Hillman & Hillman

[2020] FamCA 630

FAMILY COURT OF AUSTRALIA

HILLMAN & HILLMAN [2020] FamCA 630

FAMILY LAW – PROPERTY – where the nett pool totals $517,804 – where the related company is in liquidation – where non-financial contributions of the parties should be regarded as equal – where the parties’ contribution based entitlements should be regarded as broadly equal – where an adjustment in favour of the husband of 12.5% is appropriate – proceedings adjourned for pronouncement of orders consistent with these Reasons.

Corporations Act 2001 (Cth) s 470
Family Law Act 1975 (Cth) ss 79, 75, 81

Hillman & Hillman [2018] FamCA 488
Hickey & Hickey (2003) FLC 93-143
Hillman & Hillman [2016] FCCA 1654
Trevi & Trevi (2018) FLC 93-858
Omacini & Omacini (2005) FLC 93-218
Chorn & Hopkins (2004) FLC 93-204
Townsend & Townsend (1994) 18 Fam LR 505
Weir & Weir (1993) FLC 92-338
Black & Kellner (1992) FLC 92-287
Jones & Dunkel (1959) 101 CLR 298

APPLICANT: Ms Hillman

RESPONDENT: Mr Hillman

FILE NUMBER: BRC 1750 of 2016

DATE DELIVERED: 18 September 2020

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Baumann J

HEARING DATE: 4 & 5 March 2019 & submissions filed by 15 April 2019, final submissions filed 9 May 2019

REPRESENTATION

SOLICITOR FOR THE APPLICANT:	Evans Brandon Family Lawyers
THE RESPONDENT:	Self-represented

Orders

1. That proceedings be adjourned to 9.30am on 14 October 2020 for pronouncement of orders consistent with the Reasons published today.

2. That by 4.00pm on 7 October 2020, the wife shall file and serve a minute (which includes as an alternate the sale of the Suburb VV home).

3. That by 4.00pm on 12 October 2020, the husband shall file and serve any minute in response – including, if he seeks to retain the said home, the timetable for payment to the wife.

4. That the parties have leave to appear by telephone on 14 October 2020 by using the “AAPT GlobalMeet” telephone conferencing system as follows:

   (a)They shall each telephone … (within Australia only) (toll free) by 9.25am on 14 October 2020;

   (b)Any party dialling in from outside of Australia shall telephone … (with the necessary international dialling codes);

   (c)       They shall each then enter the pass code …;

   (d)Hold the line until the Court is ready to connect and proceed with the matter; and

   (e)       Not place the call on hold.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Hillman& Hillman has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 1750 of 2016

Ms Hillman

Applicant

And

Mr Hillman

Respondent

REASONS FOR JUDGMENT

Introduction

1. As a result of an order to bifurcate a parenting and property dispute between the Applicant Ms Hillman (“the wife”) and the Respondent Mr Hillman (“the husband”), commenced initially in February 2016, final parenting orders after a trial were pronounced on 29 June 2018.

2. The effect of those orders were that the parties’ children B (soon to turn 17 years) and C (14 years) were separated and live with the father and mother respectively (see Hillman & Hillman [2018] FamCA 488). A trial of the financial issues took place in March 2019, with final written submissions delivered in reply on 9 May 2019.

3. As is so often sadly the case, the remaining pool of real assets available for division is modest and does not truly reflect the contributions and commitment the parties had made to creating a secure financial future for them and their family.

4. As these Reasons seek to explain, after final separation on 3 February 2016, the operation and financial performance of the parties’ business HH Pty Ltd suffered a significant downturn – with both parties asserting the effect on the business related to actions and behaviour of the other.  These cross allegations occupied most of the trial time and is dealt with later in these Reasons as a discrete issue.

5. What is not controversial is that by Order of this Court on 17 November 2016 (by consent), the company HH Pty Ltd was placed into liquidation, with a liquidators report filed after a creditor’s meeting held on 27 March 2018.  As further explained later in these Reasons, many concerning aspects on the company’s trading were raised, however as the report revealed that as liabilities exceeded assets and there were no funds available to the liquidator to conduct further investigations into the insolvency or the collection of debtors, no further action has been taken by the liquidators and no payment to any creditor (after the remuneration of the liquidators is paid) has been made or is likely to be made.

6. To further complicate the legal issues, the only significant available asset – a jointly owned house property – is occupied by the husband and his elderly mother Ms KK, for whom he is now the full-time carer.  Whether the husband’s mother contributed to the improvement of the remaining real asset and how that might be treated is also an issue.

7. The trial was conducted with the wife represented competently by solicitor Mr Brandon, whilst the husband, a very articulate and clearly clever man, represented himself – although the emotions that have swelled since separation over three years earlier were palpable and at times surfaced unhelpfully.

Principles

1. Shortly stated, but more concisely and elaborately described in the Full Court decision in Hickey & Hickey (2003) FLC 93-143, in a property settlement case, the Court must adopt a well-known four-step process, essentially:

   a)to identify the pool of assets and liabilities generally, and usually at the time of hearing;

   b)to assess the relative contributions of both the financial, non-financial, direct and indirect nature as specified by s.79(4);

   c)to consider the factors as are relevant contained in s.75(2) of the Act; and

   d)finally, consider the ultimate analysis to determine whether the order the Court proposes to make is just and equitable to both parties.

Brief contextual chronology

1. To give some context to the reasons which follow, what is now set out is a brief contextual history.  As the major issues of a forensic character relate to the business HH Pty Ltd and the acquisition and improvement of the former family home, I deal discretely with those issues.

2. Hereafter statements of fact should be construed as findings of fact.

3. The husband is now 62 years of age; the wife is 51 years of age.  They met in China, the country of birth of the wife.

4. They were married in City P in 1993 and arrived in Australia as a couple in August 1993 after which they engaged in a number of business activities which did not prove very successful.

5. They returned to China to live in 1997 before moving to TT City in around August 1998.  From then the parties, I find, used their combined skills and somewhat entrepreneurial focus to commence businesses such as the “SS Business”; the hospitality business and a service for tourists (many who came from China, allowing the wife’s linguistic skills to be very useful).  That business known as RR Business was profitable, expanding, I find, to operating a fleet of 14 large vehicles by 2003.

6. This profitable business contributed to the capacity of the parties to engage in real estate transactions between July 1995 and January 2008, summarised accurately, I find, at paragraph 107 of the wife’s trial Affidavit.  Whilst the husband disputes some of the contributions the wife says her parents made, at the least the summary of transactions reveals significant capital gains in most of the properties were achieved.

7. In 2003 the child B was born, followed by C in 2006.  By this time the wife was devoted to the primary care of the young girls and she was mostly working for the RR business from home.

8. I find in late 2007/early 2008 the husband, who had skills and experience in the mechanics of large vehicles and their sale and operation, desired to commence a new business that would maintain and service the vehicles used for the RR business as well as other vehicle owners.  The business (“MM Pty Ltd”) was established.

9. Although the wife says (at paragraph 76) that “[w]e spent approximately one million dollars ($1,000,000) on the workshop and fit out” no corroborative evidence of this assertion was provided nor was the wife the subject of cross-examination on this asserted fact.  It is noted that in January 2008 the commercial property at AB Street, Suburb AC was purchased for $335,000 which the wife says was acquired to run the business “MM Pty Ltd” but which, I infer, also housed the vehicles for the RR business, as the property at AK Street, Suburb AL (which had been used as a business premises) was sold to allow for the new business premises to be funded.

10. I accept in approximately 2009, the husband negotiated to secure the business rights for a type of large vehicle.  Although the parties disagree about the discussions relating to the closure of the RR business, what is not disputed is that the business closed without obtaining any purchaser for it, and with all the business equipment and remaining vehicles sold.  I infer any remaining funds found their way into the only business then remaining – MM Pty Ltd.

