Judge Says No to Slicing the Case: Mihova's Request for Piecemeal Hearing Denied in Fiery Family Property Battle
🧾 Introduction
In Mihova & Mihova (No 2) [2025] FedCFamC1F 284, Justice Schonell faced a procedural skirmish in a deeply entangled financial family law dispute. The case revolved around whether the Court should allow a separate determination of specific property and financial issues before a full trial. With multiple parties, corporate structures, and claims of misappropriated millions, the Court was asked to intervene early to potentially narrow the trial scope. The judge, however, took a cautionary stance, dismissing the application for being inconsistent with the objectives of just, efficient, and proportionate litigation.
📌 Facts and Issues
🔍 Facts
- Proceedings commenced by the wife in December 2024 under Part VIII of the Family Law Act 1975 (Cth), involving complex financial claims and multiple parties, including two companies and the parties' son.
- The first, second, and third respondents sought a ruling on various issues regarding property ownership and the movement of $10.8 million in disputed funds.
- The applicant and the fourth and fifth respondents (the son and a related company) opposed the request, arguing it would not lead to time or cost savings and would require credit findings.
⚖️ Issues
- Whether separate determination of proposed issues under rule 10.10 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 would serve the overarching purpose of litigation as defined in s 95 of the Family Law Act 1975 (Cth).
- Whether the complexity of facts and the potential need for credibility assessments made it inappropriate for the issues to be determined separately.
- Whether proceeding with a segmented trial would risk inefficiencies, delay, or appeals.
📚 Application of Law
The Court applied Rules 10.10 and 10.11 of the Family Law Rules, which allow for the separate decision of issues if it would:
- dispose of all or part of a proceeding,
- make a trial unnecessary or shorter, or
- save substantial costs.
Justice Schonell also considered s 95 of the Family Law Act 1975, which outlines that proceedings should be resolved justly, efficiently, proportionately, and in a timely manner.
The Judge referenced multiple cases, including:
- Tepko Pty Ltd v Water Board (2001) 206 CLR 1 at [170] – cautioning against separate questions unless utility and fairness are beyond doubt.
- Southwell v Bennett [2010] NSWSC 1372 – emphasising that separate questions should not involve overlapping factual issues or credit assessments.
- City of Swan v Lehman Brothers Australia Ltd [2009] FCA 784 – warning that preliminary decisions can encourage appeals and delay.
- Warragamba Winery Pty Ltd v New South Wales [2010] NSWSC 66 – highlighting risks of judicial disqualification if credibility is assessed in parts.
🧠 Analysis of Judgment
Justice Schonell dismissed the application, citing:
- Early procedural stage: No pleadings had been filed, and facts were not agreed upon.
- Risk of inefficiency: Assertions of a quick separate hearing contradicted earlier statements estimating a five-day duration.
- Potential for credibility findings: If separate hearings required the judge to assess witness credibility (especially among family members), it would risk disqualification from later hearings.
- Likelihood of overlapping evidence: The same witnesses would need to be called again, increasing the risk of inconsistent findings and appeals.
- No certainty of saving costs or narrowing issues: The parties’ "insatiable proclivity to litigate" undermined the claim that separate determination would lead to early resolution.
Justice Schonell reinforced that the discretion to order separate issues should be approached "with caution", citing Perre v Apand Pty Ltd and Idoport Pty Ltd v National Australia Bank Ltd as guiding authorities against premature fragmentation of proceedings.
🎓 Take-Home Lesson
Strategic litigation manoeuvres must align with the overarching purpose of family law proceedings. Seeking early decisions on select issues may seem expedient, but where facts are disputed, and credibility is central, courts are reluctant to separate proceedings. This case reaffirms that fragmentation can be counterproductive—especially when trust and family dynamics are under scrutiny. Efficiency in family law demands not speed at any cost, but rather proportionality, integrity, and procedural clarity.
