King and Hamidou - [2016] FamCA 889

FAMILY COURT OF AUSTRALIA

KING & HAMIDOU

[2016] FamCA 889

FAMILY LAW – PROPERTY SETTLEMENT – Where the parties were married for approximately fourteen years – Where it was agreed that the Court should take a “one pool” approach – Where each party seeks to retain the parties’ business enterprise – Whether the Court should accept the enterprise’s value based on the amount the husband is willing to pay – Where the Court accepts the fair market value as assessed by the single expert – Where the parties each made substantial direct and indirect contributions to the property pool – Where the wife has been consistently involved in the enterprise for twenty-seven years – Where the husband was involved in various business interests during the marriage – Where the enterprise’s financial position has improved under the management of the wife post-separation – Where the Court finds the parties’ contributions should be assessed at fifty-two and a half per cent to the wife and forty-seven and a half per cent to the husband – Where the Court finds section 75(2) factors favour an additional adjustment of two and a half per cent to the husband – Orders made for the wife to retain the business enterprise – Alternate orders made for the husband to acquire the enterprise should the wife be unable to retain it.

Evidence Act 1995 (Cth) s 136
Family Law Act 1975 (Cth) ss 75, 79

Bircher & Bircher and Anor [2016] FamCAFC 123
Bishop & Bishop (2013) 93-553
Blake & Blake [2007] FamCA 10
Bonnici & Bonnici (1992) FLC 92-272
Cordelia Holdings Pty Ltd v Newskey Investments Pty Ltd [2004] FCAFC 48
Goold v Commonwealth of Australia and Anor; Rootsey v Commonwealth of Australia and Anor (1993) 114 ALR 135
Harriott & Arena [2016] FamCAFC 69
Kowaliw & Kowaliw (1981) FLC 91-092
Mayne & Mayne (2011) FLC 93-479
Omacini & Omacini [2005] FamCA 195
Stoddard & Glover [2016] FamCA 674
Townsend & Townsend (1995) FLC 92-569

APPLICANT:

Ms King

RESPONDENT:

Mr Hamidou

FILE NUMBER:

WOC

1015

2013

DATE DELIVERED:

21 October 2016

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

McClelland J

HEARING DATE:

6 - 10 June 2016 and by way of written submissions

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Dura

SOLICITOR FOR THE APPLICANT:

Johnson Horsley Lawyers

COUNSEL FOR THE RESPONDENT:

Mr Campton SC

SOLICITOR FOR THE RESPONDENT:

Dignan & Hanrahan Solicitors & Attorneys

Orders

The wife is to pay to the husband, or as he may direct in writing, the sum of $1 299 740.50 within a period of three (3) months from the date of these Orders.
The wife is to retain the following:
(a)The property situate at and known as T Road, Suburb F (“the F property”);
(b)       Furniture and contents of the F property;
(c)       BMW … motor vehicle registration number …;
(d)       The wife’s interest in her Care Superannuation Fund.
(e)The business known as D Pty Ltd (“D Business”), including the land on which the D Business operates;
(f)       Commonwealth Bank trading account ending #0706;
(g)Commonwealth Bank D Business cheque account ending #0765;
(h)       Commonwealth Bank Funding Grant ending #4255;
(i)Commonwealth Bank D Business rent account ending #0115; and
(j)        Credit loan account with D Business.
The wife is to indemnify and keep the husband indemnified in respect to the following:
(a)Mortgage secured over the F property (Commonwealth Bank loan account ending #4118);
(b)D Business property loan (Commonwealth Bank loan account ending #5084);
(c)D Business business loan (Commonwealth Bank loan account ending #1703);
(d)Commonwealth Bank business MasterCard account ending #0411; and
(e)The wife’s 2015 personal taxation liability.
The husband is to retain the following:
(a)The property situate at and known as U Road, Suburb DD (“the U Road property”);
(b)Furniture and contents in the husband’s possession;
(c)BMW … motor vehicle registration number …;
(d)BMW …motor vehicle registration number …;
(e)… motor bike registration number …;
(f)Bike trailer;
(g)Toyota … motor vehicle registration number…;
(h)Boat registration number …;
(i)ANZ Etrade account ending #3455;
(j)Westpac Classic account ending #3293;
(k)Commonwealth Bank C Pty Ltd account ending #4550;
(l)NAB account ending #6766;
(m)Loan to Mr PP for Van; and
(n)Husband’s interest in his TT Superannuation Fund.
The husband is to indemnify and keep the wife indemnified in respect to the following:
(a)Mortgage secured over the U Road property (account number ending #5773);
(b) The husband’s ANZ personal credit card; and
(c) Westpac account number ending #5788.

The alternative

In the event that the wife fails to comply with Order (1) above, the husband is to pay to the wife, or as she may direct in writing, the sum of $865 306.50 within three (3) months of the wife’s failure to comply with Order (1).
Simultaneous with the payment by the husband to the wife set out in Order (6) above, the wife is to do all acts and things and sign all documents necessary to transfer to the husband the following:
(a)The business known as D Pty Ltd (“D Business”), including the land on which the D Business operates;
(b)       Commonwealth Bank trading account ending #0706;
(c)Commonwealth Bank D Business cheque account ending #0765;
(d)       Commonwealth Bank Funding Grant ending #4255;
(e)Commonwealth Bank D Business rent account ending #0115; and
(f)       Credit loan account with D Business.
Simultaneous with the payment by the husband to the wife set out in Order (6) above, the husband is to indemnify and keep the wife indemnified in respect to the following:
(a)D Business property loan (Commonwealth Bank loan account ending #5084);
(b)D Business business loan (Commonwealth Bank loan account ending #1703); and
(c)Commonwealth Bank business MasterCard account ending #0411.
In the event that the husband fails to comply with Order (6) above, the parties are each to submit a proposed Minute of Order to my chambers within fourteen (14) days of the husband’s failure to comply with Order (6), setting out their proposal for:
(a)The sale of the business known as D Pty Ltd (“D Business”), including the land on which the D Business operates; and
(b)The division of the proceeds of sale (after payment of the costs of the sale) to reflect the Court’s determination of the proceedings.
Other than as provided for in these Orders, each party shall retain free from any claim from the other party all other property, furniture, furnishings, savings, businesses, motor vehicles, superannuation entitlements and other financial resources currently in that parties name, possession or control as at the date of these Orders and each party shall also indemnify the other party in relation to any liabilities or debts payable by that party as at the date of these Orders and keep such party indemnified from any such claim.
In default of either party 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 of the Family Law Act 1975 (Cth) 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 said Orders.

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

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: WOC 1015 of 2013

Ms King

Applicant

And

Mr Hamidou

Respondent

REASONS FOR JUDGMENT

Introduction

The parties have been remarkably enterprising both prior to and during the course of their marriage of approximately fourteen years. As result of their efforts, they have successfully promoted, individually and jointly, a number of business interests. The most successful of these has been a business in the suburb of D. A major issue in these proceedings concerns which party, if any, should have the opportunity to acquire the other’s interest in that business. The valuation of the potential matrimonial property pool is therefore a significant issue as it impacts upon the amount that the party acquiring the business will be required to pay to the other party.
The task of quantifying the matrimonial property pool involves considering the substance of both parties’ allegations against the other that they have engaged in wasteful and/or extravagant expenditure. There are also quite complex issues regarding the treatment of loans obtained by the husband, including a loan from his sister. Unfortunately, since the parties separated, the husband’s mother has passed away leaving an inheritance to him and his siblings. The extent to which that inheritance can be identified and considered in determining the matrimonial property pool and/or the future needs of the parties is also a matter of some complexity.

Background facts

The husband was born in 1964 and is currently aged 52. The wife was born in 1967 and is currently aged 49.
In 1985 the husband purchased a takeaway business for $47 000. The husband funded the purchase from monies received from a personal injuries compensation claim and savings accumulated by working three jobs.
Between 1986 and 1993 the husband operated a financial planning and general insurance agency in addition to the takeaway business.
Between 1986 and 1988 the wife attended a University and completed a Teaching Diploma.
In 1989 the husband sold the takeaway business for $65 000. He then used the proceeds of sale for the purchase and construction of a transport service business in Suburb H (“the H Business”) by way of a joint venture with his cousin.
In 1989 the wife commenced full time employment as a teacher with D Business, located at Suburb DD (“the D Business”).
In 1990 the husband purchased the interest of his cousin in the H business for $80 000 by savings accumulated from his share of its profits and the sale of the hospitality business.
Shortly after, the husband purchased an interest in a hospitality business for $150 000. The husband deposed that he paid the purchase price by way of instalments and subsequently, bought the interest of his partner for an additional $70 000 to $80 000.
In 1992 the wife purchased a one-third interest in the D Business for $78 000, with her parents providing their home as collateral security for the loan. In addition to her weekly wage, the wife deposed that she received one-third of its profits, which varied in amount year to year.
In 1994 on the husband’s account, the parties commenced cohabitation.
In September 1994 a property at V Street, Suburb DD (“the V Street property”) was purchased for $152 500 in the sole name of the wife.
In 1996 on the wife’s account, the parties commenced cohabitation.
In October 1996 a property at W Street, Suburb X (“the X property”) was purchased for $280 000 in the sole name of the wife.
In 1997 the husband sold part of his interest in the hospitality business for $220 000. The husband subsequently sold his remaining interest for $150 000. The husband deposed that he also became involved in sporting promotions in his locality of Southwestern Sydney.
In January 1997 the wife purchased a further seventeen per cent interest in the D Business for $80 000. This brought her interest in the D Business to fifty per cent. The funds were borrowed by way of a loan.
In 1997 the parties married.
In 1998 the H Business ceased trading. The husband sold the fixtures and fittings for $60 000 to $70 000 and transferred the remaining stock to a new transport service venture at Suburb Y. By then the husband had also acquired the lease for another transport service venture at Suburb Z.
The husband subsequently acquired the leases of two service businesses at Suburb M and Suburb N.
In June 1998 the wife ceased working as a full time teacher and began to work in the administration and management of the D Business.
In 1998, the parties’ first child was born. She is currently aged 18.
In 1999 or 2001 the parties purchased a property at 1 O Street, Suburb DD for $195 000 in the husband’s sole name.
In 2000 the husband acquired the lease of another service business at Suburb P.
In 2000 or 2001 the parties acquired the remaining fifty per cent interest in the D Business. The business structure was subsequently changed and the company known as D Pty Ltd, trading as D Business, was established. The wife is its sole director and shareholder.
In 2001 the parties’ second child was born. He is currently aged 14.
In 2002 the husband acquired the leases of another two service businesses in the Australian Capital Territory.
On 15 June 2002 the parties purchased vacant land at T Road, Suburb F (“the F property”) for $430 000.
Later in 2002 the husband’s father passed away.
In 2003 the husband ceased operating the businesses at Suburb Y, Suburb P and Suburb Z. The husband sold the stock and equipment associated with these sites for a total of approximately $190 000. The husband says that the funds were deposited into various business accounts.
In 2003 the husband purchased a retail business at Suburb P for $20 000 by way of his company, CC Investments Pty Ltd. The husband deposed that he lobbied for the return of various licences and distribution rights associated with its operation. The husband says he also fitted out the shop when it was relocated for the sum of $70 000.
In 2003 the parties built a new home at the F property. The cost of construction was approximately $490 000. The husband says that the parties subsequently undertook additional work to the property at a cost of $300 000.
In July 2003 construction at the F property was completed and the parties and their children commenced living at the property.
On 22 December 2004 the parties sold the X property for $570 000. Simultaneously, the parties purchased, from the purchaser of the X property, the properties known as U Road, Suburb DD (“the U Road property”) and I Street, Suburb DD (“the I Street property”) for $330 000 and $240 000 respectively.
The parties subsequently extended the D Business into I Street and sold the U Road property to a staff member for $365 000.
About this time, the parties also sold the V Street property for $132 000.
In 2006 the husband’s ACT businesses were resumed by MM Company. The husband received approximately $100 000 in total from the sale of stock. The husband says these monies were deposited into various business accounts.
In 2007 the husband relinquished the lease for his business at Suburb N, with the stock moved to his business at Suburb M. The husband also sold the retail business at Suburb P for $500 000. Of the purchase price, $100 000 was paid to the husband by way of instalments. The husband was also given a boat valued at $35 000 as further consideration.
In 2008 or 2009 the parties purchased a property at 2 O Street, Suburb DD for $410 000. The wife says that the purchase was funded by way of loan whilst the husband says the purchase was funded by way of existing business funds and an increase on a loan facility. Nevertheless, the property was purchased for the purpose of expanding the operations of the D Business.
In 2009 the husband acquired and began to operate a transport service business at Suburb J.
In early 2009, the husband’s sister, Ms B, received a compensation payout in respect to a personal injury claim of $329 737. The husband deposed that as a result of her marital difficulties, his sister directed that the payout be made to him in the form of various payments and that part of those funds was put towards the parties’ home loan account. The wife alleges that by separation, the husband had repaid the funds or had used the funds for the benefit of his sister and/or their family.
In 2009 the parties formed a partnership with the ZZ family to purchase K Road, Suburb L (“the L property”) for $508 000 to develop and operate a new business. The purchase was financed by way of a mortgage secured over the property. The L property was initially tenanted whilst the relevant development approvals were organised.
In May 2009 the parties sold the property at 1 O Street, Suburb DD for $310 000.
In 2010 the parties re-acquired the U Road property for $292 000.
In 2011 the husband ceased to operate the businesses at Suburb J and Suburb M. The husband received, in total, approximately $55 000 from the sale of stock, fixtures and fittings. The husband says these funds were paid into various business accounts.
The husband subsequently became engaged in litigation with MM Company, whose service businesses the husband operated. The dispute related to rent and fuel payments. While not directly relevant to these proceedings, there was a suggestion that MM Company had engaged in unfair tactics to induce existing franchisees, including the husband, to relinquish their contracts to facilitate MM Company leasing their businesses to the XXX franchise.
In 2011 construction commenced at the L property and concluded within twelve months. The wife deposed that the construction costs amounted to $1 106 313.52, which was shared equally between the partners.
On 27 May 2011 the parties’ separated. The wife remained at the F property with the parties’ children and has remained there since separation.
In January 2012 the Q Business commenced operating at the L property. The Q Business was operated via BB Corporation trading as Q Business.
In March 2013 the husband settled his ongoing litigation with MM Company. The husband subsequently became involved in litigation with an insurance company, BX Insurance, in respect of a payment made by them to MM Company arising from an investment bond placed with them by the husband.
In March 2013 the parties refinanced their then mortgages with Westpac and ANZ to the Commonwealth Bank.
On 10 March 2013 the parties received a valuation report as to the Q Business, which indicated a likely market price of $3.1 million to $3.3 million for the business and its real property.
On 18 November 2013 the wife assumed responsibility for the financial management of the D Business, which had previously been the responsibility of the husband. The parties each make extensive allegations as to the other’s financial mismanagement of the D Business.
On 3 December 2013 the wife commenced these proceedings in the Federal Circuit Court at Wollongong.
In February 2014 the husband settled his ongoing litigation with BX Insurance on the basis that he make a payment of $74 000 to them. The husband deposed that this payment has been made by him in monthly instalments.
On 26 March 2014 orders were made by consent for:
a)The parties to facilitate the sale of the business and real property of the Q Business with the ZZ family;
b)The parties to each receive $100 000 by way of interim property distribution following the payment of associated sale expenses and the discharge of the mortgage;
c)The net proceeds of sale to be placed in the bank account of the Hamidou Family Trust;
d)The wife to be restrained, as trustee of the Hamidou Family Trust, from dealing with the net proceeds of sale without the written consent of the husband;
e)The wife to do all things necessary to allow the husband viewing access to all banking accounts associated with the D Business and Hamidou Family Trust;
f)The husband to do all things necessary to allow the wife viewing access to all banking accounts associated with his company, C Pty Ltd; and
g)Various injunctions restraining the parties from dealing with their real property.

On 7 April 2014 the proceedings were transferred from the Federal Circuit Court at Wollongong to the Family Court at Sydney.
Later in 2014 the husband’s mother passed away.
On 29 August 2014 settlement of the sale of the Q Business took place. After the payment of sale expenses, business loans and mortgages, the parties received their share, being a sum of $932 908.87, which was deposited into the Hamidou Family Trust bank account.
On 25 November 2014 orders were made by consent for the parties to each receive $100 000 by way of interim property distribution from the proceeds of sale of the Q Business.
On 19 March 2015 orders were made by Johnston J for:
a)The parties to cause $30 000 to be released from the proceeds of sale of the Q Business for the payment of mortgage arrears associated with U Road and to meet any shortfall in respect of its outgoings;
b)The husband to cause the real estate agent managing U Road to direct all rental income to the mortgage and outgoings associated with the property, with the husband restrained from withdrawing any surplus rental income; and
c)The parties to cause $300 000 to be released from the proceeds of sale of the Q Business to each of them.
On 10 July 2015 orders were made by consent for:
a)The appointment of Mr G, a chartered accountant, to oversee the financial operation of the D Business;
b)The wife to be restrained from drawing upon her director’s loan account without the written consent of the husband;
c)The wife to provide viewing access to the husband of the “QQQ” program used by the D Business; and
d)The wife to use the D Business’ rental income to meet the mortgages relating to the real property of the D Business and the F property.
The terms of Mr G’s appointment were as follows:
a)To oversee the financial operations of the D Business;
b)Review expenses paid to ensure that the expenses relate to the ordinary costs arising from its operation;
c)Set the salary to be paid to its staff – including that of the parties; and
d)Set the market rental to be paid for the use and occupation of the real estate the D Business operates on.
On 11 September 2015 Ms B filed a Statements of Claim in the Local and District Courts of New South Wales against the husband and his company, C Pty Ltd, seeking repayment of the funds that Ms B paid to the husband in 2009.
On 24 September 2015 the wife deposed that her solicitors were served with the two Statements of Claim filed by Ms B.
On 27 October 2015 the wife filed an Application in a Case seeking anti-suit injunctions against Ms B.
On 3 November 2015 the wife’s Application in a Case was resolved by consent with the application withdrawn and the wife ordered to pay the costs of Ms B.
On 6 June 2016 the final hearing commenced.

Applications

In her final Minute of Order (Exhibit B1), the wife sought the following orders:
1.That the Wife be declared to be solely entitled to the following assets, free from any claim by the Husband:
(a)The property situate at and known as [T Road, Suburb F] (“[F] property”).
(b)The property situate at and known as [R Street, Suburb DD] (“[R Street] property”).
(c)The business known as [D] Pty Limited (“[D] business”) (including the [R Street] property, being the land on which the business is operated).
(d)The entire proceeds contained in the following accounts currently held in her sole name:
(i)[D Business] Cheque being Commonwealth Bank Account No xx0765.
(ii)[D Business] Funding Grant, being Commonwealth Bank Account No xx4255.
(iii)[D Business] Rent Account, being Commonwealth Bank Account No xx0115.
(iv)Trading Account, being Commonwealth Bank Account No xx0706.
(v)IMB Bank Account No xx2186.
(vi)IMB Bank Account No xx9703.
(e)BMW … motor vehicle registration number ….
2.That the Husband be declared to be solely entitled to the following assets, free from any claim by the Wife:
(a)The property situate at and known as [U] Road, [Suburb DD].
(b)The businesses known as:
(i)[C] Pty Limited.
(ii)[CC] Investments Pty Limited.
(c)The entire proceeds contained in the following accounts currently held in his sole name:
(i)[Hamidou] Investment Trust, being Commonwealth Bank Account No xx7847.
(ii)[Hamidou] Investment Trust, being Commonwealth Bank Account No xx1723.
(iii)Star City Casino account.
(iv)Crown Casino account.
(v)E*Trade Investment Account, being ANZ Account No xx3455.
(vi)Savings Account, being ANZ Account No xx7257.
(vii)Classic Account, being Westpac Account No xx3293.
(viii)Savings Account, being Westpac Account No xx5788.
(ix)[C] Account, being Commonwealth Bank Account No xx4550.
(x)Savings Account, being National Australia Bank Account No xx6766.
(d)His interest in the deceased estate of his late mother, upon the granting of Probate, including (without limitation):
(i)His interest in the property situate at and known as [S Street, Suburb EE].
(ii)Mercedes motor vehicle registration number ...
(iii)Any credit in any bank account of such deceased estate.
(e)BMW … motor vehicle registration number ...
(f)Toyota … motor vehicle registration number …
(g)… motor bike registration number …
(h)Boat registration number ...
(i)His share portfolio.
3.That the Husband indemnify the Wife and keep her indemnified with respect to the mortgage secured over the property at [U] Road, [Suburb DD] and do all acts and things necessary to remove any liability of the Wife for such mortgage.
4.That within 56 days from the date of these Orders the Wife shall cause to be paid to the Husband, or as he may direct in writing, the sum of $300,000.
5.That the Wife shall indemnify the Husband and keep him so indemnified in connection with the following liabilities and debts:
(a)Mortgage secured over the [F] property, being Commonwealth Bank Loan Account No #4118.
(b)[D Business] Property Loan, being Commonwealth Loan Account No #5084.
(c)[D Business] Business Loan, being Commonwealth Loan Account No #1703.
(d)[D Business] Business Mastercard, being Commonwealth Bank Account No #0411.
(e)Mastercard Account, being Commonwealth Bank Account No #2125.
(f)Mastercard Account, being Commonwealth Bank Account No #9027.
6.That the Husband shall indemnify the Wife and keep her so indemnified in connection with the following liabilities and debts:
(a)Mortgage secured over the [U] Road property, being ANZ Bank Cheque Account No #5773.
(b)Any alleged debt payable by him to his sister, [Ms B] (also known as …), including (without limitation):
(i)Judgment arising out of Case No 2015/…;
(ii)Judgment arising out of Case No 2015/….
(c)Any assessed or unassessed liability to the Australian Taxation Office in respect of any unpaid personal or business tax liabilities.
7.That other than as provided for in these Orders, each party shall retain, free from any claim from the other party, all other property, furniture, furnishings, savings, businesses, motor vehicles, superannuation entitlements and other financial resources currently in that party’s name, possession or control as at the date of the Orders and each party shall also indemnify the other party in relation to any liabilities or debts payable by that party as at the date of these Orders and keep such party indemnified from any such claim.
8.That in the event that either party fails or refuses to do any thing or execute any document to give effect to these Orders and such failure continues for seven (7) days, that the Registrar of the Federal Circuit Court [sic] is hereby appointed pursuant to Section 106A of the Family Law Act to execute such document or do such thing, upon the Registrar being satisfied on Affidavit, that either party has failed or refused to do any thing or execute any document pursuant to these Orders.
In his final Minute of Order (Exhibit A1), the husband sought the following orders:
A. Husband’s Primary Relief Sought
1.That the Applicant wife shall forthwith do all acts and things and sign and execute all deeds, documents and instruments as may be necessary to:
(a)Transfer her shareholding and her entitlements and interest (including her credit loan account) in [D] Pty Limited to the Respondent husband.
(b)Resign as a Director of [D] Pty Limited.
(c)Transfer to the Respondent husband the real estate at [R Street Suburb DD] known as [D Business]:
(i)[R Street, Suburb DD];
(ii)[I Street, Suburb DD];
(iii)2 O Street, Suburb DD].
(collectively being the corner of [O Street] and [I Street] [Suburb DD] and herein after referred to as “the [DD] real estate”)
2.That within a period of 3 months from the date herein the Respondent husband shall at his own expense discharge or refinance the Commonwealth Bank mortgage encumbering the property at [R Street Suburb DD] known as [D Business] currently owing in the sum of $1,750,000.
3.That the Respondent husband thereafter be responsible for payment of all claims and demands arising out of the operation of [D] Pty Limited save any demand or claim made by or on behalf of the wife.
B. Husband’s Alternative Relief Sought to Orders 1 – 3 above
4.That the Applicant wife pay to the Respondent husband a sum of $2,250,000 within a period of 3 months from the date herein.
5.That the Applicant wife retain her shareholding in [D] Pty Limited together with the real estate upon which it operates.
6.That the Applicant wife thereafter be responsible for payment of all debts associated with or arising out of the operation of the business including any taxation liability and shall indemnify and keep the Respondent husband indemnified in respect to the same.
7.That the Applicant wife shall be responsible for payment of the Commonwealth Bank mortgage encumbering the [D Business] real property.
8.That in the event the Applicant wife fails to comply with order 4 herein then the Applicant wife shall forthwith do all acts and things and shall sign and execute all deeds, documents and instruments as may be necessary to:
(a)Transfer her shareholding and her entitlements and interest (including loan account) in [D] Pty Limited to the Respondent husband.
(b)Resign as a Director of [D] Pty Limited.
(c)Transfer to the Respondent husband the real estate:
(i)[R Street, Suburb DD];
(ii)[I Street, Suburb DD];
(iii)[2 O Street, Suburb DD].
(collectively being the corner of [O Street] and [I Street] [Suburb DD] and herein after referred to as “the [DD] real estate”).
9.That the Respondent husband shall within a further period of 3 months of such failure at his own expense discharge or refinance the Commonwealth Bank mortgage encumbering the [D Business] real property.
10.In the event the Respondent husband fails to comply with order 8 herein then the parties shall forthwith join in and do all acts and things and shall sign and execute all deeds, documents and instruments necessary to:
(a)Effect the sale of the [DD] real estate upon which the company operates by private treaty and shall immediately place the same in the hands of an agent agreed upon between the parties for sale at an agreed price or at a price determined by an independent valuer agreed upon between the parties, and failing such agreement at a price determined as the fair market price by the President for the time being of the NSW Division of the Australian Property Institute, or his nominee, and
(b)Place business conducted by [D] Pty Limited in the hands of [XY] Sales & Valuations for sale at an agreed price or failing agreement at a price determined by [Mr E] of [XY] Sales & Valuations,
and the proceeds from the aforementioned sales thus obtained shall be applied as follows:-
(i)in discharge of the Commonwealth Bank mortgage presently encumbering the [DD] real estate.
(ii)in discharge of any outstanding council and water rates.
(iii)in payment of real estate agents and business brokers proper commission arising from the sale.
(iv)in payment of proper legal costs and expenses arising from the sale.
(v)in payment of all other expenses which may have been reasonably incurred in respect of such sale, including Valuer's fees, if appropriate.
(vi)in payment of the balance to the Respondent husband.
C. Relief sought irrespective of orders made in accordance with paragraphs 1 – 3 above, or in the alternative, paragraphs 4 – 10 above
11.That the parties forthwith shall join in and do all acts and things and shall sign and execute all deeds, documents and instruments necessary to forthwith equally pay to the husband the sum of approximately $494,000 held in the Commonwealth Bank accounts numbers #7847 and #1723 in the name of the wife being the balance of proceeds of sale of the [Q Business].
12.That the Applicant wife retain and be forthwith declared solely entitled the property situate and known as [T Road, Suburb F] and the Applicant wife shall be solely responsible for the payment of the Commonwealth Bank mortgage encumbering the [F] property.
13.That the Respondent husband retain and be forthwith declared solely entitled the property situate and known as [U] Road, [Suburb DD] and shall be solely responsible for the mortgage encumbering the property
14.That the Respondent husband be solely responsible for payment of all outstanding monies to the Respondent’s sister [Ms B].
15.That the Respondent husband retain and be forthwith declared solely entitled to the following:-
(a)Shareholding in [C] Pty Limited;
(b)BMW … motor vehicle registration number …;
(c)BMW … motor vehicle registration number …;
(d)Boat;
(e)Superannuation entitlements.
16.That the Applicant wife retain and be declared solely entitled to the following:-
(a)BMW … motor vehicle registration number …;
(b)Superannuation entitlements.
17.In the event of either party neglecting or refusing to sign any document to give effect to these orders then the Registrar of the Family Court is empowered to execute such documents to give effect to these orders on behalf of the party in default pursuant to Section 106A of the Family Law Act upon being satisfied of such failure or neglect by way of affidavit evidence.
18.The wife pay the Husband’s cost of and incidental to these proceedings.
By the conclusion of closing submissions, it became evident that the parties were in agreement that the sum of $494 000, being the balance of the proceeds of sale of the Q Business, should be paid to the husband. Accordingly, the following orders were made by consent:
THE COURT FURTHER ORDERS BY CONSENT THAT:
2. In favour of the husband, the parties forthwith shall join in and do all acts and things and shall sign and execute all deeds, documents and instruments necessary to forthwith pay to the husband the sum of approximately $494 000 held in the Commonwealth Bank accounts titled [Hamidou] Investment Trust, being Commonwealth Bank Account number ending #7847 and Commonwealth Bank Account number ending #1723 in the name of the wife being the balance of proceeds of sale of the [[Q Business]].
3. Orders 1 to 5 of the Orders of 10 July 2015, being the appointment of [Mr G], be discharged.
THE COURT NOTES THAT:
A.The payment of $494 000 to the husband pursuant to Order 2 above is part of the property adjustment in favour of the husband and will be dealt with in the substantive Reasons for Judgment.
As previously noted, Mr G was appointed in July 2015 to oversee the financial operation of the D Business.

Evidence and witnesses

The wife relied upon the following material:
a)Financial Statement filed 11 May 2016;
b)Affidavit of the wife filed 6 November 2015;
c)Affidavit of Mr AA filed 6 November 2015;
d)Affidavit of Mr G filed 23 May 2016; and
e)Affidavit of Mr FF filed 26 May 2016.
The husband relied upon the following material:
a)Financial Statement filed 2 May 2016;
b)Affidavit of the husband filed 30 October 2015; and
c)Affidavit of Mr JJ filed 30 October 2015.
Mr AA and Mr FF were not required for cross-examination. All other witnesses were required for cross-examination.
There were also three expert reports before the Court, which had been prepared for the purposes of these proceedings. These were:
a)A valuation report by KK Valuers in respect of the F property dated 26 October 2015 (Exhibit B); and
b)Two valuation reports by Mr E of XY Sales & Valuations in respect of the D Business dated 29 October 2015 and 10 May 2016 (Exhibit C).
Mr KK and Mr E were cross-examined.

The Law

Subject to s 79(2), s 79(1) of the Family Law Act 1975 (Cth) (“the Act”) empowers the Court in property settlement proceedings to “make such order as it considers appropriate”.
Section 79(2) provides that the Court shall not make an order altering the interests of the parties to the matrimonial property unless the Court is satisfied that, “in all the circumstances, it is just and equitable to make the order”.
In exercising its discretion, the Court is required to take into account the matters set out in s 79(4). Section 79(4) is divided into two limbs. The first limb is in respect to those matters set out in paragraphs (a) to (c), which deal with what are commonly known as the “contribution” factors. Contributions can, in turn, be direct or indirect, financial or non-financial, contributions to the matrimonial property. The second limb is in respect to those matters set out in paragraphs (d) to (g), which primarily relate to the future needs of each of the parties but can include any fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account.
As noted, s 79(4) applies once the Court has determined that it is just and equitable to make an order adjusting the matrimonial property. The section is a legislative guide to assist the Court in considering how its broad discretion should be exercised to make appropriate orders to adjust the matrimonial property. This is to be contrasted, for instance, with s 75(1) which provides that in exercising jurisdiction in respect to spousal maintenance the Court “shall take into account only the matters referred to in subsection (2)”.[1] In other words, s 79(4) sets out a non-exhaustive list of matters to be considered in order to do justice between the parties.[2] Those matters are:
(a)      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 has, since the making of the contribution,         ceased to be the property of the parties to the marriage or either of them; and
(b)      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 that 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
(c)      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
(d)      the effect of any proposed order upon the earning capacity of either     party to the marriage; and
(e)      the matters referred to in subsection 75(2) so far as they are     relevant; and
(f)       any other order made under this Act affecting a party to the       marriage or a child of the marriage; and
(g) 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.
[1] Emphasis added.
[2] Marinko & Marinko (1985) FLC 91-609 at 79,944.

In considering those matters relevant to the second limb, s 79(4)(e) requires the Court to have regard to those matters set out in s 75(2) insofar as they may be relevant. Those matters are:
(a)      the age and state of health of each of the parties; and
(b)      the income, property and financial resources of each of the parties      and the physical and mental capacity of each of them for appropriate     gainful employment; and
(c)      whether either party has the care or control of a child of the      marriage who has not attained the age of 18 years; and
(d)      commitments of each of the parties that are necessary to enable the     party to support:
(i)       himself or herself; and
(ii)a child or another person that the party has a duty to        maintain; and
(e)      the responsibilities of either party to support any other person; and
(f)       subject to subsection (3), the eligibility of either party for a pension,   allowance or benefit under:
(i)any law of the Commonwealth, of a State or Territory or of       another country; or
(ii)      any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to      either party; and
(g)      where the parties have separated or divorced, a standard of living         that in all the circumstances is reasonable; and
(h)      the extent to which the payment of maintenance to the party whose          maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of         education or training or to establish himself or herself in a business        or otherwise to obtain an adequate income; and
(ha)     the effect of any proposed order on the ability of a creditor of a          party to recover the creditor’s debt, so far as that effect is relevant;        and
(j)       the extent to which the party whose maintenance is under          consideration has contributed to the income, earning capacity,         property and financial resources of the other party; and
(k)      the duration of the marriage and the extent to which it has affected       the earning capacity of the party whose maintenance is under consideration; and
(l)       the need to protect a party who wishes to continue that party’s role      as a parent; and
(m)     if either party is cohabiting with another person—the financial circumstances relating to the cohabitation; and
(n) the terms of any order made or proposed to be made under section 79 in relation to:
(i)       the property of the parties; or
(ii)vested bankruptcy property in relation to a bankrupt party; and
(naa)    the terms of any order or declaration made, or proposed to be made,     under Part VIIIAB in relation to:
(i)       a party to the marriage; or
(ii)a person who is a party to a de facto relationship with a party to the marriage; or
(iii)     the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na) 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; and
(o)      any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)      the terms of any financial agreement that is binding on the parties to     the marriage; and
(q)      the terms of any Part VIIIAB financial agreement that is binding on      a party to the marriage.

Approach to proceedings under s 79

For reasons which I have set out previously in Stoddard & Glover [2016] FamCA 674 at [79] – [87], I intend to take the following approach to these proceedings:
1.Identify the parties’ existing legal and equitable interests in property.
2.Assess whether or not it is just and equitable to make an order, as is required by s 79(2).
3.If it is just and equitable to make an order, undertake an assessment of the parties’ direct and indirect, financial and non-financial, contributions according to s 79(4).
4.Undertake a further assessment of each of the parties’ future needs by applying s 79(4) including, as required by s 79(4)(e), having regard to those matters set out in s 75(2) insofar as they may be relevant.
5.After making the above assessments according to ss 79(4) and 75(2), take a “holistic” overview to ensure that the outcome of the hearing and specifically, any orders for the alteration of property interests are appropriate, just and equitable.

Identification of the parties’ interests in property

The Balance Sheet

At the commencement of closing submissions, the parties were helpfully able to provide to the Court a final joint balance sheet (Exhibit Z). The parties were able to agree to remove a large number of items from the balance sheet which had initially been said to be in dispute. These items related namely to “add backs” and liabilities.
Exhibit Z set out the parties’ assets, alleged “add backs”, liabilities, superannuation and financial resources as follows:[3]
[3] The parties’ notations have been removed.

Ownership		Description		Wife / de facto partner’s value	Husband / de facto partner’s value
ASSETS
1.	W	[T Road, Suburb F] (former matrimonial home) – joint valuation		$ 1,525,000	$ 1,600,000
2.	W	[R Street, Suburb DD] – [D Business] – joint valuation		$ 3,800,000	$ 4,200,000
3.	H	[U] Road, [Suburb DD] – joint valuation		$ 580,000	$ 580,000
3A.	H	[S] Street, [Suburb EE] *Husband’s 1/3^rd share		$ 408,333	$ 0
3B.	J	Furniture and contents at former matrimonial home – joint valuation		$ 34,147	$ 34,147
3C.	J	Furniture and contents in the Husband’s possession – joint valuation		$ 7,412	$ 7,412
3D.	J	Office furniture		$ 4,657	$ NIL
4.	W	BMW … motor vehicle (…)		$ 48,500	$ 48,500
5.	H	BMW … motor vehicle (…)		$ 26,300	$ 26,300
6.	H	BMW… motor vehicle (spare) (…)		$ 24,100	$ 24,100
7.	H	… motorbike (…)		$ 5,900	$ 5,900
8.	H	Proceeds of insurance claim (stolen bike trailer …)		$ NIL	$ NIL
8A.	H	Bike trailer		$ 3,000	$ 3,000
9.	H	Mercedes-Benz motor vehicle *Previously used by Husband’s mother		$ 0	$ 0
10.	H	Toyota … (…)		$ 4,800	$ 4,800
11.	H	Boat (…)		$ 20,000	$ 20,000
12.	H	[Husband’s] account with Casino		$ 0	$ Nil
13.	H	Star Casino account		$ 0	$ Nil
14.	J	Shares – [GG] Resources		$ 6,167	$ Nil
15.	H	ANZ Etrade Account (…)		$ 66	$ 66
16.	H	Westpac Classic account #3293		$ 230	$ NK
17.	H	Commonwealth Bank [C] account #4550		$ 2,611	$ 2,611
18.	H	NAB account #6766		$ 2,251	$ 2,251
19.	H	Funds held at WR Lawyers ([MM Company] case)		$ 0	$ Nil
20.	H	Funds held at WR Lawyers ([MM Company] case)		$ 0	$ Nil
21.	W	Commonwealth Bank account #7847		$ 113,601	$ 113,601
22.	W	Commonwealth Bank account #1723		$ 380,383	$ 380,383
23.	W	Commonwealth Bank trading account #0706		$ 19	$ 19
24.	W	Commonwealth Bank [D Business] cheque account #0765		$ 8,418	$ 8,418
25.	W	Commonwealth Bank Funding Grant #4255		$ 1,591	$ 1,591
26.	W	Commonwealth Bank [D] Rent Account (0115)		$ 21,274	$ 21,274
27.	W	IMB Account #9703		$ NIL	$ NIL
28.	W	IMB Account #2186)		$ NIL	$ NK
28A	W	Credit loan account with [D Business]		$ 401,752	$ 401,752
28B	H	Loan to Mr PP for van		$ 10,090	$ 10,090
Total		$ 7,440,602	$ 7,496,215
ADDBACKS
29.	H	Star Casino		$ Nil	$ Nil
30.	H	Hotel expenditures		$ 58,978	$ Nil
31.	H	Unable to track bank transactions		$ Nil	$ Nil
32.	H	Extended family expenditures		$ Nil	$ Nil
33.	H	Unidentified insurances		$ Nil	$ Nil
34.	H	Cashed cheques from [D] ANZ #4658 account		$ Nil	$ Nil
35.	H	Money owed from Husband’s cousin …		$ Nil	$ Nil
36.	H	Money paid by telegraphic transfer to Crown Casino		$ Nil	$ Nil
37.	H	Amounts paid to Husband from Crown Casino *Paid to Star Casino		$ Nil	$ Nil
38.	H	Cheques issued by Crown Casino *Paid to Star Casino		$ Nil	$ Nil
39.	H	Transactions on Husband’s Crown Casino statement *Paid to Star Casino		$ Nil	$ Nil
40.	H	Husband’s gambling expenditure		$ 0	$ Nil
41.	H	Husband’s non-gambling expenditure at Crown Casino		$ Nil	$ Nil
42.	H	Cash given by …		$ 0	$ Nil
43.	H	Legal fees paid by Husband for [MM Company] claim		$ Nil	$ Nil
44.	H	Miscellaneous unknown expenditure		$ 0	$ Nil
45.	H	Lotteries and lotto		$ 37,922	$ Nil
46.	H	Cash held from [MM Company] accounts (as at June 2011)		$ Nil	$ Nil
47.	H	Recent yet to verify transactions (mostly cash withdrawals)		$ 0	$ Nil
48.	H	Flexi-loan cash withdrawals *Yet to track		$ 0	$ Nil
49.	H	Loan to [Mr PP] for van *[Mr OO’s] investigations		$ 0	$ NIL
50.	H	[Q Business] management fees cashed *Not paid into account		$ Nil	$ NIL
51.	H	Husband’s transfer of [a property] purchased by the Husband in 1992 for $230,000 but transferred to his sister [Ms B] and her then husband for no consideration in 2007		$ 0	$ NIL
52.	W	Business funds expended or otherwise drawn down by wife for personal expenditure		$ NIL	$ 0
53.	W	Business funds utilised by Wife to fund current Court proceedings		$ NIL	$ 0
54.	W	Extended family expenditures for family of Wife		$ NIL	$ 0
55.	W	Funds drawn from [Hamidou] Family Trust Account in breach of interim Orders		$ NIL	$ 0
56.	W	Funds lost as a result of wife blocking purchase of interest of [ZZ family] in [Q Business] and thereafter forcing sale of same.		$ NIL	$ 0
56.1	H	Wife’s paid legals		$ 289,313	$ 289,313
56.2	H	Husband’s paid legals		$ 113,630	$ 113,630
57.	W	…’s / ANZ mortgage		$ 0	$ 0
58.	W	Rent taken by Husband		$ 22,239	$ Nil
59.	W	Funds withdrawn from trust account to repay ANZ loan		$ Nil	$ Nil
60.	W	Fees and charges deducted by ANZ due to Husband’s actions		$ Nil	$ Nil
61.	H	Funds collected by Husband from … [products] sold in 2011 from [D Business], and not banked		$ 0	$ Nil
62.	H	Funds withdrawn by Husband from Westpac home loan #4018 for his personal use		$ Nil	$ Nil
63.	H	Funds drawn from Westpac [D] Business Loan account #1081 into Husband’s accounts		$ Nil	$ Nil
64.	H	Husband’s driving fines paid from [D Business] accounts		$ Nil	$ Nil
65.	H	Funds transferred out of and expenses put through ANZ [D Business] account #4568 (not including cashed cheques) to Husband’s personal accounts or for his personal expenses		$ Nil	$ Nil
66.	H	Reimbursement by Husband to Wife for his half share of … valuation, as per court order		$ 0	$ Nil
67.	H	Funds taken by Husband from [D Business], via ANZ Travel Card and used for his personal expenses		$ 0	$ Nil
68.	H	Funds withdrawn by Husband from Wife’s ANZ #1829 account		$ Nil	$ Nil
69.	H	Cashed cheques and funds taken from [D] CBA #0765 account		$ Nil	$ Nil
70.	H	Husband’s personal transactions from ANZ [D] rental loan account #5773 (re [U] Road)		$ Nil	$ Nil
71.	H	Husband’s personal transactions from ANZ [D] credit card #0008 since May 2011		$ Nil	$ Nil
72.	H	Funds withdrawn by Husband from Trust Account #7847 for personal use		$ Nil	$ Nil
73.	H	Funds expended by Husband on travel cards funded by [D Business]		$ Nil	$ Nil
74.	H	Updated Crown Casino “Buy in” records (2013 to 2016)		$ Nil	$ Nil
75.	H	Updated Crown Casino Accommodation records (2013 to 2016)		$ 0	$ Nil
76.	H	Updated Star Casino deposits (2013 to 2015)		$ Nil	$ Nil
77.	H	Updated Star Casino “cash in” (2013 to 2015)		$ Nil	$ Nil
78.	Updated Star Casino “chips” (2013 to 2015)		$ Nil	$ Nil
Total		$ 522,082	$ 402,943
LIABILITIES
79.	W	[T Road, Suburb F]		$ 687,990	$ 687,990
80.	W	[R Street], [Suburb DD] (property loan)		$ 1,750,000	$ 1,750,000
81.	W	[D Business] (business loan)		$ 298,148	$ 298,148
82.	H	[U] Road, [Suburb DD]		$ 347,264	$ 349,605
83.	H	Husband’s ANZ personal credit card (7257)		$ 50,582	$ 50,582
84.	H	Westpac (re Armguard issue) (5788)		$ 113,593	$ 113,593
85.	W	Commonwealth Bank business MasterCard (0411)		$ 19,859	$ 19,859
86.	W	Commonwealth Bank Gold MasterCard (2125 now 9027)		$ 0	$ 0
87.	W	Personal tax liability for 2015		$ 92,985	$ 92,985
88.	C	Director’s loan owing by [D Business] to Wife in her personal capacity		$ 0	$ 0
89.	J	[D Business] Pty Ltd tax liability for Dec Mar $11,702 and April $11,472		$ 0	$ 0
90.	H	[C] Pty Limited taxation liability		$ 0	$ 0
91.	J	Husband’s personal taxation liability		$ 0	$ 0
92.	H	Taxation liability relating to sale of [Q Business		$ 0	$ 0
93.	H	Liability [Mr HH]		$ Nil	$ 22,000
94.	H	Liability to [Ms B]		$ Nil	$ 198,181
95.	H	Liability of [C] Pty Limited to …		$ 0	$ 0
96.	J	Liability to [BX] Insurance		$ Nil	$ Nil
96A	H	Liability to [Ms YY]		$	$ 10,000
Total		$ 3,360,421	$ 3,592,943
SUPERANNUATION
Member		Name of Fund	Type of Interest	Wife / de facto partner’s value	Husband / de facto partner’s value
97.	W	Care Superannuation	Accumulation	$ 150,000	$ 150,000
98.	H	[TT] Superannuation	Accumulation	$ 88,981	$ 88,457
Total		$ 238,981	$ 238,457
FINANCIAL RESOURCES
Ownership		Description		Wife / de facto partner’s value	Husband / de facto partner’s value
99.	H	Money bequeathed from mother’s estate		$ 100,000	$ 0
100.	H	Jewellery bequeathed to Husband from mother’s estate		$ 120,000	$ Nominal
Total		$ 220,000	$ 0

By the conclusion of closing submissions, the parties were also able to agree as to the values of items 3A ($408 300), 16 ($230), 82 ($349 605) and 98 ($88 457).
In the written submissions prepared on behalf of the wife, an issue was raised as to the value of item 3D, which relates to office furniture the wife believes to be located at the husband’s office. However, when the issue was raised during closing submissions, counsel for the wife was unable to point to evidence that supported the wife’s contention in respect to what is a relatively minor item on the balance sheet. In those circumstances, I do not intend to include that item.
At the conclusion of submissions, the parties acknowledged that no evidence had been presented to the Court in respect to item 14 which was identified as “Shares – [GG] Resources”. In those circumstances, senior counsel for the husband helpfully indicated that in the event of the wife presenting evidence as to the existence of those shares, the husband would consent to those shares being transferred to the wife without otherwise impacting upon the adjustment of the parties’ interests in property. Accordingly, that item will also be excluded.
It was also recognised that both parties had effectively had a distribution from the matrimonial property pool in respect to their legal fees. It was agreed that the Court should take into account the funds respectively applied by the parties towards their own legal fees by way of “add backs” in the balance sheet.
Finally, the parties were in agreement that the Court should adopt a single pool (or “global”) approach in determining the parties’ respective entitlements.
Despite the efforts made by counsel, the parties remained in dispute as to the values of and/or the inclusion of the following items into the balance sheet for which findings are required.

Value of the F property (Item 1)

The wife relied upon the expert report by KK Valuers dated 26 October 2015 (“the KK report”)[4] to contend that the valuation of the F property was $1 525 000.
[4] Exhibit B.

The husband, on the other hand, contended that the KK report understated the value of the property and, in particular, had failed to have regard to comparative property sales in the area and the fact that there had been an increase in market activity since the date of the report.
The report writer, Mr KK, gave oral evidence that he had prepared the report in conjunction with a senior valuer employed by KK Valuers. Cross examination by senior counsel for the husband primarily focused on the extent to which Mr KK had considered comparable sales in the locality of the F property. I am satisfied that Mr KK considered a sufficient number of properties to make an accurate assessment of the value of the F property. Further, insofar as additional properties were drawn to the attention of Mr KK that had not been included in his report, I am satisfied that Mr KK’s oral evidence provided justification for distinguishing those properties, and the prices obtained in respect to the sale of those properties, from the F property.
Nevertheless, during the course of his oral evidence, Mr KK acknowledged that it was possible that there had been some upward price movement since the preparation of his report. However, Mr KK believed that such an increase was within a margin of five per cent that he would allow in respect to his valuation. In the case of the F property, Mr KK considered that his original valuation of $1 525 000 would be at “the bottom of the range”. On that basis, senior counsel for the husband submitted that the appropriate value of the F property was $1 600 000 being approximately five per cent higher than the valuation provided by Mr KK in October 2015.
During the course of his oral evidence, Mr KK agreed that an appropriate summation of his position was that “the top of the range is [$1 600 000] and the bottom of the range is [$1 525 000]”.
Mr KK subsequently acknowledged that to take a midpoint between those figures would not be “an unreasonable assumption”. Accordingly, I will value the F property at $1 562 500.

Value of D Business (Item 2)

As previously noted, both parties wish to retain ownership of the D Business. Accordingly, its value is a significant issue in these proceedings.
The wife relied upon the expert reports by Mr E of XY Sales & Valuations dated 29 October 2015 and 10 May 2016[5] to submit that the D Business should be valued at $3 800 000.
[5] Exhibit C.
The husband, on the other hand, submitted that the D Business should be valued at $4 200 000, being the amount that he was prepared to pay to acquire the Centre.
The report writer, Mr E, was subject to quite detailed cross examination by senior counsel for the husband.[6]
[6] See transcript 7 June 2016 at pages 72 – 96.
In an aide in support of the husband’s closing submissions (Exhibit C1), senior counsel for the husband appropriately summarised Mr E’s evidence as confirming that “an item… valued at one point in time could have a value for a particular purpose to a particular person, and at that very same date would have a very different value when considered by a different person, or considered for a different purpose”.
It is also the case that Mr E acknowledged that the particular knowledge that each party has of the D Business may make it more valuable to them than any other person in the market. In that context, it was submitted that the Court ought to adopt the “highest and best use” of the D Business when determining its value for the purpose of these proceedings. That highest and best use, it was submitted, was the use that would be made of the D Business by one of the parties and, in particular, the husband who was prepared to pay $4 200 000 for the real property and associated business.
Mr E acknowledged that his report was based on his assessment of the “fair market value” of the real property and associated business. Both reports prepared by Mr E in these proceedings make it clear that the definition of fair market value, as contained in Appendix D to those reports, is as follows:
Fair Market Value – the price expressed in terms of cash equivalents, at which property would change hands between a hypothetical willing and able buyer and a hypothetical willing and able seller, acting at arm’s length in an open and unrestricted market, when neither is under compulsion to buy or sell and when both have reasonable knowledge of the relevant facts.
It is also of note that Appendix D defined “investment value” as:
Investment Value – the value to a particular investor based on individual investment requirements and expectations.
In respect to the latter definition, Mr E agreed with the proposition advanced by senior counsel for the husband that:
If [the husband] is accepted by the Court, that he wants to acquire the real property and the enterprise for [$4 200 000] that’s the investor value.
On the other hand, counsel for the wife submitted that the Court should disregard the amount that the husband is prepared to pay for the D Business because the husband is not an arm’s length purchaser. In that context, it was submitted that the husband has an interest in achieving a higher valuation because it decreases the likelihood of the wife being able to acquire the D Business if that is the outcome decided upon by the Court.
The substance of the submission of counsel for the wife is, with respect, correct. The authorities make it clear that in circumstances where the value of a property is being based on what an individual is prepared to pay for the property, that individual should be one who is at an arm’s length from either of the parties.
In Goold v Commonwealth of Australia and Anor; Rootsey v Commonwealth of Australia and Anor (1993) 114 ALR 135 at 144, Willcox J said:
Of course, before placing reliance upon a mere offer, a court must consider carefully the question of its genuineness. The offer might be a sham, designed to prop up an inflated compensation claim or to reduce rates and taxes; in either case without any costs to the offeror. It might be an attempt to manipulate the market for some other ulterior purpose, perhaps a purpose extraneous to the litigation. If the offer was genuine when made, it might not have led to a concluded contract, even if resumption had not intervened. The offer might have been withdrawn. The purchaser might have failed to complete the transaction. Because of matter such as these, even a genuine offer could not be regarded as direct evidence of value. But it seems to me, once the court is satisfied about genuineness, an offer by an arm’s length party to purchase the land under valuation is something that the judicial officer ought to take into account in considering the possibility of a sale at a price different from that indicated by conventional evidence, such as an analysis of comparable sales, or of hypothetical development or a calculation of capitalised value of the rental return. How much weight should be given to such an offer is a question to be determined by reference to the facts of the particular case. In some cases, the appropriate weight may be minimal; and other considerable.
(Emphasis added)
The requirement for the offer to be made by a person who is “at arm’s length” from the parties to the transaction was confirmed in Cordelia Holdings Pty Ltd v Newskey Investments Pty Ltd [2004] FCAFC 48 and subsequently, Blake & Blake [2007] FamCA 10 at [17] – [18].
In Cordelia Holdings Pty Ltd v Newskey Investments Pty Ltd (supra), the Full Court of the Federal Court said at [128] – [129]:
It seems clear to us that the decision of the High Court in MacDonald, has applied by single justices of the High Court in James Patrick & Co Pty Ltd v Minister of State for the Navy … and Gregory v Commissioner of Taxation (Cth) … is determinative as to whether it is an error to take into account evidence of offers. Whatever weight may be properly given to evidence of offers for limited or general purposes, it is clear that such evidence is not permissible as direct evidence of value.
Insofar as the trial judge used the evidence in that way he was, we can consider, in error in doing so. To the extent that such evidence may be admissible in a general way, as to which see Willcox in Goold v Commonwealth… and Heary J in Henderson v Amadio (No.1)… it provided an insufficient additional basis upon which a conclusion as to value might have been arrived at. Moreover, even if such evidence had been used in a general way, it would only have been used if it were accompanied by an assessment of the relevant factors such as the genuineness of the offer and whether it was made at arms length (see Goold at 60). In this case, his Honour’s findings do not disclose a consideration of that nature and we must conclude that the evidence of offers was wrongly taken into account and did not provide support for the judge’s conclusion.
In this matter the inescapable fact is that the D Business has variously been described by the parties as “the gold mine” and “the jewel in the crown”. Accordingly, each party desires to acquire it. In those circumstances, I do not regard the husband as being an arm’s length purchaser and I do not regard the husband’s stated intention to acquire the D Business for $4 200 000 as an indication of its value.
The question then becomes whether the matters traversed in the cross examination of Mr E are such that those matters cast doubt on the correctness of his valuation.
Paragraph 3.2 of Mr E’s report dated 29 October 2015 notes that his firm was engaged to provide a “limited scope report” where a “lesser level of research was conducted”. The report also makes it clear that the firm was engaged to provide “an appraisal only and not a full business valuation”.
Further, the report notes that both parties and their respective solicitors were aware that the firm are qualified business valuers and not qualified property valuers. The report further makes it clear that if a “complete valuation engagement had been performed it is possible that the results may have been different”.
These various qualifications were also reiterated in Mr E’s report dated 10 May 2016.
Despite those qualifications arising directly from the scope of the firm’s retainer, Mr E was subject to extensive cross examination regarding the sources of the information he relied upon for the preparation of the report.
As a result of Mr E’s oral evidence, senior counsel for the husband submitted:
The factual matters underscoring the initial opinion of Mr [E] of $3.8 million for current ‘fair market value’ of the [D Business] enterprise has a lessened reliability in circumstances where he conceded that some of his adjustments in relation to rent to ground his opinion as to value were incorrect, and that some foundations in relation to yield grounded from a quantum applicable to individual [components] were absent from his report and/or had not been considered by him when compared to other comparable sales of [similar businesses]. He conceded that some aspects of his calculations and cross checks were deficient.
That submission was, with respect, of little assistance to the Court’s consideration of this matter.
I do not accept that any deficiencies in the report of Mr E affected his conclusion as to fair market value of the D Business for the reasons that follow.
Both of Mr E’s reports indicated at paragraph 3.7 that, in their preparation, he had considered the following information:
·       Information he had gathered at onsite inspections;
·       Financial statements for the years ending 30 June 2014 and 2013;
·       Draft 2015 (Xero) financial statements;
·       Wage summaries and staff information;
·       Occupancy reports;
·       Information from various business brokers and other valuers;
·       Bizstats;
·       IBIS World Report, Industry Reports;
·       Information from the website of the D Business; and
·       For the May 2016 report, the Profit & Loss statements for the D Business for the period 1 July 2015 – 31 December 2015.
The focus of the cross examination conducted by senior counsel for the husband was on:
a)Whether Mr E’s valuation would have been different if he had the actual financial statements for the financial year ending 30 June 2015 rather than only the draft financial statement;
b)Whether he had appropriately treated depreciation in respect to the D Business;
c)Whether he had properly considered the IBIS World Report; and
d)Whether his normalisation adjustment in respect to the salary of the wife, from her actual salary of $140 000 to $70 000, was appropriate.
In responding to the questions asked of him in cross examination, Mr E relevantly responded with answers to the following effect:
·In determining the value of the real property he had endeavoured to make a determination of rent payable by the business according to each component.
·He specifically rejected the proposition advanced by senior counsel for the husband that, having regard to the IBIS World Report on [similar businesses] in Australia from March 2016, a rent expense of about 9.3 per cent would be appropriate and normal.
·In rejecting that proposition, he indicated that there was a significant variance in the calculation of appropriate rents for similar businesses in Sydney. That variation could be anywhere from $1500 per component up to $6000 per component depending on the business and its location in the Sydney market.
I am satisfied that it was appropriate for Mr E to rely on his experience in determining that the appropriate rent in respect to combined components at the D Business was $2521.
During the course of cross examination, senior counsel for the husband sought Mr E’s opinion as to the impact of the rental and rate payments as indicated in the actual financial statements for the financial year ended 30 June 2015 as opposed to the draft financial statements that were available at the time he prepared his report. This resulted in Mr E adding back, in relation to rent, the figure of $23 545 as opposed to the figures reflected in the actual financial statement for the financial year ended 30 June 2015 of $44 444.
In my opinion, Mr E was entitled to prepare his report based on the information available to him at the time. I accept his evidence that including the higher figure of $44 444 as reflected in the final financial statements for the financial year ended 30 June 2015 would not have significantly affected his valuation.
In respect to the issue of depreciation, I am satisfied that, despite a minor omission in his report, Mr E appropriately treated the issue of depreciation. In that respect he noted that the report was a “limited scope report” prepared in accordance with his instructions. His evidence was that despite his omission to make a specific reference to the issue, he followed the same process each time he prepared a report and that process involved the inclusion of depreciation.
Senior counsel for the husband also suggested to Mr E that if he had included in his calculations the actual salary paid to the wife of $145 200, rather than a notional salary of $72 598, it would have increased the value of the D Business.
That proposition was rejected by Mr E who indicated that including the higher salary would have reduced the profitability of the D Business which would have had a downward impact on its value.
In circumstances where the parties have every opportunity pursuant to the Family Law Rules 2004 (Cth) (“the Rules”) to seek additional information from a single expert prior to a final hearing there is, in my mind, a question as to the extent to which it is appropriate to expect a single expert to consider additional material that is provided to him or her shortly prior to or during a final hearing. However, no objection was taken to the questions asked of Mr E by senior counsel for the husband in respect to the new material put to him.
Even if I had accepted that the matters put to Mr E in cross examination were of significance, I note that paragraph 4 of both of Mr E’s reports indicate that his valuation was arrived at after the consideration of two “basic approaches” being:
·Income Based; and
·Market Based.
The questions asked of Mr E by senior counsel for the husband primarily concerned that first approach which, broadly speaking, considered the expected rates of return from the business.
Paragraph 4.3 of the report dated 29 October 2015 indicated that the collection and analysis of the business’ relevant historical financial statements was but one part of the valuation process and that part, as noted, related to the first method, namely the income based approach.
Paragraph 4.3 makes clear that, in addition to considering historical financial statements, the analysis:
a)“Researched and analysed transactional data from comparable businesses within the same industry”; and
b)“Applied Market approaches to determine an estimate of Fair Market Value”.
Paragraph 4.2 of both of Mr E’s reports explains that the market based approach involves the following:
The use of comparable sales of similar sole businesses as a guide to business market appraisal is one of the most important techniques for appraising businesses. The purpose of market approach is to compare the subject business with sales of similar businesses to estimate the value of the subject business relative to its peers. The timing of the sale, size of the comparable business, industry and the structure of the transaction must be analysed and compared with the subject businesses financial data. The market approach emphasises the principle of substitution, which assumes that an investor would gravitate towards the business with the lowest price if all other financial fundamentals and risks were the same.
The various methods of market appraisal that valuers use in practice are typically considered as subdivisions of these broad approaches. Valuation methods under the Market and Income approaches generally contain common characteristics such as measures of benefit streams, discount rates and/or capitalisation rates and multipliers.
With SME’s the Market Data method is often the most persuasive indicator of value.
(Emphasis added)
Paragraph 8 of Mr E’s report dated 29 October 2015 notes that, in taking the market based valuation approach; he considered comparable businesses at Camden, the Central Coast, Merrylands, Grays Point, Guildford and the Sutherland Shire.
In addition to the locations considered in the October 2015 report, Mr E’s report dated 10 May 2016 also considered comparable businesses at Bankstown, Punchbowl and Empire Bay.
Mr E was not challenged on his choice of those centres for comparison purposes.
Having considered the comparative sales in those locations, Mr E confirmed his opinion that the value of the D Business, as at May 2016, remained $3 800 000.
Subsequent to providing his report dated 10 May 2016, the solicitors for the husband, by letter dated 26 May 2016, wrote to Mr E seeking additional clarification in respect to the comparable sales listed in paragraph 7 of his report. The solicitors for the husband wrote:
In relation to each of the comparable sales you identify, please advise as to:
a)   The number of components available in each such business;
b)     The breakup of such components …;
c)     Gross sales/turnover of the business including the particulars of fees charged per component;
d)     Advice as to whether or not the sale included both real property and the business;
e)     If so, any apportionment made between the value of the real property and the value of the business;
f)   If so, was the business and real property sold on an “inglobo” or other basis;
g)     The yield on the real property by way of rental return;
h)     Valuation methodology adopted ie for example number of components, future maintenance, earnings or otherwise.
In response, by letter dated 1 June 2016, Mr E replied:
In relation to the sales evidence in section 7 of my report [dated 10 May 2016] I have listed all of the information that I based my appraisal on. You will note Column 4, indicated the number of [components]. Column 11 indicated whether the evidence was a freehold investment sale, a business leasehold sale or a going concern sale. Columns 8, 9, 10 show the break-up of sale price for each type of sale. Column 5 indicates the yield for the investment sale and calculated yield for the going concern sale.

