Kartal and Dutsanee & Ors
[2018] FamCA 918
•13 November 2018
FAMILY COURT OF AUSTRALIA
| KARTAL & DUTSANEE AND ORS | [2018] FamCA 918 |
| FAMILY LAW – PROPERTY – Where the husband and wife were married for almost 17 years – Where the wife made greater initial contributions – Where during the marriage both parties made financial contributions and the wife made greater contributions as parent and homemaker – Where the wife has a greater earning capacity than the husband – Where the wife has the care of a child under 18 years – Where contributions are assessed at 70 per cent in favour of the wife and 30 per cent in favour of the husband – Where an adjustment is made in favour of the husband of 10 per cent. FAMILY LAW – PRACTICE AND PROCEDURE – Where a dollar for dollar order was previously made – Where the wife seeks that the order be discharged – Where it was argued by the wife that the final hearing had concluded and the object of the order had been achieved – Consideration of s 117(2A) of the Family Law Act (Cth) – Where on the final day of the hearing the Court had yet to resolve the financial circumstances of the parties – Where in all the circumstances the Court is not satisfied that it would be just to vacate or interfere with the order made. |
| Evidence Act 1995 (Cth) s 128 Family Law Act 1975 (Cth) ss 75, 79, 81 |
| Brown v Brown (1993) 31 NSWLR 582 Calverley v Green (1984) 155 CLR 242; [1984] HCA 81 Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353; [1956] HCA 28 In the Marriage of Coghlan (2005) FLC 93-220; [2005] FamCA 429 In the Marriage of Lenehan (1987) FLC 91-814; [1987] FamCA 8 In the Marriage of Norbis (1986) 161 CLR 513; [1986] HCA 17 In the Marriage of Shewring (1988) FLC 91-926; [1987] FamCA 51 In the Marriage of Zyk (1995) FLC 92-644; [1995] FamCA 135 Nelson v Nelson (1995) 184 CLR 538; [1995] HCA 25 Re Eykyn’s Trusts (1877) 6 Ch. D. 115 Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52 Wirth v Wirth (1956) 98 CLR 228; [1956] HCA 71 |
| APPLICANT: | Mr Kartal |
| FIRST RESPONDENT: | Ms Dutsanee |
| SECOND RESPONDENT: | L Pty Ltd |
| THIRD RESPONDENT: | M Pty Ltd |
| FILE NUMBER: | SYC | 1955 | of | 2014 |
| DATE DELIVERED: | 13 November 2018 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Loughnan J |
| HEARING DATE: | 23, 24, 25, 26 & 27 July 2018 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Givney with Mr Heazlewood |
| SOLICITOR FOR THE APPLICANT: | G & D Lawyers |
| COUNSEL FOR THE FIRST RESPONDENT: | Mr Campton SC |
| SOLICITOR FOR THE FIRST RESPONDENT: | Mills Oakley |
| COUNSEL FOR THE SECOND AND THIRD RESPONDENTS: | Mr Harper |
| SOLICITOR FOR THE SECOND AND THIRD RESPONDENTS: | Fraser Clancy Lawyers |
Orders
Within 28 days of the date of these Orders the wife shall pay to the husband the sum of $271,267.50.
In the event that the wife fails or neglects to make the payment required by Order 1 herein, the husband and wife shall sell the property at X Street, Suburb A in the State of New South Wales (“the Suburb A property”), and the following shall apply:
(a)the wife shall place the property in the hands of a licensed auctioneer to sell the property by way of public auction within six weeks of the date of default of the payment at a reserve price agreed by the husband and wife;
(b)in the event that the husband and wife cannot agree as to the reserve price for an auction then the husband and wife or either of them shall appoint the President for the time being of the Real Estate Institute, New South Wales division or his or her nominee to assess the best price reasonably obtainable as the reserve price at auction and the husband and wife shall be bound by such assessment and equally bear the costs of same;
(c)upon sale and after the adjustment thereon, the proceeds shall be paid as follows:
(i)in payment of agent’s commission and legal fees occasioned by the sale;
(ii)in discharge of the mortgage to the Y Bank;
(iii)in payment to the husband of 36 per cent of the balance of the proceeds; and
(iv)in payment of the remaining proceeds of sale to the wife.
The Court Noted that the husband and the wife retain an undivided one sixth interest in the property known and situate at AA Street, Suburb W in the State of New South Wales (“the Suburb W property”), being the whole of the land contained within folio identifier ...
The wife is declared as against the husband to have the sole right, title and interest in any furniture and contents in the Suburb A property.
Save as herein provided the husband and the wife are each otherwise entitled to retain sole legal and beneficial ownership to the exclusion of the other of:
(a)all items of property, both real and personal, including but not limited to: real estate, motor vehicles, bank accounts, money, shares, jewellery and personal effects presently in the possession of each of them respectively; and
(b)any entitlements under a superannuation fund of which they are a member.
The husband is solely responsible for and shall pay any liability including but not limited to any tax liability arising from the sale, transfer or disposition of his interest in the Suburb W property or other liability incurred in his sole name or in the name of any entity in which he has an interest and shall indemnify the wife and keep her indemnified with respect to any such liability.
The wife is solely responsible for and shall pay any liability including but not limited to any tax liability arising from the sale, transfer or disposition of her interest in the Suburb W property or other liability incurred in her sole name or in the name of any entity in which she has an interest and shall indemnify the husband and keep him indemnified with respect to any such liability.
Order 2 of the Orders made on 25 November 2016 is discharged.
The husband’s application insofar as it seeks orders or declarations binding upon the second and third respondents is dismissed.
Leave is granted to the parties to relist the proceedings in relation to the wording of the orders on application made within 21 days or such further time as they may agree.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Kartal & Dutsanee has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC1955 of 2014
Mr Kartal
Applicant
And
Ms Dutsanee
First Respondent
And
L Pty Ltd
Second Respondent
And
M Pty Ltd
Third Respondent
REASONS FOR JUDGMENT
Introduction
These are proceedings in relation to property settlement between husband and wife. Two companies associated with the wife’s family are also parties to the proceedings.
The husband and wife were married for almost 17 years. The main issue in the proceedings is the identification of the matrimonial assets. In particular, whether the wife has a beneficial interest as well as the legal interest in a property trust and the nature of the interests of the husband and wife in a property at Suburb W.
Applications
The husband seeks orders in terms of a Minute tendered on 27 July 2018 (Exhibit 1) as follows:
1.Declaration that the Wife is the beneficial owner [and always has been] of 11 percent of the units in the [J Trust].
2.Declaration that there has never been a disposition by the Wife of her beneficial interest in 11 percent of the units in the [J Trust].
3.In the alternative of Order 2:-
3.1Pursuant to Section 106B any purported or asserted disposition or any disposition of the Wife’s 11 percent beneficial interest in the units in the [J Trust] be set aside.
3.2To give effect to Order 3.1, [L Pty Ltd] shall sign all documents necessary to transfer the beneficial interest in the 11 percent of the Units in the [J Trust] to the Wife.
4.The Wife shall within 42 days of the date of these Orders pay to the Husband the sum of $872,000.
5.In the event the Wife fails or neglects to pay the sum of $872,000. .
6.The Wife shall pay the Husband’s entitlement from her interest in the [J Trust].
7.In the alternative, the Wife shall in the event of failing to pay the sum of $788,598 within 42 days of the date of these Orders then the Wife shall do all acts and things necessary to sell the property at [X Street, Suburb A] and in respect of such sale the following shall apply:-
7.1.The Wife shall place the property in the hands of a licenced auctioneer to sell the property by way of public auction within six weeks of the date of default of the payment at a reserve price agreed by the parties.
7.2.In the event the parties cannot agree as to the best price reasonably obtainable and/or the reserve price of an auction then the parties or either them shall appoint the President for the time being of the Real Estate Institute [New South Wales Division] or his or her nominee to assess the best price reasonably obtainable and/or the reserve price at auction and the parties shall be bound by such assessment and equally bear the costs of same.
7.3.Upon sale the proceeds shall be paid as follows:-
7.3.1.In payment of agent’s commission and legal fees occasioned by the sale.
7.3.2.In discharge of the mortgage to the [Y Bank].
7.3.3.In payment to the Husband of $872,000.
7.3.4.The balance then be paid to the Wife.
8.The Husband shall transfer to the Wife or as she may direct his one-twelfth interest in the property at [AA Street, Suburb W].
The wife seeks orders in terms of her Amended Response to Initiating Application filed 14 November 2016 as follows:
1.That these Orders are made pursuant to Section 79 of the Family Law Act.
2.That within 30 days of the date of these Orders, the parties shall do all acts and things and sign all documents and instruments necessary to transfer to [M Pty Ltd], the whole of their right title and interest in the property known and situate at [AA Street, Suburb W] in the State of New South Wales, being the whole of the land contained within folio identifier ...
3.That save as herein provided the parties are each otherwise entitled to retain sole legal and beneficial ownership to the exclusion of the other of:
a)All items of property, both real and personal, including but not limited to; real estate, motor vehicles, bank accounts, money, shares, jewellery and personal effects presently in the possession of each of them respectively; and
b)Any entitlements under any superannuation fund of which they are or have been a member.
4.That the Wife be declared as against the Husband to have the sole right, title and interest in any furniture and contents in the property known and situate at [X Street, Suburb A] (the “[Suburb A] property”).
5.That the Husband is solely responsible for and shall pay any tax liability or other liability incurred in his sole name or in the name of any entity in which he has an interest and shall indemnify the Wife and keep her indemnified with respect to any such liability.
6.That the Wife is solely responsible for and shall pay any tax liability or other liability incurred in her sole name or in the name of any entity in which she has an interest and indemnify the Husband and keep him indemnified with respect to any such liability.
7.That the Husband pay the Wife’s costs of and incidental to these proceedings.
8.That the parties shall do all acts and things and sign all documents necessary to give effect to these Orders.
9.That in the event that either party refuses or neglects to sign any deed or instrument to give effect to these Orders, the Registrar of the Court be appointed pursuant to Section 106A of the Family Law Act to sign such document on behalf of such party to give effect to the operation of the deed or instrument.
10.That the parties be granted liberty to restore this matter in relation to the implementation of these Orders with 7 days notice.
In addition, I take it that the wife seeks the orders in respect of a property in her name at X Street, Suburb A (“ the Suburb A property”) contained in orders 2 and 3 of exhibit 35, as follows:
…
2.That the wife shall as soon as practicable list for sale and sell her property at [X Street, Suburb A] for the best price she can obtain and shall apply the balance of the proceeds of sale in the following priority
a)in payment of an amount sufficient to discharge the mortgage secured upon the property
b)in payment of agents costs and legal costs incurred in relation to the sale
c)in payment of the sum of $118,392 to [KPL] P/L as trustee for the J Trust
d)in payment of the balance into a controlled monies account held in the name of the wife operated by Mills Oakley solicitors pending further order of the Court
3.That the wife advise the solicitors for the husband in writing upon the happening of each of the following events
3.1The listing of the property for sale including the identity of the listing agent, the method of sale, and the listing price
3.2the exchange of contracts for sale, including the front page of the contract
3.3the settlement of the sale, including the settlement statement recording the distribution of the proceeds of sale.
L Pty Ltd (“LPL”) and KPL Pty Ltd (“KPL”) are the second and third respondents, respectively. They seek orders in accordance with their Case Outline document dated 20 July 2018 as follows:
1.That order 2 of the orders made 25 November 2016 is discharged.
2.That the husband’s application in so far as it seeks orders or declarations binding upon the second and third respondents is dismissed.
