My partner and I are separating - do they have a claim to my personal injury settlement?

Publications > My partner and I are separating - do they have a claim to my personal injury settlement?

 

January 2012

Are you about to receive a personal injury payout?  Does it have to be disclosed to your former partner or spouse and are they entitled to a share of your payout now that you have separated?

 

Getting started
Under the Family Law Act there are a number of factors which must be taken into account when determining a property settlement, often described as a stepped process as follows:

 

• First: identify and value all of the property owned by the parties, whether owned separately by each party or jointly.
• Second: evaluate the contributions of both parties to the marriage or relationship. This includes financial contributions, non-financial contributions and also contributions as a parent or homemaker.
• Third: look ahead and take into consideration the factors affecting the future needs of each party, such as:

   

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

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

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

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

 

Do you have to disclose your personal injury payout?
Each person has a duty to make timely, full and frank disclosure of their financial position.  In summary, this means disclosing all sources of earnings, interest, income, property (vested or contingent interests) and other financial resources. 

This applies whether the property or financial resource is owned by or comes to the person directly to goes to some other person on your behalf (for example a new de facto partner) or held in a trust or corporation.
Disclosure is an ongoing duty.  This means that until a property settlement is finalised by a binding document known as a consent order or financial agreement, you have a duty to disclose your financial position.

 

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, the Family Court considered the treatment of a personal injuries award which was received by one party during the marriage. The facts were:

 

• Before separation, 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 net assets of the parties were $240,800.
• The Trial Judge took the compensation award into account as a "financial contribution" of the Wife 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 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%.
The Family Court 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."

Contact
For assistance and confidential advice about your family law situation, please contact Tuskeen Jacobs at t.jacobs@rostroncarlyle.com or 07 3009 8444

 

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Most importantly, Rostron Carlyle shows a depth of understanding of and empathy towards the emotional, personal and financial complexities and pressures of marriage, separation and divorce.

 

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