Property Settlement and Spousal Maintenance Appeals: Lessons from *Shun & Chiu* [2024]

Shun & Chiu: The Legal Battle of Property and Liabilities

Introduction

In the appeal of *Shun & Chiu* [2024], the Federal Circuit and Family Court of Australia was tasked with determining whether errors in property valuations, liabilities, and asset division were made by the primary judge. The appellant (husband) contended that property values and liabilities were incorrectly determined, impacting the fairness of the property settlement and spousal maintenance. However, the appellate court found no merit in these claims and dismissed the appeal. This case underscores the importance of presenting clear and consistent evidence in family law disputes and adhering to procedural rules for successful appeals.

Facts of the Case

The parties in *Shun & Chiu* were involved in a dispute over the division of property and claims for spousal maintenance following their separation. The primary judge found that the couple's asset pool consisted of three properties worth $2,665,000, but these were heavily burdened by mortgages and debts, leaving a net liability of over $400,000. The properties were owned by the wife, and she had additional loans from family and friends amounting to over $800,000. The husband challenged these figures on appeal, arguing that the properties were undervalued and that certain liabilities should not have been included.

Issues

The key issues in the appeal were:

1. Whether the primary judge erred in accepting the valuations of the wife’s properties.

2. Whether liabilities associated with the properties and loans from the wife’s friends and family should have been included.

3. Whether the judge should have used an asset-by-asset approach rather than a global approach in dividing the property.

4. Whether the primary judge failed to address claims related to the wife’s receipt of rent for the properties.

Applicable Legislation and Rules

• Family Law Act 1975 (Cth)**: Governs property settlement and spousal maintenance matters in family law disputes.
• Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) Div 7.1.5**: Outlines evidentiary requirements and procedural rules relevant to family law cases.
• Limitation Act 1969 (NSW) ss 14, 54**: Relevant to the appellant’s challenge regarding the statute of limitations on the wife’s loans from her parents.

Analysis

1. Property Valuation:

The husband’s appeal focused on challenging the valuation of the properties based on outdated figures from 2020. However, the appellate court found that the husband had agreed to these valuations during the trial, and the note referencing different values was unsupported by admissible evidence. The court relied on *Makita (Australia) Pty Ltd v Sprowles* (2001), which highlights the importance of adhering to evidentiary standards, particularly the use of expert valuations in family law cases.

2. Inclusion of Liabilities:  

The primary judge included liabilities for overdue council, water, and strata rates owed by the wife. The husband argued these should not be included because the wife was receiving rent from tenants. However, there was no evidence showing that rental income was sufficient to cover these debts. The court upheld the primary judge’s finding that these were legitimate liabilities, citing *Water Board v Moustakas* (1988) to affirm that challenges to uncontroverted evidence cannot be raised on appeal without sufficient basis.

3. Asset-by-Asset Approach:  

The husband argued that the judge should have adopted an asset-by-asset approach to dividing the property rather than a global approach. However, since the judge had determined that no property division was just and equitable, this issue did not arise for serious consideration. The court emphasized that such arguments must be raised clearly during the trial, citing *Metwally v University of Wollongong* (1985).

4. Loans from Family and Friends:  

The husband contended that loans made to the wife post-separation should not have been considered liabilities. However, the court found that these loans were properly evidenced and corroborated through bank statements and affidavits. Additionally, the appellant's argument that the loan from the wife’s parents was barred under the Limitation Act failed because it was not raised at trial, in line with principles from *Suttor v Gundowda Pty Ltd* (1950).

Conclusion

The appellate court found that the primary judge had correctly valued the properties, properly accounted for liabilities, and did not err in the approach to property division. The husband’s failure to raise objections during trial or present admissible evidence during the appeal was a critical factor in the dismissal. The appeal was dismissed, and the husband was ordered to pay the respondent’s costs.

Takeaway Lesson

This case highlights the necessity of properly raising and evidencing claims during the initial trial phase in family law cases. Appeals must be based on grounds that were clearly raised and supported by admissible evidence during the trial. Procedural missteps, such as failing to introduce key evidence or raising issues too late, can be fatal to an appeal.