Canavan & Dowd (No 3)
[2024] FedCFamC1F 851
•9 December 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Canavan & Dowd (No 3) [2024] FedCFamC1F 851
File number(s): MLC 9945 of 2020 Judgment of: JOHNS J Date of judgment: 9 December 2024 Catchwords: FAMILY LAW – PROPERTY – application for property settlement – where the parties had a short marriage – where the wife has primary care of the child – where the husband continues to live in the former matrimonial home, being a farming property – where the wife has continued to be liable for mortgage repayments in the post-separation period – where the husband has received advances from his current partner in the post-separation period and submits they ought be included in the pool as a liability – where the wife made greater initial contributions – where the wife earned greater income during the relationship – where the husband has not made full and frank disclosure – consideration of section 75(2) factors – where the husband seeks superannuation splitting orders – where the wife submits the court adopt a two-pool approach – division of 62/38 in wife’s favour of non-superannuation assets – order for parties to each retain their own superannuation entitlements Legislation: Evidence Act 1995 (Cth) s 140(2)
Family Law Act 1975 (Cth) ss 75(2), 79
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) Chapter 6
Cases cited: AF Petersens & AF Petersens (1981) FLC 91-095;
Bevan & Bevan [2013] FamCAFC 116; (2013) FLC 93-545;
Chang & Su [2002] FamCA 156;
Chapman & Chapman [2014] FamCAFC 91; (2014) FLC 93-592;
Chorn & Hopkins (2004) FLC 93-204;
Oriolo & Oriolo (1985) FLC 91-653
R v Watson; Ex parte Armstrong (1976) 136 CLR 248;
Stanford & Stanford (2012) 247 CLR 108;
Weir & Weir (1993) FLC 92-338;
Whisprun Pty Ltd v Dixon (2003) 200 ALR 447
Division: Division 1 First Instance Number of paragraphs: 196 Date of last submission/s: 14 November 2023 Date of hearing: 9 – 12 October 2023 & 14 November 2023 Place: Melbourne Counsel for the Applicant: Mr Sweeney Solicitor for the Applicant: Morrison & Sawers Counsel for the Respondent: Mr Tatarka Solicitor for the Respondent: SMR Legal ORDERS
MLC 9945 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS CANAVAN
Applicant
AND: MR DOWD
Respondent
ORDER MADE BY:
JOHNS J
DATE OF ORDER:
9 DECEMBER 2024
THE COURT ORDERS THAT:
1.Within 60 days from the date of these Orders ('the date'), the husband pay or cause to be paid to the wife the sum of $365,856 (“the Payment”).
2.Contemporaneously with Payment to the wife:-
(a)The husband do all such acts and things and sign all documents as may be necessary at his expense to cause the N Bank to release the wife from any personal guarantees provided by her to the N Bank in relation to the Dowd Investment Trust and/or the N Bank Mortgage and/or the overdraft account ('the removal of guarantee').
(b)Subject to compliance with Order 2(a) herein, the wife shall do all such acts and things and sign all documents required by the husband at his expense for the wife, both personally and in her capacity as trustee or beneficiary, to cause all her right, title and interest in the Dowd Investment Trust to be transferred, assigned or relinquished to the husband, or his nominee, including but not limited to:-
(i)transferring any shareholding in any entity and any interest in any property owned by the Dowd Investment Trust;
(ii)assigning any loan account or beneficial entitlement;
(iii)resigning and procuring the appointment of the husband to any office, power or control in any entity;
(iv)relinquishing and assigning to the husband any other claim or entitlement to the Dowd Investment Trust or its assets.
(c)To give effect to Order 2(b) herein:-
(i)the wife transfer all her right, title and interest she may have personally or as Trustee of the Dowd Investment Trust in the property situated at F Street, Town E, New South Wales (more particularly described as Title Reference …) ('the F Street property') to the husband or his nominee; and
(ii)the parties shall do all such acts and things to refinance the N Bank mortgage attached to the F Street property (being Mortgage No. … ('the N Bank Mortgage')) and the N Bank Business Everyday Account (number …17) ('the overdraft account') into the husband's sole name so as to discharge the wife in relation thereto.
3.In the event the husband is unable to make the whole or any part of the Payment to the wife or to procure the refinancing in Order 2(c) or secure the removal of guarantee in Order 2(a) by the date, the F Street property be sold ('the sales') and the sales proceeds be paid as follows:-
(a)Firstly, to pay all costs and commissions of the sales;
(b)Secondly, to discharge any mortgage or encumbrance attached to the properties;
(c)Thirdly, the balance of the Payment as is outstanding to the wife with interest in accordance with the Federal Circuit andFamily Court of Australia (Family Law) Rules 2021 (Cth) together with any payment as may be required pursuant to Order 6(d) herein; and
(d)Fourthly, the balance (if any) to the husband.
4.In the event the sale proceeds from the F Street property are insufficient to pay the wife the balance outstanding of the Payment pursuant to Order 1 herein, the property situated at D Street, Town E, New South Wales (more particularly described as Title Reference … and including all fixtures and portable buildings situated on the property) ('the D Street Property') be sold ('the sales') and the sales proceeds be paid as follows:-
(a)Firstly, to pay all costs and commissions of the sales;
(b)Secondly, to discharge any mortgage or encumbrance attached to the properties;
(c)Thirdly, the balance of the Payment as is outstanding to the wife with interest in accordance with the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) together with any payment as may be required pursuant to Order 6(d) herein; and
(d)Fourthly, the balance (if any) to the husband.
5.For the purposes of the sales:-
(a)The wife have the sole conduct of the sales and is hereby authorised by these Orders to:-
(i)appoint an Agent at the expiration of thirty days after the date the Payment was due;
(ii)sign any and all Sale Authorities with the appointed Agent as agent for the husband;
(iii)determine the reserve sale prices for the properties;
(iv)negotiate, accept and/or reject offers as agent for the husband; and
(v)sign any and all Contracts of Sale as Agent for the husband.
6.Pending the transfer or sales:
(a)The husband have the right to sole occupation of the F Street property save and except in the event that the husband fails to make the payment to the wife and the F Street property is to be sold, the wife have right to sole occupation of the F Street property from thirty days after the date the Payment was due to enable her to prepare the property for sale.
(b)The husband have the right to sole occupation of the D Street property save and except in the event that the husband fails to make the Payment to the Wife and the D Street property is to be sold, the wife have right to sole occupation of the D Street property from thirty days after the date the Payment was due to enable her to prepare the property for sale.
(c)The husband pay all instalments pursuant to the N Bank mortgage and the overdraft account and pay all expenses, rates and outgoings with regard to the properties as and when they fall due;
(d)An amount equal to any arrears or outstanding payments accrued from the date of these Orders arising from the failure of the husband to comply with Order 6(c) herein that are owing as at the settlement of the sales of F Street property and (if applicable) the D Street property shall be deducted from the balance of the sale proceeds payable to the husband pursuant to Orders 3(d) or (if applicable) 4(d) herein and paid to the wife;
(e)Each party be and is hereby expressly restrained by injunction from encumbering or further encumbering the F Street property or the D Street property save for the purposes of giving effect to these Orders; and
(f)The husband be and is hereby restrained by injunction from destroying or devaluing the properties in any way (including removing any fixtures and/or any of the portable buildings) and the husband otherwise keep the properties in a neat and saleable condition.
7.There be liberty to apply with respect to the sales.
8.The husband pay and continue to pay and indemnify the wife with respect to any and all present, past and future debts, liabilities, taxes, dues, capital gains tax, pay as you go withholding tax, goods and services tax, or other liabilities of whatsoever nature or kind with respect to the Dowd Investment Trust, Dowd Pastoral Trust and O Pty Ltd together with any income tax accruing to the wife as a result of the distributions received from the Dowd Investment Trust and O Pty Ltd.
9.The husband remain solely liable and indemnify the wife in relation to:-
(a)His CBA Credit Card (account ending …97); and
(b)Any and all other liabilities in his name or the name of O Pty Ltd, Dowd Investment Trust, Dowd Pastoral Trust or P Company.
10.The wife retain for her sole use and benefit:
(a)Funds in the following bank accounts:-
(i)N Bank Account ending …19;
(ii)N Bank Account ending …88; and
(iii)NAB Classic Banking Account ending …27.
(b)Her Q Finance Share Portfolio (Account …07); and
(c)Her Superannuation Fund 1 entitlement.
11.The wife be solely liable and indemnify the husband in relation to:-
(a)Her NAB Visa Credit Card (Account ending …13); and
(b)Her Westpac Credit Card (Account ending …16).
In default of the parties or either of them doing all acts and things and executing all such documents as are necessary to give effect to these Orders within 14 days of the date on which the obligation to do so is set under the said Orders, and on the Registrar being satisfied of such failure or neglect or default by either party by way of affidavit evidence only, a Registrar of the Federal Circuit and Family Court of Australia at Melbourne is appointed pursuant to s 106A of the Act to execute all such documents in the name of the party in default and to do all such acts and things necessary to give validity and operation to the said orders and the party in default shall pay to the other party to this Application that party's costs and disbursements on an indemnity basis.
12.That in the event the F Street property and D Street property are to be sold, Morrison & Sawers Lawyers be appointed as agent for the husband, Mr Dowd, for the sole purpose of the sales of the properties listed in Orders 3 and 4 of the Orders and in particular Morrison & Sawers Lawyers be and hereby are authorised to sign a Client Authorisation and Transfer Statement for Duties online on behalf of the husband.
13.That the husband pay or cause to be paid to the wife her costs fixed in the sum of $2,500 pursuant to the orders dated 20 January 2021.
14.Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:
(a)each party be solely entitled to the exclusion of the other to all other property (including choses-in-action) owned by or in the possession of such party as at the date of these orders (the furniture, personal possessions and like chattels in the F Street Property and the D Street property being deemed to be in the possession of the Husband);
(b)any money standing to the credit of the parties in a bank account are to be retained by the party in whose name the account appears;
(c)each party forego any claims they may have to any superannuation benefits belonging to or earned by the other;
(d)insurance policies remain the sole property of the owner named thereon;
(e)Each party be solely liable for any liability in their name 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.
15.That all extant applications be otherwise dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
INTRODUCTION
The applicant wife, Ms Canavan, and the respondent husband, Mr Dowd, seek orders for the division of their property pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”).
The parties commenced cohabitation in either late 2015 (as contended by the wife) or October 2016 (as maintained by the husband), married in 2017 and separated in July 2019. Accordingly, their relationship spanned a period of approximately two and a half to three and a half years; on any view, the parties’ relationship was of short duration.
There is one child of the marriage, X who is aged four years and was born in 2020, several months after the parties’ separation. At the commencement of the final hearing, the parties’ competing parenting applications with respect to X’s care were also on foot. Those issues were resolved by consent during the course of the trial and final parenting orders were made on 22 November 2023 which include that:-
·The wife have sole parental responsibility for X and that X live with her;
·The wife give notice to the husband of any proposed major long-term decision in relation to X, take into account any views expressed by the husband and notify him of the final decision; and
·X spend time with the husband for gradually increasing periods, culminating in:-
·Each alternate week from after school Friday to the commencement of school Monday, commencing in Term 1 2028;
·Specified periods during term holidays and the long summer holiday periods.
At the time of trial, the wife contended that the parties’ net assets, including superannuation were valued at $1,124,635. The husband maintained that those interests were valued at $766,646 (Exhibit A11).
