Keckwick and Claseby

[2013] FamCA 625

FAMILY COURT OF AUSTRALIA

KECKWICK & CLASEBY [2013] FamCA 625

FAMILY LAW – PROPERTY – Application for property settlement orders – Whether just and equitable to alter property interests and rights – Stanford v Stanford [2012] HCA 52 considered – Where the wife had received several amounts by way of interim or partial property settlement – Where the husband’s initial financial contributions vastly exceeded those of the wife – Where the husband provided for most, if not all, of the financial support for four of the wife’s children from her previous marriage – Where no contributions made by the wife matched the husband’s initial injection of assets into the relationship – Where the disparity in contributions of the parties continued throughout the marriage – Consideration of factors under s 79 and s 75(2) of the Family Law Act 1975 (Cth) – Where the outcome of the assessment of contributions resulted in the husband receiving 87.5 per cent of the assets compared to the wife’s 12.5 per cent – Where an adjustment, pursuant to s 75(2), of 5 per cent in the wife’s favour is appropriate of the net pool of non-superannuation assets.

Family Law Act 1975 (Cth) ss79, 75(2)

Stanford v Stanford [2012] HCA 52
Robb & Robb (1994) 18 Fam LR 489

APPLICANT:  Ms Keckwick

RESPONDENT: Mr Claseby

FILE NUMBER: SYC 4545 of 2007

DATE DELIVERED: 23 August 2013

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Stevenson J

HEARING DATE: 8, 9 April 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Bell

SOLICITOR FOR THE APPLICANT: Dettmann Longworth Lawyers

COUNSEL FOR THE RESPONDENT: Mr O'Loughlin

SOLICITOR FOR THE RESPONDENT: Delaney Lawyers

Orders

1. It is noted that the wife has received the following amounts by way of interim or partial property settlement:

   1.1$40,000 pursuant to consent orders made on 7 August 2007 and

   1.2$30,000 and $170,000 pursuant to consent orders made on 20 December 2007

2. The husband shall pay to the wife a sum of $218,700 within 42 days of the date of these orders.

3. Each of the parties shall do all things and sign all documents necessary to constitute the husband the sole owner of:

   3.1      the money held in the Westpac account in the name of C Pty Limited as trustee for the parties in accordance with orders made on 28 May 2012 and being the net proceeds of sale of the property K Street, Suburb N together with interest accrued thereon

   3.2      the money held in the Westpac Bank account in the name of C Pty Limited as trustee for the parties in accordance with orders made on 28 May 2012, being the net proceeds of sale of the property A Street, Town P together with interest accrued thereon.

4. Each of the parties shall do all things and execute all documents required to constitute the wife the sole owner of the Ford … motor vehicle which is currently in her possession.

5. The trustee of the C Pty Limited Superannuation Fund (“the trustee”), having been accorded procedural fairness, orders 6 to 10 inclusive bind the trustee to observe the requirements of the Family Law Act 1975 (“the Act”) and the Family Law (Superannuation) Regulations 2001.

6. In accordance with 90MT(1)(b) of the Act:

   6.1      the husband is entitled to be paid the specific percentage out of the wife’s interest in the C Pty Limited Superannuation Fund

   6.2      the wife’s entitlement in the C Pty Limited Superannuation Fund is correspondingly reduced by force of this order

   6.3      the specified percentage for the purposes of these orders is 100%.

7. The trustee shall do all such acts and things and sign all documents as may be necessary to:

   7.1 calculate, in accordance with the requirements of the Act and the Family Law (Superannuation) Regulations 2001 the entitlement awarded to the husband in order 10 herein; and

   7.2      pay the entitlement whenever the trustee makes a splittable payment from the wife’s interest in the C Pty Limited Superannuation Fund.

8. Orders 5 and 7 herein shall have effect from the operative time, and the operative time is the beginning of the day upon which these orders are made.

9. After service of the payment split notice in accordance with the Superannuation Industry (Supervision) Regulations 1994 (“the SIS regulations”), the husband shall do all such things and sign all documents as may be necessary, including but not limited to exercising the husband’s request in accordance with the SIS regulations, for the retention of the non-member spouse interest in the husband’s name in the C Pty Limited Superannuation Fund.

10. It is noted that:

    10.1 the value of the non-member spouse interest is calculated in accordance with the SIS regulations; and

    10.2 any payments from the wife’s superannuation interest in the C Pty Limited Superannuation Fund are not splittable payments in accordance with Division 2.2 of the Family Law (Superannuation) Regulations.

11. All material produced on subpoena shall be returned.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 4545 of 2007

Ms Keckwick

Applicant

And

Mr Claseby

Respondent

REASONS FOR JUDGMENT

the proceedings

1. Ms Keckwick (“the wife”) and Mr Claseby (“the husband”) are in dispute as to settlement of property, following the breakdown of their eight-year relationship and marriage.  They began to live together in 1999, married in mid 2001 and separated under one roof on 30 April 2007.  The wife vacated the former matrimonial home in August 2007 and the parties were divorced late in 2008.

2. The applicant wife sought the following orders:

   1)       That all previous orders be discharged.

   2)That the property at [Suburb Y] be sold, free of any encumbrance, and that the wife receive the proceeds of sale after selling expenses.

   3)That the wife receive the net proceeds of the sale of [K Street, Suburb N] which are being held in a Westpac Bank Term Deposit account.

   4)That the wife receive the net proceeds of sale of [A Street, Town P] which are being held in a Westpac Bank Term Deposit Account.

   5)That within seven days the husband repay the money owed to the wife’s superannuation fund, [C] Superannuation Fund (“Wife’s super”), so that the wife’s super in the [C] Superannuation Fund is $101,036 and that upon the said payment being made by the husband, the wife’s super be forthwith transferred to the wife.

   6)That the Ford … motor vehicle be forthwith transferred to the wife, free of any encumbrance.

   7)That otherwise as set out in these orders each party is entitled to all other assets in their respective names, possession, custody and control including shares, superannuation, bank accounts, term deposits, motor vehicles and jewellery.

   8)That save and except as these orders provide to the contrary, each of the parties shall, by this order, mutually release the other from all debts owing from one to the other.

   9)That each party, as against the other, be solely liable for all and any costs, debts, expenses or liabilities.

   10)That in the event that either party refuses or neglects to comply with the provisions of these orders then the Registrar of the Court exercising competent jurisdiction shall be appointed pursuant to s.106A(1) of The Family Law Act 1975 to execute all deeds and documents in the name of the parties and do all acts and things necessary to give validity and operation to the said orders.

   11)That in the event that any monies provided to be paid herein are not paid by the stipulated date or by the expiry of the stipulated time period then such monies as are unpaid shall bear interest at the rate provided for in the Family Law Rules and/or Regulations until such monies are paid.

   12)That the husband pay the wife’s costs.

3. The respondent husband sought the following orders:

   1)That the wife’s Initiating Application filed on 27 June 2007 be dismissed.

   2)That it be noted the wife has received by way of interim or partial property settlement the sum of $40,000 pursuant to orders made by consent in these proceedings on 7 August 2007.

   3)That the sum of $180,000 paid or caused to be paid by the husband to the wife on or about 12 August 2007 pursuant to orders made on 7 August 2007 in these proceedings be categorised as an interim or partial property settlement for the purposes of section 79 of the Act.

   4)That it be noted the wife has received by way of interim or partial property settlement the sum of $30,000 pursuant to orders made by consent in these proceedings on 20 December 2007.

   5)That it be noted the wife has received by way of interim or partial property settlement the sum of $170,000 pursuant to orders made by consent in these proceedings on 20 December 2007.

   6)That the husband be and is hereby declared to be the sole owner to the exclusion of the wife of the whole of the funds being the net proceeds of sale of the husband’s investment unit at [Suburb N] held in the Westpac account in the name of [C] Pty Limited as trustee for [the husband] and [the wife] in accordance with orders made on 28 May 2012.

   7)That the husband be and is hereby declared to be the sole owner to the exclusion of the wife of the whole of the funds being the net proceeds of sale of the husband’s [Town P] property held in the Westpac account in the name of [C] Pty Limited as trustee for [the husband] and [the wife] in accordance with orders made on 28 May 2012.

   8)That consequent upon the making of an order in terms of order 6 and order 7, the husband be at liberty to apply the funds held in the said interest bearing account as he may see fit.

