Bleak and Bleak

FAMILY COURT OF AUSTRALIA

BLEAK & BLEAK

[2011] FamCA 424

FAMILY LAW – PROPERTY

APPLICANT:

Ms Bleak

RESPONDENT:

Mr Bleak

FILE NUMBER:

BRC

7579

2008

DATE DELIVERED:

3 June 2011

PLACE DELIVERED:

Brisbane

PLACE HEARD:

Brisbane

JUDGMENT OF:

Bell J

HEARING DATE:

8 & 9 November 2010 &

1 April 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Kirk of Senior Counsel

SOLICITOR FOR THE APPLICANT:

Hopgood Ganim Lawyers of Brisbane

COUNSEL FOR THE RESPONDENT:

Mr T. North of Senior Counsel

SOLICITOR FOR THE RESPONDENT:

Murdoch Lawyers of Brisbane

Orders

That within 28 days from the date of these orders, the Husband and Wife do all such acts and things necessary to facilitate the transfer by the B Pty Ltd as trustee for B Pty Ltd Property Holding trust to the wife or her nominee, free from encumbrance the property located at C Street, D Town, in the state of Queensland, more particularly described as Lot … on … Parish E, County F being all land contained in title reference. (”D Town property”).
That immediately upon the transfer of the “D Town property” to the Wife or her nominee, the Wife or her nominee be solely responsible for and meet payment of all rates, land tax and other statutory charges and outgoings on the property and the property will be at the risk of the Wife or her nominee from the date of the transfer.
That within 28 days from the date of these orders the Husband do all such things and sign all such documents as is necessary to transfer to the wife, free from all encumbrances his interesting the F250 motor vehicle in the possession of the Wife and the vehicle will be at the risk of the Wife from the date of the transfer.
That within 28 days from the date of these orders the Husband transfer to the Wife all his interest in the art and memorabilia collection.
That the husband pay to the Wife the sum of $1,845,256 within five months from the date of these orders.
That within seven (7) days of the payment particularised in Order 5 hereof the Wife sign all documents and do all acts necessary to transfer to the husband any interest held by her directly or through any entity (corporate or trust) in which she has an interest in relation to the following entities collectively referred to herein as “the Bleak Group’, namely:
a.   G Investments Pty Limited;
b.   G Central Pty Limited as trustee for the G Central Trust;
c.   H Management Australia Pty Limited as trustee for the H Central Unit Trust;
d.   G Sydney Central Pty Limited as trustee for the G Sydney Central Unit Trust;
e.   H Renovations & Technologies Pty Limited;
f.   I Pty Limited as trustee for the I Unity Trust;
g.   Bleak Investments Pty Ltd as trustee for the Bleak Family Trust;
h.   J Investments Pty Limited as trustee for the J Unit Trust;
i.    K Partnership;
j.    L Pty Limited as trustee for the L Unit Trust;
k.   B Pty Ltd & Group Pty Limited as trustee for the B Pty Ltd Property Holdings Trust;
l.    M Pty Limited as trustee for N Trust;
m.    O Pty Limited as trustee for O Unit Trust;
n.   Mr Bleak & Associates Pty Limited’;
o.   G Insurance Brokers Pty Limited;
p.   P Pty Limited as trustee for the G Unit Trust.
That the legal costs and any duty or tax liability as may be necessary to effect such transfers be paid by the Husband.
That immediately upon the issue of these orders from the Family Court of Australia, the wife shall immediately retain and/or receive as her absolute property, the title and possession of and the husband shall immediately relinquish and/or transfer to the wife all right, title and claim, if any, to and in the following:
a.   The furniture, contents and household effects in the wife’s possession;
b.   The wife’s personal possessions and effects in the wife’s possession;
c.   The wife’s jewellery; and
d.   The wife’s superannuation interests;
e.   The credit balance in the wife’s bank accounts.
That immediately upon the issue of these orders from the Family Court of Australia the husband shall immediately retain and/or receive as his absolute property, the title and possession of and the wife shall immediately relinquish and/or transfer to the husband all right, title and claim, if any, to and in the following:
a.   The furniture, contents and household effects in the husband’s possession;
b.   The husband’s personal possessions and effects in the husband’s possession;
c.   The husband’s superannuation interests; and
d.   The credit balances of the husband’s bank accounts.

