Kleine & Kleine
[2021] FedCFamC1F 51
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Kleine & Kleine [2021] FedCFamC1F 51
File number(s): SYC 2944 of 2019 Judgment of: ALTOBELLI J Date of judgment: 15 September 2021 Catchwords: FAMILY LAW – undefended property hearing – where ascertaining the asset pool rendered difficult because of the respondent’s non-disclosure – assessment of contribution and future needs- spousal maintenance- costs Legislation: Child Support (Assessment) Act 1989 (Cth) s 123
Family Law Act 1975 (Cth) ss 72, 74, 75, 77A, 90SF, 90SM, 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 1.33, 12.17
Cases cited: Allesch v Maunz (2000) 203 CLR 172; [2000] HCA 40
Bevan & Bevan (2013) FLC 93-545; [2013] FamCAFC 116
Britt & Britt (2017) FLC 93-764; [2017] FamCAFC 27
Chorn & Hopkins [2004] FamCA 633
Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248; [1993] FCA 801
In the Marriage of Hickey (2003) FLC 93-143; [2003] FamCA 395
Kennon v Kennon (1997) FLC 92-757; [1997] FamCA 27
Kowaliw & Kowaliw (1981) FLC 91-092
Parke & The Estate of the Late A Parke (2016) FLC 93-748
Stanford & Stanford (2012) 247 CLR 108; [2012] HCA 52
Taylor v Taylor (1979) 143 CLR 1; [1979] HCA 38
Thompson & Finch [2021] FamCAFC 3
Vass & Vass (2015) 53 Fam LR 373; [2015] FamCAFC 51
Vautin v Vautin (1998) FLC 92-827; (1998) FLC 92-827
Weir & Weir (1993) FLC 92-338; [1992] FamCA 69
Yunghanns v Yunghanns (2000) FLC 93-029; [2000] FamCA 681
Division: Division 1 First Instance Number of paragraphs: 101 Date of last submission/s: 29 June 2021 Date of hearing: 29 June 2021 Place: Sydney (via videoconference) Counsel for the Applicant: Mr O’Reilly Solicitor for the Applicant: Solari & Stock Lawyers The Respondent: Did not appear ORDERS
SYC 2944 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS KLEINE
Applicant
AND: MR KLEINE
Respondent
ORDER MADE BY:
ALTOBELLI J
DATE OF ORDER:
15 SEPTEMBER 2021
THE COURT ORDERS:
DEFINITIONS:
For the purpose of these Orders
A.Applicant means Ms Kleine born 1971;
B.Respondent means Mr Kleine born 1973;
C.Parties means the Applicant and the Respondent;
D.1 C Street means the premises situated at and known as 1 C Street, Suburb B in the State of New South Wales, being properly described as Folio Identifier … and improvements thereon and registered in the Respondent's sole name;
E.2 C Street means the premises situated at and known as 2 C Street, Suburb B in the State of New South Wales, being properly described as Folio Identifier … and improvements thereon and registered in the name of D Company ACN …;
F.1 C Street Mortgage means the mortgage registered on the title to the 1 C Street, Suburb B in the State of New South Wales, being properly described as Folio Identifier … with the Respondent as Mortgagee and E Pty Limited as Mortgagor, pursuant to registered mortgage …, being the E Pty Ltd loan account numbers …77 and …18;
G.2 C Street Mortgage means the mortgage registered on the title to the 2 C Street, Suburb B in the State of New South Wales, being properly described as Folio Identifier … with the Trustee of F Pty Limited ACN … as Mortgagee and Commonwealth Bank of Australia as Mortgagor, pursuant to registered mortgage …;
H.D Company means the company D Limited with ACN …;
I.F Company means the company F Pty Ltd ACN … of which the Applicant and the Respondent are the directors and equal shareholders and which is the trustee of the G Super Fund;
J.The SMSF means G Super Fund, the self-managed superannuation fund of which F Pty Ltd ACN … is the trustee created by a Deed dated 9 January 2013;
K.The H Fund means the H Trust, of which the Respondent is the member spouse, Member Number …;
L.Accountant means Ms K of L Accountants, M Street, Suburb B; and
M.N Storage means the self-storage facility located at P Street, Suburb B.
Self-Managed Superannuation Fund
1.That in accordance with s 90XT(l)(b) of the Family Law Act 1975 (Cth) (‘the Act’):
1.1the Applicant is entitled to be paid the specified percentage of each splittable payment from the Respondent's interest in the SMSF;
1.2the Respondent's entitlement (or the entitlement of such other person to whom a payment may be made out of the Applicant's interest) in the SMSF is correspondingly reduced by force of this Order;
1.3the specified percentage for the purposes of this Order is 100%.
2.That the parties, in their capacity as Directors of the Trustee of the SMSF, shall do all such acts and things and sign all such documents as may be necessary to:
2.1calculate, in accordance with the requirements of the Act and the Familv Law (Superannuation) Regulations 2001 the entitlement awarded to the Applicant in clause 1.3 of this Order;
2.2pay the entitlement whenever the Trustee make a splittable payment out of the Respondent's interest in the SMSF.
3.That Order l shall have effect from the operative time and the operative for that Order is four business days after the date when a sealed copy of these Orders is served on the SMSF.
4.That the Trustee shall convene a meeting within seven days after receipt of the Rule 7A.05 request and in that meeting do all such act and things, and sign all such documents as may be necessary to create a new interest for the Applicant from the transferable benefits in accordance with Rule 7A.11 of the Superannuation Industrv (Supervision) Regulations 1994.
5.That in the event of any dispute arising between the parties in the exercise of their powers as directors of the Trustee of the SMSF, the Trustee shall appoint an arbitrator nominated by the President of the Institute of Chartered Accountants.
6.That the Accountant be appointed as the SMSF accountant to implement these Orders.
7.That contemporaneously with the transfer of the transferable benefits from the Respondent's interest in the SMSF to an interest in the name of the Applicant in the SMSF, the Respondent shall forthwith do and sign all documents necessary to:
7.1Resign as a member of the SMSF in accordance with the Rules;
7.2Resign as a director and secretary of the Trustee and transfer all shares held by him in the Trustee to the Applicant.
8.Pending the transfer of the transferable benefits from the Respondent to the Applicant:
8.1each party is restrained from dealing with, charging, encumbering or disposing of any of the assets of the SMSF other than in accordance with the terms of these Orders; and
8.2each party shall immediately revoke any binding death benefit nomination already made and each party be, and is hereby, restrained from:
8.2.1making any binding death benefit nomination in favour of a child described in Regulation 13 of the Family Law (Superannuation) Regulations 2001.
8.2.2making any other nomination where the effect of such nomination would be to render any splittable payment not splittable; and
8.2.3doing any such act or thing which would defeat, extinguish or reduce the entitlement of either party under this Order.
8.3That the SMSF shall meet the costs incurred in complying with this Order.
9.The Respondent hereby indemnifies the Applicant and keeps the Applicant indemnified against all liability of and in relation to the SMSF including any debt personally guaranteed by the Applicant, and including any unpaid income tax or other tax assessed or hereafter assessed against the Applicant in respect of income derived or deemed to have been derived by the SMSF inclusive of tax liabilities, interest, penalties, costs and fines and from all proceedings, costs, claims or demand in respect thereof.
10.The Respondent hereby indemnifies the Applicant and keeps the Applicant indemnified and be solely responsible for all actions of the SMSF as Trustee up to the date of the Respondent resigning as director, secretary and member of the SMSF.
11.The parties, in their capacity as Directors of the Trustee company acknowledge by this Order that the SMSF has been afforded procedural fairness in the making of these Orders.
H Trust
12.That:
12.1Pursuant to s 90XT(l)(a) of the Act, whenever a splittable payment becomes payable from the Respondent's interest in the H Fund the Trustee shall pay to the Applicant the entitlement calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, using a base amount of $66,367.28 and there is a corresponding reduction in the entitlement that the Respondent would have been made but for these orders.
12.2That Order 12.1 have effect from the operative time.
12.3The operative time for this Order is four business days after the day a certified copy of the sealed orders is served upon the Trustee of the H Fund.
12.4Having been accorded procedural fairness the Trustee of the H Fund be bound to observe the provisions in Order 12.1 and the requirements pursuant to the Act and the Family Law (Superannuation) Regulations 2001.
12.4.1That within 14 days of this Order being made:
12.4.2The Applicant serve a sealed copy of this Order upon the Trustee of the H Fund; and
12.4.3The Applicant give notice in writing to the Trustee of the H Fund pursuant to regulation 72 of the Family Law (Superannuation) Regulations 2001.
12.5There be liberty to apply to each party and the Trustee of the H Fund in relation to the implementation of the Orders affecting the superannuation interest.
12.6That until the happening of any of:
12.6.1the establishment of a separate account in the name of the Applicant in the Fund; or
12.6.2the transfer or "rolling over" into another Superannuation Fund of the payment split created by Order 12.1 herein; or
12.6.3the Applicant satisfies a condition of release and is paid the payment split which was created by Order 12. I herein; or
12.6.4The Applicant executes a waiver of rights within the meaning of s 90(XZA) of the Act in relation to the payment split created by Order 12.1 herein;
12.6.5the Respondent be and is hereby restrained by himself his servants or agents from executing a Death Benefit Nomination in favour of any person or doing any other act or thing which would render any part of his interest in the H Fund a "not splittable payment" within the meaning of Regulation 12 or 13 of the Family Law (Superannuation) Regulations 2001.
Property
13.That the Respondent be restrained by injunction from drawing down, encumbering or otherwise dealing with the 1 C Street Mortgage.
14.That the Applicant is hereby appointed as Trustee of the Respondent to effect this Order and is empowered to forthwith do all acts and things and sign all documents necessary to effect the sale of the following assets:
14.1 All the Respondent’s shares in J Group;
14.2The Respondent's share in the R Company;
14.3All shares held by D Pty Limited (of which the Respondent is the sole Director), such shares including but not limited to the shares held by Commonwealth Securities Limited;
14.4The Respondent's aircraft kit; and
14.5All furniture items, tools and workshop equipment located in the N Storage facility held in the name of the Respondent.
15.That the appointment of the Applicant as Trustee of the Respondent shall be sufficient authority to the relevant companies and/or organisations to take instructions from the Applicant in relation to the sales pursuant to Order 14 hereof.
16.That the net proceeds of the sales as referred to in Order 14 hereof be deposited into the S Trust Account and thereafter the net proceeds be applied to reduce the 1 C Street Mortgage.
17.That upon completion of the sale of assets pursuant to Order 14 above or in the event that the Applicant is unable to sell any of the above assets at Order 14 above within three months from the date of these Orders, the parties forthwith do the following:
17.1the Respondent do all acts and things and sign all documents necessary so as to transfer to the Applicant all his right, title and interest in 1 C Street;
17.2Simultaneously with the Transfer at 17.1 above, the Applicant do all acts and things and pay all monies so as to discharge the 1 C Street Mortgage; and
17.3That the Respondent do all acts and things and sign all documents to give effect to Orders 17.l and 17.2 hereof and in the event that the Respondent does not sign the documents necessary to effect these Orders within 14 days of forwarding any such document to him then the Applicant is hereby appointed as Trustee for the Respondent in relation to the Transfer of 1 C Street and discharge the 1 C Street Mortgage pursuant to these Orders and the Applicant is empowered to do all things and sign all necessary documents on behalf of the Respondent to give effect to these Orders.
