Keskin and Keskin & Anor

[2019] FamCA 384

FAMILY COURT OF AUSTRALIA

KESKIN & KESKIN AND ANOR [2019] FamCA 384

FAMILY LAW – PROPERTY DIVISION – 22 year marriage – three children – assets include real estate in Country O and complex network of interconnected companies involved in transportation industry.

FAMILY LAW – FINANCIAL RECORDS – extremely poor financial documentation maintained by the respondent – experts determining that operating entities valued at zero.

FAMILY LAW – INCOME TAX – assertion that tax not paid for 13 years – not possible to properly assess extent of liabilities in the absence of indebtedness for income taxation.

FAMILY LAW –  PROPERTY – CONTRIBUTIONS – unequal – future earning capacity of applicant poor.

FAMILY VIOLENCE – allegations – none proved to have impact on contributions.

Corporations Act 2001 (Cth) s 181
District Court Act 1973, s 43
Evidence Act 2004 (Cth) ss 128, 140(2)(c)
Family Law Act 1975 (Cth) ss 75, 79
Family Law Amendment (Family Violence and Cross-examination of Parties) Act 2018 (Cth) ss 102NA, 102NB
Family Law Rules 2004 (Cth) ch 13
Income Tax Assessment Act 1997 (Cth)

A v A; B v B [2000] 1 FLR 701
Abse v Smith [1986] QB 536
Allied Pastoral Holdings Pty Ltd v Commissioner of Taxation (1983) 1 NSWLR 1
Amador & Amador (2009) 43 Fam LR 268
Barkley & Barkley (1976) 1 Fam LR 11,554
Bay Marine Pty Ltd v Clayton Country Properties Pty Ltd (1986) 8 NSWLR 104
Bevan & Bevan (2013) 49 Fam LR 387
Brewer & Brewer (No 2) [2019] FamCA 247
Britt v Britt (2017) 56 Fam LR 526
Browne v Dunn (1893) 6 ER 67
Collier v Hicks (1831) 109 ER 1290
Collingridge & Aiolfi [2019] FamCAFC 88
Commonwealth Bank of Australia v Individual Homes Pty Ltd (1994) 119 ACTR 1
D v S [1977] 1 FLR 724
Damjanovic v Maley (2002) 55 NSWLR 149
Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588
Ellis v Wallsend District Hospital (1989) 17 NSWLR 553
Flower of Hart (a firm) v White Industries (Qld) Pty Ltd (1999) 87 FCR 134
Galladin Pty Ltd v Aimnorth Pty Ltd (1993) 60 SASR 145
Gillard & Gillard [2016] FamCA 841
Giorginis v Kastrati (1988) 49 SASR 371
Goldsmith v Sperrings Ltd [1977] 1 WLR 478
Goodridge v Beadle (2017) 57 Fam LR 425
Gould & Gould [2007] FamCA 609
House v R (1936) 55 CLR 499
Hubbard Association of Scientologists International v Andersonand Just [1972] VR 340
In the Marriage of Ahmad (1994) 18 Fam LR 514
In the Marriage of Browne & Green (1999) 25 Fam LR 482
In the Marriage of Chemaisse (1987) 11 Fam LR 392
In theMarriage of Cooke & Stehbens (1998) 24 Fam LR 5
In the Marriage of Cordell (1977) 3 Fam LR 11,588
In the Marriage of Dench (1978) 6 Fam LR 105
In the Marriage of Doherty (1995) 20 Fam LR 137
In the Marriage of Ferguson (1978) 4 Fam LR 312
In the Marriage of Ferraro (1992) 16 Fam LR 1
In the Marriage of Figgins (2002) 29 Fam LR 544
In the Marriage of Fisher (1990) 13 Fam LR 806
In the Marriage of Georgeson (1995) 19 Fam LR 302
In the Marriage of Gill (1984) 9 Fam LR 969
In the Marriage of Hill (2005) 32 Fam LR 552
In the Marriage of Howes (1981) 7 Fam LR 650
In the Marriage of Kennon (1997) 22 Fam LR 1
In the Marriage of Mallet (1984) 156 CLR 605
In the Marriage of Malpass & Mayson (2000) 27 Fam LR 288
In the Marriage of McLay (1996) 20 Fam LR 239
In the Marriage of McMahon (1995) 19 Fam LR 99
In the Marriage of Mead (1983) 9 Fam LR 193
In the Marriage of Menz (1980) 6 Fam LR 325
In the Marriage of MG (2000) 26 Fam LR 497
In the Marriage of Myerthall (1977) 3 Fam LR 11,324
In the Marriage of P & P (1985) 9 Fam LR 1100
In the Marriage of P (1979) 5 Fam LR 454
In the Marriage of Park (1978) 4 Fam LR 488
In the Marriage of Prestwich (1984) 9 Fam LR 1069
In the Marriage of Radwan (1985) 11 Fam LR 1
In the Marriage of Rowell; Deputy Commissioner of Taxation (Intervener) (1989) 96 FLR 449
In the Marriage of Scott (1994) 17 Fam LR 420
In the Marriage of Soblusky (1976) 2 Fam LR 11,528
In the Marriage of Spiteri (2005) 33 Fam LR 109
In the Marriage of Tingley (1984) 10 Fam LR 707
In the Marriage of Townsend (1994) 18 Fam LR 505
In the Marriage of W (1980) 6 Fam LR 538
In the Marriage of Wardman & Hudson (1978) 5 Fam LR 889
In the Marriage of Waters & Jurek (1995) 20 Fam LR 190
In the Marriage of Waters (1981) 6 Fam LR 871
In the Marriage of Watson (2001) 28 Fam LR 481
In the Marriage of Willmore (1988) 12 Fam LR 692
In the Marriage of Zappacosta (1976) 2 Fam LR 11,214
In the Marriage of Zdravkovic (1982) 8 Fam LR 97
Ismail v Elfar [2011] FamCA 716
Kannis & Kannis (2002) Fam LR 83
KT v KJ (2000) 26 Fam LR 289
Levinge v Director of Custodial Services (1987) 9 NSWLR 546
Linder & Linder [2016] FamCAFC 139
Maine & Maine (2016) 56 Fam LR 500
Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705
Manson v Ponninghaus [1911] VLR 239
McGrath v Dobie (1890) 16 VLR 646
McKenzie v McKenzie [1970] 3 All ER 1034
O’Toole v Scott [1965] AC 939
Pacific Air Freighters (Qld) Pty Ltd v Toller (2000) 171 ALR 519
Page v Vanker (Court of Appeal New South Wales, unreported, 7 December 1990)
Paragon Finance PLC v Noueiri [2001] 1 WLR 2357
Paxton & Paxton [2016] FCCA 1689
Precision Plastics Pty Ltd v Demi (1975) 132 CLR 362
Price v Price [2014] FamCA 1020
R v Bow County Court; Ex parte Pelling [1999] 4 All ER 751
R v Leicester City Justices; Ex parte Barrow [1991] 2 QB 260
Re F: Litigants in Person Guidelines (2001) 27 Fam LR 517
Re G J Mannix Ltd [1984] 1 NZLR 309
S & S [2003] FamCA 905
Smith v R (1985) 159 CLR 532
Spence & Spence [2008] FamCA 263
Spoke & Spoke (No 2) [2009] FamCA 40
Stanford v Stanford (2012) 247 CLR 108
Stergiou v Citibank Savings Ltd (1998) 148 FLR 244
Treasury Wine Estates Ltd v Melbourne City Investments Pty Ltd (2014) 45 VR 585
Whelan & Whelan [2010] FamCA 530
Williams v Spautz (1992) 174 CLR 509

APPLICANT: Ms Keskin

RESPONDENT: Mr Keskin

SECOND RESPONDENT: Mr R Keskin

FILE NUMBER: MLC 9445 of 2014

DATE DELIVERED: 19 June 2019

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: The Honourable Justice Wilson

HEARING DATES: 20, 21, 22 May 2019

REPRESENTATION

APPLICANT: In person

RESPONDENT: In person

MCKENZIE FRIEND: Mr A

SECOND RESPONDENT: No appearance

Orders

1. The property at City P, Country O, must be sold by contract in writing entered into between the applicant and a purchaser by 4pm on 20 August 2019.

2. The sale of price derived from the sale referred to in paragraph 1 hereof is to be divided and disbursed, once all legal and selling costs have been paid, as to –

   (a)       65% to the applicant; and

   (b)       35% to the respondent.

3. On or before 4pm on 20 August 2019, the respondent at his expense must provide to the applicant –

   (a)       two valuations of each of 1, 2 & 3 F Street, Suburb G; and

   (b)the amount D Pty Ltd owes to each mortgagee under each mortgage over the two pieces of land referred to in paragraph 3(a) hereof.

4. On or before 4pm on 27 August 2019 the applicant and the respondent must exchange by email the net value of –

   (a)       1 & 2 F Street, Suburb G; and

   (b)       3 F Street, Suburb G.

5. On or before 17 September 2019 the respondent must pay the applicant a sum representing 60% of the net value of the land at –

   (a)       1 & 2 F Street, Suburb G; and

   (b)       3 F Street, Suburb G.

6. On or before 4pm on 20 August 2019 the respondent must pay to the applicant the sum of $472 800 being an amount corresponding to 60% of the value of the rolling stock valued by CC Pty Ltd.

7. All applications are otherwise dismissed.

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 Keskin & Keskin 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 MELBOURNE

FILE NUMBER: MLC 9445 of 2014

Ms Keskin

Applicant

And

Mr Keskin

Respondent

Mr R Keskin
Second Respondent

REASONS FOR JUDGMENT

Introduction

1. After their marriage of more than 22 years collapsed, the applicant and the respondent sought orders altering property interests.

2. Among the many issues that fell for determination were those set out below.  During the trial of this proceeding the applicant and the respondent were unrepresented.  At the outset I acknowledge that the applicant and respondent conducted themselves well, despite the personal enmity that pervaded this litigation.  Their co-operation assisted in the tolerably smooth running of the trial.  The issues that fell for determination were as follows –

   a)the composition of the assets that fell for division;

   b)the contributions by both parties; and

   c)the manner by which the assets should be divided.

Synopsis

1. For the reasons that follow, in my judgment –

   a)when properly analysed the assets that fell for division were made up of rolling stock, real estate overseas, part of a business in Victoria;

   b)contributions were unequal; and

   c)the assets should be divided as to 60% to the applicant and 40% to the respondent.

Some important details

1. By way of overview and before examining the history of their financial circumstances, it must be said at once that the very hard work of the applicant and the respondent during their marriage led them to amassing a significant estate and to them enjoying what each described as a lavish lifestyle over many years.  For reasons that become apparent in the passages below, the expenses associated with their transport businesses overwhelmed them leading to investigations by regulatory authorities and to a significant adjustment of the operational financing of their businesses.  The pressures associated with those activities took a heavy toll on the marriage between the applicant and the respondent.  It led to family violence.  Their marriage eventually failed.  The long term nature of the relationship between the respondent and his children suffered and the applicant and respondent eventually commenced litigation in the Federal Circuit Court of Australia (“FCCA”) that was later transferred to this court upon application being made for the appointment of receivers under the Corporations Act to one of the companies relevant to this dispute.  As the FCCA has no power to make orders under the Corporations Act this litigation was transferred to this court.

2. In all, this case has been before a federal court on no less than 35 separate occasions.  Even recognising that on some of those days the parties were not legally represented and may not have advanced their application as expeditiously as could have been done, nevertheless 35 separate hearing days is a lamentable statistic.  I took over this case on 1 April 2019 and tried it to completion a month later.

