Elgin and Elgin

[2014] FamCA 10

FAMILY COURT OF AUSTRALIA

ELGIN & ELGIN [2014] FamCA 10

FAMILY LAW – PROPERTY – Settlement in relation to marriage – Superannuation – Value of property – Conflicting evidence – Date of valuation – Expert evidence.
FAMILY LAW – PROPERTY SETTLEMENT – Contributions – Family company – Family Trust – Just and equitable – Future needs – Long marriage – Where the parties have three adult children – Where the wife was the primary caregiver of the children – Where the husband was the primary income earner throughout the relationship.

Family Law Act 1975 (Cth) s 75(2)

Bulleen & Bulleen (2010) 43 Fam LR 489
Stanford & Stanford (2012) 247 CLR 108

APPLICANT: Ms Elgin

RESPONDENT: Mr Elgin

FILE NUMBER: BRC 2909 of 2010

DATE DELIVERED: 17 January 2014

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Forrest J

HEARING DATE:

18, 19 & 20 July 2012

10 October 2012 written submissions of both parties filed

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr North of Senior Counsel and Mr Sweeny of Counsel

SOLICITOR FOR THE APPLICANT: Glezer Lanteri Associates Pty Ltd

COUNSEL FOR THE RESPONDENT: Mr Hamwood of Counsel

SOLICITOR FOR THE RESPONDENT: Reaburn Solicitors

Orders

1. That within forty-five (45) days of the date of these Orders the Husband pay to the Wife the sum of fifteen million, four hundred and thirty-two thousand, four hundred and fifty-seven dollars ($15,432,457).

2. That within forty-five (45) days of the date of these Orders the Husband transfer to the Wife, at the Wife’s expense, all of his right, title and interest in the property situate and known as Apartment A, C Street, Melbourne in the State of Victoria (hereinafter referred to as “C Street”).

3. That within forty-five (45) days of the date of these Orders the Husband transfer to the Wife, at the Wife’s expense, all of his right title and interest in the property situate at and known as Apartment D, E Street, Gold Coast, in the State of Queensland (hereinafter referred to as “Apartment D”).

4. That within forty-five (45) days of the date of these Orders the Husband, at the Wife’s expense, do all acts and things as are necessary in his capacity as a director of Elgin Finance Pty Ltd to transfer to the Wife of all that company’s interest in the property situate at and known as Apartment G, E Street, Gold Coast, in the State of Queensland (hereinafter referred to as “Apartment G”).

5. That upon the transfer of C Street, Apartment D and Apartment G to the Wife, the Wife indemnifies the Husband in respect of all outgoings past, present or future, associated with those properties.

6. That contemporaneously with the payment of the full amount of $15,432,457 to the Wife:

   (a)The Wife shall, at the Husband’s expense, transfer to the Husband or his nominee all of her shareholdings in all those corporations set out in the Schedule to these Orders (hereinafter referred to as “the entities”);

   (b)The Wife shall, at the Husband’s expense, sign all such documents so as to transfer to the Husband all of her right, title and interest in the entities and resign as an office holder in all such entities;

   (c)The Wife shall, at the Husband’s expense, transfer to the Husband and/or assign to the Husband at the Husband’s expense any entitlement she has in respect of the entities or under any trust of which the Husband or any of the entities is trustee including any loan account entitlements, thereby renouncing any entitlements to any loan account or beneficiary entitlement in any of those entities or under any of those trusts.  

7. That the Husband indemnify the Wife in respect of all past, present and future liabilities arising as a result of the Orders herein (save for any liabilities associated with C Street, Apartment D and Apartment G), or from her involvement in the entities or in any trust of which he or any of the entities is trustee including any and all taxation liabilities.

8. That the Husband either personally or via his involvement in the entities, be restrained from attempting or causing or permitting any of the entities to attempt to recover from the Wife or H Pty Ltd any monies allegedly owing to the Husband or any of the entities including as trustee by the Wife or H Pty Ltd, and that the Husband hereafter indemnify the Wife and H Pty Ltd with respect to any such liability.

9. That within 30 days of the date of these Orders, if he has not yet done so, the Husband shall take all steps necessary to relinquish control of the J Elgin Family Trust in favour of his son, Mr J Elgin, or his son Mr J Elgin’s nominee.

10. That save as expressly referred to herein each party shall hereafter be entitled to ownership of and enjoyment of, to the exclusion of the other, all real property in that party’s name, all and any chattels in that party’s possession and each and every chose in action to which that party is now entitled.

11. That the hearing listed for 10.00 am on 17 February 2014 before his Honour Justice Forrest be vacated.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Elgin & Elgin has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Schedule to Orders

• Mr Elgin Family Trust

• F Pty Limited

• Elgin Family Trust

• Elgin Finance Pty Limited

• I Pty Limited

• K Pty Limited

• L Pty Limited

• M Pty Limited

• N Pty Limited

• O Pty Limited

• P Pty Limited

• Q Pty Limited

• R Pty Limited

• Elgin Unit Trust

• S Pty Limited

• S Unit Trust

• T Pty Limited

• T Unit Trust

• U Pty Limited

• U Joint Venture

• Elgin Development Trust

• V Pty Limited

• W Pty Limited

• Elgin Family Limited

• J Elgin Family Trust

• X Unit Trust

• Elgin Superannuation Fund

• Ms Elgin Superannuation Fund

• Y Pty Limited

• Z Pty Limited

• AB Pty Limited

• BC (Australia) Pty Limited

• Elgin Business Trust

• Elgin Charitable Trust

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 2909 of 2010

Ms Elgin

Applicant

And

Mr Elgin

Respondent

REASONS FOR JUDGMENT

1. The parties to this property division litigation met in the mid-1950s and were married in 1960. At that time, the Husband was 20 years old and the Wife was 19 years old. After almost 49 years of being married they separated on a final basis in June 2009.   During their marriage they had three children, born 1961, 1964 and 1970.  Of course, those children are grown up now, two of them with their own children.

2. Just after they married, the Husband started to manufacture and install EF Products. That was innovative in Australia at the time and the business succeeded and grew. The Wife was employed when they married, but she, like so many Australian women of that time, enthusiastically took up the role of parenting the couple’s children and making their home whilst the Husband worked long and hard in building the business. When the children were a little older, the Wife also owned and ran a small retail business in suburban Melbourne where the family lived.

3. Towards the end of the 1970s, the family moved to the Gold Coast.  The EF Products business had grown into a national business and in the early 1990’s it was sold off, piece by piece. Around that time, and using the capital acquired from the sale of the EF Products business, the couple undertook their first property development project on the Gold Coast. It was successful and the Husband, now 74 years old, has been developing property ever since with a great deal of apparent financial success. A large amount of wealth has been generated over the years. It was also added to by an inheritance of $1.3 million received by the Wife in 2003. Even after having gifted each of their children at least $6,000,000 over the years, the couple’s wealth is now in excess of $40,000,000.

4. What principally brings these two people to this Court is their current inability to agree on how that wealth should be divided. After having assured the Wife around the time of their separation that their wealth would be divided equally between them, the Husband says to this Court that it should be divided as to 70 per cent to him and as to 30 per cent to the Wife. For the Husband, it is submitted that this would justly and equitably reflect the disparity in their contributions over the years. The Wife seeks that their wealth be divided as to 52.5 per cent to her and as to 48.5 per cent to the Husband. For the Wife, it is submitted that this would justly and equitably reflect an equality of contribution throughout the years with a slight weighting in her favour to take account of her inheritance of $1.3 million dollars in 2003.

5. I will be dividing the wealth of the parties equally between them. I will be making orders that I consider appropriately give effect to such a division having regard to my determination as to the actual property interests of the parties and the values that should be ascribed to them. I am, in all the circumstances of this case, satisfied that it is just and equitable to make the orders that I will be making to give effect to such a division.

Is it just and equitable to make an order adjusting the parties’ property interests?

1. The hearing of the competing applications for property division took place in late July 2012. The parties were given time to prepare and file written submissions. Lengthy written submissions were filed by the parties on 10 October 2012. Whilst my judgment was still reserved, the High Court delivered its judgment in Stanford & Stanford (2012) 247 CLR 108. The Wife sought and obtained the Court’s leave to file supplementary written submissions in the light of the judgment in Stanford. Those were filed on 31 July 2013. The Husband filed some short submissions in response on 20 September 2013.

2. Neither party submitted that it would not be just and equitable to make property adjustment orders in this case. Each of them seeks orders adjusting their interests in property. I am quite satisfied that this is a case in which, having regard to the way in which the wealth of the parties is actually owned, justice and equity as between them demands that property adjustment orders be made.

WHAT IS THE PROPERTY OF THE PARTIES TO BE MADE SUBJECT TO PROPERTY ADJUSTMENT ORDERS AND HOW MUCH IS IT ACTUALLY WORTH?

1. The parties agree as to the nature of much of the wealth they have accumulated over the years. However, they do disagree about a number of matters that go to the identification of and attribution of value to the property interests that are to be considered when determining the precise nature of the orders to be made in this case.

2. Firstly though, I was told they agreed about a number of real properties that are owned and as to their value. Those are:

Apartment D, E Street, Gold Coast, Qld	Registered in the joint names of the Husband and Wife	Value $2,000,000
Apartment CD, C Street, Melbourne, Vic	Registered in the joint names of the Husband and Wife	Value $1,450,000
Apartment A, C Street, Melbourne, Vic	Registered in the joint names of the Husband and Wife	Value $1,950,000
DE Street, Suburb FG, Qld	Registered in the joint names of the Husband and his new wife	Net value after deducting mortgage debt $346,282

1. The parties also agreed during the course of the trial that the Wife’s interest in her own self-managed superannuation fund was valued at $1,091,831.

THE MATTERS OF FACT THE PARTIES DISAGREE ABOUT IN RESPECT OF DETERMINING THEIR PROPERTY AND ITS VALUE

1. Having presided over the trial and read the written submissions of the parties I am satisfied that the parties disagree about the following matters that were, accordingly, left for the Court to determine as part of the process of determining appropriate property adjustment orders:

   (i)The value to be attributed to the personal savings of the Wife at trial;

   (ii)The value to be attributed to the Wife’s interest in the company, H Pty Limited;

   (iii)The value to be attributed to the Husband’s superannuation interest;

   (iv)Whether or not a motor car owned by the Husband, two motor cars owned by the Wife and furniture owned by the Wife should be considered in determining the appropriate property adjustment and, if so, how much should be attributed to the value of those items;

   (v)Whether or not two Gold Coast unit properties registered in the name of the Husband’s new wife (“the GH Street units”), purchased in October 2009 and May 2010 respectively, should be considered in determining the appropriate property adjustment and, if so, how much should be attributed to the value of those two properties;

   (vi)The value to be attributed to another Gold Coast unit property purchased in the name of the Husband’s new wife (“the B Apartment”) in determining the appropriate property adjustment, the Husband having conceded that it is appropriate to consider the property in that process;

   (vii)Whether or not the value of the J Elgin Family Trust should be included in determining the appropriate property adjustment orders;

   (viii)Whether or not the value of the Husband’s share in the company, R Pty Limited should be included in determining the appropriate property adjustment orders;

   (ix)Whether or not the value of the interest of the Mr Elgin Family Trust in the Elgin Development Trust should be included in determining the appropriate property adjustment orders;

   (x)Whether various amounts should be included in the valuations of:-

   (A)Elgin Family Trust;

   (B)Elgin Finance Pty Limited;

   (C)Mr Elgin Family Trust;

   (D)Elgin Unit Trust; and

   (E)T Pty Limited

   in respect of certain assets and liabilities recorded in the balance sheets of those entities when considering the valuations of those entities in determining the appropriate property adjustment orders;

   (xi)The values to be attributed to certain lots in a property development being undertaken at Town IJ in Queensland as at 15 May 2012 that were not valued by the single expert real property valuer to be used in determining the valuation of a number of the entities being considered in determining the appropriate property adjustment orders;

   (xii)The value to be attributed to all of the lots in another particular stage (stage ZA) of that Town IJ property development as at 15 May 2012 that were also not valued by the single expert that is also to be used in determining the valuation of those entities;

   (xiii)The amount to be attributed to commissions paid in respect of sales of lots in the Town IJ development between 1 July 2011 and 15 May 2012 in the process of determining the valuation of those entities;

   (xiv)The value to be attributed to a large number of unit properties in another development undertaken at JK in Queensland to be used in determining the valuation of entities being considered in determining the appropriate property adjustment orders.

