Antonescu & Antonescu (No 2)
[2024] FedCFamC1F 596
•6 September 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Antonescu & Antonescu (No 2) [2024] FedCFamC1F 596
File number: SYC 1697 of 2023 Judgment of: CAMPTON J Date of judgment: 6 September 2024 Catchwords: FAMILY LAW – PROPERTY – MAJOR COMPLEX FINANCIAL PROCEEDING – Property adjustment pursuant to s 79 of the Family Law Act 1975 (Cth) – Where the husband made direct financial contributions – Where the husband’s parents’ corporation was gifted in stages to the husband and his brother equally, and the husband then acquired his brothers shares – Where the corporation provided income enabling the parties to accumulate significant wealth – Where the homemaking and parenting contributions of the wife are not to be undervalued – Where the husband’s contributions by way of the stewardship of the corporation by way of its improvement and development could not have been achieved without the contributions of the wife – Where the parties separated almost 10 years ago – Where the husband controlled the patrimony after separation – Where the husband has re‑partnered and utilised the property of the parties for the benefit of he and his new partner – Where the husband failed to adhere to his disclosure obligations including secreting property – Where those failures handicap findings as to the husband’s interest in property acquired with his new partner and resulted in property of the parties used by the husband after separation being unaccounted for – Orders made adjusting the property of the parties 52.5 per cent to the husband and 47.5 per cent to the wife. Legislation: Family Law Act 1975 (Cth) s 79
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) ch 6, r 3.01
Cases cited: Bevan & Bevan (2013) FLC 93-545; [2013] FamCAFC 116
Calverley v Green (1984) 155 CLR 242; [1984] HCA 81
Chang v Su (2002) FLC 93-117; [2002] FamCA 156
Horrigan & Horrigan [2020] FamCAFC 25
Jabour & Jabour (2019) FLC 93-898; [2019] FamCAFC 78
Katsilis v Broken Hill Pty Co Ltd (1977) 18 ALR 181
Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17
Pierce & Pierce (1999) FLC 92-844; [1998] FamCA 74
Purkess v Crittenden (1965) 114 CLR 164; [1965] HCA 34
Stanford & Stanford (2012) 247 CLR 108; [2012] HCA 52
Vetter v Lake Macquarie City Council (2001) 202 CLR 439; [2001] HCA 12
Weir and Weir (1993) FLC 92-338; [1992] FamCA 69
Division: Division 1 First Instance Number of paragraphs: 238 Date of hearing: 26–29, 30 August 2024 Place: Sydney Counsel for the Applicant: Mr Cummings SC with Mr Weightman Solicitor for the Applicant: Long Saad Woodbridge Lawyers Counsel for the Respondent: Mr Lethbridge SC with Ms Dart Solicitor for the Respondent: King Cain Solicitors ORDERS
SYC 1697 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS ANTONESCU
Applicant
AND: MR ANTONESCU
Respondent
ORDER MADE BY:
CAMPTON J
DATE OF ORDER:
6 SEPTEMBER 2024
BY CONSENT THE COURT ORDERS THAT:
1.Within 90 days of the making of these orders and simultaneously:
(a)The Husband shall do all acts and things and sign all documents necessary to transfer to the Wife all of his right title and interest in the property situate and known as R Street, Suburb S in the State of New South Wales contained in Folio Identifier … (the "Suburb S Property"), and the Wife shall thereafter retain the Suburb S Property to the exclusion of the Husband and the Wife will indemnify the Husband as against any future liability or debt associated with the Suburb S Property;
(b)The Husband shall do all acts and things and sign all documents to discharge of all mortgages and encumbrances presently registered over the Suburb S Property at the cost of the Husband;
(c)The Husband shall do all acts and things and sign all documents to discharge the mortgage from the National Australia Bank (BSB: … Account number: …46) at the cost of the Husband.
2.Pending the transfer of the Suburb S property per Order 1 above:
(a)the Husband shall be solely responsible for and pay as and when due and indemnify the Wife in respect of all rates, utilities and statutory outgoings, including but not limited to land tax and strata levies, for the Suburb S property;
(b)each party be hereby restrained from encumbering and/or dealing with their respective interest in the Suburb S property without prior written consent of the other party; and
(c)the Wife shall have the right of sole occupation and enjoyment of the Suburb S property and the Husband shall not enter upon the property.
3.Following the transfer of the Suburb S property per Order 1 above, the Wife shall be solely responsible for and pay as and when due and indemnify the Husband in respect of all rates, utilities, insurances and outgoings including but not limited to land tax and strata levies for the Suburb S property.
4.The parties forthwith instruct N Pty Ltd (“N Pty Ltd”) for the Antonescu Superannuation Fund ("the Fund") to complete such tax returns and Business Activity Statements for the Fund as may be outstanding.
5.The parties forthwith do all acts and things to cause the sale of all shares in listed companies held by the Fund.
6.Upon the sale of the shares in compliance with Order 5, the parties instruct N Pty Ltd to calculate any tax payable as a result of the sale of the shares referred to in Order 5 (“the anticipated tax”).
7.The parties cause a bank account to be opened in the name of the Fund (“the anticipated tax account”) and deposit an amount of cash into that account which is equivalent to the amount of the anticipated tax, with such cash to be paid to the Australian Tax Office upon assessment of tax payable by the Fund for the 2024/2025 financial year.
8.Pursuant to s 90XT(1)(b) of the Act, whenever a splittable payment becomes payable from the Fund, the Husband is to be allocated 100 per cent of the Wife’s interest in the Fund, calculated in accordance with Part 6 of the Regulations, and that there is a corresponding reduction in the entitlement that the Wife would have in the Fund but for these orders, and for this purpose:
(a)The operative time that this order shall take effect is 90 days after the making of these orders;
(b)This order binds the Fund Trustee;
(c)The parties shall, in their capacities as directors of the Fund Trustee, do all acts and things and sign all documents necessary to cause N Pty Ltd to:
(i)Calculate, in accordance with the requirements of the Act and the Regulations, the entitlement created for the Husband in accordance with these orders; and
(ii)Pay the entitlement to the Husband whenever the Fund Trustee makes a splittable payment out of the Wife's interest in the Fund.
9.Pursuant to s 90XT(1)(b) of the Act, whenever a splittable payment becomes payable from the Fund, the Wife is to be allocated 50 per cent of the Husband’s interest in the Fund (with the amount contained in the anticipated tax account to be excluded from the calculation of entitlements), calculated in accordance with Part 6 of the Regulations, and that there is a corresponding reduction in the entitlement that the Husband would have in the Fund but for these orders, and for this purpose:
(a)The operative time that this order shall take effect is 91 days after the making of these orders;
(b)This order binds the Fund Trustee;
(c)The parties shall, in their capacities as directors of the Fund Trustee, do all acts and things and sign all documents necessary to cause N Pty Ltd to:
(i)Calculate, in accordance with the requirements of the Act and the Regulations, the entitlement created for the Wife in accordance with these orders; and
(ii)Pay the entitlement to the Wife whenever the Fund Trustee makes a splittable payment out of the Husband's interest in the Fund.
10.Upon satisfaction of Order 9, the Wife shall roll out her interest in the Fund.
11.Within 7 days of the roll out of the Wife’s interest in the fund in accordance with order 11, the parties shall do all acts and things and sign all documents necessary to cause a meeting of the Fund to be held in accordance with the Rules of the Trust Deed for the Fund, and at this meeting:
(a)the parties shall do all acts and things and sign all such documents as may be necessary at the Husband’s cost for:
(i)the Wife to cease to be a member of the Fund;
(ii)the Wife resign as a director of the Fund Trustee; and
(iii)The Wife to transfer her shareholding in the Fund Trustee to the Husband.
12.Pending Orders 8, 9, and 10, each party is restrained from dealing with, charging, encumbering or disposing of any property of the Fund other than in accordance with these orders.
13.Within 14 days of the date of these orders the Husband shall do all things necessary to cause Motor Vehicle 1 to be transferred to the sole name of the Wife free from encumbrance and the Wife shall hereby indemnify and keep indemnified the Husband in relation to all liabilities in respect of the motor vehicle whenever and however arising.
14.Within 14 days of the date of these orders and unless otherwise provided in these orders, each of the parties do all acts and sign all documents necessary to cause all accounts held in their joint names with banks, credit unions or other financial institutions to be closed and any account balances in credit to be divided equally between the parties.
15.Except as specifically provided for by an order to the contrary, as against the Husband, the Wife is the sole owner of and the Husband has no interest in all other property, including superannuation, of whatsoever nature and kind in the name and possession of the Wife as at the date of the making of these orders, including but not limited to the following:
(a)Funds held in bank accounts (including the sale proceeds of the property at T Street, Town U);
(b)Shares; and
(c)Household contents and personal effects.
16.Except as specifically provided for by an order to the contrary, as against the Wife, the Husband is the sole owner of and the Wife has no interest in all other property, including superannuation, of whatsoever nature and kind in the name and possession of the Husband as at the date of the making of these orders, including but not limited to the following:
(a)Real estate, as follows:
(i)V Street, Town D NSW
(ii)W Street, Suburb X, NSW
(iii)B Street, Town D, NSW
(iv)2 B Street, Town D, NSW
(v)Y Street, Town D, NSW
(vi)Z Street, Town AA, NSW
(vii)BB Street, Suburb CC, NSW
(viii)1 DD Street, Suburb EE, NSW
(ix)2 DD Street, Suburb EE, NSW
(x)FF Street, Town GG, QLD
(xi)Property P, USA
(b)Funds held in bank accounts;
(c)Shares in private and public companies;
(d)Household contents and personal effects; and
(e)The Husband's interest in the entities and trusts as follows:
(i)G Investments Pty Ltd;
(ii)H Pty Ltd;
(iii)F Pty Ltd;
(iv)Antonescu Investment Trust;
(v)Antonescu Investments Pty Ltd;
(vi)Antonescu Finance Pty Ltd; and
(vii)Antonescu Management Pty Ltd.
17.From the date of these orders, the Husband shall be solely responsible for and pay as and when due, and indemnify the Wife in respect of all companies and trusts in relation to which the Husband has an interest, including but not limited to the companies and trust set out at Order 16(e) above, in relation to all business expenses and liabilities including but not limited to income tax and any balance standing to the Wife’s name (in part or in whole) in any loan account referrable to any of the above entities.
18.As and from the making of these orders, the Wife indemnify the Husband and keep the Husband indemnified from and in respect of all actions, claims, suits and demands (past, present and future) in relation to any and all monies owing or payable whatsoever in the name of the Wife or for which she is responsible (including in her name, jointly or with any other person or entity) and including but not limited to monies payable for tax including any and all imposts and penalties or otherwise.
19.As and from the making of these orders, notwithstanding all other orders herein, the Husband shall be solely responsible for and pay as and when due and indemnify the Wife in respect of all liabilities which may arise in relation to F Pty Ltd, including but not limited to any liabilities to HH Finance.
20.As and from the making of these orders, the Husband indemnify the Wife and keep the Wife indemnified from and in respect of all actions, claims, suits and demands (past, present and future) in relation to any and all monies owing or payable whatsoever in the name of the Husband or for which he is responsible (including in his name, jointly or with any other person or entity) and including but not limited to monies payable for tax including any and all imposts and penalties or otherwise.
21.In the event that either party refuses or neglects to execute any deed or instrument necessary to give effect to these orders then the Registrar of the court be appointed pursuant to s 106A of the Family Law Act 1975 (Cth) to execute such deed or instrument in the name of the defaulting party and to do all acts and things necessary to give validity and operation to the deed or instrument.
THE COURT FURTHER ORDERS THAT:
22.The husband pay to the wife $6,434,600 (the adjusting sum) by instalments as follows:
(a)On or before 7 March 2025, $3,500,000; and
(b)On or before 5 September 2025, the balance of $2,934,600.
23.The husband pay to the wife interest on such part of the adjusting sum as remains outstanding from 7 March 2025 until the date that the specified sum is paid in full calculated at the rate prescribed by the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
24.Subject to the above orders, save as to costs, all outstanding Applications and Responses thereto are dismissed.
25.Should a party make an application for costs of or incidental to these proceedings, they are to file and serve within 28 days of the date of these orders an Application in a Proceeding specifying the orders sought as to costs and any affidavit in support thereof. In that event, orders will be made in chambers as to the filing of any Response to the Application in a Proceeding for costs and affidavit in support thereof, together with outlines and written submissions, with the costs application to be listed on a date to be fixed.
