Blackshaw and Blackshaw
[2014] FCCA 1371
•25 July 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| BLACKSHAW & BLACKSHAW | [2014] FCCA 1371 |
| Catchwords: FAMILY LAW – Property – husband’s application not pressed – delay in hearing as a consequence – allegations by wife of husband failing to engage in proceedings or to make disclosure as required – consideration of the evidence – determination that evidence of the wife was more reliable than that of the husband – consideration of contributions financial and non-financial pre and post separation. |
| Legislation: Veterans Entitlement Act 1986 |
| Hickey v Hickey and the Attorney General for the Commonwealth (2003) FLC 93-143 Russell v Russell (1999) FLC 92-877 Stanford v Stanford (2012) 47 FLR 481 C v C (2005) FCA 429 Weir v Weir (1993) FLC 92-338 Black v Kellner (1992) FLC 92-287 Giunti v Giunti (1986) FLC 91-759 Mezzacappa v Mezzacappa (1987) FCA 91-853 |
| Applicant: | MR BLACKSHAW |
| Respondent: | MS BLACKSHAW |
| File Number: | TVC 600 of 2012 |
| Judgment of: | Judge Coker |
| Hearing date: | 27 March 2014 |
| Date of Last Submission: | 27 March 2014 |
| Delivered at: | Townsville |
| Delivered on: | 25 July 2014 |
REPRESENTATION
| Solicitors for the Applicant: | Self-represented |
| Counsel for the Respondent: | Mr Honchin |
| Solicitors for the Respondent: | Ross Lawyers |
ORDERS
That the funds retained by the Husband’s solicitor Purcell Taylor Lawyers in the sum of $20,314.32 be transferred to the Wife’s solicitor Ross Lawyers for the sole use of the Wife within seven (7) days from the date of these Orders.
Appointment of the Wife as trustee for sale
That MS BLACKSHAW, the Wife, be appointed trustee (“the trustee”) for the sale of:
(a)Property T in the State of Queensland (more properly described as Lot (omitted) on Survey Plan (omitted) in the County of (omitted) and the Parish of (omitted) with title reference (omitted)) (“the Property T property”); and
(b)Property A in the State of Queensland (more properly described as Lot (omitted) on Registered Plan (omitted) in the County of (omitted) and the Parish of (omitted) title reference (omitted) (“the Property A property”);
(c)(omitted) cruiser Registration “(omitted)” and trailer registration “(omitted)” with such item to be delivered to the Respondent’s solicitor within two (2) business days from the date of these Orders;
(d)(omitted) motor bike Registration “(omitted)” with such item to be delivered to the Respondent’s solicitor within two (2) business days from the date of these Orders.
Sale of Real Properties
That the trustee effect a sale of the real property for the best price reasonably obtainable in the following manner:
(i) list of the real property for sale by private treaty with such agent as the trustee may agree to appoint within seven (7) days;
(ii) the sale price at which the real property is listed be the price nominated as the fair market value by the agent, not less than:
A.$635,000.00 for Property T
B.$375,000.00 for Property A.
(iii) the Husband cooperate in every way with the trustee and the agent (without limiting the generality of the foregoing):
A.making the key available to the trustee or agent from the date of these Orders but handover the keys permanently fourteen (14) days from the date of these Orders by providing the keys to the office of the Respondent’s solicitor;
B.signing all documents requested by the trustee in relation to the sale of the real property;
(iv) in the event that the property is not transferred into the name of the trustee, the parties each execute the contract for sale, sign all documents and do all things necessary to effect a sale;
(v) the trustee have the primary conduct of sale on behalf of both parties, and in respect of the sale any costs to trustee form part of the legal costs of sale and be deducted from the proceeds of sale.
In the event the real property is not sold by private treaty within thirty (30) days of the date of these orders, the trustee shall hold the real property for sale by public auction with the agent appointed pursuant to these orders by the trustee.
The reserve price of that auction be on such terms as the trustee in her absolute discretion may determine.
In the event the bidding at the auction does not reach the reserve price the trustee may negotiate with the highest bidder and effect a sale of the real property.
If the real property remains unsold the trustee shall do all acts and things and sign all documents necessary to immediately release the real property for sale by public auction again on a date nominated by any sale agent.
Any person shall be at liberty to bid on the property at any auction or make an offer in relation to the real property to the trustee.
On settlement of the sale of the real property the proceeds of sale be paid in the following manner and priority:
(a)Property T property:
(i) all costs and expenses of sale including legal costs and disbursements, agent's commission, valuers fees and auction expenses including repayment of any such expenses, be paid by the trustee;
(ii) the amount required to discharge the mortgage of the parties first on the Property T property and secondly the Property A property;
(iii) the amount required to pay all municipal and other rates outstanding with respect to the real property;
(iv) the amount required to repay to the party carrying out work for the real property for the cost of such work carried out in accordance with any requirement of the trustee in accordance with these orders;
(v) any and all remaining funds from the sale of the Property T property to the Wife;
(vi) that there be liberty granted to the parties, or the trustee on three (3) days notice for implementation of these orders.
(b)The Property A property:
(i) all costs and expenses of sale including legal costs and disbursements, agent's commission, valuers fees and auction expenses including repayment of any such expenses, be paid by the trustee;
(ii) the amount, if any, required to discharge the mortgage of the parties on the Property A property ;
(iii) the amount required to pay all municipal and other rates outstanding with respect to the real property;
(iv) the amount required to repay to the party carrying out work for the real property for the cost of such work carried out in accordance with any requirement of the trustee in accordance with these orders;
(v) any and all remaining funds from the sale of the Property A property to the Wife;
(vi) that there be liberty granted to the parties, or the trustee on three (3) days notice for implementation of these orders.
That the respondent must provide the trustee with vacant possession of the Property T property within fourteen (14) days of the date of these Orders and leave the property in a clean and tidy state suitable for sale.
The Husband shall be restrained and an injunction shall issue, restraining the Husband from:
(a)Continuing to live in the Property T or maintaining any personal property on the Property T property after the expiry of fourteen (14) days from the date of these Orders, without the consent in writing of the trustee for sale;
(b)Interfering with the sale of either the Property T property or the Property A property;
(c)Doing anything or any act to adversely affect the sale or sale price of either the Property T property or the Property A property.
That upon settlement of the sale of the real property, the parties sign all necessary documents to cancel any insurance in respect of the real property and that any refund be deposit to the trust account of Ross Lawyers solicitor, to be distributed in accordance with these Orders.
The trustee shall within fourteen (14) days of the date of these Orders take all steps necessary to advertise for sale the vessel and trailer and motor cycle for the best price reasonably obtainable:
(i) After deducting the costs of sale (including advertising and agents fees if any) for the balance remaining to be paid to the trust account of Ross Lawyers, solicitor for the Wife;
(ii) in the event that the trustee cannot effect a sale of the vessel and trailer within sixty (60) days that she will arrange for the vessel and trailer to be sold at a public auction within the following three (3) months;
(iii) that the parties sign all necessary documents and do all necessary things to effect a sale of the vessel and trailer.
Superannuation and Other pension Schemes
The Wife retain all her rights title and interest in her (omitted) superannuation scheme.
The Husband retain all his rights title and interest in his (omitted) superannuation scheme and all his rights title and interests in his Veteran’s Entitlements Act 1986 pension.
In accordance with section 90MT(1)(b) of the Family Law Act 1975 (the Act), whenever a splittable payment within the meaning of section 90ME of the Act becomes payable to or on behalf of Mr Blackshaw from his interest in the Defence Force Retirement and Death Benefits Scheme (the DFRDB), the Wife, Ms Blackshaw is entitled to be paid (by the Trustee of the DFRDB) 50% of the splittable payment and there shall be a corresponding reduction in the amount Mr Blackshaw would be entitled to receive but for these Orders.
The operative time for Order 16 is four (4) business days after the service of the final orders on the Trustee.
