Keyes and Keyes
[2009] FMCAfam 347
•17 April 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| KEYES & KEYES | [2009] FMCAfam 347 |
| FAMILY LAW – Property – litigation guardian and duty of disclosure – allegations of non-disclosure – contribution – s.75(2) considerations. |
| Family Law Act 1975, ss.75(2), 79 Federal Magistrates Court Rules 2001 rr.11.08 – 11.15, 24.03, 24.04 Evidence Act 1995 (Cth) ss.12, 13 |
| Hickey & Hickey & Attorney-General of the Commonwealth of Australia (Intervener) (2003) FLC 93-143 Norbis v Norbis (1986) 161 CLR 513 |
| Applicant: | MR KEYES |
| Respondent: | MS KEYES |
| File Number: | SYM 8002 of 2004 |
| Judgment of: | Altobelli FM |
| Hearing date: | 9 February 2009 |
| Date of Last Submission: | 10 February 2009 |
| Delivered at: | Sydney |
| Delivered on: | 17 April 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr Levy |
| Solicitors for the Applicant: | York Family Law |
| Solicitor-Advocate for the Respondent: | Mr Cumming |
| Solicitors for the Respondent: | Hamish Cumming Family Lawyers |
ORDERS
That within 9 days of Orders being made in these terms, the husband do all acts and things and sign all documents necessary to transfer to the wife, the husband's interest in the property known as Property B in the State of New South Wales, more particularly described as Lot [4] (“the Property B property”).
That contemporaneously with the Transfer of the Property B property, the wife:
(a)do all acts and things and pay all monies required to discharge the mortgage in favour of Queenslanders Credit Union;
(b)pay to Ms K the sum of $15,000; and
(c)pay to the husband the sum of $236,140.
That in the event that the wife omits, neglects or fails to comply with Order 2 hereof, then within a further 90 days, the parties do all acts and things and sign all documents necessary so as to effect a sale of the Property B property by private treaty for the best price reasonably obtainable in the following manner:
(a)list the Property B property for Sale by private treaty with such agent as the parties may agree to appoint, and, in default of agreement as to agent within 14 days, with such agent as the President of the Real Estate Institute of New South Wales shall appoint ("the Agent"), the costs of and incidental to such appointment to be borne equally by the parties as and when same fall due;
(b)the sale price at which the Property B property shall be listed shall be mutually agreed upon by the parties or, in the absence of agreement reached within 14 days of the date of these orders, shall be the price nominated as a fair market value by the agent;
(c)the parties shall instruct such solicitors as they agree upon to have the conduct of the sale on behalf of both parties or in the absence of agreement reached within 14 days of these orders, shall instruct such solicitor as may be appointed by the President for the time being of the Law Society of New South Wales ("the Solicitor"), the costs of and incidental to such appointment to be borne equally by the parties as and when same fall due;
(d)neither party may confer on any agent without the consent of the other party, any rights to any sole or exclusive agency in respect of the Property B property or to any commission.
That in the event Order 3 hereof comes into effect, then, on settlement of the sale of the Property B property, the proceeds of sale be paid in the following manner and priority:
(a)all costs and expenses of sale including legal costs and disbursements, and agent's commission;
(b)the amount required to discharge the Queenslander's Credit Union mortgage;
(c)in payment of the sum of $15,000 to Ms K;
(d)One-half of the remaining sale proceeds, together with interest on this amount calculated under the Family Law Rules as from 90 days after this order was made; and
(e)The balance then remaining to the wife.
That other than as herein provided, the husband and wife each be declared the sole legal and beneficial owners of all other items of property presently in their respective possession or control, including but not limited to, monies held in bank accounts, shares, superannuation, motor vehicles, furniture, furnishings and personal effects.
In default of the parties or either of them doing all acts and things and executing all such documents as are necessary to give effect to these Orders, a Registrar of the Family Court of Australia at Sydney be appointed pursuant to s.106A to execute all such documents in the name of the party in default and to do all such acts and things necessary to give validity and operation to the said orders.
IT IS NOTED that publication of this judgment under the pseudonym Keyes & Keyes is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYM 8002 of 2004
| MR KEYES |
Applicant
And
| MS KEYES |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application for property settlement under s.79 of the Family Law Act 1975 (as amended). The applicant husband is 68 years old. On 21 September 2007 an order was made by consent that his daughter
Ms K be appointed as the husband’s litigation guardian. The respondent wife is 64 years old. The husband and the wife commenced cohabitation in April 1968, married in February 1972, and divorced in March 2005. The date of separation was agreed to be 1 August 2003. They appear to have cohabited for about 35 years. The wife had a child from a previous marriage, Ms C, who is now 44 years old. For all practical purposes Ms C was raised as a child of both the husband and the wife. There are two other children, Ms K aged 38 (the litigation guardian) and Ms M aged 35.
Background and issues
The litigation guardian was appointed having regard to the evidence of the husband’s treating doctor, Dr D. His report dated 12 August 2007 stated that the husband suffers from alcohol abuse and alcoholic dementia which the doctor described as “irreversible”. This fact created significant difficulties in the conduct of this case. The husband could not give evidence at all. The litigation guardian’s evidence was very limited indeed, as will be discussed below. The focus of the case was the conduct of a hotel/motel business late in the marriage. As the wife was not directly involved in the business, there is very little direct evidence that she could give about these matters. In reality I found the evidence of the litigation guardian and the wife to be of very little assistance in determining the contentious issues. Both parties, however, produced documentation that assisted the court in understanding the contentious issues. From some of these documents I was able to construct the following background about the relevant business dealings of the parties, late in the marriage.
[C] 2000 Pty Ltd (called “[C]” in this judgment) was a company at all relevant times controlled by the husband. From 23 August 1998 to 15 July 2005 [C] held the principal lease of the [T] Hotel Motel in [X] (called in this judgment “the business”). [C] sub-leased the operation of the hotel to a related company [W] Pty Ltd (called “[W]” in this judgment) for a period of three years from 1 February 1999 to
31 January 2002. [W] was operated by the husband’s daughter and son-in-law (“the Smiths”) until January 2002 at which point in time they ceased to have any involvement in the business, and the husband took control. After the expiry of the sub-lease from [C] to [W] the hotel and motel continued to be in operation, largely managed and controlled by the husband, but it is far from clear which of the two companies was in fact operating the business. With the benefit of hindsight, it does seem as if the husband operated the business and for all practical purposes drew no distinction between his personal income and assets, and that of either of [C] or [W].
