Bowes & Javier - [2021] FamCA 131

FAMILY COURT OF AUSTRALIA

Bowes & Javier [2021] FamCA 131

File number(s):	MLC 433 of 2018
Judgment of:	HARTNETT J
Date of judgment:	17 March 2021
Catchwords:	FAMILY LAW – PROPERTY SETTLEMENT – Applications by Applicant and First Respondent for alteration of property interests – cohabitation period of approximately eleven and a half years – one child of the marriage – where Second Respondent seeks property orders on the basis of her claims in equity – Second Respondent asserted both Applicant and First Respondent responsible for repayment of debt to her under loan agreement between her as lender and Applicant as borrower secured by former matrimonial home – Second Respondent asserted both equitable mortgage and equitable charge in her favour over the former matrimonial property under loan agreement – where Applicant divested funds prior to and following final separation – assessment of contributions – just and equitable distribution. .
Legislation:	Evidence Act 1995 (Cth) s 140 Family Law Act 1975 (Cth) s 68L, 75(2), 79, 90AE, 90SM
Cases cited:	Bell & Nahos [2016] FamCAFC 244 Bevan & Bevan [2013] FamCAFC 116 Hickey & Hickey and Attorney-General for the Commonwealth of Australia (2003) FLC 93-143 Mallet v Mallet (1984) 156 CLR 605 Martin & Newton [2011] FamCAFC 233 Stanford v Stanford [2012] HCA 52 Teal & Teal [2010] FamCAFC 120 Whisprun Pty Ltd v Dixon [2003] HCA 48 Woollams & Woollams (2004) FLC 93-195
Number of paragraphs:	98
Date of last submission/s:	25 August 2020
Dates of hearing:	27 & 28 April 2020; 20 & 21 July 2020; and 10 & 11 August 2020.
Place:	Melbourne
Applicant:	In person
Counsel for the First Respondent:	Mr Pavone
Solicitor for the First Respondent:	Westminster Lawyers
Counsel for the Second Respondent :	Mr Raftery
Solicitor for the Second Respondent :	Somerset Ryckmans

ORDERS

MLC 433 of 2018

BETWEEN:

MR BOWES

Applicant

AND:

MS JAVIER

First Respondent

MS B BOWES

Second Respondent

ORDER MADE BY:	HARTNETT J
DATE OF ORDER:	17 MARCH 2021

THE COURT ORDERS THAT:

The Applicant pay to the Second Respondent for and on behalf of C Pty Ltd the sum of $113,374 (‘the payment’). The Applicant be solely liable for the payment to the exclusion of the First Respondent and the Applicant indemnify the First Respondent against any liability howsoever arising in relation to the payment and his obligation pursuant to this order.
The entirety of the net proceeds of sale of the property known as and situate at D Street, Suburb E in the State of Victoria (‘the Suburb E property’) as held on behalf of the parties in the trust account of the First Respondent’s solicitors be forthwith paid out to the First Respondent.
Each of the Applicant and First Respondent retain those monies already advanced to them by way of partial property settlement.
The First Respondent retain the proceeds of sale of the Motor Vehicle 1.
The Applicant retain those monies held in bank accounts in his name and/or the name of any of his associated corporate entities.
The Applicant retain to the exclusion of the First Respondent and indemnify her against all liability howsoever arising in relation to:-
(a)his interest in F Pty Ltd, and any liabilities arising in respect of the sale of the business or the property at G Street Suburb H;
(b)his interest in J Pty Ltd ATF K Trust;
(c)his interest in L Pty Ltd ATF the M Trust;
(d)his Motor Vehicle 2;
(e)all liabilities in his name including but not limited to credit card debts;
(f)any funds allegedly owed by him and/or the parties to any persons including but not limited to his sister Ms B Bowes, C Pty Ltd ATF C Trust and/or Mr N Bowes; and
(g)his superannuation entitlements.
The First Respondent retain to the exclusion of the Applicant and indemnify him against all liability howsoever arising in relation to:-
(a)the balance of her bank accounts;
(b)all liabilities in her name including but not limited to credit card accounts; and
(c)her superannuation entitlements.
Save for the purposes of enforcing these orders:-
(a)each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in the possession of such party as at the date of these orders;
(b)monies standing to the credit of the each party remain the sole property of that party;
(c)insurance policies remain the sole property of the owner named thereon;
(d)each party forego any claim he or she may have to any superannuation benefits belonging to or earned by the other;
(e)each party be solely liable and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders; and
(f)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
The Applicant pay to the First Respondent the sum of $6,500 in costs together with the sum of $2,000 in respect of his reimbursement of the First Respondent for her payment to Mr O, the family report writer. Such sums are included in the monies to be paid to the First Respondent pursuant to order 2 herein.
Otherwise, all extant applications are dismissed.

Note: The form of the order is subject to the entry in the Court’s records.

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).

IT IS NOTED that publication of this judgment by this Court under the pseudonym Bowes & Javier has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

HARTNETT J:

PRELIMINARY

This proceeding concerned competing applications by the parties for both final parenting and property orders. The parenting orders sought were by the Applicant father (‘Applicant’) and the First Respondent mother (‘the First Respondent’) with respect to their child X born in 2013, now aged nearly eight years old (‘the child’).[1] On 2 October 2019, the Court made orders appointing an Independent Children’s Lawyer pursuant to s 68L of the Family Law Act 1975 (Cth) (‘the Act’).[2] The final hearing commenced on 27 April 2020. On that day, the Court made final parenting orders by consent of each of the Applicant, the First Respondent and the Independent Children’s Lawyer.[3] Those orders provide for the Applicant and First Respondent to have equal shared parental responsibility for the child and for the child to spend time and communicate with the Applicant for four nights each fortnight during school-terms; half of school term holidays commencing in 2021; and alternating yearly Christmas Day periods together with other special occasion arrangements.[4] The Independent Children’s Lawyer was discharged from all further hearings in the proceeding on 27 April 2020.[5]
[1] Further Amended Initiating Application filed by the Applicant on 19 May 2020, page 12.
[2] Order made by Hartnett J on 2 October 2019, order 1.
[3] Final (Parenting) Order made by Hartnett J on 27 April 2020, page 2.
[4] Final (Parenting) Order made by Hartnett J on 27 April 2020, order 2, order 3 and order 4.
[5] Final (Parenting) Order made by Hartnett J on 27 April 2020, order 18.
On 28 April 2020, the sister of the Applicant sought to intervene in the proceeding. She was joined as a party to the ongoing property proceeding (‘the Second Respondent’) by order of the Court and with the consent of the Applicant and First Respondent.[6] The final hearing as to the competing property order applications was unable to proceed, as the Second Respondent required further time to file the material she sought to rely upon. The Second Respondent was ordered to file a Notice of Address for Service; a Response setting out the orders sought by her; and an affidavit of evidence.[7]
[6] Order made by Hartnett J on 28 April 2020, order 1.
[7] Order made by Hartnett J on 28 April 2020, order 2.
The First Respondent sought a costs order against the Second Respondent in respect of her delay in joining the proceeding. That delay occasioned an adjournment of the balance of the proceeding rather than any substantial injustice to/or costs thrown away by the parties. Other matters were also canvassed by the parties upon the joinder. The Second Respondent had sought to minimise her costs and that of the other parties, by in the first instance, being a witness on behalf of the Applicant in the proceeding. She abandoned 2 of the orders as sought by her during the proceeding, on the basis that loans in respect of which she sought repayment were advanced to a company controlled and owned by the Applicant which had been voluntarily placed by him, in liquidation, and otherwise because she had advanced monies solely to the Applicant and post separation. Whilst each of the Applicant and First Respondent are in receipt of Centrelink payments, and the Second Respondent is not, the Second Respondent provided significant funds to the Applicant during the course of the parties’ marriage, some of which benefitted the First Respondent. In the exercise of its discretion the Court makes no order as to costs against the Second Respondent in respect of her late joinder.
The balance of the final hearing was heard over four days, being 20 July 2020, 21 July 2020, 10 August 2020 and 11 August 2020. Written submissions were then filed by the parties on 25 August 2020.
These reasons for judgment go to the respective property applications remaining before the Court.
The Applicant sought (at commencement) property orders that the First Respondent pay him $275,000 and that upon that payment there be a 30 percent adjustment to the First Respondent of the equity in the property owned and occupied by him and hereafter known as the Suburb E property; that he retain ownership of his companies, his bank accounts and his superannuation entitlements; and that the Applicant and First Respondent retain their respective insurance policies and otherwise retain property and superannuation benefits in their sole names.[8] Additionally, the Applicant sought the First Respondent be liable with him for the monies claimed to be owing to the Second Respondent including that owed by the Applicant to the company owned and controlled by the Second Respondent namely C Pty Ltd. The Applicant sought an alternate order in the event that the First Respondent did not pay to him an amount of $275,000. In those circumstances, the Applicant sought that 100 percent of the equity in the Suburb E property be retained by him, and that otherwise the orders as sought by him be made. The effect of the orders then sought by the Applicant were to leave the First Respondent with no monies or owing him considerable monies with no capacity to meet that payment.
[8] Further Amended Initiating Application filed by the Applicant on 19 May 2020, page 3 and page 4.
The First Respondent sought (at commencement) property orders that the Suburb E property be sold and the net balance of the proceeds of sale be retained by her; that the Applicant be liable for and indemnify the First Respondent against any funds owed by him to the Second Respondent and/or her associated entities; that otherwise the parties retain all property and superannuation benefits in their sole names; and that the Applicant pay the First Respondent’s costs.[9]
[9] Further Amended Response to Initiating Application filed by the First Respondent on 16 April 2020, page 5 and page 6.
The Second Respondent sought (at commencement) property orders that the Applicant and/or the First Respondent pay her the sum of $202,330 and that the Applicant pay her on behalf of C Pty Ltd, the sum of $100,000 together with accrued interest pursuant to a loan agreement between the Applicant and C Pty Ltd dated 17 November 2016, with such liability, to be a liability of the Applicant and First Respondent. In the alternative, the Second Respondent sought a transfer to her of the Suburb E property for a purchase consideration of $580,000 less monies claimed to be owed to her.[10] She proposed that she would take on the responsibility of the current mortgage and that any surplus equity (after payment out of any debts owing to her and deduction of the mortgage balance) would be paid collectively to the Applicant and First Respondent.
[10] Response to Initiating Application filed on 21 May 2020, page 2.
During the course of the trial, the parties agreed that the Suburb E property should be sold. Accordingly, on 21 July 2020, the Court made orders by consent, relevantly, as follows:
(a)Within 42 days of these orders, the Applicant do all acts and things to cause the real property known as and situate at D Street, Suburb E in the State of Victoria (‘the Suburb E property’) to be listed for sale by private sale or public auction as determined by the selling agent.
(b)The proceeds of sale of the Suburb E property be applied as follows:-
(i)first, to pay the costs, commissions and expenses of sale;
(ii)second, to discharge the mortgage registered against the Suburb E property and any other encumbrance so registered against the Suburb E property save the interest claimed by the Second Respondent in the caveat lodged by her over the Suburb E property, which shall not be paid out or discharged; and
(iii)third, the net proceeds of sale remaining be held in the names of the Applicant , the First Respondent and the Second Respondent in the trust account of the First Respondent ’s solicitors until further order of the Court.
(c)On or before the settlement of the sale, the Second Respondent withdraw the caveat held by her over the Suburb E property.
The effect of the above orders, and that of the evidence before the Court as the matter proceeded, was an alteration in the orders as sought by each of the parties.
In closing, the Applicant sought orders as follows:[11]
[11] Applicant’s closing submissions filed 25 August 2020.
a.The amount of $113,374 is a secured liability, it ought to be deducted from the value of the D Street property. This has been supported with evidence and witness testimony.
b.If the court found that I am solely liable for the $113,374 then that should be deducted prior to any division of the remaining matrimonial pool.
c.The court to recognise that I still have a debt on top of the personal loan of $105,875 as an unsecured loan to Ms B Bowes, which was primarily for the benefit of both parties.
d.$30,000 be put into a trust fund for X’s education. To be administered jointly by Ms Javier and myself.
e.The $9,620 shortfall I received from the part property settlement of G Street be reimbursed to me before any further property division.
f.The $12,960 Ms Javier took from her NAB Account and sale of the P Company shares be recognised as monies already received by Ms Javier.
g.The $17,750 Ms Javier received for the sale of the Motor Vehicle 1 be recognised as monies already received by Ms Javier.
h.The $7,000 Ms Javier took from the family home be recognised as monies already received by Ms Javier.
i.The $6,450 in court fees be taken out of the remaining property before final division.
j.$900 be set aside for divorce application before final division.
k.The remaining funds be split 50-50 between Ms Javier and myself, giving weight to her responsibility in the loss of the business sale, multiple breaches, and subsequent depletion of the matrimonial pool.
In closing, the First Respondent sought orders to provide for an overall division of the Applicant and First Respondent’s net assets such that the First Respondent receive 65% of the net assets, and the Applicant 35% of the net assets. Orders to give effect to this division as submitted by the First Respondent would include retention by the First Respondent of:
(a)the net proceeds of sale of the Suburb E property.
(b)the net proceeds of sale of the Motor Vehicle 1 at $16,000; and
(c)retention of her part property settlement of $50,000.
Additionally, the First Respondent sought from the Applicant, a sum of $2,000 in respect of reimbursement to her for her expenditure in relation to obtaining the Family Report relied upon in the parenting order proceeding and $6,500 in payment of her reserved costs. The First Respondent sought further that any monies owing to the Second Respondent by the Applicant be the sole liability of the Applicant and be not deducted from the net sale proceeds of the Suburb E property. The First Respondent sought a costs order against the Second Respondent for her late joinder to the proceeding.
The Second Respondent sought an order that the Applicant pay her the sum of $113,374. She submitted that the Court ought to find that the Applicant has a liability to C Pty Ltd in the sum of $113,374 which was secured by the Suburb E property. As such, it ought be deducted from the net sale proceeds of the Suburb E property and paid out to the Second Respondent before its value was listed in the pool of assets to be apportioned between the Applicant and the First Respondent. In the alternative, the Second Respondent submitted that the loan advanced by C Pty Ltd ought be considered as a contribution made by the Applicant.[12] In the event the Court did neither of these things, then the Second Respondent submitted the debt should be taken into account by the Court pursuant to s 75(2)(ha) and (o) of the Act.
[12] Hurst & Hurst (2018) FLC 93-851.

MATERIAL RELIED UPON

The Applicant relied upon the following material:-[13]
(a)his Further Amended Initiating Application filed 19 May 2020 with the exception of order 3 and order 7(a) of the orders sought, which were withdrawn by him during the proceeding on 20 July 2020;[14]
(b)his Financial Statement affirmed 19 April 2020;
(c)his affidavit affirmed 17 April 2020;
(d)the annexures to his affidavit affirmed 17 April 2020 and sent to the Court by the Second Respondent on 21 July 2020;
(e)his outline of case document filed on 16 April 2020; and
(f)his closing submissions filed on 25 August 2020.
[13] Transcript of proceeding 20 July 2020, from page 27 at line 35 until page 28 at line 20.
[14] Transcript of proceeding 20 July 2020, page 23 at lines 20-25.
The First Respondent relied upon the following material:-[15]
(a)her Further Amended Response filed 16 April 2020;
(b)her Financial Statement sworn by her on 15 April 2020;
(c)her affidavit sworn 15 April 2020;
(d)an affidavit of Mr Q Javier filed 16 April 2020;
(e)her outline of case document filed 25 April 2020;
(f)her tender bundle of documents relied upon sent to the Court 20 July 2020 and marked as exhibit ‘RW-1’; and
(g)her closing submissions filed 25 August 2020.
[15] Outline of Case by the wife filed 25 April 2020, page 2.
The Second Respondent relied upon the following material:-[16]
[16] Transcript of proceeding 20 July 2020, from page 4 at line 10 until page 5 at line 35.
(a)her Response to Initiating Application filed 21 May 2020;
(b)her affidavits sworn/affirmed 29 June 2018, 20 May 2020 and 17 July 2020;
(c)an affidavit sworn by Mr R on 17 July 2020;
(d)an affidavit sworn by Ms S on 20 July 2020 including an annexure, sent to the Court by the Second Respondent on 20 July 2020; and
(e)the following documents referred to in the affidavit sworn by Ms S on 20 July 2020, sent to the Court by the Second Respondent on 20 July 2020:-
(i)tax invoices from T Company addressed to the Second Respondent dated 14 September 2018 and 7 December 2018;
(ii)a tax invoice from U Company addressed to the Applicant dated 20 September 2018;
(iii)tax invoices from U Company addressed to the Second Respondent dated 11 December 2018, 14 December 2018 and 10 October 2019; and
(f)her closing submissions filed 25 August 2020.

Further documents relied upon by the parties were tendered in evidence during the course of the trial.
It is not necessary in these reasons for judgment to comment upon the entirety of the evidence of each witness nor to comment on every exhibit tendered. However every piece of evidence relied upon by the parties has been read and carefully considered by me.[17] The standard of proof in the proceeding is the balance of probabilities.[18]
[17] Bell & Nahos [2016] FamCAFC 244, [28]; Whisprun Pty Ltd v Dixon (2003) 200 ALR 447, [62].
[18] Evidence Act 1995 (Cth), s 140.

