Merhi and Merhi & Ors (No 2)

In *Merhi and Merhi & Ors (No 2)*, Loughnan J of the Federal Circuit and Family Court of Australia considered applications by the wife for financial disclosure from the husband and his father, and by both parties concerning the interim distribution of funds from a property sale. The husband’s father, who had previously made a will benefiting the husband, had lost capacity, and his sister had been appointed as his case guardian.

The primary legal issues before the court were whether financial disclosure should be ordered from the husband’s father (through his case guardian) and the husband, and whether to grant interim property division orders regarding the proceeds of a property sale. The wife sought disclosure to ascertain the financial circumstances relevant to the proceedings, particularly given the father's prior will and the husband's obligations of full and frank disclosure. The husband sought to apply sale proceeds to a loan from his sister or, alternatively, to school fees and legal expenses, while the wife sought an equal distribution or allocation for valuations.

His Honour determined that the financial circumstances of the husband’s father were relevant to the proceedings, necessitating disclosure. Applying rule 13.04 of the *Family Law Rules 2004* (Cth), the court ordered the husband’s father’s case guardian to provide specific documents and an affidavit detailing the composition and value of the late Ms J Merhi’s estate and the property, superannuation, and financial resources of Mr E Merhi. The husband was also ordered to provide similar disclosure. Regarding the interim property division, the court found insufficient information to make a proper and conservative exercise of power under section 79 of the *Family Law Act 1975* (Cth), especially given the concession that the debt to the sister was not legally enforceable.

Consequently, the applications by both the husband and the wife for the disbursement of the net proceeds of the sale of the property at R Street, Suburb S were dismissed.