Henschel & Sartre (No 7)
[2025] FedCFamC1F 204
•31 March 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Henschel & Sartre (No 7) [2025] FedCFamC1F 204
File number: SYC 6123 of 2020 Judgment of: CAMPTON J Date of judgment: 31 March 2025 Catchwords: FAMILY LAW – PROPERTY – MAJOR COMPLEX FINANCIAL PROCEEDING – Property adjustment pursuant to s 79 of the Family Law Act 1975 (Cth) – Where the husband’s parents both personally and by way of corporations they control have made significant advances of funds to the husband prior to, during the course of, and subsequent to, the parties marriage – Where the husband contends an advance in 2001 and a series of advances from 2015 to 2020 were by way of loan agreements, being liabilities in the balance sheet identifying the property of the parties – Where the wife contends that the evidence does not establish loan agreements in the terms contended by the husband, or in the alternative that recovery of the 2001 advance is statute-barred, or in the further alternative that it is not likely that either advance will be called upon to be repaid (Biltoft and Biltoft (1995) FLC 92-614) – Where the husband’s initial financial contributions and the financial support provided by his parents during the marriage attracts significant weight when consideration is given to the use made of those contributions (Pierce v Pierce (1999) FLC 92-844) – Where both the parties worked hard in their respective spheres throughout the marriage relationship – Where the wife makes a Kennon v Kennon (1997) FLC 92-757 contention that her contributions were made more onerous and arduous – Orders made adjusting the property of the parties 45.5 per cent to the wife and 54.5 per cent to the husband. Legislation: Family Law Act 1975 (Cth) s 75, 79, 96, 106A
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 68
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) ch 7, r 7.31
Duties Act 1997 (NSW) s 148
Limitation Act 1969 (NSW) s 14, s 54
Cases cited: Biltoft and Biltoft (1995) FLC 92-614; [1995] FamCA 45
Bircher & Bircher and Anor (2016) FLC 93-721; [2016] FamCAFC 123
CGM Investments v Chelliah (2003) 196 ALR 548; [2003] FCA 79
Commonwealth v Verwayen (1990) 170 CLR 394; [1990] HCA 39
Dajani & Dajani [2025] FedCFamC1A 28
Fitzgerald v Masters (1956) 95 CLR 420; [1956] HCA 53
Hall v Hall (2016) 257 CLR 490; [2016] HCA 23
Horrigan & Horrigan [2020] FamCAFC 25
Kennon v Kennon (1997) FLC 92-757; [1997] FamCA 27
Kowaliw and Kowaliw (1981) FLC 91-092; [1981] FamCA 70
Martell & Martell (2023) 66 Fam LR 650; [2023] FedCFamC1A 71
Noetel and Quealey (2005) FLC 93-230; [2005] FamCA 677
Nominal Defendant v Saleh [2011] NSWCA 16
Ogilvie v Adams (1981) VR 1041
Paric v John Holland Constructions Pty Ltd [1984] 2 NSWLR 505
Pierce v Pierce (1999) FLC 92-844; [1998] FamCA 74
Poricanin v Australian Consolidated Industries Ltd [1979] 2 NSWLR 419
Rosati & Rosati (1998) FLC 92-804; [1998] FamCA 38
Stanford & Stanford (2012) 247 CLR 108; [2012] HCA 52
Vadisanis & Vadisanis and Anor (2014) FLC 93-593; [2014] FamCAFC 97
Young v Queensland Trustees Limited (1956) 99 CLR 560; [1956] HCA 51
Division: Division 1 First Instance Number of paragraphs: 239 Date of hearing: 3-7 March 2025 Place: Sydney Counsel for the Applicant: Mr Williams KC Solicitor for the Applicant: Karras Partners Lawyers Counsel for the Respondent: Mr Cummings SC Solicitor for the Respondent: Barkus Doolan Winning ORDERS
SYC 6123 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS HENSCHEL
Applicant
AND: MR SARTRE
Respondent
ORDER MADE BY:
CAMPTON J
DATE OF ORDER:
31 MARCH 2025
THE COURT ORDERS THAT:
1.The husband and wife in their capacities as directors of B6 Pty Ltd (NSW) ACN … (“B6 Pty Ltd”) as trustee of the Mr Sartre and Ms Henschel Family Trust (“the Family Trust”) shall do all acts and things and sign all documents required:
(a)Within 14 days of the date of these orders to transfer to the wife the plant, equipment, livestock, and silage recorded in the accounts of the Family Trust at 30 June 2024; and
(b)Within three (3) months of the date of these orders to transfer to the wife the title and interest in the property at N Property, Town O being that contained in folio identifier Lot … (“the N Property”) at a value of $8.5 million and the wife shall thereafter indemnify and keep indemnified the husband in relation to all liabilities in respect of the N Property.
2.Pending compliance with Orders 1(a) and 1(b), the wife have exclusive occupancy as against the husband of the N Property and the wife shall be solely entitled to conduct the day-to-day farming activities in the ordinary course of business of the Family Trust, including in respect of the management of livestock at the N Property.
3.Provided compliance has occurred as to Order 1(a), then simultaneously upon the compliance with Order 1(b):
(a)The wife shall sign all documents as prepared by the husband at his expense provided to the wife to:
(i)Relinquish any prior nominations made by the wife in respect of the Family Trust, with the husband to prepare such documents at his own expense and provide to the wife;
(ii)Forgo any right or claim she may have, whether actual, contingent, or otherwise in respect of the Family Trust, including without limitation any right or expectation as a beneficiary, with the husband to prepare such documents at his own expense and provide them to the wife;
(iii)Assign to the husband the whole of the wife’s loan account held to her credit in the accounts of the Family Trust, identified as having a balance of $1,208,266 at 30 June 2024 or unpaid present entitlements owed to her or to any of the wife’s entities by or in respect of the Family Trust, with the husband to prepare such documents at his own expense and provide them to the wife such that the wife and the wife’s entities will have no right, title, or interest in, or be owed money, by B6 Pty Ltd as trustee for the Family Trust and there will be no payment and/or consideration due to the wife in respect of the same save as provided for in these Orders;
(b)The husband shall do all things necessary at his expense in his capacity as the appointer of the Family Trust to cause B6 Pty Ltd to be removed as trustee of the Family Trust and to appoint a new trustee of the Family Trust, being a corporate trustee of which he is the sole director and shareholder.
And as between the parties the husband shall thereafter be solely entitled to interests in relation to the Family Trust and B6 Pty Ltd in its capacity as trustee of the Family Trust (including its shareholding in B2 Pty Ltd (ACN: 115 033 997)).
4.The husband’s superannuation interests with the Superannuation Fund 1 (“the Superannuation Fund 1”) shall be split to create a superannuation interest for the wife as follows:
(a)Pursuant to s 90XT(2) of the Family Law Act 1975 (Cth) and reg 27 of the Family Law (Superannuation) Regulations 2001 (Cth) the Court determines the amount in relation to the husband’s superannuation in the Superannuation Fund 1 is $2,090,282.
(b)Pursuant to s 90XT(4) of the Family Law Act 1975 (Cth) the Court allocates a base amount to the wife in respect of the husband’s superannuation interests in the Superannuation Fund 1 of $817,887.
(c)Pursuant to s 90XT(1)(a) of the Family Law Act 1975 (Cth) whenever a splittable payment becomes payable in respect of the husband’s superannuation in the Superannuation Fund 1 the wife is entitled to be paid an amount calculated in accordance with the Family Law (Superannuation) Regulations 2001 (Cth) where the base amount is $817,887 and there is a corresponding reduction in the entitlement of the husband at the time of the splittable payment.
(d)The operative time for the payment under this order is 10 business days after service of this order on the trustee of the Superannuation Fund 1.
(e)The trustee of the Superannuation Fund 1 shall do all such acts and things and sign all documents as may be necessary, in accordance with the obligations set out under the Family Law Act1975 (Cth) and the Family Law (Superannuation) Regulations 2001 (Cth) to calculate the entitlement to make payment to the wife in accordance with these orders.
5.Having been accorded procedural fairness in relation to the making of these orders, these orders bind the trustee of the Superannuation Fund 1.
6.Within 21 days from the date of these orders the parties, both in their capacities as officeholders of B6 Pty Ltd and in their personal capacities, shall do all such things as are necessary to instruct the accountant of the Superannuation Fund 1 to prepare, at the cost of the SMSF, special purpose accounts of the Superannuation Fund 1 to record the implementation of the superannuation splitting orders, including providing the accountant with a sealed copy of these orders, and if requested by the accountant, a copy of the reasons for judgment, and to do all things and provide all documents as requested by the accountant to implement the superannuation split pursuant to Order 5.
7.The parties forthwith do all acts and things and sign all documents necessary, including in their capacity as the directors of B6 Pty Ltd, to cause B6 Pty Ltd in its capacity as trustee of the Superannuation Fund 1 to sell the property at Lots 1 & 2 AL Street, Town O (“the AA Property”) being the whole of the land contained in folio identifier Lot … and Lot …:
(a)With a real estate agent as agreed upon by the husband and wife in writing within 21 days of the date of these orders to conduct the sale, and in the event of a failure to so agree in writing, they shall within a further seven (7) days write a joint letter to the President of the Real Estate Institute of NSW requesting the President nominate an agent to act on the sale and shall forthwith act on that nomination;
(b)With a solicitor as agreed upon in writing within 21 days of the date of these orders, but failing agreement, shall within a further seven (7) days write a joint letter to the President of the Law Society of NSW requesting the President nominate a solicitor to conduct the sale and shall forthwith act on that nomination;
(c)By either expressions of interest or private treaty sale, and in the event of dispute as to either method of sale, as recommended in the writing by the agreed or appointed real estate agent, at an asking price of as agreed in writing between the parties but failing agreement for more than seven (7) days at $2.525 million;
(d)In the event that the AA Property is not sold by expressions of interest or private treaty sale within six (6) weeks the parties shall take all steps to sell the property by public auction;
(e)The first auction shall take place within two (2) months thereafter at a reserve price of $2.25 million;
(f)The second auction shall be at a reserve price of $2 million and shall take place within a further two (2) months; and
(g)The third auction shall be at a reserve price of $1.9 million and shall take place within a further two (2) months.
8.On settlement of the sale of the AA Property the parties shall take all steps to cause B6 Pty Ltd to distribute the proceeds of sale in the following manner and priority:
(a)In payment of any outstanding costs and expenses of the sale, including legal costs and disbursements, agents commission, advertising expenses, auction expenses and any adjustments due to the purchaser;
(b)In payment of any fees for the nomination of the real estate agent or solicitor;
(c)In payment of any CGT or taxation impost incurred by the Superannuation Fund 1 on the sale; and
(d)To pay the balance remaining into the bank account of the Superannuation Fund 1.
9.Within three (3) months of the date of these orders, or within 28 days after the settlement of the sale of the AA Property pursuant to these orders, whichever shall last occur:
(a)Each of the husband and the wife shall nominate to B6 Pty Ltd a complying superannuation fund into which their respective member interests can be rolled and shall within seven (7) days thereafter do all things necessary to pay into such complying superannuation fund their respective member balances in the Superannuation Fund 1 and shall thereupon do all things necessary to resign as members of the Superannuation Fund 1; and shall then
(b)Forthwith do all acts and things and sign all documents necessary to cause the husband to resign as director of B6 Pty Ltd, for the husband to transfer to the wife his one ORD class share in B6 Pty Ltd and assign to the wife or as she may direct all interest and entitlement as the husband has or may have in relation to B6 Pty Ltd; and
(c)Upon completion of that process, do all such things as are necessary to cause the Superannuation Fund 1 to vest and to deregister the Superannuation Fund 1.
10.Within three months of the date of these orders the husband shall:
(a)Pay to the wife by way of cleared electronic funds transfer into the trust account of Karras Partners Lawyers $3,725,099 (“the cash adjusting sum”);
(b)Pay all monies and otherwise do all acts and things necessary and sign all documents required to discharge mortgage dealing number … in favour of ANZ Bank secured on the Suburb W property being the whole of the land contained in folio identifier …, and otherwise indemnify and save harmless the wife in relation to all monies outstanding pursuant thereto; and
(c)Indemnify and save harmless the wife in relation to all outgoings payable in respect of the Suburb W property.
