Fowles & Fowles (No 4)
[2023] FedCFamC1F 819
•6 October 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Fowles & Fowles (No 4) [2023] FedCFamC1F 819
File number: MLC 8587 of 2015 Judgment of: BENNETT J Date of judgment: 6 October 2023 Catchwords: FAMILY LAW— FINANCIAL — where the parties had a long marriage — where the husband failed to make full and frank disclosure of his financial circumstances —where the husband made the proceedings more complicated than they should have been — where the court takes a robust approach to resolution of the matter given the husband’s lack of disclosure.
FAMILY LAW— FINANCIAL — where a series of documents purporting to substantiate a loan from the husband’s father to the husband is found to be a “sham” or alternatively that any monies advanced by way of loan are not repayable.
FAMILY LAW— FINANCIAL — where a series of transactions are made by and through trusts which are found to be a puppet of the husband.
FAMILY LAW— SPOUSAL MAINTENANCE — where wife seeks lump sum spousal maintenance but is found not to be in need of maintenance given amount of capital to be retained by her.
FAMILY LAW— CHILD SUPPORT— where parties applications are dismissed for want of particularity, evidence and submissions.
FAMILY LAW— COSTS — where each party brought an application for costs against the other — where costs are fixed by the court and offset against one another.Legislation: Family Law Act 1975 (Cth) Cases cited: Ascot Investment Pty Ltd v Harper (1981) 148 CLR 337; (1981) FLC 91-000
Bevan & Bevan (2013) 49 Fam LR 387; (2013) FLC 93-545
Browne v Green (1999) FLC 92-873
Cerini & Cerini [1998] FamCA 143
Chorn v Hopkins (2004) 186 FLR 240; (2004) FLC 93-204
Gould & Gould; Swire Investments Ltd (1993) 115 FLR 371; [1993] FamCA 126
GVC v HPC (1998) FamCA 143
In the marriage of Af Petersens & Af Petersens (1981) 7 Fam LR 402; (1981) FLC 91-095
In the marriage of Biltoft (1995) 126 FLR 385; [1995] FamCA 45
In the marriage of Weir (1993) FLC 93-339
Jabour & Jabour (2019) 59 Fam LR 475; [2019] FamCAFC 78
Marker v Marker (1998) FamCA 42
Omacini & Omacini (2005) 191 FLR 317; [2005] FLC 92-218
Sharment Pty Ltd & Ord v Official Trustee in Bankruptcy (1988) 82 ALR 530
SMB & MFB [2006] FamCA 46
Williams & Williams [2007] FamCA 313
Division: Division 1 First Instance Number of paragraphs: 512 Date of hearing: 19, 20, 21, 22 & 23 March 2018, 26 & 27 March 2018,
26, 27, 28 & 29 June 2018,
4 & 5 July 2018,
10 September 2018,
4, 5, 6, 7 & 8 February 2019,
21 March 2019,
19 June 2019,
4 November 2019, 6, 7 & 8 November 2019,
9 December 2019, 12 December 2019,
4 February 2020,
19, 20, 21 & 22 October 2020, 27 & 28 October 2020,
31 August 2021,
1, 2 & 3 September 2021, 6, 7, 8, 9 & 10 September 2021Place: Melbourne Date of last submissions: Husband’s Amended written submissions of 22 August 2022;
Husband’s written submissions in reply of 15 September 2022;
Wife’s written submissions of 16 September 2022;
Wife’s written submissions as to costs of 9 December 2022;
Husband’s written submissions as to costs in reply to wife’s submissions of 3 January 2023;Wife’s written submissions as to costs in reply to the husband’s written submissions of 3 January 2023.
Counsel for the Applicant: Mr Sheales Solicitor for the Applicant: Lander And Rogers Counsel for the Respondent: Mr North SC with Mr Salamanca Solicitor for the Respondent: Pullos Lawyers ORDERS
MLC 8587 of 2015 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS FOWLES
Applicant
AND: MR FOWLES
Respondent
ORDER MADE BY:
BENNETT J
DATE OF ORDER:
6 OCTOBER 2023
THE COURT ORDERS THAT:
1.As and by way of alteration of property interests, within 90 days, the husband do all things and sign all documents to:
(a)repay any loan secured by the property situate at X Street, Melbourne, Victoria and known as Volume … Folio … ("X Street Apartment") and otherwise cause the discharge of the mortgage numbered … registered to the Westpac Banking Corporation ("the mortgage"); and
(b)transfer to the wife all of his rights, title and interest in the X Street Apartment free of encumbrance ("the transfer").
2.In the alternative to paragraph 1 of this Order within the lesser period of 30 days from the making of this Order, the husband be at liberty to:
(i)repay any loan secured by the X Street and otherwise cause the discharge of the mortgage; and
(ii)to gift all of his rights, title and interest in the X Street property to the wife free of any encumbrance in lieu of and in satisfaction of any order for the transfer of the X Street Apartment to the wife pursuant to paragraph 1 of this Order.
3.By way of further alteration of property interests, within 30 days the husband pay to the wife the sum of $1,240,231 ("the Payment").
4.Within 90 days the husband pay to the wife all amounts due by way of outstanding spousal maintenance due pursuant to paragraph 2 of the Order made on 5 October 2015 ("the 2015 Order") or paragraph 6 of the Order made on 5 July 2018 (“the 2018 Order”).
5.If the whole of any payment, including the Payment and/or arrears due under the 2015 Order and/or the 2018 Order due pursuant to this Order has not been made by the due date for such payment, then penalty interest at the rate specified in the Family Law Rules accrue in respect of so much of the payment as remains outstanding, such interest to be calculated with monthly rests.
6.That pending the compliance by the husband with regard to any and all obligations pursuant to these Orders ("the Obligations"):-
(a)the wife have sole use and occupation of the X Street Apartment and the husband to pay and be responsible for all mortgage repayments in respect of the loan secured over the title to the X Street Apartment, owners levies, body corporate charges, rates taxes and like apportionable outgoings during the wife’s occupation;
(b)paragraph 6 of the 2018 Order continue in full force and effect;
(c)the wife retains a right of charge against any and all instruments of ownership (including shares) held by the husband in respect of the husband's interest in corporation or entity in Australia;
(d)the husband is to execute a Resignation as Director or Secretary with regard to any entity referred to in the preceding paragraph, to be held in escrow pending any default by the husband with regard to such obligations.
7.In support of the preceding paragraphs and pending compliance by the husband with regard to the Obligations then (at the option of the wife) the husband do all things and sign all documents (including any documents necessary pursuant to any exercise of power by the Husband as a Director or Trustee herein) as may be required to enable the wife her servants or agents to manage, liquidate or call in for sale the following entities:
(a)L Pty Ltd; and
(b)T Inc.
8.The proceeds of sale of any entity referred to above be applied as follows:
(a)In payment of the costs commissions and expenses of such sale;
(b)In payment of any costs owing to the wife pursuant to this Order;
(c)In payment of any other obligations owing to the wife herein by way of property settlement, and lump sum or periodic spousal maintenance (see hereunder);
(d)The balance to be held in trust pending further order by this Honourable Court
9.The wife retain all of her rights, title and interest in her share portfolio with DS Ltd to the sole exclusion of the husband.
10.By way of costs and reimbursement of expenses:
(a)The husband be liable for and pay the wife $40,000 on account of her costs of his recusal application;
(b)The wife be liable for and pay the husband $20,000 on account of his costs of her application to tender documents;
(c)The wife pay the husband $13,750 by way of reimbursement of valuation expenses –
such payments to be effected by the husband paying to the wife the sum of $6,250 in 30 days with the effect that the liabilities referred to in (a), (b) and (c) of this Order are not recoverable independently of one another.
11.Liberty be reserved to the parties to apply in relation to implementation of this Order.
Pending full, final and complete compliance with this Order, each party do all acts and things necessary to ensure that his or her address for service, including an email address is notified to the court and service on the party to the email address is deemed to be effective service even if the document is returned marked “Not Delivered” or words to that effect.
12.If the husband fails or neglects to comply with paragraph 1(a) and/or 1(b) of this Order, the wife may take a transfer of the title to the X Street Apartment into her name without prejudice to her entitlement to enforce any part of this Order.
13.In the event that the husband fails to comply with any paragraphs of this Order by failing or neglecting to execute a document necessary to give effect to this Order, a Registrar or any other appropriate officer of the Federal Circuit and Family Court of Australia be, and is hereby, appointed pursuant to section 106A to do all things and execute all documents necessary on behalf of the husband to comply with this Order.
14.For the purpose of activating the preceding order under s 106A it is sufficient proof of the husband having failed or neglected to execute a document necessary to give effect to this Order if the solicitor for the wife provides an affidavit by himself or herself deposing:
(a)to the necessity for a document to be executed to give effect to this Order;
(b)details of how such document was provided to the husband for execution and return;
(c)that not less than seven (7) days has elapsed since the document was provided;
(d)the husband has not returned the document duly executed -
such affidavit to be filed and served on the husband at his address for service as last notified to the court.
15.Unless otherwise specified in this Order and save for the purposes of enforcing any monies due under these or any subsequent orders:
(a)Each party be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party as at the date of these Orders including but not limited to, their respective bank accounts and motor vehicles;
(b)Each party forego any claims they may have to any superannuation benefits belonging to or earned by the other;
(c)Insurance policies remain the sole property of the beneficiary named therein; and
(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 these Orders or, in relation to any outstanding credit card balances or personal loan in their name or in which they are personally liable.
16.The parties’ applications in relation to child support be and are hereby dismissed for lack of specificity as to orders sought and grounds relied upon and/or without submissions relevant thereto having been made by either party.
17.Liberty be reserved to apply in relation to any slip rule application, implementation, enforcement of this Order and any such application may be listed before me in the event that I am reasonably available and without any intervening or preliminary listing of the enforcement application before a registrar or like officer exercising delegated judicial power.
18.Otherwise, all extant applications be and are hereby dismissed and this matter be removed from the docket of the Honourable Justice Bennett.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Fowles & Fowles has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
BENNETT J:
INTRODUCTION
This is an application by the wife for an alteration of property interests pursuant to s 79 of the Family Law Act 1975 (Cth), spousal maintenance and child support. The husband also seeks an alteration of property interests, unspecified child support orders and opposes any spousal maintenance order.
THE HEARING
The proceedings were commenced by the wife’s Application Initiating Proceedings in the Federal Circuit Court of Australia (as it then was) on 11 September 2015. The husband’s Response was filed 9 December 2015. The matter was transferred to the Family Court of Australia (now Division 1) by order of Judge Hartnett (as she then was) on 19 May 2017.
There were five further iterations of final orders sought by the wife and four responses by the husband. The final hearing proceeded before me over a total of 43 days having commenced in March 2018. Aside from the husband and wife there were seven witnesses who gave oral evidence or were cross-examined. The matter has been the subject of eight interim judgments by me including the husband’s recusal application made on the 34th day of the hearing.
Mr Sheales with Dr Smith appeared on behalf of the wife but Dr Smith ceased to appear on day 14. Mr North of senior counsel and Mr Salamanca appeared on behalf of the husband. Mr Arnold appeared on behalf of the Independent Children’s Lawyer until he was excused from further attendance on 20 March 2018. Mr Arnold next appeared on 4 February 2019 to update the court on parenting matters. The wife has at all times been represented by Lander and Rogers. The husband has had five solicitors on record being DT Lawyers, DU Lawyers, DV Lawyers, DW Lawyers and DX Lawyers. The husband is now unrepresented, his former solicitors having filed a notice of ceasing to act on 19 December 2022.
The most contentious issue of the case has been to identify the legal and equitable interests of the parties. The husband failed in his duty to make full and frank disclosure of his financial circumstances and that of related entities. There is ample evidence that the husband has assets and financial resources which cannot be identified with precision or valued. I have made final property and spousal maintenance orders doing the best that I can with the evidence I have. Neither party sought to adduce further evidence whilst the decision was reserved.
THE RELATIONSHIP
The parties commenced cohabitation in or around 2001 or 2002 and married in 2005 in MM State, United States. The parties separated initially under one roof in January 2015 and on a final basis on 21 July 2015 when the husband vacated the former matrimonial home. The parties were divorced, effective 2018. When the evidence before me concluded, on 10 September 2021, neither party had re-partnered.