Parties otherwise retain property, businesses & etc
The Wife retain all her rights title and interest to the exclusion of the Husband:
(a)in the business “(omitted)” and all debts associated with that business;
(b)in any insurance policy, monies in accounts held by her;
and the Husband indemnify the Wife with respect to outstanding taxes, fees or statutory charges arising for the conduct of the business up to 12th March 2012 not otherwise dealt with in proceedings by the Commissioner of Taxation or WorkCover as at the date of these Orders.
The Husband retain all his rights title and interest in the business “(omitted business)” and all debts associated with that business.
That unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:
(a)each party be solely entitled to the exclusion of the other to all other property (including choses-in-action and motor vehicles) in the possession of such party as at the date of these orders (the furniture, personal possessions and like chattels in the real property) being deemed to be in the possession of the party;
(b)monies standing to the credit of the parties in any bank account are to remain the property of that party;
(c)insurance policies remain the sole property of the beneficiary named therein;
(d)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders;
(e)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
Other proceedings
The Wife discontinue Third Party proceedings against the Husband in proceedings No. (omitted) in the Magistrates Court at Brisbane within fourteen (14) days of these Orders and shall be restrained from taking any further proceedings against the Husband with respect to the debt claimed by the Commissioner of Taxation in proceedings (omitted) in the Brisbane Magistrates Court or in respect of the claim by WorkCover in proceedings No (omitted) in the Brisbane Magistrates Court.
Parties failing to execute documents
In default of either of the parties doing all acts and things and executing all documents as are necessary to give effect to these orders within fourteen (14) days of the date on which the obligation to do so is set under these orders, and on the Registrar being satisfied of such failure or neglect or default by the parties by way of affidavit evidence only, the Registrar of the Federal Circuit Court of Australia at Townsville is appointed pursuant to section 106A of the Family Law Act 1975 to execute all documents in the name of the party in default and to do all acts and things necessary to give validity and operation to these orders and the party in default shall pay to the other party that party’s costs and disbursements on an indemnity basis.
IT IS NOTED that publication of this judgment under the pseudonym Blackshaw & Blackshaw is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT AT TOWNSVILLE |
TVC 600 of 2012
| MR BLACKSHAW |
Applicant
And
| MS BLACKSHAW |
Respondent
REASONS FOR JUDGMENT
THE APPLICATIONS
On 6 June 2012 Mr Blackshaw, whom I shall refer to as the husband, filed an application in this court seeking orders in relation to a property settlement to be effected between he and Ms Blackshaw, whom I shall refer to as the wife. The orders that were sought in the property application were in these terms:
1. That the Wife transfer to the Husband all rights, title and interest in and to the properties situated at Property T, in the State of Queensland and Property S in the State of Queensland.
2. That the Husband transfer to the Wife the property situated at Property A in the State of Queensland.
3. That the Husband assume liability and indemnify the Wife in respect of all mortgages registered over the property situated at Property T in the State of Queensland and the Property S property in the State of Queensland.
4. That the Wife assume liability and indemnify the Husband with respect to the mortgage registered over the Property A property in the State of Queensland.
5. That the Wife pay to the Husband One Hundred and Fifty Thousand Dollars ($150,000.00) within thirty (3) days of the transfers referred to in paragraph 1 and 2 above.
6. That the property at Property A in the State of Queensland be listed for sale and that the proceeds of the sale be applied as follows:
To (omitted) Ltd including the discharge of any arrears;
Payment of any Capital Gains Tax;
Payment of any Land Tax;
Payment of the agent’s commission, advertising expenses, auction expenses and legal expenses;
Payment of any outstanding local authority rates and all other outstanding charges;
(f) Any balance sale proceeds to be paid to the Wife;
(g)Should the sale of the property and associated costs result in a deficit the Wife shall be liable solely for all monies outstanding.
7. That within thirty (30) days of the date of these Orders, the Wife do all acts and things and sign all documents as necessary to cause her to transfer to the Husband, at his expense, all of her right, title and interest in and to the following property which the Husband is to retain:
(a) The Audi motor vehicle with the registration number (omitted);
(b) The Honda motor bike;
(c) Ride-on-mowers;
(d) The two (2) (omitted) fridges;
(e) The half cab aluminium (omitted) boat;
(f)Household furniture currently in the Husband’s possession;
(g) Tools currently in the Husband’s possession;
(h) Husband’s superannuation entitlements including:
(i) DFRDB Pension;
(ii) Vet Affairs TPI Pension; and
(iii) (omitted) Superannuation Fund.
(i)All other items of personal property currently in the Husband’s possession save as otherwise provided for in these Orders.
8. That within thirty (30) days of the date of these Orders, the Husband do all acts and things and sign all documents as necessary to cause him to transfer to the Wife, at her expense, all of his right, title and interest in and to the following property which the Wife is to retain:
(a) The (country omitted) Timeshare;
(b) The Honda;
(c) Household furniture currently in the Wife’s possession;
(d) Wife's (omitted) Superannuation Fund:
(e) Wife’s inheritance of $200,000.00; and
(f)All other items of personal property currently I the Wife’s possession save as otherwise provided for in these Orders.
9. That within thirty (30) days of the date of these Orders, the Husband and Wife do all acts and things and sign all documents as necessary to transfer the business known as (omitted) (“the Business”), to the Wife.
10. That the Husband retains the (omitted) and (omitted) divisions of the Business which includes all property.
11. That the Wife retains the (omitted) divisions & (omitted) division and the (omitted) division of the Business which includes all property.
12. That any further Orders as this Honourable Court deems meet.
13. That the Wife pay the Husband’s costs of and incidental to these proceedings.
The wife filed a response on 16 July 2012 in which she noted that she agreed with a considerable number of the orders that were sought. They included orders 1, 2, 3, 4, 6(a) through 6(e), 7(a) through 7(g), 7(h)(ii), 7(i) and 8(a) through (c) and 8(e) and (f) and order 12.
However, in addition she sought orders 1 through 12 in terms of Part 4b of the response of 16 July 2012. Those additional orders were in these terms:
1. That within thirty (3) days of the date of the Orders, the Wife transfer to the husband all of her right, title and interest in and to the properties situated at Property T in the State of Queensland and Property S in the State of Queensland.
2. That contemporaneously with paragraph 1 the Husband release and refinance the mortgages of the properties situated at Property T in the State of Queensland and Property S in the State of Queensland.
3. That in the event the Husband fails to cause the release and refinance of either of the properties at order 1 above then the property in question be listed for sale by auction within seven (7) days of the date of failure to comply with order 2, at a reserve to be agreed upon between the parties and failing such agreement to be determined by the proper officer of the Real Estate Institute or his/her nominee and that the proceeds of the sale be applied as follows:
(a)Discharge of the mortgage over the property including the discharge of any arrears;
(b)Payment of any Capital Gains Tax as may be due following sale;
(c) Payment of any Land Tax as may be due following sale;
(d)Payment of the agent’s commission, advertising expenses, auction expenses and legal expenses due on the sale;
(e) Payment of any outstanding local authority rates and all other outstanding charges;
(f)The remainder of the proceeds to be deposited into the Ross Lawyers Trust Account until such time as all sales and transfers of properties are finalised and a family law property settlement reached; and
(g)Should the sale of the property and associated costs as referred to in order 3 result in a negative balance the Husband and Wife will be liable equally for all payments referred to in order 3(a) to (e).
4. That contemporaneously with order 1 and 2 the Husband transfers to the Wife all his right title and interest in and to the property situated at Property A in the State of Queensland and Property V and Property A in the State of Queensland.
5. That contemporaneously with paragraph 4 the Wife does all acts and things to cause the release and refinance of the mortgages of the properties situated Property A, in the State of Queensland and Property V and Property A in the State of Queensland.
6. That in the event the Wife fails to cause the release and refinance of either of the properties at order 5 above then the property in question be listed for sale by auction within seven (7) days of the date of failure to comply with order 5, at a reserve to be agreed upon between the parties and failing such agreement to be determined by the proper officer of the Real Estate Institute or his/her nominee and that the proceeds of the sale be applied as follows:
(a)Discharge of the mortgage over the property including the discharge of any arrears;
(b)Payment of any Capital Gains Tax as may be due following sale;
(c ) Payment of any Land Tax as may be due following sale;
(d)Payment of the agent’s commission, advertising expenses, auction expenses and legal expenses due on the sale;
(e )Payment of any outstanding local authority rates and all other outstanding charges;
(f)The remainder of the proceeds to be deposited into the Ross Lawyers Trust Account until such time as all sales and transfers of properties are finalised and a family law property settlement reached; and
(g)Should the sale of the property and associated costs as referred to in order 3 result in a negative balance the Husband and Wife will be liable equally for all payments referred to in order 3(a) to (e).
