Top

Are financial contributions seen as equal to those as homemaker in family law property disputes?

In Hoffman [2014] FamCAFC 92 (27 May 2014) the Full Court (Faulks DCJ, Murphy and Watts JJ) considered an appeal by a litigant in person where Brewster FM (as his Honour then was) divided a pool of almost $10 million equally after a 36 year cohabitation (para 1). The husband contended that “his contributions should have been regarded as ‘special’ thereby resulting in a disparity … when compared to those of the wife” (para 6). The contributions of the husband were said to relate to “‘[s]pecial [s]kills and [e]ntrepreneurial flair” applicable to both substantial investments in real property and the share market” (para 5).

The Full Court said (from para 21):

“To the extent that his Honour’s judgment is to the effect that there is no binding rule of law relating to ‘special contributions’ his Honour is, in our view, correct.

( … )

[27] No authority to which this Court was referred, nor any decision of this Court revealed by our own research, establishes (or suggests) that anything said by this Court about ‘special contributions’, contributions having ‘special features’, or any similar expression is in the nature of a binding rule of law.

[28] … This Court has itself counselled care in not elevating particular statements ‘to a “principle”’ (see, for example, Browne & Green (1999) FLC 92-873, at [49]-[50]).

( … )

[34] If there is a guideline relating to ‘special contributions’ the failure by his Honour to apply such a guideline:

‘ … does not of itself amount to error, for it may appear that the case is one in which it is inappropriate to invoke the guideline or that, notwithstanding the failure to apply it, the decision is the product of sound discretionary judgment’: (Norbis [(1986) 161 CLR 513] at 520, per Mason and Deane JJ).

[35] However:

‘[t]he failure to apply a legitimate guideline to a situation to which it is applicable may … throw a question mark over the trial judge’s decision and ease the appellant’s burden of showing it is wrong’: (Norbis at 520 per Mason and Deane JJ. Emphasis added).

( … )

[41] What emerges, relevant to the instant discussion is, first, that there is a distinction between a ‘legitimate guideline’ and guidance or ‘statements of principle’ that do not fit that description. Secondly, a ‘legitimate guideline’ requires, axiomatically, a principle which can be identified with clarity and, in addition, the identification of a ‘particular class of case’ to which it applies. As has been seen, a legitimate guideline should either apply to all cases or, at least, all instances within an identifiable category of case.

( … )

[49] … if a ‘legitimate guideline’ is to be established by reference to the ‘accumulation of wisdom’ from earlier decided cases it must be possible to state with clarity the principle underpinning the guideline. More specifically, if descriptors such as ‘special contributions’ (or whatever adjective or noun are used to similar effect) are capable of expressing a principle applicable across all cases, or a particular category of case, the factual findings necessary to satisfy the epithet ‘special’ or ‘extra’ must be readily identifiable. They are not. Reference to the authorities, includingJEL [JEL & DDF (2001) FLC 93-075], does not establish the components of ‘special’ or ‘extra’. Further, when attempts were made to arrive at one such criterion (the ‘size of the asset pool’) they were quickly and properly rejected in JEL itself [at 152(f)] ( … )

( … )

[52] In each case, we consider that the point being made is that there is no principle or guideline (or, indeed, anything else emerging from s 79), that renders the direct contribution of income or capital more important – or ‘special’ – when compared against indirect contributions and, in particular, contributions to the home or the welfare of the family. ( … )

( … )

[55] … having properly rejected the size of the asset pool as an identifying characteristic, it is in our view entirely impossible to articulate any other characteristic that might underpin any guideline relating to ‘special contributions’ or what contributions with ‘special factors’ might be. Any such categorisation, in our view, ignores the gender neutral language of s 79 (and the analogous provisions applying to de facto relationships contained in Part VIIIAB of the Act) and is predisposed to discriminate against a spouse on the basis ofroles which have been agreed (expressly or by evolution over time) within a legal institution which is, in the case of marriage, defined to be … ‘the union of a man and a woman to the exclusion of all others, voluntarily entered into for life’ …, and which, in the case of de facto partners, requires a ‘couple living together on a genuine domestic basis’ … ”

The Full Court concluded from para 61:

“We consider that the true position is, with respect, put correctly and succinctly by O’Ryan J in D & D [2005] FamCA 1462 at [271]: “… the notion of special contribution has all been a terrible mistake … what I have to do is identify and assess the contributions made by each of the parties without any presumption of entitlement” (emphasis in original). The task is to make findings as to the nature, form, characteristics and duration of each and all of the contributions made by each of the parties referenced to s 79(4), without adjectival qualification … Thereafter the court must undertake the exquisitely difficult task of assessing how those respective contributions, often of differing types (a task which his Honour referred to below as a comparison of apples and carrots (at [42])), find expression in qualitative assessments … In the context of a case such as the present one, the duration of the marriage … has an important influence upon what evidence is relevant in respect of contributions. There is no need to conduct a minute forensic examination of the details of contributions over many years with each party extolling their own efforts and attempting to diminish the other’s.

[62] In summary, we do not consider that there is any ‘legitimate guideline’ of ‘special contributions’ or any such guideline pertaining to particular contributions containing ‘special’ factors or features that ‘eases the burden’ in establishing a miscarriage of discretion.

( … )

[69] In so far as his Honour refers, to ‘big money cases’, we reiterate what we have said earlier. If, as we consider is the correct position, there is no ‘binding rule of law’ or no guideline properly so called relating to ‘special contributions’, then the value of the property interests the subject of the s 79(4) discretion is not of itself determinative of any particular exercise of the discretion or any particular result or results emanating from it.

( … )

[84] Once the central argument as to the place of ‘special contributions’ is rejected, nothing to which the Court was taken, nor any argument advanced by the husband is persuasive of his Honour having failed to give sufficient consideration or weight to any or all of the matters said by the husband to comprise his ‘special skills’ or ‘special contributions’.”

The husband’s appeal was dismissed.

, , , , , , , , , , , , , ,