Chilwell and Lycett

[2008] FamCA 1049

FAMILY COURT OF AUSTRALIA

CHILWELL & LYCETT [2008] FamCA 1049

FAMILY LAW – PROPERTY - Settlement in relation to marriage

Family Law Act 1975 (Cth) ss 75(2), 79

Briese and Briese (1986) FLC 91-713
Oriolo and Oriolo (1985) FLC 91-653
Black and Kellner (1992) FLC 92-287
Hickey and Hickey (2003) FLC 93-143; 30 Fam LR 355
Coghlan and Coghlan (2005) FLC 93-220; 32 Fam LR 414

APPLICANT: Ms Chilwell

RESPONDENT: Mr Lycett

FILE NUMBER: SYF 2035 of 2006

DATE DELIVERED: 3 December 2008

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Judicial Registrar Johnston

HEARING DATE: 3 and 4 July 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Lloyd

COUNSEL FOR THE RESPONDENT: Mr Loxton

Orders

1. That within 42 days the husband shall pay to the wife the sum of $145,383.

2. That the husband indemnify the wife in relation to the wife’s potential or real liability to F Mortgage Insurance Pty Limited.

3. That the husband be substituted as the single person liable for all monies otherwise due and payable by the parties to F Mortgage Insurance Pty Limited.

4. That the husband indemnify the wife in relation to all suits, claims, demands of whatsoever nature or kind arising out of her being a shareholder and/or director of:

   (a)       G Finance Pty Limited

   (b)       G Finance (SP) Pty Limited

   (c)       L Pty Limited

   (d)       Z Pty Limited

   (e)       N Pty Limited

   (f)       I Finance Pty Limited and

   (g)       L Unit Trust.

5. That otherwise each of the parties be declared the beneficial and legal owner of all assets standing in their name or in their possession, custody or control.

6. That all exhibits be released.

7. That the above orders not commence operation until 19 December 2008.

8. That both parties have leave to re-list these proceedings for the purposes of submissions in relation to the form of the orders only, at any time until 18 December 2008.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 2035 of 2006

MS CHILWELL

Applicant

And

MR LYCETT

Respondent

REASONS FOR JUDGMENT

Introduction and applications  

1. These are contested property proceedings. The parties are Ms Chilwell and Mr Lycett. For convenience I shall refer to them as “the wife” and “the husband” respectively.

2. The wife seeks orders to the following effect:

   1.That the husband pay to her by way of alteration of property interest the sum of $500 000.

   2.That the husband indemnify the wife in relation to the wife’s potential or real liability to [F] Mortgage Insurance Pty Limited.

   3.That the husband be substituted as the single person liable for all monies otherwise due and payable by the parties to [F] Mortgage Insurance Pty Limited.

   4.That the husband indemnify the wife in relation to all suits, claims, demands of whatsoever nature or kind arising out of her being a shareholder and/or director of:

   a.[G Finance] Pty Limited,

   b.[G Finance (SP)] Pty Limited,

   c.[L] Pty Limited,

   d.[Z] Pty Limited,

   e.[N] Pty Limited,

   f.[I Finance] Pty Limited and

   g.[L] Unit Trust.

   5.That otherwise each of the parties be declared the beneficial and legal owner of all assets standing in their name or in their possession, custody or control.

   6.That the husband pay the wife’s costs of and incidental to these proceedings on a full indemnity basis.

1. On the other hand the husband agrees to the orders sought by the wife at paragraphs 2, 3 and 4 above. The husband would also agree to indemnify the wife in respect of all liability to the estate of the husband’s late aunt. Otherwise the husband seeks an order that the wife’s application be dismissed.

Background  

1. The husband was born in April 1958 and the wife was born in August 1969. They commenced cohabiting in August 2000. They married in January 02. They separated in October 2005 and were divorced on 28 January 2008.

2. There are no children of the marriage. But the husband has 3 children from his previous marriage. Two are adults and the youngest is 15 years of age. Their mother is Ms SL. The husband also has a fourth child who was born in July 2007. The child’s mother is Ms P. The husband says that he does not intend to live with Ms P.

3. At the time the parties commenced cohabiting the husband carried on a finance business. He owned 4 corporations. These were I Finance Pty Limited incorporated in 1996, Z Pty Limited, incorporated in 1999, N Pty Limited, also incorporated in 1999 and G Finance Pty Limited, incorporated in 2000. He owned a home unit at D, and a property in the city at Sydney.

