Cull & Lenz (No 3)
[2022] FedCFamC1F 105
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Cull & Lenz (No 3) [2022] FedCFamC1F 105
File number(s): SYC 6598 of 2017 Judgment of: REES J Date of judgment: 3 March 2022 Catchwords: FAMILY LAW – PROPERTY SETTLEMENT – Marriage of 14 years – Where the wife made greater contributions between cohabitation and separation – Contributions assessed at 52.5 per cent in her favour – Where the income and financial resources of the husband are disparate from the wife – Small adjustment to the wife – Just and equitable distribution of 60 per cent ordered in the wife’s favour.
FAMILY LAW – PROPERTY – Where the wife sold the Suburb FF property in breach of court orders – Where the purchase was at arm’s length – Appointment of the trustee for sale was necessitated by the wife’s failure to complete settlement – Where the purchaser was joined to the proceedings – Orders for the purchaser and trustee for sale’s costs to be paid from the sale proceeds.
FAMILY LAW – THIRD PARTY CREDITORS – Where the fourth, fifth, and seventh respondents seek payment by the wife of their professional fees – Loans claiming to be owed to the second respondent by the wife – Where the amount payable to the wife from the property settlement is less than the claims of her creditors – Orders for the wife’s property settlement funds to be held in controlled monies account for six months.
FAMILY LAW – PARENTING – 10 year old child with behavioural and learning difficulties – Where the child has lived with the wife and spent five nights per fortnight with the husband over four years – Where a change to the parenting arrangement may jeopardise the child’s progress – Concerns relating to non-integration of the child into the husband’s new family – Orders dismissing the husband’s application to vary the current parenting arrangement.
Legislation: Family Law Act 1975 (Cth) ss 75(2), 79 Division: Division 1 First Instance Number of paragraphs: 292 Date of last submission/s: 3 March 2022 Date of hearing: 9-15 February 2022 Place: Sydney Applicant: Litigant in person Counsel for the First Respondent: Mr Ford Solicitor for the First Respondent: Nolan Lawyers Second Respondent: Litigant in person Third Respondent: Excused Solicitor for the Fourth, Fifth and Seventh Respondents: Finn Roache Lawyers, Mr Ivantsoff Solicitor for the Sixth Respondent: Auyeung Hencent & Day Lawyers, Mr Zhu Counsel for the Independent Children's Lawyer: Ms Rebehy Solicitor for the Independent Children's Lawyer: Legal Aid NSW ORDERS
SYC 6598 of 2017 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS CULL
Applicant
AND: MR LENZ
First RespondentMR B CULL
Second Respondent
MS C Cull (and others named in the Schedule)
Third Respondent
LEGAL AID NSW
Independent Children's Lawyer
ORDER MADE BY:
REES J
DATE OF ORDER:
3 MARCH 2022
THE COURT ORDERS:
1.That the application of the husband to vary the orders relating to the parenting of the child X born in 2011 is dismissed.
2.That unless otherwise agreed, X spend time with the mother and father as follows:
(a)On the weekend of Mothers’ Day, with the mother from after school Friday until school starts on Monday.
(b)On the weekend of Father’s Day, with the father from after school Friday until school starts on Monday.
3.That the Watchlist Order, being Orders 12, 13, 14, 15 and 16 of the Orders made on 13 November 2017, be discharged
AND THE COURT REQUESTS THAT the Australian Federal Police give effect to these Orders by removing the name of the child X (male) born in 2011 form the Family Law Watchlist at all points of international arrivals and departures in Australia.
4.That the husband pay to the Legal Aid Commission of NSW the sum of $4,068.50 on account of the costs of the Independent Children’s Lawyer and that the Legal Aid Commission of NSW in addition be entitled to the sum of $1,375 held on trust for the husband.
5.That the wife pay to the Legal Aid Commission of NSW the sum of $5,443.50 on account of the costs of the Independent Children’s Lawyer.
6.That the sum of $13,189 held by Finn Roache Lawyers be paid to the husband.
7.That Mr BC, (“the trustee for sale”) cause the proceeds of sale of the property at EE Street, Suburb FF to be distributed in the following manner and priority:
(a)In payment of the amount required to discharge the mortgage.
(b)In payment of the agents’ commission and any other sums due to the selling agent.
(c)In payment of the assessed amount of capital gains tax.
(d)In payment of 40 per cent of the amount remaining to the husband.
(e)In payment of the reasonable remuneration and expenses of the trustee for sale as approved by the Court.
(f)In payment of the sum of $10,000 to JJ Pty Ltd.
(g)In payment of the sum of $65,775 to Mr Dea being the total of the sums ordered to be paid by the wife to Mr Dea by way of costs.
(h)In payment of the sum of $9,170 to the husband.
(i)The sum of $5,000 to the husband pursuant to orders made on 7 April 2021.
(j)In payment of the balance to a controlled monies account held by Nolan Lawyers on trust for the wife.
8.That, at the expiration of six months from of the date of these orders, the amount held pursuant to Order 7(j) be paid to the wife.
9.That, subject to these orders, each party be entitled to any personal property, including but not limited to superannuation, in her or his possession at the date of these orders.
10.That pursuant to Sections 65DA(2) and 62B of the Family Law Act 1975 (Cth) the particulars of the obligations these Orders create and the particulars of the consequences that may follow if a person contravenes these Orders and details of who can assist parties adjust to and comply with an order are set out in the Fact Sheet attached hereto and those particulars are included in these Orders.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Cull & Lenz has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
REES J:
Mr Lenz (“the husband”) and Ms Cull (“the wife”) married in 2003 and separated in September 2017. When they commenced to live together is disputed.
They have a son X who was born in 2011. X, who is now 10 years old, lives with the wife and both parents seek orders for his residence.
The proceedings before me relate to both parenting and to property.
The parties to the proceedings, in addition to the wife and the husband are:
·Mr B Cull (“the second respondent”) is the wife’s father. The second respondent asserts that the wife owes him some $1,236,234.
·Ms C Cull (“the third respondent”) is the wife’s mother who, until the commencement of the trial, asserted that the wife owed her $140,000. The third respondent is unwell and the second respondent and the wife have been appointed her enduring guardians. In these proceedings, the third respondent has not appeared and I have permitted her case to be run by the second respondent as her joint guardian. At the commencement of the trial, the second respondent told the Court that all sums owed to the third respondent had been repaid.
·M.C.A. Lai & Co Pty Limited (“the fourth respondent”) are solicitors who formerly acted for the wife. The solicitors claim unpaid fees of $40,768.92 and costs of $16,225 which they ask to be paid from any funds awarded to the wife in these proceedings.
·Sydney Cove Services Pty Limited, trading as Finn Roache Lawyers (“the fifth respondent”) are solicitors who formerly acted for the wife. The solicitors claim unpaid fees of $129,001.51 and costs of $21,177.75 which they ask to be paid from any funds awarded to the wife in these proceedings.
·Mr Dea (“the purchaser”) who bought the Suburb FF property from the wife is the sixth respondent. The purchaser took no active role in the hearing except to ask that the money ordered to be paid to him by the wife, by way of quantified costs orders, be paid at settlement of the conveyance from the wife’s share of the proceeds of sale.
·Mr AB who is a director of the trustee of the unit trust which operates the law firm Finn Roache Lawyers, is the seventh respondent.
·An Independent Children’s Lawyer (“ICL”) had been appointed to represent X’s best interests.
THE WIFE’S ADJOURNMENT APPLICATION
The matter was listed before me for five days commencing on 9 February 2022. At the commencement of the hearing, the wife sought an adjournment, her application and supporting affidavit having been filed on 7 February 2022.
The application was refused and I indicated that reasons would be provided. These are the reasons.
The proceedings between the husband and the wife were commenced in October 2017 by the filing of the wife’s application seeking parenting orders. In November 2017, the wife filed an amended application wherein she sought parenting and property orders.
Since 2017, there have been 12 judgments published in the proceedings, nine of them in relation to applications before me.
On 11 November 2020, orders were made for the preparation of the matter for trial. Those orders provided for each of the husband and the wife to file trial affidavits by 9 April 2021, noting that each would be permitted to rely on one affidavit only. The matter was listed for callover to allocate trial dates on 16 April 2021.
On that date, the matter was listed for hearing commencing on 12 July 2021. By this time, there were three additional third party respondents. Those respondents were creditors of the wife and the purchaser of the former matrimonial home at Suburb FF. One of those creditors is the wife’s father, the second respondent. The trustee for sale of the Suburb FF property appeared but was not joined as a party.
The hearing set to commence on 12 July 2021 had to be vacated because of the COVID-19 pandemic. It was not possible to conduct face to face hearings at that time and it was agreed to be impossible to conduct the hearing electronically.
Ultimately, on 16 November 2021, I listed the matter for hearing commencing on 9 February 2022.
The wife’s application to adjourn the proceedings was opposed by the husband and by the two unrelated creditors. Those creditors are solicitors to whom the wife owes unpaid costs.
In support of her application to adjourn the hearing, the wife relied on the following matters:
·She was hospitalised overnight on 25 November 2021.
·Her mother was hospitalised in late 2021 and requires care.
·The parties’ child was on school holidays.
·The wife has income from casual work.
·The amount of child support paid by the husband is inadequate.
·The wife asserts that the husband has not made proper financial disclosure.
This matter should have been ready for hearing on 12 July 2021. It would have proceeded on that date but for the pandemic.
None of the matters upon which the wife relied was capable of justifying another adjournment.
The wife’s convenience must be balanced against the interests of the husband, of the unrelated third parties and of the administration of justice in allocating five days of the Court’s time. There was no possibility of another matter’s being called on to fill those hearing days which would be thrown away if the matter were adjourned. Further, having regard to the history of the matter, it was highly likely that, if the matter were adjourned, further interim applications would be filed and further court time would be taken up in dealing with those applications. The interests of justice required that this matter be heard and determined.
Thus the application for adjournment was refused.
In these reasons, I propose to deal firstly with the financial aspects of the proceedings and then with the parenting dispute.
FINANCIAL PROCEEDINGS - HISTORY
Because the wife did not file a consolidated trial affidavit, but sought to rely on a number of affidavits which were sworn in relation to interim applications, it has been difficult to compile a history of the parties’ financial dealings which illustrates the factual disputes. The wife prepared a Case Outline document in which she sought to rely on 11 affidavits and a
Financial Statement sworn on 8 July 2021. In a document sent to the Court shortly before the hearing, the wife indicated that she proposed to rely on 42 documents “plus all affidavits, application lodged by myself and any of my previous lawyers”. There is no affidavit by the wife which sets out her evidence of the financial circumstances of their relationship.
She was permitted to rely on the affidavits and the Financial Statement specified in the
Case Outline document which have been read subject to admissibility.
In fact, there appears to be little if anything upon which the husband and the wife agree, beginning with the date upon which they commenced their cohabitation. The wife asserts that they commenced living together in 1998 (according to her affidavit sworn on 6 October 2017). The husband asserts they commenced their cohabitation in January 2001.
In 1987, when the husband was 16 years old, the husband’s parents incorporated
Lenz Investments Pty Ltd which is the trustee of the Lenz Family Trust. The Lenz Family Trust is a discretionary trust. The husband’s parents are the shareholders of the company. The husband’s father is the appointee of the trust who effectively controls the trust because he can remove and appoint the trustee. The beneficiaries are, relevantly, the husband’s father, his spouse, his children, their spouses and their children.
Relevantly to these proceedings, Lenz Investments Pty Ltd is a property developer and the husband has been involved, in his capacity as an unpaid consultant, as a paid consultant and as a director, in two projects combining retail and residential development, the Property G project which has been completed and the HK project which has not.
The husband, in May 1995, purchased a property at Suburb HL for $398,000 of which all but $80,000 was borrowed by way of mortgage.
