Groves & Groves (No 5)
[2022] FedCFamC1F 908
Federal Circuit and Family Court of Australia
(DIVISION 1)
Groves & Groves (No 5) [2022] FedCFamC1F 908
File number(s): SYC 8296 of 2016 Judgment of: HARPER J Date of judgment: 18 November 2022 Catchwords: FAMILY LAW – PROPERTY – Final property adjustment – Substantial asset pool of approximately $19 million – Where parties separated in 2015, and wife resided overseas for majority of time between 2011 and 2016 – Where husband owns and operates a number of businesses – Asset pool substantially diminished following the global financial crisis in 2008 – Where wife played no role in business activities of husband after global financial crisis, focusing instead on academic career – Wife benefitted from Div 7A loans to fund purchase of former matrimonial home, where she presently resides – No material post-separation contributions by the wife – Assessment of contributions to be 66 percent to the husband and 34 percent to the wife – Two percent adjustment in favour of the wife pursuant to s 79(4)(e) of the Act – Allegations of non-disclosure by both parties – Finding that wife failed to disclose key documents – Specious arguments of coercive control – Where husband is liable to pay tax on Div 7A loans used to fund purchase of his new home – Potential distortion of liability rendering wife liable to contribute to tax – Distortion taken into account under s 79(4)(e) – Where parties have interest in a self-managed superfund – Husband seeks orders appointing himself as delegate of trustees, which includes the wife – Where there are no restrictions in the superfund’s deed, trust law, or the SIS Act and Regulations – Final adjustment of 64 percent to the husband and 36 percent to the wife. Legislation: Family Law Act 1975 (Cth) ss 75(2), 79, 80, 81, 106A, 114(3)
Income Tax Assessment Act1936 (Cth) Div 7A
Cases cited: Barnell & Barnell (2020) FLC 93-961; [2020] FamCAFC 102
Benson & Drury (2020) FLC 93-998; [2020] FamCAFC 303
Bevan & Bevan (2013) FLC 93-545; [2013] FamCAFC 116
Burke and Burke (1981) FLC 91-055; [1981] FamCA 44
Candle & Falkner (2021) FLC 94-069; [2021] FedCFamC1A 102
Chorn and Hopkins (2004) FLC 93-204; [2004] FamCA 633
Crapp and Crapp (1979) FLC 90-615; [1979] FamCA 17
Dickons v Dickons (2012) 50 Fam LR 244; [2012] FamCAFC 154
G and G (2000) FLC 93-043; [2000] FamCA 1075
Gabel & Yardley (2008) FLC 93-386; [2008] FamCAFC 162
Gollings and Scott (2007) FLC 93-319; [2007] FamCA 397
Groves & Groves [2021] FamCA 560
Groves & Groves [2021] FedCFamC1F 363
Groves & Groves (No 2) [2021] FedCFamC1F 364
Groves & Groves (No 3) [2022] FedCFamC1F 44
Groves & Groves (No 4) [2022] FedCFamC1F 787
Hickey and Hickey and Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143; [2003] FamCA 395
Horrigan & Horrigan [2020] FamCAFC 25
Jabour & Jabour (2019) FLC 93-898; [2019] FamCAFC 78
JEL and DDF (2001) FLC 93-075; [2000] FamCA 1353
Kowalski and Kowalski (1993) FLC 92-342; [1992] FamCA 54
Lin & Ruan (2021) FLC 94-024; [2021] FamCAFC 90
Mallet v Mallet (1984) 156 CLR 605; [1984] HCA 21
Manolis & Manolis (No 2) [2011] FamCAFC 105
Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17
Norman & Norman [2010] FamCAFC 66
Phillips & Hansford (No 2) [2015] FamCAFC 138
Rodgers & Rodgers(No 2) (2016) FLC 93-712; [2016] FamCAFC 104
Stanford & Stanford (2012) 247 CLR 108; [2012] HCA 52
Strahan & Strahan (interim property orders) (2011) FLC 93-466; [2009] FamCAFC 166
Wirth v Wirth (1956) 98 CLR 228; [1956] HCA 71
Division: Division 1 First Instance Number of paragraphs: 188 Date of last submission/s: 24 October 2022 Date of hearing: 26–30 September 2022 Place: Sydney Counsel for the Applicant: Mr Kearney SC with Ms Reid Solicitor for the Applicant: Barkus Doolan Winning Counsel for the Respondent: Mr Hodgson (direct brief) ORDERS
SYC 8296 of 2016 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR GROVES
Applicant
AND: MS GROVES
Respondent
order made by:
HARPER J
DATE OF ORDER:
18 November 2022
THE COURT ORDERS THAT:
Suburb R Property
1.Pending Ms Groves (“the Wife”) complying with Order 5, 7, 12 and 13, Mr Groves (“the Husband”) forthwith pay $168,765 to P Pty Ltd (“P Pty Ltd”) to discharge the mortgage secured against the property situate at and known as Q Street, Suburb R, Sydney in the State of New South Wales Folio … (“the Suburb R property”) by P Pty Ltd (dealing number …) [“the P Pty Ltd Mortgage”].
2.Upon the Wife’s compliance with Order 5, 7, 12 and 13, the Husband do all acts and things and sign all documents necessary to remove Caveat … placed by him on the Suburb R Property.
3.Pending compliance with Order 1 above, the Husband and the Wife each be restrained from doing causing or permitting any dealing with respect to their interest in the Suburb R property, including causing or permitting any act or thing to be done so as to encumber, further encumber or increase any facility secured against the Suburb R property (including but not limited to the P Pty Ltd Mortgage) or to allow or cause any other person or entity to do so.
4.Simultaneously with compliance with Order 1 above (and subject to compliance by the Wife with Order 3 above), the Wife:
(a)as between the Husband and the Wife, be declared pursuant to s 78 of the Family Law Act 1975 (Cth) (“the Act”) entitled to the entire right, title and interest in the Suburb R Property; and
(b)indemnify the Husband and keep him so indemnified from all actions, claims, suits, demands, and liabilities in relation to the Suburb R property, and the P Pty Ltd Mortgage.
The Suburb T property
5.Simultaneously with compliance with Order 1 above, the parties do all acts and things to transfer the Wife’s entire interest in the property situate at and known as S Property, Suburb T in the State of Queensland (“the Suburb T Property”) to the Husband.
6.Simultaneously with compliance with Order 5 above, the Husband indemnify the Wife and keep her so indemnified from all actions, claims, suits, demands, and liabilities in relation to the Suburb T Property.
The Entities and Trusts
7.Simultaneously with compliance with Order 1 above, the Wife do all acts and things to:
(a)resign from all offices and directorships held by her in:
(i)U Pty Ltd (“U Pty Ltd”), and/or
(ii)V Pty Ltd (“V Pty Ltd”) [“the Identified Entities”];
(b)transfer to the Husband (or his nominee), her entire right, title, interest and shareholding in U Pty Ltd; and
(c)transfer to the Husband (or his nominee) all of her right, title and interest in, and to, all loan accounts held by her in the Identified Entities and/or monies otherwise owed to her by the Identified Entities (or any of them).
8.Simultaneously with compliance with Order 7 above, the parties do all acts and things to remove the Wife as a beneficiary (and where applicable, an appointor and/or a position holder) of the W Trust, the Groves Trust and the X Trust.
9.Simultaneously with compliance with the last of Order 7 and Order 8 above, the Husband indemnify the Wife and keep her indemnified for and against any liability of any nature whatsoever which the Wife may otherwise have at any time arising in any way in respect of the Identified Entities and/or the Groves Trust, the W Trust and/or the X Trust, whether:
(a)by reason of the Wife having been an employee, director, officer and/or shareholder of any of the Identified Entities and/or a beneficiary of the W Trust, the Groves Trust and/or the X Trust by reason of the Wife having been involved in the business conducted by any of the Identified Entities;
(b)by reason of the receipt by the Wife of any money from any of the Identified Entities previously and/or distributions from the W Trust, the Groves Trust and/or the X Trust; and/or
(c)by reason of the Wife having given or executed a guarantee of any liabilities of any of the Identified Entities or the W Trust, the Groves Trust and/or the X Trust, to any person or corporation including but not limited to the Australian Taxation Office,
or otherwise.
10.Simultaneously with compliance by the Wife with the last of Order 7 and Order 8 above, the Husband indemnify the Wife and keep her indemnified for and against any liability of any nature whatsoever which the Wife may otherwise have at any time arising in any way in respect of:
(a)Y1 Pty Ltd (“Y1 Pty Ltd”) or any subsidiaries thereof;
(b)Z Holdings Pty Ltd (“Z Holdings”) or any subsidiaries thereof;
(c)Z Securities Pty Ltd (“Z Securities”);
(d)Z Finance Pty Ltd (“Z Finance”);
(e)AA Pty Ltd (“AA Pty Ltd”);
(f)Y2 Pty Ltd ("Y2 Pty Ltd");
(g)Y3 Company (“Y3 Company”) or any subsidiaries thereof;
(h)BB Company (“BB Company”);
(i)Y4 Pty Ltd (“Y4 Pty Ltd”) or any subsidiaries thereof;
(j)the Y5 Joint Venture;
(k)the Y6 Joint Venture;
(l)the Y7 Joint Venture;
(m)the Y8 Joint Venture;
(n)CC Pty Ltd (“CC Pty Ltd”)
whether:
(o)by reason of the Wife having been an employee, director, officer and/or shareholder of any of the aforesaid entities;
(p)by reason of the Wife having been involved in the business conducted by any of the aforesaid entities;
(q)by reason of the receipt by the Wife of any money from any of the aforesaid entities previously; and/or
(r)by reason of the Wife having given or executed a guarantee of any liabilities of any of the aforesaid entities, to any person or corporation including but not limited to the Australian Taxation Office,
or otherwise.
The Self Managed Superannuation Fund
11.These Orders act as authority for the husband to, and the husband by this Order, be appointed as the delegate of the Trustees of the G Superannuation Fund pursuant to cl 4.09(c) of the Deed of amendment of the G Superannuation Fund dated 1 June 2006.
12.The parties are each restrained from doing any act or thing so as to cause or permit any interference with the delegate’s compliance with Order 13 below.
13.The delegate of the Trustees forthwith do all acts and things (including instructing accountants to assist) and sign all documents as may be necessary as Trustees of the G Superannuation Fund to do all acts and things as recommended by the auditor, Mr J, to make the G Superannuation Fund compliant with the Superannuation Industry (Supervision) Act 1993 (Cth) and the Superannuation Industry (Supervision) Regulations 2001 (Cth) including but not limited to:
(a)causing all assets of the Fund to be held in the correct name (‘Mr Groves and Ms Groves as trustees for the G Superannuation Fund’);
(b)to the extent that the amount of $5,828 (together with any interest with any interest thereon) is repayable to the fund by the husband in respect of FY2018, the husband to attend to such payment forthwith; and
(c)causing the financial statements for the years ending 30 June 2018 – 30 June 2021 to be finalised,
and then in accordance with the requirements of the Act, the Superannuation Industry (Supervision) Regulations 1994 and the Family Law (Superannuation) Regulations 2001 and in order of priority:
(d)rollover by way of cash payment 100 percent of the Wife’s member interest in the G Superannuation Fund into a fund of the Wife’s choosing (“the Wife’s New Fund”); and
(e)remove the Wife as a Trustee and member of the G Super Fund.
14.Order 13 have effect from the operative time and the operative time for the purposes of that order be the date seven days from date of these Orders.
The Payment to the Wife
15.Simultaneously with compliance by the Wife with the last of Orders 5, 7, 8, 12 and 13 above and Order 16 below, the Husband pay an amount to the wife calculated as follows $126,114, less $24,020, being a balance of $102,094.
General
16.The Wife make the following items available for collection from the Suburb R Property by the Husband within 7 days of date of these Orders:
(a)the painting; and
(b)the collectible books,
which items the Wife be restrained from doing any act or thing (or allowing anyone to do any act or thing to thing) in respect of pending collection, having as its cause and effect the damaging, encumbering, sale, disposal [or similar] of same.
17.Save as specifically provided for by any Order to the contrary, as against the Wife, the Husband be declared the sole owner of, and the Wife then have no interest in, all other personal property (including choses in action) of whatsoever nature and kind in the possession of the Husband at the date of the making of this Order, including but not limited to any right, title, interest and/or shareholding in any entity and/or Trust in which he holds an interest (whether directly and/or indirectly) jewellery, furniture and effects, the funds in all bank accounts in the Husband’s sole name, the Husband’s Motor Vehicle 1, the Husband’s super fund, and the Husband’s Artworks (including as between the Husband and Wife, any interest in the Suburb DD Property).
18.Save as specifically provided for by any Order to the contrary, as against the Husband, the Wife be declared the sole owner of, and the Husband then have no interest in, all other personal property (including choses in action) of whatsoever nature and kind in the possession of the Wife at the date of the making of this Order, including but not limited to jewellery, furniture and effects, the funds in all bank accounts in the Wife’s sole name, the Wife’s UK pension, and the Wife’s Motor Vehicle 2 and Motor Vehicle 3.
19.The parties each do all acts and things and execute all documents, authorities and writings as are necessary to give effect to all or any of these Orders.
20.Subject to these orders, each of the Husband and the Wife release the other from all actions, proceedings, claims, demands, debts, costs, and expenses whatsoever and howsoever arising which either of them had or may have against the other for or by reason of or in respect of any act, cause, matter, or thing.
21.In default of any party doing any act or thing, taking any step and/or executing any such document necessary to give effect to these Orders, a judicial registrar of the Federal Circuit and Family Court of Australia at Sydney or such other person appointed by the Court be authorised pursuant to s 106A of the Act to execute all such documents in the name of the defaulting party and to do all acts and things necessary to give validity and operation to such documents and the defaulting party shall pay the costs of the non-defaulting party in relation thereto.
22.All outstanding applications be otherwise dismissed.
23.Any application for costs by either party shall be filed within 28 days of the date of these orders, and in the event no such application is filed within the time specified, there shall be no order as to costs.
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 Groves & Groves has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARPER J:
INTRODUCTION
These are proceedings for property adjustment between the Applicant Husband, Mr Groves (“the husband”) and the Respondent Wife, Ms Groves (“the wife”).
The proceedings have been bedevilled by delay and unnecessary complication, brought about in large measure by the wife’s conviction that she is the victim of a vast conspiracy.
In summary, the husband proposed the following outcome:
(a)The wife be declared the owner of Q Street, Suburb R (“Suburb R”), subject to him discharging a mortgage;
(b)The wife transfer to him her 25 percent interest in the S Property, Suburb T in Queensland (“Suburb T”); and
(c)The wife resign from all directorship in, and transfer to the husband her shareholdings in, a number of companies, and be removed as a beneficiary of three trusts: the W Trust, the Groves Trust, and the X Trust, with consequential indemnities by the husband.
He also proposed orders regularising the G Superannuation Fund (“G Super Fund”) as a compliant fund and a payment to the wife so as to achieve an overall division of the parties’ property of 65 percent in his favour and 35 percent to the wife.
The wife’s ultimate proposal was filed on 22 September 2022, two business days before the commencement of the trial. She similarly proposed that she be declared sole owner of Suburb R. She also sought a declaration of sole ownership of Suburb T, sole entitlement to the W Trust, an order that all moneys paid to her by the husband during the proceedings be treated as a gift, a transfer to her of an EE Insurance policy, a range of orders in relation to superannuation, and an overall division of property of 60 percent in her favour and 40 percent to the husband.
At the commencement of the trial, the husband contended that the wife’s proposed orders constituted a significant change to the case he had prepared to meet. He pointed out that until 22 September 2022, the wife had consistently agreed to a transfer of Suburb T to the husband and to relinquish her interest in the W Trust. He reserved his position and objected to the wife being given leave to amend her case so significantly.
I will decide this case on the basis of the parties’ proposals. On the view I take, there is no prejudice to the husband in allowing the wife to mount a case on the basis of her proposed outcome filed on 22 September 2022. I am satisfied that it would be just and equitable for orders to be made broadly in accordance with the proposal of the husband in any event, for the reasons which follow.
It is helpful at this point to record my views about the parties as witnesses. The husband was a satisfactory witness. He impressed me as trying to answer questions directly and carefully. His affidavit evidence contained considerable detail supported by contemporaneous documents.
The wife was a very unimpressive witness. She manifested a clear inability to answer questions directly, and routinely used her answers as an opportunity to make speeches articulating a sense of grievance and to espouse fanciful ideas about coercive control, theft of assets, and wastage by the husband. This continued a theme which she had pressed during the proceedings. Prior to trial, the wife had resisted orders, proposed by the husband for her benefit, for the husband to pay her $300,000 for legal representation (husband’s Further Amended Response to Application in a Case filed 6 July 2021). She was clearly convinced that the husband’s proposal for this payment was some form of coercive control. During final submissions by senior counsel for the husband, concerning his proposed orders to regularise and render the G Super Fund compliant, the wife made an audible outburst claiming again his arguments were “more coercive control”, left the courtroom, and did not return.
I note here that the departure of the wife from the courtroom placed her counsel, who was under a direct brief, in a very difficult position. He sought and was granted a short adjournment to seek instructions. Upon resumption, he informed the Court that he was instructed to make his submissions and continue the matter in the wife’s absence. I record also that the Court was given considerable assistance by the wife’s counsel in refining and focussing upon real and relevant, as opposed to extraneous or fanciful, issues, and presenting the wife’s case in a succinct and appropriate manner. Both parties were well served by their representatives.
I am satisfied the wife’s conviction that the husband was a malign figure engaged in malicious and harmful manipulation of assets was both unfounded, distracted her from relevant issues, and generally distorted her evidence to a point where it was not reliable. I prefer, and generally accept, the evidence of the husband unless otherwise stated in these reasons.
A further comment should be made about allegations of non-disclosure. The wife made wide ranging allegations against the husband of non-disclosure connected to persistent claims of manipulation and theft of assets both at hearings before the trial, and at the trial. None of these assertions was made good by her, or any, evidence. They were not pressed in final submissions.
I am satisfied that the husband made extensive and thorough disclosure during the proceedings, in accordance with his duty. His affidavit evidence alone demonstrates this. On the other hand, it became clear during the hearing that it was the wife who had failed to make adequate disclosure. She agreed in cross examination that she understood her duty of disclosure. But despite knowing this, she failed to disclose material information about her own financial position, and acknowledged there were documents in her possession which she failed to disclose either at all or in a timely fashion, such as an “attic cache” at Suburb R. She claimed she did not understand how to make disclosure. She did not give any evidence or other disclosure about how she disbursed over $1 million received during the proceedings. She did not file a costs notice before trial. To the extent necessary, I will refer to the consequences of the wife’s non-disclosure in the course of these reasons.
BACKGROUND
The following factual matters are a record of the events and dealings which are relevant to explain the position of the parties at trial, their contributions, and ultimate proposals. As will appear, it is unnecessary to rehearse everything that took place during the marriage, in light of the common position about contributions by the parties up to 2011.
The husband was born in 1959 and is 63 years old. The wife was born in 1959, and is also 63 years old.
The parties commenced cohabitation in early 1981 and married in 1983. They have two adult children, Ms FF, born 1990, and Ms GG, born 1984.
The marriage lasted almost 32 years. The parties separated on a final basis on or around 15 April 2015, and a divorce order took effect on 7 July 2017.
The husband remarried in August 2018 to Ms JJ. Ms JJ has a 15 year old son, HH, whom the husband accepts as his stepson. The husband and Ms JJ reside together in a property at KK Street, Suburb DD, NSW (“KK Street”), which is owned by Ms JJ.
At the commencement of the parties’ relationship, the husband was employed in a communications company and then with a bank. From late 1986, the husband worked for Z Finance Pty Ltd (“Z Finance”).
The wife worked at Company LL. She ceased employment around the birth of their first child in 1990, and did not obtain regular employment again until 2011, choosing instead to advance her studies whilst being the primary carer of the children. The wife obtained a tertiary qualification in or around 1990, another tertiary qualification in 2003, and another tertiary qualification in about 2009.
In 1987, the husband caused the incorporation of CC Pty Ltd (“CC Pty Ltd”) and V Pty Ltd (“V Pty Ltd”). The husband and the wife were and are shareholders of V Pty Ltd. He also set up the G Super Fund, with the parties as trustees, the W Trust, and the Groves Trust, with CC Pty Ltd as trustee of both.
The Groves Trust owned shares in operating entities associated with Z Finance. It received the income from the business activities of those entities, which was distributed primarily to V Pty Ltd and occasionally to the husband or wife. V Pty Ltd made loans to the wife, to which Div 7A of the Income Tax Assessment Act1936 (Cth) applied, requiring repayment within seven years to avoid them being deemed as dividends. V Pty Ltd also declared dividends in favour of the W Trust, and used funds for investment purposes. The W Trust used the dividends from V Pty Ltd to distribute to the wife for the purpose, in part, of repaying her Div 7A loans.
Therefore, according to the husband, whose evidence I accept, from about 1987 these trusts and entities comprised the core elements of the “Groves Group”, in summary being the W Trust, V Pty Ltd, the Groves Trust, CC Pty Ltd, and the G Super Fund.
Until 2016, V Pty Ltd also paid a salary to the wife of approximately $128,000 per annum and contributed approximately $20,000 to the G Super Fund as contributions for the wife.
The husband was head of a Z Finance Pty Ltd division from 2002 until 2009. Z Finance became known as ZF from 2005 and was listed on the ASX.
In 2006, the parties purchased MM Street, Suburb NN (“Suburb NN”) for over $5 million.
The financial fortunes of the parties were savagely reversed in 2008 and 2009. During the global financial crisis, in late 2008, Z Finance and numerous subsidiaries were placed into administration and receivers were appointed to many of its, and its subsidiaries’, assets and undertakings. At that point in time, the Groves Trust owned interests in Z joint ventures, shares in Z Finance, Z Finance Australia Ltd, Z Holdings Australia Pty Ltd and Z Holdings Pty Ltd (“Z Holdings”). The Groves Trust owned a 16 percent interest in the latter two companies.
The financial collapse of Z Finance and its group of companies destroyed the value of the Groves Trust’s shareholding in Z Finance and substantially diminished the value of the trust overall.
However, Z Holdings and Z Holdings Australia Pty Ltd, fell outside the administration and receivership. The Groves Trust continued to hold interests in these companies. The latter company ultimately changed its name to Y4 Pty Ltd, so for convenience I will refer to it by “Y4 Pty Ltd” in these reasons. As at 2008, Z Holdings and Y4 Pty Ltd owned a number of subsidiaries, some of which had assets and liabilities including ongoing financing transactions. They also owned 80 percent of a company called Z Pty Ltd which became Y1 Pty Ltd (“Y1 Pty Ltd”). The other 20 percent was held by the Z Finance receivers.
The husband resigned from Z Finance in 2009 and took steps to start fresh businesses. He set up the X Trust to own the assets of these businesses. U Pty Ltd (“U Pty Ltd”) was incorporated to be trustee of the X Trust. The husband and U Pty Ltd entered into a joint venture with other persons and entities pursuant to a joint venture agreement to manage and utilise the residual assets owned by Y4 Pty Ltd and Z Holdings, which still had some value (“Y5 Joint Venture”).
Through the Y5 Joint Venture, the husband established Y Company, which was a business for the identification, acquisition (through financiers and third party investors), management, resale, re-leasing, and conversion of transport equipment to lease to companies. The head corporate vehicle was called Y3 Company, incorporated in Country PP (“Y3 Company”). The husband did the work to grow and enhance these businesses. He organised investment capital and the engagement of employees in Sydney and City QQ.
On 13 May 2010, the husband entered into an amendment to the Y5 Joint Venture. U Pty Ltd was also a party. This amendment included a negotiated profit distribution to X Trust of $3 million, which was then distributed to V Pty Ltd, which then made a loan to the wife of $3.8 million, enabling her to purchase Suburb R in her name. The wife entered into a Div 7A loan agreement with V Pty Ltd on 8 August 2010. The husband gave evidence, which I accept, that he discussed this chain of dealings with the wife, and told her it would enable them to buy a house. He agreed to fund the payment of the tax consequences for the wife from his income. The wife accepted this.
In 2012, the husband placed CC Pty Ltd, as trustee of the Groves Trust, into administration. It was by this time also in receivership. A Deed of Company Arrangement was entered into between the administrator, CC Pty Ltd, V Pty Ltd, the husband, and the wife. U Pty Ltd replaced CC Pty Ltd as trustee of the Groves Trust and CC Pty Ltd was later deregistered.
The Y5 Joint Venture commenced a further joint venture in 2012. During the period between 2010 and 2012, the husband was involved as principal instructor in complex litigation in the Federal Court of Australia concerning ownership of Y4 Pty Ltd subsidiaries and business assets. This litigation was resolved with Y4 Pty Ltd retaining the disputed subsidiaries and assets associated with multiple financing transactions.
In 2013 and 2014, the husband completed a refinancing of the multiple transactions. In 2015, he caused a Country OO subsidiary to employ another senior operator in Country OO.
In summary therefore, between 2009 and separation in 2015, the husband used his business acumen, and provided his personal endeavours to rehabilitate the financial fortunes of the trusts and entities within the Groves Group, and thereby the parties.
In mid-2016, the Y5 Joint Venture entered into a second joint venture. In late 2016, the X Trust entered into a further joint venture (“Y8 Joint Venture”). A company known as Y2 Pty Ltd (“Y2 Pty Ltd”) became trustee of the X Trust, replacing U Pty Ltd.
During 2016, the parties sold Suburb NN for approximately $4 million. The proceeds were used to retire debt secured against the property. The balance of the proceeds of sale ($174,676.81: the “Suburb NN proceeds”) were paid into a controlled moneys account.
After separation in April 2015, the husband continued his work at developing the Y Company business. He gave detailed evidence about his efforts and the growth of the businesses which was unchallenged. It is unnecessary to repeat it in detail for the purposes of this judgment, except to record the following points.
Between 2014 and 2017, he negotiated the acquisition by Y4 Pty Ltd from the receivers of the remaining 20 percent of Y1 Pty Ltd. The X Trust owned some 50 percent of the Y Company joint ventures as at 2017. The Groves Group had interests directly or indirectly in the Y Company businesses.
In 2019, the husband undertook a significant restructure of the Y Company businesses. It was undisputed that this achieved a significant profit.
As a result of the wife expressing discomfort about her exposure to the Div 7A loans, the husband took steps to restructure the loans so that fresh loans were entered into in his name, in substitution for the wife. He also paid outstanding amounts for the wife’s overdue taxes, in the sum of $300,000, which had arisen from dividends paid by V Pty Ltd to the W Trust, and then distributed to the wife by the W Trust to allow her to make the necessary repayments of Div 7A loans to V Pty Ltd.
To achieve this outcome, the husband made arrangements in late 2019 acquiring various Y Company interests from other investors or partners, and procured the consolidation of all Y Company activities under the corporate umbrella of Y3 Company. The funds generated by these dealings were distributed through the X Trust to the Groves Trust, and from the Groves Trust to the husband, who utilised the distributions to repay Div 7A loans. At the same time, he consolidated assets held by V Pty Ltd into Y1 Pty Ltd.
In 2020, the Y Company business managed a number of transport vehicles. Its business activities and revenues were severely impacted by the disruptions caused by the Covid-19 pandemic.
As a result and in summary, as at trial, according to the husband, the Groves Group entities were the W Trust, V Pty Ltd, Y2 Pty Ltd, the X Trust, the Groves Trust, the G Super Fund, U Pty Ltd, Y4 Pty Ltd and subsidiaries such as Y1 Pty Ltd, and Z Holdings. In particular, Y2 Pty Ltd, as trustee of the X Trust, owns 42 percent of a company called BB Company, which owns 100 percent of the shares in Y3 Company but no other assets. The other shareholdings in BB Company are owned by entities associated with executives of Y3 Company.
The husband works full time five days each week, conducting teleconferences from home at night or early morning with overseas partners or employees in relation to the activities of the businesses.
The husband gave evidence, which was not challenged, that between 2010 and 2021, the X Trust earned income from distributions from the Y5 Joint Venture and Y8 Joint Venture totalling $10,720,066. This was distributed to V Pty Ltd primarily, and the husband and wife. At paragraph 55 of his trial affidavit the husband said:
Distributions were a function of the success of the [Y Company] business each year. In broad terms, the ongoing revenues of the business after 2014 covered the ongoing overheads. Profit arose from new transactions being completed or existing transactions maturing or being restructured. Consequently, the distribution profile was neither steady nor predictable.
The husband explained further at paragraph 92:
In the period from 2009 through to [late] 2019, the business of [Y Company] was structured via a series of Australian denominated joint ventures and a number of companies in [Country PP], United Kingdom, [Country OO] and Australia. [AA Company] provided investment capital to allow the business to acquire aircraft for lease to airlines. …
He gave evidence, which I accept, that, although he discussed from time to time his business endeavours with the wife during the relationship up to separation, the wife played no role in those activities or in helping the husband achieve successful business outcomes. Indeed, it was clear that from 2011 the wife focussed on her academic endeavours and was absent from Australia between 2011 and 2016, if not entirely, then for the majority of the time.
Between 2001 and 2011, the wife worked for block periods of between seven and 12 weeks per annum in Europe. From late 2011 onwards, she resided substantially in City SS (until around mid-2012), and then the TT University, UK (from late 2012 to 2016) following which she returned to Australia. During this period, the husband caused to be sent to the wife approximately $239,000 into her account held at UU Bank, and both parties made payments for their children, although the wife’s contribution came partly at least from the funds paid into the UU Bank account by the husband.
In late 2019, the wife travelled to the UK on what was intended to be a temporary basis to secure employment, however due to Covid-19 lockdowns, had to remain until mid-2020.
The wife also claims to suffer a range of medical issues, including anxiety and depression, which she attributes to her discovery of the husband’s infidelity and these subsequent proceedings. Her medical issues are discussed below in consideration of adjustment under s 75(2).
I find that the parties’ wealth was substantially lost in 2008 and 2009, but that by 2011, the efforts of the husband had established a platform for their rehabilitation through the trusts and entities which he either redeployed, repurposed or brought into existence. His efforts include entering into or participating in complex joint ventures through different entities, renegotiating business leases, corporate ownership structures, and finance arrangements. I accept that from 2011, the wife began to live primarily out of Australia until 2016. The husband gave evidence that from at least 2017 until trial, the incremental value increase in the parties’ assets, apart from Suburb R, was the result of his hard work, management, conservation, and improvement of the assets and value held in Groves Group entities including the Y Company businesses. The unchallenged evidence of the single expert, Ms VV, showed that, leaving aside the G Super Fund, between mid-2017 and late 2021 the value of the Groves Group increased from approximately $3 million to $9 million. I find that the wife made no contributions towards this outcome.
PROCEDURAL HISTORY
It is desirable to set out the procedural history in some detail, not only to explain the delay in finalisation of the proceedings, but also to give background to some of the wife’s contentions.
The husband commenced proceedings on 13 December 2016 in the Family Court of Australia (as it then was). The wife filed her Response on 13 January 2017, together with an Application in a Case seeking exclusive occupation of Suburb R, and for $1,000 per week in spousal maintenance. At this time, the wife was represented by WW Legal Pty Ltd.
On 6 February 2017, Ms VV was appointed, by consent, as the single expert.
On 10 February 2017, the husband filed an application for divorce. A divorce order was granted on 6 June 2017.
XX Legal commenced acting for the wife on 15 February 2017, however, they filed a Notice of ceasing to act on 28 November 2017. She thereafter became self-represented.
On 26 April 2017, consent orders were made for the wife to have exclusive occupation of Suburb R, and for interim partial property settlement. Pursuant to these orders, the Suburb NN proceeds were disbursed to pay $70,000 towards the costs of the single expert, Ms VV, $60,000 to meet the wife’s tax obligations, and the balance of about $45,326.14 was paid to the wife.
