A financially independent marriage and sixteen year separation have seen an ambitious husband knocked back from receiving any of his ex-wife’s property. The wife, a specialist medical practitioner, was represented by Taussig Cherrie Fildes in the litigation.
TCF briefed Tim North SC to appear for the wife at final hearing.
Justice Cronin accepted the wife’s argument that, now in their late sixties, the parties’ respective asset positions reflect their individual employment, investment and lifestyle decisions before, during and after the marriage. Accordingly his Honour held that there was no justice and equity in altering existing property arrangements.
The parties married later in life, after the wife had completed her medical specialisation. The husband was university-educated but primarily pursued music as his chosen vocation. There was a “significant disparity” in the parties’ incomes at marriage, and this continued within the marriage and thereafter.
At the time of the marriage, the wife was the proprietor of four encumbered properties plus an unencumbered half share in her medical rooms. The husband’s two properties were both encumbered. His rural property became the matrimonial home.
Two children were born of the marriage. The husband submitted that the parties’ parenting contributions were equivalent during the marriage, but he acknowledged that he wife had made a greater contribution in this domain following separation.
Property investment was an interest of the parties and they each acquired properties in their own names and at their own expense during the marriage and after separation. The husband from time to time performed repair and maintenance works on the wife’s properties, including project-managing a significant residential renovation. The husband argued that these contributions militated in favour of a property adjustment.
Justice Cronin did not accept this submission, finding that while the husband may indeed have devoted time and energy to the works, the wife met the cost of all materials and also sustained the family financially while the husband was undertaking the works.
It was important, his Honour held, that the husband had asked the wife for a share of the sale proceeds after the renovated home was sold, and that she had declined his request. This indicated that the parties viewed the property, and its profits, as belonging to the wife, rather than constituting a marital or commercial joint venture of the nature implied by the husband. The parties did embark upon two co-investments, one during the marriage and the other after separation. Costs, including the deposit and mortgage repayments, were met equally and investment proceeds were shared equally.
On occasion, the parties lent money to each other, with interest payable on the loans.
Particularly telling, for his Honour, was that the husband borrowed from the wife to satisfy his half share of a deposit on one of their mutual investments. Also, when the wife borrowed a substantial sum ($100,000) from the husband following separation, the husband insisted it be repaid at commercial interest rates.
Household expenses were shared during the marriage, albeit the wife paid the larger share. The wife also made sizeable contributions to the husband’s mortgage, such that it was paid off within four years’ of marriage.
The parties maintained separate bank accounts vis-à-vis their household finances.
His Honour found that the husband and wife continued to comport themselves separately in a financial sense after the marriage broke down. The ending of the personal relationship had few, if any, financial ramifications for each of them (save that the husband no longer had the financial support of the wife) and they each continued in their individual financial arrangements.
For example, the husband did not ask the wife’s permission before embarking on a round-the-world sailing trip in 2013, and he applied his superannuation “as he saw fit”. To the extent that the parties continued to holiday as a family even many years after separation, his Honour held that this was usually at the instigation and expense of the wife, and intended by her to provide the children with harmonious family experiences.
These various indicia of financial independence were powerful factors in favour of the wife’s Stanford argument. However, the husband’s fifteen year delay in commencing litigation was also deleterious to his case.
His Honour upheld the wife’s submission that her post-separation conduct did not legitimately give rise to an expectation on the part
of the husband that she would provide for him financially. Furthermore, the wife, for her own part, was entitled to manage her financial affairs and plan for the future without an ongoing expectation of having to support the husband. Thus the passage of time eroded any claim the husband might have had at the time of separation. As his Honour described the situation: “neither party regarded it as necessary or desirable to seek to alter their property interests as a result of the separation [and] the assumptions that underpinned their respective lives were not such as to prompt either of them to seek to alter their respective interests in property for many years”.
Justice Cronin considered the statutory mandate of s 79(2) of the Family Law Act 1975 (Cth), which provides that the court shall not make an order for property adjustment unless satisfied, in all the circumstances, that it is just and equitable to do so. His Honour accepted the wife’s submission that this calls for the identification of a principled reason to intervene in, and alter, existing asset holdings. It should not be assumed that spouses’ “rights to, or interest in ‘marital property’, are or should be, different from those” then in existence, or even that a financial disparity between spouses will necessarily give rise to a property adjustment.
Finding, as his Honour did, that the husband “could not reasonably have been able to assume that he would one day share in the property acquired by the wife”, Justice Cronin ultimately dismissed the husband’s application and made no order for property adjustment.
This entitled the wife to retain all of her assets, totaling about 85% of the combined assets of the parties, free from any claim by the husband.
Click on the link here: