FAMILY COURT OF AUSTRALIA
CEOI & EK [2007] FamCA 1316
FAMILY LAW - APPEAL – PROPERTY – Disputed asset pool where there were third parties’ interests – The husband appeared in person on appeal and due to the difficulties this presented, the Full Court took the approach of itself analysing and identifying any errors of the trial judge – Appeal allowed on the basis that the trial judge had:
- Incorrectly calculated the husband’s interests in certain properties;
- Incorrectly stated that “the matrimonial property was agreed to”;
- Wrongly relied upon evidence to conclude that the husband had greater assets than disclosed;
- Implicitly concluded on inadequate evidence that undisclosed assets of $3.2 million existed;
- Made contradictory findings about the effect of third parties’ evidence on the property interests of the husband; and
- Failed to deduct the interests of the husband’s mother, sister and other investors from the value of certain properties
On the re-exercise of discretion, the parties’ assets were divided into two pools, the first being the pre-separation assets acquired in Australia and other interests totalling approximately $1.25 million. The second pool of assets consisted of the husband’s post-separation assets and overseas assets, totalling approximately $470,000.
Due to:
- Significant uncertainties about the husband’s financial affairs;
- The husband’s conduct of his financial affairs without proper records;
- Uncertainties about the husband’s interest in the second pool of assets; and
· Consistent with the trial judge declining to make a s 75(2) adjustment
the Full Court determined it was just and equitable to divide the first pool of assets as to 60 per cent to the wife, leaving the husband with 40 per cent of the first pool and the entirety of the second pool of assets.
COSTS APPEALS – The Full Court dismissed the husband’s appeals against costs orders made in relation to an unsuccessful application for a stay of the property orders, and in relation to the Deputy Commissioner of Taxation’s involvement in the property proceedings – The husband’s stay application was almost entirely unsuccessful and he did not provide any grounds to challenge the order – It was the husband who sought the joinder of the Deputy Commissioner of Taxation and no error had been shown in the trial judge awarding costs against the husband
Family Law Act 1975 (Cth)
CDJ v VAJ (1998) 197 CLR 172; (1998) FLC 92-828; (1998) 23 Fam LR 755
Devries v Australian National Railways Commission (1993) 177 CLR 472; (1993) 112 ALR 641
E and G [2002] FamCA 475
Fox v Percy (2003) 214 CLR 118; (2003) 197 ALR 201
Hickey and Hickey (2003) FLC 93-143; (2003) 30 Fam LR 355
Monte and Monte (1986) FLC 91-757
Neil v Nott (1994) 121 ALR 148; (1994) 68 ALJR 509
State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (In Liq) (1999) 160 ALR 588; (1999) 73 ALJR 306
Weir and Weir (1993) FLC 92-338; (1992) 16 Fam LR 154
Whisprun Pty Ltd v Dixon (2003) 200 ALR 447
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- AGLC
- Ceoi & Ek [2007] FamCA 1316
- Case
- [2007] FamCA 1316
- Decision Date
CaseChat Overview and Summary
The central legal issues before the Full Court involved determining whether the trial judge had erred in various aspects of the property division. These included the calculation of the husband's interests in certain properties, the assertion that matrimonial property was agreed, the reliance on evidence to conclude the husband possessed undisclosed assets, the implicit finding of $3.2 million in undisclosed assets based on inadequate evidence, contradictory findings regarding the impact of third-party evidence on the husband's property interests, and the failure to deduct the interests of third parties, such as the husband's mother and other investors, from the valuation of specific properties.
The Full Court allowed the property appeal in part, finding that the trial judge had made several errors. The Court identified incorrect calculations of the husband's property interests and made contradictory findings concerning the effect of third-party evidence. Furthermore, the Court found that the trial judge had implicitly concluded the existence of undisclosed assets on insufficient evidence and failed to properly account for the interests of third parties in certain properties. In re-exercising its discretion, the Court divided the asset pool into two: pre-separation Australian assets totalling approximately $1.25 million, and post-separation and overseas assets totalling approximately $470,000. Given significant uncertainties surrounding the husband's financial affairs, his record-keeping, and his interests in the second pool of assets, and consistent with the trial judge's decision not to make a s 75(2) adjustment, the Full Court deemed it just and equitable to divide the first pool of assets 60 per cent to the wife and 40 per cent to the husband, with the husband retaining the entirety of the second pool. The Court also dismissed the husband's appeals against costs orders related to a stay application and the involvement of the Deputy Commissioner of Taxation.
Orders
Orders of the court
1. The property appeal be allowed in part.
2. Orders 3 and 4 of the orders made by the Honourable Justice Barry on 19 May 2006 be set aside and in lieu thereof it is ordered and declared:
(a) The second respondent Ms L holds her interest in the property situated at R Street on trust for the first named respondent husband;
(b) Unless the husband pays the sum of $112,600 to the applicant wife within 30 days, the R Street property is to be sold forthwith and the net proceeds of sale after payment of costs and expenses attendant upon the sale are to be divided as to one third to the applicant wife and the remainder to the husband;
(c) As between the parties, any capital gains tax payable by the parties arising from the sale of the R Street property is to be met as to one third by the wife and two thirds by the husband;
(d) In order to effect a sale, the husband and the second named respondent are to sign all documents and do all things necessary to transfer their interest in the R Street property to the wife to be held by her on trust for sale; and
(e) The wife’s solicitors are to handle the conduct of the sale.
3. The wife forthwith sign all documents and do all things necessary to reconvey the property situated at T Street to the husband and the second named respondent.
4. The parties be at liberty to file written submissions concerning the appeal against the order made by the Honourable Justice Barry on 29 September 2006 that the husband pay the wife’s costs of the proceedings and in relation to the costs of this appeal as follows:
(a) The husband to file and serve his submissions within 21 days;
(b) The wife to file and serve her submissions in response within 14 days thereafter; and
(c) The husband to file and serve any submissions in reply within 7 days thereafter.
5. The appeals be otherwise dismissed.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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