On 12 March 2018, a judicial registrar made orders listing the wife’s Application in a Case filed on 13 January 2017 for hearing in the judicial duty list on 13 June 2018. Directions were also made for the filing of material.
The wife then filed a further Application in a Case on 4 April 2018 seeking a review of the orders of the judicial registrar. It is unnecessary to set out her contentions in full detail, however, in summary, she asserted that the imminent listing provided her insufficient time to engage new solicitors and file documents. She alleged that she was given no input, and that the statements made by the husband’s solicitor were misleading and deceptive.
By consent, orders were made on 4 May 2018 discharging numerous orders made by the judicial registrar, including for the matter to be removed from the duty list and listed before a judicial registrar for further directions at 13 July 2018. The wife’s application for review was otherwise dismissed. However, the relevant application, which had been filed by the wife on 13 January 2017, was later dismissed by consent on 28 September 2018.
The wife obtained fresh legal representation, YY Legal, on 31 May 2018. However, these solicitors ceased acting for the wife on 6 March 2019. Again, she became self-represented.
On 3 March 2020, Alstergren CJ made a notation explaining that the wife had been previously provided with funds from the husband’s superannuation to apply to her legal costs, however she had refused to utilise those funds and objected to being made to do so. The wife maintained that there should be a dollar for dollar order for litigation funding. She also contested where any funds paid pursuant to such an order should come from.
On 5 March 2020, the husband offered $200,000 for the wife to obtain fresh legal representatives, and an additional $50,000 for the wife to spend as she pleased.
On 1 June 2020, the matter went before Alstergren CJ for further case management. Numerous notations were made, including that the husband had made several offers to pay $200,000 to the wife to be applied to her legal fees, which she had refused, and that previous adjournments had been made in order to grant the wife time to obtain legal representation, however she had failed to do so on each occasion.
The wife obtained new representation on 12 August 2020 through ZZ Legal.
On 13 August 2020, consent orders were made for the preparation of a joint balance sheet, updated expert valuations and reports, and for disclosure. By consent, a sum of $200,000 was also paid to the wife’s lawyers, and a further $75,000 to her directly to be applied to day to day expenses.
On 10 November 2020, the wife filed another Application in a Case seeking spousal maintenance in the sum of $3,000 per week, $15,000 for house repairs and maintenance, and for a rectification report for Suburb R. She also sought the husband pay for numerous medical aides and technology products, that she be appointed as the parties’ representative of their shareholding in Suburb T, and a further sum of $300,000 for legal costs. She alleged urgency on the basis of having medical issues and limited savings, whilst the husband continued to receive significant income derived from joint assets.
A senior judicial registrar made orders on 16 November 2020 for the filing of material. On 17 November 2020, Alstergren CJ stood the matter over for interim hearing on 12 February 2021 before McClelland DCJ. Orders were also made appointing Mr RR to value the Suburb R property, and leave was granted to the husband to rely on the reports of Ms VV as an adversarial expert. It is important to note here that the wife was granted leave to adduce her own adversarial expert evidence.
The husband filed his response to the wife’s interim application on 11 December 2020. He proposed that he pay for the repairs to the Suburb R property, after which it should be sold and the parties each receive $500,000 in partial property settlement. He also sought an order for an expert to be appointed in relation to the wife’s medical issues, and updated valuations. He subsequently amended this response on 6 July 2021, proposing that he would pay the wife the sum of $325,000 for legal costs and medical aides.
On 9 February 2021, the wife filed another Application in a Case seeking the interim hearing be adjourned, for an expert to be appointed to determine the wife’s capacity for paid employment, and an expert to value the repairs that would need to be done on the Suburb R property. The husband filed his response on the same day seeking the application be dismissed, and for an injunction restraining the wife from filing any future interim applications without leave.
Consent orders were made on 10 February 2021 for the husband to pay $15,000 for repairs for Suburb R, and the appointment of an expert to assess the wife’s medical conditions.
ZZ Legal ceased acting for the wife on 10 May 2021, following which she was again self-represented. The wife is presently facing a claim in the Local Court of NSW commenced by ZZ Legal for unpaid legal fees.
The matter first came before me on 25 May 2021. On that occasion, I stood over the wife’s application for litigation funding and spousal maintenance for interim hearing on 19 July 2021. I delivered judgment on 2 August 2021, where I made orders for $325,000 to be released to the wife in payment of legal fees and medical aides, for restraints on the parties’ self-managed superannuation fund to be removed, and otherwise dismissing the wife’s application for spousal maintenance: Groves & Groves [2021] FamCA 560.
On 28 September 2021, in the face of non-cooperation from the wife, the husband filed an Application in a Proceeding seeking a judge, senior judicial registrar, or judicial registrar be appointed under s 106A of the Family Law Act 1975 (Cth) (“the Act”) to execute numerous documents, including letters of instruction and for the opening of an ANZ Share Trading Account pursuant to orders of 10 February 2021.
The wife filed an affidavit on 20 October 2021 seeking an adjournment of a callover listed on 21 October 2021, as well as adjournment of the husband’s application for an order pursuant to s 106A. She argued on the basis of her ill health and lack of legal representation.
The callover proceeded as intended on 21 October 2021. I dismissed the wife’s application for an adjournment: Groves & Groves [2021] FedCFamC1F 363. I note the wife had directly briefed counsel for the purpose of her adjournment application. I also made the orders pursuant to s 106A sought by the husband: Groves & Groves (No 2) [2021] FedCFamC1F 364, as well as listing the matter for final hearing to commence on 26 September 2022 with an estimate of nine days. This estimate was embraced by the Court in circumstances where although the husband believed five days was sufficient, it was necessary to take into account the very real possibility the wife would be self-represented at final hearing.
On 7 December 2021, the wife’s new lawyers, AB Legal, filed a notice of address for service. They ceased acting on 10 May 2022.
On 7 February 2022, the matter came before me for case management. The wife again sought to vacate the final hearing dates on the basis she had been unable to obtain the senior counsel of her choice. I rejected this application in light of the wife’s extremely uneven history of legal representation, and where there could be no guarantees that she would be represented at final hearing: Groves & Groves (No 3) [2022] FedCFamC1F 44.
On 31 August 2022, my chambers received correspondence by which the wife sought to have the matter included in the Major Complex Financial Proceedings (“MCFP”) List. She contended that there were serious allegations of non-disclosure, fraud, and substantial assets held through trusts and/or corporate entities. In circumstances where the matter was already listed for final hearing before a judicial officer who hears matters in the list, it was my view that her request should be rejected as having no utility. Rather, it appeared that the application was more directed at delaying the final hearing.
On 7 September 2022, the matter came before me for a compliance hearing. On that occasion, the wife had engaged counsel with, I was told, the assistance of her first solicitor, although this solicitor was not on the record or representing the wife. Again, she complained that she had not been able to secure legal representation and sought an adjournment of the final hearing. She repeated her request for the matter to be included in the MCFP List, however I rejected this application for the same reasons as above. I extended the deadline for the wife to file her trial material.
The trial then commenced on 26 September 2022 for five days.
EXPERT EVIDENCE
Ms VV was appointed as an expert to value the parties’ interests, including the Groves Group. She prepared reports dated 4 April 2018, 21 April 2021, and 27 July 2022. She also answered specific questions. These were in evidence. As explained above, she became the husband’s sole, adversarial expert, pursuant to orders of 17 November 2020. During the proceedings, the wife was given leave to adduce evidence from her own expert. No such evidence was relied upon by the wife. The wife challenged the expert evidence of Ms VV and she was cross examined. None of her cross examination leads me to doubt her expert conclusions and opinions. Her evidence is the only evidence concerning the value of a number of items in the matrimonial pool. In submissions, counsel for the wife, quite properly, acknowledged there was no countervailing evidence and it would be bold not to accept her values. I accept the evidence of Ms VV, and will refer to specific aspects of it as necessary in the course of these reasons.
During the proceedings, orders were made for the wife to file and serve any reports upon which she proposed to rely concerning her allegations of medical issues. This did not happen. At trial, the wife sought to rely upon an affidavit sworn by her General Practitioner. This evidence was the subject of an ex tempore judgment during the trial: Groves & Groves (No 4) [2022] FedCFamC1F 787. I rejected significant portions of the report.
Mr AC was appointed as a single expert to value the parties’ motor vehicles. He prepared a report dated 27 November 2020. It was uncontroversial.
Mr AD prepared a single expert valuation report dated 28 July 2022 in relation to the retrospective market rental values of the Suburb R property. This was unchallenged, but ultimately did not form the basis of any submissions.
Mr AE prepared a single expert valuation report dated 6 July 2022 of the Suburb DD property. This was agreed.
COMPETING PROPOSALS
I summarised the parties’ competing proposals at the start of these reasons. The husband’s final proposed minute of order is detailed in Annexure “A,” set out at the conclusion of this judgment.
The wife sought orders as set out in Annexure “B.”
THE LAW
Part VIII of the Act sets out the legislative provisions relating to property orders that may be sought when parties are or were married. The central provision is s 79, which gives the court power to make such orders for alteration of property interests as it considers appropriate.
Section 79(2) of the Act provides that:
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.
Section 79(4) of the Act set outs the factors to be taken into account in considering what order, if any, should be made. These will be discussed in detail below.
Section 80 grants specific powers to make a range of different orders to adjust property interests. Section 81, although not a “head of power” nor an absolute requirement, reflects a policy of making orders which finally determine the financial relationship between the parties and avoid further proceedings, “as far as (is) practicable”: Crapp and Crapp (1979) FLC 90-615.
APPROACH TO BE TAKEN
In property proceedings under the Act, parties generally rely upon the “four step process” set forth in Hickey and Hickey and Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 in the determination of an application under s 79, as follows:
1.Identify and value, the parties' property, liabilities and financial resources at the date of the hearing;
2.Identify and assess the contributions of the parties as referred to in s.79 of the Act and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties, whether examined on a global approach or an asset by asset approach;
3.Identify and assess the other factors relevant including, the matters referred to in s.75 of the Act and determine the adjustment (if any) to be made to the contribution entitlements at step two; and
4. Consider the effect of the above and resolve what order is just and equitable in all the circumstances of the case.
The High Court has made clear that it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property; under Australian law there is no “community of property” in property owned by spouses individually and the question of whether it is just and equitable to make an order “is not to be answered by assuming that the parties’ rights or interests in marital property are or should be different from those that then exist”, ie, at the time when the discretion may be exercised: Stanford & Stanford (2012) 247 CLR 108 (“Stanford”) at [37]–[39], [50]; Wirth v Wirth (1956) 98 CLR 228 at 231–232 and 247–248. Unless property rights are adjusted pursuant to s 79, one spouse has no proprietary interest in the property owned by the other spouse: Lin & Ruan (2021) FLC 94-024 at [41], [48]–[49]).
Stanford also made clear that the requirement pursuant to s 79(2) that it would be just and equitable to make orders altering property should not be conflated with the requirements of s 79(4).
The Full Court in Bevan & Bevan (2013) FLC 93-545 (“Bevan”) at [72]–[73] has held that the decision in Stanford has not overruled the four step approach. In relation to the just and equitable requirement, the Full Court in Bevan emphasised that although the pre-condition to making any order for property adjustment is a finding that it is just and equitable to do so in accordance with s 79(2) of the Act, such a finding does not form a threshold issue, nor must the requirements of s 79 be followed in a particular order.
The Full Court in Bevan at [73] also summarised three “fundamental propositions” laid down by the High Court in Stanford to provide “useful guidance to trial judges in approaching the task under s 79” as follows:
1.Determination of a just and equitable outcome of an application for property settlement begins with the identification of existing property interests (as determined by common law and equity);
2.The discretion conferred by the statute must be exercised in accordance with legal principles and must not proceed on an assumption that the parties' interests in the property are or should be different from those determined by common law and equity;
3.A determination that a party has a right to a division of property fixed by reference only to the matters in s 79(4) and without separate consideration of s 79(2), would erroneously conflate what are distinct statutory requirements.
The High Court has held that the very fact of separation may lead to the ready satisfaction of just and equitable requirement: at [41]–[42]. Here, the parties accept it would be just and equitable to make some form of adjustment. The just and equitable requirement has been satisfied by the issues joined and the way the case was conducted. The Court must also be satisfied that the proposed final orders are themselves just and equitable. I will return to this question later in these reasons.
I will therefore approach the determination of this matter by first identifying the assets and liabilities of the parties, then by dealing with the s 79(4) factors, including s 75(2).
ASSETS, LIABILITIES AND FINANCIAL RESOURCES AT THE DATE OF THE HEARING
I turn then, to the identification of parties’ property, liabilities, and financial resources at the date of the hearing, according to ordinary principles of law and equity.
A joint balance sheet was tendered by the parties, which became Exhibit “AA”. A number of items of the balance sheet remained in dispute. De minimis items, such as Items 5 and 6, will be excluded. I otherwise express my conclusions as follows in respect of those items about which there was significant dispute and submissions were made, noting the reference to Item numbers is a reference to the item number on Exhibit “AA”.
Suburb T – Item 2
The wife holds a 25 percent interest in S Property, Suburb T in Queensland. This has not been valued. According to the evidence of the husband, this interest was acquired in 2001 at a price of $235,000 and in 2020, Y1 Pty Ltd acquired a further 25 percent interest for $75,000. On this basis, at the date of trial, the husband attributes a value of $75,000 to the wife’s interest. The wife does not agree. The only evidence of current value is the more recent purchase of a 25 percent interest by Y1 Pty Ltd. There were orders made during the proceedings to bring about a valuation of the wife’s interest, at her insistence, but no valuation was ever carried out. This was partially, at least, a result of the wife’s own conduct. Orders were also made restraining the wife from causing or permitting the husband’s use of the property. The wife was unable to suggest any basis for an alternative value. I will accept $75,000 as the current value.
Items 9–14
These items are the husband’s interests in the nominated corporate and trust entities. They were valued by Ms VV. The wife did not accept those values, but provided no alternative or contradictory evidence, nor did Ms VV change her view under cross examination. As noted, I accept the expert evidence of Ms VV as to value.
It is necessary to say something further about Item 11, the wife’s interest in the W Trust. Ms VV valued this item at $15,000. There was no reason given to doubt this value and I accept it.
There was no dispute that the wife has always been the appointor of the W Trust. In her trial affidavit, the wife claims the trustee of the W Trust was changed without her knowledge by the husband, thereby giving him control. The change to which she referred was the change of trustee from CC Pty Ltd to U Pty Ltd. This was achieved by a Deed Poll dated late 2010 (Exhibit “M”). The wife signed this deed as appointor of the trust, and the husband signed as director of CC Pty Ltd and U Pty Ltd. Trust assets were then transferred into the name of U Pty Ltd from CC Pty Ltd.
The wife was of the view that the change of trustee was a critical moment in a process whereby the husband exerted coercive control over her and removed assets from joint ownership. At paragraph 173 of her trial affidavit, the wife claimed:
[CC Pty Ltd] was jointly directed by the Husband and I, but [U Pty Ltd], replacing [CC Pty Ltd], being set up with him as ‘sole’ director is a lynchpin moment. He cannot have forgotten it. He used it to set in action a strategy, to move assets from ‘joint ownership’ and ‘joint control’ of everything to him controlling and owning everything.
(Emphasis in original)
It is difficult to follow this evidence. The wife remained the appointor of the W Trust. In cross examination, she agreed she was aware of this. She had ceased to be a director of CC Pty Ltd in 2009, almost 18 months before the change of trustee. ASIC searches (Exhibit “X”) showed although the husband is the sole director of U Pty Ltd, the parties are joint shareholders. It is impossible to conclude there has been any material change in control of the W Trust, because the wife could at any time appoint a different trustee and remains an equal shareholder in the trustee.
Nor have the assets of the W Trust been moved out of “joint ownership”. As trustee, U Pty Ltd owns shares in V Pty Ltd and a company called D Company as trust property. These shares have been moved from CC Pty Ltd into the name of U Pty Ltd. The transfer of shares into the name of U Pty Ltd was simply the transfer from the old trustee to the new. There was no change of beneficial ownership which remains with the W Trust.
Z Finance – Item 15
On the balance sheet the husband gave a value of “Nil” to any ongoing interest in Z Finance. The wife did not agree but in submissions acknowledged she could make no submissions contradicting his value. I will accept the husband’s value.
Motor Vehicle 4 – Item 22
The wife placed the value of this item in issue, whilst the husband sought to exclude it. In submissions, the husband argued that there was no evidence directed as to the value of the vehicle, to which the wife agreed. This item will be excluded.
Artworks – Item 23
The parties jointly own a series of artworks with a total value of nearly $60,000. In submissions, the wife agreed for the husband to retain one painting, with a value of $3,000, reflecting the orders sought by the husband. The wife will otherwise retain the remainder of the artworks to a total value of nearly $55,000.
KK Street – Item 28
The husband and Ms JJ live at KK Street. Although the property is registered in the name of Ms JJ, there was no dispute that the husband funded the entire purchase price by borrowing the necessary funds from Y1 Pty Ltd and providing them to Ms JJ. While making no concessions as the legal position as between himself and Ms JJ in relation, he accepted that KK Street should be included on the balance sheet as his notional asset for the purposes of these proceedings, with a value of $6 million.
UU Bank Accounts (Item 29) and Monies held in trust on account of wife’s anticipated legal fees and disbursements (Item 34)
The husband asserted that the value of both of these items were unknown in the face of a lack of disclosure by the wife. I accept the wife did not disclose her UU Bank statements. She also failed to file an up to date costs notice prior to, or following final hearing. In the absence of any evidence, no value can be attributed to these items, so they will be excluded from the balance sheet.
Wife’s interest in her father’s estate – Item 32
The Will of the wife’s late father was in evidence. Contrary to her assertions that she had no interest in her father’s estate, the Will showed she is entitled as a beneficiary to one quarter of the estate, upon the demise of her step-mother who has a life estate. This is a vested interest which she will receive in the future and is more than a mere expectancy. It is clearly a chose in action of the wife and part of her property. She gave no disclosure about the value of her interest and maintained in cross examination that she did not think it important because she had received nothing at the “moment”. The inventory attached to the grant of probate disclosed a gross value in the estate of approximately $2.5 million. This suggests the wife may eventually receive an inheritance in excess of $500,000, although there was no evidence of the current value of this one quarter share. For this reason, I will not include the wife’s estate interest on the balance sheet, but will take account of it under s 75(2).
Superannuation – Items 59 and 60
There was no dispute that the parties both have entitlements under the G Super Fund. In her affidavit, the wife alleged absence of information and non-disclosure about the G Super Fund. However, she provided or pointed to no evidence that would suggest the values of the parties’ respective interests were incorrect. I will accept the husband’s values.
Addbacks – Items 62 and 62A
The husband gave evidence, which I accept, that following separation, the wife has received from the matrimonial pool or the husband’s income, payments of approximately $1,027,412 (paragraph 201 of his trial affidavit). This amount included payments from the husband to the wife, payments for the wife’s tax liabilities, drawdowns from the G Super Fund, and payments for legal fees or as partial property settlement.
The Full Court explained in Gollings and Scott (2007) FLC 93-319 (“Gollings”) at [68]:
It would not normally be appropriate some years after separation to require each of the parties to account for any monies they had spent post-separation so as to determine whether or not that expenditure was reasonably necessary for their own self-support, and to the extent that it was not…
Add backs are exceptional and fall into three categories: where the parties have expended money on legal fees, where there has been a premature distribution of matrimonial assets, and “waste” or wanton, negligent, or reckless dissipation of assets: Candle & Falkner (2021) FLC 94-069 (“Candle”) at [52]. In Candle, the Full Court continued at [58]:
In our view, these authorities establish four relevant propositions. First, adding back property which has been distributed and spent is discretionary, and reflects an exceptional exercise of the discretion as an “accounting” or “balance sheet” exercise for the purposes of ss 79(2) and (4) to achieve justice and equity between the parties. Secondly, the nature of the expenditure reflected in add backs is relevant, and reasonably incurred expenditure does not usually come within accepted categories of addback. Thirdly, the decision in Stanford, followed by Bevan, does not necessarily require the conclusion that adding back notional property is per se an error, but proper consideration must be given to existing interests in property. Fourthly, in cases which are not exceptional, expended interim distributions can be taken up under s 75(2) rather than as part of the balance sheet exercise.
(Emphasis in original)
Ultimately, I did not understand the wife to dispute that those payments received by her should be treated as addbacks on the balance sheet. Some were characterised in Court orders as partial property settlement. A trial judge is not necessarily bound by the agreement of the parties as to the characterisation of interim payments, although it will be relevant that there is no basis for the trial judge not to give effect to the agreement of the parties: Phillips & Hansford (No 2) [2015] FamCAFC 138 at [11]. A categorisation of an interim payment as partial property settlement may be varied under the Court’s discretion to vary payments made in the exercise of the s 79 discretion: Gabel & Yardley (2008) FLC 93-386 at [57], [69], [73]; Strahan & Strahan (interim property orders) (2011) FLC 93-466 at [136].
