Boyle and Fragnito and Anor
[2020] FCWA 107
•29 JUNE 2020
JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA
ACT: FAMILY LAW ACT 1975
LOCATION: PERTH
CITATION: BOYLE and FRAGNITO & ANOR [2020] FCWA 107
CORAM: TYSON J
HEARD: 16, 17 and 20 APRIL and 12, 13 and 14 MAY 2020
DELIVERED : 29 JUNE 2020
FILE NO/S: PTW 5412 of 2017
BETWEEN: MS BOYLE
Applicant
AND
MR FRAGNITO
First Respondent
AND
FF WOODS PTY LTD
Second Respondent
Catchwords:
FAMILY LAW – PROPERTY –– Dispute as to duration of relationship – Where the husband has failed in his duty to provide full and frank disclosure – Where the husband has unilaterally expended significant funds post separation - Where the Court adopts a robust approach, given the husband’s deliberate non-disclosure - Assessment of contributions – Where the husband made greater initial contributions - Assessment of s 75(2) factors – Case turns on its own facts
Legislation:
Family Law Act 1975 (Cth)
Category: Not Reportable
Representation:
Counsel:
| Applicant | : | Mr Bannerman |
| First Respondent | : | Mr Beckerling |
| Second Respondent | : | Did not participate |
Solicitors:
| Applicant | : | Bannerman Solicitors |
| First Respondent | : | Beacon Family Law |
| Second Respondent | : | Did not participate |
Case(s) referred to in decision(s):
Bevan & Bevan (2013) FLC 93-545
Biltoft & Biltoft (1995) FLC 92-614
Briese & Briese (1986) FLC 91-713
Chang v Su (2002) FLC 93-117
Chorn v Hopkins (2004) FLC 93-204
Dickons & Dickons (2012) 50 Fam LR 244
Elias and Elias (1977) FLC 90-267
Fotia and Welsh [2013] FCWA 112
Holland & Holland (2017) FLC 93-798
Jabour & Jabour (2019) FLC 93-898
Kannis & Kannis (2003) FLC 93-135
Kennon v Kennon (1997) FLC 92-757
Khademollah and Khademollah (2000) FLC 93-050
Kowaliw & Kowaliw (1981) FLC 91-092
Livesey v Jenkins [1985] 1 All ER 106
M and M [1998] FamCA 42
Morrison and Morrison (1995) FLC 92-573
Reichstein & Reichstein [2006] FamCA 1422
Stanford v Stanford (2012) 247 CLR 108
Trevi & Trevi (2018) FLC 93-858
Weir & Weir (1993) FLC 92-338
Yeates (as executor for Mr Yeates) & Yeates [2013] FCWA 117
TYSON J:
WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT – PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED
IT IS NOTED that publication of this judgment by this Court under the pseudonym Boyle and Fragnito has been approved by the Family Court of Western Australia pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
1[Ms Boyle], the wife, and [Mr Fragnito], the husband, are unable to agree on orders by way of alteration of property interests, following the breakdown of their marriage.
2The proceedings were complicated by a number of matters:
(a)The parties have entered into a number of failed investments, including being the victims of fraudulent scams, which has reduced the property now available for division.
(b)There is a dispute about the duration and nature of the parties’ relationship.
(c)The wife says the husband has failed to provide full and frank disclosure of his financial circumstances and he has undisclosed assets and income. She alleges the husband has failed to comply with orders of the Court, destroyed or disposed of property since separation and embarked upon a deliberate course of conduct, designed to decrease the value of the parties’ property. The husband says the wife has stolen money. Each party denies the allegations of the other.
(d)The dispute as to the available property for division, including differences as to what amounts should be notionally added back into the property pool, compounded by allegations of non‑disclosure and waste, impeded any prospect of a settlement and propelled the case to trial.
3These proceedings are governed by the Family Law Act 1975 (Cth). There is no assumption that parties have a right to have their property divided, or that either has the right to property that is fixed. There is a raft of issues in dispute between the parties, which require determination, which include:
(a)What is the duration of the parties’ relationship?
(b)What is the identity and value of the parties’ property? In view of the parties’ property, is it just and equitable to make any order altering those interests?
(c)If I find it is just and equitable to make an order, then I must:
a.Assess each parties’ contributions, up until the time of trial.
b.Consider whether there should be an adjustment in favour of either party, to take into account the parties’ ages, their future capacity to work, the disparity in their respective incomes, assets and superannuation entitlements, and what is a reasonable standard of living in the circumstances.
c.Determine an outcome that is just and equitable to both parties.
WHAT ARE THE BRIEF FACTS?
4The husband was born [in] 1953. He is 67 years old. The wife was born [in] 1958. She is 61 years old.
5The parties met in 2002, when the husband was 49 years of age and the wife was 44 years of age. The wife says the parties commenced living together in September 2002, while the husband says it did not occur until either 2004 or 2005.
6Each party has been previously married, and has children from those marriages. Each came to the marriage with assets. The husband’s initial financial contributions were greater than the wife’s. There are no children of the parties’ relationship.
7The husband was self-employed as a [carpenter] through [FF Woods Pty Ltd] [(“FF Woods”)]. He was the sole director and shareholder. [In mid] 2005, the wife was issued two shares in FF Woods. [In early] 2009 she was appointed as the company secretary and [six weeks later], she was appointed as a director of FF Woods.[1]
[1] Exhibit 15 – FF Woods’ company search, pages 57 – 61.
8During the relationship, the wife established [ABC] Enterprises Pty Ltd [(“ABC Enterprises”)], as trustee for the [Boyle-Fragnito] Family Trust. The company traded as [Boyle’s] and [Boyle’s Newsagency & Gallery]. The husband and wife were joint directors of ABC Enterprises.
9[In] November 2005, the parties married.
10In April 2008 the parties separated, but continued to live under the one roof at [Property A]. They reconciled in August 2008.
11There is a dispute about the date of separation. The wife says final separation occurred on 1 July 2017, when she vacated Property A. The husband says the parties did not resume a marital relationship after August 2008, but continued to live together. Since separation, the husband has remained at Property A. The wife has lived with family and friends, until she obtained rental accommodation.
12After separation, the husband resigned as a director of ABC Enterprises.[2]
[2] Exhibit 15 – letter of the husband and certificate of resignation dated 19 July 2017 pages 131 – 132.
13The wife obtained a Family Violence Restraining Order for her protection against the husband. The VRO was resolved on the basis of a conduct agreement. While the wife asserted she had been the victim of family violence, she did not suggest her contributions had been made more arduous as a result of the husband’s conduct.[3]
[3] In terms in terms described by the Full Court in Kennon v Kennon (1997) FLC 92-757.
14On 20 July 2017 the husband lodged documentation with ASIC, which backdated the wife’s removal to 2009 as a director and secretary of FF Woods, and converted her shareholding to unpaid. The husband appointed his daughter, [Ms Z], as the company secretary. He caused FF Woods to issue an additional 90,000 shares, in return for a “debt reduction of $90,000 of the director’s loan…and a separate placement of 8,000 ordinary fully paid shares for $8,000 cash”.[4]
[4] Exhibit 15 – share certificate dated 19 July 2017 page 223 and resolution dated 19 July 2017 page 224.
15In July 2017 the husband registered the business name FF Woodwork [FF Woodwork]. He opened a bank account in his name, trading as FF Woodwork, the statements for which were sent to Ms Z’s home.[5] Deposits were made almost immediately from clients of FF Woods, including [Company A] and [Company B], into FF Woodwork’s account. The husband closed the account in September 2017.
[5] Exhibit 24 – [Bank B] [Business account B].
16In August 2017 the wife commenced proceedings. When the husband filed his responding documents, he asserted the wife “is not and has never been a director of [FF Woods]”.
17On 31 August 2017 various injunctions were made against the husband, to preserve the parties’ property, preventing the commencement of claims in any civil jurisdiction without notice to the wife, and restraining the husband from behaving in a threatening, intimidating or offensive manner towards the wife.
