LAKE & BRAND

FAMILY COURT OF AUSTRALIA

LAKE & BRAND

[2016] FamCA 375

FAMILY LAW – PROPERTY – FINAL ORDERS – Asset pool – dispute as to the value of the husband’s interest in his family’s entities and debts alleged by him to be owed to the family entities – where one of the family entities was previously involved in the proceedings and discontinued its application just prior to the hearing – finding that the husband and his family have engaged in a course of action to defeat the wife’s claim

FAMILY LAW – INJUNCTIONS – Application by the wife for an injunction pursuant to s 90AE to restrain a third party company of which the husband is a director from instituting proceedings to recover a debt or from attempting to prove the existence of the debt – where the debt is alleged by the husband to be owed to the company – where the evidence does not support the existence of the alleged debt – injunction made restraining the company pursuant to s 90AF

FAMILY LAW – PROPERTY – Waste – where the husband purchased a yacht just prior to separation – where the husband claimed after the commencement of proceedings that the children of the marriage have a 52 per cent share in the yacht – where the wife was not aware of husband vesting any interest in the yacht in the children and did not consent to that course of action – Kowaliw & Kowaliw (1981) FLC 91-092 considered – finding that the husband acted recklessly, negligently or wantonly dealt with matrimonial assets – waste by the husband taken into account pursuant to s 75(2)

Family Law Act 1975 (Cth)

ACN 078 272 867 Pty Limited (In liquidation) (Formerly Advance Finances Pty Limited) v Deputy Commissioner of Taxation; Binetter v Deputy Commissioner of Taxation [2011] HCA 46
Bevan & Bevan [2013] FamCAFC 116
Kowaliw & Kowaliw (1981) FLC 91-092
Stanford v Stanford (2012) 247 CLR 108

APPLICANT:

Ms Lake

RESPONDENT:

Mr Brand

FILE NUMBER:

MLC

5385

2013

DATE DELIVERED:

20 May 2016

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

Macmillan J

HEARING DATE:

26 – 29 October 2015; 27 – 29 January 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Ms Smallwood

SOLICITOR FOR THE APPLICANT:

Wightons Lawyers

THE RESPONDENT:

In person

Orders

IT IS ORDERED THAT

The husband and the wife do all acts and things and sign all documents necessary to forthwith surrender or to authorise the solicitors for the wife to surrender the Westpac Bank term deposit held in trust in the names of the parties together with any interest accumulated thereon and that such sum be forthwith paid to the wife.
On or before 4.00 pm on 27 May 2016 the husband provide to the solicitors for the wife a Withdrawal of Caveat No … lodged over the title to the property known as and situate at D Street, E Town (“E Town”) being Certificate of Title Volume … Folio ...
Upon provision of the Withdrawal of Caveat No …, the husband retain and be solely entitled to any shares, interest or entitlements he has in respect of the following companies or trusts:
a.The Mr Brand Family Trust;
b.The Brand Unit Trust;
c.Brand Manufacturing Pty Ltd (ACN …);
d.H Pty Ltd (ACN …);
e.I Pty Ltd (ACN …);
f.R Pty Ltd (ACN …); and
g.Brand Management Pty Ltd (ACN …).
The husband shall indemnify the wife and forever hold her harmless against any and all claims, actions, suits and demands of whatsoever nature and kind arising from claims made by the companies and/or Trustee of the trusts referred to in paragraph 3 hereof and shall indemnify the wife and be solely liable for all liabilities (including taxation) debts, claims and monies owing by any of the said companies or entities.
The husband be solely liable for any loan accounts or other monies owing by the parties (either individually or jointly) to any of the companies or trusts referred to in paragraph 3 hereof including but not limited to any monies owing to I Pty Ltd (ACN …) pursuant to the Loan Agreement dated 30 April 2013 and the Specific Security Deed dated 30 April 2013 and indemnify and keep the wife indemnified with respect thereto.
The wife shall execute a Deed, to be provided by the husband, in which the wife renounces, abandons and disclaims any right or entitlement held by her in the Mr Brand Family Trust including but not limited to as primary beneficiary and that Deed shall be returned to the husband duly executed by the wife contemporaneously with the provision by the husband of the Withdrawal of Caveat pursuant to paragraph 2 of these orders or within 7 days of receipt of the Deed by the wife whichever last occurs.
The wife be solely responsible for all payments due and payable in respect of Mortgage No. … to the Commonwealth Bank of Australia registered over the title to E Town and all rates, taxes and outgoings of or with respect to the said property of whatsoever nature and kind and indemnify and keep the husband indemnified with respect to all such payments.
I Pty Ltd as trustee for the I Unit Trust (formerly the second named respondent in these proceedings) be and is hereby injuncted pursuant to s 90AF(2) from instituting any proceeding to recover any debt it alleges is owed to it by the wife either severally or jointly with the husband.
I Pty Ltd as trustee for the Brand Unit Trust (formerly the second named respondent in these proceedings) be and is hereby injuncted from endeavouring to prove any debt allegedly due to it from the wife either severally or jointly with the husband in the event of receivership and/or liquidation.
Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:-
a.each party be solely entitled to the exclusion of the other to all other real and personal property (including choses-in-action and shares) registered in the name of or in the possession of such party, or to which that party is legally or beneficially entitled, as at the date of these orders (the furniture and chattels in E Town being deemed to be the property of the wife);
b.monies standing to the credit of the parties in any bank account are to become the property of the party in whose name the account is registered;
c.each party retain for their sole use and benefit any superannuation benefits accrued in their sole names;
d.insurance policies remain the sole property of the owner named therein;
e.each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders;
f.each party be solely responsible for any liability of whatsoever nature and kind in their respective names, including but not limited to any credit card liability; and
g.any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
In the event that any party refuses or neglects to sign any document necessary for the implementation of these orders within 72 hours of such document being provided to that party (“the defaulting party”) a Registrar of the Family Court of Australia is hereby appointed to sign any such document on behalf of the defaulting party pursuant to s 106A of the Family Law Act 1975 (Cth) upon the filing of an affidavit by the non-defaulting party setting out the particulars of the default.
That all questions of costs be reserved and listed for hearing together with the wife’s Application in a Case filed 16 November 2015 before Macmillan J at 10.00 am on 15 July 2016.
All extant applications be otherwise dismissed and removed from the list of cases awaiting hearing.
Pursuant to Rule 19.50 of the Family Law Rules 2004 (Cth) this matter reasonably required the attendance of counsel.

IT IS DIRECTED THAT

That all documents produced to the Court pursuant to subpoena and exhibits relied upon by the parties be returned by the subpoena clerk of the Family Court of Australia, Melbourne Registry, to the person or organisation who produced same after the expiration of thirty (30) days from the date of these orders, or otherwise upon the conclusion of any appeal.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Lake & Brand has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 5385 of 2013

Ms Lake

Applicant

And

Mr Brand

Respondent

REASONS FOR JUDGMENT

This matter has a lengthy and at times complicated history involving a number of interim hearings all in relation to what on the best case is a relatively modest pool of assets and worst case, which is the husband’s case, a pool consisting of only significant liabilities which the husband alleges he has no capacity whatsoever to meet. It is a case which turns significantly upon the determinations the Court makes as to the composition of the asset pool.
The matter has been further complicated by the involvement of a third party, I Pty Ltd (“I”), part of what is referred to as the I Group. Although I withdrew from the proceedings a matter of days before the final hearing the part it played in the proceedings to that point, the evidence upon which it sought to rely in support of its case and its connection to the husband and wife and their financial affairs have remained central to the matters I must determine.

I Group

The I Group is made up of the following entities:
·I which acts as trustee for the Brand Unit Trust (“Brand Unit Trust”), the Mr Brand Family Trust (“Mr Brand Family Trust”), the Mr P Brand Family Trust (“Mr P Family Trust”) and S Brand Family Trust (“S Family Trust”);
·Brand Manufacturing Pty Ltd (incorporated 2001); and
·H Pty Ltd (“H”) (incorporated in 1989).
The husband is one of three directors of I. His father Mr O Brand and his sister Dr M are also directors, Dr M replacing their brother Mr P on 4 December 2014. The shares in I are owned by the husband, his father Mr O and his brother Mr P. The husband is also one of three directors of H. The other directors are his father Mr O and his sister Dr M, who replaced his brother Mr P as a director on 4 December 2014.
The Mr Brand Family Trust, the Mr P Family Trust and the S Family Trust each own one third of the units in the Brand Unit Trust. H acts as a corporate beneficiary for all three unit holders. The shares in H are 100 per cent owned by the Brand Unit Trust.
The husband is the appointor/guardian of the Mr Brand Family Trust.
On 3 November 2014 I sought to be and was joined as a party to the proceedings and remained a party to the proceedings, including on 7 July 2015 filing a Further Amended Response to Initiating Application and also filing Trial Affidavits, until filing a Notice of Discontinuance on 22 October 2015.

