Agar & Lemus
[2025] FedCFamC1F 358
•30 May 2025]
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Agar & Lemus [2025] FedCFamC1F 358
File number(s): PAC 4571 of 2020 Judgment of: JARRETT J Date of judgment: 30 May 2025] Catchwords:
FAMILY LAW – PROPERTY– Application for an adjustment under s 79 of the Family Law Act 1975 (Cth) – Where the parties cohabitated for 13 years – Where there is a dispute about the value of real property and the inclusion of add-backs – Where there is a dispute about the assessment of contributions – Where applicant contended for equality and respondent contended for a division of 70%/30% in her favour – Just and equitable division of assets is 60%/40% per cent in the respondent’s favour.
FAMILY LAW – Application in a Proceeding – Where applicant sought leave to reopen case and lead evidence of options to purchase real property owned by the parties – Where offers are not evidence of value – Evidence of no probative weight – application in a proceeding dismissed
Legislation: Family Law Act 1975 (Cth) ss 79(4), 90XT(1)(b), 117(2A),
Family Law (Superannuation) Regulations 2001 r 7A.03
Division: Division 1 First Instance Number of paragraphs: 93 Date of hearing: 12, 13, 14 & 15 February 2024 and 10 July 2024 Place: Parramatta and Sydney Counsel for the Applicant: Ms Wheeler Solicitors for the Applicant: Mathews Folbigg Pty. Ltd. Counsel for the First Respondent: Mr Williams KC Solicitors for the First Respondent: Brouns Abrahams Burreket Counsel for the Second, Third & Fourth Respondents: Mr Heath Solicitors for the Second, Third & Fourth Respondents: Masselos & Co. ORDERS
PAC 4571 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR AGAR
Applicant
AND: MS LEMUS
First Respondent
MR B AGAR
Second Respondent
MS C AGAR (and another named in the Schedule)
Third Respondent
ORDER MADE BY:
JARRETT J
DATE OF ORDER:
30 MAY 2025]
THE COURT ORDERS THAT:
SUPERANNUATION
1.Within one hundred and twenty (120) days of the date of the making of this order the applicant and the first respondent, in their individual capacities and in their capacities as directors of E Pty Ltd, will do all acts and things and sign all documents necessary to rescind the contract for sale entered into between the applicant and the first respondent in their individual capacities and the E Pty Ltd dated November 2018, for the sale of 1 F Street, Suburb G in the state of New South Wales, being the whole of the land in folio identifier … (1 F Street Property).
2.Contemporaneously with order 1, the applicant and the first respondent will pay to Super Fund 1 the total sum of $646,512, in equal shares, in return of the deposit paid on behalf of Super Fund 1 to the applicant and the first respondent pursuant to the Contract.
3.The parties forthwith do all acts and things to remedy all compliance issues of Super Fund 1 identified by Mr H of J Company (SMSF Specialist Advisor) including but not limited to take such steps, sign such documents and provide such undertakings as Mr H advises are necessary.
4.In accordance with s 90XT(1)(b) of the Family Law Act 1975 (Cth), whenever a splittable payment becomes payable in respect of the interest of the applicant in Super Fund 1, the first respondent will be entitled to be paid 100% of each splittable payment and there will be a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for this order.
5.Order 4 has effect from the operative time and the operative time for the order is the seventh day from the date Super Fund 1 is reimbursed the Contract Deposit from the applicant and the first respondent pursuant to order 2 above.
6.In accordance with s 90XT(1)(b) of the Family Law Act 1975 (Cth), whenever a splittable payment becomes payable in respect of the interest of the first respondent in Super Fund 1, the applicant will be entitled to be paid 50% of each splittable payment and there will be a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for this order.
7.Order 6 has effect from the operative time and the operative time for the order is the tenth day from the date Super Fund 1 is reimbursed the Contract Deposit from the applicant and the first respondent pursuant to order 2 above.
8.Order 4 and order 6 binds the trustee of Super Fund 1.
9.The applicant and the first respondent will in their capacity as directors of K Pty Ltd cause K Pty Ltd to:
(a)calculate, in accordance with the requirements of the Act, the Family Law (Superannuation) Regulations 2001 and this order, the entitlement created for the first respondent in order 4 and the applicant in order 6; and
(b)issue a payment split notice in accordance with Regulation 7A.03 of the Family Law (Superannuation) Regulations 2001 in accordance with the entitlement created for the first respondent in order 4 and the applicant in order 6; and
10.After service by K Pty Ltd of the payment split notice pursuant to r 7A.03 of the Family Law (Superannuation) Regulations 2001:
(a)the first respondent will do all such acts and things and sign all such documents as may be necessary, including but not limited to requesting K Pty Ltd to transfer or rollover her benefit in K Pty Ltd to a complying self-managed superannuation fund she nominates; and
(b)the applicant will do all such acts and things and sign all such documents as may be necessary, including but not limited to requesting K Pty Ltd to transfer or rollover his benefit in Super Fund 1 to a complying self-managed superannuation fund he nominates.
11.Following the receipt of the request made by the applicant as required pursuant to order10 above, the applicant and first respondent in their capacities as Directors of the K Pty Ltd will cause a meeting of K Pty Ltd to be held in accordance with Rules of Super Fund 1, to:
(a)note receipt of the first respondent’s request to transfer her total benefit to a new complying self-managed superannuation fund;
(b)note receipt of the applicant’s request to transfer his total benefit to a new complying self-managed superannuation fund;
(c)authorise roll over to a new complying self-managed superannuation fund nominated by each of the applicant first respondent, 50% of each parcel of shares, units, managed funds, equity, security, cash or other style of investment however described within the assets held by Super Fund 1 in the manner as contemplated at order 12 below as at the date of that transfer less one half of:
(i)an amount equal to the notional calculation of tax that would be payable by Super Fund 1 in that financial year if the end of the financial year arose at the date of the roll over;
(ii)an amount equal to the calculation of the tax due or that will become due referrable to the last complete financial year;
(iii)an amount equal to the costs of complying with any obligations of K Pty Ltd to the date of the roll-over in that financial year including but not limited to the costs of implementing the super split and roll over and any compliance penalties.
12.In order to give effect to order 11(c) the in specie rollout of any single assets will be by reference to its cost base for capital gains tax purposes to the intent that the cost base in the assets rolled out will be in the same proportion as the market values of those assets.
13.For the purpose of giving effect to this order each of the applicant and the first respondent will forthwith jointly instruct a joint accountant to do all things and prepare all documents necessary to give effect to these orders and failing agreement within 14 days of the date of the making of this order, the first respondent will nominate three accountants from which the applicant will select one within a further 7 days.
14.Contemporaneously with the rollover being effected in accordance with order 11 each of the parties will do all acts and things and sign all documents as may be necessary to:
(a)resign as a member of Super Fund 1;
(b)wind up and deregister:
(i)K Pty Ltd; and
(ii)E Pty Ltd.
PROPERTY ALTERATION
15.Within fourteen (14) days from the date of the making of this order the applicant and first respondent will do all acts and things and sign all documents necessary to cause the lapsing of caveat number … over the 1 F Street Property.
