Family Law Property Dispute: When is a Family Company a Matrimonial Asset vs. Held in Trust for Parents?

Based on the authentic Australian judicial case Kaplan & Hankel [2025] FedCFamC1F 41, this article disassembles the Court’s judgment process regarding evidence and law. It transforms complex judicial reasoning into clear, understandable key point analyses, helping readers identify the core of the dispute, understand the judgment logic, make more rational litigation choices, and providing case resources for practical research to readers of all backgrounds.

Chapter 1: Case Overview and Core Disputes

Basic Information:

• Court of Hearing: Federal Circuit and Family Court of Australia (Division 1)
• Presiding Judge: Schonell J
• Cause of Action: Property Settlement under Part VIII of the Family Law Act 1975 (Cth)
• Judgment Date: 30 January 2025

Core Keywords:

• Keyword 1: Authentic Judgment Case
• Keyword 2: Family Law Property Settlement
• Keyword 3: Resulting Trust vs Loan
• Keyword 4: Notional Add-back
• Keyword 5: Contributions Assessment
• Keyword 6: Family Violence (Kennon Claim)

Background:

This proceeding involves a financial dispute between a husband and wife following the breakdown of their approximately 10-year relationship. A significant portion of the wealth accumulated during this period was held within a company, F Pty Ltd, which was legally owned and controlled by the wife. The company engaged in the purchase and sale of multiple investment properties in both New Zealand and Australia. After the parties separated, the wife transferred all her shares in the company to her mother, the Second Respondent in the proceedings. This transfer became the central battleground of the litigation, requiring the Court to unravel a complex web of family financial dealings, undocumented agreements, and conflicting testimonies to determine the true nature of the matrimonial asset pool.

Core Disputes and Claims:

The primary legal questions before the Court were:

1. The Status of the Company: Was the company, F Pty Ltd, a matrimonial asset to be included in the property pool for division, as the husband contended? Or were the shares held on trust by the wife for her parents, as the wife and her mother (the Second Respondent) argued?
2. The Nature of Financial Transfers: Were the funds provided by the wife’s parents to her and the company gifts, investments for their own benefit via a trust, or legally enforceable loans that needed to be repaid?
3. The Share Transfer: Was the wife’s transfer of all company shares to her mother a legitimate act to satisfy a trust obligation or repay a debt? Or was it a disposition of property intended to defeat the husband’s claim, warranting the value of the assets to be notionally added back to the pool?
4. Assessment of Contributions: How should the Court assess the financial, non-financial, and homemaker/parenting contributions of each party over the course of the relationship, particularly given the wife’s significantly higher income and her role in managing the property portfolio?
5. Family Violence Claim: Did the husband perpetrate family violence against the wife, and if so, did this conduct make the wife’s contributions significantly more arduous, justifying an adjustment in her favour under the principles established in Kennon & Kennon?
6. Future Needs: Was an adjustment required for either party based on their future needs under section 75(2) of the Family Law Act 1975 (Cth)?

The Applicant (husband) sought a significant lump-sum payment, arguing the company was a joint matrimonial enterprise and its assets should be divided. He also sought to be released from all personal guarantees he had provided for the company’s loans.

The Respondent (wife) and the Second Respondent (her mother) sought a declaration that the company and its assets were beneficially owned by the parents and should be excluded from the matrimonial pool. Consequently, the wife argued for a much smaller payment to the husband based on a significantly reduced asset pool.

Chapter 2: Origin of the Case

The Applicant (husband) and the Respondent (wife) met in New Zealand in early 2008. The wife had moved to New Zealand from her home country in 2002 to study, supported by funds from her parents. The parties’ relationship evolved, and the Court found that they commenced a de facto relationship in late 2008 or early 2009.