[C] ceased the operation of the business in July 2005 and was placed into liquidation on 4 May 2006. The Report as to Creditors dated
23 October 2006prepared by Nicholls & Co Liquidators states that the failure of [C] was attributable to the husband’s inability to manage the business due to his alcoholism, and an audit carried out by the Australian Taxation Office which identified a significant liability owing to them. I accept what the liquidator states in this regard. It is consistent with the rest of the evidence, oral or documents. Neither party to the case sought to cast any doubt on the veracity of this assertion.
The liquidator also states in the same report that as a result of his investigations, the husband allowed the financial affairs of [C] and [W] to become intertwined to the point that the two companies essentially traded as one. I accept that, for the same reasons as referred to above. Moreover the evidence before me also leads me to conclude that the husband’s personal financial affairs were intertwined with that of the companies, during the relevant period.
[W] also went into liquidation on 27 April 2006. Even though the same liquidator was appointed for [W] as for [C], I have less information about the operation and liquidation of this company.
The legal and factual issues in this case primarily relate to the acquisition, operation and subsequent sale by the husband and/or [C] and/or [W] of the [T] Hotel and Motel business.
There is an agreed balance sheet in this matter, except to the extent that the respondent wife asserts that the litigation guardian, on behalf of the husband, has failed to properly disclose the husband’s financial situation. In particular the wife asserts, either implicitly or explicitly, that the husband has not disclosed assets which were derived from the operation and sale of the business and all of its assets, and that therefore the property pool is not what it seems. The litigation guardian was placed in a difficult position because of her limited knowledge of the relevant and historical facts. Her position was that the documents before the Court tend to establish that there could not be any further assets. By contrast the wife, who in effect suffered the same lack of knowledge as the litigation guardian, asserted that the documents establish non-disclosure on the part of the husband.
One of the issues in this case is to ascertain the nature and extent of the litigation guardian’s obligation to ascertain the husband’s financial affairs, and then to properly disclose the same in these proceedings. For example, can a litigation guardian adopt a passive role, and merely produce what documents she has available to her in the proceedings? Or is the duty on the litigation guardian an active one which required positive enquiry followed by disclosure?
Another issue in this case is to determine whether the evidence does establish non-disclosure, and if so what are the consequences of this in this case?
The husband’s application was that he transfer to the wife his half-share in the former matrimonial home at Property B, subject to payment of $15,000 to the litigation guardian in her personal capacity, and to a discharge of the mortgage over the said property. The husband sought a payment to him of 50 percent of the remaining net equity. The wife agreed that $15,000 should be paid to the litigation guardian, and that she take over the mortgage, but otherwise seeks an order that the property be transferred to her. From the husband’s perspective, his application in fact gives him less than 50 percent of the net asset pool. From the wife’s perspective, her application provides to her almost 100 percent of the known asset pool.
From the husband’s perspective, he says that contribution till separation was equal having regard to the long period of cohabitation. If this is correct, and subject to determining the issue of non-disclosure, the husband would say that this justifies his claim. Out of abundant caution, however, he asserts that s.75(2) factors justify an adjustment in his favour.
From the wife’s perspective, her primary argument is that the pool of assets is incomplete and that the husband has not made proper financial disclosure. In any event she says that she has made a greater post-separation contribution to her work-related entitlements (superannuation, leave and a redundancy payment). Subject to this however, the wife did not seriously contend that contribution at the date of separation was anything other than equal.
The Issues
Having regard to the matters set out above, the issues in this case appear to be:
a)What were the duties of the litigation guardian in this case, and did those duties include the duty of disclosure?
b)Has there been non-disclosure on the part of the husband in this case? Has the litigation guardian discharged any duty of disclosure on her?
c)Having regard to the above issues, how should contribution be assessed?
d)Are there any relevant s.75(2) considerations operating in favour of either the husband and wife?
e)What is the just and equitable order to make on the facts of this case?
Applicable Law
The preferred approach to the determination of an application under s.79 of the Family Law Act is set out in a passage found in the Full Court’s decision in Hickey & Hickey & Attorney-General of the Commonwealth of Australia (Intervener) (2003) FLC 93-143 at 39.
The Full Court states that there are four inter-related steps:
a)Identify and value the property, liabilities and financial resources of the parties; and
b)Identify and assess the contributions of the parties and express them as a percentage of the net value of the property; and
c)Identify and assess the other facts relevant under s.79(4)(d)-(g) including s.75(2) and determine the adjustment (if any) to be made to the contribution entitlements at step two; and
d)Consider the effect of the above and resolve what order is just and equitable in all the circumstances.
One of the legal issues that arises is whether I should adopt a global or asset-by-asset approach to contribution. The authority in this regard is, the High Court’s decision in Norbis v Norbis (1986) 161 CLR 513 per Wilson and Dawson JJ at 534-5. It is clear from this statement of the law that either approach is available to me, in part or in whole.
My discretion in this regard should be exercised having regard to the facts of this case.
A significant issue in this matter was the alleged non-disclosure of the husband. Attempting to deal with non-disclosure often puts the other spouse to considerable difficulty with regards to investigating their financial affairs. The Full Court in Weir (1993) FLC 92-338 at 79,593–4 made the following statement regarding the duty to disclose and the Court’s powers where non-disclosure has been found:
This Court has pointed out in a line of cases leading up to the recent decision of the Full Court in Black and Kellner (1992) FLC 92-287, that it is the duty of a party involved in property proceedings in this jurisdiction to make a full disclosure of their financial affairs. See also Giunti and Giunti (1986) FLC 91-759, and Mezzacappa and Mezzacappa (1987) 11 Fam LR 957; (1987) FLC 91-853. It is clear enough from his Honour's findings in the present case that the husband had not done so and had in fact pocketed the proceeds of a substantial number of cash sales. It is obvious that in most cases of this nature it is difficult enough for the other party to establish that fact let alone establish the quantum of what has been taken.
It seems to us that once it has been established that there has been a deliberate non-disclosure, which follows from his Honour's findings in this case, then the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature…
We appreciate that this is something of a broad brush approach, but, as we have said, where there is clear evidence of non-disclosure as there was here, the Court should not be unduly cautious about making findings in favour of the other party. It has been said by one commentator (O'Ryan and Broadfoot, 5th National Family Law Conference Handbook, p 249) the failure to disclose undermines the whole process of adjudication of proceedings for a settlement of property in that the court is unable to identify the property of the parties, to properly assess contribution, or to properly assess s 75(2) factors.
