Stavri & Stavri

Case [2021] FedCFamC1F 221

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Stavri & Stavri [2021] FedCFamC1F 221

File number(s): ADC 1721 of 2018
Judgment of: BERMAN J
Date of judgment: 24 November 2021
Catchwords:

FAMILY LAW – PROPERTY – Declaration of rights – Equitable claim – Where the applicant seeks a declaration that a sum of money is an asset of the marriage – Where the second to fifth respondents oppose the declaration – Whether the applicant and first respondent are the beneficial owners of property held by the third parties – Where there are allegations the first respondent misappropriated funds from an account the second to fifth respondents have an interest in – Where it is alleged a sum of money was paid from the net proceeds of sale of matrimonial property to the account as repayment of the misappropriated funds – Where the wife relied upon representations of the first respondent in relation to the sum of money to her detriment – Where unconscionable conduct is established – Where a declaration is made.

FAMILY LAW – PROPERTY SETTLEMENT – Just and equitable – Contributions – Section 75(2) factors – Where the parties had little assets of value at the commencement of their marriage – Where the pool is modest – But for the first respondent’s theft of money the contributions of the parties are equal – Where there is a slight adjustment for contributions – Consideration of the parties’ current circumstances – Where the Court is unable to understand the current financial circumstances of the first respondent – Where the majority of the applicant’s legal fees incurred arise from the conduct of the first respondent – Where there is an adjustment in the applicant’s favour – Orders.

FAMILY LAW – PRACTICE AND PROCEDURE – Where the first respondent admitted to the theft of money – Where the papers should be referred to the South Australian Director of Public Prosecutions for consideration of whether there should be an investigation into whether a criminal offence has been committed.    
Legislation:

Family Law Act 1975 (Cth) ss 4(1), 78, 79(1), 79(2), 79(4), 79(5), 90AE(2), 113

Law and Justice Legislation Amendment Act 1988 (Cth) s 39(1)
Cases cited:

Bevan & Bevan (2013) FLC 93-545

Commonwealth of Australia v Verwayen (1990) 170 CLR 394

Hickey & Hickey (2003) FLC 93-143

Mallet v Mallet (1984) 156 CLR 605

Riches & Hogben [1985] 2 Qd R 292

Sidhu v Van Dyke (2014) 251 CLR 505

Stanfordv Stanford (2012) 247 CLR 108

Watson & Ling (2013) FLC 93-527

Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387

Division: Division 1 First Instance
Number of paragraphs: 248
Date of hearing: 16 – 18 November 2020 and 15 – 17 March 2021  
Place: Adelaide
Counsel for the Applicant: Mr Scragg
Solicitor for the Applicant: Peter Scragg & Associates
Counsel for the First Respondent: The First Respondent appeared in person
Counsel for the Second to Fifth Respondents: Mr McGinn
Solicitor for the Second to Fifth Respondents: Tolis & Co Lawyers

Continue reading Stavri & Stavri

Sign in free to access the full text

Details
AGLC
Stavri & Stavri [2021] FedCFamC1F 221
Case
[2021] FedCFamC1F 221
Decision Date

CaseChat Overview and Summary

In the matter of Stavri & Stavri, the Federal Circuit and Family Court of Australia was tasked with resolving disputes related to the division of property and financial arrangements between the applicant and the first respondent, who were in a de facto relationship. The case involved complex financial transactions, including the purchase and renovation of properties, the establishment of trusts, and the operation of businesses. The court was required to determine the validity of certain financial agreements, the division of assets, and the extent to which the applicant was aware of and involved in the financial dealings of the first respondent.

The legal issues before the court encompassed whether the applicant was bound by certain financial agreements and whether she had actual or constructive knowledge of the financial arrangements made by the first respondent. The court examined the extent of the applicant's involvement in the financial management of the relationship, her awareness of specific transactions, and the enforceability of the agreements in question. This included scrutiny of the applicant's signature on various documents, her understanding of the implications of those documents, and the fairness of the financial arrangements between the parties.

The court found that the applicant was not actively involved in the financial management of the relationship and lacked detailed knowledge of the first respondent's financial dealings. Despite the applicant's signature appearing on certain documents, the court determined that she was not fully aware of the contents and implications of those documents. The court also considered the fairness of the financial arrangements, particularly in light of the applicant's limited involvement and the first respondent's dominant role in managing the finances. Based on these findings, the court made orders regarding the division of property and financial arrangements between the parties.

The final orders included the division of property and financial assets between the applicant and the first respondent, taking into account the findings regarding the applicant's awareness and involvement in the financial transactions. The court also addressed the enforceability of certain agreements and the allocation of liabilities between the parties.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

The second to fifth respondents rely upon the following documents:(1)Amended Response to Initiating Application filed 13 November 2020;(2)Trial affidavit of Mr D Stavri filed 13 November 2020;(3)Trial affidavit of Ms C Stavri filed 13 November 2020;(4)Trial affidavit of Ms BB Stavri filed 13 November 2020;(5)Trial affidavit of Mr CC filed 13 November 2020;(6)Affidavit of Ms DD filed 22 December 2020;(7)Affidavit of Ms EE filed 22 December 2020; and(8)Case outline filed on behalf of the second to fifth respondents.BACKGROUND The first respondent was born in 1972. The applicant was born in 1977. At present, the applicant is employed as a manager and the first respondent works as a professional. Mr E Stavri and Ms C Stavri incorporated FF Pty Ltd on 12 December 1988. FF Pty Ltd changed its name to GG Pty Ltd and then on 30 March 1993 changed its name to B Pty Ltd. B Pty Ltd as trustee for the G Trust currently holds property at Q Street, Suburb R. The applicant and first respondent commenced cohabitation in early 2000. The first respondent purchased a property at HH Street, Suburb JJ (“the Suburb JJ property”). Soon after the commencement of their relationship, the applicant and first respondent moved to Victoria and in August 2001 (on the wife’s case) purchased property at KK Street, Suburb LL, Victoria (“the Suburb LL property”). In November 2002, the applicant and first respondent took up residence in Europe and were married in 2004. They returned to Australia later that year. In December 2004, the first respondent purchased a property at MM Street, Suburb NN (“the Suburb NN property”). The first respondent established the S1 Family Trust in February 2006. The first respondent is the trustee. The first and fourth respondents established a partnership entity comprised of the S1 Family Trust (“S1FT”) and the S2 Family Trust (“S2FT”) to purchase a retail business known as “the OO Business”. The first and fourth respondents then purchased the business of F Business Suburb AA (AA Business) and utilised the business licence attached to the OO Business to enable AA Business to operate as a licenced business. In or about March/April 2008, the applicant and the first respondent purchased the property at V Street, Suburb W (“the Suburb W property”) as tenants in common with 99 one hundredths to the applicant and 1 one hundredth to the first respondent for the price of $1,308,000. The purchase of Suburb W was principally funded by two NAB mortgages totalling $1,260,000. In 2009, the applicant and the first respondent undertook substantial renovations to the Suburb W property. A building contract was entered into with PP Company. A dispute arose with PP Company and debt recovery proceedings were issued against the first respondent. In April 2009, a loan facility with a limit of $400,000 was established for Mr Stavri and Ms C Stavri and B Pty Ltd. Consequent upon an advice by NAB that the borrowings in respect of AA Business significantly exceeded its value by letter dated 16 November 2011, the first and fourth respondents were advised that the credit limit on the existing facilities and the outstanding debt would need to be reduced.

Evidence

Evidence Before The Court

It must be remembered that the applicant held 99 one hundredths interest in the property whereas the first respondent held a 1 one hundredth interest. There is no suggestion that there was any direct dealing between the second to fifth respondents with the applicant nor is there any evidence presented that the applicant acknowledged that funds removed from B Pty Ltd by the first respondent had been utilised.EVIDENCEThe applicant The applicant relies upon her trial affidavit filed 28 September 2020 and affidavit in reply filed 16 November 2020. The applicant states that following the purchase of the Suburb W property the first respondent was anxious to undertake renovations and improvements. PP Company were appointed to undertake the building works and following an initial quote of $100,000, the applicant believes that the first respondent entered into a contract. The family finances were principally conducted by the first respondent. The applicant had access to money only via a debit card attached to a joint NAB transaction account. The applicant was aware of the mortgage and was concerned to keep debt to a minimum. Whilst the applicant worked part-time in the AA Business, her primary function was to supervise the children. When she did work, her duties were as a sales assistant but she contends she was not part of the business operations. She did not have detailed discussion with the first and fourth respondents concerning the financial viability of the pharmacy. The applicant has no recollection of signing the NAB guarantee document dated 29 June 2012. Exhibit “29” contains the guarantee document which appears to bear the applicant’s signature and witnessed by Ms RR being a Commissioner for taking affidavits in the Supreme Court of South Australia. The applicant states that she was not aware of the caveat registered over the Suburb W property nor was it brought to her attention that a charging order had been registered in favour of N Pty Ltd and by the first respondent’s accountants M Ltd. The applicant signed the Memorandum of Transfer for the sale of the Suburb W property on 10 July 2014. She recollects that she attended a meeting with SS Conveyancer. The applicant specifically recollects that at the time the contract was signed the first respondent told her that there would be net proceeds of $345,000. She accepted that the first respondent would place those funds in the S1FT to protect them from creditors. In 2017, the parties sought to negotiate a settlement of their financial arrangements as to child support for the children and a contribution to their extracurricular activities. In particular, the following acknowledgment appears at annexure “ST2” on page 36 of the applicant’s affidavit in reply:I Mr Stavri acknowledge there is $325,000 in family trust account #…36 from sale of V Street Suburb W. Proceeds to be distributed upon asset settlement.Mr Stavri S. [signature] [signature]9/12/17 9/12/17 The applicant does not remember signing documents at the conveyancer’s office in preparation for the disbursement of funds to B Pty Ltd. She acknowledges that documents must have been signed by her. It is her contention that the applicant’s conduct was such that she felt compelled to sign whatever documents were required to effect settlement.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.