In August 1998, the husband and his parents each purchased a one third interest as tenants in common in a property at Suburb HM. The purchase price was $1,330,000. The husband’s parents paid the deposit and the balance was funded by way of mortgage. The evidence does not establish that the husband made any contributions towards mortgage payments or other outgoings. The husband’s evidence was that his only contribution to the purchase of the Suburb HM property was that, because he was a party to the mortgage with his parents, the period of the mortgage was greater than would have been offered by the bank if his parents alone were the borrowers.
The Suburb HM property was sold in February 2001 for $1,860,000 and the husband’s parents retained the proceeds.
If the husband and the wife commenced cohabitation as the husband asserts in January 2001, then the husband owned the Suburb HL property. The wife does not assert that she owned any property. They were both employed in the finance industry.
In May 2001, the husband’s parents paid the husband $150,000 and assumed responsibility for the Suburb HL property. They paid the mortgage but the legal title was not transferred to them. The husband’s parents sold the property in July 2009 and received the entire benefit of the proceeds.
In 2002, the husband and the wife moved to Japan in order for the husband to take a transfer offered by his employer. The husband’s parents gave the husband $150,000. The wife set up a business in Japan..
In 2005, they purchased a property in Japan (“the Japan property”), borrowing the entire purchase price. The property was rented and the rent covered the outgoings and provided an income.
In November 2005, they purchased EE Street, Suburb FF for $1,920,000. They contributed $426,000 from savings. The husband’s parents lent them $150,000 which they subsequently repaid. The balance was jointly borrowed and secured by mortgage. The wife was the registered proprietor. The husband was a co-mortgagor.
In February 2006, the second respondent transferred the sum of $60,000 to the wife. This was the first of a series of transfers between the second respondent and the wife which ultimately resulted in the second respondent claiming to be owed $1,236,234. Those claims will be examined in detail later in these reasons.
In 2007, the husband and wife purchased a property in the United Kingdom (“the United Kingdom property”) for £275,000. The deposit was paid from money earned by the wife and the balance was jointly borrowed and secured by mortgage. The property was tenanted and the rent covered the outgoings. The wife was the registered proprietor. The husband was a co-mortgagor.
In 2008, the husband and wife relocated to China.
In 2009, they purchased a property in HN Street, China (“HN Street”) for HKD8,200,000 using HKD723,000 from savings and the balance jointly borrowed and secured by mortgage. The wife was the registered proprietor. The husband was a co-mortgagor.
In 2011, the husband’s employment in China was terminated and he received a retrenchment package.
After the husband’s employment ceased, he started working for Lenz Investments Pty Ltd but he did not receive remuneration until 2015. In the proceedings between the wife and Lenz Investments Pty Ltd, it was the wife’s evidence that from time to time the husband told her that he and she would benefit from the profits of the development that was being undertaken by Lenz Investments Pty Ltd.
In October 2011, they purchased a property in Suburb HP, Suburb HQ (Suburb HP) for $620,000. The husband was not earning an income. The wife paid the deposit from her sales commissions and the balance was jointly borrowed. The property was tenanted and the rent covered outgoings. The husband was a co-mortgagor.
X was born in 2011.
The husband and wife sold HN Street for a net amount of HKD12,800,000 in April 2012 and applied half of the net proceeds to living expenses and part of the remaining other half, HKD1,350,000, to the purchase of a property at HR Street (“the HR Street property”) for HKD2,700,000. The wife was the registered proprietor. The balance was jointly borrowed and secured by mortgage. The husband was a co-mortgagor.
In January 2014, the HR Street property was sold for HKD3,550,000 and the net proceeds of about HKD2,200,000 were applied to purchase a property at GH Street (“the GH Street property”). The balance was jointly borrowed and secured by mortgage. The wife was the sole proprietor.
In March 2014, the property at Suburb HP was sold for $968,000. The husband asserts that the net proceeds of the sale were $388,262. There is a dispute about the amount received and how those proceeds were applied. The wife’s evidence is that she received the funds and they were used to pay land tax and living expenses.
In June 2014, the second respondent purchased a property in HS Street, China (“the HS Street property”) for HKD2,820,000. The husband asserts that the wife was a joint purchaser and that she used the proceeds of the sale of Suburb HP to fund her share of the purchase. The husband has provided documentary evidence that the second respondent borrowed HKD1,974,000.
The husband was appointed a director of Lenz Investments Pty Ltd on 15 April 2015, both of his parents remaining as directors and in May 2015 three further directors were appointed. The husband began to receive consultant’s fees from Lenz Investments Pty Ltd of $10,000 per month.
From time to time the husband and his parents signed personal guarantees for loans borrowed by Lenz Investments Pty Ltd to finance the Property G development.
The Property G development was completed in April 2017. Most of the units have now been sold.
When the husband and the wife separated in September 2017, they owned, subject to mortgage, properties in Suburb FF, Japan, United Kingdom and GH Street. The husband asserts, and the wife denies, that he had $500,000 in managed funds.
On 13 December 2017, the wife, without notice to the husband, borrowed HKD2,000,000 from QQ Limited secured against the GH Street property. The interest rate was 23.4 per cent.
In January 2018, the wife, without notice to the husband, sold the GH Street property. She deposed, in an affidavit sworn by her on 8 February 2018, that she had invested the money which she borrowed from QQ Limited in an investment scheme with a casino and had lost the entire amount. The settlement statement for the sale of the property, dated 31 January 2018, is annexed to the husband’s affidavit. The document shows that the property was sold for HKD4,480,000 and the proceeds, after minor disbursements, were paid as follows:
Bank of China (China Limited) (mortgagee) HKD1,094,901
QQ Limited HKD2,010,000
[Second Respondent] HKD1,213,409
On 9 February 2018, the wife filed an application to join Lenz Investments Pty Ltd as a party to the proceedings.
On 12 February 2018, orders were made by consent in the following terms:
Exhibit A
…
3.That each of the parties are restrained from selling dealing with, transferring, assigning or further encumbering or increasing the secured debt or their interest in:
a. Apartment KK, Suburb LL, City MM Japan;
b. Apartment PP, NN Street United Kingdom;
c. EE Street Suburb FF NSW Australia.
Other than for the purpose of receiving rental from the United Kingdom and Japanese properties and applying the rental to mortgage payments and statutory outgoings and maintenance, repairs, letting fees and management fees.
4.That the Wife apply the sale proceeds at GH Street China to:-
a.In payment of all debts secured on the property;
b.Payment of tax secured on the property which is required by law to be paid on the sale;
c.Reasonable selling costs;
d.Payment of outstanding management fees and repair.
e.The balance to a controlled moneys account in the name of the parties pending further Order or written agreement of the parties, to be opened by the solicitors for the wife.
…
On 15 March 2018, further orders were made:
Exhibit C
…
1.That the parties will do all things and sign all documents as are necessary to direct the rental income for the Japan property and the United Kingdom property to be paid directly into the parties joint HT Bank account ending #…54; and
2.That the parties will do all things and sign all documents as are necessary to cause the mortgage repayments for the Japan property, the United Kingdom property and the Suburb FF property to be debited from or paid from the joint HT Bank account ending #…54.
3.That both parties be and are hereby restrained from drawing down the HT Bank account number #…54, other than for the payment of mortgage repayments for:
1. The Japan property
2. The United Kingdom property
3. The Suburb FF property
and any statutory or utility charges, property management fees, repairs or government charges referable to the Japan and United Kingdom properties.
4.That the husband is to maintain the mortgage payments on the Suburb FF property should there be a shortfall in the #…54 account.
In January 2019, contrary to the orders made on 15 March 2018, the wife caused the rent from the United Kingdom property to be paid into her personal account. The wife has not provided any evidence of the amount which she has received. The orders of the Court required the rent to be deposited into the joint HT Bank account so that it could be applied to the mortgage. The husband continued to meet the mortgage payments from his own funds. The wife asserts, but has not proved, that she received $5,000 in rental income of which she spent either $3,000 or $9,000 to pay for the replacement of the sewage pump at Suburb FF.
In July 2019, the Japan property was sold and the proceeds equally divided between the husband and wife. Each received about $164,000.
On 10 July 2019, orders were made in relation to the rent from the United Kingdom property in the following terms:
4.I direct the wife to forthwith do all acts and things and sign all documents necessary to cause to transfer or redirect the amount received into her HU BANK China Account Number …888 from BJ Agent, the managing agent for the property situated at and known as Apartment PP, NN Street Apartment PP, NN Street United Kingdom (“United Kingdom property”) being a lump sum amount of rental income for a period of 6 months into the parties’ joint HT Bank account ending #54 and thereafter the rental income for the United Kingdom property be directed to the said HT Bank account ending #…45.
In about December 2019, the wife listed Suburb FF for sale without notice to the husband and in breach of the orders made on 12 February 2018. The events surrounding the sale of Suburb FF are fully set out in the reasons for judgment delivered on 24 November 2020 and on 26 November 2021 but it is necessary to summarise those events here.
On 5 February 2020, the wife’s application for orders to the effect that Lenz Investments Pty Ltd pay her $20,500,000 or $17,500,000 was dismissed. Both Lenz Investments Pty Ltd and the Lenz Family Trust were removed as parties to these proceedings. In the reasons for judgment, the evidence in relation to the husband’s involvement with Lenz Investments Pty Ltd is set out. The gravamen of the findings was that the husband does not control the Lenz Family Trust. He is a discretionary beneficiary and one of three directors of the trustee company. He is not a shareholder of the trustee company. The trust is controlled by the husband’s father.
On 1 May 2020, the wife was ordered to pay, from any sum due to her by way of property settlement, the costs of Lenz Investments Pty Ltd as assessed or agreed and the costs of the husband as assessed or agreed. Those costs have not yet been assessed.
In March 2020, the husband was alerted to the sale of Suburb FF when he received a letter from the mortgagee advising him that the wife was asking for a payout figure on the mortgage. The husband wrote to the mortgagee indicating that he did not consent to the sale of the property. The husband lodged a caveat over the title of Suburb FF and his solicitor wrote to the wife’s then solicitors asking for an undertaking that no sale would proceed. They received no reply. The mortgagee wrote to the wife’s solicitors confirming that the husband’s signature was required to discharge the mortgage and enclosing a copy of the orders restraining the wife from selling Suburb FF.
On 4 June 2020, despite the orders restraining her from dealing with the property, and without telling the husband, the wife entered into a contract to sell Suburb FF to the purchaser for $3,700,000. The purchase was at arm’s length. The wife knew the sale was in breach of the orders of the Court.
In June 2020, the wife, contrary to the orders made on 12 February 2018, and without telling the husband, sold the United Kingdom property and retained the proceeds. The husband found out that the property had been sold when he discovered, on 28 August 2020, that the mortgage payments had been returned to the joint HT Bank account. The husband asserts that the wife received $148,820 which, according to an affidavit sworn by her on 16 August 2020, she paid to her parents.
The wife deposed that she was aware that the orders restrained her from selling the United Kingdom property but that:
I was given an offer to buy out this United Kingdom studio unit and out of necessity I accepted an [o]ffer with a view to immediately seek Court [a]pproval if the buyer can wait. However, the buyer cannot wait for our Court [a]pproval and I took the offer out of financial hardship and necessity.
The wife deposed that the proceeds of the sale were used to pay the mortgage and outstanding managements fees and the balance of £83,340 was used in repayment of a loan from the third respondent in the sum of $64,675 including outstanding interest and to pay to the second respondent the sum of $84,149 in payment of interest “accrued on the Loan Deed dated [4 July 2016]”.
The husband asserts, and the wife denies, that the wife rented the Suburb FF property online and that she retained the rent. The husband annexed copies of correspondence with tenants of the Suburb FF property and I am satisfied that the wife let out the property and that she earned income from so doing. However, as the wife has not provided any documents in relation to the amounts she received, I am unable to make any finding of the amount. The husband continued to pay the mortgage over Suburb FF. The wife does not assert that she made any contribution to the mortgage payments.