Nevertheless, insofar as it is relevant, I prefer the evidence of the husband on this issue and find that the parties commenced cohabitation in 1994. In preferring the evidence of the husband, I note that his evidence was much clearer than that of the wife in respect to financial contributions he made to the acquisition of the V Street property and the X property. In fact, the wife conceded during cross examination that she could not recollect the husband making contributions to the deposit to acquire either of those properties but considered that it may have occurred.

Contributions

In September 1994 the wife purchased the V Street property for $152 500. The wife gave evidence that she paid the deposit from accumulated savings and borrowed the balance. I accept, however, the evidence of the husband that he contributed approximately $7000 towards the deposit required for that purchase.
In October 1996 the wife purchased the X property for the sum of $280 000. The wife stated that she acquired the property from accumulated savings and funds borrowed from the Commonwealth Bank. Once again, the wife stated that she could not recollect whether the husband contributed to the deposit for this purchase. In those circumstances I accept the evidence of the husband that he paid $56 000 towards the deposit for that purchase.
In 1992 the wife purchased a one-third interest of the D Business after working at the business since 1989.
In January 1997 the wife subsequently purchased a further seventeen percent interest in the D Business for the sum of $80 000, bringing her interest in the D Business to fifty per cent. There was no assertion by the husband that he made a direct contribution to that acquisition, although it occurred at a time subsequent to the parties commencing cohabitation.
In addition to her interests in the V Street property, the X property and the business and real property of the D Business, the wife deposed that she had superannuation entitlements, savings and a BMW motor vehicle.
At the time of cohabitation, noting my finding that cohabitation occurred in 1994, the husband owned the H Business and an interest in a hospitality business. The husband deposed that he also owned a BMW motor vehicle, a small motor boat and items of personal property as well as furniture and household effects. This evidence was not challenged.
In the period subsequent to cohabitation, I find that the parties jointly acquired V Street property and also the X property. The husband’s evidence that, subsequent to the purchase of the X property, the parties undertook substantial renovations was not challenged.
The husband gave evidence that, at around the time of the acquisition of the X property, he sold his interest in the hospitality business in two separate transactions for an amount totalling $370 000.
The husband deposed that he utilised the proceeds from the sale of his interest to contribute as follows:
a)To the acquisition of the X property;
b)To the operation of the H Business; and
c)To the acquisition of further service businesses.
The husband deposed that the remainder of the proceeds were deposited into his personal bank accounts.
The wife asserts that in 2000 or 2001 she purchased the remaining fifty per cent interest of the D Business for the sum of $230 000. The husband, on the other hand, asserted that the remaining interest was jointly purchased by the parties utilising funds loaned by the ANZ Bank.
I accept that, in 2000 and 2001, there was a substantial intermingling of the parties’ business and personal financial affairs. In these circumstances, the purchase of the remaining share in the D Business should be regarded as having occurred with joint funds.
In 2001 the parties bought an investment property at 1 O Street, Suburb DD for the sum of $195 000 and subsequently sold the property in May 2009 for $310 000. The wife’s evidence that outgoings in respect to that property were substantially met from rental income was not challenged.
The parties gave substantially similar evidence in respect to enhancements made to the D Business which, in 2001, had a total of thirty-nine components available. The Business is now substantially larger. As described in the reports of Mr E, the business now consists of four separate buildings that accommodate a maximum of more than twice the number of components.
It is acknowledged by both parties that until the birth of their first child, in 1998, the wife worked as a full time teacher at the D Business. The parties were in agreement that, throughout their marriage, the husband was the primary income earner and the wife was the primary carer of the parties’ children and homemaker.
I accept, however, that the wife continued to have a role in the administration and management of D Business and this continued after the birth of the parties’ second child, in 2001.
While not conceded by the husband, I accept the wife’s evidence that after the birth of the first child, she worked on average approximately twenty hours per week in respect to tasks associated with the administration and management of the D Business. Although, it seems that, subsequent to the birth of the second child, the wife primarily undertook that work from home.
The wife acknowledged that after the birth of the second child, the husband took over control of the finances of the family including the parties’ business interests.
The husband’s evidence of the role he played in respect to the expansion and improvement of the D Business in the period subsequent to 2001 was substantially unchallenged.
I also accept that the husband played a significant role in respect to the acquisition of properties to expand the D Business and also in respect to seeking relevant development approvals and liaising with architects, builders and the like associated with its expansion.

The husband’s business interests

The husband gave evidence that in 1998, he sold the fixtures and fittings of the H Business in the amount of approximately $60 000 - $70 000 with the remaining stock transferred to a business at Suburb Y.
The husband also asserted that in 1997, he became involved in sports promotion and hosted six sporting events at various venues. This included hosting a significant event at the Suburb P Sports Stadium. No evidence was provided regarding the revenue received by the husband from those events.
It was also accepted that in 1997, the husband commenced to operate a business at Suburb Z and in 1998 he acquired the leases for a business at Suburb M and another at Suburb N. Further in 2000, the husband acquired the lease for a business at Suburb P.
In 2002 the husband also commenced operation of two additional businesses in the Australian Capital Territory.
It appears that, in the period subsequent to 2003, MM Company embarked on a program of resuming control of businesses from private operators. By way of summary, the impact upon the husband’s businesses appears to have been as follows:
a)In 2003 the husband ceased to operate the business at Suburb Z and recalled receiving an amount of approximately $30 000 for its stock.
b)In 2006 MM Company resumed the businesses in the Australian Capital Territory and the husband recalled receiving a total amount of approximately $100 000 from the sale of its stock.
c)In 2007 the husband relinquished the Suburb N business lease and aside from some rental concessions prior to its closure, the husband did not recall receiving a lump sum upon its closure. The husband asserted that he transferred the stock from Suburb N to the business which he operated at Suburb M.
d)In 2009 the husband asserted that he leased a business at Suburb J from MM Company.
e)In late 2011 the husband ceased to operate his businesses at Suburb J and Suburb M as a result of MM Company selling its service business divisions to the XXX franchise. The husband recalled receiving, in total, approximately $55 000 from the sale of stock, fixtures and fittings.
The wife, however, submitted that the husband’s contribution to matrimonial property pool through the operation of the businesses should be significantly discounted as a result of:
a)The husband becoming involved in litigation with MM Company and subsequently BX Insurance, which resulted in an amount of $74 000 being required to be paid to BX Insurance and approximately $113 000 being applied towards legal fees;
b)As a result of an error made by Armaguard, resulting in a double deposit of funds, the husband incurred a debt of approximately $60 000 which has now increased to approximately $113 000.
Having considered the evidence of the parties in respect of the husband’s operation of the service businesses, I accept that the husband was unable to obtain the benefit of goodwill from the operation of those businesses substantially as a result of the decision of MM Company to sell its service business division to the XXX franchise. Nonetheless, it is clear that the parties benefited from the income generated by those businesses during the period that the husband was the operator.
It was common ground between the parties that there had been a significant intermingling of affairs and finances between the D Business, the Hamidou Family Trust account, the parties’ personal bank accounts, the husband’s C Pty Ltd accounts which related to the operation of his businesses as well as the parties’ mortgages.
In summary, the husband’s involvement in the businesses was a positive contribution to the parties’ matrimonial property pool. That overall contribution was reduced to a relatively minor extent as a result of the subsequent litigation and incurring of the debt as a result of the Armaguard transaction.
I accept the husband’s evidence that he made a significant contribution to matrimonial assets through the acquisition and subsequent sale of the retail business at Suburb P. I accept the husband’s evidence that he purchased the business in 2003 for approximately $20 000 and subsequently sold the business in 2007 for $400 000 with the balance of $100 000 paid by way of instalments through a vendor finance arrangement entered into with the purchaser. The wife’s failure to acknowledge the husband’s contribution through the acquisition and sale of the retail business, in the face of clear evidence of that having occurred, namely Exhibit N, was quite unsatisfactory.
While the wife did not acknowledge the significant profit made as a result of the acquisition and sale of the retail business, it is otherwise reasonable to assume that the husband’s evidence regarding the application of those funds is correct. The husband’s evidence was that the funds received from the sale were applied to reduce the parties’ liabilities, expand the D Business and towards costs associated with the improvements of the F property.

