Douglas and Douglas

[2009] FamCA 1303

FAMILY COURT OF AUSTRALIA

DOUGLAS & DOUGLAS [2009] FamCA 1303

FAMILY LAW – PROPERTY SETTLEMENT – Assets and Liabilities – Contributions – Adjustments – Just and equitable

Family Law Act 1975 (Cth) Sections 75 & 79

In the Marriage of Hickey (2003) 30 Fam LR 355
Wilde v Wilde [2007] FamCA 1044
In the Marriage of Omacini (2005) 33 Fam LR 134
Mallett v Mallett (1984) 9 Fam LR 449
In the Marriage of Ferraro (1992) 16 Fam LR 1
In the Marriage of Shewring (1987) l2 Fam LR 139
In the Marriage of Lenehan (1987) 11 Fam LR 615
In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712
In the Marriage of Zyk (1995) 19 Fam LR 797
In the Marriage of Coghlan (2004) 33 Fam LR 414

APPLICANT: Mr Douglas

RESPONDENT: Ms Douglas

FILE NUMBER: SYC 6556 Of 2007

DATE DELIVERED: 17 December 2009

PLACE DELIVERED: Sydney

JUDGMENT OF: Judicial Registrar Loughnan

PLACE HEARD:  Newcastle

HEARING DATE: 19 & 20 November  2009

REPRESENTATION

COUNSEL FOR THE APPLICANT 

HUSBAND:

Mr M. Graham

SOLICITOR FOR THE APPLICANT:

Peter Hudson Lawyers

COUNSEL FOR THE RESPONDENT 

WIFE:

Mr J. Hamilton

SOLICITOR FOR THE RESPONDENT

Tonkin Drysdale Partners

Orders

1. Within two (2) calendar months (“the due date”) the husband shall pay $248,983 (“the sum”) to the Solicitors for the wife on the wife’s behalf.

2. Upon the payment of the sum the wife do all acts and things and execute all documents submitted to her by the husband to transfer to the husband all her right, title and interest in property and premises situated and known as N property, being the whole of the land in Folio Identifier … (“the home”).

3. The husband indemnify the wife and keep her indemnified in respect of all encumbrances, charges, rates and other statutory liabilities arising in respect of the home.

4. Should the husband fail to pay the sum by the due date the following provisions apply:

   (a)the husband and wife shall do all acts and things and execute all documents to sell the home by private treaty at a price agreed by the parties but in default of agreement at a price nominated by a Real Estate Agent appointed by the wife to sell the home;

   (b)should the home not be sold within 5 months by private treaty the husband and wife shall do all acts and things and execute all documents to sell the home by public auction at a reserve price agreed by the parties but in default of agreement at a reserve price nominated by an auctioneer appointed by the wife;

   (c)that pending completion of the sale of the home the husband have the right to sole occupancy thereof subject to:

   (i)keeping the home fully insured and making insurance payments as such payments fall due;

   (ii)keeping the home in good repair and in a tidy condition having regard to its present condition;

   (iii)the husband paying the outgoings as such payments fall due;

   (iv)the husband making the home available for inspection by prospective purchasers at all reasonable times;

   (v)the husband obeying all reasonable directions from the selling agent and/or selling auctioneer.

   (d)that the husband and wife do all acts and things and execute all documents to cause upon completion of the sale the proceeds of sale to be paid as follows:

   (i)agent’s fees and auction fees (if any);

   (ii)rate adjustments;

   (iii)legal costs of sale;

   (iv)51% of the net proceeds of sale to the wife;

   (v)the balance to the Husband.

5. The wife shall forthwith do all acts and things and execute all documents submitted to her by the husband to transfer to the husband all her right title and interest in and shareholding of S Pty Limited (“the company”).

6. The husband shall indemnify the wife and keep her indemnified in respect of any liability arising from:

   (a)the former directorship of the wife in the company;

   (b)the wife’s shareholding ownership in the company;

   (c)any loan by the Wife to the company.

7. Forthwith upon the making of these orders the husband shall do all acts and things and execute all documents and cause the S Superannuation Fund to do all acts and things and execute all documents to cause the wife’s interest in the fund to be paid to a superannuation fund nominated by the wife.

8. The husband shall do all acts and things and execute all documents to transfer otherwise to the wife all his right title and interest in any personalty and financial resources in the possession or control of the wife.

9. The wife shall do all acts and things and execute all documents to transfer otherwise to the husband all her right title and interest in any personalty and financial resources in the possession or control of the husband.

10. Should a party refuse or neglect to sign any document or implement the above Orders within seven (7) days of a written request to do so the Registrar of the Newcastle Registry of this Court be appointed pursuant to Section 106A to sign such document on behalf of the defaulting party and to do all acts and things to give validity thereto.

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

FAMILY COURT OF AUSTRALIA AT NEWCASTLE

FILE NUMBER: NYC 6556 of 2007

MR DOUGLAS

Applicant

And

MS DOUGLAS

Respondent

REASONS FOR JUDGMENT

1. After living together for more than 19 years, the parties cannot agree on a settlement of their property.

Applications

1. The husband seeks orders in different terms to that expressed in his Application. Those terms were not available during the hearing. I ordered that a minute of the orders sought by the husband be provided to counsel for the wife and to my chambers within 7 days. The husband seeks orders in terms of a Minute provided to my chambers under cover of a email of 30 November 2009, as follows:

   1.That the Wife transfer to the Husband the whole of her right, title and interest in the property situate and known as [N] (the former matrimonial home) being the land described in Folio Identifier […] subject to existing encumbrances.

   2.In order to give effect to order 1 above, that the Husband’s solicitor prepare the Transfer and all other necessary documents to give effect to these orders.

   3.That the Wife execute the documents and return same to the Husband’s solicitor within 14 days of the documents being received by the Wife and/or her solicitor for execution.

   4.The Husband indemnify, and keep indemnified, the Wife in respect of any liability for the existing St George Bank Ltd loan presently secured against the former matrimonial home.

   5.The forthwith upon the making of these Orders the parties do all acts and things and sign all documents necessary to list the business “[S Pty Ltd]” for sale by private treaty and the following provisions apply:

   5.1The price be $152,000.00.

   5.2The business broker to be [R Broker], the cost to be borne equally by the parties.

   5.3Peter Hudson – Solicitor conduct the sale on behalf of the parties.

   5.4The business be listed by private treaty for a period of six (6) months following the making of these Orders.

   5.5That on the sale of the business the nett proceeds be paid as follows:

   i.In payment of the business broker’s commission and legal costs of sale

   ii.To the Husband one half of the balance then remaining

   iii.To the Wife the other half of the balance then remaining.