The Evidence

The wife who is the applicant in these proceedings relied upon the following documents:
·Amended Initiating Application filed 24 March 2015;
·Trial Affidavit of the wife filed 14 August 2015;
·Financial Statement of the wife filed 13 August 2015;
·Affidavit in Reply of the wife filed 24 September 2015;
·Affidavit of Ms T filed 23 September 2015;
·Affidavit of Mr U filed 24 September 2015;
·Affidavit of Mr V filed 22 September 2015; and
·Affidavit of Mr W filed 13 August 2015.
The husband relied upon the following documents:
·Amended Response to Initiating Application filed 20 April 2015;
·Trial Affidavit of the husband filed 4 September 2015;
·Financial Statement of the husband filed 3 September 2015;
·Documents attached to his Financial Statement filed 5 September 2013;
·Affidavit of Mr X filed 3 September 2015; and
·Affidavit of Mr Y filed 12 October 2015.
As previously referred to I was joined as a party to the proceedings on 3 November 2014. Although I withdrew from the proceedings, filing a Notice of Discontinuance on 22 October 2015, it had, in anticipation of the final hearing and in accordance with the orders and directions made on 4 May 2015, filed Affidavits in support of its application. The husband sought to rely upon the Affidavit of Mr Z filed 18 June 2015 and the Affidavit of Dr M Brand filed 3 September 2015, both of which were filed on behalf of I.
The husband did not seek to rely upon the Affidavits of Mr AA filed 3 September 2015 and Ms A Brand filed 3 September 2015, which were also filed on behalf of I. I will refer in more detail to Mr AA’s affidavit later in these reasons.
During cross-examination of the wife about the date of separation the husband indicated that he wanted to call the parties’ son Mr BB who he said could give evidence in relation to a family meeting at which he said the wife had told both he and their children that the marriage was over and that she wanted to separate. The husband said the point of this evidence was to establish that the wife was not telling the truth about the date of separation.
I ruled that I would not permit the husband to adduce evidence from Mr BB in circumstances where:
(a)the husband had, until 22 October 2015, been represented by experienced family lawyers who had not only prepared his trial material but also filed a Case Outline on 22 October 2015 on his behalf in compliance with the orders made 4 May 2015;
(b)the husband had not as part of his trial material or in his Case Outline filed 22 October 2015 sought to rely upon any affidavit sworn by Mr BB; and
(c)as submitted correctly by counsel for the wife nothing particularly significant turned on the date of separation and where the purpose of Mr BB’s evidence appeared to be in relation to the wife’s credit.
The following day Mr BB accompanied the husband to Court. It was submitted by counsel for the wife that the wife found Mr BB’s presence in Court whilst she gave her evidence intimidating in circumstances where she and Mr BB had had a falling out after she obtained an Intervention Order against the husband and the police had confiscated guns belonging to both the husband and Mr BB. She and Mr BB were not on speaking terms. I directed that Mr BB leave the Court so as to facilitate the wife being able to give her evidence.
On 4 May 2015 when setting the matter down for trial I made orders granting leave to the then three parties to file and serve an affidavit and adduce the evidence of an adversarial expert witness in relation the debts alleged by the husband and I to be owed to I by the husband and the wife, the value of those alleged debts and any ancillary matters thereto. Any reports were to be exchanged by 19 June 2015, there was to be a conference of the expert witnesses by 10 July 2015 and any reports arising from that conference of experts was to be served upon all parties by 17 July 2015.
Both the wife and I Pty Ltd engaged their own experts. Mr V, who was engaged by the wife, and Mr Z, who was engaged by I Pty Ltd, prepared reports, and as ordered conferred preparing a minute of that conference signed by them both. The minute was tendered in evidence by the wife as Exhibit W2. Although the husband did not engage his own expert when he filed his Case Outline on 22 October 2015, the same day I Pty Ltd withdrew from the proceedings, the husband sought to rely on the affidavit of Mr Z. Counsel for the wife did not require Mr Z for cross-examination relying instead on the minute signed by the two experts. Although the husband said on a number of occasions that he wished to adduce further evidence from Mr Z, in circumstances where Mr Z’s Affidavit filed 18 June 2015 was in evidence and he was not required for cross-examination it would have been necessary for the husband to seek leave to adduce further evidence and he did not do so.
The standard of proof in this case is the balance of probabilities. Pursuant to s 140 of the Evidence Act 1995 (Cth) the court in deciding whether it is so satisfied, without limiting the matters it may take into account, is to take into account the nature of the cause of action or defence, the nature of the subject matter of the proceeding and the gravity of the matters alleged.
As is commonly the case the husband and wife each have the burden of proving different aspects of the case.
Both the husband and the wife gave evidence and were cross-examined. I had the opportunity to observe the husband both giving evidence and conducting his case generally. The husband was in my view quite disingenuous and somewhat manipulative. On numerous occasions the husband suggested that he was not a lawyer and did not understand the process, that he was not capable of conducting the proceedings on his own behalf. He said he was further disadvantaged because of his mental health issues, albeit he said on 27 January 2016, when he sought an order for part property settlement and thereafter it follows an adjournment to enable him to engage solicitors and repay family loans, that he only saw his general practitioner every few months and had not seen him since before Christmas. The husband is a qualified professional and clearly a highly intelligent man. In my view the husband conducted the proceedings more than adequately and significantly better than many litigants who must appear without legal representation. He had a good understanding of the process but more importantly in my view understood the nature of the issues in dispute and had a good grasp of the legal concepts.
It was clear both during his evidence and generally that the husband was constantly considering the impact of his evidence and the submissions upon his case. When confronted with a question, the answer to which he perceived might damage his case he would pause, my observation being that he was considering his options before answering the question, particularly when confronted with evidence which was clearly not consistent with his evidence or the way in which he was putting his case. I was left with little confidence in the husband’s evidence.
I found the husband’s attempts to distance himself from both knowledge of and involvement in the affairs of I, was disingenuous and misleading and was to attempt to legitimise both the existence of the I debt and its claim for repayment of the alleged debt as being an arms-length transaction.
Although the wife was at times a somewhat defensive witness I am also conscious of the fact that she was being cross-examined by the husband and that this was likely to have been somewhat confronting, particularly in circumstances where the questions he asked were often quite personal. The husband’s frequent references to his mental health and being homeless and left with nowhere to live by the wife were also no doubt difficult for the wife. The husband’s cross-examination of the wife was not made any easier by the husband’s attempts to involve the parties’ son Mr BB in the proceedings and the fact that he did nothing to stop Mr BB accompanying him to Court in circumstances where he knew of the estrangement between the wife and Mr BB and acknowledged that the wife might be intimidated by his presence.
As previously referred to a significant aspect of the husband’s case was that the wife’s evidence could not be trusted because she had lied about the date of separation. It is important in my view to look at exactly what the wife said about separation. The wife deposed at paragraphs 5 to 7 of her Trial Affidavit filed 14 August 2015 in summary as follows:
(a)that she and the husband had been experiencing difficulties in their relationship for an extended period;
(b)that in March 2010 she moved out of the former matrimonial home in order to try and address the issues in their relationship, moving to a rental property in E Town with the youngest child of the marriage F;
(c)that she and F returned to the former matrimonial home at B Street, C Town (“the C Town property”) in December 2010 and remained there until January 2011;
(d)that she and the husband continued to have issues with their relationship, particularly in relation to the husband’s transparency with respect to financial matters;
(e)that in January 2011 the wife and F again left the former matrimonial home living in a rented property in E Town for the next 12 months. The wife says she paid the rent and F’s day to day living costs and the husband paid F’s school fees;
(f)that in March 2012 the wife and F moved into the property purchased in her name at D Street, E Town (“the E Town property”) where she and F still live.
(g)that the husband has only lived in the E Town property for a short period in late 2012 when he was suffering from anxiety and required care; and
(h)that she and the husband had had independent lives since March 2010 and that she had told the husband in March 2010 that they would maintain separate finances and that the remaining aspects of their relationship were terminated by late 2012.

The husband denied what he described as the wife’s assertion that they separated in March 2012, albeit in my view that is not her case. He said that they had separated on 15 March 2013 when the wife called a family meeting and told the two elder children that she wanted to separate. The wife’s evidence was that she had not called a family meeting to advise the children that she intended to separate from the husband. It was her evidence that in December 2012 she had told the youngest child that she and the husband had separated. This is also consistent with the wife’s evidence that the husband described himself as separated on the admission form when he was admitted to the G Town Clinic in early December 2012. Although the husband says he did so at the direction of the wife it is difficult to see how he would not have understood at that time that the marriage was at an end.
The husband deposed by way of response in his Trial Affidavit Trial Affidavit filed 4 September 2015 in summary as follows:
(a)that although the wife was the driving force behind the purchase of the E Town property, that he also signed documents with respect to the financing of the property (paragraph 48);
(b)that the wife kept in touch with him by email between May and October 2012 when he was in the process of sailing the boat he had purchased back from the United States of America where it had been purchased discussing what he described as “… day-to-day plans and other mundane matters” (paragraph 49); and
(c)that she did not cancel the family health insurance until 2013 (paragraph 50).
During cross-examination the husband also put further matters to the wife which he said established that the wife’s evidence about the date of separation was misleading including that:
(a)they had purchased the E Town property as a future family home. In support of his assertion he tendered a chain of emails between the wife and Ms CC in which the wife said on 1 January 2011 “… thanks for the goss on BH – keep it coming. But alas I think buying is a way off yet – [Mr Brand] still being resistant, I am thinking / trying to rent for another year – after the high summer rentals finish…” (Exhibit H4);
(b)she visited the husband in Polynesia in September 2012 and they slept together at the Radisson Hotel on the first night, which was conceded by the wife;
(c)when he returned to Australia in late October 2012 he moved back into the E Town property as husband and wife and that he and the wife slept in the same bed for the first week, which was denied by the wife;
(d)the husband also put to the wife emails from September 2012 between he and the wife which he asserted demonstrated an ongoing relationship including a financial relationship contrary to the wife’s evidence. Those emails, which were exhibits H12 and H13, are in my view equally consistent with the wife’s evidence.
The husband also put to the wife and tendered his H credit card statements for the period 26 June 2011 to 1 May 2012 (Exhibit H15) which he put, based upon the number of transactions in E Town, that he and the wife were living together in E Town during that period. Whilst those credit card statements do show transactions in E Town they also show transactions in C Town where the wife says the husband was living. In my view the credit card statements are equally consistent on that basis with the wife’s evidence that the husband lived in C Town and visited E Town to see their son F.
There are also other aspects of the husband’s evidence which are inconsistent with his case that he and the wife had not separated until March 2013. The most obvious example being that one might have expected that if the marriage was ongoing as he said it was he might have discussed with the wife his proposed resignation as a director of I Pty Ltd, that resignation having been tendered in November 2012, his intention to both purchase a yacht and that it was his intention that the children of the marriage should have an interest in that yacht.
In my view the husband has misconceived the basis of the wife’s evidence and that in any event many of the matters upon which the husband sought to rely were either consistent with or supported the wife’s version of the evidence. In so far as their evidence was in dispute for the reasons to which I have already referred I prefer the wife’s evidence. I am satisfied that the parties had from March 2010 lived increasingly separate lives and that as deposed by the wife at paragraph 7 of her Trial Affidavit filed 14 August 2015 any remaining aspects of the marriage were terminated in November 2012.
In all of the circumstances and although this is just one example I have significantly more confidence in the evidence of the wife and where their evidence is in conflict, absent clear corroboration of the husband’s evidence, prefer the evidence of the wife.

