Keskin and Keskin (No 3)
[2021] FamCA 169
FAMILY COURT OF AUSTRALIA
| KESKIN & KESKIN (NO. 3) | [2021] FamCA 169 |
| FAMILY LAW – EVIDENCE – where after a short time in the witness box the wife refused to continue with cross-examination – where the wife chose not to cross examine the husband – where the parties consented to the matter being heard on the Affidavit evidence and by way of oral submissions – where the matter has a lengthy history and has been remitted by the Full Court of the Family Court of Australia – where the matter proceeded on the basis proposed by the parties. FAMILY LAW – PROPERTY – Value of Property – where there was a dispute as the valuation of a property overseas – where the dispute between the parties was ultimately in relation to the exchange rate used to convert the value of the property into AUD – where the property is included in the asset pool on the basis of the single expert’s valuation converted to AUD as at the date of judgment – where any reduction in its value due to the failure of the wife to comply with prior orders for sale is taken into account – where any sale of the property in excess of the estimated figure in the asset pool will be adjusted in accordance with the final percentages. FAMILY LAW – PROPERTY – Just and Equitable – where during the marriage and post separation the parties agreed that their contributions were equal – where the wife sought a 20% adjustment in her favour – where an adjustment of 10% is made in favour of the wife due to s 75(2) factors – where the wife has already received a partial property settlement. FAMILY LAW – PROCEDURAL – where this matter has been remitted for hearing from the Full Court of the Family Court of Australia. |
| Family Law Act 1975 (Cth) Family Law Rules 2004 (Cth) |
| Goudarzi & Bagheri (No 2) [2017] FamCAFC 19 Kowaliw & Kowaliw (1981) FLC 91-092 Stanford & Stanford (2012) 247 CLR 108 R v Watson; Ex parte Armstrong (1976) 136 CLR 248 |
| APPLICANT: | Ms Keskin |
| FIRST RESPONDENT: | Mr Keskin |
| THE SECOND RESPONDENT: | Mr R Keskin |
| FILE NUMBER: | MLC | 9445 | of | 2014 |
| DATE DELIVERED: | 29 March 2021 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Macmillan J |
| HEARING DATE: | 10 – 12 August 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Bruno Kiernan |
| SOLICITOR FOR THE APPLICANT: | MMH Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Tim Puckey |
| SOLICITOR FOR THE RESPONDENT: | Pearsons Lawyers |
| THE SECOND RESPONDENT: | In Person |
Orders
The Wife’s Further Amended Response filed 27 July 2020 and the Husband’s Further Amended Response filed 29 March 2019 be adjourned for mention before Justice Macmillan at 10.00am on 9 April 2021.
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 |
First Respondent
And
| Mr R Keskin |
Second Respondent
REASONS FOR JUDGMENT
Introduction
The parties in this case separated in 2014 and on 21 October 2014 the wife commenced property proceedings in the Federal Circuit Court of Australia (“Federal Circuit Court”). Those proceedings were transferred to this Court on 17 December 2015. There have been numerous interim hearings in both the Federal Circuit Court and this Court and on 19 June 2019, after a contested hearing in which neither the husband nor the wife were legally represented, Justice Wilson made final property orders (“Final Orders”). Those orders were the subject of a successful appeal by the husband, the final property orders were set aside and the parties’ applications for property settlement remitted for rehearing. By the time the matter came on for hearing before me the parties’ circumstances had changed and the dispute between them was much more limited, not least because the parties agreed that as a result of the COVID-19 pandemic the business, which had been a significant issue throughout the proceedings, no longer had any value.
Although the husband’s father Mr R Keskin (“the second named respondent”) had been a party to the proceedings on the final day of the hearing I made orders by consent as follows:
a)Within 48 hours the wife do all acts and things required to withdraw the caveats (dealing number … and …) secured on title over the real properties of D Pty Ltd at 1-2 & 3 F Street Suburb G in the State of Victoria at the wife’s sole expense.
b)That the second named respondent forthwith upon removal of the caveats make all necessary applications for finance to raise the balance of $150,000 payable by him to the husband in respect of the sale of the husband’s 30% interest in D Pty Ltd and pay those monies forthwith upon the relevant finance being raised in payment or reduction of the liabilities presently due and payable to the ATO and/or SRO by B Pty Ltd.
c)All extant applications of the second named respondent be otherwise dismissed.
d)All extant applications of the wife for relief against the second respondent be dismissed and the second respondent be otherwise released from further participation in this proceeding.
The hearing before me proceeded in a somewhat unusual manner in circumstances where the wife gave instructions to her counsel that she did not want to be further cross-examined or participate in the proceedings. After some discussion between the parties respective counsel and although there were some issues with respect to how the court would deal with the contested evidence it was ultimately agreed that the matter would proceed on the basis of the parties’ respective Affidavit evidence and oral submissions with respect to that evidence. Counsel for the wife conceded that in so far as there was a dispute with respect to the parties’ respective evidence in circumstances where the wife chose not to continue her cross-examination or to cross-examine the husband, his evidence should be preferred. Although the course proposed by the parties was somewhat unorthodox given the lengthy history of the proceedings, the need to finalise the matter and the parties having agreed to adopt this course, I acceded to their application to proceed on that basis.
The matter was further complicated by the lack of evidence on a number of significant issues, both parties making assertions that were not supported by evidence. Whether this was because both parties had at various times during the proceedings represented themselves or because of the length of the proceedings and level of distrust and disputation, in these circumstances it was not simply a matter of preferring the evidence of the husband over that of the wife. This added significantly to the complexity of the matter and the difficulty the Court faced determining those matters in dispute.
Background
The applicant wife was born in 1974 and is currently 47. The wife works as a retail assistant, a clerical worker and operates a part time finance business. The respondent husband was born in 1969 and is currently 51. The husband is the current director of B Pty Ltd and C Pty Ltd, however at the time of the hearing was in receipt of the Federal Governments JobKeeper Payment.
The parties were married on … 1992 and separated on 1 September 2014, the parties were together for a total of 22 years. The parties were divorced in June 2017. There are three children of their marriage Ms E, Ms F and N aged 27, 22 and 17 respectively. The children currently reside with the wife. The wife says that the children are estranged from the husband.
Throughout the marriage the wife was the primary caregiver for the children and the husband worked outside the home. The wife’s case is that although they had adopted traditional roles in their marriage she was also heavily involved in all aspects of their various businesses.
At the commencement of the marriage the husband worked in the transport industry. It his evidence that the transport business continued to grow until in 1998 he had a built up a fleet of sixteen vehicles with over 30 drivers and stopped driving vehicles focusing instead on managing the business. The husband, in partnership with two others, also operated a fleet of chauffeur driven vehicles.
