Lund & Whittall (No 2)
[2025] FedCFamC1F 76
•14 February 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Lund & Whittall (No 2) [2025] FedCFamC1F 76
File number(s): DNC 518 of 2022 Judgment of: BERMAN J Date of judgment: 14 February 2025 Catchwords: FAMILY LAW – PROPERTY – Long relationship – Equal contributions – Where the husband agrees to most of the wife’s orders sought – Where the area of dispute that remains to whether a settlement sum is payable and the time of the transfer of a property – Where the balance sheet is mostly agreed – Consideration of the value of the husband’s interest in multiple business entities – Consideration of the single expert valuation report – Consideration of the unreliability of the husband’s evidence – Where the husband relies on the valuation report – Where the wife disputes the same – Where the Court finds the husband’s value in the entities is nil – Consideration of s 90SF factors – No adjustment – Orders. Legislation: Family Law Act 1975 (Cth) ss 90SF, 90SM Cases cited: Bevan & Bevan (2013) FLC 93-545
Commonwealth v Milledge (1953) 90 CLR 157
Lenehan & Lenehan (1987) FLC 91-814
Little & Little (1990) FLC 92-147
Lund & Whittall [2024] FedCFamC1F 271
Stanford & Stanford (2012) 247 CLR 108
Division: Division 1 First Instance Number of paragraphs: 153 Date of hearing: 26, 28, 29 August 2024 & 20-21 January 2025 Place: Heard in Darwin and Adelaide, delivered via MS Teams in Adelaide Counsel for the Applicant: Ms Farmer Solicitor for the Applicant: AFL Withnalls Lawyers Counsel for the Respondent: Mr Tredrea Solicitor for the Respondent: McQueens Solicitors ORDERS
DNC 518 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS LUND
Applicant
AND: MR WHITTALL
Respondent
ORDER MADE BY:
BERMAN J
DATE OF ORDER:
14 FEBRUARY 2025
UPON NOTING THAT this is an order to which s 90ST of the Family Law Act 1975 (Cth) applies for the purpose of finally determining all property matters between the parties and to avoid any further proceedings between them.
THE COURT ORDERS THAT:
1.Subject to compliance with paragraph 6 hereof, within twenty-four (24) months of this order (“the settlement date”), Mr Whittall (“the respondent”) and Ms Lund (“the applicant”) do all acts and sign all such documents as are necessary to enable the transfer to the applicant on the date, and in the manner as determined at the expense of the applicant, all of the respondent’s right, title and interest in the property situate at B Street, Suburb C, Region D more particularly described as Lot … Volume … Folio … (“the Suburb C property”).
2.To complete the transfer of the respondent’s interest in the Suburb C property, the following shall apply:
(a)Settlement will take place on the settlement date;
(b)The transfer documentation will be prepared by the applicant’s solicitor and delivered to the respondent (or his solicitor) for signature by the respondent, no later than fourteen (14) days prior to the settlement date;
(c)The parties will sign all necessary authorisations and directions (with such documents to be prepared by the applicant’s solicitor) to enable the mortgagee to release to the applicant’s solicitors any documents held by the mortgagee relating to the insurance policy in respect of the Suburb C property and deliver such authorisation to the mortgagee no later than ten (10) days prior to settlement.
3.Pending the transfer of the respondent’s interest in the Suburb C property to the applicant:
(a)The applicant shall have the sole right to occupy the Suburb C property and during such right of occupation, she shall be responsible for all rates and outgoings as they fall due up to and including the settlement date;
(b)The parties hold their respective interests in the Suburb C property upon trust pursuant to these orders; and
(c)Neither party shall encumber the Suburb C property without the consent in writing of the other party.
4.On settlement, the respondent will provide to the applicant and/or her solicitor the following:
(a)The Certificate of Title for the Suburb C property;
(b)All transfer documents duly signed;
(c)All keys, codes or devices in the possession or control of the respondent for all locks, gates, doors and security systems; and
(d)All records and documents relating to the purchase of the Suburb C property together with any improvements carried out since that acquisition, such documents being necessary to be retained for the calculation of the index cost base of the Suburb C property to assess any future capital gains tax liability that may be levied or applied.
5.The applicant shall from the settlement date indemnify the respondent against all claims, demands, proceedings or judgments in respect of liability pursuant to all rates, taxes and other outgoings pertaining to the Suburb C property of whatsoever nature and kind.
6.Up until the transfer of the Suburb C property pursuant to paragraph 1 of these orders, the following shall occur:
(a)The respondent shall pay all repayments to E Bank, dealing number …17 as and when they fall due up to the date of the discharge of the mortgage PROVIDED THAT if the respondent defaults in the payment of any mortgage payment and the default shall extend for more than fourteen (14) days then the applicant is entitled to bring enforcement proceedings seeking that the outstanding mortgage is to be discharged forthwith;
(b)The parties shall sign an authority and any other documents required by the mortgagee to release the mortgage; and
(c)The applicant will arrange for the mortgagee to attend on the settlement date for the purpose of delivery of title, executed release of mortgage and other required documentation.
7.The applicant shall retain the following assets, liabilities and investments to the exclusion of the respondent:
(a)All funds standing to the applicant’s credit in E Bank account …32;
(b)Household contents currently held in the applicant’s possession;
(c)Motor Vehicle 1;
(d)All superannuation member entitlements held in Super Fund 1, member number …; and
(e)All superannuation member entitlements held in Super Fund 2, member number ….
8.The respondent shall retain the following assets, liabilities and investments to the exclusion of the applicant:
(a)All funds standing to the respondent’s credit in E Bank account #...09;
(b)All shareholdings and interest in business;
(c)Household contents currently held in the respondent’s possession; and
(d)All superannuation member entitlements held in Super Fund 1.
9.Subject to any agreement reached between the parties and DD School, they are each jointly and severely liable for the outstanding school fees currently in the sum of $14,720.
10.Within fourteen (14) days of the date of these orders the respondent will do all things necessary to transfer to the applicant all of the right, title and interest in Motor Vehicle 1 with the applicant to be declared the sole legal and beneficial owner of the motor vehicle.
11.The applicant and respondent each keep the other indemnified from and against all claims, actions, suits, and demands arising out of or in connection with the following liabilities:
(a)All taxation liability, actions, claims, or demands by the Commissioner of Taxation, in relation to any contingent, pending or outstanding taxation liability (including but not limited to income tax, capital gains tax, goods and services tax or fringe benefit tax) that the applicant and respondent may personally incur or incur via any entity which they have an interest or control;
(b)All credit cards;
(c)All home loans;
(d)All personal loans; and
(e)All individual liabilities.
