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Another good reason to settle financial matters quickly after separation

When a marriage ends and parties obtain legal advice about their rights and entitlements, especially about financial matters, they are often advised to finalise financial matters formally as soon as practicable to avoid a claim being made well after the marriage is over.

A later claim can be inconvenient as shown in Farmer v Bramley where a wife received a 15% share of the ex-husband’s $5,000,000 Lotto winnings won almost two years after separation, despite making no contribution to the win. The recent appeal case of Calvin & McTier has again confirmed the wisdom of the advice to settle financial matters promptly.

The husband in the recent case of Calvin & McTier received a large inheritance four years after separation and three and a half years after the divorce. There had been no formal financial settlement between the parties and the wife was given leave under s 44(3) of the Family Law Act 1974 to pursue a property settlement claim out of time.

The parties had an eight-year relationship and one child. The child was cared for equally in a week about arrangement. The husband brought more assets into the relationship than the wife.  Contributions were assessed as 75%/25% in the husband’s favour with a 10% adjustment to the wife for s 75(2) factors to reflect the disparity in the parties’ incomes and earning capacities.

The trial judge held the asset pool included the inheritance (which equated to 32% of the total asset pool) and divided the assets so the husband received 65% and the wife 35%.

The husband appealed and argued that the inheritance should not have been included in the property to be divided because he had received it well after separation. He argued there was no connection between the inheritance and the parties’ matrimonial relationship.

The Full Court also rejected the husband’s argument that the High Court’s judgment in Stanford v Stanford supported Justice Guest’s dissenting judgment in Farmer & Bramley where Justice Guest disagreed that the Lotto win should be included. The Full Court held that the Court retained a discretion about how to approach the treatment of property acquired post-separation and could have either included the inheritance amongst the property to be divided and deal with all the property globally or dealt with it separately and still assess contributions and s 75(2) factors. The appeal was dismissed.

Once again, the warning given to separating parties about a timely financial settlement has proved to be a commonsense strategy.


For more information on this topic please contact Margaret Miller, Partner and Family Lawyer. This article has been prepared by Bell Legal Group for general information purposes only. It is not legal advice and should not be relied upon as such.