The financial narrative of their relationship is deeply intertwined with the company, F Pty Ltd, which was incorporated by the wife in early 2009. The wife asserted this was done on behalf of her parents for their retirement, while the husband maintained it was the vehicle for their joint investment activities. The company soon began acquiring a portfolio of properties, financed through a combination of bank loans, funds from the wife’s parents, the wife’s own savings, and the parties’ joint income. Critically, the husband provided personal guarantees for several of these significant bank loans, exposing himself to substantial financial risk.

Over the next decade, the parties married in 2011, had two children, and moved to Australia in 2014. Throughout this period, the wife, who earned a significantly higher income, was the primary driver of the property investment strategy. She sourced the properties, managed the finances, and dealt with all administrative aspects. The husband, alongside his employment, contributed his income to a joint account and provided practical support, including undertaking some renovations. The relationship, however, was volatile, marked by several temporary separations and incidents of conflict.

The final separation occurred in April 2019 when the husband moved out of the home. In the ensuing period, the wife continued to manage the property portfolio. A pivotal event occurred in late 2022. Just as the husband was seeking court orders to restrain the wife from dealing with the company’s assets, the wife, without notice to him, transferred all her remaining shares in F Pty Ltd to her mother. This act crystallised the core dispute: was she simply returning assets to their rightful beneficial owner, or was she attempting to place the most valuable assets of the relationship beyond the reach of the Court and her former husband? This transfer led to the joinder of her mother as the Second Respondent and set the stage for a complex legal battle over the true nature of their shared financial world.

Chapter 3: Key Evidence and Core Disputes

Applicant’s Main Evidence and Arguments:

• Affidavit Evidence: The husband asserted that he and the wife jointly decided to use F Pty Ltd as a vehicle for their mutual financial benefit. He detailed his contributions, including his income being pooled, his physical labour on renovations, and, crucially, his signing as a personal guarantor for multiple substantial loans taken out by the company.
• 2013 Separation Agreement: During a period of temporary separation, the parties drafted an agreement which explicitly listed F Pty Ltd and its properties as part of the wife’s assets to be retained by her in that proposed settlement. The husband argued this was a clear admission that the company was considered matrimonial property, not held on trust.
• Joint Bank Accounts: Bank statements demonstrated the pooling of the parties’ incomes, which were then used to meet joint expenses and deposits for property purchases.
• Post-Separation Conduct: The husband pointed to the timing of the final share transfer—occurring just after he had foreshadowed seeking an injunction—as evidence of the wife’s intention to defeat his claim.

Respondent’s Main Evidence and Arguments:

• Affidavits of Wife and Mother: Both the wife and her mother provided detailed accounts of conversations, purportedly occurring between 2008 and 2021, establishing two alternative narratives:
  1. Trust Narrative: The company was established by the wife as a bare trustee for her parents, intended to be their retirement fund.
  2. Loan Narrative: The parents had loaned the wife significant sums for her education in New Zealand, and the transfer of the company shares in 2021/2022 was in repayment of this long-standing debt.
• Financial Contributions: The wife’s evidence highlighted her vastly superior income throughout the relationship and her primary role in managing the entire property portfolio, arguing her contributions were overwhelmingly greater.
• Family Violence Allegations: The wife detailed multiple alleged incidents of physical and emotional abuse by the husband throughout the relationship, claiming these acts made her contributions as a parent and income-earner significantly more arduous.

Core Dispute Points:

1. Trust vs. Loan vs. Matrimonial Asset: The central conflict was the characterisation of F Pty Ltd. Was it held on trust, was its transfer a loan repayment, or was it simply a matrimonial asset? The wife and her mother’s evidence was internally inconsistent, presenting both a trust and a loan repayment theory, which are mutually exclusive.
2. Credibility of Oral Agreements: The Court had to assess the credibility of alleged verbal agreements made between family members over a decade prior, in the complete absence of any formal documentation (e.g., a deed of trust or a loan agreement).
3. Nature of Husband’s Contributions: While the wife downplayed the husband’s role, his act of providing personal guarantees for millions of dollars in loans was a significant, undisputed financial contribution in the form of risk assumption.
4. The Kennon Claim: The husband denied the wife’s allegations of family violence (except for a criminal conviction involving one of the children). The Court had to determine if the alleged violence occurred and, if so, whether it had a discernible impact on the wife’s ability to contribute.