26.If neither party files an Application in a Proceeding pursuant to Order 25, any outstanding application for costs is dismissed.
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 the pseudonym Antonescu & Antonescu has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CAMPTON J:
By way of an Initiating Application filed on 13 March 2023, Ms Antonescu (“the wife”) commenced proceedings in the Federal Circuit and Family Court of Australia (Division 2) seeking orders for the adjustment of property pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”). By way of a Response to an Initiating Application filed on 16 June 2023, Mr Antonescu (“the husband”) sought different orders as to the adjustment of property. On 7 December 2023 the proceedings were transferred to the Federal Circuit and Family Court (Division 1) and were placed in the Major Complex Financial Proceedings list.
The parties commenced cohabitation in 1985 and married in 1986. There are two children of the marriage, both of whom are now adults. The husband contends that the parties separated in October 2014 and remained living under one roof until mid-2015, when he vacated the home. The wife contends separation occurred upon the husband leaving the home in mid-2015. Nothing turns on the determination of the date of separation. The parties are not divorced.
The husband commenced a relationship with Ms KK (“Ms KK”) in late 2015. They commenced cohabitation in late 2016 and ceased living in the same residence in late 2022. It was agreed that their de facto relationship has not terminated. Ms KK was a witness in the husband’s case.
During the trial the parties broadly agreed as to how their property would be divided in specie in terms of the Minute of Order as sought by the wife (Exhibit 2). They disagreed as to the value of an adjusting sum to be paid by the husband to the wife. The payment terms are dependent on the value of the adjusting sum. Consent orders will be made in terms of paragraphs 1 – 3 and 5 – 22 of Exhibit 2, broadly providing for:
(a)The husband to transfer to the wife his interest in her residence at Suburb S, for he to discharge the mortgage secured upon the property and for he to transfer to the wife Motor Vehicle 1;
(b)A series of superannuation splitting orders of both parties’ member entitlements in the Antonescu Superannuation Fund to equalise their entitlements in that fund and for the wife then to roll out her interest in the fund; and
(c)For the parties to otherwise retain their current real and other property.
The wife sought that the property of the parties be adjusted in 55 per cent in her favour, and 45 per cent to the husband, equating this to a dollar adjusting sum that the husband pays to her of $7,900,000. The husband sought to receive 70 per cent of the property of the parties, and for the wife to receive 30 per cent, equating this in a dollar adjusting sum for him to pay to the wife of $1,845,000.
For the reasons that follow the husband shall pay to the wife the adjusting sum of $6,434,600 by instalments, the first being $3,500,000 on or before 7 March 2025 and the balance on or before 5 September 2025. Such amount of the primary sum as remains unpaid after 7 March 2025 shall accrue interest at the rate prescribed by the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”).
BACKGROUND
The parties adduced evidence by way of a joint chronology (Exhibit 10) recording agreed facts.
The wife was born in 1962 and is currently 62 years old. The husband was born in 1963 and is currently 61 years old.
In 1904 the husband’s great grandfather commenced an enterprise known as JJ Business. That enterprise operated until 1962. The husband’s father joined it in 1956.
In 1978 F Pty Ltd (“F Pty Ltd”) was incorporated. It operated businesses in Town D NSW. It is currently wholly owned and controlled by the husband, holding passive investment assets, including real property, and conducting a trading enterprise by way of another business, basing its operations from B Street, Town D (“the B Street property”).
In 1983, when the husband was 21 years old, he commenced at F Pty Ltd as a salesman. He progressed through to become a sales manager. In 2003 he became a principal. He remains as the principal.
In 1983 the husband purchased a property at MM Street, Town D NSW (“the MM Street property”) for $41,000, funded by his savings and a mortgage of $30,000. The property was leased.
The parties commenced cohabitation in mid-1985. At that time the wife was working as a secretary at LL Company. The husband remained a salesman at F Pty Ltd.
In 1985 the parties completed the purchase of a property at Y Street, Town D NSW (“the Y Street property”) for $75,000, funded by $15,000 from the husband’s savings and a mortgage loan of $60,000.
The parties married in 1996.
It was the husband’s unchallenged evidence, and I find, that in 1988 the then unencumbered MM Street property was sold for $41,500. There was no evidence as to the source of funds applied to discharge the mortgage.
In 1989 the husband purchased a property at NN Street, Town D NSW (“the NN Street property”).
Z Street, Town AA
In 1990 the husband’s mother transferred to him a real property at Z Street, Town AA (“the Z Street property”). In his affidavit the husband said:
64.The total purchase price was provided to me by my mother as an interest free loan. The loan agreement was not documented.
65.I am now unsure how much was paid on the purchase as from what is stated in my mother’s Will it could have been $92,000 instead of the $105,000 shown on the Transfer.
66.I do not recall the specifics of the transaction other than there was no provision for the loan’s repayment other than in general terms that I “pay it back when you can”.
67. At no time were any repayments made to my parents in respect of this loan.
In her affidavit the wife said:
99.In 1990 we purchased the property at [Z Street, Town AA] for $105,000 from [the husband’s] mother and father. We paid from marital funds for that property…
Neither party was cross-examined on this subject matter. The summary affidavit evidence of each party adduced few particulars. The passage of time as to events 34 years ago and the fact of these proceedings may have distorted the memory of each party.
Each party adduced affidavit evidence as to the husband’s mother paying monies to them to reacquire the property in either 1995 or 1996. The husband said:
70.… [The husband’s mother] said to me words to the effect “I will buy ([Z Street]) back from you so you can stay there for your holidays”.
71.…It was an informal agreement. There was no Contract for Sale and the property remained in my name.
72.Thereafter the property was used as a holiday home for our family and my parents utilised their property next door for holidays.
The wife said:
99.…The title remained in [the husband’s] name. [The husband’s] siblings were very annoyed that the title remained in [the husband’s] name. After [the husband’s mother] transferred us the “purchase monies” the property was then used by the family in general and understood by the family to be for family use…
Neither party was cross-examined on the 1990 or the 1995/1996 transactions. The parties continued to receive rental income produced by the property after the 1995/1996 transaction.
To support his version of the terms of the 1990 transfer, the husband adduced evidence of the grant of probate of his late mother’s estate dated 2019. The grant included her will made in 2017. The will records:
5.9I release [THE HUSBAND] from the debt of NINETY TWO THOUSAND DOLLARS [sic] ($92,000) in relation to the property known as [Z Street, Town AA].
The 1990 transfer records the value of the property at $105,000. This is not the value of the “loan” the husband asserted was the entire acquisition cost in 1990.
It was uncontroversial at trial that, if the husband’s mother was the beneficial owner of the Z Street property at the date of her death, it would form part of her estate for probate purposes. It was not recorded as the property of the husband’s late mother in the grant of probate. The husband was one of the executors of his late mother’s estate (Exhibit 28). In the event it was, it was agreed that it would have comprised part of the residue of her estate. The terms of the grant of probate required that residue to be distributed the husband and his two siblings.
There was no evidence adduced as to why the Z Street property was not recorded as an asset of the husband’s late mother’s estate in the grant of probate, or as to any arrangement between the husband and his siblings for he to receive the whole of the Z Street property from the estate. Notwithstanding, the balance sheet of the parties records the husband as the sole legal and beneficial owner of that property.
It is possible to speculate that the proceeds of sale of the MM Street property, coupled with income, may have been one source to fund the acquisition in 1990 of the Z Street property. This was not submitted by the wife to support her version of the 1990 transaction.
Absent explanation, it is prima facie illogical for the husband to be indebted to his mother by way of the 1990 transfer value of the property, whether it is $92,000 or $105,000, and for his mother to then pay him that same value in 1995 or 1996, rather than setting off the transfer of the property in her favour at that time against the contended 1990 loan due to her.
In submissions each party conceded that the evidence as to the familial arrangements made as to the Z Street property between 29 and 34 years ago was inconsistent and unclear, as were the anomalies as to the nexus between that property and the husband’s late mother’s estate. The metes and bounds of those arrangements on the evidence are not capable of proof to the requisite standard to permit the specific findings as sought by either party. I find that, on the evidence of either party, the arrangement with the husband’s mother provided funds to the parties and ultimately provided the property itself, all be it achieved by uncertain processes.
Further background
The parties’ eldest child was born in 1990. At the time of this birth the wife was employed as a supervisor at LL Company. The wife took a year of maternity leave. She then ceased paid employment and commenced as the primary homemaker and carer for the child.
In 1991 the husband’s brother, Mr OO (“Mr OO”) transferred his half interest in the NN Street property to the wife.
The parties’ youngest child was born in 1993.
In 1995 8,333 redeemable preference shares in F Pty Ltd were issued to the husband. In cross‑examination the husband said that he did not know he that he had received these shares. In 1997 the 8,333 shares held by him, were redeemed “out of profits”. The husband said that he was not aware of the resumption and did not receive any funds from it.
In 1996 the parties completed the purchase of a property at PP Street, Town D (“the PP Street property”) for $211,000 funded by way of their savings.
In 1997 the parties purchased a property at QQ Street, Town RR (“the QQ Street property”).
In 1997 the wife transferred her interest in the Y Street property to the husband.
In 1997 the husband and Mr OO purchased a property at 3 B Street, Town D.
In late 1997 the husband and Mr OO became directors of F Pty Ltd.
In 1998 the parties purchased a real property at SS Street, Town TT (“the Town TT property”).
In 1998 the Y Street property was sold for $180,000.
In 1999 the parties purchased a property at T Street, Town U (“the T Street property”). Their home was subsequently built on this property where they lived until separation.
In 2000 the parties sold the PP Street property for $237,000.
In 2001, the NN Street property was sold.
In 2002 F Pty Ltd purchased a property at UU Street, Town D for the purpose of storing stock and equipment for the business.
In 2002 the husband and Mr OO purchased VV Street, Town AA (“the VV Street property”) for $405,000.
In 2003 the husband became principal of the F Pty Ltd franchise.
In 2004 the husband’s mother transferred the husband and Mr OO one class A share each in F Pty Ltd. The Standard Transfer Form recorded a consideration of $62,888 for the husband’s mother’s share. The husband said, and I find, that no consideration was paid, the share being gifted to the husband. It was agreed that the husband then held 25 per cent of the controlling shares in F Pty Ltd.
In 2004 the QQ Street property was sold.
In 2004 the property at 3 B Street, Town D was transferred to Antonescu Investments and Antonescu (No 2) Investments. The property was thereafter leased by F Pty Ltd and another company.
In 2005 HH Pty Ltd was incorporated. The husband holds four of the 10 issued shares. It trades as J Business in Town D.
In 2006 the parties purchased a real property at WW Street, Town D (“the WW Street property”).
In 2007 the husband and Mr OO purchased a real property at XX Street, Town YY (“the XX Street property”).
In 2007 the husband and Mr OO purchased a real property at 4 B Street, Town D (“the 4 B Street property”).
In 2008 the wife commenced employment at F Pty Ltd, earning $600 per week.
In 2008 the parties purchased a real property at 2 B Street, Town D (“the 2 B Street property”).
In 2009 the husband and Mr OO purchased a real property at ZZ Street, Town D (“the ZZ Street property”). During 2010 F Pty Ltd purchased the ZZ Street property from the husband and Mr OO and the XX Street property was sold.
In 2010 the parties purchased R Street, Suburb S (“the Suburb S property”) wholly funded by finance provided by HH Finance. The wife currently resides in the Suburb S property.
In 2010 the WW Street property was sold.
In 2011 the Town TT property was sold to the husband and Mr OO.
In 2011 the husband’s father gifted to the husband half of his shareholding in F Pty Ltd. This provided the husband with other class A shares, it being agreed to be a further 25 per cent interest in F Pty Ltd, taking his accumulated interest to 50 per cent. The husband’s father gifted his remaining shareholding to the husband’s brother Mr OO, who then held the remaining 50 per cent interest in F Pty Ltd.
In 2011 Mr OO transferred his 50 per cent interest in the 4 B Street property to the husband.
In 2011 the Town TT property was sold to Mr OO.