The husband learned of the sale of Suburb FF on 14 August 2020 and on 9 September 2020 he filed an Application in a Proceeding seeking to set aside the contract with the purchaser. That application was not successful. Reasons for judgment were delivered on
24 November 2020 and orders were made which caused the wife’s creditors, who had also lodged caveats over the title of Suburb FF, to be joined as parties to the proceedings. The orders, inter alia, provided:
6.That upon the settlement of the sale of Suburb FF, the proceeds of sale be applied in the following order and priority:
(a)To discharge the mortgage;
(b)To pay the agent’s commission and costs;
(c)To pay the sum of $10,000 to JJ Pty Ltd simultaneously with the withdrawal of the caveat lodged by that entity;
(d)To pay the balance of the amount into a controlled monies account held by Nolan Lawyers on trust for the husband and the wife, pending further order.
7.That the wife pay the costs of the [the purchaser] in the sum of $30,000, such costs to be paid from any sum received by the wife by way of property settlement in the substantive proceedings.
8.That the wife pay the costs of the husband in relation to this application on an indemnity basis, as agreed or assessed, such costs to be paid from any sum received by the wife by way of property settlement in the substantive proceedings.
On 19 March 2021, on the application of the purchaser to which the husband consented, a trustee for sale was appointed to complete the sale of Suburb FF. The purchaser was ready to complete the sale. The wife was taking no steps to complete. She would not instruct the mortgagee to prepare to discharge the mortgage or co-operate with the settlement procedures. The purchaser sought orders requiring the judicial registrar to fix a time and place for the settlement; to certify the sum which, upon completion, was to be paid to the wife and to execute an authority for the mortgagor to discharge the mortgage over the property on settlement.
The wife’s position in relation to the appointment of the trustee for sale was not entirely clear and it seemed that she either wanted to resile from the contract or delay the completion. In the reasons for judgment delivered on 19 March 2021, I stated:
23A contract for the sale of Suburb FF was entered into between the wife as vendor and [the purchaser] on 4 June 2020.
24The time for completion specified in the Contract for Sale is 35 days after the date of exchange.
25[The purchaser] is ready and able to settle the purchase and has been trying to arrange settlement since 26 November 2020, but to no avail.
26On 2 December 2020, Mr Wong of Maxim Legal, then acting for the wife, wrote to the husband’s solicitor and included [the purchaser’s] solicitor in the email, stating that he was awaiting the wife’s instructions in relation to settlement.
27On 8 December 2020, the wife’s solicitor confirmed that he was still waiting for the wife’s instructions but forwarded the authority to discharge of mortgage document for execution by the husband. The document had not been signed by the wife.
28On 22 December 2020, [the purchaser’s] solicitors wrote again requesting settlement and foreshadowing an application to the Court, albeit pursuant to s106A of the Act.
29On 14 December 2020, the wife’s solicitors wrote to the husband’s solicitors to ask whether the husband had executed the authority to discharge the mortgage.
30The authority to discharge the mortgage, signed by the husband, was forwarded to the wife’s solicitors on 23 December 2020.
31On 15 January 2021, Maxim Legal notified the solicitors for [the purchaser] and the husband that they no longer acted for the wife in relation to the conveyance. They were invited to correspond directly with the wife.
32On 19 January 2021, [the purchaser’s] solicitors wrote to the wife confirming their readiness to settle.
33On 20 January 2021, a further letter was written indicating that there would be an application to the Court in relation to settlement.
34On 21 January 2021, [the purchaser’s] solicitors advised the wife that if she did not provide confirmation that she had applied for the mortgage to be discharged and provided a payout amount by 5pm on 22 January 2021, an application would be made to the Court.
35On 27 January 2021, the solicitor for the mortgagee wrote to [the purchaser’s] solicitors indicating that the mortgage required properly executed discharge authorities, payment of the debt and a discharge of the orders restraining the wife from dealing with the property.
36On 28 January 2021, [the purchaser’s] solicitor discovered that the Suburb FF property had been listed by the wife for sale online. They wrote to the selling agent advising of the exchanged contract and the interest of
[the purchaser] in the property and putting the agent on notice that no further steps should be taken in relation to the sale.
37The agent sought clarification from Ms Dang, who was understood by the agent to be acting for the wife.
38By letter dated 1 February 2021, Ms Dang confirmed that she had advised the wife that she (Ms Dang) could not proceed further with the sale of the property to another purchaser.
39Also on 1 February 2021, [the purchaser’s] solicitors wrote to Ms Dang confirming they were ready and able to settle and asking for a completion date. Ms Dang indicated that she would try to obtain instructions from “my client”.
40On 12 February 2021, [the purchaser’s] solicitors wrote again to Ms Dang seeking settlement and foreshadowing an application to the Court.
41 [The purchaser’s] Application in a Case was filed 12 March 2021.
42At the hearing of the application, the wife gave no indication that she intended to settle the sale unless she received a substantial sum of money to pay her creditors and to secure alternate accommodation.
43[The purchaser] is entitled to the performance of the contract. He has done everything in his power to settle the purchase. It is clear that the settlement will not take place unless the matter is taken out of the wife’s hands.
Relevantly, the orders made on 19 March 2021 include the following:
5.That within 14 days of the date of these Orders the Wife shall vacate the Property and shall cause any other occupant of the Property to also vacate and she shall thereafter be restrained from re-entering the Property.
6.That, in addition to the payments specified in Order 6 made on 24 November 2020, the Trustee pay, from the balance of the proceeds of sale, the Trustee’s reasonable remuneration and expenses, to be approved by order of the Court.
The wife did not vacate Suburb FF.
On 28 May 2021, orders were made requiring the wife to vacate Suburb FF by 4.00 pm on 17 June 2021 and ordering that a writ of possession lie in the registry. The wife vacated the property.
On 11 June 2021, the trustee for sale asked the wife to sign a Foreign Resident Capital Gains Withholding Clearance Certificate (“FRCGWCC”). She did not respond and the trustee, on
11 November 2021, applied to the Court for an order that he be authorised to sign the FRCGWCC on behalf of the wife. Those orders were made. The wife was ordered to pay the purchaser’s indemnity costs in the sum of $23,775 from her share of the proceeds of sale of Suburb FF.
At the commencement of the trial, the sale had not yet settled. There was no evidence of the likely amount of capital gains tax which would have to be paid from the proceeds.
There is a dispute about an amount of $13,189 which is held in the trust account of Finn Roache Lawyers pursuant to orders made on 10 July 2019 against the payment of the wife’s share of the fees of Dr HV who is the single expert in the parenting proceedings.
ISSUES TO BE DETERMINED
From the narrative above, it can be seen that the following issues of fact need to be determined, as between the husband and the wife:
·When did cohabitation commence?
·What were the assets of the husband and the wife at the beginning of their relationship?
·What funds were transferred to the wife by the second respondent and by the wife to the second respondent?
·What funds were transferred to the wife by the third respondent and by the wife to the third respondent?
·Did the wife have a beneficial or legal interest in the HS Street property?
·What funds were received by the wife from the sale of the property at Suburb HP?
·What were the assets of the parties at separation?
·What amount did the wife receive from the rental income of the United Kingdom property and how were those funds used?
·What amount was received from the sale of the United Kingdom property and how were those funds disbursed?
·What funds were received by the wife after separation from assets acquired during the marriage?
·How should the sum of $13,189 held by Finn Roache Lawyers be used?
·Has the wife made full and frank disclosure?
·As between the husband and the wife, who should bear the costs of the trustee for sale?
THE THIRD PARTY CREDITORS
The further issue to be determined is the applications of the wife’s creditors to be paid from the wife’s share of the proceeds of sale of Suburb FF.
The wife’s father, the second respondent, claims the sum of $1,236,234 which he asserts is made up of $740,000 which was lent by him to the wife and interest accrued.
The wife’s mother, the third respondent has been repaid the sum of $140,000 which she asserts was lent by her to the wife.
It is relevant that some of the money asserted to have been lent to the wife by her parents was for the payment of legal fees. The second respondent advanced $90,000 for legal fees which sum would not be taken into account for the purpose of establishing the assets and liabilities of the parties in these proceedings. The third respondent advanced $40,000, part of which was for legal fees, which similarly would not be taken into account for the purpose of establishing the assets and liabilities of the parties in these proceedings. The wife repaid the sum of $40,000 to the third respondent and that sum must be taken into account as having been received by the wife and spent partly on legal fees.
M.C.A. Lai & Co Pty Limited, the fourth respondent, claim $40,768.92 for legal services on behalf of the wife and costs fixed in the sum of $16,225.
Sydney Cove Services Pty Limited, trading as Finn Roache Lawyers, the fifth respondent, and Mr AB as the seventh respondent, claim $129,001.51 for legal services on behalf of the wife and costs fixed in the sum of $27,612.75.
In addition, there are a number of outstanding costs orders which have been made against the wife in relation to various applications. Those orders are:
1 May 2020Order that the wife pay the costs of Lenz Investments Pty Ltd as assessed or agreed.
1 May 2020Order that the wife pay the husband’s costs as assessed or agreed (estimated $69,235.21).
24 November 2020 Order that the wife pay the costs of the purchaser in the sum of $30,000.
24 November 2020 Order that the wife pay the husband’s costs as agreed or assessed.
7 April 2021 Order that the wife pay the costs of the purchaser in the sum of $12,000.
26 November 2021 Order that the wife pay the husband’s costs in the sum of $2,000.
29 November 2021 Order that the wife pay the costs of the purchaser in the sum of $23,775.
The quantified costs orders total more than $130,000. In addition, there are a number of unquantified costs orders in favour of the husband and Lenz Investments Pty Ltd and the third party creditors also seek their costs of these proceedings.
The total of the claims against the wife by known creditors or payable by her pursuant to costs orders is not less than $1,500,000 and could be considerably more.
At the commencement of the hearing, I proposed to the second, third, fourth, fifth and seventh respondents that, since it appeared that the amount which would be payable to the wife pursuant to the orders for property settlement would be less than the claims of her creditors, the appropriate course of action would be to order that any sum payable to the wife be held in a controlled monies account to allow one or all of the creditors to file a creditor’s petition and to allow a trustee in bankruptcy to determine the distribution of the fund.
The fourth, fifth and seventh respondents agreed that was the appropriate course. In so far as I understood the position of the second respondent he did not oppose the proposal.
THE TRIAL
The parties were given the option of appearing in person if they could demonstrate that they were fully vaccinated, or appearing by Microsoft Teams. The husband and his legal representatives appeared in person as did the ICL and counsel for the ICL.
The wife declined the offer to appear by video link and chose to appear by telephone, as did the second respondent.
In summary, the wife sought orders in the following terms:
(1)Immediate payment to her of $140,000 from the proceeds of sale of Suburb FF.
(2)Payment of $590,000 from the proceeds of sale of Suburb FF.
(3)Payment of $740,000 to her father, the second respondent.
(4)Payment to her by the husband of $7,310,511 which is aggregation of various amounts the wife claims to be owed as follows:
(4.1)The value equivalent of the husband’s salary paid by the Lenz Family Trust at the rate of $300,000 per annum for the period January 2011 to April 2015 amounting to $1,300,000.
(4.2)Unpaid salary owed to the wife from the assets of the Lenz Family Trust at the rate of $13,559 per month for the period 1 September 2011 to August 2017 totalling $976,271.
(4.3)Sales commission invoiced to the Lenz Family Trust on 15 September 2017 in the sum of $1,100,624.
(4.4) The husband’s share of value of three properties disposed of by him during the marriage in the sum of $2,632,667.
(4.5)Rent collected by the husband on the Suburb FF property since October 2005 in the sum of $561,600.
(4.6)Rent collected by the husband from the Japan property between 2003 and 2018 totalling $642,857.
(4.7)Rates and renovation costs paid by the wife in relation to the Suburb FF property in the sum of $93,860.
In total, the wife sought $8,780,511.
In her submissions, the wife’s position varied slightly. She asserted that the net asset pool was $5,070,150, including a notional amount of salary claimed to be due from Lenz Investments Pty Ltd to the husband of $1,912,737. The wife claimed 80 per cent of that pool.