   6.The parties within the earlier of either:

   (a)6 months from the date of these Orders, or

   (b)28 days from the settlement of the sale of the business “[S Pty Ltd]”

   do all acts and things and sign all documents necessary to wind up the company “[S] Pty Limited”.

   7.The parties each pay to the Australian Taxation Office one-half of any liabilities due to it by the company [S] Pty Limited.

   8.(a)   The parties do all acts and things and sign all documents necessary to pay to a superannuation fund of the Wife’s choice her entitlement in the [S] Superannuation Fund (such entitlement being as set out in the report of [Y] Accountants dated 21 July 2009).

   (b)The Wife to then resign as a trustee and member of the [S] Superannuation Fund.

   9.That other than as provided herein, the Wife transfer to the Husband all of her right, title and interest in any item of property or personalty in the Husband’s possession and or control as at the date of Orders.

   10.That other than as provided herein, the Husband transfer to the Wife all of his right, title and interest in any item of property or personalty in the Wife’s possession and or control as at the date of Orders.

2. The wife seeks orders in terms of a Minute of Orders as follows:

   1That the Husband pay within two (2) calendar months (“the due date”) $300,000.00 (“the sum”) to the Solicitors for the Wife on the Wife’s behalf.

   2That should the Husband fail to pay by the due date the sum, interest apply thereafter at the rate prescribed from time to time by the Rules until payment.

   3Upon the payment of the sum the Wife do all acts and things and execute all documents submitted to her by the Husband to transfer to the Husband all her right, title and interest in property and premises situated and known as [N property] being the whole of the land in Folio Identifier […] (“the home”).

   4The Husband indemnify the Wife and keep the Wife indemnified in respect of all encumbrances, charges, rates and other statutory liabilities arising in respect of the home.

   5That should the Husband fail to pay the sum by the due date the following provisions apply:

   (a)the Husband and Wife do all acts and things and execute all documents to sell by private treaty the home at a price agreed by the parties but in default of agreement at a price nominated by a Real Estate Agent appointed by the Wife to sell the home;

   (b)should the home not be sold within 5 months by private treaty the Husband and Wife do all acts and things and execute all documents to sell the home by public auction at a reserve price agreed by the parties but in default of agreement at a reserve price nominated by an auctioneer appointed by the Wife;

   (c)that pending completion of the sale of the home the Husband have the right to sole occupancy therefore subject to:

   (i)keeping the home fully insured and making insurance payments as such payments fall due;

   (ii)keeping the home in good repair and tidy condition having regard to its present condition;

   (iii)the Husband paying the outgoings as such payments fall due;

   (iv)the Husband making the home available for inspection at all reasonable times by prospective purchasers;

   (v)the Husband obeying all reasonable directions from the selling agent and/or selling auctioneer.

   (d)that the Husband and Wife do all acts and things and execute all documents to cause upon completion of the sale the proceeds of sale to be paid as follows:

   (i)agent’s fees and auction fees (if any);

   (ii)rate adjustments;

   (iii)legal costs of sale;

   (iv)the sum plus interest accrued pursuant to these Orders to the Wife;

   (v)the balance to the Husband.

   6That the Wife do all acts and things and execute all documents submitted to her by the Husband to transfer to the Husband all her right title and interest in and shareholding of [S] Pty Limited (“the company”).

   7That the Husband indemnify the Wife and keep the Wife indemnified in respect of any liability arising from:

   (a)the former directorship of the Wife in the company;

   (b)the Wife’s shareholding ownership in the company;

   (c)any loan by the Wife.

   8That the Husband do all acts and things and execute all documents and cause the company to do all acts and things and execute all documents to cause the Wife’s interest in the [S] Superannuation Fund to be paid to a superannuation fund directed by the Wife.

   9That the Husband do all acts and things and execute all documents to transfer otherwise to the Wife all his right title and interest in any personalty and financial resources in the ownership or control respectively of the Wife.

   10That the Wife do all acts and things and execute all documents to transfer otherwise to the Husband all her right title and interest in any personalty and financial resources in the ownership or control respectively of the Husband.

   11That should a party refuse or neglect to sign any document or implement the above Orders within seven (7) days of a written request to do so the Registrar of the Newcastle Registry of this Court be appointed pursuant to Section 106A to sign such document on behalf of the defaulting party and to do all acts and things to give validity thereto.

Documents read

1. The parties relied on the following documents:

   Husband’s affidavit sworn and filed 15 October 2009

   Husband’s Financial Statement filed 15 October 2009

   Wife’s affidavit sworn 28 September 2009 and filed 29 September 2009

   Wife’s Amended Financial Statement filed 29 September 2009

   Affidavit of Mr K affirmed 28 September 2009, filed 29 September 2009;

   Affidavit of Ms P sworn 30 September 2009 (Affidavit of wife’s expert in respect of Wife’s psychological condition);

   Affidavit of Ms D sworn 21 July 2009 (Single Expert in respect of value of S Pty Limited, S Superannuation Fund and Trust);

Short history

1. As at the date of the hearing the husband was 40 years of age and the wife was 44. They started living together upon marriage in April 1987 and separated on 1 May 2006. The parties’ marriage was dissolved by order dated 6 November 2007.

Children

1. There are two children of the marriage:

   Lwas born in April 1991 and as at the date of the hearing he was 18 years of age; and

   M was born in January 1995 and as at the date of the hearing he was 14 years of age.

Issues

1. I understand the following issues fall to be determined:

   ·    The financial circumstances of the parties prior to separation – in particular the circumstances of the Husband purchasing in 2001 a property in which his father resided and the subsequent sale of this property.

   ·    The significant issues as far as contributions are concerned appear to arise mainly after separation, namely:

   othe increase by the Husband of his loan account since separation;

   othe quantum of the Wife’s post separation receipt of money and whether all of the money should be regarded as a notional asset or the Court should consider only the assets that she has in her possession as a result of her receiving that money.  The Wife concedes that she has received since separation the following payments:

   (i)withdrawal from the parties’ joint account (about the time of separation - $10,000.00;

   (ii)receipt of refund of income tax - $21,000.00;

   (iii)withdrawal on her behalf from St George account on 16 February 2007 - $24,950.00;

   (iv)withdrawal made on her behalf from St George account on 15 March 2007 - $7,401.50;

   (v)withdrawal made on 4 April 2007 on her behalf of $228,208.00;

   ·    In particular, whether by way of an add-back to the balance sheet the wife should be credited not only with the N property at $240,000  but also with:

   o   the purchase costs of that property @ $20,000;

   o   her tax refund of $21,000; and

   o   the various payments and withdrawals received/made by her after separation - $53,000

   ·    Whether $100,000 paid by the husband to Mr C should be included as a notional asset in the hands of the husband;

   ·    Whether the husband’s contributions after separation exceeded those of the wife;

   ·    Whether Ms W is a financial resource to the Husband. 