4. At this time the wife was studying for a diploma and she was working in financial services. Her base salary was approximately $75,000 and she earned commission. She owned a motor vehicle subject to a loan and savings of approximately $9000.

5. Shortly after the parties commenced cohabiting the wife ceased working in her position and commenced working in the husband’s business.

6. In early 2001 the parties established an office in Brisbane for the business of G Finance Pty Limited.

7. In mid-2001 the husband sold his properties at D and Sydney city to pay debt.

8. In late 2001 the parties purchased the property at H in the wife’s name for $540,000.

9. In October 2001 the company L Pty Limited was incorporated.

10. This company was the trustee of the L Unit Trust.

11. At approximately this time the parties commenced residing in a rented home unit at H2.

12. As indicated above, on 26 January 2002 the parties married.

13. The following year the wife became a director, and later an equal shareholder with the husband, in the company G Finance Pty Limited.

14. The wife subsequently became a director of the companies G Finance (SP) Pty Limited, Z Pty Limited, L Pty Limited, N Pty Limited and I Finance Pty Limited.

15. In March 2003 the husband’s aunt died. The parties subsequently arranged with the husband’s brother, who was executor of the estate, to borrow $390,000 from the estate. Some of these funds were used for business purposes and some were used for personal expenditure. The wife received a bequest of $110,000 from this estate.

16. In October 2003 the parties decided to purchase the home unit in which they were residing at H2. This was purchased in the wife’s name for $725,000. Also in October 2003 a company, G Finance (SP) Pty Limited was incorporated.

17. In March 2004 the company L Pty Limited purchased the property at S, New South Wales.  $50,000 of the $110,000 which the wife had received from the estate of the husband’s aunt was used towards this purchase. The husband used some of the balance towards paying school fees for his children.

18. In October 2004 the property at C, New South Wales was purchased by L Pty Limited for $605,000. The parties borrowed $480,000 to assist in funding this purchase.  $26,000 was drawn down on the security of the property at H.  This property became a residence for the parties.

19. Also in October 2004 shares were sold in the company G Finance (SP) Pty Limited to companies owned by Mr Y and Mr O and shares were also sold to Mr K and Mr A.  This increased the capital of the company by $750,000.  This money was advanced to L Pty Limited.  $130,000 was used by L Pty Limited to assist it to purchase the property at S, New South Wales.  The balance of $620,000 was advanced to a new company established in April 2004 called AR Pty Limited.  I shall refer to this again below.

20. In late 2004 there were difficulties in the marriage.  The wife said that the husband was violent towards her.  But the parties reconciled. 

21. In January 2005 L Pty Limited purchased the property at S for $605,000.

22. The wife had been paying the mortgage payments on the properties at H and H2 and C as well as strata fees.  The source of these monies was rental from the property at H and her income from the companies G Finance Pty Limited and Z Pty Limited.

23. But in approximately October 2005 the husband terminated the wife’s income from the companies and she stopped paying the mortgage payments.  The wife continued receiving the rent from the property at H which was approximately $2000 per month.

24. As indicated above, the parties separated in October 2005.

25. At approximately this time the wife commenced working at the C Café, initially working Thursdays and Fridays.

26. In November 2005 the husband removed the BMW motor vehicle which the wife had been using from her control.

27. In December 2005 there were proceedings in the Local Court in relation to an Apprehended Violence Order and occupancy of the property at C.  Following their attendance at the Local Court, the husband excluded the wife from the C property.

28. In January 2006 the wife recommenced living in the property at H2.

29. Within a couple of months the husband ceased mortgage payments on the properties at C and S.

30. In April 2006 the mortgagees commenced proceedings to take possession of the properties at H and H2.  At this time the husband commenced leasing a $225,000 Porsche motor vehicle the lease payments being made either by G Finance Pty Limited or by L Pty Limited.

31. In June 2006 the S property was sold.

32. On 14 August 2006 this Court made certain interlocutory orders.  Those included orders appointing Mr E, Accountant as single expert to value the companies.  The orders also required the wife to sell the properties at H and H2 and for the net proceeds of sale to be held in trust pending property settlement.  The orders also provided that the wife be permitted to reside in the C property and for the husband to pay the mortgage thereon.  The orders also provided that the net proceeds of sale of the S property after paying approximately $14,000 mortgage arrears on the C property and reserving $14,000 to pay the costs of the single expert be paid in the proportions 75% to the wife and 25% to the husband.