In either October 2014 or June 2015, the parties separated. The husband vacated the home in June 2015. The wife ceased attending work at F Pty Ltd from early 2016. Up until the trial she continued to receive a wage from F Pty Ltd of $68,120 per annum and the use of a motor vehicle.
In 2015 the 4 B Street property was sold.
In 2016 the husband and Ms KK exchanged contracts to purchase as joint tenants BB Street, Suburb CC (“the Suburb CC property”) off the plan for $1,760,000 (Exhibit 30). The acquisition completed in late 2018.
In 2016 Ms KK commenced working full-time for F Pty Ltd as a manager, earning $55,000 per annum (Exhibit 22).
In 2016 G Investments Pty Ltd (“G Investments”) was incorporated. The husband and Ms KK are the directors and equal shareholders. In 2017 G Investments purchased the trading enterprise “Q Business” for $70,000. The funds to acquire the enterprise were borrowed from F Pty Ltd. The loan was repaid by way of instalments of $35,000 in early 2018 and the balance of $35,000 in early 2019 from profits generated by G Investments.
In 2017 AB Street, Town D (“the AB Street property”) was purchased as to 50 per cent by the parties self-managed superannuation fund, and the other 50 per cent by Ms KK’s self-managed superannuation fund. The property is tenanted by Q Business.
In 2017 the husband purchased vacant land at 1 and 2 DD Street, Suburb EE, Town D (“the DD Street properties”) for $170,000 and $200,000 respectively funded by way of a mortgage loan secured over the properties from the NAB. No deposit was paid.
In 2018 the parties sold the T Street property. The net proceeds of sale of $1,068,000 were paid to the wife. The wife commenced living at the Suburb S property.
In 2019 the husband and Mr OO sold the VV Street property for $595,000. The husband received his share of the sale proceeds was $235,747, together with his half share of the balance of the deposit.
In 2019 the parties sold their real property at AC Street, Town AD, State AE USA (“the State AE property”) for $485,000 USD. In his financial statement sworn on 16 June 2023 (Exhibit 18), the husband said that he received $570,000 from the proceeds of sale of the State AE property.
The husband’s mother died in 2018.
In 2019 probate of the husband’s mother’s estate was granted. The husband’s affidavit records that he received:
a.[B Street Town D] (fifty percent (50%) with my brother [Mr OO]). This is the premises from which [F Pty Ltd] trades.
b. Accounts - $166,000
c Shares - $23,462
d. Debts forgiven:
i. [F Pty Ltd] (floor plan finance) – $70,000
ii. [Z Street, Town AA] – $92,000
In 2019 the husband and Ms KK purchased FF Street, Town GG (“the Town GG property”) as joint tenants for $226,000.
In 2019 Antonescu Finance Pty Ltd was registered.
In 2021 F Pty Ltd purchased a real property at AF Street, Suburb S (“the AF Street property”).
In 2021 F Pty Ltd purchased a real property at 1 AG Street, Suburb AH (“the 1 AG Street property”).
In February 2022 F Pty Ltd purchased a real property at 2 AG Street, Suburb AH (“the 2 AG Street property”).
Sometime in 2022 the wife received an inheritance from her late father of $265,000. It has been applied to her legal fees.
In 2022, the parties’ son was appointed general manager of F Pty Ltd.
In 2023 the husband’s father died. In late 2023 probate of the husband’s late father’s estate was granted. At the time of affirming his trial affidavit, the husband said his father’s estate was yet to be finalised, anticipating that he will receive approximately $106,000, from the estate and that a $300,000 floor plan finance debt payable by F Pty Ltd will be forgiven.
In 2023 the husband and Ms KK purchased a real property at V Street, Town D (“the V Street property”) as joint tenants for just over $660,000.
In 2024 the sale of the ZZ Street property by F Pty Ltd for $490,000 was completed (Exhibit 11).
THE LAW
In determining claims for alteration of property interests between married couples, I am required to:
(a)Make findings as to the identity and value of the property (including superannuation interests), liabilities, and financial resources of the parties, or either of them, at the time of the final hearing and determine the legal and equitable interests of the parties in such property;
(b)Consider, identify, and assess the contributions by the parties to the acquisition, conservation and/or improvement of their property, including financial and non‑financial contributions and any contributions to the welfare of the family before, during and after the relationship came to an end;
(c)After consideration of altering the interests in the property pool on the basis of contributions, to consider whether there should be any further adjustment to either of the parties on account of the matters set out in s 79(4)(d)–(g) of the Act, including any relevant considerations under s 75(2); and
(d)Ensure that any order made is just and equitable.
THE BALANCE SHEET – IDENTIFYING THE PROPERTY OF THE PARTIES
By the time of the conclusion of submissions, the joint balance sheet of the parties was agreed (Exhibit 20), except for the items that were not agreed appearing in bold as determined in the following table:
Ownership Description Husband’s value ($) Wife’s value ($) Determination ($) ASSETS 1 Husband & Ms KK V Street, Town D NSW 318,000 636,000 318,000 2 Joint R Street, Suburb S NSW 2,500,000 2,500,000 2,500,000 3 Husband W Street, Suburb X NSW 950,000 950,000 950,000 4 Husband & Mr OO B Street, Town D 1,475,000 1,475,000 1,475,000 5 Husband 2 B Street Town D NSW 875,000 875,000 875,000 6 Husband Y Street Town D NSW 915,000 915,000 915,000 7 Husband Z Street Town AA NSW 585,000 585,000 585,000 8 Husband & Ms KK as joint tenants BB Street Suburb CC NSW 940,000 1,880,000 1,024,600 9 Husband 1 DD Street Suburb EE NSW 340,000 340,000 340,000 10 Husband 2 DD Street Suburb EE NSW 350,000 350,000 350,000 11 Husband & Ms KK as joint tenants FF Street Town GG QLD 190,000 380,000 190,000 12 Husband Property P, USA 1,069,167 1,069,167 1,069,167 13 Husband G Investments t/a Q Business 210,672 210,672 210,672 14 Husband H Pty Ltd 581,251 581,251 581,251 15 Husband F Pty Ltd 10,976,762 10,976,762 10,976,762 16 Husband Share Portfolio 344,994 344,994 344,994 17 Wife Share Portfolio 360,305 360,305 360,305 18 Husband Bank accounts 62,840 62,840 62,840 19 Wife Bank account 901,288 901,288 901,288 21 Wife Funds held on trust for legal costs 173,366 173,366 173,366 22 Husband Funds held on trust for legal costs 118,800 118,800 118,800 23 Husband Funds deposited against Suburb CC mortgage 400,000 0 400,000 Total 24,722,045 ADD BACKS 24 Wife Legal Costs 267,643 267,643 267,643 25 Husband Legal Costs 255,821 255,821 255,821 Total 523,464 LIABILITIES 26 Husband NAB market Rate Facility #...07 38,028 38,028 38,028 28 Husband NAB home loan #...39
Re properties at 1 & 2 DD Street, Suburb EE, NSW325,716 325,716 325,716 29 Husband & Ms KK NAB home loan #...97
Re property at BB Street, Suburb CC, NSW $605,960 (100%)502,980 605,960 502,980 30 Husband & Ms KK NAB home loan #...14
Re property at BB Street, Suburb CC, NSW $208,827 (100%)104,413 208,827 104,413 31 Husband & Ms KK NAB home loan #...22
Re property at FF Street, Town GG QLD $184,397 (100%)92,199 184,397 92,199 32 Husband NAB home loan #...22
Re property at Y Street, Town D236,840 236,840 236,840 34 Joint HH Finance Re property R Street, Suburb S NSW 451,533 451,533 451,533 35 Husband CGT and sale costs 2,348,963 910,000 910,000 36 Husband Debt to F Pty Ltd for borrowed legal costs 162,385 0 0 Total 2,661,709 TOTAL ASSETS – LIABILITIES 22,583,800 SUPERANNUATION Member Name of Fund Type of Interest Husband’s value ($) Wife’s value ($) Determination ($) 37 Husband Antonescu Superannuation Fund SMSF 2,445,768 2,445,768 2,445,768 38 Wife Antonescu Superannuation Fund SMSF 854,692 854,692 854,692 39 Wife Super Fund 1 Accumulation 14,418 14,418 14,418 Total 3,314,878 TOTAL NET SUPERANNUATION + NON-SUPERANNUATION 25,898,678 Items 1, 8, 11, 23, 29, 30, and 31
Each of these real properties, being the Suburb CC Property, the Town GG property, and the V Street property, were acquired by the husband and Ms KK after the separation of the parties.
Throughout the litigation it has been the case of:
(a)The husband, that his interests in the three properties are as reflected in the legal title of each of them (Exhibit 35), equating to 50 per cent of their agreed values and 50 per cent of the current mortgage values; and
(b)The wife, that any financial contribution by Ms KK to them has been made either directly or indirectly by the husband, and hence the full value of each real property and any mortgage liability attached thereto ought to be attributed to the husband as his property.
The agitation by the parties as to this issue is recorded by way of correspondence between their respective solicitors from August 2023 (Exhibits 6 – 9). It continued up until the trial.
The wife submitted that the evidence supports a finding that she has pursued avenues of enquiry of the husband as to the capacity of, and the fact of, Ms KK making contributions to the acquisition cost of each property and the periodic cost of mortgage borrowings and outgoings on each. I find that the correspondence between the solicitors for the parties record the wife’s efforts to obtain a clear and comprehensive understanding of the particulars of the terms of this financial relationship between the husband and Ms KK underscoring this disputed subject matter.
Broadly, it was the wife’s case that Ms KK did not have capital available to make contributions, let alone an equal contribution that of the husband, at the time of acquisition of each property. Further, it is her case that Ms KK did not have capacity, without sourcing funds from the husband, to contribute, let alone equally contribute, to the periodic shortfall of mortgage repayments and outgoings over income for the Suburb CC property and the Town GG property. She asserted that the husband was either meeting those contributions on behalf of Ms KK or providing to her funds to make them. If established, she contended that a finding ought be made that the husband was the beneficial owner of each of the properties in which he and Ms KK hold legal title.
The husband’s disclosure failures
The wife submitted that a finding ought to be made that the husband has failed in his duty to make a full and frank disclosure of his relevant financial circumstances, and that the impact of that failure ought to reverberate in findings made as to disputed balance sheet items and in the adjustments to the contribution findings as identified in longstanding authority such as Weir and Weir (1993) FLC 92-338 (“Weir”). She contends that the husband’s disclosure failures lead to the conclusion that some of his property and resources have not been identified in the balance sheet and supports the proposition that the Court may be robust in making factual findings as to these disputed items in her favour and not be unduly cautious in making findings against the husband as the non-disclosing party.
The husband responded by submitting that any complaint as to his disclosure failures during the litigation and inferences that can be drawn from them, save as to one item not identified on the joint balance sheet (being the husband’s interest in an exchanged contract for purchase “off the plan” of a property at AJ Street, Suburb AH, Queensland (“the AJ Street property”), did no more than complicate the fact finding process, such that the approach described in Weir is not permissible in this case.
By way of ch 6 of the Rules, a party to s 79 proceedings is required to make a full and frank disclosure of their relevant financial conduct. The duty of disclosure applies to both information and documents. It is absolute and continuing throughout the litigation process. It is critical to the function of the jurisdiction and fundamental to achieving justice and equity. It extends to all relevant and material facts.
I find that the husband was aware of the fact and terms of his disclosure obligations at all relevant times. He swore a financial statement on 16 June 2023 (Exhibit 18) prepared with the assistance of his solicitor. His affidavit verifying the financial statement records:
I swear* / affirm* that:
(a) I have read Rule 6.06 and I am aware that by law I have an obligation to make full and frank disclosure of my financial circumstances to the Court and each other party. In particular, I have disclosed in this document or in an affidavit filed by me or on my behalf under Rule 6.06(6), all matters I am required to disclose under Rule 6.06
(b)The information in the financial statement and any attachments to it which are within my personal knowledge are true. Where I have given an estimate in this financial statement, it is based on my knowledge and is given in good faith. All other information given in this financial statement and any attachments is true to the best of my knowledge, information and belief.
(c) I have no income, property or financial resources other than as set out in this document or any affidavit filed by me under Rule 6.06(6).
The content of that affidavit was repeated in his trial financial statement sworn on 2 May 2024.