2. I shall now determine these matters one by one.

The value to be attributed to the personal savings of the Wife at trial

1. I consider this to be an issue because included in the schedule of assets and liabilities contended for by the Husband under the description “Wife’s Savings” is the amount of $774,889 whereas included in the relevant schedules contended for by the Wife under the description “Personal Savings of the wife” is the amount of $170,994.

2. Counsel for the Husband asserted in his written submissions, wrongly I am satisfied, that the sum of $774,889 was agreed.

3. On the second day of the trial, following a request from counsel for the Husband, the Wife produced a document that was admitted into evidence as Exhibit 3 in the trial. It was a one page printout from the NAB Internet Banking Website. The document bears the descriptor “Account Summary” and has seven accounts listed on it. They are listed under the heading “account nickname” as follows:

   [abbreviation of the wife’s first name][elgin] super fund

   bus chq acct

   credit card visa

   flexi acct [abbreviation of the wife’s given name] amex

   interest [abbreviation of H Pty Ltd]

   term dep super

   term dep [abbreviation of H Pty Ltd]

4. Counsel for the Husband cross-examined the Wife about the accounts and acknowledged in that process that two of those accounts appeared to be superannuation fund accounts. The Wife agreed with that. He then said to the Wife:

   So we can take accounts numbered 2, 3, 4 and 5 as representing your current savings on hand.

   The Wife answered:

   Yes

5. Although the accounts are not actually numbered 1 – 7 on Exhibit 3, I understand counsel for the Husband to have referred to the accounts listed second, third, fourth and fifth in the list in paragraph 15 above.  The total of the balances of those four accounts that appear on Exhibit 3 is $774,889. That includes an amount of $603,895.71 that is listed as the balance of the fifth account in the list that is called “interest [abbreviation of H Pty Ltd]”.

6. Counsel for the Husband has not explained in his written submissions where the figure of $774,889 attributed to the Wife’s savings comes from, but I consider it safe to infer that it is from that Exhibit by reference to that evidence of the Wife.

7. In the written submissions of counsel for the Wife, they explain where the figure of $170,994 attributed to the Wife’s savings comes from. They refer to the account balances of the second, third and fourth accounts listed on Exhibit 3 (and in paragraph 15 above), the amount equalling the total of those three account balances displayed. They have left out the amount of $603,895 asserting that it is left out “so as not to “double count” the funds held in the name H Pty Ltd under the heading of “[abbreviation of H Pty Ltd]””.

8. There are two accounts in that list of accounts on Exhibit 3 that bear the reference “[abbreviation of H Pty Ltd]”. There is no dispute that the Wife is the sole shareholder and director of the company, H Pty Ltd. The valuation of the single expert accountant confirms that as at 30 June 2011 the assets of the company included funds held in two NAB accounts – balances of $227,415 and $42,640 and another “call deposit” at $5,783 (the amount of the current balance of the account listed seventh on Exhibit 3).  The Wife also gave evidence in response to further cross-examination by counsel for the Husband that money she had received from the Husband since their separation, whether through the company, H Pty Ltd, or directly, was included within the money in her bank accounts.

9. In their written submissions, Counsel for the Wife actually concede that if the money that is in the account that is described as “interest [abbreviation of H Pty Ltd]” is not included as savings of the Wife, then there must, necessarily, be an adjustment made to the value given by the single expert to H Pty Ltd. In this way, a double counting of money in the bank in H Pty Ltd accounts as at 30 June 2011 is avoided.  They set out in their submissions how they contend that is to be achieved having regard to the evidence.

10. In his written submissions in reply to the Wife’s written submissions, counsel for the Husband did not take issue at all with this approach. That is hardly surprising given that the $603,895 he included in the Wife’s savings in his schedule is, with this approach, being accounted for in the assets of H Pty Ltd by the Wife, in any event. Accordingly, I am satisfied that this is an appropriate course to take to ensure that there is no double counting, at least of the funds that were in H Pty Ltd bank accounts as at 30 June 2011. I determine that the amount of the Wife’s savings to be included in the consideration of this matter is as included by counsel for the Wife in their schedules, namely $170,994.

The value to be attributed to the Wife’s interest in the company H Pty Limited

1. The single expert valuation of H Pty Limited as at 30 June 2011 was $180,000. The assets included money that was in the NAB bank accounts as at that date and the Wife’s loan account balances for money she owes the company that she has drawn from the company for her own purposes. If those loan account balances were included as assets of the company, corresponding amounts would have to be included as liabilities of the Wife in considering the appropriate property adjustment orders in these proceedings. Equally, they can both be left out as cancelling each other out.

1. The liabilities of the company include the amount of $533,845 owing to Elgin Finance Pty Limited, a company of the Husband. That is money the Husband has caused to be paid to the Wife, through the company, since separation. The Husband says, on behalf of Elgin Finance Pty Ltd, that amount is not required to be repaid. The Wife, on behalf of H Pty Ltd, accepts that forgiveness but, understandably, seeks an order from the Court that gives effect to that forgiveness.  Accordingly, the value of H Pty Ltd should properly reflect that. Similarly, the amount will have to be deducted from the value of Elgin Finance Pty Ltd as it has been included as an asset in the valuation of that company. The other amounts included as assets and liabilities of H Pty Ltd are so small that it is appropriate in my view to adopt the total of the balance of the two H Pty Ltd bank accounts as the value of the company for consideration in these proceedings.

2. Counsel for the Wife erroneously, through typographical error I expect, include that amount in the schedule they contend for as $609,598. I calculate it, using the account balances of the two accounts on Exhibit 3 that I accept are H Pty Ltd accounts, as $609,679. As I have already noted, this approach was not challenged at all in the submissions in reply of counsel for the Husband. I will include the sum of $609,679 as the value of the Wife’s interest in this company in my consideration of this matter.

The value to be attributed to the Husband’s superannuation interest

1. The Husband includes the amount of $454,958 in the schedule for which he contends, as the value of his superannuation interest. The Wife includes the amount of $396,000.

2. For the Husband, it is asserted that his figure is taken from his Financial Statement filed 31 January 2012. The Wife’s figure is taken from the valuation of the single expert accountant of the Elgin Superannuation Fund as at 30 June 2011.

3. The single expert’s valuation shows that the assets of the Husband’s superannuation fund at that date were interest bearing deposits and investment accounts. It is, therefore, easy to accept that the Husband could readily access the day to day value of those assets. I have no doubt that is what he has done when he deposed to the value of his superannuation interest in his Financial Statement sworn and filed on 31 January 2012. That date was closer in time to the trial and therefore that is the best evidence at the trial of what the value of his superannuation interest was. I will accept the figure of $454,958 as the value of the Husband’s superannuation interest in this matter.

Whether or not a motor car owned by the Husband, two motor cars owned by the Wife and furniture owned by the Wife should be considered in determining the appropriate property adjustment and, if so, how much should be attributed to the value of those items

1. In the schedule of assets and liabilities of the parties included in his written submissions, counsel for the Husband has included the Husband’s car at a value of $10,500, two cars of the Wife at the value of $30,000 ($15,000 each) and the Wife’s furniture at a value of $100,000. He attributes the values he has used to the parties’ respective Financial Statements filed 3 January 2012 (Wife) and 31 January 2012 (Husband).

2. Counsel for the Wife do not include these items of property in any schedule in their written submissions. They submit simply that there was not an issue at trial about the Wife’s household furniture and that the Husband does not include his own household furniture in his schedule. Nothing is submitted by counsel for the Wife about including the motor cars in the consideration.

3. I am satisfied, on the Wife’s own evidence, that she owns two motor cars. The best evidence about their value is the Wife’s own non-expert opinion. I will include the two cars in my consideration of this matter at the total value of $30,000.

4. I am satisfied, on the Husband’s own evidence, that he owns an interest in a motor car said to be registered in the name of Elgin Finance Pty Ltd. The best evidence about the value of his interest is the Husband’s own non-expert opinion. I will include that interest in the car in my consideration of this matter at the value of $10,500.

5. As to the issue of the inclusion of the furniture, I do not consider it just and equitable to include $100,000 worth of furniture as property of the Wife in my consideration of this matter whilst not including any furniture or personal possessions as property of the Husband.

6. Despite my repeatedly asking for a jointly prepared schedule of assets and liabilities contended for to be presented to the Court during the course of the trial, so that it was clear to the Court and to each of the parties what the issues in respect of the identification and valuation of their property were, none was forthcoming prior to the filing of the written submissions. Accordingly, I am not satisfied that the Wife was on notice during the course of the trial of the Husband’s intention to contend that $100,000 worth of furniture should be considered as her property whilst he disclosed none himself. Had she been on such notice, the Husband might have been cross-examined about his lack of disclosure in this respect.

7. I do not accept that the Husband had no personal possessions or household furniture at the time of the trial. I am quite satisfied that he has failed in his duty to disclose ownership of such property. Further, I am conscious of how notoriously inaccurately litigants in this Court attribute value to their household furniture. I do not consider that the Wife’s non-expert opinion as to the value of her household furniture could be relied upon in any event. I will not be considering her household furniture and possessions further in the determination of this case.

Whether or not two Gold Coast unit properties registered in the name of the Husband’s new wife (“the GH Street units”), purchased in October 2009 and May 2010 respectively, should be considered in determining the appropriate property adjustment and, if so, how much should be attributed to the value of those two properties

1. At the commencement of the trial, it emerged that the Husband had been asked a few days before the trial to disclose the details of properties registered in the name of his new wife, Ms KL, including details as to the date of purchase of the properties and the source of funds for the purchase of the properties. The letter from the Wife’s solicitors requesting that detail was admitted into evidence and marked Exhibit 5.

2. The Husband did not respond to that request. However, his legal representatives sought and obtained leave at the start of the trial for the Husband to file and read an affidavit sworn the day after receipt of that request, the day before the trial commenced. In that affidavit, the Husband deposed to a transfer to Ms KL from one of his development companies of a unit property in Suburb LM at the Gold Coast by a contract dated 29 May, 2009 (just prior to the final separation of the parties). The copy of the contract that is attached to the affidavit discloses the “purchase price” as $330,000, but the Husband said in his affidavit that Ms LM did not pay any money for the unit.

3. In the same affidavit, the Husband deposed to the purchase of another unit property at “B Apartment” by Ms KL, by a contract dated 8 November 2011. Although the copy of the contract attached to the affidavit suggests the purchase price might have been $1,130,000, it appears to be accepted by the Wife that the purchase price was $1,100,000. That is the figure counsel for the Wife have included in their schedules in their written submissions and that is the figure that was put to the Husband in cross-examination and with which he agreed. The Husband deposed to funding that purchase and his counsel conceded very early in the trial that the value of that unit property should be considered as if it was property of the Husband in the determination of these proceedings. I shall return to this issue soon.

4. At one point during cross-examination of the Husband, it was put to him that all of the property held by Ms KL had been paid for by him. At that point, he readily agreed to that proposition. It was also suggested to him that he was not attempting to hide behind the fact that Ms KL had the capacity to buy property herself. The Husband readily agreed with that and said that she did not have that capacity. The Husband agreed with the cross-examiner that he effectively “gave” property to his new wife. Later, though, the Husband changed his position on this issue and said that he had not paid for all the property Ms KL had purchased. He did so, I am satisfied, after he became aware that the wife’s legal representatives were aware of two other properties registered in his new wife’s name.