33. Subsequently the wife was paid $105,000 and the husband was paid $33,000 in accordance with the orders.

34. In June 2007 the property at H was sold by a mortgagee sale.  A loss of in excess of $50,000 was sustained by the mortgagee.  In July 2007 the mortgagee sold the property at H2 and sustained a loss in excess of $183,000.  There was mortgage insurance and the insurer F Mortgage Insurance is seeking to enforce a claim of $233,481 against the wife in respect of such losses.

The Companies  

1. As indicated above at the time that the parties commenced cohabiting the husband owned 4 corporations. These were, I Finance Pty Limited, Z Pty Limited, N Pty Limited and G Finance Pty Limited.  These corporations offered financial services.

2. As indicated above, in October 2001 the company L Pty Limited was incorporated. It was the trustee of the L Unit Trust. In October 2003 the company G Finance (SP) Pty Limited was incorporated. All shares were originally held by L Pty Limited as indicated above, then it subsequently sold interests in the company to Mr Y, Mr O, Mr K and Mr A. This raised $750,000.

3. Another company, AR Pty Limited, was subsequently incorporated. This is a subsidiary of the company G Finance (SP) Pty Limited. Its business involved a new venture apparently developing a new finance product. The company traded for 2 years but failed. The $620,000 advanced to AR Pty Limited has been expended although it is far from clear to me how the money was spent. The company went into liquidation in January 2007.

4. L Investments Pty Limited was incorporated in May 2006. It is also a trustee for the L Unit Trust. It acted solely for the sale of the property at S.

5. The company Equity Pty Limited was incorporated in May 2007. The husband is a director and not a shareholder. The company is owned by the husband’s business associate Mr Y.

6. The company Equity Pty Limited was incorporated in July 2007.  This company is developing property in Queensland. The husband owns 20% of the shares through his interest in Equity Pty Limited. The company owns an option over land at in Queensland. The husband says his interest has a value of $50,000.

7. The company Equity 2 Pty Limited was incorporated in September 2007.

8. The company L Holdings Pty Limited was incorporated in October 2007.  It is an alternate trustee for the L Unit Trust.  Its shares are owned equally by the husband, Mr Y and Mr O.

9. The company CL Pty Limited was incorporated in November 2007. The husband owns a 22.5% interest through L Pty Limited. It was formed to investigate shipping products in Asia. The husband says that this venture is a failure.

10. The company Equity 3 Pty Limited was incorporated in November 2007. Its shares are owned equally by the husband, Mr Y and Mr O through the company L Holdings Pty Limited. The company owns shares in W Pty Limited.

11. The company Equity 4 Pty Limited was incorporated in March 2008. The company was established to explore opportunities in Asia. The husband owns one half of the shares in the company the balance being owned by a HC.

12. The companies Equity Pty Limited, Equity 2 Pty Limited, Equity 3 Pty Limited, L Holdings Pty Limited, CL Pty Limited, Equity 4 Pty Limited and Equity 5 Pty Limited were all incorporated after the single expert, Mr E completed his valuation report on 14 November 2006.

13. The valuation was prepared in relation to the interests of the husband and the wife in the following companies:

    -G Finance Pty Limited

    -G Finance (SP) Pty Limited

    -L Pty Limited

    -Z Pty Limited

    -N Pty Limited

    -I Finance Pty Limited

    -U Holdings Pty Limited and

    -L Investments Pty Limited.

14. Mr E’s opinion was that the interests of the parties in the following companies had no value:

    -G Finance Pty Limited

    -Z Pty Limited

    -I Finance Pty Limited

    -U Holdings Pty Limited and

    -L Investments Pty Limited.

15. Mr E had the opinion that the husband and wife had liabilities of $78,876 and $84,100 in respect of their loan accounts with Z Pty Limited and that the wife had a loan account liability to the L Unit Trust of $66,052.

16. Mr E also had the opinion that the L Unit Trust had a liability to the husband on his loan account of $110,649.  He valued the two units which the husband held in the L Unit Trust as being worth $368,762.  If the loan account adjustments are made, the parties’ interests in the entities have a value of $250,383.  But the husband would also have the $110,649.

17. In these circumstances, I propose to include in the pool of assets available for division between the parties this $250,383.  But I do not propose to include in this pool the$110,649 owing to the husband on his said loan account.  This is because there would be equity in the C property in a fairly similar amount and the husband will have the benefit of this.  He will also have to bear the burden of considerable indebtedness.