10. That the husband indemnify the wife and keep her indemnified;

a. Against any and all claims that may be made against her as a result of her previously holding any interest in or having received any income or benefit from entities in “The Bleak Group”;
b. In respect of any income tax, capital gains or other tax liability, including any interest or penalties that arise as a result of the transfers referred to in Orders 1, 3, 4 and/or 6.

11. That as and by way of spouse maintenance the husband pay to the wife the sum of $750 per week for a period of six months from the date of this order.

12. That the working out of the application be adjourned before me for mention at 10.00am on 30 November 2011.

13. That save and except as otherwise specifically provided for herein, that each party do and procure the doing of all things and sign and procure the signing of all documents necessary to give full force and effect to the provisions of these orders and in the event that either party refuses or neglects to comply with a provision of this order with seven (7) days of a written request to do so, then a Registrar of this Court is appointed to execute all documents in the name of that party necessary to give validity and operation to this Order.

IT IS NOTED that publication of this judgment under the pseudonym Bleak & Bleak is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 7579 of 2008

Ms Bleak

Applicant

And

Mr Bleak

Respondent

REASONS FOR JUDGMENT

This is an application for property settlement and spousal maintenance initiated by the wife on 18 February 2009 and an application for re-opening was filed on 2 March 2011.
I will deal with this application in the following manner. First, to determine whether or not the matter should be re-opened to allow evidence of, in particular, two matters to be put before the Court in order to assist the Court in coming to a proper, just and equitable conclusion. Secondly, a short history of the marital relationship including the efforts that both parties have made to amass the fortune which is to be distributed justly and equitably between them. Thirdly, to determine the assets of the parties which they have acquired over the existence of their relationship and, if any, subsequent to their relationship. Fourthly, the contributions which they have made to such assets, and finally spousal maintenance.

Application to re-open the evidence

On the 2 March 2011 an application was made by Mr Bleak, hereinafter referred to as the applicant for orders that the applicant be granted leave to re-open the evidence in relation to the wife’s application for final property orders, and further sought (b) that the applicant husband be granted leave to adduce further evidence in respect of the wife’s application including an affidavit of Mr Bleak of 24 February 2011, an affidavit of Mr Q of 24 February 2011 and an affidavit of Mr R of 24 February 2011.
If I may just précis the evidence which is contained in those affidavits.
It is alleged that during a period prior to the hearing of the application, the wife who had authority withdrew from an account at the National Australia Bank held in the name of Mr Bleak and Associates Pty Ltd account number in the amounts as particularised in para 11 of the affidavit of Mr Q. It appears that those amounts totalled $50,200. One amount of $5,000 dated 9 July (11(a)) was recognised by the applicant as being withdrawn to meet the mortgage obligations of the parties on the property that the respondent wife resided in. He alleged to have no other knowledge of the withdrawals. These withdrawals took place between 22 March and 19 November 2010.
Mr R has considered these withdrawals and in his affidavit of 24 February 2011 he exhibits a short report dated 24 February 2011 in which he is of the view that the withdrawals from March 2010 to June 2010 would not affect the value of the company and would not affect the overall property pool. However, in regard to the withdrawals subsequent to 30 June 2010, amounting to $39,700, he was of the view that they would not affect the value of the company but the overall property pool would be reduced by the amount, i.e. $39,700.
In relation to the other evidence, there is evidence before the Court at the trial that Suburb T property, i.e. the property at S Street, Suburb T, was valued at $600,000. However, it appears from the material now that the parties, and I emphasise the fact “the parties” since the property was not owned by any of the business entities but by the parties jointly, agreed for the property to be sold and it was sold at a figure of $565,000. Mr Q refers to this in para 3 and indicates that in fact the taxable gain would now be $6,907 and the capital gains tax would be $3,2011.
The general principles in re-opening cases, are, in my opinion, adequately referred to in the matters of EB v. CTNo 2 [2008] QSC 306, a decision of Applegarth J, Summitt & Summitt & Ors [2009] FamCa 365, a decision of Murphy J. Further, I am of the view that different considerations may apply depending on whether the case is simply one on which the hearing is complete or one on which the reasons for judgment has been delivered. In this case the hearing was complete but reasons for judgment were not delivered. And at para 17[4] of the judgment in Summitt & Summit & Ors the following is said:
In Reed v Brett the criteria governing the exercise of discretionary power to re-open a case with further evidence where the hearing has concluded but judgment has not been delivered, was said to have been as follows:
(a)      the further evidence is so material that the interests of justice require its admission;
(b)      The further evidence, if accepted, would most probably affect the result of the case;
(c)      The further evidence could not by reasonable diligence have been discovered earlier; and
(d)      And no prejudice would ensue to the other party by reason of the late admission of the further evidence.
This is a discretion which is sought to be exercised in favour of the applicant in this case. Even if the evidence, as particularised before me, was admitted, I do not consider that the quantum involved would in any great way affect the result of the case. The amount involved insofar as the withdrawal of monies first of all, and I refer here to sub-paragraph (c) should have been obtained by reasonable diligence, it being an account in which the applicant was particularly involved, it was a business account of a company in which he had a great interest. Secondly, I am surprised that he did not keep his fingers upon the company to the extent that he should have known prior to the date of the trial.

