Fair Work Ombudsman v Kensington Management Services Pty Ltd - [2012] FMCAfam 257

FEDERAL MAGISTRATES COURT OF AUSTRALIA

DRAKE & BAY

[2012] FMCAfam 257

FAMILY LAW – Property dispute – lengthy marriage – arguments as to initial and subsequent contributions – parties conducting their business affairs and employment through numerous companies – inadequate evidence on significant matters – failure by husband to make disclosure – Court doing best it can in the circumstances.

Family Law Act 1975

Chang v Su (2002) FLC 93-117
In the marriage of Weir (1993) FLC 92-338

Applicant:

MS DRAKE

Respondent:

MR BAY

File Number:

MLC 6041 of 2010

Judgment of:

Burchardt FM

Hearing date:

8 February 2012

Date of Last Submission:

15 February 2012

Delivered at:

Melbourne

Delivered on:

28 March 2012

REPRESENTATION

Counsel for the Applicant:

Mr D. Sweeney

Solicitors for the Applicant:

Marshalls + Dent Lawyers

The Respondent:

In person

THE COURT ORDERS:

That the parties do all acts and things and sign all necessary documents in order to:
(a)Within 14 days, cause the distribution, legal ownership and if required, the transfer of the registration, of the Acco Prime Mover 2350E Registration [omitted] (“the Prime Mover”) and the Gooseneck Trailer Registration [omitted] (“the Gooseneck”) free of all encumbrance from [U] Pty Ltd (A.C.N. [omitted]) (“[U]”) into the name of either the wife or any other entity to which the wife nominates;
(b)Within 14 days, cause the transfer of the registration (if required) and legal ownership of the following horses:
(i)[1];
(ii)[2]; and
(iii)[3];
free of all encumbrance from [F] Pty Ltd (A.C.N. [omitted]) (“[F]”) into the name of either the wife or any other entity to which the wife nominates;
(c)Within 14 days, cause the transfer of the registration (if required) and legal ownership of the following horses:
(i)[4];
(ii)[5];
(iii)[6];
(iv)[7];
(v)[8];
(vi)[9];
(vii)[10];
(viii)[11];
(ix)[12];
(x)[13];
free of all encumbrances from [P] Pty Ltd (“[P]”) into the name of either the husband or any other entity to which the husband nominates;
(d)Within 14 days, cause to liquidate all shares currently held by [O] Pty Ltd (A.C.N. [omitted]) which are held on trust for the [Mr Bay] Superannuation Fund (collectively referred to as “the self managed super fund”) (“the liquidation of shares”);
(e)Within 14 days the parties jointly instruct [B] Accountants to prepare lodge and settle the taxation returns for the [Mr Bay] Superannuation Fund for the financial year ending 30 June 2011 with a view to such returns being lodged without delay;
(f)Within seven days from all proceeds from the liquidation of shares being realised (“the transfer date”) cause to rollover the total sum of $182,000.00 made up from the entire proceeds received from the sale of the shares as set out in sub-paragraph (d) herein in addition (if required) to such further cash from the existing [O] Bank Account Number [omitted] to ensure the wife receives the total sum of $182,000.00 into another compliant fund of the wife’s choice (“the superannuation rollover”);
(g)The balance then remaining in the [O] Bank Account Number [omitted] be applied as follows:
(i)First to discharge all CGT payable from the sale of the shares referred to in sub-paragraph (d) herein;
(ii)Second to pay [B] Accountants for invoice 60089 and the fees relating to the lodgement of the 2011 tax returns (as referred to in sub-paragraph (e) herein;
(iii)Third the balance then remaining to be deemed to be part of the superannuation entitlements of the husband.
(h)Contemporaneously with the superannuation rollover;
(i)The wife provide the husband Withdrawal of Caveats with respect to the following properties;
(A)Property A; and
(B)Property B;
(collectively referred to as “the farm property”); and
(ii)At the husband’s expense, the wife transfer to the husband or his nominee;
(A)any shares and resign any offices she holds in:
I        [U];
II      The entity known as [G] (“[G]”); and
III     The self managed super fund;
(B)The property known as Property C (“the superannuation property”), into the husband’s sole name.
In the event the husband fails to make the whole of the superannuation rollover by the transfer date, then the superannuation property be forthwith sold altogether out of Court (“the sale”) and the following process is to apply:
(a)The reserve price shall be $365,000 or such lesser reserve as otherwise nominated by the President of the New South Wales Division of the Australian Property Institute;
(b)The superannuation property shall be listed for sale within 30 days from the transfer date, by such method and by such Agent as agreed between the parties and in the absence of agreement, then as nominated by the President of the New South Wales Division of the Australian Property Institute;
(c)That upon completion of the sale, the proceeds of such sale shall be applied as follows:
(i)First, to pay all costs commissions and expenses of the sale;
(ii)Second, to cause all of the superannuation rollover being made to the wife together with penalty interest assigned at 12% interest per annum on any moneys that have remained outstanding on the superannuation rollover since the transfer date;
(iii)Third, to discharge any other costs, taxes, penalties or expenses that may be otherwise owing by the self managed super fund; and
(iv)Fourth, the balance then remaining to be retained by the husband by way of his personal superannuation entitlements.
That pending the superannuation rollover:
(a)The husband shall be solely responsible for meeting all periodic mortgage repayments required to be made pursuant to the Mortgage and all apportionable rates, taxes and outgoings of or with respect to the farm property of whatsoever nature and kind as and when they fall due;
(b)The parties hold their respective interests in the farm property upon trust pursuant to these Orders; and
(c)Save and except for facilitating the superannuation rollover (and all penalty interest if so applicable), neither party shall be permitted to encumber the farm property without the prior written consent from the other party.
That the wife irrevocably and fully indemnify and keep the husband indemnified against any asset, debt, liability, interests, costs or outgoings of whatsoever nature and kind past, present and future and however arising or in respect of, including but not limited to by any reason of any office holding, shareholding and/or beneficial entitlement that she may have or previously have held (if any) in:
(a)Any loans which the wife or any entities in which she controls may have provided the husband personally or to any entities to which the husband has interests;
(b)[X]. Pty Ltd;
(c)[P]; and
(d)The Drake Family Trust;
including but not limited to any entitlements, loan accounts and/or beneficiary accounts within the aforesaid entities and any taxation assessed or hereinunder assessed (including Capital Gains Tax, PAYG and GST) in relation to income derived or deemed to be or have been derived from the aforesaid entities (including any interest, penalties, fines, Orders or charges) and from all proceedings, costs, claims and demands howsoever in respect thereof.
That the wife be liable for and pay and indemnify and keep the husband indemnified against any and all personal liability of the wife, past, present and future and howsoever arising, including but not limited to:
(a)All income taxation liability assessed against the wife;
(b)The mortgage secured by the National Australia Bank against Property D, NSW (otherwise known as Folio [omitted]) (“the Property D property”);
(c)All credit card liabilities in the name of the wife; and
(d)All proceedings, costs, claims and demands against the wife.
That the husband irrevocably and fully indemnify and keep the wife indemnified against any asset, debt, liability, interests, costs or outgoings of whatsoever nature and kind past, present and future and howsoever arising or in respect of, including but not limited to by any reason of any office holding, shareholding and/or beneficial entitlement that he may have or previously have held (if any) in:
(a)Any loans which the husband or any entities in which he controls may have provided the wife personally or to any entities to which the wife has interests;
(b)[U], including but not limited to the existing District Court of New South Wales litigation Case Number [omitted];
(c)[F];
(d)The Mr Bay Family Trust;
(e)[L] Pty Ltd (ABN [omitted]) (“[L]”);
(f)[S] Pty Ltd (A.C.N. [omitted]) (“[S]”);
(g)[G];
(h)[E] Pty Ltd (A.C.N. [omitted]) (“[E]”);
(i)[D] Pty Ltd (A.C.N. [omitted]) (“[D]”);
(j)The business entity known as “[T]”;
(k)The Mr Bay superannuation fund and [O] Pty Ltd on and post 1 July 2011
including but not limited to any entitlements, loan accounts and/or beneficiary accounts within the aforesaid entities and any taxation assessed or hereinunder assessed (including Capital Gains Tax, PAYG and GST) in relation to income derived or deemed to be or have been derived from the aforesaid entities (including any interest, penalties, fines, Orders and charges) and from all proceedings, costs, claims and demands howsoever in respect thereof.
That the husband be liable for and pay and indemnify and keep the wife indemnified against any and all personal liability of the husband, past, present and future and howsoever arising, including but not limited to:
(a)All income taxation liability assessed against the husband;
(b)All credit card liabilities in the name of the husband;
(c)All proceedings, costs, claims and demands against the husband and any entities to which the husband has interests.
That the wife and any entity to which she has interests, further retain as her property absolutely to the exclusion of the husband all real and personal assets and resources in her ownership, possession or control and indemnify the husband and keep him so indemnified in relation to and all liability related to same, including but not limited to:
(a)Property H in the State of New South Wales being the whole of the land more particularly described in Certificate of Title Folio [omitted] (“the Property H property”);
(b)The Property D property;
(c)[P] and all assets and liabilities attached to such entity, including but not limited to:
(i)Any Bank accounts held by such entity;
(ii)The horses owned by such entity; and
(iii)The plant and equipment owned by such entity;
(d)The Drake Family Trust and all assets and liabilities attached to such entity;
(e)The Prime Mover;
(f)The Gooseneck;
(g)The horses known as:
(i)[1];
(ii)[2];
(iii)[3];
(h)The horse saddles, bridles and rugs that are in the wife’s possession;
(i)The furniture and chattels that are in the wife’s possession;
(j)The funds held in the wife’s personal bank accounts;
(k)Any insurance policies held in the wife’s name; and
(l)Subject to transfer required to occur in paragraph 2(e) herein, the superannuation entitlements standing to the credit of the wife’s name.
That the husband and any entity to which he has interests, further retain as his property absolutely to the exclusion of the wife all real and personal assets and resources in his ownership, possession or control and indemnify the wife and keep her so indemnified in relation to and all liability related to same, including but not limited to:
(a)The farm property; being:
(i)Property A;
(ii)Property B;
(b)[U] and all assets and liabilities attached to such entity;
(c)[F] and all assets and liabilities attached to such entity;
(d)The Mr Bay Family Trust and all assets and liabilities attached to such entity;
(e)[L] and all assets and liabilities attached to such entity;
(f)[S] and all assets and liabilities attached to such entity;
(g)The entity known as [G] and all assets and liabilities attached to such entity;
(h)[E] and all assets and liabilities attached to such entity; and
(i)[D] and all assets and liabilities attached to such entity;
(j)The horses known as:
(i)[4];
(ii)[5];
(iii)[6];
(iv)[7];
(v)[8];
(vi)[9];
(vii)[10];
(viii)[11];
(ix)[12];
(x)[13];
(k)The furniture and chattels in the husband’s possession;
(l)The funds held in the husband’s personal bank accounts;
(m)Any insurance policies held in the husband’s name;
(n)Subject to transfer required to occur in paragraph 2(e) herein, the self managed super fund, including Property C; and
(o)[T] and all assets and liabilities attached to such entity.
That unless otherwise specified and save for the purpose of enforcing any moneys due:
(a)Each party be solely entitled to the exclusion of the other to all other property (including choses in action) and superannuation entitlements in the possession of such party as at the date of the agreement;
(b)Moneys standing to the credit of the parties in any bank account are to be jointly divided;
(c)Insurance policies remain the sole property of the owner named thereon;
(d)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to this order; and
(e)Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
That within 21 days the husband pay the wife $1,650, being the husband’s share of the joint valuation fees.

