Malphas and Grier

[2013] FamCA 324

FAMILY COURT OF AUSTRALIA

MALPHAS & GRIER [2013] FamCA 324

FAMILY LAW – PROPERTY – Application for property settlement orders – Whether it is just and equitable to alter property interests and rights – Stanford v Stanford [2012] HCA 52 considered – Where the parties agreed that there was no disparity in initial contributions – Where the husband made significant financial contribution during the marriage – Where the totality of the wife’s contributions cannot match the significant contribution on the part of the husband – Consideration of factors under s 79 and s 75(2) of the Family Law Act 1975 (Cth) – Where the outcome of the assessment of contributions and other factors has resulted in the husband receiving 60 per cent of the assets compared to the wife’s 40 per cent – Where an adjustment, pursuant to s 75(2), of 10% in the wife’s favour is appropriate – Where it was determined to be just and equitable that the parties interest and rights in property is altered.

Family Law Act 1975 (Cth)

Chorn & Hopkins (2004) FLC 93-204
Mayne & Mayne (2011) FamCAFC 192
Stanford & Stanford (2012) HCA 52
Townsend & Townsend (1995) FLC 92-569

APPLICANT:

Mr Malphas

RESPONDENT: Ms Grier

FILE NUMBER: SYC 2810 of 2009

DATE DELIVERED: 27 February 2013

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Stevenson J

HEARING DATE: 17, 18 & 19 October 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Campton

SOLICITOR FOR THE APPLICANT: Gayle Meredith & Associates

COUNSEL FOR THE RESPONDENT: Mr Batey

SOLICITOR FOR THE RESPONDENT: Broun Abrahams Burreket

Orders

1. That each of the parties do all acts and execute all documents required to effect:

   1.1the transfer of the whole of the husband’s right title to and interest in the property situate at and known as B Street, Suburb C in the State of New South Wales to the wife;  and

   1.2to distribute the funds held in the controlled monies account in the parties’ joint names as to $262,763 to the husband and the balance to the wife.

2. By consent that, if and upon any further distribution is received by or on behalf of the husband pursuant to the Company D sales agreement dated 4 February 2008 for 2012 and 2013, the husband shall pay to the wife within 28 days of receipt of any such payment an amount equivalent to “X”% of such sum and the husband shall be and hereby is restrained from dealing in any way with such payment until payment is made to the wife in accordance with the order.

   For the purpose of this order, “X” shall be calculated as follows:

   2.1the amount of the payment less any taxation impost or amount payable by the husband on the receipt of such payment multiplied (X) the percentage of the s.79 pool of property to be adjusted to the wife at the conclusion of the trial;  and

   2.2by way of example and for clarification, if the court determines the wife is to receive 40% of the pool of property, after deduction of, or allowance for, taxation payable in the husband’s hand, then the wife is to receive 40% of the payment;  and

   2.3for the purposes of calculating the “X”, the husband shall do all things as are necessary to cause and instruct his accountant to certify the amounts received and payable pursuant to this order within the period specified above of 28 days.

3. By consent that within fourteen (14) days of these orders the wife shall do all acts and execute all documents necessary to:

   3.1cause to be transferred to the husband all of her interests and entitlements, including all shareholdings, in Malphas Pty Ltd and E Pty Ltd (the companies) and to resign as an officeholder of the companies;  and

   3.2relinquish and renounce any and all interest benefits and entitlements in and to, including to any income and/or capital, each of the Malphas Family Trust and the Malphas Investment Trust (the trusts);  and

   3.3assign to the husband any and all entitlement of the wife on any loan account or otherwise in respect of each of the companies and the trusts;

   and the husband shall indemnify the wife and keep her indemnified in respect of any and all liability of the wife in respect of each of the companies and the trusts whenever and howsoever arising, including but not limited to any liability for taxation.

4. By consent that within twenty eight (28) days of these orders the wife shall make available for collection by the husband the following artwork in her possession good order and condition:

   a.Artwork F

   b.Artwork G

   c.Artwork H

   d.Artwork I

   e.Artwork J

   f.Artwork K

   g.Artwork L

   h.Artwork M

   i.Artwork N

   j.Artwork O;  and

   k.Artwork P.

   And the husband shall retain those works to the exclusion of the wife, and the wife shall retain to the exclusion of the husband all the remaining items of artwork in her possession or control as at the date of these orders.

5. 5.1     That otherwise each of the parties is declared to be solely entitled to all items of property and superannuation which are presently in his and her respective possession.

   5.2That it is declared that the furniture and contents in storage and at the Suburb C property are presently in the possession of the wife.

6. That all material produced on subpoena be returned. 

IT IS NOTED that publication of this judgment by this Court under the pseudonym Malphas and Grier 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 2810 of 2009

Mr Malphas

Applicant

And

Ms Grier

Respondent

REASONS FOR JUDGMENT

the proceedings  

1. Ms Grier and Mr Malphas are in dispute as to settlement of their matrimonial property. They disagreed on the balance sheet; their respective contributions and the extent of any adjustment in favour of the wife pursuant to section 75(2) of the Family Law Act. The wife also made an application for a child support departure order, which was opposed by the husband.

2. The Commissioner of Taxation intervened in the proceedings on 1 March 2010 and remained a party until 27 March 2012.  The husband and wife, together with two of their corporate entities, had incurred substantial tax debts in relation to the sale of a professional services business known as Company D. 

Background

1. The wife was born in 1969 and is currently 43 years of age.  The husband is presently aged 39, having been born in 1973.

2. The parties commenced their relationship soon after they met in December 1999 and began to live together on 10 June 2000.  They married in December 2002 and separated on 4 or 6 April 2009, after having cohabited for almost nine years.

3. Neither party held any significant assets at the commencement of their cohabitation.  The husband was the proprietor of a cleaning business in Queensland and the wife was employed by Company A in a management position.  Soon after he moved to Sydney the husband obtained employment in the professional services field with a company known as Company Q.

4. In mid-2001 the husband resigned from his employment with Company Q and established his own professional services business, known as Company R.  In late 2001 or early 2002 the husband and Mr S jointly established Company D.  The husband deposed that this business was a partnership between E Pty Limited and T Pty Limited, a company under the control of Mr S. 

5. In May 2001 the parties incorporated the company E Pty Limited.  The husband holds one “A” class share and is a director and secretary of this company.  The wife is a director and holds one “I” class share.

6. In 2003 the parties purchased jointly the property U Street, Suburb V for $586,000.  They obtained a mortgage advance from the Westpac Bank and the husband contributed savings of $117,200, which came from the income of Company D.

7. The wife resigned from her employment with Company A on 14 March 2005, after the parties decided to have a child.  Their daughter W was born in April 2007 and is now five years of age.  The wife has been out of the paid workforce since she resigned from Company A.

8. In September 2005 the parties purchased jointly a home at X Street, Suburb Y for $1.42million.  The husband’s uncontradicted evidence was that they contributed savings of $282,000 and borrowed the balance of the purchase money from the Westpac Bank.  They sold the Suburb V property for $615,000 in late 2005 and used the net proceeds of approximately $200,000 for general living expenses.  The parties carried out renovations to the Suburb Y property at a cost of $350,000 in 2007.

9. In March 2006 the parties purchased jointly the property B Street, Suburb C for $1.05million.  They borrowed the whole of the purchase money from the Westpac Bank.  In 2007 they carried out renovations to this property at a cost of approximately $350,000. 