5. Relevantly, the Husband, about 70 years of age at the time, began a relationship with Ms KL, about 26 years of age at the time, in or around 2008. This relationship led to a separation of the Husband and the Wife in early 2009 before they reconciled briefly in or around April/May 2009, before separating again, finally, in June 2009.

6. Ms KL, a migrant from Europe, was herself married with two young daughters at the time. She and her husband jointly ran a hospitality business on the Gold Coast. It was apparently experiencing serious financial difficulties and according to the Husband, he lent them $300,000 for them to try to get through the difficulty. That money was lent to them in the second half of 2009, apparently sometime after the Suburb LM property had been transferred into Ms KL’s name. The Husband confirmed that in oral evidence under cross-examination.

7. Although, in apparent response to the request from the Wife’s solicitors for information about property acquired by Ms KL since the separation of the Husband and the Wife, the Husband had deposed to Ms KL’s acquisition of the Suburb LM property and the B Apartment property in his affidavit that was sworn the day before the trial commenced, he had said absolutely nothing about any other property in Ms KL’s name in that affidavit.  Nor had he said anything about the fact that the Suburb LM unit property had actually been sold within six months of its purchase for $447,500 or what had happened to the sale proceeds.

8. However, it emerged during cross-examination of the Husband in the trial, that around the same time, September 2009 to May 2010, two other unit properties in one building on the Gold Coast had been purchased and registered in Ms KL’s name. The first one, Unit MN at GH Street, Gold Coast was purchased in September 2009 for $425,000. The second one, Unit OP at GH Street was purchased in May 2010 for $365,000. 

9. The Husband denied that he had funded the purchase of those two unit properties in Ms KL’s name. He gave evidence that his long-time solicitor, Mr PQ, had acted on his instructions for Ms KL on the conveyancing of those two unit apartments. He gave evidence that Ms KL had received the funds from some member or members of her extended family in Europe but he said he did not know who that was. Remarkably, the Husband could not explain why it was that he had funded the purchase of the Suburb LM unit apartment and lent Ms KL and her husband $300,000 in the same period of time if it was that she had access, through family members, to her own source of funds totalling $790,000.

10. Mr PQ gave evidence for the Husband. He gave evidence of receiving three small payments, in connection with the purchase of the first of those unit properties, by way of Elgin Finance Pty Limited cheques. He gave evidence that his records caused him to believe that he would have called for a bank cheque payable at the direction of the vendor of that unit property to be provided for the settlement. He had no recollection of where those funds came from. Mr PQ then gave evidence that his records in respect of the purchase of the second of those unit properties revealed that he received cheques from a company called QR Pty Limited. There is no evidence before the Court of that company being connected with the Husband, but that was the very first mention of that company in the proceedings. Mr PQ gave no evidence about the actual persons who may have provided those funds through that company.

11. Mr PQ also gave evidence that he acted on the conveyance of the sale of the Suburb LM unit that was purchased by Ms KL with money from the Husband. That was in late 2009. The purchaser was directed to have a cheque payable to Elgin Finance Pty Ltd. Exhibit 9 in the trial is a copy of an Elgin Finance Pty Ltd ANZ bank statement showing the deposit of $435,033 to the account on 18 December 2009, the day after the settlement of the sale of the Suburb LM unit. It had not been disclosed by the Husband in the proceedings before it was tendered into evidence during the trial.

12. The Husband gave evidence under cross examination that Ms KL, who he married in early 2011, has been receiving income from the rental of those two GH Street unit properties ever since she acquired them. That is $500 per week, the Husband told the Court. Additionally, she has been in receipt of income of $577 per week for the provision of design services to one of the property development companies controlled by the Husband. During the same period, she has given birth to the Husband’s fourth child, another daughter who was, at the time of the trial, eighteen months old. The Husband gave evidence that Ms KL is also very busily engaged in parenting and home-making.

13. Whilst the Husband had, as required, disclosed the income Ms KL was being paid by one of the property development companies in his Financial Statement, he had not disclosed the income he knew she was receiving from the two GH Street apartments. I do not accept that failure to disclose was an innocent oversight. I consider it was deliberately left out of his Financial Statement so that he would not have to disclose her registered ownership of the two GH Street properties.

14. No affidavit evidence of Ms KL was relied upon by the Husband in the trial. She was not called by him to give any evidence, even arising out of the revelations during the trial about the property transactions involving the purchase and sale of the Suburb LM unit, the purchase of the GH Street apartments and the purchase of the B Apartment property, all in her name. There is no evidence of any security registered over the GH Street properties and no evidence of any loan repayments to any person from whom she may have borrowed the money to purchase the GH Street properties. Given her apparent ready availability, the only explanation that was  given by the Husband for not adducing any evidence from her was that it was not necessary. I am satisfied that I can draw an inference in the circumstances that the evidence of Ms KL would not have helped the Husband.

15. The Husband was in cross-examination about these matters pertaining to Ms KL’s acquisition of properties on the afternoon of the second day of the trial and again on the morning of the third day of the trial. On the morning of the third day of the trial, he agreed that he had spent the night in between with Ms KL but said that he had sought no clarifying information from her as he had been too tired to do so. He provided no other reason for not talking with her about it.

16. Further, on 24 January 2011, the Husband gave an undertaking to this Court, recorded as being given “without admissions” as follows:

    [T]hat should he personally or as a director of any company wish to enter into a transaction including purchase, sale, mortgage or guarantee of a value in excess of $1,000,000 save in the ordinary course of business, he shall give the wife seven (7) days notice in writing, and in any event the husband shall provide notice to the wife’s solicitors of such transaction within seven (7) days of its being entered into.

17. The B Apartment property was purchased in late 2011 in Ms KL’s name for $1,100,000 with all the funds being provided by the Husband. He gave no notice to the Wife prior to that purchase and he gave no notice to the Wife’s solicitors after that purchase. It was first disclosed to the Wife and to this Court by the affidavit sworn the day before the trial in July 2012, after the Wife’s letter of request for information about these matters.

18. The Husband agreed with his cross-examiner that there was no property ever registered in the sole name of the Wife over 49 years of marriage. She was only ever a joint registered proprietor, with him, of certain real properties. He could give no explanation at all as to why the B Apartment property had been registered in the sole name of Ms KL. He denied that it was done to try to avoid the obligation to give notice to the Wife of such a purchase that he had imposed upon himself by undertaking given to this Court. He went on to boldly assert that, in any event, he did not consider such a purchase as other than being “in the ordinary course of business”. That did not impress me.

19. For the Wife, it is submitted that it is reasonably safe on all the evidence to conclude, contrary to the Husband’s sworn evidence, that he provided the funds for the purchase of not only the Suburb LM unit and the B Apartment but also for the purchase of the two GH Street units. Further, it is submitted for the Wife that just as the Husband conceded the B Apartment should be considered as his property in the process of determining appropriate property adjustment orders in these proceedings, so should the two GH Street units in the circumstances. All three, it is submitted, were purchased using funds provided by the Husband since the Husband and Wife separated and should, therefore, all be treated in the same way.

20. Whilst it is clear from the schedule of assets and liabilities contended for the Husband included in his counsel’s written submissions that the Husband opposed the inclusion of the GH Street properties as his property in the determination of appropriate property adjustment orders, his counsel made no particular submissions in respect to the matter in his written submissions or, most notably, in his written submissions in reply to those made by counsel for the Wife. In my view, that is a telling factor itself.

21. The matters just discussed above, other matters of evidence, the Husband’s conduct in respect to the correction of an error made by the single expert real property valuer in calculating the area of one of the properties he valued, the Husband’s attitude to disclosure demonstrated throughout these proceedings, and the Husband’s demeanour in the witness box and in the Courtroom throughout the course of the trial, all contributed to persuading me that the Husband’s denial of having provided the funds for the purchase of the two GH Street unit properties just cannot be accepted as true. In fact, I consider that it is far more probable than not that he did provide those funds. I find that his denials of doing so were false and that his evidence of the funds being provided by extended family members of Ms KL living in Europe was fanciful.

22. Finding that the Husband did provide those funds, I am satisfied that it is just as appropriate to consider those two unit properties as the Husband’s property in these proceedings. As there is no expert opinion evidence of value of those two units before the Court, a factor solely attributable to the failure of the Husband to fully and frankly disclose, I also consider it reasonable and appropriate to ascribe values to those two properties equal to the price that was paid for them on purchase. I will consider the properties at Unit MN and Unit OP, GH Street, Gold Coast as the Husband’s properties at values of $425,000 and $365,000 respectively.

The value to be attributed to the B Apartment in determining the appropriate property adjustment

1. This is a matter in issue on the written submissions for the parties. As I have already observed, Counsel for the Husband conceded that the property, purchased in the name of Ms KL for $1,100,000, but paid for by the Husband, should be considered as the Husband’s property.

1. Again, due to the failure of the Husband to fully and frankly disclose the details of this purchase in a timely manner, the Court did not have any expert opinion evidence as to the property’s value. Again, because of this, for the Wife it is submitted that it is reasonable to adopt the price that was paid for the unit as representing its value for the purposes of determining this matter.

2. In the schedule contended for by the Husband in counsel’s written submissions, the amount of $895,632.76 is attributed to the value of the B Apartment. The only explanation for that is given as “Submissions”. There is nothing more about it in the written submissions or in the written submissions in reply. In fairness to counsel for the Husband, an application to reopen the Husband’s case to put further evidence before the Court about this matter was made to the Court after the trial was concluded and before written submissions were finalised and filed. That application was heard and determined by me. It was refused and reasons were given at the time. Accordingly, there was no evidence before the Court that would assist the Court to determine that it is more reasonable to attribute a value of $895,632.76 to the B Apartment.

3. I will consider the B Apartment property of the Husband, as was conceded is appropriate, and I will consider it having a value of $1,100,000 in my determination of these property adjustment proceedings.

Whether or not the value of the J Elgin Family Trust should be included in determining the appropriate property adjustment orders

1. In the report of the single expert accountant who valued many entities that make up the Elgin group of companies, there is a valuation of the J Elgin Family Trust. The expert valued the net assets of the trust at $153,000 as at 30 June 2011. For the Wife, it is submitted that those net assets of the trust should be considered to be the Husband’s and taken into account in determining these proceedings. For the Husband, it is submitted that they should not be.

2. The evidence of the expert is that the trust was established by deed on 29 November 1995, and is a discretionary trust of which the company, F Pty Ltd is the current trustee. The expert’s evidence is that F Pty Ltd is equally owned by the Husband and the Wife and that the Husband, the Wife and their son, Mr J Elgin, are the directors of the company. It does nothing other than act as corporate trustee of a number of trusts, including the J Elgin Family Trust.

3. The expert’s evidence is that the Husband is the appointor of the trust and has the power to appoint and remove the trustee. The expert says this is why she has attributed the value of the net assets of the trust to the Husband in her report.

4. The beneficiaries of the trust are the Husband, the Wife, Mr J Elgin and his children, siblings, nephew or niece, grandchildren and any entities associated with Mr J Elgin.

5. The assets of the trust as at the valuation date include an unsecured loan owing to the trust by Mr J Elgin and his wife, Ms TU Elgin. They also include units held in the Elgin Development Trust valued at $589,000. The liabilities include a debt of $670,229 to the Elgin Development Trust, a debt of $328,475 to the Elgin Unit Trust, a debt of $805 to Elgin Finance Pty Ltd and small debts to the three children of Mr J Elgin and Ms TU Elgin.

6. Other evidence of the expert records that the trustee of the J Elgin Family Trust is a company, ST Pty Ltd. It is not a company otherwise referred to in the expert’s report. The expert notes, though, that F Pty Ltd is the “current” trustee of the J Elgin Family Trust. That evidence was not challenged by the Husband.