18.That in the event that the parties are unable to do all acts and things and pay all monies so as to discharge the liabilities secured over 1 C Street, within three months from the date of these Orders ("the default date"), the Respondent as the registered proprietor of 1 C Street thereafter do all acts and things necessary to cause 1 C Street to be listed for sale on the following terms and conditions:
18.1The Applicant is hereby appointed as Trustee for the Respondent on the sale of the 1 C Street and the discharge of mortgage over 1 C Street pursuant to these Orders and the Applicant is empowered to do all acts and things and sign all necessary documents on behalf of the Respondent to give effect to these Orders.
18.21 C Street shall be listed for sale by auction with a Real Estate Agent nominated by the Applicant ("the Agent").
18.3the Applicant's solicitors shall be instructed to act on the sale of 1 C Street and shall provide to the Respondent and/or the Respondent's solicitors such information as they may reasonably require from time to time.
18.4the reserve price of the property shall be as recommended by the Agent;
18.5the auction shall take place at the earliest date as recommended by the Agent;
18.6the auctioneer shall be as nominated by the Agent;
18.7the Applicant and the Respondent shall each cooperate in every way with the Agent including (without limiting the generality of the foregoing):
18.7.1making the key available to the Agent;
18.7.2allowing inspection of 1 C Street at all reasonable times requested by the Agent;
18.7.3doing or saying nothing to hinder or prevent a sale being effected;
18.7.4ensuring 1 C Street is in a neat and clean condition at the time of inspection by the Agent and prospective purchasers; and
18.7.5signing all documents requested by the Agents in relation to the listing for sale of 1 C Street except a contract or agreement for sale which has not been authorised by the parties’ solicitors.
18.8That in the event that 1 C Street does not reach reserve price at the auction, the parties shall negotiate with the highest bidders or any such interested persons and effect the sale of 1 C Street at a selling price as agreed between the parties, or failing agreement on the day of auction the parties shall accept the recommendation of the Agent and/or the Auctioneer as to the selling price of 1 C Street and shall sell 1 C Street at that price;
18.9In the event that 1 C Street is not sold by auction or by private negotiation within 14 days after the said auction then the patties shall do all acts and sign all necessary documents and pay all moneys as necessary to procure a second auction within a further five weeks of the date otherwise upon the same terms and conditions as applied to the first auction except the reserve price be reduced by 10% or otherwise agreed upon between the parties.
18.10That for the purpose of the transfer or sale of 1 C Street referred to in these Orders:
18.10.1Each of the parties will instruct their representatives to do all acts and things and sign all documents necessary to give effect to the settlement via the electronic conveyancing platform, Property Exchange Australia known as PEXA ("the electronic conveyancing platform");
18.10.2In the event either party is self-represented at any time, then that party will nevertheless instruct a subscriber to the electronic conveyancing platform for the purposes of the settlement, and will meet their own costs of the practitioner instructed by them; and
18.10.3The parties will pay their own electronic conveyancing fees and in the event one party meets the other party's fees at the date of settlement, the party who did not pay their own fees will reimburse the other party within seven (7) days of the date of settlement.
19.Upon completion of sale of 1 C Street the proceeds of sale be paid in the following manner and priority:
19.1all costs and expenses of sale, including legal costs and disbursements, Agent’s commissions, advertising expenses, Valuer's fees and auction expenses;
19.2In discharge of the 1 C Street Mortgage;
19.3In payment to the Applicant, the balance then remaining.
20.That in the event that 1 C Street is unable to be sold on its own after a period of 90 days from the date of the second auction pursuant to Order 18.9 above, then the parties forthwith do all acts and things necessary to cause 1 C Street and 2 C Street to be listed for sale together, on the following terms and conditions:-
20.1The Applicant is hereby appointed as Trustee for the Respondent on the sale and discharge of mortgage over 1 C Street pursuant to these Orders and the Applicant is empowered to do all things and sign all necessary documents on behalf of the Respondent to give effect to these Orders.
20.2On the basis that at the time of this sale the Respondent has pursuant to Order 7 hereof, resigned as director and the Applicant is the sole director of the Trustee of the SMSF or if not, then the Applicant is hereby appointed as trustee for the Respondent for the purposes of his role as director of the Trustee of the SMSF for the sale and discharge of mortgage over 2 C Street pursuant to these Orders, and the Applicant is empowered to do all acts and things and sign all necessary documents on behalf of the Respondent to give effect to these Orders.
20.31 C Street and 2 C Street shall be listed for sale by auction with a Real Estate Agent nominated by the Applicant ("the Agent").
20.4the Applicant's solicitors shall be instructed to act on the sale of 1 C Street and 2 C Street and shall provide to the Respondent and/or the Respondent's solicitors such information as they may reasonably require from time to time.
20.5the reserve price of 1 C Street and 2 C Street shall be as recommended by the Agent;
20.6the auction shall take place at the earliest date as recommended by the Agent;
20.7the auctioneer shall be as nominated by the Agent;
20.8the Applicant and the Respondent shall each cooperate in every way with the Agent including (without limiting the generality of the foregoing):
20.8.1making the key available to the Agent;
20.8.2allowing inspection of 1 C Street and 2 C Street at all reasonable times requested by the Agent;
20.8.3doing or saying nothing to hinder or prevent a sale being effected;
20.8.4ensuring 1 C Street and 2 C Street is in a neat and clean condition at the time of inspection by the Agent and prospective purchasers; and
20.8.5signing all documents requested by the Agents in relation to the listing for sale of 1 C Street and 2 C Street, except a contract or agreement for sale which has not been authorised by the parties’ Solicitors.
20.9That in the event that Lot l and 2 C Street do not reach reserve price at the auction, the parties shall negotiate with the highest bidders or any such interested persons and effect the sale of 1 C Street and 2 C Street at a selling price as agreed between the parties, or failing agreement on the day of auction the parties shall accept the recommendation of the Agent and/or the Auctioneer as to the selling price of 1 C Street and 2 C Street and shall sell it at that price.
20.10In the event that 1 C Street and 2 C Street are not sold by auction or by private negotiation within 14 days after the said auction then the parties shall do all acts and sign all necessary documents and pay all moneys as necessary to procure a second auction within a further five weeks of the date, otherwise upon the same terms and conditions as applied to the first auction except the reserve price be reduced by 10% or otherwise agreed upon between the parties.
20.11That for the purpose of the transfer and sale of 1 C Street and 2 C Street referred to in these Orders:
20.11.1Each of the parties will instruct their representatives to do all acts and things and sign all documents necessary to give effect to the settlement via the electronic conveyancing platform, Property Exchange Australia known as PEXA ("the electronic conveyancing platform");
20.11.2In the event either party is self-represented at any time, then that party will nevertheless instruct a subscriber to the electronic conveyancing platform for the purposes of the settlement, and will meet their own costs of the practitioner instructed by them; and
20.11.3The parties will pay their own electronic conveyancing fees and in the event one party meets the other party’s fees at the date of settlement, the party who did not pay their own fees will reimburse the other party within seven days of the date of settlement.
21.Upon completion of sale of 1 C Street and 2 C Street, the proceeds of sale be paid in the following manner and priority:
21.1all costs and expenses of sale, including legal costs and disbursements, Agent's commissions, advertising expenses, valuer's fees and auction expenses to be shared between the patties and the SMSF;
21.2in discharge of the 1 C Street Mortgage and the 2 C Street Mortgage;
21.3in payment to the SMSF, the sum equivalent to the market value of 2 C Street, the market value being the value provided by Mr O of T Valuers in his expert valuation report filed in these proceedings less costs and expenses of the SMSF as referred to in Order 21.1 hereof; and
21.4in payment to the Applicant, the balance then remaining, if any.
Spousal Maintenance
22.That pursuant to s 72 of the Act, the Respondent pay periodic spousal maintenance to the Applicant in the sum of $700 per week, commencing seven days after the date of this order, and for a period of five years.
Other Orders
23.That within seven days from the date of these orders, the Respondent shall do all acts and things necessary to cause the recreational boat registration number … to be transferred to the sole name of the Applicant and the Applicant shall hereby indemnify the Respondent and keep him indemnified in relation to all liabilities in respect of the said boat, whenever howsoever arising.
24.That the Respondent do all acts and things and sign all documents to give effect to Order 23 above, and in the event that the Respondent does complete the transfer referred to Order 23 to give effect to these Orders within 14 days of written request from the Applicant to transfer the recreational boat into the Applicants name, then the Applicant is hereby appointed as Trustee of the Respondent for the purposes of the transfer and the Applicant is empowered do all things and sign all necessary documents on behalf of the Respondent to give effect to Order 23.
25.That the Applicant be declared to have the sole right, title and interest in the following items and the Respondent shall within seven days from the date of these Orders do all acts and things so as to deliver the below items to the Applicant:
25.1The Motor Vehicle 1 registered in the Applicant's name; and
25.2The sculpture.
26.That in the event that the Respondent fails to deliver the items in Order 25 above within seven days to the Applicant, then the Respondent hereby authorises N Storage facility to provide access to the Applicant to the above items and hereby authorises the Applicant to remove the above items from the N Storage facility and this Order shall be sufficient authority to the N Storage facility to release the items to the Applicant.
27.That the Applicant is hereby authorised to provide a copy of these Orders to any company and/or organisation to give effect to these Orders.
28.That unless otherwise specified in these Orders:-
28.1each party be solely entitled to all real estate, chattels, goods, motor vehicles, furniture, furnishings businesses and any other property in the possession of such party as at the date of these Orders;
28.2each party be solely entitled to any moneys shares and debentures which stand in such party's name as at the date of these Orders;
28.3each party be solely entitled to any superannuation benefits held in such party’s name and each party hereby foregoes any claim they may have to any superannuation benefits belonging to or earned by the other; and
28.4each party be solely liable for and indemnify the other against any debt, loan or liability whatsoever held in such party's name as at the date of these Orders.
29.That in the event that either party refuses or neglects to execute any deed or instrument within seven days of that deed or instrument being forwarded to him or her or his or her solicitor, an officer of the Court is hereby appointed pursuant to section 106A of the Act, to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation of the deed or instrument. That the Registrar or Deputy Registrar or other Officer is authorised to execute any such necessary instrument upon being satisfied by Affidavit that refusal, neglect or default, as the case may be, has occurred.
30.The Respondent pay the Applicant’s costs of and incidental to the proceedings on an indemnity basis, fixed in the sum of $161,085.30, such sum to be paid to the wife from the husband’s share of the alteration of property interests to the extent possible, and otherwise payable within 28 days.
31.Within seven days of the date of this order, the wife is to provide a sealed copy of these orders to the husband at his last known postal address and at his last known email address.
32.All outstanding applications be otherwise dismissed and the matter removed from the list of cases awaiting finalisation.
