Kaplan & Hankel
[2025] FedCFamC1F 41
•30 January 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Kaplan & Hankel [2025] FedCFamC1F 41
File number: SYC 9434 of 2021 Judgment of: SCHONELL J Date of judgment: 30 January 2025 Catchwords: FAMILY LAW – PROPERTY – Final Orders – Where a company controlled by the wife purchased and sold several properties over the duration of the relationship of the parties – Where the wife contends that the shares in a company were held on trust for her parents – Where the husband contends that he and the wife used the company for the benefit of the parties jointly and the properties purchased by the company should be part of the matrimonial pool – Where the second respondent contends that the company is the property of herself and her husband – Where the wife after separation transferred all of the shares in the company to the second respondent – The Court finds that there was not a legally enforceable obligation to repay the second respondent and that the wife was at all times the legal and beneficial owner of the shares in the company – The Court finds that the wife sought to reduce the pool of assets in these proceedings for division between her and the husband by transferring the shares to the second respondent.
FAMILY LAW – PROPERTY – Final Orders – Where both parties seek an adjustment of property interests pursuant to s 79 – Where husband conceded contributions favoured wife as to 65 percent – – Where the wife contends family violence occurred throughout the relationship – Where the husband denied all incidents of family violence – Where the Court finds that the husband perpetrated family violence such that the wife’s contributions have been made more arduous – The Court finds that a just and equitable outcome was found to be a 70/30 percentage division of the parties’ property in favour of the wife.
FAMILY LAW – PROPERTY – Final Orders – s 75(2) – Where the wife sought an adjustment in her favour of 10 percent by reason of her future ongoing care of the parties’ children –Where the wife has sole parental responsibility and the children are in her primary care – Where the wife receives Child Support payments from the husband – Where the wife’s income greatly exceeds the husband’s income – Where the husband sought an adjustment in his favour of 10 percent – Where the husband did not articulate a clear submission as to why there should be an adjustment in his favour – The Court find that there is no call for a further adjustment in favour of either party.
FAMILY LAW – PRACTICE AND PROCEDURE – s 95 – Overarching purpose – Statutory obligation for efficient use of judicial resources, effective disposal of cases, timely and proportionate resolution of disputes – Where matter was transferred from Division 2 to Division 1 for final hearing – Where it is unclear to the Court why the matter was transferred from Division 2 to Division 1 – Division 1 is not a dumping ground.
Legislation: Family Law Act 1975 (Cth) Pt VIII, ss 75(2), 79, 79(4), 95 Cases cited: Ashton v Pratt (No 2) [2012] NSWSC 3
Benson & Drury (2020) FLC 93-998; [2020] FamCAFC 303
Britt & Britt (2017) FLC 93-764; [2017] FamCAFC 27
Dickons v Dickons (2012) 50 Fam LR 244; [2012] FamCAFC 154
Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95; [2002] HCA 8
Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143; [2003] FamCA 395
Horrigan & Horrigan [2020] FamCAFC 25
Jabour & Jabour (2019) FLC 93-898; [2019] FamCAFC 78
Jones v Padavatton [1969] All ER 616
Keating & Keating (2019) FLC 93-894; [2019] FamCAFC 46
Onassis v Vergottis [1968] 2 Lloyd’s Report 403
Singerson & Joans [2014] FamCAFC 238
S & S [2003] FamCA 905
Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52
Townsend and Townsend (1995) FLC 92-569
Warner v Hung (No 2) (2011) 297 ALR 56; [2011] FCA 1123
Watson v Foxman (1995) 49 NSWLR 315
Whisprun Pty Ltd v Dixon (2003) 200 ALR 447; [2003] HCA 48
Division: Division 1 First Instance Number of paragraphs: 178 Date of hearing: 8 January 2025 – 9 January 2025 Place: Sydney The Applicant: Litigant in person Counsel for the First Respondent: Mr Applebaum Solicitor for the First Respondent: Fifty Fifth Pty Ltd The Second Respondent: Litigant in person ORDERS
SYC 9434 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR KAPLAN
Applicant
AND: MS HANKEL
First Respondent
MS BRILEY
Second Respondent
ORDER MADE BY:
SCHONELL J
DATE OF ORDER:
30 JANUARY 2025
THE COURT ORDERS THAT:
1.The wife shall pay the husband within three months of the date of the making of these Orders the sum of $1,164,648.
2.Simultaneously with the payment pursuant to Order 1, the wife is to cause the mortgage secured over the properties at B Street, Suburb D (the Suburb D Property) and C Street, Suburb E (the Suburb E Property) to be discharged such that the husband is removed as a borrower, mortgagor and/or guarantor.
3.Simultaneously with the wife’s compliance with Orders 1 and 2, the husband shall do all acts and things and sign all documents necessary to transfer to the wife all of his right title and interest in the Suburb E Property.
4.In the event that the wife fails to comply with Orders 1 and/or 2 then the husband and wife shall forthwith do all acts and things and sign all documents necessary to effect a sale of the Suburb E and Suburb D Properties on such terms as they agree and failing agreement, within 4 weeks of default of compliance with Orders 1 and/or 2 the husband shall nominate to the wife a solicitor and real estate agent to act upon the sale and the parties shall forthwith do all acts and things to list the property for sale with that real estate agent and solicitor with such sale to take place by way of auction within five months of the making of these Orders with the properties to be sold at a reserve price as agreed upon between the parties and failing agreement within 2 weeks of the listing with the real estate agent the reserve price shall be as nominated by the real estate agent.
5.In the event that the properties or either of them fail to sell at the first public auction they shall be submitted for sale to successive public auctions 6 weeks apart until sold, with the reserve price at each successive auction to be as nominated by the real estate agent.
6.The proceeds of sale of the Suburb E Property shall be applied in discharge of the mortgage and costs of sale and thereafter paid to the husband.
7.The proceeds of sale of the Suburb D Property shall be applied in discharge of the mortgage and costs of sale and thereafter shall be paid as to 67.5 percent to the husband less any amount paid pursuant to Order 6 and the balance to the wife.
8.Pending the payment to the husband pursuant to these orders both parties are restrained from further encumbering the properties or dealing in any way with the properties other than in accordance with these orders or with the consent of the other in writing.
9.In default of a party doing any act and/or thing and/or executing any document as is necessary to give effect to these orders, a registrar of this court is appointed pursuant to section 106A of the Family Law Act 1975 (Cth) to execute all such documents in the name of the party in default and to do all such acts and things as are necessary to give effect to these orders.
10.In the event that either party wishes to make an application for costs they are to contact my Associate within 28 days of the making of these Orders.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Kaplan & Hankel has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
SCHONELL J:
These are proceedings pursuant to Part VIII of the Family Law Act 1975 (Cth) (‘the Act’) for financial adjustment. Joined to the proceedings as the second respondent is the respondent’s mother. Her joinder follows the transfer to her after separation of all of the shares in F Pty Ltd, a company owned and controlled by the wife (“the Company”).
Each of the husband and the second respondent were not represented at the hearing. Consequently, the orders each sought were not refined with any precision. The matter was complicated by the fact that the second respondent does not speak English.
As the hearing progressed, the husband indicated that all he sought from the joinder of the second respondent was the release from guarantees he had given for mortgages secured against assets of the Company. Each of the parties agreed to an order to that effect and upon the making of such order, the husband indicated that he no longer sought any orders against the second respondent.
The second respondent, despite being given the opportunity to withdraw, sought to remain a party.
The proceedings have been before the Court for an inordinately long period of time, the initial application having been filed on 17 December 2021 in Division 2 of the Federal Circuit and Family Court of Australia. On 24 February 2023, the Deputy Chief Judge of that court made directions for trial and orders fixing the matter for final hearing before a judge of that court for three days commencing on 19 September 2023.
The matter came before that judge in chambers on 3 March 2023 whereupon the trial directions were vacated and different directions made. The husband then filed an amended application seeking parenting orders. On 16 March 2023, that judge, noting the amended application, made directions for the filing of a Response and confirmed the hearing dates.
On 1 May 2023, that judge vacated the orders made by the Deputy Chief Judge listing the matter for hearing, made orders for the preparation of a Family Report, and transferred the matter to Division 1 of the Federal Circuit and Family Court of Australia. The notations to those orders record that the matter was transferred to Division 1 as that judge was of the view that a final hearing of the property and parenting applications “was unlikely to be contained to not more than four days”. It is not immediately apparent what that means in circumstances where the matter had been listed for hearing for three days.
As consequence of that order, the proceeding that had previously been allocated a final hearing and had been in that Court for nearly 18 months, effectively started again.
The matter was then case managed in this Court by a registrar. The parenting aspect resolved by consent. On 3 October 2024, the Case Management Judge made a series of comprehensive notations and directions to prepare the matter for hearing including the joinder of the second respondent. The matter was allocated a hearing of two days commencing on 9 January 2025.
The directions and notations of the Case Management Judge are an example to be emulated of effective case management.
The final matter commenced on 9 January 2025 with the evidence concluding that day and final submissions the next day completing at lunchtime.
It remains unclear to this Court why the matter was ever transferred to Division 1. It is incumbent upon judges of both courts to pay more than mere lip service to the provisions of s 95 of the Act. There is statutory obligation reposed in both courts to ensure the efficient use of judicial resources, the efficient disposal of cases and the resolution of disputes in a timely and proportionate manner. That overarching purpose is not achieved by simply transferring matters from Division 2 to Division 1. Division 1 is not a dumping ground for hearings that should never be allocated to that court.
As is evident from the directions made by the Case Management Judge, an efficient use of court directions and efficient trial management saw the financial dispute between the parties comfortably disposed of in less than two days.
BACKGROUND
The wife was born in 1981 in Country G and is 43 years of age.
The husband was born in 1985 in New Zealand and is 39 years of age.
The wife moved to New Zealand in 2002 to study. The wife contends that her parents lent money to her for her study and living costs in New Zealand, and that the loan was interest free and was required to be paid back when the wife graduated and started earning money.
The parties are in dispute as to the date of commencement of cohabitation. The husband contends in his affidavit that he and the wife commenced cohabitation in or around 2007 in a de facto relationship. During cross-examination, he said that they commenced cohabitation in late 2008/ early 2009.
The wife contends that the parties met in 2008, lived in the same lodgings as a ‘share house’ in separate rooms with an informal tenancy agreement, and thereafter cohabitation commenced in September 2011, when she deposes that the “parties commence a serious relationship”.
The parties were married in 2011 in City H. There are two children of the relationship, X born 2012 and Y born 2015.
The parties are in dispute as to the ownership of the Company and in particular as to the beneficial ownership of the shares.
The wife’s affidavit states:
26.In or around end of 2008, my mother and I had ongoing conversation about setting up the company and investing in the house. I recall we had a conversation in [Country G language] to the following effect:
Mum:‘I don’t know anything about the company setup.’