But irrespective of any agreement, the lack of disclosure by the wife is important here. Although the husband accepted that some part of the funds received by the wife during the proceedings would have been spent on living expenses, it was also clear some may have been spent on legal fees, and the wife’s lack of disclosure made it impossible to determine what expenditure may have fallen into a recognised category of add-back or was unexceptional so as to be excluded. I am satisfied for these reasons that to achieve justice and equity between the parties the proposed add-backs (Item 62) as they appear on Exhibit “AA” should be included as notional assets of the wife.
Item 62A refers to monies actually drawn down by the husband from the G Super Fund. There are two amounts, $67,534 and $73,000 drawn down in 2017 and 2018 respectively. Although the amounts were uncontested, there was no clear agreement as to the treatment of this item on the balance sheet. In cross examination, the husband confirmed that he used these funds for living expenses because in those years he had “a lot of expenses and not a lot of income”. In accordance with authority, I find these amounts are not exceptional and I will not include them as add backs of notional property on the balance sheet. I will take account of them under s 75(2)(o).
Liabilities
The wife claimed the husband had made a loan to his sister, Ms AF, in 2006. The husband gave oral evidence that this money was a gift for renovations. The evidence was not challenged. Since the funds were provided in 2006 and there is no evidence of the husband acknowledging a loan after that date, even if a loan was made, it would be statute barred. I will not include this alleged loan in the balance sheet.
Items 35, 36, and 37 were the subject of some contest. The wife accepted the value of these liabilities, but expressed resistance to as to their treatment. There was also no dispute that they arose by the husband borrowing over $4 million to give to Ms JJ for the purchase of KK Street. In respect of liabilities, the husband contended that an amount of $2,634,423 should be included as his liability to reflect the likely taxation impost repayment of the Div 7A loan which was brought into existence by the purchase of KK Street.
The wife resisted this course. The wife argued that the Div 7A loan was $4,110,000, which will ultimately attract a tax liability of $2,634,423, and the husband also utilised another approximately $700,000 of matrimonial assets in the purchase and for renovations. Consequently, even when the value of KK Street of $6 million is included as the husband’s notional asset, the total cost to the balance sheet should be $7,444,423 minus $6 million, a difference of about $1,444,423. The wife argued this was a distortion which should be taken into account, although she did not seem to argue it should not appear on the balance sheet and accepted it was the evidence of Ms VV that her calculation of the tax impost assumed it would be repaid over seven years, in accordance with ATO guidelines.
I accept that the husband will be required to repay $2,634,423 over seven years. This is a precise and clear liability which has been incurred. But, there is superficial force in the wife’s contention that the manner in which KK Street was financed would cause a diminishment of the matrimonial pool as between the husband the wife if the resulting tax liability is included in the balance sheet. The wife would in effect be paying part of the husband’s tax liability. Although the value of KK Street has been brought into the balance sheet, this does not entirely offset the distortion created by the tax liability.
In Chorn and Hopkins (2004) FLC 93-204 at [71], the Full Court confirmed that determination of whether both parties should bear responsibility for taxation debts of one party to the marriage was to be decided by reference to what was just and equitable. It is therefore a question of whether it is just and equitable to bring the tax liability to account in the value of assets or to take account of the $2,634,423 under s 79(4)(e) and s 75(2)(o).
There is no rule of law that liabilities must be deducted from assets; the manner in which a particular liability should be treated is, ultimately, dependent upon the nature of the liability, the circumstances surrounding the liability, and the dictates of justice and equity shaped by each: Rodgers & Rodgers(No 2) (2016) FLC 93-712 at [36] and [40].
The Div 7A loan used to fund the purchase of KK Street was derived from financial resources and assets built up by the sole efforts of the husband, as I have found above at [52]. The X Trust had a profit of over $1.8 million for the financial year ended June 2020. The trust made a distribution of this amount to the Groves Trust, which then made a distribution of over $2 million to the husband and over $650,000 to Ms JJ. The husband used over $2,000,000 to retire the historical Div 7A loan by V Pty Ltd to the husband. V Pty Ltd then paid a dividend to the W Trust in the amount of over $2.5 million. The W Trust then made a distribution to Y1 Pty Ltd of over $2.5 million, which then loaned the husband over $3,000,000 by way of a Div 7A loan. This money was gifted to Ms JJ for the purchase of KK Street.
The wife herself had benefitted from the use of Div 7A loans in the purchase of Suburb R. Parties are entitled to get on with their lives after separation, and husband was “free to go about spending the money he earned post-separation in the furtherance of his relationship” with Ms JJ if he chose to do so, providing that “at the same time he properly met his obligations towards his wife and children for their due support”: Gollings at [68]. There was no evidence which satisfies me that the husband failed to provide “due support” to the wife or his children. In my view, the justice and equity of situation dictates that the liability of $2,634,423 should be deducted from the asset pool. Any distortion, such as that to which the wife referred, can be taken into account under s 79(4)(e).
The husband also sought reimbursement of two sums paid on behalf of the wife in respect of single expert fees, in the sums of $19,785 and $4,235. These will be excluded from the balance sheet as costs arising from the proceedings, and neither party appeared to seek for these sums to be included.
Finally, the husband sought the inclusion of a liability for any realisation costs and taxes associated with property adjustment pursuant to orders of this Court. He gave no value to this asserted liability. In such circumstances, it will be excluded from the balance sheet and taken into account under s 75(2)(o) as an additional liability that the husband will have to service.
The wife argued that she has a number of credit cards debts totalling approximately $38,000 and a loan of $168,765 owing to P Pty Ltd, which is trustee of Superannuation Fund 1. It was ultimately agreed that the credit card debts should be excluded from the balance sheet. The husband agreed that he would satisfy the loan owing to P Pty Ltd so it becomes his liability on the balance sheet.
Conclusions and asset pool
Based on these conclusions, the asset pool is as follows:
Ownership
Description
Agreed value
ASSETS
Joint
Artworks
$58,000
Husband
Interest in Y1 Pty Ltd
$221,000
Husband
Interest in the X Trust
$1,748,000
Husband
Interest in Y4 Pty Ltd
$10,962,000
Husband
Interest in the Groves Trust
$281,000
Husband
Westpac Bank (…67)
$15,000
Husband
Westpac Bank (…42)
$2,000
Husband
Westpac Bank (…68) – as to 50%
$11,000
Husband
Funds held in trust account of Mr AG [re renovations of Suburb DD]
$70,000
Husband
CBA Bank (…33) [Repairs Account]
$14,996
Husband
Motor Vehicle 1
$60,000
Husband
Jewellery
$31,470
Husband
Furniture
$30,000
Husband
Notional interest in KK Street, Suburb DD
$6,000,000
Husband
Monies held in trust on account of husband’s anticipated legal fees and disbursements
$281,861
Wife
Q Street, Suburb R
$4,800,000
Wife
25 percent interest in S Property, Suburb T
$75,000
Wife
Motor Vehicle 2 (UK)
$5,000
Wife
Motor Vehicle 3 (Australia)
$28,000
Wife
Interest in the W Trust [and interest in V Pty Ltd]
$15,000
Wife
Jewellery
$11,860
Wife
Furniture
$5,000
Wife
Bank accounts Australia
$8,123
Wife
Monies advanced to the wife/paid on her behalf to date
$1,004,137
Total
$25,738,447
LIABILITIES
Husband
Net Related third party loans as at 31 December 2021
$4,110,000
Husband
Related third party loans incurred from 1 January 2022 to date
$2,051,209
Husband
Tax arising from Div 7A Loan payment to Y1 Pty Ltd
$2,634,423
Husband
Amount owing re renovations of Suburb DD
$47,000
Wife
Loan from P Pty Ltd ATF Superannuation Fund 1
$168,765
Total
$9,011,397
ADDBACKS
Husband
Monies paid on account of husband’s legal costs and disbursements
$785,994
Total
$785,994
SUPERANNUATION
Member
Name of Fund
Type of Interest
Agreed value
Husband
Superannuation Fund 2
Accumulation
$96,409
Husband
G Superannuation Fund
SMSF
$860,540
Wife
G Superannuation Fund
SMSF
$942,318
Wife
UK Super Fund
Pension
$4,500
Total
$1,903,767
NET POOL (INCLUDING SUPERANNUATION):
$19,416,811
Consequently, if there was no property adjustment, with the percentages rounded, the husband would hold 65 percent and wife hold 35 percent of the net assets. Although this appears the same as the husband’s proposed outcome, in percentage terms at least, as noted, both parties agreed there should be a just and equitable property adjustment, and the wife argues for a division in her favour of up to 65 percent. It is therefore not appropriate to leave the assets and liabilities undisturbed.
I turn now to consider the application of Pt VIII of the Act and the factors set forth in s 79 and s 75(2).
CONTRIBUTIONS
Section 79(4) sets out the considerations to be taken into account by the Court in determining what order (if any) should be made under s 79 in property settlement proceedings.
Although the facts, and way in which the parties presented their cases, suggested the position regarding contributions before and after the global financial crisis or before and after 2011 was significantly different, there was no dispute that I should take a global approach to the assessment of contributions: Norbis v Norbis (1986) 161 CLR 513.
This accords with authority. The Court must consider all the contributions in an overall sense, both financial and non-financial, to the acquisition, conservation, and improvement of the parties’ assets, as well as to the welfare of the family during cohabitation and after separation: Norman & Norman [2010] FamCAFC 66; Kowalski and Kowalski (1993) FLC 92-342; G and G (2000) FLC 93-043. A broad approach is preferred, rather than reference to precise mathematical calculations: Burke and Burke (1981) FLC 91-055, although an evaluation of each party’s respective contributions is necessary: JEL and DDF (2001) FLC 93-075. Assumptions about equality of contributions should not be made, and there is no assumption that equal division is the starting point for any exercise of the Court’s discretion: Mallet v Mallet (1984) 156 CLR 605 at 610, 613, 625, 635–6, and 646–7.
In Dickons v Dickons (2012) 50 Fam LR 244, the Full Court explained:
17.…it is self-evident that financial contributions (whether direct or indirect) can be made to a relationship that have an effect on the property of the parties without those financial contributions finding their way directly into, or being directly linked to, specific property or, indeed, directly to the totality of the property available for distribution at the time of trial. Financial contributions can be made to the “...acquisition, conservation or improvement...” of property “...directly or indirectly...” (s 79(4)(a). Emphasis added). A financial contribution can be made indirectly by, for example, the use by parties of income or assets for purpose A freeing up the use of other income or assets for purpose B. Moreover, a particular financial contribution might have been used wholly in discretionary expenditure which, but for that contribution, would not have been available to the parties or would have required borrowings or a diminution of capital. Such a contribution can also, in that way, be seen, for example, as an indirect contribution to the conservation of property. Indeed, the principles discussed for example in In the Marriage of Kowaliw [1981] FamCA 70; (1981) FLC 91-092 and In the Marriage of Townsend [1994] FamCA 144; (1995) FLC 92-569, can be seen as an exception to that general proposition.
