Mallard & Mallard
[2011] FamCA 876
•16 November 2011
FAMILY COURT OF AUSTRALIA
| MALLARD & MALLARD | [2011] FamCA 876 |
| FAMILY LAW – PROPERTY – valuation of property – valuation of husband’s company – net tangible asset approach or maintainable earnings approach – tax liabilities of the husband and his company – alteration of property interests – equality of contributions – parties’ disparate earning capacities – 7.27 per cent adjustment in favour of the wife – spouse maintenance – leave to reopen – application to reopen refused |
| Family Law Act 1975 (Cth) |
| Urban Transport Authority of New South Wales v Nweiser (1992) 28 NSWLR 471 Gelly and Gelly (No 1) (1992) FLC ¶92-290 Smith v New South Wales Bar Association (No 2) (1992) 176 CLR 256 Gaspaldi and Gaspaldi [2008] Fam CAFC 134 Stephens & Stephens & Anor (Enforcement) [2009] FamCAFC 240. |
| APPLICANT: | Ms Mallard |
| RESPONDENT: | Mr Mallard |
| FILE NUMBER: | SYC | 6101 | of | 2007 |
| DATE DELIVERED: | 16 November 2011 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Fowler J |
| HEARING DATE: | 8, 9, 10, 11 and 12 August 2011 and 4 October 2011 |
REPRESENTATION
| SENIOR COUNSEL FOR THE APPLICANT: | Mr Page SC |
| COUNSEL FOR THE APPLICANT: | Ms Saw |
| SOLICITOR FOR THE APPLICANT: | PME DDD & Co |
| SENIOR COUNSEL FOR THE RESPONDENT: | Mr Richardson SC |
| COUNSEL FOR THE RESPONDENT: | Mr Tockar |
| SOLICITOR FOR THE RESPONDENT: | John R Quinn & Co |
Orders
The application of the wife for leave to reopen her case to seek orders for spousal maintenance is dismissed.
It is declared that the wife, Ms Mallard, is the sole legal and beneficial owner of the property at Lot … and Lot … M Street, M Town, NSW (“M Town”).
The husband is to pay the wife the sum of $150,000 with $100,000 to be paid within 21 days of these Orders, and the balance to be paid in monthly instalments of $4,000 over twelve months, save for the last instalment which will be $2,000.
The wife is entitled to absolute ownership and control of:
(a) the household contents contained in the M Town property
(b) all the livestock and horse accessories at M Town
(c) all the farm machinery and equipment at M Town and
(d) her superannuation entitlements.
The wife is to forthwith sign all documents and do all things necessary to transfer to the husband all of her right, title and interest in the property at
Lot 2 Y Street, C Town NSW.
The interim order for maintenance herein made shall be discharged as and from the date of compliance by the husband with so much of Order 3 as requires him to pay to the wife the sum of $100,000. Any arrears owing under the terms of the order as at the date of the payment of the said sum are to be forthwith paid together with the said sum.
The husband shall indemnify the wife and keep the wife indemnified in respect of any action, claim or demand made against her by or on behalf of
J Pty Ltd or in relation to any claim made by the Taxation Department against the wife with respect to any loan account standing in her name in any company associated or formerly associated with the husband.
The husband is entitled to absolute ownership and control of:
(a) Lots 1 and 2 Y Street, C Town
(b) JJ Street, C Town
(c) Lots 1 and 2, E Street, C Town
(d) F Street, C Town
(e) G Street, C Town
(f) H Street, C Town
(g) the household contents at Lots 1 and 2 Y Street, C Town
(h)plant, machinery and equipment at Lots 1 and 2 Y Street, C Town
(i)livestock and horses accessories at Lots 1 and 2 Y Street, C Town
(j)his superannuation entitlements and
(k)shares in I Pty Ltd and J Pty Ltd.
Except as otherwise specified in these Orders, each party is otherwise entitled to retain absolutely to the exclusion of the other all property of whatsoever nature or kind owned by that party and held in the name or possession of that party as at the date of these Orders.
IT IS NOTED that publication of this judgment under the pseudonym Mallard & Mallard 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 SYDNEY |
FILE NUMBER: SYC 6101 of 2007
| Ms Mallard |
Applicant
And
| Mr Mallard |
Respondent
REASONS FOR JUDGMENT
Introduction
Before the Court are proceedings between the parties to a marriage seeking an alteration of their property interests. There was also an application by the wife for leave to reopen the proceedings after judgment was reserved to make a claim by the wife for spousal maintenance, which was not an order sought in the original application. It was said by the wife that claim was recognised by the existence of an interim order whereby the husband was ordered to pay to the wife $4,000 per month. At the time of the hearing that order was in arrears to the extent of $12,000. That situation was rectified in part by the conclusion of the hearing, with $8,000 of those arrears having been paid.
It was argued by the husband inter alia that the existence of an interim order for maintenance in proceedings for property settlement did not constitute any recognition by the Court of a need for a final order for maintenance. It was pointed out by the husband’s counsel that an application for maintenance can be made (subject to the necessary leave in this case) at any time. The Court reserved its judgment in relation to the application of the wife for leave to reopen.
Whilst the issues between the parties at the outset of this Application were many, following discussion between counsel they reduced in number.
The property of the marriage consists of various properties in the C Town area, business entities owned by the husband, two of which are now in liquidation, livestock, farm equipment, machinery and other assets.
The properties are described as follows:
a)Lot 1 and Lot 2 M Street, M, NSW (“M Town”)
b)Lot 1 Y Street, C Town, NSW
c)Lot 2 Y Street, C Town, NSW
d)F Street, C Town, NSW
e)G Street, C Town, NSW
f)H Street, C Town, NSW
g)JJ Street, C Town, NSW
h)Lot 1 E Street, C Town, NSW
i)Lot 2 E Street, C Town, NSW.
The companies of the husband are described as follows:
a)K Pty Ltd (in liquidation)
b)L Pty Ltd (in liquidation)
c)J Pty Ltd
d)I Pty Ltd.
There is a contention by the husband that the property at M Town, currently occupied by the wife and children, formed part of an informal property settlement made by agreement of the parties in February 2003. The wife and children moved into the property in October 2004 due to problems with title. The wife denies that the property was bought as part of an informal property settlement. The Court has treated the property as property of the wife purchased during the marriage in October 2003, with final settlement occurring in June 2004 due to delay relating to title, and which was largely occupied by her and the children. The determination of the issue of whether or not it comprised some sort of informal property settlement is not determined.
The property at Lots 1 and 2 Y Street, are adjoining properties, with Lot 2 being jointly owned by the husband and wife and Lot 1 being owned by the husband. The wife asserts she needs this property in order to run her breeding and thoroughbred business as the M Town property is not suitable to carry out this business. The husband seeks both properties. The wife has not demonstrated that her stated animal breeding business was ever profitable but she said in her evidence that it had begun to pay its way. There was no independent evidence of this fact. The husband maintained that it was not a profit making concern.
The parties agreed on a balance sheet of assets and liabilities and financial resources for the purpose of these proceedings. The value of recent farm equipment acquisitions remained in issue on the balance sheet.
There were issues in relation to the husband’s tax liabilities with respect to one of his company’s which is now in liquidation. The husband was served with an Australian Taxation Office (“ATO”) Directors Penalty Notice for his company L Pty Ltd in December 2010. Indeed there was some consideration of whether or not the husband’s loan account might attract the attention of the Taxation office. Similar considerations might also apply to the wife’s loan account with a company. She, however, was not she said a party to the creation of that account and was not aware of its existence until these proceedings. The account was created on the purchase of the M Town property, and it appears reflected largely the purchase contribution procured by the husband for the purchase.
On the final day of the hearing the wife filed a Minute of Orders, and, in summary, seeks the following orders, that:
a)the husband transfer to the wife, unencumbered the properties at Lot 2 and Lot 1 Y Street, C Town
b)the husband pay to the wife $125,000, taking into account a sum of $75,835 for half of the single experts’ fees paid in the first instance by the husband
c)the wife transfer to the husband her right, title and interest in the properties known as M Town
d)the wife be entitled to absolute ownership and control of all machinery and equipment situated at Lots 1 and 2 Y Street; all furniture and effects in the M Town property; all plant, machinery and personal effects in the M Town property; livestock and horse accessories at the M Town property; and the wife’s superannuation entitlements
e)the husband be entitled to absolute ownership and control of JJ Street, C Town; Lots 1 and 2, E Street, C Town; F Street, C Town; G Street, C Town; H Street, C Town; all furniture and personal effects at Lots 1 and 2 Y Street; all plant and equipment not involved in farming situated at Lots 1 and 2 Y Street; the husband’s superannuation entitlements; shares in I Pty Ltd and J Pty Ltd.
f)the husband indemnify the wife in respect of any claim made against her by or on behalf of J Pty Ltd
g)each party be solely entitled to all other property in the possession of such party.
