IABH & HRBH - [2010] FamCA 110

FAMILY COURT OF AUSTRALIA

IABH & HRBH

[2010] FamCA 110

FAMILY LAW - PROPERTY - The effect of the Full Court’s orders upon the exercise of discretion when considering contributions - capital gains tax - consideration of the four “principles” in Rosati - the assessment of capital gains tax as a significant s 75(2) factor - consideration of lifestyle since separation as a s 75(2)(g) matter - consideration of the wife’s health, disparity in the party’s wealth and other s 79(4)(d) - (g) matters

Family Law Act 1975 (Cth)

Z & Z (2005) FLC 93-241
Omacini v Omacini (2005) FLC 93-218
HDM & MM and SJM [2006] FamCA 47
Farnell and Farnell (1996) FLC 92-681
Gollings & Scott (2007) FLC 93-319
C & C [1998] FamCA 143
Chorn & Hopkins (2004) FLC 93-204
DJM & JLM (1998) FLC 92-816
Rosati v Rosati (1998) FLC 92-804
Brandt & Brandt (1997) FLC 92-758
Robb & Robb (1995) FLC 92-555
Tomasetti and Tomasetti (2000) FLC 93-023
T & D & Anor [2006] FamCA 1248
Lawrie & Lawrie (1981) FLC 91-102
Waters and Jurek (1995) FLC 92-635

APPLICANT:

Ms IABH

RESPONDENT:

Mr HRBH

FILE NUMBER:

TVF

2003

DATE DELIVERED:

22 February 2010

PLACE DELIVERED:

Sydney

PLACE HEARD:

Cairns

JUDGMENT OF:

Watts J

HEARING DATE:

19, 20, 23 and 24 November 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr North, senior counsel

SOLICITOR FOR THE APPLICANT:

Taussig Cherrie & Associates

COUNSEL FOR THE RESPONDENT:

Mr Kirk, senior counsel

SOLICITOR FOR THE RESPONDENT:

Miller Harris Lawyers

Orders

An order be made pursuant to s 79 Family Law Act 1975 in the terms of paragraphs 2 to 7 below.
Within 60 days the Husband pay to the Wife the sum of $328,820.
In default of the payment by the Husband in accordance with paragraph 2, the Husband sign all documents and do all such acts and things as are required to sell the real property at P being the whole of the land more particularly described as Lot … on Building Unit Plan … in the County of …, Parish of … in the State of Queensland ("the Villa") and upon the settlement of the sale of the Villa, the proceeds be applied as follows:
3.1.Firstly, to pay the costs of and incidental to the sale;
3.2.Secondly, to discharge any mortgages registered on the title;
3.3.Thirdly, to make the payment as per Order 2 to the Wife together with interest calculated in accordance with the Family Law Act 1975 and the Family Law Rules 2004 from the date of default until payment;
3.4.The balance (if any) to the Husband.
In the event that the proceeds of sale of the Villa are insufficient to meet the payment by the Husband in accordance with paragraph 2 hereof, the Husband in his capacity as a Director of WB Pty Ltd sign all documents and do such all acts and things as are required to sell the real property at M Street, P being the whole of the land more particularly described as Lot … on Registered Plan … in the County of …, Parish of … in the State of Queensland ("M Street") and upon the settlement of the sale of M Street, the proceeds be applied as follows:
4.1.Firstly, to pay the costs of and incidental to the sale;
4.2.Secondly, to discharge any mortgages registered on the title;
4.3.Thirdly, to make the payment as per Order 2 to the Wife together with interest calculated in accordance with the Family Law Act 1975 and the Family Law Rules 2004 from the date of default until payment;
4.4.The balance (if any) to the Husband.
In the event that the proceeds of sale of the Villa and M Street are insufficient to meet the payment by the Husband in accordance with paragraph 2, the Husband in his capacity as a director of K Pty Ltd sign all documents and do all acts and things as are required to sell the real property at G Street, P being the whole of the land more particularly described as Lot … on Crown Plan PTD … in the County of …, Parish of … in the State of Queensland ("G Street Shops") and upon the settlement of the sale of the G Street shops, the proceeds be applied as follows:
5.1.Firstly, to pay the costs of and incidental to the sale;
5.2.Secondly, to discharge any mortgages registered on the title;
5.3.Thirdly, to make the payment as per Order 2 to the Wife together with interest calculated in accordance with the Family Law Act 1975 and the Family Law Rules 2004 from the date of default until payment;
5.4.The balance (if any) to the Husband.
The Husband indemnify the Wife and keep her indemnified in relation to all past, present and future liabilities including:
6.1.income tax, goods and services tax, fringe benefits tax, capital gains tax and any other tax and/or penalties howsoever incurred by the Wife as a result of her previous interest in, and/or her involvement in, any company and/or trust entity which is to be retained by the Husband in accordance with any Orders made by this Honourable Court (including the Orders made by the Honourable Justice Buckley on 22 March 2005 and the Honourable Deputy Chief Justice Faulks on 8 October 2008);
6.2.any Guarantees signed by the Wife during the course of the marriage and cause the Wife to be discharged from any liability arising under the Guarantees;
6.3.any liability for the debts of WB Pty Ltd, the BH Family Trust and/or K Pty Ltd ("the business entities") including any debit or credit loan accounts; and
6.4.any other liabilities which have arisen or are yet to arise as a result of the Wife's previous involvement in the business entities.
Unless specified in these orders and except for the purposes of enforcing the payment of any money due under these or any subsequent orders:
7.1.Each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in the possession of such party as at this date;
7.2.Money standing to the credit of the parties in any bank account is to be become the property of the person named as the owner of the bank account;
7.3.Each party hereby foregoes any claim they may have to any superannuation benefits belonging to or earned by the other;
7.4.All insurance policies shall become the sole property of the owner named thereon;
7.5.Each party be liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.
Pursuant to Section 106A of the Family Law Act 1975, a Registrar or a Deputy Registrar of the Family Court of Australia is hereby appointed to execute all deeds and documents in the name of the Husband and do all acts and things necessary to give validity and operation to these Orders.
Either party have liberty to apply on fourteen days notice to apply for any order relating to the implementation of these Orders.