7. The Husband was given leave to adduce evidence in chief on recall after his cross-examination had finished, having said nothing about the matter in any of his affidavits. The Husband asserted no involvement in the management or day to day operation of the J Elgin Family Trust. He asserted that he had only just found out during the course of the trial that he controlled the trust through the power of removal and appointment of the trustee. He said he assumed that his son, Mr J Elgin, controlled the trust. He asserted that he did not have any desire to control the trust and that he would take steps to relinquish that control as soon as he could. He said that he did not consider he had any rights to the net assets of the trust and that he would relinquish any such claim.

8. Ultimate control of a discretionary family trust is regarded in a long line of authoritative pronouncements of the Full Court of this Court and also of the High Court of Australia as perhaps the most relevant factor in determining whether to consider the net assets of the trust as property of the parties to property adjustment proceedings in this Court. Of course, control at law and actual control as a matter of fact do not always align.

9. The undisputed evidence in this case, is that the Husband and the Wife have been extremely generous parents to their adult children over the years, bestowing them with their parental largesse to the extent of about $6,000,000 each.

10. It certainly appears to me from the expert’s evidence that the J Elgin Family Trust is utilised as an investment and income distribution vehicle by Mr J Elgin’s immediate family unit, constituted by him, his wife and their children. I am also satisfied that it is most unlikely that the Husband has controlled that. In that regard, I accept his evidence that he has played no controlling or management role in that trust. I accept the submission that he would not be seeking to claw back or recover, through his de jure control of that trust, the value of the net assets of that trust. I will not include the J Elgin Family Trust’s net assets as property of the Husband in my determination of these proceedings. I will include in my orders, orders obliging the Husband to relinquish his de jure control of that trust in favour of his son, Mr J Elgin, in the event that he has not done that yet, as he said he would.

Whether or not the value of the Husband’s share in the company, R Pty Limited should be included in determining the appropriate property adjustment orders

1. Similarly, in the report of the single expert accountant there is a valuation of the company, R Pty Limited. The expert valued the net assets of the company at $543,000 as at 30 June 2011. There is no dispute that the Husband owns one of the two issued shares in that company and that the parties’ son, Mr J Elgin, owns the other issued share. They are both directors of the company. The company is a party to the Joint Venture undertaking the Town IJ property development. The company is also the trustee of the Elgin Unit Trust. The company was incorporated in 1995.

2. The expert attributes $271,500 to be the value of the Husband’s share in the company.

3. For the Wife, it is submitted that the Husband’s interest in that company should be taken into account in determining these proceedings. For the Husband, it is submitted that it should not be.

4. I am completely satisfied that the Husband knew well before the expert’s report was made available to the Husband and his legal representatives that the single expert was going to value R Pty Ltd, in particular his interest in that company. Whilst I expect he knew that long before, I am satisfied that the very latest the Husband would have known that was on 18 April 2012 when I made orders that financial statements for the company for the 2009 and 2011 financial years be provided by him to the single expert who was engaged to undertake the expert valuations of the entities in the Elgin group of entities. The Husband was represented on the hearing of that contested application by the same solicitors and counsel who represented him throughout the entirety of these proceedings before this Court. The effect of the orders I made, over the Husband’s opposition argued vociferously by his counsel, could not, at least in my view, have been clearer in the context of the application that was heard and determined and the overall proceedings.

5. Notwithstanding that fact, the husband did not depose in any of his affidavits that he put before the Court, even the one sworn the day before the trial, to any evidence pertaining to his interest in this company, R Pty Ltd.

6. However, in the circumstances of the late receipt of the single expert’s report, I gave the Husband leave to give evidence about his interest in R Pty Ltd. His counsel opened that he would give evidence that he held his share in the company on behalf of his son pursuant to an arrangement that had been in place for years.  The Husband’s oral evidence about the company was:

   I put this together. It’s a company which was established for my son, [Mr J Elgin]. He established the company and I came into the company purely as a shareholder of it and I had no financial benefit out of it, whatsoever, and I didn’t put any financial – any finances into the company and the company is virtually – any profit that is made out of that goes to – directly to [Mr J Elgin].

   He went on to assert that he has no entitlement to any of the assets of the company.

7. The Husband’s witnesses, his long-serving solicitor and accountant, although both giving oral evidence in chief by leave, did not give any evidence that assisted the Husband’s case on this point. It is not disputed that the Husband never raised this as an issue until the trial. Not only did he say nothing about it in any affidavit he relied upon, but neither did he adduce evidence in his case from his son, Mr J Elgin. He only sought to do this late in the trial, in circumstances where Mr J Elgin was not going to be in Court in person for cross-examination on the evidence that was sought to be given. That evidence that was sought to be adduced late was not even in proper affidavit form. Leave was refused. The Wife was not cross-examined about the Husband’s interest in this company at all. Her case was completed by the time she heard the Husband’s evidence about this.

8. Unlike with the J Elgin Family Trust, there is nothing on the balance sheet of assets and liabilities of R Pty Ltd as at 30 June 2011that is in the single expert’s report that gives me any degree of satisfaction that the company is truly Mr J Elgin’s corporate vehicle. There is an asset recorded that is a director’s loan to Mr J Elgin. It is only for $14,032. It does not persuade me that the entity is Mr J Elgin’s.

9. For the Husband, the same submission was effectively made as was made in respect of the J Elgin Family Trust. It was that the Husband’s evidence is “consistent with the parties’ attitude to their children in financially benefiting them”. It was submitted that an “unwarrantedly censorious approach to the evidence led in the Husband’s case” should not be taken given the expert’s report had only been received the day before the trial and the Husband’s adjournment application based on that late delivery had been refused.

10. However, as I pointed out during the course of the trial, and as I observed above, that the Husband was an equal shareholder in R Pty Ltd, an entity that was going to be valued by the single expert, was always within the knowledge of the Husband and those advising him. The Husband has been represented throughout by very experienced family lawyers. If those matters were not within their knowledge, they should have been. 

11. In the circumstances, particularly the belated way in which the evidence was adduced and my assessment of the credibility of the Husband on disputed matters such as this, I am not prepared to accept the Husband’s evidence that he has no ‘real’ interest in R Pty Ltd without any reliable, corroborative evidence. I will include his one share in R Pty Ltd as his property in my determination of appropriate orders in this matter. The value that I will attribute to that share is something that I will indicate further on, after other relevant facts that are in dispute are determined.

Whether or not the value of the interest of the Mr Elgin Family Trust in the Elgin Development Trust should be included in determining the appropriate property adjustment orders

1. The same dispute is had between the parties about the Husband’s indirect interest in the Elgin Development Trust.

2. That trust has been valued by the single expert at $1,178,000 as at 30 June 2011. The expert has attributed half of that value to the Husband, namely $589,000, through his interest in the assets of the Mr Elgin Family Trust, of which there is no dispute he actually controls. Half of the relevant units in the Elgin Development Trust are assets of the Mr Elgin Family Trust. The other half are assets of the J Elgin Family Trust that I have determined not to consider as the Husband’s property.

3. The evidence of the expert is that that the Elgin Development Trust was established by deed in 1995. It is a unit trust and R Pty Ltd was the initial trustee but was replaced by F Pty Ltd as trustee in 2003. It is to be remembered that F Pty Ltd is owned equally by the Husband and the Wife and that Mr J Elgin is merely a director of F Pty Ltd, whereas he is an equal shareholder and director in R Pty Ltd. The expert’s evidence is that the trust is principally involved in investment and is a party to the Joint Venture undertaking the Town IJ development.

4. Its assets include a loan to Mr J Elgin of $15,679, loans to the Mr Elgin Family Trust of $6,055, the J Elgin Family Trust of $670,229, the X Unit Trust of $248,277 and V Pty Limited of $87. V Pty Ltd is a company wholly owned by Mr J Elgin and his wife, Ms TU Elgin. This trust’s assets also include units in the X Unit Trust and its equity in the Town IJ Joint Venture. Its liabilities include a debt owed to the Husband of $64,544, and debts to the Elgin Unit Trust, Ms XY Elgin (the parties’ daughter), the Elgin Business Trust, the Elgin Family Trust and R Pty Limited.

5. Much the same as was said in respect of the Husband’s interest in R Pty Ltd above can be said about the interest he indirectly holds in this trust via the Mr Elgin Family Trust. Against the same factual backdrop, including orders by me on 18 April 2012 that the financial statements for this trust for the 2009 and 2011 financial years be provided to the single expert by the Husband, no evidence was even sought to be adduced by the Husband about this issue before the actual trial was underway. Neither Mr PQ nor Mr WX gave any evidence going to the issue, despite opportunity in the trial.

6. The Husband’s oral evidence, that I gave him leave to adduce, was:

   I have no financial interest in it, whatsoever, I didn’t put any money into it and any profit that may be made out of either of those companies [F Pty Ltd and ST Pty Ltd] any profit that comes out of that is all to my son in Melbourne.

   When asked by his counsel what does he say is his entitlement to a share of any value in this trust, the Husband responded:

   No. Nothing. I don’t want any share and I’m not having any – any entitlement or any share of any profit on that company. No.

7. The balance sheet of this Trust does disclose that Mr J Elgin, through his family trust, has benefitted from large unsecured loans from this trust, but so has the X Unit Trust that owned a business that was managed by the parties’ daughter Ms XY Elgin, for whose benefit it is said the parties intended that trust to operate. I cannot say that I am satisfied, as I was with respect to the J Elgin Family Trust, that the Elgin Development Trust is truly Mr J Elgin’s vehicle alone. I cannot accept that the Husband has no interest, as indirectly as it is actually held by him, in the net assets of this trust that expert opinion values, relatively, to be worth a lot of money.  

8. For these and the same reasons as I gave in respect to the issue of the Husband’s interest in R Pty Ltd, I will include the Husband’s interest in the Elgin Development Trust, indirectly held by him through his own family trust, as his property in my determination of appropriate orders in this matter. The value that I will attribute to that share is again something that I will indicate further on, after other relevant facts that are in dispute are determined.

As to the Elgin Family Trust, should certain amounts recorded in the balance sheet as assets and liabilities of the trust be included in the valuation of that entity that is considered in these proceedings?

1. The single expert accountant included in her evidence a valuation of the net assets of the Elgin Family Trust as at 30 June 2011. There is no dispute it is actually controlled by the Husband and that its net assets should be considered as his property. The trust’s assets were valued at $2,888,000.

2. Included in the trust’s balance sheet as assets are many unsecured loans. There are a number of liabilities listed as well. The expert’s evidence is that she was advised by the Husband’s accountant, Mr WX, that these loans and debts were interest free and payable on demand. She has assumed that the loans are recoverable in full and that the debts are payable in full.

3. Again having always been aware that the Elgin Family Trust was going to be valued by a single expert, the Husband had not deposed to any evidence going to these loans and liabilities in any affidavit upon which he relied. His accountant was authorised to provide all the information to the single expert that was required by order or by request of the expert. However, at the trial the Husband sought and obtained leave to give oral evidence in chief about these issues, many of them without his counsel even cross-examining the Wife about them beforehand.

4. There are loans recorded as assets as follows:

   [Initial] YZ$15,000

   Ms AA $40,000

   Mr BB $15,000

   [Initial] CC$15,500

   [Initial] DD$25,000

   Mr EE$10,000

   $120,500

5. In respect of those loans, notwithstanding what his long-time accountant Mr WX told the single expert, the Husband said that he did not consider any of them to be recoverable. He said that these people, generally known to him, used to come to him in distress and then he would help them out with money and that these were recorded as loans. He said, with respect to some of these amounts, that the loans went back years and, in some cases, the debtor was now deceased. He said some of them were known to the Wife as well.

