Post Separation Inheritance To Be Shared By Divorced Couple

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Post Separation Inheritance To Be Shared By Divorced Couple

Mr Calvin and Ms McTier were in a relationship that lasted approximately eight years.

In January 2014, about 4 years after separation, the husband received an inheritance from his father’s estate worth $430,686.

The Court had to decide whether the inheritance received by the husband was to be included in the property pool for separation

Facts of the case

The couple divorced on 2 August 2011.

During the relationship, the parties had one child together.

Since the separation, the child spent equal time with the parties.

At the beginning of the relationship, the wife had nominal assets.

In contrast, the husband made superior initial contributions which consisted of two properties, a motor vehicle, shares, superannuation entitlements and personal effects.

During the relationship, the parties sold Mr Calvin’s two properties and purchased two further properties from the proceeds.

Otherwise, both parties contributed to the best of their respective abilities.

The inheritance comprised 32% of the $1.3 million property pool.

Judge’s decision

The parties were arguing about the treatment of Mr Calvin’s inheritance.

Ms McTier sought to include the inheritance in the overall property pool available for separation.

In contrast, Mr Calvin contended that the inheritance ought to be excluded from the pool.

The trial judge, Federal Magistrate Calverley, delivered his judgment on 17 November 2016.

He concluded that Mr Calvin’s post-separation inheritance did form part of the property pool available for division between the parties.

The parties’ contributions were assessed overall as 75:25 in favour of the husband and a 10% adjustment was to be made for Ms McTier because she was found to be of a lower earning capacity than her husband.

Concluding, the trial judge divided the property pool, including the inheritance, as 65:35 in favour of the husband.

The appeal

Mr Calvin appealed the decision of the Magistrates Court of Western Australia on the basis that the inheritance should not be included in the asset pool.

The Full Court commenced consideration of Mr Calvin’s appeal by noting that post-separation assets can form part of the asset pool.

The Court then turned to consider whether the trial judge had erred in exercising his discretion to include the inheritance in the property interests.

The Full Court referred to the High Court case of Stanford & Stanford, that indicates that all property is to be brought into account without reference to when it was acquired.

The husband’s divorce lawyers sought to draw support from the case of Bonnici & Bonnici.

In particular, the divorce lawyers relied upon a sentence which stated: ‘The other party cannot be regarded as contributing significantly to an inheritance received very late in the relationship and certainly not after it has terminated, except in very unusual circumstances’.

However, the Full Court disagreed with Mr Calvin’s proposition that Bonnici should be a guideline as to how the Court should approach inheritances received after separation.

The Appeal was dismissed and Mr Calvin was ordered to pay Ms McTier’s costs.

Implications of the case

The case of Calvin & McTier showcases that the Court has discretion as to whether or not post-separation property, in particular inheritances, ought to be included in the asset pool.

This meant that Ms McTier received a portion of the husband’s inheritance, even though he received the inheritance almost four years after separation.

It is important that property matters are formally and legally finalised as soon as possible to prevent any ex-partners from receiving any share of property gained post-separation.

 

Calvin & McTier [2017] FamCAFC 125 (12 July 2017)

Stanford v Stanford [2012] HCA 52.

Bonnici & Bonnici (1992) FLC 92-272.

Hayder Shkara
Hayder Shkara
hayder@justicefamilylawyers.com.au

Principal of Justice Family Lawyers, a Sydney Law Firm specialising in Family Law Cases.

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