Kyler & Riber
[2024] FedCFamC1F 847
•11 December 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Kyler & Riber [2024] FedCFamC1F 847
File number(s): PAC 68 of 2021 Judgment of: ANDERSON J Date of judgment: 11 December 2024 Catchwords: FAMILY LAW – PROPERTY – Alteration of property interests – Where parties had 23 year relationship – Where wife asserts that her contributions were superior to the financial and non-financial contributions of the husband – Where the wife asserts that but for the financial assistance of her family members the parties would not have been able to establish a service business – Where husband made no financial contribution to the children of the relationship in the four years subsequent to separation – No matters of principle Legislation: Family Law Act 1975 (Cth) ss 75, 78, 79, 106A
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 8.15
Cases cited: Bevan & Bevan (2013) 279 FLR 1; [2013] FamCAFC 116
Chapman & Chapman (2014) 51 Fam LR 176; [2014] FamCAFC 91
DJM v JLM (1998) FLC 92-186; [1998] FamCA 97
Figgins and Figgins (2002) FLC 93-122; [2002] FamCA 688
Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervenor) (2003) FLC 93-143; [2003] FamCA 395
In the Marriage of Biltoft (1995) FLC 92-614
Keighly & Keighly (No 2) [2023] FedCFamC1F 42
Kennon v Kennon (1997) FLC 92-757;
Kowaliw and Kowaliw (1981) FLC 91-092; [1981] FamCA 70
Lee Steere & Lee Steere (1985) FLC 91-626; [1985] FamCA 57
Money & Money (1994) FLC 92-485
Phillips & Phillips (2002) FLC 93-104; [2002] FamCA 350
Pierce v Pierce (1999) FLC 92-844; [1998] FamCA 74
Roverati & Roverati [2021] FamCAFC 89
Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52
Steinbrenner & Steinbrenner [2008] Fam CAFC 193
Townsend and Townsend (1994) FLC 92-569
Trevi & Trevi (2018) FLC 93-858; [2018] FamCAFC 173
Trustee of the property of G Lemnos v Lemnos and Another (2009) 41 Fam LR 120; [2009] FamCAFC 20
Wallace & Wallace [2022] FedCFamC1F 536
Wardman & Hudson (1978) FLC 90-466; [1978] FamCA 68
Waters & Jurek (1995) FLC 92-635
Watson & Ling (2013) 49 Fam LR 303; [2013] FamCA 57
Way & Way (1996) FLC 92-702
White and White (1982) FLC 91-246
Division: Division 1 First Instance Number of paragraphs: 142 Date of hearing: 30 September 2024 – 3 October 2024 Place: Parramatta Counsel for the Applicant: Mr Fermanis Solicitor for the Applicant: O’Loan Family Law Counsel for the Respondent: Mr Macarounas Solicitor for the Respondent: First Choice Family Lawyers ORDERS
PAC 68 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR KYLER
ApplicantAND: MS RIBER
Respondent
ORDER MADE BY:
ANDERSON J
DATE OF ORDER:
11 DECEMBER 2024
THE COURT ORDERS THAT:
In full and final settlement of all claims for settlement of matrimonial property:
1.Within sixty (60) days of the date of these Orders, the parties do all acts and things and sign all documents necessary to sell all shares held by the parties jointly in B Ltd with the net proceeds of sale to be divided between the parties equally.
2.Within sixty (60) days of the date of these Orders, the parties do acts and things and sign all documents necessary to close any bank account held in the joint names of the parties with the proceeds of those accounts to be divided between the parties on an equal basis.
3.The parties do all acts and things necessary to place the property situate at C Street, Suburb D in the State of New South Wales more properly described as Folio … (‘the Suburb D property’) on the market for sale with F Real Estate and E Real Estate on the following conditions:
(a)The sale price at which the Suburb D property be listed be mutually agreed upon by the parties, or in the absence of agreement, as nominated by the agents referred to in these orders;
(b)The parties cooperate in every way with the agents referred to in these orders including but not limited to:
(i)Making the key available to the agents;
(ii)Allowing inspection of the Suburb D property at all reasonable times requested by the agent;
(iii)Ensuring the Suburb D property including its grounds are in a neat and clean condition at the time of inspection by the agents and prospective purchasers;
(c)G Pty Ltd is appointed to act on the sale of the property;
(d)Neither party may confer on any agent without the consent of the other party any right to any sole or exclusive agency in respect of the Suburb D property or to any commission;
(e)The parties shall do all acts and things necessary to prepare the property for sale including the registration of any easement or other works required to be done to comply with Orders made by the Land and Environment Court in respect of the Suburb D property with the wife to pay for the costs at first instance and be reimbursed by the husband on the sale of the property;
(f)Pending the sale of the Suburb D property the wife shall be solely responsible for maintaining the outgoings of the property including all mortgage payments.
4.In the event that the Suburb D property is not sold by public auction within three (3) months of the date of these Orders, the parties are to do all acts and things and sign all documents necessary to relist the Suburb D property for sale by private treaty or public auction every two months on the same terms and conditions referred to at Order 3 herein save that, unless otherwise agreed, the sale or reserve price shall be reduced by five (5) percent at each auction until the property is sold.
5.On settlement of the sale of the Suburb D property, the proceeds of sale shall be applied in the following manner and priority:
(a)In discharge of the mortgage secured against the Suburb D property;
(b)All costs and expenses of sale including legal costs and disbursements, agents’ commission and auction expenses;
(c)The amounts required to pay all municipal rates, water rates or land tax due in respect of the property;
(d)Such sum as is necessary to discharge the debt owing by the parties to H Lawyers and Mr J, barrister;
(e)With respect to the balance remaining in payment to the parties as follows:
(i)In payment to the wife of an amount calculated by the following formula: (57.5% x D) + B
Where:
A = $320,225, being the net value of the assets to be retained by the husband pursuant to these orders
B = $317,844 (being the sum necessary to put the wife at a nil balance in circumstances where the net value of non-superannuation assets to be retained by the wife pursuant to these orders other than monies to be received from the Suburb D property is -$317,844)
C = The net proceeds of sale of the Suburb D property
D = The total of A + B + C
(ii)A sum of $17,336 to the wife being monies owed to the wife by the husband on account of the Husband’s half share of fees payable for liquidation of K Pty Ltd and a Director’s Penalty Notice payable by K Pty Ltd;
(iii)Such sum as is necessary to reimburse the wife for costs incurred by her pursuant to Order 3(e) herein;
(iv)The balance then remaining to the husband.
6.The wife is declared to be the sole owner in equity and at law to the exclusion of the husband to the following:
(a)Her interest in L Pty Ltd (ACN …) as trustee for the L Trust;
(b)Her interest in M Pty Ltd (ACN …);
(c)Her interest in N Pty Ltd (ACN …); and
(d)Her interest in the Kyler and Riber Superannuation Trust.
7.The husband is declared to be the sole owner in equity and at law to the exclusion of the wife:
(a)His interest in O Pty Ltd (ACN …); and
(b)His interest in the Kyler Family Self-Managed Superannuation Fund.
8.That for the purposes of Order 6 and Order 7 herein, each party shall finalise his/her involvement in the entities referred to therein in such manner as each party may require including but not limited to:
(a)Forgiving, waiving or assigning his/her entitlements (if any) to any monies standing to his/her credit or debit in loan accounts;
(b)Relinquishing any claims or entitlements he/she may have in relation to any entity to the intent and effect that the assets of each party’s entity will not hereafter be subject to any claim, either legal or equitable, by either party.
9.Unless otherwise provided:
(a)Each party shall be the sole legal and beneficial owner (as between the parties) of all other assets in their respective possession as at the date of these orders, and for that purpose bank accounts are deemed to be in the possession of the person named as the account holder and superannuation entitlements are deemed to be in the possession of the superannuant;
(b)Each party shall be solely liable for and shall indemnify the others against any and all debts attaching or relating to the property in their respective possession, and any debts in their respective sole names, including any individual liability for tax arising out of the sale by the parties of property pursuant to these orders.
10.In the event of any party refusing or neglecting to sign within seven (7) days of a written request to do so any document necessary to implement the terms of these orders a Registrar of Federal Circuit and Family Court of Australia is empowered to execute such documents on behalf of the parties pursuant to s 106A of the Family Law Act.
11.All outstanding applications are dismissed.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 Kyler & Riber has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ANDERSON J:
INTRODUCTION
The applicant husband brought these proceedings against the respondent wife to adjust their property interests pursuant to Part VIII of the Family Law Act 1975 (Cth) (“the Act”) following the breakdown of their marriage in August 2019.
The principal issues in this case are:
(a)An assessment of the parties’ respective contributions pursuant to s 79(4)(a), (b) and (c) of the Act in relation to non-superannuation assets. It is agreed that each party should retain his/her own interest in their respective superannuation funds; and
(b)Whether an adjustment in favour of the wife pursuant to s 79(4)(e) of the Act is warranted on account of s 75(2) factors.
The husband seeks an equal division of the parties’ non-superannuation assets whilst the wife seeks that it be divided into proportions whereby, she retains 72.5 per cent and he retains the remaining 27.5 per cent.[1]
[1] Husband’s Outline of Case Document, page 15 of 17.
In circumstances where each party seeks an order under s 79(1) of the Act for an alteration of interests in property, albeit to different effect, it is implicit that they concede it is just and equitable for the Court to do so, as required by s 79(2) of the Act. I agree that it is just and equitable for the Court to make an order under s 79 of the Act. Particularly, and as will become clear, there is not and will not be the common use of property by the husband and wife. Further, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the severance of the marital relationship.[2] The matters identified by the plurality of the High Court in Stanford v Stanford (2012) 247 CLR 108 at [42] apply in this case.
[2] Stanford v Stanford (2012) 247 CLR 108 at [42].
For the reasons which follow, I shall order a division of the parties' non-superannuation property in the proportions of 57.5 percent in favour of the wife and 42.5 percent in favour of the husband. On the joint application of the parties, each party will otherwise retain his/her interest in his/her own superannuation fund.