The husband filed a Minute of Orders on 5 August 2011 and then filed an Amended Minute of Orders on the final day of the hearing. In particular,
Order 6 was inserted, as were orders with regard to paying the wife maintenance. In summary, he seeks the following orders, that:
a)the wife transfer to the husband the property known as Lot 2 Y Street, C Town
b)the wife pay the husband $113,718 within two months
c)the wife be the sole and beneficial owner of Lot 1 and Lot 3 M Street, M; all furniture and effects in the M Town property; all plant, machinery and personal effects on the M Town property; livestock and accessories on the M Town property; her superannuation entitlements
d)
the husband be the sole and beneficial owner of Lot 1 Y Street; JJ Street, C Town; Lots 1 and 2, E Street, C Town;
F Street, C Town; G Street, C Town; H Street, C Town; all furniture and effects at Lots 1 and 2 Y Street; plant, machinery and personal assets at Lots 1 and 2 Y Street; livestock and horses accessories at Lots 1 and 2 Y Street; his superannuation entitlements; shares in the husband’s name in I Pty Ltd and J Pty Ltd
e)the husband indemnify the wife in respect of any action claim or demand made against her by or on behalf of J Pty Ltd, and any claim made against her by or on behalf of the Commissioner of Taxation
f)in the event the husband should become liable to statutory notice, determination of a court or otherwise to personally meet any obligation that arises leading to an obligation in respect of J Pty Ltd, K Pty Ltd Pty Ltd, and or L Pty Ltd (including but not limited to any taxation obligation – with the exception of that identified in order (e) above), then the wife shall pay 50 per cent of such sum.
i)in the event the wife refuses to do so she shall indemnify the husband together with any interest and
ii)in the event the husband satisfies any part of the wife’s liability then the amount so paid shall constitute a debt to the husband by the wife and shall accrue interest at the rate prescribed pursuant to Order 17.03 Family Law Rules.
g)each party be solely entitled to the exclusion of the other to all property in the possession of such party
h)all interim maintenance orders be discharged as at the date to which they stand paid
i)all interim orders requiring maintenance to the wife or payments for her benefit be discharged as at the date to which they stand paid
j)the wife pay the husband’s costs of and incidental to his Response.
It was submitted by the husband that there was an element of procedural unfairness to the husband in the formulation of the wife’s minute of orders, coming as they did at the end of the case, which is rejected by the wife. The husband argued on the wife’s application for leave to reopen that procedural unfairness would be created by the grant of such leave since the hearing had been concluded and the wife had not had evidence tested which might have been relevant to orders for continuing maintenance. The wife it was said could in any event, subject to leave, bring separate proceedings for maintenance and that at the time the Court would have the benefit of knowing the orders for property settlement made in the proceedings. The wife argued that the deficit in opportunity to the husband could be remedied by terms being imposed on such leave. The Court could permit further evidence to be adduced and tested.
The task facing the Court is to devise a set of orders which makes an appropriate order for the division of their property having regard to the various matters required to be taken into account under the Family Law Act and to determine whether the wife should have leave to seek orders for maintenance on terms or otherwise.
Background Facts
Where in this judgment I make statements of fact they are, unless otherwise specified, my findings of fact.
The husband was born in 1963 and is presently aged 48 years.
The wife was born in 1964 and is presently aged 47 years.
In August 1983 the husband purchased the property at N Street, Suburb O for $30,000.
On 27 May 1986 Q Pty Ltd(“Q Pty Ltd”) was incorporated. The husband and his father were the directors of this company. It is through this business that the husband commenced building the business.
In 1986 the husband purchased the property at ZZ Street, S Town for $15,000.
In 1988 the husband purchased the property at U Street, AA Town (“the AA Town property”) for $80,000. The purchase was secured by a mortgage from Westpac Savings Bank Limited for $52,000. The balance of the monies was paid from the husband’s savings. The husband asserts that the mortgage was repaid, but used the property again in August 1990 to borrow $71,000, which he states was repaid by early 1991.
The wife asserts that the parties commenced cohabitation in late 1989. They lived at the wife’s parents’ property at W Street, Suburb X. This is denied by the husband, who asserts that the relationship commenced in late 1990 and that they did not live together at this property.
In 1990 the parties moved into the AA Town property and remained there until 1998.
In 1991 the parties were married.
The first child of the marriage, Z was born in 1991 and is presently aged 19 years.
On 24 February 1992 the husband’s father resigned as a director of Q Pty Ltd and the husband resigned as the secretary. On the same day the wife was appointed as a director and secretary of that company.
In August 1993 the husband borrowed $16,000 from the State Bank of New South Wales using the security of the AA Town property to assist in the financing of the purchase of Lot 2 Y Street, C Town (“Lot 2 Y Street”).
In November 1995 the parties purchased the property Lot 2 Y Street for $220,000. The parties obtained a mortgage from the BB Bank for $200,000. The balance of funds to complete the purchase was paid from the Q Pty Ltd business account.
The second child of the marriage, CC was born in 1996 and is presently aged 15 years.
On 24 January 1996, K Pty Ltd Pty Limited (“K”) was incorporated. The husband and Mr DD (“Mr DD”) were appointed as directors and shareholders of the company. The company was set up to allow the husband to run his business. At about the same time the husband ceased trading Q Pty Ltd and transferred its tools and other assets to K.
In August 1998 the husband, together with Mr DD, purchased Lot 1 Y Street, C Town (“Lot 1 Y Street”) for $450,000. This property is adjacent to Lot 2 Y Street.
In August 1998 the husband and wife sold the AA Town property for $225,000 to assist with the purchase of Lot 1 Y Street.
On 15 October 1998 the husband and wife incorporated the company EE Pty Ltd (“EE Pty Ltd”). The husband and Mr DD were directors and shareholders. The company was established to run Lots 1 and 2 Y Street as a farming business.
In March 2000 the husband purchased the property at H Street, C Town (“the H Street property”), and the property at G Street, C Town (“the G Street property”). The husband asserts that the parties were living separately and apart at this time. The money used to purchase these properties came from the husband’s company K Pty Ltd Pty Ltd.
In mid 2001 the parties and the children moved into Lot 2 Y Street, after having lived in rental properties for a period of time. The husband asserts that the wife and children moved into this property without his knowledge while he was working interstate.
On 23 August 2000 Mr DD ceased as a director of K. The wife took up an appointment as a director of that company on that date.
In February 2003 the husband purchased Mr DD’s share in Lot 1 Y Street for $198,000.
In February 2003 the husband deposes that the parties began to live separately and apart under the same roof.
In May 2003 the husband purchased the property at F Street, C Town (“the F Street property”) for $150,000. He financed the property with a $130,000 loan from the National Australia Bank and paying $20,000 on his credit card. This property is currently used as accommodation for company employees.
In October 2003 the parties exchanged contracts for the purchase of Lot 3 and Lot 1 M Street, M (“M Town”) in the wife’s name for $620,000. The purchase was financed by way of a personal loan obtained by the husband from the National Australia Bank, and the husband asserts that mortgage payments were made by K Pty Ltd Pty Ltd.
In June 2004, the settlement for M Town was finalised after a delay due to legal action relating to title, for a contract price of $580,000.
On 14 June 2004 the wife ceased being a director of K Pty Ltd Pty Ltd. The husband became the sole shareholder of K Pty Ltd Pty Ltd at this time.
In July 2004, K Pty Ltd purchased property at FF Street, C Town (“the FF Street property”) for $127,476 for the purposes of building a factory for the business. K Pty Ltd Pty Ltd has a workshop of approximately 2,400 square metres. This property was sold to the husband’s company I Pty Limited (“I P/L”) in September 2008 for $2,000,000 and the mortgage was transferred to the new company.
In August 2004, the husband purchased the property at JJ Street, C Town (“the JJ Street property”) for $160,000. The property was secured by a mortgage for $132,000 to the Commonwealth Bank of Australia. The property is currently used for accommodation for company employees, with such accommodation being supplied as part of their wage package.
In August 2004, the wife and children moved into M Town. The husband remained living at Lot 2 Y Street to protect it from intruders until all the business plant and equipment was moved into the factory that was being constructed on the FF Street property.
In February 2005, the husband purchased Lot 2 E Street, C Town
(“Lot 2 E Street”) for $55,000. The property was purchased by way of loan from K Pty Ltd and is subject to a mortgage to the Commonwealth Bank of Australia. The property is vacant land on the C Town sports ground and was purchased for the purpose of building associated amenities.
On 12 May 2005 K Pty Ltd Pty Ltd filed an application for winding up.
In late 2005 the factory at the FF Street property was completed.
In January 2006 the husband took the wife and children on a holiday to Tasmania. The husband asserts that there was no reconciliation between the parties and that they had separate rooms.
In March 2006 GG Pty Ltd (“GG Pty Ltd”), a significant supplier to K Pty Ltd Pty Ltd, went into liquidation and the liquidator commenced proceedings to recover $3.2 million of debts due by K Pty Ltd Pty Ltd to GG Pty Ltd.
In April 2006 L Pty Ltd (“L Pty Ltd”) was incorporated. The husband was appointed sole director and shareholder. The company was set up to facilitate a contract with the HH Power Station.
In September 2006 the husband informed the wife and the children that he had a girlfriend.
The wife asserts that 3 October 2006 was the date of separation.
In November 2006, the husband purchased Lot 1 E Street, C Town
(“Lot 1 E Street”) for $66,000. The property is subject to a mortgage to the Commonwealth Bank of Australia. The property is vacant land on the C Town sports ground and was purchased for the purpose of sporting amenities.
On 5 December 2006 J Pty Limited (“J Pty Ltd”) was incorporated. The husband is the sole director and shareholder. The husband formed this company to take on new shareholders so he could raise capital and retire debt. The company contracts in the engineering and maintenance industries and the three main areas of operation are Power Station works, Construction/Site works and Office/Workshop services. The majority of work is sourced by tenders for large contracts with power station operators and mills. The company was valued by Ms W an independent expert as having a value of $1,486,963.
On 3 June 2007 the husband and wife ceased as directors of Q Pty Ltd. The wife deposes that she was not aware of this until 19 July 2011 when her solicitor informed her after carrying out a search of the company.
On 2 July 2007 K Pty Ltd Pty Ltd was sold to J Pty Ltd. J Pty Ltd purchased the business for $846,820 consisting of $746,820 of Plant and Equipment and $100,000 of goodwill. J Pty Ltd did not assume the liabilities of K Pty Ltd Pty Ltd.
