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How Are Contributions Made Prior to a Marriage or Cohabitation Treated in Family Law Property Settlements? G & G [2000] FamCA 1075 (22 August 2000)

In a property settlement, a court considers the justice and equity of the proposed division of property with regard to the contributions of the parties. Contributions are addressed in sections 79(4)(a) to 79(4)(c) of the Family Law Act 1975 (Cth) ("the Act").


The case of G & G [2000] FamCA 1075 (22 August 2000) was an appeal made by the husband in relation to the application of section 79(4)(c) of the Act and the treatment of a Pre-Marital Agreement.


Section 79(4)(c) states:

the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent.


 

The Case of G & G [2000] FamCA 1075 (22 August 2000)

The husband brought an appeal against final orders made by Judge Boland, awarding the wife 15% of the asset pool for contributions and a further 10% on account of her future needs, bringing the wife's total entitlement to 25%.


The parties were both in their seventies at the time of trial. The wife was born in the United Kingdom in 1921, and the husband was born in Italy in 1925. The wife was previously married; her former husband passed away in May of 1973.


The husband was a friend of the wife and her late husband, and he had never previously married. The parties commenced a relationship in October 1973 and married in 1986. The Trial Judge found “a close and exclusive relationship rather than cohabiting in a defacto relationship as defined in the then definition in the Defacto Relationship Act 1984 (NSW)".


The parties were engaged in early 1975, but nothing came of it until almost a decade later when they married in 1983.


The parties entered into a Pre-Marital Agreement (often known as a pre-nuptial agreement) two days before marrying. They separated in 1995 with no children of the marriage. The Trial Judge had reservations about whether this Pre-Marital Agreement was truly voluntary on the wife's part and was not satisfied the parties were in an equal bargaining position as there was evidence that the husband would not go ahead with the marriage unless the wife signed the agreement.


The Trial Judge found that the wife had made pre-marital contributions to be taken into account under ss 79(4)(a), (b) and (c), and she set aside the Pre-Marital Agreement having regard to the circumstances at the time it was made and what occurred after.


The husband’s appeal contended that the Trial Judge erred in taking into account the wife’s contributions prior to marriage under s 79(4)(c) as there was no family to contribute to at that time. This argument was dismissed on appeal as the Appellate Judge followed the authority of Kowalski v Kowalski (1993) FLC 93-342, W v W (1997) FLC 92-723 and Nemeth and Nemeth [1987] FamCA 12, which provide that pre-marital contributions can be taken into account.


The husband also contended that the Trial Judge erred in her treatment of the pre-marital agreement. He argued that the Trial Judge should have first looked at the effect of the pre-marital agreement and considered whether it would have produced a result within the reasonable range.

 

              Pre-Cohabitation Contributions

The factual circumstances of the pre-cohabitation relationship and the wife’s pre-cohabitation contributions were identified as follows:

  • The husband lived with his traditional Italian mother, and the wife made efforts to get along and fit in with his family.

  • The wife learned Italian for him.

  • The wife altered her cooking to be more like how his mother cooked for him.

  • The wife assisted him with the English language in the context of his business activities.

  • The wife provided household services such as laundering the husband's dress shirts.

  • The parties were not financially dependent on each other and did not comingle their finances. However, the husband financially assisted the wife from time to time.

  • The wife brought breakfast for the husband before work.

  • The wife assisted in the husband's business and accompanied him to business meetings. She worked three days a week at his house.

  • The parties engaged in intimacy with each other; the husband regularly stayed overnight at the wife’s premises, and the parties would attend motels together, registering under synonyms Mr and Mrs G.

  • The wife’s pre-cohabitation non-financial contributions to the acquisition and conservation of the property, such as helping in the husband's business, were offset by the husband’s periodic payments to the wife.     

In summary, it was found that the wife made contributions to the welfare of the family before cohabitation within the meaning of section 79(4)(c) of the Act, including breakfasts, allowing the husband to spend the night at her house, participating in intimacy, preparing food for functions and attending functions with the husband. These contributions were not to the extent of the daily duties of a homemaker and were partially offset by the Husband’s payments to the wife. 


Counsel for the husband argued that section 79(4)(c), which states “the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contributions made in the capacity of homemaker or parent” requires that there be a family already in existence and since the parties were not cohabiting, there was no family to contribute to.


The appellate Judge relied on W v W supra. In that case, a wife’s contributions to raising a child of the relationship from birth to the date of marriage to the child’s father were ignored because the parents were not cohabiting for that period, and this finding was later overturned on appeal.