3.Costs
There is a level of agreement about two matters. The husband and the wife each have a one twelfth share in the property at AA Street, Suburb W (“the Suburb W property”).[1] Neither of them seek to retain an ongoing interest in that property. They agree that the Court could make an order that they sign all documents and do all things to cause their interests in the property to be returned to the Family Trust. However, they do not agree about the import of that transfer. The wife says that there is a related borrowing but the husband contends that he and the wife have a valuable net interest in the property which should be sheeted home to the wife in their property settlement. The wife contends that if the husband is correct, there must be capital gains tax (“CGT”) implications of the agreed order.
[1] There is also reference to the property being at Panania.
The husband and wife also agree that the Suburb A property should be sold but they do not agree about the mechanics of the sale.
Documents Read
The parties relied on the following documents:
Documents relied on by the husband:
·Amended Initiating Application filed 6 June 2018, subject to the orders he ultimately sought;
·affidavit of the husband filed 25 May 2018; and
·Financial Statement filed 25 May 2018.
Documents relied on by the wife:
·Amended Response to Initiating Application filed 14 November 2016;
·Financial Statement filed 22 June 2018;
·affidavit of the wife filed 22 June 2018;
·affidavit of Mr BB filed 9 July 2018;
·affidavit of Mr CC filed 9 July 2018; and
·affidavit of Ms DD filed 13 July 2018.
Documents relied on by the second and third respondents:
·affidavit of Ms EE filed 16 July 2018;
·affidavit of Mr FF a.KPL.a Mr FF filed 16 July 2018; and
·affidavit of Mr HH filed 16 July 2018.
The Hearing
The case was listed for final hearing over five days commencing on 23 July 2018.
The Court was asked to consider making orders during the hearing in respect of two issues:
The sale of the Suburb A property
The husband and wife agreed that the Suburb A property could be sold. A minute of order for sale was prepared on behalf of the wife and I was asked to make that order in advance of final judgment. However, there was no agreement about the terms of the order. In essence the wife proposed orders whereby she would have carriage of the sale and keep the husband informed, that in addition to the sale costs and discharge of the mortgage, a debt to the third respondent be paid out and the balance of the proceeds held in a controlled moneys account. The husband proposed that the sale be by way of auction, that he be involved in the sale, including in deciding on the reserve price and that the alleged debt to the third respondent not be paid out at this stage. On 27 July 2018 I told the parties that if the husband and wife could not agree on its terms, I would not make an immediate order, there being no necessity for an urgent sale.
The vacation of the dollar for dollar costs order
On 16 December 2016 an order was made in the following terms;
1.An order be made in terms of paragraph 11 of the Amended Application in a Case filed 25 November 2016, as set out hereunder:
11.Within 7 days of any payment by or on behalf of the wife in relation to her solicitor’s fees, including all expenses in association with the preparation of her case, the wife pay or cause to be paid the same amount of money to the solicitors for the husband
2.That order does not apply to any account or invoice for profit costs or disbursements that relates to work or payments that have been made prior to the making of this order.
…
During the trial an oral application was made on behalf of the wife to vacate that order. The wife sought to be relieved of the obligation to make payments to the husband’s solicitors in a similar amount to any payments made for her costs. The husband opposed this application.
On the first day of the trial $40,000 was paid to the wife’s solicitors, sourced in funds borrowed by the wife. In the event that the order was not vacated, the wife sought that she be permitted to withdraw those funds from her solicitors, so as to return them to the lender. Senior counsel for the wife also advised that the wife intended to make a further payment to her solicitors of $30,000 from her own funds.
On 27 July 2018 I dismissed the oral application save that I permitted the wife to withdraw from her solicitors the $40,000 she had paid earlier in the week. I said that I would include reasons for that decision in the judgment in the substantive proceedings. These are those reasons.
The order made on 16 December 2016 was an interlocutory order and there is no doubt power to vary or discharge that order. It has long been recognised that courts have a wide discretion in dealing with the costs of proceedings before them. As I understand the submission on behalf of the wife, an important justification for the order was to secure the exercise of judicial power in property settlement proceedings between husband and wife by ensuring that they did not have uneven access to legal representation because of their financial circumstances. The submission went on, that by the end of the trial that aim had been achieved and therefore the order could now be vacated. With respect there is something in that argument. However, that issue could have been raised at the time the order was made and as far as I can recall, it was not. The order could have been expressed to apply to payments made to the wife’s solicitors prior to the first day of the hearing. The order was not limited in that way and in my view it is not appropriate to vary the order now. Depending on the period for which judgment is reserved there may be a significant difference between the terms on which the wife’s legal team is remunerated and the terms for the husband’s legal team if the order does not apply to payments made after the first day of the trial. No particular hardship was raised on behalf of the husband but he is not the one seeking a variation to the order.
As to s 117(2A) of the Family Law Act 1975 (Cth)(“the Act”), on the final day of the hearing I had yet to resolve the financial circumstances of the parties beyond the broad observation that the wife’s circumstances are more robust than those of the husband. Unusually, it is argued in this matter that there should be no property settlement adjustment to the husband but I doubted that I would find that his application was wholly unsuccessful. Of course I have not been addressed on offers of settlement and I apprehend that there may be more to be said about the conduct of the proceedings. In all of those circumstances, I was not satisfied that it would be just to vacate or interfere with the order beyond allowing the wife to withdraw the payment into trust of $40,000 made by her on 23 July 2018.
On 27 July 2018 judgment in the substantive proceedings was reserved.
Short History
The husband was born in Country G in 1967 and at the conclusion of the hearing he was 50 years of age. The wife was born in Country F in 1962 and at the conclusion of the hearing she was 56 years of age. They were married in 1997 but commenced cohabitation earlier that year. The husband and wife were divorced with effect from 4 July 2014. The husband contends that separation was on 2 February 2013 while the wife states that final separation was in early December 2012. Nothing much turns on the resolution of that dispute.
The third parties are corporations associated with the wife’s family. LPL is the second respondent. It was established in 1985. KPL is the third respondent. It was established in 1988 and in 1989 it became the trustee of the J Trust. It has never traded in its own right. The wife’s mother deposed that the J Trust was established by deed dated 24 October 1984.
The wife’s mother is Ms EE. Her father was Mr II. He died in 2016. They had been married for 56 years when the wife’s father passed away. They have five children:
·Ms Dutsanee (the wife);
·Mr MM (known as Mr MM);
·Mr FF;
·Mr V; and
·Mr JJ.
The wife’s parents migrated to Australia in March 1976. Although the wife was born in Country F, her parents migrated to Australia from Country D.
Children
There are two children of the marriage of the husband and wife. B (“B”) was born in 2000 and is 18 years of age. C (“C”) was born in 2003 and is 15 years of age.
Background facts
Much of the relevant financial background involves the wife’s family and unfortunately, the background facts are not clear. That may in part be explained because the wife’s father was a significant figure in establishing the relevant business arrangements and he died in 2016 and is not available to provide the missing details. Similarly, the original accountant for both the family businesses and for the individual family members, Mr KK, also died. His daughter took over her father’s firm and the role of family accountant but only until completing the 2007 tax returns. Mr HH is the current accountant and he was first instructed in about 2008 by the wife or Mr FF to do the books for related shopping centres. He was later given the task of preparing the taxation returns for the family entities and individuals from the 2008 year. After discussions in around 2009 and 2010, he commenced that work in 2011. That means that the evidence from Mr HH as to events prior to 2008 is a matter of reconstruction by him from past financial records and advice from the principals, rather than first-hand knowledge. Further, as is discussed later in these reasons, the wife’s mother, who, it is said, was also directly involved in running the family business affairs, was not able to provide meaningful support through her cross-examination, for the evidence in chief she gave on behalf of the third parties. Finally, the formal records, including company records and taxation returns, are said to be incorrect in some important aspects and subsequent attempts to correct those records were never completed. Those attempts potentially owed more to the husband’s claims in these proceedings than any other reason.
Albeit a small example, the evidence of the foundation of the family business arrangements is found in the sentence:
My parents were entrepreneurial and engaged in various business ventures from time to time over the last 30 or so years, since 1977.
That sentence is contained, not in the affidavit of the wife’s mother but of the wife[2] who turned 15 years of age in 1977.
[2] Paragraph 11 of the wife’s affidavit filed 22 June 2018.
On 24 October 1984 a trust known as the J Trust was established by Deed of Settlement.
In about 1985, LPL was established. In 1988 LPL acquired units in the J Trust. The wife’s mother was a director of LPL.
LPL owned a Suburb LL shopping centre (“SC Suburb LL”) from on or about 28 June 1985 to about 20 November 1995.
In February 1988 N Pty Ltd (“NPL”) was incorporated. On or about 24 October 1988 NPL bought a property at Suburb DF (“the Suburb DF property”) for $1,550,000. The funding included $1,240,000 borrowed from EG Pty Ltd (“EGPL”). That loan was guaranteed by each of the wife’s parents, the wife, Mr MM and LPL.
In October 1988 KPL was registered and the wife’s mother and father were appointed two of the several directors at that time.
There is reference in the evidence of Mr HH, the family accountant, to KPL and LPL being family companies but I was not taken to evidence about who established them or even about the identity of the shareholders of those companies, from time to time.
On or about 9 January 1989:
·KPL became the trustee of the J Trust;
·O Pty Ltd became the manager of that Trust;
·Mr NN as bare trustee for LPL acquired by transfer 36 per cent of the units on issue in the J Trust; and
·friends of the family or their friends (“the Country D owners”) acquired the remaining 64 per cent of the trust units by transfer.
The main asset of the Trust was the Suburb OO Shopping Centre (“SC Suburb OO”). Following the acquisition, there was a general increase in loan interest rates and the rental income from the tenants at SC Suburb OO proved insufficient to service the borrowings. In addition approximately one third of the shops were vacant or occupied only on a monthly basis. The wife’s mother was charged with improving the occupancy rate. KPL advised[3] the unit holders of those matters, that in the first half of 1992 it had sought to re-finance the loans and, that having failed, it was exploring the sale of SC Suburb OO or of a one half interest in it. LPL had similar problems with the financial viability of SC Suburb LL.
[3] See letter from the KPL, signed by the wife’s father, to trust unit holders which commences at page 88 of the exhibits to the wife’s mother’s affidavit.
The high rates of interest also impacted on the tenants of the shopping centres, causing some to default on their rent. The tenant of the Suburb DF property also defaulted on its lease. These rental defaults exacerbated the capacity of KPL, LPL and NPL to service their respective borrowings.
In 1992 the wife turned 30 years of age and she completed a degree s. She then began helping her parents to manage the shopping centres, SC Suburb LL and SC Suburb OO. The wife’s mother says that the wife was relied on by her parents for her English skills and she attended many meetings with professional advisers, business partners, suppliers and customers. In some cases the wife was her parents’ point of contact. However, the wife’s mother says that the wife always acted on her parents’ instructions or wishes.
In 1992 the wife acquired an 11 per cent interest in the J Trust. The circumstances of that acquisition are dealt with in some detail later in these reasons.
In July 1993 EGPL issued letters of demand on its loan to NPL. EGPL sued NPL and each guarantor and it secured judgment against them in October 1994. On 2 December 1994 and on 27 January 1995, EGPL, then in liquidation, filed winding up petitions against LPL and NPL, respectively.
In early 1995 the wife’s parents decided to cause LPL to endeavour to sell SC Suburb LL and KPL to sell SC Suburb OO.
On 20 March 1995 administrators were appointed for LPL and on 11 May 1995 LPL entered into a deed of company arrangement. On 6 November 1995 LPL entered into a replacement deed of company arrangement and after paying all of its creditors 100 cents in each dollar, LPL ceased to be subject to that deed on 13 June 1996.
