HARRIS & HARRIS

[2009] FamCA 1388

FAMILY COURT OF AUSTRALIA

HARRIS & HARRIS [2009] FamCA 1388

FAMILY LAW - PROPERTY - Value of property - Expert evidence

APPLICANT: Mr Harris

RESPONDENT: Ms Harris

FILE NUMBER: BRF 3592 of 2005

DATE DELIVERED: 11 December 2009

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Bell J

HEARING DATE: 26, 27 & 28 October 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Carrigan of Counsel

SOLICITOR FOR THE APPLICANT: Stockley Furlong

COUNSEL FOR THE RESPONDENT: Mr Forrest of Counsel

SOLICITOR FOR THE RESPONDENT: Schultz Toomey O'Brien

Orders

IT IS NOTED that publication of this judgment by this Court under the pseudonym Harris & Harris has been approved by the Chief Justice pursuant to s 121(9)(g) of the Act.

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRF 3592  of 2005

Mr Harris

Applicant

And

Ms Harris

Respondent

REASONS FOR JUDGMENT

1. This is an application of the part of the applicant wife, Ms Harris, for certain orders in relation to property and maintenance, such application was instituted against her former husband, Mr Harris.  The parties were born in 1963 and 1959 respectively.

2. The parties commenced cohabitation in about August 1984.  They continued living together until married in October 1998.  They separated on 17 March 2004.  Two children were born to the marriage who are now adult.  There were children born to each of the parties from previous relationships.

3. At the commencement of cohabitation neither of the parties contributed any assets of any moment. 

4. The parties lived in Suburb Z, Queensland for a period of time and worked as employees of the family business known as the Harris Family Trust.  More of this anon.

5. They earned a salary and certain moneys were paid by way of drawings from the family trust business account.

6. They initially lived in rented accommodation for a period of time.  Then in 1992 purchased their first property at Y Street, Suburb W for about $72,000, this being sold in 1994.  They then purchased another property at U Street, Suburb O for about $180,000.  They resided in this home.

7. Shortly after this acquisition the husband’s father died in August 1995.  Mr Harris Snr was in fact the creator and appointer of the Harris Family Trust which looms large at a later stage.  I will not touch upon that trust until later under a separate heading.

8. As a result of the death of his father, however, the trustee deed indicated that the husband’s mother became appointer of the trust and it is alleged by the husband that the grandmother retains control of the trust and that in fact the trust assets should not be considered assets of the parties or either of them pursuant to the Act, as propounded by the wife.

9. The husband became a director of the trustee company along with his sister and his mother.  Unfortunately, B, his sister, and he appeared not to get on, B and her husband at a later stage were made responsible for a certain part of the business and unfortunately they did not do very well and eventually they were forced out.

10. The husband became overall manager of the family business at Town C and in south Queensland and thereafter he commuted between Ipswich and the business premises on the North Coast.

11. The parties relocated from Suburb O and rented a house on the North Coast.  They sold the Suburb O house in about the year 1999 and purchased a property at Town V for about $325,000. 

12. The wife’s mother died in January 2001 and the wife’s father died shortly thereafter in July.  The wife received an inheritance from her father’s estate.  Part of these funds were used for Business Asset X.  The wife makes much of this.  Business Asset X, she says, was her own creation and became very successful and was responsible for a substantial portion of the business’ income.  I accept that it was an important part of the business’ income but not to the extent to which she says and I refer to the evidence of Mr M.  She did put moneys into this business but no invoices were ever provided by her (see Mr M’s affidavit).  Notwithstanding this I am more than satisfied that the wife, from her inheritance and because of her own personal labours, was responsible for Business Asset X having made a substantial contribution to the business by these efforts and it has to be acknowledged.