11. Again although the parties – quick to attribute blame to the other – dispute whether the loss of the business after six months was the result of “poor performance by the husband” as the wife asserts, the loss of the business seems to have been the catalyst for the parties to:

    a)lease the business premises and business to an employee; and

    b)move to M Town as a family in 2010.

12. As more fully set out later in these Reasons, the move to M Town seemed to offer the family a new start in business.  The husband had developed commercial contacts and sought to pursue a related business idea.

13. As the wife explains at paragraphs 84 to 88 of her trial Affidavit, which I accept is broadly accurate, these endeavours driven by the husband and at the time supported, I find by the wife, led to the incorporation of HH Pty Ltd on 2 May 2011 which operated from leased business premises in M Town.

14. In September 2013 the former matrimonial home at UU Street, Suburb VV was purchased by the parties for $435,000, with renovations being performed to the home thereafter, including when nett proceeds of sale of the unit at Suburb AF (purchased for $60,000 in July 1995) were received after its sale for $181,000 (gross) in November 2014.

15. The parties separated in February 2016, with proceedings commenced by the wife initially in the Federal Circuit Court of Australia on 29 February 2016.  Because of the nature of various procedural orders (including injunctions) made thereafter, again for context I provide a summary of the major Court events shortly.

16. As earlier noted, on 17 November 2016 Austin J made an order appointing a liquidator to the company HH Pty Ltd.

17. By this time, the wife and her brother had commenced a new business called LL Pty Ltd.  The husband asserts, with some emotion, that the effect of the wife’s actions in “destroying” the business HH Pty Ltd was designed to allow her to capture the commercial opportunities that were created by the liquidation of HH Pty Ltd, for her personal financial gain and at his detriment.  This is strenuously disputed by the wife.

18. The final parenting Orders made 29 June 2018 which perfected the existing arrangement separating the siblings, has not assisted the mother to maintain a relationship with B or for the father to maintain a relationship with C.

19. At the property trial – less than 12 months after the final parenting Orders were made – the parties’ disappointment and mistrust arising from those parenting Orders and the history of the company liquidation fuelled the litigation.

20. The Court regrets its delay in publishing these Reasons which has meant finalisation of the parties’ property dispute has not occurred.

procedural history

1. The procedural history that follows helps understanding context.

2. After filing her Initiating Application on 29 February 2016 in the Federal Circuit Court of Australia, the matter was listed urgently.  Issues relating to the continuing management of the business, as well as parenting arrangements, required urgent attention.  Relevantly, by consent the parties agreed to the following orders on 7 March 2016, namely:

   “14.That the company HH Pty Ltd A.C.N. … [hereafter “the Company”] be valued by AM Accountants.

   15.That AM Accountants shall be appointed pursuant to Rule 15.09 of the Federal Circuit Court Rules with the costs to be met by the Company at first instance with the parties to equally bear the costs equally from their final settlement entitlements.

   16.That the Wife be entitled to any and all information regarding the Company including requesting the company accountant and bookkeeper for such information.

   17.That all income from the Company is to be paid to the Company bank account and is not to be used unless in the usual course of business PROVIDED THAT no further Brand 3 small vehicles shall be acquired unless with the written agreement of the Wife PROVIDED FURTHER THAT the payments in Order 21 can be made.

   18.Any offer to acquire/buy back the Brand 3 business and/or stock from the Company shall be disclosed to both parties.

   19.That following the mutual exchange of disclosure, valuation of the company and any other disputed items of property having been completed, and the family report having issued, the parties shall attend private Mediation with the Wife to panel three (3) Mediators and the Husband to select one (1) Mediator from the panel.

   20.That within 28 days:-

   (a)The parties shall exchange Annexure A documents; and

   (b)The parties, via their Solicitors, shall confer about the property pool and any items of property where the value is in dispute shall be valued by a Court Expert pursuant to Rule 15.09 of the Federal Circuit Court Rules and in the event there is no agreement as to the Court Expert the Wife shall panel three (3) experts and the Husband shall select one (1).

   21.That the following payments can be made from the Company bank account:-

   (a)the children’s school fees;

   (b)any children’s sporting and extra-curricular activities;

   (c)$1,000 per week to each party;

   (d)The mortgage payments for the Family home as and when due;

   (e)Any other payment as agreed by the parties; and

   (f)The lease on the 4WD.”

3. At this time both parties were legally represented.  There is no evidence that the Court expert was engaged or that mediation took place.

4. Although the husband was the sole director of HH Pty Ltd, the parties were both involved in the business, and held all the “A” class shares and 90 of the 95 ordinary shares.  The remaining five ordinary shares were vested in the wife’s brother, who lives in China.  Shortly after separation the wife, who had been a signatory to the business account withdrew $10,000 for “self-support”.  Whilst the husband drew down on the housing loan to the extent of $50,000 and transferred the funds to the business account, neither of these transactions had the consent of the other party, and from at least that point, mutual trust seemed to completely evaporate.  The wife was removed as a signatory to the account, and whilst the Orders of 7 March 2016 were designed to create some proper transparency, as the evidence at trial (and the liquidators report) reveals a number of questionable transactions involving the business took place.

5. Subsequently on 12 April 2016, Judge Cassidy heard further submissions from Counsel retained by the parties, and having reserved her decision, on 20 April 2016 pronounced the following very prescriptive orders:

   “1.That the parties do all acts and things and sign any documents as are necessary to cause the wife to become a joint signatory on the bank accounts of the Company, within seven (7) days of the date of this Order.

   2.That each party be restrained and an injunction hereby issue restraining each from accessing or drawing down on any of the bank accounts held by the Company:

   (a)Other than in accordance with the terms of these orders or otherwise in the ordinary course of the ordinary business of the Company; and

   (b)In any event, without the signature of the other party where the amount exceeds $1,000.

   3.That pending the wife becoming a joint signatory on the bank accounts of the Company the husband be restrained and an injunction hereby issue restraining the husband from accessing or drawing down on any of the bank accounts held by the Company.

   4.That, by no later than 10.00am each Monday the husband shall provide to the wife in writing a detailed sales report for the prior week’s sales, which is to include a full description of the vehicle sold and sale price and/or full description of the part sold and sale price.

   5.That, in the event that the husband seeks to sell a vehicle for a price which is more than 10% less than:

   (a)$46,990 for a seated vehicle; or

   (b)$36, 990 for a cargo vehicle

   The husband shall not do so without first seeking and obtaining the wife’s written consent.

   6.That the husband first obtain the wife’s consent before having any dealings with the Company’s manufacturer or any of the Company’s suppliers.

   7.That, within forty-eight (48) hours of the making of these Orders, the husband provide a signed Irrevocable Authority to the Company’s accountant and bookkeeper to speak with the wife and/or her solicitors, Evans and Company Family Lawyers, and to provide any information and/or documents as requested by the wife and/or her solicitor, at the wife’s expense.

   8.That, within three (3) days of the date of these Orders, the husband shall provide to the wife:

   (a)The full details (including but not limited to VIN numbers) for the two (2) vehicles the husband asserts are unsaleable;

   (b)The current stock inventory for the company, including a full description of all stock, including parts and vehicles (including VIN numbers for any vehicles);

   (c)Full records in respect of any vehicles sold since 1 February 2016, including a full description of the vehicle sold (including VIN number) and the person/entity to whom/to which the vehicle was sold.

   (d)Full records in respect of any parts sold since 1 February 2016, including a full description of the part sold and the person/entity to whom/to which the part was sold.

   (e)Complete bank records (including statements) for the Company since 1 February 2016.

