Shepp & Shepp

In the matter of Shepp & Shepp, Strickland J of the Family Court of Australia considered a property dispute between a husband and wife. The wife's company was in a strong financial position at the date of separation, but the business was subsequently sold for a significantly reduced amount. The wife admitted to not properly attending to the business, attributing this to harassment by the husband, and failed to adequately explain several significant transactions. The court also noted the wife's failure to provide full and frank disclosure and complete discovery, necessitating extensive interlocutory proceedings by the husband. The husband, in turn, failed to produce documents relating to his business, raising questions about whether his employment was a sham.

The primary legal issues before the court were whether assets should be valued as at the date of separation or the date of hearing, and whether assets accumulated and subsequently dissipated post-separation should be added back to the asset pool. The court also had to determine the value of the parties' respective assets and liabilities, particularly in light of the incomplete disclosure and the wife's failure to adequately explain financial transactions and the dissipation of her business's value. Furthermore, the court considered whether monies should be set aside to meet the taxation debt of the wife's business, and the husband's responsibility for certain loan accounts and the wife's business debts.

Strickland J determined it was preferable to assess the asset pool as at the date of hearing and to add back various items that had been dissipated. The court found no basis to suggest the husband should be responsible for the wife's business taxation debt, especially as the liquidator had not joined the proceedings and the wife had spent available funds on her own purposes. The court also noted a lack of confidence that the wife would use any monies received from the husband to pay out debts. Consequently, the husband was ordered to pay a sum to the wife's solicitor, discharge and reduce certain loan accounts, and indemnify the wife against claims related to her business debts. The wife was ordered to transfer her interest in a property to the husband, who would then take sole responsibility for the associated mortgage and loan accounts. Each party was to retain their respective personal property, furniture, and superannuation entitlements, with the husband also retaining his business. The wife was ordered to indemnify the husband against claims by the liquidator of her company and in relation to a vehicle repossession.