16.Contemporaneously with order 17 below:
(a)the applicant will do all acts and things and sign all documents necessary to transfer to the first respondent the whole of his right title and interest in the property known as and situate at 2 F Street, Suburb G in the state of New South Wales, being the whole of the land comprised in Certificate of Title Folio Identifier … (2 F Street Property);
(b)the applicant and the first respondent will do all acts and things and sign all documents necessary and the first respondent will pay all money necessary to discharge registered mortgage number … secured on the title to the 2 F Street Property in favour of Westpac Banking Corporation.
17.No later than one hundred and twenty (120) days from the date of the making of this order, contemporaneously:
(a)the applicant and first respondent will do all acts and things and sign all documents necessary to procure from National Australia Bank the release NAB’s security over the first respondent’s term deposit account numbers ending #...11 and #...41 in relation to the 1 F Street Property;
(b)the applicant will do all acts and things and sign all documents necessary to transfer to the first respondent the whole of his right title and interest in 1 F Street Property;
(c)the applicant and the first respondent will do all acts and things and sign all documents necessary and the first respondent will pay all money necessary to discharge registered mortgage number … secured on the title to 1 F Street in favour of NAB (1 F Street Mortgage);
(d)the first respondent will pay to the applicant such amount necessary to bring the applicant’s overall entitlement to $4,700,000 (acknowledging that he presently holds $52,045.00).
18.In the event the first respondent does not receive an unconditional approval of finance for borrowings sufficient to discharge her obligations pursuant to 17(c) above within one hundred and ten (110) days from the date of the making of this order:
(a)The parties will within a further forty two (42) days do all acts and things and sign all documents necessary to market for sale and sell 1 F Street on the sale terms provided for in the document that appears at Annexure A o these orders.
(b)On settlement of any sale of 1 F Street the applicant and the first respondent will do all acts and things necessary to distribute the proceeds of sale in the following manner and priority:
(i)payment of the agent’s commission, marketing and advertising costs, auctioneer’s fees and any other expense properly incurred in respect of the sale of the property;
(ii)payment of the legal costs of sale;
(iii)payment of any amount outstanding to any water authority or local council in respect of the property not otherwise taken up as a credit in favour of the vendor;
(iv)payment of the amount required to effect a discharge of registered mortgage number … secured on the title to the property in favour of National Australia Bank (NAB);
(v)the balance then remaining in the following order:
A.to the Joint Account ending #...08 the amount of $2,500,000 to be held in that account subject to Order 24 below;
B.to the applicant – 30%; and
C.to the first respondent – 70%.
19.In the event the first respondent is in default of order 9(c), then contemporaneously with the settlement of the sale of 1 F Street, the first respondent will pay to the applicant such cash adjustment necessary to bring his overall entitlement to 40% of the net pool of assets available for alteration between the parties, as determined or $4,700,000 whichever is the greater.
SUBURB M, SUBURB O AND SUBURB Q PROPERTIES
20.Within one hundred and twenty (120) days of the date of the making of this order the first respondent will do all acts and things and sign all documents necessary to market for sale and sell each of the following properties at such price and on such conditions determined by the first respondent:
(a)the property known as and situate at L Street, Suburb M being the whole of the land comprised in Certificate of Title Folio Identifier … (Suburb M Property);
(b)the property known as and situate at N Street, Suburb O being the whole of the land comprised in Certificate of Title Folio Identifier … (Suburb O Property);
(c)in the first respondent’s capacity as trustee of P Street Trust the property known as and situate at 1 P Street, Suburb Q in the state of New South Wales being the whole of the land in folio identifier … (1 P Street Property), unless the Court declines to grant the relief sought at clause 2.4 above in which case the first respondent will retain 1 P Street, Property.
21.On settlement of the sale of the Suburb M Property the first respondent will do all acts and things necessary to distribute the proceeds of sale in the following manner and priority:
(a)payment of the agent’s commission, marketing and advertising costs, auctioneer’s fees and any other expense properly incurred in respect of the sale of the property;
(b)payment of the legal costs of sale;
(c)payment of any amount outstanding to any water authority or local council in respect of the property not otherwise taken up as a credit in favour of the vendor;
(d)payment of the amount required to effect a discharge of first registered mortgage number … secured on the title to the property in favour of R Bank;
(e)payment of the amount required to effect a discharge of second registered mortgage number … secured on the title to the property in favour of S Pty Ltd;
(f)balance then remaining to the Joint Account ending #...08 to be held in that account subject to order 24.
22.On settlement of the sale of the Suburb O Property the first respondent will do all acts and things necessary to distribute the proceeds of sale in the following manner and priority:
(a)payment of the agent’s commission, marketing and advertising costs, auctioneer’s fees and any other expense properly incurred in respect of the sale of the property;
(b)payment of the legal costs of sale;
(c)payment of any amount outstanding to any water authority or local council in respect of the property not otherwise taken up as a credit in favour of the vendor;
(d)payment of the amount required to effect a discharge of:
(i)first registered mortgage number … in favour of Mortgage To T Pty Ltd;
(ii)second registered mortgage number … in favour of Mortgage To U Pty Ltd; and
(iii)the balance then remaining to the Joint Account ending #...08 to be held in that account subject to order 24.
23.On settlement of the sale of 1 P Street, the first respondent will do all acts and things necessary to distribute the proceeds of sale in the following manner and priority:
(a)payment of the agent’s commission, marketing and advertising costs, auctioneer’s fees and any other expense properly incurred in respect of the sale of the property;
(b)payment of the legal costs of sale;
(c)payment of any amount outstanding to any water authority or local council in respect of the property not otherwise taken up as a credit in favour of the vendor;
(d)payment of the amount required to effect a discharge of registered mortgage number … secured on the title to the property in favour of V Pty Ltd; and
(e)the balance then remaining to the Joint Account ending #...08 to be held in that account subject to order 24.
24.The parties be and are hereby restrained from drawing on or otherwise transacting on the funds standing to the Joint Account other than for the purposes of meeting the following taxation liabilities on production of a Notice of Assessment issued by the Australian Taxation Office verifying the debt:
(a)Capital Gains Tax payable by the first respondent referable to the sale of W Street, Suburb X in the state of New South Wales;
(b)Capital Gains Tax payable by the first respondent referable to the sale of Y Street, Suburb Z in the state of New South Wales; and
(c)Capital Gains Tax payable by the first respondent referable to the sale of AA Street, Suburb BB in the state of New South Wales;
(d)Capital Gains Tax payable by the first respondent referable to the sale of CC Street, Suburb DD in the state of New South Wales;
(e)Capital Gains Tax payable by the [first] Lemus Family Trust referable to the sale of EE Street, Suburb FF in the state of New South Wales;
(f)Capital Gains Tax payable by the applicant and the first respondent referable to the sale of the 1 F Street Property.
25.The parties will do all acts and things and sign all documents to close the joint account within fourteen (14) days of the last payment being made pursuant to order 24 above, and in the event there is any surplus balance it will be distributed as follows:
(a)60% to the first respondent; and
(b)40% to the applicant.
26.In the event there are insufficient funds standing to the Joint Account to discharge any liability provided for in order 24 above the applicant will pay to the first respondent 40% of the shortfall.
27.Within twenty eight (28) days of the date of the making of this order the applicant and first respondent will do acts and things and sign all documents necessary to effect the wind up and deregistration of the partnership known as the AGAR & LEMUS partnership ABN ….
