Shamon & Shamon
[2025] FedCFamC1A 150
•8 September 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Shamon & Shamon [2025] FedCFamC1A 150
Appeal from: Shamon & Shamon (No 14) [2024] FedCFamC1F 856 Appeal number: NAA 16 of 2025 File number: SYC 2375 of 2021 Judgment of: MCGUIRE, RIETHMULLER & CURRAN JJ Date of judgment: 8 September 2025 Catchwords: FAMILY LAW – APPEAL – PROPERTY – Liabilities from Tax Returns – Tax liability -Where the primary judge declined to include a tax liability in the balance sheet – where the appellant had disbursed funds rather than paying the tax
FAMILY LAW – APPEAL – PROPERTY – Valuation -Where the appellant sought the sale of his business – Whether the primary judge was required to order sale – Whether consideration of costs or potential CGT required
FAMILY LAW – APPEAL – PROPERTY – Whether the primary judge double counted business profits as both income of the appellant and when they formed the basis for the valuation of the business – Appeal dismissed
Legislation: Family Law Act 1975 (Cth) ss 75(2), 79, 81
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 6.01
Cases cited: Atkins & Hunt (2020) FLC 93-992; [2020] FamCAFC 252
Bennett and Bennett (1991) FLC 92-191; [1990] FamCA 148
Bevan & Bevan (2014) FLC 92-572; [2013] FamCAFC 116
Chang & SuS104/2002 [2002] HCATrans 549 (5 November 2002)
Chorn & Hopkins (2004) FLC 93-204; [2004] FamCA 633
Clauson & Clauson (1995) FLC 92-595; [1995] FamCA 10;
Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577; [2006] HCA 55
Cunningham v Cunningham (2005) FLC 93-212; [2005] FamCA 159
De Winter v De Winter (1979) FLC 90-605; (1979) 23 ALR 211
DL v The Queen (2018) 266 CLR 1; [2018] HCA 26
Elgin & Elgin (2015) 54 Fam LR 31; [2015] FamCAFC 155
Figgins & Figgins (2002) FLC 93-122; [2002] FamCA 688
Gronow v Gronow (1979) 144 CLR 513; [1979] HCA 63
Hayton & Bendle (2010) 43 Fam LR 602; [2010] FamCA 592
Hickey & Hickey & Attorney-General for the Commonwealth of Australia (2003) FLC 93-143; [2003] FamCA 395
House v The King (1936) 55 CLR 499; [1936] HCA 40
Lovine & Connor and Anor (2012) FLC 93-515; [2012] FamCAFC 168
Mallet v Mallet (1984) 156 CLR 605; [1984] HCA 21;
Mayhew & Fairweather (2022) 64 Fam LR 633; [2022] FedCFamC1A 53
McF & McF [2004] FamCA 139
Omacini & Omacini (2005) FLC 93-218; [2005] FamCA 195
R v Watson: Ex parte Armstrong (1976) 136 CLR 248; [1976] HCA 39
Re Bailey and Bailey (executrix of the estate of Bailey) (1990) FLC 92-117; [1989] FamCA 45
Rosati & Rosati (1998) FLC 92-804; [1998] FamCA 38
Royal Guardian Mortgage Management Pty Ltd v Nguyen (2016) 332 ALR 128; [2016] NSWCA 88
Samper & Samper (2021) FLC 94-041; [2021] FamCAFC 140
Semperton & Semperton (2012) 47 Fam LR 626; [2021] FamCAFC 132
Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSW LR 247
Stanford v Stanford (2012) FLC 90-518; [2012] HCA 52
Sun Alliance Insurance Ltd v Massoud [1989] VR 8
Trevi & Trevi (2018) FLC 93-858; [2018] FamCAFC 173
Trustee of the Property of G Lemnos, a Bankrupt & Lemnos & Anor (2009) FLC 93-394; [2009]; FamCAFC 20
U v U (2002) 211 CLR 238; [2002] HCA 36
Weir & Weir (1993) FLC 92-338; [1992] FamCA 69
Number of paragraphs: 125 Date of hearing: 4 June 2025 Place: Heard in Sydney, delivered in Hobart Counsel for the Appellant: Mr Williams KC Solicitor for the Appellant: Barkus Doolan Winning Counsel for the First Respondent: Mr Livingstone Solicitor for the First Respondent: LawBridge Lawyers & Consultants Solicitor for the Second Respondent: BF Lawyers Solicitor for the Third Respondent: Litigant in person (did not participate) Counsel for the Independent Children’s Lawyer: Ms Tabbernor Solicitor for the Independent Children’s Lawyer: Bleier Family Law and Mediation ORDERS
NAA 16 of 2025
SYC 2375 of 2021FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MR SHAMON
Appellant
AND: MS SHAMON
First Respondent
MR B SHAMON
Second Respondent
MS G SHAMON
Third Respondent
INDEPENDENT CHILDREN’S LAWYER
ORDER MADE BY:
MCGUIRE, RIETHMULLER & CURRAN JJ
DATE OF ORDER:
8 SEPTEMBER 2025
THE COURT ORDERS THAT:
1.The Amended Notice of Appeal filed 19 March 2025 is dismissed.
2.The appellant pay the first respondent’s costs in the sum of $16,618.42 within 28 days of the date of these orders.
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 of Shamon & Shamon has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
MCGUIRE & CURRAN JJ:
INTRODUCTION
By his Amended Notice of Appeal filed 19 March 2025 the husband (“the appellant”) appeals from final parenting and property orders of the primary judge sitting in Division 1 of the Federal Circuit and Family Court of Australia made 11 December 2024.
The wife (“the first respondent”) opposes the appeal.
Mr B Shamon, (“the second respondent”) who is the appellant’s brother, filed a Submitting Notice.
Relevantly, Ms G Shamon, (“the third respondent”) who is the appellant’s sister, has not participated in this appeal and did not participate actively in the trial before the primary judge.
The appeal in respect of parenting matters rested on one ground only, and shortly after the commencement of the hearing of the appeal on 4 June 2025, the parties agreed on the disposition of the parenting aspect of the appeal.
The appellant pursued six grounds of appeal in respect of the financial orders, being grounds 2 to 7 of the Amended Notice of Appeal, but where a number of grounds also include sub-grounds of complaint.
BACKGROUND
It is of assistance to give some background and context to the matters raised on the appeal.
The parties married in 2004. On 24 June 2020 the first respondent informed the appellant of her intention to separate.
The appellant is 46 years of age. He is an accountant/tax agent and operates his practice, BB Pty Ltd, through an umbrella of trusts and corporate entities but where the primary judge was satisfied, and it is not challenged on this appeal, that the entities were effectively the alter ego of the appellant.
The first respondent is 41 years of age. She is a homemaker with limited prior workplace participation.
The second respondent, the appellant’s brother, was employed in the appellant’s business for a period and a transaction of interest in the business took place but was subsequently reversed.
There are three surviving children of the appellant and first respondent now aged 17, 14 and seven years. They live with the first respondent. The older two children have the ability to spend time with the appellant but do not exercise that right. The youngest child spends supervised time with the appellant.