18On 1 September 2017 [Mr X] issued an invoice to FF Woods for professional services for $2,000,[6] [Mrs X] issued an invoice for $1,500[7] and Ms Z issued an invoice for bookkeeping and secretarial services for $2,500.[8] The husband claimed FF Woods was unable to pay the invoices and on 21 September 2017, it issued shares in lieu of cash.[9] Ms Z received 2,500 shares, Mr X received 2,000 and Mrs X received 1,500. The husband then retained 98,004 shares in FF Woods, being 94 % of the issued shares.
[6] Exhibit 23 - [Mr X] & Co invoice XXX.
[7] Exhibit 23 - [Company C] invoice – the invoice referred to Mrs X as being the CEO, which she denied.
[8] Exhibit 23 - Ms Z invoice.
[9] Exhibit 15 – FF Woods’ resolution dated 6 September 2017 page 238.
19In September 2017 Ms Z opened a [Bank A] [Business account A], in her sole name.[10] In October 2017, the husband cancelled registration of FF Woodwork and Ms Z commenced trading as FF Woodwork. Ms Z began issuing invoices in the name of FF Woodwork in October 2017, which were paid into her Bank A account.
[10] Exhibit 32 Bank A Business account A.
20Neither the husband nor Ms Z gave any evidence in chief about FF Woodwork. The husband denied working for Ms Z or FF Woodwork.
21On 19 January 2018 the husband suffered an injury to his arm and deposed he had been unable to work since that date. He successfully made an insurance claim and received $3,200 each month, on the basis he was assessed as permanently disabled. The insurance payments ceased after 12 months.
22It has since emerged that between October 2017 and 27 June 2018:
(a)The husband quoted for jobs and Ms Z issued invoices, at his direction, in the name of FF Woodwork. The husband performed the same work, as he had done through FF Woods, including for the same core clients, such as Company A, Company B and [Company D];
(b)Invoices for the husband’s services were rendered in the name of FF Woodwork and paid into Ms Z’s bank account; and
(c)FF Woodwork’s only income was from work performed by the husband.
23The husband eventually admitted, in cross-examination, he had been working while in receipt of insurance payments, which he had not disclosed to his insurer.
24On 6 September 2017, FF Woods sold its shares in [Company E], [Company F] and [Company G][11] and received $96,231. The sale was in breach of the injunctions made on 31 August 2017. The husband later transferred in two separate transactions, $62,454 and $11,886 from FF Woods to his Bank B Pensioner account.
[11] Exhibit 15, Sale Confirmation Tax Invoices, pages 139 – 141.
25Mr X, on behalf of FF Woods, commenced proceedings against the wife in another jurisdiction. On 7 September 2017, FF Woods appointed Mr X as an alternate director, backdated to 15 August 2017.[12] FF Woods’ minutes recorded the husband was not in good health and it was “likely that he is not a fit person to act for the company in litigious matters in person and wishes to appoint an Alternate Director to attend court on his behalf”. FF Woods appointed Mr X “to represent the company in any litigious matters as directed by [Mr Fragnito] the director”.[13] Mr X consented to the appointment, on those terms.[14]
[12] Exhibit 15- FF Woods’ company search, page 60.
[13] Exhibit 15 – FF Woods’ minutes of directors meeting dated 15 August 2017 page 212.
[14] Exhibit 15 – letter Mr X to FF Woods dated 15 August 2017 page 213.
26On 19 October 2017 the husband provided an undertaking not to vary the structure of FF Woods, sell, dispose, charge, encumber or otherwise deal with the assets of FF Woods.
27On 4 December 2017 orders were made by consent for the husband to pay the wife $25,000.
28After separation, the wife had no access to joint funds, which the husband had withdrawn. She was unable to work as an [artist], because she no longer had access to the workshop or her equipment, at Property A. Despite interim orders to allow the wife to collect those items, there were delays in her being able to do so. There was also a dispute about the stock and supplies which were eventually made available to her, which the wife says were largely missing, damaged or destroyed.
29The wife sought interim spousal maintenance, which was opposed by the husband. The presiding Magistrate was satisfied the wife was unable to adequately support herself and she had reasonable weekly needs of $576.[15] The presiding Magistrate observed a number of deficiencies in the husband’s sworn financial statement, but concluded she was not satisfied he had the capacity to pay periodic spousal maintenance.[16] Her Honour observed that “may well change upon the provision of further evidence”.[17]
[15] Paragraphs 29 and 30 of the Reasons delivered 11 January 2018.
[16] Paragraph 34, of the Reasons delivered 11 January 2018.
[17] Paragraph 34, of the Reasons delivered 11 January 2018.
30Since separation, each party has withdrawn their superannuation entitlements. In July 2017 the husband withdrew $11,000 from his [Super Fund A account] and the wife withdrew $10,000 from her [Super Fund A account]. In 2018 the wife withdrew a further $5,000 and the balance of $1,501 from Super Fund A and the husband withdrew $103,091 and $8,623 from Super Fund A and $1,734 from his [Super Fund B account].
31On 9 March 2018 Mr X on behalf of FF Woods commenced two further claims against the wife, in another jurisdiction. On 9 April 2018 Mr X filed an additional two claims against the wife. All five claims have been stayed by the other jurisdiction, pending determination of these proceedings.[18]
[18] Order 11 June 2018.
32On 23 March 2018 further injunctions were granted restraining the husband from dealing with the proceeds of sale of the shares owned by FF Woods. Mr and Mrs X and Ms Z were joined as parties to the proceedings, in their capacity as shareholders and officeholders in FF Woods. In July 2018 FF Woods was joined as a party to the proceedings.
33On 20 April 2018 the husband was restrained from transferring, spending or otherwise dealing with the sums withdrawn from his Super Fund A entitlements, apart from $5,000.
34On 21 June 2018 Ms Z resigned as the secretary of FF Woods. In July 2018 Ms Z cancelled the business name FF Woodwork.
35In March 2019 FF Woods resumed issuing invoices and receiving payments. In September 2019 Mr X ceased to be an alternate director of FF Woods.
36On 28 October 2019, upon the application of the wife, an order was made applying the mandatory cross-examination ban.[19] The husband then ceased to instruct his solicitors, and he was granted funding under the Commonwealth Family Violence and Cross-Examination of Parties Scheme.
[19] Pursuant to s 102NA(2) of the Family Law Act 1975 (Cth).
37On 23 December 2019 orders were made by consent for the removal of Ms Z, and Mr and Mrs X as parties to the proceedings. The husband was required to pay $2,000 to Mr X, $1,500 to Mrs X and $2,500 to Ms Z, and each of them were required to transfer their shares in FF Woods to the husband.
WHAT IS AGREED?
38The wife will retain [Boyle’s Counselling Services], [BC Services], [Boyle’s Consulting Services], ABC Enterprises and the Boyle-Fragnito Family Trust. The husband will retain FF Woods. Each party will indemnify the other in relation to their respective entities, excluding any capital gains tax arising from the sale of Property A. Each party will retain their cars, savings, contents, personal possessions and superannuation entitlements. The husband will cause FF Woods to discontinue all claims in another jurisdiction against the wife.[20]
[20] Minute of Agreed Orders handed up in Court on 14 May 2020.
39The wife will pay $3,095 to the husband, to reimburse her share of various costs.[21]
WHAT ARE THE PROPOSALS OF THE PARTIES?
[21] 50% of the valuation and mediation fees.
40The wife seeks orders in terms of her minute handed up in Court on 14 May 2020. In summary, she seeks Property A be sold and she receive 65% of the net proceeds of sale, with the husband to retain the balance. She seeks the husband, in his capacity as a director of FF Woods, cause the payment from Property A to be offset against the loan FF Woods owes to him and a corresponding reduction in his loan account. She seeks the husband return her diaries, stamp albums and documents relating to ABC Enterprises.
41The husband seeks orders in terms of his amended minute handed up in Court on 16 April 2020. He proposes to pay to the wife such sum to provide her with 25% of the net property of the parties’. If he fails to do so, he then proposes Property A be sold. He seeks the wife return [his jewellery].
WHAT IS THE EVIDENCE THAT IS RELIED UPON?
42The wife relies upon her affidavits filed 22 November 2018 and 6 February 2020, her financial statement filed 11 October 2019 together with the affidavits of [Mr W], [Ms V], [Ms U], and [Ms T] each filed 4 November 2019, [Ms S] and [Ms R] filed 15 October 2018 and [Mr Q] filed 5 February 2020.
