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Jabour & Jabour [2019] FamCAFC 78

In the recent case of Jabour & Jabour [2019] FamCAFC 78, the Full Court of the Family Court of Australia set aside orders made by the trial judge who, in assessing contributions awarded the husband 66% of the net non-superannuation property and the wife 34% of that property.  

The parties married in 1991 and finally separated in May 2015. The husband had owned a property before meeting the wife. When the husband was 12 years old, he acquired a half interest in three blocks of land from his father. After the marriage, two of the blocks had been divided between the husband and the other co-owner and the net proceeds from this sale were used for family purposes and also to buy-out the co-owner’s interest in the third block of 44 acres. In 2010, the property was rezoned from non-urban land into an urban growth zone. This permitted the land to be used for residential purposes and led to a significant increase in value. The land had been re-zoned and as a result had increased substantially in value to in excess of $10,000,000 at the time of the court hearing.

The primary judge determined that aside from the contribution of the property prior to the relationship, the parties’ contributions throughout the marriage were equal. The judge noted that the husband had made a significant contribution which needed to be appropriately recognises and thereby assessed the husband’s contributions at 66% and the wife’s at 34% with no division to the superannuation of the parties.

The Full Court accepted the wife’s argument on appeal that the primary judge in assessing contributions was in error in seeking a nexus between the contributions by the parties to the property and its present value.

The Full Court stated that the approach of the primary judge had the effect of overlooking:

  • The parties decision not to use all of the funds from sale of the other block for family purpose but to use half of those proceeds in order for the husband to gain sole ownership of the block of land that was rezoned;
  • The decision not to sell the rezoned land at an early stage was also a significant contribution, allowing the parties to enjoy the benefit of the increase in the land value.

The case confirmed that in relation to a sudden increase in the value of an asset unrelated to the efforts of the parties, such as a re-zoning by a council or a lottery win, that the increase should be treated as a joint contribution by both parties regardless of which party may have brought the item during the relationship. The Court made an analogy to lottery tickets and noted that “where both parties are in receipt of income and where their marriage is predicated upon the basis of each contributing their income towards the joint partnership constituted by their marriage, the purchase of the ticket would be regarded as a purchase form joint funds in the same was as any other purchase within that context and would be treated accordingly.” Therefore, in relation to the sudden increase in the value of the asset unrelated to the efforts of the parties, such a rezoning by the council is a contribution that should be contributed to both parties.

Despite the significance of this initial contribution, the Full Court assessed the contributions to favour the husband by 53% and the wife 47%. It was held that the trial judge weighed the myriad of contributions made by the parties against the contribution made by the husband in bringing in the property rather than treating the property as one of the myriad of the contributions made.

By Nicholes Family Lawyers

 

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