Debono and Debono & Ors (No 2)
[2012] FamCA 1086
FAMILY COURT OF AUSTRALIA
| DEBONO & DEBONO AND ORS (NO 2) | [2012] FamCA 1086 |
| FAMILY LAW – PROPERTY - main dispute is identification and valuation of asset pool – parties’ attempt to trace, explain and account for all pre and post-separation income and monies held in bank accounts – property in Australia and Europe – dispute as to whether properties in Europe were purchased by husband or whether they were purchased by husband’s siblings as a result of loan from husband – whether the appropriate valuation date is at separation or at hearing – the sale of real property to discharge the parties’ line of credit - wife alleges that husband has not complied with obligation for full and frank disclosure – whether such non-disclosure justifies an adjustment pursuant to s 75(2)(o) – whether either party is entitled to a s 75(2) adjustment on the basis of their health, expenditure of monies and future earning capacity – involvement of adult son in matrimonial proceedings – husband seeks orders against adult son for the payment of monies – dispute as to whether items loaned or gifted to son – unable to quantify debts payable to the Australian Taxation Office – tax returns not filed – loan accounts of parties and adult children – money quarantined to pay the tax debt and GST – which party is to be responsible for the costs, penalties and interest on the tax debt – equal contributions – what was a just and equitable division of property |
| Family Law Act 1975 (Cth) ss 75(2), 79 Family Law Rules 2004 (Cth) rr 13.01, 13.04 |
| Black & Kellner (1992) FLC 92-287 Bulleen & Bulleen (2010) 43 FamLR 489 Chang & Su (2002) FLC 93-117 Clauson & Clauson (1995) FLC 92-595 Clives & Clives (2008) FLC 93-385 Davut & Raif (1994) FLC 92-503 Garrett & Garrett (1984) FLC 91-539 Gould & Gould (2007) FLC 93-333 Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervenor) (2003) FLC 93-143 Hunt & Zuryn (2005) FLC 93-226 Jamine & Jamine (No 2) [2012] FamCAFC 104 JEL v DDF (2001) FLC 93-075 Kannis & Kannis (2003) FLC 93-135; [2002] FamCA 1150 Kennon & Kennon (1997) FLC 92-757 Mallet v Mallet (1984) 156 CLR 605 Martin & Newton (2011) FLC 93-490 Mezzacappa & Mezzacappa (1987) FLC 91-853 Norbis v Norbis (1986) 161 CLR 513 Oriolo & Oriolo (1985) FLC 91-653 Pierce & Pierce (1999) FLC 92-844 SL & EHL [2005] FamCA 132 Smith & Fields [2012] FamCA 510 Stein & Stein (1986) FLC 91-779 Waters & Jurek (1995) FLC 92-635 Weir & Weir (1993) FLC 92-338 |
| APPLICANT: | Mr Debono |
| RESPONDENT: | Ms Debono |
| SECOND RESPONDENT: | D Pty Ltd |
| THIRD RESPONDENT: | Mr F Debono |
| FILE NUMBER: | MLC | 7072 | of | 2011 |
| DATE DELIVERED: | 21 December 2012 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Young J |
| HEARING DATE: | 20, 21, 24, 25 September 2012, 27, 28, 29 November 2012 and 11, 12, 13 December 2012 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Ackman QC |
| SOLICITOR FOR THE APPLICANT: | Plaza Legal |
| COUNSEL FOR THE RESPONDENT: | Mr Davis for 20, 21, 24 and 25 September 2012 and then Mr Geddes QC for the balance of the hearing |
| SOLICITOR FOR THE RESPONDENT: | Westminster Lawyers |
| COUNSEL FOR THE SECOND RESPONDENT: | No Appearance |
| SOLICITOR FOR THE SECOND RESPONDENT: | No Appearance |
| COUNSEL FOR THE THIRD RESPONDENT: | Mr Davis for 20, 21, 24 and 25 September 2012 and then Mr Geddes QC for the balance of the hearing |
| SOLICITOR FOR THE THIRD RESPONDENT: | Westminster Lawyers |
INDEX
ORDERS
ISSUES
ORDERS SOUGHT
AFFIDAVITS RELIED UPON
ANNEXURES TO AFFIDAVITS
BACKGROUND FACTS
COUNSEL APPEARING FOR THE WIFE
PREVIOUS COURT ORDERS
18 DECEMBER 2012
STANDARD OF PROOF
OBSERVATION OF WITNESSES
MATHEMATICAL APPROACH
FAMILY LAW ACT 1975 (CTH)
OBLIGATION FOR FULL AND FRANK DISCLOSURE
S 75(2) FACTORS
D PTY LTD (“D”)
AGREED PROPERTY VALUES IN AUSTRALIAN DOLLARS
PROPERTY VALUES IN DISPUTE
WIFE’S MONIES
HUSBAND’S MONIES
SUPERANNUATION
NATIONAL BANK LINE OF CREDIT AND FEEDER ACCOUNT
S STREET, SUBURB T
INVESTMENT PROPERTIES
LEGAL EXPENSES
AGREED FOREIGN EXCHANGE RATE – EURO v AUD
CREDIT OF THE PARTIES
HUSBAND
ESTIMATED TAX LIABILITY OF HUSBAND
HUSBAND’S INCOME IN 30 JUNE 2011 AND 2012 FINANCIAL YEARS
W BANK ACCOUNTS
NN BANK
EXHIBIT “H7”
EUROPE – PROPERTIES PURCHASED POST SEPARATION
HUSBAND’S EMAILS
EXHIBIT “W12”
EXHIBIT “W13”
EXHIBIT “W14”
EXHIBIT “W15”
EXHIBIT “W16”
HUSBAND’S HEALTH
HUSBAND’S POST SEPARATION EXPENDITURE
HUSBAND’S SISTER
DR X
WIFE
PAYMENT FOR SON’S WEDDING
WIFE’S EXPENDITURE OF WESTPAC MONIES
DATE OF SEPARATION
PARAGRAPH 12 OF HUSBAND’S AFFIDAVIT
PROFESSOR AA
DR Z
D PTY LTD– BANK ACCOUNTS
EVIDENCE OF THIRD RESPONDENT
V STREET, SUBURB V (“SUBURB V”)
MOTOR VEHICLE 3
SUBPOENA COSTS
ADULT CHILDREN – LOAN ACCOUNTS
JEWELLERY
ENGAGEMENT RING – THIRD RESPONDENT
CHATTELS
FINAL NET ASSET POOL
S 79(4) CONTRIBUTION
S 75(2) ADJUSTMENT
PROPERTY RETAINED BY WIFE
PROPERTY RETAINED BY HUSBAND
FOURTH STEP – OVERALL JUSTICE AND EQUITY
MONETARY EFFECT OF ORDERS
COSTS
ORDERS
IT IS ORDERED:
THAT the property of the husband and wife be divided as to:
§ 55 per cent to the wife; and
§ 45 per cent to the husband.