43The husband relies upon his affidavit filed 23 November 2018, his financial statement filed 6 April 2020 together with the affidavits of Ms Z filed 25 October 2018, 23 November 2018 and 6 December 2019, [Mr P] filed 26 October 2018 and 2 December 2019, and the affidavits of Mr X and Mrs X each filed 29 November 2018.
44Mr Q and Mr P were not required for cross‑examination. I accept their unchallenged evidence.
WHAT IS THE CREDIBILITY OF THE PARTIES AND WITNESSES?
45In this case, there was a high level of bitterness and animosity between the husband and wife. Each party has a poor view of the other. Their views of one another infected their evidence and at times, resulted in their evidence not being balanced. I also consider the husband’s witnesses’ held strong views about the wife and her claim, which clouded their evidence.
46In some respects, each party tailored their evidence in an attempt to advance their own case. That was true in terms of their respective evidence as to their initial contributions, and the nature of their relationship following reconciliation. The husband and wife were both anxious to emphasise their own contributions, at the expense of acknowledging the contributions of the other.
47I gained the impression some assertions were made by the wife because she considered they would assist her case, rather than because they were her real recollections. For example:
(a)Her sworn evidence created the impression she contributed $241,000 from the sale of [Property B]. That was false and three times what she received by way of net proceeds of sale.[22]
(b)The husband gave the wife [jewellery], which he described as a family heirloom. It is clear the jewellery has great sentimental value to him. The wife says she no longer has the jewellery. She gave detailed evidence she removed the jewellery before she underwent surgery in 2017, placed the jewellery on her bedside table and had not seen it since. When the wife was confronted with a photograph of her wearing the jewellery, sometime after her surgery, she said she had made a mistake.[23] I was not convinced that was the case. I have doubts about the veracity of her evidence in this regard.
[22] Exhibit 11 – Ascot Settlement Statement for [Property B].
[23] Exhibit 9.
48The wife deposed that following the parties’ reconciliation in 2008, they were in a loving and committed relationship. I do not accept that description and I consider her evidence on this topic was misleading.
49In August 2008, the wife wrote to [the financial planner] who had a mortgage over Property A:
I am, with my husband… A co-director an equal shareholder in [FF Woods Pty Ltd] which is the registered proprietor of the family home in which he and I are living at [Property A]…
The marriage between my husband and me appears to be breaking down. I wish to place on record with you that, as a co-owner of [FF Woods Pty Ltd], I do not agree to any extension of the amount secured by the mortgage in your favour…[24]
[24] Exhibit 6 – letter from the wife to [the financial planner] dated 7 August 2008.
50On 1 April 2009, the wife consulted a family law firm and attempted to lodge a caveat on Property A.[25] The wife initially relied on her statutory declaration of the same date, in which she disclosed owning 50% of the issued shares in FF Woods. The caveat was rejected. The wife obtained further legal advice and was told it was preferable if she were also a director of FF Woods. On 28 April 2009 she executed an amended statutory declaration, which referred to her recent appointment as a director of FF Woods.[26] The wife’s parents paid her legal costs associated with the caveat.
[25] Exhibit 7.
[26] Exhibit 6.
51The wife claimed her appointment as a director,[27] was made at the husband’s request. I consider that highly unlikely and prefer the husband’s evidence, that the wife asked to be appointed and he agreed. He did so, without knowledge of her correspondence, or of her efforts to register the caveat.
[27] On 31 March 2009, but submitted on 6 April 2009.
52Part of the wife’s motive to be a director of FF Woods, was to secure her interests. In addition, it enabled her access the company’s bank accounts, which at that time, had over $85,000 in available funds.
53The wife’s conduct was deceptive and secretive. It demonstrated her willingness to behave in a calculating and strategic manner, to protect her perceived interests. The wife did not disclose to the husband the registration of the caveat. He only discovered that fact after separation.[28]
[28] Exhibit 15, statutory declaration of the husband in support of withdrawal of the caveat, dated 29 August 2017, page 326.
54The husband was not an impressive witness. The evidence demonstrates he has been dishonest and prepared to lie, to mislead and deceive the wife, the Court and it would appear, various third parties. He struggled to answer many questions. At times, he was evasive, defensive and combative in cross-examination.
55There were a number of aspects in which I did not accept the husband’s evidence. I did not consider he was a credible or reliable witness. For example:
•The husband deposed that he was retired and his only income was an aged pension, following his injury in January 2018.[29] Contrary to his sworn evidence, the husband continued to work, which he admitted only after he was presented with a number of documents, many of which were obtained pursuant to subpoenas and some of which were produced during the course of the trial.[30] The husband’s evidence in this regard did him no credit. It demonstrated his dishonesty.
•The husband denied the wife had ever been appointed as a director or secretary of FF Woods. The ASIC records confirmed her appointments in March and April 2009.[31] The husband suggested the wife’s appointments were not properly made. It is well established that when a party has made representations of fact to third parties and has gained advantage from doing so, it is open to the Court in subsequent proceedings to decline to accept from that party, evidence which contradicts those representations.[32] It is always a matter of discretion, depending on the facts and circumstances of each case. The parties conducted their affairs on the basis the wife was a director of FF Woods until July 2017. That included the payment of directors’ fees and wages to the wife. I reject the husband’s evidence, which appeared to be an attempt to recreate history, to suit his present purposes.
•On 31 August 2017 orders were made restraining the husband from disposing, exchanging or transacting or directing a third party to do the same, all of the shares in which he and/or FF Woods had an interest. The husband was in court when the order was made, together with Ms Z, Mr and Mrs X and the husband’s friend [Mr N]. The husband maintained he did not hear the Magistrate make those orders and he had sold the shares to protect FF Woods from potential losses. I do not accept the husband’s evidence, which was neither credible nor plausible. The husband was aware the wife was seeking that order, which he objected to. He addressed the Court on that date. In breach of that order, FF Woods sold the shares on 6 September 2017.
•On 31 August 2017 injunctions were made restraining the husband and/or FF Woods from “filing any civil claim paperwork in relation to any property relevant to the parties’ asset pool relevant to these proceedings without providing 21 days’ notice” to the wife. Mr X, as an alternate director of FF Woods, was required to act in accordance with the husband’s directions. The husband was vague and unclear about the extent to which he gave instructions to Mr X and his level of knowledge about the proceedings. I am satisfied the husband instructed Mr X to pursue the wife, to recover monies he alleged she owed. I reject his suggestion Mr X acted independently.
•The husband claimed the wife had never paid for her shares in FF Woods. I reject his evidence, given the share certificate, signed by the husband as a director of FF Woods, confirmed the wife had paid $1 for each issued share on 1 June 2005.[33] The ASIC records confirmed the wife’s shares were fully paid.
•He alleged the wife stole $18,000 from him, each year, from 2007 until 2017. He claimed he raised his concerns with her on a few occasions, he was extremely angry and upset and he wanted no further financial relationship with her. None of those allegations were included in his evidence in chief, nor put to the wife in cross-examination. The husband explained he elected not to do so, because he would “never get the money back” and “it wouldn’t make any difference”. From 2007, the parties maintained a joint Bank C account and the wife had access to the husband’s credit card. FF Woods distributed income to the wife from 2013. In my view, the husband’s claims about theft only arose after separation in July 2017. It was also inconsistent with FF Woods’ payments to the wife, with the husband’s consent.
•In 2009 the husband says he borrowed $30,000 from Ms Z, which he invested in [Company H]. At the time, Ms Z was in her 20s. The husband was successfully trading as FF Woods, had investment property, shares and superannuation entitlements. I do not consider the evidence of the husband or Ms Z was credible. I consider it more likely, consistent with the wife’s evidence, that Ms Z held money on behalf of the husband, to protect it from the wife. That is also consistent with the husband and Ms Z’s actions in respect of FF Woodwork, in addition to the evidence of Ms R.
[29] Financial statement filed 6 April 2020.
[30] For example, Exhibit 22 FF Woods Invoices dated 26 March and 29 May 2019.
[31] Exhibit 7 – appointed director on 31 March 2009, lodged with ASIC on 6 April 2009.
[32] Elias and Elias (1977) FLC 90-267.
[33] Exhibit 20 – Share certificate – dated 1 June 2005, affixed with the company seal.