12.Each party shall do all acts and things reasonably required by the other including:
(a)the signing or execution of all necessary documents to give effect to the provisions of this order within fourteen (14) days of being requested to do so;
(b)if either party refuses or neglects to sign or execute and return a document within fourteen (14) days of a written request to do so then a Judicial Registrar of Senior Judicial Registrar of this Honourable Court is hereby appointed under s 106A of the Family Law Act 1975 (Cth) to sign and execute such documents on behalf of that party upon lodgement of such document and the filing of an Affidavit of a solicitor on behalf of the requested party as to the said neglect or refusal.
13.Pending the transfer of the Suburb C property pursuant to paragraph 1 of these orders, the respondent is restrained both in his individual capacity and as a Director from the following:
(a)Doing any act or thing to alter the entitlement to the office charges as income of F Pty Ltd or the receipt of or entitlement by F Pty Ltd to rental income;
(b)Altering and directing the income of F Pty Ltd to be paid or received by any bank account other than the ANZ Account BSB … account …94;
(c)Causing or permitting the transfer or diminishing or reducing the assets held, or further encumbering any assets by F Pty Ltd without order of this Court;
(d)Causing or permitting or allowing the transfer of any funds from the said ANZ Account other than to meet expenses in the ordinary cause of the business of F Pty Ltd;
(e)Transferring or otherwise disposing of or diminishing his shareholdings in any of the entities comprising the T Group;
(f)Resigning from any of his directorship of any of the entities comprising the T Group;
(g)Transferring or otherwise diminishing or disposing of his registered interest in 1 J Street, Suburb K, Region D; and
(h)Taking any action resulting in the loan facilities comprising ANZ Loan #...38 and ANZ Loan #...46 (or any replacement loan facilities) exceeding a liability balance of $3,700,000 EXCEPT to the extent that any such additional liability be solely utilised in compliance with the respondent’s obligation in paragraphs 1 and 6.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
BERMAN J
GLOSSARY OF TERMS
·Ms Lund (“the applicant")
·Mr Whittall (“the respondent”)
·B Street, Suburb C, Region D (“the Suburb C property”)
·1 J Street, Suburb K, Region D (“1 J Street”)
·2 J Street, Suburb K, Region D (“2 J Street”)
·H Street, Suburb G, Region D (“the Suburb G property”)
·F Pty Ltd (“F Pty Ltd”). F Pty Ltd was incorporated in 2003. The entity holds interest in a number of properties and receives rental income. The respondent and Mr L (“Mr L”) are both Directors and each beneficially hold 1000 ordinary shares in the company.
·T Group Pty Ltd (“T Group”). This entity functions as a holding company and holds shares in a number of other connected or related entities. The company was incorporated in 2014. The respondent and Mr L are both Directors. Of the 2,000 issued shares, 1,000 are held by Y Pty Ltd (“Y Pty Ltd”) and the other 1,000 held by EE Pty Ltd (“EE Pty Ltd”).
·O Pty Ltd (“O Pty Ltd”). The entity operates a venue known as “GG Venue”. The company was incorporated in 2013 with the respondent and Mr FF (“Mr FF”) are Directors. 3,000 ordinary $1 shares have been issued. 1,000 shares are held by T Group and 2,000 shares are held beneficially by Mr FF.
·P Pty Ltd (“P Pty Ltd”). The entity operates a venue known as “P Venue”. The company was incorporated in 2006. The respondent and Mr L are Directors with T Group holding all of the 100 ordinary issued shares.
·Q Pty Ltd (“Q Pty Ltd”). The entity operates a venue known as “HH Venue” from a premises leased from a third party. The company was incorporated in 2008. The respondent and Mr L are Directors. T Group holds all of the 2,000 issued shares.
·R Pty Ltd (“R Pty Ltd”). This entity operates a venue known as “JJ Venue” and an associated function centre. The company was incorporated in 2014. The respondent and Mr KK (“Mr KK”) are the Directors. 3,000 shares have been issued of which it is reported that 1,000 are held by T Group and 2,000 are held beneficially by Mr KK. It is agreed that Mr KK disposed of his shares in 2023 for which he was paid $240,000. There is uncertainty as to who or what entity is the transferee. For the purposes of the proceedings, it is assumed that Milestone hold all of the shares.
·S Pty Ltd (“S Pty Ltd”). This entity owns property at LL Street, Suburb MM (“the LL Street property”) which operates a business known as “NN Business”. The company was incorporated in 2014. The respondent together with Mr L and Mr OO (“Mr OO”) are the Directors. Of the 1,000 issued shares, 750 are held by Mr L and 250 shares are held by Mr PP (“Mr PP”).
·Y Pty Ltd (“Y Pty Ltd”). This entity is the trustee of the Whittall Family Trust (“WFT”). The trustee company was incorporated in 2008. The respondent is the sole Director and holds the single issued share beneficially.
·U Pty Ltd (“U Pty Ltd”). The company was incorporated in 2011 but is now in liquidation consequent of the appointment of a liquidator in mid-2022. Whilst the respondent was not a Director of U Pty Ltd, of the 3,000 issued shares, 1,000 shares were held by T Group.
·V Pty Ltd (“V Pty Ltd”). This entity owned a property at QQ Street, Suburb RR (“the Suburb RR property”) which was sold in mid-2021. The company was incorporated in 2013. The respondent, Mr L and Mr SS (“Mr SS”) are the Directors. The respondent, Mr L and Mr SS each hold beneficially 1,000 shares.
·W Pty Ltd. This entity operated a hospitality outlet known as “TT Venue” which ceased trading in 2024. The company was incorporated in 2010. The respondent and Mr L are both Directors. All of the 2,000 shares issued are held by T Group.
INTRODUCTION
The parties are unable to reach complete agreement in relation to property settlement and division.
The applicant relies upon the Further Amended Initiating Application filed 8 November 2024. During the course of final submissions, agreement was reached between the parties as to orders that put in place injunctive relief intended to restrain the respondent from voluntarily relinquishing any position as an office holder in the various entities as described and from divesting himself of any shareholding held by him or from taking any action which would further encumber any company in which he has an involvement or interest.
The orders sought by the applicant are summarised as follows:
(1)Within sixty (60) days, the respondent transfer his interest in the Suburb C property to the applicant.
(2)The respondent cause the mortgage secured over the Suburb C property to be discharged.