His undertakings as to disclosure filed 10 July 2024 and 23 August 2024 (Exhibit 47) record:
1)I have read, or had read to me, Parts 6.1 and 6.2 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021;
2)I am aware of my duty to the Court and to each other party including any independent children’s lawyer to give full and frank disclosure of all information relevant to the issues in the case in a timely manner;
3) I undertake to the Court that to the best of my knowledge and ability, I have carried out and complied with my duty of disclosure;
4)I undertake to continue to comply with my duty of disclosure until the conclusion of the case;
5)I understand the nature and terms of this undertaking and that if I breach the undertaking I may be guilty of contempt of court.
For the reasons that follow, I find that the husband provided each undertaking as to disclosure at times when he was informed by his experienced legal representatives as to the nature and content of that undertaking, that the undertaking was knowingly false, and it was given while being aware that the wife would rely on its integrity.
The husband’s chose in action as to the AJ Street property
At 2.41 pm on the last business day before the commencement of the trial the husband served the wife with a proof of evidence (Exhibit 12) disclosing that in mid-2022 he exchanged contracts to purchase “off the plan” the AJ Street property for $6.290 million. The purchase is scheduled to complete in late 2025 or early 2026. He said that his plan was to “on sell” the AJ Street property prior to the scheduled settlement.
The husband said in the proof of evidence: “I have not applied any funds to the purchase of this property. The deposit was funded by way of a Bank Guarantee.” He then went on to say:
6.I did not understand that I needed to disclose the existence of this purchase where no money had exchanged hands and settlement would not be occurring until at least late 2025. I only told my solicitor about this purchase on the week beginning 19 August 2024 and provided him with a copy of the contract and bank guarantee on 23 August 2024.
7.A copy of the contract and guarantee bond was disclosed to [the wife’s] solicitor on 23 August 2024.
The husband did not record his interest by way of a chose of action in either of his financial statements. He made no reference to it in his trial affidavit.
Senior counsel for the husband, on instructions, put to the wife in cross-examination that she had been informed as to the fact of the exchanged contract at a court event in February 2024. The wife denied the contention. On the following day of the trial, the husband, by way of his senior counsel, withdrew any contention as to the wife being aware of his exchanged contract to purchase the AJ Street property until 2.41 pm on the last business day before the commencement of the trial.
During the husband’s cross-examination later that day, he cast aside the concession made by his senior counsel earlier that morning, insisting the wife was aware of the exchanged contract sometime in earlier 2024. After a short adjournment, senior counsel confirmed the accuracy of the concession made that morning and requested that any oral evidence of the husband contrary to the concession be disregarded. The husband’s reckless conduct on this subject matter did him little credit.
I do not accept the husband’s evidence that he had not applied any funds to the purchase of the AJ Street property. He conceded in cross-examination that he had paid some “lawyer’s fees” relating to the transaction, and that he had paid periodic service fees to the bank for the deposit guarantee. He did not adduce evidence as to the value of the fees or costs paid to date. The cross-examination of the husband revealed that he has paid an expression of interest deposit of $10,000 from his personal funds and then a deposit of $627,000, each of which were subsequently repaid.
Exhibit 14 is a letter dated 2 February 2024 from the wife’s solicitors to the husband’s solicitors requesting disclosure as to the purpose of a payment of $200,000 to “AK Lawyers” on 29 August 2022. The husband did not reply to the disclosure request. He conceded that the identified transaction was a payment forming part of the $627,000 deposit he paid.
The husband gave no cogent evidence to explain why the interest by way of the exchanged contract was not recorded in his financial statements and why he did not disclose the information as requested by the wife by way of the letter dated 2 February 2024. The letter to his solicitors specifically alerted him to the wife’s disclosure enquiry on this subject matter. Implicitly, his solicitors directed his attention to this enquiry. I find that he elected to remain silent.
The husband conceded that he had a valuable right to complete the exchanged contract, that he planned to “on sell” it, and that he expected the value of the property to increase during the time of its construction to “make money on it”.
He conceded that the purpose of disclosure was to enable the wife and her lawyers to understand his financial circumstances, to enable fairness, and to enable the wife to make enquiries as to his interests in a timely and considered way. Nonsensically, notwithstanding his failure to disclose this interest until the afternoon prior to the trial, the husband denied the wife had been prevented any opportunity to make those enquiries. He said in cross-examination that it would not be “fair”, in the circumstances where there is no evidence as to the value of this chose in action, that ultimately some provision should be made that the wife receive some share of the profit if achieved on the sale of the interest.
Following that exchange, and in response to a proposition that he had made disclosures in these proceedings based on his judgment of what he considers to be relevant, he said “[y]es, that’s correct”. I find this response demonstrates, as amplified later in these reasons, the husband’s attitude to disclosure in this litigation. Senior counsel for the husband submitted that this approach to disclosure may have been the husband’s “emotional position”, conceding it is not the “legal position”. It is reflective of the cavalier attitude of the husband to adherence with his obligations codified in ch 6 of the Rules as a litigant in s 79 proceedings.
I find that the husband has exhibited business and commercial experience over many years. He is not an unsophisticated litigant, having the benefit of accredited family law specialist solicitors acting for him in the litigation. I find the husband attempted to minimise the fact and import of his disclosure failure as to his interest in the exchanged contract in his proof of evidence, that he considers this chose in action to be a valuable resource, and that by way of his lack of timely disclosure, he made a calculated decision to secrete from the wife and the Court a relevant part of his current financial circumstances. He deprived the wife of the opportunity to inform herself of the potential value of this chose in action, or to adequately consider and engage with his financial conduct on this subject matter. I find that he misled the wife and the Court by omission in his financial statement and affidavit, and as to this item, that his first undertaking of disclosure was corrupted. This disclosure failure will be considered in the adjustment to the contribution findings in circumstances where the value of this interest cannot be the subject of determination and hence cannot form a potential item identified in the balance sheet.
The disclosure of documents and information as to the acquisition of the Suburb CC property
Exhibit 30 includes the contract exchanged for the purchase of the Suburb CC property by the husband and Ms KK in 2016 for $1,760,000, marked with stamp duty of $82,290. It was agreed that the acquisition cost of the Suburb CC property in 2018, being the date of completion, was $1,842,290.
Exhibit 14 records a request from the wife’s solicitors dated 29 September 2023 as to disclosure of documents recording the source of Ms KK’s funds contributed to the acquisition of the Suburb CC property, including unredacted bank account statements.
Exhibit 8 is a letter from the husband’s solicitors to the wife’s solicitors dated 20 November 2023. The information disclosed in that letter had been in the husband’s province for the five‑year period since the date of completion of the acquisition in 2018. The letter discloses that the Suburb CC property was financed by a mortgage loan to the NAB of $1.1 million and the balance of the purchase price was sourced from his personal funds. No mention is made of a contribution by Ms KK to the costs of acquisition.
In his trial affidavit affirmed on 2 May 2024 the husband said that he contributed $200,000 to the acquisition of the property from his savings, that he and Ms KK had sourced two mortgage loans from NAB of $750,000 each ($1,500,00 in total) and that he and Ms KK “contributed equally to the loan repayments”. He gave no evidence as to how much Ms KK contributed to the acquisition cost.
The husband did not adduce evidence to explain why the contents of a letter his solicitor sent less than 12 months ago (Exhibit 8) implicitly recorded that he alone had paid the balance of funds to complete the acquisition in excess of the incorrect mortgage value, why the value of the mortgage on acquisition was inaccurate by $400,000, or why Exhibit 8 did not stand on all fours with the evidence in his trial affidavit.
Ms KK is not a party to these proceedings. She does not have an obligation of disclosure pursuant to ch 6 of the Rules. At the commencement of her cross-examination Ms KK said that she had not read the husband’s trial affidavit and had not talked to the husband about these proceedings since their commencement during 2023. I do not accept her evidence on this topic because:
(a)Her affidavit said:
21.I am aware from conversations that I have had with [the husband] that [the wife] is alleging that he has either solely funded the assets we have acquired together or alternatively, that he has provided the funds which I then contributed to the acquisition of these properties. This is not correct. As particularised below, I have funded my contribution to these assets from my own income, savings, and financial resources.
(Emphasis added)
(b)In response to an enquiry as to the reason she was asked to swear an affidavit, she said that it was because she needed to “provide proof of [her] financial capability”, and that she was “perfectly capable of substantiating [her] own investments to support [her] family and to support [herself]”; and
(c)Ms KK had been sent an email from the husband’s solicitors forwarding a letter from the wife’s solicitors seeking disclosure of her documents relevant to the acquisition of the Suburb CC property (Exhibit 38), and she had then provided all the information contained in a response dated 23 August 2024 and the documents attached (Exhibit 19).
Ms KK said in her affidavit was that she and the husband agreed that they would equally contribute to each purchase of property by way of purchase price, stamp duty, legal fees, loan repayments, and rates. I find that evidence was not accurate because:
(a)Ms KK said that in addition to the contribution made by both she and the husband by way of the $1,500,000 NAB mortgages, she had contributed $87,374 to the acquisition; and
(b)She further said:
26.I acknowledge that in respect of this property I have not contributed an equal amount to [the husband], however the property was purchased as an investment, and will be ultimately sold. When that occurs [the husband] and I will equalise our contributions from the sale proceeds if that had not otherwise occurred.
Ms KK did not give evidence as to the value of the contribution made by the husband to the acquisition of the Suburb CC property.
It is against this historical context that the husband maintained his contention that a finding ought to be made that the equitable interest of he and Ms KK in the Suburb CC property be that as recorded in the legal title, scaffolding his criticism of the wife during her cross‑examination that she had insufficient evidentiary foundation to challenge that as asserted by him on this subject matter.
I find that the husband did not adduce:
(a)Explicit evidence as to the total value of his contributions to the acquisition costs of the Suburb CC property; nor
(b)Evidence as to his understanding of the terms of any agreement or methodology to achieve the equalisation of the contributions of he and Ms KK to the property as identified in the evidence of Ms KK as adduced in his case.
Only the husband could adduce evidence as to what he had done and had not done in completing the acquisition of the Suburb CC property. He elected either not to do so, or to do inadequately, being acutely aware that it was a significant issue in the proceedings. All evidence must be weighed and assessed having regard to the capacities of the parties to adduce and contradict it (Vetter v Lake Macquarie City Council (2001) 202 CLR 439 at 454).
The husband had ample opportunity to adduce evidence in his case as to these topics. His failure to do so permits the concluding inference that, if he had adduced evidence on that topic, it would not have supported his case (Katsilis v Broken Hill Pty Co Ltd (1977) 18 ALR 181 at 197). I so find.
I find that the husband has not complied with his positive obligation to disclose material facts, information, and documents to provide a clear and comprehensive understanding of his relevant financial conduct as to the value of funds that he contributed, and that Ms KK contributed, to the acquisition cost of the Suburb CC property. I find that he misled the wife and the Court by omission in his affidavit on this subject matter, and that as to this matter, each of his undertakings of disclosure as filed cannot be accepted.
The husband’s disclosure failures as to contributions to the Suburb CC mortgages
In his affidavit the husband said:
158. We [he and [Ms KK]] each contribute equally to the loan repayments.
This evidence may be accurate as to periodic mortgage instalments for the Suburb CC property being automatically withdrawn from their joint NAB account. It is misleading by omission as to the contributions made by each the husband and Ms KK to the cost of the mortgage facilities having regard to the evidence that emerged only through the process of the husband’s cross‑examination, being:
(a)He conceded that in mid-2019 he had paid $500,000 into the mortgage account for the Suburb CC property from his NAB account #...31. This payment had not been disclosed. The funds he applied to that mortgage were sourced from the sale proceeds of two real properties in early 2019, each conceded to be the property of the parties, paid into his NAB account #...31. The first, sold in 2019, was the VV Street property, acquired jointly by he and Mr OO during the marriage in 2002. The second, sold in early 2019, was the State AE property, jointly owned by the parties. In early 2019, $559,810 of the sale proceeds from the State AE property were deposited into his NAB account #...31 (Exhibit 48);
(b)The $500,000 remained deposited in the Suburb CC property mortgage, reducing the value of the interest payable on that loan, for more than two years. Ms KK gave no evidence as to this valuable contribution to the mortgage interest made by the husband;
(c)During 2021 the husband withdrew $515,000 in four tranches from the Suburb CC property mortgage. He could not identify his use and application of these withdrawn funds. He said that he thought they could have been applied to acquire a real property, but he could not identify that property. He denied it was applied to the purchase of an F Pty Ltd property or to the 2023 acquisition of the V Street property by he and Ms KK; and
(d)He conceded that in 2022 he had deposited $400,000 into NAB mortgage for the Suburb CC property from his NAB account #...31. This payment also had not been disclosed. These funds remain in the Suburb CC property mortgage as at the date of trial. This payment reduced the value of the interest payable on the Suburb CC property loan for a further two years. Again, Ms KK gave no evidence as to this other valuable contribution to the mortgage interest made by the husband.