AND THE COURT NOTES THAT:

The parties have agreed to the superannuation rollover assigned to the wife as set out in paragraph 1 herein upon the basis of the following agreement:
(i)The self-managed super fund has an agreed value of approximately $600,000.00 upon the husband’s assertions that the “other assets” the superfund is referred to as owing have been included in earlier property valuations; upon the wife’s assertions that rent of some $28,600.00 is currently owing to the super fund; and the wife’s assertions that the superfund is likely to receive a tax refund for the 2011 financial year;
(ii)The husband’s assertions that the cattle panels referred to in paragraph 67 of the Judgment were also included in the earlier property valuations;
(iii)The husband’s assertions that [U] Pty Ltd has a nil value upon the agreement that the horse trailer and prime mover are to be transferred to the wife.

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

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT MELBOURNE

MLC 6041 of 2010

MS DRAKE

Applicant

And

MR BAY

Respondent

REASONS FOR JUDGMENT

Introduction

This is a property dispute between a couple who commenced to live together in either 1995 or 1996 and separated in 2009. They were married in 1998 and have no children by each other although they each have children by prior relationships. Each of them worked throughout the relationship.
For reasons which will become apparent it is not easy to summarise the positions of either party, but in essence the wife seeks to retain some chattels legally owned by the husband, the rollover to her of all shares and cash held by the husband’s self-managed superannuation fund and that otherwise each party retain both real property and chattels in their possession.
The husband’s countervailing position is that he says he has no assets or resources of any great moment, that the wife should obtain approximately $80,000 from his superannuation fund, that the parties should keep what they have but that the wife should advance him $30,000 to enable him to settle a set of legal proceedings with an entity called [G] Pty Ltd.

