Halstron & Halstron
[2021] FamCA 437
•24 June 2021
FAMILY COURT OF AUSTRALIA
Halstron & Halstron [2021] FamCA 437
File number(s): SYC 2788 of 2016 Judgment of: MCEVOY J Date of judgment: 24 June 2021 Catchwords: FAMILY LAW – PROPERTY SETTLEMENT– where it is just and equitable for property interests to be adjusted –parties in dispute in relation to addbacks, certain assets and the quantum of certain liabilities in the asset pool – where husband asserts a loan owing to his brother – loan to be included on the joint balance sheet – application to lead further evidence in relation to former matrimonial home and fall in the value of shares by reason of COVID-19 – where husband established the parties’ superannuation fund and made all financial contributions to the parties’ respective member entitlements in the fund, and where the parties since separation have separately acquired, conserved and/or improved their own self-managed funds – where wife seeks payment to her of a sum certain from the non-superannuation pool and husband seeks that the wife receive her proportionate share by distribution or transfer in specie – where wife to receive a proportion of the shares in specie – where parties disagree as to when their relationship constituted a de facto relationship – discussion of s4AA of the Family Law Act 1975 (Cth) – where husband made significant initial financial contributions and during the marriage – where parties found to have a made greater parenting contributions at different periods in time – small s 75(2) adjustment in the wife’s favour – multiple considerations taken into account pursuant to s 75(2)(o) –final total property division of 65 per cent in favour of the husband found to be just and equitable Legislation: Family Law Act 1975 (Cth) ss 4AA, s 75, s 79
Limitation Act 1969 (NSW)
Family Law Rules 2004 rr 13.01(2) and 13.04(g)
Cases cited: Bevan & Bevan (2013) 279 FLR 1
Biltoft v Biltoft (1995) 92-615
Bonnici v Bonnici (1992) FLC 92-272
Border & Border (No.3) [2008] FamCA 830
Bulleen v Bulleen [2010] FamCA 187
Calvin & McTier [2017] FamCAFC 125
Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588
Davey v Lee (1990) 13 Fam LR 688
EB v CT (No.2) [2008] QSC 306
Ferraro & Ferraro (1993) FLC 92-335
Fields & Smith (2015) FLC 93-638
Gabel & Yardley (2008) FLC 93-386
Garrett v Garrett (1984) FLC 91,539
Gould v Gould (2007) FLC 93-333
Gelley & Gelley (1992) FLC 92-290
Holland & Holland [2017] FamCAFC 166
Hurst & Hurst [2018] FamCAFC 146
In the Marriage of Black and Kellner (1992) FLC 92-287
In the Marriage of Mitchell (1995) 120 FLR 292
In the Marriage of Nutting [1978] FLC 77,094 at 77,094
In the Marriage of Weir and Weir (1993) FLC 92-338
Jarrott & Jarrott (No. 2) [2012] FamCAFC 72
Jabour & Jabour (2019) FLC 93-898
Jonah & White (2012) FLC 93-522
Kouper & Kouper (No 3) [2009] FamCA 1080
Kowaliw v Kowaliw (1981) FLC 91-092, 76,644;
Lynam v Director-General of Social Security (1983) 52 ALR 128
Mallet v Mallet (1984) FLC 91-507,
McLusky & McLusky [2014] FamCA 93
Narkis v Narkis (No 3) [2019] FamCA 278
Omanici v Omanici (2005) FLC 93-218
Pierce & Pierce (1999) FLC 92-844
Quinn v Quinn (1979) FLC 90-677
Reid v Brett [2005] VSC 18
Robb v Robb (1995) FLC 92-555
Rodgers & Rodgers [2016] FamCAFC 68
Rodgers & Rodgers (No 2) [2016] FamCAFC 104
Rolfe & Rolfe (1979) 90-629
Rosati & Rosati (1998) FLC 92-804
Roy v Sturgeon (1986) 11 Fam LR 271
Salters & Salters [2020] FamCA 138
Sigley & Cullen (No. 3) [2015] FamCA 825
Sinclair v Whittaker [2013] FamCAFC 129
Smith v New South Wales Bar Association (1992) 176 CLR 256
Stanford v Stanford (2012) 247 CLR 108
Summitt & Summitt & Ors (Re-Opening) [2009] FamCA 365
Trevi & Trevi [2018] FamCAFC 173
Urban Transport Authority v NWEISER (1992) 28 NSWLR 471
Number of paragraphs: 299 Date of hearing: 25-27 June 2019; 17-20 February 2020; 28 May 2020; 28 May 2021 Date of last submissions: 28 May 2021 Place: Melbourne Counsel for the Applicant: Mr Sansom SC (25-27 June 2019)
Mr Dura
Solicitor for the Applicant: Crumpton Lawyers Counsel for the Respondent Mr Strum QC
Ms Renwick
Solicitor for the Applicant: Lander & Rogers ORDERS
SYC 2788 of 2016 BETWEEN: MS HALSTRON
Applicant
AND: MR HALSTRON
Respondent
ORDER MADE BY:
MCEVOY J
DATE OF ORDER:
24 JUNE 2021
THE COURT ORDERS THAT:
(1)Definitions
For the purposes of these orders:
"the F Trust" means the F Investments Pty Ltd ATF the Halstron Family Trust.
“the Trust” means Halstron Investments Pty Ltd ATF the G Investment Trust.
“the Trusts” mean both the Halstron Family Trust and the G Investment Trust.
"the Suburb J property" means the property situated at H Street, Suburb J in the State of New South Wales registered in the Husband's sole name.
“the US Properties” means the properties situate at K Street, City K in the L State, USA; M Street, Suburb N in the L State, USA; O Street, Suburb P L State, USA; Q Street, City R L State, USA and S Street, City T L State USA.
"The Mr Halstron Superannuation Fund" means the Mr Halstron Superannuation Fund No.2 of which U Pty Ltd is the Trustee, the Husband being the sole director of the Trustee and the only member of the fund.
"The Ms Halstron Superannuation Fund" means the Ms Halstron Superannuation Fund of which V Pty Ltd is the Trustee, the Wife being the sole director of the Trustee and the only member of the fund.
POOL A – Division of personal Assets Excluding Listed Shares held in the parties’ personal names
(2)Within 60 days the husband pay or cause to be paid to the wife the sum of $561,972, so that the wife retains 35% of the net assets in Pool A.
(3)Within 28 days, the husband make available for collection by the wife from the Suburb J Property the wife’s Grandmother’s silverware and crystal items and trio crockery sets (located in the dining room cupboard).
(4)The husband retain the following assets for his own use and benefit absolutely, to the exclusion of the wife:
(a)the Suburb J property;
(b)his motor vehicle 1;
(c)his motor vehicle 2;
(d)funds standing to his credit in any bank account in his personal name;
(e)the Mr Halstron Superannuation Fund, subject to the adjustment in orders 18 and 19 below;
(f)the Trust; and
(g)the F Trust.
(5)The wife retain the following assets for her own use and benefit absolutely, to the exclusion of the husband:
(a)the payment of $275,000 made to her pursuant to the orders of 6 June 2016, with the uncharacterised sum of $75,000 to also be categorised as a part property settlement;
(b)the funds withdrawn by the wife from the parties' joint Canadian W Bank account in the sum of $80,000;
(c)the proceeds of sale of X Street, Town Y in the State of New South Wales in the agreed sum of $850,000;
(d)the proceeds of sale of Z Street, Suburb AA, BB Province Canada in the sum of $221,000;
(e)her CBA CommSec share portfolio;
(f)her jewellery;
(g)her motor vehicle 3;
(h)the loan owning from CC Pty Ltd;
(i)funds standing to her credit in any bank account, including any travel cards in her name; and
(j)her interest in the Ms Halstron Superannuation Fund.
(6)The husband be liable for and indemnify the wife and keep the wife indemnified against all payments and liabilities in his sole name, including but not limited to the Viridian Line of Credit (account ending #...67), Viridian Line of Credit (account ending #...75), Westpac overdraft, CBA overdraft, Mastercard credit card (ending #..87), Mastercard credit card (ending #..38), all and any loans owing to his brother, Mr A Halstron, and any outstanding accountancy fees and legal fees.
(7)The wife be liable for and indemnify the husband and keep the husband indemnified against all payments and liabilities in her sole name, including but not limited to any credit cards in her name, the loan owing to CC Pty Ltd and legal fees.
POOL B – Division of publicly listed shares held in the parties’ personal names
(8)Within 30 days the husband and the wife do all acts and things and sign all documents necessary to transfer or cause to be transferred to the wife 35% of all publicly listed shares held in the husband's name as at the date of trial AND FOR CLARITY IT IS NOTED that the intent of this order is that the wife is to receive 35% of each separate shareholding of the husband, such that if the husband holds shares (for example) in companies A, B and C, the wife shall receive:
(a)35% of the company A shares;
(b)35% of the company B shares;
(c)35% of the company C shares -
AND in the event that the shares in any given company have different cost-bases, the wife receive 35% of each tranche of shares in that company held by the husband at each separate cost base.
POOL C – Alteration of the parties’ interests in the Trust and the F Trust
US Properties
(9)Within 7 days of these orders the husband and the wife sign all documents and do all acts and things required to list the US Properties for sale on such terms as may be agreed in writing and failing agreement as follows:
(a)the property manager for the US Properties be appointed as the selling agent (“the Selling Agent”);
(b)the reserve price for the sale of each of the US Properties be the values ascribed in the valuations obtained by the parties as part of these proceedings;
(c)the mode and other terms of sale be as recommended by the Selling Agent.
(10)Upon settlement of the sale of each of the US Properties, the parties do all acts and sign all documents necessary to distribute the proceeds of sale in the following manner and priority:
(a)first, to pay all costs and commissions of the sale;
(b)secondly, to pay all outstanding council and water rates in respect of the property sold;
(c)thirdly, to pay or make provision for payment of any taxation imposed upon or arising from the sales of the US Properties, together with the accounting and winding-up costs of the company Halstron US Inc pursuant to order 11 below, in the following manner:
(i)the parties obtain an estimate of all taxation payable (if any), accounting and winding-up costs for Halstron US Inc from the Trust’s accountant, Mr PP of PP Accountants; and
(ii)the parties set aside a portion of the proceeds of sale(s) sufficient to meet the estimated costs in 10(c)(i) in an interest bearing account in the name of the Trust, with those funds to be used to meet such taxation and accounting and winding-up costs as and when same fall due and any remaining balance be divided in the proportions of 65% to the Husband and 35% to the Wife;
(d)fourthly, to repay any costs incurred in preparing the property for sale, including the cost of the valuation of the property for the purpose of these proceedings;
(e)finally, the remaining balance be distributed in the proportions of 35% to the wife and 65% to the husband.
(11)No later than 21 days after the settlement of the sale of the last of the US Properties, the parties do all such acts and things and sign all documents necessary to wind up Halstron US Inc, with the costs of the winding up to be paid from the funds set aside pursuant to paragraph 10(c)(ii) above.
Cash and Shares of the Trusts
(12)Within 30 days the husband and the wife in their capacities as directors of the Trust do all acts and things and sign all documents necessary to transfer or cause to be transferred to the wife by way of capital distribution, 35% of all publicly listed shares held by the Trust as at the date of trial; AND FOR CLARITY IT IS NOTED that the intent of this order is that the wife is to receive 35% of each separate shareholding of the Trust, such that if the Trust holds shares (for example) in companies A, B and C the wife shall receive:
(a)35% of the company A shares;
(b)35% of the company B shares;
(c)35% of the company C shares -
AND in the event that the shares in any given company have different cost-bases, the wife receive 35% of each tranche of shares in that company held by the Trust at each separate cost base.
(13)Within 30 days of these orders the husband and the wife in their capacities as directors of the Trust do all acts and things and sign all documents necessary to pay or cause to be paid to the wife the sum of $42,082.
(14)Within 7 days of the parties’ compliance with orders 9, 10, 11, 12 and 13 (whichever occurs last), the husband and the wife do all things necessary and sign all such documents, at the husband's expense:
(a)for the wife to be forthwith released from any and all director’s and/or personal guarantees given to any financial institution in favour of the husband, the Trust and the F Trust;
(b)for the wife to resign any and all offices she holds in the Trust and the F Trust and relinquish any and all right and title in the Trust and the F Trust and assign to the husband any interest, shareholding and any other entitlement she may have in the Trust and the F Trust inclusive of but not limited to transferring to the husband any and all shareholdings and assigning to the husband all credit and debit loan accounts;
(c)for the husband to be liable for and pay and indemnify the wife and keep her indemnified against any and all unpaid liability howsoever arising from the date of these orders by reason of any office-holding, position and/or distributions and/or beneficial entitlement (if any) that she may have or previously have had in the aforesaid entities, including but not limited to taxation and all interest, penalties, fines and charges assessed or hereinafter assessed against the aforesaid entities (or any one of them) and/or her personally and from all proceedings, costs, claims and demands howsoever arising from or in respect thereof, save as otherwise provided in these orders; and
(d)for the husband to release or procure the release of the wife and pay and indemnify the wife and keep her indemnified from any and all liabilities (loans, guarantees, mortgages) of or secured against the assets of the Trust and the F Trust, save as provided for in order 15.
(15)In the event that there are any unforeseen taxation or accounting liabilities incurred by the Trust arising from the implementation of these orders, such liability be paid as to 65% by the husband and 35% by the wife.
Pool D – Superannuation
(16)The husband in his personal capacity and in his capacity as director of the Trustee of the Mr Halstron Superannuation Fund hereby acknowledges procedural fairness in respect of the superannuation split contained in these orders.
(17)Paragraphs 18 to 20 have effect from the operative time.
(18)The operative time for the purpose of paragraph 19 is 30 days from the date of these orders (“the Date”).
(19)In accordance with section 90XT(1)(a) of the Family Law Act 1975 (Cth) on the Date:
(a)whenever a splittable payment becomes payable to the wife from the Mr Halstron Superannuation Fund, the wife is entitled to be paid the amount of Y, where Y is calculated as follows:
(i)Y is 35% of X, less Z;
(A)X is the total combined value of the Mr Halstron Superannuation Fund and the Ms Halstron Superannuation Fund as at the Date including but not limited to:
(B)the value of the shares in the Ms Halstron Superannuation Fund as at the Date;
(C)cash in the Ms Halstron Superannuation Fund as at the Date;
(D)other assets of the Ms Halstron Superannuation Fund including loans owed to the fund, managed investments and derivate investments;
(E)the value of the shares in the Mr Halstron Superannuation Fund as at the Date;
(F)cash in the Mr Halstron Superannuation Fund as at the Date plus an additional $200,000;
(ii)Z is the total value of the Ms Halstron Superannuation Fund as at the Date which includes:
(A)the value of the shares in the Ms Halstron Superannuation Fund as at the Date;
(B)cash in the Ms Halstron Superannuation Fund as at the Date –
(C)all other assets of the Ms Halstron Superannuation Fund, including but not limited to loans owed to the fund, managed investments and derivative investments -
and there is a corresponding reduction in the entitlement that the husband would have in the Mr Halstron Superannuation Fund; and
(b)the husband in his capacity as director of the Trustee of the Mr Halstron Superannuation Fund, do all acts and things necessary and sign all documents required to roll over the superannuation split in order 19(a) to the Ms Halstron Superannuation Fund.
(20)For the purposes of order 19, the rollover of the wife’s superannuation split to the Ms Halstron Superannuation Fund is to be effected by way of cash transfer, with:
(a)the husband to be at liberty to sell such shares as required to give effect to the cash transfer; and
(b)the amount of the cash transfer to be reduced by 35 per cent of the realisation costs reasonably arising from the sale(s) in the preceding sub-paragraph.
(21)Pending compliance with order 19 above and save as provided for in order 20, the husband and the wife be and are hereby restrained from transferring, disposing of or dealing with the assets of their respective self-managed superannuation funds or otherwise reducing the value of their self-managed superannuation funds without the prior written consent of the party.
Other Orders
(22)Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:
(a)monies standing to the credit of the parties in any bank account are to become the property of the party in whose name the account is registered;
(b)monies standing to the credit of the parties in any joint bank accounts are to become the property of the husband;
(c)each party retain for their sole use and benefit any superannuation benefits accrued in their sole name;
(d)insurance policies remain the sole property of the owner named therein;
(e)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders; and
(f)each party be solely responsible for any liability of whatsoever nature and kind in their respective names, including but not limited to any credit card liability.
(23)Save as otherwise provided in these orders, all previous orders of this Honourable Court be and are hereby discharged, including but not limited to all and any injunction issued against the husband in respect to the Trust on 12 June 2018.
(24)Liberty to apply be reserved to the parties in relation to the implementation of these orders and the outstanding issue concerning the shares which are not publicly listed to which the wife claims an entitlement.
(25)All extant applications are otherwise dismissed.
Note: The form of the order is subject to the entry of the order 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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the Halstron & Halstron has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
McEVOY J
This is a longstanding and intractable dispute in which the parties, Ms Halstron (“the wife”) and Mr Halstron (“the husband”), seek orders altering their interests in property pursuant to s 79(1) of the Family Law Act 1975 (Cth) (“the Act”). It is accepted by both that it would be just and equitable for the Court to make orders pursuant to s 79 of the Act.
The parties are in dispute in relation to the question of various addbacks, as well as the value of certain assets and the quantum of certain liabilities in the asset pool. There are also significant differences between them in relation to contributions, and the matters required to be considered pursuant to s 79(4)(e) of the Act. It will therefore be necessary to make findings to determine the composition of the asset pool, as well as the value of the assets and the quantum of the liabilities to be included within it. Attention will then need to be given to the considerations prescribed in s 79(4) of the Act in order to determine what orders would be appropriate pursuant to s 79(1) of the Act.
The wife’s position on contributions is that there should be between 40 to 45 per cent of the parties’ net assets to her, and 55 to 60 per cent to the husband, subject to certain significant caveats. She maintains that there should be an adjustment of 10 per cent in her favour. The husband, by contrast, contends that a division of the parties’ net assets 70 per cent in his favour and 30 per cent to the wife based on their respective contributions would be appropriate. It is his position that if the Court were to assess the wife’s contributions as being greater than 30 per cent, there should be a s 75(2) adjustment in his favour so that the ultimate result is 70/30 per cent in his favour.
As will be seen, the asset pool is in substance as contended for by the husband. Further, it is clear that the husband has made substantial financial contributions, including by way of a significant initial contribution and by reason of a sizeable inheritance from his mother. Also, since being made redundant in 2009 the husband has played a significant role in caring for the three children of the marriage (now all adults), and more recently the two younger children of the marriage. He has done so while continuing to provide financially for the children through his share trading activities. In addition, the husband cared for and generously provided for the wife’s child of an earlier relationship. Although the wife has also made important contributions to the welfare of the family during the marriage, for reasons I will elaborate the husband’s contributions must be assessed as more significant.
Ultimately I consider that the parties’ contributions should be assessed on a 67.5/32.5 per cent basis in favour of the husband. Insofar as any adjustment pursuant to ss 79(4)(e) and 75(2) of the Act is concerned, I have formed the view that a modest adjustment of 2.5 per cent in favour of the wife would be appropriate.
In all the circumstances a division of the parties’ net assets including superannuation on a 65 per cent basis in favour of the husband would be appropriate for the purposes of s 79(1) of the Act. I am satisfied that such a division would be just and equitable and, accordingly, orders broadly along the lines of the orders now proposed by the husband will be made, save that the orders will reflect a 65 per cent division of the parties’ net assets. Insofar as the parties’ shareholdings are concerned, the orders proposed by the husband, which provide for the in specie distribution of the relevant shares, accommodate in a sensible and equitable way the significant fluctuation in share prices since the trial having regard to the COVID-19 pandemic and the difficulties presented by different costs bases, capital gains tax and realisation costs.
However before embarking on the odyssey which the parties’ disagreements present, it must be observed that this is a matter which should have been compromised long ago. The parties have no doubt paid a high price for their inability to do so.
BACKGROUND
The wife was born in 1964 and is 56 years old. She currently works part-time in client service.[1] The wife admits to commencing a relationship with another person in about March 2017 after separation, but she denies that she is cohabiting with him or that they share finances. Her position is that the relationship is “somewhat casual”.[2] The husband says that the true extent of the wife’s relationship is unknown and suggests that the wife’s attempts to minimise the relationship during cross-examination leave open the inference that she is not being truthful about her relationship and that she could in fact be cohabiting with this person.[3] It will be necessary to return to this issue.
[1] Wife’s Financial Statement, sworn 3 February 2020 at Part C (“Wife’s Financial Statement”).
[2] Affidavit of Ms Halstron, filed 17 May 2019, paragraphs 170-172 and 212 (“Wife’s trial affidavit”); Transcript 18 February 2020, p.196-198; Wife’s closing submissions, received on 19 May 2020, paragraphs 138.30-138.31 (“Wife’s closing submissions”).
[3] Husband’s closing submissions, filed 6 April 2020, paragraphs 137-141 (“Husband’s closing submissions”).
The husband was born in 1956 and is 64 years old. He earns an income as a company director and from share trading.[4] The husband provides no evidence of having re-partnered.
[4] Husband’s Financial Statement, filed 5 February 2020 at Part D (“Husband’s Financial Statement”).
There is some dispute as to when the relationship commenced, with the wife suggesting that the parties commenced a de-facto relationship in mid-1993 shortly after she and her son from a previous marriage moved into the husband’s home in March 1993.[5] The husband, by contrast, submits that the parties’ de-facto relationship only commenced after the wife and her son relocated to join him in City HH in April 1994.[6] It will be necessary to return to this issue also, however it may be noted from the outset that ultimately I am not convinced that much turns on whether the relationship is found to have commenced in mid-1993 or in early 1994.
[5] Wife’s closing submissions, paragraph 122.
[6] Husband’s closing submissions, paragraph 30.
The parties married on 18 October 1994, and they separated on a final basis on 22 April 2016 when the wife left the former matrimonial home.[7] As such, even if it is accepted that the parties commenced their relationship in April 1994, it is clear that there has been a relationship of significant duration, spanning at least 22 years.
[7] Affidavit of Mr Halstron, sworn 17 May 2019, paragraphs 22 and 39 (“Husband’s trial affidavit”); Husband’s closing submissions, paragraph 44; Wife’s trial affidavit, paragraphs 15 and 89.
As to the three children of the marriage, Ms B, who is 27 years old and has an Autism Spectrum Disorder, is employed full-time and resides with the wife.[8] She moved out of the former matrimonial home in July 2017.[9] Ms B seems to have limited contact with the husband, although he continues to provide her with some financial support.[10] Ms C, who is 21 years of age, and Mr D, who is 19 years of age, are both students and are dependent on and reside with the husband. The relationship between the two youngest children and the wife appears to have broken down and the wife has spent either very limited or no time with Ms C or Mr D since shortly after separation.[11] It is agreed that the wife does not and has never paid the husband child support following separation.[12]
[8] Affidavit of Mr Halstron, sworn 3 February 2020, paragraphs 10-11 (“Wife’s updating affidavit”).
[9] Husband’s trial affidavit, paragraph 104; Wife’s trial affidavit, paragraph 89.
[10] Husband’s trial affidavit, paragraph 104.
[11] Husband’s trial affidavit, paragraph 103; Wife’s trial affidavit, paragraph 89.
[12] Husband’s trial affidavit, paragraph 105; Transcript 17 February 2020, p.80, lines 21-25.
