Daultrey & Tavener
[2023] FedCFamC2F 1480
•17 November 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Daultrey & Tavener [2023] FedCFamC2F 1480
File number(s): CAC 374 of 2018 Judgment of: JUDGE TONKIN Date of judgment: 17 November 2023 Catchwords: FAMILY LAW – PROPERTY SETTLEMENT – Adjustment of property interests under section 90SM of the Family Law Act 1975 (Cth) – credibility in issue – whether court is required to undertake an accounting exercise – whether just and equitable to make any order adjusting the parties interests in property – whether order proposed is just and equitable – no order made adjusting property interests Legislation: Family Law Act 1975 Cth) ss 4AA, 79, 90RD, 90SB, 90SE, 90SG, 90SK, 90SL,90SM.
Federal Circuit and Family Court (Family Law) Rules 2021 (Cth)
Cases cited: Baker v Towle [2008] NSWCA 73
Bilous v Mudaliar (2006) 65 NSWLR 615
Black and Kellner (1992) FLC 92-287
Candle v Faulkner [2021] FedCFamC1A 102
Clauson & Clauson (1995) 18 Fam LR 693
Dickons & Dickons [2012] FamCAFC 154
Giunti and Giunti (1986) FLC 91-759
In the Marriage of Ferraro (1993) FLC 92-335
In the Marriage of Lee Steere (1985) FLC 91-626
Jabour & Jabour [2019] FAMCAFC 78
Mayhew & Fairweather [2022] FedCFamC1A 53
Mezzacappa v Mezzacappa (1987) FLC 91-853
Stanford v Stanford [2012] HCA 52
Stein v Stein (1986) FLC 91-779
Watson & Ling [2013] FamCA 57
Division: Division 2 Family Law Number of paragraphs: 188 Date of last submission/s: 18 October 2023 Date of hearing: 16-18 October 2023 Place: Brisbane Counsel for the Applicant: Mr Givney Solicitor for the Applicant: Walsh & Blair Counsel for the Respondent: Mr Catlin Solicitor for the Respondent: HPH-Princeton Legal ORDERS
CAC 374 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR DAULTREY
Applicant
AND: MS TAVENER
Respondent
ORDER MADE BY:
JUDGE TONKIN
DATE OF ORDER:
17 NOVEMBER 2023
IT IS DECLARED
1.Pursuant to section 90RD of the Family Law Act 1975 (Cth) (“the Act”) it is DECLARED that a de facto relationship existed between MR DAULTREY and MS TAVENER for the periods commencing early 2009 to mid-2009 (4 months), early 2010 to late 2011 (20 months) and from early 2010 to late 2014 (4 years and 11 months) being an aggregate period of cohabitation of 6 years and 11 months.
THE COURT ORDERS:
2.Within 28 days of the date of these orders the applicant husband shall transfer to the respondent wife the 99 units held by him in the E2 Property Unit Trust.
3.The respondent wife shall indemnify the applicant husband as against all loan repayments in relation to the E1 Property Unit Trust and the E2 Property Unit Trust.
4.The applicant husband is declared the sole and beneficial owner of:
(a)Term deposit;
(b)NAB trade shares;
(c)Bank accounts in his name;
(d)Audio equipment;
(e)Motor Vehicle 1;
(f)Motor Vehicle 2;
(g)Motor Vehicle 3;
(h)Superannuation entitlements in his name.
5.The respondent wife is declared the sole and beneficial owner of:
(a)The E1 Property Unit Trust;
(b)The E2 Property Unit Trust;
(c)Bank accounts in her name;
(d)Motor Vehicle 4;
(e)Vehicles in her possession or control; and
(f)Superannuation entitlements in her name.
6.The applicant husband shall indemnify the respondent wife and keep her indemnified with respect to his personal loan NAB #...50, Facility Loan NAB#...76, K Pty Ltd loan NAB #...79, the husband’s overdraft NAB #...53 and any liability in the husband’s name or any other entity the husband has an interest in either jointly or severally.
7.The wife shall indemnify the husband with respect to any liability in her name or any other entity she holds an interest in either jointly or severally.
8.In the event that either party fails or neglects to sign any document or give any such authority or consent then pursuant to section 106A a Registrar of the Court is appointed to sign any such document and/or give any such authority or consent on behalf of a party.
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 has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
Judge Tonkin
The applicant (de facto husband)[1] in these proceedings is 62 born in 1961 and the respondent (de facto wife) is 53 born in 1970. The nature and duration of the parties’ de facto relationship and each party’s contribution is in dispute. The applicant contends the parties’ commenced cohabitation in early 2009 and separated on a final basis in December 2016 (a period of 7 years). The respondent contends the parties cohabited between early 2009 and mid-2009 (5 months), from early 2010 to early 2011 (14 months) and from mid-2012 to late November 2014 (2 years and 3 months) in total a period of 3 years and 10 months.
[1] The applicant and respondent are referred to in the judgment as husband and wife respectively for convenience though they were de facto partners and did not marry.
The parties’ relationship was short and there were no children of the relationship. The matter was heard by me on 15 October 2023. By that stage the parties had been litigating for 5 years. The veracity of each party was in question. The husband made a number of bald assertions about his financial contributions during the relationship unsupported by independent documentary evidence. He failed to produce financial records that would likely assist in unravelling the labyrinth of his financial transactions.
The wife failed to disclose income she received from NDIS in excess of $300,000. She failed to disclose financial statements as service provider for NDIS nor any details of staff engaged by her, nor the existence of Motor Vehicle 4 for which she paid cash of $130,000. Given issues about the parties truthfulness the manner in which the trial was conducted compounded the Court’s difficulty in assessing contributions not to mention the delay since the parties separated in November 2014. The authorities are clear. The assessment of contributions is not a mathematical or accounting exercise and even more importantly it is a holistic undertaking with all of the contributions of the parties of whatsoever nature being taken into account: Dickons & Dickons [2012] FamCAFC 154; (2012) 50 Fam LR 244 at [23] – [26]. I intend to proceed consistent with authorities.
Documents relied on
The applicant relied on his initiating application filed on 27 February 2018, his trial affidavit sworn on 21 February 2023 and financial statement filed on 11 October 2023, his case outline filed on 13 October 2023 and further amended written outline of argument.
The respondent relied on her affidavit filed 18 May 2023, financial statement filed 13 October 2023 and the Single Expert Report filed 12 October 2023 (Exhibit C1).[2]
[2] Mr Y’s Forensic Accounting Report of 12 October 2023 was admitted into evidence over objection
Issues at trial
(a)The nature and duration of the parties relationship;
(b)The date of final separation;
(c)The net value of the property pool;
(d)Whether the parties’ interests in property should be adjusted and if so what orders should be made.
De Facto Relationships
Under section 4AA of the Family Law Act a de facto relationship means:
(1) A person is in a de facto relationship with another person if:
(a) the persons are not legally married to each other; and
(b) the persons are not related by family; and
(c)having regard to all the circumstances of their relationship they have a relationship as a couple living together on a genuine domestic basis.
Pursuant to subsection 4AA (2) those circumstances may include any or all of the following:
(a) the duration of the relationship;
(b) the nature and extent of their common residence;
(c) whether a sexual relationship exists;
(d)the degree of financial dependence or interdependence and any arrangements for financial support between them;
(e) the ownership, use and acquisition of their property;
(f) the degree of mutual commitment to a shared life;
(g)whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship;
(h) the care and support of children;
(i) the reputation and public aspects of the relationship.
Subsection 4AA (3) provides that no particular finding in relation to any circumstance is to regard as necessary in deciding whether the persons have a de facto relationship.
Subsection 4AA (4) provides that a court determining whether a de facto relationship exists is entitled to have regard to such matters and to attach such weight to any matter as may seem appropriate to the court in the circumstances of the case.
Paragraphs 4AA (1) (a) and (b) of the Act are satisfied in this particular case.
Subsection 90SK (1) of the Family Law Act provides that a Court may make a declaration under section 90SL or an order under section 90SM in relation to a de facto relationship only if the court is satisfied:
(a)that either of both of the parties to the de facto relationship were ordinarily resident in a participating jurisdiction when the application for declaration or order was made; and
(b) that either:
(i)both parties to the de facto relationship were ordinarily resident during at least a third of the de facto relationship; or
(ii)the applicant for the declaration or order made substantial contributions in relation to the de facto relationship of a kind mentioned in paragraph 90SM (4) (a) (b) or (c )
in one or more States or Territories that are participating jurisdictions at the application time;
or that the alternative condition in subsection (1A) is met.
Subsection (1A) provides that the alternative condition is that the parties to the de facto relationship were ordinarily resident in a participating jurisdiction when the relationship broke down.
Section 90SB (1) of the Act provides that a court may make an order under section 90SE, 90SG or 90SM, or a declaration under section 90SL, in relation to a de facto relationship only if the court is satisfied:
(a)that the period, or the total of the periods, of the de facto relationship is at least 2 years; or
(b)that there is a child of the de facto relationship; or
(c) that:
(i)the party to the de facto relationship who applies for the order or declaration made substantial contributions of a kind mentioned in paragraph 90SM(4)(a), (b) or (c); and
(ii)a failure to make the order or declaration would result in serious injustice to the applicant; or
(d)that the relationship is or was registered under a prescribed law of a State or Territory.
Both parties were living in New South Wales when the application was made and had been resident in that State during a third of the de facto relationship on either party’s version of the length of the relationship. Paragraphs 90SK (1) (a) and (b) and 90SB (1) (a) are satisfied.
Declaration of interests in property
Section 90SL (1) provides that in proceedings between the parties to a de facto relationship:
(a) after the breakdown of the de facto relationship; and
(b) with respect to existing title or rights in respect of property;
the court may declare the title or rights, if any, that a party has in respect of the property.
(2)If a court makes a declaration under subsection (1), it may make consequential orders to give effect to the declaration, including orders as to sale or partition and interim or permanent orders as to possession.
Applicable legal principles
In Stanford v Stanford [2012] HCA 52; (2012) 247 CLR 180 the High Court dealt with the operation of section 79 of the Family Law Act (section 90SM is equivalent). The Court said:
[37] First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. ……… The question posed by s 79(2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order.
…
[39] Because the power to make a property settlement order is not to be exercised in an unprincipled fashion, whether it is "just and equitable" to make the order is not to be answered by assuming that the parties' rights to or interests in marital property are or should be different from those that then exist. …….. Questions between husband and wife about the ownership of property that may be then, or may have been in the past, enjoyed in common are to be "decided according to the same scheme of legal titles and equitable principles as govern the rights of any two persons who are not spouses.” (citation omitted) The question presented by s 79 is whether those rights and interests should be altered.
[40] Third, whether making a property settlement order is "just and equitable" is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79 (4). The power to make a property settlement order must be exercised "in accordance with legal principles, including the principles which the Act itself lays down". To conclude that making an order is "just and equitable" only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.
In Watson & Ling [2013] FamCA 57 (12 February 2013) Murphy J discussed the approach to property settlement matters having regard to the principles enunciated by the High Court in Stanford v Stanford [2012] HCA 52; (2012) 247 CLR 180:
[12] Provided the discretion is exercised judicially, it is at large; it is neither possible nor desirable to specify its ‘metes and bounds’ (Stanford at [36]-[40] and [46]). Recognition is given to the fact that the circumstances of individual marriages (their nature, form and characteristics) can and do differ and those differences – the way in the which the parties have organised and lived their marriage/relationship – may be relevant to the exercise of the s 90SM(3)/s 79(2) discretion. Equally, provided that the questions required by s 90SM(3)/s 79(2) and s 90SM(4)/s 79(4) are seen as separate and applied as such, and not conflated, the enumerated factors within s 90SM(4)/s 79(4) can inform the s 90SM(3)/s 79(2) discretion together with any such other considerations as are properly relevant (see, Stanford at [40]).
[13] As a result of those matters, the Court’s approach to s 79/s 90SM may be less compartmentalised than what a strict or unthinking adherence to four (or three) “steps” might otherwise reveal. The task is essentially holistic; is it just and equitable in the particular circumstances of the particular relationship or marriage under consideration to make an order and, if so, its terms must similarly meet that criteria. Of course, holistic though the approach is, it must be referenced to what the Act requires and care must be taken to ensure that the Court’s reasons make that clear. (See, for example, Davut & Raif (1994) FLC 92-503 at 81,237).
