Eacret & Eacret (No 2)

Case [2022] FedCFamC1F 589

Federal Circuit and Family Court of Australia

(DIVISION 1)

Eacret & Eacret (No 2) [2022] FedCFamC1F 589

File number(s): SYC 4450 of 2021
Judgment of: SCHONELL J
Date of judgment: 16 August 2022
Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Where the wife sought a suite of orders including joinder, injunctions and disclosure – Where the husband purchased a property and used the former matrimonial home as additional security for that purchase – Where the wife sought to join two third party companies – Orders made for one of the companies to be joined as a party to the proceedings – Where the wife also sought to restrain the husband and the two companies from dealing with properties – Where the husband failed to make full and frank disclosure – Where the wife satisfied the Court that there is an arguable case for the relief she seeks – Injunctions granted against the husband and one of the companies – Orders made regarding disclosure.  
Legislation:

Family Law Act 1975 (Cth) ss 79, 114

Family Law Rules 2004 (Cth)

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 3.01, 3.03

Cases cited:

Eacret & Eacret [2021] FedCFamC1F 300

Kannis & Kannis (2003) FLC 93-135; [2002] FamCA 1150

Oriolo & Oriolo (1985) FLC 91-653; [1985] FamCA 54

Sieling & Sieling (1979) FLC 90-627; [1979] FamCA 23

State of Victoria v Sutton (1998) 195 CLR 291; [1998] HCA 56

Tsiang & Wu and Ors (2019) FLC 93-911; [2019] FamCAFC 128

Wayne v Dillon and Another (2008) 40 Fam LR 543; [2008] 40 FamLR 543

Weir & Weir (1993) FLC 92-338; [1992] FamCA 69

Division: Division 1 First Instance
Number of paragraphs: 83
Date of hearing: 4 August 2022
Counsel for the Applicant: Mr May
Solicitor for the Applicant: Pearson Emerson Family Lawyers
Counsel for the Respondent: Mr Bunning
Solicitor for the Respondent: Watts McCray

ORDERS

SYC 4450 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MS EACRET

Applicant
AND:

MR EACRET

Respondent

order made by:

SCHONELL J

DATE OF ORDER:

16 AUGUST 2022

THE COURT ORDERS THAT:

1.Leave be granted pursuant to r 3.03(4) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) to join DD Pty Ltd ACN… (“DD Pty Ltd”) as a party to these proceedings.

2.Pending further order, the respondent husband (“the husband”) is hereby restrained from selling, transferring, assigning, further encumbering or alienating the property at B Street, Suburb C, New South Wales (Folio Identifier …) without the applicant wife’s (“the wife’s”) prior written consent or order of the Court.

3.Pending further order, the husband and/or DD Pty Ltd cause to be paid as and when they fall due the mortgage payments in respect of the mortgage secured over the property at Y Street, Suburb C, New South Wales (Folio Identifier…).

4.Pending further order, the husband and DD Pty Ltd be and are hereby restrained from selling, transferring, assigning, further encumbering or alienating their interest…

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AGLC
Eacret & Eacret (No 2) [2022] FedCFamC1F 589
Case
[2022] FedCFamC1F 589
Decision Date

CaseChat Overview and Summary

In Eacret & Eacret (No 2), the husband and wife were engaged in a dispute concerning the division of their assets following their separation. The wife sought orders for the discharge of a mortgage on their family home and its transfer to her, while the husband argued against these claims. The case was heard in the Family Court of Australia. The central legal issues before the court were whether the husband had made a full and frank disclosure of all assets and whether the wife's allegations of undisclosed assets and trusts were substantiated. The court also had to determine the appropriate division of the assets between the parties.

The court examined the evidence and submissions from both parties, including the wife's allegations of undisclosed trusts and assets. It found that the husband had indeed failed to disclose the existence of certain trusts and assets, including the BB Trust and the CC Trust, which were established after the separation. The court accepted the wife's evidence that she was unaware of these trusts until well after their creation and that the husband had arranged significant borrowings secured over the family home without her knowledge. The court concluded that the husband's failure to disclose these assets constituted a significant breach of his obligations.

