By Craig Nicol and Keleigh Robinson
Property – No error in 25 per cent s 75(2) adjustment to reflect husband’s premature distributions of $1,358,423 – Court did not take CGT and realisation costs into account as premature distributions created risk of sale
In Shamon [2025] FedCFamC1A 150 (8 September 2025) the Full Court (McGuire, Riethmuller & Curran JJ) dismissed with costs an appeal against property adjustment orders of Christie J.
The husband was an accountant who operated his own practice. The wife was a homemaker, the three children living primarily with her.
At trial, the wife sought notional add backs, as the husband had engaged in a number of dealings after separation that included withdrawals from the parties’ mortgage account, an “unprecedented” declaration of dividends and a payment to his sister ([29]).
The primary judge’s findings included that there be no add backs (save for legal fees), the net pool was $1,740,517, contributions were 55:45 in favour of the wife and there be a s 75(2) adjustment in favour of the wife of 25 per cent, so that the overall division was 80:20 in her favour.
The husband appealed. He argued that the ordered payment to the wife inevitably meant a sale of property, which also meant the Court erred by not taking capital gains tax and realisation costs into account ([35]).
After citing Rosati [1998] FamCA 38, the Full Court said (from [41]):
“Within the context of the consideration in Rosati… the … judge did not order the sale of an asset … [and] was not satisfied that a sale of an asset was inevitable … ( … )
[47] The … judge concluded that the appellant divested himself of large sums of money… ( … )
[48] … [T]o find that the appellant has deliberately divested himself of assets or funds that would have been available to him to settle…, which then within the … judge’s discretion were not ’added back’ to the pool but dealt with pursuant to s 75(2)(o), thereby giving a diminished ’property pool’ and then to encumber the first respondent with the ramifications of the appellant’s unilateral behaviour would be perverse to the fundamental notions of justice and equity.”
Procedure – Court erred by holding affidavit and transcript were subject to Harman implied undertaking
In Nicolosi & Faron (No 3) [2025] FedCFamC1A 146 (20 August 2025) the Full Court (Aldridge, Harper & Schonell JJ) dismissed an application for leave to appeal against interim orders that dismissed each party’s application for leave to use family law documents in State court litigation.
Family law litigation had concluded by a decision of the Family Court of Western Australia and a later appeal, which was dismissed. The parties remained litigants in State court proceedings, as each party sought family violence orders against the other. The appellant had also filed defamation proceedings ([3], [4]).
The appellant sought orders for permission to use the entire Court file in the State litigation. The respondent sought orders for permission to use reasons for decision, her affidavit, transcripts and single expert witness reports. At first instance, the Court granted the wife’s application to use the reasons for decision but dismissed all applications otherwise.
On appeal, the Full Court said (from [53]):
“The primary judge determined the respondent’s application in relation to [the affidavit of the applicant and the transcripts] on the basis that they were impressed with ’the implied undertaking’ as that term is used by their Honours in Hearne v Street [2008] HCA 36… which, according to his Honour, necessitated consideration as to whether special circumstances existed permitting their use…
[54] … The exercise of discretion … only applies if the subject documents are caught by the implied undertaking. If they are not, then the exercise of discretion has no role to play, and any party is free to use them subject to the provisions of Pt XIVB of the Family Law Act 1975 (Cth) (‘the Act’) and Pt 11A of the Family Court Act 1997 (WA) (“the WA Act”). ( … )
[66] … The affidavit and transcripts are not caught by ‘the implied undertaking’ and there is no order restraining their use. Consequently, there is no restriction, providing they fall within the exceptions under Pt XIVB of the Act and Pt 11A of the WA Act…”
Property – Discretionary trusts established by husband’s father to facilitate the intergenerational management of the family business not property of the parties
In Caldwell [2025] FedCFamC1F 506 (30 July 2025), Carew J dismissed a wife’s application for a declaration that the assets of four discretionary trusts were property of the parties for the purpose of s 79 of the Act. The dispute was heard as a discrete hearing in the context of matrimonial property litigation arising from the parties’ 30-year marriage. There were 3 adult children, two of whom were “Mr G” and “Mr H”.
The Caldwell family business was established in the early 1900s by the husband’s great grandfather. It was then carried on by the husband’s grandfather and then by his father, “Mr K”. The husband worked in the business and received remuneration for that work, including loans that had been forgiven ([11, 13]). Property held within the four discretionary trusts was acquired by Mr K and his predecessors ([26]).
Upon Mr K’s death, the husband, Mr G and Mr H were made appointors of the trusts and inherited shares in the trusts’ corporate trustees as joint tenants.
The wife sought final orders that the husband remove Mr G and Mr H as appointors of the trusts, appoint another company as trustee and cause a cash distribution of capital to the husband equal to 35 per cent of the net value of the assets owned by the trusts ([31]).
The Court said (from [233]):
“ … [W]hile the husband has very wide powers, and … may be said to control the trusts, his primary duties are to act in good faith and in accordance with the purposes of the trusts and to give real and genuine consideration to the interests of all potential beneficiaries… If the husband exercised his powers for the purpose of benefiting the wife whether directly or indirectly … he would be in breach of the proper purpose rule… To do so would diminish the trusts’ assets and while no potential beneficiary has a legal or equitable interest in the trusts’ assets, they each have a right to due consideration as an object of benefaction and a right to due administration of the trusts…”
Children – Primary judge not entitled to reject mother’s allegations of physical violence based on generalised adverse credit finding against her
In Sayed & Rehmann [2025] FedCFamC1A 145 (21 August 2025) McClelland DCJ, sitting in the appellate jurisdiction of the Federal Circuit and Family Court of Australia, allowed a mother’s appeal against parenting orders of Judge Myers.
The mother and father separated after an 8-year relationship. They had two children. The mother’s allegations included that the father had substance abuse issues and that she had been the victim of family violence perpetrated by the father. She said she had found a plastic bag with white powder that she believed contained an illicit substance belonging to the father.
The father denied the mother’s allegations as to drugs and relied upon a hair follicle test that was inconsistent with his having substance abuse issues. It was agreed that the father had been found guilty of common assault of the mother, that there had been two family violence orders made to protect the mother and children and that the father had also pleaded guilty to two counts of fraud for forging the mother’s signature to obtain money from a bank.
At first instance, the Court found the mother’s allegations as to the father’s drug use lacked credibility, but that the fraud committed by the father was “an example of financially controlling behaviour and fell within the definition of family violence set out in s 4AB of the Family Law Act 1975 (Cth)” ([25]).
The Court also rejected the mother’s evidence of family violence, other than those that were the subject of prosecution.
The Court said (from [41]):
“… [W]here the … relevant statutory criteria to be applied … specifically mandated consideration of ‘any history of family violence’ impacting the children or the mother …, it was necessary for the … judge to not only consider, but to also make findings in respect to, the mother’s allegations of significant family violence and to explain his reasons… ( … )
[45] … [T]he … judge made specific findings that the father engaged in family violence to the extent that he was convicted of an act of common assault arising from an incident in early-2021 and that he perpetrated financial fraud against the mother. It is … not clear whether the … judge made findings in respect of the other significant allegations made by the mother… ( … )
[57] … [T]he fact that the mother failed to sustain her allegations of substance abuse by the father, did not justify a conclusion that she was lying in respect to her allegations of physical abuse. ( … )”