13. In 2003 the wife sold her deceased parents’ property and received something in excess of $228,000 as and by way of net proceeds of the sale.  This money was contributed to not only the business but the purchase of a property at K Street,  hereinafter referred to as the former matrimonial home.  They sold the Town V property in about 2003 and the proceeds were used for the purchase of the former matrimonial home.  It was purchased with some $680,000 and the wife contributed a substantial amount of the balance of the proceeds of her parents’ home towards the acquisition of this property. (see Mr M’s affidavit of 10 November 2008, para 23).

14. The parties separated in March 2004.

15. It is quite clear on the evidence, and for once both parties agree, that they worked exceptionally hard in the business.  The wife was involved in a section of the business in south Queensland and the husband was responsible for sales which involved frequent travelling in Queensland and interstate.  I am able to say that both parties worked exceptionally hard in the respective sections of the business and generally together.  It could not be suggested that they failed in such energetic exercise as the business became very successful and profitable.

16. During the time that the husband did extensive travelling by way of sales trips, there would have been more emphasis upon the wife looking after the children of the marriage.  They were two in number and are now adult and are no longer the responsibility of the applicant and her former husband. 

17. There is some faint suggestion from the husband that the applicant received a considerable amount of help from her mother and from the domestic staff.  I do not believe that whatever help she had was of sufficient magnitude to detract from the fact that she assisted tremendously in the running and maintaining of the house and the looking after of the children while the husband was away.

18. I am able to say that the assets of the parties and the value attributable to them have been agreed upon between the parties.  I refer to and incorporate in these my reasons a document headed “Contended for and on behalf of Wife”.  There are two differences.  One where it is necessary to add back an extra amount of partial property settlement paid to the wife of some $6,800 and to increase the wife’s Westpac liability from $55,000 to $59,000. 

19. I note that there has been agreement that the net assets of the Harris Family Trust are as valued by Mr R as at 30 June 2007.  Something was made of this by Forrest of Counsel who appears on behalf of the wife since there has been, according to their case, extreme difficulty in getting the financial statements of the Harris Family Trust, but not persevered with. 

20. The husband resided in the former matrimonial home situated at K Street up until about the month of April 2008.  Thereafter his son, L, resided there and paid rent.  During the period that the husband resided in the former matrimonial home, he paid the mortgage, insurance, rates and other outgoings on the home.

21. The wife, for a time, was living in a de facto relationship with a gentleman.  This finished in 2007.  She has endeavoured to maintain herself by unskilled labour and has for a period been involved in a construction industry position.  She is at present not receiving any income but indicates that she may have some claim against her employer for wrongful dismissal.  She on some occasions earned considerable amounts of money.  I am able to say, however, that her ability to earn income of anywhere approaching what she received from the trust and from the husband subsequently would in no way come anywhere near that, although she has, as I have said, received on an occasion where she worked some considerable number of hours including overtime per week, received a fairly substantial wage.

22. The wife does not have any qualifications and I must say that in future I think it would be extremely difficult for her to receive income other than in modest form of about $500-600 per week.  This looms large in her claim for leave to file an application for maintenance and the quantum of such maintenance.  

23. Needless to say I am of the view that the husband’s position is much more solid financially wise.  He is at present under an employment contract by way of manager for the business and is in receipt of something in excess of $180,000 per year plus other benefits.  Clearly his future is sound and solid.  He has, by the dint of hard work, assisted in the earlier stages by his wife, developed this business into a financially strong and viable business and both accountants only speak favourably of the future of the business.

24. There is no suggestion that his position is under threat and I can see no reason why he should not continue in the position in which he is at present, obviously with a considerable income and the opportunity of receiving distributions from the trust in the future.  He could favourably anticipate such distributions because of what I find infra. 

25. As I have said, on the other hand, the wife has little or no prospects of receiving anything as and by way of a substantial income per week.  Her earning capacity is, as I have said, limited to a maximum, I would find, of some $600.  She has been and is unemployed.  She has had some health problems.  I note of course, as I have said during the course of the trial, that as a result of this trial and my judgment, that the applicant will in fact be comparatively well set up but she is in the invidious position of being in effect assets rich and income poor.  She is not able to access her superannuation entitlement for a considerable period, not until she is at least 60 and that is some years in the future.  Consequently she is put in a position, as I have said, of being assets rich and income poor.