Initially, the husband vehemently challenged that he had not disclosed bank statements from his NAB account #...31. His senior counsel later conceded that he had not disclosed the bank statements for that account. On the third day of the trial, he provided 37 PDF files of incomplete statements for the NAB account #...31 for the period late 2018 to late 2021. By the end of the trial, he had disclosed all the bank statements for that account for that period.
It is possible to speculate that the $400,000 deposited into the Suburb CC property mortgage loan account in 2022 originated from the $515,000 that had been withdrawn in late 2021. The husband did not adduce any evidence to that effect. The Court is unable to engage in such speculations.
I find that the husband knew, or ought to have known, that each of the lump sum mortgage repayments for the Suburb CC property were important facts going to an issue in the proceeding. I find that the husband’s trial affidavit was misleading by calculated omission as to these facts to achieve a perceived forensic advantage in the proceeding. I find these omissions further erode the integrity of his disclosure undertakings as filed. I do not accept the tenor of his case as to the wife having responsibility to wade through huge volumes of source documents to achieve an accurate understanding as to his financial circumstances. It is not for her to find the needles in the haystack. The husband has the positive obligation to disclose relevant facts, documents, and information to give an accurate portrait of his financial circumstances.
This is not a case where credit in and of itself assumes substantial significance. The issue is more complex than simply whether the husband and Ms KK endeavoured to be truthful. The real issue is whether the husband’s evidence discharges his disclosure obligations. It is in this context that the reliability of his evidence and the evidence he adduced from Ms KK assumes importance. I find that absent verification, caution ought to shadow the reliability of evidence adduced by the husband as to his post-separation financial conduct. This is relevant when dealing with various items on the balance sheet and impacts on findings made as to contributions and adjustments thereto. Some of his property and resources have not been identified in the balance sheet. As to subject matters recorded in these reasons, where I have identified disclosure failures on the part of the husband, I need not be unduly cautious in making findings on those topics in favour of the wife. I find that $500,000 of the property of the parties, deposited by the husband into the Suburb CC mortgage in 2019 and withdrawn by him in 2021, is not reflected in an item in the balance sheet because of the husband’s disclosure failures. It will be considered in the adjustment to the contribution findings.
Procedural fairness to Ms KK
The husband submitted that it would be unsafe to make a finding as to his equitable interest in the Suburb CC property, the Town GG property, or the V Street property, being other than consistent with the legal title because to do so would affect the interest of Ms KK in the properties, occasioning upon her a denial of procedural fairness. It was submitted that because the wife sought a determination that the husband had an equitable interest in the properties greater than the legal title, r 3.01 mandated that Ms KK was a necessary party to the proceeding. Each of these submissions are not accepted.
Rule 3.01 provides a double threshold test, being:
(a)Firstly, the party to be joined has rights that will be directly affected by the proceeding; and
(b)Secondly, their participation as a party is necessary to determine all issues in dispute in the proceeding.
No party sought orders directly affecting the interests of Ms KK in the Suburb CC property, the Town GG property, or the V Street property. The dispute between the husband and the wife is as to a finding as to the fact and value of the husband’s equitable interest in those three properties. The finding sought identifies, for the purposes of these s 79 proceedings only, the nature and value of the husband’s interest in the three real properties. It will not bind a non‑party to the proceeding. The mandates of r 3.01 are not engaged. It is not necessary for Ms KK to be a party to be a proceeding, nor is her interest affected in the relevant sense identified in the rule.
In any event, Ms KK confirmed in her affidavit that she was on notice as to the nature of the s 79 proceedings and as to the fact of a claim by the wife for the adjustment of property between she and the husband. This included a contention that real property she holds jointly with the husband was acquired by way of funds originating from him, or that he had provided her with funds that she then contributed to those property interests. She did not seek to intervene in the proceeding.
Item 8 – the Suburb CC property
The husband identified in submissions the reasoning of the High Court in Calverley v Green (1984) 155 CLR 242 being “[i]n the absence of a presumption of advancement, the legal title reflects the interests of the parties, unless there are circumstances (not those false presumptions) which displace it in equity” (at [5] per Murphy J). The de facto relationship between husband and Ms KK does not fall within the recognised categories for which the presumption of advancement applies to rebut the imposition of a resulting trust.
The husband, citing Purkess v Crittenden (1965) 114 CLR 164, submitted that as the evidence establishes the legal holdings of title of each of the three real properties (Exhibit 35), the onus of adducing cogent and persuasive evidence to ground a finding to the contrary shifts or falls to the wife.
That evidentiary onus is overlayed with the duty of disclosure established by the Rules and the obligations imposed upon litigants in s 79 litigation. The obligation of disclosure of relevant financial conduct or circumstances is more complex than simply to whom bear the onus of proof in a civil proceeding. The real issue is whether the evidence in the husband’s case discharged certain onuses of proof as to compliance with his positive obligation of disclosure. As recorded earlier in these reasons, in that context, the reliability of his and the evidence adduced in his case, or its absence, assumes importance.
The construction of the pillars of the wife’s case as to the equitable interest of the husband in the whole of the Suburb CC property included that:
(a)The husband did not disclose the fact or value of the contribution of Ms KK to the acquisition of the Suburb CC property, save as to his affidavit recording them jointly borrowing the value of the mortgage;
(b)Ms KK had no available capital in the period from the exchange of contracts in 2016 until completion of the purchase in late 2018 to pay a half share, or any part, of the deposit or balance of the purchase price over and above borrowings by way of a mortgage; and
(c)In circumstances where she was supporting herself and her two dependent children, Ms KK had no, or insufficient, income over the period 2016 until 2018 to save funds to contribute on completion, and after acquisition, to meet half of, if any, of the periodic shortfalls created by way of the value of expenses for the Suburb CC property being greater than its rental income.
Ms KK is a witness who remains in a committed relationship with the husband. She and the husband plan to build a house to live in together at some time in the future. I find that she is wholly aligned with the husband and that the case he prosecutes promotes her interests. Ms KK was aware that her evidence was adduced to provide “proof of [her] financial capability”, and to establish in the husband’s case that she was “perfectly capable of substantiating [her] own investments”.
Ms KK’s affidavit evidence was that she had no savings at the commencement of her cohabitation with the husband in 2016. She said in her oral evidence that at no time during her relationship with the husband had she drawn upon the equity in her investment property at Suburb AN. Against that context her affidavit evidence was:
25.[In late] 2018, I paid $93,000 into [the husband] and my joint account with the NAB ending [#...20] and [the husband] paid $5,000. Of these funds, $87,374.48 were used for settlement [of the [Suburb CC] property].
Ms KK’s affidavit adduced a statement recording $100,000 deposited into her AL Bank account #...55 in late 2018. She did not adduce evidence in her affidavit of the source of that deposit.
Exhibit 22 is Ms KK’s loan application to the NAB for the Suburb CC property purchase signed in late 2018. That application records that:
(a)Her weekly income was $1,100 and her weekly expenses were $1,334; and
(b)She had $21,000 in savings in an AL Bank account. There is no mention or record of the source of the $100,000 deposited into her account five days later applied to the value of $87,374 to the Suburb CC acquisition.
Ms KK said in her oral evidence that the $100,000 deposited in her AL Bank account #...55 in late 2018 was sourced from her father. Her father died in 2021. She said she had no documents to verify the source of these funds from her father, such as his bank statements. She is the executor of her late father’s estate. She said that she was told by the solicitor for the estate that she was unable to obtain his bank statements. I do not accept that hearsay evidence.
Exhibit 24 is a summary of the taxation returns of Ms KK for the period 2015 to 2022. It records:
Year Taxable income Tax Payable Net Income Source Net Position for rental property: 2023 Tax return not provided 2022 $90,302 Tax return amended $13,404 $76,898 G Investments
$23,066F Pty Ltd
$57,991Share dividends
$259Franking credits
$111Franked trust distribution from G Family Trust
$29,333Franking credits from G Family Trust
$7,333Loss on rental properties
$18,986AM Street ($11,049)
Gross Rent $19,034
Less tax expenses $30,083BB Street ($8,897)
Gross Rent $23,400
Less tax expenses $32,297FF Street $960
Gross Rent $9,540
Less tax expenses $8,5802021 $97,324 $24,129 $73,195 G Investments
$28,967F Pty Ltd
$59,999Share dividends
$141Franking credits
$60Income on rental properties
$8,157AM Street $6,361
Gross Rent $24,960
Less tax expenses $18,599BB Street $1,434
Gross Rent $23,400
Less tax expenses $21,966FF Street $362
Gross Rent $8,500
Less tax expenses $8,1382020 $73,779 $16,751 $57,027 F Pty Ltd
$60,000Q Business
$16,366Loss on rental properties
$2,588AM Street $1,034
Gross Rent $25,440
Less tax expenses $24,406BB Street ($1,717)
Gross Rent $23,400
Less tax expenses $25,117FF Street ($1,905)
Gross Rent $5,082.50
Less tax expenses $6,9882019 $74,685 $18,145 $56,540 F Pty Ltd
$62,400Q Business
$18,400Loss on rental properties
$6,335AM Street $6,348
Gross Rent $24,960
Less tax expenses $18,612BB Street ($12,683)
Gross Rent $7,050
Less tax expenses
$19,7332018 $90,040 $22,748 $67,292 F Pty Ltd
$93,000Loss on rental properties $2,363
AM Street ($2,363)
Gross Rent $24,680
Less tax expenses
$27,0432017 $100,643 $26,883 $73,760 HH Finance
$25,480F Pty Ltd
$67,200Income on rental properties
$6,863AM Street $6,863
Gross Rent $24,035
Less tax expenses $17,1722016 $116,001 $33,187 $82,814 HH Finance $116,717
Net Income on rental properties
* AM Street $597
Gross Rent $11,830
Less tax expenses $11,2332015 $115,339 $32,929 $82,410 HH Finance
$116,613Net Income on rental properties
$561* AM Street $561
Gross Rent $11,815
Less tax expenses
$11,254
The evidence by way of Exhibit 24 broadly correlates with her after-tax income recorded in her 2018 NAB loan application.
In her affidavit, Ms KK said:
8.I am solely responsible for meeting my own financial needs and [the husband] his own. We do not combine our finances in any way other than in the acquisition of the business ([Q Business]) and the properties purchased jointly by [the husband] and I as detailed below.
9.[The husband] makes no financial contribution to the care of my children. All of their financial needs are met solely by me. This includes paying all of their school fees and associated expenses, purchasing all clothing, food, travel, and any other expenses they may have from time to time.
I do not accept that evidence for the following reasons:
(a)Ms KK was cross-examined as to lump sum deposits made to her AL Bank account #...55 for the period from mid-2016 to late 2019 (Exhibit 41). She agreed that over that period of just over three years, or about 40 months, excluding what was identified in the statements as wages and the $100,000 credit made in late 2018, that $190,975 has been deposited into that account, equating to $4,744 each month, or about $1,100 each week. No evidence was adduced in the husband’s case explaining how or why this value of funds in excess of wages had been deposited in Ms KK’s account; and
(b)Ms KK agreed in cross-examination that she did not commence to receive a wage from Q Business until sometime after early 2019. She currently receives income from Q Business of $508 per week, in addition from her income from F Pty Ltd. In the 2023 financial year Ms KK received dividends from Q Business of $50,000 (Exhibit 19). Ms KK said that she understood she and the husband held the same class of equal shareholdings in Q Business but that the husband did not receive the same value of dividends that she did. She was unable to explain why the dividends were not paid pari‑passu as between she and the husband. The constitution of Q Business was not adduced into evidence. The husband had the capacity to adduce evidence as to this subject matter upon it being identified in the oral evidence of Ms KK, this information being within his province. He elected not to do so. I infer it would not have assisted his case; and
(c)In cross-examination, Ms KK conceded that during the period she lived with the husband from 2016 until 2022 so she did not pay rent or accommodation costs, and that the “agreement” between she and the husband was that she “would pay for some things and [the husband] would pay for others”. She also conceded that the husband has paid for “some” holidays for her and her children.
