CARPENTER & CARPENTER

[2014] FamCA 374

FAMILY COURT OF AUSTRALIA

CARPENTER & CARPENTER

[2014] FamCA 374

FAMILY LAW – PROPERTY SETTLEMENT – Just and Equitable – Contributions – Financial contributions – Where both parties earned an income – Gift from the husband’s father – Loans from third-parties – Interest accrual on loan from the wife’s parents – Non-financial contributions – Where both parties contributed to the care and welfare of the children and household – Post-separation contributions. FAMILY LAW – PROPERTY – Where a trustee for sale has previously been appointed – Distribution of proceeds of sale – Superannuation.

Family Law Act 1975 (Cth) ss 75(2), 79, 106A.
Sustainable Planning Act 2009 (Qld) s 339.

APPLICANT: Ms Carpenter

RESPONDENT: Mr Carpenter

FILE NUMBER: BRC 3510 of 2011

DATE DELIVERED: 6 June 2014

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Forrest J

HEARING DATE: 21, 22 & 23 May 2014

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Gunn

SOLICITOR FOR THE APPLICANT: Pippa Colman & Associates

FOR THE RESPONDENT: Mr Carpenter in Person

Orders

1. That the Husband and the Wife shall immediately after 30 June 2014 do all things necessary, including signing all requisite documents, to finalise all outstanding annual financial statements and annual tax returns, and the requisite audits of all of those annual financial statements of their self-managed superannuation fund, the F Super Fund.

2. That once the member entitlements of each of the Husband and the Wife in the F Super Fund as at 30 June 2014 are determined, the Wife shall give the trustee company due notice of an election to roll her member benefit entitlement as at 30 June 2014 into any other complying superannuation fund of her nomination and the trustee of the F Super Fund shall do all things necessary to cause the Wife’s member benefit entitlement to be rolled out in accordance with the Wife’s election.

3. That as soon as the Wife’s member benefit entitlement in the F Super Fund is rolled out into another complying superannuation fund of the Wife’s nomination pursuant to paragraph (2) of these Orders, the Wife shall forthwith, at the Husband’s expense sign all documents and do all things necessary to transfer to the Husband or his nominee all of her right, title and interest, including all of her shareholdings, in the company, I Pty Ltd (ACN …) and to resign as an office holder in that company and also as a member of the F Super Fund.

4. That pending the Wife’s roll-out of her member benefit entitlement in the F Super Fund each party is restrained from dealing with, charging or encumbering any of the assets of the F Super Fund other than in accordance with the terms of these Orders.

5. That the Wife shall forthwith, at the Husband’s expense, sign all documents and do all things necessary to transfer to the Husband or his nominee all of her right, title and interest, including all of her shareholdings, in the companies, P Pty Ltd (ACN …) and Q Pty Ltd (ACN …) and to resign as an office holder in those companies.

6. That the Wife shall, at the Husband’s expense, transfer to the Husband and/or assign to the Husband at the Husband’s expense any entitlement she has in respect of any of the companies named in these Orders or under any trust of which the Husband or any of the companies is trustee including any loan account entitlements, thereby renouncing any entitlements to any loan account or beneficiary entitlement in any of those companies or under any of those trusts. 

7. That when the Wife has complied with paragraph (3) of these Orders, she shall also transfer to the Husband and/or assign to him at his expense any entitlement she has under any trust of which I Pty Ltd is trustee including any loan account entitlements, thereby renouncing any entitlements to any loan account or beneficiary entitlement under any of those trusts. 

8. That save for any liabilities of the F Super Fund or as otherwise provided for in these Orders, the Husband indemnifies the Wife in respect of all past, present and future liabilities arising as a result of the Orders herein or from her involvement in any of the companies named in these Orders or in any trust of which he or any of the companies is trustee including any and all taxation liabilities.

9. That the Husband either personally or via his involvement in the companies named in these Orders, be restrained from attempting or causing or permitting any of the companies to attempt to recover from the Wife any monies allegedly owing to the Husband or any of the companies, including as trustee, by the Wife, and that the Husband hereafter indemnify the Wife with respect to any such liability.

10. That the Husband shall collect and retain as his sole property absolutely the Jeep … motor car currently located on one of the real properties being sold by the Trustee for Sale pursuant to Orders of the Court of 27 May 2014.

11. That the Wife shall retain as her sole property absolutely a yellow couch and a video camera at the value of $1,450.

12. That the Wife shall retain as her sole property absolutely all and any jewellery in her possession.

13. That the Husband shall also retain as his sole property absolutely the following chattels:

    (i)A wooden cot and change table;

    (ii)A microwave oven;

    (iii)Children’s bunk beds;

    (iv)An antique Victorian bookstand;

    (v)French cookware;

    (vi)An antique hallstand with marble top;

    (vii)A restored industrial wooden side table;

    (viii)A flat screen TV;

    (ix)A blue ray player;

    (x)A CD/DVD player;

    (xi)A BBQ;

    (xii)A teak deck table and 6 teak wooden chairs;

    (xiii)A Miele washing machine;

    (xiv)Stereo equipment;

    (xv)A queen bed frame and mattress;

    (xvi)A 3 piece white sofa and pillows;

    (xvii)An antique chest of drawers;

    (xviii)A restored antique side table in master bedroom;

    (xix)Ceramic garden pots x 6;

    (xx)Camping equipment;

    (xxi)A Walker mower;

    (xxii)A box trailer;

    (xxiii)A Toyota motor vehicle;

    (xxiv)An outside day bed;

    (xxv)Chairs and round wooden table;

    (xxvi)Wife’s pine dresser,

    (xxvii)Kitchen spices;

    (xxviii)Recipe books;

    (xxix)Green fold out couch;

    (xxx)Coffer with turned legs;

    (xxxi)Kauri pine coffee table;

    and all of these chattels shall have the total value of $22,215. 