The McKenzie friend

1. Despite the factual complexity of the case the parties did well in conducting the trial by themselves, without legal representation.  Immediately prior to the trial the respondent had been represented by his solicitor, Mr Noureddine, who while retained was of considerable assistance.  The applicant had the assistance of Mr A.  I gave her leave to retain the assistance of Mr A as a McKenzie friend.  At one stage the precise scope of Mr A’s involvement in the case was in question.  It became necessary for me to examine the metes and bounds of the role of the McKenzie friend.  It arose in the manner to which I now turn with the legal consequence that I now record.

2. On 1 April 2019 the applicant announced she wished Mr A to participate in the trial as the applicant’s McKenzie friend.  I asked the applicant what role the proposed McKenzie friend intended to perform in this case.  The applicant told me that the proposed McKenzie friend would address me on matters in relation to which the applicant felt ill-equipped to adequately convey the propositions she wanted to convey.  The solicitor for the respondent protested about the proposed McKenzie friend stepping into the role of the advocate and opposed the grant of leave.  Ultimately I granted leave.

3. The concept of a person acting as a McKenzie friend is said to be derived from the decision in the UK Court of Appeal in McKenzie v McKenzie.[1]  That case coined the appellation “McKenzie friend” yet the concept of a McKenzie friend first emerged in the 1831 decision in Collier v Hicks.[2]  In that case Lord Tenterden CJ held as follows –

   This was undoubtedly an open Court, and the public had a right to be present, as in other Courts; but whether any persons, and who shall be allowed to take part in the proceedings, must depend on the discretion of the magistrates; who, like other Judges, must have the power to regulate the proceedings of their own Courts. The Superior Courts do not allow every person to interfere in their proceedings as an advocate, but it confined that privilege to gentlemen admitted to the Bar.

   [1] [1970] 3 All ER 1034

   [2] (1831) 109 ER 1290

4. In the 1800s a litigant’s representative in court was ordinarily a legally trained representative, usually a barrister.  Ordinarily, the litigant’s barrister advocated for the litigant.  Rules of court permitted that and ordinarily prevented anyone else from being that litigant’s advocate.  Frequently, the putative McKenzie friend desired only to write a note to pass to the litigant in person for the litigant in person to read while conducting his or her own case.  In Collier v Hicks Lord Tenterden CJ held that such conduct was entirely proper.  His Lordship put the proposition in the following terms –

   Any person, whether he be a professional man or not, may attend as a friend of either party, may take notes, may quietly make suggestions, and give advice; but no one can demand to take part in the proceedings as an advocate, contrary to the regulations of the court as settled by the discretion of the justices.

5. Lord Justice Sachs in McKenzie v McKenzie approved of that approach.  There Sachs LJ held as follows –

   All the assistance a litigant in person gets from a judge and from opposing counsel is not really the same thing as having skilled assistance at his elbow during the whole of a lengthy trial. In those circumstances it has not been shown that there was no prejudice to the husband on the adultery issue through lack of the assistance which he ought to have had. It is moreover always, to my mind, in the public interest that litigants should be seen to have all available aid in conducting cases in court surroundings, which must of their nature seem both difficult and strange.

6. Persons having the status of a McKenzie friend were circumscribed in what they could do.  In the United Kingdom the McKenzie friend was not entitled to become the advocate, as was held in R v Leicester City Justices; ex parte Barrow.[3]  In that case Lord Donaldson held that the McKenzie friend had neither status nor rights, especially no right of audience.  Conversely, his Lordship held that the litigant had a right to reasonable assistance, the possibilities of which were extensive.  However, as Staughton LJ pointed out, an assistant’s assistance should be terminated if the assistant wasted time unnecessarily, prompted the litigant to ask irrelevant questions or if the assistant occasioned delay.  Lord Justice Staughton recommended that the title “McKenzie friend” should not be used because it suggested a status and a mystique neither of which were justified.

   [3] [1991] 2 QB 260

7. In R v Bow County Court; ex parte Pelling,[4] the Court of Appeal (Lord Woolf MR, Brooke & Robert Walker LJJ) made four important observations about a McKenzie friend.  They were –

   a)a McKenzie friend has personally no rights with regard to the litigation;

   b)a McKenzie friend has no right to be an advocate;

   c)whether the proceeding is in open court or chambers the court has a discretion to exclude a McKenzie friend; and

   d)if the proceeding is in open court in which a member of the public ordinarily has the right to be present some justification must be established if the litigant is not to have the assistance of another person.

   [4] [1999] 4 All ER 751

8. Lord Woolf MR held that if fairness and justice was to be achieved, a litigant in person had an entitlement to be heard and if he or she needed assistance for that purpose, then the court should not deprive that person of that assistance without reason.  His Lordship specifically cited family law litigation in which a McKenzie friend may behave in a manner that encouraged an inappropriate adversarial approach.

9. In a criminal law context, the High Court of Australia passed upon the question whether a judge should permit an accused person to have a McKenzie friend in Smith v R.[5]  There, the court held as follows –

   The question whether an accused person should be allowed to have a “McKenzie friend” present at his trial is very much a matter of practice and procedure, within the discretion of the trial judge to decide.  It would be far too absolute to say that an application to have a “McKenzie friend” should always be refused.  All the circumstances of the case must be considered in deciding upon the application.

   [5] (1985) 159 CLR 532

10. The position in Australia about a McKenzie friend not having a right of audience is supported by authority that predated the UK Court of Appeal’s determination on point in R v Bow County Court; ex parte Pelling.  In Stergiou v Citibank Savings Ltd,[6] Crispin J of the Supreme Court of Australian Capital Territory held that a McKenzie friend normally has no right of audience but only a right to advise and assist.  In reaching that conclusion his Honour followed observations to like effect in Galladin Pty Ltd v Aimnorth Pty Ltd.[7]  However, Crispin J held that the rule that a McKenzie friend may not act as an advocate should not be an inflexible bar to reasonable assistance to a litigant acting on his or her own behalf as the point turns on whether the interests of justice require a McKenzie friend to be heard addressing the court on behalf of the litigant.

    [6] (1998) 148 FLR 244

    [7] (1993) 60 SASR 145 (Perry J)

11. In the family law jurisdiction, various observations have been made about the McKenzie friend.  One of the earliest emanated from the Full Court’s decision in In theMarriage of Cooke & Stehbens.[8]  There, Ellis, Lindenmayer & Mushin JJ held that an unrepresented litigant’s assistant, who was granted leave to act as a McKenzie friend, was permitted to address the court but such a course “was not to be taken as any precedent, either in the future hearings in this matter or in the law generally and such permission was strictly as a result of the special circumstances of this case”.

    [8] (1998) 24 Fam LR 5

12. In In the Marriage of MG,[9] Kay, Holden & Mullane JJ held that in some cases, where appropriate, the judicial officer may allow the adviser to sit at the Bar table and even speak to the court.

    [9] (2000) 26 Fam LR 497

13. A differently constituted Full Court considered the role of a McKenzie friend in KT v KJ.[10]  That case involved a litigant who requested the court to grant leave for a person whose name was Schorel to sit at the Bar table to act as KT’s McKenzie friend.  The Full Court permitted Schorel to sit in the well of the court, make notes and provide advice so long as that did not unduly disrupt the proceeding.  The Full Court found that KT was unable to make any submissions whatsoever without Schorel first writing out word-for-word the submission that was to be made.  The court said it doubted whether KT understood what he was seeking to argue.  Those observations are significant because in a later decision of a single judge of this court, Lindenmayer J in In the Marriage of Watson[11] extracted the ratio of KT v KJ to be the following –

    However, an important limitation upon the role and functions of a “McKenzie friend” is that he or she may not (except, perhaps, in the most exceptional cases, and with the express leave of the court) act as an advocate for the litigant in the proceedings.  That limitation has been recognised at least since a statement was made to that effect by Lord Tenterden CJ in Collier v Hicks (1831) 109 ER 1290 at 1292, and has recently been reaffirmed by the Full Court (Kay J, with whom Holden and Mullane agreed) in the KT v KJ (2000) 26 FamLR 289.

    [10] (2000) 26 Fam LR 289

    [11] (2001) 28 Fam LR 481

1. On my reading of KT v KJ the statement of principle was not as broad as Lindenmayer J put it.  For that matter, other authority surveyed above in fact provided illustrations of the McKenzie friend addressing the court.  I agreed it is unusual for the McKenzie friend to become the putative barrister for the party enlisting his or her assistance.  In D v S[12] Brooke LJ held that only in the most exceptional of cases may the McKenzie friend act as an advocate.  That said, the more likely situation may be where the McKenzie friend is permitted to address the court.  No case of which I am aware has sanctioned the McKenzie friend examining a witness in-chief still less cross-examining a witness.

   [12] [1977] 1 FLR 724

2. In more recent times, the McKenzie friend has become the lay advocate, that is to say, a person who does not have legal qualifications but who seeks leave of the court to speak for the litigant in person.  The Court of Appeal of the Supreme Court of New South Wales extensively examined the issue in Damjanovic v Maley.[13] Of course, it must be said at once that in that case, unlike in this case, s 43 of the District Court Act expressly provided that a party to a proceeding could appear –

   a)if the party was a company, by a legally qualified representative;

   b)if the party was a natural person, by a legally qualified representative; or

   c)in any other case by a person allowed by leave of the court.

   [13] (2002) 55 NSWLR 149

3. In Damjanovic v Maley, Mr Damjanovic’s command of the English language was poor so he sought assistance from Ms Vukic, a psychologist, to represent him as his advocate.  In the trial in the District Court of New South Wales, the trial judge refused Ms Vukic leave to represent Mr Damjanovic. Mr Damjanovic appealed.  The Court of Appeal held that the trial judge made no error in the exercise of his Honour’s discretion to refuse the lay advocate leave to appear for the appellant.  Among the many propositions for which the decision stands are the following –

   a)the provisions of s 43 of the District Court Act conferred a discretion upon the trial judge to grant or to refuse to grant leave to the lay advocate to appear on behalf of a party and such discretion needed to be exercised in accordance with principles espoused in House v R;[14]

   b)as an incident of controlling its own proceedings, a court could allow itself to be addressed in a proper case by any person it considered appropriate, citing McGrath v Dobie,[15] O’Toole v Scott,[16] and Hubbard Association of Scientologists International v Andersonand Just;[17]

   c)where the litigation is one of complexity, the discretion may be exercised in favour of allowing a lay person to appear for the litigant, as was held in Re G J Mannix Ltd,[18] Bay Marine Pty Ltd v Clayton Country Properties Pty Ltd,[19] Hubbard Association of Scientologists v Anderson and Just and Commonwealth Bank of Australia v Individual Homes Pty Ltd;[20]

   d)where the litigant is likely to encounter language difficulties a lay advocate may be utilised as was held in Stergiou v Citibank Savings Ltd;

   e)however, language difficulties can ordinarily be overcome by the use of an interpreter and if the lay advocate fell into disagreement with the interpreter, the lay advocate may be put in a position of conflict, as appeared in Pacific Air Freighters (Qld) Pty Ltd v Toller;[21]

   f)lay advocates are unqualified, unaccredited and uninsured thereby placing the client at considerable risk and a lay advocate does not owe the same duties to his client as does a legally qualified legal representative, as was held in Abse v Smith,[22] Paragon Finance PLC v Noueiri[23] and D v S ; and

   g)the exercise of the discretion is governed by the public interest in the attainment of justice, especially in the effective, efficient and expeditious disposal of litigation in the court, an end generally achieved by the parties retaining qualified legal representation.

   [14] (1936) 55 CLR 499

   [15] (1890) 16 VLR 646

   [16] [1965] AC 939

   [17] [1972] VR 340

   [18] [1984] 1 NZLR 309

   [19] (1986) 8 NSWLR 104

   [20] (1994) 119 ACTR 1

   [21] (2000) 171 ALR 519

   [22] [1986] QB 536

   [23] [2001] 1 WLR 2357

4. Returning to the specific context of litigation in this court, it must be kept in mind that the Full Court in Re F: Litigants in Person Guidelines[24] expressly stipulated a collection of guidelines to be adopted where a litigant was not represented.  Cronin J address them in Spoke & Spoke (No 2).[25]  In many cases, the adoption of those guidelines will go a considerable way to obviating the need for a McKenzie friend. In the end I allowed Mr A to be the applicant’s McKenzie friend but not to speak for her.