The alleged non-disclosure by the husband  

1. There was a very strong submission on behalf of the wife to the effect that the husband has not made a full and frank disclosure about his financial circumstances to the wife and to the Court.

2. It was submitted on behalf of the wife that the husband is the only person who has any idea about his financial affairs.

3. It is the case that financial accounts have not been prepared for any of the husband’s companies in final form since 30 June 2005. These were the accounts used by Mr E, as well as some draft accounts for the financial year ending 30 June 2006, for the preparation of his opinion about the value of the companies. So it has been impossible for any up to date valuation to be prepared for the companies.

4. In addition, there has been a dearth of information provided by the husband to the wife about the financial affairs of both the companies and himself. The wife has sought relevant bank statements, cheque books and other source documents to enable her and her advisors to approach some understanding concerning the financial affairs of the husband.

5. For example great frustration was expressed on behalf of the wife by her learned counsel concerning the absence of any detailed explanation about how the $750 000 received by the husband and the company G Finance (SP) Pty Limited was expended. As indicated above, the husband said that $130 000 of these funds was used towards the purchase of the property at S and the balance was applied to the operations of the company AR Pty Limited. Yet no documents were made available by the husband to support his assertions in this regard. This has left the wife in the position where she is very suspicious of the husband’s explanation. And the wife’s suspicions are not limited to this matter.

6. The duty on parties to family law financial proceedings to make a full and frank disclosure concerning their financial affairs is fundamental to the determination of what is a just and equitable order. The principle is set out in the following passage in the case of Briese and Briese (1986) FLC 91-713 per Smithers J :

   “…I believe that the conclusion in the House of Lords in the case of Livesey v. Jenkins (1985) 1 All E.R. 106 is apposite, namely that in financial proceedings between spouses each party must make a full and frank disclosure of all material facts. In that case it was made clear that full and frank disclosure was required as a matter of principle in the light of the fact that it was the duty of the Court, taking into account a number of designated criteria, to make a decision which basically involved the exercise of a discretion. This is quite different from common law litigation between strangers, in which such a general duty does not exist, and obligations would only exist in so far as statute or court rules required.

   In my view it is fundamental to the whole operation of the Family Law Act in financial cases, that there is an obligation of the nature to which I have referred. …”

7. This passage has been affirmed by this Court on numerous occasions including in the well-known Full Court cases of Oriolo and Oriolo (1985) FLC 91-653 at page 80,256 and Black and Kellner (1992) FLC 92-287 at page 79,133.

8. I accept the thrust of the submission on behalf of the wife in this regard. In my view the husband has fallen well short of what is required by way of a full and frank disclosure. This has left this Court and the wife quite uncertain about his financial affairs.

The Applicable Law

1. The Court must be satisfied that in all the circumstances it is just and equitable to make an order. This is provided by s.79(2) of the Family Law Act 1975.

2. The Full Court of this Court in its decision in the case of Hickey and Hickey (2003) FLC 93-143; 30 Fam LR 355 said as follows:

   “The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79.  That approach involves four inter-related steps.  Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing.  Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties.  Thirdly, the Court should identify and assess the relevant matters referred to ss.79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two.  Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case:  Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335 (and various other well known authorities).”

1. Despite some criticism of this decision by the majority of the Full Court in Coghlan and Coghlan (2005) FLC 93-220; 32 Fam LR 414, see for example paragraphs 36 and 37 at page 79,641 and paragraph 63 at page 79,646, in my view it is not incorrect to take the approach to the hearing of property proceedings as described in Hickey above.

Property available for division

1. In my view, the evidence discloses the following as the assets available for division between the parties:-

$
1.         Interests of parties in corporations valued by Mr E on 14 November 2006	250,383
2.         Y Investments Pty Limited	80,000
3.         Equity 5 Pty Limited	50,000
4.         Shares	49,856
5.         Husband’s furniture and personal effects	50,000
6.         Husband’s Statewide superannuation	5,000
7.         Wife’s Savings	1,600
8.         Wife’s Household contents and emerald ring	4,750
9.         Wife’s Superannuation	7,166
_____________
$498,755

1. The husband asserted that he has the following liabilities:-

$
1.         Mortgage over Ms SL’s home	295,000
2.         Child support arrears	80,000
3.         Dimocks Lawyers	36,188
4.         Husband’s parents for school fees	28,675
5.         Estate late aunt	59,293
6.         Australian Tax Office	49,840
7.         Liability to Mr Y, Mr O and Mr K	750,000
8.         Visa, David Jones and Diners Club credit cards	37,608
9.         F mortgage insurance	233,481
_____________
$1,570,085

1. There is no evidence in proper form to establish either the existence or enforceability of the $295,000 mortgage, the $28,675 debt to the husband’s parents, the $59,293 debt to the estate of the husband’s late aunt or the debt to Messrs Y, O and K. In any event, in my view the husband should be required to accept personal responsibility for such liabilities.