56Overall, I did not consider the husband was a credible witness. In various aspects, I have rejected his evidence.
57Ms T is the wife’s adult daughter. Her evidence was not seriously challenged in cross-examination. I found her to be a truthful witness.
58Ms U is the wife’s sister. She was strongly supportive of her sister and holds a poor view of the husband. Ms U denied receiving $18,000 from the wife in July 2017. She maintained she had lent the wife $20,002 since separation, from her own property settlement, which she expects to be repaid.
59[Ms O] is the wife’s sister. She and her husband have lent money to the wife, which she seeks be repaid. I consider she gave her evidence in a direct and frank manner.
60Mr W was previously friends with the husband and wife. He maintains a close relationship with the wife, but denies they are in a relationship. Mr W gave his evidence in a straight-forward and down to earth manner.
61In his affidavit, Mr W was critical of the husband, referring to occasions when he said the husband disconnected the gas and plumbing at Property A. He conceded the husband did so when he intended to conduct renovations. Mr W’s evidence in this regard was selective, and potentially misleading.
62To his credit, Mr W readily described the husband as an “extraordinarily talented tradesman”, who was generous. He denied the husband was mild-mannered and described him a passionate man, who spoke his mind. I consider he gave his evidence honestly.
63Ms V is the wife’s mother. She was frank and candid in her evidence, which I accept. She described a close and friendly relationship with the husband during the parties’ marriage, and her shock when she learnt of their separation. Ms V could not recall ever seeing the husband angry, apart from when he came to her home on Saturday 24 June 2017. She said the husband was agitated and threatening, resulting in her and her husband obtaining a VRO for their protection. She and her husband have lent money to the wife, which they require to be repaid. She and her husband are both in their 80s and in receipt of an aged pension. Ms V says and I accept they have assisted the wife when asked, but they expect her to repay the loan.
64Ms S attended to the tax affairs for the parties and their entities, between January 2010 and 1 September 2017. She is an accountant, a registered tax agent and self-managed superannuation fund auditor. I found Ms S to be direct, professional and helpful in giving her evidence, which I accept.
65Ms R was married to the husband’s son Mr P. They have since separated. She swore an affidavit in support of the wife. She and Mr P borrowed $10,000 from the husband in around May 2013. They received those funds from an account in Ms Z’s name, but said the money belonged to the husband. She gave evidence the husband, and members of his family, openly discussed the fact Ms Z held money for the husband, which the wife was not aware of. She and Mr P repaid the funds to Ms Z’s account. She denied ever being told the moneys were advanced from Mr P’s grandparents to the husband, which were ultimately gifted to Ms Z. I accept Ms R’s evidence, which was not disturbed in cross‑examination.
66Mr X was clearly aligned and strongly supportive of the husband. For the reasons that follow, I do not consider he was a reliable witness.
Firstly, he asserted he had CCTV footage from Property A, which revealed the wife had taken the tin with $18,000 cash shortly prior to separation. He maintained he had not shown the footage to the husband, but had provided it to the husband’s former lawyers. The footage has never been disclosed. Mr X is a private investigator. He agreed the footage would be compelling evidence, which may resolve the dispute as to the issue. His evidence was not convincing. I am not satisfied the footage exists.
Secondly, Mr X clearly dislikes the wife. When the wife sought to inspect the records of FF Woods after separation, Mr X responded, describing her as “the Devils Disciple”, “a Disssolutional, disgruntled and pathetic member of the human race”, who was only concerned with money and who had “failed in every aspect of your life”.[34] He described the wife as a criminal, who was devious and unscrupulous. He was forceful in his criticisms accusing the wife of stealing money from FF Woods to buy the [Chinese] bowls, in circumstances where the payment had been treated in the company accounts as a personal expense, deducted against the directors’ loan accounts. I consider his poor view of the wife coloured his evidence, which was not balanced.
Thirdly, Mr X obtained the wife’s diaries from Property A. He told the wife he had discussed her diaries with “some of the best Solicitors, the best Forensic Accountants and most of all with my good friend [Dr M] one of the world’s best Psychologists”. He claimed to have returned the diaries into the bin at Property A some time ago. I consider that highly unlikely where, firstly, Mr X maintained the diaries were evidence of the wife’s fraud, secondly, he considered the diaries supported the husband, and thirdly, Mr X was asked in another jurisdiction to return the diaries to the wife’s solicitors and refused. I consider it improbable that Mr X returned the diaries to Property A, when Mr X asserted he did not want the husband to see them.
Fourthly, Mr X has not simply stood by passively in his support of the husband. He has commenced five separate causes of action on behalf of FF Woods against the wife. He has attended proceedings before this Court and the husband’s solicitors, to support the husband. He claimed to have spent “days and nights” and “at least 100 hours” reviewing documents to assist the husband. I formed the clear impression he had discussed the evidence with the husband, despite his denials.
[34] Letter from Mr X to the wife dated 28 October 2017, pages 292 and 293 of the wife’s annexure book for trial.
67Mrs X is a private investigator and was friends with both the husband and the wife during the marriage. She no longer has a relationship with the wife and has a negative opinion of her. Mrs X was also supportive of the husband. I consider Mrs X was more balanced than her husband. She explained she had accompanied the husband to Court as his friend and she had assisted him in reviewing paperwork, in the same capacity. She denied being hired by FF Woods and performing any consultancy work, which I accept. She denied wanting to be paid for her assistance. She did not consider the shares in FF Woods which the husband issued to her, to be valuable.
68Ms Z is the husband’s adult daughter. She too is strongly supportive of her father and holds a poor view of the wife. Like Mr X, she has not simply passively supported her father, but instead she has been actively involved. For example, Ms Z, on behalf of FF Woods, made complaints against Ms S, based upon the husband’s view the wife was not a director of FF Woods. The Tax Practitioners Board took no action, noting the ASIC records for FF Woods confirmed the wife was named as a director from 31 March 2009, until she was removed on 20 July 2017 which was backdated to 2009.
69Ms Z has actively assisted her father, in transactions which I am satisfied were designed to hide from the wife, and others, his true financial position. While the husband and Ms Z claimed he worked on a voluntary basis, for the benefit of Ms Z, I consider that highly unlikely. In my view, these arrangements were designed to prevent the wife and the husband’s insurers learning he was working. I did not consider Ms Z was either frank or candid in her evidence. In my view, she was careful and strategic in her responses.
WHAT IS THE LAW?
Property Settlement Approach
70These proceedings are governed by s 79 of the Act. In determining an application for alteration of property interests, I have a wide discretion conferred by the operation of this section of the Act. I must, however, firstly be satisfied it is just and equitable to make an order adjusting the existing property interests of the parties.
71In determining what orders will be just and equitable, the Court’s power is not confined by any “steps” nor any prescribed sequence. I will satisfy the legislative requirements if I identify and value the assets and liabilities of the parties, assess each party’s contributions to the assets, including any assets which have ceased to be owned by the parties, assess the factors in s 79(4)(d) to (g) (inclusive) of the Act, and consider whether the proposed orders are just and equitable.
72I am required to consider the respective contributions of the parties holistically over the whole period to trial. There is no requirement for the entitlements of the parties to be expressed in the form of percentages, nor is a strictly mathematical or accounting approach required. No particular form of contribution by its nature attracts greater weight than any other. There is no requirement for an entirely discrete consideration of the impact of, for example, initial financial contributions, nor that such contributions be quantified at a particular moment in time.
73There is no presumption that, even over the course of a long marriage, the contributions of the parties are to be regarded as having been equal.
Add Backs
74The wife seeks to include notional assets, or what can be referred to as “add backs”. The power conferred by s 79(1) of the Act is to make orders for the alteration of existing interests in existing property.
75It is open to me, in the course of deliberations as to the alteration of interests in existing property, to notionally add back the value of assets which no longer exist, simply as an aid to the considerations necessary to exercise my discretion. By approaching the matter in that way, I am not purporting to create or alter interests in “notional property”. It is the exercise of adding back which is notional and that exercise is no more, nor less, than a device to assist my thinking in exercising my discretion.