The first respondent commenced the proceedings by an application filed 1 April 2021 seeking orders pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”).
The trial was conducted over 12 days between 4 April and 4 October 2024. The primary judge’s reasons were delivered and orders made on 11 December 2024.
On 7 January 2025 the appellant filed a Notice of Appeal. An Amended Notice of Appeal was filed on 19 March 2025.
THE PRIMARY JUDGE’S DETERMINATION
At the commencement of the trial the primary judge was provided with a joint balance sheet, albeit clearly not agreed as to its content and value, as follows:
Ownership Description [First Respondent’s] value [Appellant’s] value ASSETS 1 [FR] D Street, Suburb F NSW[1] $ 418,000 $ 418,000 2 [FR] CBA, account # …76 $ 32 $ 32 3 [FR] CBA, account # …57 $ 2,457 $ 2,457 4 [FR] Westpac, account # …54 $ 875 $ 875 5 [FR] Westpac, account # …11 (previously …) $ 1,184 $ 1,184 6 [FR] Motor Vehicle 2 $ 16,000 $ 16,000 7 [FR] Household contents $ 12,000 $ 12,000 8 [FR] Gold and jewellery $ 17,000 $ 17,000 9 [A] CBA, account # …44 $ 821 $ 821 10 [A] CBA, account # …88 $ 8 $ 8 11 [A] CBA, account # …14 $ 0 $ 0 12 [A] Gold and jewellery $ 15,000 $ 15,000 13 J Monies in controlled monies account $ 90,859 $ 90,799 14 [FR] Shamon Fixed Trust $ 81,657 $ 68,579 15 [A] 100% ownership in T Pty Ltd $ 28,079 $ 28,079 16 [A] 100% interest in S Pty Ltd $ 42,000 $ 42,000 17 [A] Controlled Monies Account [third respondent] $ 252,672 $ 252,672 18 [FR] Units in Country UU $ - $ 199,764.96 Total $ 978,644 $ 1,165,272 ADDBACKS 19 [A] $560,000 retained by [third respondent] $ 560,000 $ - 20 [A] $170,000 transferred to V Pty Ltd and withdrawn in cash $ 170,000 $ - 21 [A] Refund to [A] $80,000 following sale of 5 units in V Trust to EE Trust in February 2021 $ 80,000 $ - 22 [A] $110,000 paid by [A] to Mr AV $ 110,000 $ - 23 [A] $50,000 paid to Ms C Shamon $ 50,000 $ - 24 [A] $145,000 paid to Mr AN $ 145,000 $ - 25 [A] Profits retained by [second respondent] from BB Pty Ltd $ 160,000 26 [FR] Litigation funding received from Orders dated 21.06.21 $ 83,423 $ 83,423 Total $ 1,358,423 $ 83,423 LIABILITIES 27 [FR] Mortgage on D Street, Suburb F NSW $ 58,231 $ 58,231 28 [A] Individual Tax Liability $ - $ 41,339 29 [A] Loan from Ms C Shamon $ - $ 159,991 30 [A] Loan from Mr AW $ - $ 52,000 31 [A] Loan from Mr AX $ - $ 110,000 32 [A] Loan from Mr AY $ - $ 20,000 33 [A] Loan from Mr GG $ - $ 120,000 34 [A] Outstanding spouse maintenance $ 59,325 $ 31,756 35 [A] [Appellant’s] outstanding cost order to [First Respondent] $ 15,000 $ 15,000 36 [FR] [First Respondent’s] outstanding cost order to [Appellant] $ 1,485 $ 1,485 37 [FR] 50% of family therapy owed to [Appellant] $ - $ 1,404 38 [A] Debt owing to [third respondent] $ 252,672 Total $ 134,041 $ 863,878 SUPERANNUATION Name of Fund 39 [A] Shamon Self-Managed Super Fund (as at 30.06.23) $ 90,103 $ 90,103 Total $ 90,103 $ 90,103 FINANCIAL RESOURCES 40 J Shamon Trust $ 659,656 $ - TOTALS NET TOTAL POOL INCLUDING SUPERANNUATION $ 2,293,129 $ 474,919 [1] (“The Suburb F property”).
(Footnotes omitted)
Each of the primary parties sought numerous and detailed orders before the primary judge, but based upon findings as to a number of substantial “add-backs” on the first respondent’s argument or, on the appellant’s argument, for the inclusion of asserted loan liabilities to family members.
At the trial the first respondent sought orders inter alia for her to retain the Suburb F property unencumbered and cash adjustments in her favour from various respondents in the alternative up to $600,000.
The appellant at trial sought to retain the Suburb F property subject to its mortgage and to retain all monies in a controlled monies account. He sought orders for the first respondent to resign from and/or transfer her interests in all corporate and trust entities to the appellant.
The primary judge determined the property pool, considered the parties’ contributions and subsequently assessed the contributions of the first respondent at 55 per cent of the pool. Her Honour then considered the matters arising under s 75(2) of the Act (Hickey & Hickey & Attorney-General for the Commonwealth of Australia (2003) FLC 93-143) and made a 25 per cent adjustment of the net property pool to the first respondent, resulting in the first respondent receiving 80 per cent of the net property pool, inclusive of superannuation, and the appellant receiving 20 per cent of the property pool.
Relevantly, to the appeal, the first respondent sought “add-backs” to the appellant’s side of the ledger on eight particulars totalling $1,358,423.
Also, the appellant sought the inclusion of a number of contentious liabilities in seven particulars totalling the sum of $716,067 and a tax liability of $41,339.
At [222] of the reasons the primary judge set out the matters requiring adjudication arising out of the balance sheet being:
222. …
(a)Does the [first respondent] have an interest in property in Country UU?
(b)What value should be attributed to the units in the Shamon Fixed Trust?
(c)What is the value of shares in BB Pty Ltd (“BB Pty Ltd”) to the Shamon Trust and should they be sold?
(d)The value of the Shamon Trust being agreed, is it an asset?
(e)Is any money owed to [the third respondent] by the [appellant]?
(f)Does [the third respondent] hold funds which should be returned to the [appellant], paid to the [first respondent] or otherwise taken into account?
(g)Has the [appellant] received premature distributions which should be added back or otherwise taken into account?
(h)Should [the second respondent] account to the [first respondent] for dividends paid to him by the Shamon Family Trust or in the alternative is there another approach which would ensure justice and equity as between the [appellant] and [first respondent]?
(i)Has the Shamon Fixed Trust received a further $80,000 (or is it entitled to receive a further $80,000) as a consequence of sale of units?
At [15] and following the primary judge identified this to be a matter where credit between the parties was relevant to the ultimate findings of fact and where the reasons disclose:
15.This is a case where it was necessary to consider whether there was a basis to prefer one party’s evidence over another party’s evidence in respect of key relevant financial disputes.
16. The [appellant’s] credibility was impugned in four identifiable ways which at times overlapped:
(1) Failure to make obvious concessions;
(2)Self-serving non-responsive answers at the expense of the [first respondent];
(3) Evasiveness in response to questions; and
(4) Inconsistencies between affidavit and oral evidence.