The wife’s son from a previous marriage, Mr E, is 36 years old and runs his own business in Brisbane. It is agreed that the husband played a significant role in raising him, including providing financial support, and came to treat him as a child of marriage. The wife’s son lived with the parties from 1993 when he and the wife moved into the husband’s home, until 2010. He apparently chose to take the husband’s surname.[13]
[13] Husband’s trial affidavit, paragraphs 87-89; Husband’s closing submissions, paragraph 148; Wife’s closing submissions, paragraph 4; Transcript 17 February 2020, p.80-84, 86, especially p.83 lines 1-8 and 33-46.
The parties first met in 1992 while they were working at DD Company.[14] While it is agreed that the wife and her son moved into the husband’s home in Suburb EE in around March 1993,[15] the parties differ on when they began a romantic relationship and when they can be regarded as having commenced a de-facto relationship.
[14] Husband’s trial affidavit, paragraph 12; Wife’s trial affidavit, paragraph 13.
[15] Husband’s trial affidavit, paragraphs 12-13; Wife’s trial affidavit, paragraph 14.
In or around March 1993 the husband was made redundant from DD Company and received a termination payout.[16] In or around June 1993 the husband sold the Suburb EE property and purchased a property in Suburb FF.[17] The husband says Suburb EE was sold for $370,000 and that Suburb FF was purchased ‘outright for $850,000’, while the wife says she does not know the sale or purchase prices of these properties.[18]
[16] Husband’s trial affidavit, paragraph 15; Transcript 19 February 2020, p.222 lines 6-24, p.265 lines 9-40; Wife’s trial affidavit, paragraph 17.
[17] Husband’s trial affidavit, paragraph 18; Wife’s trial affidavit, paragraph 21.
[18] Husband’s trial affidavit, paragraphs 18 and 45-46; Wife’s trial affidavit, paragraphs 22-23.
The husband and the wife moved into the Suburb FF property in August 1993.[19] In December 1993 the husband moved to Japan to take up a three month role with GG Corporation in City HH.[20] During this time the wife and her son remained living in the Suburb FF property along with one of the husband’s friends who moved in after the husband left for City HH.[21] The husband says that the wife and her son relocated to live with him in City HH in April 1994 after he obtained a permanent position with GG Corporation.[22] Although the wife in her affidavit,[23] and in her closing submissions,[24] maintains that she relocated to City HH to be with the husband in February 1994, she seemed eventually to accept in cross-examination the husband’s position that she did not relocate on a permanent basis until April 1994, having only visited City HH in February 1994.[25]
[19] Husband’s trial affidavit, paragraph 18; Wife’s trial affidavit, paragraph 21; Transcript 17 February 2020, p.85 lines 1-3.
[20] Husband’s trial affidavit, paragraph 19; Wife’s trial affidavit, paragraph 24.
[21] Husband’s trial affidavit, paragraph 19; Wife’s trial affidavit, paragraph 21; Transcript 17 February 2020, p.85 lines 31-34.
[22] Husband’s trial affidavit, paragraphs 20-21.
[23] Wife’s trial affidavit, paragraph 25.
[24] Wife’s closing submissions, paragraph 130.
[25] Transcript 17 February 2020, p.85 lines 39-45, p.86 lines 15-19.
As has been mentioned, the parties married in Japan in 1994, and Ms B was born in 1995.[26] While they were living in City HH the parties adopted traditional roles, with the husband working in paid employment for GG Corporation and the wife undertaking household duties and caring for her son and the parties’ daughter. During this time the husband received a substantial income including an annual salary, cash bonuses and shares (which vested over three years) which was applied to the family’s living expenses, including paying private school fees for the wife’s son.[27]
[26] Husband’s trial affidavit, paragraph 8 and 22; Wife’s trial affidavit, paragraph 15 and 42.
[27] Husband’s trial affidavit, paragraphs 24-27; Transcript 17 February 2020, p.81 lines 7-10.
While the parties were living in Japan, the Suburb FF property was rented out. The husband says, and was not challenged on this during cross-examination,[28] that while the parties were living in Japan his Australian assets, including his share portfolio, superannuation and the unencumbered Suburb FF Property, remained ‘in stasis’, generally growing in value over this period and that these assets did not require the input of funds from Japan.[29] The husband further says that the Suburb FF property was rented out for $3,000 a month and that this amount exceeded the outgoings on that property in this period.[30]
[28] For example see Transcript 19 February 2020, p.290 lines 37-40.
[29] Husband’s trial affidavit, paragraphs 26 and 43.
[30] Husband’s trial affidavit, paragraph 48; Wife’s trial affidavit, paragraph 38.
The parties and their daughter, together with the wife’s son, remained living in City HH until December 1999 when the wife and two children moved back to Australia. The husband followed in April 2000 when his job was relocated to Sydney at his request.[31]
[31] Husband’s trial affidavit, paragraphs 29-30, Wife’s trial affidavit, paragraph 45.
Just prior to the family’s return to Australia the husband sold the Suburb FF property for $1.45 million and purchased a property in Suburb J for $3 million, which was registered in the husband’s sole name.[32] The husband says that he funded this purchase using the proceeds of sale from Suburb FF, surplus rental income generated from this property and two separate loans of $750,000 each secured against the Suburb J property.[33] While the wife in her trial affidavit says that she is not aware of how the balance of the purchase costs of Suburb J were funded, the husband was not challenged on his evidence during cross-examination.[34] The Suburb J property was apparently renovated at a cost of $425,000 in 2005.[35]
[32] Husband’s trial affidavit, paragraphs 32, 49-50, Wife’s trial affidavit, paragraphs 46-47.
[33] Husband’s trial affidavit, paragraph 50.
[34] Transcript 19 February 2020, p.291 lines 29-32; p.293 lines 34.
[35] Husband’s trial affidavit, paragraph 35, Transcript 17 February 2020, p.84 lines 25-27.
The parties’ second daughter, was born in 2000, and their son was born in 2002. During this period and until his redundancy in 2009, the husband continued to work full time for GG Corporation, which involved regular overseas travel,[36] while the wife was primarily responsible for caring for the children and undertook the majority of the household duties.[37]
[36] Husband’s trial affidavit, paragraph 31; Wife’s trial affidavit, paragraph 49.
[37] Husband’s trial affidavit, paragraph 90; Wife’s trial affidavit, paragraph 49.
In addition to the husband’s income, he also received sizeable distributions from his parents’ family trust totalling $323,244 between 1999 and 2005,[38] and a further $2,834,040 in distributions in the period 2007 to 2015 from his mother’s estate after both his parents passed away in 2006.[39] The husband also received a 25% shareholding in JJ Pty Ltd, a company established by the husband’s father and the trustee of the family trust, upon the death of his mother.[40]
[38] Husband’s trial affidavit, paragraph 75; Transcript 17 February 2020, p.95 lines 23-31.
[39] Husband’s trial affidavit, paragraph 76; Transcript 17 February 2020, p.95 lines 33-42.
[40] Husband’s trial affidavit, paragraph 77.
In 2007 the parties purchased two properties in Town Y. One was put in the wife’s sole name and the other was registered in the name of Halstron Investments Pty Ltd.[41]
[41] Wife’s trial affidavit, paragraphs 144 and 148; Husband’s trial affidavit, paragraphs 129-131.
The husband says that from 2007 his brother, Mr A Halstron (“Mr A”), lent him significant amounts of money, personally and through his entities, which allowed the husband to retain his shareholdings during the Global Financial Crisis.[42] Of these loans, the husband says a loan of $330,000 extended to the husband from Mr A personally on 20 July 2007 remains outstanding.[43] The husband says that he borrowed a further $50,913 from his brother for rectification works on the former matrimonial home which also remains outstanding.[44] On 27 March 2018 the husband and Mr A purported to enter into a loan agreement over the outstanding loans between them.[45] While the wife does not seek to dispute that the monies were paid by Mr A to the husband, she contends that this is a liability which the husband is not required to repay and that the loan agreement was entered into by the husband in order to gain some advantage in these proceedings.[46] It will be necessary to return to this issue.
[42] Husband’s trial affidavit, paragraphs 83-86; Affidavit of Mr A Halstron sworn 15 May 2019 (“Affidavit of Mr A Halstron”), paragraph 9.
[43] Husband’s trial affidavit, paragraph 84; Affidavit of Mr A Halstron, paragraphs 9(a) and 10.
[44] Husband’s trial affidavit, paragraphs 84 and 86(c); Affidavit of Mr A Halstron, paragraphs 9(d) and 10.
[45] Affidavit of Mr A Halstron, Exhibit SGH 43.
[46] Wife’s closing submissions, paragraphs 91 and 96.
In 2009, following the Global Financial Crisis, the husband was made redundant from his position at GG Corporation and received a payout for unpaid entitlements and a redundancy payment of approximately $400,000.[47]After this time he held various directorships, some of which provided remuneration, but primarily he worked at home share-trading and otherwise managing the family finances, generally through the G Investment Trust and the parties’ self-managed superannuation fund.[48] Following his redundancy the parties agree that the husband took on an increased role in the care of the children and in other domestic duties.[49] However there is some dispute as to the extent of the husband’s contribution in this respect. The husband’s position is that from 2009 he became the primary carer for the three children of the marriage, while the wife disagrees that he was primarily responsible for the children.[50] From 2009 until separation in 2016 the wife worked in various paid part-time roles in administration as well as in voluntary roles.[51] The income from these roles was paid into a bank account in the wife’s name and to which the husband did not have access.[52]
[47] Husband’s trial affidavit, paragraph 82; Wife’s trial affidavit, paragraphs 49-50; Wife’s closing submissions, paragraph 131.6.
[48] Husband’s trial affidavit, paragraphs 36, 109-111; Transcript 17 February 2020, p.98 lines 21, 45-46, p.99 lines 1-4.
[49] Husband’s trial affidavit, paragraphs 91-92; Transcript 17 February 2020, p.101 line 31.
[50] Transcript 17 February 2020, p.101 lines 5-11, 22-24.
[51] Husband’s trial affidavit, paragraphs 93-94; Wife’s trial affidavit, paragraph 72; Transcript 17 February 2020, p.101 line 32; p.102 line 30.
[52] Husband’s trial affidavit, paragraph 95; Transcript 17 February 2020, p.102 lines 32-41.
At some point in 2010, the wife’s son moved out of the former matrimonial home.[53]
[53] Husband’s trial affidavit, paragraph 9; Transcript 17 February 2020, p.101 line 15.
The parties separated on a final basis on 22 April 2016 when the wife left the former matrimonial home.[54] All three children remained living with the husband until Ms B moved out to live with the wife in July or August 2017.[55]
[54] Husband’s trial affidavit, paragraph 39; Wife’s trial affidavit, paragraph 87.
[55] Husband’s trial affidavit, paragraphs 102-104; Wife’s trial affidavit, paragraph 89.
In early May 2016, shortly after separation, $570,505 was rolled out of the parties’ self-managed superannuation fund, the Mr Halstron Superannuation Fund No. 2, into the wife’s newly-established self-managed fund, the Ms Halstron Superannuation Fund. [56]
[56] Husband’s trial affidavit, paragraph 61; Transcript 18 February 2020, p.139 lines 6-7.
HISTORY OF PROCEEDINGS
On 6 May 2016 the wife commenced proceedings in the Sydney Registry of this Court by filing an Initiating Application seeking interim orders for the payment of urgent spousal maintenance and interim property settlement, amongst other things. She also sought final orders for property distribution and costs.
Thereafter, and over a period of almost three years, the parties made no fewer than 14 applications for further orders of one kind or another. It is unnecessary to traverse at this point the full extent of the parties’ interlocutory jousting, although in due course it will be necessary to mention some aspects of it.
On 21 March 2019 Benjamin J made orders listing the matter before the Court as presently constituted for four days commencing on 25 June 2019 and transferred the matter to the Melbourne Registry of the Court. Despite one further application being made by the wife (in the form of an objection to a subpoena), the trial commenced on 25 June 2019. Remarkably, after more than three years of applications and counter applications, objections to evidence and the transfer of the proceeding to the Melbourne Registry so as to facilitate an earlier trial date than was apparently practicable in Sydney, on the first day of the trial the parties sought time to have discussions. Later, on the afternoon of 25 June 2019, the parties determined that it was not possible to compromise the proceedings, and senior counsel for the wife sought rulings on all the wife’s objections to the husband’s evidence prior to opening the wife’s case.
Accordingly I commenced to hear the wife’s objections to the husband’s evidence: see Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588, at [20] (French CJ, Gummow, Hayne, Crennan and Bell JJ). The parties sought to continue this exercise the following morning, 26 June 2019, albeit that by this time they had refined their various objections in the light of rulings I had made on other objections. At this point, shortly after the matter resumed on 26 June 2019, counsel for the parties sought further time to discuss the composition of the asset pool. They also informed the Court that the estimate of four days was inaccurate, and that a further two days would be required.
The parties continued their discussions, presumably in relation to the composition of the asset pool and their respective objections, until about 3.45 pm on 26 June 2019. By that time it was apparent that there was little point in commencing the evidence because it would not have been able to be completed in the remaining two days. Counsel for the parties then sought further time to negotiate their respective objections to evidence, and the matter was adjourned to the following morning for further argument in relation to the evidential objections.
The next day, 27 June 2019, the objections to evidence resumed and senior counsel for the husband informed the Court that it was likely that a further four to five days would be required. The parties’ respective counsel were unavailable until November of 2019 but the Court was not able to accommodate an adjourned hearing date after November 2019 until early February 2020. With this delay in mind I heard and determined the further objections to evidence, ultimately adjourning late on 27 June 2019 to 3 February 2020 for four to five days. The matter was later administratively adjourned to 17 February 2020.
The trial continued on 17 February 2020 and ran for four days. Significantly, this was just before the reality of the COVID-19 pandemic came to be felt in Australia, a matter which would have implications for the relief sought by the parties given their significant shareholdings. There were orders for written submissions in accordance with a timetable negotiated between the parties’ counsel, and the husband filed 50 pages of closing submissions on 6 April 2020.
Insofar as the orders then sought by the husband were concerned, it was his position that the justice and equity of the situation required the Court to take judicial notice of the drastic fall in share prices, including in the value of the parties’ shareholdings, in the period since the conclusion of the trial by reason of the COVID-19 pandemic. The husband’s position was that the only just and equitable way to proceed in respect of the shareholdings in the relevant pools was for the wife to receive her proportionate shares by distribution or transfer in specie, and his proposed form of orders accommodated this course. The husband’s submissions made it plain that if the wife persisted in seeking a fixed sum payment to her, it would be necessary for him to make an application to re-open his case and adduce further evidence as to the drastic diminution in the value of the parties’ shares.[57]
[57] Husband’s submissions, filed 25 May 2020, paragraphs 6, 101 and 169 (Husband’s May 2020 submissions).
The wife’s closing submissions, numbering some 60 pages, were not provided until 19 May 2020. Significantly, it was a feature of these submissions that the wife opposed the making of an order transferring shares to her in specie, and pressed her application for a payment in a fixed sum from the non-superannuation pool to satisfy her s 79 entitlement, based upon the value of the relevant shares at trial.[58]
[58] Wife’s closing submissions, paragraphs 138.34-138.41 and 159.
On 21 May 2020 the husband sought to have the matter listed for mention, having regard to the wife’s opposition to the transfer of shares to her in specie and the fact that she sought the payment to her of a cash sum by way of final relief based upon the value of the parties’ shares at the conclusion of the trial.
In a further 14 pages of submissions dated 25 May 2020 the husband sought leave to re-open his case, insofar as leave was required, to adduce fresh evidence of the value of the parties’ shareholdings, both personally and through their entities, by reason of the economic effects of the COVID-19 pandemic. In making this application the husband also contended that such evidence was not necessary because the Court could take judicial notice of the COVID-19 pandemic, the economic effect that it had had in Australia, and the current value of the parties’ shareholdings. The husband’s primary position, however, remained that the only just and equitable way to proceed in respect of the shareholdings in the relevant pools was for the wife to receive her proportionate shares by distribution or transfer in specie. The wife filed short submissions in response on 27 May 2020, broadly in opposition to the husband’s application.
The husband’s application was heard on 28 May 2020. As foreshadowed it was his position that if the wife were to receive her proportionate share of the relevant shareholdings by distribution or transfer in specie, together with the relevant cost bases, then it would not be necessary to reconsider the extent to which the value of the parties’ shareholdings had declined by reason of COVID-19.[59] In this respect senior counsel for the husband noted that the husband had not sold any of the shares since the trial and had not been engaging in any share trading.[60] However if the wife’s contrary position were to be preferred and she were to receive a sum certain calculated upon share values which had changed significantly since the trial because of extraordinary market fluctuations, then it was the husband’s position that in order to do justice and equity between the parties it would be necessary for the nature of these market fluctuations to be taken into account in fixing upon the sum certain to be received by the wife and the relevant shares would need to be valued as at the date of delivery of judgment and the wife’s proportionate share fixed as at that date by reference to the then value of the relevant shares. This, the husband contended, could be done by the parties agreeing on the market value of the relevant shares by reference to the ASX website as at the time orders came to be made, and there would be no need for the husband to reopen his case.[61]
[59] Transcript 28 May 2020, p.467-468.
[60] Transcript 28 May 2020, p.478 lines 27-28; p.479 lines 32-33.
[61] Transcript 28 May 2020, p.472-473.
Having heard the oral submissions of senior counsel for the husband, counsel for the wife indicated that in circumstances where there had been no share trading by the husband, the wife could not oppose the husband’s position that, if there were not to be an in specie distribution of shares, the shares would need to be revalued at the time of judgment. He accepted on behalf of the wife that the events of the first half of 2020 could not fairly be regarded as purely cyclical movements in the share market.[62]
[62] Transcript 28 May 2020, p.484-486.
Accordingly I indicated to the parties at the hearing on 28 May 2020 that, for present purposes, they should prepare a joint balance sheet including share valuations current at the time of the trial. I agreed with counsel for the wife that regardless of whether I determined that it would be just and equitable to make an award of the relevant shares to the wife in specie, or I preferred the wife’s approach and was inclined to make an order in a fixed sum, then in all the circumstances it would still be desirable to know the value of the relevant shares prior to the making of final orders so that the Court understood the full extent the value of the parties’ asset pool.[63]
[63] Transcript 28 May 2020, p.486-487.
In the face of this outbreak of consensus it was unnecessary to make any formal ruling on the husband’s application, and the matter was adjourned to a date to be fixed for judgment. It will, however, be necessary to return to the question of whether the wife should be paid a sum certain or whether an order should be made for the transfer of shares to her in specie. The husband’s reply to the wife’s closing submissions, some 35 further pages, was duly filed on 30 June 2020, and a consolidated balance sheet as per the parties’ respective closing submissions was filed on 1 July 2020.
On 30 April 2021, when the Court’s reasons for judgment were well advanced, the parties were requested to provide details of the updated share values. Certain requests were also made for the clarification of various items on the consolidated balance sheet which were, unfortunately, not adequately addressed in the parties’ final submissions. The wife was also requested to provide a revised minute of order, something which her counsel had indicated at the hearing on 28 May 2020 would be provided, but which had not subsequently been provided.[64]
[64] Transcript 28 May 2020, p.488.
Some weeks later, on 19 May 2021, the husband’s solicitors wrote on behalf of the parties requesting a further listing of the matter on 28 May 2021. The matter was duly listed that day and on 27 May 2020 the parties filed further submissions addressing the points of clarification requested by the Court. The husband also provided a detailed statement updating the value of the shares held by him, the G Investment Trust, and the Mr Halstron Superannuation Fund as at 26 May 2021. It was apparent from this statement that the market value of the shares held by each of those entities had increased significantly since the trial.
The husband maintained his primary position that an alteration of the parties’ shares should be in specie. However he indicated that given the recovery of the share market he no longer pressed the issue of updated share values which had been the subject of his further written submissions on 25 May 2020.
On the subject of share valuations, the wife’s position was that she needed an opportunity to review the husband’s updated share value statement, and that she required further time to provide her own updated share value statement. This was ultimately done, although it was not provided until 18 June 2021. With one potentially important exception relating to certain shares in companies which were not publicly listed, the wife accepted the updated share values provided by the husband and provided her own updated share values. Her own shares do not appear to have increased much in value since the trial. It will be necessary to return to these updated share values.
In addition, at the hearing on 28 May 2021 the wife made an application for leave to revalue the former matrimonial home on the asserted basis that it was necessary to do so to ensure that the orders ultimately made were just and equitable. This application was strongly resisted by the husband. For reasons I indicated I would provide in this judgment and to which I will come, I dismissed the wife’s application.
It is against the background of this somewhat tortured procedural history that the parties’ longstanding dispute comes to judgment.
PROPOSALS OF THE PARTIES
The parties’ competing positions are reflected in the husband’s amended proposed orders provided on 1 June 2021, and the wife’s revised orders of 18 June 2021. It would be accurate to observe that, like their respective submissions and so much of this proceeding, the parties’ proposed orders pass one another like ships in the night.
The husband seeks orders in the following terms:
Definitions:
1. For the purposes of these orders:
"the F Trust" means the F Investments Pty Ltd ATF the Halstron Family Trust.
“the Trust” means Halstron Investments Pty Ltd ATF the G Investment Trust.
“the Trusts” mean both the Halstron Family Trust and the G Investment Trust.
"the Suburb J property" means the property situated at H Street, Suburb J in the state of New South Wales registered in the Husband's sole name.
“the US Properties” means the properties situate at K Street, City K in the L State, USA, M Street, Suburb N in the L State, USA, O Street, Suburb P L State, USA, Q Street, City R L State, USA and S Street, City T L State USA.
"The Mr Halstron Superannuation Fund" means the Mr Halstron Superannuation Fund No.2 of which U Pty Ltd is the Trustee, the Husband being the sole director of the Trustee and the only member of the fund.
"The Ms Halstron Superannuation Fund" means the Ms Halstron Superannuation Fund of which V Pty Ltd is the Trustee, the Wife being the sole director of the Trustee and the only member of the fund.IT IS ORDERED:
POOL A - Division of Assets held in the parties’ personal name
2.Within 60 days the Husband pay or cause to be paid to the Wife the sum of $255,279, so that the Wife retains 30% of the net assets in Pool A.[65]
[65] Noting according to the husband’s draft, that the wife already has assets in Pool A that total $1,583,900 [the correct figure would seem to be $1,583,650] which include: proceeds of X Street $850,000, interim payment to the Wife $275,000, proceeds of the Canada Property $221,000, funds held in the Canadian W Bank account $80,000, jewellery $57,700, Motor vehicle 3 $16,250 and fund in her bank accounts $83,700. The husband’s asset in Pool A are a net total of $4,546,698 which include; the Suburb J property $6,000,000, his interest in JJ Pty Ltd $Nil, KK Company shares $54,122, LL Company shares $14,665, funds in the MM Bank account $2,451, his Motor vehicle 1 $16,200, Motor vehicle 2 $14,000, his interest in NN Bank (of no value), less all liabilities in the table of Pool A ($1,554,750)].
3.Within 28 days, the Husband make available for collection by the Wife from the Suburb J Property the Wife’s Grandmother’s silverware and crystal items and trio crockery sets (located in the dining room cupboard).
4.The Husband retain the following assets for his own use and benefit absolutely, to the exclusion of the Wife:
4.1.The Suburb J property;
4.2.His motor vehicle 1;
4.3.His motor vehicle 2;
4.4.Funds standing to his credit in any bank account in his personal name;
4.5.The Mr Halstron Superannuation Fund, subject to the adjustment in paragraph 18 and 19 below;
4.6.The Trust; and
4.7.the F Trust.
