without the use of lawyers or the Australian courts.

Such an arrangement is not legally binging, and until an agreement is documented in one of the approved manners, the agreement is considered to be an informal agreement.

One of the most significant consequences of not formalizing your property settlement is the possibility that your former spouse is able to make an application for a property settlement in the future – one, two or even several years later. Being required to undertake a settlement years after your separation can have detrimental impacts on your financial and mental wellbeing and makes it difficult to plan your personal affairs. This is particularly so when as far as you knew, the matter was dealt with and is in the past.

It is important, and a principal consideration of the Australian courts, that parties finalize the financial aspects of their relationship so that they can get on with their lives.

How Do I Formalise A Property Settlement?

Australian family law affords former spouses (or parties to a de facto relationship) two ways in which they can formally finalize a property settlement. These are:

• 1.Making an application to the court for consent orders; or
• 2.Entering into a binding financial agreement (‘BFA’) (also colloquially known as a ‘pre-nap’).

To reiterate, an agreement is not legally binding unless and until it is is documented in one of these manners.

1. Consent Orders

Parties to a separation that have reached agreement about their property settlement are able to apply to the Family Court of Australia for orders to formalize the agreement so that it is legally binding. This application documents and details:

• The agreement reached by the parties; and
• Its practical application.

When considering an application for consent orders in respect of a property settlement, the Family Court must be satisfied that the orders proposed are just and equitable.

Although the parties are not required to obtain legal advice in relation to an application for orders, it is highly advisable that you do so, as the documents required are technical in nature, and the consequences of an agreement not being documented correctly can be costly and time consuming.

2. Binding Financial Agreements

Parties to a marriage or de facto relationship can enter into a binding legal agreement (essentially a contract) that details the financial arrangements should their marriage or de facto relationship break down.

A binding financial agreement can be entered into:

• Before marriage
• During marriage
• After divorce

A binding financial agreement is capable of covering:

• Property matters
• Financial support of a spouse (i.e. spousal maintenance), or the termination there of that is, to prevent a former spouse making an application for maintenance in the future should their circumstance change. This protection is not afforded solely by consent orders.

Unlike an application for consent orders, in order for a financial agreement to be binding, both parties must seek independent legal advice as to the effect of the agreement on the rights of either party and the advantages and disadvantages thereof. Additionally, and as distinct from an application for consent orders, a binding financial agreement is not required to be deemed as just and equitable by the Australian courts.

Other Important Considerations

You are not required to be divorced to formalize your property arrangements – in Australia, divorce is a largely administrative process and is distinct from property settlement matters.

You should also consider that when you are divorced, you have twelve months from the date that the divorce is granted to bring an application for a property settlement to the court. After this time, ‘leave’ (i.e. permission) from the courts to apply for property orders may not be granted, or may nevertheless be costly and time consuming to pursue. De facto couples have two years from the date of separation in which to apply to the court for property orders.

Where To From Here?

Our accredited family law specialists are available to assist in all matters pertaining to your property settlement and can advise as to the method that is most suited to your particular circumstances. If you would like to speak to one of our family law specialists about any of your family law matters, please contact us on 1300 635 529 or email [email protected] to arrange a free telephone consultation.

Many married Australian’s own properties in the country and or overseas. What happens to these properties in the unfortunate event of divorce?

A recent verdict by the Full Court of the Family Court of Australia in Anderson & McIntosh (2013) FLC 93-568 case showed.

The Anderson & McIntosh Case

The couple involved in the case, married in Australia in 1988. They shifted base to another country in 2006 and then separated in 2009. Finally getting divorced overseas in December 2010. A decree from a foreign country relating to the properties was issued. There were no Orders sought for the couple’s properties in Australia.

The parties reached an agreement on the settlement of the properties in the foreign land, which received approval by the Court in that country. During the same time, a divorce decree was issued. The foreign courts ruling did not deal with the couple’s properties in Australia.

The wife made an application to an Australian court in relation to the property settlement 12 months after the divorce. The Husband sought to have her application dismissed citing the reason that it had been more than 12 months since the divorce and that the S 44(3) of the Act necessitated a Leave of Court for instituting court proceedings, with respect to the settlement of properties in Australia.

The Husband’s plea was dismissed and so he made an appeal to the Full Court, which was also dismissed.

