Beeson and Spence

This case involved an application by the husband, Mr Spence, to set aside a Deed of Variation of the S Trust dated 26 September 2003, pursuant to section 106B of the *Family Law Act 1975* (Cth). The primary dispute concerned the division of property between the parties, Ms Beeson and Mr Spence, who had separated after a marriage of approximately six years. Parenting orders were agreed by consent, but the determination of property settlement and the husband's application to set aside the Deed of Variation remained for the court.

The court was required to determine whether the Deed of Variation of the S Trust was an instrument or disposition made to defeat an existing or anticipated order, or which was likely to defeat such an order, within the meaning of section 106B of the *Family Law Act 1975*. This involved considering whether the Trust itself was a sham, and if not, whether the variation, which altered the definition of beneficiaries and appointed a new appointor, was made in the interests of a party to defeat anticipated property settlement orders. The court also had to determine the value of the parties' respective assets and liabilities, including the contentious issue of whether the S Trust property should be considered an asset of the wife, and whether certain advances made to the wife constituted debts to be deducted from her asset pool.

Justice Moore found that the S Trust was not a sham, as it was validly constituted and initially provided for the wife and husband as potential beneficiaries, with the wife controlling the appointment of trustees. However, the court determined that the Deed of Variation, which removed the parties as beneficiaries in their own right and appointed a new appointor, was made at the wife's direction and was likely to defeat anticipated property settlement orders. The court reasoned that allowing the wife to relinquish control of the Trust and its assets would enable her to quarantine them from property proceedings, which would be contrary to justice and equity. Consequently, the Deed of Variation was set aside, restoring the Trust to its original terms and attributing the value of the Trust assets, specifically the H home, to the wife. The court also found that the wife had not established any legally enforceable obligation to repay the advances she had received, and therefore these were not to be treated as liabilities.

The court ordered that the Deed of Variation of the S Trust dated 26 September 2003 be set aside. The wife was declared solely entitled to all property, real or personal, in her possession or control, excluding the husband's superannuation interest. The husband was ordered to pay child support of $50 per week for each child until 13 March 2008. The court also made orders reflecting a property division of approximately 60% to the wife and 40% to the husband, based on their contributions and relevant section 75(2) factors.