On 16 August 2007 the wife made an application to the Child Support Agency for a child support assessment.
On 29 August 2007 the wife commenced proceedings for property settlement, and made an application in a case seeking interim spouse maintenance.
On 19 September 2007 the parties consented to orders for the husband to pay spouse maintenance of $4,000 per month and a series of specified expenses.
On 28 December 2007 the wife filed a Third Party Debt Notice seeking to recover arrears of spouse maintenance.
On 24 January 2008 the husband was required to refinance properties and companies from National Australia Bank to BankWest.
On 13 February 2008 procedural orders were made, including for the appointment of a conciliation conference in June 2008.
On 10 March 2008 the wife filed an interim application for interim costs and arrears of spousal maintenance.
In March 2008 the husband’s de facto partner, Ms D, purchased KK Street, Suburb LL for $520,000.
On 15 April 2008 the wife’s interim application was adjourned to 25 June 2008. The husband consented to orders for payment of arrears of maintenance and $30,000 interim property settlement.
On 1 May 2008 the parties were granted a divorce.
On 5 June 2008 the parties attended a conciliation conference. The matter was not settled and further directions were made.
On 25 June 2008 the wife’s interim application was adjourned to 8 July 2008.
On 9 July 2008 Bell J made Orders for interim costs in the wife’s favour to the value of $140,000.
In September 2008 the husband incorporated the company I Pty Ltd. The husband is the sole director and sole shareholder of the company. The wife asserts that Mr MM is the sole shareholder and holds the shares in trust.
In October 2008 the husband, his new partner and her son moved into Lot 2 Y Street.
On 23 December 2008 L Pty Ltd was placed into liquidation.
On 8 May 2009 K Pty Ltd Pty Ltd was put into liquidation.
On 21 May 2008 the husband submitted an application for the Remission and Interest and Penalty Charges to the ATO in respect of K Pty Ltd, L Pty Ltd and J Pty Ltd. The ATO refused to remit any general interest charges in a response dated 4 July 2008.
In January 2010 the husband married Ms D in Country NN.
On 23 May 2010 L Pty Ltd was deregistered.
On 23 November 2010 the husband, as a director of L Pty Ltd and J Pty Ltd, was issued with penalty notices by the ATO to pay the sum of $705,000.
In February 2011 Ms W’s expert accountant report was finalised.
On 6 June 2011 a Notice to Admit was served by the husband on the wife. No response was filed by the wife.
In July 2011 Ms W filed an affidavit attaching her finalised valuation report.
The Issues
Should the wife have leave to reopen her case to make a claim for ongoing spousal maintenance and if so should such leave be on terms and if so what terms.
What is the property of the parties to the marriage or either of them.
What is a just and equitable re-distribution of that property having regard to the contributions made by each of the parties as described in s 79 of the Act.
Given the assets of the parties to the marriage or either of them, what, if any, is an appropriate alteration to their property interests which will do justice as between them, having regard to the matters required to be taken into account under s 75(2) of the Family Law Act 1975 (Cth).
There was an issue as to arrears of interim spousal maintenance payments. In her submissions the wife sought a lump sum maintenance figure for a period of five years, with a lump sum of $350,000 considered reasonable to meet the needs of the wife. This was in the event that the wife received the Y Street properties as per her orders. It was submitted by the husband that no such application for spousal maintenance was before the Court.
In the event that the orders sought by the husband were made by the Court, it was submitted by the wife that she would be unable to support herself if restricted to the M Town property. In these circumstances it was submitted that there be an order for spousal maintenance on either a lump sum or periodic basis. The interim order of $4,000 per month was regarded as reasonable to be paid for a period of five years. It was clear that the wife’s financial position and her capacity to support herself would be a factor for the Court to take into account in consideration of factors under the provisions of s 75(2) of the Act.
If the leave sought is granted at issue is, how much, if anything, and for how long, if at all, the husband should maintain financial support for the wife.
There was an issue raised as to the wife’s inability to support herself adequately, noting that she still has primary responsibility to the two children of the marriage. It was submitted by the wife that while there is child support paid this is less than reasonably required to meet the children’s needs since the children attend fee-paying institutions and does not therefore provide any significant cash sum for the use of the wife.
Application for Leave to Reopen
The reopening of a case prior to the delivery of judgment is an exceptional circumstance, rather than a usual course of conduct.
The fundamental principle to be applied in determining whether to grant an application to reopen a hearing after judgment has been reserved is whether the interests of justice are better served by allowing the application or rejecting it: Urban Transport Authority of New South Wales v Nweiser(1992) 28 NSWLR 471 per Clarke JA at 476 with whom Mahoney JA and Meagher JA agreed; Gelly and Gelly (No 1) (1992) FLC ¶92-290 per Treyvaud J at 79, 146-148; Smith v New South Wales Bar Association (No 2) (1992) 176 CLR 256 per Brennan Dawson, Toohey and Gaudron JJ at 266-7 and Gaspaldi and Gaspaldi [2008] Fam CAFC 134 (unreported, Family Court of Australia, Bryant CJ, Thackray and Le Poer Trench JJ, 2 October 2007); Stephens & Stephens & Anor (Enforcement) [2009] FamCAFC 240.
The court has discretion to reopen a hearing and allow fresh evidence where:
a)the fresh evidence was not easily available at the time of the trial and could not be discovered despite the exercise of due diligence and
b)the fresh evidence is so material that the interests of justice require it and
c)if believed, the fresh evidence would most probably affect the result of the trial and
d)there would be no prejudice to the other party by reason of its introduction at a late point in time.
In her application to reopen the wife does not seek to adduce fresh evidence, but rather seeks to make an entirely separate application for spousal maintenance.
Subject to leave pursuant to s 44(3) of the Act, the wife is able to file an application for spousal maintenance, and therefore I do not believe it is in the interests of justice to reopen the hearing nor would such reopening be without prejudice to the husband.
The application for leave to reopen the case is dismissed.
The Evidence
Affidavit Evidence of the Wife
The wife filed an affidavit on 28 July 2011 and gave oral evidence at the hearing.
It is the wife’s evidence that she moved into her parents’ property at W Street, Suburb X in November 1989 and that the husband commenced living there with her for a period of approximately six to seven months rent free. The husband denies that they lived at the wife’s parents’ house, and asserts that the relationship commenced in 1990.
The wife asserts that upon moving into the AA Town property in 1990 that she undertook the majority of the duties associated with maintaining the property including the cleaning of the home, washing, ironing, cooking and all childcare. She also contends that she:
·maintained the lawns and paddocks by mowing and weeding
·cleaned and maintained the pool
·attended to the daily care of the husband’s horses and dog
·assisted the husband in erecting fences for two further paddocks
·built three stables
·assisted the husband in converting the carport into an enclosed screened area
·arranged for screen doors to be fitted
·with the help of her father, installed a temporary pool fence
·purchased fencing for the front veranda and painted the fence
·organised the fencing contractors to erect a front fence to install gates
·carried out the work necessary to develop a large vegetable garden and herb garden
·purchased the chickens, ducks and geese to allow the parties to be self-sufficient.
The wife asserts that the parties incurred a tax liability in 1993 of approximately $10,000. They had to borrow money from the wife’s mother. This evidence is supported by the wife’s mother.
It is the wife’s evidence that from 1992 until 1998 she assisted the husband by preparing his accounts, writing up his ledgers, paying accounts and keeping records for tax purposes. Her work also included keeping wages books, preparing, sending out and pursuing payment of invoices and general secretarial duties.
The wife asserts that in 1994, as the husband’s business had increased, they started to look for land to purchase for a weekender and to breed horses. At this time the wife was not working and devoted her time to caring for Z, caring for the horses, maintaining the AA Town property and looking after the husband’s accounts.
It is the wife’s evidence that she wanted to obtain employment during the marriage to assist their financial position, but that the husband refused to allow her to work making comments to the effect of, “You are to be a mother that stays at home to look after the children. I told you my wife will not work. I can make more in a day than you can make in a week” and, “No wife of mine will ever work. You’re going to stay home with [Z]”.
During 1995 the wife asserts that she had discussions with the husband about setting up his own business as he would complain that he was doing all the work but not making the money.
The wife’s evidence is that after K Pty Ltd was incorporated in 1996 she wrote up the wage books, did the banking, paid accounts, wrote up the ledgers, prepared documents for the taxation returns, collected equipment or supplies that were required and other jobs as needed. The wife also asserts that she undertook a significant amount of the paperwork in relation to projects in Australian mines, the Harbour Tunnel, the Eastern Distributor and the Cross City Tunnel. She deposes that she arranged and paid wages, tax, superannuation, travel expenses and organised accommodation for the husband and employees.
During the period 1994 to 2003, the husband was working away from home for extended periods of time. The wife deposes that during this time she was solely responsible for the care of the children and for the household. She was also responsible for the running of Lots 1 and 2 Y Street, attending to the care of the animals, and the mowing, bailing and storing of the lucerne. She attended to the repairs to the barn complex and the yards and fencing. She also asserts that she organised Lot 1 to be cleaned, removing rubbish, car bodies and other materials left there by the previous owner. The husband denies that the wife did any work on Lot 1.
In mid-August 2004 the wife and children moved to M Town, while the husband remained at Lot 2 Y Street to protect the business plant and equipment stocked there from intruders. The wife contends that after they moved to M Town, the husband would either come over for dinner or she would take dinner to him at Lot 2 Y Street. She also contends that she continued to look after the husband by doing his washing, ironing, cleaning M Town and Lot 2 Y Street, packing and unpacking his bag when he went away for work, and doing the grocery shopping for him. The wife also contends that the husband would stay over at M Town occasionally and sexual relations between them continued. The wife also asserts that the husband continued to call her several times a day to discuss his business and seek her advice. The husband denies this evidence and asserts that the purchase of M Town was an informal property settlement.