The Agreed Balance Sheet
| Assets | Value |
| Property B | $510,000 |
| Wife’s Credit Union Account | $120 |
| Wife’s Toyota Corolla vehicle | $12,000 |
| Wife’s contents | $4,000 |
| Wife’s jewellery | $2,000 |
| Wife’s superannuation | $61,771 |
| Wife’s redundancy | $44,091 |
| Wife’s leave | $36,914 |
| Husband’s CBA account | $870 |
| Monies in trust for husband | $24,027 |
| Total Assets | $695,793 |
| Liabilities | |
| Mortgage over Property B to QCU | $37,720 |
| Wife’s car loan | $12,458 |
| Loan from Ms K | $15,000 |
| Wife’s tax on redundancy | $11,671 |
| Total Liabilities | $76,849 |
| NET ASSETS | $618,944 |
Issues relating to the litigation guardian
I record here that at the commencement of the hearing the solicitor for the wife, Mr Cumming, indicated that he would be asking the court to draw an adverse inference from the fact that the husband himself would not be giving evidence in this case. His submission was that s.12 of the Evidence Act 1995 (Cth) provided, in effect, that the husband was both competent and compellable, and there was no evidence before the court about his lack of capacity pursuant to s.13 of the said Act. In response Mr Levy, counsel for the husband, submitted that the report of the husband’s treating doctor dated 12 August 2007 (to which I referred above) was evidence about the husband’s lack of capacity. Moreover he pointed out that even the wife deposed to the husband being an alcoholic in her affidavit.
Sections 12 and 13 of the Evidence Act 1995 state as follows:
S.12 Except as otherwise provided by this Act:
(a) every person is competent to give evidence; and
(b) a person who is competent to give evidence about a fact is compellable to give that evidence.
S.13 (1) A person is not competent to give evidence about a fact if, for any reason (including a mental, intellectual or physical disability):
(a) the person does not have the capacity to understand a question about the fact; or
(b) the person does not have the capacity to give an answer that can be understood to a question about the fact;
and that incapacity cannot be overcome.
(2) A person who, because of subsection (1), is not competent to give evidence about a fact may be competent to give evidence about other facts.
(3) A person who is competent to give evidence about a fact is not competent to give sworn evidence about the fact if the person does not have the capacity to understand that, in giving evidence, he or she is under an obligation to give truthful evidence.
(4) A person who is not competent to give sworn evidence about a fact may, subject to subsection (5), be competent to give unsworn evidence about the fact.
(5) A person who, because of subsection (3), is not competent to give sworn evidence is competent to give unsworn evidence if the court has told the person:
(a) that it is important to tell the truth; and
(b) that he or she may be asked questions that he or she does not know, or cannot remember, the answer to, and that he or she should tell the court if this occurs; and
(c) that he or she may be asked questions that suggest certain statements are true or untrue and that he or she should agree with the statements that he or she believes are true and should feel no pressure to agree with statements that he or she believes are untrue.
(6) It is presumed, unless the contrary is proved, that a person is not incompetent because of this section.
(7) Evidence that has been given by a witness does not become inadmissible merely because, before the witness finishes giving evidence, he or she dies or ceases to be competent to give evidence.
(8) For the purpose of determining a question arising under this section, the court may inform itself as it thinks fit, including by obtaining information from a person who has relevant specialised knowledge based on the person's training, study or experience.
I ruled at the time that the issue of the husband’s competence to give evidence was in fact decided by Federal Magistrate Sexton on
21 September 2007 when she made the order (by consent) appointing the litigation guardian. The said report was accepted into evidence on 21 September 2007, and the application was in fact consented to. It is now not appropriate for the wife to challenge, in effect, the implied (if not express) finding of lack of competence made by Sexton FM unless there was further evidence going to that issue before the court. It seems to me that the court cannot appoint a litigation guardian unless it is reasonably satisfied that a person lacks capacity. Accordingly no adverse inference can be drawn about the fact that the husband did not give evidence personally. However the doctor’s report was admissible on the issue of the husband’s competence to give evidence, but for no other purpose including, for example, s.75(2) factors.
In the Federal Magistrates Court, the appointment of a litigation guardian is governed by Division 11.2 of the Federal Magistrates Court Rules 2001. The relevant rules are 11.08 to 11.15.
11.08 Person who needs a litigation guardian
(1) For these Rules, a person needs a litigation guardian in relation to a proceeding if the person does not understand the nature and possible consequences of the proceeding or is not capable of adequately conducting, or giving adequate instruction for the conduct of, the proceeding.
(2) Unless the Court otherwise orders, a minor in a proceeding is taken to need a litigation guardian in relation to the proceeding.
11.09 Starting, continuing, defending or inclusion in proceeding
(1) A person who needs a litigation guardian may start, continue, respond to or seek to be included as a party to a proceeding only by his or her litigation guardian.
(2) The litigation guardian of a party to a proceeding:
(a) must do anything required by these Rules to be done by the party; and
(b) may do anything permitted by these Rules to be done by the party.
11.10 Who may be a litigation guardian
A person may be a litigation guardian in a proceeding if he or she is an adult and has no interest in the proceeding adverse to the interest of the person needing the litigation guardian.
11.11 Appointment of litigation guardian
(1) The Court may, at the request of a party or of its own motion, appoint or remove a litigation guardian or substitute another person as litigation guardian in a proceeding in the interests of a person who needs a litigation guardian.
(2) A person becomes a litigation guardian if he or she consents to the appointment by filing an affidavit of consent in the proceeding.
(3) The Court may remove a litigation guardian at the request of the litigation guardian.
11.12 Authorised persons
(1) If a person is authorised by or under an Act to conduct legal proceedings in the name of or for a person who needs a litigation guardian, the authorised person is entitled to be the litigation guardian in any proceeding to which the authority extends.
(2) The Attorney‑General may appoint in writing a person to be an authorised person for the purposes of this rule, either generally or for a particular person.
(3) An authorised person becomes the litigation guardian of a person who needs a litigation guardian in a proceeding if the authorised person files an affidavit of consent in relation to the person.
11.13 Notice of becoming litigation guardian
A person appointed as the litigation guardian of a party to a proceeding must, as soon as practicable after the appointment, give notice of the appointment to each other party and any independent children’s lawyer in the proceeding.