There is one child of the marriage; D who is now aged 20. He graduated from M School in Melbourne. D has been the subject of proceedings for the entirety of his adolescence but is now beyond the reach of litigation.
THE LAW
Section 79 of the Family Law Act 1975 (Cth) (“the Act”) defines the Court’s responsibilities in determining applications for property settlement. First, I am required to identify, to the extent that there is evidence that enables me to do so, the legal and equitable interests of the parties in property. Property includes superannuation interests. Second, I must be satisfied that it is just and equitable, within the meaning of s 79(2), to make an order altering the interests of the parties in property. If I am not satisfied (which is not the case here), the property application would be dismissed. Third, I will assess the contributions made by the parties as defined in section 79(4)(a) to (c). That is, direct or indirect, financial and non-financial contributions to property and contributions as a homemaker and to the welfare of the family. Fourth, I will consider the effect of any proposed alteration of property interests on the income earning capacity of either party within the meaning of s 79(4)(c). Fifth, I will consider the matters contained in section 75(2) in so far as they are relevant. By virtue of s 75(2)(o), the matters include any fact or circumstance which, in the opinion of the Court, the justice of the situation requires be taken into account shall be taken into account. In this case, that includes add backs. Finally, I must be satisfied that, in all of the circumstances, the order which I propose to make is just and equitable within the meaning of s 79(2) of the Act and appropriate within the meaning of s 79(1).
After determining the entitlement of each of the parties in relation to any alteration of property interests, I will consider the wife’s application for lump sum spousal maintenance. Section 72 of the Act provides that a party to a marriage is liable to maintain the other party, to the extent that they are reasonably able to do so, if the other party is unable to support himself/herself by reason of having the care of a child under 18 years old, by reason of physical or mental incapacity for appropriate gainful employment or for any other adequate reason having regard to s75(2). Section 74 confers power on the court to make such order as it considers proper for the provision of maintenance in accordance with Part VIII of the Act. Section 75(2) of the Act provides that, in exercising jurisdiction under s 74, the court must take into account the matters set out in s 75(2), to the extent that they are relevant. Section 80 lists the general powers of the court under Part VIII (maintenance and property). Relevantly, s 80(1) includes the following:
(1)The court, in exercising its powers under this Part, may do any or all of the following:
(a)order payment of a lump sum, whether in one amount or by instalments;
(b)order payment of a weekly, monthly, yearly or other periodic sum;
(ba)order that a specified transfer or settlement of property be made by way of maintenance for a party to a marriage;
I will deal with the parties’ applications for “child support” such as they are.
I will determine the outstanding costs applications, being:
(a)the wife’s application for costs on the husband’s unsuccessful recusal application; and
(b)the husband’s application for costs on the wife’s largely unsuccessful application to tender documents marked for identification.
THE PARTIES
Husband
The husband is 61 years of age and was born in the United States of America. The husband is a dual citizen of the United States and Australia. He holds a Country U passport as he is of Country U descent on his paternal side. The husband is a company director and business owner. The husband’s business is W Pty Ltd and T Inc (collectively “W Group”). It facilitates Australian investors to purchase shares on the US stock market. W Pty Ltd introduces accounts to T Inc which introduces accounts to a U.S. Broker which, at the time of the hearing, was CC Company pursuant to a clearing agreement.
The husband was in the witness box for a total of 53 hours over a period of 22 days. The husband was a problematic witness. A great deal of Court time was wasted because the husband was non-responsive and disruptive. The husband gave evidence with an apparent intention to confuse and add complexity. He is an unreliable witness.
Wife
The wife is 63 years old and was born in Melbourne, Australia. The wife is not employed outside the home. The wife was employed full time in the service industry up until the birth of D. From 2011 until separation, the wife was employed by W Pty Ltd and subsequently by L Pty Ltd. She assisted with bookkeeping and administrative duties. In the course of her employment the wife was supplied with a company car, phone and computer paid through L Pty Ltd. The wife deposes that in the 18 months prior to separation the husband began reducing her responsibilities until she was finally terminated shortly after separation. The husband asserts that the wife ceased coming to work once she successfully obtained an Intervention Order against him and denies her responsibilities were reduced. During her employment the wife received contributions to her superannuation including $46,500 on 29 June 2011 by W Pty Ltd. The wife’s superannuation increased from $20,000 at the commencement of cohabitation to approximately $160,000 at separation.
The wife was in the witness box for about 6 hours over 4 days. The wife was an honest but not necessarily careful witness. Some of her evidence in relation to discovery was incorrect but I am satisfied this was without any intention to mislead.
THE APPLICATIONS
Both parties seek a catch all order where each retains the personal property and choses in action they possess. Neither party seeks an alteration of their respective superannuation interests.
The orders sought by the wife are Annexure A to her submissions filed 16 September 2022. In summary, she seeks:-
(a)a transfer of the X Street Apartment free from encumbrance being the mortgage registered to Westpac. Alternatively, the husband be at liberty to voluntarily gift the X Street Apartment to the wife following discharge of any loan secured by the property;
(b)further, by way of property settlement, payment by the husband to the wife of $2,000,000 within 30 days of the order or any further sum as may be determined by the court;
(c)penalty interest in the event that the monies are not paid, partly or in their entirety, by the due date;
(d)orders entitling the wife to obtain a charge against any and all instruments of ownership held by the husband with respect to L Pty Ltd or those entities subject to the jurisdiction of this Court (save for W Pty Ltd);
(e)an order restraining the husband from resigning as Director or Secretary of any business entity to be held in escrow;
(f)an order restraining the husband from all acts and things which may serve to limit, divest or transfer any position, power, authority, entitlement, share or ownership in any entity having an interest in any “relevant entity”;
(g)that the wife retain the interest in her share portfolio to the exclusion of the husband;
(h)that each party retain their respective bank accounts and motor vehicles;
(i)that each party forego any claim to superannuation benefits earned by the other;
(j)that the insurance policies remain the sole property of the beneficiary named therein;
(k)each party be solely liable for their own outstanding credit card balances or personal loans in their own name;
(l)that in the event of non-compliance with execution of any documents a Registrar be appointed to do so; and
(m)a lump sum spousal maintenance payment of $200,000 by the husband to the wife and any outstanding amount due pursuant to paragraph 2 of the 5 October 2015 Orders plus penalty interest.
The orders sought by the husband are described in paragraphs 8 to 14 of his final written submissions filed 22 August 2022. In summary, he seeks:-
(a)discharge of any existing obligation by the husband to pay spousal maintenance;
(b)that within 60 days the wife vacate the X Street Apartment and the husband retain his interest in the property to the exclusion of the wife;
(c)that the husband retain his interest, to the exclusion of the wife, in any business or corporation including L Pty Ltd, T Inc, his beneficial interest under any trust and certain chattels and furniture;
(d)the retention of his interest in his personal bank accounts, superannuation entitlements and any other property or financial resource in his name, control or possession;
(e)the wife retain, to the exclusion of the husband, her motor vehicle, share portfolio, certain chattels and any other property in her name, control or possession;
(f)payment by the wife to the husband of half of the amount paid by him pursuant to any interim orders in respect of costs of examining a report, single expert reports and the costs of a mediator;
(g)payment to the husband of the balance remaining in the trust account of the wife’s solicitors; and
(h)orders by way of child support departure.
THE ONUS OF PROOF AND FINDINGS OF FACT
Section 140 of the Evidence Act 1995 (Cth) provides the relevant test for the court’s assessment of evidence in this matter: the facts in issue are to be proved by the party with the persuasive onus on the balance of probabilities.
A statement of fact is a finding of fact.
EVIDENCE RELIED UPON
The parties were required to identify the documents on which they relied in their case outlines. However, the trial went for so long that other documents were brought into existence and admitted into evidence. The nature of the case was such that either or both parties would have suffered an injustice if I had held them to the rules of court about one affidavit per witness and a single trial affidavit for each party. As a result the evidence is unwieldy but as comprehensive as can be given the husband’s non-disclosure.
The wife relied on:
(a)a Notice to Admit Facts filed 18 August 2017;
(b)her Fourth Amended Initiating Application filed 30 January 2018
(c)her trial affidavit sworn 30 January 2018 (objected paragraphs struck out)
(d)a Notice to Admit Facts (and authenticity of documents) filed 23 February 2018
(e)her trial affidavit in reply affirmed 6 March 2018 (with objections struck out);
(f)an affidavit of Mr DY (DZ Real Estate) sworn 7 March 2018;
(g)her financial statement filed 12 March 2019;
(h)an affidavit of Mr V sworn 18 June 2019;
(i)her affidavit sworn 2 October 2020 (with strike outs ordered on 8 September 2021);
(j)her Notice to Admit filed 13 May 2020;
(k)an affidavit of Mr V filed with strike outs on 20 October 2020;
(l)her affidavit filed on 15 April 2021 (with strike outs ordered on 8 September 2021);
(m)her affidavit sworn 15 July 2021 (with strike outs ordered on 8 September 2021); and
(n)her affidavit sworn 7 September 2021.
On 21 May 2019 the wife filed an affidavit by her solicitors to which was annexed a “Fourth Amended Initiating Application” dated 29 April 2019 (really her Fifth Amended Initiating Application) but ultimately she seeks orders set out in her Fourth Initiating Application of 30 January 2018.
The husband relied on:
(a)six affidavits of Mr DD (husband’s accountant) sworn 10 August 2016, 17 May 2017, 16 February 2018, 25 June 2018, 1 February 2019, 17 June 2019 and 3 February 2020;
(b)a Notice Disputing a Fact filed 4 September 2017;
(c)a Notice Disputing a Document in Notice to Admit filed 11 September 2017;
(d)his affidavit sworn 16 February 2018;
(e)the affidavits of Ms AM (husband’s former solicitors) affirmed 7 March 2018 and 7 June 2019;
(f)his Case Outline dated 15 March 2018;
(g)his financial statement (unsealed) signed 19 March 2018;
(h)the affidavits of Ms OO (accountant) sworn 21 June 2018 and 22 October 2020;
(i)an affidavit of Ms BB sworn 21 June 2018;
(j)the affidavits of Mr EA sworn on 20 June 2018, 4 February 2019 and 21 October 2020;
(k)his Response to an Amended Application in a Case filed 17 June 2019 (wife seeking litigation funding, part property settlement and spousal maintenance);
(l)the affidavits of Mr Y sworn 30 January 2019 and 13 June 2019;
(m)his affidavit sworn 17 June 2019;
(n)the affidavit of Mr AZ sworn 17 June 2019;
(o)his Response to the Contentions of Fact and Law of the wife (filed 15 July 2019) filed on 5 August 2019;
(p)the Experts Minute of Conference dated 7 November 2019 (Exhibit “H36” and Annexure “[MV3]” to the affidavit of Mr V sworn 27 October 2020);
(q)his Notice Disputing Facts signed 4 June 2020 (never filed);
(r)his affidavit sworn 23 September 2020 (Disclosure);
(s)his affidavit sworn 4 October 2020 (Financial);
(t)his affidavit sworn 26 March 2021;
(u)his affidavit sworn 15 July 2021 (Interim application to travel); and
(v)his Application in a Case filed 15 July 2021 (Travel);
The husband in his written submissions at [223] places reliance upon “all of the documents referred to under “Respondent Father’s Court documents” in the e-brief Court Book”.
There were numerous exhibits. Many exhibits were marked subject to identification but, ultimately, could not be identified and were, therefore, not permitted to be tendered. I pronounced orders and delivered reasons about those documents in case neutral citation [2022] FedCFamC1F 386. I incorporate those reasons into these reasons. Any documents that could not be identified did not go into evidence and I have disregarded them.
SOME RELEVANT HISTORY
The husband’s evidence was that prior to cohabitation he had:
(a)An interest in W Pty Ltd and T Inc (collectively “W Group”). W Group was established in the 1990s to assist Australian investors purchase shares on the stock market.
(i)T Inc acts as a U.S. regulated channel for the accounts of W Pty Ltd. T Inc was established by the husband’s father (“Mr G Fowles”), and he applied for and was granted US licenses. In 1992 the husband became a 25 per cent shareholder. His father remained very active in the business until 2000 when, the husband deposes, Mr G Fowles felt comfortable that the husband was capable of taking over T Inc. He states that in 2000 his father effectively gifted to him the balance of the shares and he became the 100 per cent shareholder of T Inc.
(ii)W Pty Ltd is an Australian financial services company which introduces accounts to T Inc, who in turn introduces the accounts to CC Company, a major foreign broker.
(iii)W Pty Ltd was a wholly owned subsidiary of T Inc until 2012 when it was sold to SS Company for tax and compliance reasons.
(b)An interest in L Pty Ltd. L Pty Ltd was established in 1995. The husband is the sole director and shareholder of L Pty Ltd. L Pty Ltd is the service company for W Pty Ltd. It provides administration staff and office facilities to W Pty Ltd. It has a fee sharing arrangement with L Pty Ltd. On a monthly basis, W Pty Ltd pays L Pty Ltd enough to cover the cost of office services and salaries for support staff. L Pty Ltd invoices W Pty Ltd each month for all expenses. At the time of the hearing, the offices for W Pty Ltd were located at 2 X Street, Melbourne (‘the Office’). L Pty Ltd holds the lease for the Office with EB Pty Ltd.
(c)An interest in SS Company an investment company established for the husband by Mr G Fowles. In 2000 the husband’s father gifted his interest in SS Company and its subsidiary companies EC1 Company, EC2 Company and BK Inc to the husband. The husband became the sole director and shareholder of SS Company.
In the husband’s trial affidavit sworn 16 February 2018, the husband states at [9.4.3] that the transfers to him by his father of SS Company, and W Pty Ltd was “an early inheritance from [Mr G Fowles] who wanted to see his four children enjoy his assets while he was still alive”.
In 2000 the husband acquired the X Street Apartment in circumstances which I will detail later in these reasons.
In 2001 SS Company (owned by the husband) acquired all shares in H Inc (an entity of Mr G Fowles’).
The parties met in 2001 or 2002 when the husband was 39 and the wife was 42. The wife was self-employed in the service industry in Suburb ED, having operated the business for approximately 15 years in rented premises. They commenced cohabitation in 2001 or 2002 in the X Street Apartment.
The wife deposes that at the time of cohabitation she had a share portfolio worth approximately $10,000, nominal savings, artwork worth approximately $2,000, superannuation of $20,000 with Superannuation Fund 1 and an apartment in Suburb EF. In 1999 the wife had purchased the apartment at EG Street, Suburb EF (‘Suburb EF Apartment’) for $190,000 using a combination of funds acquired prior to the relationship and by securing a loan with Commonwealth Bank of Australia (“CBA”) for $152,000. The wife deposes that she serviced the mortgage from income working in the service industry.
In 2003 D was born. The wife deposes that after D’s birth the husband persuaded her to stay home to look after D and that she did so. The wife did not return to paid employment outside of the home until 2011 when she began working for L Pty Ltd.
In 2005 the wife sold her Suburb EF Apartment for $320,000, receiving approximately $175,000 after discharging the mortgage and payment of sales costs. The wife claims, but the husband denies, that she sold the Suburb EF Apartment because the parties were living in City AW and she was no longer in receipt of income to meet mortgage repayments and that the husband refused to assist her with the mortgage repayments. The husband asserts that during the marriage the Suburb EF Apartment was tenanted, and that the wife sold the property when the tenant relinquished their lease. The wife applied the proceeds of the sale of her Suburb EF Apartment towards the purchase of artwork for the X Street Apartment. The husband alleges, but the wife denies, that she paid $40,000 to her brother to meet her brother’s liability and eventually his day to day expenses, D’s kindergarten and primary school fees. It is the wife’s case that she purchased a painting which was hung in the City AW Apartment (“20 B Apartment”).
The parties were married in 2005 in State MM, United States.
In 2005 the wife received Motor Vehicle 1 which she deposes was a Christmas present from the husband and arrived wrapped in an oversized red bow. The motor vehicle was owned by L Pty Ltd and its expenses paid through the company. It has now been sold.
In 2006 the Australian Securities and Investment Commission (“ASIC”) commenced an investigation into the W Group. Consequently, the license of W Pty Ltd was cancelled in approximately 2010. The Administrative Appeals Tribunal (“AAT”) overturned ASIC’s decision. As a result of the investigation by ASIC, the U.S. regulatory commission, FINRA, banned the husband from licensed operation for 6 months.
In 2009 SS Company acquired AT Investments Ltd for approximately USD $1,100,000 with money gifted to the husband by Mr G Fowles. Its name was changed to YY Inc following a move to the United States. YY Inc is the registered owner of the 20 B Apartment at EH Street, where the parties would reside when visiting and/or working in City AW.
In 2012 W Pty Ltd was acquired by SS Company, an investment company established for the husband by his father. The husband is the sole director and shareholder of SS Company. The husband is also the sole director and shareholder of L Pty Ltd a service company for W Pty Ltd. W Pty Ltd is owned by SS Company which is owned by the Fowles Family Trust.
The wife’s evidence is that in or around 2013 she found the document entitled “Marital Exit Plan” whilst filing documents in the husband’s office at L Pty Ltd. This is elaborated upon below.
In 2014 SS Company invested $200,000 in a start-up company called EJ Inc which the husband describes as a “high risk venture capital investment”. According to the husband as at February 2018 EJ Inc had $300 in the bank.
Towards the end of 2014 and the beginning of 2015, the investment companies owned by SS Company; EC1 Company and EC2 Company were deregistered and their residual balance distributed to SS Company.
In 2014 the Fowles Family Trust was established. The following month, the trustee of the Fowles Family Trust established BW Company. SS Company (then the property of the husband) was assigned to BW Company and was gifted to the Fowles Family Trust. The husband deposes that this was partially for asset protection purposes. The gift was recorded on the husband’s gift tax return for 2014 filed with the Internal Revenue Service (“IRS”) at a value of $3,165,051. As discussed later in these reasons, the establishment of the Fowles Family Trust involved the husband alienating in excess of $3 million of assets owned by him or under his control. The husband continued to be responsible for all of the liabilities of the Fowles Family Trust.
The wife deposes that the parties regularly argued during the marriage and that the husband was predisposed to losing his temper and occasionally was verbally abusive towards she and D including calling them names such as “idiot” and “dumb moron”. The husband denies this and asserts that the wife would insult and criticise him, in the presence of D. The wife deposes to two occasions, one in 2013 and one in 2015, whereby the husband grabbed her in the course of an argument, causing her to sustain a bruise. Other allegations made by the wife include the husband spitting on her and “stonewalling” her. This is denied by the husband. The wife deposes, but the husband denies, the husband would threaten to leave her with no money and nowhere to live, that he would take D to the United States and “ruin” her. The wife deposes that she remained in the relationship for fear of the husband leaving her with “nothing”. I will say more about the allegations and counter allegations in the context of the parties’ respective contributions to the welfare of the family.
The parties separated initially under one roof in January 2015 and on a final basis in mid-2015. The separation under one roof occurred after a holiday during which the wife discovered emails on the husband’s iPad which indicated to her that the husband was having an affair with a woman in City AW. The wife confronted the husband who became aggressive, grabbed the iPad from her and used it to hit her in the chest, causing her to fall into an open cupboard. D slept through the incident. In mid-2015 the husband sent an email to his sister and two friends of the wife’s stating “I woke up at 3am with [the wife] violently trying to suffocate me in a headlock. [D] was sleeping next to me and work (sic) up screaming wig (sic) horror”. The husband deposes that he had woken to the lights being turned on, the wife jumping on his back and choking him. The husband claims the wife was “screaming about prostitutes” and claimed to now “have the evidence”. The husband deposes that D woke up and urged the wife to stop. The wife denies trying to suffocate the husband or placing him in a headlock.
The wife alleges that in mid-2015 she observed that the husband became angered with D and grabbed him by the arms and pulled him out of bed, yelling and swearing at him. The wife claims that the following day D showed her a bruise he sustained in the incident.
The wife says that on the day before final separation she had formed an intention to separate from the husband. The wife deposes that the husband became angry when she approached him about separating their finances and he picked up an object and threw it in the wife’s direction, missing the wife and breaking a window. The husband claims that on that day at 5pm he received a message from the wife stating “How long have been on tinda (sic)”. The husband claims that around 7:00 pm the wife approached him and told him he was never to leave her, picked up an object and threw it into the blind, breaking it. The husband deposed that at 8:30 pm the wife then approached him with D asking about how he “ejaculated into other women’s vaginas”. The husband claims that D spit on him. The wife left the home and attended a local Police Station where she remained until the next morning. The following day the husband was arrested outside a venue in X Street, Melbourne. The husband was released on bail, a condition of which was that he would not come within 200 metres of the former matrimonial home or commit further acts of family violence.
The wife deposes that following separation the husband:-
(a)ceased paying her monthly allowance with the last payment of $2,900 received on 15 July 2015;
(b)cancelled the wife’s L Pty Ltd credit card;
(c)attempted to cancel the wife’s phone plan paid through L Pty Ltd;
(d)cancelled her car insurance policy; and
(e)ceased paying the outgoings in respect of the X Street Apartment [as notified to her in a letter from solicitors for L Pty Ltd dated 25 August 2015, L Pty Ltd].
The husband’s evidence was that the wife had access to another source of income through service industry clients and that Motor Vehicle 1 was a company car. Further, the husband claims that L Pty Ltd could not continue paying outgoings for the X Street Apartment because it was no longer able to be ‘the designated disaster site’ for W Pty Ltd and that the wife had refused to sign the new disaster recovery agreement. The wife ceased to take clients at home when she went to work for L Pty Ltd in 2011. I am satisfied that service industry work was not a source of remuneration that the wife could immediately reactivate. Cessation of the payment of $2,900 or $3,000 per month by the husband left the wife and D without any means of support.
In September 2015 the wife commenced proceedings with respect to property and parenting orders. Pursuant to her Initiating Application filed 11 September 2015 the wife sought, inter alia, interim orders in respect of litigation funding, spousal maintenance and urgent child support.
On 5 October 2015 Judge Hartnett (as she then was) made interim orders in respect to disclosure. Hartnett J also ordered that the husband pay:
(a)$800 per week in spousal maintenance;
(b)child support amounting to $250 a week, as well as the payment of school fees, and all medical expenses not covered by private health until an assessment was made by the Child Support Agency;
(c)all repayments with respect to the mortgage and all other encumbrances pertaining to the X Street Apartment;
(d)all rates, utilities, taxes, phone and internet, insurances, owner’s corporation liabilities and statutory outgoings in respect to the X Street Apartment;
(e)all payments in relation to the parties’ respective life insurance policies; and
(f)the wife’s costs fixed in the sum of $1,500.
The husband asserts that the interim orders were made by Hartnett J in the absence of evidence as to his finances. The husband claims he had given instructions for and had prepared an affidavit about his finances which his previous lawyer failed to file. The husband in his affidavit of 16 February 2018 states that he was then financially unable to maintain the level of support which the interim orders of Hartnett J required of him. Notably, the husband proceeded to spend in excess of $2.7 million on legal fees in these proceedings, the overwhelming proportion of which were applied after Hartnett J’s maintenance order. This was the first of many instances of the husband claiming not to be able to afford an expenditure for the direct or indirect benefit of the wife but then accessing funds or resources for his own direct or indirect benefit, frequently from undisclosed sources.
Apart from proceedings in the Family Court, there were proceedings instituted in the Magistrates Court of Victoria, the Supreme Court of Victoria and VCAT. The proceedings in the Magistrates Court were proceedings instituted by Victoria Police in mid-2015 for an IVO against the husband naming the wife and D as affected family members. The husband made an application for an IVO against the wife in late 2015 seeking that she be removed from the X Street Apartment and not permitted to come within 200 metres of the property. The parties attended eight court events in relation to the IVO proceedings.
The proceedings in the Supreme Court were initiated in the name of the husband’s father to support the caveat lodged on his behalf claiming an interest pursuant to a loan provided to acquire the X Street Apartment. The wife had challenged the caveat. The parties had six court events prior to the final hearing which was listed for late 2017. The wife retained solicitors and counsel to represent her in the Supreme Court proceedings which were ultimately withdrawn. It was an expensive exercise for her.
The husband also made application to the Victorian Civil and Administrative Appeals Tribunal (“VCAT”) against the wife’s solicitors in relation to a payment made towards legal fees using the wife’s L Pty Ltd company credit card. The application was dismissed for want of jurisdiction.