NOTATION
A.That the Respondent indemnify the Applicant in respect of all liability to pay tax including income tax, goods and services tax, capital gains Tax, penalty tax and interest which may arise in the future in respect of any tax returns lodged on behalf of the Respondent or any entity in which the Respondent has an interest in to the date of these Orders or in respect of any transactions pursuant to these Orders.
B.These Orders are made in the absence of the Respondent husband and he is at liberty to make such application as he may be advised pursuant to Rule 10.13 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Kleine & Kleine has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALTOBELLI J
INTRODUCTION
These reasons for judgment explain the orders for alteration of property interests made by the Court in this matter.
BACKGROUND
Unless these reasons for judgment state to the contrary, the following represents findings of fact made by the Court having regard to the evidence before it.
This matter proceeded to hearing on an undefended basis. The Court was satisfied from the evidence of the Applicant, including the evidence of the Applicant’s solicitor Ms Z, and the evidence of Ms AA, that the Respondent, and all other necessary parties, were provided with timely and complete notice of the orders sought by the Applicant, and of the date of the hearing.
The Applicant is 50 years old, and the Respondent is 48 years old. They commenced a relationship in 2005, and commenced cohabitation later that year. They separated under the same roof in May 2017, and the Respondent physically vacated the family home in Suburb B in New South Wales in February 2018. The relationship thus lasted about 12 years. The Applicant and the Respondent were never married. They have one child together, X born in 2007, currently 14 years old. X lives with the Applicant and appears to have little contact or communication with his father, the Respondent. The impression formed from the evidence is that this is the Respondent’s choice, rather than the Applicant’s desire. The Applicant has two children from a previous marriage: Ms U who is 19 years old, and Ms V, who is 21 years old.
The Applicant works in the transport industry. The Respondent describes himself as a professional. The impression created from the evidence is that he primarily works from Western Australia.
Shortly before the Applicant and Respondent commenced cohabitation in 2005, the Respondent had purchased a property at Suburb W for $500,000. He contends, and the Applicant does not seem to dispute, that his equity in the property was $100,000 at that time. The Respondent contends in his Financial Questionnaire filed 20 August 2019 that at the time of cohabitation he also had “cash in bank” of $50,000. This assertion is not repeated in his Affidavit. The Court finds that the Respondent consistently earned a substantially greater income than the Applicant and thus it is possible that he did have some cash at cohabitation, though no finding can be made as to the amount. The onus was on him to prove what cash at bank he had at that time. He did not. Apart from that, his only other asset at the time of cohabitation appears to be superannuation which he contends was worth $75,000. The Applicant does not dispute this.
The Respondent also asserts in the same Financial Questionnaire that the Suburb W property had a market value of $650,000 at the time of cohabitation. This assertion is not made in his Affidavit affirmed 19 July 2019. There is no expert evidence about the value of this property at the date of cohabitation. It is common ground, however, that the property was sold for $765,000 in December 2007. The Respondent contends that the net sale proceeds received by him amounted to $379,000. The Applicant contends that after sale costs the Respondent in fact received just over $369,000.
The Applicant contends that at the commencement of cohabitation she had a property at Suburb Y valued at $600,000, superannuation worth $25,000, and a motor vehicle worth $30,000. She contends that at that time she owed $180,000 on the mortgage over the Suburb Y property. In the Respondent’s Affidavit he agrees with the Applicant’s contention above but could not attribute values to the same. There is no reason to doubt the Applicant’s evidence that, in effect, her equity in the Suburb Y property was about $420,000. The Court finds that the Applicant sold this property in late 2014 for $850,000 and received a net amount of $533,000.
The Court finds, consistent with the Respondent’s Affidavit, that he used $300,000 from the sale proceeds of his property in Suburb W to invest in the stock market. The rest was applied towards the general living expenses of the parties.
In about 2007 the Applicant received a net compensation payment of about $36,000. Most of this was provided by the Applicant to the Respondent to invest in the stock market. The Court finds that it is more likely than not that the Respondent convinced the Applicant to provide her money for this purpose, and that she did so reluctantly.
The Court finds that the known, as opposed to the unknown, dealings in the stock market were unsuccessful. If there were gains, they were not known to the Applicant.
In January 2013 the parties agreed to purchase a property at C Street, Suburb B for $1,680,000. For some reason that is still not clear to the Court, the property was purchased in the Respondent’s name only. The property in fact consisted of two lots. 1 C Street (the family home) was purchased for $840,000 using two loans of $315,000 each, with the balance being provided by the Applicant and Respondent together, though the wife contends she contributed more than the husband. 2 C Street was purchased in the name of F Pty Ltd, the trustee of the parties’ self-managed superannuation fund (‘SMSF’) using a loan of $480,000, cash of $137,000, and the Respondent transferring his existing superannuation of $233,000 into the new SMSF.
Between March and May 2015 the Applicant applied $400,000 from the sale proceeds of her property towards the mortgage secured over the Suburb B property. She also used approximately $133,000 on paying back loans, an overseas holiday, gifts for the Respondent and various other expenses.
Between June and December 2016, the evidence establishes that the Respondent redrew $622,500 from the mortgages secured against the Suburb B property. The Court finds that the Applicant is unaware how those funds were expended, and that the Respondent has not disclosed this. There is evidence to suggest that the Respondent transferred funds to both his mother and sister, seemingly in the context of the anticipated or actual breakdown of the Applicant and Respondent’s relationship. It is possible, the Court acknowledges, that some of this money was re-applied by the Respondent to the mortgage but, as will be seen below, it is clear that the Respondent once again re-drew on the mortgage for purposes that are unknown.
The Court finds that throughout the relationship, and even at times when the Applicant was working, she was primarily responsible for homemaking and parenting. In addition, she contributed by way of bookkeeping the Respondent’s share dealings. The Applicant continued in the role of primary homemaker and parent for their son X after separation. The Respondent has been paying child support as assessed, on a consistent basis.
The Court finds that the Respondent has consistently failed to comply with his duty of disclosure to the Court, and to the Applicant. This finding is based on the Applicant’s evidence, and a survey of the orders made by this Court which demonstrates multiple orders made and not complied with, including orders for costs made against the Respondent.
An important submission made in the Applicant’s case is that the Court cannot be confident that the Respondent has made disclosure as to his true income, assets and resources and thus the balance sheet is likely to be incomplete insofar as it purports to reflect the Respondent’s assets. The Court accepts this submission.
THE EVIDENCE BEFORE THE COURT
In support of her case, the Applicant sought to rely on the following documents:
(a)Her Further Amended Initiating Application filed 24 June 2021;
(b)Her Affidavit filed 8 June 2021;
(c)Her Financial Statement filed 8 June 2021;
(d)An Affidavit of Mr O filed 8 June 2021;
(e)An Affidavit of Ms Z filed 25 June 2021;
(f)An Affidavit of Ms AA filed 29 June 2021;
(g)A Case Outline document filed on 29 June 2021; and
(h)Documents tendered as exhibits A1 to A3.
The Respondent has filed the following documents in the matter, each of which has been referred to and relied upon by the Court:
(a)His Response filed 22 July 2019;
(b)His Financial Statement filed 22 July 2019;
(c)His Affidavit filed 22 July 2019; and
(d)A Financial Questionnaire filed by him on 20 August 2019.
THE APPLICABLE LAW
Rule 1.33 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (‘the Rules’) provides that if a party does not comply with the rules, regulations or a procedural order, the Court may proceed to determine the case as if it were undefended. An undefended hearing is one in which the Respondent does not participate.
Before a matter can proceed on an undefended basis, the Court must be satisfied that all parties to the proceeding have had an opportunity to be heard: Taylor v Taylor (1979) 143 CLR 1. In Allesch v Maunz (2000) 203 CLR 172, the High Court stated as follows in relation to undefended hearings:
[38] … Sometimes, through stubbornness, confusion, misunderstanding, fear or other emotions, a party may not take advantage of the opportunity to be heard, although such opportunity is provided. Affording the opportunity is all that the law and principle require.
[39] Decision-makers, including the courts, cannot generally force people to protect their own rights, to adduce evidence or other materials, to present submissions or to act rationally in their own best interests. This consideration may be especially relevant in relation to the Family Court where emotions, often engendered by the highly personal issues involved, can sometimes cloud rational thought.
[40] Nor are courts obliged to delay proceedings indefinitely because one party, although proved to be on notice of the proceedings, refuses or fails to appear in person or to be represented by a lawyer or some other individual permitted to speak for them who can explain the need for an adjournment. The rights of other parties are commonly involved. In the Family Court, the rights of non-parties (especially children) may be affected. Additionally (as this Court has itself accepted), the rights of the public in the efficient discharge by courts of their functions must be weighed against unreasonable delay in concluding litigation. In the present case, I am satisfied that the husband has been given an adequate opportunity to appear in these proceedings and has failed to engage as a matter of choice. The wife is duly entitled to have her application for property settlement determined by the Court within a reasonable period of time and in accordance with the applicable principles of law.
In the present case, I am satisfied that the husband has been given an adequate opportunity to appear in these proceedings and has failed to engage as a matter of choice. The wife is duly entitled to have her application for property settlement determined by the Court within a reasonable period of time and in accordance with the applicable principles of law.
This is otherwise an application under s 90SM of the Family Law Act 1975 (Cth) (hereafter referred to as ‘the Act’) which relevantly provides:
Alteration of property interests
(1)In property settlement proceedings after the breakdown of a de facto relationship, the court may make such order as it considers appropriate:
(a)in the case of proceedings with respect to the property of the parties to the de facto relationship or either of them--altering the interests of the parties to the de facto relationship in the property; or
(b)in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the de facto relationship--altering the interests of the bankruptcy trustee in the vested bankruptcy property;
including:
(c)an order for a settlement of property in substitution for any interest in the property; and
(d)an order requiring:
(i) either or both of the parties to the de facto relationship; or
(ii) the relevant bankruptcy trustee (if any);
to make, for the benefit of either or both of the parties to the de facto relationship or a child of the de facto relationship, such settlement or transfer of property as the court determines.
Note 1: The geographical requirement in section 90SK must be satisfied.
Note 2: The court must be satisfied of at least one of the matters in section 90SB.
Note 3: For child of a de facto relationship , see section 90RB.
(2)If a party to the de facto relationship dies after the breakdown of the de facto relationship, an order made under subsection (1) in property settlement proceedings may be enforced on behalf of, or against, as the case may be, the estate of the deceased party.
(3)The court must not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court must take into account:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i) to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii) 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 de facto relationship 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 de facto relationship, or a child of the de facto relationship:
(i) to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii) 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 de facto relationship or either of them; and
(c)the contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship and any children of the de facto relationship, 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 de facto relationship; and
(e) the matters referred to in subsection 90SF(3) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the de facto relationship or a child of the de facto relationship; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the de facto relationship.
