Greyson & Maher
[2022] FedCFamC1F 928
Federal Circuit and Family Court of Australia
(DIVISION 1)
Greyson & Maher [2022] FedCFamC1F 928
File number: MLC 14284 of 2020 Judgment of: MCNAB J Date of judgment: 1 December 2022 Catchwords: FAMILY LAW – PROPERTY – De Facto Relationship of 13 years – Where the parties kept separate property other than the purchase of a house which was funded solely by the applicant – Where the parties spent approximately 4-6 month together each year - Where the applicant lived and worked overseas – Where there are effectively two pools of assets Legislation: Family Law Act 1975 (Cth) s 90SF(3), 90SM
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 6.06(3)
Cases cited: Calverley v Green (1984) 155 CLR 242
GBT & BJT [2005] FamCA 683
Horrigan & Horrigan [2020] FamCAFC 25
McMahon and McMahon (1995) FLC 92-606
Norbis v Norbis [1986] HCA 17
Pierce v Pierce (1999) FLC 92-844
Stanford & Stanford(2012) 247 CLR 108.
Van Der Linden v Kordell [2010] FamCAFC 157
Division: Division 1 First Instance Number of paragraphs: 108 Date of hearing: 27-28 October Place: Melbourne Counsel for the Applicant: Mr Puckey KC Solicitor for the Applicant: Taussig Cherrie Fildes Counsel for the Respondent: Dr Matta Solicitor for the Respondent: Sage Family Lawyers
Table of Corrections 6 February 2023 In paragraph 105, “may” has been replaced with “will”, and “of expected” has been replaced with “greater than the”. ORDERS
MLC 14284 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR GREYSON
Applicant
AND: MS MAHER
Respondent
order made by:
MCNAB J
DATE OF ORDER:
1 DECEMBER 2022
THE COURT ORDERS THAT:
1.For the purpose of these orders:
(a)“Act” means the Family Law Act 1975 (Cth).
(b)“Taxation Payable” means unpaid present or future, federal, state, local or foreign taxes, levies, imposts, deductions, charges, withholdings and duties in any jurisdiction in Australia or elsewhere, whether direct or indirect and whether accruing before or after the date of these orders including but not limited to any income tax, land tax, sales tax, payroll tax, fringe benefits tax, PAYG withholding liabilities, withholding tax, family trust distribution tax, customs duties, excise duties, council rates, franking deficits tax, penalty tax, stamp duty, GST, increase in GST net amount, debits tax, financial institutions duty, gift taxes or duties, death or estate taxes or duties, municipal rates, state taxes, property taxes or any other taxes or duties levied or imposed by any person, entity, agency or body authorised by law to impose, collect or otherwise administer any tax (including fines, additional tax, interest, other statutory charges or penalties).
(c)“B Street” means the real property situate at and known as B Street, Suburb C in the State of Victoria being the whole of the land more particularly described in certificate of title volume … folio … of which the respondent is the registered proprietor.
B Street
2.The respondent have the option to acquire the applicant’s one half interest in B Street by notifying the applicant of her intention to do so within thirty (30) days of these orders (“Option Date”).
3.If the respondent exercises her option to acquire pursuant to the provisions of order 2, the respondent pay or cause to be paid to the applicant the sum of $1,100,000 on or before the expiration of thirty (30) days from the date upon which she exercised the option (“Payment to Applicant”).
4.If the respondent does not exercise the option to acquire B Street pursuant to the provisions of order 2:
(a)within fourteen (14) days of the Option Date, the respondent do all things necessary to facilitate an external and internal inspection of B Street by the applicant and his authorised representatives at such date and time as elected by the applicant (“Inspection”), with notice of same to be provided to the respondent 4 days prior to the Inspection.
(b)within sixty (60) days of the Option Date, the applicant have the option to acquire the respondent’s one half interest in B Street by notifying the respondent of his intention to do so (“Second Option Date”).
5.If the applicant exercises his option to acquire B Street pursuant to the provisions of order 4.2, the applicant pay or cause to be paid to the respondent the sum of $1,100,000 on or before the expiration of thirty (30) days from the date upon which he exercised the option (“Payment to Respondent”).
6.Contemporaneously with receipt of the Payment to Respondent, the respondent do all things necessary and sign all such documents as the applicant shall require to:
(a)transfer, at the applicant’s expense, all her right, title and interest in B Street to the applicant;
(b)assign to the applicant all utility accounts;
(c)vacate B Street leaving same in its current condition removing only those chattels to which she is entitled pursuant to these orders and excluding those chattels to be returned to the applicant pursuant to the provisions of order 13 hereof; and
(d)deliver to the applicant all keys, security codes and devices pertaining to B Street.
7.There be an adjustment of outgoings for B Street between the parties as at the date of the Payment to Applicant or the Payment to Respondent, whichever is applicable, and the payment be increased or decreased in accordance with, and to the extent of, any such required adjustments.
8.If:
(a)the respondent fails to comply with her obligations pursuant to the provisions of order 3 hereof; or
(b)the applicant fails to comply with his obligations pursuant to the provisions of 5 hereof; or
(c)neither party seeks to exercise an option to acquire B Street pursuant to the provisions of these orders,
within seventy five (75) days, the respondent do all things necessary and sign all such documents as may be required to sell B Street (“B Street Sale”) on the open market on such terms and conditions as agreed between the parties and in default of agreement, the following shall pertain:
(i)the selling agent be selected by the respondent from three agents nominated by the applicant;
(ii)the respondent authorise each of the selling agent and the conveyancer to communicate with the applicant regarding all aspects of the B Street Sale and conveyance and provide copies of all correspondence regarding same to the applicant;
(iii)the method of sale be as recommended by the selling agent;
(iv)the parties follow all reasonable recommendations of the selling agent with respect to works to be undertaken to prepare and present B Street for sale, with the cost of any such works to be shared equally between the parties, but paid for at first instance by the applicant;
(v)the sale price be as recommended by the selling agent save that it shall not be less than the sum of two million, two hundred thousand dollars ($2,200,000);
(vi)the contract be an unconditional cash contract with a settlement period of no more than sixty (60) days duration;
(vii)if the parties are unable to agree as to the appointment of a lawyer to act in relation to the sale, the applicant nominate three lawyers and the respondent select one;
(viii)if the parties are unable to agree upon any other term or condition of the sale, each party have liberty to apply to this Honourable Court in respect of same.
9.Subject to the respondent’s compliance with her obligations in relation to the B Street Sale pursuant to the provisions of these orders, the applicant withdraw the caveat lodged on his behalf on title to B Street contemporaneously with the settlement of the sale.
10.Upon settlement of the B Street Sale the proceeds of sale be disbursed in the following manner and priority:
(a)first, to pay the selling agent’s commission;
(b)secondly, in adjustment of rates and taxes;
(c)thirdly, in payment of the reasonable costs of the conveyance; and
(d)fourthly and subject to any required adjustment pursuant to the provisions of order 7 hereof:
(i)fifty percentum (50%) of the balance then remaining to the applicant; and
(ii)fifty percentum (50%) of the balance then remaining to the respondent.
11.Pending the Payment to Applicant, or the Payment to Respondent or completion of the B Street Sale, whichever is applicable:
(a)the respondent have the sole right to occupy B Street subject to facilitating the Inspection and to enable the Applicant to attend B Street for the purposes of facilitating the B Street sale as may be required by the selling agent at any auction;
(b)the respondent be liable for, pay as and when the payments fall due, or cause to be paid and indemnify the applicant with respect to all liability for and in relation to B Street including but without limitation all municipal rates, water rates and usage, taxes, building and contents insurance, and all utilities of B Street including but not limited to gas and electricity;
(c)the respondent be, and is hereby restrained by herself, her servants or agents from transferring, selling, disposing of or in any manner alienating or encumbering B Street, or attempting so to do, otherwise than in accordance with the provisions of these orders; and
(d)the parties hold their respective interest in B Street upon trust in such proportions as accord with their entitlement pursuant to the provisions of these orders.
12.Liberty be reserved generally to either party to apply with respect to the terms and conditions of and the execution of the B Street Sale.
Ancillary
13.Within thirty (30) days, the respondent return to the applicant, only if such items are available, the applicant’s items of personalty which remain in B Street and elsewhere as follows:
(a)collection of cookware and the grilling stove top plate;
(b)traditional set of brass pots and pans;
(c)antique painting ;
(d)iron sculpture; and
(e)garden ornaments.
14.Save as otherwise provided in these orders and save for the purpose of enforcement of a party’s obligations under these or any subsequent orders:
(a)each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in the legal or beneficial ownership or possession of that party as at the date of these orders and without limiting the generality thereof;
(i)the applicant retain:
A.the real property situate at and known as D Street, Suburb E, Queensland;
B.monies standing to his credit in bank accounts in Australia and overseas;
C.the two F Finance Portfolios in his name;
D.the G Finance Portfolio in his name;
E.his interest in H Ltd;
F.his interest in J Pty Ltd;
G.Motor Vehicle 1;
H.the items of personalty to be returned to him pursuant to the provisions of order 13; and
I.his furniture and chattels currently in storage at the storage facility at K Street, Suburb L.
(ii)the respondent retain:
A.monies standing to her credit in bank accounts;
B.her interest in the ETF Managed Share Portfolio;
C.motor vehicles registered in her name;
D.her interest in the business trading as M Company and she be solely liable for and indemnify and keep indemnified the applicant in relation to any and all taxation and other liabilities of the business;
E.her interest in Superannuation Fund 1; and
F.furniture and chattels owned by her currently at B Street.
(b)each party forego any claims they may have to any superannuation, long service leave, redundancy, retirement, retrenchment, and like benefits belonging to, or earned by, the other;
(c)all insurance policies remain the sole property of the owner named thereon; and
(d)each party be solely liable for and indemnify the other against:
(i)any liability encumbering any items of property to which that party is entitled pursuant to these orders; or
(ii)any liability otherwise in that party’s name, including but not limited to Taxation Payable, credit cards, loans, lease agreements and charitable commitments.
15.The issue of costs be reserved and determined on the papers in chambers in accordance with orders made on 28 November 2022.
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 the pseudonym Greyson & Maher has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
Amended pursuant to r 10.14(b) of the Federal Circuit and Family Court of Australia (Division 1) Rules 2021 (Cth) on 6 February 2023
McNab J:
This proceeding comes before the court by way of an Initiating Application filed on 23 December 2020 by the applicant de facto husband, Mr Greyson, born 1956. The respondent de facto wife, Ms Maher, born 1962, filed a response on 16 March 2021. This proceeding deals with the property interests of the parties pursuant to section 90SM of the Family Law Act 1975 (Cth) (“the Act”).
The parties had a relationship that spanned 13 years. A feature of the relationship is that the parties spent most of each year living apart, with the applicant living in Country N or the United Kingdom and the respondent living in Australia. They kept their finances separate and the vast majority of financial contributions were made by the applicant, including the purchase of a house in B Street, Suburb C in 2012 in the respondent’s name but paid for by the applicant. The purchase price for the house was just over $1,500,000 inclusive of stamp duty and interest.
The parties commenced their relationship in 2006, were engaged in 2012, and separated on 25 January 2019. There are no children of this relationship.
This matter was listed for final hearing on 27 October 2022 and ran for two days. The applicant was represented by Mr Puckey KC of counsel, and the respondent was represented by Dr Matta of counsel. Both parties appeared in person, and the respondent was accompanied by her eldest son.
When the Initiating Application and the Response were filed, and indeed until very shortly prior to the final hearing, the respondent had been seeking no adjustment of property interests. That would have resulted in her retaining the B Street property, purchased in the respondent’s name in December 2012 with funds supplied by the applicant.
Shortly prior to hearing, the respondent altered her position by seeking orders for 38% of the whole asset pool including the applicant’s shareholding in the H Ltd, a company listed on the City O Stock Exchange. The respondent contends that those shares are worth $1.8 million. The applicant submits that those shares have not vested in him, and the vast majority are subject to a lock mechanism which prevents their present sale or the small number of shares that are not the subject of the lock have not been allocated to him. This is dealt with in greater detail below. The respondent’s proposal was that the distribution of 38% be by way of her retaining the B Street property (with an agreed value of $2.2 million) and a cash payment of approximately $700,000. The applicant’s position remained unchanged – he sought a 50% interest in the B Street property, with no adjustment made to the remainder of the asset pool. He submits that this amounts to 75% of the property pool if a global approach is taken.
The applicant sought to rely on the following:
(1)Amended Initiating Application 28 February 2022
(2)Financial Statement 8 September 2022
(3)Trial Affidavit of Mr Greyson 8 September 2022
(4)Reply Affidavit of Mr Greyson 13 October 2022
(5)Affidavit of Mr P 13 October 2022
(6)Affidavit of Mr Q 13 October 2022
The respondent sought to rely on the following:
(1)Response to Initiating Application Respondent 16 March 2021
(2)Affidavit of Ms Maher Respondent 29 September 2022
(3)Financial Statement Respondent 29 September 2022
(4)Affidavit of Mr R Respondent 29 September 2022
(5)Affidavit of Mr S Respondent 29 September 2022
(6)Affidavit of Ms T Respondent 29 September 2022
backGround
The applicant is 66 and is a self-employed professional. The respondent is 59, and is a self-employed professional. The parties commenced their relationship in 2006, were engaged in 2012, and separated on a final basis on 25 January 2019. They never lived together on a permanent basis as the applicant’s primary residence was overseas. There are no children of this relationship.
Both parties have children from previous marriages. The applicant’s child is currently 36 years old, and the respondent’s children are 29 and 24. At the time of the commencement of the relationship, the respondent’s children were 13 and 8 years old, and lived with the respondent at her residence.
In the lead up to the final hearing, the parties had different positions about the nature and duration of the relationship. The applicant described their relationship as being in two phases, being from 2006-2012, and from 2012-2019. During the first phase, the applicant’s evidence prior to trial was the parties were not in a de facto relationship. He said this remained the case until 2012, at which point they purchased B Street together, got engaged, and he said under cross examination he made a “commitment to spend their lives together”.
However, during opening submissions, both parties conceded that they were in a de facto relationship from 2006 until 2019, being a 13 year relationship. The applicant continued to give oral evidence in terms of the relationship having two “phases”.
The parties gave evidence that they met in 2005 when the applicant was asked to host the respondent, her mother and a friend at his residence in Country N for about 3 nights. They continued to communicate and spent time together when the applicant visited Melbourne in late 2005. The respondent and her children were invited to spend time at the residence in Country N for Christmas in 2005 but that did not eventuate.
In mid-2006, the respondent travelled to City O and assisted in the applicant’s care after he underwent back surgery both in City O and in Country N. At that time, the respondent stayed with the applicant in mid-2006. The respondent then spent from late 2006 to early 2007 with the applicant with her children joining her in late 2006.
The applicant gave evidence that from 2006 to 2012 he was based in Country N, and travelled to Australia to spend time with the respondent. He estimated that he spent approximately four months per year in Australia during this period. His evidence was while he was in Australia, he did not live predominately with the respondent, but that he spent significant time with friends and family, and at a private club. He agreed that he kept some of his property at the respondent’s residence, but said he also had his belongings at friends’ houses and at the club. He emphasised that he also had belongings in Country U, Country N and City O.
The applicant’s evidence about how much time he spent living at places other than the respondent’s house was vague. Plainly he did spend time staying with other friends or venues, however, when considering his evidence, the evidence of the respondent and her son, Mr R, I do find that the applicant used the respondent’s residences as a base when he was in Australia.
The applicant accepted that the respondent would occasionally meet him while travelling. He estimated they would spend approximately 4-6 weeks together outside of Australia each year, primarily at his property in Country N. He gave evidence that this property was looked after by a team of staff. During the periods the respondent stayed in the applicant’s residence, he gave undisputed evidence that she was treated as a guest.
During the period from 2012 to 2019, following the purchase of B Street, the applicant agreed that while he was in Australia for approximately four to five months each year, he would stay predominately with the respondent in B Street. He gave evidence that during this period, his mother’s health was declining and he was frequently required to travel to the United Kingdom to care for her.
From 2012 until 2019, the applicant gave evidence that they would spend approximately six to eight weeks each year in his property in Country N.
While he was spending time with the respondent in Australia, he agreed that the respondent would cook for him, and they would share responsibility for cleaning and housework. He noted that there was a cleaner and a gardener who came regularly. He gave oral evidence that when they went out for meals or on other social outings, it was a matter of chance who paid for any expenses, and they more or less shared such expenses equally.
The respondent filed a number of affidavits in support by her friends and her son, and the applicant filed affidavits from his neighbour and a business associate. These largely depose to their opinion and belief of the nature of relationship between the parties. Given the parties conceded that they were in a de facto relationship for 13 years, most of what is set out in these affidavits has less relevance to this proceeding. Certainly from the respondent’s point of view, the time spent and the support provided by the respondent during the time spent together is relevant to the nature of the relationship and the level of support provided. None of these witnesses were called to give evidence, although evidence given by way of affidavit was admitted subject to objections. The court was not required to rule on each objection. None of the evidence given by third parties was decisive of any issue I am required to determine.
There is a dispute regarding the quality of the relationship in the period prior to 2012 with the respondent emphasising that they thought of themselves as a couple and provided support for each other. The applicant sought to underplay the nature of the relationship and the level of support provided by the respondent, tending to stress that they were boyfriend/girlfriend until 2012. As noted above, much of the distinction falls away given the concession that there was a de facto relationship from 2006.
Financial Arrangements
The parties agreed that they each kept their financial affairs entirely separate, but for the purchase of B Street. They each were responsible for their own residence, maintained their own businesses and bank accounts. Neither were signatories of the other’s bank accounts.
The applicant gave evidence that he was largely unaware of the respondent’s financial position, and they did not discuss finances in any great detail. The respondent disagreed, and gave evidence that they spoke about finances frequently; however, she acknowledged that they had no joint property or combined finances other than the B Street property.
Whilst at [23] of her trial affidavit, the respondent gave evidence that “Throughout our relationship, [Mr Greyson] and I intermingled our finances and regularly discussed our financial future. [Mr Greyson] was aware of my financial situation, and I was aware of his,” there was little evidence to support this statement of conclusion.
The respondent gave evidence that the parties spoke about acquiring joint property as early as 2007, and emails were put to the applicant under cross examination evidencing the respondent asking the applicant to invest in a property with her. There was no evidence in these emails of the applicant being willing to invest in a property with her, and he gave evidence under cross examination that the emails were a one-way conversation evidencing the respondent’s desire to acquire joint property, and that he was hesitant to do so at that time. His email response indicates this to be the case. It was conceded by the respondent that nothing came of these emails until the purchase B Street property.
The respondent gave evidence that the parties sought to have Wills drafted in March 2013 following the purchase of B Street, and they each sought legal advice. She gave evidence that the parties engaged a solicitor, Ms V, to prepare these Wills. Annexed to her affidavit is the advice received from Ms V, as follows:
In summary [Ms Maher] you have given [Mr Greyson] a life interest in the [B Street] property (or such other property which is your home at the time of your death) so it or the proceeds of the sale can be used by him until his death at which time the property will pass to [Mr W] and [Mr R] (held on trust until age 30) and to any grandchildren in the event that either of the boys predeceases you. Anything else you own at the date of your death will go to the boys. I haven't included the furniture etc in the life interest but can do so if you wish so that [Mr Greyson] has the use of the furniture, etc.
[Mr Greyson] your assets as divided in the Will go to either [Ms Maher] at first instance and then the boys with the UK assets to go to [Ms X].
The respondent deposes via her trial affidavit that on 18 March 2013, Ms V sent an email addressed to both parties enclosing draft copies of their Wills, with accompanying advice. The applicant signed her Will. The applicant gave evidence at trial that he had never given instructions to the solicitor to prepare a Will for him that reflected those terms.
The respondent gave evidence at [69] of her trial affidavit that the applicant did not sign his Will, and that her attempts to discuss this with him were a “source of conflict”, particularly when he was about to undergo surgery. Under cross examination, the respondent’s evidence was somewhat confusing about whether the Will was a source of conflict, or whether the applicant going into surgery without a Will was a source of conflict. Regardless, in her affidavit, she deposed that the applicant called her “a dollar whore” when she brought up the issue. Plainly, the applicant did not want to sign a Will in the terms proposed and was extremely unhappy about being asked to do so.
Chronology
The following chronology has been prepared based on the parties’ material:
Date Event 1956 Applicant born (aged 66 years). 1962 Respondent born (aged 59 years). 2005 The parties met in Country N while the respondent was travelling. 2006 The parties commence a relationship 2006 The respondent flies to City O and provides care for the applicant following surgery, although the extent of that care was disputed by the applicant. 2006 –2007 The respondent travels to Country N to spend time with the applicant 2007 Applicant comes to Australia to spend time with the respondent 2007 –2008 Respondent travels to Country N to spend time with the applicant 2008 Respondent and Applicant travel to Australia together. The applicant had surgeries in Y Hospital in early 2008 and mid-2008. 2008 Respondent travels to Country N with her sons and stays with the applicant 2008 Applicant and respondent return to Australia 2008 Applicant returned to Europe 2009 Applicant flew to Australia, then the respondent and applicant flew to New Zealand together 2009 Applicant retunes to Country N 2009 Respondent travels to City O, then Country N, to spend time with the Applicant 2009 Wife transfers $100,000 for the purpose of investing in Z Company, being almost a quarter of the assets held in her name at the time. The Husband was listed as having invested a total of $200,000 with Z Company. The Wife’s position is that $100,000 of that investment came from her account. 2010 Applicant travels to Australia 2010 Respondent and her children travel to Country N to spend time with the applicant. This trip involved packing up the applicant’s Country N property in preparation for sale. 2010 –2011 Applicant travels with respondent to Australia. 2011 Applicant returns to Australia 2011 Applicant and respondent travel to City O. Respondent returns to Australia in September 2011. In or around early 2012 Applicant travels to Australia. Unclear when he returned. 2012 Parties travel to Country AA. 2006 to 2013 The parties spent approximately 4-6 months per year together. During the eight months or so that the applicant spent overseas each year between 2006 and 2013, the parties spent approximately four to six weeks together. The parties’ time overseas together was usually spent in Country N or on holidays in the UK, Country BB and elsewhere. Otherwise the applicant stayed in Australia for approximately 4 months of each year. 2012 Husband proposes and they become engaged 2012 Contract signed for purchase of B Street, Suburb C for over $1,500,000. 2013 Applicant deposits $1,589,305 into the Respondent’s bank account, being the total amount required to purchase B Street (purchase price plus stamp duty and purchase costs). 2013 The Husband sells some shares, and gets $2,000,000 from the sale. The Husband uses approximately $1,500,000 of the proceeds to pay for the B Street property. 2013 Settlement of the purchase of B Street and title registered in Respondent’s name. 2013–2019 Applicant spends approximately four to five months of the year in Australia and seven to eight months of the year overseas (working and visiting his elderly mother who lives in the United Kingdom). When he is in Australia, the Applicant lives with the Respondent at B Street. 2013–2018 Applicant deposits amounts totalling $155,000 from overseas accounts into his G Finance Trading Account in Australia, some of which were subsequently transferred to the Respondent and applied towards the expenses and outgoings of B Street as well as general living costs. 2014–2016 Applicant makes additional deposits (of between $25,000 - $44,000 each) totalling $216,000 into the Respondent’s bank account. 2014 Applicant pays school fees of approximately $100,000 for the Respondent’s son, Mr R, to attend CC School. In or around 2017 Applicant begins working on H Ltd 2019 Parties separate. Respondent informs applicant she wishes to terminate the relationship while he is en route to visit his dying mother in the United Kingdom. 2019 Applicant’s mother dies. 2020 Applicant receives an inheritance of nearly GBP 150,000 (equivalent to roughly AUD $250,000), which is deposited into his DD Bank account. 2020 Applicant inherits the F Finance Share Portfolio, then worth GBP 130,000 (equivalent to roughly AUD $235,000, and with a current value of AUD $447,072 at 16 August 2022). 2020 Applicant sells his Country N property. Sale proceeds of circa 570,000 Euros are deposited into his DD Bank account, $980,000 AUD equivalent 2020–2021 The Respondent rents out B Street and receives rental income in in the sum of nearly $90,000 from the property. 2020 Applicant institutes proceedings in Family Court of Australia. 2021 H Ltd lists on the AIM operated by the City O Stock Exchange 2021 Respondent’s mother dies. 2022 Respondent receives an inheritance of approximately $100,000, which she claims to have gifted to each of her sons, Mr W and Mr R ($50,000 each). Respondent also becomes entitled to a one quarter share of her relative Ms EE’s estate which is under the administration of the Public Trustee. 2022 The respondent instructs her solicitors to write to the applicant regarding the H Ltd shares. Issues in dispute
The issues in dispute in this matter are:
(1)Whether it is just and equitable to make any adjustment to the property interests of the parties;
(2)What percentage adjustment is appropriate if it is just and equitable to make an adjustment;
(3)Whether to take a global approach or asset-by-asset approach to the property pool;
(4)Whether the applicant’s founding shareholding in H Ltd form part of the property pool available for distribution and how it should be treated; and
(5)The assessment of contributions by each party, particularly non-financial contributions in circumstances where parties agree they only spent on average 6 months together per year.
In closing submissions, the court asked the parties to put forward alternate positions in the event that the court does not make orders as sought in their case outlines.
The applicant maintained his primary position was to take an asset by asset approach and adjust the parties’ interest in the B Street property, with the parties each retaining 50%. The applicant submitted that he is content for the property to be sold and the proceeds divided, or for either party to buy out the other’s interest and retaining the property.
In the alternative, if the court adopted a global approach, counsel for the applicant submitted that an adjustment of 50% of B Street would amount to the wife retaining 25% of the asset pool, which he submitted is just and equitable in the circumstances. He referred to similar cases including GBT & BJT [2005] FamCA 683 and Horrigan & Horrigan [2020] FamCAFC 25, in which adjustments were in the range of 15-20%. Under this approach, he submitted the locked H Ltd shares should be treated as a financial resource. He submitted given the range of 15-20% has been deemed as appropriate by the court in similar cases, the 25% adjustment sought by the applicant can be considered to have factored in a 5-10% uplift, which should satisfy the court as having appropriately considered the shares as a significant financial resource.
Counsel for the applicant submitted that the presumption of a resulting trust applies to the B Street property per Calverley v Green (1984) 155 CLR 242, which would result in the respondent holding her interest on trust for the applicant according to his contribution to the purchase price. He submitted there is no evidence of a contrary intention to rebut the presumption of a resulting trust, and that the presumption of advancement does not apply to the parties as they are not married. Counsel for the respondent submitted that there is clear contrary evidence that the property was intended as a gift and thus the presumption of a resulting trust is rebutted.
The respondent sought a global approach to the asset pool, which she submitted was necessary in order to take into account her contributions across the 13 year relationship. The respondent’s primary position was an order for her to retain the B Street property, and a cash payment of approximately $700,000, representing 38% of the property pool, including the locked shares, which she submitted should be valued at $1.8 million based on the share price at the trial.
In the alternative, she submitted the court ought not make any adjustment and she should retain her property, including B Street, which is currently in her sole name. She submitted if the latter approach is adopted, the court does not need to have regard to percentage distributions.
The asset pool
B Street has an agreed value of $2.2 million.
