Which case won?

casea
The case for the husband
  • Money I inherited several years after I divorced my ex-wife should not be included in the pool of assets, since it had nothing to do with our marriage.
  • The inheritance from my father is totally unconnected to our marriage and has nothing to do with any circumstances arising from the matrimonial relationship.
  • The law as set out in the Family Law Act does not require my inheritance to be included among the marital assets.
  • The trial magistrate was wrong to include the money I inherited from my late father, as that money was his gift to me specifically as his son, so the court should overturn the trial magistrate’s decision.
caseb
The case for the wife
  • It does not matter when my ex-husband received the inheritance, since he was once my husband and the law looks at all contributions to the marriage up until the time the court makes its final orders.
  • He inherited the money in 2014 and the court did not make its final decision until 2016.
  • My husband’s inheritance is connected to our marriage because I was once a part of that family by marriage.
  • I was welcomed into the family, which means that matters like inheritances from parents-in-law must be included in a final settlement. It is only fair. We were married eight years and have a child together.

So, which case won?

Cast your judgment below to find out
Case A Case B

Case B won. You were right!

How people voted
a71%
b29%

Expert commentary on the court's decision

“The salient lesson from this case is that if you are due to receive a large inheritance and have separated from your spouse, it may be wise to seek urgent legal advice to resolve property interests prior to receiving the inheritance.”
Family Law Court of Australia finds in favour of the wife

In the case Calvin & McTier [2017] FamCAFC 125 the Full Court of the Family Court of Australia dismissed the appeal of the husband, Mr Calvin, and found in favour of the wife, Ms McTier.  

The trial magistrate in the lower court had reasoned that the inheritance received four years after separation was property available for division under section 79(1) of the Family Law Act (Cth) 1975 (“the Act”).  

Section 79(1) of the Act gives the court power to alter property interests of people from a marriage.  

The magistrate also determined that in order to properly access the matters he is required to access under section 79(4) of the Act, he must include the inheritance in his calculations.  

Section 79(4) sets out what needs to be taken into consideration when making a decision to alter property interests. This includes financial contributions made directly or indirectly by or on behalf of a party to the marriage.  

Husband’s appeal against trial magistrate’s decision

The appellant husband appealed on three grounds – that the inheritance should not have been available for division between the parties, that section 79(4) of the Family Law Act does not require the inheritance to be included and that the trial magistrate erred in requiring the husband to comply with the orders within 28 days. 

After reviewing the trial magistrate’s decision, the appeal court stated that he did not make a mistake in determining that the inheritance, acquired some time after separation, formed part of the asset pool.  

Chief Justice Bryant stated that contributions may be included in the pool of assets long after separation. Multiple cases were referenced to support this premise. 

The court noted that when this was put to senior counsel for the husband, their argument changed from saying that the inheritance was not available to be included, to saying that the inheritance had no causal connection to the marriage. 

The question was therefore whether or not the trial magistrate used his discretion correctly.

Arguments that trial magistrate did not use his discretion correctly

Senior counsel for the husband provided three lines of argument in an attempt to persuade the appeal court that the trial magistrate had not used his discretion correctly. 

The first was that there is no High Court case stating that all property owned by the parties is available under section 79.  

The second appeal point was based on case law. The gist of it was that, in order to make a decision under section 79 of the Act, a court must first determine if it is just and equitable to do so, given the type of property in question.  

That is, any discretion used by the court must be applied in accordance with well-founded legal principles. To determine whether or not the division is just and equitable, the considerations in the law are set out in section 79 of the Act. 

Importantly, the judiciary must exercise its power with due recognition of the need to preserve and protect the institution of marriage. This is set out in section 43(1) of the Act. It follows that it is a necessity of the court to accommodate these implied principles of a marriage.  

The third appeal point made by the husband was that property acquired after separation is up for grabs, but only if there is some nexus between the property and the marriage. 

No need for nexus between property and marriage

In determining the appeal, the Full Court of the Family Court of Australia rejected all three arguments put forward by the husband. 

The court stated in relation to the first argument that the absence of authority on a particular issue does not establish that issue or the opposite of it. 

In relation to the third argument, the court noted that there was no case law supporting the proposition that there had to be a clear connection between the marriage and the type of property that was being divided. 

Divorcing and anticipating a large inheritance? - Focus on timing

The salient lesson from this case is that if you are due to receive a large inheritance and have separated from your spouse, it may be wise to seek urgent legal advice to resolve property interests prior to receiving the inheritance. 

The key consideration is timing. That is, up until the time when a court makes property orders and thereby seals the divorce property settlement, any property coming to you is likely to be up for grabs by your ex. 

The inverse also applies. Anything your ex inherits before property orders are made may be available for division between the two of you as property of the marriage. 

NOTICE: This article is accurate as at the time of publication and does not constitute legal advice. Please see our legal notices page for more information. Information related to coronavirus can be outdated very quickly.
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