Lazarova & Lazarova

[2025] FedCFamC1A 98

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1) APPELLATE JURISDICTION

Lazarova & Lazarova [2025] FedCFamC1A 98

Appeal from:	Lazarova & Lazarova [2025] FedCFamC2F 58
Appeal number(s):	NAA 57 of 2025
File number(s):	PAC 1005 of 2022
Judgment of:	RIETHMULLER J
Date of judgment:	27 May 2025
Catchwords:	FAMILY LAW – APPEAL – EX-TEMPORE – Property settlement – Where parties were in a relationship for 34 years – Where the primary judge assessed the parties’ contributions at 75 per cent in favour of the respondent and 25 per cent in favour of the appellant – Primary judge made an adjustment under s 75(2) resulting in 78 per cent distribution in favour of the respondent and 22 per cent in favour of the appellant – Where the appellant argued inadequacy of reasons – A 22 per cent distribution in favour of the appellant was outside the ambit of a reasonable assessment pursuant to the test in House v The King (1936) 55 CLR 499 – Parties agreed on terms of settlement – Orders made by consent – Appeal allowed by consent – No matters of principle.
Legislation:	Family Law Act 1975 (Cth) s 75(2)
Cases cited:	House v The King (1936) 55 CLR 499; [1936] HCA 40
Number of paragraphs:	21
Date of hearing:	27 May 2025
Place:	Parramatta
Counsel for the Appellant:	Mr Othen SC
Solicitor for the Appellant:	Brendon Dunstan Solicitor
Counsel for the Respondent:	Ms Gillies SC
Solicitor for the Respondent:	Holmes Donnelly & Co Solicitors

Table of Corrections
25 July 2025	In the catchwords, the typographical error “88” was replaced with “78” and “percent” was changed to “per cent” for consistency.

ORDERS

NAA 57 of 2025
PAC 1005 of 2022

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTION

BETWEEN:

MR LAZAROVA

Appellant

AND:

MS LAZAROVA

Respondent

ORDER MADE BY:	RIETHMULLER J
DATE OF ORDER:	27 MAY 2025

ON A FINAL BASIS, BY CONSENT, THE COURT ORDERS THAT:

1.Appeal NAA 57 of 2025 be allowed.

2.Order 1 of the Orders of the primary judge dated 23 January 2025 be varied to read as follows:

“On or before 28 days from the date hereof, the wife shall pay to the husband $926,975 by way of property settlement.”

3.Each party shall pay their own costs of and incidental to the appeal.

AND THE COURT NOTES THAT:

A.The parties agree that the wife has previously paid to the husband the sum of $326,975 and the amount provided for in Order 2 of these Orders includes this sum so that the wife has an outstanding liability to the husband of $600,000.

B.The parties agree that they shall each be responsible for their own costs in relation to the final hearing conducted in the Federal Circuit and Family Court of Australia (Division 2).

C.The wife shall file a Notice of Discontinuance in relation to the Application in a Proceeding filed 20 February 2025.

Note:  The form of the order is subject to the entry in the Court’s records.

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Lazarova & Lazarova has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).

EX-TEMPORE REASONS FOR JUDGMENT

RIETHMULLER J:

1. This is an appeal against property settlement orders made on 23 January 2025. The parties have reached an agreement that the appeal be allowed and for orders to be made varying the property settlement orders made by the primary judge to adjust them so that the husband receives an additional $600,000. This brings his share of the pool of assets as identified by the primary judge to 31 per cent from the 23 per cent found appropriate by the primary judge.

2. Whilst there is agreement as to the outcome of the appeal, the authorities require that reasons be given before allowing an appeal.

3. In this matter, the parties commenced cohabitation in 1983, marrying later that year. They had four children, all of whom are now adults. The parties separated under the one roof in early 2017 and then lived in separate residences from mid-2019. They had a relationship of about 34 years. They ultimately divorced in April 2022.

4. The primary judge found that the value of the net assets of the parties was $5,623,638, together with superannuation of $1,248,627, making a combined pool of assets and superannuation of $6,872,265.

5. In addition to the assets and liabilities of the parties, the appellant has a pension that appears to be exempt from taxation (and cannot be commuted to a lump sum) which provides him with an income of around $86,000 per annum that is indexed to the Consumer Price Index (at [7] and [96]). This pension will continue for his life. At the trial, the evidence indicated that the pension entitlement had a value of around $885,000 (wife’s affidavit filed 1 May 2024 at [124]). The matter was approached on the basis that because the pension could not be commuted and no splitting order had been sought, it was dealt with as an income resource of the husband rather than an asset to be added to the pool.

6. The primary judge assessed the parties’ respective contributions at 75 per cent and 25 per cent in favour of the wife and then concluded that there should be an adjustment pursuant to s 75(2) of the Family Law Act 1975 (Cth) of 3 per cent in favour of the wife. This consideration seems, in large part, was based on the fact that the husband had the pension available to him as, in this case, both parties (although at the time were doing some part-time work in their early seventies), were soon to cease working and will not be earning into the future.

