Tuesday, May 25, 2021

When family law courts recognise spouses have (gone) ‘Fishing** for documents’

Today’s post looks at a Family Court decision regarding beneficial interests in property proceedings following a matrimonial breakdown.

In the case of MacDowell & Williams and Ors [2012] FamCA 479, the court denied the request for disclosure of the wills and documents relating to the corporate and trust structures of the wife’s parents. 

The wife and the husband married in April 2004 and separated on a final basis on 12 July 2010. The husband had submitted that the documents requested were relevant to the marital property pool and in determining the financial resources available to the wife. 

The wife’s parents filed an objection to the husband’s request on the basis that: 
  1. the documents sought from them in their personal capacity were not relevant as they maintained testamentary capacity; and
  2. the documents sought from them in their capacity as directors were not relevant as neither the wife nor the husband had any proprietary interest.
In relation to the parents’ wills, the court said the request was a ‘fishing expedition’ by the husband. Although there may be compelling circumstances which warrant the disclosure of will documents (for example, when a parent has lost capacity), here, both parents were alive, in good health and possessed full testamentary capacity. 

In relation to the financial and corporate documents, it was held that there was no evidence to suggest that the wife had control over any of the entities, or that control was likely to arise in the future. 

This lack of control was contrasted with the case of Keach (which has featured in previous posts) where the husband did have significant involvement with a trust and it was held to be his financial resource. 

The court then considered the previous distributions of one trust where the wife was both the primary and default beneficiary. Given, however, that the wife had only received $28,000 over the ten years of the existence of the trust, and during that time, distributions had also been made to other beneficiaries of the trust, the court held that it was clearly ‘discretionary’ in nature. 

The husband also sought to rely on purported interpretation of Kennon v Spry [2008] HCA 56 (again see previous posts) and argue that the wife’s interest in the trust were property, that being her ‘right to consideration’ and ‘due administration’. 

The court held in favour of the wife’s parents that this was a misstatement of the law on this point and that while such rights could be taken into account, they would generally be very difficult to value. 

The court also bluntly distinguished Spry by noting that Dr Spry had total ultimate control of the trust in question, which was not the case here. 

As usual, please contact me if you would like access to any of the content mentioned in this post. 

** for the trainspotters, ‘Gone fishing’ is riffed from the Stereophonics song ‘Bartender and the thief’. View hear (sic):