TOPIC 6: PROPERTY DISPUTES (MARRIED COUPLES)
Monahan/Young, Chapters 11-13
Dickey, Chapters 32 - 44 (except Chapter 40)
Parkinson and Behrens, Part D Chapters 11, 14-18
Cases marked with an * are particularly significant
Issues:
In this topic we again consider the provisions in Part VIII of the Family Law Act 1975 (Cth) but this
time in relation to the power of the court to effect a property settlement between parties to a
marriage. In doing so, we consider the nature of “property” under the Act and the relevant
statutory requirements and how these factors have been interpreted by courts. We also consider
the interface between claims of parties to a marriage and third parties including creditors.
Desired Outcomes:
An appreciation and understanding of the requirements for property adjustment under the Family
Law Act 1975 (Cth) and the associated powers of the court. Overall, an understanding of how the
court approaches the assessment of contributions made by the parties and their future needs and
the obligation on each party to make full and frank disclosure of their financial affairs.
1.
PRELIMINARY MATTERS






Property regimes: unity of property; separation of property; community of property (strict
and deferred)
Part VIII Family Law Act
s 71: party to a marriage
s 71A: no Part VIII application for binding financial agreements
s 72: spousal maintenance right
s 75: spousal maintenance considerations
s 78: declarations of interests in property
s 79: alteration of interests in property
s 79A: setting aside property orders
s 80 general court powers
s 81 finality principle
*s 106A (formerly s 84): execution of instruments ( found in Part XIII)
*s 106B (formerly s 85): power to set aside transactions to defeat claims ( found in Part
XIII)
s 85A: ante-nuptial/post-nuptial settlements
s 86: registration of maintenance agreements
s 86A: MA’s made after commencement of Part VIIIA no longer enforceable
s 87/87A: court-approved maintenance agreements
s 88: enforcement of maintenance agreements
s 89: overseas maintenance agreements
s 90: stamp duty exemption
Also note:
Pt VIIIA (financial agreements)
Pt VIIIB (superannuation)
Pt VIIIAA (third parties)
1
2. DECLARATIONS




s 78(1)
- in proceedings between parties to a marriage
- existing title or rights in property
- court may declare title or rights in respect of property
s 78(2)
- consequential orders
- includes sale
not necessary that there be a dispute as to the title of the property for a party to seek a
declaration under s 78 and a co-owner may seek a declaration for the purpose of
obtaining consequential relief : Vance [1978]
if orders affect rights of third parties then third parties must be joined/given an opportunity
to be heard: Lanceley [1994]
Brereton J in Valecski [2007] at [80] said:
“By reason of matrimonial cause (f) and s78 of the Family Law Act, the Family Court has
jurisdiction and power, in aid of or ancillary to proceedings under s79, to make a declaration
under s78 that a spouse is beneficially entitled to property held by a third party, or that a spouse
is not beneficially entitled to property in his or her name, so as to bind the third party. ...It is part of
the ordinary federal (matrimonial causes) jurisdiction of the Family Court, and does not depend
on any question of accrued jurisdiction.”

Note – Part VIIIAA now specifically deals with orders which effect or bind third parties.
Vance and Vance [1978] FLC 90-522
Good and Good [1982] FLC 91-249
Greer and Greer [1985] FLC 91-645
Lanceley and Lanceley [1994] FLC 92-491
*Hickey and Hickey and the A-G for the Commonwealth of Australia (Intervenor) [2003] FLC
93-143
*Valceski v Valecski [2007] NSWSC 440 esp. [27] – [36] & [80]
3. ALTERATION OF PROPERTY INTERESTS


s 79 (key provision)
note amendments in 1976, 1983, 1987 and 2000 etc!
(a) Powers
 s 79(1)(a)-(d) (specific power)
 s 80 (menu of powers)
 s 106A (execution of instruments)
 s 106B ( setting aside transactions)
 s 79(1) has two limbs:
 general power (a)+(b)
 two particular orders (c)+(d)
 s 79(1A) enforcement against estates
 s 79(1B) adjournment of proceedings?
 s 79(1C) continuation of proceedings (from 1B)
Under s 79(1) the court is given wide but not uncontrolled discretionary powers to make
whatever orders are appropriate in the circumstances to redistribute property of parties to a
2
marriage. Section 79 itself contains provisions that control and guide the exercise of
discretion (eg. 79(2) and the considerations in s 79(4)). Further guidance in the exercise of
discretion is also provided by case law. But these guidelines cannot fetter the wide
discretion provided by s 79 (1). Mallet [1984] is the leading authority on the nature of the
discretion under s 79.
(b) Just and Equitable Requirement - s 79(2)