It is the wife’s evidence that up until September 2006, when the husband informed her that he had a girlfriend that she did not regard herself as being separated from the husband. The husband denies this and contends that separation occurred in February 2003.
The wife contends that from the date of separation in October 2006 until late 2007 she continued to undertake the slashing of paddocks that were overgrown, helping with the cutting of lucerne and bailing of hay. She states that in November 2007 the husband refused to allow her access to the tractors and slashing equipment and locked these in a shed on Lots 1 and 2 Y Street.
It is the wife’s evidence that at Christmas 2007 the telephones would only accept incoming calls. This she says was the husband’s doing. This evidence was tested under cross-examination by Counsel for the husband, and it is submitted by the husband that this story was a fabrication by the wife. The Court does not accept that the husband caused this problem.
The wife is the proprietor of a registered business name known as OO Pty Ltd. The wife asserts that she was trying to build up an animal breeding business on Lots 1 and 2 Y Street and then was excluded from these properties in October 2008 by the husband.
The wife gave evidence at the hearing that she does not have the facilities on the M Town property to continue her business, and that the M Town property only has two safe paddocks. Photographs of the M Town property were tendered, showing what was said to be the inadequate fencing, rabbit holes in the paddocks and barbed wire in the fencing, which were submitted were dangerous. The wife stated that the M Town property has very dry land, there is no irrigation, it’s very rocky, and not sufficient to grow feed which can be harvested. The wife also gave evidence that in order to run her business she would require stud animals, and that the M Town property does not have the facilities for this. It was the wife’s evidence that the M Town property would require laneways, water, and separated paddocks in order to run her OO Pty Ltd business on that property.
It was put to the wife in cross-examination that in fact the Y Street properties were not appropriate for animal breeding by reason of the existence of inappropriate fencing, and that the properties had previously been occupied by a different type of animal. Photos of the Y Street properties were shown to the wife and tendered. The wife’s evidence was that while the perimeter was inappropriately fenced, there were more than three paddocks which were fenced suitably, and she did not agree that there were only 15 acres of the property that had suitable fencing.
The wife’s evidence in relation to the date of separation was tested under cross-examination by counsel for the husband. Admissions made in AVO local court proceedings in 2007, as well as statements sworn and signed by her as part of these proceedings were presented to her as proving that she admitted separation had occurred a few years prior to 2007. The wife denied this and stated that the proceedings and experience were very emotional and admitted to making mistakes in the statements, but maintained her position that separation occurred in October 2006.
It is the wife’s evidence that in January 2011 the husband caused 10 animals to be destroyed without her knowledge or consent. The wife states that four of these animals can be described as matrimonial property, and two had been given to the children of the marriage.
The wife provided oral evidence that she had made job applications to a mining company a few months ago, and that she had also considered opening up a café but did not have the start-up capital to do so. She also stated that while she has qualifications in animal management, there are no jobs available in her town of residence.
In her application for leave to reopen she made assertions in an affidavit lodged in support of her application that she was actively seeking employment but had not been successful in obtaining it. These assertions to the extent that they were new were not tested.
Affidavit Evidence of the Husband
The husband filed an affidavit on 15 July 2011 and gave oral evidence at the hearing.
The husband deposes that the parties separated shortly after his 40th birthday on 12 February 2003 and that they were living separately and apart at the property at Lots 1 and 2 Y Street. He asserts that they did not conduct their lives as husband and wife.
The husband asserts that the wife has not allowed him to see the children and he has not had contact with them since 14 May 2007. He asserts that he was unable to visit the children as the wife obtained an AVO against him and he is prohibited from entering M Town.
It is the husband’s evidence that the parties lived separate and apart during the following times:
·
from April 1998 to December 1999 when the wife lived at
PP Street, QQ Town and the husband lived at
Lot 2 Y Street. He asserts that during this time he owned few animals as a hobby and did not own these animals as a business or for profit.
·from January 2000 to May 2002 when the wife lived at RR Street, Suburb SS, and he lived at Lot 2 Y Street
·for extended times due to his work commitments.
The husband contends that from the date of marriage to the date of separation the parties lived together as husband and wife for a total of seven years and nine months.
The husband states that the wife and children moved to M Town in October 2004. The funding for this property was provided through the husband’s business.
The husband contends that in August 1993 he borrowed $160,000 on the
AA Town property to assist in financing the purchase of Lot 2 Y Street. He sold the AA Town property in August 1998 for $225,000 and used the money to reduce the mortgage owing on the property at Lot 2 Y Street. It was put to the husband in cross-examination that in fact he only borrowed $16,000, as indicated on the Mortgage document, and that this money was used to purchase a motor vehicle.
In relation to the AA Town property it was put to the husband that there was an existing mortgage over the AA Town property when the parties commenced cohabitation and that this was only paid off when the property was sold in 1998.
The husband states that he improved the property at Lot 2 Y Street by building a shed and modifying it to provide living accommodation for him. He states the work he did included laying concrete, fixing steel and fixing sheeting.
It is asserted by the husband that when he told the wife that he was going to sell AA Town to buy Lot 1 Y Street in April 1998, she refused to live in C Town and said she would not agree to the sale. The husband wanted to live in C Town as most of his business was in the TT Region. He states that the wife interfered with the sale and attended to the real estate agent to stop the sale. The husband asserts that it was at this point he considered the marriage to be over.
It is deposed by the husband that as the wife refused to move to C Town they agreed that he would rent a house for her and the children that was close to their school in QQ Town. He rented a house for her in QQ Town and asserts he did not live in this property as he was in UU Town for work during this period. When he returned to C Town for short visits he stayed at his property at Lots 1 and 2 Y Street.
It is the husband’s evidence that he never intended to move to the M Town property and that this was purchased for the wife and children. He contends that following separation in February 2003 he had the following conversation with the wife:
Wife: I’m worried about you going into liquidation or going bankrupt. I want what I am entitled to.
Husband: Okay. If I finance your own place by borrowing the purchase price from the National Australia Bank then that will be it between you and me.
Wife: Yes, that’ll be good because I can’t wait to get away from you.
The husband asserts that he made the following improvements to M Town using his own labour:
·four bedrooms
·double garage
·two bathrooms
·Farm buildings, which the husband fabricated and installed
·fencing and yard improvements, some of which the husband completed and some for which he paid a contractor to complete and
·permanent water for the animals, some of which he paid to have installed.
The husband contends that M Town has all the improvements necessary for her to conduct her business. He asserts that these improvements include various farm buildings, yards, machinery/storage sheds, and constant water supply from natural springs and an underground well.
In 2007 the husband asserts that he was required to refinance M Town as his company, K Pty Ltd, was experiencing liquidity problems and the National Australia Bank had called in the mortgage and required him to pay $600,240. As the wife refused to sign any mortgage documents the husband was required to increase K Pty Ltd’s borrowings by refinancing the company’s loans through Bank West, so as to discharge the loan with the National Australia Bank. The husband states that the loan of $525,359 for M Town is aggregated within his total company borrowings of $2,000,000 and that J Pty Ltd is paying the interest off that loan.
It was put to the husband in cross-examination that he did nothing to create any finality in relation to the informal property settlement, and that the idea of purchasing M Town as a creation of a property settlement was an afterthought. The husband agreed that there was never a discussion that he would create a loan account in the wife’s name for the purchase price of the
M Town property.
The husband provided evidence that the properties at Lot H Street, and G Street, were purchased for $25,000 each. It was put to the husband that in fact he purchased both properties for a total of $25,000 as indicated on the Transfer. The husband disagreed and stated that one of the properties was bought using cash from a friend, however this information was not provided in his affidavit.
The husband was questioned about the Y Street properties and the suitability of the properties for animal breeding. He stated that the fencing was not suitable. It was put to the husband that the vendor of Lot 1 was EE Pty Ltd. The husband denied this. It was put to the husband, and he agreed, that there had been run a breeding and training business on that property, and that the property was equipped with facilities for animal breeding a silo for animal feed and one or more yards. The husband agreed that the property was used for keeping animals, but did not believe it was used for breeding.
The husband gave evidence in cross-examination that he had purchased various plant and equipment in early 2011, subsequent to valuations of plant and equipment already in his possession. This equipment included a 54-inch time cutter (sit-on lawn mower) purchased on 5 January 2011 for $8,390 which is located on Lot 2. On 31 January 2011 he also purchased a 72-inch side discharge sit-on mower for $30,995, less a trade-in of another mower for $17,000, which is also located on Lots 1 and 2. It is the wife’s submission that new plant and equipment was purchased for the operation of a business on the Y Street properties.
It was put to the husband in cross-examination that he had made an application to VV Finance in November 2010 to purchase a slasher, which indicated that his business had an average business turnover of $200,000 over the past three years. It was put to him that the principal business activity was described as engineering and farming. The husband stated that the business referred to was not J Pty Ltd, but rather the farming side of the business. The husband did not agree that it was a true statement, and that the farm does not run as a business. When asked what his intention was in representing to VV Finance that he had such annual turnover, he stated that it was probably a question that had to be filled in so he did. It was also indicated on the application that there was other turnover of $14.8 million for the J Pty Ltd business, and the husband agreed that this was probably a true statement.
The husband contends that the wife has never worked for nor assisted him in the operation of any of his companies. He also asserts that she didn’t have any business experience and that she could not and did not offer any business advice.
