In a recent case, the Plaintiff Donna Nolan separated from her husband and brought proceedings in the Supreme Court of Queensland separate to her proceedings in the Family Court.
Donna and Tony Nolan married in May of 1991 and separated in 2009. During their 18 year marriage Donna and Tony lived on the family farm which was owned by Tony’s parents Brian and Majella. Although Brian managed and provided labour on the farm, Tony also spent the entirety of his working life on the family farm.
The proceedings brought by Donna against Tony, Brian, Majella and the company that conducted the family farming enterprise asked the court to recognise Donna’s contribution to the farming enterprise.
Donna was successful in her claim on the ground that she was engaged in a common endeavour with the Defendants which was the development of the family farming enterprise.
In reaching its decision, the Court had regard to previous arrangements between the parties, as well as the current and former wills of Brian and Majella. Donna was awarded 25% of the value of the farming enterprise ($405,000.00) less a deduction of $69,300.00 for living rent free on the property after her separation.
Despite the Defendants having no intention that Donna was engaged in the common endeavour prior to her separation, Donna had made contributions to the common endeavour. As Donna was no longer able to benefit from the farming enterprise as she previously had, the Court found it was unreasonable for the Defendant’s to withhold all future benefit from the farming endeavour from Donna.
Contributions to the common endeavour made by Donna throughout her relationship included her role as homemaker for her family, co-borrower and guarantor for farm machinery and vehicles, the use of her wage to help the parties in difficult financial times, and administrative and physical work relating to the farming.
It is important for families to carefully consider how they operate family enterprises and ensure that family members working in the business are adequately compensated for their employment and direct and indirect contributions.