7. That within thirty (3) days of the date of these orders, the Wife do all acts and things and sign all documents as necessary to cause her to transfer to the Husband, at his expense, all of her right, title and interest in and to the following property which the Husband is to retain:
(a)The Audi motor vehicle with the registration number (omitted);
(b) The Honda (omitted) motorcycle;
(c ) Ride-on-mowers;
(d) The two (2) (omitted) fridges;
(e) The half cab aluminium (omitted) boat;
(f)The (omitted) motorcycle currently in the husband’s possession;
(g) Household furniture currently in the husband’s possession;
(h) Tools currently in the husband’s possession; and
(i)All other personal items of property currently in the husband’s possession save as otherwise provided for in these orders.
8. That within thirty (30) days of the date of these orders, the Husband do all acts and things and sign all documents as necessary to cause him to transfer to the Wife, at her expense, all of his right, title and interest in and to the following property which the Wife is to retain:
(a) The Honda (omitted) motorcycle;
(b) Household furniture currently in the Wife’s possession;
(c ) The Wife’s inheritance of $200,000; and
(d)All other items of personal property currently in the Wife’s possession save as otherwise provided for in these orders.
(e )That the Husband reimburse the Wife one half of the costs of and incidental to the valuation of the business (omitted) through (omitted).
9. That the (omitted) business, including associated debts, be divided between the parties on a fair and equitable basis, upon the completion of the valuation currently being undertaken by (omitted) as follows:
(a)That the Wife retain the business name “(omitted)” and the (omitted) and (omitted) sections of the business; and
(b)That the Husband retain the (omitted) and (omitted) sections of the business; and
(c)That upon the completion of the business valuation the parties apportion 50% of the valuation of the (omitted) section to each of them and that each party retain the portion of the (omitted) that they currently have in their possession;
(d)That the debts associated with the business up to the date of these Orders be divided between the parties equally.
10. That the DFRDB Pension be the subject of a Family Law superannuation split in a percentage that will effect a fair and equitable property settlement between the parties.
11. That the Husband pay the Wife’s costs of and incidental to these proceedings.
12. Any other orders this Honourable Court deems fit.
THE CHRONOLOGY
Thereafter the conduct of the proceedings took an unfortunate turn. Quite simply, the husband, for reasons which cannot be fully explained seemed to take a position of not being involved in the proceedings. For example, on the first return date, 17 July 2012, the proceedings were adjourned as the parties agreed that further valuation evidence needed to be obtained in order to ensure that the matter could be dealt with appropriately. To that end, time was allowed for those valuations to be effected and a conciliation conference was ordered to occur on 23 August 2012.
Interestingly, the Registrar attending upon the conference on 23 August 2012 noted that the parties had virtually settled the matter in principle but there were just some further steps that were required to be taken, in order to ascertain the exact position with regard to liabilities that might attach, in relation to the matter. The Registrar directed that the matter be adjourned for further mention with leave to vacate, in the event of consent orders being made, however, on 18 October 2012 when the matter came back before the court the positions of each of the parties appears, if anything, to have hardened and there was no agreement reached leading to directions being made with regard to the matter being fixed for trial.
The position of the wife, in relation to that particular aspect of the matter and the inability to finalise proceedings was best summarised as, a contention that there needed to be further disclosure by the husband and the husband, for reasons unfortunately known best to himself, refused to provide information in relation to such matters. Following the direction for the listing for trial, the matter meandered towards a trial date, however, when notice was previously given in relation to the listing, concern was expressed on the part of the wife that the matter would not be properly able to be proceeded with, because of the fact that there continued to be a total lack of disclosure on the part of the husband.
To that end, an application was then filed on the part of the wife seeking orders with regard to disclosure being effected. In fact, the parties were able to reach agreement in relation to that aspect of the matter and on 9 July 2013 orders were made which included specifically orders for each party to file and serve a list of documents to be relied upon and for them to provide copies of any such documents as may be requested, following the delivery of the listed documents.
It was also specifically directed that the parties take steps with regard to arranging the sale of two of their jointly owned properties, so as to reduce liabilities and payments that were required to be made by the parties, and specifically went on to note that each of the parties were to retain a property in their possession and control. In the wife’s case, it was the property situate at Property A and in the husband’s case the property situate at Property T. They were to be solely responsible for any and all liabilities arising in relation to properties and indemnify the other party in relation to such liabilities.
Further concern was expressed thereafter by the wife in relation to the husband’s compliance with those orders and further applications came before the court as a result of those concerns, including with respect to the husband actually attending to the payment relating to the property which was to remain, at least pursuant to the interim orders, in his possession or control.
Dispute also arose in relation to what exactly was required to be paid pursuant to any such obligations under those orders, and as a result of that, the matter was further mentioned on 12 November 2013, when orders were made in relation to specifying particularly the payments by each party, in relation to the properties that were occupied by them.
It was specifically noted that they were to be responsible for the payment of all payments as and when they fell due, in relation to their property, including in respect of the payment of mortgages, rates, insurances and any and all other outgoings attaching to the properties. Further, the parties were to ensure that all arrears of any type, including mortgages, rates, insurances and other outgoings, were to be paid and that written confirmation was to be provided to the other party’s legal representatives by 4 pm on 6 December 2013.
Insofar as the husband was concerned that did not occur and was simply a continuation of the husband’s apparent refusal to comply with the orders of the court or to, in any real way, act cooperatively. There were further examples of that including, particularly, a failure by the husband to comply in any and all respects with the terms of order 5 of the orders which were made on 12 November 2013. Order 5 was in these terms:
5. That unless otherwise agreed between the parties (omitted) Accountants be appointed to value the businesses (omitted) and (omitted) and that the parties be responsible for the payment equally of the cost with the provision of documentation by each party to (omitted) Accountants, or other accountant as may be agreed between the parties and to provide within 14 days the following documents:
(a)Copies of all management reports for 2012 and 2013 financial years, and if not available, copies of tax reports used to prepare the four quarterly BAS statements;
(b)Comprehensive list of all plant and equipment owned by (omitted business);
(c)Copies of all accounts receivable and accounts payable as at 30 September 2013;
(d)Details of any outstanding statutory liabilities including, but not limited to GAST, income tax, PAYG withholding tax, compulsory superannuation and FBT; and
(e)Copy of bank reconciliation for (omitted) as at 30 June 2013.
It was also specifically directed that unless otherwise agreed, and it should be noted that there was no other agreement, funds that were held in the trust account of Purcell Taylor, the solicitors for the husband, were to be utilised for the purposes of payment of those expenses associated with obtaining those valuations.
The husband has not provided any of the information required in respect of those valuations and, in fact, there has been provided to the court an affidavit under the hand of Mr B, an accountant and director of the firm, (omitted) Accountants, indicating the position with regard to compliance with those orders.
He says at paragraph 3 of his affidavit filed electronically on 26 March 2014:
On 25 March 2014 I finalised my valuation of “(omitted)”, a copy of which is attached and marked “2”.
Additionally, he notes at paragraph 5:
To date have not been provided the relevant documents to undertake a similar valuation of “(omitted business)”.
That is simply one of many indicators of the husband’s failure to make disclosure or to, in fact, cooperate with the proceedings which he, himself, initiated. I make reference, particularly, to those aspects of the matter, because it is important that there be a clear understanding of how the proceedings before this court were then dealt with.
The husband was legally represented until leave was given to his solicitors, Purcell Taylor, to withdraw on 13 March 2014. At that time, the matter was mentioned for what is referred to by me as a compliance check, to confirm the matters readiness for trial and, in particular, to confirm that all the directions had been complied with, affidavits filed, evidence accumulated and ready to be presented in an appropriate manner and that any other procedural matters, that might necessarily be required such as granting leave for witnesses to attend by telephone if necessary, had been attended to.