Ms KK said in her affidavit:
27.The mortgage repayments are presently $2,099 per week. We receive rental income of $925 per week.
28.I contribute equally to the loan repayments and other outgoings for the property at a rate of $600 per week paid into our joint [Suburb CC] Off-Set account.
I find that caution must be exercised when considering the reliability of the evidence of Ms KK for the for the reasons recorded in paragraphs [119], [141]–[143], and [147]. I accept the husband’s submission that he was not obliged to source or obtain documents not in his possession or control to underscore the integrity of Ms KK’s evidence on her capacity to meet periodic shortfalls. However, he was charged with his obligations of disclosure as to the nature and terms of his financial conduct and transactions with her. I accept the tenor of the husband’s submission that the wife had the capacity to issue subpoenas to financial institutions, or to Ms KK personally, for the production of source documents verifying or supporting information as to this aspect of her financial conduct. However, the value of that submission diminishes in circumstances where letters from the husband’s solicitors to the wife’s solicitors as to the contributions to the acquisition of the Suburb CC property in the period leading up to trial were incorrect, the contents of the husband’s trial affidavit on this subject matter were deficient, Ms KK’s affidavit was filed and served in the shadow of trial, and where, until trial, her affidavit evidence omitted identification of the source of the $100,000 she received in 2018.
I do not accept that a consideration of all the evidence establishes that Ms KK had the capacity, by way of her own capital and income, to make half of all the periodic payments over the period from 2018 to date into the joint NAB account of she and the husband used to fund the shortfall after rental income to meet the Suburb CC property mortgage payments and outgoings. I do not accept the husband’s evidence on this topic. The inference available, on a consideration of all of the evidence on this subject matter, coupled with the findings as to the husband’s disclosure failures as to his financial circumstances post-separation (Chang v Su (2002) FLC 93-117 at [71] and [72]), leads to the conclusion that the husband was providing Ms KK with funds from time to time, was meeting directly or indirectly some of the expenses of she and her children, and that, in more recent times, Q Business was being used as a device to channel funds to Ms KK, permitting her to make those contributions to the Suburb CC property joint NAB account held with the husband. I so find.
Notwithstanding the deficiencies in the evidence of the husband and Ms KK, her evidence as to sourcing $87,374 from her father in 2018 to contribute to the acquisition cost of the Suburb CC property cannot be rejected out of hand. It is plausible when coupled with there being an absence of evidence to establish a payment of $100,000 at or around that time emanating from the husband or F Pty Ltd. The wife has not established to the requisite degree that Ms KK did not source $87,374 from her father or contribute those funds to acquisition of the Suburb CC property.
I find that the respective contributions to the acquisition cost of this item, being $1,842,290, was funded by Ms KK as to $87,374, and $750,000 (half of the mortgage advance), totalling $837,374, being 45.5 per cent of the acquisition cost, and was funded by the husband as to $254,916 and $750,000 (half the mortgage advance), totalling $1,004,916, being 54.5 per cent of that acquisition cost. Therefore, as a starting point, whether by way of resulting trust or the terms of the agreement identified by Ms KK in her affidavit with the husband (at [118]), the value of the husband’s interest in this item is $1,024,600, being 54.5 per cent of the current agreed value of the item at $1,880,000.
The wife has not established to the requisite degree that all the funds contributed by Ms KK to the mortgage and outgoings paid for the Suburb CC property from its acquisition in 2018 to date were sourced from the husband. The husband’s disclosure failures do not permit a finding as to the value of the funds he directly or indirectly contributed to the post-2018 funding of property by way of Ms KK or as to a value to be ascribed to the contribution by way of interest savings achieved by way of the lump sum payments made in 2019 and 2022.
The wife conceded in submissions that the evidence “falls short” of establishing that the husband has the beneficial ownership of the entire Suburb CC property. I find for the reasons recorded earlier that the husband has a greater interest than the half legal interest, but not the entire interest, in the item. The husband’s disclosure failures handicap the findings available to ground a conclusion as to value of his further equitable interest in the item above that found (at [152]). These failures as to this item will be considered in the adjustments to the contribution findings.
The add back of Item 23 and Item 29 - the value of one of the Suburb CC property mortgages
The agreed current value of the liability at Item 29 is $605,960.
In Exhibit 1, being the first version of the working draft balance sheet, the husband sought a finding as to the value of the mortgage liability, being Item 29 at $302,980. This sum is 50 per cent of its total current value, his case being the value of the liability is equally shared with Ms KK. In Exhibit 20 the husband included a new item, being Item 23, reflecting an add back against himself for the $400,000 he deposited into the Suburb CC property mortgage (at Item 29) in 2022. He sought a finding as to the value of his liability for the Suburb CC property mortgage in Item 29 at $502,980.
If a finding is made that the husband is the beneficial owner of the whole Suburb CC property, the wife contends the value of Item 29 is the current value of the entire liability being $605,960. In that event, on her case, the add back promoted by the husband at Item 23 would be nil.
She submitted that if the husband is not found to be the beneficial owner of the entire Suburb CC property, the add back of Item 23 ought to be included. In that alternative, she did not identify the value she contended for Item 29.
The matter was re-listed the day after the reservation of judgment to clarify the husband’s position as to balance sheet Items 23 and 29. The husband’s solicitor said that the husband proposed to use the redraw to make part of the adjusting payment to the wife, and because the payment had not been made, the re-draw of the $400,000 had not yet occurred. He said as the property of the parties must be valued as at the date of the trial. After some confusion the husband’s solicitor said that the value of Item 29 should be $302,980. Uncertainty existed as to whether it was the husband’s case in that event that Item 23 would remain at $400,000.
Logically, if Item 23 is added back as an asset of the husband, the value of the liability at Item 29 should increase by the same amount, taking the value of Item 29 to $1,050,960. The husband’s value of Item 29 in Exhibit 20, on his case, is 50 per cent of $1,050,960, being $502,980.
Doing the best I can with the available evidence and having regard to some uncertainties as to each party’s final contentions, the add back sought by the husband against himself will be accepted, as will the logic identified as to the calculation as to the value of the mortgage. The $400,000 proposed by the husband in Item 23 will be added back and included as the property of the parties and the value of Item 29 will be $502,980. The husband cannot be heard to complain as any disadvantage or inequity said to be generated. It is a product of his disclosure failures. The impact of these less than satisfactory findings occasioned to the wife will be considered in the adjustments to the contribution findings.
Items 11 and 31 – the Town GG property and its mortgage
The husband agreed that he did not voluntarily disclose the acquisition of this property, and that it was discovered by the wife through a real property search. The legal title to the property is held equally by the husband and Ms KK (Exhibit 35).
The wife sought particulars as to the acquisition costs of the Town GG property and source of its funding. The letter from the husband’s solicitors dated 2 August 2023 (some five years after the purchase of the property had been completed) (Exhibit 6) said:
4.The property at [Town GG], Queensland is owned by [the husband] and [Ms KK] as Joint Tenants. The purchase price of $295,000 was provided by way of $15,000 each from [the husband] and [Ms KK], the rest being borrowed from the National Australia Bank (documents evidencing the same to be provided)
The purchase price, the value of the mortgage, and the contribution to the purchase by Ms KK, as disclosed to the wife in the letter, were all incorrect. In his affidavit the husband said he contributed $15,000 to the deposit and that Ms KK contributed $11,300. He said that the balance of $202,000 was provided by way of a mortgage loan to the NAB. In her affidavit Ms KK said that the deposit was $22,600, and that she had contributed $11,300 to that deposit, sourced from her savings in her AL Bank account #...61. She said that she and the husband obtained a mortgage loan secured over the property by the NAB in the sum of $203,400.
Exhibit 31 records the purchase being completed in late 2019 for the purchase price of $226,000 plus stamp duty of $6,335, plus legal costs of $1,403. The acquisition cost was therefore $233,738.
On the affidavit evidence in the husband’s own case, he and Ms KK did not equally contribute to the acquisition cost of the Town GG property. From their starting point on acquisition, the husband contributed $15,000 and half the mortgage value he asserts at $101,000 (total being $116,000, or 49.6 per cent) and Ms KK contributed the $11,300 and half the mortgage value she asserts at $101,700 (total being $113,000, or 48.3 per cent). The husband did not reconcile this differing evidence presented in his case.
As to the source of the $11,300 Ms KK contributed to the acquisition, she adduced evidence of a AL Bank statements for account #...61 as an annexure to her affidavit. A deposit of $11,300 was made into that account in mid-2019. It was then withdrawn on the same day. Exhibit 41 records a withdrawal from Ms KK’s AL Bank account #...55 in mid-2019 that marries with the deposit of the same value in her account #...61. Exhibit 41 also records a lump sum deposit to account #...55 of $5,000 in mid-2019, and of $4,500 in mid-2019. Ms KK described the monies deposited into and then sourced from #...55 to pay the $11,300 as her “savings”. As recorded in these reasons, possibilities emerge as to the sources of the $11,300 applied by Ms KK to the acquisition. It is plausible that she could have accumulated these monies by way of the husband’s direct or indirect support of her, using that support to generate savings from her wages. It is possible that the husband could have channelled funds into Ms KK’s account in 2019. A consideration of all the evidence does not establish that it was wholly the husband’s funds contributed to the acquisition of the Town GG property above the earlier identified de minimis differential.
The rental income from the Town GG property from acquisition broadly provided sufficient funds to meet the mortgage and outgoings.
Notwithstanding the confusing evidence adduced in the husband’s case as to the source of funds to acquire the Town GG property, the wife has not established to the requisite degree that the husband has a greater interest in the property than that recorded on the legal title. I find that the value of the husband’s interest in the property for Item 11 is 50 per cent of the agreed value of the property of $380,000, being $190,000, and the value of the mortgage for Item 31 is 50 per cent of the total value of the mortgage, being $92,199.
Item 1 – the V Street property
The V Street property was purchased jointly by the husband and Ms KK in early 2023. The husband’s financial statement of mid-2023 did not include any reference the V Street property. The husband had no adequate explanation for this omission. The first time the husband disclosed his interest in the V Street property was on 13 October 2023 (Exhibit 7).
The legal title to the property is held equally by the husband and Ms KK (Exhibit 35).
In his affidavit the husband said that the purchase price was $636,000 and that stamp duty was $23,355, being a total of $659,355. He said that the funds for the purchase were sourced from:
a.Redraw of National Australia Bank home loan account ending [#...22] – secured over [Y Street, Town D]. I withdrew $98,646 [in early] 2023 which was applied to the purchase.
b.Funds available from my National Australia Bank Business Management account ending #...31. [In early] 2023 I paid myself a dividend from [F Pty Ltd] of $175,000 and subsequently withdrew $200,000 to apply to the purchase on that same day.
c.The following payments were made from my National Australia Bank Business Management accounting ending #...31 [in early] 2023 ($41,800 in total) in payment to the Deposit:
i. [Early] 2023 – $19,999.
ii. [Three days later] – $11,801.
iii. [The next day] – $10,000.
d. [Ms KK] contributed approximately $318,000
In her affidavit Ms KK said:
48.[The husband] and I jointly purchased this property in [mid] 2023 for $636,000 as Joint Tenants.
49.The deposit payable was $63,600. I withdrew $32,000 from my [AL Bank] Mortgage Offset account ending [#...55] [in early] 2023 being my half (1/2) share of the deposit.
…
51.The property was purchased unencumbered. In addition to the 50% deposit of #32,000, I contributed a further 50% of the funds necessary to complete the purchase including Stamp duty and legal fees (total $328,000) as follows:
a.[In early] 2023 a total of $258,000 in various amounts from my NAB Trade Account ending [#...76] and my savings account which were deposited into [the husband] and my joint NAB account ending [#...52].
b.The sum of $70,000 which I borrowed from [F Pty Ltd] in order to have the necessary funds available quickly as I was advised by the Agent “the Vendor is getting cold feet and may pull out”.
