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Special Contributions in Family Law: Hoffman vs Hoffman

The concept of special contributions in family law was tested in the landmark case of Hoffman vs Hoffman 2014.  This important case has significantly contributed to the Family Court’s current view, particularly in longer relationships, that there should be no greater value placed on financial contributions compared to non-financial or homemaker contributions when determining property distribution in divorce.

A Summary of the Hoffman v Hoffman Case

Hoffman and Hoffman 2014 was an appeal to the Full Court of the Family Court of Australia after a Federal Magistrate had determined an approximately $10 million property division between a husband and wife as 50% to each partner.

The husband appealed this decision on the basis that the Federal Magistrate should apply the principle of special contributions.  He argued that the split should be 70% to him and 30% to his ex-wife.  The husband argued that the failure to consider his skill and entrepreneurial flair as a special contribution to their financial assets was an error of law.  He maintained that these skills contributed to the couple’s property acquisition and property development and were therefore instrumental in the parties having a property value of $10 million at the time of their separation.

This appeal was dismissed by the Full Court of the Family Court, finding that there is no binding rule of law about special contributions.  The Full Court highlighted the statement by Fogarty J in In the Marriage of Waters and Jurek (1995)  that “homemaker contributions are to be given as much weight as those of the primary breadwinner”.

The Full Court deemed that there is no principle or guideline that renders the direct contribution of income or capital more important, or special, when compared against indirect contributions and, in particular, contributions to the home or the welfare of the family.

It was concluded that it is the court’s task is to make findings as to the nature, form, characteristics and duration of each and all of the contributions made by each of the parties. The duration of the marriage was highlighted as a crucial factor influencing the evidence relevant to determining each party’s contributions.

Family Law Cases that refuted Special Contributions

In another important family law case, Fields v Smith 2015, the Full Court of the Family Court concurred with Hoffman v Hoffman 2014, concluding that one type of contribution should not be treated as less important or less valuable than the other.

In other words, contributions made by the homemaker are not to be treated as less important or valuable than the financial contributions made by the breadwinner.

Summary

There is an extraordinarily wide discretion inherent in s 79 (4) of the Family Law Act 1975.  Each case is considered by the Court individually, with the intention to do what is just and equitable in the unique situations of each case.

Family law cases such as Hoffmann v Hoffmann 2014 and Field v Smith 2015 have contributed to the currently held family law principle regarding property division following divorce or a relationship breakdown, particularly in a lengthy partnership.  That is, the concept of special contributions have no greater value than the value contributed by parenting and homemaking.

Why Choose BSM Lawyers?

The process of property settlement in a relationship breakdown can be complex, stressful and have significant financial consequences. Brander Smith McKnight’s family lawyers have the legal expertise, compassion, empathy and professionalism to guide you through this process and advocate for your interests so you get a fair and equitable outcome.

Call us to arrange a free 20 minute no obligation consultation that includes case evaluation and cost estimate.

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