[Ms Hankel]: ‘Do not worry about it, I know how to do it myself, a friend of mine […] who is a lecturer at University […] showed me how to do it the other time, I can just register a company on the internet. So just leave this part to me.’
Mum:‘ok, sounds good.’
[Ms Hankel]: ‘How much deposit do you have for the house?’
Mum:‘How much do you need?’
[Ms Hankel]: ‘I think I need about $40,000 at least.’
Mum:‘I have some money will mature soon, it is in term deposit, I will transfer when it matures. When do you need the money.’
[Ms Hankel]: ‘not yet, I will let you know. More realistically next year.’
Mum:‘ok just let me know.’
…
35.[In] or around early […]2009, I recall having a conversation with my mum over the phone in [Country G language] to the following effect:
[Ms Hankel]: ‘I have registered the company using the makeup name [F Pty Ltd]. And I will start looking/or properties to buy soon, but the properties are around NZD $200,000 to 250,000, we will need at least $40,000. How much money do you have, and when can you send them to me?’
Mum:‘I have just over 200,000.00 [Country G currency] matured in term deposit and I can send them to your account’.
[Ms Hankel]: ‘Ok, I do not need all of that and only 100,000.00 [Country G currency] for now. If I need more I will let you know’
(Emphasis omitted)
The husband says that he and the wife purchased several properties in the name of the Company. He says:
20.During the relationship, [Ms Hankel] and I purchased several other properties under [F Pty Ltd] through accumulated joint income and by refinancing our mortgages. To the best of my knowledge the properties are as follows:
a. [J Street, Suburb K, City L], New Zealand
b. [P Street, Suburb Q, City L], New Zealand
c.[M Street, City H], New Zealand
d. [N Street, Suburb O, City H], New Zealand
…
25.Following separation, I ceased working as a director at [F Pty Ltd]. To the best of my knowledge, [Ms Hankel] has full control over [F Pty Ltd] and its assets.
The Company first acquired a property at P Street, Suburb Q, City L, New Zealand (“Suburb Q”). The wife deposes to the following:
49.In or around [late] 2009, I did attend [P Street, Suburb Q] (‘[Suburb Q] Property’ or ‘[P Street] Property’) for inspection…
…
51.In or around [late] 2009, I went to view the [Suburb Q] property again to confirm I was satisfied. Soon after viewing the second time, I went to [R Bank] [City L] Branch and saw the home loan banker, [Ms T]. [Ms T] requested the amount of deposit available and the rental appraisal. She assisted me in obtaining the mortgage and would guide me on the documents required which I would collate and provide. I do not recall the other specific information she requested but it was all financial to assess the suitability of [F Pty Ltd] obtaining the loan with my financial capacity as well.
52.I eventually got the loan approval to the purchase the [Suburb Q] property and provided it to the agent with the tender or offer. I did have numerous discussions and negotiations with [the agent] in relation to the price of the [Suburb Q] property. At some point in time the agent […] informed me that my offer for the [Suburb Q] property was accepted.
53.In or around [late] 2009, I made a deposit of NZD $15,000.00 by to the purchase of the [Suburb Q] property by bank cheque after the 10 day cool down period as a confirmation of contract.
54.[F Pty Ltd] purchased the [Suburb Q] property using my finances, the revenue to be generated from the property, and contributions from my parents.
55. The [Suburb Q] property was funded by:
a. A loan from the Bank NZD 257,600.00
b. Deposit from my parents NZD 26,304.00
c. Deposit from my savings NZD 38,394.00
d. The total which was paid for the [Suburb Q] property is NZD 322,298.00
56.At the time of purchase, the [Suburb Q] property mortgage repayments were NZD 369.00/week split into three loans and rentals were NZD 350.00/week.
57.I was making the shortfall payment of NZD 19.00/week and was making further payments for council rates, insurance, agency fees, Earthquake damage fees, maintenance fees and all other relevant fees.
58.Once the [Suburb Q] property was purchased I arranged for a painter who did paint over the wallpaper walls of the [Suburb Q] property.
59.I was predominantly responsible for the [Suburb Q] property, including viewing the property, doing research, handling inspections, checking city rates, managing repairs, organizing bank loans, working with lawyers, setting up tenancy agreements, and getting insurance. I also dealt with property inspections after the earthquakes in New Zealand. I have been managing all matters related to the [Suburb Q] property since purchase.
60.To the best of my knowledge [Mr Kaplan] made no contributions to the purchase or conservation of the [Suburb Q] property.
In relation to the Suburb Q property, the husband says:
32.[Ms Hankel] and I also organised for the property located at [P Street, Suburb Q, City L] New Zealand (“[Suburb Q] Property”) to undergo renovations. I was responsible for managing the renovation contracts and fixing up the property including but not limited to painting, sanding, plastering the property.
The Company next acquired a property at J Street, Suburb K, City L (“J Street”). The wife deposes:
78.[In] or about [mid] 2010, [F Pty Ltd] purchased the [J Street] property by using the equity in the [Suburb Q], assessment of my earnings, assessment of the rental earnings of [J Street] and my savings.
a. The [J Street] property was funded by:
[F Pty Ltd] loan and overdraft. $NZ 507 ,000.00 (96%)
My Savings $NZ 20 ,000.00 (4%)
b.The total which was paid for the purchase of [J Street] property including fees, and charges was $NZ 527,000.000.
c.The mortgage payments at the time of purchase were approximately NZD 744.23\week.
d.To the best of my knowledge there were no financial contributions by [Mr Kaplan] to the purchase of the [J Street] property.
(Emphasis omitted)
The husband does not provide evidence in his affidavit as to the acquisition of J Street beyond the property being listed as purchased “through accumulated joint income and by refinancing our mortgages” (husband’s affidavit filed 11 November 2024, paragraph 20).
The parties then acquire a property at S Street, Suburb U, City H (“S Street”) in their joint names. The husband deposes:
18.To the best of my recollection, [in early] 2012, [Ms Hankel] and I jointly purchased the property situated at [S Street, Suburb U, City H] in New Zealand (“[Suburb U]Property”). The property was purchased with joint savings, each of our New Zealand First Homeowner Grants, and my superannuation of approximately $6,000.
In relation to the S Street property, the wife says:
105. The financing of the [S Street] property was as follows:
a. [F Pty Ltd] NZD 17,000.00
b. [Ms Hankel] Savings NZD 15,000.00
c. [Mr Kaplan] Savings NZD 5,994.00
d. Bank Loan NZD 460,000.
e. Total NZD 492,000.00
…
182.I and [F Pty Ltd] through my parents made significant contributions to the purchase of the [S Street] property including using the collateral of [F Pty Ltd] for us to purchase it. To the best of my knowledge [Mr Kaplan] did contribute about NZD 6,000.00 to the purchase of the [S Street] property and no other ongoing financial contributions were made.
…
Sale of [S Street] to [F Pty Ltd]
252.In or about [mid] 2016, the [S Street] property was sold to [F Pty Ltd] at an agreed price of $900,000.00. The funds were applied to discharge the mo11gage for the [S Street] property. The remainder of the funds of NZ $460,280.78 were applied to [F Pty Ltd].
(Emphasis omitted)
The Company purchased in 2013 a property at N Street, Suburb O (“N Street”). The wife says of this purchase:
118.In or around [mid] 2013, [F Pty Ltd] through my mother and I bid NZD $634,500 to purchase the property located at [N Street, City H] (‘[N Street] property’) and were consequently successful.
Financing of the [N Street] Property
119. The purchase of the [N Street] property was financed by:
Loan from Bank $NZ 589,496.49 (93%)
Deposit from my savings $NZ 31,725.00 (5%)
Deposit from [F Pty Ltd] (OD) $NZ 14,996.49 (2%)
a.The mortgage of the [N Street] property was secured fully by [F Pty Ltd] and the total amount for the purchase was NZD 636,217.98 including legal costs and other associated fees.
b.I arranged for [F Pty Ltd] to place the property on rent which was about NZ$ 590.00 a week.
c.The mortgage at the time of purchasing the [N Street] property was NZ$723.30/week and [F Pty Ltd] was paying the shortfall of NZ$133.00/week which was NZ$6,916.00 per year from the [J Street] rental income.
d.[F Pty Ltd] did pay for the rates, insurance, agent fees, maintenance and associated costs relating to the [M Street] property with my personal contributions being minimal.
(Emphasis omitted)
As with J Street, the husband does not provide evidence in his affidavit as to the acquisition of N Street beyond the property being listed as purchased “through accumulated joint income and by refinancing our mortgages” (husband’s affidavit filed 11 November 2024, paragraph 20).
In mid-2013, the Company then purchased a property at M Street, City H (“M Street”) to which the wife deposes:
128.[In] or about [mid] 2024, I bid for the [M Street] property over the phone with the agent [Mr V] from [W Company], and [F Pty Ltd] won the Auction for $201,500.
Financing the [M Street Property]
129.The purchase for the [M Street] property was financed by:
a. Loan from the Bank NZD 201,500.00.
b.The total mortgage of the [M Street] property was secured by the equity of [F Pty Ltd].
c.The mortgage repayments at the time of purchase were NZD 298.11/week and the strata fees were approximately NZD 86.00/week. There were other council fees, repairs, and agent fees. The direct fees equated to approximately NZD 384.11/ week.
d.The rent was NZD 380.00/week and there was a shortfall of NZD $4.11/week which was covered by [F Pty Ltd] itself.
130.[Mr Kaplan] made no initial and ongoing contributions to the purchase and maintenance of the [M Street] property.
(Emphasis omitted)
Similarly to N Street, the husband does not provide evidence in his affidavit as to the acquisition of M Street beyond the property being purchased “through accumulated joint income and by refinancing our mortgages” (husband’s affidavit filed 11 November 2024, paragraph 20).
In 2014, the husband and wife moved to Australia.
In late 2016, the parties purchased land at Suburb E as tenants in common, as to 80 percent in the wife’s name and 20 percent in the husband’s name. The husband contends in his affidavit as follows:
17.In or around [mid 2015], [Ms Hankel] and I purchased the property located at [C Street, Suburb E] NSW (“[Suburb E] Property”). The property was purchased with joint savings, and each of our Australian First Homeowner grants.
…
30.In or around 2016, [Ms Hankel] and I organised for a house to be built on the [Suburb E] Property. We jointly organised contractors to undertake this work.
The wife contends:
132.In or around early 2015, [Mr Kaplan] and I were looking around for a property to purchase. We would drive and visit different locations and properties together. I had initially wanted to purchase a property in [one suburb] but the prices rose fast and we could not afford it there. On one weekend we drove to [Suburb E] and we liked the land which was being sold despite it being unregistered. When we spoke to the agent at the time he informed us the expression of interest applications would be occurring the next weekend through a link.