BACKGROUND
Corporate Structures
Several companies were created by the parties during their relationship. The entities, which are relevant for the purposes of this Judgment can be summarised as follows:
(a)N Pty Ltd (“N Pty Ltd”). The wife is the sole director and secretary of that company;[3]
(b)L Pty Ltd as trustee for the L Trust (“L Pty Ltd”). The wife is the sole director and secretary of that company.[4] The husband ceased in his role as an officeholder on 17 November 2020;[5] and
(c)K Pty Ltd (“K Pty Ltd”). Pursuant to Orders made on 5 December 2022, liquidators were appointed to wind up the affairs of the company.
[3] Exhibit W23.
[4] Exhibit W23.
[5] Exhibit W8.
In addition to these entities, the parties created two self-managed superannuation funds.
The husband asserts that N Pty Ltd and L Pty Ltd were the parties’ primary trading entities.[6] The wife does not dispute the husband’s assertion.
[6] Husband’s affidavit filed 25 September 2024, paragraph 30.
Relevant Facts
The husband is aged 52 years. The wife is aged 51 years. Each party is of Country P origin. The parties met in Australia in 1992. They commenced dating in about 1997, married in 1999 and began living together on the same date.[7] The parties separated on 1 August 2019 but remained living under the same roof until 1 April 2020.[8] The parties are not divorced.
[7] Wife’s affidavit filed 25 September 2024, paragraphs 7 – 8.
[8] Wife’s affidavit filed 25 September 2024, paragraph 11.
The parties have four children. The eldest child is aged 20 years, the twin children are aged 19 years and the youngest child is aged thirteen years.[9] The wife has been solely responsible for the care of the children since the husband left the former matrimonial home on 1 April 2020.[10] The wife says that the children spend time with the husband on average once every two months.[11] The husband concedes that since separation, his time with the children has been limited.
[9] Husband’s affidavit filed 25 September 2024, paragraph 4.
[10] Wife’s affidavit filed 25 September 2024, paragraph 11.
[11] Wife’s affidavit filed 25 September 2024, paragraph 137.
Three years prior to cohabitation, the husband purchased a retail business at Suburb Q, Sydney. He says that he toiled in the business such that when he sold the business four years after the parties’ marriage, he was able to sell it for a sum of $92,000.[12] For her part, the wife says that at cohabitation, she held a 25 per cent interest in a hospitality business.[13] She worked at that business on a casual basis whilst otherwise working as a public servant. Contemporaneously, the wife studied for a tertiary qualification.[14]
[12] Husband’s affidavit filed 25 September 20-24, paragraph 12.
[13] Wife’s affidavit filed 25 September 2024, paragraph 14.
[14] Wife’s affidavit filed 25 September 2024, paragraphs 14 – 15.
In 2002, the husband established the entity, K Pty Ltd.[15] The husband said in his written evidence that he established the entity in 2006 but conceded under cross-examination that he was wrong, and the business was in fact established in 2002. K Pty Ltd was an import/export business of “commercial [goods]”.[16] The husband says that he stopped operating this business in about 2009 so that the parties could focus solely on the service business.[17] That assertion is disputed by the wife.
[15] Husband’s affidavit filed 25 September 2024, paragraph 29(iii); Exhibit W23.
[16] Husband’s affidavit filed 25 September 2024, paragraph 16.
[17] Husband’s affidavit filed 25 September 2024, paragraph 16.
The husband in his written evidence deposed that in 2003, the parties purchased a shopfront at Suburb S. Additionally, he said that the Suburb S property was financed from the proceeds of sale of his retail business.[18] The husband conceded under cross-examination that he was in fact wrong. He conceded that the purchase was financed by joint savings but disagreed with the wife’s assertion that a sum of $25,000 from the sale of the hospitality business (supra) was applied towards the purchase.[19] Given the length of the relationship, I find that this difference in the parties’ evidence will not have any consequence with respect to my assessment of the parties’ respective contributions.
[18] Husband’s affidavit filed 25 September 2024, paragraph 13.
[19] Wife’s affidavit filed 25 September 2024, paragraph 32.
In 2004, the parties opened their first service business from a leased property at Suburb R.[20] The parties leased the property from the husband’s nephew, but the parties had to spend a significant amount of money to construct a service centre. The wife said in her written evidence that the parties obtained a loan in a sum of $150,000 from T Bank for this purpose and that such loan was guaranteed by her parents.[21] The husband conceded under cross‑examination that the loan was guaranteed by the wife’s parents.
[20] Wife’s affidavit filed 25 September 2024, paragraph 43.
[21] Wife’s affidavit filed 25 September 2024, paragraph 40.
In 2006, the husband sold the shopfront at Suburb S.[22] The husband in his written evidence said that net proceeds of sale in the order of $130,000 were deposited into an account in his sole name. The wife disputed that assertion and under cross-examination, the husband conceded that the proceeds of sale were in fact deposited into a joint account.[23]
[22] Husband’s affidavit filed 25 September 2024, paragraph 13 and paragraph 16.
[23] Wife’s affidavit filed 25 September 2024, paragraph 48.
In 2006, the wife established a charity known as U Ltd with two friends. The wife says that the charity was intended to operate a service. The wife says that it was her intention to open a service centre with any profits to be returned into a related program.[24]
[24] Wife’s affidavit filed 25 September 2024, paragraph 49.
In 2008, the husband’s nephew sold the Suburb R property to V Company. The latter terminated the lease and thereafter, the parties and V Company engaged in litigation. The wife says that as a consequence of the litigation, the parties were “nearly broke” by late 2008.[25] The husband agreed under cross-examination that by late 2008, the parties’ financial position was “poor”. Ultimately, the parties reached agreement with V Company to enable them to continue operating from the Suburb R property until mid-2009.
[25] Wife’s affidavit filed 25 September 2024, paragraph 55.
In the face of financial ruin, the husband says that in late 2008, he and the wife contemplated returning to Country P.[26] Such a step was avoided, however, after the parties found a property at Suburb Y, which they identified as an appropriate site for a service centre. The wife says that she found the property and made the relevant enquiries as to its purchase, but this assertion was disputed by the husband under cross-examination. This characteristic pervaded each party’s evidence. That is, neither party was able to give the other party credit for the successful life, which they built for themselves and the children.
[26] Husband’s oral evidence – 30 September 2024.
Given the parties’ dire financial position, the wife says that she approached her brother and her parents for assistance to purchase the Suburb Y property.[27] The husband’s oral evidence was to the effect that the wife’s parents approached him and said, “we will give you whatever you need”. Whatever the truth or otherwise of each party’s assertion, the evidence described permits a finding that the purchase of the Suburb Y property could not have proceeded absent the assistance of the wife’s family members.
[27] Wife’s affidavit filed 25 September 2024, paragraph 57.
The parties agree that the Suburb Y property was purchased by Kyler Pty Ltd and Riber Management Pty Ltd as tenants in common in equal shares.[28] The parties were the directors of Kyler Pty Ltd whilst the wife’s brother controlled Riber Management Pty Ltd.[29] The husband says that not only did the parties borrow a sum of $500,000 to finance their share of the purchase price for the land but the parties borrowed an additional sum of $460,000 to construct a service centre.[30] The Wife placed a different figure on the amount required for construction. In any event, and as discussed, the parties could not have purchased their interest in the Suburb Y property absent the assistance of the wife’s parents who agreed to guarantee the loan.[31] The husband agreed in his oral evidence that such a guarantee was provided.
[28] Husband’s affidavit filed 25 September 2024, paragraph 17.
[29] Wife’s affidavit filed 25 September 2024, paragraph 58; Husband’s affidavit filed 25 September 2024, paragraph 17.
[30] Husband’s affidavit filed 25 September 2024, paragraph 17.
[31] Wife’s affidavit filed 25 September 2024, paragraph 58.
In late 2009, the Suburb Y property became operational as a “[…] service”. Later, the parties also established another service.[32]
[32] Wife’s affidavit filed 25 September 2024, paragraph 63.
Between 2010 and 2014, the parties established a further eleven service centres.[33] In late 2014, nine of those centres were sold to a third party for $1,400,000.[34] The wife says that the start-up costs for the centres was low given that the parties simply operated the centres through facilities held by a religious organisation.[35] The husband conceded in his oral evidence that the wife had contacts at the organisation, which paved the way for the opening of the centres.
[33] Husband’s affidavit filed 25 September 2024, paragraph 18.
[34] Husband’s affidavit filed 25 September 2024, paragraph 19.
[35] Wife’s affidavit filed 25 September 2024, paragraph 64.
In 2013, the parties completely rebuilt a dwelling on a property at Suburb W, which they purchased in late 2004. The rebuild was funded by joint savings and monies realised by the parties on the sale of the shop front at Suburb S.[36] The property was sold for over $1,500,000 in mid-2015 and the net proceeds were deposited into an account jointly held by the parties.[37]
[36] Husband’s affidavit filed 25 September 2024, paragraph 20.
[37] Husband’s affidavit filed 25 September 2024, paragraph 22.
In 2014, the parties sold the service business located at the Suburb Y property. The parties through Kyler Pty Ltd, however, retained ownership of the land together with the corporate entity controlled by the wife’s brother.[38] The parties received a sum of $711,809 on the sale of the business,[39] which the wife says was deposited into a self-managed superannuation fund. In late 2016, the parties disposed of their interest in the land and the wife says that proceeds of sale in the order of $1,200,000 were divided between the parties and the wife’s brother.[40]
[38] Husband’s affidavit filed 25 September 2024, paragraph 21.
[39] Exhibit W4.
[40] Wife’s affidavit filed 25 September 2024, paragraph 76.
In 2015, the parties purchased the former matrimonial home at Suburb D. The purchase was funded by the parties’ joint savings and monies realised on the sale of the Suburb W property.[41] The parties rebuilt a dwelling on that property utilising joint savings. Whilst this occurred, the parties lived with the wife’s parents for a period of time on a rent-free basis.[42] The parties do not agree whether the construction occurred over a period of 14 months as asserted by the wife or a lesser period of seven months as asserted by the husband. I find that this small difference in the evidence will not make any material difference to my determination of the parties’ competing applications.
