Henson & Marlin (No 4)
[2024] FedCFamC1F 713
•25 October 2024 as corrected on 21 November 2024
FEDERAL CIRCUIT AND
FAMILY COURT OF AUSTRALIA (DIVISION 1)Henson & Marlin (No 4) [2024] FedCFamC1F 713
File number(s): BRC 10186 of 2020 Judgment of: HOGAN J Date of judgment: 25 October 2024 as corrected on 21 November 2024 Catchwords: FAMILY LAW – PROPERTY – Where the applicant sought orders which would see her receive property valued at 40 per cent of the total nett value of the property – Where the respondent sought that the wife’s application be dismissed – Where it is the parties’ second de facto relationship – Where consent orders were made in the Supreme Court as a result of the first de facto relationship – Where two of the parties’ three children were born during the second relationship – Where the respondent contended there was an agreement to keep all of their finances separate – Where the court was satisfied that in all the circumstances it is just and equitable to make an order altering the interests of the parties – Where the applicant is the sole carer of the two children aged 13 and 11 and the respondent has made minimal contributions to their financial support since the February 2019 separation – Where the respondent has a history of inadequate disclosure – Where the respondent has a history of non-compliance with interim orders requiring him to pay money to the applicant – Where orders are made that the applicant receive property valued at 40 per cent of the total nett value of the property – Where the respondent sought to retain all real property under his control and make a cash payment within 90 days of the order – where the applicant sought the transfer of specified real property and to receive a cash payment – where orders are made for the transfer of specified real property and a cash payment Legislation: Family Law Act 1975 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Property Law Act 1974 (Qld)
Cases cited: Bevan & Bevan (2013) FLC 93-545
Carruthers v Carruthers (1996) FLC 92-707
Chorn and Hopkins (2004) FLC 93-204
Gronow v Gronow (1979) FLC 90-716
Kannis and Kannis (2003) FLC 93-135
Mallet v Mallet (1984) 156 CLR 605
Norbis v Norbis (1986) 161 CLR 513
Rosati v Rosati (1998) FLC 92-804
Stanford v Stanford (2012) 247 CLR 108
Steinbrenner & Steinbrenner [2008] FamCAFC 193
Taffner & Taffner (2021) FLC 94-022
Watson v Ling (2013) FLC 93-527
Weir and Weir (1993) FLC 92-338
Division: First Instance Number of paragraphs: 237 Date of hearing: 16, 17 and 18 September 2024 Place: Brisbane Counsel for the Applicant: Mr Drysdale of King’s Counsel with Mr Gordon Solicitor for the Applicant: KLM Solicitors Counsel for the Respondent: Ms Murphy Solicitor for the Respondent: Hirst & Co FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
Henson & Marlin (No 4) [2024] FedCFamC1F 713
CORRIGENDUM
HOGAN J:
This corrigendum is issued to correct a clerical mistake by which “2008” was written “2018” in [10] and [27] of these Reasons.
I certify that the preceding one (1) paragraph is a true copy of the Corrigendum to the Reasons for Judgment herein of Hogan J. Associate:
Dated: 21 November 2024
ORDERS
BRC 10186 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS HENSON
Applicant
AND: MR MARLIN
Respondent
ORDER MADE BY:
HOGAN J
DATE OF ORDER:
25 OCTOBER 2024
THE COURT ORDERS BY WAY OF FINAL ORDER PERSUANT TO S 90SM(1)(A) OF THE FAMILY LAW ACT 1975 (CTH) THAT:
1.Within forty-five (45) days of the date hereof, the respondent shall transfer to the applicant all his right title and interest, free of all and any encumbrance, in the property located at 1 DD Street, Suburb FF in the State of Queensland, more particularly described as Lot … on RP … with Title Reference ….
2.Within forty-five (45) days of the date hereof, the respondent, in his capacity as director of C Pty Ltd, shall cause that entity to transfer to the respondent, free of all and any encumbrance:
(a)the property located at 1 GG Street, Suburb FF in the State of Queensland, more particularly described as Lot ... on RP…, with Title Reference …; and
(b)the property located at 2 GG Street, Suburb FF in the State of Queensland, more particularly described as Lot ... on RP..., with Title Reference ....
3.Within forty-five (45) days of the date hereof, the respondent, in his capacity as director of D Pty Ltd, shall cause that entity to transfer to the respondent, free of all and any encumbrance, the property located at 2 DD Street, Suburb FF in the State of Queensland, more particularly described as Lot ... on RP…, with Title Reference ….
4.The respondent shall, before the transfers of real property to the applicant as provided for in Orders 1-3 above, take all steps, either personally or in his capacity as director of C Pty Ltd and D Pty Ltd, to ensure that all outstanding rates and utilities owing in relation to the real properties are paid in full.
5.The applicant shall, at her expense, take all steps to ensure that any caveats lodged on any real property owned by the respondent or by entities under his control, are removed so as to facilitate the respondent’s compliance with the terms of Orders 1-3 above.
6.The respondent shall, either personally or in his capacity as director of C Pty Ltd and D Pty Ltd, indemnify the applicant in relation to all claims and liabilities of whatever nature in relation to the real properties located in the State of Queensland at: 1 DD Street, Suburb FF; 1 GG Street, Suburb FF; 2 GG Street, Suburb FF; and 2 DD Street, Suburb FF.
7.Within forty-five (45) days of the date hereof, the respondent shall cause a cash payment to be made to the applicant in the amount of $2,988,636, with such payment to be made to the applicant’s solicitor’s trust account.
8.The applicant shall be responsible for and shall indemnify the respondent in relation to all fees and costs currently owing to NN School.
9.Other than is provided for in this Order and save for the purposes of enforcing the terms of the same, the applicant shall retain as her absolute property and is entitled to be the sole legal and beneficial owner of and to retain sole use and control of:
(a)the real property located at LL Street, Suburb MM in the State of Queensland, more particularly described as Lot ... on RP …, Title Reference …; and
(b)any funds held in all bank accounts in her sole name; and
(c)any furniture, household contents, motor vehicles and all other chattels currently in her name or possession; and
(d)the funds received by her by way of partial property settlement consequent upon Order 3 of the Orders made on 31 August 2022; and
(e)her superannuation entitlements with Super Fund 1; and
(f)all other proprietary interests of whatsoever nature currently in her possession or under her control.
10.Other than is provided for in this order and save for the purposes of enforcing the terms of the same, the respondent shall retain as his absolute property and is entitled to be the sole legal and beneficial owner of and to retain sole use and control of:
(a)the real properties located in the State of Queensland at: 1 Q Street, Suburb R; 5 Q Street, Suburb R; L Street, Suburb M; 2 Q Street, Suburb R; 2 S Street, Suburb T; 1 S Street, Suburb T; U Street, Suburb R; V Street, Suburb M; 2 AA Street, Suburb T; 3 AA Street, Suburb T; 2 CC Street, Suburb T; 1 AA Street, Suburb T and 1 BB Street, Suburb T; and
(b)his interests in C Pty Ltd, D Pty Ltd, E Pty Ltd and the C Family Trust; and
(c)any funds held in all bank accounts in his sole name; and
(d)any furniture, household contents, motor vehicles and all other chattels currently in his name or possession; and
(e)his superannuation entitlements with Super Fund 2; and
(f)all other proprietary interests of whatsoever nature currently in his possession or under his control.
11.The applicant and respondent shall each do all acts and things necessary, including signing all necessary documents, so as to give full force and effect to the implementation of this order and, in the event that either party refuses or neglects to comply with any provision of this Order within 14 days of a written request to do so by the other party, then a Registrar of the Federal Circuit and Family Court of Australia (Division 1) at Brisbane, is hereby appointed, pursuant to s 106A of the Family Law Act 1975 (Cth), to execute all documents in the name of that party and to do all acts and things necessary to give validity and operation to this Order and its implementation.
12.The transferee party shall prepare any documents necessary to give effect to the provision of this Order at that party’s cost and shall further be responsible for the payment of registration fees (if any) in relation to the transfer of any properties into that party’s name.
13.Any duty payable on transactions arising from this Order or any documents executed pursuant to this Order shall be paid by the transferee party.
14.The parties shall comply promptly with all requisitions issued by the Office of State Revenue, Land Titles, Main Roads Department and any other Government Department in relation to any document executed or transacted pursuant to, or put into effect, the terms and conditions of this Order.
15.Both parties have liberty to apply to the Court on the giving of seven (7) days’ notice in writing for the interpretation and/or enforcement of the terms and conditions of this order and for consequential orders.
AND IT IS FURTHER ORDERED THAT:
16.In the event that any party seeks an order that another party pay the costs of and incidental to the Third Further Amended Initiating Application sealed 12 August 2024:
(a)any such party shall, within twenty-eight (28) days of the date of this Order, file and serve:
(i)any affidavit necessary to support such application; and
(ii)written submissions in support of such application for costs; and
(b)the party against whom an order for costs is sought shall, within a further fourteen (14) days thereafter, file and serve:
(i)any affidavit necessary for the determination of any such application for costs; and
(ii)any written submissions in answer to the submissions filed and served by the party seeking an order for costs; and
(c)the party seeking an order for costs shall, within seven (7) days of being served with the submissions relied on by the party against whom an order for costs is sought, file and serve any further written submissions, strictly in reply, to the submissions served by the party against whom an order for costs is sought,
and any such application for costs shall be considered in Chambers.
17.Save as is otherwise ordered herein, no party is permitted to use any document provided to them in the course of this proceeding for any purpose other than this proceeding or any appeal in respect of this order.
18.All outstanding applications are otherwise dismissed and removed from the list of cases requiring finalisation.
IT IS NOTED THAT:
A.There is no Court known by the name “Federal Circuit and Family Court of Australia”.
B.The design of the seal affixed to this order issued by the Federal Circuit and Family Court of Australia (Division 1) has been determined by the Attorney-General pursuant to the undated Federal Circuit and Family Court of Australia (Seal) Determination 2021 signed by the Attorney-General.
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 Henson & Marlin has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HOGAN J:
These proceedings require the determination of those property settlement orders, if any, which are just, equitable and appropriate in all the circumstances with respect to the property of the parties.
The parties are in dispute about whether the circumstances here are such as to persuade the court that it is just and equitable for any order adjusting their interests in property to be made: the applicant contends that, having regard to the findings that she asserts should be made, the court will be so persuaded; the respondent contends that, having regard to the findings that he asserts should be made, the court will not be so persuaded.