The husband sought:
(1)That the second respondent pay to him the sum of $198,635 together with interest on that amount according to the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) from 31 January 2018.
(2)That the purported loan agreements between the wife as borrower and the second and third respondents as lenders be set aside.
(3)Payment by the wife to him of $1,958,000 to include the net proceeds of sale of the Suburb FF property less the amount ordered to be paid on settlement.
(4)Return to him by the wife of items of jewellery.
(5)That he retain his chattels including shares, bank accounts, furniture, vehicles and superannuation.
(6)That the funds in the Finn Roache Lawyers trust account be paid to him.
(7)That the wife retain her chattels including shares, bank accounts, furniture and jewellery, interest in HW Pty Limited.
(8)Costs.
The husband’s position was also modified in submissions to seek 75 per cent of the net pool.
THE ISSUES TO BE DETERMINED
When did cohabitation commence?
The husband, in his trial affidavit, deposed to cohabitation having commenced in about
January 2001. He did not resile from that evidence in cross-examination.
Although the wife, in her chronologies, asserted that the cohabitation commenced at some earlier time, I am unable to find, in the affidavits upon which she relied, any evidence relating to the commencement of cohabitation.
Accordingly, I find that the husband and the wife commenced their cohabitation in
January 2001.
What were the assets of the husband and the wife at the beginning of their relationship?
The wife does not assert that she had any significant assets in January 2001.
The husband had equity in the unit at Suburb HL. Shortly after the commencement of cohabitation, the husband realised $150,000 from the transfer of his interest in Suburb HL to his parents.
What funds were transferred to the wife by the second respondent and by the wife to the second respondent?
The second respondent and the wife assert that the wife is indebted to the second respondent in the amount of $1,236,234 comprising of a principal amount of $740,000 together with interest.
Although I am not required to determine whether any money is owed by the wife to the
second respondent as that issue will be determined elsewhere, it is necessary to determine what amounts, if any, were advanced by the second respondent to the wife since any such funds might be taken into account as contributions made by the second respondent on behalf of the wife.
The second respondent swore an affidavit and provided a schedule of the funds which he asserted were transferred from his funds to the wife. He deposed:
For the period 2006 to 2014 I progressively lent $740,000 to [the wife] and I lent her a further sum of $90,000 in October 2017 to pay her legal fees as soon as she returned to Sydney. These loans were commercial and not gifts made by me…
In these proceedings, the loan asserted to have been advanced by the second respondent to the wife for payment of her legal fees in the sum of $90,000 would be disregarded in the same manner as the loan advanced to the husband for his legal fees will be disregarded.
There is no other evidence in the affidavits relied upon by the wife or the second respondent about the terms of the asserted loans, or of any conversations or correspondence between them, at the time of each advance, about the terms of the advance. Specifically, there is no evidence that it was a term of their agreement, at the time the funds were advanced, that the wife would pay interest.
In relation to the asserted loan of $740,000, there was no loan documentation at the time of any of the advances.
On 4 July 2016, some 10 years after the initial advance, the wife and the second respondent executed a document entitled “Loan Agreement” which provided:
The Borrower [wife] agrees to borrow from the Lender [second respondent] on this date 4 July 2016 the existing debt of China currency 3,907,672.00…
and:
The Borrower [wife] agrees to pay interest at five (5) per cent per annum, COMPOUNDED ANNUALLY with a repayment term being five years from the date of this Deed principal plus interest and any reasonable legal costs associated with this Loan Deed.
On 20 December 2016, the wife and the second respondent entered into another agreement entitled “Addendum to Loan Agreement Dated 4 July 2016”. The Addendum purported to give the second respondent security over Suburb FF.
There is no evidence that the second respondent made any demand for repayment until after the husband and the wife separated and these proceedings had commenced.
The second respondent provided a table of the asserted advances both in Australian dollars and in the currency of the actual advance together with copies of the relevant remittance advices. Those asserted remittances total $530,444.69. The amount of $740,000 is achieved by adding capitalised interest.
The asserted advances, taken from the table provided by the second respondent, are set out below, using the Australian dollar values asserted by him:
20 February 2006 $60,000
2 March 2006 $66,486.56
12 July 2011 $5,000
28 November 2013 $4,500
18 December 2013 $6,196.13
7 May 2014 $80,826
7 May 2014 $307,436
There is no dispute that the sums in the first five advances were transferred from the account of the second respondent to the account of the wife.
However, the husband disputes the claim asserted of transfers to the wife on 7 May 2014.
In relation to the asserted transfers on 7 May 2014, the second respondent and the wife rely on two remittance applications which are annexed to the affidavit of the second respondent sworn on 10 August 2020.
The first remittance advice for an amount of $80,826, shows the “payee” (the person receiving the funds) to be the second respondent. However, the “remitter” (the person sending the funds), is also the second respondent. This document evidences a transfer of funds between accounts of the second respondent. It does not evidence transmission of funds to the wife.
Similarly, the second remittance advice for an amount of $307,436.24 is a transfer of funds between accounts of the second respondent and does not evidence transmission of funds to the wife.
The account in the name of the second respondent in China had a number ending #…31.
Both the timing of those remittances and the amounts suggest that the funds which were being transferred from the second respondent’s account in Australia to his account in China, were the proceeds of sale of a property owned by the wife in Suburb HP in Sydney.
Documents annexed to the husband’s affidavit demonstrate that Suburb HP property was sold by the wife for $968,000 and that settlement of that sale took place on 6 May 2014. The amount required to discharge the mortgage was $562,179.10.
The wife agreed in cross-examination that she received the whole of the net proceeds of sale but, despite having been requested to do so on a number of occasions, she has not provided any documents relating to the settlement, the amount she received or any bank statement showing the deposit of the funds into any account. In cross-examination the wife said that she made a profit of $320,000. She said she used the money to pay land tax assessed against the property and to pay living expenses.
The husband caused a subpoena to be issued for the settlement statement to the solicitor who acted on the sale but that solicitor was no longer trading and the husband was not able to obtain the documents.
The balance available after discharge of the mortgage was $405,821. From that sum, agents’ commission and legal fees would have been paid. There is no evidence that establishes what those costs were.
It is also likely that any outstanding land tax would have been paid on settlement as land tax is a charge against the property and it is unlikely that a purchaser would take title subject to that charge. Accordingly, I do not accept that the wife paid land tax from the amount due to her, on settlement. I am unable to find that she paid capital gains tax or, if capital gains tax was paid, in what sum it was paid.
The wife was not in Australia when the settlement occurred. The second respondent executed the transfer document on behalf of the wife relying on a Power of Attorney. He also executed the request to discharge the mortgage, again relying on a Power of Attorney from the wife.
The sum remitted to China on 7 May 2014, the day after settlement of the sale of
Suburb HP, was $388,262.
Absent any other explanation, it is likely that the amount of $388,262 was the proceeds of sale of Suburb HP. If any doubt remained, in the schedule prepared by the wife in aid of her submissions which formed part of Exhibit 19, there is a concession that the proceeds of sale of Suburb HP were $388,262.
Annexed to an affidavit of the second respondent sworn 24 June 2021 are further documents evidencing the transfer of funds from the second respondent to the wife.
On 12 May 2014, the second respondent transferred HKD600,000 from the #…31 account to the wife.
On 12 May 2014, the second respondent transferred HKD400,000 from the #…31 account to the wife.
On 15 May 2014, the second respondent transferred HKD850,000 from the #…31 account to the wife.
The second respondent deposed that the Australian dollar value of those transfers was a total of $256,943.
I do not, therefore, accept that the funds transferred by the second respondent to China on 7 May 2014 were his own funds and I do not accept that the second respondent advanced $388,262 to the wife on 7 May 2014.
I do accept that the second respondent advanced $142,182.69 to the wife between 20 February 2006 and 18 December 2013. However the wife caused the second respondent to be paid $84,149 from the sale of the United Kingdom property and HKD 1,213,409 ($198,635) from the sale of the GH Street property, a total of $282,784. I am therefore unable to find that the second respondent made any contribution on behalf of the wife that has not been repaid to him. On those calculations, it appears that the second respondent has been repaid the principal amounts that he lent the wife and has received, in addition, some $140,601 in interest.
What funds were transferred to the wife by the third respondent and by the wife to the third respondent?
The wife asserts that third respondent lent her $50,000 in August 2017 (shortly before separation) and $40,000 in October 2017 (after separation).
The Deed executed by the wife and the third respondent in relation to the $40,000 advance recites that $15,900 of that sum had been advanced to pay legal fees.
In the wife’s affidavit sworn 16 August 2020, she deposed that she received £83,340 or $148,820 from the sale of the United Kingdom property from which she paid the third respondent $64,675 which I assume to include interest.
The amount of $40,000 has also been repaid to the third respondent although the evidence does not establish from whence the funds came.
What funds were received by the wife from the sale of the property at Suburb HP?
As has been explained earlier in these reasons, it is likely that the wife received $388,262 from the sale of Suburb HP. I am satisfied that $256,943 from the sale was transferred to her in
May 2014 by the second respondent. It is likely that the balance of the amount received by the second respondent was also paid to her. Despite the fact that the wife has been asked to provide documentary evidence of the disposition of the settlement funds she has not done so.
However, I note that this transaction occurred three years before the husband and the wife separated and at a time when the husband was not earning income and had not earned income since 2011.
Did the wife have a beneficial or legal interest in the HS Street property?
The husband has not established that the wife had an interest in the property.
What were the assets of the parties at separation?
I am satisfied that, at the date of separation in September 2017, the wife was the registered proprietor of the following properties, all of which were encumbered by way of mortgages to which the husband was a party:
·Suburb FF
·United Kingdom
·Japan
·GH Street
The arrangement in place at separation was that the rental income was paid into a joint account at HT Bank and the outgoings on the properties were paid from that account.
In addition, the wife had entered into contracts to purchase two properties, at Suburb HX and at Suburb HY. Both properties were purchased “off the plan”. Those contracts had not been completed. The Suburb HX property was ultimately purchased by the second respondent and the Suburb HY property was sold in what appears to be a simultaneous settlement. The wife gave evidence that she was unable to complete either purchase and disposed of the properties. I am not satisfied that the wife had any equity in either property.
The husband asserted that he had $500,000 in managed funds. The wife disputed that assertion. No documents were produced by the husband to support his assertion. The husband had not earned an income between 2011 and April 2015 and he has not demonstrated any ability to have accumulated such a sum by September 2017. I do not accept that the husband had $500,000 in managed funds.
Annexed to the affidavit of the husband sworn 9 April 2021 at pages 76 to 110 are documents evidencing investments held by the wife at various times in the following entities:
·AR Company
·AS Company
·AT Group Limited
·AU Company
·AV Company
·AW Assets
·AX Limited
·AY Company
·AZ Company
·BD Limited
·BE Company
·BF Company
However, the documents do not establish that the wife owned those investments at the date of separation. None of the documents evidences investments held after 2014.
The evidence does not establish that, at separation, the husband and the wife had any significant assets other than their equity in the real estate referred to above.
What amount did the wife receive from the rental income of the United Kingdom property and how were those funds used?
It is not in dispute that, contrary to orders of the Court, the wife directed the United Kingdom agent to pay the rent of the property to an account in the wife’s name and not to the joint HT Bank account from which the mortgage was paid.
The wife has not provided any documents which establish what funds she received by way of rent between 9 January 2019 and June 2020 when the property was sold. On 10 July 2019, orders were made directing the wife in the following terms:
4.I direct the wife to forthwith do all acts and things and sign all documents necessary to cause to transfer or redirect the amount received into her HU BANK China Account Number …88 from BJ Agent, the managing agent for the property situated at and known as Apartment PP, NN Street United Kingdom (“United Kingdom property”) being a lump sum amount of rental income for a period of 6 months into the parties’ joint HT Bank account ending #…54 and thereafter the rental income for the United Kingdom property be directed to the said HT Bank account ending #…45.