THAT the husband forthwith sign all documents, do all acts and things and give all necessary and required instructions to transfer his right, title and interest in G Street, Suburb T (“the home”) to the sole name of the wife, such transfer to be at her expense.
THAT the wife pay and indemnify and keep indemnified the husband for all council and water rates, taxes and other charges and outgoings, past and present, that are payable upon the home.
THAT the wife retain the furniture, chattels and contents in the home.
THAT the property situate at and known as S Street, Suburb T (“S Street”), and registered in the name of D Pty Ltd (“D Pty Ltd”), be offered for sale within sixty (60) days of the date hereof, at a reserve price of no less than $920,000 or otherwise as agreed, and the husband and wife as company directors, sign all documents, give all necessary and proper instructions and do all acts and things to facilitate and promote the sale and to reach agreement upon the proper terms and conditions thereof.
THAT the third respondent co-operate with the sale process, all reasonable requests of the selling agent and all scheduled open for inspections and ensure S Street is maintained in a good and tidy condition and provide vacant possession at or prior to settlement.
THAT liberty be reserved to each of the husband and wife, if required, to apply upon written documentation filed and served as to other necessary terms and conditions of sale.
THAT the net proceeds of sale of S Street after payment of all proper costs, expenses and commissions of and incidental thereto and any capital gains tax assessed, are to be paid as follows:
(a)a sum of $200,000 is to be deposited into an interest bearing trust account under the joint supervision of the solicitors but in the name of D Pty Ltd to be used only for:
i.the payment of all assessed tax, GST payments, interest, costs and penalties issued in the name of the husband, the wife or D Pty Ltd for the 2011 financial year; and
ii.the payment of all assessed tax and GST payments issued in the name of the husband, wife, either of their recently established companies, H Pty Ltd and J Pty Ltd or D Pty Ltd for the 2012 (only) financial year;
(b)subject to any further monies being required to wholly discharge the National Australia Bank Line of Credit facility then any balance remaining of the $200,000 sum is thereafter to be divided between the husband and wife in the percentages fixed in Order 1 hereof; and
(c)the balance of the net proceeds of sale of that Suburb T property are to be paid in full to the National Australia Bank in discharge of the Line of Credit facility.
THAT the husband pay and indemnify the wife for any interest, costs or penalties, if any, imposed by the Australian Taxation Office upon D Pty Ltd and arising from the lodgement of its 2012 taxation return.
THAT if there is a shortfall in the quantum of monies required to be paid from that interest bearing trust account established in Order 8 hereof and there remains a continuing liability to the Australian Taxation Office, for monies payable pursuant to Order 8(a)(i) and (ii) hereof, then the further sum required is to be paid by the husband as to 55 per cent thereof and by the wife as to the remaining 45 per cent thereof.
THAT the husband be solely responsible for the preparation and lodgement of his personal taxation return, and that of D Pty Ltd and H Pty Ltd and their financial accounts, for the 2012 financial year and if any interest, costs and penalties are charged they are to be paid in full by him and he is to indemnify and keep indemnified the wife in respect of any such payments.
THAT the wife be solely responsible for the preparation and lodgement of her personal taxation return and that of J Pty Ltd for the 2012 financial year and if any interest, costs and penalties are to be charged therefore, they are to be paid in full by her.
THAT there are to be no further periodic withdrawals from the National Bank Line of Credit facility and the bank feeder account from the date of these Orders.
THAT the wife retain sole ownership and possession of the house and adjoining vacant block of land at K Town, Europe.
THAT the wife forthwith sign all documents and do all acts and things and give all necessary and proper instructions to forthwith transfer to the sole name and ownership of the husband, and at his expense, the apartments in L Town and M Town, Europe.
THAT each party keep the furniture, chattels and contents that currently are situate within the respective European properties that they are to retain, save for the husband’s tools at K Town which are to be forthwith made available to the husband or his nominee for collection, and in their present condition.
THAT the husband and wife, as directors of D Pty Ltd, sign all documents and do all acts and things necessary to forthwith transfer to the sole name of the husband the property situate at and known as N Street, Suburb K (“Suburb K”), such property to be transferred at its agreed value of $615,000 and at the expense of the husband, if any, including the payment of any applicable capital gains tax.
THAT it is to be the sole responsibility of the husband to negotiate with O Homes any termination of their existing lease of Suburb K, or for any tenants to vacate the property, and all other terms and conditions so that he can occupy same, and any costs, charges or penalty is to be paid solely by the husband.
THAT all rent from Suburb K is to continue to be paid to the National Australia Bank Line of Credit facility until the date of its transfer to the husband, save that pending that transfer all adjusted council and water rates and other charges properly payable on this property are to be paid from that rental sum.
THAT from the date of transfer the husband is to be solely responsible for the payment of all council rates, water, charges and other outgoings on Suburb K and indemnify the wife in that regard.
THAT the property situate at and known as P Street, Suburb Q (“Suburb Q”) be forthwith sold, pursuant to the existing orders of the Court, and the net proceeds of sale after payment of all proper costs, expenses and commissions of and incidental to the sale, including any capital gains tax, be forthwith paid in partial discharge of the National Australia Bank Line of Credit facility.
THAT upon the completion and lodgement of the 2011 and 2012 taxation returns and signed financial statements of D Pty Ltd, the wife is then to sign all necessary documents and do all acts and things required to forthwith resign as a director and to relinquish, in favour of the husband or his nominee, her shareholding therein and from 1 July 2012 the husband be solely responsible for the financial dealings and requirements of that company and indemnify and keep indemnified the wife for any subsequent (post 1 July 2012) liability or transactions made by or on its behalf.
THAT any loan account of either the husband or wife in D Pty Ltd, on behalf of the Debono Family Trust, is to be discharged as at 30 June 2012 and there are to be no subsequent adjustments between each of them based upon any debit or credit loan account within that Trust.
THAT the husband be solely responsible for the payment of the costs, fees and charges of the accountant retained to prepare and finalise the accounts and financial statements of D Pty Ltd and the Debono Family Trust for the 2011 and 2012 financial years and he is to indemnify and keep indemnified the wife in respect of all such payments.
THAT the parties are to engage, and the husband is to instruct his accountant, Mr R to prepare and complete all documents referred to in the previous two Orders hereof.
THAT the wife otherwise retain:
§her motor vehicle 1;
§the Telstra shares;
§her jewellery; and
§the monies that were standing to her credit in the various bank accounts identified in paragraph 546 of the Reasons for Judgment.
THAT the husband otherwise retain:
§his motor vehicle 2;
§the properties in Europe which he had alleged were purchased by his sister and brother; and
§the monies that were standing to his credit in the various bank accounts in Australia and Europe identified in paragraph 546 of the Reasons for Judgment.