10. On 26 September 2006 the husband incorporated a company known as Z Pty Limited, of which he is the sole director and shareholder.  This company is the trustee of the Malphas Family Trust, the name of which was later changed to the Z Trust.  The husband’s business activities with Company D were thereafter conducted via the Z Trust.

11. On 28 September 2006 the husband established the Malphas Investment Trust.  This entity held shares in Malphas Pty Limited and loaned money to the AA Unit Trust, to which reference is made below in these reasons.  The company Malphas Pty Limited was established simultaneously, with the husband as sole office holder and the parties joint owners of the one issued share as trustees for the Malphas Investment Trust.

12. In 2006 the wife graduated with a degree from university.  In 2009 she commenced another degree which she expects to complete in 2015.

13. Early in 2008 the husband and Mr S sold Company D to BB Ltd for $19.5million plus potential future payments up to December 2013, conditionally upon fulfilment of certain performance criteria.  Upon completion of this sale the Z Trust received an initial payment of $9.75million.  The husband entered into a contract of employment with BB Ltd for three years at an annual salary of $200,000.  He also entered into a restraint of trade agreement for five years, which expires on 30 June 2015.  The terms of this restraint agreement are reproduced below in these reasons.

14. The husband’s uncontradicted evidence was that the sum of $9.75million was expended as follows:

    ·    purchase of the property CC Street, Suburb DD for $5.85million

    ·    loan of $305,000 to the AA Unit Trust

    ·    purchase of publicly listed shares in the names of the husband and E Pty Limited

    ·    purchase of a Porsche motor vehicle for the husband’s use and a Mercedes car for the wife

    ·    purchase of furniture and artworks for the Suburb DD property

    ·    repayment of the mortgage debt in relation to the Suburb C property

    ·    the cost of a holiday in Europe for the parties

    ·    payment of a tax debt of the husband’s father in the sum of $204,760.

15. Late in 2008 the husband and Mr S purchased a racehorse for $200,000, to which sum they each contributed $100,000.  This horse proved to be unsuitable for racing and, early in 2001, the husband sold his interest to Mr S for $10,000.  The wife alleged that the husband acquired an interest in a second racehorse but there was no evidence that he did so.

16. The AA Unit Trust was established by a deed dated 4 April 2008.  The trustee company was AA Pty Limited, of which the directors are the husband and Mr S.  The unit holders were the parties jointly as trustees for the Malphas Investment Trust and EE Pty Limited as trustee for the S Family Trust. 

17. On 4 April 2008 the AA Unit Trust purchased a commercial property in Melbourne for $6.1million, with a delayed settlement for twelve months.  The Commonwealth Bank took a mortgage on a title to the Suburb DD property as security for funds which it advanced for this purchase. 

18. In 2009 and 2010 Mr S repaid to the husband the sum of $305,000 which had been loaned to the AA Unit Trust.  He made payments of $170,000 on 9 September 2009, $64,000 on 15 April 2010 and $64,000 on 16 April 2010.  An amount of $7,000 was deducted from the initial advance of $305,000 on account of legal fees incurred in securing vacant possession of the Melbourne property.

19. Early in 2008 the parties sold the Suburb Y property for $1.79million.  They received a net sum of approximately $1.6million, which was paid into their joint account.

20. When the parties separated in April 2009 the husband vacated the former matrimonial home at Suburb DD.  The wife and the child W occupied this property until it was finally sold in January 2011.  The parties each used the Suburb C property until April 2011, when the wife changed the locks and unilaterally excluded the husband.  The wife has received rental in respect of the Suburb C property and retained this money for her own use.

21. After the separation the husband sold shares in his name and that of E Pty Limited for a total amount of $404,720.  There was no clear evidence as to the husband’s use of this money. 

22. On 9 April 2009 the husband withdrew $2.92million from the parties’ joint account, leaving a balance of approximately $20,000 for the wife’s use.  He deposited this sum of $2.92million into an account in his sole name.  The wife had no prior notice of and did not consent to the husband’s withdrawal of these funds.

23. On 15 April 2009 the wife drew down on the mortgage account secured on the Suburb C property a sum of $800,000.  She also withdrew $17,517 from the parties’ joint account.  She deposited all of these funds into an account in her sole name.  The husband had no prior notice of and did not consent to these transactions.

24. In May 2009 the husband traded in his Porsche for $214,000 and purchased a Mercedes motor vehicle for $163,000.  He retained the surplus of about $51,000 for his own purposes.

25. In early June 2009 the husband loaned a sum of $1.3million to Mr S’s company EE Pty Limited, on condition that the money would be repaid no later than 1 February 2010.  Mr S repaid $1.3million, plus interest of $13,000, to the husband on 9 September 2009.

26. On 4 June 2009 the ATO issued the following tax assessments as a result of the distribution of the sale proceeds of Company D:

    ·    the husband:           $1,051,354

    ·    the wife:                 $1,052,228

    ·    Malphas Pty Limited:                           $275,350

    ·    E Pty Limited:        $9,731

    The husband paid the tax debts of himself, Malphas Pty Limited and E Pty Limited from the sum of $2.92million which he had withdrawn from the parties’ joint account in April 2009.  He made no payment in relation to the wife’s tax debt.

27. In June 2009 the wife traded in her Mercedes motor vehicle for $80,000 and purchased a BMW for approximately $41,000.  She retained the surplus of about $39,000 for her own use.

28. In October 2009 the husband purchased the property FF Street, Suburb GG for $4.3million.  The purchase was funded by a mortgage advance of $2.76million from the Westpac Bank and the sum of $1.313million repaid by Mr S in September 2009. 

29. In November 2009 the husband began to live with his current partner, Ms HH.  They have a son, JJ, who was born in October 2011 and is now seventeen months old.  Their second child is due in May 2013. 

30. In November 2009 the husband received a further payment of $292,740 on account of the sale of Company D.  He received an additional payment of $263,960 in December 2010.  The husband retained all of these funds for his own use.

31. In May 2010 the AA Unit Trust sold the Melbourne property and the husband received a payment of $28,200.  He held a one per cent interest in the entities involved in this venture.  The husband retained these funds for his own use.

32. In October 2010 the husband purchased the property MM Street, Suburb KK for $2.45million, with a delayed settlement for six months.  The purchase money came from a Westpac mortgage advance of $1.2million; a loan from Mr S of $1.2million and the sum of $250,000 withdrawn from the husband’s account.  The purchase of this property was completed in March 2011. 

33. In March 2011 the husband entered into a contract for sale of the Suburb GG property for the sum of $4million.  He received a net sum of approximately $1.021million when the sale completed in September 2011.  He used these funds to make repayments of $750,000 and later $150,000 to Mr S and to meet the agent’s costs and fees of $66,000 on the sale.

34. In June 2011 the husband’s employment with BB Ltd terminated in accordance with the contract for sale of Company D.  He has not since undertaken paid employment.

35. On 24 June 2011 interim orders were made by consent, which provided for the sale of the Suburb DD property and payment of all outstanding tax liabilities of the parties as at the time of completion.  These orders further provided that the wife receive a sum of $750,000 by way of partial property settlement and the husband $500,000, in the event that the sale of the Suburb GG property had not completed by that time.  The orders provided further that the mortgage on the Suburb C property be discharged from the sale proceeds.

36. The sale of the Suburb GG property settled on 1 September 2011 and that of the former matrimonial home at Suburb DD on 23 January 2012.  Accordingly the husband did not receive the sum of $500,000 as contemplated by the interim orders of 24 June 2011. 

37. On 17 November 2011 it was necessary for trial dates to be vacated and further interim orders were made by consent.  Pursuant to these orders, all tax debts of the parties up to 30 June 2011 were paid from the proceeds of sale of the Suburb DD property and the wife received a partial property settlement of $500,000. 

38. On 23 January 2012 and 17 February 2012 the proceeds of sale of the Suburb DD property were distributed as follows:

    ·    legal fees on the sale:   $1,698

    ·    agent’s fees and commission on the sale:   $81,027

    ·    ATO:   $2,482,488

    ·    Suburb DD Council:   $1,322

    ·    controlled monies account:  $1,636,507

    ·    discharge of the Suburb C mortgage:  $846,837

    ·    legal fees and registration costs:  $517

    ·    reimbursement of expenses on the sale to the wife:              $16,902

    ·    reimbursement of expenses on the sale to the husband:        $20,902

    ·    interim property settlement to the wife:  $500,000

39. On 4 November 2011 the parties consented to final parenting orders, which provided that the child W live with the wife and spend time with the husband for two out of three weekends and half of all school holidays.  The orders also provided that the parties have equal shared parental responsibility for the child.

40. There was some confusion about the wife’s dealings with motor vehicles after the separation.  It does not seem to me now to be a useful exercise that I attempt to unravel these transactions.  It is clear that both parties retained for their own use proceeds of sale of motor vehicles following the separation.

41. At the commencement of the trial the parties agreed to a formula for distribution of any future payments to the husband on account of the sale of Company D.  They also agreed to orders providing for the wife to assign to the husband any interest which she may hold in Malphas Pty Limited, E Pty Limited, the Z Trust and the Malphas Investment Trust.  These proposed orders also provide for the husband to become exclusively entitled to specified works of art.

Approach To These Proceedings

1. In Stanford v Stanford [2012] HCA52 the majority of the High Court held (paragraph 35):

   It will be recalled that s 79(2) provides that “[t]he court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order”.  Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under this 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.

1. Their Honours further observed as follows:

   In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship.  It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife.  No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship.  That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship.  And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end.  Hence it will be just and equitable that the court make a property settlement order.  What order, if any, should then be made is determined by apply s 79(4).

2. Obviously, the present proceedings arose as a consequence of the breakdown of the parties’ marital relationship and their separation in April 2009.  They now live separately and are each involved in new relationships.  The husband and his current partner have one child and are expecting a baby in May 2013.  There has been no common use of their property for almost four years.  In these circumstances I have no hesitation in concluding that it is just and equitable that I make an order for adjustment of property interests between the parties.  The application of section 79(4) will determine what order should be made for settlement of property.

3. It is first necessary to determine the assets, liabilities and financial resources of the parties. All relevant contributions of each of the parties, within the meaning of paragraphs (a) to (c) of section 79(4) must be identified and weighed against each other. The matters set out in paragraphs (d) to (g) of section 79(4), particularly paragraph (e) which takes by reference the provisions of section 75(2), must be considered and a determination made as to what if any altercation should be made to the entitlements of the parties as earlier assessed on account of contribution.

The Evidence and Witnesses

1. The applicant husband relied on his affidavit sworn on 13 August 2012, to which were exhibited 481 pages, and a Financial Statement of 14 August 2012.  He also relied on an affidavit sworn by Mr S on 13 August 2012.  The husband and Mr S gave oral evidence in his case.

2. The respondent wife relied on her affidavits sworn on 8 November 2011, to which were exhibited 429 pages, and 14 August 2012.  She also relied on a Financial Statement of 14 August 2012.  The wife was the only witness who gave oral evidence in her case.

3. During cross-examination of the husband an issue arose as to the admissibility of a schedule which purportedly identified and categorised his expenditure on a Visacard and from a Westpac account. On behalf of the wife it was submitted that the schedule was admissible pursuant to section 50 of the Evidence Act 1995 (Cth), which provides:

   Proof of voluminous or complex documents

   (1)  The court may, on the application of a party, direct that the party may adduce evidence of the contents of 2 or more documents in question in the form of a summary if the court is satisfied that it would not otherwise be possible conveniently to examine the evidence because of the volume or complexity of the documents in question.

   (2)  The court may only make such a direction if the party seeking to adduce the evidence in the form of a summary has:

   (a)  served on each other party a copy of the summary that discloses the name and address of the person who prepared the summary; and

   (b)  given each other party a reasonable opportunity to examine or copy the documents in question.

   (3)  The opinion rule does not apply to evidence adduced in accordance with a direction under this section.

4. The purported schedule was served on the husband’s solicitor under cover of a letter dated 6 September 2012 (exhibit 3), which did not identify the author of the schedule. The husband gave convincing evidence that he had not seen these documents before being confronted with the bundle in the witness box. It thus seemed to me that I could reasonably conclude that there was scant compliance with the requirements of section 50(2) of the Evidence Act.

5. I was concerned also at the seemingly arbitrary classification of items by the unknown author of the schedule.  In my view this person’s categorisation of various items of expenditure could not bind me, especially in circumstances where his or her methodology was entirely untested.

6. Debate over the admissibility of this schedule threatened to delay the proceedings to a most unhelpful extent.  Accordingly, I decided to admit the schedule regardless of these difficulties and to afford appropriate weight to its contents. 

7. For the reasons to which I have referred, I derived little or no assistance from the contents of the purported schedule.  I am reinforced in this conclusion by the approach which I adopted toward the proposed “add-backs” to the list of assets, to which I refer below in these reasons.  Essentially it seemed to me that each of the parties spent money freely and irresponsibly after their separation.  In my view, it is now neither helpful nor appropriate to attempt to carry out an unwieldy tracing exercise in respect of the funds which came into the hands of each of the parties after their separation.

The Credit of the Parties

1. I observed in the wife’s oral evidence a tendency to attribute blame for the parties’ financial position solely to the husband.  Further, she appeared to assert for herself an entitlement to use joint funds as she pleased after the separation while at the same time denying the same right to the husband.  For example, she said inter alia:

   ·    “we lost more than $1.2million on [Suburb DD] – I am not responsible, I think [the husband] is responsible”

   ·    “around $188,000 interest was accrued on $800,000 – I think it should fall upon [the husband]”

   ·    “I spent the money in my possession on living expenses – it is not inconsistent that I criticise [the husband] for how he spent money”

   ·    “yes I say it is appropriate that I live in [a four bedroom house] and [the husband] should live in a two bedroom house”

2. Such comments left me with concerns as to the objectivity and balance of the wife’s evidence.  Further, I gained the impression that the husband’s recollection as to details of financial transactions was more likely to be reliable and accurate than that of the wife.  I had no concerns about the accuracy and reliability of the evidence of Mr S.  I thus prefer the evidence of the husband over that of the wife wherever there is conflict or inconsistency.