   9.That the wife within forty-eight (48) hours give the husband all the relevant documents and information in relation to sales for the online parts store for HH Pty Ltd and provide updating documents no later than 10.00am each Monday.

   10.That the parties’ costs of and incidental to their respective interim property applications be reserved.

   11.That this matter be adjourned in relation to both parenting and property for mention only at 9.30am on 19 May 2016 in the Federal Circuit Court of Australia at Brisbane.”

6. On 3 June 2016, Judge Cassidy heard further submissions in respect of the wife’s Applications for injunctive relief and her Honour published Reasons (see Hillman & Hillman [2016] FCCA 1654) on 20 July 2016 in support of her Orders made that day:

   “1.That the wife be at liberty to enter the premises of HH Pty Ltd (“the company”) from time to time upon giving the husband forty-eight (48) hours’ notice in writing of her intention to do so.

   2.That the Application in a Case filed by the wife on 17 May 2016 be dismissed.

   3.That pursuant to Rule 8.02 of the Federal Circuit Court Rules 2001, these proceedings (both parenting and property) be transferred to the Family Court of Australia at Brisbane to be listed on a date to be advised.”

1. The wife’s primary application, which was unsuccessful, was to have the husband resign as the director and secretary of HH Pty Ltd and that she be appointed as director and secretary.  The wife claimed that the husband had failed to comply with the Orders of 20 April 2016 by failing to provide the wife with information; selling vehicles below the permitted prices and using company funds improperly.  In her trial Affidavit, the wife asserts the husband used a company credit card for personal expenses (an alleged breach of Order 17).

2. Although her Honour was not persuaded at that time that there was sufficient evidence justifying the removal of the husband as a director of the company, Judge Cassidy noted the husband had breached Order 5 (see paragraph 35), as well as a failure to provide an inventory to the wife as required by Order 8 (see paragraph 29).  To remedy that deficiency, the Court ordered the wife be at liberty to enter the business premises on the giving of 48 hours’ notice.

3. The wife, in her trial Affidavit, provides evidence of her concerns about compliance with earlier Orders (paragraphs 151 to 162); alleged misuse of company credit card (paragraphs 163 to 169); lack of information on trading (paragraphs 170 to 182 and paragraphs 223 to 228); improper sale of vehicles (paragraphs 183 to 199 and paragraphs 229 to 267); line of credit with Brand 4 (paragraphs 200 to 206); further misuse of credit card and company bank accounts after 20 April 2016 (paragraphs 211 to 222).

4. After Orders were pronounced on 20 July 2016, a meeting between the parties (at which the wife’s solicitors also attended) occurred on 21 July 2016 after which her lawyers raised concerns about alleged missing small vehicles.  Exchanges of emails occurred (as set out in the wife’s Affidavit at paragraphs 298 to 304).

5. Furthermore, despite the company 4WD motor vehicle being in the possession of the wife and with the orders of 7 March 2016 compelling the company to maintain lease payments, the payments were not made.

6. The wife instructed her solicitors to write to the husband seeking his cooperation in appointing an administrator/liquidator to HH Pty Ltd.  This occurred on 27 July 2016.  The wife says, and I accept, that the husband did not initially cooperate with the appointment.  Whilst in control of the company, the husband continued to withdraw funds (see paragraph 339) and sell small vehicles.

7. The wife filed an Application on 12 September 2016 for appointment of a liquidator which came before Austin J on 17 November 2016 when, by consent, the following Orders were made:

   “1.In accordance with the orders in the document signed by parties and/or their legal representatives, marked as Exhibit A and placed with the court file:

   1.1HH Pty Ltd ACN … (“the Company) be wound up pursuant to sections 233(1)(a) of the Corporations Act 2001 (“the Corporations Act”).

   1.2Pursuant to section 472 of the Corporations Act, Mr AR and Mr AS of AT Accountants, Suburb AU in the State of Queensland, Official Liquidators, be appointed jointly and severally as liquidators of the Company (“the Liquidators”).

   1.3The Liquidators are directed to undertake an investigation into, and take an account of, monies received by the husband, or related entities of the husband from the Company, and to prepare a report to the Court in relation to their findings in that regard prior to any distribution being made.

   1.4The Liquidators shall bring to the accounts of the Company money taken from it by the husband (and/or his related entities) so as to rectify the books and records of the Company having regard to these orders and the Affidavit of Ms Hillman, filed 12 September 2016.

   1.5Pursuant to section 121 of the Family Law Act, the parties have liberty to provide to the Liquidators material related to, or filed in these proceedings.

   1.6The Liquidators have leave to apply to the Court for directions pursuant to section 479(3) of the Corporations Act.

   1.7The costs of the Liquidators are to be paid in the first instance by the Company. In the event that the Company does not have sufficient funds to pay the Liquidators’ costs then the Husband is to pay such fees.

   1.8The Application in a Case, filed 14 November 2016 be dismissed.

   1.8AThe Application in a Case, filed 12 September 2016 is dismissed.

   1.8BThe Response to an Application in a Case, filed 11 November 2016 is dismissed.

   1.9The Applications for Contempt, filed 4 November 2016 to Luke Brandon and Ms Hillman be dismissed.

   1.10The Subpoena to Evans and Company, dated 1 August 2016 be set aside. 

   1.11The Husband is to pay the Wife’s costs of and incidental to this Application, the Application in a Case, filed 14 November 2016 and the Application for Contempt, filed 4 November 2016, fixed in the sum of $15,000 and to be paid from the Husband’s share of any proceeds received by way of property settlement following agreement between the parties, or order of the Court.

   2.The solicitor for the applicant wife shall file a typed script of Exhibit A within 24 hours hereof.”

8. When the husband advised the Registrar on 3 August 2017 that he “will be seeking an order for removal of the appointed liquidator”, the matter was listed to the Judicial Duty List on 18 September 2017 – at which time Forrest J amended the Order made 17 November 2016 under the “slip rule” by removing the word “provisional”.  No other substantive orders were made at that time.

9. As I explore below, perhaps a greater concern arises from the fact that although the order for appointment of the liquidators was made on 17 November 2016, the required notices to ASIC were not lodged until 2 May 2017, when the liquidators finally were also notified.

10. In the case management of this property dispute, clearly the numerous cross-allegations of improper conduct by each party towards the other, did cause the parties to want and hopefully rely upon a report by the liquidators.  The Court, on more than one occasion, expressed its dismay with a report not being finalised.  Thereafter the wife had concerns about the report, ultimately filed on 6 April 2018 by Affidavit of Mr AR.

11. The matter was listed in November 2018 to commence trial on 4 March 2019, which it did, however the husband was granted leave on 9 April 2019 to adduce further evidence (in the form of Exhibit 20) and further written submissions on that evidence were completed by 9 May 2019.