28.Contemporaneously with order 27 above the first respondent will do all acts and things and sign all documents necessary to:
(a)transfer to the applicant her shares held in GG Pty Ltd;
(b)assign to the applicant the whole of her right title and interest to any amount owing to her by the GG Trust or GG Pty Ltd;
(c)effect the assumption by the applicant of any amount owing by the first respondent to the GG Trust or GG Pty Ltd and the applicant will indemnify the first respondent and keep the first respondent indemnified from and against the same;
(d)otherwise forego any right or claim the first respondent may have in respect of the GG Trust whether as a potential beneficiary or otherwise.
29.Forthwith from the date of the making of this order the applicant indemnify the first respondent and keep the first respondent indemnified:
(a)from and against all claims, actions, suits or demand arising out of or in connection with the first respondent having been at any time a Director, Secretary, employee and/or shareholder of GG Pty Ltd; and
(b)from and against any liability to pay income tax referable to any income or dividend (deemed or otherwise) received by the first respondent from GG Pty Ltd and/or the GG Trust.
30.Except as otherwise provided for by this order:
(a)the applicant will indemnify and keep the first respondent indemnified in relation to all liabilities in his sole name; and
(b)the first respondent will indemnify and keep the applicant indemnified in relation to all liabilities in her sole name.
31.Other than provided for above the applicant and first respondent will be solely entitled to the exclusion of the other to all property and chattels of whatsoever nature and kind in the possession, ownership or control of each party as at the date of this order including but not limited to superannuation entitlements.
32.The Application in a Proceeding filed on 21 June 2024 be dismissed.
33.The applicant pay the first respondent’s costs of and incidental to the Application in a Proceeding filed on 21 June 2024 as agreed, and failing agreement to be assessed according to the rules.
34.Otherwise all outstanding applications, save as to costs are dismissed.
ANNEXURE TO MINUTE OF ORDER
35.The parties will:
(a)list the property for sale with such agent as agreed between the parties and failing agreement the first respondent nominate three agents from which the applicant selects one (Agents);
(b)execute all documents requested by the Agent for the sale of the property including the Agent’s contract in a form agreed upon by the applicant and the first respondent and in the event that they cannot agree on the terms of the Agent’s contract within seven days of the agent being selected, the contract is to be in the agent’s standard terms and with the agent’s standard fees;
(c)give such instructions as are necessary to a legal practitioner agreed upon by the applicant and the first respondent within seven days of the date of this order and failing agreement the first respondent shall forthwith in writing nominate two legal practitioners from which the applicant shall within a further seven days select one and failing which the first respondent will select one who shall be the legal practitioner appointed (the Legal Practitioner);
(d)unless otherwise agreed between the parties, having regard to the recommendations of the Agent, market the Property for sale by public auction on a date within six weeks of the date of the selection of the Agents (the First Auction) at a reserve price agreed between the parties and if there is no agreement, at a price recommended by the Agent;
(e)in the event that the property does not sell at the First Auction, market the property for sale with the Agents by way of private treaty for a period of 12 weeks during which time accept any offer made to purchase the Property within 5% of the reserve price of the First Auction unless the parties otherwise agree;
(f)in the event that the Property is not sold at the First Auction and is not sold in the period provided for sale by private treaty, market the Property for sale by public auction with the Agent on a date within six weeks of the date of the conclusion of the period of sale by private treaty at a reserve price agreed between the applicant and the first respondent and failing agreement at a reserve price agreed between the parties and if there is no agreement, at a price recommended by the Agent;
(g)attend any auction pursuant to this order and in the event that the reserve price set for that auction is not reached will negotiate with the highest bidder and the second highest bidder and will accept the highest offer to purchase made within 5% of the reserve price set for that auction unless the parties otherwise agree;
(h)execute the contract for sale in a form agreed to by the parties and in the event that the parties fail to agree on the terms of the contract for sale the terms recommended by the Legal Practitioner will be adopted;
(i)co-operate in every way with the Agent in relation to the sale of the Property at all times requested by the agent and ensure that the Property is in a neat and clean condition; and
(j)execute all other documents necessary to complete the sale within the time required by the contract for sale to ensure that the purchasers do not have a right to terminate or rescind due to failure to do so.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JARRETT J:
The applicant, Mr Agar (now aged 64 years) and the first respondent, Ms Lemus (now aged 58 years) commenced a relationship in December, 2003. They married in 2005 and separated on a final basis on 7 March, 2020. They are now divorced. The parties’ relationship spanned a little less than 17 years.
This proceeding initially concerned parenting orders in respect of the parties’ twin children, now aged 18 years. Soon after its commencement, claims for property adjustment were added. The parenting cause was settled and final consent parenting orders were made in August 2023.
The property adjustment cause continues. Both the applicant and the first respondent agree that it is just and equitable to make some property adjustment order between them given that their relationship and the substratum of the joint use and enjoyment of their property has failed. They cannot, however, agree upon the terms of such an order.
The second and third respondents are the applicant’s father and mother respectively. The fourth respondent is D Pty Ltd, a company to which I shall refer again later in these reasons. The second, third and fourth respondents came to be joined to the present proceeding when a separate proceeding commenced by them against the applicant and the respondent in the Supreme Court of New South Wales was transferred to this court in February 2023. The Supreme Court proceeding sought recovery of approximately $700,000.00 as debt from the applicant and the respondent. However, on the second day of the hearing before me, the applicant and the first respondent on the one hand and the second, third and fourth respondents on the other, compromised these claims. I made a consent order finalising the involvement of these respondents in this proceeding. The effect of this order finds expression in the balance sheet I have found later in these reasons.
The issues that require determination so as to inform the outcome in the proceedings concern the identification of the parties’ assets, liabilities and financial resources. Initially, there was also an issue about the extent to which the applicant contributed to the conservation and improvement of some of the first respondent’s real properties. However, by the time of final submissions, this issue had evaporated.
One of the contentious issues is the value of a certain parcel of real property owned by the parties at 1 F Street and 2 F Street, Suburb G. After the reservation of judgment, the applicant filed an application in a proceeding seeking leave to re-open his case and lead further evidence on this issue. I heard that application and reserved my decision on it. Rather than delivering separate reasons for my determination of that application, I have chosen to incorporate them into these reasons at a point which, I think, they should logically appear. For present purposes, it is sufficient to say that for the reasons that appear later, that application to re-open his case will be dismissed.
THE EVIDENCE
The case for each party was presented in a rather ramshackle way. It is as well to record the affidavit evidence relied upon by each.
The applicant relied upon those affidavits set out in his case outline belatedly filed on 7 February 2024, namely affidavits deposed by:
(a)the applicant and filed on 1 December 2023 and 27 January 2024;
(b)Ms HH filed on 30 November 2023;
(c)Ms JJ filed on 19 January 2024;
(d)Ms KK filed on 19 January 2024;
(e)Ms LL filed on 19 January 2024;
(f)Mr MM filed on 7 February 2024; and
(g)Mr NN filed on 16 January 2024.
As the issues in the application evaporated, so too did the necessity for the respondent to cross-examine many of the applicant’s witnesses. Ultimately, only the applicant, his brother and Mr MM were cross-examined. The evidence of the other witnesses was uncontroversial.
I was impressed by the applicant in cross-examination. He answered questions directly and generally speaking, without undue hesitation. He was not defensive or dissembling. He made concessions against his interest, albeit grudgingly at times. I formed the view that he gave his evidence honestly. His brother gave evidence in an unremarkable way.