The Assets, Liabilities and Financial Resources

1. On 17 October 2012 counsel for the parties submitted a “Joint Balance Sheet” as now set out: 

Ownership		Description		Husband’s Value	Wife’s Value
ASSETS
1	Joint	[B Street, Suburb C]		$875,000	$875,000
2	Husband	[MM Street, Suburb KK]		$2,450,000	$2,450,000
3	Wife	Bond at wife’s current [Suburb LL] residence		$2,200	$2,200
4	Wife	Balance of rental income of [Suburb C] held on trust by [NN] Real Estate		$5,851	$5,851
5	Joint	Broun Abrahams Burreket – Westpac Controlled Monies Account …09 as @ 28 Sept 2012 less $4,146.91 paid to wife (subject to any further interest)		$263,645	$267,792
6	Wife	Westpac eSaver Account No. …26 as at 10.10.12 plus $4,146.91 for reimbursement of funds spent on preparing [Suburb DD] property for sale		$281,576	$281,576
7	Wife	Westpac Choice Account No. …73 as at 10.10.12		$286	$286
8	Wife	Westpac eSaver Account No. …88 as at 10.10.12		$74	$74
9	Husband	Westpac Bank Account No. …46 as at 12.10.12		$8,504	$8,504
10	Husband	Future residual re sale of [Company D] payments 2013 and 2014 (see note)		In specie distribution of net when and if received	In specie distribution of net when and if received
11	Joint	Shares in [Malphas] Pty Ltd		N/A	N/A
12	Husband	[Malphas] Investment Trust		Nil	Nil
13	Husband	1 ord share [Z] Pty Ltd (trustee only)		Nil	Nil
14	Husband	[Z] Trust		Nil	Nil
15	Joint	1 A Class share [E] Pty Ltd		Nil	Nil
16	Wife	2,500 shares in [Company A] @ $3.95 as at 12.10.12		$9,875	$9,875
17	Husband	… Mercedes …		$62,200	$62,200
18	Wife	… VW …		$6,100	$4,750
19	Joint	Furniture and contents in storage and at [Suburb LL] and [Suburb C]		$50,000	$50,000
20	Husband	[Amusement machine] and 50% of furniture and contents at [Suburb KK] (incl [amusement machine])		$15,000	$19,500
21	Wife	Art to be retained by wife		$188,275	$188,275
22	Husband	Art to be retained by husband		$43,000	$43,000
23	Husband	Art at [Suburb KK]		$5,100	$5,100
24	Wife	Jewellery		$20,000	$20,000
25	Wife	50% of wine		$7,500	$7,500
26	Husband	50% of wine		$7,500	$7,500
27	Wife	Broun Abrahams Burreket Trust Account		$52,488	$52,488
28	Husband	Money held in Trust for husband by Gayle Meredith & Associates		$39,031	$39,031
Total		$4,393,205	$4,400,502
ADDBACKS
29	Wife	Partial property settlement received by Wife ($500,000 less paid in legal fees in paragraph 32 herein and less funds in bank accounts at paragraph 6 and 27 herein)		$38,626	0 Wife claims spent on living expenses
30	Wife	Alleged amount taken by the wife drawn down on the [Suburb C] loan less the amounts of paid legal fees at Item 31		$618,166	Nil Wife Claims spent on living expenses
31	Wife	Wife’s paid legal fees from draw down on [Suburb C]		$211,834	$211,834
32	Wife	Wife’s paid legal fees from partial property settlement		$131,457	$131,457
33	Husband	Husband’s paid legal fees and disbursements (see note)		$200,300	$200,300
34	Husband	Tax paid by husband for his father on 5.6.08 (see note)		0	$204,760
35	Husband	Tax paid by husband for [Ms HH] on 26.10.11		0	$4,509
36	Husband	Monies paid by [Ms HH] on behalf of husband for wine on 17.12.08 (see note)		0	$6,000
37	Husband	Proceeds of share sales since separation to date in husband’s name (see note)		0	$307,636
38	Husband	Proceeds of share sales since separation to date in the name of [E] Pty Limited (see note)		0	$97,084
39	Husband	Sale proceeds of horse (see note)		0	$10,000
40	Husband	Monies received from [BB Ltd] in 2009-2011 (see note)		0	$889,915
41	Husband	Refund of investment for [AA] (see note)		0	$298,000
42	Husband	Surplus of sale proceeds from Porsche (see note)		0	$42,000
43	Husband	Return on investment in [AA] Unit Investment (see note)		0	$39,617
44	Husband	Monies paid by husband for [Suburb KK] improvements (see note)		0	$153,159
45	Husband	General Interest Charge on Wife’s tax liability		0	$358,690
46	Husband	General Interest Charge on Husband’s tax liability		0	$122,664
47	Wife	Interest incurred as a result of withdrawing $830,000 from Westpac loan facility secured on the [Suburb C] property		$153,645	Nil
48	Wife	Balance of sale proceeds of BMW		$59,999	Nil
SUPERANNUATION
Member              Name of Fund              Type of Interest				Husband’s value	Wife’s value
49	Wife	[Company A] as at 30.8.12	Accumulation	$77,194	$77,194
50	Husband	AMP BT Super	Accumulation	$97,934	$97,934
Total		$175,128	$175,128
Total Assets including Superannuation and Add-backs				$5,981,361	$7,653,255
Total Assets including Superannuation and agreed Add-Backs only				$5,111,924	$5,119,211
LIABILITIES
51	Husband	Tax 2012 re residual payment received on 01.12.2011		$1,632	Nil
52	Husband	Westpac mortgage secured on [Suburb KK]		$1,200,000	$1,200,000
53	Wife	HELP Debt		0	$6,629
54	Husband	Loan from [Mr S]		$50,000	$50,000
Total				$1,251,632	$1,256,629
Net Assets including Superannuation and Add-backs				$4,729,729	$6,396,626
Net Assets including Superannuation and agreed Add-backs only				$3,860,292	$3,862,592
FINANCIAL RESOURCES
Ownership		Description		Husband’s value	Wife’s value
55	Husband	Loan owing to husband by [Malphas] Pty Ltd		0	0
56	Husband	Loan owing to husband by [E] Pty Ltd		0	0
Total		$0	$0

Notes

In relation to any disputed items and all disputed values for items a party should state, using the item number as a heading:

1.Why an item should not be on the balance sheet.

2.Whether expert evidence is required to resolve a dispute as to value and what steps have been taken to agree upon and appoint a single expert.

3.Whether documents in the possession of the other party need to be provided before the value of an item can be agree.

4.Any other comment a party wishes to make in relation to the disputed item.

Wife’s comments

Husband’s comments          

Item No

10Husband says he is unlikely to receive any payment in 2013 and 2014

33Paid from income so husband says should not be included

34Gift to the husband’s father more than 1 year before separation and with the wife’s knowledge and consent

35Husband says these funds have been repaid.

37-44Wife has included gross figures as add backs.  Husband used funds from 37-43 to pay for improvements to [Suburb KK] property (44) – double accounting.

1. There was no explanation for the differing figures in relation to the balance of the controlled monies account.  The difference of $4,147 is the amount said to have been paid to the wife, so I assume that the actual current balance of the account is $263,645.  It seems to me that this amount should be included in the list of assets. 

2. No submission was put to me in relation to the disputed value of the wife’s VW car.  I recall an agreement in writing at a case management event that issues as to motor vehicle valuations would be resolved by reference to “The Red Book”. No such information was provided to me, thus I can only adopt the wife’s admission against interest contained in her Financial Statement sworn on 14 August 2012.  Accordingly I will include the wife’s VW in the list of assets at a value of $6,100.

3. There was no evidence as to the value of the husband’s 50% interest in the furniture and contents at the Suburb KK property.  I will thus adopt the admission against interest in his Financial Statement sworn on 14 August 2012 and include these items in the list of assets at a value of $15,000.

4. The joint balance sheet referred to twenty alleged “add-backs”, all but one of which were in contention.  A series of authorities establish that the adding back of notional assets is the exception rather than the rule, for example Townsend and Townsend (1995) FLC 92-569 and Chorn and Hopkins (2004) FLC 93-204.

