Kelby and Kelby (No. 2)

[2020] FamCA 816

FAMILY COURT OF AUSTRALIA

KELBY & KELBY (NO. 2) [2020] FamCA 816

FAMILY LAW – PROPERTY – Application for final property settlement – Where the parties’ cohabitation and marriage was for a period of 25 years and where the parties have been separated for 21 years – Where, for the purposes of these proceedings, the husband is found to hold the whole of the equitable interest in the property in which he lives by way of resulting trust – Discussion of s 79(4) considerations and what alteration of property was just and equitable.

Family Law Act 1975 (Cth) Pt VIIIAB, ss 75, 79

Family Law Rules 2004 (Cth) r 13.14

Calverley v Green (1984) 155 CLR 242,
Gosper v Gosper (1987) FLC 91-810
Hill v Dunn (2019) NSWSC 419
Kelby & Kelby [2016] FamCA 698
Kessey v Kessey (1994) FLC 92-495
Muschinski v Dodds (1985) 160 CLR 586
Ryan v Ryan [2012] NSWSC 636
Zyk v Zyk (1995) 128 FLR 28

APPLICANT: Ms Kelby

RESPONDENT: Mr Kelby

FILE NUMBER: SYC 8071 of 2014

DATE DELIVERED: 25 September 2020

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Watts J

HEARING DATE:

25 - 29 May 2020;

18 June 2020; 7 August 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Fernon

SOLICITOR FOR THE APPLICANT: Yates Beaggi Lawyers

COUNSEL FOR THE RESPONDENT: Ms Gillies, SC

SOLICITOR FOR THE RESPONDENT: McGirr Lawyers

Orders

1. Pursuant to s 79 Family Law Act 1975 (Cth), an order is made in accordance with paragraphs 2 to 12.

2. Within 42 days of the date of these orders the wife shall:

   (a)transfer to the husband the whole of her right title and interest in all shares held by her in J Pty Ltd ACN … (the company); and  

   (b)resign as a Director of the company.

3. The husband or his lawyer shall prepare all necessary documents including a transfer and resignation to give effect to paragraph 2.

4. The husband be responsible for any payment of duties, costs and fees (other than the cost of the execution by the wife of the documents referred in paragraph 3) to give effect to this order.

5. Within 42 days of the date of these orders, the wife shall pay to the husband the sum of $339,296 and contemporaneously with that payment, the husband shall transfer to the wife all of his right, title and interest in the property at G Street, Suburb H, New South Wales (“Property I”).

6. The wife and her lawyer shall prepare all necessary documents including a transfer of Property I in registerable form to give effect to paragraph 5.

7. The wife be responsible for any payment of duties, costs and fees (other than the cost of the execution by the husband of the documents referred in paragraph 6) to give effect to this order.

8. In the event that the wife does not comply with paragraph 5 the parties shall do all acts and things including signing all documents to cause Property I to be listed for sale and for that purpose the husband shall be appointed as the trustee for the sale of the property and shall have the power to:

   (a)appoint a real estate agent to act on the sale;  

   (b)appoint a lawyer to act upon the sale; 

   (c)elect whether or not to conduct the sale of Property I by public auction or by private treaty;

   (d)nominate the minimum reserve price or contract price as the case may be;

   (e)nominate what repairs, if any, should be made to the property;

   (f)sign all documents to give effect to the sale;

   (g)disburse the sale proceeds in accordance with these orders.

9. In the event that Property I is sold the proceeds of sale shall be disbursed as follows:

   (a)the costs, expenses and commission of the real estate agent or agents acting on the sale of the property; 

   (b)the costs, fees and disbursements of the lawyer or lawyers acting for the parties on the sale of the property; 

   (c)adjustment of water rates and Council rates;  

   (d)the cost of any necessary repairs to the property as recommended by the agents, and authorised by the husband;

   (e)11.3% to the husband;

   (f)88.7% to the wife;

   (g)in the event that Property I sells for more than $3,000,000, the wife shall receive 45% of the increase and the husband shall receive 55% of the increase but in the event that Property I sells for less than $3,000,000, then the wife will bear 45% of that decrease and the husband will bear 55% of that decrease.

10. The wife do all things and acts, sign all documents, and give all consents necessary to give force and effect to these orders including:

    (a)making sure that the real estate agent has access to the property upon a request to do so;   

    (b)ensuring that the home and grounds are presented in a clean and tidy state prior to any open house or inspection;  

    (c)ensuring that the real estate agent is provided with a set of keys and access passes/ devices to gain entry to the property; 

    (d)ensuring that she does no act or thing that might discourage or dissuade a purchaser from purchasing the property; 

    (e)ensuring that the property is vacant at any open house or inspection.

11. Except as provided, each party is declared to the sole owner of any property in their possession at the date of these orders including bank accounts, business items, furniture and personal effects, shares, debentures and interests in any superannuation fund.

12. Except as otherwise provided each party is declared to be solely responsible for any debt standing in their sole name as at the date of the making of these orders and shall indemnify the other party in relation to them.

13. In the event that either party refuses or neglects to execute any deed or instrument necessary to give effect to all any of these orders made that the Registrar of the Family Court at Sydney be appointed pursuant to s 106A to execute the deed or instrument in the name of the wife and to do all other acts and things necessary to give validity and operation of the deed or instrument and the wife pay the costs of the husband on a solicitor/client basis in relation to obtaining the Registrar's signature.

14. The parties have leave to relist the matter on seven days’ notice in respect of the implementation of the property settlement order.

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 Kelby & Kelby has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 8071  of 2014

Ms Kelby

Applicant

And

Mr Kelby

Respondent

REASONS FOR JUDGMENT

Introduction

1. Fifteen years after separation, the wife commenced proceedings for a final property settlement order by way of application filed 22 December 2014. The husband filed a response on 9 April 2015.

2. The parties commenced cohabitation in 1974 before marrying on … 1975. They separated on a final basis in or about November 1999, when the husband left the former matrimonial home, Property I.

3. Despite the fact that the parties have been separated for in excess of 20 years, the marriage has not been dissolved and a final property settlement has not taken place between them.

4. Most of the delay in this case has been occasioned by the inability of both the parties and their lawyers to prepare the case for hearing in a reasonable and timely way given the matters to be agitated between them. An eye-watering amount of money has been paid to the lawyers. The total of these two amounts represents in the order of 18 per cent of the assets which the parties jointly or individually hold. How the expenditure of these funds were to be taken into account became an issue in the hearing.

Documents relied upon

1. The documents the parties relied upon are set out in Schedule 1.

2. I made it clear that whilst material exhibited to affidavits would be before me, no document in the tender bundles that had been provided would be in evidence unless they are individually and specifically tendered.

3. In relation to material which had not been disclosed to the other party, r 13.14 Family Law Rules 2004 (Cth) applies and I indicated answers given in cross examination to questions which read that material onto the record will be struck out along with those questions.

4. I made a notation at the conclusion of the evidence that any page of the tender bundle (apart from those pages which had not been disclosed to the other party prior to the weekend before the commencement of the hearing) that has been shown to a witness in cross examination or specifically referred to in submissions, shall be in evidence but no other.

Applications

1. The respective applications of the parties for a property settlement order are set out in Schedule 2.

2. The wife seeks that the husband transfer his interests in Property I to her and that the husband cause J Pty Ltd (“JPL”) to transfer the Suburb S property to her. She notes however that the application for those orders may require adjustment depending on the value of those properties.

3. In final submissions, the wife made it clear that the orders she sought was an order that she receive 65 per cent of the net assets of the parties. If the wife received the whole of Property I and transferred her interest in JPL to the husband, the husband would be required to pay to the wife an approximate amount of $1,145,863.

4. The application of the husband is that the wife transfer her interest in JPL to him; the wife pay to him an amount equivalent to one half of the value of Property I and in the event that she does not do so, that Property I be sold and the net proceeds of the sale be divided as to 50 per cent to the wife and 50 per cent to the husband and that otherwise each party keep assets and liabilities that are in their respective possessions and names. The exception to that is that the husband sought that the wife deliver to him certain chattels.

Short history

1. On … 1953 the husband was born and is currently 66 years of age.

2. On … 1954 the wife was born and she is currently 66 years of age.

3. The parties met in AA Town in December 1972; commenced cohabitation in 1974 and married on … 1975.

4. On … 1982, Ms X, the first child of the marriage, was born.

5. On … 1983, Ms Y, the second child of the marriage, was born.

6. On … 1985, Mr Z, the third child of the marriage, was born.

7. On 14 November 1999 the parties separated. The parties are not divorced.

8. Sometime between 2004 and 2006 the husband commenced a de facto relationship with Ms V and they are still in that relationship.

the reliability of the evidence of the parties

1. Both parties attempted to provide their recollections of what happened up to nearly 50 years ago. Any of the differences in their recollections are immaterial.

2. There were a number of occasions where the wife’s memory proved to be defective. There were matters in respect of which she had no memory. During cross examination, the wife was challenged about the extent to which she had provided disclosure of documents relating to the history of her financial circumstances in the post-separation period. Some of the wife’s answers were not responsive and she said she produced what she was told to by her solicitors. The wife did not disclose that she had received an inheritance from her mother’s estate of about $60,000 received in 2001/2002. The wife claimed she still had $40,000 of that inheritance in 2015 but that she had given it away to the youngest child so that he could open a business, even though at that time Property I was in a serious state of disrepair. Counsel for the husband tested that proposition with the wife by an examination of bank statements and eventually the wife was unable to support the assertions that she had made in relation to the disposal of $40,000 of her inheritance.

3. The wife was asked about a man who lived on the property after the parties’ separated and conceded that she had not mentioned this fact in her affidavit and when asked why she had not done so, she said “You just jogged my memory”. The wife asserted that this man paid no money for accommodation.

4. The wife did not disclose, in a timely way, that she had cashed in about $180,000 of her superannuation nor did she provide the husband with documentation which demonstrated what she had done.

5. The husband, on occasions, was very assertive about a particular thing being accurate only to be confronted with a historical record which required him to concede he was probably incorrect. There were in fact a number of occasions in his written evidence where there are internal inconsistencies or statements made by him that are clearly inconsistent with other objective written evidence.

6. An example of the internal inconsistencies in the husband’s evidence were sworn statements that his income averaged $100,000 a year when his tax returns for the same periods were asserting $10,000 a year.

7. In circumstances where there is a dispute in the parties’ evidence, I am unable to prefer one version over the other. Overall I have relied upon agreed facts, unchallenged evidence, facts emerging from contemporaneous documents or other objective evidence and what is more inherently likely.

Chronology

1. On … 1953 the husband was born and is currently 66 years of age.

2. On … 1954 the wife was born and she is currently 66 years of age.

3. The parties met in AA Town in December 1972; commenced cohabitation in 1973 or in 1974 and married on … 1975 and travelled to New Zealand for their honeymoon.

4. In late 1975 the parties purchased their first home at BB Street, Suburb CC for $43,000. The majority of the purchase price was funded by way of a joint loan in the sum of $30,000 from the Bank of New South Wales (subsequently Westpac). The balance came from monies the husband had saved with some minor assistance from his parents.

5. The wife paid half of all living expenses and kitchen renovation costs of $2,000 with money she had saved from her holiday pay.

6. Between 1975-1978 the wife worked as a health professional.

7. In 1979 the husband opened a business.

8. On 9 May 1979 the husband incorporated JPL. The wife held a 2500 shareholding and the husband held a 7500 shareholding. The wife was a director and secretary. The wife commenced working full time in the business attending to secretarial duties, accounts, banking, paying wages, monthly ledgers and trial balances. The wife asserts she worked full time Monday to Friday and went home with the husband at 7pm each night.

9. In 1982 Suburb CC was sold for $350,000. The outstanding mortgage to Westpac was discharged.

10. On … 1982, Ms X, the first child of the marriage, was born.

11. In 1982 the parties purchased a property at FF Street, Suburb S for $63,000 using some funds from the Suburb CC property.

12. In November 1982, JPL purchased T Street, Suburb S (“the Suburb S property”) which is currently the major asset held by the company. The purchase price was $160,000 and the acquisition was financed with the assistance of a borrowing from Westpac. The husband says he provided a 10 per cent deposit.

13. On … 1983, Ms Y, the second child of the marriage, was born.

14. The wife continued to attend the business and attend to the books for the accountant after both children were born.

15. On … 1985, Mr Z, the third child of the marriage, was born with kidney failure. The wife and child remained at EE Hospital for two months and the daughters resided with their grandmother at AA Town.

16. In 1985 the husband says he purchased a property at GG Street, Suburb HH in his sole name for $175,000.00 using lotto winnings ($168,000) and savings. The real property searches would indicate the transferee was JPL and the purchase price was $150,000. The wife had no involvement in the acquisition of this property notwithstanding the fact that she was a director of the company at the time.

17. Also in 1985 the parties purchased a property on JJ Street, Suburb KK for $110,000. This property was sold in 1993 for $380,000. Both parties seem to assert in their case outlines that this property was sold at the same time that Property I was purchased however the real property searches tend to indicate that the property was sold in 1993 for $380,000.

18. In 1986 the FF Street property was sold for $59,000 and the money was deposited to JPL.

19. In 1987 the husband purchased a 2/3 interest in a property in LL Street Suburb MM for $235,200 in his sole name. The husband claims that the money to purchase this property came from a $230,000 windfall on a horse race and $5,000 from savings. In 1989 the whole of the property was mortgaged to the State Bank of New South Wales. The husband later paid $113,665 to acquire the remaining interest in the property with funds borrowed from a bank, the husband says either ANZ or NN Bank.

20. In 1987 the GG Street, Suburb HH property was sold for $220,000.

21. On 28 September 1988 the parties moved to Property I as the husband wanted acreage. The purchase price of $510,000 was funded from the proceeds of the GG Street property sale and savings. The real property searches suggest there was no external funding for the Property I purchase although some funding may have come internally through JJ.

22. The wife attended to looking after the children and assisted with some of the activities carried on at the property. During this time, the children attended QQ Primary School and later RR School.

23. By 1994 the parties owned the Suburb S business, rented a property next door, a building behind the premises and rented a further property at Suburb OO. The parties owned Property I and a house at Suburb MM.

24. In 1995, PP Pty Ltd was incorporated and acquired a business for about $300,000. The husband and wife were the directors and shareholders of this company.

25. The husband rented a two bedroom property in SS Town. The husband only returned to Property I monthly. The wife worked full time at the Suburb S business between 1995-1998.

26. In 1996 the parties and the children travelled to America for a holiday. The wife paid for the trip from money she had put aside.

27. In 1981 the wife received a small inheritance from her father, which was placed in an interest bearing account. By 1996 the account had around $7,000.

28. By 1996 the SS Town business was failing. The wife asserts she placed funds of $7,000 into the business and paid $10,000 for a forensic accountant, resulting in the business being placed into liquidation owing $3.5 million. The parties sold their TT Company shares and the Suburb MM property to raise money.

29. Between 1996-1998 the husband returned to the Suburb S business and obtained a loan from the wife’s mother of $50,000. It is the wife’s evidence that that money was not repaid to her mother.

30. In about late 1998 the husband obtained a loan of $110,000 from his father which was interest free. That loan was extinguished in 1999 when the husband’s parents in effect gave the husband $88,000 to do so.

31. The parties however would have lost Property I the and Suburb S property had it not been for the husband’s ability to secure from his father a borrowing which by the end of January 2000 totalled $930,000 (the details of which are discussed further below).

32. In 1998 the Suburb MM property was sold for $350,000 and the proceeds were used to assist in the payment of debts of JPL.

33. In September 1999 the husband left the matrimonial home but returned occasionally.

34. On 14 November 1999 the husband left the matrimonial home on a final basis.

35. In 1999 the husband paid the wife a wage to be utilized for housekeeping and to pay outgoings on Property I.

36. In 1999 the wife returned to university and commenced a Bachelor’s degree.

37. Between 1999-2002 the wife attended to the payment of all outgoings for the children’s needs at school and home and maintained the matrimonial home with monies received from the husband.

1. In 2000 the husband removed the wife as a signatory on the company accounts however she remained a director, secretary and shareholder.

2. In 2000 the husband bought a property at UU Street, Suburb S (“UU Street”) for $159,000 using $140,000 from his parents who took a mortgage over this property. The registered proprietor of this property was JPL.

3. In 2002 the husband ceased all payments to the wife when the youngest child left school.

4. In 2002 the youngest child Mr Z, was diagnosed with chronic renal failure.

5. In 2003 the wife returned to healthcare and commenced working at a healthcare facility in Suburb Q.

6. In 2003 property at UU Street was sold for $350,000. The husband asserts $80,000 was paid into JPL from the proceeds of this sale and the balance was applied to the purchase of Property D.

7. In February 2004 the husband purchased a property at E Street, Suburb F for $280,000. The husband used $80,000 from the sale of UU Street and drew the rest from JPL.

8. In 2004 the husband purchased a unit, Property D for $265,000.

9. Sometime between 2004 and 2006 the husband commenced a de facto relationship with Ms V.

10. In 2005 the husband won a motorcycle and sold it for $28,000.

11. In 2006, Mr Z commenced home dialysis with significant costs expended having the dialysis machine placed in the home with plumbing, electricity, heating all having to be changed. Costs were incurred for specialist transport and medications all of which were paid for by the wife.

12. Between 2007-2009 the business was rented to a Mr VV for $9,000 a month excluding GST.

13. Between 2007-2014 the wife was employed on permanent part-time basis at a healthcare facility in Suburb D.

14. In 2008 the wife also worked casually as a health professional.

15. In 2008 the husband received a workers’ compensation claim of $110,000.

16. In September 2013 the wife was injured in an accident. She sustained injuries to her back, knee and shoulder and took long service leave due to injuries received. The wife received $66,424.68 after her legal fees were paid.

17. In 2013 the husband received the amount of $71,600 from his sister’s estate, which he then entirely lent to JPL.

18. Significantly, in 2013 and 2014 the husband received distributions from his father’s estate totalling an amount of in excess of $1 million.

19. Due to the husband’s inadvertence, on 5 October 2014, JPL was deregistered by ASIC at a time when the company was solvent.

20. In 2014 the wife ceased working as a health professional due to her back injuries.

21. In September 2014 the husband loaned his associate, Mr WW, the amount of $850,000 by way of first mortgage with repayments of $,7000 per month. The mortgage was for a period of one year and to be repaid by 22 September 2015. The husband had to recover this amount through litigation.

22. On 3 November 2014 the husband signed a Heads of Agreement on the Suburb F property with a non-refundable option fee of $20,000 paid to the husband, and a deposit of $50,000. The purchase price was to be $1.4 million and the potential purchaser placed a caveat over the property to secure the option to purchase.

23. In 2016 Property D was sold and the husband received the amount of $206,000.

24. As at the date of judgment of Rees J in August 2016, her Honour recorded that the wife’s superannuation was in the sum of $273,132.

25. In February 2017 the husband sold the Suburb F property for $1,550,000, and purchased the O Town property for $1,450,000 using those funds. The O Town property was registered in the names of the husband and Ms V.

26. By 2017 the wife was now in receipt of Centrelink payments.

27. On 27 April 2017 the wife received $206,155 from the husband pursuant to orders made 24 August 2016.

28. In 2017 the husband cashed in his superannuation, receiving a sum of $200,360.36.

29. In 2017 JPL was liquidated and the husband deposited the amount of $370,000 into JPL to take the company out of administration.

30. On 8 April 2020 the wife received $400,000 from the husband pursuant to interim orders.

31. As already indicated, the parties are not divorced.

Approach

1. In this matter my task is to:

   a)Identify according to ordinary common law and equitable principles and then value the property, assets, financial resources and liabilities of the parties;

   b)Determine whether it is just and equitable to make an order altering those interests and if so;

   i)Identify relevant contributions and assess them;

   ii)Consider relevant matters referred to in s 79(4)(d) – (g) of the Family Law Act 1975 (Cth) (“the Act”);

   c)Determine what order adjusting the property, assets and liabilities of the parties is just and equitable.

Should a property settlement order be made?

1. The parties have been separated for in excess of 21 years without any order being made that finally determined the financial relationship between them. Property I, which is the wife’s residence, remains in joint names and the parties both retain shares in JPL. Both parties seek, and it is glaringly obvious, that an order adjusting the interests of the parties in property should be made.

One or two pools?

1. The wife argues that contributions should be assessed with all assets being included in the one pool.

2. The husband in his outline of case dated 24 May 2020 and in final oral submissions, advocated that contributions be assessed with assets being placed in two different pools. He submits:

   As a consequence of the husband’s efforts post-separation, and his application of various lump sums that had been received by him (including inheritances, windfalls and his earnings) post-separation, the husband was able to discharge a lot of the debt that was encumbering the business and ensure that the parties (sic) personal assets were retained.

   It was primarily the husband’s inheritances that was received from his father’s estate in 2014 that cleared this debt. It also permitted the husband to have sufficient assets available to him to be able to live. The wife seeks to include the assets that represent the proceeds of that inheritance in the property pool.

   She does so despite the fact that the inheritance was received 15 years after separation. The husband opposes this course and says that the Court should approach the division of the parties’ assets on a two pool basis…

3. The husband did not say what assets and liabilities he wished to have placed in a separate pool for a separate contribution consideration. It is not obvious from the evidence as to precisely what part of the current net assets have been acquired, conserved or even improved by the husband’s post-separation inheritances, windfalls and earnings. I conclude it is for that reason the husband was vague about what assets he wished to have included in the separate pool.

4. It is also for that reason, I am unable to place any weight on the husband’s submission that a two pool approach should be adopted and all assets and liabilities will be considered in the one pool.

5. That is not to say that the husband’s 2014 inheritance and other post-separation contributions should not be seen as significant in this case.

Balance Sheet

1. The settled balance sheet is set out below.  Where values are not agreed they appear in bold as determined by me. The amounts referred to in items 11, 12, 17 and 20 have been expended but added at the first stage of my reasoning process on that understanding. The reasons for each determination is set out under item numbers following the table:

Assets
Item no.	Title	Description	H value	W value	Agreed/ Determined	Value
1	J	G Street, Suburb H (Property I)	$3,000,000	$3,000,000	Agreed	$3,000,000
2	H	XX Street, O Town	$685,000	$1,370,000	Determined	$1,370,000
3	J	JPL	$814,000	$814,000	Agreed	$814,000
4	W	Cash in bank accounts	$1,542	$1,542	Agreed	$1,542
5	W	Motor Vehicle 1	$1,800	$1,800	Agreed	$1,800
6	W	Household contents	$0	$0	Agreed	$0
7	H	Cash in ANZ Bank	$934	$934	Agreed	$934
8	H	Motor Vehicle 2	$2,000	$2,000	Agreed	$2,000
9	H	Cash in ANZ Bank	$110,260	$110,260	Agreed	$110,260
10	H	Cash in YY Bank	$513,282	$513,282	Agreed	$513,282
11	W	Proceeds of partial property settlement	$400,000	$400,000	Agreed	$400,000
12	W	Proceeds of partial property settlement	$206,155	$206,155	Agreed	$206,155
13	H	Loan to JPL	$652,357	$652,357	Agreed	$652,357
14	H	Household contents	$0	$0	Agreed	$0
15	H	Business items in husband's possession	$0	$0	Agreed	$0
16	H	Income from JPL	$0	$0	Agreed	$0
17	H	Funds in McGirr Lawyers trust account	$249,432	nk	Determined	$249,432
18	W	Funds in Yates Beaggi trust account	nk	$100,000	Determined	$0
19	H	Income from JPL	$0	nk	Determined	$0
20	H	Proceeds from sale of Property D	$0	$41,000	Determined	$41,000
21	W	Super Fund 1	$12,048	$12,048	Agreed	$12,048
22	W	Super Fund 2	$59,359	$59,359	Agreed	$59,359
23	H	Superannuation	$0	$0	Agreed	$0
Total assets			$7,434,169
Liabilities
Item no.	Title	Description	H value	W value	Agreed/ Determined	Value
24	W	Credit card	$0	$0	Agreed	$0
25	H	Credit card	$0	$0	Agreed	$0
26	H	ATO debt	$210,001	nk	Determined	$0
27	H	Debt to Suburb Q Council	$8,373	$8,373	Agreed	$8,373
Total liabilities			$8,373
Total net assets			$7,425,796

Item 2 – Value of O Town

1. The O Town property was acquired in February 2017 and is registered in the joint names of the husband and Ms V. In the husband’s financial statement sworn 27 May 2020, he asserts that he has a 50 per cent interest in the O Town property and Ms V has the other 50 per cent interest. The wife asserts that whilst Ms V holds one half of the legal interest in the O Town property, the husband holds the whole of the beneficial interest in that property because there is a presumption of a resulting trust in the husband’s favour arising from the circumstances in respect of the acquisition of that property.

2. The only relevant evidence to which my attention was drawn is that contained in the husband’s trial affidavit and his financial statement.

3. At paragraph 18.2 of the husband’s affidavit dated 20 May 2020 (the husband’s trial affidavit), he deposes:

   In 2017 I sold the E Street property [Suburb F] for $1,550,000 and used those proceeds to buy my present residence at O Town which I bought as joint tenants with my de facto partner, Ms V, in February 2017 for $1,450,000 and which is unencumbered.

4. At paragraph 41.5 of his trial affidavit, he says:

   I currently live in a de facto relationship with Ms V. She is my carer. As far as I am aware, Ms V, has no assets other than her share in the O Town property. She is my full-time carer and assists me in every regard. She has no other form of employment and no income other than her carer’s pension.

5. The wife, in her outline of argument filed 24 May 2020, prior to the commencement of the trial, makes the following submission:

   O Town was acquired in 2017 using the proceeds of sale from another property held in the name of the husband. Ms V made no contribution to its acquisition. (husband at [18.2]). A tracing of the money used to purchase the property reveals it was sourced from the proceeds of sale from earlier sale of the parties’ [this is inaccurate as Suburb F was in the husband’s sole name] property. A resulting trust thereby arises in favour of the husband in respect of the 50% interest held in the name of Ms V. No presumption of advancement exists in respect of de facto couples (Calverley v Green (1984) 155 CLR 242, Muschinski v Dodds (1985) 160 CLR 586, Hill v Dunn (2019) NSWSC 419 per Henry J, Ryan v Ryan [2012] NSWSC 636 per Ward J (as Her Honour then was)).

6. Based on the evidence which the husband gives at paragraph 18.2 of his trial affidavit, I am satisfied that the legal title of the O Town property does not reflect the contributions which were made by the registered proprietors respectively to the acquisition of that property. Accordingly I find that it is to be presumed that the beneficial ownership of the property is held in the proportion in which the husband and Ms V contributed to the costs of the purchase of the property at the time it was acquired, that is, it is to be presumed the beneficial ownership is wholly held by the husband.

