Post Separation Contributions Not Always Quarantined

After separation, it is common for parties to continue to be financially enmeshed pending a property settlement. A recent case of the Full Court of the Family Court highlighted the issues that can arise as a result, particularly if the situation continues for a long period of time. In Marsh & Marsh [2014] FamCAFC 24, the parties were separated for 10 years before property proceedings were initiated. In the post separation period the parties continued to mingle their financial affairs, for example, the husband regularly gave the wife funds and paid a number of the wife's household expenses. The asset pool also grew by some 500% between the date of separation and the date of trial.

At trial, the trial judge segregated the contributions made by the parties before separation and after separation. He found that although prior to separation the parties' contributions were equal, since separation the husband had made greater contributions than the wife. The husband's contributions post separation were of a direct financial nature, whereas the wife's were indirect, including in the capacity as homemaker and carer of two children. The trial judge therefore awarded the husband a 20% adjustment from the asset pool on account of post separation contributions.

The Full Court held that this was the wrong approach, particularly where the parties have intermingled their finances during this period. Contributions made after separation should not automatically be approached differently to pre-separation contributions. The decision was accordingly quashed and the matter sent back for redetermination.

This case is a timely lesson that what occurs post separation may not be able to be quarantined from what took place during the relationship.