5.That the Wife retain the following assets for her own use and benefit absolutely, to the exclusion of the Husband:
5.1.The payment of $275,000 made to her pursuant to the orders of 6 June 2016, with the uncharacterised sum of $75,000 to also be categorised as a part property settlement;
5.2.The funds withdrawn by the Wife from the parties' joint Canadian W Bank account in the sum of $80,000;
5.3.The proceeds of sale of X Street, Town Y in the State of New South Wales in the agreed sum of $850,000;
5.4.The proceeds of sale of Z Street, Suburb AA, BB Province Canada in the sum of $221,000;
5.5.Her CBA CommSec share portfolio;
5.6.Her jewellery;
5.7.Her motor vehicle 3;
5.8.The loan owning from CC Pty Ltd;
5.9.Funds standing to her credit in any bank account, including any travel cards in her name; and
5.10.Her interest in the Ms Halstron Superannuation Fund.
6.The Husband be liable for and indemnify the Wife and keep the Wife indemnified against all payments and liabilities in his sole name, including but not limited to the Viridian Line of Credit (account ending #...67), Viridian Line of Credit (account ending #...75), Westpac overdraft, CBA overdraft, Mastercard credit card (ending #...87), Mastercard credit card (ending #...38), all and any loans owing to his brother, Mr A Halstron, and any outstanding accountancy fees and legal fees.
7. The Wife be liable for and indemnify the Husband and keep the Husband indemnified against all payments and liabilities in her sole name, including but not limited to any credit cards in her name, the loan owing to CC Pty Ltd and legal fees.
POOL B – Division of shares held in the parties’ personal names
8.That within 30 days the Husband and the Wife do all acts and things and sign all documents necessary to transfer or cause to be transferred to the Wife 30% of all publicly listed shares held in the Husband's name as at the date of trial AND FOR CLARITY IT IS NOTED that the intent of this order is that the Wife is to receive 30% of each separate shareholding of the Husband, such that if the Husband holds shares (for example) in companies A, B and C, the Wife shall receive:
•30% of the company A shares;
•30% of the company B shares;
•30% of the company C shares -
AND in the event that the shares in any given company have different cost-bases, the Wife receive 30% of each tranche of shares in that company held by the Husband at each separate cost base.
POOL C – Alteration of the parties’ interests in the Trust and the F Trust
US Properties
9.That within 7 days of these orders the Husband and the Wife sign all documents and do all acts and things required to list the US Properties for sale on such terms as may be agreed in writing and failing agreement as follows:
9.1.the property manager for the US Properties be appointed as the selling agent (the Selling Agent);
9.2.the reserve price for the sale of each of the US Properties be the values ascribed in the valuations obtained by the parties as part of these proceedings;
9.3.the mode and other terms of sale be as recommended by the Selling Agent.
10.Upon settlement of the sale of each of the US Properties, the parties do all acts and sign all documents necessary to distribute the proceeds of sale in the following manner and priority:
a)First, to pay all costs and commissions of the sale;
b)Secondly, to pay all outstanding council and water rates in respect of the property sold;
c)Thirdly, to pay or make provision for payment of any taxation imposed upon or arising from the sales of the US Properties, together with the accounting and winding-up costs of the company Halstron US Inc pursuant to paragraph 13 below, in the following manner:
i.the parties obtain an estimate of all taxation payable (if any), accounting and winding-up costs for Halstron US Inc from the Trust’s accountant, Mr PP of PP Accountants; and
ii.the parties set aside a portion of the proceeds of sale(s) sufficient to meet the estimated costs in 12(c)(i) in an interest bearing account in the name of the Trust, with those funds to be used to meet such taxation and accounting and winding-up costs as and when same fall due and any remaining balance be divided in the proportions of 70% to the Husband and 30% to the Wife;
d)Fourthly, to repay any costs incurred in preparing the property for sale, including the cost of the valuation of the property for the purpose of these proceedings;
e) Finally, the remaining balance be distributed in the proportions of 30% to the Wife and 70% to the Husband.
11.That no later than 21 days after the settlement of the sale of the last of the US Properties, the parties do all such acts and things and sign all documents necessary to wind up Halstron US Inc, with the costs of the winding up to be paid from the funds set aside pursuant to paragraph 10(c)(ii) above.
Cash and Shares of the Trusts
12.That within 30 days the Husband and the Wife in their capacities as Directors of the Trust do all acts and things and sign all documents necessary to transfer or cause to be transferred to the Wife by way of capital distribution, 30% of all publicly listed shares held by Trust as at the date of trial; AND FOR CLARITY IT IS NOTED that the intent of this order is that the Wife is to receive 30% of each separate shareholding of the Trust, such that if the Trust holds shares (for example) in companies A, B and C the Wife shall receive:
•30% of the company A shares;
•30% of the company B shares;
•30% of the company C shares -
AND in the event that the shares in any given company have different cost-bases, the Wife receive 30% of each tranche of shares in that company held by the Trust at each separate cost base. [66]
[66] The effect of such order is that the Wife receives 30% of each shareholding in the Trust, including the cost base of the shareholding and 70% of each shareholding is left in the Trust to be retained by the Husband.
13.That within 30 days of these orders the Husband and the Wife in their capacities as Directors of the Trust do all acts and things and sign all documents necessary to pay or cause to be paid to the Wife the sum of $36,070.20. [67]
14.That within 7 days of the parties’ compliance with paragraphs 9,10,11, 12 and 13 (whichever occurs last), the Husband and the Wife do all things necessary and sign all such documents, at the Husband's expense:
14.1.for the Wife to be forthwith released from any and all director’s and/or personal guarantees given to any financial institution in favour of the Husband, the Trust and the F Trust;
14.2.for the Wife to resign any and all offices she holds in the Trust and the F Trust and relinquish any and all right and title in the Trust and the F Trust and assign to the Husband any interest, shareholding and any other entitlement she may have in the Trust and the F Trust inclusive of but not limited to transferring to the Husband any and all shareholdings and assigning to the Husband all credit and debit loan accounts;
14.3.for the Husband to be liable for and pay and indemnify the Wife and keep her indemnified against any and all unpaid liability howsoever arising from the date of these orders by reason of any office-holding, position and/or distributions and/or beneficial entitlement (if any) that she may have or previously have had in the aforesaid entities, including but not limited to taxation and all interest, penalties, fines and charges assessed or hereinafter assessed against the aforesaid entities (or any one of them) and/or her personally and from all proceedings, costs, claims and demands howsoever arising from or in respect thereof, save as otherwise provided in these orders; and
14.4.for the Husband to release or procure the release of the Wife and pay and indemnify the Wife and keep her indemnified from any and all liabilities (loans, guarantees, mortgages) of or secured against the assets of Trust and F Trust, save as provided for in paragraph 15.
15.In the event there are any unforeseen taxation or accounting liabilities incurred by the Trust arising from the implementation of these Orders, such liability be paid as to 70% by the Husband and 30% by the Wife.
[67] The effect of such order is that the Wife receives 30% of the total cash assets of the Trust and Dizhor Trust which total $120,230 (see Joint Balance List).
POOL D – Superannuation
16.That the Husband in his personal capacity and in his capacity as director of the Trustee of the Mr Halstron Superannuation Fund hereby acknowledges procedural fairness in respect of the superannuation split contained in these Orders.
17.That paragraphs 18 to 20 have effect from the operative time.
18.That the operative time for the purpose of paragraph 19 is 30 days from the date of these orders (the Date).
19.That in accordance with section 90XT(1)(a) of the Act on the Date:
19.1.whenever a splittable payment becomes payable to the Wife from the Mr Halstron Superannuation Fund, the Wife is entitled to be paid the amount of Y, where Y is calculated as follows:
(i)Y is 30% of X, less Z;
(ii)X is the total combined value of the Mr Halstron Superannuation Fund and the Ms Halstron Superannuation Fund as at the Date including but not limited to:
(1)the value of the shares in the Ms Halstron Superannuation Fund as at the Date;
(2)cash in the Ms Halstron Superannuation Fund as at the Date;
(3)other assets of the Ms Halstron Superannuation Fund including loans owed to the fund, managed investments and derivate investments;
(4)the value of the shares in the Mr Halstron Superannuation Fund as at the Date;
(5)cash in the Mr Halstron Superannuation Fund as at the Date plus an additional $200,000;[68]
[68] The additional $200,000 is the addback of the payment made by the Husband to invest in NN Bank Capital.
(iii)Z is the total value of the Ms Halstron Superannuation Fund as at the Date which includes:
(1)the value of the shares in the Ms Halstron Superannuation Fund as at the Date;
(2)cash in the Ms Halstron Superannuation Fund as at the Date -
(3)all other assets of the Ms Halstron Superannuation Fund, including but not limited to loans owed to the fund, managed investments and derivative investments –
and there is a corresponding reduction in the entitlement that the Husband would have in the Mr Halstron Superannuation Fund; and
19.2.the Husband in his capacity as director of the Trustee of the Mr Halstron Superannuation Fund, do all acts and things necessary and sign all documents required to roll over the superannuation split in paragraph 19.1 to the Ms Halstron Superannuation Fund.
20.That for the purposes of paragraph 19, the rollover of the Wife’s superannuation split to the Ms Halstron Superannuation Fund is to be effected by way of cash transfer, with:
20.1.the Husband to be at liberty to sell such shares as required to give effect to the cash transfer; and
20.2.the amount of the cash transfer to be reduced by 30 per cent of the realisation costs reasonably arising from the sale(s) in the preceding sub-paragraph.
21.Pending compliance with order 19 above and save as provided for in paragraph 20, the Husband and the Wife be and are hereby restrained from transferring, disposing of or dealing with the assets of their respective self-managed superannuation funds or otherwise reducing the value of their self-managed superannuation funds without the prior written consent of the party.
Other Orders
22.That unless otherwise specified in these Orders and save for the purposes of enforcing any monies due under these or any subsequent Orders:
22.1.monies standing to the credit of the parties in any bank account are to become the property of the party in whose name the account is registered;
22.2.monies standing to the credit of the parties in any joint bank accounts are to become the property of the Husband;
22.3.each party retain for their sole use and benefit any superannuation benefits accrued in their sole name;
22.4.insurance policies remain the sole property of the owner named therein;
22.5.each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders; and
22.6.each party be solely responsible for any liability of whatsoever nature and kind in their respective names, including but not limited to any credit card liability.
23.That save as otherwise provided in these Orders, all previous orders of this Honourable Court be and are hereby discharged, including but not limited to all and any injunction made against the Husband in respect to the Trust on 12 June 2018.
24.That liberty to apply be reserved to the parties in relation to the implementation of these Orders.
The wife by contrast, seeks orders in the following terms:
Definitions:
The Wife means Ms Halstron born in 1964
The Husband means Mr Halstron born in 1956
The Proceedings means these proceedings
The Parties means the Wife and the Husband
Partymeans either of the Wife or the Husband (as the context implies)
The Suburb J Property means the property situate at and known as H Street, Suburb J NSW and being the whole of the land in Folio Identifier …
US Properties means the properties at:-
K Street, City K, L State
M Street, Suburb N, L State
O Street, Suburb P, L State
Q Street, City R, L State; and
S Street, City T, L State
Final Orders
1.That the Wife be declared the sole owner, at law and in equity, to the exclusion of the Husband, of the following:-
1.1the motor vehicle 3 bearing registration number …;
1.2the loan owing to her by CC Pty Ltd;
1.3the jewellery in her possession;
1.4the funds standing to her credit in any bank account in her name;
1.5the funds standing to her credit in any CommSec account in her name;
1.6the personalty and household contents in her possession; and
1.7her interest and entitlement in the Ms Halstron Superannuation Fund.
2.The following Orders are made in respect of the Husband’s interest in the Mr Halstron Superannuation Fund (“the Fund”);
2.1That the Court allocate, as required by s.90XT(4) of the Family Law Act1975, a base amount in the sum of $2,054,456 to the Wife out of the Husband’s interest in the Fund;
2.2That, pursuant to paragraph 90XT(1)(a) of the Family Law Act 1975 whenever the trustee of the Fund makes a splittable payment out of the Wife’s interest in the Fund, the trustee shall:
2.2.1pay to the Wife, or his administrators, executors, beneficiaries, heirs or assigns, the entitlement calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, and
2.2.2make a corresponding reduction in the entitlement the Husband would have had in the Fund but for this order.
2.3That Order 2.1 has effect from the operative time.
2.4That the operative time for these orders is four (4) days after the date of service of these orders.
2.5That the Fund shall do all acts and things and sign such documents as may be necessary so that, in accordance with the obligations set out in the Family Law Act 1975 and Family Law (Superannuation) Regulations 2001, the trustee can calculate the entitlement of, and make payment to, the Husband in accordance with Order 2.1 of these orders.
2.6That the Husband shall do all acts and things, including but not limited to, exercising his request pursuant to the Superannuation Industry (Supervision) Regulations 1994 for the rollover or transfer of the transferable benefits out of the Wife’s interest in the Fund to a fund of the Husband’s choosing in accordance with the Superannuation Industry (Supervision) Regulations 1994.
3.That within 56 days of the date of these Orders (“the due date”) the Husband pay to the Wife, or as she may direct in writing, the sum of $6,321,885 (“the principal sum”).
4.That in the event the Husband is unable or unwilling to pay the principal sum by the due date then the following Orders shall apply:
4.1The parties shall immediately upon the expiration of seven (7) days of the due date instruct a solicitor of the Wife’s choosing to act on the sale of the property known as and situate H Street, Suburb J (“the Suburb J property”) (the Vendor Solicitor);
4.2The parties shall immediately upon the expiration of seven (7) days of the due date instruct an agent of the Wife’s choosing to act on the sale of the Suburb J property (the Agent);
4.3The parties shall instruct the Vendor Solicitor and Agent to do all acts and things necessary to cause the sale of the Suburb J property at the earliest possible date;
4.4That the parties shall agree to a minimum sale price or reserve price of the Suburb J property and, in the event of a dispute as to the best price attainable for the property, the parties shall follow the advice of the Agent;
4.5That the parties shall agree to the method of sale proposed by the Agent;
4.6That upon completion of the sale of the property the parties shall do all acts and things necessary to disburse of the proceeds of sale as follows:
4.6.1The payment and discharge of any mortgage or liabilities secured on title;
4.6.2The payment of any charges, rates and expenses owing at the date of completion;
4.6.3The payment of Agent’s marketing and commission fees;
4.6.4The payment to the Wife of such sum as is required to pay the principal sum, or so much of the principal sum that remains outstanding as at the date of settlement of the sale together with interest calculated in accordance with the Family Law Rules from the due date to the actual date of payment; and
4.6.5The balance then remaining, if any, to the Husband.
5.That except as otherwise required for the purposes of complying with these Orders the Husband be restrained from doing any act or thing to dispose of, transfer or further encumber the Suburb J property.
6.That within 28 days of the making of these Orders the Husband shall make available for collection by the Wife the following items presently located at the Suburb J property:-
6.1The second remote & key to my motor vehicle 3 (located in the safe); and
6.2The Wife’s Grandmother’s silverware & Crystal items & trio crockery sets (located in the dining room cupboard)
7.That simultaneous with the Husband complying with Order 4 of these Orders the Wife shall do all acts and things and sign all documents necessary to resign as a director of Halstron Investments Pty Ltd and further transfer to the Husband any and all right and entitlement in the G Investment Trust and the Husband shall indemnify the Wife and forever keep her indemnified with respect to any and all liabilities of the G Investment Trust howsoever and whenever arising.
8.That within 28 days of the date of these Orders the parties do all acts and things and sign all documents necessary to cause the US properties and US bank account to be sold/closed in accordance with the following Orders:-
8.1The parties shall immediately upon the expiration of seven (7) days of the date of these Orders instruct a jointly appointed attorney/lawyer, and failing agreement as nominated by the Husband, to act on the sale of each of the US properties (the Vendor Solicitor);
8.2The parties shall immediately upon the expiration of fourteen (14) days of the date of these Orders instruct a jointly appointed real estate agent, and failing agreement as nominated by the Wife, to act on the sale of each of the US properties (the Vendor Agent);
8.3That the parties shall agree to a minimum sale price or reserve price of each of the US properties and, in the event of a dispute as to the best price attainable for the property, the parties shall follow the advice of the Agent;
8.4That the parties shall agree to the method of sale proposed by the Agent;
8.5That upon completion of each sale of each of the US properties the parties shall do all acts and things necessary to disburse of the proceeds of sale as follows:
8.5.1The payment and discharge of any mortgage or liabilities secured on title;
8.5.2The payment of any charges, rates and expenses owing at the date of completion;
8.5.3The payment of Agent’s marketing and commission fees;
8.5.4The payment to the Wife of 55% of the balance then remaining of the total proceeds of sale and funds standing in the US bank account; and
8.5.5The balance then remaining to the Husband.
9.That except as otherwise provided for by these Orders and following the Husband’s compliance with Orders 2, 4 and 9 of these Orders, the Husband be solely entitled, in law and in equity, to the exclusion of the Wife to the following:-
9.1the Suburb J property and its contents;
9.2the motor vehicle 1 bearing registration number …;
9.3the motor vehicle 2currently in his possession;
9.4his entitlement in the whole life insurance policy, bearing policy no. …8-L;
9.5the funds standing to his credit in any bank account in his name in Australia or elsewhere;
9.6the G Investment Trust;
9.7his interest in JJ Pty Ltd;
9.8his interest in the Estate of his late Mother;
9.9his interest in any share portfolio in his name;
9.10his interest in the Mr Halstron Superannuation Fund No. 2; and
9.11all other items of personalty, property and financial resources in his name or to which he has an entitlement.
10.That the Husband shall indemnify the Wife and forever keep her indemnified with respect to any and all liabilities in his name or to which he is responsible for howsoever and whenever arising.
11.That the Wife shall indemnify the Husband and forever keep him indemnified with respect any and all liabilities in her name or to which she is responsible for howsoever and whenever arising.
12.Pursuant to section 106A of the Family Law Act 1975 (Cth), a Registrar of this Court is hereby appointed to execute any document or writing that either of the parties’ neglect or refuse to execute in accordance with these Orders upon presentation to the Registrar of an Affidavit detailing that neglect or refusal.
That, by way of alternative to Order 3 above, namely in the event that the Court determines to make provision for the Wife by way of an allocation of tranches of shares as sought by the Husband, then the following shall apply:-
13.That within 30 days the Husband and the Wife do all acts and things and sign all documents necessary to transfer or cause to be transferred to the Wife 55% of all unlisted shares and all publicly listed shares held in the Husband's name as at the date of trial, whether held in Australia or elsewhere, AND FOR CLARITY IT IS NOTED that the intent of this order is that the Wife is to receive 55% of each separate shareholding of the Husband, such that if the Husband holds shares (for example) in companies A, B and C, the Wife shall receive:
•55% of the company A shares;
•55% of the company B shares;
•55% of the company C shares -
AND in the event that the shares in any given company have different cost-bases, the Wife receive 55% of each tranche of shares in that company held by the Husband at each separate cost base.
14.That for the purposes of the above Order the Husband is to provide to the Wife copies of all documents evidencing the cost base of each particular tranche of shares simultaneous with the compliance with Order 13 above.
15.That within 30 days the Husband and the Wife in their capacities as Directors of the Trust do all acts and things and sign all documents necessary to transfer or cause to be transferred to the Wife by way of a capital distribution, 55% of all unlisted shares and publicly listed shares held by Trust as at the date of trial, whether held in Australia or elsewhere, AND FOR CLARITY IT IS NOTED that the intent of this order is that the Wife is to receive 55% of each separate shareholding of the Trust, such that if the Trust holds shares (for example) in companies A, B and C the Wife shall receive:
•55% of the company A shares;
•55% of the company B shares;
•55% of the company C shares -
AND in the event that the shares in any given company have different cost bases, the Wife receive 55% of each tranche of shares in that company held by the Trust at each separate cost base.
16.That for the purposes of the above Order the Husband is to provide to the Wife copies of all documents evidencing the cost base of each particular tranche of shares simultaneous with the compliance with Order 15 above.
That, by way of alternative to Order 2 above, namely in the event that the Court determines to make provision for the Wife by way of an allocation of tranches of shares as sought by the Husband, then the following shall apply:-
17.That in accordance with section 90XT(1)(a) of the Act on the Date:
17.1whenever a splittable payment becomes payable to the Wife from the Mr Halstron Superannuation Fund, the Wife is entitled to be paid the amount of Y, where Y is calculated as follows:
17.1.1Y is 55% of X, less Z;
17.1.2X is the total combined value of the Mr Halstron Superannuation Fund and the Ms Halstron Superannuation Fund as at the Date including but not limited to:
17.1.2.1the value of the shares in the Ms Halstron Superannuation Fund as at the Date;
17.1.2.2cash in the Ms Halstron Superannuation Fund as at the Date;
17.1.2.3other assets of the Ms Halstron Superannuation Fund including loans owed to the fund, managed investments and derivate investments;
17.1.2.4the value of the shares in the Mr Halstron Superannuation Fund as at the Date;
17.1.2.5cash in the Mr Halstron Superannuation Fund as at the Date plus an additional $200,000;
17.1.3Z is the total value of the Ms Halstron Superannuation Fund as at the Date which includes:
17.1.3.1the value of the shares in the Ms Halstron Superannuation Fund as at the Date;
17.1.3.2cash in the Ms Halstron Superannuation Fund as at the Date -
17.1.3.3all other assets of the Ms Halstron Superannuation Fund, including but not limited to loans owed to the fund, managed investments and derivative investments -
and there is a corresponding reduction in the entitlement that the Husband would have in the Mr Halstron Superannuation Fund; and
17.2the Husband in his capacity as director of the Trustee of the Mr Halstron Superannuation Fund, do all acts and things necessary and sign all documents required to roll over the superannuation split in paragraph 17.1 to the Ms Halstron Superannuation Fund.
18.That for the purposes of paragraph 17, the rollover of the Wife’s superannuation split to the Ms Halstron Superannuation Fund is to be effected by way of a capital distribution, 55% of all unlisted shares and publicly listed shares held by Mr Halstron Superannuation Fund as at the date of trial, whether held in Australia or elsewhere, AND FOR CLARITY IT IS NOTED that the intent of this order is that the Wife is to receive 55% of each separate shareholding of the Trust, such that if the Trust holds shares (for example) in companies A, B and C the Wife shall receive:
•55% of the company A shares;
•55% of the company B shares;
•55% of the company C shares -
AND in the event that the shares in any given company have different cost-bases, the Wife receive 55% of each tranche of shares in that company held by the Trust at each separate cost base.
19.That pending compliance with these Orders and save for the purposes of complying with these Orders, the Husband and the Wife be and are hereby restrained from transferring, disposing of or dealing with the assets of their respective self-managed superannuation funds or otherwise reducing the value of their self-managed superannuation funds without the prior written consent of the party.
20.That in the event that any tranche of shares to be transferred to the Wife in accordance with these Orders, whether unlisted or listed, in Australia or elsewhere, has changed in its nature at the date of compliance with these Orders, from that which it existed as at the date of trial, the Husband shall provide to the Wife copies of all documents evidencing the original cost base of such tranche of shares and evidence as to the change in the form/nature of the shares simultaneous with compliance with the relevant Order requiring the said transfer to the Wife.
MATERIAL RELIED UPON
The wife relied upon the following documents:
a)Initiating Application filed 6 May 2016;
b)Trial affidavit of the wife sworn and filed 17 May 2019 and exhibits tendered as A1;
c)Updating affidavit of the wife sworn 3 February 2020 and filed 5 February 2020;
d)Financial Statement filed 17 May 2019;
e)Case outline filed 21 June 2019;
f)Financial Statement filed 5 February 2020;
g)Closing submissions received 19 May 2020;
h)Submissions dated 27 May 2020 on the husband’s application to re-open;
i)Submissions dated 27 May 2021.