IS IT JUST AND EQUITABLE TO MAKE A PROPERTY SETTLEMENT ORDER

Section 79(1) of the Act provides that the Court may make such orders as it considers appropriate altering the interests of the parties to the marriage in the property of the parties.
Section 79(2) of the Act provides as follows:-
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.
If the Court is so satisfied that it is just and equitable to make an order altering the interests of the parties in property, s 79(4) of the Act sets out the matters which the Court must take into account when considering what order (if any) should be made.
The High Court of Australia (‘High Court’) in Stanford v Stanford (2012) 247 CLR 108 (‘Stanford’) revisited the process for trial judges in altering property interests of parties pursuant to s 79 of the Act for married parties, and s 90SM of the Act for de facto couples. The High Court emphasised the requirement for the Court to establish firstly that it be just and equitable in the particular circumstances of the case to make any alteration of property interests. In this process, the question presented by s 79(2) of the Act, namely “whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order”[19], must not be merged with or supplanted by the inquiries under ss 79(4)/90SM(4) of the Act.[20] In determining whether it is just and equitable to make an order, the matters which can be taken into account do “not admit of exhaustive definition.”[21] However, there must be a “principled reason for interfering with the existing legal and equitable interests of the parties to the marriage.”[22] In particular the High Court said at paragraphs [37]-[40] and [42] as follows:-
37. First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. So much follows from the text of s 79(1)(a) itself, which refers to “altering the interests of the parties to the marriage in the property” (emphasis added). The question posed by s 79(2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order.
38. Second, although s 79 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion. In Wirth v Wirth, Dixon CJ observed that a power to make such order with respect to property and costs “as [the judge] thinks fit”, in any question between Applicant and First Respondent as to the title to or possession of property, is a power which “rests upon the law and not upon judicial discretion”. And as four members of this Court observed about proceedings for maintenance and property settlement orders in R v Watson; Ex parte Armstrong:
“The judge called upon to decide proceedings of that kind is not entitled to do what has been described as 'palm tree justice'. No doubt he is given a wide discretion, but he must exercise it in accordance with legal principles, including the principles which the Act itself lays down”.
39. Because the power to make a property settlement order is not to be exercised in an unprincipled fashion, whether it is “just and equitable” to make the order is not to be answered by assuming that the parties' rights to or interests in marital property are or should be different from those that then exist. All the more is that so when it is recognised that s 79 of the Act must be applied keeping in mind that “[c]ommunity of ownership arising from marriage has no place in the common law”. Questions between Applicant and First Respondent about the ownership of property that may be then, or may have been in the past, enjoyed in common are to be “decided according to the same scheme of legal titles and equitable principles as govern the rights of any two persons who are not spouses”. The question presented by s 79 is whether those rights and interests should be altered.
40. Third, whether making a property settlement order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised “in accordance with legal principles, including the principles which the Act itself lays down”. To conclude that making an order is “just and equitable” only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.
…
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 the result of a choice made by one or both of the parties, the Applicant and First Respondent 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 Applicant and First Respondent. No less importantly, the express and implicit assumptions that underpinned 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 to those interests could be effected 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 s 79(4).
[19] Ibid [37].
[20] Ibid [51].
[21] Ibid [36] referring to Mallet v Mallet (1984) 156 CLR 605, 608 per Gibbs CJ.
[22] Ibid [41].

ASSETS AND LIABILITIES OF THE APPLICANT AND FIRST RESPONDENT

The existing legal and equitable interests of the Applicant and First Respondent are set out in the below table:-[23]
[23] Outline of Case by the wife filed 25 April 2020, pages 5, 6 and 7.

REAL PROPERTY
PROPERTY	OWNERSHIP	VALUE
Net proceeds of sale of D Street, Suburb E (these monies are held on behalf of each of the parties in the trust account of the First Respondent’s solicitors)	Applicant	$255,875.93
SUB-TOTAL		E $255,875.93 (approximately $255,876).

Note in respect of the above: the Second Respondent claims that she had both an equitable mortgage and/or an equitable change in favour of C Pty Ltd over the Suburb E property. She had lodged a caveat against the title and claimed that C Pty Ltd was a secured creditor.

NON-REAL PROPERTY
PROPERTY	OWNERSHIP	VALUE
Motor Vehicle 3	Applicant	NK
Motor Vehicle 2	Applicant	$3,000
J Pty Ltd ATF K Trust	Applicant	NK
L Pty Ltd (ACN …) ATF the M Trust. Registered by the Applicant in June 2015.	Applicant	Placed in voluntary liquidation by the Applicant in July 2019 without any prior notice to the First Respondent.
Household contents and chattels at D Street, Suburb E	Applicant	E $15,000 as asserted by the First Respondent E $nominal as asserted by the Applicant There was no valuation evidence before the Court and the Court makes no finding as to any value to be attributed to the household chattels. The First Respondent sought no items to be transferred from the possession of the Applicant to her.
Monies owed by Mr N Bowes by virtue of an overpayment to him from the Applicant as claimed by the First Respondent and denied by the Applicant	Applicant	$60,000
Net sale proceeds (after payment to obtain a roadworthy certificate and the costs of sale) of Motor Vehicle 1	First Respondent	$16,000
ANZ Savings Account	Applicant	at separation $44,022 at trial NK
ANZ Business Saver Account	Applicant	at separation $36,885 at trial NK
P Company shares	First Respondent	$8,000
SUB-TOTAL		$187,867

FUNDS PAID TO THE APPLICANT AND FIRST RESPONDENT POST-SEPARATION
PROPERTY	OWNERSHIP	VALUE
Funds withdrawn from V Bank account between December 2017 and April 2019	Applicant	$73,918
Funds withdrawn by the Applicant from the ANZ home loan account following separation and used solely by him. The mortgage increased from $259,307 at separation to $330,000 at trial. An increase in approximately $60,000.	Applicant	$60,000 approx
Money received from W Company	Applicant	$57,000
Balance of bank accounts	First Respondent	$4,960
Part property settlement received in March 2019	First Respondent	$50,000
Part property settlement received in March 2019	Applicant	$40,340.23 Less $9,786 plus $50 PEXA fee = $30,604.23 (Note: out of these monies received by the Applicant the sum of $9,976 was paid to the First Respondent pursuant to costs orders against the Applicant)[24]

[24] Written Submissions of the First Respondent filed 25 August 2020, page 1.

Note in respect of the above: The Applicant conceded in evidence that the sum of $26,200 was paid to his lawyer Y Lawyers in 2018 from joint funds. These monies appear as added back to the asset pool in the funds held by the Applicant as set out in the above table and in particular, in the V Bank account.

SUPERANNUATION
PROPERTY	OWNERSHIP	VALUE
Super Fund 1	Applicant	E $35,530
Super Fund 2	First Respondent	$44,600
SUB-TOTAL		E $66,600

Neither the Applicant nor the First Respondent sought a splitting order nor any order to take into account the small disparity in their superannuation entitlements. Given their ages and the quantum of these entitlements together with the First Respondent’s need to support the child X and her compromised earning capacity, that was a pragmatic and just and equitable approach as taken by them and one which the Court would have taken.

Matters going to the asset table

Other relevant matters which relate to the property of the parties to the marriage as described in paragraph 23 above are as follows:-
(a)the First Respondent in her evidence attributed a value of approximately $80,906.44 to the balance of the bank accounts retained by the Applicant at separation. Those bank accounts were the ANZ Savings Account ending #…57 (‘the ANZ savings account’) and the ANZ Business Account ending #…18 (‘the ANZ business account’).[25] That figure was not challenged by the Applicant.[26] The First Respondent’s evidence was that as at 31 December 2017, the ANZ savings account had a balance of approximately $44,022 and the ANZ business account had a balance of approximately $36,885.[27] The Applicant identified his present interest in the ANZ savings account as “[n]ominal”[28] and provided no figure as to the “current balance”[29] in his Financial Statement affirmed 19 April 2020. The ANZ business account did not appear in his Financial Statement. The Applicant asserted that the monies held in the ANZ bank accounts were used by him to pay debt of the Applicant and First Respondent. He provided no documentary evidence to support his assertion in circumstances where that evidence would have been readily available to him and where the First Respondent challenged the Applicant’s application of such funds in his possession and control. It is common ground of the parties that post separation, the Applicant ran F Pty Ltd, and held total control of the parties’ and their associated entities bank accounts. In those circumstances, it was submitted by the First Respondent and is accepted by the Court that the sum of $80,906.44 ought be added into the pool. All of these matters are equally applicable to the Applicant’s retention and use of the V Bank account funds. He provided no disclosure as to his application of such funds. The Applicant’s Financial Statement discloses a nil balance in respect of this account.
(b)the First Respondent attributed a value of $3,000 to the Applicant’s Motor Vehicle 2.[30] The Applicant assigned his Motor Vehicle 2 a value of nil in his Financial Statement.[31] The Court prefers the evidence of the First Respondent. The vehicle has some value albeit minimal. In his Financial Statement sworn 2 July 2018, the Applicant swore his vehicle had a value of approximately $3,000; and
(c)the Applicant withdrew any claim previously asserted by him to any interest held by he and/or the First Respondent in real property situate at AA Street Suburb BB which is property registered in the sole name of the First Respondent’s father, Mr C Javier. The First Respondent’s evidence throughout the proceeding was that neither she nor the Applicant had any legal and/or equitable interest in such property. Mr C Javier filed an affidavit of evidence in which he swore that neither the Applicant nor the First Respondent had any legal and/or equitable interest in the property. He was not cross-examined by the Applicant, the Applicant conceding at the commencement of the hearing that Mr C Javier’s real property should not be the subject of any orders as sought by him. The Applicant never sought to join Mr C Javier to the proceeding.