THAT if there is a shortfall in the payment required to be made to the National Australia Bank in full discharge of the Line of Credit facility, after contributing thereto the net proceeds of sale of Suburb Q and S Street (save for the monies reserved for payment of assessed taxation and interest, costs and penalties thereon) then the parties are responsible for the payment of the balance of that facility in the following percentages:
§ 55 per cent by the husband; and
§ 45 per cent by the wife.
THAT each party retain their respective superannuation entitlements, inclusive of the wife also retaining the monies that she received upon the surrender of her second superannuation policy with Colonial First State and she is responsible for any tax, interest, costs or penalties that may be assessed thereon as a result of its early surrender.
THAT as to the loan accounts of each of the adult children:
(a)the husband be responsible for the payment, if any, to the daughter Ms U and indemnify the wife in that regard; and
(b)the wife be responsible for the payment, if any, to the son Mr F and indemnify the husband in that regard.
THAT the wife be and remain responsible for all of her current credit card debts and her borrowings from the third respondent.
THAT after the husband and wife have implemented in full Orders 1 - 32 hereof, each of them, assisted by their solicitors, are to calculate if any and what further payment is required to be made to conclude a 55 per cent (wife) and 45 per cent (husband) division of their property.
THAT forthwith each of the husband and wife return to the other any original European or English Power of Attorney, executed by the other party but held in their possession.
THAT the third respondent retain ownership of motor vehicle 3.
THAT the further oral application of the husband to be paid a sum of money upon any future sale of V Street, Suburb V (“Suburb V”)be dismissed.
THAT the ongoing rental payment of $210 per week paid by the third respondent for his use and occupation of S Street be hereafter paid directly to the National Australia Bank Line of Credit facility, and not be paid to the wife pending settlement of the sale of that property.
THAT the husband pay to the third respondent, within sixty (60) days, a sum of $612 in payment of costs previously fixed by Registrar Kaur on 27 January 2012.
THAT the husband forthwith return to the third respondent all original ANZ bank documents, issued in the name of the third respondent and/or his wife, as may be in his possession or control.
THAT all documents produced to the Court under subpoena be forthwith returned by the subpoenas clerk, Family Court, Melbourne Registry to the person or organisation who produced same after a period of thirty (30) days have elapsed from the date of this Order, or otherwise upon the conclusion of any Full Court appeal hearing.
THAT otherwise all extant applications, interim and final, of the husband, the wife and the third respondent be dismissed and the proceedings be removed from the docket of Young J.
THAT all questions of costs be reserved for determination.
THAT all parties have twenty-eight (28) days in which to file written submissions in support of their applications for costs arising out of or incidental to this defended hearing.
IT IS CERTIFIED
THAT pursuant to Rule 19.50 of the Family Law Rules this matter reasonably required the attendance of Senior Counsel and Counsel for the wife and the third respondent and Senior Counsel for the husband.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Debono & Debono has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLC 7072 of 2011
| Mr Debono |
Applicant
And
| Ms Debono |
Respondent
And
D PTY LTD
Second Respondent
And
Mr F
Third Respondent
REASONS FOR JUDGMENT
ISSUES
This was a case where the conflict and lack of trust between the parties, their personalities, a lack of timely financial disclosure of all income and assets and the involvement of extended family all worked towards expanding the issues and length of hearing from what should have been a reasonably straight forward evaluation of the financial and property circumstances of the parties into, as the matter was prepared and conducted upon the parties instructions, a lengthy, bitter and very costly defended hearing.
The issues were not so much about identifying and dividing the current property and other presently held assets and monies of the parties but rather exploring the financial dealings and transactions, pre and post separation, and establishing the expenditure and transferring of monies and determining what should be included within the available net asset pool and then dividing those monies between the parties in a just and equitable manner.
ORDERS SOUGHT
HUSBAND
The husband’s Further Amended Initiating Application was filed 1 August 2012 and the form of his orders then sought were identical to those which were sought in his most recently filed Case Outline, filed 18 September 2012.
The orders then sought by the husband, in summary, are that:
§the wife relinquish her right, interest and title in D Pty Ltd (“D Pty Ltd”) as trustee of the Debono Family Trust;
§the wife transfer any interest in the property owned by D Pty Ltd and situate at S Street, Suburb T;
§the husband and wife (“the parties”) sell the investment properties owned by D Pty Ltd at Suburb K and Suburb Q with the net proceeds of sale therefrom, after payment of all costs, expenses and outgoings of and related to the sales, being paid in reduction of the National Australia Bank Line of Credit;
§the parties share equally any capital gains tax applicable to one or both of the sales of the properties identified in the preceding order;
§the wife relinquish any claim to ownership or possession of the motor vehicle 3;
§the wife sign all documents and do all acts and things required to transfer from the joint names of the parties to the husband’s sole name the apartments at L Town and M Town, in Europe;
§the wife retain sole ownership of the house and land in K Town, Europe;
§the parties each retain their respective superannuation entitlements subject to there being an appropriate accounting and adjustment as a result of the wife surrendering her Colonial First State Policy for approximately $57,000;
§the wife forthwith return to the husband his original European and English Powers of Attorney, and that they be revoked;
§the parties sign all documents and do all acts and things to transfer to the sole name of the wife, at her expense, the jointly owned property at G Street, Suburb T;
§the husband retain the Telstra shares;
§there be an adjustment in favour of the husband for his post separation property maintenance contributions in the sum of $82,750;
§the parties remain equally liable to pay off the National Australia Bank, Line of Credit;
§subject to an appropriate financial adjustment the wife retain her motor vehicle 1, the furniture and chattels in the properties at S and G Streets, Suburb T, her gold coins and US Dollars, her jewellery and the money which she removed from various bank accounts in Australia and Europe post separation ; and
§again subject to any proper financial adjustment, the husband retain the value of the motor vehicle 4 sold by him for $80,000, his motor vehicle 2 and the monies under his control in the W Bank account of $219,155.
Separately, the husband sought against the third respondent, his adult son, the following orders, in summary, that:
§the third respondent repay to D Pty Ltd the loan advanced to him in the sum of $42,500 plus accrued interest fixed in the sum of $6,275; and
§the wife or the third respondent repay to D Pty Ltd arrears of rental outstanding for the occupation of the property at S Street, Suburb T, fixed in the sum of $30,000.
On the second day of the hearing, and during the cross examination of the husband, his Senior Counsel sought leave to orally amend the order sought in paragraph 15 of his Further Amended Application which related to the repayment of $42,000 by the third respondent. That amendment was not opposed by the wife’s Counsel and I indicated then that such leave would be granted upon the amended order sought being drawn and presented to the court.
The substituted order was that the third respondent do all such things and sign all such documents, including but not limited to an equitable charge, providing for a distribution of 10 per cent of the net sale proceeds of V Street, Suburb V in the State of Victoria (“Suburb V”) to be paid to D Pty Ltd, or in the alternative 5 per cent to be paid to each of the husband and wife.