The husband relied upon the following documents:
a)Response to Initiating Application filed 6 June 2016;
b)Trial affidavit of the husband sworn on 17 May 2019 and filed on 20 May 2019 and exhibits tendered as R29;
c)Financial Statement sworn on 17 May 2019 and filed on 20 May 2019;
d)Affidavit of Mr A Halstron sworn on 15 May 2019 and filed on 23 May 2019 and exhibits tendered as R31;
e)Case outline filed 20 June 2019;
f)Affidavit in Reply of the husband sworn and filed 5 February 2020 and exhibits tendered as R30;
g)Updated Financial Statement sworn and filed 5 February 2020;
h)Supplementary case outline filed 14 February 2020;
i)Exhibits tendered on behalf of the husband during the running of the defended hearing R1 to R28
j)Closing submissions filed 6 April 2020;
k)Submissions filed 25 May 2020 in support of the husband’s case to re-open;
l)Reply submissions filed 30 June 2020; and
m)Submissions of 28 May 2021.
THE STATUTORY REGIME
Axiomatically, orders under s 79(1) of the Act altering the property interests of parties may only be made if the Court is first satisfied, pursuant to s 79(2), that it is just and equitable to make such orders. The Act then identifies in s 79(4) the matters the Court must take into account in considering what order, if any, should be made: see Stanford v Stanford (2012) 247 CLR 108 at [22], [35]. While those two inquiries are not to be conflated (Stanford & Stanford at [35], [40], [51]), it is permissible for the s 79(4) factors to inform the inquiry under s 79(2): see Bevan & Bevan (2013) 279 FLR 1 at [83]-[89], [163], [169], [171]-[172].
It is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying the existing legal and equitable property interests of the parties. It must not be assumed that the parties’ rights to or interests in marital property should be different from those that then exist or that a party has the right to have the parties’ property divided by reference to considerations set out in s 79(4) of the Act: see Stanford & Stanford at [37]-[40], [50]. Commonly, however, it will be just and equitable for the parties’ property rights to be altered because the breakdown in their relationship will end their fiscal unity and deprive them of the common use of their property: see Stanford & Stanford at [42]; Bevan & Bevan at [68]-[70], [82], [164]-[165].
If and once determined that it is just and equitable for the property interests of the parties to be altered, the process of evaluating the proper orders to make is dictated by the factors enumerated within s 79(4) of the Act. The Court must necessarily identify and assess the parties’ contributions of all kinds and from all sources within the meaning of ss 79(4)(a)-(c) and then take account of the relevant matters referred to in ss 79(4)(d)-(g) of the Act, which include the matters referred to in s 75(2) of the Act, so far as they are relevant: see Jabour & Jabour (2019) FLC 93-898, [60] (“Jabour”). The process of property adjustment calls for a discretionary and holistic value judgment: see Quinn v Quinn (1979) FLC 90-677 at 78,615; Garrett v Garrett (1984) FLC 91,539 at 79,359, 79,372; Davey v Lee (1990) 13 Fam LR 688 at 689.
THE CREDIBILITY OF THE PARTIES
In the context of wasting costs, the husband refers also to certain letters sent by the wife’s solicitors to the husband’s solicitors between May 2017 and July 2018 regarding where $1 million held in a term deposit by the Trust in 2013 had been transferred by the husband. The husband submits, and I accept, that these letters suggest that the funds were misappropriated by him, and that he had failed to comply with his obligation of disclosure to provide the relevant details, albeit that the relevant transactions pre-dated separation by some three years. The husband’s evidence was that the funds were applied to reduce debt, but he did not have a record of the transfer which had occurred some years earlier.[351]
[351] Husband’s closing submissions, paragraph 153.
In relation to this issue the husband submits that without him realising, at the time the wife’s solicitors were sending these letters, on her instructions, she had received an email from the relevant bank in April 2017, an email which was not sent to the husband, confirming that the $1 million had been applied to reduce the parties’ home loan debt in 2013. When the wife was asked in cross examination why she had “sat” on that email for more than a year without disclosing it, she did not have a satisfactory answer.[352] The husband submits that the wife’s conduct in failing to disclose this email, which was the subject of significant correspondence between the parties’ solicitors, and at the same time alleging that the husband was not complying with his disclosure obligations, is a further reason why, if any adjustment pursuant to s 75(2) should be made, it should be in the husband’s favour.[353]
[352] Husband’s closing submissions, paragraph 154.
[353] Husband’s closing submissions, paragraph 155.
Save to refer generally to earlier submissions in relation to the husband’s alleged non-disclosure, which I have rejected, the wife does not respond in terms in her final submissions to the husband’s contention that her unfounded allegations of non-disclosure and her wastage of costs and time are matters which, if there were to be any adjustment pursuant to s 75(2) of the Act, should result in an adjustment in the husband’s favour.
In all the circumstances I am satisfied that the matters raised by the husband in relation to the wife’s non-disclosure and her wastage of costs constitute valid complaints and that they are matters which should be taken into account pursuant to s 75(2)(o) of the Act. I will return to their significance for any adjustment between the parties.
The wife’s refusal to sign the contract for X Street
A further matter raised by the husband is that when he sold the property at X Street for $90,000 above the agreed reserved price stipulated in Court orders, the wife initially refused to sign the contract on the basis that she wanted to retain some of the paintings in the property, thereby potentially frustrating the sale. The husband points out that there was no provision in the relevant orders requiring the property be sold for a division of chattels, however notwithstanding this the wife acted in breach of the orders and sought to defend her position in cross examination as having been reasonable.[354]
[354] Husband’s closing submissions, paragraph 156.
Once again, the wife does not respond in terms in her final submissions to the husband’s submissions in relation to this matter. In all the circumstances I am satisfied that this is also something which is relevant to the question of any adjustment pursuant to s 75(2)(o) of the Act. I will return to the significance of this matter.
Wastage and reduction in shares – restrictions on the husband’s ability to trade
A matter which occupied some attention at the trial was the wife’s freezing of the CommSec trading account through which the husband traded shares during the marriage, primarily through the parties’ self-managed superannuation fund. As the husband points out, the wife had complete access to the CommSec account, including the ability to log into it, monitor the husband’s transactions, and buy shares herself if she wanted to do so.[355]
[355] Husband’s closing submissions, paragraph 157.
However the CommSec account was frozen in October 2017. The husband asked repeatedly for the wife to unfreeze it, but despite the wife having full visibility of the account she refused to do so.[356] On 1 March 2018 the husband’s solicitors wrote to the wife’s solicitors seeking the reactivation of the CommSec account. The wife refused this request, unless the husband agreed to a series of highly prescriptive orders which the husband regarded as impracticable.[357]
[356] Husband’s closing submissions, paragraph 158.
[357] Husband’s closing submissions, paragraph 159.
The husband submits that as a result of the wife’s failure to reactivate the account the parties have incurred substantial losses on their share portfolio, which he estimates to be over $1 million.[358] This $1 million loss is said to have arisen in circumstances where in March 2018 the husband sought to have the wife reactivate the CommSec account in order that he could sell 5,156,353 shares in QQ Pty Ltd on a tax effective basis. There was evidence that at this time the share price for QQ Pty Ltd was approximately 31 cents per share. The husband submits that if the QQ Pty Ltd shares had been able to be sold at this time the parties would have received some $1.598 million, but the wife refused to permit this. The husband notes that at the time of the hearing in February 2020 the QQ Pty Ltd share price was approximately 10 cents, meaning that the value of the parties’ shareholding had fallen to about $515,000. He submits that had the wife unlocked the account in late March 2018, as he had sought, there would have been an additional $1 million available for division between the parties, something which the wife ultimately admitted in cross examination.[359]
[358] Husband’s closing submissions, paragraph 160.
[359] Husband’s closing submissions, paragraph 161.
In her closing submissions, however, the wife appears to resile from this admission in the witness box. She disputes that a loss of $1 million occurred. She submits that the husband had no intention of selling the QQ Pty Ltd shares, and that there is no evidence that there has been any loss, let alone a $1 million loss.
I do not accept the wife’s submissions in this regard; indeed, I do not regard the submission as being open. As the husband submits in response, the wife’s stated position is completely at odds with the evidence. As much is clear from the correspondence between the parties’ solicitors in March 2018 where the husband made it clear to the wife that a failure to sell would cause economic harm, and the totality of the husband’s evidence in cross examination. Further, the passage extracted by the wife at paragraph 138.45 of her closing submissions actively misrepresents the husband’s evidence in cross examination. It is plain that the husband sought to take some profits from QQ Pty Ltd and liquidate some shares in a tax effective manner. This the wife prevented him from doing. It is also apparent that the wife effectively conceded in cross examination that there had been a loss of $1 million by reason of the husband’s inability to sell the QQ Pty Ltd shares when he considered it prudent to do so.[360]
[360] Husband’s reply submissions, paragraph 89.
In all the circumstances I am satisfied that this unhappy episode is also something which, if there were to be any adjustment pursuant to s 75(2)(o) of the Act, should result in an adjustment in the husband’s favour. Once again, I will return to the significance of this matter for any adjustment between the parties.
The wife’s son
The final matter which the husband says should be taken into account in altering the parties’ interests in property is what he describes as the manifest contributions, over more than a decade, made by him to the wife’s son from her earlier relationship. The husband submits that while these contributions are incapable of being regarded as contributions for the purpose of s 79(4)(c) of the Act as the wife’s son is not a child of her marriage to the husband, his support for this child, both financially and as a father figure, in circumstances where he had no legal obligation to provide such support, is a fact or circumstance which the justice of the case requires be taken into account: Robb v Robb (1995) FLC 92-555.[361]
[361] Husband’s closing submissions, paragraph 162.
The husband points to the fact that the wife’s son came to live with him when he was seven years old. His evidence, which I accept, is that he cared for and helped to raise the boy, treating him as one of the parties’ children. He notes that the child even adopted the husband’s surname, in circumstances where his biological father did not have a relationship with him until his teenage years, and provided no financial support for him. The husband’s evidence is that he met all of the boy’s expenses, including private school education in both Japan and Australia, the renovation of the former matrimonial home at least in part so that the child had his own space, payment for substantial international travel, and payment of the sum of $5000 to the costs of the son’s engagement party, and even the cost of the engagement ring.[362]
[362] Husband’s closing submissions, paragraphs 163-164.
The wife accepts that the husband played a role in caring for her son until 2010 when he ceased to live with the parties, although she says, somewhat cryptically, that she does not accept the care was as asserted by the husband. She agrees that the husband’s income went towards meeting his educational and living costs, although she does not accept that the cost of the renovation of the former matrimonial home was solely attributable to him.[363]
[363] Wife’s closing submissions, paragraphs 131.12.
Regardless of whether the renovation of the former matrimonial home was occasioned primarily by the need to give the wife’s son from her earlier relationship his own space or not, the husband’s very substantial support of this child over many years when he had no obligation to do so is striking. I am satisfied that it is clearly something which, if there were to be any adjustment pursuant to s 75(2)(o) of the Act, should result in an adjustment in the husband’s favour.
Assessment on s 75(2) matters
Taking all of the s 75(2) considerations into account, despite conduct for which the wife can fairly be criticised and the fact that some matters tilt more in favour of the husband than the wife, in my assessment it would be just and equitable to make a small adjustment of 2.5 per cent to the wife, particularly having regard to s 75(2)(k) of the Act and the fact that the duration of the marriage and her period out of the workforce likely affected the wife’s earning capacity. I observe that were it not for the s 75(2)(o) factors which so favour the husband that are the subject of analysis above, a higher adjustment in favour of the wife may have been appropriate.