[41] Husband’s affidavit filed 25 September 2024, paragraph 24.
[42] Wife’s affidavit filed 25 September 2024, paragraph 70.
The husband says that the works at the Suburb D property were completed by him as an Owner-Builder. He says that he travelled to Country Z to source materials for the property.[43] As a consequence of works performed at the Suburb D property, the parties became embroiled in litigation with the local council for a period of about four years.[44] The parties expended a significant sum of money on legal fees. Again, the wife says that she alone bore the burden of the litigation, but the Husband denies such an assertion. It is impossible for me to make any finding on this topic, nor do I consider that such a determination is relevant to the ultimate question to be determined by me.
[43] Husband’s affidavit filed 25 September 2024, paragraph 26.
[44] Wife’s affidavit filed 25 September 2024, paragraph 73; Exhibit W5.
Subsequent to separation, a swimming pool was constructed at the rear of the Suburb D property. The husband complains that he never authorised the works and says that the quotation agreed to by the wife was too high.[45] This topic is discussed below.
[45] Husband’s affidavit filed 25 September 2024, paragraph 34.
In early 2015, and through the mechanism of a corporate entity controlled by them, the parties purchased a warehouse at Suburb AA. The purchase was funded by joint savings and a mortgage.[46] That property became the head office of N Pty Ltd and L Pty Ltd.[47]
[46] Husband’s affidavit filed 25 September 2024, paragraph 25.
[47] Wife’s affidavit filed 25 September 2024, paragraph 69; Husband’s affidavit filed 25 September 2024, paragraph 25.
In 2019, the wife was diagnosed with a medical condition. Sadly, she required major surgery. Surgery occurred in late 2019.[48]
[48] Wife’s affidavit filed 25 September 2024, paragraph 87.
After the husband left the Suburb D property in April 2020, the wife says that she alone has managed the parties’ businesses and mortgage commitments.[49] The wife did so in the face of the Covid-19 pandemic, which the Single Expert says had a significant impact on the financial performance of the parties’ businesses. There is no dispute between the parties that subsequent to April 2020, the parties’ financial fortunes were left in the hands of the wife. For his part, the husband has been unemployed.[50]
[49] Wife’s affidavit filed 25 September 2024, paragraph 99.
[50] Husband’s affidavit filed 25 September 2024, paragraph 65.
The service business operated by L Pty Ltd continues to trade although as will be discussed below, the Single Expert has expressed an opinion that the business is of no value in circumstances where for several years it has been operating at a loss.
EVIDENCE
The husband relied on:
(a)His affidavit filed on 25 September 2024;
(b)His Financial Statement filed on 25 September 2024; and
(c)Tendered documents.[51]
Although twenty-four documents were marked as Exhibits in the husband’s case, the husband conceded by the time of Closing Submissions that I could prepare this Judgment without having regard to exhibits H1 to H10. That concession was made in circumstances where I advised the husband’s counsel that if he required me to review Annual Trial Balances and Annual General Ledgers for L Pty Ltd and N Pty Ltd for the period 1 July 2019 to 30 June 2021 and draw a conclusion about the operation of those entities in the post-separation period, then I would not be doing so. Indeed, and as discussed by the Full Court in Chapman & Chapman at [39]:[52]
[39]The consideration of the relevant matters referred to in s 75(2) of the Act, pursuant to s 79(4), like the assessment of contributions is holistic. Also, like the assessment of contributions, it is not an accounting exercise.
[51] Exhibits H1 to H24.
[52] Chapman & Chapman (2014) 51 Fam LR 176.
The wife relied on:
(a)Her affidavit filed on 25 September 2024;
(b)Her Financial Statement filed on 27 September 2024;
(c)An affidavit of the wife’s accountant filed on 25 September 2024;
(d)An affidavit of an employee of the Wife filed on 25 September 2024;
(e)A further affidavit of an employee of the Wife filed on 25 September 2024; and
(f)Tendered documents.[53]
[53] Exhibits W1 to W23.
The affidavits of the wife’s accountant and employees were with the consent of the husband admitted into evidence without the need to call the deponents to give evidence. Some evidence was struck from the affidavits but for the purposes of this Judgment, the agreements reached between counsel and my rulings have no effect.
The Court excluded all annexures to each party’s affidavit having regard to r 8.15(3)(e) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
In compliance with orders made by The Honourable Justice Riethmuller, the parties also relied on a Joint Chronology filed on 27 September 2024. On the penultimate day of trial, the parties provided me with a Joint Balance Sheet.[54]
[54] Exhibit W13.
LEGAL PRINCIPLES
Part VIII of the Family Law Act 1975 deals with financial matters relating to parties who are or have been married to one another. Section 79(1) authorises the court to alter the property interests of the parties to a marriage. Part VIIIB provides specific provisions enabling the splitting of superannuation between spouses.
The major provisions relating to marital property division are contained in ss 79(1), 79(2), 79(4), and 75(2) of Part VIII of the Act. Pursuant to s 79(1) the court is authorised to make such order as it considers appropriate in order to alter the interests of the parties to a marriage in relevant property.
Pursuant to s 79(2) the court is actively prevented from making such an order unless it is satisfied that it is just and equitable to do so in all the circumstances prevailing. This follows from the use of the prohibitive words “shall not” in the relevant section.
Section 79(4) provides the mechanics of how a court is to make an order altering marital property interests. It provides that seven matters [in paragraphs (a) – (g)] to be considered, as relevant.
Paragraphs (a), (b), and (c) categorise contributions made by marital partners, which are relevant. Paragraph (d) directs the court to take into account the effect of any order upon the earning capacity of either party to the marriage concerned.
Paragraph (e) directs the court to consider a list of matters contained in s 75(2), which are germane to spousal maintenance, or the prospective positions of the parties concerned by reference to their respective financial resources, means and needs.
Finally, paragraphs (f) and (g) apply to child support and previously made parenting orders, as relevant. There is some overlap between these various provisions and not all will be applicable in every case.
Until 2012, the position in respect of the process to be applied to the resolution of matrimonial property cases was said to be well settled. The process entailed a four-step process, described by the Full Court as follows:
(a)Identification and valuation of the property of the parties;
(b)Identification and evaluation of contributions to the property (including property no longer owned by the parties) – the contribution phase – s 79(4)(a) to (c);
(c)Identification and assessment of the various matters in s 79(4)(d) to (g) including to the extent they are relevant, the matters in s 75(2) – the prospective needs phase; and
(d)Considerations of justice and equity.[55]
[55] Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervenor) (2003) FLC 93-143 at [39] and Bevan & Bevan (2013) 279 FLR 1 at [60].
The general applicability of this four-step process was recast in the light of what was said by the High Court in the decision of Stanford v Stanford delivered in 2012.[56] In that case, the majority stated that:
[35]It will be recalled that s 79(2) provides that ‘[t]he court shall 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’. Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.
[36]The expression ‘just and equitable’ is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.[57]
[56] Stanford v Stanford [2012] HCA 52.
[57] Stanford v Stanford [2012] HCA 52 at [35] – [36].
Accordingly, considerations of what is just and equitable flavour all applications pertaining to property settlement. What is fair is impossible to define with certitude and must depend on the prevailing circumstances. However, care must be taken to avoid conflating the stipulation contained in s 79(2) with the discretionary exercise contained in s 79(4).
In Bevan & Bevan the Full Court summarised three fundamental propositions relating to the interaction between s 79(2) and s 79(4),[58] which can be summarised as follows:
(a)Determination of what is just and equitable begins with an identification of existing property interests;
(b)The discretion provided by s 79 must not proceed on any assumption that any settlement of property should be different from those existing property interests, as determined by principles of common law and equity;
(c)However, a determination that a person has an entitlement to a division of property by reference only to s 79(4) would be wrong as it would ignore the express statutory requirement of s 79(2) or conflate the two considerations.
[58] Bevan & Bevan (2013) 279 FLR 1 at [73].
As discussed by the Full Court in Bevan, whether it is just and equitable to make any particular property order is invariably inextricably interwoven with questions of contribution arising under s 79(4) and the parties’ financial and relationship history with one another.
The four-step approach remains a valid approach to matrimonial property cases. In Bevan the majority of the Full Court (Bryant CJ and Thackeray J) said as follows:
[65]Although the High Court did not disapprove the four step process, we accept it was not approved either...However, the High Court’s decision serves to refocus attention on the obligation not to make an order adjusting property interests unless it is just and equitable to do so.
[71]Stanford will also serve as a reminder that the four step process ‘merely illuminates the path to the ultimate result’.[59]
[59] Bevan & Bevan (2013) 279 FLR 1 at [65] and [71].
In the first step, I must ascertain what are the parties’ assets and liabilities available to be divided between them. The normal rule is that those assets are to be determined as at the date of trial.[60]
[60] See Wardman & Hudson (1978) FLC 90-466; and In the Marriage of Biltoft (1995) FLC 92-614.
In the second step, I must ascertain the contributions, which each party has made towards the pool of assets. Contributions fall into two broad categories. The first kind is contributions to the property: financial contributions and non-financial contributions, made directly or indirectly, by or on behalf of a party to the marriage to the acquisition, conservation or improvement of any of the property of that relationship. The second kind is contributions to the welfare of the family: in the words of s 79(4)(c):
the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent.[61]
[61] See Family Law Act s 79(4)(c).
It is clear from the authorities that this second kind of contribution must be given appropriate weight and is not to be treated as a token matter or as a contribution which is inherently less valuable or important than a financial contribution to property.
In its totality, s 79(4) requires the court to examine the entirety of contributions, both financial and non-financial, to the welfare of the family, as well as to the acquisition, conservation and improvement of any asset which may be individually identified.