Chapter 4: Statements in Affidavits

The affidavits of the wife and her mother formed the bedrock of their case, attempting to construct a narrative of a family financial arrangement that predated the husband’s significant involvement. They recounted alleged conversations from over a decade prior, where the mother supposedly directed the wife to set up a company for the parents’ benefit. The wife’s affidavit stated she told her mother, “I have registered the company… I will start looking for properties to buy soon, but the properties are around NZD $200,000 to 250,000, we will need at least $40,000.”

However, this narrative of a pre-existing trust was fundamentally undermined by other parts of their own evidence. In a separate section of her affidavit, the wife described a 2021 conversation where her mother demanded the shares be transferred back, stating, “You owe me study money. You have to pay me back…” This introduced a contradictory “loan repayment” theory.

Further compounding the issue, the mother’s affidavit claimed the study loan had been fully repaid by 2013 through the purchase of the company’s properties. This created an irreconcilable timeline: if the loan was repaid in 2013, it could not be the reason for demanding the share transfer in 2021. The Court was thus faced with two conflicting stories from the same parties, with no documentary evidence to support either.

In stark contrast, the husband’s affidavit, while less detailed, focused on objective, verifiable facts: the existence of joint bank accounts, his role as a guarantor on company loans, and the drafting of a 2013 separation agreement that treated the company as the wife’s personal asset. This strategy of grounding his claims in documentary evidence, rather than fallible memories of conversations, proved far more persuasive. The conflicting and self-serving nature of the wife’s and mother’s affidavits ultimately became a central reason for the failure of their case.

Chapter 5: Court Orders

Before the final hearing, the case navigated a lengthy procedural path. Initially filed in Division 2 of the Court and set down for a three-day hearing, it was later transferred to Division 1 by a judge who believed the matter would likely exceed four days. The final hearing judge noted this transfer was perplexing, as the matter was ultimately resolved within two days, highlighting the importance of efficient case management to uphold the overarching purpose of the Act.

Key procedural orders leading up to the hearing included:

• Joinder of the Second Respondent: The wife’s mother was formally joined to the proceedings due to her claim of a beneficial interest in the company shares that had been transferred to her.
• Family Report: A Family Report was ordered to assist with the parenting aspects of the dispute, which were ultimately resolved by consent prior to the final property hearing.
• Directions for Evidence: The Case Management Judge issued comprehensive directions for the filing of affidavits, financial statements, and a consolidated balance sheet to narrow the issues in dispute before the trial commenced.
• Injunctive Relief Application: The husband foreshadowed an application to restrain the wife from dealing with the company shares, a critical step that ultimately exposed the wife’s subsequent transfer of those very shares to her mother.

Chapter 6: Hearing Scene: Ultimate Showdown of Evidence and Logic

The trial transformed the written allegations into a live forensic examination, where inconsistencies in the affidavits were laid bare under the pressure of cross-examination. The wife’s case, which rested heavily on the credibility of verbal family agreements, began to unravel when tested against objective evidence.

A pivotal moment occurred when the wife, despite her affidavit asserting the husband made “no initial and ongoing contributions” to the purchase of the Suburb D property beyond acting as a guarantor, conceded under questioning that the AUD $250,000 deposit for that property was sourced from the proceeds of sale of a previously jointly owned asset. This admission directly contradicted her sworn evidence and confirmed the husband had, in fact, made a substantial direct financial contribution.

Similarly, the wife’s initial minimisation of the husband’s role was challenged by the undeniable fact that he had repeatedly acted as a guarantor for the company’s loans. The Court found it inherently implausible that the husband would expose himself to such significant financial risk for a company he allegedly knew belonged entirely to his parents-in-law. This conduct was fundamentally inconsistent with the existence of a trust.