   ·    The earning capacities of the parties.

   ·    The future needs (I take it - section 75(2)) adjustments for the parties;

   ·    Whether, despite the fact that the husband does not want the business, it should be valued in his hands, at the value assessed by Ms D or sold and the proceeds divided;

   ·    Whether by way of an add-back to the balance sheet the wife should be credited with $22,500 for the Ford Fairmont she retained after separation or $7,000 being the trade-in allowance received by the wife on a Ford Festiva motor vehicle;

Background facts

1. The parties met in 1987, through the wife’s brother.

2. They were married in April 1987 and started living together thereafter.

3. Neither of the parties had any assets of significance. The wife was working as a Nanny, from 9.00 am – 3.00 pm, five days a week. The husband was a University Student.

4. Prior to the parties’ wedding, the husband’s father bought B property, on which there was a burnt out shell of a house. The husband thinks the property was bought for about $30,000, which was borrowed from a member of his family. The property was restored and the husband’s father paid for all of the materials.

5. The husband says that he and his father undertook the physical work of restoring the property. The wife says she helped too. Neither of the parties was cross-examined on this issue. It is not possible to make a finding about it.

6. On 16 December 1987 the husband’s father transferred the property at B to the husband and wife for $50,000.00

7. The parties started making repayments on the $30,000 loan.

8. The parties moved into the home after the wedding.

9. The husband dropped out of university in 1988 and went to work for G Company. The wife lost her job as a Nanny about 12 months after the wedding and started work with a shop. After 6 months she left and she too started work at G Company. She worked there until she was 5 months pregnant with L.

10. L was born in April 1991.

11. On 31 May 1991 the parties sold the B property for about $112,000 and bought R property for $130,000. They borrowed $50,000 from the St George Bank.

12. On 2 November 1992 the parties borrowed from the St George Bank on the security of R property, a further sum of money to repay the husband’s father for the initial advance used to purchase the B property. The extended loan was about $80,000.

13. M was born in January 1995.

14. In 1996 the parties started S Business, at first while still working with G Company.

15. In January 1998 S Pty Limited was incorporated. The husband and wife were the Directors and they were equal Shareholders. S Pty Ltd is a production and distribution business. The business operated out of various rented and owned premises and ultimately out of the former matrimonial home.

16. The business was successful and the parties paid off the mortgage on the property and funded renovations, including a garage from which the business was operated.

17. On 5 October 2000 the parties bought F property for $345,000. On 30 October 2000 the parties sold the R property for $203,000. The wife says the parties then had a small mortgage, the husband says they owed about $150,000. The parties paid about $80,000 to landscape the property.

18. The business operated out of a granny flat at the F property. The husband ran the business. The wife was the primary homemaker and undertook studies for a qualification and secured HSC equivalence at Newcastle University.

19. In February 2001 the husband bought a property at O for $165,000, in which his father could live. His father was recently separated from his mother. The husband does not recall whether his father paid rent. The wife says that the husband’s father lived there rent free. The husband says that the purchase price was borrowed from his step-brother, Mr C. The husband says that he first met Mr C, many years later, upon their father’s death and again at the funeral. The property was sold in February 2002 or on 31 May 2002 and the loan to Mr C was repaid in April 2003. Husband allegedly sold the property in which his father lived for $205,000.

20. On 25 June 2004 the S Unit Trust bought the property at E for $360,000. The business thereafter operated out of those premises.

1. In 2004 the wife commenced consulting Psychologist, Dr MK for Anxiety and Depression.

2. In 2005 the wife was admitted to Hospital with a suspected heart attack. The wife was diagnosed to suffer from anxiety attacks and was prescribed Cipramil which was very effective.

3. On 17 March 2005 the wife resigned as a Director of S Pty Ltd.

4. On 10 October 2005 the parties bought N property for $515,000. As at the date of the hearing the husband continues to live in that property, with L.

5. On 16 December 2005 the parties sold the F property for $535,000.

6. In May 2006 the parties separated under the one roof at the N home.

7. In July 2006 the wife left the N home and initially moved to a hotel.

8. In August 2006 the wife moved to rental accommodation. She removed $10,000 from the joint account.

9. In October 2006 the children commenced to live with the parties for approximately equal time.

10. In January 2007 the E property, owned by S Enterprises, sold for $415,000.

11. In February 2007 the wife entered into a contract to purchase the property at V for $254,500. The husband withdrew $24,950 from St George joint account …48 (“the St George account”) for the deposit.

12. On 15 March 2007 the husband withdrew $7,451.50 from the St George account for disbursements for the V property.

13. On 4 April 2007 the wife withdrew $228,208 from the St George account to complete the purchase of the V property and she moved into the property.

14. In May 2007 the child L commenced to live primarily with husband and saw the wife about once a month. M continued spend half the time with each of the parents.

15. The parties were divorced on 6 November 2007.

16. On 8 May 2008 the husband filed an Application for Final Orders.

17. On 23 July 2008 the wife filed a Response.

18. On 11 August 2008 directions were made to prepare for a Conciliation Conference.

19. On 29 July 2009 the parties attended a Conciliation Conference. The matter did not settle and directions were made for Hearing. The matter was listed for hearing on 19 and 20 November 2009.

20. The husband’s father died in October 2009.

Credit and Submissions

The evidence of the witnesses

1. The only witnesses called for cross-examination were the parties, the wife’s fiancé, Mr K and the wife’s expert Psychologist, Ms P.

2. The husband was a poor witness. He was careless in swearing his Financial Statements and, on his own version of events, left a raft detail out of his affidavit. There is no mention in his affidavit of him borrowing $205,000 from members of his family or repaying it. Unfortunately in the lead up to the hearing and out of frustration that he says was caused by a failure of the wife to agree to settle the case, he had engaged in a series of transactions with the intention of pre-empting controversy in the proceedings. He says that was the reason he established a new company and later transferred his shares in that company to his partner and why he recently paid his step-brother $100,000. He made no real effort to disclose those transactions. That put him on the back foot during cross-examination. He did not call Mr C, his mother or his partner to give evidence in the case and therefore left much of his case supported only by his uncorroborated oral evidence.

3. The wife struggled through cross-examination. She became upset at times and needed questions clarified. However, she was not successfully challenged on any significant issue. I accept her as a witness of truth.

