Reichstein & Reichstein

Case [2006] FamCA 1422


FAMILY COURT OF AUSTRALIA

REICHSTEIN v REICHSTEIN [2006] FamCA 1422

APPEAL – PROPERTY – Whether trial Judge erred in failing to “add back” to pool of assets certain liabilities of husband and not including certain assets acquired by wife after separation – Whether trial Judge failed to give adequate reasons for inclusion of proceeds of sale of shares by husband after separation – Whether trial Judge gave insufficient weight to initial contributions of husband – Trial Judge made erroneous factual finding as to value of initial contribution of husband – Finding underpinned trial Judge’s overall assessment of contributions – Ground established – Whether trial Judge failed to properly assess husband’s contributions in respect of overseas bank account – Husband failed to comply with obligation to make full, frank and complete disclosure – Trial Judge not in error in treatment of account given state of evidence and husband’s substantial non-disclosure – Whether trial Judge erred in failing to take into account as a contribution the welfare of wife’s children from previous marriage – No error by trial Judge in rejecting husband’s submission he should receive weighting for a contribution under s 79(4)(c) – Whether trial Judge erred in failing to take into account husband’s post separation contributions to his superannuation – Trial Judge did not assess and make findings about parties’ post separation superannuation contributions – Failure constitutes appealable error.

Whether trial Judge erred in making adjustment in wife’s favour of 13 per cent for
s 75(2) factors – Satisfied this adjustment outside reasonable ambit of discretion – Grounds in relation to s 75(2) factors established.

Whether trial Judge in error in that overall result not just and equitable – Merit in this ground.

Appeal allowed – Re-exercise of discretion – Overall contributions to superannuation and non-superannuation assets assessed at 76 per cent by the husband and 24 per cent by the wife after minor adjustment to pool – Appropriate adjustment under s 75(2) was 6 per cent.

Family Law Act 1975 (Cth), ss 75(2), 79

A v J (1995) FLC 92-619

Allesch v Maunz (2000) 203 CLR 172; (2000) FLC 93-033

Bennett and Bennett (1991) FLC 92-191

Black and Kellner (1992) FLC 92-287

Briese and Briese (1986) FLC 91-713

Coghlan and Coghlan (2005) FLC 93-220

De Winter and De Winter (1979) FLC 90-605

Gronow v Gronow (1979) 144 CLR 513

Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143

House v The King (1936) 55 CLR 499

JEL and DDF (2001) FLC 93-075

Kannis and Kannis (2003) FLC 93-135

Norbis v Norbis (1986) 161 CLR 513; (1986) FLC 91-712

Oriolo and Oriolo (1985) FLC 91-653

Robb and Robb (1995) FLC 92-555

Townsend and Townsend (1995) FLC 92-569

Waters and Jurek (1995) FLC 92-635

Weir and Weir (1993) FLC 92-338

APPELLANT: AER
RESPONDENT: DLR
FILE NUMBER: ADF 908 of 2004
APPEAL NUMBER: SA 15 of 2006
DATE DELIVERED: 29 November 2006
PLACE DELIVERED: Sydney
JUDGMENT OF: BRYANT CJ, KAY & BOLAND JJ
HEARING DATE:

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Reichstein & Reichstein [2006] FamCA 1422
Case
[2006] FamCA 1422
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CaseChat Overview and Summary

This appeal concerned a dispute between a husband and wife regarding the division of their property. The Full Court of the Family Court of Australia heard the appeal from orders made by a single judge. The primary issues before the Full Court were whether the trial judge had erred in various aspects of their property adjustment, including failing to "add back" certain liabilities of the husband, not including certain assets acquired by the wife after separation, and inadequately explaining the inclusion of proceeds from the sale of shares by the husband post-separation. Further grounds of appeal related to the weight given to the husband's initial contributions, the treatment of an overseas bank account, the consideration of the welfare of the wife's children from a previous marriage, and the failure to account for the husband's post-separation superannuation contributions. The court also considered whether the adjustment made in favour of the wife for section 75(2) factors was outside the reasonable ambit of discretion and whether the overall result was just and equitable.

The Full Court found that the trial judge had made an appealable error in failing to assess and make findings regarding the parties' post-separation superannuation contributions. Additionally, the court determined that the adjustment made in favour of the wife under section 75(2) of the *Family Law Act 1975* (Cth) was excessive. While acknowledging the husband's failure to make full and frank disclosure regarding an overseas bank account, the court found no error in the trial judge's treatment of that matter given the state of the evidence. The court also upheld the trial judge's rejection of the husband's submission for weighting regarding a contribution to the welfare of the wife's children.

Allowing the appeal, the Full Court re-exercised the discretion of the court. The overall contributions to superannuation and non-superannuation assets were assessed at 76 per cent for the husband and 24 per cent for the wife, with a minor adjustment to the asset pool. The appropriate adjustment under section 75(2) factors was determined to be 6 per cent in favour of the wife. The court substituted new orders, including specific provisions for the division of the husband's superannuation entitlement and a payment of $313,827.00 to the wife, with provisions for sale of property in the event of default. The parties were granted liberty to file written submissions regarding the costs of the appeal.

Orders

Orders of the court

1.

That the appeal is allowed.

2.

That Order 6.1, 6.2 and 6.9 of the orders of the Honourable Justice Mushin of 6 March 2006 being orders pursuant to the “slip rule” amending orders of the Honourable Justice Morgan of 15 February 2006 be set aside and the following orders substituted in lieu:

6.1. In respect of the husband's superannuation entitlement with Colonial Superannuation Fund;

6.1.1 That in accordance with s 90MT(i)(a) of the Family Law Act 1975 (Cth) whenever a splittable payment is payable in respect of the superannuation interest of the husband in the Colonial Superannuation Fund the wife is entitled to be paid an amount calculated in accordance with the Family Law (Superannuation) Regulations 2001, using a base amount in the sum of $39,452.00 of the member entitlement and there be a corresponding reduction in the entitlement the husband would have had but for these orders.

6.1.2 That the operative time of these orders shall be 4 days after the service of the order upon the trustee.

6.1.3 This order binds the trustee or trustees from time to time of the Colonial Superannuation Fund.

6.2 That the husband pay to the wife within 60 days of the date of this order by bank cheque the sum of $313,827.00.

6.9 That if the husband shall default in payment of the sum of $313,827.00 or any part thereof then interest shall accrue thereon from the date of default until the date of payment at the rate prescribed by the Family Law Rules 2004 and if such default shall continue for a further period of 14 days then:

6.9.1 the first property shall be sold upon such terms and conditions as may be agreed and in default of agreement as may be ordered by this Honourable Court and the net proceeds shall be applied:

(a) as to the monies due and owing to the wife pursuant to these orders including interest to the wife; and

(b) the balance to the husband.

PROVIDED THAT if the net proceeds of sale of the said first property shall be insufficient to pay the wife her entitlements pursuant to these orders then

6.9.2 the second property shall be forthwith placed for sale upon such terms and conditions as the parties may agree and in default of agreement as may be ordered by this Honourable Court and the net proceeds of sale shall be paid as to:

(a) any balance due and owing to the wife pursuant to these orders to the wife; and

(b) the balance to the husband.

3.

The parties are at liberty to file written submissions with regard to the costs of the appeal in accordance with the following timetable:

(a) on behalf of the appellant within 21 days of the date hereof;

(b) on behalf of the respondent in response thereto within 21 days thereafter;

(c) on behalf of the appellant in reply thereto within seven days thereafter; and

(d) that each submission have endorsed on the cover sheet the date on which a copy of that submission was served on the other party.

Background

Background to the litigation

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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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