The forensic difficulties in the case

This case presents a number of very considerable forensic difficulties for the Court. Both parties freely conceded that they have been in the past, and continue to be, in the habit of organising their affairs so as to minimise tax, predominantly by the creation and use of numerous corporate entities. It seems clear from the evidence that to an extent each party has conducted their affairs independently of the other during the relationship which makes establishing what has occurred yet more difficult bearing in mind that the parties make different assertions as to what the true position is.
To these difficulties is added the more considerable difficulty that both parties, and more particularly the husband, have failed to comply with the obligation to make full and frank disclosure from time-to-time.
It is instructive to look at the history of this matter by way of background.
The wife’s application was originally filed in the Family Court of Australia on 5 July 2010 and the application was accompanied by a contemporaneous financial statement. The husband filed a response on 6 August 2010 and also a contemporaneous financial statement. Thereafter the parties went to mediation with a Registrar but no further materials were filed prior to orders for the transfer of the proceeding to this Court made by Registrar Lethbridge on 14 April 2011.
On the first occasion the matter came before this Court before me on 1 June 2011, I made orders by consent at a time when both parties were, as they had been up to that time, legally represented. Those orders required the parties to jointly appoint [omitted] Property Advisers to provide written reports as to the value of the various properties in the case. They also required the parties to jointly appoint Mr W to provide a written report as to the value of the various existing business entities and they required the parties to file and serve all affidavits and documents upon which they were seeking to rely at trial no later than 14 days prior to the final listed hearing.
Compliance with those orders was patchy at best. The valuation of properties did take place, although it seems common cause that the husband has not paid his share of half of the costs in the sum of $1,650.
Counsel for the wife asserted that the husband had failed to make proper disclosure despite repeated requests to do so. Nonetheless, and despite the fact that it is clear the husband has indeed failed to comply with his obligations to disclose on a continuing and significant basis, it seems to me on perusing the materials filed that the first expressed demand for additional documentation (leaving aside an earlier issue to do with a property at Property K which arose in early 2011 and which appears to have rather petered out) was made to Mr Bay personally at a point when his legal representation had ceased.
The letter dated 8 December 2011 from Messrs Marshalls + Dent, the applicant’s solicitors, makes demands for a number of documents to which the applicant wife was certainly entitled but which could and should have been requested substantially earlier. Furthermore, despite the total failure of the husband to comply with that request, no steps were taken to bring the matter back before Court, although I note that the time of year might have impacted upon such a matter in any event.
The measure of the husband’s failure to comply with disclosure is perhaps in the ultimate best illustrated by the fact that it was only during the oral evidence at trial that it emerged that he had subsequently executed a mortgage of $40,000 over his property, which is known as Property A. His position was that the wife was not entitled to know about this and indeed not entitled to know about the earlier Property K property because she had left him over three years previously. Whilst this is undoubtedly a genuinely held view on the part of the husband, it does not accord with his obligations at law to provide ongoing disclosure.

The end result of all this is that the Court is confronted with what in a number of instances are no more than oral assertions unsupported by any kind of extrinsic evidence in regard to matters that are not without importance. It should also be noted that neither party filed any affidavit material whatsoever from the time of the commencement of the proceedings in 2010 until a matter of days before trial. The husband’s trial affidavit was sought to be filed, it appears, on some date shortly before the proceeding commenced. Alleged endeavours to file it electronically failed and it was in fact formally filed in Court although plainly it was available to the wife earlier as she responded to matters in it in her own trial affidavit sworn on 1 February 2012 and filed on 2 February 2012. The wife’s affidavit was substantial and should have been filed much earlier.
The husband complained on a number of occasions in the course of his evidence that he had thought the matter was settled until the Thursday preceding trial, and while it is possible that both parties had erroneously assumed that settlement might have been likely to eventuate, the fact is that they had had a very long time to prepare and had failed to do so. This failure added yet further to the evidentiary morass.
In the circumstances, counsel for the wife placed strong reliance upon the decision of the Full Court of the Family Court in Chang v Su (2002) FLC 93-117. In that case, the Full Court reviewed in some detail the authorities relating to cases such as this. I respectfully refer to and adopt the reasoning of Kay and Dawe JJ in whose judgment Finn J agreed. While referring to the whole of that judgment I would extract and refer to the following paragraphs. At [70] Kay and Dawe JJ extracted the following from the decision of the Full Court in In the marriage of Weir (1993) FLC 92-338 at 79,593:
“This Court has pointed out in a line of cases leading up to the recent decision of the Full Court in Black & Kellner (1992) FLC 92-287 that it is the duty of a party involved in property proceedings in this jurisdiction to make a full disclosure of their financial affairs …
It seems to us that once it has been established that there has been a deliberate non-disclosure, which follows from his Honour’s findings in this case, then the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.”
At [72] Kay and Dawe JJ continued in respect of the judge’s obligation to exercise her discretion under the Act:
“She was extremely hampered in the exercise of that discretion by the non-disclosure by the husband of his financial position and in those circumstances was entitled to take the more robust view that she did.”
In this case there are two things to be said in my view; first, it is clear there has been tardy disclosure by both sides in the provision of their affidavit material. Second, it is clear there has been deliberate non-disclosure by the husband of a number of pertinent matters, for example the $40,000 mortgage and the sale of the Proeprty K property (apparently discovered only by the wife by accident). Furthermore, the evidence provided by the parties is, in a number of respects, so inadequate the Court simply has to do the best it can with the material it has and take a reasonably robust and commonsense view of the parties’ positions in an endeavour to complete the four-step exercise required by the authorities in exercising judgment in property law cases.