18. Any and all such contributions, whether or not they sound in, or are directly linked to, the property available for distribution, should be considered and assessed together with the nature, form and extent of all other contributions of all types contemplated otherwise by s 79(4).
19. That is true of assets or income generated within the relationship and it is equally true of assets or income coming from outside of the relationship (for example, as here, in the form of inheritances). In the same way, s 79(4) specifically requires the Court to take into account contributions made to the welfare of the family (and substantively and “...not in any merely token way...”; see, Mallett v Mallett [1984] HCA 21; (1984) 156 CLR 605 at 636 per Wilson J) notwithstanding that those contributions may not be, or cannot be seen to be, directly linked to the available property at trial, or any increase or decrease in the value of the property.
20. Put another way, consistent with authority, the s 79 discretion involves as a necessary requirement that “... trial Judges weigh and assess the contributions of all kinds and from all sources made by each of the parties throughout the period of their cohabitation and then translate such an assessment into a percentage of the overall property of the parties or provide for a transfer of property in specie in accordance with that assessment.” (In the Marriage of Aleksovski [1996] FamCA 111; (1996) FLC 92-705 at 83,437). In Aleksovski, Kay J outlined the well-known “gold bar” analogy and said “[w]hat is important is to somehow give a reasonable value to all of the elements that go to making up the entirety of the marriage relationship” (at 83,443).
21. Those same principles can be expressed as saying that the requirements of the section are met by approaching the assessment of contributions holistically and by analysing the nature, form, characteristics and origin of the property currently comprising that to which s 79 applies, and, in turn, analysing the nature, form and extent of the contributions (of all types) contemplated by s 79. That task is also undertaken by reference to the nature and form of the particular marriage partnership manifested by the particular circumstances of this particular marriage. Is it, for example, a relationship, as Deane J put it in Mallett at 640-641 “...where the parties have adopted the attitude that their marriage constituted a practical union of both lives and property...” or is it, for example, a union where parties lived very separate domestic and financial lives?
See also: Jabour & Jabour (2019) FLC 93-898 at [31]–[87]; Horrigan & Horrigan [2020] FamCAFC 25 at [35]–[49]; Barnell & Barnell (2020) FLC 93-961 at [30]–[43]; Benson & Drury (2020) FLC 93-998 at [35].
Below is a discussion of the evidence and my findings in relation to the relevant contributions under s 79(4) of the Act.
(a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage to the acquisition, conservation or improvement of any property of the parties to the marriage or either of them
Initial contributions
I have described and discussed the initial contributions above at [18]–[35].
Financial contributions during the relationship
As already recorded above, from 2011 the wife began spending most of her time overseas. The husband remained in in Australia and continued to conduct his business activities. These were described above at [32]–[37]. There was no dispute that it was the husband who worked to resurrect the finances of the parties after the collapse brought about by the global financial crisis. It is unnecessary to describe these in detail. It was not disputed by the wife. He provided funds to the wife whilst overseas.
The wife suggested in her evidence that she made financial contributions between 2011 and separation. She did not make clear in her evidence or submissions how this was done. I do not accept that she did make contributions.
Financial contributions post-separation
Although the husband sought costs against the wife, and the wife sought her costs to be paid by the husband, costs were not the subject of final submissions. There may be reasons why the position set forth in s 117(1) of the Act ought not apply. In such circumstances, I will order that any party who seeks costs to file the relevant application within 28 days of these orders.
CONCLUSION
For all the foregoing reasons, I am satisfied the orders set out at the commencement of these reasons should be made.
I certify that the preceding one hundred and eighty-eight (188) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Harper. Associate:
Dated: 18 November 2022
ANNEXURE A – HUSBAND’S MINUTE OF ORDERS
Suburb R Property
1.That pending the wife’s compliance with Order 5, 7, 12 and 13, the Husband forthwith pay (or cause to be paid) such sum owing (up to a maximum of $150,000) to P Pty Ltd ("P Pty Ltd") to discharge the mortgage secured against the property situate at and known as Q Street, Suburb R, Sydney in the State of New South Wales Folio … (“the Suburb R Property”) by P Pty Ltd (dealing number …) ["the P Pty Ltd Mortgage"].
2.That upon the wife’s compliance with Order 5, 7, 12 and 13, the Husband do all acts and things and sign all documents necessary to remove Caveat … placed by him on the Suburb R Property.
3.That pending compliance with Order 1 above, the Husband and the Wife each be restrained from doing causing or permitting any dealing with respect to their interest in the Suburb R property, including causing or permitting any act or thing to be done so as to encumber, further encumber or increase any facility secured against the Suburb R Property (including but not limited to the P Pty Ltd Mortgage) or to allow or cause any other person or entity to do so.
4.That simultaneously with compliance with Order 1 above (and subject to compliance by the Wife with Order 3 above), the Wife:
(a)as between the Husband and the Wife, be declared pursuant to s78 of the Family Law Act 1975 ("the Act") entitled to the entire right, title and interest in the Suburb R Property; and
(b)indemnify the Husband and keep him so indemnified from all actions, claims, suits, demands, and liabilities in relation to Suburb R property, and the P Pty Ltd Mortgage.
The Suburb T property
5.That simultaneously with compliance with Order 1 above, the parties do all acts and things to transfer the Wife's entire interest in the property situate at and known as S Property, Suburb T in the State of Queensland ("the Suburb T Property") to the Husband.
6.That simultaneously with compliance with Order 5 above, the Husband indemnify the Wife and keep her so indemnified from all actions, claims, suits, demands, and liabilities in relation to the Suburb T Property.
The Entities and Trusts
7.That simultaneously with compliance with Order 1 above, the wife do all acts and things to:
(a)resign from all offices and directorships held by her in:
(i)U Pty Ltd ("U Pty Ltd"), and/or
(ii)V Pty Ltd ("V Pty Ltd") ["the Identified Entities"];
(b)transfer to the Husband (or his nominee), her entire right, title, interest and shareholding in U Pty Ltd; and
(c)transfer to the Husband (or his nominee) all of her right, title and interest in, and to, all loan accounts held by her in the Identified Entities and/or monies otherwise owed to her by the Identified Entities (or any of them).
8.That simultaneously with compliance with Order 7 above, the parties do all acts and things to remove the Wife as a beneficiary (and where applicable, an appointor and/or a position holder) of the W Trust, the Groves Trust and the X Trust.
9.That simultaneously with compliance with the last of Order 7 and Order 8 above, the Husband indemnify the Wife and keep her indemnified for and against any liability of any nature whatsoever which the Wife may otherwise have at any time arising in any way in respect of the Identified Entities and/or the Groves Trust, the W Trust and/or the X Trust, whether:
(a)by reason of the Wife having been an employee, director, officer and/or shareholder of any of the Identified Entities and/or a beneficiary of the W Trust, the Groves Trust and/or the X Trust by reason of the Wife having been involved in the business conducted by any of the Identified Entities;
(b)by reason of the receipt by the Wife of any money from any of the Identified Entities previously and/or distributions from the W Trust, the Groves Trust and/or the X Trust; and/or
(c)by reason of the Wife having given or executed a guarantee of any liabilities of any of the Identified Entities or the W Trust, the Groves Trust and/or the X Trust, to any person or corporation including but not limited to the Australian Taxation Office,
or otherwise.
10.That simultaneously with compliance by the Wife with the last of Order 7 and Order 8 above, the Husband indemnify the Wife and keep her indemnified for and against any liability of any nature whatsoever which the Wife may otherwise have at any time arising in any way in respect of:
(a)Y1 Pty Ltd (“Y1 Pty Ltd") or any subsidiaries thereof;
(b)Z Holdings Pty Ltd ("Z Holdings") or any subsidiaries thereof;
(c)Z Securities Pty Ltd ("Z Securities");
(d)Z Finance Pty Ltd ("Z Finance");
(e)AA Pty Ltd ("AA Pty Ltd");
(f)Y2 Pty Ltd ("Y2 Pty Ltd");
(g)Y3 Company (“Y3 Company”) or any subsidiaries thereof;
(h)BB Company (“BB Company”);
(i)Y4 Pty Ltd ("Y4 Pty Ltd") or any subsidiaries thereof;
(j)the Y5 Joint Venture;
(k)the Y6 Joint Venture;
(l)the Y7 Joint Venture;
(m)the Y8 Joint Venture;
(n)CC Pty Ltd (“CC Pty Ltd”)
whether:
(o)by reason of the Wife having been an employee, director, officer and/or shareholder of any of the aforesaid entities;
(p)by reason of the Wife having been involved in the business conducted by any of the aforesaid entities;
(q)by reason of the receipt by the Wife of any money from any of the aforesaid entities previously; and/or
(r)by reason of the Wife having given or executed a guarantee of any liabilities of any of the aforesaid entities, to any person or corporation including but not limited to the Australian Taxation Office,
or otherwise.
The Self Managed Superannuation Fund
11.That these Orders act as authority for the husband to, and the husband by this Order, be appointed as the delegate of the Trustees of the G Superannuation Fund pursuant to clause 4.09(c) of the Deed of amendment of the G Superannuation Fund dated 1 June 2006.
12.The parties are each restrained from doing any act or thing so as to cause or permit any interference with the delegate’s compliance with Order 13 below.
13.That the delegate of the Trustees forthwith do all acts and things (including instructing accountants to assist) and sign all documents as may be necessary as Trustees of the G Superannuation Fund to do all acts and things as recommended by the auditor, Mr J, to make the G Superannuation Fund compliant with the Superannuation Industry (Supervision) Act 1993 (Cth) and the Superannuation Industry (Supervision) Regulations 2001 (Cth) including but not limited:
(a)causing all assets of the Fund to be held in the correct name (‘Mr Groves and Ms Groves as trustees for the G Superannuation Fund’);
(b)to the extent that the amount of $5,828 (together with any interest with any interest thereon) is repayable to the fund by the husband in respect of FY2018, the husband to attend to such payment forthwith; and
(c)causing the financial statements for the years ending 30 June 2018 – 30 June 2021 to be finalised, and then in accordance with the requirements of the Act, the Superannuation Industry (Supervision) Regulations 1994 and the Family Law (Superannuation) Regulations 2001 and in order of priority:
(d)rollover by way of cash payment 100% of the Wife's member interest in the G Superannuation Fund into a fund of the Wife's choosing ("the Wife's New Fund"); and
(e)remove the Wife as a Trustee and member of the G Super Fund.
14.That Order 13 have effect from the operative time and the operative time for the purposes of that order be the date 7 days from date of these Orders.