76The Full Court has made it clear that add backs are the exception and not the rule. Attention must be paid to the legislative intent of s 117(1) of the Act, in considering issues which arise when parties pay legal fees from assets, which would otherwise have been available for division. Matters of that nature, and issues which arise where there are allegations of waste or unilateral premature distribution of property, may be considered in the exercise of my discretion by making use of the device of adding back, or in a more general sense by reference to s 75(2)(o). A broad brush approach may be taken, provided an analysis is undertaken of relevant sums and their use, where the amounts involved are, in context, significant.
77In M and M [1998] FamCA 42 the Full Court said:
2.11There seems to be no appropriate basis for notionally adding back moneys that existed at separation but which have been subsequently spent on meeting reasonably incurred necessary living expenses. Neither the Family Law Act nor the case law require the parties go into a state of suspended economic animation once their marriage breaks down pending the resolution of their financial arrangements. Parties are entitled to continue to provide for their own support. Whether any expenditure so incurred is reasonable or extravagant is a matter that can be determined by the trial Judge.
78In Kowaliw & Kowaliw (1981) FLC 91-092, Baker J held that for most couples, marriage involved an economic partnership in which both parties should share in the economic fruits of the marriage, although not necessarily equally. Similarly, financial losses incurred by the parties, or either of them during the course of the marriage, should be shared between them, but not necessarily equally, other than in circumstances where one party has embarked upon a course of conduct designed to reduce or minimise the effective worth of the assets, or where one party has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
79In Bevan & Bevan (2013) FLC 93-545, the Full Court observed that notional property:[35]
…which is sometimes “added back” to a list of assets to account for the unilateral disposal of assets, is unlikely to constitute “property of the parties to the marriage or either of them”, and thus is not amenable to alteration under s 79. It is important to deal with such disposals carefully, recognising the assets no longer exist, but that the disposal of them forms part of the history of the marriage – and potentially an important part. As the question does not arise here, we need say nothing more on this topic, save to note that s 79(4) and in particular s 75(2)(o) gives ample scope to ensure a just and equitable outcome when dealing with the unilateral disposal of property.
[35] At paragraph 79.
80The Full Court in Trevi & Trevi (2018) FLC 93-858 said:
[27]The Full Court held in Omacini & Omacini that addbacks fall into "three clear categories": where the parties have expended money on legal fees; where there has been a premature distribution of matrimonial assets; and “waste” or wanton, negligent, or reckless dissipation of assets.
[28]However, the Full Court also made it clear that an addback does not necessarily occur whenever "a party has expended money realised from the disposition of assets that existed as at the date of separation", the Full Court describing such a proposition as "unduly simplistic". An earlier Full Court made the same point, saying that adding back is "the exception rather than the rule".
[29]The fundamental precept that addbacks are exceptional, reflected in the decisions just referred to, also mirrors what has been said in earlier decisions of the Full Court that, for example, "the Family Court must take the property of a party to the marriage as it finds it" at trial. An important parallel proposition is that the parties do not “go into a state of suspended economic animation” after separation. Thus, reasonably incurred expenditure does not usually come within accepted categories of addback.
[30]Two fundamental premises emerge from Omacini and the authorities preceding it. First, "adding back" is a discretionary exercise. When the discretion is exercised in favour of adding back, it reflects a decision that, exceptionally, in the particular circumstances of a case, justice and equity requires it. The second premise is its corollary: in cases that are not “exceptional” justice and equity can be achieved, not by adding back, but by the exercise of a different discretion — usually by taking up the same as a relevant s 75(2) factor. Indeed, it has been said that the latter is “a course which is, perhaps, technically more correct” than adding back to the list of existing interests in property.
(Citations omitted)
Disclosure
81Each party has a clear obligation to provide full and frank disclosure of their financial circumstances, in a timely manner.[36] The duty on each party to disclose documents in their possession or control, to all relevant matters, has been described as “fundamental to the whole operation of the Family Law Act in financial cases”.[37]
[36] Reichstein & Reichstein [2006] FamCA 1422 at [80].
[37] Briese & Briese (1986) FLC 91-713, cited with approval in Black & Kellner (1992) FLC 92-287.
82A failure to disclose relevant documents, will ordinarily give rise to a miscarriage of justice.[38] The duty of disclosure is owed to the Court, and to the other party. The duty encompasses an obligation to disclose all relevant documents, and to disclose all material information.[39]
[38] Morrison and Morrison (1995) FLC 92-573.
[39] Livesey v Jenkins [1985] 1 All ER 106.
83The consequences of the Court finding a party has failed to comply with their disclosure obligations, can result in the Court taking a “robust view” about a party’s financial position.[40] The duty to disclose is absolute, and whether the failure to disclose is wilful or accidental, such failure may support the Court erring on the side of generosity to the party who might otherwise be disadvantaged by the lack of candour.[41]
[40] Chang v Su (2002) FLC 93-117.
[41] Kannis & Kannis (2003) FLC 93-135.
84Where the Court is satisfied there has been material and intentional non-disclosure, it should not be unduly cautious in making findings in favour of the innocent party, as “to do otherwise might be thought to provide a charter for fraud in proceedings of this nature”.[42]
[42] Weir & Weir (1993) FLC 92,338, 79,593.
85It is not the role of the Court to audit a party’s financial records. Each party is required to present evidence as to their financial position in a clear and understandable form.[43]
[43] Fotia and Welsh [2013] FCWA 112 per Walters J, at [96] to [102].
86The Family Law Rules 2004 (Cth) requires each party to provide specific documents by way of disclosure, in certain timeframes. The duty to disclose applies to each relevant document that is, or has been in the possession or under the control, of the relevant party. Rule 13.04 requires disclosure of the income, entities and any disposal of property made by a party that may defeat or deplete a claim, since separation. Further, parties have a duty to give sworn evidence as to their financial circumstances, including a continual obligation to update that evidence as circumstances change.[44]
HAS THE HUSBAND PROVIDED FULL AND FRANK DISCLOSURE?
[44] Rule 13.06.
87I am readily satisfied the husband has failed in his duty to provide full and frank disclosure in a timely manner. There were many examples which support my finding. I highlight the following:
(a)On 31 August 2017, each party was required, within 21 days, to provide documents specified in orders 9 and 10. The husband failed to do so. The wife’s solicitors wrote repeatedly, between August 2017 and July 2018, chasing the husband’s compliance with the order, without any substantive response or disclosure.[45] On 25 July 2018, the husband provided his first disclosure list, nearly a year after the orders were made, and less than a month before the readiness hearing.
(b)The husband’s first financial statement filed 16 October 2017, deposed no assets had been disposed prior to, or since separation. At that time, he had caused FF Woods to sell shares in Company F, Company E and Company G. Contrary to that fact, his financial statement stated the shares continued to be owned by FF Woods.
(c)On 11 January 2018 the Court delivered judgment on the wife’s application for interim maintenance. The Court found there was no source of funds from which the husband could meet the wife’s claim. The Court was not aware of two relevant facts, as a result of the husband’s failure to disclose. Firstly, FF Woods had received $95,000 from the sale of shares, in breach of the Court’s injunction. Secondly, on 8 January 2018 the husband had received $103,091 from his superannuation.
(d)The husband’s financial statement filed shortly prior to trial, stated he was not working. The husband failed to disclose invoices issued by FF Woods since separation, until he was being cross-examined.[46] Some 120 invoices were then provided. The invoices confirmed the husband had continued to work, despite his assertion to the contrary. I am not satisfied the husband’s disclosure of select bank statements and company tax returns, shortly prior to trial, overcame his failure to provide disclosure of the invoices, which were clearly material to his income. The invoices were able to be provided on short notice, which suggests they were readily accessible to the husband.
(e)The husband’s disclosure list[47] revealed the significant delay in the husband providing documents by way of disclosure.[48] Many relevant documents, which the husband had failed to disclose, only came into evidence as a result of the wife’s subpoenas, and the late provision of documents during the course of the trial.[49]
[45] On 28 August 2017, 1 September 2017, 21 September 2017, 9 October 2017, 17 and 18 October 2017, 20 October 2017, 8 November 2017, 10 November 2017, 16 November 2017, 11 December 2017, 19 December 2017, 18 January 2018, 4 April 2018, 12 June 2018, 13 July 2018.
[46] Exhibit 25 - tax invoices for FF Woods dated 8 October 2017 to 8 March 2020.