The first respondent relied upon those affidavits set out in her case outline belatedly filed on 7 February 2024, namely affidavits deposed by:
(a)the first respondent filed on 10 January 2024 and 29 January 2024;
(b)Mr OO filed on 10 January 2024;
(c)Mr PP filed 10 January 2024;
(d)Ms QQ filed 10 January 2024;
(e)Mr RR filed on 10 January 2024;
(f)Mr SS filed on 9 February 2024; and
(g)Mr TT filed on 12 February 2024.
Of those witnesses, only the first respondent, Mr SS and Mr RR were cross-examined.
In addition to the parties’ material, there were also reports prepared by a single expert, Mr UU. One, in relation to a property at VV Street, Suburb WW and dated May 2022, is annexed to an affidavit by Mr UU filed on 15 March 2023. It is also exhibit 3 in the proceedings. The others, although cross-examined upon, referred to in submissions and intended to be tendered, were never tendered. I have since received them and they will be marked as exhibits 4, 5, 6, 7, 8, 9, 10 and 11in the proceedings in accordance with the schedule to these reasons.
BRIEF BACKGROUND
There is no dispute that the parties’ commenced their relationship in late 2003. However, when they commenced cohabitation is in issue. The applicant contends that they commenced to live together at the end of 2003. The first respondent contends that the parties did not commence to live together until they married in 2005. The apparent relevance of the debate about the date of cohabitation seems to lie in the suggestion by the applicant that the parties’ initial contributions should be valued as at December, 2003 and the first respondent’s suggestion that the date of marriage and cohabitation just over a year later was the appropriate date for that valuation. However, this is a sterile dispute the resolution of which is not critical to the outcome of the proceedings. The sterility of the debate is exposed by understanding that contributions to the acquisition, conservation and improvement of property are relevant whenever they occurred. Neither party could illuminate the relevance of this issue given that it was uncontroversial that the parties commenced their relationship in December, 2003. Nonetheless, to resolve this apparent dilemma, the parties agreed that the assets they had “at cohabitation be valued as at 30 June 2004”.
The applicant has two children from an earlier relationship. When the parties commenced their relationship, the children were about 7 and 9 years of age. They spent time in the parties’ household over the years.
Both parties were gainfully employed through the relationship and worked hard in their respective roles. They lived mostly in a property at 2 F Street, Suburb G, but at the time of separation, the family was living in rented accommodation nearby. The first respondent and the children returned to 2 F Street, Suburb G but later moved to the parties’ property next door at 1 F Street, Suburb G, before again retuning to 2 F Street in April 2023. The children have always remained living with the first respondent. Although they spend frequent time with the applicant, it is not extensive time, and never overnight.
Since separation, the first respondent has had the care and control of the parties’ children. They have shared , in the ways I have discussed below, servicing the property that they have between them.
It is the case that the first respondent has not lodged income tax returns for at least the past 20 years. On the eve of trial, she set about rectifying that. That, of course, will lead to a large income tax liability and penalty tax. Additionally, the parties have sold some property that is assessable for capital gains tax, but that has never been assessed either. They have also operated what is styled a self-managed superannuation fund, that is non-compliant with the relevant regulations. The consequences of that for these parties is not clear.
What is clear is that notwithstanding that the present application has been on foot since 2000, it took the imminence of a trial date to move the first respondent to decide that she must lodge her taxation returns and take some steps to crystalise what she claims to be capital gains tax liabilities rising from the sale by her of certain real estate. The unsatisfactory nature of her conduct speaks for itself.
ASSETS, LIABILITIES AND FINANCIAL RESOURCES
I find that the parties have the following assets, liabilities and financial resources:
Assets: 2 F Street Suburb G (J) $4,500,000.00 1 F Street Suburb G (J) $4,800,000.00 Bank Account XX Bank #...35 (J) $5,198.00 Motor Vehicle 1 net value after deduction car loan (H) $25,000.00 Household contents (H) $10,000.00 YY Street, Suburb ZZ (W) $5,000,000.00 L Street Suburb M (W) $1,525,000.00 N Street Suburb O (W) $1,700,000.00 1 P Street Suburb Q (W) $1,500,000.00 2 P Street, Suburb Q(W) $2,750,000.00 AB Street, Suburb AC (W) $300,000.00 Motor Vehicle 2 (W) $27,500.00 NAB Term Deposit Account #...11 (W) $1,198,885.00 NAB Term Deposit Account #...41 (W) $263,293.00 NAB account #...25 (W) $80,970.00 NAB account #...47 (W) $1,463.00 NAB account #...21 [held by P Street Trust] (W) $2,287.00 Total assets: $23,689,596.00 Liabilities: Mortgage (F Street Suburb G) (J) $1,236,240.00 Mortgage #..85 (2 F Street Suburb G) (J) $464,733.00 Mortgage #...95 (2 F Street Suburb G) (J) $1,261,400.00 Debt to the SMSF (J) $670,000.00 Loans in respect of L Street, Suburb M (W) $1,525,000.00 Loan in respect of YY Street, Suburb ZZ (W) $2,002,000.00 Loan in respect of N Street, Suburb O (W) $1,840,000.00 Loan from AD Pty Ltd (VV Street, Suburb WW) $200,000.00 Loan from AE Pty Ltd (2 P Street, Suburb Q) (W) $1,855,000.00 Loan from V Pty Ltd (1 P Street Suburb Q) (W) $1,080,000.00 Loan from AD Pty Ltd (Suburb AC) (W) $400,000.00 Unpaid Land Tax, Council Rates and Insurance (W) $22,902.00 Total liabilities: $12,557,275.00 Superannuation: Super Fund 1 (J) $670,000.00 Super Fund 2 (H) $17,045.00 Super Fund 3 (W) $30,000.00 Total superannuation: $717,045.00 Net non-superannuation assets: $11,132,321.00 Net assets incl. superannuation: $11,849,366.00
I make the following observations about the above table.
Assets
There were several iterations of a “joint balance sheet” handed up to me during the course of the trial. The final balance sheet (I think) and the one by reference to which I have formulated my reasons and orders was emailed to my associate on the last day of the trial at 1.30pm. I have made it too, an exhibit in the proceeding so that it can be easily identified. It has been marked as Exhibit “12”.
From that joint balance sheet, I have chosen to ignore a number of items. Specifically, I have not included the following items for the following reasons:
(a)the P Street Trust, the value of it seemingly being taken up in the value of the real estate at 1 P Street, Suburb Q and the proceeds of NAB account #...21;
(b)NAB Account #...08 and NAB account #...33, the balances of which are less than $200 combined;
(c)GG Pty Ltd, described as having a “nominal value”;
(d)the parties’ interests in the Agar & Lemus Partnership, also described as having a “nominal value”;
(e)the Lemus Family Trust, the value of it seemingly being taken up in the value of the real estate at AB Street, Suburb AC;
(f)the B Agar Trust, AF Pty Ltd and AG Pty Ltd which have either a nominal value or whose value is represented in other assets already on the balance sheet.
Special mention should be made of a property identified as VV Street, Suburb WW. The applicant contends that it should be brought to account, the first respondent says that it should not.
The evidence shows that the Suburb WW property is registered in the names of the respondent and her brother Mr OO as tenants in common in equal shares. It is uncontentious that Mr OO has significant mental health issues, receives a disability pension, has rarely had employment and has been the source of trouble, both within and outside of the Lemus family in the past. Before the respondent’s elderly parents moved to a nursing home, he lived with them. The first respondent would sometimes manage his finances to prevent him from gambling his money away. The parties also assisted him financially from time to time although the applicant said that he did not like some of the things that Mr OO had done.