(3)Until the discharge of the mortgage, the respondent shall pay all repayments to E Bank in relation to “dealing number […]17” with the acknowledgement of the respondent that the applicant has the right to occupy the Suburb C property until the discharge of the mortgage and settlement.
(4)That the applicant retain the following:
(a)All funds standing to the applicant’s credit;
(b)Household contents in the applicant’s possession;
(c)Her superannuation entitlement in Super Fund 3, member number …;
(d)Her superannuation entitlement in Super Fund 1, member number …; and
(e)Her superannuation entitlement with Super Fund 2, member number ….
(5)That the respondent retain the following:
(a)All funds standing to his credit;
(b)The respondent’s cryptocurrency account;
(c)Household contents currently held by the respondent;
(d)His superannuation entitlement with Super Fund 1;
(e)The interest that the respondent holds in the group of companies.
(6)The respondent transfer to the applicant Motor Vehicle 1.
(7)Within sixty (60) days, the respondent shall pay to the applicant the sum of $500,000.
(8)In the event of default either as to the discharge of the mortgage or the payment of the settlement sum, the respondent is required to issue a demand to specify entities for repayment in full to F Pty Ltd of all loans owed by each of them.
(9)The respondent is restrained both in his individual capacity and as a director from:
(a)Doing any act or thing to alter the entitlement to the office charges as income of F Pty Ltd or the receipt of or entitlement by F Pty Ltd to rental income.
(b)Altering and directing the income of F Pty Ltd to be paid or received by any bank account other than the ANZ Account BSB… account …94.
(c)Causing or permitting the transfer or diminishing or reducing the assets held, or further encumbering any assets by F Pty Ltd without order of this Court.
(d)Causing or permitting or allowing the transfer of any funds from the said ANZ Account other than to meet expenses in the ordinary cause of the business of F Pty Ltd.
(10)Each of the parties keep the other indemnified from and against all claims, actions, suits, or demands arising out of or in connection with taxation or other liabilities.
(11)In the event of a default or failure to comply with any of the provisions of the orders sought then subject to the provision of a Notice of Demand the party seeking to enforce a relevant provision is able to take enforcement proceedings fourteen (14) days after the notice given.
The applicant sought to join F Pty Ltd as a second respondent and Mr L as a third respondent. The attempt at joinder was opposed by the respondent and Mr L. The applicant was unsuccessful in respect of the joinder applications and accordingly, the orders sought by the applicant against the proposed second and third respondents are not in issue.
By Response to Further Amended Initiating Application filed 5 December 2024, the respondent consents to the transfer of his interest in the Suburb C property to the applicant. However, he seeks that the time for the transfer, which is consequent upon the discharge of the mortgage to E Bank, be extended from 60 days as sought by the applicant to 24 months, as now sought by the respondent. Other than that amendment, the respondent consents to orders sought by the applicant in paragraphs 1 (subject to the proposed settlement date) paragraphs 2 to 8 inclusive, paragraphs 12 to 16 inclusive and paragraph 18.
In summary, the respondent does not agree that there should be the payment of any settlement sum and whilst proposed orders 9 to 11 are opposed, the respondent now agrees to injunctive relief until the discharge of the mortgage and the transfer of his interest to the applicant. The respondent does not agree that he should be responsible for the applicant’s costs of and incidental to the proceedings.
The extent of agreement between the parties is such that the area of contention that remains is of narrow compass and confined to the payment, if any, of a settlement sum and the time for transfer of the Suburb C property.
BACKGROUND
The applicant was born in 1968 and is 56 years old. The respondent was born in 1972 and is 53 years old. The parties commenced their relationship in 1999 and after a period of 21 years of cohabitation, they separated in June 2020.
There are two children of the relationship namely, Ms UU born (“Ms UU”) 2004 and X born 2009 (“X”).
At the time of cohabitation in 1999 the applicant was employed as a full-time healthcare professional with the respondent a self-employed professional.
In 2010, the applicant ceased employment as a healthcare professional and took over the payroll, bookkeeping and administrative services for the various business ventures and entities undertaken by the respondent and Mr L.
Notwithstanding that the parties separated in 2020, the applicant continued working for the respondent and Mr L until January 2022. The applicant now holds an administrative position for a City M based employer.
At the commencement of cohabitation, the applicant held an interest in some furniture and personal effects, a motor vehicle and an accumulated superannuation entitlement with Super Fund 2. The applicant is uncertain as to the extent of property held by the respondent but she contends that it included an interest in a business known as “HH Venue”, personal effects, a motor vehicle and minimal savings.
The applicant asserts that both she and the respondent undertook full time work and employment other than some relatively short periods of maternity leave.
The parties never held a joint bank account. It appears that there was an agreement in place such that the respondent paid for the expenses, loan obligations and maintenance of properties held in particular, B Street, whereas the applicant paid for other household expenses including health care, childcare, children’s education costs, groceries and general living expenses.
Given the agreement between the parties, it appears uncontroversial that the holistic consideration of their separate contributions both financial and non-financial should be treated as equal.
The focus of the proceedings is therefore to determine and settle upon a balance sheet which sets out the assets and liabilities of the parties and the factors, if any, pursuant to s 90SF(3) of the Family Law Act 1975 (Cth) (“the Act”) are given weight.
In broad terms, whilst the applicant submits that there should be an adjustment of 20 per cent in her favour on account of s 90SF(3) factors, the respondent does not consider that there should be any adjustment in favour of either of the parties. Irrespective of that outcome, the respondent considers that even on the basis of the group of companies having a cumulative value of nil, the applicant should retain the Suburb C property unencumbered together with her personal effects and in particular, the entirety of her substantial superannuation entitlements.
It was apparent from submissions made by the respondent’s counsel that the respondent had been advised that the orders sought by him resulted in an overly generous outcome to the applicant.
History of the proceedings
The applicant commenced the proceedings by Initiating Application on 4 November 2022. Other than the further Amended Initiating Applications filed by the applicant wherein she sought to join F Pty Ltd as second respondent and Mr L as third respondent, the orders sought by her in the first Initiating Application are not dissimilar to the current orders sought in the Further Amended Initiating Application filed 8 November 2024.
In the first Initiating Application, the determination of a settlement sum was dependent upon valuations being prepared. However, there was also a notation that there should be “an equal division of the combined net value of superannuation and non-superannuation assets of the parties”.