…
30.It follows from the above observations that where the evidence of the [appellant] and [the first respondent] was different I have preferred the evidence of the [first respondent] unless explicitly indicated or contradicted by documentary evidence.
Similarly, the primary judge recognises the relevance of disclosure to the determination of just and equitable orders, where at [221] the primary judge says:
221. …
(a)Have each of the parties made full and frank financial disclosure of their financial circumstances?
(b)If not – with what consequence/s?
At [228] the primary judge found:
228.There are two significant areas where the disclosure provided by [the appellant] has impeded a proper understanding of the parties’ (and in particular the [appellant’s]) financial position:
(1)The voluminous and inadequately explained transfers conducted by the [appellant] in his own name, that of BB Pty Ltd, the Shamon Fixed Trust, the V Trust, S Pty Ltd and the [appellant’s] siblings in the three years immediately post- separation discussed below; and
(2)The changes to the accounts of the V Trust and its impact on the value of the units in the Shamon Fixed Trust.
Within the context of the challenges made to the primary judge’s orders, it is relevant to note that rule 6.01 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) provides a general duty of disclosure. If a party is found to have failed to have made full and frank disclosure, it is well-settled that the Court need not be unduly cautious about making findings of fact in favour of the other party or to make orders going beyond the identified property (Weir & Weir (1993) FLC 92-338). Such a failure by a party to make the disclosure obligations may allow the Court to draw adverse inferences against the non-discovering party. In Chang v SuS104/2002 [2002] HCATrans 549 (5 November 2002), a special leave application to appeal to the High Court, Callinan J observed:
It does not matter what the principle might be seen to be; a court has to do the best it can. It does the best it can, having regard to the evidence that is adduced and if the parties are not frank then naturally there is going to be a measure of imprecision about any findings that the court can make.
Against this background and within this context, the primary judge undertook a detailed forensic examination of the evidence to establish the property pool, but with focus on the first respondent’s argument for add-backs to the pool. Where in respect of the claimed loan liabilities in the balance sheet the primary judge says at [387] and where no challenge is made on this appeal, the primary judge found:
387.The [appellant] made no submissions to the effect that I should include the various loans he has obtained from family members (Items 28-33 on the Joint Balance Sheet) and I do not propose to do so.
At [254] the primary judge identified two substantial uncontroversial transactions which occurred in the days following the parties’ separation on 30 June 2020 being:
254. …
(a)The [appellant] withdrew $400,000 from the parties’ mortgage on 8 July 2020.
(b)BB Pty Ltd declared an unprecedented dividend in favour of the Shamon Trust in the sum of $958,000 (or $910,000)... .
(c)The Shamon Trust made unprecedented distributions which totalled $958,000.
(d)The [appellant’s] sister received at least $1,400,000 by cheque from BB Pty Ltd.
At [255] the primary judge makes a finding that the transactions were a deliberate attempt by the appellant to remove funds from the asset pool available to the parties for distribution and thereby rejected the appellant’s explanations as being withdrawals or distributions necessary to extinguish debt. No challenge is made here against that finding.
Importantly for this appeal, whilst the primary judge preferred the first respondent’s evidence and argument in respect of various withdrawals or advancements made by the appellant and rejected the appellant’s arguments as to the asserted liabilities, the primary judge did not make “add-backs” to the property pool as argued by the first respondent. However, with references to the authority (Trevi & Trevi (2018) FLC 93-858 at [30]), the primary judge noted that an add-back of “notional property” is to be exceptional (Omacini & Omacini (2005) FLC 93-218 at [39]) and determined in the circumstances of this case and within her discretion to deal with each particular finding under s 75(2)(o) of the Act.
It followed that the primary judge then determined at [397] the property pool to be as follows:
Property, superannuation and liabilities
Ownership Description Value ASSETS 1 [FR] D Street, Suburb F NSW $418,000 2 [FR] CBA, account # …76 $32 3 [FR] CBA, account # …57 $2,457 4 [FR] Westpac, account # …54 $875 5 [FR] Westpac, account # …11 (previously …) $1,184 6 [FR] Motor Vehicle 2 $16,000 7 [FR] Household contents $12,000 8 [FR] Gold and jewellery $17,000 9 [A] CBA, account # …44 $821 10 [A] CBA, account # …88 $8 12 [A] Gold and jewellery $15,000 13 J Monies in controlled monies account $90,859 14 [FR] Shamon Fixed Trust $68,579 15 [A] 100% ownership in T Pty Ltd $28,079 16 [A] 100% interest in S Pty Ltd $42,000 17 [A] Controlled Monies Account [third respondent] $252,672 39 [A] Shamon Self-Managed Super Fund (as at 30.06.23) $90,103 40 J Shamon Trust (owner of shares BB Pty Ltd) $659,656 Total $1,715,325 ADDBACKS 26 [FR] Litigation funding received from Orders dated 21.06.21 $83,423 Total $83,423 LIABILITIES 27 [FR] Mortgage on D Street, Suburb F NSW $58,231 Total $58,231 NET TOTAL POOL INCLUDING SUPERANNUATION $1,740,517
The primary judge determined that the notional property pool (after adding back expenses for litigation funding) was $1,740,517. Her Honour assessed the parties’ contributions at 55/45 in favour of the first respondent. After considering the matters arising under s 75(2) of the Family Law Act 1975 (Cth) (which included premature distributions to the appellant of over $1.358m) the primary judge made an adjustment of 25 per cent in favour of the first respondent, resulting in the first respondent receiving 80 per cent of the notional property pool and the appellant receiving 20 per cent of the property pool. This resulted in the first respondent receiving around $1,392,414 and the appellant around $348,103 from the property that was available after the premature distributions the appellant had made.
THE APPEAL
Although the appellant argues six grounds of appeal, grounds 5(a) and 5(b) appear to allege a failure by the primary judge to afford procedural fairness to the appellant and is it is therefore appropriate and necessary to deal with those grounds first as any finding on that point in favour of the appellant would be dispositive of the appeal (Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577 at [117]; Royal Guardian Mortgage Management Pty Ltd v Nguyen (2016) 332 ALR 128 at [9]).
Ground 5: That her Honour erred in failing to conclude that the monetary adjustment that she proposed to order in favour of the respondent would inevitably or at least most probably require a sale of property of the appellant, thus crystalising an obligation to pay taxation and realisation costs in which event her Honour ought have:
(a) provided notice to the appellant of the likely order and offer him an opportunity to address how it might be satisfied in order that the economic consequences might be taken into account and thereby her Honour’s Orders occasioned a procedural unfairness; or
(b) made a formulaic order, or invited the parties to draft a formulaic order, which would take into account taxes and realisation costs in respect of such property as the appellant may elect to sell to satisfy the Order so as to take into account those amounts whilst retaining the integrity of the intended percentage division of the net property of the parties
The appellant argues that he had at all times sought a sale of BB Pty Ltd and that the first respondent proffered a form of order which included the sale as an alternative. The argument continues on the premise of there being a necessity for sale of that asset and that the primary judge brought an unfairness to the appellant by firstly not ordering the sale of the asset and, secondly, by not inviting submissions as to a formulaic order which would provide integrity to the property pool by taking into account the costs and tax ramifications of that sale.
