No Valuation, Wrong Contributions: Property Orders Set Aside and Remitted for Rehearing

In Statham & Statham (No 2) [2026] FedCFamC1A 176, Riethmuller J dealt with a husband's appeal from Division 2 final property orders that transferred the only significant real property — by then vested in his trustee in bankruptcy — to the wife, leaving insufficient funds to meet the husband's debts, with each party retaining their superannuation ([1], [20]). The result: the appeal was allowed, the orders of 17 February 2026 were set aside, the proceedings were remitted for rehearing by a judge other than the primary judge, and there was no order as to costs (Orders 1–4; [42], [46]). The important point is that bare allegations and submissions are not evidence. A disputed property value cannot be fixed at $1,000,000 with no valuation and no admission ([33]–[36]); admitted financial contributions (here at least $125,000 toward purchase) cannot be ignored when contributions are assessed at 100% to the other party ([28]–[30]); and s 79(5)(m) requires the Court to consider the effect of proposed orders on a creditor's ability to recover — including an outstanding bankrupt-estate administration debt ([26]–[27]). Remitter followed because disputed post-hearing facts could not be resolved on the appeal affidavits ([40]–[42]). All paragraph references below are to the judgment.

Why it matters: Property trials after bankruptcy are hard, especially where disclosure is poor. This judgment is a practical checklist of what still cannot be skipped. Value needs evidence or an admission — a failed joint-valuation direction does not turn the other side's figure into proof ([34]–[35]). Contribution findings must face the numbers on the parties' own cases ([29]–[30]). And when a trustee sits on title, the Court must grapple with s 79(5)(m) and the estate's debts, not identify them on a balance sheet and then forget them ([26]–[27]). It also shows appellate hygiene: verbose, LLM-style grounds without particulars were abandoned; five concrete complaints were argued; three succeeded ([22]–[23]).

🧩 Facts and Issues

The parties and the asset position

Mr Statham (the appellant, 55) and Ms Statham (the first respondent, 53) commenced cohabitation in 1996, married in 1999 and divorced in 2018. They have two adult children, born in 2001 and 2003; one still lived with the wife and both were at least partly dependent on her at the final hearing ([3]).
They started with nominal assets. During the relationship the husband operated a construction company; the wife did some part-time work and was the primary homemaker ([4]–[5]).
In 2015 the husband purchased 180,000 shares in E Pty Ltd entitling him to occupy F Street, Suburb G ("the Suburb G property") for $625,000, borrowing $500,000 on mortgage ([8]). In 2016 the wife and children moved into that property. The primary judge accepted she had been told on multiple occasions that the property was hers, that she had been solely responsible for the children's expenses since 2019, and that she had met the loan repayments since 2021 ([9]).
The husband was declared bankrupt in early 2023. Other properties were sold by the trustee. Leave under s 44(3) for the wife to bring property proceedings out of time was granted by consent on 29 September 2025 ([11], [13], [15]).
By the final hearing: bankrupt-estate administration debts were around $125,000; Suburb G was subject to a mortgage with estimated net equity (on the wife's figure) of about $478,000 and legal title had vested in the trustee; the wife had about $136,885 in superannuation and the husband about $45,279 ([17]).
The husband's failure to explain his affairs was "striking" and made the primary judge's task particularly difficult ([16]).
Mr B, the trustee in bankruptcy, was the second respondent. He did not participate in the appeal and filed a Submitting Notice on 7 April 2026 ([2]).
The judgment is published under a pseudonym with approval under s 114Q(2) (cover notes). Part XIVB restrictions apply.

What the primary judge ordered

The wife was to retain the assets she held, receive the Suburb G property, take responsibility for the mortgage, rates, utilities and insurances on that property, and pay $10,000 toward the trustee's costs. Each party retained their superannuation ([20]).

The appeal

By the appeal hearing the husband had been discharged from bankruptcy (May 2026) ([21]).
The Notice of Appeal listed 12 grounds. The Summary of Argument addressed only some, in a verbose form "commonly seen as a result of using a large language model to draft grounds of appeal", without particulars identifying specific findings ([22]).
At the hearing the unrepresented husband identified five specific complaints and otherwise abandoned the grounds ([23]). Those complaints were as follows.
Late tender of mortgage-debt evidence.
Omission of the trustee's debt from the net property analysis.
Concluding the wife had made 100% of the contributions to Suburb G.
Treating her mortgage payments as reducing the loan principal when the debt had increased.
Accepting a $1,000,000 value with no valuation evidence.

Issues

Did any of the five complaints establish appealable error ([23])?
If so, could the Full Court re-exercise the discretion, or must the matter be remitted ([37]–[42])?
What costs (and any costs certificate) should follow ([43]–[46])?

⚖️ Applicable Law – Legislation, Regulations, Rules

Under the Family Law Act 1975 (Cth):

s 79 — alteration of property interests.
s 79(5)(m) — in considering what order (if any) to make, the Court must take into account the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt ([26]).
ss 79AA(12) and (13) — a bankrupt party needs leave to make submissions about vested bankruptcy property, grantable only in exceptional circumstances. The primary judge did not address leave, but exceptional circumstances existed here because the estate's assets exceeded debts and the orders sought would leave the estate with no assets from which creditors could be paid ([24]).
s 44(3) — leave to institute property proceedings out of time ([11]).
Part XIVB and s 114Q(2) — publication restrictions and pseudonym (cover notes).

Under the Federal Circuit and Family Court of Australia Act 2021 (Cth):

s 36 — appeal by way of rehearing; power to affirm, reverse, vary, or remake orders ([37]).

