Juliet and Juliet & Anor - [2013] FamCA 497

FAMILY COURT OF AUSTRALIA

JULIET & JULIET AND ANOR

[2013] FamCA 497

FAMILY LAW – PROPERTY – Where the parties were married for over 20 years – Where more than 12 years have passed from the date of final separation to the commencement of the final trial – Where over the lengthy period of separation each party has essentially pursued their own individual interests, including financial interests, independently of the other – Where both parties have used capital or income sourced to property which existed at the time of separation – Where the Wife instituted property proceedings in 2002 – Where the Wife contends an informal property settlement was reached by the parties in early 2004 – Where the proceedings were adjourned in early 2005 and almost five years elapsed before the Husband reactivated them in late 2009 – Whether it is implicit that, at least in the period of five years when the proceedings lay dormant, each party would retain their existing and future legal and equitable interests to the exclusion of the other – Whether the just and equitable requirement is fulfilled

FAMILY LAW – PROPERTY – Where the Husband estimates he has been involved in financial dealings with more than 45 separate legal entities including companies and trusts, partnerships and joint ventures, since separation – Where much of the evidence at trial was devoted to attempting to unravel the numerous post-separation transactions undertaken by the Husband – Where there were strident criticisms made of the Husband’s alleged lack of disclosure – Where the Husband was found to be an evasive and unconvincing witness on many issues – Where the Husband has had periods of earning very substantial income and had successful business transactions post-separation – Where the Husband had significant capital available to him from assets existing at the time of the parties’ separation – Where the Husband lost or expended all capital and income sourced to property existing at the time of the parties’ separation and his remaining very minor assets were overwhelmingly subsumed in value by the total amount of debts accumulated post-separation – Where the Husband’s current financial position is due to his financial dealings post-separation independently of and without reference to the Wife – Where the Wife has had a modest earning capacity – Where the Wife was responsible for the care of the parties’ daughter who was 15 years of age at the time of separation for two years thereafter – Where the Wife’s loss of capital was a consequence of the realities of the economic situation – Where the Husband acknowledged that any alteration of the Wife’s existing interests in property in his favour would be subsumed by his existing debts and creditors – Where it is not appropriate within the meaning of section 79(1) of the Family Law Act 1975 to make any orders which would alter the Wife’s presently existing legal or equitable interests in favour of the Husband

Family Law Act 1975 (Cth)
Bankruptcy Act 1966 (Cth)

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2013] FamCA 497
Decision Date

CaseChat Overview and Summary

This case concerned property settlement proceedings in the Family Court of Australia between Ms Juliet (the Applicant) and Mr Juliet (the First Respondent), and a second respondent company. The parties separated in March 2001, and the final trial commenced in July 2012, over 12 years later. During this extended period of separation, both parties independently pursued their own financial interests, utilising capital and income derived from assets that existed at the time of separation. The Wife initiated proceedings in 2002, alleging an informal property settlement in early 2004. The proceedings were adjourned in 2005 and lay dormant for almost five years before being reactivated by the Husband in late 2009.

The central legal issues before the Court were whether it was implicit that, during the five-year period the proceedings were dormant, each party would retain their existing and future legal and equitable interests to the exclusion of the other, and whether the requirement that any property settlement order be just and equitable could be fulfilled. The Court was required to consider the extensive post-separation financial dealings of the Husband, which involved numerous legal entities, and the criticisms of his alleged lack of disclosure. The Husband's financial position was characterised by periods of substantial income and successful business transactions post-separation, but ultimately resulted in a significant net deficit due to accumulated debts, despite having access to capital from assets existing at separation. In contrast, the Wife had a modest earning capacity and was responsible for the care of the parties' daughter for two years post-separation.

The Court's reasoning was heavily influenced by the High Court's decision in *Stanford v Stanford* (2012), which emphasised that the "just and equitable" requirement under section 79(2) of the *Family Law Act 1975* (Cth) necessitates a principled reason for interfering with existing legal and equitable interests. The Court noted that the parties had largely pursued their financial interests independently over a long period of separation, and that the Husband's financial activities had resulted in a substantial deficit, with his remaining assets being subsumed by his debts. The Husband acknowledged that any alteration of the Wife's interests in his favour would be absorbed by his creditors, and that his aim was to negotiate a settlement to avoid personal bankruptcy. The Court found that the Husband had not adduced evidence to support his contention that he could achieve his stated objective with his creditors.

Ultimately, the Court found that it would not be just and equitable to make any orders altering the Wife's existing legal or equitable interests in favour of the Husband, as such an alteration would be subsumed by his debts and creditors. The Court ordered that the Applicant retain specific properties and interests, including real estate and a trust, to the exclusion of the Respondents. The First Respondent was ordered to retain his interest in land in the United States. The orders also stipulated that each party would be the sole beneficial owner of property in their possession, and they would forego claims to each other's superannuation or insurance benefits. The First Respondent and the Second Respondent Company were ordered to indemnify the Applicant against certain actions and liabilities.

Orders