Kellner & Kellner & Anor (No. 2)

[2018] FamCA 1000

FAMILY COURT OF AUSTRALIA

KELLNER & KELLNER AND ANOR (NO. 2) [2018] FamCA 1000

FAMILY LAW – PROPERTY – Final Orders – Where the parties were in a de facto relationship for 22 years – Where consideration is given to an alteration of property interests – Where the second respondent did not comply with orders of the Court and took no part in the proceedings – Where the applicant’s evidence is preferred to that of the first respondent – Where the first respondent failed to provide full and frank disclosure – Where the first respondent unilaterally continued to operate the partnership following separation and failed to account for income received including cash monies – Where the first respondent failed to pay liabilities, incurring interest payments, rates and taxes – Orders made for division of property as to 60 per cent to the applicant and 40 per cent to the first respondent – Orders made for the first respondent to pay to the applicant all outstanding costs orders in her favour which he has failed to pay.

Family Law Act 1975 (Cth) ss 79, 90RD, 90SF(3), 90SK, 90SM

Gould and Gould (2007) FLC 93-333
Khademollah and Khademollah (2000) FLC 93-050
Kellner & Kellner and Anor [2018] FamCA 359
Stanford & Stanford (2012) 247 CLR 108

APPLICANT: Ms Kellner

FIRST RESPONDENT: Mr Kellner

SECOND RESPONDENT: Ms King

FILE NUMBER: DNC 439 of 2012

DATE DELIVERED: 28 November 2018

PLACE DELIVERED: Adelaide

PLACE HEARD: Darwin

JUDGMENT OF: Strickland J

HEARING DATES: 15 – 19 January 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Looney QC with Ms Reece

SOLICITOR FOR THE APPLICANT:	Withnalls Lawyers
THE FIRST RESPONDENT:	In Person

THE SECOND RESPONDENT: Not Participating

Orders

1. Within twenty-eight (28) days of the date hereof, the applicant sign all documents necessary to effect a discharge of any mortgage and transfer to the first respondent, all of her right, title and interest in Property H, otherwise known as I Street, Suburb K (“I Street”).

2. Contemporaneously with the transfer referred to in Order (1) herein, the first respondent and the second respondent, at their sole cost, do all acts and sign all documents necessary to discharge ANZ investment loan #61, refinance I Street, and jointly and severally indemnify the applicant with respect to the payment of all loans, rates, insurances, and expenses in relation to that property.

3. The first respondent and the second respondent jointly and severally indemnify the applicant against all and any capital gains tax assessed in relation to the transfer or sale of I Street.

4. Within twenty-eight (28) days of the date hereof, the first respondent sign all documents necessary to transfer to the applicant all of his right, title and interest in Property B, otherwise known as C Street, Suburb D (“C Street”).

5. Simultaneously with the transfer referred in order (4) herein, the applicant indemnify the first respondent with respect to the payment of all rates, insurances and expenses in relation to that property.

6. Upon noting the order of Dawe J made on 10 March 2015 providing for Mr G Kellner to transfer to the applicant and the first respondent all of his right, title and interest in Property E, otherwise known as F Street, Suburb D (“F Street”), and upon the basis that that transfer will now be effected forthwith, within twenty-eight (28) days of the date hereof the first respondent sign all documents necessary to effect a discharge of any mortgage and transfer to the applicant all of his right, title and interest in the said property.

7. The applicant indemnify the first respondent against all and any capital gains tax assessed in relation to the transfer or sale of the properties at C Street and F Street.

8. Within twenty-eight (28) days of the date hereof, the first respondent pay to the applicant:

   (a)       The sum of $361,234; and

   (b)       The following amounts payable pursuant to the following orders:

Order	Amount
11.04.2014 – order 14	$1,661
17.10.2014 – order 14	$1,661
10.03.2015 – order 4	$5,500
09.04.2015 – order 3	$1,600
09.05.2015 – order 4	$500
22.04.2015 – order 3	$590
16.06.2015 – order 5	$2,000
13.11.2015 – order 2	$2,200
26.08.2016 – order 2	$9,926
26.08.2016 – order 3	$6,200
$31,838

(together “the payment sum”)

1. Upon payment by the first respondent to the applicant of the payment sum, the applicant, and to the extent necessary, the first respondent, shall do all acts and things necessary to arrange a discharge of MM Bank loan account 182/027864840 in the name of Kellner Pty Ltd, and the applicant shall refinance the loan, indemnifying the first respondent with respect to the payment of all loans, rates, insurances, and expenses in relation to the property at F Street.

2. In the event that the first respondent fails to make payment to the applicant pursuant to Order (8) herein, Property T, otherwise known as U Street, Suburb V (“U Street”) shall forthwith be listed for sale with NN Real Estate as the nominated real estate agent on the following terms and conditions:

   (a)The property be listed for sale by private treaty for a period of sixty (60) days at a price of $1,000,000;

   (b)The applicant and the first respondent co-operate in every way with the real estate agent in relation to the marketing of U Street for sale, including making the keys readily available, allowing inspections of U Street at all times reasonably requested by the agent and ensuring that U Street is clean, neat and in good order at the time of inspection by any prospective buyer;

   (c)In the event an offer is received that is at least 90 per cent of the listing price, the first respondent shall accept the offer and shall execute the contract of sale and sign all other documents necessary to complete the sale, including all transfer documentation forthwith upon submission of the same to him by the agent or the solicitor for the purchaser;

   (d)The contract of sale shall provide for completion within thirty (30) days of the contract;

   (e)In the event U Street is not sold during the period of private treaty of sixty (60) days, U Street shall be listed for sale by auction with the contracts to be prepared on an unconditional cash settlement basis and the auction shall proceed on the following terms and conditions:

   (i)       The auctioneer shall be as nominated by the applicant;

   (ii) The auction shall take place within fourteen (14) days of the expiry of the said period of sixty (60) days;

   (iii)The reserve price be $950,000 or as recommended by the auctioneer;

   (iv)The first respondent shall pay and be responsible for the payment of all auction expenses payable before U Street is auctioned.

   (f)In the event U Street has not sold by auction or private negotiation at the reserve price as recommended by the auctioneer pursuant to Order (10)(e) herein, the applicant and the first respondent shall do all acts and sign all documents necessary to list U Street for sale by a second auction on the following terms and conditions:

   (i)       The auctioneer shall be as nominated by the applicant;

   (ii)The auction shall take place within fourteen (14) days of the first auction;

   (iii)     There be no reserve price;

   (iv)The first respondent shall pay and be responsible for the payment of all auction expenses payable before U Street is auctioned.

   (g)Upon the sale of U Street, the proceeds be paid in the following order and priority:

   (i)       Sales agent’s commission and conveyancing expenses;

   (ii)      Payment of the MM Bank business maximiser account #40;

   (iii)The payment sum to the applicant, and in the event of a loss, the first respondent shall secure all funds necessary to make payment of any loss and indemnify the applicant with respect to the same; and

   (iv)Balance to the first respondent.

3. Pursuant to Section 106A of the Family Law Act 1975, the Registrar or Deputy Registrar of the Family Court of Australia at Darwin be appointed to execute all deeds or instruments and sign all documents necessary in relation to the discharge of any mortgage and/or the transfer of F Street, C Street and U Street for and on behalf of the first respondent upon presentation to the Registrar of an affidavit as to the request made to the first respondent to execute documents and his failure to do so within seven (7) days of presentation to him of the instrument to sign.

4. The applicant retain the following chattels and investments for her sole use and benefit:

   (a)      The shares held by the applicant in S Pty Ltd;

   (b)      All jewellery and personal effects in her possession;

   (c)      All funds standing to the applicant’s credit in the following accounts:

   (i)       ANZ access advantage cheque account #04;

   (ii)      National Australia Bank account #33;

   (iii)     National Australia Bank account #49; and

   (iv)     National Australia Bank account #11.

   (d)      All member entitlements held in OO Scheme Member No. #48.

5. The first respondent retain the following chattels and investments for his sole use and benefit:

   (a)      Motor vehicle 2 Northern Territory registration …;

   (b)      Motor vehicle 3;

   (c)All monies standing to the first respondent’s credit in any bank account held in his name;

   (d)All right, title and interest in U Street save and except in the event U Street is required to be sold pursuant to paragraph (10) herein.

6. The first respondent do all acts and things necessary and provide to the applicant all minutes of meetings and any ASIC forms for execution by the applicant resigning her directorship and transferring her 25 ordinary shares in Kellner Pty Ltd to the first respondent at the first respondent’s sole expense.

7. The first respondent indemnify the applicant with respect to the following:

   (a)Save and except in relation to MM Bank loan account 182/027864840, any and all liabilities of Kellner Pty Ltd including any fees, invoices or debts due or owing to PP Accountants;

   (b)All personal taxation liability of the first respondent payable to the Australian Taxation Office;

   (c)All personal taxation liability of the applicant payable to the Australian Taxation Office in relation to any income of QQ2 Pty Ltd;

   (d)To the extent necessary, all repayments (including interest) due and payable in relation to MM Bank business maximiser account 031086240;

   (e)Any and all liabilities of the partnership business QQ2 Pty Ltd.

8. The applicant indemnify the first respondent with respect to the following:

   (a)       National Australia Bank visa #48; and

   (b)       National Australia Bank visa #33.

9. Unless otherwise specified in this order and except for the purpose of enforcing the payment of money due under this order or any subsequent order:

   (a)Each party shall be entitled to the exclusion of the other to all other property and chattels of whatsoever kind or nature in the possession of such party as at the date hereof and for this purpose, bank accounts are deemed to be in the possession of the person whose name appears on the bank records thereof, superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or working future provides the conditions for payment out of such entitlements; and

   (b)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to this order.

10. For the purpose of providing security for the payments due to the applicant pursuant to these orders but subject to paragraph (10) herein the first respondent is restrained and an injunction is granted restraining him from dealing with his interest in the property at U Street until payment is made in full to the applicant.

11. Pending payment of the payment sum the first respondent do pay all interest due and payable on MM Bank business maximiser account 031086240 for and on account of U Street, and any rates, insurances and maintenance of the said property as and when they fall due.

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 Kellner & Kellner and Anor 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 DARWIN

FILE NUMBER: DNC 439 of 2012

Ms Kellner

Applicant

And

Mr Kellner

First Respondent

And

Ms King
Second Respondent

REASONS FOR JUDGMENT

Introduction

1. Before the court are competing applications between the applicant and the first respondent seeking orders for property settlement.