The force of the appellant’s argument sits with the view of the Full Court in Rosati & Rosati (1998) FLC 92-804 (“Rosati”) and later endorsed by the Court in Lovine & Connor and Anor (2012) FLC 93-515 at [122] and Elgin & Elgin (2015) 54 Fam LR 31. In Rosati at [6.36] the Full Court observed:
6.36It appears to us that although there is a degree of confusion, and possibly conflict, in the reported cases as to the proper approach to be adopted by a court in proceedings under s.79 of the Act in relation to the effect of potential capital gains tax, which would be payable upon the sale of an asset, the following general principles may be said to emerge from those cases:-
(1)Whether the incidence of capital gains tax should be taken into account in valuing a particular asset varies according to the circumstances of the case, including the method of valuation applied to the particular asset, the likelihood or otherwise of that asset being realised in the foreseeable future, the circumstances of its acquisition and the evidence of the parties as to their intentions in relation to that asset.
(2)If the Court orders the sale of an asset, or is satisfied that a sale of it is inevitable, or would probably occur in the near future, or if the asset is one which was acquired solely as an investment and with a view to its ultimate sale for profit, then, generally, allowance should be made for any capital gains tax payable upon such a sale in determining the value of that asset for the purpose of the proceedings.
(3)If none of the circumstances referred to in (2) applies to a particular asset, but the Court is satisfied that there is a significant risk that the asset will have to be sold in the short to mid term, then the Court, whilst not making allowance for the capital gains tax payable on such a sale in determining the value of the asset, may take that risk into account as a relevant s.75(2) factor, the weight to be attributed to that factor varying according to the degree of the risk and the length of the period within which the sale may occur.
(4)There may be special circumstances in a particular case which, despite the absence of any certainty or even likelihood of a sale of an asset in the foreseeable future, make it appropriate to take the incidence of capital gains tax into account in valuing that asset. In such a case, it may be appropriate to take the capital gains tax into account at its full rate, or at some discounted rate, having regard to the degree of risk of a sale occurring and/or the length of time which is likely to elapse before that occurs.
(Emphasis in original)
Nevertheless, the lack of procedural fairness argument mounted here, on careful reading of the ground of appeal, is clearly premised on an argument of error by the primary judge in failing to conclude that the monetary payment ordered to be made by the appellant to the first respondent “would inevitably or at least most probably require a sale of property of the appellant, thus crystallising an obligation to pay taxable and realisation costs”.
This therefore is a challenge to a finding of fact made by the primary judge within her discretion. If no error is identified in that sense, then the issue of procedural fairness in seeking evidence or a formulaic order in respect of the realisation costs is redundant.
It is convenient, therefore, and in respect of discretionary judgments, to consider the observations made in House v The King (1936) 55 CLR 499 (“House v The King”) at 504-505:
… It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred. …
Further, unreasonableness or injustice must be so plain that the appellate court finds a substantial wrong to have occurred. In Gronow v Gronow (1979) 144 CLR 513 (“Gronow v Gronow”), Stephen J emphasised at 519-520:
The constant emphasis of the cases is that before reversal an appellate court must be well satisfied that the primary judge was plainly wrong, his decision being no proper exercise of his judicial discretion. While authority teaches that error in the proper weight to be given to particular matters may justify reversal on appeal, it is also well established that it is never enough that an appellate court, left to itself, would have arrived at a different conclusion. When no error of law or mistake of fact is present, to arrive at a different conclusion which does not of itself justify reversal can be due to little else but a difference of view as to weight: it follows that disagreement only on matters of weight by no means necessarily justifies a reversal of the trial judge. Because of this and because the assessment of weight is particularly liable to be affected by seeing and hearing the parties, which only the trial judge can do, an appellate court should be slow to overturn a primary judge’s discretionary decision on grounds which only involve conflicting assessments of matters of weight…
Within the context of the consideration in Rosati above, the primary judge did not order the sale of an asset. The primary judge was not satisfied that a sale of an asset was inevitable or would probably occur in the near future. It is clear that the asset was not acquired solely as an investment with a view to its ultimate sale for profit. The primary judge was not satisfied that there was a significant risk that the asset would need to be sold in the short to mid-term.
At [406] the primary judge, in considering s 75(2) factors, summarised her forensic investigation and made unchallenged findings of fact contrary to the appellant as to premature distributions made in his or his family’s favour as follows:
406.Also highly significant are my findings about the amounts which the [first respondent] sought be added back. As indicated, I propose to take some [of] those funds into account as premature distributions in favour of the [appellant] when I consider what further adjustment is warranted pursuant to s 75(2) of the Act. The quantum is not precise, but the sums paid to the [appellant] or at his direction are very significant when seen in the context of the pool available to the parties now. As indicated above, the two most significant transactions which have had an impact on the pool were the trust distributions of $958,000 and withdrawal of $400,000 from the mortgage over the former matrimonial home. …
At [ 413] the primary judge relevantly accepted that the appellant “may” be required to realise assets to settle the cash adjustment on the first respondent of $487,564. However, specifically the primary judge did not find a sale “necessary”. At [413] the primary judge says:
I accept that that may require the [appellant] to realise assets. The [appellant’s] application sought orders for sale of the shares in BB Pty Ltd. I do not propose to make that order – nor do I consider that a sale is necessarily required in order to enable the [applicant] to make the payment which I propose to order. I take that view because of my findings about the manner in which the [appellant] transferred his funds to family members after separation. I accept that if the [appellant] does realise assets to make a payment then there may be costs associated with that realisation but I do not propose to make a specific allowance for them for two reasons: firstly, because as earlier noted, I am not satisfied that sale is required. …
(Emphasis added)
We are of the view that the primary judge’s reasons must be read holistically and contextually with an eye to the ultimate requirement for justice and equity in orders made pursuant to s 79 of the Act. In Mallet v Mallet (1984) 156 CLR 605 at 79,111, Gibbs CJ said:
…It is necessary for the Court, in each case, after having regard to the matters which the Act requires it to consider, to do what is just and equitable in all the circumstances of the particular case.
The primary judge, in exercising their discretion, must be satisfied that the actual s 79 order itself is just and equitable and not just the underlying percentage division (Figgins & Figgins (2002) FLC 93-122 at 89,300 per Nicholson CJ and Buckley J).
As is clear from [413] the primary judge did turn her mind as to the costs of sale should the appellant sell assets to settle the cash payment to the first respondent, and as to who should bear those costs of sale.
The primary judge concluded that the appellant divested himself of large sums of money at [337], [344], [351], [370], [406] and [413] and such conclusions sit at the crux of her Honour’s consideration and findings.
It follows from the primary judge’s findings that the appellant should or did have available to him those monies. That is, had he not made those advancements then he would have been in funds to settle upon the first respondent. Therefore, it is the appellant’s conduct, and the primary judge’s findings accordingly, that visits upon him the risk that he may need to sell an asset to settle upon the first respondent. It is difficult to imagine then that the first respondent should or ought to bear the consequential costs or losses of such sale. That is, to find that the appellant has deliberately divested himself of assets or funds that would have been available to him to settle upon the first respondent, which then within the primary judge’s discretion were not “added back” to the pool but dealt with pursuant to s 75(2)(o), thereby giving a diminished “property pool” and then to encumber the first respondent with the ramifications of the appellant’s unilateral behaviour would be perverse to the fundamental notions of justice and equity.