4. Mr K was a careful witness and was not successfully challenged on any important issue.

5. Ms P gave her evidence as an expert Psychologist. Her credibility is not in issue.

Submissions

1. The submissions made on behalf of the husband did not directly address the orders sought by the husband as those orders had not been formulated at the time of final submissions. The submissions on behalf of the husband are to the effect that the balance sheet should add back, as notional assets, all of the joint funds the wife has used since separation. She should notionally take the value of a Ford motor vehicle transferred to her from the company at $21,000, be credited with the purchase costs of the property bought for her after separation, an income tax refund and all of the advances made to her. It is submitted that the wife benefited from $356,125.33 of joint funds. On the other hand the amount repaid to Mr C should not be added back on the husband’s side of the ledger. It is conceded that the husband did not disclose all of the family dealings and that they are unusual but the Court should focus on the fact that the money came in and went out. The husband is a distributor, not an accountant and there is nothing sinister about him rounding out figures in his Financial Statements. Although he did not disclose Mr C’s involvement in the most recent financing of the V purchase, he was identified in relation to funding the O property purchase and therefore there was a precedent for the transaction.

2. It is submitted that the parties’ leave entitlements from S Pty Ltd should not be included in the balance sheet as there in no bank account or asset from which they can be paid. The husband should be credited with greater contributions since separation. It is the husband’s case that he made the only significant contribution after separation, advanced money to the wife, paid off the resultant debt, made the greater contribution to the children and it would be unfair to require him to pay the wife any significant sum.

3. As to the comparative earning capacities of the parties, the husband concedes that the wife suffers from an anxiety disorder but challenges the notion that she is fully exercising her earning capacity. It is submitted that the concessions made by Ms P about the basis of her opinions together with the inconsistency of the wife’s post separation activities and her asserted level of social dysfunction reveals that she exaggerates her incapacity. On the other hand he cites Ms D’s report for the proposition that the husband’s income from the business has been trending downwards from 2005 to date.

4. The written submissions on behalf of the wife are as follows:

1[V property] (Wife)  $240,000.00

2[N property] (Joint)  $520,000.00

3Ford Festiva (including trade in value of Ford) (Wife)    $7,000.00

4Mazda 3 (Husband)  $15,000.00

5[S] Superannuation (Wife)  $94,800.00

6[S] Superannuation (Husband)  $140,500.00

7Investment at St George Bank (Husband)                   $150,000.00

8Shareholding in [S] Pty Limited (Joint)  $152,000.00

9Interest in [S] Unit Trust (Joint)  $25,000.00

10Gross leave entitlements owing by [S] Pty Ltd (Husband) $90,026.00

11Gross leave entitlements owing by [S] Pty Ltd (Wife)   $36,399.00

12Household effects (Wife)  $3,000.00

13Hesta Superannuation (Wife)  $2,000.00

14Household effects (Husband)  $10,000.00

TOTAL ASSETS  $1,485,725.00

Liabilities

1Debt to [S Pty Ltd] (Husband)  $169,000.00

2Mortgage on [N property] (Joint)  $30,000.00

TOTALLIABILITIES  $199,000.00

NET ASSETS  $1,286,725.00

Notes in respect of Assets & Liabilities

1[S] Pty Limited, [S] Superannuation Fund, [S] Unit Trust, Husband’s liability to [S] and gross leave entitlements owing by [S Pty Ltd] are discussed by the valuer, [Ms D], in paragraph 2 of her report commencing on page 4.

2The Husband had at the time of the filing of his Financial Statement in May 2008 the sum of $150,000.00 in savings at the St George Bank.  The Husband’s most recent Financial Statement does not disclose the existence of that amount.  It may be necessary for the Wife to seek an adjournment of these proceedings to investigate the circumstances of the removal of this amount and if necessary to make an application under Section 106B of the Act.

3There would appear to be little or no controversy in respect of the value of the balance of the assets.

Contribution Factors

The parties cohabited for about 19 years during which there were two children.  Neither party had any significant assets at the commencement of cohabitation.  The Wife made the following contributions:

1As a director and shareholder of [S] Pty Limited which was incorporated on 21 January 1998.  [S Pty Ltd] is a [production] and distribution business which provided the majority of the income of the parties during the period of cohabitation.  In addition to the Wife’s [production] duties the Wife performed some administrative and [product] design duties for the company.

2The Wife contributed income to the relationship in the following forms of employment:

(a)  as a nanny for a period of about 12 months;

(b)as an employee of [a shop] for approximately 6 months;

(c)as an employee of [G Company] for approximately 5 months (Wife left this employment due to pregnancy with child [L]).

3The Wife contributed as a joint purchaser and borrower in respect of the properties at [B], [R], [F] and the home.

4The Wife contributed as an officer in the company and shareholder for the purchase of the property owned by the company.

5The Wife was during the period of cohabitation the primary carer of the children of the marriage and performed most of the household duties.

6Since separation the Wife has contributed as a parent to the children.

7The Wife has contributed as a sole purchaser of the property that she has acquired since separation.

8Since separation the Husband has had the benefit of the occupancy of the home.

9Since separation the Husband has had the benefit of the receipt of the income from the company notwithstanding that the Wife has been a joint shareholder thereof.

10Since separation the Husband has increased his loan account with [S] Pty Limited.  As at 30 June 2007 the Husband’s loan to the company was $37,002.00.  The Husband incurred a liability of $132,502.00 in the financial year 1 July 2007 to 30 June 2008 (see Appendix “C” to report of [Ms D] annexed to her Affidavit under the heading ‘Non current assets book value 30 June 2008’).

Factors under Section 75(2)

1The Wife is 44 years of age.  The Wife is in reasonable physical health but has some psychological difficulties.  These difficulties are referred to by the Wife in her evidence and in the report dated 20 September 2009 by [Ms P] which is annexed to her Affidavit.  The report summarises the Wife’s problems as follows:

(a)the Wife had an impoverished, austere and extremely restricted childhood.  She was raised to feel isolated, ashamed and abnormal;

(b)the Wife struggled academically; she never reached her academic potential;

(c)the Wife’s early adult life was fairly unsuccessful and unhappy.  She married at her family’s convenience and in keeping with her cultural expectation.  Her marriage was unhappy and unsatisfying;

(d)the Wife has experienced panic disorder all her adult life.  This appears to have begun at school, continued on through the birth of her children and peaked at the end of her marriage.  This panic disorder and social anxiety has had an ongoing and moderate to severe effect on the Wife’s functioning.  She has very limited social contact and limited employment.