The Full Court in Candle v Faulkner [2021] FedCFamC1A 102 (23 December 2021) at [36] more recently referred to the applicable principles when determining property applications:
All financial and non-financial contributions are to be evaluated relative to that of the other party with such weight as the Court determines, since precise valuation of contributions is impossible: Kessey & Kessey [1994] FamCA 162; (1994) FLC 92-495 at 81,151; contributions are to be assessed between commencement of the relationship and trial, and measured not only in terms of assets that presently still exist: Farmer & Bramley [2000] FamCA 1615; (2000) FLC 93-060 at [68]–[69]; contributions are to be assessed in a holistic manner across the course of the relationship and during the post-separation period to the point of assessment: Horrigan & Horrigan [2020] FamCAFC 25 at [35].
Consideration
Parties’ interests in property in 2009
At the commencement of the relationship I am satisfied the wife held interests in the following property:
(1)Home at J Street, Suburb Z in City D[3] N.S.W. (“J Street”);
(2)Furniture and Effects;
(3)An investment property being H Property, AA Street, Suburb BB in Brisbane (“H Property Apartment”);
(4)Motor Vehicle 5; and
(5)A business with equipment.
[3] In her trial affidavit filed 18 May 2023 at [22] the wife refers to the J Street property as in “Suburb EE”
In 2004 the wife purchased the property at J Street for over $550,000. That property was unencumbered at the commencement of the relationship. She also owned the H Property apartment which she had purchased for over $500,000 using 100% finance. The balance on that loan in January 2009 was $579,957.55. In addition, she had a line of credit which was drawn down in the amount of ($73,000). She had an interest in superannuation of $17,000 when the relationship commenced.[4]
[4] Husband’s trial affidavit filed 21 February 2023 [19]
I am satisfied the husband held interests in the following property:
(1)A property at O Street, Suburb P, N.S.W.[5] (“O Street”);
(2)A 24.9% interest in a business named G Pty Ltd; and
(3)Motor Vehicle 1
[5] In her affidavit filed on 18 May 2023 the wife at [9] described the property at O Street in “Suburb FF” City D
The husband purchased O Street for over $450,000 in 2007 paying a deposit of $47,350. He borrowed the balance of $444,387.81[6] taking two loans with NAB. In May or June 2009 he owed the NAB bank ($85,664.93) and ($378,800).[7]
[6] Husband’s trial affidavit filed 21 February 2023 [19] Annexure “E”
[7] Husband’s trial affidavit filed 21 February 2023 [19] Annexure “F
In 1990 the husband commenced work for G Pty Ltd City D and within a few years was appointed manager. He became a company director in 2001 and his company K Pty Ltd purchased a 24.9% interest in G Pty Ltd for $647,400. He said this was funded 100% via an interest free vendor loan from Mr CC and Ms DD (his ex – wife’s parents). G Pty Ltd employed 60 people and made equipment and owned land on which the business operated at N Street City D N.S.W. In 2009 he owed Mr CC and Ms DD ($246,136) for his interest in the business.[8]
[8] Husband’s trial affidavit filed 21 February 2023 [19] Annexure “C”
The wife contends that the husband was leasing Motor Vehicle 6 for around $700 per month and had at least one credit card when cohabitation commenced. The husband held an interest in superannuation in June 2009 of $114,760.[9]
[9] Husband’s trial affidavit filed 21 February 2023 [19] Annexure “G”
When cross examined the husband said he was paying around $180 a week to pay off the personal loan being interest only repayments. He believed his total mortgage cost was about $2400 per month. He also had a credit card and when questioned he said he may have had two or three credit cards. It was suggested that his own evidence was “I had a credit card which [Ms Tavener] was able to use when she wanted. This was often maxed out to its limit of $30,000.”
The husband deposed in his trial affidavit at [42] “In early 2005, [Ms Tavener] and her former husband took out home loans totalling $720,000 against their home at [J Street].” He agreed that at the commencement of cohabitation the wife’s property at J Street was unencumbered. He accepted her draw down facility secured against J Street had a maximum limit of $140,000 and agreed that when the parties commenced cohabitation the balance was about $73,000. He agreed that the wife’s H Property apartment in Brisbane was earning around $550 a week in rent.
I find that at the commencement of the relationship the wife’s property interests were substantially greater than the husband’s interests. I accept the husband’s interest in superannuation was greater than the interest in superannuation held by the wife.
Nature and duration of the relationship & contributions
Early 2009 to mid-2009 (period of cohabitation)
The parties met in 2008. Each were single parents raising their own children. The husband lived with his two teenage daughters and the boyfriend of his eldest daughter in the O Street property. Ms GG was 18 and Ms HH 14 years old. In addition, the husband had two children from his first marriage Ms JJ and Mr KK. One of the children was married and the other lived with his sister.
The wife had sole care of her three children LL aged 2 years, Mr MM aged 4 and Mr NN aged 8 and was running a business from home. She lived in the J Street home and was managing her investment property. She agreed in cross examination that when she and her former partner filed an application for consent orders in 2007 she described herself as undertaking home duties and did not mention her business. In 2007 she was not receiving any child support. She agreed she recorded $50 per week in child support in documents filed but said she did not receive those payments. Her ex-partner began paying child support in 2009 or 2010 and paid about $13,000 over 3 years. He then relocated to Queensland in 2012 and was unemployed.
In early 2009[10] the parties commenced cohabitation when the husband moved into the wife’s home at J Street. The wife said they “trialled cohabitation” as he moved in with his daughter Ms HH and told her he was having difficulties managing the costs of his teenage children.
[10] Wifes trial affidavit filed 18 May 2023 [11]
The husband agreed that when he and Ms HH moved into the wife’s home at J Street he did not pay the wife any rent for living in her home. He agreed that straight away upon moving into the wife’s home he rented out his property at O Street. He paid the mortgage on that property and retained the rent. The wife contends that the husband did not assist her financially during this initial period of cohabitation. He was using his income to meet his loan repayments, pay his vendor loan and financially support both Ms HH and Ms GG who was at University and Ms GG’s boyfriend who was an apprentice. I accept that evidence and find that the wife met all outgoings on that property and on her investment property. She was utilising her line of credit and modest income from her business. The find that the parties separated when the husband and Ms HH moved out of the wife’s home in about mid-2009.
I am not satisfied that the husband made any financial or non - financial contribution towards the relationship during the 4 months he lived in the wife’s home. He received the benefit of living in that property rent free whilst he retained the rent received from O Street. I am satisfied that his income was applied to his expenses including mortgage payments of $2400 per month, the vendor loan and supporting his children. No evidence was adduced by the husband of any non – financial contributions he made during this period.
Separation mid-2009
The wife said due to difficulties with Ms HH’s behaviour which included bad behaviour and being sexually active as well as the age differences between the children she asked the husband and Ms HH to leave her home in mid-2009. The husband then lived at PP Street, City D over the next 6 months in the home owned by the children’s grandparents (the husband’s ex-wife’s parents).
In cross examination the husband was asked whether he agreed that his daughter Ms HH was sexually active around that time and using marijuana and the wife asked him to leave. He responded, “I think she said words to that effect, but I really think they were over‑exaggeration.” He denied he was told to leave. He said Ms HH left later that year and moved in with his eldest daughter who was at University and he frequented that home a few times. When cross examined about where he was residing he said, “but really, I was still residing a big percentage of the time at [J Street].” He agreed he did not pay the wife any rent when staying in the J Street home. He agreed that in mid-2009 he gave as his residence PP Street, City D, the address of his in-laws from his second marriage Mr CC and Ms DD. He denied that he and Ms HH moved into the home of Mr CC and Ms DD. He said he went to the home and stayed there a few nights a week and “was not there permanently.” He was asked when he said he visited J Street did that mean he was still living in that home. He said he would stay there overnight. He gave his mailing address as PP Street, City D in a number of documents. It was suggested that he did that because he was actually living in PP Street. He denied that.
The husband claimed that during this period he paid for most of the shopping for the wife and supported the wife and her children financially including paying living expenses, private school fees and music lessons.[11] He recalled her two boys went to a Catholic primary school, LL was not at school and Mr NN attended QQ School. He failed to produce any independent evidence in the form of invoices or receipts to support this contention that he paid the school fees for the wife’s children and rather relied on the fact that he was earning an income. He agreed he did not go to their school often. The wife disputed he made any significant financial or non – financial contributions.
[11] Husband’s trial affidavit filed 21 February 2023 [33]
The husband continued to deny the parties were separated for about 6 months. He denied he had court orders for custody of Ms HH. He was shown a copy of his debit card account and agreed he made withdrawals from an ATM on three occasions in mid-2009 in PP Street. He was asked about the entries “Dad” on the debit card account on two occasions in mid-2009. He agreed he made payments to assist his daughters. He denied he paid towards Ms GG’s University fees in 2009. He said she paid HECS and her grandparents assisted her. He did not recall paying for Ms GG’s car. He denied he paid for Ms HH’s private school fees and said her grandparents paid those. Following extensive cross examination on the issue relating to the period of separation from mid-2009 and whether he was in fact supporting his own children rather than making a significant financial contribution to the wife’s expenses he said “I will just say yes. We moved out and I moved in there, just to please the court. I’m happy to say yes.”
In his affidavit and in evidence during the trial the husband denied the parties had ever separated claiming they were in one continuous relationship from about early 2009 though he made the concession (referred to above). In his trial affidavit he stated “[Ms Tavener] has previously stated we lived in an on again/off again relationship where we were separated for long periods. I deny this.” During cross examination he was asked about a statement he made in his affidavit filed on 27 February 2018 at paragraph 6:
Our relationship had its ups and downs while we were renting a home and then again whilst we looked for the former family home. I moved in with my daughters for periods of time during the relationship, due to differences and strain in our relationship. We had two periods of separation for a total of a period of approximately six months.
Initially the husband said he did not recall swearing the earlier affidavit. He accepted however that he swore that evidence and agreed that when he did so, that time was closer to the time when the parties separated on a final basis and what had occurred would have been fresher in his mind. In response he stated, “they weren’t a total separation.” He said “we were still financially connected. I only stayed some time with my daughters in the other home.”
It was put to the husband that his claims that he and the wife had an unbroken relationship were false and the parties broke up for 6 months on this occasion and he lived with his in laws during that time. Further he had a close relationship with Mr CC and Ms DD, they owned or were part of the family that owned G Pty Ltd and they permitted him to stay in their property. He agreed he had a close relationship with Mr CC and Ms DD. He said “I will just accept it because I wrote something on a contract, but I permanently wasn’t living in that address. So, you can continue on with that assumption. We still had a relationship.” He said “I personally wasn’t paying for the rent. [Ms HH] moved there and it seems like I moved there based on that document that I signed.” He said “I never paid rent at that premises and my recollection is I spent time there, but – and no place did I say there I didn’t live there permanently except for that document that you placed in front of me.” Later in cross examination he said “in order to get past this, I have to say yes, ….I will just say yes and we will move on, because we’re getting nowhere.”
The husband was asked whether he would put a false address on a legal document. He replied “It was an address where I was not permanently living, but it was an address that was downtown and [Ms Tavener] had her home at [J Street].” He avoided answering the question.
The husband was cross examined about his wages. He said the reference to wages on the document referred to weekly wages of $1293 coming from G Pty Ltd. Counsel suggested that in his affidavit he claimed “I was employed full time during our relationship, earning on average more than 100,000 per annum.” He said his taxable income was $104,000 in 2010 but his weekly wage was recorded as $1293. He agreed with Counsel that the entry $1293 was not an accurate assertion of his weekly wage. He said “that may have been his net wage - there was no tax in that.”
The husband claimed “the wife’s loan of $77,000 grew because she was redrawing on the account to help pay for the main loan because the rent wasn’t keeping up with the mortgage payments.” Counsel suggested that the wife had a large buffer when the parties commenced living together and the husband could not have helped her out financially because he was highly leveraged and had not sold O Street at that stage. He agreed he was paying more than $10,000 p.a. to assist Ms GG and Ms HH but could not say how much. He said he paid Ms HH $100 per week. He accepted he paid Ms HH a weekly allowance and paid for her board of $50 per week. The parties kept their income and finances separate at all times.