IT IS NOTED that publication of this judgment under the pseudonym IABH & HRBH is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: TVF 6 of 2003

MS IABH

Applicant

And

MR HRBH

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

This case is about what orders should be made finally altering the property of the parties to the marriage. The wife also sought an order for adult child maintenance but that application was abandoned in final submissions.
The matter has had an unfortunate and unusual history. The first trial relating to the alteration of the parties’ property interests took place in November 2004 before Buckley J, who delivered a judgment on 22 March 2005. The orders His Honour made were successfully appealed in August 2006 and the Full Court remitted the matter for a re-hearing. There was a retrial before Faulks DCJ. His Honour made orders altering the property of the parties and orders in relation to child support on 8 October 2008. On 23 April 2009 the Full Court upheld a second appeal, by consent, and set aside the orders made by Faulks DCJ altering property. Again, the matter was remitted for rehearing, on the same basis as had been ordered by the first Full Court.
Orders were made by that Full Court on 4 August 2006 in the following terms, inter alia:-
3.That the proceedings be remitted for re-hearing before a single judge other than the original Trial Judge, provided that:
(a) the proceedings for settlement of property be limited to:
(i)further evidence with respect to valuations of assets and quantification of liabilities as at the date of the new trial;
(ii)further evidence with respect to contributions made subsequent to 15 November 2004;
(iii)Further evidence with respect of s 75(2).
(b) The contribution based entitlements of the parties to the assets of the marriage as found by the original trial judge as at 15 November 2004 be accepted as 70 percent to the husband and 30 percent to the wife.
The Full Court indicated, at paragraph 34 of its reasons of 4 August 2006, that the factual background as found by Buckley J (paragraphs 14 – 32 of his judgment, including his findings about the controversial issue of the cohabitation commencement date) should stand and not be revisited. At paragraph 36 of their judgment, the Full Court said that the trial judge’s 70/30 assessment of the contributions to the property and the family to 15 November 2004 (paragraph 82 – 109 of his judgment) should stand and not be revisited.
The findings made by Buckley J at those paragraphs of his judgment are therefore, by direction of the Full Court, incorporated as findings made in this judgment.

SHORT HISTORY

The husband was born in 1926 and he is aged 83. The husband is primarily retired, but still is actively involved in the management of the commercial properties.
The wife was born in 1952 and is currently aged 57. The wife is primarily engaged in home duties.
The parties commenced cohabitation in February 1987 and married in 1991.
There are two children of the marriage, J was born in 1989. He is currently aged 20 years and was in his second year of a Bachelor Degree at University on the Gold Coast in 2009. J intends to move back to live with his mother.
E was born in April 1993. He is now 16 years of age. He lives with the wife on the Gold Coast and has completed year 10.
The parties finally separated on 12 November 2002.
Pursuant to the orders made by Justice Buckley on 22 March 2005, the wife received a payment of $1,439,167.80 from the husband on 23 May 2005. The wife received a further payment from the husband of $514,498.88 on or about 5 or 6 November 2008 following orders made by Faulks DCJ on 8 October 2008.

THE APPLICATIONS

Wife

At the commencement of the hearing, the wife sought orders for alteration of property and adult child maintenance in the following terms (see wife’s case information document):
1.That within 30 days the Husband pay to the Wife a sum equivalent to 45% of the asset pool taking into account:
(a)    the monies received by the Wife pursuant to paragraph 15 of the Orders made by the Honourable Justice Buckley on 22 March 2005 and the property transferred to and/or retained by the Wife pursuant to paragraphs 16 and 17 of the said Orders; and
(b)    the monies received by the Wife pursuant to paragraph 1 of the Orders made by the Honourable Deputy Chief Justice Faulks on 8 October 2008 and the property transferred to and/or retained by the Wife pursuant to paragraphs 1 and 7 of the said Orders ("the payment").
2.That in default of the payment by the Husband in accordance with paragraph 1, the Husband sign all documents and do all such acts and things as are required to sell the real property at [P] in the State of Queensland ("the Villa") and upon the settlement of the sale of the Villa, the proceeds be applied as follows:
(a)    Firstly, to pay the costs of and incidental to the sale;
(b)    Secondly, to discharge any mortgages registered on the title;
(c) Thirdly, to make the payment to the Wife together with interest calculated in accordance with the Family Law Act 1975 and the Family Law Rules 2004 from the date of default until payment;
(d)    The balance (if any) to the Husband.
3.That in the event that the proceeds of sale of the Villa are insufficient to meet the payment by the Husband in accordance with paragraph 1 hereof, the Husband in his capacity as a Director of [WB] Pty Ltd sign all documents and do such all acts and things as are required to sell the real property at [M Street] and upon the settlement of the sale of [M Street], the proceeds be applied as follows:
(a)    Firstly, to pay the costs of and incidental to the sale;
(b)    Secondly, to discharge any mortgages registered on the title;
(c) Thirdly, to make the payment to the Wife together with interest calculated in accordance with the Family Law Act 1975 and the Family Law Rules 2004 from the date of default until payment;
(d)    The balance (if any) to the Husband.
4.That in the event that the proceeds of sale of the Villa and [M Street] are insufficient to meet the payment by the Husband in accordance with paragraph 1, the Husband in his capacity as a director of [K] Pty Ltd sign all documents and do all acts and things as are required to sell the real property [G Street] in the State of Queensland ("[G Street Shops]") and upon the settlement of the sale of the [G Street shops], the proceeds be applied as follows:
(a)    Firstly, to pay the costs of and incidental to the sale;
(b)    Secondly, to discharge any mortgages registered on the title;
(c) Thirdly, to make the payment to the Wife together with interest calculated in accordance with the Family Law Act 1975 and the Family Law Rules 2004 from the date of default until payment;
(d)    The balance (if any) to the Husband.
5.That pursuant to Section 106A of the Family Law Act 1975, the Registrar or a Deputy Registrar of the Family Court of Australia at Cairns is hereby appointed to execute all deeds and documents in the name of the Husband and do all acts and things necessary to give validity and operation to these Orders.
6.That the Husband indemnify the Wife and keep her indemnified in relation to all past, present and future liabilities including:
(a)    income tax, goods and services tax, fringe benefits tax, capital gains tax and any other tax and/or penalties howsoever incurred by the Wife as a result of her previous interest in, and/or her involvement in, any company and/or trust entity which is to be retained by the Husband in accordance with any Orders made by this Honourable Court (including the Orders made by the Honourable Justice Buckley on 22 March 2005 and the Honourable Deputy Chief Justice Faulks on 8 October 2009 [sic]);
(b)    any Guarantees signed by the Wife during the course of the marriage and cause the Wife to be discharged from any liability arising under the Guarantees;
(c)    any liability for the debts of [WB] Pty Ltd, the [BH] Family Trust and/or [K] Pty Ltd ("the business entities") including any debit or credit loan accounts; and
(d)    any other liabilities which have arisen or are yet to arise as a result of the Wife's previous involvement in the business entities.
7.That unless specified in these orders and except for the purposes of enforcing the payment of any money due under these or any subsequent orders:
(a)    Each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in the possession of such party as at this date.
(b)    Money standing to the credit of the parties in any bank account is to be become the property of the person named as the owner of the bank account.
(c)    Each party hereby foregoes any claim they may have to any superannuation benefits belonging to or earned by the other.
(d)    All insurance policies shall become the sole property of the owner named thereon.
(e)    Each party be liable for and indemnity the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.
ADULT CHILD MAINTENANCE
8.That pursuant to section 66L of the Family Law Act 1975 the Husband continue to pay or cause to be paid adult child maintenance in respect of [J] born […] 1989 ("[J]"), comprising:
(a)    Tertiary fees and associated charges;
(b)    Accommodation and all living expenses for [J] whilst he is living independently or with the Wife;
(c)    Text books, desktop computer, notebook computer and computer maintenance;
(d)    Motor vehicle expenses including Mitsubishi Lancer lease repayments, motor vehicle registration, comprehensive motor vehicle insurance, maintenance, repairs and associated fines;
(e)    Business, casual, sporting and winter clothing;
(f)     Mobile telephone, call charges and associated services and charges;
(g)    Airfares between Cairns and the Gold Coast and for holidays;
(h)    Holiday accommodation and expenses;
(i)     Non-rebateable medical, dental, counselling and pharmaceutical expenses;
(j)     Regular cash payments to [J’s] debit card account; and
(k)    Provision of a credit card with a monthly limit of $2,000,
such support to continue until [J] is self-supporting.
9.That the Husband pay or cause to be paid the adult child maintenance referred to in paragraph 1 [sic] directly to [J] or to the provider or if an expense has been paid by the Wife, pay or cause to be paid the funds into a bank account nominated by the Wife within 7 days of a request for reimbursement being made.
10.Such further and other orders as this Honourable Court deems necessary in all of the circumstances.
The wife’s application for adult child maintenance was largely in a form which reflected the level of support which the husband currently gave J. During final submissions, senior counsel for the wife announced that the wife had heard the assurances given by and on behalf of the husband that the husband would continue to support J in the manner largely described in the order sought by the wife. On that basis, the wife withdrew her application for adult child maintenance.
In addition, senior counsel for the wife confirmed that the wife did not seek order 1 be made literally in the way it was drafted. What was sought was an order for a dollar amount. It was intended that the court would calculate that sum by calculating the amount which is 45 percent of the value of the composite asset pool and then deducting the value of the other net assets retained by the wife.