2The Wife is employed at […] as an Accounts Manageress.  She has an income of $397.00 per week gross.  It is submitted that she has been employed there for approximately 12 months and it is submitted that this is her maximum earning capacity in regard to her psychological restriction.

3The Wife has been in a de facto relationship since May 2007 with [Mr K].  He is a part time [nurse] and has an income of $550.00 per fortnight and limited assets.  [Mr K] has sworn an Affidavit giving his financial circumstances and details of his relationship with the Wife.

4There is one child of the marriage and the parties have an equal shared care arrangement in respect of that child.

5The Husband is 40 years of age and is in good health.

6The Husband has been involved in [distribution] for many years and it is the Wife’s submission that he will continue in [distribution].  The Husband alleges that he is leaving the [distribution] world.  The Wife believes that this is untrue and stated for the purposes of a claim for adjustment under Section 75(2).  The Wife is seeking that she transfer her shares and interest in the company to the Husband.  He will then have the benefit of continuing to run the [distribution] business which has always been successful (although the Husband tries to minimise its future prospects).  The Husband will in addition have the benefit of taxation avoidance which will arise from his ownership of the company and the running of the business by the company.  The Husband states that he has an income of $500.00 per week, however the company generates significant income and it is the Wife’s submission that the Husband has a capacity of earning more than $2,000.00 per week.

7The Husband is in a de facto relationship with [Ms W] who is aged 40 years.  This information is disclosed in his Financial Statement filed 15 October 2009.  No other information has been given in respect of her financial position.  A Subpoena has been issued to her to produce her financial records.

Issues in Proceedings

1There does not appear to be any significant dispute regarding the financial circumstances of the parties prior to separation except for the circumstances of the Husband purchasing in 2001 a property in which his father resided and the subsequent sale of this property.

2The significant issues as far as contributions are concerned appear to arise mainly after separation, namely:

(a)the increase by the Husband of his loan account since separation;

(b)the quantum of the Wife’s post separation receipt of money and whether all of the money should be regarded as a notional asset or the Court should consider only the assets that she has in her possession as a result of her receiving that money.  The Wife argues that all money received by her since separation should be considered as a notional asset.  The Wife argues that the Wife had limited income after separation and had to rely upon part of the assets received by her after separation for her financial support and re-housing.  It should be noted that the Wife concedes that she has received since separation the following payments:

(i)withdrawal from the parties’ joint account (about the time of separation - $10,000.00;

(ii)receipt of refund of income tax - $21,000.00;

(iii)withdrawal on her behalf from St George account on 16 February 2007 - $24,950.00;

(iv)withdrawal made on her behalf from St George account on 15 March 2007 - $7,401.50;

(v)withdrawal made on 4 April 2007 on her behalf of $228,208.00;

(c)the Husband argues that he owed his father $100,000.00 for post separation conduct.  The Wife does not admit this liability;

(d)the Husband has apparently disposed of $150,000.00 since separation.

3The Wife argues that the Husband has a much stronger future financial position than the Wife because he has the ability to run the company.  The Husband denies this and alleges that he wishes to re-educate himself and to join […], a non profit making organisation.

4The Wife argues that [Ms W] may be a financial resource to the Husband.  The Husband provides no information in that regard.

1. For the purpose of oral submissions a further version of the balance sheet argued for on behalf of the wife had been produced as follows:

   1V property (Wife)  $240,000.00

   2N property (Joint)  $520,000.00

   3Ford Festiva (including trade in value of Ford) (Wife)             $7,000.00

   4Mazda 3 (Husband)  $15,000.00

   5S Superannuation (Wife)  $94,800.00

   6S Superannuation (Husband)  $140,500.00

   7Money held by Mr C on behalf of (Husband)  $100,000.00

   8Shareholding in S Pty Limited (Joint)  $152,000.00

   9Interest in S Unit Trust (Joint)  $25,000.00

   10Gross leave entitlements owing by S Pty Ltd (Husband)       $90,026.00

   11Gross leave entitlements owing by S Pty Ltd (Wife)               $36,399.00

   12Household effects (Wife)  $3,000.00

   13Hesta Superannuation (Wife)  $2,000.00

   14Household effects (Husband)  $10,000.00

   TOTAL ASSETS  $1,435,725.00

2. The difference being the treatment of item 7 in the table, of $150,000 that had been in the St George Account. It is argued for the wife that the husband has failed in his obligation of disclosure and therefore should not be accepted in relation to the repayment of moneys to Mr C. It is submitted that such a finding might adequately address this issue but that it should not be for the wife to make enquiries and find out the details of the husband’s undisclosed financial dealings. Further I should err on the wife’s side in relation to findings and adjustments. It is submitted that the parties’ contributions were equal overall. It is argued that the husband retained the sole benefit of the business after separation and therefore any imbalance of contributions by him was made through that joint asset. Balancing his contributions is the increase in his loan account by $132,000 to $169,000.

3. There should be an adjustment to the wife. Depending on the add-back findings the wife seeks an adjustment of between 2.5% and 15% and it is submitted that such an adjustment is within an acceptable range. The husband should be regarded as a person with an earning capacity in the range of $2,000 - $3,000 per week. The wife should be accepted as to her earning capacity. It is an agreed fact that she has an anxiety condition and that she was out of full-time paid employment for many years. She has in fact obtained and retained paid employment to the date of the hearing. I am asked to accept that is not the approach of someone seeking to minimise her earning capacity. The remaining child under 18 will spend equal time with the parents and there is a modest child support assessment requiring payment to the wife.

The approach in proceedings under section 79

1. The case law reveals that there is a permissible approach to the determination of an application brought pursuant to the provisions of s 79. That approach involves four inter-related steps. First, I am to make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Second, I should identify and assess the contributions of the parties within the meaning of s 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. Third, I should identify and assess the relevant matters referred to in s 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. Fourth, I should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case. [1]

   [1] This summary of the effect of the authorities is paraphrased from the comments of the Full Court in  In the Marriage of Hickey (2003) 30 Fam LR 355 at 370

2. There is no mention of steps in section 79 but it is convenient to approach the exercise of discretion in a structured way. The Full Court has supported such an approach.

The property of the parties at the date of the hearing

1. The Court is required to make a finding as to the property of the parties. That involves identifying assets, liabilities and financial resources and their values.