I am satisfied that the husband lived primarily in the PP Street property between mid-2009 and early 2010 with his two teenage daughters. I find the parties lived separately and apart between mid-2009 and early 2010. I am satisfied that the husband applied his income to maintain his mortgage repayments, pay the vendors loan, and support himself and his children financially. I accept the wife’s evidence that the husband did not contribute financially to her expenses during the period of separation. I find that between early 2009 and early 2010 the husband did not make any significant financial or non - financial contributions.
Early 2010 to early 2011 (period of cohabitation)
In early 2010 Ms HH moved to City RR to live with an aunt and uncle. I am satisfied that the wife then agreed to allow the husband to move back into her home. The husband claimed the wife told him “I can’t afford to pay the loans on my home, I need your help.” He agreed that she did not say that when they first moved in together. He claimed she told him that in 2010. She denied that. I accept her evidence.
When cross examined it was suggested that in his affidavit the husband had portrayed himself as the person with the money and had claimed that the wife needed his financial assistance. Counsel suggested the reality was that the husband was “leveraged 100% on credit cards, personal loans and on [O Street] to the extent that he was required to live with his in laws and not pay them rent so he could rent out his property because in reality he had very little money.” He disputed that.
When the husband moved back into the wife’s J Street property in early 2010 the parties continued to keep their finances separate. The wife contends that during this period of cohabitation the husband continued to support his children financially paying Ms HH’s rent in City RR and her private industry school fees and credit card. She said he paid towards Ms GG’s University fees, gave her an allowance and provided her with a credit card. He paid for his childrens’ telephone accounts, purchased each child a vehicle and paid to maintain those vehicles. He paid his own credit cards, personal loans and mortgages. The O Street home continued to be rented for $550 per week and he retained the rent received from that property. I accept that evidence and find the husband contributed little to ongoing family expenses during this period. The husband claimed that “I had a credit card which [Ms Tavener] was able to use when she wanted.” He failed to adduce any evidence to support that claim. The wife denied she used the husband’s credit card. I accept her evidence.
During the relationship the husband worked with G Pty Ltd from 8 a.m. to 6 p.m. Monday to Fridays and sometimes longer and on weekends and as such was not available to assist the wife with her children. In addition to work commitments the husband travelled to America and Country SS 2 or 3 times a year for work usually for 1 to 2 weeks at a time. He visited America for training and logistics management of the G Pty Ltd warehouse and later to arrange for the sale of the business.
The husband adduced scant evidence about any non - financial contribution he made towards the wife and her children in his affidavit. In cross examination he conceded he rarely attended any school events for the wife’s children. He occasionally kicked a football around in the backyard. The wife disputed the husband was involved with her children. She said he rarely took her eldest child to rugby and rarely attended matches. They all holidayed together once in 2014. He did not take her children to public events like museums or things of that nature. She did not recall him ever playing football with her children. There is no satisfactory evidence before me that the husband made any significant non – financial contribution to the welfare of the family. In response to questions asked of him by Counsel he responded repeatedly “we were in a relationship” as if that fact were sufficient to infer he made some contribution. I am not satisfied on the evidence that the husband made any significant financial or non - financial contribution to the welfare of the family during this period save as discussed below.
Sale of H Property apartment
It is common ground that the wife transferred the H Property apartment to the husband. In 2010 she said she was involved in litigation with her ex - partner. She was operating her business out of her garage and towards the end of a fixed rate interest period she decided to sell the H Property apartment. The husband expressed an interest in buying the apartment boasting about his high income. At that time his taxable income was $104,279.
When cross examined on this issue the husband agreed that the wife had a strong past as a property investor claiming to have bought and sold many properties. He agreed he had never bought an investment property when they commenced cohabitation. He claimed the wife told him she had to find some money to keep the investment property going. He told the wife “I can see if I can refinance it and take it over. It will need to be transferred to me, I would say. I will speak to [Mr TT], our accountant.” The wife disputes that.
The husband agreed he put his address as PP Street, City D on the contract for the purchase of the H Property apartment. He denied he did that because he was living there at that time. He said “I wasn’t living with my in-laws. That was their home. It was rented. They weren’t living there. My only answer to that question would be that [Ms Tavener] and myself had a relationship. I purchased a property off her based on a reason that she couldn’t afford to keep the property and as far as I believe.” He said in early 2010 Mr TT set up the Daultrey Property Unit Trust with K Pty Ltd as Trustee for the Trust for the husband.
Mr TT acted for both parties on the sale of the H Property apartment to the husband from the wife and drew up the contract for sale. The husband completed a loan application form. The wife said she became aware that the bank had refused the husband’s finance as he had a $90,000 personal debt, mortgages of $390,000, a credit card with a debt of $30,000 and his income could not service those debts. He had 3 dependents and Motor Vehicle 6 was registered to G Pty Ltd. Further he had failed to disclose the debt with respect to his interest in G Pty Ltd of ($249,000).
Following discussions, the wife agreed to reduce the purchase price of the H Property apartment by $70,000 so that a loan could be approved for the husband to purchase the property. She claimed the property was worth $650,000 but to assist him with the purchase the contract price was reduced to $580,000 (the existing mortgage on the property). She agreed to sell the H Property apartment to the husband “for what he was able to borrow” being $227,000 and $209,000. She said he agreed to pay her the residual amount once G Pty Ltd was sold.[12]
[12] Wife’s trial affidavit filed 18 May 2023 [40] to [47]
She said she accepted what appeared to be a genuine representation by the husband that G Pty Ltd would be sold to an American entity and she would be reimbursed the shortfall.[13] On that basis she was prepared to commit $209,000 to UU Company for the Town F units rather than fully discharge her mortgage. The husband told her they had been offered “millions” for G Pty Ltd and her expectation was that once the sale concluded he would promptly repay her $214,000 being the shortfall in the sale of the H Property apartment plus interest.
[13] Wife’s trial affidavit filed 18 May 2023 [45]
When cross examined the husband denied he asked the wife if he could buy the H Property apartment. He denied the reason the property was not sold on the open market was because he asked the wife for her assistance to purchase his first investment property. He said “I was advised by someone not to buy it. And I didn’t take their advice at the time and bought the property because it had to be those default notices, some money had to be raised to keep the property going. [Mr TT] and [Ms Tavener] said, ‘This is your opportunity to buy into some investment properties and I believed her, and we had a relationship, we were together. I’m not disputing any of that.’” He said “We were in a relationship, and we were going to go on in our relationship for many more years than just a few years. So if you’re in a relationship and you make an objective, you certainly make an objective for a longer term than just a few years.” I reject the husband’s evidence.
He was asked about Annexure M to his affidavit the contract for purchase of the H Property apartment. He accepted that the original price on the contract was $650,000. That had been crossed out and $580,000 inserted instead. He said he agreed to pay only $437,000 for the property. It was suggested there was an oral agreement between the parties that he would owe the wife the difference between $650,000 and $437,000. He said “we were in a relationship and, yes somehow it had to be dealt with throughout the relationship.”
He deposed that the Daultrey Property Unit Trust obtained a loan for $464,000 from ANZ and entered into a contract to purchase the H Property apartment which settled in late 2010.[14] He said $437,000 was paid into the wife’s Macquarie Bank against her outstanding loans being a total of $227,977 in two separate instalments of $137,000 and $86,084.46. There remained an outstanding balance secured against the J Street property following the transfer of the H Property apartment to the husband of ($497,934.68).[15] The balance of about $209,000 was set aside for the Town F development. I am satisfied the wife contributed the proceeds of sale of the H Property apartment for the benefit of both parties.
[14] Husband’s trial affidavit filed 21 February 2023 [46]
[15] Husband’s trial affidavit filed 21 February 2023 [48]
In his Forensic Accounting Report[16] Mr Y observed that according to the Contract of Purchase dated late 2010 for the sale of the H Property apartment a deposit of $58,000 was paid. No bank statement nor any documentary evidence was produced to support that the deposit was in fact paid and who received it. The property settled in late 2010 when the sum of $461,859.30 was handed over by the ANZ bank. The husband claimed the Daultrey Property Unit Trust obtained the loan from the ANZ bank. In his report Mr Y indicated he had requested a copy of the ANZ bank statement evidencing the loan payment and that document was never produced. He was told that “the ANZ account was closed on the sale.” To the extent I can be satisfied the H Property apartment was purchased by K Pty Ltd as trustee for the Daultrey Property Unit Trust and funded 100% by the ANZ bank.
[16] Mr Y’s Forensic Accounting Report dated 12 October 2023
The evidence with respect to this transaction remains unsatisfactory. The husband claimed that the ANZ loan was paid out by an NAB mortgage account number “…99” for $440,000. No record of that account exists though a subpoena was issued to NAB to produce the account. No settlement statement was produced. At annexure M to the husband’s trial affidavit he annexed a letter from Mr TT dated late 2010 referencing receipt of $461,859.30 from the ANZ bank with payouts of $227,977.06 (“Ms VV’s loan”) and $209,403.49 (WW Property Unit Trust as per your authority).
I am unable to unravel exactly what occurred on the husband’s side of the ledger. He had multiple bank accounts and engaged in “lapping”. Mr Y explained in cross examination “….lapping refers to a practice whereby money is taken from one account and transferred to another account and then transferred back again. So it’s a round robin of funds, in essence.” He said there was evidence of lapping “not necessarily the same amounts but there was a flow of funds that was going back and forward. …. I suppose where you most commonly see it is where …..you’re borrowing from Peter to pay Paul and then you have got to rob it back again because you are constantly juggling overdraft limits, loan balances, things like that. So you might have a loan that has some equity in it and so you need to draw on that to make a loan repayment on another loan, and then when the first loan gets to its limit you – and the second one maybe has got some equity left in it, you draw back on the other one. That’s probably the most common scenario I see it, where people are constantly in a battle to find the funds to meet their loan commitments.” He said loan statements were missing and there were no statements in the name of Daultrey Property Unit Trust. References were made to transfers being made to and from an account but he could not see funds going into that account.
As to the husband’s allegation that the wife needed to sell the property to him as she was in debt the husband was asked in cross examination why if she was in debt she would not sell the property on the open market but rather “sell it to the husband for $150,000 less than the contract price of $580,000. If she had sold it for the original listed price of $650,000 (crossed out on the contract) she would have sold it to the husband for more than $200,000 less.” The husband failed to respond to those propositions. Regarding the shortfall and whether he believed he owed the wife a debt in relation to his purchase of the H Property apartment he said “we were in a relationship.”
The husband was asked why he borrowed $460,000 to purchase the H Property apartment but only paid the wife $437,000. Counsel suggested he deducted the stamp duty and paid the wife the balance. He said “I probably didn’t have enough money for stamp duty.”
It was suggested to the husband that the difference between what the husband paid the wife for the H Property apartment and the market price constituted a notional debt between the parties. In response he said that was “unfair because he only sold the property later for $520,000.”
I am satisfied that the husband expressed an interest in purchasing the H Property apartment from the wife as an investment and she agreed to sell it to him initially at a reduced price to enable him to enter the property investment market. I am satisfied she also agreed to sell the property to him for an amount he was able to raise by way of finance at the time which was less than the contract price. I am satisfied that she agreed to the terms of the sale on the promise or expectation that the husband would repay her the shortfall between the price he paid and the contract price once G Pty Ltd was sold and he received a payment for his interest in that business.
I am satisfied that the wife received $227,977.06 which partially reduced her loan secured against H Property and the J Street property. She received a further amount of $209,403.49 that was set aside to fund the Town F Development project. I find that after the transfer to the husband of the H Property the wife continued to make mortgage payments on that part of the mortgage that had not been discharged. The husband then made mortgage payments against the loan taken out to purchase H Property and retained the rent. I take into account the fact that the wife continued to make mortgage payments on that part of the H Property apartment mortgage that had not been discharged.