Section 90SM(4) incorporates the provisions contained in s 90SF(3) of the Act, which states:
(3) The matters to be so taken into account are:
(a)the age and state of health of each of the parties to the de facto relationship (the subject de facto relationship ); 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 de facto relationship 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 (4), the eligibility of either party for a pension, allowance or benefit under:
(i)any law of the Commonwealth, of a State or Territory or of another country; or
(ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g)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
(i)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 de facto relationship 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 90SM in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(o)the terms of any order or declaration made, or proposed to be made, under this Part in relation to:
(i)a party to the subject de facto relationship (in relation to another de facto relationship); or
(ii) a person who is a party to another de facto relationship with a party to the subject de facto relationship; 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
(p)the terms of any order or declaration made, or proposed to be made, under Part VIII in relation to:
(i)a party to the subject de facto relationship; or
(ii)a person who is a party to a marriage with a party to the subject de facto relationship; 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
(q)any child support under the Child Support (Assessment) Act 1989 that a party to the subject de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the subject de facto relationship; and
(r)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(s)the terms of any Part VIIIAB financial agreement that is binding on either or both of the parties to the subject de facto relationship; and
(t)the terms of any financial agreement that is binding on a party to the subject de facto relationship.
In Bevan & Bevan (2013) FLC 93-545 the Full Court of the Family Court of Australia considered the High Court’s decision in Stanford & Stanford (2012) 247 CLR 108 which provided guidance on how s 90SM was to be interpreted and implemented. Bevan endorsed the continuing application of the four-step approach articulated by the Full Court in In the Marriage of Hickey (2003) FLC 93-143, but on the basis that it is a shorthand distillation of the words of s 90SM, as opposed to being a statutory edict. The four steps articulated in Hickey at [39] are:
(1)Identify and value the property, liabilities and financial resources of the parties; and
(2)Identify and assess the contributions of the parties and express them as a percentage of the net value of the property; and
(3)Identify and assess the other facts relevant under s 90SM(4)(d)-(g) including s 90SF(3) and determine the adjustment (if any) to be made to the contribution entitlements at step two;
(4)Consider the effect of the above and resolve what order is just and equitable in all the circumstances.
The decisions in Stanford and Bevan also emphasise the importance of making findings that any order is just and equitable for the purposes of s 90SM(4), independent of the s 90SF(3) process. In most cases, such as the present one, it makes no difference to the outcome of the alteration of property interests exercise. Even if the just and equitable consideration were treated as a threshold issue in this case the parties have, by their actions (separation, and re-ordering of their financial lives since then), and claims (divergent claims about their property under s 90SM of the Act), indicated that they themselves consider it just and equitable that some order be made under s 90SM adjusting their property interests as presently held. It is clearly just and equitable in this case to make an order.
Both decisions also emphasise the importance of identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. This is not inconsistent with step one in Hickey.
A problem that commonly arises, and indeed does arise in this case, relates to property that once existed but no longer does. This disposed of property may still be significant, however. As the Full Court said in Bevan, such disposals must be dealt with carefully. In practical terms this means carefully assessing the evidence about the disposal, attempting to quantify it if this is at all possible, and then assessing its weight whilst neither placing too much, or too little, weight on it. It would seem that notionally adding back such property may still be appropriate in some cases. In Vass & Vass (2015) 53 Fam LR 373, the Full Court said at [138]:
There is no error committed per se in adjusting the parties’ actual property interests by a calculation involving notionally adding back into the pool sums which have been dissipated by the parties. We reject any suggestion that the decision of Bevan & Bevan [2013] FamCAFC 116; (2013) FLC 93-545 – or, more particularly, the decision of the High Court in Stanford & Stanford [2012] HCA 52; (2012) 247 CLR 108 – is authority for any necessary contrary solution.
As the Full Court noted in Chorn & Hopkins [2004] FamCA 633 at [24] and indeed in many other cases, there is no basis for adding back moneys that existed at separation but which have been spent on reasonably incurred necessary living expenses.
A significant issue in this matter was the alleged non-disclosure of the husband. Attempting to deal with non-disclosure often puts the other spouse to considerable difficulty with regards to investigating their financial affairs. The Full Court in Weir & Weir (1993) FLC 92-338 at 79, 593–4 made the following statement regarding the duty to disclose and the Court’s powers where non-disclosure has been found:
This Court has pointed out in a line of cases leading up to the recent decision of the Full Court in Black & Kellner (1992) FLC 92-287, that it is the duty of a party involved in property proceedings in this jurisdiction to make a full disclosure of their financial affairs. See also Giunti & Giunti (1986) FLC 91-759, and Mezzacappa & Mezzacappa (1987) FLC 91-853. It is clear enough from his Honour's findings in the present case that the husband had not done so and had in fact pocketed the proceeds of a substantial number of cash sales. It is obvious that in most cases of this nature it is difficult enough for the other party to establish that fact let alone establish the quantum of what has been taken.
It seems to us that once it has been established that there has been a deliberate non-disclosure, which follows from his Honour's findings in this case, then the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.
We appreciate that this is something of a broad brush approach, but, as we have said, where there is clear evidence of non-disclosure as there was here, the Court should not be unduly cautious about making findings in favour of the other party. It has been said by one commentator (O'Ryan and Broadfoot, 5th National Family Law Conference Handbook, p 249) the failure to disclose undermines the whole process of adjudication of proceedings for a settlement of property in that the court is unable to identify the property of the parties, to properly assess contribution, or to properly assess s 75(2) factors.
The wife raised what is, in effect, a waste argument. A succinct statement of the law in this regard is the statement by Baker J in Kowaliw & Kowaliw (1981) FLC 91-092 at 76, 644:
As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
The final legal issue that arises in this case is that raised by the wife – the extent, if at all, that her contributions were rendered more arduous as a result of various aspects of the husband’s conduct. The authority is the Full Court’s decision in Kennon v Kennon (1997) FLC 92-757. A useful summary of the decision is contained at page 84, 294:
Put shortly, our view is that where there is a course of violent conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon that party's contributions to the marriage, or, put the other way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties' respective contributions within s 79. We prefer this approach to the concept of ''negative contributions'' which is sometimes referred to in this discussion.
In the above formulation, we have referred only to domestic violence, for the reasons which we indicated earlier, but its application is not limited to that…
However, it is important to consider the ''floodgates” argument. That is, these principles, which should only apply to exceptional cases, may become common coinage in property cases and be used inappropriately as tactical weapons or for personal attacks and so return this Court to fault and misconduct in property matters – a circumstance which proved so debilitating in the past. In addition, there is the risk of substantial additional time and cost.
However, in our view, s 79 should encompass the exceptional cases which we described above. It would not be appropriate to exclude them as a matter of policy because of this risk. It is a matter of commonsense for the lawyers involved and, where that may not be sufficient, it is a matter for a firm hand by the Court at an early stage when a case appears to raise those issues.
It is essential to bear in mind the relatively narrow band of cases to which these considerations apply. To be relevant, it would be necessary to show that the conduct occurred during the course of the marriage and had a discernible impact upon the contributions of the other party. It is not directed to conduct which does not have that effect and of necessity it does not encompass (as in Ferguson) conduct related to the breakdown of the marriage (basically because it would not have had a sufficient duration for this impact to be relevant to contributions)…
The passage from the Full Court's decision in Kennon clearly indicates that it is a relatively narrow band of cases to which a Kennon-type adjustment would apply. The focus seems to be on establishing either that there has been a significant adverse impact on a party's contributions, or that their contributions are significantly more arduous than they ought to have been.
THE COMPETING CONTENTIONS
The precise orders sought by the Applicant, as set out in the Further Amended Application filed 24 June 2021, are reproduced in the first schedule to these reasons. In effect the Applicant proposed that a finding of contribution up to the date of the hearing be made in her favour as to 65 per cent, with a further adjustment of 15 per cent for her future needs. In effect, this would provide to the Applicant 80 per cent of the total known assets as reflected in the balance sheet (to be discussed below).
The Respondent did not, of course, participate in the undefended hearing. The only Response filed by him is dated 22 July 2019. He sought orders that the Applicant’s application be dismissed, but the basis of this was, initially, that there was a binding financial agreement between the parties. However, on 9 April 2020, orders were made by consent setting aside the financial agreement entered into between the parties, as well as a binding child support agreement. The Respondent thereafter did not file an Amended Response.
His Financial Questionnaire of 20 August 2019 does give some indication of his contentions. He contended, for example, that the Applicant would receive an adjustment of 5 per cent in her favour under s 90SM(4) of the Act. Curiously, his Financial Questionnaire does not articulate any concession about matters under s 90SF which is surprising given his statements that the Applicant was the primary care of the child and has a lower earning capacity than that of the Respondent. The Respondent refers to concerns about his future employment which might lead to a reduction in his earning capacity, but there is no evidence to corroborate this and, indeed, it is inconsistent with other evidence before the Court.
THE BALANCE SHEET
The Applicant relied on the balance sheet reproduced below:
ASSETS Ownership Description Applicants value Respondents value 1 Respondent 1 C Street, Suburb B 1,400,000 2 Respondent Shares in D Pty Limited 151,590 3 Applicant Motor Vehicle 3 15,000 4 Applicant Motor Vehicle 2 1,000 5 Applicant Motor Vehicle 1 1,000 6 Applicant BB Bank Account #...36 64 7 Applicant ANZ #...18 0 8 Respondent CC Bank #...99 NK 9 Respondent CC Bank #...91 NK 10 Respondent Westpac #...39 1,315 11 Respondent Westpac #...05 9,635 12 Respondent BB Bank #...57 21,005 13 Respondent Recreational boat 1,000 14 Respondent 1/12 share in R Company 173,333 15 Respondent Tools and workshop equipment 20,000 16 Respondent Sculpture 1,000 17 Respondent Aircraft kit 60,000 18 Respondent 1600 J Group Shares 148,000 19 Respondent DD Pty Ltd ABN … 77,846 20 Respondent EE Company ABN … 60,328 21 Respondent furniture removed from home 30,000 22 Respondent Animal prints 500 23 Applicant Household contents 4,000 Total $ 1,742,442 $ 0 ADDBACKS Ownership Description Applicants value Respondents value 24 Respondent Money withdrawn by Respondent 622,500 25 Respondent 1600 J Group Shares 148,000 26 Respondent DD Pty Limited ABN … 77,846 27 Respondent EE Company ABN … 60,328 Total $ 908,674 $ 0 LIABILITIES Ownership Description Applicants value Respondents value 28 Respondent Mortgage to E Pty Ltd #...18 285,698 29 Respondent Mortgage to E Pty Ltd #...77 285,348 30 Applicant ANZ Overdraft on Account # …18 1,000 31 Applicant ANZ Visa Card Account ending # 6,000 32 Applicant After Pay / Zip Pay / Zip Money 8,000 33 Applicant Loan from Ms U for valuer fees 2,200 34 Applicant Loan from Ms FF re legal fees 15,700 35 Applicant Outstanding Legal Fees 133,000 36 Applicant Centrelink Liability from overpayment of Family Tax A & B Benefit 3,833 37 Applicant X's Outstanding School Fees 1,800 38 Joint ATO SMSF Liability NK Total $ 742,579 $ 0 SUPERANNUATION Member Name of Fund Type of Interest Applicants value Respondents value 39 Joint G Super Fund SMSF 600,000 40 Applicant JJ Super Fund Accumulation 2,479 41 Respondent H Fund Accumulation 66,368 + NK Total $668,847 + NK $ 0 FINANCIAL RESOURCES Ownership Description Applicants value Respondents value 42 43 Total $ 0 $ 0 NETT TOTAL ASSETS (including Superannuation) $ 2,577,384 $ 0
In relation to this balance sheet, the Court makes the following findings.