   [24] (2001) 27 Fam LR 517

   [25] [2009] FamCA 40

5. Being unrepresented, on the first day of the trial and in conformity with my obligations under Re F: Litigation Guidelines, I explained to the parties in plain language how the trial would unfold.  Each acknowledged understanding the process that I explained.  Despite the existence of allegations of family violence and despite each party being unrepresented, the provisions of the Family Law Amendment (Family Violence and Cross-examination of Parties) Act that address aspects of cross examination did not apply as that legislation was not operational when I conducted the trial of this case, so it was not necessary to involve Victoria Legal Aid.  That said, out of caution and at my request a court security officer sat in the well of the court throughout the trial.

The applicant’s evidence

1. The applicant relied on a collection of affidavits that were marked as exhibits in the trial from which her contentions in the case emerged.  It is my practice to mark those affidavits as exhibits in the trial in accordance with the rule in Manson v Ponninghaus,[26] a matter explored by me in detail when sitting as a member of the FCCA in Goodridge v Beadle.[27]  The uncontroversial evidence on which she relied may be synthesised in the manner set out below –

   a)she married the respondent in …1992, they separated in September 2014 and they divorced in June 2017;

   b)they have three children, the eldest of whom is a professional, the middle child a student and the youngest a secondary school student;

   c)at the date of their marriage the applicant was 18 and the respondent was 22 years of age;

   d)the applicant did not pursue a career for herself and instead became involved (later heavily) in the operation of several transport businesses operated by the respondent;

   e)her mother as well as her mother-in-law assisted with raising her children while the applicant worked; and

   f)the applicant has worked for various employers.

   [26] [1911] VLR 239

   [27] (2017) 57 Fam LR 425

2. The applicant said, as indeed was common ground, that prior to separation, the applicant and the respondent enjoyed a “comfortable lifestyle” as the applicant described it in paragraph 18 of her 15 June 2018 affidavit.  She said the business (inferentially, one or more of the transportation businesses operated by her and the respondent) supported hundreds of thousands of dollars’ worth of personal expenses including mortgage payments, private school fees and holidays.  She said the respondent refused to continue making payment of those outgoings after separation.

3. In this litigation it became relevant to examine aspects of certain assets.  Those were the following –

   a)real estate in Country O, the registered proprietor of which was the applicant;

   b)commercial real estate at 1 & 2 F Street, Suburb G;

   c)commercial real estate at 3 F Street, Suburb G;

   d)the assets and undertaking of B Pty Ltd; and

   e)the assets and undertaking of C Pty Ltd.

4. A dispute emerged in this case about the value of each asset described above as well as the contribution each of the applicant and respondent made to the totality of assets.  In addition, each of the applicant and the respondent contended that the other had engaged in acts of family violence in a manner that was relevant to the assets that fell for division.  In discussion with both the applicant and the respondent it was apparent that neither was appraised of the way a finding of family violence bore upon property issues in this case.

Family violence allegations

1. The relevance of family violence (or “domestic violence” as it was termed in the 1997 Full Court decision of In the Marriage of Kennon)[28] has deep roots in family law jurisprudence concerning the division of assets under s 79 of the Family Law Act.  Soon after the Family Law Act commenced operation on 5 January 1976, early decisions on point emerged such as the decisions in In the Marriage of Soblusky[29] and In the Marriage of Ferguson.[30]  In Soblusky the Full Court considered the relevance or otherwise of the conduct of the parties including violent conduct in the division of assets.  Yet in Ferguson the Full Court held that conduct causing the breakdown of the marriage was not relevant in a consideration of the administration of the financial provisions of the Family Law Act.  However, in that case Watson and Wood SJJ held that conduct of a party to the marriage was relevant if the conduct had produced consequences which diminished or destroyed the property of the parties or the effect of the conduct resulted in the value of the property being diminished.  Further, in Barkley & Barkley[31] Carmichael J was concerned with the economic consequences of the husband in that case where, immediately prior to separation, the husband assaulted the wife causing her total deafness in one ear.

   [28] (1997) 22 Fam LR 1

   [29] (1976) 2 Fam LR 11,528

   [30] (1978) 4 Fam LR 312

   [31] (1976) 1 Fam LR 11,554

2. For some time the preponderance of authority favoured the view that domestic violence was relevant to a claim under s 79 of the Family Law Act only where that violence was causally linked to a direct financial consequence.  In 1995 the learning ebbed in a different direction with the decision in In the Marriage of Waters & Jurek.[32]  That case concerned a 22 year marriage.  Judgment was given on 15 September 1995. Two months later, a different Full Court in In the Marriage of Doherty[33] decided again the relevance of domestic violence in a s 79 claim. It must be said that Fogarty and Baker JJ were members of the Full Court in Waters as well as in Doherty.  In Doherty, Baker J held and Fogarty and Hannon JJ agreed that the husband’s domestic violence caused the wife’s contributions as home make to increase and the husband’s contributions to diminish.

   [32] (1995) 20 Fam LR 190

   [33] (1995) 20 Fam LR 137

3. In Kennon the plurality (at 24) referred to a marked change in perceptions, both legal and social, about domestic violence and its impact. The plurality said it was appropriate to give effect to those changed perceptions. The plurality was keen to prevent a floodgates argument so it spoke of the circumstances in which domestic violence may be relevant as being exceptional. Fogarty and Lindenmayer JJ expressed the position in the following terms –

   Put shortly, our view is that where there is a course of violent conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon that party's contributions to the marriage, or, put the other way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties’ respective contributions within s 79. We prefer this approach to the concept of “negative contributions” which is sometimes referred to in this discussion.

4. The court went on to say the following –

   It is essential to bear in mind the relatively narrow band of cases to which these considerations apply. To be relevant, it would be necessary to show that the conduct occurred during the course of the marriage and had a discernible impact upon the contributions of the other party. It is not directed to conduct which does not have that effect and of necessity it does not encompass (as in Ferguson ) conduct related to the breakdown of the marriage (basically because it would not have had a sufficient duration for this impact to be relevant to contributions).

5. Thus, at an evidentiary level, three matters needed to be proved by the person asserting the existence of family violence, or as it was then called, domestic violence.  First, the violence had to be shown as having occurred during the course of the marriage.  Next, it had to be shown that it had a discernible impact on the contributions of the other party.  Finally, it had to be shown how the court was to quantify a party’s capacity to contribute.

6. Early hesitations about the impact of domestic violence upon the assessment of contributions shifted, as were apparent in Soblusky and Ferguson, to the expressions in Kennon about it being exceptional to take into account domestic violence in any assessment of contributions.  By 2003 the Full Court stated there was “no doubt” that domestic violence may be a relevant factor in assessing contribution.  That emerged from S & S[34] (Kay, May & Carter JJ).  Likewise, in In the Marriage of Hill,[35] a differently constituted Full Court adopted the Kennon formulation and concluded that no evidence supported the trial judge’s reduction in the assessment of the wife’s contributions on account of her conduct or behaviour.  The Full Court highlighted the need for precise evidence about the role each party played in the course of the marriage and the contributions each made to the marriage.

   [34] [2003] FamCA 905

   [35] (2005) 32 Fam LR 552

7. It is now accepted beyond argument that violence perpetrated by one party to the other party of the marriage may be taken into account in assessing contributions. So far as the evidentiary burden in proving domestic violence is concerned, s 140(2)(c) of the Evidence Act provides that the gravity of the matters alleged may be taken into account in deciding whether the court is satisfied that the allegation has been proven.  In Whelan & Whelan,[36] Watts J adopted that approach and expressed it helpfully in the following way –

   The wife asserts incidences of violence perpetrated by the husband against her. In a civil proceeding, a court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities (s 140(1) Evidence Act 1995 (Cth)).

   The gravity of the matters alleged may be taken into account in deciding whether the court is so satisfied (s 140(2)(c) Evidence Act).

   It is said clear or cogent proof is necessary where serious matters are alleged. That is not a matter which goes to the standard of proof but rather, is said to reflect a convention or perception that partners in a relationship do not ordinarily engage in violent behaviour and a court should not lightly find that they do (see Briginshaw v Briginshaw (1938) 60 CLR 336). It is not, however, inherently unlikely that a matter coming to this court, will involve family violence. In fact, a study in 2003 by the AIFS indicated that violence was a feature in 79 percent of the cases brought in the Family court.

   In Neat Holdings Pty Ltd v Karajon Holdings Pty Ltd (1992) 110 ALR 449), the High Court warned that a "clear and cogent" evidence test was likely to be unhelpful and even misleading.

   The Full Court in Kennon & Kennon (1997) FLC 92-757 indicated that a course of violent conduct could be taken into account in property proceedings where it was demonstrated to have had a significant adverse impact upon a party's contribution to the marriage or to put it another way, to have made his or her contributions significantly more arduous than they ought to have been.

   Once findings of fact are made about one party's conduct, it may or may not be possible to make findings about the physical or psychological effect of that conduct on the other party. Whether or not that is possible in order to establish a "Kennon" claim, the court needs to make some finding about the effect of the conduct of one party upon the contributions made by the other.

   [36] [2010] FamCA 530

8. The need for a link to be shown between the domestic violence alleged and the impact of that violence on the victim’s contributions was stated in Spence & Spence.[37]

   [37] [2008] FamCA 263

9. In Gillard & Gillard[38] Watts J addressed contentions of the wife to the effect that her contributions were made significantly more arduous by reason of family violence.  His Honour cited Kennon as well as S & S as well as s 140(2)(c) of the Evidence Act for the evidentiary standard. In percentage terms, in Gillard Watts J referred to the decision of Collier J in Ismail v Elfar[39] where non-particularised acts of family violence were alleged in a long marriage and where Collier J held that the family violence could not have impacted in a vastly significant way so a two percent adjustment was made.

   [38] [2016] FamCA 841

   [39] [2011] FamCA 716

10. In 2016 the Full Court again examined the evidence led at trial about the impact that family violence allegedly had upon the wife’s contributions.  In Maine & Maine[40] the court held as follows –

    Rather, established principles by reference to the Full Court decision in Kennon, and the cases which have followed it, required of his Honour findings in respect of evidence that addressed specifically, as Kennon suggests is required, the impact that the violence had upon the wife’s contributions including, significantly (but not exclusively), her contributions referenced to s 79(4)(c).

    [40] (2016) 56 Fam LR 500

11. As is frequently the case in litigation where family violence is alleged, the trial judge is required to determine whether the evidence of family violence is probative and reliable. So long as the evidence is probative it will usually be admissible.  Of the evidentiary issues, in Britt v Britt,[41] the Full Court said the following –

    Thus, evidence that is probative, even slightly probative, is admissible because it could rationally affect the determination of an issue. For it to be inadmissible it must lack any probative value.

    As the above passage makes clear, s 55 of the Evidence Act proceeds on the basis that a trial judge cannot take the credibility, or lack thereof, of a witness into account when determining the admissibility of evidence. Any issue of credit is taken into account later, when considering the weight or importance the evidence should be given.

    Therefore, in determining the admissibility of the proposed evidence set out above, the primary judge was obliged to consider whether the evidence could rationally affect the assessment of the existence of family violence, which led to the appellant’s contributions becoming more onerous. If the evidence could do so — that is, if it was not “inherently incredible, fanciful or preposterous”— it should have been admitted.