By his Response to Initiating Application filed 21 February 2023, the respondent initially sought orders in terms of the applicant’s Initiating Application other than as to the time required for him to discharge the mortgage secured over the Suburb C property as a precondition to the transfer of his interest to the applicant.
The parties attended a Conciliation Conference on 31 October 2023 but were unsuccessful in reaching a resolution.
The Amended Response to Initiating Application filed 5 December 2024 maintains a consistent position promoted by the respondent of there being broad agreement with the orders sought by the applicant save as to timing of the transfer of the Suburb C property. Paragraph 1A of the Amended Response seeks that the respondent have 24 months to enable the transfer of the Suburb C property to the applicant.
By Application in a Proceeding sealed 1 March 2024, the applicant sought the following orders:
2.Pursuant to Rule 3.03(1)(a) and (b) [F Pty Ltd] be joined as a party to these proceedings and herein after referred to as the Second Respondent; and
3.Pursuant to Rule 3.03(1)(a) and (b) [Mr L] be joined as a party to these proceedings and herein after referred to as the Third Respondent.
For reasons set out in Lund & Whittall [2024] FedCFamC1F 271, the Application in a Proceeding was dismissed.
I highlight that whilst the Application in a Proceeding for the joinder of F Pty Ltd and Mr L was dismissed, the judgment sets out a range of alternative considerations pursuant to s 90AE of the Act and ss 461 and 462 of the Corporations Act 2001 (Cth) and a consideration as to the potential for an Application for Partition and Sale pursuant to Region D property legislation.
By Application in a Proceeding filed 5 September 2024, the applicant again sought the joinder of F Pty Ltd and Mr L together with injunctive relief against the proposed second and third parties. An order was also sought that Mr L and the respondent in their capacity as Directors of F Pty Ltd, demand from S Pty Ltd a return of all funds transferred from all bank accounts of F Pty Ltd to S Pty Ltd as and from 1 July 2023.
By order made 24 October 2024, leave was given for the applicant to file a Further Further Amended Initiating Application on or before 4.00 pm on 8 November 2024.
On 6 December 2024, the Application in a Proceeding seeking the joinder of F Pty Ltd and Mr L was dismissed as was the application for leave to rely upon a Further Amended Initiating Application sealed 8 November 2024.
The trial commenced on 26 August 2024 and was adjourned part-heard to 20 January 2025.
The reason for the adjournment of the trial was to enable Mr N to prepare a second valuation report in respect of the group of entities in circumstances where the relevant financial statements would be updated to include the 2024 financial year.
Following production of Mr N’s updated valuation report, cross-examination of him was undertaken together with the parties’ final submissions and judgment was reserved on 21 January 2025.
DOCUMENTS RELIED UPON
The applicant relies upon the following documents:-
(1)Further Amended Initiating Application filed 8 November 2024.
(2)Trial affidavit of the applicant filed 10 July 2024.
(3)Financial Statement filed 28 June 2024.
(4)Affidavit of Mr VV (annexing property valuation report dated 14 April 2023) filed 6 June 2024.
(5)Affidavit of Mr WW (annexing property valuation report dated 7 July 2023) filed 4 June 2024.
(6)Affidavit of Ms XX filed 2 July 2024.
(7)Outline of Case document filed 26 August 2024.
(8)Balance Sheet tendered on 25 January 2025.
The respondent relies upon the following documents:-
(1)Response to Amended Initiating Application filed 23 February 2024.
(2)Trial affidavit of respondent filed 23 August 2024.
(3)Financial Statement filed 23 August 2024.
The parties jointly relied upon the valuation reports of Mr N (“Mr N”) dated 22 November 2023 (“the first report”) and 24 October 2024 (“the second report”).
IS IT JUST AND EQUITABLE TO PROCEED?
In Stanford & Stanford (2012) 247 CLR 108 (“Stanford”) the majority held:
35.It will be recalled that section 79(2) provides that “[t]he court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order”. Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.
36.The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds. …
(Footnotes omitted)
In Bevan & Bevan (2013) FLC 93-545 at [73], the Full Court considered that the decision of Stanford (supra) could be reduced to “three fundamental propositions”:
1.Determination of a just and equitable outcome of an Application for property settlement begins with the identification of existing property interest (as determined by common law and equity);
2.The discretion conferred by the statute must be exercised in accordance with legal principles and must not proceed on an assumption that the parties’ interests in the property are or should be different from those determined by common law and equity; and
3.A determination that a party has a right to a division of property fixed by reference only to the matter in s 79(4), and without separate consideration of s 79(2), would erroneously conflate what are distinct statutory requirements.
The parties both consider that it is just and equitable for there to be an order of property settlement made pursuant to s 90SM of the Act and that the legal and equitable interests in their property will need to be the subject of adjustment.
The parties have each provided a balance sheet setting out the legal and equitable interests relevant to the proceedings. The balance sheets are relevant given that they provide an indication of the substantial areas of agreement and highlight the significant area of disagreement namely, the respondent’s interest in F Pty Ltd recorded by the applicant as $1,131,670 whereas the respondent adopts the value as determined by Mr N as a net deficit of $10,513.
LEGAL COSTS OF THE PARTIES
The parties’ Cost Statements are comprised in exhibit “1” and “13”.
The applicant’s costs
As at 17 January 2025, the applicant’s total fees were in the sum of $226,583 (inclusive of GST). It appears that of the total costs incurred, the applicant has only paid $3,120.
The respondent’s costs
As at 20 January 2025, the total costs incurred by the respondent are in the sum of $183,862.55. Of that sum, the respondent has paid professional costs and disbursements in the sum of $74,000 and counsel fees in the sum of $22,572.55.
The parties have agreed that they will each pay one half of the total valuation fees in the sum of $43,290. Of the $24,935 charged by Mr N, the sum of $2,400 is outstanding.
The respondent sets out that the source of the funds used to pay costs, disbursements and counsel fees have been from “entities identified in the company valuation report prepared by [Mr N]” and are purported to be categorised as borrowings by the respondent.
Having regard to the balance sheets relied upon by each of the parties (exhibit “14”), neither party seeks to add back the small amount paid by the applicant and the more significant sum paid by the respondent via borrowings from various entities comprising the group.
I propose to fall in with the agreed position of the parties as to the treatment of their legal fees and as such, they will not be added back into the table of assets and liabilities.
