Dividing property after separating from a de facto partner can be confusing and raise complex questions about who is entitled to what. A recent decision by the Federal Circuit and Family Court of Australia highlights just how complicated these matters can be and shows how the court applies the Family Law Act 1975 (Cth) when making property settlement decisions.
In this article, Partner Reece Ramsden and Law Clerk Isabella O’Connor provide insight into the legal complexities involved and discuss the recent decision by the court.
Case Summary: Marlin & Henson [2025] FedCFamC1A 71
The case of Marlin & Henson [2025] FedCFamC1A 71 is significant for family law clients as it highlights the importance of the court’s discretion in determining property settlements under the Family Law Act 1975 (Cth). The judgment emphasises that the court must first determine whether it is just and equitable to make an adjustment to the parties’ property interests, considering factors such as the breakdown of the relationship, the contributions of each party, and the future needs of the parties. The case also underscores the necessity of providing clear evidence to support claims, particularly regarding financial contributions, liabilities, and potential tax implications.
The case of Marlin & Henson [2025] FedCFamC1A 71 involved a de facto property adjustment dispute under the Family Law Act 1975 (Cth). The primary judge’s decision to divide the property interests 60/40 in favour of the appellant, the de facto husband, was challenged on appeal. The appellant contended that no adjustment should have been made or, alternatively, that the adjustment was incorrect.
The relationship between the parties began in 2001, with cohabitation commencing in 2002 or 2003. The couple separated in 2006, leading to de facto proceedings under Queensland’s Property Law Act 1974. A property settlement was finalised in 2008, with the appellant paying the respondent $350,000 and retaining significant business and real property interests. The parties resumed their relationship in 2009, which lasted until their final separation in 2019. During this second phase, the couple had two additional children, adding to the complexities of their financial and parenting arrangements.
The appellant argued that the prior property settlement in 2008 and the parties’ separate financial arrangements during their second relationship negated the need for further adjustment. However, the primary judge determined that it was just and equitable to adjust the property interests, considering the respondent’s significant contributions as a homemaker and parent during the nearly ten-year cohabitation. The appellant’s initial financial contributions were acknowledged but could not be fully quantified due to insufficient evidence regarding the equity in his properties at the recommencement of the relationship.
A key issue in the case was the treatment of potential capital gains tax (CGT) liabilities. The appellant sought to deduct approximately $3.3 million from the asset pool, arguing that the properties were acquired for investment purposes and would incur CGT upon sale. The primary judge rejected this claim, finding the appellant’s assertions about his intentions to liquidate the properties unconvincing. The judge emphasised that CGT liabilities should only be considered when a sale is inevitable or imminent, which was not established in this case. The decision aligned with principles from Rosati, which stress the need to assess the certainty and immediacy of CGT liabilities.
The appellant also challenged the assessment of contributions, arguing that the respondent’s care of the two younger children post-separation was given undue weight compared to his care of the eldest child. The primary judge found no error in this assessment, noting that the respondent’s contributions enabled the appellant to focus on his business interests. The appellant’s claim that the contributions-based assessment of 35% in the respondent’s favour was plainly wrong was dismissed, as was his challenge to the additional 5% adjustment under section 90SF of the Act.
The appeal was ultimately dismissed, with the court affirming the primary judge’s findings. The case underscores the importance of credible evidence, and the nuanced approach required in property adjustment matters, particularly in de facto relationships with complex financial and parenting dynamics.
The Federal Circuit and Family Court of Australia approach to Property Settlement
The decision in Marlin & Henson [2025] FedCFamC1A 71 serves as an important reminder for de facto couples of the complexity involved in dividing property after separation.
The case illustrates how the Federal Circuit and Family Court of Australia approaches property settlements under the Family Law Act 1975 (Cth), including:
- The need to first determine whether any adjustment is just and equitable.
- How the court assesses financial and non-financial contributions over the course of a relationship.
- The importance of clear and credible evidence about property values, contributions, and tax consequences such as capital gains tax.
- The nuanced considerations in long relationships where parties separate and later reconcile.
Capital Gains Tax Liabilities Must Be Real and Imminent
A critical aspect of this case is the confirmation of a well-established principle: capital gains tax (CGT) is not treated as a liability in the asset pool unless there is clear evidence that a sale of the relevant property is inevitable or imminent. The court rejected arguments to discount the property pool by millions in anticipated CGT because the appellant could not prove he intended to sell the properties straight away. This reinforces the importance of presenting reliable evidence of any planned sale if you wish to argue that future tax should reduce the divisible assets.
How Ramsden Family Law Can Assist You with De Facto Property Settlements
At Ramsden Family Law, we understand that property settlements following the breakdown of a de facto relationship can be legally complex and emotionally difficult. Our team of experienced family lawyers can provide clear, practical advice specific to your situation. We help you understand your entitlements, gather the necessary evidence, and work towards achieving a fair and just property settlement.
Whether you are at the beginning of a separation or in the middle of a dispute, our property settlement lawyers are here to support you every step of the way.
Please do not hesitate to contact Ramsden Family Law today to book an initial consultation.
The content of this article is intended to provide general guidance to the subject matter and must not be relied on as legal advice. Specific advice should be sought about your circumstances.