In the event that the court is persuaded that it is just and equitable that any orders be made adjusting the interests of the parties in property, the applicant contends that those orders which are just and equitable are orders which would see her receive property valued at 40 per cent of the total nett value of the property of the parties, whilst the respondent contends that those orders which are just and equitable are orders which would see the applicant receive property valued at 20 per cent of the total nett value of the property of the parties.
Despite disagreeing about many issues, the parties agree that they separated finally on 15 February 2019, at which time their three children – then 12 year old X[1], 7 year old Y[2] and 5 year old Z[3] – continued to live with the applicant in the formerly shared residence at 1 DD Street, Suburb FF. They also agree that, in 2020, X moved to live with the respondent, whilst the girls have continued to live with the applicant.
[1] Who was born in 2005.
[2] Who was born in 2011.
[3] Who was born in 2013.
Before turning to consider whether it is just and equitable for any orders to be made adjusting the interests of the parties in property, it is relevant to note that these parties have previously been the subject of orders adjusting their interests in property.
The first relationship
These parties first commenced a relationship in about mid to late 2001. At that time, the respondent’s child from a previous relationship (Mr TT, who was born in 2001) was either yet to be born or no more than a few months of age. The applicant said that the cohabitation commenced in 2002; the respondent said it commenced in 2003; the parties’ first child together, X, was born in 2005.
It seems uncontroversial that, during this relationship:
(a)the parties lived in real property owned by the respondent; and
(b)the applicant’s property at LL Street remained unoccupied until about 2005 and the applicant met the costs of its retention from the income she earned until she stopped working outside the home for remuneration in 2005, a couple of months before X was born; and
(c)the respondent operated his business and purchased real property and a vehicle without any financial contribution from the applicant and in his name only or in the name of an entity under his control; and
(d)the parties did not buy any property together and maintained separate bank accounts; and
(e)the respondent paid all outgoings on real property he owned (including rates, telephone and electricity costs) and paid for all maintenance and any renovations to the same; and
(f)until she ceased working for remuneration outside the home shortly before X was born, the applicant applied money she earned to purchasing groceries, whilst the respondent also contributed to the purchase of the same; and
(g)after the applicant ceased working for remuneration outside the home and following X’s birth, the respondent set up an account for the applicant’s use and paid her $500 per week – which she applied to pay the costs of the LL Street property, her personal expenses, X’s expenses and for the purchase of most of the groceries for the family.
The parties separated for the first time in November 2006.
In September 2007, the applicant commenced proceedings pursuant to Part 19 of the Property Law Act 1974 (Qld), which then regulated de facto property settlement proceedings. These proceedings were finalised by orders made by consent on 18 November 2008.
It is accepted that the parties complied with the November 2008
2018orders, which required the respondent to pay the applicant the sum of $350,000; in addition, she retained the real property located at LL Street and her entitlement to superannuation, whilst the respondent retained all other property owned by him either personally or by corporate entities under his control.Before addressing whether it is just and equitable that any orders adjusting the interests of the parties in property are made, it is useful to consider the issue of the parties’ credit.
The credit of the parties
When cross-examined by Counsel for the respondent, the applicant accepted the propositions that, in relation to the funds provided to her by the respondent (whether the initial $500 per week or the later $1,000 per week), there had not been any stipulations on how she spent the money and that she had been free to do with it as she pleased; she also agreed that she was free to use the respondent’s credit card in a “tap and go” way and that her use of it had not been limited to using it in emergencies.
I accept that this evidence contradicts the evidence the applicant gave at paragraph 102 of her trial affidavit where she said, amongst other things, that “[Mr Marlin] gave me a credit card in his name to use in case of an emergency.”
However, in determining what to make of this apparent inconsistency, it is also relevant to note that the applicant’s evidence in the following paragraphs of the same affidavit is as follows:
[103] I utilised the credit card to pay shortfalls, given the expenses listed above that I was expected to pay from the weekly allowance of $1,000 [Mr Marlin] provided. This would result in [Mr Marlin] getting angry at me and saying that I should not use the credit card as people would be able to see what I was buying and doing.
[104] I was always worried about using the credit card as it would result in me having to answer to [Mr Marlin]. He would pick apart the statement and criticise me for buying things for the children he said were not needed.
Given this context, I am not as concerned about the difference in the applicant’s responses when cross-examined as I might otherwise have been; after much reflection, I am not persuaded that, in giving the evidence she did, the applicant was trying deliberately to mislead the court.
Despite this conclusion, I have still reflected carefully about the entirety of the applicant’s evidence, particularly given her admission that, during the parties’ second de facto relationship, she continued to claim Centrelink payments to which she was not entitled; I have ruminated about whether such conduct persuades me that I should simply reject the entirety of her evidence on the basis that it is the evidence of a person quite prepared to act deceptively over a relatively significant duration. After much reflection, I have concluded that I am not persuaded to do this; despite her conduct in this regard, I generally accept the applicant’s evidence as being truthful and, where it conflicts with his evidence, prefer it to that given by the respondent for the reasons expressed throughout these Reasons.
I accept the thrust of the submissions made by Counsel for the applicant to the effect that the respondent’s evidence was not reliable and was, on occasion, false. I have no hesitation at all in concluding that the manner in which he completed and affirmed various Financial Statements relied on in the course of the proceeding was deliberately to obfuscate, rather than illuminate, his actual financial position; he failed to disclose documents or provide information to the applicant about his decision to deal with property or the sale proceeds of the same and he deliberately attempted to hide the existence of sale proceeds by giving false evidence about the use to which such proceeds had been put.
I have concluded that the respondent lacks candour and has deliberately been dishonest because of the following matters, which I consider were established during his cross-examination:
(a)despite having affirmed, in a number of Financial Statements prepared during the proceedings and filed on his behalf, that he had read Rule 6.06 of the Federal Circuit and Family Court of Australia Rules 2021 (Cth), he admitted not having done so; and
(b)the contents of some of his Financial Statements were either false or non-responsive; and
(c)despite giving oral evidence about a purported conversation he said he had had with the applicant in 2010 about them keeping their finances separate, such alleged conversation was not mentioned anywhere in his affidavit; and
(d)despite giving detailed first-person evidence, in his trial affidavit[4] (affirmed 23 August 2024 and sealed the same day) about the conversation he alleged he and the applicant had had in 2011 – during which he alleged they agreed that they would keep their finances separate – he was simply unable to recount that alleged conversation with a similar degree of precision when asked to do so orally; and
(e)despite being aware of his obligation to disclose his disposition of property, he deliberately failed to discharge that obligation on more than one occasion in various Financial Statements he affirmed and relied on in these proceedings; and
(f)despite being aware of his obligation to make full and frank disclosure about relevant matters during these proceedings, he instructed solicitors he engaged to act for him in the sale of real property not to disclose a copy of the contract for the sale of that property to the applicant’s legal representatives; and
(g)he instructed the solicitors engaged to act for him in the sale of certain real property to advise the purchasers’ solicitor that he could not comply with the requirement to have the applicant’s caveat removed – which conduct resulted in them ceasing to act for him in the matter because the applicant’s solicitor had advised them that the applicant would ensure that the caveat was removed so that settlement of the sale could proceed; and
(h)whilst his evidence included the positive assertion that he had not signed an enrolment form for the parties’ children to attend the school they attended during the parental cohabitation, it was clear that this was the case for two of the three children; and
(i)when asked during his cross-examination whether, when they commenced their second relationship, he had been hoping for a permanent relationship, he said that he had not been – which I simply reject as entirely implausible given that, very early on in this second relationship, he gave the applicant the use of his credit card to meet her and X’s expenses and they took steps to conceive Y, whose birth was, I accept, the result of a planned pregnancy.
[4]Affidavit of the respondent sealed 23 August 2024, paragraph 49.
In addition, during his cross-examination, the respondent:
(a)admitted he had failed to disclose his 2020 sale of the property at UU Street, Suburb VV (the UU Street property) in his Financial Statement filed in September 2020 in the proceedings; and
(b)admitted that, despite affirming a Financial Statement on 15 September 2020, he failed to make any reference to the cheque for $624,643[5] which his conveyancing solicitors had told him before then that they continued to hold on his behalf following the settlement of the sale of the UU Street property – and which he allowed them to continue to hold until they couriered it to him in 2020; and
(c)admitted that, despite the information in the preceding subparagraph, he had asserted in his 15 September 2020 affidavit that the sale proceeds had been paid to the bank to reduce debt: that is, despite knowing in mid-2020 that a cheque drawn to him in the amount of $624,643 was held by his conveyancing solicitors, his evidence in September 2020 included the positive assertion that the sale proceeds (after payment of costs) had been paid to the bank to reduce debt; and
(d)accepted he did not inform the court when the matter was before it on 17 November 2020 that the funds had not in fact been used to reduce debt, although he asserted that he was not aware that he had to; and
(e)said, when it was suggested to him that there would have been nothing preventing him from depositing the cheque for $624,643 into a bank account, that he had to open an account in his own name because he did not have one – although, when it was suggested to him that he had had a bank account in his own name, he said “not with NAB I didn’t”; and
(f)said that he had known the $624,643 was there, but had not collected the cheque because he had been busy and not around to collect it – he asserted that he was the only person who lost from his decision not to collect the cheque and deposit it into an account because he had to pay interest on his loans; and
(g)when asked about the sources of the gross weekly income he had asserted, in his June 2021 Financial Statement, that he received (namely, $16,303), he initially said it would have been rental income and from his business – however, when it was pointed out to him that he had asserted in that document that he received no income from the business, he said that the source of his weekly income was rent; and
(h)said that the properties at WW Street and 2 GG Street were unencumbered – although the evidence he gave in his affidavit (sealed 13 September 2024) included that those properties were the subject of a first registered mortgage in 2024, albeit that the “formal Loan Approval” exhibited to that affidavit seemed to me to suggest that the property at 2 DD Street was the property offered as security for specified borrowings.
[5] Rounded.
I simply do not accept the respondent’s evidence that he was not aware of his obligation to advise the court, via the accurate completion of a Financial Statement, of the sale of any assets by a company in which he had an interest. I am easily persuaded that it is much more likely than not that, during the proceedings, the respondent was made aware of his duty to give full and frank disclosure of all information relevant to the proceeding in a timely manner; his conduct vis-à-vis the sale proceeds he received from the disposal of the UU Street property leaves me in no doubt about the extent to which he was prepared to go in the past to attempt to ensure that the applicant did not become aware, in a timely way, of his access to funds – nothing in his evidence when cross-examined suggested that his attitude in this respect has changed.