That formal order sought was handed to the Court, by Senior Counsel for the husband, on the fourth day of hearing and I then read into the transcript the particulars of that order. Counsel for the wife agreed to that order being substituted for the previous order as had been sought in paragraph 15 of the husband’s Further Amended Application.
On that basis it was submitted that there would be no ongoing claim for interest sought in the sum of $6,375, or any other sum. Whilst the original order had required repayment to D Pty Ltd, the husband’s evidence was that the company was jointly owned and controlled by the parties and thus, on settlement of any sale of the investment property, monies could appropriately be paid by the son to his parents, rather than their corporate entity.
Based on evidence given early in the hearing, the husband further sought to amend order 5 of his Further Amended Application in relation to the motor vehicle 3. Evidence was given that the wife had transferred ownership of this motor vehicle into the name of the third respondent. The husband therefore no longer sought an order that it be transferred to D Pty Ltd but instead he proposed that the third respondent pay $15,000 to D Pty Ltd with those monies then to be shared between the parties. The $15,000 sum was calculated upon what he said was the purported market value of the vehicle at $25,000 less the sum of $10,000 paid to him.
Otherwise the further orders sought against the third respondent were identified in the husband’s Response to the Application in a Case which he filed on 4 July 2012 and wherein he sought, in summary, the following other orders:
§that the third respondent’s case be dismissed;
§that the third respondent pay the husband’s legal costs in respect of their issues on an indemnity basis; and
§that the third respondent pay rental arrears since February 2012 plus interest for his occupation of S Street, Suburb T.
The overall orders therefore sought by the husband against the wife for a division of property are inclusive of the assets and liabilities of D Pty Ltd and were said to represent approximately an equal (50 per cent) division of net property as at the date of separation in May 2011.
In his final submissions, and on updated instructions, Mr Ackman submitted that if the Court were not to transfer S Street, Suburb T to the husband’s sole name, and instead were to sell the property, then the investment unit at Suburb K should be given to the husband so that he would have a residence in Melbourne.
WIFE
In her Further Amended Response filed 13 August 2012 and as further recorded in her Outline of Case document filed 4 September 2012 the wife sought, in summary, the following orders:
§that she retain by way of division of property and capitalised spousal maintenance:
(a)the former matrimonial home at G Street, Suburb T;
(b)the property at S Street, Suburb T;
(c)the vacant land at K Town, Europe;
(d)the house and chattels at K Town, Europe;
(e)monies in Europe as at separation in the sum of $39,000 AUD;
(f)monies invested in Australia in a joint National Australia Bank account, a joint Colonial First Choice account, the wife’s Westpac account and her J Professional Services account (all of which were utilised by the wife post separation);
(g)her motor vehicle 1; and
(h)her jewellery.
§that the husband transfer his interest in G Street, Suburb T to the wife at her expense;
§the parties sign all documents in their capacity as directors of D Pty Ltd to transfer S Street, Suburb T to the wife;
§the husband retain the assets in the name of D Pty Ltd inclusive of the properties at Suburb K and Suburb Q, the monies invested in various corporate bank accounts and the monies paid by the third respondent for the motor vehicle 3 and the engagement ring;
§the husband further retain his motor vehicle 2, the monies received on the sale of the motor vehicle 4, the Telstra shares, his jewellery and the monies retained by him in Europe in the sum of approximately $219,155;
§the husband otherwise take ownership of or retain the apartments and chattels in L Town and M Town, Europe, and the properties purchased in Europe by the husband post separation at an estimate outlay of $261,949;
§upon the husband’s compliance with the transfers of each of the Suburb T properties to or at the direction of the wife, she then sign all documents and do all things necessary to transfer the European properties and other properties owned by D Pty Ltd to the husband, subject to the husband paying to her a sum of $300,000;
§that otherwise the husband be solely responsible for and arrange to discharge the wife’s liability to the National Australia Bank, Line of Credit and indemnify the wife with respect to all liability arising from the ownership of assets or the operation of D Pty Ltd, including the payment of any taxes, inclusive of capital gains tax;
§that the husband forthwith return to the wife her original European and English Powers of Attorney;
§that each of the parties retain their respective superannuation entitlements and, the wife retain all monies received by her upon the surrender of her Colonial First State policy of approximately $57,000; and
§that the husband pay to the wife costs reserved by her Honour Justice Macmillan on 22 March 2012 and 27 April 2012, together with further legal costs resulting from his failure to disclose relevant financial documents.
The wife’s Response submitted that the property of the parties should be divided as to 65 per cent to her and 35 per cent to the husband with the net property pool to be calculated at the hearing date, and not as at separation.
In opening the wife’s case to the Court, her then Counsel Mr Davis identified that she should receive a loading for her superior financial contributions made pursuant to s 79(4)(a), as a result of the two vacant blocks of land at K Town in Europe being received from her mother, which he quantified at 3 per cent. Additionally he submitted that an examination of the relevant s 75(2) factors would support a further 10 per cent loading in her favour. Overall therefore the wife’s case was opened on the basis that a just and equitable division of property was 63 per cent to her and 37 per cent for the husband.
THIRD RESPONDENT – THE ADULT SON
This party had previously been represented by Moores Legal, but at the commencement of the hearing Mr Davis announced his appearance as Counsel for both the respondent and the third respondent and did so on the basis that he was briefed by Westminster Lawyers who then acted for both the wife and the third respondent.
It only then came to my attention that the wife of the third respondent was in fact a solicitor in the employ of Moores Legal, and indeed she had, on earlier court hearings, announced an appearance for and represented the third respondent without disclosure of their marriage. Whilst that matter excited some level of concern with Senior Counsel for the husband, it otherwise did not impact upon this hearing because her employer solicitors removed themselves from any issue of conflict by ceasing to act.
I directed, on the second day of hearing, that Moores Legal file and serve a formal Notice of Ceasing to Act and that Westminster Lawyers file a Notice confirming that they represented the third respondent.
The third respondent filed an Application in a Case on 20 June 2012 and the orders that he sought therein were as follows:
§that the husband pay the costs of his objection to a subpoena fixed and reserved in the sum of $612 plus interest;
§that the husband return the original ANZ bank statements to his solicitors with an undertaking that they not be copied; and
§that the husband pay his costs on an indemnity basis.
AFFIDAVITS RELIED UPON
HUSBAND
The husband relied upon the following affidavits:
§his trial affidavit filed 26 March 2012;
§his affidavit filed 6 May 2012 in response to the wife’s affidavit;
§his affidavit filed 5 July 2012 in response to the third respondent’s Application in a Case;
§his affidavit filed 19 September 2012;
§his Financial Statement filed 3 September 2012;
§the affidavit of Dr X filed 9 May 2012 (and he was not required for cross examination); and
§the affidavit of his sister Ms Y filed 17 July 2012, together with the translation from the European language annexed thereto.