Liquidators report

1. The liquidators raise concerns about transactions involving both the husband and the wife but ultimately – with no funds available to conduct further investigations or to launch litigation against either debtors of the company or the husband and wife for alleged preferential payments – many of the allegations remain unresolved.  Also the wife, who asserted she was an unsecured creditor in the sum of $386,614, is recorded as informing the creditors meeting on 27 March 2018 that:

   “…it was her preference that all matters relevant to the company and Mr and Ms Hillman be dealt with at the next return date of the matter before the Family Court such that final orders can be achieved and finality could be achieved by the parties and the company”

2. Although the report of liquidator Mr AR (dated 9 March 2018) speaks for itself, the Court identifies the following statements of concern namely:

   a)whilst the bank account recorded a balance of $39,532.98 at 11 November 2016, subsequent to the Family Court of Australia Order to wind up the company, the husband continued to deal with the company’s assets and bank account including making payments to creditors, associated companies, himself and the wife;

   b)despite a request for details of the purpose of each transaction after the date of liquidation, only limited material had been received;

   c)the 4WD was sold for $42,000, with $38,286.45 remitted for the debt to the lessor of the car and the balance paid into the business account on 2 September 2016;

   d)at 30 June 2016 the company’s financial statements listed “stock on hand” consisting of 18 large vehicles and two smaller vehicles.  The report concluded that invoices for sales and of 15 large vehicles and two small vehicles were provided and funds deposited to the company account.  The report noted that the lawyers for the wife provided details of three vehicles “the sales of which are yet to be identified in the company records”.  These “sales” were the subject of cross-examination of the husband and are dealt with later in these Reasons;

   e)although the liquidator says they had “been advised” that a further six vehicles were in the possession of the company no “information in respect of these vehicles has been identified in the company’s records” (save for the motor vehicle 3);

   f)the company’s financial statements for the year ended 30 June 2016 listed stock in hand of parts and accessories at $30,000 and between January through to April 2017 multiple remittances were received by the company said to represent sales.  The liquidator took the view it was “not commercial” for the liquidator to conduct a complete reconciliation;

   g)the company was owed a total of $1,091,350 by six debtors as set out in the report- the largest being $861,250 owed by “Resources & Investments Finance”.  The liquidator, after advice from the husband, concluded that the debts are not recoverable and advised creditors there was insufficient funds in the liquidation to conduct investigations or seek to recover the debts;

   h)the liquidator formed the view the company had a claim against a related entity (MM Pty Ltd) for $34,605.75 because the company paid out a lease over an Audi motor vehicle owned by that entity.  It is not clear that a demand was made by the liquidator;

   i)despite attempts to reconcile rents paid and outgoings relating to the company’s leased premises (and an assertion the landlord was owed $150,000) no proof of debt was lodged.  The bond of $18,336 appeared to be returned;

   j)the most recent signed financial statements as at 30 June 2016 revealed the company had total liabilities of $1,238,109.10 resulting in a “Nett Asset (liability) position of ($773,816.62)”, however since the date of the Family Court of Australia Order, the husband applied certain proceeds from the company’s assets in reduction of those liabilities – with creditors being either the husband or the wife or related parties.  Only the Australian Taxation Office filed a proof of debt (for $23,135.12);

   k)insufficient funds in the liquidation existed to meet the costs of further significant investigations into the timing and cause of the company’s insolvency although the partial examination of financials from the period ended 30 June 2014 suggests that with a “current ratio” of less than one, the company had insufficient assets to meet its liabilities for some time;

   l)the liquidator formed the view that, from their limited investigations, there were a number of “unreasonable director related transactions” as follows:

   Pre-liquidation (May 2016 to October 2016)

   -    Husband received $112,959.09

   -    Wife received $93,000.00

   Post-liquidation 9November 2016 to April 2017)

   -    Husband received $65,031.01

   -    Wife received $55,000.00

   m)the liquidator noted that as the wife had been the Applicant for the order for liquidation made by the Family Court of Australia, she had the obligation under s 470(1)(b) of the Corporations Act 2001, to lodge the Order and under s 470(2)(c) to deliver to the liquidator a copy of the Order.

   As a result of the wife’s failure to comply with her obligations “the company has suffered a significant loss and that loss is recoverable from Ms KK”.

   n)It appears unlikely that any further debts of commercial significance were incurred by the company after the time it became insolvent as the company had effectively ceased trading following the breakdown of the personal relationship between the parties.

Conclusion on the company’s liquidation

1. Clearly the liquidator had no available funds to conduct further investigations, however it seems the majority of funds received from the sale of equipment, parts etc were deposited to the company account and the payments to the parties made from those sales.

2. As the parties or “related entities” were the creditors, in many ways they were only getting back some of what they were owed.  It is not the task of the Court to conduct an audit of the company.  It is not adequately explained why the wife failed to notify the liquidator immediately of the Order for liquidation.

3. It is reasonable to infer that, to some extent, it suited the parties to not have the liquidator “control” the sale of assets as more costs of liquidation would have been incurred.  It seems that, before the liquidation order was made by Austin J in November 2016, and for some period thereafter the parties personally benefited from accessing company funds, at least to the extent identified by the liquidator, namely:

   Husband - $112,959.09 + $65,031.01 = $177,990

   Wife - $93,000.00 + $55,000.00 = $148,000

4. The total funds “extracted” from the company as identified by the liquidator totalling $325,990 approximates the funds received by the company from sales of stock etc.

5. I will take these findings into account when conducting the required four step analysis required by authority.

Nature of payment made by husband’s mother Ms KK

1. Ms KK, the husband’s mother, is approximately 89 years of age and gave evidence by Affidavit sworn 12 April 2018.  She was briefly cross-examined at the hearing.

2. I regard her as a truthful witness, however her recollection of details was at times vague.  Her evidence, which I accept, is that:

   a)she previously owned a property at Suburb AD, which she sold before moving into the townhouse at AE Street, Suburb AF (“the Suburb AF unit”) after a period where she lived with her other son Mr AG;

   b)although she says she contributed “$50,000”, under cross-examination she agreed the figure was $41,000;

   c)she discussed with the husband her moving to the property at UU Street, Suburb VV.  I accept her son Mr Hillman offered to look after her – a not unusual cultural and moral arrangement;

   d)she contributed between $10,000 and $11,000 towards improvements to the Suburb VV home to allow a type of “granny flat” to be created for her continued comfortable enjoyment.  She continued to reside on the property post separation (between the husband and wife), and was still residing there at the time of the hearing; and

   e)Ms KK did not receive any of the proceeds of sale of the Suburb AF unit when it was sold in 2014 for around $180,000, nor did she seek repayment.

3. Although the husband asserts that he and the wife hold part of the legal title to Suburb VV in some form of Trust for his mother, I accept the submissions of the wife that, although she accepts the funds were paid by the husband’s mother, the evidence overall does not establish that Ms KK has a legal or equitable interest in the Suburb VV property.

4. In cross-examination, although she appeared somewhat confused by the question, she said she was not asking for any interest in the property.  My strong impression is that she merely would like to have the opportunity to remain on the property, supported by her son, as long as she is able to do so.

5. My acceptance of the wife’s submission is supported by the manner in which the right of tenancy of the Suburb AF unit was protected.  Exhibit 20 is a copy of a registered lease between the husband and wife and Ms KK dated 12 June 2003 creating an enforceable lease for a period expiring on 31 May 2050 for a total nominal rent of $50, which was to “expire upon the desire of the Lessee” – essentially a life tenancy.

6. Ms KK says, under cross-examination, that she paid body corporate charges but not rates (although paragraph 7 says she did pay rates).

7. Although Ms KK derived some personal benefit occupying the Suburb AF unit from 2003 to 2014, the husband and wife also obtained a benefit from the funds contributed by Ms KK in:

   a)they had the use of the funds which, although not used to purchase the property in 1995, were nonetheless funds available to them;

   b)they were able to extinguish the lease in 2009 by agreement, even though Ms KK continued to live there.  This enabled the parties to use the otherwise “unencumbered” property to secure further business finance at the time; and

   c)funds from Ms KK were used to perform some improvements to create the “granny flat” on the Suburb VV property.

8. I shall, in accordance with principle, take into account the contributions by Ms KK as a contribution by the husband.

Add backs

1. Before making findings which follow as to what constituted the pool of assets at the time of hearing, it is convenient to deal with the submissions on behalf of the wife that total funds of $894,000 be “added back”, being:

   a)$132,000 received by the wife; and

   b)$762,000 said to be received by the husband.

2. Whilst I deal with each category of “add back”, summarised at paragraph 158 of the wife’s submissions, it is important to record that authorities establish that the previously common practice of “adding back” funds “notionally” to the asset pool is not only a matter within the discretion of the trial judge, but exceptional (Trevi & Trevi (2018) FLC 93-858 at [30]; Omacini & Omacini (2005) FLC 93-218).

