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Offers are often exchanged between parties in terms of percentages of the total asset pool less liabilities and including any superannuation held by the parties. The making and acceptance or non-acceptance of Offers can have cost implications for the parties. It is important that parties are well informed of what a reasonable Offer of settlement would be in their case and what they would be entitled to if their matter were to proceed to Court for determination.

What constitutes a reasonable Offer will differ for each matter depending on the value of assets, liabilities and superannuation owned by the parties, direct and indirect financial and non-financial contributions made by the parties and the future needs of the parties. If a matter is to proceed to Court for determination, Sections 79(4) and 90SM of the Family Law Act, dependent on whether parties have been married or in a defacto relationship, require the Court to take these matters into account. If the matter proceeds to Court determination, there is also a requirement that the Court find that it is just and equitable that any Orders be made at all. The Full Court of the Family Court emphasised in the matter of Hoffman that the contributions made by the parties must be evaluated in the context of the facts particular to each case.

Financial contributions to be considered by the Court include any initial contribution, gifts from family if intended to be a gift to one person and not a joint gift, any income during the relationship and any inheritance received either during the relationship or post the parties’ separation. Non-financial contributions include indirect contributions such as helping to grow a business and carrying out renovations to property. The role of homemaker and parent is seen by the Court as being a significant contribution particularly in long marriages and de-facto relationships.

In the case of Fields and Smith, the parties were unable to come to an agreement between themselves in relation to a family law property settlement and the Court was required to determine the matter. The parties had been married for 29 years and there were three children to the marriage with an asset pool of over $30 million. The parties owned shares in their successful construction business and a home valued at about $10 million. At the beginning of the relationship, neither party owned any significant assets. Throughout the relationship, the husband’s predominant contribution was to the growth of the business and the wife’s predominant contribution was as that of a homemaker and parent. When the matter was initially heard in 2012, the trial judge decided that Orders should be made for the asset pool to be distributed between the parties with the husband to receive 60% and the wife 40%.

Both the husband and wife appealed to the Full Court of the Family Court and the matter was heard again in 2015. The husband was seeking a 70/30 split in his favour and the wife was seeking a 50/50 split given the long length of the marriage. The wife’s legal representatives argued that even though the children were now adults, where the parties had agreed and committed to a division of roles it was inherently unjust and unfair to devalue the contribution of the party who fulfilled the homemaker and parent role throughout the marriage.

The Full Court made Orders that the asset pool be divided equally and the husband was ordered to pay the wife’s costs involved in the Appeal. The Full Court commented that the wife’s contribution as homemaker and parent and the husband’s contribution to income and capital generation were both equal and that one contribution should not be less important or valuable than the other. The 2010 case of Bulleen and Bulleen was relied upon to confirm that whilst parenting as an occupation might stop or become less burdensome after the children become adults, the ongoing role of both parents continues to be an ongoing contribution.

The Kells Family Law team has the expertise in this area of law to properly advise clients in relation to what is a reasonable distribution of the asset pool in property settlements after the conclusion of both married and de-facto relationships. It is essential that each party obtains legal advice in relation to what their entitlements would be if the matter were to proceed to Court for determination. Such advice is essential prior to making an Offer to the other party or choosing to accept or reject an Offer of settlement made by the other party. There may be cost implications for parties to a Family Law property settlement where a reasonable Offer is made by one party and not accepted by the other.