5. In Mayne and Mayne [2011] FamCAFC 192 the Full Court (Faulks DCJ, May and Strickland JJ) summarised the principles in relation to “add backs” in the following terms:

   72       Parties to proceedings about the division of property before the Family Court (and the Federal Magistrates Court) frequently urge the Court to add-back assets or funds that have been applied by one party or another for allegedly his or her own purposes after separation.  The rationale is that one party should not benefit from a premature distribution of the assets.  An obvious example is withdrawing and using money from a bank account either joint or owned by one of the parties.  It is also the case that the parties may decrease the pool by increasing liabilities.  The issue in such cases is whether the liability should be a joint liability or a liability only of the party who created it.

   73.      The application of the funds removed (or the debt incurred) may have been for a personal purpose (for example, to pay legal fees) or it may have been applied in the sustenance of a party or the children of the parties.

   74.       If the former is the case this has generally found to be a pre-emptive unilateral division of property.  If the latter is the case then the principles enunciated in Marker v Marker AND Chorn NH & Hopkins RC apply.  If the money was, or part of the money, was used to meet reasonable living expenses then that money, or that part of the money, is not “added-back” or regarded as a pre-emptive distribution.

6. In final submissions counsel for the husband conceded that the parties’ paid legal fees only should be added back to the list of assets.  On its face, this submission would apply to the paid legal costs of both parties.  The notes to the Joint Balance Sheet, however, suggested that the husband met his legal fees from income and these amounts should thus be excluded from the list of assets. 

7. The husband deposed that he paid $40,770 on account of legal costs in November 2011 from funds borrowed from Mr S.  Otherwise there was no mention in his affidavit of the source of the funds used to meet legal fees.  In his oral evidence the husband said that he spent $60,000 on legal fees between August 2012 and the date of trial but did not specify the source of this money.

8. It should be borne in mind that the husband received $2.92million from the parties’ joint account on 9 April 2009 and some $404,720 from the sale of shares after the separation.  With this large amount of money available to him, it seems to me to be an artifice to attempt to quarantine his expenditure on legal costs from these funds.  I am of the view that it is more probable than not that he intermingled all funds available to him and used money as he saw fit from time to time.  Additionally, he received no income from employment after his contract with BB Ltd ended in June 2011.  For these reasons, I will include the paid legal fees of both parties in the list of assets in amounts of $200,300 for the husband and $343,291 for the wife.

9. I reject the submission on behalf of the wife that a sum of $204,760 used to pay a tax debt of the husband’s father should be added back to the list of assets.  I accept the husband’s evidence that this payment occurred almost one year prior to the separation and with the wife’s consent.

10. I also reject the submission on behalf of the wife that $4,509 should be added back to the list of assets because the husband paid a tax debt of Ms HH in that amount.  This payment was made on 26 October 2011, when the husband and Ms HH were cohabiting and pooling their financial resources.  The husband’s uncontradicted evidence was that Ms HH engaged in paid employment until the end of 2011 and had approximately $10,000 in savings at that time.  It thus seems artificial to me that this sum should be isolated from Ms HH’s own funds, which were pooled with those available to the husband, and deemed to be a matrimonial asset.

11. On behalf of the wife it was contended that an amount of $6,000 should be added back to the list of assets on account of “monies paid by [Ms HH] on behalf of the husband for wine”, as set out in the Joint Balance Sheet.  The only evidence relevant to this submission was that of the wife, who deposed: 

    On 17 December 2008 (prior to separation), [the husband] allegedly loaned his now girlfriend, [Ms HH], the sum of $4,000.  [The husband] alleges that this money was used for [Ms HH] to purchase wine from the Margaret River and that such wine was delivered to the former matrimonial home.  I refer to Tab “O” to Exhibit JG1, specifically item 2, being [the husband’s] response to my request for answers to specific questions.  No wine of this description was ever delivered to the former matrimonial home.

1. The husband’s Response to Answers to specific Questions stated:

   Wine Purchase – [Ms HH] went to Margaret River for Xmas holidays.  This money was for her to buy wine which was delivered to [Suburb DD].

2. There was no cross-examination or submissions in relation to this minor issue.  I cannot determine whether or not Western Australian wine was delivered to the former matrimonial home. In any event, this payment was made some four months prior to the separation in unknown circumstances.  I will not add this amount back to the list of assets.

3. I reject also the contention on behalf of the wife that a sum of $10,000 should be added back to the list of assets on account of money received by the husband when he sold his interest in a racehorse to Mr S.  The uncontradicted evidence of Mr S was that this amount was credited against other money which the husband owed to him at that time.  I accept the evidence of both the husband and Mr S that they are trusted friends and advanced loans to each other from time to time.

4. The wife sought to add back as well the following amounts:

   ·    proceeds of sale of shares since separation to date  $307,636

   ·    monies received from BB Ltd in 2009-2011  $889,915

   ·    refund of investment for AA  $298,000

   ·    surplus of sale proceeds from Porsche  $42,000

   ·    return on investment in AA Unit Investment       $39,617

   ·    monies paid by husband for Suburb KK improvements  $153,159

   It seems to me that the add-back of any or all of these amounts is fraught with risk of double counting.  It should be remembered that the husband injected $1.313million in cash into the purchase price of the Suburb GG property.  Mr S loaned him $1.2million when he purchased the Suburb KK property, which he repaid on the sale of the Suburb GG residence.  He injected $250,000 into the purchase price of the Suburb KK property and carried out renovations, using funds from the above sources.  I will not add back these amounts.

5. I did not understand why the wife asserted that the surplus of funds from the husband’s motor vehicle dealings should be added back, yet funds which came into her hands from that source should be treated differently.  I will not add back any funds which came into the hands of either party on account of motor vehicle transactions.

6. As noted, counsel for the husband indicated in final submissions that the only add backs should be the parties’ paid legal fees.  I thus conclude that the husband resiled from the submission inherent in the Joint Balance Sheet that the following amounts should be added back and treated as premature distributions to the wife:

   ·    $38,626:  “partial property settlement $500,000 less paid legal fees and sums held in bank accounts”

   ·    $618,166:  “alleged amount taken by wife drawn down on the [Suburb C] loan less amounts on paid legal fees”

   ·    $153,645:  “interest incurred as a result of withdrawing $830,000 from Westpac loan facility secured on the [Suburb C] property”

   ·    $59,000:  “balance of the sale proceeds of BMW”.

7. It seemed to me that there was considerable merit in these concessions on behalf of the husband.  I am similarly of the view, however, that the various funds which came into the husband’s hands after the separation likewise should not be added back to the list of assets and treated as premature distributions to him. 

8. I am of the view that both parties spent money freely and irresponsibly after their separation.  It would be a formidable, and probably impossible, task to trace the fate of each dollar which came into their respective hands after the separation.  As noted, there would be a substantial risk of double-counting in any event.  In my view the nature and pattern of post-separation expenditure by both parties also militates against the inclusion in the list of assets of most of the proposed add-backs.