JOINT TABLE OF ASSETS
The assets and liabilities of the parties are as follows:-
Assets
DESCRIPTION OWNER VALUE B Street, Suburb C Joint $1,000,000 Motor Vehicle 1 Applicant $17,500 Crypto currency Respondent $1,033 TOTAL $1,018,533 Liabilities
DESCRIPTION OWNER VALUE YY Finance Applicant $3,500 DD School fees Joint $14,720 Mortgage over B Street, Suburb C Joint $393,308 TOTAL $411,528 Superannuation
DESCRIPTION OWNER VALUE Super Fund 2 Applicant $724,669 Super Fund 1 Respondent $248,842 Super Fund 1 Applicant $91,411 TOTAL $1,064,922
Whilst the applicant seeks to bring to account the superannuation entitlements of each of the parties to be treated as “notional assets”, given the ages of the parties and their inability to satisfy a condition of release for the foreseeable future, I do not consider that a single pool approach is appropriate and as such, separate considerations should apply to the superannuation and the non-superannuation assets.
As has been discussed, the position adopted by the respondent is that he does not seek that the superannuation interests of the parties be adjusted to equality or that there be any other adjustment and moreover, he does not seek that the significant difference in the superannuation entitlements of the parties be considered as a factor pursuant to s 90SF(3) of the Act in terms of the adjustment of property as between the parties.
The remaining areas that require separate consideration are as follows:
(1)The treatment of the property at 1 J Street;
(2)The value to be ascribed to the business interests of the respondent; and
(3)The assertion of the applicant that the respondent’s 50 per cent interest in F Pty Ltd should be brought to account at $1,131,670.
1 J STREET
The respondent and Mr L hold their separate interests as tenants in common in the property situate at 1 J Street.
The property was purchased in 2009 for $250,000 with a mortgage to the Commonwealth Bank which was discharged and refinanced with E Bank in 2017.
The parties agree that 1 J Street should be brought to account at a value of $2,200,000. The contention of the respondent is that at present there is a liability of $2,000,075.
Exhibit “12” comprises a letter of offer to the directors of F Pty Ltd dated 31 July 2023 in respect of a loan facility in the sum of $3,500,000 to support the refinance of debts originally provided to purchase 2 J Street and Z Street. The second letter of offer dated 27 July 2022 is directed to the respondent and Mr L. The loan facility offered is in the sum of $2,200,000 for the purpose of supporting the refinance of debts originally provided for the purchase of 1 J Street.
As will be discussed, there has been some confusion or uncertainty as to whether 1 J Street should be treated as a personal asset of the respondent as to his one-half interest as a tenant in common or whether the property has been subsumed into the assets of F Pty Ltd.
Mr N initially included 1 J Street as an asset of F Pty Ltd. Upon receipt of the report, the respondent forwarded correspondence to Mr N in February 2024 advising that he considered 1 J Street was owned by himself and Mr L as tenants in common and not an asset of F Pty Ltd. Accordingly, Mr N made the necessary adjustment in terms of his second report dated 24 October 2024.
However, in evidence, the respondent conceded that 1 J Street was treated as an asset of F Pty Ltd.[1] The respondent also agreed that all expenses associated with 1 J Street were paid for through F Pty Ltd.
[1] Transcript 27 August 2024, p. 90 line. 26
It is likely that the financial statements and books of account for F Pty Ltd do not reflect any adjustment between the respondent and the company as to expenses paid for and on behalf of the respondent and Mr L in respect of 1 J Street.
Given the letter of offer as contained in exhibit “12”, I consider that the correct treatment for 1 J Street is not as the respondent described in his evidence but rather as the personal property of the respondent and Mr L.
The issue is however, made more complex by the reference in the letter of offer to F Pty Ltd that a term of the loan facility offered by the ANZ Bank is that 1 J Street is to be considered as collateral security for the loan facility of $3.5 million dollars.
It is agreed that following the sale of Z Street, the outstanding loan facility was reduced to $1.9 million dollars. However, it is immediately apparent that there is little residual equity in 1 J Street when the underlying loan is brought to account.
In evidence, Mr N did not consider that it was pivotal to his valuation to determine whether 1 J Street was to be treated as an asset of F Pty Ltd or of the respondent and Mr L as tenants in common.
Whilst the treatment by the respondent and Mr L of 1 J Street is but one of a myriad of instances and examples of less than transparent business practices, I accept the evidence of Mr N that even if 1 J Street is included as an asset of F Pty Ltd, any increase in the asset based value of that entity is offset by the respondent’s one half share of the outstanding mortgage loan liability.
VALUATION OF THE RESPONDENT’S INTEREST IN THE GROUP OF ENTITIES
In Mr N’s second valuation report, he summarises his valuation of the respondent’s interest in the group of entities as follows:
14.18Subject to the following, I have valued the interest of the Husband in the [Whittall/Lund] Group net of loan balances as at 30 June 2024, to be a deficiency of ($83,441) calculated as follows:
•[F Pty Ltd] – 50% $0
•[O Pty Ltd] – 16.67% $72,928
•[P Pty Ltd] – 50% $0
•[Q Pty Ltd] – 50% $0
•[R Pty Ltd] – 50% $0
•[T Group Pty Ltd] – 50% (Bypassed) $0
•[V Pty Ltd] – 33% $0
•[W Pty Ltd] – 50% $0
•[Y Pty Ltd] – 100% (Bypassed) $0
•Less: Net Loan Liability due by the Husband ($156,369)
•TOTAL 30 June 2024 – Net Deficiency ($83,441)
Mr N conceded that he was in error in recording the respondent’s interest in O Pty Ltd at 16.67 per cent whereas it should be reflected by a holding of 33 per cent. On that basis, a further $72,928 is added to the respondent’s interest in O Pty Ltd which results in a net deficit of $10,513.
The respondent does not hold a direct or indirect interest in S Pty Ltd however, the applicant considers that the conduct of the respondent and Mr L strongly suggests that he either retains an interest or at the very least some level of involvement.
Mr N valued S Pty Ltd as at 30 June 2024 taking into account a land and business valuation as at April 2024. Mr N did not consider that S Pty Ltd was sufficiently profitably such that the valuation methodology to be utilised should be a capitalisation of future maintainable earnings. As such, an asset-based valuation was utilised which resulted in a deficit of $289,638.
By reference to the applicant’s balance sheet tendered at trial, she considered that the respondent’s interest in R Pty Ltd was $360,000 and his interest in F Pty Ltd was $1,131,670.
R Pty Ltd
R Pty Ltd is an entity that operates a business known as “JJ Venue”.
The valuation methodology adopted by Mr N was the capitalisation of estimated future maintainable earnings which would value the business and determine whether there is Goodwill.