If a global approach is adopted, the asset pool is as follows:
Asset Ownership Respondent’s value Applicant’s value B Street, Suburb C, VIC Wife $2,200,000 $2,200,000 D Street, Suburb E, QLD Husband $261,500 $261,500 Westpac Life Account #...60 Wife $130,374 $130,374 Westpac Choice #...69 Wife $4,307 $4,307 Westpac eSaver #...45 Wife $500 $500 Westpac Choice #...48 Wife NOMINAL NOMINAL Westpac Cash Investment #...27 Wife $50 $50 ANZ #...07 Husband $5,098 $5,098 DD Bank (Euro) #...97 Husband $9,977 $9,977 DD Bank (GBP) #...28 Husband $17,925 $17,925 DD Bank (GBP) #...21 Husband $487,402 $487,402 DD Bank (USD) #...79 Husband $15,651 $15,651 FF Bank #…33 Husband $26,835 $26,835 F Finance Portfolio Husband $453,597 $453,597 F Finance Portfolio[1] Husband $1,871,720 $1,871,720 G Finance Portfolio Husband $812,071 $812,071 Respondent’s M Company Wife NIL NIL Motor Vehicle 2 Wife $33,770 UNKNOWN Motor Vehicle 3 Wife $500 UNKNOWN Motor Vehicle 1 Husband E$18,000 E$18,000 H Ltd
AIM share price as at 24 October 2022 “Locked” number of shares heldHusband $1,831,534[2] UNKNOWN EFT fund held with Westpac Wife $89,218 UNKNOWN Estimated tax debt for the FYE 2022 Wife E($60,000) UNKNOWN GG Credit Card #...02 Wife NIL UNKNOWN Westpac Mastercard #...89 Wife ($1,903) UNKNOWN Westpac Earth Black Mastercard #...33 Wife ($2,739) UNKNOWN ANZ Visa Husband UNKNOWN NEGATIVE DD Bank Mastercard Husband UNKNOWN NEGATIVE FF Bank Mastercard Husband UNKNOWN NEGATIVE Superannuation Fund 1 Accumulation Wife $13,760 $13,760 [1] This includes the H Ltd unrestricted shares purchased during an IPO in early 2022 valued at approximately $40,000.
[2] These are the H Ltd shares that have not been unlocked which the respondent asserts the court ought to value at $1.8M, being the 14 million shares at the share price of 13 cents per share at the time of the hearing.
The applicant submitted that if a global approach is adopted by the court, legal fees of approximately $300,000 per party ought to be added back for both parties, together with the respondent’s inheritance of around $100,000. The applicant received inheritances from his mother’s estate in 2020 comprising cash of about $250,000 which he deposited in a DD Bank (UK) account and a share portfolio (which is the F Finance Portfolio with a value as at 16 August 2022 in the sum of AUD $ 447,072). Those moneys are accounted for in the above balance sheet.
The applicant objected to the respondent’s assigned value of the locked H Ltd shares on the grounds that the respondent’s value was based on the share price of ordinary shares, which is irrelevant to determine the value of a special issue of founding shares which are subject to numerous restrictions, which they submit are of a different class to ordinary shares.
THE COURT’S APPROACH TO DE FACTO PROPERTY PROCEEDINGS
Section 90SM(3) and (4) of the Act provide that:
(3)The court must not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court must take into account:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i)to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii) otherwise in relation to any of that last‑mentioned property;
whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i)to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii) otherwise in relation to any of that last‑mentioned property;
whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them;
(c)the contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship and any children of the de facto relationship, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the de facto relationship; and
(e)the matters referred to in subsection 90SF(3) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the de facto relationship or a child of the de facto relationship; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the de facto relationship.
As is the case when considering matrimonial property, when considering orders in relation to de facto property, the court is required to consider:
(1)Whether the parties have separated;
(2)The assets and liabilities of each party;
(3)The contributions of each party;
(4)The future needs of each party taking into account the matters set out in subsection 90SF(3) so far as they are relevant;
(5)Bearing in mind all of the foregoing matters, whether it is just and equitable to make any orders altering the interests of the parties in their property; and
(6)What orders, if any, are just and equitable in all the circumstances of the case (Stanford & Stanford(2012) 247 CLR 108.)
consideration
The Asset Pool
The asset pool is substantially agreed other than the alleged non-disclosure of the applicant’s shares.
The applicant holds 14,400,000 shares in H Ltd, which is a publically listed company in City O. 14,088,723 of these shares were obtained as a result of the applicant being a founder of the company, upon the company listing pursuant to an IPO and commencement of trading on the Alternative Investor Market (AIM), on the City O stock exchange in 2021.
The 14,088,723 founding shares are subject to a Lockin and Orderly Market Deed, which contains certain restrictions, including that:
(1)Each shareholder severally undertakes that they will not directly or indirectly transfer, sell or otherwise dispose of any of their founder shares in H Ltd at any time prior to the first anniversary of the date of their admission of the company;
(2)Subject to restrictions in clause 3, at the end of the first anniversary of admission, each shareholder shall be free to deal with their founder shares from dates as follows:
(a)20% of shares: immediately
(b)20% of shares: 3 months after the end of the first anniversary of admission
(c)30% of shares: 6 months from the end of the first anniversary of admission
(d)All remaining shares: 12 months from the end of the first anniversary of admission.
(3)Each shareholder severally undertakes to the company’s nominated advisor and the joint brokers to consult with them in good faith to ensure that any disposal of shares does not create a disorderly market in the company’s shares and in doing so shall consult with, and have due regard to, the reasonable representations of the advisor and the joint brokers in this regard.
The founders, including the applicant, also entered a Relationship Agreement dated mid-2021, which remains on foot while co-founders collectively hold over 20% of the H Ltd shares (they currently hold 23.97%), stating that they are not to do anything that could unduly influence operation of H Ltd to their own benefit.
The applicant’s evidence was that the shares are locked, and have not been released to him, and he remains unable to deal with them.
The remaining 311,277 shares were purchased subsequently and are not subject to the restrictions of the founding shares.
Further, the applicant disputed that he did not disclose his interest in the locked shares to the respondent, as has been alleged. He referred to correspondence sent by the respondent’s solicitor in June 2021 requesting disclosure of his interest in H Ltd. He responded to this in August 2021, by disclosing that the information regarding the shareholding was publically available, and referring them to the company’s website. The respondent did not respond to this correspondence.
The applicant’s solicitors wrote to the respondent in October 2022 regarding these shares, stating that they had previously assumed that the applicant’s shares were included in his F Finance investment portfolio, which had been disclosed. However, they had since become aware of the fact that this assumption was incorrect and the shares were not included. They said that the shares were of NIL value, and enclosed documents relating to the shares, including:
(1)Lock-In and Orderly Market Deed dated mid-2021;
(2)Relationship Agreement dated mid-2021;
(3)AIM Rules for companies;
(4)Memorandum of Association and Articles of Association of H Ltd;
(5)Notification of Major Holdings dated mid-2022;
(6)Email correspondence between the applicant and the CFO of H Ltd dated mid-2022; and
(7)Email correspondence from Mr HH, Legal Director at JJ Lawyers (the solicitors of H Ltd) dated late 2022.
In cross examination, when asked about his rights to these shares, the applicant submitted it was incorrect to assume there are any existing rights over the 14,088,723 locked shares, as they are unvested and subject to a lock in agreement. Under this agreement, the majority of the shares cannot be dealt with until the end of the lock in period, which is in 2023. When the shares become unlocked, they can only be sold subject to consultation with the H Ltd board, which the applicant submits is equivalent to needing their permission.
Further, with regards to the respondent’s claim that the shares should be valued at $1.8 million, the applicant said there is no evidence of the share price at the future point where the shares become unlocked and able to be sold in a year’s time. He submitted that the result of the respondent seeking a cash payment equating to 38% of the value she seeks to assign to the shares would be unjust because it would result in a substantial cash payment to the wife over an asset acquired post-separation, which may never materialise.
The respondent submitted that the value of $1.8M is based on the ordinary share price at the time of trial, which she argues ought to be accepted given the absence of contrary evidence.