The balance sheet tendered on behalf of the wife identifies a number of pool issues between the parties, the most significant of which is whether the husband’s alleged loan liability of $206,309 to his partner, Ms R, ought be taken into account in the calculation of the value of the parties’ interests. I will address that issue in detail later in the judgment.
The wife seeks an adjustment of 65 per cent of the asset pool excluding superannuation, in her favour. An adjustment in those terms would result in her retaining property valued at approximately $521,000, comprising her savings, her part-property settlement and credit card liability, and a payment from the husband in the sum of $490,000. The wife also seeks an order that she retain her superannuation interests.
The wife submits that an adjustment in those terms is just and equitable as a result of her greater initial contributions in what is a relatively short relationship, coupled with her entitlement to an adjustment pursuant to s 75(2) of the Act on account of her ongoing responsibility for the care of X. The wife contends that she entered the relationship with assets and superannuation of greater value than that brought in by the husband, that she earned greater income than the husband during the marriage, which enabled the parties to purchase F Street, Town E, New South Wales (“the F Street property”), and further, that she has provided almost all of the care to the parties’ only child in the post-separation period, with little financial assistance from the husband.
The husband seeks an equal adjustment of the parties’ non-superannuation assets, and a superannuation split of $65,000 in his favour from the wife’s superannuation interests. The husband contends that the parties’ initial contributions and those made during the marriage were equal, and further, that he has made greater contributions in the post-separation period due to renovations and improvements undertaken by him to the parties’ property.
For the reasons that follow I am satisfied that the parties’ interests (excluding superannuation) should be divided in the proportions of 62 per cent in favour of the wife and 38 per cent in favour of the husband and that the parties otherwise retain their respective superannuation entitlements.
THE PARTIES
The wife was born in 1972 and is aged 52 years. She is a public servant and resides in Town S, Victoria. She is the primary carer for the parties’ child, X.
The husband was born in 1978 and is aged 46 years. He is a Contractor and Farmer. The husband re-partnered in 2021. He currently resides in Town E, New South Wales, with his partner, Ms R, and their son, T, aged one.
Ms R was born in Country U and is a permanent resident of Australia. She is employed as a professional.
BACKGROUND
The parties met in 2015, married in 2017 and separated on a final basis in July 2019. The wife contends that the parties commenced cohabitation in late 2015 whilst the husband maintains that it commenced in 2016; little turns on the determination of this issue in the context of what is a short relationship.
At the commencement of cohabitation, the wife was employed as a public servant and was the registered proprietor of a property at V Street, City W, in which she estimates she had equity of approximately $200,000. In addition, she had superannuation entitlements valued at approximately $154,000 as at June 2016 and a motor vehicle. At that time, the husband conducted a business and held the property at D Street, Town E, New South Wales (“the D Street property”), motor vehicles and chattels. He also had superannuation which was valued at approximately $46,000 in June 2016.
The husband conducted the business, “O Pty Ltd”, during the marriage. Upon the purchase of the F Street property the husband also operated the farm, which produced products for sale online and through markets, trading under the name “P Company”.
The wife worked as a public servant throughout the marriage.
In late 2016, the wife sold the V Street property, the net proceeds of sale being approximately $182,000, which sum was applied for the benefit of the parties, including towards the purchase of the farming property at F Street.
In late 2017 the parties purchased F Street for the sum of $450,000. The property is registered in the name of the Dowd Investment Trust, of which the husband and the wife are trustees. The purchase was financed by a loan in the sum of $385,000. In addition, the wife contributed approximately $69,000 towards the purchase from her savings derived from the sale of the V Street property.
Following the purchase of the F Street property, the wife transferred funds to the husband for the purchase of livestock and the deposit on a tractor.
In July 2019 the husband established the Dowd Pastoral Trust (“the Pastoral Trust”). Initially, O Pty Ltd was trustee of the Pastoral Trust. On 1 April 2020 a Deed of Variation removed O Pty Ltd and appointed the husband as trustee of the Pastoral Trust.
The Pastoral Trust conducts the farming operation and receives income from the sale of livestock.
The husband contends that liabilities of the Pastoral Trust and the business ought be included in the parties’ balance sheet and taken into account in the adjustment of their interests. I will address that issue later in the judgment.
Between 2018 and 2019, the parties undertook IVF treatment at “Y Institute” in Country Z. That treatment, including consultations and medication, cost approximately $41,000 and was funded by the wife. By the time of the parties’ final separation in July 2019, the wife was pregnant with X.
At the time of trial, the parties had embryos in storage at Y Institute in Country Z. Whilst the parties sought to ventilate their dispute as to what ought to become of the remaining embryos, ultimately neither party pressed their claims with respect to that matter. Accordingly, I will make no orders in relation to that dispute.
On 8 January 2020 the parties executed a Binding Financial Agreement (“the BFA”). At the time of its execution, the wife was heavily pregnant.
The BFA provided that the husband pay the wife the sum of $200,000 in four annual instalments of $50,000, the first payment to be made by 31 July 2020 and the final payment to be made by 31 July 2023. In addition, it provided that the wife be permitted to reside at F Street until payment of the final instalment and that she retain her superannuation entitlements.
The BFA also provided that the husband retain:-
·The F Street property;
·The D Street property;
·The Dowd Investment Trust;
·O Pty Ltd; and
·His accumulated superannuation entitlements.
It is common ground that the husband paid to the wife only $50,000 of her entitlements under the BFA, albeit that payment was not made until 3 September 2020, following receipt by the husband of a letter from the wife’s lawyer dated 2 September 2020 giving notice as to her concerns with the BFA.
The wife commenced proceedings on 14 September 2020 seeking that the BFA be set aside and final orders in relation to property division and parenting matters.
On 22 March 2021 orders were made by consent that the BFA be set aside.
In 2021 the husband commenced a relationship with Ms R. The husband alleges that on 1 January 2021, he and Ms R executed a Loan Agreement (Exhibit R7), the terms of which include that Ms R provide “a line of credit for the maximum sum of two hundred and fifty thousand dollars ($250,000.00) (Principal Sum)” to the husband, and that he repay the Principal Sum plus interest calculated at 9.5 per cent per annum within six years from the date of the first draw down on that facility.
The wife does not accept that the Loan Agreement is binding upon the husband and contends that that liability ought not be included in the parties’ balance sheet. I will address that issue later in the judgment.
The wife alleges that she experienced significant family violence at the hands of the husband during the parties’ relationship. The wife deposes that the husband was physically and verbally abusive, that he made threats to kill her, and that he killed her pets. The husband denied those allegations and alleged that it was in fact he who experienced family violence at the hands of the wife.
There is a long history of the parties making application for Family Violence Intervention Orders against one another in the State Courts of New South Wales and Victoria. At the time of the final hearing, the husband was subject to an intervention order made for the protection of the wife.
In late 2022, husband was charged with several offences relating to family violence allegedly perpetrated by him against the wife.
In early 2023 the husband was charged with breaching the intervention order for the protection of the wife and the child.
In mid-2023 the husband applied to the Local Court in New South Wales for an Apprehended Violence Order against the wife. At the time that application was made, the husband did not disclose to the Court that there were pending family violence proceedings in the Magistrates’ Court of Victoria. An interim order was made against the wife on an ex parte basis upon the husband’s application. The wife was served with that order in mid-2023. She applied for its revocation and later that month the interim order against the wife was revoked.
On the following day the husband applied to the Magistrates’ Court at City W for an Interim Intervention Order against the wife. That application was refused by the Magistrate, and orders were made varying the interim parenting orders to provide that changeovers in relation to X occur at a changeover centre. From the date of that order until the time of trial, the husband spent no time with the child.
In late 2023 the husband was found guilty of a domestic violence related charge and was sentenced to a Community Corrections Order and fined.
MATERIAL RELIED UPON
The applicant relies on the following material:-
·Outline of Case document filed 5 October 2023;
·Amended Application for Final Orders filed 3 February 2023;
·Trial affidavit of the applicant filed 11 April 2023;
·Affidavit in reply of the applicant filed 4 October 2023;
·Affidavit of Ms AA filed 4 October 2023;
·Financial Statement filed 6 April 2023;
·Affidavit of Mr BB (annexing the vehicle valuation) filed 5 October 2023;
·Affidavit of Mr CC (annexing the real property valuations) filed 6 October 2023;
·Affidavit of Mr DD (annexing the plant & equipment valuation) filed 5 October 2023; and
·Exhibits A1 – A11, being documents filed during the course of the final hearing.
The respondent relies on the following material:-
·Outline of Case document filed 5 October 2023;
·Amended Response to Application for Final Orders filed 16 February 2023;
·Trial affidavit of the respondent filed 24 September 2023;
·Affidavit of Ms R filed 24 September 2023;
·Financial Statement filed 5 October 2023;
·Affidavit of Mr CC (annexing the real property valuations) filed 6 October 2023;
·Affidavit of Mr DD (annexing the plant & equipment valuations) filed 5 October 2023;
·Affidavit of Mr BB (annexing the vehicle valuation) filed 5 October 2023;
·Minute of Final Orders Sought by the Respondent Husband (Document 11 in the Respondent’s Trial Material uploaded to the eBrief); and
·Exhibits R1 – R9, being documents tendered during the course of the final hearing.
ORDERS SOUGHT
The applicant wife seeks orders in terms of the Minute of Orders sought tendered on her behalf (Exhibit A11):-
Property Orders
1.Within 60 days from the date of these Orders (‘the date’), the Husband make a payment for the Wife of $490,000.
2. Contemporaneously with the receipt by the Wife of the payment in full:-
(a)The Husband do all such acts and things and sign all documents as may be necessary to satisfy the bank with respect to personal guarantees to cause [N Bank] to release the Wife from any personal guarantees provided to [N Bank] in relation to the [Dowd Investment Trust] and/or the [N Bank] Mortgage and/or the overdraft account (‘the removal of guarantee’).
(b)Subject to compliance with paragraph 2(a) herein the Wife shall do all such acts and things and sign all documents required for the Wife to both personally and in her capacity of trustee or beneficiary to cause all her right, title and interest in the [Dowd Investment Trust] to be transferred, assigned or relinquished to the Husband, or his nominee, including but not limited to:-
(i)transferring any shareholding in any entity and any interest in any property owned by the [Dowd Investment Trust];
(ii) assigning any loan account or beneficial entitlement;
(iii)resigning and procuring the appointment of the Husband to any office, power or control in any entity;
(iv)relinquishing and assigning to the Husband any other claim or entitlement to the [Dowd Investment Trust] or its assets.
(c) To give effect to paragraph 2(b) herein:-
(i)the Wife transfer all her right, title and interest she may have personally or as Trustee of the [Dowd Investment Trust] in the property situate at [F Street, Town E] New South Wales (more particularly described as Title Reference […]) (‘the [F Street] property’) to the Husband or his nominee;
(ii)The parties shall do all such acts and things to refinance the [N Bank] mortgage attached to the [F Street] property (being Mortgage No. […] (‘the [N Bank] Mortgage’)) and the [N Bank] Business Everyday Account (number […17]) (‘the overdraft account’) into the Husband’s sole name so as to discharge the Wife in relation thereto;
3.In the event the Husband is unable to make the whole or any part of the payment to the Wife or to procure the refinancing in Order 2 (c) or secure the removal of guarantee in Order 2(a) by the date, the [F Street] property be sold (‘the sales’) and the sales proceeds be paid as follows:-
(a) Firstly, to pay all costs and commissions of the sales;
(b)Secondly, to discharge any mortgage or encumbrance attached to the properties;
(c)Thirdly, the balance of the payment as is outstanding to the Wife with interest in accordance with the Federal Circuit and Family Law Rules 2021 together with any payment as may be required pursuant to paragraph 6(d) herein; and
(d)Fourthly, the balance (if any) to the Husband.