The husband’s solicitors initially filed a Case Outline document on 4 September 2012, inclusive of the costs letter required pursuant to Rule 19.04 of the Family Law Rules 2004 and subsequently filed a further updated Case Outline on 18 September 2012.
Subject to my discussion with Counsel and relying upon the substantial annexures contained in the husband’s trial affidavit, I have otherwise read and evaluated his evidence, and that of his witnesses.
As part of his final address Mr Ackman tendered documents which addressed a summary of the husband’s submission, his final list of assets and liabilities and a summary of the effect of the orders sought by him. These documents were marked exhibit “H6”.
WIFE
The wife relied upon the following affidavits:
§her trial affidavit filed 16 April 2012;
§her Financial Statement filed 16 July 2012;
§the affidavit of her consultant psychiatrist, Dr Z, filed 13 April 2012;
§the affidavit of her employer, Prof AA filed 18 April 2012; and
§her affidavit filed 17 September 2012 and which contained her answers to specific questions delivered on behalf of the husband and dated 29 August 2012.
Senior Counsel for the husband advised the Court that he did not intend to cross examine upon the affidavits filed by Dr Z and Prof AA, and therefore they were not required to attend the hearing.
The wife’s solicitors filed, on her instructions, an Outline of Case document on 4 September 2012 which I have read.
Otherwise there were various affidavits from valuers of properties in Melbourne and in Europe, but agreement was reached on these valuation issues and thus none of the valuers were required to attend court and give evidence.
I have otherwise read the affidavits of the wife and her witnesses and evaluated their evidence in determining a just and equitable division of property.
Mr Geddes, in his final submissions tendered a balance sheet of the net assets and superannuation of the parties and an accompanying document which highlighted the wife’s proposal for the final division of property and, without prejudice to her application, reflected upon what that division would be on either a 60 / 40 or 55/ 45 per cent division in her favour. Those documents are marked exhibit “W36”.
THIRD RESPONDENT
The third respondent relied upon the following affidavits:
§his trial affidavit filed 16 April 2012;
§his further affidavit filed 12 September 2012; and
§the affidavit of his solicitor, Steven Sapountsis, filed 20 June 2012.
I have read each of the above three affidavits and evaluated the evidence therein relevant to the orders sought by and against him and forming part of his response, and the response of the wife to issues raised by the husband.
ANNEXURES TO AFFIDAVITS
The parties filed a substantial bundle of annexures which were attached to their trial affidavits and other affidavits. The annexures filed by the husband were in breach of Rule 15.12 of the Family Law Rules.
I advised both Counsel at the commencement of the proceedings that they would have to identify any particular annexure and either tender that document, or invite the court to read the document separately, and that I would not simply accept that all of the annexed documents were in evidence. The hearing proceeded on that basis.
Otherwise I record that both Counsel proposed to raise certain objections to evidence contained within the affidavits of the other. However, and for the case to proceed in an efficient and timely manner, and notwithstanding exhibit “W1”, each of them elected to take no preliminary objections, but, if a particular matter arose during the hearing they were then at liberty to raise an appropriate objection to the court receiving that evidence.
BACKGROUND FACTS
The following agreed background history was provided to the court for the hearing:
1950 Husband born in Country BB
1055 Wife born in Country BB
1974 Parties marry in CC City, Country DD
1978Daughter Ms U born, currently married and financially independent
1983Son Mr F (the third respondent) born, currently married and financially independent
13 December 1991 Parties and children migrate to Australia
February 1992 Parties purchased house in Suburb EE
1994Parties purchased vacant land at G Street, Suburb T and construct former matrimonial home
February 1995 Construction of home completed and parties sell Suburb EE property
1998D Pty Ltd incorporated as the trustee of the Debono Family Trust
2005Wife established J professional services which is used to invoice her private weekend and other work and which accounts to D Pty Ltd for all its income
2006 / 2007Parties purchased S Street, Suburb T and renovations are undertaken
2008Line of Credit established with National Australia Bank and parties purchase Suburb K and Suburb Q properties
2009Parties purchased an apartment in L Town, Europe
May 2011Parties separate
August 2011 Husband issued s 79 proceedings for division of property
12 October 2011 Wife filed Response
30 January 2012 Parties attend Financial Conciliation Conference but matter does not settle
15 May 2012 Matter listed for final defended hearing before his Honour Justice Cronin, but not reached
23 July 2012 Matter listed for final defended hearing before his Honour Justice Young, with the hearing to commence 20 September 2012.
COUNSEL APPEARING FOR THE WIFE
Mr Davis announced his appearance for the wife and appeared on her behalf for the first four full days of the hearing. Unfortunately, and as a result of a serious illness, he was thereafter unable to appear and Mr Geddes, one of Her Majesty’s Counsel was then engaged by the wife to appear in the defended hearing.
The Court ordered, at its expense, that a transcript of the proceedings be prepared and made available to the solicitors for both parties so as to facilitate the resumption of the hearing on 27 November 2012. This occurred and the hearing continued over six separate days concluding 13 December 2012.
PREVIOUS COURT ORDERS
There have been numerous Court orders made in the case management and interlocutory stages of these proceedings and those which the parties identified to the Court as being of relevance and some importance included, in summary:
29 NOVEMBER 2011
By consent his Honour Justice Cronin ordered:
§for the parties to each authorise banks and other financial institutions to provide all financial information sought by the other party;
§for each of them to sign a Power of Attorney (translated into English) so that they could search, investigate and obtain documents required from financial institutions in Europe and Country D;
§for each of the parties to provide a written accounting to the other, including the provision of source documents, for monies received or funds allegedly disposed of;
§that the parties give authority to appropriately deal with the rental income from a European apartment in M Town and otherwise for the National Australia Bank to require joint signatures to be given for any withdrawals from the Line of Credit account;
§the wife to return to that Line of Credit account the sum of $269,000 plus interest within fourteen days of the date of that order;
§for the husband to restore within fourteen days, if practicable, monies to two European bank accounts that were identified and the wife was further required to return a sum of money to the W bank in Europe, and interest thereon;
§for the husband to pay, or cause to be paid as and when they fell due the National Australia Bank Line of Credit instalments and outgoings associated with D’s ownership of the Suburb K and Suburb Q properties, from the rental payments received therefrom and to pay council rates on S Street, Suburb T;
§finally, in paragraphs 4A and 4B thereof, there were injunctive orders made against each of the husband and wife, their servants and agents restricting the sale or encumbering of assets in either of their names, or in the name of any alias of the husband or D Pty Ltd, or any other corporate entity established or controlled by the parties, from opening new bank accounts or from restructuring the Family Trust; and
§for the husband to issue all ongoing invoices for work done by him via D Pty Ltd in the name of that company or H Pty Ltd and not in the name of any other company or business unless previously agreed to by the parties.