Husband

The husband seeks an order that the wife’s application in relation to property settlement and adult child maintenance be dismissed (consistent with his amended response which was filed on 6 November 2004) and that the husband and wife each retain as his or her (as the case may be) own property absolutely, all assets and resources of whatsoever description and wheresoever situate both real and personal of which that party is the legal owner and/or in the possession of and/or under the control of that party at the date of the order.

DOCUMENTS READ

Wife

The following documents were read in the wife’s case:
17.1.Wife’s affidavit filed 4.10.2004;
17.2.wife’s affidavit filed 29.3.07;
17.3.wife’s affidavit filed 2.11.09;
17.4.wife’s updated financial statement filed 2.11.09;
17.5.affidavit of JM filed 30.10.09;
17.6.affidavit of Dr RW filed 30.10.09;
17.7.affidavit of Dr F filed 30.10.09;
17.8.affidavit of Mr DH filed 30.10.09;
17.9.affidavit of MB filed 30.10.09;
17.10.affidavit of DS filed 30.10.09 ;
17.11.affidavit of Mr DD filed 30.10.09;
17.12.affidavit of Mr FD filed 30.10.09
17.13.affidavit of Mr RH filed 30.10.09; and
17.14.affidavit of Mr ON 16.11.09.

Husband

The following documents were read in the husband’s case:
18.1.husband’s affidavit filed 6.10.04;
18.2.husband’s affidavit filed 29.3.07;
18.3.husband’s affidavit filed 3.5.07;
18.4.husband’s affidavit filed 2.11.09;
18.5.husband’s financial statement filed 2.11.09;
18.6.husband’s affidavit filed 13.11.09;
18.7.affidavit of Mr SQ filed 2.11.09;
18.8.affidavit of Dr JC filed 27.10.09;
18.9.affidavit of Dr JC filed 16.11.09;
18.10.affidavit of Mr RH filed 30.10.09;
18.11.affidavit of Ms MD filed 3.11.09;
18.12.affidavit of JL filed 19.11.2009;
18.13.affidavit of LL filed 19.11.09;
18.14.affidavit of Michael Keogh filed 19.11.09; and
18.15.affidavit of Ms MD filed 20.11.09.

The husband also sought to read the affidavits of Mr DD, Mr FD and Mr ON (which were in the wife’s list of documents).
In addition I was asked to read the reasons and the orders of Buckley J of 22 March 2005; the reasons and orders of the Full Court of 18 May 2006; the reasons and orders of the Full Court of 4 August 2006 and the orders of the Full Court of 24 April 2009.

CREDIT

The Full Court has required me to accept the factual background as found by Buckley J at paragraphs 14 to 32 of his judgment. These paragraphs include paragraphs 26 to 29, which contain His Honour’s findings as to the credit of the parties. Both senior counsel accepted that the Full Court did not intend those credit findings (being findings about the credit of the parties in 2004 and which underpinned the other factual findings which His Honour made), to be ones which fettered my ability to make credit findings based upon impressions I have formed when the parties gave evidence before me.
In final submissions, neither senior counsel made any concerted attack on respective credit of the other party.
I am bound by earlier findings of Buckley J in relation to historical matters relevant to contributions made by both parties up to 15 November 2004.

Wife

The wife in oral evidence agreed that a sworn statement that she had made at paragraph 126 of her affidavit of 4 October 2004 contained an incorrect description of the property in Germany. There is only one apartment on each of the first and second floors and there is no beer garden. I accept her oral evidence that there is an error in her original affidavit.
Ms MD, a psychologist who interviewed the wife on behalf of the husband, noted that the wife “is an individual who is seemingly without guile. More over, she never spoke with rancour about her ex-husband; rather, she sounded somewhat spooked (intimidated)”. That description is consistent with the wife’s presentation in the witness box before me.

Husband

Overall I was satisfied with the manner in which the husband gave his evidence. There were some areas of the husband’s evidence with which I had some difficulty. For example, the husband incorrectly asserted that he had not, prior to this time, been under pressure from his lenders arising out of his debt to equity ratio.
On one occasion the husband candidly indicated that he had been admonished by his senior counsel after giving evidence at a previous hearing during which he frankly indicated his future intention in relation to the sale of property in a way that did not fit easily with the arguments senior counsel wished to make to the court on the husband’s behalf relating to capital gains tax.
Senior counsel for the wife said that without meaning “to be unduly critical of the husband for his credit”, “the husband has tailored his evidence…..perhaps after the scolding he got from Mr Kirk, that he has become appreciative that his expressions of intention may have a bearing upon whether one takes capital gains tax, or realisation costs, or…..retained earnings on the winding up into account, off the pool or is the 75(2) [sic] factor, and that has financial consequences for him”. Senior counsel for the wife criticised the parts of the husband’s affidavit that involved themselves in an averaging exercise with respect to the properties. He attacks the artificiality of that evidence and criticises the husband as someone who is attempting to promote a particular outcome and who would seek to swear his affidavit setting out his intentions in a way that would lead to an underpinning of the result he was attempting to achieve.
I agree with senior counsel for the wife that I have to view with circumspection anything the husband has said about his future intentions in relation to the sale of real estate.
The fact that I do not make any finding of credit against the husband, on an overall basis, does not mean that I have to accept his current statement of intention in relation to the future of his real property holdings as positively defining what will in fact happen in the future. Another way of expressing this is to say that inconsistencies in the husband’s evidence in relation to past statements and his current statements in relation to his future intention in respect to real estate do not so much go to the husband’s credit but as to highlighting the difference between what the husband’s current stated intention might be and what might, in fact, be implemented in the future.