On 3 December 2015 the wife filed an Amended Initiating Application. The significant difference to that of the wife’s earlier application was an order seeking to join Mr G Fowles as a second respondent to the proceedings and an order consolidating the Supreme Court proceedings with these proceedings as well as further orders in respect of child support. No joinder order was made.
On 8 December 2015 Hartnett J made orders for partial property settlement payable by the husband to the wife in the amount of $75,000 to be paid to the wife’s solicitors.
On 9 December 2015 the husband filed a response to the wife’s Initiating Application.
In April 2016 the parties attended a private mediation but were unsuccessful in reaching a resolution.
The parties attended two hearings before Judge Hartnett in April 2016 resulting in all extant applications being adjourned until July 2016.
The husband was initially assessed to be liable for the payment of child support in the amount of $7.82 per week (based on an income of approximately $20,000). In early 2016 the wife applied for a change to the assessment of child support. The CSA assessed the husband’s income at $242,148 per annum, taking into account his US tax returns, and assessed child support be paid by the husband in the amount of $393 per week. The husband appealed the assessment decision on the basis that the CSA incorrectly assessed his personal income to include rent paid by L Pty Ltd to the bank. In early 2017 the CSA upheld their decision. In mid-2017 the husband applied for a review of the CSA decision by the Administrative Appeals Tribunal. In late 2017 the husband received a letter confirming that his application for review had been granted.
On 10 August 2016 the husband filed an Amended Response to the wife’s Initiating Application seeking final orders in respect of parenting and any financial orders as the court deems fit.
On 12 August 2016 the wife filed her Second Amended Initiating Application. The significant difference from the wife’s earlier application were orders in respect of parenting as well as an order for the payment of $200,000 by the husband to the wife to be characterised by the trial judge.
On 21 September 2016 the wife sent the husband an email in Latin which translates to “The thing speaks for itself, if you want peace, prepare for war”.
On 13 October 2016 orders were made by Hartnett J that, inter alia, the husband pay the wife a further partial property settlement of $100,000.
The wife deposes that throughout 2016 the husband had failed to pay spousal maintenance or child support on time and that he only paid just prior to attending court. At the beginning of 2017 the husband stopped paying periodic spousal maintenance as per the orders of 5 October 2015 and stopped paying child support as assessed by the CSA.
The wife deposes that she applied the part property settlement funds totalling $175,000 ($75,000 on 8 December 2015 and $100,000 on 13 October 2016) towards her legal fees and personal debts arising from the husband’s failure to pay maintenance. The wife had also withdrawn money from her superannuation fund on the grounds of financial hardship in the sum of $125,000.
On 24 October 2016 the wife sent an email to the husband in Latin which translates to “Thou shalt not be the man whom he loved”.
On 19 December 2016 Harnett J dismissed all previous parenting orders and made orders providing that D spend four nights per fortnight with the husband and time during school holidays.
In 2017 the husband and D travelled to regional Victoria for a holiday. The wife emailed the husband concerned that D had not been contactable on his mobile. The husband deposes that he had begun limiting D’s time spent on mobile devices and in any event had little to no mobile signal.
On 19 May 2017 Hartnett J ordered that the husband pay $16,000 to the wife, to be categorised as “payment of partial arrears of spousal maintenance”. The child support arrears remained outstanding. The wife’s costs were reserved on an indemnity basis and the matter was transferred to the Family Court of Australia as it then was (now Division 1 of this Court).
In June 2017 the wife filed an affidavit containing schedules of documents obtained by her including documents obtained by the wife from the office premises of L Pty Ltd (described as Schedule A), documents copied by the wife and printed from the husband’s laptop as early as July 2015 (described as Schedule B), and documents from the husband’s computer with joint Outlook log-in facilities (described as Schedule C). In June 2017 the husband’s solicitors wrote to the wife’s solicitors requesting the return of the husband’s computer and USB stick.
On 14 July 2017 in a hearing before a registrar the interim property and child support departure application was adjourned to a Judicial Duty List. In July 2017 a Departure Prohibition Order was placed on the husband by the CSA to prevent him from leaving the country.
On 1 August 2017 the husband sent an email to the wife stating:-
Arrangements for [D]
Sorry, but I forgot to pay the power and water, and am having trouble getting time to take care of it for you and [D]. I am concerned that the utilities will be turned off very soon. For [D’s] comfort, I think you should set up your own accounts so you are not depending on me to pay your bills.
On 22 August 2017 a subpoena was issued to the husband’s solicitors for the husband’s trust account ledger. According to the wife, who was able to inspect the ledger, the husband had paid his legal fees as and when they became due in contrast to paying utilities for the family home. In or around 23 August 2017 the wife received multiple utility bills addressed to her and a letter of demand for an overdue water bill in the amount of $271.63 in relation to the X Street Apartment.
The wife deposed that post separation the husband permitted the internet in the X Street Apartment to be “restricted to an unworkable level on a regular basis” such that D was unable to access the internet to complete his homework. The wife purchased a pre-paid internet modem to use when the home internet was not working. The wife deposed that she was unable to afford a home internet plan. Around this time D sent a text message to the husband stating “I’ll call you when u put the internet back on”. On 31 July 2017 the husband sent the wife an email attaching the text message the husband had received from D, stating:-
I strongly recommend you set up your own Internet account
[D] should not be in the middle between us on this issue
You should not depend on me for Internet access [D].
In relation to the internet issue the wife deposes in her affidavit of 30 January 2018 at [112]-[113]:-
I say that [D] is 14 years of age and is well aware that I am not in paid employment and thus it is his Father that pays the utility and internet bills with respect to the [X Street] property. It causes both [D] and I undue stress when the internet is restricted. I have not informed [D] that the water may also be restricted but I am greatly concerned as to how this may impact our quality of life if this occurs.
I do not have authority to contact the service providers with respect to the utilities or internet for the [X Street] property. I have however received further final notices and letters of demand from [EK Lawyers]. The internet continues to slow down on a regular basis.
In his affidavit filed in response, the husband denies disconnecting the internet and says he paid the internet bill. Further, he claims he suggested the wife get her own internet so she can dictate the amount of data required.
On 31 August 2017 a Third Amended Application for final orders was filed on behalf of the wife. The significant alteration to that of her earlier application was the addition or orders seeking compliance by the husband of Orders made on 5 October 2015 as well as further orders in respect of parenting.
In or around September 2017 the wife brought an application seeking to enforce the child support assessment and requested a certificate under s116(2) of the Child Support (Registration and Collection) Act 1988 (Cth). In a hearing before me on 6 September 2017 the parties agreed, by consent, that the husband pay outstanding child support to the wife in the amount of $15,583. The wife received payment on 16 September 2017. No orders were made in respect of outstanding spousal maintenance. At that stage, in September 2017, the husband was in arrears of spousal maintenance of approximately $15,200.
On 6 September 2017 the parties agreed to attend therapeutic counselling with Mr EL, psychologist. Mr EL’s engagement did not proceed as a result of the husband wanting to incorporate parental alienation as a matter to be addressed and for the counselling to be reportable.
The wife deposes to having received an excessive number of emails from the husband in October 2017 which the wife describes as “nasty and harassing in nature”. In general, the wife describes the husband’s emails as “complaining in nature, dictatorial and often abusive”. The husband denies this and describes the wife’s emails to him as “provocative”.
On 11 September 2017 the husband’s time with D effectively ceased due to an apparent refusal by D to spend time with his father.
On 25 September 2017 the wife requested through correspondence from her solicitors, $40,000 from the husband to purchase a motor vehicle.
On 16 October 2017 the husband filed a Contravention Application with respect to his time with D pursuant to an Order made 19 December 2016. The Contravention Application was subsequently withdrawn at a Case Management Hearing on 8 November 2017.
On 18 October 2017 the husband filed a Second Amended response to the wife’s Initiating Application seeking final orders in respect of parenting.
On 8 November 2017 I ordered the husband pay to the wife the sum of $22,400 (to be categorised at a later date) and to provide discovery.
On 18 December 2017 I made orders adjourning the final hearing and the wife’s application for litigation funding.
On 22 December 2017 the wife’s solicitors wrote to the husband’s solicitors requesting his outstanding financial disclosure by 10 January 2018. On 9 January 2018 an undertaking as to disclosure was filed on behalf of the wife. On 19 January 2018 the husband’s solicitors wrote to the wife’s solicitors stating that it was “unreasonable” to return to them with the husband’s undertaking by 10 January 2018 given the Christmas closure period. On 23 January 2018 an undertaking as to disclosure was filed on behalf of the husband.
In a letter from the wife’s solicitors to the husband’s solicitors on 25 January 2018 the wife sought financial disclosure as a matter of urgency with regard to her ability to prepare for trial. In the afternoon on 25 January 2018 the husband’s solicitors responded to the requests for disclosure by letter advising that the documents would be hand delivered to the offices of the wife’s solicitor on Monday 29 January 2018 (having regard to the public holiday on 26 January). The wife’s material upon which she relied was due to be filed on 29 January 2018.
On 25 January 2018 the wife received a letter from the CSA notifying her that the husband’s liability to pay child support had decreased to $34.75 per month having assessed the husband’s taxable income at $23,566. The wife claims she was put on notice by the CSA that the assessment of child support would decrease with every Australian tax return the husband files each year.
On 30 January 2018 the wife filed her Fourth Further Amended Initiating Application being the orders which she currently seeks.
On 16 February 2018 the husband filed a Third Amended Response seeking, inter alia, final orders in respect of property including that the wife vacate the former matrimonial home, orders in respect of spousal maintenance and orders in relation to the treatment of certain chattels.
On 8 March 2018 the matter was listed for a Case Management Hearing by urgent application for further directions for trial and the provision of documents to the Magistrates Court for IVO proceedings in early 2018. My reasons for decision of 8 March 2018 were delivered ex tempore and published in case neutral citation [2018] FamCA 145. I incorporate those reasons into these reasons. A notation to the Order of 8 March 2018 was an estimation that the final hearing of parenting and financial matters in this Court would take 5 days.
On 15 March 2018 the valuation report by single expert witness, Mr EA, was published in relation to the husband’s business interests. Solicitors for the wife subsequently appointed Mr V of JJ Company for the purposes of preparing an adversarial report in relation to Mr EA’s report of 15 March 2018. On 21 March 2018 Mr V’s report was released.
On 20 March 2018, the second day of the final hearing, the parties reached consent as to the parenting issues for the child, D (then aged nearly 15 years). The independent children’s lawyer was excused from attendance going forward.
The wife deposes that during the marriage the husband invested in cryptocurrency. The wife deposes, but the husband denies, showing the wife his cryptocurrency “[EN Application] wallet”. On 25 January 2018 the husband’s solicitors responded to the letter by the wife’s solicitors dated 22 December 2017 in relation to their requests for financial disclosure. In particular, the wife’s solicitors requested “A full accounting of, including documents evidencing, any and all interest your client has in any cryptocurrency […]”. The response received by the husband’s solicitors was “None”. The husband was cross-examined in relation to his interest in Cryptocurrency on 22 March 2018, day 4 of the trial. The husband was permitted to access his phone from the witness box and identified two applications in relation to cryptocurrency. The first was an application called EP Application which according to the husband is a “news service” which “shows the price of [cryptocurrency] and it gives the news feed”. The second was an application known as EN Application which stores cryptocurrency. The account balance was nil but the husband admitted to having owned cryptocurrency. The husband accessed his transaction history within the EN Application which had a receipt of the husband’s first transaction dating back to April 2017 and the most recent transaction being January 2018 with a total of 20 transactions. The transactions were relatively nominal, the highest being $1900. The husband was then taken to a W Group activity statement for January/ February 2016 to August/September 2017 (Exhibit “W10”) showing approximately AUD $10,000 worth of transactions on an EQ Finance account used to purchase cryptocurrency. There was the following exchange between Counsel for the wife and the husband:-
COUNSEL FOR THE WIFE: Where did the [cryptocurrency] that was purchased with that?- - - All right. I’ve – I’ve got some girlfriends and I give it to some of my girlfriends.
[…]
Which account was it?--- No, no. It goes from [EQ Finance] to my girlfriend’s account.
Which girlfriend? --- I’ve got several.
Okay so you paid a girlfriend US 5000 give or take? ---- Mmm. Well remember that is- [the cryptocurrency] has halved in price since then.
You’ve paid a girlfriend US 5000 and you can’t remember her name?--- I don’t think I want to mention her name.
With respect, your Honour, I ask the witness be directed to the question.