Item 1 is the former family home at Suburb B and the value is consistent with that of the single joint expert and will thus be accepted by the Court.
Item 2, the Respondent’s shares in D Pty Ltd, is based on item 41 of the Respondent’s Financial Statement made 18 July 2019. The Court accepts that this figure in circumstances where it is the Respondent’s own nondisclosure that leads to uncertainty about the value of his shareholdings. The company D Pty Ltd was clearly the vehicle that he used for his share investments. The Applicant does not know either how the share investments were constituted, or their value. The Court accepts this figure as an admission against interest by the Respondent.
Item 3 is the Applicant’s motor vehicle. The value she attributes to this in her Financial Statement is $15,000 and thus the Court will accept this as an admission against interest, in the absence of expert evidence.
Item 4 is the Applicant’s other motor vehicle, and again this figure is accepted on the same basis as above.
The Court will accept the values attributed by the Applicant for items 5, 6 and 7, on the same basis as above.
The figures attributed by the Applicant to the Respondent’s bank accounts at items 8 – 12 are based on the limited disclosure given by the Respondent, or the result of what enquiries the Applicant was able to make. Accordingly, and doing the best the Court can in circumstances where the Respondent has not made disclosure, and has not participated in the hearing, the Court will accept these figures.
The Applicant gives evidence in her Affidavit about items 13 – 22, but her counsel quite frankly, and appropriately, conceded that the Court does not know whether the Respondent is still in possession of these assets, and if so what is the relevant current market value. Counsel explained that it was not through want of effort, for the wife had in fact issued multiple subpoenas, with limited, or no success. Indeed, the Court file indicates that the wife issued 15 subpoenas. Having regard to the wife’s evidence, the Court accepts the figures attributed by the wife in items 13 and 14, as there is some evidence suggesting that, at the very least, this was the purchase price of the items. The same could be said of item 16. However, item 15 will be $10,000, the value the Respondent attributes to these items in the BFA, as an admission against interest. Item 17 will be $40,000 on the same basis as item 15.
The Court has difficulty with items 18 – 22. It is clear that the Respondent held shares in the J Group, but not the quantity. Items 18, 19 and 20 are supported by the evidence found in the wife’s Tender Bundle. In the absence of any evidence to support the same, the figures of $30,000 and $500 respectively at items 21 and 22 cannot be accepted by the Court.
The Court wishes to make two things very clear: first, whilst the value attributed for all of these items will be as stated above, the Court is satisfied from the Applicant’s evidence that these items were, and possibly still are, in the Respondent’s possession or control, at a value which is unknown. Second, it is likely that the acquisition of the shares was financed by a margin loan but the liability both then and now are unknown, as the husband has not disclosed this or participated in the proceedings. Any prejudice to the Respondent is attributable to this.
The Court accepts item 23 as an admission against interest of the Applicant.
At items 24 – 27, the Applicant sought to add back substantial items that were exclusively owned and/or controlled by the Respondent, at the values attributed. The Court readily accepts from the evidence of the Applicant that, more likely than not, the items in question are, or were at all relevant times owned, possessed, or controlled by the Respondent. Item 24 is supported by the evidence.
The relationship between items 25-27 and items 18-20 is unclear but it does appear to be a duplication so both sets of items cannot stand. Items 25-27 will not be allowed.
Items 28 and 29 are liabilities the quantum of which are established by the evidence, and thus the Court accepts the same.
Items 30 – 37 are liabilities of the Applicant which the Court is prepared to take into account, in a general sense, but they are not liabilities that should be found on a joint balance sheet. The Court does not accept, for example, that there is a juridical basis for attributing to the Respondent a part of the Applicant’s Centrelink debt arising from overpayment of family tax benefits. Any question of costs of the Applicant will be dealt with separately.
Item 38 is a liability that the Court accepts is a likely one, but which cannot be quantified at this time.
Items 39 – 41 consist of the superannuation entitlements of the Applicant and Respondent. Item 39 is based on the value attributed by the single joint expert to 2 C Street of the Suburb B property, owned by the trustees of the SMSF. The Court accepts this figure. Item 40 is the Applicant’s own superannuation, and the Court also accepts this figure. Item 41, the Respondent superannuation, is based on documents produced by the trustee of the said fund. The Applicant quite correctly contends in the balance sheet that the true value of the Respondent’s superannuation is not known. For example, in his Financial Statement of 18 July 2019 he contends the value of his G Super Fund SMSF as $1 million. The Court also has concerns about the value of the husband’s employment related superannuation having regard to his annual income. As counsel for the Applicant submitted, there is scope to infer that there is another undisclosed superannuation fund.
Having regard to the Court’s findings, above, the balance sheet in this matter will be as follows:
Assets Ownership Description Value 1 Respondent 1 C Street, Suburb B 1,400,000 2 Respondent Shares in D Pty Limited 151,590 3 Applicant Motor Vehicle 3 15,000 4 Applicant Motor Vehicle 2 1,000 5 Applicant Motor Vehicle 1 1,000 6 Applicant BB Bank Account #...36 64 7 Applicant ANZ #...18 0 8 Respondent CC Bank #...99 NK 9 Respondent CC Bank #...91 NK 10 Respondent Westpac #...39 1,315 11 Respondent Westpac #...05 9,635 12 Respondent BB Bank #...57 21,005 13 Respondent Recreational boat 1,000 14 Respondent 1/12 share in R Company 173,333 15 Respondent Tools and workshop equipment 10,000 16 Respondent The sculpture 1,000 17 Respondent Aircraft kit 40,000 18 Respondent 1600 J Group Shares 148,000 19 Respondent DD Pty Limited ABN … 77,846 20 Respondent EE Company ABN … 60,328 21 Applicant Household contents 4,000 Total $ 2,116,116 Add backs Ownership Description Value 22 Respondent Money withdrawn by Respondent 622,500 Total $ 622,500 Liabilities Ownership Description Value 23 Respondent Mortgage to E Pty Ltd #...18 285,698 24 Respondent Mortgage to E Pty Ltd #...77 285,348 25 Joint ATO SMSF Liability NK Total $ 571,046 Superannuation Member Name of Fund Type of Interest Value 26 Joint G Super Fund SMSF 600,000 27 Applicant JJ Super Fund Accumulation 2,479 28 Respondent H Fund Accumulation 66,368 Total $ 668,847 NETT TOTAL ASSETS (including Superannuation) $ 2,836,417 ASSESSMENT OF CONTRIBUTION
The evidence adduced by the Applicant confirms that at all relevant times, both before and after separation, the Respondent earned substantially more than her. He was often away for extended periods of time as a fly in fly out worker. Whilst the Applicant’s income was less than the Respondent’s, her overall contribution, direct and indirect, financial and non-financial, and as homemaker and parent (and subject only to a matter which will be discussed below) will be assessed by the Court as having the same weight as his income up to the date of separation.
The parties separated four years ago. The Applicant has borne homemaking and parenting responsibilities on her own for this entire period, subject only to the payment of child support, currently in the amount of $575 per week, and the payment of the mortgage by the Respondent until comparatively recently.
The Court finds that the value of the initial contribution made by the Applicant is greater than that of the Respondent. Her property at Suburb Y netted a greater amount than his property at Suburb W. In addition, her compensation payment of $36,750 weighs in her favour.
Insofar as the Applicant’s case sought to contend that the Respondent had engaged in waste as a result of unsuccessful share dealings and on an expensive course that came to nothing, the Court finds that she has not established her case. To the extent that the Applicant sought to infer that she had been the subject of duress insofar as her own funds were applied for this purpose, again, she has not established her case. Much more evidence was needed in this regard. Such as there was is inadequate. In reality, the Applicant’s own evidence demonstrates her own generosity towards the Respondent.
Insofar as the Applicant’s case sought to contend that their income was not co-mingled, and thus she should receive (in effect) greater credit for funds she contributed as a result of her own income and financial dealings, the Court does not accept this. There is scant evidence to suggest that the parties conducted their finances separately. Her income might have been used for specific purposes, and his income, for other specific purposes, but that hardly suggests independence of their financial circumstances.
Nonetheless, the evidence is quite clear. Between 6 June 2016 and 1 December 2016, the Respondent had redrawn $622,500 from the mortgage. The Applicant was able to establish that $420,000 was transferred via D Company into the SMSF, and the remaining balance to an undisclosed account. It is by no means clear to the Court, for example, that the only asset of the SMSF is 2 C Street of the Suburb B property. As will be seen, however, moneys were withdrawn from the mortgage at a later time.
The Court accepts the Applicant’s evidence that the Respondent then engaged in two transactions the precise nature of which are not entirely clear. In about 2018 the wife contends that the husband purchased a boat or, more precisely, a half interest in a boat or boating syndicate for $173,332.80. The husband’s interest in a boat is not disputed by him in his Financial Statement, but he values his interest at $100,000. He also sold shares for $148,000. On balance, it seems that the mortgage redraw was used to fund the boat, and the application of the sale proceeds of the shares is simply not known.
The Applicant contends, and the Court accepts, that as a result of the Respondent’s conduct, her contribution was rendered more arduous, consistent with the Full Court decisions in Kennon v Kennon (1997) FLC 92-757 and Britt & Britt (2017) FLC 93-764. She deposes to his psychological, emotional, verbal and physical abuse towards her during the relationship. He spat in her face. He punched her in the face, leaving her with a black eye. He would not allow the Applicant to have family or friends at the home, resulting in her becoming isolated. He was frequently intoxicated. The Applicant would need to ask permission to have visitors come to the house. On one occasion the Respondent put his hand over her mouth so that she could not breathe. The Court draws the inference that this made all of the contributions made by the Applicant more arduous, and thus deserving of a more generous assessment in terms of contribution.
Earlier in these reasons, the Court acknowledged that the Respondent had been meeting the mortgage payments between the date of separation, and quite recently. Indeed, the evidence establishes that he met the mortgage payments to August 2020. However, the Applicant’s evidence establishes quite clearly that at the same time as he was paying the mortgage, he was also redrawing on the mortgage. It must be borne in mind that both the property, and the mortgage, was in the Respondent’s sole name. The bank statements establish this. To somehow suggest, therefore, that the Applicant’s greater contribution in the period post separation is, in effect, met or offset by his financial contribution in the same period, is misleading. Indeed, for most of this year, the mortgage has been in arrears and the Applicant has had, in effect, to plead with the mortgagees not to take enforcement action. All of this took place in circumstances where the evidence establishes that the husband’s gross income for the 2020 financial year was $402,489, and in the 2021 financial year was $411,997. It is not as if the Respondent did not have the financial capacity to service the mortgage.
The evidence establishes that the Respondent conducted his known share dealings through D Pty Limited. The parties incorporated a separate company, F Pty Ltd, to act as the trustee of the G Super Fund, their SMSF, and it is this entity that owns 2 C Street of the Suburb B property. The evidence establishes that both the Applicant and Respondent rolled over their superannuation entitlements into their SMSF. What is by no means clear to the Court, however, is whether the Respondent’s only superannuation entitlements are comprised within the joint SMSF as well as the only other fund that the Respondent discloses, H Fund.
