Family Court Case Study

Mr and Mrs Kane were married for almost 30 years and had four adult children. After the sale of their business in 2008, they established a self-managed superannuation fund with a Trustee called R Investments.

Against the wife’s wishes, Mr Kane invested $540,000 in shares in a company. Within a short time the value of those shares more than tripled. They agreed that their contributions to their assets over their marriage were equal, except for their super fund.

The Trial Judge decided that Mr Kane should get a far greater share of the superannuation fund because his decision to invest in a particular company was “a spectacular success” and his skill in researching and identifying those shares as a worth while investment, despite his wife’s opposition, meant that he had made greater contributions than had she to that asset.

The wife appealed to the Full Court of the Family Court of Australia and her Appeal was upheld and the case sent back for re-hearing. The majority of the Full Court said that the result, which worked out to be almost a two-third/one-third division of the available assets in the husband’s favour, was not ‘just and equitable in all the circumstances’ and that ‘excessive weight’ had been given to the husband’s contribution to the superannuation.

This was because superannuation had been dealt with by the Court in isolation from other contributions made by the husband and the wife to the acquisition, conservation and improvement of their property. The Full Court made it clear that all contributions have to be looked at, not simply those about which the parties are in dispute.

When the contributions to all assets were taken into account, along with the contributions to superannuation, the overall result was too one-sided.

Their Honours also pointed out that the marriage was a long one, and that isolating one set of contributions and calling them ‘special’ ignored the myriad of contributions that are made by both parties in a long marriage. They also observed that, if the investment decision had resulted in a loss, the husband would not have been claiming a ‘special contribution’.

The case reminds us that, especially in long relationships, the Courts usually look at the efforts of both parties (both financial and non-financial, as justifying a finding of equality of contribution).

While the Full Court has not held that there is no such thing as ‘special contributions’, it is likely to be harder to justify a bigger outcome based on ‘special contributions’ unless those contributions have been unusual and produced significant wealth.

Denis Farrar