7. Knowing that this was the wife’s case, the husband did not seek to lead any evidence in order to rebut the presumption from either himself or Ms V, as to whether or not it was their intention that their respective interests should be in accordance with something other than their contributions to the purchase price. I observed during oral submissions that whilst the husband was given the opportunity to do so in the trial management phase of these proceedings, he did not call Ms V as a witness in his case and gave only minimal information about her financial position. The husband and Ms V have lived in a de facto relationship for somewhere between 14 and 16 years and had been in that relationship at least 11 years at the time of the acquisition of the O Town property.

8. In Calverley v Green (1984) 155 CLR 242 (“Calverley v Green”), Mason and Brennan JJ said at 260-261:

   … In a case where a man and a woman are cohabitating though unmarried there is no presumption, either of equity or human experience, that they intend their relationship to have the same consequences upon their individual property rights as marriage has upon the property rights of spouses. An assumption that the parties to such an arrangement intend to maintain independent control of money and property and to retain a testamentary power to dispose of assets in which they have an interest is more likely to coincide with reality than an assumption of joint ownership. The provisions of ss 79 and 80 of the Family Law Act 1975 (Cth) now furnish a further ground for not applying the special rules governing the title to property in the case of spouses in order to resolve property disputes between parties who have cohabited but who have not married. On the dissolution of a marriage, s 79 and 80 confer a discretionary power on the Family Court of Australia to alter the property interests of the parties to the marriage if it is just and equitable to do so. On the termination of an association between a man and a woman who are not married to each other, no discretionary power may be exercised and the jurisdiction of the courts of equity is simply to declare the proprietary rights of the right parties, a jurisdiction which a court of equity is not at liberty to exceed either in the case of husband and wife or in the case of a man and woman who are not married.

9. Deane J adopted the same position as Mason and Brennan JJ in finding the presumption of advancement did not apply to de facto couples, taking that position because of “logical necessity and analogy and not by reference to idiosyncratic notions of what is fair and appropriate”.

10. Gibbs CJ dissented, expressing the view that the presumption of advancement should be recognised for de facto couples in circumstances where that relationship “has proved itself to have an apparent permanence, and in which the parties lived together, and represent themselves to others, as man and wife….it seems natural to conclude that a man who puts property in the name of a woman with whom he is living in a de facto relationship does so because he intends her to have a beneficial interest and that a presumption of advancement is raised”.

11. Murphy J, also dissenting, said that the general presumption of a resulting trust should be discarded and that the presumption of advancement is unnecessary opining that “as standards of behaviour alter, so should presumptions, otherwise the rational for presumptions is lost….”. His Honour referred to the emerging State legislation saying that the old presumption was not sustainable by common experience and should not therefore be applied.

12. The unavailability of the presumption of advancement to de facto couples was affirmed by the High Court in Muschinski v Dodds (1985) 160 CLR 583 and has been applied consistently since in cases such as those referred to in the wife’s outline of argument set out above.

13. Senior counsel for the husband sought and was given an opportunity to provide supplementary written submissions about whether the assumption of advancement applied to de facto couples but did not avail herself of that opportunity.

14. It might be said that the majority decision in Calverley v Green in relation to the presumption of advancement not applying to de facto couples was a product of a different zeitgeist. It may be that if the High Court comes to reconsider the question as to whether or not the presumption of advancement applies to de facto couples, at some future date, this aspect of the majority decision in Calverley v Green might be reversed. This decision was delivered four days before the introduction of de facto property laws at a State level in New South Wales. Part VIIIAB of the Act was introduced in 2008 and now all de facto couples are subject to the same law in relation to the alteration of property interests upon the breakdown of their relationship as are married couples, eliminating a central plank of the reasoning of the majority in Calverley v Green as to why the presumption of advancement did not apply to de facto couples.

15. There is no suggestion that the relationship between the husband and Ms V is not currently intact. It was uncontroversial that Ms V does not have any vested inchoate right arising from a possible future claim under the Act upon the breakdown of their relationship. Senior counsel for the husband suggested that I might find that Ms V has a beneficial interest in O Town arising under a constructive trust. That argument suffers from the same difficulty that exists in relation to the lack of evidence in respect of any intention the husband or Ms V might have had which would rebut the presumption that a resulting trust exists. There is simply insufficient evidence upon which any finding of a constructive trust could be made.

16. As indicated during submissions, given the finding that the husband holds the whole of the beneficial interest in the O Town property is a finding made in these proceedings between the husband and wife and Ms V is not a party to the proceedings and has not been heard on that issue, it is clear that the finding does not bind her in any way.

17. Further, it would be unrealistic to ignore entirely the possible future claims that Ms V might be able to potentially make in respect of the beneficial interest in the O Town property and that matter shall be born in mind when considering s 75(2)(o) of the Act.

18. I am bound by the authority of Calverley v Green. There is a presumption of the existence of a resulting trust. That presumption is not displaced by any contrary evidence or a presumption of advancement. I will place the full value of the O Town property on the balance sheet against the husband.

Items 3 and 13 – JPL and the husband’s loan to JPL

1. The value of the shares of the parties in JPL is dealt with by Mr R in his report dated 17 December 2019. The valuation is qualified because of Mr R’s reservations about the accuracy and reliability of the financial statements with which he has been provided. Mr R concluded that JPL has no goodwill (and has removed a goodwill figure from the balance sheet in the company’s financial statements). He has valued the company on an asset backing basis.

2. Mr R values JPL as at 30 June 2018 in the sum of $934,000. This includes taking into account a loan owed by the company to the husband in the sum of $652,357. If that loan was disregard, the value of JPL would be in the sum of $1,586,357.

3. The valuation however is based upon accepting a figure for freehold land at Suburb S in the sum of $1,500,000. Mr R made clear in his oral evidence that if a new figure for Suburb S was provided then his opinion as to value would increase or decrease on a pro rata basis.

1. The new agreed value of the Suburb S property (in accordance with the expert’s report of 18 May 2020) was in the sum of $1,380,000. This is a reduction of $120,000 from the figure that Mr R had assumed.

2. The result is that the parties agreed that item 3 should be marked as $814,000 ($934,000 - $120,000) and item 13 as $652,357.

Items 15, 16 and 19 – Business items in the husband’s possession and income from JPL

1. It was the wife’s case that the husband had 32 or 33 items that he had not disclosed which provided JPL with a source of income. It was agreed that this was an argument that would be dealt with under the rubric of a lack of full and frank disclosure by the husband and as no value could be ascribed to these items then it was not appropriate to place the items on the balance sheet.

Items 17 and 18 – Legal fees

1. As indicated, there is a dispute between the parties as to whether or not legal fees should be notionally added back onto the balance sheet. I have a discretion to do so notwithstanding that these monies have been expended.

2. I should immediately observe that there is an inconsistency in the wife’s position. The wife submitted that no amount should be added back onto the balance sheet in relation to legal fees. However, it seemed to be common ground that items 11 and 12 would be added back against the wife onto the balance sheet. Those items represent proceeds that the wife received from partial property settlements. It is uncontroversial that the whole of those proceeds ($400,000 + $206,155) were expended by the wife on legal fees.

3. The husband disputes that item 17 should be added to the balance sheet. This is an amount of $249,432 that the husband’s solicitor held in his trust account as at the date that the husband swore his financial statement on 27 May 2020.

4. The wife has provided (Exhibit 21) a copy of all 16 tax invoices issued to her. No summary was provided but they seem to add to about $847,427. The final invoice is for $70,327 and seems to be unpaid. On the basis of these documents, it seems that the paid invoices are in a sum of about $777,100.

5. However in the wife’s notice (Exhibit 9) she indicates that her actual costs paid up to and including the 25 May 2020 (with nil owing) was $737,281. As indicated, the paid invoices add to about $777,100. I am unable to reconcile the difference of about $40,000.

6. The wife has indicated that the source of those payments were the two amounts for interim property settlement that she received together with superannuation that she cashed of an amount about $180,000. Those amounts add to approximately $786,000.

7. The husband’s notices as to costs (Exhibit 10) indicates that costs both paid and owing up until and including the final hearing to be in the sum of $402,554. There is a further amount in respect of expenses paid and owing to expert witnesses in the sum of $39,000. A summary of the invoices rendered to the husband dated 29 May 2020 (Exhibit 20) indicates that as at that date, invoices had been rendered to the husband in the sum of $256,504 and all but $22,000 of those invoices have been paid. That is, the husband had paid as at that date an amount of $234,504. In addition, as earlier indicated, as at 27 May 2020 the husband’s lawyers held $249,432 in their trust account. These two sums total $483,936.

8. The husband asserts in his costs notice that the source of his funds were from “personal savings held”.

9. So in summary, the wife has paid about $777,100 towards legal costs and the husband has paid $483,936.

10. As indicated, at items 11 and 12, the parties have asked me to determine the balance sheet in a certain way which, as I have already pointed out, includes in effect $606,000 worth of the wife’s legal costs. Having done that, I see no basis upon which the husband could resist having the funds that his solicitor holds in his trust account added to the balance sheet (item 17). In relation to item 18, I am satisfied, based upon an examination of Exhibit 21, those monies do not exist currently in the trust account of the wife’s solicitors and have been used to pay accounts previously referred to.

