Jacobsen and Jacobsen

[2019] FamCA 630

FAMILY COURT OF AUSTRALIA

JACOBSEN & JACOBSEN [2019] FamCA 630

FAMILY LAW – INTERIM PROPERTY – Where the parties are equal shareholders in a company – Where the company has declared a dividend and the wife seeks payment of her share of that dividend – Where that matter is best dealt with at final hearing -Where in the alternative, the wife seeks a partial property settlement – Order for partial property settlement – Where the wife seeks orders by way of injunction restraining the husband from certain financial operations of the company – Where the husband has made significant financial decisions without the consent of the wife – Orders made for injunctions restraining the husband –  Where the parties jointly own properties and receive rental income – Orders for the husband to manage properties.

Family Law Act 1975 (Cth) s114
Family Law Rules 2004 (Cth) r 17.06(4)

APPLICANT: Ms Jacobsen

RESPONDENT: Mr Jacobsen

FILE NUMBER: SYC 3701 of 2018

DATE DELIVERED: 6 September 2019

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Rees J

HEARING DATE: 29 August 2019

REPRESENTATION

SENIOR COUNSEL FOR THE APPLICANT: Mr Schonell

SOLICITOR FOR THE APPLICANT: Lander & Rogers

COUNSEL FOR THE RESPONDENT: Ms De Vere

SOLICITOR FOR THE RESPONDENT: Barkus Doolan

ORDERS

IT IS ORDERED, PENDING FURTHER ORDER

1. That pursuant to section 114 of the Family Law Act 1975 (Cth) (“the Act”) and until further Order, the Husband, in his capacity of Director of H Pty Limited (“H Pty Ltd”) and/ or by his agents be restrained by injunction from calling for, holding, attending and voting in favour of any resolution at any meeting in relation to H Pty Ltd where it is proposed that all or any one of the following things be done:

   1.1      To declare any further dividends without the consent of the Wife;

   1.2To sell, dispose of, transfer or otherwise part with possession or control of any shares owned by the parties or either of them, registered in the name of the parties or either of them or held by any other person upon trust for the parties or either of them;

   1.3      To issue any or further share in H Pty Ltd;

   1.4      To alter the rights attaching to any shares or any issued in H Pty Ltd;

   1.5To resign from any directorship or position of office or causing, suffering or permitting the appointment of any further or other directors or office bearers;

   1.6To sell, mortgage, charge, encumber or otherwise deal with the assets of H Pty Ltd, other than in ordinary course of business save and except as regulated by these Orders; and

   1.7To cause, suffer or permit H Pty Ltd to increase any existing liability or to incur any further liability secured upon any real or personal property owned by the parties or either of them and/ or by H Pty Ltd;

   without first obtaining the Wife's written consent or an Order of the Court.

2. That pursuant to section 114 of the Act and until further Order, the Husband, in his capacity of Director of H Pty Ltd and his agents be restrained by injunction from:

   2.1entering into any further loan debit accounts on H Pty Ltd's behalf in excess of $10,000 without the prior written consent of the Wife or by Order of this Court;

   2.2further drawing down on the loan account the Husband holds with H Pty Ltd without the prior written consent of the Wife or by Order of this Court;

   2.3making any transfers from the H Pty Ltd Westpac Account and/or H Pty Ltd J Bank Account in excess of $10,000 without the Wife's prior written consent, other than in the ordinary course of business; or

   2.4acquiring any plant or asset on behalf of H Pty Ltd that is valued at over $10,000 without the Wife's prior written consent, other than in the ordinary course of business.

3. That the Husband do all things necessary to provide the Wife with, and maintain at all times online and hard copy viewing access to the following accounts held by H Pty Ltd:

   3.1      the H Pty Ltd Westpac Account;

   3.2      the H Pty Ltd J Bank Account; and

   3.3Any other bank account in the name of H Pty Ltd and/ or through which H Pty Ltd transacts.

   AND the wife is restrained from operating on any account of H Pty Ltd or conducting any transaction on any account of H Pty Ltd.