The judge’s assessment of credibility was crucial. Rather than relying on the demeanour of the witnesses, the Court focused on the objective evidence and the internal logic of their claims. The conflicting narratives of the wife and her mother regarding the alleged loan—whether it was repaid in 2013 or was the reason for the share transfer in 2021—were deemed irreconcilable and implausible.

In weighing the evidence, the Court articulated its guiding principle, reflecting the wisdom found in established legal authorities on fact-finding:

I have read all of the evidence relied upon in the proceedings including the Exhibits but do not propose to repeat all of it in these reasons… Credibility involves wider problems than mere ‘demeanour’… Witnesses, especially those who are emotional, who think that they are morally in the right, tend very easily and unconsciously to conjure up a legal right that did not exist… For that reason a witness, however honest, rarely persuades a Judge that his present recollection is preferable to that which was taken down in writing immediately after the accident occurred. Therefore, contemporary documents are always of the utmost importance.

This statement underscored the Court’s ultimate approach: the contemporary documents, such as the 2013 separation agreement listing the company as a personal asset and the bank documents showing the husband as a guarantor, were given far greater weight than the fallible and self-serving recollections of conversations that allegedly took place over a decade earlier.

Chapter 7: Final Judgment of the Court

Having analysed the evidence and applied the relevant legal principles, the Honourable Justice Schonell delivered a judgment that effectively unwound the wife’s post-separation transactions and redistributed the assets.

THE COURT ORDERS THAT:

1. The wife shall pay the husband within three months of the date of the making of these Orders the sum of $1,164,648.
2. Simultaneously with the payment pursuant to Order 1, the wife is to cause the mortgage secured over the properties at B Street, Suburb D (the Suburb D Property) and C Street, Suburb E (the Suburb E Property) to be discharged such that the husband is removed as a borrower, mortgagor and/or guarantor.
3. Simultaneously with the wife’s compliance with Orders 1 and 2, the husband shall do all acts and things and sign all documents necessary to transfer to the wife all of his right, title and interest in the Suburb E Property.
4. In the event that the wife fails to comply with Orders 1 and/or 2, default orders for the sale of the Suburb E and Suburb D properties are to take effect, with the husband to nominate a solicitor and real estate agent to manage the sales.
5. In the event of a default sale, the proceeds of sale of the Suburb E Property shall be applied to discharge the mortgage and costs, with the remainder paid to the husband.
6. In the event of a default sale, the proceeds of sale of the Suburb D Property shall be applied to discharge the mortgage and costs, with the remainder to be paid as to 67.5 percent to the husband (less any amount already received from the Suburb E property sale), and the balance to the wife.
7. Pending payment, both parties are restrained from further encumbering the properties.
8. A registrar of the Court is appointed to execute any necessary documents in the event of a party’s default.
9. Any application for costs is to be made within 28 days.

Chapter 8: In-depth Analysis of the Judgment: How Law and Evidence Lay the Foundation for Victory

Special Analysis:

The jurisprudential significance of this case lies in its methodical application of commercial law principles regarding the “intention to create legal relations” within the emotionally charged context of a family law dispute. The Court effectively demonstrated that familial financial arrangements, particularly when undocumented and self-serving, will not withstand judicial scrutiny when they contradict the objective conduct of the parties. The judgment serves as a powerful reminder that in the absence of clear, formal documentation like a Deed of Trust or a registered loan agreement, courts will look to the “incontrovertible facts”—such as who bore the financial risk (the guarantors) and who declared the benefits (the wife on her tax returns)—to determine the true ownership of an asset. Furthermore, the judge’s pointed critique of the case being transferred from Division 2 to Division 1 is a noteworthy commentary on judicial administration and the imperative to adhere to the overarching purpose of the Family Law Act 1975 (Cth) to resolve disputes efficiently and proportionately, regardless of the division.