Overseas Divorce not a “Divorce Order”

The following are the key points from the Full Court verdict in the Anderson & McIntosh case:

• A divorce obtained overseas is recognised under Section 109 of the Family Law Act 1975. But, under the Act, the rights that the parties are entitled to in an overseas divorce are not the same as in the case of a divorce obtained in Australia.
• Section 44(3) of the Act does not recognize an overseas divorce as a “divorce order”. So, a Leave of Court – permission from the Court to take an action – is not needed to begin legal proceedings in Australia even if it has been 12 months or more since the divorce

Options to Reduce Overseas Divorce Impact

The following options could have been explored by the Husband in the above case to reduce the impact of the overseas divorce:

• The Husband could have appealed for property settlement of the Australian properties in the foreign country provided such a plea is acceptable in that country.
• The Husband could have sought orders in relation to property settlement for the properties in Australia at the same time as orders were being sought by the Wife in the foreign country. The Husband could also have entered into a financial agreement as specified by the Act for property settlement with respect to the Australian properties.
• The Husband could have sought a divorce in Australia.

If you are to undertake getting divorced overseas, it is critical to understand the legalities surrounding property settlement in that country and any country you own properties.

A mutually agreeable decision can be reached only when all facts are available. The assistance of legal experts in such cases becomes invaluable.

Get in touch with the legal experts at Byron Bay Family Law & Mediation. We are one of Melbourne’s leading law firm with years of experience and a track record of delivering successful outcomes in divorce proceedings, property settlement, child support, spousal maintenance, mediation and a range of other family law issues.

Click here to request a free initial consultation or call 1300 635 529 now.

The importance of family law settlement negotiations cannot be overstated.

In a recent Family Court decision, the judge made a costs order against the wife – that she pay the husband $30,000!

Why?

Because, in the judge’s opinion, the wife had let her anger and distress ‘drive the litigation’ and she had failed to make a ‘meaningful attempt’ to negotiate a settlement, including aggressively rejecting the husband’s settlement offer which ended up being more than the judge awarded her.

So, the wife’s poor attitude to settlement resulted in:

1. A lesser share of the asset pool

2. A costs order.

I wonder how she’s feeling now – even more angry and distressed?

The moral of the story – negotiate, negotiate, negotiate and settle, settle, settle.

Vanessa Mathews is an accredited family lawyer and mediator.

If you want to reach a negotiated settlement ASAP,

contact Vanessa on 1300 635 529 or [email protected]

Inheritance – What Happens to Them In Divorce Property Settlement’s

An article written for accountants and financial advisors by Vanessa Mathews of Byron Bay Family Law & Mediation Specialists.

Your client has the good fortune to receive a ‘windfall’, such as an inheritance or a lotto Your client and their partner separate.

Will the windfall be included in the property settlement asset pool?

Your client will likely answer ‘No Way’!

From the court’s perspective, windfalls are not a special category of contributions and they must be:

1. Included in the asset pool.
2. Considered in the same manner as, and holistically with, all of the other contributions made during the relationship– financial, non-financial, homemaker and parenting.

The timing of the windfall will however be relevant as to how the windfall is ‘shared’:

• A windfall received early in the relationship is likely to be treated equally.
• A windfall received shortly before separation is less likely to be treated equally.
• A windfall received after separation is even less likely to be treated equally.

The short answer is that the windfall is unlikely to be retained in full by your client.

I’ll leave it you to break the bad news to them.

Next Steps Before a Divorce Property Settlement

You and/or your client may benefit from discussing the circumstances of the inheritance or other windfall and divorce property settlement before taking any action such as distributing or disposing of the asset in a manner that may adversely impact against your client.

Vanessa Mathews is family law specialists with the expertise and experience to advise you about your family law property settlement issues.

Please call Byron Bay Family Law & Mediation Specialists on 03 9804 7991 or email [email protected] to speak with Vanessa Mathews.

Resources

Byron Bay Family Law – Dividing the Property: http://mathewsfamilylaw.com.au/divorce/divorce-videos/dividing-the-property-in-victoria/

Family Court of Australia: http://www.familycourt.gov.au/wps/wcm/connect/fcoaweb/home

Federal Circuit Court of Australia: http://www.federalcircuitcourt.gov.au/wps/wcm/connect/fccweb/home

Your client who is going through a matrimonial/de facto property settlement may say to you that their particular contribution to the accumulation of the asset pool was ‘special’, by which they mean that:

• They made a greater contribution than their partner;
• They should receive a greater share of the asset pool.