A further difficulty with the appellant’s argument in this respect is that there was no evidence led as to the likely sale costs and the evidence that was led as to potential capital gains tax liability (if there was a sale) was not such as to enable the primary judge to be satisfied of the likely liability. As her Honour said at [246]:
The single expert report and cross-examination of the single expert was singly unhelpful. The single expert plainly confused the Shamon Trust with the Shamon Fixed Trust amongst other issues. The expert was not assisted in the task by the fact that the [appellant] did not provide the valuer with up-to-date financials for some of the entities.
It follows, therefore, that we find no error in the primary judge’s exercise of discretion in concluding that there was no necessity for the sale of an asset to give effect to the cash payment required by her orders.
There was no failure to afford the appellant procedural fairness (as referred to in Ground 5) as the appellant was on notice that the sale of the business was opposed because the first respondent sought orders for the payment of a sum of money and not the sale of the business, as the primary judge recounted at [416].
For these reasons Ground 5 of the appeal must fail.
Ground 2: That the primary judge erred in the identification of the parties’ property by failing to include the appellant’s liability to the taxation office
We identify this as a discrete argument that the primary judge erred in not including the appellant’s personal taxation liability in the property pool as a matrimonial debt. Any argument that the primary judge should have included the liability in the general considerations as to adjustment under s 75(2)(o) of the Act is dealt with later in this appeal.
The primary judge identified the appellant’s debt to the Australian Taxation Office as of the date of the trial at $41,398.58, after adjustments for a refund, some small payments, and interest, and for the year ending 30 June 2020.
At [384] the primary judge correctly recognised that, as a general rule, it is appropriate to have regard to all of the assets and liabilities of the parties in the first step of the consideration process in determining the property pool and its value.
At [385] the primary judge noted the evidence of the assessment for tax payable for the year ended 30 June 2020 at $41,870 later adjusted by receipt of a refund, some small payments, and interest, to $41,398.58 as at the trial date.
The primary judge determined not to include the appellant’s taxation liability and gave reasons at [386]:
I accept the liability exists and is referable to pre-separation income from which the [first respondent] would have derived a benefit. The [appellant] does not give any evidence to explain why he has not paid his debt and let it accrue interest. His own affidavit evidence is replete with uncontroversial evidence that he has had funds sufficient to meet this debt. While the [appellant] will remain responsible for payment of the debt, I do not propose to include it in the calculation of the net assets available for adjustment, consistent with the principles in In the Marriage of Af Petersons (1981) FLC 91-095.
Those reasons enlarge upon a statement made by the primary judge at [323]:
As to the monies distributed to the [third respondent], the [appellant] characterised it as a gift. This is significant if the Court is considering the consequences of the [appellant’s] post-separation financial conduct to the justice and equity of the ultimate adjustment of assets. To pay more than $140,000 to a sibling by way of gift while neglecting, for example to pay income tax, makes no sense.
Relevantly, at [386], the primary judge found the liability existed and was referable to pre-separation income from which the first respondent would have derived a benefit.
The appellant’s argument can be summarised as, firstly, the debt being included in the balance sheet provided to the primary judge at the commencement of the trial was a concession by the first respondent as to both its existence and its quantum. The appellant then argues that the primary judge’s discretion not to include the debt in the property pool is not accompanied by reasons, or sufficient reasons, such to “constitute a principled basis for its rejection, particularly where the finding was made that the debt was referable to pre-separation income from which the first respondent had derived a benefit”.
The primary judge did not depart from the two facts conceded: that the tax debt existed and its quantum. The real issue was how the debt should be taken into account in determining the property settlement orders, which was in contest in the proceedings (see the transcript from 4 October 2024 at page 87 where counsel for the first respondent accepts the quantum of the tax debt but maintains that it is the appellant’s personal debt and at 108.30 et seq where it was the subject of discussion between the primary judge and the appellant’s counsel). As a result, the first part of the argument under this ground cannot succeed.
The second argument challenges the adequacy of the primary judge’s reasons. The obligation to provide reasons is well established as identified by the Full Court in Bennett and Bennett (1991) FLC 92-191 (“Bennett”) where the Court noted at 78,267 in respect of adequacy of reasons that an “appellate Court should be able to discern either expressly or by implication the path by which the result is been reached”. Nevertheless, reasons for judgment will not be deemed inadequate simply because they fail to undertake “a minute explanation of every step in the reasoning process that leads to the judge’s conclusion” (DL v The Queen (2018) 266 CLR 1; Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSW LR 247). The test for adequate reasons is succinctly and practically put by Gray J in Sun Alliance Insurance Ltd v Massoud [1989] VR 8 at 18 where his Honour said:
The adequacy of the reasons will depend upon the circumstances of the case. But the reasons will, in my opinion, be inadequate if:-
(a)the appeal court is unable to ascertain the reasoning upon which the decision is based; or
(b) justice is not seen to have been done.
The two above stated criteria of inadequacy will frequently overlap. If the primary Judge does not sufficiently disclose his or her reasoning, the appeal court is denied the opportunity to detect error and the losing party is denied knowledge of why his or her case was rejected.
There is an accepted process of consideration for the Court in dealing with matters under s 79 of the Act to firstly establish the contents of the property pool where property includes both assets and liabilities and then to attribute value to those particular assets and liabilities and hence to the property pool itself. Nevertheless, it is well-established that the discretion conferred in s 79 of the Act is a broad one permeating each stage of the consideration (De Winter v De Winter (1979) FLC 90-605) but must be one exercised in accordance with legal principles and read within the context of the Act a whole (R v Watson: Ex parte Armstrong (1976) 136 CLR 248 at [257]). The Court’s discretion is not without limitation and an order must not be made unless it is just and equitable to alter the legal and equitable interests of the parties (s 79(2)–(4); Stanford v Stanford (2012) FLC 90-518). Further, it is not for a primary judge to be confined only to considerations of the proposals advanced by each of the parties (U v U (2002) 211 CLR 238).
More generally, it is proper to observe that a convenient practice of trial judges has developed over the years in crystallising the value of a property pool by deducting the value of liabilities from the value of assets. However, the Full Court on a number of occasions has also emphasised that this is not a binding rule or principle (Re Bailey and Bailey (executrix of the estate of Bailey) (1990) FLC 92-117 at 77,774). That is, merely because a taxation debt accrued prior to separation does not mandate it being brought to account as a joint matrimonial liability (Chorn & Hopkins (2004) FLC 93-204 at [71]). To create such a principle would leave open between separation and trial the opportunity for a party to organise or manipulate finances to maximise liabilities in the hands of one party and not to give justice between the parties (Trustee of the Property of G Lemnos, a Bankrupt & Lemnos & Anor (2009) FLC 93-394). Consequently here, by neither statute nor authority was the primary judge mandated to treat the appellant’s taxation liability as a liability of the marriage. Rather the exercise was one of discretion.