26. I think this tends to loom large, too, in her application for leave to file an application for maintenance notwithstanding the time limited by the Act has expired.  I believe it is necessary for the applicant wife in her leave application to show hardship and those other matters which the authorities are only too clear upon.  I note in the husband’s submissions contained in his Summary and Outline of Submissions particularly at par 11 the wife was in receipt of considerable sums of money from the trust not only the $52,000 but amounts as contained in the submissions and substantial distributions form the trust, eg 2005  $104,344, 2006 $71,230.  These ceased in 2007 and some difficulties arose in relation to the wife’s receipt of $52,000 from either the husband or the Trust.  I believe that at about December 2007 when the application was made, she was experiencing hardship in that her position vis-à-vis income was chaotic, her de facto relationship had failed, and she has little or any experience in any other field other than the trust businesses.  Consequently, I am satisfied that she has shown hardship.

27. These amounts are no longer available to her save for the Order of Jordan J.  Taking into consideration her health and her limited education or qualifications and the lack of anything in the future that I can readily foresee by way of employment, I consider that she should have leave since her hardship has been proved.  I am also satisfied that the material exhibits reasons and explains the delay between March 2007 and December 2007 when she filed for spousal maintenance and sought leave.  I believe her material gives an adequate explanation of the reasons for hardship.  I believe thereafter that the question of quantum is generally within my discretion and taking into consideration those matters to which I have hereinbefore referred and will in future refer, I think that she would be entitled to an amount of some $750 per week to expire at the end of two years, an order which she has sought.

28. The question now for me to determine is whether the trust assets which are agreed to be $1.5 million should be taken into consideration as assets of the parties or either of them.  

29. It appears from the affidavit of Mr M filed on 10 November 2008 the trust initially was brought into existence by the father of the respondent, namely Mr Harris Senior (see par 5 of the aforesaid affidavit).  (See also affidavit of Mr R dated 6 May 2008).  Mr Harris Senior had been involved in the general personal service business for some considerable period and he married the grandmother Ms Harris Senior in 1953. 

30. In or about 1978 a business known as Harris Nominees Pty Ltd was set up as well as the Harris Family Trust.  The appointer of such trust was the grandfather.  Subsequent thereto various entities were brought into existence and businesses were run.  Most of these businesses were, from about 1982, based in south Queensland.  A factory at Town C on the Sunshine Coast was bought which was used to do moulding and other plastic products for the … business.  This business increased in value and in work and eventually they were sold in the 1980s and some of the capital derived from the sale went to purchase a … machine from Europe which became the nucleus of the present … business. 

31. The grandfather died in August 1995 and as a result of the terms of the deed of settlement the grandmother, Ms Harris Senior, became the appointer of the trust.  At the time of the death of the grandfather the respondent father was working in one business in south Queensland.  The husband’s sister, B was helping the husband’s father at Town C and also the husband received assistance from the mother. 

32. As I have indicated previously, after the death of the husband’s father the husband’s sister, B ran, with her husband, a business on the north coast and the husband did generally run the business in south Queensland with some supervisory capacity of the north coast business.  This did not work out and as a result, as I’ve indicated previously, the husband’s sister, B left the business and has had no contact with it since that time.

33. The creation and subsequent dealings of the trust and other entities are set out in Mr R’s affidavit supra (see par 3.3 and 3.7 and general background p. 4).

34. As appears in par 5 of the aforesaid affidavit, it is said by Mr M that Ms Harris Senior never worked in the business, had no knowledge of the day to day management of it or how the products were made. 

    (v)She was totally reliant on [Mr Harris Senior] initially and later [the husband] for this as he was experienced in the business.  [Mr Harris Senior] and [Ms Harris Senior] had a traditional type marriage and never worked outside the house.

