Clarkson and Clarkson
[2008] FamCA 1098
•12 December 2008
FAMILY COURT OF AUSTRALIA
| CLARKSON & CLARKSON | [2008] FamCA 1098 |
| FAMILY LAW – PROPERTY – Valuation of minority interest – Value to owner - Trial Judge’s duty to determine value – Initial contributions – s 75(2) – Income and age disparity between the parties – Adult children – CGT liability |
| Family Law Act 1975 (Cth) |
| AJW v JMW (2002) FLC 93-103 | ||
| APPLICANT: | Ms Clarkson | |
| RESPONDENT: | Mr Clarkson |
| FILE NUMBER: | MLF | 2046 | of | 2005 |
| DATE DELIVERED: | 12 December 2008 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Justice Watt |
| HEARING DATE: | 6, 7, 8, 9, 10, 16 October and 11 November 2008 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Kirkham QC Mr Crofts |
| SOLICITOR FOR THE APPLICANT: | Westminster Lawyers |
| FOR THE RESPONDENT: | In person |
Orders
IT IS ORDERED THAT:
1. That the wife retain:
a. all her right title and interest in any superannuation in her name with:
i. Victorian Independent School superannuation fund
ii. HA Fund
iii. Host Plus
iv. Supertrace
b. All her right title and interest in:
i. All accounts in her name at Westpac Bank
ii. All accounts in her name at ING
c. The benefit of the interim property distributions received by her pursuant to the Orders of Young J made 31 July 2007
2. That the husband retain:
a. all his right title and interest in the property known as and situate at N being the land more particularly described in certificate of title volume … Folio … and the contents thereof.
b. all his right title and interest in any superannuation in his name with Macquarie Bank
c. All his right title and interest in all accounts in his name at National Australia Bank
d. The benefit of the interim property distributions received by him pursuant to the Orders of Young J made 31 July 2007
3. That the husband forthwith do all such acts and things at his expense as may be necessary to:
a. transfer to the wife her car registration number … with current registration;
b. remove caveat no … lodged by him over the property known as and situate at K.
4. That the wife forthwith at the expense of the wife:
a. Resign as a director or office bearer of J Pty Ltd in favour of the husband or his nominee
b. Resign as a director or office bearer of L Pty Ltd (in whatever ‘capacity) in favour of the husband or his nominee
c. Transfer to the husband or his nominee all her right title and interest in any shares in J Pty Ltd and L Pty Ltd
d. Assign to the husband any debit or credit loan account in her name with J Pty Ltd or the Y Unit Trust or L Pty Ltd (in whatever capacity) or the L Investment Trust
And that the husband as and from this date indemnify the wife in respect of any taxes, fines, lodgement fees or charges of whatsoever nature that shall at any time be levied on her arising whether directly or indirectly from her role(s) in J Pty or the Y Unit Trust on or L Pty Ltd (in whatever capacity) or the L Investment Trust or the Clarkson Family Self Managed Superannuation Fund after 30 June 2007
5. That in accordance with S 9OMT of the Family Law Act 1975 the husband is entitled to the specified percentage, being 100% of each splittable payment made out of the wife’s interest in the self managed superannuation fund Clarkson Family Superannuation Fund (‘The Fund”)
6. The operative date of Order 5 is the date of transfer of then transferable benefit being a date not more than 14 days from the date of this Order
7. That unless the wife pays to the husband the sum of $728,988 within 60 days of the date of these orders the property known as and situate at K being the land more particularly described in certificate of title volume … Folio … (“the property”) be sold by a Real Estate Agent to be agreed by the parties in writing within 10 days and in default of agreement a Real Estate Agent nominated in writing by the President for the time being of the Real Estate Institute of Victoria (‘the Agent’):
a. For sale at a price, unless otherwise agreed by the parties in writing, of not less than $2,700,000 on before 30 March 2009;
b. If not sold, then for sale by public auction on a date to be fixed by the Agent not later than 30 April 2009, for a reserve of not less that $2,700,000 or such other sum as shall be recommended by the Agent in writing and within such time frame as agreed by the parties and if not agreed as determined by the agent
c. Subject to a marketing and advertising campaign recommended by the agent.
7A. That in the event that the wife makes the payment in accordance with paragraph 7 of this order the husband shall transfer to the wife any interest in the property to the wife.
8. Any improvements to the property recommended by the agent and agreed by the parties in writing shall be undertaken by and at the direction of the Agent. Such improvements shall include the maintenance of the garden and the pool to a standard directed by the Agent.
9. The wife as registered proprietor through her solicitors shall otherwise have the conduct of the sale of the property.
10. The proceeds of sale of the property shall be paid:
a. First in payment of the agents fees and expenses (including improvements conducted pursuant to Para 8);
b. Second in payment of the wife’s solicitors reasonable conveyancing costs;
c. Third as to $76,225 to the wife in respect to her anticipated acquisition cost of a new home;
d. As to the balance then remaining as to 71.5% to the wife and 28.5% to the husband save that $20,000 shall be retained from the funds payable to the husband and held in interest bearing trust pursuant to these orders by the wife’s solicitors.
11. That until settlement of the sale the wife:
a. Shall have the sole use and occupancy of the property to the exclusion of the husband;
b. Shall maintain the property in good order;
c. Shall make the property available for inspection as reasonably directed by the agent
12. That the parties shall each pay one half the single expert business valuer Mr S’s outstanding fees in the total sum of $22,715
13. That the single expert property valuer Mr BN is and is hereby directed to provide to the parties within 14 days an itemised bill selling out a description of each item of work done and attendance made in connection with this matter, the date it was made the time spent in such attendance or work and the rate charged for such attendance. The matter of Mr BN’s fees is, unless otherwise agreed in writing, referred to a Registrar of this Court for final determination.
14. The husband shall pay:
a. The costs of the wife of and incidental to his application during the course of the trial for leave to amend his response; and
b. One half of the costs of the wife in issuing serving and attending on Mr BN in connection with the subpoena directed by me to be served on Mr BN including the costs of and incidental thereto
Such costs unless otherwise agreed to be taxed
15. The funds held in trust pursuant to Para 10 (d) hereof shall be disbursed to pay the wife her costs pursuant to Para 13 hereof and any balance then remaining shall be disbursed within 30 days of determination of the amount of costs or agreement which ever is the sooner to the husband
16. That pursuant to S 106A in the event that any party fails to sign any document, as required in these Orders a Registrar of this Honourable Court is authorised to sign such document, deed or instrument in the name of the defaulting party and do all acts as are necessary to give validity to those documents.
17. I discharge all orders in relation to costs including reserved costs
18. I otherwise discharge all pending applications
19. Certify for Counsel
AND IT IS FURTHER ORDERED BY CONSENT PURSUANT TO RULE 17.02 OF THE FAMILY LAW RULES 2004
20. That within seven days of receipt by him of all or any of these documents the husband send to the solicitor for the wife by ordinary mail his notices of assessment and any amended notice later issued by the Australian Taxation Office for the years ended 30 June 2006, 2007 and 2008.
IT IS NOTED that publication of this judgment under the pseudonym Clarkson & Clarkson is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLF 2046/2005
| MS CLARKSON |
Applicant
And
| MR CLARKSON |
Respondent
REASONS FOR JUDGMENT
INTRODUCTION
The applicant Ms Clarkson (“the wife”) and the respondent Mr Clarkson (“the husband”) were married twenty years. They have two children: M (now 21) and E (now 17). The proceedings that I must determine are for property settlement.
The property available for distribution consists in the main of the former matrimonial home, the husband’s post-separation home, certain interests in or related to the horticulture industry, and superannuation interests. The value of the horticulture industry assets was the subject of significantly disputed valuation evidence. The amount of the liability to be offset against the value of the husband’s after-acquired home in fixing the asset pool is also in issue. As the final hearing came close to commencement, there were still significant issues between the parties in respect of “add backs”: funds already received or applied that should be added back to the pool before it is divided, and in relation to contributions made between separation and trial. These issues were however able to be resolved by agreement at an early stage of the hearing, and a mutual concession was made that contributions of all kinds (other than pre-marriage assets) should be treated as equal from the date of the marriage to the time of trial. An application by the wife for spousal maintenance that remained on foot at the commencement of the trial was ultimately not pursued.
The significant issues remaining for determination by me (in addition to the valuation issue already mentioned) include the extent of and weight to be given to each party’s pre-marriage assets that were contributed to the marriage, the husband contending that his greater initial contributions should produce a weighting of the contribution-based assessment in his favour. The husband also seeks a loading of the settlement in his favour under s 75(2) to take account of the fact that the children (one now an adult) live with and are supported by him, and are likely to pursue (or continue) studies for some time, in addition to the fact that he is ten years older than the wife and will retire in a few years. For her part, the wife asserts that the husband failed to make full disclosure of his financial position, and that this factor supports the exercise of discretion in her favour, that is, to grant the orders that she seeks. She also seeks an unspecified adjustment for section 75(2) factors. The fruit industry interests to which I have made reference include an interest in nuts.
There are issues that relate to the structure of the property settlement: the wife seeks to retain the former matrimonial home, whilst the husband seeks a sale of that home to put the parties in a position closer to parity in terms of the equity in real estate that each will have for the future. These issues will have to abide the identification and valuation of the asset pool and the assessments of contribution and section 75(2) factors before they can be addressed: once each party’s entitlement to a share of the asset pool has been decided, the question of how to effect a division of the pool, in a way that satisfies the “just and equitable” requirement of section 79(2) of the Family Law Act 1975 (“the Act”) must be considered. The matter that is not in contention is that the husband will, on both parties’ cases, be the proprietor of fruit industry assets, in respect of which the relevant experts are $1,190,410 apart in the values that each placed on these interests.
The parties commenced have been separated for over four years. They commenced litigation in this court in June 2005. The husband had three different solicitors acting on his behalf thereafter but has been unrepresented since 28 March 2008. The hearing extended over eight days. Much of the hearing time was devoted to the valuation of the Clarkson Family Group’s interests in various managed investment schemes (“MIS”) and other fruit-industry related assets.