Mr N had received financial statements covering the period 2019 to 2024. A financial summary of profit and loss is set out at paragraph 6.9 of the second Mr N report. For the 2022 to 2024 financial years, R Pty Ltd made a substantial loss prompting Mr N to express the opinion that the business was not generating a maintainable surplus. There was nothing to suggest that in the short term the profitability of the business will improve. In the absence of any Goodwill, Mr N properly considered the adjusted net tangible assets of R Pty Ltd as an appropriate valuation methodology.
I do not ignore that Mr N identified significant irregularities in the manner in which R Pty Ltd kept its financial records and recorded significant transactions.
When considering the 2022 financial statements, Mr N noted that function deposits amounted to $240,100. The respondent advised Mr N that this figure could not be correct and the amount of prepayments received for functions would never be this sum. There was no independent information to adjust the balance however Mr N reduced the liability from $240,100 to $75,564.
To the extent that the inaccuracy was a significant and manifest error, there appears to be agreement by the respondent. However, the treatment by Mr N in order to reconcile the concern of the respondent had the effect of increasing the value of the company by $164,536. Whilst a taxation liability is likely to arise from this and although it is an example of poor bookkeeping and potentially unreliable financial statements, the error did not prejudice the applicant in terms of the potential for it to enhance the value of R Pty Ltd.
Similarly, at paragraphs 6.37 to 6.40 inclusive, Mr N noted further anomalies which were unable to be readily reconciled.
At paragraph 6.61 of the first report, Mr N noted the following:
The shares in [R Pty Ltd] are reported as being held as to 2/3rds by [Mr KK] and 1/3rd by [T Group Pty Ltd]. The [Whittall] Group holds 50% interest in [T Group Pty Ltd] and accordingly, the notional percentage interest to be reflected in the [Whittall] property pool is 16.67%.
The shares held by Mr KK were acquired in or about 2022. It is apparent that the shares have not been transferred and may well have reverted to the T Group. It was a condition precedent of the finance arrangements that Mr KK resign as a Director and relinquish his shareholder.
The interest of Mr N was piqued when he asked for an explanation from the respondent as to why Mr KK was paid $240,000 for his two third interest. The respondent explained that “there was no science to the calculation and it had largely be determined by [Mr KK] and the accountant”.[2]
[2] Mr N valuation report dated 22 November 2023 (“the first report”) at paragraph 6.66.
Mr N was of the view that the transaction involving Mr KK could not be explained as being on par with any rational commercial decision and as such should not be brought to account as a financial indicator of value.
In evidence, the respondent still remained unable to explain the basis for the transaction, but his evidence left open speculation that there may have been more to the transaction than Mr KK and his accountant promoting sale price for his shares that bore no connection to the financial performance of R Pty Ltd nor its underlying asset base.
A careful consideration of the adjusted assets and liabilities at paragraph 6.37 of the second Mr N report provides no basis to reject Mr N’s valuation of R Pty Ltd at $0.
F Pty Ltd
Paragraph 10 of the applicant’s balance sheet seeks to simplify the valuation of the respondent’s interest in F Pty Ltd Investments by bringing to account the value of 2 J Street, H Street and 1 J Street together with the assertion that the respondent should be attributed a 50 per cent interest in the ZZ Family Unit Trust.
If the two ANZ loans namely, the loan accounts ending #...38 and #...46 are brought to account at $3,700,000, the net value is $2,263,340 half of which represents the respondent’s interest being $1,131,670.
The ZZ Family Unit Trust
This entity owns the property at AB Street, City M (“the AB Street property”) which is tenanted by the business, ‘P Venue’. The AB Street property was valued at $1,300,000 as at 20 April 2023 with a liability to E Bank of $545,250 and beneficiary loans to Mr L and F Pty Ltd in the sum of $115,652.
Given that F Pty Ltd holds 50 per cent of the units in the ZZ Family Trust, Mr N brings to account an adjusted value of $423,340.
I have given careful consideration to the adjusted balance sheet as at June 2024 that appears at paragraph 11.41 of the second Mr N report. In particular, I accept the validity of the adjustments made by Mr N in respect of the book value as appears in the financial statements resulting in the adjusted balance sheet.
The adjustments made by Mr N bring to account the interest of F Pty Ltd in the ZZ Family Unit Trust at $423,340.
There is no reason to find fault with the value attributed to F Pty Ltd by Mr N of $0.
In doing so, I do not ignore the observations of Mr N that some intragroup loan balances do not reconcile and at paragraph 14.17 of the second Mr N report, he makes remarks that “as a general comment, the group financial statements are deficient in a couple of respects and my report is qualified accordingly”.
In evidence, whilst Mr N conceded a significant level of irregularity in bookkeeping and proper recording of financial transactions, his evidence was to have regard to the purpose of his instructions namely, to value the respondent’s interests in the group of entities. Mr N was satisfied that a “look through approach” highlighted that the poor bookkeeping was a reflection of decisions made by Mr L and the respondent to “rob Peter to pay Paul”.
The respondent had little regard for what might be considered the boundaries of each of the separate entities but rather considered that if money was needed to prop up one entity or to pay a significant liability which was beyond the capacity of the entity to pay, then financial resources could be used from other entities.
What is apparent is that there has been a deterioration in the financial security and viability of the business interests of the respondent. Properties have been sold and loan facilities have been sought and obtained on conditions that may well be considered onerous. Whilst not raised in the proceedings, it is noted that the two ANZ loan facilities will need to be renewed or repaid in mid-2025.
Mr N was of the view that even if some of the highlighted transactions were reversed, an adjusted result was not likely to adversely impact upon his opinion that there was little or no value to the cumulative values attached to each of the entities and therefore no value to the respondent.
I consider that whilst the valuation approach pressed on behalf of the applicant is superficially attractive, it is not supported by Mr N.
I do not cavil with the submissions made on behalf of the applicant that the bookkeeping and transparency of the financial transactions involving the respondent and other associates involved in the Whittall group, at best could be described as chaotic and at worst is evidence of deceptive conduct, rendering the information provided to Mr N as unreliable.
The applicant seeks that I put aside the valuation evidence as presented by Mr N and adopt what might be considered a simple valuation approach where the real estate assets of F Pty Ltd are brought to account and the secured liabilities are then deducted.
It is that process that is adopted by the applicant in her balance sheet wherein she attributes the sum of $1,131,670 to the respondent’s 50 per cent interest in F Pty Ltd.