Under cross examination, the applicant was asked if he understood his duty of disclosure, and was taken through his undertaking of disclosure, including r 6.06(3) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Rules”) stating that he must disclose all interests that are vested or contingent. He stated that he had read the Rules, but did not accept that the shares are a vested or contingent asset. The applicant gave evidence that he believed he had fulfilled his duty of disclosure as his solicitors had communicated the existence of the shares to the respondent’s solicitors in June 2021, stating that they were a matter of public record, and referred them to where to find information of the shares.
This letter of June 2021 was put to the respondent, and she denied that this was adequate disclosure, as the letter referred to “H”, and not “H Ltd”, and nowhere in any correspondence did it state that the company had listed. She stated she did not recall receiving the letter, and believed it was possible that her solicitor did not pass this correspondence onto her. The respondent maintained that she was unaware of the existence of the shares until October 2022 when she received further disclosure from the applicant as referred to above.
A letter was put to the applicant dated September 2022 from his solicitors allegedly stating that the disclosure of the shares had been previously overlooked. The applicant clarified that this was a misrepresentation of what the solicitors had meant. He said that his solicitors were referring to the impression they had previously given that the value of the locked shares had been included in the disclosed share portfolio, which they were now stating was incorrect, and the locked shares were in fact not a part of that portfolio.
Further communications relating to the shares were put to the applicant including advice he sought from the solicitor of H Ltd regarding his obligations under his share agreement. The applicant stated he sought this advice as clarification of his obligations and restrictions under the share agreement, including whether he needed permission from the board.
The lock in market deed was put to the applicant, which purports that he holds 14,365,996 shares in his own name, not the company’s, as was his earlier evidence. The applicant stated he believed this was a mistake, as he is not the owner of the shares unless and until they became unlocked and vested to him. Under the lock in deed, 20% of the shares had become unlocked at the time of trial, but the applicant’s evidence was no shares had yet been allocated to his account and none are presently available to be sold. The applicant gave evidence that he has not sold any shares, including the unlocked portion of the shares, and to the contrary, he has since purchased more shares. He was asked whether he had taken any steps to have the unlocked shares vested to him. He stated he had, including speaking to the company secretary to arrange releasing the shares to a company nominated by him, which would be his brokering company. He stated nothing had occurred to vest these shares at the time of trial.
Plainly, the applicant ought to have disclosed the existence of these shares. However, the correspondence sent between solicitors put the respondent on notice of the existence of these shares, and of the fact that the information was publically available. That the information is publically available does not relieve a party from the obligation to make full disclosure. Regardless, the respondent did not seek any order relating to these shares other than to be included as part of a broader asset pool. Further, the respondent gave evidence about the existence of the shares in her trial affidavit, although she may not have been aware that they were not accounted for in the husband’s disclosure documents, particularly the F Finance portfolio.
Counsel for the applicant submitted that given the particular nature of this relationship, the most appropriate means of determining the asset pool and the contributions made is to take an asset by asset approach. It was submitted that this was appropriate given the parties kept their finances separate and both conducted their own businesses, and did not purchase or acquire assets jointly through the course of their relationship.
In closing submissions, counsel for the applicant advised that the B Street property is approximately 30% of the property pool on a global approach. The applicant’s property otherwise amounts to 60% of the pool, and so on their approach, an equal division of B Street would result in the applicant receiving 75% and the respondent 25%.
On the asset by asset approach, counsel for the applicant submit that the proposal of 50% of B Street is a generous offer by the applicant, given his undisputed 100% contributions to the purchase price. This would be a settlement of $1.1 million to the respondent in circumstances where it is undisputed that the applicant paid for the property, paid funds to the respondent to cover any liabilities or expenses associated with the property, and an additional sum for renovations. However, the applicant gave evidence that he is content with this proposal in recognition of the fact that this property is the respondent’s primary residence, and she and her sons lived there and cared for the property while the applicant was absent.
Counsel referred to Norbis v Norbis [1986] HCA 17 and McMahon and McMahon (1995) FLC 92-606, as set out in Van Der Linden v Kordell [2010] FamCAFC 157 which summarise the different approaches, and where each approach is appropriate. In particular, from [110]:
In McMahon and McMahon (1995) FLC 92-606 the Full court (Nicholson CJ, Ellis and Buckley JJ) discussed when an asset by asset approach may be appropriate. At 82,043:
In our view, the particular circumstances of this case made an asset-by-asset approach preferable to a global approach.
The short duration of and the unhappy nature of the marriage, coupled with the parties' strict division of assets and their method of dealing with them lent itself to an asset-by-asset approach, particularly where they had separately identified another group of assets as joint.
We are conscious of the remarks of Mason CJ and Deane J in Norbis v Norbis (1986) FLC 91-712 at p 75,168; (1985-1986) 161 CLR 513 at 523, where their Honours indicated that in most cases the global approach is more convenient.
However, it should be remembered that they stressed that they were not to be understood as denying the legitimacy of the trial Judge's ascertainment in the first instance of the financial contributions of the parties by reference to particular assets.
…
One of the reasons why their Honours expressed a preference for the global approach is because it is natural to assess the contribution by a spouse as a homemaker and parent, either by reference to the whole of the parties' property, or to some part of that property as distinct from individual assets.
However, this is not a case where the homemaker and parent contribution looms large and, having regard to the parties' agreement that it should be regarded as equal for the period of the marriage, this presented no obstacle to the adoption of the asset-by-asset approach in this case.
We consider that this is a case which falls conveniently into the class of cases referred to by Wilson and Dawson JJ in Norbis at FLC pp 75,173–75,174; CLR 532–3, when they said:
'If the parties' interests in specific items of property differ or they have made differing contributions, it may be desirable to proceed upon an item by item basis in the division of property between them. In such a case, justice and equity may best be served by treating the items separately for the purpose of determining the proportions in which they are to be divided, particularly if the overall division is to be effected by the transfer or retention of interests in individual assets, as was convenient in this case.'
In my view, the appropriate course in this case is to assess the asset pool on an asset by asset rather than a global approach. Essentially there are two asset pools being:
(1)The assets held by each party prior to cohabitation and which were then used to acquire future assets which were not comingled; and
(2)The B Street property.
Taking that approach, the only joint asset is the B Street property. Whilst the H Ltd business was being developed during the course of the relationship, the major work done in relation to that business was by the applicant, and the float of the company did not occur until 2021, two years after the conclusion of the relationship.
The parties did not operate any joint bank accounts and the evidence does not support a finding that either party had a detailed knowledge of the others finances. There is no evidence that the applicant had access to or knowledge of the respondent’s financial position.
The relevant assets are the B Street property with an agreed value of $2.2 million, and the value of the H Ltd shares, which are in the nature of a financial resource rather than a presently realisable asset. The H Ltd shares which are unlocked by October 2022 have a value of approximately $360,000 at the time of trial. The balance of the shares are presently valued at $ 1,440,000 although this value on becoming unlocked and vested is unknown.
Contributions
Both parties agreed this case primarily turns on an assessment of the contributions of each party.
With regards to initial contributions, the parties commenced their relationship aged 50 and 43 respectively. Both had children of previous marriages, and it is not disputed that both had assets.