whether the overall result of property settlement proceedings is just and equitable it is the
justice and equity of the actual orders and not of the percentage distribution which must
be considered: Clauson [1995]; Russell [1999]
so stand back and consider the practical affect of the proposed orders: Waters & Jurek;
JEL and DDF (2000); Phillips & Phillips(2002) FLC 93-184).
overriding effect
matrimonial fault?
conduct with an economic consequence?
At page 84,294 of Kennon the majority of the Full Court (comprising Fogarty and Lindenmayer JJ)
said this:
“Put shortly, our view is that where there is a course of violent conduct by one party towards the
other during the marriage which is demonstrated to have had a significant adverse impact upon
that party's contributions to the marriage or, put the other way, to have made his or her
contributions significantly more arduous than they ought to have been, that is a fact which a trial
judge is entitled to take into account in assessing the parties' respective contributions within
section 79. We prefer this approach to the concept of negative contributions which is sometimes
referred to in this discussion. In the above formulation we have referred only to domestic
violence. But for the reasons which we indicated earlier its application is not limited to that.
In the above formulation, we have referred only to domestic violence, for the reasons which we
indicated earlier, but its application is not limited to that.”
And later at p.84,295:
“To be relevant, it would be necessary to show that the conduct occurred during the course of the
marriage and had a discernable impact upon the contributions of the other party. It is not directed
to conduct which does not have that effect and of necessity it does not encompass (as in
Ferguson) conduct related to the breakdown of the marriage (basically because it would not have
had a sufficient duration for this impact to be relevant to contributions).”
Note : Kennon principle should only apply in exceptional circumstances, lest it open the
floodgates.
Clauson and Clauson [1995] FLC 92-595
Kennon and Kennon [1997] FLC 92-757
Russell and Russell (1999) FLC 92-877
Phillips & Phillips(2002) FLC 93-184).
(c) Matrimonial Property
 note s 4 definition
 all property owned by both parties
 post-separation property taken into account? Yes: eg see Farmer and Bramley (2000) –
post-separation lottery win ( $5M) by husband
3