11.14 Costs and expenses of litigation guardian
The Court may make orders for the payment of the costs and expenses of a litigation guardian (including the costs of an application for the appointment of the litigation guardian):
(a) by a party; or
(b) from the income or assets of the person for whom the litigation guardian is appointed.
11.15 Service
(1) A document required to be served by hand on a person who needs a litigation guardian must be served:
(a) on the person’s litigation guardian for the proceeding; or
(b) if there is no litigation guardian — on a person who is entitled under subrule 11.12 (1) to be the person’s litigation guardian for the proceeding; or
(c) if there is no‑one under paragraph (a) or (b) — on an adult who has the care of the person.
(2) For paragraph (1) (c), a superintendent or other person in direct charge of a hospital or nursing home is taken to have the care of a person who is a patient in the hospital or nursing home.
The court’s power to appoint a litigation guardian in r.11.11 must, it seems to me, only be exercised in the context of a finding made under r.11.08 i.e. that “a person needs a litigation guardian… if the person does not understand the nature and possible consequences of the proceeding or is not capable of adequately conducting, or giving adequate instruction for the conduct of, the proceeding”.
Was the litigation guardian under the same duty of disclosure as any other litigant? The answer must be in the affirmative. Rule 11.09(2) requires compliance with mandatory obligations under the Rules. Part 24 of the Rules deals with financial matters such as the present case, and r.24.03 deals with full and frank disclosure. Rule 24.04 deals with production of documents. In this regard the litigation guardian must take an active rather than a passive role otherwise the court may be asked to infer or find that there has been non-disclosure by the party represented by the litigation guardian.
The Full Court of the Federal Court has considered the law relating to the appointment of a litigation guardian in L v Human Rights and Equal Opportunity Commission [2006] FCAFC 114 (12 July 2006), and made some observations about Division 11.2 of the Federal Magistrates Court Rules in the joint judgment of Black CJ, Moore and Finkelstein JJ:
23 The law relating to the appointment of a litigation guardian for a person who lacks the requisite capacity to conduct litigation or the capacity to give instructions to a person conducting litigation on their behalf, has a long history. Its origins can be traced back to the prerogative power of the Crown to protect those in need of protection on account of mental incapacity.
24 The law developed in the context of property disputes. In 1891, Kekewich J observed that it was ‘undoubted’ that the Chancery Division of the High Court had jurisdiction ‘to protect the estates of those who, though not found lunatic, are yet incompetent, by reason of a weakness of intellect, to take proceedings themselves – that is to say, to instruct their solicitors to take proceedings on their behalf’: Howell v Lewis (1891) 61 LJ Ch 89 at 89.
25 There are valuable statements about the court’s power to appoint litigation guardians in Masterman-Lister v Brutton & Co (Nos 1 and 2) [2003] 1 WLR 1511. In substance, the purpose is to protect plaintiffs and defendants who would otherwise be at a disadvantage, as well as to protect the processes of the court. Kennedy LJ said (at [31]):
‘In the context of litigation, rules as to capacity are designed to ensure that plaintiffs and defendants who would otherwise be at a disadvantage are properly protected, and in some cases that parties to litigation are not pestered by other parties who should be to some extent restrained’.
Chadwick LJ (at [65]) said:
‘The pursuit and defence of legal proceedings are juristic acts which can only be done by persons having the necessary mental capacity; and the court is concerned not only to protect its own process but to provide protection to both parties to litigation which comes before it. A defendant is entitled to expect that he will not be required to defend proceedings brought against him by a person of unsound mind acting without a next friend’.
26 There is a presumption of competence unless and until the contrary is proved; that is, there is a presumption that a litigant of full age is competent to manage his or her affairs: Masterman-Lister at [17] (Kennedy LJ); Murphy v Doman [2003] NSWCA 249; (2003) 58 NSWLR 51 at [36] (Handley JA). When it is alleged that a person is incompetent, the onus of proof is on those so asserting: Masterman-Lister at [17] (Kennedy LJ); Dalle-Molle v Manos [2004] SASC 102; (2004) 88 SASR 193 at [17] (Debelle J); Andreapoulou v Nowak [2002] VSC 462; Pratt v Dickson [2000] QSC 314.
27 The means by which the court will determine whether a guardian should be appointed can vary from case to case. In Masterman-Lister, Kennedy LJ said (at [29]) that the decision as to capacity rests with the court but in almost every case the court would need medical evidence to guide it. Earlier, Kennedy LJ had observed (at [17]):
‘even where the issue does not seem to be contentious, a district judge who is responsible for case management will almost certainly require the assistance of a medical report before being able to be satisfied that incapacity exists’.
Cases such as Hutchinson v Gaitazis (1980) 25 SASR 30, AJI Services Pty Ltd v Manufacturers’ Mutual Insurance Ltd [2005] NSWSC 709 and Levey v Levey (1979) 11 BCLR 97 (SC) were decided on medical evidence. There will, however, be cases where no medical evidence is available as, for example, when a litigant refuses to submit to a medical examination. And there will be cases where the lack of capacity is so clear that medical evidence is not called for. In those cases, and perhaps others, the court is entitled to rely on its own observation to make an assessment about the capacity of a party: see, for example Murphy v Doman at [37] (Handley JA); AJI Services Pty Ltd v Manufacturers Mutual Insurance Ltd at [57] (Bell J).
32 For the future, some general comments about the operation of Div 11.2 may be of assistance. In proceedings in which the need for a litigation guardian is a potential issue and the party whose capacity is in question is represented by a legal practitioner, the discharge of that practitioner’s duties to their client and to the Court should ordinarily mean that a litigation guardian will be appointed if, within the meaning of r 11.08(1) the client in fact ‘needs’ one. If the concern arises on the part of a represented party in an opposing interest, that party may be expected to raise the issue before the Court. In either case, it may be expected that, as a practical matter, medical evidence bearing upon the issue of ‘need’ will be placed before the Court.
33 Where, as here, the applicant is unrepresented and the respondent does not wish to raise any point about competence but the court nevertheless has serious doubts about the applicant’s capacity, the court should consider of its own motion the factual issue of ‘need’. In such a case the court should, of course, raise the issue squarely and should give the applicant and any other affected party a proper opportunity to be heard and to place relevant material before the court. Whether, in the absence of medical evidence as to capacity, the court could be satisfied of the ‘need’ such that it should act on its own motion under r 11.11(1) to appoint a litigation guardian will of course depend upon the circumstances of a particular case.
