The risks of delaying property settlement
A husband and wife delayed their property settlement until six years after separation. The Judge hearing the matter was critical of both parties for the delay in finalising matters and noted that the lapse of time since separation had greatly increased the complexity of resolving an otherwise straight-forward matter.
It was contended that whilst the wife had received the advantage of remaining in the home, she had accrued substantial debts relating to her living expenditure. The husband on the other hand had made use of assets in his sole control and dissipated approximately $150,000.00 on expenses which included a luxury holiday for him and his new partner, school fees and legal expenses.
The husband had also “gifted” the party’s eldest son the sum of $200,000.00 to put towards the purchase of a unit in the son’s name. The husband had lived with the son since separation and contended that it was unreasonable of the court to include their son’s unit in the property pool available for distribution. The court noted that neither party had called evidence from the eldest child.
The Judge criticised the parties saying that he considered that the failure to call evidence regarding the asset in the son’s name was an omission of a basic and fundamental step and therefore any imprecision in the calculation of the final property division would be a consequence of the parties. The court did not take into account the current value of the unit but did take into account the $200,000.00 “gift” as representing the party’s interest in the unit.
The court also took into account $100,000.00 of the $150,000.00 expended as it related to the holiday and legal fees and noted that it largely offset any percentage adjustment the husband would have otherwise been reasonably entitled to under the “future needs” percentage component. The wife was also allowed to include the debt she had accrued post separation.
The court determined that the assets be split in the husband’s favour 55%/45%, which was mainly due to the husband having made a more significant “initial contribution”.
It is important to note that, if so much time had not elapsed the husband may have received a greater percentage adjustment.