September 7, 2020

JABOUR & JABOUR [2019] FamCAFC 78 – Indirect Contributions in a “very long marriage”

By Kate Wild, Lawyer

In the matter of Jabour[1], the Full Court of the Family Court considered, on appeal, a decision of the Federal Circuit Court concerning the distribution of property between spouses after a 27 year relationship.

At the commencement of the relationship, the wife had no assets of significance. The husband had equity of $70,000 in the former matrimonial home and a half interest in 3 blocks of land (Blocks A, B and C), which he had purchased from his father when he was 12 years old for $26,000.

About 10 years into their relationship, the parties sold the half Blocks A and B. The net proceeds, after payment of sale costs and some family expenses, were applied to purchase the second half of Block C. The costs to purchase the second half of Block C was $105,000.

6 years later, Block C was sold for $10.35 million – the extraordinary increase in value attributable to a rezoning of the land.  At the time of trial, Block C represented 90% of the total asset pool.

The parties agreed that their contributions during the relationship were equal. The husband was the primary breadwinner and the wife ceased employment after the birth of first child, to act as primary caregiver for the parties’ children. The parties established, operated and worked together in 3 businesses during the marriage.

First instance decision

The Primary Judge observed that Block C had sat idle during the relationship and the costs of maintaining the property were not significant. Neither party made a significant contribution to the upkeep or to the eventual increase in the value of Block C.

However, the Court held that the wife’s contribution was outweighed by that of the husband, whose initial interest in the original Blocks A and B gave rise to the opportunity to purchase the remaining half share in Block C.

At first instance the Court made orders distributing the assets in the proportions of 66% to the Husband and 34% to the wife.

Issues on Appeal

On appeal to the Full Court, orders were made for a distribution of 53% of the assets to the husband and 47% to the wife. It was held that the Primary Judge had placed insufficient weight on the wife’s contributions. The Full Court pointed to the fact that the parties had a long marriage and the wife had made significant contributions as a homemaker and primary carer of 3 children. The Full Court held that “the strength of a contribution made at the inception of a marriage is eroded, not by the passage of time but by the off-setting contribution of the other spouse.”

[1] [2019] FamCAFC 78

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