The history of the parties

The wife was born [in] 1960 and is therefore 51 years old. The husband was born [date omitted] 1955, according to the wife, and [date omitted] 1955 according to his affidavit.
The date of the commencement of cohabitation was a matter of some dispute between the parties but, having heard and seen the parties give their evidence, I have no doubt that the wife’s recollection that they were living together by 1996 is correct. On any view, they married on [date omitted] 1998.
Both of the parties had been previously married. The wife separated from her former husband in 1994 and had two children by him, [names omitted]. The husband had been married to Ms B and they permanently separated in 1995 having had three children, namely [names omitted] and [Z].
Although [Z] lived with the parties for some years from the period of the commencement of the relationship in 1996, and although the other children from time-to-time spent amounts of time living with them also, the dispute between them as to exactly which child lived with them for how long is, in my view, neither here nor there. On any view children of each of the husband and wife have lived with them for some periods of time and been looked after by them. Equally, on any view, the last time any child was living with them was quite some years ago (the last occasion being 2004-5 as far as I can see from the affidavit material).
At this point it is perhaps appropriate to say some brief words about the credit of the parties. The wife gave evidence first. From what she said and how she said it, it is plain that her relationship with the husband is poor. Her answers were given on occasions in an argumentative way but also were marked by a measure of what one could only describe as weary resignation. Although she plainly made mistakes, she impressed me as being a person honestly doing her best to recollect events and recount them truthfully. One major error she made, revealed only under cross-examination, was in respect of her wages. Although initially posited at a much lower sum, she was eventually compelled to admit that her annual salary is some $76,000, albeit that that is inclusive of a travel allowance and various other matters.
Nonetheless, the wife was responsive to questions, many of which were put to her by the husband, who represented himself, in a way that was argumentative and demeaning of her. Although I do not accept everything she said, she was in the main a persuasive witness.
Allowance needs to be made for the pressure of the proceeding and the fact that the husband was representing himself. He impressed me as being an articulate and intelligent man, and plainly one who feels he has been hard done by in his interrelationship and dealings with his former wife.
Nonetheless, transcript would not perhaps wholly reveal the unconvincing nature of his demeanour at times and the unresponsive and self-serving answers he gave to perfectly proper questions put to him by counsel. Although I will return to deal with this matter in more detail under the heading “Contribution”, his answers in relation to the affidavit material filed in his prior property law proceeding were exceptionally unconvincing.
While I got the impression that, subject to the above qualifications, the husband was generally seeking to accurately recall events and give truthful answers, the fact is he is a poor historian and is by nature a person well prepared to try to structure his affairs to his own advantage, this not excluding trial proceedings.
The wife’s affidavit deposed that the relationship between the parties was tempestuous and marked with periods of separation including, relevantly, between June 2006 and April/May of 2007 during which time it seems common cause that the wife issued family law proceedings which were not in the ultimate proceeded with.
The husband denied that this was so, and the reason for the controversy plainly related to the [G] litigation, which the wife asserts arose solely out of misconduct by the husband during the separation.
It seems clear that the wife was in fact living in the same dwelling as the husband during this period, and it was his case that she shared his bed during that time. Whether or not the parties continued to entertain sexual relations, the issuing of family law property proceedings at this time makes it far more probable than otherwise that a period of estrangement was indeed the case.
Following separation in 2009, the wife retained a number of chattels and a number of horses. The parties, it would appear, are both to an extent in the business of horse breeding and trading, although I find only to a limited extent. I accept the wife’s evidence that she dealt with, bought and sold no more than ten horses during the relationship and that many of the foals were given away.
I also accept that the parties engaged predominantly in livestock buying on the part of the husband and in other activities and cropping only to a lesser extent. The argument between the parties as to whether or not the husband would have been able to do this on his own, in my opinion, is incapable of resolution given the absence of any objective evidence to support the position of one party over that of the other. Rather, it goes to show the slightly obsessive concentration on minutiae of doubtful value with which both parties have been concerned.
As I have said, both parties incorporated numerous entities from time-to-time. Rather than wallow through the detail of these various entities it is more appropriate, as I intend to do, to concentrate on those which are extant now and all those which may affect the issues of contribution and future needs.

The pool

Counsel for the applicant submitted to the Court an aide memoir which I marked as Exhibit A1.
Counsel for the applicant wife said that he was presenting to the Court a snapshot of the parties’ affairs as at 1 July 2010 because no later documentation had been made available. Whether such documentation was available from his own client’s documentation is not clear but I accept that in the circumstances, to draw a comparison based upon the last occasion when documents from all the parties’ business entities were in fact available is the only possible fair way in which to proceed in this case.
On 10 February 2012, (although the letter was erroneously dated 2011), the Court wrote to the parties about Exhibit A1. Various questions were put as to valuations and as to the accuracy of the reports of [P] Pty Ltd.
On 15 February 2012, Messrs Marshalls + Dent replied to my Associate’s letter indicating that the assigned values of land set out in Exhibit A2 were indeed based upon a valuation report received and it was asserted that it is the wife’s understanding that these assigned values were accepted by both parties at trial.
The letter also confirmed that the matters set out in Exhibit A1 about [P] Pty Ltd were adopted from the financials for that company for the year ending 30 June 2010.
By letter faxed to the Court on 15 February 2012, the respondent in part took issue with the valuations and also took issue with the accuracy of the reports of [P] Pty Ltd.
The fact is that Exhibit A1 presents the best material the Court has. Both parties put the valuations of land squarely in issue during the proceeding, but no material was put forward save for Exhibit A1, and no challenge was made to the exhibit by the respondent in terms.
Given that the accounts of [P] Pty Ltd were prepared by lawyers on instructions and those lawyers informed the Court the accounts were prepared from the company records, I am bound in the circumstances, for want of anything better, to take these as an accurate position.
It was the husband’s case that his accountants had refused to prepare documentation for later financial years as a result of not being paid; whether this is so or not is immaterial. The fact is that no later documentation is available.
Neither party’s affidavit material suggested that their material circumstances had dramatically altered in the last 12 months, although I will need to return to assertions made by the husband’s affidavit in this regard in due course.
It was the husband’s case that his gross earnings, so to speak, had dropped from $250,000 in the tax year of 2010 to $150,000 in 2011. No objective evidence was provided by the husband to support this assertion, nor is it clear whether his gross earnings affect his net earnings in what one might describe as a lineal way, ie, whether the diminution of $100,000 asserted by him without objective proof would lead to him being exactly $100,000 worse off or some lesser figure. I am unable to make anything of this assertion in the circumstances. I merely note that it is possible that the husband’s position has worsened in the last 12 months.