The costs analysis also considered the Federal Proceedings (Costs) Act 1981 (Cth) in declining a certificate for the respondent ([44]).

📌 Precedents Relied On

Allesch v Maunz (2000) 203 CLR 172 — if an appellate court re-exercises a discretion by reference to circumstances at the time of the appeal, the parties must have an opportunity to adduce evidence of those circumstances ([39]).
Sidhu v Van Dyke (2014) 251 CLR 505 — proprietary estoppel; noted as explaining why the trustee might have been willing to transfer Suburb G despite it vesting in the estate ([19]).
The appeal turns primarily on the evidence (and absence of evidence) at trial, s 79(5)(m), and contribution assessment, rather than an extended catalogue of intermediate appellate property authorities.

🧠 Analysis

Issue

Were final orders transferring the only substantial real asset from a bankrupt estate to the wife appellably wrong because value, contributions and creditor impact were not properly found — and, if so, should the Full Court re-exercise or remit?

Rule

A finding of value requires evidence or an admission. Non-cooperation with a joint valuation direction may support an inference from otherwise limited evidence; it cannot convert a bare allegation into evidence where there is no evidentiary foundation at all ([34]–[35]).
Contribution assessment must take account of undisputed financial contributions shown on the parties' own cases ([29]–[30]).
Section 79(5)(m) requires the Court to consider the effect of proposed orders on creditors' recovery ([26]).
An appeal by way of rehearing should, where reasonably open, see the discretion re-exercised to avoid remitter costs and delay — but only on current circumstances, with a proper opportunity to lead evidence ([37]–[39]).

Application

Late mortgage document: no merit

The amount of the mortgaged debt was not in dispute. The late-tendered document simply evidenced that undisputed debt. The husband did not show a realistic possibility of a different outcome on that issue ([25]).

The bankrupt-estate debt was identified, then forgotten

The primary judge listed the outstanding bankrupt-estate debt at about $125,337 on the balance sheet ([26]). When addressing the Suburb G "pool", the net figure was stated by deducting only the mortgage from the property value. Thereafter the estate debt was not referred to again, despite s 79(5)(m) ([26]). The appellant established that a relevant factor was not taken into account ([27]).

100% contributions could not stand on the wife's own purchase figures

The primary judge was persuaded that a contribution of 100% should be attributed to the wife in respect of the Suburb G pool (primary reasons as quoted at [103]; [28]). Yet it was accepted that the property was purchased with a $500,000 mortgage, and on the wife's own case the purchase price was $625,000 — so the husband had contributed $125,000 to the purchase price on the undisputed evidence ([29]). Ignoring that contribution was error ([30]).

Mortgage payments as "reducing the loan": reading in context, no separate error

The husband complained that payments of $174,000 were treated as reducing the loan when the liability had risen from $500,000 to $522,006 ([31]). Read in context, the primary judge's reasons were treated as describing the payments made, not a sustained finding that principal had been reduced. That complaint was not made out ([32]).

$1,000,000 with no valuation evidence: error

The primary judge accepted the wife and trustee's submission that Suburb G was worth $1,000,000. The husband disputed that figure. There was no valuation evidence ([33]). Counsel sought to rely on the husband's failure to participate in obtaining a joint valuation. Riethmuller J accepted that non-cooperation can permit an inference from otherwise limited evidence — but here there was no evidence of value in any affidavit and no admission ([34]). Failure to participate "cannot, without more, lead to an inference that the value alleged by another party is admitted, nor convert that bare allegation into evidence" ([35]). This complaint was made out ([36]).

Re-exercise was not open; remitter followed

Although the Court should consider re-exercising where reasonably open ([38]), a re-exercise must be based on circumstances at the time of the appeal, with an opportunity to adduce evidence (Allesch v Maunz) ([39]). Two factual disputes remained: the value of an inheritance the wife received after the final hearing, and the value of Suburb G (the husband's appeal case put it at $1,450,000). Those disputes could not be resolved on the appeal affidavits ([40]–[41]). The appeal was allowed and the matter remitted ([42]).

Costs

The husband succeeded on points of law and was unrepresented. The respondent's counsel at trial had led the primary judge into error in significant respects, including arguing for a $1,000,000 value without evidence and for 100% contributions despite the $125,000 purchase contribution on the wife's own case. No costs order was made. No costs certificate was issued in favour of the respondent. The trustee had not participated and filed no Costs Notice ([43]–[46]).

Conclusion

Appeal allowed; orders of 17 February 2026 set aside; remitted for rehearing by a different judge; no order as to costs (Orders 1–4).

This judgment does not decide the final property outcome. It does not value Suburb G. It does not fix contribution percentages. Those questions return to a Division 2 rehearing on proper evidence.

🧠 Take-Home Lesson

Submissions are not a valuation. If value is disputed, get evidence or an admission. A failed joint-valuation direction does not magic the other side's number into proof ([33]–[36]).
Contribution findings must face the purchase dollars on your own case. You cannot assess one party at 100% while the same case shows the other paid $125,000 at purchase ([28]–[30]).
Name the creditor impact, then analyse it. Identifying a bankrupt-estate debt on a balance sheet is not enough if it disappears when the "pool" and the orders are reasoned ([26]–[27]).
Remitter follows when current facts are still in dispute. Appellate re-exercise needs a proper evidentiary platform (Allesch v Maunz) ([39]–[42]).
Verbose, unparticularised grounds help no one. Concrete complaints that identify the finding and the evidence win appeals; LLM-style laundry lists get abandoned ([22]–[23]).

"Bare allegations are not evidence."

"If the numbers on your own case include the other party's cash at purchase, you cannot claim 100% of the contributions."

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