    In this regard it is important to note that the probative value of a particular piece of evidence should not be considered in isolation from the rest of the evidence, including the proposed evidence. This is particularly so where the court is asked to draw an inference from all of the evidence, that is to say, all of the circumstances of the matter. This is because one piece of evidence may affect the probative value of another and a number of pieces of evidence when considered together may have a probative value greater than if each is considered individually.

    Evidence is capable of being relevant to an issue if it puts other evidence into context, such as explaining the nature of the relationship in which other events occurred.

    [41] (2017) 56 Fam LR 526

12. As to the precise nature of the evidence of family violence, aside from the standard to be proved, two decisions have addressed important evidentiary matters.  It will be recalled that in S & S (also called Spagnardi & Spagnardi), the Full Court spoke of three separate matters in respect of which the court needed to be satisfied, those being –

    a)the incidence of domestic violence;

    b)the effect of domestic violence; and

    c)the evidence to enable the court to quantify the effect of the violence upon the parties’ capacity to contribute as defined in s 79(4).

1. In Britt v Britt the Full Court held that the court can infer from appropriate evidence that a nexus existed between the conduct and the relevant contributions.  Thus, where direct evidence may not be available from which the relevant nexus may be drawn, based on other evidence an inference about the nexus may be drawn.  And based on the decision in Amador & Amador,[42] it is not necessary for the evidence of the person asserting the existence of family violence to be corroborated before being accepted.

   [42] (2009) 43 Fam LR 268

2. In this case both applicant and respondent asserted the existence of family violence. Each said the family violence exhibited by the other occurred within the marriage.  The respondent asserted the details of a particular incident.  He said it occurred at the office of his business when he was working, after hours.  He said the applicant entered the office and refused to leave when he asked her to leave.  He said a verbal altercation then erupted culminating in the applicant scratching his face and causing his left earlobe to bleed.  He relied on a photograph of the incident.

3. The applicant gave evidence that she was subjected to not only physical threats but to more constant non-physical family violence throughout the marriage.  She gave evidence in answer to questions put by the respondent as follows –

   MR KESKIN: So you’re saying that I dragged you into the office, not that you barged through the doors?

   MS KESKIN: Absolutely, a hundred per cent.

   …

   MS KESKIN: You were obstructing me, and I was just trying to get out.

   …

   MR KESKIN: But it wasn’t because of – on the night there was any violence, was there?

   MS KESKIN: I – no, there was no violence on the night.

   MR KESKIN: Okay.  You then?

   MS KESKIN: But within the 20-year marriage, yes.  You held a knife to my throat almost.  You ‑ ‑ ‑

   MR KESKIN: I did what, sorry?

   MS KESKIN: You held a knife, or you pulled out a knife, sorry, to me

   MR KESKIN: Your Honour…

   MS KESKIN: Saying that you were going to kill me several times.

   MR KESKIN: That is totally ridiculous.  Totally ridiculous, your Honour.

   …

   MR KESKIN: Throughout the course of these proceedings, how many times have you been to the police and reported that I had broken those intervention orders?

   MS KESKIN: I don’t remember exactly how many times.  There were a few times because you were stalking me on Linked In and Facebook.

4. Nowhere among the affidavits or the viva voce evidence was there any evidence that connected the fact of family violence to matters relevant to contribution.  In other words, neither the applicant nor the respondent gave evidence that the family violence to which she or he was subjected had an impact on the contributions he or she made.  Further, no endeavour was made to quantify either in percentage terms or in specific monetary amounts the impact family violence caused the applicant or the respondent.

5. The absence of that evidence created a considerable obstacle for both parties.  Even if I had been persuaded to the requisite degree of the incident or incidents of family violence, as well as the effect of any such family violence, no evidence was led by either party to enable me to quantify the effect of that violence upon either party’s capacity to contribute.  According to the statement of principle in S & S, a necessary element in the proof of family violence was absent.

6. I have applied those principles in this case.

Ascertaining the assets

1. To their immense credit, it seems that by dint of sheer hard work over a substantial period the respondent and the applicant established a substantial collection of businesses through which they conducted their transportation operations.  The evidence about those businesses was scattered among various affidavits and exhibits to those affidavits so the task of recording in strict chronological sequence how the parties acquired or established their assets was not an altogether easy experience.

2. The applicant stated in her 31 July 2018 affidavit that she and the respondent purchased their first vehicle soon after their marriage and that thereafter they expanded to a fleet of six.  She did not give a date of purchase nor other details of those vehicles.  The respondent gave viva voce evidence of commencing his working life by being involved in the transport industry.  He too gave no details of the date of purchase of a vehicle, the price paid, in whose name that vehicle or subsequently acquired vehicles were registered or of income generated by the operation of one or more vehicles.  In those circumstances, it is more probably than not that together, soon after their marriage in 1992 the applicant and the respondent commenced to operate a transport business.  Who paid what amount for the first or later vehicles was not the subject of evidence.  However, I accept that on and from the early 1990s the applicant and the respondent commenced operating in the transport industry.  The applicant stated that between 1995 and 2014 she and the respondent expanded their transport business under their “co-directorship”, a word the applicant used.  By that the applicant may have been seeking to convey the notion that she and the respondent were actively involved in a joint way and therefore the direction and management of the transport operations was an equal exercise.  But if by that phrase the applicant intended to convey the notion that they were directors of a company that owned and operated vehicles, her evidence was imprecise.  That said, I accept the applicant’s evidence that in the operation of their transport business the respondent initially undertook activities driving whereas the applicant undertook other business activities and administrative work.

3. The applicant stated that she also performed work at a transport business.  She gave no details about the ownership of that transport business, pursuant to what arrangement she worked at that business, the nature of her work, the hours she worked or how she was remunerated for the work she performed.

4. The applicant said that several businesses or companies were relevant to this property division.  Some assumed greater importance than others.  The business or companies narrated by the applicant as being relevant were the following –

   a)the business known as EEE Pty Ltd;

   b)the business known as S Pty Ltd;

   c)the business AA Pty Ltd;

   d)the business BB Pty Ltd, later renamed B Pty Ltd;

   e)the business known as U Pty Ltd;

   f)another business entity known as W Pty Ltd (referred to in various places as W2 Pty Ltd), said to have been created upon the dissolution of U Pty Ltd;

   g)Z Pty Ltd; and

   h)C Pty Ltd;

5. Some, but not all, of the entities described above were the subject of detailed evidence.  For example, the documentation adduced in evidence in this case said next to nothing about EEE Pty Ltd, S Pty Ltd, U Pty Ltd or W Pty Ltd.

6. The respondent adduced evidence of a company the name of which was D Pty Ltd.

7. No evidence was offered about the reasoning behind the proliferation in the number of companies recorded above.  Presumably, some logic existed based on taxation issues.  Yet none was given.  The respondent told me in the course of his evidence that he left matters of corporate governance, compliance and secretariate issues to professionals, mainly accountants and solicitors, as he had limited education on those matters.  I accept that as being true.  Yet the documentary proofs in this case, especially those relating to company or compliance issues, were poor.  That was relevant because the commencement and cessation dates of the applicant and the respondent as directors of various companies was in issue.  Records from the Australian Securities and Investments Commission (“ASIC”) provided by the parties were very limited and incomplete.

8. ASIC records were put into evidence in relation to B Pty Ltd.  The ASIC records in relation to it were dated 26 November 2018 so the information recorded in that historical company extract was reasonably current.  It revealed the following –

   a)it was incorporated on … 2007 under the name DD Pty Ltd and its name was changed to its current name on … 2008;

   b)the applicant was a director of the company between … 2009 and … 2011 and between … 2011 and … 2014;

   c)the respondent was a director of that company between … 2007; and … 2009 and between … 2011 and … 2014;

   d)the respondent was shown as being the sole current director of that company;

   e)both applicant and respondent previously served as company secretary; and

   f)the two shares in the capital of the company are currently held by the respondent, although the applicant previously held two shares in that company.

9. In his affidavit sworn 14 April 2019 the respondent referred to a company he called B2 Pty Ltd.  He did not mention a company number.  I was unable to be certain that the company B Pty Ltd was the same entity as the company the respondent called B2 Pty Ltd. The valuation evidence given by Mr HH in his affidavit made 28 March 2019 referred to B Pty Ltd rather than B2 Pty Ltd as did the expert Mr KK in his affidavit made 11 July 2018.  It seemed therefore that the respondent was mistaken in his reference to B2 Pty Ltd.

10. Limited ASIC records were put into evidence in relation to the majority of the companies mentioned by the applicant.  Those included T Pty Ltd, U Pty Ltd, V Pty Ltd, W Pty Ltd, X Pty Ltd and Y Pty Ltd.  It was therefore not possible to make reliable factual findings about shareholdings in or directorships of any of those entities.

11. D Pty Ltd featured heavily in the evidence in this case.  It was the registered proprietor of two parcels of land in Suburb G, namely –

    a)1 & 2 F Street; and

    b)3 F Street.

12. The evidence of the shareholdings in and directors of D Pty Ltd was imprecise.  It seems that at some stage, the exact commencement and end dates of which I was unable to reliably ascertain, the respondent’s father was a director of D Pty Ltd.  He was the recipient of an offer of financial accommodation from National Australia Bank Ltd in mid 2006.  That bank required him to personally provide security for any financial advance from NAB to D Pty Ltd so I am willing to infer that in mid … 2006, the respondent’s father was involved in the governance of D Pty Ltd (most likely as a director) although that is little more than an inference.  I was unable to make any reliable findings about the shareholding in D Pty Ltd, especially as to the date of any change or the manner in which any such change altered the shareholding of the company.  It is necessary to record certain details about the shareholding of D Pty Ltd in the passages below.

13. C Pty Ltd assumed a degree of importance in this litigation.  However, details of its corporate structure were not put into evidence.  C Pty Ltd was used in the flow of money referrable to B Pty Ltd, the details of which were recorded by Mr HH in section six of his 20 March 2019 report.  Further details of C Pty Ltd are set out below.

A short recital of the businesses

1. As briefly narrated above, soon after he married the applicant, the respondent commenced driving vehicles. He led very little evidence of the details of his activities. He did not descend into the detail of his acquisition of his first vehicle, subsequent purchases and of the purchase of a transport licence.  The dates and amounts involved in those acquisitions were not given.  While I accept the applicant’s statement that soon after they married the number of vehicles they owned increased to six, that statement told me very little about the expenditure they met so as to expand the fleet to six and how that expenditure was funded.  The details of the purchase of the transport licence were overlooked entirely.

2. As a matter of common knowledge, in the late 1990s transport licences were particularly expensive.

3. While the respondent drove vehicles, the applicant attended to administrative aspects of the business.  The respondent did not challenge the applicant’s evidence in that regard.

4. The evidence in this case did not reveal disagreement about the assets until a point in time near the couple’s separation.

5. So far as initial contributions were concerned, they were largely equal.  No evidence was adduced to indicate that either the applicant or the respondent brought to the marriage assets in greater measure than the other.

6. Very little evidence was led about the former matrimonial home.  Either the parties had agreed about the application of the proceeds of its sale or they chose not to agitate about it.

7. The main arena of debate in this case centred around the events immediately prior to and after separation in September 2014.  In the context of the businesses, that brought into sharp focus the business activities of D Pty Ltd.

8. The value of the shareholding of D Pty Ltd was a significant issue in this case.  That company may once have been a valuable asset depending on the version of the evidence that was adduced.  Several persons gave evidence about the value of the shares in D Pty Ltd.  They were –

   a)the respondent’s father;

   b)the respondent;

   c)the applicant;

   d)Mr HH; and

   e)Mr KK.

