For many years, the Gold Coast has been the divorce capital of Australia. Queensland has the highest divorce rate nationally and the Gold Coast has a disproportionately high number of cases in the Family Court and the Federal Circuit Court in Brisbane.
Not surprisingly it was a Gold Coast case, which in April 2015 profoundly changed the way in which the Courts viewed and valued each party’s contributions to the acquisition and maintaniance of property and assets built up during the parties relationship. In other words, now the Court determines what is a just and equitable property settlement for separating couples (married or de facto). The case reported as Smith -v- Fields (a pseudonym given in order to protect their privacy). At the time of their marriage in 1979, the couple’s property and assets were relatively modest. They had three children and moved to the Gold Coast in 1990 to expand the family construction business here. The wife was a joint director and shareholder in the family construction business. Her primary role however was as mother and homemaker. The husband’s primary role was as income earner. The husband worked very hard in the business. They separated in 2008 after 29 years of marriage.
The net value of their joint property and assets at trial in April 2012 was somewhere between $32m – $40m.
At the time of trial, the husband was 54 years and had re-partnered. The wife was 51 and still single. Their three children were adults.In very simple terms the assets comprised a home worth $10m; a share in the family construction company worth between $17m – $25m with other assets and superannuation totalling approximately $3m – $4m.
At trial in 2012 the husband, Mr Smith, successfully argued that his contributions to the family’s wealth were greater than those of the wife, Mrs Fields. He argued that his contributions were ‘special’ and they were of greater value than the wife’s contributions. Although he argued that the property and assets should be split 70/30 in his favour, he was still successful in persuading the Trial Judge that ultimately they should be 60/40 in his favour, i.e. a difference of 20 per cent. The wife, Mrs Fields, had argued that their contributions in their different roles – he as income earner and she as homemaker and care provider for the family (as well as being a co-director and equal shareholder in the family company), were of equal value and accordingly their property and assets should be divided equally as well.
Mr Smith’s argument that the couple’s property and assets (particularly in what are known as ‘big money’ cases where the net worth is more than say $5m) was due to his ‘special’ skill or ‘entrepreneurial instinct’ or ‘business acumen’ is one that husbands have used and argued successfully for many years.
For many years we family lawyers have been waiting for a clear and strong Family Court decision outlining once and for all whether that notion and argument would continue or be finally buried and properly consigned to a paternalistic history. It came with Smith v Fields.
Mrs Fields appealed the Trial Judge’s decision arguing that he got it wrong. Once more the wife, Mrs Fields, argued that the couple’s wealth was the result of their joint and equal contributions and their property therefore should be divided equally. Not content with the 60/40 division in his favour, Mr Smith cross-appealed and once again sought a further adjustment of 70/30 in his favour.
The Appeal Court disagreed and determined that the husband’s and wife’s contributions over a lengthy period were substantial, significant and equal. The Appeal Court confirmed that Mrs Fields’ contributions to the welfare of the family were no less important or valuable than Mr Smith’s contributions to the family business. The Court found that “the nature and form of the parties’ marital partnership was that of a practical union of lives and property and accordingly the contributions made by each, should be treated as equal”.
This Gold Coast case and this decision have finally given what we family lawyers have been seeking for years – some clarity as to whether the notion of ‘special’ skills and ‘entrepreneurial flair’ that certain parties have for years claimed as being superior to their spouse’s contribution to the marriage and therefore entitling them to receive the larger share of the property and assets, is still valid or not.
There are too many factors to list which have a bearing in determining the outcome and ‘fairness’ of a property settlement. In seeking to achieve a fair outcome however there is no place for discrimination between the income earning role of one spouse and the homemaker role of the other.
This Gold Coast case of Smith -v- Fields has had a profound impact on how family lawyers advise clients and the Family Court resolve property settlements. As the ‘boom and bust’ capital and the divorce capital of Australia, it is ironic that it took a Gold Coast case to create the change.