History

The wife was born in 1963. The husband was born in 1966. A child was born to the mother in 1982 from a previous relationship, he being U. In 1985 the parties commenced cohabitation. They were married in 1986. V was born in 1987. W was born in 1989. The parties separated in August 2007. Decree nisi was pronounced on 30 November 2008 and the wife, as I have indicated, filed her initiating application in February 2009.
There does not appear to be any great dispute between the parties as to the contributions during the cohabitation between the parties. They were very young, the husband being 19 and the wife was 21. She was employed in a clerical role. They had little or no assets whatsoever. They worked particularly hard during the period of cohabitation which was 22 years in length, the wife being primarily responsible for the welfare of the home and the family. She was employed for periods during the early years of marriage and assisted the husband in business. He was the principle breadwinner in that he worked full-time during the entirety of the marriage and contributed his income to the benefit of the family. He bought into and managed successful business interests from which he and the wife enjoyed significant financial benefits as was said by Kirk in para 3.2(ii). The cohabitation was more of the so-called “traditional” marriage.
I compliment the parties on working particularly hard. They worked together as a partnership and it would be extremely difficult, notwithstanding the submissions of North to the contrary, for me to determine that as at the date of separation the parties’ contributions to the assets were other than 50:50. I note, however, that North is of the view in his submissions, refer para 43, filed on 29 November 2010 et seq, that the husband contributed to the support of the wife’s son from an earlier relationship, U, to whom I have referred and further made substantial payments in support of the wife and the property under her control after separation which appears to me to be submissions more in line with s 75.2. Albeit I have not looked at the matter in depth in relation to the contributions to the parties or either of them to the acquisition and maintenance of the assets of the parties to date of separation but it could not be, with great respect, as North of Senior Counsel suggested, that there should be weighting in favour of the husband and I am of the view that the contributions are equal.
Insofar as s 7(2) factors are concerned, I note that the submissions of North S.C. wherein he submits that the husband has recognised throughout the proceedings that the wife has limited earning capacity, she has few qualifications and her health has not been that good (see affidavit of the wife filed 8 October 2010 para 78 et seq) and is not good (see para 48). And at para 51 he says that the husband’s submission is that while recognising that the wife has limited caring capacity and has suffered a degree of depression, she really has not tried at all to obtain employment or even seek such employment on a part-time basis. He goes on to say that should the wife recognise her circumstances at the end of the proceedings and had the opportunity to have closure with respect to the separation with the husband, she will find herself more willing and able to seek such employment.
I do not accept that. I believe that in all the circumstances that the wife is in a much less strong financial situation than the husband and the s 75(2) factors are weighted in her favour. He conceding that he, and there is evidence to support this, would be able to seek on the general employment market an amount of at least $120,000 per year. The wife would in no way be able to look for and expect to receive an income of anywhere near that even taking into consideration all the matters which the husband has referred to. Kirk contends for a 20 per cent loading (i.e. 70:30 overall). North contends for 60:40 overall. However, her financial circumstances will, I believe, be enhanced by the property settlement which she will secure and taking that into consideration as well as her health and the husband’s stronger income situation, I find that 15 per cent would be a just weighting in her favour under s 75(2).