HER HONOUR: yes. What’s her name?--- There’s [Ms SS] and there is ---
[Ms SS] is her given name. Is that right?--- [Ms SS]
[…]
You directed- how – does she have [an EN Application wallet]?--- Yes. Well she has a [cryptocurrency] wallet.
Yes. And so from which account did her [cryptocurrency] wallet receive the [cryptocurrency]?---From [EQ Finance] to her.
Okay. So you pay [EQ Finance] - it’s like Western Union. You pay [EQ Finance]. They sing it to her?-—Yes.
[…]
Okay. Was she also the recipient of the 5050 of- which was purchased on 25 January?---That’s my recollection. Yes.
Okay.
So all of it has gone to [Ms SS]?---Yes.
COUNSEL FOR THE WIFE: Are you under a court order to pay [Ms SS] any money?---No.
Okay Are you under a court order to pay your wife any money? --- Yes.
So let’s just work this through. In January, early February you paid to your girlfriend, [Ms SS], 15-odd, 14-odd thousand Australian dollars?---Yes.
The equivalent of? --- Yes.
Did you think, well I better pay- I should pay [the wife] because there’s a court order that requires me to and I’m in breach of the order? Did you think that?---I didn’t think that at the time. No.
No. How much would you have paid to [Ms SS] in [Cryptocurrency] in the last 12 months?---I don’t recall.
10,000 a month or thereabouts? --- No, no, no.
How long have you and [Ms SS] been dating?—Since- about 18 months.
Okay. And how often in a month do you make transfers to [Ms SS] in [cryptocurrency]?---I don’t remember making any other transfer to her. I don’t remember.
But if I point you to some you might have? --- I don’t recall.
Well if you don’t recall, you’re saying it’s not the- you’re not in a position to deny that in the last 18 months you’ve--- I’m not in a position to deny it either, no.
On 25 June 2018 my reasons for decision were published to the parties in which I refused the wife’s application for production of documents by the husband, being communications between the husband and J Lawyers (in their capacity as solicitors for Mr G Fowles) in relation to the alleged Loan Agreement. I note that my reasons were published to the parties but not assigned a case neutral citation until recently, the reasons are [2018] FamCA 1181. I incorporate those reasons into these reasons.
On 3 July 2018 my reasons for decision were published to the parties in which I dispensed with the compliance by the wife of rule 11.07(b) of the Rules and permitted Counsel to ask the husband “why he disputes the genuineness of Exhibit “W36STI” but admits the genuineness of Exhibit “W37STI””. My reasons for decision were published in case neutral citation [2018] FamCA 498. I incorporate those reasons into these reasons.
On 5 July 2018, day 5 of the final hearing, I made a “30 cents in the dollar” order for the benefit of the wife that for every dollar the husband paid to his lawyers, thirty cents in that dollar was paid to the wife’s lawyers to be applied to outgoings on the X Street Apartment.
On 12 September 2018 my reasons for decision permitting D to attend an extra-curricular event were published in case neutral citation (No 4) [2018] FamCA 711 arising from an interim application made on 10 September 2018 in which Ms Kildea, of Counsel, appeared on behalf of the Independent Children’s Lawyer. The husband was ordered to pay the costs of the wife fixed in the sum of $5,521 and independent children’s lawyer fixed in the sum of $1,902. I incorporate those reasons into these reasons.
On 16 November 2018 I delivered my reasons for decision restraining the husband by injunction from leaving Australia pending the conclusion of these proceedings. The application arose partially in response to emails sent by the husband in which he purported to resign from his companies and return to the United States (Exhibit “W18” and “W19”). The emails are also extracted at [310]-[311] below in the context of valuation evidence. My reasons of 16 November 2018 were published in case neutral citation [2018] FamCA 929. I incorporate those reasons into these reasons.
On 5 February 2019 my reasons for decision were published in case neutral citation [2019] FamCA 133 in which I limited the use of the affidavit of Mr Z such that it does not in itself constitute evidence of the truth of what is deposed to. Leave was granted to the husband to rely on the affidavit of Mr Y sworn 30 January 2019. I incorporate those reasons into these reasons.
On 6 February 2019, day 17 of the final hearing, the wife sought leave to make an oral application for leave to file a Fourth Further Amended Initiating Application seeking various declarations and orders pursuant to s106B of the Act. Counsel for the husband submitted there was no capacity to seek those orders in circumstances where there had been no joinder.
On 7 February 2019, day 18 of the hearing, Counsel for the wife sought to amend her Third Further Amended Initiating Application in the terms of the Fourth Further Amended Initiating Application. The application was opposed by the husband based on a perceived prejudice to the third parties whose interests would be affected and that they were entitled to be joined from the beginning. Counsel for the wife submitted that “if they [had] been joined at the start, nothing in the proceedings, so far, has occurred, which they would have had a role in”. I informed Counsel that one way to approach the issue was to “join them, serve them and let them be unjoined on their own application or the application of someone else”. On 8 February 2019 I reserved my decision in relation to leave to amend the wife’s application to allow notice to be given to the third parties. On 21 May 2019 the wife filed an Amended Application seeking to join 18 parties. That application was returnable before me on 21 March 2019 being day 20 of the hearing. On 21 March 2019 I made orders in relation to service and the matter was adjourned to 19 June 2019.
On 17 June 2019 I delivered my reasons for decision in which I ordered the husband to pay the wife’s costs of her oral application made 27 March 2018 in relation to restraining the husband from departing Australia and the husband’s Application in a Case filed 22 August 2018, fixed in the sum of $10,550. I note that my reasons were published to the parties but not assigned a case neutral citation until recently, the reasons are (No. 4) [2019] FamCA 1062.
On 7 November 2019 I delivered reasons for decision published in case neutral citation [2019] FamCA 1040 in relation to a claim of legal professional privilege by the husband. Accordingly, I found that the letter sent by the husband’s solicitors (then DW Lawyers) to the solicitors for EE Company of FF State on or about 27 March 2017 in circumstances where the wife sought to join the trustee of the Fowles Family Trust was subject to legal professional privilege in accordance with s 119 of the Evidence Act1995 (Cth) and was therefore not required to be produced.
On 8 November 2019, day 25 of the final hearing, I adjourned the matter because the husband presented to court visibly distressed and I was satisfied, and as best I recall his counsel agreed, that the husband may not do himself justice if he was required to be further cross-examined. I delivered ex-tempore reasons for decision published in case neutral citation [2019] FamCA 1011. I incorporate those reasons into these reasons.
By his Application in a Case filed 29 November 2019 the husband sought, inter alia, a discharge of the order restraining him from leaving Australia. Orders were made on 2 December 2019 for the filing of material as to the interim application of the husband.
By way of response filed 6 December 2019 the wife sought to vary the order made 5 July 2018 to the extent she may apply the funds to liabilities other than outgoings for the former matrimonial home. In particular, the principal and interest to LL Company, a litigation finding entity of which the wife owed some $350,000.
On 23 December 2019 I delivered my reasons for decision published in case neutral citation [2019] FamCA 1027 dissolving, temporarily, the injunction restraining the husband from leaving Australia for his father’s funeral. I refused the husband’s application to take D to the funeral having regard to the “father’s unpredictable and unsatisfactory behaviour” and his unwillingness to give D any financial autonomy in the United States. I incorporate those reasons into these reasons.
On 4 February 2020 I delivered my reasons for decision published in case neutral citation [2020] FamCA 282 ordering, by way of part property settlement, payment from the monies held in trust for the wife in the sum of $150,000 in reduction of her liability to LL Company and a distribution of $50,000 for the wife to use as she saw fit. The husband in his affidavit sworn 26 March 2021 deposes that the wife asserted the loan included penalty interest where there was no penalty interest. Accordingly, at [53] of his affidavit the husband seeks the repayment by the wife’s solicitors of $200,000 to the trust account and the monies “used to pay the outstanding amount on the Westpac loan in the first instance and the outstanding amount on the [alleged loan to [Mr G Fowles]] in the second instance”.
On 29 June 2020 the parties attended a Judicial Settlement Conference convened by the Chief Justice. The matter failed to resolve.
On 18 October 2020 the husband filed a Further Amended Response to the Fourth Further Amended Application relating to interim orders only.
On 19 October 2020, day 29 of the final hearing, an Order was made by consent (Exhibit “C3”) dismissing the Application in a Case on behalf of EE Company of FF State filed on 17 July 2019, causing the subpoena issued to EE Company to be withdrawn and that there be no orders as to costs as between the wife and EE Company. Accordingly, the costs claimed by EE Company, in the sum of $120,000, were not pursued.
On 22 October 2020 the husband’s evidence was concluded.
On 28 October 2020, day 34 of the final hearing, the husband made an application that I recuse myself from hearing any further aspect of the proceedings on the basis of apprehended bias. I made orders for the timetabling of the filing of written submissions in respect of the recusal application.
On 9 June 2021 I delivered judgment dismissing the husband’s recusal application with the effect that I remained seized of the matter for final determination. My reasons for decision were published in case neutral citation [2021] FamCA 368. I incorporate those reasons into these reasons.
On 31 August 2021 DW Lawyers, the husband’s former solicitors, sought leave to intervene in the proceedings to be relieved from the 30 cents in the dollar order made on 5 July 2018. I will come to this later in these reasons.
On 8 September 2021, day 41 of the final hearing, I granted leave to the wife to re-open her case for the purposes of tendering absolutely 43 documents which had been tendered subject to identification. The wife was cross-examined.
On 10 September 2021, day 43 of the final hearing, I made orders for the filing of submissions as to the admissibility of documents marked subject to identification. The parties did not adhere to the timetabling for filing of submissions however no issue was taken and I had regard to the submissions. I note that the documents sought to be tendered increased from 43 to 54 exhibits upon review of the transcript and an error in the initial recording of exhibits.
On 30 May 2022 I made orders and delivered my reasons for decision published in case neutral citation [2022] FedCFamC1F 386 in respect of the 54 documents marked subject to identification (“STI”). I ruled that none of the 54 documents marked STI were permitted to be received into evidence absolutely finding they were inadmissible by operation of s 56(2) of the Evidence Act. The effect of my ruling was that the documents were removed from the bundle of exhibits and none are in evidence in the proceeding. I incorporate those reasons into these reasons.
On 17 June 2022 Orders were made by consent, with the parties excused from attendance, that the time for filing of final written submissions be extended so that:-
(a)The husband file his final written submissions by 29 July 2022;
(b)The wife file her final written submissions by 19 August 2022; and
(c)The husband file his written submissions in reply by 29 August 2022.
On 19 August 2022 orders were made by consent in Chambers further extending the time in which the wife may file her written submissions to 29 August 2022 and the husband in reply by 9 September 2022.
On 22 August 2022 the husband filed his Amended final written submissions.
On 15 September 2022 the husband filed his written submissions in reply asserting:-
1.By court order on 19th August 2022 the Applicant Wife was to file written submissions by 29 August 2022. The wife has not complied with that order.
2. By court order on 19th of August 2022 the Respondent Husband is to file written submission in reply by 9 September 2022.
3. Because the Applicant Wife has not filed written submissions, the Respondent Husband has nothing to respond to as this time.
4. In the face of the Applicant Wife being in default of complying with the orders, her Honour is now asked to deliver judgment based on the Husband’s submissions only.
On 16 September 2022 the wife filed her final written submissions.
On 27 September 2022 an order was made by consent in Chambers extending the husband’s time for filing written submissions in reply to 17 October 2022.
On 5 October 2022 the husband filed an Application in a Proceeding seeking that the wife pay his costs of and incidental to the written submissions filed by the wife on 1 October 2021 in respect of the admissibility of documents attempted to be filed on an indemnity basis in the sum of $74,014. Alternatively, the husband sought costs fixed at $50,291.83. The matter was listed for mention before me on 11 November 2022 where orders were made as to the filing of submissions as to costs. In respect of the husband’s application in a proceeding sealed 5 October 2022 I reserved the issue of responsibility between the wife and her legal practitioners for payment of such costs. On 9 December 2022 the wife and husband respectively filed their written submissions as to costs. On 3 January 2023 the husband filed his submissions in reply to the wife’s submissions as to costs. The wife filed her reply to the husband’s submissions as to costs the same day.
KEY ISSUES
The parties were able to come to some agreement in relation to the identification of legal and equitable interests and that common ground is reflected in the table of interests which appear later in these reasons.