11. Accordingly, item 17 will be determined at $249,432 and item 18 at nil.

12. Having done that, I will at a later point refer to the wife’s arguments that the disparity in the amount incurred in respect of legal fees  arises partly as a function of the husband’s failure to give proper disclosure.

Item 20 – Proceeds received by the husband from the sale of Property D

1. The property owned by the husband at Suburb D was sold in 2016. The husband received $206,155 from the proceeds of the sale of this property. Both parties accept that of that amount, the husband paid $165,000 by loan to Mr WW which money has come back onto the balance sheet and is part of the monies referred to in either items 9 or 10. Consequently the amount that the wife contends should be placed against item 20 is $41,000.

2. The husband however argues that amount should be nil because he gives evidence that he has used those funds for ordinary living expenses since the sale of the Suburb D property. Senior counsel for the husband argues that that evidence should be accepted on the basis that the husband had ill health, including an amputation of a limb, and that he took various medications. As will be discussed elsewhere, I am not at all satisfied that the husband has made a full and frank disclosure about what his income has been during the relevant period and consequently I do not accept the bald assertion by the husband that this amount of money has been paid on living expenses.

3. Given that the proceeds of the wife’s partial property settlement has been added back against her onto the balance sheet (at items 11 and 12), and that those funds in part came from a share of the proceeds of the sale of Property D, it is reasonable to notionally add the $41,000 back against the husband.

Item 26 – Husband’s ATO debt

1. The husband asserts on the balance sheet that he has an outstanding debt to the Australia Tax Office of $210,000. However, his evidence in his financial statement sworn 27 May 2020 is that that debt (item 49) is estimated to be $68,967. The basis of the husband’s claim at item 26 was the subject of discussion with senior counsel for the husband prior to the lunch adjournment on 18 June 2020. Senior counsel asserted that there was evidence in a tender bundle, which had been provided electronically, that she wished to tender in relation to this outstanding liability and that she needed to find that evidence over lunch. Senior counsel however did not ultimately seek to tender any evidence in relation to the husband’s current taxation liabilities.

2. In any event, given the husband’s assertions as to his levels of income in recent years, it is difficult to understand, without being taken to the evidence, how a taxation liability of a magnitude that is claimed (or any taxation liability) might have arisen. In those circumstances, I mark this item as nil.

The adjustments sought by the parties

1. The wife seeks that the matrimonial pool be divided 65 per cent in her favour based on her contentions in respect of the formulation of the balance sheet.

2. At no time during the hearing did the husband clearly articulate what percentage of the assets he should receive as a result of findings in respect of contributions, by way of an adjustment for s 79(4)(d) – (g) considerations or overall. The husband suggests there should be a “considerable” adjusted based upon contributions if a one pool approach is adopted. What I am left with is the actual order that the husband sought (Schedule 2). Paragraphs 1, 2 and 3 of the property settlement order sought by the husband requires the wife to transfer to the husband the whole of her interest in JPL. By paragraphs 4, 5, 6 and 7 the husband seeks one half of the interest in Property I, currently held in joint names, by way of a payment by the wife to him (on the value agreed at the trial that sum would be $1,500,000) or by way of a sale of Property I and an equal division of the proceeds of sale.

3. Paragraphs 12 and 13 leave all other assets and liabilities with the party who holds them and significantly that would leave the whole of the interest in O Town with the husband.

4. If orders were made in the form sought by the husband, then the division of assets would be 70.63 per cent to the husband and 29.37 per cent to the wife based upon a distribution of assets and liabilities in accordance with the following table:

Husband received 70.63%
Assets
Item No.	Description	Percentage	Value
1	G Street, Suburb H (Property I)	50%	$1,500,000
2	XX Street, O Town	100%	$1,370,000
3	JPL	100%	$814,000
7	Cash in ANZ Bank	100%	$934
8	Motor Vehicle 2	100%	$2,000
9	Cash in ANZ Bank	100%	$110,260
10	Cash in YY Bank	100%	$513,282
13	Loan to JPL	100%	$652,357
14	Household contents	100%	$0
15	Business items in husband's possession	100%	$0
16	Income from JPL	100%	$0
17	Funds in McGirr Lawyers trust account	100%	$249,432
19	Income from JPL	100%	$0
20	Proceeds from sale of Property D	100%	$41,000
23	Superannuation	100%	$0
Liabilities
Item No.	Description	Percentage	Value
25	Credit card	100%	$0
26	ATO debt	100%	$0
27	Debt to Suburb Q Council	100%	$8,373
Net Assets		$5,244,892
Wife receives 29.37%
Assets
Item No.	Description	Percentage	Value
1	G Street, Suburb H (Property I)	50%	$1,500,000
4	Cash in bank accounts	100%	$1,542
5	Motor Vehicle 1	100%	$1,800
6	Household contents	100%	$0
11	Proceeds of partial property settlement	100%	$400,000
12	Proceeds of partial property settlement	100%	$206,155
18	Funds in Yates Beaggi trust account	100%	$0
21	Super Fund 1	100%	$12,048
22	Super Fund 2	100%	$59,359
Liabilities
Item No.	Description	Percentage	Value
24	Credit card	100%	$0
Net Assets		$2,180,904

Contributions

1. Neither party brought any significant assets to the relationship which commenced in 1973. They were both young (21 years of age) and owned little by way of assets. There is a dispute between the parties as to whether the husband provided $8,000 in savings. Given the length of the marriage and the substantial contributions which occurred since that time, any initial contribution by the husband of that amount is of little relevance.

2. Both parties were employed at the commencement of their relationship. The wife was a trainee health professional earning approximately $25 per fortnight. The husband was an apprentice, earning approximately $68 per week.

3. The wife paid for all groceries and clothes for the parties from the commencement of their relationship.

4. The wife was subsequently employed between 1975 to 1978 as a health professional, earning approximately $150 per week.

5. In 1979, JPL was incorporated and operated a sales business. Both the husband and wife were directors. The wife was the company secretary. The shares were allocated 75 per cent to husband and 25 per cent to the wife.

6. JPL was the primary source of income and benefits for the parties while they were together and then from the time of separation, for the husband. It was the husband who principally attended to the business. The wife did provide the company with some accounting services as referred to below, including for a short period after the separation.

7. As set out in the detailed chronology, the parties and JPL acquired a number of real properties during their relationship and apart from Property I and the business, all were sold prior to the separation. Those include the following:

   a)BB Street, Suburb CC;

   b)The Suburb S property (the business);

   c)FF Street, Suburb S;

   d)GG Street, Suburb HH;

   e)JJ Street, Suburb KK;

   f)LL Street, Suburb MM;

   g)Property I (the matrimonial home).

8. After the separation, the husband acquired property all of which was subsequently sold apart from the husband’s current home at O Town:

   a)UU Street, Suburb S;

   b)E Street, Suburb F;

   c)Property D;

   d)XX Street, O Town.

9. In addition to JPL, the husband and wife commenced two other businesses, one in SS Town and another in Suburb OO.

10. The Suburb OO business commenced operations in about early to mid-1990’s through JPL.

11. The SS Town business was operated through a new company PP Pty Ltd which was incorporated on 12 September 1995. Both the husband and wife were directors of PP Pty Ltd and the equal and only shareholders of it. The company acquired a business in SS Town for about $300,000.

12. About a year before the parties separated they were in a perilous financial position.

13. PP Pty Ltd owed significant debts, said by the husband to approximate $3.5 million. These included debts to financiers, such as Company A, ZZ Finance and the Advance and State Banks.

14. Such debts had been secured and guaranteed by the husband and wife, and JPL.

15. To help pay the debts, the Suburb MM property was sold, monies were borrowed from the wife’s mother ($50,000), TT Company shares were sold and part of the wife’s inheritance from her late father ($7,000) was used.

16. In about late 1998 the husband approached his father for a loan of $110,000 for the purposes of the husband paying business creditors, which the husband’s father provided interest free.

17. This loan was substantially extinguished when the husband’s parents sold a business in about 1999 and made a distribution of $100,000 to each of their three children, but only gave $12,000 to the husband, given that $88,000 was still owing under this loan.

18. In January 1999, the husband borrowed two amounts from his father $550,000 secured against Property I and $333,000 secured against Suburb S. Interest was payable under the terms of those loans, but the husband did not pay that interest at the times provided in the mortgages. In January 2000, the loans were rolled over and the amounts were increased to $580,000 and $350,000. The new mortgages to secure those amounts were interest free.

19. So by January 2000 the husband had borrowed $930,000 from his father interest free. The January 2000 mortgages required a total principal repayment at a rate of $4,640 each month with a requirement that they be discharged by December 2005.

20. The wife conceded that had it not been for the loans provided by the husband’s father, both the Property I and Suburb S properties would have been lost by the time of separation and would not be part of the property pool today.

21. The wife claims that these loans were provided for the benefit of both parties and their family and should therefore be seen as a joint contribution by the husband and wife. However without more, I find the advances that were interest free to be contributions made by the husband’s father on behalf of the husband (Gosper v Gosper (1987) FLC 91-810; Kessey v Kessey (1994) FLC 92-495).

22. During the marriage, the husband’s primary role was the ongoing operation of the JPL business (including the Suburb OO and SS Town businesses).