5.The sum of $13,189 from the wife’s share of the proceeds of sale of the Japan property, being one half of the Dr HV’ss fee, is to be held in the wife’s solicitor’s trust account pending determination of the husband’s application it be paid to him.
6.I direct the wife to produce to the husband’s solicitors internet copies of her bank statements for her HU BANK Account …88 within 14 days from 1 January 2019 to date.
7.The wife is to provide bank statements to the husband’s solicitor of her HU BANK account within 6 weeks.
The wife has not complied with those orders.
The wife asserts that she used some of the funds she received to pay the cost of replacing the sewage pump at Suburb FF but she provides no documents to substantiate that assertion.
After the wife diverted the rent, the mortgage continued to be paid from the joint HT Bank account.
On the evidence available I am unable to make any finding as to the net amount the wife may have received.
What amount was received from the sale of the United Kingdom property and how were those funds disbursed?
The wife asserts that she received $148,820, the whole of which was paid to her parents.
The husband disputes that assertion and claims that the wife received a greater amount.
However, the husband has provided no evidence to support that assertion.
I am unable to find that the wife received more than $148,820 from the sale of the United Kingdom property.
However, I am also conscious that the wife has failed to produce the financial records of the sale as she was ordered to do. I cannot find that the wife has accounted for the whole of the proceeds of sale of the United Kingdom property.
What funds were received by the wife after separation from assets acquired during the marriage?
The Japan property was sold pursuant to orders of the Court and each of the husband and the wife received about $164,000. I do not propose to take those funds further into account.
On 13 December 2017, the wife borrowed HKD2,000,000 from QQ Limited secured against the GH Street property. I accept the husband’s assertion that the Australian dollar equivalent is $360,260.
It is her evidence that she invested those funds in a casino venture and that the whole of the investment was lost. She has provided no documents to substantiate that claim but neither has it been established that she has retained or recovered any of the funds.
When the GH Street property was sold in January 2018, the amount due to QQ Limited was paid out of the net proceeds.
Thus I accept that, for the purpose of these proceedings, the wife has had the benefit of $360,260 from pre-separation assets.
I have already taken into account the funds that the wife paid to the second respondent from the sale of the GH Street property.
The wife received an unquantifiable amount by way of rent from the United Kingdom property.
I have already taken into account the funds received by the wife from the sale of the United Kingdom property and paid to her parents.
I accept that the wife received rent from Suburb FF by renting out the property online after separation but I am unable to quantify the amount she received.
The wife has borrowed $10,000 from JJ Pty Ltd which will be repaid from the proceeds of sale of Suburb FF. Those funds will be taken from the wife’s share of the proceeds and will be taken into account as money had and received by the wife.
Has the wife made full and frank disclosure?
As is clear from the discussion above, there are many aspects of the wife’s financial dealings which are unclear because she has not provided the evidence to clarify them.
A bundle of documents was tendered in the husband’s case relating to requests for disclosure and the wife’s failure to provide documents.
It is sufficient to say that, in relation to each transaction which has been detailed above, the husband’s solicitors have asked the wife to produce documents that disclose the disposition of funds.
I am satisfied that the wife has not provided the documents which would allow the Court to make findings about the disposition of various sums. However, I am not satisfied that the wife has any undisclosed funds in her possession or control.
Who should bear the costs of the trustee for sale?
The wife and the husband were invited to file written submissions in relation to this issue. The wife’s submissions were filed in the form of an affidavit sworn by her on 24 February 2022. The husband’s submissions were filed 3 March 2022.
The wife submitted that the trustee’s costs should be paid out of the gross proceeds of the sale and opposed any order requiring those costs to be borne by her.
The husband submitted that the trustee’s costs should be borne by the wife.
As is clear from the narrative set out above, it became necessary to appoint a trustee for sale because the wife refused to do what was necessary to complete the sale of the Suburb FF property to the purchaser.
The wife does not suggest that anything the husband did exacerbated the trustee’s costs. Since the husband was not a registered proprietor he had little to do with the sale except to sign such documents as were necessary to discharge the mortgage on settlement which he did when asked to do so.
Whilst the wife asserts that she did all things necessary to deal with the issue of the FRCGWCC, she relies on things which she asserted were done by her “in 2020 long before the Trustee for Sale was appointed”. She does not assert that she signed the documents which were submitted to her by the trustee for sale in 2021 or that she co-operated with the trustee for sale to resolve the issue in 2021 or 2022.
The conduct of the wife necessitated the involvement of the trustee for sale. The wife should bear the costs of the trustee.
THE BALANCE SHEET
Both the wife and the husband relied upon a balance sheet dated 12 July 2021 which is reproduced below:
ASSETS No Ownership Description Wife’s Value Husband’s Value 1 W EE Street, Suburb FF 3,700,000 3,700,000 2 W Westpac bank account #…05 200 275 3 H National Australia Bank account #…10 5,889 5,889 4 J HT Bank China account ending #…54 127 127 5 H HZ Bank (Japan) #…95 45 45 6 H HT Bank China account ending #…94 0 NIL 7 H Motor Vehicle 1 80,000 10,000 8 W Managed funds accounts 50,000 50,000 9 W HW Pty Limited 0 Not known 10 H Personal loan – Lenz Family Trust 99,978 NIL 11 W Engagement ring 5,000 5,000 12 H Furniture and effects 75,000 5,000 13 W Jewellery and designer handbags 5,000 E 50,000 14 J Funds held in Finn Roache Trust Account 0 13,189 Total Assets $4,021,239 $3,789,525
[Sic]ADDBACKS 15 W Sale proceeds GH Street, China 198,635 198,365 16 W Monies paid to QQ Limited 360,260 360,260 17 J Net proceeds of sale of Japan property 0 327,520 18 J Apartment PP, NN Street, United Kingdom 148,820 232,728 19 W Suburb HP property sale proceeds 0 E 398320 20 W 6 months rental income from United Kingdom 9,833 9,833 Total Addbacks $717,548 $1,128,706
[Sic]LIABILITIES 21 J Mortgage – CD Bank (Suburb FF) 1,608,643 E 1620000 22 H HT Bank credit card 12,951 12,951 23 H Credit card 41,009 41,009 24 H Loan from Lenz Investments (legal fees) 79,220 297,042 25 H Income tax liability estimate 24,632 24,632 26 W Loans from [second respondent] (including interest) 1,236,234 NIL 27 W Renovation costs on Suburb FF 35,000 NIL 28 W Loans from [third respondent] 167,650 NIL 29 W HECS 9,600 6,000 30 W Loan to BG Pty Ltd 0 NIL 31 W Loan to BH Company of China 0 NIL 32 W Personal Loan HU BANK 13,900 NIL 33 W Chinese Credit Card 31,249 NIL 34 W Monies owed to Finn Roach[e] Lawyers 115,000 100,000 35 W Monies owed to M.C.A. Lawyers Pty Ltd 40,000 Not known 36 W Monies owed to JJ Pty Ltd 10,000 10,000 Total Liabilities $3,425,088 $491,634
[Sic]SUPERANNUATION Member Name of Fund / Type of Interest Wife’s Value Husband’s Value 37 W HW Company (Accumulation) 3,528 2,987 38 H HU BANK (Accumulation) 10,000 Total Superannuation $3,528 $12,987 FINANCIAL RESOURCES Ownership Description Wife’s Value Husband’s Value 39 W Outstanding unpaid commission from Lenz Investments 2,010,624 NIL 40 W Rental income collected by husband since separation (Japan and UK) $27,000, NCAT Claims $22,289, half family car, furniture and appliances 75,000 NIL TOTAL $2,085,624 $0 TOTAL NET ASSETS (Assets – Liabilities + Addbacks) Total $1,317,227 $4,439,584
[Sic]
I propose to deal with the disputes arising from the Balance Sheet using the item numbers on the document.
Item 1 – Suburb FF
The property has been sold but the sale has not yet been settled. The trustee for sale estimates that the net proceeds of sale, after payment of the mortgage and agents’ commission, will be in the vicinity of $1,600,000. The trustee is authorised to pay the sum of $10,000 to JJ Pty Ltd to satisfy the debt owed to that company by the wife. That payment must be taken into account when determining what funds have been received by the wife.
Item 7 – husband’s Motor Vehicle 1
There is no evidence of valuation. I will include this item at the husband’s value as an admission.
Item 10 – personal loan to Lenz Family Trust
The husband denies the existence of such a loan. In the reasons for judgment dated 5 February 2020, I made the following findings:
LOAN
101.The wife in the Points of Claim refers to a loan made by the husband to the Trust in the sum of $99,978.
102.There is no issue that the funds were lent. The debt appears in the financial statements of the Trust.
103. The sum lent is an asset of the husband for the purpose of the s 79 proceedings.
I accept that the financial statements at that time showed that the husband had lent the sum of $99,978 to the Lenz Family Trust.
In cross-examination, the husband said that the sum of $99,978 had been lent by his father’s brother to the Lenz Family Trust but that the funds were transferred into the husband’s account and then, by the husband, into the account of Lenz Investments Pty Ltd. The husband said that the accounts of the company had been rectified and that they now showed the debt as a debt to the husband’s uncle. However, no documents were tendered to substantiate the husband’s evidence. Specifically, the husband did not tender the rectified financial statements.
However, the husband’s father deposed that the trust has lent the husband $297,042.10 for the payment of legal fees.
Whilst the loan to pay legal fees is not a liability to be taken into account for the purpose of determining the assets available for distribution, it must be recognised that if any money were lent by the husband to the Lenz Family Trust, that loan would be offset against any sums lent by the trust to the husband.
It is not necessary to determine whether the loan was made by the husband or his uncle. In either case, the husband is a net borrower from the trust either of $297,042.10 or of $197,064.10.
Accordingly, I will remove the asset from the balance sheet and disregard the balance of the outstanding loan for legal fees.
Item 12 – husband’s furniture and effects
There is no evidence of valuation. I will include this item at the husband’s value as an admission.
Item 13 – wife’s jewellery and handbags
There is no evidence of valuation. I will include this item at the wife’s value as an admission.
Items 15 to 20 – addbacks
These funds no longer exist and cannot be added back. They will be taken into account in consideration of the section 75(2) factors.
Item 21 – Suburb FF mortgage
The mortgage will be discharged on the settlement of the sale.
Item 22 to 25 – husband’s personal liabilities
The evidence does not establish that these liabilities were incurred before separation or for the benefit of the family as a whole. They will be removed from the balance sheet and taken into account in consideration of the section 75(2) factors.
Items 26 and 28 – loans from wife’s parents
The evidence does not establish that the husband was aware of these asserted loans or that they were used for the benefit of the family before separation. They will be removed from the balance sheet and taken into account in consideration of the section 75(2) factors.
Item 27 – renovation costs on Suburb FF
The wife provides no evidence to substantiate this claim. The liability will be removed from the balance sheet.
Item 29 – wife’s HECS debt
The husband concedes a debt of $6,000. The wife brings no evidence to substantiate a higher figure.
Items 32 to 36 – wife’s liabilities
The evidence does not establish that either the HU BANK loan or the credit card funds were used other than for the wife’s own benefit after separation. The legal fees and the debt to
JJ Pty Ltd are not joint debts. These debts they will be removed from the balance sheet and taken into account pursuant to section 75(2) of the Family Law Act 1975 (Cth).
Item 37 – wife’s superannuation
There is no evidence of the value of the fund. I will accept the figure to which the wife admits.
Item 39 – outstanding commissions owed to the wife
This is asserted to be a debt owed by Lenz Investments Pty Ltd as trustee of the Lenz Family Trust. I am not aware of any proceedings instituted by the wife to recover those funds. The asserted debt is not the liability of the husband. This item will be removed from the balance sheet.
Item 40 – rental income collected by the husband for properties in Japan and United Kingdom after separation
There is no evidence which establishes what funds, if any were received by the husband by way of rent for these properties.
The husband deposed that while the rents were paid into the joint HT Bank account, the outgoings were also paid from that account. After the wife caused the rents for the United Kingdom property to be paid into her account, the mortgage continued to be paid from the HT Bank account.
