In the family law property settlement process it is necessary to identify contributions made by the parties. In doing so, careful consideration needs to be given to both financial and non financial contributions made be both parties to the relationship. It is not uncommon for one party to have been the sole financial contributor whilst the other party contributed in the role of a homemaker and/or parent. The case of Marsh v Marsh serves as a reminder that homemaker and parent contributions will not be overlooked when courts assess each party’s contributions to the relationship, even contributions post separation.
In this case, a couple had settled on a way of life whereby the husband had functioned as the principal income earner and the wife had cared for the family and not worked outside the home. It was acknowledged that this arrangement ‘enabled the husband to give greater attention to his career and work, confident that his home life and parental responsibilities were being well met’. After approximately 20 years of marriage the parties separated in 2000.
Property settlement proceedings commenced in the Family Court in 2010. At this time, the trial judge calculated the total assets of the parties to be $4,780,215.00. However, it was observed that the asset pool had ‘increased significantly’ since the separation in 2000. In fact, it was accepted that the husband had added approximately $1,285,000.00 to the property pool post separation. Counsel for the husband argued that the assets acquired by the husband in the decade post separation ought to be quarantined, on the basis that the wife made no contribution to their acquisition.
The trial judge held that, up until the separation, both the husband and the wife had each contributed equally to the relationship. However, given the significance of the financial contributions made by the husband post-separation, it was decided that the evidence supported a contribution based entitlement favouring the husband of 70% and 30% in favour of the wife. This ratio was to apply to both the net property pool (excluding superannuation) as well as to the superannuation assets.
The court then turned to an assessment of the future needs of the parties. The issue of future earning capacity figured prominently. The wife had not engaged in paid employment since 1983 and although she had completed a few courses of instruction, such courses were for her personal development rather than employment. Her only source of income was a Centrelink Newstart Allowance and a small amount of board paid by her son. Differently, the husband was leaving the relationship with a substantial and reliable income earning capacity and a job that was paying him $640,000.00 per year (plus bonuses and incentives). After hearing submissions from the parties in relation to future earning capacity, the court decided to make a 10% adjustment in favour of the wife in respect of the net property pool (excluding superannuation). Accordingly, it was ordered that:
- the net property pool amounting to $3,106,313.00 (excluding superannuation entitlements) was to be divided in a 60/40 split in favour of the husband; and
- The husband’s superannuation, which was found to be $1,673,902.00, was to be divided in a 70/30 split in favour of the husband.
The wife sought to have this decision set aside on numerous grounds.
On appeal it was viewed that a contributions based assessment of 70/30 in the husband’s favour did not take in to account, the wife’s continuing indirect financial contributions to the husband’s income post separation. After separation the husband continued to use his earning capacity to support the family, whilst the wife continued to care for the children and the home. Therefore, the increase in assets after separation could not be regarded as a contribution made by the husband alone because to do so would ignore the ongoing contributions that the wife made during this period.
Regarding the wife’s future earning capacity, it was further viewed that an adjustment of only 10% fell ‘outside the generous ambit within which reasonable disagreement is possible’. It was viewed that the huge disparity in the incomes of the husband and the wife should have led to a far greater adjustment in the wife’s favour.
Subsequently the decision of the trial judge was set aside and the matter was sent back for a re-hearing by a different judge.
When it comes to assessing each party’s contributions to the pool of assets available for distribution, it is clear from this case that the court does not disregard the contributions of a homemaker/ parent simply because such contributions are non-financial by nature. Furthermore, though a couple may cease to cohabit, any contributions they continue to make will be relevant in identifying their entitlement at property settlement.
For more information regarding family law property settlement
  FamCAFC 24.