BACKGROUND
The husband is 63 years old. He is a Director of X Ltd, a company which the Clarkson and SE families have used to operate the managed investments and other related assets. He resides at N, Victoria (“the [N] property”) with the parties’ two daughters. He has not re-partnered.
The wife is 54. She is currently completing a diploma in health services at Swinburne University. She is employed on a casual basis by two health facilities and M School. She resides in the former matrimonial home situate at K, Victoria (“the [K] property”). She has not re-partnered. For most of the marriage, she held senior marketing positions.
Each party was married and divorced and had concluded their respective property settlements prior to this marriage. There are no children of those former marriages.
The parties were married and commenced cohabitation in April 1984. They separated in August 2004. Following their marriage, they resided in a property owned by the husband situate at H, Victoria (“the [H] property”). Shortly after the commencement of the marriage, the wife obtained employment with a hotel in Victoria. She remained in this position for one and a half years, and the parties then travelled to Europe. At marriage, the husband operated a finance brokering business through G Pty Ltd and was co-owner of a hospitality business.
Upon their return from travel in Europe, the parties relocated to Queensland in early 1986. Shortly thereafter the wife obtained employment with KT Organisation. She deposes that she remained in this position for three years.
In May 1986 the parties purchased a business known as D Business, in addition to an interest in a warehouse. The parties disagree about the funding of this purchase. I will return to this in due course.
In October 1987 the parties’ first daughter, M was born in Queensland. She is 20 years of age and is studying for a degree at University. The degree course which she commenced earlier this year is four years in duration. She resided with the wife from separation but has resided with the husband since December 2007.
In late 1987 the parties purchased real property situate at B, Queensland (“the [B] property”). The wife deposed that this purchase was in part funded by the proceeds of sale of the H property on 27 April 1987 for $227,500.
Some time after the parties’ relocation to Brisbane in 1989, the wife commenced employment with Q Company. The husband obtained employment with a bank soon thereafter. To assist with the care of the two children, the parties employed a nanny during office hours. The wife resigned from her position shortly before E’s birth.
Following the collapse of the bank in 1990, the parties purchased ten acres of land in O (“the [O] property”), Queensland. The husband then became involved on a full time basis with the renovation and redevelopment of this property. Towards the end of 1990, he took up a position with a farm management company where he remained for three years.
In January 1991, the parties’ younger daughter E was born in Brisbane. At trial, she was 17, and will turn 18 soon. She suffers from diabetes and is insulin dependent. She is undertaking year 11 studies at P Secondary School, having recently transferred from M School. She too resided with the wife from separation, but has resided with the husband since October 2007.
Following E’s birth the wife remained in the family home acting as parent and homemaker with the children for a year.
In early 1992 the wife commenced full time employment with T Group. Late that year she took up weekend employment a tourist attraction on the Gold Coast.
Three years later the wife decreased her work commitment with T Group to part time hours because of difficulties associated with the treatment of E’s diabetes.
In 1994 the parties purchased property in R, Queensland (“the [R] property”). They lived there for about four years, and thereafter the property was leased. That property was sold in early 2001 for $200,000.
By 1998 the parties had relocated back to Melbourne, when the wife obtained a position with T Group in Melbourne. By August of that year the parties acquired the K property. The mortgage was repaid by May 2004, largely from the application of the proceeds of sale of other properties.
In 1999 the wife commenced voluntary work at CH Facility. By early 2000 she had commenced part time employment with PH Company in Melbourne. Later that year she was offered, and she accepted, a full time position with PH Company. She deposed that she was earning $85,000 per annum. The husband states that the wife earned $125,000 per annum in that position. There was no documentary basis provided on which I could prefer either version.
The wife deposed that she resigned from this position in March 2001. The parties disagree as to rationale behind the wife’s resignation. The wife deposed at paragraph 44 of her first affidavit:
However my return to work fulltime affected family dynamics. After discussion with the husband and in response to his suggestion that we would be better of [sic] if I stayed home to look after [E] and help him I resigned, with the husband’s approval, in March 2001.
The husband provides a different perspective at paragraph 37 of his first affidavit:
The wife stayed in this position for about 18 months and then decided to resign about late 2003 and began working part time with the [QT Group] whilst trying to develop her own business “[F Business]”.
The wife deposed in response that F Business never traded. She deposed that following her resignation she became more involved in X Ltd’s sales. As a result she earned $30,000 per annum. This salary ceased in March 2005. The wife described her involvement with X Ltd at paragraph 43 of her affidavit sworn or affirmed on 22 September 2008:
My involvement in the MIS business included, but was not limited to preparing marketing brochures, proof reading, marketing/sales work both on the phone and in person and hosting field days at [farms]. I undertook this work in addition to my part time work for [T Group].
By 2002 the wife had obtained part time employment with QT Group, in addition to a casual position at M School. She earned $24,000 per annum from the former and $5,000 per annum from the latter. She deposed that as a result thereof she reduced her work for X Ltd.
In regards to this issue, the husband deposed at paragraph 21 of his second affidavit that:
…the wife wonders why her [X Ltd] income stopped. She was not working for the company, had all our Melbourne records and still has not handed them to us and her actions regarding the marriage also caused a rift in the board of [X Ltd].
I will mention at this stage that the preceding extracts from the parties’ affidavits demonstrate how, over a marriage of some length, different perspectives emerge in relation to their common history, especially under the pressures of litigation. I do not find either party to have been wilfully untruthful. Both parties deposed to matters that should have been capable of verification from independent sources once it became clear that they were contentious. The amount of the wife’s earnings from PH Company is one example that could have been particularly pertinent to her earning capacity had she pursued her spousal maintenance application which remained on foot until final addresses. There were similar gaps in the husband’s evidence that could easily have been filled by documents that should have been available at short notice: his earnings from X Ltd, for example, were said by him to be $90,000 per annum. When doubt was cast on this in the course of the trial, the answer should have been made available in documentary form from X Ltd’s records, within hours, but it was not.
My conclusion is that both parties, as occurs daily in cases in this court, had their own priorities about the issues that they saw as important to them and focussed on those issues. Much of the detail that could have strengthened the case of each of them was not presented, leaving in doubt matters that could have been established from independent sources. The reasons behind the wife’s change to a much lower paid occupation were left in doubt because she failed to produce any documentary proof to substantiate her evidence that she had attempted to obtain work producing the level of income that she had shown herself to be capable of earning in marketing management. The husband did himself a significant disservice by not putting the full picture of the financial arrangements that he had entered into for the purchase of his present dwelling before the court (and the wife) before the case commenced.
As will appear, however, I was not satisfied that either party had intentionally sought to mislead the court, or the other party.
The parties separated in August 2004 after the wife obtained an ex parte, interim Intervention Order against the husband. She maintained that this occurred following an incident of violence against her and one of the children. The husband deposed that he had no knowledge of the separation until he was advised of the Intervention Order by Police on 24 August 2004. Whatever else this incident may have involved, it fixed the date of separation with some clarity. The inference to be drawn from the evidence of the parties’ relationship since separation including the conduct of the proceedings before me, is that the relationship has been rancorous and remains so to this day.
THE BUSINESS BACKGROUND
MM Ltd was incorporated in December 1994. The husband was appointed a director in 1995. After a series of name changes, it became X Ltd in April 1996. The husband and a Mr SE, whom the husband described as a former partner in a professional firm, agreed to become equal partners in fruit industry related ventures. To this end they entered into heads of agreement dated 15 January 1997. This agreement is in the form of a letter and became exhibit H4. The terms are as follows:
[The husband] has acquired 100% of [X Ltd] & [V Management Pty Ltd]
It is intended that [Mr SE] acquire 50% of [X] Limited.
It is intended that [Mr SE] acquire 50% of [V Management] Pty Limited.
It is intended that a Unit Trust be created to be owned equally by [Mr SE] and [the husband] into which profits made from activities from [X Ltd] and [V Management Pty Ltd] will be invested.
[The husband] and [Mr SE] will be remunerated from the Trust equally, when there are sufficient funds.
The shares in [X Ltd] are owned by [J] Pty Limited through an intermediary company. [The husband] intends to transfer the ownership directly to [J Pty Ltd]. When this is finalised [X Ltd] will issue an equivalent number of shares to [Mr SE] for $0.01 per share.
Both [the husband] and [Mr SE] will act as directors for all companies in the Group. Other directors will be appointed where required.
[X Ltd] will be used to offer interests in prospectuses to the public utilising the dealer licence it holds.
Responsibilities of [the husband] and [Mr SE] will be:
[The husband]
Ÿ Establish project potential
Ÿ Write & Market prospectuses
Ÿ Manage on field project mailers
[Mr SE]
Ÿ Prepare project documentation
Ÿ Manage project administration
Ÿ Manage corporate and taxation administration
Shareholders’ Rights
Both [the husband] and [Mr SE] acknowledge the ownership of the Group will remain in each family on a 50% split.
Should either party wish to sell all or any part of their 50% holding it must be offered with first right of refusal to the shareholders of the remaining shares in equal proportion [sic] the same terms and conditions as the proposed sale.
The corporate structure of interests held by the parties is dynamic and complex. For ease of identification I have adopted the description of these interests as “the [Clarkson] Family Group” as used by Mr CK. The interests held by The Group consists of wholly owned or partially owned investments in the following entities:
·X Ltd
·V Properties as trustee for the V Investment Property Trust (“VIPT’)
·L Pty Ltd
·V Management Pty Ltd
·AV Management Pty Ltd
·J Pty Ltd as trustee for the Y Unit Trust
·TA Properties Pty Ltd
·CN Pty Ltd as trustee for the CN Joint Venture
·TA Pty Ltd as trustee for the TA Project (Stage 1)
·X Ltd as trustee for TA Project (Stage 2)
·HE Limited
·X Ltd as trustee for the SM Property Trust
·L Pty Ltd as trustee for the Self Managed Clarkson Superannuation Fund (“CSF”)
I observe that L Pty Ltd, as trustee for the CSF, is not strictly a part of the group, but its interest in CN Pty Ltd was valued along with the other fruit industry assets, as later appears, and it was not until well into the hearing that agreement was reached (between the expert witnesses and the parties) that this asset is held on behalf of the CSF, and should not appear as an asset of any other entity.