There were three matters which the Court noted by consent and which accompanied those orders and they were:
§that the injunctions identified in paragraph 4 of the orders were to provide order to the matter and comfort to each of the parties;
§all monetary figures referred to in the orders were to include interest accruing;
§the husband, post separation, had established H Pty Ltd and proposed to generate his income via that company.
27 FEBRUARY 2012
The matter was listed before her Honour Justice Macmillan when other Senior Counsel then represented each of the parties and trial management orders were made on the basis of a defended hearing of three days duration and a timetable was agreed upon for the filing of affidavits and other documents required by the court:
§the parties were ordered to offer for sale Suburb Q as soon as possible, with all of the net proceeds of sale to be paid into the National Australia Bank Line of Credit;
§orders were made for valuations of property (both in Australia and Europe); and
§orders were made about the form and content of the Powers of Attorney to be documented and signed by the parties.
5 JULY 2012
Orders were made by the Court, and not by consent for, in summary:
§the filing of an updated and detailed Amended Application and thereafter an Amended Response;
§for there to be full and proper instructions obtained as to the provision of mutual and informal discovery of all relevant documents;
§a detailed Financial Statement was to be filed by both parties;
§the parties were to agree upon a rate of exchange between the Australian Dollar and the Euro as at 13 July 2012; and
§the list of witnesses required for cross examination was to be discussed between Counsel, other case management orders were pronounced and again the Senior Counsel then appearing for each of the parties confirmed that the defended hearing, including final submissions, would not exceed three days.
It was further noted to the orders that:
§at the conclusion of the s 79 property proceedings an issue is to be before the Court as between the husband and his solicitors and the third respondent and his solicitors as to costs of and related to subpoenaed documents and Senior Counsel for the husband indicated that his client would be filing an appropriate Response and affidavit material within seven days of this day.
19 JULY 2012
The matter was listed before me on this day and D Pty Ltd was added as a second respondent and the adult son was added as a third respondent in the proceedings. It was noted that Ms MM of Moores Legal appeared as solicitor for the third respondent and that there was no appearance for or on behalf of the second respondent (and it was recorded in the orders) that this company was agreed to be the alter ego of the parties.
The matter was to be listed and heard as a defended hearing commencing 23 July 2012 but by agreement the matter was re-listed, for a defended hearing of three days duration only, before me to commence on Thursday 20 September 2012.
Otherwise there were further case management orders expanded upon and updated orders pronounced requiring strict compliance by the husband with his provision of an identical Power of Attorney, not limited by any sunset clause that had been inserted into the original document.
There were further notations agreed upon and which are recorded, including:
§that the parties had resolved all questions of valuation of real property, both in Australia and in Europe;
§the husband’s Senior Counsel advised that he did not require Dr Z or Prof AA to attend for cross examination and that their evidence could be read by the Court and received into evidence;
§the husband’s application for costs to be reserved was unsuccessful, but my decision was recorded as being subject to the qualification that the parties could make further submissions to me at the conclusion of the defended hearing as to the costs of that hearing and which could incorporate matters of the preparation and state of evidence of the hearing on that day, though it was noted that the inability of Senior Counsel for the wife to then appear was recorded as being a matter that would not be the subject of any further application for costs sought.
6 SEPTEMBER 2012
The matter was listed before me to confirm that all Court orders had been complied with and that the matter would be ready to commence a three day defended hearing as listed. Again it was confirmed that all property valuations and the foreign exchange rate had been agreed upon. Otherwise Counsel then appearing confirmed the estimate of three days duration for the whole of the trial including legal submissions.
29 OCTOBER 2012
Given the illness to Mr Davis, and with Senior Counsel being briefed to represent the wife, I ordered a transcript of the part-heard hearing be taken out by the Court at its expense and made available to the parties on or before 10 November 2012.
Further the solicitors agreed to an additional withdrawal of a sum of $100,000 from the National Bank Line of Credit and such monies were apportioned as to $50,000 to each of the solicitors and that order was made by consent
28 NOVEMBER 2012
During the latter part of the hearing both Senior Counsel and solicitors finally turned their attention to the inadequate evidence as to valuation of furniture and substantial items of jewellery. An order was made permitting the husband to have a valuer enter the wife’s residence for the purposes of preparing a written report and valuation of furniture and chattels therein, the wife having obtained during the hearing, but not filed, her valuation of such items.
As to jewellery and watches I directed that all items identified by the parties were to be produced to a qualified valuer to obtain a current market valuation of each item, at the joint expense of the parties.
18 DECEMBER 2012
Consent orders were submitted to the Court facilitating a further draw down on the Line of Credit in the total sum of $80,000, that was $40,000 for each of the parties with those monies to be paid to their solicitors. Further Orders were made by consent restricting the access of either party to the National Australia Bank feeder account and directing that all rental repayments from the two investment properties were to be paid directly in reduction of the Line of Credit facility.
STANDARD OF PROOF
Section140(1) of the Evidence Act1995 (Cth) provides that a Court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities. Sub-paragraph (2) further provides that, without limiting the matters that the Court may take into account in deciding whether it is so satisfied, it is to take into account:
(a) the nature of the cause of action or defence; and
(b) the nature of the subject – matter of the proceeding; and
(c) the gravity of the matters alleged.While Dixon J’s classic discussion in Briginshaw v Briginshaw (1938) 60 CLR 336 of the operation of the civil standard of proof does express the considerations which s 140(2) of the Evidence Act1995 (Cth) requires a court to take into account, the correct approach, as observed by Branson J (with whom French and Jacobson JJ agreed) in Qantas Airways Ltd v Gama (2008) 247 ALR 273, at para 139 is that :
. . . references to, for example, “the Briginshaw standard” or “the onerous Briginshaw test” . . . have a tendency to lead a trier of facts into error. The correct approach to the standard of proof in a civil proceeding in a federal court is that for which s.140 of the Evidence Act provides.
Similarly, in Johnson & Page (2007) FLC 93-344, at 81,891, the Full Court of this Court expressly agreed with the view “that reference to the Evidence Act”, is proper, I have therefore applied this section in my deliberations.
I have assessed the evidence of the parties on that required standard. I have balanced my findings against the availability of local and overseas witnesses and supporting documents, the explanation of the parties themselves and inferences that could or have been properly drawn. The importance surrounding the initial financial contributions alleged by the wife from her mother are matters which I have conscientiously reflected upon at the required standard of proof and what was most probable in all of the circumstances, including the subsequent financial actions and transactions of the parties in Australia.
OBSERVATION OF WITNESSES
I have had the benefit of observing all of the parties in giving their evidence and being cross examined and also in observing them in the courtroom including their demeanour and behaviour. My observations of them have been of real assistance in formulating appropriate orders. Those observations are acutely available to a trial judge and the legal authority for such a position is that part of the judgment of Kirby J in Government Insurance Office of New South Wales v Bailey (1992) 27 NSWLR 304 at page 313 where it is said:
By conventional theory, the observations made by a trial judge of the appearance and demeanour of a witness giving evidence are not only available to be used in the determination of a dispute but amount to important ingredients of the decision-making process. They normally provide the primary decision-maker a distinct advance which controls, and even limits, the exercise by the appellate court of its statutory functions in an appeal by way of re-hearing. … (citations omitted).