These comments are consistent with the views I have expressed above.
The litigation guardian’s affidavit was sworn on 27 January 2009. It annexes a considerable quantity of documents. Much of her evidence is derived from information contained in those documents, and, indeed she acknowledges that she was not present during some of the relevant and important meetings and conversations that must have taken place in relation to the acquisition, financing, operation and subsequent disposal of the hotel/motel business. She deposes to conversations with her mother and father which were not objected to or challenged in evidence. It is clear from her evidence that the operation of the business caused a strain in the relationship between the husband and the wife. It is also clear that the business relationship between [C] and [W], and between the husband and his daughter and her husband (the Smiths), broke down and that is why he took over the business on his own. None of this is in contention.
So far as disclosure is concerned, however, the litigation guardian’s cross-examination revealed that she made no enquiries about the correctness of the Report as to Affairs of [C] even though she personally signed it as the husband’s attorney pursuant to a Power of Attorney. She made no enquiries about the state of affairs of the business. Even though she had a power of attorney from her father she did not consider her role to be involved in the management of her father’s affairs, even thought she knew him to be an alcoholic at the time. She believed that the responsibility for management was on her father’s solicitors and accountants. In her evidence she indicated that she did have knowledge about some of the issues confronted by her father, the husband in these proceedings. She had been to the accountants in [X] with her father. She went with him to see his solicitors. She was aware of the liquidators and of their appointment.
The relevance of this evidence is this. By the time the litigation guardian was appointed she was certainly no total stranger to her father’s financial affairs. At the very least she knew who his major advisers were. Thus she was cross-examined about what enquiries she had made with the accountants, liquidators and even her father, after she was appointed litigation guardian. The answer was none with accountants and liquidators, and nothing relevant as to disclosure with her father. She said that her evidence about disclosure was based entirely on documents prepared by her lawyers over the week preceding the hearing. She had made no enquiries at all prior to the week immediately before the hearing because she didn’t think it was necessary to do so. The litigation guardian thought that “on liquidation it was all over…”. She didn’t ask her father whether he received anything from the liquidation. All she knows about her father’s financial circumstances is that he had a bank account into which his pension is deposited. In cross examination she agreed that she did not ask her father about his bank accounts. She agreed that she did not talk to her sister or her sister’s husband (the Smiths) about their involvement in the business through [W].
From the litigation guardian’s evidence I conclude that she perceived herself as playing an entirely passive role as litigation guardian. If she had a duty of disclosure, she seemed very much oblivious to what this meant. The court is far from satisfied that she had undertaken the enquiries that were reasonable let alone necessary in the context of a case where non-disclosure seems to have been an issue from well before the hearing date itself. Of course she did produce documents to the court but, as will be seen below, they merely raised more questions rather than provide clear answers. I find the litigation guardian to have been quite ambivalent as regards her duty of disclosure. Whether, at the end of the day, this makes any difference remains to be seen.
Non-disclosure?
The wife asserts that the husband, through his case guardian, has not given adequate disclosure to the court, particularly as regards the financial circumstances surrounding the acquisition, operation and later disposal of the hotel/motel business. A close examination of the evidence is necessary in this regard.
The evidence indicates that the business at [X] was purchased through [C] after the husband had retired. Initially the business was operated by the husband and wife together (they having moved from Sydney for this purpose), as well as the other daughter and son-in-law (the Smiths). By about 2000 the wife returned to Sydney, probably because of a falling-out with the others. At some time the husband also moved back to Sydney, though he returned to operate the business on his own account in 2001 or 2002 when the Smiths’ left the business.
The litigation guardian gives no evidence in her affidavit about how the business was purchased. The wife gives some evidence in this regard in her affidavit, but it is all prefaced by the words “I believe…” and the source of the knowledge is not provided. The wife believes that the purchase price of the business was either $250,000 or $350,000 and that it was funded by the husband’s superannuation entitlement of approximately $400,000 that he received when he retired from [omitted] in 1994.
The documents produced by both parties provide some more information. Thus, eg, the [C] Pty Ltd Superannuation Fund Financial Accounts for 30 June 1998 refer to benefits transferred into the fund of $171,791.89 that year. The tax return by the Super Fund for that year is consistent with that. The 1999 tax return depreciation schedule refers to plant and equipment that is also consistent with investment of the said sum in the business. The timing of these transactions is consistent with the assertion that the husband used $171,791.89 from his superannuation as capital to establish the business, and I so find.
There is a document entitled “[W] Balance Book as at 21/01/99”. This document refers to a number of relevant dealings as noted below:
a)Between August 1998 – January 1999 [C] loaned to [W] a total of $117,744.08 in cash.
b)[W] then spent $56,256.50 in hotel repairs, maintenance and refurbishment expenses. There is a very close similarity between these items and the items listed in the [C] Super Fund 1999 tax return depreciation schedule. Thus, for whatever reason, [C] advanced cash to [W] which was then used in part to acquire plant, equipment, fixtures and fittings, and to refurbish the business premises all of which appears to be owned by, or at least for tax purposes be in the name of [C].
c)The [W] balance book then refers to some other expenditure by [W] but for the benefit of [C], as the expenditure reduces the liability to [C]. Thus, eg, it refers to a vehicle leased, and also to a loan repayment of $2,500.
A letter dated 2 December 1998 on the letterhead of [T] Hotel/Motel, [W] Pty Ltd, signed by [Smith] provides some explanation of the $2,500. The letter appears to be addressed to the husband and states as follows:
Dear [Mr Keyes],
[W] Pty Ltd will pay [C] 2000 Pty Ltd a loan repayment of $2,500 each month plus 25% of net profit at the end of each quarter of net profit at the end of each quarter.
A formal agreement between [C] 2000 Pty Ltd and [W] Pty Ltd will be drafted in the near future.
Clearly [C] loaned to [W] money that was to be repaid at the rate of $2,500 each month, plus 25 percent of the net profit at the end of each quarter. The [W] balance sheet referred to above suggests that the loan in question was for $117,744.08. It is not clear whether the $2,500 is a repayment of principal, or principal plus interest though arguably it is principal as the profit share could represent the return on the investment.
