The case of Elliston & Dennell  provides a very clear illustration of the principle that under the law in Australia, there is no presumption of a 50/50 division of net assets in the event of a separation.
This remains the case whether the parties were married, or de facto, and the principle is especially important when considering short marriages or de facto relationships.
Rather, the law in Australia requires the Court to follow the following steps when determining what a just and equitable property division is:
- Firstly, the Court asks the question if it just and equitable to make any orders at all for the adjustment of property interests (meaning that it is possible the correct answer is that the parties simply retain all the assets, liabilities and financial resources they already legally hold at the conclusion of the marriage or de facto relationship;
- Secondly the Court determines exactly what the net pool to be divided actually is – if the parties cannot agree – or the Court otherwise identifies the net property pool to be divided if there is no dispute;
- Thirdly, the Court then arrives at a preliminary percentage division based on the parties’ respective contributions to the acquisition and preservation of the net property pool;
- Fourthly, the Court then considers the parties current and future financial needs, and makes any further adjustment of property interests warranted by these issues; and
- Finally, the court overall holds the discretion to make any further adjustment of property interests that the court things the justice and equity of the case requires.
In the case of Elliston & Dennell  the trial judge took the view that the de facto husband had made the overwhelming contribution to the acquisition and preservation of the property pool because the primary asset in the property pool to be divided was a company he held solely at the time he commenced cohabitation with the de facto wife.
The trial judge determined that the Husband had contributed 80% of the net assets this way, and that no other adjustment of property interests was warranted by reason of the current and future financial needs of the parties, or because the “justice and equity of the case” warranted it.
The trial judge, as part of her analysis, took into account the fact that the de facto husband had paid the de facto wife an $8,000 interim property settlement plus $80,000 in spousal maintenance between separation and the final orders being made after a final hearing. The trial Judge concluded that this transfer of monies from the de facto husband to the de facto wife in the form of an interim property settlement and spousal maintenance was enough to ensure the wife received a just and equitable outcome without need for any further payments or transfer of assets to her.
However when the wife appealed, and although not all of the Wife’s grounds of appeal were successful, the Full Court of the Family Court found that the trial Judge had made several errors when forming her conclusion, especially with regard to her treatment of the interim property settlement and spousal maintenance payments the Wife had received.
As such, the Full Court of the Family Court was required to re-decide the case, applying the law correctly to the facts of the case.
In doing so, the Full Court re-affirmed the conclusion of the trial Judge that the Husband made the great majority of the contributions to the property pool initially. The Full Court concluded that his contributions should be weighted at 90% of the net property pool (excluding superannuation).
The Full Court of the Family Court also agreed with the Trial Judge that there did not need to be any further adjustment for the parties current and future financial needs.
However importantly, treating the $8,000 paid by the de facto Husband before the final hearing as an interim property settlement, and keeping separate the $80,000 spousal maintenance amounts the wife had received and which, correctly characterised, were not part of her property settlement but rather funds paid to her to allow her to have a reasonable standard of living during the interim period.
The result was that, after a 5 year de facto relationship, a net non-super property pool of around $395,743, the Husband ultimately was required to pay the wife $55,299 at trial, along with the $8,000 he had already paid her as an interim property settlement, plus the $80,000 he had paid her between the final separation and trial as spousal maintenance but was not part of her property settlement.
This saw the wife retain 16% of the net non-super pool as her settlement.
So as you can see from the above, each case varies greatly due to the facts of the case and the legal principles at play. This is why, if you have ended a de facto relationship or marriage, or think that is something coming up for you in the future, you need expert legal advice from an experienced family lawyer.
Don’t wait – call Sanicki Lawyers today on 03 9510 8999 to ,make an appointment to talk to Stephanie Hope, Senior Associate and Head of Family Law, or contact Stephanie at email@example.com today.