…
138.In or around early 2015, the agent contacted me that there was availability of a lot we would possibly like. [Mr Kaplan] and I then confirmed our expression of interest to the lot and paid a fee of $1,000.00 through an online transfer.
139.In or around mid 2015, [Mr Kaplan] and I engaged [Z Company] homes to design the property located at [Suburb E].
…
141.In or around mid 2016, I went to CBA Bank where I met a […] loan manager [Mr AA]. CBA informed me to obtain several documents in order to have the loan approved. I recall arranging my payslips, and [Mr Kaplan’s] payslips and providing the deposit we would provide to the purchase of the [Suburb E] property with Commonwealth […] There was several communication between myself and the bank until one afternoon I received an email from CBA that they had approved the mortgage on the Lot.
142.In or around [late] 2016, the [Suburb E] lot was registered and soon after we begun to prepare for settlement.
Financing of the [Suburb E] Lot
143.On or about [late] 2016, the purchase of [DD Street, Suburb E] was settled.
a. It was financed accordingly:
i.Deposit from [Mr Kaplan] and I Savings $39,859.30
ii. Contribution from My Parents $40,000.00
iii. Land Loan from CBA $295,800.00
iii. Total amount for the purchase of the [Suburb E] lot 375,689.30.
b.The [Suburb E] property was registered with 20% attributed to [Mr Kaplan] and 80% attributed to myself. I had spoken to [Mr Kaplan] about it and he agreed on this figure…
…
148.In or around 2018, I applied for first home owner grant of AUD $15,000. I remember I printed the forms at the office during work and then I filled them out. I then posted them. I also got [Mr Kaplan’s] information and completed it. Soon after posting them, I received a notice that the first home buyer’s grant was approved. The first home buyer grant was for both myself and [Mr Kaplan].
Financing of the [Suburb E] Build
150. The build of [Suburb E] park was financed by:
a. Building Loan from CBA $364,655.00.
…
155.I arranged for the first tenants and subsequent tenants who have moved into the [Suburb E] property. The first tenants were paying $620.00/week and the repayments were $740.00/week. I was responsible for paying the shortfall of $117.00/week ($6,084 yearly). This is in addition to insurance rates, council rates, and other associated costs amounting to AUD 3,000.00 per year.
156.In the last financial year the weekly rentals were $670.00 weekly and the repayments were $885.5 weekly. There is a shortfall of $215.50 weekly ($11,206.00 yearly) which I have been paying for the [Suburb E] mortgage. Additionally, I paid approximately $2,200.00 annually in management fees…
(Emphasis omitted)
The property at J Street was destroyed in 2017. The husband says of this incident:
21.The property located at [J Street, Suburb K, City L] New Zealand (“[Suburb K] Property”) [was destroyed]. To the best of my knowledge, in or around [early] 2017, [F Pty Ltd] and/or [Ms Hankel] received the insurance payout of approximately $500,000.
…
23.[In early] 2019 [Ms Hankel] purchased [B Street, Suburb D] NSW (“[Suburb D] Property”) using marital assets from the insurance proceeds received in section 21. I signed as guarantor of this purchases as the purchase would not have been allowed with out my supporting income.
…
26.In addition to this, I made payments to [Ms Hankel] of approximately $25,000 to assist with the rebuild of the [Suburb K] Property. I am unaware of the status of the rebuild.
27.To facilitate this, I made two withdrawals from my [Super Fund 1] account on [two dates in mid-2020] of $10,000 each. From these withdrawals I paid $15,000 to [Ms Hankel]. The balance was used for my own daily expenses.
28.The other $10,000 in payments to [Ms Hankel] was made up of fortnightly payments of approximately $1,000.
In relation to J Street being destroyed and the subsequent insurance payout the wife says:
253.In response to paragraph 34 of the Applicant’s affidavit dated 8 March 2023, I deny that I used the insurance payments to purchase the [Suburb D] property.
254.On or about [early] 2017, the [J Street] property [was destroyed]. I arranged for the insurance and claims to be made.
255.[F Pty Ltd] received NZD 489,635.48 as a payout. These funds were applied accordingly:
a. Demolition paid by Insurance directly NZD 54,016.42
b. Emergency Structure repair NZD 8,282.21
c. Removal of blocks NZD 2,038.31
d. [R Bank] loan Repayment
i. [J Street] 1 endong […04] NZD 136,194.42
ii. [J Street] 2 ending […05] NZD 136,068.53
iii. [J Street] 3 ending […6] NZD 136,144.08
e. Mortgage repayments […06] NZD 5,381.91
f. Fencing and other associated costs NZD 11,000.00
g. The total expenditure was NZD 489,125.
(Emphasis omitted)
Following the parties’ separation, a property at B Street, Suburb D (“Suburb D property”) was purchased in the wife’s sole name. The husband says:
23.[In early] 2019 [Ms Hankel] purchased [B Street, Suburb D] NSW (“[Suburb D] Property”) using marital assets from the insurance proceeds received in section 21. I signed as guarantor of this purchases as the purchase would not have been allowed with out my supporting income.
The wife contends that the husband made no contribution to the purchase of the property other than signing a guarantee. She says as follows:
168.In or around [late] 2018, I spoke with [Mr Kaplan] about the purchase of the new property. We were already separated under one roof at the moment and I requested him to assist me to get a property for the Children. [Mr Kaplan] and I had a conversation to the following effect:
[Ms Hankel]: ‘I want to buy a property to live in, I don’t want to keep renting and paying other people for their house. I also want the children to grow up in [Suburb D]. Can you help me with borrowing/or the loan?’
[Mr Kaplan]: ‘Sure.’
[Ms Hankel]: ‘Yeah thank you, it won’t affect you in anyway, I will pay for the mortgage and deposit. I just don’t want to live in a rental property forever. You know our kids will be living in it too’.
[Mr Kaplan]: ‘Ok that’s fine, I will help you.’
[Ms Hankel]: ‘I will let you know when I need your payslips and bank statements’
…
173.On or around [early] 2019, I settled the [Suburb D] house and moved in. [Mr Kaplan] was agreeable to the house being under my name 100% as I informed him I will be responsible for all payments and we had separated.
Financing of the [Suburb D] Property
174. The purchase of the [Suburb D] Property was financed accordingly:
i. [F Pty Ltd] $250,000.00 (14%)
ii. My Savings $173,000.00 (10%)
iii. [BB Financial Services] Loan $1,360,000.00 (76%)
b.In total the [Suburb D] property cost $ 1,783,000.00 inclusive of stamp duty and associated costs.
c.At purchase the repayments were approximately $2,460.00 fortnightly. Currently I pay $3,565.34 per fortnight ($92,698.84 yearly).
d.I am solely responsible for making these payments and had separate the time of purchasing the [Suburb D] Property.
177.[Mr Kaplan] made no initial and ongoing contributions to the purchase and maintenance of the [Suburb D] property with his only contribution being assisting me to obtain the loan and being the guarantor of the loan
(Emphasis omitted)
Four of the seven properties the subject of these proceedings have been sold, in circumstances the wife describes as:
252.In or about [mid] 2016, the [S Street] property was sold to [F Pty Ltd] at an agreed price of $900,000. 00. The funds were applied to discharge the mo11gage for the [S Street] property. The remainder of the funds of NZ $460,280.78 were applied to [F Pty Ltd].
…
256.On or about [early] 2022, [F Pty Ltd] sold the [M Street] property which settled [in mid] 2022.
257.This was due to the property not being able to attract tenants during COVID and there were mortgage repayments which could not be made causing [F Pty Ltd] to be under severe financial stress. The property also required extensive renovations which [F Pty Ltd] could not undertake at the time.
258.The [M Street] property was sold for $300,000.00 and the mortgage was $185,524.80. The net proceeds were NZD 97,811.34 which were used for the cross mortgages of [F Pty Ltd] less NZD 20,000.00 which was used for living costs and expenses. I deny any allegation that I misused NZD 97,811.34.
…
259.On or about [early] 2024, [F Pty Ltd] sold the [J Street] property. The property was bare land due to the [destroyed] house. The property was generating any money and [F Pty Ltd] was in severe financial distress due to the rise in interest rates. [F Pty Ltd] made the decision to sell the [J Street] property as it was not generating any income. The sale of [J Street] property was through a comi order and all funds were applied to the mortgages held by [F Pty Ltd].
260.The [J Street] property sold for NZD 425,000.00 and after associated selling costs the remainder of NZD 412,487.96 was applied to the [F Pty Ltd] Mortgages.
…
261.The [Suburb Q] property is was sold in [late] 2022 due to the financial difficulties [F Pty Ltd] was facing. The funds were applied to the cross collateralised loans of [F Pty Ltd].
(Emphasis omitted)
The husband contends as to the sale of the properties:
19.In or around 2015, [Ms Hankel] and I sold the [Suburb U] Property to [F Pty Ltd]. We then re-applied the net proceeds of sale back into [F Pty Ltd] to purchase other properties. The net proceeds of sale were approximately $400,000.
…
44.At some time during 2021 [Ms Hankel] and I had a conversaition about the [J Street] property. She told me “I am going to sell [J Street]”. I told her don’t see that property or any other property until after the property division is finalised. She said “I don’t need your permission or consent”.
45.Some time after that conversation took place, I discovered on the internet that the [Suburb K] property was listed for sale […]. The website specifies that the property was listed for sale in [late] 2021. …
46.I discovered that the [City H] property was sold [in] 2022 when I was provided with a copy of [Ms Hankel’s] sworn Affidavit. She disposed that the [M Street] property was sold and settled for $300,000.00 and the money of sale was used to pay off the $185,000.00 mortgage, $15,000.00 real estate fees and $3,000.00. To this date I have not been provided evidence or information about how the remaining funds have been used or where they are now.
47.I did not consent to the property sale referenced in section 46. and did not receive any portion of the net sale proceeds. I have still not been provided with statements showing how the funds were used after they were deposited in the [F Pty Ltd] bank accounts.
(As per original)
The wife transferred the shares in the Company to the second respondent, in the following circumstances:
283.In or about 2021, my mother told me words to the effect ‘ I want you to transfer all the shares back to me’. I told her ‘I will transfer you half of the shares because I do not know the tax implications on me’. My mother then said ‘You owe me study money you have to pay me back and do not forget I also transferred you $40,000.00 Australian dollars for building the house in Australia’.
284.I then transferred the shares back to my mum in two installments. [In] June 2021 I transferred 50% share and then [in] November 2022 I transferred the other 50% share as I was holding the shares for my mum and dad.