On behalf of the Applicant it was submitted that contribution should be assessed in her favour as to 65 per cent. The Court agrees. This percentage takes into account the greater initial financial contribution, the contribution she made after separation, and the fact that her contribution was rendered more arduous as a result of the Respondent’s family violence.
AN ADJUSTMENT FOR FUTURE NEEDS?
The evidence reveals a very substantial disparity both in the actual income, and earning capacity, of the Applicant and Respondent. This indicates an adjustment in the Applicant’s favour.
The Applicant is the primary carer of their child, X. In some ways, the child support that she receives from the Respondent of $575 per week may seem generous, but experience indicates that that is hardly an amount that will cover all of the child’s needs. The Applicant is solely responsible for the child’s care, and the Respondent neither communicates nor spends time with him at present. The evidence before the Court suggests that the prospect of future child support is reasonably certain given that the husband is a PAYG income earner and there is a high prospect of continued collection by the Child Support Agency. Nonetheless, an adjustment in the Applicant’s favour is further indicated.
A further adjustment is indicated as a result of the great uncertainty that surrounds the constitution of the balance sheet found by this Court to represent the assets and financial resources of the parties. The Court has no confidence that the balance sheet that it has been forced to adopt accurately reflects the assets and resources owned or controlled by the Respondent.
On behalf of the Applicant it was submitted that an adjustment of 15 per cent should be made. The Court agrees. The factors identified above warrant this.
JUST AND EQUITABLE
The Court finds that an alteration of interests as to 80 per cent in the Applicant’s favour is just and equitable as the circumstances permit, given the serious concerns expressed by this Court about the Respondent’s nondisclosure, and his decision not to participate in the final hearing.
IMPLEMENTATION OF THE PROPOSED ADJUSTMENT
There are substantial challenges involved in implementing an order altering property interests as to 80 per cent in the Applicant’s favour on the balance sheet found by the Court.
The main asset is in the husband’s name. The other substantial asset is held by a corporate trustee for a SMSF fund. There are substantial assets on the balance sheet which the Court finds are held or controlled by the Respondent but in respect of which it is difficult to attribute values.
The minute of order proposed on behalf of the Applicant, found within her amended application and reproduced at schedule 1 to these reasons, is a logical approach to implementing the order. The focus is on the superannuation assets, and rolling over the Respondent’s share into her own separate account, or separate fund. This is an entirely appropriate approach to adopt, albeit complex to implement.
It is appropriate to make the injunction proposed by the Applicant, given the clear evidence of the Respondent’s unilateral control of the mortgage accounts up-to-date. The Respondent’s nonparticipation in the proceedings also makes it appropriate for the Applicant to be appointed as the trustee for sale. It is a reasonable assumption to make that the Respondent will not cooperate in the implementation of these orders.
CHILD SUPPORT
The Court declines to make an order under s 123 Of the Child Support (Assessment) Act 1989 (Cth) for lump sum child support. There is no basis for making this order. The Applicant is in regular receipt of child support. There is no reasonable basis for the concern that she expresses about future child support payments form the husband.
The Court declines to order that the Respondent pay child support arrears. That is the function of the Child Support Agency: Child Support (Registration and Collection Act) 1988 (Cth) Pt III. Given the Respondent’s high income, it is hard to see why the Applicant has not sought recovery of arrears via that agency.
SPOUSAL MAINTENANCE
The Applicant wife seeks an order for spousal maintenance. At Order 26 of her proposed orders, this is expressed as an order under s 77A of the Act. This would appear to be a typographical error and the Court assumes that the application is bought pursuant to s 72 and having regard to the provisions of ss 74 and 75 of the Act. At Order 26, the wife proposes spousal maintenance in the sum of $700 per week and continuing for five years. At Order 27, she proposes as an alternative, a lump sum payment in the sum of $182,000. In this regard, there is reference to s 77A.
In the wife’s Financial Statement made on 8 June 2021 she deposes to total average weekly income of $1,251, and expenses of $2,152. For all practical purposes none of the income that she disclosed is relevant to the present application. It is either payments in the nature of Centrelink benefits, or the child support that is paid in relation to X. The circumstances of the wife not being able to work adequately established in her Affidavit. The Court accepts that this circumstances might change in the future, in terms of her employment. Should this occur, the husband has the right to seek a variation of any order for maintenance that is made. I am satisfied that the wife is therefore in need of maintenance.
Out of the wife’s total expenses of $2,152, the Part N expenses referable to herself total $1,030 weekly. There are no expenses which the Court considers excessive, indeed quite the opposite. The Court thus finds that the wife’s reasonable needs consist of the $1,030 attributable to herself at item 60 of her Financial Statement, together with the items 26, 27, 29 and 30 of her Financial Statement. This makes a total of $1,227 per week. The Court is therefore satisfied that she is in need of the maintenance sought by her in the amount of $700.
The Court is also satisfied that the husband has the capacity to pay. Even though he has not participated in the proceedings, or made proper disclosure, the wife was able to produce payslips which indicate that the husband has a substantial income.
The wife seeks an order that spousal maintenance be payable for a period of five years. Having regard to her evidence about her health and employment prospects, this is a reasonable period. Once again the Court acknowledges that the husband may have the opportunity to revisit this order should either his, or her circumstances change.
Before a Court would consider converting periodic spousal maintenance to lump sum spousal maintenance, there would need to be evidence about predicted non-periodic expenditure: Vautin v Vautin (1998) FLC 92-827. The Court is satisfied that there is no such evidence. The wife has not made out a need for lump sum spousal maintenance.
COSTS
The Applicant wife seeks an order for costs. The evidence relied on by her in support of this application is that as at the date of making her Affidavit of 8 June 2021, that is, she has incurred costs totalling $161,085.30. Approximately half of that was attributable to the litigation in relation to the binding financial agreement. In this regard, it will be remembered that the husband consented to the order setting aside the agreement, and therefore the balance is attributable to this later proceeding which has culminated in this undefended order.
The law relating to costs in family law proceedings is well settled and is set out in detail in the Full Court decision of Parke & The Estate of the Late A Parke (2016) FLC 93-748.
An application for costs is governed by s 117 of the Act. Section 117(1) sets out the general presumption that each party to the proceedings shall bear their own costs. This is subject to s 117(2), which provides that:
If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A) and (5) and the applicable Rules of Court, make such order as the court may make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
Section 117(2A) sets out the matters that the Court is to have regard to:
(2A)In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a)the financial circumstances of each of the parties to the proceedings;
(b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g)such other matters as the court considers relevant.
Although the Court is required to consider each of the abovementioned factors, it is plain that their relevance to a particular matter will depend upon the circumstances of that case and they should be considered in that light. That is, no one factor prevails over another and it is a question of the weight that is to be afforded to each of the relevant factors depending on the circumstances of the matter: Medlon & Medlon (No. 6) (Indemnity Costs) (2015) FLC 93-664 at [24]. There is also “nothing to prevent any factor being the sole foundation for an order for costs”: Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish (2005) 33 Fam LR 123 at [41].
Whilst the applicant in a costs application must establish the circumstances justifying the making of a costs order, the Court is not limited to making such an order only in what has been described as a "clear case": Penfold v Penfold (1980) 144 CLR 311.
It is well settled that when costs are ordered by this Court, such costs are payable on a party-party basis. It has been held that the Court should not lightly depart from the ordinary rule: Kohan & Kohan (1993) FLC 92-340.
The provision relating to the calculation of costs is governed by r 12.17 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) which is as follows:
12.17 Method of calculation of costs
(1) The court may order that a party is entitled to costs:
(a)of a specific amount; or
(b)as assessed on a particular basis (for example, party and party, solicitor and client or indemnity); or
(c)to be calculated in accordance with the method stated in the order; or
(d)for part of the proceeding, or part of an amount, assessed in accordance with Schedule 3.
(2)If costs are payable under the Family Law Act or these Rules, or the court orders that costs be paid and does not specify the method for their calculation, the costs are to be assessed on a party and party basis.
(3) In making an order under subrule (1), the court may consider the following:
(a)the importance, complexity or difficulty of the issues;
(b)he reasonableness of each party’s behaviour in the proceeding including by having regard to the matters set out in subrule 12.08(2);
(c)the rates ordinarily payable to lawyers in comparable proceedings;
(d)whether a lawyer’s conduct has been improper, unfair, unreasonable or disproportionate;
(e)the time properly spent on the proceeding, or in complying with pre‑action procedures;
(f)whether expenses (paid or payable) are fair, reasonable and proportionate.
In relation to an award of indemnity costs, the Full Court decision of Phillips & Hansford [2020] FamCAFC 28, helpfully summarises the position as follows:
35. Indemnity cost orders are made only in exceptional cases (Kohan and Kohan (1993) FLC 92-340; Limousin v Limousin (Costs) (2007) 38 Fam LR 478; D & D (Costs) (No. 2) (2010) FLC 93-435).
36. Whilst the categories of cases in which indemnity cost orders may be awarded are not closed, it is accepted that such costs may be ordered where a case was pursued with “wilful disregard of known facts or clearly established law” and where there has been “an imprudent refusal of an offer to compromise” (Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 233).
37. In relation to the first category, it has been said that indemnity costs may be awarded where “the applicant, properly advised, should have known that he had no chance of success” (Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 401) and where “a party persists in what should on proper consideration be seen to be a hopeless case” (J Corp Pty Ltd v Australian Builders Labourers Federation Union of Workers – Western Australian Branch & Anor [1993] FCA 70 per French J at 5).
As in the case of party-party costs, the decision to award indemnity costs is a discretionary one: Colgate-Palmolive Company v Cussons Pty Limited (1993) 118 ALR 248.
I am satisfied from the evidence that the husband’s financial circumstances are substantially stronger than the wife’s.
Neither party is in receipt of assistance by way of legal aid.
The conduct of these proceedings on the part of the husband has been completely unsatisfactory both from the perspective of the wife, and this Court. He has adopted a cavalier and indifferent attitude to the proceedings generally, and specifically to compliance with orders in relation to disclosure, filing of documents and generally participating in the proceedings. The burden that has been placed on the wife as a result of this has led her to incur substantial legal costs that could have been avoided, and indeed should have been avoided, with reasonable cooperation on the part of the husband. This is a significant matter that indicates that a costs order should be made.
There are aspects of these proceedings that have been necessitated by the failure of the husband to comply with orders of this Court. Indeed, the wife expresses concerns about the need to seek to implement and then enforce the orders that she asks the Court to make. Given the husband’s track record of non-cooperation so far, she is right to be so concerned. This is another factor inclining the Court towards making an order for costs.
The husband has been unsuccessful in these proceedings. He consented to an order that the binding financial agreement be set aside. The wife’s applications for an alteration of property interests and for spousal maintenance have been successful. This is another matter which indicates that a costs order should be made.