I accept the first respondent’s evidence that at the time the parties commenced their relationship, there was an expectation within her family that Mr OO was entitled to a particular property, or part of it, situated at Suburb DD. After a number of transactions whereby real estate, including the Suburb DD property, was purchased and sold, and after the first respondent’s parents had moved to a nursing home, the first respondent caused the property at Suburb WW to be purchased. I accept her evidence that she purchased it as a residence for Mr OO using, in part, the funds that could ultimately be traced back to Suburb DD. She did not put the property entirely in his name for fear that he would lose it through one means or another. In cross-examination the applicant agreed that this course was reasonable.
I accept the first respondent’s evidence that she holds her interest in the Suburb WW property on trust for Mr OO. She has no beneficial interest in the property. I have therefore excluded it from the balance sheet.
Each of the properties set out in the balance sheet above have been valued by a single expert – Mr UU as at 24 November 2023. Save for the value of the property described as N Street, Suburb O, the value of each parcel was in issue at the trial. The applicant had obtained leave prior to the trial to rely upon an adversarial expert, Mr MM, who also gave evidence about the value of each of the disputed parcels. In each case, he ascribed a higher value to the properties than did the single expert.
In submissions, senior counsel for the first respondent submitted that the cross-examination of the two experts bore out that there was no difference between them as to their valuation methodologies “or anything else”. They both used a comparable sales model to reach their conclusions. Where they differed, particularly in relation to the properties at Suburb Q, was the nature of the comparators that were used by each to derive their opinions.
I prefer the evidence of Mr MM to that of Mr UU. Mr UU had initially valued the relevant property in May 2022. He then updated his valuations in November 2023. When he completed his update, rather than looking for other comparable sales that occurred between May 2022 and November 2023, he simply updated his previous valuation by applying some “statistics” compiled by an organisation called “AH Company”. Mr UU accepted that those statistics were a compilation of many things rather than having a direct relationship with a particular property or sale.
I was impressed by Mr MM’s approach. Whilst it did not necessarily compare “apples with apples” as Mr UU put it, and it represented out “out of the square thinking”, Mr MM’s explanation for adopting his rationale was coherent and persuasive. His methodology looked to the potential of each property having regard to other sales in the near vicinity (and notwithstanding different zonings) rather than simply relying upon historical sales adjusted by the application of some “statistics”. I thought that Mr MM’s approach demonstrated a maturity of thought that sought to recognise the potential for each property. I find that the property set out in the balance sheet have the values I have ascribed to them.
The application to reopen
On 21 June, 2024, the applicant filed an application in a proceeding seeking to reopen the evidence while judgment was reserved. The evidence the applicant sought to adduce related to an offer made on the properties located at 1 F-2 F Street, Suburb G. In short, the applicant’s evidence is as follows:
•A developer has expressed interest in purchasing several of the properties along the street of the properties at [1 F-2 F Street, Suburb G];
•The developer has engaged the owners of the other properties in option agreements, one for $11.5 million ([3 F Street]) and two for $17.95 million ([4 F] and [5 F Street]); and
•The same developer has offered a $14 million option agreement for the properties at [1 F] and [2 F Street] combined.
The applicant relied upon an affidavit of himself, four affidavits of his neighbours and sought further to rely on evidence of the developer which was unfiled at the time of the hearing of his interlocutory application.
In Reid v Brett [2005] VSC 18 the Supreme Court of Victoria canvassed the well settled principles relating to reopening the evidence and provided a convenient summary of the relevant principles:
41.The criteria governing the exercise of the discretionary power to re-open a case to admit further evidence where the hearing has concluded but judgment has not been delivered have been said to be as follows:
(a)the further evidence is so material that the interests of justice require its admission;
(b)the further evidence, if accepted, would most probably affect the result of the case;
(c)the further evidence could not by reasonable diligence have been discovered earlier; and
(d)no prejudice would ensue to the other party by reason of the late admission of the further evidence.
In Smith v New South Wales Bar Association, the High Court of Australia stated that in such a situation it was difficult to see why "the primary consideration should not be that of embarrassment or prejudice to the other side."
Given the evidence relates to an offer to purchase the subject properties made since the trial, it is uncontroversial that it could not by reasonable diligence have been discovered earlier.
The applicant’s case outline suggested that the evidence he wished to adduce would, if accepted, establish that the value of the properties is so much greater than any of the opinion evidence before the Court at trial, that to permit the first respondent to retain the properties at even the highest value proved at trial would cause serious injustice to the applicant. However, at the hearing of the application, Senior Counsel for the applicant resiled from that claim, for good reason. Evidence of an unconcluded contract is not admissible to prove value: Smith & Smith (1991) 15 Fam LR 206. The evidence holds even less value where it is an offer for an option agreement, the developer being under no obligation to call on the option.
Instead, Senior Counsel for the applicant argued that the evidence went some way to support the orders sought by the applicant at trial that the properties at 1 F-2 F Street, Suburb G should be sold. I was referred to the decision of Smith & Smith (above) to support that proposition. In that case, the Full Court of the Family Court of Australia (as this Court then was) refused an application to admit fresh evidence on appeal in substantially similar circumstances to this. However, the Court ultimately decided to allow the appeal because the primary judge, feeling obliged to arrive at a valuation in circumstances where he considered that the evidence did not enable him to do so, accepted evidence of a valuer that his Honour had previously rejected. The Full Court said that instead, the primary judge should have ordered the sale of the property to allow market forces to determine its value.
The difficulty with the applicant’s argument is that the property value was already significantly in dispute at the time of the trial. There was evidence from Mr MM and Mr UU, both of whom were cross-examined in the course of the trial. They both took into account development potential of the properties. Both were aware of a past option agreement for $20 million which had been offered in 2021. It could not be said that this new evidence would most probably affect the outcome of the case.
The first respondent seemed to intimate that the 2021 option agreement was not, in fact, a genuine offer. The applicant may say this new evidence does some work to refute that intimation, but the relevance of such a point is very minimal. The probative value of an offered and not executed option agreement is very low. In my view, the interests of justice do not require the reopening of the evidence. The application in a proceeding will be dismissed.
The first respondent sought an order for indemnity costs in the event I dismissed the application. No submission was made in support of the costs being on an indemnity basis other than that the application should never have been brought. The application was wholly unsuccessful: s 117(2A)(e) Family Law Act 1975 (Cth). The first respondent should have their costs on a party and party basis. The first respondent’s costs notice filed 9 July, 2024 only set out the costs actually incurred. The order will therefore be for the applicant to pay the first respondent’s costs of and incidental to the application in a proceeding filed 21 June, 2024 as agreed, and failing agreement to be assessed according to the rules.
Addbacks
The applicant argues that post-separation, the first respondent has increased her borrowings and that in doing so, she has acted unreasonably with a view to depleting the pool of property available for division in these proceedings.