4.In the event the sale proceeds from the [F Street] property are insufficient to pay the Wife the outstanding payment pursuant to paragraph 1 herein, the property situate at [D Street, Town E], New South Wales (More particularly described as Title Reference […] and including all fixtures and portable buildings situated on the property) (‘the [D Street] Property’) be sold (‘the sales’) and the sales proceeds be paid as follows:-
(a) Firstly, to pay all costs and commissions of the sales;
(b)Secondly, to discharge any mortgage or encumbrance attached to the properties;
(c)Thirdly, the balance of the payment as is outstanding to the Wife with interest in accordance with the Federal Circuit and Family Law Rules 2021 together with any payment as may be required pursuant to paragraph 6(d) herein; and
(d)Fourthly, the balance (if any) to the Husband.
5. For the purposes of the sale:-
(a)The Wife have the sole conduct of the sales and is hereby authorised by these Orders to:-
(i)Appoint an Agent within seven days of the date the payment was due;
(ii)Sign any and all Sale Authorities with the appointed Agent as agent for the Husband;
(iii) Determine the reserve sale prices for the properties;
(iv)Negotiate, accept and/or reject offers as agent for the Husband;
(v) Sign any and all Contracts of Sale as Agent for the Husband
6. Pending the transfer of sales:
(a)The Husband have the right to sole occupation of the [F Street] Property save and except in the event that the Husband fails to make the payment to the Wife and the [F Street] property it (sic) to be sold, the Wife have right to sole occupation of the [F Street] property from the date the payment was due to enable her to prepare the property for sale.
(b)The Husband have the right to sole occupation of the [D Street] Property save and except in the event that the Husband fails to make the payment to the Wife and the [D Street] property it (sic) to be sold, the Wife have right to sole occupation of the [D Street] property from the date the payment was due to enable her to prepare the property for sale.
(c)The Husband pay all instalments pursuant to the [N Bank] mortgage and the overdraft account and pay all expenses, rates and outgoings with regard to the properties as and when they fall due; and
(d)An amount equal to any arrears or outstanding payments accrued from the date of these Orders arising from the failure of the Husband to comply with paragraph 6(c) herein that are owing as at the settlement of the sales for [F Street] property and (if applicable) the [D Street] property shall be deducted from the balance of the sale proceeds payable to the Husband pursuant to paragraphs 3(d) or (if applicable) 4(d) herein and paid to the Wife;
(e)Each party be and is hereby expressly restrained by injunction from encumbering or further encumbering the [F Street] Property or the [D Street] property save for the purposes of giving effect to these Orders.
(f)The Husband be and is hereby restrained by injunction from destroying or devaluing the properties in any way (including removing any fixtures and/or any of the portable building) and the Husband otherwise keep the properties in a neat and saleable condition.
7.The Husband pay and continue to pay and indemnify the Wife with respect to any and all present, past and future debts, liabilities, taxes, dues, capital gains tax, pay as you go withholding tax, goods and services tax, or other liabilities of whatsoever nature or kind with respect to the [Dowd Investment Trust], [Dowd Pastoral Trust] and [O Pty Ltd] together with any income tax accruing to the Wife as a result of the distributions received from the [Dowd Investment Trust] and [O Pty Ltd].
8. The Husband remain solely liable and indemnify the Wife in relation to:-
(a) His CBA Credit Card (account ending […97]);
(b)Any and all other liabilities in his name or the name of [O Pty Ltd], [Dowd Investment Trust], [Dowd Pastoral Trust] or [P Company]
9. The Wife retain for her sole use and benefit:
(a) Funds in the following bank accounts:-
(i) [N Bank] Account ending […19];
(ii) [N Bank] Account ending […88]; and
(iii) NAB Classic Banking Account ending […27].
(b) Her [Q Finance] Share Portfolio (Account […07]); and
(c) Her [Superannuation Fund 1] entitlement.
10. The Wife be solely liable and indemnify the Husband in relation to:-
(a) her NAB Visa Credit Card (Account ending […13]);
(b) her Westpac Credit Card (Account ending […16]).
11.In default of the parties or either of them doing all acts and things and executing all such documents as are necessary to give effect to these within 14 days of the date on which the obligation to do so is set under the said Orders, and on the Registrar being satisfied of such failure or neglect or default by either party by way of an affidavit evidence only, a Registrar of the Federal Circuit and Family Court of Australia at Melbourne is appointed pursuant to s 106A to execute all such documents in the name of the party in default and do all such acts and things necessary to give validity and operation to the said orders and the party in default shall pay to the other party to this Application that party’s costs and disbursements on an indemnity basis.
12.That in the event the [F Street] property and [D Street] property are to be sold, Morrison & Sawers Lawyers be appointed as agent for the Husband, [Mr Dowd] for the sole purpose of the sales of the properties listed in paragraphs 3 and 4 of the Orders and in particular Morrison & Sawers Lawyers be and hereby are authorised to sign a Client Authorisation and Transfer Statement for Duties online on behalf of the Husband.
13.That the Court make the Order for costs in the sum of $3,244 being the costs reserved on 20 January 2021 of $2,500 and the costs associated with the Wife obtaining financial disclosure by way of Subpoenas following the Husband (sic) failure to comply with obligations to make disclosure in February 2021.
The respondent husband seeks orders in the terms of his Minute of Orders Sought, as follows:-
PROPERTY ORDERS
26.The Wife forthwith do all acts and things and sign all such documents required for the destruction of the frozen embryos owned by the parties and stored at the [Y Institute] in [Country Z] (“the [Y Institute]”), including pay all outstanding fees in relation to the storage of the embryos, and the Wife shall copy the Husband in all email correspondence to the [Y Institute] required for compliance with this paragraph.
27.The Wife be and hereby is restrained by injunction from:
a)withdrawing her consent to the destruction of the embryos provided in accordance with paragraph 29 of these Orders;
b) using or attempting to use the embryos; and
c)communicating in any manner whatsoever with the [Y Institute] in [Country Z] other than signing the documents in accordance with paragraph 26 hereof.
28.The Wife forthwith do all acts and things and sign all such documents required to consent to the complaint initiated by the Husband to the Australian Financial Complaints Authority (AFCA) in relation to the [N Bank] loan to [Dowd Pastoral Trust].
29.Within 4 months of the completion of the investigations by AAFCA (sic) and/or the [N Bank] into the Bank’s lending practices and non-compliance issues, the parties do all such acts and things and sign all such documents as may be necessary:
a)to transfer to the Husband all of the Wife’s right, title and interest in the real property situate at and known as [F Street, [Town E] New South Wales (more particularly described as Title Reference […] (sic)) (‘the [F Street] property’);
b)to refinance the [N Bank] mortgage attached to the [F Street] property (being Mortgage No. […] (‘the [N Bank] Mortgage’)) into the Husband’s sole name so as to discharge the Wife in relation thereto;
c)to refinance the [N Bank] Business Everyday Account (number […17]) (‘the overdraft account’) into the Husband’s sole name so as to discharge the Wife in relation thereto;
d)for the Wife to both personally and in her capacity (if any) of appointer, trustee or beneficiary in the [Dowd Investment Trust] (“the Trust”) to cause all her right, title and interest in the Trust to be transferred, assigned or relinquished to the Husband, including but not limited to:
(i)transferring any shareholding in any entity and any interest in any property owned by the Trust;
(ii) assigning any loan account or beneficial entitlement;
(iii)resigning and procuring the appointment of the Husband to any office, power or control in any entity; and
(iv)relinquishing and assigning to the Husband any other claim or entitlement to the Trust or its assets.
(collectively “the transfers”)
30. Pending the transfers:
a)The Husband have the sole right to occupy the [F Street] property and the real property situate at [D Street, Town E], New South Wales (more particularly described as Title Reference […] and including all fixtures and portable buildings situated on the property) (‘the [D Street] Property’);
b)the Husband pay all instalments pursuant to the [N Bank] mortgage and all rates and taxes and like apportionable outgoings of or with respect to the [F Street] Property and the [D Street] property as they fall due; and
c)Neither party encumber or further encumber the [F Street] Property or the [D Street] property save for the purposes of giving effect to these Orders.
31.In default of the parties or either of them doing all acts and things and executing all such documents as are necessary to give effect to these Orders within 14 days of the date on which the obligation to do so is set under the said Orders, and on the Registrar being satisfied of such failure or neglect or default by either party by way of an affidavit evidence only, a Registrar of the Family Court of Australia at Melbourne is appointed pursuant to s 106A to execute all such documents in the name of the party in default and to do all such acts and things necessary to give validity and operation to the said orders and the party in default shall pay to the other party to this Application that party’s costs and disbursements on an indemnity basis.
32.Paragraphs 33 to 36 are binding on the Trustee of [Superannuation Fund 1] (“the Fund”), being the [Superannuation Fund 1] Board (“the Trustee”).
33.In accordance with Section 90XT(4) of the Family Law Act 1975, a base amount of $232,924 is allocated to the Husband out of the Wife’s interest in the Fund membership number […].
34.Pursuant to Section 90XT(1)(a) of the Family Law Act 1975 whenever a splittable payment becomes payable in respect of the superannuation interest of [Ms Canavan] (member spouse) in [Superannuation Fund 1]:
a)[Mr Dowd] (non-member spouse) shall be entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 using the base amount of $215,000 (provided that such base amount shall not exceed the value of the interest determined under section 90XT(2));
b)There be a corresponding reduction in the superannuation interest of [Ms Canavan] (member spouse) to whom the splittable payment would have been made but for the Order.
35.The Trustee of the Fund shall do all such acts and things and sign all such documents as may be necessary to:
a)Calculate, in accordance with the requirements of the Family Law Act 1975, the entitlement awarded to the Husband in the immediately preceding clause of the Order (“the entitlement”); and
b)pay the entitlement to the Husband from the Wife’s interest in the Fund; and
c)make a corresponding reduction in the entitlement that the Wife would otherwise have in the Fund but for these Orders.
36.Orders 7 and 8 (sic) have effect from the operative time and the operative time for these orders is four business days after service of the final sealed Orders on the Trustee.
37.If as a result of termination of her employment [Ms Canavan] becomes entitled to a benefit prior to the Trustee making a payment under [the relevant legislation], she shall provide to the Trustee all such forms as shall be necessary to enable the Trustee to determine the nature and quantum of the superannuation entitlement and any order related information it may reasonably require, within 7 days of that entitlement arising.
38.Within 14 days of these Orders being made:
a)The Husband serve a sealed copy of these Orders upon the Trustee; and
b)The Husband give notice in writing to the Trustee pursuant to regulation 72 of the Family Law (Superannuation) Regulations 2001.
39.There be liberty to apply to each party and to the Trustee in relation to the implementation of these orders affecting the superannuation interests of the Wife.