Conclusions in relation to credit

Neither party’s credit was significantly impugned. Not a lot turns on findings of credit in this case. I have not been asked to make any findings about any alleged history of family violence. Findings can be made about what might be likely to happen in relation to the husband’s property portfolio in the future without making a finding that the husband is deliberately attempting to deceive the court in relation to his current stated intention.

CHRONOLOGY

The husband was born in 1926 and he is aged 83.
The wife was born in 1952 and she is aged 57 years.
The parties met in 1984.
In about September 1984 the wife moved to O in New South Wales and resided in a property owned by the husband. The husband, his daughter, and his grandson also resided in that property.
The wife, with considerable assistance from the husband, opened a Restaurant in January 1985. The parties had casual sexual relations on two occasions during this period but the husband was in relationships with other women.
In about June 1985 the wife rented a two bedroom house and resided there with her sister.
In October 1985 the restaurant was sold and the sale was completed on 1 December 1985.
The wife was injured in a horse riding accident on 13 December 1985 and had two operations on her knee between then and June 1986 during which time she resided in the husband’s property.
The parties continued a casual sexual relationship in 1986.
Buckley J, at paragraph 25 of his reasons for judgment dated 22 March 2005, finds that the parties are likely to have commenced cohabitation on a permanent basis on or about February 1987 when the wife resumed residing at a property at O.
The parties married in 1991.
J was born in 1989 and E was born in 1993.
The parties finally separated on 12 November 2002.
The wife asserts the husband had commenced a friendship with Ms K some years prior to the separation.
On 21 November 2002 the wife initiated these proceedings.
Buckley J heard the initial trial (the first hearing) between 9 and 15 November 2004 and delivered a judgment on 22 March 2005.
On 18 April 2005 the wife lodged a notice of appeal against the orders made by Buckley J on 22 March 2005 (the first appeal).
The wife received a payment from the husband on 23 May 2005 in the sum of $1,439,167.80, which was the sum Buckley J had ordered the husband pay the wife.
On 30 June 2005 the husband borrowed $250,000 to pay out the Westpac guarantee on a liability known as the S debt.
On 18 July 2005 the husband transferred to the wife the home at K Street as he was at that time required to do by order 16 made by Buckley J on 22 March 2005.
In August 2005 the wife commenced a relationship with Mr N.
On 10 August 2005 the Full Court heard the first appeal.
On 27 September 2005 the wife and her sister executed a deed confirming a debt owed by the wife’s sister to the wife in the sum of $80,000.
In November 2005 the wife became sole office holder and share holder of X Pty Ltd, trustee of the IABH Super Fund, which was established in November 2005 using $1,000,000 of the settlement monies.
On 25 November 2005 the wife purchased a second hand Mercedes Benz motor vehicle for $44,930.
In January 2006 the liquidator for S Pty Ltd claimed $360,177 based upon a claim about insolvent trading.
The Full Court on 18 May 2006 handed down a preliminary judgment and on 4 August 2006 handed down a final decision. The proceedings were remitted for re-hearing.
In September 2006 WB Pty Ltd, as trustee for the BH Family Trust, entered into a contract of sale for the property at BT for $5,500,000 with a deposit of $200,000.
The settlement for the purchase of BT property took place on 5 February 2007.
On 7 February 2007 the husband purchased commercial premises, with a warehouse/storage shed.
In March 2007 Mr N took up a temporary position in O.
On 19 March 2007 WB Pty Ltd took a lease on a Mitsubishi Lancer for J’s use.
A re-trial of this matter took place before Faulks DCJ between 8 and 11 May 2007 (the second hearing).
The husband paid income tax (in the 2007 financial year) of approximately $1,000,000 as a result of profit distributions to him.
On 7 September 2007 a settlement deed between the husband and Mr RN was executed. The deed provided that Mr RN was to pay to the husband the sum of $87,500 by way of lump sum payment and periodic instalments.
On 14 January 2008 J moved to the Gold Coast to live on campus at the University.
In April 2008, U Pty Ltd was registered. The company has issued 100 ordinary shares. The husband is a director and holds 55 shares. His 25 year old grandson is the other director and holds the balance of the shares. The husband’s bookkeeper is the secretary.
In August 2008 I Pty Ltd was deregistered. K Pty Ltd’s interest in this company was written off in the 2009 financial year.
On 8 October 2008, Faulks DCJ, delivered his orders and reasons in respect of property and child support. The orders in respect of child support were backdated to 22 March 2005 and were not the subject of any appeal or this re-hearing.
On 5 November 2008 the wife lodged a notice of appeal (the second appeal) against the property decision of Faulks DCJ and the husband filed an application in a case seeking payment of his costs in relation to the second hearing.
On 6 November 2008 the husband paid the wife $514,498 in accordance with the property alteration ordered by Faulks DCJ and paid arrears of child support by reason of the backdated assessment by Faulks DCJ in the sum of $47,388.
On 5 December 2008 the wife filed a response to the husband’s cost application seeking that it be dismissed or alternatively it be adjourned to await the outcome of the second appeal.
In January 2009 the wife assisted J in obtaining medical/psychological treatment for depression. As a result of the difficulties he was having, J deferred his studies for term 1. He subsequently deferred his studies for term 2 to travel overseas with the husband and his half sister.
On 7 January 2009 the wife saw Dr RW for the first time. Dr RW is the wife’s treating neurologist. He has diagnosed the wife with multiple sclerosis (MS). That diagnosis is disputed by the husband who relies on what Dr JC says and I discuss the evidence of Dr RW and Dr JC later in these reasons.
On 28 January 2009 the husband’s application for costs of the second hearing was adjourned to a date to be fixed after the determination of the appeal. Any application for costs by either party would be dealt with in the normal way after the conclusion of the substantive proceedings.
On 5 April 2009 the wife’s general medical practitioner, Dr F, referred the wife to Mr DH, psychologist, for treatment regarding “generalised anxiety and high levels of stress with an underlying medical condition (demyelination disorder)”.
On 27 February 2009 the husband filed an application for divorce. A divorce order was made on 22 April 2009 and became absolute on 23 May 2009.
The wife’s appeal against the orders of Faulks DCJ was listed for hearing before the Full Court on 23 April 2009. On that day, orders were made by consent setting aside the property order made by Faulks DCJ and remitted the property applications of the parties for re-hearing.
On 12 June 2009 the wife rented her furnished residence at K Street for an initial three month period for $750 per week. The lease has been extended but the wife anticipates that when the property is leased to new tenants, they would require the property to be unfurnished and a lower rent will be achieved.
In July 2009 the wife and E moved from K Street to rental accommodation on the Gold Coast. E commenced year 10 at a private College in the second semester.
On 26 August 2009 Dr RW confirmed his diagnosis of multiple sclerosis.
On 30 September 2009 the wife was diagnosed with symptoms of post traumatic stress by her treating psychologist Mr DH.