2. On 27 October 2017 Ms Kellner (“the de facto wife”) filed an Amended Initiating Application setting out the orders she sought, and on 8 December 2017 Mr Kellner (“the de facto husband”) filed a Response setting out the orders that he sought. For convenience I will refer to the de facto wife and the de facto husband together as “the parties”.

3. On 14 March 2014, Judge Harland, when the matter was in the Federal Circuit Court of Australia before being transferred to the Family Court of Australia on 14 May 2014, ordered that Ms King (“the second respondent”) be joined as a party to the proceedings. She is the daughter of the de facto husband and she holds an interest in one of the properties the subject of the respective orders sought by the parties. As I will explain later in these reasons, she sought no order at the hearing of these proceedings, and as between the de facto wife and her, the proceedings became undefended.

4. The matter was first heard by Dawe J over 10 days in April, May and July 2015, and her Honour made final orders for property settlement on 8 April 2016.

5. The de facto husband subsequently appealed her Honour’s orders. On 20 July 2017 the Full Court allowed the de facto husband’s appeal by consent, set aside the orders made on 8 April 2016, and remitted the matter for rehearing.

6. On 15 September 2017, Berman J made orders listing that rehearing before me over five days commencing on 15 January 2018. His Honour also made orders to prepare the matter for hearing, including for the filing by each party, as well as the second respondent, of all Applications, Reponses, affidavits and Financial Statements on which they intended to rely. The de facto wife and the de facto husband complied with these orders, but the second respondent did not; she failed to file any documents in compliance with his Honour’s orders, and apart from one brief appearance on the morning of the third day of the trial, she failed to appear at all. To repeat, I will say more about this later in these reasons.

The orders sought by the parties

The de facto wife

1. Despite setting out the orders sought by her in her Amended Initiating Application, in her case outline, and in an amended case outline, the orders ultimately sought by the de facto wife are those contained in a document provided to the court by her senior counsel on the last day of the trial, namely 19 January 2018. Those orders are as follows:

   1.That within 14 days, the Applicant sign all documents necessary to effect a discharge of any mortgage and transfer to the First Respondent, all of her right, title and interest in [Property H], otherwise known as [I Street, Suburb K] (“I Street”).

   2.That simultaneously with the transfer referred to at Order 1 herein, the First Respondent and the Second Respondent at their sole cost do all acts and sign all documents necessary to discharge ANZ Investment Loan #61, refinance I Street and forever hold the Applicant harmless with respect to all loans, rates, insurances and expenses.

   3.That the First Respondent and Second Respondent indemnify the Applicant in relation to all and any capital gains tax applicable from the transfer or sale of [I Street].

   4.That within 14 days, the First Respondent sign all documents necessary to effect a discharge of any mortgage and transfer to the Applicant all of his right, title and interest in the following real estates:

   (a)[Property B], otherwise known as [C Street, Suburb D] (“[C Street]”); and

   (b)[Property E], otherwise known as [F Street, Suburb D] (“[F Street]”).

   4A.That within 28 days the First Respondent pay to the Applicant:

   (a)the sum of $360,000; and

   (b)the following amounts payable pursuant to the following orders:

Order	Amount
11.04.2014 – order 14	$1,661
17.10.2014 – order 14	$1,661
10.03.2015 – order 4	$5,500
09.04.2015 – order 3	$1,600
09.05.2015 – order 4	$500
22.04.2015 – order 3	$590
16.06.2015 – order 5	$2,000
13.11.2015 – order 2	$2,200
26.08.2016 – order 2	$9,926
26.08.2016 – order 3	$6,200
$31,838

(together “the payment sum”)

5.That upon payment by the First Respondent to the Applicant of the payment sum, the Applicant shall do all acts and things necessary to arrange a discharge of [MM Bank] loan #40 and refinance the loan indemnifying the Applicant at the First Respondent’s sole expense.

6.In the event the First Respondent fails to make payment to the Applicant pursuant to Order 4A herein, [Property T], otherwise known as [U Street, Suburb V] (“[U Street]”) shall forthwith be listed for sale with [NN Real Estate] as the nominated real estate agent on the following terms and conditions:

(a)For sale by private treaty for a period of 60 days at a listing price of $1,000,000;

(b)The parties are to co-operate in every way with the real estate agent in relation to the marketing of [U Street] for sale, including making the keys readily available, allowing inspections of [U Street] at all times reasonably requested by the agent and ensuring that [U Street] is clean, neat and in good order at the time of inspection by any prospective buyer;

(c)In the event an offer is received that is at least 90% of the listing price, the First Respondent shall accept the offer and sign all documents and do all acts necessary to effect the sale;

(d)That upon an offer being accepted for the sale of [U Street], the First Respondent shall execute the contract of sale and all other documents necessary to complete the sale of [U Street], including all transfer documentation forthwith upon its submission to each of them by the agent or their solicitor;

(e)The contract of sale shall provide for completion within 30 days of the contract;

(f)In the event [U Street] is not sold during the period of private treaty of 60 days, [U Street] shall be listed for sale by auction within 14 days with the contracts to be prepared on an unconditional cash settlement basis and the auction shall proceed on the following terms and conditions:

(i)The auctioneer shall be as nominated by the Applicant;

(ii) That the auction shall take place within fourteen 14 days at conclusion of Order 6(a) herein;

(iii)The reserve price of $950,000 or as recommended by the auctioneer;

(iv)The First Respondent shall pay and be responsible for the payment of all auction expenses payable before [U Street] is auctioned.

(g)In the event [U Street] has not sold by auction or private negotiation at the reserve price as recommended by the auctioneer pursuant to Order 6(f) herein, the parties shall do all acts and sign all documents necessary to list [U Street] for sale to procure a second auction on the following terms and conditions:

(i)The auctioneer shall be as nominated by the Applicant;

(ii)That the auction shall take place within fourteen 14 days of the first auction;

(iii)That there be no reserve price;

(iv)The First Respondent shall pay and be responsible for the payment of all auction expenses payable before [U Street] is auctioned.

(h)That upon the sale of [U Street], the net proceeds be paid in the following order and priority:

(i)Sales agents commission and conveyancing expenses;

(ii)Payment of the [MM Bank account] #40;

(iii)The payment sum to the Applicant pursuant to Order 4A herein and in the event of a loss, the First Respondent shall secure all funds necessary to make payment of any loss and indemnify the Applicant with respect to the same; and

(iv)Balance to the First Respondent.

7.Pursuant to Section 106A of the Family Law Act 1975, the Registrar or Deputy Registrar of the Family Court of Australia at Darwin be appointed to execute all deeds or instruments and sign all documents and things necessary in relation to [F Street], [C Street] and [U Street] and for and on behalf of the First Respondent upon presentation to the Registrar of an Affidavit as to the request made to the First Respondent to execute documents and their failure to do so within 7 days of presentation to them of the instrument to sign.

8.That the Applicant retain the following chattels and investments for her sole use and benefit:

(a)All of the Applicant’s interest held in [S] Pty Ltd;

(b)All jewellery within her possession;

(c)All funds standing to the Applicant’s credit in the following accounts:

(i) ANZ Access Advantage Cheque account #04;

(ii)National Australia Bank account #33;

(iii)National Australia Bank account #49; and

(iv)National Australia Bank account #11.

(d)All member entitlements held in [OO Scheme] Member No. #48.

9.That the First Respondent retain the following chattels and investments for his sole use and benefit:

(a)Motor vehicle 2 Northern Territory registration …;

(b)Motor vehicle 3;

(c)All monies standing to the First Respondent’s credit in any bank account held in his name;

(d)All right, title and interest in U Street save and except in the event [U Street] is required to be sold pursuant to paragraph 6 herein.

10.The First Respondent do all acts and things necessary and provide to the Applicant all minutes of meetings and any ASIC forms for execution by the Applicant resigning her directorship and transferring her 25 ordinary shares in [Kellner Pty Ltd] to the First Respondent at the First Respondent’s sole expense.

11.That the Applicant indemnify the First Respondent with respect to the following:

(a)National Australia Bank Visa #48; and

(b)National Australian Bank Visa #33.

12.That the First Respondent indemnify the Applicant with respect to the following:

(a)Any fees, invoices or debts due or owing to [PP Accountants] arising from his instruction relating to [Kellner] Pty Ltd;

(b)All personal taxation liability for the First Respondent payable to the Australian Taxation Office;

(c)All personal taxation liability for the Applicant payable to the Australian Taxation Office in relation to any profits of [QQ2 Pty Ltd];

(d)All monies due and owing as between the First Respondent, Second Respondent and [QQ2 Pty Ltd] and [Kellner Pty Ltd].

13.That the First Respondent meet and pay all liabilities and indemnify the Applicant from all funds owing to the Australian Taxation Office arising from the capital gains tax attributable to the First Respondent from the sale of the following real estates:

(a)[Property W], otherwise known as [X Street, Suburb K] in the Northern Territory;

(b)[Property Z], otherwise known as [AA Street, Suburb BB] in the Northern Territory;

(c)[Property Q], otherwise known as [R Street, Suburb P] in the Northern Territory;

(d)[Property L], [M Street, Suburb K] in the Northern Territory.

14.The Applicant meet and pay all liabilities and indemnify the First Respondent from all funds owing to the Australian Taxation Office arising from the capital gains tax attributable to the Applicant from the sale of the following real estates:

(a)[Property Q], otherwise known as [R Street, Suburb P] in the Northern Territory;

(b)[Property Z], otherwise known as [AA Street, Suburb BB] in the Northern Territory;

(c)[Property W], otherwise known as [X Street, Suburb K] in the Northern Territory; and

(d)[Property N], otherwise known as [O Street, Suburb P] in the Northern Territory.

15.That unless otherwise specified in this order and except for the purpose of enforcing the payment of money due under this order or any subsequent order:

(a)Each party shall be entitled to the exclusion of the other to all other property and chattels of whatsoever kind or nature in the possession of such party as at the date hereof and for this purpose, bank accounts are deemed to be in the possession of the person whose name appears on the bank records thereof, superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or working future provides the conditions for payment out of such entitlements; and

(b)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to this order.

16.SAVE AND EXCEPT for the purpose of providing security for the payments due to the Applicant pursuant to these orders the First Respondent is restrained and an injunction is granted restraining him from dealing with his interest in the properly (sic) at [U Street, Suburb V] in the Northern Territory until payment is made in full to the Applicant.

17.Pending payment of the payment sum the First Respondent do pay all interest due and payable on [MM Bank] Account #40 for and on account of U Street, and any rates, insurances and maintenance of the said property as and when they fall due.

The de facto husband

1. The final orders sought by the de facto husband are those set out in his amended case outline dated 16 January 2018. They did not differ in any substantial way from the orders sought in his Response, and they are as follows:

   1.That within 30 days the First Respondent, [Mr Kellner] and the Applicant, [Ms Kellner] shall do all things and sign all documents necessary to list for sale by way of private treaty the property situated at [Property E] otherwise known as [F Street, Suburb D], upon the the (sic) following terms:

   (a)The listing agent shall be as nominated by the agreement of the Applicant, [Ms Kellner], and the First Respondent, [Mr Kellner], and failing agreement, then as nominated by the proper officer of the Real Estate Institute of Northern Territory;

   (b)The listing price shall be by agreement of the Applicant, Ms Kellner and the First Respondent, Mr Kellner, within 7 days and failing agreement within 7 days, then as nominated by the proper officer of the Real Estate Institute of Northern Territory, upon application in writing by either party;

   (c)In the event of a contract of sale for the said property not having been entered into within three (3) months from the date of the listing of the property for sale, then the Applicant, [Ms Kellner], and the First Respondent, [Mr Kellner] shall procure a sale by public auction of the said property determined by the proper officer of the Real Estate Institute of Northern Territory.

   2.Upon the sale of the said property the gross sale proceeds be applied in the following manner;

   (a)Payment of Real Estate Agents Commission advertising and auction costs (if any) and the legal costs of the sale;

   (b)Payment to MM Bank to discharge in full the mortgage currently secured over the said property which is the [Kellner Pty Ltd] a/c #40;

   (c)Payment to [MM Bank] the oustanding (sic) balance of [Kellner] a/c #40 which is the partnership working account;

   (d)Payment of taxes and capital gains that arise from the sale;

   (e)The left over balance will be applied to the payment of debts and owing in relation to [Kellner Pty Ltd], as follows:-

   (i)[RR Lawyers]

   (ii)[PP Accountants]

   (iii)[Ms SS]

   (f)The balance to be paid to the First Respondent, [Mr Kellner], in reimbursement for the payment of debts due and owing as prepared by the said First Respondent, [Mr Kellner], as follows:-

   (g)$10,000 which [Mr KK], loaned to the First Respondent, [Mr Kellner], to pay to the ATO;

   (h)$10,500 which I used to complete [F Street].

   3.That within thirty (30) days the Applicant, [Ms Kellner], the First Respondent, [Mr Kellner] and the Second Respondent, [Ms King] shall do all things and sign all documents necessary to list for sale by way of private treaty the property situated at [Property H] otherwise known as [I Street, Suburb K], upon the following terms:-

   (a)The listing agent shall be as nominated by the agreement of the Applicant, [Ms Kellner], the First Respondent, [Mr Kellner] and Second Respondent, [Ms King], and failing agreement, then as nominated by the proper officer of the Real Estate Institute of Northern Territory;

   (b)The listing price shall be by agreement of the Applicant, [Ms Kellner], the First Respondent, [Mr Kellner], and the Second Respondent, [Ms King] within 7 days and failing agreement within 7 days, then as nominated by the proper office (sic) of the Real Estate Institute of Northern Territory, upon application in writing by either party;

   (c)In the event of a contract of sale for the said property not having been entered into within three (3) months from the date of the listing of the property for sale, then the Applicant, [Ms Kellner], the First Respondent, [Mr Kellner], and the Second Respondent, [Ms King] shall procure a sale by public auction of the said property determined by the proper officer of the Real Estate Institute of Northern Territory.

   4.Upon the sale of the said property the gross sale proceeds be applied on (sic) the following manner:-

   (a)Payment of Real Estate Agents Commission advertising and auction costs (if any) and the legal costs of the sale;

   (b)Payment to [MM Bank] to discharge in full the mortgage currently secured over the said property;

   (c)Payment to the Second Respondent, [Ms King] for her 1/3 share of the said property;

   (d)Payment of taxes and capital gains that arise from the sale;

   (e)The left over monies to be divided between the Applicant, [Ms Kellner] and the First Respondent, [Mr Kellner] to meet their personal obligations like to have a (sic) legal representation for the First Respondent.

   5.That the funds held in Withnalls Trust Account being the joint funds of the Applicant, [Ms Kellner] and the First Respondent, [Mr Kellner] will be applied as follows:

   (a)that the Applicant, [Ms Kellner], is seized of 35% of the total net property for division as between the parties; and

   (b)that the First Respondent, [Mr Kellner], is seized of 65% of the total net property for division as between the parties.

   6.That the Applicant, [Ms Kellner] retain for her sole use and benefit the following property and or/resources:-

   (a)[Motor vehicle 1] Northern Territory Registration …;

   (b)All of her right, title and interest in [S Pty Ltd]

   (c)All funds standing to the Applicant, [Ms Kellner’s] credit in the following account;

   (i)NAB #33;

   (ii)NAB A/C #49;

   (iii)NAB #11;

   (iv)NAB Visa #48; and

   (v)NAB Visa #33 (sic).

   (d)All right, title and interest at [Property B] otherwise known as [C Street, Suburb D];

   7.That within thirty (30) days the First Respondent, [Mr Kellner] shall do all things and sign all documents necessary to effect transfer to the Applicant, [Ms Kellner], all his right, title and interest in the following real estates (sic):-

   (a)[Property B] otherwise known as [C Street, Suburb D].

   8.The bank accounts that the Applicant, [Ms Kellner] newly opened in her own name and she deposited monies from the rents of the partnership properties will be accounted and be closed.

   9.That the First Respondent, [Mr Kellner] retain for his sole use and benefit the following property and/or resources:-

   (a)All of his right, title and interest in the [Motor vehicle 2] Northern Territory Registration …;

   (b)All of his right, title and interest in the [Motor vehicle 3] Northern Territory Registration…;

   (c)All of his right, title and interest in [Property T] otherwise known as [U Street, Suburb V];

   10.That unless otherwise specified in this order and except for the purpose of enforcing the payment of money due under this order or any subsequent order:-

   (a)Each party be entitled to the exclusion of the other to all other property and chattels of whatsoever kind or nature in the possession of such party as at the date hereof and for this purpose, bank accounts are deemed to be in the possession of the person whose name appears on the bank records thereof, superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or working future provides the conditions for payment out of such entitlements; and

   (b)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to this order.

   11.That:-

   (a)Each party shall do all acts and things reasonably by the other including the signing or execution of all necessary documents to give effect to the provisions of this Order within 14 days as of being requested to do so.

   (b)If either party refuses or neglects to sign or execute and return a document within 14 days of a written request to do so then the Registry (sic) of the Darwin Registry of the Family Court is hereby appointed under Section 106A of the Family Law Act 1975 to sign or execute such document on behalf of that party upon lodgement of such document and the filling (sic) of an affidavit of a solicitor on behalf of the requesting party as to the said neglect or refusal.

   (c)A defaulting party shall pay the other party’s taxed cost of and incidental to such request and production of documents to the Registrar.

   12.Such further or other payment by one party to the other party, so as to effect an overall distribution as between the parties, so that the Applicant, [Ms Kellner], is seized 35% of the total net property for division as between the parties; and so that the First Respondent, [Mr Kellner], is seized of 65% of the total net property for division as between the parties.

   13.That each party pay their own costs of and incidental to these proceedings.

2. As can be seen from paragraphs 2 and 3 of the orders sought by the de facto wife, and paragraph 3 of the orders sought by the de facto husband, both parties seek orders against the second respondent.

3. To repeat, not only did the second respondent fail to file any documents in accordance with the orders made by Berman J, but she failed to attend the hearing until she appeared without legal representation on the morning of the third day of the trial.

4. At that time the de facto wife made an oral application that the matter proceed on an undefended basis insofar as any order is sought by her against the second respondent, and I delivered ex tempore reasons for judgment and made that order (Kellner & Kellner and Anor [2018] FamCA 359).

5. However, the de facto husband did not make a similar application in relation to the order that he sought against the second respondent.

6. As can also be seen, the de facto wife seeks an order that the de facto husband pay to her the amounts payable pursuant to previous orders for costs made by the court and which remain unpaid. The de facto husband made no submission to the court about that order, but plainly it is appropriate at this time when finalising the parties’ respective applications for property settlement to require that the de facto husband comply with the orders and pay the total amount of $31,838; that will then finalise all financial matters between the parties.

Relevant background

1. The de facto husband was born in Country DD in 1945, and was aged 72 years at the time of the trial.

2. The de facto wife was born in Country CC in 1954, and was aged 63 years at the time of the trial.

3. The de facto husband has three children from a previous marriage to Ms UU (“the former wife”), namely Ms LL born in 1978, Mr G born in 1980, and the Second Respondent born in 1982.

4. The parties met on 5 March 1986 in Australia. They commenced cohabitation on 26 August 1986 with the de facto wife moving into FF Street, Suburb GG. That property was one of 24 units that had been constructed by QQ Pty Ltd, a business which was owned and operated at the time by the de facto husband and his two brothers.

5. The parties married in 1986.

6. The wife commenced outside employment in 1987, and continued until 2000. In addition, during this period of time, she assisted the husband in the administration of the business.

7. In April 1989 the de facto husband sold the Suburb GG property for $90,000 and discharged the mortgage registered on the title. The balance of the proceeds of sale went to resolve a dispute between the de facto husband and his brothers. Thereafter the parties continued to live in the property as tenants. The de facto husband also retained the business name QQ Pty Ltd, and he commenced trading under that name, again assisted by the wife.

8. The parties were divorced on 7 June 1990 but continued their relationship until they finally separated on 12 July 2012, when the de facto wife moved out of their house.

9. In October 1991 vacant land situated at U Street, Suburb V was purchased in the de facto husband’s sole name. The husband, through the business, then constructed a house on that land, and the parties commenced to live there from August 1993. The property is security for a MM Bank loan account for which the parties are jointly and severally liable.

10. In 1992 the sum of $67,000 was paid to the former wife, being the amount owing to her from the property settlement between her and the de facto husband. The parties took out a loan to pay this debt.

11. In 2000 the parties commenced a partnership trading as “QQ2 Pty Ltd”, and around this time QQ Pty Ltd ceased trading. The wife commenced to work full-time in the partnership undertaking all of the administrative tasks.

