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Coming Out Ahead – “Winning” the Property Division

08/03/2021

Watson & Watson Lawyers have again successfully concluded a hard fought and factually complex property case on behalf of the husband.  The wife commenced the process for property division and at the time of commencement the husband was not legally represented.  The Lawyers acting for the wife had sent to the husband a letter proposing a property division on a basis that was favourable to the wife and unfavourable to the husband.  The letter was aggressive and the husband interpreted the letter as putting him in a position where he had no option but to accept the offer. 

Watson & Watson Lawyers acted for the husband and were able to conclude the case on a settled basis in the husband’s favour.

How was this achieved?

Watson & Watson Lawyers approached the matter by:

  • Establishing the facts of the case at the beginning of the case. 
  • Backing up the facts of the case with evidence that supported those facts.
  • Formulating a position based on the facts and the available evidence. 
  • Identifying weaknesses in evidence or absence of evidence to support the claims and assertions of the wife.
  • Obtaining appropriate expert evidence including evidence as to the extent and value of the assets of the parties.
  • Competently formulating a position and advising on the merits and prospects of success and in relation to the strengths and weaknesses of the case on behalf of the husband and on behalf of the wife.
  • Providing the client with advice in relation to the options and paths available for resolution of the case by negotiation or contested hearing and advising of the costs associated with those alternative options.
  • Ensuring that the client had the benefit of advice in relation to the merits and realistic prospects of success and the weaknesses and strengths of evidence to enable the client to be in a position to make an informed and educated decision in relation to how to proceed. 

Background facts of the case

  • At the time the husband and wife married neither had significant assets or liabilities.  Both were working though the husband had a higher income. 
  • The wife was a beneficiary of a family Trust that had been set up by her parents.  The other beneficiaries of that Trust were the wife’s brothers and sisters and their children.  The Trustees were the wife’s parents.  The wife received payments from the Trust. 
  • The husband and wife bought and sold real estate.  The husband was gifted money by his parents to assist in the acquisition of real estate.  The wife reduced her workload after the birth of the first child and further reduced her workload after the birth of the second child.  The parties separated and the issue of property division arose.  The real estate in the asset pool to be divided was sold and mortgages over the property discharged. 
  • The net sale proceeds were considerable.
  • A dispute arose in relation to the division of the sale proceeds.  The central issue was what contributions were made to the acquisition, maintenance and improvement of the matrimonial assets. 

The Dispute – Competing Positions

The husband contended that there should be an equal division of property but acknowledged that there should be an adjustment to the wife to take into account the fact that the children were living with her. 

The husband asserted that he had made most of the contributions.  He had earned more during the marriage.  He had received a gift from his parents.  He had by his own efforts, renovated all of the properties and increased their value. 

The wife contented that she had made the most contributions.  The wife asserted that it came from the family Trust that was responsible for the husband and wife building up the property portfolio and increasing the value of the overall asset pool.  The wife also said that moneys that came to her from the family Trust were repayable to the family Trust. 

The Family Trust – Loans or Gifts

The wife said that the moneys paid by the Trust should be paid back to the Trust and that only the remaining money should be divided and that money should be divided in her favour.  The wife said that the Trust loaned her money.  The husband said that the Trust paid little or nothing but if it did, it was not repayable. 

A number of issues arose:

  • A forensic issue as to whether or not the Trust had advanced moneys.
  • If the Trust had advanced moneys what was the basis of the advance; was it a loan, a distribution or a gift.
  • Were the moneys that may be found to be advanced actually applied to the acquisition, maintenance and improvement of property.
  • The wife said that the amount to be repaid to the family Trust was significant – Would the Trust actually be repaid?   

The husband said that the family Trust had not provided any moneys that resulted in the acquisition, maintenance and improvement of property. 

Gifts or Loan – Effects of Outcome

The issue of whether the moneys allegedly advanced were gifted or loaned made a very big difference to the financial outcome for each of the parties.  In effect if money had to be paid back to the family Trust, then the amount of money available for division between the husband and the wife was significantly reduced.  The husband’s view was that if the money was paid back to the Trust, the Trustee of the Trust would pay it back to the wife. 

Watson & Watson Lawyers’ preparation of the case

The wife was asked to provide a copy of the family Trust deed and copy of the financial statements for the Trust fund for each year of the marriage and each year following separation.  The financial statements of the Trust did show that moneys were advanced by the Trust to the wife but the payments made were not in large lump sums but rather in the way of smaller, regular maintenance payments. 

Watson & Watson adopted the position that the moneys were not advanced by way of loan but were simply gifts to the wife by way of financial support.  The wife could not show that the moneys advanced were used in the acquisition, maintenance or improvement of matrimonial property.  The wife continued to maintain a position which on an analysis of the facts and financial records could not be sustained. 

Proceedings were commenced in the Family Court and proceeded to a Conciliation Conference.  At Conciliation, the wife’s case could not be sustained and the matter was resolved on that basis.

The identification of the husband’s position and establishing the wife’s true position given the complexity, resulted in a positive outcome for the husband within the parameters as predicted by Watson & Watson Lawyers.  The Court made an Order confirming the settlement reached. 

At Watson & Watson Lawyers our experienced Family Law Solicitors can assist you in achieving a fair and equitable financial/property settlement.  If you are in the process or proposing to enter into financial/property settlement with your estranged spouse or partner and have any concerns/queries or need assistance in what can often be a stressful time, our Senior Family Lawyers can assist.  Please contact Richard Watson Senior Family Lawyer or his Personal Assistant Shereen Da Gloria to discuss your matter and seek appropriate 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.

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