14. That the Trustee for Sale appointed by the Orders of this Court of 27 May 2014 shall distribute the net sale proceeds of the two real properties to be sold by him pursuant to those Orders, as the sale proceeds of each property become available, as follows:

    (i)To discharge any and all liability owed to the Sunshine Coast Regional Council and Unity Water in respect of the ownership of the two real properties; then

    (ii)In payment of his reasonable costs and disbursements incurred in the performance of his obligations pursuant to those and these Orders; then

    (iii)In payment to the Wife’s parents of the principal sum of $209,065 plus interest on that amount calculated at 6.4 per cent per annum from 12 March 2013 compounding on annual rests until date of payment; then

    (iv)In payment to the Husband’s mother of the sum of $300,000; then

    (v)In payment to the company, V1 Group Pty Ltd of the sum of $20,000; then

    (vi)In payment to W Accountants of the sum of $4,840; then

    (vii)In payment to Y Real Estate Agents of the sum that discharges all of the parties’ liability to them (currently in the order of $2,100); then

    (viii)In payment to the company, Z Pty Ltd of the sum of $1,390.12; then

    (ix)The balance to be distributed as follows:

    (I)to the Husband an amount equal to (72.5 per cent x A +(B+C)+(D+E)) – (B+D);

    (II)to the Wife an amount equal to (27.5 per cent x A+(B+C)+(D+E)) – (C+E);

    WhereA =    The total net proceeds of the sale of the two real properties after payment of all the liabilities to be paid pursuant to paragraph (14)(i) – (viii) of these Orders;

    B = The Husband’s member benefit entitlement in F Super Fund as at 30 June 2014;

    C =The Wife’s member benefit entitlement in F Super Fund as at 30 June 2014;

    D =The sum of $22,215 being the value of the chattels to be retained by the Husband pursuant to these Orders;

    E =The sum of $1,450 being the value of the chattels to be retained by the Wife pursuant to these Orders.

15. That the Husband retain as his absolutely his member benefit entitlement in the F Super Fund.

16. That the Wife retain as hers absolutely her member benefit entitlement in the F Super Fund.

17. That save as otherwise provided in these Orders, the Husband indemnifies the Wife and shall keep her indemnified against all and any liability for any debts to his mother, his father and/or his sister, and/or to his friend Mr DD and/or to any company part of the V1 Group of companies.

18. That save as otherwise provided in these Orders, the Wife indemnifies the Husband and shall keep him indemnified against all and any liability for any debts to her parents and/or any other member of her family and/or to any other third party. 

19. That in default of either party doing all acts and things and executing all such documents as are necessary to give effect to these Orders, a Registrar of the Family Court of Australia at Brisbane shall be 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.

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

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 3510 of 2011

Ms Carpenter

Applicant

And

Mr Carpenter

Respondent

REASONS FOR JUDGMENT

1. The parties to these proceedings, Ms and Mr Carpenter, began to live together in 2000 in the USA whilst they, both Australians, were over there living and working for a few years. They married in December 2002 and separated in April, 2011 and divorced in May 2013. Their 11 year relationship produced three children who are now 9, 7 and 4 years old. The parenting of those children is shared between the parents, regulated by orders of this Court made after a contested hearing in late 2012. The children live with the father and spend 5 nights per fortnight during school term and half of their school holidays with the mother. The father has sole parental responsibility for all decisions about major long term issues. Those orders were appealed against by the mother and the Full Court’s judgment on the appeal remains reserved.

2. Each of the parties also seeks property adjustment orders from the Court pursuant to s 79 of the Family Law Act 1975 (Cth) (FLA). Each submits that justice and equity as between them necessitates property adjustment and each agrees that the well-known four step process of determining property adjustment orders that are appropriate and just and equitable is the preferred method for determining the orders to be made adjusting their property interests. I accept those submissions and am satisfied that it is just and equitable to make property adjustment orders between them and that the four step process is an appropriate method of determining those orders.

3. There is an enormous amount of mistrust between the parties which in my view has prevented them from being able to resolve their property and financial affairs. There is agreement though about some key matters. They agree that there is real property, owned through family trusts which they control, that must be sold as part of the finalisation of the property adjustment. They agree that one of those pieces of real property, a piece that they were hoping to develop, sub-divide and sell off in eighteen different lots, should sell as one lot for somewhere between $630,000 and $900,000.  They agree that another single piece of real estate upon which there is a dwelling that has been rented out, owned by another trust, must also be sold. They agree it is worth around $370,000. Indeed, I made orders soon after the conclusion of the trial appointing a Trustee for Sale to sell both of those properties and to hold the proceeds pending the delivery of this judgment.

4. The parties also agree that there is a self-managed superannuation fund of which they are both members. Their membership entitlements are almost equal, with the wife’s being just slightly more than the husband’s. It is agreed that the total assets of the fund are held in cash investments currently worth around $145,000.

5. They have some personal possessions in the form of furniture in each party’s possession and each retains a motor car from the relationship. After some discussion with the parties at the start of the trial, agreement was able to be reached as to the value of these items and as to who was to retain them after this trial. In short, the personal property of the parties was agreed to be worth $23,665. There are also a number of relatively small miscellaneous debts related to the property ownership that must be paid, about which there is agreement. Those shall be set out later.

6. There is serious disagreement between the parties about the proper treatment of large amounts of money received from each of their sets of parents during the course of the marriage, although there is no disagreement that money came into the parties’ marriage from each of their respective sets of parents.

7. The wife’s parents put in $210,000 that went into one of the developments being undertaken by the parties. The wife asserts it is a repayable loan, attracting interest that now takes it up to an amount of approximately $244,000. The husband argues it is not a loan but was an equity investment in the project.  I am quite satisfied the husband is wrong about that and that the parties owe the wife’s parents a sum of money, the determination of the amount of which I will return to.