Background

The husband, Mr Brand was born in 1956 and is 59 years of age. The husband is a qualified professional. The husband has been treated for depression, which according to the evidence of his General Practitioner Dr Y was first noted in 2008, was an issue in May 2011 and again in December 2012. In his Report dated 31 August 2015 (Annexure B to the Affidavit of Dr Y filed 12 October 2015), Dr Y reported having seen the husband on 12 occasions since December 2012 and described the husband’s mood as fluctuating during this time. In his Report dated 1 September 2015 (Annexure C to his Affidavit filed 12 October 2015) Dr Y opined that the husband “… will get better over time, however, he is unlikely to improve while he is troubled by all this Family Law turmoil”. There is no evidence of the husband having any other health issues.
The wife, Ms Lake was born in 1959 and is currently 56 years of age. She is in good health and is employed full time as a Manager at DD Ltd, having commenced in that position in September 2015, and is also a part time director of EE Org.
The parties met in the early 1980s commencing a de facto relationship shortly thereafter and marrying in 1984.
There are three children of the marriage all of whom are now adults.
It is the wife’s evidence as deposed to in her Trial Affidavit filed 15 August 2015 that in March 2010 she moved to E Town with F, the youngest child of the marriage, who was then 12 years of age. She said that thereafter she and the husband developed their own independent lifestyles and maintained separate finances. The wife says she was responsible for paying the rent on the property and although the husband did not pay child support he did pay F’s school fees. The wife and F returned to the former matrimonial home at the C Town property in December 2010 but the wife said that she and the husband continued to experience problems with their relationship because of her wish to have clarity and transparency in relation to their financial affairs. In January 2011 the wife rented another property for herself and F in E Town. It is her evidence that she made the rental payments and was responsible for F’s day to day living costs and that the husband continued to pay F’s school fees.
The wife says that after she and F moved into the E Town property in March 2012 the husband continued to live in the C Town property until leaving on his sailing trip and after his return save for a short period in late 2012 when he was suffering from anxiety and needed care following a period of hospitalisation. As I have previously found by late 2012 the marriage was at an end.
Although the wife’s case is that the date of separation has little or no relevance to any of the substantive issues, as previously referred to it was the husband’s case that it was a significant credit issue and to that end he cross-examined the wife at length in relation to her evidence as to the date of separation. During his final address the husband conceded that although it was relevant as to the wife’s credibility, nothing else turned on the date of separation.

History of the Proceedings

The wife commenced proceedings in the Federal Circuit Court in July 2013 seeking orders for property settlement. Although the C Town property had been on the market since late 2012 there had been no offers. The wife’s application was listed for hearing before Judge Hartnett on 13 August 2013. On that date her Honour made orders inter alia for the husband to file and serve a response and a financial statement within 21 days, that the wife do all acts and things necessary to sell the C Town property registered in her name, that the wife to have the sole right to occupy the C Town property, and that the husband to be restrained from taking any steps to hinder the sale or using either the C Town property or the E Town property as security for any monies owed by him to any third party or charging any interest he had in either property for any debt. Her Honour also made orders providing for the wife to have the sole right to occupy E Town and that during such right of occupation she pay all instalments pursuant to the mortgage secured over the property. Finally orders were made for the husband to produce documents and the matter was adjourned for further hearing on 30 October 2013.
The C Town property remained on the market without any offers being received until the wife on the recommendation of the selling agent listed the property for sale by public auction on 13 April 2014. The wife’s case is that the husband was advised of the auction date some weeks before the auction, was supplied with copies of the Section 32 Vendor Statement and proposed Contract of Sale and attended the auction.
The property was initially passed in but ultimately sold after further negotiation for $960,000. Settlement was scheduled to take place on 8 August 2014 and the husband was provided with full details of the Contract by letter dated 22 April 2014 and provided with a withdrawal of caveat for him to sign, confirming the proceeds of sale of the C Town property after discharge of the mortgage and other expenses would be held in trust in accordance with the order made by Judge Hartnett on 13 August 2013 and advising him that if he did not provide the withdrawal of caveat an application would be made to have the Registrar sign the withdrawal of caveat on his behalf.
On 5 May 2014 the wife’s solicitor wrote to K Lawyers, who had been until that time acting on behalf of the husband and had on his instructions lodged the caveat over the property requesting that they prepare a withdrawal of caveat for the husband to sign. On 8 May 2014 the wife’s solicitors received a reply from K Lawyers advising that they no longer acted on behalf of the husband and in those circumstances any enquires would need to be directed to the husband.
When the purchasers requested that the settlement be brought forward the wife’s solicitors wrote to the husband on 28 May 2014 requesting that he execute a Withdrawal of Caveat. The following day the husband advised the wife’s solicitor that he would not provide a withdrawal of caveat as a consequence of which on 4 June 2014 the wife filed an Application in a Case seeking inter alia that a Registrar of this Court execute a withdrawal of caveat in the husband’s stead.
On 10 June 2014 the wife’s solicitor forwarded a copy of the wife’s Application in a Case and Affidavit in support to the husband by registered mail care of the husband’s post office box in C Town. The wife’s evidence is that by this time the husband had stopped communicating either with her or her solicitor but that on 29 May 2014 her solicitor received an email from the husband in which he said as follows:
Dear [Ms L]. I apologise in advance but the only expression I can find to suit your ongoing threats of legal action is …
“GO GET FUCKED”
Kind Regards
[Mr Brand]
The matter was listed for hearing before me in the Judicial Duty List on 2 July 2014. Although the husband’s sister was present in Court the husband did not appear. The husband did not collect the documents sent to him by registered mail on 10 June 2014 however having found that he was aware of the sale of C Town, of the proposal to bring settlement forward, the request for him to provide a Withdrawal of the caveat lodged on his behalf and the hearing before me on 2 July 2014 I made the orders sought by the wife on that date appointing the Registrar to sign the withdrawal of the caveat lodged by the husband and restrained the husband from lodging or attempting to lodge another caveat. The husband did not sign the withdrawal of caveat and it was signed in his stead by a Registrar of this Court.
The wife’s Application in a Case also sought orders that $300,000 of the proceeds of sale of the C Town property be paid to the Commonwealth Bank in reduction of the E Town property mortgage (with the balance of the proceeds to be held on trust by the wife’s solicitors) and orders pursuant to s 106B of the Family Law Act 1975 (Cth) (“the Act”) setting aside the instruments by which the husband had resigned as a director of I and H, had transferred his share in I to his mother and had resigned as guardian/appointor of the Mr Brand Family Trust. Although that Application and the Affidavit in support of that Application had been served by pre-paid post upon the registered offices of the relevant companies and by registered mail upon the husband’s mother, there was no appearance by the directors of those relevant companies or by the husband’s mother and I adjourned the matter to the Judicial Duty List on 6 August 2014 to allow the husband, who was sailing somewhere between Sydney and Melbourne at the time of the hearing before me, to file answering material.
Settlement of the sale of C Town was completed on 15 July 2014. At settlement the Commonwealth Bank received $571,769 being $439,675.27 to discharge the C Town property mortgage and a further sum of $132,093.73 the Commonwealth Bank required to reduce the E Town property mortgage, leaving the sum of $294,040.56 to be invested on behalf of the parties pursuant to the orders made by Judge Hartnett on 13 August 2013. Although the E Town property mortgage was reduced to $636,000 and the loan was at that time interest only, the wife was still having to pay approximately $2,750 per month.
The wife filed an Affidavit on 4 August 2014 to which she annexed a Minute of Proposed Order to be sought upon the hearing of her Application in a Case filed 4 June 2014. In that Minute of Proposed Order the wife sought substantially the same orders as in her Application in a Case filed 4 June 2014, albeit that she sought that $170,000 of the proceeds of the C Town property be applied toward the mortgage of the E Town property (instead of the amount of $300,000 as she had originally sought).
The matter came on for hearing Johns J in the Judicial Duty List on 6 August 2014. The husband had filed answering material in accordance with my order made 2 July 2014 and her Honour noted that the husband appeared representing himself and was accompanied to Court by his parents, brother and sister who remained in Court throughout the hearing. Her Honour found that the order sought by the wife for $170,000 of the net proceeds of sale of the C Town property to be applied to the reduction of the E Town property mortgage would have the effect of protecting and preserving the property of the parties pending the final hearing of the matter and ordered accordingly.
Her Honour also found that from the commencement of the proceedings the wife had squarely raised the husband’s interests in the I Group as an issue in the proceedings and that he had executed the instruments removing himself as a director and shareholder of I Pty Ltd and a director of H and as the guardian and/or appointor of the Mr Brand Family Trust so as to dispose of his interests in those entities and remove them from the reach of the Court. On that basis she made the orders sought by the wife setting aside those instruments and restoring the husband to the positions held by him prior to his execution of those instruments. On 11 November 2014 John J ordered that the husband pay the wife’s costs of and incidental to her Application in a Case filed 4 June 2014 fixed in the sum of $8,000, those costs to be paid within 90 days. Her Honour further ordered that those costs be paid out of the husband’s entitlements in the event that he did not comply with her order. Those costs remain unpaid.
On 18 September 2014 Cronin J made orders listing the matter for a first day before him on 3 November 2014 and for the parties to file an amended initiating application and response thereto in anticipation of that hearing. In compliance with those orders, the wife filed an Amended Initiating Application on 22 October 2014 seeking inter alia that the husband indemnify the wife and be solely liable for any monies owing to I Pty Ltd or any of the entities comprising the I Group. The husband in his Amended Response to Initiating Application filed 27 October 2014 sought inter alia that the parties make payments to the Brand Unit Trust in satisfaction of a loan owed by the parties to that entity. When the matter came before Cronin J for a first day of hearing on 3 November 2014, his Honour made orders inter alia that all outstanding interim applications be adjourned to 30 January 2015 for determination, that there be discovery as sought by the wife in relation to the I Group and the husband’s sailing endeavours and that I Pty Ltd be joined as a party to the proceedings.
On 30 January 2015 Cronin J made orders inter alia adjourning all extant applications for final orders to a date to be fixed and referring the case to the Case Management Judge for fixing for trial with a request that it be given as much priority as the Court can afford.
The matter was then allocated to my docket and I made orders on 10 March 2015 listing all extant applications for final orders to a first day before me on 4 May 2015.
At the first day on 4 May 2015 I set the matter down for a four-day hearing commencing 26 October 2015 and made the usual trial directions for the filing of material in preparation of that hearing. As previously referred to, I also made orders for the filing of affidavits from adversarial witnesses in relation to the debts alleged to be owed to I and for a conference of expert witnesses prior to the trial, as well as granting the parties leave to obtain and file affidavit evidence of the value of the vessel, a yacht purchased by the husband in December 2011. Finally, I made orders by consent on that day that the husband and wife obtain a joint valuation of the E Town property.
On 22 October 2015, four days prior to the final hearing, I filed a Notice of Discontinuance. On that same day, the husband’s previous solicitors filed a Notice of Ceasing to Act. The hearing proceeded on 26, 27, 28 and 29 October 2015 and was then adjourned part-heard to 27 January 2016 for a further three days of hearing, concluding on 29 January 2016.