11.Contemporaneously with the husband’s compliance with Order 10, the wife shall do all acts and things necessary to:
(a)Transfer to the husband at his expense the whole of her right, title, and interest in the Suburb W property;
(b)At her expense cause to be removed from the title of the Suburb W property:
(i)The Caveat in favour of WW Lawyers, being registered as dealing number …;
(ii)The Caveat in favour of XX Pty Ltd, being registered as dealing number …;
(iii)The Caveat in favour of Ms YY, being registered as dealing number …; and
(c)Sign such Discharge Authority as may be required by ANZ Bank as mortgagee to discharge mortgage dealing number ....
12.In the event the husband fails or neglects to comply with Order 10 then forthwith upon such failure or neglect the husband and the wife shall do all acts and things and execute all documents necessary to list the Suburb W property for sale by auction as follows:
(a)With a real estate agent as agreed upon by the husband and wife in writing within 21 days of the date of default to conduct the sale, and in the event of a failure to so agree in writing, they shall within a further seven (7) days write a joint letter to the President of the Real Estate Institute of NSW requesting the President nominate an agent to act on the sale and shall forthwith act on that nomination;
(b)With a solicitor as agreed upon in writing within 21 days of the date of default, but failing agreement, shall within a further seven (7) days write a joint letter to the President of the Law Society of NSW requesting the President nominate a solicitor to conduct the sale and shall forthwith act on that nomination;
(c)Such auction to occur within six (6) weeks of the property being listed for sale by the agent, with the reserve price to be as agreed in writing between the parties, and failing agreement at least seven (7) days prior to the auction, at the sum of $14,500,000;
(d)If the Suburb W property remains unsold for a period of one (1) week following the auction, the parties shall do all acts and things and sign all documents necessary to list the property for sale by private treaty for a four (4) week period thereafter unless otherwise agreed in writing to re-list the property for auction;
(e)If the Suburb W property remains unsold after the foregoing private treaty period, it shall be listed for sale via public auction again, with such auction to occur within a further four (4) week period, with the reserve price to be as agreed between the parties, and failing agreement $13,775,000;
(f)The husband and the wife shall cooperate in every way with the agent and solicitor, including, without limiting the generality of the foregoing:
(i)Making the key and alarm codes (if any) available to the agent;
(ii)Signing all documents requested by the agent to sell the Suburb W property;
(iii)Executing a contract for sale in the form prepared by the solicitors having the contract of sale at the sale price;
(iv)Allowing inspection of the Suburb W property at all times as requested by the agent;
(v)Ensuring the Suburb W property presents in a neat and clean condition at the time of inspection by the agent and any prospective purchaser, with the costs of same to be met by the husband; and
(vi)Not doing or saying anything to hinder or prevent a sale being effected.
13.On settlement of the sale of the Suburb W property the parties shall take all steps to distribute the proceeds of sale in the following manner and priority:
(a)Any outstanding costs and agreed expenses of the sale including legal costs and disbursements, agents commission, advertising expenses, auction expenses and any adjustments due to the purchaser, and in reimbursement to the husband of such agreed costs of sale as have been paid by him;
(b)Payment of any and all monies due and owing to the mortgagee, ANZ Bank in respect of the mortgage secured over the Suburb W property being referable only to loan account number ...32;
(c)In payment of 32.2 per cent of the balance then remaining to the wife;
(d)In payment to the ANZ Bank of such amount outstanding pursuant to loan account number …56; and
(e)In payment of the balance to the husband.
14.Pending compliance with Order 10 or completion of the sale of the Suburb W property, the husband shall meet as and when the same fall due, all costs and expenses relating to the Suburb W property, including but not limited to all mortgage repayments, statutory charges, rates, and outgoings and shall indemnify the wife in relation to same.
15.The wife shall grant access to the husband to remove all items located at the N Property which belong to B Pty Ltd, B2 Pty Ltd, B3 Pty Ltd, B4 Pty Ltd, B5 Pty Ltd and B7 Pty Ltd, such access to be on the following terms:
(a)The removal of items shall be undertaken in the period commencing 14 days after these orders and ending 56 days after these orders;
(b)The husband shall at no time enter or attempt to enter the N Property and he is restrained accordingly;
(c)The husband shall provide the wife with no less than 48 hours’ notice of his intention to attend the N Property on each occasion;
(d)The husband shall undertake the removal of the items in a workman-like manner and shall not damage the property and improvements located upon the N Property; and
(e)The husband shall be at liberty to appoint delegates, contractors and agents to attend the N Property on this behalf within the terms of this order.
16.Each of the husband and the wife be equally responsible for, so as to pay 50 per cent of, any taxation liability or obligation, including any penalties or interest accruing thereon, arising from the operations of, or the revenue reporting failures or omissions of, the Family Trust or B6 Pty Ltd from 30 June 2005 up until the date of these orders.
17.The parties shall within 14 days do all acts and things and sign all documents necessary to close ANZ Bank joint bank account number …73 and distribute the balance equally between them.
18.In the event either party fails or neglects to execute any document pursuant to these orders, then within seven (7) days of such failure or neglect, the Registrar of the Federal Circuit and Family Court of Australia (Division 1), Sydney Registry be appointed pursuant to s 106A of the Family Law Act 1975 (Cth), to execute such document on the part of the defaulting a party, upon the satisfaction of such failure or neglect by way of affidavit evidence.
19.Except as provided for by these orders, save as to costs, including orders as to contribution to the costs of ch 7 single expert evidence, all outstanding Applications and Responses thereto are dismissed.
20.Should a party make an application for costs of or incidental to these proceedings, they are to file and serve within 28 days of the date of these orders an Application in a Proceeding specifying the orders sought as to costs and any affidavit in support thereof. In that event, orders will be made in chambers as to the filing of any Response to the Application in a Proceeding for costs and affidavit in support thereof, together with outlines and written submissions, with the costs application to be listed on a date to be fixed.
21.In the event that neither party files an Application in a Proceeding pursuant to Order 20, any outstanding application for costs is dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Henschel & Sartre has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CAMPTON J:
INTRODUCTION
By way of an Initiating Application filed on 2 September 2020, Ms Henschel (“the wife”) commenced proceedings in what was then the Family Court of Australia seeking orders as to the adjustment of property between she and Mr Sartre (“the husband”) pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”). By way of a Response to an Initiating Application filed on 29 October 2020, the husband sought different orders as to the adjustment of property.
The wife was born in 1972 and is currently 52 years old. The husband was born in 1964 and is currently 60 years old. They married in 2003 and separated on 20 April 2020. An order for divorce was made in early 2023.
There is one child of the marriage, X, who was born in 2009 and is currently 16 years old. On 23 May 2024, after a seven day trial, judgment was delivered and orders were made regulating his parenting and providing for the parties to have equal shared parental responsibility, for X to live with the mother and to spend time with the father on each alternate Tuesday night and alternate weekend during the school term and for half of the school holidays until 30 June 2025, after which date X shall live and spend time with each of the parties in accordance with his wishes. Child Support departure orders were made for the husband to pay to the wife $218 each week until 30 June 2025, and for the husband to pay X’s private school fees of RR School. X is in year 10. He will complete school in 2027.
The extreme conflict and unrelenting hostility between the parties over close to five years of litigation permeated many aspects of the property adjustment proceedings. It has compounded the complex interrelationship of items comprising their property interests. Those property interests span across a discretionary family trust that owns a large rural property, conducted agricultural enterprises, and which holds a majority shareholding in a corporation that owns a not insignificant recently reconstructed industrial property. A substantive trading enterprise, known as the B Group, of which the husband broadly holds a two thirds interest, operates from the industrial property.
Notwithstanding this longstanding and unabating dynamic between the parties and the shifting issues and disputes throughout the five-day trial, on the final day of the trial the legal representatives for each party achieved, on behalf of their respective clients, a commercial compromise to most of the disputed balance sheet items and agreement as to the specie of property to be retained by each. Dispute remained as to other integers of the adjustment of that property, including as to:
(a)Whether a contended loan agreement made between the husband and his parents 18 months prior to the marriage in 2001 whereby he acquired his parent’s beneficial half share in what was later the home of the parties at ZZ Street, Suburb W (“the ZZ Street property”) is a liability in the balance sheet identifying the property of the parties;
(b)Whether contended loan funds advanced from an entity controlled by the husband’s parents to the husband over the period from August 2015 to April 2020 is a liability in the balance sheet; and
(c)Whether the self-managed superannuation fund (“SMSF”) interest of the husband ought to be split 100 per cent to the wife, or whether the interest of each party in their SMSF ought to be split to equalize their member entitlements. They agreed that the primary asset of their SMSF, another rural property, will be sold.
If the 2001 and 2015 to 2020 advances are not determined to be liabilities in the balance sheet, and are weighed as contributions made by or on behalf of the husband, the wife sought a contribution finding of 47.5 per cent in her favour and 52.5 per cent in favour of the husband, with a 2.5 per cent adjustment thereto in her favour pursuant to s 75(2) of the Act, such that the determined property of the parties would be adjusted equally. If the advances were not determined to be liabilities in the balance sheet, the husband sought a contribution finding of 60 per cent in his favour and 40 per cent in favour of the wife, with no adjustment pursuant to s 75(2).
In the alternative, if the 2001 and 2015 to 2020 advances were to be determined as liabilities in the balance sheet, the wife sought a contribution finding of equality, with a 2.5 per cent adjustment thereto pursuant to s 75(2) of the Act in her favour, such that she would receive 52.5 per cent of the property of the parties and the husband would receive 47.5 per cent. In that alternative circumstance, the husband sought a contribution finding of 59 per cent in his favour and 41 per cent in favour of the wife, with no adjustment pursuant to s 75(2).
For the reasons that follow the property of the parties is adjusted 54.5 per cent to the husband and 45.5 per cent to the wife. The specie of items of property are adjusted broadly in terms as sought by each party, except that their entitlements in their SMSF fund will be equalised. Differing orders are made from those sought by each party regulating the chronology and mechanics implementing the processes of the adjustment of their property.
THE CORPORATE AND FINANCIAL WEB OF THE PARTIES
In the 1960s BB Pty Ltd (“BB Pty Ltd”) was incorporated. It is an entity controlled by the husband’s parents. The husband and his siblings, Ms AB and Mr AC, each hold one of three ‘A’ class shares in the corporation. The husband is one of five directors, the others being his two siblings and his parents. The husband said that BB Pty Ltd has historically managed the wealth of his parents.
The husband’s mother, the husband’s father, and the husband’s brother are the directors of CC Pty Ltd (“CC Pty Ltd”). It is the trustee of the Superannuation Fund 3, of which the husband was a member, described as his parents’ superannuation fund. CC Pty Ltd also holds other assets in its own right. Of the 12,195 issued shares of the trustee, the husband holds one ordinary share, the husband’s sister holds one Class B ordinary share, and the husband’s mother holds 12,193 ordinary shares.
The husband said that he is the managing director of “his own business”, known as B Pty Ltd, which is part of the B Group. The B Group currently comprises a series of corporations, being:
(a)B Pty Ltd;
(b)B3 Pty Ltd (“B3 Pty Ltd”);
(c)B2 Pty Ltd (“B2 Pty Ltd”);
(d)B7 Pty Ltd (“B7 Pty Ltd”);
(e)B4 Pty Ltd (“B4 Pty Ltd”); and
(f)B5 Pty Ltd (“B5 Pty Ltd”).
In or around 1987 to 1988 the husband acquired B7 Pty Ltd. He commenced his own construction business. In 1989 the husband met who he describes as his “business partner”, Mr AD (“Mr AD”). In 1993 the husband or B7 Pty Ltd purchased an enterprise trading as AE Company. The husband and his mother each hold one ordinary share in B7 Pty Ltd, his mother holding her share beneficially for the husband. Mr AD holds one redeemable preference share. The directors of B7 Pty Ltd are Mr AD and the husband. At the time of the marriage B7 Pty Ltd conducted an enterprise trading as “B4 Pty Ltd”.
In mid-2003, shortly after the marriage, the husband incorporated B Pty Ltd. He holds two of the three issued shares in the corporation. The other shareholder is Mr AD. The directors are the husband and Mr AD. B Pty Ltd manufactures, sells, delivers, and installs products as well as importing products.
