Lover's $100,000 kiss off: How does this happen

Family Law: 22 March 2019

A recent front page described a husband paying his former mistress $100,000, following changes to the Family Law Act ('the Act').  We do not know all the details because the case was settled out of Court, but according to reports, this affair of more than 20 years included several overseas and interstate trips, dinner functions, a monthly allowance in four figures and the husband's promise he would look after his mistress. 

There was no ring, but it was no fling either.  The man ended the affair in 2009, it was stated, and remains married. 

Would you consider the mistress a de facto partner? 

De facto partners who have been together for at least 2 years, or had a child together (or have met one of two other less common criteria) can now make claims against each other under the Act.  The big change for mistresses has been Section 4AA(5)(b) of the Act which now provides:

A de facto relationship can exist even if one of the persons is legally married to someone else or in another de facto relationship.

So it does not just refer to someone who has separated from their spouse and now lives with a new partner, but to multiple contemporaneous relationships.  If we think of a de facto relationship as being the same as a marriage, this new section appears to legitimise bigamy.

If a de facto relationship exists, the Court assesses the overall asset pool of both parties.  It then looks at contributions to that pool, both financial and non-financial, and attempts to fix a value to each partner's contributions.  The Court can then adjust these figures based on each partner's future needs and finally reviews whether the overall result is just and equitable.

In a typical 'mistress' case the mistress' contributions to the relationship on a financial level, and perhaps even on a domestic level, would not be large.  The mistress referred to her providing the man 'a lot of moral and emotional support'. 

Courts traditionally have looked at how a supportive wife can allow a husband's business career to flourish, but this becomes more complicated with two partners for one man.  If, as reported, the mistress accompanied the husband on trips, there may have been a public aspect to the relationship which assisted the husband's finances.  If a child had been born and the mistress had been primarily responsible for raising the child, this would also be a significant contribution.

The mistress' claim most likely increased on the basis of her future needs.  Although the report referred to her being employed and owning a home, she may have been earning less than the husband, given his monthly payments. 

A mistress might also seek maintenance payments on a periodic or lump sum basis if she is unable to support herself adequately and her lover is reasonably able to do so.

Although $100,000 is a lot of money, the husband might have spent this much each year on his mistress.  A year's payments could be a reasonable deal to settle any future claim, including a possible ongoing maintenance claim, following such a long and close relationship.  If $100,000 were a large proportion of his finances, he may have sought formal approval from his wife to the settlement.  This would be done so that his wife did not try to overturn the settlement later, on the basis it was made to defeat her interests.

Will these new laws terrify philanderers everywhere or encourage promiscuity?  Will poor husbands raising their rich mistresses' children make claims against their lovers?  Logically the laws would cause rich spouses to avoid affairs and poorer singles to pursue them.  In the writer's experience, whatever the law might say, most people do nothing to reduce the risk of future financial claims from personal relationships. 

If a person commences a long term affair, with a mistress or their male equivalent, they could enter a form of "pre affair" financial agreement, regarding distribution of their assets and maintenance.  This could be made binding under the Act upon legal advice for both parties.  Failing such formalities, we can look forward to the Courts providing greater clarify on this new legislation.