We are of the view that the primary judge’s reasons are clear, direct, and identifiable. At [386] the primary judge states:
I accept the [tax] liability exists and is referable to pre-separation income from which the [first respondent] would have derived a benefit. The [first respondent] does not give any evidence to explain why he has not paid his debt and let it accrue interest. His own affidavit evidence is replete with uncontroversial evidence that he has had funds sufficient to meet this debt. While the [appellant] will remain responsible for payment of the debt, I do not propose to include it in the calculation of the net assets available for adjustment, consistent with the principles in In the Marriage of Af Petersons (1981) FLC 91-095.
Similarly, at [323] the primary judge comments:
As to the monies distributed to the [third respondent], the [appellant] characterised it as a gift. This is significant if the Court is considering the consequences of the [appellant’s] post-separation financial conduct to the justice and equity of the ultimate adjustment of assets. To pay more than $140,000 to a sibling by way of gift while neglecting, for example to pay income tax, makes no sense.
The primary judge makes findings of fact to the effect that the appellant had the ability to meet the taxation debt between separation and the trial date and chose not to use monies available to him to do so. This was during a period when the first respondent also made contributions by continuing to meet her child rearing obligation following separation. The appellant did not himself give any justification for not meeting the debt earlier. Her Honour did not ignore the debt, rather, she was not satisfied that it should be deducted from the assets of the parties in the circumstances of the case. As liabilities are not “property” of a debtor their inclusion in the balance sheet must rely upon s 75(2)(o) and thus it was for the appellant to persuade the primary judge that the liability should be included in the balance sheet or otherwise taken into account. It was open to the primary judge to conclude that in the circumstances of this case it was not appropriate to take this debt into account. We are not persuaded that the primary judge has given insufficient reasons for her decision.
We find, therefore, that Ground 2 is not made out.
Grounds 3: That her Honour’s discretionary decision miscarried as a consequence that on the facts determined by her Honour, the result embodied in the Orders was manifestly unjust, particularly in determining there should be an adjustment of 25% in favour of the respondent as a consequence of the fact[s] as addressed in s 75(2) of the Family Law Act 1975 (Cth)
This ground was not developed further either on the appellant’s written or oral submissions. It was, however, not specifically abandoned and we deal with it in these reasons.
First, this is a complaint as to weight and the observations of the High Court in Gronow v Gronow, set out above are relevant.
The primary judge determined that the notional pool of assets was $1,740,517 (at [97]). The primary judge then turned to assess the parties’ contributions, which her Honour found equivalent during the relationship, but noted that the first respondent had undertaken the majority of parenting in the two and a half years leading up to trial. Her Honour assessed contributions as 55/45 in favour of the first respondent. The contributions assessment was not challenged on the appeal.
The primary judge then turned to address the factors arising pursuant to s 75(2). The primary judge properly took a holistic rather than mathematical approach. Her Honour made findings available to her that the appellant was not exercising his pre-separation earning capacity and that he would have a significantly greater income than the first respondent in the foreseeable future (at [402] and [404]). The primary judge also properly took into account the child support payable by the appellant, noting however, that he would have the expense of supervision for his time with the youngest child but also where the children would live primarily with the first respondent.
The primary judge had made a number of findings in favour of the first respondent’s argument that the appellant had divested himself of significant funds but permissibly determined to deal with them under s 75(2)(o) of the Act which considers “any fact or circumstance which in the opinion of the court, the justice of the case requires to be taken into account” rather than by the first respondent’s preferred method of “add-backs”. Specifically, the primary judge identified two particularly significant transactions by the appellant in quantums of $958,000 and $400,000 as premature distributions made in favour of the appellant or at his direction.
The primary judge then identified the relevance of the modest property pool available for distribution, again noting that she had not acceded to the first respondent’s primary argument for “add-backs”. Relevantly, the Full Court Clauson & Clauson (1995) FLC 92-595 at 81,912 recognised that:
There is, we think, at times a tendency to assess s. 75(2) factors in percentage terms without considering its real impact, and we think there is legitimacy in the views expressed in more recent times that the Court has tended to operate in this area within artificially delineated boundaries. That is, it appears almost to be inevitable that the s. 75(2) factors will be assessed in a range between 10% and 20%. A number of cases will justify an assessment outside those parameters and in any event it is the real impact in money terms which is ultimately the critical issue.
The primary judge finds the property pool to be of a relatively modest net value of $1,740,517 inclusive of the appellant’s self-managed superannuation entitlement of $90,103. The factors favouring an adjustment to the first respondent weighed heavily and the primary judge concluded that a 25 per cent adjustment was appropriate, which in dollar terms was $435,129. The primary judge properly identified the exercise to be one of an adjustment being in the form of a real impact in money terms.
The adjustment pursuant to s 75(2) resulted in the first respondent receiving 80 per cent of the notional pool of assets of $1,740,517. However, that still only resulted in the first respondent retaining property valued at $1,392,414 – barely more than the premature distributions of the appellant which were not included in the property pool. It cannot be said that the exercise of the discretion of the primary judge was legally unreasonable.
In all of those circumstances we are not persuaded that the exercise of the discretion of the primary judge was such as to make it unreasonable in the sense discussed in House v The King.
This ground of appeal must therefore fail.
Ground 4: the primary judge’s discretion miscarried in failing to take into account relevant facts, and making erroneous findings of facts in considering factors relevant to s 75(2) in: …
The appellant argues this ground on a number of particulars.
Generally, in respect of this ground the observations of the High Court in House v King are directly relevant. This is an exercise of discretion. The appellant must show the primary judge to have acted on a wrong principle; taken into account extraneous or irrelevant matters; made a mistake in finding of fact; or not take into account a material consideration for the judgment to be impugned.
PARTICULARS OF COMPLAINT
Ground 4(a) that the property the appellant would retain was subject to uncrystallized burden of future taxes and realisation costs, and that the respondent’s property was not the subject of any such burden and, further her Honour failed to take into account the existence of such burden and her determination not to take those matters into account at all constituted both an error of discretion and principle
Where the primary judge did not include any costs of realisation of an asset in the hands of the appellant as a reduction in the value of the asset, the appellant argues that such realisation costs could and should have been taken into account in the myriad of matters available to the primary judge in making a determination as to adjustment to either party under s 75(2) of the Act.
The rationale of the appellant’s argument is effectively the same as that mounted at Ground 5 of the appeal and disposed of above. Again, the argument is grounded on the primary judge’s finding that a sale of the particular asset was not “necessary” and that finding in itself arises from the primary judge’s findings that the appellant had divested himself of significant funds between separation and the trial, thereby creating for the appellant an argument as to the sale of assets being “necessary” to fund the cash adjustment ordered upon the first respondent. To effectively burden the other party with the costs and taxes by reason of sale of that asset would be unreasonable in the context of this case.
Put simply, the costs and taxes of realisation are only considered if the sale of the asset is deemed necessary, inevitable, or a significant risk of happening. The primary judge made none of these findings. The appellant acted unilaterally in reducing the property pool. Should his actions result in the sale of remaining assets incurring costs and where he would otherwise have had funds available to him, then to visit those costs on the other party, either as a tangible liability to the property pool or as a s 75(2)(o) factor favourable to the party disposing of the asset, would be to bring an injustice to that other party.