6. Although the Wife only just heard this evidence after her case was closed, none of it was challenged by her counsel in cross-examination of the Husband. On balance, I accept the Husband’s evidence that the debts will not be recovered from these people. I considered it some of the most credible evidence of the Husband during the trial. I will adjust the value ascribed to the Elgin Family Trust by deducting the sum of $120,500 from its net asset value

7. There is a loan recorded to Business FF of $23,000. The Husband gave evidence that it was the hospitality business on the Gold Coast that Ms KL and her former husband were running. The money was loaned to them to assist them with the troubled finances of that business. Ms KL and her former husband agreed at separation, according to the Husband, that her former husband would indemnify her with respect to all liabilities, including the money owed to the Husband’s entities. The Husband said that Ms KL’s husband went bankrupt and has left the country and that no money lent to them is expected to be recovered.

8. In respect of this loan, taking into account the belatedness of this evidence and the Husband’s lack of credibility otherwise assessed by me, I do accept, on balance, the truth of this evidence. Certainly, the Husband was not challenged by the Wife’s counsel in cross-examination on the point. I will adjust the value ascribed to the Elgin Family Trust by deducting the further sum of $23,000 from its net asset value.

9. The balance sheet also includes loans to the Husband and to the Wife. They are recorded as jointly owing the trust $139,071 and the Husband is also recorded as owing it $854,385. Including these loans as assets of the trust will be offset by recording them as liabilities of the parties themselves. I will just take account of that by adjusting the value of the trust by deducting the further sum of $993,456 from its net asset value and not including the parties’ personal liabilities to the trust in my consideration in this matter.

1. Similarly, the balance sheet records a liability to the Wife of $4,553. I will take account of that by adjusting the value of the trust by adding that amount to its net asset value and not including the amount as an asset of the Wife in my consideration.

2. There are other liabilities recorded that the Husband said in evidence would not be payable by the trust. He was conceding, thereby, that those amounts should be added back to the net value of the trust. They were:

   GG Trust $32,873

   Ms XY Elgin   $5,296

   Mr HH $2,000

   Elgin Family Trust (No. 2)   $5,690

   $45,859

3. I will be adjusting the value of the trust further by adding that amount to the net asset value of the trust.

4. I determine, therefore, that the amount that should be included in the determination of this matter as the relevant value of the assets of the Elgin Family Trust is $1,801,456.

As to Elgin Finance Pty Ltd, should certain amounts recorded in its balance sheet as assets and liabilities be included in the valuation of that entity that is considered in these proceedings?

1. The single expert accountant included in her evidence a valuation of the company, Elgin Finance Pty Limited, as at 30 June 2011. By the net asset backing method, she valued the company at $38,121,000. The shares in the company are owned by the Husband, by the Wife and by the Mr Elgin Family Trust. 

2. In exactly the same circumstances as pertained with respect to the valuation of the Elgin Family Trust, the Husband was given leave at the trial to give oral evidence going to the recoverability of certain loans recorded as assets of the company and the payability of certain liabilities that were recorded.

3. Listed as unsecured loans in the assets of the company are two amounts owed by a company, Y Pty Limited, totalling $484,546. The single expert’s evidence is this is a company in which the parties’ son, Mr KK Elgin, professionally employed, is the only shareholder and one of three directors, not including the Husband. The Husband said that he did not propose to require the parties’ son, Mr KK Elgin, through his company, to repay that debt. I accept that evidence and will adjust the value attributable to Elgin Finance Pty Limited by deducting that amount of $484,546.

4. The following unsecured loans are listed in the balance sheet as assets of the company:

   [given name] JJ   $35,000

   Ms LL $1,500

   Ms MM$10,000

   Business FF $316,751

   Ms NN $5,000

   Mr OO $22,000

   $385,751

5. The Husband’s evidence, very similar to that given in respect of similar amounts loaned by the Elgin Family Trust that I have already considered, was that these were loans to people in need who, mostly, he and the Wife knew and that he had no expectation of recovery. That evidence was not challenged by the Wife’s counsel in cross-examination. As to the large loan to Business FF, again that was the hospitality business run by Ms KL and her husband that failed. I accept that evidence of the Husband, on balance. I will adjust the value attributable to Elgin Finance Pty Limited by deducting the further amount of $385,751.

6. There is another loan recorded to a company, AB Pty Limited, for the amount of $169,567. That is a company wholly owned by the parties’ daughter. The husband’s evidence, as with the company owned by the parties’ son, Mr KK Elgin, is that he will not be recovering that debt, consistent with the generous approach taken to their children to this point in time. I accept that and will adjust the value attributable to Elgin Finance Pty Limited by deducting the further amount of $169,567.

7. There is a loan recorded in the amount of $600,053 to R Pty Ltd. The Husband’s evidence was that as that was the parties’ son, Mr J Elgin’s, company, he similarly did not intend to recover that debt. I have already determined that I do not accept that the Husband does not have an interest in R Pty Ltd. The amount of the debt owed by R Pty Ltd to Elgin Finance Pty Ltd is included in the valuation of the Husband’s interest in R Pty Ltd. I will not be adjusting the value of Elgin Finance Pty Limited in respect of this debt.

8. However, I do accept that the amount of $805 recorded as owing to Elgin Finance Pty Ltd by the J Elgin Family Trust will not be recovered, as the Husband said. I will adjust the value of Elgin Finance Pty Limited by deducting that sum.

9. Another unsecured loan recorded as an asset of Elgin Finance Pty Limited is the sum of $533,845 said to be owing by the Wife’s company, H Pty Ltd. As already observed, the Husband gave evidence that he had no intention of recovering that amount. I will adjust the value of Elgin Finance Pty Limited by deducting that amount.

10. As to liabilities of Elgin Finance Pty Limited recorded in the balance sheet supporting the valuation, the Husband gave evidence that the following liabilities would not be repaid and should, therefore, not be included. They were:

    W Pty Limited   $4,070

    Mr J Elgin $996

    V Pty Limited   $105,756

    $110,822

11. Accordingly, I will adjust the value of Elgin Finance Pty Limited by adding back the sum of $110,822. The net outcome of all of these adjustments determined so far is the deduction of $1,463,692 from the value attributed to Elgin Finance Pty Limited.

As to the Mr Elgin Family Trust, should certain amounts recorded in its balance sheet as liabilities be included in the valuation of that entity that is considered in these proceedings?

1. The single expert accountant included in her report a valuation of the          Mr Elgin Family Trust, an entity indisputably controlled by the Husband. It was valued by the net asset backing method as at 30 June 2011. The value attributable to the trust was $5,855,000. That includes the value of shares the trust holds in Elgin Finance Pty Limited, so its value will have to be adjusted having regard to the adjusted valuation of that company. I will return to that later.

2. Although quite remarkably, counsel for the Husband did not include in the schedule he attached to his written submissions in respect of the valuation of the Mr Elgin Family Trust any adjustment, he actually led oral evidence in chief from the Husband at the trial, with the Court’s leave, that two liabilities of the trust, namely $2,500 to each of Mr J Elgin and Ms XY Elgin would not be paid. Accordingly, consistent with the treatment elsewhere of similar evidence given by the Husband, I shall adjust the valuation of the Mr Elgin Family Trust having regard to this evidence by adding back the sum of $5,000.

As to the Elgin Unit Trust, should certain amounts recorded in its balance sheet as assets and liabilities be included in the valuation of that entity that is considered in these proceedings?

1. The single expert accountant included in her report a valuation of the          Elgin Unit Trust, another entity indisputably controlled by the Husband. Like the other entities, it was valued by the net asset backing method as at 30 June 2011. The value attributable to this trust was $10,562,000. The units in this trust are owned by Elgin Finance Pty Limited.

2. Again, the net assets of the trust contain assets in the form of loans that the Husband said in oral evidence in chief at the trial are not recoverable. They also include a liability that he said will not be paid.

3. The following are listed as unsecured loans:

   Y Pty Ltd $945

   Mr J Elgin $5,000

   J Elgin Family Trust   $328,475

   V Pty Ltd $285,486

   X Unit Trust   $317,010

   Mr KK Elgin   $321,511

   Ms PP $10,000

   Ms TU Elgin   $1,752

   [initials] QQ           $75,000

   $1,355,179

4. The Husband said in his oral evidence in chief that these balance sheet entries represent money given to family friends or acquaintances in need, or money advanced over many years to entities owned by the parties’ three adult children. He gave evidence that none of them would be recovered. I accept that evidence. Inexplicably, despite that evidence, in the schedule attached to the written submissions of counsel for the Husband the loans to X Unit Trust (said to be an entity that owned a business regarded by the family as Ms XY Elgin’s) and V Pty Ltd (a company wholly owned by Mr J Elgin and Ms TU Elgin) are not included in the list of loans that are not recoverable. This is totally inconsistent with the evidence of the Husband on the point that I accept. I consider it is an oversight on the part of counsel and will include the amounts in the list of loans accepted by me to be non-recoverable regardless. Accordingly, I will adjust the value of the Elgin Unit Trust by deducting $1,355,179.

5. Counsel for the Husband did, however, include a liability from the Elgin Development Trust in the sum of $178,040 in his schedule. He gives no explanation for that in his submissions. The Husband did not refer to that loan at all in his evidence. I can only assume that it is included because of the submission made for the Husband that the Husband’s interest in the Elgin Development Trust should not be considered as property of the parties in this matter and that the debt is therefore one owed by an entity said to be owned by Mr J Elgin. I have already determined that issue against the Husband. The Husband’s interest in the Elgin Development Trust is being considered as property in these proceedings. That trust’s liabilities are included in determining the value of that interest. I will include that loan as an asset of the Elgin Unit Trust.

6. The Husband also gave oral evidence that the liability of $10,000 to the RR School that is recorded in the trust’s balance sheet will not be repaid by the trust. I will adjust the value of the trust by adding that $10,000 back. The net adjustment then, will be a deduction of $1,345,179.

As to the T Unit Trust, should certain amounts recorded in its balance sheet as assets be included in the valuation of that entity that is considered in these proceedings?

1. The single expert accountant included in her report a valuation of the          T Unit Trust. The units in this trust are owned by the Elgin Family Trust which is another entity indisputably controlled by the Husband. It, too, was valued by the net asset backing method as at 30 June 2011. The value attributable to this unit trust was $413,000.

2. There are two loans recorded as assets of the trust that counsel for the Husband submits should be deducted from this value. They are recorded as:

   Mr SS $29,000

   [initial] TT$5,000

3. The Husband gave oral evidence about these amounts too. As to the loan recorded as owed by Mr SS, he said that Mr SS is the landscaper who has worked for the development business for twenty years and must have been desperate for money. He said he will not be chasing him for repayment. I accept that. As to the loan recorded as owed by [initial] TT, all the Husband said was that he does not know anything about that, does not know the person or what the loan was for. He said nothing about recoverability of the loan.

4. Like all the other loans, it is recorded in the valuation by the single expert as she was told by Mr WX that the loans were unsecured, interest free loans repayable on demand. On the evidence, particularly the Husband’s oral evidence, I do not find that this one is not recoverable. Accordingly, I will adjust the value of this unit trust only by deducting the sum of $29,000.

What values are to be attributed to certain lots in Town IJ property development as at 15 May 2012 that were not valued by the single expert real property valuer?

1. As has already been mentioned, various entities in which the Husband has interests are parties to a Joint Venture that is developing property at Town IJ, west of Brisbane. The single expert accountant was provided with a valuation report by a single expert property valuer pertaining to that development to assist her in undertaking the valuation of those entities.

2. For reasons that never became clear to the Court, the single expert property valuer did not value some of the property that made up that development. Further, the valuation that he provided was done as at 15 May 2012, creating issues having regard to the valuation date of 30 June 2011 for the entities valued by the single expert accountant.