There are four major issues in these proceedings for an alteration of property interests and spousal maintenance. The first is that the wife contends that all of the husband’s actions have been part of a plan to deprive her of her entitlement to a just and equitable alteration of property interests by using corporate entities and lack of disclosure to put assets out of her reach. The second concerns the X Street Apartment and whether it is subject to a loan in favour of the husband’s father which, if I found in accordance with the husband’s claim, would effectively negate any equity in the X Street Apartment. The third issue is the establishment of the Fowles Family Trust and whether, as the husband contends, the assets contained in the trust are beyond his control and he retains no proprietary interest in the assets of the trust and that the assets of the trust should therefore not be taken into account in an identification of the legal and equitable interests of the parties. The fourth issue concerns a broader set of entities such as the DD Trust and whether they represent a financial resource of the husband.
The Plan/ Marital Exit Plan
The parties separated on 21 July 2015. However, the wife contends that by 10 October 2012 the husband had a settled intention to separate from her having regard to an email from Mr G Fowles to the husband on 10 October 2012 with the subject line “Planning Ahead” (Exhibit “W33”) which states:-
I met with [Mr ER]
Basically you are on the Right track The Marital Exit Plan looks good
The [property] lean Needs to be recorded
The [SS Company] options needs to be properly drawn
The [W Pty Ltd] lien should be non voting preferred
THe Custody agreement looks reasonable but needs work
He will give me the name of divorce attorney in Melbourne
Answer
How much was paid for the [property]? Aus or US ?
Send closing Statement
The wife’s evidence is that in or around 2013 she found the document entitled “Marital Exit Plan” whilst filing documents in the husband’s office at L Pty Ltd. The husband disputes the method in which the wife came across the documents and denies that he would have left his computer lying around for the wife to access. In any event, the wife claims she had been suspicious that the husband was planning to end their marriage. The wife scanned a copy of the document to the husband from the office printer. The wife deposes that the husband responded saying that the Marital Exit Plan was created with respect to the husband’s father’s divorce. The husband’s evidence under cross-examination was that he recognised the document, that he did not create it but suspected his father may have, he did not relate it to his father’s marriage.
“The Marital Exit Plan” (Exhibit “W88”) reads as follows:-
1 Get solid asset protection plan where [Mr Fowles’] after tax assets are $1.750 Million and there is another $2,8 Million for [Mr G Fowles] ([property] loan $1.2, [W Pty Ltd] $400K [SS Company] $1,2)
2. Get an Australian Divorce lawyer to review a confirm and assets liabilities as about 1.5 Million for Divorce purpose
3. Prepare an offer (“Marital Settlement Agreement”)to be made to [Ms Fowles] along the following lines
Cash Settlement $750,000
Spousal Support 0 Not Required in Australia?
Child Support per year Till 17 $30,000
Country of Residence Mother Australia
Father USA
Area of Residence
Mother Melbourne Permanent
Father Melbourne Part –time
Custody / visiting/ travel rights
1st choice 180 days per year with each parent.
2nd Choice During School periods 270 days w/Mother
Every y 2nd week end with father
During Non-School periods 90 days w Father
Every 2nd week end with mother
[D] to have mothers; permission the travel
Travel with father during his custody periods for
periods of 6 weeks
[D] to have mothers’ permission the travel
with father during his custody periods for
Periods of weeks
Mutual consent to Changes Mother will agree to accept reasonable changes
to the custody agreement for which she may
receive rewards fro the grandparents / estate
4 Review the offer with Australian Divorce lawyer Write up the Offer and Prepare to show it to [Ms Fowles]
The wife submits the Marital Exit Plan was an early manifestation of the husband having entered into a course of conduct with the intention to retain all of the property of the marriage (save for what he was prepared to offer the wife under a “Marital Settlement Agreement”) and would do so by evading his obligations under the Act. It is asserted by the wife that the plan was to be effected by a series of “sham transactions.”
The definition of a sham transaction was considered by Gibbs J in Ascot Investment Pty Ltd v Harper (1981) 148 CLR 337; (1981) FLC 91-000 (“Ascot”), at [602] as follows:-
The position is, I think, different if the alleged rights, powers or privileges of the third party are only a sham and have been brought into being, in appearance rather than reality, as a device to assist one party to evade his or her obligations under the Act. Sham transactions may always be disregarded. Similarly, if a company is completely controlled by one party to a marriage, so that in reality an order against the company is an order against the party, the fact that in form the order appears to affect the rights of the company may not necessarily invalidate it.
Except in the case of shams, and companies that are mere puppets of a party to the marriage, the Family Court must take the property of a party to the marriage as it finds it.
The husband’s evidence as to the Marital Exit Plan and the Marital Settlement Agreement at [190.5]-[190.6] of his 9 February 2018 affidavit was as follows:-
The “Marital Exit Plan” was prepared by my father based on a precedent he had. I did not create the document and the document is inaccurate and refers to assets outside my control.
The “Marital Settlement Agreement” was also prepared by my father. My father did not have accurate information about my assets, so the document is factually incorrect. I did not ask him to create the document.
A “Marital Settlement Agreement” (Exhibit “W97STI”) was not permitted to be put in evidence.
The husband deposes that he had formed an intention to separate from the wife on 6 January 2015 when he sent an email and spoke to Mr G Fowles asking him to assist in negotiating a settlement between the parties along with the wife’s mother. On 8 July 2015 at 12:35 pm the husband sent an email to the wife and his own parents stating:-
I want to divorce. I will treat you fair financially please play fair with custody. I won’t fight over custody. I trust you to be fair about custody.
The Marital Exit Plan is an important part of the wife’s case. She relies upon it to explain why the husband has conducted his financial affairs as he has. It is the foundation of the wife’s allegation that the husband has embarked on a course of conduct to defeat or minimise her entitlement to an alteration of property interests and spousal maintenance. It is the lens through which she submits the court should view the husband’s alienation of more than $3 million of property and her case that, for the purpose of identifying the legal and equitable interest of the parties, the court should attribute to the husband legal and equitable interests in which he says that he has no entitlement.
A reference to ‘reasonable’ in this sub-paragraph imputes a necessity to economise if necessary. After separation the wife has continued in occupation of the X Street Apartment within circumstances where the mortgage has not been paid and the owners levies have been outstanding from time to time. The husband slept in his office for a short time after separation on the basis he could not afford to do otherwise but then rented a 4-bedroom private accommodation in Suburb EV, a prestigious suburb of Melbourne, which far exceeded his personal needs and even the needs of D for whom he was not then having overnight or regular time. The husband was also accommodating a “demi-pair” who was also a tutor who had agreed to assist D (except D wasn’t consistently spending time with husband). The husband submits that he also accommodated interns “in relation to business activities” and that the three‑bedroom house was a Business Recovery Site. I do not accept that those purposes render the expense reasonable.
The extent to which payment of maintenance to party whose maintenance is under consideration to undertake a course of educational training or to establish himself or herself in a business or otherwise obtain an adequate income (s75(2)(h))
The wife applies for lump sum maintenance of $200,000. She was undertaking training with a view to employment at the end of the hearing. I assess the wife’s ability to retrain and obtain employment as slim.
The effect of any proposed order on the ability of a creditor to a party to recover the creditors debt (s75(2)(ha))
It is submitted on behalf of the husband that the proposed orders of the wife will impede the capacity of the husband’s creditors, including the Australian Taxation Office, of recovering debts. The husband’s accountants Mr DD and Mr HH provided evidence of debts owing by the husband but not of property or assets at his disposal. There is not sufficient transparency in the husband’s case for me to be satisfied that any creditors are at risk. Payment by the husband of monies owing by him will depend upon his capacity to pay but also upon his willingness to pay.
The duration of the marriage and the extent to which it has affected the earing capacity of the party whose maintenance is under consideration (s75(2)(k))
It is a long marriage and the wife was employed within the home for the majority of the marriage. She has not been employed by a third party, unrelated to the husband, since in or around 2002. Her income earning capacity is modest and at 62 years of age and a chronic pain problem her capacity for employment is not good.
Any fact or circumstance which, in the opinion of the court, the justice requires to be taken into account (s75(2)(o))
Add backs
The wife seeks addbacks against the husband and the husband seeks addbacks against the wife. It is to be remembered, however, that addbacks are only effective if there is property against which to adjust them.
Each party claims that certain monies of which the other party has had use since separation ought to be added to the value of existing property to be divided and be regarded as received by that party on account of his or her entitlement to an alteration of property interests. I will refer to the monies as “add backs”.
The law in relation to add backs is settled so I will mention just a few of the authorities.
In GVC v HPC (1998) FamCA 143 the Full Court comprising Nicholson C J, Ellis & Kay JJ) stated at [46]:
Whilst not seeking to place a fetter upon the exercise of discretion of a Trial Judge in individual cases, it seems to us that the concept of adding monies reasonably disposed of back into the pool, ought be the exception rather than the rule. The parties are entitled to reasonably conduct their affairs post separation in a manner that is consistent with properly getting on with their lives.
In the decision of Marker v Marker, (1998) FamCA 42, the Full Court, comprising Baker, Kay and Chisholm JJ observed;
There seems to be no appropriate basis for notionally adding back monies that existed at separation but which have been subsequently spent on meeting reasonably incurred necessary living expenses. Neither the Family Law Act nor the case law requires that parties go into a state of suspended economic animation once their marriage breaks down pending the resolution of their financial arrangements. Parties are entitled to continue to provide for their own support. Whether any expenditure so incurred is reasonable or extravagant is a matter that can be determined by the Trial Judge.
This was quoted by the Full Court, comprising Finn, Kay and May JJ in Chorn v Hopkins (2004) FLC 93-204 at 79,314.
In Omacini and Omacini (2005) FLC 92-218 the Full Court comprising Holden, Warnick and Le Poer Trench JJ stated, in effect, that there were three clear categories of cases where the court had determined that it was appropriate to notionally add back to the property to be divided between the parties. First, were where the parties had expended money on legal fees. Second, where there had been a premature distribution of assets which were divisible between the parties. Third, where one of the parties have undertaken reckless investments or deliberately set out to diminish the value of the divisible assets. In relation to legal fees, their Honours stated at [30]:
To date, three clear categories of cases have emerged where the Court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a) Where the parties have expended money on legal fees. In DJM and JLM (1998) FLC 92-8l6 the Full Court said at 85,262:
" 11. 6 For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the Court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out. "
In relation to premature distributions, their Honours stated:
(b) Where there has been a premature distribution of matrimonial assets. In Townsend and Townsend (1995) FLC 92-569 Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at 81,654:
"In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under section 75(2). It seems to me that the husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the husband's receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly."
In relation to reckless and wanton expenditure, their Honours stated:
(c) In the circumstances outlined by Baker J in Kowaliw and Kowaliw (1981) FLC 91-092 at 76,644:
As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para. (a) and (b) above having economic consequences is clearly in my view relevant under sec 75(2)(0) to applications for settlement of property instituted under the provisions of sec 79."
In Omacini’s case, the Full Court went on to observe “[as] the Full Court said in Browne v Green (1999) FLC 92-873 at 86,360:
"We agree with her Honour that the principles stated by Baker J in Kowaliw certainly do not constitute any form of fixed code. They are no more than guidelines for use in the exercise of the discretionary jurisdiction conferred by s 79 of the FamilyLaw Act 1975. Nevertheless, they have over the considerable period of time since they were enunciated, become a well accepted guideline in this jurisdiction - a guideline the use of which assists in the achievement of the important goal of consistency within the jurisdiction. "
In SMB & MFB (2006) FamCA 46 the Full Court, comprising Bryant C J, Kay & Warnick JJ, held at [71]-[72]:
In the present case, no finding was made by the Trial Judge that the Wife had either embarked on a course of conduct designed to minimise the value of the matrimonial assets, or that her expenditure was reckless, wanton or negligent.
Thus, we think that there is a fundamental flaw in the pool created by the Trial Judge which included a notional addback of the monies that the Wife had received on account during the hearing. Absent any negative finding about the Wife’s expenditure which she had detailed in her Affidavit and which she asserted to be her reasonable annual expenses, we cannot see any basis upon which His Honour ought reasonably to have added back the sum of $102,500.00 to the asset pool.’
