Loading...

The Treatment of Personal Injury Awards in Family Law Property Settlements

1 December 2009

Property Settlements are difficult to calculate at the best of times, but what happens when one spouse has received a large personal injury payment? There is not only the financial contribution to consider, but also the impact on the family with additional care requirements and stresses.

Getting started:

Under the Family Law Act there is no mathematical formula as to how the division of property should occur. The legislation sets out a number of factors which must be taken into account when determining a property settlement. This has been described by the Court as a four step process, which includes:

  • First: identify and value all of the property owned by the parties, including property held by both parties and also any property owned separately by each party.
  • Second: evaluate the contributions of both parties to the marriage. This includes financial contributions, non-financial contributions and also contributions as a parent or homemaker (as set out in s79 of the Family Law Act).
  • Third: look ahead and take into consideration the factors affecting the future needs of each party. The matters that are to be taken into account (as set out in s75(2) and of the Family Law Act) include:

a. The age and state of health of each of the parties;

b. Whether either party has the care and control of the children of the relationship under the age of 18 years;

c. The standard of living which is reasonable;

d. The income property and financial resources of each of the parties and the physical and mental capacity of each party for appropriate gainful employment;

e. The duration of the marriage and the extent to which it has affected the earning capacity of either party;

f. The need to protect a party who wishes to continue that party’s role as a parent; and

g. Any other fact or circumstance which the Court requires to be taken into account.

  • Fourth: determine whether the proposed division is “just and equitable”.

A right to sue:

The right to sue is a right of a personal nature, and as it cannot be assigned, it therefore does not constitute property for the purposes of section 79 of the Family Law Act. In the matter of Zorbas and Zorbas (1990) FLC 92-160. McCall J held that:

“The right to sue is a chose in action which in turn is generally classified as personal property.  A chose in action, however, may fall into different categories, those which are assignable and those which are not. A right of action to recover damages for negligence resulting in personal injury is not capable of assignment either in common law or equity … The question which then arises in this case is whether an unassignable chose in action is property for the purpose of s79 of the Act…

In my view the weight of authority is that a bare right to sue is a right of a purely personal nature for the purposes of s79 of the Family Law Act”.

How are personal injuries awards taken into account in relation to property settlements under the family law act?

In the case of Aleksovski v Aleksovski [1996] FamCA 111, the Full Court considered the treatment of personal injuries awards received during a marriage, in a property settlement context. The facts were:

  • There were 3 children of the marriage, aged 9, 15 and 11 years, at the date of the trial.
  • The parties earned similar incomes
  • In 1988, the Wife was injured in a motor vehicle accident and received $143,000 in compensation, of which $100,000 was attributable to “pain and suffering”.
  • The Trial Judge took the compensation award into account as a “financial contribution” of the Wife pursuant to s79 of the Family Law Act, and in addition, allowed a 15% adjustment in the Wife’s favour pursuant to s75 (2) of the Family Law Act.
  • The Husband appealed on the basis that the Trial Judge had given full weight to the contributions of the Wife, and either ignored or gave minimal weight to the contributions of the Husband.
  • The net assets of the parties were $240,800.
  • The Trial Judge held that the Wife should retain 77% of the property pool.

On appeal, the Wife’s entitlement was decreased by 15%, to 62%.

Baker and Rowland JJ, held that any award of General damages is taken into account as a contribution by the party who received the payment. Likewise, economic loss is taken to represent income lost during the relationship and is also regarded as a contribution of the party who has suffered the loss. Their Honours stated that:

“In our opinion, in most cases, a damages verdict arising from a personal injury claim, whenever received, is a contribution by the party who suffered the injury. It should not be considered in isolation, for the reason that each and every contribution, which each party makes to the relationship, must be weighed and considered at the time.”

In relation to the treatment of personal injuries and their treatment pursuant to s75(2) of the Family Law Act, their Honours stated that:

 “We would have thought that, as the award vested, with the wife receiving the full amount of compensation to which she is entitled, there would have been no further need to consider the circumstances of the award in the context of s75(2), except in relation to any residual disability which the wife may have impacting on her earning capacity.”