The wife has not established that it is appropriate to make any adjustment in relation to this claim which will be removed from the balance sheet.
After judgment was reserved, the settlement of Suburb FF was effected and a settlement statement has been provided by the trustee for sale. Since the amount of the capital gains tax is, as yet, unquantified, the amount held by the trustee is indicative but it is useful to include the amount when determining the percentage division of the net asset pool.
I thus find the assets and liabilities of the marriage, for the purpose of these proceedings to be as follows:
No Ownership Description Value 1 W EE Street, Suburb FF – net proceeds in accordance with settlement statement. $1,600,000 (approx.) 2 W Westpac bank account #…05 200 3 H National Australia Bank account #…10 5,889 4 J HT Bank China account ending #…54 127 5 H HZ Bank (Japan) #…95 45 6 H HT Bank China account ending #…94 0 7 H Motor Vehicle 1 10,000 8 W Managed funds accounts 50,000 11 W Engagement ring 5,000 12 H Furniture and effects 5,000 13 W Jewellery and designer handbags 5,000 Total Assets (excluding proceeds of Suburb FF) $81,261 Liabilities 29 W HECS 6,000 Net assets $75,261 Superannuation Member Name of Fund / Type of Interest Wife’s Value 37 W HW Company (Accumulation) 3,528 38 H HU BANK (Accumulation) 10,000
The assets available to distribute between the husband and the wife are therefore $75,261 plus the proceeds of sale of the Suburb FF property. The exact amount available from Suburb FF cannot be known until such time as the capital gains tax has been paid.
SECTION 79(2)
Both the husband and the wife seek an adjustment of their respective property interests. There is no dispute that it would not be just and equitable to make no adjustment.
CONTRIBUTION
The husband contributed $150,000 from the disposal of the Suburb HL property at the commencement of the cohabitation and a further amount of $150,000 which was given to the husband and the wife when they moved to Japan by the husband’s parents. There was no challenge to the husband’s evidence of the gift.
There is no evidence that the wife had any significant assets at the commencement of their cohabitation.
In so far as the wife’s parents made contributions on her behalf, the evidence suggests that those funds were repaid with significant interest.
Until 2011 when the husband was retrenched from his employment, they both worked and contributed their earnings.
Between July 2011 and April 2015, the husband worked for Lenz Investments Pty Ltd but he was not paid for that work. There is no evidence that the husband actively sought paid employment during that period and the wife’s income supported the family.
From April 2015, the husband earned $120,000 per annum and the wife’s income was greater than that of the husband although the husband does not concede that the disparity was as great as the wife asserted and no documents were tendered which might have resolved the issue. The husband concedes that the wife earned about $300,000 per annum. The most he earned was $240,000 per annum and the least was $120,000 per annum.
Overall, between the commencement of cohabitation and separation in September 2017, the wife made the greater contribution and contributions are assessed in her favour at 52.5 per cent to the wife and 47.5 per cent to the husband.
SECTION 75(2) ADJUSTMENT
The issue that dominated the hearing was the wife’s contention that the husband will eventually benefit from the four years of unpaid work which he performed for Lenz Investments Pty Ltd in relation to the Property G project and that he will receive a benefit at some time in the future from the HK project which commenced after the husband and the wife separated. In relation to the HK project, it does not appear to be disputed that the project was commenced after the husband and the wife separated.
Further, the wife contends that she performed work and provided services to the
Property G project for which she has not been paid and that she also made a significant contribution to the wealth of the Lenz Family Trust by that work. Although the husband conceded that the wife did some work introducing prospective purchasers to the
Property G project, he did not concede and the wife did not demonstrate, that her contribution was as extensive as she claimed.
It is the wife’s case that the husband led her to understand that he and she, as a family, would eventually receive a benefit from their work and specifically, that he promised that she would receive a unit in the development.
Whilst the husband does not concede that he made those representations and promises, it is likely that he did, at least, represent to the wife that they would eventually benefit. There is no other explanation for his working for four years without remuneration.
Unfortunately for the wife, the husband does not own or control Lenz Investments Pty Ltd and he does not control the Lenz Family Trust. If he made representations as the wife asserts, he was not in a position to make them good.
It was clear from the evidence of the husband’s father that he regards the assets of the
Lenz Family Trust as his assets and there is no doubt that it is the husband’s father who controls the trust.
The husband’s father is 79 years old and appeared to be in robust health.
Whilst it is likely that, eventually, the husband and his three siblings will share in their parents’ estates, that time may be distant. The evidence does not establish the quantum of that prospective inheritance. However, the prospect is a matter to be taken into account when considering any adjustment.
There is presently a disparity in the earning capacities of the husband and the wife. The husband has an income of $120,000 per annum. I am unable to make any findings about the wife’s income. She tendered no evidence to substantiate her claim that she has no income. She has variously claimed to be a consultant to a number of entities. She told Dr HV that she was working long hours in the city and that her father needed to help with collecting X from school. She asserted that she is working as a casual waitress but produced no evidence to support that assertion.
Neither party has sought a splitting order in relation to superannuation. The amounts are minimal and I propose to leave each with her or his superannuation entitlements.
Both will have responsibilities to accommodate X into the future. The parenting arrangements which are current and which will remain in place result in X spending nine nights each fortnight with the wife and five nights with the husband. X spends the school holidays equally with both parents. I accept that the husband will continue to pay child support in accordance with any assessment and that he will also ensure that X has private medical insurance.
The wife has already received $360,260 from the sale of the GH Street property and she may have also received money from the sale of the United Kingdom property. She will also receive the benefit of the repayment of her debt of $10,000.
Apart from the amount claimed to be owed by the wife to the second respondent, the third party debts are incurred in relation to legal fees and are not taken into account.
Taking all of these matters into account, I am satisfied that it would be appropriate to make a small adjustment of 7.5 per cent in favour of the wife resulting in an overall distribution of the net assets as to 60 per cent to the wife and 40 per cent to the husband.
Excepting the proceeds of sale of Suburb FF, for the purpose of this determination, the wife has assets, including the joint HT Bank account in China which she will receive, totalling $60,327 and a debt of $6,000, a net sum of $54,327.
The husband has assets totalling $20,934.
In order to distribute those assets, with a total net value of $75,261 in the proportions I have determined, the husband would be entitled to receive $30,104.40 so the wife must pay him, from her share of the proceeds of Suburb FF, the sum of $9,170.
Otherwise the net proceeds of sale of Suburb FF, after payment of capital gains tax, will be distributed according to the percentages which I have determined and the wife’s share will be preserved until the claims of her creditors have been determined.
PARENTING
The Court was assisted by an ICL and by two reports from Dr HV, a child and family psychiatrist who had been appointed as single expert.
After the parents separated in September 2017, the wife and X moved back to Australia and, after the tenants left the Suburb FF property, they lived there.
The husband came back to Australia in early October 2017.
Parenting orders were made on 18 December 2017 which provided for X to spend a block of five nights each fortnight and half of all school holiday periods with the husband. Since 2018, X has spent time with the husband in accordance with those orders and the parents have been able to agree on his school holiday time. They have also agreed in relation to significant days and generally in relation to X’s schooling and his medical care.
During the times X spends with the husband they live in the home of the paternal grandparents rather than in the husband’s home.
The husband remarried in 2019. His wife, Ms AD has a daughter AAA who is aged 14 years and lives with the husband and Ms AD.
X has been diagnosed as suffering from an Autism Spectrum Disorder (“ASD”) and has some aspects of Attention Deficit Hyperactivity Disorder (“ADHD”). He has an intellectual disability and, according to Dr HV, is very immature. He attends a local Catholic school where he has been placed in a special class and he receives assistance from a psychologist, a speech therapist and an occupational therapist. X is in receipt of assistance from the National Disability Insurance Scheme (“NDIS”). The husband pays for private health insurance for X.
The parents have agreed that X will attend a private Catholic secondary school although they have not yet agreed on a specific school. Each gave evidence that the school preferred by the other was a suitable school.
Dr HV initially saw the family in March 2019 and prepared a report dated 17 April 2019.
He saw the family again in May 2021 and prepared a report dated 2 June 2021.
Thus Dr HV was able to give evidence about X’s progress between March 2019 and May 2021 during which time he has lived in the primary care of the wife, although the husband has had substantial involvement in his care.
Dr HV EVIDENCE
Dr HV reported:
[The husband] told me that when X is with him, he stays at his parents’ home in Suburb AE but they catch up with [Ms AD] and [AAA] at least once on the weekends, particularly on Sundays when they will do something together. He explained that he had initially got into the habit of doing this in order to introduce X to them gradually. However Covid intervened and as they were renting a two-bedroom apartment only about a 20-minute drive away, he felt it would be better if he and X continued to be based at his parents’ home. He felt the apartment would be too crowded and contained for X, and they were also very limited by Covid restrictions in the outdoor activities that they could participate in. He said he was quite worried about how X might react. So since then X’s time with him has continued to be based at the grandparents’ home.
Further, Dr HV stated:
I also asked [the husband] to explain in more detail why it was that he and [Ms AD] had been married for just over two years, they were now living in a three-bedroom townhouse, and yet he was still basing his five-day block of time with X at his parents’ home. He described the townhouse as of three levels, a bedroom on the top floor, two bedrooms on the second floor and the living area on the ground floor. They have only been living there since October 2020, having previously lived in a two-bedroom apartment between their marriage in 2019 and moving into the three-bedroom townhouse. He said that their first apartment was extremely cramped, and also had only a small living area from which he worked as well as [Ms AD] undertaking her daily activities and [AAA] being present out of school hours. He added that when his mother-in-law had visited, there was no alternative but for her to share [AAA’s] bedroom. He told me that he had been looking for a larger residence from shortly after the marriage in anticipation that there would not be ongoing legal expenses and that the funds tied up in the Suburb FF home would be released and distributed between himself and [the wife]…
He said that his plan had been to integrate X into his new family within about six months of his marriage on the basis that X did not really know [Ms AD] or [AAA] at the time they married, and that this was a change which needed to occur gradually to ensure that it went well. In the meantime he said that X has developed a very good relationship with [AAA] and [Ms AD], and possible sources of stress and tension between X and his new family have not arisen. He added that [Ms AD] had also referred to having moved five times in the previous six or seven years, and that she was very reluctant to make yet another move unless it was likely to be to a more permanent residence.
He said in hindsight at this point, two years have passed without the resolution of a fully integrated family but that for most of that time he had been living in anticipation that the resolution of the practical financial concerns was only a couple of months or so away. He told me that he can see that the earlier X was integrated into his new family, the better that would have been for him. However if I understood him correctly, he felt that postponing this for a short period until he was in a financial position to offer his family a good family home rather than a somewhat constrained one was in the forefront of his mind, while at the same time he was able to offer X the stability of his parents’ family home with which X was very familiar and where he was very contented.
The husband told Dr HV:
He asserts that he has introduced X to [Ms AD] and her daughter [AAA] but that he has been cautious about how much time X spends with them as he asserts he is concerned that [the wife] might seek to damage or alienate X from them. He asserts he is seeking advice as to how to best integrate his whole new family, however he notes that they have all gone on several trips and holidays together. He asserts that while X is in his care, he stays at his parents’ residence and when X is not in his care he stays with [Ms AD] and [AAA] in their apartment. He describes both himself and [Ms AD] not seeking to undermine their children’s relationship with their respective other parents. He describes his relationship with [AAA] as more like an uncle and [Ms AD’s] relationship with X as more like an aunt. He believes that over the past two years he has earned [M’s] respect and that X has developed a good rapport with [Ms AD]. He plans to purchase a four-bedroom property (close to both children’s schools) when the proceedings are finalised which would enable the whole family to live together.