8. In addition, the husband’s mother transferred $300,000 to the parties during the course of their marriage.  The husband asserts that was an interest free loan and that his mother is owed $300,000. The wife agrees $300,000 came from the husband’s mother’s account to one of the parties’ accounts. Ultimately, at the end of the trial, the wife informed the Court that she accepted that $300,000 should be repaid to the husband’s mother from the sale proceeds of the two properties. The orders I will make will provide for that.  

9. The husband’s father also transferred $200,000 to the parties during the course of their marriage. The husband asserts that too was an interest free loan that must now be repaid. The wife asserts it was a gift. I am satisfied that it is to be treated as a gift in the determination of property adjustment orders in this matter. I will say more of this matter later.

10. The parties are also in dispute about the qualitative assessment of their contributions made throughout their relationship and how that should translate, quantitatively, into property adjustment. They are also in dispute as to the requirement for there to be any further adjustment having regard to the matters set out in s 75(2) of the FLA, in order to ensure that the orders are just and equitable.

11. The wife also argues that the husband has deliberately failed to comply with disclosure obligations and that the result should be that the Court takes a robust approach to the determination of the property of the parties or either of them when considering what orders to make. I shall return to a greater discussion of this issue, but I am not persuaded that this case is one in which such a robust approach would be appropriate or just and equitable.

Some relevant factual history

1. The parties first met when they attended the same high school in Melbourne in the mid 1980’s. They began a serious relationship as adults sometime in 2000 when both of them were living and working in California in the USA. In affidavit and oral evidence the husband asserted that they had begun living together as a couple on or about 1 December 2000. He was not challenged on that in cross-examination. In affidavit evidence the wife variously asserted that they “began living together in [City EE] California (USA) on or about December 2000” and “we began living together in a unit located in [City EE] California in late 1999/early 2000.”  The husband, when giving oral evidence, asserted that he had not actually travelled to the USA until May 2000 and that after he arrived he lived by himself for several months. That was not challenged.  Accordingly, I find the parties began living together in California in December 2000.

2. At that time, the husband was working for a company in an information technology role. He was originally employed on US$110,000 per annum, which increased to US$130,000 per annum before he began living with the wife. He had a Ford motor car that he had bought in the US. He had managed to save about US$50,000 from his US employment by the time he commenced cohabitation with the wife. He also had some savings, another motor car and some accumulated superannuation in Australia at that time.

3. The wife was employed with an American company earning US$70,000 per annum when cohabitation commenced. She owned a motor car and had about AUD$30,000 in savings.

4. After the parties commenced living together, they roughly took turns paying the rent and for the purchase of groceries, but in or around the middle of 2001, the wife lost her paid employment and then began working on her own project in the entertainment industry. From that time on, until they left the US and returned to live in Australia, the husband’s income was used as the sole source of their financial support, meeting all of their costs of living.

5. From around the middle of 2001, the husband began providing his personal services on a contract basis through a consulting company operated by a friend of his. From that time, until they returned to Australia, he was charging hourly rates from between US$120 to US$175 per hour for that work.

6. He had made arrangements with his friend’s company to be paid a salary of US$60,000 per annum which he received in the US, with the balance of his earnings being paid by his friend’s company to a bank account that had been established in the European principality of Liechtenstein. It seems that the husband and the wife were able to readily survive in the US on the money the husband was being paid there and managed to save most, if not all, of the money that was sent to the bank in Europe during that period. At the same time as the husband worked as a contractor, for anything from 60 to 100 hours per week, the wife devoted herself to entertainment industry project. It actually cost her several thousands of dollars and it was agreed that ultimately it was not commercially successful, costing much more than it realised in sales. Accordingly, for the last two years of their residence in the US, the wife did not earn income that was contributed to their relationship.

7. In addition, for eleven months between mid-2002 and mid-2003 the husband was contracting to a Nevada based company and was living and working from Monday to Friday each week in City FF in that State. The wife remained living in California. For weekends, either the husband would travel back to California to be with the wife, or the wife would travel to City FF to be with the husband. Neither was providing care and homemaking services for the other during that period except on those weekends.

8. The parties returned to Australia and married in Victoria in December 2002. It is agreed that the wedding, the honeymoon and the wedding rings, costing a total of around AUS$50,000, were also paid for by money saved from the husband’s US earnings.

9. When the couple finally returned to live in Australia in mid-2003, the relatively large amount of approximately AUD$782,000 was transferred to an Australian bank account. It is agreed that all of this money was saved from money earned solely by the husband in his US based employment between May 2000 and May 2003.

1. In or around September 2003, the parties bought a house in Melbourne for around $570,000. The husband did not return to employment and began to trade on the stock market and also got involved in the property industry. The wife began working in contract business services and her services in that respect were provided through a company the parties created.

2. In 2004, the parties joined in a property development partnership with the wife’s parents and some associates of theirs and a property development was undertaken at Town GG in Victoria. The parties, through corporate and trust entities invested money, about $100,000 in that development. They moved to Town GG during the time of the development and the husband involved himself in management and sales as lots were sold off. Just under $200,000 pre-tax profit was made on their  investment after return of their capital, and the husband also generated about $45,000 gross in commissions earned on the sales of lots over four financial years.

3. The parties established their self-managed superannuation fund in 2005 and began contributing and rolling over superannuation into their respective member accounts held within it.

4. Their first child was born in May 2005. After some months of full-time parenting, the wife recommenced her contract business services work. She did much of that from home, although from time to time she was required to travel away and spend days working out of the home.

5. In mid-2006, the family moved to Cairns for three months before moving back to Town GG. Their second child was born in March 2007 and, once again, after some months of full-time parenting, the wife recommenced her contract work.