STANFORD ARGUMENT

[25] Written Submissions of the First Respondent filed 25 August 2020.

[26] Written Submissions of the First Respondent filed 25 August 2020, page 1.

[27] Affidavit of Ms Javier sworn 15 April 2020, paragraph [87].

[28] Financial Statement of Mr Bowes affirmed 19 April 2020, page 6.

[29] Financial Statement of Mr Bowes affirmed 19 April 2020, page 6.

[30] Written Submissions of the First Respondent filed 25 August 2020, page 1.

[31] Financial Statement of Mr Bowes affirmed 19 April 2020, page 7.

The Applicant and the First Respondent’s property interests are identified above. I am satisfied that in all of the circumstances of this case it is just and equitable to make orders adjusting the Applicant and First Respondent’s property interests.
The assumptions, both stated and unstated by the parties, upon which the marriage and arrangement of the parties’ financial affairs proceeded, clearly came to an end upon their separation in December 2017. There ceased to be a common use of the parties’ joint assets. The end of the marriage necessitated a restructure of the parties’ affairs as conceded by the parties. Each of them sought for the Court to alter the interests of the parties (to the marriage) in their property.

PROPERTY ORDERS

The Court being satisfied that it is just and equitable to make orders adjusting the property interests of the parties, exercises that power by reference to s 79(4) of the Act which is as follows:-
(4) In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d) the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
(f) any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
Whilst the Court has considered as a precondition to making an order for property settlement whether it is just and equitable in all the circumstances of the particular case to make such an order, the Full Court of the Family Court in Bevan & Bevan (2013) FLC 93-545 at [86] made clear that the just and equitable consideration is one that “permeat[es] the entire process”.

BACKGROUND

The Applicant was born on in 1977 and is 43 years old.[32] The First Respondent was born on in 1981 and is 39 years old.[33] The Second Respondent was born in 1972 and is 48 years old.[34] The marital parties commenced their cohabitation around 2005 on the Applicant’s evidence, or May 2006 on the First Respondent’s evidence. They married in 2010. They separated on 27 December 2017. Their cohabitation period was thus approximately 11 years and 7 months on the First Respondent’s evidence or 12 years on the Applicant’s evidence. The Court prefers the evidence of the First Respondent whose recollection was precise and clear. However, nothing turns on that difference. Shortly after separation, the First Respondent and X left the former matrimonial home, being the Suburb E property, and commenced to reside in the home of the maternal grandfather in Suburb BB. The First Respondent and X remain so residing to the present time. Their accommodation expenses are met in large part by the maternal grandfather, with further financial assistance provided by the First Respondent’s brother and Ms DD, who is the First Respondent’s mother. The Applicant cut off all financial assistance to the First Respondent and X, save for some ongoing motor vehicle payments in or about January 2018. He has paid almost no child support in the period since. The First Respondent supports herself and X on Centrelink benefits and she receives considerable assistance from the father. He has applied a large part of his retirement savings in payment of her legal costs. He continues to make payment and/or provision for the First Respondent and X’s financial needs as described in paragraph 54 hereafter.
[32] Affidavit of Mr Bowes affirmed 17 April 2020, paragraph 3.
[33] Affidavit of Ms Javier sworn 15 April 2020, paragraph 3.
[34] Affidavit of Ms B Bowes sworn 20 May 2020, paragraph 4.

CONTRIBUTIONS

An assessment of contributions is “holistic” in nature.[35] It is nevertheless of assistance to consider that evidence of contributions in the manner as set out below to provide some structure to the task.
[35] Dickons & Dickons [2012] FamCAFC 154, [24].

Commencement of Cohabitation

Neither the Applicant nor First Respondent owned any assets of significance at commencement of cohabitation in May 2006, save that, each had some minimal savings. They resided upon cohabitation in rental property. The Applicant was employed at EE Company in the marketing department. He was later promoted to a general manager position at FF Company. His income receipt was not before the Court in evidence. The First Respondent was employed as a manager by TT Company earning an income of approximately $52,000 per annum. Her income was applied toward furnishing the rental property. The Applicant’s income went toward their living expenses. Both accrued savings.

During Cohabitation

In September 2008, the Applicant and First Respondent purchased the former matrimonial home, the Suburb E property, for the sum of approximately $310,775 together with stamp duty and associated costs. The First Respondent contributed approximately $40,000 from her savings, and the Applicant approximately $45,000 from his savings. The balance of the purchase price was funded by way of mortgage advance secured by mortgage registered to the Westpac Bank. The property was registered in the sole name of the Applicant. He later refinanced the mortgage with the ANZ bank. The parties lived in the former matrimonial home from 2008, until separation in December 2017. Thereafter the Applicant remained in occupation until settlement of the sale of the property in late 2020 or early 2021.
Following the parties’ marriage, the First Respondent’s father gave to the wife a P Company shareholding (valued at approximately $8,000) which remains in the asset pool to this day. That shareholding was advanced for the benefit of the child X, in anticipation of her birth.
In 2011, the Applicant and First Respondent purchased through L Pty Ltd ATF the K Trust, an entity controlled by the Applicant, the business ‘GG Company’ for the purchase price of $220,000.[36] The Applicant, in October 2013, re-named the business F Pty Ltd.[37] F Pty Ltd was a waste-management business in the Location VV area.[38] The Applicant gave oral evidence that he and the First Respondent were developing F Pty Ltd to, in addition, offer other services.[39]
[36] Affidavit of Ms Javier sworn 15 April 2020, paragraph 135.
[37] Affidavit of Ms Javier sworn 15 April 2020, paragraph 135.
[38] Affidavit of Ms Javier sworn 15 April 2020, paragraph 135.
[39] Transcript of proceeding dated 21 July 2020, page 148 at lines 30-35.
From around the time of purchase of F Pty Ltd in 2011, the business operated from the real property situate at and known as G Street, Suburb H in the State of Victoria (‘the Suburb H property’).[40] The First Respondent agreed in her oral evidence that the securing of the Suburb H property by she and the Applicant was critical to the planned expansion of F Pty Ltd.[41] As such, in 2012, the Applicant and First Respondent agreed to purchase through L Pty Ltd ATF The M Trust (‘L Pty Ltd’), an entity controlled by the Applicant, the Suburb H property. The purchase of this property was to obtain a freehold from which the F Pty Ltd business could expand its operations. The purchase price was approximately $310,000. The Applicant and the First Respondent paid only a ten percent deposit.[42] The Applicant’s oral evidence was that the “majority”, and/or “at least [$]250,000-odd”,[43] of the remaining purchase price (approximately $279,000) was funded by a second tier financier, HH Bank.[44] The contract was a vendor terms contract with settlement occurring some 3 years later, namely, in 2015.
[40] Transcript of proceeding dated 21 July 2020, page 148 at lines 30-35.
[41] Transcript of proceeding dated 10 August 2020, page 77 at lines 10-15.
[42] Transcript of proceeding dated 21 July 2020, page 148 at lines 35-45.
[43] Transcript of proceeding dated 21 July 2020, page 148 at lines 45-50.
[44] Transcript of proceeding dated 21 July 2020, page 77 at lines 25-30; page 148 at lines 45-50.
In the period between 2012 and late 2015, on the Applicant’s evidence, construction works were carried out on the Suburb H property. In 2012, it was a vacant block of land. No sewerage was then connected to the site. Planning permits were required to be obtained by the Applicant in order to construct a factory on the site. The site had first to be excavated. The purpose was to make the property fit for the purposes of the business. The Applicant initially estimated the capital costs of such construction works in that period were approximately $500,000. That evidence subsequently was altered by him to describe the sum of $500,000 to be the costs of the total construction works, including the preparatory works. That was an amount not conceded by the First Respondent. Despite the Applicant having knowledge of this for an extended period, no evidence was provided by the Applicant at any time to verify any costs expenditure by him during the period between 2012 and 2015, and the construction period which followed. No building appeared on the site between 2012 and 2015. Any preparatory works which may have occurred were not substantiated by relevant documentary evidence. The Applicant’s oral testimony was not credible. Subsequently, the First Respondent became aware of a “shed” being built by the Applicant on the Suburb H property, with the estimated cost contained in the Building Permit issued on 6 June 2016 being $160,000. The 2018 financial statements of the K Trust (being the relevant associated entity of the Applicant), included the cost of a factory building at $133,651. The evidence of the Applicant as to any expenditure by him during the period 2012 to 2015 was grossly insufficient to establish as a fact that expenditure as claimed by him, was indeed incurred by him. The necessary documentary evidence to make out his case to the necessary standard of proof was entirely absent. Some preparatory work may have been carried out. The source of the funds available to carry out any works was not disclosed by the Applicant beyond being income earnt by the Applicant from the F Pty Ltd business, and the use of a line of credit available to the Applicant and the First Respondent. Clearly, until late 2015, the source of the funds was not from the Second Respondent. Her advances to her brother did not commence until February 2016 on her evidence, that being accepted by the Court.
Throughout the period from 2011 until separation, the Applicant was primarily responsible for the development; running; and maintaining of F Pty Ltd and often worked long hours. He worked hard. The First Respondent assumed primary responsibility for the child X during the Applicant’s work hours, with some assistance from her family from time to time.[45] The First Respondent had continued to work in some capacity until 2012, when she resigned from her employment as a consequence of her pregnancy.[46] Thereafter, the parties adopted traditional roles: the Applicant as the sole income earner and provider of financial support for the family; and the First Respondent as the primary caregiver to X upon the child’s birth in 2013, with the responsibility to perform all homemaking tasks.[47]
[45] Affidavit of Ms Javier sworn 15 April 2020, paragraph 136.
[46] Affidavit of Ms Javier sworn 15 April 2020, paragraph 137.
[47] Affidavit of Ms Javier sworn 15 April 2020, paragraphs 137 and 138.