In this article we review the current law on ‘special contributions’ and how you might respond to your client’s claim.

The second step of the ‘4 Step Process’ for determining how the assets of the marriage ought to be divided between the parties includes consideration of the contributions of the parties.

Contributions may be:

• Financial, to the acquisition, conservation or improvement to property
• Non-financial, to the acquisition, conservation or improvement to property
• Welfare and homemaking, to the relationship and the children of the relationship.

A party may claim that they made a ‘special’ direct financial contribution which warrants them receiving a greater share of the asset pool.

Examples of ‘special contributions’ include contributions made by:

• An inheritance
• A ‘good’ business person
• An entrepreneur
• A successful artist
• A specialist surgeon.

The existence of a ‘Doctrine of Special Contribution’ was recently reviewed, and rejected, in the decision in Kane v Kane by the Full Court of the Family Court [2013].

The parties had been married for 30 years. The issue in dispute was the weight to be given to their respective contributions to their self-managed superannuation fund. The husband sought a greater share of the fund based on his ‘special contributions’, being ‘the application of his acumen to investment decisions which caused the fund to prosper’ (from $540,000 in 2008 to $1,850,000 in 2012). The husband, with the wife’s consent, purchased shares using matrimonial savings. The shares were registered separately in the name of the husband or the wife, with different rates of growth in their respective portfolios. The husband asserted that this separation evidenced the parties’ shared intention to benefit individually, and not collectively, from their respective portfolios only. The wife asserted that the husband had merely invested their savings and they should benefit equally in the overall growth. The husband took principal responsibility for the investments and the wife was content with this (not unusual) arrangement although in evidence she conceded that she was unenthusiastic about the husband’s wish to invest in a particular share purchase. The husband asserted that he carefully researched each investment before deciding to purchase and that the success of the investment was due to his judgment and not mere chance or a random lottery win.

The trial judge held that ‘the evidence in the present proceedings permits a rational conclusion that the acquisition of those shares was no fluke. The husband’s diligent research of that corporation and his decision to invest the parties’ funds in it was an inspired investment decision, manifesting considerable expertise. His decision is all the more remarkable given that he knew he was making that investment decision without the support of the wife. I am satisfied that, without the husband’s skill in selecting and pursuing the investment in Company 1 shares, the parties’ superannuation interests within R Investments would currently be worth substantially less. It follows that the husband’s contributions to those superannuation interests were substantially greater than those of the wife. I reject the wife’s submission that her contributions were equal to those of the husband. The real difficulty is evaluating the parties’ contributions in mathematical terms’.

The trial judge split the fund two-thirds to the husband, one-third to the wife.

On appeal by the wife to the Full Court of the Family Court, it was held that the trial judges’ disproportionate division of the Fund could not be justified.

On the claim of ‘special contribution’ by the husband, His Honor Deputy Chief Justice Faulks stated:

• The Family Law Act does not refer to ‘special’ or ‘extraordinary’ contributions
• `Special skills … will not always produce significant financial results. An academic may be brilliant and possess exceptional or special skills which require much work and effort to apply, but which may nevertheless not reflect in the … property of the parties’
• `A range of highly specialised practical skills may not produce an economic return equivalent to the return produced by the entrepreneurial skills or a newspaper magnate’
• It is difficult to correlate effort or skill (even if special) with result. Frequently, the financial result of a contribution (whether by physical or intellectual labor or imagination foresight and perspicacity) will be influenced by external factors beyond the control of the party contributing’.

Family lawyers now have the benefit of a very clear message from the Full Court of the Family Court:

• There is no such thing as a ‘Doctrine of Special Contribution’
• The totality of the contributions to the asset pool must be considered
• An asset pool ought not be divided merely on the basis of a ‘special contribution’ having been made by one of the parties
• No one contribution to an asset pool should be given greater weight than other contribution.

The rejection of the existence of a ‘Doctrine of Special Contribution’ will be most keenly felt by parties with a high value asset pool which they believe is the result of their ‘special contribution’ over and above the other parties’ contributions.

Whether you were party to a valid marriage or a de facto relationship, you are entitled to property division. While the courts maintain broad discretion with regard to property division, they strictly adhere to the following four-step process to determine who gets what.