   9)That other than provided for in orders 10 to 15 inclusive, there be no splitting or flagging orders to the intent that each party will retain for their sole use and benefit to the exclusion of the other all of their right, title and interest in any superannuation fund held on their behalf.

   10)That the trustee of the [C] Pty Limited Superannuation Fund (“the trustee”), having been accorded procedural fairness, orders 11 to 15 inclusive bind the trustee to observe the requirements of the Family Law Act 1975 (“the Act”) and the Family Law (Superannuation) Regulations 2001.

   11)That in accordance with 90MT(1)(b) of the Act:

   a)The husband is entitled to be paid the specific percentage out of the wife’s interest in the [C] Pty Limited Superannuation Fund.

   b)The wife’s entitlement in the [C] Pty Limited Superannuation Fund is correspondingly reduced by force of this order.

   c)The specified percentage for the purposes of these orders is 100%.

   12)The trustee do all such acts and things and sign all documents as may be necessary to:

   a)Calculate, in accordance with the requirements of the Act and the Family Law (Superannuation) Regulations 2001 the entitlement awarded to the husband in order 10 herein; and,

   b)Pay the entitlement whenever the trustee makes a splittable payment from the wife’s interest in the [C] Pty Limited Superannuation Fund.

   13)That, orders 10 and 122 (sic) herein have effect from the operative time, and the operative time is the beginning of the day upon which these orders are made.

   14)That, after service of the payment split notice in accordance with the Superannuation Industry (Supervision) Regulations 1994 (“the SIS regulations”), the husband shall do all such things and sign all documents as may be necessary, including but not limited to exercising the husband’s request in accordance with the SIS regulations, for the retention of the non-member spouse interest in the husband’s name in the [C] Pty Limited Superannuation Fund.

   15)That the Court notes:

   a)The value of the non-member spouse interest is calculated in accordance with the SIS regulations; and

   b)Any payments from the wife’s superannuation interest in the [C] Pty Limited Superannuation Fund are not splittable payments in accordance with Division 2.2 of the Family Law (Superannuation) Regulations.

   16)That the husband be and is hereby declared to be the sole owner to the exclusion of the wife, the whole of his right, title and interest in the following assets and/or entities:

   a)His interest in [C] Pty Limited (CAN …);

   b)His interest in [C] Holdings Pty Limited (CAN 001 854 100);

   c)The whole of his entitlement in the [CC] Family Settlement;

   d)The whole of his right, title and interest in the property situated at and known as [Suburb Y], described as the whole of the land contained in certificate of title folio identifier … (the “husband’s [Y] unit”);

   e)All the furniture, furnishings and household contents presently in his use or possession or in respect of which he is the registered proprietor;

   f)All bank accounts held in his name or in respect of which he is shown as an account holder;

   g)All superannuation interests held by him;

   h)All other assets not otherwise specified but which are in the possession for use of the husband or in respect of which he is registered or the acknowledged owner of same.

   17)That the wife be and is hereby declared to be the sole owner to the exclusion of the husband of the whole of her right, title and interest in the following:

   a)The funds received by her and as interim or partial property settlement, and as referred to at order 2 above;

   b)The funds paid by the husband or on his behalf and as referred to at order 3 above;

   c)The funds received by her and as interim or partial property settlement, and as at referred  at order 4 above;

   d)The funds received by her and as interim or partial property settlement, and as referred to at order 5 above;

   e)All the furniture, furnishings and household contents presently in her use or possession or in effect of which she is the registered proprietor;

   f)All bank accounts held in her sole name or in respect of which she is shown as an account holder, save for the accounts referred to at order 6 and order 7;

   g)All superannuation interests held by her other than those referred to at order 9 to 15 above;

   h)All other assets not otherwise specified but which are in the possession for use of the wife or in respect of which she is registered or the acknowledged owner of same.

   18)That the wife be and is hereby declared to be the sole owner to the exclusion of the husband the whole of her right, title and interest in the Ford … motor vehicle … presently in her use and possession (the “wife’s motor vehicle”).

   19)That the husband give all such directions and sign off such documents as may be necessary in his capacity as a director of [C] Pty Limited to transfer to the wife the whole of [C] Pty Limited’s interest in the wife’s motor vehicle.

   20)That the wife pay or cause to be paid to the husband the sum of $9,568.05 being a reimbursement by the wife to the husband in respect of the wife’s share of the costs of the agreed Single Expert Accountant for the report prepared for these proceedings but which costs were paid by the husband pursuant to the orders of 20 December 2010.

   21)That in the event either party refuses or neglects to execute any deed or instrument necessary to give effect to all or any of the orders made herein, the Registrar of the Court be appointed pursuant to section 106A to execute such Deed or instrument in the name of the said party and to do all acts and things necessary to give validity and operation to the said Deed or instrument.

   22)That the wife pay or cause to be paid the husband’s costs of and incidental to these proceedings.

Background

1. The husband was born in 1944 and is now 68 years of age.  He is a financial professional but, for about the last forty years, he has derived his income from investment, share trading and property development.  In recent times, his business ventures have been limited in scope.

2. The wife was born in 1961 and is now 52 years of age.  She is presently employed as a receptionist/sports instructor at the E Sports Centre.  Since 2009 she has completed certificates in real estate, fitness training and small business management.

3. Each of the parties had been married prior to the commencement of their relationship.  The husband was married twice previously and has three children who were adults when the parties began to live together.  The wife had one prior marriage and six children, aged between approximately fifteen and three years, when cohabitation commenced in 1999.

4. All of the wife’s children lived with the parties for about the first year of their cohabitation.  Her two eldest sons then moved to live with their father.  The four younger children lived in the parties’ household throughout the relationship.  The wife’s children are:

   JM born in 1985 (27)

   RM born in 1987 (25)

   OM born in 1989 (24)

   LM born in 1992 (21)

   AM born in 1994 (19)

   BM born in 1990 (17).

5. It was common ground that the wife’s ex-husband, Mr M, made no regular contribution to the financial support of their children during the parties’ relationship.  The wife said in her oral evidence that he “paid child support intermittently”.  She had no paid employment after the parties commenced cohabitation.  Consequently, the husband provided financial support for the four youngest children for the whole of the parties’ eight-year relationship.

6. At the commencement of cohabitation the husband was in the process of completing a property settlement with his second wife, Ms D.  On 8 May 2001 he swore an affidavit verifying a Financial Statement in which he disclosed gross assets to the value of $3,400,000 and liabilities of $3,150,000.  He provided the same information in an Application for Consent Orders.

7. In his affidavit of 9 May 2012 the husband deposed that he owned the following assets at the commencement of the parties’ cohabitation:

1.	Apartment [1 S Street, Suburb Z]	$800,000
2.	Furniture, contents & office equipment	$20,000
3.	Superannuation	$568,000
$1,488,000

This total is incorrect and should be a figure of $1,388,000.  The husband deposed further to his involvement in a number of real estate developments, via corporate entities known as C Pty Limited and X Pty Limited, at the commencement of cohabitation.

1. The husband deposed that he had the following financial resources at the commencement of cohabitation: 

1.	Cash on deposit with Australian Guarantee Corporation Pty Limited, through one or other of my corporate or trust structures	$1,420,000
2.	Potential interest through the [CC] Family Settlement in a development at [Suburb H], through its interest in [R] Pty Limited	$1,580,000
3.	Potential interest through the [CC] Family Settlement in a development property at [Suburb T], through its interest in [V] Pty Limited	$1,135,000
4.	Potential interest through the [CC] Family Settlement in a development of a property at [Suburb O], through its interest in [Q] Pty Limited	$1,214,000
5.	A Mercedes motor vehicle owned by one of my corporate entities	$80,000
6.	Cash at bank (in the name of one of my corporate entities	$32,000
Sub Total:	$5,349,000

This total too is incorrect and the figure should be $5,461,000.  The husband deposed to a mortgage liability of some $14,000 and taxation debts of approximately $435,000 for himself and his corporate entities at the commencement of cohabitation.

1. When the parties began to live together, the wife owned only furniture and a van.  Her uncontradicted evidence was that there was no space in the husband’s apartment for her furniture, which she consequently did not bring into the relationship.