12. In 2003 II Pty Ltd was incorporated, and in 2004 JJ Pty Ltd was incorporated. There was also a unit trust formed known as JJ Unit Trust. II Pty Ltd was set up to involve the husband’s daughter Ms LL and her husband Mr KK. JJ was also set up to involve the family in the business. The de facto husband was a director of and held shares in both II Pty Ltd and JJ and held units in the unit trust. The de facto wife was a director of and held shares in II Pty Ltd.

13. In April 2006 the company Kellner Pty Ltd was incorporated, and commenced trading. Fifty shares were allocated to the de facto husband’s son Mr G, and the parties each held 25 shares. All three became directors of the company. This company was set up to involve Mr G. It purchased three pieces of land and built three homes in 2006/2007.

14. In early 2007 the de facto husband sought to purchase vacant land at I Street, Suburb K in the sole name of the second respondent. However, she was not able to obtain a loan, and thus the land was purchased in the name of the parties and the second respondent. The parties refinanced with the ANZ Bank to be able to do this, and the purchase price of $114,084.50 was sourced from the partnership account. The second respondent did not contribute any money to this purchase, but one third of the purchase price was debited to her loan account in the partnership. The partnership then built a house on the land with the cost being financed by a loan from the ANZ Bank. Again, one third of this cost was debited to the second respondent’s loan account with the partnership. All repayments made in relation to the loans obtained to purchase the land and build the house were met by the partnership. However, no proportion of these amounts were debited to the second respondent’s loan account in the partnership. Following construction the house was leased and the rental received was treated by the parties as funds for their use. The property has continued to be leased out over recent years, with the wife receiving the rental income and meeting all loan repayments and other expenses.

1. On 27 July 2009, the parties paid $70,000 to the second respondent for her interest in I Street, Suburb K.

2. In late October 2009 the de facto wife entered into a contract to purchase vacant land situated at F Street, Suburb D. She paid a deposit of $36,500 towards the purchase price.

3. It is the de facto wife’s evidence that at or about the time of completion of the contract to purchase this property, the tax returns of the partnership were not completed, and thus she had difficulty in obtaining finance for the purchase. Accordingly, the de facto wife says that she “acquiesced” in the contract being ultimately amended to include the parties and the de facto husband’s son Mr G as purchasers, and to extend the time for completion. The parties paid a further deposit, penalties, and the costs exceeding the loan that they were able to obtain from MM Bank, from the partnership working account. The loan was secured in the name of Kellner Pty Ltd, and the total purchase price, exclusive of stamp duty, was $420,119.60. 

4. The house at F Street was to be built by the partnership for the sum of $400,000. The parties paid $100,000 of that amount from a joint bank account, and borrowed the remaining $300,000 from MM Bank.

5. At the time of separation, the construction of the house was nearing completion, but following separation, the de facto husband terminated the contract with the partnership, and he completed the construction of the house “as the licensed builder”.

6. Mr G did not contribute any money to the purchase price or to the construction of the home prior to the separation. However, subsequent to separation, the de facto husband’s evidence was that in 2013 Mr G contributed a total of $60,000 to the costs required to complete the building of the house. This was said to be a loan.

7. On 14 May 2014, Judge Harland, inter alia, ordered that the de facto wife have sole occupation of this property, and she commenced to reside there on 30 May 2014.

8. On 10 March 2015, Dawe J ordered that Mr G transfer all of his right, title and interest in this property to the parties, that $60,000 be paid to Mr G, and that he then be discharged from the proceedings, having previously been joined as a party. Although the amount of $60,000 has been paid to Mr G, MM Bank are not prepared to allow him to be released from the security, pending the completion of these proceedings, and the property remains in the names of the parties and Mr G.

9. On 26 August 2016, Dawe J ordered that the de facto wife pay all interest due and payable on MM Bank loan account #40 held in the name of Kellner Pty Ltd, and all rates, taxes and insurances as and when they fall due.

10. In June 2010 the parties purchased vacant land situated at C Street, Suburb D in their joint names. The parties then built a house on that land which was tenanted from its completion in February 2011.

11. Following a tenancy dispute, arrangements were made for the tenants to vacate that property, and the de facto wife resided there from 14 February 2013 until 30 May 2014, when she commenced to live at F Street, Suburb D.

12. To repeat, on 12 July 2012, the parties separated on a final basis with the de facto wife moving out of their property at U Street, Suburb V. The de facto husband remained in that property and continues to reside there with his current wife and their son. The husband’s current wife arrived in Australia from Country CC on 9 July 2012 and commenced to live with the husband almost immediately thereafter, on 11 July 2012. They married in 2013, and their child was born in 2015.

13. On 14 May 2014 Judge Harland further ordered that the property at I Street, Suburb K be sold. The de facto wife and the second respondent later signed a contract for sale for the sum of $678,000. However, the de facto husband refused to sign this contract and the purchasers eventually withdrew from the same. That property remains unsold, and it is rented out as referred to above.

14. Her Honour’s orders of 14 May 2014 also provided that arrangements be made for the property at C Street, Suburb D to be leased. The de facto wife attended to that, arranging for VV Real Estate to act as managing agents for the property. The order also provided for the distribution of the rental proceeds. Initially they were to be paid into the working account of the partnership, which meant that they went to meet the loan repayments for that loan account, given that the de facto husband was refusing to contribute to that loan. Subsequently, pursuant to orders made by Dawe J on 26 August 2016, the de facto wife was entitled to have those rental payments, as well as being responsible for meeting all the expenses for the property at C Street, and that continues to be the case.

15. On 17 July 2015 the de facto husband sold the furniture at U Street, Suburb V for $50,000 to his daughter Ms LL and her husband Mr KK. There was an agreement drawn up which is Annexure “A” to the affidavit of the de facto wife filed on 27 October 2017. It seems that although the household furniture was sold, it was to remain at the property to be cared for by the de facto husband and to be insured for the amount of $50,000. However, consistent with the de facto husband’s lack of full and frank disclosure as detailed later in these reasons, he provided no evidence as to where that money was deposited. Indeed, in cross-examination he attempted to suggest that the $50,000 was not in fact the amount that he received for the sale of the furniture, but only $25,000 was, with the other $25,000 being a loan from Ms LL and Mr KK. This evidence of course is directly inconsistent with the terms of the agreement of 17 July 2015.

16. In August 2017, a Form 17A Warrant of Seizure and Sale was registered on the Titles of U Street, Suburb V and I Street, Suburb K, securing the amount of $154,783 payable to the de facto husband’s former solicitor.

Relevant orders

1. On 17 December 2013 Judge Harland declared that pursuant to s 90RD of the Family Law Act 1975 (Cth) (“the Act”), the parties were in a de facto relationship from 8 July 1990 until 12 July 2012, and that pursuant to s 90SK of the Act both parties were ordinarily resident in the Northern Territory of Australia for more than one third of the de facto relationship.

2. On 14 March 2014 again by order of Judge Harland, the second respondent was joined as a party to the proceedings, as were II Pty Ltd and JJ Pty Ltd. Orders were also made that by way of partial property settlement the de facto wife transfer her interest in the Motor vehicle 2, and the Motor vehicle 3, to the de facto husband, and the de facto husband transfer his interest in the Motor vehicle 1 to the de facto wife. The orders also provided for the disposition of the proceeds of sale in the event that the properties at U Street, Suburb V, O Street, Suburb P and M Street, Suburb K were sold, and that the parties accept offers in excess of $685,000 for the property at R Street, Suburb P, and $650,000 for the property at X Street, Suburb K.

3. On 14 May 2014, Judge Harland made orders providing for the de facto wife to have the sole occupation of the property at F Street, Suburb D, for the sale of the properties at I Street, Suburb K, R Street, Suburb P, M Street, Suburb K and O Street, Suburb P, with a detailed order providing for the purchase prices to be accepted by the parties, and for how the proceeds from the sale of those properties were to be distributed, including payments to the parties by way of partial property settlement. As indicated above, the property situated at C Street, Suburb D was ordered to be leased out, and orders were made for the distribution of the rental proceeds.

4. On 17 October 2014, Dawe J made orders by consent joining Mr KK as a party to the proceedings, providing for the de facto wife and the de facto husband to each receive the total amount of $400,000 for their interests in JJ Pty Ltd, JJ Unit Trust, and II Pty Ltd, and then discharging JJ Pty Ltd, II Pty Ltd and Mr KK as parties to the proceedings.

5. On 10 March 2015, as referred to above, Dawe J ordered Mr G to transfer his interest in the property at F Street, Suburb D to the applicant and the first respondent, that he receive the sum of $60,000, and upon payment he be discharged from the proceedings.

6. On 26 August 2016, Dawe J ordered, inter alia, that the de facto husband pay all interest due and payable on MM Bank business maximiser account #40 for and on account of the U Street property, and any rates, insurances and maintenance of that property as and when they fall due.

The current circumstances of the parties

The de facto wife

1. The de facto wife resides at F Street, Suburb D. Her niece, Ms MM and her husband also board there. The de facto wife has not re-partnered.

2. The de facto wife is currently unemployed and her income consists of rent from C Street, Suburb D and I Street, Suburb K. She ceased working as a part-time administrator on 15 December 2016 as the result of an injury to her right forearm/hand, and a dislocated shoulder caused by a fall at home.

3. Through a company S Pty Ltd, of which she is the sole director and shareholder, the de facto wife has an interest in a company WW Pty Ltd, which was set up to build houses. WW Pty Ltd built two houses in 2015 but the company has not operated since. It has no current contracts, and there are no plans to utilise the company for that purpose into the future.

The de facto husband

1. The de facto husband resides with his wife and their child at U Street, Suburb V.

2. The de facto husband receives the age pension of $348.55 per week, and a family tax benefit of $168.25 per week. He maintains that he is retired, and his ability to work is unclear from the evidence.

3. There was no financial information provided by the de facto husband in relation to his wife and child, save and except that she receives a carer’s payment of $400 per week. I am not told, but I assume that the caree is the de facto husband. He says he suffers from a number of health conditions, in respect of which he provided some medical evidence, but not in admissible form.

The evidence

1. The de facto husband appeared without legal representation, but his current wife assisted him as his McKenzie Friend.

2. The de facto husband sought to rely on his affidavit of evidence-in-chief filed on 8 December 2017, his Financial Statement filed on the same date, his affidavit filed on 22 December 2017 setting out his legal costs, paid, unpaid, and anticipated, and the affidavit of Ms SS, accountant, filed on 8 December 2017.

3. As I will explain shortly in these reasons, there were serious issues with the de facto husband’s affidavit of evidence-in-chief, and I will leave it to those subsequent reasons to indicate what transpired in that regard.