At that time the legal representatives for the husband indicated that they were without instructions and sought to withdraw. They indicated that disclosure of documents, requested on repeated occasions by the legal representatives for the wife had not been made available to them and that they were simply unable, in the circumstances, to represent the husband any further. Leave was granted on that day to withdraw in relation to proceedings and it was directed that the legal representatives for the husband give him notice of the fact that the matter was to proceed on 27 March 2014 and that it was in all likelihood, intended to proceed on an undefended basis.
However, the husband made himself available for the hearing and, in fact, filed on 24 March 2014 an affidavit in which he sought to set out particulars in respect of the relationship, and also details of what he considered an appropriate property settlement to be effected between he and the wife and why. The husband contended that he had not been given appropriate notice by his legal representatives of the requirements in relation to the matter. He indicated that he did not have the funds necessary to attend upon the matter and that he had relied upon his legal representatives to represent his position in relation to the proceedings.
Reliance upon the affidavit filed on 24 March 2014, in other words only three days prior to the hearing which commenced on 27 March 2014, was opposed. Following submissions in relation to the matter, I indicated that I intended to uphold the objection to rely upon such documentation. To have allowed that to have occurred would, perhaps, have facilitated some improvement in the position of the husband, but would have given rise to the gravest of injustices to the wife, who had been put, as a direct result of the husband’s commencement of the proceedings and then subsequent failure to comply with directions with respect to disclosure of documentation, in an untenable position.
THE HEARING
If natural justice was to be effected in relation to the proceedings, then such a course was appropriate. The husband was, however, able to participate in the proceedings to the extent of clarifying the orders that were sought by him in relation to the matter, and also to direct cross-examination to the wife and to her witnesses, though he did not choose to cross-examine witnesses, as well as to address me finally, in relation to the proceedings.
The orders that the husband sought in relation to the matter were detailed in paragraph 70 of the affidavit filed on 24 March 2014 and although, as indicated, the husband was not given leave to rely upon that document he was able to specify the terms of the orders (a) through (j) as listed in his affidavit. The orders finally sought by the husband were in these terms:
(a)The funds held in Trust with Purcell Taylor lawyers is shared equally between both parties.
(b)I retain the property at Property T, with a 6 month period to secure finance, if unsuccessful the property to be listed for sale.
(c ) Ms Blackshaw to pay me $90,000.00.
(d)I retain my business and all associated equipment. Including any other property I hold for my sole use and benefit.
(e)I retain 100% of my superannuation as I believe Ms Blackshaw’s inheritance offsets this asset.
(f) Ms Blackshaw retains the property at Property A.
(g) Ms Blackshaw retains the remainder of her inheritance.
(h)Ms Blackshaw remains responsible for all debts associated with (business omitted).
(i) Ms Blackshaw retains her personal superannuation funds.
(j)Ms Blackshaw retains (business omitted) and any property she holds for her sole use and benefit.
The wife also sought to more specifically detail the orders that she sought in relation to the proceedings noting, particularly, the significant changes in circumstances of the parties since the filing of the application and response in mid-2012 including, particularly and unfortunately, the recognition of the fact that there were now proceedings in the state courts with regard to claims by both the Deputy Commissioner of Taxation as well as WorkCover in relation to payments that had not been effected in respect of liabilities arising from the operation of the business, (omitted) Pty Ltd.
The orders finally sought by the wife were in these terms:
1. That the funds retained by the Husband’s solicitor Purcell Taylor Lawyers in the sum of $20,314.32 be transferred to the Wife’s solicitor Ross Lawyers for the sole use of the Wife within seven (7) days from the date of these Orders.
Appointment of the Wife as trustee for sale
2. That MS BLACKSHAW, the Wife, be appointed trustee (“the trustee”) for the sale of:
a. Property T in the State of Queensland (more properly described as Lot (omitted) on Survey Plan (omitted) in the County of (omitted) and the Parish of (omitted) with title reference (omitted)) (“the Property T property”); and
b. Property A in the State of Queensland (more properly described as Lot (omitted) on Registered Plan (omitted) in the County of (omitted) and the Parish of (omitted) title reference (omitted) (“the Property A property”);
c. (omitted) half cabin cruiser Registration “(omitted) ”and trailer registration “(omitted)” with such item to be delivered to the Respondent’s solicitor within two (2) business days from the date of these Orders;
d. (omitted) motor cycle Registration “(omitted)” with such item to be delivered to the Respondent’s solicitor within two (2) business days from the date of these Orders.
Sale of Real Properties
3. That the trustee effect a sale of the real property for the best price reasonably obtainable in the following manner:
i.list of the real property for sale by private treaty with such agent as the trustee may agree to appoint within seven (7) days;
ii.the sale price at which the real property is listed be the price nominated as the fair market value by the agent, not less than:
1. $635,000.00 for Property T
2. $375,000.00 for Property A.
iii.the Husband cooperate in every way with the trustee and the agent (without limiting the generality of the foregoing):
1. making the key available to the trustee or agent from the date of these Orders but handover the keys permanently fourteen (14) days from the date of these Orders by providing the keys to the office of the Respondent’s solicitor;
2. signing all documents requested by the trustee in relation to the sale of the real property;
iv.in the event that the property is not transferred into the name of the trustee, the parties each execute the contract for sale, sign all documents and do all things necessary to effect a sale;
v.the trustee have the primary conduct of sale on behalf of both parties, and in respect of the sale any costs to trustee form part of the legal costs of sale and be deducted from the proceeds of sale.
4. In the event the real property is not sold by private treaty within thirty (30) days of the date of these orders, the trustee shall hold the real property for sale by public auction with the agent appointed pursuant to these orders by the trustee.
5. The reserve price of that auction be on such terms as the trustee in her absolute discretion may determine.
6. In the event the bidding at the auction does not reach the reserve price the trustee may negotiate with the highest bidder and effect a sale of the real property.
7. If the real property remains unsold the trustee shall do all acts and things and sign all documents necessary to immediately release the real property for sale by public auction again on a date nominated by any sale agent.
8. Any person shall be at liberty to bid on the property at any auction or make an offer in relation to the real property to the trustee.
9. On settlement of the sale of the real property the proceeds of sale be paid in the following manner and priority:
a. Property T property:
i.all costs and expenses of sale including legal costs and disbursements, agent's commission, valuers fees and auction expenses including repayment of any such expenses, be paid by the trustee;
ii.the amount required to discharge the mortgage of the parties first on the Property T property and secondly the Property A property;
iii.the amount required to pay all municipal and other rates outstanding with respect to the real property;
iv.the amount required to repay to the party carrying out work for the real property for the cost of such work carried out in accordance with any requirement of the trustee in accordance with these orders;
v.any and all remaining funds from the sale of the Property T property to the Wife;
vi.that there be liberty granted to the parties, or the trustee on three (3) days notice for implementation of these orders.
b. The Property A property:
i.all costs and expenses of sale including legal costs and disbursements, agent's commission, valuers fees and auction expenses including repayment of any such expenses, be paid by the trustee;
ii.the amount, if any, required to discharge the mortgage of the parties on the Property A property ;
iii.the amount required to pay all municipal and other rates outstanding with respect to the real property;
iv.the amount required to repay to the party carrying out work for the real property for the cost of such work carried out in accordance with any requirement of the trustee in accordance with these orders;
v.any and all remaining funds from the sale of the Property A property to the Wife;
vi.that there be liberty granted to the parties, or the trustee on three (3) days notice for implementation of these orders.
10.That the respondent must provide the trustee with vacant possession of the Property T property within fourteen (14) days of the date of these Orders.
11.The Husband shall be restrained and an injunction shall issue, restraining the Husband from:
a. Continuing to live in the Property T or maintaining any personal property on the Property T property after the expiry of fourteen (14) days from the date of these Orders, without the consent in writing of the trustee for sale;
b. Interfering with the sale of either the Property T property or the Property A property;
c. Doing any thing or any act to adversely affect the sale or sale price of either the Property T property or the Property A property.