Assets of the parties

Generally, the property of the parties is not in dispute save for, as I see it, the value of the parties or either of them in Mr Bleak & Associates Pty Ltd, the value of Bleak Investments Pty Ltd as Trustee for the Bleak Family Trust and the value of B Pty Ltd Property Holding Trust (the businesses). There is, of course, some query as to add backs and liabilities which the parties have incurred which will be dealt with separately.
To me, from the statement of assets and liabilities as set out in the wife’s submissions dated 29 November 2010, Appendix A, and the husband’s set out as a heading Statement of Assets and Liabilities in the husband’s submission dated 29 November 2010, that there are some difference but primarily the differences are in relation to those interests to which I have hereinbefore referred.
As has been highlighted in the joint statement of experts (see exhibit 25), the joint statement attempts to identify the areas of agreement and the areas of difference and elaborate on the expert’s respective positions to assist the court with its determination in respect to the property pool.
Insofar as paragraph 5 of the aforesaid exhibit indicates, it appears to me that the most significant factors causing difference between the respective assessments are;
(a)the “rule of thumb” method based on market transactions adopted by Mr X as his primary method of valuation in the second Mr X report as against the capitalisation method of Mr R; and
(b)discounts for lack of control and marketability adopted by Mr R in his report.
It is quite clear from that brief summation that there is unfortunately between two experts of many years experience and acknowledged expertise a disparity in their methodology. On the one hand the wife’s expert, Mr X, has come to the conclusion that the preferred method by which the businesses should be valued is the “rule of thumb” method.
In the “rule of thumb”, Mr X indicates that this is a method whereby in effect everybody has to get real and see what goes on in the outside world and he in his reports indicates that this is the only and proper way to value the businesses to which I have hereinbefore referred. He, in adopting this methodology, indicates that on at least two occasions the respondent through his businesses has in fact adopted the “rule of thumb”, particularly insofar as the valuing of a financial planning practice under a Mr L’s control. This was acquired by L Unit Trust during 2007 financial year and as appears on page 4 of the joint statement (exhibit 25) the L Unit Trust balance sheet includes an asset TLA fees purchased at a value of $583,433 (see Mr X’s report of 1 November 2010 at page 69).
In relation to this figure, after being advised of certain facts by Mr Bleak, Mr X came to the conclusion that the price was determined as a multiple of recurring income and on that basis the price paid by L Unit Trust equates to a multiple of recurring income of approximately 3.2. Not only does Mr Bleak purchase this interest through one of his interests at a “rule of thumb”, but Mr X also notes that in a participation agreement dated 21 October 2006 between J Unit Trust Y Pty Ltd, Mr Bleak and L Unit Trust sets out the process for making the value of an interest held by a defaulting party.
5.3 …
After determining the value under this clause the Accountant will specify the value to be the greater of either the value determined by the Accountant under clause 5.3 or 3 x /Recurring Revenue.
That clause concludes that the value was to be three times recurring revenue or the value determined by the accountant (based on the current value of the estimated future earnings of the business discounted at an appropriate rate to reflect the risk and time value of money as determined in the accountant’s discretion, ie the capitalisation of future maintainable earnings, the method adopted by Mr R.
In fact it appears to me that on both of the transactions referred to hereinbefore, the value must be determined on the “rule of thumb”, i.e. three times recurring. In particular, in relation to the partition agreement I once again emphasise that the default value was to be the greater of three times recurring value and the capitalisation method, i.e. if the “rule of thumb” was $100 and the capitalisation method was $50, the $100 must be accepted. Why then can it be said by Mr Bleak that where in the participation agreement, in the purchase of the interest referred to hereinbefore he relies upon the “rule of thumb”, is he able to say now that that is wrong and it should be the capitalisation method. I cannot see it.