However, LPL owned a farm at PP Town (“the PP Town farm”) and it defaulted on a loan from the Westpac Bank which was secured by that property. The bank entered into possession and there was a mortgagee sale. The wife’s father asked Mr FF to bid at the auction and after some problems and delay, he completed the purchase on 8 February 1996. The funding for the purchase included the proceeds of a loan to Mr FF from the QQ Bank and moneys from LPL and KPL. It is the evidence of the wife’s mother and of Mr FF that none of his money was applied to the purchase. Although recorded as loans to Mr FF in the relevant company accounts, LPL, KPL and other family companies made the loan payments on the borrowed funds and paid all other outgoings on the PP Town farm. The PP Town farm was occupied and developed for orchid production by the wife’s father until his death. Since then it has been occupied by another of the wife’s brothers, Mr MM.
The husband and wife met in 1996. At the time they met, the husband’s home was in Country G. The wife then lived in Country F.
In around 1997 the wife was working for RR Enterprises, a Country F registered company, which was a subsidiary of SS Pty Ltd. She was working on a full-time basis as the managing director/chief executive officer for that company and earning about USD5,000 per month together with benefits. At the end of June 1997 the wife left the business and received a termination and bonus payment of about $215,000.
The husband and wife moved to live in Australia in August 1997. The wife is and was an Australian citizen. The husband arrived on a tourist visa and obtained a spousal visa in early 1998. When they arrived they lived in a rented apartment at TT Street, Suburb UU.
Shortly after the husband and wife arrived in Australia the husband worked for a few months for a friend, as a labourer conducting house renovations. In about September 1997 the wife commenced working for KPL. The nature and extent of the wife’s role with KPL is a contested issue between the parties, the husband arguing that it was an ongoing leadership role and the wife and the other parties arguing that it was more incidental and facilitative and not ongoing. The level of the husband’s involvement in the wife’s work is also a contested issue. The husband arguing that it was more important than the wife asserts. It is agreed that the husband drove the wife to some business meetings.
The husband states that at the commencement of cohabitation he had USD5,000 in savings. I take it that the husband did not have any more significant assets, as upon their arrival in Australia, the wife purchased a second hand motor vehicle for him.
The wife states that at the commencement of cohabitation she had the following assets:
(a)savings of approximately $100,000;
(b)about $29,040 owed to her by SS Pty Limited;
(c)superannuation accumulated from 1986 with Company VV; and
(d)household contents and effects of $2,000.
As is referred to above, the wife also held units in the J Trust.
The husband and wife were married in 1997.
In 1998 KPL commenced the process of a Development Application for SC Suburb OO. Mr WW was involved in this project from 1998. At this time the shopping centre was also run by Mr BB, the general manager, and Ms XX, the secretary and bookkeeper. It follows that those roles were not undertaken by the wife.
In about 1998, at the instigation of the wife and Mr BB, KPL purchased the Suburb W property to develop. On that property was a residence and a child care centre. KPL commenced operating the Suburb W Child Care Centre and continued to operate it from that site until 2014.
In March 1998 the Suburb A property was purchased in the name of the wife and her brother, Mr V, for approximately $370,000. Mr V contributed $38,835.78 and the wife contributed $80,000 from savings and they borrowed the balance of the purchase price from the Westpac Bank. The husband and wife then moved from the rental property in Suburb UU to live at the Suburb A property.
Not later than about 24 March 1998 the wife gave instructions to the family solicitors to prepare a contract for LPL to buy back the PP Town farm from Mr FF however no transfer was ever completed.
In 1999 the wife acquired Mr V’s interest in the Suburb A property for $38,835.78.
In February 1999 the husband commenced working full-time as an assistant for a company called Company YY.
Extensive renovations were carried out on the Suburb A property in 1999. The nature and the extent of the husband’s involvement in those renovations is a matter of contention. The husband says he made a significant contribution to the renovations. The wife says that the husband contributed minor tasks by way of labour and assisted in preparing costings for lighting and tapware but the renovations were primarily completed by a project manager, Mr BB.
In early 1999 the husband and wife travelled to Europe to visit the husband’s parents. While in Europe they purchased an apartment in ZZ Town, Country G near the coast (“the ZZ Town apartment”) for $30,000 or $40,000. The husband claims the payment was made from joint funds and that the payment was made in instalments. The wife says that the funds were provided from her savings. There is no need to resolve that dispute. Once it was purchased, the husband’s mother moved into the ZZ Town apartment and undertook renovations. The extent of the renovations is contested between the parties. The husband also conducted renovations to the ZZ Town apartment.
In September 1999 the wife travelled to Country E to assist her brother, Mr V, in setting up a venture known as R Pte Ltd (“RPL”). The wife said during her cross-examination, that: “Mr V is [RPL]”. The wife stayed in Country E for three months and returned briefly to Australia in November 1999. During the three month period the wife was employed by RPL overseeing the operations of the business and the start-up process. To assist with the start-up venture, the wife invested with R2 Pte Ltd, which she drew on about 29 September 1999 from moneys owing to her by family companies.
In December 1999 the husband ceased working with Company YY.
In December 1999 the business run by RPL opened.
In late 1999 or early 2000 the husband travelled to Country E for about two weeks. The husband says that he travelled to Country E to assist in the business venture, the wife denies that he gave any significant assistance.
In 2000 B was born in Australia. The wife stayed home for four months to care for B.
In March 2000 the wife hired a domestic helper. The extent to which each of the husband and wife contributed to household tasks is a contested issue in this case.
Following B’s birth the wife was travelling to Country E for two weeks every two months. On four out of five occasions the wife took B with her to Country E. The extent to which each of the husband and wife cared for B during this time is a contested issue between them.
In January 2001 B began attending Suburb UU Occasional Care Centre and later that year she started attending the Country F School in Suburb LL each Saturday. That Saturday attendance continued until 2005.
In 2002 the husband became an Australian citizen.
In mid-2002 the wife engaged Mr CC who was appointed chief operations officer of RPL. The wife says that she ceased working for RPL by about April 2003 as she was concerned about the SARS virus.
It is the wife’s evidence that in 2002 there was a proposal by her father and brothers to develop the Suburb W property.
It is the husband’s evidence[4] that he believed the wife and her family had acquired a property at Suburb W at around this time and that he and the wife were involved in the project. The husband says that in 2007 he signed a transfer to put the property into a number of names including his.
[4] Paragraph 46 of the husband’s affidavit filed 25 May 2018.
In 2003 there were four businesses in Country E trading under the RPL name.
In 2003, C was born.
In September 2003 U Pty Ltd (“UPL”) was registered in Australia by the husband.
In January 2004 C commenced attending child care at Suburb AB Child Care.
In 2004 the children stayed with the wife in Country E for seven weeks while the husband completed compulsory military service in Country G.
It is the husband’s evidence that the wife travelled to City BC, Country CD, in 2004 for the purpose of establishing a business in City BC. It is the wife’s evidence that the travel was for a family holiday and she was accompanied by the husband and the children. The wife says that the business in City BC was opened in 2002. Nothing turns on the resolution of that dispute.
In January 2005 the husband, the wife and their children moved to City P, Country D. They hired domestic help. The wife established T Pte Ltd (“the distribution company”) in Country D.
In 2005 the husband began conducting a business in Country D named UPL Country D. The wife was the managing director of this company. The company employed two sales people and a receptionist/accountant. The husband designed the systems, supervised the installations, visited and dealt with customers and attended the factory. The company received irregular income. In the first two years of operation the husband did not take any drawings.
On or about 1 December 2006 KPL sold one half of SC Suburb OO to EF Pty Ltd for $14,000,000.
In 2006 or 2007 the distribution company ceased trading.
In 2007 the Suburb W property was transferred into the names of the husband and various members of the wife’s family.
In May 2007 the family moved to City H, Country D. They resided in a home purchased by the wife’s family in the name of FG Pte Ltd for about $360,000 (“the City H property”). The wife resumed working for RPL. The wife employed a full-time maid. The husband continued to operate UPL out of City P and was required to regularly travel there for that purpose.
A Country D development site was bought in early 2007. The wife asserts that it was purchased for CE2,000,000 by her parents and her brother Mr V, who paid CE1,000,000 each. The husband contends the site was bought for CE1,000,000 by the wife and Mr V but he does not know how the purchase was financed. The development was named the R Resort and it consisted of a combination of villas and a hotel. The villas were sold to private investors. Following the relocation to City H the wife continued to travel for about 10 days every two months.
In 2008 the husband commenced drawing an average of about $1,000 per month from UPL Country D. He continued to operate that company and to draw an income from it until 2011.
In 2008 the wife drew $414,000 on the Suburb A mortgage and applied those funds towards the family relocation to Country D and to the business ventures of the husband and wife.
In 2008 the wife’s mother purchased two properties in City H. The husband says that the wife paid the mortgage instalments for these properties. The wife and her mother say that the properties were bought ‘off the plan’ and that the progress payments were made by the transmission of funds by the wife’s mother from Australia to a cousin of the wife in City H, who paid the developer. On some occasions the transmissions were late and the cousin contacted the wife, who was then living in City H, and the wife provided the missed progress payment to the cousin. It was the wife’s evidence that she was reimbursed by her mother at a later time. I accept the evidence of the wife on this issue.
In 2009 the husband, the wife and their children went on a holiday to the United States. From 2009 to 2011 the wife employed an additional live-in maid in City H.
In February 2010 the husband travelled from Country D to Australia to install a water heating system in a hothouse at the PP Town farm.
In 2010 the husband, the wife and their children went on a holiday to Japan.
In 2011 UPL ceased trading and the husband terminated the employment of all of its employees.
In late 2011 or early 2012 the family moved from Country D to Country E. They commenced renting and residing at a residence at GH Street, Suburb HI … Country E (“the GH Street property”). After the family moved in, the GH Street property was renovated. In particular the husband was involved in a number of renovations over a 10 month period.
The wife ceased her involvement with R City H in January 2012. Upon her return to Country E the wife began working with RPL as a director.
From April 2012 to January 2013 the wife was not working full-time and she did not have full-time domestic help. She mainly cared for the children during that period.
It is the wife’s evidence that she and the husband separated under one roof on 6 December 2012. It is the husband’s evidence that the parties separated on 2 February 2013.
On 2 February 2013 the husband moved out of the GH Street property and into another property in Country E. The wife continued to live at the GH Street property with the children.
In 2013 the husband opened a discount store in Country E with his business partner, Mr IJ. The husband had a 40 per cent share in this business. In January 2014 the store was closed and the stock was liquidated, with some loss. The husband received $44,315 from the liquidation.
The wife says that from 2013 she tried to borrow funds for purposes including, paying the husband a property settlement.
During the period from January 2014 and April 2018 the wife travelled extensively.
In 2014 the wife’s brothers purchased 2 AA Street, Suburb W (“2 AA Street”), a property across the road from the Suburb W property. The child care centre previously operating from the Suburb W property was relocated to 2 AA Street.
In March 2014 the husband moved to Australia. He commenced living at JK Street, Suburb OO.
In 2014 the wife used a mortgage broker (another cousin) and was successful in obtaining an extension of the loan secured on the Suburb A property by $290,000, taking the borrowing to $1,050,000. The wife did not notify the husband that she had applied for the loan and during cross-examination she conceded that she should have done so. The purpose of the loan was at least in part, to make a property settlement with the husband.
It is the wife’s evidence that the $290,000 has all been spent on investments, medical fees, school fees, travel, living expenses and legal fees. For example, the wife spent about $30,000 on travel to Country KL and over $20,000 on legal fees.
From 23 January 2015 to 9 November 2016 the wife borrowed $118,391.67 from KPL. Of that sum $101,268.74 was applied to the wife’s legal fees. The balance went to the wife’s living expenses and those of the children.
In March 2015 the husband enrolled in a university course.
On 18 December 2015 LM Pty Ltd bought out the remaining interest held by KPL in the Suburb OO Shopping Centre for $24,000,000. The husband wrote to the wife’s solicitors after seeing an article to this effect on 8 December 2015. On 16 December 2015 the wife’s solicitor’s confirmed the sale was to go ahead but that the wife was to receive no benefit from the sale.