The parties purchased the property at City P (“The Country O Property”) in or about September 2009. The Country O Property is in the wife’s name and is unencumbered.
After separation the parties sold the former matrimonial home at K Street, Suburb L Victoria (“Suburb L Property”). The parties used part of the proceeds of sale of the property to discharge the mortgage over the Country O Property and orders were made for them to each receive a partial property settlement. How these partial property settlements, and in particular how the amount received by the wife is to be treated, are an issue in this case.
D Pty Ltd and the F Street Properties
Prior to 2006 the husband and the second named respondent shared premises at Suburb MMM from which they conducted their separate businesses, however after the premises were damaged by fire they had to relocate to new premises.
On 10 May 2006 the husband and the second named respondent incorporated D Pty Ltd.The second named respondent was the sole director of D Pty Ltd and he and the husband both held one share.
The husband’s evidence was that his business was struggling at this time and he asked the second named respondent to lend him money. Thereafter the second named respondent personally borrowed $100,000 from the National Australia Bank (“NAB”) and on 9 May 2006 the $100,000 was deposited into the husband’s business account. The husband also deposed that he made monthly repayments until 9 June 2010 the amount outstanding being by then $43,191. The second named respondent repaid the balance of the NAB debt and it is the husband’s case that he owed his father this amount.
In July 2006 D Pty Ltd purchased the property at 1 & 2 F Street Suburb G (“the first F Street property”) for $730,000 plus costs of approximately $50,000. The husband’s evidence is that the second named respondent paid the deposit of $73,000 and in his capacity as a director of D Pty Ltd borrowed $750,000 from NAB to complete the purchase. This is consistent with the findings made by Wilson J in relation to D Pty Ltd.
On 17 August 2006 the first F Street property was registered in the name of D Pty Ltd. The husband’s evidence is that he and the second named respondent thereafter commenced building offices inside the empty warehouse at a cost of $90,000. The husband deposed that the second named respondent paid for these renovations on the basis that the husband would repay him for his half within two years and that he would pay his half of the deposit to the second named respondent when he had the funds to do so. The husband’s evidence is that thereafter he and the second named respondent continued to operate their own businesses out of the premises and contributed equally to the mortgage repayments.
On 16 May 2008 D Pty Ltd purchased the property at 3 F Street Suburb G (“the second F Street property”) for $330,000, paying a deposit of $30,000. Settlement took place in mid-2018. The husband’s evidence is that D Pty Ltd borrowed the balance of $270,000 and the second named respondent guaranteed the loan. The husband also said that the second named respondent contributed $144,924.02 by way of bank cheque which was his half share of the purchase price of the second F Street property. It is difficult to make sense of this evidence as if the second named respondent had contributed the amount the husband deposes to arguably D Pty Ltd would not have had to borrow $270,000 however ultimately it is a matter of whether the Court accepts the amounts the husband says he owed the second named respondent and his evidence about this is unchallenged.
In or around September 2008 the husband says he needed to inject more capital into his business and D Pty Ltd borrowed a further $255,000 which the second named respondent personally guaranteed.
B Pty Ltd
On 11 October 2007 the husband incorporated B Pty Ltd. The husband was the sole director and shareholder. B Pty Ltd operated as a transport business between Suburb G to the Melbourne CBD. The husband’s evidence is that at the height of the business B Pty Ltd had nine vehicles. The husband states that the wife started working at the business to assist with administrative and bookkeeping work at this time as their youngest daughter had commenced school. The wife continued working in the business until separation.
Although there was a dispute between the parties with respect the wife having removed the husband and appointing herself as sole director without the husband’s knowledge or consent in circumstances where it is accepted that B Pty Ltd has no value it is not necessary to make findings with respect to these matters.
The husband alleges that in September 2014 the wife hacked the B Pty Ltd ANZ Bank Account and withdrew a total of $76,050 which she retained for her own benefit. It is his case that the Court should take into account the fact that the wife has had the benefit of these funds. The wife disputes the husband’s evidence and it is her evidence that she had received significantly less than the amounts deposed to by the husband. Unfortunately this cross-examination was cut short by the wife’s decision not to continue with her evidence.
Sale of D Pty Ltd Share to Second Respondent
The husband deposes that following his mother’s death in … 2008 the second named respondent wanted to retire and called up the various loans he had made to the husband, a total of $613,520. The husband’s case was that he was unable to pay the second named respondent and so as to avoid legal proceedings between the two of them they entered into an agreement whereby the second named respondent would own 70% of the shares in D Pty Ltd and the husband would own the remaining 30%. The parties entered into a handwritten agreement to that effect on 5 May 2013.
In mid-2019 the State Revenue Office (“SRO”) commenced bankruptcy proceedings against the husband by issuing a Creditor’s Statutory Demand totalling $160,000. The husband states he also owed payroll tax and motor vehicle duty for B Pty Ltd.
The husband’s evidence is that in mid-2019 the SRO commenced bankruptcy proceedings by issuing a Creditor’s Statutory Demand against him and that he needed funds to pay the SRO in order to avoid bankruptcy he agreed to sell the second named respondent his remaining 30% share in D Pty Ltd. On 15 November 2019 the husband and the second named respondent entered into an Agreement for Sale the agreement being that the second named respondent would pay the husband $200,000 for his 30% share in D Pty Ltd. The husband states the second respondent paid him a sum of $50,000 which he used to pay the SRO and JJJ Accountants. It was the second named respondent’s case that although he owed the husband $150,000 as the wife had lodged caveats on the titles to the F Street properties he had been unable to arrange the finance to make that payment.
The matter having been resolved as between the wife and the second named respondent the $150,000 the second named respondent owes the husband has been included in the asset pool. It was not part of the wife’s case that the $50,000 the husband has already received and used to pay the SRO and JJJ Accountants should be notionally added back to the pool or otherwise taken into account.
Procedural History Post Final Orders
On 10 December 2019 the husband’s appeal was heard by the Full Court of the Family Court of Australia and orders were made by Strickland, Kent and Austin JJ on 27 November 2019 allowing the appeal, setting aside Orders 2-7 of the final orders made by Wilson J and remitting the parties applications for property settlement for hearing by a judge other than the primary judge.
The final order made by Wilson J on 19 June 2019 for the sale of the Country O property was not part of the husband’s appeal and on 7 February 2020 the husband filed an Application in a Case seeking enforcement of the order for the sale of the Country O Property.
After a number of procedural appearances before Registrar George the matter came before me on 22 April 2020. The wife did not appear on this date and I made orders adjourning all extant applications to 30 April 2020 and directing that the wife file and serve a response to the husband’s Application in a Case.
On 29 April 2020 the husband filed an Amended Application in a Case and a supporting Affidavit.