I have had the significant benefit of hearing all of the evidence in its entirety, of reading carefully all of the affidavits, the annexures and the other exhibits in the proceedings. I have reflected upon and have carefully weighed all of the evidence prior to delivering these reasons for judgment. I stress that, in this case, my court observations of the parties, and particularly of the husband, were of benefit and importance.
MATHEMATICAL APPROACH
I have not been persuaded to adopt a strict mathematical approach notwithstanding the very focused financial approach of both parties, but in particular the wife and her advisors, with the financial and subpoenaed documents she prepared and the exhibits introduced into evidence.
In Norbis and Norbis (1986) 161 CLR 513 at p.522 – 523 in the judgment of Mason and Deane JJ it was said:
In G and G, a case decided after Mallet and the decision of the Full Court in the present case, Nygh J. expressed his agreement with the proposition ‘that it cannot be required of the Family Court that it assesses contributions with mathematical precision with respect to each item.
. . .
In this respect we agree with the comment of Nygh J. in G and G that, although mathematical precision is certainly not required, there is ordinarily a need to know the circumstances in which assets were acquired and the general extent of each party’s contribution to them.
In Hunt & Zuryn (2005) FLC 93-226 at p 79,730 the Full Court per Kay, May and Boland JJ said:
Such an assessment ought adequately recognise that much of the parties’ wealth can be attributed to the capital growth in the assets introduced by the husband at the commencement of the marriage but at the same time bring into consideration the myriad of other contributions each made in the course of their relationship.
In Clives & Clives (2008) FLC 93-385 at p 44 the Full Court per Warnick, Boland and Cronin JJ said:
We accept that the task to be undertaken by a trial judge in assessing weight to be attached to initial contributions, and other contributions, is not always an easy one and not discharged by a strict accounting exercise.
In Garrett & Garrett (1984) FLC 91-539 at p 79,372 the Full Court per Evatt CJ, Lindenmayer and Strauss JJ said:
The wide and indefinite terms of para (a) themselves suggest that where appropriate, and certainly in a case like the present, a broad estimate of the financial contribution of each party must be made. Under sec. 79(4)(b) non-financial contribution of each is to be taken into account. This must of necessity be a matter of judgment and not of computation. Similar indications can be found amongst the relevant matters in sec. 75(2). It is also worth noting that para. (a) and (b) refer to the “contribution” and not to the contributions of each party.
In this case it has been possible to determine with some degree of accuracy what the parties brought into the marriage and what they received during cohabitation from their respective families. However, the long term significance of these contributions is not determined as a mathematical exercise. They enhanced the life style of the parties and their children who all benefited from them.
Whilst I have carefully evaluated all of the financial evidence and particularly the contributions made by or on behalf of the parties and the s 75(2) factors I have done so without a rigid and specific mathematical approach, though of course I was at all times acutely aware of the financial impact of and the outcome of my orders. I endorse the statement of the Full Court in Garrett’s case that the long term significance of the various contributions made by each of the parties enhanced their lifestyle and that of their adult children and they have each benefited from their work and effort over the marriage and the resulting net asset pool now available to be divided between them.
I have endeavoured to follow the flow of money through various bank accounts but in some instances the evidence has been unsatisfactory and there has not been meaningful answers provided, especially where there has been a transfer or overlap of funds between accounts or whether the source of the funds remained in issue. That said, I have found a net asset pool that was supported by the evidence, adjusted by my discretion and findings where appropriate, and which provided the basis for the just and equitable division of property.
FAMILY LAW ACT 1975 (CTH)
The proper approach to determining a s 79 application is now well established, both by the Act and by case law (see, for example, Davut and Raif (1994) FLC 92-503; Clauson and Clauson (1995) FLC 92-595; Mallet v Mallet (1984) 156 CLR 605; Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143; Waters & Jurek (1995) FLC 92-635 and Norbis v Norbis (1986) 161 CLR 513).
Section 79(2) requires that any order made by the Court must be just and equitable and provides that:
The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
Section 79(1) of the Act directs a Court to make such an order as it considers appropriate. As has been highlighted by Cronin J in Bulleen & Bulleen (2010) 43 Fam LR 489 at paragraphs 34-45 (inclusive), the process by which the Court determines such an order may appear arbitrary and without any particular arithmetical approach, but that is the way in which the Act was drawn, proclaimed and has served out community from 1975. It is discretionary and it was observed that “it is also not governed by morality but fairness”.
It is therefore a balanced and properly explained assessment by a trial judge having heard and carefully evaluated all of the admissible facts and evidence of what division of property and what other orders are to be made between the parties to achieve a just and equitable result. That is the process which I have carefully undertaken and explained within these reasons for judgment.
The “extraordinarily wide” discretion of a trial judge determining a s 79 application was recently highlighted by Murphy J in Smith & Fields [2012] FamCA 510, where his Honour said at para 27:
However unsatisfactory or uncomfortable an “extraordinarily wide” discretion may feel for a trial judge, it is the exercise of precisely that which the section requires and it is precisely that which confronts a trial court – albeit informed by the mandatory considerations inherit in s 79…The very wide discretion inherent in s 79 requires the Court “…to do justice according to the needs of the individual case, whatever its complications might be” [Norbis v Norbis (1986) 161 CLR 513 at 520, per Mason and Deane JJ]. That necessarily involves an acknowledgment that the circumstances of each marriage are different and that it is to those particular circumstances to which the discretion must be applied.
In considering the relevance of the percentage distribution in past decisions to the exercise of that judicial discretion, Murphy J in Smith & Fields (supra) went on to say at para 88 that:
In my view, it is appropriate…to take account of earlier decisions so as to inform generally the parameters of the discretion. However, care must be exercised; orders in any given case are about effecting individual justice by reference to individual circumstances and it is imperative that reference to those decisions should not be used as a fetter on the wide discretion inherent in the section.
It is commonly accepted that the preferred approach to s 79 application involves a four step exercise, which I have undertaken in this judgment, namely:
§the identification of the property of the parties including their assets, financial resources and the net of their liabilities;
§the evaluation of the “contributions” or s79(4) issues;
§the evaluation of the matters referred to in s 75(2); and
§a determination as to whether the result is just and equitable by reference to section 79(2) of the Act. In determining whether the outcome is just and equitable it is “the real impact in money terms which is ultimately the critical issues” (JEL v DDF (2001) FLC 93-075, at para 140, citing the Full Court in Clauson & Clauson (supra) at page 81,911).