FINAL CONSIDERATIONS
The parties’ asset pool, inclusive of superannuation, is at least $16,157,790. This is a substantial figure. As has been mentioned, it is the husband’s position that were there to be any adjustment pursuant to ss 79(4)(e) and 75(2) of the Act, it should be in his favour given his age, his limited future employment prospects, the fact that he has the sole care of and responsibility for the two younger children of the marriage, his care of the wife’s son from her earlier relationship, and by reason of the wife’s conduct in these proceedings.[364] He has maintained that in all the circumstances a division of the parties’ net non-superannuation assets, as well as their superannuation entitlements, on a 70/30 per cent basis in his favour, would be appropriate and just and equitable. This division is based on a 70/30 per cent assessment on contributions. However, it has also been the husband’s position that if, contrary to these submissions, the Court were to assess the wife’s contributions as being greater than 30 per cent, there should be a s 75(2) adjustment in favour of him so that the ultimate result is one of 70/30 per cent in his favour.
[364] Husband’s closing submissions, paragraph 167.
The wife has maintained that an imbalance in the assessment of the parties’ contributions as to not more than 60 per cent in favour of the husband and not less than 40 per cent in favour of her would give proper and appropriate recognition to the contributions made by the husband over and above those made by her.[365] The wife assesses such a division, on the basis of her balance sheet, as producing a disparity between the parties of $2,944,912.[366] However on the basis of a net asset pool of at least $16,157,790, the disparity would be at least $3,231,558. The wife submits that an assessment of contributions as to 70 per cent in favour of the husband and 30 per cent in favour of her amounts to a disparity on her asserted balance sheet of $5,889,824 (on the basis of a net asset pool of $16,157,790, the disparity would be $6,463,116), which she says would be “grossly outside” the ambit of the Court’s discretion in all the circumstances.[367] The husband submits that in the face of his significantly greater contributions, including his initial contributions and the distributions and inheritances from his parents, it would be manifestly inadequate for him to receive only 20 per cent more than her by way of contribution-based entitlement.[368]
[365] Wife’s closing submissions, paragraphs 133.
[366] Wife’s closing submissions, paragraphs 134.
[367] Wife’s closing submissions, paragraphs 135.
[368] Husband’s reply submissions, paragraph 71.
Insofar as the relevant s 75(2) factors are concerned, the wife has submitted that when taken together they warrant an adjustment in her favour of not less than 10 per cent.[369] She goes on to say, however, that if the Court does not accept her submissions in relation to the treatment of addbacks against the husband, the Court must take into consideration “the vast sums of money that the husband has had access to since the parties’ separation, including but not limited to the increase in the Viridian line of credit up to $1.1 million”. It is her position that the Court cannot ignore the husband’s conduct in this regard as “it is clear that [he] has had the sole benefit of the use of this account to the detriment and exclusion of the wife”. This, the wife has maintained, would have the effect of her having contributed to the costs of the husband and the children. In these circumstances, the wife has contended that the adjustment in her favour “could not be said to be less than 20%”.[370] The wife has submitted that it cannot seriously be maintained that the circumstances of this case do not warrant an adjustment in her favour, and could ever warrant an adjustment in favour of the husband.[371]
[369] Wife’s closing submissions, paragraphs 139.
[370] Wife’s closing submissions, paragraphs 140-141.
[371] Wife’s closing submissions, paragraphs 140-142.
In relation to the wife’s contention that the husband’s access to the Viridian line of credit should result in an adjustment in her favour, the husband points out, correctly, that this submission overlooks his evidence that, over and above the $176,000 he concedes were applied to his legal costs, the balance of the drawings from the Viridian line of credit were referrable to the acquisition of shares, the conservation and improvement of the former matrimonial home, and school fees.[372] I have accepted the husband’s evidence in this respect.
[372] Husband’s reply submissions, paragraph 91.
In support of her position as to the appropriate adjustment of interests the wife notes that the relationship was lengthy, subsisting for approximately 23 years.[373] She has submitted that the parties assumed “traditional roles”, and that the husband cannot establish that after his redundancy he assumed the role previously undertaken by the wife.[374] However in this regard the husband points out, correctly, that even the wife conceded in cross examination that after the husband’s redundancy the husband’s homemaker contribution increased significantly.[375]
[373] Wife’s closing submissions, paragraph 144.
[374] Wife’s closing submissions, paragraph 145.
[375] Husband’s reply submissions, paragraph 93.
The wife maintains that although the assets of the parties are significant, the husband’s failure to make full and frank disclosure, including in relation to the possible existence of undisclosed assets abroad, makes it difficult to ascertain the full extent of the parties’ assets. Referring to In the Marriage of Weir and Weir (1993) FLC 92-338 and In the Marriage of Black and Kellner (1992) FLC 92-287, she contends that the s 79 process can only proceed on a just and equitable basis if both parties make full and frank disclosure, and that where that has not occurred the Court should not be unduly cautious about making findings in favour of “the innocent party” about undisclosed assets.[376]
[376] Wife’s closing submissions, paragraphs 146-147.
On the subject of the asserted existence of un-disclosed assets, the husband’s position, which I have accepted, is that this allegation is without foundation. There is no evidence that the husband has not complied with his obligation of disclosure, and he has explained, in my view reasonably, that insofar as certain historical transactions are concerned he no longer retains the source documents. The husband’s evidence in this respect is unchallenged, and sits inconsistently with the wife’s submissions to the contrary. Further, I accept that it is untenable for the wife, in submissions, to make allegations about the husband’s failure to disclose assets alleged to exist abroad in circumstances where he was not cross examined in relation to these matters.[377]
[377] Husband’s reply submissions, paragraph 94.
Although the wife concedes that the husband’s initial contributions were greater than hers, she has submitted that the value of those initial assets is difficult to discern because the husband has run his case from marriage, rather than from cohabitation. In any event, the wife says, the difference must be assessed through the prism of the totality of the parties’ contributions made by them over a long period, and in these circumstances any disparity is minimised or significantly reduced: Pierce & Pierce (1999) FLC 92-844. Referring to Mallet v Mallet (1984) FLC 91-507, Rolfe & Rolfe (1979) 90-629, 78,272-78,273, Ferraro & Ferraro (1993) FLC 92-335, 79,572 and Fields & Smith (2015) 93-638, the wife submits that the process of weighing the parties’ respective contributions necessarily involves a comparison of the disparate nature of those contributions, and that there can be no doubt on the evidence that both parties contributed to their full extent within their own spheres for the duration of their relationship. She has submitted that the Court should not make the mistake of downplaying the importance of, and the weight to be given to her role in the relationship.[378]
[378] Wife’s closing submissions, paragraphs 148-155.
It is the wife’s position that whereas she had sought an order for the sale of the former matrimonial home and a superannuation splitting order, justice could be done by awarding her a sum of money reflective of the percentages she seeks, in which case it would not be necessary for the husband to sell the former matrimonial home and he could reorganise his affairs as he wishes.[379]
[379] Wife’s closing submissions, paragraph 159.
On the subject of the quantification of his initial contributions, the husband submits, and I have accepted, that his evidence as to his financial position at or about the time of the commencement of the parties’ de facto relationship is the best evidence available and was largely supported by the corroborating documents. As the husband contends, after the passage of some 25 years the evidence he has adduced as to his financial position at that time is weighty evidence.[380]
[380] Husband’s reply submissions, paragraph 95.
On the subject of financial contributions more generally, both at the commencement of the relationship and constituted by the distributions and inheritances received by the husband from his parents late in the marriage, together with the other 79(4)(a)-(c) contributions made by him, the husband contends that once all of these are taken into account and compared with those of the wife, it cannot be said that an adjustment of 30 per cent in the wife’s favour of an asset pool worth well in excess of $10 million does not give proper weight to her contributions. The husband does not seek to downplay the contributions that the wife has made as homemaker and parent, rather it is his position that he also made such contributions. Accepting that the wife was the primary homemaker and parent of the parties’ children from May 1995 to until 2009, the husband maintains that during this time he also assisted in this role (including by parenting the wife’s son) as well as providing financially for the family. He points also to his evidence that from 2009 until separation in April 2016 he assumed the role of primary homemaker and parent, noting the wife’s evidence that his role at this time was “significant”, and that since separation and continuing until the present he has been the sole parent – initially for the parties’ three children, and then for the two dependent children of the marriage: see Fields & Smith (2015) FLC 93-638 as to the need to look at contributions after separation. This he has done without any financial or practical support from the wife.
Insofar as the wife’s references to the principles essayed in Mallet v Mallet and Ferraro & Ferraro are concerned, the husband says that these are inapplicable as this is not a case where the Court is required to ensure that there is the just and equitable treatment of a wife who has not earned income during the marriage but has contributed as homemaker and parent, allowing the husband to earn an income. Rather, the husband says, this is a case where assessed holistically both he and the wife have contributed as homemaker and parent and he was the primary breadwinner in addition to these contributions, and also made contributions in the form of his initial contributions and later distributions and inheritances from his parents.[381]
[381] Husband’s reply submissions, paragraph 96.
As is apparent, I do not accept that a finding of contributions in the order of not more than 60 per cent in favour of the husband would be appropriate in this case. As I have found, the husband’s financial contributions to the property of the parties have been striking. His contributions to the welfare of the family have also been significant, especially, it would seem, since 2009 and particularly since separation in 2016. Notwithstanding the length of the marriage and the important contributions that the wife no doubt made to the welfare of the family, I do not accept that the disparity between the parties’ respective contributions is minimised or significantly reduced in the way the wife contends it should be. It is for this reason that in all of the circumstances of this case I have found that the husband’s contributions should be assessed in the order of 67.5 per cent.
Insofar as any adjustment for the purposes of s 75(2) is concerned, I have acknowledged that the husband presented formidable arguments that, by reason of the wife’s conduct and the fact that there are s 75(2) factors in his favour, there should be no s 75(2) adjustment at all, or if there is an adjustment it should be in his favour. Nonetheless, taking everything into account, I have found that it would not be just and equitable to fail to acknowledge the significance, as s 75(2)(k) of the Act requires, of the fact that by reason of her contributions to the welfare of the family in the role of homemaker and parent, the wife was out of the workforce for some 15 years between 1994 and 2009. By reason of this absence from the workplace the wife must inevitably have had her earning capacity affected. Notwithstanding aspects of the wife’s behaviour which have been properly the subject of criticism, and the existence of certain s 75(2) factors which favour the husband, in all the circumstances I have found that it would be just and equitable to make an adjustment of 2.5 per cent in favour of the wife pursuant to s 75(2) of the Act. This results in an overall division of 65 per cent to the husband and 35 per cent to the wife.
A 65/35 division of the parties’ non superannuation assets excluding listed shares would, on the balance sheet I have found, give the wife $2,145,622. Allowing for the sum she has already received of $1,583,650, she would be entitled to a cash sum from Pool A of $561,972. She would also receive shares worth approximately $1,557,311 from Pools B and C, and a further cash sum of $42,082 from Pool C. The superannuation split will be worth approximately $1,910,211 to her. These figures ignore her entitlement to 35 per cent of the US properties (valued at USD$568,000, less relevant costs) upon their sale, and, if appropriate, a 35 per cent division of the not publicly listed shares to which she claims an entitlement. The wife would therefore have cash and shares worth at least $2,161,365, plus some $1,910,211 in superannuation, together with what she has already received. These are not inconsiderable figures. However as the husband correctly observed in his closing submissions, there is nothing in the Act which authorises the Court to equalise the financial strengths of the parties, nor to correct economic anomalies. As Nygh J famously observed in W & W (1980) FLC 90-872, at 75,528, s 79 of the Act does not give the Court an independent power to effect “palm tree justice”.
There will accordingly be orders in the scheme proposed by the husband and set out at the commencement of these reasons on the basis that, for the reasons I have given, orders in that form most effectively do justice and equity between the parties. As I have indicated the parties will also have liberty to apply in relation to the outstanding issue of the not publicly listed shares which are the subject of a claim by the wife, if that proves necessary.
I certify that the preceding two hundred and ninety-nine (299) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice McEvoy. Associate:
Dated: 24 June 2021
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