4. As to the affidavit of Ms SS, it was readily apparent that she had filed that affidavit of her own volition, and it was objected to by the de facto wife. Its contents were plainly inadmissible, and she was not ultimately called as a witness by the de facto husband. Thus, I struck out the same.

5. The de facto husband gave evidence and was cross-examined.

6. The de facto wife was represented by Mr Looney QC, with Ms Reece. She relied on her affidavit of evidence-in-chief filed on 27 October 2017, her affidavit in reply filed on 20 December 2017, her Financial Statement also filed on 27 October 2017, the affidavit of Ms MM, her niece, also filed on 27 October 2017, and the affidavit of service of documents on the second respondent filed by the de facto wife’s solicitor on 16 January 2018.

7. Ms MM was not required for cross-examination by the de facto husband, and thus her affidavit was before this Court unchallenged.

8. The de facto wife gave evidence, and apart from a very few questions, she was not cross-examined as to any issue in dispute by the de facto husband. Thus, her affidavit of evidence-in-chief was effectively before this Court unchallenged.

The credit of the parties

1. The de facto wife only gave brief oral evidence-in-chief, and in the end result she was not cross-examined to any extent by the de facto husband. Thus, I had little opportunity to hear and see her give evidence and attempt to make an informed assessment of her credit. However, as a result of the lack of cross‑examination of her by the de facto husband, her affidavit of evidence‑in‑chief was before me unchallenged, and I accept the truth and correctness of the same. In any event, the de facto husband’s behaviour and his oral and written evidence, was such that I have no difficulty in finding that wherever the evidence of the parties conflict, the evidence of the de facto wife is to be preferred. Specifically, and importantly, that assessment applies in relation to any topic that is relevant to the decision that this Court has to make.

2. The de facto husband was provided with the services of an interpreter for the entirety of the proceedings. However, I am satisfied that he understood almost all of the questions that he was asked, not only in cross-examination, but by me. He used the presence of the interpreter to delay the proceedings, to obfuscate, and to avoid answering questions when the answers would not have assisted him. His tactics were to respond by disingenuously saying that he did not know the answer, when he clearly did, by feigning a lack of understanding even when the question was translated to him, by delaying his response to the question and being evasive in his answers, by being non-responsive to many questions and instead making statements that he wanted to put to the court, whether relevant to the questions or not, by refusing to accept the court’s rulings and answering in the way that had previously been disallowed, or by giving information that he well knew he was unable to give.

3. Importantly, when he was questioned in cross-examination about his affidavit of evidence-in-chief, he initially said that he had read it before swearing as to the truth of the contents, but when he was asked about the accuracy of some specific paragraphs which were inconsistent with his oral evidence, he attempted to disown the affidavit. First, he said that the affidavit was a result of being copied from his affidavit relied on in the previous trial, that he had left it to his current wife to do the copying, that he had assumed that that had been done correctly, but now realised that some paragraphs had been incorrectly copied. However, when questioned further about this he said that he did not read it before he signed it, and that it was put together by his current wife, effectively without any input from him.

4. At this point senior counsel for the de facto wife applied to strike out the affidavit. I adjourned the hearing until later that day to enable the de facto husband to take legal advice, and/or read the affidavit and be prepared to indicate what of it he adopted as true and correct.

5. After that unnecessary delay in the proceedings, the hearing resumed, and I struck out the affidavit. However, to allow the matter to proceed, upon the de facto husband indicating that apart from two paragraphs that he did not understand, he adopted all other paragraphs as his evidence before the court as being true and correct, I permitted those paragraphs of the affidavit to again be before me.

6. As became apparent in his cross-examination though, it was not the case that all of those paragraphs were true and correct.

7. As just one example, it was the de facto husband’s case that the de facto wife had misapplied, withdrawn and/or taken money prior to separation, and in paragraph 329 of his affidavit the de facto husband said this:

   329.From my search of documents in my possession, I have determined that in the three (3) years before separation, [Ms Kellner] has misapplied, withdrawn and/or taken funds which were rightfully the property of both parties, for which [Ms Kellner] has not accounted to myself or to the Court, specific sums are referred to as follows:

   a.$20,000 drawn on 31 May 2009 from the account operated by [Kellner Pty Ltd];

   b.$50,000 drawn on 24 June 2009 from the account operated by [Kellner Pty Ltd];

   c.$19,219.10 drawn on 1 September 2009 from the account operated by Kellner Pty Ltd;

   d.$30,000 on 6 April 2011 also from the [I Street] property rental account;

   e.$6,000 on 23 May 2012, from ANZ Bank account number #26;

   f.$19,462.35 on 28 May from [MM Bank] account #40;

   g.$ 1,045.19 cash withdrawal on 2 June 202 from [MM Bank] account #40;

   h.$ 2,444.58 cash withdrawal on 2 June 2012 from [MM Bank] account #40;

   i.$5,272.50 on 7 June 2012 from [MM Bank] account number #40;

   j.$ 600 cash withdrawal on 2 July 2012 from [MM Bank] account number #40;

   k.$ 830.35 cash withdrawal on 2 July 2012 from [MM Bank] account number #40;

8. This was simply inaccurate and comprised allegations against the de facto wife which had been either withdrawn during the previous trial, or demonstrated to be false.

9. Take the allegation in paragraph 329(a) referring to a cheque for $20,000 drawn on 31 May 2009. That cheque was deposited into the ANZ Bank account of the partnership (see Exhibits W5 and W6), and when the relevant documents were shown to the de facto husband, he was obliged to accept that that amount was not misapplied. However, he was well aware of that, from at least the time of the previous trial (see Transcript 24.4.15, pages 124 – 125 where the de facto wife was cross-examined about this cheque).

10. Nevertheless, the de facto wife’s senior counsel was obliged to take the de facto husband painstakingly through each of the amounts in paragraph 329, and demonstrate by reference to the evidence given at the previous trial that the allegations were either false, or they had been withdrawn, and that that was in fact well-known to the de facto husband. Again, that exercise was completely unnecessary and delayed the trial.

11. There are also other occasions apart from when the issue in relation to the de facto husband’s affidavit arose when time was lost unnecessarily in the trial because of the conduct of the de facto husband. For example, on the first day of the hearing it was necessary to adjourn to enable the de facto wife’s senior counsel to inspect the bundles of documents brought to court at the last minute by the de facto husband, and then the trial had to be adjourned early for the day because the de facto husband sought the opportunity to instruct a solicitor, something which then did not come to pass.

The de facto husband’s failure to provide full and frank disclosure

1. The de facto husband failed to provide any disclosure relevant to his unilateral operation of the partnership following separation, his receipt of income, his cash dealings, his use of funds, his payment of liabilities including interest payments and rates and taxes, and his claim as to the “misapplication, withdrawal from accounts, or the taking of monies” by the de facto wife, not only for the purposes of the trial before me, but also for the purposes of the earlier trial before Dawe J. At both trials most of the relevant documents were provided by the de facto wife, including a significant number obtained by subpoena such as bank statements and the like.

2. Importantly, despite the findings by Dawe J following the earlier trial, the de facto husband failed to provide any disclosure at all subsequent to those findings and prior to the commencement of the trial before me. The findings that I am referring to are for example those at [69] – [71], where her Honour said this:

   69.He was questioned at length about work he had done over the years and the use to which he had put the funds he had received recently and his explanation for the inconsistencies in his written evidence and oral evidence.

   70.When cross-examined about payments or withdrawals from accounts and where the money went, the de facto husband gave confusing answers and frequently said that his affidavit was wrong and he had not prepared it, his lawyer was wrong or his lawyer was confused. He also alleged that he did not write cheques he simply signed them and left them. At other times when presented with documents he would say that his original evidence needed to be corrected. Generally, the evidence of the de facto husband as to the whereabouts of monies withdrawn from accounts was unsatisfactory.

   71.I am satisfied that the evidence indicates that the de facto husband withdrew large sums from accounts and notwithstanding there were large sums due and owing by way of mortgages and loans, he paid sums to his adult children and, in particular, to his daughter [Ms LL] and son-in-law.

1. The de facto husband came to the hearing before me claiming that he had “bundles of documents to produce”. He attempted to introduce some of those documents at the commencement of his cross-examination of the de facto wife, but understandably that was objected to by the de facto wife's senior counsel on the basis that the documents had not been discovered, and I ruled that the documents could not be presented in those circumstances.

2. The de facto husband then sought an adjournment until the next day “to give [him] time to produce the documents that were not discovered”. I allowed a brief adjournment for the documents to be shown to the de facto wife’s legal representatives, the de facto wife’s senior counsel indicating that he was content to identify for the de facto husband what documents (if any) could be produced.

3. Upon resuming the hearing I was informed by the de facto wife’s senior counsel that some documents were able to be produced, but not all of the documents that the de facto husband wished to produce were there, and he indicated that he would be able to look at the balance of the documents overnight. Accordingly, I adjourned the trial to the next day for that purpose.

4. The next day the de facto husband made an application to adjourn the hearing, but that was dismissed, and the trial resumed with his cross-examination of the de facto wife. Importantly though, he had not provided the documents to the de facto wife’s senior counsel overnight, and he had not brought any documents with him to court. He then simply indicated that he did not want to ask any questions of the de facto wife, and on that basis I released her and her senior counsel closed her case.

The de facto husband’s unilateral operation of the partnership following separation, his receipt of income, his cash dealings, his use of funds, and his failure to pay liabilities including interest payments and rates and taxes

1. The starting point here is the four projects being undertaken by the partnership at the time of separation. They were as follows:

   a)F Street, Suburb D;

   b)XX Street, Suburb YY

   c)ZZ Street, Suburb AB; and

   d)BC Street, Suburb AB.

2. The de facto husband completed these projects but failed to account to the de facto wife as a partner of QQ2 Pty Ltd for any of the income received after separation, including for invoices rendered but not paid until after separation.

3. There were also final progress payments due to the partnership at separation in relation to the construction of a house at CD Street, Suburb DE, one of which was likewise unaccounted for. That amount was $29,500. The other payment of $42,000 was credited to the partnership bank account.

4. Similarly, there was one final progress payment due of $43,450 in relation to the construction of a house at EF Street, Suburb FG. The de facto husband alleged that this payment was received by the de facto wife in cash, but this was yet another false allegation by the de facto husband, and an attempt by him to explain how he was unable to identify where that money went. I find that he received it, and did not account for it.

5. Apart from failing to account for the income received, as identified above, the de facto husband failed to disclose any of the invoices or receipts issued in relation to the completion of these projects, or the receipts for all but one of the payments due in relation to the properties at CD Street, Suburb DE and EF Street, Suburb FG.