…
56.[In mid] 2023 I repaid [F Pty Ltd] the $70,000 I had borrowed…
The husband did not say in his affidavit that $70,000 of the funds Ms KK contributed were borrowed from F Pty Ltd. In cross-examination he said that he did not know whether F Pty Ltd had lent funds to Ms KK for the acquisition. He additionally conceded that he “worked out” what Ms KK’s contribution was for the purposes of his affidavit simply by calculating 50 per cent of the purchase price.
The property was purchased unencumbered. Ms KK did not say that she used the greater dividends she received, as compared to those received by the husband, as a joint owner of Q Business, to meet any part of her half acquisition contribution to the V Street property.
Ms KK’s affidavit contained annexures purporting to verify the source of the funds she contributed to this acquisition in excess of the $70,000 borrowed from F Pty Ltd. It emerged during the oral evidence that she had sourced funds from her late father’s estate to contribute to the balance of her half share of the acquisition cost. Exhibit 37 comprised some documents of the estate of her late father, being the first page of the grant of probate made in the Supreme Court of Queensland in late 2021 and contracts for the estate to dispose of real properties in Queensland and Victoria. Evidence was not adduced as to the inventory of the property of the estate or a distribution statement on the administration of the estate. As recorded earlier, Ms KK was an executor of the estate, but said she could not produce any bank statements of the estate to verify the transfer of funds from it to her. Statements from her NAB trade account and her AL Bank account #...55 were adduced into evidence (Exhibit 19). The earlier records withdrawals of lump sums that Ms KK says were applied to pay the balance of her half share of the acquisition cost of the V Street property. The latter records five entries over a period in mid-2023 with the description “inheritance”, depositing $74,519 into the account which was then used to repay the F Pty Ltd loan. While there are less than satisfactory aspects to the evidence adduced by the husband in his case on this subject matter, on balance if find it establish that Ms KK sourced her half contribution to the acquisition cost of this item, including the funds to make the repayment of the loan from F Pty Ltd, from an inheritance she received from her late father’s estate.
The wife has not established to the requisite degree that the husband has a greater interest than that as recorded on the legal title in the V Street property. I find that the value of the husband’s interest in the property for Item 1 is as asserted by the husband at 50 per cent of the agreed value of the property of $636,000, being $318,000.
Item 35 – capital gains tax and sale costs
The parties agree that the husband will sell three properties held by F Pty Ltd to fund part of the adjusting payment to the wife, being the ZZ Street property, the AF Street property, and the 1 AG Street property. They agree that the wife’s value for this item at $910,000 makes allowance for capital gains tax, income top up taxation on distribution funds from F Pty Ltd, and sale costs on the disposal of these three properties.
The husband’s value for this item includes all taxation imposts and selling costs impregnated in all the properties he or F Pty Ltd hold. Except as to the property he personally holds at Property P, USA (“Property P”), there is insufficient evidence to establish that he will dispose of other properties in the short-term to immediate future. His inclusion of a liability of the parties in the balance sheet for this item at $2,348,963 is rejected (Rosati & Rosati (1998) FLC 92-555 (“Rosati”)). His alternative value of this item is $1,015,573, being an agreed value of a liability that would crystallise if he were to additionally sell Property P to make an adjusting payment to the wife.
The husband’s evidence as to whether he will dispose of Property P is unclear. His objective is to hold this property for the long term and to borrow additional funds to pay any adjusting sum to the wife exceeding that produced from the sale of the three agreed properties, being the ZZ Street property, the AF Street property, and the 1 AG Street property. He gave evidence as to a capacity to borrow over $6 million to complete the AJ Street property acquisition and as to making enquiries with a bank to fund any adjusting payment to the wife that was greater than the value of the three identified properties to be sold. I find that the general tenor of his evidence was that he would be able to make such arrangements with banks as necessary to pay an adjusting sum to the wife without the sale of any further real properties.
I am not satisfied that the evidence establishes that Property P will be disposed of in the short‑term or immediate future. The realisation costs of this property will not be taken into account as a liability of the parties in the balance sheet (Rosati). As conceded by the wife, the impregnated capital gains tax payable in relation to Property P and the other real properties held by the husband and by F Pty Ltd will be considered in the adjustment to the contribution findings.
The value of the item shall be that as identified by the wife.
Item 36 – the husband’s debt to F Pty Ltd for borrowed legal costs
The wife accepted that $162,000 of the husband’s paid legal costs had been sourced from F Pty Ltd and that he had entered a written loan agreement with the company. The wife submitted that as F Pty Ltd is the alter ego of the husband, he has done nothing more than taken funds “out of one pocket of the trousers” and put them in the other. She therefore submitted it should not be included as a liability of the parties in the balance sheet.
The husband conceded there was no evidence adduced as to when this advance was provided, or how it was considered as an asset of F Pty Ltd in the compromised value of the husband’s interest in that entity (Item 15). Absent evidentiary foundation, the item is excluded.
IS IT JUST AND EQUITABLE TO ADJUST PROPERTY?
In Stanford & Stanford (2012) 247 CLR 108 the High Court observed that it is necessary for me to be satisfied that justice and equity will be achieved as part of the adjustment process pursuant to s 79 of the Act. The requirements identified in the High Court are readily satisfied in this matter having regard to:
(a)The long period of the relationship of the parties and the myriad of contributions made over that period;
(b)The parties’ relationship having broken down and them now living apart;
(c)The concession of each party as to property being adjusted to one another in that a cash adjusting payment needs to be made to the wife, their interests in the self-managed superannuation fund equalised, and the inability of the parties to continue to jointly own the Suburb S property occupied by the wife; and
(d)When consideration is given to the contribution and other factors identified below.
CONTRIBUTIONS
At the commencement of cohabitation, the only direct financial contribution made by the parties was that of the husband by way of the MM Street property, his motor vehicle, and savings. The wife said that at the commencement of the relationship she had “nominal savings and a little superannuation… and nominal other assets and no liabilities”. I so find.
At the commencement of cohabitation, the wife was employed on a full-time basis as a secretary at LL Company. She remained in full-time employment, achieving a “senior role”, and remaining in that role until the birth of the parties’ eldest child in 1990. She returned to employment at F Pty Ltd in 2008 and remained working there until separation.
At cohabitation the husband was employed on a full-time basis as a salesman at F Pty Ltd. He progressed to become a manager, and then to become the principal in or around 2003.
The husband contributed a benefit from his mother by way of the Z Street property as recorded earlier in these reasons. That property remains in specie. This contribution weighs in favour of the husband.
In 2004 the husband’s mother gifted by way of transfer one class A share in F Pty Ltd to the husband. This provided the husband with a 25 per cent interest in F Pty Ltd. In 2011 the husband’s father gifted to the husband half of his shareholding in F Pty Ltd. This provided the husband with a further 25 per cent interest in F Pty Ltd, taking his accumulated interest to 50 per cent. Each of these contributions weigh in favour of the husband when consideration is had to the use made of them (Pierce & Pierce (1999) FLC 92-844).
Upon Mr OO’s retirement in 2014 the husband acquired Mr OO’s half share of F Pty Ltd in 2014. Both the husband and Mr OO said that the husband paid him the sum of $1.65 million for that half share. The husband said that he and Mr OO arrived at that price without obtaining any formal valuation but were “assisted in coming to a mutually agreed amount by our Accountants”. He further said:
134.The amount required to purchase [Mr OO’s] share in the company was borrowed from [HH Finance]. Our property at [R Street, Suburb S] was used a security for these borrowings.
The wife said:
(f)In [early] 2014, [the husband] purchased [Mr OO’s] half share (1/2) of [F Pty Ltd] for $1,551,002. This was funded by a loan from [HH Finance] for $1,650,000. I recall signing a lot of documents in support of this transaction. I cannot now recall what they all were, although I remember they included at least one personal guarantee. I signed when [the husband] asked me to and he usually provided a brief explanation of the document.
I find, consistent with Mr OO’s unchallenged evidence, that the consideration paid to him for this acquisition was $1.65 million. I find that both the parties contributed to the acquisition of that half share. The parties secured the loan over their joint Suburb S property and personally guaranteed the performance of the HH Finance facility. The repayments in respect of the HH Finance facility were funded by way of the income produced for F Pty Ltd from its operations of the business.
Within the dynamic of their marriage the parties adopted what the husband described as “traditional roles”. From the birth of their first child in 1990, the parties constructed their relationship whereby the wife undertook the primary role as a homemaker and parent and the husband adopted the role of working outside the home in the business. The husband in his affidavit said “[n]either of us were idle. Home, family and the business occupied most of our time” (at paragraph 102). The husband undertook some homemaking duties, primarily to the outside of the matrimonial home, outside the hours of his employment and assisted with wife with parenting the children whilst he was not at work. The wife returned to employment when the children were older, supplementing the household income.
I find that the wife has established her case as to her indirect contributions to the development of the F Pty Ltd interests of the husband and the income it produced. It is supported by the husband’s own evidence, including that:
(a)Businesses do not “run themselves”. He had been principal since 2003. Businesses require a high degree of skill, dedication, motivation, energy, and experience. He had developed a good team, with good systems. These attributes “take time” to build. He worked hard in his employed role, and his current role required him to be present at work “a lot”. He is currently responsible for 30 staff;
(b)Part of the consideration for him receiving the shares from his parents was in recognition of his past and ongoing service to the business, and the value that he gave to the business at that time; and
(c)The relationship between another company and the principal, being the role he has undertaken since 2003, is fundamental to the success of the trading enterprise. The business relationship includes ongoing obligations requiring him to be engaged in the day-to-day operations as outlined in the agreement contract (Exhibit 17), and that he is required to undertake duties that extend beyond such contract.
The husband agreed (Exhibit 36) that since he became the sole shareholder, the trading enterprise has improved by way of turnover and profit, and that the cash flow of the business was used to fund the investment in the business. This platform was enabled by the gifts of half of the shareholding derived from the husband’s parents, and the role of the wife within the marriage dynamic providing the husband with capacity to work in the business as an employee, as principal as a 25 per cent owner, and then as a principal being the sole owner. Any case promoted by the husband as to the product of his personal exertion to financial contributions during the marriage achieving greater weight than those made by the wife by way of homemaking and parenting contributions within the relationship dynamic they created is not accepted.
The wife’s role in enabling the husband to undertake his prior employed and now self‑employed role cannot be undervalued. The husband said at paragraph 96 of his affidavit that the wife did a “very good job with our children and our home”. In cross-examination he described the wife’s work in this role as “fantastic”. I find that the husband could not have achieved his business and commercial success and investments without the contributions of the wife, and that their respective roles within their marriage enabled them to use the income achieved from F Pty Ltd to fund the acquisition and maintenance of a series of investment properties throughout the marriage.
Both parties contributed directly and indirectly to the superannuation entitlement of the other during the marriage. The evidence does not permit a finding as to extent to which these entitlements may have increased since separation.
The husband’s contentions as to the post separation improvements in the balance sheet and the improved profitability of F Pty Ltd being weighed solely in his favour is not accepted. He became the sole owner of the corporation by way of combination of gifts from his parents and indirect contributions made by the wife over the long marriage. The husband conceded in cross‑examination that the COVID-19 pandemic made a “massive” difference to F Pty Ltd achieving higher profits. The COVID-19 pandemic was a windfall to the business. The development of the business team of employees and its systems established over the years from when the husband became principal in 2003, coupled with a good product, customer loyalty, and reputation, was conceded by the husband in cross-examination to enable F Pty Ltd to be positioned to take advantage of that windfall. Those factors have continued after the pandemic to produce further improved trading results. I find that the husband’s post-separation contributions were grounded from a base he received from his parents, that was then the subject of expansion by way of acquisition from his brother, and to which the wife had contributed both directly and indirectly. It is artificial to suggest that the post-separation improvements in the value of F Pty Ltd, or the additional property acquired by the income produced were the result of his contributions alone.
After separation the wife ceased working at F Pty Ltd, however she continued to receive a wage. It was agreed that was a tax effective way for the husband to provide her with continuing benefit of the property of the parties. The registration, insurance, and maintenance of her motor vehicle have been paid since separation by F Pty Ltd. The husband has continued to fund her gas, electricity, and strata fees. In 2016 the wife commenced casual employment at a retail outlet.
The wife retained the benefit of the proceeds of sale of the T Street property of $1,068,000. These proceeds are reflected by way of the wife’s bank account at Item 19 and the funds in her solicitor’s trust account at Item 21 in the balance sheet.