1. On 20 July 2004 the name of C Pty Limited was changed to C Holdings Pty Limited.  X Pty Limited changed its name to C Pty Limited on 15 July 2004.  The husband’s unchallenged evidence was that, on accounting advice, he “restructured my activities so that I was now operating through a corporate rather than a trust structure”.  Previously he had conducted his business activities principally via the CC Family Settlement, of which the trustee was C Pty Limited.

2. The husband deposed that the company C Holdings Pty Limited is trustee “for my various corporate activities”, which are “are conducted through [C] Pty Limited and previously through [G] Pty Limited which is a wholly owned subsidiary of [C] Pty Limited”.  The husband held all issued shares in C Holdings Pty Limited until 31 October 2007, when he effected a transfer to his three children.  The husband and his son SC are the two current directors of C Holdings Pty Limited.

3. For the purposes of these proceedings, the husband freely conceded that he has sole control of the management of C Holdings Pty Limited and all associated entities.  He conducted his case on the basis that the assets of his corporate entities are essentially and effectively his own property. 

4. In February 2000 the husband sold an apartment at 1 Street, Suburb Z for $1,045,000.  He purchased another property in the same building, being 2 S Street, Suburb Z for $2,450,000.  The husband funded this purchase from the sale proceeds of the first apartment, cash available from various development projects and Westpac Bank borrowings.

5. Early in the relationship the husband sold the Suburb Z apartment for $4,320,000 and purchased the former matrimonial home at W Street, Suburb N for approximately $2,650,000.  The surplus sale proceeds were applied to his development projects or retained as savings.  Additionally, the husband paid $140,000 from these sale proceeds into the wife’s account with the C Superannuation Fund.  He borrowed $1,875,000 from the Westpac Bank at the time of the purchase of the W Street property, along with an unspecified additional amount for renovations.  His unchallenged evidence was that he and his corporate entities structured the purchase in this manner in order to “maximise my income tax deductions”. 

6. In November 2007 the W Street property was sold for $2,780,000.  On 21 December 2007 the parties agreed to interim orders which provided, inter alia, that the wife receive $170,000 from the sale proceeds.  These orders further provided that the husband pay to the wife a sum of $30,000 by 21 December 2007.  The orders also provided for the balance of the sale proceeds to be made available to the husband so that he could complete the purchase of an apartment at Suburb Y.  There was specific provision that these payments to the wife were made by way of “interim and/or partial property settlement”. 

7. In December 2007 the husband completed the purchase of the apartment at Suburb Y for a sum of $1,560,000.  His Financial Statement of 28 March 2013 referred to a Westpac mortgage loan of $1,281,877 secured on the title to this property “to fund the financial activities of the [C] Group”. 

8. In 2002 a property at Central Coast Town P was purchased for $670,000 by C Pty Limited as trustee for the CCC Unit Trust.  The purchase was funded by a Westpac Bank advance of $504,000 and a second mortgage loan from the wife’s parents, Mr and Mrs KK.  Although there was some dispute about the amount of their initial advance, it was common ground that, after a further transaction involving $10,000, the wife’s parents provided $180,000 for the purchase of the Central Coast property. 

9. These two mortgage advances were taken out in the name of the wife and guaranteed personally by the husband.  The arrangement was that the wife’s parents occupied the property at a nominal rental of $1,343 per month, which was offset by non-payment of interest on their loan to the wife of $180,000.

10. In his affidavit the husband explained why the purchase of the Central Coast property was structured in this way as follows:

    78…At the time it was commercially prudent for land tax purposes to have the property held other than in my sole name.  For this reason, I had the property purchased by [C] Pty Limited as trustee for the [CCC] Unit Trust which was formed specifically for this purpose.

11. Following the separation there was dispute between the parties over the sale of the Central Coast property.  The husband consistently expressed a strong wish to dispose of the Central Coast property but the wife refused to agree to the sale until 28 May 2012.  The parties then agreed to interim orders for the sale of this property and investment of the proceeds, pending resolution of these proceedings.  The wife agreed to a sale only when the mortgagee moved to exercise its power of sale.

12. The interim orders of 28 May 2012 provided that the proceeds of sale of the Central Coast Town P property be “invested in an interest-bearing account in the name of the parties on behalf of [C] Pty Limited as trustee for the [CCC] Trust, pending further order of the court”.  At the time of trial, the amount so invested was $303,877.

13. After the wife’s father died in 2007, her mother wished to move from the Central Coast property to a retirement village.  She thus called for repayment of the sum of $180,000 secured by second mortgage on the title to the Central Coast property.

14. On 7 August 2007 the parties consented to interim orders which provided, inter alia, that the husband pay a sum of $180,000 to the wife’s mother by 12 August 2007.  These orders contained the following notations: 

    Notations

    1.The Husband asserts the payment of the sum of $180,000.00 to the mother of the Wife by the Husband is by way of interim property settlement.

    2.The Wife wishes to leave the question of the categorisation of the payment to the Trial Judge and asserts that it is a joint debt of the parties.

    3.The Wife hereby directs the Husband to make the payment to [the wife’s mother] for the purpose of her buying a unit … on the Central Coast for occupation by the mother of the Wife…

15. The Central Coast property was then leased to a tenant for $250 and later $350 per week.  The mortgage repayments amounted to $730 per week, with the shortfall being met by the husband pursuant to his personal guarantee.  In November 2011 he advised Westpac Bank that he could no longer afford to service the mortgage.  A default notice issued on 16 April 2012 and, as noted, the parties consented to a sale of this property on 28 May 2012.

16. The orders of 7 August 2007 provided that the wife vacate the former matrimonial home within 21 days and that the husband pay to her a sum of $40,000 by 14 August 2007.  This payment was categorised in the orders as “interim property settlement”.  The sale of the former matrimonial home was then completed in November 2007.    

17. The orders of 28 May 2012 made provision for the investment of the sale proceeds of a property at K Street, Suburb N.  In summary these sale proceeds were to be invested as follows:

    ·    $50,000 in an interest-bearing account in the joint names of the husband and wife, pending further order

    ·    50% of the balance to the Westpac Bank in relation to the loan secured by mortgage on the title to the property Suburb Y

    ·    the remainder in an interest-bearing account in the joint names of the parties.

    In an email dated 29 June 2012 (annexure AA to the wife’s affidavit) the husband’s solicitor advised the wife’s lawyer that a total of $139,968 had been lodged in an account in the name of C Holdings Pty Limited as trustee for the husband and the wife.

18. The husband and/or his corporate entities hold a 20 per cent interest in a property in southern Queensland, in which the major investor is AMP Corporation.  The National Australia Bank loaned approximately $10,000,000 for this property and has now exercised its mortgagee power of sale.  The husband’s unchallenged evidence was that in August 2011 the investors commissioned a valuation of this development, which yielded a figure of $7,750,000.  The husband gave uncontradicted evidence that he and/or his corporate entities have lost some $3,000,000 on this project.

APPROACH TO THESE PROCEEDINGS

1. In Stanford v Stanford [2012] HCA 52 the majority of the High Court of Australia held as follows:(paragraph 35)

   It will be recalled that s 79(2) provides that “[t]he 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”. Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under this section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.

1. Their Honours further observed as follows:

   In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by apply s 79(4).

2. I have no hesitation in finding that it is just and equitable that an order be made for alteration of property interests.  In these proceedings for the following reasons:

   ·each of the parties sought orders which alter their existing property interests

   ·the parties terminated their relationship approximately six years ago but retain financial connections, which cannot be severed unless there are orders for alteration of property interests.

3. With respect to the second reason I am mindful particularly that some $447,022 is held in a joint account or on trust for the parties jointly.  I set out below a table of the parties’ assets, liabilities and financial resources after having made findings as to certain disputes.  This table indicates the ownership of the assets.  As will be see, there are no financial resources and my findings are that no liabilities should be included in the balance sheet for present purposes.