40.Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:
(a)each party be solely entitled to the exclusion of the other to all other property (including choses-in-action) owned by or in the possession of such party as at the date of these orders (the furniture, personal possessions and like chattels in the [F Street] Property and the [D Street] property being deemed to be in the possession of the Husband);
(b)Any money standing to the credit of the parties in a bank account are to be retained by the party in whose name the account appears;
(c)each party forego any claims they may have to any superannuation benefits belonging to or earned by the other;
(d)insurance policies remain the sole property of the owner named thereon;
(e)Each party be solely liable for any liability in their name 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 HEARING
The hearing commenced on 9 October 2023 and proceeded over five days, with closing submissions on 14 November 2023. Both parties were represented by Counsel for the duration of the hearing.
The witnesses required for cross-examination were the husband and the wife, the wife’s mother, Ms AA, the husband’s partner, Ms R, and the Court Child Expert, Ms G. Much of the oral evidence was dominated by parenting issues and is therefore not relevant to the determination of the property dispute.
Both parties relied upon the evidence of the single experts appointed to value their interests, namely Mr CC, who valued the properties at D Street and F Street, Mr BB who valued the parties’ motor vehicles, and Mr DD who valued the plant and equipment. There was no challenge to the evidence of those single expert valuers. Accordingly, I accept their evidence.
At the commencement of the hearing the husband sought leave to rely upon an affidavit of Ms L sworn 6 October 2024. That application was opposed by the wife.
Ms L is the Director of the company that performs bookkeeping for the husband. In circumstances where Ms L had not personally undertaken bookkeeping work for the husband or his entities, she was not appointed as a single expert, her affidavit was served on the day prior to the commencement of the hearing and the information contained therein was based on documents not previously disclosed to the wife, I refused the husband’s application to rely upon that evidence.
THE ISSUES
The issues that emerge from the parties’ competing applications for property division which require determination are:-
·Whether a piece of equipment ought be included in the valuation of the parties’ plant and equipment;
·The value to be attributed to the parties’ vehicles and whether that value ought to include Motor Vehicles 1, 2 and 3 sold by the husband after the single expert valuation;
·The value to be attributed to a painting;
·The values to be attributed to the parties’ bank accounts;
·Whether the shares purchased by the wife after separation for the benefit of the child X ought be included in the parties’ balance sheet;
·Whether the wife’s payment of the husband’s credit card debt ought be included in the value of her part-property settlement;
·Whether the husband’s alleged debts to WorkCover, the Australian Taxation Office, and his partner, Ms R ought be included in the parties’ balance sheet;
·Whether the debt alleged to be owing to EE Company ought be included in the parties’ balance sheet;
·Whether the sums deducted by the husband from his superannuation and applied to the payment of his legal fees ought be added back to the parties’ balance sheet;
·What weight ought be attributed to the parties’ respective initial contributions;
·What weight ought be attributed to the parties’ contributions during the relationship;
·What weight ought be attributed to the parties’ post-separation contributions, particularly the wife’s care of the parties’ child and
the husband’s alleged improvements to the property at F Street;
·Whether there has been non-disclosure by the husband, and if so, the impact of that conduct upon the adjustment of the parties’ interests;
·What adjustment, if any, should be made in respect of s 75(2) factors;
·Whether the husband ought pay the wife’s costs of $3,244 comprising costs reserved and costs associated with obtaining disclosure; and
·Whether the wife ought be required to consent to the husband’s complaint to the Australian Financial Complaints Authority.
LEGAL PRINCIPLES
Applications for property division are to be determined in accordance with Part VIII of the Act. In property settlement proceedings, the Court may make such orders as it considers appropriate (s 79(1) of the Act). However, the Court cannot make an order unless it is satisfied that, in all of the circumstances, it is just and equitable to do so (s 79(2) of the Act).
In considering what, if any, order should be made in property settlement proceedings, pursuant to s 79(4) of the Act the Court must take into account the following:-
(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, whether or not that property still exists;
(b)The contribution (other than financial contribution) made directly or indirectly by or on behalf of a party to the acquisition, conservation or improvement of any of the property of the parties whether or not that property still exists;
(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 of parent;
(d)The effect of any proposed order upon the earning capacity of either party to the marriage;
(e)The matters referred to in s 75(2) of the Act so far as they are relevant;
(f)Any other order made under the 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.
The High Court in Stanford & Stanford (2012) 247 CLR 108 (“Stanford”) considered the approach to be adopted in the determination of proceedings pursuant to s 79 of the Act.[1] The plurality at page 121 adopted the view of Barwick CJ, Gibbs, Stephen and Mason JJ in R v Watson; Ex parte Armstrong (1976) 136 CLR 248 that whilst the Court holds a broad discretion, such is not an unfettered discretion and must be exercised “in accordance with legal principles, including the principles which the Act itself lays down”.[2]
[1] Stanford, [35]-[40].
[2] R v Watson; Ex parte Armstrong (1976) 136 CLR 248, [12].
The High Court’s decision in Stanford was considered by the Full Court in the cases of Bevan & Bevan [2013] FamCAFC 116; (2013) FLC 93-545 (“Bevan”) and Chapman & Chapman [2014] FamCAFC 91; (2014) FLC 93-592.
In Bevan, the Full Court identified three “fundamental propositions” laid down by the High Court which they considered should guide a Trial Judge’s approach to the task under s 79. Those propositions were summarised at [73] of the Full Court’s judgment as follows:-
1.Determination of a just and equitable outcome of an application for property settlement begins with the identification of existing property interests (as determined by common law and equity);
2.The discretion conferred by the statute must be exercised in accordance with legal principles and must not proceed on an assumption that the parties’ interests in the property are or should be different from those determined by common law and equity;
3.A determination that a party has a right to a division of property fixed by reference only to the matters in s 79(4), and without separate consideration of s 79(2), would erroneously conflate what are distinct statutory requirements.
(Emphasis in Original)
Accordingly, in determining the parties' competing applications pursuant to s 79 of the Act, the Court is required to:-
·Identify the parties' respective legal and equitable interests in property;
·Determine whether, in accordance with s 79(2), it is just and equitable to make a property settlement order having regard to the parties' existing interests;
·Determine all relevant contributions of each of the parties;
·Identify and weigh against each other the matters set out in s 79(4)(a) to (c) inclusive of the Act; and
·Consider the matters contained in s 79(4)(d) to (g) inclusive of the Act and make a determination as to what, if any, alteration should be made to the entitlements of the parties earlier assessed on account of their contributions, particularly having regard to the provisions of s 75(2) of the Act.
The Act does not prescribe a particular order in which the matters contained within s 79(4) are to be considered; instead, their consideration will be dependent upon the particular circumstances of the marriage, with the manner in which the parties have organised and lived within the marriage deemed to be factors which may be relevant in the exercise of the s 79(2) discretion.
THE EVIDENCE
In determining the matter, the relevant standard of proof is the balance of probabilities. Section 140(2) of the Evidence Act 1995 (Cth) provides that, without limiting the matters the Court may take into account in applying that standard of proof, the Court must take into account:-
·The nature of the cause of action or defence; and
·The nature of the subject-matter of the proceeding; and
·The gravity of the matters alleged.
I have read all documents upon which the parties have relied and the exhibits that were tendered during the hearing. The parties’ affidavits exhaustively set out their accounts of the history of their relationship and their position in relation to matters in dispute. I have read and considered that affidavit evidence and do not propose to repeat it at length in these reasons. It is not necessary for a Trial Judge to refer to every piece of evidence or argument presented during a trial. That this is so, was confirmed by the High Court in Whisprun Pty Ltd v Dixon (2003) 200 ALR 447 at [62], where Gleeson CJ, McHugh and Gummow JJ said:
… A judge’s reasons are not required to mention every fact or argument relied on by the losing party as relevant to an issue. Judgments of trial judges would soon become longer than they already are if a judge’s failure to mention such facts and arguments would be evidence that he or she had not properly considered the losing party’s case.
In what follows, statements of fact constitute findings of fact. I had the benefit of observing the appearance and the demeanour of the husband and the wife when giving their evidence in Court. I have carefully considered the matter and in making findings to the requisite standard, I have had regard to all of the evidence, the nature of the proceedings, the seriousness of the allegations and the consequences that flow from my findings.
The wife’s evidence
The wife was cross-examined by Counsel for the husband and the Independent Children’s Lawyer (“ICL”) across the first and second day of the hearing. Much of that cross-examination focussed on parenting issues not relevant to the current dispute. The wife presented as a vulnerable and at times emotional witness, who is devoted to the care of the parties’ child and plainly fearful of the husband.
The wife made concessions where appropriate. For example, she readily conceded her misconduct in copying a colleague’s notes of an investigation related to the husband and passing them on to him; she acknowledged that that behaviour was prohibited. The wife also conceded that she had executed a document regarding the storage of embryos in the husband’s name.
The wife presented as an accurate historian and her evidence as to her initial contributions, the acquisition by the parties of the F Street property and her observations in relation to the acquisition of livestock by the parties was not seriously challenged. I observed the wife to be a truthful and responsive witness. Accordingly, I accept her evidence.
The husband’s evidence
The husband was cross-examined on the second and third days of hearing. He was an unimpressive witness whom I observed to be evasive and at times non-responsive when challenged.
For example, the husband was cross-examined in relation to the Binding Financial Agreement prepared by his lawyer and executed by the parties. Notwithstanding the fact that the document was prepared by his lawyer and provided to the wife for consideration, the husband sought to maintain that Recitals C and D of the document, that relate to the dates of cohabitation and separation, were not accurate, albeit it was his evidence that at the time he believed them to be accurate. Further, the husband sought to maintain that the document was prepared for the wife’s protection, stating that he wanted to “set her up”. Nonetheless, he conceded that under the terms of the BFA, the wife was not released from responsibility for the mortgage liability secured against the F Street property. Overall, I found the husband’s evidence in relation to the circumstances of the preparation of the BFA and its terms to be self-serving and disingenuous.
As to the wife’s allegations that she was a victim of family violence at the hands of the husband, the husband stated that the wife had fabricated her evidence that she was intimidated by him and that he was violent and abusive. Nonetheless, the husband conceded that he “possibly” had called her names and ultimately agreed that he had called her a “lying cunt”. The husband sought to minimise his criminal history and only when presented with evidence as to his conduct did he make any concessions.
It was submitted by the wife that the husband was vengeful and controlling. The husband conceded during his oral evidence that he had taunted the wife for not being the child’s biological mother, that he had told her she was not X’s mother and never will be, that she was not a real mother and that she was a “bitter dero single woman to a child who isn’t [hers]”.
When challenged as to his income and the source of funds to meet his living expenses, I observed the husband to be an evasive witness. When questioned as to whether the income declared in his 2021 and 2022 taxation returns was similar to that disclosed in his Financial Statement, the husband responded that it was “hard to say”. When asked whether his living expenses were met by O Pty Ltd, the husband stated that he was not sure, notwithstanding the disclosures made by him in his filed Financial Statement.
The husband was cross-examined in relation to the alleged improvements affected by him to F Street in the post-separation period. The husband conceded that F Street is held by the Dowd Investment Trust. He was asked where the capital expenditure on F Street was disclosed in the financial statements for that entity. The husband could provide no explanation for the absence of declared capital expenditure in relation to the property. The husband was further challenged that he had not produced any financial accounts or balance sheets that showed expenditure on improvements for F Street. Again, the husband was unwilling to make a concession in relation to that matter, simply responding that he did not recall.
Having regard to the husband’s evidence, I am satisfied that he was often evasive or non-responsive when challenged. As a result, the husband’s evidence must be treated with caution, particularly where it is not corroborated by other independent evidence.