Judgment Points:

A key ruling was the Court’s treatment of the wife’s transfer of company shares to her mother. Instead of setting aside the disposition under section 106B of the Act, the Court treated it as a “premature distribution” of a matrimonial asset to the wife. This allowed the Court to notionally add the value of the company’s real estate back into the asset pool for division, a pragmatic approach that achieved a just outcome without becoming bogged down in the complexities of reversing the share transfer itself. Another critical point was the Court’s handling of the family violence allegations. It found that the husband had perpetrated violence that made the wife’s contributions “significantly more arduous,” leading to a direct adjustment in the contributions assessment in her favour, demonstrating a practical application of the principles from Kennon & Kennon.

Legal Basis:

The judgment was firmly anchored in Part VIII of the Family Law Act 1975 (Cth). The Court followed the established four-step process for property settlement: identifying the asset pool (s 79), assessing contributions (s 79(4)), considering future needs (s 75(2)), and ensuring a just and equitable outcome. To resolve the trust/loan dispute, the Court implicitly drew upon the common law principles established in cases like Ermogenous v Greek Orthodox Community of SA Inc, which requires objective proof of an intention to create legal relations in family arrangements. The Briginshaw standard of proof was also relevant, requiring the Court to feel an “actual persuasion” of the facts, a standard the wife’s and mother’s inconsistent evidence failed to meet.

Evidence Chain:

The husband’s victory was built on a chain of objective evidence that systematically dismantled the wife’s narrative.
1. Guarantees: The fact that the husband (and wife, but not her parents) signed as a personal guarantor for company loans was powerful evidence that they, not the parents, were the true parties at risk and therefore the true stakeholders.
2. 2013 Separation Agreement: This document, which listed the company as the wife’s asset, acted as a contemporary admission against her later claim of a trust.
3. Tax Returns: The wife’s conduct in claiming the company’s losses as a tax deduction was inconsistent with her being a mere trustee.
4. Intermingling of Funds: The transfer of proceeds from the sale of a joint asset (S Street) into the company, and then using those funds to purchase another property (Suburb D), demonstrated that the parties treated the company’s finances and their personal finances as interchangeable.
5. Timing of Share Transfer: The transfer of the final 50% of shares immediately after the husband flagged his intention to seek an injunction was treated by the Court as strong circumstantial evidence of an intention to defeat his claim.

Judicial Original Quotation:

In dismissing the contradictory trust and loan arguments, the Court’s reasoning was sharp and decisive. The judge highlighted the inherent illogicality of the wife’s position:

The transfer of shares, if in repayment of a loan, would be inconsistent with the notion that the shares were always the property of the parents held by the wife on trust for them. It would amount to the wife using their property to repay a loan owed to them. A factual and legal absurdity.

This statement encapsulates the core failure of the wife’s case: it was built on two mutually exclusive narratives, destroying the credibility of both. The judge further cemented this finding by stating:

I am not so persuaded and am not satisfied that there existed a trust between the wife and her parents of the shares in the Company or that the wife at the time of incorporation or at any time thereafter until after separation regarded the Company as other than her own property. Nor am I satisfied that there was a loan to be repaid or repayment of a loan to her parents at any time by the transfer of shares.

Analysis of the Losing Party’s Failure:

The wife’s and Second Respondent’s case failed for several key reasons:
1. Lack of Documentation: They failed to produce a single piece of credible, contemporaneous evidence—such as a deed of trust, a formal loan agreement, or even consistent diary entries—to support their claims.
2. Irreconcilable Narratives: They presented two conflicting stories (a trust and a loan repayment) which undermined their credibility. The mother’s evidence that the loan was “repaid” in 2013 directly contradicted the wife’s claim that the 2021/2022 share transfer was for that purpose.
3. Conduct Inconsistent with Claims: The wife’s own actions—claiming tax benefits, using joint funds, and having her husband act as guarantor—were entirely consistent with her being the beneficial owner of the company, not a mere trustee.
4. Implausibility: The Court found it inherently implausible that the husband would guarantee millions in loans for a company he knew he had no stake in, or that the “repayment” of an alleged $116,850 loan would be satisfied by the transfer of shares worth over AUD $1.4 million.
5. Timing of the Transfer: The decision to transfer the final tranche of shares immediately after the husband sought an injunction was viewed as a deliberate attempt to alienate property, severely damaging the wife’s credibility.