net value of assets? Usually but some exceptions
Interests under discretionary trust? Yes – see Kennon v Spry [2008] esp. per French CJ
at 53-57, 64-66, 72, 77 – 80; Gummow & Hayne JJ at 89- 92, 123, 126; 137 Simmons
[2008] esp at 52-53, 57, 72-78, 84 – 89, 115-118
Notional add-backs: see below - Kowaliw [1981]; Chorn v Hopkins [2004]; Townsend
partnership interests? Yes: Best [1993] but cannot appoint receiver or take accounts etc
unless is a step to making orders under s 79
superannuation entitlements? Yes after Part VIIIB commenced – 28 Dec 2002, but is a
different type of property: Coghlan [2003]
NOTE - Kennon v Spry; Spry v Kennon [2008] considered the question of the interest of a
beneficiary and trustee in a discretionary trust.
Kennon v Spry; Spry v Kennon [2008]
Short Chronology & summary of findings
1968
Dr Spry creates the ICF Spry Trust.
Dr Spry is the sole trustee.
Dr Spry, his siblings, their spouses and their children are beneficiaries.
1978
Dr Ian Spry marries married Helen Spry & they have four daughters.
1983
Dr Spry excludes himself as a beneficiary for land tax .
1998
The Spry marriage is in difficulties
Dr Spry varies the trust to exclude himself and Mrs Spry as capital beneficiaries.
Oct 2001
Dr and Mrs Sprys separate.
Jan 2002
Dr Spry divides the income and capital of the trust between four trusts he set up
for his daughters.
Apr 2002
Mrs Spry applies to the Family Court for orders for property settlement and
maintenance.
Dec 2002
Mrs Spry applies for divorce in the Federal Magistrates Court
Feb 2003
Divorce order takes effect
2005
The Trial Judge, Strickland J finds:
 the 1998 variation and the 2002 dispositions of assets designed to keep
property away from his wife and the Family Court and sets these
transactions aside the under s 106B;
 contributions to the Sprty’s assets ( including trust assets) 52%:48% in
favour of Dr Spry;
 that Dr Spry was entitled to $5,105,435 and Mrs Spry $4,712,709;
taking account of assets Mrs Spry already had, Dr Spry to pay her
$2,182,302.
Appeal to
Court
Dr Spry & Edwin Kennon cross-appeal in their capacity as joint trustees of Full
three daughters’ trusts.
Dr Spry and his daughter Elizabeth cross-appeal in their capacity as joint
trustees of the Elizabeth Spry Trust.
4
The Full Court of the Family Court, by majority, dismiss the appeal and crossappeals.
Appeal to
High Court
Dr Spry and the joint trustees of the children’s trusts appeal against
both dismissals.
Dr Spry and the children argue that the assets of the trust were not part of the
asset pool to be considered in making property orders.
The Court ( French CJ Gummow, Hayne, Heydon & Kiefel J) , by a 4-1 majority (
Heydon J dissents), dismiss the appeals and upheld Strickland J’s order for Dr
Spry to pay Mrs Spry $2,182,302 plus costs.
French CJ Gummow& HayneJ find that:
 without the 1998 variation and the 2002 dispositions, Mrs Spry would
have had a right due administration of the trust and to due consideration
as a beneficiary and Dr Spry would have had a power to appoint to her
the whole of the assets of the trust;
 these rights were property of the parties to the marriage
 the Family Court could make orders in property settlement proceedings
as if changes to property rights brought about by the divorce had not yet
occurred;
 open to Strickland J to make the orders he did on the basis that the asset
pool comprised $9,818,144
Kiefel J supported Strickland J’s orders by reference to section 85A of the Act
providing for variation of post-nuptial property settlements.
At paragraphs 77 - 79 of Kennon & Spry, French CJ said:
77.
The beneficiary of a non-exhaustive discretionary trust who does not
control the trustee directly or indirectly has a right to due consideration and to
due administration of the trust but it is difficult to value those rights when the
beneficiary has no present entitlement and may never have any entitlement to
any part of the income or capital of the trust.
78.
Gummow and Hayne JJ, in their joint reasons, characterise Mrs Spry's
right with respect to the due administration of the Trust as part of her property for
the purposes of the Family Law Act. I respectfully agree with their Honours that
prior to the 1998 Instrument the equitable right to due administration of the Trust
fund could be taken into account as part of the property of Mrs Spry as a party to
the marriage. So too could her equitable entitlement to due consideration in
relation to the application of the income and capital. In so agreeing, however, I
acknowledge, consistently with the observations of the Full Court in Hauff and
Evans, that it is difficult to put a value on either of these rights though a valuation
might not be beyond the actuarial arts in relation to the right to due consideration.
79.
Dr Spry's power as trustee to apply assets or income of the Trust to
Mrs Spry prior to the 1998 Instrument was, as pointed out by Gummow and
Hayne JJ, able to be treated for the purposes of the Family Law Act as a species
of property held by him as a party to the marriage, albeit subject to the fiduciary
duty to consider all beneficiaries.
Duff and Duff [1977] FLC 90-217
Whitford and Whitford [1979] FLC 90-612
Crapp and Crapp (No 2) [1979] FLC 90-615
Aroney and Aroney [1979] FLC 90-709
5
Pastrikos and Pastrikos [1980] FLC 90-897
Kowaliw and Kowaliw [1981] FLC 91-092
Warne and Warne [1982] FLC 91-247
Best and Best [1993] FLC 92-418
Marsh and Marsh [1994] FLC 92-443
Farmer and Bramley [2000] FLC 93-060
Omacini and Omacini [2005] FLC 93-218
Barker v Barker [2007] FamCA 13
*Kennon v Spry; Spry v Kennon [2008] HCA 56
*Simmons and Anor & Simmons [2008] FamCA 1088
(d) Time limits in commencing proceedings: s 44(3), (3B), (4)
 need leave if proceedings not brought within 12 months of the expiration of the day on
which divorce order took effect or a decree of nullity was made: s 44(3)
 12 month time limit does not apply to proceedings under 78, 79A or if seeking variation of
maintenance order: s 44(3)
 note that different time limits apply if court sets aside or finds financial agreement invalid:
s44(3B)
 Conditions for leave – hardship/in spousal maintenances cases if unable to support self
without income-tested pension: s 44(4)
(e) General approach to be taken by the Court
The preferred approach involves four steps: Hickey [2003] at [39]
 step 1 – identify (this includes identifying title to the property: Barker [2007]) and value
the property ( by agreement or formal valuation) including each party’s superannuation
interests at the date of hearing
 step 2 – identify and evaluate past contributions – s 79(4)(a) to (c)
 step 3 - identify and evaluate future needs factors – s 79(4)(d) to (g)
 step 4 - make order that is just and equitable – s 79(2)


Note : concept of property settlement being based upon a party's needs or by applying
some sort of means test as opposed to the factors otherwise set out in s 79 was rejected
by Full Court: Lee-Steere and Figgins (2002)
Note : Court must give reasons for the exercise of its s 79 discretion
Per Full Court in Hickey [2003] at [39]..
“[t]hat approach involves four inter-related steps. Firstly, the Court should make findings as to the
identity and value of the property, liabilities and financial resources of the parties at the date of
the hearing. Secondly, the Court should identify and assess the contributions of the parties
within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements
of the parties expressed as a percentage of the net value of the property of the parties. Thirdly,
the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and
(g), (“the other factors”) including, because of s.79(4)(e), the matters referred to in s.75(2) so far
as they are relevant and determine the adjustment (if any) that should be made to the contribution
based entitlements of the parties established at step two. Fourthly, the Court should consider the
effect of those findings and determination and resolve what order is just and equitable in all the
circumstances of the case: Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro
(1993) FLC 92-335; Davut and Raif (1994) FLC 92-503; Prpic and Prpic (1995) FLC 92-574;
Clauson and Clauson (1995) FLC 92-595; Townsend and Townsend [1994] FamCA 144; (1995)
FLC 92-569; Biltoft and Biltoft [1995] FamCA 45; (1995) FLC 92-614; McLay and McLay (1996)
FLC 92-667; JEJ and DDF [2000] FamCA 1353; (2001) FLC 93-075 and Phillips and Phillips
[2002] FamCA 350; (2002) FLC 93-104.”
6
(f) Cross-vested claims
 tort/criminal injury compensation
 side-stepped no-fault principle for the battered spouse
 BUT note the effect of High Court decision in Re Wakim (1999) on the operation of state
to federal transfers of jurisdiction
 Note pre-Wakim effect of the Federal Courts (State Jurisdiction) Act 1999 (NSW)
4. STATUTORY CONSIDERATIONS