This is a matter where the Court considers that indemnity costs should be ordered. All of the evidence filed in this matter, including the husband’s own evidence, creates the strong impression that the husband had a negligible chance of success in his attempt to uphold the binding financial agreement that he later consented to setting aside. The same can be said in relation to the wife’s successful application for an alteration of property interests. Had the husband properly participated in the proceedings, and had he been well advised, the present outcome, or something very similar, could have been achieved without the wife having to incur such substantial costs. Moreover, the husband’s conduct by way of non-compliance with Court orders, nondisclosure and nonparticipation, has all caused greater expense to the wife, and an increased the burden of time on both her and the Court. The Court is well aware of the relatively high threshold that is set for indemnity costs orders in cases such as Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248, Yunghanns v Yunghanns (2000) FLC 93-029 and Thompson & Finch [2021] FamCAFC 3. The Court is satisfied that this case crosses that threshold. Moreover, it is quite likely that the only way that the wife will recover these costs is if they are paid as part of the order altering property interests. Such an order will be made.
I am satisfied that the wife’s costs are quantified at $161,085.30 on an indemnity basis and that it is appropriate that this be paid to the wife from the husband’s share, if any, of the property settlement, and if not so payable it remains an order of the Court to be enforced by the wife as she considers appropriate.
Other Orders
The wife sought additional orders at 28 – 34 of her Amended Application filed 24 June 2021. For all practical purposes these orders implement the substantive orders made and are thus proportionate and appropriate. I make those orders accordingly.
I certify that the preceding one hundred and one (101) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Altobelli j. Associate:
Dated: 15 September 2021
SCHEDULE 1
DEFINITIONS:
For the purpose of these Orders
A.Applicant means Ms Kleine born 1971
B.Respondent means Mr Kleine born 1973;
C.Parties means the Applicant and the Respondent
D.1 C Street means the premises situated at and known as 1 C Street, Suburb B in the State of New South Wales, being properly described as Folio Identifier … and improvements thereon and registered in the Respondent's sole name.
E.2 C Street means the premises situated at and known as 2 C Street, Suburb B in the State of New South Wales, being properly described as Folio Identifier … and improvements thereon and registered in the name of D Company ACN ….
F.1 C Street Mortgage means the mortgage registered on the title to the 1 C Street, Suburb B in the State of New South Wales, being properly described as Folio Identifier … with the Respondent as Mortgagee and E Pty Limited as Mortgagor, pursuant to registered mortgage …, being the E Pty Ltd loan account numbers …77 and …18.
G.2 C Street Mortgage means the mortgage registered on the title to the 2 C Street, Suburb B in the State of New South Wales, being properly described as Folio Identifier … with the Trustee of F Pty Limited ACN … as Mortgagee and Commonwealth Bank of Australia as Mortgagor, pursuant to registered mortgage ….
H.D Company means the company D Limited with ACN ….
I.F means the company F Pty Ltd ACN … of which the Applicant and the Respondent are the directors and equal shareholders and which is the trustee of the ABF Superannuation Fund.
J.The SMSF means G Super Fund, the self-managed superannuation fund of which F Pty Ltd ACN … is the trustee created by a Deed dated 9 January 2013.
K.The H Fund means the H Trust, of which the Respondent is the member spouse, Member Number ….
L.Accountant means Ms K of L Accountants, M Street, Suburb B.
M.N Storage facility means the self-storage facility located at P Street, Suburb B.
Self-Managed Superannuation Fund
1.That in accordance with paragraph 90XT(l)(b) of the Family Law Act 1975:
1.1the Applicant is entitled to be paid the specified percentage of each splittable payment from the Respondent's interest in the SMSF;
1.2the Respondent's entitlement (or the entitlement of such other person to whom a payment may be made out of the Applicant's interest) in the SMSF is correspondingly reduced by force of this Order;
1.3the specified percentage for the purposes of this Order is 100%.
2.That the parties, in their capacity as Directors of the Trustee of the SMSF, shall do all such acts and things and sign all such documents as may be necessary to:
2.1calculate, in accordance with the requirements of the Family Law Act 1975 and the Familv Law (Superannuation) Regulations 2001 the entitlement awarded to the Applicant in clause 1.3 of this Order;
2.2pay the entitlement whenever the Trustee make a splittable payment out of the Respondent's interest in the SMSF.
3.That Order l shall have effect from the operative time and the operative for that Order is 4 business days after the date when a sealed copy of these Orders is served on the SMSF.
4.That the Trustee shall convene a meeting within seven (7) days after receipt of the Rule 7A.05 request and in that meeting do all such act and things, and sign all such documents as may be necessary to create a new interest for the Applicant from the transferable benefits in accordance with Rule 7A.11 of the Superannuation Industrv (Supervision) Regulations 1994.
5.That in the event of any dispute arising between the pa11ies in the exercise of their powers as directors of the Trustee of the SMSF, the Trustee shall appoint an arbitrator nominated by the President of the Institute of Chartered Accountants.
6.That the Accountant be appointed as the SMSF accountant to implement these Orders.
7.That contemporaneously with the transfer of the transferable benefits from the Respondent's interest in the SMSF to an interest in the name of the Applicant in the SMSF, the Respondent shall forthwith do and sign all documents necessary to:
7.1Resign as a member of the SMSF in accordance with the Rules;
7.2Resign as a director and secretary of the Trustee and transfer all shares held by him in the Trustee to the Applicant
8.Pending the transfer of the transferable benefits from the Respondent to the Applicant:
8.1each party is restrained from dealing with, charging, encumbering or disposing of any of the assets of the SMSF other than in accordance with the terms of these Orders; and
8.2each party shall immediately revoke any binding death benefit nomination already made and each party be, and is hereby, restrained from:
8.2.1making any binding death benefit nomination in favour of a child described in Regulation 13 of the Family Law (Superannuation) Regulations 2001.
8.2.2making any other nomination where the effect of such nomination would be to render any splittable payment not splittable; and
8.2.3doing any such act or thing which would defeat, extinguish or reduce the entitlement of either party under this Order.
8.3That the SMSF shall meet the costs incurred in complying with this Order.
9.The Respondent hereby indemnifies the Applicant and keeps the Applicant indemnified against all liability of and in relation to the SMSF including any debt personally guaranteed by the Applicant, and including any unpaid income tax or other tax assessed or hereafter assessed against the Applicant in respect of income derived or deemed to have been derived by the SMSF inclusive of tax liabilities, interest, penalties, costs and fines and from all proceedings, costs, claims or demand in respect thereof.
10.The Respondent hereby indemnifies the Applicant and keeps the Applicant indemnified and be solely responsible for all actions of the SMSF as Trustee up to the date of the Respondent resigning as director, secretary and member of the SMSF.
11.The parties, in their capacity as Directors of the Trustee company acknowledge by this Order that the SMSF has been afforded procedural fairness in the making of these Orders.
H Trust
12.That:
12.1Pursuant to Section 90XT(l)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable from the Respondent's interest in the H Fund the Trustee shall pay to the Applicant the entitlement calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, using a base amount of $66,367.28 and there is a corresponding reduction in the entitlement that the Respondent would have been made but for these orders.
12.2That Order 12.1 have effect from the operative time.
12.3The operative time for this Order is four (4) business days after the day a certified copy of the sealed orders is served upon the Trustee of the H Fund.
12.4Having been accorded procedural fairness the Trustee of the H Fund be bound to observe the provisions in Order 12.1 and the requirements pursuant to the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001.
12.4.1That within 14 days of this Order being made:
12.4.2The Applicant serve a sealed copy of this Order upon the Trustee of the H Fund;
12.4.3The Applicant give notice in writing to the Trustee of the H Fund pursuant to regulation 72 of the Family Law (Superannuation) Regulations 2001.
12.5There be liberty to apply to each party and the Trustee of the H Fund in relation to the implementation of the Orders affecting the superannuation interest.
12.6That until the happening of any of:
12.6.1the establishment of a separate account in the name of the Applicant in the Fund; or
12.6.2the transfer or "rolling over" into another Superannuation Fund of the payment split created by Order 12.1 herein; or
12.6.3the Applicant satisfies a condition of release and is paid the payment split which was created by Order 12. I herein; or
12.6.4The Applicant executes a waiver of rights within the meaning of Section 90 (XZA) of the Family Law Act 1975 in relation to the payment split created by Order 12.1 herein;
12.6.5the Respondent be and is hereby restrained by himself his servants or agents from executing a Death Benefit Nomination in favour of any person or doing any other act or thing which would render any part of his interest in the H Fund a "not splittable payment" within the meaning of Regulation 12 or 13 of the Family Law (Superannuation) Regulations 2001.
Property
13.That the Respondent be restrained by injunction from drawing down, encumbering or otherwise dealing with the 1 C Street Mortgage.
14.That the Applicant is hereby appointed as Trustee of the Respondent to effect this Order and is empowered to forthwith do all acts and things and sign all documents necessary to effect the sale of the following assets:
14.1All the Respondent’s shares in J Group;
14.2The Respondent's share in the R Company;
14.3All shares held by D Pty Limited (of which the Respondent is the sole Director), such shares including but not limited to the shares held by Commonwealth Securities Limited;
14.4The Respondent's aircraft kit;
14.5All furniture items, tools and workshop equipment located in the N Storage facility held in the name of the Respondent.
15.That the appointment of the Applicant as Trustee of the Respondent shall be sufficient authority to the relevant companies and/or organisations to take instructions from the Applicant in relation to the sales pursuant to Order 14 hereof.
16.That the net proceeds of the sales as referred to in Order 14 hereof be deposited into the S Trust Account and thereafter the net proceeds be applied to reduce the 1 C Street Mortgage.
17.That upon completion of the sale of assets pursuant to Order 14 above or in the event that the Applicant is unable to sell any of the above assets at Order 14 above within three (3) months from the date of these Orders, the pa1ties fo1thwith do the following:
17.1the Respondent do all acts and things and sign all documents necessary so as to transfer to the Applicant all his right, title and interest in 1 C Street.
17.2Simultaneously with the Transfer at 17.1 above, the Applicant do all acts and things and pay all monies so as to discharge the 1 C Street Mortgage.
17.3That the Respondent do all acts and things and sign all documents to give effect to Orders 17.l and 17.2 hereof and in the event that the Respondent does not sign the documents necessary to effect these Orders within fourteen (14) days of forwarding any such document to him then the Applicant is hereby appointed as Trustee for the Respondent in relation to the Transfer of 1 C Street and discharge the 1 C Street Mortgage pursuant to these Orders and the Applicant is empowered to do all things and sign all necessary documents on behalf of the Respondent to give effect to these Orders
18.That in the event that the parties are unable to do all acts and things and pay all monies so as to discharge the liabilities secured over 1 C Street, within three (3) months from the date of these Orders ("the default date"), the Respondent as the registered proprietor of 1 C Street thereafter do all acts and things necessary to cause 1 C Street to be listed for sale on the following terms and conditions:
18.1The Applicant is hereby appointed as Trustee for the Respondent on the sale of the 1 C Street and the discharge of mortgage over 1 C Street pursuant to these Orders and the Applicant is empowered to do all acts and things and sign all necessary documents on behalf of the Respondent to give effect to these Orders.