THE ASSETS, LIABILITIES AND FINANCIAL RESOURCES

1. The balance sheet submitted on behalf of the wife read as follows: 

   WIFE’S BALANCE SHEET – 4 April 2013  

Assets	Owned	W	H
1	Net proceeds of sale of [K Street, Suburb N] held in term deposit with Westpac Bank	Joint	143,145	143,145
2	[Suburb Y property]	Husband	1,800,000	1,700,000
3	Cash in Bank Westpac	Husband	NK	7,500
4	[C] Holdings Pty Ltd	Husband	-	-
5	[C] Pty Ltd	Husband	359,682	-
6	Net proceeds of sale at [Town P] held in term deposit with Westpac Bank	Joint	303,877	303,877
7	[CC] Family Settlement	Husband	-	-
8	[G] Pty Ltd	Husband	944,267	-
9	Household Contents	Husband	10,000	10,000
10	[Sports] Stadium Membership x 2	Husband	2,500	2,500
11	Share Portfolio (H)	Husband	NK	-
12	Loan from [CC] Family Settlement	Husband	379,963	-
15	Cash in Bank	Wife	113	-
17	Furniture – Wife	Wife	2,000	-
18	Furniture – Husband	Husband	10,000	10,000
19	Gross Assets	3,955,547	2,177,022
Add-backs
20	Cash payment to wife – 12 Aug07	Wife	-	180,000
21	Cash payment to wife – 12 Aug07	Wife	-	40,000
22	Cash payment to wife – 21 Dec07	Wife	-	30,000
23	Cash payment to wife – 16 Jan08	Wife	-	170,000
24	Paid Legals – Husband	Husband	NK	TBA
25	Paid Legals – Wife	Wife	-	TBA
26	Payment asserted by husband to wife	Wife	-	7,188
27	Payments asserted by husband for expert costs	Husband	-	9,568
28	Monies withdrawn by the Husband from the [Town P] mortgage for his own benefit on 30 April 2007	Husband	502,796
29	Gross Add-Backs	$502,796	$436,756
Liabilities
31	Westpac – Mortgage [Y property]	Husband	11,977	11,977
33	Loan payable to [CC] Family Settlement	Wife	-	284,184
36	Debt to [RR]	Wife	8,000	-
44	CGT Estimate for [Town P] Property	Joint	20,000	20,000
45	Mastercard – Husband	Husband	-	6,844
46	Mastercard – Wife	Wife	2,500	-
47	Gross Liabilities	42,477	323,005
Superannuation
48	[C] Super (H)	Husband	$73,263	$73,263
49	[C] Super (W)	Wife	$73,263	$73,263
50	BT Super	Wife	$5,230
$151,756	$146,526
52	Gross Assets	$3,955,547	$2,177,022
53	Gross Liabilities	$42,477	$323,005
54	Nett Assets before Superannuation	$3,913,070	$1,854,017
55	Gross Superannuation	$151,756	$146,526
56	Nett assets and superannuation	$4,064,826	$2,000,543
57	Add-Backs	$502,796	$436,756
58	Nett assets and superannuation and add-backs	$4,567,622	$2,437,299

1. On the final day of the trial, I was provided with the following balance sheet on behalf of the husband: 

Ownership 33.		Description		Wife’s Value	Husband’s Value
ASSETS
1.	H	Net proceeds of sale of [K Street, Suburb N] NSW		143,145
2.	H	[Suburb Y] NSW		1,800,000	1,700,000
3.	H	Westpac Banking Corporation		7,500
4.	H	[C] Holdings Pty Limited		Nil
5.	H	[C] Pty Limited		Nil
6.	J	Proceeds of sale of [Town P] on deposit		303,877
7.	H	[CC] Family Settlement		Nil
8.	H	[G] Pty Limited		Nil
9.	H	Household Contents		10,000
10.	H	… Stadium Memberships x 2		2,500
11.	W	… Stadium Membership		1,250
12.	W	Household Contents		2,000
13.
Total		$2,168,272
ADDBACKS
14.	W	Cash payment to Wife by Husband on 12/8/07		180,000
15.	W	Cash payment to Wife by Husband on 12/8/07		40,000
16.	W	Cash payment to Wife by Husband on 21/12/07		30,000
17.	W	Cash payment to Wife by Husband on 16/1/08		170,000
18.	W	Ford …		32,380
19.	W	Toyota …		5,000
20.	W	Payment made for Wife’s benefit by the Husband between 8/5/07 to 11/05/09		7,188
21.	W	Wife’s expenses in respect of accounting and valuation fees paid by the Husband for the purpose of these proceedings (50% share)		9,568
22.	W	Interest on Westpac $504,000 loan		150,179
Total		$624,315
LIABILITIES
23.	W	Loan Payable to [CC] Family Settlement by [the wife]		284,184
24.	W	Loan Payable to [CCC] Unit Trust by [the wife]		49,545
25.	H	Outstanding Legal Fees		25,440
26.	W	[RR]		8,000
27.	W	Mastercard		1,000
28.	W	Outstanding legal fees (billed and unbilled) (as at 5 September 2012)		22,000
29.	W	School fees		700
30.	H	Loan payable by [the husband] to [CC] Family Settlement		244,059
Total		$617,788
SUPERANNUATION
Member		Name of Fund	Type of Interest	Wife’s value	Husband’s value
31.	H	[C] Superannuation Fund	[Husband]	74,428
32.	W	[C] Superannuation Fund	[Wife]	74,428
33.	W	BT Super for Life		3,861
Total		$3,861	$148,856
FINANCIAL RESOURCES
Ownership		Description		Wife/de facto partner’s value	Husband/de facto partner’s value
34.
Total		$	$

The Assets

1. The parties thus agreed as to the identity and value of the following assets: 

Non-Superannuation Assets

1.	Net sale proceeds of property [K Street, Suburb N] (W)	$143,145
2.	Net sale proceeds of property [A Street, Town P] (J)	$303,877
3.	Westpac Bank savings (H)	$7,500
4.	Household contents (H)	$10,000
5.	Household contents (W)	$2,000
6.	2 sports Stadium memberships (H)	$2,500
7.	C Holdings Pty Limited	Nil
8.	CC Family Settlement	Nil

1. There was dispute as to the value of the following assets or entities:

1.	Suburb Y property
2.	C Pty Limited
3.	G Pty Limited
4.	Share Portfolio
5.	Loan to Husband from CC Family Settlement
6.	Wife’s Bank Savings
7.	Husband’s Furniture

1. In closing submissions the husband’s counsel appropriately conceded that the value of the Suburb Y property must be found to be $1,800,000, rather than $1,700,000 as had been asserted his balance sheet.  A single expert, Mr LL, assessed the value of this property at $1,800,000 and his report of 4 May 2011 was tendered by consent.  Accordingly, I find that the Suburb Y property has a value of $1,800,000.  The husband is the registered proprietor of this property.

2. In her Financial Statement of 4 April 2013 the wife disclosed that she holds a Westpac savings account with a balance of $113.  On the basis of this admission against interest, I will include these savings as an asset of the wife in the list of assets.

3. The wife established no basis for inclusion as assets of the husband both “household contents of $10,000” and “furniture to the value of $10,000”, as was asserted in her balance sheet.  The only relevant evidence was the husband’s admission against interest in his Financial Statement of 28 March 2013, where he disclosed “household contents” to the value of $10,000.  These items will be included in the balance sheet as the husband’s asset at a value of $10,000.

4. The balance sheet submitted on behalf of the wife asserted that the husband holds shares personally.  There was no evidence whatsoever to support that allegation.  I have referred to the husband’s evidence as to the shares which were previously held by the trustee of the C Superannuation Fund.

5. In his report of 25 November 2011 the single expert, Mr GN, valued the parties’ interests in the following entities:

1.	C Pty Limited
2.	C Holdings Pty Limited
3.	CCC Unit Trust
4.	CC Family Settlement
5.	C Superannuation Fund
6.	G Pty Limited

Mr GN was not required for cross-examination and his report consequently was received into evidence on an unchallenged basis.

1. Mr GN tabulated the values of the parties’ interests in these entities as follows: 

Total $	Husband $	Wife $
CC Family Settlement	Nil	-	-
C Pty Limited	Nil	-	-
CCC Trust	860,000	-	860,000
C Superannuation Fund	1,152,447	1,045,199	101,036
G Pty Limited	944,267	N/A	N/A
C Holdings Pty Limited	Nil	-	-
Total value of equity interests	$1,045,199	$961,036
Add/(less) related party loans -loan payable to CC Family Settlement by the Wife -loan payable by CC Family Settlement to the Husband		- 379,963	(284,184)
Net value of equity and loans		$1,425,162	$676,852

1. Neither party sought to maintain Mr GN’s valuation of the CCC Unit Trust at $860,000 or any other figure.  They each included in the list of assets the net proceeds of sale of the Town P property in an amount of $303,877.  The reality is that the property’s sale has rendered otiose the structures put in place by the husband on its acquisition.  I have set out above the current ownership of these funds.

