Property Division Short Marriages or Relationships – What is Appropriate when the Marriage or Relationship is Short?

16/10/2019

The Family Court or Federal Circuit Court (Court) will apply the same approach to the division of property between husband and wife or de facto partners regardless of whether the marriage or relationship is a long relationship or a short relationship.  A short relationship is generally thought to be one which is less than 5 years in duration.  Though the Court takes the same approach there are differences in the way the Court applies the same principles as between a short relationship and a long relationship.  The outcome for the party who brings in or contributes the least in a short relationship, will be less generous. 

There are certain situations or circumstances that warrant a Court taking a different approach in the application of principles relating to between a short relationship and secondly relating to a long relationship including:

• One party making a substantial contribution at the beginning of the relationship ie bringing in significant assets where the other party does not bring in significant assets.  The party bringing in the assets should receive credit for that greater contribution. 
• Where the amount or value of the asset/s brought into the relationship by one party increases in value significantly or the asset/s brought in decreases significantly in value.  The party bringing in the assets would usually receive greater credit for the increase in value and bear the greatest proportion of the loss in value of an asset.
• Disparitive earning capacity – one party to the relationship enjoying the benefit of an enhanced lifestyle and/or living standard by reason of having entered into the relationship.
• Short relationships may be less likely to result in there being a significant adjustment from one party to the other by reason of the age difference, existence of health issues or their capacity to work in gainful employment.

The Courts Approach – “Global” Division of Assets or Division or “Asset by Asset”

The Court will first look at what property is available for division.  In a long relationship the Court will generally take a global approach and look at all of the property in the names of either party or in joint names. 

In a short relationship, the Court might apply what is called an “asset by asset” approach.  In other words, the Court will look at what contributions have been made to each asset.  This will be even more likely if the parties have kept their assets separate and though married or in a de facto relationship conducted their financial affairs individually.

Factors Applied in a Short Relationship

• Initial contributions will receive more weight in a short relationship and less weight in a long relationship but the passage of time may not be the only relevant consideration.  The significance of initial contributions erodes over time. 
• The non-contributing party (the party who did not bring the asset/s into the marriage/relationship) can claim a contribution towards the enhancement or increase in value of the asset but the claim is less likely to be successful if the parties have kept their assets separate. 
• The Court will make a close examination of the parties contributions in a short relationship and this may be especially so if there are no children of that relationship.
• The Court will take into account the non-financial contributions of parties in a short relationship.
• The increase in value of initial contributions will be more beneficial to the initial contributor when the value of the asset brought in has increased by reason of market forces or windfall issues rather than by contributions from the other party.
• In short childless marriages/relationships the division to the non-contributor may be in the vicinity of 10% of the pool.

At Watson & Watson our experienced Family Law Solicitors can assist you in relation to financial/property division matters whether you are in a short or long marriage or relationship to achieve an optimum result.  Please contact Richard Watson Senior Family Law Solicitor or his Personal Assistant Shereen Da Gloria to discuss your concerns and seek appropriate and timely advice.

This is only a preliminary view and is not to be taken as legal advice without first contacting Watson & Watson Solicitors on 9221 6011.