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  • 03Nov

    Calvin & McTier [2017]

    Calvin & McTier [2017] is a recent case in Western Australia that illustrates the relationship between inheritance and family law, and the importance of entering into property orders as soon as separation occurs. Mr Calvin and Ms McTier had an 8 year marriage which ended in 2011. There was a child of the relationship, who was born in 2005. Mr Calvin and Ms McTier clearly has an amicable relationship, as the child was cared for on a week on and week off basis between Mr Calvin and Ms McTier.

    An amicable post-separation relationship is desirable, encouraged and commended but it no doubt contributed to the fact that the parties did not see the urgency to finalise their financial relationship by entering into property orders.

    In January 2014, 3 years after separation, Mr Calvin received an inheritance from his father to the sum of $430,686.00. Ms McTier instituted proceedings at the Magistrates Court of Western Australia on 21 January 2015. At the time of hearing, the total matrimonial asset pool was $1,340,319.00. The inheritance Mr Calvin received constituted 32 percent of the entire property pool.

    The Magistrate decided that the inheritance that Mr Calvin received should be included into the matrimonial asset pool. The only saving grace for Mr Calvin was that the inheritance meant that he made a significant financial contribution. However, that contribution and the parties’ future needs can only be assessed if his inheritance is included into a single pool with the other assets that existed prior to separation.

    Ultimately, the contributions were assessed 75 percent in the Husband’s favour. There was an adjustment of 10 percent to the Wife on the account of future needs. Mr Calvin received 65% of the matrimonial asset pool.

    Mr Calvin appealed to the Full Court of the Family Court of Australia. Essentially, Mr Calvin argued that because the inheritance was received after the marriage, there is no connection between the inheritance and the marriage. Therefore, the inheritance Mr Calvin received should be excluded. Mr Calvin also argued that the Magistrate made an error by stating that his contributions and the parties future needs can only be assessed if the inheritance is included into one pool with the other assets.

    Essentially, the Full Court decided that:

    1. It is not a requirement that inheritance received post-separation should be treated differently from other property. It may be but it is to the discretion of the Judge.
    2. It was open to the Magistrate to create two property pools, where one pool contains the property which existed pre-separation and another pool which contains the inheritance.
    3. If the Magistrate were to do the above, then the financial outcome for the parties would have been different.

    The Lessons here are as follows:
    1. Property Orders serve to finalise your financial relationship with your ex-spouse. This financial relationship continues in the absence of property orders.
    2. If you have separated from your partner, it is prudent to enter into property orders as soon as you can.
    3. A substantive windfall such as a lottery win or an inheritance that you receive after separation will be included in the matrimonial asset pool.
    4. If you received a windfall after separation, it is open to you argue that the windfall you received should be treated differently but it will never be excluded from the matrimonial asset pool. 

    If you require more information on the above article contact Nevine Youssef on nyoussef@marsdens.net.au or by phoning (02) 4626 5077.

    The contents of this publication are for reference purposes only. This publication does not constitute legal advice and should not be relied upon as legal advice. Specific legal advice should always be sought separately before taking any action based on this publication.

Marsdens Offices