The F property

It was not disputed that, in 2002, the parties purchased vacant land at T Road, Suburb F for $430 000 and subsequently built a substantial dwelling on that land. Neither was it disputed that there had been substantial enhancements made by the parties to the F property including rectification of damage caused by fire in 2009.
Given the parties’ agreement as to the intermingling of their private and business finances, it is reasonable to assume that the acquisition of the land and construction and improvement of the former matrimonial home occurred through the utilisation of income largely derived from the parties’ business interests.

The Q Business

The husband was not challenged in respect to his evidence that he first identified a prospective site at K Road, Suburb L for a business in 2009. That site was purchased for the sum of $508 000 and subsequently became the Q Business.
It was common ground that the parties entered into a partnership, through the Hamidou Family Trust, with the ZZ family through the ZZ Family Trust.
It is reasonable to assume that Mr ZZ, whose building company had built the parties’ home at the F property, played a significant role in respect to the construction of the premises at the L property.
The husband was not challenged, however, as to his evidence in respect to his involvement in obtaining relevant licenses with the relevant government department. The husband also acknowledged that the wife played a role in the design of the layout of the business premises and in respect to developing the website for the Q Business and, with the husband, in employing staff.
It was accepted that the total cost of construction of the Q Business on the L property was approximately $1 106 313.52 and that the parties, through the Hamidou Family Trust, contributed approximately fifty percent of that amount. On 26 March 2014 interim orders were made, by consent, to facilitate the sale of the Q Business. Settlement for the sale occurred on 29 August 2014. The purchase price in respect to the L property upon was $2 400 000. The purchase price in respect to the Q Business was $1 500 000. The total purchase price of the business and real property was therefore $3 900 000.
After the payment of sale expenses, business loans and mortgages, the ZZ Family Trust and the Hamidou Family Trust each received a sum of approximately $932 809.
In turn, pursuant to orders of the Court, each of the parties subsequently received interim partial property distributions of $500 000 each. As at the date of the final hearing, the remainder of the funds received from the sale of the Q Business were held in two separate accounts, one with a balance of $113 601 and the other with the balance of $380 383.

The U Road property

In 2005 the parties sold the X property for $570 000. Simultaneously, they purchased from its purchaser the U Road property and the I Street property. The I Street property was subsequently utilised to extend the D Business and the U Road property was renovated with a view to it being leased. The husband stated that he was responsible for undertaking the extensive renovations of the property including the installation of a new kitchen with funds derived from the operation of the service businesses and the sale of the retail business.
However, insofar as the parties acknowledged the intermingling of business and private funds, I am satisfied that the parties’ joint funds were applied for the purposes of those renovations.

Post-separation contributions

In respect to Q Business the wife asserted that she had been responsible for the design, layout, fit and equipment purchases for the business. She stated that she had designed the premises and designed the website. She also asserted that she had been responsible for recruiting and training staff.
Whilst the husband acknowledged that the wife was responsible for the design of part of the premises, he asserted that she had retained a consultant to advise her in that respect. The husband acknowledged, however, that the wife had established the business’s website and was responsible for recruiting staff, with the husband. I accept the wife’s account of her contribution.
On 16 January 2012 the wife entered into a contract of employment with BB Corp Pty Ltd trading as Q Business. Her position was identified as being “Consultant …” and her salary identified as being $140 000 per annum. The wife was not challenged in respect to her evidence that she never received that salary as the husband continued to draw down the monthly salary of $12 000 until August 2014.
As will be discussed, a dispute arose in respect to the husband’s management of the Q Business.
It was acknowledged that, in November 2013, the husband relinquished control of the financial management of the D Business to the wife. The D Business appears to have since been returned to a position of profitability since that time. It was accepted that, in the financial year ending 2012, the business had incurred a loss of $67 514 and in the year ending 30 June 2013, the business incurred a loss of $116 177. In the financial year ending 30 June 2014, the business earned a profit of $88 518 and in the financial year ended 30 June 2015, the business returned a profit of $67 281.[13]
[13] Exhibit G.
While the husband would not concede that the day-to-day operation and management of the D Business fell to the wife, I am satisfied that the husband’s role was primarily managing the finances of the business. In arriving at that conclusion, I have had regard to the other business interests in which the husband was involved during the period of the marriage including the service businesses, sports promotions, the hospitality business and the retail business. It is reasonable to assume that he would simply not have had time to attend to such matters as dealing with staff and clients and preparing rosters, programs and newsletters. I am also satisfied that the husband lacked the adequate training to engage with the staff employed by the D Business in respect to their professional responsibilities.
Accordingly, I accept the wife’s evidence that she maintained overall responsibility for the administration, management and smooth operation of the D Business.
I am satisfied that, in the period subsequent to November 2014, in addition to those administration and management responsibilities, the wife further assumed responsibility for the financial management of the D Business.
Senior counsel for the husband referred to the D Business as the “gold mine” and the “jewel in the crown” of the parties’ matrimonial property. As noted, the wife has had consistent involvement in the administration, management and operation of the business. She also assumed its financial management in November 2013. The business has returned to profitability in the period subsequent to her assuming financial control. In those circumstances, her contribution in respect to the D Business should be given some additional recognition.
I am satisfied that the parties both did their best in respect to contributing to the matrimonial property pool during the period of their marriage. I accept that the husband was the primary income earner although he also contributed to the care of the children when time permitted. I am satisfied that the wife’s role was primarily as homemaker and parent although, as mentioned, she did play an important role in respect to the D Business and also a not-insignificant role in respect to establishment of the Q Business.
In summary, I am of the opinion that the wife’s involvement in the D Business, which has been described as “the gold mine” and “the jewel in the crown” of the parties’ matrimonial property, is such that she is entitled to additional recognition.
Accordingly, I assess the parties’ direct and indirect contributions as justifying an adjustment of the matrimonial property pool of 52.5 per cent in favour of the wife and 47.5 per cent in favour of the husband.

Section 75(2) factors

In terms of s 75(2)(a) the husband is 52 years of age and the wife is 49 years of age. Both are in relatively good health, although the husband states that, perhaps understandably, in the immediate period post-separation he suffered from depression. By his demeanour in the witness box, the husband appeared to still be emotionally affected by the events surrounding the parties’ separation and the relatively recent death of his mother.
In terms of s 75(2)(b) it is significant that the wife has continued to enjoy the income and profits generated by the D Business. I accept that for the financial year ending 30 June 2015 those benefits, obtained by the wife, were as stated by senior counsel for the husband:[14]
a)Wages - $2792 per week;
b)Rent received from the D Business - $4683 per week;
c)Rates - $209 per week;
d)Motor vehicle - $277 per week;
e)Mobile phone - $200 per week;
f)Superannuation - $265 per week; and
g)Profit - $1293 per week.
[14] Exhibit C1.

While I accept that the wife’s motor vehicle is no longer being paid through the D Business, it is nonetheless the case that the wife has received total financial benefits from the business (including income, profits and payment of expenses on her behalf) of between $400 000 and $500 000 per year and most likely closer to $500 000.
On the other hand, since August 2014, the husband has been without income. A relevant factor to that occurring was the wife’s involvement, with the partners of the Q Business, to terminate the husband’s employment as manager and director. The wife also insisted on terms of sale that precluded the husband being a purchaser of the business.
Nevertheless, a concerning aspect of the husband’s situation is that since November 2013, he has not managed to obtain alternative employment despite having considerable business skills. I note the husband’s evidence that he has given consideration to and attempted to engage in a number of business opportunities. However, he claims that his lack of resources has impeded that opportunity. I note that, at the final hearing, the wife, appropriately in my view, conceded that a fair and equitable adjustment of property would involve the husband receiving some payment and, on that basis, she consented on the final day of the hearing to the husband being paid the amount of approximately $494 000.
In making those orders prior to my delivering of my Reasons for Judgment, I was motivated by a desire to assist the husband getting back on his financial feet as soon as possible. The wife clearly has a substantial earning capacity, particularly if she is able to retain ownership of the D Business. The husband has demonstrated that he has substantial business skills. Indeed, the high standard of living that the parties have enjoyed during the course of their marriage is partly as a result of the husband exercising those skills. Nevertheless, I expect that it will be some period of time before the husband is able to re-engage in business activities to the same extent that he was previously.
Subject to other considerations, this is a factor justifying an adjustment pursuant to s 75(2) in the husband’s favour.
In terms of an additional consideration pursuant to s 75(2)(b), as noted above, I did not include the husband’s proprietary interest in the estate of his late mother in my identification of the property of the parties. It was agreed that the husband will receive a distribution of his late mother’s estate in his favour. The wife asserted that the husband will receive an amount in the sum of approximately $408 333 being a one-third share of the Suburb EE property. In addition it was asserted that the husband will receive a payment of $100 000 and will retain jewellery left to him according to his mother’s will.
On the other hand, as noted, the husband argued that the Court cannot, at this stage, identify the amount that the husband will receive as a result of potential claims that might be brought by the husband’s sister and the children of his brother.
On balance, however, having regard to the close relationship that the husband has maintained with his broader family, I find that it is more probable than not that the husband will receive an amount of approximately $500 000. This is a factor that reduces the extent of the adjustment that I would otherwise have made in his favour as a result of the order that I will make giving the wife the first opportunity to assume full responsibility for the operation of the D Business.
In terms of s 75(2)(c) I note that the wife has, during the course of the parties’ marriage, had primary responsibility for the care of the parties’ children. The children are, however, now nearly nineteen and fifteen years old and are increasingly becoming independent. While the parties disagreed as to the amount of time the children spend with each of their parents, I am satisfied that the children will increasingly make their own decisions and accordingly, I do not place significance on s 75(2)(c) in considering whether there should be any adjustment pursuant to s 75(2).
In terms of s 75(2)(d) and (e) I note that that a significant source of disagreement between the parties is the support that the husband has provided to his broader family and in particular, his sister. It is reasonable to assume that the husband will maintain a close involvement with Ms B. However, I note that Ms B is a beneficiary under their late mother’s will and it could reasonably be expected that she should soon be in a position to establish her independence. Accordingly, I do not regard the husband’s possible ongoing assistance to his sister as being a matter of significance.
In terms of s 75(2)(f) neither party is in receipt of government benefits and I note that the parties have agreed that their respective superannuation entitlements should be included in considering their respective matrimonial property.
In terms of s 75(2)(g) I note that, prior to separation, the parties enjoyed a high standard of living. The wife has been able to substantially maintain that standard of living as a result of benefits she has obtained through the operation of the D Business.
The husband, however, has not fared as well. In the period immediately subsequent to separation, he resided in his business premises and since August 2014, has not had access to the same financial resources as the wife. Indeed, as previously noted he found it necessary to borrow funds from Mr HH and Ms YY in that period.
On the other hand, I note that the husband has, with the wife, had the benefit of interim property distributions to which I have referred.
In terms of s 75(2)(h) I note that the wife voiced concern that the husband has not paid maintenance to the wife and on one occasion, the husband apparently sought an order for spousal maintenance from the wife. In circumstances where the wife has had access to income generated by the D Business and both parties have had the benefit of interim property distributions, I do not regard this factor as being relevant.
In terms of s 75(2)(j) I have noted the parties’ respective involvement in their various businesses. Until November 2013 the husband maintained overall financial responsibility for the D Business. However it appears that each party supported the other in respect to their engagement in those businesses. The husband primarily engaged in the service businesses and the wife primarily through her involvement in the D Business. I conclude that each party supported the other in respect to their involvement in their businesses.
In terms of s 75(2)(k) the parties were married for a period of fourteen years. However, I do not make any finding that the period of marriage has adversely affected the earning capacity of either party. In that respect, the wife has been able to maintain her involvement in the D Business and the husband in his businesses.
In terms of s 75(2)(m) I note that each of the parties are in a new relationship. However, neither of the parties currently resides with their partner and there was no evidence regarding the financial relationship that the parties have with their current partner. Accordingly, I do not regard this as a relevant consideration.
In respect of s 75(2)(o), as noted, the orders I make will provide for the wife to have the first option of acquiring the D Business and in the event that she is able to acquire the business, she will be in a position to maintain the high income and other benefits that she has previously enjoyed. On the other hand, as I have noted, it will be some time before the husband is able to fully engage in business activities.
Senior counsel for the husband submitted that I should make an additional adjustment in favour of the husband as a result of the manner in which the wife conducted this litigation. Some of those criticisms, including pressing allegations of inappropriate expenditure in the absence of concrete evidence, are justified. On the other hand, the manner in which the husband conducted his case could also be the subject of some criticism. This is particularly the case in respect to the alleged loans form Ms B, Mr HH and Ms YY. The presentation of the husband’s evidence regarding the extent to which monies had been or had not been repaid to Ms B, in particular, could be described as untidy at best.
The length of this judgment is itself an indicator that both parties could have presented their respective cases in a more focussed and discerning manner. However, in the circumstances, I do not intend to make any adjustment as a result of the manner in which the parties conducted their respective cases.
In evaluating all of the relevant s 75(2) factors to which I have referred, I have placed greatest weight on the disparity in earning capacities between the wife and the husband. As a result of that disparity I would have made an adjustment in the husband’s favour of 5 per cent. In doing so I would have had regard to the fact that an impediment on the husband’s earning capacity is the circumstances in which he was removed from the management of the Q Business and precluded from being a purchaser of the business.
However, I note that it is likely that the husband will receive a distribution from his mother’s estate in the order of $500 000. That fact has reduced the adjustment that I would otherwise have made in his favour pursuant to s 75(2). In the circumstances, I will therefore make an adjustment pursuant to s 75(2) in the husband’s favour of 2.5 per cent.