This ground also confronts the difficulty (also discussed at Ground 5) that there was no evidence led as to the likely sale costs and the evidence that was led as to potential capital gains tax liability (if there was a sale) was not such as to enable the primary judge to be satisfied of the likely liability.
Accordingly, this sub-ground of appeal must fail.
Ground 4(b)(i) substantially the earning capacity of the appellant had already been taken into account by being given a substantial capital value as attributed to his business interests as an item of property; and
Kings counsel for the appellant argues here that the primary judge failed to take into account a material consideration. The methodology of valuation by the expert, adopted by the primary judge, of BB Pty Ltd was the “market approach” rather than other options. It is argued that in accepting this methodology and ultimately the value for the business, the primary judge failed to recognise that this method takes into account a number of years of future income of the appellant. For the primary judge then to consider any disparity of income under s 75(2)(o) of the Act, it is argued, effectively “double dips” on the appellant’s income. Unfortunately, the court received no assistance from the first respondent’s counsel who failed to even address these issues in his Summary of Argument.
The primary judge made a finding as to value of the business, BB Pty Ltd. To do so the primary judge accepted a proffered valuation methodology and there is no specific challenge as to this finding or methodology on this appeal. That the valuation method capitalises a process of a number of years income simply gives a factor of the methodology to the valuation of the asset. If the asset is to be sold, then the expectation is that it achieves that value. By this process the primary judge determines the values of the assets and liabilities for the property pool being a function of the first step in the process.
Potential double counting due to valuation of businesses has been the subject of a number of decisions of the Full Court: McF & McF [2004] FamCA 1309 at [18]; Cunningham v Cunningham (2005) FLC 93-212 at [3]; Atkins & Hunt (2020) FLC 93-992 at 80,089; and Samper & Samper (2021) FLC 94-041 at [71]. The potential for double counting also arises in cases where a party receives a pension or annuity if it is included in the asset pool and the party’s income stream is also used as a factor pursuant to s 75(2): see, for example, Mayhew & Fairweather (2022) 64 Fam LR 633 (“Mayhew & Fairweather”) and Semperton & Semperton (2012) 47 Fam LR 626 (“Semperton & Semperton”). However, there may be situations “where the nature of the property to be retained by one of the parties has a quality about it which is not accurately reflected in the value ascribed” or where “there was some aspect of the entitlement that had not already been taken into account when assigning it a value” (Semperton & Semperton at [146] and [148], as quoted with approval in Mayhew & Fairweather at [21]), for example see Hayton & Bendle [2010] FamCA 592 at [193]).
In situations where an income stream forms all or part of the value of an asset (and is therefore accounted for in the valuation) care must be taken not to double count that income by taking it into account again as income of a party pursuant to s 75(2). Generally, a business valuation proceeds on the basis of the profits after the costs of running the business. Those costs will usually include a manager. It is the notional manager’s salary that represents the personal income of a party who is running a business and the profits beyond that (together with the assets of the business) which form the basis of the assessment of the value of the business.
The appellant complains that the “income and dividends or distributions” the appellant would receive from the business “in addition to” his salary were already taken into account in determining the value of the business. Thus, the appellant argues, the primary judge has “double counted” the business profits by relying upon them as the basis for the capital value of the business and relying upon the profits again as income of the appellant for s 75(2).
The primary judge was alive to these issues, saying from [402] to [404]:
402.The [appellant] is a self-employed accountant. His declared income is low. I do not accept that he is presently exercising his pre-separation earning capacity. …
403.The [first respondent] is a homemaker with limited previous workforce participation.
404.Based on the level of the [appellant’s] income in the lead up to separation, it would be anticipated that he will have a significantly greater income than the [first respondent] for the foreseeable future. I note that in addition to income and dividends or distributions, the [appellant] has benefits of employment not available to the [first respondent] such as provision of a car and payment for a phone.
Her Honour did not take into account the total earnings of the business as the appellant’s income, but used the appellant’s “income in the lead up to separation” as the measure of his income earning capacity: during that period he was paid a salary by the business and the balance of the earnings of the business distributed through a trust structure as noted by her Honour (at [312] to [319]): for example, in the 2020 financial year he was paid a salary of $156,000 and received a dividend of $160,000. The primary judge also notes, in [404], the benefits that the appellant will receive by way of “a car and payment of a phone” that would be incidents of employment remuneration. When reading [404] in context, it does not appear that her Honour was taking into account the profits of the business (after payment of the appellant’s salary) as income of the appellant for s 75(2)(b).
This reading of the judgment is also supported by the amount of the adjustment made under s 75(2). The adjustment was 25 per cent, resulting in the first respondent receiving an extra 50 per cent of the pool of $1,740,517. That is an additional $870,258.50. When the effect of this adjustment is compared to the amount of premature distributions (over $1,358,000), it cannot be the case that her Honour also took the business profits into account as income of the appellant.
The appellant has not shown that the primary judge erred in this regard and thus, is unable to succeed on this sub-ground of appeal.
Ground 4(b)(ii) recognising the appellant would have to realise assets to effect the payment to the respondent, and that the business interests (BB Pty Ltd) was the only relevant source capable of doing so, but through which the appellant derived his income, her Honour failed to recognise or find that any such sale would materially affect his earning capacity;
As with Grounds 4(a) and 5, this argument is premised on the claim that the appellant would by necessity have to realise assets, or specifically the BB Pty Ltd business, to effect the payment on the first respondent.
Specifically, the primary judge found that such a sale was not “necessary”. The argument of the appellant that follows then fails as to the premise being factually incorrect. Consequently, the primary judge found at [404] that: “Based on the level of the [appellant’s] income in the lead up to separation, it would be anticipated that he will have a significantly greater income than the [first respondent] for the foreseeable future …”. This finding is one that was available to the primary judge on the evidence. Even if the business were sold, there was no reason to conclude that the income he had been paid in the business did not represent the market rate for an accountant of his capacity and experience (including a Masters degree from BG University obtained in 2012). It was open to the primary judge to consider the income the appellant had been paying himself in the business represented a reasonable salary for a person of his capacity.
We find, therefore, that this sub-ground of appeal must fail.
Ground 4(c) inter-relatedly to (b)(ii), failed to recognise that the respondent’s retention of units in the Shamo Fixed Trust provided an ongoing source of income such that, concomitantly, her Honour failed to find that any disparity on account of earning capacity was at least neutral or unable to be determined on the evidence, and failed to give any or any adequate reasons in respect of same; and
The law relating to the obligation to provide reasons is discussed above at [61]. The reasons are adequate if an appellate court and a party are able to discern, expressly or impliedly, the course of reasoning towards a finding of fact.
The first respondent retained a small minority interest in a commercial property (held through a Unit Trust) which the primary judge found had a value of $68,579 in [397]. Her Honour addressed the dispute between the parties as to whether the value of this interest should be valued at around $81,000 or around $68,000 at [247].