12.That upon settlement of the sale of the real property, the parties sign all necessary documents to cancel any insurance in respect of the real property and that any refund be deposit to the trust account of Ross Lawyers solicitor, to be distributed in accordance with these Orders.
13.The trustee shall within fourteen (14) days of the date of these Orders take all steps necessary to advertise for sale the vessel and trailer and motor cycle for the best price reasonably obtainable:
i. After deducting the costs of sale (including advertising and agents fees if any) for the balance remaining to be paid to the trust account of Ross Lawyers solicitor for the Wife;
ii. in the event that the trustee cannot effect of a sale of the vessel and trailer within sixty (60) days that she will arrange for the vessel and trailer to be sold at a public auction within the following three (3) months;
iii. that the parties sign all necessary documents and do all necessary things to effect a sale of the vessel and trailer.
Superannuation and Other pension Schemes
14.The Wife retain all her rights title and interest in her (omitted) superannuation scheme.
15.The Husband retain all his rights title and interest in his (omitted) superannuation scheme and all his rights title and interests in his Veteran’s Entitlements Act 1986 pension.
16.In accordance with section 90MT(1)(b) of the Family Law Act 1975 (the Act), whenever a splittable payment within the meaning of section 90ME of the Act becomes payable to or on behalf of Mr Blackshaw from his interest in the Defence Force Retirement and Death Benefits Scheme (the DFRDB), the Wife, Ms Blackshaw is entitled to be paid (by the Trustee of the DFRDB) 50% of the splittable payment and there shall be a corresponding reduction in the amount Mr Blackshaw would be entitled to receive but for these Orders.
17.In accordance with section 90MT(1)(b) of the Family Law Act 1975, (the Act), whenever a splittable payment within the meaning of section 90ME of the Act becomes payable to or on behalf of Mr Blackshaw from his interest in the Productivity Benefit Scheme, the Wife Ms Blackshaw is entitled to be paid 50% of the splittable payment and there shall be a corresponding reduction in the amount the Mr Blackshaw would be entitled to receive but for these Orders.
18.The operative time for Orders 16 and 17 is four business days after the service of the final orders on the Trustee.
Parties otherwise retain property, businesses &etc
19.The Wife retain all her rights title and interest to the exclusion of the Husband:
a. in the business “(omitted)” and all debts associated with that business;
b. in any insurance policy, monies in accounts held by her;
and the Husband indemnify the Wife with respect to outstanding taxes, fees or statutory charges arising for the conduct of the business up to 12th March 2012 not otherwise dealt with in proceedings by the Commissioner of Taxation or WorkCover as at the date of these Orders.
20.The Husband retain all his rights title and interest in the business “(omitted business) & (omitted business)” and all debts associated with that business.
21.That unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:
a. each party be solely entitled to the exclusion of the other to all other property (including choses-in-action and motor vehicles) in the possession of such party as at the date of these orders (the furniture, personal possessions and like chattels in the real property) being deemed to be in the possession of the party;
b. monies standing to the credit of the parties in any bank account are to remain the property of that party;
c. insurance policies remain the sole property of the beneficiary named therein;
d. each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders;
e. any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
Other proceedings
22.The Wife discontinue Third Party proceedings against the Husband in proceedings No. (omitted) in the Magistrates Court at Brisbane within fourteen (14) days of these Orders and shall be restrained from taking any further proceedings against the Husband with respect to the debt claimed by the Commissioner of Taxation in proceedings (omitted) in the Brisbane Magistrates Court or in respect of the claim by WorkCover in proceedings No (omitted) in the Brisbane Magistrates Court.
Parties failing to execute documents
23.In default of either of the parties doing all acts and things and executing all documents as are necessary to give effect to these orders within fourteen (14) days of the date on which the obligation to do so is set under these orders, and on the Registrar being satisfied of such failure or neglect or default by the parties by way of affidavit evidence only, the Registrar of the Family Court of Australia at Townsville is appointed pursuant to section 106A of the Family Law Act to execute all documents in the name of the party in default and to do all acts and things necessary to give validity and operation to these orders and the party in default shall pay to the other party that party’s costs and disbursements on an indemnity basis.
24. That there be general liberty to apply.
It should be specifically noted, however, that one of the orders sought by the wife related to a super split involving the interest held by the husband in the Defence Force Retirement and Death Benefit Scheme. There the wife sought a 50 per cent split in relation to the husband’s entitlement, as well as seeking at order 17, a split of the husband’s interest in the Productivity Benefit Scheme.
The Commonwealth Superannuation Corporation had indicated, however, that the order sought with regard to such a split was impossible as the husband was already in receipt of a pension or benefit and a split could only be effected in circumstances where the entitlement was in the growth phase not the payment phase. The position taken by the wife was to then indicate that she would not pursue that particular aspect of the matter and order 17 was not sought.
Having thus identified the orders in relation to the matter, it is necessary to comment upon the evidence sought to be relied upon. As I indicated, the husband took the opportunity to cross-examine the wife and it was unfortunately a clear situation of the husband’s position being entirely different to that of the wife, at least insofar as declaring who might or might not be responsible for the financial difficulties that the parties now jointly find themselves in, as a result of not only the increase in liabilities but also, of course, attributable to the reduction in the value of various capital assets.
The party’s exchanges during cross-examination bordered on argument rather than question and answer and it was necessary for me on a number of occasions to direct the parties to confine themselves to questions and answers. It was clear, however, that neither could accept that they might, in some way, be responsible for the difficulties that developed in relation to the proceedings, though at least to the wife’s credit, she acknowledged that following separation she attempted to continue operation of the business (omitted) but was unable to do so comprehensively, where she and the husband had, prior to separation, been able to divide the various duties between the two of them, it was not the case when she operated the business solely.
THE EVIDENCE
Additionally, the wife, at least, seemed to acknowledge, that when the parties divided certain areas of work between the two of them, there was a significant downturn for both in profitability, as a result of the splitting of the services that were previously able to be provided in their totality by (business omitted).
Suffice it to say, I found the wife unshaken in her evidence in relation to this matter, and whilst it would certainly have been preferable for her to have moved more quickly in relation to addressing her own inadequacies, when it came to running the business in its entirety, particularly in respect of the administration and management aspects of the business, she has, in all respects, continued to act, as best she was able, in relation to such issues.
The position of the husband was difficult to ascertain. Certainly his early material was before the court but the far greater indicator of the husband’s real position and attitude in relation to this matter arose from those matters which I have already detailed at some length, in relation to the conduct of the proceedings. Quite simply the husband was uncooperative.
He sought to place blame on everyone else. It was clear from his perspective, that his legal representatives, the wife’s legal representatives, the wife, or even valuers and accountants had let him down. The fact that he had failed to communicate with his lawyers, failed to provide proper disclosure at any time, in fact, all the way up to hearing or to even make arrangements to pay the hearing fee, his position being that it was the fault of the lawyers not him, clearly showed his attitude in relation to this matter.
The husband wanted fairness, as he repeated on a number of occasions in submissions that were made in relation to these proceedings, but unfortunately the impression that I gained overall in relation to the matter, was that the husband’s idea of fairness was to allow him to act irresponsibly in relation to the obligations that he had and, particularly, I note that, in circumstances where it was the husband who was the person who instituted the proceedings themselves.
It was clear that the husband’s position was one of wanting to walk away from liabilities. His stance was to say that there were only limited liabilities at the time of separation and he would not accept others, for example, taxation liabilities, notwithstanding the fact that the evidence appeared, clearly, to be to the effect that the liabilities had accrued during the period of the relationship.
It was simply that tax returns had not been completed until after separation, but related to the period prior to separation. The husband could not appreciate that or perhaps, I think, more accurately would not accept that he had liabilities and obligations in that regard.
It is even more telling, when one recognises that the husband’s own evidence, and it is confirmed by the wife, was to the effect that it was the husband who was primarily responsible during the relationship, for the administration and management aspects of the business, including, of course, the steps necessary to ensure that liabilities and obligations with regard to taxation, payment of employee benefits, and the like, were effected.