The evidence of Ms R
Ms R is the husband’s current partner. She swore an affidavit filed 24 September 2023. In that affidavit, she gave evidence both in relation to parenting matters and also as to her financial dealings with the husband. She there deposed as to funds lent to the husband since 4 January 2021. She confirmed that she and the husband entered into a Loan Agreement dated 1 January 2021. At [14] of that affidavit she deposed that she kept a record of the amounts transferred to the husband, there stating that as at May 2023 she was owed $166,200, excluding interest.
Ms R was challenged in relation to that evidence.
Only during cross-examination was it conceded by her that the husband’s lawyer drew the Loan Agreement. A call was made for that lawyer’s file in respect of the preparation of the Loan Agreement. No file was produced in answer to that call. Ms R could not recall who witnessed her signature to that agreement, nor could she accurately recall its terms.
Further, during cross-examination, Ms R conceded that in fact the funds advanced by her were advanced to the Dowd Pastoral Trust, and not the husband, and that it was that Trust which owed funds to her.
Ms R also conceded that whatever amount was due and payable under the Loan Agreements, she would not pursue her rights against the husband to recover it.
Ms R also conceded during cross-examination that she had received cash payments from the husband that were paid into her account and subsequently transferred to the husband’s entity, O Pty Ltd.
My impression of Ms R was that she was complicit in the husband’s attempt to mislead the Court as to the financial arrangements between them, including the alleged Loan Agreement, and the husband’s transfer of Motor Vehicle 3 to her for a heavily discounted sum months after its purchase by him.
Having regard to those matters, I am satisfied that Ms R’s evidence ought be treated with caution.
The evidence of Ms AA
Ms AA swore an affidavit filed 4 October 2023. The evidence contained in that affidavit relates to parenting issues and it was only in relation to those aspects of the matter that the witness was cross-examined. Accordingly, that evidence is not relevant to the current dispute.
DISPUTED ITEMS IN THE BALANCE SHEET
During closing submissions, Counsel for the wife tendered a summary of closing submissions (Exhibit A11) which included a joint balance sheet (Annexure B). That document identifies the respective positions of the parties in relation to the value of their assets and liabilities as follows:-
Description
Ownership
Applicant’s Value
Respondent’s Value
ASSETS
1
F Street
Joint (Dowd Investment Trust)
$815,000
$815,000
2
D Street
Husband
$195,000
$195,000
3
Stock on Farm
Husband
$ 39,190
$ 39,190
4
Plant & Equipment (Wife’s figures including sold piece of equipment)
Husband
$ 97,1501
$ 91,350 (sic)
5
Vehicles (Wife’s figured (sic) included sale proceeds for Motor Vehicles 1, 2 and 3)
Husband
$ 91,8502
$ 37,850
6
Painting
Husband
$ 10,0003
$ 1,000
7
Engagement ring (in possession of the Husband)
Husband
8
Bank Accounts
Husband
$ 15,8524
$ 11,276
9
Bank Accounts
Wife
$ 90
$ 1,400
10
Shares
Wife
$ 2,332
$ 2,332
11
Shares
Wife ATF X
NIL5
$ 9,441
12
12A
Part Property Settlement (Wife accounts for balance of part property settlement in legal fees paid in ‘other’)
Motor Vehicle 3 diverted to Ms R
Wife
Husband
$ 50,0006
(less $19,613)
$ 23,000
$ 50,000
Nil
Assets subtotal
$1,319,851
$1,253,839
LIABILITIES
13
Mortgage for F Street
Joint (Dowd Investment Trust)
$401,007
$401,007
14
Overdraft Account
Joint (Dowd Investment Trust)
$ 51,924
$ 51,924
15
FF Company Stock Mortgage
Husband
$156,3577
$156,357
16
FF Company Account
Husband
$ 10,458
$ 10,458
17
Workcover Bill
Husband
NIL
$101,116
18
Credit Card
Husband
$ 12,0798
$ 13,138
19
ATO Tax Owing
Husband
$ 71,7419
$174,407
20
ATO Super Owing
Husband
NIL
$ 6,127
21
Loan from Ms R
Husband
NIL
$206,309
22
Monies alleged owing to EE Company
Husband
NIL
$ 36,134
23
Credit Card
Wife
$ 1,114
Liabilities subtotal
$704,680
$1,156,977
NETT (sic) NON-SUPERANNUATION PROPERTY
$615,171
$96,862
SUPERANNUATION
Name of Fund
Type of Interest
Member
Applicant’s Value
Respondent’s Value
24
Superannuation Fund 1
Defined Benefit
Wife
$229,00010
$617,847
25
SMSF (Shares and CDIA)
Accumulation
Husband
$ 93,011.00
$ 93,011.00 11
Superannuation subtotal
$322,011
$710,858
TOTAL (assets – liabilities + superannuation)
$937,182
$766,646
OTHER
Description
Ownership
Applicant’s Value
Respondent’s Value
27
Legal fees paid to date (includes $59k from superannuation) - addback
Husband
$187,45312
Other subtotal
$187,453
TOTAL (assets – liabilities + superannuation + financial resources + other)
$1,124,635
$766,646
[1] Valuation obtained from the single expert
2 Single expert valuation before sales asserted by husband
3 Application to N Bank signed by husband being a “statement against interest”
4 Subject to the provision of statements for the husband personally and the entities
5 Purchased post separation by wife and formally held on trust for the child X (with his own ABN)
6 Sum paid but effectively in part $19,613 paid to reduce credit card debt conceded by husband at para 211 of his Trial Aff.
7 Agreed at $148271 as at time of filing Case Summaries (5 Oct). Further interest accrued at 12.5% pa in Sept to make it this figure.
8 23 Sept 2023 being last disclosed by husband.
9 This is the amount agreed to be owing at July 2019 (separation).
10 Valuation under the Regulations at 30.4.22
11 $60,000 removed from the fund by the Husband in 2023.
12 Wife asserts this should be added back to the extent that it is represented by debt created by the husband in items 13-18.
What follows are my findings with respect to the disputed items in the tendered joint balance sheet.
Item 4 – Plant & Equipment
The wife contends that the plant and equipment is valued at $97,150, being the valuation attributed to it by the single expert valuer, Mr DD. The husband maintains that he has sold items included in that valuation, particularly a piece of equipment, and that he has applied the funds received from the sold items to the payment of liabilities. Accordingly, he maintains that the value of plant and equipment is $93,150, being the valuation less the value of the items he has sold.
The wife challenges the husband’s assertions in circumstances where he has produced no independent evidence as to the sale of the items, or the liabilities allegedly paid by him with the sale proceeds. For example, he has produced no documents evidencing a receipt of liabilities allegedly paid by him. During closing submissions, it was acknowledged by Counsel for the husband that documents had not been produced by the husband evidencing the liabilities said to have been paid by him.
Absent independent evidence proving the sale of plant and equipment or the payment of liabilities, I am not satisfied that the husband’s contentions as to the reduction of the value of plant and equipment can be maintained.
Accordingly, the sum of $97,150 will be included at Item 4, being the value of plant and equipment as assessed by the jointly appointed single expert valuer.
Item 5 – Vehicles
The wife attributes the value of $91,850 to the parties’ vehicles, being the value assessed by the jointly appointed single expert valuer, Mr BB. The husband contends that the value of the vehicles ought be reduced to $37,850 as a result of the sale by him of three vehicles, being Motor Vehicle 1, Motor Vehicle 2 and Motor Vehicle 3.
The husband purchased Motor Vehicle 3 for the sum of $36,000 in late 2020. It was transferred by him to Ms R some 10 weeks later. It was confirmed during oral evidence that the husband still has the use of the motor vehicle and always has had access to it.
The husband deposed in his trial affidavit at [274] that in January 2021 he transferred Motor Vehicle 3 to his partner, Ms R, for the sum of $13,000 as he “needed funds to pay liabilities”. The husband does not identify the liabilities alleged to have been paid by him with the sale proceeds and has produced no evidence to support his contentions in relation to the payment of those liabilities.
Having regard to the paucity of evidence adduced by the husband in relation to the sale of the vehicle and the alleged payment of liabilities, I do not accept his contention that a lesser value should be attributed to Motor Vehicle 3.
As to the sale of Motor Vehicle 1, the husband deposes at [275] of his trial affidavit that he sold that vehicle in mid-2022 for $12,500, it being valued by the joint valuer at $12,000, and further, that he deposited the proceeds of sale into his bank account; no explanation is proffered as to how those funds were applied. Further, no submission was made as to why those funds ought not be included in the balance sheet. Accordingly, I reject the husband’s submission that the single expert value attributed to Motor Vehicle 1 should not be included in the parties’ balance sheet.
At [276] of his trial affidavit, the husband deposes that he sold Motor Vehicle 2 in mid-2022 for $8,000. The single expert valuer attributed the value of $8,000 to that vehicle. The husband deposes that the proceeds of sale of the vehicle were deposited by him into his bank account. However, the husband does not disclose how the sale proceeds from that vehicle were applied.
Absent evidence as to how the proceeds of sale of the three motor vehicles were applied, I am not persuaded that they should be excluded from the parties’ balance sheet.
Having regard to my findings with respect to the husband’s contentions as to his sale of the three motor vehicles, I am satisfied that the sum of $91,850 should be included at Item 5, that being the value of the vehicles as assessed by the jointly appointed single expert valuer.
Item 6 – photograph
The photograph was a piece of art owned by the husband at the commencement of cohabitation. The wife contends that it is valued at $10,000, relying upon an Application for Finance to N Bank signed by the husband in which the photograph was included in his assets at that value. The wife contends that that application is an admission against interest made by the husband in support of his loan application.
In his Financial Statement filed 5 October 2023 the husband deposes at item 43 that the value of Peter Lik photograph is $1,000.
The issue is further clouded having regard to the value attributed to the photograph in the BFA executed by the parties on 8 January 2020.[3] Annexure A to the BFA discloses the estimated value of the photograph as being $40,000.
[3] Trial affidavit of the wife filed 6 April 2023, annexure MC-10.
Notwithstanding the differences in valuation of the photograph at various times, neither the husband nor the wife have sought a valuation of that asset. Given the absence of independent evidence as to value of that item, I am satisfied that it should be included in the pool at $1,000, being the most recent estimate of value provided in the husband’s Financial Statement.
Whilst the earlier made loan application is also an admission against interest, it was an application made some years earlier and prior to the parties’ separation. I am satisfied that the wife was well aware of the husband’s earlier representations of its value, and it was open to her to seek expert evidence in relation to the item; she has elected not to do so.
Accordingly, Item 6 will be included in the balance sheet at $1,000.
Item 8 – Bank accounts of the husband
The wife contends that the value of the husband’s bank accounts is $15,852 whilst the husband asserts that he has bank accounts valued at $11,276.
Ordinarily one might anticipate that this issue would be resolved upon the husband producing his most recent bank statements; unfortunately, that did not occur.
In the absence of those documents, it was submitted on behalf of the wife that the figure that ought be attributed to the husband’s bank accounts is that disclosed by him in his trial affidavit at [210]. There, the husband disclosed two bank accounts, #...54 which then had $3,893 and #...32 which held $10,000, totalling $13,893.
Having regard to that evidence, the sum of $13,893 will be included at Item 8.
Item 9 – Bank accounts of the wife
The wife contends that she has savings accounts valued at $90 whilst the husband asserts that her savings accounts are valued at $1,400.