7. The husband argued a number of grounds of appeal. As the appeal is to be allowed on the question of the contributions assessment and s 75(2) factors, I do not need to deal with the other grounds that were argued in relation to refusal to allow the husband very late in the day to lead adversarial expert evidence and the trial judge’s treatment of legal fees and capital gains tax. It is sufficient to say that I am not persuaded that there was any specific error by the trial judge in these respects.

8. The assessment of contributions is difficult in this case. The matter involves a very lengthy relationship. The primary judge found that the parties’ contributions through employment and homemaking were equal. Although, noting that for two years, the wife had assisted in the care of children from a former relationship of the husband, and for a period following separation, the husband had the benefit of living in the home.

9. It is clear that both parties – through their efforts in the marriage, employment, homemaking and child-rearing – had made significant contributions over the 34 years that they were together.

10. At the commencement of the relationship, the husband came with relatively modest assets: a car worth $5,000, about $8,000 in cash and a waterski boat which he said was worth $6,000, although the wife suggests it was worth far less.

11. During the marriage, when working as a public servant, the husband was involved in a collision when his car was hit by a garbage truck, which resulted in him receiving a compensation payment in the sum of around $115,000 (husband’s affidavit filed 6 May 2024 at [94]–[95]). This money was used to assist with constructing a sunroom in a property, to buy a motor vehicle, and deposited into joint accounts (husband’s affidavit filed 6 May 2024 at [97]–[99]). He also received nearly $60,000 on his retirement from the public service (wife’s affidavit filed 1 May 2024 at [43]).

12. The trial judge sets out a very large number of non-financial contributions the husband made which are in the style that is commonly seen in a long marriage such as working the yard, work on the house, slashing, mowing, and the like.

13. The wife also worked during the relationship and applied her funds to the relationship and the family. She also undertook significant work child-rearing. She brought a property to the relationship worth around $300,000 and her superannuation entitlements of then around $45,000 (at [82]). She also had a motor vehicle worth around $10,000 (wife’s affidavit filed 1 May 2024 at [11.3]).

14. Both received considerable gifts or bequests from family members (although the wife’s by far exceeded that received by the husband).

15. The wife sets out that during the course of the long relationship, she received around $3.89m in gifts. Some of the larger gifts including a contribution towards purchasing a property in 1990, contributions towards an additional residence on a property in 2002, proceeds from the sale of a property in 2004 and contributions towards the children’s school fees between 2004 and 2011 (wife’s affidavit filed 1 May 2024 at [50]–[59]). Towards the end of the relationship or shortly after the end of the relationship between 2013 and 2017, she received around $1.357m in two stages from her mother’s estate (wife’s affidavit filed 1 May 2024 at [82.2]). It was also noted that for a period of time, her mother, despite her generosity in gifts to the parties, had also paid rent of some $74,000 for living in the Suburb B property (Section 50 Schedule, Exhibit D).

16. The husband also received bequests late in the relationship from his family, totalling around $873,000 (at [80]).

17. It appears to me that it is realistic to approach the case on the basis that, in substance, the only s 75(2) factors that are relevant today are that there is likely a large differential in the assets to be received by each party and the husband’s pension. As a result of the greater contributions on the wife’s side through her family during the relationship, and the initial contribution that she made, she would be assessed as having made greater contributions. However, the husband has his pension (which he will receive for life), and the wife will have to live off of her assets.

18. I also note that just as her mother was generous to her, she has been generous to the parties’ children and provided some of the funds that she inherited (around $800,000) to the children in order to enable them to have a better lifestyle (wife’s affidavit filed 1 May 2024 at [91]). This resulted in diminution of the asset pool, but from assets that she had inherited from her mother.

19. When one looks at the facts and circumstances of this case as a whole, including the list of matters recounted by the primary judge and in light of a 34-year relationship, I am persuaded that the assessment by the primary judge and the contributions at 25 per cent reduced to 22 per cent as a result of an adjustment pursuant to s 75(2) is outside of what could be described as a reasonable assessment on the test in House v The King (1936) 55 CLR 499.

20. I am persuaded that the figure the parties have struck by way of agreement in the consent orders is an appropriate outcome having regard to the contributions and s 75(2) factors in this case. This still leaves the wife with more than twice the assets of the husband despite a very long marriage, but reflects the importance of giving real recognition to the far greater contributions that have been made by her family during the relationship and the pension the husband will receive for the remainder of his life.

21. In these circumstances, I am persuaded that these are appropriate orders.

I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Ex-Tempore Reasons for Judgment of the Honourable Justice Riethmuller.

Associate:

Dated:       22 July 2025