On 30 April 2020 the matter was listed before me and there was again no appearance by the wife. On that date I made orders that the wife file and serve a response to the husband’s Amended Application in a Case filed 29 April 2020 and any Affidavits in reply to those filed by the husband in support of his Applications in a Case by 8 May 2020. The matter was thereafter adjourned to 20 May 2020 to proceed by video hearing with leave being granted to the husband and second named respondent to apply to proceed with the husband’s application for final property orders and the application by the second named respondent for the removal of the caveats lodged over the real properties in Suburb G on an undefended basis on the adjourned date in the event that the wife failed to comply.
On 8 May 2020 the wife filed an Affidavit. She did not file any Response to the husband’s application.
On 20 May 2020, all parties being present at Court, the matter was listed for a final hearing to commence on 10 August 2020. There being a final Intervention Order still in force in the wife’s favour an order was also made pursuant to s 102NA of the Family Law Act 1975 (Cth) (“the Act”) in relation to cross examination of the parties. Filing directions were also made with the wife to file and serve her documents by 17 July 2020. The husband and second named respondent were ordered to file and serve their documents by 31 July 2020.
On 16 July 2020 orders were made extending the time for the wife to file her material to 24 July 2020. On this date orders were also made inter alia for the wife to depose in her Affidavit the reasons why she did not apply for a grant of legal aid until 1 July 2020. The time for the husband and second named respondent to file and serve their trial documents was extended to 5 August 2020.
The hearing commenced on 10 August 2020 and on 12 August 2020 I reserved judgment to a date to be fixed.
The Evidence
As previously referred to although the matter commenced with the wife giving her evidence in chief and being cross-examined it was ultimately agreed that the parties would rely upon their respective Affidavits and submissions by their respective counsel.
Although the wife was the respondent to the husband’s Amended Application in a Case for enforcement of the orders for the sale of the Country O property she was the applicant in the final property proceedings before Wilson J and although she filed a Further Amended Response to Initiating Application instead of an Amended Initiating Application she was treated as the applicant for the purposes of the hearing before me.
The wife relied upon the following documents:
a)Further Amended Response to Initiating Application filed 27 July 2020;
b)Affidavit of Ms Keskin filed 24 July 2020;
c)Financial Statement filed 24 July 2020; and
d)Affidavit of Mr B filed 29 March 2019.
The respondent husband relied upon the following documents:
a)Further Amended Response filed 29 March 2019;
b)Affidavit of Mr Keskin filed 5 August 2020;
c)Affidavit of Mr Keskin filed 29 March 2020 (Re: Valuation of Country O Property dated 27 February 2019);
d)Affidavit of Mr B filed 29 March 2019; and
e)Financial Statement filed 6 August 2020.
Legal Principles
Section 79(2) of the Act requires the Court to be satisfied that it is just and equitable to make orders adjusting the parties’ interests in property. These parties having been separated for over 6 years and having been involved in protracted litigation, including an appeal, in which they both seek orders adjusting their interests in property, I am satisfied that it is just and equitable to make property orders bringing their financial relationship to an end.
The Court being satisfied that it is just and equitable to make property orders must make such orders as it considers appropriate. Whilst the Court has a broad discretion as the plurality in Stanford & Stanford (2012) 247 CLR 108 (at page 121) observed, citing R v Watson; Ex parte Armstrong (1976) 136 CLR 248 (at page 257) it is not an unfettered discretion and must be exercised “in accordance with legal principles, including the principles which the Act itself lays down.” Section 79(4) of the Act provides as follows:
In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
• The financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
• The contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of the last-mentioned property, whether or not that last mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
• The contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
• The effect of any proposed order upon the earning capacity of either party to the marriage; and
• The matters referred to in subsection 75(2) so far as they are relevant; and
• Any other order made under this Act affecting a party to the marriage or a child of the marriage; and
• Any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
Disputed Asset Pool
Although the parties did not have an agreed position they both based their submissions upon the ‘Simplified Balance Sheet’ in the husband’s Case Outline filed 7 August 2020. The assets and liabilities identified in that balance sheet were as follows:
Asset
Value of Wife’s Property
Value of Husband’s Property
(a)
Property in Country O
E$780,000
(b)
Suburb L Proceeds
$255,000
(c)
D Pty Ltd Proceeds payable
$150,000
(d)
Motor Vehicle 1, contents and other property
$E15,000
(e)
ATO and SRO Liabilities
($187,000)
TOTAL
E$1,050,000
($37,000)
TOTAL NET PROPERTY POOL
$1,013,000
There were a number of areas of dispute in relation to the Simplified Balance Sheet including the value of the Country O Property, the value attributed to the husband’s interest in D Pty Ltd by the husband and the second named respondent, whether or not the partial property settlement received by the wife from the Suburb L proceeds should be included within the property pool and the alleged debts to the Australian Taxation Office (“ATO”) and the SRO.
Country O Property
In 2009 the parties purchased the property in Country O in the wife’s name subject to a mortgage to the Country O Bank. As previously referred to after separation part of the proceeds of sale of the former matrimonial home in Suburb L were used to discharge the mortgage over the Country O Property. Although there is no dispute that the Country O Property should be included in the asset pool there is a dispute as to its value in that pool and what orders should be made with respect to it. The property was valued by Mr C and Mr D and their valuation as at 27 February 2019 is part of the evidence. Their opinion was that as at that date the property was worth 2,950,000 Country O dollars. They referred in their valuation to 1 AUD being worth 378.55 Country O dollars as at 27 February 2019 based upon the Country O Central Bank Exchange rate of 378.55 and on that basis the husband has included the property in his Simplified Balance Sheet at a figure of AUD$780,000.
Neither party sought or obtained an updated valuation nor did they seek to cross-examine the experts. The dispute between the parties as to the value of the Country O property was ultimately in relation to the exchange rate to be used to convert that figure for the purposes of the proceedings.
It is the husband’s case that the property should be included in the asset pool at the figure of $780,000 based upon the expert’s valuation and the exchange rate they applied irrespective of any changes in the exchange rate since completion of that valuation. Although in her Case Outline filed on 7 August 2020 the wife included the property in the asset pool at that figure it is her case that the value of the property should be determined based upon the exchange rate as at 10 August 2020. The parties agreed that the value of the property in Australian dollars at that time was approximately $562,000. Although they also agreed that an Australian dollar would buy 3.26 Country O dollars this is not consistent with their agreement as to the value as at 10 August 2020.