s 79(4)
in considering what order (if any) … the court shall take into account … seven considerations:
a. direct or indirect financial contributions
b. direct or indirect non-financial contributions
c. homemaker and/or parent contributions
d. effect of a proposed order on a party’s earning capacity
e. the spousal maintenance matters [see s75(2)]
f. any other order made under the FLA (affecting a party or child of the marriage)
g. child support payments
past (retrospective) contributions: s 79(4)(a)-(c)
future (prospective) needs: s 79(4)(d)-(g)
Note s81 – finality principle
5. PAST CONTRIBUTION FACTORS
(a) Financial Contributions: s 79(4)(a)
 direct financial contribution(s)
 indirect financial contribution(s)
(ba) Superannuation: Part VIIIB

Superannuation interests are treated as a different type of matrimonial property. Part
VIIIB allows parties to value their superannuation interests and split superannuation
payments by entering into an agreement; by court orders by consent or court
determination)

Note: splitting does not convert the superannuation interest it into a cash asset – it is still
subject to superannuation laws (the events that can trigger payment eg. reaching
retirement age; retiring permanently; grounds of hardship).






ss 90MA-90MZH) and Regs
Splitting orders
Flagging orders ( prevents the trustee from making a payment)
Agreements ( can be part of a financial agreement)
‘two pools’? : Coghlan 2005 FLC 93-220)
same four step approach to be applied, whether or not a splitting order is sought in
relation to it: Coghlan [2005]
at the first step ( determining the pool of divisible assets and resources) preferable
approach is to place superannuation interests in a separate pool, especially if a splitting
order is sought, although the court retains a discretion to include the superannuation
interests in the same pool as the other assets and resources
circumstances where inclusion of superannuation interests in the same pool as other
assets and resources include:
- by consent ;


7

court satisfied that the superannuation interest is indeed property within the
meaning of the definition of property contained in s 4(1);
or if the interest is not within that definition, but is of relatively small value in the
context of the value of the other assets in the case,
or there are features about the interest which leads the Court to conclude that
this would be an appropriate approach (Coghlan [2005] at [61])
Procedural matters:
 Step 1 - Obtain valuation information
Note: there are different types of superannuation funds and different methods for valuing
most types of superannuation are set out in the legislation ( exceptions include selfmanaged funds and where the Attorney-General has approved a fund using a different
valuation method.
 Step 2 - Decide the method of splitting
Either enter into a formal written agreement or obtain a court order.
 Step 3 - Informing the trustee of the superannuation fund
The trustee must be accorded procedural fairness and must be informed if a splitting
order is sought and provided with a sealed copy of the order if a splitting or flagging order
is made.
(b) Disparity of initial contributions

Not an erosion of contribution initially brought into the relationship by one party : c/f
Money (1994), Bremner (1995); Way (1996)


But is a question of weight to be attached in all the circumstances : Pierce (1999)
to adequately recognize the importance of an initial contribution to the ultimate pool
available, may need to consider the value at the date of the commencement of
cohabitation with reference to its value to the parties at the time it was realised or its
value to the parties at the time of trial, if still intact: Williams [2007]
In Pierce (1999) the Full Court considered the disparity of initial contributions and . after
canvassing earlier decisions on the topic ( see above) concluded:
“28. In our opinion it is not so much a matter of erosion of contribution but a question of what
weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to
weigh the initial contributions by a party with all other relevant contributions of both the husband
and the wife. In considering the weight to be attached to the initial contribution, in this case of the
husband, regard must be had to the use made by the parties of that contribution. In the present
case that use was a substantial contribution to the purchase price of the matrimonial
home: ....”
Money and Money [1994] FLC 92-485
Bremner and Bremner [1995] FLC 92-560
Way and Way (1996) FLC 92-702
Pierce v Pierce [1999] FLC 92-844
*Williams & Williams [2007] FamCA 313 esp at 26 - 29 and 32
(c) Gifts, compensation and windfalls
 gifts - donor’s intention? Kessey [1994]
8