In considering the alteration of property interests in this case I have identified the net assets of the parties, accepted the agreed equality of contributions during the marriage and then evaluated the other contributions made before marriage and after separation. I have throughout this judgment identified and evaluated all such issues and findings. The reference point for the just and equitable requirement is clearly emphasised by the decision of the Full Court in Hickey (supra) where it was said at page 78-386 that:
The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s. 79. That approach involves four inter- related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss. 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss. 79(4)(d), (e), (f) and (g), (“the other factors'') including, because of s. 79(4)(e), the matters referred to in s. 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case…[references omitted]
Although the above four step process is commonly accepted as the preferred approach, it is by no means mandated by the Act, as was noted by Bryant CJ and Thackray J in Martin & Newton (2011) FLC 93-490, where at p 86-127 it was said that the four step approach:
…is not legislatively mandated, and as the Full Court said, is simply the preferred approach. This is because it will be sufficient, in most cases, to have regard to the overall justice and equity of the orders after determination of the asset pool, consideration of contributions and assessment of the relevant s 75(2) matters.
But in our view, there is no requirement that the justice and equity of the order as prescribed by s 79(2), must only be considered at the fourth (and last) stage. In our view, the requirement to make an order that is just and equitable permeates the entire decision making process, and it is not impermissible to consider it at an earlier point if the particular case requires it.
In this case I have assessed the s 79 application using the preferred four step approach. I have nonetheless always had the justice and equity of the orders at the forefront of my mind and that requirement has permeated my “entire decision making process”.
There is a very significant obligation imposed upon the Court, in the exercise of its judicial discretion, to assess, balance and evaluate all contributions under the umbrella of s 79(4) and for the exclusive purpose of concluding a just and equitable order.
The mandatory prescription of the Act is to evaluate contributions. In Pierce v Pierce (1999) FLC 92-844 at p 85-881 the Full Court per Ellis, Baker and O’Ryan JJ said:
There is an obligation on a trial judge not only to identify the relevant contributions but also to assess them.
It is necessary for courts to assess both the “value” and “the quality with which a particular role was performed” and a very helpful assessment of this concept is developed by Warnick J in SL & EHL [2005] FamCA 132, in particular paragraphs 233-190 (inclusive) and by Cronin J in Bulleen (supra).
It is not the purpose of the relevant provisions of the Act to “equalise the financial strengths of the parties” (per Wilson J in Mallet (supra)). I have carefully safeguarded against utilising the provisions of s 79(4) of the Act as a “source of social engineering or as a means of evening up the financial positions of the parties” (per the Full Court in Kennon & Kennon (1997) FLC 92-757 at p 84,303).
The property and superannuation that she has had, or will retain, is as follows:
§G Street, Suburb T $1,010,000
§K Town home $225,581
§K Town land $28,272
§wife’s jewellery $33,000
§wife’s motor vehicle 1 $40,000
§Telstra shares $2,000
§wife’s household chattels $7,390
§wife’s monies $343,510
§wife’s superannuation $167,202
§wife’s surrendered superannuation $57,897
$1,914,852
The likely adjustment to be paid to her by the husband on the basis of her 55 per cent division of the net assets is subject to the sale of properties at Suburb Q and S Street, Suburb T, the actual total tax liability and the actual Line of Credit debt and therefore must then be calculated after those issues are all finalised. These monies, as the final calculated adjustment, are either to be paid from the husband’s balance of the interest bearing trust account monies set aside for the payment of ATO taxes and liabilities or otherwise by the husband personally.
PROPERTY RETAINED BY HUSBAND
The husband has retained a sum of $396,524. Significantly he has other property in Europe upon which he has expended the sum of $197,673 but that is in property which I am satisfied he either controls or can redirect to his sole name. He has superannuation entitlements of $164,210. He will retain the two European properties and his motor vehicle 2.
What is significant is that he has invested monies in Europe of $179,943. Offsetting that available cash sum however is that he will acquire ownership of Suburb K which is a modest property when compared to the wife’s retention of the home and the difference in valuation between those two properties is $395,000.
The husband has likewise spent, or paid to his solicitors much of the monies within Australia that he had retained in cash or bank savings. His recently borrowed $90,000 has been paid to his solicitors.
It is difficult to accurately assess what other monies in Australia remain though, on the basis of his most recently filed Financial Statement, as at 3 September 2012 he disclosed no onshore savings or other cash monies. As such that is an important matter to balance in the overview of determining a just and equitable outcome.
The husband will by the orders retain property, assets or monies had or now invested as follows:
§Suburb K $615,000
§L Town $98,052
§M Town $99,255
§Motor vehicle 2 $17,000
§cash monies had or retained (Australia) $396,524
§European monies $170,943
§other Europe properties $197,673
§superannuation $164,210
$1,758,657
As with the wife the net adjusted sum retained by the husband will vary subject to the sale price of both properties, the total tax liability and whether there is a remaining shortfall on the NAB Line of Credit, and accrued interest thereon. All of these variables will need to be recalculated by the parties and their solicitors and the ultimate sum that likely will be paid by the husband to the wife will need to be adjusted accordingly.
From his balance of cash monies received the husband must forthwith repay to the third respondent the subpoena costs of $612.
FOURTH STEP – OVERALL JUSTICE AND EQUITY
I have therefore reflected on what I have found to be the final net asset pool, subject to the outstanding issues, and the division of assets as to 55 per cent to the wife and 45 per cent to the husband, subject to the particular Orders that I have pronounced. I conclude that this division of property does justice between the parties and that no further variation of my Order is required.
MONETARY EFFECT OF ORDERS
By awarding to the wife a loading of 5 per cent, rather than the adjusted total loading of 13 per cent she had sought, there is a 10 per cent differential between the final property outcome received and retained by the wife as contrasted to the husband. That differential is $363,648, but always subject to the financial conclusion of all remaining issues.
In the circumstances of this case, and all of my findings, I conclude that is proper and reflects a just and equitable outcome. I take this opportunity however to repeat that the actual dollar sums will vary depending upon the net sale price achieved for both Suburb Q and S Street, Suburb T and upon the final ATO liability inclusive of all additional costs, expenses and interest. Thus the parties and their solicitors must make final adjustments upon the reasoning set out in this Judgment.
COSTS
I have reserved the question of costs of all parties. Each of them sought costs orders in their formal applications before the Court and all parties now have twenty-eight days to file written submissions as to the quantum of costs sought and as to the basis upon which they seek for them to be paid.
The husband and wife must also address the question of payment of costs reserved by her Honour Justice Macmillan on 22 March 2012 and 27 April 2012 as I will decide the issue of the payment of those costs, or otherwise, together with all related costs questions.
I have ordered that the husband pay the $612 costs fixed but reserved by Registrar Kaur in favour of the third respondent in the proceedings on 27 January 2012.
I certify that the preceding Five Hundred and Seventy Seven (577) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Young delivered on 21 December 2012.
Associate:
Date:
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
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Tax Law
Legal Concepts
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Costs
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Discovery
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Injunction
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Jurisdiction
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Remedies
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Statutory Construction
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