(Emphasis omitted)
The husband contends that the transfer of shares in the company occurred in the following circumstances:
48.This matter was listed for a Directions Hearing before Judicial Registrar Jackson on 1 November 2022. Prior to that Court event, my solicitor composed a proposed Minutes of Order for [Ms Hankel’s] consent an Order inter alia to restrain [Ms Hankel] from causing the company to dispose of further properties owned by the company. … During the Directions Hearing on 1 November 2022, [Ms Hankel’s] solicitor informed the Court that [Ms Hankel] would not agree to the proposed Minutes of Order but that she would agree to provide further financial disclosure pertaining to the sale of the [City H] property.
49.The proposed Minutes of Order contained a provision to restrain [Ms Hankel] by injunction from transferring her shares to any other person. The Interlocutory Hearing was listed on 19 December 2022. [In November] 2023, [Ms Hankel] caused the transfer of all shares in [F Pty Ltd] to her mother, [Ms Briley].
The wife makes allegations of family violence traversing the relationship from 2010 until after separation including on 26 November 2021 when the husband assaulted Y for which he was subsequently convicted, and an Apprehended Domestic Violence Order (ADVO) was put in place against the husband for the protection of Y.
The husband’s affidavit does not respond to the allegations of family violence, but in cross-examination denied perpetrating family violence on the wife but admitted the incident involving Y.
The parties are at issue as to the contributions of each of them. The wife essentially contends that the husband made little or no contribution whether financially or non-financially or as a home maker or parent. She contends he gambled, played computer games and was otherwise unemployed for large periods of the relationship. At every opportunity she minimized or downplayed any contribution he asserts to have made.
Since separation, the husband has re-partnered and has two children of that relationship. The wife has not re-partnered.
The second respondent gives evidence that she and her husband loaned the wife monies to study in New Zealand, that the Company was established for their benefit to aid in their retirement, and that the loan they advanced the wife to study was repaid by the purchase by the wife of real estate in the name of the Company. Such loan was repaid, according to the second respondent, in 2013.
DOCUMENTS RELIED UPON
The husband relied on the following documents:
(1)Amended Application for Final Orders filed 3 September 2024;
(2)Affidavit of the husband dated 11 November 2024;
(3)Financial Statement of the husband filed 6 November 2024;
(4)Case Outline of the husband filed 6 January 2025.
The wife relied on the following documents:
(1)Amended Response to Final Orders filed 13 November 2024;
(2)Affidavit of the wife filed 13 November 2024;
(3)Financial Statement of the wife filed 17 February 2023;
(4)Case Outline of the wife filed 29 December 2025.
The second respondent relied on the following documents:
(1)Response to Final Orders filed 13 November 2024;
(2)Affidavit of the second respondent sworn/affirmed 9 January 2025;
(3)Case Outline of the second respondent filed 8 January 2025.
Each party sought the tender of documents, some of which became exhibits in the proceeding.
ISSUES AND EVIDENCE
Counsel for the wife identified the factual issues for determination to be as follows:
(1)Composition of the balance sheet (Exhibit 1)
(2)The duration of the relationship, more particularly when the parties commenced cohabitation and the final date of separation.
(3)Whether the shares in the Company were held by the wife on trust for her mother.
(4)Whether the transfer of the shares in the Company by the wife to her mother was pursuant to such a trust or intended to defeat or frustrate an order of the court or a disposition that should be added back.
(5)Whether the trust was established to repay a loan advanced by the wife’s parents.
(6)The wife’s “Kennon” claim.
I will first deal with factual issues 2 to 5. A resolution of 3, 4 and 5 will inform in part the answer to 1.
I have read all of the evidence relied upon in the proceedings including the Exhibits but do not propose to repeat all of it in these reasons. As the High Court reminds in Whisprun Pty Ltd v Dixon (2003) 200 ALR 447:
62. … A judge’s reasons are not required to mention every fact or argument relied on by the losing party as relevant to an issue. Judgments of trial judges would soon become longer than they already are if a judge’s failure to mention such facts and arguments would be evidence that he or she had not properly considered the losing party’s case.
Some of the evidence in the affidavit of the wife and her mother was of limited assistance where it amounted to broad ranging criticisms of the husband, sweeping conclusions without foundation, self-serving statements unsubstantiated by the foundational facts, contradictory assertions or deficiency by the failure to include relevant evidence known to the deponent which contradicted the absoluteness of aspects of their written evidence.
In that respect, three instances for present purposes will suffice. The wife conceded for the first time in cross-examination that the husband had provided personal guarantees for the mortgages obtained to purchase four of the five parcels of real estate by the Company despite giving evidence that he had made no contribution to the acquisition of at least three of those properties and failed to make any reference to the fact that he had signed guarantees, albeit knowing he had. The evidence of the wife and her mother as to the circumstances of alleged repayment of an alleged loan was so inconsistent and consequently irreconcilable as to render implausible their differing accounts. In relation to the Suburb D property, the wife’s evidence was as follows:
177.[Mr Kaplan] made no initial and ongoing contributions to the purchase and maintenance of the [Suburb D] property with his only contribution being assisting me to obtain the loan and being the guarantor of the loan.
In cross-examination she conceded, inconsistent with her sworn evidence, that the $250,000 provided by the Company to the purchase price was in fact sourced from the proceeds of sale of the parties jointly owned property. The husband had thus made a direct financial contribution with the wife of at least $250,000 to the purchase of the Suburb D property.
The task of fact finding in this matter is made more difficult where the husband and second respondent were unrepresented and consequentially matters that would ordinarily be subject to the rigour of cross-examination were not explored, where there are inconsistencies in the written evidence of the wife and her mother, where there are internal inconsistencies in the wife’s case as presented when compared with her written evidence and inconsistencies between the wife’s evidence and her case when compared with documents and undisputed facts.
The wife’s case and that of her mother for a trust relies upon an acceptance of their affidavit evidence which comprised a series of conversations and behaviours said to be consistent with the creation of a trust. Counsel for the wife conceded that there were no documents that supported the finding of a trust.
In light of the deficiencies and inconsistencies referred to above and more specifically below I place little weight on the evidence of alleged conversations between the wife and her mother said to have occurred many years earlier in preference to the non-contentious facts and contemporaneously prepared documents which I find are more reliable and upon which I place greater weight. In that respect, I adopt the observations in Watson v Foxman (1995) 49 NSWLR 315, by McLelland CJ in Eq where he said at 319:
… Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience
While Lord Pearce in Onassis v Vergottis [1968] 2 Lloyd’s Report 403 observed at 431:
“Credibility” involves wider problems than mere “demeanour” which is mostly concerned with whether the witness appears to be telling the truth as he now believes it to be. Credibility covers the following problems. First, is the witness a truthful or untruthful person? Secondly, is he, though a truthful person, telling something less than the truth on this issue, or, though an untruthful person, telling the truth on this issue? Thirdly, though he is a truthful person telling the truth as he sees it, did he register the intentions of the conversation correctly and, if so, has his memory correctly retained them? Also, has his recollection been subsequently altered by unconscious bias or wishful thinking or by overmuch discussion of it with others? Witnesses, especially those who are emotional, who think that they are morally in the right, tend very easily and unconsciously to conjure up a legal right that did not exist. It is a truism, often used in accident cases, that with every day that passes the memory becomes fainter and the imagination becomes more active. For that reason a witness, however honest, rarely persuades a Judge that his present recollection is preferable to that which was taken down in writing immediately after the accident occurred. Therefore, contemporary documents are always of the utmost importance. And lastly, although the honest witness believes he heard or saw this or that, is it so improbable that it is on balance more likely that he was mistaken? On this point it is essential that the balance of probability is put correctly into the scales in weighing the credibility of a witness. And motive is one aspect of probability. All these problems compendiously are entailed when a Judge assesses the credibility of a witness; they are all part of one judicial process. And in the process contemporary documents and admitted or incontrovertible facts and probabilities must play their proper part.
These observations are apposite to the resolution of the inconsistencies raised by the evidence of the wife and her mother and its conflict with documentary evidence and the non-contentious facts.
Duration of the Relationship
The parties are at issue as to when a de-facto relationship commenced and the date of separation.
In that respect, the husband contended in his affidavit that the parties commenced cohabitation in or around 2007, contending they entered into a de facto relationship at that stage. When asked questions about when the relationship commenced the husband changed his evidence and contended that the parties commenced living together in a de facto relationship in late 2008/2009.
The husband contended that the parties separated on a final basis in April 2019.
The wife for her part contended that the parties first met in early 2008 at a public venue in City L. The husband agreed with the wife’s contention.
The wife says that in or around late 2009/early 2010 the husband moved into an apartment she was occupying as a tenant. She contends that they were not in a committed relationship, and they were not making any life plans together. The wife says it was not until late 2011 that she and the husband began a serious relationship. She points to a conversation between her and the husband in late 2011 where there was a discussion of marriage and that shortly thereafter the parties were married in late 2011 (wife’s affidavit filed 13 November 2024, paragraph 95). The husband denied such a conversation took place.
The wife’s contention that they were not in a committed relationship and that it was not serious prior to late 2011 is inconsistent with the husband’s evidence and other objective facts. The evidence reveals that the parties opened a joint bank account in late 2009 (Exhibit 3). In mid‑2010 the Company completed the purchase of J Street. To complete the purchase, the Company provided 96 percent of the purchase price by way of loan from a bank secured in part by a guarantee given by the husband. In late 2010 the parties incorporated another company with each of them as shareholders.
I do not accept the wife’s evidence. I am satisfied consistent with the husband’s oral evidence, and the objective evidence established by way of the joint bank account, the creation of a Company and the husband giving a personal guarantee for borrowings by the Company, that the parties were in a serious relationship that had all the hallmarks of a de-facto relationship by late 2008 or early 2009.
The wife contends that the parties separated under the one roof in September 2017 with the husband finally vacating the home in April 2019. The wife’s evidence is that in November 2017 she said to the husband that she wished to separate. She says the husband did not move out and the parties continued living together albeit she says that she would sleep in the living room. She says that there was some back and forth in the relationship and that the husband did not finally leave until April 2019. The husband contends that the date of separation is April 2019, consequent upon his moving out of the home.
I prefer the husband’s evidence to that of the wife. Whilst I accept that the relationship had for a number of years been conflictual and that the parties had a number of separations, the final separation I accept took place in April 2019. That is consistent with the joint application for divorce lodged by the parties where they record in their joint application their date of separation as 8 April 2019 (Exhibit 4). I am satisfied that is the final date of the parties’ separation.
I consequentially find that the parties were in a relationship of approximately 10 years between late 2008, early 2009 until April 2019.
