Stephens and Stephens and Ors

[2007] FamCA 680

FAMILY COURT OF AUSTRALIA

STEPHENS & STEPHENS and ORS [2007] FamCA 680

APPEAL and CROSS-APPEAL – From decision of Family Court judge – PROPERTY SETTLEMENT – Discretionary Trusts – Trust established by husband prior to marriage – Husband by deed relinquished his position as beneficiary early in marriage – Late in marriage, at a time when the wife alleged the marriage was failing and after separation, husband took various steps which resulted in assets of the first trust being transferred to trusts for each of the four children of the parties - Primary basis on which trial Judge’s s106B orders were based was that the Deed of relinquishment could be overcome (either revoked, cancelled or avoided) and the husband could regain or resume his position as beneficiary of the Trust –Whether it would be contrary to law or public policy for the husband to regain membership of the class of beneficiaries of the Trust – Whether trial Judge was correct in finding that even if the Deed remained in full force and effect, the Trust was the alter ego of the husband and under his control; at the least, the Trust assets could be treated as a financial resource - Question as to control of the Trust in the absence of beneficial entitlement – Whether orders prefaced on the availability to the husband of Trust assets required a breach of trust/fraud on the power – Whether there was, contrary to finding of trial Judge, an agreement between husband and wife that Trust capital was to pass to the children at any time before either parent’s death – Question as to whether if husband had put Trust assets out of reach by the Deed, that action could amount to a reckless or wanton use of “marital” assets and draw the application of Kowaliw and Townsend provisions – Whether the trial Judge was correct in setting aside the 1998 instrument of variation – Whether the trial Judge was correct in setting aside the 2002 instrument and consequent dispositions - Whether shares held by the wife as nominee were “double-counted” by the trial Judge – Whether the value of shares disposed of by the husband should have been reduced to provide motor vehicle for each of three younger children – Whether the beneficiary loan accounts in Trust should have been deducted in the calculation of the asset pool by trial Judge – Whether the shares declared by husband to be held by himself as trustee for children should have been included as notional property - Contribution assessment and s75(2) conclusion challenged – Criticisms of the husband and children by the trial Judge – Whether this exceeded the trial Judge’s judicial role - Whether the husband, trustees and/or children were denied procedural fairness during trial

Family Law Act 1975 (Cth) s 79, s 106B, Part VIIIAA

Federal Proceedings (Costs) Act 1981 (Cth)

Ashton and Ashton (1986) FLC 91-777
Davidson and Davidson (1991) FLC 92-127
Goodwin and Goodwin-Alpe (1991) FLC 92-192
Webster and Webster (1998)…