Reference to Comparable Authorities:

• Stanford v Stanford (2012) 247 CLR 108: Established that the foundational step in a property settlement is determining whether it is “just and equitable” to make an order at all, before proceeding to the four-step assessment.
• Hickey & Hickey (2003) FLC 93-143: Reaffirmed the orthodox four-step process for assessing property settlement applications under section 79.
• Dickons v Dickons (2012) 50 Fam LR 244: Emphasised that the assessment of contributions is a holistic exercise of discretion, not a mathematical or accounting task, and should avoid arbitrarily dividing the relationship into different time periods.
• Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95: Although not a family law case, it established the key principle that in family and social arrangements, the onus is on the party asserting a binding contract to prove an objective intention to create legal relations.
• Briginshaw v Briginshaw (1938) 60 CLR 336: Set the standard of proof in civil cases involving serious allegations, requiring that the court feel an “actual persuasion” of the facts, taking into account the gravity of the consequences of a particular finding.

Implications

1. Document Everything in Family Financial Arrangements: This case is a stark warning about the dangers of informal financial agreements between family members. If money is intended as a loan, it must be documented as a loan with clear terms. If an asset is held in trust, a formal Deed of Trust is essential. Courts are deeply skeptical of verbal agreements reconstructed years later in the midst of litigation.
2. Conduct Speaks Louder Than Words: The Court looked past what the parties said and focused on what they did. The husband’s willingness to act as a guarantor and the wife’s claiming of tax deductions were powerful indicators of their true intentions regarding the company. Your actions throughout a relationship can and will be used to interpret your financial arrangements.
3. Don’t Underestimate Non-Financial Contributions: While the wife’s financial contributions were vastly superior, the husband’s role as a guarantor—a significant financial risk contribution—and his contributions as a parent and homemaker were still recognised by the Court in the final assessment.
4. Attempting to Alienate Assets Will Backfire: The wife’s decision to transfer the company shares to her mother after separation, particularly after the husband had signalled his intention to seek an injunction, was viewed critically by the Court. Such actions are often seen as an attempt to defeat a claim and can lead to the asset’s value being “notionally added back” to the pool, while severely damaging the transferring party’s credibility.
5. Family Violence Has Financial Consequences: The judgment demonstrates that a finding of family violence can have a direct and quantifiable impact on a property settlement. Where it can be shown that such conduct made one party’s contributions “significantly more arduous,” the Court can make a specific adjustment in their favour, recognising the additional burden they carried.

Q&A Session

Question 1: Why did the Court find there was no legally enforceable loan from the parents, even though money was clearly given to the wife?

Answer: The Court found there was no legally enforceable loan because the arrangement lacked the hallmarks of a commercial or legally binding agreement. There was no written loan document, no specified interest rate, no fixed repayment schedule, and the evidence from the wife and her mother about when and how it was to be repaid was contradictory and implausible. In family dealings, the law presumes that financial assistance is often given out of natural love and affection (as a gift) unless there is clear, objective evidence showing an intention to create a legally binding debt. The inconsistent stories and lack of documentation meant the wife and her mother could not overcome this presumption.

Question 2: If the wife made most of the financial and business contributions, why did the husband still receive 30% of the asset pool?

Answer: The Court’s assessment is holistic and considers all forms of contribution under section 79(4) of the Family Law Act. While the wife’s financial contributions were superior, the husband’s contributions were not negligible. He contributed his income to the joint finances, provided personal guarantees for millions of dollars in company loans (a significant contribution of financial risk), performed some renovations, and made contributions as a parent and homemaker, especially given the wife’s long working hours. The 70/30 split reflects the wife’s significantly greater contributions but appropriately acknowledges that the husband’s various contributions throughout the 10-year relationship were also valuable to the acquisition, conservation, and improvement of the asset pool.