The default value particularised immediately hereinbefore has to be valued on three times recurring value. It is a method which is available to estimate the value of that in a participation agreement.
Mr R concedes that the “rule of thumb” can be used but he is of the view that it can only be used in certain circumstances. It should be used where there is control of the property or business to be sold. He states, however, that it is imprecise and should only be used as a check on what he considers to be the proper method of valuation, that as the second of the alternatives to which I have hereinbefore referred being the capitalisation of future maintainable earnings.
However, it makes it exceptionally difficult for me to understand how Mr Bleak, through counsel, can submit that he should on one hand be able to use the capitalisation of future maintainable earnings which according to both Mr R and Mr X, Mr X having done a valuation on that method, which is less than the one adopted by himself in relation to Mr L’s financial planning practice and one which has been indicated as being available to a party in valuing the interest in the participation agreement.
Further, it appears to me that as long ago as 1977 the former Justice Goldstein was of the view in relation to partnerships that a scheme and/or arrangement, which a partnership is of course, can be used for both things. One, the benefit that attaches to the partnership and the responsibilities also attaching to the partnership. I consider that this is a similar case wherein on one hand it ill-behoves Mr Bleak to say that “I will purchase an interest by the “rule of thumb” method” and yet in this case he proposes that the “rule of thumb” method which he has used on at least one occasion and has referred to and approved of on another occasion (see hereinbefore) is to be rejected because, as I infer, it values the value of the businesses which is to be distributed between the parties at much less than which the “rule of thumb” does.
Mr R has considered the “rule of thumb” and a paper is referred to and I have already indicated that he states that the “rule of thumb” should only be given substantial weight “if it can be acknowledged that knowledgeable buyers and sellers place substantial reliance on them”. Mr R did not use the “rule of thumb” to check, as he indicates it can be used, but relied solely on the capitalisation method. Mr X has checked and there is a variation between his value of the business entities on the capitalisation method to Mr R’s, perhaps being something in the vicinity of 20 per cent.
But I cannot get past the fact that Mr Bleak, on one occasion when he was purchasing an interest in another financial planner, a similar type of business to what he is involved in, used the “rule of thumb” method and it was used as a method of value in the participation agreement. Consequently, notwithstanding my great respect for Mr R’s expertise in this matter, I prefer the valuation of “rule of thumb” as proposed by Mr X. I emphasise the reason why I have done this is the fact that on one occasion at least that was used as a method of valuing a business which was purchased by Mr Bleak’s business interests and of which he must have obviously been aware and has acknowledged the “rule of thumb” in the participation.
It has been emphasised by North that Mr X’s “rule of thumb” method can or should only be used if the entity is to be sold. Mr X seems to agree with this (see para 21.2(ii) of the report, Annexure 1 to his affidavit of 16 April 2010). North submits that this being the case the “rule of thumb” cannot be accepted. But as North S.C. further submits if I either make an order on Mr X’s “rule of thumb” or Mr R’s capitalisation method, it will require at least a partial sale and perhaps the whole interest in the businesses (see para 11 and para 12 of Submissions of 29 November 2010).
Since I have come to the conclusion that I adopt the valuations as set out by Mr X in his reports, I do not consider that it is necessary for me to go into the capitalisation of the future maintainable earnings and consequently will not discuss the differences between the approach of Mr X and Mr R to that method of valuation.
Annexed to Mr X’s affidavit of 2 April 2010 is, as he says, an up-to-date report which, at paragraph 2 subheading Summary of Opinion, Mr X sets out in his view the value of the various entities – businesses as I have referred to them before – and comes to the conclusion that the total of the parties’ interests is $4,517,795 and he repeats at 2.2 his methodology in that he says “In calculating the above adopted values I have determined the market value of the parties’ interests in the financial planning businesses and insurance broking businesses operated by a number of the entities with reference to the consideration for which the businesses would currently sell” (my emphasis). He has, of course, quite properly considered the value of the businesses adopting the capitalisation of future maintainable earnings method. I have referred to this above. And, in effect, he has had a cheque valuation prepared by use of the capitalisation of future maintainable profits which does not come to anywhere near the valuation which he has propounded by way of the “rule of thumb”.