6. In the paragraphs of his affidavit that he adopted, and in his oral evidence, the de facto husband claimed that he could not produce these documents because the de facto wife had them. That of course is illogical in relation to the houses built after separation, if as he says, he was the one who completed these projects, and in any event, the de facto wife denied this allegation, and I accept her evidence in this regard. She says that she was not involved in, or consulted in respect of any of the four projects after separation, and nor did she issue any invoice, or receive any funds from these projects after that time.

7. The failure by the de facto husband to disclose these documents is compounded by the fact that the income tax returns for the partnership were only completed up to and including the financial year ending 30 June 2011. The de facto husband alleges that the documents necessary to prepare the partnership tax return for the year ended 30 June 2012 were retained by the de facto wife. Indeed, he claims that all of the relevant records for the partnership prior to the separation were retained by her. The evidence of the de facto wife though is that all of these documents were left at U Street, Suburb V, and again, I accept her evidence in that regard.

8. The parties did instruct an accountant, Ms SS, to prepare the 2012, 2013, and 2014 partnership taxation returns, but she was unable to do so because of the lack of the necessary documentation. Thus, those returns, and those for 2015, 2016, and 2017 have simply not been done.

9. Significantly, the de facto husband admitted in evidence before Dawe J, and confirmed the same before me, that he dealt in cash with various customers of the partnership and that no records were kept (Transcript 27.4.15, page 315 line 10 – page 319 line 18). The money though had to go somewhere, yet the de facto husband failed to disclose any documents demonstrating where that somewhere was. He did assert both before Dawe J and I that some of the cash that he received from customers he provided to his son-in-law, Mr KK for him and his wife to look after, and when he needed money he took it back, but again there was no documentary evidence produced by the de facto husband to corroborate this assertion (see Transcript 28.4.15, page 451 – page 453).

10. After separation the de facto husband did lodge BAS statements with the Australian Taxation Office in relation to the income of the business he operated. However, it was demonstrated in cross-examination that those statements were inconsistent with the amounts that he was entitled to receive pursuant to at least three of the contracts entered into for after separation. The amounts declared on the BAS statements were substantially less than the amounts that were due to be paid pursuant to the contracts, and the difference equated generally with the amount of cash he agreed he received as part of the overall payment from the customers. In other words, he failed to declare the cash that he received, and that is consistent with the reason he gave for taking cash monies, namely to keep it from the Commissioner of Taxation.

11. Despite providing no documents revealing the actual income that he received from the projects completed after separation, he did set out in his affidavit of evidence-in-chief relied on in the trial before Dawe J, a list of the amounts allegedly involved. For example, for two of the projects, namely at XX Street and at BC Street, he identified total receipt of $681,000, including cash of $140,000. However, the total of the two contracts which were tendered before Dawe J and which became Exhibits W10 and W11 before me, was $852,250, namely a difference of $171,250.

12. The de facto husband’s only explanation for this difference was that he entered into a “different contract” in relation to one project, namely XX Street. However, if he did so, that contract was not produced. What he did produce though at the earlier trial was a different progress payment schedule than the one attached to the contract. The total of the progress payments in that schedule was $88,000 less than the original schedule. Plainly though this was done in an attempt to hide the cash that he received (see Exhibit W13).

13. Then, in his affidavit of evidence-in-chief filed on 8 December 2017, the contents of which he adopted for the purposes of the trial before me, in paragraphs 180 and 181 he identified total receipts of $751,874 for the same two projects without explaining the difference. I of course note that that amount is still approximately $100,000 less than the combined contract prices of $852,250.

14. I should also mention that the de facto husband attempted to suggest that the de facto wife had taken some of the money received for the work done by the de facto husband on these projects. For example, in paragraph 132i. of his affidavit of evidence-in-chief relied on in the trial before Dawe J, and filed on 2 April 2015, the de facto husband said this in relation to the money received from the XX Street project:

    For my work …, I was paid:

    i.$27,000 in cash on 4 July 2012, which I gave to [Ms Kellner], and I don’t know what she did with that money. A search of the records of the various bank accounts that [Ms Kellner] and I had on that day, has failed to reveal any evidence of this deposit. [Ms Kellner] did not give me that money and she didn’t leave it for me when she left the [U Street] property.

15. The wife denied this allegation, but did say that prior to separation she issued a tax invoice in relation to this project on 3 July 2012 for $10,000, and it was paid on 5 July 2012 with the money being deposited into the partnership bank account, along with other monies. The bank statement for that account confirmed this (see Exhibit W17). Nevertheless, in the de facto husband’s affidavit of evidence-in-chief filed on 8 December 2017 and adopted for the purposes of the trial before me, the de facto husband said this in paragraph 181a:

    For my work … at [XX Street], these are the progress payments:

    a         $27,000 on 4 July 2012:

    a week before [Ms Kellner] left the house, she received a cheque of $10,000 as part payment of progress payment number 1 and she deposited it (sic) our [QQ2 Pty Ltd]’ working account at [MM Bank] on 5 July 2012. She also received $17,000 in cash on the same day and she took it when she left the house.

16. The inconsistency between these two paragraphs, even allowing for the fact of the de facto husband without any comment changing his story about $10,000 of the $27,000, demonstrates that it is the de facto husband who is not being truthful. I accept that if $17,000 was paid in cash it was retained by the de facto husband, and certainly not by the de facto wife.

17. Further to that, as referred to above, it is the de facto husband’s case that both before and after separation the de facto wife has “misapplied, withdrawn and/or taken funds which were rightfully the property of both parties, for which [the de facto wife] has not accounted to [the de facto husband] or to the court” (paragraphs 329 and 330 of his affidavit filed on 8 December 2017). However, in cross-examination, to repeat, the de facto wife’s senior counsel took the de facto husband to the various amounts identified, and demonstrated that where necessary they were all accounted for, and that had also been the outcome of the cross-examination of the de facto husband at the earlier trial in relation to the same amounts. Thus, not only do I reject these claims by the de facto husband, but I note again the enormous waste of time in having to reiterate what was established at the earlier trial.

18. I also note that at least in relation to three alleged withdrawals by the de facto wife from the partnership bank account (paragraph 329g, h and k), the bank records tendered before me indicated that in fact no such withdrawals were made (see Exhibit W17). Again, a complete waste of time.

19. Further, in relation to one cash cheque drawn on the partnership account not on 13 July 2012 (paragraph 330 l) but on 3 July 2012, I accept the submission of the de facto wife’s senior counsel that the cheque was originally drawn in the amount of $669.90 but that the de facto husband then changed it to $4,669.90 by the wife. That is demonstrated by Exhibit W7.

20. There were though two amounts which the de facto wife did take, but there was no secret about that, and the de facto wife has always conceded it. When the de facto wife left in July 2012 she withdrew a total of $31,326.13 from accounts available to her, and she deposited that money into her two National Australia Bank accounts. She did so because she had no other funds available to her. She paid $10,000 of that money to her solicitors in order to commence legal proceedings, she paid for a bond and four weeks rental in advance for the accommodation that she moved into, and the balance was spent on living expenses. Subsequently, the de facto wife also had the use of approximately $32,000 from rents received for the property at I Street, Suburb K. Again though this has always been disclosed by the de facto wife.

21. However, that pales into insignificance when compared with the money the de facto husband has withdrawn and utilised since separation. It has been impossible to determine the precise amounts taken, but some of the many amounts that have been able to be identified soon after separation, are as follows:

    101.1At separation the de facto husband had a safety deposit box at the ANZ Bank and the de facto wife asserts that there was in excess of $150,000 in cash in that safety deposit box. The records of the de facto husband accessing that safety deposit box no. #94 following separation (Exhibit W20) reveals that he accessed that box a number of times throughout 2012, 2013, 2014 and 2015. I accept that the de facto husband kept significant amounts of cash in that safety deposit box and that he did have in excess of $150,000 in cash in that box as at separation. He presented no evidence of what has become of that money.

    101.2On 10 July 2012 the de facto husband withdrew $60,000 of the $64,639.72 in his ANZ Bank account. He then on 19 September 2012 deposited $59,975 back into that same bank account but on the same day withdrew cash of that amount which he then says he placed in his ANZ safe deposit box. Beyond that though there is no evidence as to what that money was used for.

    101.3On 17 July 2012 the de facto husband withdrew the entirety of the funds available to be drawn from MM Bank overdraft account no. #40, namely $199,118.70. Subsequently he deposited this money in the partnership working account in four separate tranches, but later again withdrew this money saying only that it was expended on “necessary expenses”.

    101.4Between 17 July 2012 and 2 August 2013 the de facto husband withdrew cash totalling $13,500 from a joint MM Bank account no. #40 being an account into which rent monies had been paid in relation into a property at R Street, Suburb P. Again, there is no evidence as to what he used that money for. I also note that the property at Suburb P was a property about which there was no evidence by either party, save and except as referred to in this paragraph. Importantly, it is not a property that either party suggests is currently an asset of either of them.

22. In addition of course the de facto husband had available the cash money that he received in relation to the completion of the projects referred to above, and although the lack of proper disclosure by the de facto husband prevents a finding as to precise amounts, the available evidence, namely the contracts, the progress payments, the BAS statements and those tax returns that the husband did prepare subsequent to separation, suggests that the amount of cash the de facto husband received was in the order of $260,000, as submitted by the de facto wife’s senior counsel.

23. Further, there has been a failure by the de facto husband to account for the last progress payments which were received after separation, namely an amount of $43,450 in relation to a property at EF Street, Suburb FG and an amount of $29,500 received in relation to a property at CD Street, Suburb DE.

24. Next, there is the issue of the de facto husband’s operation, following the separation, of the three MM Bank partnership overdraft accounts.

25. As at the date of separation, account no. #840 was overdrawn to the extent of $210,000, account no. #040 was overdrawn to the extent of $100,881, and account no. #240 was overdrawn to the extent of $165,690.

26. The first two accounts now have nil balances, and the third account has a debit balance of $130,751.

27. The de facto wife’s senior counsel provided an analysis of those accounts which revealed that disregarding funds deposited in those accounts from the sale of properties, there was an amount of $423,755 to be accounted for which can only represent interest and other charges incurred as a result of the failure by the de facto husband to make the payments into those accounts which would have avoided those debits, and despite him having cash monies that could have been so deposited. The consequence of that, is that the monies available to the parties from the sale of properties would have been greater if those deposits had been made, and thus the de facto wife has suffered that detriment.