X Ltd manages a number of fruit growing projects in New South Wales and South Australia. X Ltd’s main area of operation is in the MIS business. It is often in the form of unit trusts, and involves investors acquiring fractional interests in the entity relevant to the scheme. Schemes managed by X Ltd include:
·OD Project, South Australia
·SM Project, South Australia
·TA Project (Stage 1), South Australia
·TA Project (Stage 2), South Australia
·HE Project, Victoria
In accordance with their agreement, J Pty Ltd (on behalf of the Clarkson family) and Mr SE each own a 50% interest in X Ltd. The wife owns 990 of the 1000 issued shares in J Pty Ltd.
For convenience I have annexed a description of all of the relevant entities at annexure “A.” I have also annexed a chart of the Clarkson Family Group structure created by Mr CK at annexure “B.” This structure includes the Clarkson Family Superannuation Fund (both parties are members) which was established in June 1997. The chart completed by Mr CK was subject to some fine tuning during the course of the trial but was accepted as being substantially accurate by both parties.
HISTORY OF PROCEEDINGS
I will not recite the complete history of the litigation between the parties; but will provide an overview of some of the more the relevant events.
The wife initiated proceedings for property settlement and spousal maintenance in this Court on 28 June 2005. A Case Assessment Conference was conducted by Registrar Lethbridge on 8 August 2005. As a consequence Mr S and VE Valuers were appointed shortly thereafter as single experts to value the business interests and the former matrimonial home respectively. At this time the husband was represented by his solicitor Gillian Coote. She ceased to represent him on 4 November 2005. Moores Legal took up his representation on 21 November 2005.
A Conciliation Conference was conducted on 24 November 2005 by Registrar Williams. At that time it was envisaged that Mr S would complete his report by 16 December 2005. A further conference was set down for 31 January 2006. This date was vacated as Mr S’s report was not yet complete. I will refer to this issue later.
Moores Legal ceased to act for the husband on 29 June 2006. Thereafter there were several case management, compliance and subpoena hearings where the husband was unrepresented. During that time he sought orders for the sale of the former matrimonial home, the Clarkson Family Group and the appointment of an alternate single expert.
The husband retained Clancy & Triado as his solicitors on 26 July 2007. Upon hearing Mr Sweeney on behalf of the husband and Mr Crofts on behalf of the wife, Young J made orders on 31 July 2007. His Honour’s orders included an order by consent for the sale of the interests held by the Clarkson Family Group and (not by consent) an order for the husband to engage an adversarial witness to value the Clarkson family group, Mr CK. I will make further reference to these orders in due course.
Clancy & Triado ceased to act for the husband on 20 September 2007. The matter first entered my docket on 19 November 2007 following a case management hearing. The husband was unrepresented at the time. From that time I made a number of orders and directions in connection with the preparation of the case, and dealt with various interim applications until the time of trial.
Clancy & Triado resumed representation for the husband on 6 December 2007. On 29 February 2008 I made orders appointing Mr BN as a single expert land valuer. He was to value firstly the underlying assets in which the Clarkson family Group held fractional interests, and then attribute a value to each of those fractional interests. Mr S and Mr CK were the impetus behind his appointment.
Clancy & Triado ceased to act for the husband on 28 March 2008. Thereafter he has remained unrepresented. On 31 March 2008 I made orders which required the husband to produce a significant number of documents. The husband made no appearance on that day. On 16 April 2008 I made an order again requiring the husband to produce the documents referred to in my orders of 31 March 2008. I also ordered that the husband file and serve an affidavit setting out in detail the dates of those documents. During cross-examination by Mr Kirkham QC the husband could not recall whether he had complied with these orders. There was no further application made in relation to the production of those documents before trial.
Thereafter the matter came before me on a number of occasions in an attempt to ensure that the expert reports were completed in time for trial. This was held up by delays in the production of Mr BN’s report. The trial date was vacated on more than one occasion on account of this factor.
I note that whilst Mr BN was finalising his report the parties filed a number of applications seeking the appointment of alternate valuers, but each time they did so, it appeared that the production of Mr BN’s report might be imminent, and so more time was ultimately allowed for him to continue his work When the trial date looked set to be deferred yet again, the wife, supported by the husband, and my specific approval, issued and served a subpoena on Mr BN requiring him to attend Court and give evidence on 8 September 2008 as to when his report would be finalised. His report was completed later that month and forwarded to Mr S and Mr CK shortly before the trial commenced. I would not expect Mr BN’s accounts to the parties in this matter to include any charge for that attendance at court, nor should the wife be out of pocket on account of any conduct money that she may have paid.
The trial commenced on 6 October and was heard over seven days. At the outset, Mr Kirkham QC explained that he would be appearing until the conclusion of the evidence of the parties, and that Mr Crofts would conduct the case for the wife thereafter. This is what occurred.
THE LAW TO BE APPLIED
Section 79 of the Act provides:
79(1)In property settlement proceedings, the court may make such order as it considers appropriate:
(a)in the case of proceedings with respect to the property of the parties to the marriage or either of them - altering the interests of the parties to the marriage in the property; or
(b)in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the marriage altering the interests of the bankruptcy trustee in the vested bankruptcy property;
including:
(c)an order for a settlement of property in substitution for any interest in the property; and
(d)an order requiring:
(i)either or both of the parties to the marriage; or
(ii)the relevant bankruptcy trustee (if any);
to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.
(2)The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account-
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e)the matters referred to in sub-section 75(2) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
The matters to be taken into account in accordance with s 79(4)(e) are:
75(2) The matters to be so taken into account are:
(a)the age and state of health of each of the parties;
(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
(d)commitments of each of the parties that are necessary to enable the party to support:
(i)himself or herself; and
(ii)a child or another person that the party has a duty to maintain;
(e)the responsibilities of either party to support any other person;
(f)subject to subsection (3) the eligibility of either party for a pension, allowance or benefit under
(i)any law of the Commonwealth, of a State or Territory or of another country; or
(ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia, and the rate of any such pension, allowance or benefit being paid to either party;
(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
(l)the need to protect a party who wishes to continue that party's role as a parent;
(m)if either party is cohabiting with another person the financial circumstances relating to the cohabitation;
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i)the property of the parties; or
(ii)vested bankruptcy property in relation to a bankrupt party;
(na)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any financial agreement that is binding on the parties.
As to superannuation, s 90MC of the Act is in the following terms:
A superannuation interest is to be treated as property for the purposes of paragraph (ca) of the definition of matrimonial cause in section 4.
For many years, the Full Court of this Court prescribed a three‑step process to be undertaken in all but exceptional cases when exercising the discretion conferred by section 79. See, for example, Ferraro v Ferraro (1993) FLC 92‑335. In that case the Full Court held at 79,561:
A now well‑established line of authority in this court indicates the approach normally to be taken to the exercise of the discretion in section 79 proceedings. That approach is firstly to ascertain the property of the parties at the time of the hearing, then to consider the contributions of the parties within paragraphs (a) to (c) of section 79(4), and then to consider the matters in paragraphs (d) to (g), more especially paragraph (e), which takes up by reference the provisions of section 75(2) and which are generally referred to as the section 75(2) factors.
The Full Court has also recognised that there is a further step that should be undertaken in property proceedings. I will refer to it as the overview step. This takes place once the court has ascertained the property of the parties, conducted its assessment of the parties' contributions and made adjustments to take into account all relevant factors under section 75(2). At that stage the court should stand back from the outcome thus far reached, look carefully on the effect on the parties of the orders envisaged, and consider whether the outcome produced is just and equitable within the meaning of subsection 79(2). This approach may be seen in operation in the case of Aleksovski and Aleksovski (1996) FLC 92‑705. It has been stated more recently by the Full Court in Hickey and Hickey and Attorney-General for the Commonwealth Of Australia (Intervener) (2003) FLC 93-143 in paragraph 39:
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 in 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; Davut and Raif (1994) FLC 92-503; Prpic and Prpic (1995) FLC 92-574; Clauson and Clauson (1995) FLC 92-595; Townsend and Townsend (1995) FLC 92-569; Biltoft and Biltoft (1995) FLC 92-614; McLay and McLay (1996) FLC 92-667; JEL and DDF (2001) FLC 93-075 and Phillips and Phillips (2002) FLC 93-104.
I also make reference to Coghlan and Coghlan (2005) FLC 93-220 a decision of the Full Court in relation to the treatment of superannuation. As will be seen, I have not treated superannuation as a separate pool. The parties jointly approached superannuation by adding the agreed valued of their superannuation interests (each of which is identified later) to the other property available for distribution.
DOCUMENTS RELIED UPON
The wife relied on the following documents:
·Her Application for Final Orders filed 28 June 2005
·Her affidavits sworn or affirmed 22 September 2008 (“her first affidavit”) and sworn or affirmed 29 September 2008 (“her second affidavit”)
·The affidavit of Mr BN (a single expert witness) sworn October 2008
·The affidavit of Mr S (a single expert witness) sworn 3 October 2008
·Her Financial Statement filed 29 September 2008
The husband relied on the following documents:
·His Response to an Application for Final Orders filed 3 August 2005
·His affidavits sworn or affirmed 19 September 2008 (“his first affidavit”) and sworn or affirmed 29 September 2008 (“his second affidavit”)
·The report of Mr CK (the husband’s adversarial witness as to the value of the Clarkson Family Group) completed in September 2008.
·His Financial Statement sworn 19 September 2008
Orders sought
In the wife’s Application for Final Orders filed 28 June 2005 she sought the following orders:
1.That the husband pay to the wife maintenance in such sum as the Court deems appropriate.
2.That the property of the parties be divided in such manner as the Court deems appropriate.
In his Response to an Application for Final Orders filed 3 August 2005 the husband sought the following orders:
1.That paragraph 1 of the wife’s Form 1 Application filed 28 June 2005 be dismissed.
2.That there be a property settlement between the husband and the wife.