3. When those issues were identified by the single expert accountant, only weeks out from the trial, she had a telephone conference with the legal representatives of the parties and proposed a course to be taken to address these issues in order to have her report finished prior to trial. There was agreement between the legal representatives and the single expert as to that proposed course. Pursuant to that agreement, the expert was provided with a list of the lots that remained unsold as at 15 May 2012 and the price at which the lots were being sold. She deducted an amount from the total value to allow for the GST that would be payable and she then deducted an amount of five per cent of that sub-total as an allowance for the costs of sale as she had been advised was the right amount of the estimated selling expenses by Mr PQ, the Husband’s long-serving solicitor. She has included a schedule of those lots, the sale price she was provided with, the allowance for GST and the allowance for costs of sale in her notes to Appendix T that can be found on page 90 of her report attached to her affidavit filed 17 July, 2013. Taking this course, by agreement with the legal representatives of the parties, she relied on information provided to her by the Husband’s agents. There were 44 lots included in the single expert’s schedule.

4. At the commencement of the trial, the Husband’s counsel pointed out that there was an emergent issue with the single expert accountant’s relying on the figures given to her by the Husband’s agents that were included by her in her calculations and seen in the schedule at page 90, in that many of those figures were the sale price of a lot with a dwelling constructed on it, whilst, in fact, most of the lots in that list did not have dwellings constructed on them as at 15 May 2013. I gave the Husband leave to adduce further evidence in chief going to this issue.

5. Oral evidence-in-chief going to this issue was given by the Husband, his long-serving accountant, Mr WX, and Mr UU, a licensed builder who has been doing the building for the Husband’s property development projects for about 24 years. Through Mr UU, a further schedule going to the same lots as listed on page 90 of the single expert accountant’s report was put into evidence as Exhibit 4 in the trial. It contained simple details, alongside each lot number, of the state of improvement of each particular lot.

6. From the evidence that was given, I make the following findings:

   (i) that as at 15 May 2012, four of the lots in the list, namely lots VV, WW, XX and YY, already had dwellings constructed on them and the asking price for those properties, all of which had since gone under contract, was actually $295,000 (not $290,000 as included in the schedule at page 90 of the expert’s report). As such, they carry a total gross value of $1,180,000;

   (ii)that the lots listed in Exhibit 4 with construction status as “Uncertain” and “Not certain” have likely been sold or are likely to be sold as unimproved lots on which the purchasers will build their own dwellings. There are eight of those on the list and they carry a total gross value (from the schedule on page 90 of the expert’s report) of $998,000;

   (iii)that as at 15 May 2012, none of the other 32 lots had dwellings actually under construction on them although some of them were programmed for construction of dwellings on them to start soon thereafter;

   (iv)that as at the date of the trial, 22 of the lots had dwellings under construction on them, with those dwellings ranging from 20 per cent to 70 per cent completed;

   (v)that as at the date of the trial, 10 of the lots were still vacant but, having regard to the information given to the single expert accountant evidenced in the schedule at page 90 of her report and the information in Exhibit 4, six of those vacant lots are programmed to have dwellings constructed on them and four of them are likely to be sold as unimproved lots on which the purchasers will build their own dwellings. The four lots likely to be sold carry total gross value (from the schedule on page 90 of the expert’s report) of $500,000. The other six lots that are likely to have dwellings built on them by the developer have a raw land value of $125,000 and, therefore, carry a total gross value of $750,000;

   (vi)that the cost to the developer of putting a dwelling on each lot is $140,000 plus GST of $14,000 (a total of $154,000) of which approximately $18,000 plus GST ($19,800) is incurred in respect of costs before construction of the dwelling actually starts;

   (vi)that the building company, L Pty Ltd, had charged the developer $99,943 prior to 15 May in the financial year 2012 and, on balance, they were the costs of approximately $19,800 in respect of the preliminary costs of construction of dwellings that had not actually been commenced on  five lots as at 15 May 2012;

   (vii) that the 22 lots on which dwellings were being constructed at the time of the trial would be selling for $305,000 when completed (a gross total of $6,710,000), having had $154,000 spent on construction costs per lot (a gross total of $3,388,000) of which $99,943 was already expended as at 15 May, 2013. The net amount of total sale price less total construction cost is then $3,322,000.

7. For the Husband, it was submitted that the “most reliable basis upon which to value the unsold lots at the valuation date”, is to take the four lots that had houses on them at 15 May 2012 at the value in the schedule on page 90 of the single expert accountant’s report less GST and five per cent selling costs and then the remaining 40 lots at the raw land value of $125,000 less GST and less selling costs at five per cent. The figure submitted for the Husband as the appropriate value of the 44 lots to be taken into account is $5,056,545.

8. For the Wife, it was submitted that the four lots with houses on them were already correctly taken into account by the single expert. That is, effectively, the same submission as made for the Husband on that point. It is further submitted that 18 other lots are appropriately valued at their raw land value and, therefore, already correctly taken into account by the single expert. Again, that is, effectively the same submission as made for the Husband on that point. Where they differ, is with respect to the remaining 22 lots on which dwellings were under construction at the time of trial.

9. Whilst the Husband contends those should be valued at raw land value less GST less five per cent sale costs, for the Wife it is contended that they should be valued at $305,000 less GST less five per cent sale costs less $122,000 construction costs (taking the construction cost at $140,000 less $18,000 preliminary costs it is contended were already expended at the valuation date).

136.Counsel for the Husband, in cross-examining the single expert accountant, sought her approval of the course he ultimately submitted was the “most reliable basis”. The single expert did not agree that it was. She gave evidence that such an approach would fail to appropriately pick up the value to the developer of the lots that is created by the anticipated expenditure on those 22 lots of the costs of construction of the dwellings. If the lots are worth $125,000 and $154,000(including GST) is to be spent on them to convert them into lots worth $305,000 (including GST) there is a small profit component of value to the developer. I accept that evidence of the single expert accountant.

137. In respect of those 22 lots, the value that I will attribute to them in the determination of this case will be determined by multiplying $305,000 x 22 ($6,710,000) and deducting 22 x $154,000 ($3,388,000). That gives a net amount of $3,322,000. From that I will deduct an amount for GST. That amount should reflect, though, the input tax credit that the developer will get for the $14,000 GST paid for the cost of construction of the dwellings. Total GST on $6,710,000 equals $610,000. Total GST paid in respect of the $3,388,000 costs of construction equals $308,000. Making allowance for input credit of that amount against the $610,000 gives the net amount of GST of $302,000.

1. $3,322,000 less $302,000 equals $3,020,000. From that figure I will deduct five per cent sale costs of $335,500 (five per cent of the total sale price of $6,710,000). That gives a net figure of $2,684,000 for those 22 lots.

2. For 18 lots I will take the land values found by me in paragraph 132 above, namely $998,000 plus $500,000 plus $750,000, a total of $2,248,000. To that I will add the value of the four completed dwellings from paragraph 132 above, namely $1,180,000. These amounts total $3,428,000. I will deduct GST of $311,636.36. This gives $3,116,363.70. From that I will deduct a further five per cent of the total sale cost of $3,428,000 which is $171,400. This gives a net figure for those 22 lots of $3,256,600.

3. Accordingly, the value I attribute to the unsold lots in the Town IJ development for these proceedings is $5,940,600. This is $2,797,673 less than the value ascribed to them by the single expert in her report and will have a flow through effect to the value of the entities in which the Husband has interests that have equity in the Town IJ development joint venture.

What is the value to be attributed to all of the lots in Stage ZA of the Town IJ property development as at 15 May 2012?

1. None of the lots in what the developers describe as Stage ZA of the Town IJ development were valued by the single expert property valuer either. He pointed out in his valuation report that he had been advised that Stage ZA, still being developed at the time, had been pre-sold “in one line” to an entity called Business ZZ. He had not viewed the contract between the developer and Business ZZ and provided no opinion on value.

2. The single expert accountant referred to a “call option” in respect of the agreement between the developer and business ZZ for the sale of all of Stage ZA. She included in her report, also in the schedule at page 90, by reference to Stage ZA, 52 lots at $108,000, a gross total of $5,616,000. There is no dispute about that figure being correct.  Given the “in one line” sale, the price per lot, being $108,000 as opposed to the $125,000 that has already been discussed in these reasons, seems reasonable. The expert then subtracted GST of $510,545 and 2.5 per cent sale costs of $127,636 to arrive at a net figure of $4,977,819 for Stage ZA.

3. The single expert had requested of the Husband or his agents, to assist her in preparing her report, a list of all property development costs incurred in the period 1 July 2011 to 15 May 2012 so as to be able to take those into account given the different valuation date of 15 May 2012 being applied to the Town IJ development. She was provided with a list from the General Ledger entries by Mr WX. The total amount expended until that date was $1,094,752. The single expert was also informed of the work done by the developer’s building company for which the developer had been invoiced $99,943 for work done to that point. This is the amount that I have determined above is actually taken up by allowing for and deducting the amount of $140,000 plus GST for the cost of construction of dwellings on 22 lots of unsold property in another stage of the development. Although the single expert has taken that amount of $99,943 off in determining her valuation, I will adjust for it having already been included in the total deduction for the cost of constructing dwellings on those lots and to ensure it is not double counted.

4. When Mr WX gave his oral evidence, he gave evidence that the sum of $1,094,752 of development expenditure that he had provided to the single expert did not actually reflect all of the costs that were required to be spent on work to Stage ZA to bring it to the point of meeting the developer’s contractual obligations to Business ZZ so as to be entitled to the $5,616,000 agreed price. His evidence, as I understood it, was that the total spent and required to be spent by the developer to get Stage ZA to the point of being able to be transferred to Business ZZ as per the agreement is actually $1,809,559 already spent and $468,000 still to be paid at the time of the trial, a total of $2,277,559. He then said that as the single expert had allowed the amount of $1,094,752, a further adjustment of a deduction of $1,182,288 needed to be made to account for this.

5. Mr WX said:

   The total costs were $1,600,000 to [Business AAA] plus $677,040 to [BBB Council] for head works. And then we deduct of that total what [the single expert] had allowed of $1,094,752.

   He also said that there was still $468,000 approximately to be paid to Business AAA.

6. A document being described as a printout of the General Ledger for the Joint Venture Town IJ development was tendered into evidence through Mr WX by the Husband’s counsel. It became Exhibit 11. Just how it supports Mr WX’s oral evidence is very difficult to determine. It certainly displays expenditure entries for the development for the 2012 financial year to 15 May 2012 totalling $1,094,752, the figure provided to the single expert when she sought it. It also includes expenditure entries up to 28 June 2012 that total another $1,662,279. The total then is $2,757,031 for the year.

7. The information contained in Exhibit 11 though does not sit, at least in my view, consistently with the oral evidence given by Mr WX. It contains payments to Business AAA for the financial year 2012 totalling $1,136,395. The evidence that another $468,000 approximately was still to be paid to Business AAA is consistent with the oral evidence that the total of Business AAA contract was $1,600,000. However, the total payments to BBB Council up to the date of 15 May 2012 are only $121,306 and then by the end of the financial year they total $833,290, including the amount of $677,040 that Mr WX said was for the cost of head works. 

8. It seems to me that if Mr WX’s evidence that the contract with Business AAA for work to bring Stage ZA up to handover is $1,600,000 and that the amount payable to BBB Council for the head works undertaken in bringing Stage ZA up to handover was $677,040 is correct, and that the total costs of developing Stage ZA to handover is the total of those two amounts, namely $2,277,040 then Mr WX’s calculations and the Husband’s concessions in respect of this matter are incorrect.

9. If the total costs spent on the whole development from 1 July 2011 to May 15 2012 were $1,094,752 and an additional $677,040 was paid to BBB Council after that date for expenditure to bring Stage ZA up to handover and an additional $851,772 was paid to Business AAA after that date for work to bring Stage ZA up to handover, with another $468,000 still to be paid to Business AAA in respect of that contract then it appears to me that some recalculating is required. Those amounts total $3,091,564 and that is $1,996,812 more than was allowed and deducted by the single expert in doing her calculations.

10. In his valuation report, the single expert property valuer says:

    Bulk earthworks have been undertaken to prepare Stage [ZA] for civil works. Earthworks include construction of individual allotments and preparation of the road base.

