Quarantining a Particular Asset When Assessing Contributions Can be Dangerous

Quarantining a particular asset when considering and assessing contributions in the context of family law property settlement proceedings can be dangerous. 

In Hurst & Hurst [2018] FamCAFC 146 the court said "It can be seen that those reasons, taken together with earlier quoted, evidence a “global approach” to the assessment of contributions. Within the context of such an approach, a broad assessment is made of the contributions of all types made by both parties across the whole of the period of a very long marriage. Yet, the reasons also evidence one exception to that approach, namely the identified indirect (financial) contributions made to the Suburb C property.

There is no error of itself in her Honour considering separately any such contributions: subparagraphs (a) and (b) of s 79(4) each refer to, relevantly, indirect contributions made to “any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that property (emphasis added).

However, there is a danger in doing so. Isolating indirect contributions to but one part of the property interests of the parties in the context of a global assessment of contributions risks ignoring significant contributions made by both parties that do not have a nexus with that particular property. We consider, with respect, that her Honour did not heed that risk. The finding that the wife has not made any contributions to the Suburb C property other than the specific indirect contribution to slashing and rates is, in our respectful view, was not open to her Honour on the evidence before her."

In Barnell & Barnell [2020] FamCAFC 102 the Trial Judge considered the husband's initial contribution, the B property, separately when assessing contributions, at [42] the court said "We are persuaded that by isolating the B Property in the manner in which his Honour did and by adopting a differential of as much as 25 per cent between the parties as to their contributions based entitlements as a consequence of “quarantining” the B Property, and giving discrete consideration to that contribution, the primary judge fell into the same error as was made at trial in each of Hurst and Jabour, as discussed in the appeals in those cases. We consider that his Honour’s approach had the overall effect of according a subsidiary role to the wife’s contributions."

In Dickons v Dickons [2012] FamCAFC 154 the Full Court rejected the proposition that there must be a causal relationship between contributions and a financial product of contributions. 

There is no need to prove a connection between particular contributions and assets for the asset to form part of the asset pool. Quarantining a particular asset when assessing contributions (using a global approach) may lead to the myriad of other contributions becoming subsidiary which may lead to error.

Katherine Guilfoyle