    (w)[Ms Harris Senior] had never had any desire to work in the business.  She trusts [the husband] as he has always done the right thing and looked after the business and her.  At the same time [Ms Harris Senior] has never had any doubt that [Mr Harris Senior] set up the business in the manner he did to protect his and her interests. (my underlining)

    (x)[Ms Harris Senior] has been content to let [the husband] run the business.  Although she had a reasonable relationship with [the wife] and accepts her as her son’s wife, she would never have entrusted control of her shares to the business to her nor would she have relinquished day to day management and control of the business in the manner she did to the wife on her own.

35. It is alleged by the wife, Ms Harris, that in fact the business is “the alter ego” of the husband, Mr Harris, and that Ms Harris Senior is nothing else but a figurehead, and that as a result thereof I should apply a doctrine established in Ascot Investments v. Harper and subsequent authorities to these facts and indicate that the assets of the trust, which are valued by consent at $1.5 million, are assets of the parties or either of them. 

36. The question appears to be a question of what is the control?  Who has the control of the business?  Obviously the husband is what I would call the general overall manager and managing director.  He has run the business for a considerable number of years and as was said by Mr M and those paragraphs to which I have hereinbefore referred, seems to have done it comparatively on his own.  The husband’s mother, was consulted on occasions.

37. Am I able to say on the material before me that the husband is the controller of the trust?

38. The wife, Ms Harris, points in particular to an aborted share transaction which took place in early June 2003.  Mr M was requested by the husband to prepare and lodge appropriate paperwork to appoint the wife as a director (see transcript the husband’s evidence from par 63 line 29) where he wanted to get the wife a “share in the business” (par 64 line 31 – 36).  As he says in par 19(d), it appears that documentation to effect the transfer of one share from B to the wife was inadvertently prepared at the same time.  There are also documents, in particular the relevant Form 484, which were forwarded by Mr M to the relevant authority.  But as was said in par 19(f), upon discovering that the required forms were unsigned it was rescinded and as has been pointed out, in Mr M’s opinion as a certified public accountant, the Form 484 annexed to the wife’s affidavit was not a share transfer but was a notification to ASIC which in itself was ineffectual and had no cause and effect whatsoever.  Mr M has explained in full, albeit somewhat embarrassedly, that one of his staff did in fact make a horrible mistake which has caused him embarrassment and I am sure that the member of the staff has been caused embarrassment.

39. I must say that the wife impressed me as a person who would be able to say anything that would advance her case in relation to the trust.  She did not appear to me to have a great grasp of the principles applicable to the transfer either of shares or the appointment of a director which she was appointed to the trustee company as a director.

40. It was faintly suggested by Forrest of Counsel that this evidence and other evidence of Mr M wherein he indicated that in his opinion that the grandmother had little direct input into the running of the company, that I should draw from his evidence that there was a conspiracy between the father Mr Harris and Mr M to exclude the wife from any claim that she may have by way of shareholding and/or support the contention that the grandmother had not abandoned control of the property.  I do not believe that Mr M, who indicated that his receipts from working for the trust was about $15,500 per year, a certified accountant of some standing and a specialist in the field of personal service business, would in fact conspire on that evidence alone with the father, Mr Harris, to give false evidence in this Court in an endeavour to dissuade the Court from determining upon evidence whether in fact the grandmother had abandoned control or not.

41. In fact both Mr T and Mr M’s evidence clearly indicates that it was the intention of the husband’s father to have a trust set up so not only was the trust looking after the business, but the husband’s mother subsequent to his death.  She has at all times been looked after by the trust, save for a period when perhaps she was not being paid an amount that she should have been paid and I can, with respect, seem to suggest that there is this interest of the husband’s mother, who is the appointer, an that whilst the business has been run, as many businesses are run by general manager, that being the husband in this case.  This variation was of concern to the then accountant Mr T.  This variation came to be controlled by the husband (see evidence of Mr T p.8, line 5-9).

1. I refer in passing to Lamrock v Lamrock 2008 FamCt 79 wherein it suggests that where the assets of a company or trust are effectively controlled by a party, they will be regarded as property of the marriage.  The Court went on in that case to quote Gibbs J and Ascot Investments. 