In mid-2003 the husband incorporated B4 Pty Ltd. He holds two of the three issued shares in the corporation. The other shareholder is Mr AD. The directors are the husband and Mr AD. B4 Pty Ltd is a service entity that employs management and showroom staff for the B Group.
In mid-2005 the husband established the Mr Sartre Family Trust by way of deed. A deed of variation was made in early 2014, renaming it as the Mr Sartre & Ms Henschel Family Trust (“the Family Trust”). The husband holds the power to appoint and remove the trustee at his absolute discretion. The corporate trustee is B6 Pty Ltd(“B6 Pty Ltd”). The husband was the sole director of the trustee until early 2014 when the wife was also appointed as a director. Both the husband and the wife are now directors and equal shareholders in the trustee. The trustee has an unfettered discretion to distribute the income and property of the Family Trust. The parties agree that the Family Trust is their property amenable to adjustment pursuant to s 79 of the Act.
In mid-2005 the husband incorporated B2 Pty Ltd. The husband and Mr AD are its directors. The Family Trust holds 200 issued ordinary shares in B2 Pty Ltd by way of its trustee, B6 Pty Ltd. Mr AD holds 100 ordinary shares by way of a trustee corporation he controls, AH Pty Ltd (“AH Pty Ltd”).
In early 2015 B2 Pty Ltd purchased a real property at H Street, Suburb J (“the Suburb J property”) for $2.88 million funded by way of loans from the ANZ of $1.8 million, $400,000 from BB Pty Ltd pursuant to a secured loan agreement in writing entered on 15 January 2015, $400,000 from the husband, and $200,000 from Mr AD. Between 2016 and 2022 the factory premises at Suburb J were purpose reconstructed for the B Group’s trading. The single real property expert, Mr LL, opined, and I find, that although some works are required to complete the reconstruction, the site is currently occupied and functioning, conducting the B Group’s trading activities. I find that the outstanding works identified in the single quantity surveying expert’s opinion pursuant to ch 7 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) (Exhibit 32) will need to be finished for the building to be “fully complete and compliant”. It was valued by Mr LL at $16.55 million (Exhibit 31).
B3 Pty Ltd was incorporated in mid-2020. It has 200 issued ordinary shares, with 102 shares held by AF Pty Ltd as trustee for the AF Family Trust, 49 shares held by AH Pty Ltd as trustee for AH Family Trust, an entity associated with Mr AD, and 49 shares held by the Sartre Family Trust, an entity of the husband. B3 Pty Ltd provides commercial projects of scale.
Relevantly to the rural interests of the Family Trust, in 2005 the parties acquired a farming property at 2 AG Street, Town AK (“the Town AK property”) for $589,500. The Family Trust then acquired a property in Town O (“AA Property”) for $770,000. In early 2011 Superannuation Fund 1 (“ Superannuation Fund 1”) acquired the AA Property from the Family Trust. The husband and the wife are the only members of Superannuation Fund 1. B6 Pty Ltd is the trustee of Superannuation Fund 1. The Family Trust then acquired a property at N Property, Town O (“N Property”) for $3 million. The AA Property is vacant, being rented by the Family Trust from Superannuation Fund 1 for grazing. The balance of the agricultural activities of the Family Trust are conducted from the N Property.
BACKGROUND
The wife was born in 1972 and is currently 52 years old. The husband was born in 1964 and is currently 60 years old.
In mid-1993 the husband and his parents purchased a property at ZZ Street, Suburb W (“the ZZ Street property”), for $765,000 plus stamp duty. The husband was the sole registered proprietor. His parents contributed $400,000 to the acquisition. The husband funded his “share” of the acquisition by way of bridging finance loan from the ANZ bank of $400,000 secured on a property he owned at AM Street, Suburb W. The bridging finance facility was discharged when the AM Street property was sold in late1993.
The husband and his parents proposed to redevelop a duplex residence upon the ZZ Street property. Local council regulations presented challenges presented to that objective. In 2001 the property was listed for sale. Soft market conditions led to discussions for the husband to acquire his parent’s beneficial interest in the ZZ Street property. Issue exists as to the terms and characterisation of the facility made available by the husband’s parents to the husband in 2001 acquiring their beneficial interest in the ZZ Street property, as determined later in these reasons.
Prior to 2001 the wife graduated. She was engaged as a consultant for AN Pty Ltd. In 2002 she commenced employment with the predecessor of B Pty Ltd as a consultant and was paid a yearly salary of $120,000. In or around 2003 or 2004 the wife obtained a degree.
In early 2002, in the year prior to the marriage, the wife purchased a property at Q Street, Suburb R (“the Suburb R property”) for $500,000 funded by way a mortgage from AJ Bank in sum of $450,000.
Upon marriage the wife moved into the ZZ Street property. The parties resided there until 2018. The wife tenanted the Suburb R property.
Some months after the marriage in 2003, the husband entered a joint venture to purchase the AO Venue at AP Street, Sydney. To facilitate the purchase, he said borrowed $300,000 from the ANZ. The wife said the husband borrowed $350,000. I am unable to make a finding as to the sum borrowed. In late 2005 AO Venue entered administration. In his affidavit the husband said:
63. …I did not receive any return from my interest in [AO Venue].
That evidence was incorrect. In cross-examination the husband conceded that $50,000 was recovered from the investment. The husband incurred $499,114 in legal fees in Federal Court proceedings claiming the balance of the invested funds. He was successful in that litigation. The losing party declared bankruptcy. No funds were recovered by way of the judgment.
At the commencement of the trial the wife asserted that the husband’s conduct in the AO Venue venture, and specifically his pursuit of litigation to recover the investment, occasioned a waste in the sense identified in Kowaliw and Kowaliw (1981) FLC 91-092. In her affidavit she said the husband asked her to review the proposed acquisition and that she undertook a due diligence analysis of the “financial affairs of the [business]”. She said to the husband that she did not think the business was “a good investment”, and that she did not trust one of the other partners in the venture. She also said the husband refused to compromise the litigation when the other party made an offer to settle at mediation of $300,000 and that he imprudently rejected to offer, contrary to legal advice he received at the time. She contended that the lawyer acting for the husband advised him to accept the offer, and that if he did not, he “could easily” end up with nothing. She said the husband was “highly focused” and instructed the lawyer that he “wanted to make a point”. The parties subsequently litigated with the ATO as to the deductibility of the legal fees incurred. The wife was cross-examined on the transcript of her evidence in the Federal Court proceedings (Exhibits 37 and 38). Her oral evidence in the Federal Court proceedings was inconsistent with that contained in her trial affidavit in these proceedings. Her affidavit evidence when cast against Exhibits 37 and 38 was opportunistic. Her contentions of waste were abandoned by the conclusion of the trial.
In late 2003 the wife incorporated S Pty Ltd. The wife used the corporation as a vehicle to receive her personal exertion income by way of her consulting services.
In 2005 the Town AK property was purchased for $589,500. The wife was the sole registered proprietor. The purchase was funded by a loan secured by way of mortgage over the ZZ Street property of $450,000. The husband paid the deposit and an additional $80,550 upon purchase. The wife paid the stamp duty of $22,000.
In 2006 B Pty Ltd undertook renovations to the Suburb R property, including a variety of works. B Pty Ltd did not issue any invoice for the works.
In October 2008 the husband paid $400,000 to reduce the mortgage of the Town AK property secured upon the ZZ Street property sourced from a $466,666 dividend he received from B Pty Ltd.
The wife ceased working shortly prior to the birth of X in 2009 and recommenced work in 2009.
In early 2009 the parties, by way of the Family Trust, purchased a second rural property west of the Town AK property, at 1 AG Street, Region AR (“the 1 AG Street property”) for $220,000, funded by way of $200,000 from the ANZ Bank secured by way of mortgage over the property.
In November 2009 CC Pty Ltd advanced $100,000 by way of loan to B7 Pty Ltd. The loan was recorded by way of an Unsecured Loan Agreement dated November 2009 executed by the husband’s mother and father on behalf of CC Pty Ltd and the husband on behalf of B7 Pty Ltd. It was subsequently repaid in full. In October 2010 CC Pty Ltd advanced by way of loan to B6 Pty Ltd $180,000. This loan was also recorded by way of a Secured Loan Agreement. The loan was subsequently repaid in full.
In late 2010 the parties, by way of the Family Trust, purchased the AA Property for $770,000, sourced by way of borrowings from the ANZ Bank and from funds from CC Pty Ltd. The husband and the wife agree that there is no loan document recording the borrowing from CC Pty Ltd. The AA Property is more than 50 hectares.
In May 2011 the husband ceased to be a member of Superannuation Fund 4, rolling his superannuation interest of $462,000 into Superannuation Fund 1. The wife rolled her superannuation interest of $60,000 into Superannuation Fund 1.
In early 2011 the Suburb R property was sold for $850,000. After payment of the mortgage and selling costs, $467,892 from the net proceeds of sale were applied to the purchase of the N Property. Sometime in 2011 the Town AK property was sold for $705,000.
In mid-2011 the purchase of N Property for $3 million was sourced from:
(a)The sale proceeds of the Suburb R property;
(b)The sale proceeds of the Town AK property;
(c)The funds produced from the transfer of the AA Property by the Family Trust to Superannuation Fund 1 for the sum of $650,000. The sale proceeds of the AA Property of $295,573 were applied to discharge the ANZ AA Property mortgage and the balance applied to the purchase of the N Property;
(d)Savings of the husband; and
(e)Two loans secured by way of mortgage over the ZZ Street property in favour of the ANZ Bank, the first being account …96 for $260,000, and the second being account …56 for $952,000.
The N Property currently is more than 250 hectares. It has a substantial split level architecturally designed residence. The wife currently resides in the N Property.
In late 2013 the parties sold the 1 AG Street Property for $380,000 and applied the proceeds of sale to reduce the ANZ Bank loans secured by way of mortgage on the ZZ Street property.
From August 2015 to April 2020 the husband commenced to receive advances from BB Pty Ltd. In his affidavit the husband said that he commenced to receive advances from BB Pty Ltd from August 2015 to October 2020. That was incorrect. The advances were from August 2015 to April 2020, the last advance being shortly prior to the separation of the parties on 20 April 2020. It is uncontroversial that the total sum received over this period was $575,000. The issue as to whether these advances are a liability in the balance sheet is determined later in these reasons.
In January 2015 BB Pty Ltd and B2 Pty Ltd entered an executed Secured Loan Agreement for a facility of $400,000. In April 2018 BB Pty Ltd advanced a further $400,000 by way of loan to B2 Pty Ltd, recorded in an executed Heads of Agreement dated that day. The loan was repaid.
In mid-2018 B2 Pty Ltd purchased the ZZ Street property from the husband for $5 million. The wife contends that she was not informed of the details of the sale. The acquisition by B2 Pty Ltd was funded in part by way of a $400,000 loan advance from BB Pty Ltd recorded in an executed Heads of Agreement document dated April 2018.
In mid-2018 the parties jointly purchased a property at V Street, Suburb W (“the Suburb W property”) for $9 million, sourced by way of $5 million from the sale of the ZZ Street property, a $3 million loan secured by way of mortgage over the property from the ANZ Bank, and the balance from savings. The property currently is subject to two loans secured by way of mortgage. One is the ANZ Bank Home Loan account …932 in the joint names of the parties used to fund the acquisition of the N Property. The other is described by the wife as the ANZ Bank farm loan account …56 in the husband’s sole name.
The ANZ Bank …56 loan as at 30 June 2024 was $579,239 (Expert Report of Ms T 6 March 2025, Appendix 12.2). It is a personal liability of the husband secured on the title of the Suburb W property. The value of that liability forms part of the valuation of the Family Trust. The husband’s personal liability by way of the loan has been “booked” (that is, included) in the value of the husband’s credit loan account with the Family Trust.
In September 2018 BB Pty Ltd advanced $250,000 by way of loan to B Pty Ltd, as recorded in an executed Heads of Agreement dated that day. Those funds were repaid in full upon the sale of the ZZ Street by B2 Pty Ltd in mid-2020 for $5.75 million. The disposal occurred after the separation of the parties. The wife contends that she was not informed about this sale by B2 Pty Ltd, and the husband did not seek her consent for it.