Disclosure

1. In Wilde v Wilde [2007] FamCA 1044 the Full Court quoted with approval a first instance decision about the requirement of financial disclosure in property proceedings:

   51.The need for parties in financial matters to make such disclosure is not in doubt.  In the seminal passage in Briese and Briese (1986) FLC 91-713 Smithers J said at 75,180 to 75,181:

   “I believe that a person in the position of the husband in this case has a positive obligation to set out at an early stage his financial position in a clear and comprehensive manner. The Regulations, and now the Rules, are not intended as a vehicle to mask the true position, or as an aid to confusion, complexity or uncertainty. They are not intended as the outer limits of the obligation of financial disclosure, but as providing avenues towards disclosure. The need for each party to understand the financial position of the other party is at the very heart of cases concerning property and maintenance. Unless each party adopts a positive approach in this regard delays will ensue with the consequent escalation of legal, accounting and other expenses, always assuming that a party has the strength to continue the struggle for information and understanding.

   …

   In my view it is fundamental to the whole operation of the Family Law Act in financial cases that there is an obligation of the nature to which I have referred. Livesey v. Jenkins makes it clear that mere compliance with rules of court or practice directions does not alter the basic principle of the need for full and frank disclosure by the parties.”

   (See also Oriolo and Oriolo (1985) FLC 91-653; Black and Kellner (1992) FLC 92-287; Weir and Weir (1993) FLC 92-338 and Kannis and Kannis (2003) FLC 93-135).

2. The husband was obliged to concede that he did not make adequate disclosure. That was a proper concession. His affidavit is silent as to some of the issues relied on in his own case. For example the husband was silent about establishing a new company and about subsequently transferring the shares in that company to his partner. Matters are complicated by the fact that many of the things the husband has done without notice to the wife or her permission were undertaken for reasons the husband perceived would assist him in these proceedings. On his own case he acted in certain ways in an attempt to circumvent issues in the case.

3. Even according to his own case he has been careless in completing his Financial Statement and Affidavit.

4. I am authorised to take a more generous approach to the wife’s claims in circumstances where the husband’s disclosure is not adequate. That is not to say that the Court is at large in relation to findings made in favour of the wife.

Add Backs

1. There are circumstances whereby assets are included in the list for division although they no longer exist. The same logic would apply to the exclusion from the relevant list of liabilities, debts that do exist at the date of the hearing. In the Marriage of Omacini (2005) 33 Fam LR 134 the Full Court noted:

   [30]     To date, three clear categories of cases have emerged where the court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:

   (a)      Where the parties have expended money on legal fees. In In the Marriage of DJM and JLM (1998) 23 Fam LR 396; (1998) FLC 92-816; [1998] FamCA 97 the Full Court said at [11.6]:

   [11.6] For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the Court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out.

   (b)      Where there has been a premature distribution of matrimonial assets. In In the Marriage of Townsend (1994) 18 Fam LR 505; (1995) FLC 92-569 Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at Fam LR 509; FLC 81,654:

   In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under section 75(2). It seems to me that the husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the husband’s receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.

   (c)      In the circumstances outlined by Baker J in In the Marriage of Kowaliw (1981) 7 Fam LN N13; (1981) FLC 91-092 at FLC 76,644:

   As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:

   (a)      where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or

   (b)      where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.

   Conduct of the kind referred to in para (a) and (b) above having economic consequences is clearly in my view relevant under s 75(2)(o) to applications for settlement of property instituted under the provisions of s 79.

2. The parties have settled most elements of the balance sheet. As to the outstanding issues:

S Pty Ltd

1. The business was valued by single expert Ms D. There is an issue between the parties about whether the business should be sold and the net proceeds divided or whether the business should be credited to the husband. I will deal with that issue in the context of the form of orders to be made, under the heading Just and Equitable, later in these reasons.

2. As to the value of the business. The husband does not challenge the valuation. That is sensible, because he did not put any questions to Ms D prior to the hearing, nor did he call her for cross-examination. The husband seeks to deal with the value of the business in another way – by sale. As to the other elements of the valuation.

3. The submission on behalf of the husband is that the parties’ leave entitlements should not be included in the list of assets as there is no bank account or fund from with the entitlements can be met. The submission is that they are hollow, book entries. Book entries they may be but Ms D says at paragraph 2.8 of her report that she has deducted those leave entitlements in determining the equity value of the Company and advises that “the provisions should be included as either an asset or a financial resource of the parties.” Normally there is an issue about leave entitlements being taken as leave or being cashed out – hence whether they would appear as an asset or a financial resource. Here they should be included as an asset. There is no doubt that the wife will not be taking her entitlement from S Pty Ltd in the form of paid leave. On the latest evidence of the husband’s intention, he too is unlikely to take that entitlement as leave. The doubt on this issue arising directly from the husband’s failure to dislose. In those circumstances there is no reason to depart from Ms D’s report as to the leave entitlements or to characterise them in a way that favours the husband.

Ford Fairmont / Ford Festiva

1. It is argued on behalf of the husband that the wife should be credited with receiving a Ford Fairmont motor vehicle from S Pty Ltd after separation and at a value of $22,500. It is submitted on behalf of the wife that she be credited with $7,000 being the trade-in allowance received by her for the Ford Fairmont on a Ford Festiva motor vehicle, now in her possession. I can find no evidence of the Ford Fairmont having a value of $22,500. The husband’s assertion of value in his affidavit was excluded on objection. However, I accept that it may have been given that value by the parties at some point. I can see no reference to that value in the company accounts but it would have appeared in the depreciation schedule, probably for the 2006 financial year. The evidence of the wife was that she traded the vehicle, receiving a Ford Festiva motor vehicle at $3,500 and a $3,500 cash adjustment. The general position is that assets are valued as at the date of the hearing. It is not sensible to fix the value of a depreciating asset by reference to a historical value. For example in his counsel’s Case Outline the husband has the Mazda 3 he uses, at $22,500, as at separation and yet it appears at an agreed figure in the balance sheet as at the date of the hearing, at $15,000. I will allow the wife’s vehicle at $7,000.

Add back for $100,000 paid by husband to Mr C

1. It is submitted on behalf of the wife that the husband should not be accepted in relation to his evidence about a payment of $100,000 to MR C.

2. The husband’s case is this. He disclosed in his first Financial Statement $200,000 owing to his parents. That money was needed by him to fund the purchase of the property at V, after separation, for the wife. In his oral evidence the husband asserts that the debt was in fact $205,000 and came in 3 tranches - $50,000 from the husband’s mother at interest and evidenced by a written agreement; $55,000 from the husband’s father at interest and evidenced by a written agreement; and $100,000 from the husband’s father but sourced from Mr C (the husband’s step-brother) interest free and not evidenced by a written agreement. It is the husband’s evidence that at the time of the advance he had never met his step-brother and indeed that he did not meet him until the time of their father’s death. The husband says that because he knew there would be some controversy about it in the context of these proceedings, without notice to the wife, let alone her permission, he ‘repaid’ $100,000 through his father, to his step-brother. The husband concedes that Mr C had not requested that repayment. Sadly, the husband’s father has since died but neither his mother nor Mr C were called to corroborate the husband’s evidence.