23. The wife worked full time in JPL until the birth of her first daughter in 1982. The wife worked full time with the Husband in the establishment of the JPL business. The wife was paid approximately $250 per week.

24. Following the birth of their first child, the wife’s primary role was as homemaker and care giver for the three children and the husband.

25. Following the birth of the parties’ first daughter, Ms X, the wife continued to undertake accounting duties for JPL from home. Immediately following the birth of her second daughter, Ms Y, in 1983, the wife continued to work one day a week for JPL, principally in the area of accounts.

26. The birth of their third son, Mr Z, in 1985, involved serious medical complications with Mr Z suffering from kidney and liver failures. This required full time dedication to the welfare of Mr Z.

27. By and from 1988, the wife continued to assist with JPL, in respect of its accounts, working approximately one week every month.

28. Between 1995 and 1998, the wife worked full time at JPL whilst the husband worked primarily at PP Pty Ltd. The wife received no additional income beyond her normal household allowance provided by the husband.

29. It is impossible to make any assessment of the actual assets the parties had at separation. The debts generated by the failure of the SS Town business were very large and required an infusion of borrowed capital and the liquidation of other assets. By the date of separation there was about $930,000 owing. At that point the significant assets retained by the parties were Property I and JPL which held Suburb S and continued to operate a business from that site.

30. The wife ceased working at JPL in about mid 2000 when she was told by the Husband that “you are not needed, and you should leave”. The husband concedes that even though the wife was a director and shareholder of JPL, after the separation he did not contemplate that the wife had any interest in the business nor that she was seeking a property settlement order and concludes that accordingly “I conducted the business as if it were entirely my own”.

31. After separation, the husband continued to contribute his personal exertions towards the day to day operations of JPL and retained all benefits from JPL save for an amount of $550 per week paid (irregularly) by the husband to the wife until about 2003 when such payments ceased. He has received benefits from JPL since the end of 1999 to present.

32. The wife submits that she made a contribution to the benefits that the husband received from JPL after the separation as a result of her not making any claim for dividends arising from her 25 per cent shareholding in JPL. I am unable to make any assessment as to the profitability of JPL after a reasonable notional allowance has been made for the husband’s remuneration as a result of his personal exertions in the company. It is important however to observe that between January 2000 and 27 March 2013, it appears that the husband had been able to pay back approximately $637,000 of the $930,000 borrowed from his father. Some of that money is accounted for in the net proceeds of the sale of Suburb MM and UU Street but I infer part of it was as a result of income generated through JPL. The evidence does not allow anything resembling a precise accounting.

33. Throughout the marriage the wife was the principal homemaker and parent. The wife was the parent who ordinarily attended the children’s school, the extra-curricular activities of the children, the home and the husband, and the major provider of household chores. The wife asserts the husband did not attend the children’s school functions, sports days or parent/teacher meetings. Whilst that is likely to be an exaggeration, I accept that the wife was heavily involved in those activities and the husband was not. The husband did attend to the maintenance of the exterior of Property I when he was there. At the time of and following separation in 1999, the wife was and continued to be the full-time carer for their three children, Ms X in year 12, Ms Y in year 10 and Mr Z in year 9. The ongoing care for Mr Z included the need from 2006 to fit Property I with necessary equipment to enable him to receive haemo-dialysis equipment at home.

34. During the period of the operation of the SS Town business, the husband spent significant amounts of time at SS Town and for a period only returned home approximately one weekend a month.

35. The wife conceded in cross examination that she had exaggerated the amount she had cared for animals on Property I and the amount of stock fees generated.

36. Following separation, the husband provided no assistance in the maintenance of Property I. All maintenance was provided by the children and the wife’s nephew.

37. The parties received two windfalls during their relationship. In 1986 the husband was a one third winner of Lotto receiving $168,863.67. The funds were used to assist in the acquisition of Suburb HH which was in turn sold with the funds used to acquire Property I.

1. Also in 1986, the husband won $230,000 on a horse race. Those funds were used to acquire Suburb MM.

2. Consistent with the principles in Zyk v Zyk (1995) 128 FLR 28, these windfalls during the relationship should be treated as joint contributions, particularly given they were received during the middle of the cohabitation.

3. In about 2013 the husband received an inheritance of $71,600 from his sister’s estate.

4. In 2013/2014 the husband received by instalments, an inheritance from his late father’s estate totalling $1,011,022. Exhibit “R-22” of the husband’s trial affidavit is a letter from the lawyers for the estate of his late father dated 30 March 2015 setting out the distributions. The first distribution on 27 March 2013 was only in the sum of $64,562 because, as was noted by the lawyers for the estate, a deduction had been made in the sum of $293,156.70 which was said to be the amount still outstanding under the borrowings in 2000.

5. The receipt by the husband in 2013 and 2014 of about $1 million from his father’s estate is a very significant contribution to the current assets of the parties held by them jointly, individually and through JPL. In raw terms, $1 million is 13.5 per cent of the current net pool (including items notionally added back to that pool $1,000,000/$7,425,796) and if accounted for mathematically, would lead to an adjustment of 6.75 per cent in the husband’s favour. The interest free loans that the husband obtained from his father shortly before separation are also significant in the sense that had it not been for those loans, it is likely that the current asset pool would be significantly less.

Conclusion in relation to contributions

1. Had it not been for the interest free loans in excess of $1 million provided by the husband’s father, both Property I and Suburb S would have been lost. That borrowing was discharged as a result of contribution by the husband from a number of sources, including:

   ·An amount of $293,156 from an inheritance the husband received from his father’s estate;

   ·The sale of Suburb MM that had been acquired prior to the separation;

   ·The sale of UU Street, Suburb S which had been acquired by the husband after separation; and

   ·Income generated from JPL which, whilst based on the business that existed as at the date of separation, relied upon the husband’s personal exertions to generate profit after separation.

2. In addition, the remaining part of the husband’s inheritance of about $700,000 along with the husband’s sales of Suburb F and Suburb D which he acquired after separation, provided the basis for the assets that are on the balance sheet and item 2 (O Town), items 9 and 10 (cash at bank) and items 11 and 12 (the two proceeds of the wife’s partial property settlement orders).

3. Taking into account the myriad of contributions that both parties made in the 25 years that they were together and the contributions that particularly the husband has made since the separation, including the introduction of an inheritance of $1 million, and the contributions made on the husband’s behalf by way of interest free loans provided by the husband’s father, I assess that the contributions of the parties to the assets as set out on the balance sheet should be assessed as being 60 per cent to the husband and 40 per cent to the wife.

Section 79(4)(d)-(g) considerations

1. The husband and wife are both 66 years old.

2. The parties both say that they have significant and ongoing health issues.

3. Notwithstanding the legal fees spent on this matter, neither party filled any admissible expert evidence in relation to their current health issues. Both parties successfully objected to the tendering of statements in respect of their health from treating doctors.

4. The evidence that remains in relation to the wife’s health and its effect on her earning capacity is that she will not be able to work again in the future. The wife describes that she has problems with her mobility due to back pain.

5. The evidence that remains in relation to the husband’s health and its effect on his earning capacity would support a finding that his future ability to work is greatly curtailed. The wife suffered an injury at work in 2013 and ceased employment in September 2014.

6. The husband has a partial amputation of a limb, diabetes, is morbidly obese and heavily medicated. The husband has satisfied Commonwealth authorities that he needs a carer but I find that he is still actively working in the business although I am unable to say with any certainty the extent of that activity.

7. In the wife’s outline of argument a submission is made that having regard to the nature of the husband’s health issues disclosed by him and his concerns expressed about his longevity, his life expectancy appears to be significantly shorter than the wife. Whilst that submission might be able to be generally put based on life expectancy tables, without medical evidence I place very little weight on that submission.

8. The wife receives an aged pension in the sum of $472.15 per week.

9. The wife gives evidence that Property I is in a significantly dilapidated condition and is in need of urgent repairs. She says it has a collapsed ceiling, water leaks and other issues that make significant parts of the house uninhabitable. This is not an issue of significance as Property I has been valued on the balance sheet in its current state of repair and condition. I note in passing, as part of her application to Rees J, the wife sought a lump sum payment of $83,776 for necessary repairs to Property I but as has been discussed, the interim property settlement order of $250,000 was paid in legal costs.

10. Apart from rates and insurances the husband leads no specific evidence about any amount necessary to maintain the O Town property.

11. Whilst on the one hand the parties lived a relatively frugal life during their marriage, nevertheless they did enjoy lengthy overseas holidays and the children were sent to private schools. The husband was involved in his business activities, the sports world and it appears, as a somewhat successful gambler.

12. The husband has been in a de facto relationship with Ms V for 14 years according to Part H of his financial statement and 16 years according to his oral evidence. On 8 April 2020 a direction was made that the husband provide evidence of the financial arrangements between himself and Ms V and so far as was relevant, her financial circumstances. The husband did not call Ms V as a witness in his case. The evidence about their financial relationship is limited.

13. The husband’s financial statement indicates that Ms V is 55 years of age; receives $465 per week and the husband otherwise pays benefits to Ms V of $210 per week.