The applicant was an established investor with several share portfolios, both in Australia and overseas, and an unencumbered property in Suburb E, Queensland. He continues to own those assets. He also had a property in Country N, jointly owned with his then wife, which he received as a result of divorce proceedings in Country N and sold in May 2020 with the net proceeds being about $980,000. It is difficult to put a precise value of the applicant’s assets at the commencement of the relationship in 2006, however, he gave uncontested evidence that they included the G Finance share portfolio (currently $812,071), the F Finance share portfolio held overseas and the property in Country N. Whilst the respondent denied when asked that the applicant had substantially more assets than her at the commencement of the relationship, plainly the applicant had sufficient assets to support himself in a comfortable lifestyle at the commencement of the relationship, and from which he was able to generate the significant funds that he provided to the respondent over the course of the relationship and to purchase the B Street property.
The respondent owned an encumbered property in Suburb KK, which sold in 2007 for $500,000, and a vehicle worth approximately $5,000.
The applicant submitted that any non-financial contributions by the respondent during the relationship were limited by the “part-time nature” of their relationship. He submitted that given he was primarily overseas throughout their relationship, the respondent’s non-financial contributions were restricted to the four to six months that they spent together each year. He submitted that otherwise the maintenance of her household was entirely for her and her children’s benefit.
The applicant was asked about the respondent’s maintenance of her residences in which he stayed while he was in Australia. In relation to the LL Street property, the applicant said the respondent on average had a cleaner once a week, and a gardener every fortnight, and other than that, the respondent did not do much cleaning or maintenance. I do not accept that the respondent did not clean and maintain the house or that her contributions in that regard were negligible.
The applicant had significant health issues which have required a number of surgeries, and it is uncontested that the respondent gave him support during and following these operations. The respondent gave evidence that as early as mid-2006, she flew to City O to care for the applicant for two months following his surgery. She visited him in hospital each day, and cared for him once he was discharged. She assisted with washing, cooking, typing work emails while he dictated, and otherwise took care of him. The applicant said that the respondent was one of several people who cared for him in this period, which was not disputed. He gave evidence that he was grateful for her support during these periods, although he did seek to minimise her contributions.
Similarly, the applicant gave evidence that he had further surgeries in 2008 while in Melbourne and stayed at the respondent’s residence while he recovered. He gave evidence in his trial affidavit that she provided care, but “by no means devoted herself to taking care of [him]”. He said he was self-sufficient other than having limited mobility. The respondent gave evidence in her trial affidavit that she arranged his referrals for the surgeon, was the applicant’s emergency contact during these surgeries, and cared for him following these surgeries.
While the applicant was in the process of finalising his property settlement with his ex-wife, the applicant gave evidence that the respondent assisted by travelling to Country N with him to pack up and send his belongings to Australia in preparation to sell the matrimonial property. He also gave evidence that the respondent assisted in communicating with lawyers on his behalf during this period.
In contrast, the applicant submitted that his direct financial contributions ought to be given more weight, and significantly outweigh the respondent’s non-financial contributions.
With regards to financial contributions, the respondent gave evidence that she believed her financial contributions were practically equal to the applicant’s. That evidence was expressly disavowed by her counsel in closing submission (presumably on instructions) for good reason. There was no evidence that her financial contributions were equal and the evidence threatened to undermine her credibility.
The respondent gave evidence that she invested $100,000 of her funds into Z Company, a company that the applicant was director of at the time, as a favour to the applicant. Her evidence was that these funds were a loan to assist the applicant’s investment, as he did not have adequate cash flow at the time. The applicant does not deny that the respondent invested $100,000, however, denies it was a loan. He gave evidence that he told the respondent of an investment opportunity, which she agreed to explore willingly. He also invested $100,000 at the time. This investment was unsuccessful, and the applicant gave evidence that both his and the respondent’s investments were lost. The respondent does not deny this, but stated that she has not seen any records relating to this investment.
I do not accept that the respondent treated this as a loan or anything other than an investment for herself. The respondent is a business owner. Her correspondence about investments in property indicate that she was financially minded. If the investment was truly a loan to the applicant, I have no doubt that it would have been recorded by her as such.
The respondent also submitted that she paid for the majority of the applicant’s flights during their relationship. This is contested. The applicant gave evidence that they largely paid for their own expenses, and shared the cost of restaurants and hotels. The applicant accepts that the respondent used her points to upgrade them to business class on a few occasions.
The B Street Property
It is agreed that the B Street property was purchased in late 2012 for $1,541,000, which was paid entirely by the applicant. The applicant deposed in his trial affidavit, “My purchase of a property for us to live in together was intended to demonstrate my commitment to a shared future life with [Ms Maher] from that point.” The property was put into the respondent’s sole name. He denied that it was ever intended that the property be a gift for the respondent. By his trial affidavit, the applicant gave evidence that he purchased the property in the respondent’s name to avoid taxation penalties given his status as a permanent resident in the UK. During cross examination he was asked to explain his reasoning for doing so. He gave evidence that due to his business dealings in the UK, he was given advice by his lawyer that having a property in Australia in his name could affect his tax residency status elsewhere, which would have significant consequences. He also conceded that he wanted the respondent to be looked after in the event that he died, as he did not have a Will. In my view, the applicant’s explanation for purchasing the home in the respondent’s name makes good sense.
The respondent stated that B Street was put in her name because the applicant intended it as a gift. Her son gave evidence via affidavit that he recalled a conversation with the applicant in which he stated it was a gift. The applicant denied this conversation occurred. I do not have a great deal of regard to the evidence of the son that it was intended as a gift given that he was aged 14 at the time of the purchase, and given his somewhat jaundiced view of the applicant (I refer to [13] – [17] of his affidavit).
It is uncontested that the respondent lived in the B Street property with her sons, and the applicant lived there during the four to five month period each year when he was in Australia. The respondent was primarily responsible for physically maintaining the property, although she conceded the applicant provided her with significant funds to assist.
Financial Contributions of the Applicant (in addition to the purchase of the B Street property)
The applicant frequently deposited money into the respondent’s bank account, which she believed to be his contribution to household expenses. There was one payment in 2008 of $14,468, which she believed may have been relating to travel expenses. There were a significant number of transfers following 2013.
It is accepted that the applicant deposited amounts totalling approximately $350,000 into the respondent’s bank account from 2013 onwards which were used for the respondent’s living expenses, including the maintenance of B Street, and renovations to the property. He sets out these payments in his affidavit at [49]-[50]:
Between 8 January 2014 and 24 October 2016, I made a number of deposits into [Ms Maher]’s bank account. These deposits totalled $216,000 and were comprised of the following:
•$42,000 on 8 January 2014;
•$40,000 on 25 September 2014;
•$44,000 on 17 December 2014;
•$35,000 on 28 June 2016; and
•$30,000 on 24 October 2016.
Between 7 August 2013 and 21 December 2018, additional amounts totalling $155,000 were transferred from my overseas accounts and deposited into my [G Finance] Trading Account in Australia, comprised of the following:
•$30,000 on 7 August 2013;
•$30,000 on 25 May 2016;
•$25,000 on 13 December 2016;
•$25,000 on 15 February 2017;
•$15,000 on 15 December 2017;
•$10,000 on 30 May 2018;
•$10,000 on 2 August 2018; and
•$10,000 on 21 December 2018.