9. An example of such post-separation expenditure by the parties was the cost of their overseas and interstate travel.  The wife spent $44,492 and the husband $110,590 for these purposes.  Another example arises from the husband’s evidence of the breakdown of his post separation expenditure, which included substantial amounts for wine and entertainment.  The wife’s itemisation of her expenditure equated to approximately $3,400 per month for “cleaner, rates, electricity, gas, Foxtel, gardener, insurance, internet, phone, plumber, pool cleaning/repairs and maintenance” in respect of the Suburb DD property.  She also deposed to expenditure of $2,700 per month for “bank fees, books, newspapers, dry cleaning, family birthday/Christmas presents, wedding gifts, general gifts, fines, food, household items, medical, music, parking, party, postage, restaurants, veterinary, sports goods, sports items, stationery, storage, takeaway food/coffee, miscellaneous”.

10. I highlight these items of expenditure to illustrate the difficulty in adding back to the list of assets most of the funds received by each of the parties since separation.  Other examples could be extracted from the evidence.  In my view, neither the husband nor the wife displayed any particular financial responsibility after their separation but I can identify no basis upon which either could be regarded as more profligate in that regard than the other.

11. In my view, this assessment of the parties’ post-separation behaviour extends to their treatment of the tax liabilities following the sale of Company D.  It was completely open to the husband to pay all of these tax liabilities from the amount of $2.92million which he withdrew from the parties’ joint account on 9 April 2009.  He chose, however, to pay the tax liabilities only of himself and the two corporate entities. 

12. On the other hand, the wife refused for two years to join in the sale of the Suburb DD property and discharge the remaining tax debts.  Ultimately, she consented to orders for sale of the property and payment of the tax debts on 24 June 2011.  Equally, the wife made no attempt to apply any part of the sum of $830,000 which she withdrew from the Suburb C mortgage account to reduce her tax liability.

13. On behalf of the wife it was submitted that it is “unfair to say that the GIC on [her] tax accrued because she sat on [Suburb DD]”.  Correspondence between the parties’ solicitors demonstrated that the husband sought the wife’s consent to the sale of the Suburb DD property on 29 April 2009 (husband’s exhibits page 213).  The request was repeated on 3 July 2009 (husband’s exhibits page 228).  The wife refused to list the property for sale (husband’s exhibits page 213A).

14. An email exchange between the parties in August 2009 showed that the husband was anxious to negotiate a final property settlement and was prepared to provide $1.3million in cash to enable the wife to purchase a home.  Part of his proposal was that the parties sell the Suburb DD property and discharge the wife’s tax debt from the proceeds.  The wife’s position was that she would “stay in the [Suburb DD] home until next August and go all the way” if the parties were unable to reach an agreement which was acceptable to her (wife’s annexures pages 95 to 101).  The reference to “August” was her anticipated date for a final hearing.

15. In cross-examination the wife conceded:  “Yes, I resisted all efforts to have the [Suburb DD] property sold until April 2011”.  In all of the circumstances, I am satisfied that there is no “unfairness” to the wife in concluding that she refused to cooperate in the sale of the Suburb DD property and discharge of her tax debt.

16. In these circumstances, it seems to me that both parties contributed to the general interest charges accrued on the tax debts arising from the sale of Company D.  The husband did not seek to add back any amount on account of general interest charges.  The wife’s oral evidence left no room for doubt that, in her view, these costs should fall solely at the feet of the husband.  Having regard to the conduct of both parties in relation to the tax debt, I disagree with the wife’s view and I will add back no amount on account of general interest charges.

Liabilities

1. The disputed liabilities were the husband’s 2012 tax assessment of $1,632, and the wife’s HELP debt of $6,629.  I was taken to no evidence in relation to the husband’s 2012 tax debt and no submission addressed this issue.  The position is similar in respect of the wife’s HELP debt.  In these circumstances I can see no basis upon which I should treat these debts effectively as joint liabilities and they will be excluded from the balance sheet.

2. There was no evidence that either party holds a financial resource.  The Joint Balance Sheet contained mutual concessions to the effect that neither party has the benefit of a financial resource.

3. I thus find that the assets, superannuation and liabilities are as set out below in these reasons.  The designations “husband”, “wife”, and “joint” indicate my findings as to the parties’ respective legal and beneficial interests in the assets and superannuation and their respective liability for the debts.

Ownership			Description	Value
ASSETS
1	Joint		B Street, Suburb C	$875,000
2	Husband		MM Street, Suburb KK	$2,450,000
3	Wife		Bond for wife’s current Suburb LL residence	$2,200
4	Wife		Balance of rental income of Suburb C held on trust by NN Real Estate	$5,851
5	Joint		Broun Abrahams Burreket – Westpac Controlled Monies Account …09	$263,645
6	Wife		Westpac eSaver Account No. …26	$281,576
7	Wife		Westpac Choice Account No. …73	$286
8	Wife		Westpac eSaver Account No. …88	$74
9	Husband		Westpac Bank Account No. …46	$8,504
10	Wife		2,500 shares in Company A @ $3.95	$9,875
11	Husband		Mercedes	$62,200
12	Wife		VW	$6,100
13	Joint		Furniture and contents in storage and at Suburb LL and Suburb C	$50,000
14	Husband		50% of furniture and contents at Suburb KK	$15,000
15	Wife		Art to be retained by wife	$188,275
16	Husband		Art to be retained by husband	$43,000
17	Husband		Art at Suburb KK	$5,100
18	Wife		Jewellery	$20,000
19	Wife		50% of wine	$7,500
20	Husband		50% of wine	$7,500
21	Wife		Broun Abrahams Burreket Trust Account	$52,488
22	Husband		Gayle Meredith & Associates Trust Account	$39,031
23	Husband		Husband’s paid legal fees & disbursements	$200,300
24	Wife		Wife’s paid legal fees and disbursements	$343,291
Total			$4,936,796
SUPERANNUATION
Member              Name of Fund            Type of Interest
25	Wife		Company A                    Accumulation	$77,194
26	Husband		AMP BT Super             Accumulation	$97,934
Total		$175,128
LIABILITIES
27	Husband		Westpac mortgage secured on Suburb KK property	$1,200,000
28	Husband		Loan from Mr S	$50,000
Total			$1,250,000

The Contributions of the Parties

1. At the commencement of the trial, counsel indicated an agreement that “there is no disparity in initial contributions”.  Counsel for the husband submitted that an appropriate contribution finding would be 75% to his client and 25% to the wife as at the date of trial.  Counsel for the husband indicated at the conclusion of the trial that he made no “special skills” submission.  A central contention in the husband’s case was that he brought a “skill set” into the relationship, which he utilised over a five year period and which largely generated the net pool of matrimonial property.

2. Counsel for the wife contended that there should be a finding of equality in the contribution as at the date of trial.  It was submitted that, if there was a special contribution on the part of the husband, he “cancelled it out with the money that has gone through his hands”. 

3. In her affidavit the wife contended that she played a role in the Company D business by preparing PowerPoint presentations for the husband and entertaining employees in the parties’ home.  In cross-examination, however, the wife conceded that she “was not engaged in the business” and that “[The husband] was good at what he did”. 

4. In his affidavit Mr S deposed:

   I observed her attend several social functions but I observed no other involvement in the business by her.  [The wife] never attended any meetings with [the husband] and I in relation to anything to do with [Company D].

   Mr S also deposed that he and the husband were “two of the highest performing consultants in the company [Company Q]” and that the latter won an award related to his employment in 2000.  There was no challenge to this evidence.

5. In his affidavit the husband deposed: 

   Over the first six years of its operation, the business of [Company D] grew about 100% each year.  The business was included in [a national survey of the most progressive companies on two occasions. It was also recognised for being one of the most progressive companies in NSW and the most progressive in its field].

   There was no challenge to this evidence.

