Case Summary: Shehu & Vicario [2026] FedCFamC1A 49
Dayana Merkla
Shehu & Vicario concerned an appeal from property settlement orders made after the husband’s death in proceedings that had been commenced during his lifetime and continued against his estate. The primary judge, sitting in the Supreme Court of New South Wales and exercising jurisdiction under Pt VIII of the Family Law Act 1975, divided a net property pool of approximately $153 million by awarding 27.5 per cent to the wife and 72.5 per cent to the husband’s estate. The estate appealed, and the wife cross-appealed.
Facts
The parties commenced their relationship in 2010. The primary judge found that they were predominantly living together by late 2011, married in late 2014, and separated in September or October 2020. The wife commenced property proceedings in November 2020. After the husband died in early 2022, the proceedings continued against his estate in the context of related estate litigation.
Issues on Appeal
The appeal raised whether:
- the primary judge erred in finding that cohabitation commenced in late 2011.
- the wife’s non-financial contributions had been properly characterised and weighed.
- the overall 27.5/72.5 division was outside the permissible range of discretionary outcomes.
- a discount to CGT liability based on possible rollover relief was supported by evidence; and
- certain items were correctly included in the balance sheet.
Reasoning
The appellate court applied orthodox appellate principles governing discretionary judgments, including those stated in House v The King. It did not disturb the finding that the parties were living together by late 2011, nor did it identify appellable error in the inclusion of certain balance-sheet items.
However, the court concluded that the overall percentage division was unreasonable or plainly unjust. In substance, the primary judge’s evaluative treatment of contributions yielded an outcome that was excessively favourable to the wife having regard to the scale of the husband’s financial contributions and the source of the asset pool. The court also held that the discount applied to a CGT liability on the assumption of possible rollover relief lacked an adequate evidentiary foundation. That error materially affected the property settlement outcome.
Outcome
The appeal was allowed and the cross-appeal dismissed. Re-exercising the discretion, the appellate court altered the division to 80 per cent to the estate and 20 per cent to the wife. It also varied consequential orders, including by providing for the wife to receive a proportionate benefit if CGT rollover relief was in fact later obtained on the relevant corporate winding-up.
Significance
The decision illustrates two recurring principles in large-asset property cases. First, although contribution assessments are evaluative, the ultimate percentage outcome must remain within the bounds of a legally supportable discretionary judgment. Secondly, tax adjustments (including assumed CGT rollover relief) must be grounded in evidence and not speculation.