3. The wife is correct to complain about this and there is a legitimate argument for including the $100,000 in the balance sheet as a notional asset of the husband. It should not be for the wife to investigate and account for secret payments made by the husband. On the other hand, as is submitted on behalf of the husband, the broad facts support the husband’s case. Significant sums were advanced to assist the wife purchase the V property. Minds would differ about this but for the reasons advanced on behalf of the husband, I will not add the $100,000 back to the pool.

Add back for money advanced to the wife after separation

1. It is argued on behalf the husband that $334,625.33 should be added back as funds advanced to the wife since separation, being:

   Proceeds from the E Office sale   $167,000

   Additional moneys from portfolio loan                            $93,500

   Personal drawings (portfolio loan & visa)       $53,125.33

   ATO tax refund     $21,000

2. The wife concedes that the value of the V property should be added back - $240,000. Thus the dispute is about $94,625.33.

3. In my view these moneys do not fall within the exceptions identified in Omacini. There is no suggestion that the wife has kept the benefit of $94,625.33 in joint assets and has or might have, such funds available to her now. At separation the wife lost her income and she continued to have expenses. The approach taken by courts has been to not read back funds applied to living expenses from separation to the date of the hearing.  For example in Omacini the Full Court criticised the trial judge for failing to recognise the practical realities associated with the costs of living. The trial judge added back a redundancy package. The Full Court said:

   40.      As her Honour noted a redundancy package is intended to make up for future loss of earnings.  Given that the package was frozen, the appellant husband had to meet expenditure from somewhere, which is a matter that needed to be examined, particularly, in view of the fact that his redundancy package was fully included in the asset pool available for distribution.

   41.      It is, in our view, inconsistent for her Honour to recognise that the redundancy pay recompenses for lost income, but not to address the question of the husband's legitimate support of himself from that income.

   42.      It is implicit in that statement by her Honour that she accepts that at least some of the appellant husband’s expenditure was reasonable. 

4. Here the parties separated in May 2006. In the 2006 financial year the parties had split over $144,000 in wages from S Pty Ltd. It appears that the accounting approach taken to their wages was more of an income splitting device rather than a reflection of the division of labour between the parties. The wife was not paid wages by S Pty Ltd after separation. She studied and was able to secure paid employment after separation but only on a part-time basis and not at the rate of $72,000 per annum. The wife had 18 months off work from Easter 2007, due to Glandular Fever.

5. I will not add back the additional $94,625.33.

Paid legal fees and Inheritance

1. Mr Hamilton for the wife advised that the wife has paid $2,100 in legal fees and the payments were made from the wife’s income. The wife has no consumer debt. In those circumstances it is likely that the pool would be greater if the fees had not been paid. I will add the paid fees back to the list of assets.

2. Mr Graham advised that the husband has paid $10,100 in legal fees and the payments were made by S Pty Ltd. The legal fees could not be a legitimate business expense. It is likely then that the paid fees come from the husband’s loan account. In those circumstances I will not add them back to the list of assets.

3. I find that the assets are:

Assets	Value
N property (Joint)	$520,000.00
Shareholding in S Pty Limited (Joint)	$152,000.00
Interest in S Unit Trust (Joint)	$25,000.00
Gross leave entitlements owing by S Pty Ltd (Husband)	$90,026.00
Mazda 3 (Husband)	$15,000.00
S Superannuation (Husband)	$140,500.00
Household effects (Husband)	$10,000.00
V property (Wife)	$240,000.00
Gross leave entitlements owing by S Pty Ltd (Wife)	$36,399.00
S Superannuation (Wife)	$94,800.00
HESTA superannuation  (Wife)	$2,000.00
Ford Festiva (Wife)	$7,000.00
Household effects (Wife)	$3,000.00
Add back for paid legal fees (wife)	$2,100.00
Total	$1,337,825.00

Liabilities:

1. The liabilities are agreed to be:

Liabilities	Amount
Debt to S Pty Ltd (Husband)	$169,000.00
Mortgage N property (Joint)	$30,000.00
Total	$199,000.00

Net assets

1. The net assets have a value of $1,138,825 ($1,337,825 - $199,000).

Financial Resources

1. The parties disclose no financial resources. An argument made on behalf of the wife is that the husband’s partner, Ms W may be a financial resource. The wife is aggrieved that Ms W did not comply with a subpoena. Service of the subpoena was left to the last minute and was not effective. Ms W’s involvement in the OA Business is suggestive of an attempt to hide facts (and perhaps assets) from the wife but I can not make a finding to the effect that she is a financial resource for the husband. There is little evidence of her financial circumstances.

Contributions

1. The obligations placed on the Court by section 79 call for an assessment of the respective contributions of the parties. The manner of assessing contributions has been the subject of previous decisions. The contributions of a parent and homemaker are to be assessed, not in any merely token way, but in terms of their true worth to the building up of the assets[2]. There are said to be risks in taking an overly technical approach to the assessment of the respective contributions of the parties in that the Court can become involved in questions of the quality of contributions which go far beyond the real world expectations of parties[3].

   [2] Mallett v Mallett (1984) 9 Fam LR 449; In the Marriage of Ferraro (1992) 16 Fam LR 1

   [3] In the Marriage of Shewring (1987) l2 Fam LR 139

2. As to whether the Court should apply the considerations in section 79(4) to the assets globally or asset by asset, the authorities have it that the former approach is preferred, in appropriate circumstances either approach is permissible and sometimes the asset by asset approach is best. See In the Marriage of Lenehan (1987) 11 Fam LR 615; In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712; In the Marriage of Zyk (1995) 19 Fam LR 797.

3. In the Marriage of Coghlan (2004) 33 Fam LR 414 the Full Court allowed that superannuation may be included in the list of property drawn up as “the first step” in the determination of proceedings under s 79, whether or not a splitting order is sought in those proceedings. The Full Court suggests that that:

   “… approach could be adopted where the parties agree that it should be adopted, or where the court is satisfied that the superannuation interest is indeed property within the meaning of the definition of property contained in s 4(1), or if the interest is not within that definition, but is of relatively small value in the context of the value of the other assets in the case, or there are features about the interest which leads the court to conclude that this would be an appropriate approach.”