Was a trust established upon incorporation of the Company and was the transfer of the shares in the Company to the wife’s mother pursuant to that trust or in repayment of a loan provided by the wife’s parents
At the commencement of the hearing, the wife’s counsel was asked to identify exactly what the wife’s case was in relation to the Company. Her counsel submitted that at the time of incorporation of the Company the wife held the shares on trust for her parents, that the maternal grandmother had transferred monies to enable the purchase of the first property by the Company, and that the parents took an active role in locating new properties as well as undertaking renovations on the properties owned by the Company. The wife’s counsel referred to paragraphs 26 and 35 of the wife’s affidavit as support for the proposition that the wife held the shares in the Company on trust for her parents.
Counsel for the wife identified an alternative position, namely, that the wife was indebted to her parents as a consequence of the advance by them of various sums of money to enable her to study in New Zealand, that there was an understanding between the wife and the parents that the sums of money would need to be repaid, and that the wife repaid that money by transferring the shares in the Company to her parents.
During the course of submissions, I indicated to Counsel for the wife that I regarded the positions as factually and legally irreconcilable; either there existed a trust at incorporation or there did not, if there was a trust then the loan could not be repaid by the transfer of shares the property of the parents.
The wife and her mother gave evidence of funds being provided by the parents to enable the wife to travel to New Zealand to study. Both the wife and her mother give evidence of a discussion about the advancement of funds and that those monies would need to be repaid. The mother and the wife each give evidence that the wife’s parents did not have sufficient monies to be able to provide the funds other than by way of borrowing from extended family members.
The wife refers to a conversation where she agreed that she would repay the money when she graduated (wife’s affidavit filed 13 November 2024, paragraph 17) and later conversations where it was agreed she would repay her parents within five years of her graduation (wife’s affidavit filed 13 November 2024, paragraph 19).
The wife graduated in 2008.
Each of the wife and her mother provide a breakdown of the loan funds. The wife in her affidavit contends that the funds advanced by her parents totalled NZ$160,719.85. The wife’s mother for her part contends that the loan amount was NZ$189,500.
Whilst there was no cross-examination by the husband of the exact breakdown of the amounts, an examination of the wife’s affidavit reveals that in almost every instance there is no precision to the amounts contended to have been advanced by her parents. The introduction to the table asserts that the wife’s parents “paid the following costs.” It then recites various amounts said to have been paid by them. For example, in 2002 it is said that the travel costs including airfare, visa and agent’s fees are $5,000. The wife’s living costs in 2003, 2004, 2005, 2006 and 2007 are exactly the same in each year, namely $12,000. It is implausible that the wife’s living costs in each year would have been exactly $12,000.
The evidence of the second respondent was equally general consisting entirely of round numbers, such as, travel costs NZ$40,000, total books and stationary NZ$6,000 and 5-year accommodation fee and living costs NZ$66,000. I am not satisfied that the evidence of the amounts allegedly paid by the wife’s parents bears any relationship to the amounts actually paid.
It was put to the husband that he was aware and had knowledge of a loan between the wife and her parents for her study costs in New Zealand. The husband denied knowledge of any loan but did say that his understanding was that there was required to be some repayment to her parents but that it was more along the lines of looking after them in their retirement.
The wife, in her affidavit at paragraph 283, asserts that she had a conversation with her mother in 2021 wherein her mother said to her in words to the following effect:
I want you to transfer all the shares back to me.
The wife said that she would transfer half the shares back because she did not know what the tax implications would be. The wife, in her affidavit at paragraph 283, says that her mother said to her:
You owe me study money. You have to pay me back and do not forget I also transferred you $40,000 Australian dollars for building the house in Australia.
The wife then gives evidence that she transferred the shares back to her mother in two equal tranches, the first in mid-2021 and the second in late 2022 (wife’s affidavit filed 13 November 2024, paragraph 283 and 284).
The wife’s counsel in the Case Outline contended as follows:
2.…In 2021, the wife transferred the shares to the maternal grandmother to repay the wife’s debt to her parents. The wife asserts that this was a legitimate transaction and was not intended to defeat the property application of the husband.
The transfer of shares, if in repayment of a loan, would be inconsistent with the notion that the shares were always the property of the parents held by the wife on trust for them. It would amount to the wife using their property to repay a loan owed to them. A factual and legal absurdity.
Whilst there is no evidence of the value of the shares at the time of transfer to the wife’s mother, the value of the real estate held by the Company for the purposes of the hearing reveals a net equity of AUD $1,457,000. A remarkably generous repayment of an interest free loan said by the wife’s mother to total AUD $116,850 (second respondent’s affidavit affirmed 10 January 2025, paragraph 18).
The wife disputes the contention that the transfer was undertaken to defeat an order or to alienate property or to put it beyond the reach of this Court. The husbands unchallenged evidence is that at a Court event on 1 November 2022 his solicitor advised the Court that he sought an injunction restraining the wife dealing with the shares in the Company. He says his solicitor provided to the wife and the Court on 1 November 2022 a Minute of Order seeking such a restraint. He says the wife refused to agree to the order and the court listed the hearing of the husband’s injunctive relief on 19 December 2022.
On 1 November 2022, in full knowledge of the husbands foreshadowed application, the wife without notice to the husband transferred the remaining shares in the Company to her mother. I accept the husbands account of what happened.
The wife’s mother in her affidavit says:
44.By mid of 2013, [Ms Hankel] had repaid total student loan to us as below table before she went to Australia. And we were happy with the total repayment, and we said that she didn’t need to pay more. We wanted her to focus on raise the baby and settle down in Australia.
Ms Hankel Repayment in study loan Items Year Repayment Amount Amounts 1 2009 P Street purchase NZD 40000 2 2010 J Street purchase NZD 20000 3 J Street Renovation and setup NZD 40000 4 2013 N Street NZD 37000 5 2009-2014 All work and other costs NZD 30000 6 Total NZD 167,000
(English translation only)
The wife gives no evidence of any such conversation. The wife gives no evidence of paying $40,000 to J Street renovation and setup, $37,000 to the purchase of N Street or “all work and other costs $30,000.”
The repayment of the loan in 2013 as alleged by the second respondent and the communication of that fact to the wife, sits incongruently with the conversation the wife alleges she had with her mother in 2021 seeking repayment of a loan that had been repaid some seven years earlier. The evidence of the mother and the wife conflicts and is irreconcilable. I do not accept either of their accounts given its conflict.
The Company was incorporated in NZ in early 2009 and on incorporation 1,000 shares were issued to the wife. There is nothing on the face of the Company records that disclose the wife as other than the beneficial owner of the shares (Pages 200–204 of Exhibit 7).
The wife’s mother says that the wife was holding the shares on behalf of her husband and her (second respondent’s affidavit affirmed 10 January 2025, paragraph 22).
The wife says that she had a conversation with her parents in 2008 about setting up the Company to purchase a home for them in which they can live. She gives evidence of the incorporation of the Company and telling her parents that “we will need at least $40,000” (wife’s affidavit filed 13 November 2024, paragraph 35). She says her parents sent her NZ $26,305. She gives evidence of finding a suitable property, but the sale fell through and then finding another property and agreeing with her parents to purchase it.
The Company purchases a property at P Street Suburb Q in City H in October 2009. The wife says:
55. The [Suburb Q] property was funded by:
a.A loan from the Bank NZD 257,600.00
b.Deposit from my parents NZD 26,304.00
c.Deposit from my savings NZD 38,394.00
d.The total which was paid for the [Suburb Q] property is NZD 322,298.00
56.At the time of purchase, the [Suburb Q] property mortgage repayments were NZD 369.00/week split into three loans and rentals were NZD 350.00/week.
57.I was making the shortfall payment of NZD 19.00/week and was making further payments for council rates, insurance, agency fees, […] damage fees, maintenance fees and all other relevant fees.
58.Once the [Suburb Q] property was purchased I arranged for a painter who did paint over the wallpaper walls of the [Suburb Q] property.
59.I was predominantly responsible for the [Suburb Q] property, including viewing the property, doing research, handling inspections, checking city rates, managing repairs, organizing bank loans, working with lawyers, setting up tenancy agreements, and getting insurance. I also dealt with property inspections after the [natural disasters] in New Zealand. I have been managing all matters related to the [Suburb Q] property since purchase.
(Emphasis omitted)
The wife, not her parents, gave a guarantee under the mortgage. It was the wife who met the shortfall and undertook the work referred to by the wife at Paragraph 59, not her parents.
In mid-2010, the Company acquires another property in City H. The wife’s evidence is as follows:
78.On or about [mid] 2010, [F Pty Ltd] purchased the [J Street] property by using the equity in the [Suburb Q], assessment of my earnings, assessment of the rental earnings of [J Street] and my savings.
a. The [J Street] property was funded by:
[F Pty Ltd] loan and overdraft. $NZ 507,000.00 (96%)
My Savings $NZ 20,000.00 (4%)
b.The total which was paid for the purchase of [J Street] prope1ty including fees, and charges was $NZ 527,000.000.
c.The mortgage payments at the time of purchase were approximately NZD 744.23\week.
d.To the best of my knowledge there were no financial contributions by [Mr Kaplan] to the purchase of the [J Street] property.
(Emphasis omitted)
The wife gives no evidence of discussing the purchase of this property with her parents. Contrary to the wife’s evidence the husband makes a financial contribution by providing his guarantee to the bank to enable the Company to acquire the property.
The wife agrees that the husband undertook some renovations to the J Street property by painting and sanding. I accept the husband’s evidence that his wages were paid into an account with the wife and used to meet expenses including the deposit paid to purchase J Street.
The wife says that she told the husband in late 2010 that the Company was her parents’ company. This is denied by the husband.
In 2012, the parties purchase a property in their joint names at S Street. The wife’s evidence is the purchase was funded as follows:
105. The financing of the [S Street] property was as follows:
a. [F Pty Ltd] NZD 17,000.00
b. [Ms Hankel] Savings NZD 15,000.00
c. [Mr Kaplan] Savings NZD 5,994.00
d. Bank Loan NZD 460,000.
e. Total NZD 492,000.00
(Emphasis omitted)
The wife says she discussed the purchase with her parents. She also says that her father asked her, “what about the money you are still owing us” (wife’s affidavit filed 13 November 2024, paragraph 101).
The wife says that she spoke to her mother about the purchase of another property by the Company at N Street. The wife’s evidence of its purchase is as follows:
119. The purchase of the [N Street] property was financed by:
Loan from Bank $NZ 589,496.49 (93%)
Deposit from my savings $NZ 31,725.00 (5%)
Deposit from [F Pty Ltd] (OD) $NZ 14,996.49 (2%)
a.The mortgage of the [N Street] property was secured fully by [F Pty Ltd] and the total amount for the purchase was NZD 636,217.98 including legal costs and other associated fees.
b.I arranged for [F Pty Ltd] to place the property on rent which was about NZ$ 590.00 a week.
c.The mortgage at the time of purchasing the [N Street] property was NZ$723.30/week and [F Pty Ltd] was paying the shortfall of NZ$133.00/week which was NZ$6,916.00 per year from the [J Street] rental income.
d.[F Pty Ltd] did pay for the rates, insurance, agent fees, maintenance and associated costs relating to the [M Street] property with my personal contributions being minimal.