Conclusion and overview

Accordingly, having had regard to the matters set out in s 79 of the Act, including by reference to relevant considerations under s 75(2), I intend to make orders for there to be an equal adjustment of the parties’ property interests.
As previously noted, the total net assets of the parties is $4 337 583. An equal division of the total net assets of the parties would have each party retain approximately $2 168 791.50 of the total net assets.
As identified by the Court, the wife currently retains or has had the benefit of:

Description Value

The F property $1 562 500

D Business $3 800 000

Furniture & contents of the F property $34 147

BMW … motor vehicle (…) $48 500

Commonwealth Bank account #7847 $113 601

Commonwealth Bank account #1723 $380 383

Commonwealth Bank trading account #0706 $19

Commonwealth Bank D Business cheque account #0765 $8418

Commonwealth Bank Funding Grant #4255 $1591

Commonwealth Bank D Business Rent Account (0115) $21 274

Credit loan account with D Business $401 752

Paid legal fees $289 313

Care Superannuation $150 000

$6 811 498

Less

The F property -$687 990

D Business (property loan) -$1 750 000

D Business (business loan) -$298 148

Commonwealth Bank business MasterCard (0411) -$19 859

Personal tax liability for 2015 -$92 982

-$2 848 979

TOTAL $3 962 519

Accordingly the wife holds net assets to the sum of $3 692 519, which exceeds her entitlement by $1 793 727.50.
As identified by the Court, the husband currently retains or has had the benefit of:

Description Value

The U Road property $580 000

Furniture & contents in the husband’s possession $7412

BMW … motor vehicle (…) $26 300

BMW … motor vehicle (…) $24 100

… motorbike (…) $5900

Bike trailer $3000

Toyota motor vehicle (…) $4800

Boat (…) $20 000

ANZ Etrade Account (…455) $66

Westpac Classic Account #3293 $230

Commonwealth Bank C account #4550 $2611

NAB account #6766 $2251

Loan to Mr PP for van $10 090

Paid legal fees $113 630

TT Superannuation $88 457

$888 847

Less

The U Road property -$349 605

Husband’s ANZ personal credit card -$50 582

Westpac (re Armguard issue) (5788) -$113 593

-$513 780

TOTAL $375 067

Accordingly the husband holds net assets to the sum of $375 067, which leaves him with a shortfall of $1 793 724.50.
However, as outlined at [71] above, consent orders were made on the last day of the final hearing which provided for the husband to receive the benefit of the remaining proceeds of sale from the Q Business in the amount of $493 984 (being Commonwealth Bank accounts #7847 and #1723). This means that the husband has therefore received an additional sum of $493 984 which reduces the amount the wife is required to pay to the husband to $1 299 740.50.
The Orders will provide for the wife to retain the D Business. This is because she has retained a more significant role in its management, administration and operations. She has also more recently taken over its financial administration and successfully restored the D Business to a profitable enterprise.
I will, however, accede to the husband’s proposal that the wife pay to the husband the sum of $1 299 740.50 within three months from the date of the Orders. I will further accede to his proposal to include default provisions that, in the event that the wife is unable to raise such funds by the expiration of the three month period, the husband will be given the first opportunity to acquire the D Business.

The alternative

In the event that the wife is unable to raise the funds to pay the husband the sum of $1 299 740.50 within three months from the date of the Orders and the husband has the opportunity to retain the D Business, the wife would retain the following:

Description Value

The F property $1 562 500

Furniture & contents of the F property $34 147

BMW … motor vehicle (…) $48 500

Paid legal fees $289 313

Care Superannuation $150 000

$2 084 460

Less

The F property -$687 990

Personal tax liability for 2015 -$92 985

-$780 975

TOTAL $1 303 485

The wife would then hold net assets in the sum of $1 303 485, which would leave her with a shortfall of $865 306.50 for which she would require payment from the husband.
Meanwhile, noting those assets and liabilities associated with the D Business, the husband would retain the following:

Description Value

The U Road property $580 000

D Business $3 800 000

Commonwealth Bank account #7847 $113 601

Commonwealth Bank account #1723 $380 383

Commonwealth Bank trading account #0706 $19

Commonwealth Bank D Business cheque account #0765 $8418

Commonwealth Bank Funding Grant #4255 $1591

Commonwealth Bank D Business Rent Account (0115) $21 274

Credit loan account with D Business $401 752

Furniture & contents in the husband’s possession $7412

BMW … motor vehicle (…) $26 300

BMW … motor vehicle (…) $24 100

… motorbike (…) $5900

Bike trailer $3000

Toyota motor vehicle (…) $4800

Boat (…) $20 000

ANZ Etrade Account (…455) $66

Westpac Classic Account #3293 $230

Commonwealth Bank C account #4550 $2611

NAB account #6766 $2251

Loan to Mr PP for van $10 090

Paid legal fees $113 630

TT Superannuation $88 457

$5 615 885

Less

The U Road property -$349 605

D Business (property loan) -$1 750 000

D Business (business loan) -$298 148

Commonwealth Bank business MasterCard (0411) -$19 859

Husband’s ANZ personal credit card -$50 582

Westpac (re Armguard issue) (5788) -$113 593

-$2 581 787

TOTAL $3 034 098

The husband would then hold net assets in the sum of $3 034 098, which would exceeds his entitlement by $865 306.50.
Accordingly, the default provisions in the Orders will be framed to include a payment to the wife of $865 307 from the husband within three months in the event that he is given that opportunity to acquire the D Business.
The husband proposed that in the event that neither party is able to retain the D Business, the real property and business of the D Business be sold. I am of the view that, in those circumstances, that would be an appropriate course of action. However, as the orders proposed by the husband in that respect are not satisfactory in light of the Court’s findings, I will order that the parties each submit a Minute of Order setting out their proposals for the sale of the D Business and the division of the proceeds of sale after associated costs, in the event a sale becomes necessary, to reflect the equal adjustment of the parties’ property interests which I have determined to be the appropriate adjustment in this matter.
Otherwise, in accordance with both parties’ proposals, the parties’ superannuation interests will be remain untouched by these Orders.
I regard the proposed adjustment of the parties’ property interests as appropriate in circumstances where:
a)Both of the parties have made substantial direct and indirect contributions to the matrimonial property;
b)The wife will have the first opportunity to retain the D Business and maintain a comfortable lifestyle;
c)The husband will receive additional funds to enable him to apply his business talents to another endeavour or endeavours; and
d)The husband is likely to obtain the benefit of his mother’s inheritance. While there is some uncertainty about the final outcome I consider that the inheritance is likely to be in the vicinity of approximately $500 000.
Accordingly, I make the orders as set out at the commencement of these reasons for judgment.

I certify that the preceding three hundred and nine (309) paragraphs are a true copy of the reasons for judgment of the Honourable Justice McClelland delivered on 21 October 2016.

Associate:

Date: 21 October 2016

Description	Value
The F property	$1 562 500
D Business	$3 800 000
Furniture & contents of the F property	$34 147
BMW … motor vehicle (…)	$48 500
Commonwealth Bank account #7847	$113 601
Commonwealth Bank account #1723	$380 383
Commonwealth Bank trading account #0706	$19
Commonwealth Bank D Business cheque account #0765	$8418
Commonwealth Bank Funding Grant #4255	$1591
Commonwealth Bank D Business Rent Account (0115)	$21 274
Credit loan account with D Business	$401 752
Paid legal fees	$289 313
Care Superannuation	$150 000
$6 811 498
Less
The F property	-$687 990
D Business (property loan)	-$1 750 000
D Business (business loan)	-$298 148
Commonwealth Bank business MasterCard (0411)	-$19 859
Personal tax liability for 2015	-$92 982
-$2 848 979
TOTAL	$3 962 519

Description	Value
The U Road property	$580 000
Furniture & contents in the husband’s possession	$7412
BMW … motor vehicle (…)	$26 300
BMW … motor vehicle (…)	$24 100
… motorbike (…)	$5900
Bike trailer	$3000
Toyota motor vehicle (…)	$4800
Boat (…)	$20 000
ANZ Etrade Account (…455)	$66
Westpac Classic Account #3293	$230
Commonwealth Bank C account #4550	$2611
NAB account #6766	$2251
Loan to Mr PP for van	$10 090
Paid legal fees	$113 630
TT Superannuation	$88 457
$888 847
Less
The U Road property	-$349 605
Husband’s ANZ personal credit card	-$50 582
Westpac (re Armguard issue) (5788)	-$113 593
-$513 780
TOTAL	$375 067