Loans from the Applicant’s Sister, the Second Respondent

On 3 February 2016, on the evidence of the Applicant and the Second Respondent, the Applicant borrowed from his sister the sum of $55,000. On 10 March 2016, there was a further advance of $42,000. It is the Applicant’s evidence that he discussed such loan advances with the First Respondent, such that she had complete knowledge as to his receipt of those funds. The First Respondent denied any such discussions took place. Her evidence was that she had no knowledge of any monies ever advanced by the Second Respondent to the Applicant. The Court accepts the evidence of the First Respondent in respect of these matters. Nowhere in the considerable affidavit evidence of both the Applicant and Second Respondent was it alleged by either of them that the First Respondent had knowledge of the loans alleged, nor was it alleged that the First Respondent had even referred to any such loans or acknowledged the loans to be bona fide debt that had to be brought into account. When put to her in cross-examination, that she had actual knowledge of some part of the debt, she denied such knowledge. The Applicant’s evidence as to this matter was simply not credible and nor was the Second Respondent’s in circumstances where at trial she alleged for the first time, it being an allegation absent in her affidavit material, that she had made a cash payment to the Application in the presence of the First Respondent and/or about which the First Respondent had knowledge. The Court finds that the First Respondent had no knowledge of any loans advanced by the Second Respondent and/or C Pty Ltd to the Applicant personally and to L Pty Ltd. No loan was ever advanced to the First Respondent, as conceded by the Second Respondent, and as is obvious on the evidence of the Applicant.
The First Respondent disputes the existence of the loans made by the Second Respondent to the Applicant. The Applicant swore an affidavit on 15 January 2018 in support of his Initiating Application. No reference was made in that affidavit to any monies owing to the Second Respondent. Similarly, the Financial Statement sworn by the Applicant on 15 January 2018 made no reference to any loans owing to the Second Respondent. The First Respondent became aware of the alleged loans on 1 May 2018 when her former solicitor received a letter from the Applicant’s solicitor which asserted that C Pty Ltd loaned $300,000 to the M Trust in August 2016 and a further $100,000 to the Applicant in November 2016. A further affidavit sworn by the Applicant on 10 May 2018, which detailed various financial matters, made no reference to any monies owed to the Second Respondent.
For the purposes of two of the three loans alleged, the Second Respondent had her business adviser, Mr R, draft two loan agreements. Both the Second Respondent and Mr R’s evidence is accepted as given to the Court as to these matters. Mr R was forthright in the giving of his evidence. The Applicant first sighted these agreements on 25 March 2016 when produced to the Applicant by Mr R, who had travelled to the Suburb H property for the purpose of having the Applicant sign the documents. No signatures had been affixed to the undated draft loan agreements at that time. The loan monies to be advanced were to be advanced by C Pty Ltd being a company of which the Second Respondent was and remains the sole director and sole shareholder. The purpose for which the then unspecified quantum of borrowings was to be advanced in respect of one draft loan agreement between C Pty Ltd and L Pty Ltd, was to fund capital improvements to the Suburb H property including construction of a factory; fit out; concreting and associated costs to comply with environmental contamination regulations as set out in the evidence of the Second Respondent. The Applicant concurred stating in his affidavit affirmed 17 April 2020 that at his request, the Second Respondent had lent funds to L Pty Ltd to finance capital improvements, specifically, construction of the factory and fit out at the Suburb H property.
The Applicant signed both loan agreements given to him by Mr R on 25 March 2016, as witnessed by Mr R. The copies signed by the Applicant had the date of the loans, not completed, and the amount of the principal sum advanced, in each, not completed.
On 22 July 2016, and in Sydney, the Second Respondent signed, as witnessed by Mr R, one of the loan agreements signed by the Applicant on 25 March 2016. By the time of her signing that draft loan agreement the Second Respondent had provided further (the earlier advances being stated to be by C Pty Ltd to L Pty Ltd) loan advances to L Pty Ltd being:
(a) on 12 May 2016, $35,000; and
(b)on 9 June 2016, $73,500.
A total of $205,000 had thus, by 9 June 2016 been advanced through the Second Respondent’s corporate entity C Pty Ltd to the Applicant’s corporate entity L Pty Ltd. It was the evidence of the Applicant and the Second Respondent that on 15 August 2016, the Second Respondent through C Pty Ltd advanced a further sum of $95,000 to L Pty Ltd, whilst the Second Respondent was on a trip to Melbourne. All of these advances, totalling $300,000, were in cash. The loan agreement signed by the Applicant and the Second Respondent was then dated 15 August 2016. The principal sum advanced was inserted as $300,000.
Whilst the Second Respondent filed a Response to Initiating Application on 21 May 2020, seeking three orders from the Court, which included recovery of this above described advance of $300,000, the Second Respondent, during the course of the proceeding, abandoned the orders sought by her in paragraphs 1 and 3 of that Response. She did so because L Pty Ltd had been placed in liquidation by the Applicant in July 2019. The advances totalling $300,000 became a matter for the liquidator. Likewise the sum of $202,330, claimed by the Second Respondent to have been advanced from C Pty Ltd to L Pty Ltd for the payment of various of L Pty Ltd’s expenses and various of the Applicant’s expenses, including his living and legal expenses, post the separation of the Applicant and First Respondent and up until March 2020, became also a sum not pursued in this litigation by the Second Respondent who conceded no order should be made in respect of advances by her to the Applicant’s corporate entity L Pty Ltd and/or to the Applicant personally for his post separation expenses. The Second Respondent conceded in her evidence that the sum of $202,330 was not a liability of the First Respondent. This left the Second Respondent seeking only one order, namely:
2. An order that the Applicant pay to the Second Respondent on behalf of C Pty Ltd the sum of $100,000 together with all accrued interest calculated in accordance with a loan agreement dated 17 November 2016 made between C Pty Ltd and the Applicant (which loan is secured against the property known as D Street, Suburb E Victoria and being the land contained in Volume … Folio …), in full settlement of the said loan between C Pty Ltd and the Applicant.
Such order sought was not against the First Respondent but rather the Applicant who was personally liable. Additionally, the Second Respondent conceded that the monies advanced totalled $90,000 not $100,000. In closing submissions the Second Respondent added an interest component to seek a total sum of $113,374. That advance arose in the circumstances as described in the following paragraph.
Sometime after 15 August 2016, the Applicant again requested further borrowings from the Second Respondent. The Second Respondent agreed to advance, through C Pty Ltd, another $90,000 to the Applicant personally by way of a loan to “support ongoing drawings and to supplement his income during the period November 2016 to 30 June 2017.”[48] On 8 November 2016, the Second Respondent signed a further loan document again witnessed by Mr R. The $90,000 advance was made in part prior to the Second Respondent’s signing of the loan document. The Second Respondent paid to the Applicant the sum of $50,000 in September 2016 whilst in Melbourne and by way of cash and on 17 November 2016, the Second Respondent provided to the Applicant a further sum of $40,000 in cash. The loan agreement was then dated the 17 November 2016. The Applicant acknowledged this debt as owed by him to the Second Respondent. Pursuant to the loan agreement, C Pty Ltd was entitled to register a mortgage and/or caveat against the Suburb H property and against the Suburb E property to secure repayment of the loan. The Second Respondent arranged for a caveat to be lodged against the Suburb E property.
[48] Affidavit of Ms B Bowes affirmed 29 June 2018, paragraph 8(b).
None of the monies by then advanced, totalling approximately $390,000, or “nothing of a significant amount”[49] in the words of the Applicant, were deposited to any bank account by the Applicant. In particular, to the V Bank trading account of the F Pty Ltd business.
[49] Transcript of the proceedings on 20 July 2020, page 67, line 3.
Upon completion of the construction of the factory on the land, as funded or partially funded, by the Second Respondent, although unknown by the First Respondent, the Applicant and First Respondent were able to borrow a further sum of $680,000 in January 2017 against the security of the Suburb H property which had been re-valued by the new lending body, the ANZ bank. From those further borrowings, the Applicant and First Respondent had available to them a residual amount of $423,000 after payment out of their earlier borrowings from HH Bank. They transferred approximately $100,000 of those funds into their home loan account to reduce the then mortgage encumbrance over the Suburb E property, and the Applicant retained the balance. The Applicant provided the Second Respondent with no funds in repayment of the loans advanced to him and/or L Pty Ltd by C Pty Ltd because on the Applicant’s evidence, the Second Respondent had not sought any repayment at that time. Of course the First Respondent knew nothing of any loan. On the Second Respondent’s evidence, interest has continued to accrue on the outstanding loan liabilities. It is not clear on the evidence what the Applicant did with these surplus funds of $323,000. That is an important consideration.
The Applicant did not tell the First Respondent how he dealt with the totality of such surplus funds.
Throughout the period in which the Second Respondent advanced the sum of $90,000 to the Applicant, the Applicant’s business, as operated through his company, was trading fairly well, as evidenced by those of the company’s V Bank account statements before the Court in evidence. That trading account was always in credit. It is not obvious on the evidence that the Applicant needed to borrow a further $90,000 from his sister in the latter part of 2016. He had his ongoing income, and the expectation that he would shortly be able to refinance. Additionally, the Applicant, on the 24 November 2016, obtained a further mortgage, in the sum of $67,507.99, as known to both the Applicant and the First Respondent. On the 6 January 2017, the Applicant and First Respondent purchased the Motor Vehicle 1 for use by the First Respondent. Approximately $25,805 of those mortgage loan monies were applied for that purpose. The remaining $41,702.99 funds were retained by the Applicant and applied by him as he saw fit. All throughout 2016, when the Applicant was receiving monies from the Second Respondent, the Applicant had funds available to him in the V Bank business trading account and he in fact withdrew cash amounts for his purposes from that account.
Just what the Applicant did with the various funds available to him was not disclosed by him in the proceeding. Rather, there were vague assertions and a complete lack of clarity as to the family’s financial position. It is likely that some of the redraw monies obtained by him went to assist in the purchase of one vehicle for the F Pty Ltd business. There were considerable borrowings obtained by the Applicant to complete the purchase of a second vehicle.