In 2019 the wife was appointed as a board member of P Company.
In early 2020 the husband incorporated B5 Pty Ltd. The husband holds two thirds of the issued shares and AH Pty Ltd holds the other third as trustee for AH Family Trust. The husband and Mr AD are the directors of the company. B5 Pty Ltd is a special purpose vehicle that was established to manage a construction at the Suburb J property. It employs the staff and contractors necessary for the completion of the project.
On 20 April 2020 the parties separated. The husband remained residing in the Suburb W property up until trial. The wife and the X obtained rental accommodation in Sydney so that X could attend school.
In mid-2020 the husband established Superannuation Fund 2 (“Superannuation Fund 2”). In mid-2020 the husband registered F Pty Ltd as the trustee of the Sartre Family Trust. The husband and his accountant are the directors of the corporate trustee and each hold one of two ordinary shares.
On 29 June 2020 the wife withdrew and retained $500,000 from a joint ANZ account …73.
On 2 September 2020 the wife commenced these proceedings.
In or around late 2021 the husband was charged with malicious damage at the N Property and a provisional Apprehended Violence Order (“AVO”) was issued against the husband listing the wife as the protected person. That charge was listed for a final hearing in late 2022.
From mid-2020 to 2022 reconstruction to the Suburb J property continued. BB Pty Ltd provided loans to B2 Pty Ltd in April 2020 of $200,000, in April 2020 of $1.3 million, in October 2021 of $2 million, and in December of $150,000. In December 2021 $2.6 million was borrowed from the ANZ Bank to apply to the construction at the Suburb J property.
In or around 2022 the husband, by way of B2 Pty Ltd, suspended the construction at the Suburb J property. In July 2022 the B Group recommenced operations from the Suburb J property.
Between April 2022 to December 2024 the husband received $1,287,400 from his mother, his parents or his parents’ corporate interests, being:
(a)In July 2022 $50,000 from BB Pty Ltd;
(b)In October 2022 $25,000 from the husband’s parents;
(c)In January 2023 $25,000 from BB Pty Ltd;
(d)In April 2023 $25,000 from BB Pty Ltd;
(e)In May 2023 $30,000 from the husband’s parents;
(f)In July 2023 $25,000 from BB Pty Ltd;
(g)In August 2023 $100,000 from the husband’s parents;
(h)In September 2023 $350,000 from BB Pty Ltd;
(i)In October 2023 $25,000 from BB Pty Ltd;
(j)In December 2023 $25,000 from the husband’s parents;
(k)In January 2024 $25,000 from BB Pty Ltd;
(l)In February 2024 $220,000 from BB Pty Ltd;
(m)In April 2024 $25,000 from BB Pty Ltd;
(n)In Aril 2024 $20,000 from BB Pty Ltd;
(o)In June 2024 $50,000 from the husband’s parents; and
(p)In August 2024 $25,000 from the husband’s parents.
The husband’s evidence was that $1,104,642 of these funds were applied to his legal costs, and the balance were applied to day to day living expenses.
In mid-2022 the wife attended upon the police as to historical sexual violence allegations she alleged were perpetrated against her by the husband. In late 2024 the police requested an interview with the husband as to these allegations. They were not pressed as part of the wife’s contribution case in so far as it was anchored in the principles identified in Kennon v Kennon (1997) FLC 92-757 (“Kennon”).
On 20 September 2022 orders were made by consent providing for the husband and the wife to each sell specified shareholdings, and:
5.That within 14 days of the sale of the Husband’s Shares in accordance with Order 1 of these Orders or provision by the Wife of the documents referred to in Order 4 of these Orders, whichever is the later to occur, the Husband pay to the Wife, by way of partial property settlement, the sum of $X calculated in accordance with the following formula:
X = (A + B)/2 – B
Where:
A is the proceeds of sale of the Husband’s shares B is the proceeds of sale of the Wife’s shares
On 26 October 2022 the wife filed an enforcement application to enforce the orders made on 20 September 2022. Such application was dismissed on 8 November 2022. A further interim hearing was allocated for 8 December 2022. Judgment was delivered on 23 February 2023 and the husband was ordered to pay the wife a partial property settlement in the sum of $250,000.
In late 2022 the interim AVO and malicious damage charge against the husband was dismissed in the Local Court.
On 21 March 2023 the proceedings were listed for hearing before Justice Berman as to both parenting and property over eight to 10 days commencing on 4 December 2023.
In April 2023 BB Pty Ltd advanced $400,000 to B2 Pty Ltd.
In mid-2023 the wife registered Superannuation Fund 1 as an SMSF.
In mid-2023 an order for divorce was made.
On 5 July 2023 orders were made for the sale of livestock, agricultural product and equipment to facilitate the payment to the wife of the partial property settlement order made on 23 February 2023.
Between July and December 2023 issues arose between parties as to the husband’s access to the N Property. Spotfire disputes again arose between the parties as to the husband’s access to the N Property between July and December 2023. On 6 December 2023 orders were made regulating the husband’s access to the property.
Between October 2023 to August 2024 the husband ceased receiving a salary from B Pty Ltd. His salary recommenced in late 2024.
On 4 December 2023 the final trial as to both property and parenting commenced before Justice Berman. After two days it was adjourned to 26 February 2024 on joint application as further valuation evidence needed to be obtained and other valuation evidence required updating.
In late 2023 the wife was appointed as Chair of P Company.
Between January 2024 and November 2024 multiple disputes again arose between the parties as to the husband’s access to the N Property.
On 26 February 2024 the dispute as to the parenting of X, who was 15 years old at that time, and child support, was heard by Justice Berman over a further four days. The primary judge determined that the trial of the property adjustment could not proceed without risk of the proceedings being again adjourned. On 23 May 2024 judgment was delivered and orders made as to parenting and child support departure.
On 7 February 2025 the parties participated in an unsuccessful mediation with Mr AT.
THE RELIEF SOUGHT BY EACH PARTY
On the last day of the trial the wife amended her final relief sought by way of a minute of order containing (Exhibit 43). She seeks:
An Order altering the property interests of the parties in the following terms:-
1. That in respect of the Family Trust:-
1.1the Husband and Wife as Directors of [B6 Pty Ltd] shall do all acts and things and sign all documents required within 14 days to transfer to the Wife the plant, equipment, livestock and [product] recording in the accounts of the Family Trust;
1.2the Husband and Wife as Directors of [B6 Pty Ltd] shall do all acts and things and sign all documents required within three months to transfer the title and interest in [N Property] to the Wife at a value of $8.5 million;
1.3the Wife shall thereafter indemnify and keep indemnified the Husband in relation to all liabilities in respect of [N Property];
1.4the Husband shall within three months appoint a new trustee of the Family Trust, being a corporate trustee of which he is the sole director and shareholder;
1.5the Wife shall assign to the Husband the whole of her loan account held to her credit in the accounts of the Family Trust, identified as having a balance of $1,208,266.00 as at 30 June 2024;
1.6the Husband shall within three months or upon the settlement of the sale of [AA Property] (whichever shall last occur), do all acts and things and sign all documents necessary to:-
1.6.1resign as Director of [B6 Pty Ltd];
1.6.2transfer his one ORD class share in [B6 Pty Ltd] to the Wife;
1.6.3assign to the Wife or as she may direct all interest and entitlement as the Husband has or may have in relation to [B6 Pty Ltd];
1.7subject to Order 15 and upon the husband’s compliance with Order 1.6 hereof, the Wife shall indemnify the Husband in respect of any and all liability arising in respect of [B6 Pty Ltd];
2.That within three months the Husband shall pay to the Wife by way of cleared electronic funds transfer into the trust account of Karras Partners Lawyers the sum of $5,039,221.00 (“the capital sum”).
3.The Husband and the Wife shall within three months and contemporaneously with the Husband’s compliance with Order 2 hereof, do all acts and things necessary:-
3.1In the case of the Wife, to transfer to the husband the whole of her right, title and interest in [Suburb W].
3.2In the case of the Wife, to remove from the title of [Suburb W]:-
3.2.1the Caveat in favour of [WW Lawyers], being registered as dealing number […].
3.2.2the Caveat in favour of [XX Pty Ltd], being registered as dealing number […].
3.2.3the Caveat in favour of [Ms YY], being registered as dealing number […].
3.3In the case of the Wife, to sign such Discharge Authority as may be required by ANZ Bank as mortgagee to discharge mortgage dealing number […].
3.4In the case of the Husband, to pay all monies and otherwise do all acts and things necessary and sign all documents required to discharge mortgage dealing number […] in favour of ANZ Bank, and otherwise indemnify and save harmless the Wife in relation to all monies outstanding pursuant thereto.
3.5In the case of the Husband, to indemnify and save harmless the Wife in relation to all outgoings payable in respect of [Suburb W].
4.In the event that the Husband should default in complying with his obligations pursuant to Orders 1, 2 and 3 hereof (or any part of them), and such default is not remedied by him within seven days of the due date, then the Husband and Wife shall do all acts and things and execute all documents necessary to list [Suburb W] for sale by auction as follows:
4.1the parties shall within 10 days appoint a real estate agent as agreed between them ("the agent'), or failing agreement, [AU Real Estate, Suburb W];
4.2the parties shall within 10 days appoint a solicitor as agreed between them ("the solicitor'), or failing agreement, [AV Lawyers, Suburb AW];
4.3[Suburb W] shall be initially sold via public auction, with such auction to occur within six (6) weeks of the property being listed for sale by the agent, with the reserve price to be as agreed between the parties, and failing agreement at the sum of $14,500,000;
4.4if [Suburb W] remains unsold for a period of one (1) week following the auction, the parties shall do all acts and things and sign all documents necessary to list the property for sale via private treaty for a four (4) week period thereafter unless otherwise agreed to re-list the property for auction;
4.5if [Suburb W] remains unsold after the foregoing private treaty period, it shall be listed for sale via public auction again, with such auction to occur within a further four (4) week period, with the reserve price to be as agreed between the parties, and failing agreement $13,775,000;
4.6the Husband and Wife shall cooperate in every way with the agent and solicitor, including, without limiting the generality of the foregoing:-
4.6.1making the key and alarm codes (if any) available to the agent;
4.6.2signing all documents requested by the agent to sell [Suburb W];
4.6.3executing a contract for sale in the form prepared by the solicitors having the contract of sale at the sale price;
4.6.4allowing inspection of [Suburb W] at all times as requested by the agent;
4.6.5ensuring [Suburb W] presents in a neat and clean condition at the time of inspection by the agent and any prospective purchaser, with the costs of same to be met by the Husband;
4.6.6not doing or saying anything to hinder or prevent a sale being effected.
5.That on settlement of the sale of [Suburb W] the parties shall take all steps to distribute the proceeds of sale in the following manner and priority:-
5.1Any outstanding costs and agreed expenses of the sale including legal costs and disbursements, agents commission, advertising expenses, auction expenses and any adjustments due to the purchaser, and in reimbursement to the husband of such agreed costs of sale as have been paid by him;
5.2Payment of any and all monies due and owing to the mortgagee, ANZ Bank in respect of the mortgage secured over [Suburb W] being referable only to loan account number […32];
5.3In payment to the ANZ Bank of such amount outstanding pursuant to loan account number […56];
5.4In the event that the husband defaulted in the payment of the capital sum, or any part thereof, a payment to the Wife of such outstanding amount in respect of the capital sum;
5.5In payment to the wife of 50% of the amount by which the gross sale price of [Suburb W] exceeds the sum of $14.5 million (if applicable);
5.6The remaining balance shall be paid to the Husband.