The evidence given by the respondent when asked about the parties’ approach to having their second and third children was also entirely unconvincing; this and his repeated responses that “it was her choice” when questioned about:
(a)the conception of their two youngest children; and
(b)the applicant’s cessation of paid employment outside the home in the lead up to Y’s birth and thereafter to enable her to care for Y and X; and
(c)the applicant taking on the responsibility of managing the children’s medical needs and purchasing presents for members of the extended family,
easily persuades me that he was quite prepared to say whatever he thought would advance his case that the parties had agreed to live a life of complete financial independence.
A further appreciation of the respondent’s general approach to providing accurate and truthful information to those with whom he engages can be seen in the information he provided to XX Business in his application for funding from it in 2023. I accept that, despite accepting that the girls were his “dependants”, he asserted on his application for funding that he had no dependants. Whilst his evidence about this falsity was that the application had been completed by a broker, the respondent agreed that he had signed the application and that he was aware of the obligation to be truthful in the information he provided to XX Business.
Having regard to the matters discussed above and elsewhere during these Reasons, I am easily persuaded that the respondent would say anything in these proceedings that he thought would assist his case.
Further discussion about aspects of the respondent’s conduct which have also contributed to my overall conclusion that he is simply not a witness of truth is found later in these Reasons.
IS IT JUST AND EQUITABLE THAT ANY ORDERS ARE MADE TO ADJUST THE PARTIES’ INTERESTS IN PROPERTY[6]
[6] Stanford v Stanford (2012) 247 CLR 108.
I accept that:
(a)the court must not conflate the separate question of whether, following the breakdown of a de facto relationship, it is just and equitable to make an order adjusting the interests of parties in property[7] with the separate issue of what order should be made if it is determined that it is just and equitable to make any order adjusting the interests of parties in property[8]; and
(b)the court must not assume that, following the breakdown of a de facto relationship, it is just and equitable that an order be made adjusting the parties’ interests in property – the mere fact of the breakdown of the relationship does not establish the requirement of satisfaction that such an order is, in all the circumstances, just and equitable; and
(c)it should not be assumed, from the breakdown of a de facto relationship, that the parties’ interest in property should be adjusted to be anything other than their existing legal and equitable rights; and
(d)the circumstances of the parties’ relationship (including the form, nature and characteristics of the same) are clearly relevant and important to the exercise of the discretion involved in determining whether, in the circumstances of the case, it is just and equitable to make an order adjusting the interests of parties in property; and
(e)the court must have a principled reason for interfering in the existing legal and equitable interests of the parties and whatever may have been their stated or unstated assumptions and agreements about property during the existence of their de facto relationship; and
(f)claims made in proceedings such as this are not to be answered by pointing to moral obligations – rather, the rights of the parties are to be determined according to law and not by reference to other non-legal considerations; and
(g)an applicant in proceedings such as this bears the onus of establishing that it is just and equitable for an order to be made altering the parties’ existing legal and equitable interests in property.
[7] Family Law Act 1975 (Cth), s 90SM(3).
[8] Ibid, s 90SM(4).
It is with such matters firmly in mind that I turn to consider the circumstances of the parties’ second de facto relationship.
The second relationship
It is uncontroversial that, after the November 2008
2018orders were made, the parties recommenced a relationship and embarked upon a second de facto relationship. What is controversial is when they started this de facto relationship and the bases upon which they started to live together.I accept the applicant’s evidence about the way in which the parties started their second de facto relationship and that, in 2009, they decided to give their relationship another chance. I accept that they initially started to live together again in 2009 in the applicant’s LL Street property (which was closer to X’s school than the respondent’s Suburb FF property) and that they subsequently lived in this property during the week and at the respondent’s Suburb FF property on the weekends. I accept they moved to live permanently in the Suburb FF property shortly after their second child, Y (now 13 years of age) was born in 2011.
The asserted conversations
The respondent’s evidence included that, when the applicant moved to live with him in 2011, he had discussions with her at this time which he recalled. His evidence about the conversation was as follows:[9]
….I said to her What’s the plan, what's happening with your work. She replied I don't think I'm going to go back to work. I'm going to be a stay-at-home mum. I said what about bills, life and living? She replied I just want to be a stay-at-home mum. I said well that's your decision to be a stay-at-home mum, as long as you understand that everything we have is separate from here on. I'll support you and the children while you live here as needed. I recall responding to [Ms Henson] We’ve been through this all before and ended up in Court with big legal fees. An order was made that I make a payment to you which I did. I never want to do that again. If you move to live with me, we're going to live separately financially. I'll support you and the children as needed, but other than that, what's yours is yours and what's mine is mine. I need you to agree to that. [Ms Henson] replied No problem, I agree.
[9] Affidavit of the respondent sealed 23 August 2024 at paragraph 49.
When cross-examined, the respondent accepted that, in this affidavit (affirmed only a few weeks before the trial), he had used italics to indicate to the court that he had a specific recollection of the words that had been spoken between the parties 13 years earlier. However, when asked what the conversation was and to recount it, he said that he could not remember it specifically – basically the conversation was that what was his was his and what was hers was hers and they agreed and moved on. I consider he was unable to provide a convincing explanation for why his recollection of the conversation he alleged to have occurred in 2011 had been clear and certain enough to enable him to particularise it word for word when he affirmed his trial affidavit and so poor when asked about it only a few weeks later.
Given his inability to recount orally the conversation he said he had had with the applicant in 2011 with the same precision as accompanied its recitation in an affidavit affirmed only a few weeks before he was cross-examined about it, I simply do not accept the respondent’s evidence about the alleged conversation.
As already noted, the respondent also gave oral evidence about a conversation he asserted had taken place in 2010, during which he said he and the applicant had discussed that their financial arrangements were to be kept separate and that she was to have her finances and he would have his finances; when asked if he recalled the words that had been said, he said that he did and that they were that finances would be kept separate, what was his was his and what was hers was hers. Again, as already noted, the respondent’s affidavit does not contain any evidence about this asserted conversation – an omission which I regard as particularly significant given that the respondent’s case was that no orders should be made adjusting the parties’ interests in property because they had specifically agreed that they would keep their finances separate and that his financial responsibility would be limited to providing for the applicant and their children only when they lived with him. I am unpersuaded that the parties ever had a conversation in the terms recounted by the respondent.
I accept the applicant’s evidence to the effect that she and the respondent had many discussions about how they would arrange things during their second de facto relationship and the thrust of the same. I accept her rejection of the respondent’s contention that, during a conversation he said had occurred on 30 October 2010, they agreed that they would keep their finances separate. I accept her evidence that they had agreed that she would be the children’s primary carer (which each thought was important and a priority as both placed great value on their family) and he would provide for all of them financially through his work. I accept that the applicant subsequently gave up her paid employment a couple of months before Y was born so that she could care for the parties’ children.
I accept the applicant’s evidence that, during their discussions, the respondent did not raise with her any concerns he might have had about “bills, life and living” and that, to the contrary, he had been very proud and often commented how fortunate the family was and that they would never want for anything.
I reject the respondent’s evidence that he and the applicant agreed at any time that they would “live separately financially” or that everything they had would be separate from there on or that being a “stay at home mum” was solely a decision for the applicant; I also reject the respondent’s evidence that he and the applicant agreed at any time that “what’s yours is yours and what’s mine is mine.” I accept the applicant’s evidence to the effect that the content of the discussions between them was to the effect that the property “was all ours” and that she had never agreed with the respondent that they would keep their finances and assets separate. I accept the applicant’s evidence to the effect that she often queried why she could not have a credit card with her name on it or have her name on the title to real property or at least be on the title jointly with the respondent and that, at such times, the respondent reassured her by telling her that she had nothing to worry about and “it was all ours”; I also accept as likely that, given such reassurances, the applicant proceeded on the basis that, irrespective of the name on the title to property, it was regarded as “belonging” to the family unit.
What happened in a general sense from cohabitation in 2009 until the February 2019 separation?
I accept that, from 2009 until the February 2019 separation:
(a)early on, the respondent provided the applicant with a credit card in his name, on the basis that she could use this to meet her personal expenses and X’s expenses; and
(b)the respondent continued to operate his business and continued to purchase real property and other property in his name or the name of entities under his control without any financial contribution by the applicant to such purchases; and
(c)the parties did not acquire any real property or other property together; and
(d)the parties did not have any joint bank accounts; and
(e)the respondent initially provided the applicant with $500 per week (which later increased to $1,000 per week) which she was free to spend as she chose but which she applied to meet the family’s day-to-day living costs; and
(f)the respondent paid all the outgoings on property he owned personally and caused the entities under his control to pay the same expenses in relation to real property owned by them; and
(g)the applicant was the three children’s primary carer; and
(h)the parties managed their lives in the same way that they had managed them during their first de facto relationship, with the applicant being primarily responsible for meeting the homemaker and parenting needs of the family and the respondent providing for the family’s financial support; and
(i)what I find to be the parties’ joint decision:
(i)to have two more children together; and
(ii)for the applicant to cease paid employment outside the home to prioritise attending to the three children’s needs
enabled the respondent to continue to operate his business and to acquire additional property without distraction, secure in the knowledge that the applicant was attending to all to the homemaker and parenting obligations.
(j)it suited the respondent that the applicant was out of the paid workforce and at home caring for him, the children and the house and I reject his evidence to the contrary.
Further discussion and conclusions about whether it is just and equitable to make an order pursuant to s 90SM of the Act
I do not accept the respondent’s contention that the fact that, after their separation in 2006, the parties entered into a consent order pursuant to the legislation which then governed parties’ rights following the breakdown of de facto relationships would mitigate against the court being satisfied, in all the circumstances, that it is just and equitable to make an order under s 90SM of the Act. I have already expressed my findings about the conversation the respondent asserted to have occurred in 2011 and my rejection of his assertion that the applicant agreed with him at any time that, during their second de facto relationship, they would approach it on the basis of “what’s mine is mine and what’s yours is yours.”
Any thought that the respondent’s almost complete failure to provide financially for his two youngest children after the breakdown of the parental relationship in February 2019 is conduct which is consistent with the purported agreement between the parties that he only provide for the applicant and the children during the cohabitation is quashed once it is appreciated that, after the breakdown of the parental relationship in 2006, he did not pay any child support to the applicant for X. Whilst such conduct may well be a manifestation of how the respondent views his obligations, I do not regard it as providing further support for the conclusions he sought be made in relation to the purported parental agreement that “what’s mine is mine and what’s yours is yours.”