1. Despite Mr GN’s nil assessment, the wife sought to attribute a value of $359,682 to C Pty Limited.  A note to her balance sheet read: 

   See single expert report of … dated 25 November 2011 at page 17.  The loan to [the wife] is incorrect so that the sum of $284,184 and $43,110 needs to be added back.  Further the motor vehicle driven by the Husband is a … Mercedes Benz …, the highest red book value of which is $56,000 and the Husband also has a … Toyota …, the highest red book value of which is $9,000 and the Wife drives a … Ford …, the highest red book value of which is $10,800 (the vehicles have been valued at $43,412) so the additional value is $23,388 plus $284,184 plus $43,110 = $359,682.

2. No evidence of the value of the motor vehicles was adduced in the case for the wife.  No explanation was advanced for the proposition that “the loan to [the wife] is incorrect”.  I am not persuaded that Mr GN’s opinion is erroneous and I find that the value of C Pty Limited is nil.

3. Mr GN’s report described the ownership of the two issued shares in this company as follows:

   [C] Pty Limited was incorporated on 12 October 1977 ….  The ASIC company search dated 13 July 2011 discloses the Husband as the sole director.  [C] Holdings Pty Limited holds both shares issued by the company.  One share is held beneficially, the other is held on behalf of the [CC] Family Settlement.  I have been informed that the share recorded as being held beneficially by [C] Holdings Pty Limited should be treated as being held in Trust.  This share was transferred from the Husband on 31 May 1996 to be held in trust by [C] Holdings for the [CC] Family Settlement.

4. The husband asserted that G Pty Limited has a nil value, whereas the wife contended for a figure of $944,267.  That amount was calculated by Mr GN on the following basis: 

   Valuation of G Pty Limited

   On the basis of financial statements as at 30 June 2011

As disclosed in the financial statements $	Adjustments $	Valuation $
Current assets
Loan to the [CC] Family Settlement	772,086	-	772,086
Loan to [C] Pty Ltd	457,523	(285,342)	-
Provision for diminution in value	(1,134,840)	1,134,840	172,181
Total current assets	94,769	849,498	944,267
Total assets	94,769	849,498	944,267
Total liabilities	-	-	-
Net assets	94,769	849,498	944,267
Say,	944,267

1. In his affidavit the husband set out this basis for his contention that G Pty Limited as a nil value:

   200.  As part of my overall corporate structure, I purchased a shelf company called [G] Pty Limited, which had been incorporated on 26 June 1976 and used as the vehicle to purchase a pine forest … on the NSW mid north coast.  The pine forest burnt down as a result of a bushfire and the pine plantation itself was subsequently sold about thirty (30) years ago.  [G] Pty Limited has been a non operating company since that time but remains as part of my corporate structure.  It is addressed in the [TH Firm] Single Expert’s Report prepared for the purposes of these proceedings.

   201.   [G] Pty Limited has minimal, if any, value.  As at 30 June 2011, [G] Pty Limited’s only assets were a loan of $772,085.00 (which I believe Mr [GN] wrongly states to be $722,085.00 at page 33 of his Report), which loan was receivable from [CC] Family Settlement, as well as a further loan of $457,523.00 receivable from [C] Pty Limited.  Notwithstanding these figures, I believe [G] Pty Limited has no value, as [G] is a wholly owned subsidiary of [C] Pty Limited and [C] Pty Limited is a wholly owned subsidiary of [C] Holdings Pty Limited, which is the Trustee of the [CC] Family Settlement.  In the Financial Statements for [G] Pty Limited, prepared as at 30 June 2011, both loans referred to above were written down as being effectively unrecoverable.  Accordingly, the only equity left in [G] Pty Limited is some $94,768.00, which is the difference between the loans referred to above and the provision for diminution in value of $1,134,840.00.

   202.   I believe the reference in the Schedule to Mr [GN’s] Report as to the value attributed to [G] Pty Limited of some $944,267.00 needs to be read in conjunction with his comments in Appendix H to his Report, whereby he states ‘I have attributed 100% of this value to the [CC] Family Settlement’.  [CC] Family Settlement is assessed by Mr [GN]to have $Nil value, after taking into account the position with respect to [G] Pty Limited.

2. In a written aide to his final submissions, counsel for the husband set out this basis for a finding that G Pty Limited has a nil value:

$944,267.00 Wife says this represents the value of [G] Pty Ltd as set out in the report at 33 which it does but it does not set out the debts.  Reference needs to be made to the report and to the valuation in it of the valuation of the [CC] Family Settlement

[CC] Family Settlement Trust (value nil)

Trustee is [C] Holdings Pty Ltd.  Major assets are loans to [C Pty Ltd].  It is funded by loans from the husband and [G Pty Ltd].  Value is nil.  It owes husband $1,452,005 which is reduced to $379,963.  This debt is said by the wife to be an asset of the husband which should be added to the pool.

Two of its assets consist of debts by the wife of $284,184 and to the [CCC] Trust of $49,545.  These are said by the wife to constitute in part the value of [C] Pty Ltd. She also says that she does not owe the debt of $284,184.  The debt of $49,545 is a debt to the [CCC] Family Trust.

1. It seems appropriate to me to have regard to the current commercial reality of the husband’s corporate structures when an assessment is made of the value of G Pty Limited.  In this context, it is significant that Mr GN added this note to his valuation of G Pty Limited (report page 2):

   the value of this entity is included in the valuation of the [CC] Family Settlement at Appendix D.

   He opined:(report page 18)

   The [CC] Family Settlement owns all of the shares in [G] Pty Limited and owes $772,086 to [G] Pty Limited.  Therefore the loan payable to [G] Pty Limited is effectively an amount which the [CC] Family Settlement owes back to itself.

   Mr GN ascribed a nil value to the CC Family Settlement, noting that “its major assets are its loans to [C Pty Ltd]”.  It is funded by a bank loan and loans from the husband and G Pty Limited. 

2. Mr GN further observed: (at page 16) 

   I note that there is a loan owing from the [CC] Family Settlement to the Husband of $1,452,005.  However, as the [CC] Family Settlement does not have the capacity to repay this loan in full, I have reduced the loan to the extent that it is recoverable, being $379,963.

3. The wife sought to include this loan of $379,963 in the balance sheet as an asset of the husband.  Mr GN set out the assets of CC Family Settlement as follows (report page 17):

Schedule D1
Valuation of [CC] Family Settlement
On the basis of financial statements as at 30 June 2011
As disclosed in the financial statements	Adjustments	Notes	Valuation
$	$	$
Non-current assets
Loan to [C Pty Ltd]		3,077,555	(1,919,370)	(1)	1,158,185
Diminution in value of loan to [C Pty Ltd]		(1,727,000)	1,727,000	(1)	-
Loan to [CCC] Trust		43,110	-	(2)	43,110
Loan to Wife		284,184	-	(3)	284,184
Shares in [G] Pty Limited		93,000	851,267	(4)	944,267
Shares in [C Pty Ltd]		2	(2)	(5)	-
Motor vehicles		43,412	-	(6)	43,412
Total non-current assets		1,814,263	658,895	2,473,158
Total assets		1,814,263	658,895	2,473,158

1. Most of these assets are in the form of unrealisable shares and loans.  The only tangible assets in this list were motor vehicles to the written-down value of $43,412.  In any realistic sense, therefore, it is impossible to point to any asset of the CC Family Settlement which could be realised to meet the debt owed to the husband.  Accordingly, I will not include this amount in the list of assets.

2. As to the nil valuation of C Pty Limited, Mr GN opined (report page 20):

   The company is funded by a bank loan of approximately $1.98 million, a loan from the [CC] Family Settlement of approximately $3.08 million and a loan from [G] Pty Limited of $0.46 million.  Given the company’s net asset deficiency as at 30 June 2011, it is unlikely that the loans made by related entities [G] Pty Limited and the [CC] Family Settlement will be repaid in full.

3. The reality thus appears to be that the accounting records of the husband’s corporate entities have interlinked loans but lack assets of substance.  As noted, Mr GN was at pains to point out that his $944,267 value of the CC Family Settlement.  For these reasons, I find the value of G Pty Limited to be nil.