6.In the event the Husband shall fail to join with the Wife in the sale of [Suburb W] pursuant to Order 4, and such failure continues for a period of seven days after the Wife has identified the husband's failure to take any specific step to progress the sale of [Suburb W], then the Wife shall be appointed Trustee for sale of [Suburb W] and the following shall apply:
6.1the agent shall be as nominated by the Wife;
6.2the solicitor shall be as nominated by the Wife;
6.3[Suburb W] shall be initially sold via public auction, with such auction to occur within six (6) weeks of the property being listed for sale by the agent, with the reserve price as determined by the Wife;
6.4if [Suburb W] remains unsold after a period of two (2) weeks following the auction, the Wife, as trustee for the sale, shall do all acts and things and sign all documents necessary to list the property for sale via private treaty for a six (6) week period thereafter unless otherwise agreed to re-list the property for auction;
6.5if [Suburb W] remains unsold after the private treaty period, the property shall be listed for sale via public auction again, with such auction to occur within a further four (4) week period, with the reserve price to be as recommended by the agent;
6.6the Wife, as trustee for sale, shall cooperate in every way with the agent and solicitor, including (without limiting the generality of the foregoing):-
6.6.1making the key and alarm codes (if any) available to the agent;
6.6.2signing all documents requested by the agent;
6.6.3executing a contract for sale in the form prepared by the solicitors having the contract of sale at the sale price;
6.6.4allowing inspection of [Suburb W] at all times as requested by the agent;
6.6.5ensuring [Suburb W] is in a neat and clean condition at the time of inspection by the agent and any prospective purchaser, with the costs of same to be reimbursed to the Wife from the sale proceeds;
6.6.6not doing or saying anything to hinder or prevent a sale being effected
6.7The Wife shall distribute the proceeds of sale in accordance with Order 5 above.
7.That pending sale of [Suburb W], the husband shall meet as and when the same fall due all costs and expenses relating to [Suburb W], including but not limited to all mortgage repayments, statutory charges, rates and outgoings.
8.The parties shall forthwith do all acts and things and sign all documents necessary including as Directors of [B6 Pty Ltd], to cause [B6 Pty Ltd] in its capacity as trustee of the Fund to sell [AA Property].
9.To facilitate compliance with the preceding Order the wife is appointed trustee to implement the sale of [AA Property] on behalf of [B6 Pty Ltd] and:
9.1the Wife shall appoint an agent to conduct the sale of [AA Property] within 14 days;
9.2the Wife shall appoint a solicitor to act on the sale of [AA Property] within 14 days; and
9.3[AA Property] shall be sold by either expressions of interest or private treaty sale at an asking price of $2.3 million and in the event that [AA Property] is not sold by expressions of interest or private treaty sale within six weeks the wife shall take all steps to sell the property by public auction, and:-
9.3.1The first auction shall take place within two months thereafter at a reserve price of $2.25 million;
9.3.2The second auction shall be at a reserve price of $2 million and shall take place within a further two months.
9.3.3The third auction shall be at a reserve price of $1.9 million and shall take place within a further two months.
10.That on settlement of the sale of [AA Property] the Wife shall take all steps to distribute the proceeds of sale in the following manner and priority:-
10.1Any outstanding costs and agreed expenses of the sale including legal costs and disbursements, agents commission, advertising expenses, auction expenses and any adjustments due to the purchaser;
10.2To then pay the remaining proceeds into the accounts of the Fund to be held in that account subject to these Orders.
11.That within 14 days of the settlement of the sale of [AA Property] the Husband shall nominate to [B6 Pty Ltd] a complying superannuation fund into which his member interest can be rolled and shall within seven days thereafter do all things necessary to pay into such complying superannuation fund his respective member balance in the Fund and shall thereupon do all things necessary to resign as a member of the Fund.
12.The husband’s superannuation interests with the Fund shall be split to create a superannuation interest for the wife as follows:-
12.1Pursuant to Section 90XT(2) of the Act and Regulation 27 of the Family Law (Superannuation) Regulations the Court determines the amount in relation to the husband’s superannuation in the Fund is $2,090,282.00.
12.2Pursuant to Section 90XT(4) of the Act the Court allocates a base amount to the wife in respect of the husband’s superannuation interests in the Fund of $817,887.00.
12.3Pursuant to Section 90XT(1)(a) of the Act whenever a splittable payment becomes payable in respect of the husband’s superannuation in the Fund the wife is entitled to be paid an amount calculated in accordance with the Family Law Regulations where the base amount is $817,887.00 and there is a corresponding reduction in the entitlement of the husband at the time of the splittable payment.
12.4The operative time for the payment under this Order is four business days after service of this Order and settlement of the sale of [AA Property].
12.5The Trustee shall do all such acts and things and sign all documents as may be necessary, in accordance with the obligations set out under the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001 to calculate the entitlement to make payment to the wife in accordance with these Orders.
12.6That having been accorded procedural fairness in relation to the making of this Order, this Order binds the Trustee of the Fund.
13.The Wife is granted exclusive occupancy of [N Property] and the wife shall be solely entitled to conduct the day to day [agricultural] activities in the ordinary course of business of the Family Trust including in respect of the management of livestock at [N Property].
14.Notwithstanding the preceding Order the Wife shall grant access to the Husband to remove all items located at [N Property] which belong to [B Pty Ltd, B2 Pty Ltd, B3 Pty Ltd, B4 Pty Ltd, B5 Pty Ltd and B7 Pty Ltd], such access to be on the following terms:-
14.1The removal of items shall be undertaken in the period commencing 14 days after these Orders and ending 56 days after these Orders;
14.2The Husband shall at no time enter or attempt to enter the homestead of [N Property] and he is restrained accordingly;
14.3The Husband shall provide the Wife with no less than 48 hours notice of his intention to attend [N Property] on each occasion;
14.4The Husband shall undertake the removal of the items in a workman-like manner and shall not damage the property and improvements located upon [N Property];
14.5The Husband shall be at liberty to appoint delegates, contractors and agents to attend [N Property] on this behalf within the terms of these Orders.
15.That save only for the purpose of the enforcement of these Orders, the Husband be and hereby is restrained from causing or permitting any proceedings to be commenced and/or maintained against the Wife or [B6 Pty Ltd], whether by the Husband personally and/or [B Pty Ltd, B2 Pty Ltd] or any other entity with which either the Husband and/or [B Pty Ltd] and/or [B2 Pty Ltd] are associated, and the Husband shall indemnify the Wife and keep her indemnified to the extent of 50% of any liability arising to her in relation to any such proceedings, including liabilities incurred by the Wife in opposing such claims inclusive of legal and accountancy expenses.
16.That except as otherwise stated in these Orders, the Husband shall indemnify each of the Wife, [B6 Pty Ltd] and the Family Trust in respect of any and all liability whenever and howsoever arising to each of and/or for which each of the Husband, [B Pty Ltd, B2 Pty Ltd] and any other entity (including Trust) with which the Husband is associated may be liable, including but not limited to all liability to pay any tax, including income tax, capital gains, penalty tax and/or interest which may arise, including in respect of any tax returns lodged on behalf of the Husband or any entity in which he has an interest to the date of these orders or in respect of any transactions pursuant to these Orders.
17.That except as otherwise stated in these orders, the Wife shall indemnify the Husband in respect of all liability whenever and howsoever arising to each of the Wife, [B6 Pty Ltd] and the Family Trust and/or for which each of the same may be liable, including but not limited to all liability to pay any tax, including income tax, capital gains, penalty tax and/or interest which may arise, including in respect of any tax returns lodged on behalf of the Wife or any entity in which she has an interest to the date of these Orders or in respect of any transactions pursuant to these Orders.
18.The parties shall within 14 days do all acts and things and sign all documents necessary to close ANZ Bank joint bank account number […]73 and distribute the balance equally between them with such distributions attributed to their respective shares of the net assets.
19. That the Husband pay to the Wife within 28 days the following sums:-
19.1$10,037.50 to reimburse her for his one-half share of the fees paid to the single expert quantity surveyor appointed in these proceedings;
19.2$10,862.50 to reimburse her for her one-half share of the fees paid to the single expert plant and equipment valuer appointed in these proceedings.
20.Order 6 of the Orders made by this Honourable Court on 18 July 2022 be varied to extend the time for the payment by the Wife so that it is contemporaneous with the payment of the capital sum.
21.That all prior Orders in relation to the attendance of the Husband at [N Property] and [AA Property] be and hereby are discharged and that pending compliance with these Orders, the Husband be and hereby is restrained from attending the homestead at [N Property] and from causing and/or permitting any other person to do so without the prior written consent of the wife.
22.That in the event either party refuses or neglects to execute any deed or instrument pursuant to these orders, the Registrar of the Family Court of Australia be appointed pursuant to section 106A of the Family Law Act 1975 , to execute such deed or instrument in the name of such defaulting a party and to do all things necessary to give validity to the operation of the deed or instrument.
23.Leave granted to the parties to file any Application in a Proceeding seeking further Orders and Directions as to the implementation of these Orders with the effect that the marital pool is distributed between the parties as to 50% in favour of the wife and 50% in favour of the husband.
(As per the original)
On the last afternoon of the trial the husband also amended his final relief sought by way of a minute of Order (Exhibit 48). He seeks:
Family Trust and [N Property]
1. That in respect of the Family Trust:-
1.1the Husband and Wife as Directors of [B6 Pty Ltd] shall do all acts and things and sign all documents required within 14 days to transfer to the Wife the plant, equipment, livestock and [agricultural product] recording in the accounts of the Family Trust;
1.2the Husband and Wife as Directors of [B6 Pty Ltd] shall do all acts and things and sign all documents required within three months to transfer the title and interest in [N Property] to the Wife at a value of $8.5 million;
1.3pending the transfer pursuant to Order 1.2, the Wife is granted exclusive occupancy of [N Property] and the Wife shall be solely entitled to conduct the day to day [agricultural] activities in the ordinary course of business of the Family Trust including in respect of the management of livestock at [N Property];
1.4Notwithstanding the preceding Order, the Wife shall grant access to the Husband to remove the Husband's [N Property] property, such access to be on the following terms:-
1.4.1The removal of items shall be undertaken in the period commencing 14 days after these Orders and ending 8 weeks thereafter;
1.4.2The Husband shall at no time enter or attempt to enter the homestead of [N Property] and he is restrained accordingly;
1.4.3The Husband shall provide the Wife with no less than 24 hours notice of his intention to attend [N Property] on each occasion;
1.4.4The Husband shall be at liberty to appoint delegates, contractors and agents to attend [N Property] on this behalf within the terms of these Orders.
1.5Following the transfer pursuant to Order 1.2, the Wife shall thereafter indemnify and keep indemnified the Husband in relation to all liabilities in respect of [N Property];
1.6the Husband shall within three months appoint a new trustee of the Family Trust, being a corporate trustee of which he is the sole director and shareholder.
2.That simultaneously with Order 1.6, the Wife shall do all acts and things and sign all documents necessary so as to:
2.1relinquish any prior nominations made by the Wife in respect of the Family Trust, with the Husband to prepare such documents at his own expense and provide to the Wife;
2.2forego any right or claim she may have, whether actual, contingent, or otherwise in respect of the Family Trust, including without limitation any right or expectation as a beneficiary, with the Husband to prepare such documents at his own expense and provide them to the Wife;
2.3assign to the Husband the whole of her right, title and interest (if any) in any loan account or unpaid present entitlements owed to her or to any of the Wife’s entities by or in respect of the Family Trust, with the Husband to prepare such documents at his own expense and provide them to the Wife such that the Wife and the Wife’s entities will have no right, title, or interest in, or be owed money, by [B6 Pty Ltd] as trustee for the Family Trust and there will be no payment and/or consideration due to the Wife in respect of the same save as provided for in these Orders; and
2.4as between the parties, the Husband shall thereafter be solely entitled to all interests in relation to the Family Trust and [B6 Pty Ltd] in its capacity as trustee of the Family Trust.
3.In the event that after the date of these Orders any action, claim, suit, demand, debt or liability in connection with the Family Trust is asserted or established against [B6 Pty Ltd] or either of the parties (other than by or on behalf of one of the parties) by reason of or in connection with any errors or misstatements in the records and reporting of the Family Trust during the period from the date of inception of the Family Trust to the date of these Orders, including without limitation:
3.1any liability to any creditor of or claimant against the Family Trust or [B6 Pty Ltd] arising in connection with the Family Trust including without limitation pursuant to any mortgage, financial facility, charge or guarantee, other than as disclosed in the financial statements and accounting records of the Family Trust as at the date of these Orders;
3.2any liabilities arising in connection with any interest, shareholder loan account, office or employment in relation to the Family Trust or [B6 Pty Ltd] as its trustee or either party personally; or
3.3any liability for or in respect of tax, penalties or interest in respect of any taxation obligation,
the Wife is to indemnify and hold harmless the Husband and the Husband’s entities from and against any liability arising in connection with such liability (including reasonable legal and advisory costs).