The husband’s counsel sought to differentiate this case from the present case because there were no children of the relationship. This argument was rejected as W v W did not expressly limit pre-cohabitation contributions of homemakers to situations where there were children of the relationship but instead said it depends on the circumstances of the case, as the definition of family is expansive and not limited to intact families.


Nicholson CJ observed in paragraph 14: “It seems to me to be quite clear that the trigger to the Court’s jurisdiction is the fact of the marriage and the Court is then not confined to the actual period of the marriage in taking account of contributions. It can look to the situation before and after the marriage.”


It is worth noting that little weight was given to the wife’s contributions, and the husband’s counsel conceded that if the pre-marital contributions had been the only issue, he would not have appealed.

 

Pre-Marital Agreement

The Pre-Marital Agreement provided that the wife would receive 20% of the property pool.


The Trial Judge followed the principle of Woodcock v Woodcock (1997) FLC 92-739 and found that agreement was just and equitable at the time it was made, but also took into account what happened after. It was found Trial Judge should not have relied on the Contracts Review Act 1980, nevertheless the Appellate Court endorsed the Trial Judge's view that the husband unilaterally imposed his will on the wife.


The wife stated in her affidavit that the husband told her he would not marry her unless she signed the Pre-Marital Agreement, and that she did not want to sign the Pre-Marital Agreement. Both parties had legal advice as to the effect of the Pre-Marital Agreement.


It was found that the Pre-Marital Agreement was just and equitable when it was made. However, no provisions were made to increase the wife’s entitlements in the event of future contributions she may make to the relationship, such as long-term nursing care of the husband. The Pre-Marital Agreement did not consider circumstances where the wife may not be able to support herself, or where her assets substantially diminish, or that she may have ill health in the future (which is what happened in this case).


Therefore, the Trial Judge did not consider it just and equitable for the wife to retain 20% of the parties’ net assets as the Pre-Marital Agreement provided. The Trial Judge instead allocated 15% to the Wife on account of contributions and then added a further 10% on account of her future needs under the section 75(2) factors in the Act, bringing the wife’s entitlement to 25%.

     

Furthermore, the Court is reluctant to disallow parties from seeking property and maintenance orders, which is why parties can only oust the court's jurisdiction by a lawfully executed Binding Financial Agreement.


Counsel for the husband argued that the Trial Judge should have first examined the effect of the pre-marital agreement and considered whether it would have produced a result within the reasonable range. However, to do this, the Trial Judge would first have to determine what was a just and equitable result before comparing it to the result the Pre-Marital Agreement would produce. As such, it was open to the Trial Judge to determine the matter as she did.


The Trial Judge’s allocation of the wife’s entitlement was 25% compared to the 20% she would have received if the pre-marital agreement had been effective.


 

What Does This Mean for You?

The Court assesses and weighs up contributions according to your individual circumstances. The case of G & G FamCA 1075 points out that the Court is not limited to assessing contributions made during cohabitation. Rather, the marriage or the commencement of cohabitation and creation of a de facto relationship triggers the Court's jurisdiction to view the relationship in its full context.


Therefore, it is important to consider the nature of your relationship before living together and to consider whether there have been substantial contributions during that period, which can include things like:

  • Providing financial assistance to the other party or the other party's family members.

  • Providing caregiving or nursing to a family member of the other party.

  • Sponsoring the other party's Visa application.

  • Domestic and homemaking duties, such as attending the other party's residence to clean and do laundry.

  • Provision of gifts and entertainment.

  • Material assistance is provided to the other party's business or company.


When pursuing any family law claim, the legal fees in pursuing that claim should be factored in through a costs/benefit analysis.


It is worth noting that in G & G FamCA 1075, the wife's pre-marital contributions were minor: the majority of the 15% contributions adjustment awarded to her were made up of her contributions during the relationship. As such, if pre-cohabitation circumstances highly resemble the fact scenario in this case, focusing on the pre-marital/pre-cohabitation contributions may not be the best avenue if there were more significant contributions made throughout the cohabitation period.


Furthermore, the husband appealed the overall adjustment to the wife of 25%, arguing that the Pre-Marital Agreement should be upheld, which only provided for an adjustment of 20% to the wife. It may well be, depending on the size of the asset pool, that the husband's legal fees in launching that appeal outweighed the 5% difference in outcome.


Our comprehensive legal advice entails analysing the strength of each claim against the legal fees involved in furnishing such a claim.

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