I find that the husband has controlled the patrimony post-separation. He has obtained superior benefits from that control by way of income for his benefit and for the benefit of Ms KK. He had applied that patrimony, through F Pty Ltd, to:
(a)Advance $70,000 in 2016 to purchase Q Business for the benefit of Ms KK, being repaid in 2018 and 2019 from Q Business profits; and
(b)Advance $70,000 to Ms KK to fund the purchase of the V Street property, such funds subsequently being repaid to the corporation.
These factors weigh in favour of the wife.
In 2022 the wife received an inheritance from her late father of $265,000. She contributed these funds to her paid legal fees. It forms part of the balance sheet by way of Item 24.
The husband received an inheritance from his late mother’s estate, including a 50 per cent interest in the B Street property, $166,000 in funds, shares with a value of $23,462, and debts forgiven by way of floor plan funding of $70,000. The husband’s interest in the B Street property remains in specie in the balance sheet at Item 4.
The husband said he will receive further funds upon his late father’s estate being distributed. He anticipates he will receive $106,000, and that a $300,000 floor plan debt to F Pty Ltd will be forgiven. It is not clear that these items are reflected in the balance sheet. They will be considered in the adjustments to the contribution finding.
The post separation inheritances received by each weigh in favour of the husband.
Conclusion as to contributions
The parties agreed to the assessment of contributions combining superannuation and non-superannuation property. The wife sought a contribution finding by way of equality. The husband sought a contribution finding in his favour of 70 per cent and 30 per cent to the wife. They are in issue as to how to weigh and assess contributions.
The wife submits that the assessment of contributions ought to be approached by identifying all contributions in a holistic way across the course of the relationship and in the post separation period up to trial (Horrigan & Horrigan [2020] FamCAFC 25).
The husband submitted that contributions ought to be assessed by way of a hybrid approach, developing two pools of property, the first being property acquired by the husband after separation to which he contended the wife made no direct or indirect financial contribution and the second being the balance of the property of the parties, including their superannuation.
The first category includes:
(a)The three real properties he jointly owns with Ms KK, being the Suburb CC property, the Town GG property, and the V Street property, and their respective liabilities;
(b)His interests in G Investments Pty Ltd, trading as Q Business; and
(c)His post-separation inheritances identified as:
(i)The B Street property;
(ii)The inheritance he received from his mother, being $166,000 in cash and $23,462 in shares; and
(iii)The inheritance he will receive from his father, being $106,000 in cash.
It is his case that the property in this category is the product of his clear, direct and disparate contributions post separation, absent contribution of the wife.
A discretion exists as to which approach to take in the assessment of contributions (Norbis v Norbis (1986) 161 CLR 513). Justice and equity permeates the s 79 process (Bevan & Bevan (2013) FLC 93-545). While the approach submitted by the husband is legitimate, justice and equity, in the circumstances of this case, is achieved by the approach to the assessment of contributions holistically, as contended by the wife because:
(a)Notwithstanding the B Street property was received by way of post-separation inheritance and remains clearly identified in specie, the cash funds and shares received by the husband from his late mother’s estate are not capable of distinct identification in the balance sheet. They have been folded into other items in the balance sheet;
(b)The husband did not adduce evidence that the cash from his father’s estate had been received. The evidence does not support a finding that this cash forms part of an item in the balance sheet; and
(c)The findings recorded earlier in these reasons, including as to the husband’s disclosure failures as to the acquisition and maintenance of the property interest the husband holds with Ms KK in the Suburb CC property, corrodes the foundations underscoring this approach.
The approach to the assessment of contributions promoted by the husband would be counterintuitive to achieving the mandate of justice and equity in this case.
The requirements of s 79 are met in this matter by approaching the assessment of contributions holistically, and by analysing the nature, form, characteristics, and origin of the property currently comprising that to which s 79 applies, and, in turn, analysing the nature, form, and extent of the contributions (of all types) contemplated by s 79. That task is also undertaken by reference to the nature and form of the particular marriage partnership manifested by the circumstances of this particular marriage. The Full Court in Jabour & Jabour (2019) FLC 93‑898 recorded that there can be an overstated importance as to the increase in the value of a piece of property at the expense of “the myriad of other contributions that each of the parties has made during the course of the relationship” (at [43]).
A holistic assessment requires all contributions to be weighed collectively and not by way of so compartmentalising one against others or the remainder. Considering all the contributions identified in these reasons, contributed are assessed as 60 per cent in favour of the husband and 40 per cent in favour of the wife. This will see a disparity between the parties in dollar terms that equates to $15,539,207 to the husband and $10,359,471 to the wife, a difference of $5,179,736.
ADJUSTMENT TO THE CONTRIBUTION FINDING
The wife is 62 years old. The husband is 61 years old. Both are in good health. Neither party adduced evidence that they will not continue to be able to continue to work.
The husband’s current income is in the range of $600,000 per annum. No evidence was adduced as to him proposing to cease being a principal in the immediate to short-term future, or that his future income capacity will be reduced or diminished. I so find.
The wife receives income from her current retail employment in the range of $16,900 and investment income. Her current income from F Pty Ltd will cease. The wife gives unchallenged evidence, that I accept, that she plans on retiring in the next two years.
The adjusting payment to be received will enable the wife to earn additional income from that capital in the future.
I find that the husband has a vastly superior future income earning capacity than that of the wife.
By way of the contribution finding, the husband will have the benefit of $5,179,736 greater property than the wife.
Each of these property and income factors attract not insignificant weight in favour of the wife. Additionally, the husband has the benefit of the exchanged contract for the AJ Street property. The husband’s disclosure failures prevented a capacity to discern the current value of this chose in action. It will be robustly and broadly weighed.
The husband has the benefit of being in a relationship with Ms KK that is, on his case, for their mutual benefit. There was no suggestion that the wife has re-partnered. This factor weighs slightly in favour of the wife.
The superannuation entitlements of the parties' form part of the single pool of property being adjusted between them.
It is agreed that the husband will assume responsibility for any taxation impost incurred on the sale of real property used to generate funds for the payment of the adjusting sum or part thereof to the wife (including capital gains tax incurred on the sale of real property and any top up income tax by way of distribution of monies from a corporation). The value of this taxation liability to be incurred on the disposal of three identified properties is a liability item in the joint balance sheet. The balance of the impregnated disposal costs embedded in the remaining real property held by the husband and F Pty Ltd is recorded in the husband’s primary contented value for Item 35 in the balance sheet, less the value of that item as found. This factor is weighted in favour of the husband.
The factor in the adjustment to the contribution findings that weighs heavily in favour of the wife is the failure of the husband to disclose his relevant financial circumstances. Such failures, as identified earlier in these reasons, have obstructed the findings as to a clear picture of the husband’s current property and resources, including the consequential inability to find the extent and value of his equitable interest in the Suburb CC property he holds with Ms KK over and above that found in the balance sheet, and as to his failure to disclose his use and application of $500,000 derived from the property of the parties, not being reflected in, and thus lost from, that balance sheet.
If a contribution finding as to equality was achieved, the wife sought an adjustment therefrom of five per cent in her favour to achieve 55 per cent of the property of the parties. The husband submitted that no adjustment be made to the contribution finding should it was found to be as contended at 70 per cent in his favour.
A holistic consideration of the matters raised above warrants an adjustment from the contribution finding of 7.5 per cent in favour of the wife. In dollar terms, the value of this adjustment to the wife is $1,942,401 a difference of $3,884,802.
CONCLUSION – JUSTICE AND EQUITY
Accordingly, the property of the parties will be adjusted 47.5 per cent to the wife and 52.5 per cent to the husband.
To achieve 47.5 per cent of the property of the parties identified in the balance sheet, the wife ought to receive $12,301,872.
The wife currently has in her possession or will receive the following by way of the proposed consent orders:
Ownership Description ASSETS 2 Joint R Street, Suburb S NSW 2,500,000 17 Wife Share Portfolio 360,305 19 Wife Bank account 901,288 21 Wife Funds held on trust for legal costs 173,366 Total 3,934,959 ADD BACKS 24 Wife Legal Costs 267,643 Total 267,643 TOTAL ASSETS – LIABILITIES 4,202,602 SUPERANNUATION Member Name of Fund Type of interest 38 Wife Antonescu Superannuation Fund SMSF 1,650,230 after implementation of the superannuation splitting order 39 Wife Super Fund 1 Accumulation 14,418 Total 1,664,648 TOTAL NET SUPERANNUATION + NON-SUPERANNUATION 5,867,250
If she has the property in the table above, she achieves $5,867,250 she therefore requires a payment from the husband of $6,434,622 to achieve $12,301,872 being 47.5 per cent of the property of the parties.
The husband’s overall entitlement to 52.5 per cent of the property of the parties identified in the balance sheet equates to $13,596,805.
Pursuant to the orders, the husband has or will receive the following:
Ownership Description ASSETS 1 Husband & Ms KK V Street, Town D NSW 318,000 3 Husband W Street, Suburb X NSW 950,000 4 Husband & Mr OO B Street, Town D 1,475,000 5 Husband 2 B Street Town D NSW 875,000 6 Husband Y Street Town D NSW 915,000 7 Husband Z Street Town AA NSW 585,000 8 Husband & Ms KK as joint tenants BB Street Suburb CC NSW 1,024,600 9 Husband 1 DD Street Suburb EE NSW 340,000 10 Husband 2 DD Street Suburb EE NSW 350,000 11 Husband & Ms KK as joint tenants FF Street Town GG QLD 190,000 12 Husband Property P USA 1,069,167 13 Husband G Investments t/a Q Business 210,672 14 Husband H Pty Ltd 581,251 15 Husband F Pty Ltd 10,976,762 16 Husband Share Portfolio 344,994 18 Husband Bank accounts 62,840 22 Husband Funds held on trust for legal costs 118,800 23 Husband Funds deposited against Suburb CC mortgage 400,000 Total 20,787,086 ADD BACKS 25 Husband Legal Costs 255,821 Total 255,821 LIABILITIES 26 Husband NAB market Rate Facility #...07 38,028 28 Husband NAB home loan #...39
Re properties at 1 & 2 DD Street, Suburb EE, NSW325,716 29 Husband & Ms KK NAB home loan #...97
Re property at BB Street, Suburb CC, NSW $605,960 (100%)502,980 30 Husband & Ms KK NAB home loan #...14
Re property at BB Street, Suburb CC, NSW $208,827 (100%)104,413 31 Husband & Ms KK NAB home loan #...22
Re property at FF Street, Town GG QLD $184,397 (100%)92,199 32 Husband NAB home loan #...22
Re property at Y Street, Town D236,840 34 Joint HH Finance Re property R Street, Suburb S NSW 451,533 35 Husband CGT and sale costs 910,000 Total 2,661,709 TOTAL ASSETS – LIABILITIES 18,381,198 SUPERANNUATION Member Name of Fund Type of interest 37 Husband Antonescu Superannuation Fund SMSF 1,650,230 after implementation of the superannuation splitting order Total 1,650,230 TOTAL NET SUPERANNUATION + NON-SUPERANNUATION 20,031,428
The husband accordingly currently holds $20,031,428. He ought to hold $13,596,806. Hence, he must pay to the wife $6,434,622, rounded down to $6,434,600.
It was agreed during final submissions that the husband would pay the adjusting sum to the wife by instalments, the first being up to $3.5 million within six months, and any balance exceeding $3.5 million within 12 months. An order will be made for the husband to pay the wife $3.5 million within six months, and the balance of $2,934,600 within 12 months. The husband said that he could not be heard against interest being paid on that part of the adjusting sum that remained unpaid from the date the first instalment was due until the balance of the adjusting sum was paid at the rate prescribed by the Rules. Interest accruing is just in circumstances where the husband will continue to have the use of the wife’s adjusted property for any period after six months from the date of these orders. Orders will be made in those terms. For the reasons identified, the husband will bear any taxation imposts and sales costs incurred upon the disposal of property to fund the adjusting payment to the wife.
Standing back, I find the distribution of the property of the parties in the terms identified above is appropriate and otherwise just and equitable. Orders will be made accordingly.
I certify that the preceding two hundred and thirty-eight (238) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Campton. Associate:
Dated: 6 September 2024
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