I am satisfied that, in all the circumstances, it is just and equitable an order altering the interests in property owned by the parties is made pursuant to s 90SM(1)(a) of the Act. I arrive at that conclusion because:
(a)as already noted, I do not accept that the parties had any conversation in which it was agreed between them that:
(i)they would keep their finances separate; and/or
(ii)each would regard themselves as proceeding on the assumption that, irrespective of the duration of their relationship and whether or not it was productive of more children, their future finances would reflect the maintenance of separate finances and the property that each owned at the commencement of their cohabitation or acquired in only their name after cohabitation resumed; and/or
(iii)if their relationship ended, each would be left with only the property to which each had directly financially contributed.
(b)I do not accept that the parties had any conversation during which it was agreed, inferentially, between them that:
(i)the respondent’s obligation to provide financial support for the applicant and the children would cease on the breakdown of the de facto relationship; and/or
(ii)the impost on the applicant of birthing the girls and caring primarily for them and X (and when he visited, Mr TT) and undertaking the primary homemaker and parenting contributions over the near decade of shared cohabitation would be that her financial position would, in essence, remain static (because the consequence of this for her was that she was deprived of the financial capacity to acquire any additional property) whilst the respondent would be free to continue to build a financial future for only himself; and
(c)I accept the applicant’s evidence to the effect that, during various conversations between them, the respondent made comments to the effect that what was his property was her property and what was her property was his property and that, irrespective of the names on the title to real property, the property was “ours”; and
(d)I consider that the applicant joined with the respondent in planning to have two more children together, ceased her paid employment outside the home and made the homemaker and parenting contributions that she did during the nearly 10 year cohabitation in the context of the respondent’s comments to her about how he regarded the property; and
(e)I accept that, as they had done during their first de facto relationship (the breakdown of which culminated in the Supreme Court of Queensland making property adjustment orders by consent), the parties continued to maintain separate bank accounts and to have sole legal title to various property; and
(f)I consider that, during the near decade of cohabitation, the applicant made indirect financial contributions to the respondent’s continued operation of his business and acquisition of real property via her primary care of the three children and discharge of the homemaker contributions in a manner that enabled him to continue to focus, without distraction, on the operation of the business and acquisition of further wealth; and
(g)whilst the parties did not have any joint bank accounts:
(i)the income generated by the respondent’s business was shared in that it was the source of the funds provided by the respondent to the applicant and the source of funds he otherwise used to meet other household expenses and acquire property; and
(ii)the respondent provided the applicant with $500 per week initially (and, later, $1,000 per week) which, I accept, she was able to use for any purpose she wanted – but which she chose to apply to the financial support of the family by using it to pay for household expenses: this, together with her use of a credit card (in the respondent’s name) to pay for household and children’s expenses amounted, in my view, to these parties joining together financially to support the family unit they had created; and
(h)whilst the applicant accepted that the Trust controlled by the respondent made no distributions to her during the existence of the de facto relationship, there is no evidence that the Trust made any distributions at all during this time; and
(i)whilst I accept that, during the de facto relationship, the applicant continued to receive Centrelink benefits that were inconsistent with the existence of that relationship:
(i)the respondent did not challenge the fact of the existence of the de facto relationship other than in relation to the date on which he alleged the parties commenced cohabitation; and
(ii)I accept the applicant’s evidence about the circumstances surrounding her continued receipt of the payments, the respondent’s knowledge of that receipt and the use to which she put the same.
(j)I consider that, notwithstanding the way in which they organised their financial affairs during their cohabitation:
(i)the express and implicit assumptions that underpinned the parties’ existing property arrangements were that the applicant would assume primary responsibility for the home and the children whilst the respondent would assume responsibility for the financial support of the family unit and that, in the pursuit of a joint endeavour which, at its commencement, both parties hoped would continue into the future, the property owned was “theirs”; and
(ii)the parties enjoyed the common use of property – a circumstance which ended when their de facto relationship broke down; and
(iii)the express assumptions underpinning the property arrangements which were affected during their de facto relationship were brough to an end by the cessation of the mutuality inherent in that relationship.
(k)in the five years and eight months since the February 2019 parental separation:
(i)I consider the applicant has continued to make indirect financial contribution to the respondent’s operation of the business and his acquisition of property because, absent her complete discharge of the day-to-day obligations associated with caring for the girls (who were 5 and 7 years of age respectively at separation and who are now 11 and 13 years of age respectively), it is highly unlikely that the respondent would have been able, over this period, to devote himself to the operation of the business to the extent he reported to Mr OO[10] – in essence, the applicant’s 100 per cent care of the children has enabled the respondent to devote 100 per cent of his efforts to the ongoing operation of the business, the acquisition of real property and the accumulation of wealth; and
(ii)I consider that the respondent’s cashflow position has not been negatively affected by his obligation to pay periodic child support because, despite assessment, he has simply chosen not to meet that periodic obligation – instead, he has been free to use the overwhelming majority of the funds available to him from whatever source for whatever investment or other purpose he has chosen to prioritise over his primary obligation to provide for his children’s financial support, leaving the applicant to meet all of the younger children’s costs, other than those associated with accommodating them.
WHAT ORDER IS APPROPRIATE?
[10]The single expert witness appointed to value the parties’ interests in the companies and the trust under the respondent’s control – at paragraph 5.11 of his report, he noted that the respondent had advised that he currently worked approximately 11 hours a day, 6 days per week.
The competing proposals
The applicant[11]
[11]Third Further Amended Initiating Application sealed 12 August 2024 as amended by the submissions made on her behalf at the conclusion of the trial.
The applicant ultimately proposed that she receive property and superannuation with a combined value representing 40 per cent of the total value of the property and superannuation interests of the parties. She sought, in particular, to retain her household furniture and effects, her superannuation entitlement with Super Fund 1 and the real property located at LL Street, Suburb MM.[12] She also sought to receive:
(a)real property located at 1 DD Street, Suburb FF[13], free of any encumbrance; and
(b)real property located at 2 DD Street, Suburb FF[14], free of any encumbrance; and
(c)real property located at 1 GG Street, Suburb FF[15], free of any encumbrance; and
(d)real property located at 2 GG Street, Suburb FF[16], free of any encumbrance; and
(e)such cash sum as necessary, when added to the value of the other property and superannuation she would receive, to see her receive property and superannuation valued at 40 per cent of the total nett value of the property and superannuation entitlements of the parties.
The respondent[17]
[12]more particularly descried as Lot … on RP ..., Title Reference ....
[13] more particularly descried as Lot … on RP ..., Title Reference ....
[14] more particularly descried as Lot … on RP ..., Title Reference ....
[15] more particularly descried as Lot … on RP ..., Title Reference ....
[16] more particularly descried as Lot … on RP ..., Title Reference ....
[17]Amended Response to Initiating Application sealed 23 August 2024 and the alternative position advanced during the course of submissions made at the end of the trial.
As already noted, the respondent’s primary position was that the application be dismissed. He has been wholly unsuccessful in advocating for this position.
During the course of the submissions made at the end of the trial, Counsel who appeared for the respondent submitted that if, contrary to his primary position, the court was persuaded that it is just and equitable to make orders altering the interests of the parties in property:
(a)any orders to be made should not be made in terms which accorded the applicant property valued at 40 per cent of the total nett value of the property of the parties; and
(b)instead the orders made should be in terms which would see the applicant receive property valued at 20 per cent of the total nett value of the property of the parties; and
(c)the orders should be made in terms which would see the applicant retain the LL Street property and all other property she currently owns and require the respondent to pay her, within 90 days of the making of the order, whatever cash sum is required to see her receive property valued at 20 per cent of the total nett value of the property of the parties.
That is, the respondent opposed the transfer of any real property to the applicant and contended that he retain all real property he currently owns in his own name, or which is owned by entities under his control. Consistent with this approval, he did not seek orders for the sale of any of the real property owned by him personally or by any entity under his control.
The respondent’s attitude to disclosure, his conduct and some further credit findings
Before determining the parties’ respective contentions about whether certain items should be included or excluded for the purpose of determining the total nett value of the property of the parties and the value to ascribe to certain items of property, it is, I think, useful that I record further findings about the respondent’s attitude to disclosure, conduct and credit. This is because I am persuaded that the demonstration of such attitude has impeded the task of confidently concluding that all of the respondent’s property is before the court and that his financial circumstances are truly as the available evidence reveals.
I have been easily persuaded that it is much more likely than not that the respondent has systematically failed to disclose documents he should have disclosed to the applicant in compliance with the obligation of full and frank disclosure imposed on litigants in this jurisdiction.[18] I have also been easily persuaded that it is more likely than not that much of the content of the various Financial Statements he has affirmed during the course of these proceedings is either deliberately false or has been provided with such disregard for the accuracy of the same as to render it virtually useless in assessing his true financial position at any given time.
[18] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), Rules 6.01, 6.03, 6.06.
For example:
(a)in his June 2021 Financial Statement[19], the respondent asserted that NIL property had been disposed of in the 12 months before the separation and since then – but, when cross-examined, he admitted selling the UU Street property in 2020, said there was no reason why he had not included any reference to his disposal of this property in this Financial Statement and accepted that his disposal of it should have been noted in this Financial Statement; and
[19] affirmed 22 June 2021 and sealed 23 June 2021.
(b)in his September 2023 Financial Statement[20], the respondent:
[20] affirmed 28 September 2023 and sealed 28 September 2023.
(i)falsely asserted that he had read the relevant Rule about the duty of disclosure despite his evidence, when cross-examined, that he had not; and
(ii)repeated his false assertion that he had disposed of “Nil” property in the 12 months before the separation and since then; and
(iii)asserted that his average weekly personal expenditure was an estimated $271,671: when questioned about this entry, he said it was obviously a mistake and denied the suggestion that he had not cared what he wrote in the document – although the same entry was repeated in his most recent Financial Statement, prepared by different lawyers; and
(iv)failed to disclose the sale by C Pty Ltd (a legal entity fully owned and controlled by him[21]) of real property at YY Street, Suburb ZZ in 2022 and Motor Vehicle 1 for $420,000 in 2022; and
(v)asserted having weekly expenses for the children (such as for food, entertainment/hobbies and holidays) despite them not spending any time with him and him failing to pay child support as assessed.
(c)in his August 2024 Financial Statement[22], the respondent:
(i)falsely asserted that he had read the relevant Rule about the duty of disclosure despite his evidence, when cross-examined, that he had not; and
(ii)repeated his false assertion that he had disposed of “Nil” property in the 12 months before the separation and since then; and
(iii)repeated his assertion about the quantum of his average weekly personal expenditure; and
(iv)asserted that the amount of child support paid was $553 per week, despite not actually paying any of the child support as assessed.