Notwithstanding that, as I have indicated before, I am persuaded and will adopt his valuation based on the “rule of thumb” for those matters to which I have already hereinbefore referred.
There is the question of taxation liabilities which has been mooted (para 2.6 of the aforesaid report). This has also been raised by Kirk of Senior Counsel and it does appear to me to be a matter which should be resolved between the parties should the property has to be sold, which appears in all probability more likely than not. I also note that there could be capital gains tax but it is submitted by Kirk on behalf of the applicant wife that in fact the capital gains on one side will be set off.
Consequently, taking into consideration the further interests as set out in the summary of opinion which include loan accounts etc, it appears that the figure of $4,517,795 is the figure that is to be distributed between the parties.
I have particularly emphasised the report of Mr X, in particular 2.6 and 2.7 and I recommend that in fact the company favourably consider those technical interpretations as set out in 2.8. That of course is not the end of the matter.
In appendix B to the submissions of Kirk of Senior Counsel of 4 November 2010 a summary of assets, resources and liabilities is set out. This is a similar form of calculation as is set out as a statement of assets and liabilities in North S.C.’s submissions of 29 November 2010.
I already have touched upon, the value of the businesses. And on top of that there is (see page 1 of North’s submissions) the extra property, if I may put it that way, which is in addition to the values that I have already placed upon the businesses. There appears to be little or no discrepancy between their personal assets being the Z Street property, Suburb T, the contents of the Suburb AA property, contents of the D Town property, artwork and memorabilia. This appears to me to suggest that the assets which are agreed between the parties and classed as personal assets is some $780,260.
In Mr Bleak’s affidavit of 8 October 2010, he sets out how he became involved in the estate of his grandfather notwithstanding it appears to at this stage not wound up. I am of the view that the $28,000 should in fact be included as an asset of the parties. This of course does not take into consideration any interest that the parties may have in the D Town property since it is owned by one of the business entities, i.e. B Pty Ltd Property Holding Trust.
The assets of the parties other than for the businesses referred to hereinbefore appear to their interest in the Z Street property, superannuation entitlements and the other assets as particularised at para 4 of appendix A attached to Kirk’s submissions. I note, however, that Z Street has two mortgages. One is the CBA. I understand that is not cavilled with by the respondent husband, of $441,153. But there is an ASK mortgage, a second mortgage, which was taken out according to the husband without his knowledge and the funds from which were used by the wife in paying for her legal expenses. Whilst it clearly is a liability it affects the equity of the parties in the realty at Z Street as aforesaid. It is matter which I will take into consideration on the add backs.
Consequently, it appears that the property of the parties other than for the Z Street property in which, taking into consideration the ASK mortgage, there is virtually no equity at all. It is approximately an amount of $385,999. Note that this has taken into consideration the husband’s interest in the grandfather’s estate and he refers to in his affidavit of 8 October 2010 how this came about, and monies which are held in the husband’s solicitors’ trust account which I assume are monies which have been left over from the numerous loans that I will be referring to insofar as the liabilities are concerned.
Para 5 of the memo to which I have referred, annexed to the submissions of Kirk of Senior Counsel, in particular 5(a) – these loans which are substantial in amount, something like over $200,000, were generally expended by the wife in relation to living expenses, health insurance and alleged repairs on the D Town property. I refer in passing to the affidavit of Mr BB of 4 November 2010 wherein he indicates that he has (see para 7 thereof) lent her amounts totalling about $60,000, in relation to those matters particularised in that paragraph. There are also allegations that Ms CC extended considerable monies, some $124,000, in relation to living expenses, extensions to the flat and legals (see affidavit of 8 October 2010 at para 66).
