Do Family Law Courts View Financial Contributions and Homemakers as Equal in Property Disputes?

The way the family law court perceives financial contributions and the role of homemakers in property disputes has sparked intense debate.

The big question in these disputes is whether family law courts treat financial contributions and homemakers' contributions equally when dividing property. It involves evaluating and valuing non-financial contributions like homemaking, child-rearing and household management, and comparing them to the financial contributions made by one spouse during the marriage or de facto relationship.

Here, we'll explore how the family law court approaches the consideration of these contributions and whether they're seen as equal in property disputes.

When earnings rise significantly in a long marriage, can one party claim a “special contribution”?

Special contributions can be awarded when one spouse argues that they should receive a larger percentage of the financial settlement because their financial contribution to the marriage exceeded the typical norm.

Let’s look at two such cases.

1. Newman [2013] FamCA 37 (30 January 2013).

Back in 1982, the husband started with an annual income of $35,000 when they first moved in together as a couple. The following year, it went down to $27,500. But over time, the husband's wage kept rising, reaching a point where, if you average it out over 28 years, the annual income exceeded $400,000. During their marriage, he gained valuable experience as a financial executive, while his wife dedicated herself to being a homemaker, taking care of the kids and managing the household. As a result, he had the opportunity to focus on developing his skills and increasing their income.

In the judgement, it was stated that, “…in the context of this long marriage with children, the role of homemaker and parent ‘should be recognised not in a token way but in a substantial way’” (Mallet v Mallet [1984] HCA 21; (1984) 156 CLR 605; Ferraro & Ferraro [1992] FamCA 64; (1993) FLC 92-335).

This clearly recognised the importance of the homemaker’s role within the marriage, which allowed the husband to enhance his skills and consequently achieve a higher annual income. Thanks to the efficient management of the home and family by his wife, the husband was relieved of additional pressures.

2. Hoffman [2014] FamCAFC 92 (27 May 2014)

In this particular case, the husband appealed a court decision when almost $10 million was divided equally after 36 years of living together. He argued that his settlement should be higher due to his “[s]pecial [s]kills and [e]ntrepreneurial flair” which allowed for substantial real estate and share market investment.

The Full Court stated that there is no strict legal rule concerning special contributions and that it needs discretionary judgement when considering applying it.

The Court concluded by referring to O’Ryan J in D & D [2005] FamCA 1462 at [271] in that, “… 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 Court had the challenging task of making individualised findings regarding each spouse's contribution to the marriage. However, this task was made significantly challenging due to the complete differences in the contributions. The task was even likened to comparing apples and carrots.

Concerns were raised about possible gender discrimination when roles were established within the marriage, whether through gradual changes or mutual agreement. The Court recognised that directly comparing the welfare of the family and the management of the home with the financial contributions of the other spouse would not be suitable.

The appeal was dismissed.

The question of whether family law views financial contributions and the contributions of homemakers as equal in property disputes remains a topic of interest. While there is no definitive answer, it is clear that family law acknowledges the significance of both financial and non-financial contributions within a marriage or de facto relationship.