Assets held by the wife

According to her affidavit, the wife established [P] Pty Ltd as trustee for the Drake Family Trust on 1 July 2010 on the advice of her accountants. She arranges for her employment to be paid through that company and according to the most recent set of financial accounts of that company, it has net assets of $17,971.
Additionally, the wife owns a property at Property D which she bought after separation for $310,000. She paid a deposit of $77,000 which came from a prior business entity which I will describe as [X], this representing assets then to her credit. She continues to have a mortgage in relation to that property. According to her most recent financial statement the mortgage is $250,360.
The wife also has in her possession, although it is legally registered in the name of the husband, a very substantial horse trailer (which includes accommodation) and the prime mover for it. These have an asserted value in total of $80,000 and although the husband took issue with those valuations, he did not call any evidence to rebut the valuation evidence annexed to the wife’s affidavit which I therefore accept.
The wife also possesses a number of horses. The evidence about these horses, as with those retained by the husband, was a matter of some disagreement and in some ways I at least found it difficult to follow. As best I can see the wife owns a horse called [3] which she values at $13,000, another horse called, as best my notes reveal the matter, - there is a measure of confusion about the name, [2] which she values at $10,000 and another horse called [1], the value of which remains uncertain.
The wife was cross-examined strongly by the husband who asserted that the horse, [3], could easily have been sold, given its bloodline, at Tamworth the previous week for in excess of $30,000. The husband’s challenge to the wife’s evidence about the value of the horses suffered from the fact that he did not qualify himself as an expert and that the propositions he put appeared to be in large part hearsay.
The wife as I find would have some knowledge of the value of horses as indeed would the husband, although whether either could be said to be an expert remains entirely unclear. For these purposes it is sufficient to say that the wife’s evidence about the horses and their value was given with considerable conviction and I accept it, noting that it represents the best the Court can do in the circumstances.
It is clear that the husband also possesses horses and the value of those likewise remains, in my view, shrouded in mystery.
Given that these horses are only of value if sold, and neither party evinced any intention to sell them, in my opinion the appropriate way to deal with them as assets is simply to write them off as of equal nil value. I note that a number of these animals are apparently said to have values either as brood mares or as sires but there is no evidence before me to suggest that substantial moneys would be engendered. Indeed, the most successful single horse that was owned by the wife, it appears, did little more than pay for its food and keep.
I repeat, in all the circumstances the horses should be allotted no value in the pool. The horse rugs and saddles are valued at a total of $7,000 (rounded off) – see wife’s affidavit at paragraph 44(d).
The wife formerly owned a Range Rover car worth $30,000 but this was the subject of a lease. The wife asserted that the husband simply ceased the lease payments but on any view, and whoever’s fault it was, the car has been surrendered by the wife to the husband and thereafter forwarded to a third party who it appears may have taken over the lease payments. It is no longer in the property of either party.
The parties also possess cattle panels worth $25,178 (see exhibit LD 18) which the wife, up until final submissions, pressed be returned to her. In the ultimate, it is conceded they should stay with the husband and they should be assessed at the value described.
The wife additionally owns a property at Property H which was bought for $70,000. It has not been able to be sold at prices which have been steadily reduced thus far to $50,000 and in the circumstances, I accept the submissions of counsel that given its non-sale over a protracted period of time it is reasonable to allot it a value of $40,000 in the pool.