9. So far as the respondent’s father was concerned, several matters were relevant in the conduct of this case.  To catalogue them, the following were important –

   a)the respondent’s father was joined as the second respondent on the basis that he asserted an interest as a shareholder in D Pty Ltd and that he therefore was potentially adversely affected by any decision in this litigation;

   b)the second respondent filed affidavit material in this proceeding yet on account of his ill health he did not participate in the trial of this proceeding;

   c)both applicant and respondent submitted I should receive the second respondent’s affidavit material without his being cross-examined; and

   d)no medical evidence was adduced to support the contention that he was unable to attend the trial by reason of ill health.

10. In précis form, the respondent gave evidence to the effect that he and the second respondent held the shares in D Pty Ltd initially in equal proportions.  The respondent said that he became financially indebted to his father and that the two suffered from a falling out.  Upon their reconciliation they agreed to amend their shareholding in D Pty Ltd which, according to the respondent, went from 50% to 70% in the second respondent’s favour.  The applicant disputed the respondent’s construction of events concerning D Pty Ltd.

11. It became necessary for me to examine in considerable detail the version of the evidence about D Pty Ltd and its trading history as given by the applicant, the respondent, the second respondent, and the two experts.

12. D Pty Ltd was incorporated on … 2006 according to its ASIC historical search.  Without objection a unit trust deed called the D Pty Ltd was put in evidence.  It had the hallmarks of an off-the-shelf unit trust deed.  The deed was dated … 2006 and initial unitholders were Mr LL and Mr MM yet elsewhere in the deed the respondent and his father were said to hold 50% of the units.  The relevance of Mr LL and Mr MM went unexplained.  In any event, the year earlier (that is to say in … 2005) the respondent consented to act as a director of D Pty Ltd, he consented to act as its secretary and its public officer.  The second respondent applied for the issue of one share in the capital of D Pty Ltd on … 2005.  No corresponding application for the allotment of a share in D Pty Ltd was produced in reference to the respondent.  D Pty Ltd applied to NAB for a loan in the sum of $750 000 in … 2008.  For better securing that loan facility NAB required the following –

    a)a registered mortgage debenture over the whole of the assets of D Pty Ltd;

    b)a registered mortgage over the land known as 1 & 2 F Street, Suburb G being the whole of the land described in certificate of the title volume … folio …;

    c)a guarantee in favour of NAB from both respondents;

    d)a registered mortgage over the land at NN Street, Suburb OO being the whole of the land described in certificate of title volume … folio …;

    e)a registered mortgage over the land at PP Street, Suburb QQ being the whole of the land described in certificate of title volume … folio …;

    f)a registered mortgage over the land at units 1,2,3 & 4 RR Street, Suburb SS being the whole of the land described in certificate of title volume … folio …;

    g)a registered mortgage over the land at apartment TT Street, Suburb OO, being the whole of the land described in certificate of title volume … folio …;

    h)a registered mortgage over the land at apartment GG Street, Suburb HH, being the whole of the land described in certificate of title volume … folio …;

    i)a registered mortgage over the land at EE Street, Suburb FF being the described in certificate of title volume … folio …; and

    j)a general mortgage over what was generically described as “transport licence in Melbourne”.

13. The NAB finance facility stipulated that the property at PP Street, Suburb QQ had to be sold within nine months of the date of the facility’s creation and the proceeds applied in reduction of debt.

14. From other documentation I learned that the address EE Street, Suburb FF was the second respondent’s residence.

15. D Pty Ltd settled its acquisition of 3, F Street, Suburb G on … 2008. It borrowed $270 000 from NAB to do so. For better securing that loan, NAB took the following –

    a)a fixed and floating charge over the whole of D Pty Ltd’s assets including its goodwill and uncalled capital plus called but unpaid capital;

    b)a registered mortgage over 1 & 2 F Street, Suburb G, being the land described in certificate of the title volume … folio … and volume … folio …;

    c)guarantees and indemnities given by the two respondents;

    d)a registered mortgage over the land at EE Street, Suburb FF;

    e)a registered mortgage over the land at units 1,2,3 & 4 RR Street, Suburb SS;

    f)a registered mortgage over the land at PP Street, Suburb QQ; and

    g)a “general mortgage over transport licence” (those were the words of the NAB documentation).

16. Both respondents executed the application for that loan.  They did so in their capacity as directors of D Pty Ltd.

17. In … 2008 D Pty Ltd applied for further financial accommodation from NAB, on that occasion for $255 000.

18. As mentioned earlier, the second respondent did not attend to give viva voce evidence as the applicant and the respondent agreed that his affidavit material could be received without objection.  The more important matters to which the second respondent deposed were as follows –

    a)he and the respondent formed a unit trust in … 2006 in which each held a unit;

    b)he held two shares in D Pty Ltd and the respondent held one;

    c)in … 2006 the second respondent executed a contract for his purchase of 1 & 2 F Street, Suburb G;

    d)on … 2006 1 & 2 F Street, Suburb G was registered in the name of D Pty Ltd;

    e)the second respondent constructed offices at a cost of $90 000 in the building at 1 & 2 F Street, Suburb G;

    f)the second respondent and the respondent agreed that the respondent would reimburse the second applicant for half of the expenses including the deposit of $73 000, legal fees and renovations, such reimbursements to be paid by … 2008;

    g)the respondent did not pay the second respondent and as at October 2018, the respondent had not paid the second respondent those sums;

    h)the second respondent purchased 3 F Street, Suburb G for $300 000 and paid a deposit of $30 000;

    i)after initially applying for a loan of between $150 000 and $200 000, the respondent increased the amount of the loan application to $270 000 as the respondent’s business was otherwise at risk of being placed in receivership;

    j)on … 2008, the purchase of 3 F Street, Suburb G settled with D Pty Ltd becoming registered as the proprietor of that land;

    k)the sum of $115 000 of the sum of $270 000 that D Pty Ltd borrowed from NAB was paid to BB Pty Ltd, a company owned or controlled by the respondent and D Pty Ltd did not benefit from that transfer of funds;

    l)in … 2008, at the insistence of the second respondent’s dying wife who was the mother of the respondent, the second respondent executed documents that the respondent put before the second respondent which the second respondent duly executed, believing the documents related to extending the loan term whereas in fact the documents were for a further loan, this one for $255 000;

    m)the respondent’s mother passed away on … 2008;

    n)by mid 2009 the second respondent had sold an array of assets yet he “did not inject any of his funds into D Pty Ltd” (his words); and

    o)the respondent had not repaid $43 520 of borrowed funds, $270 000 borrowed from NAB, $255 000 borrowed from NAB and half the renovation costs at 1 & 2 F Street, Suburb G.

1. The second respondent stated in his affidavit that the respondent removed him as a director of D Pty Ltd without the second respondent’s consent, that the respondent “revoked” (his word) the second respondent’s two shares and that the respondent increased his own shareholding.  The second respondent stated that on 1 April 2015 the respondent lodged a form with ASIC purporting to record that the second respondent held seven shares although the second respondent’s status as a director was not recorded.  On 1 October 2018 the second respondent lodged the relevant ASIC form reinstating him as a director of D Pty Ltd.  The second respondent stated in his affidavit that he did not have control over D Pty Ltd.  He said that between 2006 and 2009 he and the second respondent had paid $4 200 monthly towards loan repayments but that the respondent had paid rent since 2009 of $8 200, a sum lower than market.  The second respondent said the respondent owed $43 520 plus $270 000 plus $255 000 and half the renovation costs at 1 & 2 F Street, Suburb G.

2. One of the issues in this case was the value of D Pty Ltd.  Various people contributed to the evidence on that issue, some more usefully than others.  The applicant questioned the respondent on aspects of D Pty Ltd’s operations.  The respondent’s answers were defensive for the most part.  Similarly, the respondent questioned the applicant about D Pty Ltd.  I was unable to glean useful answers.  The respondent advanced a thesis that the applicant’s McKenzie friend had inappropriately immersed himself in the detail of this dispute thereby assuming the role of advocate for the applicant.  At one stage the respondent told me he wanted to cross examine the McKenzie friend.  As Mr A had not filed an affidavit in this proceeding I refused that approach.

3. So far as the evidence about D Pty Ltd was concerned, the respondent told me that he wanted to rely on the second respondent’s affidavit evidence and that the respondent would not be challenging the second respondent’s evidence.  In view of the matters set out above in relation to the affidavit evidence given by the second respondent, on several issues the evidence about D Pty Ltd as given by the second respondent differed to the evidence about D Pty Ltd as given by the respondent.  The respondent told me he relied on the second respondent’s evidence in toto.  That indicated to me that the respondent accepted that whenever his evidence on a particular point conflicted with the evidence of the second respondent, the divergence of the respondent’s version of the evidence on point was unproved.  That curious position was the respondent’s stance.  Equally, to the extent that the second respondent’s version of the evidence was corroborated by the applicant’s version of the evidence on the same issue, and was inconsistent with the respondent’s version of the evidence on the same point then unless that evidence as given by the second respondent was inherently improbable or was contrary to the logic of the event happening in the manner asserted, I have accepted it in preference to the respondent’s version of that evidence.  That approach reflects the orthodoxy stated in In the Marriage of Scott.[43]  There the court held that whether or not it is an error of fact for a judge to reject unchallenged evidence depends very much on the circumstances of the particular case and the presence or absence of any stated reason for the rejection.  The court held that unchallenged evidence need not be accepted if it is inherently incredible or improbable, citing Precision Plastics Pty Ltd v Demi,[44] Ellis v Wallsend District Hospital,[45] Levinge v Director of Custodial Services,[46] Allied Pastoral Holdings Pty Ltd v Commissioner of Taxation,[47] Browne v Dunn,[48] all of which were followed.

   [43] (1994) 17 Fam LR 420

   [44] (1975) 132 CLR 362

   [45] (1989) 17 NSWLR 553

   [46] (1987) 9 NSWLR 546

   [47] (1983) 1 NSWLR 1

   [48] (1894) 6 R 67

4. In the course of the applicant questioning the respondent, she challenged the respondent about certain entries in bank statements that he exhibited to his affidavits.  The answers given were difficult to follow in most instances.  In any event, in this case an extremely detailed examination was given by two expert forensic accountants to the transactions over which the applicant and the respondent agitated.  Having regard to the skills possessed by those experts in searching for then analysing the trail of funds, especially the source of funds and the application of those funds, where uncertainty existed in either the applicant’s or the respondent’s evidence on a particular financial matter or transaction, I have deferred to the experts’ evidence on point.  Not always did the experts agree on certain transactions.  Where relevant, in the passages below I have addressed the transaction concerned, the competing versions of the experts about that transaction and explained whose version I prefer on point.

5. Before descending to the detail, it is relevant to point out that the applicant was forced to pursue the respondent, at times with considerable vigour, for the production of documentation on which he relied. For that matter, on the first occasion on which I was involved in this case, a dispute emerged about the sufficiency of the respondent’s disclosure concerning a fleet of rolling stock. On that occasion the debate revolved around the need to produce documentation that revealed whether certain vehicles were under finance, whether others were leased, whether others still were owned and if so by which incorporated entity operated by the respondent. I detected a degree of hesitation and, in some respects, prevarication in the diligence with which the respondent was full and frank when discharging his disclosure obligations. Chapter 13 of the Family Law Rules sets out a party’s obligation in relation to disclosure.  Very recently I handed down a judgment on the subject in Brewer & Brewer (No 2).[49] In property cases in this court, as this case is one, faithful compliance with the obligations in ch 13 of the Family Law Rules is critical.  In my view, the respondent fell short of his obligations, a matter that the expert witness Mr HH discussed in his report where he stated that the respondent was not averse to “bending the truth when it suits him”.

   [49] [2019] FamCA 247

6. Of course, that was a gratuitous attack on the veracity of the respondent.  I did not find the comment useful or probative.  It went beyond the expertise of Mr HH.  I have not relied on it.