Legal Principles

Before making any orders pursuant to s 79 of the Act adjusting the parties’ legal and equitable interests in property, the court must be satisfied that it is just and equitable to do so (s 79(2) of the Act). Although it may not be just and equitable to make orders at the end of every marriage, as the High Court in Stanford v Stanford (2012) 247 CLR 108 there are many cases in which that requirement may be readily satisfied. In this case the marriage having ended, the husband and the wife no longer having the common use of property they acquired during the marriage and having maintained separate finances for many years, I am satisfied that the financial arrangements they made during the marriage are no longer appropriate. In circumstances where both parties seek orders, I am satisfied that it is just and equitable for the court to make orders adjusting their legal and equitable interests in property.
As the Full Court said in Bevan & Bevan [2013] FamCAFC 116, the just and equitable requirement permeating the entire process, the court having considered the matters in s 79(4) must make such orders as it considers just and equitable. Although the court’s discretion is broad it must be exercised judicially having regard to the requirements of the Act.

The Parties’ Summary of Assets and Liabilities

The starting point of any case in which the parties seek an adjustment of their interests in property pursuant to s 79 of the Act is to identify and if necessary make findings, where there is a dispute, as to the parties’ legal and equitable interests in property.
The parties’ respective positions with respect to their legal and equitable interests in property taken from their case outlines was as follows:

Asset	Wife	Husband
D Street, E Town (the E Town property)	$780,000.00	$780,000
C Town property sale proceeds	$125,916.63	$127,344
Husband’s 4WD	NIL	NIL
Husband’s Sedan vehicle	NIL	NIL
Wife’s CBA account #...	Nominal	$360
Wife’s CBA account #...	Nominal	$7
Wife’s CBA account #...	Nominal	$423
Husband’s bank accounts	Nominal	$256
Husband’s interest in I Group	$509,716 (pursuant to the methodology agreed between the expert valuers Mr V and Mr Z being value of cash, external debtors less external creditors and land value of $1,3000,000 as per minute of experts conference held 7 October 2015)	$1 (1 share)
Yacht	$157,500 (100 per cent)	$77,500 (31 shares of 64)
Husband’s AMP shares	$871 (150 shares)	$871 (150 shares)
E Town household contents	Not included in wife’s balance sheet	$10,000
Wife’s Jewellery	As above	$45,000
Wife’s undisclosed AMP shares	As above	NK
Parties’ interest in Brand Unit Trust	As above	NIL
Parties’ interest in H	As above	NIL
Total	$1,574,003.63	$1,041,762
Liabilities
CBA mortgage- E Town property	$467,414.12	$467,414.12
Wife’s CBA Gold Award Credit Card	$8,646	$8,646
Wife’s CBA Rewards Credit Card	$4,706	$4,706
Wife’s CBA Personal Loan	$14,470	$14,470
Loan from Dr M Brand (Legal Fees)	Not included in wife’s balance sheet	$20,000
Loan from S Brand	As above	$13,000
Loan Agreement regarding Yacht	As above	$198,373.14
Loan Agreement signed by the husband on 29 August 2013	As above	$705,885
Total	$495,236.12	$1,432,494.26
NET ASSET POOL	$1,078,767.51	(-$390,732.26)
Superannuation
Wife’s BT Retirement Fund	$91,034.65	$91,034.65
Wife’s First State Super	$51,867.66	$51,867.66
Husband’s CBA Superannuation	$1,662	$1,662
Total	$144,564.31	$144,564.31

There are a number of significant differences between the parties’ respective positions vis-à-vis the summary of their assets and liabilities, the most significant being the value of the husband’s interest in the I Group and the alleged loans from I.

Value of the Husband’s Interest in the I Group

The wife, based upon the evidence of Mr V, attributed a value of $509,716 to the husband’s interest in the I Group. This was based upon the land at Suburb FF, consisting of two properties, (“the Suburb FF properties”) being owned by I Pty Ltd in its capacity as trustee of the Brand Unit Trust and that land having a value of $1,300,000. The husband disputed both the ownership of the Suburb FF properties and their value.
In the joint minute of their conference (Exhibit W2) Mr V and Mr Z, who is referred to as Mr Z in the joint minute, reported as follows:
It was agreed by both experts that in the absence of profitable trading the only basis upon which the [Brand Unit Trust] (“BUT”) could be valued was on a net asset basis which assumes the orderly realisation of assets and payments of liabilities from proceeds.
They went on to report:
[Mr V] was of the view that land and buildings worth $1.3m based on the council rates notice capital improved value had been omitted from BUT’s Balance Sheet.
Both accountants viewed and agreed that the provided Balance Sheet at 30 June 2010 had included Freehold land at $104k and that this land had been subsequently removed from this Balance Sheet.
[Mr Z] noted that [Mr AA] had in a recent affidavit suggested that the amount had been recorded in error.
Both accountants also viewed the last prepared Balance Sheet for [S Brand Family Trust] and agreed that no freehold land had been included in that Balance Sheet.
[Mr Z] again noted that [Mr AA] had stated in his affidavit that the freehold land should have included in the Balance Sheet of [S Brand Family Trust].
[Mr Z] said that he had been given SRO statements showing the land owned by [S Family Trust] and section 32 statement in 1990 showing the land had been sold between entities and that [Mr AA] had now sworn that he incorrectly included it in BUT’s accounts.
…
[Mr Z] conceded that save for the SRO assessment and section 32 document sighted by him he had seen no evidence that [S Brand Family Trust] or BUT beneficially owned the land.
[Mr Z] was of the view that the disputed beneficial ownership precluded it from being included in BUT as it appeared there was no evidence to support that BUT owned it beneficially…
…
The experts agree that the relevant value of the pool pertaining to [H] & BUT for the Parties will be one-third of the consolidated value of the following external assets of BUT and [H] (noting that on consolidation the value of inter-entity loans and shares owned by BUT in [H] will be eliminated):
·Value of cash, external debtors less external creditors
·Value of land if ownership can be proven to be in BUT and not [S Brand Family Trust]. It was noted that ownership of the land was in dispute.
…
The wife case is that the land, which is on two titles was, when it was purchased, and has remained registered in the name of I Pty Ltd as trustee of the Brand Unit Trust. According to the title searches both dated 29 September 2015 (Exhibit W22) I became the registered proprietor of one of the two properties on 1 July 1986 and the second property on 22 July 1986. The searches also show that a mortgage to the Commonwealth Bank was registered over both properties on 26 July 1988. It is clear from the mortgage documents which are also in evidence before me (Exhibit W22) that the mortgage over the properties was to secure a loan by I Pty Ltd as trustee of the Brand Unit Trust. That mortgage has not been discharged and there is no other registered dealing with respect to either property. Counsel for the wife submitted, and I accept her submission, that the fact that the property remains as security for the borrowings of the Brand Unit Trust suggests that the Commonwealth Bank, in the absence of any evidence to the contrary, and there is none, was never notified of the alleged transfer. One would normally expect that had the Commonwealth Bank been notified, it would have either required the discharge of the mortgage or alternative security for its loan.
The wife also relies upon the fact that until the financial year ending 2010 the land was recorded in the Balance Sheet of the Brand Unit Trust (see Exhibit W25), that the Brand Unit Trust constructed a factory on the land, which remains in the Brand Unit Trust Balance Sheet, and that the Brand Unit Trust paid outgoings on the property including rates and land tax.
Although the husband now concedes that the property was previously owned by I in its capacity as trustee of the Brand Unit Trust, his position and that of both his parents and I Pty Ltd has not always been so clear. In the joint minute of the experts conference Mr Z referred to what he described as a “recent affidavit of [Mr AA]” in which Mr AA had suggested that the Suburb FF properties had been recorded in error as assets of the Brand Unit Trust. Although there was some confusion as to which Affidavit he had been referring to, it eventually became clear that Mr AA had sworn two affidavits in the proceedings, one on 3 September 2015 and the other on 30 September 2015. Only the first of those Affidavits had been filed. Although the husband did not seek to rely upon either of these Affidavits, his sister in her Affidavit filed 3 September 2015 adopted the contents of the first of those Affidavits and was cross-examined about the second Affidavit in relation, in particular, to the issue of the ownership of the Suburb FF properties. As the first of Mr AA’s Affidavits did not refer to the ownership of the Suburb FF properties it is clear that the Affidavit referred to by Mr Z was the second of the two in which Mr AA deposes at paragraph 4:
I have previously believed that the properties were owned by [Mr O] and [Ms A Brand]. However, I have recently been made aware that the properties actually belonged to the [S Brand Family Trust]. I was informed recently by [Dr M Brand], subsequent to the State Revenue Office requesting information regarding ownership of the properties, that they were in fact owned by the [S Brand Family Trust], having been transferred to her mother’s and father’s trust back in about 1990.
This paragraph was put to the husband’s sister who confirmed she told Mr AA that the Suburb FF properties were in fact owned by the S Brand Family Trust and further that she was told this information by her father.
It appears from his Affidavit filed on 3 September 2015 that Mr AA has been acting as the accountant for the I Group since approximately 1992. It is hard to understand why, when he said he believed the land was owned by the husband’s father and mother in their own right, that for almost 20 years he would have included it in the Balance Sheet of the Brand Unit Trust or that someone in the Brand family would not have pointed out his mistake. There is also no evidence before me of the property having been recorded as an asset of the S Family Trust. As accepted by the husband’s sister in cross examination, Mr AA in his Affidavit sworn 30 September 2015 states that the taxation returns of the S Family Trust never showed the Suburb FF properties as an asset.
It was also put to the husband’s sister that in so far as Mr AA had also said at paragraph 7 of his Affidavit sworn 30 September 2015 that the Brand Unit Trust does not own the land and buildings that was clearly not correct in circumstances where both she and the husband say that the Unit Trust owns the buildings.
The picture was further confused when on 15 October 2015 GG Lawyers, purporting to act on behalf of I Pty Ltd in its capacity as trustee of the S Family Trust, presumably instructed by the husband’s father and mother, wrote to the wife’s solicitors advising as follows (Exhibit W3):
…
We are instructed that your client is alleging that the above properties are owned by our client in its capacity as trustee of the [I Unit Trust] (“the Unit Trust”).We understand that it is alleged that [Mr Brand] has an indirect interest in a unit holder in the unit trust and that for this reason you wish to have the properties valued and, presumably, be treated as an asset or financial resource of the husband.
We are instructed that the properties are not owned by the Unit Trust but are owned by our client in its capacity as trustee of the [S Brand Family] Trust (“the Family Trust”). We refer to the affidavit of [Mr AA] sworn 30 September 2015 in which he confirms that this is the case. On our instructions the properties have at all relevant times been owned by the Family Trust and the properties have never been owned or recorded as an asset of the Unit Trust. As [Mr AA] indicates in his affidavit, the inclusion of the reference to improvements to the buildings in the accounts of the Unit Trust is a reference to tenant’s fit out undertaken by the Unit Trust and is not a reference to the Unit Trust owning the properties.
I am satisfied that this is not only not the case but more importantly it highlights the dependence of the various witnesses upon each other’s evidence in circumstances where that evidence is itself flawed. For example both Mr Z and it would appear the husband’s parents’ solicitors rely upon the evidence of Mr AA in circumstances where he says he is relying upon what he has been told by the husband’s sister Dr M, who herself says she is relying upon the evidence of Mr AA and Mr Z.
Both Mr AA and Mr Z also place significant weight on the assessment issued by the State Revenue Office, which was based upon the land being owned by the S Family Trust. However, what they either did not know or did not say is that the assessment was triggered by and issued as a direct result of a Statement of Land Held on Trust, which the husband acknowledged he had drafted and which was signed by his mother on 10 March 2015 in which she declared that the land was held in trust by I on behalf of the S Family Trust (Exhibit W24). It is the wife’s case, and the husband does not suggest otherwise, that when the husband’s solicitors sent that land tax assessment to the wife’s solicitors after they had asked for a copy of the rates notices for the property that that was the first occasion since the commencement of the proceedings that an assertion had been made by either the husband or any other family member that the Unit Trust did not own the land.
That leaves the Section 32 Certificate dated 26 October 1990 (Exhibit W23) upon which the husband relies in support of his case that the property had been transferred to the S Family Trust, absent any other evidence as to the reason for and circumstances of its preparation or the reason for that transfer.
Although the standard of proof is the balance of probabilities, in this case the evidence is overwhelming. I am satisfied that the Suburb FF properties are the property of the Brand Unit Trust held on trust for the Unit Trust by I in its capacity as trustee of the Unit Trust and that on that basis are to be included in the assets of the trust for the purposes of valuation.

