When calculating the distribution for property settlement, the court considers the contribution made by each party to the property pool.
- Initial contributions made by each party at the commencement of the relationship; and
- Post-separation contributions which is the period between separation and the finalisation of the matter in court (i.e. when settlement is reached).
Initial contributions are contributions made by each party before or at the commencement of the relationship. For example, a party may have a property in their sole name at the time of entering into the relationship. If the court finds that the equity from this property was used to assist in purchasing the matrimonial home, which throughout the relationship and at the time of separation property, comprises of a large contribution to the property pool, the court may order that the party who made the contribution receive a great adjustment in their favour.
The length of the relationship may be a relevant factor for the courts to consider when weighing the initial contributions by each party. It is arguable that the shorter the relationship, more weight is given by the court to the initial contribution and vice versa.
- A “short” relationship is less than five (5) years
- A “middle” relationship is between five to ten (5-10) years; and
- A “long” relationship is over ten (10) years
Therefore, it is arguable that the longer the relationship, less weight is given by the courts to the initial contributions.
Post-separation is the period after separation up until when the property settlement is finalised. This period may depend on the agreement or disagreement between the parties and may be as quick as a few days or weeks, or drag for months or years. The contributions of parties made post separation are assessed at the date of the trial, not at the date of separation.
Generally, post separation contributions include:
- Financial contributions; and
- Non-financial contributions
The court may find that it is appropriate where one party accumulates money or assets from their own post separation efforts, without the other party’s direct or indirect contribution to those money or asset, that this contribution be made in their favour. This would not be the case if the husband earned a large sum post separation and the wife continued to care for the children, as the wife had contributed to the husband’s earnings by her virtue of her caring for the children.
Each case is different and will be determined on its merits. It is important to consider not only the legal costs involved and time expended in litigation but also the cost of not settling early which could potentially leave a party, or both, open to continuous contributions to the property pool until the property settlement is finalised.