The task conferred is to weigh and assess contributions, which are necessarily disparate in nature. Contributions, within the framework of a marriage, which are different in quality and nature – that of a homemaker and parent, which is not readily quantifiable in dollar terms, and that of a wage earner; – must be compared. It has been referred to as a holistic exercise.[62]
[62] See Watson & Ling (2013) 49 Fam LR 303 at [13] per Murphy J.
As a consequence, contributions are not automatically required to be tied to the acquisition of any particular item and may be taken into account in a total sense. The exercise is not a purely arithmetical or accounting one.
EXISTING PROPERTY INTERESTS
The Joint Balance Sheet tendered by the parties identifies the asset pool for division as follows:
Ownership Description Applicant’s Value ($) Respondent’s Value ($) ASSETS 1 J C Street, Suburb D 6,000,000 6,000,000 2 J Bank Accounts (remaining proceeds of sale of BB Street, Suburb AA) Nil Nil 3 J B Ltd Shares (3,975 shares held) E 14,588 E 14,588 4 R L Pty Ltd 3,000,000 Nil 5 R N Pty Ltd Nil Nil 6 J NAB Account (USD, converted to AUD) E 7,272 E 7,272 7 A Westpac Bank Account #...22 (as at 26.09.2024) 30,220 30,220 8 A CC Bank Account (ending …79) 5 5 9 R NAB Account (ending …32) 2,754 2,754 10 J NAB Account (ending …69) Nil Nil 11 R NAB Account (ending …80) 2,091 2,091 12 J CC Bank Account (ending …56) 1,191 1,191 13 A Goods stored in Warehouse 40,000 40,000 14 A Motor Vehicle 1 50,000 50,000 15 R Estimated Tax Refund E 114,129 E 114,129 16 R Monies owed to the Wife by the Husband as per Items 23 and 24 below. E 17,336 E 17,336 Total 9,279,586 6,279,585 ADDBACKS 17 R Monies disbursed from sale of BB Street, Suburb AA and unilaterally utilised by Respondent 790,000 Nil 18 A Interim Partial Property Release pursuant to Orders made on 16 May 2023 200,000 200,000 Total 990,000 200,000 LIABILITIES 19 J Mortgage secured against C Street, Suburb D (as at 27.09.2024) 910,937 988,516 20 R Unpaid Tax Debt Nil Nil 21 R Directors Loan to N Pty Ltd Nil 436,818 22 J Legal Fees owed to H Lawyers and Mr J 6,186 6,186 23 A Husband’s half share of fees payable to DD Group for liquidation of entities (payable to Wife) 14,850 14,850 24 A Husband’s half share of Director’s Penalty Notice payable by K Pty Ltd (payable to Wife) 2,486 2,486 25 R Capital Gains Tax payable from the sale of BB Street, Suburb CC Nil Nil Total 934,459 1,621,277 SUPERANNUATION Member Name of Fund Type of Interest Applicant’s value Respondent’s value 26 A Kyler Family Self-Managed Super Fund Self-Managed Super Fund 561,793 561,793 27 R Kyler and Riber Superannuation Trust Self-Managed Super Fund 511,430 511,430 Total 1,073,223 1,073,223 Sale of the Suburb D property
Each party promotes Orders that the Suburb D property be placed on the market for sale. The parties did not agree about the terms and conditions of sale. Subsequent to the Trial, I received a written communication from each of the parties’ counsel to the effect that the property had been listed for sale by public auction with such auction to occur in late 2024. The parties agreed the identity of the sales agents and the conveyancer.
Sale of the B Ltd Shares
The wife promoted orders that B Ltd Shares held by the parties in joint names be sold. The husband agreed. I will make orders with respect to the sale of the shares.
Retention of property by the Wife
The wife sought declarations pursuant to s 78 of the Act to the effect that she be declared to be the sole owner in equity and at law to the following:
(a)Her shareholding and interest in the company L Pty Ltd together with her interest in the L Trust;
(b)Her shareholding and interest in the company, M Pty Ltd;
(c)Her interest in the company, N Pty Ltd; and
(d)Her interest in the Kyler and Riber Superannuation Trust.
The husband by his (Amended) Initiating Application made a concession to the effect that it is appropriate for the wife to retain any interest in entities owned by or businesses operated by the wife.[63] This was on the basis that the wife has solely operated the businesses since separation.
[63] (Amended) Initiating Application filed 26 September 2024, paragraph 6.4.
The Joint Balance Sheet does not include reference to N Pty Ltd. The parties agreed as a consequence of a report published by a Single Expert on 20 July 2022,[64] that this entity has a nil value. At the time of Trial, the parties continued to agree that the entity has a nil value.[65]
[64] Exhibit H24.
[65] Wife’s affidavit filed 25 September 2024, paragraph 54; Husband’s affidavit filed 25 September 2024, paragraph 40.
The husband by his (Amended) Initiating Application also made a concession to the effect that it is appropriate for the wife to retain any bank accounts in her sole name,[66] and any superannuation in her sole name.[67] The wife proposed orders to similar effect.[68]
[66] (Amended) Initiating Application filed 26 September 2024, paragraph 6.2.
[67] (Amended) Initiating Application filed 26 September 2024, paragraph 6.3.
[68] Wife’s Outline of Case Document, page 5 of 31.
Retention of property by the Husband
The wife sought a declaration pursuant to s 78 of the Act to the effect that the husband be declared to be the sole owner in equity and at law of the company O Pty Ltd.[69] The Order sought by the wife creates no difficulty in circumstances where the husband by his own application seeks an order that he be entitled to retain his interest in any businesses owned and operated by him.[70]
[69] Wife’s Outline of Case Document, page 4 of 31.
[70] (Amended) Initiating Application filed 26 September 2024, paragraph 5.4.
In a manner similar to the husband, the wife makes a concession that it is appropriate for the husband to retain any interest in entities owned by or businesses operated by the husband.[71]
[71] Response to Initiating Application filed 15 July 2021, paragraph 4.2.
Accordingly, and with respect to the assets and liabilities to be divided between the parties, I am only required to resolve the controversies referred to in the paragraph below.
Dispute as to the Balance Sheet
As a consequence of the agreements reached between the parties and referred to above, there are only three issues, which I need to determine before the Joint Balance Sheet can be crystallised. Those issues are:
(a)Whether the value of L Pty Ltd is $3,000,000 as asserted by the husband or nil as asserted by the wife;
(b)Whether a Director’s Loan to N Pty Ltd in a sum of $436,818 ought to be brought to account as a liability of the parties as asserted by the husband; and
(c)Whether there ought to be an ‘add back’ in a sum of $790,000 being monies disbursed by the wife on the sale of a property at Suburb AA.
Value of L Pty Ltd
L Pty Ltd was incorporated in 2011.[72] It is the corporate trustee of the L Trust.
[72] Husband’s affidavit filed 25 September 2024, paragraph 29(ii); Wife’s affidavit filed 25 September 2024, paragraph 65.
The wife says that the entity was established so that the parties might operate particular services.[73] The husband agrees.[74]
[73] Wife’s affidavit filed 25 September 2024, paragraph 65.
[74] Husband’s affidavit filed 25 September 2024, paragraph 31.
As discussed above, the husband asserts that the corporate entity has a value of $3,000,000. He says that this figure is an “estimate”.[75] He gave that estimate despite his acknowledgment that the premises from which the service business operated had been terminated.[76] The husband sought to justify his estimate of $3,000,000 on the following basis:
The premises has the capacity to cater for up to 60 [clients]. It is my best estimate that this entity is worth approximately $3,000,000 (on the basis of $50,000 per [client], which I understand to be the current market rate.[77]
[75] Husband’s affidavit filed 25 September 2024, paragraph 39.
[76] Husband’s affidavit filed 25 September 2024, paragraph 42.
[77] Husband’s affidavit filed 25 September 2024, paragraph 39.
The Single Expert in his oral evidence that a hypothetical purchaser would not enter a transaction on a “per place basis” particularly in relation to a service centre, which is generating a loss. He also described such a methodology as simplistic because it fails to take into account the cost structure of a particular business.[78]
[78] Oral Evidence of the Single Expert – 3 October 2024.
The Single Expert’s report dated 20 July 2022 assessed the fair market value of the entity at $2,467,810.[79] On 30 September 2024, the Single Expert produced an updated report. By that document, the Single Expert identified that the entity did not have any value.[80] The Single Expert did not alter his evidence under cross-examination by the Husband’s counsel.
[79] Exhibit H22, page 7 of 24.
[80] Exhibit H23, page 7 of 26.
By her Case Outline Document, the wife said as follows:
While there appears to be a substantial dispute on the balance sheet concerning the value of [L Pty Ltd], an updated single expert report has been furnished to the parties that indicates the value for that entity is Nil. It is not anticipated that the dispute on [L Pty Ltd’s] value will be maintained.[81]
[81] Wife’s Outline of Case Document, page 18 of 31.
The dispute was maintained. Indeed, the following occurred:
(a)By his Outline of Case Document, the husband confirmed that the value of the wife’s interest in L Pty Ltd would be in issue;
(b)The husband insisted that the Single Expert be called to give evidence;
(c)The husband maintained his position on production of the Joint Balance Sheet; and
(d)The husband’s counsel during his closing submissions said as follows:
Whilst I don’t have instructions to concede the value, the evidence of the expert despite cross-examination remained unwaivered [sic]. It is open [to the Court] to make a finding that the value of the interest is zero.
In Phillips & Phillips (2002) FLC 93-104, the Full Court at [45] and [46] said as follows in relation to “appropriate principles” and the resolution of disputes in relation to valuations:
[45]As to ‘appropriate principles’ there is no fixed rule as to the proper method of valuation and the preferred methodology depends upon the facts of the case: Mallet v Mallet (1984) FLC 91-507 at p.79,121 per Mason J and Georgeson and Georgeson (1995) FLC 92-618 ay p.82,218. However, the Court cannot adopt a valuation methodology that is fundamentally flawed and not applicable to the facts of the case: Elsey v Elsey (1997) FLC 92-727.