APPROACH TAKEN

In this matter my task is to:
84.1.Identify and value the property, assets, financial resources and liabilities of the parties;
84.2.Identify relevant contributions and assess them;
84.3.Consider relevant matters referred to in Section 79(4)(d) – (g) FLA;
84.4.Ensure my order adjusting the property, assets and liabilities of the parties is just and equitable.
As mentioned in the introduction, the Full Court has to some extent, imposed a modification on the evaluation of contribution in this case.
The second Full Court on the 23^rd of April 2009 ordered inter alia:-
“That the proceedings be remitted for re hearing before a single judge other than the Deputy Chief Justice Faulks on the same terms provided by order 3(a) and 3(b) of the order of the Full Court dated 4 August 2006, namely that:
"(a)the proceedings for settlement of property be limited to:
(i) further evidence with respect of valuations of assets and quantification of liabilities as at the date of the new trial;
(ii) further evidence with respect to contributions made subsequent to 15 November 2004; and
(iii) further evidence with respect to s. 75(2);
(b)the contribution based entitlements of the parties to the assets of the marriage as found by the original trial judge as at 15 November 2004 be accepted at 70% to the Husband and 30% to the Wife.”
The Full Court further noted that the parties agreed to abide by the comments made by the previous Full Court in their supplementary reasons for judgment dated 4 August 2006 at paragraphs 35 and 36 that:
"1.The factual background as found by the Trial Judge (paragraph 14 to 32 of his judgment, including his findings about the controversial issue of co habitation commencement date) should stand and not be revisited.
2.The Trial Judge’s 70:30 assessment as to the contribution to property and family to 15 November 2004 (paragraph 82 to 109 of his judgment) should stand and not be revisited."
Each party frames the meaning and effect of the words of the Full Court, “the contributions based entitlements of the parties to the assets of the marriage as found by the trial judge as at 15 November 2004 be accepted at 70 percent to the husband and 30 percent to the wife” in different ways.

The husband’s position

In his written submissions, senior counsel for the husband framed my task in the following way:
“The Full Court has directed that the Buckley J’s assessment of contributions (70/30 to the Husband) in the period from February 1987 to the date of the hearing (November 2004) “should stand and not be revisited” in respect of the pool that existed at November 2004, but Your Honour must consider and weigh the contributions made since November 2004 in the context of movements in asset value and other factors.”
Senior counsel for the husband develops this argument by saying:-
“Both parties have made contributions to the children and of a financial nature and Your Honour needs to determine the extent to which that impacts on the 70/30 division. The success of the Husband’s financial contributions in the 5 years since November 2004, coupled with his financial support of the children, are such, notwithstanding the economic problems that have arisen over the past 12 months, that it is questionable if a just result can be achieved by increasing the Husband’s contribution weighting from 70% and whether, in the end, a fair result can only be achieved if a dollar sum is assessed as representing the Wife’s contribution entitlement post-November 2004. Another method would be to undertake an asset by asset approach to contribution weighting in order to give to the Husband the credit to which he is entitled.
The problem confronting Your Honour is further compounded by the fact, that whilst the Husband has continued to successfully manage his investments, the Wife, over the past 5 years, has accessed capital for her living expenses, has made no effort to use her earning capacity and has taken limited risks by using financial advisors who despite the wife’s desire for a conservative approach invested in companies that, in the result were massive failures (ie Babcock & Brown, CENTRO and Hedley Leisure).”
Senior counsel for the husband argued that:
“Whilst it is possible to provide Your Honour with a composite pool, we question whether that is helpful when the parties, by reason of two final property orders, have done as they pleased with what has been determined as their entitlement from the pool. However well or badly the parties have used the property they received by way of previous court orders, the fact remains that those orders have been carried out. the Wife has received from the Husband cash payments of:
· $1,439,169 on 30 May 2005; and
· $514,498 on 6 November 2008.
In addition, she retained $1,128,209 in other property interests, a total of $3,081,876.
As this is a significant factor in assessing if the Wife can obtain any additional sum, we do not provide Your Honour with a composite pool but rather summaries of what each party currently has from the property settlements already effected (see Annexure A to these submissions). It is of course a simple matter to combine these separate pools to achieve a total pool.”
In oral submissions, senior counsel for the husband referred to the following passage in the Full Court’s decision in Z & Z (2005) FLC 93-241 where Finn J at paragraph 42 said:
“It is my impression that there are currently coming before the Court a significant number of cases in which the period between the parties’ separation and the hearing of their property settlement proceedings is substantial. The delay seems often to arise, at least in part, because the parties have initially reached some form of informal (or even formal) settlement from which one party later resiles (often for good reason). In these long separation periods, the parties will usually have built up substantial new assets or incurred substantial liabilities. In an endeavour to satisfy the parties that any orders which are eventually made by the Court in these somewhat complicated cases are just and equitable, it can, in my view, be very useful for Judges to assess contributions to property on an asset by asset basis.” (Senior counsel for the wife correctly said that these were obiter comments made by Her Honour which were not commented upon by the other two members of that Full Court).
Senior counsel for the husband argued that it was appropriate to look at what each of the parties had done with the assets each controlled, since the original orders of Buckley J were made. The wife has received two amounts ($1,439,167 and $514,498) together with the K Street property and the husband has had available to him the balance of the assets (less monies that he had to borrow in order to make the two payments to the wife on 30 May 2005 and 6 November 2008). Senior counsel for the husband argues that the fact is that the orders of Buckley J and Faulks DCJ were implemented and the court needs to consider how well or badly the parties have used the property that they have received or had control of following those orders.
Senior counsel for the husband submits that in order to assess the contribution to the present composite pool, the starting point should be to look at the assets each party currently has and to consider the movement in property effected firstly after the orders of Buckley J and then after the orders of Faulks DCJ.
Under the compulsion of law, on two occasions, the husband has transferred monies to the wife, being $1,440,000 on 23 May 2005 and $514,500 on 6 November 2008. Senior counsel for the wife correctly emphasises that this transfer of property in the asset pool from the husband to the wife is not an interim property settlement and that there has not been a property settlement. Although some of the language in the case outline and written submissions by senior counsel for the husband might indicate otherwise, he made it clear in final submissions that the husband does not assert that there has been a property settlement of any nature. Rather senior counsel for the husband encourages me to analyse what the parties have done since separation with assets from the pool which were under their respective control.