There seemed to be significant confusion in relation to the conversion rate to be applied. I note in this regard that the experts appear to have applied the exchange rate to convert Australian dollars to Country O dollars rather than converting Country O dollars to Australian dollars. The value in Country O dollars when converted to Australian dollars would on my calculations have been less than the $780,000 arrived at by the experts and relied upon by the husband. To add to confusion it appears that the agreed figure of $562,000 as at 10 August 2020 has been calculated on the applicable rate for converting Country O dollars to Australian dollars and not Australian Dollars to Country O dollars which on that date was 0.19062.
This issue is a significant one in circumstances where the Country O property is essentially the only asset, other than the $150,000 owed to the husband by the second named respondent, presently available and from which the party’s respective entitlements, once determined, are to be satisfied and in circumstances where it is the husband’s case is that he should receive a fixed dollar payment.
The husband’s case is that the value of the Country O dollars has significantly decreased and that in circumstances where the wife had failed to comply with orders made by consent by Judge Riethmuller on 30 September 2015 requiring her to transfer her interest in the property to the husband and an order being then made by Wilson J on 19 June 2019 for an immediate sale and the property remaining unsold, it should be included in the pool at the value attributed to it by the expert valuers in February 2019. The husband also deposed to the wife, notwithstanding the orders for a sale, having instituted proceedings in Country O in which she sought orders permitting her to retain the property. It was also put to the wife in cross-examination prior to her refusal to give any further evidence that in October 2019 she had rejected an offer of 2,500,000 Country O dollars which was prior to the Country O dollars dropping in value.
Although it was the wife’s case that she was unable to sell the property because the husband had lodged the Country O equivalent of a caveat over the property in circumstances where she refused to continue to be cross-examined and chose not to cross-examine the husband and that it was the husband agitating to enforce the orders for sale I accept on the balance of probabilities, as submitted by the husband, that it was the wife who was resisting the sale.
Whilst this may be the case it does not in my view follow that the Country O Property should be included in the asset pool based upon its value as at the date of the expert’s valuation nor am I satisfied that it would be just and equitable to do so. Particularly so in circumstances where the value the husband says should be attributed to the property is based upon the single expert valuer having applied the exchange rate used to convert Australian Dollars to Country O dollars which he said was 378.55 Country O dollars for 1 Australian dollar rather than converting Country O dollars to Australian Dollars. I also note however that the offer to purchase the husband wanted to the wife to accept was for $2,500,000 not the $2,950,000 attributed to it by the experts.
The husband submitted in the alternative that the court should apply the exchange rate as at the date he filed his enforcement application. However it is not possible to determine what the outcome of that application might have been and in circumstances where the matter proceeded to a final hearing of the substantive application rather than the determination of his enforcement application, the timing of which did not rest solely with the wife, I am not satisfied that she should bear the brunt of any variations in the exchange rates during that period.
The unchallenged evidence of value is the evidence of the singe expert valuer, however in my view it is impossible to adopt any of the dates the parties propose based upon which the value of the property should be converted to Australian Dollars for the purposes of its inclusion in the pool and do justice as between the parties in doing so.
In all of the circumstances and notwithstanding that I am satisfied that the wife may have resisted the sale in my view the safer course is to include the Country O property in the asset pool on the basis of the single expert’s valuation converted to AUD as at the date of judgment. However I do propose to take into account the reduction in its value based upon the drop in value of the Country O dollars as a consequence of the wife’s failure to comply with the order for its sale pursuant to s 75(2)(o) of the Act.
D Pty Ltd
As previously referred to on 15 November 2019 the husband and the second named respondent signed an agreement for the sale of the husband’s 30% interest in D Pty Ltd to the second named respondent for $200,000. It is the husband’s evidence that he used $50,000 of that amount to pay some outstanding liabilities and is owed the balance of $150,000 by the second named respondent and that it is that balance that should be included in the asset pool. Although the wife did not pursue her application to set aside the transfer of the husband’s shares in D Pty Ltd to the second named respondent there was a dispute in relation to the value the husband placed upon his interest for the purposes of his agreement with the second named respondent, the wife’s case being that the husband having disposed of his interest for less than its value there should be an adjustment in her favour.
The husband deposed that as at September/October 2019 D Pty Ltd had the following assets and liabilities:
ASSET VALUE (a) 1 & 2 F Street, Suburb G - HHH Valuers E$1,060,000 (b) 3 F Street, Suburb G - HHH Valuers E$540,000 Total Assets E$1,600,000 LIABILITIES VALUE (c) ATO debts (unlodged) $140,000 (d) NAB loan …74 E$255,000 (e) NAB loan …83 E$270,000 (f) NAB business loan #…02 E$53,110 (g) NAB Visa #…36 E$25,430 (h) Total Liabilities E$743,540 NET EQUITY E$856,460
It was on this basis that the husband valued his 30% interest in D Pty Ltd at $256,938. However he also deposed that his father had paid his share of the rates and public liability insurance in the sum of $56,416 which he then deducted from the value of his 30% share arriving at the figure of $200,000.
Although the basis upon which she put her case was not totally clear the wife did take issue with a number of the husband’s figures. The first issue was in relation to the value of the property 1 & 2 F Street, Suburb G. Both the husband and wife relied upon the valuation of the property prepared by Mr B of HHH Valuers and dated 29 March 2019. In his valuation Mr B described the property as being a “…concrete warehouse with a part original ground floor office and a circa 2007, owner built side and first floor office extension” which he valued at $1,210,000. At the husband’s request Mr B also valued the property excluding the office extension his opinion being that the property was valued at $1,060,000 on that basis, a difference of $150,000.
Although instructions were also given to Mr B to value the property on the basis that D Pty Ltd did not own the office extension other than the husband’s assertion that the second named respondent funded the extension there was nothing in either of their Affidavits as to the ownership of that extension or why it was they said it was not owned by D Pty Ltd. Whilst I accept as counsel for the husband submitted that where there is a dispute between the evidence of the husband and the wife I should prefer the husband’s evidence as he acknowledged, in my view correctly, the onus of proof lay on the husband with respect to some aspects of his case. This being one example in my view where the husband should have adduced evidence in support of his assertion. Although the basis of the husband’s assertion was not totally clear if it was, as it appears to be, that the second named respondent paid for the office, in my view the evidence the husband has adduced does not support his assertion. The husband deposed that the second named respondent had funded the extension on the basis that he would pay him for his half within two years but that his relationship with the second named respondent became strained after he could not repay the various amounts he had borrowed, including his half share of the renovations, and the second named respondent threatened legal proceedings. The husband further deposed that after the second named respondent threatened legal proceedings he and the husband entered into an agreement to the effect that the second named respondent would own 70% of D Pty Ltd and the husband the balance. It is in my view reasonable to infer that the second named respondent’s interest was increased to take into account any additional funds he had contributed including the funds he contributed to the renovations. The descriptions and photographs of the property in the valuation also do not support the husband’s assertion that D Pty Ltd does not own the extension. In all of the circumstances I am satisfied that the value of the property was $1,210,000 not $1,060,000.