- clear evidence of joint gift
- gifts to children
compensation/windfalls
- joint contribution
- no contribution ie windfall : Zyk [1995]
- contribution of one party : Farmer and Bramley [2000]
Farmer and Bramley [2000] FLC 93-060
Zyk and Zyk [1995] FLC 92-644
Kessey and Kessey [1994] FLC 92-495
In the Marriage of Pellegrino (1997) 22 Fam LR 474
(d) Notional Add-backs







if a party has put an asset to their sole use post-separation, then court may notionally add
back that asset
categories of cases in which there may a notional add-back not closed and include:
money from matrimonial funds spent on legal fees: Omacini [2005]
assets dissipated as a result of waste party embarked on a course of conduct designed
to reduce or minimize effective value of assets or a party acted recklessly, negligently
or wantonly with matrimonial assets, effect to reduce or minimize their value: Kowaliw
(1981)
a premature distribution of matrimonial assets – Townsend (1995) at 81,654
principle of add-backs do not apply to assets used for the reasonable day-to-day
expenses of the parties:
funds being “added back” is more the exception than the rule: Chorn and Hopkins (2004)
NOTE: In Kildea & Kildea [2007) FamCA 1524 the Full Court restated the established
“guidelines” for an “adding back” where at paragraph 112 the Full Court (Finn, May and
Boland JJ) said:“ 112. The Full Court has had cause to consider on a number of occasions the question of so
called “add backs” and has established guidelines to facilitate consistency in decision making
(see for example Chorn and Hopkins [2004] FamCA 633; (2004) FLC 93-204, Townsend and
Townsend [ 1994] FamCA 144;; (1995) FLC 92-569 and Kowaliw and Kowaliw (1981) FLC 91092). In Gollings and Scott (2007) FLC 93-319 at paragraph 65 the Full Court said as follows:
“In Omacini and Omacini [2005] FamCA 195; (2005) FLC 93-218; (2005) 33 Fam LR 134 the Full
Court identified three clear categories of cases where it was appropriate to notionally add back
to the pool assets which were said by the Full Court to “no longer exist”. Those three
categories were:
(a) monies spent on legal fees;
(b) monies disbursed by way of premature distribution of matrimonial assets; and,
(c) monies lost by one party either during or after the marriage as a result of a course of conduct
designed to reduce or minimise the effective value or worth of matrimonial assets or as a result of
reckless negligent or wanton behaviours which had the effect of reducing or minimising the value
of assets. [our emphasis] “
Kowaliw and Kowaliw [1981] FLC 91-092
Townsend [ 1994] FamCA 144; (1995) FLC 92-569
Chorn and Hopkins [2004] FamCA 633
Omacini and Omacini [2005] FamCA 195
Gollings and Scott (2007) FLC 93-319
*Kildea & Kildea [2007) FamCA 1524
9
(e) Non-financial contributions: s 79(4)(b)



eg. Landscaping ; ercveting pergola ; paving
making curtains ; painting ; tiling
may have some overlap with s 79(4)(c) and/or s75(o)
(f) Global or asset-by-asset approach to contribution?


either approach can be adopted, in part or in whole, having regard to the facts of this
case: Norbis [1986] per Wilson & Dawson JJ at pg 534-5
superannuation - ‘two pools’? Coghlan [2005] FLC 93-220
(g) Homemaker and Parent Contributions: s 79(4)(c)



equality is equity?
Mallet (1984); Ferraro (1992); McLay (1996); JEL and DDF [2001]
is family violence relevant? If not:
- amend the Act?
- make violence a negative contribution?
- make it a more significant homemaker/parent contribution? Kennon (1997)
(h) “Special contributions”?




