By Craig Nicol and Keleigh Robinson
Property – Court erred as primary judge conflated the task of identifying whether trust assets were property of the parties with the question of whether those assets should be taken into account in the exercise of discretion – Husband’s interests in intergenerational management trusts were property
In Caldwell [2026] FedCFamC1A 81 (11 May 2026) the Full Court (Christie, Strum & Brasch JJ) heard a wife’s appeal from a decision of Carew J, which held that the husband’s interests in discretionary trusts to facilitate the intergenerational management of the family business, were not property of the parties within the meaning of s 79 of the Act.
Christie & Brasch JJ said (from [26]):
“[The husband’s] … capacity to control the trustee gives the husband effective control of the trusts. … [T]he husband’s present voting rights permit him to control the trust, and … it is not necessary for the husband to have taken the action necessary to assume control. What is material is that… there is no impediment to him so doing, that is, he has effective control.
( … )
[53] … [T]he respondents… contend that because the husband… needs to take steps to exercise his control… then the Court could not conclude that he presently has control. This overcomplicates the situation. As we sit here – the husband may vote in a manner which gives him effective control. No more is required.
( … )
[56] … [T]he primary judge conflated the issue of assessment of the contributions of the parties with the question of whether the trusts were property… The question of dealings with trust property may be relevant if the case involves an argument about sham, but not otherwise, and the issue of the origin of the trust assets is one which goes to the consideration of contributions…
( … )
[92] Where… the relevant trust deeds permit the husband to confer a benefit upon himself, it is difficult to conceive of a circumstance in which his act in conferring a benefit upon himself would offend the proper purpose rule.”
The majority concluded that the appeal should be allowed. The Court declared that the trusts were property for the purpose of s 79 of the Act ([2]). Dissenting, Strum J concluded that “none of the trusts and/or trust assets are property within the meaning of s 79 and … that the appeal [should] be dismissed.” ([103]).