…
3.Such further or other Orders as this Honourable Court deems appropriate.
The orders sought in the wife’s outline of case submitted shortly before the commencement of the trial were in the following terms:
11. That the wife retain:
a)[K property] being the land more particularly described in certificate of title volume […] Folio […] and save as provided for herein the contents thereof.
b)All her right title and interest in any superannuation in her name with:
i.Victorian Independent School Superannuation Fund
ii.[HA Fund]
iii.Supertrace
c)All her rights title and interest in:
i.All accounts in her name at the Westpac bank
ii.All accounts in her name at ING
12.That the husband forthwith do all such things as may be necessary to transfer to the wife her car registration number …… at his expense
13.That the wife forthwith at the expense of the husband:
aResign as director or office bearer of [J] Pty Ltd in favour of the husband or his nominee
bTransfer to the husband or his nominee all her right and interest in any shares in [J] Pty Ltd
cAssign to the husband an debit or credit loan account in her name with [J] Pty or the [Y] Unit Trust
And that the husband as from this date indemnify the wife in respect of any taxes, fines, lodgement fees or charges of whatsoever nature that shall at any time be levied against her arising whether directly or indirectly from her role(s) in [J] Pty or the [Y] unit Trust on or after 1 July 2007
14.That the wife forthwith at her own expense:
a.Resign as a director or office bearer of [L] Pty Ltd in favour of the husband or his nominee
b.Transfer to the husband or his nominee all her right title and interest in any shares in [L] Pty Ltd
c.Assign to the husband any debit or credit loan account in her name with [L] Pty Ltd or The [L] Investment Trust
And that the husband as and from this date indemnify the wife in respect of any taxes, fines, lodgement fees or charges of whatsoever nature that shall at any time be levied on her arising whether directly or indirectly from her role(s) in [L] Pty Ltd or The [L] Investment Trust on or after 1 July 2007 cause [sic]
15. That the husband retain:
a.all his right title and interest in the property known as and situate at [N] being the land more particularly described in certificate of title volume […] Folio […] and save as provided for herein the contents thereof.
b.all his right title and interest in any superannuation in his name with Macquarie Bank
c.All his right title and interest in:
i.All accounts in his name at National Australia Bank
ii.All accounts in her name at ING
16. That in accordance with S 9OMT of the family law Act 1975 the husband is entitled to the specified percentage, being 100% of each splittable payment made out of the wife’s interest in the self managed superannuation fund [Clarkson] family Superannuation Fund (‘The Fund”)
17. The operative date of Order 16 is the date of transfer of then transferable benefit being a date not more that 14 days from the date of this Order.
The orders ought by the husband in his summary of argument filed 3 October 2008 were:
1.That the wife and I jointly arrange for the sale of the [K] property and settlement to be effected by 31 January 2009. Net proceeds to be split 52% to the wife and 48% to me.
2.I keep the [N] property.
3.I take over the entire [Clarkson] interest in the [X] Group and [CN] for $1,200,000. This transaction to be completed by 31 October 2008 at no taxation cost to me. The transfer amount includes any cash in [L Pty Ltd] and [J Pty Ltd] bank accounts and I take over the [CN] internal debt.
4.That after the parties agree [sic] of the ‘sale’ value of the [CN] and [X] interests to the husband that the family accountant, [Mr RE] from […] in Brisbane do a calculations of the total potential GST liability facing the husband based on the agreed value and that an allowance of 80% of this CGT liability be credited to the husband to increase his pool split. This could add a further 4-6% of the pool to the husband.
5.The Audi car registered in my name but driven by the wife be registered in the wife’s name.
…
8.That both parties divide the SMSF in proportion to that listed in the 2008 accounts. An adjustment will need to be made regarding the valuation of [CN], deducting the [Clarkson] interest in the loan. I will take the net [CN] value in my allocation of the super fund.
9.The husband retain his interest in the Macquarie Super fund.
10.The respective parties maintain their existing bank accounts.
11.That I be granted 5% extra of the total pool to cover the fact he is 10 years older and close to retirement age, willing to take the assets in the [fruit] industry, has total responsibility for both dependent daughters, one under 18 and both fulltime students.
12.I entered the marriage with almost 12% of the final pool compared to the wife with about 0.5%. The husband be allocated 6% of the pool to cover the pre marriage assets.
After hearing the expert evidence on 9 October 2008, the husband wished to amend the orders sought by him to require a sale of the Clarkson Family Group. On 17 October 2008 he filed an Application in a Case and a supporting affidavit whereby he sought to amend previous orders sought by him in his Response to an Application for Final Orders filed 3 August 2005 and those included in his summary of argument filed 3 October 2008. He specifically sought that the interest held by the Clarkson Family Group be sold except for the interests in AV Management, which the husband would retain.
One basis for the husband’s application was that a sale was envisaged and ordered by consent by Justice Young on 31 July 2007. It was not made clear in the proceedings before me why the sale did not proceed, although the husband attributed it to the absence of action by the wife. Whatever may be the case, it appears that no application to enforce that order was made by the husband. The same order of Justice Young granted the husband’s application to use an adversarial witness. I have already mentioned that the husband had previously sought the sale of the K Property in a number of his affidavits and applications before this Court.
After hearing the submissions from Counsel for the wife and from the husband on 21 October 2008 I dismissed the husband’s application to amend. The application arose when the evidence was nearly concluded and I considered the difficulty and delay that would have resulted from permitting the amendment sought by the husband, particularly as Mr SE would have had to be served and heard before orders for the sale of assets in which he has interests could be made.
In the husband’s final submissions he sought 65% of the pool if Mr CK’s valuation of the Clarkson Family Group was accepted and 73% of the pool if Mr S’s valuation was accepted. The division sought by the wife at the conclusion of the trial was based on her assessment of the pool was 46.67%.
THE ISSUES
The value of the Clarkson Family Group has been central to this dispute for the duration of this litigation. A single expert was ordered by Registrar Lethbridge to value the relevant interests during the Case Assessment Conference on 8 August 2005. Thereafter Mr S was retained. Justice Young made orders on 31 July 2007 allowing the husband to instruct and rely upon an adversarial expert witness (Mr CK) at his own cost. I appointed Mr BN as single expert to value the land interests held by the Clarkson Family Group on 29 February 2008, by which time it had become clear to Messrs S and CK that a valuation based on net tangible assets was the appropriate methodology for the relevant interests, and the issue from their perspective became one of whether any further discount should be applied to the net tangible assets in addition to those applied by Mr BN. All of the experts gave oral evidence in each other’s presence on 9 October 2008. As appears later, they also provided some additional evidence by letter on later dates.
Relevant to issues regarding expert evidence is the husband’s alleged non-disclosure. The wife’s case is that the husband has forcefully expressed his views regarding the conduct of the valuations and she alleges failure to disclose relevant business documents. Accordingly she seeks to rely on the principles set out by the Full Court of this Court in Black and Kellner (1992) FLC 92-287, Weir and Weir (1993) FLC 92-338 and Chang and Su (2002) FLC 93-117.
The husband’s case is that he made a greater financial contribution at the outset of the marriage. The wife agrees that the husband brought significant assets into the relationship but not to the extent claimed by him. The parties agreed that contributions (other than initial contributions) were equal from the date of marriage to the date of trial, requiring no adjustment for the post-separation period.
The husband sought an adjustment in his favour for section 75(2) factors that I have identified earlier. In final addresses, the wife sought an unspecified adjustment in her favour. As appears above, the husband raised the issue of capital gains tax in his orders sought at trial, but provided no evidence of what amounts might be involved. Mr Crofts accepted that it was a relevant matter, in circumstances where the husband would be acquiring the interest of the wife in the Clarkson Family Group, and where sales of group interests by the husband in the short to medium term were foreseeable. He suggested a modest adjustment to recognise this matter under s 75(2), and in the absence of any evidence, that is the approach that I have taken.
At the start of the hearing Senior Counsel for the wife ensured that the husband was given a copy of the headnote from Re F: Litigants in person guidelines (2001) FLC 93-072. In their reasons the Full Court set out guidelines for trial judges in cases involving litigants in person to accord with procedural fairness.
Mr Kirkham SC and Mr Crofts whilst both properly representing their client, made reasonable and sensible concessions so that the trial could proceed in an orderly manner. For example, Mr Crofts made his final oral submissions before the husband, to ensure that the husband understood what issues needed to addressed and the appropriate form of such submissions. Counsel for the wife took a general objection to much that appears in the husband’s affidavit material but did not pursue this beyond the level of a general objection. At all times throughout the hearing the husband maintained his decorum and respect for the Court.
NON DISCLOSURE
Rule 13.04 of the Family Law Rule 2004 requires a party to a financial case to make full and frank disclosure of their financial circumstances. The wife’s case is that the husband has deliberately failed to disclose details of the parties’ business interests.
The wife relied upon the Full Court decision of Chang v Su whereby their Honours Kay and Dawe JJ with Finn J agreeing cited with approval the observations of Nicholson CJ in Black and Kellner at 79133, who was endorsing the Full Court in Giunti and Giunti (1986) FLC 91-759 at 75,777:
It is obviously desirable as a general principle that the Court should first of all identify the pool of assets available and evaluate it. If each party complies with his or her obligation to make a full and substantive disclosure of their financial affairs... there is no problem although there may be disputes as to valuation.
In Weir and Weir the Full Court comprising of Nicholson CJ, Strauss and Nygh JJ remarked at 79,593:
It seems to us that once it has been established that there has been a deliberate non-disclosure, which follows from his Honours findings in this case, then the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.
The Conciliation Conference was listed on 31 January 2006. On 16 December 2005 Mr S, the single expert, sent the following email to the parties’ legal representatives:
I refer to my email of 1 December re this matter. You will appreciate that the preparation of an updated report was contingent upon receiving further information from [Mr RE] of […] Chartered Accountants. Whilst [the husband] and his business partner Mr [SE] have provided some material in relation to the entities listed in the Court Orders I have not received any material from Mr. [RE]. I have again telephoned him to expedite the receipt of the material. As such I am unable to provide any further reports in relation to the [Clarkson] Financial affairs at this time. I will advise you immediately I receive the information from Mr. [RE].
