Earlier in the year I wrote a
post on the case of Kane & Kane,
a big money property division case that made the headlines when the adjustment
that had been made in favour of the husband for "special
contributions" by the trial judge was overturned by the Appeal Court : http://lawyerfamily.blogspot.com.au/2014/01/special-contributions.html.
Now another "special contribution" case has wound its way through the
appeals process: Hoffman & Hoffman 2014 FamCAFC 92.
On 11 January 2013 Federal
Magistrate Brewster made property division orders between Mr and Mrs Hoffman in
relation to their 36 year marriage. His Honour divided the property and
superannuation of about $10,000,000 between the parties equally.
Mr Hoffman appealed those Orders.
Mr Hoffman, who represented
himself at the Appeal, argued that the Federal Magistrate erred in law by
failing to have regard to his "special contributions" to the marriage
or alternatively that the Federal Magistrate failed to place sufficient weight
on his "special contributions".
In the first instance decision
Federal Magistrate Brewster found that there was "nothing unusual about
the parties contributions during their relationship. They commenced their
relationship a long time ago. Each brought property into the relationship.… The
difference in the values of these properties is no longer relevant. During a
long marriage they each earned income.… The parties raised four children."
His Honour then went on to say
"where the court is dealing with a situation where there is a long
marriage with children and where the parties have made contributions in
different spheres it is usually inappropriate to give greater weight to one
party's contribution than those of the other…. There have been exceptions to
this approach however. These have been in what have been called "big
money" cases. In cases in the past where the parties have acquired a very
substantial fortune and this has been due to the particular skills of the
husband (in all the cases of which I'm aware it has been the husband) then
adjustment has sometimes been made to reflect what is often termed the
"special contribution" he has made."
Mr Hoffman had argued that the
couple's asset should be split 70:30 in his favour in recognition of his
"skill" and "entrepreneurial flair"- in particular in relation
to selecting, maintaining and trading shares.
His Honour rejected the husband's assertion that he
should be given an adjustment based upon his "special contributions".
Indeed the Judge went on to say that "… I do not accept the
principal (if it be a principle) of special contributions". His Honour
reviewed the decision of the High Court in Mallet v Mallet [1984] and said that
the decision "need not and should not be followed" as the decision is
"infected by gender bias" and "the zeitgeist in 1984 when Mallet was decided was vastly different
to the zeitgeist today".
The Appeal
Court (constituted by Deputy Chief Justice John
Faulks, Justice Peter Murphy and Justice Garry Watts) said "to the extent
that His Honour's judgement is to the effect that there is no binding rule of
law relating to "special contributions" His Honour is, in our view,
correct." The Appeal Court
went on to say "we do not consider that there is any "legitimate
guideline" of "special contributions" or any such guideline
pertaining to particular contributions containing "special" factors
or features…"
Indeed the Appeal
Court said "we consider that the true
position is, with respect, put correctly and succinctly by Justice O'Ryan in D
& D [2005]: "… The notion of special contribution has all been a
terrible mistake… What I have to do is identify and assess the contributions
made by each of the parties without any presumption of entitlement."
The Appeal
Court dismissed the husband's appeal and ordered
that he pay the costs of the wife for the appeal.
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