It is the husband’s evidence that he established his first company in 1985, six years prior to commencing his relationship with the wife. He asserts that this company evolved into K Pty Ltd and now J Pty Ltd.
The husband deposes that as a director of L Pty Ltd and J Pty Ltd he has been issued with penalty notices from the Australian Taxation Office and that the debts are $560,583 for L Pty Ltd and $145,293 for J Pty Ltd.
The husband was questioned about the existence of a new contract entered into by J Pty Ltd on 6 December 2010. The husband agreed that a contract to construct plant at WW Town was entered into on 6 December 2010 for an amount of $7,801,000. He stated that initially J Pty Ltd received two separate work orders to progress to purchase materials and manufacture structures, and that it was only later that is was signed and agreed upon. It was put to him that there was $400,000 in retention, $1,400,000 work done but not yet invoiced, and $1,400,000 invoiced and paid. The husband stated that there was approximately $400,000 in retention, possibly more, $700,000 invoiced and paid, and approximately $250,000 for work completed but not yet invoiced.
Affidavit Evidence of Mr XX
Mr XX (“Mr XX”), the wife’s father, filed an affidavit on 28 July 2011 and gave oral evidence at the hearing.
Mr XX asserts that the husband and wife lived in his property at W Street, Suburb X, rent-free for a period of approximately seven months in 1990. Questioned about this under cross-examination by counsel for the husband, Mr XX admitted that he did not meet the husband until early 1990.
It is Mr XX’s evidence that when the husband and wife lived at the
AA Town property, he helped the wife with the chores around the house, including hauling drums of water to water the horses.
In January 1992 Mr XX states that the wife called him distressed stating that the sheriff had arrived at the house demanding $11,000. Mr XX states that he and his former wife, Ms YY, agreed to lend the husband and wife $10,000 to pay the debt. Mr XX contributed $5,000. It is Mr XX’s evidence that whilst there was no written agreement, it was always his intention to loan this money to the husband and wife. Mr XX asserts that he has not been paid back this money.
Mr XX contends that he assisted the wife in preparing the AA Town property for sale in 1998, doing such things as minor repairs, tidying the gardens, cleaning the stables and mowing the lawn. He contends that the husband was working in UU Town at the time and only attended for the day of the auction.
Mr XX asserts that while the husband and wife were living at Lot 2 Y Street, he observed the wife driving the tractor, slashing the paddocks and working in the lucerne paddocks, and performing general maintenance tasks around the farm. This was with the help of Mr T, who was employed by the husband as a general station hand.
Mr XX states that in his observation the wife was solely responsible for the children during the marriage.
It is Mr XX’s evidence that the husband did live at the M Town property as he had observed his clothing scattered around the house, and also observed large quantities of alcohol. He states that the wife does not drink and considers the alcohol evidence that the husband lived at this property.
The wife continued to care for the animals at Lots 1 and 2 Y Street after moving to the M Street property. Mr XX states that in about 2008 the husband locked up the agricultural machinery at Lots 1 and 2 Y Street so that the wife was not able to continue to do the tractor work and other general maintenance work. Mr XX observed that the property became unkempt, paddocks were not slashed, and there were thistles everywhere.
Mr XX states that when the wife agreed to an Apprehended Domestic Violence Order in February 2009, excluding her from Lots 1 and 2 Y Street, that he observed an improvement in the maintenance and care of the Y Street properties.
Mr XX states that the husband did not assist the wife around the home or attending to the children’s needs. He asserts that the wife did all child care, house, shopping and other domestic duties, as well as cared for the animals and livestock, and maintained and improved the properties.
Affidavit Evidence of Ms YY
Ms YY (“Ms YY”), the wife’s mother, filed an affidavit on 21 April 2009 and gave oral evidence at the hearing.
Ms YY states that in early 1992 the wife asked if she could lend her and the husband money so the husband could pay settlement monies to a former partner. Ms YY provided a cheque for $5,000 to the wife, and she asserts that the funds were provided as a loan.
Ms YY contends that in 1993 the wife approached her regarding a taxation liability of $10,000 that the husband had incurred. Ms YY agreed to loan $10,000 to the wife and husband, and asserts that the husband promised he would pay her back in a month.
Ms YY states that the husband did not pay her back the total amount of $15,000 owed to her until December 2006.
Ms YY provides details of events where the husband was violent and abusive towards the wife.
Ms YY asserts that when the wife and children moved into M Town that the husband said to her words to the effect of:
Don’t worry [Ms YY]. The girls are moving up there. We’re not getting divorced or separating. I’m just staying down here until the workshop is finished so no one will steal all the equipment.
It is Ms YY’s evidence that on 23 May 2007 the husband called her at approximately 10.00 pm and said to her:
I can’t speak to [Ms Mallard]. Would you tell her that if she drops the AVO I’ll buy her a house, a farm, a … truck, and build [farms buldings] for the girls’ [animals]. I don’t want to fight her over the AVO because I don’t want to put her through what I’m going to do. I’m not going to get married again so if they leave things the way they are my new girlfriend won’t get any of my money. If she doesn’t drop the AVO, I’m going to destroy her.
Affidavit Evidence of Ms D
Ms D (“Ms D”), the husband’s current wife, filed an affidavit on behalf of the husband on 19 May 2009, and she gave oral evidence at the hearing.
Ms D’s evidence is that she has known the husband for thirty-four years as they attended school together. They commenced an intimate relationship in September 2006 and commenced living together in November 2006. She states that they reside at the husband’s property at Lots 1 and 2 Y Street, C Town.
Ms D gave evidence that J Pty Ltd lent her $20,000 in January 2008 to assist her in paying the deposit for a property in Suburb LL. It is
Ms D’s evidence that she repaid this money on 24 April 2008. She states that at this time she was working with the husband in AAA Town and could not organise for the deposit to be paid from her savings.
It is Ms D’s evidence that the husband has no financial interest in her Suburb LL property. The Court accepts that this is so.
Ms D deposes that she worked for J Pty Ltd as a Contracts Administrator from January 2008 until October 2009, and that she took leave without pay from her teaching job during this time. She was paid a salary of $93,600 per year.
From October 2009 Ms D undertook a position at BBB School.
Evidence of Mr CCC
Mr CCC (“Mr CCC”) was subpoenaed during the hearing to give evidence about the J Pty Ltd loan accounts. Evidence was given as part of an application made by the wife to withdraw admissions made to a Notice to Admit filed by the husband pursuant to Rule 11.09 of the Family Law Rules 2004.
Mr CCC is the accountant for the husband and J Pty Ltd.
Mr CCC was asked questions in relation to the schedule setting out summaries of J Pty Ltd loan accounts which became Exhibit 35. He stated that he has employees who process the information and that he does not see the primary documents from which this information is sourced. He stated that should anything in the ledgers look suspicious he would check the amounts; otherwise he relies on his staff to compile the data.
Mr CCC provided evidence that the J Pty Ltd loan accounts were created from those existing in K Pty Ltd in 2007. He also stated that the goodwill of K Pty Ltd was only comprised by one contract held at the time of forming J Pty Ltd.
Evidence of Ms DDD
Ms DDD (“Ms DDD”), legal representative for the wife, gave evidence as to the reasons why the Notice to Admit filed by the husband was not responded to.
It was Ms DDD’s evidence that the Notice to Admit was not responded to as she was waiting to get advice from senior counsel, and also because she had previously asked the husband’s legal representatives for documents which were never provided, and thus that she did not have the information available to respond to the notice.
Ms DDD stated that she did not think there was any doubt that the facts were in issue as these had been raised previously with the husband’s legal representatives.
When questioned as to why she didn’t file a notice disputing the facts, she stated that she had already informed the husband’s legal representatives that there were facts in dispute.
Valuation Report of Ms W
Ms W (“Ms W”), a Chartered Accountant and Principal of CCC Pty Ltd responsible for Forensic Accounting, filed an affidavit on 19 July 2011 attaching her valuation report dated 18 February 2011, prepared by her on joint instructions of the husband’s and wife’s legal representatives.
Her evidence was also tested under cross-examination in the hearing.
Ms W valued the husband’s entities using two approaches; namely a Net Tangible Asset approach and Maintainable Earnings approach. Ultimately Ms W relied on the Net Tangible Asset approach.
Ms W values the husband’s entities as follows as at 30 June 2010:
·K Pty Limited – Nil
·L Pty Ltd Pty Limited – Nil
·J Pty Ltd – $1,486,963
·I Pty Limited – $106,688.
The wife is stated to have no equitable interest in any of the companies.
The liabilities of J Pty Ltd which were taken into account as at 30 June 2010, and which remained unpaid at 23 December 2010, are as follows:
·Workers Compensation Shortfall $265,760
·Payroll Tax $346,886
·Fringe Benefits Tax $ 30,000
Total Liabilities at 30 June 2010 $642,646
Ms W states that K Pty Ltd is in liquidation, but that two debts are preventing the finalisation of the liquidation. Namely these debts are the Superannuation Guarantee Shortfall of $1,295,759 and the GG Pty Ltd (“GG”) debt of $3,200,000. It is Ms W’s evidence that K Pty Ltd does not have any assets from which to pay the Superannuation Guarantee Shortfall. She also states in her report that when a company cannot pay employee entitlements, the ATO has the ability to seek these entitlements directly from directors of the companies that incurred these shortfalls. Ms W states that it is possible that the ATO may seek the superannuation shortfall from the husband personally as he was the director of K Pty Ltd at the time.
With respect to the debt to GG Pty Ltd, K Pty Ltd has been included in the proceedings whereby the liquidator has commenced a claim for preferential payments. It is also stated that the liquidator is attempting to join the husband to the claim to recover the monies directly from him. Ms W has not included this amount as a potential liability of the husband in her report as GG Pty Ltd had not been able to join the husband to the proceedings at the date of finalising her report.