(Emphasis omitted)
The husband provides his guarantee to enable the Company to acquire this property.
In mid-2014, the Company purchased another property. The wife’s evidence is that it was funded as follows:
129. The purchase for the [M Street] property was financed by:
a.Loan from the Bank NZD 201,500.00.
b.The total mortgage of the [M Street] property was secured by the equity of [F Pty Ltd].
(Emphasis omitted)
The husband provides his guarantee to enable the Company to acquire this property.
In mid-2016, the parties sell their property at S Street to F Pty Ltd for $900,000. The wife’s evidence is as follows:
252.In or about [mid] 2016, the [S Street] property was sold to [F Pty Ltd] at an agreed price of $900,000. 00. The funds were applied to discharge the mo11gage for the [S Street] property. The remainder of the funds of NZ $460,280.78 were applied to [F Pty Ltd].
The Company retains $460,280 of the parties’ funds and the parties provide guarantees to the bank to enable the company to purchase S Street.
CONCLUSION
To accept the case advanced by the respondents requires the court to be satisfied that their case has been established to the requisite standard of proof. The Court “must feel an actual persuasion” of the case advanced by the party bearing the onus of proof. The concept of actual persuasion was elucidated by Emmett J in Warner v Hung (No 2) (2011) 297 ALR 56 as follows:
48.Under s 140(2) of the Evidence Act 1995 (Cth) (the Evidence Act), the Court must, in deciding whether it is satisfied that a case has been proved to the requisite standard, take into account:
•the nature of the cause of action or defence;
•the nature of the subject matter of the proceeding; and
•the gravity of the matters alleged.
When proof of any fact is required, the court must feel an actual persuasion of the occurrence or existence of that fact before it can be found. Mere mechanical comparison of probabilities, independent of any belief in reality, cannot justify the finding of a fact. Actual persuasion is achieved where the affirmative of an allegation is made out to the reasonable satisfaction of the court. However, reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequences of the fact to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, and the gravity of the consequences flowing from a particular finding are considerations that must affect whether the fact has been proved to the reasonable satisfaction of the court. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony or indirect inferences: see Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-2; [1938] ALR 334 at 342.
I am not so persuaded and am not satisfied that there existed a trust between the wife and her parents of the shares in the Company or that the wife at the time of incorporation or at any time thereafter until after separation regarded the Company as other than her own property. Nor am I satisfied that there was a loan to be repaid or repayment of a loan to her parents at any time by the transfer of shares.
I am satisfied that the wife transferred the shares in the Company to her mother so as to reduce the pool of assets available for distribution as between her and the husband. Her conduct in doing so is entirety consistent with the unchallenged evidence of the husband as to what occurred in late 2022. I propose to notionally add back the real estate owned by the Company to the pool of assets as a premature distribution (Townsend and Townsend (1995) FLC 92-569).
While I am satisfied that the wife’s parents provided monies to enable the wife to study in New Zealand. I am not satisfied that the advance by the parents could meet the description of a loan or an enforceable obligation to repay. Agreements between family members not always but rarely are intended to have legal consequences being an essential agreement to a binding obligation to pay. In cases between family members, the party seeking to establish or enforce an agreement bears the onus of proving that the parties intended to create legal relations (Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95). In determining whether there was an intention to create legal relations, the Court undertakes an objective assessment of the evidence which looks at all of the factors that point to whether the parties would have intended that their promises be enforceable.
Brereton J’s commentary in Ashton v Pratt (No 2) [2012] NSWSC 3 is apposite. His Honour observed:
29I am unpersuaded that Mr Pratt and Mr Ashton intended to make a contract. In the absence of express statements that their arrangements were or were not intended to be legally binding, intention to create legal relations is an inference of fact, determined objectively; accordingly, Ms Ashton’s subjective intentions in that respect are not relevant…
30Family, social and domestic arrangements do not normally give rise to binding contracts, because the parties lack the necessary intention…
While in Jones v Padavatton [1969] All ER 616 Salmon LJ said:
Did the parties intend the arrangement to be legally binding? This question has to be solved by applying what is sometimes (although perhaps unfortunately) called an objective test. The Court has to consider what the parties said and wrote in light of all the surrounding circumstances, and then decide whether the true inference is that the ordinary man and woman, speaking or writing thus in such circumstances, would have intended to create a legally binding agreement.
I reach the conclusions referred to above in relation to these matters based on the following:
(a)There is no evidence of the creation of any declaration of trust in relation to the shares nor is there any document that indicates that the wife was at any time other than the beneficial owner of the shares.
(b)The Company acquired five pieces of real estate in New Zealand during the course of the parties’ relationship. The Company remains the owner of two pieces of real estate. In relation to the purchase of every piece of real estate, the wife, not her parents, provided a personal guarantee for borrowings by the Company. In respect of four of the pieces of real estate the husband provided personal guarantees for the purchase of the real estate. There is no evidence of the wife’s parents being a borrower, mortgagor or guarantor for the acquisition of any real estate. I find providing such a guarantee is inconsistent with the existence of a trust.
(c)It is the wife’s evidence that she met the shortfall if any in relation to any loans and/or expenses from her income. The evidence of the husband is that he contributed to the deposits and expenses by contributing his income to the wife’s bank accounts. I accept his evidence. There is no evidence that the wife’s parents or either of them made any payment towards any outgoings or shortfall. I find making such payments by the wife and indirectly the husband inconsistent with the existence of a trust.
(d)The wife declared in her income tax returns as a deduction the losses incurred by the Company on the rental income. I find the claiming of such a deduction inconsistent with the existence of a trust.
(e)During the course of the husband’s cross-examination, counsel for the wife put to the husband the proposition that the wife used the Company to buy property for herself. Such question being put to the husband, presumably upon instructions, is entirely inconsistent with the case now sought to be advanced by the wife.
(f)The wife agreed during cross-examination that of the $460,280 of the parties’ funds paid to the Company from the sale of the S Street property $275,000 was remitted to Australia and applied to the purchase of the Suburb D property. When asked as to what happened to the balance of the funds the wife said that they remained in the Company. It is but further evidence of the intermingling of the parties funds with those of the Company and is inconsistent with the notion that the wife was nothing other than a bare trustee of the shares in the Company. I find depositing the parties funds into the Company account and then using part of them to fund a purchase in the wife’s name and leaving the balance in the Company inconsistent with the existence of a trust.
(g)The only financial contribution made by the wife’s parents to any of the property acquired by the Company was $26,304 contributed to the purchase of the first property.
(h)At times when the wife clearly had funds available to repay her parents the alleged loan it is not repaid.
(i)The alleged conversations between the wife and her mother as to the repayment of the loan are inconsistent and irreconcilable. Their evidence is implausible and unconvincing, and I am not persuaded by it.
(j)The transfer of shares to the wife’s mother alone is inconsistent with a trust said to exist for both parents.
(k)The evidence that the husband provided guarantees for the purchase of real estate in the knowledge that the Company was owned by the wife’s parents not the wife is inconsistent with his evidence and inherently implausible and illogical. I do not accept the wife’s evidence that she told the husband the Company was her parents as irreconcilable with his financial contributions to a Company he believed was the wife’s.
(l)The husband and the wife prepared a separation agreement in 2013. The terms of that separation agreement record in part that the wife will retain as part of her property the Company and all of its property. One of the recitals to the agreement records that the parties have disclosed to each other all of their property a summary of which is in the Schedule. The Schedule refers to the Company and its property. The creation of such an agreement by the parties is inconsistent and irreconcilable with the wife’s case that she told the husband that the Company was her parents and is irreconcilable with the existence of a trust.
(m)I find the evidence of the wife and her mother as to the reasons for creation of the Company and repayment of the alleged loan as irreconcilable with the subsequent conduct of the wife and the husband, inconsistent internally and implausible.
I am satisfied on the basis of the matters referred to above and given the little weight I place on the evidence of the wife and her mother, that there was not a legally enforceable obligation to repay her parents and that the wife was at all times the legal and beneficial owner of the shares in the Company and that the wife sought to reduce the pool of assets in these proceedings for division between her and the husband by transferring the shares to her mother.
I propose to include in the Balance Sheet of assets for distribution as between the husband and wife, the real estate of the Company. The wife has failed to place before the court any evidence as to the bank account balance of the Company. Given the wife’s evidence, the Company holds further cash funds on behalf of the parties as a consequence of the transfer of the S Street property then on any view, the value of the Company is not less than the real estate holdings.
APPROACH TO PROPERTY PROCEEDINGS
The orthodox approach to be adopted in a financial adjustment case under s 79 of the Act is to follow the well-recognised four-step process (Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143). Following such an approach, the Court identifies and values the assets and liabilities at the date of hearing for the purposes of division. Secondly, the Court assesses the contributions of the parties within the meaning of s 79(4) of the Act and determines a contribution-based entitlement. Thirdly, the Court identifies the relevant matters under s 75(2) and determines such adjustment as is necessary to the contribution-based entitlement. Finally, the Court considers the effect of the findings and must then determine whether the order as proposed is in all the circumstances just and equitable.
In conformity with the orders sought by each party and the ratio arising out of the High Court’s determination in Stanford v Stanford (2012) 247 CLR 108, I am of the view that it is just and equitable that an order be made adjusting the property interests of the parties. The parties are no longer living together and there is no longer the common use of their property. The assumptions and undertakings that governed the use of their property ended with separation and is recognised by both parties seeking an adjustive order.