Nor do I accept that because the husband and the second named respondent agreed upon a figure the Court is bound to accept that figure as the value for the purposes of its determination. And in the event that the Court were to find that the husband disposed of his interest for less than its value the Court could depending on the circumstances and its findings add the difference to the asset pool, and treat the husband as having had the benefit of that amount or otherwise take the difference into account pursuant to s 75(2) of the Act if it considers it appropriate to do so.
There was also a dispute with respect to the liabilities the husband says he and the second named respondent took into account for the purposes of their agreement in particular the $140,000 unpaid tax the husband alleges D Pty Ltd owed to the ATO in respect of unlodged tax returns and the credit card debt. Counsel for the husband conceded that there is no evidence with respect to the alleged tax debt. Although I expressed some concern about the failure of the husband and the second named respondent to file tax returns and the need for this tax liability if it exists to be paid ultimately, the second named respondent now owning 100% of the shares in D Pty Ltd, it is a matter which he will need to address. However as submitted by the wife there is no evidence in support of the husband’s assertion of there being any tax debt. In my view, even if as submitted by the husband the wife chose not to cross-examine the husband about this debt, the husband could and should have adduced some evidence about the alleged debt to the ATO and did not do so.
Although the wife accepted that there were two NAB loans it was her case that the figures the husband had attributed to those loans for the purposes of his agreement with the second named respondent, being the figures as at 11 October 2019 were out of date and she was critical of the husband not having provided current bank statements. Counsel for the wife also submitted that the company credit card debt included personal expenditure and should not have been included by the husband for the purposes of calculating the value of his interest in D Pty Ltd. In my view it is not all that surprising that the husband had not produced current bank statements for the NAB loans given that it was his case that he had effectively sold his 30% interest in D Pty Ltd to his father in November 2019. The husband having produced statements for all three NAB loans and the credit card debt it was open to the wife to cross-examine him in relation to these issues. In circumstances where she chose not to do so the husband’s evidence in relation to these matters is unchallenged. There is also in these circumstances no way the Court to could make a determination as to whether or not the credit card debts were or to what extent they might be for personal expenditure as the wife asserts. On that basis, the husband’s evidence being unchallenged, I am satisfied that it was reasonable to take them into account for the purposes of assessing the value attributed to D Pty Ltd by the husband and the second named respondent for the purposes of their agreement.
It was also the husband’s case that he had deducted his share of the rates for the Suburb G properties a total of $29,416 and $27,000 for public liability insurance policy based upon which it was agreed the second named respondent would pay him $200,000. Whilst the husband had adduced evidence of the outstanding rates there was no evidence with respect to the public liability insurance. There is also no evidence based upon which I could conclude that the husband did not have the capacity to pay his share of either of these liabilities hence why he needed the second named respondent to pay these amounts on his behalf. I am satisfied that this is evidence that the husband could and should have adduced. In my view the fact that the wife could have cross-examined the husband and chose not to do so does not relieve him of that obligation.
Accepting the wife’s case with respect to the value of 1 & 2 F Street and D Pty Ltd’s tax liability the husband’s 30% interest was worth $343,938 not the $256,938 he and the second named respondent valued it at for the purposes of their agreement. Also accepting her case that the amounts the husband says he owed for his share of the rates and public liability insurance the amount the second named respondent owes should be $293,938 not $150,000, a difference of $143,938.
It was not totally clear whether the wife was saying that this difference should be notionally added to the pool or whether her case was that the difference should be taken into account in some other way. However in circumstances where the wife had not cross-examined the husband about his need for funds or the bona fides of his agreement with the second named respondent there is in my view no basis for the Court to find that the husband had engaged in conduct of the kind described by Baker J in Kowaliw & Kowaliw (1981) FLC 91-092 as follows:
(a)Where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of the matrimonial assets, or
(b)Where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
On that basis I am not satisfied that the difference between the husband’s figure and the value as I have found it to be should be either added back to the pool or is a matter to which the Court should have regard pursuant to s 75(2) of the Act. The figure to be included in the pool should be the $150,000 that remains to be paid.
Proceeds Of Sale Of Suburb L Property
In late 2015 the parties sold the former matrimonial home at K Street, Suburb L. The net proceeds of sale were applied in accordance with the terms of an order made by consent on 29 October 2015. The wife received a partial property settlement of $255,000. The wife deposed that of that amount $156,650 was paid to her then solicitor Croxford Partners to pay her legal fees and that:
…some of the remainder was used to pay off personal loans I had accumulated from family and friends. From separation, I used part of these fund to travel overseas for a holiday due to the stressful nature of these proceedings. I continued to use these funds for legal expenses in my matter throughout 2016. I purchased a car for Ms F and for other legal expense. These funds have now been completely depleted.
(Emphasis in Original)
The husband has included this $255,000 as a notional add back to the asset pool.
Although pursuant to the orders made 29 October 2015 the husband was to receive $150,000 the balance of the remaining funds after the payment to the wife was made amounted to only $55,878. The husband deposes that he used this amount to “…discharge a tax liability for B Pty Ltd as a Statutory demand by the ATO had been issued.” Counsel for the wife conceded that he was not in a position to dispute the husband having paid this tax liability and on that basis I am satisfied that this amount should not be notionally added back to the pool.
Although the funds the wife received were described as a partial property settlement she used a significant proportion of those funds to meet legal costs which in my view sets them apart from the balance of the funds she received. There was no evidence with respect to the husband’s legal fees or the source of the funds he used to pay them however there are in this case allegations and ultimately findings, with respect to both parties, but in particular the husband who was running the business, having had the use or benefit of what would otherwise have been joint funds. In all of the circumstances the position not being clear with respect to the husband’s legal fees and how they were paid I am not satisfied that it would be just and equitable to in effect add back any amount for the legal fees of one party and not the other. In these circumstances I propose to notionally add back $98,350 being the $255,000 the wife received less the $156,650 she paid to her solicitor distinguishing between those amounts she clearly acknowledges as being used for her legal fees and the other amounts she used for personal expenditure.
ATO And SRO Liabilities
The husband included a figure of $187,000 in his simplified balance sheet for amounts owing to the ATO and the SRO. Counsel for the husband having identified the documents he said supported the existence of these liabilities ultimately submitted that the figure based upon those documents should be $198,000 rather than the figure of $187,000 included in the simplified balance sheet. Although the documents produced by the husband suggest that the figure may be higher counsel for the husband also referred to some amounts having been paid which may account for that difference. In all of the circumstances I propose to accept counsel for the husband’s submission and use his figure of $198,000. Although counsel for the wife initially submitted that these liabilities may have been taken into account by Mr HH the single expert valuer when he valued B Pty Ltd for the purposes of the final hearing before Wilson J even if that were the case it is now agreed that the business has no value and as conceded by the wife if there are tax liabilities they will need to be paid. Although there may be issues with respect to the husband’s use of B Pty Ltd funds and why these liabilities remain unpaid doing the best I can on the evidence before me I am satisfied that they should be paid and as conceded by the wife should be included as a liability in the asset pool.