6. In late 2008, the parties purchased land at Town GG for $300,000. $100,000 came from their savings and $200,000 came from the husband’s father. It was the parties’ intention to build a family home on that land and I am satisfied that it was for that purpose that the husband’s father determined to assist his son and daughter-in-law by giving them the money.

7. However, the parties did not build on that land, but rather moved to live in a property belonging to a life-long friend of the husband’s on the Gold Coast. They sold the Town GG land for a small profit and retained all of the proceeds, using it to purchase more land later in 2010.

8. Their third child was born in March 2010.

9. The property they purchased in 2010 is one of the blocks on the Sunshine Coast that is now to be sold by the Trustee for Sale. They purchased it for $787,000 using $578,000 from their savings (including the sale proceeds of the Town GG property) and $200,000 contributed by the wife’s parents. The property was purchased in the name of a company, as corporate trustee for a family trust. The wife’s parents originally contributed the sum of $200,000 pursuant to an agreement that they were to be equity partners in the development venture. The husband later asked them to contribute another $10,000 and they did. Later he asked them again to contribute more money. They did not want to do that and actually asked if they could convert their position from an equity position to one of creditor for the full amount invested to that point in time. Although the husband was not happy about that, he agreed to the change. Effect to the changed terms was given by a written agreement that acknowledged the sum of $209,065 as a debt to the wife’s parents. It also included provision for the payment of interest at the same rate as “other monies [the wife’s parents] have on investment in an online account. (eg. currently RoboDirect @ 6.4% Interest rate to be adjusted quarterly, we can keep a record of this.”  There was also a term that said:

   Commencement date of interest accrual to be the same date as Council approval for the [Town HH] development.

   I shall return to this issue later.

10. The other Sunshine Coast real property that is now to be sold by the Trustee for Sale was purchased in May 2010 for $385,000.  The $300,000 that was transferred to the parties by the husband’s mother in February 2010 was contributed to the purchase of this property.

11. In September 2010, the parties and their three children moved from the Gold Coast to live at Town JJ on the Sunshine Coast in accommodation that they rented, so that the development of the two properties could proceed. By this time, the husband was engaged in overseeing the proposed development projects and the wife was full-time parenting and their financial resources were under serious strain with much money going into the proposed development of the property.  In early 2011, the husband’s life-long friend, Mr DD, a very wealthy man, transferred $20,000 from one of his companies to the account of one of the companies of the parties. That money, I am satisfied, was advanced as an interest free loan.

12. The parties separated in early April 2011 and have lived separately and apart ever since, being involved for most of that time in high conflict and litigation in this Court.

13. The evidence establishes that the wife earned the following annual amounts of gross income from her contract work between the parties’ return to Australia and their separation: $49,126, $78,585, $27,805, $19,533, $20,800, $116,369, $128,412, $1,373. That is a total of $442,003.

14. The husband’s evidence is that he earned in that same period, in addition to the $44,765 in sales commission that I have already noted, a net amount of $130,865 in trading profits.  The $196,361 profit on the investment in the Town GG property development was also earned as well as $18,695 in rental income for the rent of a dwelling on one of the Sunshine Coast properties. The husband asserted that income was earned principally through his efforts. I am satisfied that of the two parties, the husband certainly made the major personal contribution to the generation of that income from those sources, although I accept that the parties’ involvement in the Town GG property development was directly related to the wife’s parents and their friends inviting them to be partners in the development.

15. The husband also gave evidence that $169,446 in interest income was generated between 2003 and their separation. I am satisfied that was mostly attributable to interest earned on the capital that was transferred back to Australia from Liechtenstein after the parties returned to live in Australia. That was capital that had been generated by the husband in the US.

16. After the children were born, both of the parties were engaged in income producing activity that they were able to undertake by working out of the home that they lived in at the time. The wife says though that she was nevertheless the principal provider of parenting to the children. On the other hand, the husband asserts that he did more of the parenting than the wife as she was often out of the home with her contracting work and that he cared for the children whilst she was not there.  The evidence is that household tasks were, however, divided between the parties with the husband doing washing, folding, shopping, some of the cleaning work and other things and the wife doing cooking, hanging out washing, writing out shopping lists and other such things. A household made up of the parties and their three young children, in which both parents were doing what these two were doing, was, no doubt, a very busy household requiring much effort from both parents to continue to function effectively.

17. At around the time of their separation, the husband had registered a business name for a property industry business that he intended to begin operating. He did not do that, but rather, in late 2011, began working for a property industry business called Company KK in Town LL between Brisbane and the Sunshine Coast. That business is operated by a company, KK Pty Ltd, all of the shares in which are owned by a company called V2 Group Pty Ltd, which is itself owned by Mr DD’s elderly mother.

18. The evidence is that V2 Group Pty Ltd advanced around $270,000 to KK Pty Ltd that enabled that company to purchase an existing property industry business. The husband is a director of the company and holds the relevant licence. He has been running the property industry business for the company since it was purchased. His affidavit evidence is that he has an agreement with the company that he will receive 20 per cent of the profit the business makes. For the financial year ended June 2012, it made a loss of $45,000 and a further loss of about $11,000 in the 2013 financial year. In his oral evidence, under cross-examination, the husband said that he had received income from the company of around $4,000 for the financial year ended 30 June 2013 and for this financial year to date he had received income of around $22,000 to $24,000 from the company. He gave evidence that the business is actually growing. In particular, he said that the number of investment properties that the business has under management is gradually increasing with the company employing a staff member to manage that side of the business. In respect of sales, the company has two sales staff working for it on commission arrangements.

19. The husband is in a new relationship, living with his new partner. She is also employed in an administrative role with the company on a part-time basis. She has her own children of a former relationship as well.  