4. That no later than fourteen (14) days after the conclusion of each calendar month, the Husband shall provide the following material to the Wife in relation to H Pty Ltd:

   4.1      MYOB (or any other software used by H Pty Ltd) accounts for the past month;

   4.2      Directors and shareholders loan account statements/ledgers;

   AND the Wife shall thereafter be at liberty to request that the Husband provide her with source documents relevant to the transactions identified in the accounts and ledgers provided and the Husband shall provide such material within seven (7) days of receiving any such request from the Wife.

5. That no later than twenty-one (21) days after the conclusion of each financial year, the Husband shall provide the following material to the Wife in relation to H Pty Ltd:

   5.1      management accounts for H Pty Ltd for the past financial year; and

   5.2commission statements for H Pty Ltd clearly delineating recurring revenue and one-off revenue for the past financial year.

6. That forthwith upon the making of these Orders the Wife do all acts and things and sign all documents necessary so as to cause the Husband to be appointed as attorney to manage and deal with Property A without requiring the consent of the Wife, including but not limited to attending to the following:

   6.1That the husband be appointed to manage Property A and to make all decisions relating to the management of the property;

   6.2That the husband be responsible for the payment of all outgoings in relation to Property A, whether incurred before or after the making of these Orders, and shall indemnify the wife in relation to all such outgoings;

   6.3That the husband shall be solely entitled to any rent received from letting Property A;

   6.4That the husband shall indemnify the wife in respect of any liability for tax in respect of rent received by him for Property A.

7. That forthwith upon the making of these Orders the Wife do all acts and things and sign all documents necessary so as to cause the Husband to be appointed as attorney to manage and deal with Property B without requiring the consent of the Wife, including but not limited to attending to the following:

   7.1To negotiate the terms of the current lease in place and any future lease for Property B;

   7.2Manage Property B including but not limited to retaining a commercial real estate agent of his choosing to assist with the leasing of the property, carrying out necessary repairs on the property, managing the payment of outgoings and the release of the rental income.

   7.3Act as the representative for Property B on the strata committee.

8. That the Husband pay, as they fall due, all expenses associated with Property B including but not limited to management fees, council and water, necessary repairs and maintenance cost, and land tax, and the Husband shall be permitted to deduct one half of all such expenses from the wife's share of her rental income by way of reimbursement and provide to the wife a copy of the invoice and a breakdown as to how the amount has been quantified.

9. That the Husband do all acts and things to cause half of the rental income of Property B, after the payment of the wife’s half share of management fees, and cost of repairs and maintenance, council and water rates, to be paid  to an account nominated by the Wife and the balance to an account nominated by the Husband.

10. That the parties shall have equal use of the Time Share property ("Time Share  property"), during the time that the parties are entitled to stay at the property, being Week 1 and  Week 52 each year and to give effect to this Order the following shall apply:

    10.1The husband shall be entitled to have exclusive use of Week 52 of the Time Share property and during that week the Wife is restrained from entering and/or approaching the Time Share property during that period;

    10.2The Wife shall be entitled to have exclusive use of Week 1 of the Time Share  property and during that week the Husband is restrained from entering and/or approaching the Time Share property during that period;

    10.3That the parties shall equally pay all rates and other outgoings in relation to the Time Share property as and when same fall due for payment.

11. That within 7 days of the date of these Orders the Wife shall advise the Husband in writing of the motor vehicle she wishes to acquire, such motor vehicle to be at a cost of not more than $70,000 (including on road costs and taxes).

12. That within 21 days thereafter the Husband shall in his capacity as director of H Pty Ltd do all things necessary to acquire the said motor vehicle so nominated by the Wife, such car to be registered in the name of H Pty Ltd and to make such motor vehicle available to the Wife in exchange for the motor vehicle presently driven by the Wife (being Motor Vehicle 1).

13. That pending the exchange of motor vehicles the Wife must do all things necessary to keep the motor vehicle presently in her possession in good order and repair and she shall make the vehicle available to the Husband to facilitate any trade in valuation in respect to the new vehicle

14. That the wife shall be responsible for the cost of expenses associated with the motor vehicle including the insurance costs, registration costs, maintenance and petrol and indemnifies the Husband and H Pty Ltd in respect to all expenses associated with the motor vehicle.

15. That the Husband will promptly upon receipt by him of the registration papers, forward such documentation to the Wife or as she may otherwise direct in writing.