The Conciliation Conference was not able to proceed as Mr S indicated on 27 January 2006 that he had yet to receive the required documents. The husband subsequently agreed that he would provide Mr RE, the Clarkson family accountant with the necessary financial information to enable him to complete Financial Statements for the year ended 30 June 2005. Upon completion those documents were to be forwarded to Mr S to enable him to finalise his report.
At page 2 of his report dated 21 November 2005, Mr S makes reference to information on the following entities which had not been made available to him before the finalisation of that report:
We are yet to have made available information relating to [TA] Properties Pty Ltd, [TA] Pty Ltd, [AV Management] Pty Ltd or The [Clarkson] Family Trust.
The latter entity is of particular interest as it has a loan account of $1,088,401.62 owing to it by [V Investment Property Trust]. A full examination of this entity would greatly assist in the final determination of the Groups value.
On 20 March 2006 Mr S again emailed the parties’ solicitors indicating that he had yet to receive the documents. The wife deposed at paragraph 86 of her first affidavit that Mr RE forwarded by email the Financial Statements for J Pty Ltd as trustee for the Y Unit Trust, L Pty Ltd, the L Investment Trust and the Clarkson Superannuation Fund to her and the husband on 11 April 2006.
She deposed at paragraph 87 of her first affidavit that on or around 19 April 2006 Mr S had yet to receive financial documents pertaining to the Clarkson Family Trust.
In his affidavit, Mr S annexed the following letter dated 31 May 2006 addressed to the wife’s solicitor and the husband:
We write as a follow up to our Interim report as to the Indicative Assessment of Value dated 21 November 2005 in relation to [X Ltd], the [V Investment Property Trust] and [V Management] Pty Ltd.
Pursuant to Westminster’s Letter of Instruction dated 24 November 2005 I have attempted to clarify the issues raised on page 2 of my report dated 21 November 2005. In this regard I have been provided on 11 April 2006 with draft Financial Statements as at 30 June 2005 in respect of:-
1. [J] Pty Ltd ATF the [Y] Unit Trust.
2. [L] Pty Ltd.
3. [L] Investment Trust.
4. The [Clarkson] Family Superannuation Fund.
I note that whilst I have requested copies of the [Clarkson] Family Trust Financial Statements for the same year and earlier years these have not been provided. The non provision of these Financial Statements has prevented clarification of the issues raised in relation to our interim report.
However the material provided has enabled us to determine that:-
a. The ownership of the units in the [V Investments Property Trust] (“VIPT”) is uncertain. The original material provided recorded the [Clarkson] Family Trust as owner, yet advice received from Mr [SE] was that [J] Pty Ltd ATF the [Y] Unit Trust was the owner. Verbal advice received from Mr [RE] was that income from VIPT has been returned in the [Y] Unit Trust yet the Loan accounts within the VIPT record [the husband] as having been credited with the income distributions. As at 30 June 2005 [the husband] is recorded as being owed $1,088,401.62. Mr [SE’s] advice is that subject to conversion of the VIPT assets to cash this amount would be payable to [the husband].
I will interpose here that I find that there is no evidence that the Clarkson Family trust, although obviously mentioned in documents seen by Mr S, exists. J Pty Ltd ATF the Y Unit Trust is the owner of the assets that, it appears, were once attributed to the Clarkson Family Trust. The loan account mentioned in this subparagraph appears to be current but was (properly) not included as a separate asset of the husband in the wife’s asset table which I have adopted in substantial part: the assets from which it might be repaid are included in the valuations of the Group’s assets.
I will further interpose that having regard to the advice noted by Mr S in paragraph (a) above (as received by Mr SE), that the loan account to VIPT is in fact in the name of the husband. I will treat all loan accounts relevant to this matter as being in the husband’s name alone. This resolves an ambiguity as to ownership (the husband, the wife, or joint?) that was observed during the trial arising from the parties having common initials. Mr S’s letter continued:
b. [L] Pty Ltd and [L] Investment Trust, list an investment and a fixed asset respectively, $81,000 in respect of “Equity in Partnership-[CN Joint Venture]” and “shares in [CN] Pty Ltd (at cost). The [Clarkson] Family Superannuation Fund also lists as an Investment “Units in Unit Trusts $81,000” presumably being the [CN] Investment by the [L] Investment Trust. Clearly there is confusion as to the ownership of the [CN] Investment which will require inspection of prime source documentation to clarify. [The husband] has previously stated that there is double counting in respect of this asset, which based on the material provided, is correct.
I again interpose to observe that although Mr S acknowledged the double counting of this asset quite early in the proceedings, the position was not finally resolved until the trial was under way. The letter continued:
c. [L] Pty Ltd has Net Assets of $187,228 as at 30 June 2005 the majority of which is represented by Equity in the [CN Joint Venture]. I note that the accounts for this entity have also not been provided and as such I offer no comment in relation to the value of [L] Pty Ltd.
Whilst I appreciate the frustration the delay in finalizing this matter is creating, it is my opinion that the accounting records of this group lack accuracy which has and continues to inhibit the formation of an accurate assessment of value of the Group. The material provided has not changed the opinions expressed in my earlier report.
The L Pty Ltd issue was clarified during the trial on 9 October 2008 when Mr S and Mr CK conferred and agreed that its value was $47,919. The parties agreed, however, that this should not appear as a separate asset in the pool given that certain loan accounts were being included in the pool, and the proceeds from the sale of assets in accordance with the order of Young J were being added back to the pool.
In the wife’s Application in a Case filed 22 December 2006 she sought the following order:
That the husband forthwith provide to the wife’s solicitor copies of the last four financial years profit and loss statements, balance sheets and tax returns for [V Properties] Pty Ltd and/or the [V Investments Property Trust] and [V Management] Pty Ltd.
The husband emailed the wife on 2 January 2007 and in reference to the accounts of these companies stated that the data was “historic” and was of “little use going forward.”
Order 5 of the orders of Young J made on 31 July 2007 required the husband to provide all documents sought by the wife and Mr S including but not limited to the documents sought at paragraphs 4 and 5 of the wife’s Amended Application in a Case filed 4 June 2007. Those documents included:
·The last three years accounts of the CN Joint Venture
·The last three years accounts of CN Pty Ltd
·The last three years accounts of the L Investment Trust
·The last three years accounts of the Y Unit Trust including details of the publicly listed shares owned by that trust
·The last three years accounts of AV Management
·Trust deeds, constitutions and minutes of directors and trustee meetings for each company or trust referred to above
·Details of all bank accounts, and fixed interest investments held in the name of the husband, including statements for the same for the past three years
·Copies of the last four financial year’s profit and loss statements, balance sheets and tax returns for V Properties and/or the V Investments Property Trust and V Management
I note that in their final reports both Mr S and Mr CK relied upon draft Financial Statements for year ended 30 June 2007 for V Management and AV Management. The wife’s case was that the final versions of these statements although available were not made available to the experts.
Another issue raised by the wife in the context of the husband’s alleged failure to disclose is in respect of the purchase of the N property and monies borrowed to pay the purchase price and costs of sale. The husband deposed that he began contemplating the purchase of a home with the assistance of Mr SE in November 2006. The husband provided no information on this mortgage in either of the affidavits that he relied upon. Light was only shed on the matter during the trial. The wife’s allegation centres on the husband’s last minute production of limited material. Her own attempt to subpoena documents from the relevant bank were made too late for the bank to be able to comply.
Mr Kirkham QC cross-examined the husband on this issue:
What I'm saying to you is that VIPT has paid that sum to purchase a house in your name?---[V] Properties as trustee for that trust, yes, correct.
And you're not paying any moneys at all in relation to the interest-only loan which is extant I think for three years from the date of the settlement?---Correct.
HIS HONOUR: Sorry, is that correct?---Yes.
MR KIRKHAM: Yes, your Honour.
HIS HONOUR: That is you're not paying any money?---No.
MR KIRKHAM: VIPT or [V] Properties, whoever you like, is responsible for payment of that interest-only loan under the mortgage documents?---Correct.
Of course - - -?---But may not necessarily pay the money.- - - has the option at the end of three years of rolling that interest-only loan over and continuing to pay it?---Not if you take the letter that Mr [SE] has written, and we will get a copy of the loan documents tomorrow that says that if it's not repaid by the end of June 09, the property must be sold.
The husband then produced the following letter dated 18 June 2007, it became exhibit H1. Mr SE wrote to the husband (on behalf of himself and the directors of VIPT) with respect to the funding of the purchase of the N property:
The NAB has agreed to lend up to $800,000 specifically against the purchase of the house provided both you and I guarantee the loan. As agreed between us I am prepared to let this happen on the following terms:
· The house is maintained and improved by you to ensure it keeps its value
· The NAB defers repayment of the $350,000 loan to VIPT to enable VIPT to fund the balance of the purchase price
· VIPT will cover the cost of interest on the loans until 30 June 2009
· The company is in a position to repay the loan to the NAB by 30 June 2009 as a result of your settlement with [the wife] and that the total costs of acquisition are repaid by you to VIPT
· If you are not in a position to either refinance the loan yourself or pay it out completely by 30 June 2009 then the house is to be sold and the net proceeds of sale are to be paid to VIPT in repayment of all costs outlaid on your behalf and any gain made is to be to the account of VIPT to cover the cost of funds borrowed from the NAB. Any excess funds beyond that are to be paid to me in compensation for the risk taken by my family in guaranteeing the loan.
· I reserve the right to enter a caveat on the title deed to protect the interests of VIPT and myself
· By countersigning this letter you agree to the above terms.
The husband was cross-examined by Mr Kirkham about a communication that he wrote to the wife on the next day informing her that was attempting to rent a property in N and that he may have to reside in South Australia, where rent free accommodation was available on a property to which he had access. The wife’s case is that the husband was being deliberately misleading in asserting that he faced a housing crisis, given that the 18 June 2007 letter set out above appears to ensure that his purchase of N property will be funded. As the evidence established, however, the husband did not obtain possession of the N property until 27 October 2007 as it was purchased subject to an existing tenancy agreement, as appears from a letter from Clancy & Triado dated 6 February 2008 to the wife’s solicitor. This letter is set out below. The husband gave evidence that prior to taking possession of the N property he was sharing a house with two other people. He gave evidence that he struggled to meet rental payments that fell due during this time. Furthermore, that following his housemates’ relocation he had nowhere to live.