Those do not seem to have occurred and whilst I certainly appreciate that subsequent to separation the wife also fell short in relation to such arrangements and obligations, it is clear that the partnership was operated exactly in that manner and it was a situation where the parties had joint liabilities. It would be the same situation if there were evidence in respect of the aspects and parts of the business which were retained by the husband but, of course, there is no evidence in relation to that valuation and, again, it reflects upon the husband’s determination to not participate properly in the proceedings which he, himself, commenced.
At one stage, the husband submitted that he didn’t need to effect a valuation in relation to the property, because an unnamed solicitor had indicated to him that it was a business established post-separation and didn’t, therefore, fall within the required consideration of the court. That, of course, failed to recognise two significant factors, the first of which was that the business was, to all intents and purposes, a “spin-off” of one aspect of the business operated by (business omitted) prior to separation and at least, in part, included plant and equipment which had been the property of (business omitted), prior to it being retained by the husband. Accordingly, it was clearly an asset which at least, in part, needed to be valued for the purposes of assessing what might or might not be the value attributable to any of those parts which flowed from the matrimonial assets.
Secondly, and more significantly, is the fact that there was an order of the court for the husband to attend to the valuation and there were even in place specific directions with regard to how payment of such valuations were to occur. The husband and, with respect, I would think, his legal representatives were well aware of what was required in relation to the matter and the husband has not complied with those directions.
As I indicated during the hearing, if it were the case as the husband seemed to suggest, that his legal representatives had failed entirely to meet their professional obligations in relation to these proceedings and in respect of the representation of him, then he had avenues available to him but, of course, there is a further consideration or aspect of the matter which needs to be looked at and that relates to the fact that the legal representatives themselves indicated that they were without instructions and had been seeking such instruction and cooperation from the husband for a significant time, without that instruction becoming available.
It is clear that the husband’s position, no matter which way it is considered in relation to this matter, is one which has been as a direct result of choices and actions or omissions on his part and as I indicated at the commencement of these reasons and during those previously given with respect to the husband’s application for an adjournment, or alternatively opportunity to rely upon his affidavit of 24 March 2014, the injustice to the wife was such that it would be improper to allow that to occur.
I am, unfortunately, therefore forced to the determination that the husband’s attitude in relation to these proceedings has been to act disruptively, to continue at all times to fail in his obligations to press his case to provide the information required pursuant to the rules, as well as information and cooperation required pursuant to orders of the court and in that regard I am satisfied that the wife’s evidence is in all respects more reliable than that which might be able to be assessed, in relation to the husband.
Quite simply, the husband’s actions in relation to the proceedings give rise to very real concerns as to his genuineness in relation to any statements made with regard to the operation of the business, the instructions he might have given to his lawyers or the advice that they gave him with regard to his conduct during proceedings as well as, of course, the independent indicators of his failure to provide information when directed to do so, or to even make payments on the property which he continued to occupy and currently continues to occupy, despite having been ordered by consent, to make such payments.
I found the position of the husband generally to be an unrealistic one and one in which it appears clear that there are gross shortcomings in the evidence sought to be relied upon especially when one considers the overall behaviours of the husband.
As I indicated, there was evidence from Mr B, given with regard to the value of (business omitted). (business omitted) unfortunately has diminished in value significantly from that which was previously contended or even agreed by the parties. The husband, in cross-examination, suggested to the wife that she had previously placed a figure on what she would accept for the business and she acknowledged readily that it would be a figure of $300,000, however, she indicated that when the business had been split and the difficulties had arisen, as well as further liabilities being ascertained, the business was no longer profitable.
Mr B assessment in that regard was that the business had a valuation of $25,000, when one considered the benefit of the contracts, but no value whatsoever, in relation to goodwill. There, perhaps, needed to be some consideration given to the value of plant and equipment, though Mr B indicated that he was not in a position, professionally, to provide such a valuation.
There was no other figure available in that regard, but the legal representatives of the husband suggested that the wife would accept an amount of $40,000 for the business. When challenged in that regard by the husband the wife indicated that she would accept that amount in relation to a sale, notwithstanding that the business had, in the past, been extremely profitable and provided both with a comfortable lifestyle and the opportunity to purchase the various investment properties which unfortunately have now had to be sold.
Quite simply the splitting of the business and the failure, perhaps, by both parties to fully appreciate the management and financial obligations that they had in relation to the two businesses, has led to the demise of the party’s financially and to a very real concern that there will be nothing that remains for the parties, other than liabilities at the end of these proceedings.
THE LAW
I turn, before any further assessment is required, to the law in relation to a determination. In Hickey v Hickey and the Attorney General for the Commonwealth (2003) FLC 93-143 the full court of the Family Court approved or restated the four step process which is required, pursuant to the provisions of Section 79 of the Family Law Act, to consider what is an appropriate distribution of property to be effected between the parties.
The four steps are:
i)Step 1. Make findings as to the identity and value of the property, liabilities and financial resources of the parties as at the date of hearing.
ii)Step 2. Identify and assess the contributions of the parties within the meaning of Section 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage.
iii)Step 3. Identify and assess relevant factors in Section 79(4)(d), (e), (f) and (g) and Section 75(2) and determine any adjustments that should be made to the contribution based entitlements at step 2.
iv)Step 4. Consider the effect of the findings in step 3 and determine and resolve what order is just and equitable in all the circumstances.
Interestingly, that has, of course, been the course that has been followed for many years, in relation to determinations of property settlement. In 1999, in Russell v Russell (1999) FLC 92-877 it was clearly recognised that the provisions of the Act required there to be a specific consideration of the settlement and whether it reflected a just and equitable resolution of the property between the parties, rather than simply a percentage split. The court was required, at some stage during the process, to specifically consider not only what the assets of the parties were and what might have been the contributions made by each of the parties to those assets, but also to consider whether in the whole of the circumstances it was just and equitable to effect a settlement upon a particular basis.
Instances were identified, for example, in relation to cases that involved a small pool requiring adjustments to reflect the financial circumstances of one party or the other including, of course, and in particular circumstances with regard to the responsibility for care and provision for children under the age of 18 years. Similarly, requirements needed to be looked at in relation to future needs and, in particular, whether a significant adjustment was necessary, particularly when considering the provisions of Section 75(2) to reflect the future needs as well as disparity in the future income earning capacities of each of the parties.
The situation was further clarified in Stanford v Stanford (2012) 47 FLR 481, where the High Court specifically recognised that there was an inherent step necessary in relation to determination of property settlement which included, pursuant to the provisions of Section 79(2), the court satisfying itself that it was just and equitable to make an order altering the interests of the parties in their property. Section 79(2) is in these terms:
The court shall not make an order under this section unless it is satisfied that in all the circumstances it is just and equitable to make the order.
In Stanford the High Court explained what was the process to be looked at in relation to assessing whether it was just and equitable to make the order. There the court said at para. 42:
In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that as a result of the choice made by one or both of the parties the husband and the wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not, and will not thereafter be, the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpin the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship and the assumption that any adjustment of those interests could be affected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying Section 79(4).
It is, perhaps, unnecessary for me, in this matter, to say other than that. I am satisfied beyond any doubt that it is just and equitable that an order should be made which brings to an end the financial circumstances of the parties. One could not imagine a clearer example of the need for each party to be able to move forward from the position they currently find themselves in and to be able to know their financial positions, so as to move forward in relation to their own lifestyle determinations.
In any event that seems even clearer when one considers the provisions of Section 81 of the Family Law Act headed Duty of Court to End Financial Relations. There the Act says:
81.In proceedings under this part other than proceedings under Section 79 or proceedings with respect to maintenance payable during the subsistence of a marriage the court shall, as far as practicable, make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them.
Clearly, both justice and equity and the need to conclude the financial circumstances of the parties call out, in almost all matters, but particularly in this, to a property settlement being determined.
DISCUSSION
Accordingly, it is necessary still, to follow the process that was so fulsomely detailed in Hickey v Hickey and the Attorney General for the Commonwealth (supra) and then to formulate an order which gives effect to the determination to be made.