Property held by the husband

The husband is the owner of half of what I shall describe as [M] (see husband’s affidavit paragraph 97). From the material filed it seems there is little dispute that the value to be ascribed to the husband’s interest is $12,102.
The husband also wholly controls and in effect owns the assets of [U] Pty Ltd. Exhibit A1 shows that the total assets of that company as at 30 June 2010 are $31,330.
He likewise owns and controls the assets of the Mr Bay Family Trust trading as [L] (which includes land worth $380,000) with a total net value of $113,300.
Insofar as issue is taken by the wife with two other entities, namely [G] Partnership (“[G]”) and [E] Pty Ltd (“[E]”), I am satisfied on such of the evidence as is available that these do not represent any assets in the husband’s hands at present. GFT has not traded for some years and [E] does not appear to have any assets that have been revealed. I note that it is in any event a joint venture with the husband’s son through one of the husband’s son’s own companies.
The wife has sought that there be two add-backs, namely half the proceeds of the property at Property K sold through another company controlled by the husband called [S] Pty Ltd. Here the wife says that the total price of the sale was $117,000 net and the husband, who says he only received some $22,000, should account for the extra.
In this regard, the husband says that the property was bought post-separation with the benefit of a $60,000 loan from his sister who lives in England. Although said to be the subject of a mortgage, the mortgage was not produced.
Nonetheless, and while I find the failure to put the husband’s sister even on affidavit somewhat unconvincing, this was one area of the husband’s evidence that I accept. Not only did he give this evidence with a measure of conviction, somewhat absent in the rest of his evidence, but he pointed to cheques showing the dissipation of the $22,000 he received, and the cheques do appear to me to support that assertion. It is inappropriate to make an add-back in the sum claimed by the wife.
In truth, the Property K episode, if I can so describe it, was one conducted by the husband out of his own post-separation resources. It never owed anything to the wife. While he was under a duty to report it because the moneys he received go to issues as to future needs, nonetheless it owed nothing whatever to the wife and should not be included in the pool.
Another area that the wife sought to have included in the pool was legal fees incurred in a District Court proceeding arising from events which occurred during the period of separation in 1996-1997 (this is the [G] proceeding).

The husband’s superannuation

The husband had superannuation at the time of the commencement of the relationship. From the husband’s affidavit sworn in 1995 (see page 31) it was then worth about $143,000 in total. Counsel conceded that this would be reasonably now represented by a figure of $260,000 to make allowance for inflation. No methodology was given to support this assertion, but the Court is obliged to do the best it can, and I propose to treat that figure advanced by counsel (the husband made no counter allegation) as an admission against interest. The superannuation fund presently owns both land and cash and shares. The cash and shares were worth approximately $218,000 as at December 2011 according to exhibit A1 (not in this respect the subject of challenge by the husband).

The husband is also faced with a debt alleged to be capable of being compromised for $30,000 to [G], albeit that the total otherwise potentially owing in the event that settlement is not achieved is in excess of $120,000.
Thus the pool for these purposes would appear to be:
·Wife’s funds ([P]) $17,971.
·Husband’s family trust $113,300.
·Husband’s company, [U] Pty Ltd $31,300.
·Wife’s property in Property D $310,000 less mortgage $250,000 ($60,000).
·Husband’s share of [M] $12,102.
·Wife’s property at Property H $40,000.
·Superannuation fund $666,184 (of which $218,000 was in cash and shares as at December 2011).
·Horse trailer and prime mover $80,000.
·Cattle panels $25,178.
·Wife’s horse rugs and saddle $7,000.

Further liabilities

·Debt to [G] $30,000 (see later).

Contribution

This was another fertile area of disagreement between the parties and covered events right from the commencement of the relationship.
The wife’s evidence is that she came into the relationship with relatively modest assets including a ute, a horse float, a horse

(I continue to give the horse no value), some cattle and some superannuation in an approximate total of $36,000 (see paragraph 20 of wife’s affidavit).
Bearing in mind the lapse of time from 1996 until now and the fact that the assets asserted were on any view extremely modest, and there is no suggestion of any sort that any of them had any springboard effect, it is appropriate to simply note that the wife’s contributions as a matter of initial contribution were exceptionally modest.
The husband asserts that he had very substantial assets at the commencement of the relationship. The husband in addition to asserting the ownership of Property A, owned by the superannuation fund since approximately the time of its purchase in 1992, asserted ownership of another property called Property B. The husband estimated the value of the latter property at the time of the commencement of cohabitation in the sum of $300,000 (see paragraph 39 of husband’s affidavit).
The husband asserted likewise the ownership of two livestock trailers through [U] Pty Ltd in the sum of $230,000 with the superannuation fund owning shares, in addition to the Property A property, to the value of $400,000.
The table of assets thereby owned (and it is noteworthy that these are said to be owned by the applicant “which I owned” notwithstanding the corporate identity’s nominal holding) amount to $780,000