In 2005 and 2006 K Pty Ltd entered into two contracts with EEE Pty Ltd (“EEE Pty Ltd”) for works at the HH Power Station in the TT Region. At the completion of the works, two claims were made under the Security of Payments Act totalling $6.06 million for excess time spent on each job. $3.6 million was paid, leaving a $2.46 million shortfall. A claim of
$2.2 million was resubmitted and a payment of $15,000 was awarded. These losses were not included in Ms W’s assessment of the maintainable earnings of the business. Under cross-examination by counsel for the husband, Ms W stated that these losses from 2005 and 2006 were not accounted for as she came to the conclusion that such losses would not arise again due to the company’s and employees’ greater experience with contracts of this size, better costing and recording processes in place, and also based on the fact that the company was now working as a contractor, rather than a sub-contractor. Ms W also stated that the fact that the company was still trading in 2010 and 2011 after incurring such losses, showed an ability of the company to overcome such losses and avoid a repeat. Ms W gave evidence that this conclusion was based on a consideration of documents produced after requests for documents from the company and also discussions she had with senior members of the team that worked on the EEE Pty Ltd contracts.
During this period the Australian Taxation Office (“ATO”) began to audit K Pty Ltd and L Pty Ltd for GST, PAYG withholding and superannuation payment shortfalls. L Pty Ltd has a debt of $557,063.40 owing to the ATO in respect of superannuation and PAYG Withholding shortfalls. Ms W did not include this as a liability of the husband or J PTY LTD as she had not concluded that the ATO are actively seeking this amount from the husband or J PTY LTD, or that they have commenced legal proceedings to recover the debt.
Ms W used a five year period from 2006 to 2010 to assess the maintainable earnings of the husband’s business. She assessed that the 2004 and 2005 results were not indicative of the current operations of the business. Her analysis of the maintainable earnings for this five-year period takes into account the spikes and troughs of business income and gross profits to determine whether they are a typical business pattern or abnormal or should be removed. Ms W states that she excluded specifically the 2005 and 2006 EEE Pty Ltd project as she considered that the loss generated on these contracts would not be repeated. Ms W assessed the maintainable earnings to be $492,150.
Ms W states that as a profitable trading entity the value of J Pty Ltd should be calculated on the capitalised future maintainable earnings plus any surplus assets and less any surplus liabilities. However, should the Enterprise Value be less than the net tangible assets, then the entity should be valued on a net tangible assets basis. She states that an appropriate capitalisation multiple is between 1.x and 2.x resulting in the Enterprise Value being $984,300.
The business assets of the Business as at 30 June 2010 are valued at $1,568,280.
As the Enterprise Value is less than the Net Tangible Assets of the business
Ms W concluded that J Pty Ltd should be valued using the net tangible assets on an in situ basis methodology.
The liabilities of J Pty Ltd outlined above have been accounted for in
Ms W’s Net Tangible Assets valuation of J Pty Ltd, so as to reduce the value of J Pty Ltd. Ms W states that if the amounts of the liabilities are incorrect or not paid then the value of J Pty Ltd would increase by the amounts not paid.
Other liabilities which may impact the Net Tangible Assets of J Pty Ltd, were the amounts yet to crystallise, and were identified by Ms W as being superannuation expenses, payroll tax expenses, workers compensation expenses, 2010 income tax liability and fringe benefits tax liabilities.
The loan due by the husband and wife was included in the equity valuation of J Pty Ltd in the amounts of $1,157,318 due by the husband, and $885,858 due by the wife. Ms W states that income tax may be payable by the parties on any dividends which might be deemed as a result of the loan.
It was Ms W’s oral evidence that if the liability of the parties or either of them, to the company were to be reduced or ignored then for every dollar ignored, the equity in the value would reduce and ultimately reach a point of a negative position of approximately negative $600,000.
Ms W also provided evidence that the wife has potential liability as an associate of a person in the company, even though the husband and the wife were not married at the time that the liability arose. Save for the indemnity ordered in respect of the loan account created without the wife’s knowledge in the company it is not intended to make any other order for indemnity and the wife will be subject to such other claims as can properly be made.
Ms W stated in her oral evidence that the company would be successful in continuing to obtain work, and estimated that it would be able to maintain a profit level of about $500,000 per year.
Credit
In this matter, each of the parties made submissions in regard to findings on credit in relation to the evidence before the Court.
Mr Richardson for the husband submitted the Court should find the husband to be blunt and frank, despite some of his historical evidence being less than wholly accurate. The husband’s submission is that there was no fundamental endeavour to mislead the Court, but that the wife had the benefit of financial records from 1988 and 1989 that were not disclosed to or shared with the husband.
It is the husband’s submission that the wife is less credible, as she was unresponsive, distorting and not answering questions when asked. It is also submitted that the wife was prone to make claims she thought were damaging to the husband and paint him in a black light. The example used was the Telstra issue where the wife accused the husband of disconnecting the phone lines on Christmas Eve. It is the husband’s submission that this was an attempt to engage in bastardry and that it was just a concoction. Attention was also brought to the wife’s evidence she gave about the date of separation in the local court for domestic violence proceedings, and it was submitted by the husband that there is a credit issue with this evidence also.
The husband also submitted that the absence of evidence from the daughter, Z, is important and could lead to a Jones v Dunkel inference as it was stated by the wife that she would be called as a witness, as demonstrated in Exhibit 48. In the husband’s submission, Z’s evidence could have gone to support the wife’s evidence. In the wife’s submission, the intention to call Z was in order to support the mother in relation to the evidence as to the separation of the parties. It was submitted that the date of separation was not important in assessing any aspects under s 79(4) of the Act.
Attention was also brought to the wife’s evidence in her affidavits of March 2009 and July 2011 where she gave evidence of her belief that the husband was involved in some business with his brother Mr FFF. In the husband’s submission this was uncreditworthy and showed a willingness to endeavour to mislead for the purpose of financial advantage. Further, it was submitted that there were inconsistencies in the evidence between the two statements, and that this was the manufacturing of something which should leave her credit demolished.
It is the wife’s submission that little turns in this case on the questions of credibility, nevertheless it is her submission that the husband’s evidence was fundamentally misleading.
The husband’s evidence relating to the borrowings on the AA Town property was brought into question, with the wife submitting that in fact he borrowed $16,000 for the purchase of a motor vehicle, rather than $160,000 to assist in the purchase of Lot 2 Y Street.
The evidence of each of the parties was not entirely satisfactory but the Court makes no general findings of credit. The view that the Court takes on credit on any particular matter considered relevant will appear from the finding from the matter.
Property Matters
The first step that the Court must undertake is to identify the property of the parties to the marriage or either of them available for division between them.
The Balance Sheet
At the commencement of the hearing an agreed joint balance sheet was provided to the Court. As a result of issues addressed at the hearing a final joint balance sheet was provided as set out hereunder.
| ASSETS | ||||
| Item | Ownership | Wife’s Value | Husband’s Value | Status |
| M Town | W | 1,050,000 | 1,050,000 | Agreed |
| Lot 2, Y Street | J | 740,875 | 740,875 | Agreed |
| Lot 1, Y Street | H | 1,109,125 | 1,109,125 | Agreed |
| F Street | H | 285,000 | 285,000 | Agreed |
| G Street | H | 75,000 | 75,000 | Agreed |
| H Street | H | 85,000 | 85,000 | Agreed |
| JJ Street | H | 245,000 | 245,000 | Agreed |
| Lot 1, E Street | H | 75,000 | 75,000 | Agreed |
| Lot 2, E Street | H | 85,000 | 85,000 | Agreed |
| I Pty Ltd | H | 106,688 | 106,688 | Agreed |
| K Pty Ltd(in Liquidation) | H | Nil | Nil | Agreed |
| L Pty Ltd (in Liquidation) | H | Nil | Nil | Agreed |
| J Pty Ltd | H | 1,486,963 | 1,486,963 | Agreed subject to issues below |
| Farm Equipment and Other Assets | H | 115,000 | 115,000 | Agreed |
| Additional value of recent farm equipment acquisitions | H | nk | - | Issue 5 per Ex 15 |
| Farm Machinery & Equipment | W | 35,000 | 35,000 | Agreed |
| Household Contents | H | 20,000 | 20,000 | Agreed |
| Household Contents | W | 20,000 | 20,000 | Agreed |
| Toyota Land Cruiser | W | 15,000 | 15,000 | Agreed |
| Livestock at M Town | W | 33,500 | 33,500 | Agreed |
| Livestock at Y Street | H | 10,000 | 10,000 | Agreed |
| OO Pty Ltd | W | 2,000 | 2,000 | Agreed |
| BB Permanent Building Society Account # … | W | N/K | Not Referred to by Wife in her Financial Statement | |
| Commonwealth Bank Account … | W (OO Pty Ltd) | N/K | Not Referred to by Wife in her Financial Statement | |
| Commonwealth Bank Savings Account Account … | W | 300 | 300 | Agreed |
| Commonwealth Bank | H | 10 | 10 | Agreed |
| ING Superannuation | H | 6,931 | 6,931 | Agreed |
| ING Superannuation | W | 3,372 | 3,372 | Agreed |
| Add-back: Partial Property Settlement | W | 170,000 | 170,000 | Agreed |
| Total | $5,774,764 | $5,774,764 | ||
| LIABILITIES | ||||
| Item | Ownership | Wife’s Value | Husband’s Value | Status |
| Loan: Mr XX | W | - | - | Agreed |
| Loan: Ms YY | W | - | - | Agreed |
| Mortgage: M Town | W | - | - | Agreed |
| Mortgage: JJ Street | H | 118,000 | 118,000 | Agreed |
| Mortgage: F Street | H | 102,000 | 102,000 | Agreed |
| CBA Mastercard | H | 16,740 | 16,740 | Agreed |
| CBA Mastercard | W | - | - | Agreed |
| Loan: J Pty Ltd | H | 520,181 390,210 246,927 | 520,181 390,210 246,927 | Agreed |
| Loan: J Pty Ltd | W | 885,858 | 885,858 | Agreed |
| ATO Directors Penalty Notice (L Pty Ltd) | H | 705,876 | 705,876 | Agreed |
| Adjust Ms W value of J Pty Ltd to allow for tax at corporate rate on assumed profit within valuation model (30 per cent x $492,150) | H | 147,645 | 147,645 | II XX |
| Interest accumulated at 11.74 per cent for approx 8.5 months on personal ATO debt of $705,876.00 | H | 58,700 | 58,700 | Agreed |
| Total | $3,192,137 | $3,192,137 | ||
| Net Property | $2,582,627 plus nk | $2,582,627 |
Also provided to the Court was a list of issues raised by the applicant wife as to the schedule of assets and liabilities. Initially there were seven issues, but this was reduced down to one with the remaining issue from that list set out as follows:
(5)Farm Equipment owned by husband – Value agreed does not take up recent purchases.