On this point, I find that the husband was not deliberately misleading in sending the communication to the wife on which he was cross examined. He had a need for housing at the time, and was not going to be in a position to occupy the N property until some four months after the date of that letter.
Returning to the financing arrangements for the purchase of the N property, correspondence from the National Australia Bank dated 13 July 2007 was produced by the husband during the trial, it indicated that V Properties entered into a facility agreement on 19 June 2007. It read:
We are pleased to advise that your credit contract has been drawn down and disbursed in accordance with your instructions as follows:
Source of funds
Variable Rate Interest Only Home Loan National Choice Package For $800,000-000
Loan Account Number […]
Home Loan Account $800,000-00
Business Management Account […] $211,702-97
TOTAL $1,011,702.97
Disbursements
National Australia Bank on account of [Mr GC] $952,861-37
[Mr FH] $ 1,047-20
Annual Package Fee $ 375-00
Government Fees & Charges $ 1,484-40
Stamp Duty – Vic Transfer of Land $55,935-00
TOTAL $1,011,702.97
As set out in your credit contract(s), we have debited credit fees and charges to establish the facility.
Other Information
Facility Agreement dated 19/06/2007
Variable Rate Interest Only Home Loan National Choice Package Loan Account Number […]
Interest only repayment period 3 years 0 months
Expiry of interest only repayment period 28/06/2010
It is apparent from this letter that the interest only repayment period expires on 27 June 2010. Furthermore that a total of $1,011,702.97 had been drawn down by 13 July 2007. The husband gave evidence acknowledging that the contract of sale and deposit were paid prior to 30 June 2007.
The second page of the letter from the National Australia Bank dated 13 July 2007 is missing. It was called for by counsel for the wife but it was not produced by the husband. Senior Counsel for the wife criticised the husband for the late production of this letter which had been readily available for quite some time. The husband gave evidence that he did not realise that the N property mortgage was such a contentious issue.
The husband first made reference to the N property in his affidavit sworn on 2 April 2007. It next appears in his Financial Statement filed 3 January 2008. He made no reference to the N property in either affidavit he relied upon at trial.
On 27 August 2008, the National Australia Bank again wrote to the directors of V Properties regarding their bill facility:
Bill facility limit: $350,000.00
Bill facility end date: 31/05/2009
I am writing to confirm that on 27/08/2008, $583.33 was charged to your nominated account number […], to pay your facility fee for the period from 27/08/2008 to 26/09/2008.
Here are the details of this facility fee:
Facility fee percentage: 2.00% pa
Number of days: 31
From this document it is apparent that the bill facility ends on 31 May 2009. The husband’s case is that a total of $1,150,000 has been borrowed by V Properties on behalf of the VIPT and applied to the acquisition of the N property and is repayable by him on 30 June 2009.
The wife’s contention is that the $350,000 appears in the Financial Statement of V Properties as trustee for VIPT for year ended 30 June 2007, thus is included in the valuations conducted by Mr S and Mr CK. The husband agrees that the bill facility of $350,000 appears in that Financial Statement but points to corresponding assets that were in the balance sheet at the time, that, he asserts, were subsequently applied in repayment of the facility, before it was drawn down for the purchase of the N property.
On 6 February 2008 Clancy & Triado wrote to the wife’s solicitor regarding documentation requested by the wife. This letter forms part of exhibit W1. It read:
Regarding the balance of documents requested we are instructed as follows:
(a) Our client took possession of the [N] property on 27 October 2007. It was previously purchased subject to a tenancy agreement which did not expire until October 2007. Our client and the two children moved into the home when it became vacant. Documents relating to the purchase and financing of [N property] are with the solicitors and are being retrieved. You have a copy of the relevant pages of the contract.
(b) There are no documents evidencing works completed on the [N] property. We are instructed that our client has personally painted inside, sanded the floors, purchased and installed new bathroom fittings, and replaced the kitchen using a pre-fabricated kit. No structural work has been performed and no permits were required.
(c) All documents in our client’s possession for the NAB account are enclosed. Our client has not retained all statements and we have been instructed for costs reasons not to collate the statements, hence originals are provided. A current print out from the NAB internet banking site indicating the present balance of the fund is also enclosed.
…
(a)Our client is working to gather documents regarding the [N] property. We expect to provide these shortly.
During cross-examination by Senior Counsel for the wife, the husband agreed with the proposition that he was not paying any of the interest and that either VIPT or V Properties would be responsible for the payment of the interest on the loan. Exhibit W1 which includes a National Australia Bank statement for V Properties for the period 25 December 2007 to 24 June 2006 indicates that the entity pays $5000-odd per month in interest repayments, on the $800,000 mortgage. This equates to approximately $60,000 per annum.
In the husband’s Financial Statement dated 19 September 2008, he asserted that he had mortgage repayments due to the National Australia Bank which were presently deferred as he was unable to make payment.
In his Financial Statement filed 3 January 2008, the husband made no reference to the facility agreement dated 19 June 2007. In that same document, the husband claimed that the mortgage was entirely in his name. In a later Financial Statement dated 19 September 2008, the husband deposed that the mortgage entirely in his name totalled $1,011,702. During cross-examination by Senior Counsel, the husband conceded that these documents were incorrect however that his knowledge of the borrowing had “been amplified considerably in the last three or four days.” The husband added that he honestly believed that the mortgage was entirely in his name.
A further argument advanced on behalf of the wife in this context relied on the case of Af Petersens and Af Petersens (1981) FLC 91-095. In his reasons for judgment, Nygh J held that in determining what constitutes the property of the parties to the marriage, the Court can determine whether money is owed to a third party. The wife’s submission was that the husband did not make out his obligation to repay V Properties as trustee for the VIPT $350,000. She asserted that that this obligation, if it even exists is likely to be renegotiated. She pointed to the letter of the 18 June 2007 as evidence thereof.
The wife’s case was that the loan/s with respect to the N Property loan decreased J Pty Ltd’s loan account rather than being recorded as a receivable from the husband. The husband’s case is that the loan agreement was signed before 30 June 2007 and therefore should be recorded as an asset in the Financial Statements of V Properties as trustee for VIPT, with him liable for its repayment.
In his oral evidence, the husband explained that he regarded himself as bound by his agreement (exhibit H1) to repay all borrowings (or to put VIPT in a position to do so) by 30 June 2009. Despite some ambiguities in the documentation provided in support of this contention, (exhibit H1) I consider that it has the effect asserted by the husband, and that although the $800,000 facility is available for three years, VIPT (and Mr SE) have only committed themselves to covering all relevant interest payments until June 2009. The provision requiring the sale of the N property and repayment to VIPT of all funds advanced towards its purchase in default of repayment by the husband by 30 June 2009, and the husband’s own evidence, which I accept, satisfies me that the effect of this agreement is as stated by the husband. I find that although it was inaccurate for the husband to describe himself (as he did in his financial statements) as being personally liable for funds borrowed on mortgage to fund his home purchase, that was his perception of his position and whilst his liability is in fact to Mr SE and VIPT, I find that he is obliged to repay funds totalling $1,150,000 by 30 June 2009. I do not accept that I should find that Mr SE or VIPT are likely to pay the interest on the borrowings for the three year period of the $800,000 facility at $60,000 per annum. This would create a serious imbalance in the benefits accruing to each family, contrary to their original agreement, and I see no commercial or personal basis on which Mr SE might do more than he has done already to assist the husband to purchase a home. Unlike some arrangements between family members that often come before this court, there is nothing in the evidence of the operation of this two family enterprise that point to the likelihood that Mr SE would act with extravagant generosity towards the husband, at the expense of his own family’s interests, especially in times of difficulty for the industry as identified by Mr BN.
I am not satisfied that there has been any relevant non disclosure of any material evidence by the husband, or that the husband set out to mislead either the wife or the court.
THE ASSET POOL EXCLUDING THE CLARKSON FAMILY GROUP
For convenience, I have adopted the structure of the wife’s version of the asset pool from her final written submissions. During final submissions the parties made a number of concessions which I have incorporated:
K property $2,700,000
N property $1,200,000
Audi car, $10,000
Wife’s shares $8,462
Wife’s bank accounts Westpac $617
ING $10,949
Loan account due from L Pty Ltd $114,785
Husband’s shares Telstra $Unknown
Husband’s bank accounts NAB $4,654
Add backs pursuant to Justice Young’s orders of 31 July
2007 $120,464
The parties’ superannuation interests totals $404,097. They include:
Husband’s Macquarie Bank $81,325
Wife’s Victorian Independent Schools $9,300
Wife’s HP Fund $3,803
Wife’s HA Fund $1,394
Wife’s Supertrace $5,552
CSF (including the CN Joint Venture) $302,723
Consistent with authority, the parties agreed that a total of $120,464 would be added back to the pool as an identifiable monetary sum which had been realised by the parties for their legal costs pursuant to orders made by Justice Young on 31 July 2007: see Farnell v Farnell (1996) FLC 92-681 and Chorn v Hopkins (2004) FLC 93 204.
The N property, particularly known as Certificate of Title Volume … Folio …, was purchased by the husband in his own name in June 2007 for $1,050,000. It has been valued at $1,200,000 by agreement. The parties agree that it is subject to a mortgage of $800,000. The husband’s case is that he borrowed an additional $350,000 from V Properties making a total of $1,150,000 which included acquisition costs. I have already made findings about these liabilities.
The husband also has a liability of $11,923 owing to J Pty Ltd as trustee of the Y Unit trust.
I made consent orders with respect the parties’ fruit interests and household contents on 10 October 2008. This effected a distribution by consent of these assets without placing a value on the property distributed, or the proportional amount received by each of the parties. These items do not therefore appear in the asset table.
