Hypotheticals by Manny Wood Published in the Coffs Coast Advocate on 10 August 2019.
Harry purchases a half-interest in a farming property from his father in 1975 for $25,000.
Harry meets Sally in 1990 and they have three children together. Harry is the primary breadwinner and Sally fulfils the role of homemaker.
In 2010, the farm is rezoned for residential use which substantially increases its value.
Unfortunately, in 2015, Harry and Sally separate.
In 2017, Harry sells the farm for $10 million.
Sally commences proceedings against Harry, seeking property settlement orders under the Family Law Act.
At the time of the hearing, the children are adults and had moved out of home.
The Court assesses the parties’ financial and non-financial contributions during the course of the relationship as well as their respective future needs.
The Court finds that during the course of their lengthy marriage, Harry and Sally’s “contributions” were equal but held that because Harry bought the farming property into the relationship, that initial contribution should be recognised as an adjustment in his favour and awarded him 70% of the matrimonial property pool, consisting primarily of the proceeds of the sale of the farm.
Sally appeals the decision.
The Full Court states that the increase in the value of the farm should not be outweighed by the contributions that Sally made during the course of their lengthy relationship and accepts Sally’s argument that the Court should assess the contributions of the parties “holistically” without “quarantining” a particular item of property.
The Court ultimately rules that the matrimonial property pool shall be divided equally with the effect that Harry’s entitlement is reduced by 20%, equating to a reduction of $2 million.
If you would like Manny to address a particular legal issue, send your request to manny.wood@ticliblaxland.com.au or call him on (02) 6648 7487.