18.21 C Street shall be listed for sale by auction with a Real Estate Agent nominated by the Applicant ("the Agent").
18.3the Applicant's solicitors shall be instructed to act on the sale of 1 C Street and shall provide to the Respondent and/or the Respondent's solicitors such information as they may reasonably require from time to time.
18.4the reserve price of the property shall be as recommended by the Agent;
18.5the auction shall take place at the earliest date as recommended by the Agent;
18.6the auctioneer shall be as nominated by the Agent;
18.7the Applicant and the Respondent shall each cooperate in every way with the Agent including (without limiting the generality of the foregoing):-
18.7.1making the key available to the Agent;
18.7.2allowing inspection of 1 C Street at all reasonable times requested by the Agent;
18.7.3doing or saying nothing to hinder or prevent a sale being effected;
18.7.4ensuring 1 C Street is in a neat and clean condition at the time of inspection by the Agent and prospective purchasers; and
18.7.5signing all documents requested by the Agents in relation to the listing for sale of 1 C Street except a contract or agreement for sale which has not been authorised by the parties’ solicitors.
18.8That in the event that 1 C Street does not reach reserve price at the auction, the parties shall negotiate with the highest bidders or any such interested persons and effect the sale of 1 C Street at a selling price as agreed between the parties, or failing agreement on the day of auction the parties shall accept the recommendation of the Agent and/or the Auctioneer as to the selling price of 1 C Street and shall sell 1 C Street at that price.
18.9In the event that 1 C Street is not sold by auction or by private negotiation within fourteen (14) days after the said auction then the patties shall do all acts and sign all necessary documents and pay all moneys as necessary to procure a second auction within a further five (5) weeks of the date otherwise upon the same terms and conditions as applied to the first auction except the reserve price be reduced by 10% or otherwise agreed upon between the parties.
18.10That for the purpose of the transfer or sale of 1 C Street referred to in these Orders:
18.10.1Each of the parties will instruct their representatives to do all acts and things and sign all documents necessary to give effect to the settlement via the electronic conveyancing platform, Property Exchange Australia known as PEXA ("the electronic conveyancing platform").
18.10.2In the event either party is self-represented at any time, then that party will nevertheless instruct a subscriber to the electronic conveyancing platform for the purposes of the settlement, and will meet their own costs of the practitioner instructed by them:
18.10.3The patties will pay their own electronic conveyancing fees and in the event one party meets the other party's fees at the date of settlement, the party who did not pay their own fees will reimburse the other party within seven (7) days of the date of settlement.
19.Upon completion of sale of 1 C Street the proceeds of sale be paid in the following manner and priority:
19.1all costs and expenses of sale, including legal costs and disbursements, Agent’s commissions, advertising expenses, Valuer's fees and auction expenses;
19.2In discharge of the 1 C Street Mortgage;
19.3In payment to the Applicant, the balance then remaining.
20.That in the event that 1 C Street is unable to be sold on its own after a period of ninety (90) days from the date of the second auction pursuant to Order 18.9 above, then the parties forthwith do all acts and things necessary to cause 1 C Street and 2 C Street to be listed for sale together, on the following terms and conditions:-
20.1The Applicant is hereby appointed as Trustee for the Respondent on the sale and discharge of mortgage over 1 C Street pursuant to these Orders and the Applicant is empowered to do all things and sign all necessary documents on behalf of the Respondent to give effect to these Orders.
20.2On the basis that at the time of this sale the Respondent has pursuant to Order 7 hereof, resigned as director and the Applicant is the sole director of the Trustee of the SMSF or if not, then the Applicant is hereby appointed as trustee for the Respondent for the purposes of his role as director of the Trustee of the SMSF for the sale and discharge of mortgage over 2 C Street pursuant to these Orders, and the Applicant is empowered to do all acts and things and sign all necessary documents on behalf of the Respondent to give effect to these Orders.
20.31 C Street and 2 C Street shall be listed for sale by auction with a Real Estate Agent nominated by the Applicant ("the Agent").
20.4the Applicant's solicitors shall be instructed to act on the sale of 1 C Street and 2 C Street and shall provide to the Respondent and/or the Respondent's solicitors such information as they may reasonably require from time to time.
20.5the reserve price of 1 C Street and 2 C Street shall be as recommended by the Agent;
20.6the auction shall take place at the earliest date as recommended by the Agent;
20.7the auctioneer shall be as nominated by the Agent;
20.8the Applicant and the Respondent shall each cooperate in every way with the Agent including (without limiting the generality of the foregoing):
20.8.1making the key available to the Agent;
20.8.2allowing inspection of 1 C Street and 2 C Street at all reasonable times requested by the Agent;
20.8.3doing or saying nothing to hinder or prevent a sale being effected;
20.8.4ensuring 1 C Street and 2 C Street is in a neat and clean condition at the time of inspection by the Agent and prospective purchasers; and
20.8.5signing all documents requested by the Agents in relation to the listing for sale of 1 C Street and 2 C Street, except a contract or agreement for sale which has not been authorised by the parties’ Solicitors.
20.9That in the event that l and 2 C Street does not reach reserve price at the auction, the parties shall negotiate with the highest bidders or any such interested persons and effect the sale of 1 C Street and 2 C Street at a selling price as agreed between the parties, or failing agreement on the day of auction the parties shall accept the recommendation of the Agent and/or the Auctioneer as to the selling price of 1 C Street and 2 C Street and shall sell it at that price.
20.10In the event that 1 C Street and 2 C Street are not sold by auction or by private negotiation within fourteen (14) days after the said auction then the parties shall do all acts and sign all necessary documents and pay all moneys as necessary to procure a second auction within a further five (5) weeks of the date, otherwise upon the same terms and conditions as applied to the first auction except the reserve price be reduced by 10% or otherwise agreed upon between the parties.
20.11That for the purpose of the transfer and sale of 1 C Street and 2 C Street referred to in these Orders:-
20.11.1Each of the parties will instruct their representatives to do all acts and things and sign all documents necessary to give effect to the settlement via the electronic conveyancing platform, Property Exchange Australia known as PEXA ("the electronic conveyancing platform").
20.11.2In the event either party is self-represented at any time, then that party will nevertheless instruct a subscriber to the electronic conveyancing platform for the purposes of the settlement, and will meet their own costs of the practitioner instructed by them;
20.11.3The parties will pay their own electronic conveyancing fees and in the event one party meets the other party’s fees at the date of settlement, the party who did not pay their own fees will reimburse the other party within seven (7) days of the date of settlement.
21.Upon completion of sale of 1 C Street and 2 C Street, the proceeds of sale be paid in the following manner and priority:
21.1all costs and expenses of sale, including legal costs and disbursements, Agent's commissions, advertising expenses, Valuer's fees and auction expenses to be shared between the patties and the SMSF;
21.2In discharge of the 1 C Street Mortgage and the 2 C Street Mortgage;
21.3In payment to the SMSF, the sum equivalent to the market value of 2 C Street, the market value being the value provided by Mr O of T Valuers in his expert valuation report filed in these proceedings less costs and expenses of the SMSF as referred to in Order 21.1 hereof;
21.4In payment to the Applicant, the balance then remaining, if any.
Child Support
22.That pursuant to Section 123A of the Child Support (Assessment) Act 1989, that within fourteen (14) days of the date of these Orders, the Respondent provide child support to Applicant for the child X ("the child") by way of a lump sum payment of $142,720.
23.That the amount in Order 22 above is to be credited against the administrative assessment of child support.
24.That the lump sum payment is to be credited as to 100% of the annual rate of child support payable, from the date of these Orders until the lump sum is exhausted.
25.That within fourteen (14) days from the date of these Orders, the Respondent pay to the Applicant the sum of $55,774 in relation to arrears of child support for the period 1 January 2017 to 30 June 2019.
Spousal Maintenance
26.That pursuant to Order 77A of the Family Law Act, the Respondent pay periodic maintenance to the Applicant in the sum of $700 per week, commencing seven days after the date of this order and be payable for 5 years.
27.In the alternative to Order 20 above, that within fourteen (14) days of the date of this Order, pursuant to Section 77A of the Family Law Act, the Respondent shall pay to the Applicant the sum of $182,000 by way of lump sum spousal maintenance.
Other Orders
28.That within seven (7) days from the date of these orders, the Respondent shall do all acts and things necessary to cause the recreational boat registration number … to be transferred to the sole name of the Applicant and the Applicant shall hereby indemnify the Respondent and keep him indemnified in relation to all liabilities in respect of the said boat, whenever howsoever arising.
29.That the Respondent do all acts and things and sign all documents to give effect to Order 28 above, and in the event that the Respondent does complete the transfer referred to Order 28 to give effect to these Orders within fourteen (14) days of written request from the Applicant to transfer the recreational boat into the Applicants name, then the Applicant is hereby appointed as Trustee of the Respondent for the purposes of the transfer and the Applicant is empowered do all things and sign all necessary documents on behalf of the Respondent to give effect to Order 28.
30.That the Applicant be declared to have the sole right, title and interest in the following items and the Respondent shall within seven (7) days from the date of these Orders do all acts and things so as to deliver the below items to the Applicant:-
30.1The Motor Vehicle 1 registered in the Applicant's name;
30.2The sculpture;
30.3The animal wall prints;
30.4Security cameras and small Television.
31.That in the event that the Respondent fails to deliver the items in Order 30 above within seven (7) days to the Applicant, then the Respondent hereby authorises N Storage facility to provide access to the Applicant to the above items and hereby authorises the Applicant to remove the above items from the N Storage facility and this Order shall be sufficient authority to the N Storage facility to release the items to the Applicant.
32.That the Applicant is hereby authorised to provide a copy of these Orders to any company and/or organisation to give effect to these Orders.
33.That unless otherwise specified in these Orders:-
33.1each party be solely entitled to all real estate, chattels, goods, motor vehicles, furniture, furnishings businesses and any other property in the possession of such party as at the date of these Orders;
33.2each party be solely entitled to any moneys shares and debentures which stand in such party's name as at the date of these Orders;
33.3each party be solely entitled to any superannuation benefits held in such party’s name and each party hereby foregoes any claim they may have to any superannuation benefits belonging to or earned by the other; and
33.4each party be solely liable for and indemnify the other against any debt, loan or liability whatsoever held in such party's name as at the date of these Orders.
34.That in the event that either party refuses or neglects to execute any deed or instrument within seven days of that deed or instrument being forwarded to him or her or his or her solicitor, an officer of the Court is hereby appointed pursuant to Section 106A of the Family Law Act, to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation of the deed or instrument. That the Registrar or Deputy Registrar or other Officer is authorised to execute any such necessary instrument upon being satisfied by Affidavit that refusal, neglect or default, as the case may be, has occurred.
35.That the Respondent pay the Applicant's costs of and incidental to this Application.
36.That the Respondent pay the Applicant's costs in relation to implementation and enforcement of these Orders.
NOTATION
A.That the Respondent indemnify the Applicant in respect of all liability to pay tax including income tax, goods and services tax, capital gains Tax, penalty tax and interest which may arise in the future in respect of any tax returns lodged on behalf of the Respondent or any entity in which the Respondent has an interest in to the date of these Orders or in respect of any transactions pursuant to these Orders.
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