The first respondent provides what I considered to be a comprehensive explanation for that increase in borrowings. Her affidavit of evidence-in-chief sets out in detail how that increase in borrowings has come about. She was not effectively cross-examined about these matters and her evidence about them remains intact. I accept it unreservedly. Some of the borrowed funds were used to purchase further real property. In that respect, counsel for the applicant submitted that. “It matters not that the assets that acquired post-separation are added in, because the wife’s position is, “I bought these other properties”, but the problem with that is that she goes and buys a vacant block of land in Queensland. She buys properties which don’t provide any income, so she simply increases the debt, and any benefit in that balance sheet when you look at the wife’s figure just today is lost on a daily basis”. I don’t quite understand that submission given that the capital assets purchased with some of the borrowed funds are included in the asset pool. To the extent that the argument is that the assets purchased are not income earning assets and therefore are not “paying their way” as it were, that is not a reason to “add back” any increase in liabilities post separation.
I do not accept that is appropriate to add back items 31–36 of exhibit “12”.
It is uncontroversial that in September 2023 the applicant received an interim payment distribution of $300,000. His evidence in cross-examination was that $250,000 of that was paid to his lawyers, presumably for his legal costs of these proceedings. Oddly, having regard to item 37 of the joint balance sheet (exhibit 12) it is the applicant who contends that this sum should be added back and credited to his side of the ledger. The first respondent does not.
Items 38–42 appear to be legal costs paid by the first respondent in respect of these and perhaps other proceedings. There is no evidence in chief about these matters nor was the first respondent cross-examined about them. Neither party made submissions about them. I am left with no clue about what they are. I can speculate that at least some of the entries relate to the legal costs of these proceedings given the identity of the lawyers who have from time to time acted for the first respondent in these proceedings.
Given that the first respondent does not contend for the adding back to the pool of the applicant’s interim payment and I am unable to reach a conclusion about items 38–42, I have concluded that I should not include any of those items in the balance sheet.
Finally, the applicant seeks that the balance of certain credit accounts held by him at the date of separation (and which have since been paid through the use of loans from his father) should be included as an addback because it is a liability to which both parties should contribute. The only evidence on this point is to be found at paragraph 304 of the applicant’s affidavit filed 27 January 2024. In the absence of any submissions to support an assertion that this is a legitimate addback, having regard to the principles that apply for that purpose, I am not satisfied that these amounts are appropriate addbacks.
Liabilities
The joint balance sheet tendered at the conclusion of the trial contains details of a number of loans secured over the various parcels of real property set out in that balance sheet. The first respondent has included the value of the debt asserted by her in each case. The applicant ascribes similar values (the same values in most cases) but says in a note to items 49 – 57 “The husband has included the figure in the balance sheet but subject to the wife disclosing the relevant bank statements for the asserted debts and borrowing”. No reference to this was made by the applicant’s counsel in submissions and I take it from that, that the amounts contended for by the first respondent are agreed.
The first respondent claims that she has liabilities to her brother Mr OO of $251,428 and $485,000 which she says is “reflected in [1 P Street Suburb Q]”. Although the first respondent gave evidence-in-chief about the purchase of this property and how the purchase price was funded it was not explained how the alleged liability to her brother arises, especially in circumstances where she asserted, and I have found, that she holds her interest in the Suburb WW property on trust for her brother. There is no explanation in the first respondent’s outline of case document or in the oral submissions made on her behalf at the conclusion of the trial for these liabilities. That is despite the liabilities clearly being in issue on the last version of the joint balance sheet. Her brother gave no evidence of these liabilities in his evidence-in-chief. The first respondent does not discharge the onus of proof upon her to satisfy me on the balance of probabilities that the liabilities exist. I have not included them on the balance sheet above.
The first respondent seeks the inclusion of the post-separation balance of a credit card in the sum of $34,435. No explanation for the inclusion of this liability is advanced. Having regard to the first respondent’s post-separation receipt of income from her various properties and the increase in her borrowings post-separation, in the absence of a detailed explanation for it, the inclusion of this amount is not reasonable. I have excluded it.
Similarly, the first respondent claims that she owes a person named Ms AJ (referred to as “[Ms AJ]” in the first respondent's affidavit of evidence-in-chief) $75,000. The only evidence that deals with this is to be found in paragraph 309 of the first respondent’s affidavit of evidence-in-chief. The sum total of her evidence is “[Ms AJ] $75,000 which she loaned to me this year to assist with my cash flow.” The only oral submission made about this item was that the first respondent was not challenged “on that”. Given the lack of particularity of this conclusionary statement it is not surprising that the first respondent was not cross-examined upon it in any detail. When asked if there was a “loan document for that”, the first respondent responded that “I’ve provided one to my lawyer”. It, however, has not found its way into evidence. There is no evidence from “[Ms AJ]” and there is no explanation for the absence of evidence from her. In fact, the first respondent was challenged on the debt because the applicant did not accept the debt having regard to the joint balance sheet tendered at the conclusion of the trial. That lack of acceptance signified in the joint balance sheet, puts the first respondent to proof on that issue. I am not satisfied on the balance of probabilities that this liability exists.
I have already recounted above that the first respondent has not lodged income tax returns for about 20 years. The parties are in agreement that the as yet un-assessed and unpaid tax liability should be taken into account in these proceedings. In the draft orders contended for by each party, they propose a mechanism whereby money is quarantined for the purposes of discharging the first respondent’s liability for past income tax. Just how much that will be is anybody’s guess. There is no evidence before me which would suggest even the wildest estimate of that liability.
At the hearing of the matter, I was told that the first respondent intended to remedy this situation and steps were on foot for her returns to be prepared and lodged. Notwithstanding the time that has passed since the hearing of this application, remarkably, there has been no application by the first respondent to reopen her case to lead evidence about these matters and provide some precision to the amount of her tax liability.
In the circumstances, it is impossible to include an item on the balance sheet for this contingent liability.
The first respondent also seeks the inclusion of items on the balance sheet to cover as yet unassessed and unpaid capital gains tax upon the sale of five properties – W Street, Suburb X; Y Street, Suburb Z; AA Street, Suburb BB; CC Street, Suburb DD and EE Street, Suburb FF. The first respondent relied upon the evidence of Mr SS, a qualified public accountant and fellow of the Institute of Public Accountants. Mr SS provided an estimate of the capital gains tax that might be payable in respect of these five properties together with an estimate of the capital gains tax that might be payable in respect of the properties presently owned by the parties or the first respondent and which might be sold as a consequence of any orders the Court might make. As to the five properties identified above, Mr SS estimated capital gains tax liability at $927,074. However, I am not prepared to give this estimate any weight. Cross-examination of Mr SS revealed that there were many assumptions underlying his calculations, some of which were not made out in the evidence and there were many variables about which he had no information and which might necessarily and radically affect his assessment.
I am not satisfied that I should include the potential capital gains tax on the properties that have already been sold and those that might be sold after orders are made because the evidence about that potential liability is so imprecise as to be weightless. In the draft orders proposed by the parties, they each propose a mechanism to take into account any capital gains tax liability that is in fact assessed and for which the first respondent has a liability. In circumstances of the case, that is really the only course that is open and given that those liabilities will be taken into account when they are assessed, there is no scope for the consideration of these under s 75(2) of the Act.