Early 2011 to mid-2012
It is common ground that both parties lived in the J Street property from early 2010. The husband claimed he paid the mortgage on the J Street property from late 2010 until early 2011. The wife disputes that. She said the parties separated when she and her children moved out of the J Street property during early 2011. She considered herself separated from the husband from early 2011 to mid-2012. She rented a property for 12 months and leased the J Street property.
The husband disputed that the parties were separated. He said he moved into the rental property with the wife and the parties continued to live together and he paid the rent. The wife disputed that. He said the wife did not pay the mortgage on the J Street home between September and December 2011 but rented out the property for $500 per week between late 2011 and late 2012. He paid the shortfall on the mortgage repayments.
It is difficult to reconcile the parties differing accounts. Mr Y recorded that the husband made loan repayments on the J Street of $41,800 and the wife $30,219. I accept those payments were made however it remains unclear for what period the payments were made. The J Street property was unencumbered initially so no mortgage payments were required. I accept however that the husband made a financial contribution towards the loan repayments for the J Street property.
The husband said he continued to make financial contributions in 2011 towards the parties’ household. To support that contention, he produced one page of a bank statement dated October 2011 but produced no other bank accounts. Annexure K to his affidavit covered the period 12 October 2011 to 11 November 2011. He was cross examined about the October 2011 bank statement. Reference was made to an entry “Apple iTunes purchases made by [Ms Tavener]” on the statement and it was suggested that the entry was false as the wife did not have iTunes at that time. The husband responded “okay.” It was put to the husband that the reference to “[…] Dental” related to his daughter Ms HH who had braces inserted. When questioned about attributing that entry to the wife he agreed that she had private health insurance which she paid for herself. The wife gave evidence that she had 100% dental cover under XX Insurance. The husband subsequently agreed to withdraw his assertion about paying for the wife’s dental expenses on the basis that the transactions were for the benefit of his own daughter Ms HH. With respect to his claim that he paid the wife’s ongoing expenses or expenses for her children he said “they were in a ‘relationship’ and he did not feel the need to keep invoices or receipts that may have come to the wife not himself.”
During this period the parties discussed a number of joint financial ventures and became co‑borrowers. The husband made contributions towards the J Street mortgage and paid rent. I am not satisfied he contributed to the wife’s ongoing expenses. I accept he moved into the rental with the wife. I reject the wife’s evidence that the parties separated between early 2011 and mid-2012. I am satisfied the parties de facto relationship continued during this period.
Town F development
According to the wife in 2011 she was invited by Mr TT to participate in a property development in Town F, Queensland. The husband said Mr TT who had an interest in UU Company as the developer of the complex, drew up the Unit Trust Deeds. Two units were acquired and purchased through two separate Unit Trusts namely E1 Property Trust and E2 Property Trust. The wife claims she was appointed as Trustee for each Unit Trust and held “100 units in each Trust.” Her evidence is inaccurate and inconsistent with the E2 Property Unit Trust Deed dated 15 December 2011[17] which records that the husband owns 99 of 100 units in E1 Street, Town F Qld and the wife owns 1 of 100 units. The E1 Property Unit Trust[18] records that the wife owns 1 of 1 unit in E1 Street, Town F Qld. I find the properties are owned in accordance with the Trust Deeds.
[17] Husband’s trial affidavit filed 21 February 2023 Annexure AF2 and AF1
[18] Husband’s trial affidavit filed 21 February 2023 Annexure AF2 and AF1
The wife said the loan taken for the Town F units was drawn down to $205,000 with the loan for each property being $184,000.[19] She said the Trust Deeds were written up to state that the husband was to pay for his units in the Trusts if he decided to be a unit holder. He has not made any payments towards that purchase.
[19] Wife’s trial affidavit filed 18 May 2023 [103 – 104]
According to the husband the Town F Units were purchased for nearly $200,000 each. He annexed to his affidavit a settlement statement the contract price being nearly $200,000.[20] The husband said the parties discussed the Town F development around the time he purchased the H Property apartment. The wife told him she wanted to go ahead with the investment of properties in Town F and “the extra money can be put away for this.” The husband said he was told it was a good investment because the properties had the benefit of a NRAS grant. Mr TT said “These units are for low income people to live in. There is a government scheme available called the National Rental Affordability Scheme (“NRAS”). The scheme will give you a grant of about $10,000 p.a. for each unit to assist you with the cost of your investment. It’s a great investment.” I accept the parties discussed the purchase of the Town F units and both agreed they would invest in that project.
[20] Husband’s trial affidavit filed 21 February 2023 Annexure AG
E1 Street, Town F
Mr Y in his report observed that E1 Street, Town F was purchased by the wife as Trustee for the E1 Property Unit Trust[21] in 2014 for nearly $200,000 including a deposit of nearly $20,000. The E1 Property Unit Trust[22] records that the wife owns 1 of 1 unit in E Street, Town F Qld. He noted he had not been able to locate the deposit for that property in any bank statements. The husband had represented that $120,000 was drawn down on the NAB loan account #...28 on 23 November 2012 and of that amount $40,000 was recorded as “[Town F] Deposit to start building [E1 and E2] units.” Mr Y observed that no independent documentary evidence was provided to confirm those funds were contributed as a deposit on the E1 Street property.
[21] Husband’s trial affidavit filed 21 February 2023 Annexure AF2 and AF1
[22] Husband’s trial affidavit filed 21 February 2023 Annexure AF2 and AF1
The purchase of the E1 Street property settled in 2014 when the sum of $174,248.35 was paid. The relevant NAB mortgage account is in the name of Ms Tavener atf E1 Property Unit Trust account number …05.[23] I reject the husband’s evidence and am satisfied that the wife as Trustee for the E1 Property Unit Trust funded the purchase of E1 Street. She made loan repayments of $67,031 towards E1 Street.[24]
[23] Item 16 in the Balance Sheet (Exhibit C2) records NAB …05 as Mortgage Town F E2 Street
[24] Mr Y’s Forensic Accounting Report 12 October 2023 [6.2]
E2 Street, Town F
Mr Y observed in his report that E2 Street, Town F was purchased by the wife as Trustee for the E2 Property Unit Trust[25] in 2014 for nearly $200,000 including a deposit of nearly $20,000. The E2 Property Unit Trust[26] records that the husband owns 99 of 100 units in E2 Street, Town F Qld. He observed that he had not been able to locate the deposit in any bank statements. The husband had represented that of the $120,000 drawn down on the NAB account #...28 on 23 November 2012 $40,000 was recorded as “[Town F] Deposit to start building [E1 and E2] units.” No independent documentary evidence was provided to confirm those funds were contributed as a deposit on the E2 Street property.
[25] Husband’s trial affidavit filed 21 February 2023 Annexure AF2 and AF1
[26] Husband’s trial affidavit filed 21 February 2023 Annexure AF2 and AF1
The purchase of the E2 Street property settled in 2014 when the sum of $174,248.35 was paid. The relevant NAB mortgage account is in the name of Ms Tavener at E1 Property Unit Trust account number …84.[27] I am satisfied that the wife as Trustee for the E2 Property Unit Trust funded the purchase of E2 Street. The wife made loan repayments of $64,960 towards E2 Street. I am satisfied that the husband made little to no contribution towards the Town F Units save that he made Council rate payments of $25,561 while the wife paid $18,915. Against those financial contributions he received a substantial tax benefit through the NRAS grant system.
[27] Item 15 in the Balance Sheet (Exhibit C2) records NAB 1384 as Mortgage Town F E1 Street
In cross examination the husband agreed that he received under the NRAS scheme for the Town F units[28] $82,610 between 2015 and 2020. He said he had not made a claim for the ensuing 4 years when he would likely receive $64,000 and said “[Ms Tavener] can claim it.” His evidence was inconsistent with his affidavit evidence wherein he claimed that in 2021 he transferred his NRAS refund to the wife. He said he paid the rates and “strata levies.” When cross examined about paying the strata levies he said he was meant to pay the body corporate fees but defaulted in the amount of $43,000. The wife was required to pay that debt.
[28] Mr Ys Forensic Accounting Report 12 October 2023 [35 (6.12)]
I find that the wife almost exclusively funded the Town F development while the husband received a substantial tax benefit. The wife’s financial contributions to the Town F Units far exceeds the husband’s financial contribution. I note that the NRAS grant scheme ends in 2024.
The parties agree the outstanding balance on the loans taken out for the Town F development exceed the market value for each Town F Unit by about ($70,000). The wife has continued to pay all outgoings for the Town F Units including body corporate levies and utilities. The husband claims the return on the Town F investments has been poor. The levies and rates are expensive. The rent of $184 per week on each unit does not cover the repayments on outgoings. The units have lost value and are now only worth $130,000 each. The strata levies are $7000 p.a. for each unit. He said he did not wish to retain any interest in either of the Town F properties.
Unauthorised withdrawal
The husband was cross examined at length about withdrawal he made from the funds of $209,000 that had been set aside to pay expenses in relation to the Town F development. The wife said she had investigated the reference “INTR” which appeared on her bank statements and was advised that the reference was to “internet transfers of funds.” She claimed she did not use the internet to transfer funds and alleged the husband made multiple withdrawals from the account. The husband denied that the wife did not use electronic banking. He said he had permission to make the withdrawal.
Counsel for the wife suggested that none of the funds withdrawn by the husband were for the benefit of A Street and that money was not spent on air conditioning as he claimed but rather the husband transferred funds into his personal bank account between May 2012 and March 2013 of $58,000. Further he transferred $17,000 to his company account YY Company. It is not disputed that the husband transferred funds. The husband was asked why the money was transferred into his account and not sent to the goods provider. He said some items were requested by email to Mr ZZ and then funds released to pay for those items.
The husband was asked about an email dated 25 November 2014 which he sent which referred to moneys being extracted from the account set aside for the Town F development ($209,000). The email stated: “Out of the 185K, 140K go direct to [Town B] house, $22,000 for my tax now, will pay back from warehouse funds. Leave $11,000 to decide on the remainder.” It was suggested that the email established that the husband was taking moneys out of this account for his own personal benefit. He said he would not have done that without the wife’s approval. He agreed that the Town F development was delayed for some time and although they discussed this development in 2011 it did not get going until 2014.
Between early 2011 and mid-2012 the parties’ relationship was ongoing and they continued to have a significant financial involvement with each other. I do not accept that the husband withdrew funds without the wife’s knowledge or consent during this period. The wife said she did not look at her bank accounts. I am satisfied she had no cause to check the bank statements as their relationship was ongoing. Around this time they obtained joint mortgages to fund the purchase and construction of A Street a comfortable family home. I accept that in November 2014 the husband withdrew $22,000 to pay his tax. He advised the wife of his intention to do so. I am satisfied this was around the time the parties separated.
A Street
The husband said in late 2011 the parties approached the owners of A Street and Lot C, A Street (Mr BA and Ms BC) who had blocks of land for sale. They accepted an offer to purchase both blocks from Mr BA and Ms BC paying $150,000 for each block. The husband said the vendor agreed to delay settlement on one of the blocks (Lot C) for a period of 2 years. He said he funded “the [Town B] block of land for $150,000 and build costs of $750,000.”[29] He said he raised a loan to purchase Lot T through K Pty Ltd. Mr TT acted for both parties on the purchase and according to the husband each Lot was placed in the wife’s sole name at her request and separate contracts were drawn for Lot C and Lot T. The husband said he transferred $25,000 in late 2011 from K Pty Ltd to pay a $15,000 deposit on Lot T and $10,000 deposit on Lot C. He said K Pty Ltd borrowed $216,000 from NAB to fund the purchase of Lot T. He paid the stamp duty and legal costs for Lot C of $3760 and for Lot T $9179.45.[30]
[29] Husband’s trial affidavit filed 21 February 2023 [10]
[30] Husband’s trial affidavit filed 21 February 2023 [52]
The husband claimed the parties borrowed $1,000,000 to fund the purchase of the blocks, improvements, fixtures and fittings, earthworks, landscaping, concrete, decking, driveway and other works. He said they borrowed $300,000 from the K Pty Ltd NAB loan account and $560,000 from NAB which was originally $400,000 and in early 2012 $129,000 which was an increase on the NAB loan account #...47. He said the wife was the main decision maker in relation to the build and he was responsible for organising payments to BD Company and subcontractors. When payments were due the wife would contact him and he would contact the bank. He said the wife required numerous variations to the build which added to the cost.