There is another letter from [W] to the husband, dated 10 May 1999, and again on the [T] Hotel/Motel letterhead. It paints a picture of a business that was already struggling, though the authors of the letter remained optimistic. In the present context it sheds light on the nature of the financial arrangement between [C] and [W], and the benefits received or to be received by the husband and/or [C]. The bottom of page two of the letter states:
You have no reason for the concern which seems sometimes apparent when you talk with us. As I said earlier, we are meeting our commitments. Working on a per annum basis, on current figures, (in these lean times, which can only improve), you are receiving approximate:-
$24,000.00 Loan Repayment
$6,000.00 Rent (this amount is clear of and above the amount given to the Shields)
$6,640 Vehicle Lease
$8,000 Approximate Black (working on current figures)
$44,640.00 Plus your nest egg of the money tied up in your Lease with [L] P/L and the various assets accrued by [C] in the Hotel, which will all be realised and/or increased at re-sale.
This amount is currently without profit share at this stage and approximated on current figures. This picture will improve with the growth of the success of the business.
Thus it seems that, at least from the perspective of [W], the husband and/or [C] was receiving benefits of $44,460 per annum. It seems as if [W] had leased a car for the benefit of the husband. It also seems as if the husband was receiving approximately $8,000 yearly by way of cash, which, I infer, is the reference to “Black”.
The last document that provides any insight into the early years of the operation of the business is a letter dated 29 August 1999 from the husband personally addressed to the Smiths personally. It is possible, but it is by no means clear, that it is the husband’s response to the [W] letter dated 10 May 1999. A number of important matters emerge from this letter:
a)Point one of the letter says:
The agreement provides for a monthly repayment of $2,000 in reduction of the $60,000 loan. By your letter dated 2 December, 1998, you have unilaterally increased this repayment to $2,500. If the extra $500 is intended as interest, please specify what rate you calculate this to be. I note that under clause 2(d) of the sub-lease I am entitled to 8% interest.
Thus the husband refers to a $60,000 loan but it is unclear from this letter whether it is $60,000, in addition to the $117,744.08 advanced to [W], or whether it is an approximation of the balance owing referred to in the [W] balance sheet referred to above. This is significant because it helps to identify the precise quantum of the husband’s initial investment in the business. I think it is more likely that the $60,000 was in addition to the $117,744.09. The approximate correlation between the amount outstanding in the balance sheet at 25 January 1999 and the reference to $60,000 is probably coincidental. The [W] balance sheet as at either 10 May 1999 or 29 August 1999 (the dates of the letters referred to above) would have been different because of the accrual of both vehicle lease payments and loan repayments.
b)Point three of the letter states:
I am entitled to 33.3% of the profits of the Hotel. You contend that there is no profit. How can this be so? How did you make such an error in judgement [sic] that a projected large profit is actually a loss. Where is the money going?
Clearly as at August 1999 the business was struggling, at least if one accepts the assertion that there was no profit to share as between [W] and [C].
Summarising the evidence and findings at this stage I find that:
a)[C] (and therefore the husband) through its superannuation fund invested $171,791 into the business.
b)At least $117,744 of this investment was characterised as a loan from [C] to [W] and was used as to $56,256.90 for repairs, maintenance and refurbishment.
c)There was a separate loan of $60,000 from either [C] or the husband to [W], on top of the $117,744.
d)It is unclear whether the $60,000 loan is in addition to the initial investment of $171,791 by [C] through its super fund, or was part of it.
The next document that provides a clue as to the purchase of the business is the Minutes of a Meeting held on 8 April 2005 at which the husband and a number of others attended. The meeting was held to negotiate the husband’s exit from the business, on the basis that the business would be sold to the lessors of the premises from which it was conducted. The minutes record:
EK: Will not accept $100,000. Wants the $100,000 payment plus the $100,000 that is referred to in the lease as the end of lease payment relating to the condition of the building, plant, etc.
RS: Advises this is not acceptable. EK would then be getting back the $200,000 that he originally paid for the lease.
This creates a strong impression that, in addition to anything else that the husband or [C] may have paid after the business was acquired, the husband or [C] paid $200,000 to acquire the leasehold from which the business operated. Under the circumstances this is the only evidence before me on this point, and it was not challenged. I find therefore that the husband or his company [C], paid $200,000 to acquire the leasehold from which the [T] Hotel/Motel was operated.
This means that the husband’s total investment in acquiring and establishing the business was:
$200,000 for the leasehold
$171,791 invested through the superannuation fund
$371,791
It is possible that there was a further $60,000 loaned to [W].
What was the source of these funds? The husband through his litigation guardian asserts it was his superannuation. The wife agrees this was the source but raises the possibility either that there were other funds needed, for example for stock, the source of which is not apparent. On another scenario, however, not all of the husband’s superannuation is accounted for, if eg his superannuation was $400,000 and the $371,791 does represent all of the purchase and establishment costs of the business? I note that there is no evidence of any borrowings by either of the companies on the security of company charge evidenced in the ASIC searches.
I find that the evidence indicates on the balance of probabilities that the acquisition and establishment costs of the business was not less than $371,791 all of which was provided by the husband through his superannuation funds. In this regard the wife’s estimate of the husband’s superannuation entitlement on his retirement from [omitted] (approximately $400,000) was probably correct, thought I am surprised at the absence of documents to provide more certainty as to this.
Pausing now to consider contribution under s.79 as at the time of the establishment of the business, it must surely be equal as the parties had been together for over 30 years, and there is no evidence to indicate anything but equality of contribution. There is no presumption to this effect, of course, but equality of contribution at this time must be the common sense conclusion on the evidence.
The litigation guardian asserts that once the business was established the husband invested two further significant amounts in the business: the proceeds of an inheritance received by him, and a further loan. The wife deposes to the husband having received an inheritance of $48,323 from his late mother’s estate. I find it curious that she does not depose to the source of her knowledge of this fact, but knows the precise amount. The figure is broadly consistent with the evidence the litigation guardian gives. The [C] bank statement shows a deposit of $48,323 into its account on 2 August 2002. I find that this is the inheritance in question and that the husband invested it as working capital for the business.
The wife herself gives evidence of the mortgage advance of $50,000, secured over the Property B family home, and used for the purposes of the business. I accept this evidence. I find it highly unlikely that the husband would have made these further investments into the business in 2002 unless it were necessary to do so. The bank statements and cheque butts for the period 14 October 2002 to 7 March 2003 do support the litigation guardian’s submission that all of these capital injections were used for business purposes.