(see paragraph 43 of husband’s affidavit).
The difficulty with this assertion, however, is exhibit A2. Exhibit A2 is an affidavit filed in family law property proceedings against Ms B in February 1995. This document was a statement of financial circumstances sworn as an affidavit.
The husband was extensively cross-examined about this affidavit. It shows, contrary to the picture asserted by him, a negative financial position as at February 1995, even making allowance for the fact that debts to [omitted] asserted in the schedules of [F] Pty Ltd were, as subsequently compromised, for a lower figure of $207,000.
It is sufficient in my view to say that the cross-examination of the husband in this regard was devastating. Although the husband sought, admittedly on the run, to come up with explanations as to why the values asserted in the affidavit were misleading, the overall picture is only too clear. By way of illustration of the husband’s unconvincing explanations, and it is only one aspect, I refer to the husband’s assertion that the valuation ascribed to cattle in exhibit A2 was at an under-value because a declaration of their true worth would have been likely to attract greater tax.
As counsel for the applicant wife correctly submits, the husband cannot have it both ways. The document he swore in February 1995 was not prepared for taxation purposes. As I pointed out to him it was prepared for the Family Court, and on oath. I accept that the contents of that document were true and correct at the time they were sworn. They were sworn only a year or so before cohabitation. They show that the applicant husband was not liquid, so to speak, at the time.
What does have to be acknowledged, however, is that he did own Property B which undoubtedly had a value, and he also owned, through the superannuation fund, Proeprty A. In a sense, the various liabilities then extant have waxed and waned but on any view, the ownership of the properties has been a springboard for the position that the parties now find themselves in. Insofar as this affects the superannuation fund, proper account can be taken of that through what is in effect the methodology proposed by the wife, namely a grossing up of the value of the superannuation fund’s assets at the commencement of the relationship to something akin to their present worth and then a division of what remains.
No such division is capable of being effective in relation to the [omitted] property, which continues to have a value. Nonetheless that property’s value is subsumed within the value of the [U] Pty Ltd property and it is therefore inappropriate to deal with it separately either.
It is quite clear that both parties worked throughout the entirety of their relationship and it is quite clear that they both did the best they could in maintaining and developing their finances, which were the subject of a number of both gains and losses from time-to-time. Leaving aside the husband’s superannuation, their contribution should be assessed as equal.
Insofar as the husband’s various business endeavours led to litigation, and in particular [G] matter, I note that the wife has seen fit to say that such debt as there is arises out of the husband’s dishonest representations. As I understand it there has been no trial of the [G] proceedings. The husband is endeavouring to settle the [G]’s claim for approximately a quarter of its worth inclusive of costs. It is not appropriate to form a conclusion that the assertions made by [G] are to be taken as a given and the fact that the wife does so merely reflects her own dislike of the husband.
The reality is that the parties took each other for better or worse and that to the extent that either may have slipped on legal banana skins, this is part of the warp and woof of the relationship. It is inappropriate to allot the entirety of the [G] debt to either party. I will include it as a negative liability of $30,000 attributable to the parties as to half each. If it later emerges that the debt is greater than that, it should be left to the husband to satisfy. The proceedings are, it would appear, against him alone.
I note that the husband said in evidence and in submissions that the $30,000 has to be made available within a week in order for settlement to be achieved. I pointed out that judgment will certainly not be produced in time to enable that to occur. I do not know whether that $30,000 will expand significantly but bearing in mind that the husband apparently has other sources of funds available to him from time-to-time (e.g. his sister who lent him $60,000 quite recently) or further mortgage bearing in mind that he recently mortgaged for $40,000 for his own purposes, it seems inappropriate to presuppose that he is not able one way or the other to achieve the settlement. This is not a satisfactory way of dealing with this contingent liability, but as I have already said, the Court has to do the best it can.

Section 75(2) factors

The husband’s health is generally good although I note some difficulties which are highly likely to be related to the stress of this proceeding. Even if his income has diminished as he said to $150,000 per year nonetheless that is an appreciable amount of earnings even if there are substantial associated costs. Given the husband’s obsession with putting his finances through various different entities to reduce their taxation impost, it is not possible for me to say with any accuracy what his true earning and disposable income is. He will, it seems to me, more probably than otherwise be able to make a reasonable living.
Although the wife asserts and the husband denies that he has repartnered, there is no evidence that any new partner he has is in any way contributing to his material wellbeing or to his financial circumstances.
The wife is likewise in unremarkable health and although she has doubts as to her future employment the reality is that her contract is presently obtaining and she appears to be able to continue to work both in her work as a [omitted] and the part-time work she does as a [omitted].
Neither party has to contend with payments towards under-age children. Nor is it suggested that either party is likely to receive any windfall in the near future by way of inheritance or otherwise.
In all the circumstances, it seems to me that the parties’ future needs balance one another out.

Just and equitable

In my view, the proposal of the wife that the superannuation should be, as it were, grossed up for its value at the commencement and the remainder split 50/50 is entirely appropriate. It gives an appropriate loading for the husband’s initial contribution. The husband and wife clearly both contributed equally towards the maintenance of the assets that the superannuation constitutes by their joint efforts throughout the vast majority of the time from 1996 until now.
Prima facie, the property pool should be split 50/50 between the parties. As indicated earlier, their contributions generally were of equal value. The draft orders proposed by the wife, as I have amended them, appear to achieve, in part, this outcome. Thought needs, however, to be given to the valuation of the shares and the apportionment of the [G] liability. I will give the parties an opportunity to make submissions once they have read this judgment and the draft orders.

I certify that the preceding ninety (90) paragraphs are a true copy of the reasons for judgment of Burchardt FM

Date: 28 March 2012