In mid-2012 the house was ready to occupy and they owed BD Company $125,000. He said G Pty Ltd advanced him a temporary loan of $125,000 to pay the final instalment. In late 2012 the G Pty Ltd loan of $125,000 was repaid by increasing the mortgage account from $440,000 to $660,000.
He said when they moved into the house it was not finished and they continued to work on the home for another 18 months. They installed a workspace at a cost of $35,000, a shed and a mezzanine floor. They completed landscaping, a large lawn and full irrigation system. The husband annexed to his affidavit at Annexure Y expenditure undertaken on the property between mid and late 2012. The husband said the K Pty Ltd NAB loan account was overdrawn to $43,591.63 between early 2013 and early 2014. He was able to make that payment following the sale of G Pty Ltd. The husband claimed further work on the property was undertaken in consultation with the wife. He claimed the funds were coming out of K Pty Ltd. Counsel asked him to point to any expenditure including for pumps, cement, driveways and the like. He said, “It would be difficult to point individual items out.” Counsel suggested it was not difficult at all as the husband had multiple properties and knew how to claim deductions and no doubt the husband maintained careful records. The husband referred to Annexure X1 in his affidavit where items added up to $952,000. Counsel suggested that the document did not evidence any payments for things like decking, plumbing and other expenditure the husband claimed. The husband agreed he had ordered a shed and Counsel suggested “Yes. You had the shed installed, and then you reimbursed yourself for the cost of that shed, didn't you?‑‑‑How – how do I reimburse for the costs? Counsel suggested he took the money out of the loan account (#[…]28).” The husband did not respond other than to claim that they both used the shed. I reject the husband’s evidence regarding his claim that additional funding was spent on A Street in the absence of independent documentary evidence such as receipts, invoices or credit card statements.
The wife deposed that in late 2011 she purchased Lots C and T, Town B. She said in early 2012 she obtained two loans from the NAB in the amount of $660,000 NAB account #...47 and $440,000 NAB account #...28. She was able to discharge the balance remaining on the loan for the H Property apartment which had only partially been repaid. She agreed to allow the husband to be a joint borrower for the construction loan of $440,000 to build a home on A Street. She said this was done to secure the loan owed to her from the shortfall in sale proceeds for the H Property apartment and she was to refinance the A Street property into her own name once those monies had been repaid. The husband was recorded as a co-borrower on the mortgage for the build however she claimed he did not make any repayments on the $440,000 mortgage and had no involvement in finding the land, securing the builder, choosing the building type nor any involvement in the fit out and facilities. The construction took place prior to mid-2012.
On completion in mid-2012 the wife said they resumed their relationship and remained living together in the Town B property until the end of 2014. I am satisfied that contrary to the wife’s evidence the parties de facto relationship continued from early 2011 to mid-2012. The wife said the costs of building the home on A Street was $473,909 and that amount was paid to the builder. There were additional drawdowns that the wife said she did not make and those drawdowns were made by the husband who had internet access to the loan account.[31]
[31] Wife’s trial affidavit 18 May 2023 [98]
The husband deposed that in early 2012 the wife refinanced the J Street property with NAB. She borrowed $659,693.68 from NAB and repaid BE Bank $529,329.59. The husband said the remaining balance of approximately $130,000 was applied towards the building costs on A Street. Both parties agree that in late 2012 the wife sold J Street for $730,000 and paid out the NAB loan of $660,742. At that stage the wife had not received any funds from the husband from the sale of G Pty Ltd. She claims the husband told her the sale had fallen through.
Mr Y in his report observed that A Street was purchased for $150,000 in 2011. A loan was taken out with NAB #...76 for $216,000.[32] On 31 October 2011 $25,000 was transferred from NAB #...79. The husband claims $15,000 was used as a deposit for A Street, $5000 used as a deposit for Lot C and $5000 used for stamp duty on A Street. The $25,000 was sourced from additional funds received on the drawdown of NAB #...76. Funds totalling $216,000 were drawn down from NAB #...76 (the husband’s facility account) and transferred to NAB #...79 the balance of $135,137.15 was paid at settlement. Mr Y concluded that the purchase of the Lot T at A Street was funded entirely by NAB loan account #...76.[33] The parties’ relationship was ongoing at this time. Mr Y observed that the husband contributed $400,720 in loan repayments for A Street while the wife contributed $223,766. Mr Y[34] clarified the husband’s contributions as follows:
[32] Account #...76 is identified as Facility Rate loan
[33] Mr Y’s Forensic Accounting Report 12 October 2023 [5.14 – 5.19]
[34] Mr Y’s Forensic Accounting Report 12 October 2023 [6.2 notes 12]
The husband contributed $50,2017 to the repayment of mortgage #...28 from K Pty Ltd between March 2013 and November 2017 - $25,218.35 according to the wife relates to the payment of “board.” I accept the parties were separated from November 2014;
The husband contributed $76,447 to the wife’s account #...08 between May 2012 and January 2015 from which loan repayments were made on #...28 however he drew down $58,352.69 from #...28 transferring those funds to his own personal account – his net contribution was $18,094.45;
The husband paid $199,890.90 to #...28 from K Pty Ltd on 27 January 2015;
On 26 August 2020 $157,030.58 was paid to #...28 from the net proceeds of sale of Lot C. The husband had lent the wife $145,000 to assist in the purchase of Lot C. He was repaid that amount and then $145,000 was contributed towards #...28
I am satisfied both parties made a financial contribution towards A Street.
Lot C, A Street
Lot C, A Street was purchased for $150,000. A deposit of $10,000 was required and was paid prior to settlement. The deposit came from NAB account #...79 sourced from NAB drawdown facility #...76. The husband said the parties were unable to settle on Lot C and agreed to pay $1000 per month to Mr BA & Ms BC to cover the interest payments. The husband claimed he paid those amounts from November 2011 to June 2014 a total of $24,000. Mr Y observed that from January 2012 to October 2013 payments were made from NAB account number #...53 (the husband’s personal account) of $1000 identified as “land interest [Lot C, A Street]” a total amount of $14,500 being paid. I accept the husband contributed $14,500 in interest payments. I find he exaggerated his contribution claiming he paid $24,000.
Lot C settled in 2013 when the balance of $141,077.78 was paid. In late 2013 $609,792.48 was deposited into NAB account #...79 from the sale of K Pty Ltd’s interest in G Pty Ltd. From these funds $145,000 was paid from NAB account #...79 in late 2013 to settle Lot C. I am satisfied funds from K Pty Ltd were used to fund the purchase of Lot C.
Sale of J Street
In 2013 the wife sold J Street for $730,000 including a deposit of $73,000. She repaid the NAB loan account #...47 which was in joint names in the amount of $660,742.18 and repaid NAB loan account #...28 which was in joint names in the amount of $44,692.13 and otherwise discharged expenses and rates. I am satisfied that the wife made a substantial financial contribution in applying the proceeds of sale of the J Street property towards the property of the parties. I am satisfied that the J Street property introduced by the wife created a springboard for the parties to increase their wealth[35] particularly in circumstances where the husband had little equity in O Street and though he earned income of about $100,000 p.a. his income was substantially committed to mortgage repayments, the vendor loan with respect to his interest in G Pty Ltd and supporting his children.
[35] See Pierce v Pierce [1998] FamCA 74 where the Full Court discussed the approach to weighing initial contributions against other contributions made by the parties over the course of a relationship
M Street
The wife deposed that in 2013 she purchased a home in her sole name for her sister to live in at M Street, Town B for $250,000 with the loan 100% financed with NAB jointly with the husband. Her father gifted her $10,000 towards legal costs for the purchase. She said the husband made no repayments on the mortgage. When cross examined she agreed the property was in fact purchased in the following month in 2013 for $245,000 and the whole amount was borrowed. She agreed her sister paid the husband $200 per week and the husband paid $250 per week towards that mortgage out of different funds “not all out of his own funds.” She agreed he continued to pay the balance of the mortgage less than $50 per week but only until 2016. She denied he paid $250 a week until the property was sold in 2018.
In his report Mr Y observed that the wife purchased the M Street property obtaining 100% finance from NAB loan account #...64 in 2013. The NAB account #...64 is in joint names. Mr Y observed the wife made loan repayments of $8769 and the husband $2923. I am satisfied that the husband received the rent of $200 per week.
G Pty Ltd
The husband said his work at G Pty Ltd became stressful when BF Company bought out G Pty Ltd. That process took 12 months from 2012 to 2013. He travelled to America to close the business warehouse in America and deal with staff employed there.[36]
[36] Husband’s trial affidavit filed 21 February 2023 [28 - 29]
G Pty Ltd was sold for $3,300,000. K Pty Ltd held 24.9% interest in the business. K Pty Ltd received net proceeds of sale of $775,717.10 in 2013 being $609,792.48 which was deposited into the NAB account and $165,929.62 in 2014.[37] According to the husband the proceeds of sale were applied as follows:
[37] Husband’s trial affidavit filed 21 February 2023 [77 – 78]
(1)Lot C, A Street The husband deposed he withdrew $145,000 from the K Pty Ltd NAB account to fund final settlement. He said he paid the rates on Lot C while the parties were living together.
(2)BG Company $50,731
(3)Holiday $8,000
(4)Time Share $12,000 (purchased in joint names)
(5)NAB credit card $30,000
(6)Term deposit $300,000 (6 February 2014)
(7)Purchases for house $103,893
(8)Equipment $18,100
(9)Wife’s medical procedure $11,000 (1 March 2014)
The husband said the tax for K Pty Ltd for 2014 was assessed at $107,108.40 and the company did not have sufficient funds to pay the tax as those funds were used to pay the final settlement on Lot C. He said he arranged a personal loan through NAB to pay the tax. He stopped working in 2016 and drew down on the NAB loan to pay bills and living expenses and pay out his credit card.
G Pty Ltd also owned the premises on which it operated being N Street, City D. When the business was sold the premises were leased to the new owners. The husband retained a 24.9% interest in the premises.
The husband said he last lodged a tax return for K Pty Ltd in 2015 and the company was deregistered in late 2020. He indicated he accepted sole liability for any tax owing with respect to the company K Pty Ltd. The husband did not produce any recent financial statements for the company K Pty Ltd.
In 2013 and 2014 K Pty Ltd invested $60,000 in US stock through BG Company. The husband said that company went into liquidation and his investment was lost.
The wife said she is now aware that in 2013 the husband sold his ¼ interest in G Pty Ltd and retained ¼ interest in the commercial buildings which continued to operate. At the time of filing her affidavit in May 2023 she was unaware how much he received from the net proceeds of sale of that interest.
From 2013 the husband said he became an employee of BF Company when G Pty Ltd was sold. In 2016 he was made redundant and paid a redundancy payment of $96,307.
When cross examined about his interest in G Pty Ltd the husband agreed that G Pty Ltd was sold to an American company BF Company for over $6 million. He agreed in addition to the sale of the business some properties in N Street were sold and he held a 24.9% share in those properties. He received $729,000 for his share from the sale of the properties. After the sale of the business the new owner continued to lease the N Street properties. Counsel suggested he received two sets of income from the combined exercise totalling $1.536 million. He agreed he received close to that figure. He agreed that most of those funds went into the K Pty Ltd accounts and then K Pty Ltd lent it out again. Counsel suggested that K Pty Ltd is a significant company in terms of understanding of finances, because so much money goes through it. He agreed. Counsel suggested that the husband was using K Pty Ltd as a vehicle to insert money and withdraw money and was engaging in financial engineering. He disputed that.
K Pty Ltd
The husband was the sole director and sole shareholder of K Pty Ltd as Trustee for the Daultrey Property Unit Trust which was part of the arrangement holding the husband’s interest in G Pty Ltd. He said K Pty Ltd received $1.568 million following the sale of G Pty Ltd. In 2015 the K Pty Ltd Balance Sheet indicated it was owed $729,885 from N Street Properties Pty Ltd (N Street).
In 2014 K Pty Ltd had a term deposit of $289,367. That amount does not appear on the 2015 K Pty Ltd Balance Sheet and no explanation has been forthcoming what happened to those funds.