Question 3: What does it mean to “notionally add back” an asset, and why did the Court do it here?

Answer: A “notional add-back” is a judicial tool used in family law where a party has disposed of an asset post-separation in a manner that is considered to have wasted it or reduced the value of the asset pool available for division. Instead of undertaking the complex process of reversing the transaction, the Court simply treats the asset as if it were still part of the pool. In this case, the wife transferred the company shares to her mother. The Court found this was not a legitimate repayment of a loan or satisfaction of a trust, but rather a “premature distribution” intended to remove the asset from the husband’s reach. By notionally adding back the value of the company’s properties, the Court ensured that the asset was included in the total pool to be divided between the husband and wife, leading to a just and equitable outcome.

---

[Appendix: Reference for Comparable Case Judgments and Practical Guidelines]

1. Practical Positioning of This Case

• Case Subtype: Family Law – Property Settlement involving a Third Party (the mother) and a Corporate Entity.
• Judgment Nature Definition: Final Judgment

2. Self-examination of Core Statutory Elements

① De Facto Relationships & Matrimonial Property & Parenting Matters (Family Law)

Core Test (Existence of De Facto Relationship – Section 4AA):

• Duration of the relationship: The Court considered the total length of cohabitation. The general threshold is two years, but this was a long-term relationship culminating in marriage, so the pre-marriage cohabitation period was relevant to the overall assessment of contributions.
• Nature and extent of common residence: The parties lived together for approximately 10 years, which was a clear indicator of a de facto relationship prior to marriage.
• Whether a sexual relationship exists: This was presumed given the marriage and children.
• Degree of financial dependence or interdependence: The existence of joint bank accounts from 2009 and the husband’s financial guarantees for the wife’s company demonstrated a high degree of financial interdependence.
• Ownership, use and acquisition of property: The parties acquired property both jointly (S Street) and through the wife’s corporate structure, with the husband contributing guarantees and income. This pointed to a shared financial life.
• Degree of mutual commitment to a shared life: The parties married, had children, and made long-term financial plans together, including moving internationally. This demonstrated a clear mutual commitment.
• The care and support of children: The parties had two children together.
• Reputation and public aspects of the relationship: They were known publicly as a couple and later as a married couple.

Property Settlement – The Four-Step Process:

• Identification and Valuation: The Court first had to determine the net asset pool. The major dispute here was whether to include the assets of F Pty Ltd. The Court found the wife’s transfer of shares was a premature distribution and notionally added the company’s property value back into the pool.
• Assessment of Contributions: The Court conducted a holistic assessment of:
  • Financial contributions: The wife’s superior income and her parents’ initial financial assistance were weighed against the husband’s income contributions and, significantly, his provision of personal guarantees for company loans.
  • Non-financial contributions: The husband’s physical labour on renovations was considered.
  • Contributions to the welfare of the family: The wife was found to be the primary homemaker and parent, but the husband’s contributions were also acknowledged. The wife’s contributions were found to be more arduous due to family violence (Kennon claim), leading to an adjustment in her favour within this step.
• Adjustment for Future Needs (s 75(2) Factors): The Court considered the wife’s ongoing primary care of the two children, which favoured an adjustment to her. However, this was offset by her significantly higher income and earning capacity compared to the husband. The Court also noted the husband’s responsibility to support two children from a new relationship. Ultimately, it was determined that these factors balanced out, and no further adjustment was made.
• Just and Equitable: The Court concluded that a 70/30 division of the net pool in the wife’s favour was just and equitable in all the circumstances.

Parenting Matters (Section 60CC of the Family Law Act 1975):

• Although resolved by consent prior to trial, the orders reflected the core considerations. The Primary Considerations were balanced, giving the wife sole parental responsibility (reflecting the need to protect the children from conflict and the impact of the husband’s past conduct) while still providing for the husband to have a meaningful relationship with the children through slowly increasing time. Additional Considerations, such as the wife’s capacity as the established primary carer, would have informed the consent orders.