The wife then gives evidence about the sale by the business of poker machines in 2003 and 2004 for amounts of $134,169 and $7,300 respectively. She asserts the belief that these amounts were either paid to the husband or to the [C] superannuation fund. I am satisfied, however, that the evidence indicates that these funds were all either paid to the [C] account, or used to pay [C] creditors. Both sale transactions are described in the letter to the husband dated 28 October 2005 from the Australian Taxation Office. The sale proceeds from the first sale were deposited into the [C] account as is plainly evident from the bank statements. The second sale proceeds are referred to in the letter to the husband from Roberts and Morrow dated 6 September 2005, and again the use of these funds to pay creditors is plainly evident.
The wife also asserts that she does not know how the sale proceeds of the business were in fact used, and the inference is that the husband has failed to disclose the same. However the evidence indicates quite to contrary.
Settlement of the sale of the [T] Hotel Motel took place on 22 July 2005. The settlement statement indicates that $103,036.48 was received. This was the consideration for the sale of the lease. The sale is obviously the culmination of the negotiations that are recorded on the Minutes of Meeting dated 8 April 2005, and a Heads of Agreement dated 7 April 2005. These documents indicate that [C] was to receive $100,000 as payment for the leasehold interest, all plant and equipment and hoteliers licence but subject to adjustment of outgoings such as gaming duty. The sale price did not include stock, however, which was to be separately valued.
The letter to the husband from Roberts & Morrow dated 6 September 2005 indicates that $34,393.96 was received for stock. That letter also indicates that all of the sale proceeds from the sale of the business, with the exception of $10,000 paid to the husband’s family law solicitor, were paid to Roberts & Morrow and then used to pay some but not all of the business and personal creditors of [C], [W] or the husband. Indeed the final page of that later suggests that the known outstanding liabilities were about the $59,843 and that further liabilities were expected once the tax office completed its audit of the business I so find.
Summarising the findings at this stage, none of the wife’s contentions about non-disclosure arising out of the husband’s two further injections of capital into the business, the loan of $50,000, the sales of the poker machines and the ultimate sale of the business, are shown to have any basis on the evidence before me. To this point, therefore, the wife has not been able to establish non-disclosure by the husband. There is every indication from the documentary evidence that the business was struggling, particularly under the management of the husband who was clearly suffering from the effects of being an alcoholic. With the benefit of hindsight it could be said that good money was thrown after bad, but no waste argument was run on behalf of the wife, and the evidence would not support it in any event. Often the optimism of small business owners has no end, and the promise of El Dorado is always around the next corner. It does not necessarily make it wasteful in a family law sense to invest more money in a struggling business venture.
Perhaps the wife’s strongest evidence in support of her claim of non-disclosure is the correspondence between the Australian Taxation Office and the husband.
The letter to the husband dated 28 October 2005 advises him that the result of the audit of his business activity statements for the period 1 January 2002 to 30 June 2005 would be that he was liable for an additional $53,183.50 GST and penalties arising out of the operation of [C]. The detailed breakdown of this liability is not relevant for present purposes, but the evidence advanced by the ATO in support of its proposition that the husband had failed to take reasonable care is quite daunting. In some respects it does seem, however, that the husband had poor professional advice.
Another letter of 28 October 2005 relates to the additional BAS and penalties payable by [W] – in this case a total of $93,540. The audit discovered quite significant discrepancies between the day sheets and weekly summaries of the business, and the BAS documents. The overall result showed that over the 10 quarter periods 31 March 2002 – 30 June 2004 sales had been under-reported by a net of $556,394. It is very curious to observe, however, that in two of those quarters the BAS records over-state taxable sales, rather than under-state, which might provide an insight into how poorly run the business really was. In addition input tax credits were revised downwards and the company’s 2003 income tax return income was found to have under-reported income by $137,597. Curiously, though, the audit found accountancy errors which resulted in a post-audit increase in total expenses. The company’s revised net profit was found to be $49,247, instead of the reported loss of $32,404.
The letter of 28 October 2005 provides a revealing insight into the operation of the business. I set out extracts from pages 9 and 10 of the same:
We consider the following factors and evidence relevant in assessing your behaviour:
· The GST shortfalls in your BASs resulted from a combination of the systemic error in your sales records and BAS preparation errors.
· When Mr Keyes took over the running of the hotel and the company in January 2002, there was an apparent absence of the company’s records from the previous operators. Following this breakdown of the relationship with his family members, he sought assistance and advice from people experienced in hotel management to set up records and procedures. He heeded their advice and employed a bookkeeper to administer this system after they left.
…
·
All your daily till records from the hotel operations have not all been kept as required under the record-keeping legislation. As well as this, the daily till records that were kept were not stored in a secure place. As a result many of these were destroyed by dampness and/or the pet Labrador dog. Those remaining were muddy and/or mouldy and kept in a tangled mess in a few boxes.
Mr Keyes stated he believed the daily and weekly summary sheets were sufficient to record your sales.
· It is accepted that the bookkeeper’s procedure of only recording the net sales into the company’s MYOB system after cash payments had been made from the daily takings was not deliberate. The total sales amounts are recorded in the daily and weekly summary sheets. This incorrect recording practice then became a systemic error in the records from this time until our visit in October 2004.
· Mr Keyes relied on the accountant to calculate and prepare the quarterly BASs, and sent him the records he requested including the daily and weekly summary sheets. The accountant reported the sales in the BASs directly from the MYOB reports. It is apparent that the accountant never reconciled these summary sheets for any of the 10 quarterly BASs during this 2 ½ year period, as the under-recorded sales would have been obvious in the eight quarters where there was a shortfall. The accountant did not have adequate controls or checking procedures in place to ensure these errors did not occur, especially over such a lengthy period of time.
· As well as this systemic error, the accountant also made other errors when calculating and preparing the BASs including both under-reporting and over-reporting GST on sales. He was unable to provide any explanations or documentary evidence for these incorrectly calculated BASs.
· The accountant also prepared the 2002 and 2003 Income tax Returns (ITRs). There were several errors in these ITRs and the associated Financial Statements, some of which were very basic and/or careless. There were no reconciliations undertaken between the BASs and the ITRs. No tax shortfall has resulted from these ITR errors, as your are still in a net loss position, but the net loss has been substantially reduced.
· The accountant ceased to act for you after the extent of some of these errors became apparent during the course of this review. The new accountant in [X] also found his dealings with the former accountant unsatisfactory, and found it difficult to obtain any information or records from him.