[46]If there is a dispute as to the value of an asset and the Court prefers one expert to another, then reasons for the preference should be stated: Gamer and Gamer (1988) FLC 91-932 at p.76,747 – 76,747. Where there is a discrepancy between two or more values it is not open to the Court merely to adopt a mean or average figure between the rival opinions: Lenhan and Lenhan (supra) at 76,142. However, this does not mean that, when faced with two competing valuations, the Court is bound to accept one or the other. The Court is able to form its own separate view as to the value by the property application of established principles of valuation. In Borriello and Borriello (1989) FLC 92-049 the Full Court referring to the decision of the High Court in The Commonwealth v Milledge (supra), said at p.77,558:
“It is, we think, apparent that the High Court was not laying down a principle that the trial Judge was obliged to accept any particular valuer, but rather that it was necessary for him to satisfy himself by means of the application of property principles, that he had arrived at the value of the property on the relevant date. If that value happens to be different to the values ascribed to the relevant property by the valuers called in evidence, this in itself does not affect the validity of the judge’s finding, provided that he has applied proper principles.
In the case at bar, the husband did not seek to rely on any adversarial evidence. Further, he did not seek to persuade me that the methodology adopted by the Single Expert was flawed and/or not applicable to the facts of this case. As discussed, the foundation for the Husband’s estimate as to the value of L Pty Ltd was rejected by the Single Expert under cross-examination.
There is no information before me, which would enable me to make a finding that the value of L Pty Ltd is in the order of $3,000,000 as so asserted by the husband. As referred to in Phillips it is not open to me to simply ascribe a value to the property absent any evidence to enable me to do so.
Accordingly, I will include the value of L Pty Ltd in the Joint Balance Sheet at a nil value.
Whether a Director’s Loan to N Pty Ltd in a sum of $436,818 ought to be brought to account as a liability of the parties as asserted by the Husband
At [46(i)] of his Affidavit filed on 25 September 2024, the husband says that subsequent to the parties’ separation, the wife incurred a liability in the form of a loan from N Pty Ltd in a sum of $625,191. The figure was later revised by the husband, and he agreed with the wife’s assertion that she owes N Pty Ltd a sum of $436,818.[82] The loans were taken during the period 30 June 2021 to 30 June 2024.[83] The husband says that the wife used the funds for her own personal use and not for the benefit of the businesses operated by the parties.[84]
[82] Joint Balance Sheet – Exhibit W13.
[83] Exhibit H21; Wife’s affidavit filed on 25 September 2024, paragraph [127(a)].
[84] Husband’s affidavit filed 25 September 2024, paragraph 47.
The husband also conceded that Division 7A Loans were executed by N Pty Ltd in its role as Lender and the wife as the borrower.[85] The wife signed that Loan Agreement on behalf as N Pty Ltd in her capacity as Director and Secretary of that entity.[86] The husband did not argue that the loan was not a proper loan for the purposes of Division 7A of the Income Tax Assessment Act.
[85] Husband’s affidavit filed 25 September 2024, paragraph 47.
[86] Husband’s affidavit filed 25 September 2024, paragraph 47.
Notwithstanding the slightly dated nature of the Single Expert’s report, the parties agreed by way of the Joint Balance Sheet that N Pty Ltd has no value. The Single Expert Report identified that as at 30 June 2021, the entity had net adjusted assets of -$223,086. The deficit was caused by taxation liabilities and unpaid employee entitlements in the combined order of -$340,917. As at 30 June 2021, N Pty Ltd was owed $119,378 by way of a Director’s Loan.[87] The sum then increased to $436,818 by the conclusion of the 2024 financial year.[88] By way of a written communication received from each of the party’s counsel subsequent to the Trial, I was urged to adopt a sum of $436,818 as the agreed value of the debt.
[87] Exhibit H18, page 12.
[88] Exhibit H21.
The Balance Sheet for N Pty Ltd identifies that although the entity had assets of $104,428, it had debts summarised as follows:
(a)Trade Creditors in a sum of $90,319;
(b)Credit Cards in a sum of $92,390;
(c)Goods and Services Tax Liabilities in a sum of $140,693; and
(d)Payroll liabilities in the form of employee superannuation entitlements and payroll tax.
During closing submissions made by the husband’s counsel, there was the following exchange between Bench and Bar:
Husband’s counsel: …there’s two companies that have zero value, or even as [the wife’s counsel] put it, it’s in the negative; but for all intents and purposes, shares can’t have a negative value, so it has to be on the balance sheet, the shares are worth nil…
Court:I think [the argument of the wife’s counsel] goes further than that though.
Husband’s counsel: …we have to…as a matter of logic, we have to accept that there have been direct financial contributions from the borrowings of the companies, which the wife has used to pay for the various expenses of the household and the family meeting the costs of the loan repayments. They are borrowings.
The acknowledgment that the wife borrowed monies from N Pty Ltd is appropriate. Such an acknowledgment also recognised the evidence – namely, that the wife’s borrowings were “consistent with the way in which the parties carried on their business in terms of various Division 7A Loans that they just rolled over from one year to the next and cumulative”.[89]
[89] Oral Submissions of the Wife’s counsel – 3 October 2024.
Given the existence of these liabilities, I am compelled to include the Director’s Loans totalling $436,617 as a liability on the Joint Balance Sheet. This is because if a liquidator is appointed to wind up N Pty Ltd it is more likely than not that the liquidator would pursue the wife in an effort to claw back the monies loaned. The Single Expert’s oral evidence (as I will discuss below) is that absent a capital injection from a third party, the operations of N Pty Ltd will “get to a point where it shuts down”. If this occurs, the wife will need to repay the debt pursuant to the terms of Division 7A of the Income Tax Assessment Act. Accordingly, I will include the debt in the Joint Balance Sheet as a liability to be retained by the wife.
Whether there ought to be an ‘add back’ in a sum of $790,000 being monies disbursed by the Wife on the sale of a property at Suburb AA.
The husband by his Case Outline contends that the disbursements made by the wife from the proceeds of the sale of a property at Suburb AA in a sum of $790,274 ought to be characterised as an ‘addback’.[90] The property was sold in early 2023.[91]
[90] Husband’s Outline of Case Document, page 11 of 17.
[91] Husband’s affidavit filed 25 September 2024, paragraph 51.
The topic of addressed by the husband’s Affidavit filed on 25 September 2024, wherein he says that a sum of $790,274.09 from the sale of a property at Suburb AA was disbursed as follows:
(a)Payout to EE Finance in a sum of $48,294.40 relating to finance for Motor Vehicle 2 owned by L Pty Ltd;
(b)Payout to Revenue New Wales in a sum of $96,461 on behalf of L Pty Ltd;
(c)Payout to FF Company in a sum of $127,512.01 in respect of finance on a Motor Vehicle 3 owned by N Pty Ltd;
(d)Payout to the Australian Taxation Office in a sum of $255,539 relating to a tax debt owed by N Pty Ltd;
(e)Payout to the Australian Taxation Office in a sum of $134,405 relating to a tax debt owed by L Pty Ltd;
(f)Payout to Revenue New South Wales in a sum of $55,523 relating to overdue payroll tax owed by N Pty Ltd; and
(g)Professional Fees owed to GG Lawyers in a sum of $23,000.[92]
[92] Husband’s affidavit filed 25 September 2024, paragraph 51.
The wife responds as follows:
(a)Motor Vehicle 2 was purchased for the benefit of staff members employed by L Pty Ltd.[93] I find that there is merit to the wife’s assertion in circumstances where Motor Vehicle 2 is referred to as an asset of the L Trust as at 30 June 2024;[94]
[93] Wife’s affidavit filed 25 September 2024, paragraph 103.
[94] Exhibit H23, page 18 of 26.
(b)The disbursal of a sum of $96,461 to Revenue New South Wales on behalf of L Pty Ltd was a business expense.[95] It was put to the wife that profits made by L Pty Ltd in the 2021 and 2022 financial years could have been utilised to pay the debt owing to Revenue New South Wales. That submission, however, overlooks that but for the receipt of funds on the sale of the Suburb AA property, L Pty Ltd would have incurred a loss in the 2023 financial year calculated as follows:
[95] Wife’s affidavit filed 25 September 2024, paragraph 128(b).
L Trust
Income / Expenses
Income
3,639,899
Less Gain on Sale of Properties
-2,150,860
Sub-Total:
1,489,039
Less Expenses
1,496,146
Total:
-7,107[96]
[96] Exhibit H12, pages 4 to 6 of 34.
By the year ended 30 June 2024, L Pty Ltd had made a loss of -$343,000;[97]
(c)The payout to FF Company related to a motor vehicle owned by N Pty Ltd. The wife says that in respect of a sum of $61,000, she used the monies for business expenses and school fees;[98]
(d)It was appropriate for her to pay taxation debts owed by N Pty Ltd and L Pty Ltd to the Australian Taxation Office. She further says that it was appropriate to pay a debt owed by N Pty Ltd in respect of payroll tax to Revenue New South Wales. The oral submissions made by the husband’s counsel recognised that the Australian Taxation Office and Revenue New South Wales are “justified creditors”. However, the husband says that these debts could have been met from the operations of N Pty Ltd. This argument overlooks that by the conclusion of the 2021 financial year, N Pty Ltd had net assets in the order of -$226,998.[99] The performance of the business according to the Single Expert had also been badly affected by the effects of the Covid-19 pandemic;
(e)The wife says that Professional Fees owed to GG Lawyers related to litigation engaged in by the parties with respect to the Suburb D property.[100] Particularly, the parties became embroiled in a dispute with a local council, which litigation carried on for about four years.[101]
[97] Exhibit H12, page 6 of 34.
[98] Wife’s affidavit filed 25 September 2024, paragraph 128(c).
[99] Exhibit H24, page 18.
[100] Wife’s affidavit filed 25 September 2024, paragraph 128(g).
[101] Wife’s affidavit filed 25 September 2024, paragraph 73.