20. The husband has spent about $350,000 on legal representation, most of that in connection with the parenting proceedings in this Court and the Full Court of this Court, but some in respect of these property adjustment proceedings as well. That entire amount has been paid by the husband’s life-long friend, Mr DD, and the husband is indebted to him in respect of that. He is to repay him, if he can, from what he receives as a result of the property adjustment orders made in these proceedings.

21. The wife’s counsel put to the husband in cross-examination the proposition that the $350,000 paid in legal fees that was paid by Mr DD is actually money that belonged to the husband and the wife that was diverted by fraudulent subterfuge between the husband and his friend to give it the appearance of a debt now owed by the husband to his friend. The husband denied that and I accept his denial. With respect, the wife’s counsel was unable to persuade me that the evidence proved the parties had that amount of money available to be diverted as alleged or that the husband did anything like that alleged in any event.

22. The husband gave evidence that he has also had to borrow about $50,000 from his sister to help him survive financially over the last few years. I accept that he has.

23. Since the parties’ separation in 2011, the wife has been very heavily involved in the preparation of her parenting and property adjustment orders cases in this Court.  She has only undertaken private contract work such as she did during the relationship on one occasion and that was for a friend of hers. She contracted and provided that work through her parents’ family trust and the $15,000 in fees that work generated was invoiced by and paid to that family trust. The wife said she did that out of a sense of responsibility to her parents who, the evidence establishes, have paid out about $140,000 for the wife since separation.

24. Otherwise, the wife has gone back to tertiary studies. She commenced studying towards a bachelor degree at universtiy last year. She passed the first few subjects that she undertook last year, but after commencing this year’s first semester subject found that the workload was too much for her whilst she was preparing for the trial of this matter and she discontinued the subject. The wife has a long way to go before she will be finished the degree, currently not expecting to finish it much before 2020.  She is otherwise not in employment and her only income is student Austudy and Centrelink benefits. She cares for the children for five nights per fortnight and half of their school holidays. She also receives financial assistance from her parents.

25. Neither party currently pays child support to the other.

The Property of the parties

1. At the end of the trial, balance sheets contended for by each of the parties were handed to the Court.

2. Each agreed that their property consisted of the two properties on the Sunshine Coast that are to be sold by the Trustee for Sale I appointed.  One of those properties, they had agreed should sell for around $370,000, the other for somewhere between $630,000 to $990,000. In his balance sheet, the husband listed the two properties at an estimated value of $1.1 million. The wife’s balance sheet did not put a value on them.

3. The value of the self-managed superannuation fund was agreed to be $145,707. The best evidence of the parties’ member entitlements appears to be the Summary of Member Benefits as at 30 June 2011, nearly three years ago. Financial statements for the 2012 and 2013 financial years have apparently not been completed and lodged as required due to disagreement between the parties. The husband’s member entitlement as at 30 June 2011 was $64,683 and the wife’s member entitlement as at that date was $69,190. Those two values equal $133,873 in total and the fund has increased in total value since then by just under $12,000.  With no additional contributions made by either party in the meantime, one would expect the wife’s pro-rata share of the total to have grown to something like $75,300 and the husband’s to have grown to about $70,407.  I will consider their respective superannuation interests now to be valued at $75,000 and $70,000 respectively, the wife’s being the higher of the two values.

4. As to their chattels, I am satisfied that the wife has a few items in her possession that she should retain and that those items are worth $1,450. There is a Jeep motor vehicle that the wife says is worthless but that the husband says might be worth something. The wife told the Court that she was content for the husband to retain that vehicle at nil value to do with it what he wants. The husband agreed to that course. All other chattels are to be retained by the husband and ascribed a value of $22,215. That is the figure, taken from a schedule prepared and attached to an affidavit of the husband by him, that the parties indicated agreement to during the course of the trial. The wife’s balance sheet handed up at the end of the trial had some slightly different figures to those but the difference could not be explained to me by her counsel.

5. The liabilities that I find exist and that are to be paid from the sale proceeds of the two real properties will include $300,000 to the husband’s mother and $20,000 to the company, V1 Group Pty Ltd.

6. There are some debts owed to the Sunshine Coast Regional Council and Unity Water that remain unpaid. They are gradually being paid off by repayment plan entered into by the husband with those entities. The balance owed will, I am satisfied, be paid out of the sale proceeds of the two blocks of land by way of adjustment to the sale price in favour of the purchaser to reflect those amounts still owing at settlement. As at the swearing of the husband’s trial affidavit in September 2013 those debts totalled around $13,634.

7. There are amounts owed to the accountants, W Accountants. I find those amounts, totalling $4,840, (not including interest which I could not be satisfied the parties actually owed) are liabilities to be taken into account and to be paid from the proceeds of sale of the properties by the Trustee for Sale.

8. There is a debt of somewhere approximating $2,100 owing to Y Real Estate Agents, a real estate agency that sold a property for the parties, for advertising that was done. I find that is a debt to be taken into account and that the Trustee for Sale should also pay whatever amount is required to discharge that liability from the proceeds of sale of the real properties.

9. There are two debts owed to Z Pty Ltd totalling $1,390.12 that I also consider are liabilities to be taken into account and to be paid by the Trustee for Sale from the sale proceeds of the two properties.

10. Finally in respect of liabilities, as I have said I consider the amount of $209,065 is owed to the wife’s parents plus interest from the date of Council approval for the development of Lot MM.   

11. There was disagreement between the parties as to what constituted Council approval for the purposes of the commencement of the accrual of interest. Both the husband and the wife’s father agreed in evidence that there was absolutely no discussion between them as to the meaning to be ascribed to the term “Council approval” used in the written agreement executed by them. In those circumstances, I am satisfied that the meaning to be ascribed to the term should be the meaning that the term is taken to have pursuant to the Sustainable Planning Act 2009 (Qld), the Queensland legislation pursuant to which the development application process for this property would have been governed.