7. Mr HH made a collection of comments about the information that was not provided to him.  He said no information was supplied to him concerning –

   a)D Pty Ltd;

   b)T Pty Ltd;

   c)U Pty Ltd;

   d)V Pty Ltd;

   e)W Pty Ltd;

   f)X Pty Ltd; or

   g)Y Pty Ltd.

8. Mr HH stated that the respondent did not produce general ledgers and instead supplied bank statements that he described as an inferior form of accounting record for B Pty Ltd and C Pty Ltd.  He said bank statements are not sufficient to describe or categorise transactions.  He said it was most unusual for a business of the size under consideration to rely solely on bank statements.  Mr HH also stated –

   a)the external accountant for the respondent knew very little about the balances produced in financial statements and that the accountant operated under instructions from the respondent;

   b)certain financial information relating to the 2015 years for B Pty Ltd and C Pty Ltd was incomplete or otherwise contradictory;

   c)for no apparent reason the general ledgers for the 2015 and 2016 financial years for B Pty Ltd and C Pty Ltd involved significant movements in balances that were not made available;

   d)the businesses of B Pty Ltd and C Pty Ltd had no value as at 30 June 2018;

   e)Mr HH was unable to say whether the deterioration in business was due to increased competition or poor management, one illustration of which involved the applicant and the respondent in 2015 withdrawing approximately $300 000 in director’s fees;

   f)the integrity of the financial information about expenditures of C Pty Ltd was in doubt as those expenditures did not correlate to the operation of vehicles and instead related to business expenses; and

   g)anomalies in the figures for trade debtors indicated that sales had been artificially increased in 2017 because in that year turnover was $2 000 000 whereas in an application to Motor Vehicle VV Finance for financial accommodation turnover of $4 600 000 was shown.

9. It is necessary to say something about that last point, interrupting my examination of the report from Mr HH.

10. The respondent questioned the applicant about an application for finance made to Motor Vehicle VV Finance.  The respondent put to the applicant, in effect, that she and he knew that certain information on the application for finance was false when the respondent submitted the application to the financier.  Specifically, the respondent put to the applicant that each had obtained finance from that lender at a time when their business was in serious financial straits and that each knew of the desperate financial circumstances of their business operations when making the loan application.  I cautioned the respondent stating that his line of questioning invited responses that may have had the unintended consequence of eliciting information that could thereby expose one or both to criminal consequences.  I invited the respondent to consider his position.  The exchange was as follows –

    MR KESKIN: But if you wanted to, you could have gone through the bank statements and quite easily seen the amounts of deposits that were made into the bank, and established within no more than an hour or two that $4 300 000 was fabricated to me. I admitted to it from day one. Surely you would have understood that I fabricated that document to obtain finance to buy vehicles, so I could simply stay in business and protect the asset. Would that have been very difficult for you to do?

    HIS HONOUR: Just a moment. This is an important moment to raise the issue. You’ve just said in your question, Mr Keskin, that you have fabricated a financial document in order to obtain finance.

    MR KESKIN: Yes, you Honour. I admitted it from day one.

    HIS HONOUR: That could give rise to criminal sanctions.

    MR KESKIN: I – I understand, your Honour.

    HIS HONOUR: You need to be aware that it is important for you to have a full appreciation of your rights to not say information that could lead to a criminal prosecution in this case, because you must be aware that if, depending on the finding of fact that I make, one consequence may very well be that I refer the papers to prosecuting authorities, whether it’s the Tax Office or the Director of Public Prosecutions, or the Australian Federal Police, or various fraud authorities, including ASIC. Now it’s essential that you understand that you have a full appreciation of your overall position, because if you go terribly far down the path that you’re presently going down, you are inviting a particular consequence, and if you implicate Ms Keskin by your questions, she might suffer the same fate.

    You may want to get some advice from a criminal barrister on this point, and if you did, I would hear you as to what bearing that has on the conduct of this trial. But it is essential that you know that you are getting perilously close to implicating yourself in a way that you may not intend. Now, I will adjourn early to enable you to think about that,. We will resume at 2.15, and we will pursue it further. Do you understand?

    MR KESKIN: Your Honour, thank you. I asked for a just and fair trial, which I believe I’m getting, thanks to your Honour, and if that means providing information that I have done wrong, I’m happy to do that, your Honour.

    HIS HONOUR: Okay. Well, let’s not - - -

    MR KESKIN: I’m not saying that everything I did throughout this case was perfect, your Honour.

    HIS HONOUR: Let’s not rush into your position. I do want to ensure that both you and Ms Keskin have a chance to reflect on what I’ve just said. I will ask Mr WW to ensure that the parties exit the court in a civilised manner, but we will resume at 2.15.

    MR KESKIN: Thank you, your Honour.

    HIS HONOUR: Please take on board what I’ve just said.

    Likewise you, Ms Keskin. As before, you are under cross-examination, you’re not permitted to discuss your evidence, so we will adjourn a few minutes before 1, but we will return at 2.15, and I would like to hear from you about your position on the matter I’ve just raised. Thank you. 2.15.

11. When the applicant questioned the respondent about the Motor Vehicle VV loan application and about the accuracy of the representation in it that the loan applicant’s turnover was in the vicinity of $4 600 000, the respondent volunteered evidence about the falsity of that representation.  He said the following –

    MR KESKIN: So once again?

    MS KESKIN: Yes.

    MR KESKIN: You subpoenaed Motor Vehicle VV Finance and from the subpoena, you got a document that came from me provided to Motor Vehicle VV Finance?

    MS KESKIN: Yes.

    MR KESKIN: Showing $4,632,000 in sales for tax return.  Is that right?

    MS KESKIN: Yes.

    MR KESKIN: You maintained that document was true in all your affidavits and also provided a copy of the document to Mr HH?

    MS KESKIN: I didn't maintain that it’s true, but that was the only document, and because you weren't providing any information to Mr HH, that was all I can provide to Mr HH.

    MR KESKIN: But you mention it in just about every affidavit here.  I won't go into detail, but you mention the amount of 4,632,489, a fabricated tax return sent by me to Motor Vehicle VV Finance?

    MS KESKIN: Yes.  And?

    MR KESKIN: Well, the answer is either yes or no.  It’s yes or is it no?

    MS KESKIN: Yes. 

12. He did not hesitate, protest or express his reticence when undertaking that line of questioning. I had earlier told him about the risks he faced in pursuing that line of enquiry when questioning the applicant. An issue arose about the consequences of that evidence. It must not be overlooked that s 128 of the Evidence Act did not apply. No objection was taken to answering questions about that subject. It could not be said that a claim to self-incrimination was taken when that evidence was given nor could it be said that the applicant objected to the giving of the evidence in the first place, as to properly enliven s 128 of the Evidence Act.

13. On one construction of the evidence in relation to the Motor Vehicle VV finance application the applicant and the respondent or one of other of them sought to obtain a financial advantage by deception.  Another construction was that one or other of them had engaged in conduct that may have been fraudulent.  The respondent endeavoured to place that finance application in a temporal context in which the applicant’s and the respondent’s lifestyle was elaborate, their personal expenses were vast and their borrowings were very considerable yet the transport operations conducted by the respondent in which the applicant was the bookkeeper was encountering difficulty meeting all outgoings.  The respondent said the following in his evidence given in answer to the applicant’s questions –

    No money went into the business at all. The business is the one that – that supported private school fees of $100 000 a year, a home mortgage of $9 000 a month. It was a 60 square home, extremely luxurious home, in the heart of K Street, Suburb L, we couldn’t afford. So the business already paid $20 000 a month for our comfort and our children’s education.

14. That gave a seemingly innocent complexion to the events to hand, namely, the applicant and respondent enjoying a lavish lifestyle yet living beyond their means.

15. Yet on deeper investigation, the explanation given by each party was far from innocent.  The applicant was taken to paragraph 16 of her affidavit made 6 November 2014 (an affidavit on which she did not rely as part of her case).  The respondent pointed to her statement in that paragraph that she drew “a nominal wage of $500 a fortnight” from the B Pty Ltd account.  In answer to my request for clarification about the factual and legal basis on which she took the $500 per fortnight she said that sum was not a wage and she did not pay tax on the sum drawn each fortnight.  She said she drew that amount because she and the respondent were suffering cash flow issues and at several intervals their cash flow was “bad” (her word).[50]

    [50] Transcript P 90, L 30

16. The applicant’s comment that she had not paid tax necessitated me bringing to the applicant’s attention the consequences of that state of affairs.  The applicant told me the drawing of $500 per fortnight was not income.  When asked whether she characterised those drawings, if not wages, as fees or as a gift she did not squarely answer, stating instead that the applicant and the respondent were working together in the business so they were both drawing from the account.  She later characterised the sum drawn as a gift, that the company made the gift and it was paid “for our living expenses” (her words).  She said that the regime of drawing that sum continued for six months prior to separation.  The applicant also said that for 10 years she did not declare tax.[51]

    [51] Transcript P 92, L 16

17. This court has obligations to protect the revenue as canvassed below.  

18. Returning to the report of Mr HH he stated in paragraph 3.12 that no information had been supplied relating to the business entities operated by the respondent.  To my mind, that had very far reaching consequences in relation to valuations. 

B Pty Ltd

1. It seemed that based on information supplied by the respondent or based on documentation Mr HH examined, Mr HH made various observations about the operations of B Pty Ltd.  He said it was incorporated on … 2007 and that the directorship of and shareholding in B Pty Ltd had changed over time.  Mr HH said B Pty Ltd operated transportation between the city of Melbourne and Suburb G pursuant mostly to contractual arrangements between B Pty Ltd and various clients for the provision of transportation for staff.  He said B Pty Ltd operated a small fleet of 13 to 63 seater buses.  The clients involved were, Client XX, Client YY, Client AAA, Client CCC, and Client ZZ. Mr HH proceeded on the basis that the contract with Client BBB came to an end in … 2014.

2. Mr HH stated that a restructure took place in 2015 pursuant to which the transport operations carried out by B Pty Ltd were thereafter carried out by C Pty Ltd.  He said that following the restructure, C Pty Ltd held all assets and B Pty Ltd paid drivers and met overhead expenses.

3. Mr HH mentioned that D Pty Ltd owned two properties at Suburb G from which B Pty Ltd operated.

4. He said T Pty Ltd owned real estate in the Suburb OO.

5. He said U Pty Ltd was superseded by the incorporation of W Pty Ltd in 2016.

6. Mr HH expressed his concerns that the number of bank transactions in B Pty Ltd and in C Pty Ltd suggested the existence of unreported sales and substantial excess funds.  I took Mr HH to be conveying by that statement that substantial amounts of cash were being transacted through sales that were not entered in the books and records of those companies.  Mr HH cited a debit loan of $1 774 000 described in the C Pty Ltd documents which did not represent a loan balance in the B Pty Ltd records because no corresponding credit entry was evident.  Mr HH stated that funds were regularly leaving C Pty Ltd without being recorded as sales.

7. Mr HH invited a conclusion about the most likely or probable explanation of that set of circumstances, some of which were borne out by the evidence given by the applicant and the respondent.  It was as follows –

   a)prior to separation of the applicant and the respondent, although the precise date of which cannot be said, the applicant’s and respondent’s lifestyle was costly and it was being funded by company funds;

   b)the borrowings of the applicant and the respondent were substantial;

   c)although the Client BBB contract had fallen away, contracts with other major airlines described above provided considerable income;

   d)the party that contracted with the clients to provide the transportation services was originally B Pty Ltd but a restructure took place in 2015 the effect of which installed C Pty Ltd as the contracting party and the party entitled to receive payments from clients;

   e)C Pty Ltd in fact received substantial cash payments some of which it banked;

   f)at the same time the applicant and the respondent were taking significant sums from the business to meet personal expenses;

   g)for many years the applicant and the respondent had not paid income tax;

   h)an application for finance was made to Motor Vehicle VV Finance that erroneously stated income of $4 600 000; and

   i)funds from various businesses conducted by the respondent had been mixed leading to confusion about how B Pty Ltd and C Pty Ltd were in truth operating.