3. The practice of seeking to “add back” funds is more often applied now when issues of funds used for legal expenses (see Chorn & Hopkins (2004) FLC 93-204) or a clear premature disposition of available joint funds has occurred (see Townsend & Townsend (1994) 18 Fam LR 505).

4. The submissions of the wife sensibly alluded to this more common approach, by including a submission that if not “added back”, then the facts compel an adjustment under s 75(2)(o) as is now the more appropriate approach. Of course, these principles merely identify that if the Court finds some actions of a party need to be taken into account, so as to do justice and equity between them, then the Court should find a way to do so.

5. The various “add backs” contended for are as follows:

Husband ($232,502) and wife $132,000) drawings from HH Pty Ltd bank account

1. It is clear these funds represent part of the funds available to HH Pty Ltd after sales of stock and vehicles owned by HH Pty Ltd.  At paragraph 47(l) of these Reasons, I noted the view taken by the liquidator evidencing a differential of almost $30,000 in the husband’s favour.  I take into account that the greater differential contended for by the wife at paragraph 158 of the submissions includes payments of a claimed personal nature from credit card accounts established in the company name – yet used at times for personal expenses.

2. It is not the role of the Court to “audit” these expenses, and more so where the liquidator has largely done so.  Of course, whilst I do accept the husband gained greater benefit from the funds in the business account than did the wife, the husband also continued to operate the HH Pty Ltd business after the wife ceased involvement.

3. The wife, it is established, started the LL Pty Ltd operations within months of separation in around April 2016.  She was then more focused on her new business than her old business and whilst I accept the Orders made by Judge Cassidy sought to create some accountability and transparency, the fact remains (as the liquidators opined), the trading operations strongly suggest the business was trading whilst insolvent for some period before the 17 November 2016 Orders to appoint liquidators.

4. I have formed the view that it suited the purpose of both parties to not have the liquidator immediately take over the business from November 2016.  Ultimately, any funds received were properly the entitlement of creditors, however the sale of stock and vehicles allowed the parties to remove funds for their own benefit.

1. In these circumstances, I do not propose to “add back” the funds taken by the parties from HH Pty Ltd when they chose to do so before the liquidator was informed by the wife of their appointment in May 2017. The wife’s failure to comply with her obligations under s 470(1)(b) and s 470(2)(c) of the Corporations Act 2001 (Cth) is not adequately explained.

2. I will take into account, as a s 75(2)(o) factor, that the husband did obtain more funds from the sole service of income or capital (being HH Pty Ltd), however it is also appropriate to reduce that adjustment for the fact that the husband did work in “winding up” the business, including his daily work and his efforts in negotiating an end to the lease arrangements, saving the company some significant liability.

Vehicles sold by HH Pty Ltd

1. The assessment undertaken by the liquidator, who identified that as at 30 June 2016 the entity had:

   c)18 large vehicles;

   d)1 x Brand 1 small vehicle; and

   e)2 x Brand 2 small vehicle,

   was that funds for the sale of 15 large vehicles, the 2 smaller vehicles had been accounted for.  I am not persuaded that the husband obtained $40,000 cash for two smaller vehicles as asserted by the wife.

2. Similarly, whilst I am aware of the Order made by the Court as to the price to be obtained if possible for large vehicles – in the circumstances where the liquidator having been given details of the sale of 17 items, I am not satisfied that I should reject the evidence of the husband that he got the best price he could in the market at the time.  Again, any “notional losses” are losses to HH Pty Ltd primarily.  This was a business in the throes of disintegration and where the wife was in a new business, competing to some degree.  I would, for these reasons, not “add back” the sums of $40,000 and $225,947 contended for by the wife.

3. I also observe, again, that the beneficiaries of the sales were the parties who removed most of the funds before the liquidators knew they had been appointed six months earlier.

Stock

1. The liquidator in their report under the heading “Spare Parts, Plant & Equipment and Other Assets”, refers to the value of “stock on hand and parts and accessories” at 30 June 2016 at $30,000.

2. The evidence offered by the wife does not persuade me the stock figure and accessories etc had a market value of over $100,000.

3. For reasons given, considering the number of likely transactions and the use of a reputable third party seller (AH Company), I am comfortable in accepting the liquidator’s ultimate conclusion that it was not “commercial” for the liquidators to conduct a complete reconciliation of the sales and banking records.  A sample matching, which they undertook, did not raise any serious concerns.  On the evidence before this Court, I am unable to find, as the wife contends, that the husband either received funds for some items or sold items undervalue, recklessly or wantonly.  No “add back” is appropriate.

Cash payment by Mr AJ

1. Mr AJ gave evidence that around April 2016 he purchased a Brand 3 vehicle from the husband (who he described as the “owner by HH Pty Ltd”) for $30,000 “however the Invoice I received was to the value of $24,000.  I paid the remaining $6,000 in cash”.  Although under cross-examination by the husband he said he had the invoice at home, it was not produced.

2. The husband, in his submissions, says I should reject the evidence as no invoice was produced.  Although I found Mr AJ to be a truthful witness, and I accept he paid the husband $6,000, which the husband denies, I am not satisfied in the exercise of discretion, it should be “added back”.  Clearly funds were going everywhere, and I cannot be satisfied the invoice was for $24,000 as claimed, without its production, which would have been a simple task.  It is not likely this transaction would have been considered by the liquidator as their starting position was the inventory at 30 June 2016.

Jewellery, watches, cars, boats

1. The wife claims an “inglobo” add back of $50,000 for a number of unparticularised items of personal property.  The husband concedes that he bought and sold vehicles post separation to make a living.  He was entitled to do so.  He admitted, under cross-examination, that post separation he sold:

   “jewellery, watches, whatever I don’t need anymore, toys”

2. In his submissions, he confirmed he had sold some personal items to pay living expenses.  He claims the wife has significant jewellery including a Rolex watch which she did not concede.

3. I think it is more likely than not that both parties, at the time of separation at least, had possession of personal items.

4. However there is no reliable evidence as to the market value (as second hand goods) of any of these items.  Similarly, none of the furniture in each party’s current possession has been the subject of any valuation evidence.

5. I see no injustice to either party in not only rejecting the wife’s claim to “add back” $50,000 as against the husband, but also ignoring self-appraised values for the home furniture and possessions from the pool.

6. For completeness, I was confused by a suggestion that $8,105.83 should be “added back”, for the arrears of mortgage at the time of the hearing.  To do so is not consistent with authority – rather at best it is an indirect financial contribution by the wife who has permitted the husband to continue to remain in the home and where he has not maintained mortgage payments.

Undisclosed sale of three smaller vehicles

1. It is the wife’s case that at least three additional small vehicles are not accounted for in the books of HH Pty Ltd as stock of the company, sold by the husband personally.  The husband denies he sold any such stock and says in his written submissions that:

   “I refer to the liquidator report not identifying any stock not accounted for. Mr Brandon’s elaborate report is lacking any evidence, at best a fabrication that I fail to follow. Vehicle VIN numbers the only guide, no money trail, no names of buyers or sellers…”

2. The wife (Exhibit 1 – pages 221-222) identifies some unauthenticated business record (partly in Chinese) with handwritten notations, by which she asserts that at least three vehicles (identified at paragraph 248 of her Affidavit) were sold “on the side” by the husband for his personal gain “to the exclusion of the company”.

3. The wife claims these three small vehicles were missing, and maintained that assertion after an onsite inspection in July 2016.  The three vehicles identified by the wife are:

   a)2015 vehicle, Vin …01;

   b)2015 vehicle, Vin …65; and

   c)2015 vehicle, Vin …66.