The wife’s position

By way of contrast, senior counsel for the wife interprets the words of the Full Court not on the basis that I am required to find a 70/30 contribution to assets in respect of the pool that existed in November 2004 but rather, my discretion is fettered to the extent of removing from consideration any issues of contributions up to 15 November 2004 when I am making an overall assessment of contributions to the assets that exist to day.
Senior counsel for the wife more fully developed his argument as follows:
97.1.The central issue in this case arises from the order of the Full Court, echoing the order of the earlier Full Court and the reasons for decision of that Full Court in its supplementary judgment.
97.2.The order is set out at paragraph 3 of the Reasons for Judgment.
97.3.The first Full Court explained the reason and intent of the order it made in the following passages of the supplementary judgment:
“22. In the circumstances of this case, to allow contribution issues to be revisited, at least to the date of completion of the hearing of the proceeding before the trial Judge, would in our view be unthinkable, largely for the reasons advanced by senior counsel for the Wife to which we have earlier referred.
23.    Contribution matters subsequent to the completion of the hearing before the trial judge fall into a different category, particularly as the orders to be made by a single judge upon the proceedings being remitted by this Court must satisfy the just and equitable requirement on the day that such judge delivers judgment re-exercising the trial Judge’s discretion."
97.4.Further at paragraph 26 the Full Court said:
“26. For the reasons we have indicated, we propose only fettering the discretion of the single judge charge with re-exercising the trial Judge’s discretion to the extent of accepting that, as at 15 November 2004 (the date of the last evidence before the trial Judge), the contribution entitlements of the parties were 70/30 in favour of the Husband. Whilst it might be thought that similar conclusions would apply to the s. 75(2) adjustment then determined, the absence of possible practical benefit in so doing disinclines us to impose any restrictions with respect to s. 75(2). The different characters of contributions, which largely focus on the past, and s. 75(2) factors, will focus more on the present and the future, support that conclusion.”
97.5.The following follows from the above:
(a)    Your Honour’s discretion is fettered by the order of the Full Court to the extent of removing from consideration any issues of contributions up to 15 November 2004. This can only mean that the Court in the present hearing must accept that contributions up to the date are 30% in favour of the Wife and 70% in favour of the Husband.
(b) The Full Court in its order identified the “assets of the marriage” as being the subject of that contribution. Having regard to s. 79(4)(a), (b) and (c) the correct interpretation of the order is that, for the purposes of the above subsections the contribution based entitlements of the parties to the assets as found at the date of this trial is fixed in the proportions specified, that is, 70% in favour of the Husband and 30% in favour of the Wife up to and until the 15th of November 2004.
(c)    The assets of the marriage can only mean the assets as they are found in this trial.
97.6.The next step is to look at contributions of the parties since 15 November 2004 and to consider whether there are any factors which call for a further adjustment either way.
97.7.The unusual circumstance of being bound by the prior assessment and the findings giving rise to it has a consequential effect on the process of assessment with respect to the subsequent contributions of the parties. An adherence to the earlier assessment amounts to no more than giving lip service to it, if the overall assessment of contribution is adjusted without it being first demonstrated that there has been a material alteration in:
(i)     The nature or quality of the contributions of one or other of the parties since the time of the earlier assessment; or
(ii)    The comparative significance of the parties’ respective contributions by reason of subsequent events.
97.8.That this must be so follows from the circumstance that assessments of this nature are incapable of any one correct outcome. To proceed otherwise is to undermine the integrity of the earlier binding assessment and diminish the utility of any direction such as that which was given by two successive Full Courts.
97.9.In any event the contributions for the period after 15 November 2004 must necessarily be considered not only in light of the contribution assessment earlier made with respect of the period preceding 15 November 2004 but an understanding and appreciation of the factual findings made by Buckley J and the evidence referred to by him in arriving at his particular contributions assessment. In other words what has occurred since 15 November 2004 must necessarily to be considered in light of his Honour’s findings and the evidence in support of these findings and the further and final contributions assessment ought, so far as it is possible, be made in a manner which is harmonious with the reasoning and judgments giving rise to that earlier assessment.

Conclusion about the effect of the Full Court’s orders upon the exercise of discretion

I accept the formulation advanced by senior counsel for the wife to be the correct interpretation of the manner in which the Full Court has fettered my discretion for the reasons which he has advanced. In those circumstances, I will need to adopt the factual findings made by Buckley J which led him to arrive at his assessment of contributions up to 15 November 2004.

BALANCE SHEET

It is useful at this point to look at a composite pool of assets in order to identify assets, liabilities and financial resources of each of the parties and to deal with any controversy over the value of any of those items.
Exhibit A is a document which at the start of the trial formed a template for consideration of the composite pool of assets. It was in the following form:

Assets

Ownership		Description	Wife’s value	Husband’s value
Companies
1.	Husband	[BH] Family Trust	4,008,505.00	3,633,505.00
2.	Husband	[WB] Pty Ltd	51,713.00	51,713.00
3.	Husband	Shares in [K] Pty Ltd	907,813.00	907,813.00
4.	Husband	Loan from related parties	(1,065,932.00)	(1,065,932.00)
5.	Husband	Shares in [U] Pty Ltd	NK	NIL
Real Property
6.	Husband	Shed at […]	210,000.00	210,000.00
7.	Husband	[P Villa]	1,8500,000.00	1,850,000.00
8.	Wife	[K Street]	720,000.00	720,000.00
9.	Wife	Venezuelan propery	NIL	21,857.00
Motor vehicles & boat
10.	Husband	[…] (marine vessel)	245,000.00	245,000.00
11.	Husband	Mercedes Benz ([…])	2,500.00	2,500.00
12.	Husband	Rolls Royce ([…])	15,000.00	15,000.00
13.	Wife	Mercedes Benz B200	21,000.00	21,000.00
Receivables
14.	Husband	Funds received / receivable from [Mr RN] pursuant to settlement	87,500.00	NIL
15.	Husband	Claim against [JV]	E 75,000.00	NIL
16.	Wife	Debt – [Mr and Mrs SE]	NIL	64,336.00
Cash assets
17.	Husband	Income tax refunded / refundable (from Husband’s Financial Statement)	15,976.00	NIL
18.	Husband	ANZ account No. […]	1,314.00
ANZ Progress Saver Account No. […]	501.00
ANZ Gold Access Statement No. […]	1,000.00	2,815.00
19.	Husband	IAG Insurance Australia Group	2,056.00	2,056.00
20.	Husband	Miller Harris Trust Account	44,000.00	44,000.00
21.	Husband	Sparken Hausen German Bank	E 3,358.00	3,358.00
22.	Husband	Natwest Winchester Bank account	E 3,128.00	3,128.00
23.	Wife	Venezuelan Bank account	NIL	24,816.00
24.	Wife	Adelaide Bank Term Deposit Account	200,000.00	200,000.00
25.	Wife	Bank of Queensland ([…])	80,033.00	80,033.00
26.	Wife	Westpac Account No. […] (Main bills)	E 1,020.00
Westpac Account No. […] (Everyday)	E 331.00
Westpac Account No. […] (eSaver account 1)	E 108.00
Westpac Account No. […] (eSaver account 2)	E 101.00
Westpac Account No. […] (E’s eSaver account)	E 15,974.00	17,535.00
Chattels
27.	Husband	Stock – […] duty free	E 13,560.00	NK
28.	Husband	Chattels and jewellery	33,430.00	33,430.00
29.	Wife	Chattels ([K Street]) & jewellery	32,998.00	32,998.00
30.	Wife	Chattels (Gold Coast)	TBA	NK
TOTAL			$7,576,987.00	$7,120,961.00
Addbacks
31.	Husband	Drawings from the [BH] Family Trust in period 17/7/06 to 30/6/09	3,650,000.00	NK
32.	Husband	Legal fees paid	871,812.00	871,812.00
33.	Wife	Legal fees paid	664,458.00	890,458.00
TOTAL			$5,186,270.00	$1,762,270.00
Liabilities
34.	Husband	ANZ Equity Manager account	743,000.00	743,000.00
35.	Husband	Accountancy fees	NIL	3,740.00
36.	Husband	Land tax	NIL	65,150.00
37.	Wife	Westpac Altitude Mastercard and Altitude American Express combined account	4,390.00	NK
38.	Wife	Monies owed to [counsellor] (counselling for children in 2003)	2,000.00	NIL
39.	Wife	Higher Education Loan Programme (as at 1/6/09)	5,529.00	NIL
TOTAL			$754,919.00	$811,890.00
Notional adjustments
40.	Husband	(a) Capital gains tax & sale costs (present value of payment in 5 years:[1]
(i) [G] Street costs of sale - $76,200 CGT - $301,317	NIL	(377,517.00)
(ii) [M Street] costs of sale - $130,500 CGT - $685,318	NIL	(815,818.00)
(iii) Warehouse at […] costs of sale - $6,300.00	NIL	(6,300.00)
41.	(b) Tax on retained earnings – [K] Pty ltd (as of now $374,759)	NIL	NK
TOTAL			NIL	$(1,199,635.00)
Superannuation
42.	Wife	[IABH] Super Fund	877,775.00	877,775.00

[1] Although Exhibit A states that the figures in the husband’s column are “present value of payment in 5 years”, they are actually CGT and realisation costs as at 30.6.09. The figures for M Street are not calculated upon the subsequently agreed figure of $4,160,000.

During the trial, there were arguments about a number of items on the balance sheet and some concessions were made. Senior counsel for the husband amended the figures he asserted for item 40 during final submissions. I discuss below the differences in Exhibit A and make findings in order to reach a settled balance sheet.

Item 1: BH Family Trust

This item was initially in dispute. Given the difference of opinion between the real estate valuers about the value of M Street, Mr DD and Mr SQ, the experts conferred and reached an agreement in relation to the value of the property, which is the main asset held by the trust. This agreed figure was provided to Mr ON, who recalculated the value of the trust to be $3,818,505.

Item 4 – Loan from related parties; item 31 – Drawings from the BH Family Trust in period 17/7/06 to 30/6/09 and item 38A - further borrowing from the ANZ

These three items are interconnected and are monies that the husband has had available to him over an approximate three year period.
Item 38A was added during final submissions. At the end of the hearing there was an agreement that the husband had borrowed a further sum of $573,000 from the ANZ which he had spent. This was an “off balance” sheet item and had been overlooked initially by the single expert. This is money which the husband owes and it was not controversial that it should be included on the balance sheet.
Nor was it controversial that the husband owed related parties the sum set out in item 4. Senior counsel for the wife suggested that as an alternative to adjusting item 31, item 4 could be reduced by a similar amount. If any adjustment is made, I will make it at item 31.
What was controversial was whether or not there should be any addback in item 31 against the husband for part of the monies that he has expended in a period since July 2006. Senior counsel for the wife asserts that in that period the husband, by way of drawings and borrowings, had nearly $5,000,000 available to him in circumstances where he has failed to adequately account for the expenditure of all of those funds.
In Omacini v Omacini (2005) FLC 93-218, the Full Court said at paragraph 30:
“To date, three clear categories of cases have emerged where the Court has determined that it is appropriate to notionally add-back to the pool of assets, that is, assets that no longer exist. They are:
(a)Where the parties have expended money on legal fees. In DJM and JLM (1998) FLC 92-816, the Full court said at 85,262:
“11.6 For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out.”
(b)Where there has been a premature distribution of matrimonial assets. In Towsend and Towsend (1995) FLC 92-569, Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at 81,654:
“In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under s 75(2). It seems to me that the husband had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the husband’s receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.”
(c)In the circumstances outlined by Baker J in Kowaliw and Kowaliw (1981) FLC 91-092 at 76,644:
“As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a)where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b)where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para. (a) and (b) above having economic consequences is clearly in my view relevant under sec.75(2)(o) to applications for settlement of property instituted under the provisions of sec.79”.
This statement was accepted as an “accurate statement of the law” by the Full Court in HDM & MM and SJM [2006] FamCA 47 (14 February 2006) per Kay, Holden and Coleman JJ at para 17.
In Farnell and Farnell (1996) FLC 92-681, Kay J at para. 24 of his Judgment held, “if monies have been clearly wasted by a party on a frolic of their own such as a gambling spree or in the purchase of extravagant gifts for a paramour”, it might be appropriate for the Court to bring such monies back into account.
In Omacini, the Full Court (at para. 39) held:
(a)It was “unduly simplistic” for the trial judge to proceed on the basis that the mere fact that a party spent money obtained from the disposition of assets (which had existed at separation) would result in such expenditure being added back as a premature distribution of assets; and
(b)it was necessary for the court to “examine and make some assessment of the reasonableness or otherwise of the expenditure”
(c)it was “particularly critical” for such examination and assessment to occur in a case where the party who had spent the money had provided, at least prima facie, an explanation and accounting setting out how the money was spent.
In Gollings & Scott (2007) FLC 93-319 the Full Court discussed a post separation payment made by the husband towards a property purchased by a woman with whom he was having a relationship and said (at paragraph 68):
“…The husband would be free to go about spending the money he earned post-separation in the furtherance of his relationship with Ms Y if he chose to do so providing that at the same time he properly met his obligations towards his wife and children for their due support. It would not normally be appropriate some years after separation to require each of the parties to account for any monies they had spent post-separation so as to determine whether or not that expenditure was reasonably necessary for their own self-support, and to the extent that it was not, to determine whether it would be proper to add it back into the pool of assets available for division between the parties.”
That general statement however needs to be read in the context of the specific facts of an individual case.
Senior counsel for the husband submits that despite his age, the husband has continued to work hard in personally managing the commercial properties whilst the wife has not engaged in paid employment. Senior counsel for the husband submits that none of the expenditure that has been challenged was wasted on a frolic; could be assessed as unreasonable or spent recklessly. The husband has spent monies on the children of his first marriage, his grandchildren and his friend Ms K and her daughter.
Senior counsel for the wife has argued that much of what the husband spent came from the sale of assets that existed at the date of separation or borrowings by the husband that are otherwise going to be added back onto the balance sheet and in those circumstances it is proper to require the husband to account for what he has done with the monies.
There seemed to be some disagreement between counsel in final submissions as to where the onus lies in relation to addbacks. Senior counsel for the wife submitted that it was the responsibility of the party who incurs a liability to explain to the uses to which the borrowed monies have been expended, not for the other party to demonstrate beyond dispute, that it has been put to some unreasonable or improper purpose. I accept that general proposition is correct.
The explanation, however, does not need to be mathematically precise. In Gollings & Scott (at paragraph 69), the Full Court made reference to the case of C & C [1998] FamCA 143, previously decided by Nicholson CJ, Ellis and Kay JJ, where the court said at para 45, 46:
“The provision of modest amounts of capital by parents to their adult children to enable the children to get a start in life is a normal experience in our society. In a case involving the magnitude of assets in this case (and in C & C it was about $3,000,000), in our view it is unreasonable to conduct microscopic examination of each of the parties’ items of post-separation expenditure with a view to determining whether or not it is appropriate that they be brought to account in dividing up the asset pool. Whilst not seeking to place a fetter upon the exercise of the discretion of a trial judge in individual cases, it seems to us that the concept of adding monies reasonably disposed of back into the pool ought to be the exception rather than the rule. The parties are entitled to reasonably conduct their affairs post-separation in a manner that is consistent with properly getting on with their lives. Providing modest support for their children or taking not inappropriate holidays for themselves seems to fit comfortably within that description.”

