Hypotheticals by Manny Wood. Published in the Coffs Coast Advocate on 14 November 2015.
John and Jane were married for 13 years and had four children together. Jane took on the role as homemaker and John successfully managed a large company. When they separate, they value their accumulated assets at $2 million.
After John and Jane separate, John is able to secure a lucrative corporate position with a rival company, and in the three years after they separate he earns an income of $2 million.
When Jane becomes aware of John’s success, she commences proceedings against him, seeking property settlement orders under the Family Law Act. Jane seeks an order that she is entitled to a portion of the income that John earned after they separated.
Jane argues that her contribution to the welfare of the children was a direct contribution to John’s ability to be employed by the company. She also argues that her role in maintaining a home as a single parent to four children was an extremely important contribution.
The court stated that John was able to secure his position at the company through his talent, dedication and hard work but also due to Jane’s contributions throughout the years leading up to his employment.
The case was ultimately decided on appeal, with the Full Court deciding that John and Jane contributed equally to the asset pool, which included the $2 million that John had accumulated in the three years since separation.
The Court went on to award Jane a further 10% adjustment in her favour, given her limited income earning potential, compared to John.
The result was that out of the total asset pool of $4 million, which included the income that John earned after separation, Jane received approximately $2.5 million.
This case demonstrates that even assets that are accumulated after separation can be the subject of a claim. The case also reiterates the value that a court places in a spouse’s contribution to the welfare of children.
If John and Jane had been formally divorced, the limitation period for Jane to make a claim would have been 12 months from the date of the Divorce Order.