4. The liquidator refers to the wife’s claim these vehicles were missing and says the sales of the three vehicles “are yet to be identified in the company’s records”.  This accords with the evidence of the wife (at paragraphs 249 and 250).

5. Although the wife claims a person bought a small vehicle from another person which she identified as vehicle Vin …65, the ultimate alleged purchaser of the vehicle did not present for cross-examination.  Paragraphs 260, 263 and 264 of the wife’s Affidavit are inadmissible, being hearsay.  No evidence from persons mentioned by the wife – namely Mr PP; Mr NN or Mr QQ – have either been presented as to alleged transactions or tested.  The suggestion of the wife (at paragraph 262) that in some way the husband “sought to interfere” with a witness is a serious allegation and fails for proof.

6. In circumstances where the three small vehicles mentioned above are different to the small vehicles referred to at paragraph 80 of the submissions, the argument of the wife seems to be that:

   a)the Court should accept her record at pages 221 – 222 of her tender bundle as accurate because she was “not challenged” on it.  However, the liquidator, perhaps on limited analysis, was satisfied that there were 18 vehicles of Brand 3 origin;

   b)the wife says, at paragraph 80 of the submissions that three different small vehicles, not apparently identified previously to the liquidator, were also sold by the husband, namely:

   i)Vin …89;

   ii)Vin …86; and

   iii)Vin …04,

   registered on 18 January 2017 (Exhibit 11); 19 June 2017 (Exhibit 12) and 12 December 2017 (Exhibit 13) respectively.  I note that at least two of these vehicles, the wife alleges, were sold as new vehicles after the liquidator was informed of their appointment by the wife in May 2017.

   c)the husband was untruthful in his evidence when cross-examined by Mr Brandon for the wife, by claiming that Annexure M revealed small vehicle  VIN …04, was one of the 15 small vehicles sold and accounted for by the liquidator.

7. The submission made by the wife on this admittedly confusing evidence that the “totality of the evidence supports the finding that the husband did sell the small vehicles and kept for himself the entirety of the sale proceeds”, and that his evasive behaviour and failure to make full and complete disclosure as required by earlier Orders, means the Court should treat the husband’s denials cautiously (Weir & Weir (1993) FLC 92-338; Black & Kellner (1992) FLC 92-287).

8. I was not impressed by the husband’s evidence on this issue.  The liquidator, I infer, had little choice but to accept the “directors” advice that only 18 large vehicles existed.  Even though the wife appeared to identify to the liquidator three vehicles unaccounted for, they were not the three vehicles referred to at paragraph 80 of the submissions.  No adequate explanation was offered by the wife as to why she did not identify all six vehicles as unaccounted, as she now asks the Court to do.

9. I can be comfortably satisfied that with no funds available to the liquidator to investigate further, no investigations took place.

10. On the totality of the evidence, and on the balance of probabilities, I find that the husband did sell some small vehicles not accounted for to the liquidator – but I cannot be satisfied how many or how much he may have received. It is an issue that I will need to further discuss when assessing the s 75(2)(o) factors.

Pool of assets and liabilities

1. I find the pool to be as follows, relying on earlier findings made, namely:

OWNER	PROPERTY		AMOUNT
ASSETS
Joint	UU Street, Suburb VV		$750,000
Husband	motor vehicle 1		$3,500
Wife	LL Pty Ltd		$45,000
$798,500
Wife	Superannuation		$22,304
$820,804
LIABILITIES
Joint	Home loan	$285,000
Joint	U School	$18,000	$303,000
Nett Pool	$517,804

1. Having identified the legal and equitable interests above, and where both parties urge the Court to make property adjustment Orders in their favour, I am satisfied that it is just and equitable to make an Order (see s 79(2)).

2. In respect of the items above, I find:

   a)the husband’s value of his motor vehicle 1 should be accepted as a statement against interest;

   b)the wife (at paragraph 160 of her submissions) confirms that the figure of $45,000 for her business is her estimate without any financials being provided or any estimation of valuation by a forensic accountant. However, I accept that her business was started, she says, with assistance from her brother post separation. Perhaps the more significant aspect of this new business is the income and benefits the wife obtains from the business, which is dealt with when considering s 75(2) factors below;

   c)the wife’s motor vehicle 2 was a purchase made by the wife post separation.  In my view, the value of the car (not the subject of any reliable evidence) and the debt she chose to arrange for its purchase should both be excluded from the pool of assets; and

   d)although the husband says the debt to U School should be excluded because the school has never contacted him, I accept the wife’s evidence that the liability accumulated mostly during the relationship when, as a couple, the parties facilitated both girls attending U School.  The fact that the oldest child who is in the father’s care has not continued to attend the school does not, in my view, affect the joint liability that accrued as a result of their joint decision during the relationship.  It should therefore be included as a joint debt.

3. It has to be noted that this very modest pool of remaining divisible assets does not truly represent these parties’ efforts over a relationship spanning 23 years to separation.  The liquidation of HH Pty Ltd, coupled with the high level of conflict (fuelled by chronic distrust), has only sadly caused the monies paid towards legal expenses as well as the emotional toll, to be disproportionate to the remaining pool.

Contributions

1. Although both parties were, in my assessment, inclined to minimise the non-financial contributions (including as a homemaker and parent) of the other party whilst maximising the extent and value of their own contributions during the 23 year relationship until separation in 2016, I would find that their individual but at times different contributions of a direct and indirect non-financial contribution to the homemaker/parent role and to their various business interests (including buying and selling real estate), should be regarded as equal.

2. They both had skills, talents and energy and both worked hard towards trying to secure a stable financial future for themselves and their children.

3. In respect of direct financial contributions, the wife, as I will now discuss, contends for significant contributions made by her parents and her brother – nearly all of which are disputed by the husband.  I have already identified that the payment made by the husband’s mother to the Suburb AF property and improvements to the Suburb VV property should be regarded as a contribution by the husband.

4. The wife asserts, inter alia that:

   a)in late 1999 “I started a new business, [RR Business]…My parents provided $40,000 to assist with purchasing the vehicles required for the business.  This is in addition to the $65,000 provided by my parents, which was applied by the Respondent to [SS business]” (paragraph 63); and

   b)in submissions, that she was not able to produce any bank statements showing these contributions given their historical nature and banks not retaining statements for this period.

5. The wife produced no evidence from her parents to support the making of these contributions, including, for example, the source from which her parents made these payments.  Although the submission is made that this does not mean the wife’s evidence should be “rejected”, it is proper to draw the inference (no explanation having been given for their failure to provide evidence), that they were not likely to give evidence supporting the wife’s testimony (see Jones & Dunkel (1959) 101 CLR 298).

6. The husband says that the parents are Australian citizens who live in Australia.  The husband denied the receipt of these funds from the wife’s parents and further says, at paragraph nine of his trial Affidavit, that:

   “9.      The applicant [sic] parents did not pay me the $65000,00 [sic] toward anything.  While the Applicant was on a Holiday in China, I won around $60,000 in a Jackpot.  The money was used as a deposit on our first house and toward[s] the purchase of our first [b]us.”

7. The wife gives evidence of the husband being a “gambler” and in her Affidavit in reply (filed 19 October 2018), she said she did not “know how much the Respondent won” but says “all he contributed to the purchase of the home was $25,000 and I otherwise was not informed of the use of any remaining winnings”.

8. The wife has not satisfied the evidentiary onus to establish that her parents contributed $105,000 around 1999 as she alleges.

9. At paragraphs 355 to 357, the wife, without setting out details as to how funds were utilised by the parties (save for $206,580 paid she says by her brother on 2 March 2012 for a “5% interest in the company”), says “my family has provided significant funds during the relationship, which I have particularised from memory”.  The wife sets out funds received “which I have been able to identify from bank statements” (paragraph 357).