2. A further Full Court decision in the case of S v M & Ors 2003 FamCt 1387.  It was said at par 63:

   As a result of the completely controlled exception of limit of third party jurisdictions, in circumstances where a party of the marriage has such control over the third party and the ability to vest property of the third party in himself or herself, this has been treated as equivalent to ownership.

3. The husband does not have the power to vest, but see AB infra.  There seems to be the suggestion in many authorities including that one and others referred to in those authorities, that there must be the ability of, in this case, the husband to control the trust to such an extent that he has the power to realise for him the value of the assets of the company. 

4. The most difficult question in this case is whether or no the trust is the “alter ego” of the husband.  This is alleged by the applicant and in her affidavits as well as in her extensive evidence and cross-examination.  She is of the belief that subsequent to the death of the husband’s father, the original appointer of the trust, that notwithstanding the fact the husband’s mother became appointer by the death of the husband’s father, that the person who “controls the trust”, who runs the trust and who is the person solely responsible for the welfare of the trust is that of the husband.

5. Clearly on the evidence before me, and it has not been gainsayed by the husband in any way whatsoever, he is the person who is in effect the general manager and has been the general manager of this business for many years.  As I have already indicated, that as a result of his work, assisted greatly by the applicant wife, the company has been successful.  He appears, on the face of it, to make all the decisions in relation to the running of the business.   There has in fact been very little, if any, written correspondence by the appointer, the husband’s mother, in relation to the business before the Court, save for one letter which was directed to Mr M and is referred to quite extensively in cross-examination by Forrest of Mr M.

6. It is quite clear that the wife not only believes that this company is the alter ego of the husband and as a result thereof he is the person who is, in effect, the trust, ie. the alter ego.  She believes it is their company.  It is not for her, however, to decide.

7. What then can we say that the evidence of the  independent witnesses, or as independent as anybody can get in a case such as this, put before the court.  They are, in effect, two.  Both of them accountants, being Mr T, who is the original accountant of the trust and trustee company, and Mr M, who became accountant of the company in about the year 2000 when the husband, the respondent, dismissed Mr T from his position as an accountant of the business and employed Mr M.  This is one of the points that the wife points to, that in fact he, the respondent husband, dismissed the existing accountant who in fact was responsible for, with Mr Harris Senior, for the creation of the original trust and I would assume giving advice to Mr Haris Senior in the creation of that trust.

8. Subsequent to the date of the appointment of Mr M, he has slotted into the same position as Mr T and as he has said in his evidence, he has given certain advice to the directors of the trustee company which generally have been accepted by them.  This is the mooted question of when the wife, the applicant, became a director of the trustee company and the alleged share transaction.

9. She says that at or about the time of her becoming a director, she signed certain documents which entitled her to have the share of the husband’s sister, B, who was a one shareholder in the trustee company, transferred to her at or about the same time as her being appointed director.

10. There appears to be some very confused evidence in support of what she says in that Mr M says that he received directions from the husband for the installation of the wife as a director of the company and for the preparation of the transfer of a share, being the husband’s sister, B’s share, she having one share, as I have said, in the company, from her to the wife.  This did not take place.  Documents were prepared by Mr M and forwarded to the husband for the purpose of effecting his instructions.  The only documents that were returned were the documents appointing the wife as a director.  Some documents were created for the purpose of effecting share transfers between various parties.  At that time there were three shareholders:  the husband, the husband’s sister, B and the husband’s mother.  The husband’s mother held 98 and the husband and the husband’s sister, B held one each.

11. As a result of a mix-up and total confusion, nothing ever took place for the transfer of a share from the husband’s sister, B to the wife, notwithstanding documents were forwarded to ASIC.  These were subsequently revoked and as appears in Mr M’s evidence, it was an embarrassment for his company that such a disaster took place.