Specifically, at [419] the primary judge does recognise that the first respondent retains an income producing asset namely units in the Shamon Fixed Trust. For the reasons set out with respect to Ground 4(b)(i), the primary judge did not err by failing to take account of the income generated by this asset as that income was necessarily a factor in the valuation of the asset. To take it into account pursuant to s 75(2) would have been double counting. Consequently, there was no error in the reasoning of the primary judge in this respect.
Therefore, we find no error or failure to take into account a relevant fact and the sub-ground must fail.
Ground 4(d) (only if ground 2 is rejected) failing to take into account as a relevant sec 75(2) consideration that the appellant had an extant liability to the ATO.
The primary judge found the appellant has or had a personal liability to the Australian Taxation Office of $41,398.58 but also found and reasoned that the appellant had gifted $140,000 to his sister whilst neglecting to pay the tax debt (at [323]).
Whilst the primary judge did not include the debt to the Australian Taxation Office as a liability of the marriage, the appellant argues that it remains, in any event, a relevant consideration under s 75(2) where the appellant has the liability and where the liability referenced pre-separation income.
Firstly, the process of adjustment under s 75(2) is not a mathematical one but more a holistic one as evidenced by the primary judge’s observations and comments at [406].
Secondly, the primary judge’s findings were fundamentally that the appellant had funds with which to meet the Australian Taxation Office debt. He prioritised other advancements, gifts and distributions over that debt where the tenor of the primary judge’s findings at [386] was that the appellant did so to diminish the property pool.
The process of consideration under s 75(2) is discretionary, the primary judge was not obliged to make an adjustment based on the appellant’s liability to the Australian Taxation Office. In the circumstances of this debt, it not been paid, but with the appellant having had the capacity to make the payment, it is entirely within the primary judge’s discretion and in accordance with the particular circumstances of the case, for the primary judge to not make an adjustment under s 75(2) with respect to the debt.
Consequently, we find no error in the primary judge not specifically referencing the retention of the tax debt as a factor in the s 75(2) considerations towards adjustment and this sub-ground must fail.
Ground 6: That her Honour erred in dismissing the appellant’s application for the sale of BB Pty Ltd and failed to provide any or any adequate reasons for the same
The appellant argues that an order for the sale of the business was appropriate when neither party wished to retain the same.
The appellant says that he had proposed the sale of shares in BB Pty Ltd as long ago as 3 November 2022 but without response from the first respondent. He says that he positively sought that relief at trial and was not challenged in cross-examination as to that position. He notes that the primary judge adopted a valuation to reflect the market value of the business. He argues that the primary judge in declining to make the order for sale unfairly burdened the appellant with liabilities in the event of sale. He argues that the primary judge failed to give any or any adequate reasons for refusal to make the order other than an inference being left open that there may be alternative sources of funds available to the appellant.
To the extent that this ground effectively repeats the argument by the appellant at Ground 5 our reasons are set out above, where relevant passages from her Honour’s reasons are set out.
Where neither party wishes to retain an asset (such as shares or real estate), it is common for there to be orders for sale. However, there may be circumstances in particular cases that tell against ordering a sale, for example, the sale of a business may depend upon the quality of the business records and cooperation of the party running the business to obtain market value for the business, or the proposal for a sale of the business will avoid a value to owner approach by the court. There are a number of features of this case set out in the reasons of the primary judge that are relevant to this issue: there had been attempts to transfer part of the business to the appellant’s brother prior to trial, with which the appellant did not persist; the appellant had never sought interlocutory orders for the sale of the business prior to the hearing (which would have allowed review of the appellant’s conduct in the sale when considering the property settlement orders); there was a complex structure for the business holdings; and the appellant had been found to have made significant premature distributions of assets.
In the circumstances of this case, it cannot be said that the orders for the appellant to retain a profitable business that he operated (and in which he had sought to include his brother) were unreasonable in the sense discussed in House v the King.
The appellant also argued that the primary judge failed to give adequate reasons for declining to order the sale of BB Pty Ltd. Consistent with Bennett the adequacy of reasons will depend upon the circumstances of the case, but such reasons should permit an appellant, and the appeal court must be able to, follow the trial judge’s line of reasoning.
The primary judge here recognises the orders sought by the appellant at [413] but in the same paragraph succinctly gives reasons for not making the order because of it not being necessary to do so. Again, at [416] the primary judge properly identifies these circumstances as follows:
The [appellant] sought orders concerning the sale of the interest of the Shamon Trust in BB Pty Ltd. The [first respondent] sought orders for sale in default of the [appellant’s] compliance with orders she otherwise sought. As already indicated, I do not propose to order that the [appellant] in his capacity as trustee sell the shares where the evidence does not establish that it is required.
The primary judge’s line of reasoning is clear and identifiable. This ground of appeal must therefore fail.
Ground 7: that by making orders 24–26 the learned trial judge:
(a) failed to consider, or give effect to, s 81 of the Family Law Act;
(b) failed to provide any or any adequate reasons for the making of those orders.
Section 81 of the Act provides:
In proceedings under this Part, other than proceedings under section 78 or proceedings with respect to maintenance payable during the subsistence of a marriage, the court shall, as far as practicable, make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them.
The relevant orders 24 to 26 give an election in the first respondent to retain her units in the Shamon Fixed Trust or to transfer them to the appellant at value. The appellant sought an order for the transfer of the units to him.
The primary judge took into account the practical issues for the first respondent in retaining the units where the appellant controls S Pty Ltd, the corporate trustee of the Shamon Fixed Trust.
The interests in a unit trust are not at the discretion of the trustee, but a fixed interest. The trust holds a small share of a large commercial property. It is an income producing asset that will provide the respondent with a modest return. The orders determine the rights and interests of the parties to the relevant property. The orders of the primary judge left the parties with rights well defined and enforceable at common law and equity. The trustee company’s obligations can be enforced at law and alternatively the company can resign as trustee. The relevant aspects of the financial relationships of the parties as spouses has been brought to an end by the orders.
The primary judge properly exercised her discretion giving the first respondent the first election to retain the units. The reasoning is clear at [419].
Should the first respondent retain the units then she retains an identifiable asset from the property pool. She does so to the exclusion of the appellant. This does not offend the rationale of s 81 of the Act. As such, no error in respect of the intention of s 81 is identifiable. The orders were not unreasonable in the sense discussed in House v The King. The ground therefore has no merit.
DISPOSITION
Where we have not found merit in any of the grounds argued by the appellant, it follows that the appeal will be dismissed.
COSTS
The appellant was wholly unsuccessful in the appeal and the first respondent seeks costs in defending the application on a party/party basis comprising of $7,592.73 for counsel and $9,025.69 for solicitor.
We are satisfied that there are circumstances justifying the making of a costs order. We will order that the appellant pay the first respondent’s costs on a party/party basis fixed in the sum of $16,618.42.
RIETHMULLER J:
I agree with the orders proposed by McGuire and Curran JJ and agree generally with the reasons that their Honours have given.
I certify that the preceding one hundred and twenty five (125) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices McGuire, Riethmuller & Curran. Associate:
Dated: 8 September 2025
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