No documents were produced by the wife to prove the amounts held by her in her savings accounts. No submissions were made by Counsel for either party in relation to the issue. On any view it is a de minimis argument, having regard to the amounts contended by each party.
Absent independent evidence confirming the amounts held by the wife in her bank account, I will include the sum of $90 at Item 9, being an admission against interest made by the wife in her Financial Statement as to the amounts held by her.
Item 11 – Shares held upon trust by the wife for the child X
The wife contends that the shares held by her on trust for the parties’ child, X, should be quarantined from the parties’ asset pool and not included in the joint balance sheet. Initially, the husband maintained that the value of those shares, being the sum of $9,441, ought be included in the balance sheet. However, during his closing submissions, Counsel for the husband conceded that the value of those shares should be excluded from the balance sheet.
In light of that concession, I am satisfied that Item 11 ought be excluded from the parties’ balance sheet.
Item 12 – Part-property settlement to the wife
It is common ground between the parties that the husband paid to the wife the sum of $50,000 pursuant to the BFA. At issue is whether that amount ought be reduced by the sum of $19,613, being the amount the wife asserts was paid by her to reduce the parties’ credit card liability that was outstanding at the date of separation.
Until the commencement of closing submissions, the husband rejected the wife’s position, notwithstanding his acknowledgment at [211] of his trial affidavit that the wife had a credit card liability of $19,613 at the time of the parties’ separation. Sensibly during his closing submissions, Counsel for the husband did not press that position.
Accordingly, the sum of $30,387 will be included at Item 12 in the balance sheet (being the sum of $50,000 less the credit card liability of $19,613 paid by the wife).
Item 12A – Motor Vehicle 3
The wife included Motor Vehicle 3 in the balance sheet at $23,000, whilst the husband placed nil value on that item. It was conceded by the wife’s Counsel during closing submissions that that item ought be removed from the balance sheet in circumstances where it is included in the valuation of motor vehicles at Item 5.
Having regard to that concession, I am satisfied that Item 12A ought be removed from the balance sheet.
Item 17 – WorkCover bill
The husband contended that he had an outstanding WorkCover liability in the sum of $101,116. The wife did not concede the existence of that liability. During his closing submissions, Counsel for the husband conceded that the husband’s contentions with respect to that liability could not be maintained and confirmed that the husband was not pursuing that matter. Having regard to that concession, Item 17 will be removed from the balance sheet.
Item 18 – Husband’s credit card
The wife contends that the husband’s credit card liability is $12,079 whilst the husband maintains that he has a liability of $13,138. It was submitted on behalf of the wife that the figure attributed to that liability by her is the amount disclosed in the most recently produced credit card statement being that dated 23 September 2023. Counsel for the husband made no submissions in relation to that item.
Given the failure of the husband to adduce independent evidence of the higher amount alleged by him, I prefer the evidence of the wife with respect to this liability and the sum of $12,079 will be included in the parties’ joint balance sheet at Item 18.
Item 19 – ATO tax debt
The wife contends that the tax liability is $71,141 being the amount that was due and payable as at the time of separation in July 2019. The husband contends that the liability is $174,407. Again, during the course of Counsel’s closing submissions, it was conceded by the husband’s Counsel that the value contended for by the wife was agreed.
Having regard to the husband’s concession, I am satisfied that the sum of $71,741 ought be included in the joint balance sheet at Item 19.
Item 20 – ATO Superannuation liability
The husband contends that he has a superannuation liability to the Australian Taxation Office in the sum of $6,127. The wife does not accept that contention and put the husband to his proof.
It was conceded on behalf of the husband during closing submissions that that alleged liability ought be omitted from the parties’ balance sheet. Accordingly, Item 20 will be removed from the balance sheet.
Item 21 – Loan from Ms R
The husband contends that he owes to his partner the sum of $206,309 and that that amount ought be included in the parties’ balance sheet. The wife rejects that position and maintains that there is no debt owing to Ms R. At the time of filing his trial affidavit on 24 September 2023, the husband asserted that the liability to Ms R was $191,000 (including interest).[4] The husband’s evidence in relation to that alleged liability is set out at [317] to [319] inclusive of his trial affidavit. He there deposes that since 4 January 2021 he has borrowed sums from Ms R “on a regular basis”. Further, he deposes that he has repaid some of those funds when in a position to do so. He deposes that he and Ms R formalised the arrangement by a Loan Agreement dated 1 January 2021.
[4] Trial affidavit of the husband filed 24 September 2023, paragraph 210.
In her affidavit filed 24 September 2023, Ms R deposes at [14] that she has maintained records in relation to the alleged loans to the husband and further, that as at May 2023 she was owed the sum of $166,200 (excluding interest).
Both the husband and Ms R were cross-examined in relation to the alleged liability. During her oral evidence, Ms R confirmed that she lives with the husband at F Street and makes no contribution to the mortgages or rates at that property. She confirmed during her oral evidence that the Loan Agreement was prepared by the husband’s lawyer, albeit that when the call was made for that lawyer’s file in respect of the Loan Agreement to be produced, the file could not be produced.
Ms R’s evidence in relation to the Loan Agreement was unimpressive; she could not recall the terms of the agreement. For example, when questioned as to the duration of the loan she stated that it was for a four-year period, notwithstanding that item 3 to the Schedule of the Loan Agreement clearly states that the due date for payment of the principal sum is six years from the date the borrower first draws an amount of the principal sum.[5] Further, Ms R could not recall the maximum sum the husband could borrow under the terms of the agreement. When questioned as to the current amount outstanding under the Loan Agreement, again Ms R was unsure, speculating that she thought it was $166,000 or $150,000.
[5] Exhibit R7, page 6 of 8.
Ms R confirmed during her oral evidence that she was in a happy de facto relationship with the husband, considered that they had a long-term future and wished to raise a family together. She also confirmed that she would not sue the husband to recover amounts outstanding pursuant to the Loan Agreement.
Ms R was also cross-examined as to amounts paid into her accounts by the husband from the sale of livestock, which amounts were subsequently transferred by her to the husband’s entity, O Pty Ltd. The husband during his oral evidence had conceded that such transactions had occurred. Ms R did not concede that the transfers by her to the husband’s accounts followed cash deposits into her account from the husband. There was a clear conflict between their evidence in relation to those transactions.
Those issues were compounded, having regard to the financial statement for the Dowd Pastoral Trust, which disclosed that the liability in respect of funds advanced by Ms R seemingly are liabilities of that trust and not the husband. For example, for the year ended 30 June 2022 the balance sheet for the Dowd Pastoral Trust disclosed a non-current liability to Ms R in the sum of $129,595 (Exhibit A7).
It was submitted on behalf of the wife that in circumstances where Ms R had no understanding of the terms of the alleged Loan Agreement, the loan is recorded in the financial statements for the Dowd Pastoral Trust and seemingly if a liability, it is that of the Pastoral Trust and not the husband, and where the evidence of Ms R is that she will not pursue her rights under the alleged Loan Agreement to recover the debt, that liability ought not be taken into account. Further, it was submitted that any sums advanced by Ms R were amounts advanced after the date of separation and were used solely by the husband for his purposes and as such, should not be included in the parties’ joint balance sheet. There is much force in those submissions.
The question of inter-family loans was considered by Nygh J in AF Petersens & AF Petersens (1981) FLC 91-095. At 76,669 Nygh J observed:
…It is fairly common in this Court to meet a situation where a parent has made a loan to a child which is in all respects is legally enforceable, but which is not in fact enforced and would not really be expected to be enforced. It is no doubt an “obligation” but if the obligation is not likely to have to be met, it should not be taken into account.
I am satisfied that the alleged loan from Ms R is not an obligation of the husband likely to have to be met and as such, is not a liability to be included in the parties’ balance sheet, particularly in circumstances where:-
·There is conflicting evidence of the husband and Ms R, in relation to the amounts advanced and repaid, and as to the quantum of the alleged liability; it is uncertain as to what amount, if any is outstanding under the alleged Loan Agreement;
·Ms R has stated that she does not intend to enforce her rights under the Loan Agreement. Accordingly, I am satisfied the husband is unlikely to have to meet his obligations under that agreement; and
·If there is a liability, it appears to be a liability of the Dowd Pastoral Trust and not the husband, having regard to the financial statements of that trust.
Having regard to those findings I am satisfied that Item 21 should be removed from the joint balance sheet.
Item 22 – EE Company debt
The husband alleged that he owed the sum of $36,134 to EE Company. The wife rejected that position and maintained that no funds were owing to that entity.
During closing submissions, it was conceded by the husband’s Counsel that that liability ought be excluded from the parties’ joint balance sheet. Accordingly, I will remove Item 22 from the balance sheet.
Item 23 – Wife’s credit card liability
The wife contends that she has a credit card liability of $1,114. No submissions were made on behalf of the husband in relation to that liability. Accordingly, I will include the sum of $1,114 at Item 23.
Item 24 – Superannuation Fund 1
The wife contended the value of her superannuation interest in that fund to be $229,000, whilst the husband maintained the value of her interest to be $617,847. During the course of closing submissions, counsel for both parties agreed that the value of the wife’s superannuation interest was $475,206, being the value attributed to it in the Form 6 Superannuation Information Form for that fund (Exhibit A10).
Having regard to the Superannuation Information Form, I am satisfied that the value of Item 24 is $475,206.
Item 27 – Legal fees paid by the husband
The wife contends that the legal fees paid by the husband, totalling approximately $187,000, ought be added back to the pool in circumstances where he has used the parties’ capital in order to meet that expense. In particular, she relies upon the husband’s withdrawal of approximately $60,000 from his superannuation fund to meet that expense.
Initially, it was submitted on behalf of the husband that the $60,000 drawn by him from his superannuation fund is included in the value at Item 25 of the joint balance sheet, and that in fact only $33,000 remains in the superannuation account after deduction of that amount. However, at the conclusion of closing submissions Counsel for the husband abandoned that contention and conceded that the husband had indeed drawn $60,000 from his superannuation account leaving a balance of $93,000.
As to the balance of funds applied towards legal fees, being approximately $127,000, it was submitted on behalf of the husband that he has been, in effect, “robbing Peter to pay Paul” in order to meet payment of legal fees; that is, he has not been paying other expenses, such as his taxation liabilities in order to meet his legal costs and that those fees were in effect, being paid out of income and not capital.
Counsel for the wife did not make any concession with respect to that issue in circumstances where it was submitted that the husband has failed to meet his obligations to make full and frank disclosure. It was submitted that the husband has not produced documents evidencing the source from which he paid his legal fees and in those circumstances that amount ought be added back to the pool.
The treatment of paid legal costs was considered in the Full Court decision of Chorn & Hopkins (2004) FLC 93-204. At [55] to [60] the Full Court held that:-
55.This decision appears to confirm the principle that where the payment of legal costs can be regarded as a premature distribution of funds (in which both parties have an interest), it is appropriate to add back those costs as a notional asset. It also confirms the principle that where funds have been borrowed to pay legal fees, and such liability is still outstanding, neither the payment of the fees nor the liability should be taken into account. The decision also supports the proposition that where it is determined that a payment of legal fees should be taken into account as a notional asset, any outstanding liability in respect of those fees should also be taken into account.