12. Section 339 of that Act, sets out when approval of a development application is said to take effect. Relevantly, in so far as the facts of this case are concerned, the section provides that if an application is approved, or approved subject to conditions, the decision notice, or if a negotiated decision notice is given, the negotiated decision notice, is taken to be the development approval and has effect when the decision notice is given or, if a negotiated decision notice is given, the negotiated decision notice is given. However, the same section goes on to say that if an appeal is made to the court then approval has effect when the appeal is finally decided or withdrawn.

13. It seems that in this case, a decision notice was given sometime in March 2011 and the wife’s father thought interest began to accrue from that time. He even sent an email to the husband at that time suggesting that it “looks like our loan interest can start from here”. However, the husband had said in his prior email “I expect we will require a “negotiated decision” due to council demanding items we disagree with”. That suggests to me that the husband always considered that determining when “Council approval” took effect would be done in accordance with the provisions set out in the Act. I am satisfied that in the absence of clear agreement between the husband and the wife’s father-in-law as to any other meaning being given to “Council approval” that the date upon which Council approval should be determined to have taken effect for the purposes of their agreement should be in accordance with the provisions of that relevant legislation.

14. In this case, the evidence establishes that an operational works negotiated decision notice issued on 12 March 2013. There was no evidence that an appeal was made to a Court after that notice issued. Accordingly, I consider “Council approval” to have taken effect when the negotiated decision notice was given – 12 March 2013.

15. No evidence was adduced of there being any interest rate different from the 6.4 per cent interest rate set in the written agreement. Accordingly, I consider that the debt of $209,065 is now attracting interest at 6.4 per cent per annum from 12 March 2013. That would be $13,380.16 and would take the amount owed as at 12 March this year to $222,445.16. That amount continues to attract interest until principal and interest is paid. I will be ordering that the Trustee for Sale calculate the full amount of principal and interest owing as at the date of repayment to the wife’s parents out of the sale proceeds of the properties and, given that it is the only debt attracting interest, it should be the first amount paid. The interest rate of 6.4 per cent will be the rate the Trustee is ordered to apply and it will be compounding calculated in annual rests with the interest for this current year to be determined pro rata.

16. Both parties ran cases that the Court would be satisfied that notional amounts should be added back to the pool of net property and superannuation interests when determining the appropriate orders that are just and equitable. Neither was able to persuade me that any amount should be added back. The money the husband argued should be added back was money the wife took from accounts at separation. I am satisfied that she spent that money on reasonable living expenses for her and the children in the months following. It should not be added back. The wife argued for much larger amounts to be added back. Ultimately, counsel for the wife did not press the argument that all or part of a sum of $100,000 that the wife considered the husband had not accounted for should be added back. That was a sensible concession on the part of counsel for the wife as the evidence just did not support a contrary position.

1. Additionally, the wife, with demonstrated resolute determination, maintained a case that included the following propositions:

   (i)That the husband had deliberately avoided disclosing critical documents from throughout the entire history of the marriage with a view to hiding factual matters prejudicial to his case;

   (ii)That the husband was probably working remotely via the internet for US companies throughout the marriage and since, earning substantial income that he has failed to disclose;

   (iii)That the parties had a lot more money than the husband informs the Court that they had and that the husband acted over many years to create a false impression that they had less, including by taking money by gift from his father, loan from his mother and by taking the monies from the wife’s parents when that money was not needed by the parties;

   (iv)That the husband and his life-long friend, Mr DD, have conspired to commit fraud on the Court and the wife in these proceedings by disguising the parties’ money as loans from Mr DD;

   (v)That the husband and Mr DD have conspired in the same way to ensure that the property industry business, which is really the husband’s, appears to be part of Mr DD’s business group.

2. Whilst I am satisfied the husband did demonstrate an imperfect attitude to disclosure, particularly in respect of the financial records of the property industry business he currently manages for the company that owns the business, of which he is a director but not a shareholder, I was not persuaded that any of the propositions advanced by the wife that I have set out in the previous paragraph were sustainable on the evidence and I reject each and every one of them.   

3. Accordingly, the gross value of property and superannuation, taking the provisional figure of $1,100,000 for the two properties into account, is $1,269,372.

4. The liabilities that are to be considered against that total approximately $341,964 plus the principal amount of $209,065 and whatever interest accrues on that (currently giving a total of around $225,000). That is total debt of around $567,000 at this point in time. Taking that from the provisional amount of $1,269,372 would leave just over $700,000. If the two properties sell for less than $1,100,000 then, of course, that amount will be less. However, recognition of these provisional figures gives the Court an appropriate starting point, I consider, against which to make contributions assessments and to translate the qualitative findings into quantitative division of the existing net property and superannuation interests.

What of the Parties’ respective contributions?

1. The wife’s counsel would have me assess the parties’ respective contributions, as required pursuant to s 79(4)(a)-(c) of the FLA, across the 11 years of their relationship and the 3 years since their separation, as equal. With respect to him, I cannot do that.  

2. I cannot conclude that their respective contributions during the period that they cohabitated in the US in a de facto relationship and after their marriage were equal. They lived together from December 2000 to their return to Australia in the early part of 2003. The husband brought a little more in savings in at the start of the relationship than did the wife and he earned vastly more money than the wife did in those few years. Indeed, as already observed, he earned enough to financially support them both for nearly two years, to pay almost $50,000 for their wedding and honeymoon and also to bring $782,000 in savings back to Australia with them. At the same time, the evidence does not let me conclude that the wife made greater contributions than did the husband towards the welfare of their relationship during those years. I cannot accept the submission of counsel for the wife that her contributions during that period should be assessed as equal to the husband’s contributions.  

