Australian family court overturns ruling that divorcing husband should receive more
An Australian family court has overturned a ruling that a divorcing husband should receive a greater proportion of the couple’s assets after he successfully invested in shares.
In the case, known as Kane & Kane, a wealthy couple separated in 2009 after being married for nearly 30 years. By that point, the couple had more than AU$4 million in assets, the majority of which was held in a superannuation fund.
This fund was set up with equal contributions from Mr and Mrs Kane. But Mr Kane later invested a large sum on the stock market, the Sydney Morning Herald reports. His investment was successful and generated a large profit.
As a result, when the couple split, the family court judge awarded two thirds of the fund, based on “his skill in selecting and pursuing the investment”. This equated to an additional $1 million.
The remainder of the couple’s assets – approximately $800,000 – was divided equally. The woman appealed and the decision was overturned by the Family Court of Australia who declared that the original judge had given “unacceptable weight” to the husband’s investment skills. The unequal division “could not be justified, said Deputy Chief Justice John Faulks.
There is often an element of luck in special contributions made to a couple’s wealth, he added:
“It is difficult to correlate effort or skill (even if special) with result. Frequently, the financial result of a contribution (whether by physical or intellectual labour or imagination foresight and perspicacity) will be influenced by external factors beyond the control of the party contributing.”
The case will now be reheard before a new judge.
This is an interesting case, but the reality is that, up here in the English courts, most judges would be unlikely to see a financial contribution of this nature as sufficient to depart from the fundamental principle of asset equality in divorce. Only a ‘stellar contribution’ to joint assets is normally sufficient – i.e. earning a “vast fortune” that it would clearly be unjust not to recognise.
In the 2005 divorce of advertising tycoon Sir Martin Sorrell, Mr Justice Bennett defined a stellar or “special contribution” as “a comparatively simple concept that one of the parties has within him/her a seed of genius which will be recognised when seen”. Sir Martin was duly awarded 60 per cent.
Sir Martin’s wife, incidentally was represented by future High Court judge Sir Nicholas Mostyn.
A similar principle applied in the later case of Charman v Charman. By the time this three-decade marriage came to an end, the couple had a fortune totalling £131 million, an achievement which earned them a place on the Sunday Times Rich List.
Although the court rejected Mr Charman’s initial argument that his wife had been no more than a “housewife” and she should therefore content with a settlement of £20 million, he still received the lion’s share of the couple’s assets (62 per cent), thanks to his ‘stellar’ contribution. Mrs Charman walked away with a mere £48 million.
But such headline-hogging cases are very much he exception rather than the rule. For most divorcing couples, a 50-50 split will the central principle of their financial settlement.
Photo by s_falkow via Flickr under a Creative Commons licence
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Marilyn Stowe is the senior partner in Stowe Family Law, which has offices in Yorkshire, Cheshire and London. With more than 30 years’ experience handling divorce cases and family law proceedings she is regarded as one of the most formidable and sought after divorce lawyers in the UK. In 2012, Marilyn became one of the first solicitors to qualify as a family law arbitrator.
All persons mentioned in the scenarios are fictitious: details have been deliberately changed in order to protect identities and other confidential circumstances of my clients. All advice and information on this blog including posts written by guest authors, is given only as a general guide to the operation of the law on the date of publication. Readers must place no reliance whatsoever on the content of this blog and must always obtain their own legal advice. Marilyn Stowe, Stowe Family Law LLP and guest authors accept no liability whatsoever arising as a result of reliance upon its content.
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