56.In summary, we consider that the above mentioned decisions of the Full Court establish that, while the treatment of funds used to pay legal costs remains ultimately a matter for the discretion of the trial Judge, in determining how to exercise that discretion, regard should be had to the source of the funds.
57.If the funds used existed at separation, and are such that both parties can be seen as having an interest in them (on account, for example, of contributions), then such funds should be added back as a notional asset of the party, who has had the benefit of them.
58.If funds used to pay legal fees have been generated by a party post-separation from his or her own endeavours or received in his or her own right (for example, by way of gift or inheritance), they would generally not be added back as a notional asset; nor would any borrowing undertaken by a party post-separation to pay legal fees be taken into account as a liability in the calculation of the net property of the parties. Funds generated from assets or businesses to which the other party had made a significant contribution or has an actual legal entitlement may need to be looked at differently from other post-separation income or acquisitions.
59.Outstanding legal fees themselves are generally not taken into account as a liability.
60.If in the exercise of the discretion, it is determined that legal fees already paid should be taken into account as a notional asset, then normally any liability associated with the acquisition of the monies used to pay the legal fees should also be taken into account.
In my view, there can be no question that the withdrawal of capital funds to meet payment of legal fees may properly be added back to the pool. The withdrawal of accumulated superannuation entitlements clearly falls into that category. Accordingly, I am satisfied that the $60,000 withdrawn by the husband to pay his legal costs should be added back to the pool available for division. However, in circumstances where it cannot be clearly identified that capital sums were drawn upon to meet the balance of the husband’s legal costs, the more likely position being that they were met from post-separation income, I am not persuaded that the balance of paid legal fees ought be added back to the pool.
I accept that the issues raised by the wife in relation to the husband’s non-disclosure are real. However, in my view those issues are more appropriately addressed in the consideration of the s 75(2)(o) factors.
Having regard to those findings the sum of $60,000 will be added back to the pool at Item 27.
THE ASSET POOL
Having regard to the above findings, I am satisfied that the parties’ legal and equitable interests for the purposes of the orders I am asked to make are as follows:-
ASSET LEGAL TITLE VALUE F Street Joint (Dowd Investment Trust) $815,000 D Street Husband $195,000 Stock on Farm Husband $ 39,190 Plant & Equipment (Wife’s figures including sold piece of equipment) Husband $ 97,150 Vehicles (Wife’s figured included sale proceeds for Motor Vehicles 1, 2 and 3) Husband $ 91,850 Painting Husband $ 1,000 Bank Accounts Husband $ 13,893 Bank Accounts Wife $ 90 Shares Wife $ 2,332 Part-Property Settlement (Wife accounts for balance of part property settlement in legal fees paid in ‘other’) Wife $ 30,387 Husband’s legal fees drawn from superannuation Husband $60,000 Assets subtotal $1,345,892 LIABILITIES Mortgage for F Street Joint (Dowd Investment Trust) $401,007 Overdraft Account Joint (Dowd Investment Trust) $ 51,924 FF Company Stock Mortgage Husband $156,357 FF Company Account Husband $ 10,458 Credit Card Husband $ 12,079 ATO Tax Owing Husband $ 71,741 Credit Card Wife $ 1,114 Liabilities subtotal $704,680 NET NON-SUPERANNUATION PROPERTY $641,212 SUPERANNUATION Name of Fund Type of Interest Member Value Superannuation Fund 1 Defined Benefit Wife $475,206 SMSF (shares & CDIA) Accumulation Husband $ 93,011 Superannuation subtotal $568,217 TOTAL (assets – liabilities + superannuation) $1,209,429 SECTION 79(2) FACTORS
Both parties seek orders for the adjustment of their property interests pursuant to s 79 of the Act. There was no challenge to the proposition that it is just and equitable to make orders for property settlement, particularly so in circumstances where the parties acquired the F Street property during the marriage and there is one child of the marriage. It is common ground that the parties will no longer have the joint use and enjoyment of their interests and in those circumstances, I am satisfied that it is just and equitable to make orders for the adjustment of their interests.
APPROACH
It was contended on behalf of the wife that the Court ought adopt a two-pool approach to the adjustment of the parties’ interests. It was submitted that the parties’ superannuation interests ought be treated as a separate pool to the non-superannuation interests. That proposition was put having regard to the fact that the wife has been a member of her superannuation fund since 1992, being approximately 24 years prior to the commencement of the parties’ cohabitation. The wife’s superannuation fund is a defined benefits scheme and as such, any benefits paid to her will be based upon a “final average salary” combined with the “multiplier” under the fund. In circumstances where the parties’ relationship endured for little more than three years (and on the husband’s case, for a period of only two years and nine months) it was submitted that the husband has made little, if any, contribution to the wife’s entitlements in that fund. It was submitted that having regard to the short duration of the parties’ relationship relative to the years of the wife’s membership and contribution to the fund, there was no basis for a superannuation split as contended for by the husband and rather each party ought retain their respective superannuation interests.
I accept that submission. In my view, to include the wife’s superannuation interests into the pool would visit a significant injustice upon her in circumstances where she has been a member of that fund for a period of 32 years, had been contributing to it for approximately 24 years prior to the parties’ cohabitation and has continued to contribute to it in the four years since the parties’ separation.
That view is bolstered in circumstances where the parties’ superannuation entitlements are matters that can properly be taken into account pursuant to s 75(2) of the Act.
CONTRIBUTIONS
The wife had the following interests at the commencement of the parties’ cohabitation:-
(a)Property at V Street, City W, which was sold by her in late 2016. The net proceeds of sale from that property were $172,134.[6] Prior to the sale of the V Street property, the wife deposes at [84] of her trial affidavit that she transferred to the husband the sum of $15,000 which was drawn down from the mortgage account secured against V Street. Accordingly, at the time of cohabitation, the wife had equity in the V Street property of approximately $187,000.
(b)In addition to that property, the wife deposed that she owned a motor vehicle valued at approximately $5,000,[7] and held an interest in Superannuation Fund 1 valued at $154,572 as at 30 June 2016.
[6] Trial affidavit of the wife filed 6 April 2023, paragraph 85.
[7] Trial affidavit of the wife filed 6 April 2023, paragraph 81.
During cross-examination, it was put to the husband that the wife had approximately $200,000 equity in the V Street property at the commencement of the cohabitation. The husband agreed.
The husband also conceded the initial contribution made by the wife in respect of her superannuation entitlements at [218] of his trial affidavit.
As to the husband’s initial contributions, it is common ground that he held the property at D Street which he had purchased in 2005 for approximately $54,000.
The husband also alleges that he held motor vehicles, plant and equipment valued at $63,350 and the photograph at the commencement of cohabitation. In addition, the husband had accumulated superannuation entitlements which were valued at $46,090 as at 30 June 2016.
At the commencement of cohabitation, the mortgage secured over the title to D Street had a balance of approximately $30,000. During closing submissions, it was conceded on behalf of the husband by his Counsel that at the time of cohabitation he had equity in D Street of between $50,000 and $60,000.
As to the husband’s contention in respect of Motor Vehicle 1 and Motor Vehicle 2, the wife alleges those vehicles were not owned by the husband at the commencement of the relationship and puts the husband to his proofs in relation to those matters.[8] The husband adduced no evidence confirming he held those vehicles at the commencement of the parties’ relationship. Further, the husband adduced no evidence as to the plant and equipment held by him at that time or its value.
[8] Affidavit in reply of the wife filed 4 October 2023, paragraph 87.
In the circumstances, and given my concerns that the husband’s evidence ought be treated with caution, absent independent evidence as to his ownership of those items, I am not satisfied on the balance of probabilities that he held an interest in those chattels at the commencement of the cohabitation.
Having regard to the concessions made by or on behalf of the husband, I am satisfied that at the commencement of the parties’ cohabitation, the wife had equity in her real property of approximately $200,000, as compared with the husband who held between $50,000 and $60,000 equity in his real property. In addition, I am satisfied that the wife had superannuation entitlements valued at in excess of $100,000 more than those held by the husband. Accordingly, I am satisfied that the wife made greater direct financial contributions than the husband at the commencement of their relationship. In the context of a short relationship, such contributions must carry significant weight.
As to contributions made during the relationship, both parties worked to the best of their abilities in their respective roles. The wife continued her employment as a public servant. Her income from that employment was greater than that earnt by the husband in his business.
It was submitted on behalf of the wife that she had made significant contributions to the acquisition of the parties’ property at F Street as a result of her sale of the property at V Street and contribution of the net proceeds of sale towards the purchase of F Street. It was also submitted that the husband had little or no borrowing capacity to fund that purchase, and it was only made possible as a result of the wife’s greater income earning capacity and capital contribution. Those matters were put to the husband during cross-examination; he made no concessions in relation to them. However, having regard to the disparity in the parties’ incomes and the contribution of the net proceeds of sale from V Street, I am satisfied on the balance of probabilities that the wife’s capital contribution and income were significant to the acquisition of the F Street property, and that absent those contributions, the parties may not have been in a position to purchase the property.
During 2018, the parties travelled to Country Z to undertake IVF treatment. The wife funded that treatment which ultimately resulted in the birth of X.
The husband contended that no improvements were made to the D Street property during the relationship. The wife rejected that proposition and at [92] of her affidavit in reply detailed the improvements she contends the parties’ effected to that property during the relationship. Those improvements included the installation of a balcony and spa, paving a patio, fencing, the installation of fire alarm systems, the installation of shipping containers and kitchens, the construction of an enclosed area for workers with furniture and television, the installation of ceilings and air conditioning in the workers’ quarters, the fixing of a bore for the house, the installation of large tool cabinets in the shed and the painting of the shed house. There was no serious challenge to the wife’s evidence during cross-examination. Given the detail provided by the wife in relation to the works undertaken at the property, I prefer her evidence with respect to those contributions.
The husband contended he has undertaken significant improvements to the F Street property after the parties’ separation. The difficulty with that contention is that the husband has adduced no independent evidence of those improvements having occurred. For example, there is no record in the Financial Statements for the Dowd Investment Trust, which is the registered proprietor of F Street, which indicates that there has been any capital expenditure on F Street in the post-separation period (Exhibit A8). Further, the husband has not produced documents evidencing the expenditure he alleges he has made in relation to those improvements.
During cross-examination it was put to the husband that the wife had produced pictures taken during the parties’ cohabitation of improvements affected to the properties. The husband conceded that such photographs existed. When it was put to the husband that he has produced no financial records that indicate expenditure on improvements on the property as alleged by him during the post-separation period, the husband provided a non-responsive answer, stating that he did not recall.
Having regard to the husband’s evidence, I am satisfied that the parties did affect improvements to the D Street property during the relationship and that such improvements were the result of their joint efforts. Further, absent independent evidence confirming improvements to F Street as alleged by the husband in the post-separation period, I am not persuaded on the balance of probabilities that such contributions were made by him.
The wife was pregnant with the parties’ only child at the time of their separation. As a result, the wife has been solely responsible for the day-to-day care of X in the post-separation period. The husband is paying only nominal child support for X. At the time of trial, the husband’s child support liability was approximately $29 per week.[9]
[9] Husband’s Financial Statement filed 5 October 2023, item 31.
Between July 2023 and the date of trial, the husband spent no time with X. Accordingly, the wife had sole responsibility for X’s care during that period. Having regard to those matters, I am satisfied that the wife has made significant post-separation contributions to the welfare of the family.
Since the parties’ separation, the husband has assumed responsibility for meeting the liabilities secured over the property at F Street. However, the husband did not make mortgage payments for a period of time, resulting in arrears of approximately $30,000.