The respondent husband objects to these matters being classed as liabilities of the parties or either of them since he indicates that during the time that these monies were expended, not exclusively but during that time, he was maintaining the wife up until 31 May 2007 (see para 30 of his affidavit supra). He indicates that he cannot understand how such large indebtedness was brought about as the result of the wife’s expenditure. Regrettably I am “stuck” with the allegations of the wife and I am aware that she is indebted and there is support for the amounts as alleged. I do worry about the fact that some of the debts are from brother and parents and it may be that these debts will not be recoverable in the near future (see para 67 of the affidavit supra). However, they are legal debts and I will take them into account as liabilities.
The wife has further credit cards of some $32,368. I must say that the wife gives me the impression of being somewhat profligate in the amount of monies which she has expended upon herself and the children. But it is virtually impossible for me to say that I cannot accept that such amounts were other than expended and other than expended in the manner in which she said she did (see her examples of expenditure in the affidavit supra para 60 et seq).
Insofar as 5(d) and (e) are concerned, these being personal guarantee of the husband in relation to the debts of V, being $61,982, it appears to me that such guarantee has not as yet fallen and crystallised and consequently I will not take that into consideration.
The husband’s loans of $284,204 are once again of some concern to me similarly to the wife’s extensive loans. It appears that these parties have been used to what could be considered a very high-flying standard of living and have been unable, as it appears to me, to be able to “cut their cloth” to take into consideration the platitude that a single person should be able to live cheaper than two. This is not the case. They appear to have been continuing along, as I have said, in a high-flying lifestyle and these monies appear to have got away from them. But, however, I am persuaded on the evidence before me to accept them.
I must say that for a financial planner, the evidence of the husband was given in a most unsatisfactory manner, he being unable to particularise and/or elucidate virtually all of the loans but indicates that his accountant should be the one that you consider. As a financial planner, this is worrying.
Insofar as add backs are concerned, para 6 of the aforesaid memo of Kirk sets out the amounts of legals paid by the parties. The ASK debt is, as I have said, quite clearly used by the wife and I understand could only possibly be availed of by the wife for the payment of legals. It appears on the material before me she has expended from that an amount of $144,530. She also indicates that there have been legals from her brother, which as he refers to in para 7(d) and (l) amount to something like $19,000 odd. Since those amounts have been particularised I consider that it is necessary for them to be added back in as well.
In relation to the husband’s legals as has been conceded by Kirk in his submissions, the only amount that he can really aim at is an amount of $97,022. As he said, “it is the best they can do”.
The capital gains tax has been a concern. Both North and Kirk are aware of this. Mr Q suggests in his affidavit of 1 November 2010, that the capital gains on the Suburb DD properties would be about $72,000. The Suburb EE property would have a capital gain of approximately $1,700 and the S Street, Suburb T property would be about $11,125. He estimates that the capital loss on the C Street property at D Town would be some $221,000. Consequently, it appears to me as though the capital gains tax will not be an issue here because the debits will be set off as against the profits.
What then am I left with? And I must emphasise that as it is too well known that my maths are not that accurate and I would request that should there be any difficulties with my mathematical calculations, that such matters be brought on short notice before rather than have the parties expend considerable amounts as and by way of costs on an appeal. I am referring only to mathematical calculations.
The pool comes to approximately $4,517,795.
It appears to me therefore that the wife will be retaining as of her wont an unencumbered interest in the C Street property, the contents, the art and memorabilia and her superannuation. This appears to me to be assets which would be in the control of the wife of $1,110,459. Sixty-five per cent thereof comes, according to my mathematics, to $2,955,715. Deducting therefrom the amount of $1,110,459, being the assets in the hands of the wife, it appears to me that it will require the husband paying to the wife the amount of $1,845,256.