[21] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), Rules 6.06(3)(c) and (g)
[22] affirmed 27 August 2024 and sealed 30 August 2024.
Even if I am wrong in rejecting the respondent’s evidence that he had taken care to ensure the accuracy of the Financial Statements before he signed them, his failure to rectify what he accepted included a very big mistake (that being a reference to his assertion about his average weekly expenditure) or to provide any credible explanation for his repetition of it despite having different solicitors persuades me that there is much force in the submissions made by Counsel for the applicant to the effect that the respondent’s approach to completing the Financial Statements he has filed in the proceedings has meant that the court has been denied the ability to assess his true financial position with any degree of accuracy.
Having regard to the contents of the Financial Statements, I also think there is much force in the submission that, in completing them in the manner in which he has (including when represented by different firms of solicitors) the respondent has manifested a deliberate intention to preclude the court from being able to fully appreciate his true financial position – for example, his most recent Financial Statement failed to disclose the existence of bank accounts in his name which were subsequently included in the Balance Sheet provided by Counsel who appeared for him[23] and he simply omitted to fill in any part of Part B at all.
[23] Exhibit 2.
I also consider that the manner in which the respondent:
(a)was prepared to affirm the completed Financial Statements he has filed in the proceedings; and
(b)failed to disclose relevant financial documents – as noted by Mr OO in his report and as summarised elsewhere in these Reasons; and
(c)approached the requirement that the property of the parties be valued – for example, deciding not to provide Mr PP[24] with access to the assets when he attended the business for the purpose of valuing the business inventory,
has prevented the court from being able to understand properly and assess fully his use of the funds available to him from his ownership of real property, operation of the business and complete control of the entities under his control since the February 2019 separation or to have confidence in the assessment of the same which has been possible in such circumstances.
[24] Who was appointed the single expert witness to value the inventory of the business and other property.
Further appreciation of the respondent’s overall attitude about the necessity to keep the applicant informed in a timely manner about relevant information can be seen in the manner by which she was informed about the fact of proceedings having been commenced by the ATO in relation to unpaid taxation liabilities. As I understand it, the respondent first disclosed the existence of this (and, possibly, the full extent of the liabilities) in an affidavit sealed 13 September 2024. Whilst this affidavit informs, amongst other things, that proceedings were served on 11 September 2024, it fails to provide any detail about matters such as when the possibility of proceedings being commenced was first raised. None of the actual documents of the ATO proceedings are exhibited to the affidavit.
Rather than the transparency which the application of the relevant Rules of court is intended, in the interests of justice, to produce, a deliberate obscurity attends the minutiae of the respondent’s financial affairs.
The respondent’s evidence about the sale of the UU Street property is illuminative to a proper appreciation of his determination to ensure that, since the February 2019 separation, the applicant has not been kept fully and frankly informed of his financial dealings in an appropriately timely manner.
The respondent’s evidence about the UU Street sale proceeds
I accept that, in a Financial Statement he affirmed on 13 September 2020, the respondent did not refer at all to the cheque in the sum of $624,643.88 which represented the nett sale proceeds from the sale of the UU Street property. However, in his affidavit sealed on 15 September 2020, he said:
Since separation I sold the property at [UU Street] [Suburb VV] for $715,000 with the sale proceeds after payment of costs paid to NAB to reduce debt.[25]
[25] Affidavit of the respondent sealed 15 September 2020 at paragraph 62.
The respondent denied, when cross-examined, that this aspect of his evidence was untrue.
However, the evidence he gave in an affidavit affirmed on 4 August 2021 (in which he first disclosed the existence of the bank cheque to the applicant, despite the sale of the UU Street property having occurred in 2020, and the settlement of the sale having occurred later in 2020) included that when the property was sold he believed that NAB was paid the balance of the sale proceeds and he was “surprised to receive an email from [AB Lawyers in] 2020 informing me that they held a cheque for me in the sum of $624,643.88 being the settlement proceeds.”[26] This evidence clearly establishes that:
(a)when he gave the evidence that he did in his September 2020 affidavit, the respondent knew that the UU Street sale proceeds, after payment of costs, had not been paid to NAB to reduce debt – but instead were held in the form of a cheque, drawn to him personally in the amount of $624,643.88, which was held by his conveyancing solicitors; and
(b)the respondent’s denial, when cross-examined, of the suggestion that he knew the assertion in his September 2020 affidavit was untrue is itself false.
[26] Exhibit 5.
The respondent’s evidence in his August 2021 affidavit about his dealings with the sale proceeds of the UU Street property also included that:[27]
(a)he did not take any steps to collect the cheque for $624,643.88 because he had been in two minds about what to do with the funds in circumstances where he was not expecting to have such ready access to them – one option was to apply the funds to works at the H Street property, whilst another option was to pay out Ms AC in respect of the property at 2 DD Street, which he had previously bought from her; and
(b)in 2020, he received an email from AB Lawyers advising him that they still held the cheque, and it was subsequently sent to him by courier; and
(c)in 2020, he opened an account with NAB in his own name (account ending in 81) and deposited the cheque to that account; and
(d)in 2020, the final instalment of $450,000 for the purchase of 2 DD Street provide from Ms AC was due – but he obtained an extension in relation to the same; and
(e)in 2021, he drew a cheque on his NAB account ending in 81 in the amount of about $624,000 with the intention of paying down the debt on the H Street property – but he held onto the cheque; and
(f)in 2021, he deposited the cheque for $624,000 to reduce the amount owing on one of the loans (ending in 78) for the H Street property.
[27] Exhibit 5.
When cross-examined about his evidence that he had taken no steps to collect the cheque from his solicitors because he was in two minds about what to do with the funds, the respondent said that: he did not remember being in two minds; the funds were always going to be used to pay down debt; there had only been one use for the cheque and that was to pay down the NAB debt. He could not provide any explanation for why his evidence in his August 2021 affidavit included the reference to the two options that it did and he said that he did not know why he had written that.
Whatever the true position, it seems to me that either the respondent’s evidence in the August 2021 affidavit is untrue or his evidence when cross-examined at trial about the “two options” aspect of his evidence is untrue.
Further, the respondent’s conduct after the cheque for $624,643.88 came into his possession seems to me to cast doubt on his evidence that he had no intention of hiding the funds received from the sale of the UU Street property from anybody.[28] Not only did he allow the funds to remain in cheque form in his conveyancing solicitor’s possession for approximately four months after they were available to him, he subsequently drew a cheque for about $624,000 – which he then held for a number of months before depositing it to pay down debt in relation to the H Street property. Nothing in the respondent’s attempt to explain this conduct – which was, in essence, that he did not know why he had not deposited the cheque for the time that he held it – dissuades me from the conclusion that it is much more likely than not that, in acting as he did in relation to the sale proceeds of the UU Street property, the respondent did all that he could to try and ensure that the applicant did not learn of the existence of the same or that funds were available and could have been applied to meeting, at the very least, the children’s necessary expenses.
[28] Affidavit of the respondent sealed 23 August 2024, para 118(e).
I also think it highly likely that the respondent only banked the cheque because his conveyancing solicitors advised him:
(a)on 10 December 2020: that it was possible that the funds would be rendered as unclaimed and the cheque cancelled; and
(b)on 16 December 2020: in the correspondence which accompanied the cheque when couriered to him, that he should bank the cheque as soon as possible and failing to do so would see ANZ cancel it and send the funds to the Public Trustee.
Any residual thought that the respondent’s failure to discharge his ongoing duty to provide the applicant with full and frank disclosure of all information relevant to the proceeding in a timely way was limited to the failure to provide her with information about the sale of the UU Street property, the subsequent receipt and consequent availability of the funds and his subsequent use of the sale proceeds is extinguished when regard is had to his approach to the attempted sale of the GG Street properties. This later conduct extinguishes any thought that the respondent’s approach to discharging his duty of full and frank disclosure of relevant information in a timely way, as exemplified by the UU Street transaction, is unique.
The attempted sale of 1 and 2 GG Street, Suburb FF: the contracts and the caveats
It is relevant to note that, on 31 August 2022, interim orders were made for the respondent to pay the applicant:
(a)the sum of $553 per week by way of spousal maintenance, to be paid a week in advance;[29] and
(b)the sum of $114,535 within 30 days of the date of the order, with such sum to be paid into the trust account of AD Pty Ltd;[30] and
(c)the sum of $290,051 within 60 days of the date of the order, with such sum to be paid into a bank account nominated by the applicant, by way of partial property settlement.[31]
[29] Order 1.
[30] Order 2.
[31] Order 3.
At the time the respondent attempted to sell the GG Street properties in 2023, he had not complied with the August 2022 order. The references below to the applicant’s anticipated receipt of funds from the sale of the 1 GG Street property is a reference to payment to be made to satisfy the August 2022 order.
I accept that the respondent put the properties at 1 and 2 GG Street, Suburb FF on the market in early 2023. I accept that the applicant caused caveats to be lodged on the title to each of these properties in early 2023. I accept that, by correspondence dated 8 June 2023, the respondent advised the applicant’s then solicitors that he was selling the 1 GG Street property so that he could pay her the money due to her under the August 2022 orders. I accept that, on 3 July 2022, the respondent’s financiers confirmed in writing that there would be sufficient funds available to pay the applicant the $404,586 she was owed pursuant to the August 2022 order.
I accept that the respondent did not advise the applicant until 12 July 2023 that he had a contract for the sale of the property at 2 GG Street and that he subsequently instructed his conveyancing solicitors not to provide her solicitors with a copy of the contract for the sale of that property.