16. That forthwith upon the making of these Orders the Husband do all acts and things to sell the Collector’s Number Plate for the best price reasonably obtainable and to give effect to that Order the Husband shall do the following:

    16.1    Engage Mr K as broker to sell the Collector’s Number Plate;

    16.2advise the Wife's lawyers of all offers received to purchase the number plate and keep the Wife informed of all steps to  sell the  Collector’s number plate, including providing the wife on not less than a fortnightly basis the progress that is being made in respect to the sale of the Collector’s Number Plate.

    16.3Upon settlement of the sale of the Collector’s Number Plate the Husband shall cause the proceeds of sale to be paid as follows:

    16.3.1in payment of agents’ commissions and sale costs associated with the sale of the Collector’s Number Plate;

    16.3.2in payment of the balance to the wife by way of partial property settlement.

17. That the Independent Children’s Lawyer have leave to relist the Husband’s Application in a Case seeking parenting orders for directions before a Registrar.

IT IS NOTED

1. That the wife gives an undertaking as to damages in the following terms:

   I undertake to the Court:

   Pursuant to Rule 17.06(4) of the Family Law Rules 2004 (Cth):

   (a)   to submit to such order (if any) as the Court may consider to be just for the payment of compensation, to be assessed by the Court or as the Court may direct, to any person, whether or not that person is a party, adversely affected by the operation of the order or undertaking or any continuation (with or without variation) of the order or undertaking; and

   (b)  to pay compensation referred to in paragraph (a) to the person there referred to.

   And I agree to be bound by this undertaking until excused by the court.

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 Jacobsen & Jacobsen 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 SYDNEY

FILE NUMBER: SYC 3701  of 2018

Ms Jacobsen

Applicant

And

Mr Jacobsen

Respondent

REASONS FOR JUDGMENT

1. Ms Jacobsen (“the wife”) and Mr Jacobsen (“the husband”) are engaged in proceedings related to the division of their property and the parenting of their two children, X aged 12 years and Y aged 10 years.

2. The parties are equal shareholders in a company, H Pty Limited. The husband is the sole director.

3. Relevantly to this application, they own the following properties:

   ·    Property A;

   ·    Property B;

   ·    A timeshare interest in a property at Town N (“Time Share”).

4. They also own significant other property. It is agreed for the purpose of this application that the net assets of the parties are about $15 million.

5. The proceedings before the Court arise from a Further Amended Application in a Case filed by the wife on 23 August 2019 in which she seeks orders relating to a number of issues relevant to H Pty Ltd and the properties referred to above. She also seeks, in the alternate, orders for interim property settlement and orders relating to disclosure.

6. The husband, in his Response, seeks orders varying the consent parenting orders which were made on 23 November 2018 and seeks the appointment of an Independent Children’s Lawyer (“ICL”) for the children. He also seeks orders, different from those sought by the wife, in relation to H Pty Ltd and the real properties referred to above, as well as orders in relation to other matters.

7. At the request of the parties I have appointed an ICL. I propose to give leave to the ICL to re-list the matter before a registrar in the event that the ICL is of the view that the matter needs further attention.

HUSBAND’S APPLICATION FOR ADJOURNMENT

1. At the commencement of the proceedings, an application was made by counsel on behalf of the husband for an adjournment. There was no suggestion that counsel had been briefed only to make the application for adjournment.

2. The basis of the application was an asserted illness. In support of the application, counsel for the husband tendered a letter from his doctor dated 28 August 2019 which stated that he was “on panadeine forte for his back pain for the next week which makes him drowsy, and needs bed rest for it”. The letter did not suggest that the husband was incapable of giving instructions to his lawyers by telephone.

3. This matter was listed before the Senior Registrar on 22 July 2019. Senior counsel was briefed on that day for the husband. Presumably, senior counsel was ready to proceed. The husband had filed affidavit evidence on 18 July 2019. The hearing time was, accurately, estimated to be one day. Accordingly it was impossible for the matter to be dealt with in a judicial duty list and it was referred to the listing manager to be allocated a hearing for one day with the proviso that the parties were given 48 hours’ notice of the listing.

4. The wife filed a Further Amended Application in a Case which was served on the solicitors for the husband on Friday 23 August 2019.  The amendments were minor.

5. The parties were given the required notice that the matter was listed before me on Thursday 29 August 2019 for one day.