By way of an Application in a Case filed 18 December 2015 the husband:
(a)joined L Pty Ltd as the second respondent,
(b)joined M Pty Ltd as the third respondent,
(c)sought to restrain the parties from dealing with certain sums of money.
It is the wife’s evidence that in January 2016 her family requested her to resign from the family companies and she did. The wife resigned from KPL and LPL as well as from M Pty Limited (the corporate trustee of the M Family Trust), N Pty Limited (of which the ultimate holding company is LPL), O Pty Limited and P Pty Limited (an old company registered by the wife’s father).
In June 2016 the husband commenced working as a manager for Company NO on a part-time basis. He works from two to five hours per day, four days per week. During the trial the husband said that he works 15 hours a week, is paid $300 per week and pays no tax on that income.
On 6 October 2016 the wife sent an email to the husband advising that USD100,000 would be applied (by her) to B’s school fees at the OP School, for the next two years. The wife was asked about that in cross-examination. She said that her original plan for both children was that they would complete years 11 and 12 in Australia. That did not occur for B and she was enrolled in the OP School in Country E at a fee of $20,000 for each six months. B is now 18 years of age and the last instalment of fees was paid in April 2018.
It is the wife’s evidence that in late 2016 she began negotiations to join in a business venture through the I Pte Limited. It is the wife’s evidence that in 2017 she joined in that venture with five other investors. The wife acquired 50,000 shares in the company which she funded by contributing US$100,000 over 30 months, by deductions from her salary of USD120,000.
Orders were made by consent on 25 November 2016 which, among other things, obliged LPL to retain in Australia, unencumbered assets having a value of not less than $1.8 million until further order.
Since January 2017 the husband has paid $250 per month in child support although the assessed rate is only $38 per month. He has not decreased the child support payments even though B has turned 18 years old.
In January 2018 C commenced attending PQ School in Country E.
Credit and Submissions
The Evidence of the Witnesses
There are issues that could only be determined by reference to the uncorroborated testimony of the witnesses. It is therefore necessary to make credit findings.
The husband was an apparently cooperative witness. He made some concessions asked of him. The husband failed to complete his Financial Statement as to Parts E and F, which relate the financial circumstances within his current household. He was asked in cross-examination whether the other occupant, Mr IJ, paid any other expenses for him and he said: “No”. He then conceded that Mr IJ usually pays for electricity. The husband’s evidence was at least careless if not deliberately misleading. However, the most important issue in relation to the husband’s evidence is that he was not involved in most of the critical transactions and decisions which go to the substance of his claim. Some transactions predated him meeting the wife and others occurred in his absence. Therefore he was not able to give probative evidence about those matters.
The wife gave some of her evidence under a certificate under s 128 of the Evidence Act1995 (Cth). She had a tendency to respond to questions in cross‑examination with “we” when she later said that she meant “I”. That said, she was not successfully challenged on any significant aspect of her evidence. To my observation she was a careful witness, reading documents provided to her during cross-examination, considering before answering and asking for clarification on occasions. She did not resile from any important aspect of her evidence.
The wife’s mother gave her evidence through an English/Country D interpreter. Indeed, it was the same interpreter who translated her affidavit for her and is referred to in the attestation clause to the affidavit. I should say the interpreter used many of the English words used in Ms EE’s affidavit and annexures when he was asked to translate passages to the witness. I take it that there was no Country D word or phrase that would convey the necessary meaning. Communication through an interpreter is notoriously inefficient and can be imprecise. Particularly so where there is voluminous and/or technical subject matter. I mean no criticism of the interpreter who assisted Ms EE but, even allowing for a deponent who could not speak or read English, in my opinion she was unable to support her affidavit in cross-examination. I was left with the impression that she did not understand parts of her affidavit on the day it was executed. She was asked about the meaning of some of the terms she used in her affidavit and she was unable to demonstrate an accurate understanding of them. For example, she was asked about the meaning of “personal guarantee” and responded to the effect: “if you owe someone then you have to pay them back”. She was asked if she recalled that the 1992 finance from the QQ Bank for the wife and LPL was refinanced through that bank in 1993. Her answer was to the effect that she knew that it was thanks to the QQ Bank that “we” are where we are today. There was no indication from her response that she had any independent recollection of the detail of the refinance that is set out in paragraph 52 of her affidavit. On a couple of occasions her response to a question about a paragraph of her affidavit, albeit unresponsive, suggested that she did have some understanding of the topic addressed in that paragraph. However, she was asked about transactions, meetings and the conduct of the family enterprise and regularly answered that she relied on her late husband and/or her accountant and/or her sons.
Mr HH, the accountant for the corporations and the individual family members, described a series of statements made to him in English, in or about late April 2016[5] at a meeting he attended with the wife’s mother and one or both of Mr FF and Mr MM. During cross-examination Mr HH confirmed that it was possible that it was Ms EE who said those things. That facility in English was not on display when the wife’s mother gave her evidence before me.
[5] Paragraph 8 of Mr HH’s affidavit filed 16 July 2018.
Nothing was done to correct these problems in re-examination. The first thing to say is that during cross-examination Ms EE could not support her affidavit. The two possibilities are that Ms EE was not the author of some parts of her affidavit or that during her cross-examination she was dissembling and pretending not to recall the events described in her affidavit.
It is likely that Ms EE was not accurately represented by her presentation in the witness box. In any event she was not a credible witness. That said, much of her evidence is unchallenged.
Mr FF was cross-examined and there was no challenge to his credit.
Mr HH was cross-examined and there was no challenge to his credit.
Mr QR was cross-examined in respect of his valuation report on the Suburb W property. Although the opinion he expressed was challenged, there was no challenge to his credit.
The Law
The Approach In Proceedings Under Section 79
In the context of these proceedings s 79 of the Act relevantly provides:
79 Alteration of property interests
(1)In property settlement proceedings, the court may make such order as it considers appropriate:
(a)in the case of proceedings with respect to the property of the parties to the marriage or either of them—altering the interests of the parties to the marriage in the property; or
…
including:
(c) an order for a settlement of property in substitution for any interest in the property; and
(d)an order requiring:
(i)either or both of the parties to the marriage; or
…
to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.
…
(2) The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
(4) In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d) the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
(f) any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
The first issue is whether any order should be made. As was observed in Stanford v Stanford (2012) 247 CLR 108, the preliminary, just and equitable requirement is often readily satisfied. Here, after a marriage of significant duration, the parties’ relationship has broken down and they live apart. Their finances remain connected to those of members of the wife’s family. I note the exhortation in s 81 of the Act to as far as practicable, “make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them”. It is just and equitable that the parties have relief under s 79 of the Act.
I turn to the task of identifying just and equitable orders that will alter the interests of the parties in property.
I will address the following matters:
(a)make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing;
(b)identify and assess the contributions of the parties within the meaning of ss 79(4)(a), (b) and (c) of the Act and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties;
(c)identify and assess the relevant matters referred to in ss 79(4)(d), (e), (f) and (g) of the Act (“the other factors”), including, because of s 79(4)(e), the matters referred to in s 75(2) of the Act so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties; and
(d)consider the effect of those findings and determinations and resolve what order is just and equitable in all the circumstances of the case.
The property of the parties
In determining what order is appropriate, it is necessary to make a finding as to the property of the parties. That involves identifying assets, liabilities and financial resources and their values.
The husband and wife settled a joint balance sheet as follows:
| Ownership | Description | Husband’s value | Wife’s value | |
| ASSETS | ||||
| 1. | H | The ZZ Town apartment | 81,241 | 81,241 |
| 2. | H/W | The Suburb W property(1/6 share) | 383,333 | 0 |
| 2(a) | H | The Suburb W property (1/6 share) | 0 | 0 (alternatively 166,667) |
| 2(b) | W | The Suburb W property (1/6 share) | 0 | 0 (alternatively 166,667) |
| 3. | W | The Suburb A property | 2,050,000 | 2,050,000 |
| 4. | H | Savings – ANZ Bank Account (BSB No. … Account No. #25) | 5,320 | 5,320 |
| 5. | H | Savings – ANZ Bank Account (BSB No. … Account No. #19) | 200 | 200 |
| 6. | H | Savings – ST Bank Account (#01) | 500 | 500 |
| 7. | W | Savings - CBA Account (BSB No … Account No. #53) | 9,792 | 9,792 |
| 8. | W | Savings - CBA Account (BSB No … Account No. #61) | 29 | 29 |
| 9. | W | Savings – RS Bank Account (Account No. #55) (Balance as at 8 June 2018 is CF2,019.48 ~AUD0.21) | 0 | 1 |
| 10. | W | Savings – ST Bank Account (ending #01) (Balance as at 24 July 2018 is CE1,267) | 1,257 | 1,257 |
| 11. | W | Savings – ST Bank Account (ending #01) (Balance as at 24 July 2018 is CE5,796) | 5,751 | 5,751 |
| 12. | W | Savings – ST Bank Account (ending #1) (Balance as at 24 July 2018 is CE1,196) | 1,184 | 1,187 |
| 13. | W | Savings – TU Bank account (ending #30) (Balance at 24 July 2018 CE983) | 975 | 975 |
| 14. | W | Savings – NAB Account (#25, #98) | 0 | 0 |
| 15. | W | M Pty Ltd | 0 | 0 |
| 16. | W | LPL | 0 | 0 |
| 17. | W | KPL | 0 | 0 |
| 18. | W | R Pte Ltd | 0 | 0 |
| 19. | W | SC Pty Ltd | 0 | 0 |
| 20. | W | SEA Marketing Pty Ltd | 0 | 0 |
| 21. | W | SS Pty Ltd | 0 | 0 |
| 22. | W | Various international companies as listed in annexure 2 to the wife’s Financial Statement of 4 June 2014. | 0 | 0 |
| 23. | W | Debt owed from SS Pty Ltd to “Mr JJ/Ms Dutsanee” | 0 | 0 |
| 24. | W | J Trust (Unit trust) | 1,571,709 | 0 |
| 25. | W | I Pte Limited | 100,000 | 0 |
| 26. | H | Motor Vehicle | 4,500 | 4,500 |
| 27. | H | Funds held in Mills Oakley trust account | 40,000 | 40,000 |
| 28. | W | Funds to be paid into Mills Oakley trust account | 0 | 30,000 |
| Total | 4,255,791 | 2,230,753 (alternatively 2,564,087) | ||
| ADDBACKS | ||||
| 29. | $ | $ | ||
| Total | 0 | 0 |
| LIABILITIES | ||||
| 30. | H | Mr Z Kartal | 25,700 | 0 |
| 31. | H | Credit Card – Amex #03 | 1,000 | 1,000 |
| 32. | W | Y Bank (mortgage on the Suburb A property) | 1,050,000 | 1,050,000 |
| 33. | W | Country E Tax Authorities (CE15,232.14) | 15,153 | 15,153 |
| 34. | W | Debt to KPL ATF J Trust | 0 | 118,392 |
| 35. | Jt | M (Suburb W property) | 0 | 0 |
| 35a | H | M (Suburb W property) | 0 | 0 (alternatively 100,000) |
| 35b | W | M (Suburb W Property) | 0 | 0 (alternatively 100,000) |
| 36. | W | Credit Card – Visa – CBA (Account No. #48) | 252 | 252 |
| 37. | W | Credit Card – MasterCard – CBA (Account No. #87) | 0 | 0 |
| 38. | W | Credit Card – Visa – ST Bank (Account No. ending #82) (balance as at 15 June 2018 is CE938.55~AUD927.64) | 928 | 928 |
| 39. | W | Credit Card – MasterCard – ST Bank (Account No. ending #69 – balance at 24 July 2018 CE212) | 210 | 210 |
| 40. | W | Credit Card – Visa – ST Bank (Account ending #85) (Balance as at 24 July 2018 is CE497) | 493 | 493 |
| 41. | W | Credit Card – Visa – TU Bank (Account ending #89) | 0 | 0 |
| 42. | W | Credit Card – MasterCard – TU Bank (Account ending #00) Account balance at 24 July 2018 CE 10 | 10 | 10 |
| 43. | W | Credit Card – Visa – TU Bank (Account ending #89) Account balance at 24 July 2018 CE3,725 | 3,695 | 3,695 |
| 44. | W | Credit Card – Visa – UV Bank (Accounting #24) | 0 | 0 |
| 45. | W | Credit Card – Visa – VW Bank (Account ending #82 – balance at 23 July 2018 CE3,287) | 3,260 | 3,260 |
| 46. | W | CGT – the Suburb A property | 244,632 | 244,632 |
| 47. | Jt | CGT – the Suburb W property | 0 | 0 |
| 47a | H | CGT – the Suburb W property | 0 | NK |
| 47b | W | CGT – the Suburb W property | 0 | E45,000 |
| Total | 1,345,333 | 1,483,025 (alternatively 1,683,025) | ||
| SUPERANNUATION | |||||
| Member | Name of Fund | Type of Interest | Husband’s value | Wife’s value | |
| 48. | H | Company VV | Accumulation | 18,664 | 18,664 |
| 49. | H | Company VV | Accumulation | 21,214 | 21,214 |
| 50. | W | GG Super (as at May 2018) | Accumulation | 77,101 | 77,101 |
| Total | 116,979 | 116,979 | |||
| FINANCIAL RESOURCES | |||||
| Ownership | Description | Husband’s value | Wife’s value | ||
| 51. | W | Family Trust | UK | 0 | |
| 52. | W | WX Country E (CE 70,404) | Defined Contribution | 70,050 | 70,050 |
| Total | 70,050 | 70,050 |
As to the issues in respect of the balance sheet:
Assets
There is an aspect of the husband’s case that asserts a resistance to his property settlement claims co-ordinated between the wife, her mother and brothers and the family group of companies. The presentation of evidence about the companies is not inconsistent with that assertion.