4. Mr GN outlined the ownership of G Pty Limited as follows in his report: (at page 33)

   [G] Pty Limited (“[G]”) was incorporated on 26 June 1976.  The ASIC company search dated 13 July 2011 discloses the Husband as sole director.  All of the company’s 90,000 shares are held by [C] Holdings Pty Limited.  One is recorded as being held beneficially and the other 89,999 are held on behalf of the [CC] Family Settlement.  For the purpose of my report, I have assumed that all of the shares in [G] Pty Limited are held by the [CC] Family Settlement.

Alleged Add-Backs

1. The husband asserted that the following payments to the wife should be added back to the list of assets and treated as premature distributions in her favour:

   12 August 2007                   $180,000

   12 August 2007                   $40,000

   21 December 2007              $30,000

   16 January 2008                  $170,000.

   The consent interim orders of 12 August 2007 and 20 December 2007 specifically categorised the payments of $40,000, $30,000 and $170,000 as “interim property settlement” and “interim and/or partial property settlement”. 

2. It seemed that the wife raised no real issue that the sums totalling $240,000 being $40,000 paid to her pursuant to orders of 7 August 2007 and $30,000 and $170,000 pursuant to orders of 20 December 2007 should be added back to the list of assets.  The notations contained in the consent orders of 12 August 2007 and 20 December 2007 appear to indicate clearly that such was the intention of both parties and accordingly I will include these sums in the list of assets.  These sums are assets of the wife.

3. There was a dispute as to characterisation of the payment of $180,000 to the wife’s mother on 12 August 2007.  The consent orders of that date contained the following notations:

   1.The husband asserts the payment of the sum of $180,000 to the mother of the wife by the husband by way of interim property settlement.

   2.   The wife wishes to leave the question of the categorisation and the payment to the trial judge and asserts that it is a joint debt of the parties.

   3.   The wife hereby directs the husband to make the payment to [the wife’s mother] for the purpose of her buying a unit … on the Central Coast.

4. The reality is that the wife received no personal benefit from the husband’s payment to her mother of the amount of $180,000.  This money came initially from her parents’ savings.  Notionally, these funds were loaned to the wife to fund the purchase of the Central Coast property in the name of the CCC Unit Trust in accordance with a scheme devised by the husband.

5. In his affidavit the husband deposed:

   76.      During the course of the marriage I was responsible for the establishment of the [CCC] Unit Trust.  I gave instructions to …, my Chartered Accountants, to create that entity after receiving advices from them to that effect in relation to the minimisation of land tax for myself and my group of companies.  At the time I owned what was the former matrimonial home in [Suburb N] in my own name.  I also owned an investment property at [K Street, Suburb N] which I still own.  Accordingly, my exposure to land tax at that time was likely to be high and it was not prudent for me to be holding any further real estate, either in my sole name or in the name of the companies with which I was then associated.  In addition, any property held by companies had potential for capital gains tax, without prospect of any rebate.  A trust structure not associated with me did allow that prospect.

6. The husband thus arranged the purchase of the Central Coast property in this manner to secure a financial benefit for himself.  I accept that he wished to assist the wife’s parents to move closer to Sydney and that he entertained plans for a future subdivision of this property. 

7. On behalf of the husband it was submitted that he discharged a debt of the wife when he made a payment of $180,000 to her mother.  It was contended that this sum should thus be treated as a payment to the wife by way of interim property settlement.

8. Technically, it is correct that the wife’s parents loaned $180,000 to her when the CCC Unit Trust purchased the Central Coast property and the husband repaid this sum to her mother pursuant to consent orders made on 7 August 2007.  In my view, however, this payment should be characterised having regard to the reality of the transactions involving the Central Coast property.

9. This reality is that the husband arranged these transactions for his own financial benefit.  The wife derived no advantage from the creation of the CCC Unit Trust and her position as mortgagor to her parents and the Westpac Bank and her parents.  The wife’s unchallenged evidence and the notation to the consent orders of 7 August 2007 make it clear that these funds were required to enable the wife’s mother to secure accommodation in a retirement village following the death of her husband.

10. The fact is that the husband returned to the wife’s mother a sum of $180,000 which was originally the property of herself and her husband.  The parties retained the Central Coast property and the net proceeds of sale thereof form part of the matrimonial pool.  In these circumstances, I am not prepared to characterise the husband’s payment of $180,000 to the wife’s mother as an asset which was prematurely distributed to the wife.

11. The husband sought to add back to the list of assets the supposed value of two motor vehicles, being a Ford in the possession of the wife and a Toyota once used by her son OM.  The husband maintained that he allowed OM to use the Toyota, on the basis of an agreement that he would purchase the vehicle for $5,000.  According to the husband, OM returned the Toyota to him in a “worthless state”.  The Ford and the Toyota are owned by C Pty Limited and C Holdings Pty Limited respectively.

12. The husband sought to assign values of $32,380 and $5,000 to the Ford and Toyota motor vehicles respectively.  There was no evidentiary basis for this submission, which I reject accordingly.

13. The husband further sought to add back as an asset the sum of $7,188 which he described in his balance sheet as “payment made for the wife’s benefit by the husband between 8/5/07 to 11/5/09”.  These payments were identified in annexure A to the husband’s affidavit of 9 May 2012 and consisted of mobile telephone bills and expenses for the Ford and Toyota motor vehicles. 

14. These mobile telephone expenses arose pursuant to a two year contract with Telstra taken out by C Pty Limited for the benefit of the wife, shortly prior to the separation. According to the husband, the company was obliged to pay these bills because the wife refused to do so. It seems to me to be preferable to take these post-separation payments for the benefit of the wife into account pursuant to section 75(2)(o) rather than to add back as an asset the total sum.

15. The husband further sought to add back to the list of assets an amount of $9,568 which he described in his balance sheet as “wife’s expenses in respect the accounting and valuation fees paid by the husband for the purpose of these proceedings (50% share).”   The husband included this figure in a note to his Financial Statement of 28 March 2013 but adduced no further evidence on this matter.  With so little information, I am not prepared to add back this amount as an asset. 

16. The husband further sought to add back as an asset and treat as a premature distribution to the wife an amount of $150,179 which he described in his balance sheet as “interest on Westpac $504,000 loan”.  This liability was incurred when the Central Coast property was purchased by the CCC Unit Trust and personally guaranteed by the husband.  He contended that he calculated this figure in accordance with exhibit 6.  The schedule to his balance sheet stated “This amount represents interest paid from the time of the separation until the property was sold.  Interest prior to separation on this loan is included in the loan payable to [CC] Family Settlement by [the wife] of $284,184.”

17. In his affidavit of 9 May 2012 the husband set out the following table of movements in the Westpac Bank mortgage debt relating to the Central Coast property: 

Date	Transaction	Amount Advanced from Bank	Amount Returned to Bank
02.08.02	Advance	$504,000.00
04.03.03	Loan from [C] Holdings Pty Limited	$500,000.00
27.03.03	Loan to [C] Holdings Pty Limited	$500,000.00
16.05.03	Loan from [C] Holdings Pty Limited	$500,000.00
21.05.03	Loan to [C] Holdings Pty Limited	$500,000.00
25.06.03	Loan from [C] Holdings Pty Limited	$200,000.00
26.06.03	Loan from [C] Holdings Pty Limited	$100,000.00
10.11.03	Deposit by [C] Holdings Pty Limited	$150,000.00
22.01.04	Deposit by [C] Holdings Pty Limited	$50,000.00
16.06.04	Loan to [C] Holdings Pty Limited	$500,000.00
12.08.04	Loan from [C] Holdings Pty Limited	$3,000.00
05.04.07	Various interest charges	$1,203.96
30.04.07	Loan to [C] Holdings Pty Limited	$502,709.04
Closing Balance		$504,000.00

1. The husband gave this explanation for these fluctuations in the level of the Westpac mortgage debts: 

   86.  Following the purchase of the [Central Coast] property, the mortgage with Westpac was paid down over time in the normal course of business at my direction through [C] Pty Limited.  The original source of the monies for these repayments were provided by one or other of my group of companies as circumstances dictated.

2. The wife annexed to her affidavit a copy of a bank statement which showed a drawdown on the mortgage account of $502,796 on 30 April 2007.  The husband styled this drawdown “loan to [C] Holdings Pty Limited” in the above table.  Exhibit 6 shows that a substantial portion of the interest on the Westpac Bank loan accrued after the husband drew down this sum on the mortgage account.  In round figures, some $125,000 in interest accrued on this loan after the husband made this drawdown and advanced the money to C Holdings Pty Limited.