6. The application for adjournment was made at the commencement of the hearing and was refused. I indicated that reasons would be provided. These are the reasons.

7. The husband’s presence is not required in Court in a duty matter. The matter is dealt with on the papers. No evidence is taken and there is no cross-examination.

8. The husband’s evidence had been filed.

9. The matter had been ready for hearing on 22 July 2019 so presumably the husband’s solicitor had all of the necessary instructions.

10. The husband was contactable by telephone if further instructions were needed.

11. It is a matter of some importance that the waiting lists for hearing time in the Sydney Registry of the Family Court of Australia are long. It is not possible to predict when the matter would be allocated another hearing day if it were adjourned.

12. There was no possibility that another matter could be found to use the time which would be thrown away if the matter were adjourned.

13. The wife, who was the applicant, was ready to proceed and had instructed senior counsel.

14. Some, but not all, of the applications made by the wife had a degree of urgency.

15. The interests of the administration of justice and the balance of convenience, in circumstances where the husband was represented by his solicitor and by counsel, required that the matter proceed.

16. When I indicated that the matter would not be adjourned, counsel for the husband asked for all but one of the issues also to be determined. Specifically, the husband wanted the management responsibilities and rights in relation to Property A and Property B to be determined. In the event, because there was time and the sole remaining issue was trivial, that issue was also dealt with.

17. I propose to deal with the competing positions in relation to each issue separately.

H PTY LTD DIVIDENDS

1. The wife seeks:

   ·    An order that H Pty Ltd pay to her the fully franked dividend of $1,488,800 which H Pty Ltd declared on 28 June 2019;

   ·    An order that H Pty Ltd pay the fully franked dividend of $1,488,800 which it declared to the husband and that the husband, from those funds, pay any sums lent to him by H Pty Ltd, outstanding land tax on Property B, outstanding rates and water rates and insurance owed in relation to Property A and the ongoing expenses related to Property A;

   ·    An order that the husband file an affidavit explaining movements in the loan accounts of H Pty Ltd which, she asserts, substantially increased her indebtedness;

   ·    In the event that she does not receive the dividend of $1,488,800, an order that the husband pay any tax assessed by virtue of her having been declared entitled to the dividend.

2. The husband opposes the making of orders as sought by the wife and seeks an order that, upon the issue of the income tax assessments for each party for the year ended 30 June 2019, H Pty Ltd declare a dividend sufficient to pay the tax assessed.

3. I accept the submission on behalf of the husband that these are matters which can be dealt with at trial.

H PTY LTD INJUNCTIONS

1. The wife seeks a suite of orders by way of injunction restraining the husband from declaring further dividends in H Pty Ltd and a suite of orders restraining the husband from dealing with H Pty Ltd so as to diminish its value. She also seeks access to the bank statements of H Pty Ltd and the statements of director’s and shareholders’ loan accounts.

2. The wife proffers an undertaking as to damages in accordance with Rule 17.06(4) of the Family Law Rules 2004 (Cth).

3. In order to understand the respective contentions of the parties, it is necessary to set out the precise orders sought by the wife and some of the history since separation.

4. The wife seeks the following orders:

   5.That pursuant to section 114 of the Act and until further Order, the Husband, in his capacity of Director of H Pty Ltd and/ or by his agents be restrained by injunction from calling for, holding, attending and voting in favour of any resolution at any meeting in relation to H Pty Ltd where it is proposed that all or any one of the following things be done:-

   5.1To declare any further dividends without the consent of the Wife;

   5.2To sell, dispose of, transfer or otherwise part with possession or control of any shares owned by the parties or either of them, registered in the name of the parties or either of them or held by any other person upon trust for the parties or either of them;

   5.3To issue any or further share in H Pty Ltd;

   5.4To alter the rights attaching to any shares or any issued in H Pty Ltd;

   5.5To resign from any directorship or position of office or causing, suffering or permitting the appointment of any further or other directors or office bearers;

   5.6To sell, mortgage, charge, encumber or otherwise deal with the assets of H Pty Ltd, other than in ordinary course of business save and except as regulated by these Orders; and

   5.7To cause, suffer or permit H Pty Ltd to increase any existing liability or to incur any further liability secured upon any real or personal property owned by the parties or either of them and/ or by H Pty Ltd;

   without first obtaining the Wife's written consent or an Order of the Court.