Value of the Suburb FF Properties

On 15 October 2015 having received the minute signed by the two expert witnesses as to the methodology to be applied for the purposes of valuing the husband’s interest in the I Group the wife’s solicitor wrote to II Lawyers, I Pty Ltd’s solicitor, referring to that minute and suggesting that all three parties share the expense of obtaining a valuation of the Suburb FF property. On 20 October 2015 the HH Lawyers, who were then acting on behalf of the husband, wrote to the wife’s solicitors, copying in the solicitors to I Pty Ltd, and said as follows (Exhibit W3):
Our client’s position is that the aforementioned properties do not belong to the [Brand Unit Trust] but rather are asserts [sic] of the [S Brand Family Trust]. Consequently, our client has no interest in the [Suburb FF] properties and they are irrelevant to these proceedings.
In light of our client’s position, we see no reason as to why the properties need to be valued. It is of course open to your client to obtain her own valuation of the property at her own cost. We draw to your attention that if she is to do so, such valuation would need to take into account the true circumstances of the property including the fact that it was the subject of a large fire and is in a dilapidated state.
As previously referred to on 15 October 2015 the wife’s solicitors had received a letter from GG Lawyers acting on behalf of I as trustee of the S Family Trust in which they said with respect to the valuation of the Suburb FF properties as follows (Exhibit W3):
Since drafting this letter we have been provided with a copy of your letter to [II Lawyers] of 15 October 2015. For the reasons stated above we say that it is clear that the value of these properties is irrelevant to the Family Court proceeding and as such our client will not agree to participate (financially or otherwise) in having the properties valued.
(emphasis added)
On 21 October 2015 following receipt of the letters from both HH Lawyers and GG Lawyers, the wife’s solicitors wrote to II Lawyers, HH Lawyers and GG Lawyers advising as follows (Exhibit W3):
Given the delay incurred since our initial request was made on 15 October, 2015 that a valuation be obtained, and the stance adopted by all respondents, we shall now rely upon the values attributed to the land and identified in the City of [G] rate notices being the best evidence of this value. Our client believes that value to be reliable in any case. The respondents have had ample opportunity to obtain a valuation, and we will oppose any application they may to enable them to obtain further evidence.
It is the wife’s case that the Court should adopt the capital improved value of the Suburb FF properties as per the City of G Rate Notices that being the best evidence available (Exhibit W4). The combined value of the properties based upon those rate notices is $1,300,000. The husband ‘s case is that the Court should not accept these valuations, which had been relied upon by Mr V, because Mr V is not a qualified valuer and that the valuations do not take into account that the buildings which have been valued have been damaged by fire. I reject the husband’s submissions.
Firstly Mr V did not at any stage purport to value the property and simply adopted the rateable value as the Court is being asked to do. Secondly, there is no evidence based upon which I could conclude that the rateable values of the property have not taken into account any fire damage there may have been to the buildings. The husband sought to rely upon photographs of the property (Exhibit H10) however even if I were satisfied that the valuations of the properties for the purpose of fixing their value had not taken into account the fact that there had been fire damage, the photographs would not assist me. I am not a qualified valuer and in my view I not only could not, but should not substitute my own assessment of value. The husband did not adduce any evidence of I having ever challenged the rateable value either for the purposes of the rates payable on the basis of the valuation or land tax.
Finally if the husband had wanted to obtain a valuation of the property, he unlike the wife had access to the property for that purpose, arguably did not need the co-operation of either I Pty Ltd or his parents and could have, had he chosen to do so, had the Suburb FF properties valued. This matter was adjourned part heard between late October 2015 and late January 2016 in circumstances where the husband could have been left in no doubt that the wife would be seeking to rely upon the rateable value. The husband did not at any time seek leave to adduce any expert evidence of value.
In all of the circumstances I am satisfied that the best evidence available, in the face of the lack of co-operation on the part of the husband, I Pty Ltd and the husband’s parents, is the evidence of the rateable value of the Suburb FF properties. I propose to proceed on the basis of that evidence.
It follows therefore that the value of the husband’s interest in the Brand Group is as valued by Mr V, $509,716
Finally during final addresses the husband submitted, referring the Court to the High Court decision of Kennon v Spry (2008) 238 CLR 366 that as the Mr Brand Family Trust was a discretionary trust it was a resource and not his property and should therefore not be included as property belonging to the parties. The husband is the appointor/guardian of the trust and both he and the wife are beneficiaries of the trust and there is ample evidence of the husband exercising control of the trust. In all of the circumstances I am satisfied that the Mr Brand Family Trust and its assets, in this case the units it holds in the Brand Unit Trust, is property for the purposes of the proceedings pursuant to s 79 of the Act.

Brand Unit Trust Debt

The most significant point of difference in financial terms is the parties’ alleged liability to the Brand Unit Trust. The husband in his Trial Affidavit filed 4 September 2015 deposed at paragraph 8 as follows:
The main joint liability relates to monies owing to the factory/[Brand Unit Trust]. As will be referred to in further detail below, during the course of our marriage, the Wife and I have borrowed extensive and significant funds from the factory in order to meet our lavish lifestyle. We regularly borrowed funds from the factory to assist in the purchase of assets, mortgage payments, school fees and other expenses including holidays. Our total borrowings which is owed to the factory/[Brand Unit Trust] is $1,125,390.