BALANCE SHEET
The parties’ assets, addbacks, liabilities and superannuation entitlements were captured in a document that went through multiple drafts but finally became Exhibit 1. It recorded as follows:
Ownership Description Wife’s value Husband’s value ASSETS 1 Wife B Street, Suburb D $ 2,900,000.00 $ 2,870,000.00 2 Joint C Street, Suburb E $ 1,340,000.00 $ 1,340,000.00 3 F Pty Ltd S Street, Suburb U $ 926,000.00 $ 1,100,000.00 4 F Pty Ltd N Street, Suburb O $ 949,578.00 $ 1,200,000.00 5 Husband Shares $ 3,267.15 $ 0 6 7 Total $ 6,118,845.15 $ 6,510,000.00 ADDBACKS 8 H Gambling by Husband $ 250,000.00 9 Total $ 6,368,845.15 LIABILITIES 10 Wife B Street, Suburb D $ 1,225,700.19 $ 1,225,700.19 11 Joint C Street, Suburb E $ 601,974.00 $ 601,974.00 12 F Pty Ltd N Street, Suburb O $ 410,000.00 $ 410,000.00 13 Wife Personal Loans - Childcare $ 85,000.00 $ 0 14 Wife CC Lawyers Legal Fees $ 32,000.00 $ 0 15 Wife School Fee and Music Fees $ 2,800.00 $ 0 16 Wife Loan from parents $ 41,000.00 $ 0 17 Wife Loan for Ms EE $ 18,000.00 $ 0 18 Total $ 2,416,474.19 $ 2,237,674.19 SUPERANNUATION Member Name of Fund Type of Interest Wife’s value Husband’s value 19 Wife Super Fund 2 Accumulated Superannuation $ 110,582.01 $110,582.01 20 Husband Super Fund 1 Accumulated $ 57,065.00 $ 57,065.00 21 Husband Super Fund 3 Accumulated $ 6,002.00 $ 0 22 Husband Super Fund 4 Accumulated $ 5,479.54 $ 6,470.57 23 Total $ 179,128.55 $ 174,117.58 FINANCIAL RESOURCES Ownership Description Wife’s value Husband’s value 24 25 Total Net Total $ 4,131,499.51 $ 4,446,443.39
At the commencement of the hearing, the parties reached agreement about the value of the real estate. They agreed that Suburb D was worth $2,950,000 and that the New Zealand properties were worth in AUD $922,500 and $945,000.
The wife contended that the property and attendant liabilities held by the Company should not be included in the Balance Sheet as it was the property of her mother. For the reasons referred to earlier, I am satisfied that the shares in the Company were at all times held beneficially for the wife and that the transfer by the wife to her mother represented a premature distribution of property. The properties and attendant liabilities held by the Company will be included in the Balance Sheet.
Counsel for the wife conceded that there was no evidence that the husband held shares having a value of $3,267.15 and did not press for an addback for gambling. Accordingly, those amounts will be also deleted from the Balance Sheet.
As to items 13, 14, 15 and 17, counsel for the wife conceded that apart from a reference in a Financial Statement sworn by the wife on 17 February 2023, almost two years prior to the commencement of the hearing, there was no reference to the various liabilities in the wife’s trial affidavit. There is no evidence that the liabilities remain outstanding and the wife, despite being directed to file an updated Financial Statement, did not do so. Accordingly, I do not propose to have regard to such liabilities.
The husband was not challenged on his evidence that he did not have an Super Fund 3 account and that all he had was a Super Fund 4 account.
There is evidence of a loan agreement entered into between the wife and her parents. That loan agreement became Exhibit 11 in the proceedings. There is no evidence, however, as to how those monies were applied by the wife or to what purpose. The wife had the opportunity to give an explanation in relation to these monies in her affidavit and elected not to do so. Given that it was a sum of money received by the wife after separation, I do not propose to include it in the Balance Sheet as between the husband and wife but will have regard to it in relation to the matters under s 75(2).
Some of the contentions advanced by the parties reflected in the Balance Sheet are inconsistent with their Financial Statements but no submissions were advanced beyond what was contained in Exhibit 1.
Accordingly, I find the net assets of the parties for division to be as follows:
Ownership Description Value 1 Wife B Street, Suburb D $2,950,000.00 2 Joint C Street, Suburb E $1,340,000.00 3 F Pty Ltd S Street, Suburb U $922,500.00 4 F Pty Ltd N Street, Suburb O $945,000.00 Total $6,157,500.00 Liabilities 10 Wife B Street, Suburb D $ 1,225,700.19 11 Joint C Street, Suburb E $ 601,974.00 12 F Pty Ltd N Street, Suburb O $ 410,000.00 Total $ 2,237,674.19 Member Name of Fund Type of Interest Value 19 Wife Super Fund 2 $110,582.01 20 Husband Super Fund 1 $57,065.00 22 Husband Super Fund 4 $6,470.57 Total $174,117.58 Net Total $4,093,943.39 ASSESSMENT OF CONTRIBUTIONS
The assessment in a property case calls for the exercise of discretion, and a holistic value judgment of the respective contributions of the parties. The Court is required to consider all of the contributions of the parties, as the Full Court in Dickons v Dickons (2012) 50 Fam LR 244 makes plain:
24.… the task of assessing contributions is holistic and but part of a yet further holistic determination of what orders, if any, represent justice and equity in the particular circumstances of this particular relationship. So much is clear from the terms of s 79 itself and, in particular, s 79(2). The essential task is to assess the nature, form and extent of the contributions of all types made by each of the parties within the context of an analysis of their particular relationship.
25.Doing so is also consistent with the demands of authority that the ultimate assessment of contributions should be made without “giving overzealous attention to the ascertainment of the parties’ contributions” (Norbis v Norbis (1986) 161 CLR 513 at 524 ; 65 ALR 12 at 18 ; 10 Fam LR 819 at 825 ; [1986] HCA 17) and the well-established recognition in the authorities (acknowledged specifically by her Honour in this case) that the process required of the court by s 79 is the exercise of a wide discretion, not the performance of a mathematical or accounting exercise.
26.The necessarily imprecise “wide discretion” inherent in what is required by the section is made no more precise or coherent by attributing percentage figures to arbitrary time frames or categorisations of contributions within the relationship. Indeed, we consider that doing so is contrary to the holistic analysis required by the section and, in the usual course of events, should be avoided.
The Full Court in Horrigan & Horrigan [2020] FamCAFC 25 emphasised and reinforced that the proper approach to the assessment of contributions is:
35.… well established that an assessment of contributions is not a mathematical exercise, but rather involves the identification and assessment of all of the parties’ respective contributions, in a holistic way across the course of the relationship and in the post separation period to the point of assessment. …
I am also mindful of what the Full Court said in Singerson & Joans [2014] FamCAFC 238 at [66], namely that for the purposes of s 79 of the Act, there is nothing to suggest that any category of contribution needs to be quarantined and applied solely to particular assets. In my view, the authorities require evaluation of all contributions to the property of the parties. This view has been confirmed by subsequent Full Courts such as in Jabour & Jabour (2019) FLC 93-898, where their Honours observed that a primary judge should be cautious in emphasising the importance of an increase in value of a particular item of property at the expense of “the myriad of other contributions that each of the parties has made during the course of the relationship” (at [35]).
The consistent theme from the authorities is that the multifarious contributions throughout the relationship and subsequently, of all types, are to be assessed in a holistic way.
Guided by such Full Court determinations, I propose to assess the parties’ contributions.
At or about the time of the parties’ cohabitation, I am satisfied that the wife’s assets exceeded that of the husband. In that respect, I am satisfied that the wife had an interest in the Company which held real estate in which she had some equity.
A significant part of the wealth of the parties is represented by the property held by the Company. I am satisfied for the reasons referred to earlier that the wife held at all relevant times the beneficial interest in the shares in the Company and that its transfer to her mother was a premature distribution of a matrimonial asset.
I accept that it was the wife, as opposed to the husband, who was the driving force in relation to the acquisition of all real estate acquired by the Company and in relation to the management of it. In that respect, I am satisfied that it was the wife who sourced the real estate, arranged with the financial institutions the obtaining of loans, managed the real estate holdings of the company with assistance from real estate agents, and attended to all matters in relation to the tenants.
I accept that the wife’s parents contributed approximately $26,000 to the acquisition of the first property by the Company and I accept the evidence of the husband that he provided guarantees in relation to the acquisition of four of the five properties and that his income was contributed to a joint account with the wife which was utilised to meet deposits and outgoings on the properties. I am satisfied, however, that in the relation to the Company, the wife’s contributions vastly exceeded those of the husband.
In the wife’s affidavit she set out in table form a comparison of the incomes of the parties over the course of the relationship. The husband was cross-examined on the document and whilst not accepting the accuracy of it in relation to his income, nevertheless appropriately conceded that the wife’s income vastly exceeded his over the course of the relationship. I am satisfied that her income vastly exceeded that of the husband’s and the wife’s income permitted the parties to acquire real estate, fund the acquisition of that real estate and provided the payment for the vast majority of the parties living expenses and in relation to support of the children.
The parties purchased in their joint names in New Zealand a property at S Street. Consistent with my findings in relation to the acquisition of real estate by the Company I find that it was the wife who was the party who sourced the property and it was the wife who undertook all negotiations in relation to its purchase, including contacting the bank for the purposes of arranging finance. I nevertheless accept that the husband made a contribution to the acquisition of the property by providing a guarantee and also made a contribution to the payment of the mortgage in relation to the property.
This property was subsequently sold to the Company and the acquisition by the Company of the property was facilitated by the husband and the wife providing guarantees to the bank. The proceeds of sale due to the parties were initially retained in the company and some NZ$275,000 was transferred to Australia to enable the acquisition of the Suburb D property. I am satisfied, consistent with the wife’s evidence, that the Company retains the balance of the parties’ funds.
During the course of the relationship renovations were undertaken to the New Zealand properties. I am satisfied that the husband made a modest contribution together with his parents to the first set of renovations to the J Street property. I am satisfied that it was the wife who managed the subsequent more substantial renovations.
Following moving to Australia, the parties purchased two properties; one at Suburb E and another at Suburb D. Again, I am satisfied that it was the wife who made the superior financial and non-financial contributions to the acquisition of these properties. I am satisfied that it was the wife who arranged the purchase of all the properties, attended upon the banks for the purposes of financing the properties, and it was the wife who liaised with the builder in relation to the building of the home at Suburb E.
For the reasons earlier referred to, I do not accept the wife’s evidence that the husband made no contribution to the purchase of the Suburb D property other than providing a guarantee for its purchase. Nor do I accept the evidence that the wife gives at paragraph 143(b) of her affidavit in relation to the circumstances in which the husband became registered as a 20 percent owner of the Suburb E property. The wife’s evidence is inherently implausible and is disputed by the husband. I accept the husband’s evidence that it was initially contended that the property would be placed in the wife’s name for tax advantage purposes but that he was persuaded by the bank to list his interest at 20 percent. The wife’s asserted evidence that the husband accepted 20 percent because he didn’t deserve even that is denied by the husband. I find it to be self-serving and implausible.
I accept that the wife’s parents contributed $40,000 to the purchase of Suburb E.
The parties have two children, one of whom was born prior to the parties travelling to Australia and the other born after they arrived in Australia. I accept the wife’s evidence that she made the majority of the parenting and home-maker contributions. That said, I also accept the husband’s evidence that he contributed to the support of the children, particularly given the extensive and long hours worked by the wife. I also accept that the wife’s parents made a significant contribution to the parties by the provision of care in relation to the children including taking the children to live in Country G with them for periods of time.
