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Husband’s Significant Post Separation Earnings – Shared but not always


The Family Court or the Federal Circuit Court where there is a breakup of a marriage or de facto relationship which deals with issues relating to property considers many issues we have indicated in other articles.  Even though there are various different specific sections of the Family Law Act which deals with particular elements relating to allocation and adjustment of property the Family Court considers all matters (other than why the parties separate) in considering and determining the allocation of property between the parties following the breakdown of the relationship.   If there is a Binding Financial Agreement which is enforceable this can override general sections of the Family Law Act applicable to the division of the property. 

The Family Court allocates the assets and liabilities of the parties as at the date of the hearing.  This does not mean that the Court always applies the same percentage allocation of the net assets at the time of the hearing no matter the delay in the hearing.  For example where there is a delayed hearing the % allocation applied may be different to the % allocation that may have been applied if the hearing occurred shortly after separation.  There are many differing circumstances which arise and are considered in the allocation as determined by the Court; which is determined at the date of the hearing.

Recently, the Full Family Court considered an Appeal from the Judgment of a Judge of the Family Court at Sydney where post separation the husband obtained lucrative employment and his income was approximately $9 million and there was a redundancy package available valued at over $2 million. 

In that case the husband and the wife separated 13 year marriage after the marriage. There were 4 children to the marriage and at the time of the separation the net value of the asset pool for division between the parties was approximately $7 million.  It was following separation the husband obtained the lucrative employment and his income was $9 million as set out above. 

The Trial Judge found that the contributions throughout the marriage were equal and made an adjustment in the wife’s favour of 10%.  The husband appealed. 

The Full Court essentially found that the Trial Judge had not made an error and that the parties had effectively continued the roles that they had carried out during the marriage, namely, that the husband earned income and that the wife continued to make important contributions by maintaining the home and being a single parent for the 4 children.  The Full Court said that the husband had arrived at his position by reason of his talents and hard work but that the wife had also contributed throughout the years preceding the husband obtaining his lucrative employment.

It had been argued by the husband on appeal that following separation there was no further obligation to continue to accumulate assets and that he was free to do as he wished.  The Court found in this case that it was a matter of judgment for the Trial Judge and not a mere computation of moneys earned following separation.

The result may have been different at the hearing if the facts could not support the position that the parties continued post separation as they did before separation.

In hundreds of cases Watson & Watson have been able to assist in advising and in negotiating having regard to all the circumstances and the timing of the negotiations and proceedings.

Often it is better to settle proceedings as early as possible, however with full knowledge of the asset position of the parties.  This will allow each party to have their own separate asset pool and to move forward.  However, there is no correct time and right time for proceedings and resolution.  Most often it is a matter of judgment which we have gained from many years experience.  However, one should always have regard to the net outcome having regard to the very significant costs that can and is often incurred in heavily litigated matters.

Please telephone Richard Watson to discuss the very important matters to give rise to a cost efficient resolution of property and all family related matters.

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