   6.That pursuant to section 114 of the Act and until further Order, the Husband, in his capacity of Director of H Pty Ltd and his agents be restrained by injunction from:

   6.2entering into any further loan debit accounts on H Pty Ltd's behalf in excess of $10,000 without the prior written consent of the Wife or by Order of this Court;

   6.3further drawing down on the loan account the Husband holds with H Pty Ltd without the prior written consent of the Wife or by Order of this Court;

   6.4making any transfers from the H Pty Ltd Westpac Account and/or H Pty Ltd J Bank Account in excess of $10,000 without the Wife's prior written consent, other than in the ordinary course of business; or

   6.5acquiring any plant or asset on behalf of H Pty Ltd that is valued at over $10,000 without the Wife's prior written consent, other than in the ordinary course of business.

   7.That the Husband do all things necessary to provide the Wife with, and maintain at all times online and hard copy viewing access to the following accounts held by H Pty Ltd:

   7.1the H Pty Ltd Westpac Account;

   7.2the H Pty Ltd J Bank Account; and

   7.3Any other bank account in the name of H Pty Ltd and/ or through which H Pty Ltd transacts.

   8.That no later than seven (7) days after the conclusion of each calendar month, the Husband shall provide the following material to the Wife in relation to H Pty Ltd:

   8.1MYOB (or any other software used by H Pty Ltd) accounts for the past month;

   8.2Directors and shareholders loan account statements/ledgers;

   AND the Wife shall thereafter be at liberty to request that the Husband provide her with source documents relevant to the transactions identified in the accounts and ledgers provided and the Husband shall provide such material within seven (7) days of receiving any such request from the Wife.

   9.That no later than twenty-one (21) days after the conclusion of each financial year, the Husband shall provide the following material to the Wife in relation to H Pty Ltd:

   9.1management accounts for H Pty Ltd for the past financial year; and

   9.2commission statements for H Pty Ltd clearly delineating recurring revenue and one-off revenue for the past financial year.

1. H Pty Ltd is a company which conducts a business. The shareholders are the husband and the wife equally. The husband is the sole director. I accept that, before the parties separated in August 2017, the husband conducted the day to day management of H Pty Ltd and the wife’s attentions were upon her own business. H Pty Ltd is the main source of income of the family and a significant asset. In 2018 the husband’s estimate was that H Pty Ltd was valued at $5 million.

2. The parties have agreed upon a single expert to value H Pty Ltd.

3. In January 2018 the husband removed the wife’s access to the H Pty Ltd business account. In April 2018 the wife asserts that the husband cancelled her L Bank credit card and in September 2018 he cancelled her access to the H Pty Ltd L Bank credit card.

4. The wife asserts, and the husband denies, that, since January 2018, the husband has transferred funds from H Pty Ltd for his own use totalling $1,560,426. That issue cannot be resolved here and will not doubt be a matter for the final hearing.

5. In his affidavit sworn 18 July 2019, the husband deposed that the loan accounts of the husband and the wife with H Pty Ltd for the year ended 30 June 2018 totalled $2,874,537 and on 30 June 2019, $2,977,522.

6. On 28 June 2019, the husband in his capacity as director of H Pty Ltd declared a dividend of $1,488,000 to each shareholder. He deposed that he then applied the total amount of $2,976,000 to the reduction of the loan account with H Pty Ltd.

7. The effect of the declaration of the dividend was to create a tax liability for each party of about $400,000.

8. No notice was given to the wife of the husband’s intention to declare the dividend which not only created a substantial tax liability for her but has the effect of significantly increasing her taxable income for the purpose of calculation of child support.

9. The husband’s explanation for the loan account is found at paragraph 30 of his affidavit sworn 18 July 2019 where he deposed:

   During our marriage, [the wife] and I generally redrew monies from H Pty Ltd if funds were available, to acquire real estate (which represents the real estate in our balance sheet at the present time). The funds redrawn to settle on the purchase of real estate would be debited to our respective loan accounts with H Pty Ltd if there were sufficient funds available. I would then apply rent earned from the leasing of the property to repay the loan account from time to time, or I would declare a dividend to clear the loan account. That would then require us to pay tax.