I consider that the evidence establishes the following in relation to the attempted sale of the 1 GG Street property:
(a)on 12 July 2023:
(i)at 9:58 am: the applicant’s solicitors wrote to the respondent’s conveyancing solicitors (AB Lawyers), copied to the solicitors then acting for the respondent in these proceedings, to provide them with their trust account details in anticipation of receiving a payment following the sale of the property; and
(ii)at 11:06 am: AB Lawyers wrote to the applicant’s solicitors, copied to the solicitors then acting for the respondent in these proceedings, to ask them to advise if they were attending to the lodging of the withdrawal of caveats for the properties located at 1 GG Street and 2 GG Street as soon as possible; and
(iii)at 12:39 pm: AB Lawyers wrote to the applicant’s solicitors, copied to the solicitors then acting for the respondent in these proceedings, referred to a telephone conversation between them earlier that day and asked that they “confirm” that the applicant would remove both caveats as previously indicated; and
(iv)at 12:39 pm: the applicant’s solicitors wrote to AB Lawyers, in terms which included, in essence, the following assertions:
(A)they had not indicated at any time that the applicant would remove both caveats; and
(B)they had first learned that day that the property located at 2 GG Street was being sold; and
(C)AB Lawyers had indicated that they would seek instructions about the sale of 2 GG Street and revert to them, but the email received had not included any information about this; and
(D)the correspondence which had passed between the firms had related to the sale of 1 GG Street; and
(E)they had not been provided with a copy of the contract or settlement statement for the sale of 2 GG Street and noted that, as there was no encumbrance over that property, they expected that there was no bank involvement (but, if that was wrong, they asked to be provided with any bank correspondence); and
(F)they requested that they be provided with a copy of the current settlement statement relating to the 2 GG Street property so that they could take instructions from the applicant.
(v)at 2:24 pm: AB Lawyers wrote to the applicant’s solicitors, copied to the solicitors then acting for the respondent in these proceedings, and said, after referring to their previous discussion, that:
(A)they were instructed not to provide a copy of the contract for the sale of 2 GG Street; and
(B)they reiterated the position that the applicant’s representatives had been told that there were sufficient funds from the sale proceeds of 1 GG Street to release the applicant’s caveatable interest; and
(C)if the applicant refused to instruct her representatives to release the caveats on 1 and 2 GG Street properties, she would be responsible for the contracts undoubtedly being terminated.
(vi)at 3:27 pm: the applicant’s solicitors wrote to AB Lawyers and, having referred to their earlier email, said that:
(A)the respondent had a statutory duty to make full and frank (and timely) disclosure of all assets; and
(B)the respondent had failed to comply with this duty because “today” was the first time that they had been told that the property at 2 GG Street was also being sold; and
(C)AB Lawyers had told them that afternoon that neither 1 GG Street nor 2 GG Street could settle unless the caveats were removed and they took from this that the properties were being sold to the same or associated interests; and
(D)AB Lawyers had advised them that afternoon that the respondent had instructed them not to provide the applicant with a copy of the contract for sale of the 2 GG Street property; and
(E)whilst they sought a copy of the settlement statement, they presumed this would not be provided to them on the respondent’s express instructions; and
(F)the applicant’s caveats protected her claim for a s 90SM adjustment in relation to the property pool and not just the property at 1 GG Street and, unless the respondent provided full and frank disclosure in relation to the two related sales, the caveats would not be removed and any penalty would be borne by only the respondent and not the applicant or the property pool.
(vii)at 4:00 pm: AB Lawyers wrote to the respondent after referring to emails from the applicant’s solicitors and:
(A)noted that their advice to him was that he was obliged to make disclosure to the applicant’s solicitors, but he had instructed them not to disclose details of the sale of the property at 2 GG Street; and
(B)noted that he was aware that this may result in the termination of the contracts for 1 and 2 GG Street and that the family law matter may return to court; and
(C)advised that they were proceeding on the basis that settlement would happen and they would do the work necessary for that and, if the contracts were terminated, would still invoice him; and
(D)suggested that he seek further advice about the family law matter as they foresaw that problems would escalate until things were sorted out in this regard.
(b)on 13 July 2023:
(i)at 2:49 pm: AB Lawyers wrote to the respondent in terms which, after referring to their recent discussions, advising that they had searched the caveat on 1 GG Street property and attaching a Notice of Action, said that:
(A)it would have been simpler if the applicant’s solicitors had told them that the caveat had been lodged and their intentions; and
(B)they agreed with him that, if the property at 2 GG Street was sold, the likely occurrence would be that the applicant’s solicitors would require all of the funds to be held in trust pending the settlement or resolution of the family law dispute with the applicant; and
(C)they noted the respondent was aware that, if the caveat was not removed on the property at 1 GG Street (and 2 GG Street), the contracts would be terminated by the purchasers; and
(D)they advised him to strongly consider resolving matters with the applicant but he considered it was beyond that.
(c)on 17 July 2023, at 9:44 am the purchasers’ representatives wrote to AB Lawyers in terms which:
(i)noted that settlement was to occur shortly and that, under Clause 7.2 of the contract, the respondent was required to remove the caveat and deliver the property free of encumbrances; and
(ii)informed that it had come to their attention that the caveator was ready, willing and able to release the caveat in accordance with consent orders but was unable to do so due to the respondent’s non-compliance with those consent orders; and
(iii)informed that they understood that the applicant was asking for additional information in relation to the sale of the 2 GG Street property (which was also dealt with in the consent orders) but the respondent was refusing to provide this; and
(iv)requested that the respondent comply with the consent orders and do all that was necessary to remove the caveat on or before settlement to enable the settlement to proceed; and
(v)asked that AB Lawyers confirm (by 5:00 pm on 17 July 2023) that the respondent had provided the caveator with the requested documents and would do all that was necessary to comply with his obligations under the contract; and
(vi)advised that the purchasers remained ready, willing and able to settle the contract.
(d)on 18 July 2023:
(i)at 1:10 pm: the applicant’s solicitors wrote to AB Lawyers in terms which:
(A)advised that the applicant had, at all times, been (and remained) willing to provide a release of the caveat in exchange for cleared funds representing her entitlement pursuant to an order made on 31 August 2022[32]; and
[32]Being an Order that, amongst other things, required the respondent, by way of partial property settlement, to pay the applicant the sum of $290,051 within 60 days, with the sum to be paid into a bank account she nominated.
(B)asked that they be told the date when settlement was due so that they could recalculate the interest on the principal amounts which the respondent had been ordered to pay to the applicant; and
(C)asked that they be advised when settlement was to occur so that they could attend to exchange the Release of the caveat for the cleared funds.
(ii)at 1:37 pm: AB Lawyers wrote to the respondent and, after referring to a conversation with him earlier that day and attaching the email they had received from the applicant’s solicitors a few minutes earlier, said that:
(A)their view was that he was obliged to settle the contract for the sale of 1 GG Street in the circumstances, as if he was in breach of the contract for sale he could be sued, and the Supreme Court could order him to complete the contract; and
(B)they understood his concerns about the applicant’s potential wishes; and
(C)they suggested that he consult with his family lawyer to resolve the matter.
(iii)at 4:19 pm: the purchasers’ representatives wrote to AB Lawyers in terms which asserted that:
(A)settlement was due to be affected shortly and they reiterated that their clients were at all times ready, willing and able to settle; and
(B)pursuant to clause 7.2 of the contract, the respondent was required to remove the caveat and deliver the property free of encumbrance; and
(C)the settlement had failed and the respondent was in default of the contract and they reserved all of their clients’ rights.
(iv)at 4:32 pm: AB Lawyers wrote to the respondent and, after referring to the email received from the purchasers’ representatives, said that:
(A)if it was proven that he was the cause of non-compliance with the caveat removal condition, he could be liable to for damages or an order for specific performance; and
(B)they noted his position and said that they would wait and see what happened.
(e)on 19 July 2023:
(i)at 10:07 am: AB Lawyers wrote to the purchasers’ representatives in terms which, after referring to their email, asserted that their asserted view of Clause 7.2 of the contract in relation to the respondent’s obligations was wrong; the settlement extension period had lapsed, and the purchasers were in default; and pursuant to Clause 9.1 of the contract, the respondent elected to terminate the contract and reserved his right under Clause 9.4 of the contract.
(ii)AB Lawyers wrote to the respondent about the sale of the 1 GG Street property and, after referring to their earlier conversation, asserted that:
(A)their advice was to bring the matter to a head by saying that, as settlement had still not been affected as of the extended time yesterday, the purchasers were in breach and the respondent terminated the contract; and
(B)this course was risky but was his only recourse and amounted to calling the purchasers’ bluff and if the purchasers issued proceedings, then he would need to defend them and/or reconsider his position.
(iii)at 12:21 pm: AB Lawyers wrote to the purchasers’ legal representatives to advise that they had been instructed to advise that they no longer held instructions in the matter and that they should feel free to contact the respondent directly.
The same assessment applies, in my view, to the consideration of the parties’ respective post‑separation contributions to the totality of the property – whilst the respondent continued to work in the business and continued to acquire real property through entities completely under his control, the applicant assumed complete responsibility for the children’s day-to-day care and, other than in relation to the costs of accommodating them, their financial support. To the extent that the value of the real properties owned by the respondent as at February 2019, whether personally or by entities under his control, contributed to his capacity to acquire further real property, via entities under his control, after the February 2019 separation, the applicant should properly, in my view, be regarded as having made indirect contributions to such post‑separation acquired property as well.
After all, following their separation, only the respondent retained the ability to make use of the property to which both he and the applicant had contributed (albeit in different ways) during their nearly 10-year cohabitation; only he was able to leverage his legal ownership of such real property in the pursuit of additional real property, whilst the applicant – unemployed as a consequence of the parties’ joint decision that she fulfill the non-remunerative aspects of their familial partnership – was left to continue her care of the children.
Further, after the February 2019 separation:
(a)the applicant’s complete assumption of the responsibility for the parties’ two youngest children freed the respondent from those responsibilities and enabled him to continue to pursue his business activities and the creation of wealth without interruption; and
(b)the respondent’s failure to pay child support in the amount assessed meant that those funds remained available to him for application in whatever manner he determined.
Given all of these considerations, I am not persuaded that orders which would see the applicant receive property valued at 20 per cent of the total nett value of the property of the parties adequately reflects her contributions over the nearly 10 year relationship and the more than five year period since the February 2019 separation. Whilst others may disagree – and noting the broad discretion entrusted to trial judges required to embark upon the exercise of evaluating and comparing the contributions made by the parties, particularly where for one party it is almost exclusively monetary and for the other party it is almost exclusively non-financial – I consider that the assessment which best acknowledges the myriad contributions made by each party to trial is one which would see the applicant receive property valued at no less than 35 per cent of the total value of the property of the parties.
This conclusion would see the applicant receive property valued at $8,490,324.50 and the respondent receive property valued at $15,767,745.50.
None of the orders proposed by either party will have any effect on the earning capacity of either party.[107]
Relevant s 90SF(3) considerations
[107] Family Law Act 1975 (Cth), s 90SM(4)(d).