10. In submissions (paragraph 136), the table of payments is reference to bank statements, to which I refer below.

11. The husband, in his Affidavit (at paragraph 16) swore that:

    “16.    … The table with the amounts shown is an invention, not true and not proven whatsoever.  While the amounts claimed are historical, have no relevance in these proceedings and that the applicant‘s Brother or Parents have not filed any documents to support this [ludicrous] claim.  It is [e]ntirely denied.”

12. The husband, in his submissions at paragraph 55 conceded the wife’s brother had paid the parties $50,000 in 2009 “as a deposit on a Business Transaction between the brother and us, a deal negotiated by the wife.  The brother later reneged on the agreement, causing us direct financial damage”.  To the best of my recollection, this allegation was not put to the wife during her cross-examination by the unrepresented husband.

13. The wife relies on various bank statements forming part of Exhibit 1, to demonstrate funds were received into the bank account.  As the wife herself deposed, she relied upon the bank statements to verify payments made.

14. In respect of the various pages relied upon and identified, I observe that:

NO.	DATE	AMOUNT	PARTICULARS
1.	7 July 2009	$50,000	Deposited to MM Pty Ltd account.  The person depositing is not identified however it appears to have been deposited from Suburb AC.  As no other statements around that time are produced, there is nothing to demonstrate how the funds were used.
2.	24 May 2011	$45,900	Overseas telegraph transfer (“TT”) from “Depositor 1” to parties’ joint account.
3.	26 May 2011	$46,500	Overseas TT from “Depositor 3” to parties’ joint account.  It is noted that on the same day $90,000 was transferred to the parties’ equity account.
4.	26 May 2011	$25,000	Deposited to MM Pty Ltd account.  The overseas TT identifies the depositor as “Depositor 2” shortly after these funds were transferred to the business account (27 May 2011 - $30,000)
5.	26 May 2011	$11,800	Deposited to MM Pty Ltd account.  The overseas TT identifies the depositor as “Depositor 4” and these funds constituted part of the above transfer on 27 May 2011.
6.	30 May 2011	$21,000	Deposited to MM Pty Ltd account.  The overseas TT identifies the depositor as “Depositor 2”.  The following day $20,000 was transferred to the joint equity account.
7.	25 August 2011	$13,000	Deposited to the joint account with depositor identified as “Depositor 5”.  It was not an overseas TT.
8.	26 September 2011	$47,650	Deposited to MM Pty Ltd account.  The overseas TT identifies the depositor as “Depositor 6”.  On the same day $45,000 was transferred out.
9.	28 September 2011	$47,659	Deposited to MM Pty Ltd account.  The overseas TT identifies the depositor as “Depositor 7”.  The same day $50,000 was transferred to the “Access Loan” account.
10.	10 April 2012	$25,055.78	Deposited to the joint account.  The overseas TT identifies the depositor as “Depositor 8”.

1. These 10 transactions, relied upon by the wife to evidence contributions made by her brother, must be seen in the context of:

   a)No evidence provided by the brother of the wife;

   b)The deposits were for varied amounts; to different accounts and by apparently the following different depositors:

   i)Depositor 1;

   ii)Depositor 2 x 2;

   iii)Depositor 3;

   iv)Depositor 4;

   v)Depositor 5;

   vi)Depositor 6;

   vii)Depositor 7; and

   viii)Depositor 8.

   c)The wife offers to the Court no information about, if these deposits were from her brother, why so many different depositors are identified;

   d)The Court is unclear as to the wife’s brother’s preferred named.  Whilst she says her brother is involved in her company LL Pty Ltd, the company search placed in evidence by the husband (see Annexure “A” to the Affidavit sworn on 20 September 2018 – and tendered as a bundle on 2 November 2018), reveals the other director and shareholder in the company to be Mr AP – a name not revealed in the list of depositors;

   e)No explanation is offered by the wife as to how these funds were used at the time.  Furthermore, the final payment of $25,055.78 is for such a precise amount it calls for some explanation;

   f)The wife, whilst saying that the brother paid $206,580 on 2 March 2012 for a 5% interest in the company, the following issues fairly arise:

   i)If 5% of the company was worth over $200,000, this suggests the company had a value at the time of over $4 million.  On the evidence produced, this could only have been HH Pty Ltd and such a value seems outlandish; and

   ii)The wife produced, at page 44 of her exhibits, a bank statement for the joint account showing a deposit (not an overseas transfer) of $206,580 on 2 March 2012 by “Depositor 9” – yet another depositor.  Interestingly, within three days of this deposit, withdrawals on 5 March 2012 totalling $170,000 were made and are shown as “TFR Loan FR Mr AQ”.

1. For the wife to be able to claim as a contribution within the meaning of s 79, for funds from a relation, she needs to be able to demonstrate more than mere bank deposits. The nature and identity of the depositors is uncertain. The use of the funds is not explained. Whilst the Court is prepared to accept the deposit of $206,580 was made by the wife’s brother as she says, on her own evidence it was not a “contribution” but was the agreed purchase price for a 5% interest in the company – and the liquidators report reveals he held shares reflecting that interest.

2. For these reasons, I am not persuaded that it is just and equitable to allow the wife to be given credit for a contribution she claims her brother made totalling $333,364.78.

3. The wife says her parents (additional to the contribution said to have been made in 1999 (which I have previously discussed)) provided her with funds totalling $74,422.  Although again the wife has offered no evidence from her parents (or an explanation as to why they have not corroborated their daughter’s evidence) nor does the wife say how the funds were used.

4. Reference to the bank statements identified in Exhibit 1 reveals the following:

1.	6 June 2012	$29,982	Deposit to joint account identified as deposited by Depositor 9.  $25,000 of these funds, on the same day, were transferred to another account.
2.	21 March 2013	$19,980	Deposit to joint account identified as deposited by Depositor 9, of which amount $10,000 was immediately transferred to another account.  It is noted that before the deposit was made the account had a balance of $1,045
3.	15 April 2013	$24,460	Deposited to joint account by way of overseas transfer with the depositor identified as Depositor 10.  On the same day a transfer described as a “Loan to HH Pty Ltd” was undertaken

1. Again the difficulty with these payments, apart from other issues previously raised, is context.  For example, whilst it might be possible to infer that the funds from “Depositor 10” were used to support the business – who is “Depositor 10”?

2. The wife has had these bank statements at her disposal for some time, and whilst I understand the numerous transactions occurred many years ago, it would have been a relatively simple exercise to explain, at least, the origin of the payments and the different names identified in the bank statements.

3. The wife knew the husband had contested the payments.  I give no weight to his somewhat scandalous suggestions that the funds might have come from criminal activities.  However the wife has had an evidentiary onus to discharge – and she has failed to do so.  I am therefore not prepared to give the wife credit for alleged contributions made by his parents.

4. In my view, post separation contributions to be weighed into the mix with the other varied and diverse contributions over the previous 23 years included:

   a)the primary care and support by the wife of C and the primary care and support by the husband of B;

   b)the husband’s role in assisting the closure of the business HH Pty Ltd;

   c)the wife’s role in establishing the new business LL Pty Ltd; and

   d)the wife’s contribution by allowing the husband to occupy the family home and not always contributing to the mortgage payments.

5. I do not ignore the contribution established to the evidentiary standard, of the husband’s mother, but that must be seen within the context of the rent free accommodation she has enjoyed, firstly in the Suburb AF unit and then in the Suburb VV home.

6. My ultimate assessment is that the parties’ contribution based entitlements should be assessed as broadly equal – if not slightly favouring the wife.