10. No property has been purchased by the parties since separation. The husband has purchased a property but he deposed that he borrowed funds from his mother for that purchase, not from H Pty Ltd.

11. The Financial Statements of H Pty Ltd for the year ended 30 June 2015 disclose that the wife’s loan account with H Pty Ltd had a nil balance. For the year ended 30 June 2016, the wife’s loan account had a balance of $58,542.

12. In the same period, the husband’s loan account which had a balance of $310,904 in the 2015 Financial Statements, increased to $2,115,372 in 2016.

13. The Financial Statements for the year ended 30 June 2017 no longer show separate loan accounts for the husband and the wife.  Rather they show a loan to the husband and the wife of $1,419,399. There is no explanation for this movement.

14. The Financial Statements for the year ended 30 June 2018 show a loan to the husband and the wife of $2,874,537, an increase of $1,455,138.

15. The wife contends that she did not borrow or have the benefit of any of those funds.

16. There is no explanation in the husband’s affidavit sworn 18 July 2019 for any of the movements in the loan accounts or for the increase in the loan account in the 2018 financial year.

17. The wife contends that the dividend declared on 28 June 2019 of $2,977,000 has not been applied to the loan account and relies on the General Ledger of H Pty Ltd which shows that, at 30 June 2019, the loan account had a balance of $2,915,215 owing. There may be an explanation for that discrepancy but none is offered by the husband in his affidavit. The 2019 Financial Statements of H Pty Ltd are not yet available.

18. The General Ledger also shows that in the period between April 2019 and 30  June 2019, the husband’s mother was paid a salary of $30,000 and superannuation of $25,000. The husband’s mother is not an employee of H Pty Ltd.

19. The wife is an equal shareholder in H Pty Ltd. She is entitled to an explanation of the movement of the company’s funds and the loan accounts.

20. On behalf of the husband, his counsel offered an undertaking in the following terms, in writing and signed by the husband:

    I undertake to the Court in my personal capacity and as Director of H Pty Ltd and/or by my agents the following:

    1.   I shall give the Wife and her lawyers 28 days notice of my intention to sell, dispose of, transfer or otherwise part with possession or control of any shares owned by myself and/or my Wife in respect to our shareholding with H Pty Ltd;

    2.   I shall give the Wife and her lawyers 28 days notice of my intention to attend to any of the following:

    a.Issue any further shares in H Pty Ltd;

    b.Alter the rights attaching to any shares or any issued H Pty Ltd;

    c.To resign from any directorship or position of office or causing, suffering or permitting the appointment of any further or other directors or office bearers;

    3.   I shall give the Wife and her lawyers 28 days notice of my intention to sell, transfer, encumber and/or mortgage the following properties:

    a.Property C;

    b.Property D;

    c.Property E; or

    d.Property F.

21. It was submitted on behalf of the husband that the undertaking was sufficient to deal with the restraining orders sought in the wife’s proposed Order 5.

22. On behalf of the wife, senior counsel submitted that the undertaking should not be accepted because it did not cover all of the matters in Order 5, most significantly the restraint sought on the husband’s declaring further dividends. Further it was submitted that the terms of the undertaking would require the wife, if notice were given, to bring a further application, causing her to spend funds on legal representation and face the difficulty in having the matter listed within the 28 day period.

23. Whilst I accept that the terms of the undertaking offered by the husband address Orders 5.2 to 5.5 inclusive of the wife’s application, they do not address orders 5.1, 5.6 and 5.7.

24. I also accept that the wife should not be put in a position where the onus is on her to bring a further application in circumstances where there is no evidence that the husband has any present reason or need to do any of the things in relation to which the wife seeks restraining orders.

25. Orders will be made in accordance with Order 5 as sought by the wife.

26. Order 6 sought by the wife seeks to restrain the husband from borrowing further money from H Pty Ltd without her consent.

27. The husband is paid $30,000 per month by way of salary by H Pty Ltd. In addition he receives rents. In his Financial Statement, he deposes to an income of $10,100.76 per week or $525,240 per annum. The wife does not seek to interfere with his continuing to receive that income. He does not demonstrate a need to borrow further funds from H Pty Ltd. If that need arises, the wife, as an equal shareholder, is entitled to be consulted.