I consider the approach flawed. It ignores that whatever may be the reasonably held view of the applicant that if Mr L was a party to the proceedings the Court may find his evidence similar to that of the applicant and therefore unreliable. However, the evidence does not allow such a leap to be made.
I am obliged to consider the substantive interests of a third party. Mr L has significant loan accounts in his favour. It cannot be assumed that Mr L would necessarily fall in with each and every decision that might be made by the applicant noting that he does not have control of F Pty Ltd and neither his own determination nor any order which he may be subject could bind Mr L. To the extent that Mr L appeared on his own behalf in answer to the interim proceedings seeking joinder, he made it clear that he did not wish to participate in the proceedings and had no interest in doing so. Any taxation liability which might arise has not been considered.
The position adopted by the applicant raises the question as to whether the valuation reports of Mr N are of assistance.
The usual circumstances in terms of valuation of property is that either the parties will reach agreement or a high level of confidence can be placed on the evidence of a single expert or where complexity arises, a determination as to the preferred evidence of separate adversarial experts.
Where there is a dispute as to valuation, the Court cannot ignore the issue in dispute and there must be a determination.
The Full Court in Lenehan & Lenehan (1987) FLC 91-814 said at p 76,142:
A trial judge, as part of his ultimate responsibility under Section 79 or otherwise, is normally required to determine a number of issues. Some of those issues may properly attract the evidence of expert witnesses. In appropriate circumstances their opinions are admissible to assist in the determination of such an issue. It is the responsibility of the trial judge to take into account the pinions of such witnesses; however the ultimate duty of the judge is to determine the issue on the whole of the material before him including such opinions. The expert evidence is called to enable the judge to form his own independent judgment on the matter by the application of the appropriate principles.
The obligation on a trial judge was further considered by the High Court in Commonwealth v Milledge (1953) 90 CLR 157 which said the approach should be:
…by a commonsense endeavour, after consideration of all the material before the Court, to fix a sum satisfactory to the mind of the court as representing the value contained in the land…
If the evidence supports a finding that the valuation methodology adopted Mr N is “fundamentally flawed” then the expert evidence must not be accepted.
The Full Court in Little & Little (1990) FLC 92-147 held that there are limitations to the obligation of a trial judge to affectively “step into the shoes of the valuer” in order to determine the valuation dispute.
Where the evidence enables the Court to adopt a confident approach in respect of valuation, then the exercise should be undertaken however, if the valuation dispute is too uncertain or complex, then the Court should consider other approaches that may resolve the dispute such as the sale of property.
On balance, whilst Mr N properly recognises that his valuation reports are limited or conditional as a result of the limitations arising from unreliable information, I do not ignore that in broad terms, Mr N was satisfied that there were serious issues to be considered as to the financial sustainability and viability of the Whittall group. It is likely that properties which have been sold, was in order to prop up poor trading conditions.
Whilst the respondent’s evidence in attempting to explain the observations of the applicant as to significant sums of cash money being distributed between the respondent, Mr L and other business associates was unconvincing, nonetheless the financial statements support a finding that the income receipts are falling. Mr N considered that liabilities were increasing and I do not ignore the overarching consideration of the ANZ loan facilities coming up for review in mid-2025.
I accept that Mr N was entitled to express significant concern as to the profitability and financial viability of the entities and as such it lends support to his opinion that the interests of the respondent in F Pty Ltd are uncertain at best and that the Court can have some confidence in the valuation of the respondent’s interest in F Pty Ltd and the Whittall group generally as having nil value.
I consider that the evidence enables the Court to have confidence in the valuation opinion of Mr N.
ADJUSTED ASSET POOL
The adjusted asset pool of the parties is as follows:-
Assets
DESCRIPTION OWNER VALUE B Street, Suburb C Joint $1,000,000 1 J Street, Suburb K (50% interest) Respondent $1,100,000 Motor Vehicle 1 Applicant $17,500 Cryptocurrency Respondent $1,033 F Pty Ltd Respondent Nil TOTAL $2,118,533 Liabilities
DESCRIPTION OWNER VALUE Mortgage over B Street, Suburb C Joint $393,308 Mortgage over 1 J Street, Suburb K (50% interest) Respondent $1,037,500 YY Finance Applicant $3,500 DD School fees Joint $14,720 TOTAL LIABILITIES $1,449,028 NET ASSETS $669,505 Superannuation
DESCRIPTION OWNER VALUE Super Fund 1 Applicant $91,411 Super Fund 2 Applicant $724,699 Super Fund 1 Respondent $248,842 TOTAL $1,064,952 CONTRIBUTIONS
The parties are agreed that their contributions should be considered as equal.
SECTION 90SF(3) FACTORS
The orders sought by the applicant are predicated upon an acceptance of an equal contribution by each of the parties with a 20 per cent adjustment in her favour on account of factors pursuant to s 90SF of the Act.
The final submissions on behalf of the applicant did not set out what relevant factors were relied upon but doing the best that I can, the applicant’s contention is that the financial circumstances and dealings of the respondent are so lacking in transparency that it should be a factor pursuant to s 90SF(3)(r). The argument is predicated upon submissions highlighted in aide memoire documents which identify the unreliable evidence of the respondent.
As considered, the evidence of the respondent was sufficiently unreliable and improbable such that where there is a conflict between the parties, the evidence of the applicant is to be preferred.
The interesting and at times disarming honesty of the respondent as to his lack of transparency and discovery of documents likely to be relevant to issues in the proceedings resulted in the evidence of the applicant being largely unchallenged. It is self-evident from the respondent’s trial affidavit that he accepts, and takes no issue with, much of the background and financial history as set out by the applicant.
The applicant’s position was confused by her inclusion of the superannuation entitlements of the parties being treated as a “notional asset”. The circumstances of the parties in terms of their age, current employment status and their inability to satisfy an early condition of release, would speak against a single pool approach.
By reference to the applicant’s balance sheet, the total net assets including superannuation is $3,685,261. On the applicant’s case, 70 per cent would entitle her to $2,579,683.
I have already highlighted issues in respect of the treatment of the respondent’s interest in R Pty Ltd, O Pty Ltd and F Pty Ltd but as an indicator of the weight that the applicant seeks, by way of a 20 per cent adjustment, it equates to a 40 per cent differential of $1,474,104. By any measure, there is no evidence that would support such an outcome.
The parties are of similar age and whilst it is difficult to assess the income of the respondent given my acceptance of the applicant’s evidence as to the propensity of the respondent and his associates as to the withdrawal of cash from a safe without there being any apparent financial controls or appropriate bookkeeping.
