Good stewardship will no longer count in division of assets3-March-2014 Family Law By admin
In Kane v Kane, the Family Court ignored the often-used “special contribution” principal in property settlements. This meant that the husband’s decision to invest the couple’s superannuation in a certain way, which led to considerable gains, was not taken into consideration in the split of the couple’s assets.
This Family Court decision means that future cases which involve the division of a wealthy couple’s assets will likely follow the lead taken in this case and result in a 50:50 split of all assets.
The facts of Kane v Kane
The parties in this case had four children and had been married for almost 30 years. Their assets totalled $4.2 million, with $3.4 million of that amount held in a superannuation fund. During the course of the marriage, the husband had invested $539,500 of the couple’s superannuation in shares, a decision that was against the wife’s wishes. At the time of their divorce, those shares were worth $1.85 million. All other assets, which were approximately $800,000, were divided equally. But the superannuation fund posed a contentious issue.
The decision implies that the test of whether a contribution can be considered “special” is far stricter than was implied in previous cases.
At the initial hearing of the matter, the judge awarded the husband two-thirds of the fund as a result of the husband’s “skill in selecting and pursuing the investment”. So despite both parties contributing equally into the fund, the husband received a greater share of the assets due to his investment strategy.
The wife appealed and the full Family Court of Australia found that the trial judge may have given “unacceptable weight” to the husband’s “special skills” and overturned the decision. The husband did not have any professional qualifications or special knowledge of the business in which he invested and had taken a calculated risk. Fortunately for him, this calculated risk proved correct.
Streeterlaw’s Accredited Specialist in Family Law, Simone Green, said this case waters down the principal that was often used in property settlements between couples that have been married a long time and accumulated significant wealth.
“The decision in Kane v Kane implies that the test of whether a contribution can be considered “special” is far stricter than was implied in previous cases,” she said.
“While a Court can still determine that one party deserves to receive more assets than the other based on their financial contributions, the facts of each case will be examined with more scrutiny.”