[Suburb W] property
4 That simultaneously with Order 1.2:
4.1The Wife shall do all such acts and things, including signing all documents and paying any money, as may be necessary to effect or procure the removal of the [Suburb W] Property Caveat One, [Suburb W] Property Caveat Two and [Suburb W] Property Caveat Three;
4.2The Wife shall do all such acts and things, including sign all documents, as may be necessary to transfer the whole of her right, title, and interest in the [Suburb W] property to the Husband unencumbered; and
4.3The Husband do all such acts and things, including sign all documents, as may be necessary to secure a release and discharge of the Wife’s liability in respect of the borrowings secured by the [Suburb W] Mortgage, and from such date the Husband indemnifies and holds harmless the Wife from and against any such liability;
4.4Pending the transfer of the [Suburb W] property to the Husband, the Husband is to indemnify and save harmless the Wife in relation to all outgoings payable in respect of the [Suburb W] property.
5In the event that the Husband should default in complying with his obligations pursuant to Order 4.3 and such default is not remedied by him within 21 days of the due date or Order 11, then the Husband shall do all acts and things and execute all documents necessary to list [Suburb W] property for sale by auction as follows:
5.1the Husband shall within 10 days appoint an agent ("the agent");
5.2the Husband shall within 10 days appoint a solicitor ("the solicitor");
5.3the [Suburb W] property shall be initially sold via public auction, with such auction to occur within six (6) weeks of the property being listed for sale by the agent or the agent acting on the sale shall make a final decision in respect of such marketing, with the reserve price to be the sum of $14,500,000;
5.4if the [Suburb W] property remains unsold for a period of one (1) week following the public auction referred to in Order 5.3 herein, the Husband shall do all acts and things and sign all documents necessary to list the property for sale via private treaty for a four (4) week period or the agent acting on the sale shall make a final decision in respect of such marketing;
5.5if the [Suburb W] property remains unsold after the foregoing private treaty period, it shall be listed for sale via public auction again, with such auction to occur within a further four (4) week period or the agent acting on the sale shall make a final decision in respect of such marketing, with the reserve price to be $13,775,000;
5.6the Husband shall cooperate in every way with the agent and solicitor, including, without limiting the generality of the foregoing:-
5.6.1making the key and alarm codes (if any) available to the agent;
5.6.2signing all documents requested by the agent to sell the [Suburb W] property;
5.6.3executing a contract for sale in the form prepared by the solicitors having the contract of sale at the sale price;
5.6.4allowing inspection of the [Suburb W] property at all times as requested by the agent;
5.6.5ensuring the [Suburb W] property presents in a neat and clean condition at the time of inspection by the agent and any prospective purchaser, with the costs of same to be met by the Husband;
5.6.6not doing or saying anything to hinder or prevent a sale being effected.
5.7the Husband shall inform and copy the Wife into all communications with the agent and the solicitor on the sale of the [Suburb W] property.
6That on settlement of the sale of the [Suburb W] property the Husband shall take all steps to distribute the proceeds of sale in the following manner and priority:-
6.1Any outstanding costs and agreed expenses of the sale including legal costs and disbursements, agents commission, advertising expenses, auction expenses and any adjustments due to the purchaser, and in reimbursement to the husband of such agreed costs of sale as have been paid by him;
6.2Payment of any and all monies due and owing to the mortgagee, ANZ Bank in respect of the mortgage secured over [Suburb W] being referable only to loan account number […]32;
6.3In the event that the Husband defaults on the payment to the Wife pursuant to Order 11, a payment to the Wife in the sum required to effect and overall adjustment of the parties net property contemplated by Order 11.
6.4The remaining balance (if any) shall be paid to the Husband.
7That pending sale of [Suburb W], the husband shall meet as and when the same fall due all costs and expenses relating to [Suburb W], including but not limited to all mortgage repayments, statutory charges, rates and outgoings.
[AA Property]
8The parties shall forthwith do all acts and things and sign all documents necessary, including as Directors of [B6 Pty Ltd], to cause [B6 Pty Ltd] in its capacity as trustee of [Superannuation Fund 1] to sell the [AA Property].
9To facilitate compliance with the preceding order and to implement the sale of the [AA Property] on behalf of [B6 Pty Ltd]:
9.1the parties in their capacity as Directors of [B6 Pty Ltd] shall agree on and appoint an agent to conduct the sale of the [AA Property]within 14 days of the date of these Orders, but failing agreement shall within a further 7 days write a joint letter to the President of the Real Estate Institute of NSW requesting the President nominate an agent to act on the sales and shall forthwith act on that nomination;
9.2the parties in their capacity as Directors of [B6 Pty Ltd] shall agree on and appoint a solicitor to act on the sale of the [AA Property] within 14 days of the date of these Orders, but failing agreement shall within a further 7 days write a joint letter to the President of the Law Society of NSW requesting the president nominate a solicitor and shall forthwith act on that nomination;
9.3the [AA Property] shall be sold by expressions of interest or an 8 hour online auction with a reserve or minimum price to be agreed between the parties and in the event the parties in their capacity as directors of [B6 Pty Ltd] cannot agree on how the sale is to proceed (including the marketing to be undertaken and the reserve or minimum price for each property) the agent acting on the sale shall make a final decision in respect of such marketing, and in the event the parties cannot agree upon the reserve price then:
9.3.1the reserve price for [AA Property] in respect of the first auction shall be $2.25 million;
9.3.2the reserve price for [AA Property] in respect of the second auction shall be $2 million; and
9.3.3the reserve price for [AA Property] in respect of the third auction shall be $1.9 million.
9.4In the event that the [AA Property] are not sold by expressions of interest within six weeks of the listing of the property, then:
9.4.1the first auction shall be online and take place within three months or the agent acting on the sale shall make a final decision in respect of such marketing;
9.4.2the second auction shall be either online or in person as or the agent acting on the sale shall make a final decision in respect of such marketing, and
9.4.3the third auction shall be either online or in person as agreed by the parties or failing agreement the agent acting on the sale shall make a final decision in respect of such marketing.
10Upon settlement of the sale of the [AA Property], the sale proceeds shall be disbursed as follows:
10.1In payment of any agent's commission, advertising expenses, auction expenses and legal costs and disbursements of the sale and any adjustments due to the purchaser;
10.2In payment of any tax referrable to the sale of the [AA Property]; and
10.3The balance to be paid into ANZ Business Cash Management Account held in the name of [Superannuation Fund 1] account number ending in […]02.
Cash payment
11.That the Husband shall within 3 months from settlement of [AA Property] pay or cause to be paid to the Wife a further sum in the amount required to effect such division so that the Wife receives 40% of the net property pool.
Joint Bank
12.The parties shall within 14 days do all acts and things and sign all documents necessary to close ANZ Bank joint bank account number […]73 and distribute the balance equally between them with such distributions attributed to their respective shares of the net assets.
Declarations
13The Husband be and is hereby declared to be the sole owner to the exclusion of the Wife of the whole of his right title and interest in the following:
13.1Husband's entities;
13.2Husband's shares;
13.3Husband's vehicles;
13.4Husband's bank account;
13.5Husband's household contents;
13.6Husband's superannuation entitlements; and
13.7All other property (including superannuation entitlements) and financial resources, of whatsoever nature and kind, in the name or possession of the Husband as at the date of the making of these Orders and in the future.
14The Wife be and is hereby declared to be the sole owner to the exclusion of the Husband of the whole of her right title and interest in the following:
14.1Wife's entities;
14.2Wife's shares;
14.3Wife's bank accounts;
14.4Wife's vehicles;
14.5Wife's animals;
14.6Wife's household contents;
14.7Wife's jewellery;
14.8Wife's superannuation entitlements; and
14.9All other property (including superannuation entitlements) and financial resources, of whatsoever nature and kind, in the name or possession of the Wife as at the date of the making of these Orders and in the future.
[Superannuation Fund 1]
15In accordance with s 90XT(1)(b) of the Family Law Act 1975 (Cth), the Wife is entitled to the specified percentage, being 100 per cent, of the Husband's interest in [Superannuation Fund 1] and the entitlement of the Husband is correspondingly reduced.
16That Order 15 have effect from the operative time and the operative time is 10 days after service of a sealed copy of this Order on the trustee of [Superannuation Fund 1].
17The trustee of [Superannuation Fund 1] shall do all acts and things and sign all documents as may be necessary to cause the accountants for [Superannuation Fund 1] to:
17.1calculate, in accordance with the requirements of the Family Law Act 1975 (Cth) and the Family Law (Superannuation) Regulations 2001 the entitlement created for the Wife by Order 15; and
17.2pay the entitlement to the Wife whenever the trustee makes a splittable payment from the Husband's interest in [Superannuation Fund 1].
18The parties do all acts and things and execute all documents (including as directors of [B6 Pty Ltd]) to roll-out the Wife’s interest in [Superannuation Fund 1] to such complying superannuation fund as is nominated by her.
19Forthwith upon compliance with Order 18 and the sale of the [AA Property], the parties take all steps to cause the Fund to vest, determined and deregistered at the cost of the Fund.
20Orders 15 to 18 bind the trustee of [Superannuation Fund 1] which at the date of these Orders is [B6 Pty Ltd].
21In the event there is any net tax payable by [Superannuation Fund 1] or by either of the Husband or the Wife, or a tax refund issues as a consequence of the splitting of the Husband’s entitlement, the following shall occur:
21.1In the event of a taxation liability, the Wife shall pay or cause to be paid any such liability forthwith upon receipt of any Notice of Assessment issued by the Australian Taxation Office; or
21.2In the event of a tax refund, the Husband and Wife forthwith cause the said refund to be paid to the Wife.
22Pending the superannuation split and roll-out pursuant to Orders 15 to 18, each of the Husband and Wife shall be and is hereby restrained from dealing with and/or disposing of any of the assets of [Superannuation Fund 1] other than in accordance with the terms of these Orders or with the unanimous written consent of the directors of the trustee (which consent is not to be unreasonably withheld).
23Pending the superannuation split pursuant to Orders 15 to 17, each of the Husband and Wife shall immediately revoke any binding death benefit nomination already made and each party be and is hereby restrained from:
23.1making any binding death benefit nomination in favour of a child described in regulation 13 of the Family Law (Superannuation) Regulations 2001;
23.2making any other nomination where the effect of such nomination would be to render any splittable payment not splittable; or
23.3doing any act or thing which would defeat, extinguish or reduce the entitlement of either party under these Orders.
[B6 Pty Ltd]
24Forthwith upon compliance with Order 19 (causing [Superannuation Fund 1] to vest), the Husband and the Wife shall do all acts and things and sign all documents (including as directors and shareholders of [B6 Pty Ltd]) necessary to transfer his shareholding in [B6 Pty Ltd] to the Wife.
General indemnities
25 Except as otherwise specifically provided for by any of these Orders:
25.1the Wife hereby indemnifies the Husband from and in respect of all actions, claims, suits and demands as may be made against the Husband in relation to all liabilities in the name of the Wife;
25.2the Husband hereby indemnifies the Wife from and in respect of all actions, claims, suits and demands as may be made against the Wife in relation to all liabilities in the name of the Husband; and
25.3each of the Husband and the Wife release the other from all debts, liabilities or claims owing from one to the other.
Implementation of Orders
26Pending compliance with Order 24, each of the Husband and Wife shall be and is hereby restrained from dealing with and/or disposing of any of the assets and/or authorising any action on behalf of the Family Trust and/or [B6 Pty Ltd] other than in accordance with the terms of these Orders or with the written consent of the other party.
27Within 14 days of the date of these Orders the Wife shall pay to the Husband one half of the fees paid to [Ms T] by the Husband in these proceedings with respect Expanded Scope of Work Report in accordance with the Orders made on 18 July 2022 as amended on 28 July 2022.
28Pursuant to s 106A of the Family Law Act 1975 (Cth), in the event a party neglects or refuses to sign a document or instrument to implement these Orders then a Registrar or Deputy Registrar of the Court is authorised to sign on behalf of that party.
29 All previous orders be discharged other than the order referred to in Order 27.
30 The Wife pay the costs of and incidental to this Application.
(Highlighting removed)
I find that the husband’s financial resources are materially superior to that of the wife.
