Since the inception of the Family Law Act in 1975 and the establishment of the Family Court, the difficulties the Court has had to face have been diverse. New cases pop up every day changing the landscape of family law.
Financial agreements have continued to raise new legal issues, questions such as ‘who is a parent?’ have been discussed, and the true meaning of separation continues to develop.
In this two-part blog, we provide a quick snapshot of some of the most famous family law cases over the years.
Most Influential Family Law Financial Cases
Kowaliw & Kowaliw (1981) FLC 91-092 – A Case about “Waste”
The issue of taking “waste, destruction or the dissipation of assets” into account in a property settlement matter was considered in the case of Kowaliw & Kowaliw.
The Judge in this matter stated that as a general principle, financial losses incurred by parties or either of them in the course of a marriage, whether such losses are as a result from one of the parties or both of them together, should be shared by them (although not necessarily equally) except in the following circumstances:
(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
This case has remained a benchmark for determining ‘waste’ in matrimonial disputes.
Farmer & Bramley (2000) FLC 93-060 – A Case about Windfalls, Lottery Wins and Contributions
Until 1995, if the value of a property increased during a marriage due to an outside circumstance such as rezoning or a lottery win, rather than due to the activities of a party, these were referred to as “windfalls” and were usually treated differently to contributions made through the efforts of a party or on behalf of a party.
Since 1995, windfalls, such as lottery wins, have been treated as a contribution by the person who purchased the ticket.
However, the timing of or the receipt of a windfall can be very relevant to the overall outcome.
In the case of Farmer & Bramley the parties who had lived together for 12 years and had one child from the relationship, had no assets of any value when they separated.
During the early part of their relationship, the husband suffered from drug related problems and the wife supported him financially and emotionally through his addiction. The wife also financially supported him while he was studying and assisted him with his literacy skills, and he eventually was able to obtain full-time gainful employment.
After separation, the child lived primarily with the wife and had irregular contact with the husband.
Approximately 18 months after the parties separated (but before they had had a property settlement), the husband won approximately $5million in the lotto. Shortly thereafter, the wife made an application for a property settlement.
The husband then arranged his financial affairs to reduce his child support liability to nil, gambled over $100,000 and tried to claim that it was not him that won the lotto, but his mum.
The Judge in this case held that the post-separation lottery win was available for distribution between the parties due to the wife’s contributions (financial and non-financial) during the relationship, the disparity in the parties’ post-separation financial circumstances and the wife’s ongoing care of the child without any financial and practical support from the Husband. The wife was awarded approximately $750,000.
Thorne and Kennedy  HCA 49 – A Case about Duress, Undue Influence and Unconscionable Conduct and Financial Agreements
The wife was aged 36 years old, and was of Eastern European descent. The husband was 67 years old and an Australian property developer. The parties met online.
The Husband flew to the wife’s home country and had proposed to her. The husband had made it clear he required the wife to sign a financial agreement should they get married.
The wedding was arranged and the wife’s family and friends flew out to Australia. Four days before the wedding, the husband presented the wife with an agreement stating that she would have to sign the paper or the wedding was off.
The High Court held that the wife was powerless to make any decision other than to sign the contract, due to an inequality of bargaining power on part of the husband.
The High Court set aside the financial agreement due to the vitiating factors such as duress, undue influence and unconscionable conduct.
Stanford v Stanford  HCA 52 – A Case that questions the Process for Determining Property Settlement Matters
While the Family Law Act 1975 does not set out a clear process for determining a property settlement application, several matters must be considered, but how and in what order they are considered is not set out in the Act.
Nevertheless, pre-Stanford it was widely accepted by family law practitioners that a 4-step approach in a property settlement application was to:
- Identify and value the net property of the parties;
- Consider and assess the contributions of the parties (financially, non-financially, as homemaker and as a parent);
- Consider the parties current and future financial circumstances (such as their income earning capacity, disparity and the effect of the relationship, if any, on a parties’ income earning capacity); and
- Consider whether the order proposed (or percentage adjustment arrived at) was ‘just and equitable’ in all of the circumstances.
In a rare examination of the Family Law Act 1975, the High Court highlighted in the matter of Stanford that on the correct interpretation of the Act, the court must first consider whether it is just and equitable to make an order before giving consideration to the other factors set out above.
Since Stanford there is uncertainty as to the process to determine a property settlement. The High Court in Stanford did not refer to or endorse the four-step process. Some trial judges have expressed doubt as to whether the four-step process is valid.
In the Marriage of Weir (1992) 16 Fam LR 154 – A Case about the importance of Disclosure
This was an appeal by the wife against orders in proceedings for a property settlement, brought against the husband which were instituted in 1990, on the basis of non-disclosure.
The Full Court allowed the appeal on the basis of the fact that a part to property proceedings has a duty to make full disclosure of his or her financial affairs, and where there is clear evidence of non-disclosure, the Court should not be unduly cautious about making findings in favour of the innocent party.
Descas & Descas  FMCAFam 69 – A Case about an Alleged ‘Haunted’ House and Value
While not necessarily among the most influential family law cases, the facts in the case of Descas & Descas are worthy of mention.
This was an application for property orders arising out of a marriage of 19 years’ duration. The wife had tried to argue that the matrimonial property was haunted, which in turn, had a detrimental effect on the home’s value The wife deposed to the fact the haunting was confined to one room only, the room in which she sleeps. She said she currently did not feel the presence of a ghost.
The Magistrate found the wife’s asserting of the haunting unbelievable and was satisfied the wife had fabricated the claim for an ulterior purpose, as an attempt to influence the valuer to return a low valuation of the former matrimonial home, so that she may retain it.