14. I infer that Ms V knew about the existence of these proceedings. She was in fact assisting the husband in wrangling the documents during the husband’s cross examination. She did not seek to become a party to the proceedings. As indicated, it would not be realistic to ignore possible future claims by Ms V. She has been the husband’s de facto partner for 14 – 16 years. It is likely that Ms V may have some equitable claim in respect of the O Town property, but as I have said, there is insufficient evidence upon which to make any precise finding about that.

15. The wife did not commence any application until 14 years after the parties had separated. I have regard, to the extensive delays in this matter which have meant that the wife has continued to have had the advantage of the occupancy of Property I.

Full and frank disclosure

1. The husband says in his trial affidavit that he is aware of his duties of disclosure to the court and to the wife and that the wife has raised issues in the proceedings that he has not made a full and frank disclosure. The husband asserts that that is not correct. The husband relies upon the fact that the wife did not commence proceedings until 14 years after the separation and given that the husband asserts he did not contemplate that she would do so, there were many documents he did not retain. The husband says that he provided the applicant’s solicitors and the valuers with all material they requested.

2. Mr R was commissioned by the parties to provide expert forensic accounting evidence as to the value of JPL. He provided an affidavit on 30 September 2016 and a report on 17 December 2019. He records that he provided engagement letters to the parties in June 2015 but the husband did not sign that letter until January 2016.

3. At paragraph 12 of his affidavit, he provides a copy of an email sent to both of the parties’ lawyers on 29 March 2016 advising that he had received incomplete responses to his requests for financial information leading to the need to clarify items on a number of occasions.

4. On 5 April 2016 the husband’s new lawyers (Mr McGirr) wrote a letter where he indicated that there was a possibility that the husband would seek to have Mr R discharged as the single expert and again, on 6 July 2016 Mr R was told by the husband’s lawyers that such an application was being prepared.

5. At paragraph 1.5 of Mr R’s report, he says:

   After reviewing the financial information provided to me, I have requested further documents and clarification as I held concerns regarding the accuracy and reliability of the financial statements provided to me. However I have not been provided with adequate responses and I have been instructed to complete my report on the basis of the information provided to me.

6. As a result, Mr R made clear that he could only provide a qualified report prepared on a restricted scope basis which contained only qualified opinions.

7. At paragraph D.6 and D.7, Mr R records the following:

   D.6The business bought and sold goods. Stock was purchased from auction houses using guarantees supplied from the husband on a one to two-week credit arrangement. The business also sourced used goods, buying directly from the public. The business serviced the needs of retail buyers and people requiring a valuation for their goods.

   D.7The business has been operated by the husband since its inception. Due to increased competition from larger businesses and online businesses, Mr R says he understood that the business has experienced a reduction in trading. Mr R records that he has been advised that the husband wishes to retire. At the date of the report he understood that Suburb S was not leased but used rent free by another business for the security of the property.

8. In his report Mr R identifies the following lack of information provided by the husband:

   ·The level of his stock;

   ·Lease arrangements with those who have purchased goods from him;

   ·No details of any plant and equipment; and

   ·No details in relation to an asserted trade creditor.

9. I accept Mr R’s evidence in relation to difficulties that he has had over a significant period of time in obtaining basic information about the husband’s trading in goods. This is particularly relevant to the husband’s lack of response to Mr R’s request in relation to him providing stock lists and copies of leasing documents with those who are purchasing goods from JPL by way of lease arrangements. 

10. The wife issued a subpoena to the government regulator and the records of that department as at 3 April 2020 were available to the lawyers for both of the parties for inspection prior to the commencement of the hearing who were given leave on 13 May 2020. There is item which was listed in the husband’s personal name. This item is referred to in the husband’s financial statement. The records further show that there is either 32 or 33 active items which are listed in the name of JPL.

11. Discussions during the management phase of the hearing made it obvious that this was an issue that the wife sought that the husband address. There was nothing about the departmental records in the husband’s trial affidavit nor was leave sought to adduce any oral evidence in chief about these records.

12. JPL has in the past sold goods to persons on the basis that the purchase would be financed by JPL by way of a lease arrangement under which the title of the item would not pass to the owner until all payments under the lease had been made to JPL.

13. At paragraph 41.2 the husband asserts that JPL no longer trades in goods other than to receive small lease payments for items previously leased. He says that those payments will cease in approximately 12 months depending upon whether the owners maintain their obligations under the lease. The husband asserted that apart from Suburb S the only asset of JPL is the “small trail of lease payments left”, the husband shortly before the hearing gave details as to what those potential payments were without any corroborating evidence and in circumstances where up until that time he had failed to provide the single expert with details that had been requested in that regard. He annexed at R-31; tab 22, pages 92-93 of his trial affidavit, a list of the remaining six leases and the amounts outstanding. The husband gave evidence these were the only goods in respect of which JPL retained an active interest.

14. The husband said he had not checked his records against those produced by the department to attempt to work out what had happened to any of the items on the records of the department which he now asserted were not items in respect of which JPL had any active interest. However in oral evidence, the husband confidently asserted that none of the entries in the departmental records which showed JPL actively having an interest in items, which were not on the list of six items he had provided, were inaccurate records. In cross examination he asserted that the records might be inaccurate for a couple of reasons:

    ·The new owners had not completed the paperwork to register their ownership of the items; and

    ·He would buy items from an auction house on one week’s credit but then send one or two back. The auction house would complete paperwork after the auction but when the item was returned to them would not cancel the paperwork.

15. The husband also asserted that the department might keep a computer system (the purpose of which was to maintain a record of the existence of items and their ID numbers) which would allow multiple entries of active ownership of the same item. Without the husband adducing evidence from the department that that is a feature of their maintenance of the records of item ownership, I do not accept that that is so.

16. I generally do not accept the husband’s oral evidence about JPL’s ownership of items and prefer to rely upon the record of the government department charged with recording the ownership of the items. I find it is probable that JPL retains an interest in some, if not the bulk, of the items in the departmental records and that JPL continues to trade in the business today.

17. I find that the records of the department are demonstrative of JPL continuing to run an active business.

18. The husband controls this business from O Town using the assistance of third parties. For example, the husband disclosed on the fourth day of the hearing (a day during which the husband gave evidence for the whole day) that he had arranged for JPL to repossess an item in respect of which there had been default in lease payments. That item is currently being maintained after which JPL would again offer it for sale.

19. In his trial affidavit, the husband asserts that JPL does not receive rental income from the Suburb S property and has not done so for a period of time. At paragraph 41.3 of his affidavit the husband asserts that the property owned by JPL at Suburb S is not leased. He asserted that “for security reasons” he has allowed a Mr AB to occupy the property rent free and he “sells a small number of second-hand goods”. The wife had subpoenaed Mr AB but did not call him. More importantly, the husband did not seek to call Mr AB as a witness in his case to corroborate the assertions that the husband made in relation to his arrangements with Mr AB. I assume Mr AB’s evidence would not have assisted the husband’s case.

20. The husband’s evidence in his trial affidavit sworn 20 May 2020 is to be contrasted with the husband’s oral evidence that early in 2020 as a result of viewing Mr AB’s Facebook postings, he formed the conclusion that Mr AB was actively and profitably trading goods out of the Suburb S site. This resulted in the husband having a conversation with Mr AB about the requirement that he will have to pay rent in the future. He said that his further pursuit of that conversation has been suspended as a result of the current COVID-19 pandemic. Mr R’s valuation has been carried out on the basis that JPL receives no income by way of rent for the Suburb S site.

21. I conclude that the husband has not fully disclosed the extent of his continuing involvement in the trading of goods nor what exactly the situation is in relation to him receiving some benefits from Mr AB’s occupancy of the Suburb S property. I conclude that I do not need to be unduly cautious when assessing the benefits that JPL still provide to the husband today. JPL would not have existed as a trading entity without the continued personal exertion of the husband post-separation.

22. As indicated, the wife has paid $777,100 in legal fees and the husband has paid $483,936 in legal fees. Of those amounts, the wife has had added back onto the balance sheet, at items 11 and 12, an amount of $606,000 and the husband has had added back onto the balance sheet, at item 17, an amount of $249,432.

23. The wife claims that the disparity in the expenditure of paid legal fees should be taken into account because that disparity arose out of the husband’s failure to provide full and frank disclosure. I shall take into account the fact that some of the legal fees paid to date by the wife relate to her efforts to uncover details of the trading activities of JPL but the evidence does not allow me to make any real assessment of how much of the legal fees the wife has incurred have been reasonably spent on that quest.

Conclusion in relation to s 79(4)(d)-(g) considerations

1. Having regard to all relevant s 79(4)(d)-(g) considerations, I find that an adjustment should be made in the wife’s favour of 5 per cent.