6. There is no doubt that the husband devoted substantial skill, effort and time to the Company D venture.  The result was that the parties received a substantial annual income and a cash sum of $9.75million when the business was sold early in 2008.  The husband’s uncontradicted evidence was that the Z Trust received $1,720,531 from Company D in the 2007 year, in addition to which he was paid a salary.  Between early 2008 and June 2011 the husband received from BB Ltd a package consisting of a salary of $180,467 cash per annum, superannuation, a car and a mobile phone.

7. I accept the husband’s evidence that the funds generated by Company D enabled the parties to make substantial cash injections into the acquisition and improvement of their various real estate holdings.  In particular I accept his evidence that these funds met the following costs:

   ·    $117,200:  cash contribution to the purchase price of the Suburb V property

   ·    $284,000:  cash contribution to the purchase price of the Suburb Y property

   ·    $150,000:     renovations to the Suburb C property

   ·    $350,000:     renovations to the Suburb Y property.

   I further accept the husband’s evidence that the proceeds of sale of Company D were applied in part as follows:

   ·    cash purchase of the Suburb DD property for $5,850,000 together with stamp duty of $506,000

   ·    purchase of shares in the names of the husband and E Pty Limited

   ·    purchase of artworks and furniture for the Suburb DD property at costs of $240,000 and $70,000 respectively

   ·    payout of the mortgage on the Suburb C property in a sum of around $1,050,000

8. I am comfortably satisfied that the husband’s skills and effort substantially generated the success of Company D and produced the bulk of the present net pool of matrimonial property.  I am satisfied that the wife attempted to exaggerate her role in the Company D business and that the reality was as described by the husband and Mr S.

9. It seems equally clear, however, that the wife fully supported the husband in his business endeavours.  In his oral evidence he readily conceded:  “I agree that we both did our best in business, parenting and all aspects of our relationship” and “she gave me support when I set up [Company D]”. 

10. Until 2005 the wife engaged in full time employment in a management position with Company A.  Her unchallenged evidence was that, in 2002, her salary was $105,000 per annum and that she was provided with a company car.  I have no doubt that the wife made her income available for the joint benefit of the parties. 

11. I am satisfied that the wife played a substantial role in the renovations to the Suburb C and Suburb Y properties in 2007.  At this time the husband was fully engaged in the activities of Company D and would not have been available to participate in these renovations to any great extent.

12. The same observation applies to the parenting of the parties’ daughter W.  There can be no doubt that the wife was her primary carer, as the husband was engaged with the activities of Company D and later his employment with BB Ltd.  I accept that the husband was also a devoted parent who participated in the care of the child to the extent permitted by his business activities and employment.

13. The reality is that the net pool of property was derived almost entirely from the fruits of the Company D business venture.  It seems to me, and I find, that the totality of the wife’s contributions cannot match this significant contribution on the part of the husband.  I find that the contributions of the parties should be assessed at 60% to the husband and 40% to the wife.

Section 75(2) Factors

1. The husband is 39 years of age and has not engaged in paid employment since his contract with BB Ltd terminated in June 2011.  His agreement with BB Ltd contained this provision:

   13.1    Subject to clause 13.4, the Executive must not, and must not encourage, counsel, procure or assist the Executive’s Associates to, directly or indirectly, whether solely or jointly with any other person, and whether as principal, agent, director, executive officer, employee, shareholder, partner, joint venturer, adviser, consultant or otherwise other than in performance of the Duties for the intended benefit of the Business:

   (a)   during the Restraint Period within Australia and New Zealand, and any city outside Australia and New Zealand in which the Business is conducted, undertake, carry on or be engaged in any business which is competitive with the Company or any other Group Company and that is in or is directly connected with the [field of the company], or be engaged in any employment, consultancy or other provision of services for or with a supplier or customer of the Company or any other Group Company which involves the provision of services that are competitive with any business in or directly connected with the [field of the company];

   (b)  during the Restraint Period:

   (i)canvass, solicit, or entice away from the Company or another Group Company, the custom of any person who at any time during the period of 24 months up to and including the Termination Date, was a client, customer, representative or agent or correspondent of the Business, the Relevant Vendor or the Partnership, or was in the habit of dealing with the Executive or any of the Executive’s Associates but only to the extent that such dealing related to the Business;  or

   (ii)employ or solicit with a view to enticing away or entice away from the Company or another Group Company any person who at any time during the period of 24 months up to and including the Termination date, was an officer, manager, consultant, employee or contractor of the Business or the Company or any of the Executive’s Associates, and with whom the Executive had dealings in the course of the Executive’s employment with the Business or Company, or about whose service to, or employment or engagement with, the Business, the Company or any of the Executive’s Associates, the Executive acquired confidential information in the course of the Executive’s employment with the Business or Company, whether or not that person (Relevant Person) would commit a breach of contract by reason of leaving the Company or the other Group Company.  This clause does not prohibit the employment (Permitted Employment) of a Relevant Person where such Relevant Person has ceased providing services as an officer, manager, consultant, employee or contractor of the Business, the Company or any Group Company (as the case may be) more than 12 months prior to the commencement of the Permitted Employment;

   There was no dispute that the “restraint period” expires on 30 June 2015.  It seems to me that there is no doubt that the husband is unable to engage in business activities in his area of experience and expertise until July 2015.

2. The husband’s uncontradicted evidence was that he has given consideration to the purchase of various businesses.  He maintained, quite reasonably in my view, that he is reluctant to commit to any new venture until he is aware of the outcome of these proceedings and his consequent financial position. Mr S gave evidence that he and the husband have discussed entering into another joint business venture but there is no current proposal.  With the husband’s history of hard work and economic success, I am confident that he will engage a fruitful business venture or well paid employment in the near future.

1. The wife is 43 years old and holds a degree which she obtained during the parties’ relationship.  She is currently undertaking another degree, as well as a counselling course.  She said that she expects to complete her second degree in 2016.  The wife studies one subject per semester, which involves one three hour lecture and a two hour tutorial each week. 

2. In her oral evidence the wife said that she expects to commence “working in [counselling]” in 2013, with a starting income of $80 to $120 per hour.  She gave evidence that she anticipates receiving rental of approximately $750 per week from the Suburb C property. 

3. The wife said in her oral evidence that she has made no enquiries about paid employment since the separation but denied that she has “elected not to work”.  It seems to me that she has the capacity to engage in gainful employment, as does the husband. 

4. The parties’ daughter W is only five years of age.  The final parenting orders mean that the wife will continue in her role as the primary carer of the parties’ daughter for many years into the future. 

5. The husband has a responsibility to support his partner and their children as well as the parties’ daughter.  I reject the submission on behalf of the wife that “it is highly unlikely that the wife will be able to rely on the husband for regular child support”.  As noted, I consider that he will most likely engage in a successful business venture or take on well-paid employment when his financial position crystallises following these proceedings.  His child support obligation for W will be assessed from time to time by the Agency.  The wife has had access to substantial joint funds for the support of herself and W since the parties’ separation and, in my view, could not reasonably assert that she has been deprived of money for those purposes.

6. Each of the parties has a relatively modest superannuation entitlement, being $97,934 and $77,194 for the husband and wife respectively.  Neither party will be able to access these funds for many years.  As they each have plans for income-generating ventures in future, it is likely that their superannuation benefits will increase in value before they exit the workforce.

7. On behalf of the wife it was contended that the husband “has engaged in waste” and that circumstance should be taken into account in her favour pursuant to s.75(2)(o). I reject this submission and repeat my observations to the effect that both parties spent money freely and irresponsibly after their separation.