151.That is certainly consistent with more work having to be done, including drainage work to each lot within the Stage and head works.

1. Under cross-examination by counsel for the Husband, the single expert accountant certainly agreed that if Mr WX’s evidence about this issue was accepted and I found that they were proper development costs for Stage ZA that they should be deducted.

2. In his written submissions, counsel for the Husband appears to have simply overlooked or ignored what I have described to be anomalies in Mr WX’s evidence having regard to the content of Exhibit 11. His written submissions include the assertion that the further costs of bringing Stage ZA up to handover “ought to be increased by $1,182,288”. He includes a schedule (C) that provides for that adjustment, as well as also a further adjustment due to tax saved through the primary adjustment, of $354,686 being added back. This is because the single expert allowed for a total of $2,719,520 in income tax payable by the Joint Venture participants in her valuation report at page 92 at the rate of 30 per cent and $354,686 is 30 per cent of $1,182,288.

3. For the Wife it is submitted that no such adjustment should be made on account of Mr WX’s oral evidence and Exhibit 11. It is submitted that Mr WX was the source of the information contained in the single expert’s report which he then attempted to clarify in his oral evidence in chief. I understand that to be a submission attacking the reliability or credibility of Mr WX’s evidence, with a view to persuading me not to accept any of it. It was also submitted that his evidence “cuts across” the method of valuation that was agreed to be undertaken between the legal representatives and the single expert. Finally, it is submitted that the Court could somehow use Mr UU’s evidence to address the issue.

4. With respect to counsel for the Wife, I do not accept any of those submissions. The single expert’s report was only received by the Husband’s legal representatives the day before the trial commenced. Some of its contents, such as the approach to the valuation of Stage ZA of the Town IJ development, clearly caused serious consternation to the Husband, his agents and his legal representatives. I consider that they realised then the actual impact, in dollar terms, on the Husband’s case of the valuation opinion provided with respect to Stage ZA and the apparent deficiencies in that, bearing in mind the deficiencies in the information that the single expert had been provided with. I am satisfied that in this respect, Mr WX was doing the very best he could in the circumstances to get correct information before the Court, but that he still did not get it quite right. I do not consider that Mr WX was making it up or that he was giving evidence sourced from others that was made up and not true. I am satisfied that whilst he did not prepare and present the evidence he gave with great care, that the evidence he gave was based on the underlying truth, namely that the figures he had previously given to the single expert were not a complete and accurate picture of the actual costs of developing Stage ZA as they ignored costs incurred that had not yet been paid, and costs that, although not yet incurred, were liable to be paid in order to bring Stage ZA up to handover.

5. I do not consider that the evidence cannot be accepted and relied upon to determine this matter because it is said to cut across the agreement the legal representatives reached with the single expert. My reading of the transcript that is part of Exhibit 1 does not persuade me that there was any agreement as to how this particular issue was to be dealt with. Finally, I do not consider that Mr UU’s evidence assists me on this particular issue.

6. Ultimately, notwithstanding the way in which the evidence came out and the manner in which counsel for the Husband has dealt with the matter in his submissions (which I consider, on the evidence, to be erroneous), I find that the expenditure on development at Town IJ for the period 1 July 2011 to 15 May 2015 of $1,094,752 is not all relevant to Stage ZA alone and that additional expenditure of $1,996,812 referable particularly to bringing Stage ZA up to handover should be taken into account in this matter. I will adjust for that amount by deducting it from the single expert’s calculations. I will then adjust for the impact on the tax adjustment the single expert allowed for by adding back $599,043 to her calculations. 

What is the amount to be attributed to commissions paid in respect of sales of lots in the Town IJ development between 1 July 2011 and 15 May 2012?

1. The single expert accountant, when considering the value of the Town IJ development as at 15 May 2012 made adjustments to her 30 June 2011 valuation of the entities by adding the total sale of lots at the development from 1 July 2011 to 15 May 2012. She had asked for and was provided with details of the sales. Those details, provided to her by the Husband’s agents, Mr WX and Mr PQ, included commission paid in respect of 28 properties sold that totalled $388,000. There were, though, details provided to the single expert of 62 properties sold in that period. No details of commission were given with respect to 34 of the properties sold. Details of legal fees charged, totalling $3,795, were only given with respect to nine properties. Clearly, the figure was not very reliable.

2. In response, the single expert asked Mr PQ as to his estimate of selling expenses and he gave her the figure of five per cent of the total. That, in itself, appears to have been a particularly unreliable estimate given that the list of sales with commission provided in the schedule included at page 89 of the single expert’s report, shows that properties that sold for $129,000 had commission of $14,000 recorded next to them. That is over 10 per cent of the sale price.

3. Nevertheless, having been given the five per cent figure by Mr PQ, the single expert applied that to the total sales net of GST, a figure of $7,925,502, and deducted $396,275 for the costs of sales.

4. At the trial, clearly quite troubled by that approach and the outcome it produced, the Husband obtained leave to adduce further evidence in chief from Mr WX going to the issue. Mr WX gave evidence that he had asked Mr J Elgin as to the commissions on certain sales and had also had recourse to the books of account of the Joint Venture. He also produced a document that he said set out the commissions that in fact had been paid. He said that the document lists all of the commissions that have actually been paid from 1 July 2011 until 30 June 2012. They total $932,241. Mr WX said that he had satisfied himself that the commissions listed related to the sale of the properties set out on page 89 of the single expert’s report. That document was admitted into evidence as Exhibit 10.

5. Mr WX went on to say that, the commissions that had been listed by the single expert had also been paid, but that they included GST which had been claimed back, giving a net outgoing of $352,727. Accordingly, Mr WX’s evidence was that $1,284,968 had been paid in commissions. He added the $3,450 in legal fees that the single expert had also listed to arrive at $1,288,418. He then deducted the $396,275 that the single expert had taken into account to arrive at a figure of $892,143 that he said was therefore overstated by the single expert in her calculations.

6. There are 48 entries in the document that is Exhibit 10, nine of which were paid after 15 May 2012 and 39 of which were paid before that date. None of them are for the amount of $14,000. Although there are five more entries on Exhibit 10 for the period to 15 May 2012 than there were sales in the schedule on page 89 of the single expert’s report that did not have commissions recorded, some of the amounts on the schedule are for sums of $2,000 or even less. As counsel for the Wife had Mr WX concede in cross-examination, the details included in Exhibit 10 are not in any way identifiably linked to the particular sales listed in the schedule on page 89. However, there was no suggestion by Mr WX that the entries in Exhibit 10 only represented commissions on sales that were not recorded in that schedule. Many of the dates recorded for the commissions paid in Exhibit 10, I consider, are around the dates that are recorded for sales in the schedule relied upon by the single expert.  The list of payees certainly looks, in name alone at least, reflective of potential sellers of the properties or, at least, introducers of buyers, to whom commission might have been paid.

164.The single expert, herself, conceded in cross-examination at the trial that the similarity of the figure arrived at by applying the five per cent to the total of the sale and the total of the 28 commission figures she had actually been given excited her attention. Clearly, in my view, that demonstrated that the five per cent figure given by Mr PQ was probably wrong.

1. On balance, I accept the evidence of Mr WX and that Exhibit 10 does reflect other commission paid in the financial year in respect of sales of properties in the Town IJ development that the single expert considered. As the relevant date was 15 May 2012, I also accept, as was conceded by counsel for the Husband in his written submissions, that the sum of $90,041.38 should be deducted from the total of the entries in Exhibit 10 so that only commissions paid up to 15 May 2012 are included. The figure arrived at then is $842,200. Add the $3,450 plus $352,727 and the total is $1,198,377. Deduct the sum of $396,275 allowed by the single expert and the figure is $802,102. Counsel for the Husband also then allowed for the difference in respect of the adjustment the single expert had with respect to the 30 per cent for tax to arrive at an adjustment by deduction of $561,472 from the single expert’s valuation of the Town IJ development. I accept that.

What is the value to be attributed to a large number of unit properties in another development undertaken at Town JK in Queensland?

1. The single expert provided a valuation of the S Unit Trust that is a trust in which all the units are owned by Elgin Finance Pty Ltd. Included in the assets she considered in her valuation were 33 unsold units in a development being undertaken by the S Unit Trust at Town JK.

2. The single expert real property valuer had provided a valuation of those unsold units as at 15 May 2012. He had given the opinion that the market value of all of those units, valued one by one, equalled $13,935,000. He went on to assert that the likely purchaser of the subject units “would be an investor who would look to purchase the units in one line (wholesale) to on-sell individually at a profit with a mark-up for retail.” The “in one line” value attributed to the 33 units by the single expert property valuer was $9,500,000.

3. The single expert accountant included the figure of $9,500,000 in her valuation of the S Unit Trust. She did that, the evidence revealed, because she was informed by Mr PQ that he had been instructed “by the director of [S]” (the directors of S Pty Ltd, the trustee of this unit trust, are the Husband and Mr J Elgin) that it was his intention to negotiate an “in one line” sale of the unit properties.

4. However, in his oral evidence at the trial, the Husband’s clear and unequivocal evidence was that he intended to sell these remaining unsold units in the Town JK development over time and not “in one line” - as in selling them all to one purchaser at a reduced price. He was optimistic that they could be all sold by February of 2013. He said that he would readily place a number of them with one agent to sell, and that he had already done that, but the few units that had sold had achieved sale prices of around $360,000 to $400,000, depending on the size of the unit. Some of the units had been valued individually at around that price and several had been valued at less than that price. The ones that had already been sold were not identified by the Husband. The average value of a unit at the total wholesale price of $9,500,000 is only $287,878. The average value of a unit at the total market value of $13,935,000 is $422,272.

5. For the Wife, it was submitted that the factual foundation upon which the single expert had taken the wholesale valuation figure did not apply and that, having regard to the Husband’s own evidence, the market values that the single expert property valuer had firstly ascribed should be the ones used by the single expert accountant to determine the value of the S Unit Trust. I consider that to be entirely correct.

6. Counsel for the Husband, in his written submissions, valiantly maintained the argument that the wholesale valuation is that which the Court should accept as the value of those units at the date of the trial. The basis upon which that would be the case is just completely at odds with the Husband’s own evidence. I do not accept the submission.

172.The gross value of the 33 unsold units to be applied in the single expert accountant’s exercise is $13,935,000.

1. In the witness box, the single expert accountant performed the exercise again using that gross figure instead of the amount of $9,500,000. She ultimately determined that a further adjustment was therefore required to be made by adding the sum of $2,616,775 to the figure of $7,321,000 that she had used for the valuation of the S Unit Trust. I accept that. That figure flows through to the value of Elgin Finance Pty Ltd.

What then becomes of the figure of $38,599,608 provided by the single expert accountant as her opinion of the net value of equity and loans of the parties in the entities listed on page 7 of her report?

1. The parties are not in dispute about any other aspect of determining their interests in property. All other aspects of the single expert accountant’s valuation are, as I understand the matter, agreed upon. Accordingly, having regard to that and all the reasons I have just given, I have adopted the following values in respect of the parties’ interests in the following entities:

Mr Elgin Family Trust	$5,322,498
Elgin Family Trust	$1,772,456
Elgin Finance Pty Ltd	$30,475,110
R Pty Limited	($156,411)
Elgin Superannuation Fund	$454,958
Ms Elgin Superannuation Fund	$1,091,831
H Pty Limited	$609,679
Total value of equity interests	$39,570,121
Less: Related Party Loans not yet taken off	$3,097,975
Net value of equity and loans	$36,472,146

1. Accordingly, the property of the parties or either of them that I determine is to be considered in these property adjustment proceedings is as follows:

Net value of equity and loans	$36,472,146
Personal savings of the Wife	$170,994
Apartment D, Gold Coast	$2,000,000
Apartment CD, Melbourne	$1,450,000
Apartment A, Melbourne	$1,950,000
DE Street, Suburb FG, Qld	$346,282
2 x units at GH Street, Gold Coast	$790,000
B Apartment, Suburb FG, Qld	$1,100,000
Wife’s cars	$30,000
Husband’s car	$10,500
Total	$44,319,922

The Assessment of the Contributions of the Parties

1. The parties proposed nothing other than an assessment of their respective contributions as against their global interests in property and superannuation. I consider that an appropriate approach.