1. Identify/value the property – includes all assets and liabilities
2. Consider contributions of the parties – includes financial and non-financial contributions
3. Consider relevant factors – including but not limited to age, health, income, an standard of living of the parties
4. Ensure order is just and equitable – the order must be fair

Generally, the courts will look to split the net asset pool of the parties equally, unless while applying steps one through four it is apparent that an unequal split of the assets would be just and equitable.

The goal of property division is to both to allow parties to finalise their economic relationship, and also to recognise contributions to property. However, while the goal is to allow the parties to reach economic independence, a valid property order may in fact be varied under certain circumstances.

The Family Law Act provides for property division for both formerly married couples, as well as de facto couples. There are two main goals when it comes to property division. First, this should be a step towards finalizing the economic relationship between the parties. This “clean break” principal is supported by the requirement that courts make orders that will end the financial relationship of the parties as far as practicable. Second, this process recognizes contributions to property, both financial and non-financial.

An action for property division must be brought timely. For instance, if you were formerly married you must bring any property proceedings within 12 months of when your divorce order became absolute. Alternatively, if you were in a de facto relationship, you must seek property division prior to two years after the end of the relationship

Broad Discretion

The court maintains broad discretion when it comes to making property orders. For instance, should the parties disagree as to the ownership of property, the court has the discretion to make a declaration regarding the property in question.

Even the language in the Family Law Act speaks to this notion that the court has an abundance of discretion; the exact language expresses that the court may make “such order as it considers appropriate.” This broad discretion is subject to seven restrictions/considerations the court must contemplate. These considerations listed below are enumerated in the

Family Law Act.

• the direct and indirect financial contributions of the parties
• the non-financial contributions of the parties
• contributions to the welfare of the family, including contributions as homemaker or parent
• the effect of any order on the parties’ income earning capacity
• the list of considerations in s 75(2) and 90SF(3) of the Family Law Act
• any other order made under the Family Law Act affecting a party or child of the marriage or de facto relationship
• any child support payable, or likely to be paid in the future

Finally, the last bit of guidance that the Family Law Act offers to the court, is that the court shall not make an order unless the circumstances indicate that it is both just and equitable to make the order.

Because the Family Law Act fails to provide strict guidelines with regard to property division, and the courts are given such broad discretion, the courts have adopted a four-step process to apply to property orders. First, the court must identify and value the property, then consider contributions of the parties, then consider the factors listed above, and finally consider whether the order is just and equitable.

Step One: Identify and Value Property

The court must identify and value a rather encompassing pool of property, which includes real property, assets, liabilities, financial resources, property presently possessed and property expected, as well as property disposed of. The court must also identify and value business interests, licenses, permits and professional qualifications, inheritances, insurance policies, among many other types of property. As you can see, the type of property is pretty much anything – the list is rather extensive.

Both the nature of the property as well as the value must be determined as of the date of the decision, rather than the date of separation or divorce. When determining the value of the property, the court will begin by considering the fair market value of the property. Fair market value generally refers to the amount that a willing (not anxious) purchaser who is adequately informed would pay a willing (not anxious) seller of the property. In some instances where there is a dispute as to the value of property, and the court cannot make a determination of the value, the court may order the property be sold.

Once the property has been identified and value, a simple formula is used to determine the net asset pool of the parties. The total assets minus the total liabilities will result in the net asset pool used by the court.

Step Two: Contributions

The court will consider financial contributions, non-financial contributions, contributions to the care and welfare of the family, and contributions in the capacity of homemaker or parent. Financial contributions are any monetary contribution related to acquisition, conservation, and improvement of the property and refers to contributions made before the marriage, during the marriage, and after separation. On the other hand, an example of a non-financial contribution would be where one party performs maintenance or renovations of any family asset.

Often, especially when considering long relationships, the court will make a determination that the parties contributed equally. However, each situation is unique, and may not call for a determination of equal contribution. The court can make necessary adjustments to account for your unique circumstances.

One situation that is given special attention with regard to contribution is violence. If violence during the marriage or relationship had an adverse impact on a party’s contributions to the marriage, the judge will consider this when assessing the respective contributions of the parties.