2. In relation to the alleged $750,000 liability the husband said that he considers himself to have a moral obligation to repay this money.  I note that although an amount of approximately $130,000 of this advance was said by the husband to have been spent in the acquisition of the S property and renovation of the C property, the major part of the funds were said by the husband to have been lost in the operations of the company AR Pty Limited. In my view, the wife should not be required to bear any responsibility for any repayment of these funds.

3. The debt to the Australian Tax Office is for tax in relation to the operation of the companies. In my view the husband has had the benefits flowing from the companies and it is appropriate that he be required to pay the tax.

4. I accept that the husband has a liability to the Child Support Agency of at least $80,000 and possibly as high as $178,613.

5. I also accept that there are credit card debts for which the husband is liable to the total of $37,608.

6. On the other hand, I accept that the wife has the following liabilities:-

$
1.         Westpac visa credit card	43,107
2.         Citibank mastercard	28,000
3.         American express	820
_____________
$71,927

Contributions

1. As indicated above, at the time the parties commenced cohabiting the husband owned the company I Finance Pty Limited, Z Pty Limited, N Pty Limited and G Finance Pty Limited. He had recently purchased the latter company for $750,000. The husband also owned properties at D and in the Sydney city subject to mortgages. He was operating his business of providing financial services.

2. As also indicated above, at this time the wife owned a motor vehicle subject to a loan and savings of approximately $9,000. The wife way working in the finance industry. It is common ground that the wife was earning income from salary and commissions in excess of $200,000 per annum.

3. The wife gave up her employment and commenced working in the husband’s business. She was made a director. In late 2001 she took over the management of one part of the business which was that operated by the company G Finance Pty Limited. From this time the husband concentrated on his commercial mortgages business particularly through the company I Finance Pty Limited.

4. The wife changed the marketing, updated the logos and redesigned the marketing material including the web site. The wife was responsible for employing and managing staff. She completed numerous business and marketing plans for G Finance Pty Limited and for AR Pty Limited.

5. When the parties purchased the property at H in the wife’s name, the wife contributed $15,000 using her credit card. The husband contributed approximately $60,000 from the proceeds of sale of his city property. The wife paid the mortgage payments on this property from approximately December 2001 until September 2005.

6. The property at H2 was also purchased in the wife’s name. The wife paid the mortgage payments until September 2005. The wife purchased most of the furnishings for the property. Upon the wife receiving the $110,000 bequest from the estate of the husband’s late aunt, $50,000 was used towards the purchase of the S property, $25,000 was paid towards a new kitchen for the property at C, and the balance was paid for expenses of the husband’s children. The wife also purchased approximately $10,000 worth of furniture for S property using her credit card and she paid $10,000 towards renovations for the property at C.

7. Each of the parties has made direct relevant financial contributions over the period of their cohabitation and marriage. Each of them has made contributions to their welfare as a family and as homemakers, although he husband was somewhat critical of the wife in the sense that he said she did little housework because they had a cleaner, they ate out a lot and he had his shirts laundered.

8. The wife was unable to continue working in the business because at approximately the time of separation, the husband removed her as a director. The serious consequences to the wife of this action were that she was no longer able to earn the income that her work had previously generated.

9. After separation, the husband went on to continue to enjoy the benefits of conducting his business. But a substantial difficulty with the case is that he has failed to make it clear to the wife and this Court just what the benefits have been.  I have said this above.

10. Looking at the evidence as it appears although being far from certain about the husband’s business dealings since separation and the true extent of his financial circumstances, it would appear that the husband’s contributions overall have been greater than those of the wife.  In my view, however, the Court cannot be confident in arriving at the precise finding about such overall contributions because the husband has failed to make a full and frank disclosure in relation to his financial circumstances.  In these circumstances, in my view, it will be unnecessary to make precise findings about contributions in order to arrive at a just and equitable order.

s 75(2) MATTERS

1. The wife is 39 years of age and she is in reasonable health.  She works 3 days per week and receives an income of $645 per week for the 3 days.  The wife agreed during her cross-examination that she might be able to work full time when these proceedings have concluded.  As also indicated above, the wife has considerable experience in the financial services industry and she has in the past received a high salary, in terms of the community average, for such work.

