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30 October 2023

How will your initial contributions be treated – are you a springboard or a sand dune?

In this video, family law partner Justine Woods talks about how your initial financial contributions to your relationship might be treated in your family law matter.

Video transcript

Hello. Hello, everyone. I’m Justine Woods. I’m the family law partner at Cooper Grace Ward. And today I’m going to talk about how your initial contributions might be treated in your family law matter. And my subtitle is, ‘Are you a springboard or are you a sand dune?’

Recent case of Gadhavi and Gadhavi

Now, the springboard term appears in the cases, I myself have just made-up sand dune and I’ll explain what I mean as we go through. I thought a helpful approach might be to look at a recent case of Gadhavi and Gadhavi decided in 2023. Now, that was a 20 year marriage between a very successful husband in the financial sector and his very successful wife, who was a doctor. They had two adult children who were 20 and 22 by the time the matter was determined. Now, the husband’s initial contributions 20 years ago were about 2.7 million, and the wife had about $ 375,000. Within 12 months of marriage, the husband had sold a piece of property from his initial pot of money, and they bought unencumbered in joint names a residential property for about 2 million. The wife did contribute some funds, but it’s not clear from the judgment how much. That property and it must be somewhere fabulous, like in Sydney, for example, on the harbor. By the time it came to trial, that property was worth $14.5 million and represented 73 % of the entire asset pool. So, the asset pool roughly was about $24 million.

Corroborating evidence

Now, it was accepted by the trial judge with a great deal of corroborating evidence that the husband had been coercively controlling of the wife and children and also physically violent to them. And he was removed from the home with an AVO, which is the interstate version, I’m from Queensland, so we call them a DVO but often they’re AVOs in other states and territories. And he was also charged with assault, stalking and intimidation. So, the trial judge found that the wife’s contributions were more arduous because of the husband’s violence to her and and to the children. And under an old authority of Kennon, which we’ve talked about in other videos, she received an extra percentage weighting in her contribution score because the contributions as a homemaker, parent and working were made more difficult by the husband’s sustained course of conduct to her. And what that meant was the trial judge said the wife’s contributions go up to 60% but we need to make a further adjustment and the final order was 55% to the wife and 45% to the husband. Now, the husband appealed and the full court upheld the appeal and God help this poor couple. Like many couples who are embroiled in litigation, then one of them’s not happy, or potentially both aren’t happy with the result, they appeal, they’re what’s called remitted for rehearing. So, the appeal court doesn’t substitute its own decision for the trial judges, which they’ve found to be in error. They say see you later, back to the start again. So, what happened here is that the full court looked at the issues and said, we can’t see… Completely agreed with all the reasoning for the Kennon adjustment in the wife’s favour. That is, she received more because of the husband’s violence towards her. But we can’t see how his initial contribution, which has turned into 75% of the asset pool has been so affected that it’s reduced by the percentage that the trial judge found it to have been.

A case can go one of two ways

Now, this is the real point of my case. It’s very compelling about domestic violence and the effect that that will have and whether people consider it worthwhile to pursue a Kennon adjustment and we’ve got other videos about that. The issue that intrigues me here is it’s the perfect example of how a case might go one of two ways. So, both of them thought they had very strong arguments based on the husband’s initial contribution. So, there are some cases, they’re the springboard cases where your initial platform of wealth is then considered to be the jumpstart that gives you your future wealth and heavy emphasis is given and contribution weighting given to that. Then there’s a whole other stream of cases which talks about length of relationship, offsetting contributions and the shorthand for it, although this is not formally used, is erosion, the doctrine of erosion, which is why I mentioned the sand dunes. Are you the eroded sand dune? And there are authorities on both sides. And I have to say with dear love for my former colleagues and friends who are judges and for the esteemed jurists whose judgments I read every day and for the system I’ve practiced in for nearly 30 years and have absolute respect for, it could go either way. And so if you’re going to be taken into family court world in a piece of court proceeding, bear in mind that it will depend upon which stream of case the judge happens to find your evidence flows towards. In this case, it was the springboard and the court here looked at some older cases which had made comments such as regard has to be had to what was the use of that party’s contribution.

Other examples

Now, equally, there are other cases where, for example, land that one party brought to the relationship was re zoned and it turned it into a bomby piece of virtually useless land into something that could then be developed and the value jumped exponentially. That was said to be not a particular contribution by either party, so there was no contribution weighting in favour of the person who brought the land in because it was kind of seen to be a windfall. So, there’s an argument perhaps that they’re not terribly dissimilar situations. That case I’ve mentioned, and this one here of Gadhavi, but a very different potential outcome. Now, of course, we don’t know the outcome, but this poor family has already been sent away for rehearing. That sometimes means that maybe common sense dawns or the emotional agenda is addressed better and they can reach a settlement. Or one person just collapses out of litigation syndrome where they just can’t continue or they’ll go back into the process and turn up before another judge. So, you can see that when you see your family lawyer, they’re not going, even with all of the information before them, they’re not necessarily going to be able to give you an utterly definitive answer. They’ll say it could be this, it could be this. These are the arguments we’ll mount for and against the countervailing positions. But I think really what this reinforces, if you can possibly reach an agreement, with appropriate advice, without making crazy concessions, addressing all of the issues, it’s infinitely better than being drawn into this system where you’re not making decisions as an adult. Some other adult is imposing them upon you, and it might be based on one fashionable stream of case or the other.

If you’d like to talk about this issue or any others, please don’t hesitate to contact Cooper Grace Ward.

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This publication is for information only and is not legal advice. You should obtain advice that is specific to your circumstances and not rely on this publication as legal advice. If there are any issues you would like us to advise you on arising from this publication, please let us know.

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Justine Woods

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