[47] Exhibit 30 Husband’s disclosure list as at 9 April 2020.
[48] For example, no provision of disclosure until July 2018, the provision of many documents on 16 October 2019 which were clearly in the husband’s possession prior to that time. For example F2.2 – 2.11, F2.13, F2.15 – 2.18.
[49] For example, the tax invoices for FF Woods.
88The wife’s counsel submitted the husband had actively and repeatedly misled the wife, and the Court throughout the course of the proceedings, given his failure to provide disclosure and his false evidence about his financial circumstances. I agree. In these circumstances, I intend to adopt a robust approach, and not be unduly cautious in terms of making findings in favour of the wife.
WHEN DID THE PARTIES COMMENCE LIVING TOGETHER?
89The parties met in 2002. They began a relationship and spent time together at each other’s homes. The wife had rental accommodation, while the husband lived at [Property C].
90In mid-2003 the wife moved to [Country Town A], where she completed a six-month contract. While the wife suggested the husband lived with her half the time in Country Town A, I am not satisfied that was the case. The husband accompanied the wife in July, and held out they were a married couple, to assist her in obtaining better accommodation. The husband visited the wife in Country Town A in August and December 2003, but continued to live and work in Perth.
91The husband financially assisted the wife. He gave her use of a car owned by FF Woods, and access to his credit card. While the husband’s bank account revealed a change of address to Country Town A, I am not persuaded that supports the wife’s claim.[50] It was unclear whether the change in address potentially assisted the wife’s application for accommodation.
[50] Exhibit 18 - husband’s Bank A Altitude Card ending XXXX for the period one September to 13 November 2003.
92The wife returned to Perth in December 2003 and again obtained rental accommodation, in her sole name. The wife then considered working overseas. The husband lived with his parents. The husband’s income tax returns for 2002 to 2005 did not disclose any spouse.[51]
[51] Exhibit 33.
93I accept the parties were in a relationship from late 2002, but not living together. Doing the best I can with the evidence, I am satisfied that by 2004 the parties were in a committed relationship. They spent increased time together, with the husband staying regularly at the wife’s rental property. The parties began operating joint bank accounts some time prior to March 2004. I am unable to make any precise findings, when no statements prior to that date were available.
WHEN DID THE PARTIES SEPARATE?
94The wife says the parties separated on a final basis on 1 July 2017. The husband says they effectively separated in 2008. In my view, the husband’s evidence was designed to support his desired outcome. I accept the parties finally separated on 1 July 2017.
95In late 2007 the wife’s nephew [Mr L] lived with the parties. Mr L’s behaviour was problematic. The husband and Mr L were involved in a physical altercation in December 2007 and the husband was charged with assault. The wife supported the husband during the criminal trial. He was found guilty in early 2008, which led to the parties’ separating in around April 2008. They continued to live under the one roof, at separate ends of the house. The wife moved into “[another bedroom]”, while the husband remained in the main bedroom.
96While the husband says the marriage never really recovered and their relationship fundamentally changed, I do not accept his evidence. The husband conceded after August 2008:
(a)The parties’ financial arrangements continued in the same manner. They maintained and operated joint accounts.
(b)They continued to share household responsibilities.
(c)Each party assisted the other in their respective businesses.
(d)They entered into joint investments.
(e)He caused FF Woods to distribute income to the wife.
97In addition, the husband disclosed the wife as his spouse in his income tax returns until 1 July 2017.[52] The parties continued to live together, including sharing the main bedroom at times. They maintained a sexual relationship. They socialised as a couple, with family and friends understanding they remained in a relationship. They holidayed together in 2016 and 2017.
[52] Exhibits 16 husband’s 2013 – 2016 income tax returns and Exhibit 7 - husband’s 2018 income tax return.
98I accept the altercation between the husband and Mr L caused a significant strain on the parties. After reconciliation, their relationship remained fraught. The husband withdrew $15,000 from the parties’ joint account which he deposited into his sole name. The bank statements for that account were sent to the husband’s parents’ address.[53] When the parties’ reconciled, in August 2008, the husband closed the account.
WHAT IS THE PROPERTY AND VALUE OF THE PARTIES’ PROPERTY?
[53] Exhibit 26 – Bank A [Reward account C] for the period 27 May 2008 to 4 August 2008.
99The parties prepared a joint consolidated schedule of assets, liabilities and superannuation entitlements, which became Exhibit 2.[54] Almost every item in the schedule was not agreed.
[54] I have ignored the cents in view of the size of the asset pool.
100The parties did not agree on the value of various items of personal property, in the possession of the other. That included the husband’s furniture and contents, the wife’s [Chinese] bowls and each party’s jewellery.
101The husband estimates his furniture and contents are worth $500, while the wife says they are worth $5,000. The parties agree the wife’s furniture and contents are worth $5,000.
102The husband estimates his jewellery has a nominal value, while the wife says it is worth $8,000. The husband owns jewellery, which he had prior to the marriage. The husband says the wife’s jewellery is worth $30,000, while she says it is worth $2,000. The husband says the wife’s jewellery includes the family heirloom, which the wife claims she no longer has. The wife has a number of items of jewellery, which the husband bought for her.
103The wife estimates her Chinese bowls are worth $1,500. The husband says they are worth $7,979, which is similar to the paid purchase price.
104A person who asserts a higher value of an asset, carries the onus of proof.[55] The Full Court have confirmed it is wrong, as a matter of principle, to refer to any existing legal or equitable interests in property as “excluded” from consideration in applications for property settlement.[56]
[55] Khademollah and Khademollah (2000) FLC 93-050 at paragraph 32 and Yeates (as executor for Mr Yeates) & Yeates [2013] FCWA 117 at paragraph 92.
[56] In Holland & Holland (2017) FLC 93-798.
105In relation to each of these items, there was no independent evidence of value. Neither party made an application to appoint a Single Expert to value the disputed items. Doing the best I can in the circumstances, I intend to adopt the value asserted by each party, who has the items in their possession. They will be familiar with their condition.
Motor Vehicle A
106The husband says the truck is worthless. The wife considers it is worth $10,000. The wife explained her figure was based on a Redbook appraisal, which she had not disclosed. She conceded her estimate may be too high.
107The truck is nearly 30 years old and has done around 750,000 km. The husband denied Motor Vehicle A was worth $10,000, but said it may be worth $5,000. He has spent over $2,000 in repairs to the truck since separation, which he continues to drive. In light of the husband’s evidence, I intend to include the truck at $5,000.
Motor Vehicle B
108The wife maintained the car was worth $5,000, while the husband says it is worth $100, which is what he paid for it. Motor Vehicle B is in the husband’s possession. His unchallenged evidence is the car requires engine repairs and is not driveable at present. In light of the authorities, and in the absence of any independent evidence as to value to support the wife’s assertion, I intend to adopt the husband’s figure.
Motor Vehicle C
109The husband says the car has no value, it is unregistered and not roadworthy. The wife says it is worth $5,000 but again, led no admissible evidence in support of her asserted value. On the basis of the available evidence, I am not satisfied the car is worth anything.
Interest in the husband’s father’s estate
110The husband’s father passed away shortly prior to trial. The husband does not know if his father had a will and points out his mother survives her husband. The wife has not established, to the relevant standard, the husband has any interest in his late father’s estate.
Wife’s businesses
111The wife operates Boyle’s Counselling Services, BC Services and Boyle’s Consulting Services. They appear to be entities through which she offered [counselling] services. There was no admissible evidence they had property or goodwill of any value. I accept they have no value.
FF Woods Plant and Equipment and wife’s stock
112The wife says FF Woods owns plant and equipment worth $40,000, while the husband says it is worth $3,000. The husband was not cross-examined about his estimate. The husband says the wife has stock worth $54,000 owned by Family Trust, while the wife says it is worth $1,000.
113I intend to adopt each party’s estimate of the respective items. The items are in their possession and they will be aware of their condition.
Legal Fees
114The wife has paid legal fees of $38,487.48 to [Law Firm A].[57] She owes her former solicitors $88,321.34. She has unbilled work in progress with her current solicitors of $31,494.32.[58] The husband has paid legal fees of $140,348.34.[59] Both parties are now funded by the Commonwealth Family Violence and Cross-Examination of Parties Scheme.