In Cerini [1998] FamCA 143 the Full Court, comprising Nicholson CJ, Ellis and Kay JJ observed that it will be “the exception rather than the rule” that a direct dollar adjustment equivalent to the amount of the alleged dissipation of the pool is made to the otherwise entitlement of a party.’ In Bevan & Bevan (2013) FLC 93-545 the Full Court comprising Bryant CJ, Finn and Thackray JJ said the following about add backs at [79]:
We observe that “notional property”, which is sometimes “added back” to a list of assets to account for the unilateral disposal of assets, is unlikely to constitute “property of the parties to the marriage or either of them,” and thus is not amenable to alteration under s 79. It is important to deal with such disposals carefully, recognising the assets no longer exist, but that the disposal of them forms part of the history of the marriage – and potentially an important part. As the question does not arise here, we need say nothing more on this topic, save to note that s 79(4) and in particular s 75(2)(o) gives ample scope to ensure a just and equitable outcome when dealing with the unilateral disposal of property” things.
The wife seeks that the following monies be added back against the husband:
(a)$2,710,587 legal fees (Exhibit “H27”);
(b)$146,941 monies held by Pullos Lawyers on account of anticipated legal fees (Exhibit “H26”);
(c)$168,601 legal fees paid to J Lawyers allegedly on behalf the husband’s father; and
(d)$100,000 contribution required to have EE Company participate in the proceedings.
I accept that there is no evidence in relation to any of the above legal fees being repayable by the husband. To say, as Mr DD does, that the husband has “borrowed” or “drawn funds” without evidence of a corresponding and enforceable liability to repay amounts to nothing more than saying the husband accesses funds. There is merit in the wife’s submission that, the monies paid for the Supreme Court proceedings and for EE Company’s participation were not only wasteful but arguably in pursuance of a fraud to defeat her interests in these proceedings. I am satisfied that the above sums (a) to (d) should be added back against the husband.
Paragraph [197] of the husband’s final submissions refers to s75(2)(o) and states:
The husband has made or caused to be made the substantial payments referred to in Exhibit H19. As a result of orders and particularly the order of 5 October 2015, made by Judge Hartnett, in circumstances where the husband’s Affidavit was not filed, the husband was obliged to meet commitments which fluctuated from time to time but which were up to $140,000 per annum.
However, his submissions do not articulate how those facts are relevant to s75(2) or indicate why or how such matters should be taken into account.
The husband seeks that $5,900 which he paid for D’s braces should be added back against the wife but I see no basis for doing so.
In the husband’s statement of assets (page 54) he seeks that funds paid to the wife by way of part property settlements monies ought to be added back against the wife in the sum of $415,000. It is conceded that the wife applied $410,000 to payment of legal expenses and, it follows, that amount of $410,000 should be added back against the wife.
Legal representation
The husband asserts that the wife’s solicitors have acted in an adversarial manner with the effect of prolonging the proceedings and causing him to incur of significant legal fees. By way of example the husband refers to a letter dated 5 August 2015 sent by Lander & Rogers annexed at [43] of the husband’s 3 February 2018 affidavit. The husband refers to four pieces of correspondence from the wife’s solicitors to assert that the wife’s solicitors have corresponded in an “inflammatory, inaccurate and accusatory” way. First, is a letter from the wife’s solicitors dated 25 May 2016 annexed at [45] of the husband’s February 2018 affidavit. Second, a letter of instruction from the wife’s solicitors to Mr EM dated 31 March 2016 extracted at [46] of the husband’s February 2018 affidavit. Third, a letter of instruction from the wife’s solicitors to Mr EM dated 18 October 2016 and extracted at [47]. Fourth, a letter from the wife’s solicitors to Mr EM dated 24 July 2017 extracted at [48] of the husband’s 9 February 2018 affidavit. I have perused the correspondence and do not find them to be inflammatory.
CONCLUSION ON ADJUSTMENT OR MATTERS UNDER S75(2)
All of the factors to which I have referred favour an adjustment to the wife and in that respect, I would allow the wife a further 10%. This brings her entitlement to an alteration of property interests to 60% of legal and equitable property interests which I have quantified only as to the part that is identifiable. Valuable assets including the totality of the Fowles Family Trust and the husband’s resource in DD Trust 2003 have not been attributed a value.
In money terms the allowance under s75(2) is $690,084 which brings the wife’s entitlement in money terms to $4,140,504 and the husband’s entitlement to $2,760,336.
IS THE ALTERATION JUST AND EQUITABLE AND OTHERWISE APPROPRIATE?
The wife will retain the following which have a total value of $4,140,504 comprised of:-
(a)The X Street Apartment at $2,375,000
(b)FJ Finance portfolio $43,290;
(c)Art collection at $6,650;
(d)Jewellery at $14,750;
(e)Wife’s household contents $7,345;
(f)Wife’s Motor Vehicle 3 at $20,350;
(g)Club membership at $7,000 ;
(h)Motor Vehicle 5 at $1,000;
(i)Add back partial property payments to wife applied to legal fees at $415,000; and
(j)Lander & Rogers monies in trust at $8,270;
(k)Superannuation with Superannuation Fund 1 $1,618; and
(l)Payment from husband to wife $1,240,231.
The husband retains the following:-
(a)Westpac Bank ($453,452);
(b)T Inc at $1,492,535;
(c)The loss of L Pty Ltd of ($244,427);
(d)Fowles Family Trust (value not known);
(e)DD Family trust (value not known) ;
(f)Husband’s household contents $2,800;
(g)Husband’s Motor Vehicle 2 at $40,000 ;
(h)Motor Vehicle 4 at $1,500;
(i)Collectibles at $1060;
(j)Add back legal fees paid by husband in these proceedings at $2,710,587;
(k)Superannuation Fund 2 of $34,422;
(l)Add back legal fees for Supreme Court proceedings at $168,601; and
(m)Pullos Lawyers monies in trust at $146,941;
(n)Add back for EE Company payment at $100,000; and
(o)Payment to the wife to effect a 60/40 division is ($1,240,231).
From the wife’s entitlement, she has very significant legal fees to pay estimated at $1,806,233 to $1,936,233. Her inheritance from her mother will go towards payment of her costs pursuant to the charge that they have from the wife.
SPOUSAL MAINTENANCE
Husband’s application to discharge spousal maintenance obligations
As set out above at [51] Hartnett J ordered, inter alia, that the husband provide maintenance for the wife of $800 per week and other payments.
On 19 May 2017 Hartnett J ordered that the husband pay $16,000, to be categorised as a part payment of arrears of spousal maintenance. The wife in her affidavit of 30 January 2018 deposes that the husband was in arrears of outstanding interim spousal maintenance in the amount of $32,000. On 8 November 2017 I made orders providing that the husband pay $22,400 to the wife to be characterised by the trial judge. I am satisfied that the $22,400 was used by the wife for day-to-day expenses, as opposed to legal fees, and is properly characterised as spousal maintenance.
The husband opposes any order for spousal maintenance and seeks an order discharging his obligation imposed by an order of the court.
On 17 May 2017 the husband filed an Amended Response to an Application in a Case seeking, inter alia, a variation and discharge of paragraph 2 and 3 of the Orders made by Hartnett J. The husband’s application was returnable on 19 May 2017. On 19 May 2017 the matter was transferred to Division 1 and on 6 September 2017 the husband’s application was further adjourned to 8 November 2017. On 8 November 2017 the matter was further adjourned to 18 December 2017. On 18 December 2017 I made an order adjourning all interim applications, including the husband’s application filed 17 May 2017, to the final hearing scheduled to commence on 19 March 2018. On 17 June 2019 the husband filed an Application in a Case seeking, inter alia, a discharge of paragraph 2 of the orders made 5 October 2015. The husband in his affidavit filed 16 February 2018 deposed that the Orders made in 2015 by Harnett J were “made in the absence of her Honour having the benefit of any proper financial documents to enable her to make an informed decision about an appropriate level of support. This was notwithstanding I had prepared a detailed financial analysis and affidavit, my previous lawyer failed to file that material.” The husband’s application for discharge of the orders made by Hartnett J has not been heard or determined.
On 5 July 2018 I ordered, by consent, that the husband pay to the wife:-
the sum of $2,200 per calendar month (in advance) commencing on 11 July 2018 such monies to be deposited in the bank account of the wife… and each party be at liberty to argue for the characterisation of such payments at the final hearing as either spousal maintenance or periodic child support or arrears of either of those;
To the extent that it is submitted by the wife that the $2200 per calendar month was to be in addition to the spousal maintenance of $800 per month, that is incorrect. The $2200 was to incorporate spousal maintenance. It was not intended to include school fees for D which were to be met separately by the husband.
At [212(f)-(g)] and [213] of his Amended written submissions the husband submits that:-
the orders made by your Honour on 5 July 2018 implicitly vary the order for spousal maintenance made by Judge Hartnett on 5 October 2015 and your Honour did not express that the sum of $2,200 per calendar month to be in addition to the sum of $800 per week with respect to spousal maintenance nor was the sum of $2,200 per calendar month or part thereof in addition to the husband’s obligation to pay [D’s] school fees at [M School] expressed to be by way of departure order from the then current child support assessment;
it is respectfully submitted that your Honour’s order that the husband pay the sum of $2,200 per calendar month is the only operative order for spousal maintenance as and from 5 July 2018 further that the same order does not oblige the husband to pay child support plus the substantial sums in the payment of private school fees in addition to the relevant child support assessment. It is respectfully submitted that the categorization of the sum of $2,200 per calendar month should be as sought by the husband.
The wife has sought arrears of spousal maintenance, such arrears to be calculated from the date of the order of Judge Hartnett. Further, notwithstanding the husband’s payment of child support pursuant to the child Support Assessment, save for arrears in the approximate sum of $31,000, should be paid in addition to his obligation to pay school fees and medical, hospital, dental and/or pharmaceutical and/or treatment costs, not covered by health insurance. The husband’s obligation to pay school fees and the medical, hospital and dental expenses terminated upon the issue of the Child Support Assessment on 13 October 2015 and was not revived by way of court order until your Honour’s order of 5 July 2018. We ask your Honour to note that arrears of child support as claimed by the Wife have since been paid, see paragraphs 31 to 42 of the reasons for decision of Justice Williams in [Fowles & Fowles] (No. 2) [2021] FedCFamC1F 209.
The analysis by the husband’s practitioners in relation to the husband’s liability under Hartnett J’s orders is correct. As to a characterisation of the $2,200 per month, the husband seeks that the amount be attributed equally with the effect that he was required to pay $1,100 per month for the maintenance of the wife and the support of D. The wife seeks that the sum of $2,200 be characterised as spousal maintenance on the basis that the husband was required to make other payments directed to D’s support including school fees. I am prepared to characterise the whole of the $2,200 per month as support for the wife. It is a modest amount in the circumstances of the case. It is only $50 less per month than what the husband choses to pay per week for a house in Suburb EV which is well in excess of his reasonable needs. Prior to separation, the wife’s household allowance (salary from L Pty Ltd) was $3,000 per month exclusive of other family expenses such as the commercial mortgage, rates and school fees.
I accept the calculation of arrears set out at paragraphs 290 and 291 of the wife’s submissions at $94,791 up to 19 August 2022.
For reasons that I have already stated, I have found that the husband has failed in his duty to make full and frank disclosure of his financial circumstances. It is apparent that he has access to funds when it suits him to have access to funds. Examples are his legal costs of $2.7 million, the costs he paid for the Supreme Court proceeding and for EE Company’s participation none of which can be sourced or was explained by any transparent, accountable or verifiable evidence. Throughout the proceedings the husband has continued to draw large sums of money.
I am satisfied that the wife had a need for spousal maintenance. I am satisfied that the husband’s arrears are significant.
It would not be proper to discharge Hartnett J’s order of 2015 or my own order. I dismiss the husband’s application for a discharge of his spousal maintenance obligations. The arrears owing under the orders should be paid by the husband. Penalty interest should accrue after the expiration of 30 days on such amount of arrears of maintenance as remains outstanding.
Lump sum spousal maintenance
Going forward, the wife seeks $200,000 lump sum spousal maintenance.
I take into account the above matters relevant to s 75(2) save that for the purpose of the wife’s maintenance claim. I disregard the income tested pension from the government. I have regard to the wife’s entitlement pursuant to my decision for an alteration of property interests. An entitlement of 60% would result in the wife receiving the X Street Apartment unencumbered but with a shortfall for payment of her legal costs of about $755,000 less whatever she receives from her mother’s estate. She will not be able to retain the X Street Apartment. The unencumbered property is worth $2,375,000 and I am not satisfied that the wife can demonstrate a need for spousal maintenance if she has that amount of capital.