12. The wife is strongly of the view that this in itself is evidence to show that not only was she badly treated, there may be some suggestion of fraud, but that the husband, because of the control that he had, was able to influence the other directors and to run the business to such an extent that he precluded her from receiving the share of the husband’s sister, B. 

13. It behoves me then to look closely at what the evidence is in relation to the control by the husband of the company.  Clearly the husband runs the company.  He has done so for many years, as I have said, and has, in fact, been successful with the assistance of the wife up until separation in 2004.  He seems to have made decisions with the assistance of Mr M.  I refer in particular to pages 13 to 26 of the transcript of Mr M’s cross-examination.  He was involved in this aborted share transfer.  He gave instructions to Mr M to appoint the wife as a director.  He was instrumental, on the advice of Mr M, in distributing large profits of the company in the manner in which it has been set out in the evidence.  He was responsible for varying up and down, as I understand, the “remuneration” of the husband’s mother. 

14. In passing it appears that the husband’s father was strongly of the view that he insisted that the husband’s mother would in future be financially looked after.  Initially, the figure was placed at $1000 per week (see Mr T’s evidence) but that this varied up and down.  It also appears that at a later stage after the husband’s sister, B ceased any connection with the business an amount of some $200 (see Mr M’s evidence) was included in the $1000 per week that the husband’s mother received to be some form of assistance to the husband’s sister, B.  He explains the reason for this in that if in fact the money had been paid directly to the husband’s sister, B it might affect her social service entitlements.  This appears to have been with the husband’s approval. 

15. The husband was cross-examined on an alleged agreement that was reached between Ms Harris Senior, the grandmother, and the husband in relation to some property which was held as to 3/5 to the wife and 2/5 to the husband.  The terms of the agreement were that he was to transfer his 2/5 interest in the land to B, that he was to take out an insurance policy and that as a result of him doing that that he was to receive the shares of Ms Harris Senior in the trustee company. 

16. This transfer never took place.  However it has been denied vehemently by the husband that he ever entered into any agreement of this nature.  But it is suspicious, if I may put it that way, that in fact he did take out a term policy for some $750,000 and appointed his mother, Ms Harris Senior, as the beneficiary of the policy.  This, as I understand, was taken out while the parties were still cohabiting.  It is, as I have said, somewhat suspicious but I do not believe that I can be persuaded that an agreement to that force and effect took place notwithstanding that someone might suggest that there was part performance of it.

17. The matters that I have looked at in relation to the trustee being the husband and the husband being the trustee is that he has quite clearly, he says with the approval of the husband’s mother, and I doubt this, he has varied the distributions received by the grandmother, he says with the advice of accountants who were the accountants for the company at that time.  However, Mr T is not of that view.  He, in his material, indicates that he was not approving of the fact that the grandmother was at some times not receiving what was agreed to be paid to her, and that was some $52,000 per year.  (see supra)

18. Once again, it appears to me that he has complete control over the amount of funds to be distributed notwithstanding his allegations that he consults deeply with his mother.  (I do not accept the fact that he does so.)  He accepts the recommendations of his agents, ie. the company accountants, and is able to manipulate the payments to his own devices.  I note that subsequent to separation, the distributions of substantial amounts of moneys to the wife ceased and she was brought back to base for around about $52,000 per year as she believed were company directors fees.

19. Perhaps the most telling is the creation of AB Pty Ltd.  It was registered on 5 June 2003.  It was created by the husband and the husband alone.  It was to be a beneficiary of the trust – notwithstanding that it was not an original beneficiary nor added as one – Mr M was hopeful that there would be a variation of the Deed to include AB Pty Ltd but nothing happened (see page 39 of Mr M’s evidence) – AB Pty Ltd has received distribution query wrongfully.  The husband is the sole director and shareholder.  This creation and distribution indicate strongly to me that husband is the Trust and consequently together with the other indicia, I am satisfied and I find the assets of the trust are his within the meaning of the Act.. 

