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Family Law: Contributions and Insurance Payouts

Case Watch

Falcken & Weule [2019] FamCAFC 140 (16 August 2019)
Did the primary judge err in concluding that the property interests be divided 53 per cent to 47 per cent in favour of the wife?
Case overview: This case involves the Court’s reasoning in the division of property when the pool of assets includes a disability insurance payment. The Court decided to not alter the finding of the primary judge in the division of 53% to 47% in favour of the wife.

The parties commenced cohabitation in 1994 and were married in 1997. Twin children were born in 2003. The husband worked in the engineering industry and the wife in legal services.
In 2006, the wife suffered a stroke that left her with a permanent disability and unable to work again. As a result, she received a disability insurance payment of a lump sum of $235,152.92.
The husband’s appeal concentrated on two main areas. The first was the determination of the parties’ various contributions and thus the overall assessment in the light of a debilitating stroke which the wife suffered in 2006. The second was a challenge to the weight that was given to five aspects of the husband’s contributions that were made after the wife suffered her stroke in February 2006.

The husband contended that the insurance payment was contributed to jointly, and therefore the primary judge erred in not taking this into consideration when dividing the property pool. However, it was found that though the husband and the wife had made the decision to obtain insurance jointly, it was the wife who made the payments; Miller & Miller [2009] FamCAFC 121.
The Court also looked to the way in which the wife’s disability payment has been used and found that the money had been used to support the family pre-separation and not solely for the wife’s own needs. The impact that the stroke had on the wife’s ability to ever work again was also taken into consideration and was an important factor in the Court’s assessment of what would be just and equitable in the circumstances.

Contributions made in the course of a marriage can cause contention, particularly in this case, as the husband became the primary carer for the two children. However, in Williams & Williams [2007] FamCA 313 at [26], contributions are not assessed in isolation, but as part of the myriad of contributions made by the parties throughout the relationship.

In making its decision, the Court highlighted the fact that in order to make a reversal, the Court must conclude that the primary judge was plainly wrong, his decision being no proper exercise of his judicial discretion. In this case, the Court was unable to make such a finding, and dismissed the appeal.

One of the key take-aways in this case, is the fact that disability insurance payouts may not necessarily be joint assets in a separation. Despite the mutual intent and joint decision to take out insurance, the asset is likely to be assessed as the contribution of the individual who has needed the policy to be claimed. This case also leaves it open for the court to deliberate in the future of what would happen if the person paying for the insurance is not the person who the policy has been taken out for.

If you are going through a separation and would like advice on property and the division of your assets, contact Kent Law Group on 4323 1900 for guidance on how to navigate your matter.