In relation to the recent acquisitions it was the husband’s submission that the total payments made by the company were $9,000 for the slasher, $40,000 for the bailer, $14,000 on the side discharge mower, and $8,390 on the 54-inch cutter, totalling approximately $71,390. The cost of the equipment purchased was met by entering into a hire purchase agreement or from the proceeds of the realisation of an asset. It was the husband’s submissions that there was simply a substitution of another asset from the balance sheet or the creation of a corresponding liability. The Court agrees with this submission.
The wife’s submission was that the equipment was purchased entirely for the operation of the business on the Y Street properties. It was argued that no evidence was produced to enable the Court to ascertain the total extent of the company’s outlays. It was also stated that the equipment purchased was not associated with the operation of the company’s business, and that it can only be assumed that the expenditure of the company was debited to the husband’s loan account, consistent with other purchases. In the wife’s submission there was no disclosure by the husband of these purchases.
Admissions were made by the wife to the husband’s Notice to Admit. The following facts were admitted:
1)That, as at the date of this document, the value of each real estate asset of the parties is as set out in Annexure “A” under the heading “Real Estate”.
2)That, as at the date of this document, the total gross value of the real estate assets is $3,750,000.
3)That, as at the date of this document, the amount owing with respect to mortgages of the said real estate totals $248,000.
4)That, as at the date of this document, the property known as FF Street, C Town has a value of $2,000,000 and is subject to a mortgage to BankWest Limited in the sum of $2,000,000.
5)That, as at the date of this document, the personal assets of the parties is as listed in Annexure “A” under the heading “Personal Assets” and the total value of such personal assets is $269,803.
6)That, as at the date of this document, debts due by the parties to J Pty Ltd are $520,180 for the husband and $885,858 for the wife.
7)That, as at the date of this document, the husband has been served with and is liable under a Director Penalty Notice to the Australian Taxation Office for the sum of $705,000.00.
The following admissions were withdrawn by the wife with leave of the Court pursuant to Rule 11.09 of the Family Law Rules 2004:
1)That, as at the date of this document, the value of the equity of the husband in the companies as listed under the heading “Equity in Companies” is as set out in Annexure “A” of the notice and that the husband’s total equity in the said companies totals $1,593,651.
2)That, as at the date of this document, the net assets of the parties are $3,254,416.
The Court’s consequential finding as to the nett assets of the parties is as set out in the balance sheet below.
In this regard the Court finds that the appropriate value to adopt for the company is that set out in Ms W’s valuation. It is the Court’s view that the valuation is well argued and soundly based. It is not persuaded that a different view should be formed of the value of the company. The failure to include losses for a particular year has been justified by Ms W in her evidence as to a valuation based on maintainable earnings and the other assumptions made by her seem to the Court to be reasonable.
As was conceded by Mr Page there was little argument as to the net nature of the pool at the end of the day. He asserts that the items in dispute were farm equipment and other assets of a value of $265,000 and the mortgage on
M Town which was said to be $200,000 and loans to Mr and Ms YY in the total amount of $225,000.
It is accepted by Mr Page that the mortgage and loans to the wife’s parents
Mr and Ms YY are related primarily to the provision of legal costs. In those circumstances they will not be included in the balance sheet.
The amount for which the farm equipment was purchased was in issue and the Court prefers the husband’s evidence in that regard. In any event the acquisition of these assets was conceded to be by hire purchase or borrowings from the company. Accordingly the balance sheet would have equal adjustment of asset and liability with a corresponding value and the net assets would remain unchanged.
The amount of funds contained in the wife’s bank accounts, being the BB Permanent Building Society Account No. 970678904 and Commonwealth Bank Account (OO Pty Ltd) No. …, are unknown and were not referred to by the wife in her financial statement.
The Court finds that the balance sheet of the parties is as follows:
| Assets | ($) |
| M Town (w) | 1,050,000 |
| Lot 2, Y Street (j) | 740,875 |
| Lot 1, Y Street (h) | 1,109,125 |
| F Street (h) | 285,000 |
| G Street (h) | 75,000 |
| H Street (h) | 85,000 |
| JJ Street (h) | 245,000 |
| Lot 1, E Street (h) | 75,000 |
| Lot 2, E Street (h) | 85,000 |
| I Pty Ltd | 106,688 |
| J Pty Ltd | 1,486,963 |
| Farm Equipment and Other Assets (h) | 115,000 |
| Additional value of recent farm equipment acquisitions (h) | 71,390 |
| Farm Machinery and Equipment (w) | 35,000 |
| Household Contents (h) | 20,000 |
| Household Contents (w) | 20,000 |
| 4WD (w) | 15,000 |
| Livestock at M Town (w) | 33,500 |
| Livestock at Y Street (h) | 10,000 |
| O Pty Ltd (w) | 2,000 |
| Commonwealth Bank Savings Account # … (w) | 300 |
| Commonwealth Bank (h) | 10 |
| ING Superannuation (h) | 6,931 |
| ING Superannuation (w) | 3,372 |
| Add-back: Partial Property Settlement | 170,000 |
| Total Assets | $5,846,154 |
| Liabilities | |
| Mortgage JJ Street (h) | 118,000 |
| Mortgage F Street (h) | 102,000 |
| CBA Mastercard (h) | 16,740 |
| Loan J Pty Ltd (h) | 520,181 |
| Loan J Pty Ltd (h) | 390,210 |
| Loan J Pty Ltd (h) | 246,927 |
| Loan J Pty Ltd (w) | 885,858 |
| Loan from J Pty Ltd for recent farm equipment acquisitions | 71,390 |
| ATO Directors Penalty Notice (L Pty Ltd) (h) | 705,876 |
| Adjust II value of J Pty Ltd to allow for tax at corporate rate on assumed profit within valuation model (30 per cent x $492,150) (h) | 147,645 |
| Interest accumulated at 11.74 per cent for approximately 8.5 months on personal ATO debt of $705,876 (h) | 58,700 |
| Total Liabilities | $3,263,527 |
| Nett Assets | $2,582,627 |
| Nett Assets Pool (exclusive of superannuation) | $2,572,324 |
Section 79(4) contributions
Initial Contributions
The husband deposes that at the date of cohabitation he owned the following assets:
·property at U Street, AA Town. This was purchased in 1987 and was unencumbered.
·Q Pty Ltd. The husband and his father were joint shareholders and directors of the company. The company contracted out the husband’s services, and otherwise had no assets of any material value other than a vehicle. The wife eventually became a director and shareholder of the company in lieu of the husband’s father.
·motor vehicle 1
·motor vehicle 2
·general tools and machinery
·Tractor and attachments
·two shipping containers
·furniture, fittings and general household goods.
The wife deposes that at the time of cohabitation she had the following assets:
·Utility vehicle
·furniture and household items including electrical appliances, linen, crockery and cutlery
·three horses
·bank accounts with the Commonwealth Bank and BB Permanent Building Society with a total balance in both accounts of $3,000.
At the commencement of the marriage the husband had the AA Town property. It is the husband’s submission that this property was important, not only because of the question of whether there was equity at the time, but because it provided a springboard later in the relationship. In particular, that the interest in AA Town was important in the ability to acquire Lot 2 Y Street.
It is the husband’s evidence that he established his first company in 1985 and entered into the relationship with this company, being Q Pty Ltd.
The wife was working in the hospitality industry at the date the relationship commenced.
Contributions to date of separation
The wife asserts that during approximately the first six months of the relationship the parties lived at the wife’s parent’s property in Suburb X rent-free. The husband denies this and asserts they commenced cohabitation in 1990 and lived in the AA Town property. The Court prefers the evidence of the wife.
The wife states that the husband and wife were on social security benefits from late 1991 through to early 1992 as the husband was unemployed and they had just had their first child Z. The wife states that she regularly encouraged the husband to recommence his trade, and in 1992 he did so contracting his services to GGG Pty Ltd, utilising Q Pty Ltd as his trading company. It was through Q Pty Ltd that the husband commenced building the business.
During the marriage, the wife’s evidence is that she assisted the husband build up his business, and also undertook the primary role of homemaker. She also asserts that she maintained the properties at Lots 1 and 2 Y Street and M Town.
The wife asserts that the husband did not allow her to work for periods of time during the marriage, and that she was required to be the primary homemaker.