1. When the trial of this proceeding commenced, I asked what price had been obtained from the sale of the Country O property.  The applicant told me that she had been unable to advance the sale for religious reasons.  Further into the trial, the respondent announced that he had the names of prospective purchasers of the Country O property.  I requested the parties to engage in a more heightened sense of cooperation in order to sell what may turn out to be one of the few actual assets left for division.  To date I have not been told that the Country O property has been sold.  In those circumstances, the parties left me with no alternative but to identify a percentage by which the sale proceeds are to be split once the property is eventually sold.  That said, it is possible to state that no reliable evidence was adduced in this case about –

   a)the purchase price paid for the Country O property;

   b)who paid it;

   c)in whose name the mortgage was;

   d)the total amounts paid to the mortgagee;

   e)who paid the mortgagee and how much;

   f)what sum was paid to the mortgagee to discharge its mortgage and the source of those funds;

   g)how much rent was paid while the Country O property was rented;

   h)how much was actually paid by the respondent by way of costs associated with plumbing, landscaping and making the property secure; and

   i)whether the applicant provided any non-financial contributions.

2. In short, the evidence about the Country O property was seriously deficient.

3. On 30 September 2015 consent orders were made for the division of the sale proceeds of the Country O property to be applied as to 65% of the applicant and 35% to the respondent.

Alleged forgery of transfer of former matrimonial home

1. The respondent alleged that the applicant forged the respondent’s signature so as to transfer title of the former matrimonial home from joint names solely to her name.  No evidence from a handwriting expert was led.  The applicant denied the allegation.  I find that the assertion was no proved.  The allegation was disgraceful.  It should never have been made.  The affidavit in which the allegation appeared was prepared by a firm of solicitors.  Legal practitioners owe a duty to the court to ensure that an allegation of forgery, having criminal as well as civil consequences, is only made when facts underpinning the allegation can be proved on the balance of probabilities.  To do otherwise is to abuse the process of the court, as was held in Williams v Spautz,[57] Goldsmith v Sperrings Ltd (Lord Denning MR),[58] Flower of Hart (a firm) v White Industries (Qld) Pty Ltd[59] and Treasury Wine Estates Ltd v Melbourne City Investments Pty Ltd.[60]  No legitimate basis existed for the respondent’s allegation of forgery.  No legitimate basis existed for such an allegation to be included in an affidavit filed in this court.  Solicitors must test their client’s veracity before making such a far reaching and potentially damaging allegation, especially where there may be no proper foundation for making the allegation.  That applies irrespective of the state of hostilities between the parties to the litigation.

   [57] (1992) 174 CLR 509

   [58] [1977] 1 WLR 478

   [59] (1999) 87 FCR 134

   [60] (2014) 45 VR 585

The former matrimonial home

1. At one stage the applicant and the respondent lived in handsome circumstances in K Street, Suburb L.  The former matrimonial home was sold although information was not given in this case about –

   a)the date and price paid for the acquisition of the former matrimonial home;

   b)who paid what to purchase the former matrimonial home; and

   c)during the marriage who made what financial and non-financial contributions in relation to the former matrimonial home.

2. In her 15 June 2018 affidavit the applicant said the former matrimonial home was sold in … 2015 and that the sale settled in … 2016.  The sale price was $1 580 000.  The sale proceeds were distributed in accordance with court orders made on … 2015.  Mortgages to Bank FFF and Country O Bank were discharged in full.  From the balance, the applicant received $255 000 of which she applied $156 650 to pay legal fees.  Pursuant to those orders, the respondent received a partial property settlement of $150 000.

Suburb OO property

1. The evidence revealed that prior to their separation the parties owned an apartment in Suburb OO.  It was sold in 2015.  Neither party made any claim in relation to the proceeds because the sale proceeds were applied towards overdue debts to mortgagees.

Vehicle valuations

1. After I became seized of this proceeding in April 2019, the applicant told me about an unresolved issue concerning the valuation of rolling stock that formed part of the respondent’s corporate operations.  At that time, questions arose about the identity of the registered proprietor of those vehicles, whether one or more of the vehicles was subject to lease, hire purchase or other chattel finance arrangement and what the actual current value was of each vehicle.  I made directions requiring the respondent (who at all relevant times has had physical control of the vehicles) to identify each vehicle stating the owner of it and the finance arrangements in respect of it plus the net value of each vehicle.  By valuation made on 22 April 2019 CC Pty Ltd trading as The CC Pty Ltd provided a report addressed to the respondent and to the applicant through her McKenzie friend that contained a valuation of eight buses, one motorbike, two motor cars, one mobile car wash and one trailer.  The total value of those items as stated by The CC Pty Ltd was $778 000.

2. As a matter of law, an expert’s report or even a valuer’s report, will be of utility to a court so long as certain foundations are laid to demonstrate that the evidence being given (here, valuation evidence) is within the expertise of the person purporting to give it and the steps in the reasoning process that is supportive of the ultimate conclusion are maintainable.  The Court of Appeal of the Supreme Court of New South Wales so held in Makita (Australia) Pty Ltd v Sprowles.[61]  Later, the High Court of Australia adopted a formulation consistent with that approach in Dasreef Pty Ltd v Hawchar.[62]  Not only must the expert who purports to be an expert actually record his or her skills, qualifications or special training by which the court may receive his or her evidence as emanating from an expert, but the evidence itself must reveal a logical connection between the task undertaken and the ultimate expression of opinion.

   [61] (2001) 52 NSWLR 705

   [62] (2011) 243 CLR 588

3. Here, the 22 April 2019 report was written by two persons.  While their qualifications were not set out, neither the applicant nor the respondent took issue with the qualifications of the report writers to express their views as to the arithmetical figure for the various items they valued.

4. So far as the methodology used by The CC Pty Ltd was concerned, the report listed various assumptions adopted in the formulation of the valuations and the purpose of the valuation, namely, for use in this proceeding.  The report stated that market value was used as the valuation basis.  The report then recited two definitions that were applied.  The first was “market value”.  It was as follows –

   Market Value is defined by the International Valuation Standards Committee (referred to as “IVS”) as the estimated amount for which an asset or liability should exchange on the date of valuation between a willing buyer and a walling seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion. 

5. The second was “market approach”.  It was as follows –

   The IVS defines Market Approach as a valuation approach which provides an indication of the value by comparing the subject asset with identical or similar assets with identical or similar assets for which price information is available.  The total valuation of each bus, bike, car, car wash and trailer came to $778 000.

6. Neither party challenged that valuation in any way.

Applicable legal principles

1. Those comments represent my examination of the evidence about the assets that fall for division.  Before addressing the manner in which the assets should be divided it is both necessary and desirable to make various observations about the legal principles that apply.

2. The division of property in family law litigation is governed mainly by s 79 of the Family Law Act, although other sections of the Act are relevant, as canvassed below. Under s 79(2), an order that alters property interests of parties may only be made if the court making the order is satisfied that it is just and equitable to do so. Once the court is persuaded that it is just an equitable to alter property interests, s 79(4) then sets out an array of considerations that the court must take into account in assessing the order, if any, that should be made. Authority in the High Court in Stanford v Stanford[63] has held that the enquiry in s 79(2) must not be conflated with the enquiry in s 79(4). That said, in Bevan & Bevan[64] the Full Court held that the questions determined when addressing s 79(4) permissibly inform the threshold issue of whether it is just and equitable to alter property interests.

   [63] (2012) 247 CLR 108

   [64] (2013) 49 Fam LR 387

3. The starting point in any examination of whether it is just and equitable to make a property settlement order is the identification of the existing legal and equitable interests of the parties.  The High Court in Stanford v Stanford held that it cannot be assumed that the parties’ rights to or interests in marital property are or should be different from those then existing. Nor can it be assumed that one or other party has an entitlement to have the parties’ property divided by reference to the matters set out in s 79(4). In Stanford v Stanford the High Court recognised that commonly it will be just and equitable for the property rights of the parties to be altered for the simple reason that the breakdown in their relationship ends their fiscal unity and that breakdown deprives them of the common use of their property that by marriage they enjoyed.  The Full Court adopted a similar approach in Bevan & Bevan as did I when sitting in the Federal Circuit Court in Paxton & Paxton.[65]

   [65] [2016] FCCA 1689

4. Here, the parties separated in 2014 and divorced on 17 June 2018 thereby terminating the fiscal unity they enjoyed during their 22 year marriage.  In my view, it is just and equitable to alter the property interests of the applicant and the respondent.

5. The process of evaluating the proper orders to be made is commenced by a consideration of the factors enumerated in s 79(4). The court must identify and assess the parties’ contributions within the meaning of s 79(4)(a) – (c). The court must then take account of the relevant matters referred to in s 79(4)(d) – (g) and s 75(2).

6. The court ascertains the value of property at the date of the hearing.  The authorities on point are beyond question, including In the Marriage of Zappacosta,[66] In the Marriage of Myerthall,[67] In the Marriage of Wardman & Hudson[68] and In the Marriage of Waters,[69] to name but a few.

   [66] (1976) 2 Fam LR 11,214

   [67] (1977) 3 Fam LR 11,324

   [68] (1978) 5 Fam LR 889

   [69] (1981) 6 Fam LR 871

7. No presumption exists of an entitlement to equal division of assets, as the High Court held in In the Marriage Mallet.[70]  In this case the respondent argued that the assets should be divided equally.

   [70] (1984) 156 CLR 605

8. In this case the parties were unrepresented.  As mentioned above, in the respondent’s case, his approach to disclosure and discovery has been poor, to say the least.  In many instances the details about one or more specific assets have been defective, making it very difficult to reliably value the relevant asset.  That led me to consider whether it was better, in the circumstances of this case, to adopt a global approach towards the assets.  Such an approach has been sanctioned in In the Marriage of McMahon[71] and by the earlier decisions of this court in In the Marriage of Gill[72] and In the Marriage of Ahmad.[73]

   [71] (1995) 19 Fam LR 99

   [72] (1984) 9 Fam LR 969

   [73] (1994) 18 Fam LR 514

9. In the passages below I have addressed legal and factual issues associated contributions.

Identifying the assets to be divided

1. For the applicant, she contended that the assets to be divided were few in number.  She said they were –

   a)the Country O property;

   b)1 & 2 F Street, Suburb G;

   c)3 F Street, Suburb G;

   d)B Pty Ltd business;

   e)C Pty Ltd business; and

   f)the vehicles and rolling stock.

2. For the respondent, he contended that a broader array of assets fell for division.  He said they were –

   a)the Country O property;

   b)B Pty Ltd

   c)D Pty Ltd

   d)the proceeds of the sale of the former matrimonial home; and

   e)a motor vehicle.

3. He said the total value of the assets that remained was $857 266 made up mostly of the sum of $742 500 that he said was the value of the Country O property.

4. From the foregoing, it will be apparent that certain common ground had been reached about the assets that fell for division.  They were the Country O property, C Pty Ltd, B Pty Ltd and D Pty Ltd.  As to each, based on the foregoing analysis, the points set out below emerge.

5. The financial experts valued C Pty Ltd at zero.

6. The financial experts valued B Pty Ltd at zero.

7. I find that the respondent had a 30% interest in D Pty Ltd.  That translated to a 30% interest in the net value of the two parcels of land D Pty Ltd owned.  No valuation was adduced about that land nor was there evidence about the debt owed to mortgagees in respect of both parcels of land.

8. The Country O property has not yet been sold.

9. The expert financial evidence revealed that the very considerable personal use by the respondent of funds owned by B Pty Ltd and C Pty Ltd was a factor in their conclusion that the business of C Pty Ltd and B Pty Ltd was valueless.