Wife’s Liabilities
The wife included in the balance sheet in her case outline a number of other liabilities. These were a HECS debt of $11,000, an ATO debt of $70,000, B Pty Ltd’s LLL Company debt which the wife says she had guaranteed and a debt to Q School of $21,933.32.
Although the wife included the HECS debt in her list of liabilities and referred to having to discontinue her university studies because of her involvement in the business and family obligations there is otherwise no reference to this debt in either of the Affidavits she relied upon for the final hearing. Accordingly there is no evidence before me in relation to this debt based upon which I could determine that it is a liability that should be included in the asset pool for the purposes of these proceedings.
In her trial Affidavit the wife referred to the husband having made some contributions to extracurricular activities for the eldest children of the marriage however she also referred to the husband having not met his child support obligations and not having paid the children’s school fees. However there was no evidence in relation to the outstanding school fees or child support arrears. In these circumstances it is not possible to be satisfied on the evidence before me that the school fees should be included as a joint liability in the asset pool.
The other two debts relate to the business. The first of those is the LLL Company debt which the wife submits is a B Pty Ltd debt which she personally guaranteed. As with the HECS debt there is nothing other than the inclusion of this debt in her summary of the asset pool in relation to this alleged debt. I cannot be satisfied on that basis that it should be included in the asset pool.
The final liability is the alleged ATO debt of $70,000. The wife deposes in her Affidavit as follows:
147. I had minimal involvement in delaying with the taxation issues of the business, the husband has lodged all company tax returns with relative accountants at the time and excluded me from any involvement.
148.Around mid-2017 I became aware that ATO is pursuing me for a debt of over $70,000 for Z Pty Ltd (ACN …) a company which ceased trading in 2011. Prior to our separation a payment arrangement was set up with ATO to repay the outstanding amount by B Pty Ltd.
149.B Pty Ltd had utilised the income from Z Pty Ltd as they were associated companies and therefore would be liable to repay the loan. However, as the debt has not been satisfied and relates to PAYG of employees of Z Pty Ltd the ATO is issuing demands personally with the directors. I have no means of satisfying this kind of debt and ATO have advised me to declare bankruptcy which I do not want to do.
150. I have advised the husband of this debt and have no response to date.
151. I seek to relay on the ATO demand letter as evidence.
152.Due to the outstanding ATO debts associated under my name, I have been unable to access tax refunds from my employment PAYG summaries since separation. The refunds due have been offset against the ATO debt for the 2015-2017 financial years.
The husband denies that the wife has an ATO debt as she alleges. Counsel for the husband submitted that although the wife had tendered a document headed Notice of Legal Action dated 7 April 2017 addressed to her personally there is no evidence of any legal action having been taken and that in circumstances where he had not had the opportunity to cross-examine the wife it should not be included in the asset pool. In circumstances where there is some, albeit limited evidence of this ATO debt, I am not satisfied that it should be ignored. It is the husband who has conducted the business since separation and arguably he would have access to the information in relation to this ATO debt. Denying that the wife has this ATO debt given the detail she provided is in my view not sufficient. In all of the circumstances I propose to include this debt in the asset pool and make provision for its payment. As it was incurred during the marriage I am satisfied that it should be a joint liability and in my view in circumstances where the parties have both had the benefit of the income of the business it would not be just and equitable for the wife to bear the sole responsibility as a director for this unpaid ATO debt. If the husband is correct and there is no debt neither party will be disadvantaged and the funds that would have been applied to that debt can be distributed to them.
Asset Pool For The Purposes Of The Court’s Determination
The asset pool for the purposes of determining the parties respective applications for orders pursuant to s 79 of the Act is as follows:
Asset
Value of Wife’s Property
Value of Husband’s Property
Joint
(a)
Property in Country O
E$488,295
Country O Dollar = 0.165524 AUD Mar 25, 2021, 23:50 UTC
(b)
Suburb L Proceeds
$98,350
(c)
D Pty Ltd Proceeds payable
$150,000
(d)
Motor Vehicle 1, contents and other property
$15,000
TOTAL
E$751,645
Liability
(e)
Husband’s ATO and SRO Liabilities
($198,000)
Wife’s debt to the ATO
(70,000)
TOTAL NET PROPERTY POOL
$E483,645
Contributions
Although the parties both gave evidence in relation to their respective contributions both during the marriage and post separation ultimately they agreed that their contributions were equal. Based upon my findings the pool is $483,645 and on the basis of an equal division they would each be entitled to $241,822.50. Or if the wife does not owe the ATO $70,000 as she deposes the figures would be $553,645 and $276,822.50
Other Considerations
It is the husband’s case that there should not be any adjustment to the parties’ respective contribution based entitlements whereas the wife seeks a 70/30% adjustment in her favour. Although as previously referred to I had some difficulty with the way in which the wife put her case in the course of his final address counsel for the wife submitted that there should be an adjustment of 10% in the wife’s favour to take into account the funds to which the husband has had access since separation, above and beyond those amounts received or retained by the wife, and which would have otherwise been included in the asset pool and a further 10% for what he described as the “common or garden” s 75(2) considerations.
The husband is 51 years of age. It is his evidence that having suffered from anxiety as a result of these proceedings he is not in good health. He also deposed to having suffered a stroke in 2019 from which he has now fully recovered but that he continues to suffer from diabetes, high blood pressure and high cholesterol. His evidence is not supported by medical evidence and in any event it is not his case that he cannot work for medical reasons. Although the husband is a director of B Pty Ltd and C Pty Ltd as at the date of the hearing both of these entities had effectively ceased trading as a result of the COVID-19 pandemic. Although as at the date of the hearing the husband was in receipt of the Job Keeper Allowance of $750 per week those payments will not be made indefinitely.
The wife is 47 years of age and she describes herself as having suffered severe stress. The wife is employed as a part time retail assistant and earns $350 per week. The wife also has a part time finance business and she says she earns approximately $350 per week. The three children one of whom is under 18 live with the wife. It is common ground that the husband has had little involvement with the children since separation although the parties do not agree upon the cause of the breakdown in his relationship with children.