The present control of the family group of companies is something of a mystery. It is the husband’s evidence that in or about August 1997 the wife said to him:
My parents own a shopping centre at [Suburb OO]. I am the real boss of the family, I’m the one that keeps everything going by making sure there’s enough money to keep going.
The wife, her mother and Mr FF disagree with the asserted representation. The background facts suggest that during his life, the wife’s father had a significant involvement in the control of the group. It is certainly not clear who has that role now.
I have referred to the presentation of Ms EE in cross-examination. Ms EE gave evidence about the influence that her sons have had in decision-making within the group. For example, she was asked about advancing money to the wife since June 2014. The passage of cross-examination went like this:
[Husband’s counsel]: Since June of 2014 has it been the case that you’ve provided financial assistance to your daughter?
[Ms EE]:Look if there was severe hardship and then she asked for assistance yes I do help but this is a small helping hand. I mean we’re mother and daughter you know, you can’t permanently cut that connection.
[Husband’s counsel]: For a period of six months during 2016 did you deposit lump sums of money once a month into her account?
[Ms EE]:Look it was a loan and I think this has got something to do with all of these court proceedings but look I wasn’t that involved with her.
[Husband’s counsel]: The answer to the question is yes is it?
[Ms EE]:Yes.
[Husband’s counsel]: Do you remember how much money that was that was deposited into her account?
[Ms EE]:I can’t remember the amount
[Husband’s counsel]: Did you deposit any monies into her account during 2017?
[Ms EE]:Yes.
[Husband’s counsel]: Do you remember how much that was?
[Ms EE]:Look I can’t remember the amount but it was my own personal fund – all of my boys they weren’t happy with this.
Taken at face value, that suggests that two or more of the wife’s brothers have influence, if not control, over decisions made involving the resources of the family group of companies. On the face of that evidence they were able to veto the application of family funds for the benefit of the wife and their mother was obliged to use her personal funds. However other witnesses gave evidence suggesting that since her husband’s death, the wife’s mother has taken up his role in the group. Mr FF said that the roles played by the wife (his sister) on behalf of the family businesses were as their mother’s mouthpiece. He said something to the effect “if mum screams, [Ms Dutsanee] screams”. I understood him to mean that the wife exercised no independent authority and acted entirely at their mother’s direction. He also said that his father was the brains of the family business and his mother was the conscience but that since his father’s death in 2016, his mother was both the brains and the conscience of the business. I have referred above to Mr HH’s confirmation that Ms EE has a substantial capacity in spoken English and was present during meetings with him.
The wife too gives evidence about her role in family businesses. She says[6] that while she held offices in KPL and LPL, her father was the controlling mind of the various family businesses. However, she says that she undertook some projects. For example, in about 1998, KPL purchased the Suburb W property. It is the wife’s evidence that she and Mr BB instigated that project.[7] That suggests that the wife had a level of autonomy in directing KPL’s affairs.
[6] Paragraph 15 of the affidavit of the wife filed 22 June 2018.
[7] Paragraph 29 of the affidavit of the wife filed 22 June 2018.
It is not clear what the relationship is, if any, between Mr V’s R enterprises and the family companies. The wife first worked with her brother’s company in September 1999 and, to this day, she receives financial benefits from an R enterprise. That connection with her family does not show signs of an estrangement.
On the other hand, arguing against there being a family conspiracy against the husband is the husband’s own evidence about relations within the wife’s family. The husband’s cross-examination included a passage[8] to the following effect:
[Wife’s counsel]: You accept don’t you that my client’s relationship with her siblings has broken down since these proceedings have started, don’t you?
[Husband]:I don’t think so.
[Wife’s counsel]: You accept, don’t you, from your own observations that her brother [Mr FF] has been very hostile to my client, don’t you?
[Husband]:They never liked each other anyway.
[8] At about 4.20pm on 23 July 2018.
It is not possible to know the truth of the wife’s current standing with the members of her family and their related entities. I would observe, however, that the wife has largely lived outside Australia in recent years and on the face of it, apart from involvement in R enterprises, she has not been significantly involved in the management or control of the family companies.
All of that said, and notwithstanding the findings made about the balance sheet for these proceedings, it is more probable than not that in the individuals of the wife’s family and in the associated entities, there is a valuable resource for the wife. It is not possible to put a figure on the potential financial benefit to the wife from that source but I am confident that there will be a benefit.
Item 2, 2a & 2b: The Suburb W Property
KPL purchased the property in about 1998. On that property was a residence and a child care centre. KPL commenced operating the Suburb W business from this site.
The wife’s evidence about a development proposal for the Suburb W property is somewhat confusing. The wife deposed[9] that in about 1998, KPL purchased the property for development purposes at the instigation of her and Mr BB. She then deposed that in about 2002 her father and brothers wanted to develop the Suburb W property. The wife asserts that she, the husband and Mr V did not agree with the development, while Mr MM, Mr FF and a cousin (Mr XY) agreed to the proposal. The wife says that her brothers, Mr MM and Mr FF, sold their homes to fund their acquisition of their respective one sixth interests in the development. On the face of it that means that Mr V and Mr JJ family did not contribute. The wife says that she and the husband did not contribute any funds to the purchase of the Suburb W property. As a result the wife says that her father caused the interest of the husband and wife (said to have a value of $200,000 with the total value of the property at $1,200,000) to be offset by a loan to the husband and wife from M Pty Limited for $200,000. The wife asserts that thereby the husband and wife had the choice of opting out of the project. The wife deposed that it was the same arrangement for her brothers and Mr XY. Just stopping there, it is not clear why the wife’s brothers (presumably Mr MM and Mr FF) would be part of the same “opting out” arrangement if they, unlike the wife and husband, had bought into the project. The picture is less clear when regard is had to the affidavit of the wife filed 14 November 2016 where she deposed[10] that:
67.All my brothers and cousins have made partial payments to [M Pty Ltd] for their share in the property. [Mr Kartal] and I are the only registered proprietors who have not made any payments to date. [Mr Kartal] and I have made no payment whatsoever to M for the 1/6th share we hold on title.
68.To date, no steps have been taken to progress development of the [Suburb W] property and it is my understanding that my family intend to take steps to acquire the 1/6th share held by [Mr Kartal] and myself.
[9] Paragraph 29 of the affidavit of the wife filed 22 June 2018.
[10] Exhibit 32.
The difference in the wife’s evidence about the involvement of Mr V in the development has not been explained. Neither has the position of Mr JJ family.
The wife’s trial affidavit goes on with her recalling a conversation between her and the husband to the following effect:
The husband said: I absolutely don’t want to live with your family.
The wife replied: Let’s just keep dad happy for a while, we can do the transfer after he dies.
It is very difficult to follow the logic of that conversation. On the wife’s evidence there was no detriment to the husband and wife in being part of the project. They had contributed nothing and their legal interest was balanced by a debt in the same amount. Further, it is odd that there would be a conversation in 2002 about them waiting until the wife’s father died.
The business has since been moved across the road to 2 AA Street.
There is a dispute about the value of the property. The single expert puts the property at $2,000,000 “as is” and at $2,300,000 as a development site, based on a proposed development. The single expert was only challenged about the second figure. It was put to him in cross-examination that the “comparable” developments were not comparable, particularly because they were a significant distance from the Suburb W property and because the projects were substantially different in terms of the number of dwellings. The single expert did not resile from his opinion and there is no alternate opinion evidence. If the property has an unchallenged value of $2,000,000 “as is”, it seems to me that the balance of the expert’s opinion should be accepted. There is rarely any certainty with valuation evidence and, as a matter of logic, one would expect some premium for a development site over the value of the same property, without the planned development. On the face of it the property has a value to the husband and the wife of $383,333. However, the valuation issue is not critical given the approach I intend to take with these interests.
Despite the agreement of the husband and wife to transfer their interest in the Suburb W property to the M, I do not propose to make any orders about those interests. Not all of the affected persons are parties to these proceedings. As is referred to above, the co-owners were proposing to acquire the husband’s interest. Hopefully a practical approach will be taken to severing the husband’s interest but if not then action can be taken, on notice to the co‑owners, which will put the relevant parties to proof about their contributions and associated debts and the CGT implications, if any, will be resolved automatically.
Items 9 and 12: Wife’s Savings
There are minor discrepancies in the figures asserted by the parties. I will accept the wife’s figures, the accounts being in her name.
Item 24: Wife’s Interest in J Trust
It is the husband’s contention that the wife is the beneficial owner as well as the legal owner of 11 per cent of the units in the trust. It is submitted in his case that wife’s interest in the trust has a value of $1,571,709.
It is submitted for the wife and for the third parties that she has no beneficial interest and holds her legal interest in the units on trust for LPL.
In 1992 the wife acquired an 11 per cent interest in the J Trust. Presumptions arise from the way in which property is acquired. When a person buys property in the name of another person, a presumption usually arises that the recipient holds that property on trust for the donor. Sometimes the relationship of the donor and donee means that another presumption applies (referred to as a presumption of advancement) whereby the donee is assumed to be the legal and beneficial owner, rather than a trustee. Both presumptions can be rebutted or reinforced because of evidence called in the case. The issue was relevantly canvassed by Chief Justice Gibbs in Calverley v Green (1984) 155 CLR 242.
As to the mechanics of the purchase of the wife’s interest, on 4 June 1992 a letter[11] was sent by KPL’s solicitors to solicitors acting for 13 of the Country D owners of trust units, proposing a purchase of their units by the wife and Mr YZ, a friend of the family. Mr YZ agreed to purchase more than half of the 64 per cent of the units held by the Country D owners. The intention was for the wife to purchase 11 per cent of the units.
[11] Commencing at page 180 of the exhibits to the affidavit of the wife’s mother.