2. There was no dispute that they started their married life together with very little and, that in the twilight of their lives, after 49 years of marriage to each other and a few years of separation, there is an extremely valuable pool of property to be divided between them. There is very little dispute between them about the course of their marriage, the roles undertaken by each of them within it and the quality each ascribes to the other’s efforts in carrying out those roles.

3. Like in so many Australian marriages of the early 1960’s, this couple married young, brought children into the world soon after their marriage and apportioned the necessary homemaking/parenting and “breadwinning” roles between them principally on the basis of gender. Whilst the Wife capably and almost single-handedly performed the homemaking/parenting role, the Husband devoted himself to working hard in the business that was created. The totality of their efforts produced “success”; that is, if nurturing three children to happy, healthy and productive adulthood and developing a business into a very valuable, national organisation equates to “success”. Whilst I acknowledge that “success” is a value laden concept, my own assessment of current community values is that achievement of these things just described, generally, are considered to be measures of success.

4. In the 1990’s, after their children had reached adulthood and moved into independence, their valuable business was sold and the capital it produced was used to begin property development. Property development, managed and ‘driven’ by the Husband who has continued to actively work in this field notwithstanding his age, has gone on for all the years since then. It has been conducted through an array of companies and trusts, in many of which both the Wife and the Husband have had shareholdings and directorships. It has been productive of substantial wealth for the parties, providing them with the means of enjoying a comfortable lifestyle and bestowing the same opportunity on their adult children. During those last 25 years of their marriage, whilst the wife continued to be a homemaker, she also did things often undertaken by people in this phase of their lives, recreational activities such as playing golf, tennis and enjoying social time with friends and extended family. However, along the way, about 10 years ago now, the Wife also received about $1.3 million from her late mother’s estate that went into the parties’ capital.  

5. As to post-separation matters, whilst the wealth the parties had amassed by the time their marriage ended, and the income that wealth itself generates, has essentially supported them both since their separation, supplemented, of course, by the Husband’s continued active involvement in property development, the Husband’s new wife, her two daughters of her former marriage and the child of the Husband’s relationship with her have also been completely financially supported from that same source of funds. Also, as has already been recognised, a few hundred thousand dollars was lost to the parties by the Husband’s unilateral advance of money to the failing business of his new wife and her former husband. Those matters, too, are relevant facts to consider in the discretionary exercise. 

6. Despite lack of significant disagreement about all of the relevant factual matters, there is a vast gap in the perceptions of the Husband and the Wife as to the outcome that should be reached in the proceedings. As, I have already observed, the Husband contends for a 70/30 division in his favour whilst the Wife contends for a 52/48 division in her favour. It is interesting to note at this point that the evidence established this position adopted by the Husband to be one of relatively recent construct. Around the time of separation, he had made it clear to the Wife that he considered an equal division of their wealth acceptable. At trial, he put the change in his position down to “an enormous amount of water [having] passed under the bridge” since then.

7. The Husband’s position advanced at trial is founded on the submission that up until the time when their youngest child became independent the parties’ contributions would be assessed as equal. In essence, his submission is that then the Wife’s contributions in the role of parent and homemaker changed dramatically, whilst he continued to contribute to the production of income and great wealth. His submission, as I understand it in simple terms, is that as his contributions, since the 1990’s, have been productive of that great wealth and the Wife’s have not, the weighing of their respective contributions throughout the 49 years of their marriage and in the years since their separation, should result in the substantial imbalance in his favour that the proposed 70/30 division reflects.

8. As was pointed out by counsel for the Wife, the statutory mandate that this Court has in these proceedings is to make such order as “it considers appropriate” provided it is satisfied that, in all the circumstances it is “just and equitable” to make the order. In considering what order is appropriate to be made that is, at the same time, just and equitable, the Court must take into account all of the matters set out in s79(4) of the Family Law Act. Those matters include the direct and indirect contributions the parties have made to the acquisition, conservation or improvement of any of their property, and to the welfare of their family, as well as the effect of the order upon the earning capacity of either party and all of the matters referred to in s 75(2) of the Act, in so far as they are relevant.

9. Although I am quite conscious of the clear authoritative rejection of the existence of a presumption of equality as a starting point in the assessment of contributions in this discretionary exercise, I am equally conscious of the authoritative pronouncement of the following propositions that go to informing the discretion (whether they are correctly described as “values” or otherwise):

   ·contributions by a spouse to the welfare of the family, including as a homemaker and a parent, should be recognized in a substantial and not merely in a token way;

   ·no nexus between a spouse’s contribution and a specific item of property is required when the parties’ contributions are being considered; and

   ·marriage is and should be regarded as a genuine partnership to which each party brings different gifts and when one party’s efforts produce great wealth that is no reason, in itself, to disadvantage the other party.

10. Having regard to these propositions, I respectfully agree with the view expressed by my judicial colleague, Cronin J, in Bulleen & Bulleen (2010) 43 Fam LR 489 that to retrospectively distinguish between the value of the roles respectively adopted by the parties in the course of a very long marriage, who saw themselves as equals, merging their lives and each contributing to their common goals to the best of their abilities, is something fraught with the risk of injustice.

11. In the same vein, I also agree with the submission of counsel for the Wife that to consider a party’s contributions to the welfare of the family as of diminished significance in a long marriage where the children who that party principally parented have long grown up and left home is contrary to community expectations and also likely to be productive of injustice. The obligation to recognize contributions to the welfare of the family in a substantial and not token way, without having to link them to particular property amassed by the couple, provides principled foundation, in my view, to the attribution of weight to the “fantastic” and “terrific” contributions made by the Wife to the welfare of the family, including as a homemaker and parent over  30 years, and as a homemaker on an ongoing basis to the point of separation after 49 years, so as to arrive at a determination that the contributions of both parties made in their respective roles weigh relatively equally, even where the Husband has continued to generate further wealth by his own contributions after the children have grown up.

12. Counsel for the Husband rightfully eschewed any argument that his client’s contributions were made with “special skills” that should be given greater weight than the contributions of the Wife in the assessment of their contributions overall. As each party appeared to accept, there is little room for such argument in this Court any more.

13. I am quite satisfied that there can be little doubt about the quality of the Husband’s contributions throughout the marriage. The fruits of those contributions demonstrate the acquisition and possession by him of ability, energy, determination and drive – a combination of attributes that help people succeed in whatever field of endeavour they choose to devote themselves to. I am, however, equally satisfied that there can be little doubt about the quality of the Wife’s contributions throughout the marriage. The Husband was full of praise of the Wife and the quality of her contributions. He said that he thought she was a “fantastic homemaker” and a “terrific” parent.  I accept that she was. Importantly, in my view, the Husband gave no evidence that the quality of her contributions deteriorated to any relevant degree during the course of their very long marriage.

14. I am satisfied that the Wife’s contributions as a homemaker and as a parent, of such a quality as the Husband asserted they were, continued, though clearly in somewhat different form than before, beyond the date that their youngest child grew up and left home. I accept that the Wife continued to contribute to the best of her capacities to the welfare of the relationship in the many varied ways that a spouse in her position does, even after children have grown up and left home – as a homemaker, friend, companion, emotional support, confidante, lover, parent of adult children, grandparent, and the list goes on. I am satisfied that the Wife’s contributions to the welfare of the relationship and the family that the relationship produced, made throughout almost the entirety of the parties’ adult lives, indirectly contributed in a significant measure to the capacity of the Husband to devote himself to work and wealth generation throughout the entirety of their marriage. That his contributions might have directly produced income and, ultimately, substantial wealth, whilst hers did not, makes them, in my view at least, no more “valuable” in an overall assessment which has, at its core, the determination of what is just and equitable as between a couple who, voluntarily and without reservation, merged all aspects of almost the entirety of their adult lives. 

15. As to the inheritance received by the Wife – the reason for the submission by counsel for the Wife that the assessment of contributions should ultimately weigh in favour of the Wife by a couple of percentage points – I am not persuaded that justice and equity in this case demands particular recognition of its receipt by her over and above an equal sharing of the parties’ total property interests.

16. Its receipt by her approximately 10 years ago, consideration of the amount of it ($1.3 million) as against the current value of the parties’ entire property interests ($44 million), its place in the assessment of the parties’ multitude of contributions across 49 years of marriage and three years of separation, all persuade me to the view that at the end of this very long marriage, the “leap” from the qualitative evaluation of all of their contributions to the quantitative determination of a just and equitable division of their property interests should nevertheless result in an equality of division being the basis upon which  appropriate adjustment orders are determined.

17. Equality of division of all of the property interests will result in each of the parties retaining or receiving property that I have determined to be valued at $22,159,961 at the time of the trial. Given the fact that the parties are 74 and 73 years old respectively, I am quite satisfied that such a sum is more than sufficient to meet all of the needs of each of them for as long as each shall live, that is, even taking into account that the Husband is now fully supporting a new wife who is still a young woman, that women’s own two children and their own young child.

18. Considering also, as I must, all the other matters that are set out in s 75(2) of the Family Law Act 1975 (Cth), I do not determine there to be any other factors that demand further adjustment away from equal division in order to be able to make orders that are “just and equitable” as between the parties in all the circumstances of this case.

The Orders that I will make

1. The Wife seeks to retain three particular real properties of the parties and the Husband agrees with that outcome. Those are:

Apartment D, Gold Coast, Qld	Currently registered in the joint names of the Husband and Wife	Value $2,000,000
Apartment A, Melbourne, Vic	Currently registered in the joint names of the Husband and Wife	Value $1,950,000
Apartment G, Gold Coast, Qld	Currently registered in the name of the Elgin Finance Pty Ltd.	Value $875,000

1. The Wife will also retain her own superannuation valued at $1,091,831, her personal savings of $170,994, her motor cars valued at $30,000 and her interest in the company, H Pty Ltd, valued at $609,679.

2. All of that property and superannuation totals $6,727,504. Accordingly, for the Wife to retain and receive property and superannuation to the value of  $22,159,961 she should receive property and/or cash from the Husband to the value of $15,432,457, in return for transferring to him all of her interest in the property and the entities that he will retain control of.

3. Each of the parties has proposed orders that have the Husband making up what each contends should be the Wife’s property entitlements, after retention by her of the property just referred to, by paying her the balance in money. I consider that course appropriate, even though the amount I have determined the Husband will now pay the Wife is less than she seeks and more than twice as much as he contends for.

4. At the trial, the Husband gave evidence that he expected to be able to obtain funds to pay the Wife her monetary entitlement by February, 2013. That time has now well and truly passed. I consider it appropriate to give him forty-five days from the date of judgment to pay the Wife the cash sum of $15,432,457.

5. The nature of the other orders sought by each of the parties is effectively the same, though slightly differently worded. For no better reason than the fact that the Wife is to get the benefit of transfers of real property, I have adopted the wording proposed by her counsel in respect of the Orders requiring those transfers. As she seeks indemnities from the Husband that I consider appropriate, I have adopted the wording proposed by her counsel in that respect and I have adopted some of the wording proposed by each side in respect to the Orders requiring the Wife to transfer her right, title and interests in the companies and trusts that the Husband is to retain. I have included, as proposed by the Wife, orders that any expenses associated with transfers/renunciation of rights be borne by the transferee.

6. I make the Orders set out at the commencement of these Reasons for Judgment. I am completely satisfied that they appropriately effect property adjustment between the Husband and the Wife and that they are, in all the circumstances of this case, just and equitable.

I certify that the preceding two hundred (200) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 17 January 2014.

Associate: 

Date:  17 January 2014