Having regard to the wife’s greater initial contributions, coupled with her post-separation contributions towards the welfare of the family as a result of her care of X, in my view, contributions ought be assessed in the proportion of 55 per cent to the wife and 45 per cent to the husband representing a 10 percent adjustment in the wife’s favour. In dollar terms that represents an adjustment of approximately $64,000 in the wife’s favour, based on a pool of approximately $641,000, being the non-superannuation assets. That adjustment recognises the significant contributions made by the wife in respect of her initial contributions, her greater income-earning capacity during the parties’ short relationship and her care of the parties’ child in the post-separation period with very little assistance from the husband.
SECTION 75(2) FACTORS
The wife is aged 52 years and is employed as a public servant. In her Financial Statement the wife discloses income from that employment of approximately $99,000 per annum.[10]
[10] Wife’s Financial Statement filed 6 April 2023, item 9.
The wife submits that the husband has threatened her ongoing employment as a public servant as result of reports made by him of alleged misconduct in that role. During cross-examination, the husband admitted that he had caused his solicitor to report the wife’s conduct in disclosing work records to him. As a result of the husband’s actions the wife was placed on non-operational duties pending investigation of the complaint. Whilst the wife’s employment has continued, I accept that the husband’s actions adversely impacted it.
The husband is aged 46 years and is self-employed as a labourer and farmer. At Part D of his Financial Statement, the husband disclosed an income from his businesses of approximately $92,000 per annum. The husband has re-partnered with Ms R with whom he has one child. In his Financial Statement, the husband discloses at Part E that Ms R has an income of approximately $112,000 per annum.
During the course of cross-examination, it was put to the husband that all of his expenses were paid by O Pty Ltd. The husband responded that he was not sure. It was put to him that his Financial Statement discloses that he does not earn an income as such, but rather receives on the basis that the entities through which he conducts his businesses meet his expenses. Again, the husband responded that he did not know. In light of the evidence contained in his Financial Statement, I found the husband’s evidence in relation to those matters to be disingenuous.
It was also put to the husband that his legal fees in respect of these proceedings had been met by one of his entities, namely O Pty Ltd, which disclosed in its 30 June 2022 balance sheet a non-current investment described as “Legal Fees – Protection of Assets”.[11] The husband confirmed during his oral evidence that that entry related to the payment of his lawyers in these proceedings. Accordingly, having regard to that evidence coupled with the disclosures made by him in his Financial Statement, I am satisfied that the husband derives significant income and benefits from the operation of his businesses.
[11] Exhibit A7.
The husband contends that he has health issues which may impact his income-earning capacity. However, the husband did not adduce any admissible medical evidence to support those contentions. As a result, I am not satisfied that the husband’s future employment is likely to be impacted by his health.
The wife will continue to have primary responsibility for the care of the parties’ child, X, who is aged four years. The husband has paid nominal child support since X’s birth and having regard to the fact that the husband now has the responsibility for supporting another child, there is likely to be little change in his contribution to X’s support in the future.
The wife contends that the husband has failed to make full and frank disclosure in relation to his financial circumstances, including but not limited to the sale of stock and the stock numbers held by him. Accordingly, the wife contends that this is a relevant matter that warrants a further adjustment pursuant to s 75(2)(o) of the Act.
There is an obligation on all parties in property proceedings to make full and frank disclosure of their financial position (per Oriolo & Oriolo (1985) FLC 91-653; Weir & Weir (1993) FLC 92-338). That obligation is confirmed in Chapter Six of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth). The duty to make disclosure is absolute and one that continues throughout the proceedings in this Court.
The wife contended that the husband has not disclosed the number of livestock held by him, maintaining that he has far greater numbers of livestock than disclosed by him. During cross-examination, the husband confirmed that he had been asked for records regarding his livestock numbers over a long period. When questioned as to whether he had a spreadsheet for the number of livestock held by him in 2018 and 2019 he responded that he did not think so. The husband confirmed during his oral evidence that he had sold livestock in 2019; again, he could not confirm the number sold. Further, the husband confirmed that the wife’s lawyers had been informed that he does not keep records regarding his livestock numbers. The husband also confirmed that he had not maintained proper records for the number of livestock held by him in 2020 and 2021. Further, he conceded that he had not maintained a record of the natural increase of livestock between 2019 and 2022 inclusive.
The husband was also cross-examined as to the number of stock killed for rations. The husband confirmed that the reference to “killing for rations” means stock killed for personal consumption.
The husband was cross-examined as to the records of livestock as contained in the trading account for the Dowd Pastoral Trust for the year ended 30 June 2022 (Exhibit A7). That document recorded that the number of livestock killed for rations in that financial year was 665, leaving a closing stock of 789. It was put to the husband that 665 livestock would not be killed for rations (that is, personal consumption) in one year. The husband agreed. He could provide no explanation for the number of livestock apparently killed for rations in that year.
In light of that concession, I am satisfied that on the balance of probabilities that the husband has been less than frank as to the number of livestock held by him and killed for rations; in light of his evidence, I am satisfied that the Court cannot be confident that the value attributed to his livestock is accurate, given the uncertainty as to the number of livestock held by him.
In Chang & Su [2002] FamCA 156, the Full Court confirmed that it is open to a Court to take a more robust view to the adjustment of parties’ interests in circumstances where there has been non-disclosure, the effect of which has been to hamper the identification and value of the parties’ assets. I am satisfied having regard to the above matters that this is an instance where a more robust approach ought be taken in the adjustment of the parties’ interests, having regard to the identified non-disclosure by the husband.
Balancing all of the relevant s 75(2) factors, and taking all of the above matters into account, I am satisfied that there should be a further adjustment of 7 per cent in favour of the wife.
CONCLUSION
In light of my findings, both as to contributions and in relation to matters under s 75(2) of the Act, and taking into account the substantial superannuation interests to be retained by the wife, I am satisfied that a just and equitable result sees that the parties’ non-superannuation interests be divided in the proportions of 62 per cent to the wife and 38 percent to the husband Otherwise, I am satisfied that each party should retain their accumulated superannuation interests.
An adjustment in those terms results in the wife retaining non-superannuation assets valued at $397,551 plus her accumulated superannuation entitlements valued at $475,206 and the husband retaining non-superannuation assets valued at $243,660 plus his superannuation entitlements of $93,011.
The non-superannuation assets retained by the wife are:-
·Her savings $ 90
·Shares $ 2,332
·Her part-property settlement $ 30,387
TOTAL $ 32,809
The wife will also retain her credit card liability of $1,114, leaving her with net assets valued at $31,695. The husband will be required to pay her the sum of $365,856.
The husband will retain assets valued at approximately $243,660 comprising of:-
·F Street $ 815,000
·D Street $ 195,000
·Livestock $ 39,190
·Plant & Equipment $ 97,150
·Vehicles $ 91,850
·Photograph $ 1,000
·Savings $ 13,893
·Legal fees paid $ 60,000
·TOTAL $1,313,083
The husband will be responsible for the following liabilities:-
·F Street mortgage $401,007
·Overdraft $ 51,924
·FF Company loan $156,357
·FF Company account $ 10,458
·Credit cards $ 12,079
·Australian Taxation Office debt $ 71,741
·TOTAL $703,566
Hence, the husband will retain net assets of $609,517 from which he will be required to pay to the wife the sum of $365,856.
Having regard to the circumstances of the case, I consider that orders giving effect to that adjustment provides a just and equitable outcome as between the husband and the wife.
FORM OF THE ORDERS
The parties were largely in agreement as to the form of the orders to be made in this matter. The only matters in issue were as follows:-
(a)The timing for the payment to the wife. The wife seeks orders that the payment be made within 60 days. The husband seeks 90 days for payment. I am satisfied that the husband has had ample time to make appropriate arrangements to effect payment to the wife. In all of the circumstances I consider that the provision of 60 days to make the payment is appropriate and accordingly will order payment within that timeframe.
(b)The next issue is the question of who should be responsible for the conduct of the sales in the event that either F Street or D Street is to be sold to effect payment to the wife. The wife seeks that she have sole conduct of the sales whilst the husband maintains that he should be responsible for the sale of the property. It was submitted on behalf of the wife that if the wife has control of the sale process this will avoid the necessity of her having to return to Court to ensure the sales are affected in a timely fashion. There is much force in that submission, and in circumstances where I have concerns as to the husband’s candour with the Court, I am satisfied that orders that the wife have sole responsibility for the conduct of the sales in the event of the husband’s default is appropriate.
(c)At issue is also the question of whether the husband ought have right to occupation of the F Street property and the D Street property in the event they are to be sold, in which case the wife contends that she ought have sole right of occupation of those properties. Presently, the husband occupies those properties. Again, it was submitted on behalf of the wife that in circumstances where the husband has largely opposed orders sought by her and has been less than frank with the Court in relation to his obligations of disclosure, the wife ought have sole occupation to ensure that the sale process is not disrupted. I accept that submission and will make orders as sought by the wife.
(d)The wife also sought orders appointing an agent for the husband to execute the necessary sales authorities on behalf of the husband in the event of the sale of either F Street or D Street. Again, an order in those terms will ensure that the sales can be affected without interruption or disruption due to non-compliance with requirements that documents necessary to affect the sale be executed. Accordingly, I am satisfied that an order in those terms is appropriate.
(e)The wife sought orders that costs fixed and reserved in previous interim hearings be paid by the husband. The husband did not wish to be heard in relation to that matter. Accordingly, I will order that the costs reserved by paid by the husband. However, in circumstances where no submissions were made in support of the additional costs order sought by the wife, I will not order that sum be paid.
In addition to those matters, the husband sought an order that the wife execute the husband’s complaint to the Australian Financial Complaints Authority (“AFCA”) related to a loan obtained by him from the N Bank during the parties’ marriage. The background to that matter is as follows.
In order to be eligible for such assistance, the husband deposes that he was required to spend $100,000 on improvements to the property over a certain period of time and that he undertook improvement works on the F Street property totalling more than $85,000. The husband further deposes that upon advice from his accountant, he established the Dowd Pastoral Trust on 1 July 2019, with himself becoming trustee on 1 April 2020. It is the husband's evidence that the Dowd Pastoral Trust was established to enable him to qualify for the loan.
The husband deposes that despite assurances from N Bank that the loan would be approved, it was not, leaving him with a liability in respect of the improvement works. As a result, the husband made a complaint to the AFCA in relation to the bank’s conduct. The husband asserts that AFCA will not proceed with the complaint unless both parties to the loan consent. The wife's oral evidence is that she does not agree with the husband's complaint, that she was not party to the negotiations with the bank regarding the loan, that she does not trust the husband and in circumstances where she is not party to discussions with the bank regarding the loan, will not consent to the complaint.
During closing submissions, I invited Counsel for the husband to identify the source of power which would enable me to require the wife to execute the complaint in circumstances where she was not a party to the loan, has no knowledge of the circumstances in which the husband obtained the loan, and accordingly does not support his complaint. The husband’s Counsel could not identify the source of power. Having regard to the circumstances in which the loan is said to have been obtained and given that the wife was not a party to the negotiations related to that loan application, I am not persuaded that she ought be required to sign the complaint. Accordingly, that part of the husband’s application will be dismissed.
I certify that the preceding one hundred and ninety-six (196) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Johns. Associate:
Dated: 9 December 2024
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