The husband said BF Company agreed to lease the N Street properties to the purchaser of G Pty Ltd. K Pty Ltd owns ¼ interest of the lessor company. The registered lease provided for a 10 year term (to 2023) and annual rental income of $240,000 p.a. plus CPI interest.
Separation 2014
The wife said the parties agreed to separate on a final basis in November 2014 and Mr TT negotiated the parties’ separation agreement.[38] She said the husband moved into the formal lounge area of the A Street home as a boarder and slept in that room. He was renting out his property at O Street which was expected to become vacant in late 2015. She said they entered into a boarding agreement. Counsel suggested their relationship was over because the wife had caught him cheating on her and after that he agreed to pay board and told her “I can’t do anything until I sell [O Street] and [O Street] is leased”. The husband denied that and denied the parties separated under one roof in late 2014. I am satisfied that the parties separated under one roof from November 2014. By that stage the husband had received a substantial sum from his interest in G Pty Ltd. I am satisfied he did not disclose the details of that payment to the wife on the basis they were separated.
[38] Wife’s trial affidavit filed 18 May 2023 [12]
Repayment of shortfall on H Property apartment
In 2015 $199,890.90 was paid from K Pty Ltd into the NAB account #...28.[39] It was put to the husband that “the amount of $199,000 represented the difference between what he originally paid the wife and what the property was worth.” The husband said “That wasn’t in my mind at the time. Our objective at that time was to try and pay as much money off [Town B] and [A Street] to bring it down to fully owned by the person who owns the property. So that’s – whether that counteracts that or not, we were in a relationship.” He said he could not recall whether they discussed the shortfall with Mr TT. I am satisfied that the husband agreed to pay the shortfall because the parties were separated.
[39] Mr Y noted he had included the $199,890.90 amount as a loan repayment by the husband when assessing contributions
The husband was asked whether the payment to the wife had anything to do with the debt (or shortfall) on the H Property apartment. He said he gave the wife those funds to pay down the loan on the home because they were in a relationship living together. The wife deposed that she required the husband to repay her the shortfall on the sale of the H Property apartment as they were separated and on the basis that she would then allow him to remain living in the Town B property as a boarder. He claimed the payment was made because the parties were still living together at that time. I reject that. I accept the wife’s evidence and conclude the payment was made by the husband to reimburse the wife for the shortfall in the contract price regarding the purchase of the H Property apartment and because the parties had separated. I reject the husband’s claim that the parties announced their engagement in late 2014.
The husband left the A Street property permanently in 2016. None of the funds received by the husband from the sale of his interest in G Pty Ltd other than the $199,890.90 were contributed by the husband. However I am satisfied that the sum of $199,890 should be construed as a financial contribution by the wife based on my finding that the husband agreed and later paid the shortfall on the sale to him of the H Property apartment.
O Street
The husband sold his O Street property in late 2015 for over $600,000. That evidence is consistent with the wife’s claim that the husband told her he expected the lease on that property to end in about late 2015 and she agreed he could remain in the property as a boarder and he would move out then. The husband’s loan accounts of ($345,813.74) and ($62,494.41) were paid out at settlement. The amount of $116,956.07 was paid into the husband’s NAB account and the real estate agent was paid $17,077.50. He said he paid $20,000 off his credit card and transferred $60,000 to his savings account. He agreed and I find that none of the net proceeds from the sale of O Street went towards the properties of the parties.
Sale of H Property apartment in 2017
The husband agreed his sold the H Property apartment in 2017 and it was a “forced sale.” He said he could not afford to keep the property as the rent had gone down from where it was:
way down to $500 the rent in Brisbane. I was struggling to pay the mortgage on it, yes, and I was struggling to pay the body corporates. It was sold in 2016. He said by that stage he had accumulated $40,000 in body corporate fees and [K Pty Ltd] was sent a legal letter from [BH Lawyers] in 2017 saying $43,000 was owed.
Counsel suggested that he intentionally sold the H Property apartment at a loss for tax purposes. He disagreed. He agreed however that he had already received a considerable sum of money from the sale of G Pty Ltd. He said that was in 2017 then changed his evidence and said he received those funds in 2013.
In his report Mr Y observed that the H Property apartment was sold in mid-2017 for over $500,000 including a deposit of $25,000. The balance received by the husband on settlement was $495,292.54. Mr Y noted that the husband represented that the funds from the sale of the H Property apartment paid out the NAB account #...99 and “the second NAB loan account [#...79] was transferred to [A Street] the balance being $300,000.” Mr Y observed:
the original mortgage for the purchase of the [H Property] apartment was obtained by [K Pty Ltd] as trustee for the [Daultrey Property Unit Trust]. It is my expectation that the NAB [#...99] loan was also in the name of the [Daultrey Property Unit Trust] however I am not able to confirm the balance of the loan that was paid out on settlement.[40]
Mr Y observed he had not been able to locate the $25,000 deposit in the bank statements made available to him. Nor have statements for the account NAB #...99 been produced purportedly where $442,527.66 was paid into. The husband’s evidence was that he had obtained a loan from ANZ but no bank statement had ever been produced. The sum of $48,656.76 was paid with respect to outstanding body corporate levies for the H Property apartment. The evidence regarding this transaction remains completely unsatisfactory save that I accept the H Property apartment sold. I am not satisfied that any of the net proceeds of sale from the H Property apartment were contributed by the husband to the parties’ properties.
[40] Mr Y’s report 12 October 2023 [5.52 (c)]
Sale of M Street
In late 2018 the property at M Street was sold for approximately $300,000 including a deposit of $29,000. The balance available on settlement was $261,315.53. The NAB loan account #...64 in joint names of $250,778.12 was discharged and $10,258.20 was paid into NAB account #...28 (a joint account). The deposit was disbursed to necessary expenses however a balance of $9538.15 held in the Trust account of the conveyancer has not been accounted for. I am satisfied that the wife made a greater financial contribution with respect to the loan repayments.
Sale of N Street, City D
The N Street property was sold in early 2020 for over $3,500,000 including a deposit of $200,000. The husband owned 24.9% of the ordinary share capital in the N Street Properties Pty Limited. Mr Y observed that an amount of $788,733.92 was received by the husband. The husband received the sum of $484,778.92 into his NAB account #...79 (K Pty Ltd) in respect of a final repayment of initial capital. The sum of $298,800 was paid into NAB account #...49 (an account in the husband’s name). The husband said those funds were paid into an ANZ account on 4 May 2020. None of those funds were applied to any of the properties or assets owned either jointly or severally by the parties. He said he repaid the NAB credit card balance of $30,000 claiming the parties used this card during their relationship between February 2017 and May 2020. On either party’s version the parties were separated.
Sale of Lot C
In mid-2020 Lot C was sold for over $200,000. A deposit of $24,000 was paid and after adjustments the balance received on settlement (plus the deposit) was $240,186.38. The joint loan NAB account #...28 was paid out in the amount of $157,030.58. That loan was used to fund the purchase and build of A Street. Mr Y concluded and I accept that of the funds paid to NAB #...28 on settlement of Lot C $145,000 was a contribution by the husband and those funds ($145,000) were returned to the husband and then deposited by the husband into NAB#...28.
An amount of $34,884.64 was paid to NAB account #...05 (home loan in the name of the wife for one of the Town F units) and $34,889.82 was paid to NAB account #...84 (home loan in the name of the wife for the other of the Town F units). I am satisfied that the sale of Lot C discharged the original loan of $145,000.
Forensic Accounting Report
Mr Y set out his conclusion regarding financial contributions made by the parties at (6.2). I place limited weight on the expert’s assessment of contributions for the following reasons though I stress I have no criticism of Mr Y given he simply complied with the request of the parties to prepare a forensic accounting report. Regarding contributions to real property Mr Y concluded that the husband contributed $94,700 and the wife $418,042. None of the properties were valued at market value but rather the purchase price of those properties was adopted. Mr Y frankly conceded he was not a registered valuer of real property.
Regarding loan repayments from 2008 to 2023 Mr Y assessed the husband’s financial contribution at ($832,528) and the wife’s contribution at ($394,745). That calculation fails to factor into account that between 2008 and 2010 the J Street property was unencumbered obviating any necessity to make mortgage payments and providing accommodation “rent free” to the parties. The assessment does not delineate between contributions within the relationship and post separation contributions. It is unclear whether the rents received from leasing the real properties are offset against loan repayments. In any event the financial documents provided by the parties was incomplete.
The calculation of loan repayments includes on the husband’s side a repayment of $199,890 for the purchase of the H Property apartment. The assessment of loan repayments for the H Property apartment appears to be a snapshot of the period December 2011 to July 2017. There is no calculation of loan repayments made by the wife between 2009 and late 2010 when the property was sold nor any assessment of the loan repayments made by the wife that continued after the property was sold to the husband in circumstances where she had only partially repaid the mortgage on the H Property apartment.
In his report Mr Y indicated there had been significant omissions in the provision of financial information by the parties. He observed the parties had failed to produce:
(a)Financial statements and income tax returns for K Pty Ltd for the years 30 June 2016 to 2021;
(b)Financial statements and income tax returns for the E1 Property Unit Trust and E2 Property Unit Trust for the years ending June 2014 to 2022;
(c)Financial statements and income tax returns for the Daultrey Property Unit Trust for the years ending 30 June 2016 to 2021;
(d)Financial information for the business trading as BJ Company;
(e)NAB #...99 bank statement for the entire period of opening;
(f)ANZ loan account used to fund the purchase of the H Property apartment in 2010;
(g)ATO Notice of Assessment for the husband for the years ending 30 June 2021 to 2022;
(h)BE Bank #...46 bank statements for the entire period of opening; and
(i)Bank statements for other bank accounts assumed to be in the name of K Pty Ltd.[41]
[41] Mr Y’s report 12 October 2023 [6.9]
In addition Mr Y identified transactions exceeding $25,000[42] where he was not able to determine where the funds were transferred to and from or what the payment was in respect to:
(a)NAB account #...79 Withdrawal of $29,000 internet transfer pay down card (November 2011)
(b)NAB account #...79 Deposit of $32,142.90 funds from Mr Daultrey and Ms Tavener (January 2012);
(c)NAB account #...53 Withdrawal of $79,888.81 authority transfer (July 2012);
(d)NAB account #...79 Deposit of $89,476.61 proceeds from Term Deposit (January 2015)
[42] Mr Y’s report 12 October 2023 [6.10
Mr Y identified that between February 2020 and February 2021 the husband had withdrawn from NAB accounts #...79, …61 and …32 a total of $527,885.
Additional matters
The husband claimed he paid for the wife’s overseas trips and stated “she went in 2014 and 2015 to [an industry] show [overseas].” Counsel suggested that on his bank statements there was not a single entry that he ever paid anything towards the wife’s overseas trips. He said “If you look at my bank accounts you will probably see some movement around that time. She went to them approximately September, October of those two years.” No evidence was adduced.
The husband claimed he paid $14,000 “for the rent and to fit out a shop front at [BK Shopping Centre].” It is unclear when this allegedly occurred. Counsel for the wife suggested that was a complete falsehood. The husband said “Substantial money came out of my account at that time and I have no evidence of helping her except for money leaving my account. I don’t know how she could have done it without some – some assistance from somewhere.” He denied he would make payments in cash. He said he would write a cheque or EFT transfer. Counsel suggested that the only contribution he made to the shopfront was to install a power point and an electronic sign and she paid for that. He said “Well, maybe she did that bit, but the lighting tracks in the building and the great big square boxes of lights came from somewhere.”
The husband claimed he paid towards the wife’s legal fees. It is unclear when this is alleged to have occurred. Again no evidence was adduced of any invoices or receipts. Counsel for the wife suggested the husband’s evidence was false. He said “I don’t know what account it came out of. We were in a relationship. She had a custody dispute with her ex-husband.” Counsel suggested that the account ledger from BL Lawyers shows two payments totalling $10,000 and in handwriting it is recorded Mr BM. The wife said her father paid those legal fees. The husband disagreed. The husband accepted he could not show any bank statement where he had paid $7000 or $8000 for legal fees for the wife (Exhibit R1). The wife said her father paid those legal fees not the applicant. When cross examined on this issue the husband asked if he could “explain a mistake he made about the payment of the wife’s legal fees.” He said he made a payment plan with BL Lawyers to pay them over a period of time “so when I find the bank statements you will see payments coming off to [BL Lawyers] over a period of time, not in two payments.” I reject the husband’s evidence.