In its judgment, the court ordered the husband to discharge the mortgage over the family home and transfer the property to the wife. Additionally, the court made orders for the husband to pay the wife a lump sum payment to compensate for the undisclosed assets and to address the imbalance in the division of the couple's assets. The court also noted the importance of full and frank disclosure in family law proceedings and emphasised the need for parties to act in good faith.

Orders

Orders of the court

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Background

Background to the litigation

The husband relied upon the following documents:(1)Response to an Application in a Proceeding filed 1 August 2022;(2)Affidavit of husband filed 1 August 2022;(3)Case Outline document; and(4)Written Submissions. Background The wife contends that the parties commenced cohabitation in about January 1995 and were married in 1996. She says the parties separated in March 2020. There are three children of the marriage. There is only one child currently under the age of 18. The husband has re-partnered and he has two children from that relationship. It would appear that the husband’s new partner and children live in the United Kingdom. The husband returns periodically to Australia. The wife contends there is an issue as to when the husband and his partner commenced cohabitation. For the purposes of this application, that is not a relevant issue. In October 2011, there was established a company, K Pty Ltd (“K Pty Ltd”), of which the husband was the sole director and sole shareholder. Following the parties’ separation, the husband’s sister was also appointed a director. K Pty Ltd is the trustee of the K Trust. The wife describes K Pty Ltd in the following terms:39. [K Pty Ltd] is the trustee of the [K Trust] which I understand is a hybrid discretionary and unit trust. [Mr Eacret] is the appointor and primary beneficiary of the [K Trust] and I am a secondary beneficiary. The units in the [K Trust] are held by [S Pty Ltd].40. On or about December 2011, the [B Street] property was purchased in the name of [K Pty Ltd] as trustee of the [K Trust]. The property was purchased as vacant land and our house was constructed on the land between about 2011 and 2013. 41. The [B Street] property has been our family home for about 9 years and I wish to remain living there with the children. In my Initiating Application, as amended, I seek orders for [Mr Eacret] to discharge the mortgage secured over the property and transfer it to me.42. The [B Street] property has been valued by the agreed single expert, [Mr EE] of [FF Company], for the purpose of these proceedings at $4,100,000 as at mid-2022.43.There was a mortgage over the [B Street] property securing loans from ANZ which was refinanced with [JJ Bank] in about June 2017. The JJ Bank facility comprises 2 loans, accounts ending [#...58] and [#…13], with a limit of $1,803,750.44. As at 10 May 2022, the balance of the [JJ Bank] loans was $1,760,965. The wife makes a general contention in the proceedings that the husband has failed to make a full and frank disclosure. The wife gives evidence that the company DD Pty Ltd (“DD Pty Ltd”) was incorporated on 9 July 2021. The wife asserts the following in relation to this company:46. [Mr Eacret] is a director of [DD Pty Ltd] with his sister, [Ms KK], who is the secretary and sole shareholder of the company. [DD Pty Ltd] is the corporate trustee of the [BB Trust] and the [CC Trust].47. The [BB Trust] was established by deed dated 21 July 2021. [Mr Eacret] and [Mr HH], are the appointors, with his sister, [Ms KK], as the alternative appointor. [Mr Eacret] is the primary beneficiary, with [CC Pty Ltd] Pty Ltd as the default beneficiary.48. The existence of the [BB Trust] was first disclosed to me by letter received by my solicitors from [Mr Eacret's] solicitors on 6 May 2022.49. [DD Pty Ltd] as trustee for the [BB Trust] entered a contract for the purchase of the [Y Street] property for $5,000,000 in early April 2022, without my knowledge. I do not know whether settlement of the purchase has occurred but understand that [Mr Eacret] has arranged to borrow $4,998,000 to fund the purchase, secured in part over the [B Street] property.…61.On 12 April 2022, my solicitors received a letter from [Mr Eacret's] solicitors enclosing documents by way of updating disclosure. There was no disclosure made regarding [DD Pty Ltd], [CC Pty Ltd], the [BB Trust] or the [CC Trust].

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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