· It is expected that an accountant would have the skills, knowledge and competence to prepare correct returns and statements, and to have adequate procedures in place to ensure they are correctly prepared. The accountant has demonstrated a careless disregard for the standards expected from a professional in this field.
· You are vicariously reliable for the accountant’s careless actions.
It seems as if the poor management of the business was exceeded by even poorer book-keeping and advice from a professional accountant. At the end of the day, the consequences of all of this were suffered by the husband. Just over three months after settlement of the sale of the business, the husband was confronted with liabilities to the ATO totalling $146,723. The husband’s accountant had anticipated less than half of that.
The liquidation of [C] commenced on 4 May 2006 and was a creditor’s voluntary liquidation. Unsecured creditors totalled $69,438.23 with no dividend payable. The Report to Creditors is dated 23 October 2006. The company’s failure was attributed to the husband’s inability to manage the business due to his alcoholism and an audit carried out by the ATO which identified a significant liability owing to it. The liquidator reports that the company was not trading viably. Its only asset was money owed to [C] by [W]. It was the liquidator’s view that the company had been deteriorating financially for a number of years, and that its financial affairs appear to have been mismanaged. It is possible that the husband traded whilst [C] was insolvent.
The liquidation of [W] commenced on 26 April 2006 and also was a creditor’s voluntary liquidation. The creditor listing for 8 May 2006 indicates total creditors of $180,620.81. No dividend was payable.
The letter to Nicholls & Co from Roberts & Morrow dated 21 July 2006 records that the husband was in rehabilitation (presumably for his alcohol addiction) by the time that the companies went into liquidation, and that it was his daughter, the litigation guardian, who completed all the relevant forms.
Thus both companies owed creditors a total of $250,059.04.
With this evidence as background the wife asserts that the husband has not properly disclosed his income from the business, which was more profitable than he asserted. Moreover he had not established that the cash injections were necessary. Particular reliance is placed on a document entitled “[T] Hotel/Motel Post Adjustments”, a document that seems to have been prepared sometime after 31 March 2005. The wife does not indicate the source of her knowledge about this document, or who prepared it and in what circumstances. The document sets out what purports to be details of income, gross profit, expenses and net profit for 2002, 2003, 2004 and to 31 March 2005. It shows net profit respectively of $101,811, $127,876, $161,670 and $228,754. The documents suggest that gross profit from trading grew from 32.16 percent in 2002 to 66.66 percent by 31 March 2005. Even a cursory examination of this document indicates that the expenses for the first quarter of 2005 are quite disproportionately low compared to previous years, and thus the net profit figure is unreliable.
The timing of this document suggests it was prepared in the context of a foreshadowed sale of the business. Other documents indicate that the deposit on the sale of the business was paid on 31 May 2005, so the financial statements were prepared since the end of the first completed quarter immediately before the sale. But is this document a reliable indication of the profitability of the business between 2002 and
31 March 2005? If this document were an accurate record of profitability, it would not explain why poker machines had to be sold, and the husband make two capital injections into the business, all of which are established in the evidence. The document is also impossible to reconcile with the results of the tax audit of [W] contained in the ATO letter to the husband dated 28 October 2005 which, it should be remembered, was conducted on the basis of daily and weekly summary sheets provided by the husband.
The document entitled “[T] Hotel/Motel Post Adjustments” is therefore unreliable. Its context suggests it was prepared in contemplation of a sale, and so there may have been motivation to exaggerate profitability. In the absence of further information about this document I cannot rely on it.
I am not ruling out the possibility that the husband had access to cash during the period that he operated the business. But I cannot quantify this, and I would need to offset the impact of any cash he received against the impact of the contribution of his own inheritance into the business. Moreover it must be remembered that even if the court were persuaded to add-back monies (as part of the s.79 exercise) that the court was satisfied the husband had unjustly appropriated from the business, should not the court first consider making those funds available to the business creditors? Why should the wife be preferred in this regard?
I do not accept the wife’s claims that there has been non-disclosure in all the circumstances of this case. A much more likely scenario is the one portrayed in the documents, many of which the wife herself produced to the court. I am left with a lingering impression that the wife knew far more about the issues in this case than she let on. The husband invested his superannuation into the business and lost all of it as a result of his alcoholism, the disastrous initial business venture between [C] and [W], very poor management of the business by the husband, and some poor professional advice along the way. It is in many respects both a business and personal tragedy for this family, but this does not necessarily amount to either waste or non-disclosure. Neither is established in the balance of probabilities in this case.
Conclusion
It follows that the balance sheet is as asserted by the husband. He seeks half the equity in the former matrimonial home at Property B and that he otherwise retain all other property in his possession or control. This provides the husband with:
Property B $510,000
Less mortgage $37,720
$472,280
Husband’s half share: $236,140
Husband’s CBA account : $870
Money in trust for husband: $24,027
$261,037
This represents 42 percent of the net property pool.
This leaves the wife with $357,907 or 58 percent of the pool. On her redundancy she will have access to sufficient cash to discharge the mortgage, pay any tax she is assessed for, pay out her car loan, and make the agreed payment to Ms K. She may be forced to sell the home in order to make the payment to the husband. I intend to give her three months to make the payment to the husband, and then a further three months within which the property is to be sold, but interest will accrue as from three months after the date of this order.
I expressly recognise that the wife made a greater contribution to her superannuation, redundancy and leave entitlements as these accrued mostly in the post-separation period. But this post-separation contribution needs to be balanced by the greater contribution the husband made up until separation through the investment of his inheritance in the business. Moreover I would have found that s.75(2) considerations favoured the husband on balance by about five percent. The wife has some capacity for employment, but the husband has none. She is younger than him and is in better health. When all considerations are weighed in the balance, the order that the husband seeks is a just and equitable one under the circumstances.
In conclusion, for the parties the husband’s alcoholism and their investment of the husband’s superannuation in the business amounted to a personal and business tragedy that has ruined their retirement years. Their property settlement took place several years after the acquisition, operation and subsequent liquidation of the business and involved a detailed searching through the ashes of the business to look for evidence of some wrongdoing. No such evidence has been found. It is possible that the cost of this search has been disproportionate to the inherent value of this exercise.
I certify that the preceding seventy-three (73) paragraphs are a true copy of the reasons for judgment of Altobelli FM
Associate:
Date: 17 April 2009
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