20. Before I go on to the distribution of the assets may I point to one matter which has concerned me.  Forrest of Counsel for the wife submitted that because the paternal grandmother, Ms Harris Senior, the appointer, was not called that this in fact lessened the case of the husband and indicated that the doctrine of Jones v. Dunkell was in support of such submission.  My memory is that that has got nothing to do with it at all.  Jones v Dunkell’s principle is a positive principle, not a negative principle.  In other words it says that if a person who is available to be called and is not called, the inference is that that person will not advance (my underlining) his case – in this case not, as Forrest suggested, that it would weaken his case.

21. The matter of distribution of the estate is extremely difficult. 

22. I have referred to a document which has been put before me and which I now incorporate in full.

ASSETS	VALUE
Fourth property acquired by the parties, registered in the joint names of the husband and the wife and subject to a mortgage liability to the ANZ Bank.  Value as agreed	$750,000
2002 Mazda Motor car in the Wife’s possession	$15,000
Furniture/Artwork in the possession of the Husband – valued by joint expert … of LL Valuers – date of valuation 26 July 2006	$32,525
Furniture and Chattels in the possession of The Wife – Valued by joint expert … of LL Valuers – date of valuation 26 July 2006	$39,000
The Husband’s shares in the company AB Pty Ltd – Valued by Mr R as at 30 June 2009	$66,413
The Husband’s beneficiary loan account balance with the Harris Family Trust – valued as per Mr R’s valuation as at 30 June 2007	$4,000
Husband’s bank account balances – now revised	$3,775
Addback of partial property division previously paid to the Wife and agreed between the parties at the time of payment to be treated as partial property settlement	$25,000	+$6,000
The net assets of the Harris Family Trust valued by Mr R as at 30 June 2007	$1,500,000
Sub Total	$2,435,713
LIABILITIES	AMOUNT
Joint mortgage indebtedness of the Husband and Wife in respect of the mortgage liability secured by the K Street property	$403,000
Wife’s Westpac liability less $23,000 borrowed – used to pay for a car for Mr D	$55,000	$59,000
Wife’s current Visa card liability	$25,000
Husband ANZ personal loan liability (not including amount borrowed for legal fees)	$25,000
Sub Total	$508,000
SUPERANNUATION	VALUE
Wife’s interest in Sunsuper Fund	$2,000
Wife’s interest in AXA Fund	$22,000
Wife’s interest in HA Superannuation Fund as per Mr R’s latest valuation report of 22 October 2009	$1,089,538
Husband’s interest in Sunsuper Fund	$11,802
Husband’s interest in HA Superannuation Fund as per Mr R’s latest valuation report of 22 October 2009	$1,207,127
Sub Total	$2,332,467
TOTAL	$4,260,180
TOTAL (IF TRUST NOT INCLUDED)	$2,760,180

1. You will note I have already referred to the increases of $6000 to the partial property division and increased the Westpac liability of the wife from $55,000 to $59,000.  This would then seem to indicate to me with my notoriously inaccurate maths that the total, if the trust was included, now comes to $4,269,180. 

2. As I have said before and I reiterate and emphasise, as far as I am concerned, on the material before me, it could not be suggested that with the husband and the wife in this case working immensely hard in the creation and improvement of the business that this has caused the trust to become very, very successful and to have developed assets of, as I have already indicated, $1.5m.

3. If it had not have been for one matter, to me it would have seemed quite clear that the property of the parties in relation to contribution should be divided equally at 50/50 but, as I have pointed out, the wife as a result of the death of her parents received a considerable amount of monies which she directed not only to the trust insofar as Business Asset X is concerned, but also in relation to the K Street property.  As a result thereof I am persuaded to increase the distribution in favour of the wife from 50% to 55%. 

4. Subsequently I have to consider the question of the s 75(2) factors.  I have made it quite clear that the wife is nowhere in as financial a strong a position as the husband, that she has little or no training for any job.  She is of the opinion, however, that she has numerous ideas on how to earn money herself but she needs capital (see her affidavit, p. 133).