Just and equitable

1. Having regard to the findings in relation to contributions and s 79(4)(d)-(g) considerations, an overall adjustment of the parties’ property interests would result in an order being made of a division of the net assets 55 per cent to the husband and 45 per cent to the wife. That result could be achieved by distribution in accordance with the following table:

Husband gets 55%
Assets
Item No.	Description	Percentage	Value
2	XX Street, O Town	100%	$1,370,000
3	JPL	100%	$814,000
7	Cash in ANZ Bank	100%	$934
8	Motor Vehicle 2	100%	$2,000
9	Cash in ANZ Bank	100%	$110,260
10	Cash in YY Bank	100%	$513,282
13	Loan to JPL	100%	$652,357
14	Household contents	100%	$0
15	Business items in husband's possession	100%	$0
16	Income from JPL	100%	$0
17	Funds in McGirr Lawyers trust account	100%	$249,432
19	Income from JPL	100%	$0
20	Proceeds from sale of Property D	100%	$41,000
23	Superannuation	100%	$0
Liabilities
Item No.	Description	Percentage	Value
25	Credit card	100%	$0
26	ATO debt	100%	$0
27	Debt to Suburb Q Council	100%	$8,373
Husband receives from Wife		$339,296
Net Assets		$4,084,188
Wife gets 45%
Assets
Item No.	Description	Percentage	Value
1	G Street, Suburb H (Property I)	100%	$3,000,000
4	Cash in bank accounts	100%	$1,542
5	Motor Vehicle 1	100%	$1,800
6	Household contents	100%	$0
11	Proceeds of partial property settlement	100%	$400,000
12	Proceeds of partial property settlement	100%	$206,155
18	Funds in Yates Beaggi trust account	100%	$0
21	Super Fund 1	100%	$12,048
22	Super Fund 2	100%	$59,359
Liabilities
Item No.	Description	Percentage	Value
24	Credit card	100%	$0
Wife pays Husband		$339,296
Net Assets		$3,341,608

1. Standing back I consider that overall result to be one that is just and equitable.

2. In the event that the wife is unable to pay the amount of $339,296 to the husband within a period of 42 days, then Property I is to be sold. The husband would receive 11.3 per cent of the proceeds of the sale ($339,296 ÷ $3,000,000). In the event that the property sells for more than $3 million, then the husband should be entitled to 55 per cent and the wife 45 per cent of that increase. If the property sells for less than $3 million then the reduction will be borne as to 55 per cent to the husband and 45 per cent to the wife.

3. The husband’s application sought that the wife make available for collection by him items that he says are in the former matrimonial home, being:

   a)the Motor Vehicle 3;

   b)Crystal figurines;

   c)Photographs and trophies;

   d)Sporting equipment and signed ARL jersey;

   e)Commemorative plaque;

   f)Samurai swords.

4. This application was not actively pursued in any way by the husband during the hearing. There is no evidence of the wife acknowledging that she possesses these items and I will not make the order sought.

I certify that the preceding two-hundred and thirty seven dollars (237) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts delivered on 25 September 2020.

Associate: 

Date: 25.9.20    

SCHEDULE 1

Wife

1. Wife’s case outline filed 24 May 2020

2. Wife’s trial affidavit filed 21 May 2020

3. Wife’s financial statement filed 20 May 2020

4. Affidavit of Affidavit of Ms AG filed 20 May 2020

5. Affidavit of Mr AH filed 20 May 2020

Husband

1. Husband’s case outline filed 24 May 2020

2. Husband’s trial affidavit filed 21 May 2020

3. Husband’s financial statement filed 22 May 2020

Experts’ reports

1. Report of Mr R dated 17 December 2019 (and Mr R’s affidavit 30 September 2016)

2. Valuation of G Street, Suburb H (Property I) by Mr AD dated 18 May 2020

3. Valuation of T Street, Suburb S by Mr AD dated 18 May 2020

4. Valuation of XX Street, O Town by Mr AD dated 18 May 2020

5. Joint valuation report of Mr AE dated 14 December 2018 as to Suburb H (Property I)

6. Joint valuation report of Mr AE dated 14 December 2018 as to Suburb S

7. Joint valuation report of Mr AE dated 14 December 2018 as to O Town

SCHEDULE 2

Orders sought by the wife

1. Within 28 days of Order the Husband do all acts and things and sign and execute all documents necessary to transfer to the Wife all of his right title and interest in the property situated at G Street, Suburb H being the whole of the land contained in certificate of title folio identifier lot … in deposited plan … such that it is held by the Wife without any encumbrance.

2. Within 28 days of Order the Husband do all acts and things and sign and execute all documents necessary to cause J Pty Ltd transfer to the Wife all of its right title and interest in the property situated at T Street, Suburb S being the whole of the land contained in certificate of title folio identifier lot … in deposited plan … such that it is held by the Wife without any encumbrance.

3. The Husband pay the Wife’s costs of and incidental to these proceedings as agreed within 28 days and absent agreement as assessed.

4. Within 28 days of Order the Wife do all acts and things and sign and execute all documents necessary to transfer to the Husband her shares in JPL and to resign as a director and secretary of that company.

5. Subject to these Orders and as between the parties, the Wife be declared the owner in equity of all property in her possession or under her control, including her entitled to superannuation.

Notation

1. In respect of the above Orders, both the Wife and Husband have received interim property distributions. Those were made pursuant to Orders of Rees J on 24 August 2016, concerning the receipt by each of the Wife and Husband of $206,155, and pursuant to Orders of Watts J on 8 April 2020, whereby the Wife received $400,000.   

2. The above Orders may require adjustment depending on the final valuations attributed to Suburb S and Property I

Orders sought by the husband

1. That within 14 days of the marking of these orders the Applicant wife shall:

   1.1.transfer to the Respondent the whole of her right title and interest in all shares held by her in J Pty Ltd ACN … (the company);and  

   1.2.Resign as a Director of the company.

2. That the Respondent or his lawyer shall prepare all necessary documents including a transfer and resignation to give effect to order 1.

3. The Respondent be responsible for any payment of duties, costs and fees (other than the cost of the execution by the Applicant of the documents referred to above) to give effect to this order.

4. That within 42 days of the date of these orders the Applicant shall pay to the Respondent a sum representing one half of the value of the property at G Street, Suburb H, New South Wales (“the former matrimonial home”) and being the whole of the land contained in folio identifier … and contemporaneous with this payment the Respondent shall transfer to the wife all of his right, title and interest in the former matrimonial home.

5. In the event that the wife does not comply with Order 4 the parties shall do all acts and things including signing all documents to cause the former matrimonial home to be listed for sale and for that purpose the Respondent shall be appointed as the trustee for the sale of the property and shall have the power to:

   5.1.Appoint a real estate agent to act on the sale;  

   5.2.Appoint a lawyer to act upon the sale; 

   5.3.Elect whether or not to conduct the sale of the former matrimonial home by public auction or by private treaty 

   5.4.nominate the minimum reserve price or contract price as the case may be

   5.5.nominate what repairs, if any, should be made to the property;

   5.6.sign all documents to give effect to the sale

   5.7.Disburse the sale proceeds in accordance with these orders.

6. In the event that the former matrimonial home is sold the proceeds of sale shall be disbursed as follows:

   6.1.the costs, expenses and commission of the real estate agent or agents acting on the sale of the property; 

   6.2.the costs, fees and disbursements of the lawyer or lawyers acting for the parties on the sale of the property; 

   6.3.adjustment of water rates and Council rates;  

   6.4.the cost of any necessary repairs to the property as recommended by the agents, and authorised by the husband;

   6.5.the balance to paid 50% to the wife and 50% to the husband.

7. That the Applicant do all things and acts sign all documents and give all consents necessary to give force and effect to these orders including:

   7.1.Making sure that the real estate agent has access to the property upon a request to do so;   

   7.2.Ensuring that the home and grounds are presented in a clean and tidy state prior to any open house or inspection;  

   7.3.Ensuring that the real estate agent is provided with a set of keys and access passes/ devices to gain entry to the property; 

   7.4.Ensuring that she does no act or thing that might discourage or dissuade a purchaser from purchasing the property; 

   7.5.Ensuring that the property is vacant at any open house or inspection.

8. In the event that either party refuses or neglects to execute any deed or instrument necessary to give effect to all any of these orders made that the Registrar of the Court at Sydney be appointed pursuant to Section 106A to execute the deed or instrument in the name of the Applicant and to do all other acts and things necessary to give validity and operation of the deed or instrument and the Applicant pay the costs of the Respondent on a solicitor/client basis in relation to obtaining the Registrar's signature.

9. That the Applicant within 14 days from the date of these orders make available for collection by the applicant of the following items located at the former matrimonial home:

   (a)the Motor Vehicle 3;

   (b)the husband's crystal figurines;

   (c)the husband's photos and trophies;

   (d)the husband's sporting equipment and signed ARL jersey;

   (e)the husband's Commemorative Plaque;

   (f)the husband's Samurai Swords.

10. That the Respondent have leave to relist the matter on seven days’ notice in respect of the implementation of all or any of these orders in relation to any further machinery required to effect the sale of the former matrimonial home.

11. That the Applicant pay the Respondent’s costs of and incidental to this application.      

12. Except as provided for in these orders each party is declared to the sole owner of any property in their possession at the date of these orders including bank accounts, business items, furniture and personal effects, shares, debentures and interests in any superannuation fund.  

13. Except as otherwise provided each party is declared to be solely responsible for any debt standing in their sole name as at the date of the making of these orders and shall indemnify the other party in relation to them.