By Antony Kahn, Consultant & Lola Crivelli, Law Clerk
Mr Farrar appealed the decision of the primary judge to divide all of the available property between his two previous de facto partners, effectively leaving him with nothing. The Full Court of the Federal Circuit and Family Court of Australia, constituted by Tree, Baumann and Williams JJ, dismissed Mr Farrar’s appeal and upheld the orders of the primary judge.
Background
Mr Farrar lived in a de facto relationship with Ms Cisek from November 1999 until at latest June 2015. There were two children of their relationship.
Mr Farrar perpetrated family violence against Ms Cisek during their relationship, which escalated around the time of separation and following separation. The most significant incidents of family violence led to Mr Farrar being incarcerated for a period of 99 days following the parties’ separation.
Following his stint in prison, Mr Farrar commenced a de facto relationship with Ms Elsner. Ms Elsner was in her eighties at the time the relationship commenced. She was much older than Mr Farrar. Ms Elsner was married, and she decided to leave her husband for Mr Farrar.
Mr Farrar and Ms Elsner lived briefly in a de facto relationship from October 2016 until September 2017. Their relationship ended after Ms Elsner moved into a nursing home.
Primary judge’s decision
This case involved significant and deliberate financial non-disclosure by Mr Farrar. At trial, the primary judge was unable to identify or quantify the assets available for adjustment between the three parties to the proceeding.
However, it was established at trial that Ms Elsner had advanced more than $2,200,000 to Mr Farrar and that he had used $625,711 of this sum to pay off the mortgage over the home he had lived in with Ms Cisek during their relationship.
At trial, the identifiable property pool consisted of the home registered in Mr Farrar’s name worth around $1,350,000 (and now mortgage free), and Mr Farrar’s superannuation entitlement of approximately $118,000.
With respect to Mr Farrar’s non-disclosure, the primary judge found at [186] as follows:
“[Mr Farrar’s] non-disclosure is so great, and his evidence so unreliable, that the Court cannot ascertain the whereabouts and/or application of those funds in the sole control of [Mr Farrar] as derived from [Ms Elsner]. But they exceed or equate to the monies to be shared by each of [Ms Cisek] and [Ms Elsner].”
Having regard to the evidence of the parties (and credibility issues related to Mr Farrar’s evidence), and Mr Farrar’s incarceration following proven serious family violence incidents, the primary judge made a significant adjustment in favour of Ms Cisek on account of the arduous circumstances in which she made her contributions to the relationship, relying on the principles established by Kennon & Kennon (1997) FLC 92-757.
Coupled with the significant disparity in the respective incomes of Mr Farrar and Ms Cisek (the latter of whom was in receipt of a government benefit), was the fact that Mr Farrar stood to benefit significantly under Ms Elsner’s Will. Ms Elsner had lost testamentary capacity by the time of the trial, and was therefore no longer capable of changing her Will.
The primary judge determined that the home would be sold and that upon settlement of the sale, Ms Elsner would receive $625,711 by way of reimbursement of the funds of hers that had been applied in reduction of the mortgage, and that Ms Cisek would receive the balance of the net proceeds. Ms Cisek would also receive the entirety of Mr Farrar’s superannuation.
Appeal judgment
On appeal, Mr Farrar sought to argue that an outcome which effectively divided all the assets between Ms Cisek and Ms Elsner and left him with nothing, could not be “just and equitable” as required by section 79(2) of the Family Law Act 1975.
While Mr Farrar did not seek to cavil with Ms Elsner’s entitlement, he sought to argue that the significant Kennon adjustment received by Ms Cisek was not warranted in circumstances where the family violence took place around the time of separation and following separation, rather than during the relationship when Ms Cisek was making her contributions.
The appeal court was satisfied that the conclusion reached by the primary judge that Mr Farrar had perpetrated family violence against Ms Cisek both during the relationship and subsequent to separation was well open to the primary judge. Relevantly, at [28] and [29] of its judgment, the appeal court found that:
“The extent and nature of the family violence found by her Honour allows a clear inference to be made, as her Honour did, of “the required nexus between proven family violence and the significant adverse effect upon the contributions of the victim” (Benson & Drury [2020] FamCAFC 303; (2020) FLC 93-998 at [49]).
Furthermore, at the time of separation [Ms Cisek] was still undertaking a primary carer role for the daughter of the parties (then 13 years of age) so that contributions post separation (when some of the violent events occurred) was still likely to have been made more arduous (see Keating & Keating [2019] FamCAFC 46; (2019) FLC 93-894 at [33]).”
In circumstances where approximately $1,300,000 of the monies given to Mr Farrar by Ms Elsner remained unaccounted for, the appeal court found that the primary judge’s decision to effectively divide 100% of all available property between Ms Cisek and Ms Elsner was reasonably open to her Honour given Mr Farrar’s deliberate and significant non-disclosure and in the context of Ms Cisek’s contributions to the relationship having been made in difficult circumstances and where Mr Farrar’s income was vastly superior to Ms Cisek’s income and where he stood to benefit under Ms Elsner’s Will in due course.
Mr Farrar’s appeal was dismissed by the Full Court and he was ordered to pay the costs of Ms Cisek and Ms Elsner of the appeal.
Practical insights
This case illustrates the broad discretion available to the Court to do justice and equity in circumstances where a party has failed or refused to provide financial disclosure. This case also reminds us that a Kennon adjustment is also available to post-separation contributions made by a party.
If you require assistance with respect to financial matters arising out of the breakdown of a marriage or de facto relationship, please do not hesitate to contact one of our experienced family lawyers.
(03) 9605 1700