28. Plainly, that circumstance must be taken into account in these proceedings, but I am not in a position to find that the figure is as suggested by the de facto wife’s senior counsel. Indeed, he conceded that it is not possible to be precise about these figures because of a lack of accounting by the de facto husband.

29. Finally, in more recent times, there is the $50,000 that the de facto husband received from the sale of the furniture which has not been accounted for, but rather than address this under s 90SF(3)(r), I accept that it is appropriate to add this amount to the list of assets for division between the parties.

The principles applicable to the matters before the court

1. The provisions of s 90SM of the Act define the court’s power and obligations in determining applications for property settlement as between the parties to a de facto relationship. The court has a discretion to make orders altering the interests of parties in property, provided that the court is satisfied that it is just and equitable to make those orders.

2. According to the High Court of Australia in Stanford & Stanford (2012) 247 CLR 108, it is necessary to find that it is just and equitable to make an order for property settlement in the form of alterations of the existing property rights of the parties. Thus, the first step is to identify, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. That is what I have done in paragraph 123.

3. Then, as to whether it is just and equitable to make the orders sought, the High Court recognised that in most cases that is the position where the parties have separated, they are no longer living in a marital relationship, and they each seek an alteration of property interests. That is of course the case here.

4. Next, it is necessary to determine the order that should be made, and that is done by applying s 90SM(4) of the Act and taking into account the following matters:

   113.1the financial and non-financial contributions made directly or indirectly by or on behalf of a party to the relationship to the acquisition, conservation or improvement of any of the property of the parties or either of them (paragraphs (a) and (b));

   113.2the contribution made by a party to the relationship to the welfare of the family, including any contribution made in the capacity of homemaker or parent (paragraph (c));

   113.3the effect of any proposed order upon the earning capacity of either party to the relationship (paragraph (d));

   113.4the matters referred to in s 90SF(3) so far as they are relevant (paragraph (e)); and

   113.5any other order made under the Act affecting a party to the relationship (paragraph (f)).

5. Accordingly, in assessing the entitlement of each of the parties to a settlement of property, there is both a retrospective element in relation to the contributions of each of the parties, and a prospective element in relation to the matters referred to in s 90SF(3).

6. Pausing there, one issue arising in this matter was whether the applications for orders for settlement of property should be determined pursuant to s 79 or s 90SM of the Act. For the former section to apply, there would need to be the granting of leave to institute the proceedings more than 12 months after the decree nisi for dissolution of marriage became absolute in 1990. However, that did not happen, and at all times the parties have conducted the proceedings on the basis that s 90SM applies to the de facto relationship that continued after 1990, and concluded in July 2012. Indeed, the trial before Dawe J in 2015 was run on that basis, and there has been no suggestion by either party that the trial before me be conducted on any other basis.

1. Thus, I find that the assets and liabilities to be taken into account for the purposes of the respective applications of the parties are as follows:

   Assets

F Street, Suburb D	De facto husband and de facto wife (and Mr G Kellner)	$870,000
C Street, Suburb D	De facto husband and de facto wife	$770,000
I Street, Suburb K	De facto husband and de facto wife (and the second respondent)	$600,000
U Street, Suburb V	De facto husband	$1,000,000
Cash residual from withdrawal from superannuation	De facto wife	$20,749
Partial property settlements received	De facto wife	$100,000
Partial property settlements received	De facto husband	$100,000
Proceeds of sale from interests in JJ Pty Ltd , JJ Unit Trust and II Pty Ltd	De facto husband	$400,000
Proceeds of sale from interests in JJ Pty Ltd and II Pty Ltd	De facto wife	$400,000
Shares in Kellner Pty Ltd	De facto wife	NK
Shares in Kellner Pty Ltd	De facto husband	NK
Shares in S Pty Ltd	De facto wife	NIL
Jewellery, mobile phone, video camera and laptop	De facto wife	$5,000
Motor vehicle 2	De facto husband	$1,000
Motor vehicle 3 motor vehicle	De facto husband	$2,000
QQ2 Pty Ltd Partnership	De facto husband and de facto wife	NK
Furniture and household contents	De facto husband	$50,000
Superannuation – OO Scheme Member No. #48	De facto wife	$5,000
Paid legal fees	De facto wife	$18,031
Paid legal fees	De facto husband	$20,823
Sub total		$4,362,603

Liabilities

MM Bank loan account #840 (F Street, Suburb D	Kellner Pty Ltd	$375,388
MM Bank business maximiser account #240 (U Street, Suburb V)	De facto husband and de facto wife	$130,751
ANZ investment loan account 361 (I Street, Suburb K)	De facto husband and de facto wife (and the second respondent)	$232,537
Sub total		$738,676
Net assets		$3,623,927

Contributions

1. I now turn my attention to the respective contributions of the parties pursuant to s 90SM(4) of the Act.

2. The de facto wife submits that up to the time of separation the respective contributions of the parties should be assessed as being equal.

3. As for the post-separation contributions of the parties, the de facto wife of course was able to present evidence of her contributions, but it was impossible to determine the contributions of the de facto husband, given his lack of full and frank disclosure, and his lack of credibility. There is the evidence of his cash dealings, although the full extent of the same was unclear, the evidence of his failure to account for the income of the partnership and rent received by him, the absence of evidence as to his use of those funds, and also his failure to make loan repayments and pay other expenses such as rates and taxes from those funds, thereby increasing the liabilities of the parties.

4. However, ultimately the submission of the de facto wife was to assess the respective contributions of the parties as being equal overall, and address the issues just identified in the application of s 90SF(3)(r). I agree with that course (see Gould and Gould (2007) FLC 93-333).

5. For the de facto husband’s part, the only specific comment that he made about the contributions assessment was in cross-examination when he said that at the date of separation his contributions should be assessed at 60 per cent or 65 per cent.

6. However, he failed to indicate what his position was overall on contributions, his case being that at the end of the day there should be a division of the property of the parties as to 65 per cent to him and 35 per cent to the de facto wife. This presumably not only picks up the contributions of the parties, but also the relevant s 90SF(3) factors.

7. That is confusing though because it seems that his case is that post-separation his contributions exceeded the de facto wife’s given particularly that he was left to finish off the construction of the houses that were either being built by the partnership at separation, or about to be built.

8. It also leaves no room for his submission that the s 90SF(3) factors favour him, given as he put it, the de facto wife has received many assets since separation, she has had access to rental income, and her expenses have been paid from the sale of properties. Indeed, according to the de facto husband she has hundreds of thousands of dollars if not millions, and he has nothing.

9. Looking then at the detail of the respective contributions of the parties to the extent that the evidence allows. First, there are the initial contributions of the parties.

10. There is no issue that the de facto wife had no property of value at the commencement of their relationship. There is also no issue that the de facto husband owned the unit at FF Street, Suburb GG subject to a mortgage, and that he had an interest in the business known as QQ Pty Ltd with his brothers.

11. However, there is no evidence of the value of the unit at that time, or the amount outstanding pursuant to the mortgage, or the value of his interest in the business. All the evidence establishes is that three years later the unit was sold for $90,000, but it is unknown what the mortgage payout was, and the evidence of the de facto wife, which I accept, was that any net proceeds of the sale went to settle a dispute between the de facto husband and his brothers. Moreover, the de facto husband at the time of the commencement of the relationship still owed his former wife $67,000, which was subsequently paid by the parties taking out a loan in 1991/1992.

12. Thus, as the senior counsel for the de facto wife submitted, it is not open to this Court to find that there was a material difference in the financial positions of the parties at this time.

13. Next, there is the period up to the time of the separation of the parties. During that period of time the de facto husband was generally engaged in business. The de facto wife worked in outside employment from June 1987 to 2000, as well as assisting in the administration of the business, and from 2000 she worked full-time in the partnership. She undertook all the administration of the partnership.

14. The de facto husband undertook the operation of the business. The de facto husband had an unrestricted business licence which he renewed after separation and which expires sometime this year.

15. For a time prior to 2000, the de facto husband was effectively unemployed and the de facto wife was the sole income earner from her outside employment. The de facto husband also spent a lot of time in Country CC prior to separation leaving the de facto wife to operate the business, noting that she obtained a restricted licence to operate the business in 2008, but which licence lapsed in August 2017.

16. At the commencement of the relationship the de facto husband’s three children were aged eight, six and four years respectively. They lived with their mother but spent time with the de facto husband, and that time increased significantly as the children grew older.

17. When the children were with the de facto husband, it was the de facto wife who cared for them.

18. The de facto wife was also the primary homemaker in the family, with the de facto husband undertaking very few tasks around the home. The only assistance the de facto wife had was a person came in and mowed the lawn and a cleaner was employed at various times.

19. In his affidavit of evidence-in-chief adopted by the de facto husband he went out of his way to either deny or play down the contributions that the de facto wife made as a homemaker, as a “parent to his three children”, and in the administration of the business. However, I accept the evidence of the de facto wife wherein she detailed the extensive contributions that she made in these areas. I also accept that there were times when the de facto husband was effectively unemployed and the de facto wife was supporting the family.

20. That is not to suggest though that the de facto husband failed to contribute in the primary areas that he was able to, namely working in the business creating income. Indeed, to her credit, the de facto wife’s case in relation to the respective contributions of the parties during their relationship is that those contributions, although different in nature, should be treated as being equal, and that is what I find.

21. As to the post-separation contributions of the parties, as I have said, those of the de facto husband are impossible to assess given his lack of disclosure, and his lack of credibility, and that is better dealt with by being taken into account pursuant to s 90SF(3)(r).

22. In general terms though the de facto husband unilaterally completed the contracts that were in place at the time of separation, and undertook other projects, but failed to account for partnership income, failed to declare cash dealings with customers, failed to pay liabilities and failed to disclose the use of funds withdrawn from various accounts.

23. For the wife’s part she has primarily maintained the properties at C Street, Suburb D and F Street, Suburb D and made arrangements to facilitate the sale of the parties’ real estate to meet outstanding liabilities.

24. To repeat, I find that overall the respective contributions of the parties should be treated as equal, but on the basis that the conduct of the de facto husband post‑separation is addressed pursuant to s 90SF(3)(r).

Section 90SF(3) of the Family Law Act 1975 (Cth)

1. I now turn, as s 90SM(4)(e) dictates, to the individual matters to be taken into account pursuant to s 90SF(3).

(a)      the age and state of health of each of the parties to the de facto relationship;

1. The de facto husband is 72 years of age and the de facto wife is 63 years of age. Both parties have numerous health issues with some of the de facto wife’s preventing her from working at the moment. She had a fall on 15 December 2016 dislocating her shoulder and injuring her right forearm/hand. As a result she is unable to write or use a computer.