I similarly reject any assertion that the wife ought not have paid monies for a pool constructed at the Suburb D property. Evidence was led as to the cost of the installation of the pool. The wife paid the invoiced fee.[102] The husband conceded under cross-examination that the wife paid what he described as a “legitimate invoice” from a third-party supplier and accepted that the installation of a pool “would make the [Suburb D] property more attractive” to a third party purchaser. For the same reasons, I reject any suggestion that amounts expended by the wife on medical expenses ought to be “added back” to the list of assets. Such an assertion offensive and contrary to established authority.[103]
[102] Exhibit W6.
[103] Keighly & Keighly (No 2) [2023] FedCFamC1F 42 at [51]; Trevi & Trevi (2018) FLC 93-858 at [206] and [208].
In Stanford (supra), the High Court indicated that in determining whether it is just and equitable to make any particular property order, it is necessary to identify the existing legal and equitable interests of the parties in the property. The High Court itself emphasised the word existing. This being so, add backs only exist in a notional sense.
The Full Court has identified three areas where it is appropriate to notionally “add back”, into a pool of matrimonial property, assets, which do not exist or cannot be proved to be still existing. The circumstances are as follows:
(a)Where matrimonial assets have been utilised to pay the parties’ legal fees, thus diminishing the pool of assets available to be distributed between them and so creating a situation where the normal rule whereby each party should bear his or her own costs is defeated;[104]
(b)Where there has been a premature distribution of matrimonial assets;[105]
(c)Where one of the parties has embarked on a course of conduct, either recklessly or with the direct intent to reduce or minimise the effective value of some item of matrimonial property.[106]
[104] See DJM v JLM (1998) FLC 92-186.
[105] See Townsend and Townsend (1994) FLC 92-569.
[106] See Kowaliw and Kowaliw (1981) FLC 91-092.
The wife gives clear evidence that the payment of all money was for legitimate purposes.[107] The husband himself by his counsel’s closing submissions conceded that the amounts referred to above had to be paid.
[107] Wife’s affidavit filed 25 September 2024, paragraphs 117 – 128.
The husband’s submission, however, was expressed by his counsel to be nuanced in the sense that the parties’ businesses had previously been “profitable enterprises”[108] but that because of the manner in which the wife operated the businesses and/or disbursed funds from the businesses, that it would not otherwise have been necessary to utilise the proceeds of sale of the Suburb AA property. I reject that argument. Firstly, the argument releases the husband from any financial responsibility for the businesses when he had no involvement with them whatsoever subsequent to the parties’ physical separation in April 2020. Secondly, it ignores that even in the 2024 financial year, L Pty Ltd made a loss slightly in excess of -$343,000.[109] Thirdly, the husband’s submission ignores the Full Court’s approval of the proposition that “spouses should generally take the good with the bad”.[110]
[108] Closing Oral Submissions of the Husband’s counsel – 3 October 2024.
[109] Exhibit H12, page 6 of 34.
[110] Trustee of the property of G Lemnos v Lemnos and Another (2009) 41 Fam LR 120.
Simply, I am not satisfied that given the headwinds faced by her, the wife has done anything other than operate the parties’ businesses to the best of her ability and in accordance with a practice adopted by the parties prior to separation with respect to inter entity loans.
ASSESSMENT OF CONTRIBUTIONS
The various and different contributions of the parties must be assessed against the background of a relationship of 22 years’ duration (1997 to 1 August 2019). I recognise, however, that the parties did not live together during the period prior to their marriage in 1999 and the parties otherwise remained living under the same roof during the period 1 August 2019 to 1 April 2020.[111] The parties’ contributions must also be assessed against the background of a relationship, which produced four children. One child is still under the age of majority, aged 13 years.
[111] Wife’s affidavit filed 25 September 2024, paragraph 11.
The wife submits that initial contributions slightly favour her, but she also accepts that neither party made significant contributions in the context of the Joint Balance Sheet identified above.[112] The wife says that at the time of cohabitation in 1999, she had to her benefit savings of about $50,000, nominal superannuation and a family car that she shared with her parents and sister. She also says that she had a 25 per cent interest in a hospitality business.[113] She received a sum of $25,000 on the sale of her interest in that shop during the relationship.[114] For his part, the Husband says that shortly prior to meeting the wife, he held a sum of $18,000 in savings and applied those monies towards the purchase of a retail business in Suburb Q, Sydney.[115] The husband did not produce any evidence as to the value of the retail business at the time of cohabitation.
[112] Wife’s Outline of Case, page 22 of 31.
[113] Wife’s affidavit filed 25 September 2024, paragraph 20.
[114] Wife’s affidavit filed 25 September 2024, paragraph 24.
[115] Husband’s affidavit filed 25 September 2024, paragraph 10.
In Pierce v Pierce (1999) FLC 92-844 after a consideration of the decisions in Way & Way (1996) FLC 92-702, Lee Steere & Lee Steere (1985) FLC 91-626, Money & Money (1994) FLC 92-485 and White & White (1982) FLC 91-246, the Full Court summarised the treatment of an initial superior financial contribution made by one of the parties in the following statement:
28.In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weight the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution. In the present case that use was a substantial contribution to the purchase price of the matrimonial home: …
(citations omitted)
I accept that the wife’s initial contributions do on their face outweigh the initial contributions of the husband. However, the wife also accepts that about four years after the parties’ marriage, the husband sold his retail business for a sum of $92,000.[116] On balance, I do not consider that any adjustment is warranted in the wife’s favour on account of her initial contributions. I make this finding for three reasons. Firstly, even if the wife’s initial contribution was greater than the contribution of the husband, it was by its quantum nominal. Secondly, the wife gives no evidence about the manner in which she expended her savings (although I summarise above the manner in which the wife says she expended the monies received from the hospitality business). Thirdly, given the nominal quantum of the initial contributions, I place no weight on them given the effluxion of 22 years.
[116] Husband’s affidavit filed 25 September 2024, paragraph 12.
With respect to contributions during the relationship, the wife says that financial and non-financial contributions favour her for the following reasons:
(a)The wife’s initial contributions acted as a springboard to the parties’ wealth;
(b)The wife asserts that she was the children’s primary carer whilst she maintained full-time work at the parties’ service business;
(c)The wife asserts that she returned to work in the service business shortly after the birth of each child making her contributions more arduous; and
(d)The wife’s family significantly assisted with the purchase of the first two service centres operated by the parties.[117]
[117] Wife’s Outline of Case Document, pages 23 – 24 of 31.
I find that there is no merit to the first assertion given my findings above about the nominal quantum of the parties’ initial contributions. Further, and whilst the wife asserts that her wealth provided the parties with a springboard, there is no evidence whatsoever about the use made by the parties of the contribution. I infer that the wife’s monies were applied to joint savings, which enabled the parties to purchase a commercial property at Suburb S in 2002 as joint tenants. The wife says that in order to purchase the property, the parties “applied a deposit in the sum of $53,000 from our joint savings together with the sum of $25,000 which my parents gifted me”.[118] In the meantime, however, the husband was operating his retail business. Whilst the wife says that she did not “recall… [the husband] depositing income from the [retail business] into… [the parties’] joint account”,[119] there was no evidence before me to suggest that the husband did not contribute any monies earned by him to the parties’ day to day expenses. Cross-examination of the husband by the wife’s counsel does not permit me to make any factual finding to the contrary. I also note that the parties travelled to Country HH and Country Z in 2000 to research the identity of suppliers for the import business to be operated by K Pty Ltd.[120] I infer that such a journey would have cost the parties significant monies.
[118] Wife’s affidavit filed 25 September 2024, paragraph 32.
[119] Wife’s affidavit filed 25 September 2024, paragraph 25.
[120] Wife’s affidavit filed 25 September 2024, paragraph 30.
With respect to the second assertion, the wife disputes the husband’s assertion by his written evidence that he was an active parent and assisted with household duties.[121] The husband says as follows:
Throughout the course of the marriage, I was an active parent and assisted [the wife] and the children with tasks around the household such as vacuuming, mopping and washing on occasion when the cleaners employed by [the wife] and I could not do so. I would cook for the family whilst [the wife] was still at work. I would drop the children off to and collect them from school. I was a very active parent and would take the children to and collect them from birthday parties. I would organise the parties for the children held at home and at external venues. I actively continued in these roles until I vacated the former matrimonial home.[122]
[121] Husband’s Affidavit filed 25 September 2024, paragraph 26.
[122] Husband’s affidavit filed 25 September 2024, paragraph 27.
The wife concedes that when the three elder children were in high school, the husband would drop them off to school, but she denies that the husband was involved in the children’s extracurricular activities and/or that he was involved with the children to the extent alleged. Save and except for dropping the elder children at school and coaching a sports team when two of the children were aged approximately five years, the wife says as follows:
Other than this, our children remained with me, in my care, and would essentially come with me as I travelled to various [service] centres each day. The children would then [spend] the day in that facility, so they were able to be on site with me and we remained compliant with the various regulations.[123]
[123] Wife’s affidavit filed 25 September 2024, paragraph 80.
With respect to the establishment of the service centres, the husband gave the following oral evidence:
Wife’s counsel: As at 2004, your only work experience was importing and exporting goods, […], you worked at [JJ Company] as a process worker and as a quality control officer, and sold [goods] in [Country P].
Husband:Correct.
Wife’s counsel: You never worked in [the service industry]?
Husband:No.
Wife’s counsel: You had no experiencing running [service] centres?
Husband:No.
In distinction to the husband, the wife’s counsel argued in submission and by way of questions directed to the husband, that because of her role as a public servant, the wife learned that service centres could be profitable and learned about the operation of service centres generally. In essence, the wife’s counsel argued that it was the wife’s idea to explore the opening of a service business and that this being so, a monetary adjustment ought to be made in favour of the wife. I reject that proposition. Whilst the evidence might support a proposition that it was the wife’s idea to invest in service centres, the evidence supports a finding that each party was involved in the business. The husband was cross-examined extensively in relation to this topic, and he also provided written evidence.