Step Three: Additional Factors

This step helps the courts in addressing the future needs of the parties. The court will consider all relevant factors, including but not limited to:

• the age and state of health of each party,
• the income, property and financial resources of each party and their physical and mental capacity for achieving gainful employment,
• responsibility for a child of the marriage who is less than18 years old,
• commitments necessary for a party to support themselves or to support any other person that the party has a duty towards,
• eligibility for a pension, allowance or benefit,
• the standard of living which is reasonable in the circumstances,
• whether the relationship has affected the earning capacity of a party and to what extent,
• if either party is living with someone else, the financial circumstances arising from cohabitating with another person,
• the terms of any Orders made in relation to the property of the parties and the terms of any binding financial agreement.

Step Four: “Just and Equitable” 

The last step in the property division scheme requires to court to ensure that the proposed order is both just and equitable. This step is intended to allow the court to take a step back from the proceedings, and a whole, determine if the order is appropriate. The order should only be finalised if it is fair for each party. What is fair for one couple may not be fair for another couple, and thus determining fairness is wholly dependent on the circumstances of each individual case.

Variations of Property Orders

Despite the objective of ending the economic ties between the parties, property orders may in fact be varied after they have been issued. Variations are only permissible under certain circumstances. The Family Law Act only allows for reconsideration of a property order where both parties have consented, or where one party makes an application and the court is satisfied that at least one of the following is applicable:

• there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence, etc.
• circumstances have arisen since the order was made that has rendered it impracticable for all or part of the order to be carried out
• a person has defaulted in carrying out an obligation imposed by the order, and as a result it is just and equitable to vary or set aside the order
• circumstances have arisen since the order relating to a child or the marriage or relationship, and hardship will occur if the order is not set aside or varied
• a proceeds of crime order concerning property of the marriage or relationship, or such an order has been made against a party to the marriage or relationship.

Should you be in a situation where you anticipate property division, the best thing for you and your former partner to do is to work through steps one through four before bringing property proceedings. This will often help you avoid having to go through litigation to arrange for your property division.

When a couple divorces (or de facto or same sex couples terminate their relationship), one of the major decisions to make is “who gets what”.  A pre-nuptial agreement may help make this division easier.  If a couple can decide between them and come up with their own agreement, long court battles can be avoided.  If not, the courts have their own way of dealing with property division.  In Australia, the courts place all property into one pool and then divide it “equitably” or fairly.  Everything is included and considered joint property by the courts.

The law governing property division(link to “Property Division FAQs”) between spouses or de facto couples is Part VIII of the Family Law Act, 1975 (FLA).  The law provides guidelines for the courts to use when dividing property.  There are a number of factors the court will consider and which couples should know about.  Below is a list of some considerations.

Think about the children

Before even entering into the fight, divorcing couples should consider their children when dividing up property.   It might be more “fair” to sell the marital home, but parents (if they can afford to) should also consider the impact of this change on the children.   If parents are going to share parenting time, they should think about what children will need in each home and also divide accordingly.  If one parent is moving to a smaller home, he or she might not have space for so much furniture, so why demand it just for the sake of being fair.  Both parents should consider the physical and emotional needs of their children, not just what they themselves believe they are entitled to receive. 

Depreciation of ownership rights

Over time, the contribution of the person who brought the property decreases and the contribution of the other partner increases.  For example, one person may have purchased the house prior to the marriage, but the other partner paid most of the mortgage on it for the next 20 years.  The investment in the house may be equal by the time the couple splits up and the court will consider this relevant in making an equitable distribution.

The value of the property when it was acquired.

The courts will consider the value of the property when it was brought into the marriage as well as the length of the marriage.  There is a difference between a house that was worth $100,000 and one worth $2 million.  If a couple was married for only a short period and during that time the marital home tripled in value, how much is the spouse who purchased it prior to the marriage entitled to?  How much is the other spouse, who paid next to nothing in terms of mortgage and maintenance, entitled to?

Non-financial contribution

The courts in Australia today recognize that in many marriages today, one partner may earn a high salary while the other contributes to the marriage in a non-financial capacity.  This role has a value that also needs to be measured for property purposes.  Many couples decide that one partner will stay home to care for the house and children.  This enables the other partner to obtain an education, gain professional experience and earn a higher wage.  The stay-at-home parent is entitled to financial compensation for his or her job at home and for allowing the other spouse professional development.