2. It is not apparent from any medical report he produced, and putting aside their admissibility, that by themselves the health issues of the de facto husband necessarily prevent him from working, at least in a supervisory capacity

(b)      the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;

1. I have set out elsewhere the income and property of the parties. As to their income, the de facto husband receives the age pension of $348.55 per week and a family tax benefit of $168.25 per week, and the de facto wife receives the rental income from the properties at C Street, Suburb D, and I Street, Suburb K. In relation to their property, and to the extent that the de facto husband’s is known, that is set out in paragraph 123 above. There will of course be a disparity between the property that each party will have if I make the orders proposed by the de facto wife, but that is in the context of not knowing the de facto husband’s actual financial position. Thus, that cannot be a basis for any adjustment in his favour.

2. As to the de facto wife’s capacity for gainful employment, she is able to earn income through the company WW Pty Ltd, and if her health improves she may be able to resume her employment as a receptionist/part-time administrator, but given her current circumstances, the prospects of her doing that are slim. I also note and accept her evidence that the company has no current contracts and there are no current intentions to resume working.

3. The de facto husband maintains that he has retired, and although he might be capable of resuming business, I consider that extremely unlikely given his age and certain of his health issues.

4. Sub-paragraphs (c) and (d) are not relevant.

(e)       the responsibilities of either party to support any other person;

1. The de facto wife has no responsibility to support any other person.

2. The de facto husband has his current wife and their young child living with him. However, there was no evidence of to what extent, if any, his current wife has the capacity to support herself, and the only evidence as to her financial circumstances is that she receives a carer’s benefit of $400 per week. Accordingly, I can make no finding as to the responsibility of the de facto husband to support her.

(f)       subject to subsection (4), the eligibility of either party for a pension, allowance or benefit under:

(i)any law of the Commonwealth, of a State or Territory or of another country; or

(ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;

and the rate of any such pension, allowance or benefit being paid to either party;

1. The de facto husband receives the age pension and a family tax benefit.

(g)      a standard of living that in all the circumstances is reasonable;

1. Each party appears to have a reasonable standard of living.

2. Sub-paragraphs (h), (i) and (j) are not relevant.

(k)the duration of the de facto relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;

1. The de facto husband’s earning capacity has not been affected by the relationship. As for the wife, as found by Dawe J in the previous trial, her involvement in the partnership business provided her with the capacity to earn income, but as I have also found, it is extremely unlikely that that opportunity is still available to her.

2. Sub-paragraph (l) is not relevant.

(m)if either party is cohabiting with another person – the financial circumstances relating to the cohabitation;

1. As indicated above, there was no evidence of the financial circumstances relating to the de facto husband’s cohabitation with his current wife and their child.

2. Sub-paragraphs (n), (o), (p) and (q) are not relevant.

(r)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;

1. The de facto wife submits that it is here that the de facto husband’s failure to provide full and frank disclosure, his failure to account for income, including cash received by him through the partnership business, his failure to account for rental income received by him, his failure to make interest payments on various overdrafts and loan accounts, the incurring of substantial bank charges, and his failure to pay rates and taxes and insurances on various properties, should all be taken into account in favour the de facto wife.

2. I agree with that submission. Apart from anything else, the effect of the de facto husband failing to make interest payments on the various overdrafts and loan accounts, and not using the cash money that he received, was that much of the sale proceeds of the various properties sold post-separation, went to meet the arrears and charges accrued under the various loans.

3. Sub-paragraphs (s) and (t) are not relevant.

4. From this analysis, it is apparent that the only factor that justifies an adjustment to the respective entitlements of the parties is the conduct of the de facto husband post-separation (s 90SF(3)(r)).

5. The de facto wife seeks that the adjustment be 10 per cent. In my view that is somewhat generous to the de facto husband given the substantial effect of his conduct on the assets of the parties, and the funds available to them, as well as the question mark over what cash money the de facto husband might still retain. However, that is the adjustment sought, and I find that it is an adjustment that should be made.

Section 90SM(4)(d) and (f) of the Family Law Act 1975 (Cth)

1. Next, I am obliged to take into account the effect of any proposed orders upon the earning capacity of either party (s 90SM(4)(d)), and any other order made under the Act affecting the party to the de facto relationship (s 90SM(4)(f)).

2. In relation to the first matter, the evidence does not indicate that the earning capacity of either party will be affected by the proposed orders.

3. In relation to the second matter, there have been a number of orders made in these proceedings that affect the parties, and I have referred to them in these reasons, and taken them into account where necessary.

4. An issue to highlight though is the proposed enforcement of the payment by the de facto husband of the various orders for costs identified in paragraph 4A of the orders sought by the de facto wife. Plainly, by making an order for the payment of those outstanding costs orders, I am taking them into account.

Conclusion

1. The net assets of the parties should be divided 60 per cent to de facto wife and 40 per cent to the de facto husband. The question then becomes what assets they should each have and what liabilities they should each be responsible for.

2. There is no issue that each party should be credited with their partial property settlements, their shares of the proceeds of sale of their interests in II Pty Ltd, JJ Pty Ltd and JJ Unit Trust, and their respective paid legal fees. Likewise, the de facto wife should be credited with the cash residual from her superannuation, the balance of her superannuation, the value of her jewellery, mobile phone, video camera and laptop, and her shares in S Pty Ltd. Similarly, the de facto husband should be credited with the value of his two motor vehicles, and the amount that he received for the sale of his furniture.

3. Further, because it was the de facto husband who set up Kellner Pty Ltd, and he has been responsible for its operation in the past, the de facto wife should resign as a director and transfer her shares in that company to him. The de facto husband should also indemnify the de facto wife in respect of any liabilities of that company, save and except the loan account secured over the property at F Street, Suburb D.

4. In addition, because it has been the de facto husband who has solely operated the partnership business QQ2 Pty Ltd since separation, and who has effectively received the income, albeit it unaccounted for and comprising in part cash monies, the de facto husband should have the partnership business but indemnify the de facto wife against any liabilities of that partnership including the MM Bank business maximiser account #240, and indemnify her against all personal income tax liability assessed as payable by the de facto wife in relation to any income allocated to her from the income of the partnership business.

5. As for the real estate, there is no issue that the de facto husband should retain U Street, Suburb V, and thus he should take over responsibility for the MM Bank loan account secured over the title to that property, and indemnify the de facto wife in relation thereto, coincidentally as referred to above.

6. There is also no dispute that the de facto wife can retain C Street, Suburb D, and thus the de facto husband should be required to transfer his interest therein to her.

7. As for F Street, Suburb D, that is where the de facto wife resides, and she has done so since 30 May 2014. Thus, it is appropriate that she have that property as well as taking responsibility for the MM Bank loan account secured over the title. That loan account of course is still in the name of Kellner Pty Ltd, and accordingly the de facto wife will need to refinance that loan and indemnify the de facto husband in relation thereto.

8. That leaves I Street, Suburb K. The de facto wife seeks that she transfer her interest in that property to the de facto husband with him and the second respondent taking over responsibility for the ANZ loan secured over the title, and indemnifying the de facto wife in relation thereto.

9. The de facto husband seeks that that property be sold, but the appropriate outcome is as sought by the de facto wife, given the findings that I have made about that property and the interests therein.

10. Finally, as set out at paragraph 124.13.4 the de facto husband should indemnify the de facto wife against any and all capital gains tax assessed as a result of the transfer or sale of I Street, Suburb K, and the de facto wife should indemnify the de facto husband against any and all capital gains tax assessed as a result of the transfer or sale of C Street, Suburb D and F Street, Suburb D.

1. The effect of this is that the assets and liabilities that the de facto wife will have are as follows:

   Assets

F Street, Suburb D	$870,000
C Street, Suburb D	$770,000
Cash residual from her superannuation	$20,479
Partial property settlements	$100,000
The proceeds of sale of her interest in JJ Pty Ltd and II Pty Ltd	$400,000
Shares in S Pty Ltd	NIL
Jewellery, mobile phone, video camera and laptop	$5,000
Superannuation – OO Scheme Member No. #48	$5,000
Paid legal fees	$18,031
Sub total	$2,188,510

Liabilities

MM Bank loan account #840	$375,388
Net Assets	$1,813,122

1. Sixty per cent of the available and known net assets is $2,174,356 and thus, to achieve that entitlement the de facto wife needs to receive from the de facto husband $361,234. In addition of course, there are the outstanding costs orders in favour of the de facto wife that the de facto husband has failed to pay. They total $31,838, and plainly this amount must also be paid by the de facto husband to the de facto wife.

2. The effect of the above is that the de facto husband will have the following assets and liabilities:

   Assets

U Street, Suburb V	$1,000,000
I Street, Suburb K	$600,000
Partial property settlements	$100,000
The proceeds of sale of his interest in JJ Pty Ltd, JJ Unit Trust and II Pty Ltd	$400,000
Shares in Kellner Pty Ltd	NK
Motor vehicle 2	$1,000
Motor vehicle 3	$2,000
QQ2 Pty Ltd Partnership	NK
Proceeds of sale of furniture	$50,000
Paid legal fees	$20,823
Sub total	$2,173,823

Liabilities

MM Bank business maximiser account #240	$130,751
ANZ investment loan account #61	$232,537
Sub total	$363,288
Net assets	$1,810,535

1. Thus, as identified above, the de facto husband will have to pay to the de facto wife the sum of $361,234, leaving him with net assets of $1,449,301, namely 40 per cent of the total net assets of the parties. In addition he will have to pay the outstanding costs of $31,838.

2. I note of course that each party will ultimately be responsible for capital gains tax and unpaid income tax liabilities, none of which I am in a position to make any findings about.

3. There was no evidence that the de facto husband has a fund from which he could make the payment of $361,234, together with the payment of the outstanding costs totalling $31,838, albeit there is a serious question mark over what money, including cash, he has that he has failed to declare and/or account for. Thus, without knowing that, the de facto wife seeks that in default of payment of those sums, the property at U Street, Suburb V, be sold, and from the net proceeds of sale she receive the said amounts of $361,234 and $31,838. Understandably, as well, the de facto wife also sought orders setting out the mechanics of how that property should be sold, and it is appropriate to make those orders.

I certify that the preceding one hundred and ninety (190) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered on 28 November 2018.

Associate:

Date:  28 November 2018