MONIES OWED BY APPLICANT’S FATHER

The First Respondent in her Trial Affidavit at paragraph 115 conceded that during the marriage, the sum of $120,000 was deposited by Mr N Bowes, the Applicant’s father, in the parties’ home loan offset account. It is common ground between the parties that between 2 to 9 January 2018, the sum of $60,000 was paid by the Applicant to Mr N Bowes from joint funds. The Applicant told the First Respondent that such funds remained outstanding to Mr N Bowes. It was the First Respondent’s evidence that Mr N Bowes was overpaid by his son with monies available to the Applicant.

At paragraph 116 of her Trial Affidavit, the First Respondent annexed an email from Mr N Bowes dated 10 July 2016, indicating that the amount claimed to be at that time owing to Mr N Bowes was $90,000. The First Respondent did not concede that that figure was accurate on that day. It was simply an assertion made by the Applicant and maintained by him at trial. At paragraph 118 of her Trial Affidavit, the First Respondent deposed “in about September 2017 Mr Bowes told me that the funds to Mr N Bowes had been repaid in full”. The Applicant denied such a conversation took place and he cross-examined the First Respondent to that effect. The First Respondent maintained her position. Despite being informed on numerous occasions, by the First Respondent’s solicitor, and by the Court, that it was essential for the issue to be determined that Mr N Bowes attend at Court to provide independent and documentary evidence as to this issue, and to be cross-examined by Counsel for the First Respondent, the Applicant failed to call evidence from his father. He further failed to call evidence from his father as to his more recent and inconsistent claim in the running of the matter that his father had deposited monies in his V Bank account. The Court draws an inference that the evidence of Mr N Bowes would not have assisted the Applicant’s case. The Court finds that Mr N Bowes was given a sum of $60,000 by his son following separation as way of removing funds from the assets available for division between the parties.
The Court finds the sum of $60,000 was given to Mr N Bowes following separation being monies belonging to the Applicant and the First Respondent and that at that time, no monies remained owing to Mr N Bowes by the Applicant and/or the First Respondent.

