Does a short relationship make any difference in a property settlement decision?

Generally speaking, Family Law considers a relationship as ‘short’ if lasts less than five years.

As with every property matter, however, the distribution of assets, superannuation and liabilities depends on the individual circumstances of the case and the level of financial and non-financial contribution to the asset pool by each party.

Streeterlaw’s Simone Green, an Accredited Specialist in Family Law, said: “In circumstances where one party has brought in significantly more assets, it is more likely in a short marriage or relationship that the contributor to those assets will retain either all or most of the benefit of those assets. This is particularly true in circumstances where the parties have otherwise kept their finances separate and there are no children born of the relationship.”

However, it’s important to note that the Family Law Act does confer the power on the Court to alter existing ownership in property. Just because one person owns property prior to the relationship, there is no guarantee that they will be able to retain it after separation. The Court will always consider the circumstances of the couple and decide whether it is just and equitable to divide the assets.

The longer the relationship, the less likely that full weight will be given to the initial contributions by a party. This is because contributions might be made in other ways to the general asset pool by the other party, even non-financial contributions such as parenting contributions of children of the parties, or non-paid labour in respect to renovations.

Recent case study

In the case of Rose & Mitchell [2016] FCCA 771 (14 April 2016) the parties lived together for just over three years. The asset pool was modest and mostly consisted of the equity in the marital home the husband owned prior to the marriage. The judge found that the parties had both made contributions during the marriage and the wife had “the major burden of looking after their child”. The judge made an assessment of the parties’ contribution with 90 per cent coming from the husband and 10 per cent the wife, and then awarded the wife a further 15 per cent for her future needs, laying particular emphasis upon the wife’s future child-rearing responsibilities. So the final result in the overall settlement of the asset pool saw 75 per cent allocated to the husband and 25 per cent to the wife.

Ms Green commented, “It is unlikely that there would have been any further adjustment (of 15 per cent) for future needs if the couple did not have children.”

When assessing the asset pool, the Court may either take a global approach; that is, it collectively combines all assets and liabilities into one pool; or they can take a separate pool approach for items such as superannuation and/or initial contributions.

Ms Green said a separate pool approach is often adopted in cases involving short relationships. “Where there are significant assets brought into the relationship by one or both parties to which the other party has made little or no contribution, a separate pool approach usually adopted,” she said. “In these situations, the Court would then look to assessing the contribution each party made to the separate pools and may make, for instance, separate percentage splits if it deems it just and equitable to do so.”

For further information or advice, please contact the Family Law experts at Streeterlaw on 81970105 or email advice@streeterlaw.com.au.