in performing the task of evaluating disparate contributions court is required to exercise
its own discretion, having regard to the individual facts of the case in question: JEL and
DDF [2000] at 150.
although court guided by previous decisions, there is no requirement, nor could there be,
that court fetter its wide discretion by being bound by results of cases that depended on
their own facts. JEL and DDF [2000] at 151.
in evaluating roles of the parties court may recognize any special factors that the
contribution of a party outside the “normal range”: eg. Whiteley [1992]; Ferraro [1993];
McLay [1996]; Figgins [2002]
the determination of such a “special” contribution is not necessarily dependant upon the
size of the asset pool or the “financial product” achieved by the parties
Note - JEL and DDF [2000] at 152, the Full Court stated the following principles from the cases:
“152. It seems to us that the following general principles can be said to arise from the cases
referred to in these reasons, namely:
(a) There is no presumption of equality of contribution or “partnership”.
(b) There is a requirement to undertake an evaluation of the respective contributions of the
husband and the wife.
(c) Although in many cases the direct financial contribution of one party will equal the indirect
contribution of the other as homemaker and parent, that is not necessarily so in every case.
(d) In qualitatively evaluating the roles performed by marriage partners, there may arise special
factors attaching to the performance of the particular role of one of them.
(e) The Court will recognise any such special factors as taking the contribution outside the
“normal range” in the sense that that phrase was understood by the Full Court in Maclay (supra).
(f) The determination of an issue of whether or not a “special” or “extra” contribution is made by a
party to a marriage is not necessarily dependant upon the size of the asset pool or the “financial
product”. When considering such an issue, care must be taken to recognise and distinguish a
“windfall” gain.
(g) Whilst decisions in previous cases where special factors were found to exist may provide
10
some guidance to judges at first instance, they are not prescriptive, except to the extent that they
purport to lay down general principles.
(h) It is ultimately the exercise of the trial Judge’s own discretion on the particular facts of the
case that will regulate the outcome.
(i) In the exercise of that discretion, the trial Judge must be satisfied that the actual orders are just
and equitable, and not just the underlying percentage division.”
Mallet v Mallet (1984) 156 CLR 695
Lee Steere and Lee Steere [1985] FLC 92-626
Norbis v Norbis (1986) 161 CLR 513
Whiteley and Whiteley [1992] 92-304 – Yes
Ferraro and Ferraro [1993] FLC 92-335 – Yes
Clauson and Clauson [1995] FLC 92-595
Doherty and Doherty [1996] FLC 92-652
McLay and McLay [1996] FLC 92-667 - Yes
Stay and Stay [1997] FLC 92-751 – Yes but overturned on appeal
*JEL and DDF [2000] FamCAFC FLC 92-667 esp at 124 – 152
Figgins and Figgins [2002] FLC 93-122 – Yes
Brown and Brown (2005) 22 Fam LR 246
(h) Limitation on time/attachment of evaluation of contribution to specific property?

NO - contributions by a party can be measured in property that only becomes available
after the contribution is made: Farmer and Bramley (2000) – post-separation lottery win
by husband 2 years of separation
(i) Obligation to make full and frank financial disclosure?




YES– eg. Oriolo (1985); Black and Kellner ( 1992); Weir (1992)
Duty is absolute so inadvertent non-disclosure may not be relevant: Kannis (2003)
If court finds deliberate non-disclosure then court need not be overly cautious in making
findings in favour of the other party and court can make an order in relation to unidentified
or undisclosed property: Weir (1992)
Costs may be awarded against non-disclosing party: see Oriolo (1985)
In the Marriage of Black and Kellner ( 1992) FLC 92-287
In the Marriage of Kannis (2003) 30 Fam LR 83
Weir & Weir (1992) FLC 92-287
Johnson & Johnson (2000) 201 CLR 488
Oriolo & Oriolo (1985) FLC 91-653
6. FUTURE NEEDS FACTORS
(a) Earning capacity: s 79(4)(d) - family farm/business?
(b) Section 75(2) factors: s 79(4)(e)
 5-15%?
 10-20%?
 high wealth cases?
 Note: s 75(2) factors should not be assessed in percentage terms without considering the
real impact of any proposed adjustment; the real impact in money terms is the critical
issue: see Clauson (1995)
(c) Superannuation (before commencement of Part VIIIB in December 2002)
 financial resource for s 79(4)(e) purposes
11





it is a significant resource
Government’s retirement policy – self funded pensions
different policy types – defined benefits and accrued benefits
five approaches
- ‘needs’
- ‘take it into account’
- mathematical (realisable value)
- deferral
- looks like property… feels like property?
Federal Government’s May 1998 Discussion Paper
- presumption of equal division
- protection afforded by binding financial agreements?
(d) Other orders: s 79(4)(f)
(e) Child support: s 79(4)(g)
7. SETTING ASIDE ORDERS ALTERING PROPERTY INTERESTS
(a) Preliminary





Is a remedial section and should be construed liberally to effect its intended purpose:
Gilbert (1990) FC
s 79A(1) five situations – but also note s 79A(2)
a. miscarriage of justice: ( s 79A(1)(a)
b. impracticable s 79A(1)(b)
c. default s 79A(1)(c)
d. new child circumstances s 79A(1)(d)
e. proceeds of crime order (also see ss 79B-79E)
s 79A(1A) consent
s 79A(2) third party
s 79A(1B)(1C) death issues
(b) Miscarriage of Justice: s 79A(1)(a)
 two factors - listed category and a miscarriage of justice
 listed categories:
- fraud
- duress
- suppression of evidence (including failure to disclose relevant information)
- giving of false evidence
- ‘any other circumstance’
 is one of the more common reasons for an application under s79A
 the essential component is a miscarriage of justice NOT inappropriate exercise of
discretion
 miscarriage of justice concerns the integrity of the judicial process and arise out of that
process: Clifton and Stuart (1991) , Bigg v. Suzi (1998)
 “judicial process” can refer to a variety of matters and circumstances which had an
influence on the outcome of the litigation and that it is neither necessary nor desirable to
attempt to define the matters which may amount to a miscarriage of justice by reason of
any other circumstance in the relevant sense: see Full Court in Suiker and Suiker (1993)
at 80,472
 miscarriage of justice can only occur because of fact or event which occurs before or at
the time of the making of the order which is sought to be set aside; see Bigg v. Suzi
(1998) ; Barker v. Barker [2007]
12