3. Equitable Remedies and Alternative Claims

Even if the wife’s claim of an express trust had failed, equity could have offered alternative avenues if the facts were different. In cases involving family financial disputes, parties should consider:

• Unjust Enrichment / Constructive Trust: If the wife’s parents had been able to prove that they had contributed significant funds or labour to the properties under a clear expectation of gaining an interest, and it would be unconscionable for the wife and husband to retain the full benefit, a court could impose a constructive trust. This would declare that the wife held a portion of the company’s shares on trust for her parents. However, in this case, their contribution was relatively small compared to the total value, and their evidence was deemed unreliable.
• Promissory / Proprietary Estoppel: If the wife had made a clear and unequivocal promise to her parents (e.g., “this company is for your retirement”) and they had acted to their detriment in reliance on that promise (e.g., by forgoing their own retirement planning or investing all their savings), they could argue the wife was “estopped” from denying their interest. This claim also failed due to the lack of credible evidence of such a promise or significant detrimental reliance.

4. Access Thresholds and Exceptional Circumstances

This case involved a long-term marriage, so access thresholds for property settlement were not an issue. However, it highlights key principles relevant to other cases.

• Regular Thresholds: For de facto relationships, a party must generally prove a relationship of at least two years to be eligible to apply for a property settlement.
• Exceptional Channels (Crucial):
  • Family Law: As per section 90SB of the Family Law Act, a person in a de facto relationship of less than two years may still be able to make a claim if:
    • There is a child of the relationship; or
    • The applicant made substantial contributions and a failure to make an order would result in serious injustice.
  • Suggestion: This case demonstrates that even substantial financial contributions (like the parents’ initial funds) may not be enough if they are not properly documented or if the evidence surrounding them is unreliable. Do not assume a contribution automatically creates a legal right without clear evidence of the intention behind it.

5. Guidelines for Judicial and Legal Citation

Citation Angle:

It is recommended to cite this case in legal submissions or debates involving:

• The characterisation of assets held in corporate structures in family law.
• The rejection of an alleged trust or loan arrangement between family members due to inconsistent evidence and conduct.
• The application of the Briginshaw standard of proof to conflicting family testimonies.
• The principles for a “notional add-back” where a party has disposed of an asset post-separation.
• The assessment of family violence under the Kennon principle where the conduct made contributions more arduous.

Citation Method:

• As Positive Support: When arguing that a company controlled by one spouse should be treated as a matrimonial asset despite claims of a trust for a third party, citing Kaplan & Hankel can demonstrate how courts prioritise objective evidence (like personal guarantees and intermingling of funds) over undocumented verbal agreements.
• As a Distinguishing Reference: If an opposing party is trying to establish a trust based purely on oral evidence, you can distinguish their case from Kaplan & Hankel by highlighting any credible documentary evidence they lack, similar to the wife in this matter.

Anonymisation Rule: Do not use the real names of the parties; strictly use professional procedural titles such as Applicant / Respondent or Appellant / Respondent.

Conclusion

Everyone needs to understand the law and see the world through the lens of law. The in-depth analysis of this authentic judgment is intended to help everyone gradually establish a new legal mindset: True self-protection stems from the early understanding and mastery of legal rules.

Disclaimer

This article is based on the study and analysis of the public judgment of the Federal Circuit and Family Court of Australia (Kaplan & Hankel [2025] FedCFamC1F 41), aimed at promoting legal research and public understanding. The citation of relevant judgment content is limited to the scope of fair dealing for the purposes of legal research, comment, and information sharing.

The analysis, structural arrangement, and expression of views contained in this article are the original content of the author, and the copyright belongs to the author and this platform. This article does not constitute legal advice, nor should it be regarded as legal advice for any specific situation.

---

Original Case File:

👉 Can’t see the full document?
Click here to download the original judgment document.