Although the husband did not rely upon Mr AA’s Affidavit filed 3 September 2015, Mr AA annexed to that Affidavit what he said was a year by year summary of the distributions and payments for wages together with resulting loan account balances for the Mr Brand Family Trust commencing in the financial year ended 2010 (Annexure JMH-2) which were relied upon by Mr Z in his Affidavit and were the subject of cross-examination of both the husband and his sister. Significantly for the purposes of the issues I must determine there was in the Mr Brand Loan Account Balances the following entry for 2010, “Correction $979,866” which was described as being a “Breakdown of prev. years”. Mr AA also deposed at paragraph 13 that he had “not audited this information but [had] been provided with it by the family.” He also deposed at paragraph 12 that he had “read the report of Mr Z” and that he was “able to say that the information which has been included in that document is accurate and true.” That is probably not surprising for Mr Z was for his part relying upon the accuracy of what he had been told by Mr AA.
Mr Z in his Report annexed to the Affidavit filed 18 June 2015 on behalf of I, which was relied upon by the husband, in concluding that the husband and the wife owed the Brand Unit Trust $953,088 and that the husband owed $172,301, said in summary at page 16 as follows:
(a)that he had been provided with the balance sheets of the Brand Unit Trust for the financial years ending June 2012, 2013 and 2014, extracts of ledgers of the Brand Unit Trust of the Brand Unit Trust relating to the joint indebtedness of the parties between 1 July 2007 and 30 June 2014; and
(b)that he had reviewed copies of ledgers supplied to him by the solicitors for the Brand Unit Trust, had reviewed copies of invoices relating to amounts purportedly spent on renovations to the C Town property addressed to I as trustee for the Brand Unit Trust and confirmed with the accountant for the Unit Trust, which is Mr AA, that these invoices had not been included in BAS lodgements or expenses of the trust.
Mr Z however also reported as follows:
(a)that supporting documents to corroborate information prior to July 2009 had not been retained by the Brand Unit Trust;
(b)that he had made enquires of Brand family representatives;
(c)that he made numerous enquiries of and obtained information from AA Group and conferred with the AA Group in relation to offsets and adjustments required as a result of his review, in particular the alleged loan for the boat which he concluded related to the husband and not the husband and the wife; and
(d)that he had made enquiries of the husband.
Mr Z concluded at paragraph 7.2 of his Report as follows:
Having completed an analysis and review of the purported indebtedness of the parties to the [Brand Unit Trust] as per its financial statements for FY14, FY13 and FY 12 and following enquires made, adjustments which have followed from my review and recommendations and having relied on the financial information prepared by the external accountants to [Brand] unit trust as being reliable and for which I have no reason to suspect otherwise. In my opinion the amounts owed to Brand unit trust by the parties and by [Mr Brand] and collectively by them are as follows:
a)[Mr Brand] and [Ms Lake]  $953,088
b)[Mr Brand]  $172,302
c)Total indebtedness of the parties collectively       $1,125,390
Mr Z’s view that he had no reason to suspect the financial information prepared by the AA Group on behalf of the Brand Unit Trust ignores the fact that that information and ultimately his conclusion was based on the premise that the summary of the loan account balances with what was described as a “Correction”, being a breakdown of previous years, of $979,866 as at 30 June 2010 based upon information Mr AA said had been provided “by the family” was accurate. In my view in the absence of even the working papers he would have no way of knowing if that was the case. Although I have not had the benefit of hearing Mr Z give evidence, I have significant reservations about his conclusions to the extent that they are based upon figures which he has not and could not have verified in circumstances where he was not provided with the documents he would need to verify the accuracy of the figures.
Mr V the expert appointed by the wife said in his Report (Annexure RC2 to his Affidavit filed 22 September 2015) as follows:
16.My overall comment in respect of the loan position is that the information provided is inconsistent and lacks sufficient transparency or traceability. As a result, my only conclusion is that the loan balance attributed to the Parties is unreliable.
17.My concerns in respect of the related party loan balances throughout the [Brand Group] are as follows:
17.1The absence of financial statements for the [Mr Brand Family Trust], [Mr P Brand Family Trust] and [S Brand Family Trust], and the absence of documentation evidencing reallocation or gifting of trust profit entitlements;
17.2Grouping of loan balances into generic “[Brand Family]” account with no transparency as to the ultimate party to the loan;
17.3Restatement of the [Brand Unit Trust] Balance Sheet for the year ended 30 June 2010 without adequate explanation or evidence of the changes;
17.4Inter-entity loan balances not reconciling; and
17.5Payment of regular periodic payments to the Husband with the character of a wage for services performed, but classified as a loan advance.
Although the husband challenged Mr V’s independence on the basis of him having served on the council of the G School together with the wife and challenged his expertise to value the Suburb FF properties to which I have already referred, I found Mr V to be a cogent witness doing his best to answer the questions put to him by the husband and making concessions when it was reasonable to do so. In my view he took a much more measured and cautious approach given the lack of documents to support the figures he had been given. In these circumstances where there is a dispute between the evidence of Mr Z and Mr V, I prefer the evidence of Mr V.
I am supported in my view of his evidence by the report of the conference which took place between Mr V and Mr Z in which it was reported as follows (Exhibit W2):
Both accountants reviewed the financial statements as at 30 June 2010 as provided for the BUT and acknowledged that there was no loan advance to the Parties in this first version, only a loan amount owed to the [Brand Family Trusts] of $2,126,322.
On further discussion it was acknowledged that there existed no evidence to support the changes to the Balance Sheet as 2010 as provided. The email of BUT’s accountant [Mr AA] was referred to in which [Mr AA] stated that the changes had been made on the instruction of the Husband but that he [Mr AA] no longer held the working papers supporting the changes.
…
It was agreed by the experts to agree to disagree on the amount owed by family members. [Mr V] also disagrees with any loans owing to family members.
An already tangled web became more tangled in my view when the husband tendered his resignation as a director of both I Pty Ltd and H on 29 November 2012, he would say prior to separation albeit based upon my findings at a time when it would have been clear to him that the marriage was at an end, and as the appointer and/or guardian of the Mr Brand Family Trust albeit that documents were not lodged with ASIC until 21 February 2013.
In her reasons for judgment delivered on 9 September 2014 Johns J also referred to the husband deposing to having sold his shares in I Pty Ltd to his mother Ms A Brand in June 2013 he said so that he could satisfy the Centrelink eligibility criteria for a Disability Support Pension. Later in the judgment, her Honour noted that despite the husband deposing to having sold his shares in June 2013, the share transfer was dated 9 July 2013, around five days after the wife commenced property proceedings.
Her Honour also referred to the husband having renounced all beneficial interest in the Mr Brand Family Trust.
At the hearing before Johns J the husband submitted that the purposes of his resigning as a director and disposing of his shares was two fold. Firstly because of his inability to perform his role as a director due to his ill health and secondly to satisfy the Centrelink requirement. In his Trial Affidavit filed 4 September 2015 the husband deposed at paragraph 7(g)(ix) that in late 2012 he had been unable to meet the contract requirements for an important customer and that his brother Mr P and his father had a meeting at which he says they told him to return all his company credit cards, told him that he would no longer have access to the company accounts and asked him to resign from his position as a director.
On 9 September 2014 following the hearing before her on 6 August 2014 Johns J made orders setting aside the instrument by which the husband resigned as a director of I and H, as the appointor and/or guardian of the Mr Brand Family Trust and transferred his shares in I Pty Ltd to his mother Ms A. Notwithstanding those orders, on 12 September 2014 the husband’s father Mr O and his brother Mr P, who were at the time the only directors of I Pty Ltd, purported to reconvene the meeting of the board on 29 November 2012 when it was noted that the husband had requested to resign as a director of both I Pty Ltd and H and that he was requested “to cooperate with the recovery of outstanding company funds spent for private use by way of loan account fund drawings. Offers were made to repay funds or secure funds by way of formalising loan account and offering mortgage over assets.” It was further recorded in that minute as follows:
This meeting was reconvened on 12 September 2014. Present were [Mr P Brand] and [Mr O Brand]. Following advice that Orders had been handed down in the Family Court that the resignation of [Mr Brand] as director was to be set aside the directors exercised their power and removed [Mr Brand] from the position of director retrospectively applied to 29/11/2012.
Notwithstanding this resolution of the board of I, on 15 January 2015 the wife says she received notification that the husband had been reinstated as a director of both I and H as of 4 December 2014.
Whilst there is no dispute that the husband was suffering from anxiety in late 2012 and was admitted to the G Clinic, it is also now clear on the evidence before me that the husband, notwithstanding having resigned as a director of I Pty Ltd and H and transferred his shares in I Pty Ltd to his mother, remained intimately involved in the affairs of the I Group. In so far as his resignation as a director and the transfer of his shares was designed to present a picture of a company as being at arm’s length taking and steps to secure monies owing to it the evidence clearly demonstrates otherwise. It was following his resignation as a director and the transfer of his shares that on 30 April 2013 the husband signed the loan agreement acknowledging a debt to Brand Unit Trust in the sum of $198,373.14 for the purchase of the yacht and on 29 August 2013 signed a further loan agreement acknowledging advances totalling $705,885.43. This second loan agreement was signed by the husband following receipt of a letter from JJ Lawyers to the husband and the wife dated 1 August 2013 being sent according to the husband’s sister on behalf of I on the instructions of the Brand Unit Trust in relation to its demand for payment of the sum of $705,885.43.
The JJ Lawyers file was tendered by the wife (Exhibit W28). This file is replete with emails from the husband to JJ Lawyers with respect to the Mr Brand Family Trust, emails passing between the husband and JJ Lawyers and emails signed by the husband purporting to be written on behalf of Mr P Brand and file notes of telephone attendances with the husband including the husband’s suggested amendments to the draft letter of demand to be sent by JJ Lawyers on behalf of I to both the husband and the wife on behalf of the Brand Unit Trust and instructions to send the letter of demand once the proposed amendments had been made. This is in circumstances where the letter dated 1 August 2013 said that the current directors of the Brand Unit Trust were Mr P Brand and Mr O Brand and where the husband “… was asked to leave [I Pty Ltd] as both director and employee on or about 30 November 2012 because of poor health and use of the Business bank account [I Pty Ltd account] for personal expenses.”
When I Pty Ltd filed its Response to Initiating Application on 12 December 2014 it sought orders that the husband and the wife pay I Pty Ltd as trustee of the Brand Unit Trust the sum of $962,875. It is clear from the wording of the orders that this included the alleged loan for the yacht. In its Amended Response to Initiating Application filed 20 April 2015 I sought an order for the payment of the same amount however when it filed its Further Amended Response to Initiating Application on 7 July 2015 the amount I sought to be paid by the husband and the wife was $1,125,390.
The husband’s sister said with respect to the alleged debt of $705,885.43 acknowledged by the husband in the loan agreement he signed on 29 August 2013 at paragraph 47 of her Affidavit filed 3 September 2015 that the “… figure has as a consequence of careful examination and investigation of the company records been found to have been less than what was actually owing” and at paragraph 46 of that same Affidavit that “… the investigation as completed by [Mr Z] of the unit trust records and bank records discloses that the actual debt in this regard by [Mr Brand] and [Ms Lake] amounts to $953,088.” Leaving aside the question of why a demand for payment would have been made in circumstances where there had not been a careful examination of what was actually owing or how in those circumstances the amount claimed was calculated, and the fact that there were by this time at least three different sets of figures, it was clear from Ms Brand’s evidence that she had had little or no understanding of the way in which the I Group operated generally, either historically or currently and had no independent knowledge or understanding of the alleged debts to I. I am satisfied that she more likely than not was doing the husband’s bidding.
Her evidence that “there was a lot of focus on trying to keep [the husband] away [from JJ Lawyers and KK Lawyers] because of the problems with him being a director and having such significant understanding of the functioning of the business and being involved in this case. It was very complicated. And we made all effort to try and keep it objective, to keep [the husband] away from it…”and that she did not “… think he consulted lawyers with regards to the business since he’s been involved in this case” was, on the basis of the JJ Lawyers file (Exhibit W28), demonstrably untrue and I am satisfied that Ms Brand knew it was untrue. She was a best an unconvincing witness and at worst a deliberately dishonest witness. Either way I have little or no confidence in her evidence.
The husband’s sister in her Affidavit filed 3 September 2015 at paragraph 45 deposed that although in the loan agreements signed by the husband in relation to the boat debt the amount was $198,373.14 “the investigation completed by Mr Z as detailed in his affidavit specifies the extent of the debt to be $172,302 in this regard.” This is yet another figure worked out after the event in circumstances where there is no evidence of any earlier agreement to repay any amounts allegedly owing to Brand Unit Trust. As submitted by counsel for the wife there either was or was not an agreement to repay a specified sum used by the husband to acquire the yacht and there is no evidence that was the case.
In my view the loan agreements signed by the husband are meaningless and do not add anything to the evidence other than to demonstrate the efforts made by the Brand family generally to influence the outcome of these proceedings.
It is also important in my view to look at what the husband and his sister say about the reason why the husband and wife now owe Brand Unit Trust the sum of $953,088 they now say is owing. In my view as submitted by counsel for the wife this does not stand up to scrutiny when viewed in the context of all the evidence. The husband after setting out what he says was the history of the business said in his Trial Affidavit filed 3 September 2015 as follows:
7(g)(x). We all worked very hard to make the factory a success and my parents were always agreeable to us borrowing funds from the factory to assist us...
…
8. The main joint liability relates to monies owing to the factory/Brand Unit Trust. As will be referred to in further detail below, during the course of our marriage, the Wife and I have borrowed extensive and significant funds from the factory in order to meet our lavish lifestyle. We regularly borrowed funds from the factory to assist in the purchase of the assets, mortgage payments, school fees and other expenses including holidays. Our total borrowings which is owed to the factory/Brand Unit Trust is $1,125,390.
9. The Wife and I were aware at all times that these monies would need to be repaid to the factory. This was referred to in a family meeting at which the Wife was present, which took place in 2008. Furthermore, there were numerous times when the factory would call in some of our debts and were required to pay this back. On many occasions, the Wife transferred these monies from our account to the factory account. The Wife and I also borrowed significantly more funds than any other family members associated with the business.
…
109. ... I say that otherwise we borrowed factory money in the vicinity of $900,000 and still owe that money. We had extensive borrowings over the years that were paid back and re-borrowed. Since 2010 we borrowed significant amounts from the factory. I used the [H] Credit Card for personal use and family expenses. The Wife was aware of the structure and obligations of the borrowing of ‘factory money’ throughout our relationship and we both relied upon the same to purchase property, pay school fees and for other family expenditure.
…
120. … I have never had any individual decision making power in relation to the distribution of trust money. I did receive distributions throughout our marriage. My salary was paid and I enjoyed the flexibility of being employed in the family business that enabled me to be available for the children as well as providing the Wife and I with income over the years.
The husband’s sister deposed in her Affidavit filed 3 September 2015, in her capacity as a director of I Pty Ltd as follows:
(a)that she recalled conversations with the wife when she said that she and the husband should use more of the “factory money” because they needed it and the husband contributed more and therefore was entitled to borrow more (paragraph 40(l));
(b)that records of loans were maintained in the loan accounts of the business (paragraph 40(ff));
(c)that it was her father’s business originally but that as time progressed he included the rest of the family (paragraph 40(s));
(d)that her father was the brains behind the business (paragraph 40(t)); and
(e)that everyone worked very hard to the best of their abilities but that the husband was the contact person (paragraph 40(t)).
It is the wife’s evidence and her case as deposed to in her Trial Affidavit filed 14 August 2015 that:
(a)the husband’s father Mr O initially established what she says was a small business but was otherwise in full time employment with the public service until his retirement in his mid-60s. Although Mr O would attend the business on a regular basis it was the husband who was the person operating the business on a daily basis and responsible for the development and expansion of the I Group including the expansion of the business overseas (paragraph 116);
(b)the husband’s brother Mr P was also involved but spent extended periods away from the business and in any event was not involved in the day to day operations of the business (paragraph 116);
(c)the husband’s mother was involved in the administration of the business (paragraph 116);
(d)although she had not been involved in the various companies or trusts or the operation of the business it was her understanding that the husband’s income was derived from both salary and trust distributions and that the distributions of trust income were a key source of their funds during the marriage because the husband tailored his employment with H such that he only received a salary of approximately $25,000 per annum (paragraph 132); and
(e)the husband raised the existence of the so called loans from the company with her for the first time on 14 March 2013 and threatened that the family would be calling in the loans (paragraph 134).

