In a recent matter heard in the Family Court of Australia in Sydney, it was ordered by the Court that a property purchased by the husband and his new wife following separation should be included in the pool of property available for division between the husband and his former wife.

No discount was made for the capital contributions made to the purchase of this property by the new wife.

Husband Contributes the Majority of Cash

The husband and his former wife had been together for 19 years and had separated in 2008. The husband had remarried in November 2010 and at around the same time had purchased a property with his new wife. The husband had contributed approximately $1.3 million and his new wife approximately $50,000. The balance of $2.2m was borrowed by the husband and his new wife jointly.

At trial the property was only valued at $3.1 million.

The husband’s position was that only 50% of the net value of the property should be included in the pool of property to be divided between the husband and his former wife.  The remaining 50% (approximately $400,000) was the property of his new wife and should not be included in the pool of property available for distribution.

100% Of Value Included in the Property Pool

The former wife’s position was that any contributions made to the property by the new wife should be disregarded and 100% of the net property value should be included in the pool available for distribution between herself and her former husband.

New Wife’s Contribution Disregarded Because Of Fall In Value

The Court gave consideration to the $50,000 contribution of the new wife to the purchase of the property but balanced this against the overwhelming capital contribution of the husband, the husband’s ongoing payment of the mortgage and that there was a significant drop in value of the property since its purchase which reduced the value of the pool available for division between the husband and his former wife.