to succeed in a s79A application an applicant must show that something which occurred
prior to or at the time the orders were made resulted in the exercise of judicial power
miscarrying
the degree of inappropriateness of the order may be relevant in assessing the degree of
miscarriage and the exercise of the s79A discretion: see McIntyre (1994)
“any other circumstance” encompasses a miscarriage of justice whereby orders are
unjustly obtained or obtained contrary to the justice of the individual case
“any other circumstance” can include a mistake that was part of the judicial process: see
M v M [2003] where the integrity of the judicial process was clearly undermined by the
innocent mistake of counsel (underestimated the pool available for division) and can
include a unilateral mistake
the judicial process involves many elements - giving the parties a fair hearing; procedural
regularity; arriving at a just decision based on evidence properly put before it: see M & M
{2003] at 33
(c) Impracticability: s 79A(1)(b) - practically impossible

in some cases the application of the doctrine of frustration in contractual matters may be
of assistance but care must be taken that it is the court’s task to interpret and administer
a section of the Act: Cawthorn [1998]
(e) Default: s 79A(1)(c)


the default must be in relation to an order made under s 79
“just and equitable” does not necessarily have the same meaning as in s 79(2) – court
must all of the circumstances that have arisen as a result of the default
(d) Change in circumstances for child: s 79A(1)(d)





Note s 79A(1AA) which defines ‘caring responsibility’
refers to a child of the marriage
court must be satisfied that the child or the applicant who has caring responsibility for the
child will suffer hardship
applies if there has been a change of circumstances of an exceptional nature ( that is,
outside the ordinary circumstances) and which relates to the care, welfare and
development of the child: Sandrk [1991]
court will consider whether hardship is so serious and results in inequity that can only be
rectified by varying/setting aside the order
Gilbert and the Estate of Gilbert (Dec’d) (1989) 13 Fam LR 632
Gebert and Gebert [1990] FLC 92-137
Clifton and Stuart [1991] FLC 92-194
Public Trustee v Gilbert [1991] FLC 92-211
Sandrk and Sandrk [1991] FLC 92-260
Suiker and Suiker [1993] FLC 92-436
McIntyre (1994) FLC 92-468.
Morrison and Morrison [1995] FLC 92-573
Bigg v Suzi [1998] FLC 92-799
Cawthorn v Cawthorn [1998] FLC 92-805
Prior and Prior [2002] FLC 93-105
*M & M [2003] FamCA 1304
*Barker & Barker [2007] FamCA 13
13
8. THIRD PARTIES AND COMPETING CLAIMS
(a) Intervention in proceedings: s 92 (also note AG intervention: s 91)


intervention does not give third-party creditor any special status
Tax commissioner’s status as a party does not give entitlement to greater justice and
equity within s79 than had he been a third-party creditor: Worsnop [2009]
(b) Corporate and other entities



Ascot Investments (1981)
Exceptions - ‘sham’ (evasion) and ‘puppet’ (effective control)
Now see (d) below: Pt VIIIAA
(c) Competing claims