The husband asserts that in 2012 or 2013 he took out a loan for his son Mr KK for the purchase of a property in Suburb BN. He has been solely responsible for repayments on the loan which originally was for $75,000. The balance is $59,000.
The wife agreed that she declared Nil income for the years ending 2008 and that continued until 2018. She was asked about her financial statement where she declared an income from her business of $1164 per week. She said she was engaged as an allied health worker. She looked after clients around the area and would take clients to appointments. Sometimes they come to her home. She said she receives lump sum grants funded by a government agency. She bills the agency directly and they pay the invoices. She was asked about her tax return for the year ending 2021 and the item “business income / loss $317,291.” She agreed she received those funds from the agency. She agreed she did not include any schedule for plant and equipment or assets that may have been depreciated which she used in her business. She said she did not have any particular equipment to conduct her business.
She agreed she obtained a vehicle. She said this was an instant tax write-off and she purchased Motor Vehicle 4 that cost her over $130,000. When asked where the vehicle was she said “at my place.” She was asked how she financed the vehicle and said she used her income of $317,000 she received from the government agency.
She was asked about the calculation of her business expenses of $151,233. She said she had 12 staff at that time. None of those staff were identified. She said she operated as a sole trader and the vehicle was registered in her name. She also owned Motor Vehicle 7 worth $2000 which was with her son Mr MM in Queensland. She agreed she made no mention of Motor Vehicle 4 in her financial statement.
For the year ending 2022 the wife declared business income of $207,000 and expenses of $183,000. She had not prepared any financial statements she said, “it’s just a lot of receipts.” Her staff were subcontractors not PAYE employees. None of her staff were identified and she produced no payroll records or any evidence of payments made to “staff.” She said she had an injury and now had only 2 clients and she now works 2 and 1/2 days a week. I found the wife deliberately tried to downplay the fact that she had failed to disclose the details of her interest in the business for which she received substantial income and concluded she was being untruthful with respect to this issue and the staff she said she engaged.
The wife agreed the parties travelled to Queensland and a time share was purchased. This occurred in 2014. The time share was paid to BO Company and cost $30,000 which was paid by credit card. She said she was unaware that the husband had deposited $300,000 into a Term Deposit but discovered that through the litigation process when that was disclosed to her. She denied he paid $11,000 for an operation. She said that was covered by her private health insurance.
The wife was cross examined at length with respect to financial contributions towards A Street. She said the builder was paid $477,000. She denied that a further $400,000 was expended on the further construction of items associated with the house on the land. She disputed that the husband had spent a further million dollars on the home. She agreed a deposit of $20,800 was paid in November 2011 and $134,854 was paid in November 2011. In January 2012 $440,000 was borrowed. In March 2012 a further amount of $129,000 was used towards the build. In July 2012 a further loan of $80,000 was taken out. She said the loan of $80,000 had not been disclosed. Counsel suggested there was a further increase of the loan by $120,000 in December 2012. She denied that and said the entire amount went into G Pty Ltd. I do not accept the husband spent a further million dollars on A Street and reject his evidence.
The wife complained about the husband’s deliberately evasive financial dealings. She said he was using her name without her permission claiming she was depositing money into a loan account in his name. The deposits were not deposits made by her. She said a cheque was drawn from G Pty Ltd of $125,000 to pay for Lot C but that was paid back. When the $440,000 was drawn down it was in arrears of $32,000 because those funds were put into the husband’s #...79 account.
When cross examined the wife said she was unaware the husband sold O Street in late 2014. She was advised of that by the real estate agent and was told the sale occurred in 2015. Counsel said she was correct. She said she was unaware he had a term deposit of $75,000 or $116,956 in a NAB account (#...53).
Post separation 2014
The husband said in February 2016 he borrowed $145,000 for the purpose of paying a tax debt. He sought the wife be guarantor for that loan. Counsel for the wife suggested he made payments on that loan until November 2018 and then stopped. He agreed and said the wife took them over. He agreed the wife continued to make payments on that loan of $625 per month and she paid a total of $28,0000 towards his tax debt.
The wife said the loan for $145,000 was for the husband’s personal use however it was secured by a mortgage against Lot C and Lot T and security over other assets and a personal guarantee from the wife. She said she provided this guarantee based on advice at the time that the husband had taken out a short - term loan. She was told the $145,000 was necessary to meet the husband’s tax liability.[43] The wife said in 2018 she was forced to make loan repayments on that loan in excess of $15,000 when the loan had nothing to do with her. She was concerned the bank would sell Lot C so she made that payment. In 2020 the bank released the wife from her bank guarantee. I accept her evidence.
[43] Wife’s trial affidavit 18 May 2023 [99]
With respect to the husband’s $145,000 personal loan Mr Y noted that at [6.3]
The loan owing by [Ms Tavener] to [K Pty Ltd] was not on the balance sheet ‑ ‑ ‑‑ ‑ ‑ as at 30 June 2013. Accordingly, it would appear to be a loan that has been created during the year ended 30 June 2014. Accordingly, I am not able to conclude as to whether the loan owing by [Ms Tavener] to [K Pty Ltd] is genuine.
The husband said that he moved $145,000 from K Pty Ltd to pay Mr BA so they didn’t lose the block of land, and then a year later, when he borrowed the money to pay his tax he “sort of got returned his $145,000 back, essentially.” Counsel suggested that if the money was from K Pty Ltd it should be an account entry. He said those funds would have been spent over a period of time to develop the property. I reject the husband’s evidence and am not satisfied the loan was genuine.
The husband agreed that he did not put the proceeds from the sale of the H Property back into the relationship. He said “I feel like I – the proceeds paid out loans, so it's really hard to answer that question, but – I have just to say the evidence speaks for itself. So, it looks like I've put no money back in, I will have to say yes.” He agreed he rented out that property for 5 years for about $28,500 p.a. being a total of about $142,000. The wife disputed that the husband did not realise anything from the sale of the H Property apartment in 2017. She said:
the settlement sheet shows a blank space and $450,000. It doesn’t say where the $450,000 went and we’ve never had disclosed the accounts of that loan, so we don’t know what the loan amount was, considering it was, you know, over $150,000 in income. She said he has not accounted for the sale proceeds.”
The wife denied the electricity, NBN and telephone on A Street was in the husband’s name. She said the property was not insured. She agreed that when he left the property in late 2016 the husband left his Motor Vehicle 3 on the property. He claimed the vehicle 100% for tax purposes. She said she told him to collect the car. She didn’t have a licence. She agreed that her son took it for a drive and the car was damaged. The vehicle was not insured and the husband wrote the vehicle off in his tax return. She said it was not completely destroyed but was worth $25,000. She agreed that the husband wrote to her before the accident stating his payout figure was $44,000 and he had been offered $43,000 for the vehicle. She said she told him to come and collect the vehicle. She agreed she wrote “[Mr TT] said you need to factor in $200,000 in rent you received by residing at [J Street] and here why I pay the food, clothes, rates and power bills until the year before.” She said she told the husband to collect the car even though it is not mentioned in her letter.
With respect to the Town F properties she said in June 2022 the amount outstanding on the loans was $173,644 and in September 2023 the amount outstanding was $187,268. She has paid $9000 per property in body corporate levies and rates on top of $44,000 in arrears. She has spent about $80,000 on both accounts. She said the units were not on the market as “they are worth less than the current liabilities.” She did not agree that each party receive a unit and discharge the debt. She said she had invested $200,000 in those properties and wanted to retain the properties “because she didn’t even get that money back from [H Property] in time, she paid an extra $40,000 on top of interest that was charged on her [H Property] loan. In 10 years time the properties will probably break even but I’m not going to sell them at a loss. She wanted to retain both.” She said she had not benefitted from any tax advantage even though the units were in her name.
Counsel for the husband suggested that the wife could not afford to retain the units. She said she last made a payment towards the mortgages on the Town F properties in 2021 and 2022. She had not paid the mortgage for 12 months. She said “why should I keep paying and putting money into something when non‑disclosure, non‑disclosure and we kept getting trial dates put off? Why would I keep pouring money into it when I can’t claim the tax benefits because he’s claiming it? So, the bank is in agreeance that I stop paying that.
The wife has had the benefit of living in A Street since the husband left in 2016. He has paid rent since late 2016. In February 2018 he sought interim property orders for the sale of the Town B property. An interim hearing was conducted on 15 October 2019. Judge Neville delivered judgment on 11 March 2020 and made orders that the property at A Street, Town B for sale. Upon sale each party was to receive $200,000 from the net proceeds of sale with the remainder held in Trust. The Court ordered that the Town F Units be sold and following the sale any shortfall in the liabilities secured against the Town F Units be paid from monies held in Trust following the sale of A Street, Town B. The husband contends the wife did not comply with those orders and he filed a further three applications in a case seeking enforcement and compliance.
In early 2020 pursuant to Court orders Lot C was sold for $240,000 settling in mid-2020. In August 2020 the wife filed an application to stay the orders made in March 2020. Judge Neville ordered that the wife pay the husband $200,000. The wife paid that amount in two instalments of $130,000 and $70,000 on 28 October 2020 and A Street was removed from the market.
K Pty Ltd has been wound up. The husband agreed he had not produced any financial records or other document for BJ Company and no mention was made of that company in his personal tax returns. He said it was still trading but as a hobby. He agreed it had a lot of equipment. The husband agreed that his hobby business BJ Company was owned by K Pty Ltd and had equipment worth $391,000. When asked whether he created an asset register for the business totalling $680,000 he said that was not correct. He said most of the equipment is second hand (Exhibit R5). He said the business was for his future. He agreed he advertised on the internet that his company could lease equipment. He accepted he had kept the finances surrounding BJ Company the assets, liabilities, income and expenditure completely separate from the wife at all times. He said he was building the equipment at the time, so she knew he was making some spare cash out of it which was helpful for the family and it kept us going. He accepted there was no financial information for the business trading as BJ Company.
The husband claims he has the following liabilities:
(a)K Pty Ltd loan of $300,000 with a balance of ($105,729)
(b)K Pty Ltd NAB account ($10,998)
(c)NAB Personal loan ($162,743)
(d)NAB cheque account ($47,465)
The parties tendered a joint balance sheet (Exhibit C2) which I accept. Given the parties separated in late 2014 I assume the liabilities have arisen over the last 9 years. The husband has been in receipt of substantial sums to pay down those liabilities. I am not satisfied the wife should be jointly responsible for any liabilities not agreed to by the parties.
Section 90SF (3) factors
The husband married Ms BP in 2022. She works in administration in a local business and earns $50,000 p.a. They have lived together since 2018 and keep their finances separate. He continues to operate a hobby business which has substantial assets. The wife has operated a business as an allied health worker in the past for which she has earned substantial income. She claims she currently works only part time due to an injury. The parties have now been separated from 9 years. I am not satisfied it is appropriate to make any further adjustment with respect to any factor under section 90SF (3).
Section 90SF (3) (o)
I take into account that there has not been full and frank disclosure on the husband’s part. That matter is significant given that during the relationship the husband received about $1.5 million from the sale of his interest in G Pty Ltd and sale of N Street premises. It is trite to say it is fundamental to the operation of the Family Law Act 1975 in financial matters that parties provide full and frank disclosure of their financial circumstances. The law to be applied and the approach adopted in cases where findings are made that a party has failed to provide full and frank disclosure are well settled (see Stein v Stein (1986) FLC 91-779; 11 Fam LR 353; Mezzacappa v Mezzacappa (1987) FLC 91-853; 11 Fam LR 957; Black and Kellner (1992) FLC 92-287; 15 Fam LR 343 and Weir v Weir (1993) FLC 92-338; 16 Fam LR 154).
