…despite role as appointor, wife never had control of trust
In Barrett & Winnie [2022] FedCFamC1A 99 (1 July 2022), the Full Court (McClelland DCJ, Baumann & Hartnett JJ) dismissed with costs a husband’s appeal against a decision of Kent J, declining to make property adjustment orders in the context of a 14-year marriage.
Subsequent to their separation, there was an informal settlement whereby the husband demanded and received the wife’s interest in a jointly owned property ([91]). The wife was also removed as appointor of a trust called ‘the Winnie Family Trust’ in February 2008 ([100]).
The husband unsuccessfully sought to set the wife’s removal aside pursuant to s106B of the Family Law Act 1975 (Cth). Kent J excluded the trust’s property from the matrimonial asset pool, otherwise finding that the husband already retained 95.61% of the existing net asset pool.
The Full Court said (from [99]):
“The … judge accepted the evidence of … [the] respondents as to the adverse impacts of the … global financial crisis … The … judge accepted the evidence that … the … respondents … took effective action including by way of selling properties at a loss. … [T]he … judge found that a substantial part of the asset base that currently exists in the trusts … accrued in the period subsequent to the global financial crisis and … post the separation of the parties to the marriage. (…)
[137] … [T]he … judge found, as a matter of fact, that the Winnie Family Trust had never operated as or been treated as the alter ego of the [wife] (…)
[145] … [T]he … judge … appropriately had regard to the interests of other third parties and the significant contributions that they made to the trust property in determining whether it was appropriate to exercise his discretion to set aside the deed. (…)
[155] … [T]he judge, appropriately … excluded the trust property from the property pool but had regard to the trust assets as being a significant financial resource available to the [wife] …”
Craig Nicol and Keleigh Robinson are co-editors of The Family Law Book. Both are accredited specialists in family law (Queensland and Victoria, respectively). The Family Law Book is a one-volume loose-leaf and online family law service (thefamilylawbook.com.au).
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