X is currently 16 years of age, lives with the wife, and spends five nights each fortnight and up to half of the school holidays with the husband. The orders as to the time spent by X with each of the parents will cease on 30 June 2025, after such time X is at liberty to spend time with each parent in accordance with his wishes. Notwithstanding the husband’s submission that neither party can anticipate how much time X will choose to spend with each of them after 30 June of this year, there is no evidence to suggest he is unlikely to primarily live with wife until he is self-supporting.
The husband currently pays child support as assessed at $218 each week, and X’s private school fees and incidental costs. Both the husband and his mother agreed that his mother would meet X’s private school fees pursuant to the orders made 23 May 2024 if the husband did not do so until he completes school at the end of 2027.
The impregnated value of CGT on the N Property, being the adjusted property of the wife pursuant to these orders, is greater than the CGT impregnated in the B2 Pty Ltd shares, being property adjusted to the husband pursuant to these orders.
A holistic consideration of the matters raised above warrants an adjustment from the contribution finding of 2.5 per cent in favour of the wife. In dollar terms, the value of this adjustment to the wife is $769,581, a difference of $1,539,162.
CONCLUSION – JUSTICE AND EQUITY
Accordingly, the property of the parties will be adjusted 45.5 per cent to the wife and 54.5 per cent to the husband, a difference of $2,770,493.
The parties each seek nuanced orders in the adjustment of their property. After four and a half years of litigation, incurring combined legal costs of more than $3.45 million and the current five-day trial event, with the benefit of experienced senior and King’s counsel and accredited solicitors, the husband and the wife were requested to provide a joint proposed minute of the orders sought by each in Exhibits 43 and 48 that were agreed, with a common set of definitions. That request could not, being emblematic of the litigation, be fulfilled.
Section 79 proceedings require the form of orders adjusting property to be just and equitable. If the parties fail to promote their obligations as litigants pursuant to s 96 of the Act, and for the period up to amendment to the legislation, s 68 of the Federal Circuit and Family Court of Australia Act 2021 (Cth), the mandate to achieve justice and equity must be achieved doing the best as can be done on the available evidence and within the parameters the parties present. When crafting orders adjusting the property of these parties, it is necessary, in so far as is possible, to obviate any requirement for them to achieve consensus or constructively implement the progression of orders, as it is not expected that either will adopt a commercial approach or be sensitive of the other.
The husband and the wife agree that:
(a)The wife will retain the N Property in specie at a value of $8.5 million and the plant, equipment, livestock and agricultural product recorded in the accounts of the Family Trust, the husband being enabled to retain and retrieve at least the property of the B Group from the N Property ;
(b)B6 Pty Ltd will be removed as the trustee of the Family Trust and a new trustee appointed, with the husband to retain the Family Trust, including receiving the wife’s credit loan account, but excluding N Property and the trusts plant, equipment, livestock and agricultural product;
(c)B6 Pty Ltd in its capacity as trustee of Superannuation Fund 1 will sell AA Property. Both agree that a superannuation splitting order be made in favour of the wife from the husband’s member entitlement in Superannuation Fund 1. They do not agree as to the value of the superannuation split, or the date from which it will operate. On the occurrence of specified events, the husband will transfer his interest in B6 Pty Ltd to the wife; and
(d)The wife will transfer her interest in the Suburb W property to the husband upon the husband paying to the wife a capital sum. In the event of default as to payment, the Suburb W property will be sold.
The husband says that he seeks to maximise the value of superannuation adjusted to the wife to reduce the value of the capital payment he will make to her to retain the Suburb W property. He seeks a superannuation splitting order to the wife for 100 per cent of his member entitlement in Superannuation Fund 1 with the splittable payment to be made 10 days after service of a copy of any order on the trustee of the fund. The construction of his order requires the superannuation split to occur prior to the sale of the AA Property. He seeks that upon implementation of the sale of the AA Property , for the wife to roll out her adjusted member entitlement from the fund and for the SMSF structure to vest and be deregistered.
The wife opposes the superannuation splitting order sought by the husband. She seeks to retain the Superannuation Fund 1 structure. She seeks that a superannuation splitting order operate after the completion of the sale of the AA Property in her favour from the husband’s member entitlement in the SMSF by a base amount of $817,887.
The value of the husband’s interest in Superannuation Fund 1 is $2,090,282. The value of the wife’s interest is $454,508. The total value of the fund is $2,544,790. That value included an agreed value of the AA Property at $2.525 million. The wife’s current entitlement is about 18 per cent of the value of the fund. As is self-evident, the AA Property comprises close to the entire value of the assets of Superannuation Fund 1. The parties included in the balance sheet, at Item 31A, the agreed CGT payable by Superannuation Fund 1 if AA Property was sold at $2.525 million, being $185,279.
The wife’s objective is to equalise the current member entitlements of she and the husband in Superannuation Fund 1, illustrated as follows:
The combined member benefits of the parties in the SMSF is $2,544,790.
50 per cent or half of that value is $1,272,395.
The value of the wife’s current member entitlement is $454,508 plus a split payment of $817,887 = $1,272,395.
If the superannuation splitting orders as sought by the husband were made, the wife’s post-split member entitlement value would be the value of the fund at $2,544,790. The AA Property would be sold. The wife alone would receive the benefit or burden in a rise or fall in the value achieved on the AA Property disposal by Superannuation Fund 1. Additionally, the value of the CGT payable by Superannuation Fund 1 from the sale of the AA Property (currently at $185,279 if sold for $2.525 million) would be solely borne by the wife’s member entitlement, reducing the value of her member entitlement (to $2,359,511), less the unknown costs of real estate agents costs and conveyancing costs on Superannuation Fund 1 disposing of the AA Property.
If the superannuation splitting orders as sought by the wife were made, the value of the member entitlements of each of the husband and the wife in Superannuation Fund 1 would not be the subject of a splitting order until after the completion of the AA Property disposal. The superannuation splitting order would operate at that time applying a base amount. That chronology also may not equitably accommodate the possible rise or fall in the sale price achieved on the disposal of the AA Property and would present challenges in equitably adjusting the agreed value of the taxation impost incurred in the fund on that disposal.
I find that each party retaining significant superannuation entitlements in Superannuation Fund 1 by adjusting their member entitlements pursuant to a superannuation splitting order equalising their member entitlements in the fund being made 10 days after the making of orders achieves justice and equity between the husband and the wife, having regard to:
(a)The fact that the husband is 60 years old and closer to achieving an age where he can exercise those entitlements. The wife is 52 years old and unable to access her superannuation entitlements for some time.
(b)The superannuation splitting order sought by the husband would lock up substantive property of the wife, being at this time the value of the fund at $2,544,790 less CGT and selling costs, in a form of property that cannot be utilised by her in a cash form. By comparison, the property adjustment proposed by the husband’s orders do not carry such impediment. He can elect to liquidate his property to generate cash as and when he determines. The husband will retain the primary income producing property of the parties. He has a higher income earning capacity and superior financial resources.
(c)The wife requires available cash now to pay her substantial loans for legal fees to litigation funders. She ought to have remaining cash after that payment from any adjusting sum to accommodate the vicissitudes of life, so as to avoid being cash flow deprived.
(d)The construction of the orders sought by the husband would saddle the wife with all the CGT payable on the sale of the AA Property, absent submission as to why that circumstance would achieve justice and equity between the parties.
(e)The oral evidence of the ch 7 real property valuation expert Mr LL identifies the possibility of delay in achieving the disposal of rural properties around the AA Property for a period of up to 12 months or greater, in turn delaying by way of the wife’s proposed orders implementation of any superannuation splitting order.
(f)History is indicative that delay in adjusting the property of these parties is likely to lead to further disputes between them. By way of comparison, a 10-day period for the operative time implementing the superannuation splitting order ensures that each party will equally receive the benefit or burden of any rise or fall in the disposal value of the property and any adjustment to the value of their member entitlements from the CGT impost and other sale costs incurred by Superannuation Fund 1 on the sale of the AA Property. Each party will be equally invested in achieving the maximum value for the sale of the AA Property, tempered by a balanced engagement of the parties in the mechanical orders regulating the terms of the sale of the AA Property within specified time frames.
(g)The husband did not make any submission as to why a superannuation order ought not be made in a base amount.
A superannuation splitting order will be made in the base amount of $817,887 in favour of the wife from the husband’s member entitlement in Superannuation Fund 1 to operate 10 days after service on the order on the trustee, B6 Pty Ltd. As the superannuation splitting order will operate within 10 days, the utility as to orders as to each party making binding death nominations evaporates.
The wife proposed that she alone appoint the real estate agent and the solicitor to act on the sale of the AA Property, that it be listed for sale by expressions of interest or private treaty in the first instance at a reserve price of $2.3 million, and, if not sold, to be sold by a series of auctions ratcheting down the reserve price to $2.25 million, $2 million, and thereafter $1.9 million. The husband proposed that in the event the parties failed to agree as to the identity of a listing agent or solicitor to act on behalf of Superannuation Fund 1 on the sale of the AA Property, default orders be made for regulatory bodies to nominate an agent or solicitor. He also sought that the property be sold by expression of interest with an alternative by way of an online auction, and if it was not sold, to ratchet down the reserve price in the same terms and for the same reserve prices as the wife, but at different spacings of time between the auctions. He did not agree to the initial reserve price at $2.3 million but did not provide an alternate price sought. Both parties agreed that the proceeds of sale be deposited into the accounts of Superannuation Fund 1.
The orders sought by the each of the husband and the wife regulating the mechanics of the sale of the AA Property will be varied so that one party does not achieve an advantage over the other in the process of disposal of the property. An order will be made for the initial reserve price to be that as agreed by the parties in writing, and failing agreement at $2.525 million, being a value the parties agreed to for the purposes of the balance sheet. An order will be made for the Superannuation Fund 1 accountant to prepare, at the cost of the fund, special purpose accounts to record the implementation of the splitting order within 21 days from the date of these orders.
Each party now has the benefit of their own SMSF established post-separation. They each have the capacity to roll out their split and equalised superannuation interests in Superannuation Fund 1 as will be adjusted by the completion of the sale of the AA Property. Notwithstanding the wife will retain the fund trustee, B6 Pty Ltd, the continuation of the fund may be fertile ground for future disputes between them. The interests of the parties are best promoted by each party rolling their superannuation interest out of the fund after the sale of the AA Property has been completed and the fund vesting and being deregistered at the cost of the fund. Such order will be made.
The wife currently has in her possession or will receive the following by way of the orders:
Ownership Description Value ($) ASSETS 2 W N Property 8,500,000 11 W Loan a/c – AS Pty Ltd 29,964 12 W P Company a/c …28 11,497 15 W Motor Vehicle 2 28,234 17 W Trailer 7,000 18 W Sport equipment 1,000 19 W Jewellery 15,000 20 W Paid legal costs, including funds in trust 1,583,429 Total 10,176,124 LIABILITIES 25 W Litigation loan – XX Pty Ltd 1,006,531 26 W Personal loan – Ms YY 150,000 28 W WW Lawyers 20,000 31A W 50 per cent of the tax on the sale of the AA Property 92,640 32 W ATO tax balance 19,639 Total 1,288,810 SUPERANNUATION Member Name of Fund Type of interest 33 W Interest Superannuation Fund 1 after split SMSF 1,272,395 34 W Superannuation Fund 1 SMSF 50,492 35 W Superannuation Fund 5 SMSF 71,079 Total 1,393,966 TOTAL NET SUPERANNUATION + NON-SUPERANNUATION 10,281,280
The wife accordingly holds $10,281,280. She ought to hold $14,006,379. She therefore requires a payment from the husband of $3,725,099 to achieve 45.5 per cent of the property of the parties.
The husband’s overall entitlement to 54.5 per cent of the property of the parties identified in the balance sheet equates to $16,776,872.