Contact:

Should you have any queries or require assistance in your situation, do not hesitate to contact us at Michael Lynch Family Lawyers on (07) 3221 4300.

2019-04-23T14:45:32+10:00

Client Testimonials

Your team’s communication with me was exceptional, I knew exactly what was happening.
A.A., Eatons Hill
The professionalism and reliability delivered by Amy Honan was fantastic. I had an urgent matter around my property sale and Amy offered to provide assistance over a weekend if I required it – that’s above and beyond!
E.F., Nundah
So pleased to have had a good, sound and knowledgeable firm.
C.W., Brookfield
I really liked the personable service by Michael, the simple plain language he adopts and his patience.
A.O., Kedron
Amy, thanks very much to you and your team. Throughout my dealings with MLFL I have been continually impressed with your level of professionalism and, in particular, your understanding of circumstances and the articulate way you conduct yourself. I was completely satisfied with today’s outcome and without your experience and expertise in family law I doubt that the result would have been achieved.
M.R., West End
I always felt that the service provided by Michael Lynch Family Lawyers was of a high standard. Each time, after appointments I came away feeling secure. Keep doing what you are and maintain the ‘family feel’ that permeates your services.
C.W., Brookfield
Amy’s work was extremely professional but above all she has a manner and wisdom in dealing with people under stress. I will be recommending your firm to anyone that requires assistance.
K.H., Augustine Heights
Michael Lynch Family Lawyers always gave me competent and knowledgeable advice. I was consistently kept up to date. The meetings and phone calls were kept business-like, yet caring and thoughtful of my emotional state at the time. Thank you.
J.S., Holland Park
Your newsletters are great, I appreciate them.
K.B., Carina
I liked my solicitor keeping things as simple as possible.
S.M., Clayfield
My lawyer acted with professionalism in all her dealings with me and with the lawyer on the other side. I was always kept in the loop. I liked her approach. Thanks.
D.S., Coorparoo
Michael Lynch Family Lawyers have really listened to me. I felt confident my case was handled well. The law has changed recently, and I did not feel that a previous law practice I spoke to was suitably up-to-date.
P.B., Carindale
Michael is a good listener. My documentation maintained the high moral ground.
S.S., Hamilton
Thank you for providing me with a professional yet empathetic approach to gain the best outcome for me. My solicitor was excellent in explaining the processes and in representing me in Court. You have great customer service!
T.V., Everton Park
I appreciate you being upfront with fee estimates. You also have a fantastic website and the seminars REALLY helped to get me focussed.
T.C., Tarragindi
You guys provide extraordinary service.
A.O., North Brisbane
I was impressed by my solicitor’s attention to detail and her concern for me, and that the process was explained to me and that I understood it at all times.
B.W., Chapel Hill
The staff at Michael Lynch Family Lawyers were great. Everyone was fantastic, professional, understanding, caring and always communicated with me. I knew I was in good hands.
A.A., Eatons Hill
I appreciate my lawyer’s professional approach and her being on top of my situation.
N.S., Mt Gravatt
Amy, thank you. You have been diligent, accurate and pro-active for the entire duration of my matter. I appreciate it.
R.P., Cleveland
Michael knew what he was talking about.
R.M., Warwick
I really appreciated the happiness of your secretarial staff.
G.C., Clayfield
Thank you, you placed my needs first, you were aware of the need to reach a final result and not get caught up in the personal issues of the other party.
S.L., Moranbah
I like your friendly service and the ability to speak to my solicitor directly.
R.G., Wishart
Your team is professional, warm, friendly and real.
N.R., Crows Nest
I was also always confident that I was getting the very best advice.
T.S., Flinders
May I take this opportunity to express my gratitude to you and your staff for the excellent professional services I received. In a word, priceless.
D.H., Hendra
Michael Lynch Family Lawyers are easy to deal with and their systems are good.
D.T., Ferny Grove