2. On the other hand, the husband is 50 years of age and he is also in reasonable health.  He has been operating his business as a financial services provider over many years.  This business has been successful over many years and has provided the parties with a good standard of living over the period of their cohabitation and marriage.  The husband has said that business has been deteriorating, certainly since the parties separated.  The husband also said that in these circumstances he is exploring other investment possibilities as indicated above.

3. I must say I have a guarded view about the husband’s evidence generally which arises from his conduct in these proceedings which as I have referred to above.  He has not impressed me as having been co-operative in the proceedings or ready to facilitate a process which would enable the Court to arrive at seeing a clear picture of his financial circumstances. 

4. In these circumstances I am unable to be confident about what income is available to the husband.  He has asserted a variety of amounts during these proceedings.  At one point during cross-examination he said his income was $1595 per week.  At another point he said he received a $1130 per week dividend from the company G Finance Pty Limited and a weekly dividend of $886 from L Pty Limited.  He also said that one or other company provides his telephone service and that the company G Finance Pty Limited pays the lease payments in respect of the Porsche motor vehicle available for his use of $2847 per month.

5. As also indicated above, the husband has children to support including by way of provision of private school fees.  He said his parents have assisted him in paying some of the fees and that he is indebted to them in this regard.  He also says he is in arrears in relation to payments to the Child Support Agency.  He also says that he is obliged to make mortgage payments for Ms SL’s home.

6. In my view, even bearing in mind the reservations I have concerning the husband’s evidence, he has a considerably higher capacity to earn income than does the wife.  But he also has obligations to his children which certainly cannot be ignored.  So I would regard his necessary expenditure on his children to involve expenditure at a considerably higher level than would be necessary for the wife’s support.

7. Bearing in mind all relevant s 75(2) matters, all other things being equal, it would probably be appropriate to set off some modest property in favour of the wife.  But all other things are not equal in this case.  In my view, as I have said, it is not a case in which the Court can be confident that the true state of the husband’s financial circumstances has been identified.

8. Accordingly, in my view, unlike most cases which come before the Court for determination, the requirements of s 79(2) of the Act to make a just and equitable order cannot be arrived at purely on the basis of findings about contributions and relevant s 75(2) matters in this case. In these circumstances, as I have observed above, there is no purpose in making precise findings about contributions and then endeavouring to make a precise adjustment to arrive at a just and equitable outcome.

How should the assets and liabilities be allocated?

1. As I have said, I accept the submission on behalf of the wife that the husband has failed to make a full and frank disclosure concerning his financial affairs.  In these circumstances it is impossible for the Court to be satisfied about the trading activities of the relevant entities.  Moreover, the Court is unable to be satisfied about the identification of the available property and the true state of the parties’ indebtedness.

2. Doing the best that I can in such unsatisfactory circumstances, I propose to allocate to the wife the value of the companies as found by Mr E, old as such valuation is.  I also propose that the wife will retain her other property and she will have to bear responsibility for her liabilities as I have identified these amounting to $71,927.

3. The wife has received the payment of $105,000 from the proceeds of sale of the S property.  For the above reasons, she is to have a further payment to provide her with the $250,383 November 2006 valuation of the companies.  Accordingly, she will require further payment of $145,383 ($250,383 - $105,000 = $145,383).  This will have to be paid by the husband.

4. As indicated above, the wife will have to pay her liabilities of $71,927.  This would leave her with net property of $191,972 ($250,383 + $1600 + $4750 + $7,166 = $263,899 - $71,927 = $191,972). 

5. On the other hand, the husband will have his $80,000 Y Investment, $50,000 in the Equity 5 venture, $49,856 shares, $50,000 furniture and personal effects, $5,000 Statewide superannuation, the $33,000 paid from the proceeds of sale of the S property and the approximately $99,000 equity in the C property.  This is a total of $366,856.  But he will also have considerable liabilities although, as I have said, the extent of these is quite unclear to the Court, as is the actual property which he has including the current value of the entities.

6. In my view, the husband has brought about this position as a consequence of his lack of co-operation in these proceedings.

I certify that the preceding ninety-seven (97) paragraphs are a true copy of the Reasons for judgment of Judicial Registrar W P Johsnton.

Associate: 

Date:  3 December 2008