The wife gives evidence of a number of incidents of family violence perpetrated upon her by the husband. It includes incidents occurring in 2010 when the husband threw a cup towards her, in 2012 when the husband bit her finger, in 2013 when during the course of an argument the husband hit her in the face with the back of his fist and her arm, another incident in May 2013 when the husband grabbed her neck, in April 2017 when the husband slapped her on the face, in 2018 when he grabbed her by the shoulders and threw her onto the kitchen floor when she hit her head, and on other occasions the husband would get angry and violent and punch walls, bang the table or close doors very aggressively.
In relation to each and every incident of family violence, the husband denied the wife’s allegations. He conceded that the parties were in a volatile relationship, that there were many arguments between them, that AVOs were obtained by the wife for her protection, and that the parties separated on a number of occasions. He conceded that he was convicted of assaulting his daughter. He otherwise denied the wife’s assertions that he was physically violent towards her but conceded that on occasions there were physical struggles between them.
The husband conceded that it was possible that he had attended an anger management course and agreed that he had concerns about how he resolved conflict in his relationship with the wife. He says that on occasions the wife was physically violent towards him.
I found the husband’s responses in cross-examination unconvincing. The husband’s blanket denial of an assault upon the wife in 2018 is inconsistent with the evidence of the wife’s mother who observed the husband “smash her on the kitchen floor in front of me. And try to grab her neck” (second respondent’s affidavit affirmed 10 January 2025, paragraph 71).
The wife’s evidence of the impact on her contributions is that the various incidents caused her pain, embarrassment and on occasions fear of the husband. In her affidavit, she said:
266.I have suffered emotionally due to the conduct of the applicant in these proceedings and the significant domestic violence whilst I was in the relationship with him. I have been seeing a counsellor often. The children have also been seeing the Counsellor/psychologist and there is a mental health care plan. I have been attending to […] psychology.
267.There have been significant high stress moments during my relationship with the applicant, such as physical injuries, fear of death, knowing children witness violent situations, dealing with school principal and school counsellor due to the children unable to settle at school and picking up the children at police station. Furthermore, the stress seeing the children worried when interviewed by detectives, and the entirety of the events caused a significant negative effect on my work performance which resulted in a suspension.
Family violence in a financial case is only relevant where it impacts upon the capacity of a party to contribute. There must be some nexus between the acts of family violence and the contributions of a party. In Keating & Keating (2019) FLC 93-894, their Honours in the Full Court observed in regard to both the Full Court decision in Kennon as well as the Full Court decision in Spagnardi & Spagnardi [2003] FamCA 905 as follows:
39.… the Court in Spagnardi was merely reinforcing the need for there to be an evidentiary nexus between the conduct complained of and the capacity (and or effort expended) to make relevant contributions. And, depending upon the nature of the violence established, in the absence of express evidence about the effect that violence had on the victim spouse’s contributions, how difficult it might be for the Court to draw inferences which would establish the evidentiary nexus (see Spagnardi at [42]). …
40.In any event, the primary judge gave no consideration to the inferences that might properly be drawn from the wife’s albeit limited evidence as to the effect on her of the husband’s violence taken in conjunction with her evidence of the severity of the violence...
The Full Court directs that the necessary nexus between the alleged conduct and the contributions being made significantly more arduous can be established either by direct evidence or by inference. As their Honours in the Full Court in Britt & Britt (2017) FLC 93‑764 observed:
74.The respondent submitted that the appellant’s evidence was not relevant to an issue because even if it was evidence of family violence, the appellant had called no evidence to suggest that the violence had made her contributions more onerous. This submission overlooks the obvious point that the court can infer from appropriate evidence that there was a nexus between the conduct and the relevant contributions.
In Benson & Drury (2020) FLC 93-998 (“Benson & Drury”), the Full Court observed as follows:
50.… An inference is an assent to the existence of a fact which is based on the proven existence of some other fact or facts, drawn as part of the fact finding process as an exercise of ordinary powers of deduction and reason in the light of human experience, unaffected by any rule of law (G v H (1994) 181 CLR 387 at [4]). Obviously, the strength of the subject inference depends upon the quality of the underlying evidence. It must be reasonable to draw the inference from primary facts. Mere conjecture will not suffice (Seltsam Pty Ltd v McGuiness (2000) 49 NSWLR 262 at 275-278 per Spigelman CJ; Carr v Baker (1936) 36 SR (NSW) 301 at 306-307 per [Country F] CJ). Importantly, the evaluation of the evidence from which the subject inference is sought to be drawn should be thorough and balanced. In the context of a Kennon argument, any factual controversies over the alleged misconduct of one spouse and its alleged deleterious consequential effects upon the other spouse should be resolved by familiar forensic techniques. Disputed but untested allegations, are not facts (Keating at [55]-[66]).
In Benson & Drury, the Full Court reminds:
18.We pause to note that although sometimes, in the context of the Kennon argument, words such as “adverse impact”; “more arduous” or “more onerous” are used, the guideline requires the conduct of one party to have had a significant adverse effect on the contributions of the other or to have had made that party’s contributions significantly more arduous than they ought have been. The conduct has to have had a discernible impact upon the contributions of the other party (Kennon at 906).
(Emphasis in original)
I am satisfied that the husband did perpetrate family violence on the wife during the course of the relationship and that the perpetration of that family violence did impact upon the wife’s contributions. There is both direct evidence and I am able to infer from the evidence the necessary nexus. It is reasonable to infer that a party who lives in a situation where they are fearful, embarrassed and/or humiliated as a consequence of the perpetration of family violence upon them is sufficient a circumstance to conclude that their contributions are made significantly more arduous than they would otherwise be, absent such conduct. A person who makes contributions whether financially or as a homemaker and parent in the context of their being a victim of persistent and continuing family violence will be making their contributions in an environment more arduous and difficult than it otherwise would be absent that family violence.
The parties separated in April 2019. In the period subsequent to that date, it is the wife who has had the majority care of the children and has continued to make contributions to the maintenance of the parties’ assets, particularly in relation to the New Zealand properties as well as in relation to the Suburb E and Suburb D property. The husband’s contribution post‑separation is limited to his role as a parent and the payment of child support.
Having regard to the myriad of contributions made by each of the parties over the course of this relationship and in particular the post-separation contributions almost exclusively made by the wife, I am satisfied that on a contribution-based assessment the wife’s contributions vastly exceed those of the husband.
The husband conceded that the wife’s contributions should be measured at 65 percent. I am satisfied that this undervalues the wife’s contributions and fails to have regard to the significant contributions that she made. The wife asserted that her contributions should be assessed in the order of 85 percent. I am satisfied that this overvalues the wife’s contributions and fails to have regard to the contributions made by the husband.
Overall, I am satisfied that the contribution adjustment favours the wife as to 70 percent.
SECTION 75(2)
The wife sought an adjustment in her favour of 10 percent, while the husband sought an adjustment in his favour of 10 percent.
The husband did not articulate a clear submission as to why there should be an adjustment in his favour.
Counsel for the wife submitted that the only factor that favoured the wife for an adjustment under s 75(2) was in relation to her future ongoing care of the parties’ two children. In that respect, I note that orders have been made by consent that provide for her to have sole parental responsibility and their primary care. The children are currently aged 12 and 9 years. The orders contemplate that the wife will have into the future until their majority, the major care of the children. The orders as currently framed provide for the husband to have a limited relationship with the children building over time to each alternate weekend from Sunday at 10.00 am until Tuesday at 8.00 pm and time in school holidays.
The husband pays Child Support to the wife, albeit the level of Child Support that the husband pays to her is reduced by the fact that he has two children of a new relationship. The wife has given evidence as to the costs of supporting the children and that they are not met adequately from the payment of Child Support.
The wife’s income vastly exceeds that of the husband. According to her affidavit, her income in the year ended 30 June 2024 including various fringe benefit payments was in excess of $220,000 gross per annum. This is to be compared with the husband’s income which, according to his Financial Statement, is less than $90,000 per annum.
Whilst I recognise that the husband has re-partnered and has the benefit of shared expenses with his wife who is also in employment, the wife’s income exceeds even a combination of the husband and his new partner’s income. In addition to that, I recognise that the husband has the responsibility of care of two other children.
I have had regard to the wife’s liability to her parents under the loan agreement (Exhibit 11) and the gambling undertaken by the husband during the relationship. The husband conceded that he had a gambling problem during the relationship and that he lost up to $20,0000. The wife would contend for a greater amount but the paucity of cross-examination on the issue is such that I make a finding limited to the husband’s concession.
I also have had regard to the findings at the contribution stage and that consistent with the wife’s evidence the Company still retains approximately NZ$185,000 of the party’s funds from the proceeds of sale of the S Street property that has not been brought to account in the balance sheet. On balance taking all of these matters into account I am not satisfied that there is call for a further adjustment in favour of either party.
JUST AND EQUITABLE DETERMINATION
I am satisfied that a 70/30 percentage division of the parties’ property in favour of the wife represents a just and equitable determination.
The wife seeks by way of final orders a transfer to her of the Suburb E property. In circumstances where the husband does not seek to retain that property then I will accede to the wife’s request, subject to her causing the mortgage secured over that property to be discharged. As part of the husband’s contributions, the husband executed a mortgage in relation to the Suburb D property providing his guarantee. It is appropriate and clearly contemplated by the orders of all the parties that the husband should be released from his guarantee.
In circumstances where the wife’s case was that the husband should only have a very modest payment as opposed to the husband’s case where he sought a payment to him of in excess of $1.3 million, I raised with counsel for the wife how an order should be framed in the event I did not accede to the magnitude of the relief sought by the wife.
The wife’s counsel sought a period of three to four months in which to give the wife the opportunity to raise funds sufficient to pay out the husband. I also raised with the wife’s counsel that the Court would make orders for the husband to be paid from the proceeds of sale of the property in the event that the wife failed to raise the sum provided for. There was no demur to such eventuality.
I have found that the pool of assets for division between the parties to be $4,093,943. The findings as to a 30 percent division in favour of the husband is in dollar terms $1,228,183. The husband currently has assets represented by superannuation having a value of $63,535. Thus, the wife is required to pay the husband $1,164,648. I propose to give the wife three months in which to pay that sum to the husband.
Simultaneously with the payment to the husband, there will be a transfer to the wife of the Suburb E property.
In the event that the wife has not paid that sum to the husband and/or caused the mortgages over Suburb E and Suburb D properties to be re-financed with the husband removed as a mortgagor and/or borrower and/or guarantor, then the properties will be sold and the husband will receive 67.5 percent of the net proceeds of sale of Suburb D being the sum required to be paid to him as a percentage of the current net equity in that property less any amount paid to him from the proceeds of sale of the Suburb E property.
I am satisfied that this is a just and equitable determination and propose to make orders accordingly.
I certify that the preceding one hundred and seventy-eight (178) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Schonell. Associate:
Dated: 30 January 2025
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