The husband currently has in his possession or will receive the following:
Ownership Description Value ($) ASSETS 1 H Suburb W home 14,500,000 2 H Mr Sartre & Ms Henschel Family Trust (including the B2 Pty Ltd shares) less the value of the N Property ($7,787,487 – $8,500,000) (712,513) 3 H The Sartre Family Trust 21,192 5 H B Pty Ltd 4,768,243 6 H B4 Pty Ltd 155,911 7 H B7 Pty Ltd 299,086 8 H B5 Pty Ltd 2,094 9 H Loan account Mr Sartre & Ms Henschel Family Trust 1,843,417 10 H Wife’s Loan account Mr Sartre & Ms Henschel Family Trust 1,208,266 13 H ANZ a/c …06 37,682 14 H Share portfolio 12,300 16 H Boat 18,000 21 H Paid legal costs, including funds in trust 1,815,835 Total 23,969,513 LIABILITIES 22 H Suburb W ANZ mortgage …32 2,936,462 24 H Loan a/c - B Pty Ltd 753,645 29B H Personal loans – Mr & Ms M and BB Pty Ltd 1,052,024 31A H 50 per cent of the tax on the sale of the AA Property 92,639 Total 4,834,770 SUPERANNUATION Member Name of Fund Type of interest 33 H Superannuation Fund 1 after split SMSF 1,272,395 37 H Superannuation Fund 1 SMSF 94,833 Total 1,367,228 TOTAL NET SUPERANNUATION + NON-SUPERANNUATION 20,501,971
The husband accordingly will hold $20,501,971. He ought to hold $16,776,872. Hence, he will pay to the wife $3,725,099.
The wife sought the capital sum payable by the husband be made within three months of the date of orders made and delivery of these reasons. The husband proposed it be paid to the wife within three months from the date of settlement of the AA Property. The husband’s orders, aside from the possible delay in the period to sell the AA Property, result in him having the benefit the income producing property of the parties by way of B Pty Ltd, the continued use of the most valuable item of property, the Suburb W property, and his superior financial resources, pending the wife receiving her adjusted property by way of the cash adjustment. By way of contrast, until the sale of AA Property, the wife will have the benefit of the N Property, but scarce other liquid assets. The husband was aware that the wife sought payment of a greater cash adjusting sum than determined. He did not adduce evidence as to any limitation posed for him to access sufficient monies to pay the determined cash adjustment within three months of the date of any orders, notwithstanding his opportunity to do so. His evidence is that he expects his mother will assist him in making such payment. It is just and equitable that the property of the parties be adjusted and distributed as soon as is reasonably practicable. An order will be made for the husband to pay the cash adjustment to the wife within three months from the date hereof.
In default of payment of the capital sum the parties could not agree as to the mechanics of the orders regulating the sale of the Suburb W property. The husband proposed to appoint the agent and solicitor acting on the sale. The wife proposed that the parties agree as to them, or failing agreement, for specific agents and solicitors to be appointed. No submissions were made as to why one course ought to be adopted rather than the other. In the event the parties are unable to agree, default orders will be made for regulatory bodies to nominate an agent or solicitor. While the parties agreed that the Suburb W property be sold by public auction and if passed in, listed for private treaty for four weeks, and if unsold during that period, it thereafter be listed for a further auction, they could not agree on some finer details of those processes. Orders will be made broadly in terms of that methodology but refined to reduce the opportunity for further disputes.
The wife sought that, on default, the proceeds of sale of the Suburb W property after selling expenses and payment of ANZ mortgages and loans be applied:
5.4In the event that the husband defaulted in the payment of the capital sum, or any part thereof, a payment to the Wife of such outstanding amount in respect of the capital sum;
5.5In payment to the wife of 50% of the amount by which the gross sale price of [Suburb W] exceeds the sum of $14.5 million (if applicable);
5.6 The remaining balance shall be paid to the Husband.
The husband sought for the proceeds of sale on default of the Suburb W property, after selling expenses and payment of ANZ mortgages and loans, to be applied to pay the determined adjusting sum as ordered to the wife, and for he to retain the remaining balance.
The wife’s orders embrace the possibility of sharing in any increase in the value of the Suburb W property from that agreed at the time of trial to that achieved in the future on a default sale, but do not reciprocate by sharing the reduction in value if it is sold on default for less than the agreed value at the time of trial. The husband’s orders promote the wife receiving the fixed value of her cash adjusting sum. Neither proposed order was the subject of submissions. Neither achieves justice and equity. The value of the Suburb W property is $14.5 million, less ANZ loan …32 at $2,936,462, equalling an equity of $11,564,538 (the value of ANZ loan …56 secured on the Suburb W property is not a balance sheet item, it being taken up in the value of the Family Trust). The value of the cash adjusting sum to the wife is $3,725,099, being 32.2 per cent of that equity. Orders will be made that the proceeds of any default sale of the Suburb W property, after payment of outstanding costs and agreed expenses of the sale including legal costs and disbursements, agents commission, advertising expenses, auction expenses and any adjustments due to the purchaser, reimbursement to the husband of such agreed costs of sale as have been paid by him, and payment of the ANZ mortgage …32, be distributed as to 32.2 per cent to the wife and the balance to the husband (Noetel and Quealey (2005) FLC 93-230).
The parties agreed to an order for the wife to have exclusive occupancy of the N Property and for she to be solely entitled to conduct the day-to-day agricultural activities in the ordinary business of the Family Trust including in respect of the management of livestock at the N Property. Such an order will be made. The husband sought that, pending the sale of the Suburb W property, he meets, as and when they fall due, all mortgage instalments, statutory charges and outgoings and indemnify the wife in relation to the same. Such order will be made.
Orders will be made broadly in the terms as agreed between the parties for the transfer of the N Property from the Family Trust to the wife, for the wife to assign to the husband her credit loan account with the Family Trust, for the husband to appoint a new trustee being a corporate trustee of which he is the director and shareholder, and for the wife to indemnify him in relation to any liabilities in relation to the N Property. A declaration will be made broadly in terms as sought by the husband that he be solely entitled to all the remaining interests in the Family Trust, other than those transferred to the wife and B6 Pty Ltd, and orders made facilitating the wife executing documents and doing such things as are necessary to relinquish her interest in the Family Trust. The simultaneous implementation of these orders will ensure that both parties are invested in progressing their compliance to achieve the adjusted Family Trust property to which they agree with a view to that mutual interest securing compliance.
As to the property of the husband and/or his corporate entities which are currently located on the N Property, the wife sought:
14.Notwithstanding the preceding Order the Wife shall grant access to the Husband to remove all items located at [N Property] which belong to [B Pty Ltd, B2 Pty Ltd, B3 Pty Ltd, B4 Pty Ltd, B5 Pty Ltd and B7 Pty Ltd], such access to be on the following terms:-
14.1The removal of items shall be undertaken in the period commencing 14 days after these Orders and ending 56 days after these Orders;
14.2The Husband shall at no time enter or attempt to enter the [N Property] and he is restrained accordingly;
14.3The Husband shall provide the Wife with no less than 48 hours notice of his intention to attend [N Property] on each occasion;
14.4The Husband shall undertake the removal of the items in a workman-like manner and shall not damage the property and improvements located upon [N Property];
14.5The Husband shall be at liberty to appoint delegates, contractors and agents to attend [N Property] on this behalf within the terms of these Orders.
(Emphasis added)
The husband sought:
1.4… the Wife shall grant access to the Husband to remove the Husband's [all designated items at N Property], such access to be on the following terms:-
1.4.1The removal of items shall be undertaken in the period commencing 14 days after these Orders and ending 8 weeks thereafter;
1.4.2The Husband shall at no time enter or attempt to enter the homestead of [N Property] and he is restrained accordingly;
1.4.3The Husband shall provide the Wife with no less than 24 hours notice of his intention to attend [N Property] on each occasion;
1.4.4The Husband shall be at liberty to appoint delegates, contractors and agents to attend [N Property] on this behalf within the terms of these Orders.
(Emphasis added)
Exhibit 48, being the husband’s minute of final orders sought, contained a definition as to the 23 items of property which he said formed “the Husband's [N Property] ”. Those definitions did not differentiate between that property owned by B Pty Ltd, B2 Pty Ltd, B3 Pty Ltd, B4 Pty Ltd, B5 Pty Ltd, and B7 Pty Ltd with that property owned by the husband personally. Enquiries made in submissions as to the evidence identifying the items of property falling within the husband’s definition in Exhibit 48 was the subject of a somewhat cryptic response. The husband’s affidavit said that B Pty Ltd had several full shipping containers of company inventory and other items on the property (at paragraph 283). That does not account for the 23 items of property sought to be included by Exhibit 48. An order will be made as sought by the wife to allow the removal of property of B Pty Ltd, B2 Pty Ltd, B3 Pty Ltd, B4 Pty Ltd, B5 Pty Ltd, and B7 Pty Ltd. No submission was made as to why an order ought not be made, having regard to the history recorded earlier in these reasons, that the husband undertake the removal of the items in a workman-like manner and not damage the property and improvements located upon the N Property. Such order will be made.
The husband sought to give the wife 24 hours’ notice of his intention to attend the N Property for the purposes of the removal of the items. The wife sought to be given 48 hours’ notice. Having regard to the extended history of interlocutory disputes as to the husband attending the N Property, 48 hours’ notice as sought by the wife will allow her adequate time to prepare and make any arrangements as may be required for the attendance by or on behalf of the husband.
Each of the husband and wife sought orders to regulate, as between them, from the time of the making of final orders, financial responsibility for future possible liabilities arising from the historic revenue and taxation reporting responsibilities of the Family Trust. This echoed from the husband obtaining the AQ Financial Services reports and then from the opinions expressed by Ms T as the single forensic accounting expert on the “expanded scope of work” as to contended irregularities in the published financial statements of the Family Trust up to 2022. The wife sought a form of anti-suit injunctive order and indemnity from the husband. The husband sought an indemnity from the wife from the date of inception of the Family Trust to the date of the orders “if any issue ever arises in respect of the Australian Taxation Office”. In cross-examination the wife expressed a concern as to the husband attempting to continue the conflict between them by way of progressing his complaints as to the historic revenue reporting of the Family Trust accounts. She said she wants to “draw a line” under the matter.
During submissions the husband said that the “battle lines” on this dispute remained as to him seeking “100 per cent indemnity” from the wife in the event any future liability for historic financial reporting of the Family Trust, and that the wife sought that the parties should be equally responsible for such future liability if generated.
It was suggested to the parties in submissions that if a liability had been generated by way of the Family Trust’s incorrect recording of an expense, the acquisition or sale of a stock item, or receiving any other financial advantage or disadvantage, that benefit, or detriment, has been enjoyed or met by each of them. It was further suggested to the parties that if amended tax returns were filed for the Family Trust’s operations for the period up until the time of the trial to create an additional amended taxation liability, it would not be inequitable for each party to assume half responsibility for it. The wife said she agreed to that position. The husband said he would be “struggling to make a submission against that” and that he “couldn’t be heard against” such an order. The request for the parties to draw that minute of order to reflect this position could not be fulfilled. The parties agreed as to the value of the Family Trust for the purposes of the trial and agreed how its assets and liabilities will be adjusted between them in specie. The value of any potential future taxation liability, penalties, or interest arising from the historic conduct of the Family Trust was not identified in the evidence. Both the husband and the wife have achieved benefits of the Family Trust, being their property. The parties historical use of the Family Trust will not be permitted to be used as an incendiary device awaiting detonation. The husband sought for the indemnity from the wife to be from the date of inception of the Family Trust. For the forgoing reasons, it is just and equitable for an order to be made that each party to be equally responsible for and to pay 50 per cent of any taxation liability or obligation, including any penalties or interest, arising from the historic operations of, or revenue reporting failures or omissions of, the Family Trust or B6 Pty Ltd from the date the Family Trust was established to the date of these reasons.
An order will be made as sought by each to do all things to close an ANZ account …73 and distribute the balance equally between the parties, despite such an account not forming part of the balance sheet. Each party sought an order pursuant to s 106A of the Act. Such order will be made varied from that sought by the parties to reduce the process to achieve implementation of orders.
Each of the parties sought orders as to costs of the proceedings including as to a contribution by the other to ch 7 expert fees or varying existing orders as to the payment of expert fees. Each party will have capacity to make such application for costs as they are advised. If no application is made, the existing orders as to payments of experts’ fee or the provision of the Rules will apply, and each party’s application for orders for the costs of the proceedings dismissed.
Standing back, I find the distribution of the property of the parties in the terms identified above is appropriate and otherwise just and equitable. Orders will be made accordingly.
I certify that the preceding two hundred and thirty-nine (239) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Campton. Associate:
Dated: 31 March 2025
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