INSURANCE PAYMENT FOR CANCER IS CONTRIBUTION BY WIFE

A recent decision of the Family Court of Australia upheld a Federal Magistrates finding that payment that was received by the wife from an insurer because she had cancer was a contribution that was made by the wife. At the hearing before the Federal Magistrate the court found that the wife had an insurance policy, and after being diagnosed with cancer she received a lump sum payment of $190,000, $120,000 of which was paid to the parties’ home mortgage.  In his judgment the Federal Magistrate said: “I have had regard to the significant initial contributions of the husband and the contributions since separation.  I have had regard to the contribution by the wife in terms of her insurance when she was unwell.” 

The Federal Magistrate split the property 57% to the Wife and 43% to the Husband.  The Husband appealed.  One of the grounds of appeal for the Full Court to determine was whether the proceeds of the insurance policy should be treated as a contribution by the Wife or made by the parties jointly.  In dismissing this part of the appeal the Full Court said:

“There was no evidence of when the policy was taken out, the circumstances in which it was taken out, who paid the premiums, how those premiums were paid, or what financial or other arrangements were in relation to the policy. 

In these circumstances, and also that the husband, unlike the wife, made no submissions to the trial judge about how his Honour should treat these proceeds, it does not behove the husband to now complain that his Honour erred in how his Honour did treat those proceeds.”

Yates & Yates [2012] FamCACF 138