Kuay-Hoa & HOA & Ors

The case involved a dispute between a wife and her husband, and two companies, concerning the division of marital property. The wife sought final property orders under section 79 of the *Family Law Act 1975* (Cth). A key issue was that two real properties were owned by the second respondent company, and the husband had, post-separation, divested his shares and control of this company to the third and fourth respondents. The wife alleged that these transactions were designed to defeat her claims and sought to have them set aside under section 106B of the Act.

The court was required to determine whether the properties owned by the second respondent company constituted property of the parties to the marriage, and whether the post-separation transactions by which the husband divested his shares and control of the company should be set aside as transactions to defeat claims. Additionally, the court considered the wife's claim for an adjustment in her favour under the principles of *Kennon & Kennon* (1997) FLC 92-757, based on alleged violence and abuse during the marriage and post-separation, and the respective contributions of the parties. The court also had to consider the application of the rule in *Jones v Dunkel* (1959) 101 CLR 298, given the failure of the parties to call certain witnesses.

Bennett J found that the transactions by which the husband divested his shares and control of the second respondent company should be set aside pursuant to s 106B of the *Family Law Act 1975* (Cth). The court reasoned that these transactions were undertaken to defeat the wife's claims. The court also determined that the property owned by the second respondent company was property of the parties to the marriage. While the wife alleged a course of conduct involving violence and abuse, the evidence did not establish that her contributions were made significantly more arduous, thus the *Kennon* adjustment was not granted on that basis. However, considering the wife's role as primary carer of the two young children and her limited capacity for employment in Australia due to her lack of English language skills, the court made an adjustment of 8% in her favour, increasing her entitlement to 48% of the divisible assets.

The court made detailed orders for the setting aside of the relevant transactions, the transfer and sale of the two properties, and the distribution of the net proceeds. The wife was to have sole conduct of the sale of both properties. The proceeds were to be applied towards sale costs, outstanding taxes and rates, a sum of $401,000 for potential capital gains tax on one property, and the wife's Centrelink debt. The remaining net proceeds were to be divided 52% to the husband and 48% to the wife, with provisions for the allocation of any excess or shortfall in capital gains tax. Registrars were authorised to sign documents if any party failed to do so.