ASSETS	Value
Entities
*Total of Parties’ Interests*	*4,517,795*
Personal Assets
Z Street, Suburb T	600,000
CBA Mortgage	(441,153)
ASK Mortgage	(150,000)
Contents	120,260
Artwork and memorabilia	60,000
Interest in Country FF Estate	28,000
Monies held in Husband’s solicitors’ Trust Account	57,650
Superannuation
Husband	26,229
Wife	93,860
*Total personal assets*	*385,999*
TOTAL OF PARTIES’ ASSETS	4,903,794
LIABILITIES
Wife’s loans	208,960
Wife’s credit card	32,368
Husband’s credit card	1,919
Husband’s tax liabilities	70,641
Husband’s loans	284,204
*TOTAL LIABILITIES*	*598,092*
ADD-BACKS
Wife’s legal costs paid	144,530
Husband’s legal costs paid	97,022
*TOTAL ADD-BACKS*	241,552
TOTAL PROPERTY POOL	4,547,254

Spousal maintenance

As has been pointed out by Kirk of Senior Counsel in his submissions, the question of the wife’s future maintenance has not been raised. Consequently, it is, in my opinion, for me to determine first of all whether she requires maintenance, and secondly that in fact the respondent has the ability to pay maintenance. The quantum of such maintenance is at large. I have had the assistance of the financial statement of the wife filed on 8 October 2010 and her affidavit, in particular those matters to which I have referred in relation to her ability to work, she indicates that she has not worked since ceasing cleaning some time before cessation of cohabitation and her health precludes her from seeking any form of gainful employment.
In her financial statement referred to hereinbefore under part N she sets out those amounts which she requires to adequately, as she said support herself. In her first financial statement filed in February 2009 she sought an amount of something like $1300 odd. However, in the financial statement of 8 October 2010, she does not seem to claim anything more than about $453 (see annexure part N thereto). This appears to be of a great variance to that which is submitted by Kirk in his financial submissions, an amount of $1346 per week.
However, taking into consideration both of those matters and the contents of her affidavit of 8 October 2010, in particular paras 78 - 101, I am of the view that the wife is at this stage, and I emphasise “this stage”, requiring of spousal maintenance.
As I have already indicated, upon her receiving the monies ordered under this judgment she will, in my opinion, have no necessity for further maintenance. However, because of the view I have taken of the perhaps slowness of the respondent to be able to amass the amount as particularised hereinbefore, he indicating that his sources of funding are somewhat limited, I am of the view that such maintenance order should only last for a period of six months. Doing the best I can on the material put before me, I would estimate that the wife would be entitled to $750 per week for a period of six months.
As I have indicated before, because I am concerned about the ability of the husband to be able to fund the judgment within a reasonably speedy time, and it may require further orders by way of sale of the aforementioned businesses and assets of the husband, I will adjourn the working out of the property order for a period of six months and will mention it before myself on 30 November 2011.
Kirk has in his original outline of case document enclosed (see appendix B) draft minutes of orders. I consider that generally they are proper in all the circumstances but I would amend them by inserting in paragraph 5 “the sum of $1,845,256 within a period of five months”, and in paragraph 6 “within seven days” of the payment particularised in para 5. It appears to me that the balance of the orders are correct and I order in accordance with them as amended.

I certify that the preceding fifty-eight (58) paragraphs are a true copy of the reasons for judgment of the Honourable Justice delivered on <insert date judgment delivered>.

Associate: Anne Abbink

Date: 3 June 2011

[2011] FamCA 424

3 June 2011

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Family Law

Equity & Trusts

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