The Payment to the Wife
15.That simultaneously with compliance by the Wife with the last of Orders 5, 7, 8, 12 and 13 above and Order 16 below, the Husband pay an amount to the wife calculated as follows:
(a)such sum to the Wife to achieve an overall division of the property pool as to 65% to the Husband and 35% to the Wife (with the payment to P Pty Ltd pursuant to Order 1 above constituting part of the Wife's 35%),
(b)less $19,785 (being the wife’s share of joint expenses paid for by the husband that were not by way of partial property settlement).
General
16.That the Wife make the following items available for collection from the Suburb R Property by the Husband within 7 days of date of these Orders:
(a)the painting; and
(b)the collectible books,
which items the Wife be restrained from doing any act or thing (or allowing anyone to do any act or thing to thing) in respect of pending collection, having as its cause and effect the damaging, encumbering, sale, disposal [or similar] of same.
17.That save as specifically provided for by any Order to the contrary, as against the Wife, the Husband be declared the sole owner of, and the Wife then have no interest in, all other personal property (including choses in action) of whatsoever nature and kind in the possession of the Husband at the date of the making of this Order, including but not limited to any right, title, interest and/or shareholding in any entity and/or Trust in which he holds an interest (whether directly and/or indirectly) jewellery, furniture and effects, the funds in all bank accounts in the Husband's sole name, the Husband's Motor Vehicle 1, the Husband’s super fund, and the Husband's Artworks (including as between the Husband and Wife, any interest in the Suburb DD Property).
18.That save as specifically provided for by any Order to the contrary, as against the Husband, the Wife be declared the sole owner of, and the Husband then have no interest in, all other personal property (including choses in action) of whatsoever nature and kind in the possession of the Wife at the date of the making of this Order, including but not limited to jewellery, furniture and effects, the funds in all bank accounts in the Wife's sole name, the Wife’s UK pension, and the Wife's Motor Vehicle 2 and Motor Vehicle 3.
19.That the parties each do all acts and things and execute all documents, authorities and writings as are necessary to give effect to all or any of these Orders.
20.That subject to these orders, each of the husband and the wife release the other from all actions, proceedings, claims, demands, debts, costs, and expenses whatsoever and howsoever arising which either of them had or may have against the other for or by reason of or in respect of any act, cause, matter, or thing.
21.That in default of any party doing any act or thing, taking any step and/or executing any such document necessary to give effect to these Orders, the Registrar of the Federal Circuit and Family Court of Australia at Sydney or such other person appointed by the Court be authorised pursuant to section 106A of the Family Law Act to execute all such documents in the name of the defaulting party and to do all acts and things necessary to give validity and operation to such documents and the defaulting party shall pay the costs of the non-defaulting party in relation thereto.
22.That the Wife pay the Husband's costs of and incidental to these proceedings.
ANNEXURE B – WIFE’S MINUTE OF ORDERS
1.That the Wife be declared the sole owner of Q Street, Suburb R in the state of New South Wales (the Suburb R Property) and be declared pursuant to s78 of the Family Law Act 1975 (the Act) entitled to the entire right, title and interest in the Suburb R Property.
2.The Husband will do all acts and prepare all documents necessary to remove the caveat from the Suburb R property and pay all costs for the removal of the caveat within 14 days of the date of the Orders.
3.That the Wife be declared the sole owner of the quarter share owned by the Wife, of the S Property, Suburb T in the state of Queensland (the Suburb T property) and be declared pursuant to s78 of the Family Law Act 1975 (the Act) entitled to the entire right, title and interest in the Suburb T Property.
4.The Husband will provide to the Wife all documents in relation to the Suburb T property in her name, within 21 days of the date of the Orders.
5.The Husband will be solely responsible for all actions he has taken in relation to the Suburb T property up to the date of these Orders and will indemnify the Wife against any and all liabilities and actions taken by the him until the date of the Orders.
6.The Wife will be solely entitled to the W Trust and
(a)The Husband will provide to the Wife all documents in his possession and under his control in relation to the W Trust, including and not limited to any amendments to the W Trust and any amendments to any other Trust or corporate entity which have any control or influence or bearing over the W Trust with 21 days of the date of these Orders.
(b)The Husband will prepare all necessary documents at his cost and then he will do all acts and sign all necessary documents, either personally or through a corporate entity under his control, to remove himself and any other member of his family, as a beneficiary, appointor, trustee and of any position held either personally or through a corporate entity under the control of the Husband, which holds influence upon the W Trust, within 21 days of the date of these orders.
(c)The Husband will indemnify the Wife from any and all actions taken by him since the inception of the Trust to date of the transfer to the Wife in relation to the W Trust.
(d)The Husband will be solely liable for any income tax payable in the W Trust if there is not enough money held in the W Trust bank account at the time the income tax return is assessed for all income tax liabilities up to the financial year ending after the time the Wife takes control of the Trust.
(e)Any asset held or controlled by the Husband, either directly or by a corporate entity for the W Trust, including but not limited to any asset which is currently owned by the W Trust but not due to mature until the future, will be retained by the W Trust and the Wife will be solely entitled to control and ownership of such assets for her sole use and benefit.
(f)In the event that the Husband removes any assets or makes any distributions out of the W Trust to himself or any member of his family, in between the date of the hearing and the judgement being given, the Husband is to pay that money to the Wife within 14 days of the date of the Orders.
(g)The Husband will prepare all documents necessary to return the Wife as a Beneficiary, Appointer and Trustee of the W Trust within 21 days of the date of these Orders at his own cost.
7.That all moneys paid to the Wife since the commencement of these proceedings are treated as a gift from the Husband to the Wife and are not taken into account in the division of the matrimonial assets.
8.The Husband will do all acts and sign all necessary documents to transfer the Wife’s insurance/s policy in the Superannuation fund with EE Insurance and any and all insurance policies which are in the Wife’s name, which are owned by the Husband within 14 days of the date of these Orders.
9.The Husband will provide to the Wife within 14 days of the date of these Orders all documents including and not limited to correspondence and share statements, dividends statements including but not limited to ANZ share trading accounts and all other share registry, issue sponsor statements, share cash accounts and bank accounts in relation the G Superannuation Fund from the inception of the fund.
10.That the Husband pay into the G Superannuation Fund in the Wife’s name, the same amount paid on her behalf for the financial year ending 2014, for each year not paid by the Husband via V Pty Ltd from financial years ending 2016 to date of the Orders.
11.That G Superannuation Fund, the Superannuation Fund 2 in the Husband’s sole name, the Wife’s UK pension and the EE Insurance policies held within the G Superannuation Fund to be divided equally between the parties.
(a)To achieve the division of the assets referred to herein
(i)All breaches in addition those identified from the Auditors report issued in September 2022, of the G Superannuation Fund are to be rectified by the Husband at his personal cost to the standard required by the Australian Taxation Office (ATO)
(ii)The Wife will be paid the pension within 7 days of compliance of (i) which was not paid to her from 2018 to the date of the Orders
(iii)The income tax returns for the G Superannuation Fund be prepared and submitted to the ATO
(iv)Each asset will be valued at the date of the Orders after completion of the actions above
(v)The total value will be divided equally between the parties
(vi)Included in each party’s share, the Wife will take her UK pension and the G Superannuation fund entity
(vii)The Husband will take his Superannuation Fund 1
(viii)The balance of each party’s total amount is to be taken as shares in specie or cash as nominated by each party.
(ix)In the event the parties cannot agree to the division of the balance of their share within 21 days of the valuation of the assets herein, the shares and cash held in the bank accounts will be divided equally to make up each party’s share.
(b)Within 7 days of the transfer/ rollover of the Husband’s half share of the Fund, he will resign as Director and Trustee of the G Superannuation Fund.
(c)The Husband will be solely liable for any and all breaches which have taken place within the Fund and will indemnify the Wife against any and all liability.
12.That Order 11 have effect from the operative time and the operative time for the purposes of that order be the date 21 days from the date of these Orders.
13.That the Wife make available to the Husband within 21 days of the date of these Orders, the following items from the Suburb R property.
(a)One painting
(b)The collectible books
14.14. That the Wife be solely entitled to the following assets in her possession and control
(a)Motor Vehicle 3
(b)All her jewellery
(c)All furnishings and chattels held in the Suburb R house
15.That the moneys paid to Ms AF by the Husband of $250,000 be taken as an asset held by the Husband in the overall division of the property settlement.
16.That within 28 days of the date of these Orders, the Husband will pay to the Wife the costs incurred by the Wife for the following:
(a)the local council rates, water board rates, electricity and gas charges, telephone account for the Suburb R house outstanding at the date the Wife took possession of the Suburb R house on 30 December 2016, and
(b)the storage costs incurred at the Suburb AJ NSW and AK Region NSW storage units, until the storage facilities were emptied and released, and
(c)the Suburb R house alarm service fees up to 1 January 2017 and
(d)credit card interest incurred by the Wife from the date in 2018 in which the Wife’ pension from the G Investment Superannuation Fund was stopped.
17.That the overall division of the matrimonial property be divided on the basis of 60% to the Wife and 40% to the Husband and the Husband pay to the Wife such sum as to achieve an overall division of the matrimonial property within 30 days of the date of these Orders
18.The Husband will provide to the Wife within 14 days of the date of these Orders all documents necessary for her to complete her income tax returns from the financial year ending 2017 to date of these Orders, including but not limited to all rental details for the Suburb T and Suburb NN properties and all distributions and or income splitting which the Husband allocated to the Wife from the date of separation.
19.The Husband will be solely liable for all income tax, fines and interest payable by the Wife to the Australian Taxation Office until competition of her outstanding income tax returns.
20.That save as specifically provided for by any Order to the contrary, the Wife be declared the sole owner of, and the Husband have no interest in, all other personal property, including choses in action, of whatsoever nature and kind in the possession of the Wife at the date of making of this Order, including but not limited to jewellery, furniture and effects, funds in bank accounts in the Wife’s sole name and the Wife’s Motor Vehicle 3.
21.That save as specifically provided for by any Order to the contrary, the Husband be declared the sole owner of, and the Wife then have no interest in, all other personal property, including choses in action, of whatsoever nature and kind in possession of the Husband at the date of making this Order, including but not limited to jewellery, furniture and effects, funds in all bank accounts in the Husband’s sole name, Motor Vehicle 1 and any interest in Suburb DD property.
22.That the parties each do all acts and things and execute all documents, authorities and writings as are necessary to give effect to all and any of these Orders within 14 days from the receipt of the documents.
23.That in default of any party doing any act or thing, taking any step and /or executing any such document necessary to give effect to these Orders, the Registrar of the Federal Circuit and Family Court of Australia at Sydney or such other person appointed by the Court be authorised pursuant to section 106A of the Family Law Act to execute all such documents in the name of the defaulting party and to do all acts and things necessary to give validity and operation to such documents.
24.That the Husband pay the Wife’s costs of and incidental to these proceedings.
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