The wife’s purchase was funded as to seven per cent of the units by a borrowing by LPL from the QQ Bank on or about 31 August 1992. The purchase as to four per cent of the units was funded by a joint borrowing by the wife and LPL of $232,000 from the QQ Bank which was applied to the purchase of those units on 18 November 1992. In the period October 1992 to July 1993 no principal repayments were made.[12]
[12] Paragraph 53 of the affidavit of Ms EE filed 16 July 2018.
KPL refinanced those two loans by borrowing $3.95 million from the QQ Bank and on lent that money to LPL. The bank took second mortgages on the two shopping centres and on 22 July 1993 the bank paid out the earlier loans.
Therefore the only contribution by the wife to acquire units in the trust was that with LPL, prior to 18 November 1992, she committed to borrow $232,000 to be applied to purchase four per cent of the units. That loan was discharged in July 1993 when KPL helped LPL refinance the debt. On those facts, there is a presumption that the wife did not hold the beneficial interest of 11 per cent of the units and that at least as to seven per cent, she held them on trust for LPL.
The presumption of advancement only applies to certain relationships. For example, in Australia the presumption of advancement has been found to apply to transfers from husbands to their wives, from male fiancés to their female fiancées, and from parents to their children.[13] Importantly, it is not suggested before me that a presumption of advancement could arise from a purchase by a body corporate. As to other evidence, it is the evidence of the wife[14], her mother[15] and (as and from 2008) Mr HH[16] that the wife has never received the benefit of a distribution from the trust. There was no meaningful challenge to that evidence and there is no evidence to the contrary. I am not satisfied that the wife is the beneficial owner of any units in the trust.
[13] Re Eykyn’s Trusts (1877) 6 Ch. D. 115, cited in Nelson v Nelson (1995) 184 CLR 538, 600 (McHugh J); Not T facto spouses: Calverley v Green (1984) 155 CLR 242; Wirth v Wirth (1956) 98 CLR 228; Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353; Nelson v Nelson (1995) 184 CLR 538; and Brown v Brown (1993) 31 NSWLR 582.
[14] Paragraph 16 of the wife’s affidavit filed 22 June 2018.
[15] Paragraph 106 of the affidavit of Ms EE filed 16 July 2018.
[16] Paragraph 29 of the affidavit of Mr HH filed 16 July 2018.
Aside from the question of ownership, there is no probative evidence of the value of the units in the J Trust. It is noted on behalf of the wife, that despite the issue being raised with the husband’s lawyers on a number of occasions[17], the husband failed to seek or join in an order that the wife’s interest be valued. Insofar as the accountant Mr HH provides evidence about the wife’s interest, the evidence was given to explain historical documents and the calculations are based on 2015 figures.
[17] For example see the letter from the wife’s solicitors to the husband’s solicitors dated 27 June 2018 – Exhibit 2.
In those circumstances I will exclude the interest from the balance sheet.
Item 25: I Pte Limited
The amount in the agreed balance sheet for the value of the wife’s shares is $100,000. The husband contends that the item should remain in the balance sheet and the wife opposes that course.
It is the wife’s evidence that in late 2016 she began negotiations to join in a business venture through the I Pte Limited. The purpose of the venture was to build affordable residential housing in Country F in the form of serviced apartments.
The wife has 50,000 shares in the company which she funded by contributing USD100,000 over 30 months, by deductions from her salary. Her salary was USD120,000 per annum. The company has a 25 per cent shareholding in ZA Pte Limited with the balance of the shares being held by a Japanese business partner through AC Pte Limited. The company has a 75 per cent shareholding in I Pte Limited with the balance of the shares being held by AC Pte Limited. It is not clear from the wife’s evidence how each of those entities is involved in any particular project. The venturers have funding approval from the International Finance Corporation for US$2,000,000. The wife contends that the Country F housing development will be completed in or by 2020 and that the company plans to sell half the houses and to rent out and manage the remaining half for the following eight years. The wife contends that she cannot sell her shares until at least 2020 and that due to borrowings, the partners do not expect to break even until at least 2024.
There is no formal valuation evidence about the wife’s shares. The wife contends that the shares have no value. The best evidence of value is that the wife paid US$100,000 for her shares. That said, the parties have prepared an agreed balance sheet showing the husband’s contention about the value at AUD$100,000. I am not aware of the reason for the decision about the currency but as it favours the wife, compared to a US$ figure, I will adopt the husband’s figure.
Item 27: Funds held in Mills Oakley Trust Account
The wife borrowed $40,000 and paid that sum into her solicitors’ trust account. Pursuant to the order made by me on 27 July 2018, the wife was permitted to uplift those funds and avoid the impost of the dollar for dollar order made on 6 December 2016. Therefore this item will be removed from the balance sheet.
Item 28: Funds to be paid into Mills Oakley Trust Account
The wife has paid $30,000 into her solicitors’ trust account. Pursuant to the order made by me on 6 December 2016, she will be obliged to pay an equivalent amount to the solicitor for the husband. I understood from something said during final submissions that the wife would direct that one half of the payment be remitted to the solicitors for the husband. Therefore $15,000 will appear against each of the parties. It would probably serve the same purpose if both amounts were excluded from the balance sheet but I will adopt the course proposed on behalf of the wife.
Item 30: Husband’s Debt to his Brother
The husband asserts that he owes his brother $25,700. Beyond the assertion in his Financial Statement there is no evidence of the loan. In any event, I understand from an interjection made during submissions that the money was applied to legal fees. I will not include this debt as relevant to the balance sheet.
Item 34: Debt to KPL ATF J Trust
The wife claims a debt to KPL as trustee for the J Trust in the sum of $118,392. I refer to the discussion above about the wife’s interests in the trust.
From 23 January 2015 to 9 November 2016 the wife borrowed $118,391.67 from KPL. Of that sum $101,268.74 was applied to the wife’s legal fees. The balance went to the wife’s living expenses and those of the children.
The only issue relates to the amount not applied to legal fees: $17,122.93. Including in the balance sheet a debt for legal fees or a loan raised to pay legal fees is tantamount to requiring one party to contribute to the costs of another. That should only be done by reference to s 117 of the Act.
In my opinion there is a real doubt that the debt will be called on. The evidence of those involved is that the transactions and legal title to assets were arranged to facilitate the purposes of the wife’s parents and had no necessary bearing on beneficial ownership. Thus it is that although the wife has a legal interest to 11 per cent of the units in the J Trust, she and the relevant companies assert and I am satisfied, that she has no beneficial interest therein. In those circumstances how could I find that an advance of $17,122.93 (as part of an advance of over $118,000) will result in a request for repayment?
The wife’s mother gave evidence about the companies borrowing from each other and the assets of the companies being used by her and her husband as a common fund. It is the wife’s evidence that the attitudes of the members of her family to her have deteriorated as a result of these proceedings. I am nevertheless not satisfied that she will be called on to repay the debt. That issue was put to the wife’s mother in cross-examination. The passage of cross-examination was to the effect:
[Husband’s counsel]: Are you aware that [Ms Dutsanee] says she owes KPL $118,000?
[Wife’s mother]: Look, I didn’t check it but I knew she owes roughly that much.
[Husband’s counsel]: Have you asked her to pay that back?
[Wife’s mother]: Look I’ve never asked for the money to be returned yet but if she sells the house then I will ask.
[His Honour]: That’s the house at [Suburb A]?
[Wife’s mother]: Yes that’s correct
That passage of evidence suggests that:
· if there is a debt it is owed to Ms EE and not to KPL.[18]
· there was no formal loan agreement;
· the loan has no specific term; and
· there has never been a demand for payment.
[18] It was the evidence of Ms EE that the source of the advance “was my own personal fund” given at about 4.35pm on 25 July 2018.
In any event it is open to the Court to not include a debt in calculating the net matrimonial pool. In all of the circumstances referred to above, I will not include any amount in the balance sheet for this item.
Items 35, 35a & 35b: Liability for the Suburb W Property
The husband and the wife owe $200,000 in respect of their interests in the Suburb W property. I will include this debt in the balance sheet. However, I intend to deal with their interests in that property in specie. In that way the enforceability of the associated debts and any CGT obligations can be addressed directly.
Items 47, 47a & 47b: CGT for the Suburb W Property
There is no probative evidence about the likely CGT impost on the realisation or transfer of the interests of the husband and the wife in this property. Of course the ultimate impost, if any, would be affected by the financial circumstances of the wife and husband if the gain is declared. I intend to deal with the interests of the wife and husband in specie and any CGT impost will follow the event.
I find that the assets are:
| Ownership | Description | Value | ||
| ASSETS | ||||
| 1. | H | The ZZ Town apartment | 81,241 | |
| 2. | H/W | The Suburb W property (1/6 share) | 383,333 | |
| 3. | W | The Suburb A property | 2,050,000 | |
| 4. | H | Savings – ANZ Bank Account (BSB No. … Account No. #25) | 5,320 | |
| 5. | H | Savings – ANZ Bank Account (BSB No. … Account No. #19) | 200 | |
| 6. | H | Savings – ST Bank Account (#01) | 500 | |
| 7. | W | Savings - CBA Account (BSB No … Account No. …53) | 9,792 | |
| 8. | W | Savings - CBA Account (BSB No … Account No. …61) | 29 | |
| 9. | W | Savings – RS Bank Account (Account No. #55) (Balance as at 8 June 2018 is CF2,019.48 ~AUD0.21) | 1 | |
| 10. | W | Savings – ST Bank Account (ending #01) (Balance as at 24 July 2018 is CE1,267) | 1,257 | |
| 11. | W | Savings – ST Bank Account (ending #01) (Balance as at 24 July 2018 is CE5,796) | 5,751 | |
| 12. | W | Savings – ST Bank Account (ending #01) (Balance as at 24 July 2018 is CE1,196) | 1,187 | |
| 13. | W | Savings – TU Bank account (ending #30) (Balance at 24 July 2018 CE983) | 975 | |
| 14. | W | I Pte Limited | 100,000 | |
| 15. | H | Motor Vehicle – | 4,500 | |
| 16. | W | Funds to be paid into Mills Oakley trust account | 15,000 | |
| 17. | H | Funds to be paid into Mills Oakley trust account | 15,000 | |
| Total | 2,674,086 | |||
| LIABILITIES | |||
| 18. | H | Credit Card – Amex #03 | 1,000 |
| 19. | W | Y Bank (mortgage on the Suburb A property) | 1,050,000 |
| 20. | W | Country E Tax Authorities (CE15,232.14) | 15,153 |
| 21. | Jt | M (Suburb W property) | 200,000 |
| 22. | W | Credit Card – Visa – CBA (Account No. #48) | 252 |
| 23. | W | Credit Card – Visa – ST Bank (Account No. ending #82) (balance as at 15 June 2018 is CE938.55~AUD927.64) | 928 |
| 24. | W | Credit Card – MasterCard – ST Bank (Account ending 8469 – balance at 24 July 2018 CE212) | 210 |
| 25. | W | Credit Card – Visa – ST Bank (Account ending 3785) (Balance as at 24 July 2018 is CE497) | 493 |
| 26. | W | Credit Card – MasterCard – TU Bank (Account ending 2800) Account balance at 24 July 2018 CE 10 | 10 |
| 27. | W | Credit Card – Visa – TU Bank (Account ending 8389) Account balance at 24 July 2018 CE3,725 | 3,695 |
| 28. | W | Credit Card – Visa – VW Bank (Account ending 1182 – balance at 23 July 2018 CE3,287) | 3,260 |
| 29. | Jt | CGT – Suburb A property | 244,632 |
| Total | 1,519,633 | ||
| SUPERANNUATION | ||||
| Member | Name of Fund | Type of Interest | Value | |
| 30. | H | Company VV Flexible Lifetime | Accumulation | 18,664 |
| 31. | H | Company VV | Accumulation | 21,214 |
| 32. | W | GG Super (as at May 2018) | Accumulation | 77,101 |
| Total | 116,979 | |||
| FINANCIAL RESOURCES | ||||
| Ownership | Description | Value | ||
| 33. | W | Family Trust | UK | |
| 34. | W | WX Country E (CE 70,404) | Defined Contribution | 70,050 |
| Total | 70,050 |
Net Assets
The net assets are valued at $1,271,432 ($2,674,086 – $1,519,633 + $116,979) of which $116,979 is in the form of Australian superannuation and $1,154,453 is in non-superannuation assets. In addition, the wife has a superannuation interest in Country E worth $70,050.