This would certainly accord with the way in which the husband has conducted these proceedings and been involved in the affairs of the I Group even when it was his case that he had been asked to resign as a director by his family because of his ill health.
There are a number of pieces of evidence which would suggest that the prospects of I and the husband’s prospects of working for I may not be quite as limited as the husband suggests. The wife’s evidence at paragraphs 85 and 86 of her Trial Affidavit filed 14 August 2015 is that she and the husband had attended a meeting with Mr AA after the husband returned from his sailing trip in late 2012 and told her that “he had no money, no plans, could not afford the yacht or houses and that he had stuffed up big time.” She says that the husband also said that the factory was not working well and that he wanted to liquidate all of their assets. The wife’s evidence is that Mr AA informed the husband that the I cash flow problem was a “temporary issue”, that the business had had a very good turnover for the last two years and that the husband should re-engage with the business again to re-establish the cash flow.
Although the husband said at paragraph 104 of his Trial Affidavit filed 4 September 2015 that he was in a very distressed state when he returned to Australia in October 2012 and that they had gone to see Mr AA to try and borrow money, he otherwise did not deny the substance of the wife’s evidence or cross-examine the wife about her evidence in relation to this issue. Even though it is the husband’s evidence that he has not returned to the business it is clear from the financial statements for the financial year ending June 2014 that at least until then I was still operating at a profit.
I have also had regard to the husband’s sister’s evidence with respect to the husband’s knowledge of the business. In cross examination while she initially denied the husband had primary control over the running of the business, she did agree that the husband is across the financial information of the business, that he understands the “ins and outs” of the business, he is very skilled in the area and as an experienced professional was the “front person” of the business.
The wife has present superannuation entitlements of $142,901. The husband has only $1,662. Both of the parties have withdrawn benefits from their superannuation fund, the husband the sum of $80,000 which he applied to the purchase of the boat thereafter gifting 33 of the 64 shares in the boat to the three children and the wife $20,000 from her superannuation fund which she says she used to for help her meet F’s school fees. As on any version of when separation occurred, the parties were by this time separated it is in my view not surprising in circumstances where the wife had been left to meet the significant ongoing expenses of maintain the two properties and supporting both herself and F that she needed to withdraw funds to meet F’s school fees and ongoing costs. The same cannot be said of the husband’s decision to purchase the yacht. Not only did the husband withdraw his superannuation entitlements to purchase the Yacht he thereafter divested himself of shares in the yacht.
Each of the parties have also had the benefit of other funds that might otherwise have formed part of the property available for division in these proceedings. The parties agree that in early November 2012 the husband sold his previous yacht for $36,000. It is the husband’s evidence at paragraph 86 of his Trial Affidavit filed 4 September 2015 that he sold that yacht “prior to separation to try and assist with our financial pressures…”. The wife concedes that the deposit of $3,000 was paid into the parties’ joint account and that a further sum of $9,000 was paid into the joint mortgage account for the C Town property. It is her evidence, which the husband did not dispute, that the balance of $22,000 was paid in three instalments to the husband’s personal account. Other than his general assertion that he sold the yacht to relieve financial pressure the husband did not adduce any evidence as to how that sum of $22,000 was applied. In the absence of evidence which demonstrates that those funds were used for the benefit of the family I am satisfied that the husband must have retained the funds for his own benefit.
On 25 May 2012 while the husband was in the process of sailing the yacht from the United States to Australia the wife purchased a new motor vehicle second-hand. It is her evidence at paragraph 60 of her Trial Affidavit filed 14 August 2015 that she purchased a European car for which she paid $26,000 using the trade in value of old vehicle for which she received $13,000 and she paid the balance of from an account in her name, $6,000 of which came from the mortgage account into which the sum of $125,000 had been paid.
In November 2014 the wife started a new position and she was provided with a vehicle for her use and so sold the European car. The vehicle was sold for $9,500 which she applied to the personal loan she had obtained in February 2014 to meet her expenditure. Whilst arguably the wife has had the use of these funds, that is in circumstances where she was left from late 2012 to meet the parties’ ongoing commitments without any contribution from the husband.
I have already referred to the loan the wife she says obtained from her father to meet the costs of preparing the C Town property for sale and her other commitments which included the C Town mortgage rates and insurance as well as supporting herself and F. Much was made by the husband of the fact that there was no evidence the money had come from her father, that the monies paid into the wife’s account were not consistent with the loan agreement and that the wife had access to her father’s accounts and could draw upon them as and when she chose to do so. Both the wife and her brother were cross-examined about the way they managed their father’s finances. I am satisfied having heard their evidence that the wife borrowed $61,900 from her father. As I have already found, there was little point in the husband pursuing this issue as even if the Court had found that it was not a loan it would have in any event been a significant contribution made on behalf of the wife.
I am however as previously referred to satisfied that some part of the funds that the wife received from her father were applied to meet her legal costs rather than the financial obligations of the parties. However I am also mindful of the fact that the wife’s legal costs would have been inflated by the way in which the husband has conducted the proceedings and his conduct generally since separation, including his resigning as a director of I Pty Ltd and H, transferring his shares in I to his mother and refusing to withdraw the caveat lodged on his behalf over the C Town property. Although it is open to the wife to seek an order for costs, if the Court were to accede to the husband’s case he would have no property against which the wife might recover even if her application for costs was successful. Even if her case succeeds in order to recover any cost ordered there would probably need to be a sale of the Suburb FF properties, something which, given the way in which the husband and his family have conducted these proceedings, would be unlikely to be straightforward.
Having considered all these matters I am satisfied that there should be a small adjustment in the husband’s favour. Although I am satisfied that the husband should be able to return to work once these proceedings are completed, it may, because of the time he has not been working, take him some time to re-establish himself whereas the wife has recently obtained a new position earning a significant income. The wife is also somewhat younger than the husband. However I have also had regard to the fact that the husband having purchased the boat thereafter divested himself without either the knowledge or consent of the wife of 33 of the 64 shares in that boat which based on its current value represents approximately $81,000 of its value, or approximately seven per cent of the total value of the parties’ property (excluding superannuation), a not insignificant sum in the context of these proceedings.
It is a significant factor in this case that the wife, as I have found, has been put to unnecessary expense in order to establish that the husband and his sister’s evidence, the husband’s conduct throughout the proceedings, (including having to seek orders for the removal of the husband’s caveat and his reinstatement as a director) and the involvement of I in the case, were intended to mislead the Court and defeat and/or diminish what I have found to be the wife’s reasonable claims. In circumstances where the husband has failed to pay a previous order for costs any recompense by way of an order for costs the wife may seek to obtain, is, in all of the circumstances of this case, likely to be at best extremely difficult and at worst impossible. I have also had regard to the fact that the wife has chosen not to force the husband to realise his interest in the I Group from which, given the evidence of Dr Y, he may well be able to generate an income once these proceedings are concluded. I have taken these matters into account pursuant to s 75(2)(o) of the Act.
It is on that basis and weighing up all these factors that I consider a 2.5 per cent adjustment in the husband’s favour would be appropriate which is in real terms $29,257 and a differential of $58,514.

Conclusion

The outcome based upon my findings is an adjustment of the parties’ legal and equitable interests in property, including superannuation, which will see the wife retaining 60 per cent of their value, which is equivalent to $702,168 of their value. On that basis the husband would retain the balance with a value of $468,112.
On this basis the wife will retain the E Town property, which is registered in her name and has equity of $312,586, the balance of the proceeds of sale of the C Town property of $125,916 and any accrued interest and her superannuation entitlements of $142,901, a total of $581,403 which is approximately $120,765 less than I have found she should be entitled to. In circumstances where a Registrar of this Court has been required to sign a withdrawal of caveat as a result of the husband’s failure to comply with an order for its removal I propose to make an order that the Registrar sign such withdrawal of caveat in the event that the husband fails to provide that withdrawal within the time specified in the orders.
The husband submitted that it would not be just and equitable for the wife to retain all the real property and her superannuation leaving him with “a share of a worthless asset” however this disregards my findings in relation to both the ownership of the Suburb FF properties and their value. The husband controls the Mr Brand Family Trust and it follows the assets of that trust and has his interest in the yacht. Not only am I satisfied that the orders I propose are just and equitable but in circumstances where the wife does not propose either a sale of the husband’s interest in the yacht or the realisation of Mr Brand Family Trust’s interest in the Suburb FF properties, the value of the property he will retain is in any event more than I have found he should be entitled to.
Although the on the basis of the orders the wife seeks she will receive all of the balance of the proceeds of sale of the property at C Town and the husband will not receive any of those funds I am satisfied that this is in any event just and equitable where the wife has incurred significant legal costs and will need to meet those costs and will have little prospect of recovering those costs even if an order for costs were to be made in her favour.
I have found that I am satisfied that a division of the parties legal and equitable interests in property as to 60 per centum to the wife and 40 per centum to the husband is just and equitable. The orders proposed by the wife are in those circumstances significantly more generous to the husband. If there is any injustice it would be to the wife however that is her choice and I am mindful of the fact that there are many reasons which may have influenced her decision which are not directly relevant to the decision I must make. On this basis I propose to accede to the wife’s application and make the orders she seeks leaving the wife, based upon my findings, with $120,765 less than I have found she is entitled to.