The husband asserts he made improvements to both the Y Street and
M Town properties. The Court accepts this as likely. It is also his submission that his business and interest in the AA Town property provided a springboard for the parties to purchase these properties. This is also more probable than not.
The Court accepts that during the marriage the wife made the major contribution to the welfare of the family particularly in the role of homemaker and parent. The husband was away from home for significant periods of time and the wife was primarily responsible for the care of the children and the household and the maintenance of the household and grounds. The husband on the other hand was the primary breadwinner and applied himself diligently to the creation of wealth. The wife made that possible by the role she played. There was no change in that role following the separation whenever it occurred. Indeed it is the wife’s evidence and it is accepted on this matter that the husband indeed took the view that that was the role he wanted her to play.
Contributions post separation
The wife’s submission is that regardless of the date of separation, the wife’s contribution continued in the form of maintaining the properties at
Y Street and M Town, maintaining a home at M Town and contributing significantly to the welfare of the children, and that the wife’s contribution was significant given the husband’s absences from the home in the course of his business. The Court accepts this assertion.
It is the wife’s submission that there is nothing that differentiates the contribution of each of the parties. The Court does not accept that there is no differentiation in the contributions but accepts that notwithstanding their different nature that they should be treated as of equal value. It would not have been possible for the husband to gain wealth were not the wife to fulfil the role he wished her to fulfil, namely as primary caretaker for the children. That is not to say that that role was the limit of the wife’s contribution, far from it. The Court finds that she made real and continuing contributions to the maintenance of the property of the parties.
As per interim orders made on 19 September 2007 the husband has paid the wife spousal maintenance in the amount of $4,000 per month. At the hearing the wife gave evidence that the husband was $4,000 in arrears. Further arrears have it seems built since then having regard to the evidence before the Court in the application for leave to reopen. The husband says that the order should be discharged to the date to which it stands paid. The Court is not so inclined and considers that the order should, as was intended, continue until the compliance with the order herein made.
It is the husband’s evidence that he pays the land rates on the M Town property which is approximately $3,700 per annum.
The husband also deposes that he currently pays $808 per week mortgage payments with respect to the loan he obtained to purchase the M Town property.
The husband’s submissions were that the husband’s contributions were to some modest degree ahead of those of the wife, deserving of an assessment of
45-47 per cent to the wife and the remainder to the husband.
It is the husband’s submission that if his date of separation is accepted by the Court that there must be consideration of the withdrawal of the need or requirement for the wife to make domestic contributions to his benefit thereafter, and that this would fortify his proposition that he should receive something further.
Conclusion based on contribution
The Court finds it appropriate, having considered the totality of the evidence, to treat the contributions of the parties to the marriage to the acquisition, conservation and improvement of assets, and to the welfare of the family, including in the role of homemaker and parents, as being equal, to the date of hearing.
Section 75(2) considerations
Following separation the wife asserts that the children remained in her care and that she continues to have responsibility for the continued care of CC aged 15 and Ms Z aged 19.
The wife is qualified in animal care. The wife has not been employed as a in this area, but has used these qualifications in her business. In her written summary of argument the wife asserted that she has limited training and little prospect of employment, and that there is a significant disparity in earning capacities of the parties. She deposes however that she continues to seek work and has applied for work in a number of roles including that of cleaner and truck driver. She gave evidence of considering starting a business.
The wife asserts that she will be able to carry on her business of
OO Pty Ltd should she receive the properties at Lots 10 and
110 Y Street.
She wishes to continue her business but the Court cannot accede to that request having regard to its findings on the extent of the available pool of assets, and the absence of independent evidence that the business she conducted ever made a profit.
One thing is clear, however, that whatever the wife earns in the future it will be an income significantly less than that which can be commanded by the husband. The wife has a qualification in animal care but even if she was able to obtain current employment in that role her income would be small by comparison to that of the husband.
The wife has debts to her parents in relation to the mortgage on M Town, obtained primarily to fund the proceedings before the Court.
The wife remains primarily responsible for a debt of $885,000 to J Pty Ltd with a Division 7A tax debt that might arise.
The husband is left with a business that has an assessed net tangible assets value of $1,436,000 and a maintainable earnings assessment of $492,150 as assessed by Ms W.
In the husband’s oral submissions it was stated that Ms W’s approach to the earnings-based valuation was flawed both as to logic and law, in that she excluded the contract which resulted in a $2.6 million loss to the company. The Court accepts that the basis on which that loss was excluded was reasonable in the process of formulating a maintainable earnings valuation. It would be equally important to disregard “windfall” profits as something unlikely to be repeated. Ms W satisfied herself that the event was unlikely to recur.
The husband carries significant risk in relation to the taxation liabilities owed by his companies as well as a liquidator’s claim. It is the wife’s submission that such debts to the ATO have been readily accommodated in the past. Whether that be so or not it seems to the Court that the amounts and the risk cannot be disregarded as a non-existent contingent liability. They are however not a crystallised liability at this stage.
It is submitted by the wife that the loan accounts in J Pty Ltd do not exist as a risk to the husband. The Court does not accept that this is a reasonable view. The husband has the liabilities and any liquidator of the company said to be in current cash flow problems would be entitled to look to the husband for their recovery.
It is the wife’s submission that should the husband’s orders be acceded to, the wife will be left with a property from which she is not able to generate an income. That may be so but there is no evidence that she has been able to generate an income from her business. The wife has as indicated considered and pursued, and in her evidence says that she is continuing to pursue, employment in a variety of fields of endeavour. The wife will have the benefit of the orders made herein and can if she wishes vary the form in which they are presently held by sale should she so choose.
The husband asserts in his submissions that his approach to s 75(2) considerations are based on the assumption of the Court’s acceptance of
Order 6 in his minute of orders, which would result in the husband only being liable individually in the future for the Division 7A matter. It is the husband’s submission that on acceptance of Order 6 in his minute of orders that the wife get an adjustment of 3 – 5 per cent in her favour. In the instance that Order 6 is not accepted, it is the husband’s submission that an adjustment of 10 per cent be made in the husband’s favour. The Court does not intend to make an order based on a possibility and having regard in particular to the provisions of s 81 of the Act proposes that there be finality in its orders. The Court will take into account the husband’s contingent liability in its considerations under s 75(2).
It is the wife’s submission that there should be an adjustment of 15 per cent in her favour.
Conclusion on section 75(2)
For all the reasons referred to above, I consider that having regard to the financial positions of each of the parties that there are factors which require an adjustment to the division of property in favour of the wife and I find that the amount should be approximately 7.27 per cent.
Overall division of assets
The above determination will see the wife receive 57.27 per cent of the parties’ assets and the husband receive 42.73 per cent.
Just and equitable
The division of assets would see the wife receive $1,479,172 worth of net assets and the husband receive $1,103,455 worth of assets.
In the circumstances of this case I determine that result to be just and equitable.
Orders which should be made
I propose orders which will give effect to the following division of the assets referred to above.
The wife will receive:
| Assets | ($) |
| Lot 3 and Lot 1 M Street, M, NSW | 1,050,000 |
| Farm Machinery and Equipment | 35,000 |
| Household Contents | 20,000 |
| 4WD | 15,000 |
| Livestock at M Town | 33,500 |
| OO Pty Ltd | 2,000 |
| Commonwealth Bank Savings Account # 062821 00609365 | 300 |
| ING Superannuation | 3,372 |
| Add-back: Partial Property Settlement | 170,000 |
| Total Net Assets | $1,329,172 |
| Payment by the husband to the wife | $150,000 |
| Total to be received by the wife – 57.27 per cent | $1,479,172 |
The husband will receive:
| Assets | ($) |
| Lot 2, Y Street | 740,875 |
| Lot 1, Y Street | 1,109,125 |
| F Street | 285,000 |
| G Street | 75,000 |
| H Street | 85,000 |
| JJ Street | 245,000 |
| Lot 1 E Street, C Town | 75,000 |
| Lot 2 E Street, C Town | 85,000 |
| I Pty Ltd | 106,688 |
| J Pty Ltd | 1,486,963 |
| Farm Equipment and Other Assets | 115,000 |
| Additional Value of recent farm equipment acquisitions | 71,390 |
| Household Contents | 20,000 |
| Livestock at Y Street | 10,000 |
| Commonwealth Bank | 10 |
| ING Superannuation | 6,931 |
| Total Assets | $4,516,982 |
| Liabilities | |
| Mortgage: JJ Street | 118,000 |
| Mortgage: F Street | 102,000 |
| CBA Mastercard | 16,740 |
| Loan J Pty Ltd | 520,181 |
| Loan J Pty Ltd | 390,210 |
| Loan J Pty Ltd | 246,927 |
| Wife’s Loan J Pty Ltd | 885,858 |
| ATO Directors Penalty Notice (L Pty Ltd) | 705,876 |
| Loan from J Pty Ltd for recent farm equipment acquisitions | 71,390 |
| Adjust II value of J Pty Ltd to allow for tax at corporate rate on assumed profit within valuation model (30 per cent x $492,150) | 147,645 |
| Interest accumulated at 11.74 per cent for approximately 8.5 months on personal ATO debt of $705,876 | 58,700 |
| Sub-Total Liabilities | $3,263,527 |
| Amount due to wife under these orders | 150,000 |
| Total Liabilities | $3,413,527 |
| Net Assets – 42.73 per cent | $1,103,455 |
Some time, having regard to the present cash state of the husband’s company, will be allowed for payment of part of the obligations created by the Orders made for payment to the wife.
I certify that the preceding two-hundred and fifty-four (254) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Fowler delivered on 16 November 2011.
Associate:
Date: 16 November 2011
12
4
1