Section 75(2) factors

1. The wife is over 10 years younger than the husband, who is now aged 63 years.  Both enjoy reasonable health.

2. The husband says he is now in receipt of a carer’s payment as the carer for his elderly mother and, in my view, whilst the wife submits that the husband “could earn $250,000 per year” on his own admission I regarded the husband’s comments as “bravado” and unrealistic when one considers his lack of qualifications and age.  He still holds a business licence but, to the extent that for some time in the past some of the parties’ businesses were profitable, their last business HH Pty Ltd was not.  There is no evidence that the husband has the necessary capital or financial backing to start a new business.  He currently relies on Centrelink payments and child support paid by the wife.

3. The wife is both energetic and has demonstrated the capacity to generate an income from her new business LL Pty Ltd.  The husband continually asserted that effectively the wife “stole” his business (HH Pty Ltd) and although she now admits to operating a business (incorporated in July 2016) post separation initially engaged in the real estate industry with a view to connecting with and attracting Chinese based purchasers, as she deposes to at paragraphs 398 to 420, her business now has the Brand 3 vehicles.

4. The wife says she was offered the Brand 3 business in February 2018 as she also deals with services for Brand 3.  She trades through two business names and says for the period 1 July 2017 to 30 September 2018 the “business made a nett profit of $103,139.38” (paragraph 420).  The wife described this financial performance as “very modest profits”, which I regard as an understatement.

5. The wife’s statement of financial circumstances sworn 14 September 2018 disclosed at that time she was an employee of the Brand 3 company at a weekly wage of $1,154 gross.  At the time of the hearing, I am not satisfied that the wife fully disclosed the extent of her income, however I am comfortably satisfied that the wife’s income and earning capacity is significantly greater than that of the husband – and to some degree arises from business relationships which were developed during the operation of the businesses MM Pty Ltd and HH Pty Ltd.  The Court did not have the same level of financial detail as it appears was available to the Child Support Agency when they were asked by the husband for an administrative departure of child support from August 2018.  The decision of the Child Support Agency dated 15 February 2019, for the reasons set out in that assessment (see Annexure “B” to the husband’s Affidavit filed 27 February 2019) resulted in an adjustment to the wife’s taxable income from 15 August 2018 to a figure of $150,000.  The Court is unaware whether further appeals to that assessment were launched, however without adopting the figure assessed (or the methodology), the evidence of that assessment does support the finding of this Court, that the wife has a significantly superior income and earning capacity to that of the husband.

6. The wife is assessed to pay child support to the husband of $318 per week until B, who is in the husband’s care, turns 18 in August 2021.  I accept the wife cannot expect to receive any child support from the husband towards the expenses of C, who is in her full-time care, and does not turn 18 years until January 2024.  The factor, both as to child support and living expenses, weighs in favour of the wife.

7. The effect of the property adjustment orders in such a small pool do not significantly impact on the adjustment under s 75(2)(n), nor does the modest superannuation entitlement the wife will retain of $22,304.

8. Apart from matters now to be discussed under s 75(2)(o), the findings made under this heading would compel an adjustment to the husband in the order of 15% to 20% in this small pool (a differential to the husband of around $207,000) however, in my assessment the adjustment should be reduced because of the findings earlier made about the husband’s retention of funds from the sale of the small vehicle to Mr AJ and the other small vehicles referred to at paragraph 95 of these Reasons.

9. I assess that, overall, an adjustment in favour of the husband of 12.5% is appropriate – resulting in a differential adjustment to him in monetary terms of 25% of the pool or approximately $125,000.  Considering the wife’s income and potential earning capacity I regard this adjustment as just.

Form of orders

1. Authority makes it clear that it is the form and effect of the orders which must be considered and not the mere percentage division, to ascertain whether justice and equity to both parties has been achieved.

2. In this regard however, orders which divide the pool of assets as to 62.5% to the husband and 37.5% to the wife, would require the husband, who wishes to retain the Suburb VV home in which he lives with B and his mother today, to pay the wife the sum of $145,000 (rounded up), calculated as follows:

62.5% of $517,804 - $323,627 made up by:
Suburb VV home	$750,000
motor vehicle 1	$3,500
$753,500
Less mortgage	$285,000
$468,500
Less payment to wife	$144,873
Nett		$323,627

The wife’s 37.5% share of $517,804 = $194,177 made up by:
LL Pty Ltd	$45,000
Superannuation	$22,304
$67,304
Less U School’s debt	$18,000
$49,304
Plus payment by husband	$144,873
$194,177

1. I regard orders which achieve this distribution as just and equitable.

2. In addition to the payment the husband is required to make to the wife of $145,000 (rounded up), the husband will also be required to pay the wife’s costs of $15,000 pursuant to an Order by Austin J made 17 November 2016 (Order  1.11).

3. I accept that the mortgage balance is likely to be different now than the amount at the time of the hearing ($285,000), however I see no injustice in any increase to that debt being met by the husband who has had the sole use and occupation of the home since separation.

4. I propose to adjourn this matter to allow the husband a short opportunity to satisfy himself as to his capacity to raise sufficient funds to discharge the current mortgage and pay the wife $160,000, so as to enable him to retain the Suburb VV home.  The matter will be listed for pronouncement of orders at 9.30am on 14 October 2020.

5. If the husband is unable to secure the necessary funds, then the home will need to be sold.  In that regard, I would not be prepared to appoint the wife as trustee for the purpose of the sale, however I would direct the solicitors for the wife to provide to the husband, and submit to the Court by 4.00pm on 7 October 2020 a form of order to effect a sale initially by private treaty for 60 days and thereafter by auction nominating the real estate agent she prefers.  The husband shall by 4.00pm on 12 October 2020 indicate any variations to the alternate order for sale of the property with any different real estate agent he prefers.

6. It would be the Courts intention, after hearing submissions as identified under paragraphs 139 and 140 of these Reasons, to pronounce orders consistent with these reasons.

7. Although I feel confident that the wife, with the benefit of her legal advice, will understand why the orders she sought as set out in her submissions will not be made, I feel compelled to explain through these Reasons why the orders sought in the “Final Amended Response” filed by the husband on 27 February 2019, will not be made, namely:

   a)proposed orders 1 to 4 of the Response relates to HH Pty Ltd.  As is made clear from the Report of the provisional liquidator, further funds were required to enable the liquidator to progress the administration to finalisation.  The creditors meeting on 27 March 2018 approved the rate of remuneration for the liquidator.  However there is no evidence produced to the Court as to the current status of the liquidation.  However, although I accept this Court made the order for provisional liquidation and as a result maintains some supervisory powers, no proper evidentiary basis was established for proposed orders 1-4;

   b)whilst the Court understands that the husband sees benefit in the family home being “retained until C reaches 18 years of age or until the Respondent’s [m]other passes, whichever occurs last” (Order 5), the need to achieve finality between the husband and wife (as compelled by s 81 of the Family Law Act 1975) and the fact that the child does not live in the home (but elsewhere with the mother), make any contemplation of delaying finalisation neither just or equitable;

   c)for reasons already given, the husband’s claim – on behalf of his mother – to an “entitlement to the amount of $112,500 in the family home” should be dismissed;

   d)the Court is prepared to order that the wife be entitled to any benefit remaining from ZZ Organisation for B to the husband and for C to the wife;

   e)there is no basis, in my view, to set aside the costs Order specifically made by Austin J.  That Order could have been the subject of leave to appeal, but was not.  As noted at paragraph 137, it should be satisfied by the husband as Austin J so ordered; and

   f)I gave oral reasons at the commencement of the hearing why the husband’s very late and unprescribed claim for “monthly spouse maintenance” (Order 14 in the Response), was to be dismissed.  Nothing further needs to be said at this time.

I certify that the preceding one-hundred and forty-two (142) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Baumann delivered on 18 September 2020.

Associate: 

Date:  18 September 2020