Expert evidence
Mr S has been involved in this case as the single expert since November 2005. Prior his appointment the wife agreed to the husband having a preliminary discussion with him regarding the methodology he intended to use in his valuation. It was initially envisaged that Mr S would complete his report by 16 December 2005. A Conciliation Conference was scheduled for 31 January 2006 but it did not proceed as Mr S had yet to finalise his report. As set out above, Mr S was unable to finalise his report as he had not yet received Financial Statements from the Clarkson family accountant Mr RE, for the year ended 30 June 2005.
In her affidavit material the wife deposed that she gained part time employment with QT Group some time in 2002. She claimed that she earned $24,000 as a result. Her evidence is that she was “retrenched” from this position in November 2005. During examination in chief she asserted that:
…there were new owners of the property coming in and they came to me and said that unfortunately I would not be required any more because the new owners were a husband and wife team and the woman had sales experience. She had been working for [QT] herself and she was a salesperson, and they could not afford to keep me on.
During her examination in chief the wife deposed that following her retrenchment she rang contacts in the industry in an attempt to find employment, including the resources management at PH Company. Furthermore that she completed twenty to thirty online applications and made six to eight applications by letter. When pressed by the husband in cross-examination she adjusted this number to four to five applications by letter.
Her affidavit material relied upon at trial did not provide any explanation for the commencement of her health services diploma, although it is clear that she took up voluntary work at the CH Facility in 1999. During examination in chief she asserted that she had an interview with a woman from Centrelink who advised her that at her age it would more accessible to find jobs in the health services sector rather that pursue her current line of work (marketing management). She deposed that a plan was then followed which included university applications for the training required.
The wife is due to complete her health services diploma by the end of this year. She deposes at paragraph 32(i) and 32(iv) of her second affidavit that:
I am undertaking a course in [health services]. I expect to earn $20 — 25 per hour on completing the course and hope to work 3-4 days per week.
…
Prior to taking up my current studies I did endeavour to obtain senior [marketing] positions without success.
The wife gave evidence that following her studies she intends to obtain a health services role, which is an activities based role. Her evidence was that she only intends to work for three to four days due to physical and mental strain associated with this type of employment. The wife also indicated that she intended to continue her casual employment with M School.
In final addresses Mr Crofts estimated the wife’s future salary at $42,000. This sum included monies derived from salary from a health services role and continued employment at M School.
The husband’s case is that the wife has not been proactive in re-obtaining employment in the field in which she was previously very successful, marketing and management. At paragraph 38 of his first affidavit he deposed:
… whilst in previous affidavits she contends that she has tried to obtain senior [marketing] positions she has not contacted the best man at our wedding who now is the Managing Director of the […] Group, one of Australia’s leading groups and he has a position for the wife if she wanted to contact him. The same person, [Mr FE], employed the wife in Melbourne in 1985.
In the wife’s second affidavit she admitted that she had not been in contact with Mr FE.
The salary derived by the husband from his employment became a contentious issue between the parties. The husband has deposed that his salary has remained at $90,000 since separation. The wife deposed at paragraph 53(ii) of her first affidavit that:
Until separation the two families involved with [X Ltd] (the [Clarkson] Family and the [SE] Family) had each received $120,000 paid as to $30,000 as a salary to the wife and $90,000 as salary and benefits to the husband and/or by way of dividend from [X Ltd] to [J Pty Ltd]. In 2002 at the time of considering the purchase of a house in France the husband had provided to me a schedule which estimated that these monies would increase to $225,000 per annum per family from 2005.
The wife’s case is that since she ceased to receive a salary from X Ltd in March 2005, a reasonable inference is that the husband receives $120,000 in salary, which would be consistent with the Clarkson-SE families each receiving $120,000 per annum. In support of this argument she relied upon annexure “RLMC2” to her first affidavit which is the schedule prepared by the husband to which I have made reference.
The husband, at paragraph 43 of his first affidavit described that schedule as “accurate at the time but environmental and currency changes have meant this schedule is worthless.”
Senior Counsel for the wife conceded that this schedule was not relied upon as evidence that now assisted in resolving the question of the husband’s earnings.
The wife’s case also asserts that the husband’s receipt of superannuation contributions from his employer is indicative of his salary being over and above $90,000. During his oral evidence, the husband acknowledged that he was not salary sacrificing his income. He was then presented with tab F of exhibit W1, a Westpac Bank Cash Management Investor Option statement for L Pty Ltd as trustee for the CSF. This statement shows that the husband received $2025 in superannuation payments for September-October 2007. He subsequently agreed that this would equate to a salary of $81,000 in addition to $9,000 in superannuation entitlements calculated at 9% per year.
The husband was then presented with another statement for the period January-February 2008. In that statement the husband is recorded as having received $2925 for that quarter. He agreed that an increase of $900 per quarter could reflect that his salary had increased from $90,000 to about $130,000 per annum. Senior Counsel for the wife submitted that these statements were evidence that the husband’s salary has increased $90,000 from the time of separation to the time of this trial. The husband maintained that his salary had not increased. I indicated that I would require him to furnish to the wife his income tax assessments for the last three years (including any amended assessments) as part of my orders. The husband accepted that this was appropriate and offered, in final addresses to tender his group certificates. This was not accepted, however, and I will make the order that I had earlier foreshadowed.
Whilst being cross-examined by Senior Counsel for the wife, the husband deposed that he would retire within two to three years of the normal retirement age but not past his 67th birthday. I accept this evidence.
As to the parties’ income, I consider that the husband’s significantly greater income (over that projected by counsel the wife for the immediate future) is very much the product of a change of career path chosen by the wife in circumstances where she had previously shown herself to be capable of earning a comparable amount to that now owned by the husband. I accept that the husband will not continue in employment for many years, and that the wife, being nearly 10 years younger, will continue earning for a much longer period.
The husband’s case is that he should obtain an adjustment pursuant to s 75(2) on account of his continuing support of the parties’ children.
The husband has the care and control of M and E, and supports them without assistance from the wife. M is a full time student. She has three years remaining before she completes her degree. E is also a full time student who will complete her Victorian Certificate of Education in 2009.
It is clear that the children have lived with the husband since he took possession of the N property on 27 October 2007. The husband gave evidence that E resides in a studio apartment at the rear of the premises, and M utilises the top floor of the residence. There was no suggestion by either party that the children’s living arrangements were likely to change in the foreseeable future.
As E has not attained the age of 18, I must take her welfare into account pursuant to s 75(2)(c). I note that she will attain 18 years in January 2009. I cannot make an adjustment under subparagraph (c) with respect to M as she is 21 years of age. I can, however, take the husband’s support of her into account pursuant to s 75(2)(o). This subsection allows me to consider any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account. The same applies to E in that she will soon turn 18, but will require ongoing support, at least until the completion of her secondary education.
The husband deposed that both of his daughters are in part time employment. He gave evidence that E had been working for 2 weeks in her first job since relocating to the N property. He said that E works eight hours a week and earns $9 an hour before tax. Accordingly she would earn $72 a week.
M on the other hand works two nights a week in a restaurant, and earns a maximum of $80 per week. He gave evidence that M had previously been employed in a chicken shop. He speculated that she earned $50 a week in that job. The children are otherwise supported by him, and are likely to be for some time.
As previously set out, the husband raised the issue of CGT during the hearing, but gave no specific evidence about its impact when he acquires sole ownership of the Group assets and subsequently sells them. Neither Mr S nor Mr CK referred to any CGT liability during their evidence. Mr Crofts did not dispute this basic assertion, but pointed to the lack of evidence of when assets might be sold, and how much CGT would be incurred.His final submission on this point was that “[there] is no evidence as to CGT, therefore your Honour is not in a position to deal with CGT save in the most general terms of a 75(2) adjustment.”
Conclusion on section 75(2)
I consider that the disparity in earnings does not justify an adjustment in the wife’s favour especially where the husband will retire in a few years, and although he will have greater superannuation benefits available to him than the wife has at present, she will have a significant number of years to accumulate greater entitlements.
I consider that an adjustment of 2.5% in favour of the husband is justified by his ongoing provision of support for the adult children. I note that this represents $129,421 of the pool as identified and valued by me at paragraph 304 of this judgment. The husband estimated that a further 4-6% of the pool might be justified as payment to him on account CGT that he will incur when he sells the group’s assets. I consider that he is likely to sell the assets as his retirement approaches and may well have to sell something in the short term to meet his need for capital in June 2009. In the absence of evidence that enables me to be more precise, I will allow a further 2.5% of the pool on account of this prospective liability, which again represents $129,421of the pool.
CONCLUSION
I have assessed the husband’s share of the marital property at 57.5% having regard to his pre-marriage contributions, and added a total of 5% on account of s 75(2) factors. That produces an overall apportionment of 62.5% to the husband, and 37.5% to the wife. This leaves me to consider the structure of the apportionment of the assets that will produce an outcome that is just and equitable in all the circumstances.
It is evident from the asset table that this apportionment will not enable the wife to keep K property, representing as it does, about half of the asset pool, and I am satisfied that a just and equitable asset distribution requires that the husband receive some of the equity in the property. The question then becomes how to divide the proceeds of sale of that property in a way that gives both parties some security for the future.
I consider that the wife should have sufficient of the proceeds to purchase accommodation of the same value as the husband’s. Quite apart from considerations of equality of housing for the future, however, the wife’s lower income and lack of substantial superannuation create a need for her to have funds in addition to the cost of reasonable accommodation either to produce income, or to provide security for future income, and something of a hedge against the exigencies of life.
Whilst the husband seeks the maximum amount of cash that his entitlement would attract, I am mindful that he is receiving the group assets, and I consider that he is likely to try and realise some of these in the relatively near future. There was some discussion, towards the end of the hearing, of the wife receiving some or all of the CSF as part of her settlement, but this was merely an option that was discussed in a general way.