3. As for the 8 years between their return to Australia and their separation in April 2011, I am satisfied that the wife contributed more by way of the income she earned from personal exertion during that time than the husband did from his stock trading and commission earnings, although the husband did make a contribution in this regard. I am, however, satisfied that the husband contributed more than the wife to the earning of the money they made from the Town GG property development, although, as I have already observed, I consider the wife has also indirectly contributed to that through the opportunity being presented to them as a result of her parents’ connections. The interest income the couple earned during this period was also earned as a result of the existence of capital that the parties had saved through the greater contributions of the husband that I have already recognised. However, that the capital was able to be retained and invested during those years is something the wife has also indirectly contributed to through the personal exertion income she was earning and contributing.

4. Other direct financial contributions that I take into account during this period include the contribution of $200,000 from the husband’s father which the parties received in or around 2008, only 3 years before the end of their relationship. That was, I have found, a gift from the husband’s father, but I regard it effectively as a contribution by the Husband.[1] Coming into the relationship, as it did, only three years before their separation, and considering it relative to the likelihood of the parties having around $700,000 in capital subject to adjustment between them, its significance cannot be understated.  Just looking at it by way of a dollar for dollar comparison, $200,000 is equal to about 28 per cent of that remaining capital of $700,000.

   [1]In the Marriage of Gosper (1987) FLC 91-818; In the Marriage of Kessey (1994) FLC 92-495; In the Marriage of Pellegrino (1997) FLC 92-789.

5. Additionally, I am satisfied that the interest free loan of $300,000 from the husband’s mother is another contribution that I must take into account and that, again, it is to be treated as effectively contributed by the husband. Similarly though, the wife’s parents’ $209,000 has been utilised by the parties for around five years and will only attract interest for just over two of those years. That interest free component is, I am satisfied, to be considered as a contribution, effectively made by the wife too.  

6. As to the contributions each of the parties made that are to be considered pursuant to s 79(4)(c), I am satisfied that whilst the wife made the principal parenting contribution during each of the periods immediately after the birth of each of the parties’ children that the husband contributed significantly in that regard during the years after the birth of their first child and their separation, particularly at times when the wife was away from the home working and the children were not in day care or at school. I do not accept his evidence that he was the parent who primarily cared for the children but I am satisfied he did do a lot of parenting. I am also satisfied that the husband, who worked from the parties’ various homes during that time, also contributed significantly to the homemaking that was done, as did the wife.

7. I find that each of the husband and the wife contributed significantly to the welfare of the family during the years 2003 to 2011 in the parenting and homemaking roles, but I am satisfied, on the balance of probabilities, that the wife’s contributions in this particular field outweighed the husband’s, although not to a great extent.

8. Having regard to all of the various contributions made by each of the husband and the wife during this period between 2003 and April 2011, I am satisfied ultimately that all of the contributions of the husband outweighed the wife’s during that period, particularly having regard to the money advanced by the husband’s father and the interest free money from his mother. But for those significant contributions, the contributions made by the parties during that period would have weighed the wife’s way, although not by as much as the imbalance in their contributions during the US period.

9. As to the period between separation and trial, there was a period of a few months after separation that the children were with the wife and did not see the husband. As I understand things, although they began spending time with the father after a while, they were principally cared for by the wife until the orders of late November 2012. Since then, they have been living with the husband, in accordance with those orders, for nine nights per fortnight, and with the wife for five nights per fortnight. Pursuant to those same orders, the parties have been sharing the children’s school holiday time.

10. Having regard to those factual matters just outlined, I am satisfied that the parties’ parenting contributions since separation again weigh slightly in the wife’s favour. As to other matters of contribution, the wife transferred money (several thousands of dollars) from accounts of the parties at the point of separation and used that for the financial support of her and the children in the immediate post-separation period. I accept the husband contributed to that amount of support. As to other issues surrounding financial support, I understand the evidence to establish that each party has financially supported the children solely without contribution by the other, during the times that the children have been in his or her care in the post-separation period.

11. In this post-separation period, the husband paid an amount of $5,000 on behalf of the parties (or at least on behalf of one of their entities) in settlement of a debt claim that had been commenced in Court by one of their creditors. He has also entered into payment plans with the local council and utility provider to ensure that arrears of rates and utility charges are being paid. As I understand the evidence, those amounts are being paid from rent paid by a tenant of the dwelling on one of the parties’ properties that is to be sold. The wife is also repaying what is a joint debt, by way of a repayment plan. She repays it at $10 per month and has been doing so for around a year. That is a contribution by her.

12. Neither side addressed me in respect of other contributions during this post-separation period. Accordingly, I make no other findings about contributions during this period.  Ultimately, I assess relevant contributions made by each of the parties during the post-separation period as weighing slightly in favour of the wife.

13. Turning then, as I must, to the quantitative determination of the s 79(4) (a) to (c) contributions of the parties from the commencement of their relationship in December 2000 until the trial a few weeks ago, I am satisfied that the notional percentage division to be applied to their net pool of property and superannuation interests so as to justly and equitably reflect all of their contributions should be 70/30 in favour of the husband. If they realise $700,000 from the sale of the two properties after all of the liabilities are paid, that would see the husband notionally receiving $490,000 and the wife $210,000.

Is any further adjustment necessary having regard to s 79(4)(d) to (g), including relevant s 75(2) matters?

1. Counsel for the wife submitted at the end of the trial that consideration of these matters would result in an adjustment in favour of his client. Again, I respectfully cannot agree with that submission.

2. The orders that I propose to make, that will result in the net cash proceeds of sale of the parties’ two real properties being distributed between them, are not, I am satisfied likely to make much difference to each of their earning capacities. Much of that which the husband receives is likely, on the evidence, to be repaid to his life-long friend who has paid around $350,000 in legal fees for the husband on the expectation of being repaid by the husband after the property division is finalised. Both parties may only have a little bit of capital left after the property adjustment from which they could earn investment income or which they could use to support themselves whilst they continue to improve their earning capacity by further study (as in the wife’s case) or working harder in growing the property industry business (as in the husband’s case).