28. She also seeks to restrain the husband from making transfers from the H Pty Ltd accounts or acquiring assets on behalf of H Pty Ltd, other than in the ordinary course of business.

29. On behalf of the husband it was submitted that this would place an unreasonable fetter on his ability to conduct the business. However, in his affidavit sworn on 18 July 2019, he gives no evidence that this is so.

30. I consider that, in the circumstances of this case where the husband has conducted significant financial transactions in H Pty Ltd, such as paying $55,000 for the benefit of his mother, without any notice to the wife, and where he gives no evidence that the restraint would interfere with the day to day running of the business, it is appropriate to make the orders sought.

31. Order 7 sought by the wife seeks to provide access to the accounts of H Pty Ltd, both online and in hard copy.

32. The husband opposes this access. On his behalf it was submitted that the wife, if she has online access, could conduct transactions in the accounts. She agrees to be bound by an order that her access should be “read only” or that she is restrained from conducting any transaction on the relevant accounts.

33. In circumstances where the wife is an equal shareholder in H Pty Ltd and where concerns are raised about the husband’s handling of the finances of H Pty Ltd, it is reasonable that the wife should be able to see the bank statements both on line and in hard copy.

34. Orders will be made in accordance with Order 7 as sought by the wife.

35. Order 8 seeks access to the management accounts and the loan account ledgers.

36. There was no real opposition to that order by the husband other than to submit that the seven day time frame suggested by the wife was too tight.

37. Orders will be made for the documents to be provided within 14 days.

PROPERTY A

1. Property A is jointly owned and has been tenanted in the past.

2. The wife seeks orders that the husband pay all arrears in relation to insurance, council rates and water rates and that he ensure that those payments are kept current.

3. The husband seeks orders allowing him to manage the property.

4. Each party asserts that the other has not cooperated in relation to the management of the property.

5. They both agree that the property is in need of substantial work by way of repair and renovation but they cannot agree on the works to be undertaken.

6. The husband wishes to retain Property A as part of his property entitlement. The wife does not. The wife has in the past proposed that Property A be sold but the husband resists the sale.

7. In those circumstances, it is reasonable that the husband should be responsible to pay the outgoings on Property A.

8. The property is presently not in a condition to let. The wife concedes that, in the event that the husband is able to rent out the property, he should be entitled to retain any rent, provided that she does not incur any liability for income tax in relation to rent received.

9. The orders will provide for the husband to pay the outgoings and to manage Property A.

PROPERTY B

1. Property B is a commercially rented property.

2. The wife seeks orders allowing her to manage Property B. She proposes that the husband pay the outstanding land tax and that the rent, after payment of all outgoings, be equally divided.

3. The husband seeks orders allowing him to manage Property B. He also proposes that the rents and the expenses be equally shared.

4. Both parties assert a lack of cooperation by the other in relation to the management of Property B.

5. Both parties wish to retain the property as part of their respective entitlements.

6. It would seem to be agreed that, until about February 2019, the husband managed Property B to the satisfaction of both parties.

7. In February 2019 there commenced a series of disagreements and a volume of correspondence about management decisions relating to Property B. Although I refused the tender of the whole of the correspondence I accept the statement of counsel for the husband that the proposed tender was of some 70 pages of emails and letters passing between the parties and their solicitors relating to issues such as which real estate agent should manage the property, whether a bond should be returned to a departing tenant, whether the departing tenant should be reimbursed for the costs of installing air conditioning and the negotiation of the terms of a new lease.

8. The parties have been threatened with legal proceedings by the departing tenant.

9. Since the parties are unable to agree on a number of matters to facilitate the granting of a new lease, some mechanism must be put in place to allow the tenancy to move forward.

10. The wife is prepared to have a manager appointed but there is no proposal which provides the mechanics for such an appointment and it would come at some expense.

11. The wife does not make any complaint about the husband’s management of Property B before February 2019.

12. The husband and the managing agent had successfully managed the rental until that time. They will be permitted to continue to do so.

13. To avoid further dispute, the husband should pay the outgoings on Property B and deduct the wife’s half share of the outgoings from her share of the rent received.