Contributions
The obligations placed on the Court by s 79 of the Act call for an assessment of the respective contributions by and on behalf of the husband and wife. The manner of assessing contributions has been the subject of previous decisions. The contributions of a parent and homemaker are to be assessed, not in any merely token way, but in terms of their true worth to the building up of the assets.[19] There are said to be risks in taking an overly technical approach to the assessment of the respective contributions of the husband and wife in that the Court can become involved in questions of the quality of contributions which go far beyond the real world expectations of the husband and wife.
[19]In the Marriage of Shewring (1988) FLC 91-926.
As to whether the Court should apply the considerations in s 79(4) of the Act to the assets globally or asset by asset, the authorities have it the former approach is preferred, in appropriate circumstances either approach is permissible and sometimes the asset by asset approach is best. See In the Marriage of Lenehan (1987) FLC 91-814; In the Marriage of Norbis (1986) 161 CLR 513; In the Marriage of Zyk (1995) FLC 92-644.
In In the Marriage of Coghlan (2005) FLC 93-220 the Full Court allowed that superannuation may be included in the list of property drawn up as “the first step” in the determination of proceedings under s 79, whether or not a splitting order is sought in those proceedings. The Full Court suggests at [61] that:
This approach could be adopted where the parties agree that it should be adopted, or where the Court is satisfied that the superannuation interest is indeed property within the meaning of the definition of property contained in s 4(1), or if the interest is not within that definition, but is of relatively small value in the context of the value of the other assets in the case, or there are features about the interest which leads the Court to conclude that this would be an appropriate approach.
The husband’s case was argued on the basis of two pools, with the wife’s interest in the J Trust in one pool and all other assets in the other. I have not included the wife’s interest in the trust in the balance sheet and therefore, the husband’s submissions are effectively based on one pool.
Learned senior counsel for the wife “pushed the Suburb W property out to the side” but otherwise her case was also argued on a global basis. The superannuation interests are relatively modest. I will adopt a global approach save that in making orders, I will deal with the interests in the Suburb W property differently from the other assets.
Section 79(4)(a) Contributions
Financial contributions to property, both direct and indirect were made by each of the husband and wife.
At the commencement of the marriage the wife had[20]:
·savings of about $100,000;
·approximately $29,040 owing by SS Pty Ltd. This was funds advanced by the wife to the company which were repaid in 2014 or 2015;
·superannuation accumulated from 1986 with Company VV; and
·household contents and personal effects.
[20] Paragraph 9 of the wife’s affidavit filed 22 June 2018.
I note in passing that the wife gave evidence about investing CE12,500 in R Pte Ltd on about 29 September 1999 and that the source of the funds was moneys owing to her by family companies. On the face of it those moneys represent a further asset brought into the marriage by the wife. It could not have been part of the approximately $29,040 owing to her by SS Pty Ltd if that amount was not repaid until 2014 or 2015. Again this issue lends support to the impression of a lack of transparency in the financial affairs of the wife and the family companies.
The husband came to the marriage with USD5,000 in savings.
Each of the husband and wife was in paid employment during the marriage. The wife was far more consistently employed than the husband and generally at a higher rate of remuneration. For example when he first arrived in Australia the husband worked for a few months with a friend, doing renovations. The husband worked as an assistant on a full-time basis for Company YY between February and December 1999. Commencing in 2005 the husband worked in Country D for UPL Country D. However, for the first two years the husband did not draw a salary. On his return to Australia after separation the husband has had modest wages and some Centrelink benefits in the form of an Austudy Allowance.
At the commencement of cohabitation the wife was working for RR Enterprises, a subsidiary of SS Pty Ltd. She was earning US$5,000 per month as well as benefits of housing, car and travel allowance. The wife left the business in June 1997 and received a termination and bonus payment of about $215,000. The wife lent $115,988 to a company owned and operated by her parents and applied the balance to the personal expenditure of her and the husband. From 1997 to 2004 the wife was employed by KPL. She initially worked on a part-time basis for a salary of $60,000 per annum.
In September 1999 the wife travelled to Country E to assist her brother, Mr V, in setting up a venture known as RPL. To assist with the start-up venture, the wife invested with R Pte Ltd, CE12,500 which she drew on about 29 September 1999 from moneys owing to her by family companies.
In 2000 B was born. The wife stayed home for four months to care for B.
In July 2000 the wife commenced travelling to Country E for two weeks every two months, working for R. The wife says that she ceased working for RPL by April 2003. The husband contends that the wife told him that in or about 2004 the wife and her brother opened another business in Country E.
In January 2005 the husband, the wife and their children moved to City P, Country D. They hired domestic help. The wife established the distribution company in Country D and commenced importing products from Europe and Australia to Country E. The wife made regular trips to Australia, Country E, Country F, and parts of Asia.
In 2006 or 2007 the distribution company ceased trading.
In May 2007 the family moved to City H, Country D. The wife resumed working for RPL. The villas were sold to private investors. Following the relocation to City H the wife continued to travel for about 10 days every two months.
In 2012 the husband, the wife and their children moved to Country E and lived at the GH Street property. The wife worked at the R business five nights per week and the husband worked at the R business two to three times per week during the day.
From April 2012 to January 2013 the wife was not working full-time and she did not have full-time domestic help. She mainly cared for the children during that period.
The wife says that she and the husband separated under one roof on 6 December 2012.
During the period from January 2014 and April 2018 the wife has travelled extensively.
In 2014 the wife used a mortgage broker (another cousin) and was successful in obtaining an extension of the loan secured on the Suburb A property by $290,000, taking the borrowing to $1,050,000. The wife did not notify the husband that she had applied for the loan and during cross-examination she conceded that she should have done so. The purpose of the loan was at least in part, to make a property settlement with the husband.
It is the wife’s evidence that the $290,000 has all been spent on investments, school fees, travel, medical expenses, living expenses and legal fees. For example, the wife spent about $30,000 on travel and $20,000 on legal fees.
It is the wife’s evidence that in January 2016 her family requested her to resign from the family companies and she did. The wife resigned from KPL and LPL as well as from M Pty Limited, the corporate trustee of the Family Trust, N Pty Limited, O Pty Limited and P Pty Limited.
It is the wife’s evidence that in late 2016 she began negotiations to join in a business venture through the I Pte Limited. Her salary was US$120,000 per annum although for the first 30 months she applied US$100,000 to the purchase of shares in the company.
The wife’s financial contributions were significantly greater than those of the husband.
Section 79(4)(b) Contributions
This provision deals with direct and indirect non-financial contributions other than those made in the form of parent and homemaker contributions.
There were some relevant contributions made in the form of renovations but care is needed to exclude renovations made to the properties of third parties and renovations made by tradespeople. For example, the husband deposed that for five months in 2003 he supervised the renovations at a property at Suburb BD belonging to Mr FF. The nature of his role was supervisory and purchasing supplies, appliances and fixtures. In February 2010 the husband travelled from Country D to Australia to install a water heating system at the PP Town farm. Twice a year he conducted a stocktake. The husband renovated a rented apartment occupied by the family in Country E.
Those renovations do not fall within this provision. Even if the husband assisted with renovations to a property owned by one of the wife’s brothers and did so at the wife’s request, that could not be said to be a contribution made directly or indirectly to the “…conservation or improvement of any of the property of the parties to the marriage or either of them”. Indeed, insofar as the assessment of contributions is concerned, that would represent a diversion of resources away from the purposes of the marriage. Clearly on those facts that “diversion” was part of an agreement within the marriage and there should be no negative impact on the husband but the point about the limit of s 79(4)(b) contributions still applies.
As to the Suburb A property, the husband removed the garden, painted some rooms, repaired toilet taps, removed rubbish from the site, repaired leaks in the roof and cleaned the gutters and arranged the pest control to remove lice in the walls and floor.
It is difficult to be certain but my impression is that the husband made more contributions of this type than the wife.
Section 79(4)(c) Contributions
This provision deals with contributions to the family including contributions in the form of homemaker contributions and contributions to children of the marriage.
It is difficult to assess the proportions in which the parents contributed to the family.
The husband deposed that the balance of performance of domestic duties undertaken by him and the wife differed over time, depending on where they lived and their respective paid employment.
From the commencement of cohabitation until B was born, the husband contends that he and the wife shared the domestic tasks as follows:
(a)the wife mainly did the cooking and kept track of and paid the household bills; and
(b)the husband washed the dishes at night; performed most of the cleaning, including sweeping, vacuuming and cleaning the bathroom; save for individual items bought by the wife, he did the grocery shopping; looked after the motor vehicles, including cleaning them, filling them with petrol and maintaining them; and he looked after the backyard, which after the renovations were completed, included looking after the garden, weeding and installing an automatic irrigation system.
As I understand the wife’s evidence, she says that she also performed general tidying.
The husband contends that for three months after B’s birth, he and the wife shared the domestic duties, save that the wife travelled regularly to Country E, leaving the husband to care for B with the help of a part-time cleaning lady. When they were both in Australia, the husband and wife shared the care of B in the morning and on weekends. Otherwise the wife cared for her three days a week while the husband was studying at TAFE and he cared for her on the other two days.
In the period between June 2000 and 2005, the husband contends that the wife travelled for three months of each year, however, twice a year the husband and children travelled with the wife to Country E. It is the wife’s evidence that when she travelled until 2004 she generally took B with her. The husband conceded that on four trips out of five, the wife took B with her to Country E. It was also the unchallenged evidence of the wife that from March 2000 until the end of 2004 she hired a full-time domestic helper.
For seven weeks in 2004 the wife cared for the children in Country E while the husband performed compulsory military service in Country G.
From 2005 to 2007 the husband and wife lived in City P. The husband estimates that the wife travelled for two out of every four weeks. During that time the husband says that he cared for the children after school, heated the dinner prepared by a maid, fed the children, washed them and put them to bed. He ensured that they completed their homework and cared for them on the weekends.
From 2007 to 2011 the husband and wife lived in City H. The husband contends that the wife travelled for 10 days in every two months. While the wife was away, the husband said that he cared for the children with the assistance of a full-time maid. The husband deposes that he collected the children from school, supervised the maid who prepared dinner, fed the children, washed them and put them to bed. He assisted with their homework and assignments. When the wife was in City H, the husband says that they shared the domestic duties outside the hours of the wife’s employment. The husband did 90 per cent of the shopping.
The husband says that from December 2011 until January 2013 the family lived in Country E. The husband says that they did not have a maid and he performed most of the domestic tasks.
In more than five years since separation, the parenting contribution has been almost exclusively, that of the wife. Since separation the husband has only spent a few days with the children each year.
The evidence of the parents is inconsistent but, particularly because of events since separation, in my view the available finding is that the wife made the greater contribution as parent and homemaker.
Conclusion on Contribution
Accepting that in each case the submissions were made about a balance sheet that was different to the one I have settled on, the submissions about contributions were as follows. It is the wife’s submission that the contributions were made in the range 75 to 80 per cent by her and 20 to 25 per cent by the husband. For the husband it was submitted that his contributions were 30 per cent compared to 70 per cent by the wife.