3. The husband is 44 years old and in good health. He has qualifications and experience in information technology but has not worked in the field since he left the United States in early 2003. Towards the end of the relationship, there appears to have been agreement that he would commence to operate a property industry business. He is now working running the property industry business that was bought by a company associated with his life-long friend who has been extraordinarily supportive of the husband since the breakdown of his marriage. The husband is now earning a small amount of income but has an expectation of increased income as he continues to grow the business and its profits due to the terms of the agreement pursuant to which he runs the business. I am satisfied that his income will gradually increase as the business grows, just as it has been since it was acquired.

4. The wife is 43 years of age. She is in reasonably good health. Although she has an Arts Degree which she utilised to generate reasonable income during the years of the marriage, the wife has determined, since separation, to commence studying towards obtaining a degree in a new field. That is not a course of action forced upon her by the circumstances. It is, I am satisfied, something she has chosen to do as a lifestyle change. As she is not studying a full-time course load, completing these studies is going to take her several years. In the mean-time she will apparently support herself on government income support and assistance from her family. When she completes her studies, one would expect her to obtain employment that remunerates reasonably well.

5. The parties’ three children do spend the majority of their time during school term in the father’s care. He is financially responsible for their support when they are in his care. He receives no child support from the wife to assist in this regard. Since they have been living with him for the majority of the time, he has received no child support from the wife. I am satisfied that he is most unlikely to receive any child support from the wife to assist him in financially supporting the children for at least several years to come, until the wife finishes her degree and obtains employment again.

6. Whilst the children are in her care, the wife supports them financially without current financial assistance from the husband. That may even change if the income he earns in the property industry business continues to increase. It may be that he might be assessed as having to pay child support for the children when they are in wife’s care.

7. The husband is one of two children of an elderly father (in his early 80’s). The wife argued that he can look forward to an inheritance that should be considered as one of these factors. However, there is no evidence as to the detail of his elderly father’s financial circumstances. There is no evidence as to his elderly father’s state of health, particularly whether he currently has testamentary capacity that would permit of him changing the expression of testamentary intent. Indeed, there is no evidence of his current testamentary intent. There is simply insufficient evidence upon which I can safely base any finding of relevance about this issue.

8. Counsel for the wife also submitted that the husband has a substantial “financial resource” in the form of the generous financial support he continues to receive from his life-long friend. I do not accept that I could make a finding that the husband has a right or even an expectation to keep receiving financial assistance from his generous friend that should translate into a consideration attracting weight at this stage of the process of determining appropriate orders that are also just and equitable. Generous financial assistance, voluntarily given by friends or family members, without any legal obligation to give it, does not, in my view, count as a financial resource of the party who receives it.

9. The husband has entered into a new relationship and is living with his new partner. There is little evidence of the financial circumstances pertaining to that new relationship. I do take into account the fact that a person cohabiting with another person can expect some financial benefits to accrue as a simple consequence of the economies of scale that present in such circumstances.

10. Ultimately, weighing up all of these relevant matters, I am satisfied that in order to make orders that are appropriate and just and equitable as between these two parties that a small percentage adjustment in favour of the husband is further required. A 2.5 per cent adjustment in favour of the husband, representing an actual further differential of 5 per cent between them is, in my view, appropriate and just and equitable. Thus, it can be seen, the final percentage division arrived at is as to 72.5 per cent in favour of the husband and 27.5 per cent in favour of the wife. I consider that, in all of the circumstances to be a just and equitable outcome.

What Orders are appropriate?

1. I consider it appropriate to order the parties to cause the self-managed superannuation fund to have all of its outstanding financial statements prepared and audited as required by superannuation regulatory provisions and all its outstanding tax returns lodged. I consider it appropriate for the parties’ respective member benefits as at 30 June 2014 to be determined and for the wife to be ordered to roll her member benefit out into another complying superannuation fund of her choice before then resigning from the fund and any office in the trustee company. Pending that happening, both parties should be restrained from dealing with, charging or encumbering any of the assets of the superannuation fund.

2. I consider it appropriate to order that the wife forthwith relinquish any interest in any of the other companies, resign any office held in them and transfer any shares in them to the husband. She should also surrender any interest in any of the trusts controlled by the parties through these companies or otherwise.

3. It is appropriate to order the husband to indemnify the wife in respect of any liabilities of any of these companies and trusts, save for any current liabilities of their self-managed superannuation fund and the $20,000 I have found is owed to V1 Group Pty Ltd.

4. The husband shall be entitled to keep the Jeep motor vehicle at a nil value and all of the other chattels at a value of $22,215 whilst the wife shall be entitled to keep the couch and video camera at a value of $1,450, in addition to any jewellery in her possession.

5. The Trustee for Sale previously appointed shall be ordered to pay out all of the liabilities of the parties as well as his own reasonable costs and disbursements incurred in the performance of his obligations under those and these orders and then to distribute the balance in accordance with a formula that takes account of the net proceeds of sale received after discharge of the liabilities, the values of the parties superannuation member benefit entitlements and the chattels they are retaining as well as the percentage division I have determined appropriate, just and equitable in all the circumstances of the case.

6. Each of the parties should also provide indemnities to the other against liability for any of the debts to their own parents, other family members or friends.

7. It is also appropriate to make an order pursuant to s 106A of the FLA for a Registrar to sign any documents necessary to give effect to the orders in the stead of either party who refuses or neglects to do so.

8. I make the Orders set out at the commencement of these reasons having considered them appropriate and being satisfied that they effect property adjustment that is just and equitable.

I certify that the preceding ninety-six (96) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 6 June 2014.

Associate: 

Date:  6 June 2014