I was very impressed with the first initial interview. Everything was well explained and the advice was honest about what I should expect.
C.M., Morningside
Your staff is knowledgeable, professional and very calm.
A.C., Helensvale
My family lawyer was very helpful in assisting me to combat a very ugly situation without stooping to the low levels that the other solicitor attempted to take us.
M.J., Manly
If I need a family lawyer in the future I’ll be heading to Michael Lynch Family Lawyers again.
C.W., Brookfield
I’m very glad Michael is my lawyer and not the other side’s solicitor.
S.S., Hamilton
Thank you, you kept me sane in a difficult situation and gave me the encouragement and the confidence to keep going. You made me feel extremely comfortable.
A.M., Chambers Flat
At Michael Lynch Family Lawyers I got professional and no nonsense advice, costs were within quoted amounts and my matter was resolved quickly – well done!
L.R., Ascot
Many thanks for your assistance – life is now great – I’m moving on.
J.K., Mansfield
My solicitor provided a personalised service, prompt and quick responses and cost information prior to my commitment.
G.C., Southport
I like that my lawyer treated me like a friend and kept jargon to a minimum. She was easy to contact and kept me informed.
L.R., Samford
Thank you for your ongoing conciliatory approach in this matter and as always I appreciate your level headed advice. I certainly feel that I ended up with the right Solicitor.
S.C., Nundah
A personalised and professional service. Information has been clear and provided timely to assist my decision-making.
S.S., Hamilton
Lovely to deal with and provides a balanced view in what are very difficult circumstances.
A.C., Morningside
Thank you for the outstanding legal advice you have provided and professionalism in which you conduct yourself. I am truly thankful that it was you who represented me.
M.T., Stafford
Michael is very personable and very good at covering the material and explaining the strategy.
J.O., Hawthorne
Michael was the most knowledgeable of all lawyers I spoke to when looking for a lawyer. He showed professionalism.
R.R., Brighton
Thank you for being very personable, professional and always providing me with the most appropriate advice in my times of difficulty. The other party’s lawyers were extremely aggressive, while Michael Lynch Family Lawyers remained calm and professional.
S.D., Parkinson
Amy, thank you for all that you have done during this matter. You impressed me with your professionalism from our initial meeting, and you have proven beyond doubt, to have had the skills and knowledge required. You are a credit to the company, and I would highly recommend you to anyone in a similar situation.
R.P., Cleveland
Thank you for the great newsletter. Your article on “Coping with Christmas” is brilliant – clear, caring and helpful. Thanks again!
C.T., Bribie Island

I have appreciated the way that you and the staff at your firm have handled my situation. I would especially like to mention the professional and caring way my lawyer conducted my case, I am deeply grateful and extremely happy with the results. I will be referring others to your service.

J.H., Wellington Point

Thank you for helping me through this difficult time. You have been caring, compassionate and efficient. Some of my divorcing friends have not been so fortunate. In my mind you are the best family lawyer in Brisbane. If anyone I know needs a good family lawyer, I will tell them to speak to you. Thanks again.

B.T., Clayfield
I was guided through a really difficult time with expertise of Michael Lynch Family Lawyers. I am more than happy with the outcome of mediation.
J.H., Windaroo
Michael, thank you again for your presence here yesterday. We really appreciated the clarity and accessibility of your presentation. It is a rare thing to find somebody who not only has expertise, but also has a skill in communicating it.
J.S., Brisbane

I just wanted to get in touch to say thanks for helping me get through my custody and settlement. Thanks again to you and your staff. You have had a significant positive impact in my kids’ lives!

B.S., Brisbane

Thank you Debra and Helen for all the work you did for me, you both made the process manageable and brought sense to the chaos.

R.B., Toowong

I would like to thank your company Miss Brown for the support and compassion shown while dealing with my matter.

C.M., Brisbane