In my view the contributions of the husband and wife would be properly recognised by a finding they were made in the proportions 30 per cent by the husband and 70 per cent by the wife. The wife’s initial contributions greatly exceeded those of the husband. Her financial contribution through paid employment eclipsed that of the husband. Indeed for years at a time the husband had no significant remuneration. There were some non-financial contributions that were probably mainly made by the husband. The wife made the greater contribution as parent and homemaker and that continued after separation. It is remarkable in a long marriage that there was such a disparity in the contributions of the parties but there is broad agreement about that fact.
The Other Matters in Section 79
Once contributions have been assessed, the other factors in s 79(4) of the Act need to be considered. They are:
Section 79(4)(d)
Pursuant to s 79(4)(d) I am required to take into account the effect of any proposed orders on the earning capacities of the husband and wife. There is no evidence that makes this factor relevant.
Section 79(4)(e) - Section 75(2) factors
The relevant matters in s 75(2) of the Act would seem to be paragraphs (b), (c), and (f).
(a) the age and state of health of each of the husband and wife;
The husband is 50 years of age and the wife is 56 years of age. There is no significant evidence about their health.
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
The husband’s income is $300 per week from part-time work as a manager for NO Pty Ltd owned by Mr IJ and two other persons.
For the last four years the husband has lived rent free with Mr IJ in a unit at Suburb OO owned by Mr IJ. He was in partnership with Mr IJ in a Country E business and he currently works for Mr IJ. The husband spends $388 per week, including $17 on utilities, $9 on comprehensive insurance for a motor vehicle, $50 on motor vehicle registration, $58 on child support (although the current assessment is only $8.58 per week) and $254 on weekly living expenses. The husband has been assisted by family with the cost of some travel but there is no evidence of lifestyle expenditure by the husband that is substantially inconsistent with his stated financial circumstances. The evidence about his assets and liabilities is set out earlier in these reasons.
It is likely that the husband is not fully exercising his earning capacity. The husband is studying degree and anticipates being employed from 2019 in a position earning, of the order of, $70,000 per annum. The husband agreed with propositions put to him by learned senior counsel for the wife in cross-examination about those matters. However, we do not live in times of full employment and it is probable that the husband will not be as readily employed as his concessions suggest.
The wife’s income is $4,111 per week made up of directors’ fees from I Pte ltd (Country E) at about $3,102, $1,065 in interest from investments, $58 in child support and a net loss of $114 from a shared unit occupied by a boarder. B has an income of $69 per week. The wife’s expenses are supplemented as to $46 per week by the I Pte Ltd for internet and utilities, as to $247 per week by R Pte Ltd for meal allowances and mobile telephone and as to $12 per week by I Pte Ltd for taxis and train fares. She spends $4,170 per week, made up of $776 on compulsory government superannuation (Country E), $574 on the shared rental property with CE Company, $469 in rates for the Suburb A property, $953 to the Y Bank on the Suburb A mortgage, $64 on insurance for the Suburb A property, $43 for health insurance, $202 for a personal loan, $60 on a TU Bank credit card and $1,029 on living expenses, including maid levy, school fees for C, food and household expenses, clothing etc.
The evidence about the wife’s assets and liabilities is set out earlier in these reasons.
It is not asserted that the wife is not fully exercising her earning capacity.
The overarching impression is one whereby the wife is in more robust financial circumstances than the husband. She has a consistent track record of well-remunerated employment. The wife’s contributions during the marriage were greater than those of the husband and she goes forward with that capacity.
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
The wife has the care of the only child under 18 years of age, C. The parties have no formal agreement about the father’s time with the children. Since separation he has spent time with the children, both in Country E and in Australia, by agreement with the wife. He says that it has been his practice to visit Country E once a year to spend time with the children. He saw the children seven or eight times in Sydney over three weeks in June 2014. The husband visited the children in March 2015 in Country E and he also visited there to spend time with the children between 13 and 16 November 2016, 24 and 28 August 2017 and 3 and 8 September 2017.
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain;
(e) the responsibilities of either party to support any other person;
I have set out above what there is of the evidence in relation to the parties’ expenses.
(f) Subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia, and the rate of any such pension, allowance or benefit being paid to either party;
I refer to the evidence about superannuation.
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;
The husband and wife have at times enjoyed a good standard of living. They travelled extensively, employed domestic staff and B was privately educated. If practicable, each of them would look forward to a comfortable life in the future.
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
The husband is completing tertiary studies. There is no other evidence about further study or commencing businesses.
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant;
This does not appear to be a relevant consideration.
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
In recent times, the wife has worked full-time and cared for the children while the husband worked part-time and studied.
(KPL) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
There is no evidence of such an affect.
(l) the need to protect a party who wishes to continue that party's role as a parent;
The wife maintains full-time employment notwithstanding her parenting role.
(m) if either party is cohabiting with another person — the financial circumstances relating to the cohabitation;
For the last four years the husband has lived rent free with Mr IJ in a unit at Suburb OO owned by Mr IJ. However, as I have referred to earlier in these reasons, the husband did not complete Parts E and F of his Financial Statement and therefore there is no evidence about the financial circumstances of their household. I have referred to his oral evidence earlier in these reasons.
(n) the terms of any order made or proposed to be made under section 79 in relation to the property of the parties;
There is no other relevant order.
(naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to a party to the marriage or a person who is a party to a T facto relationship with a party to the marriage or the property of a person or the property of a person covered by this subdivision or vested bankruptcy property in relation to a person covered by this subdivision
There is no other relevant order.
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
The husband’s child support was not paid at a significant rate but in as much as the wife applied matrimonial funds to B’s school fees, for example, he can be said to have contributed to those fees.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;
The mortgage on the Suburb A property has been increased for the purposes of the wife’s legal fees by over $20,000. Otherwise nothing comes to attention here.
(p) the terms of any financial agreement that is binding on the parties.
There is no relevant agreement.
(q) the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
There is no relevant agreement.
Section 79(4)(f)
Beyond those referred to above, there are no relevant orders made under the Act.
Section 79(4)(g)
I have referred to the child support position.
Conclusion
The submission on behalf of the husband was that there should be an adjustment to him of 15 per cent of the total pool. For the wife it is submitted that there should be no adjustment from the contribution based entitlements.
The relevant matters arising from the remaining elements of s 79, which include the s 75(2) factors referred to above are:
·the outcome based on contributions alone would leave the wife with 70 per cent of the assets compared to 30 per cent for the husband. In the context of these proceedings that would involve a disparity between them of the order of half a million dollars;
·in any event, the wife is in significantly better financial circumstances than the husband. She earns over $4,000 per week compared to the husband’s $300. She is likely to receive financial support and benefits from her family and the support and benefits are likely to be significant;
·the wife has applied $20,000 of matrimonial funds to her legal fees in these proceedings;
·the wife has an interest in superannuation in Country E, of the order of $70,000;
·the husband is six years younger than the wife;
·the wife will continue to have the major care of C who will be 18 in mid-2021.
These factors have countervailing effects. The first four strongly argue for an adjustment to the husband and the others, for an adjustment in favour of the wife. On balance there should be a modest adjustment in favour of the husband. I will make an adjustment to him of 10 per cent.
Just and Equitable
The net assets are valued at $1,271,432 ($2,674,086 – $1,519,633 + $116,979) of which $116,979 is in the form of Australian superannuation and $1,154,453 is in non-superannuation assets. In addition, the wife has a superannuation interest in Country E worth $70,050.
As I have indicated, I will leave the husband and wife with their interests in the Suburb W property and with the asserted, associated debts. Neither of the parties seeks a splitting order in respect of the imbalance of superannuation and I will therefore not order one.
If the assets are divided in the proportions 40 per cent to the husband and 60 per cent to the wife then the husband would have about $508,573 and the wife would have about $762,859. As to the form of the orders, the operative order will deal with the division of the fund held in the controlled moneys account.
Of the pool of assets identified by me, the husband has the benefit of and will retain:
Owner Asset / Liability Value H The ZZ Town apartment 81,241.00 H The Suburb W property
(1/12 share)191,666.50 H Savings – ANZ Bank Account (BSB No. … Account No. #25) 5,320.00 H Savings – ANZ Bank Account (BSB No. … Account No. #19) 200.00 H Savings – ST Bank Account (#01) 500.00 H Motor Vehicle 4,500.00 H Funds to be paid into Mills Oakley trust account 15,000.00 H Credit Card – Amex #03 -1,000.00 H M (Suburb W Property) -100,000.00 H Company VV Accumulation 18,664.00 H Company VV Accumulation 21,214.00 237,305.50
In order to bring him to 40 per cent of the net assets he would need to receive a further $271,267.50 ($508,573 - $237,305.50). I will provide for the wife to pay that sum. However, as I have indicated, the wife intends to sell the Suburb A property and on that basis I will provide that in default of a payment by the wife, the payment be made out of the proceeds of sale of the Suburb A property.
That would leave the wife with:
Owner Asset / Liability Value W The Suburb W property
(1/12 share)191,666.50 W Savings - CBA Account (BSB No … Account No. #53) 9,792.00 W Savings - CBA Account (BSB No … Account No. #61) 29.00 W Savings – RS Bank Account (Account No. #55) (Balance as at 8 June 2018 is CF2,019.48 ~AUD0.21) 1.00 W Savings – ST Bank Account (ending #01) (Balance as at 24 July 2018 is CE1,267) 1,257.00 W Savings – ST Bank Account (ending #01) (Balance as at 24 July 2018 is CE5,796) 5,751.00 W Savings – ST Bank Account (ending #01) (Balance as at 24 July 2018 is CE1,196) 1,187.00 W Savings – TU Bank account (ending #30) (Balance at 24 July 2018 CE983) 975.00 W I Pte Limited 100,000.00 W Funds to be paid into Mills Oakley trust account 15,000.00 W Country E Tax Authorities (CE15,232.14) -15,153.00 W M (Suburb W property) -100,000.00 W Credit Card – Visa – CBA (Account No. #48) -252.00 W Credit Card – Visa – ST Bank (Account No. ending #82) (balance as at 15 June 2018 is CE938.55~AUD927.64) -928.00 W Credit Card – MasterCard – ST Bank (Account ending #69 – balance at 24 July 2018 CE212) -210.00 W Credit Card – Visa – ST Bank (Account ending #85) (Balance as at 24 July 2018 is CE497) -493.00 W Credit Card – MasterCard – TU Bank (Account ending #00) Account balance at 24 July 2018 CE 10 -10.00 W Credit Card – Visa – TU Bank (Account ending #89) Account balance at 24 July 2018 CE3,725 -3,695.00 W Credit Card – Visa – VW Bank (Account ending #82 – balance at 23 July 2018 CE3,287) -3,260.00 W GG Super (as at May 2018) Accumulation 77,101.00 Balance of the value of Suburb A property 484,100.50 Total 762,859.00
In order to deal with the likelihood that the net proceeds of sale of the Suburb A property will not be precisely $755,368, I will order that the net proceeds of sale be divided in the proportions $484,100.50 : $271,267.50 which I will round out to a division in the proportions 36 per cent to the husband and 64 per cent to the wife. Unless they reach some other agreement, they will need to make arrangements to accommodate the assessment of CGT which will involve some delay.
Obviously, the integrity of the settlement relies on there being no increase in the amount owing on the mortgage secured over the Suburb A property prior to the final payment to the husband.
Conclusion Under Section 79
This was a marriage that spanned more than 15 years and significant contributions were made by each of the parties during that period and since. The wife made the greater contribution, both because of what she had at the commencement of the marriage and her comparatively greater contributions since. An adjustment is required to the husband from an outcome based on contributions alone, particularly because of the contribution outcome and the strength of the wife’s financial position. In my view the orders that I propose will reflect a just and equitable division of their property.
The claims against or affecting the third parties were not successful and as was sought by them, they will be dismissed.
There is some complexity in the operative orders and I will permit the parties to bring the matter back on application made within 21 days or such further time as they may agree.
I certify that the preceding two hundred and sixty-six (266) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 13 November 2018.
Associate:
Date: 13 November 2018
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