The first respondent seeks the inclusion of any general interest charge and other penalty tax that might be assessed against her when she gets around to lodging her income tax returns and accounting for the capital gains to which I have just referred. Mr SS assesses this potential liability at about $832,933. Again, for the reasons I have already expressed I do not consider that this assessment attracts any probative value. In any event, I am not persuaded that it is appropriate to include such an item on the balance sheet such that the parties share that liability between them. The applicant’s evidence is that it was the first respondent’s decision alone not to lodge income tax returns. I accept his evidence about this. I find that it was the first respondent’s own decision, made despite the applicant’s protestations to the contrary, not to lodge her income tax returns. The consequences of that should fall at her feet and her feet alone. Whilst it was said in submissions by senior counsel for the first respondent that the parties enjoyed the benefits of the “tax-free” lifestyle and therefore the general interest charge and penalties should be shared, because I have taken into account and there will be a mechanism to take into account the tax liability to cover the tax payable for the years of “tax-free living” the applicant will not escape that liability. The general interest charge and the penalty tax is something for which the first respondent and the first respondent alone is responsible. I have not included that amount in the balance sheet.
Superannuation
The parties’ superannuation interests require special comment. The parties established a self-managed superannuation fund by deed dated 12 August 2015. It was intended to be a self-managed superannuation fund. The applicant and the first respondent are the only members. The trustee of the fund is a company of which both the applicant and the first respondent are the only directors and shareholders. The parties made various cash contributions to the self-managed superannuation fund.
In November 2018 the applicant and the first respondent resolved to sell the property that they had purchased at 1 F Street, Suburb G to the superannuation fund for the sum of $1,950,000. Settlement of the contract was initially agreed to occur in January, 2019 but as the parties anticipated, the self-managed superannuation fund was not able to pay the balance purchase price. By a series of transactions explained by the first respondent in her affidavit of evidence-in-chief, both the applicant and the first respondent accessed other superannuation funds (accumulation accounts held by them) and used those funds to assist the self-managed superannuation fund to meet to make payments towards its obligations under the contract for the purchase of 1 F Street. Ultimately, that contract has not been completed.
The parties agree that as a result of this transaction there were monies paid out of the self-managed superannuation fund to the parties or entities controlled by the first respondent. There is also agreement that the self-managed superannuation fund is not compliant with the relevant regulations. The parties agree that the amount taken from the self-managed superannuation fund needs to be replenished. The parties disagree about the amount taken from the superannuation fund – the applicant contending that it was $770,000 and the first respondent contending that it was $670,000. I think that the first respondent’s contention is correct and that the applicant is mistaken because he has not accounted for a transaction that was clearly reversed in the fund’s records. I am satisfied that the amount that needs to be replenished to the fund is $670,000.
The parties are also in fierce disagreement about who should replenish that money. The applicant contends that the first respondent should pay that money back to the self-managed superannuation fund whereas the first respondent contends that it should be an item on the balance sheet in respect of which both parties share. I prefer the first respondent’s argument on this point. Her affidavit of evidence-in-chief clearly sets out the transactions relevant to this issue, where the funds received by the parties went and how they were utilised by them. None of this was the subject of any serious challenge in cross-examination or otherwise and I accept the first respondent’s evidence about it. I am satisfied that I should include the amount of $670,000 on the balance sheet as a liability of each of the parties to the self-managed superannuation fund. It is self-evident of course that that then means there is an asset item of superannuation to be included as well.
The values of the parties’ commercial accumulation funds are agreed.
SECTIONS 79(4)(A), (B) AND (C)
At the commencement of the relationship, the applicant was employed as a professional for the fourth respondent, then known as AK Pty Ltd. He has been employed by that company throughout the parties’ relationship and up to the date of the trial. He is employed as a professional.
The applicant and his brother are directors of the fourth respondent, but not shareholders. The shareholder of the company is the trustee of the applicant’s parent's family trust, the B Agar Family Trust.
The first respondent’s case is that the applicant is the managing director of the fourth respondent and has been so since “he took control of (sic) from his parents more than 30 years ago”. She seems to equate this with an entitlement to enjoy, perhaps at his discretion, the profits of the business conducted by the company, irrespective of the underlying shareholding and trust arrangements. The first respondent’s argument is that when the applicant completed his qualification equivalent to the “[…] Diploma level” he obtained a professional Licence. She argues that the applicant’s father never held such qualifications and therefore “he could only operate as an agent for a small number of companies in co-operation with other companies”. Thus, she opines, although the shares in the fourth respondent are held on behalf of the applicant’s parents trust, “given their age, health and inability to use a computer, [the applicant’s] parents have not had any meaningful involvement in the business in the last 30 years.”
However, I cannot accept these arguments because there is simply no evidence of much of what she asserts. Whilst I accept that she too, worked for the fourth respondent in a minor administrative role, she gives no evidence of her observations of the day-to-day conduct of the business or the involvement of the applicant’s father. Her argument seems to be built upon a number of assumptions based around the qualifications necessary to carry on a business of the type in issue here. There is nothing in the evidence to make good her assertions. Perhaps recognising this, there were no submissions made at the conclusion of the trial to support these assertions made by the first respondent in her affidavit of evidence-in-chief.
The applicant’s brother, Mr NN is the chief financial officer of the fourth respondent. The applicant and Mr NN are the only two children of their parents. It is uncontroversial that they are both directors of the fourth respondent and they are, by dint of that position, the decision makers about matters relating to the business. However, there is no evidence to support the first respondent’s assertion that they also control the B Agar Family Trust, of which the fourth respondent is the corporate trustee.
After the parties’ relationship commenced, the first respondent took up employment with the fourth respondent, although just when, is not clear. Over the course of her employment with the fourth respondent she was paid a wage that was paid into the parties’ joint account. The applicant’s evidence is that she did not perform any, or very much work for fourth respondent. Rather, she used its facilities from which to conduct her own enterprise. These claims do not require resolution.
The first respondent, a qualified professional, worked as a professional before the parties’ relationship commenced. However, by the time they began their relationship, the first respondent was a self-employed real estate investor. She had educated herself on property investment and developed an investment strategy that she applied throughout the parties’ relationship and since. She had been running a hospitality business from one of the properties that she owned since about 2002.
It is uncontentious and I am satisfied that at the commencement of cohabitation, the first respondent held assets worth about $1.6m as follows:
(a)a 25% share in CC Street, Suburb DD, with an equity of about $19,000;
(b)W Street, Suburb X purchased in 2001 for $865,000 subject to a mortgage of $692,000, which has been retrospectively valued at $1,450,000 with a mortgage balance of $640,000 for a net equity of $810,000;
(c)Y Street, Suburb Z purchased in 2001 for $150,000 subject to a mortgage of $120,000, retrospectively valued for these proceedings at $190,000 with a mortgage balance of $110,955 for a net equity of $79,045;
(d)L Street, Suburb M purchased in 2002 for $475,000 subject to a mortgage of $380,000, retrospectively valued for these proceedings at $515,000 with a mortgage balance of $362,000 for a net equity of $153,000; and
(e)YY Street, Suburb ZZ purchased in 2002 for $2,050,000, subsequently subdivided and retrospectively valued as at $1,275,000 with a mortgage balance of $717,500 for a net equity of $557,500.
I accept that at the commencement of the relationship, the applicant had savings of about $5,000 together with a car worth about $15,000 and superannuation of about $90,000 (the first respondent says it was about $80,000 but the difference now is immaterial).
During the course of the relationship all of the above properties save for two (Suburb M and Suburb ZZ) have been sold and the proceeds utilised by the parties for the purchase of further property. The applicant argues that the value or significance of the first respondent’s initial contributions are diluted by the incidence of capital gains tax that might be assessed against the sale of those properties in due course. Whilst I accept the force of that submission, it is impossible to tell what that effect might be having regard to the state of the evidence about the capital gains tax issue.
