The death of special contributions in big money cases

The long-standing principle that the ‘special’ contributions of an entrepreneurial spouse in creating a pool of significant wealth should be given more weight than those of the homemaker and parent spouse has recently been overturned. The effect of this change is that the breadwinner, in what family lawyers have come to refer to as ‘big money’ cases, can no longer expect to receive a greater share of the assets.

The recent decision of the Full Court of the Family Court in Fields & Smith [2015] FamCAFC 57 highlights the very clear trend towards an equal division of property in circumstances where the Court finds that the parties have made equal, but different, contributions.

This case represents a significant shift in the law, and its effect upon the outcome of contested property settlement proceedings, negotiations between separated spouses hoping to settle or couples contemplating a binding financial agreement should not be underestimated.

Background facts of Fields & Smith

The parties were married for 29 years. The husband was considered to be the driving force behind the parties’ successful family business given his trade and qualifications. The wife was the homemaker and primary carer to their three children.

At trial, despite the trial judge rejecting the ‘special contributions’ argument made by the husband, the wife was only awarded 40% of the parties’ property. Both parties appealed.

The wife argued on appeal that:

• The trial judge devalued her contribution in the role of long-term homemaker and parent. She suggested that this approach resulted in an unfair burden on women regarding the economic consequences of property division.
• The trial judge was incorrect in concluding that the husband’s contributions outweighed hers.
• The trial judge placed inappropriate emphasis on the husband providing greater stewardship to the business.

In response to the appeal, the husband contended that the trial judge should have placed greater weight on his stewardship of the business and the significant wealth he created for the family and sought more than the 60% he had been awarded.

The Full Court appeal

The Full Court of the Family Court rejected the husband’s arguments regarding his ‘special contribution’. The Full Court highlighted that the husband was able to exercise his skills in the business because he was freed from the obligation of other family responsibilities. Viewed this way, the wife’s role as homemaker and parent facilitated the husband’s ability to make contributions in his role within the business.

The Full Court held that the ‘special contributions’ argument was inconsistent with the Court’s obligation to weigh contributions made by the husband and wife against the ‘acquisition, conservation and improvement of the assets’ in the marriage.

The Full Court was satisfied that there was an equality of contributions and that section 79 of the Family Law Act 1975 (Cth) does not suggest that one kind of contribution should be treated as less important or valuable than another.

The wife was successful on appeal and the property pool was divided equally between the parties.

Significance of the decision

The decision emphasises that, in long relationships, where the parties have made different but equal contributions in their respective roles, no particular form of contribution is weighted more heavily.

This reasoning now applies equally in high net worth cases, regardless of the fact that the family wealth may have been accumulated as a result of the particular skills of only one spouse.

The ‘doctrine of special contributions’ is no longer good law. Therefore, it is important for parties in long marriages with substantial wealth to identify disparities in their initial and post-separation contributions when seeking a higher contributions-based entitlement.

Please contact a member of our team if you require advice regarding the division of marital or de facto property, quarantining your property from a future claim, or to discuss your particular circumstances further.