Dr HV returned to the issue of X’s integration with the paternal family later in the report stating:
I also note that more than two years after remarrying, [the husband] has not yet fully integrated X into his new family. From quite a detailed conversation with him, it appeared to me that the reasons for this involved a degree of caution in the form of postponing integration until he could do it under the best possible circumstances, and also a degree of difficulty in harmonizing taking on additional financial stress (in terms of more expensive rental) and X’s need to be a full member of his family at the earliest appropriate moment. Subject to there being no confirmation that there is an undisclosed issue between he and [Ms AD] about X living with them, it is my view that he probably should have prioritized X’s integration somewhat higher, even if it caused some financial pain, or an additional short-term rental relocation.
Dr HV noted that in the session where X was present with Ms AD, X referred to her as “Aunty”. Ms AD speaks limited English and X speaks limited AG language.
Of his interview with the wife, Dr HV reported:
She told me that her father is of particular assistance after school with X. As she generally is not able to get away from the city until about 4.30 or so, her father generally picks X up at about 3.15 then he may take X for something to eat then on to an activity or an appointment if there is one scheduled. She said that she often meets up with them at the activity or appointment, or otherwise at around 5pm. She said that either she or her father would drop X off at school. Sometimes she and X will walk to school, which takes about a half an hour.
Dr HV spoke to X alone. He noted that X separated easily from his parents:
As we spoke, I asked a bit about his two houses. He was able to tell me the school week program, including which days he goes to [the husband’s] and returns. I asked him whether he would change that if he had magic powers. He said he would like to spend more time with [the husband]. When I asked him why, he said because [the husband] is nice and he gives him a lot, and [AAA] and [Ms AD] are nice. I asked him whether there were any things that were not so nice about being at [the husband’s]. He told me there was nothing.
I asked him what were the good things about [the wife]. He said that she is good to him and she is nice to him. They do good things together. When asked if there was anything negative, he started talking about a girl who had teased him but this did not seem to relate in any obvious way to [the wife].
In his conclusions, Dr HV stated:
Compared with the way X was when I first saw him, he has made remarkable progress. From a diagnostic point of view, it is probably most economical to confirm a diagnosis of Level 1 Autism Spectrum Disorder where his major problems lie in the areas of communication and social behaviour, particularly impulsiveness and having problems “reading” the emotions and behaviour of others. However the important thing is that he seems to have been making very good progress in all areas, more than one might ordinarily expect, and equally importantly, he does not seem to be disheartened about the differences between himself and other children. He seems to be a child who is quite settled in his mood, he seems to be good humoured, and there is a sense of optimism about him. His cognitive development is also significantly delayed compared with his parents’ much greater abilities. It lies between Borderline and Low Average, and significant learning difficulties are also evident. I note that a diagnosis of ADHD was also made when he was younger, but in my view that is probably redundant now, both from a diagnostic point of view in view of his improvement and also in terms of him not requiring ADHD medication.
…
I also note the rather complicated but unavoidable schedule in which X was a participant on the day of my assessment. Essentially this led to him going back and forth between his parents, and hovering physically between them, on about six occasions. This is significantly more than I would ordinarily allow at an assessment, and particularly so in a child whom one might regard as being quite vulnerable for additional reasons to the usual concerns that arise for a child living in the atmosphere of a high conflict Family Court matter. Despite the fact that I believe a diagnosis of Level 1 Autism Spectrum Disorder is the most inclusive, X coped remarkably well with this. Typically children with ASD find changes to routine quite stressful and it can easily lead to “meltdowns”. X did not show obvious distress about this, however he seemed a little bewildered by the time of the last two transitions, probably because he was getting tired. I felt that his response to the situation was surprisingly good and that it was also a positive prognostic indicator in his case.
Although X was still rather restless, overactive and distractible with both of his parents, on a more or less equal basis, I have noted that there has been a vast improvement in this area compared with when I first saw him. Not only was this behaviour more contained overall but importantly, X was very responsive to prompts by his parents to self-regulate this behaviour although his persistence did not always last very long and he needed further reminders. The degree to which this had occurred, particularly in a child whom I believe still just meets the criteria for ASD, is quite notable and in my view it is a reflection of a number of interventions – speech pathology, occupational therapy, psychological and other sensory therapy, and an integration by both parents of the feedback by each of these professionals into their daily interactions with X. It is also my view that X’s school has taken a purposeful approach to the same problems with basically the same positive results. I would note that the degree of integration of a multidisciplinary team into X’s home and school environment is of a type which I would normally ascribe to enrolment in a much more specialized school setting than AH School. So he has been very fortunate.
Dr HV canvassed X’s views:
I did ask X a bit about his views about the current arrangement and whether he would change it. He said he would prefer to spend more time with [the husband] but his reasoning was rather materialistic, probably compatible with his level of cognitive development and general maturity, and I am not prepared to place a great deal of weight on that.
As to the nature of X’s relationships with his parents, Dr HV stated:
When I first saw X with his parents, I was uncertain as to the nature of his relationship with each of them. I thought he was somewhat better organized and modulated with [the husband], who also seemed to be more attuned to X, but that X did not show obvious affectionate behaviour with either of them. I also felt that both parents were appropriately vigilant. I thought that records from China may clarify whether one or other parent had been more involved with X and whether the quality of their relationship had been better, however those materials have not been received. In my view they are no longer necessary.
What I observed this time was that X has a rather similar and quite secure relationship with each of his parents. He was basically cooperative, affectionate and warm with them, and each of his parents reciprocated. Both have incorporated various ways of encouraging prosocial behaviour and better communication skills, although in somewhat different ways, but in my view with similar effectiveness. It was difficult to appraise X’s relationship with [Ms AD]. Her English is quite poor, she is not yet a large part of his life, and she stayed in the background during my assessment. However I observed nothing which suggested to me that there is any negativity to that relationship, he referred to her as “Aunty [Ms AD]” in very natural and respectful terms, and he does not appear to have been at all disruptive towards aspects of her life which might otherwise infer a negative relationship, such as tormenting the dog Winnie or annoying [AAA].
Dr HV reported that the relationship between the parents remains tense and distrustful, however he stated:
At a practical level, despite their differences, the parents have basically cooperated in the provision of a multidisciplinary array of services towards X’s developmental needs which is clearly reflected in X’s excellent developmental progress, and of which each parent provides muted acknowledgement of the other parent’s role, probably [the wife] the less so. Although there have been squabbles behind the scenes about who pays for these and other things, the continuity and complexity of these services has not been significantly interrupted. From this I conclude that while there is not goodwill between the parents, their feelings about each other are overridden by their appreciation of their child’s needs and their understanding that they each have a legitimate part to play.
…
I have noted above that [the wife] is probably being more directly negative about [the husband] to X than vice versa. However I note again that they have actually cooperated very well about his rehabilitation. I also note that the schedule of visits which was set in place with the orders of 2018 have essentially been uninterrupted. Indeed on the day of my assessment, X stayed on at least an extra night with [the wife] so that she could accompany him to the school’s Mother’s Day event. Accordingly I remain reasonably confident that despite their mutual distrust, neither parent is intent on substantially undermining X’s relationship with the other parent.
As to the parents’ attitude to X and the responsibilities of parenting, Dr HV reported:
At my first assessment, I felt that [the husband] was more aware of X’s special needs and more attuned to his nature whereas I was concerned that [the wife] saw X as a part of a multitasking schedule. My view on this has changed. While there may still be some small differences between the parents, I think that in both cases, their attitude about parenting and the responsibilities that they have taken on in relation to X are very comparable, and X has benefited.
Further, Dr HV stated:
I note that in my first report, I referred in some length to concerns in this area, indicating that overall I thought that [the husband] presented as the significantly more preferable parent. As I have indicated above, in my view the past three years has displayed a different picture and I do not have significant concerns about either parent’s capacities. Rather, despite their differences and the ongoing animosity between them, I am of the view that both of them are very child centered, patient and responsive with their son. However I am also of the view that each parent has areas in which they could improve, [the wife] in putting grievances behind her, and [the husband] in focusing more on integrating X completely into his new family.
Dr HV did not support the husband’s proposal to change the present arrangements for X. He stated:
I am of the view that a 9:5 arrangement is appropriate and will meet X’s needs. The remaining question is whether there should be a change of major residence. It is difficult to predict how X would react to moving to majority time with [the husband], although on the history I was given and the fact that he adapted rather well to a much more fragmented sequence of interviews than I would normally provide during my assessment, I think he is probably a boy who adjusts to change rather better than many other children with ASD. However I note with some surprise that more than two years after his marriage, [the husband] has yet to integrate X into his new family. It is possible that this will be more of an adjustment than X has had to deal with so far, and if it also includes an almost doubling of his current fortnightly time with [the husband] and a commensurate reduction in his time with [the wife], it could exceed his threshold for coping with change.
…
At the end of this assessment, I find myself recommending a continuation of a 9:5 arrangement. I think the decision to consolidate this as a single block each fortnight has turned out to be correct as it does minimise transitions and therefore the possibility that X may be exposed to tension between his parents. Moreover and probably more importantly, this assessment has not borne out my concerns about [the wife] in significant measure in terms of her parenting or X’s interests. There also appears to be no evidence that any of the risk factors that I was concerned about with [the husband] in terms of violence have been borne out in the intervening period, however his capacity to parent X within his new family has yet to be tested. For that reason I cannot find a basis within my area of expertise for either a change of residence or for a change in the current visiting schedule. I am also of the view that the parents can share parenting responsibility in the major areas.
Dr HV’s opinion in relation to the husband’s proposed changes was maintained in his oral evidence.
Further, in answer to a proposition put by counsel for the ICL, Dr HV said he saw no benefit to X in changing the present arrangements to accommodate X’s spending six nights each fortnight with the husband rather than five.
Overall, Dr HV’s evidence was that it would not be in X’s interests to change a regime in which he has thrived.
CONSIDERATION
The wife supports the maintenance of the current regime whereby X spends five nights each fortnight with the husband. The husband sought an order which would have had the effect of X’s spending equal time with each parent on a week about basis.
Neither parent disputed the benefit to X of having a meaningful relationship with each parent.
Although there are allegations of family violence prior to the parents’ separation in
September 2017, there is no evidence that X needs to be protected from psychological harm from exposure to abuse or violence in either household.
any views expressed by the child and any factors (such as the child’s maturity or level of understanding) that the court thinks are relevant to the weight it should give to the child’s views
X told Dr HV that he would like to spend more time with the husband. Whether X was complaining that the husband absented himself on the weekends when X was with him, as the wife alleged, or X simply wanted to spend more days with the husband cannot be determined. In either event, Dr HV’s evidence was that, because of X’s emotional age, little weight should be given to his views. I accept that evidence.
the nature of the relationship of the child with:
(i) each of the child’s parents; and
(ii) other persons (including any grandparent or other relative of the child);
I accept the evidence of Dr HV that X has a good relationship with each of his parents. There is no reason to doubt that X also has a good relationship with his paternal grandparents and with his maternal grandparents. They have all played a significant role in X’s care.
The husband’s sister, Ms R, gave evidence that X has a particularly close relationship with his cousins.
the extent to which each of the child’s parents has taken, or failed to take, the opportunity:
(i) to participate in making decisions about major long term issues in relation to the child; and
(ii) to spend time with the child; and
(iii) to communicate with the child;
Both parents have been attentive to X’s needs and it appears that they have each spent time with him in accordance with the regime upon which they agreed in early 2018.
the extent to which each of the child’s parents has fulfilled, or failed to fulfil, the parent’s obligations to maintain the child
The husband currently pays child support as assessed at the rate of $990 per month.
the likely effect of any changes in the child’s circumstances, including the likely effect on the child of any separation from:
(i) either of his or her parents; or
(ii) any other child, or other person (including any grandparent or other relative of the child), with whom he or she has been living;
I accept the evidence of Dr HV that it would be unwise to change the living arrangements in which X has made such notable and pleasing progress. On either proposal, X’s relationship with his parents and grandparents would not be affected.
the practical difficulty and expense of a child spending time with and communicating with a parent and whether that difficulty or expense will substantially affect the child’s right to maintain personal relations and direct contact with both parents on a regular basis
Presently the wife lives at Suburb EF and the husband lives at Suburb AJ. They both plan to move when the proceeds of the sale of Suburb FF are available but they both agree that X will remain in his present school and they will live where travel to and from school is comfortable for X.
the capacity of:
(i) each of the child’s parents; and
(ii) any other person (including any grandparent or other relative of the child);
to provide for the needs of the child, including emotional and intellectual needs;
I accept the evidence of Dr HV that both of the parents have demonstrated an ability to provide for X’s needs.