POST-SEPARATION

The First Respondent left the former matrimonial home with her car, some items of clothing, some personal belongings and clothing for X.
The First Respondent has had to borrow money from her family members to pay for her and X’s living expenses including: food, groceries, toys, books, clothing, half school fees and extra-curricular activities. The First Respondent’s mother has paid for X’s dance lessons. Her brother paid for her moving costs to enable her to move out of the former matrimonial home. Her father has paid for the cost of X’s dog, veterinary bills, dog food, household and grocery bills and much of the First Respondent’s legal bills. The First Respondent’s father has also lent her his motor vehicle and paid for the associated expenses.
Following separation and on or about April 2018, an offer was made to purchase F Pty Ltd together with the Suburb H property as a going concern for $1.3 million. Subject to certain conditions being met, the First Respondent did not oppose the Applicant accepting the offer.
On 5 July 2018, the Federal Circuit Court of Australia ordered, relevantly, that:
…
14.The Applicant and First Respondent forthwith do all acts and things necessary to sell the business F Pty Ltd and the freehold at G Street, Suburb H (“the business and freehold”) with terms and conditions to be agreed save that the sale price for the business and freehold is no less than $1,300,000.
15.In the alternative, the Applicant and First Respondent forthwith do all acts and things necessary to facilitate a partial sale of the business F Pty Ltd and the freehold at G Street, Suburb H (“the business and freehold”) with terms and conditions to be agreed save that the value attributed to the business and freehold is no less than $1,300,000.
16.The Applicant do all acts and things necessary to provide to the First Respondent with all relevant information pertaining to the possible sale and to facilitate a partial sale of the business and the freehold including copies of all correspondence and to keep her updated of developments.
17.Forthwith upon written request from the Applicant’s solicitors, the First Respondent shall, at her expense withdraw the caveat lodged against the property situated at G Street, Suburb H at or immediately prior to the settlement of any sale or partial sale of the business.
18.Upon settlement of the sale or partial sale of the freehold and business, each of the husband and wife be paid the sum of $50,000 as part property settlement with the balance to be held on trust by the husband’s solicitor pending written agreement of further order.
Pursuant to the interim orders made 5 July 2018, the parties were to each receive $50,000 from the sale or partial sale of the business and freehold. The Applicant engaged an accountant in Sydney to prepare the sale documents, rather than his usual accountants, JJ Accountants. The Applicant asserted that he would incur liabilities of approximately $140,000 for the sale, including preparation costs, taxation liability and anticipated CGT. There were no documents provided to the First Respondent by the Applicant to verify those anticipated expenses as claimed by him.
On or around December 2018, contracts for the sale of F Pty Ltd and the Suburb H property were simultaneously exchanged. Under the business sale contract the purchaser had agreed to purchase F Pty Ltd for $480,000. This included plant and equipment. Under the contract for the sale of the Suburb H property, the purchaser had agreed to purchase the property for $820,000.
Both contracts were expected to be completed simultaneously. However, the First Respondent had lodged a caveat over the Suburb H property. She subsequently refused to withdraw the caveat in the context of a dispute between the parties as described hereafter. The Applicant argued that the actions of the First Respondent caused the Applicant and First Respondent to lose the benefit of the expected F Pty Ltd sale proceeds causing a loss to them of $186,000. The First Respondent claimed the Applicant’s actions had caused such loss.
The context of the dispute was that the First Respondent had difficulty reaching an agreement with the Applicant as to the application of the sale proceeds of F Pty Ltd and the Suburb H property due to the Applicant’s lack of financial disclosure and transparency regarding both sales.
On 6 December 2018, the had Court ordered, relevantly, that:-
3.The Applicant pay the Respondent’s costs thrown away on scale in the sum of $4,786, such monies to be set aside from the $50,000 due to be paid to the Applicant pursuant to order 18 made 5 July 2018.
Settlement of the freehold and the business had been scheduled to take place on 21 January 2019. The Applicant claimed to have done all things necessary to facilitate the sales and settlements including:
(a)transfer of business names;
(b)transfer of domain names;
(c)the obtaining of two roadworthy certificates for the company vehicles at a cost of $15,837.72;
(d)the advising of key outstanding Creditors as to of the sale and settlement date; and
(e)the requesting of further payment extensions from KK Company, LL Company, NN Company, MM Company and the ANZ Bank, on the provision that all overdue accounts would be paid out in full at settlement.
Settlement of the business and the freehold did not take place on 21 January 2019, which the Applicant claims was due to the First Respondent failing to withdraw her caveat, and her otherwise refusal to agree to payments to be made as sought by him from the proceeds of the sales.
On 27 February 2019, and on application of the Applicant who was seeking the First Respondent withdraw her caveat lodged, the Court ordered, relevantly, that:-
1.The parties forthwith do all such acts and things and sign all such documents as might be necessary to comply with paragraphs 17 and 18 of the Orders of 5 July 2018 as amended by paragraph 3 of the Orders of 6 December 2018.
2.Within 7 days, the Applicant provide the following documents to the Respondent:
(a)Bank statements for the ANZ mortgage account for the period 01.12.2016- to current date.
(b)A written explanation as to the Applicant's application of any funds withdrawn from the ANZ mortgage account relating to the business and/or the Suburb H property from 01.12.2016 to current date, including supporting documentation to verify the application.
(c)All documents relating to the roadworthiness costs owed, including a receipt for the amount paid by the purchaser.
(d)All documents relating to the KK Company debt owed.
(e)All documents relating to the “F Pty Ltd - Final Costs on Sale (The Bowes Family Trust) (Settlement Date)” in the sum of $25,000, including an explanation as to these costs.
(f)An itemised copy of all invoice/s issued to the Applicant by OO Lawyers.
(g)An itemised copy of all invoice/s issued by PP Company relating to “Business Sale Advice”.
(h)Up to date bank statements for all accounts in the Applicant's joint or sole name, or in which in he has an interest to current date, including but not limited to the following:
i.ANZ home loan statement #…81 for the period 03.01.2018 to current date.
ii.ANZ Advantage Cheque Statement #…57 of the period 09.05.2018 to current date.
iii.Westpac Bank Platinum Card statements #…99 for the period 16.10.2018 to current date.
iv.National Australia Bank Classic Banking #…37 for the period 10.12.2014 to current date.
v.National Australia iSaver #…78 for the period 10.10.2014 to current date.
vi.V Bank statements #…47 (J Pty Ltd) for the period 04.06.2016 - 03.12.2017 and 04.09.2018 to current date.
vii.ANZ Business Saver Statement #…18 (L Pty Ltd) for the period 22.12.2017 - 18.01.2018, 21.04.2018 - 20.05.2018 and 22.06.2018 to current date.
…
4.Within 7 days, the Applicant shall pay First Respondent’s costs of this day in the sum of $5,000.
Following the making of the above orders, the Applicant continued to refuse to provide sufficient information as to his proposal for the distribution of sale proceeds at settlement. The Applicant proposed to repay a number of debts from the sale proceeds, which the First Respondent disputed, on the basis of a lack of disclosure from the Applicant including but not limited to amounts totalling $84,937.14 as follows:
(f)$20,000 to PP Group;
(g)$20,700 to U Company;
(h)$44,237.14 to the Applicant’s accountant for anticipated CGT liabilities.
The Applicant persisted in his demands despite the orders of 5 July 2018 providing for any surplus funds as therein described to be held on trust on behalf of the parties.
Settlement of the Suburb H property sale was eventually effected on 13 March 2019. The cheque directions that were paid out by agreement of the parties totalled $723,418.15. The First Respondent received the sum of $59,836.80 and the Applicant received the sum of $30,503.93 (a shortfall of $9,620.00) as firstly there was not enough money left from the settlement for the Applicant to receive the full amount due to him, and secondly the Applicant had a costs liability to meet, as owing to the First Respondent.
Despite the Applicant’s ongoing refusal to provide full and frank disclosure in relation to settlement, the First Respondent had withdrawn her caveat against the Suburb H property so settlement could proceed.
Settlement of the sale of F Pty Ltd could, and should, also have taken place, but did not. Rather, settlement of the sale of the business was deferred by the Applicant and his solicitor until the 20 March 2019. That was a fact unknown to the First Respondent at that time, whose consent to this delay was not sought.
Following settlement of the sale of the Suburb H property, the solicitors for the First Respondent received into their trust account the sum of $59,836.80 on the First Respondent’s behalf. This amount included a part property settlement of $50,000 pursuant to the Orders made on 5 July 2018, plus the sum of $9,786 (and Pexa fees) for 2 x Cost Orders made by the Court against the Applicant on 6 December 2018 and 27 February 2019.
The First Respondent remained unaware of the failure to settle the sale of F Pty Ltd until after she issued an Application in a Case on 29 March 2019 to find out what had happened to the sale of the business and/or the proceeds of sale. At 7:33pm on 28 March 2019, the Applicant’s solicitors advised the First Respondent’s solicitors by email correspondence, relevantly: “Please note settlement of the business failed. The contract was terminated by the purchasers…” This was the first and only notice given to the First Respondent that the settlement of the sale of the business had not occurred.
Orders were made on 29 March 2019, providing for, amongst other things, the Applicant and his solicitor to provide documents relating to the sale of F Pty Ltd and affidavits from both as to why the sale of the business had failed. There was also an order that costs be reserved in favour of the First Respondent of $5,000 and the First Respondent seeks now that these costs be paid by the Applicant. Such costs order is clearly made out on the evidence. The Applicant’s treatment of the First Respondent in respect of this matter fell well short of his obligations to her. The need to issue the Application in a Case arose because of the Applicant’s failure to do that which he should have done.
The Applicant failed to comply with the Orders of 29 March 2019 and the First Respondent was required to issue an enforcement Application on 6 June 2019. That Application came before the Court on 19 June 2019. On 18 June 2019, the Applicant and his solicitor filed affidavits pursuant to the Orders of 29 March 2019. On 19 June 2019, her Honour Judge Small transferred the matter from the Federal Circuit Court to the Family Court of Australia and vacated the then trial date in October 2019. Her Honour fixed the First Respondent’s costs at $1,500 and reserved them to trial. The First Respondent now seeks those costs. They likewise should be paid by the Applicant. An enforcement application should never have been necessary. The conduct of the Applicant was simply dishonest.
Approximately a month after the sale of the business had “fallen through” in the Applicant’s terms, the Applicant disposed of assets via W Company without attempting to engage a business broker to resell the business. All of the plant, equipment and motor vehicles were disposed of by the Applicant. Despite repeated requests from the First Respondent via her solicitor, the Applicant has failed to provide proper disclosure about the disposal of assets.

EVIDENCE OF MR Q JAVIER

The evidence of the First Respondent’s brother, Mr Q Javier affirmed on 15 April 2020 was unchallenged and is a narrative that the Court accepts.
Mr Q Javier owned a business named “QQ Consultants”. His agency offered promotional services to his clients.
The Applicant approached Mr Q Javier on a number of occasions during the marriage to seek Mr Q Javier’s assistance in building and promoting, F Pty Ltd. In April 2015, the Applicant asked Mr Q Javier to build a website for the business. He designed and built the website. In about August 2015, the Applicant asked Mr Q Javier to assist him with his Google AdWords account to promote the marketing, sales and promotion of his business. Mr Q Javier created an account for the Applicant who had ownership and authorisation of that account. In about September 2017, the Applicant asked Mr Q Javier to build a quoting system for his business. Mr Q Javier offered to build the quoting system for $2,500. The Applicant agreed and Mr Q Javier completed the work. The amount of $2,500 plus GST as owing to Mr Q Javier remains unpaid by the Applicant. Mr Q Javier’s company policy was that if invoices remained unpaid after 90 days where there was no promise to pay and/or the customer was not contactable, then the relevant website was taken down and a notice displayed stating “Contact QQ Consultants to resolve this issue”.
Following the parties’ separation, the Applicant alleged that Mr Q Javier committed “cybercrime” by hacking into his business email account and re-directing email enquiries to another email address. The Applicant asserted that this resulted in a decrease in business profitability and in his income. Mr Q Javier denied such allegations as made by the Applicant and his denial is accepted by the Court.
On 18 March 2019, as his invoice remained unpaid, Mr Q Javier suspended the Applicant’s business website as per the company policy. He had waited until this date as he understood that settlement of the sale of the Applicant’s business had occurred. He was not aware that the settlement did not proceed prior to that date. At no time has Mr Q Javier ever been contacted by the Applicant, his lawyer or the purchaser of the business about payment of his outstanding invoice, or how the website could be reactivated.
The Applicant’s allegation that the wife’s brother removed the website, which made the business unable to be sold as a “going concern” is not accepted by the Court.[50] It is an allegation without any substance at all.
[50] Transcript dated 21 July 2020, page 80, lines 14-15.