Although the business has suffered as a result of the COVID-19 Pandemic the husband’s evidence is that he has successfully operated a number of different businesses during the marriage and I am satisfied he has the capacity to either re-establish his business or start a new business. The husband deposes that he and the wife adopted traditional roles during the marriage he being the breadwinner and the wife being the homemaker and caring for the children until the youngest child started school after which the wife would work in the business for half to one day a fortnight helping with office administration and bookkeeping. Although the wife says her involvement in the business was greater than described by the husband I am satisfied that although she has some income earning capacity that it is in all of these circumstances less than the husband’s is likely to be.
Given what is now a very small asset pool neither party will be left with significant assets and neither of them have significant superannuation entitlements.
Both parties alleged that the other had plundered business accounts and retained funds to which they were not entitled to the detriment of the other and which would otherwise have increased the value of the assets available for division. The wife’s case being that this justified an adjustment in her favour the husband’s case being that the funds taken or retained by the wife were a shield against her case that there should be an adjustment.
The husband for his part relied upon the wife having removed $76,050 from the B Pty Ltd account shortly after separation, that she had the benefit of the proceeds of sale of an apartment at Suburb P and approximately $200,000 of rental income from the Country O property. Although the wife concedes that she removed funds from the B Pty Ltd account and received rental income from the Country O property she disputes the amounts alleged by the husband. Although it is not possible to be totally certain doing the best I can on the evidence before me in my view it is unlikely that the wife received the rental income the husband asserts and I am not satisfied on the balance of probabilities that the wife ultimately retained or had the benefit of the $76,050 as he asserts.
In any event it is the wife’s primary case that the husband removed significantly more from the business. In relation to this issue I note that Wilson J found (at [164]), a finding which was not overturned on appeal as follows:
…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.
In all of the circumstances, the husband being in control of the businesses after separation, I am satisfied on the balance of probabilities that the husband has had access to significantly greater sums than the wife. Even if as the husband asserts the wife had removed $76,050 from the business account and had had the benefit of $200,000 of rental income, I am not satisfied on the balance of probabilities that this would offset the funds unaccounted for by the husband since separation.
Discussion
I am satisfied that there should be some adjustment having regard to the parties future prospects and the wife’s ongoing responsibility for the youngest child of the marriage. Again given the way in which the case was conducted it is difficult to make any findings as to what if any obligation the husband may have had to contribute to the support of the wife and the children in her care. Although I did not include the outstanding school fees and I am not in a position to make findings with respect to exactly what the husband’s obligation was to support the children since separation and whether he has met those obligations I am mindful that it is likely that the wife will have to meet the outstanding school fees and be responsible for the ongoing support of the youngest child. I am also mindful that although the wife received a partial property settlement those funds have now been depleted.
I am also satisfied, although it is impossible to place an exact figure on the funds to which the husband has had access it is now almost 7 years since these parties separated and these amounts are likely to be significant. I am also satisfied on the balance of probabilities that it is likely that the husband has prioritised his own requirement for funds over the obligations of the business to pay tax leaving an asset pool diminished by not insignificant tax liabilities. In my view this supports a further adjustment.
Although the husband deposed to the amounts he had spent on valuations for the purposes of this litigation neither party made any submissions with respect to this issue. In any event in circumstances where I am satisfied that the husband has had access to significant funds I am also satisfied that no adjustment needs to be made for these amounts he has paid.
Whilst I agree that there should be an adjustment and the asset pool is small I am not satisfied that it should be the 20% the wife seeks. As previously referred to this case has a lengthy and complex history which has added to the complexity of this hearing and ultimately the decision the Court is required to make. Doing the best I can on the evidence before me I am satisfied that there should be a 10% adjustment in the wife’s favour taking into account all of the matters referred to including the parties respective income earning capacities, the wife’s responsibility for the youngest child of the marriage, the funds to which the husband has had access which might otherwise have formed part of the asset pool available for division and the relatively small asset pool. I have also taken into account the fact that the value of the Country O Property has been diminished by the reduction in the value of the Country O Dollars in circumstances where I am satisfied that the wife was the likely to have resisted the sale.
On the basis of an asset pool of $483,645 this is an adjustment of $48,364.50 and a difference between their respective entitlements of $ 96,729. If the wife does not owe the ATO $70,000 as a result of her being a director of Z Pty Ltd the wife will be entitled to an additional $42,000 and the husband an additional $28,000. The wife has already had the benefit of the $98,350 she received as a partial property settlement and will retain her car and her household contents which have an agreed value of $15,000.
Effect of the Orders
It was the husband’s case and I accept that he needs an order for a fixed figure out of the sale proceeds of the Country O property in order to enforce the order for its sale in the event that the wife does not comply with the orders. The Court has addressed this issue on a number of occasions and in Goudarzi & Bagheri (No 2) [2017] FamCAFC 190 the Full Court of Thackray, Ryan and Forrest JJ said as follows:
47.We accept the proposition advanced by ground 5 that the fact that a single expert had valued the family home only twelve months earlier at $3 million less than it was valued at the date of trial demonstrated that it was far from certain that the property would sell for $8.48 million. Indeed, even without the earlier opinion, the vagaries of the real estate market means that there will always be uncertainty about the price at which a property will sell until completion of its sale. It is clear that if a lower sale price was realised, as feared by the wife (or indeed, a higher one), this would alter the overall division of the property in percentage terms, with the final result being not as her Honour intended.
48.The undesirability of making orders which do not account for the possibility of real estate selling for much more or much less than the values relied upon at trial has been consistently discussed in the authorities (Waters and Waters [1981] FamCA 19; (1981) FLC 91-019, Smith and Smith (1991) FLC 92-261; Docters Van Leeuwen and Docters Van Leeuwen (1990) FLC 92-148; Jarrott & Jarrott [2012] FamCAFC 29. Although these authorities encourage the use of percentages in orders providing for the division of the proceeds of sale of an asset, this should clearly be understood as meaning that the percentage employed should be the same as the overall proposed percentage distribution of the assets. The orders then need to provide for payment by one party to the other (from their share of the proceeds of sale) such adjusting amount as will bring about the desired outcome.
49.The framing of orders involving the sale of real property was recently considered by the Full Court in Trask & Westlake (2015) FLC 93-662 (“Trask”). In that case, the primary judge said that the wife should receive 60 per cent of the property, and, noting the division of the parties other property in specie, an order was made that the wife receive 87.43 per cent of the sale proceeds of real estate.
50. In allowing the appeal the Full Court in Trask said:
36.... It is within discretion for a judge to determine that orders should reflect a division that approximates 60%/40%. If that be the judgment, then small variations in the ultimate percentage received consequent upon the sale of property may not attract the intervention of this court.
