Family Court rejects argument by husband…

Family Court rejects argument by husband that his success in the stock market is a ‘special skill’ and overturns decision where he was awarded 63.55% of the property pool.

On 18 December 2013 the Family Court decision of Kane and Kane [2013] FacCAFC 205 was handed down.

The parties in this matter had been married for some 28 years, had four children together and when they reached Trial had net assets just over 4.2 million.

The parties had superannuation of just over 3.4 million which was held in a superannuation fund established by the parties. During the course of the marriage the husband invested $539,500 into shares in a particular company. The wife did not agree to or approve the husband’s investment. At the time of Trial this particular investment was worth $1,850,000 and increase of some $1,310,500.

At Trial the husband argued that he should be awarded a significantly higher portion of the property pool, as it was his ‘special skill’, that is his decision to invest in the particular shares which had increased the property pool. The Trial Judge accepted the husband’s argument and made Orders which effectively gave the husband 63.55% of the property pool, with the wife retaining 36.45%. The decision had the effect of the husband retaining more than 1 million dollars more than the wife.

The wife appealed the decision and the Family Court found that the Trial Judge had placed unacceptable weight on the husband’s ‘special skill’ with respect to the investment of shares, and ordered the matter be remitted for re-hearing.

In his reasons for Judgement, the Family Court Deputy Chief Justice, Justice John Faulks found that the Trial Judge’s reliance on the ‘special skills’ doctrine, and making an Order on this basis was mistaken. Justice Faulks went further and said that the Family Law Act “does not require and in my opinion the authorities do not mandate, any such doctrine and if judgments to the Full Court of this Court might be thought to have espoused such a principle in my opinion, they should no longer be binding.

This decision and in particular Justice Faulks findings that a ‘special skills’ doctrine should no longer apply, has a significant impact on property matters. It appears it will now be more difficult for parties to argue that they made a significantly higher contribution as a result of their ‘special skill’ and thus are entitled to a higher portion of the property pool.

Whilst we continue to await the re-hearing of the case, if the Court finds that the husband investment in shares was not a ‘special skill’ then it could ultimately result in the property of the parties being distributed on a more equal basis and him being awarded half a million dollars less.

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