5. She has limited opportunities to work but I assume that, she being confident that she is able to get jobs in a short time, that that is why she has proposed that the maintenance which I have granted her is limited to a period of two years.

6. Taking those matters into consideration I think there should be an extra 10% added to the wife’s distribution.  Therefore I consider that the properties of the parties should be divided 65% to the wife and the balance to the husband.

7. Another difficulty is that the wife quite properly has indicated she does not wish the assets of the trust to be in any way disturbed, that the asset of $1.5m should remain in tact.  How then are we going to enable the wife to come into that which she is entitled to under the order?  Sixty-five per cent of the assets of the parties comes, according to my notoriously inaccurate maths, to $2,774,967. 

8. The only way that the wife could be put into any funds at all is by getting the whole of the net proceeds of the sale of the former matrimonial home and I will, in fact, be ordering that the home be sold and that the net proceeds, after the payment of all necessary expenses, be paid to the wife in diminution of the amount of $2.77m.  I would think that with the proceeds being paid to the wife that there will be remaining to be covered an amount which is almost equal to that existing in the superannuation fund at this stage.  As a result thereof I will order that after payment of the net proceeds of the sale, that the husband and the wife do take all steps necessary to cause the transfer to the wife the whole of the superannuation entitlements in that fund.

9. I otherwise order that the applicant wife be paid periodic maintenance as from day in the figure of $750.00 per week for a period of two years.

10. I give liberty to the parties to apply in the working out of the order and it may be necessary to seek, at a later stage, some clarification of the orders.

11. The house at K Street must be sold and I would think that the orders would be framed on the following basis:  that the property be sold, the net proceeds be paid to the wife in diminution of the amount of $2.77m and that there be an order in relation to the remaining amount to be taken out of the husband’s entitlement to superannuation.  I make it quite clear, however, I am of the opinion that there must be paid back by the wife the following:  the Mazda motor vehicle ($15,000); and the partial property settlement of $31,000.

12. I might just touch upon the Westpac liability.  This was brought about as a result of her purchasing a company car for Mr D to whom I have referred and for other living expenses as well as assisting the children.  She also has a current Visa card liability which she says she has been using basically for living expenses.  Consequently, I will order that the amount of $2.4m be made available to the wife in the following manner:

·The net proceeds of the sale of the former matrimonial home together with the balance to be split from the husband’s share to make up the amount that I have ordered.

·Secondly, there must be set off the amounts to which I have referred hereinbefore.

1. The order of the Honourable Justice Jordan of 26 May 2008 indicates that there are certain matters which I should take into consideration and determine.  They are set out in 6(a), (b) and (c).  I am of the opinion that the wife is entitled to the refund of the income tax.  (I think that may have been paid, I am not sure).  According to 6(b) it is to be characterised by the judge.  I think that she is entitled to that and there should be no deduction or addition in any way whatsoever. 

2. The payment of $1000 per week, see Order 5(c) wherein it is ordered that the husband continue to pay the wife $1000 per week payable each Monday to her account.  It is, as I have taken into consideration, a form of interim maintenance and should in no way be either added or taken away from the amount to which I have hereinbefore referred. 

3. Insofar as the maintenance is concerned, I have touched briefly upon that.  I grant leave to the wife to institute proceedings.  I am satisfied that she has shown hardship and that she has shown a need.  I am more than satisfied that the husband is able to adequately maintain her to the extent to which she initially seeks but I believe that I should reduce that amount, it being within my total discretion, to $750 per week for the period of two years she has sought.  It appears she is confident that after a period she will be able to earn money (see affidavit of the wife par 135).

1. I will leave it to counsel to draw orders.  Notwithstanding that Forrest of counsel has set out extensive orders, I would consider it necessary to modify them.  I say in passing that the amounts as particularised in counsels’ submissions re maintenance contain sums of money which have not been characterised by either of the parties as to whether they are add backs or what.

I certify that the preceding seventy-nine (79) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Bell

Associate: 

Date:  5 October 2012