36.Axiomatically, however, if that be the judgment, adequate reasons must make that abundantly clear, and all the more so because of the ubiquity of orders intended to reflect, with precision, a result expressed in percentage terms. It is that consideration which finds reflection in Noetel relied upon by the appellant husband. If orders are intended to reflect with precision the judgment expressed in percentage terms, those orders must acknowledge that the property may sell for a price different to the current estimated value.
....
41.His Honour’s percentage formula makes no allowance for the fact that, as the assumed values of the two properties rise and fall they bear a greater or lesser proportion of the total value of the pool. That is, using his Honour’s formula would produce the assessed percentage entitlement only if the new values bore the same proportion to the total value of the pool as the original agreed values. Axiomatically, if they have risen or fallen, and the values of the balance of the property remain the same (as is assumed) they do not.
Although counsel for the husband submitted that this case can be distinguished in my view it should be possible to make an order for a specific amount, which will be enforceable in Country O, allowing for a payment by one party to the other at settlement of the sale of the property adjusting for any variation in price and/or fluctuations in the exchange rate. I am satisfied that this is the appropriate course to adopt. This will maintain the percentages that I have determined to be just and equitable in this case. The order for the fixed amount however will be based upon the single expert’s valuation and the exchange rate as at the 25 March 2021.
It is also the case, as acknowledged by both parties, that the only source of funds to make the payment to the husband is the proceeds of sale of the Country O Property and notwithstanding the order for payment he will not be paid until settlement of the sale. Although there is already an extant order for its sale I propose to make orders as to the mechanics of the sale.
I also propose to make an order requiring the husband to pay the $150,000 he receives from the second named respondent directly to the ATO and /or the SRO and to provide the wife with proof of same. The orders will also require the husband and wife to do all acts and things and sign all documents necessary to withdraw any caveat lodged over the Country O Property.
The orders themselves given the husband’s case that an order should be made for a fixed payment and that tax debts need to be paid are complicated and settlement of the sale will similarly be complicated by the need to do justice and equity between these parties. That being said the orders I propose are intended to effect a 60/40 division of the asset pool based upon my findings and which I am satisfied is a just and equitable outcome in all of the circumstances of this case.
Given the complexity of the proposed orders I am going to adjourn the matter for mention before me so as to allow the parties to make submissions with respect to the form of the orders.
Proposed Orders
Sale of Country O Property
That by 4.00pm on 28 May 2021 the wife pay to the husband the sum of AUD$193,458 (“the husband’s payment”).
That upon receipt of the $150,000 or any part thereof owed to him by Mr R Keskin (the “second named respondent”) the husband forthwith pay all such monies received to the Australian Taxation Office (“ATO”) and/or State Revenue Office (“SRO”) to satisfy the husband’s liability for same in the asset pool and forthwith after said payment provide the wife with documentary evidence of the payment.
That in order to make the payment referred to in paragraph 1 of these orders the wife do all acts and things necessary and sign all documents that may be required to forthwith the Country O property situated at City P, Country O (“the Country O Property”) and for the purposes of the sale the following shall apply:
(a)That by 4.00pm on 9 April 2021 the wife shall nominate three (3) suitably qualified selling agents and shall forward those nominations, together with details of their fees and commissions, to the husband within 14 days of this order. Within seven (7) days thereafter the husband select one (1) of the nominated selling agents;
(b)The Country O Property to be sold in such a manner and upon such terms as recommended by the nominated selling agent in Country O;
(c)The reserve price and method of sale be agreed in writing between the husband and the wife and in default of written agreement shall be nominated by the nominated selling agent in Country O;
(d)The husband and the wife shall comply with all reasonable requests from the nominated selling agent in Country O; and
(e)Prior to or contemporaneously with the settlement of the sale or as my be required by the nominated selling agent in Country O the husband at his expense shall do all acts and things necessary and sign all documents required to remove any encumbrance registered against the Country O Property.
That on completion of the sale of the Country O Property the proceeds of the sale be applied as follows:
(a)Payment of the agent’s commission and advertising or other expenses, if any, payable on the sale;
(b)To discharge the mortgage or any encumbrance affecting the property;
(c)To pay AUD $70,000 to the Australian Taxation Office (“ATO) on account of the wife’s debt to the ATO as per the wife’s liability in the asset pool subject to the wife providing documentary evidence to the husband of her liability to the ATO not less than 14 days prior to settlement; and the balance to be applied as follows:
(i)The husband’s payment in the sum of AUD$193,458 to be paid to the husband save that in the event that the husband has received the AUD$150,000 from the second named respondent and not applied those funds to the payment of the ATO or SRO any amount outstanding to the ATO and SRO as per the husband’s liability in the asset pool be paid out of the husband’s payment; and
(ii)The balance to be paid to the wife.
If the Country O property sells for less than the sum of AUD$488,295 based upon the conversion rate as at the date of settlement then the proceeds of sale be are distributed as follows:
(a)Payment of the agent’s commission and advertising or other expenses, if any, payable on the sale;
(b)To discharge the mortgage or any encumbrance affecting the property;
(c)To pay AUD $70,000 to the Australian Taxation Office (“ATO) on account of the wife’s debt to the ATO as per the wife’s liability in the asset pool subject to the wife providing documentary evidence to the husband of her liability to the ATO not less than 14 days prior to settlement; and
(d)The balance to be applied as follows:
(i)The husband’s payment less the difference between the balance to be paid to be paid to the wife and 60% of the net proceeds of sale save that in the event that the husband has received the AUD$150,000 from the second named respondent and not applied those funds to the payment of the ATO or SRO any amount outstanding to the ATO and SRO as per the husband’s liability in the asset pool be paid out of the husband’s payment; and
(ii)The balance to be paid to the wife.
In the event that the wife does not produce evidence of her debt to the ATO as provided in paragraph hereof the sum of AUD$70,000 or the amount owing to the ATO is less than $70,000, the $70,000 or any balance be divided as follows:
(a) 40% to the husband; and
(b) The balance to the wife.
That unless otherwise specified in these Orders and save for the purposes of enforcing the payment of any monies due under these or any subsequent Orders:
(a)Each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in the possession of such party as at this date;
(b)Each party forgoes any claim they may have to any superannuation benefit and/or any interest in any trust or deceased estate that is payable to, belonging to, or owned by the other than pursuant to these orders;
(c)Money standing to the credit of the parties in any joint bank account is to be divided equally between the parties and upon division the account be closed;
(d)All insurance policies to become the sole property of the policy owner thereon;
(e)Each party be solely liable for and indemnify the other against:
(i)Any liability in their sole name including but not limited to credit cards;
(ii)Any liability encumbering any item of property to which that party is entitled pursuant to these orders; and
(iii)Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
That all extant applications otherwise be dismissed.
I certify that the preceding ninety-seven (97) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Macmillan delivered on 29 March 2021
Associate:
Date: 29 March 2021
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