3. The evidence did not reveal how C Holdings Pty Limited applied this sum of $502,796.  The husband had sole control of the fate of these funds, which were drawn down entirely at his discretion.  The husband did not demonstrate any necessity for these funds ever to have been withdrawn from the mortgage account.  In these circumstances, I am not prepared to treat any amount of mortgage interest as a notional asset.

4. On the other hand, the wife refused to consent to the sale of the Central Coast property for some five years following the separation. Her parents ceased to occupy the premises after the death of her father in mid 2007. Solicitors’ correspondence annexed to the affidavit of the husband indicated that the wife’s lawyer justified her opposition to the sale on the basis that she sought a transfer of the Central Coast property to her as part of the overall settlement. That application was not pursued at trial and the wife agreed to the sale only after the Westpac Bank as mortgagee exercised its power of sale. I will consider pursuant to section 75(2)(o) the significance of the wife’s opposition to the sale for such a lengthy period and the financial consequences thereof to the husband.

1. The wife sought to add back to the list of assets the sum of $502,796 which the husband drew down on the Westpac Bank mortgage account.  As noted, the evidence did not reveal how C Holdings Pty Limited applied these funds.  The husband continued his business ventures for some time after he withdrew these funds.  In my view, it is problematic in these circumstances for any part of this amount to be added back to the list of assets.

Superannuation Assets

1. It was common ground that each of the parties has an account in the C Superannuation Fund, to which the husband and wife assigned values of $74,428 and $73,263 respectively.  Neither of the parties adopted Mr GN’s valuation of their interests at $1,045,199 and $101,036 for the husband and wife respectively. 

2. In a note to his Financial Statement of 28 March 2013 the husband deposed:

   In 2011/2012 the husband sold all of the shares in public listed companies held by [C] Pty Limited and [C] Holdings Pty Limited in its capacity as Trustee of the [C] Pty Limited Superannuation Fund.

   There was no challenge to this evidence, which I regard as plausible in light of the husband’s contention that he encountered difficulties during the Global Financial Crisis.

3. The husband has control of the superannuation fund and he managed the sale of his shares.  I consider it more probable than not that he has greater knowledge than does the wife of the present balances of the parties’ accounts.  I find that each party has a benefit to the value of $74,428 in the C Superannuation Fund.

4. I reject the submission on behalf of the husband, because he deposited all of the money into the wife’s account with the C Superannuation Fund, that benefit is his asset.  In my view, that circumstance goes to the respective contributions of the parties, rather than their ownership of assets.

5. It was common ground that the wife holds a benefit with BT Super for Life, to which she and the husband attributed values of $5,230 and $3,861 respectively.  In accordance with the admission against interest contained in her Financial Statement of 4 April 2013, I find that the wife has a BT Super for Life benefit to the value of $5,230.

6. I find that the assets of the parties are as follows, omitting from the list those entities which have a nil value:

Non-Superannuation Assets
1.	Net proceeds of sale of property K Street, Suburb N (J)	$143,145
2.	Net proceeds of sale of property A Street, Town P (J)	$303,877
3.	Suburb Y property (H)	$1,800,000
4.	Westpac Bank Savings (H)	$7,500
5.	Westpac Bank Savings (W)	$113
6.	Household Contents (H)	$10,000
7.	Household Contents (W)	$2,000
8.	2 sports Stadium Memberships (H)	$2,500
9.	Payment made to the wife pursuant to interim orders of 12 August 2007 (W)	$40,000
10.	Payment made to the wife pursuant to interim orders of 21 December 2007 (W)	$30,000
11.	Payment made to the wife pursuant to interim orders of 21 December 2007 (W)	$170,000
$2,509,135
Superannuation Assets
9.	Interest in C Superannuation Fund (H)	$74,428
10.	Interest in C Superannuation Fund (W)	$74,428
11.	Interest in BT for Life Superannuation Fund (W)	$5,230
$154,086
Total:	$2,663,221

Ownership of these assets in the above table is indicated by “H” for the     husband; “W” for the wife and “J” for the parties jointly.

Liabilities

1. The husband sought to include in the balance sheet the following alleged liabilities:

1.	Loan payable to CC Family Settlement by the wife	$284,184
2.	Loan payable to CCC Unit Trust by the wife	$49,545

These liabilities arose when the husband arranged the purchase of the Central Coast property by the CCC Unit Trust.

1. The Central Coast property has now been sold and the net proceeds included in the list of assets.  In my view it is highly unlikely that these debts will ever be repaid, as they came into existence within a scheme which the husband created for his financial benefit.  I take the view that there is an artificiality about these debts which resembles the assets which the wife contended were to be found within the husband’s corporate structure.  I consider that it would be a contrivance for these amounts to be included as liabilities of the wife in the balance sheet.

2. The husband sought to include as liabilities his outstanding legal fees of $25,440.  By letter dated 7 April 2013 the wife’s solicitor informed her that she will have incurred approximately $91,000 in unpaid legal costs at the conclusion of the trial.  I see no justification for the inclusion of the husband’s unpaid legal fees, and the omission of those of the wife, in the list of liabilities.  Accordingly I will exclude the outstanding legal fees of each of the parties from the list of assets.

3. The wife sought to include as a liability the sum of $8,000 in unpaid rental due to Mr RR.  The wife described Mr RR as her landlord and “boyfriend”.  There was no evidence from Mr RR as to the existence of this debt or the likelihood that he will ever require repayment.  I thus decline to include this amount as a liability of the wife in the balance sheet.

4. The wife further sought to include as a liability of the husband an amount of $11,977 which she described in her balance sheet as “Westpac-mortgage [Suburb Y]”.  The schedule to her balance sheet stated:

   the mortgage should be $1,332,000 but the husband has paid the superannuation funds into the mortgage without the wife’s consent.

   I was taken to no evidence in support of this proposition, nor provided with any further explanation in final submissions on behalf of the wife.  Essentially, I was provided with no basis upon which I could or should make such a finding.  Accordingly, this alleged debt will be excluded from the list of liabilities.

5. Each of the parties sought to include credit card debts in the balance sheet.  It must be the case, as a matter of logic, that these debts are post-separation liabilities as the parties have not lived together for approximately six years.  I thus decline to include the credit card debt of either party in the list of liabilities.

6. The wife sought to include as a liability an alleged joint debt of $40,000 on account of “CGT estimate for [Central Coast] property”.  In the absence of any evidence whatsoever as to capital gains tax, I decline to include this figure in the balance sheet.

7. For the above reasons, I find that the parties have no liabilities for the purposes of these proceedings.

Financial Resources

1. There was no suggestion that either party possesses a financial resource.

CONTRIBUTIONS OF THE PARTIES

1. There is no doubt that the husband’s initial financial contributions vastly exceeded those of the wife.  He deposed that he owned an apartment at Suburb Z, furniture and superannuation with a total value of $1,388,000 and that he or his corporate entities had liabilities totalling approximately $449,000 at the commencement of cohabitation.  The husband’s evidence was that he had financial resources to a total value of $5,349,000 at the commencement of cohabitation but, as noted, this figure was incorrect and should be $5,441,000.

2. On behalf of the wife it was contended that the husband’s net assets and financial resources had a substantially lesser value at the commencement of cohabitation.  She relied upon a Financial Statement and Application for Consent Orders of the husband which were prepared in the course of his property settlement proceedings with Ms D.

3. In this Financial Statement of 8 May 2001 the husband deposed to total assets to the value of $3,400,000, liabilities of $3,150,641 and superannuation of $628,571.  These documents were prepared some eighteen months after the commencement of cohabitation and may not have reflected his financial position in mid to late 1999.  The husband was involved in several real estate development projects at the time when he prepared these documents.  These projects were funded by borrowings from the Westpac Bank and various pieces of real estate were sold from time to time.  A reasonable expectation might thus be that the financial position of the husband would undergo regular fluctuations.