No requirement that the rights of an unsecured creditor or claim by a third party be
considered and dealt with prior to court making an order under s 79: Biltoft (1995)
No rule of priority as between a creditor claimant and a spouse: Biltoft (1995)
Rights of a third party must be recognized, taken into account and balanced against the
rights of a spouse: Biltoft (1995)
(d) impact of Pt VIIIAA (commenced December 2004)
•
ss 90AA-90AK
90AE(1) - in s 79 proceedings court may:
 order against creditor for substitution of debtor
 order against creditor that the parties be liable for a different proportion of the debt owed
 order directed to a director of a company or to a company to register a transfer of shares
from one party to the marriage to the other party.
90AE(2) - in s 79 proceedings court may make an order that:
 directs a third party to do a thing in relation to the property of a party to the marriage; or
 alters the rights, liabilities or property interests of a third party in relation to the marriage.
90AE(3) - court may only make an order under 90AE(1)/(2) if:
 order is reasonably necessary etc to effect a division of property between the parties
 if order concerns a debt of a party to the marriage - it is not foreseeable at the time that
the order is made that to make the order would result in the debt not being paid in full
 the third party has been accorded procedural fairness
 court is satisfied that, in all the circumstances, it is just and equitable to make the order
 court is satisfied that the order takes into account the matters mentioned in
subsection (4).
90AE(4) - the matters are as follows:
 taxation effect (if any) of the order on the parties to the marriage
 the taxation effect (if any) of the order on the third party
 social security effect (if any) of the order on the parties to the marriage
 third party's administrative costs in relation to the order
 if order concerns a debt of a party to the marriage - the capacity of a party to the
marriage to repay the debt after the order is made
Example: The capacity of a party to the marriage to repay the debt would be affected by that
party's ability to repay the debt without undue hardship
14
 the economic, legal or other capacity of the third party to comply with the order
legal capacity of the third party to comply with the order could be affected by the terms of a trust
deed. However, after taking the third party's legal capacity into account, the court may make the
order despite the terms of the trust deed. If the court does so, the order will have effect despite
those terms (see section 90AC).
 if, as a result of the third party being accorded procedural fairness in relation to the
making of the order, the third party raises any other matters - those matters
 any other matter that the court considers relevant.
Re Dovey; ex parte Ross [1979] FLC 90-616
Ascot Investments Pty Ltd v Harper (1981) 148 CLR 337
Prince and Prince [1984] FLC 91-501
Dougherty and Dougherty [1987] FLC 91-823
Biltoft and Biltoft [1995] FLC 92-614
Hughes-Kempe and Kempe and Bocampe Pty Ltd [2005] FLC 93-237
Hunt and Hunt (2006) FamCA 167
*Rand and Ors and Rand [2008] Fam CAFC 50, (2008) FLC 93-370
*Kennon v Spry; Spry v Kennon [2008] HCA 56
*Simmons and Anor & Simmons [2008] FamCA 1088
*Commissioner of Taxation & Worsnop & Anor [2009] FamCAFC 4 (“Worsnop”)
9. TRANSACTIONS TO DEFEAT CLAIMS s 106B




section 106B (formerly s 85)
power: s 106B(1)(2);
third parties: s 106B(3);
party in collusion: s 106B(4)
Abdullah and Abdullah [1981] FLC 91-003
Pflugradt and Pflugradt [1981] FLC 91-052
Gould and Gould [1993] FLC 92-434
Bassi and KD Sales Force Specialists Pty Ltd v Maas [1999] FLC 92-867
*Kennon v Spry; Spry v Kennon [2008] HCA 56
10. ANTE-NUPTIAL AND POST-NUPTIAL SETTLEMENTS s 85A



section 85A - settlement(s) made in relation to the marriage
note definition of ‘financial agreement’ in s 4 does not include a settlement to which s 85A
applies
*Note Kennon v Spry [2008] esp. per Kiefel J at 201-202, 206, 209-212, 216-219, 223-224,
227-231
Plut and Plut [1987] FLC 91-834
Knight and Knight [1987] FLC 91-854
Spellson and Spellson [1989] FLC 92-044
*Kennon v Spry; Spry v Kennon [2008] HCA 56
15
11. FINANCIAL AGREEMENTS - PART VIIIA ss 90A – 90L
(a) Public policy arguments
(b) ‘Maintenance agreements’ (1976-2000)
 s 4(1) definitions(s); ss 86, 87 and 87A (maintenance and property agreements)
(c) ‘Binding financial agreements’: Part VIIIA
(i) what is a financial agreement? ss 4, 90A, 90B, 90C, 90D
(ii) when can spouses enter into a financial agreement?
 agreements before marriage: s 90B
 agreements during marriage: s 90C
 agreements after divorce: s 90D
 common aspects: may cover property and resources and may cover maintenance
 NOTE: new s 90DA: need for a separation declaration.
(iii) maintenance requirements for a financial agreement
 s 90E (children)
 s 90F (spouses)
 future support? 90F(1A)
(iv) when financial agreements are binding: s 90G(1): agreements binding IF
- signed by both parties
- statement as to independent advice by lawyer
- certified/signed annexure by lawyer advisor is attached
- each party retains a copy - original (party 1) and copy (party 2)
-NOTE: strict compliance with the statutory requirements of s 90G is necessary to
oust the court’s jurisdiction to make orders under s 79: Black [2008]
(v) enforcement of a financial agreement: s 90G
(vi) effect of death of a party: s 90H
(vii) termination of agreement: s 90J
- by subsequent financial agreement
- by a termination agreement
(viii) court may set aside an agreement (s 90F) if:
- obtained by fraud
- void, voidable or unenforceable
- impracticable
- exceptional child-related hardship
(viii) validity, enforceability and effect of a financial/termination agreement: s 90KA
(ix) stamp duty exemption: s 90L
Also Note:

ss 90M-90Q

Capital gains tax
Brooks v Burns Philp Trustee Co Ltd (1969) 121 CLR 432
Wright and Wright [1977] FLC 90-221
*Black and Black [2008] Fam CAFC 7, (2008) FLC 93-357
16
17