Firstly therefore, the Court needs to assess the party’s property, their liabilities and financial resources, in order to ascertain what is the pool to be distributed. However, in this case complexity and difficulty arises. That arises from the fact that there are various pools of property, including the actual material assets of the parties, which are subject to various liabilities as well as the possible liabilities arising as a result of litigation currently on foot. Additionally, there are the business expenses that I have previously made reference to, as well as consideration of issues with regard to superannuation and other entitlements including, in the husband’s case, a Defence Force Retirement and Death Benefit policy, which is in the payout phase.
Further, though not necessarily of great import in relation to the assessment of property, is the fact that the husband also receives a total and permanent incapacity pension under the Veteran’s Entitlements Act 1986, which is not a superannuation entitlement and which cannot be attached. It is, however, clearly an income stream and therefore, at the very least, is a financial resource that needs to be considered, in relation to the proceedings.
It is not uncommon for the courts, in circumstances such as those which particularly exist in this case, to consider what is sometimes referred to as a two-pools approach.
Firstly, there is a need, then, to consider the material assets of the parties, those that might immediately be available for distribution, as well as the future entitlements of the parties, including superannuation, as well as, in this case, other entitlements which flow as a result of the husband’s interest in the DFRDB scheme and the entitlement to a pension under the Veteran’s Entitlements Act.
I intend, in this matter, to use a two-pool approach in relation to the proceedings, it being the case that in certain instances it is necessary that a somewhat different approach be taken and insofar as the husband’s DFRDB scheme is concerned, I am of the view that it needs to be addressed differently to what might be the case with regard to other assets. In that respect I note that the Full Court in C v C (2005) FCA 429 agreed to the use of the two-pool system, when considering superannuation.
Finally, and perhaps of particular significance in relation to this matter, it is necessary to specifically make reference to the findings that I have made already in relation to the husband’s failure to disclose or to even properly cooperate in the proceedings that he, himself, instituted. In Weir v Weir (1993) FLC 92-338 the Full Court at page 79,593 said:
This court has pointed out in a line of cases leading up the recent decision of the Full Court in Black v Kellner (1992) FLC 92-287 that it is the duty of a party involved in property proceedings in this jurisdiction to make a full disclosure of their financial affairs. See also Giunti v Giunti (1986) FLC 91-759, and Mezzacappa v Mezzacappa (1987) FamCA ; (1987) 11 Fam LR 957; (1987) FLC 91-853. It is clear enough from his Honour’s findings in the present case that the husband had not done so and had in fact pocketed the proceeds of a substantial number of cash sales. It is obvious that in most cases of this nature it is difficult enough for the party to establish that fact let alone establish the quantum of what has been taken.
It seems to us that once it has been established that there has been a deliberate non-disclosure which follows from his Honour’s findings in this case then the court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.
The findings that I have made in relation to the husband already are that he has fundamentally failed to meet his obligations in relation to disclosure. It is clear that he has failed to answer many of the questions that arose in relation to the inquiries that were made with regard to the valuation or assessment of the value of the party’s interests in assets.
As counsel for the wife indicated, the husband failed over an extended period to disclose his financial position. In particular, he refused to provide information with regard to how moneys were utilised in relation to the establishment of a business, (business omitted), which was operated by a former employee. The husband’s best answer was that he set the business up in naming it, but thereafter had no involvement. However, there appears, clearly, to have been a connection greater than that, which the husband has not disclosed.
The husband discloses in his financial statement, no income from any business, though he clearly indicates in other evidence, and through the line of questioning directed by him to the wife, that the businesses operated by him subsequent to separation, have income and value.
But the husband refused repeatedly to have the business of (omitted business) valued. He failed to disclose information in relation to other borrowings taken by him, including, in particular toward the purchase of a (omitted) motorcycle and whilst it may be that that is a post-separation acquired asset and one which has no direct connection with the assets of the parties, it is clear also that the husband’s failure to provide information has exacerbated the concerns both held by the wife and the court.
The fact is, the husband has almost completely ignored the obligations and the responsibilities that he had with regard to provision of information and in the circumstances has forfeited the right to then suggest that a certain course should be taken with regard to assets, when the husband has failed to provide the information that he needs to provide, in relation to such matters.
Insofar as the assets of the parties are concerned there are, of course, difficulties that arise in relation to the assessment. Counsel for the wife in written submissions provided the best information available as to what the assets were and broke them down into various sub-categories including assets, superannuation, financial resources, businesses and liabilities. In the circumstances I intend to adopt that information, as it is the best information available, in relation to the proceedings.
In particular, I should note that with respect to the two real properties that remain, Property T and Property A, valuations were obtained in relation to those properties, as well as two other properties, Property V, Property A, and Property S from (omitted) (North Queensland).
Those valuations included figures for Property T and Property A at $635,000 and $375,000 respectively. Interestingly, the valuations that were obtained in relation to the other two properties, Property S, Property V and Property A, were $285,000 and $280,000 respectively and were almost to the dollar, exactly reflective of the amounts that were received upon sale.
Accordingly, and for obvious purposes of convenience, I accept the figures given in relation to the values of the remaining properties at Property T and Property A. The assets of the parties, therefore, are:
Assets H/W/J $ Property T J $635,000.00 Property A J $375,000.00 Surplus funds from sale of Property S & Property V J $20,314.23 Audi H $25,000.00 (omitted) motor bike H $25,000.00 (omitted) Half Cabin and trailer H $25,000.00 Honda Motorbike H $3,500.00 Ride on mower and fridges H $6,000.00 Furniture H $20,000.00 Furniture W $5,000.00 Honda Motorbike W $2,500.00 Tools and camping equipment H $10,000.00 Subtotal $1,152,314.23
Superannuation H/W/J $ DFR&DB* H $993,517.00 (omitted) superannuation H $27,217.00 (omitted) superannuation W $30,078.00
Financial Resources H/W/J $ Vets Affairs TPI Pension H $1,100 pfn DFR&DB pension H $1,300 pfn Inheritance (was $182,000) W E$40,000.00
Businesses H/W/J $ (business omitted) W $200,000.00 (business omitted) and (business omitted) H Unvalued Liabilities H/W/J $ Property T (mortgage)* J $581,307.13 Property A (mortgage) J $187,995.33 Audi Motor vehicle H $25,000.00 Bank card H $8,000.00 Tree debt J $19,347.00 ATO Debt J $156,000.00 WorkCover Debt W $20,131.45 Body Corporate Fees (default judgment) J $10,165.00 Property T H $3,193.77 Subtotal $1,011,139.68 *Note Property A secures $130,000 of Property T mortgage
The second step required to be followed in relation to the matter, following the determination of the value of the interests of the parties and the previous determination that it is just and equitable in all the circumstances to proceed, is to evaluate and fix the contributions of the parties within the meaning of Section 79(4)(a), (b) and (c) of the Family Law Act.
In particular, consideration here needs to be given to the fact that the parties were in a long relationship. They were together for a period of approximately 19 years. There is one child of the relationship currently living with the mother but a child who had, at least until recent times, a close and meaningful relationship with the father. It is also noteworthy that the wife had a child of an earlier relationship, X, and that child considered, and still considers, the husband to be her father, in all respects apart from biological.
It is clear the parties worked together to provide a lifestyle and a future for themselves and the children and that it was with those considerations in mind that they established the business, (business omitted), and operated the business. More particularly, and it is significant in relation to this particular matter, the parties provided both financially and non-financially in a manner reflective of their particular abilities.
That is especially so when it is recognised that the husband, particularly because of injuries sustained through his employment with the Defence Forces, was not able, at least initially, to provide much of the physical exertion required in relation to the business but was able to provide the administrative and management skills that were necessary, with regard to the development of the business.
As recognised by both the husband and the wife, therefore, they contributed in their own way to the operation of the business, either through the wife’s physical activities or through the husband’s management and administrative involvement, in the operation of the business.
It is noteworthy, also, that both the husband and the wife indicated that they did not take a wage from the operation of the business. That might, on the face of it, be an accurate statement but I have no doubt that they each, at appropriate times, withdrew funds from the business for the purposes of the family or the family unit.
