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Property – court erred in considering husband’s defective disclosure when assessing contributions…

…including capitalised value of pension in asset pool, and considering pension under s75(2) is ‘double dipping’

In Mayhew & Fairweather [2022] FedCFamC1A 53 (12 April 2022), the Full Court (Austin, Tree and Gill JJ) heard a husband’s appeal from orders of Wilson J for a 60:40 division in the wife’s favour, after a relationship of between 34 and 36 years.

The husband’s appeal grounds included the treatment of his alleged defective disclosure and double counting of his pension, where its capitalised value was included in the asset pool, but also considered as part of the wife’s s75(2) (Family Law Act 1975 (Cth) (the Act)) adjustment.

As to the husband’s defective disclosure, the Full Court said (from [13]):

“… [I]n order to be considered under s79(4)(a) or (b) of the Act, the defective disclosure must relate to a direct or indirect, financial or non-financial, contribution ‘to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them’…

[14] The usual way in which defective disclosure is taken into account is either by adding a sum to the pool, reflective of an estimate of the value of undisclosed property … or under s75(2)(o) of the Act. … [W]e are satisfied that by factoring it in to the analysis of contributions, the primary judge erred … ”

As to the treatment of the husband’s pension, the Full Court continued (from [23]):

“ … [I]t seems inconceivable that the quantum of the income stream was not expressly taken into account in arriving at its notional capital value, and its assurance likely was reflected in the capitalisation rate applied to the income stream, and hence it was already valued by reference to that feature. … [E]ven if that were not so … how his Honour could have been satisfied that some aspect or quality of the pension had not already been taken into account in arriving at its notional value, is completely unclear. To thus use both the income stream and its assurance as the justification … for an adjustment of 2.5% … is to ‘double dip’ and thus to err.”

The appeal was allowed and the case remitted for rehearing.

Craig Nicol and Keleigh Robinson are co-editors of The Family Law Book. Both are accredited specialists in family law (Queensland and Victoria, respectively). The Family Law Book is a one-volume loose-leaf and online family law service (thefamilylawbook.com.au).

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