FAMILY LAW CASE NOTES
Family Law Case Notes CRAIG NICOL AND KELEIGH ROBINSON, THE FAMILY LAW BOOK Property – Error to exclude latent CGT liability where evidence indicated sale of investment property would occur in near future n Shnell & Frey [2021] FedCFamC1A 55 (5 November 2021), the Full Court (Watts, Austin and Tree JJ) considered a wife’s appeal against an order that each party retain their respective property. The wife argued that it was not possible to discern how the decision was reached and that the rejection of the capital gains tax (CGT) on the possible sale of a property owned by her as a liability was in error. The Full Court said (from [64]): “The primary judge placed the value of the wife’s Suburb L property on the balance sheet at its current value but rejected the wife’s submission that the latent CGT on that property also be included. … [T]he primary judge indicates … that she took the latent CGT into account when adjusting prospective factors. [65] There was no controversy that if the wife’s Suburb L property was sold today then the CGT payable upon the distribution of the property would be $290,029 … (…) [76] … [T]he primary judge erred in failing to find that the sale of the property ‘would probably occur in the near future’ … [and] failed to recognise the undisputed evidence that this was an investment property held by the wife and had always been rented out. (…) [79] … [A]lthough it is true that the ultimate selling price might not be known, the value of the property was placed on the
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balance sheet at the date of the hearing and the latent CGT at that date was known. … [80] … [T]he primary judge’s finding that the wife had made a concession in cross-examination which precluded the wife from relying upon the second limb of Rosati, was erroneous. Had the primary judge not made that error, it would have been appropriate for the primary judge to have included the latent CGT onto the balance sheet …” The appeal was allowed and the discretion was re-exercised to reduce the asset pool by the wife’s latent CGT liability. The husband was ordered to pay costs. Property – Kennon – Wife fails to establish that a contribution based adjustment for “systematic family violence” should then be quarantined under s 75(2) In Loncar [2021] FedCFamC1A 14 (21 September 2021), the Full Court (Strickland, Ainslie-Wallace & Watts JJ) heard a wife’s appeal from final property orders made by Judge Kemp. After a 12 year relationship, Judge Kemp found that “the husband subjected the wife to a systematic pattern of family violence” ([16]) and made a 7.5 per cent adjustment for her Kennon claim and a further 10 per cent based on 75(2) factors ([28]). The wife argued that as the contribution assessment was based on violence by the husband towards her, Judge Kemp erred in not quarantining the contribution adjustment from consideration at the third stage. The Court said (from [61]): “… [I]n our view the application of
the principles articulated in Kennon does not fall within the same rubric as the approach applied in the cases relied upon by the wife, which are claims in tort. [62] In 1975 the Act deliberately set out to exclude conduct from the assessment of financial adjustment between the parties. The Family Court in Kennon carved out an exception to that general proposition by acknowledging the effect that family violence in particular and conduct more generally might have upon the making of contributions by a party. Given that the acknowledgement is made in respect of contributions, the consideration of a Kennon claim axiomatically happens at the second step although the ongoing effects of family violence maybe a relevant prospective consideration at the third step. [63] … [T]here is no warrant in s 75(2) (b) to discount the outcome of the analysis under s 79(4)(a)–(c) of the Act based on a Kennon argument. Nor in our view does s 75(2)(o) or s 79(2) create scope for the approach suggested by the wife. [64] … [W]e find the primary judge did not err in failing to quarantine the 7.5 per cent the wife achieved as a result of her Kennon argument …” The wife’s appeal was dismissed and no order was made as to costs. Children – Interim return of children to mother after her unilateral relocation – Paucity of evidence of father’s work hours indicative of the children being in primary care of paternal grandparents In Leandra & Randles [2021] FedCFamC1A 51 (5 November 2021), Ainslie-Wallace J heard a mother’s appeal against interim parenting orders providing