Having determined that the K property must be sold, I will restate the asset table with costs of sale deducted from its value, and also the wife’s costs of acquisition of a comparable property to that of the husband. He conceded that this was appropriate given that part of the funds made available to him were applied in payment of the costs of acquisition of the N property. An aide memoire produced by the wife set out the costs of sale for the K property which totalled $63,775. The husband did not dispute this figure. A breakdown of these costs included:
· Selling agents commission @ 1.25% plus GST: $33,750
· GST on selling agent commission: $3,375
· Advertising schedule: $25,000
· Conveyancing: $950 – $1,350 with an mid point of $1,200
· Conveyancing disbursements: $300
· Conveyancing GST: $150
During final addresses the husband provided a total sum of $140,000 as the costs of sale and acquisition. I will deduct this figure from the pool of assets. Based of his total figure and the fixed costs of sale, which I have accepted at $63,775, I have allowed $76,225 for the acquisition costs. The wife had higher acquisition costs in the estimates prepared on her behalf, but these were based on the purchase of a property at a price of about $1,500,000.
The breakdown of the pool is as follows:
Agreed gross assets (excluding the Clarkson Family Group and the parties’ superannuation): $4,169,931
· K property: $2,700,000
· N property: $1,200,000
· Audi car: $10,000
· Wife’s shares: $8,462
· Wife’s bank accounts - Westpac: $617
· Wife’s bank account - ING: $10,949
· Husband’s loan accounts due from L Pty Ltd: $114,785
· Husband’s bank accounts - NAB: $4,654
· Total of add-backs pursuant to Justice Young’s orders of 31 July 2007: $120,464
Agreed superannuation: $404,097
· Husband’s Macquarie Bank: $81,325
· Wife’s Victorian Independent Schools: $9,300
· Wife’s HP Fund: $3,803
· Wife’s HA Fund: $1,394
· Wife’s Supertrace: $5,552
· Clarkson Family SMSF (including the CN Joint Venture): $302,723
Liabilities: $1,161,923
· Mortgage on the N property: $1,150,000
· Husband’s loan due to J Pty Ltd as trustee of the Y Unit Trust: $11,923
Net assets (excluding the group): $3,412,105
Clarkson Family Group: $1,904,750
Total net assets: $5,316,855
Costs of sale and acquisition: $140,000
· Sale: $63,775
· Acquisition: $76,225
Adjusted pool (less sale and acquisition costs): $5,176,855
Accordingly, the husband’s share of the pool calculated at 62.5% is $3,235,534, and the remainder of $1,941,321 is to be apportioned to the wife.
The parties are to retain the assets in their name. They have agreed that the that the Audi car will be transferred to the wife, therefore I have considered that asset to be the wife’s in calculating the sum that each party should receive from the proceeds of sale of the K property.
I have considered giving the wife some or all of the CSF but since the division that would be effected if the husband retains all of this asset means that he will receive $728,988 from the proceeds of sale of the K property and the wife $1,831,012, I am satisfied that this course reflects a just and equitable division of the property, in that it provides the wife with the capacity to acquire unencumbered housing comparable to that of the husband’s and to have a significant additional lump sum, thereby generating an income to supplement her earnings from personal exertion. The husband will have more than $729,000 of his liability to VIPT but will have to make some further arrangements by selling assets in conjunction with Mr SE or by borrowing to pay the balance of approximately $400,000. He has the income to service borrowing if this becomes necessary.
Accordingly the wife shall receive total cash of $1,907,237. This sum includes $1,831,012 from the proceeds of sale of the K property and $76,225 representing her costs of acquisition of property of a comparable value.
I certify that the preceding three hundred and eight (308) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watt
Associate:
Date: 12 November 2008
ANNEXURE “A”
THE RELEVANT ENTITIES
AV Management Pty Ltd
Date of incorporation: N/A
ACN: …
Place of incorporation: Australia
Shareholders: 1,451 shares issued: 100 held by X Ltd and 800 held by V Investment Property Trust
Directors:N/A
Secretary: N/A
Assets:145,800 units in TA Project Trust (Stage 2)
X Ltd
Date of incorporation: December 1994
ABN: …
Place of incorporation: Australia
Shareholders: 71,710 ordinary shares issued: 35,855 held by J Pty Ltd and 35,855 held by Mr SE
Directors:Mr MC, the husband and Mr SE
Secretaries: The husband and Mr GW
Assets:100 shares in AV Management Pty Ltd
20% interest in CG Property Trust
Wholly owned subsidiary: TA Properties Pty Ltd
Name changes: Originally incorporated as MM Ltd
… Ltd on …July 1995
… Ltd on … August 1995
X Ltd on …April 1996
CN Pty Ltd
Date of incorporation: N/A
ABN:N/A
Place of incorporation: Australia
Shareholders: 200 shares issued: 29 held by L Pty Ltd as trustee for the Clarkson Superannuation Fund
Directors:N/A
Secretaries: N/A
HE Ltd
Date of incorporation: N/A
ACN: …
Place of incorporation: Australia
Shareholders: 171,400 ordinary shares issued: 12,200 held by V Investment Property Trust
Directors:…, …, Mr MC and Mr SE
Secretary: Mr SE
J Pty Ltd
Date of incorporation: N/A
ABN: N/A
Place of incorporation: Australia
Shareholders: 1000 shares issued: 10 held by L Pty Ltd and 990 held by the wife
Directors:N/A
Secretaries: N/A
Assets:31,855 ordinary shares in X Ltd
$122,578 due from L Pty Ltd
J Pty Ltd as trustee for the Y Unit Trust
Date of incorporation: N/A
ABN: N/A
Place of incorporation: Australia
Shareholders: 1000 shares issued: 10 held by L Pty Ltd and 990 held by the wife
Directors:N/A
Secretaries: N/A
Assets:2 shares in V Management Pty Ltd
$11,923 owed by the husband
L Pty Ltd as trustee for Clarkson Superannuation Fund
Date of incorporation: N/A
ABN: …
Place of incorporation: Australia
Shareholders: 2 ordinary shares issued: 1 held by the wife and 1 held by the husband
Directors:N/A
Secretaries: N/A
Assets: 29 shares in CN Pty Ltd
16.3636% interest in CN Joint Venture
L Pty Ltd
Date of incorporation: N/A
ABN: …
Place of incorporation: Australia
Shareholders: 2 ordinary shares issued: 1 held by the wife and 1 held by the husband
Directors:N/A
Secretaries: N/A
Assets: 10 shares in J Pty Ltd
Liabilities: $114,785 due to the husband
$122,578 due to J Pty Ltd
SE Co Pty Ltd
Date of incorporation: N/A
ABN: N/A
Place of incorporation: Australia
Shareholders: N/A
Directors:N/A
Secretaries: N/A
Assets: 2 shares in V Management Pty Ltd
1 share in V Properties Pty Ltd
TA Properties Pty Ltd
Date of incorporation: N/A
ACN: …
Place of incorporation: Australia
Shareholder: Parent Company: X Ltd
Directors:The husband and Mr SE
Secretary: Mr SE
Assets:$320,995 receivable from V Investments Property Trust
TA Ltd as trustee for TA Project (Stage 1)
Date of incorporation: N/A
ABN: …
Place of incorporation: Australia
Shareholders: 3,606,288 shares issued, 69,352 held by V Investment Property Trust
Directors:The husband, Mr SE, …, … and …
Secretary: Mr SE
V Management Pty Ltd
Date of incorporation: N/A
ACN: N/A
Place of incorporation: Australia
Shareholders: 4 shares issued: 2 held by SE Co Pty Ltd and 2 held by J Pty Ltd
Directors:N/A
Secretary: N/A
Assets:$497,100 receivable from V Investments Property Trust
V Properties as trustee for V Investment Property Trust (“VIPT”)
Date of Establishment: N/A
Place of Settlement: Australia
Trustee: V Properties Pty Ltd
Unit holders: N/A
Assets:800 shares in AV Management Pty Ltd
69,352 shares in TA Ltd
15 units in TA Project (Stage 1)
12,200 shares in HE Ltd
145,800 units in TA Property Trust (Stage 2)
Liabilities: $1,070,253 to SE Co Pty Ltd
$997,992 to J Pty Ltd
V Properties Pty Ltd
Date of incorporation: N/A
ACN: N/A
Place of incorporation: Australia
Shareholders: 2 shares issued: 1 held by SE Co Pty Ltd and 1 held by J Pty Ltd as trustee of the Y Unit Trust
Directors:N/A
Secretary: N/A
Assets:14,800 interest in SM Property Trust
THE RELEVANT TRUSTS
Clarkson Family Superannuation Fund
Date of Establishment: June 1997
Tax file number: …
Place of Settlement: Australia
Trustee: L Pty Ltd
Members:The husband and the wife
Assets:29 shares in CN Pty Ltd
16.3636% interest in CN Joint Venture
CN Joint Venture
Date of Establishment: N/A
Place of Settlement: Australia
Trustee: CN Pty Ltd
Unit holders: 16.3636% held by L Pty Ltd as trustee for Clarkson Superannuation Fund
Y Unit Trust (“VIPT”)
Date of Establishment: N/A
Place of Settlement: Australia
Trustee: J Pty Ltd
Unit holders: L Pty Ltd and the husband
Assets:1 share in V Properties Pty Ltd
SM Property Trust
Date of Establishment: N/A
ARSN: …
Place of Settlement: Australia
Trustee: X Ltd
Unit holders: 1,790,800 units issued: 14,800 held by V Properties Pty Ltd as trustee for V Investment Property Trust
242 grower units issued: 2 held by V Properties Pty Ltd as trustee for V Investment Property Trust
TA Property Trust (Stage 1)
Date of Establishment: N/A
Place of Settlement: Australia
Trustee: TA Ltd
Unit holders: 780 units issued: 15 held by V Properties Pty Ltd as trustee for V Investment Property Trust
TA Property Trust Stage 2
Date of Establishment: N/A
Place of Settlement: Australia
Trustee: X Pty Ltd
Unit holders: 1,845,000 units issued: 461,700 held by V Investment Property Trust and 145,800 held by AV Management Pty Ltd
230 grower units issued: 57 held by X Ltd
Key Legal Topics
Areas of Law
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Family Law
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Property Law
Legal Concepts
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Costs
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Remedies
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