[57] Exhibit 1 – Bannerman Solicitor’s cost notification dated 16 April 2020.
[58] Exhibit 1 – Bannerman Solicitor’s cost notification dated 16 April 2020.
[59] Exhibit 4 – Beacon Family Law cost notification dated 16 April 2020.
115The wife sought to include her unpaid legal fees of around $120,000 in the joint schedule. To do so, would result in the husband sharing in the wife’s costs, in the absence of an order and contrary to the provisions of s 117 of the Act. Such an approach would be inconsistent with the established authorities.[60] I decline to do so.
[60] Chorn v Hopkins (2004) FLC 93-204.
116The wife’s costs were met by funds paid by the husband. The husband’s cost notification stated his costs had been met from FF Woods and loans from family. Mr P has lent $15,000 to the husband to pay legal fees. Given my findings about the husband’s lack of credibility, his failure to provide full and frank disclosure, and the steps he has taken to hide his true financial position, I am not confident about the source of the funds he has used to meet his legal fees.
117On the basis the parties agree their paid legal fees should be included in the joint schedule, I have done so. I consider that is appropriate in the circumstances.
Mr X’s car
118The husband reversed into Mr X’s car prior to separation. The husband says he was not insured and the damage totalled $6,600. The wife says the car the husband was driving was insured, through FF Woods. The husband’s evidence was scant and vague. Mr X gave no evidence about the alleged repairs, despite on the husband’s case, they were outstanding and predated the filing of his trial affidavit.
[90] Exhibit 31.
233In closing, the husband’s counsel suggested GST may also be payable on the sale of Property A. There was no evidence to support such a finding. On that basis and given the husband’s lack of candour in terms of his available income post-separation, I am not satisfied that the wife should share in any GST.
234It is in the parties’ interests to facilitate distribution of the proceeds of sale of Property A, in a tax effective manner, noting the husband’s director loans, the intercompany loans and the tax losses in FF Woods.
235I propose each party undertakes a further search to locate the personal items which the other party seeks be returned. If they can be located, then they are to be returned. I am not satisfied it is appropriate to make further orders in that regard.
236In accordance with the parties’ proposals and my determination, the wife will receive or retain the following:
| Furniture and Household Contents | $5,000 |
| Motor Vehicle D | $2,000 |
| Bank D Classic account | $81 |
| Bank D Business account BC Services | $109 |
| Jewellery | $2,000 |
| Chinese bowls | $1,500 |
| Paid legal fees | $38,487 |
| SUB-TOTAL | $49,177 |
| Less Liabilities | |
| HECS Debt | $10,860 |
| Loans from family | $41,339 |
| TOTAL LIABILITIES | $52,199 |
| NET PERSONAL ASSETS | ($3,022) |
| BOYLE-FRAGNITO FAMILY TRUST | |
| Bank D Business Cheque account | $98 |
| Stock on hand | $1,000 |
| TOTAL ASSETS | $1,098 |
| Less Liabilities | |
| Monies owed to FF Woods | $36,000 |
| NET TRUST ASSETS | ($34,902) |
| NET ASSETS (PERSONAL AND TRUST) | ($37,924) |
| CASH PAYMENT FROM HUSBAND | $423,103 |
| NET ASSETS (TOTAL) | $385,179 |
237 The husband will receive or retain the following:
| Furniture and Household Contents | $500 |
| Motor Vehicle A | $5,000 |
| Motor Vehicle B | $100 |
| Bank A Pensioner account | $2,659 |
| Jewellery | nominal |
| Monies owed by FF Woods | $359,069 |
| Paid legal fees | $140,348 |
| TOTAL ASSETS | $507,676 |
| ADD BACKS | |
| Payment to Ms Z | $45,000 |
| Cash withdrawn Bank A Pensioner account | $54,100 |
| SUB-TOTAL | $99,100 |
| NET ASSETS (PERSONAL) | $606,776 |
| FF Woods | |
| Property A | $600,000 |
| Company E shares | $512 |
| Company G shares | $817 |
| Bank A account | $6,218 |
| Plant and Equipment | $3,000 |
| Money owed by ABC Enterprises | $36,000 |
| TOTAL ASSETS | $646,547 |
| Loan from Husband to FF Woods | $359,069 |
| Tax payable | $376 |
| TOTAL LIABILITIES | $359,445 |
| NET ASSETS/LIABILITIES (COMPANY) | $287,102 |
| NET ASSETS (PERSONAL AND COMPANY) | $893,878 |
| LESS CASH PAYMENT TO WIFE | $423,103 |
| NET ASSETS (TOTAL) | $470,775 |
238There are two final matters I wish to raise and hear from the parties. Firstly, given both parties are in receipt of the Commonwealth Family Violence and Cross-Examination of Parties Scheme, it is appropriate for these Reasons to be distributed to Legal Aid.
239Secondly, I refer to the adverse findings I have made in relation to the husband. He has not simply failed to disclose. He has lied on oath. I consider the husband’s actions to be sufficiently serious, to warrant the matter being referred to the Australian Federal Police.
ORDERS
BY CONSENT
1.The First Respondent be restrained and an injunction is hereby granted restraining the First Respondent from causing or allowing the Second Respondent to pursue [the five]…claims [in another jurisdiction] or any other civil claims commenced by or on behalf of the Second Respondent against the Applicant.
2.Within 28 days of publication of these Orders, the First Respondent in his capacity as sole shareholder of the Second Respondent or in his capacity as director of the Second Respondent cause the withdrawal of [the five]…claims [in another jurisdiction].
3.Within 28 days of publication of these Orders, the Applicant and the First Respondent do all such acts and things and sign all such documents, at the Applicant’s cost, as may be necessary for the First Respondent to:
(a)Transfer his shares in [ABC Enterprises Pty Ltd] to the Applicant, or her nominee;
(b)Transfer and otherwise assign to the Applicant any monies or unpaid present entitlement owing to the First Respondent from (and from him to) the [Boyle-Fragnito Family Trust].
4.Within 28 days of the publication of these Orders, the First Respondent execute a Deed (prepared by the Applicant) to remove the First Respondent and as a member of the class of primary and general beneficiaries of the [Boyle-Fragnito Family Trust].
5.The Applicant remain liable for and indemnify the First Respondent and Second Respondent and keep them effectively indemnified, against:
(a)All unpaid liability of, and in relation to, the Applicant and [ABC Enterprises Pty Ltd] of any nature or kind and from all interest, penalties, costs, fines, claims, demands, proceedings thereof, and in relation thereto;
(b)All unpaid liability of, and in relation to, and [ABC Enterprises Pty Ltd], including all liability personally guaranteed by the First Respondent for any liability or obligation of the Applicant and [ABC Enterprises Pty Ltd] and from all interest, penalties, costs, fines, claims, demands, proceedings thereof, and in relation thereto;
(c)All liability which the First Respondent or Second Respondent may otherwise have now or in the future in respect of [ABC Enterprises Pty Ltd];
(d)Actions, suits, causes of action, arbitrations, debts, dues, costs, interest and demands both at law and in equity which the Applicant and [ABC Enterprises Pty Ltd] now or may have against the First Respondent which arise in respect of any act or thing done or omitted to be done by the First Respondent whether by reason of the First Respondent having been a director, officer, shareholder, beneficiary, debtor, creditor or the recipient of any money at any time from [ABC Enterprises Pty Ltd].
6.Any credit whatsoever standing or deemed to be standing, or any other deemed entitlements of the Applicant, at the date of this Order, in any loan or any other accounts of [FF Woods Pty Ltd] vest in the First Respondent.
7.Save as otherwise provided in these Orders, the First Respondent and the Second Respondent release and forever discharge the Applicant and [ABC Enterprises Pty Ltd] from all claims arising under or out of or in relation to the parties’ cohabitation and all other claims, causes of actions and liabilities of whatever nature and however arising, save and except for the First Respondent’s right to enforce or take action to give effect to these Orders.
8.Save as otherwise provided in these Orders, the Applicant release and forever discharge and procure [ABC Enterprises Pty Ltd] to release and forever discharge, the First Respondent or the Second Respondent from all claims arising under or out of or in relation to the parties’ cohabitation and all other claims, causes of actions and liabilities of whatever nature and however arising, save and except for the Applicant’s right to enforce or take action to give effect to these orders.
