Wealthy businessmen are now more likely to walk away with a fewer asset in case of Divorce and property settlement. In a recent case known as Kane & Kane, the Family Court has heralded a significant change in how superannuation issues can be settled. “Special Contribution” doctrine is no longer allowed to be used as an argument in the settlement and partition of a separating couple.
The Divorce Case was initially heard by a trial judge whereby it awarded the husband, who is a retired businessman, around 2/3 of the $3.4m superannuation fund of the couple. The wife was only given 1/3 of the said fund on the ground that the trial judge gave weight to the special contribution argument of the husband. The counsel for the husband argued that the husband used his “special skills” in investing the assets of the couple to increase their funds.
However, upon appeal to the Family Court, the deputy chief justice enunciated that the trial judge is mistaken when he relied on the argument of the counsel of the husband. Furthermore, the deputy chief justice articulated that the Family Law Act does not require the application of such doctrine in determining the division of the property and superannuation issues of the parties and that such doctrine should no longer be considered as binding. The case has been referred back for a rehearing.
Superannuation is considered to be as a property under the Family Law Act 1975, however; it is a different type of property considering that it is being held in trust. There are several laws which cover the allocation of superannuation in case the couples, whether married or in a de facto relationship, are going to separate and divide their asset due to the breakdown of their relationship. Some of the pertinent law that covers superannuation about the family dispute is the Family Law Act 1975, Family Law (Superannuation) Regulations 2001 and Superannuation Industry (Supervision) Regulations 1994.
The superannuation splitting laws provide several options for the parties on how they will settle their superannuation issues after their separation. They may either opt to agree and make a formal written agreement to split their superannuation. The couples may also seek a consent order to split the superannuation. And finally, in case they fail to reach an amicable settlement, they may seek the assistance of the court to split their superannuation. It is important to note that it is still possible to reach an amicable settlement at any stage of the process.