Suffice it to say, I am satisfied absolutely that the parties contributed financially and non-financially to the relationship in equal and appropriate ways and that the starting point in relation to the contributions of the parties is a 50/50 contribution reflecting joint liabilities and obligations, in relation to the assets of the parties. That is particularly the case in relation to the taxation liabilities which have now been identified and which, unfortunately, have led to the institution of proceedings in the state courts.
The fact that they may have only come to the notice of the parties and, of course, more particularly to the notice of the Taxation Commissioner following the lodgement of taxation returns in no way removes the obligations that both parties jointly have, in relation to those liabilities. I am satisfied that, at least until the time of separation, the parties had equal entitlements and obligations in respect of the property of the parties.
Subsequent to separation, however, there has been a real distinction in the contribution of the parties. Whilst it appears clear that the business has been separated off, such that the husband was able to receive certain aspects or elements of the business and the wife was able to receive certain aspects or elements of the business, the wife has taken on a far more responsible role in relation to the party’s joint liabilities and obligations.
The wife annexed to her counsel’s submissions, a statement of various payments that were made by she and the husband, to expenses and liabilities that accrued, both in relation to the business as well as in relation to the real property that was purchased by the parties, during their relationship. The wife was not really challenged in relation to the payments that were made, but rather was challenged by the husband as to the liability that he might have, in relation to any of those payments or, more particularly, the genuineness of the payments, it being suggested, repeatedly by the husband, that there were omissions that arose, as a result of poor accounting practices or the like, which gave rise to greater liabilities than would properly be the case.
Of course, the husband could easily make such suggestions, but made no contribution, financially or administratively, in relation to dealing with such issues and I am, as I indicated previously, therefore far more inclined to accept the position as outlined by the wife, in relation to such matters.
To that end, therefore, I note that the indication given is that wife has made contributions to joint liabilities of the parties in excess of $160,000, primarily paid from an inheritance received by her post-separation and from income able to be accrued from the operation of (business omitted), whilst the husband has paid only a little in excess of $3000 and that related to properties which he directly took responsibility for, but which he only partially paid prior to the sales of certain assets.
The wife’s contribution post-separation is significant and weighs heavily in relation to any determination to be effected in respect of this matter. It is necessary, of course, to consider those matters specifically detailed in Section 79(d), (e) and (f), and as noted by counsel for the wife, the orders that are proposed by her with regard to her being made trustee for the sale of the two real properties which remain, Property T and Property A, in no way affects the future earning capacity of either of the parties, though perhaps peripherally may have some effect, in that the husband indicates that certain of his business’ equipment is stored at the property retained by him at the present time, at Property T.
I am not satisfied, however, that it is a matter which would in any way affect the determination of these proceedings.
Insofar as a consideration of those matters required to be looked at, pursuant to the provisions of Section 75(2) of the Family Law Act, it is noteworthy that the husband has recognised health concerns. He is in receipt of a total and permanent incapacity pension assessed in relation to his circumstances, which provides a payment to him but it is also noteworthy that he does operate many aspects of his (omitted) business though his evidence was that it varied, dependent upon his state of health.
Additionally, the husband has a financial resource, a guaranteed pension paid from his DFRDB entitlements which has a significant value. The husband obviously receives considerable benefit from that, however, it is noteworthy that whilst the husband and the wife were only cohabiting for a period equivalent to about half the period that the husband was in the military, there is certainly a contribution made by the wife. For example, in the circumstance of the husband being absent, because of the terms of his employment with the military, the wife continued to maintain and operate the household in his absence as well as provide for the care and supervision of the children.
The wife is in good health though she did appear to indicate in her material that she was suffering certain effects, emotionally, as a result of the breakdown in the relationship and as a result of the stress caused from the failing nature of the business, (business omitted). Certainly, the indicators, however, are that she is able to continue in employment and that her health is not a factor which would in any way affect such employment. It is noteworthy, however, that the wife has the child under the age of 18 living with her and that she takes primary, if not exclusive, responsibility in relation to providing for that child financially and that Y, unfortunately, has little, if any, interaction with his father.
A number of other matters that arise pursuant to the provisions of Section 75(2) for consideration in matters such as this have, at least on the face of it, some passing significance. The husband does have an entitlement to the TPI pension valued at about $1140 tax free per fortnight. It is no doubt indexed and may have increasing value in the future. There is also his entitlement at the present time to a DFRDB pension valued at about $1300 per fortnight after tax and those factors need to be considered in relation to this matter. The care of the child, as detailed in relation to Y is a factor to be looked at in respect of the proceedings and looming large here, of course, are the provisions of Section 75(2)(ha) relating to the effect of proposed orders on the ability of a creditor of a party to recover a creditor’s debt, so far as that effect is relevant.
There are significant mortgage liabilities and there are also, as I have indicated, the very significant amounts claimed by the Deputy Commissioner of Taxation as well as WorkCover. They are liabilities and obligations that cannot be ignored and they necessarily must be attended to as a result of the sale of assets. It is a factor which is significant.
All in all, however, whilst the husband has health issues, the wife has taken on responsibility for the liabilities of the parties including, particularly, liabilities which, at least up to separation, existed though were not necessarily quantified. It is in my assessment impossible to place small percentage adjustments one way or the other in relation to the various factors which need to be considered, pursuant to the provisions of Section 75(2) and in this matter I am certainly of the view that the overall effect of Section 75(2) is to not in any real way effect an adjustment in relation to the entitlements of the parties arising from a consideration of the contributions of the parties, pursuant to the provisions of Section 79(4).
As such it is appropriate that there should be an equal distribution of the assets between the parties. The difficulty, however, is that in many respects, the assets are not able to be quantified and that is most obvious in the circumstances that relate to the operation of the husband’s business, (omitted business).
It makes any final calculation almost impossible and explains, no doubt, why the wife’s position in relation to the husband’s business is that the husband should retain that business and she should retain the business, in her possession. More particularly, it is essential otherwise that the significant assets, the matrimonial properties, be sold so that liabilities can be paid out and there can be a clear picture available in relation to the position of the parties.
Recognising, however, that there are additional liabilities including those which are yet to be resolved with the Deputy Commissioner of Taxation and WorkCover, as well as the significant payments that have been made by the wife since separation, it is clear that with any sales that are to be made, even if the best can be made of the circumstances that exist, the wife will be in a poorer financial position than will be the husband. He will retain his business, various assets, subject to liabilities and he will be without future responsibilities in relation to, for example, taxation, WorkCover, or other obligations. It is a considerable benefit to the husband.
Insofar as the husband’s entitlement to a DFRDB pension is concerned, it is clear that the wife has contributed to that pension in that she and the husband were together for a significant period of time. She has also taken on primarily the responsibilities that were the joint obligation of the parties following separation and has made considerable payments, including the reduction in the inheritance that was received by her post-separation.
In the circumstances the argument put forward with regard to the wife having a more significant entitlement in relation to the DFRDB pension than what might otherwise be considered appropriate, for example, one half of one half of the value of the pension, in other words 25 per cent, is a proper consideration, particularly when consideration is given to the just and equitable factor.
In my view the wife’s future obligations, the responsibilities that she has taken on and will continue to bear as a result of the orders sought in respect of this matter are properly reflected in an order which provides for the wife to, at least, have some guaranteed future entitlement in relation to the husband’s DFRDB pension. In all the circumstances the orders proposed by the wife reflect the contributions of the parties, the future obligations of the parties and are most importantly a just and equitable resolution of the property circumstances of the parties leading to a final determination of the financial relationship between the parties to the marriage and in all the circumstances I am satisfied that they reflect a just and equitable determination of the property aspects of the relationship between the husband and the wife.
For the reasons given therefore I intend to make orders in terms of those which are detailed at the commencement of these reasons.
I certify that the preceding one hundred (100) paragraphs are a true copy of the reasons for judgment of Judge Coker
Associate:
Date: 25 July 2014
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Family Law
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Property Law
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Civil Procedure
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Injunction
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Jurisdiction
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Procedural Fairness
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