The husband says that he did the day-to-day work and management of L Pty Ltd and about half of the same tasks for N Pty Ltd. With respect to his role at L Pty Ltd, the husband says as follows:
In my role at [L Pty Ltd], I was directly responsible for the coordination of staff, services offered by the company to clients, fit out of premises, sourcing of food for the meals provided to the [clients] who attended the centres operated and coordinating vehicles for the transport of the [clients] to and from the venue. In my role at [N Pty Ltd], I was primarily responsible with liaising with government agencies for the funding received by the business to conduct its operations.[124]
[124] Husband’s affidavit filed 25 September 2024, paragraph 31.
The wife disputes that the husband ever engaged with government agencies (such as the National Disability Insurance Scheme) on behalf of N Pty Ltd and in fact says that insofar as N Pty Ltd is concerned, the husband was never listed as a contact person.[125] I find, however, that this denial is irrelevant because the husband also gave evidence that:
(a)In 2009, his focus changed from the operations of K Pty Ltd to the service business.[126] The wife suggests that the husband continued the operations of K Pty Ltd for a longer period but for the reasons discussed below,[127] I do not consider this to be relevant to the determination to be made by me. The husband in his oral evidence said that he devoted twenty percent of his time to the K Pty Ltd and eighty percent of his time to the service business. The evidence does not permit me to make any factual finding about the accuracy or otherwise of this assertion save that I accept that each party was working to the best of his/her ability;
(b)He was responsible for the fit out associated with each of the service business premises. The wife concedes that fit outs were required and concedes that the husband would “project manage the trade fit outs, for example supervising painters when we established a new premises, or helping us fit out the various locations”;[128]
(c)He was responsible for ensuring that motor vehicles operated by the centre were roadworthy. The wife conceded that the husband did so;
(d)He sourced food for the service centres. The wife concedes that the husband would arrange for food deliveries to each of the service centres.[129] Under cross-examination, the wife’s counsel sought to devalue the role played by the husband. However, the husband said that he had to talk to suppliers and negotiate discounts not only with suppliers but with clients of the service business. Accordingly, I find that his commitments each day on account of this task would have been significant;
(e)The Wife conceded in her oral evidence that the husband coordinated staff for the operations of N Pty Ltd. With respect to the operations of L Pty Ltd, the wife conceded under cross-examination that the husband made sure that staff were cared for and that the clients at the centres were kept safe. She also conceded that as a consequence of her hard work and the work performed by the Husband, L Pty Ltd was a well-run business. In turn, this ensured that clients engaged in services; and
(f)He was effectively the Chief Financial Officer for L Pty Ltd.
[125] Wife’s affidavit filed 25 September 2024, paragraph 52.
[126] Husband’s affidavit filed 25 September 2024, paragraph 16.
[127] Wife’s affidavit filed 25 September 2024, paragraph 66.
[128] Wife’s affidavit filed 25 September 2024, paragraphs 64 – 65.
[129] Wife’s affidavit filed 25 September 2024, paragraph 65.
The husband’s contributions must also be seen through the following prism:
(a)At the time that the parties established their first service centre at Suburb R in early 2004, the parties also purchased their first home together at Suburb KK. The wife says that the property was substantially renovated and says that the husband travelled to Country Z in order to source raw materials and fixtures required for the renovation;[130]
(b)The wife concedes that the husband was “incredibly savvy with sourcing material and fixtures” for the construction of a service centre at the Suburb Y property;[131]
(c)The husband as an Owner/Builder rebuilt the Suburb D property in about 2016. The Husband says that he would attend at the site on six days per week during the build and managed tradesmen and coordinated the provision of materials. Once again, the husband also travelled to Country Z to source supplies for the build.[132]
[130] Wife’s affidavit filed 25 September 2024, paragraph 47.
[131] Wife’s affidavit filed 25 September 2024, paragraph 60.
[132] Husband’s affidavit filed 25 September 2024, paragraph 26.
On balance and having regard to the summaries referred to above, I find that I would globally assess the parties’ respective contributions pursuant to s 79(b) and (c) of the Act as being equal overall. Each party during the course of his/her oral evidence and written evidence pointed to their own contributions whilst at the same time, overlooking and downplaying those of other. However, in the words of Justice Strum, I find that the parties’ respective contributions “were part of the warp and weft of their union”.[133]
[133] Wallace & Wallace [2022] FedCFamC1F 536 at [73].
I am obliged because of submissions of the wife’s counsel, to consider whether an adjustment ought to be made in favour of the wife because of the assistance the wife’s family provided with respect to the purchase of the first two service centres operated by the parties. This is relevant to my assessment of the financial contribution made directly or indirectly by the wife pursuant to s 79(4)(a) of the Act.
The submissions of the wife’s counsel were directed to two particular contributions made on behalf of the wife:
(a)First, the parties agreed that the loan, which the parties obtained for the construction of their first service centre in 2004, was guaranteed by the wife’s parents; and
(b)Second, the parties agreed that in 2008, and facing financial ruin, they together with the wife’s brother purchased a property at Suburb Y. Again, the loan, which the parties obtained to finance the purchase of their interest in the property was guaranteed by the wife’s brother and the wife’s parents.
In my view, the provision of the first guarantee in about 2004, does not warrant an adjustment in favour of the wife. Any finding to the contrary would overlook the contribution made by the husband’s side of the family but particularly, the husband’s nephew who in about 2004 had purchased a property at Suburb R “with the intention of leasing it to a third party to operate a [service] business”.[134] Whilst the parties did pay what the wife describes as “arm’s length rent” to the husband’s nephew,[135] the parties were the beneficiaries of the nephew’s financial fortune in that he already held a site, which was available to the parties so that they might pursue their commercial interests. Further, there was no evidence that the guarantee provided by the wife’s parents was called upon by the parties’ financier. Even if this analysis is erroneous, the contribution by the wife’s family in the form of a financial guarantee came to nought in circumstances where by 2008, the parties agree that they were facing financial ruin.
[134] Wife’s affidavit filed 25 September 2024, paragraph 39.
[135] Wife’s affidavit filed 25 September 2024, paragraph 45.
With respect to the transactions in 2008, the parties agree that the Suburb Y property was purchased by a corporate entity controlled by them and a corporate entity controlled by the wife’s brother. I accept that absent the assistance of the wife’s brother to purchase the Suburb Y property and absent the financial guarantee provided by the wife’s parents,[136] the parties would not have gone on establish what was a successful service business. Indeed, it was the husband’s evidence that absent the purchase of the Suburb Y property, the parties had considered returning to Country P. The establishment of a service centre at Suburb Y appears to have been the catalyst for the parties’ financial success. It became operational in 2009 and thereafter, the parties established eleven service centres. I accordingly find that the assistance provided to the parties by members of the maternal family warrants some adjustment in favour of the wife.
[136] Wife’s affidavit filed 25 September 2024, paragraph 58.
As discussed above, the wife’s counsel also invites me to make an adjustment in the wife’s favour on account of the fact that the wife “was able to maintain employment in the various [service] centres at the same time as caring for the children when they were of a young age”.[137] He highlights that childcare costs are substantial and that “the ability to earn an income on a fulltime basis while not having to pay childcare fees is a significant saving which enabled the parties to amass wealth at a time when their contemporaries would have struggled with the additional expense”.[138] This might be so, but the parties’ good fortune of not being required to enrol their children in a childcare facility must be seen in the context of a union of both lives and business interests. Similarly, I find that the wife’s ability to return to work shortly after the birth of each child must be seen through a prism of the parties’ ownership of a service business. Absent that ownership, I expect that the wife may have been required to take extended periods of maternity leave.
[137] Wife’s Outline of Case Document, page 24 of 31.
[138] Wife’s Outline of Case Document, page 24 of 31.
In every sense, the parties in these proceedings created a personal and commercial union. It was a partnership. As highlighted by Justice Strum in Wallace & Wallace [2022] FedCFamC1F 536, there has been some judicial debate, over the years, as to the concept and role of "partnership" within the assessment of contributions for the purposes of s 79(4)(a) - (c) of the Act.[139]
[139] Wallace & Wallace [2022] FedCFamC1F 536 at [74].
In Waters & Jurek (1995) FLC 92-635 (Full Court) at 82,379, Fogarty J said:
In most marriages, there is a division of roles, duties and responsibilities between the parties. As part of their union, the parties choose to live in a way which will advance their interests - as individuals and as a partnership.
…
On separation, the partnership, and the division of roles and responsibilities which it produced, come to an end.
Similarly, in Kennon v Kennon (1997) FLC 92-757 (Full Court) at 84,300, Fogarty and Lindenmayer JJ said:
The reality is that the parties lived their married life together, they brought to that marriage qualities which each saw as attractive. Within the s 79 context each party contributed as best they could the qualities which each brought to the marriage. In the husband's case it included the quality of being very wealthy. In the wife's case the qualities were less tangible.
For the reasons set out above, I find that each party contributed as best they could to the marriage and to the acquisition of their joint wealth. I decline to make any adjustment in favour of the wife on the basis that by good fortune, the parties were not financially burdened by childcare fees. I also decline to make any adjustment in favour of the wife on the basis that by reason of the parties’ ownership of the service business, the wife was not obliged to take extended periods of maternity leave.
The wife’s counsel also invited me to award the wife recognition for what he says was effectively a special skill in operating service centres. I find myself unable to do so. As the Full Court said Figgins and Figgins (2002) FLC 93-122 at [57]:[140]
[57]We are troubled that in the absence of specific legislative direction, courts consider they should make subjective assessments of whether the quality of a party's contributions was "outstanding". It is almost impossible to determine questions such as: Was he a good businessman/artist/surgeon or just lucky? Was she a good cook/housekeeper/entertainer or just an attractive personality? We think it invidious for a judge to in effect give “marks” to a wife or husband during a marriage. We think that this doctrine of “special contribution” should, in an appropriate case, be reconsidered. We think that the decision of the House of Lords in White v White [2001] 1 All ER 1 gives force to these concerns.
[140] Figgins and Figgins (2002) FLC 93-122 at [57].