4. Here, no splitting orders are sought and the case has been argued on a global basis. I will take the same approach.

Contributions

Section 79(4)(a) Contributions

1. Financial contributions, both direct and indirect were made by each of the parties.

2. The Wife made the following contributions:

   ·    As a director and shareholder of S Pty Limited which was incorporated in January 1998. In addition to production duties the wife performed some administrative and product design duties for the company.

   ·    The wife contributed income to the relationship in the following forms of employment:

   (a)as a nanny for a period of about 12 months;

   (b)as an employee of a shop for approximately 6 months;

   (c)as an employee of G Company for approximately 5 months (Wife left this employment due to pregnancy with child L).

   ·    The wife contributed as a joint purchaser and borrower in respect of the properties at B, R, F and the home.

   ·    The wife contributed as an officer in the company and shareholder for the purchase of the property owned by the company.

   ·    The wife has contributed as a sole purchaser of the V property that she has acquired since separation.

3. The husband made contributions as an employee of G Company and was the principal of S Pty Ltd.

4. Since separation the Husband has had the benefit of the occupancy of the home. Since separation the Husband has had the benefit of the receipt of the income from the company notwithstanding that the Wife has been a joint shareholder thereof.

5. Since separation the Husband has increased his loan account with S Pty Limited.  As at 30 June 2007 the husband’s loan to the company was $37,002.00.  The husband incurred a further liability of $132,502.00 in the financial year 1 July 2007 to 30 June 2008 (see Appendix “C” to report of Ms D annexed to her Affidavit under the heading ‘Non current assets book value 30 June 2008’).

1. The submission is that much of the value of the company is in the form of the husband. Further, there being no disclosure at all about the activities of OA Business, it is possible that some of the value of S Pty Ltd has moved to the new enterprise. The thrust of those submissions being that a sale might not realise a proper value for the business.

2. Submissions were made on behalf of the husband in relation to the inclusion of leave entitlements in the balance sheet but not about this issue.

3. I am satisfied that the only proper approach on this issue is that advocated on behalf of the wife. Ms D prepared a valuation of S Pty Limited on the joint instructions of the parties, relying on company documents, prepared at the direction of the husband and other information, all provided by the husband or the company’s accountant. For reasons she explains in her report, the methodology she employed was the capitalisation of future maintainable earnings. Ms D was instructed to value a trading enterprise, not an enterprise that was to be wound up or sold.  The opinion evidence of Ms D was not challenged.

4. Without notice to the wife, the Court or Ms D, the husband established OA Pty Limited. In cross-examination he agreed that he had been a director and shareholder since October 2008. When he revealed that fact, for the first time, during cross-examination, the husband explained the purpose of the new company to the effect that - he then had a desire to sell S Pty Ltd off and needed another company for his distribution activities in a much reduced capacity. There is no doubt of the husband’s failure of disclosure. The company was established on the day he swore his affidavit in these proceedings. It is the husband’s case that he thought the parties had achieved an (albeit informal) property settlement. In his affidavit he says:

   57.      [The wife’s] main point of contention in reneging on our private agreement appeared to be the value of [S Pty Ltd]. [The wife] valued the business at $900,000 - $960,000. Numerous offers were made between 2006 and 2009 to transfer ownership of the business to [the wife] but she has declined each time. My offers to transfer ownership have been genuine and I do not want the business. Since neither of us wants the [S Pty Ltd] I say a fair resolution would be to sell it and divide the proceeds.

5. During his cross-examination he was required to reveal, again for the first time, that in August 2009 he transferred the shares in OA Business to his partner, Ms W. He was asked why he did that and his candid response was to the effect – I thought I would defuse a problem.

6. In my view what has happened is this: at all relevant times the husband has intended to continue a career in distribution, at least to some extent. However, he was unhappy about accounting to the wife for the business at any significant value. He deliberately failed to disclose the establishment of a new corporate vehicle to be used by him for distribution and the transfer of his interest in it to his partner. He did that to avoid his future intentions coming to light so that the wife and the Court would be mislead in relation to the way the business should be treated in these proceedings.

7. Under the orders I will make, the husband will retain the benefit of S Pty Limited. It is not practicable to separate out the wife’s leave entitlement with the company and I will leave that entitlement with the husband. It is of course a matter for the husband what he does with the company.

Superannuation

1. Neither of the parties seeks a superannuation splitting order. They both ask that arrangements be made to transfer the wife’s interest in the S Superannuation Fund into a fund of her choosing.

Conclusion

1. The net assets have a value of $1,138,825 ($1,337,825 - $199,000).

2. A division in the proportions 52.5% to the wife and 47.5% to the husband would leave the husband with net assets of about $540,942 and the wife with net assets of about $597,883.

3. The wife has the benefit of and would like to retain:

Assets	Value
V property (Wife)	$240,000.00
S Superannuation (Wife)	$94,800.00
HESTA superannuation  (Wife)	$2,000.00
Ford Festiva (Wife)	$7,000.00
Household effects (Wife)	$3,000.00
Add back for paid legal fees (wife)	$2,100.00
Total	$348,900.00

1. In order to bring her to 52.5% of the assets she would need to receive a further $248,983.

2. That would leave the husband with:

Assets	Value
Shareholding in S Pty Limited (Joint)	$152,000.00
Interest in S Unit Trust (Joint)	$25,000.00
Gross leave entitlements owing by S Pty Ltd (Husband)	$90,026.00
Gross leave entitlements owing by S Pty Ltd (Wife)	$36,399.00
Mazda 3 (Husband)	$15,000.00
S Superannuation (Husband)	$140,500.00
Household effects (Husband)	$10,000.00
Debt to S Pty Ltd (Husband)	-$169,000.00
Total	$299,925.00

1. In order to bring him to 47.5% of the assets he should receive a further $241,017.

2. That leaves the former matrimonial home. The husband may buy the wife’s interest at $248,983. Should he not do so, the property will be sold. In order that the parties share in any loss or profit caused by the property achieving net sale proceeds less than or greater than the agreed value, the net proceeds will be divided in the proportions 248,983:241,017. I will round out that proportion to 51% to the wife and 49% to the husband.

Conclusion under Section 79

1. This was a long marriage involving very significant contributions by each of the parties. They acquired assets and provided a secure home for their children. In the course of over 19 years of cohabitation and since, the parties shared the work of the family in different ways but overall the contributions slightly favoured the husband. A modest adjustment to the wife is required by reference to the non-contribution aspects of Section 79(4). In my view the orders I propose reflect a just and equitable property settlement.

I certify that the preceding one hundred and sixty nine (169) paragraphs are a true copy of the reasons for judgment of Judicial Registrar Ian Loughnan.

Associate: 

Date:17 December 2009