As I have already mentioned, at the invitation of senior counsel for the husband, I have made clear what weighting is given for capital gains tax, sale expenses and tax on retained earnings. At the end of the day however, there is a requirement to step back and look at the outcome achieved after the analysis of the matters the court is required to take into account, firstly by way of contributions, and secondly pursuant to s 79(4)(d) - (g) FLA.
The submissions made by senior counsel for the husband under the just and equitable test flow from the way in which he has suggested the Full Court has fettered my discretion. Senior counsel for the husband rhetorically asks how it can be “just” for the wife to take 30 percent of any increase in the value of the husband’s assets since the 2004 orders, when the husband borrowed almost $3,000,000 to make a payment to the wife of $1,430,000 under the order of Buckley J and to meet a range of expense amounting to around $1,400,000 just to retain his commercial properties? He borrowed again an additional sum of $514,498 in November 2008 to pay the amount ordered by Faulks DJC and a further amount of $47,388 to pay backdated child support as ordered. Senior counsel for the husband concludes that in fact the husband could have sought to recover some of the monies that have been paid to the wife previously, but has chosen simply to ask for the wife’s application to be dismissed. I have concluded that it would not be just and equitable to approach the division of assets between the parties in the way suggested by senior counsel for the husband.
I have already commented upon the artificiality of dissecting s 79(4)(d) - (g) FLA matters into two separate parts and it is important that I look at the results that that analysis has achieved overall.
After I have made contribution based findings and findings pursuant to s 79(4)(d) – (g) matters, I arrive at a division between the parties as to 37.5 percent to the wife and 62.5 percent to the husband of the current composite pool of assets.
A division, along the lines of those percentages, could be achieved by altering the assets of the parties in the following way:

H gets 62.5%
Assets
Item No.	Description	Percentage	Value
1	BH Family Trust	100%	$3,818,505
2	WB Pty Ltd	100%	$51,713
3	Shares in K Pty Ltd	100%	$907,813
4	Loan from related parties	100%	-$1,065,932
5	Shares in U Pty Ltd	100%	$0
6	Warehouse property	100%	$210,000
7	P Villa	100%	$1,850,000
10	marine vessel	100%	$245,000
11	Mercedes Benz	100%	$2,500
12	Rolls Royce	100%	$15,000
14	Funds received/receivable from Mr RN pursuant to settlement	100%	$8,400
15	Claim against Mr JV	100%	$0
17	Income tax refunded/refundable (from husband's financial statement)	100%	$8,178
18	ANZ account; ANZ Progress Saver Account; ANZ Gold Access Statement	100%	$2,815
19	IAG Insurance Australia Group	100%	$2,056
20	Miller Harris Trust Account	100%	$44,000
21	Sparken Hausen German Bank	100%	$3,358
22	Natwest Winchester Bank account	100%	$3,128
27	Stock - duty free	100%	$0
28	Chattels and jewellery	100%	$33,430
31	Drawings from the BH Family Trust in period 17/7/06 to 30/6/09	100%	$0
32	Legal fees paid	100%	$873,411
Liabilities
Item No.	Description	Percentage	Value
34	ANZ Equity Manager account	100%	$743,000
35	Accountancy fees	100%	$3,740
36	Land tax	100%	$65,150
38A	A further borrowing from the ANZ Bank at the husband's direction	100%	$573,000
40	Capital gains tax and sale costs	100%	$6,300
41	Tax on retained earnings - K Pty Ltd	100%	$0
H pays W			$328,820
Husband’s net Assets			$5,293,365
W gets 37.5%
Assets
Item No.	Description	Percentage	Value
8	K Street	100%	$720,000
9	Venezuelan property	100%	$0
13	Mercedes Benz B200	100%	$21,000
16	Debt – Mr and Mrs SE	100%	$0
23	Venezuelan Bank account	100%	$0
24	Adelaide Bank term deposit account	100%	$200,000
25	Bank of Queensland	100%	$80,033
26	Westpac Account (main bills); Westpac Account (everyday); Westpac Account (eSaver account 1); Westpac Account (eSaver account 2); Westpac Account (E’s eSaver account)	100%	$17,535
29	Chattels (K Street) & Jewellery	100%	$32,998
30	Chattels (Gold Coast)	100%	$7,790
33	Legal fees paid	100%	$894,458
42	IABH Super Fund	100%	$877,775
Liabilities
Item No.	Description	Percentage	Value
37	Westpac Altitude mastercard and Altitude American Express combined account	100%	$4,390
38	Monies owed to children’s counsellor (counselling for children in 2003)	100%	$0
39	Higher Education Loan Programme (as at 1/6/09)	100%	$0
W receives from husband			$328,820
Wife’s net assets			$3,176,019

Each party would retain the assets they have and be responsible for their respective liabilities. A payment would be made by the husband to the wife in the sum of $328,820.
Standing back, I find that this distribution of assets in those proportions and in the way set out in the above table, produces a just and equitable distribution as between the parties pursuant to s 79 FLA.

I certify that the preceding three hundred and seventy-six (376) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts.

Associate:

Date: 22 February 2010