Because Ms AD did not give evidence, I am unable to make any assessment of her abilities in this regard.
any family violence involving the child or a member of the child’s family
The wife alleges a number of incidents of family violence during the course of the relationship, however those allegations are not set out in any of the affidavits upon which she relies. Therefore I propose to set out what the wife told Dr HV about her allegations of violence.
In Dr HV’s first report he recorded her allegations:
In her affidavits, [the wife] alleges that her husband had been very controlling and quickly angered from early in the relationship. She recounts several specific incidents, starting with one in 2005 when she alleges he struck her across the back with a weapon causing bruising. There was a second in 2006 when she alleges that he grabbed her from behind and attempted to strangle her when he would not allow her to go by herself of a business trip, and another one in 2012 when he became angry about her attending a business trip and he grabbed one year old X from her arms, hit her and threatened that he would kill her and throw X from the balcony if she went. She alleges that this was witnessed by their then maid Ms AK. She recounts an incident on January 1st 2015 when her husband hit her in the presence of her parents-in-law and their maid Ms AK and X. She was holding her phone at the time and was able to record four clips during this. She reported the assault to the police which resulted in a good behaviour order and an equivalent of an ADVO. There is an incident in July 2017 when there was an argument about commission [the wife] alleged was owed on the sale of units in Adelaide. She alleges he took a kitchen knife and motioned the blunt side of the knife across his neck and threatened to jump from the balcony and kill himself if she kept pushing him. She alleges that her maid Ms AL and herself had to pull him back from the balcony. She called the police who took him to the hospital for examination but he left and had to be located again by the police. Following this incident she attended a counsellor recommended by the police twice and later a psychologist three times to discuss domestic violence and her fears of her husband. There was an incident on September 17th 2017 in which her parents arrived at the apartment in the morning to go to breakfast with [the wife] and her family and [the husband] refused to allow X to go, and while apparently trying to get to X he pushed her, she lost her balance and she hit the back of her head on a table causing swelling and bruising. Her parents witnessed this. The police and ambulance were called and she attended hospital. [The husband] was held overnight by the police and the following day an ADVO was issued. X had witnessed this incident and afterwards told [the wife] that he was very scared. However after returning to Australia [the wife] reported to the NSW Police about the above incident. She provided a statement and the NSW police also issued an ADVO.
Dr HV also sought the husband’s version of those events and he reported:
I asked [the husband] about the weapon incident in 2005. He basically described the implement as a life sized wooden replica of a weapon which they bought for him at a hot spring. He denied that he had hit her with this. He said that this story is fictitious. He commented that he and [the wife] had a number of arguments during their relationship, some of which became quite aggressive, but he denied other incidents of having deliberately assaulted [the wife] from 2015.
I asked him about [the wife’s] allegation that he had hung X over the balcony and threatened to drop him. He said this incident occurred when X was about 18 months old. He said that [the wife] had a history of affairs and on this particular day she had advised him that she was going to be going on a holiday to Country AM with a friend the following day but she would not reveal anything about the person who was accompanying her, not even their gender. He said he became very angry. If I understood him correctly, he had X in his arms and he positioned himself near the balcony door and pretended he was going to slide it open. However he was adamant that he never took X out on the balcony nor had he intended to harm him. If I understood him correctly, this led to [the wife] providing her friend’s telephone number and when [the husband] telephoned the person he found it was a woman and he wished her a good vacation.
I asked him about the incident in January 2015. He said that [the wife] was complaining that he received no salary from the work he was doing for his father. He indicated that several days prior to the incident [the wife] had gone out with a male friend, taking their son and the nanny with her. He said that afterwards the nanny told his mother that [the wife] and this man had shared food from the same spoon. His mother, who was visiting at the time, did not tell him this, however a few days later he got upset at [the wife] when she was on the phone with a client over dinner. He said he grabbed the phone and yelled at the person on the other end. He said his mother thought that the man on the phone was the same person whom the nanny had been talking about and was [the wife’s] boyfriend. She accused [the wife] of infidelity. He said that things became more heated and [the wife] poured a glass of wine on his mother’s face. His mother then threw a glass of water over her. He also intervened and slapped [the wife] across the face. He said that he had turned on [the wife] because his mother would not have forgiven him if he had not. If I understood him correctly, he felt that he had to do this to rebalance the power between his mother and [the wife] and to avoid long-term conflict between them. He said that in the video he can be heard telling [the wife] to stop, and he and his wife arguing about money.
He said that [the wife] had reported this incident to the police but he said he did not give the police the full story, by which I understood him to mean his mother’s role and his defence of her. He said the police interviewed him then released him. There was a hearing about two weeks later and he received a fine and a one-year good behaviour bond. Later in that day he and [the wife] left on vacation together. On their return, he and [the wife] attended the relationship counsellor and they agreed not to go on with it. He explained that by this point he knew he was going to be receiving a salary from his father's property development.
I asked him about [the wife’s] allegation that he had threatened to jump off a balcony in July 2017. He said that the trigger for this was [the wife’s] credit card spending, which had steadily built up over the years. He said that he had just received the previous month’s credit card bill which was for about Aud $30,000. He said that this had included Aud $15,000 she spent on having two cosmetic procedures. He challenged [the wife] that this level of spending was unaffordable. He said her response was that she was only spending her own money. He said that he threatened to jump off the balcony to show her how serious the issue was. However he was adamant that he had no intention of doing so, or that he had actually placed himself in any real risk. He said that he walked back inside and said he was going to take a break. He left the apartment intending to go to a nearby cinema but it was closed so he returned home about a half an hour later to find the police in attendance. The police wanted to take him to AN Hospital where I understand he was assessed. He also talked to the police about what had precipitated his behaviour, as well as assuring them that he had had no intention of harming himself. He said the police listened to his account and they also spoke to his sister Ms P, and after that he was released to go home.
I asked him about the incident in September 2017. He said the background to this was that they had just returned from a long holiday on which they had also taken the nanny, and on their return the nanny had taken a day off. He added that he gets panicky and stressed when he looks after X. If I understood him correctly, he was still in bed at about 10am when the doorbell rang and his wife came in to say that his in-laws were there for breakfast. He said that the house was a mess, including the remnants of the previous nights dinner still not having been cleaned up in the kitchen and some of [the wife’s] garments, including her underclothes, strewn around the dining room. He described feeling panicked about his in-laws seeing the house in this condition and he suggested to [the wife] that she send them up to a social venue where they could join them later, which she refused to do. He said that his in-laws entered the apartment and they asked him why he was cleaning up. He replied that [the wife] had not done so.
There was then an argument about cleaning up and he suggested that they go up to a social venue and leave X with him to take up later. He said that his father-in-law offered to take X up to a social venue with them, but [the husband] foolishly said that he did not trust them. [The wife] then moved to get X and he put his arm out to block her. He indicated that she was still affected by the foot surgery she had had a couple of weeks earlier and her balance was not good, so she fell over when he put his arm out. His mother-in-law screamed at him that now she could see that he was hitting her daughter. He said he tried to apologise and help [the wife] up but she would not let him. His mother-in-law accused him again of domestic violence.
If I understood him correctly, they all ended up going up to a social venue together. He said that while they were going up in the lift [the wife] showed him her head, which looked fine to him. He was adamant that he could not see any blood in her hair. He said his mother-in-law was still going on about him being a bad person. By the time they got up to a social venue, his mother-in-law was wanting to take her daughter to the hospital and call the police. Ultimately they did not eat there but they collected some takeaway which was taken down to the apartment. The police were called and he was asked to go down to the police station. In the meantime I understand [the wife] was taken to hospital. He said that the hospital report he has seen says “no superficial injury” despite [the wife] and her family claiming that there was blood.
He said that even at this point he had not realised how serious the situation was. He said that [the wife] had not complained about being injured at the time and her main grievance was about him arguing with her mother. He told me that he had never wanted a divorce from [the wife], but he said that he has probably threatened to divorce her on a half a dozen occasions.
I understand that after seeing the police he was not allowed to return home prior to there being a hearing. He told me that the police suggested he should stay in gaol overnight and attend the hearing in the morning, which he did. There was a very brief hearing and he was allowed out on bail but he was not allowed to return to their apartment. In the event, he stayed with his sister who was still in China at the time. If I understood correctly, a further hearing was scheduled about two weeks later but in the meantime Ms AP telephoned to say that [the wife] had left for Australia. They travelled via AQ City in order to drop the nanny back in her country, however if I understood him correctly the nanny later returned to China.
He said that the outcome of the court hearing was that he was fined $3000…
Even on the husband’s admissions to Dr HV, there were incidents of family violence between the parents, sometimes in the presence of X.
It is not necessary to determine which version of the events is to be accepted. On his own version, the husband’s behaviour was inappropriate and resulted in the wife needing medical treatment and the authorities imposing penalties and restraining orders upon the husband.
However, despite those incidents and the competing allegations, the wife proposes that X spend five nights out of each fortnight and half of all school holiday periods with the husband.
CONCLUSION
There are two matters upon which I place the greatest weight in coming to a decision about where X will live.
The first and most important matter is the evidence of Dr HV to the effect that to change X’s present arrangements has the potential to jeopardise his current progress.
The second matter is the lack of evidence from Ms AD about the reasons X has not been integrated into the husband’s household and her attitude towards X’s being integrated into her household and towards X.
Having regard to both of those matters, I do not propose to change X’s present arrangements other than to remove his name from the Family Law Watchlist as both parents have asked me to do.
PAYMENT OF DR HV’S FEES
In relation to Dr HV’s first report, the orders made on 18 December 2017 provided that, in the first instance, the husband pay the costs. He did so.
On 10 July 2019, an order was made requiring the wife to pay, from her share of the proceeds of sale of the Japan property, the sum of $13,189, being half of the cost of Dr HV’s first report, into her solicitors’ trust account.
The funds remain in the solicitors’ trust account and the husband seeks that they be paid to him.
The wife opposes the order sought by the husband but, apart from her general impecuniosity, advances no reasons.
Both parties received $164,000 from the sale of the Japan property.
There is no reason to depart from the usual rule that the parties jointly pay the costs of the single expert.
Accordingly, the amount of $13,189, together with any interest accrued, held by the wife’s former solicitors, should be paid to the husband.
The second issue relates to funds held by the Legal Aid Commission to cover the costs of
Dr HV’s cross-examination at the trial. The husband paid $5,280 into the trust account of the Legal Aid Commission to cover Dr HV’s anticipated costs.
Dr HV’s actual costs were $3,905 so the Legal Aid Commission proposed to refund the balance of $1,375 to the husband. The wife objected and asked the Legal Aid Commission to pay half of the amount to her, despite the fact that she had made no contribution to it.
Clearly, the balance should be refunded to the husband. The most expedient course is to deduct that sum from the amount to be paid by the husband on account of his share of the costs of the ICL.
COSTS OF THE ICL
Both the husband and the wife agree that the costs of the ICL, assessed to be $5,443.50 for each of them should be paid. The wife agreed that her share should be paid from her share of the proceeds of Suburb FF. Thus the wife will pay $5,443.50 and the husband will pay $4,068.50.
I certify that the preceding two hundred and ninety-two (292) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Rees. Associate:
Dated: 3 March 2022
SCHEDULE OF PARTIES
SYC 6598 of 2017 Respondents
Fourth Respondent:
M.C.A. LAI & CO PTY LTD
Fifth Respondent:
SYDNEY COVE SERVICES PTY LTD ACN …
Sixth Respondent:
MR DEA
Seventh Respondent:
DANIEL PATRICK GEORGES T/A FINN ROACHE LAWYERS
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