The Applicant
The applicant, who was born in 1975 and who is currently 49 years of age, is employed in administration on a part-time basis around school hours. Her gross average weekly income is about $325; she has been receiving $553 per week by way of spousal maintenance payments as a consequence of an interim order made in August 2022 (although this payment will cease when final orders are made[108]) and she also receives about $495 per week nett from renting out the LL Street property. Whilst her income is currently modest, she may be able to receive much more significant income if, as she seeks, some of the real properties are transferred to her.
[108] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), r 5.01.
I accept the applicant’s evidence that she repaid $5,000 she had borrowed from a friend (Ms AP) to meet day-to-day living expenses using some of the funds paid to her by way of partial property settlement as ordered on 5 October 2023. I also accept that, from these funds, she paid an outstanding medical bill in the sum of $2,000 for X in about 2020 and that she repaid $5,326 of the money she had borrowed from Ms AG. I also accept that she has repaid some of the $173,142 debt originally owing to Centrelink as it now stands in the amount of $135,379.13.
The applicant already has property, including her entitlement to superannuation and the funds already received by way of partial property settlement, valued at $1,274,592.26. Given this, on the basis of the contribution assessment, she would have to receive property valued at $7,215,732.24. Her liabilities other than those taken into account as liabilities for the purpose of determining the total nett value of the property of the parties are $205,615.05, being: $103,693.21 by way of personal loan owing to AE Bank[109]; $5,996.35 owed to AQ Business for LL Street; $11,129 for unpaid rates relating to LL Street; $4,065.16 HELP debt; $33,610.23 owing to her litigation funder; $46,257.10 and $864 for the costs of the childrens’ extra-curricular activities.
[109]I have used the amount set out in the applicant’s Financial Statement sealed 12 August 2024 in preference to the amount set out in the Balance Sheet provide by Counsel for the applicant on 18 September 2024 as the $99,890 referred to there refers to the position as at 26 July 2024.
Given the respondent’s attitude to extinguishing liabilities, it is certain in my view that the respondent will be left to repay the school debt for which they are both liable, her debt to Centrelink (despite him sharing in the benefits of the same) and her debt to friends and family (the need for which I have found arose as a consequence of his conduct). Such liabilities are in the total amount of $240,875.09.[110]
[110] About 1 per cent of the total nett value of the property of the parties.
I generally accept the submissions made by Counsel for the applicant that I should not accept the respondent’s contention that the applicant’s conduct in causing caveats to be lodged over the title to a number of properties caused him to suffer loss. I accept that the applicant was willing to cause the caveat lodged on the title to 1 GG Street to be removed in order to facilitate the settlement of the contract the respondent had signed for its sale; I am not persuaded that the applicant’s conduct caused the failure of that sale.
I accept the applicant’s evidence about the care she provided to the respondent’s son, Mr TT, who relevantly spent time with the respondent every alternate weekend during the second tranche of the parties’ cohabitation. I accept she treated Mr TT in the same way she treated the other children and decorated his room with books and toys, so he felt like their home was his home also; I accept that, when Mr TT obtained employment, she dropped him to it and collected him from it and that she also transported him to and from his girlfriend’s house.
Given the respondent’s clearly demonstrated long-standing attitude to failing to provide financial support for his daughters (who are now 11 and 13 years of age respectively) by refusing to pay the child support he has been assessed to pay, his likely future failure to pay child support as assessed over the next seven years until both children reach majority is, I consider, a certainty. Given his demonstrated attitude to seeking to spend time with these children (which evidence I consider to be entirely self-serving), it is also certain that, as she has since February 2019, the applicant will continue to bear the entire responsibility for their day-to-day care.
The Respondent
The respondent, who continues to operate a business, was born in 1971 and is currently 53 years of age. Whilst his evidence included that he receives no income from the business, I note that Mr OO adopted an annual salary of $150,000 plus superannuation as the appropriate remuneration to reflect the respondent’s work in it. According to his most recent Financial Statement, his gross investment income before tax (being rent received by him from properties he owns personally) is $20,976.
The respondent’s evidence included that he applied borrowed funds to pay $37,838.50 to the single expert witnesses engaged in the proceedings. Other than the liabilities taken into account for the purpose of determining the total nett value of the property of the parties, he has credit card debt of $100,623 and owes child support in the amount of $143,027. Further, C Pty Ltd is liable for either $7,105 or $15,877 in relation to outstanding body corporate fees for the property at WW Street.
Given my findings about the respondent’s approach to providing full and frank information about his financial position, I find myself unable to discount the possibility that he retains undisclosed funds in an indeterminate amount for his benefit.
Some relevant s 90SF(3)(r) considerations
I accept the applicant’s assertion that, as at separation in February 2019, the property at 3 DD Street was leased and that she became aware, after the lease ended, that the respondent leased it to a friend for about 12 months, after which it was untenanted for about three years until it was sold as a consequence of the interim order made in October 2023. I also accept that he allowed the vendor of the 2 DD Street property to continue to live in it rent free for six months after paying her the final purchase instalment in 2023.
I note that, when asked whether he accepted that, as at the February 2019 separation, there had not been an issue with arrears of rates, the respondent said that he was not sure and did not have that information. I accept that, prior to the February 2019 separation, the business operated by the respondent was successful and profitable and generated sufficient funds to enable the financial support of the family of five (as well as meeting at least some of the costs associated with the support of the respondent’s son from a previous relationship). I also accept that, prior to the February 2019 separation, the respondent was able to “keep on top of” the payment of the rates and taxes in relation to the various real property owned either personally or through entities under his control.
As shown in the Balance Sheet provided by Counsel for the applicant, the total arrears of rates owing, as at trial, in relation to real properties owned by the respondent amounts to $163,420 and his personal land tax liability is $105,523.[111]
[111]$4,244 for 1 Q Street, Suburb R; $20,357 for 2 CC Street, Suburb T; $15,352 for 1 DD Street, Suburb FF, $34,416 for 2 AA Street, Suburb T, $41,726 for 3 AA Street, Suburb T, $40,977 for V Street, Suburb M, $1,987 in relation to 1 S Street, Suburb T, $963.00 for U Street, Suburb R, $601 for 5 Q Street, Suburb R and $2,797 for 1 BB Street, Suburb T.
Insofar as the entities under the respondent’s control are concerned (on the basis of spreadsheets provided to Mr OO – but not the source documents for the most part), the total arrears of rates were $95,330, the total outstanding water costs were $6,713 and the total outstanding land tax was $105,782, with these amounts referable to the following entities (and taken up by Mr OO in his valuation of the same[112]) in the following amounts:
(a)D Pty Ltd – outstanding rates of $1,291 and outstanding water costs of $280; and
(b)C Pty Ltd – outstanding rates of $76,042 and outstanding water costs of $5,326, with outstanding land tax for the H Street property of $42,500; and
(c)E Pty Ltd – outstanding rates of $17,997 and outstanding water costs of $1,107 with outstanding land tax of $63,282 for the property at 3 DD Street (which was sold in 2023).
[112]Exhibit10: Affidavit of Mr OO affirmed 18 September 2024; Report at Attachment 9 “Consolidated Valuation Schedule – Marlin Group of Entities”.
That is, the consequence of the respondent’s failure to ensure that he and the entities under his control paid the rates and taxes relating to real property has had the effect of decreasing the value of the property of the parties by $470,055.
I note that the respondent admitted that he had not complied with the obligation to file a Business Activity Statement on time and that, as a result, he accrued a penalty of more than $2,000 on each occasion he was non-compliant. The evidence also established, as I understood it, that the ATO liability included penalties imposed on the respondent in his capacity as a director for failing to appropriately report and/or remit amounts for GST or PAYG tax in the total amount of $198,130.62.
When cross-examined on 17 September 2024, the respondent accepted that he had disclosed some tax documents that morning, including a document that showed that, as at 16 September 2024, the Trust owed $400,683 (noting that, on 27 June 2022, a payment of $347,950.46 was made, following which it was in credit to the amount of $1,250.00[113]). I accept that, as at January 2019, the tax owing by the Trust was $36,486 and, as at February 2019, the Trust’s indebtedness to the ATO stood at $52,796.04.
[113] Exhibit 7B.
Further, insofar as the Trust is concerned, the evidence also appeared to me to reveal that the following general interest charges (GIC) and penalties for failing to lodge Business Activity Statements by the required time were accrued in the following periods:
(a)1 January 2019 to 31 December 2019: $10,065.87 GIC and no penalty; and
(b)January 2020 to January 2021: COVID allowance; and
(c)January 2021 until January 2022: $16,293.35 (GIC) and $1,332 penalty; and
(d)January 2022 to January 2023: $12,287 GIC and $2,200 penalty; and
(e)January 2023 to January 2024: $17,578.58 GIC and $12,014 penalty; and
(f)January 2024 until early September 2024: $23,973 (approx.) GIC and $8,764 penalty.
Despite the respondent’s assertions about the business’ inability to generate profits sufficient to enable him to ensure that tax liabilities and rates were paid when they were due, he accepted that the property at 1 CC Street was purchased in 2022 for $5,800,000 using borrowings of $6,000,000.
I consider that the respondent’s deliberate failure to provide relevant financial information has prevented me from being able to determine whether there is a proper and reasonable basis for his failure to pay, or cause the entities under his control to pay, the rates and tax liabilities as and when they were due. I reject his evidence to the effect that cash-flow difficulties prevented him from meeting these payments and note that, despite these asserted financial difficulties, he was able to obtain finance to permit him to continue to acquire real property of not insignificant value during the same post-separation period and to spend significant funds on improving and renovating the same. To the extent that it was submitted on his behalf that, in essence, the applicant has benefitted from him prioritising his acquisition of real property over the discharge of liabilities (such as taxes and rates) associated with the ownership of property, I am not persuaded that the respondent has discharged the evidentiary onus of establishing that his financial circumstances were such that he was unable, if he chose, to pay his liabilities as and when they were due and acquire property.
In the circumstances, I consider that the respondent’s determination not to pay the rates and taxes payable in relation to the property owned by him personally and not to cause the rates and taxes to be paid by entities under his control was fiscally reckless and/or designed to reduce the effective value of the property; given his conduct as discussed throughout these Reasons, I think it highly likely that he decided that an increase in indebtedness (including as a result of interest and penalties payable on outstanding liabilities) in which the applicant would ultimately share was preferable to ensuring that liabilities were paid when due.[114]
[114] Weir (supra).
I am easily satisfied that it is highly likely that, but for the respondent’s decisions in this respect, the total nett value of the property of the parties would have been greater than it is.