Despite the various contentions to the contrary by the first respondent in her affidavits and case outline, she effectively conceded that the parties’ contributions during the relationship should be seen as relatively equal. Senior counsel for the first respondent expressly made that concession in submissions. The concession was well made. Despite all of the factual disputes that the parties have chosen to raise against each other in their affidavit material, none of it demonstrates that one party made greater contribution than the other during the course of their relationship. It is certainly the case that their contributions were different and in some respects separate, but that does not translate in this case to a finding that one made a greater contribution than the other.
Since separation, the children have lived with the first respondent and spend time with the applicant in accordance with their wishes, which, save for one or two nights in the period since separation is daytime only about four times per week. The applicant pays the family health insurance premiums and has been paying half of the children’s school fees and one of the children’s musical tuition. Otherwise, I accept that the first respondent has met almost exclusively their sole needs, emotional and otherwise.
The first respondent has borne the preponderance of the significant property costs incurred in respect of the parties’ holdings. Save for the income that was applied to the joint NAB loan, the applicant has retained his income and the first respondent has otherwise serviced all of the loans, whether from income or borrowings. She has met all of the holding costs, as well as the applicant’s share of land tax. These are significant contributions on her part to the property pool as it presently exists. I accept that the applicant did provide some contribution to the property at 1 F Street, Suburb G by attending to an issue with the grease trap, but beyond that his contributions to the conservation and maintenance of the properties held by the parties at the time of separation have been otherwise non-existent.
Counsel for the applicant contended that when I take up all of the multifarious contributions made by the parties over a long marriage such as this, and up to the date of separation, I would conclude that equality of contribution overall was appropriate and “it should not be disturbed from that”. This submission cavilled with the proposition that the disparity in initial contributions should feature in the contribution-based assessment in favour of the first respondent. But I cannot accept that submission because, notwithstanding the length of the parties’ relationship, the disparity between the property brought to the relationship by the first respondent and that by the applicant is significant. More than that, at least two of those parcels of real property remain in the parties’ possession and have increased significantly in value.
The first respondent submits an overall division of 70/30 in her favour, with her senior counsel submitting that “during the marriage of about 13 years, [there should be] a finding of equal contributions. The initial contributions on behalf of the wife, post-separation contributions and the potential for a 75(2)(o) adjustment, which I will come to, those three items are the differential”. When pressed, he submitted that the parties’ contribution-based assessment should be seen as 65% in the first respondent’s favour.
In my view, the parties contribution based entitlement ought to be assessed as at the date of trial as 40% to the applicant and 60% to the first respondent. The contributions made by her both at the beginning and since the end of the parties’ relationship are significant and greater than the contributions made by the applicant. Those greater contributions require reflection in the contribution based assessment. To conclude that at the date of the trial the parties contributions ought to be assessed as equal would, notwithstanding the length of the parties relationship, ignore those greater contributions. To give them greater weight than I have, however, would be to undervalue, I think, the contributions made by the applicant during the course of the relationship which has assisted the parties to both maintain and grow their assets.
On that basis and having regard to the balance sheet as I have found it to be, the applicant is entitled to $4,739,746.40 and the first respondent is entitled to $7,109,619.60.
SECTIONS 79(4)(D), (E), (F) AND (G)
The applicant does not argue that any adjustment to take into account any of the matters that arise under ss 79(4)(d), (e), (f) and (g) is necessary. However, that position is taken on the basis that I would otherwise assess the parties’ contributions as at the date of the trial as equal. I have not done so.
The first respondent is presently 58 years old and claims to suffer from a range of physical and mental health issues. She has been referred to a cardiologist for tests of her heart although the results of those test were not in evidence. These conditions had not prevented the first respondent from actively pursuing property investment in the running of a boarding house. I am not satisfied that they will preclude her from doing so in the future.
The applicant will remain in the employment of his family’s company. There is nothing to suggest that this is not secure.
The first respondent has continued to care for the parties’ children although I note that they are now 18 years of age. The first respondent also feels responsible to care for her brother, Mr OO. As I have indicated above, Mr OO has his own assets including a place to live.
I take into account that the first respondent will have a liability for general interest charge on her unpaid tax as well as the real possibility of penalty tax being imposed upon her. There is an assessment before me about how much that might be but I am not persuaded that it is accurate. It depends upon so many variables that the opinion in relation to it carries no probative weight.
In addition, by reason of the orders pronounced by me on 13 February 2024 the applicant has a liability to his parents, Mr B and Ms C Agar of $555,399 and a liability to D Pty Ltd of $26,601. Pursuant to those orders the first respondent also has a liability to Mr B and Ms C Agar of $280,000 and a liability to D Pty Ltd $20,000.
Having regard to the above matters and having regard to the capital with which each of these parties will be left given my contribution-based assessment, I am not satisfied that any further adjustment to that assessment is appropriate.
ORDERS
On the basis of the foregoing, the applicant is entitled to $4,739,746.40 which I will round to $4,750,000 and the first respondent is entitled to the balance of $7,149,366.00.
There is a contest between the parties about whether the first respondent should retain the properties at 1 F Street and 2 F Street, Suburb G. The applicant argues that they should be sold because they are likely to achieve a higher price than the valuations that are in evidence. However, I have accepted the evidence led by the applicant from Mr MM about the value of those properties. It was the applicant’s case that those two properties were worth the amount ascribed to them by Mr MM and in those circumstances there is no reason why, having accepted those values, the first respondent should not retain them at that value.
The orders proposed by the first respondent principally require the transfer of the property at 1F Street, Suburb G to her and in return she pays to the applicant an amount of money sufficient for the husband to receive his overall entitlement. The orders as she proposes times that payment to occur no later than 120 days from the date making of the order or “within 14 days of the contract rescission provided for by clause 1”. That contract rescission relates to rectification of parties’ self-managed superannuation fund. I do not understand the need for the timing of the payment to the applicant to be tied to the payment contemplated in the first respondent’s orders in that respect. I have deleted that requirement such that the relevant transfer and payment (and the clearing of other encumbrances) is to occur no later than 120 days from the date making of the order.
The orders proposed by the first respondent provide for a mechanism whereby the capital gains tax that is likely to be payable upon the sale of the properties presently under her control can be assessed and paid. She does not wish to keep those properties as is evidenced by the orders that she now proposes. In those circumstances it is likely, I find that the capital gains tax liability will arise in the immediate future.
The orders proposed by each of the parties require the rectification of the separate self-managed superannuation fund and thereafter a superannuation splitting order. Although there are differences between the orders proposed by each of the parties, the substance of them is the same. I have set out above my reasons for concluding that party should contribute jointly to the restoration of the superannuation fund and the orders provided by the first respondent are consistent with that.
I am satisfied that orders in terms of the draft proposed by the first respondent will carry into effect the conclusions that I have reached in the reasons above (save for an adjustment to the parties ultimate entitlements). Such other orders are, in all the circumstances, just and equitable.
I make orders are set out at the commencement of these reasons.
I certify that the preceding ninety-three (93) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Jarrett. Associate:
Dated: 2 June 2025
SCHEDULE OF PARTIES
PAC 4571 of 2020 Respondents
Fourth Respondent:
D PTY LTD
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