4. In his affidavit the husband deposed to a change in his financial position between the commencement of cohabitation with the wife and his property settlement with Ms D.  He gave this unchallenged evidence:

   34.  At the time I commence cohabitation with the Wife, I had separated from my second Wife, [Ms D].  She and I subsequently reached agreement in relation to our financial affairs and Consent Orders were made in or about May 2001.  At or about the time those Orders were made, my financial position had changed, since the commencement of cohabitation with the Wife.  For instance, I had sold the property at [1 S Street, Suburb Z] for $1,045,000.00 on or about 25 February 2000 and I had acquired a property in the same block, being [2 S Street, Suburb Z] for $2,450,000.00.  The purchase of that property was funded by using funds available to me from cash on deposit, the sale proceeds of the property at [1 S Street, Suburb Z] and further borrowings from Westpac Banking Corporation Limited.  The loan from the bank was in accordance with my usual practice, through one of my corporate vehicles, but which was personally guaranteed by me.

5. For these reasons I am not persuaded that the husband’s evidence of his financial position at the commencement of cohabitation was necessarily inconsistent with the material which he presented to the court in the property settlement proceedings with Ms D.  In any event, the wife made no claim that she introduced into the relationship any asset other than her motor vehicle.

6. There was no issue that the husband provided most, if not all, of the financial support for four of the wife’s children throughout the relationship.  He was fully responsible for the financial support of the wife during their cohabitation.  He paid school fees for four of the wife’s children and provided a motor vehicle for the use of her son OM.  The husband provided accommodation for the four of the wife’s children without financial input from her throughout the eight years of the relationship.  As noted, it was common ground during that time that the wife’s first husband paid negligible child support.

7. The wife did not engage in paid employment during the parties’ cohabitation.  She did not and could not rely upon the care of her own children as a contribution for the purpose of these proceedings (Robb & Robb (1994) 18 Fam LR 489).The wife cooked meals, shopped and carried out some cleaning at the Suburb Z apartment and the former matrimonial home in Suburb N.  The husband gave unchallenged evidence that he employed a cleaner, gardener and handyman to assist with the domestic tasks in the parties’ household.

8. The husband’s unchallenged evidence was that he provided all of the money which was invested in both parties’ accounts in the C Superannuation Fund.  As the wife engaged in no paid employment during the relationship, it seems logical to conclude that she made all contributions to her BT for Life Superannuation Fund prior to the commencement of cohabitation.

Conclusion as to Contribution

1. In my view, no contributions made by the wife matched the husband’s initial injection of assets into the relationship.  This disparity continued during the eight-year cohabitation of the parties.  The husband’s business activities were the sole source of financial support for the parties and, essentially, four of the wife’s children.  The husband provided accommodation for the wife and her four children.  He made all contributions to her benefit with the C Superannuation Fund.

2. The wife carried out domestic tasks such as shopping, cooking, laundry and cleaning.  As noted, however, the husband employed a gardener, cleaner and handyman to assist with these chores.

3. In all of these circumstances I find that the contributions of the parties were 12.5 per cent to the wife and 87.5 per cent to the husband.

Section 75(2) Factors

1. The husband and wife are aged 68 and 52 respectively and they each suffer from health problems.  The husband’s general practitioner, Dr TT, provided a report dated 10 December 2012 in which he opined:

   This is to certify that I have been the family GP to [the husband] (DOB  …) since 1985.  He was always a very healthy man, being a world champion Masters [sportsman].

   Since January 2008, I have had to treat him on numerous occasions for severe exacerbations of Total Body Eczema, aggravated by stress that several times he has needed oral cortisone to bring his eczema under control. 

   Since that time, [the husband] has consulted me on numerous occasions for stress related symptoms such as significant loss of appetite with weight loss, severe insomnia (requiring sleeping pills), episodic severe sweating and extreme lethargy, and tension headaches.

   He has needed regular psychological counselling for his extremely severe chronic anxiety state, and has at times needed tranquilisers.  Also strong pain killers were needed for his headaches. 

   Having known [the husband] for many years, I have no doubt he has been suffering from severe anxiety and stress since January 2008.

   My prognosis is that if the cause of his stress can be attended, namely a closure of his legal dispute, his stress-related symptoms will ameliorate.

2. The wife suffered injuries to her leg and foot in a car accident in 1980, which have had long term implications on her mobility.  In 2011 she underwent surgery to her left foot and now has difficulty with running and standing for extended periods.

3. At 68 years of age the husband might reasonably be expected to wish to wind down his business activities.  His unchallenged evidence was that the Global Financial Crisis seriously affected his investments and negatively impacted on his overall financial position.  In her oral evidence the wife said that she accepted that the global financial crisis had adversely affected the husband’s financial situation.

4. At a late stage in the relationship and after the separation the wife gained qualifications in office skills, financial services, real estate, fitness and sports instruction.  Currently she is employed as a sports instructor/receptionist and earns $900 gross per week.  Her health problems apparently do not prevent her from undertaking this employment.

5. The wife’s Financial Statement of 4 April 2013 indicates that, essentially, she lives within her means.  She receives a gross weekly salary of $900 and has fixed expenditure of $853.  The latter sum, however, includes an amount of $740 per week for rental and $50 credit card repayments.  The wife’s evidence was that her landlord/boyfriend does not press her for payment of rental on a regular basis.  The wife shares her expenses with her daughter, who has a weekly income of $300.

6. It seems to me to be more probable than not that the husband’s state of health will improve when these proceedings are concluded and he is free of that source of stress.  It may be that he will continue with fruitful commercial ventures, albeit at a more circumscribed level.  In his evidence he expressed a wish to retire from the workforce, which seems reasonable to me for a man of 68 years of age.  It is a matter for him to restructure his financial position as he sees fit, following the resolution of these proceedings, and determine how he will arrange an income stream. 

7. For her part, the wife has re-entered the workforce and gained various employment qualifications.  In my view, it is reasonable to assume that she has several years into the future in which to earn income and increase the value of her BT for Life Superannuation Fund.

8. In my view, the wife put the husband to unnecessary expense by her refusal to consent to the sale of the Central Coast property for five years after the separation.  She could have put a stop to this drain on the parties’ resources at any time during that period.  In fact, she consented to the sale only after the Westpac Bank moved to exercise its power of sale as mortgagee.

9. I have referred above to payments made by the husband for the benefit of the wife after separation.  These payments included mobile telephone expenses of some $7,000.  He also made a disproportionate contribution to the costs of the single expert Mr GN.

10. Weighing these considerations each against the other, I conclude that a modest adjustment in favour of the wife is warranted pursuant to section 75(2). I find that the wife should receive an additional 5 per cent of the net pool of non-superannuation assets.

RESULT

1. I thus find that justice and equity will be served if the husband and wife receive net assets and superannuation to the value of 82.5 per cent and 17.5 per cent of the net pool respectively.  The net pool of assets and superannuation is valued at $2,663,221, of which 82.5 per cent and 17.5 per cent equal $2,197,157 and $466,064 respectively. 

2. The husband sought a splitting order in respect of the wife’s benefit in the C Superannuation Fund, to the effect that he would become solely entitled to all money held by that entity.  The wife sought orders which would permit her to roll her account into another superannuation fund.  It seems to me to be preferable to constitute the husband the sole holder of money in the superannuation fund.  It is open to the wife to invest in her own superannuation fund as she sees fit, following the resolution of these proceedings.  Accordingly, I will make orders as sought by the husband in respect of the C Superannuation Fund.

3. The husband’s Minute indicated that he agreed to constitute the wife sole owner of the Ford motor vehicle.  Although that car did not form part of the property pool for the purpose of these proceedings, I will make an order to give effect to the joint intention of the parties.

4. The wife currently holds or has taken already the following assets and superannuation, excluding her benefit in the C Superannuation Fund which will pass to the husband:

1.	Westpac Bank Savings	$113
2.	Household Contents	$2,000
3.	BT for Life Superannuation Fund	$5,230
4.	Payments made pursuant to interim orders of 7 August 2007 and 21 December 2007	$240,000
$247,343

1. The wife thus requires an amount of $218,721 from the husband to constitute her entitlement of $466,064.  I will round off this sum to a figure of $218,700.  I propose simply to order that the husband pay that amount to the wife within 42 days of the date of these orders.  It will thus be fore the husband to determine the source of this money and the application of the proceeds of sale of the Central Coast and Suburb N properties a matter for his discretion.

2. In an overall sense, I consider that this outcome achieves justice and equity between the parties.

I certify that the preceding one hundred and twenty two (122) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson delivered on 23 August 2013.

Associate:     

Date:              23 August 2013