Risks in not finalising property settlements quickly after separation

Posted on Oct 12, 2017 by Samantha Miller   |   Categories: Family Law

A reminder that there are considerable risks in not finalising a property settlement as quickly as possible after a separation.

The recent case of Calvin v McTier [2017] FamCAFC 125 serves as a stark reminder of two things:-

1. Until you have either a Binding Financial Agreement or a Court Order (by consent or otherwise) you cannot consider yourself safe from a property application being brought by a former partner no matter how much time has passed; and

2. The fact that property was acquired after separation will not necessarily save it from being considered by the Court as matrimonial property and therefore ‘up for grabs’ by your ex-partner.

The relevant facts in the matter of Calvin v McTier were as follows:-

a. The relationship lasted approximately 8 years;
b. There was one child of the relationship;
c. The child was equally cared for by both parties in a week about arrangement;
d. The divorce was made final three and a half years prior to the wife’s application to the court;
e. The husband made a greater initial contribution to the assets of the relationship; and
f. The husband received a significant inheritance four years after separation.

The trial judge found that the husbands remaining inheritance (a portion of it had been dissipated since receipt) accounted for 32 per cent of the overall assets of the parties. The trial judge also found that the initial contributions of the husband far outweighed those of the wife. Further the husband had made a greater contribution to the financial needs of the child post separation.

Ultimately the trial judge found that the husband’s contributions should be assessed at 75% and the wife’s at 25%. A further adjustment was then made in the wife’s favour to reflect the disparity in income and earning capacity. The ultimate result was a division of 65% of the property to the husband and 35% to the wife.

The husband appealed the decision on a number of grounds including whether the inheritance should have been available for division between the parties.

The husband clearly sought to argue that it should be excluded from the asset pool entirely as it was received well after the end of the relationship and the wife made no contribution towards its acquisition at all.

The following was confirmed:-

a. The court had the power to make an order dividing the inheritance;
b. Property acquired after separation can be the subject of division; and
c. It is a matter of discretion whether or not the inheritance was properly included in the property to be divided;

Ultimately the husband failed on all grounds of appeal and was ordered to pay the wife’s costs.