By Natalie Barry, Associate

Consideration of an initial contribution

In Jabour, the Full Court of the Family Court was required to consider a decision of the Federal Circuit Court (FCC) where the parties’ percentage contributions during their marriage had been assessed at 66:34 in favour of the husband.

The adjustment in the husband’s favour was largely based on consideration of the significant increase in value of three parcels of land in which the husband had purchased a half interest thirteen years prior to the marriage for a total of $26,000.

During the marriage, the husband sold two half shares to acquire a full share of one of the parcels of land (Property A). In 2010 the property was rezoned for residential use. Property A was valued at $10,350,000 at the date of the final hearing in the FCC.

The parties separated in 2013. The net asset pool was $9,033,913 exclusive of superannuation entitlements.

At first instance the FCC found that the parties’ contributions during cohabitation were equal. However, the FCC concluded that the husband by “bringing Property A…into the relationship has made a significant contribution which needs to be appropriately recognised in the division of property between the parties”.

The wife appealed the first instance decision in the Full Court of the Family Court of Australia. The wife submitted that the primary judge erred “in seeking a nexus between contributions and a particular item of property when assessing contributions holistically over a long marriage and when considering the assets of the parties on a global basis….quarantining from the assessment of contributions, all of the other contributions made by the parties to the assets of the marriage”.

The husband submitted that the court, in assessing an initial contribution, should have regard to the value of that contribution as at the time of the hearing, rather than just to its initial value. While the Full Court accepted this position which had been stated in the case of Williams & Williams [2007] FamCA 313, it considered that the court in Williams had somewhat overstated the importance of the increase in value of a piece of property at the expense of “the myriad of other contributions that each of the parties has made during the course of the relationship”.

The Full Court went on to reference Zappacosta v Zappacosta (1976) FLC 90-089, a Family Court decision which had been referred to with approval by the Full Court in Wells & Wells [1977] FamCA 62, which noted that the rapidly accelerated value of a property due to rezoning was a mere windfall to which neither party had a greater or lesser claim.

The Full Court concluded that the weight to be attached to an initial contribution must be assessed against the rubric of all the contributions, both financial and non-financial, made by the parties over the course of their relationship. They ultimately found that the FCC had erred in recognising the husband’s contribution by having regard to its value at the time of the hearing, rather that it being merely the springboard for its later value.

The Full Court ultimately re assessed the contributions of the parties at 53:47 in favour of the husband.