The respondent accepted that these deposits funded the renovations to the property costing approximately $30,000 which she deposes to in her affidavit.
Further, it is uncontested that the applicant paid the younger son’s school fees totalling approximately $100,000. This was done voluntarily by the applicant, and the respondent acknowledged in cross examination that she was grateful. The applicant also contributed to cost of the son’s accommodation when he attended university.
The applicant sold his property in Country N in 2020 for the equivalent of $980,000 AUD, which was deposited into his UK bank account.
The applicant set out in his trial affidavit that he received an inheritance following the death of his mother post separation in 2020, comprising of:
(1)a cash amount of nearly GBP 150,000 (the equivalent of approximately AUD $250,000 at the exchange rate prevailing at the time), which was deposited into his DD Bank Account on 18 March 2020;
(2)a share portfolio which is now the F Finance Share Portfolio with a value of approximately AUD $447,072 (value at 16 August 2022);
(3)chattels of sentimental, but modest financial, value; and
(4)a final interest and cash adjustment payment totalling just over GBP 13,000 (the equivalent of approximately AUD $23,000 at the exchange rate prevailing at the time), which was deposited into his DD Bank Account.
The respondent was asked about the inheritance she deposed to receiving post-separation which she did not include in the asset pool. The respondent stated that she did inherit around $100,000 from her mother, but she never received that money. She stated that her mother made a declaration on her death bed that she wished the money to go to the respondent’s sons. The respondent maintains that the money went directly to her sons and she never benefitted from it.
The respondent has plainly made contributions throughout the course of the relationship to assisting and caring for the applicant when he was unwell or recovering from surgery and she made non-financial contributions to maintaining the household when the parties were residing together in Melbourne. I do not accept the somewhat derisory position taken by the applicant in the course of the trial to the respondent’s contributions in relation to cooking, cleaning and caring for the applicant during his periods of convalescence.
I do not accept that the respondent has made contributions in the form of an investment of $100,000 to invest in Z Company in 2019. Rather I find that this sum was her investment on her own behalf. I also do not accept that the respondent made contributions by paying for improvements to the property at B Street in the sum of approximately $30,000 as those funds were advanced by the applicant and disbursed by the respondent. I do accept that the respondent was responsible for managing those works and also for generally managing the payments of outgoings and expenses relating to the property.
However, the respondent’s contributions to the applicant being able to maintain and/or develop assets through the course of the relationship has not been significant. She was managing her own business which, until the Covid restrictions, was apparently successful and which supported her and her family prior to her meeting the applicant, and she continued to receive income from the business throughout the course of the relationship.
The applicant has made financial contribution to purchasing and maintaining the B Street property. He has also made significant financial contributions directly to the respondent in the sum of about $385,000 in the payment of her son’s school fees of $100,000 as set out above. This was in circumstances where the children’s father did not pay periodic child support or otherwise contribute towards the children’s expenses.
In Horrigan & Horrigan [2020] FamCAFC 25 the Full Court stated at [35]:
It is well established that an assessment of contributions is not a mathematical exercise, but rather involves the identification and assessment of all of the parties’ respective contributions, in a holistic way across the course of the relationship and in the post separation period to the point of assessment. (Pierce v Pierce (1999) FLC 92-844; Singerson & Joans [2014] FamCAFC 238; Dickons v Dickons (2012) 50 Fam LR 244 and Marsh & Marsh (2014) FLC 93-576; Lovine & Connor and Anor (2012) FLC 93-515 at [39]-[42]).
I assess the contributions to the primary asset being the B Street property to be 20%/80% in favour of the applicant. I assess the respondent’s contributions to the balance of the assets in the applicant’s name as negligible.
Section 90SF (3) Factors
The respondent is in good health, and continues to work as a professional. She continues to reside in B Street.
The respondent was asked about her business. She gave evidence that she often received large deposits for her work, and she put these deposits into her regular chequing account, which was included on the asset list. She stated that as a result of Covid, she received significant deposits for work that she was unable to complete due to restrictions. Thus, she gave evidence that she had to return significant amounts of money to clients, which she stated were deposits for work that she had to cancel. She also stated that her income has suffered significantly as a result of Covid in the past few years. No evidence was given about the prognosis of the business, but evidence was given that it is an established business supplying services. The respondent has been in that business for the duration of the relationship and there was no evidence given that she was proposing to close that business.
The applicant continues to work as a professional. The applicant, at the time of the trial, had no permanent residence, and has been required to pay for hotels and other short term arrangements. He has had serious health issues set out at [69] of his trial affidavit, and has undergone major surgeries in the past 24 months which had rendered him, until very recently, unable to travel. He gives evidence that his prognosis is unknown at this stage.
No detailed submission was made to the court as to what adjustment ought be made to take into account s 90SF (3) factors. There was no suggestion made by either party that they would not continue to work in the respective fields of endeavour.
The s 90SF (3) factors are reasonably neutral, although I do find that the applicants needs are greater due to his health concerns.
Just and Equitable Division
Counsel for the applicant submitted that the court should have regard to decisions such as GBT & BJT [2005] FamCA 683; Horrigan & Horrigan [2020] FamCAFC 25 and Pierce v Pierce (1999) FLC 92-844 in considering what orders might be just and equitable, in particular, counsel for the applicant emphasised the particular nature of the relationship and the significant disparity in contributions, particularly financial contributions. I think it is also appropriate to take into account that the level of financial contributions differed once the parties became engaged and the applicant purchased the property in B Street for the parties to live in. The cases referred to resulted in modest awards to one of the parties because of the particular nature of the relationship or the nature of the contributions.
Whilst the relationship spanned over a 13 year period, there is some force in a submission that there were effectively two phases to the relationship, with the second phase commencing in late 2012 and concluding in early 2019. It is also notable that the significant financial contributions made by the applicant were made from late 2012 and that phase of the relationship concluded after about 6 years.
In my view, the orders sought by the applicant are just and equitable. The retention of 50% of the share of value of the property represents a substantial portion of the asset acquired in the course of the relationship for the joint use of the parties, that being the B Street Property. That takes into account the contributions made by both the applicant and respondent for the course of the relationship. I do not regard the fall-back position put forward by the respondent that she retain the property as just and equitable. This is particularly the case given the disparity in the level of contributions. I also note that the respondent will receive property which reflects a finding of greater than the level of contributions that are found, however, the applicant by his counsel submitted that he was content for her to receive half of the value of the house. Orders that the respondent receive 50% of the value of the house provides her with a result greater than the finding based on her contributions and taking into account s 90SF(3) factors.
I note that each party to this proceeding has spent or incurred costs in the sum of about $350,000. I am nonplussed as to why the proceeding did not resolve either shortly after proceedings were issued or at an early opportunity. In my view, the position taken by the applicant when proceedings were issued was reasonable, both in light of the facts known at the commencement of the proceeding, and those matters which have become known since they have been pursued.
The applicant sought orders about the return of furniture and personal assets in the minute of proposed orders that he filed. No submissions was raised in opposition to these orders and accordingly I shall make them in the terms sought.
I reserve the question of costs and make orders accordingly.
I certify that the preceding one hundred and eight (108) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice McNab. Associate:
Dated: 28 November 2022
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