Pending full compliance by the husband with this Order, the wife is in a parlous state. She resides in the X Street Apartment, subject to a mortgage which she cannot service and owing approximately $1,900,000 in legal costs subject to whatever she receives from her mother’s estate. I am satisfied that the husband is reasonably able to provide maintenance on the basis that, throughout these proceedings, he has accessed funds when he has wanted funds. I find that the wife is unable to support herself adequately. She is not employable. I am satisfied that pending compliance by the husband with this Order, it is necessary and proper for the wife’s periodic spousal maintenance order to continue. For the avoidance of doubt, compliance with the order includes compliance with the orders for payment of arrears of spousal maintenance and periodic spousal maintenance.
I will dismiss the wife’s claim for lump sum spousal maintenance.
CHILD SUPPORT
Each party refers to seeking relief in relation to child support in their submissions. However, neither direct the court to the orders they seek, the evidence they rely upon and the relevant law. I am satisfied that the court would have jurisdiction to deal with a child support application given the other proceedings already before the court are now determined but no effort has been made whatsoever to run either parties case in the terms of what would be necessary to depart from an administrative assessment of child support or any characterisation of the order made for $2,200 per week. I will therefore dismiss each parties’ application in that regard.
COSTS TO DW LAWWYERS PURSUANT TO ORDER OF 31 AUGUST 2021
On 31 August 2021, day 35 of the final hearing, Mr Puckey KC appeared on behalf of the husband’s former solicitors, DW Lawyers seeking leave to intervene to be relieved from the requirement pursuant to paragraph 7 of the Orders made 5 July 2018 that 30 cents of every 1 dollar paid to the husband’s solicitors be paid to the wife’s solicitors. DW Lawyers filed a notice of ceasing to act on 2 February 2021. I permitted DW Lawyers leave to intervene and heard submission from counsel. I made orders that:-
1. [DW Lawyers] be relieved of any obligation pursuant to paragraph 7 of the Orders made by this Honourable Court on 5 July 2018.
2. The sum of $81,475.30 be deducted from any fruits of this litigation payable to [Mr Fowles] and paid to [DW Lawyers’] Trust account to be held pending determination by the Cost Court of any dispute as to the amount payable to [DW Lawyers].
Counsel for the wife submitted that the 30 cents in the dollar order remain in place. The order was neither consented to nor opposed by the husband’s counsel.
I ordered:
12. There be leave to the intervener, [DW Lawyers], to make an oral application for an order that Lander & Rogers pay $81,000 from the funds it holds on trust pursuant to paragraph 7 of Order made on 5 July 2018, such monies to be held pending determination by the Cost Court of any dispute between the husband and [DW Lawyers] as to the amount payable to [DW Lawyers].
13. The oral application of the intervener be and is hereby dismissed.
The monies held by the wife’s practitioners should be applied to the purpose for which they were expressed to be ordered or pursuant the further order of the court. In the circumstances of this case it would not be appropriate to prioritise the husband’s former practitioners over the wife.
RESERVED COSTS
The wife filed an Application in a Case on 9 July 2021 (sealed on 29 July 2021) seeking the husband pay her costs of and incidental to the husband’s unsuccessful recusal application. The wife seeks costs on an indemnity basis in the sum of $48,575. Alternatively, the wife seeks costs fixed at $47,540.63.
On 5 October 2022 the husband filed an Application in a Proceeding seeking that the wife pay his costs of and incidental to the written submissions filed by the wife on 1 October 2021 in respect of the admissibility of documents marked for identification. The husband seeks costs on an indemnity basis in the sum of $74,014. Alternatively, the husband sought costs fixed at $50,291.83.
The matter was listed for mention before me on 11 November 2022 where orders were made as to the filing of submissions as to costs. In respect of the husband’s application in a proceeding sealed 5 October 2022 I reserved the issue of responsibility between the wife and her legal practitioners for payment of such costs. I made further orders that any applicant for costs file and serve written submissions within 28 days.
On 9 December 2022 the wife and husband respectively filed their written submissions as to costs.
By the wife’s written submissions filed 9 December 2022 the wife seeks costs in the sum of $51,575 on an indemnity basis being $48,575 and $3,000 being the estimated cost of preparing the written submissions. Alternatively, the wife sought costs on scale of $27,054.81 to $48,683.45 being $25,911.99 to $47,540.63, $883.60 to prepare the written submissions and $259.22 being the scale costs of a senior lawyer settling the submissions.
The wife’s submissions provide a factual background to the husband’s oral recusal application made on 28 October 2020 after 34 days of hearing. The hearing was, then, anticipated to conclude on 30 October 2020. The further hearing dates on 29 and 30 October 2020 were vacated pending the outcome of the husband’s oral recusal application. The husband filed his written submissions in support of his recusal application on 29 October 2020. The thrust of the husband’s submissions was that I had “addressed the husband and dealt with him and his liberties in such a way as to cause a fair-minded observer to have the relevant apprehension”. The wife filed her submissions in reply on 9 November 2020. On 12 November 2020 the husband filed his reply to the wife’s responding material. On 9 June 2021 I delivered my reasons for decision dismissing the husband’s recusal application with the effect that I remained seized of the matter for final determination. My reasons for decision were published in case neutral citation [2021] FamCA 368 and are incorporated into these reasons,
The court’s power in relation to costs is set out section 117 of the Act. The starting point is that each party ought pay their own costs unless there are circumstances by which I am satisfied that there should be an order for costs, that is, that one pay the costs of another.
The wife seeks costs in circumstances where she asserts the husband’s recusal application had no prospect of success and was brought in an attempt to prolong and frustrate the proceedings having regard to the time of the husband’s application. I am satisfied that there are circumstances which justify an order for costs,
The matters which I am required to take into account in considering what, if any, cost order ought be made are contained in s117(3) in so far as they are relevant and give primacy to the financial situations of both parties.
The first relevant factor submitted on behalf of the wife is the financial circumstances of the parties (s117(2A)(a)). The wife submits that the husband has financial resources available to him which vastly exceeds that of the wife. In particular, the wife refers to the husband’s payment of legal costs at $2.7 million. That is, in comparison to the wife who has been unable to meet her legal expenses and has relied on payments by the husband. The wife is in receipt of government income tested pension and spousal maintenance noting that the husband is in arrears of spousal maintenance.
The second relevant factor submitted on behalf of the wife is the conduct of the parties in relation to the proceedings (s117(2A)(c)). The wife submits that the husband ought to have known his recusal application had limited prospect of success and that the application, improperly brought on the 34th day of the hearing, would cause significant delays in the proceedings. The wife submits that the husband’s conduct was “reflective of conduct adopted by the Husband in these proceedings, in which he has appeared to obstruct, frustrate and delay the orderly conduct of this matter and the Wife’s ability to prosecute her case.”
The third relevant factor submitted on behalf of the wife was whether any party to the proceedings has been wholly, unsuccessful in the proceedings (s 117(2A)(e)). The wife submits that the husband’s application was wholly unsuccessful considering that save for one allegation, none of the husband’s contentions were made out. That is correct.
The fourth relevant factor is a consideration of any other matters as the courts considers relevant (s 117(2A)(g)). The wife submits that it is just for the wife to receive an order for costs having regard to the nature and time of the husband’s application, the fact it was wholly unsuccessful and the alleged attempt to frustrate proceedings. That is a restatement of earlier factors.
When considering an application for costs to be assessed on an indemnity basis, I am guided by principles emanating from the following relevant authorities, which were conveniently summarised in Muldoon & Carlyle (2012) FLC 93-513, where the Full Court at [115] and [116] said;
It is beyond doubt that in order to justify an award of indemnity costs, it must be demonstrated that there are exceptional circumstances, such that the usual order for party-party costs should be departed from (Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FCR 225; Kohan and Kohan (1993) FLC ¶92-340; Munday v Bowman (1997) FLC ¶92-784; Yunghanns & Ors v Yunghanns & Ors and Yunghanns (2000) FLC ¶93-029; Limousin & Limousin (Costs) (2007) 38 Fam LR 478; Fennessy & Gregorian (2009) FLC ¶93-399; D & D (Costs) (No 2) (2010) FLC ¶93-435, Stephens v Stephens and Anor (2010) 44 Fam LR 117). As was said by the Full Court in Stephens (at [67]):
An order for costs is made to compensate a party against expense incurred in litigation and is not punitive in nature. Costs are not a penalty or damages...
In support of the application for indemnity costs, counsel pointed only to the fact that it was always apparent there was no merit in the appeal. This is in our view not an exceptional circumstance as would justify an order for indemnity costs.
Similar sentiments were echoed by the Full Court when it allowed an appeal against the indemnity costs order made by Cronin J in earlier proceedings between the husband and the wife in this case. That decision is reported, in anonymised form, as Prantage & Prantage (2013) FLC 93-544. There the Full Court emphasised that an indemnity costs order is an exception rather than the norm. However, the Full Court’s reasoning in Prantage does not preclude the possibility of an order being made on an indemnity basis, in an appropriate case.
The wife submits at [42] of her written submissions dated 9 December 2022 that:
The Wife contends that it is open for the Court to presume the Husband had an ulterior motive of delaying the resolution of the matter when he made his oral recusal application. The Husband must have well known the hardship to be caused to the Wife in making his oral recusal application by reason of her difficult financial circumstances and the unduly delaying of the trial in circumstances where he made a baseless application.
By the husband’s submissions filed 9 December 2022 he seeks costs as set out in his Application in a Case filed 5 October 2022. The husband relies on the reasons for judgment published 30 May 2022 as the factual basis behind the wife’s application to tender 54 documents which had been admitted subject to identification. The husband asserts that the wife was wholly unsuccessful in her application to tender the documents. The husband submits that the wife’s application was deficient in so far as they failed to establish matters relating to relevance and provenance as far back as day 12 of the trial with their unsuccessful attempt to tender Exhibit “W47STI”. The husband submits that the circumstances justify an order for costs on an indemnity basis on the following basis:-
Here there is extraordinary circumstance that the application was made on the reopening in reliance upon evidence that suffered from the same deficiencies as had confronted earlier attempts to tender some of the documents. Notwithstanding the earlier ruling the wife pressed on with her application founded upon multiple misconceptions of established legal principles. That she should have done so in the face of what had gone on before during the course of this trial could only be explained by wilful disregard for known facts and established principle.
On 3 January 2023 the husband filed his submissions in reply to the wife’s submissions as to costs. The husband opposes any order for costs on an indemnity basis as the circumstances of the case are not special or unusual to justify a departure from the ordinary rule of party and party costs and the wife failed to provide the husband with notice she would be seeking an indemnity costs order.
The husband submits that in the event the wife is successful in establishing a departure from the ordinary course that costs be awarded on scale. Further, the husband submits that the costs sought on scale are unreasonable and not reflective of the fees reasonably recoverable pursuant to the scale and instead seeks that costs be fixed at less than $8,220.97.
On 3 January 2023 the wife filed her reply to the husband’s Application in a Case of 5 October 2022 and her response to the cost submissions filed by the husband on 9 December 2022. I have regard to those submissions.
Both applications for costs are sound. Neither set of circumstances warrant an order for indemnity costs. Having determined the substantive issues, I am very familiar with the ambit of each claim, why it failed and the amount of work involved. The wife’s response to the husband’s recusal application was significantly more work than the husband’s response to the wife’s application to tender documents.
It is unnecessary and a further waste of resources to require each party to have their costs assessed. I will set the costs. The costs will be in the sum of $40,000 for the wife’s costs payable by the husband and $20,000 for the costs payable by the husband to the wife. One can be off set against the other which result in the husband having to pay the wife $20,000 and I will order accordingly. Earlier in this decision I indicated that the amount of $13,750 would be payable by the wife to the husband in relation to valuation fees. That $13,750 can be offset against the $20,000 so the husband only owes the wife $6,250.
CONCLUSION
This case was made infinitely more complicated than it needed to be by the husband’s resolute financial non-disclosure.
I made these orders for the above reasons.
I certify that the preceding five hundred and twelve (512) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Bennett. Legal Associate:
Dated: 6 October 2023
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