In Giunti and Giunti (1986) FLC 91-759 at 75,555 the Full Court said:
[32] It is obviously desirable as a general principle that the Court should first of all identify the pool of assets available and evaluate it. If each party complies with his or her obligation to make a full and substantive disclosure of their financial affairs[44] there is no problem although there may be disputes as to valuation. However if, as here, one party fails to fulfil that obligation, is it open to that party then to rely on the absence of satisfactory evidence to prevent the making of an order against him or her which otherwise justice and equity would require? It would be simple, if that were the case, to evade the jurisdiction of this court, not by outright refusal which would attract sanctions but by obfuscation and evasion.
[44] see Briese and Briese (1986) FLC ¶91-713, affirmed by the Full Court in Oriolo and Oriolo (1985) FLC ¶91-653.
In Mayhew & Fairweather [2022] FedCFamC1A 53 (12 April 2022) the Full Court allowed an appeal in a matter involving a finding by the trial judge of “defective disclosure” and said:
[13] …in order to be considered under s 79(4) (a) or (b) of the Act, the defective disclosure must relate to a direct or indirect, financial or non-financial, contribution “to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them” (emphasis added). Whilst we do not say that could never be the case, (for example, if the non- disclosure related to financial contributions to property) here where the pool was agreed, we cannot see it, and as the primary judge did not explain how the defective disclosure related to contributions, we cannot ascertain the reasoning upon which the decision is based (Bennett and Bennett [1990] FamCA 148; (1991) FLC 92-191 at 78,266).
[14] The usual way in which defective disclosure is taken into account is either by adding a sum to the pool, reflective of an estimate of the value of undisclosed property (as the primary judge seemingly acknowledged at [66]), or under s 75(2)(o) of the Act. Either of those is how any defective disclosure might properly have been accommodated here, although that said, the deficiency in question appears more about the timeliness, rather than the comprehensiveness, of the husband’s disclosure , and hence what weight it deserves is a live issue. However, we are satisfied that by factoring it in to the analysis of contributions, the primary judge erred, and further, his reasons in that respect are inadequate.”
Assessment
The approach to determining applications with respect to adjustment of property interests between either married or de facto partners is well settled: See In the Marriage of Lee Steere (1985) FLC 91-626; In the Marriage of Ferraro (1993) FLC 92-335; Clauson & Clauson (1995) 18 Fam LR 693. The Court is required to identify the property, liabilities and financial resources of the parties at the time of the hearing, to evaluate the contributions made by the parties under section 90SM (4) (in de facto cases) including the matters referred to in section 90SF (3) in so far as they are relevant. Under section 90SM (3) the Court must not make an order unless it is satisfied that in all the circumstances it is just and equitable to make the order. It is the justice and equity of the actual order that the court is required to consider: See Russell v Russell (1999) FLC 92-877.
In Jabour & Jabour [2019] FAMCAFC 78 the Full Court at [41] referred to the decision of Baker v Towle [2008] NSWCA 73 where Basten JA considered the decisions of Kardos v Sarbutt (2006) 34 Fam LR 550 (on which he had been a member) and Bilous v Mudaliar (2006) 65 NSWLR 615 both matters dealing with adjustment of property interests between de facto partners as follows:
[60] The primacy of s 20 of the Act in identifying the proper approach to applications made under it is undoubtedly correct. To the extent that Kardos purported to state principles which are not consistent with or fetter the broad discretion conferred by that section, it should not be followed. However, a number of recent cases have tended to talk in terms of assets owned by one party before the relationship began as “initial contributions” or as contributions “to the relationship”. The inference is that assets owned by the parties to a domestic relationship are in someway pooled even though they are not jointly owned. This approach is not reflected in the language of s 20. Rather, s 20 assumes that the parties have “interests with respect to” property, a concept which will include both individual and jointly held property. It is those interests, as at the date of the application, which are sought to be “adjusted”. The use of the term “contributions” in this context is inapt because it reflects the language of paragraphs (a) and (b), defining the “contributions” to which the Court must have reference in considering an appropriate adjustment.”
Counsel for the wife submitted it was not just and equitable to make any order adjusting the parties respective property interests. Counsel for the husband submitted that the parties’ property interests ought be adjusted with the wife to pay the husband $568,950.
Assets of the parties
I find the parties have the following assets, liabilities and financial resources:
ASSETS
A Street, Town B
Wife
$1,000,000
E1 Property Unit Trust
Wife
$120,000
E2 Property Unit Trust
Wife
$120,000
Term Deposit NAB #...57
Husband
$34,102
Term Deposit NAB #...33
Husband
$148,279
NAB Trade shares
Husband
$378
Bank accounts
Husband
$3471
Bank account (…61)
Husband
$3000
Hobby business equipment
Husband
$391,605
Motor Vehicle 1
Husband
$12,000
Motor Vehicle 6
Husband
$15,000
Motor Vehicle 3
Husband
$5000
Motor vehicle
Wife
$2,000
Motor Vehicle 4
Wife
$100,000
Subtotal
$1,954,835
LIABILITIES
Mortgage E1 Street (NAB#...84)
Wife
$189,546
Mortgage E2 Street (NAB#...05)
Wife
$187,268
Husband’s personal loan (NAB #...50)
Husband
$171,102
Facility loan (NAB#...76)
Husband
$113,182
Husband’s overdraft (NAB#...53)
Husband
$52,515
K Pty Ltd (NAB#...79)
Husband
$11,840
Subtotal
$725,453
SUPERANNUATION
Superannuation Fund 1
Husband
$385,948
Superannuation Fund 2
Wife
$33,270
Superannuation Fund 3
Wife
$88,033
Subtotal
$507,251
Total non - superannuation property
$1,229,382
Total combined property pool
$1,736,633
The parties have a combined property pool of $1,736,633. The wife holds an interest in non - superannuation property of $965,186 ($1,342,000 – ($376,814) and an interest in superannuation of $121,303 giving her a combined interest of $1,086,489 or 62.5%.
The husband holds an interest of non - superannuation property of $264,196 ($612,835 – (348,639) and an interest in superannuation of $385,948 giving him a combined interest of $650,144 or 37.4%
I accept the submission of Counsel for the wife that the husband has already received a payment of $200,000 from the wife in accordance with Court orders made in October 2020. Had that not been the case my decision may have been different. That fact is NOT in dispute. The husband deposed that following the Court making orders in March 2020 for the sale of A Street the wife filed an application in a case on 11 August 2020 seeking a stay of that order. On 22 October 2020 Judge Neville ordered that “within 7 days of the date of these orders being 29 October 2020 the respondent wife pay the applicant $200,000.” On 28 October 2020 the wife paid the husband the sum of $200,000 and A Street was taken off the market.[45] That amount was paid by the wife post separation.
[45] Husband’s trial affidavit filed 21 February 2023 [15 – 16]
There is no evidence before me about the payment of $200,000 so I assume so much of that payment is included in the current asset pool. Were that no so I assume Counsel for the wife would have argued that the amount should be added back into the property pool as a premature distribution of property in accordance with the authorities such as Trevi [2018] FamCAFC 173 and Chorn and Hopkins (2004) FCL 93 – 204
Both Counsel submitted the Court should take an asset - by - asset approach in this matter. I intend to take that approach. Counsel for the wife submitted it was not just and equitable to make any order adjusting the parties’ respective property interests. He submitted the husband has already been paid $200,000 by Court order in October 2020 and to make any further adjustment did not accurately reflect the contributions made by each party.
Counsel for the husband submitted that that the wife should pay the husband $568,499 which effectively amounts to 56% of the value of A Street. As indicated the wife paid the husband post separation in October 2020. In my view that amount represents a partial property settlement or premature distribution to the husband of part of the net asset pool.
The parties’ relationship continued for an aggregate period of nearly 7 years. I have set out at length in my consideration the findings I have made about the parties’ respective contributions and do not intend to repeat those findings here.
Suffice to say there is no evidence of a significant (or any) non – financial contribution by the husband to the relationship. The “fact” of the mere existence of a relationship (as the husband repeatedly claimed) is not sufficient to establish that the husband made any non - financial contribution for the benefit or welfare of the family.
I have found the wife’s financial contributions during the relationship substantially outweigh the husband’s financial contributions. She applied all finances available to her towards the property of the parties. Having introduced the H Property apartment into the relationship she used the rent to make mortgage repayments and applied the net proceeds of sale towards a reduction in the mortgage, continued to make payments on the balance of the mortgage after sale and set aside funds for the Town F development. Further on receipt of $199,890 in January 2015 those funds were applied to the mortgage.
The wife introduced into the relationship the J Street property unencumbered and used that property as security for a mortgage against the H Property apartment investment property and later to fund the development of A Street. When J Street was sold in late 2012 she applied the net proceeds of sale towards discharging the mortgage.
The wife funded almost exclusively the Town F development whilst the husband made little contribution but obtained a substantial benefit in the order of about $82,000 through tax benefits.
In contrast the husband did not contribute any of the net proceeds of sale of the H Property apartment towards the property of the parties. He had the benefit of paying a reduced mortgage for a period of about 4 years eventually paying the wife the shortfall on the H Property apartment in January 2015.
Though he owned O Street at the commencement of the relationship that property had little equity. He retained the rents to pay the mortgage and following the sale of that property in early 2015 he did not apply any of the net proceeds of sale of the property towards the property of the parties.
He did not apply any of the net proceeds of sale of his interest in G Pty Ltd nor any of the net proceeds of sale of N Street those funds being substantial in the order of $1.5 million.
Of the assets and liabilities in the balance sheet (Exhibit C2) given that the wife almost exclusively funded the Town F units I am satisfied that she should retain both units. Unfortunately, those properties have decreased in value and the mortgages increased. The NRAS grant scheme ends in 2024 so she is unlikely to obtain any substantial benefit. She wishes to retain those properties the husband does not. I intend to order the wife retain both Town F properties. The legal interest in E2 Street is to be transferred to the wife. As she currently holds the legal interest in E1 Street as trustee for E1 Property Unit Trust I intend to order she retain that property.
There is no satisfactory evidence that the wife contributed to the husband’s hobby business equipment, the husband’s motor vehicles and Term Deposits other than indirectly. I intend to order that the husband retain that property. Nor am I satisfied that the wife should be jointly liable for the husband’s liabilities. The parties have been separated for 9 years and each has operated separately and apart from the other though I accept there continued to be an intermingling of finances until the husband permanently left A Street in 2016. A further complication with respect to the parties’ finances is the fact that the husband has remarried. I intend to order the husband be solely liable for any liabilities in his sole name or in any other entity in which he holds an interest.
There is no satisfactory evidence that either party contributed to the accumulation of superannuation in that party’s name other than indirectly nor is any splitting order sought by either party. I intend to order that each party retain that party’s interests in superannuation in their name.
On the above analysis the wife’s interest in non – superannuation property is $102,000 including Motor Vehicle 4 $100,000 and motor vehicle $2000 excluding any net interest in the Town F units which is negative ($136,814). The wife has an interest in superannuation of $121,303.
The husband’s interest in non – superannuation property is $260,725 with respect to his assets of $609,364 and liabilities ($348,639). He holds an interest in superannuation of $385,948. I am satisfied it is just and equitable not to make any order adjusting the parties’ superannuation interests. Neither party seeks a splitting order.
Of the remaining assets the Town F units are worth a negative ($136,814) and A Street is worth $1,000,0000. The net combined value of those assets is $863,186. The husband received a payment of $200,000 in October 2020. I have assumed that sum is included in the asset pool neither Counsel addressed this issue. $200,000 represents about 23% of $863,186. I am satisfied that of the assets the parties contributed jointly towards the husband should retain the 23% already provided to him and the wife 77%. I am satisfied the percentage distribution reflects the contributions made by each respective party over the entire relationship. I am not satisfied it is just and equitable to make any further order adjusting the parties interests in property.
Conclusion
The reality for each party is that the wife will retain her interest in A Street and the Town F units $863,186, her vehicles $102,000 and interest in superannuation of $121,303 giving the wife a total of $1,086,489.
The husband will retain net non - superannuation property of $260,725 and his interest in superannuation of $385,948. He has already received $200,000 giving the husband a total of $846,673.
Save for orders declaring the parties’ respective interests in property I make no further order adjusting the parties property interests and am satisfied that decision is just and equitable in all the circumstances.
I certify that the preceding one hundred and eighty-eight (188) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Tonkin. Associate:
Dated: 17 November 2023
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