Injunctive Relief

The wife also sought the following orders on the final day of the hearing:
1. [I Pty Ltd] as trustee for the [I Unit Trust] (formerly the 2^nd respondent in these proceedings) be and is hereby injuncted pursuant to s 90AE(2) from instituting any proceeding to recover any debt it alleges is owed to it by the wife herein [Ms Lake] either severally or jointly with the husband herein [Mr Brand].
2. [I Pty Ltd] as trustee for the [Brand Unit Trust] (formerly 2^nd respondent in these proceedings) be and is hereby injuncted from endeavouring to prove any debt allegedly due to it from the wife [Ms Lake] either severally or jointly with the husband herein [Mr Brand] in the event of receivership and/or liquidation.
Section 90AE(2) of the Act provides as follows:
(1) In proceedings under section 79, the court may make any of the following orders:
(a) an order directed to a creditor of the parties to the marriage to substitute one party for both parties in relation to the debt owed to the creditor;
(b) an order directed to a creditor of one party to a marriage to substitute the other party, or both parties, to the marriage for that party in relation to the debt owed to the creditor;
(c) an order directed to a creditor of the parties to the marriage that the parties be liable for a different proportion of the debt owed to the creditor than the proportion the parties are liable to before the order is made;
(d) an order directed to a director of a company or to a company to register a transfer of shares from one party to the marriage to the other party.
(2) In proceedings under section 79, the court may make any other order that:
(a) directs a third party to do a thing in relation to the property of a party to the marriage; or
(b) alters the rights, liabilities or property interests of a third party in relation to the marriage.
With the greatest respect to counsel for the wife in my view, in circumstances where I have found that I am not satisfied as to the existence of the alleged debt to I, the order I am being asked to make is not an order envisaged by s 90AE(2) of the Act. In my view the proposed order is an order pursuant to s 90AF of the Act which provides as follows:
(1) In proceedings under section 114, the court may:
(a) make an order restraining a person from repossessing property of a party to a marriage; or
(b) grant an injunction restraining a person from commencing legal proceedings against a party to a marriage.
(2) In proceedings under section 114, the court may make any other order, or grant any other injunction that
(a) directs a third party to do a thing in relation to the property of a party to the marriage; or
(b) alters the rights, liabilities or property interests of a third party in relation to the marriage.
(3) The court may only make an order or grant an injunction under subsection (1) or (2) if:
(a) the making of the order, or the granting of the injunction, is reasonably necessary, or reasonably appropriate and adapted, to effect a division of property between the parties to the marriage; and
(b) if the order or injunction concerns a debt of a party to the marriage--it is not foreseeable at the time that the order is made, or the injunction granted, that to make the order or grant the injunction would result in the debt not being paid in full; and
(c) the third party has been accorded procedural fairness in relation to the making of the order or injunction; and
(d) for an injunction or order under subsection 114(1)--the court is satisfied that, in all the circumstances, it is proper to make the order or grant the injunction; and
(e) for an injunction under subsection 114(3)--the court is satisfied that, in all the circumstances, it is just or convenient to grant the injunction; an
(f) the court is satisfied that the order or injunction takes into account the matters mentioned in subsection (4).
I am satisfied that there is a very real likelihood that the husband together with the other members of his family will either in their capacity as directors of I Pty Ltd or as is clear from the evidence of the husband and his sister in relation to the possibility of I Pty Ltd being liquidated, the liquidator might, acting on the families’ representations as to the existence of the alleged debt to I, pursue the wife for recovery of that loan. Although the wife has sought to be indemnified by the husband, he has made clear his intention to declare himself bankrupt leaving the wife as the only person from whom any debt might be recovered, and potentially frustrating the intent of and thwarting any orders this Court might make as between the husband and the wife pursuant to s 79 of the Act. Whilst I propose make orders that the husband indemnify the wife as she seeks in the event that the husband is declared bankrupt any such indemnities would provide little or no protection to the wife.
Not only has the husband made clear his intention to declare himself bankrupt but neither he nor his sister, who is currently a director of I and was a witness in the case, were prepared to consent to an order in the terms sought by the wife restraining I from instituting proceedings against the husband and/or the wife.
Although the husband’s sister when cross-examined said that the reason that I Pty Ltd had withdrawn from the proceedings was because it could not afford to continue, I am not satisfied that is the only reason. I am satisfied based upon the evidence of both the husband and his sister that there have been discussions between the husband, his sister and other family members about how the alleged debt might be recovered including both the husband declaring himself bankrupt and the company being liquidated, leaving any property the wife might retain by way of property settlement the only source of repayment of the alleged debt. Although the husband’s sister said that there had not been recent discussions I am not satisfied that that is the case.
I am satisfied that more likely than not the decision to withdraw from the proceedings was a tactical move designed to prevent the company being bound as a party to these proceedings by any findings this Court might make with respect to the alleged debt. This is consistent with the actions of the husband and his family generally and the way in which they have conducted these proceedings. This includes but is not limited to the following:
(a)the husband’s resignation as a director of I Pty Ltd and H, the transfer of his shares in that company to his mother in the face of the evidence of his ongoing involvement in the recovery of the alleged loan;
(b)the husband’s resignation as the Appointor/Guardian of the Mr Brand Family Trust;
(c)the removal of the Suburb FF properties from the balance sheet of the Brand Unit Trust and the declaration as to the ownership of the Suburb FF properties for the purposes of land tax; and
(d)the husband’s instructions to Mr AA with respect to the loan balance correction and the absence of any documentation in support thereof, albeit Mr AA’s reference to the existence of working documents.
Significantly in my view not only did I withdraw from the proceedings a matter of days before the hearing, but the only family member who gave evidence was the husband’s sister who had only been appointed as a director in December 2014 but more importantly as I have found had no direct knowledge and little or no understanding of either the contentious issues such as ownership of the Suburb FF properties and the alleged loans or the operations of the business generally.

I am satisfied that that is not a co-incidence and that although other family members more likely to be able to give evidence in relation to these issues had previously filed affidavits, in circumstances where I Pty Ltd had withdrawn from the proceedings and the husband did not seek to rely upon their evidence, they were not called upon to give evidence and more importantly were not exposed to cross-examination.
In particular neither the husband’s father nor mother, who one might think would have been the people best placed to give evidence with respect to their ownership of the Suburb FF properties, gave that evidence. Although it is true that reference was made to their advancing age, it is also the case that the husband’s sister in particular went out of her way to create the impression that her father was still very active in the business. This is also in circumstances where a matter of months before the final hearing commenced the husband’s parents threatened to intervene in the proceedings and seek a declaration if the wife did not acknowledge their ownership of the Suburb FF properties. Although the wife did not give them the acknowledgement they sought, they did not intervene.
I am satisfied that throughout these proceedings the husband and his family have gone to significant lengths to remove property, to which the wife may have had an entitlement or which might form part of the parties’ property for the purposes of these proceedings, from the reach of orders of this Court thereby defeating the wife’s claim.. In those circumstances and given their last minute withdrawal from the proceedings I accept that they may well intend to pursue other legal avenues in order to achieve the same result.
Section 90AF(3) sets out the conditions that must be satisfied before the court makes an order. They include that the court must be satisfied that the injunction is reasonably necessary or reasonably appropriate and adapted to effect a division of property between the parties to the marriage. I am satisfied that in this case it is reasonably necessary and appropriate in circumstance where if the order is not made and further proceedings were to be instituted by I Pty Ltd, and those proceedings were to be successful, the orders of this Court pursuant to s 79 of the Act would, in circumstances where the husband had declared himself bankrupt leaving the wife to meet any liability, be rendered nugatory, denuding the wife of the fruits of these proceedings. Even if proceedings instituted by I Pty Ltd did not succeed, the wife would be put to the no doubt significant cost and the stress of further proceedings in circumstances where I Pty Ltd was a party to these proceedings and, in my view for tactical reasons, chose to withdraw.
The court must also be satisfied that the third party against whom the orders are sought has been afforded procedural fairness. Counsel for the wife referred me to the decision of the High Court in ACN 078 272 867 Pty Limited (In liquidation) (Formerly Advance Finances Pty Limited) v Deputy Commissioner of Taxation; Binetter v Deputy Commissioner of Taxation [2011] HCA 46. Although this case was in relation to whether companies should have been given an opportunity to be heard before winding up orders were made, the Court referred to those companies having been given an opportunity to be heard and whether the opportunity to be heard could have made a difference to the outcome.
There is in my view no doubt in this case that I have been afforded procedural fairness. Although I Pty Ltd withdrew as a party to the proceedings before the final hearing commenced and before the wife indicated that she would be seeking an order in these terms, both the husband who was in Court throughout the hearing and his sister who was present in Court for the purposes of giving her evidence are directors of the company. Both the husband and his sister were asked in cross-examination about whether they would consent to an order in the terms sought by the wife and the husband’s sister was invited to discuss the matter with her father, who is also a director of I Pty Ltd. Although all three said they would not consent to the order they did not take any steps to oppose the order, and I am satisfied that they are familiar with the court processes and would have sought to intervene to oppose the order had they wanted to do so.
In circumstances where I am not satisfied on the balance of probabilities that there is a debt to I Pty Ltd but that I am satisfied that either the husband in his capacity as a director of the company and/or the other directors may well be considering taking proceedings in order to circumvent any orders this Court might make, I am satisfied that it is proper and both just and convenient to make the order the wife seeks. In my view there is no taxation or social security effect of the proposed order that I Pty Ltd must take into account pursuant to s 90AF(3)(f).
In all of the circumstances I propose to make the orders sought by the wife.

I certify that the preceding two-hundred and five (205) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Macmillan delivered 20 May 2016.

Associate:

Date: 20 May 2016

[2016] FamCA 375

20 May 2016

Key Legal Topics

Areas of Law

Family Law

Equity & Trusts

Legal Concepts

Injunction

Remedies

Fiduciary Duty

Costs

Appeal