The applicant is in full time employment with a weekly income of $1,634. She conceded that her current employment provides her with sufficient income. The applicant acknowledges that if she returned to healthcare work she would command a higher salary but that would require a level of retraining.
By reference to the Financial Statement filed 28 June 2024, the applicant receives a further $500 per week by way of child support as agreed privately between the parties.
I am not assisted by the expenses incurred by the applicant and the children, but it is reasonable to assume that the amount paid by way of child support, whilst not insubstantial, is likely to be entirely consumed by the applicant in terms of providing for the financial needs of the children.
At present, I accept that whilst the applicant pays the outgoings in respect of the Suburb C property, the respondent has made consistent repayment of the mortgage payments.
The respondent’s Financial Statement filed 23 August 2024 sets out his average weekly income in the sum of $1,300 per week which comprises a salary of $1,200 and a fuel card to a limit of $100 per week.
In broad terms, the respondent concedes that his income exceeds his expenditure. Again, I am not confident as to the full extent of the respondent’s financial circumstances.
The parties are each in reasonable health although the applicant concedes that the respondent may have suffered a medical episode in mid-2022 and also has a diagnosis of a medical condition.
The parties have outstanding tuition fees of $14,500 for their son X having completed year 10 and now entering year 11 in 2025. Ms UU is an adult and has commenced employment. To the respondent’s credit, when this occurred in 2022, he did not reduce his $500 weekly child support payments.
It is likely that the children will remain in the primary care of the applicant and spend minimal time with the respondent.
The applicant has not re-partnered and the respondent, as at the date of trial, lives with his mother.
The applicant points to a number of overseas and interstate holidays in 2022 and 2023.
Again, there is a reasonably based suspicion that the respondent has financial resources that have not been disclosed. At least one aspect is likely to be the respondent’s access to cash arising from the running and management of the hospitality entities.
Given the circumstances of the parties, I do not consider that there should be any further adjustment for s 90SF(3) factors.
Accordingly, the property of the parties should be divided equally however, it must be emphasised that the respondent makes a considerable concession by not seeking to re-adjust the substantial difference in the superannuation entitlements of the parties.
CONCLUSION
Having regard to the adjusted asset pool, the total assets of the parties are in the sum of $2,118,533. The liabilities that must be brought to account are in the sum of $1,449,028 leaving a net asset balance of $669,505. At 50 per cent, the applicant is entitled to $334,752.
The applicant retains the following assets:
B Street, Suburb C $1,000,000 Motor Vehicle 1 $17,500 TOTAL $1,017,500
The liabilities are as follows:
Mortgage over B Street $393,308 YY Finance $3,500 DD School Fees (50%) $7,360 TOTAL LIABILITIES $404,168
Taking into account the 50 per cent interest of the applicant, her entitlement is $334,752.
The property retained by her has equity in the sum of approximately $613,332. It is immediately apparent that not only has the applicant retained the majority of the available property but the further position of the respondent is that he will discharge, over a period of 24 months, the payment of mortgage instalments as and when they fall due together with the balloon payment at the end of the relevant period totalling $393,308.
Based upon the orders sought by the respondent, the applicant will retain property of at least $1,007,943 together with the retention of her superannuation entitlements, noting that the current mortgage liability is to be discharged by the respondent.
It is difficult to know what sits behind the respondent’s proposal that would see the applicant retain the overwhelming majority of the available assets. It could be that he has an intention to ensure that his conduct during the course of the relationship should not adversely impact upon the applicant. A further alternative possibility is that the respondent holds significant belief that he and Mr L will turn around the business fortunes of the group of companies in particular, F Pty Ltd, providing him with an opportunity that is not available to the applicant.
Even with the most generous consideration of s 90SF(3) factors in favour of the applicant, the application of appropriate considerations does not equal and certainly not exceed the respondent’s proposal. The superannuation interests of each of the parties are overwhelmingly in favour of the applicant.
TIME TO PAY
At the conclusion of the proceedings each of the parties were given leave to file a minute of order if agreement could be reached as to the time for the respondent to discharge the mortgage over the Suburb C property. The parties were not able to reach agreement save as to the applicant now seeking that the mortgage be discharged by 31 July 2025 with the respondent maintaining his position that the time to pay should be 24 months.
The respondent also provided his consent to him being bound by injunctive orders during the period leading up to the settlement date. Whilst not the subject of comment by the applicant, the orders proposed by the respondent are included in subsections 13(e) to (h) inclusive.
I propose to make orders as sought by the applicant subject to the further consideration of whether the mortgage secured over the Suburb C property should be discharged in 60 days as sought by the respondent or 24 months as sought by the respondent.
There is a deficiency of evidence presented by the respondent as to what it is he considers will occur if he is given 24 months to discharge the mortgage. For her part, the applicant seeks 60 days, but I accept on the evidence presented and in particular, the helpful overview or assessment by Mr N, that the order sought by the applicant is likely to see the respondent fail in the payment of the sum required leading to enforcement litigation.
To date, the respondent has paid the mortgage instalments as and when they have fallen due. To the extent that he accepts that a default would be occasioned either by him not being able to discharge the mortgage in 24 months but also in terms of any periodic payment not able to be met by him, there is little advantage to the applicant in pressing for an unreasonably short period of time for the mortgage to be discharged. Simply put, every mortgage payment made by the respondent has the real effect of reducing the capital outstanding.
Whilst not a part of the applicant’s case, it is not unreasonable for parties to seek that the financial arrangements between them are brought to finality at the earliest reasonable opportunity to do so.
For these reasons, I propose to allow twenty-four (24) months for the respondent to discharge the outstanding mortgage secured over the Suburb C property pursuant to the following conditions:
·That the respondent pay the periodic mortgage instalments as and when they fall due and if the default extends for more than 14 days, the respondent will be considered to be in default enabling the applicant to bring enforcement proceedings if so advised; and
·That until the mortgage liability is discharged the respondent will be the subject of orders of restraint in respect of his ability to transfer his shares in any of the entities but in particular F Pty Ltd, to cause any of the entities to divest themselves of substantial property and/or to seek an extinguishment or diminution of credit loan accounts in the respondent’s favour.
Again, it is noted that the respondent concedes that it is appropriate for orders of restraint to be imposed on him.
I make orders as appear at the commencement of these reasons.
I certify that the preceding one hundred and fifty-three (153) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Berman. Associate:
Dated: 14 February 2025
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