9.Unless otherwise specified in these Orders and save as may be required in respect of the enforcement of these or any subsequent orders:
(a)The Applicant be solely entitled, to the exclusion of the First Respondent, to all property in the possession or name of Applicant at the date of these Orders and, without limiting the generality thereof, the Applicant retain:
i.her [Motor Vehicle D];
ii.the funds standing to her sole credit in bank accounts;
iii.her jewellery and personal effects (excluding the husband’s [family heirloom]);
iv.her interest in [ABC Enterprises Pty Ltd];
v.her interest in the [Boyle-Fragnito Family Trust];
vi.her business interests, including [Boyle’s Counselling Services] and [BC Services];
vii.the [Chinese] bowls;
(b)The First Respondent be solely entitled, to the exclusion of the Applicant, to all property in the possession or name of First Respondent at the date of these Orders and, without limiting the generality thereof, the First Respondent retain:
i.the [Motor Vehicle A] in his possession;
ii.the [Motor Vehicle B] in his possession;
iii.the funds standing to his sole credit in bank accounts;
iv.his jewellery and personal effects;
v.his interest in the Second Respondent;
(c)The Applicant and First Respondent forego any claims they each have to any superannuation, long service leave, redundancy, retirement, retrenchment, and like benefits, belonging to, or earned by, the other;
(d)Life insurance policies remain the sole property of the named owner;
(e)The Applicant and First Respondent be solely liable for, and indemnify the other against, any liability:
i.encumbering, arising from or related to any items of property to which that party is entitled pursuant to these Orders; and without limiting the generality thereof the First Respondent indemnify the Applicant against all liability of, and in relation to [Property A] including all rates, taxes and like apportionable outgoings;
ii.in that party’s sole name, including, but not limited to, credit cards, loans, lease agreements and charitable commitments.
10.The Applicant in her personal capacity and in her capacity as director of [ABC Enterprises Pty Ltd] and First Respondent and in his personal capacity as director of the Second Respondent shall do all acts and things and sign all documents necessary to give effect to the provisions of these Orders.
AND OTHERWISE
11.For the purposes of these Orders, the following capitalised words have the meaning ascribed and set out in this order:
(a)“[Property A]” means the real property situated at [Property A], registered in the name of the Second Respondent.
12.All previous interim orders be discharged.
13.Within 2 calendar months, the First Respondent pay or cause to be paid to the wife $423,103 less the amount of $36,000 which the husband is to apply to [FF Woods] to discharge in full the debt owing by [ABC Enterprises].
14.In the event the First Respondent fails, refuses, or neglects to comply with Order 13, then the Applicant and First Respondent be appointed as the joint trustees for sale of [Property A], on terms and conditions to be agreed.
15.For the purposes of effecting the sale of [Property A], the parties and Second Respondent do all acts and things including signing all documents necessary to:
(a)Sign all documents including listing authority to enable [Property A] to be listed for sale;
(b)Provide instructions to the real estate agent to progress the sale of [Property A], including adjustments to the listing price and acceptance of sale prices;
(c)Sign all documents to effect the sale and settlement of the sale contract and transfer of land documents; and
(d)Provide a copy of these Orders to any third party where this is reasonably required to give effect to these Orders.
16.To facilitate the sale of [Property A]:
(a)Within 14 days of the time referred to in the preceding order, the Applicant and First Respondent agree to and appoint an agent to market the property for sale and failing agreement, such agent to be appointed by the President of REIWA (“the Agent”);
(b)The Applicant and First Respondent do follow any reasonable recommendations of the said appointed real estate agent as to listing price, sale conditions and sale price;
(c)The Applicant and First Respondent comply with the appointed real estate agent’s reasonable requests to facilitate access to [Property A], including for the purposes of inspections and/or auctions; and
(d)The Applicant and First Respondent have liberty to apply in respect of implementation of this Order.
17.Upon the settlement of the sale of [Property A], the First Respondent in his capacity as director of the Second Respondent, do all acts and things to facilitate the proceeds of sale being applied in the following manner and priority:
(a)To pay the reasonable expenses of the sale including agents commission;
(b)To pay the rates and taxes;
(c)To pay the capital gains tax, if any;
(d)The balance remaining be divided between the parties so as to effect an overall division of the property of the parties as to 55% to the First Respondent and 45% to the Applicant, taking into account the property to be retained by each of them as provided for in paragraphs 236 and 237 of the Reasons for judgment, with the value of [Property A] to be the actual sale price, less selling costs, the payment of any capital gains tax, and the usual adjustments for rates and taxes, and
(i)The Applicant to pay to the First Respondent $3,095 from her share;
(ii)The balance of the Applicant’s entitlements be paid to Bannerman Solicitors Pty Ltd Law Practice Trust account, with First Respondent, in his capacity as director of the Second Respondent, to cause the payment to offset against the loan owed by the Second Respondent to the First Respondent and there be a corresponding reduction in his loan account (hear from the parties); and
(iii)the First Respondent’s entitlements, be paid as directed by the First Respondent.
(e)The Applicant pay to the First Respondent $3,095 from her share and the sum of $36,000 to [FF Woods Pty Ltd] to discharge in full the debt owed by [ABC enterprises Pty Ltd].
18.Pending compliance with Order 13 or settlement of the sale of [Property A], whichever occurs first:
(a)The Applicant be permitted to lodge a caveat against title to [Property A], with the caveat to be removed at her expense upon compliance with Order 13 or settlement of the sale of [Property A];
(b)The First Respondent and the Second Respondent and their servants and agents be and are hereby restrained from transferring, disposing, relinquishing, alienating or further encumbering in any manner whatsoever [Property A], save as is required to comply with Order 13 or settlement of the sale of [Property A]; and
(c)The First Respondent be and is hereby restrained from resigning as director of, appointing any other officeholder and otherwise transferring his shareholding in the Second Respondent.
19.Within 14 days:
(a)The First Respondent or his agents are to use their best endeavours to locate and if located, cause to be delivered to the Applicant or her agents:
i.all documents of or belonging to [ABC Enterprises Pty Ltd], including its brown file containing ASIC documents;
ii.the Applicant’s personal diaries; and
iii.the Applicant’s stamp albums.
(b)The Applicant or her agents are to use their best endeavours to locate and if located, cause to be delivered to the First Respondent or his agents:
i.The husband’s [jewellery].
21.Any credit whatsoever standing or deemed to be standing, or any other deemed entitlements of the First Respondent or Second Respondent, at the date of this Order, in any loan or any other accounts of [ABC Enterprises Pty Ltd] or [Boyle-Fragnito Family Trust] vest in the Applicant.
22.The First Respondent and the Second Respondent remain liable for and indemnify the Applicant and keep her effectively indemnified against:
(a)all unpaid liability of, and in relation to, the First Respondent and the Second Respondent of any nature or kind and from all interest, penalties, costs, fines, claims, demands, proceedings thereof, and in relation thereto;
(b)all unpaid liability of, and in relation to, the Second Respondent, including all liability personally guaranteed by the Applicant for any liability or obligation of the First Respondent or Second Respondent and from all interest, penalties, costs, fines, claims, demands, proceedings thereof, and in relation thereto;
(c)all liability which the Applicant may otherwise have now or in the future in respect of the Second Respondent and without limiting the generality of this clause all tax payable as a consequence of the Applicant having been a shareholder, director, beneficiary, debtor or creditor of the Second Respondent;
(d)actions, suits, causes of action, arbitrations, debts, dues, costs, interest and demands both at law and in equity which the First Respondent and Second Respondent now or may have against the Applicant which arise in respect of any act or thing done or omitted to be done by the Applicant whether by reason of the Applicant having been a director, officer, shareholder, beneficiary, debtor, creditor or the recipient of any money or thing at any time from the Second Respondent, including [the five]…claims [in another jurisdiction]; and
(e)any tax payable arising from the implementation of the provisions of these Orders, excluding the payment of capital gains tax upon the sale of [Property A].
23.The parties do all acts and sign all documents necessary to implement these Orders in the most tax effective manner legally possible.
24.All subpoenaed documents be returned to source.
25.The said proceedings shall otherwise be dismissed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Family Court of Western Australia.
CD
Secretary
29 JUNE 2020
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