As discussed above, and at various times, the husband continued to operate his own exporting/importing business whilst also contributing to the service business. The wife may have had the idea of creating a service business. However, I have found for the reasons set out above that each party in his/her own way contributed to their financial success. Any argument by the wife to the contrary is in some measure defeated by the written submissions made by the wife’s counsel to the effect that “the husband was a savvy businessman and contributed to the success of their various businesses during the course of the relationship”.[141]
[141] Wife’s Outline of Case Document, page 29 of 31.
Save for the assistance provided by the wife’s parents and the wife’s brother in 2004 and 2008, I consider that there would be little to differentiate the parties’ respective contributions, viewed globally, within the prism of their partnership, and the weight to be accorded to them.
The period, since the parties separated, has been one of financial vicissitude for each of them. For his part, the husband has been unemployed and lives at his uncle’s residence.[142] He conceded in his oral evidence that he has been making efforts to sell the remaining stock of K Pty Ltd “at markets on weekends” and by selling direct to businesses. In total, the husband’s oral evidence was that he had earned about $6,000 in the eight months prior to Trial.
[142] Husband’s affidavit filed 25 September 2024, paragraph 65.
For her part:
(a)The wife has been making efforts to address a financial catastrophe around her. The Single Expert confirmed in his oral evidence that the service business was negatively impacted by the Covid-19 pandemic and associated work from home and other restrictions. He also gave evidence that even if the lease over the Suburb AA property was renewed for a period of five years, he would still not ascribe a value to the L Pty Ltd business. Particularly, the Single Expert expressed an opinion that he expects the business to continue recording losses and that this being so, the business will require external funding or support to fund its capital requirements;
(b)The wife has paid college fees of $16,500 for the eldest child and living expenses for the twin children who continue to reside with the wife whilst studying at university. The wife has also been solely responsible for meeting the youngest child’s school fees in a sum of $30,000 per year.[143] The wife has done so in circumstances where from the time of separation under the same roof, the husband conceded that he made no contribution to the care of the children and made no contribution to them financially. From April 2020 to date, the husband has paid no child support whatsoever.[144]
[143] Wife’s affidavit filed 25 September 2024, paragraph 136.
[144] Wife’s affidavit filed 25 September 2024, paragraph 95.
As the Full Court in Roverati and Roverati [2021] FamCAFC 89 at [33] restated (citing Dickons & Dickons (2012) 50 FamLR 244 at [23] - [26]:
[33]…the assessment of contributions is not a mathematical or accounting exercise, and even more importantly, it is an holistic undertaking with all of the contributions of the parties of whatsoever nature being taken into account.
Bearing in mind all these circumstances, including the recognition to be given to the contributions made by the wife’s family in 2004 and 2008, I assess the wife’s overall contributions as being superior in a range of around 5 percent, leading to the parties’ various contributions, in percentage terms, being assessed 55:45 in the wife’s favour.
SECTION 75(2) – THE PROSPECTIVE NEEDS OF THE PARTIES
The wife seeks a slight adjustment in her favour pursuant to s 79(4)(e) of the Act, on account of s 75(2) factors. Particularly, the wife seeks an adjustment of 2.5 per cent or, in the alternative, that there be no adjustment.[145]
[145] Wife’s Outline of Case Document, page 29 of 31.
The wife invites me to find that the husband’s assertion that he has no earning capacity is “self-serving and does not accord with some 25 years of successfully running various business”.[146] I agree. He is only 52 years of age. He does not assert that he has any health condition, which prevents him from working. His attempts at obtaining employment also appear to have been lacklustre. For example, the husband said in his oral evidence that after separation, he attended at a supermarket at Suburb AA on one occasion to enquire about employment but did not provide them with a resume. He also conceded that he had not made any application for other employment. I conclude that if the husband turns his mind to the task, he will have a prospect of obtaining employment. Particularly, and whilst I accept that the husband has no formal qualifications, he is a man who has a minimum sixteen years’ experience in running service centres, logistics related to the running of those centres and extensive retail experience. He also deposes to undertaking labouring work albeit such work was not consistent.[147] Whatever the scenario, it beggars belief that the husband has not sought with any degree of urgency to improve his economic position.
[146] Wife’s Outline of Case Document, page 29 of 31.
[147] Husband’s affidavit filed 25 September 2024, paragraph 66.
In contrast to the husband, the wife is burdened with two businesses, which have no value. As discussed above, the Single Expert expects that L Pty Ltd will continue to operate at a loss. The parties agree that N Pty Ltd has no value.
I am also cognisant that the wife is also burdened by her poor health. As discussed, the wife was diagnosed with a medical condition in 2019. The wife has had a major surgery. She says that she requires two further surgeries and is part of an ongoing clinical trial.[148] As a consequence of that trial, the wife takes at least two prescribed medications, which cost her about $100 per week. She also receives bi-annual infusions.[149] The wife’s counsel during closing submissions suggested that the wife’s out-of-pocket expenses including the cost of private health insurance will be about $12,000 per annum. I accept that the expenses referred to by the wife at paragraph 130 of her Affidavit filed 25 September 2024 permit such a conclusion. The wife was not challenged as to the accuracy of her expenses.
[148] Wife’s affidavit filed 25 September 2024, paragraph 146.
[149] Wife’s affidavit filed 25 September 2024, paragraph 129.
With respect to the children of the relationship, the husband agreed that it will cost the wife about $150,000 to ensure that the youngest child is able to complete his secondary education at a private school thereby being afforded the same education as his siblings. The husband also agreed that “ideally” it would be in the youngest child’s interests to remain at his school. As discussed, all children save for the eldest child remain living with the wife. The responsibilities, relating to children’s health, education, socialisation and general well-being have been described, in the past, as being “myriad”.[150] Given that the children live with their mother and are likely to remain doing so for the foreseeable future (in the case of the twins) or for the remainder of his childhood (in the case of the youngest child), these responsibilities will fall solely on the wife with serious implications for her from a financial perspective.
[150] Collins & Collins (1990) FLC 92-149 at 78,043.
In my assessment, the s 75(2) of the Act factors are closely balanced, given that both parties face an uncertain financial future. However, it weighs on me that the wife will bear financial responsibility for the parties’ children (or at least the three youngest children) for the foreseeable future. This task is made more arduous on account of the parlous financial circumstances of the parties’ service business and the wife’s health.
I therefore propose to allow the Wife an additional 2.5 per cent as a consequence of my assessment of the s 75(2) of the Act factors, which favour her.
THE FORM OF ORDERS
In Steinbrenner & Steinbrenner,[151] Coleman J observed as follows at [234]:
[234]Given that the evaluation of contribution-based entitlements inevitably moves from qualitative evaluation of contributions to a quantitative reflection of such evaluation, there will inevitably be a “leap” from words to figures. That is the nature of the exercise of discretion, whether it be in the assessment of contributions in the matrimonial cause, assessment of damages in a personal injuries case, or determination of compensation in a land resumption case.
[151] See Steinbrenner & Steinbrenner [2008] Fam CAFC 193.
I must now make a leap and turn top the topic of what each party will receive, particularly how and in what form. This leap from abstraction to the concrete must be undertaken in terms of what is just and equitable to each of the parties concerned.
I have come to a conclusion that it is just and equitable to divide the parties’ pool of assets, as I have calculated it, 57.5 / 42.5 percent in the wife’s favour. The major components of this assessment reflect the superior contributions made by the wife during the relationship and her ongoing financial responsibility for the parties’ children against a background of difficult health issues.
I have also attempted to remain focussed on what actual assets remain available to the parties for distribution, rather than on notional assets. In a case such as this one where the businesses suffered a significant downturn as a consequence of the Covid-19 pandemic as well as deficits because of the underlying cost structures, I find that this is likely to be the fairest approach. The only exception will be a sum of $200,000, which the husband received by way of an interim property settlement pursuant to the terms of consent orders made on 16 May 2023.
Retention of property by the Husband
Having regard to the parties’ existing property interests and the interests to be retained by the husband by agreement, the husband will retain non-superannuation assets with a net value of $320,225 calculated as follows:
Description
Value
Westpac Bank Account (ending …22) (as at 26 September 2024)
30,220
Plus CC Bank Account (ending …79)
5
Plus Goods stored in warehouse
40,000
Plus Motor Vehicle 1
50,000
Sub-Total:
120,225
Plus Interim Partial Property release pursuant to Orders made on 16 May 2023
200,000
Sub-Total:
320,225
In addition, the husband will retain his interest in his self-managed superannuation fund, which has a value of $561,793.
Retention of property by the Wife
Having regard to the parties’ existing property interests and the interests to be retained by the wife by agreement, the wife will retain non-superannuation assets with a negative value calculated as follows:
Description
Value
National Australia Bank Account (ending …32)
2,754
Plus National Australia Bank Account (ending …80)
2,091
Plus Estimated Tax Refund
114,129
Sub-Total:
118,974
Less Director’s Loan to N Pty Ltd
-436,818
Total:
-317,844
The wife will retain her interest in her self-managed superannuation fund, which has a value of $511,430.
Joint Assets and Liabilities
The husband proposes that the parties do acts and things necessary to pay the funds standing to the credit of all bank accounts held in their joint names to each party in equal shares and thereafter, to close the joint bank accounts. The wife seeks an order in similar terms.
With respect to the Suburb D property, the wife seeks a cascading order such that if the Suburb D property does not sell at auction, then the property be re-listed for sale by private treaty or public auction every two months on the basis that the sale or reserve price shall be reduced by five percent at each auction until the property is sold. The husband seeks an order that the property be relisted by public auction every six weeks and that the sale or reserve price be reduced by two percent only on each occasion. The parties did not address me as to the reasons for the differences in their proposals.
I find that the parties will incur unreasonable expense if I make orders implementing the nominal reductions proposed by the husband. Accordingly, I will make orders in terms sought by the wife, and I will make orders that the property be placed on the market for auction by private treaty or public auction every two months.
CONCLUSION
I am satisfied that overall, this is a just and equitable outcome of these proceedings. For the reasons referred to above, the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding one hundred and forty-two (142) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Anderson. Associate:
Dated: 11 December 2024
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