SECTION 75(2) MATTERS

Both the Applicant and First Respondent are in good health. The First Respondent has re-partnered with a Mr RR but she does not reside with him. She has a limited income earning capacity by virtue of her engagement in home duties and absence from the paid workforce since 2012.[51] The Applicant pays no child support to the First Respondent.[52] Historically he has paid $6 a week and $8 a week and been irregular in meeting such obligation. He has had a relationship with Ms SS since October 2018, but does not reside with her. At trial, both the Applicant and First Respondent were in receipt of Centrelink benefits.
[51] Outline of Case by the First Respondent filed 25 April 2020, page 12.
[52] Transcript of proceeding 20 July 2020, page 25 lines 30 to 35; Financial Statement of Mr Bowes affirmed 19 April 2020, page 6; Financial Statement of Ms Javier sworn 15 April 2020, page 3.
The First Respondent is the primary carer for the child X.[53] X currently spends each alternate weekend and one overnight in the other week with the Applicant during school terms, with additional time spent during school holiday periods and other special days.[54]
[53] Affidavit of Ms Javier sworn 15 April 2020, paragraph 8; Outline of Case by the wife filed 25 April 2020, page 12.
[54] Final (Parenting) Order made by Hartnett J on 27 April 2020, order 3.
The First Respondent holds a Bachelor’s Degree and Certificate IV qualification. She currently assists, from time to time, her brother Mr Q Javier, in the operation of his business. Her evidence was that she receives no payment from him. Rather, she is gaining experience and able to put such work that she does on any CV prepared by her for future employment. The First Respondent has also worked, for no income, in a number of start-up businesses of her brother. The First Respondent has an income earning capacity albeit diminished by her years of being engaged in the home and by her care of X. X is now at school and the First Respondent is able to engage in paid employment in the future.
The child support assessed amount for the Applicant in the period 27 April 2020 to the 7 October 2021 is $0. The Court finds on the evidence that the Applicant is likely to pay minimal child support to the First Respondent for the support of X in the years to come. He does however pay one half of X’s public school fees. The Applicant additionally has purchased one pair of shoes for X in the 2 years and 8 months since the separation of the parties.

CONCLUSION

What orders satisfy s 79(2) of the Act having considered all of the above factual matters?
If the First Respondent takes the totality of the sale proceeds of the Suburb E property, she receives a sum of $255,876 approximately. From that sum must be deducted a total sum of $8,5000 which is owed to her by the Applicant as found by the Court in respect of costs payments ($6,500 total earlier reserved) and the Applicant’s just contribution to one- half of the updated Family Report ($2000) as paid by the First Respondent in the first instance. Thus, the monies received by the First Respondent are $247,376. Added to this sum is the retention by the First Respondent of the $16,000 car sale proceeds; $4,960 bank account monies; the $8,000 shareholding as entirely contributed by the First Respondent’s father; and the First Respondent’s receipt of $50,000 by way of part property settlement, a total sum of $326,336.

The Applicant would then be left with his motor vehicle and the totality of funds he has had available to him which have largely been unaccounted for. These include the overpayment of monies to his father Mr N Bowes; the monies held in his various bank accounts; the monies received by him by way of a Sale of Business assets and by way of his extension of the mortgage secured by the Suburb E property on two occasions as described in these reasons; and the part property payment received by him of $40,340 approximately. A total sum exceeding $375,000.
The Applicant made a repayment to the First Respondent’s mother in the sum of $50,000 at around the time of separation which the Court accepts must have come from some of the monies as accessed by the Applicant and described in these reasons. Likewise, the Applicant paid out a company vehicle loan in the sum of $53,150 most probably from the monies received by him from W Company. These sums would reduce the amount otherwise received by him, making a receipt of approximately $271,850. But nothing about the Applicant’s evidence was entirely clear and nor was it transparent. The Applicant was not a credible witness about the totality of his financial dealings. What had happened to all of the assets of F Pty Ltd was not disclosed by the Applicant. During cohabitation, a second company vehicle was purchased for $75,000 plus stamp duty from monies in the Applicant’s bank accounts and/or his associated entities. It is probable that these monies were monies obtained from the extension of mortgages over the Suburb E property. But the whereabouts of the company vehicle is unknown.
The Applicant’s financial dealings with his sister were also unsatisfactorily explained as was his application of those funds. What is clear is that the First Respondent had no knowledge as to any loans existence. The monies sought by the Second Respondent to be paid to her are sought from the Applicant solely. That is appropriate on the facts of the matter. The Applicant was not financially truthful in his dealings with the First Respondent, and nor with the Second Respondent.
The Applicant claimed the First Respondent had caused them to lose $186,000 by virtue of the failed sale of F Pty Ltd. He provided no proof as to that figure. The sale did not proceed because of his actions and the inability of both he and the First Respondent to agree as to the disbursement of any sale proceeds. The Applicant’s conduct throughout the entire period relevant to the sale was obstructive and unreasonable. But neither can be solely blamed and such claimed sum is not an asset not a liability of the Applicant and the First Respondent.
The contributions and s 75(2) matters favour the First Respondent. In particular a considerable weight is given to the First Respondent for her necessary support of the child X into the future years. Offsetting that however to a limited extent is the Applicant’s liability to repay his debt to the Second Respondent.
Leaving the Applicant with no monies owing to the First Respondent, and the First Respondent and Applicant with some monies, in greater share to the First Respondent, though in what percentage not able to be identified as a consequence of the Applicant’s failure to make proper disclosure, is a just and equitable outcome as between the parties. It also provides for the Applicant to have an ability to pay his debt owing to the Second Respondent.
The Court concludes that pursuant to Section 90AE of the Act, the Applicant be solely liable for the debt to his sister, the Second Respondent.
The Second Respondent presented as a reliable and honest witness save in the instance as described in paragraph 38 above. The evidence is clear that she did all that she could to assist the Applicant. She provided significant amounts of money and her personal time in that regard. But she did not include the First Respondent in any of her dealings with the Applicant. Nor did she make any payments to the First Respondent. When funds were available to pay out the loan made personally to the Applicant, she did not seek recovery. The Applicant retained his funds obtained. The First Respondent was kept entirely in the dark.
The Court has a broad discretion in making orders pursuant to section 79 of the Act which bind a third party (section 90AE). However, the Court can only make an order under section 90AE (1) or (2) of the Act if section 90AE(3) is satisfied. That section is as follows:
(1)In proceedings under section 79, the court may make any of the following orders:
(a) an order directed to a creditor of the parties to the marriage to substitute one party for both parties in relation to the debt owed to the creditor;
(b) an order directed to a creditor of one party to a marriage to substitute the other party, or both parties, to the marriage for that party in relation to the debt owed to the creditor;
(c) an order directed to a creditor of the parties to the marriage that the parties be liable for a different proportion of the debt owed to the creditor than the proportion the parties are liable to before the order is made;
(d) an order directed to a director of a company or to a company to register a transfer of shares from one party to the marriage to the other party.
(2)In proceedings under section 79, the court may make any other order that:
(a) directs a third party to do a thing in relation to the property of a party to the marriage; or
(b) alters the rights, liabilities or property interests of a third party in relation to the marriage.
(3) The court may only make an order under subsection (1) or (2) if:
(a) the making of the order is reasonably necessary, or reasonably appropriate and adapted, to effect a division of property between the parties to the marriage; and
(b) if the order concerns a debt of a party to the marriage--it is not foreseeable at the time that the order is made that to make the order would result in the debt not being paid in full; and
(c) the third party has been accorded procedural fairness in relation to the making of the order; and
(d) the court is satisfied that, in all the circumstances, it is just and equitable to make the order; and
(e) the court is satisfied that the order takes into account the matters mentioned in subsection (4).
Section 90AE(4) of the Act is as follows:
(4) The matters are as follows:
(a) the taxation effect (if any) of the order on the parties to the marriage;
(b) the taxation effect (if any) of the order on the third party;
(c) the social security effect (if any) of the order on the parties to the marriage;
(d) the third party's administrative costs in relation to the order;
(e) if the order concerns a debt of a party to the marriage--the capacity of a party to the marriage to repay the debt after the order is made;
Section 75(ha) of the Act also requires the Court to consider:
“…the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant.”
The Court has considered those matters legislatively required to be considered by it. In particular, the orders the Court shall make, satisfy s 90AE(3) of the Act. The Court is satisfied that the Applicant has the capacity to meet the debt which he owes to the Second Respondent. The Court is satisfied the Applicant has some cash resources undisclosed, and that he will have both income and an earning capacity that will enable him to meet his obligation to the Second Respondent, in particular in circumstances where he has no child support assessed amount currently due. The Applicant will not suffer undue hardship in the performance of this obligation.

I certify that the preceding ninety-eight (98) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hartnett.

Associate:

Dated: 17 March 2021