10. The rolling stock valued at $788 000.

Contributions

1. Little evidence was adduced in this case about the financial position of the applicant on the one hand and the respondent on the other at the commencement of their relationship.  I accept that each worked very hard.  Initially, the respondent entered the workforce in the transport industry.  Thereafter he diversified into transportation activities and later his commercial diversification extended into various business interests.  The applicant is not formally trained.  Yet she said in evidence and I accept that she provided significant assistance in the running of C Pty Ltd and B Pty Ltd by undertaking bookkeeping activities.  In addition, she raised the couple’s three daughters to adulthood.

2. As is far from unusual in cases involving a consideration of the parties’ respective contributions, seldom is the contribution of the wife supported by evidence that quantifies in time or monetary terms her contribution.  While the High Court held in In the Marriage of Mallet that there is no presumption in favour of equality of contributions, in a substantial marriage where children have been raised equality of contribution is frequently a common result.  So much has been held by the Full Court in In the Marriage of Ferraro,[74] In the Marriage of Waters & Jurek and In the Marriage of McLay.[75]  Further, as was held in In the Marriage of Figgins,[76] marriage is a partnership and the party whose economic contributions are lesser than are the other’s should not be disadvantaged.

   [74] (1992) 16 Fam LR 1

   [75] (1996) 20 Fam LR 239

   [76] (2002) 29 Fam LR 544

3. Further, conduct of one party that has a direct connection with financial matters may be taken into account.  Support for that proposition is in plentiful supply as is revealed by the decisions in cases such as In the Marriage of Cordell,[77] In the Marriage of Mead,[78] In the Marriage of P & P,[79] In the Marriage of Prestwich,[80] In the Marriage of Willmore,[81] In the Marriage of Fisher,[82] In the Marriage of Browne & Green[83] and In the Marriage of Spiteri.[84]

   [77] (1977) 3 Fam LR 11,588

   [78] (1983) 9 Fam LR 193

   [79] (1985) 9 Fam LR 1100

   [80] (1984) 9 Fam LR 1069

   [81] (1988) 12 Fam LR 692

   [82] (1990) 13 Fam LR 806

   [83] (1999) 25 Fam LR 482

   [84] (2005) 33 Fam LR 109

4. In this case a substantial body of evidence existed, well documented by Mr HH and Mr KK, to the effect that the respondent took large sums of money from C Pty Ltd and B Pty Ltd and applied those sums either for his personal gain, to discharge debts of other companies or for purposes that were not proper corporate purposes.  That had the effect of rendering the value of C Pty Ltd and B Pty Ltd either substantially diminished or valueless.  Either way, the applicant was thereby severely financially disadvantaged.  Adjustments must be made to reflect that.

Future needs

1. A disparity emerged in the parties’ future needs, even though they are of similar ages, the applicant being 44 and the respondent 49.  The applicant is not vocationally trained and as at the date of the trial said she worked as a customer service officer for which she earned an average weekly income of $800.  She said her two eldest daughters contribute weekly to meeting ordinary domestic expenses on such things as groceries and toiletries.  She said her weekly expenses amounted to $735.  One daughter remains at school. 

2. In his viva voce evidence the respondent said he was of an age that, if required, he could return to the transport industry, although that was not his preferred option, he said. 

3. Conversely, the applicant said her future was very uncertain having regard to her age, the fact that she has no formal training that is vocationally focused and the children live with her.  In her financial statement she gave as her occupation customer service officer.  She said she had a little over $9000 in superannuation. 

4. Interim property orders were made by his Honour Judge Riethmuller, as has been canvassed above. 

5. It has been held in a large body of cases that the fact that one party has the care for the children and is likely to retain that care is a weighty factor in favour of that party.  Cases that have so held include In the Marriage of Dench,[85] In the Marriage of Park,[86] In the Marriage of P,[87] In the Marriage of Menz,[88] In the Marriage of Howes,[89] In the Marriage of Zdravkovic,[90] In the Marriage of Townsend[91] and In the Marriage of Georgeson.[92] 

   [85] (1978) 6 Fam LR 105

   [86] (1978) 4 Fam LR 488

   [87] (1979) 5 Fam LR 454

   [88] (1980) 6 Fam LR 325

   [89] (1981) 7 Fam LR 650

   [90] (1982) 8 Fam LR 97

   [91] (1994) 18 Fam LR 505

   [92] (1995) 19 Fam LR 302

6. Where one party, here the respondent, has skills that he could be expected to build whereas the other party, here the applicant, does not, the applicant will be entitled to an enhanced award.  The decision in In the Marriage of W[93] stands for that proposition. 

   [93] (1980) 6 Fam LR 538

Contentions of the parties on division

1. The respondent submitted that the assets should be divided on a 50/50 basis. 

2. Conversely, the applicant submitted that the assets should be divided on a 60/40 basis in view of the disproportionate contributions. 

3. I agree, the division should favour the applicant.  I say that mainly because she has the ongoing responsibility for the children, her future earning potential is bleak and the respondent, during the marriage, withdrew substantial funds from the operating businesses that may well have been valuable whereas those businesses are now both valueless.  In my view, the assets should be divided on the basis of 60% to the applicant and 40% to the respondent. 

4. The remaining assets are threefold, namely, the Country O property, the 30% interest the respondent holds in the land owned by D Pty Ltd and the rolling stock.  The Country O land has yet to be sold and the two parcels of land owned by D Pty Ltd have yet to be valued and then the net value of them ascertained.  In addition, the liability for income tax of both parties has yet to be assessed. 

The proper approach where a taxation liability may remain

1. At several stages of their evidence both the applicant and the respondent gave evidence that indicated each had not paid tax.  The evidence did not go so high as to reveal acts of fraud or behaviour in the nature of tax evasion.  However, on the respondent’s own evidence, for years and years no tax was paid as it should have been.  On the applicant’s evidence, she did not pay tax on drawings. 

2. A question arose whether the applicant and respondent had complied with their obligations under the Income Tax Assessment Act.  No relevant evidence in the form of tax returns was given among the thousands of pages of documents in this case. 

3. The evidence about the payment of tax was inconsistent.  The respondent said –

   a)he had not prepared tax returns because of the B Pty Ltd debt;

   b)he did not provide tax returns to support finance applications for Y Pty Ltd;

   c)his Honour Judge Riethmuller ordered the respondent to lodge tax returns in relation to 10 years of income;

   d)the respondent said he declared zero by way of earnings over 10 years;

   e)during a time when the respondent said he earned zero he was concurrently spending $30 000 per month;

   f)the respondent is in an arrangement for the payment of certain tax debts; and

   g)sums remain unpaid for other tax debts.

4. A strong line of authority has held that a court has a duty to protect the revenue of the Commonwealth, that the court should take such steps as it is able to ensure that the revenue laws are not evaded and that the referral of the papers to the Attorney-General attains that object.  Authorities supporting that view include the decision of Lindenmayer J in In the Marriage of P & P, the decision of the plurality in In the Marriage of Tingley,[94] the decision of the Full Court of the Supreme Court of South Australia in Giorginis v Kastrati[95] and the decision of Handley JA of the Court of Appeal of the Supreme Court of New South Wales in Page v Vanker.[96]

   [94] (1984) 10 Fam LR 707

   [95] (1988) 49 SASR 371

   [96] (Court of Appeal of the Supreme Court of New South Wales, unreported, 7 December 1990)

5. In one decision, now well over 30 years in age, Frederico J commented in In the Marriage of Radwan,[97] that it is demeaning to the court to require judges to report to the taxation authorities “all and sundry transgressions” of the taxation laws. 

   [97] (1985) 11 Fam LR 1

6. One of the last authoritative statements on point was given in the decision of the Full Court in In the Marriage of Malpass & Mayson.[98]  A more recent illustration was given of a single judge referring a case to the Australian Taxation Office in Price v Price.[99]

   [98] (2000) 27 Fam LR 288

   [99] [2014] FamCA 1020

7. An equally impressive stream of judicial learning has cautioned against enthusiastic referrals to the authorities because by doing so parties to matrimonial litigation may be less likely to comply with their obligations of making full and frank disclosure.  In that category of cases are the UK decision of A v A; B v B[100] and the cases referred to by Charles J. 

   [100] [2000] 1 FLR 701

8. Doctrinally, the question confronting me is more satisfactorily analysed by reference to ascertaining the nature and extent of the property available for division.  If a liability to the Commissioner of Taxation will or might have a bearing on the ascertainment of the value and extent of assets available for division, that is a matter of very direct relevance at this point in time, aside from any issue of referring the papers to the Attorney-General.  It seems to me that such an approach is wholly consistent with the decision in In the Marriage of Chemaisse,[101] In the Marriage of Rowell; Deputy Commissioner of Taxation (Intervener),[102] as well as In the Marriage of Malpass & Mayson.  As to the approach the court should take where contingent liabilities may have the effect of diminishing the overall state of the assets, the Full Court said the following in Malpass –

   It is clear that once a trial judge has determined that there is a prospect of the pool of assets being diminished because of some contingent liabilities, namely, potential arrears of income tax, the trial judge should normally invite the parties to make submissions on the effect that such liabilities might have in relation to either the future conduct of the proceedings or its outcome.  This is not an invariable rule however and questions of proportion and the remoteness of the risk that such liabilities will be incurred should be taken into account in determining to invite such submissions.  There may be other circumstances, such as those outlined hereafter, when we consider that a trial judge is not under such a duty. 

   [101] (1987) 11 Fam LR 392

   [102] (1989) 96 FLR 449

9. Accordingly, on one view it may be said that the conclusions I can presently reach on the division of assets in this case are indicative only as I am required to better assess the overall state of the parties’ liabilities.  At present, that exercise is seriously incomplete.  Having said that it is relevant to observe that early in the life of this litigation, his Honour Judge Riethmuller required the parties to lodge all taxation returns that may have been overdue.  Both parties told me each had done as his Honour required.  Yet no personal or company tax return was exhibited to any affidavit or was otherwise given in evidence.  No receipt was adduced to indicate that the Australian Taxation Office had been paid, whether by the applicant, the respondent or companies he controlled. 

10. I once considered whether it was desirable to defer a final decision in this case, unless and until a full examination had been given of the parties’ tax liabilities. Until then, an unbalanced view of the evidence might have emerged rendering it difficult if not impossible to reach a conclusion about whether the making of an order under s 79 should be made.

11. It remained the case that the respondent said in his evidence that “at one stage” (his words) tax had not been paid in 13 years.  It seemed that at some stage that error was rectified.  It may be that no amount of income tax is presently due.  I cannot say for certain as neither party sought orders for the payment of a tax debt.  If the true position is that no amount of income tax is presently due, then the assets to be divided are –

    a)the sale proceeds of the Country O property;

    b)the monetary net value of the respondent’s 30% interest in D Pty Ltd; and

    c)the rolling stock.

12. Accordingly, when the Country O property is sold, the net proceeds must be disbursed as to 65% to the applicant and 35% to the respondent.  When the net value of the two properties owned by D Pty Ltd is ascertained, the monetary amount corresponding to 60% of that net value is to be transferred to the applicant. 

13. The respondent must obtain the net valuation of the two properties in Suburb G owned by D Pty Ltd within 60 days of this order.  Within 90 days of this order, the respondent must pay the applicant the monetary amount corresponding to 60% of the respondent’s 40% interest in that value. 

14. The rolling stock total valuation was $788 000.  In my view, that needed to be divided as to 60% to the application and 40% to the respondent.  That will require the respondent to pay the applicant $472 800. 

Orders

1. The formal orders I make are those set out above.  Otherwise, all applications are dismissed.

I certify that the preceding 189 (one hundred and eighty-nine) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Wilson delivered on 19 June 2019.

Associate:  tb

Date:  19 June 2019