THE TIME SHARE

1. The parties are entitled to two consecutive weeks each year over the New Year period at the Time Share.

2. The wife seeks orders that she be solely entitled to use the time-share.

3. The husband seeks orders that they each use the time-share for one week.

4. Neither party makes reference to this asset in their respective property settlement applications.

5. The husband has, since separation, had control of the property and paid the outgoings. He has also received the rent.

6. It is reasonable that the parties should both be able to use the property for a week each and that they should share the outgoings.

INTERIM PROPERTY SETTLEMENT

1. In the event that she does not receive the dividend of $1,488,800, the wife seeks payment of $970,000 being:

   ·    $500,000 by way of interim property settlement;

   ·    $70,000 by way of interim lump sum spousal maintenance to enable her to buy a car; and

   ·    $400,000 to be applied to legal costs of these proceedings.

2. In relation to the wife’s car, both parties agree that it is appropriate for the wife to have a new car to the value of $70,000.

3. The husband proposes that H Pty Ltd should purchase a car of the wife’s choosing which would then be registered in the name of H Pty Ltd.

4. The wife wants the car registered in her name.

5. I must assume that the husband sees some financial benefit in having H Pty Ltd purchase the vehicle. Other than as set out above, the proposal poses no detriment to the wife.

6. The vehicle can, in due course, be transferred to her in the final determination of the proceedings if she so wishes.

7. Orders will be made in accordance with the husband’s proposal.

8. The wife seeks a further sum of $900,000 specified by senior counsel to be by way of interim or partial property settlement.

9. There is no real opposition on the part of the husband to the payment of an amount to the wife by way of partial property settlement. They have net assets of about $15 million. Any sum the wife receives now can be accounted for in their final property settlement.

10. However, he seeks payment of a similar amount to himself and, on his behalf, it is submitted that there is no fund immediately accessible. The husband proposes that the parties sell a number plate, referred to as the Collector’s Number Plate, and that they divide the net proceeds. The husband estimates that the Collector’s Number Plate will fetch between $500,000 and $600,000. However, he also proposes that, from the proceeds of the sale, an amount equivalent to the estimated capital gains tax on the sale be set aside. He estimates that the parties would receive, after selling costs, about $163,000 each.

11. The husband further proposes that the parties sell their jointly owned shares in Company M which are worth about $200,000 and divide the proceeds.

12. The wife opposes the payment of any money to the husband by way of interim property settlement.

13. In relation to the Company M shares, the wife wishes to retain those shares as part of her property entitlement and therefore opposes the sale.

14. Other than the Collector’s Number Plate, the wife points to the cash held by H Pty Ltd as a source of funds for her partial property settlement. H Pty Ltd has some $2,300,000 in bank accounts. However, there is no evidence of the tax implications which would flow if a significant sum were removed from the accounts of H Pty Ltd either by way of loan or by way of dividend. Neither is there any evidence, to which my attention was drawn, of the reasonable cash flow needs of H Pty Ltd and whether the removal of a portion of its operating funds would affect the trading position of H Pty Ltd.

15. Having regard to the wife’s wish to retain the Company M shares, the only asset available to be liquidated is the Collector’s Number Plate.

16. There is a significant disparity between the income of the wife and the income of the husband. The husband deposes to earnings of $525,239 per annum, the wife to earnings of $182,156.

17. After separation, the husband purchased Property G which, in his Financial Statement, he values at $2,450,000. To finance the purchase he borrowed $2,100,000 from his mother. There is no indication that the wife has access to a similar resource.

18. Thus far, according to the costs disclosure letter provided by the husband’s solicitors, he has paid his legal fees. The amount currently outstanding is modest. At the time he swore his Financial Statement on 18 July 2019, his solicitors held $49,167 in trust.

19. The wife has paid some $207,000 in legal fees and currently owes about $104,000. Her solicitors hold no funds in trust.

20. I was not taken to any evidence that the husband has a current need for funds.

21. The Collector’s Number plate is available for sale and the net proceeds, after payment of the costs of sale can be made available to the wife by way of partial property settlement.

22. The capital gain on the sale will not be accounted for until the end of the 2020 financial year and there is no need for the estimated capital gain to be quarantined until such time as the relevant assessment issues. The payment of the capital gains tax can be dealt with in the final hearing. There are ample funds in other sources to meet that obligation.

I certify that the preceding one hundred and eighteen (118) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rees delivered on 6  September 2019.

Associate:

Date: 6 September 2019