I also consider the evidence to suggest that the respondent may have benefitted as a result of the $187,822 capital gains tax liability Mr OO applied as relating to the sale of the property at 3 DD Street when valuing E Pty Ltd at ($35,028). I arrive at this because Ms QQ calculated that liability to be $132,322.49 – a difference of $55,499.51. However, as this issue was not taken up with either expert and no submissions were made about it, I have treated it as no more than a possibility.
Further conclusions about the s 90SF(3) considerations
My conclusions as to the respective contributions of the parties would result in a 30 per cent differential between the parties: the respondent would receive property and superannuation entitlements valued at $7,277,421 more than the property and superannuation entitlements received by the applicant.
Given the matters considered pursuant to s 90SF(3) of the Act discussed above, I have concluded that an adjustment of 5 per cent in the applicant’s favour is required to do justice and equity in all the circumstances of this case.
What orders are just and equitable and proper?
The consequence of the conclusions outlined above is that, having regard to the parties’ respective contributions to trial and the relevant s 90SF(3) considerations discussed above, the applicant shall be entitled to the property necessary to see her receive property valued at 40 per cent of the total nett value of the property of the parties (that is, property valued at $9,703,228) and the respondent shall be entitled to property valued at 60 per cent of the total nett value of the property of the parties (that is, property valued at $14,554,842).
As noted earlier, the applicant already has property valued at $1,274,592.26. In order for her to receive property valued at 40 per cent of total nett value of the property of the parties, the applicant will have to receive property valued at $8,428,636[115].
[115] Rounded.
How should the applicant receive the property to which she has been found to be entitled?
As already noted, the parties are in dispute about how the applicant should receive the property which, as a consequence of the exercise of the many discretions (about which reasonable minds may differ[116]) involved in resolving applications such as the present, it has been determined that she should receive.
[116]See, for example: Gronow v Gronow (1979) FLC 90-716 per Aickin J at 78,859; Norbis v Norbis (1986) 161 CLR 513; (1986) FLC 91-712 per Brennan J at 75,178.
The applicant seeks that the respondent be required to transfer to her (or cause the relevant entity under his control to transfer to her), free of encumbrance, the properties located at 1 DD Street, 1 GG Street, 2 GG Street and 2 DD Street and that he then be required to pay to her whatever amount is required to ensure that she receive the property which the court has concluded it is just and equitable that she receive: that is, she asserted that orders which would implement her proposal are the orders which the court would be persuaded are appropriate in the circumstances of this case.
In contrast, the respondent proposed that the appropriate order is one which would require him to pay the applicant the necessary sum of money within 90 days (albeit that this submission was made on the basis that the applicant would receive property valued at 20 per cent of the total nett value of the property of the parties).
The respondent’s evidence, when cross-examined included, in essence, that:
(a)he agreed that one way of reducing the capital gains tax impost for him would be to transfer real property to the applicant so that she was ultimately responsible for any such tax; and
(b)he could not make a financial payment to the applicant without selling property – which evidence seems to me to make his proposed orders and failure to seek specific orders for the sale of real property even harder to understand – and maintained that the sale of real property to reduce his debt of $20,000,000 “and climbing” (rather than transferring the same to the applicant) was appropriate and necessary; and
(c)if an order was made for the applicant to receive any property (rather than her application being dismissed), he could sell 1 and 2 GG Street and then WW Street and then the 1 DD Street and 2 DD Street properties to satisfy the same.
The difficulty for the respondent in terms of seeking that this evidence is accepted and relied upon to persuade that the just, equitable and appropriate form of order here is for him to be required to make a cash payment to the applicant within 90 days is, as has been the case in the resolution of other disputed issues, the conclusions that I have reached about his overall veracity and general approach to being frank.
In the exercise of the broad discretion entrusted to trial judges to resolve the manner by which a party shall receive the property which it has been determined it is just and equitable that they receive (and noting that reasonable minds may differ about the way in which such discretions are properly exercised), I consider that the orders which are just, equitable and appropriate in this case are orders which will require the respondent to cause the properties sought by the applicant to be transferred to her, free of encumbrance. I have arrived at that decision because:
(a)I consider that it is appropriate that the applicant receive the 1 DD Street property because: she and the two youngest children have continued to live there since the February 2019 separation; the respondent is accommodated in the H Street property; it is a property that the respondent proposed he would sell to meet his obligations under a Judgment; a transfer, rather than sale, would defer the crystallisation of capital gains tax; and
(b)I consider that it is appropriate that the applicant receive the properties at 1 and 2 GG Street because: the respondent previously implemented his decision to dispose of them when he entered into contracts to sell them in 2023 (which contracts would, I consider, have likely completed but for his determination not to take up the applicant’s offer to remove a caveat and to instruct his conveyancing solicitors not to provide her with a copy of one of the contracts); these are properties the respondent proposed selling to meet his obligations under a Judgment; a transfer, rather than sale, would defer the crystallisation of capital gains tax; and
(c)I consider that it is appropriate that the applicant receive the property at 2 DD Street because: it is a property the respondent proposed he would sell to meet his obligations under a Judgment; given his evidence that it is uninhabitable, there are unlikely to be any issues (such as the requirement to transfer any lease in respect of the property) which may add further complications to its transfer to the applicant; a transfer, rather than sale, would defer the crystallisation of capital gains tax.
(d)I consider that the respondent’s history of:
(i)deliberate concealment of relevant information from the applicant – for example, not telling her contemporaneously that he had signed a contract for the sale of 2 GG Street; and
(ii)deliberately concealing his receipt of funds – for example, keeping a cheque for $624,643.88 with his conveyancing solicitors for nearly six months rather than collecting it and depositing it and then, after depositing it, drawing a cheque in about that amount and holding it for a further seven months; and
(iii)failing to comply with the terms of the August 2022 order until late 2023; and
(iv)prioritising his interests in the way he chose to spend funds obtained by borrowings (for example, the funds obtained from XX Business) rather than meeting his ordered obligations; and
(v)failing to pay assessed periodic child support,
is such that a requirement that he pay the applicant a sum of money by a certain time is highly likely to result in further legal proceedings; and
(e)I consider that receiving the real property she seeks will provide the applicant with the possibility of a future income stream and, more importantly, the potential to benefit from any future increase in the value of the property to which she made indirect contributions during the parties’ nearly 10 year cohabitation and their more than five year separation to trial – rather than restricting the possibility of any benefit from any future profit associated with those properties to only the respondent.
In arriving at this decision I have taken into account the submissions made by Counsel for the respondent to the effect that, given that the respondent’s existing significant debt to a commercial lender is secured by all-properties mortgages, that the property at 2 DD Street is also subject to a mortgage to secure the XX Business loan and that the ATO has recently taken steps to commence proceedings against the respondent and his entities, it would be unsafe to make an order compelling the transfer of the properties sought by the applicant as this would require the respondent to obtain a release from the commercial lender and, in order to transfer the properties to the applicant free of encumbrance, he would be required to refinance the existing facilities.
Whilst I accept that the respondent will have to take steps to refinance his existing obligations and obtain necessary releases from his commercial lenders in order to transfer the properties at 1 and 2 DD Street and 1 and 2 GG Street to the applicant, her position in relation to at least the transfer of the properties at 1 and 2 DD Street had clearly been raised prior to the final iteration of her formal application.[117]
[117]Given that the Third Amended Initiating Application sealed 12 August 2024 does not indicate that the amendment to it included the inclusion of those properties as property sought by the applicant.
I also note that the evidence seemed to me to establish, on my calculations, that[118]:
(a)the respondent, who owns 1 DD Street (valued at $2,175,000) personally, owns property valued, for the purpose of these proceedings, at $23,120,000 and personally owes (exclusive of any indebtedness incurred via the use of credit cards and in relation to outstanding rates) $7,439,689[119]– a current leveraging of about 32.18 per cent; and
(b)D Pty Ltd, which owns 2 DD Street, owns property valued for the purpose of these proceedings at $1,550,000 and (exclusive of any amount owing for unpaid rates in the amount of $1,291) owes $840,000[120] – a current leveraging of about 54.17 per cent; and
(c)C Pty Ltd (which owns 32 and 2 GG Street, together valued at $1,715,000) owns property valued for the purpose of these proceedings at $11,225,000 and (exclusive of its indebtedness relating to unpaid rates) owes $7,136,900[121] – a current leveraging of about 63.58 per cent.
[118]Exclusive of the ATO liabilities given the respondent’s evidence that the most recent borrowings of $690,000 by C Pty Ltd are to be used to pay them.
[119]Being: $4,238,541 (NAB account ending in 83); $1,256,148 (NAB Loan ending in 79) and $$1,945,000 (NAB ending in 21).
[120] To the XX Business.
[121]Being: $448,294 (NAB account now ending in 10 for AO Street), $1,246,501 (NAB account ending in 87 for H Street), $2,352,105 (NAB account ending in 50 for H Street), $630,000 (NAB account ending in 81 for 1 GG Street) and $1,500,000 (AR Company for 2 GG Street and WW Street) and the $960,000 borrowed most recently for the purpose of discharging the liabilities the subject of legal proceedings by the ATO.
Given these calculations, the prospect of the respondent being able to persuade a commercial lender to refinance his borrowings and those of the relevant entities under his control does not seem to me to be likely to be unachievable. In any event, it was always open to the respondent to adduce evidence from an appropriate person about the impact on his financial position, and that of the entities under his control, if required to transfer property to the applicant free of encumbrance rather than, as he proposed, be ordered to pay her a lump sum within 90 days of the making of the final order and somehow obtain those funds.
The total value of the real property to be transferred to the applicant is $5,440,000. Given she already has property valued at $1,274,592, the respondent will be required to make a cash payment to her of $2,988,636. He will retain property valued at $14,554,842 and be responsible for discharging the arrears of rates and any outstanding utilities owing in relation to the real property to be transferred to the applicant.
Other than the submission about according the respondent 90 days to make payment to the applicant, no other submissions were made about the appropriate timeframes for the transfers of real property. Given that the respondent’s obligation to pay spousal maintenance will cease on the making of the orders, and that he appears previously to have been able to arrange funding relatively quickly, I consider 45 days to be an appropriate time within which the transfers of real property and payment of funds should occur.
For the reasons outlined above, I am satisfied in all the circumstances of this case that it is just and equitable that orders be made adjusting the existing interests of the parties in property and superannuation and that the orders set out at the commencement of these Reasons will, as far as practicable, determine the financial relationship between the parties and are the orders which are just and equitable and appropriate to be made.
I certify that the preceding two hundred and thirty-seven (237) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hogan. Associate:
Dated: 21 November 2024
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