The parent who stays at home makes other large non-financial contributions to the home.  By being at home, the family saves thousands of dollars on child care and possibly cleaners and cooks.  Finally, the at-home spouse may undertake do-it-yourself jobs, like painting, also worth a good deal of money to the family, but without any actual monetary compensation.  Imagine a spouse who repaints the inside of the house.  Not only has the family saved on the expense of paying an outside contractor but the value of the home has also increased.

Use and maintenance of the property

The court will consider not only the worth of the couple’s property but also how it is used.   In one family, for example, the father stays home to care for the children.  He is responsible for all household work – cooking, cleaning, gardening, paying bills.   The mother, in turn, works long hours to provide a good income and financial stability.  No doubt the mother “earned” her share of the house, but so did the father.  The court might ask who actually needs the home more.  In this case, the court may consider equitable distribution to mean that the father keeps the house and the mother receives other property.

Future needs

Section 75(2) of the FLA lays out the factors a court uses to determine the “future needs” of each spouse.  The court considers age, health, professional training and ability and property and financial resources, among other factors.  Based on this analysis, the court may decide that a particular spouse is entitled to more of the marital property, to compensate for that person’s weaker ability to earn a living.

The same laws about property apply whether or not you were married or in a same sex relationship. You can start negotiations about property as soon as the relationship has broken down.

In a same sex relationship, you must commence property or maintenance proceedings within two years of your separation.

Field & Basson – [2013] FamCAFC 32

This is an appeal on the division of the property made by the courts between a husband and wife following their divorce.

The wife, aged 47 and the husband, aged 48, were married in 1994 and separated in 2009.  The wife brought assets amounting to $373,471 to the marriage, including five properties, furniture, a car and cash.  The husband brought to the marriage assets amounting to $45,000, including a car, cash and one property plus a superannuation of over $2,000.  Both worked at the time of the marriage and the wife had additional income from her investment properties.

The couple developed a business together and as it grew, the husband resigned from his employment and received his superannuation, which had a gross value of almost $107,000.  The husband and wife both worked in the business and the husband helped maintain and renovate the wife’s properties.  They also took out a loan on the business, and the loans were secured through mortgages on two of the wife’s properties.  The business was not successful and in 2011 the husband found employment elsewhere and only the wife remained working at the business.  In December 2011, the wife suddenly shut down the business.

The Federal Magistrate

The Federal Magistrate gave orders for a property settlement in March 2012.  The judge calculated the assets and liabilities of the couple, including the business, their debts and all of the properties.  The Federal Magistrate took into consideration each partner’s contribution – both financial and nonfinancial – to the asset pool.  He also adjusted the wife’s contributions since she had the greater responsibility for child care and the husband earned more money.   He concluded that the wife should receive 87.5% of the net assets and the husband should receive 12.5% of the assets.

The wife made it clear that she did not want to sell any of the property in order to pay off the debts.  In order to end the joint property relationship, the judge ordered that all of the business stock as well as the jeep should be transferred to the husband, and the wife retains her property and the debt.

Husband appeals – division of property not weighted correctly

The husband claimed on appeal that the judge erred by giving more weight to the wife’s contributions than to the husband’s.   The appeals court began it’s response by explaining that they cannot interfere with the discretion of a lower court judge unless the decision was “plainly wrong”.   It is not enough to say that the appellate court would have come to a different decision in order to overturn the lower court decision.

The appeals court rejected the husband’s first claim on appeal that too much weight was given to the wife’s initial contributions.  The Federal Magistrate clearly stated in his decision that both parties contributed equally but the wife brought in “significantly greater initial contributions”.   The husband never articulated the basis of his claim, other than to bring several other cases, which he then asked the judge to ignore.

The appeals court also rejected the husband’s claim that a weighting of 25% to the wife was incorrect and that more weight should have been given to his non-financial contributions.  The husband provided no information that would demonstrate that the Federal Magistrate, who detailed how he came to his assessment, was “plainly wrong” in the conclusions he reached.   The appeals court cited earlier cases which also translated the “qualitative” contribution of an asset to a “quantitative” number.   The appeals court found that the judge described his reasoning and used his discretion appropriately.

Finally, the appeals court rejected the father’s claim that the Federal Magistrate assumed first that all sides contributed equally and only then made adjustments.  The Federal Magistrate clearly delineated the contributions from each side and the weight of these contributions and only than concluded that they were equal (other than the wife’s significantly greater initial contributions).