8. The husband conceded that there should be an adjustment in favour of the wife pursuant to section 75(2). Having regard to all of these circumstances I find that there should be an adjustment of 10% in favour of the wife pursuant to s.75(2).

Result

1. Each of the parties proposed no change to the existing interests in superannuation benefits.  There was no evidence as to the time-frame or circumstances in which the parties accrued these benefits, which means that it is practically impossible for me to make findings as to their respective contributions to the funds.  There is no great discrepancy in the values of the two funds, which the parties cannot access for many years in any event.  For these reasons, I propose to exclude the superannuation benefits from the calculations which now follow as to the parties’ respective entitlements to the net pool of property.

2. On this basis the net pool of property has a value of $3,686,796, of which 50% is equal to $1,843,398.  It is my view that the furniture and contents in storage, at the Suburb C property and contained in the wife’s rented premises is currently in her possession and will be distributed to her as part of her entitlement to matrimonial property.

3. The husband has the following assets:

   1.      MM Street, Suburb KK  $2,450,000

   2.      Westpac Bank Account  $8,504

   3.      Mercedes Motor Vehicle  $62,200

   4.      50% Share of Furniture       $15,000

   5.      Artworks  $43,000

   6.      Artworks at Suburb KK property       $5,100

   7.      Wine  $7,500

   8.      Gayle Meredith & Associates Trust Account  $39,031

   9.      Paid Legal Costs   $200,300

   $2,830,635

   and has the following liabilities:

   1.      Mortgage on Suburb KK property      $1,200,000

   2.      Loan from Mr S         $50,000

   $1,250,000

   He thus holds net property to the value of $1,580,635 and this requires an additional $262,763 to bring up his entitlement of 50% of the net pool.

4. The wife holds the following assets:

   1.      Bond on Suburb LL Residence   $2,200

   2.      Rental for Suburb C Property   $5,851

   3.      Westpac Account  $281,576

   4.      Westpac Account  $286

   5.      Westpac Account  $74

   6.      Company A Shares   $9,875

   7.      VW Motor Vehicle       $6,100

   8.      Artworks   $188,275

   9.      Jewellery   $20,000

   10.    Broun Abrahams Burreket Trust Account   $52,488

   11.     Paid Legal Costs   $343,291

   12.    Furniture   $50,000

   13.    Wine       $7,500

   $967,516

   She has no liabilities and thus requires an additional $875,882 to bring up her entitlement of 50% of the net pool of property.

5. The wife sought orders, inter alia, which would constitute her the sole owner of the Suburb C property.  As it happens, that property has an agreed value of $875,000.  A neat means of achieving an equal division of the parties’ net assets would thus be to cause the wife to receive the Suburb C property.  The controlled monies account will be distributed as to $262,763 to the husband and the balance to the wife.  Otherwise, all items of property will remain in the sole ownership of the party with present possession and control.

6. The effect of such orders will be that the husband retains an equity of some $1.25million in the Suburb KK property; a motor vehicle and will have cash reserves of about $270,000.  The wife will receive the unencumbered Suburb C property, which is an income-producing asset, and have a motor vehicle and cash reserves of some $282,000.  She is at liberty to liquidate part or all of the artworks valued at $188,275 and Company A shares worth $9,875 if she chooses at some point in the future.  It seems to me that this division of property will enable each of the parties to move ahead with their lives on a just and equitable basis.

Child Support Departure Application

1. On behalf of the husband it was submitted that this application should not be entertained at this stage of the severance of the parties’ financial relationship. It was pointed out that neither party is in receipt of an income and “both of their prospects are unclear”.  It was also submitted that the wife’s expenses were “unreliable and seemed devoid of common sense”.  Further, it was suggested that the wife should await the crystallisation of the parties’ financial circumstances following judgment and then adopt the administrative procedure available to her through the auspices of the Child Support Agency.

2. It seems to me that there is considerable force in these submissions.  I share the expressed concerns about the wife’s purported “necessary expenses”, which she set out in her affidavit as follows:

Item	Total	[The Wife]	[The child W]
Food	$334	$207	$127
Household supplies	$63	$46	$17
House repairs	$46	$46	$nil
Gas & electricity	$129	$65	$64
Telephone (landline)	$28	$28	$nil
Motor vehicle
Petrol	$123	$123	$nil
Maintenance	$85	$85	$nil
Tolls	$34	$34	$nil
Car parking	$32	$32	$nil
Clothing and shoes	$89	$59	$30
Children’s activities/ hobbies/ entertainment/ toys/ books	$30	$nil	$30
Child care	$280	$nil	$280
Medical, dental, optical, counselling	$62	$60	$2
Entertainment/hobbies	$60	$60	$nil
Holidays	$78	$54	$24
Education expenses, including fees and levies	$24	$24	$nil
Chemist/pharmaceutical	$1	$nil	$1
Cleaning (house/pool)	$112	$112	$nil
Repairs – furnishings and appliances	$nil	$nil	$nil
Dry cleaning	$5	$5	$nil
Books, magazines, newspapers, stationary, postage	$6	$6	$nil
Gifts – for other people	$24	$22	$2
Gifts – for [W]	$6	$nil	$6
Hairdressing, toiletries, skin care	$61	$61	$nil
Foxtel	$35	$25	$10
Internet	$15	$10	$5
Mobile phone	$9	$9	$nil
Taxi fares	$4	$4	$nil
Bank fees	$8	$8	$nil
Fines	$20	$20	$nil
Accountant’s Fees	$12	$12	$nil
Vet Fees (dog)	$17	$17	$nil
Total	$1,993	$1,395	$598

1. In her oral evidence the wife said that “these expenses related to [W] living at [Suburb D] and attending [OO School]”.  If that is so, these figures have no relevance to her current application for a child support departure order.  She claimed that “the relevant expenses for child support departure” were as set out in her Financial Statement of 14 August 2012.  In that document the wife deposed to the following expenses: 

Item	Total	[The wife]	[The child W]
Food	$342	$207	$135
Household supplies	$66	$46	$20
House repairs	$46	$46	$nil
Gas & electricity	$54	$27	$27
Telephone (landline)	$22	$11	$11
Motor vehicle petrol	$83	$28	$55
Motor vehicle maintenance	$53	$18	$35
Motor vehicle tolls	$25	$8	$17
Car parking	$32	$21	$11
Clothing and shoes	124	$83	$41
Children’s activities/ hobbies/ entertainment/ toys/ books	$30	$nil	$30
Child care	$80	$nil	$80
Medical, dental, optical, counselling	$12	$10	$2
Entertainment/hobbies	$80	$60	$20
Holidays	$378	$199	$179
Education expenses, including fees, uniforms and levies	$277	$222	$55
Chemist/pharmaceutical	$1	$nil	$1
Cleaning (house/pool)	$nil	$nil	$nil
Repairs – furnishings and appliances	$9	$5	$4
Dry cleaning	$14	$14	$nil
Books, magazines, newspapers, stationary, postage	$13	$13	$nil
Gifts – for other people	$25	$22	$3
Gifts – for [W]	$24	$nil	$24
Hairdressing, toiletries, skin care	$46	$37	$9
Internet	$9	$9	$nil
Mobile phone	$30	$13	$17
Bank fees	$4	$4	$nil
Fines	$14	$14	$nil
Vet Fees (…)	$39	$39	$nil
Storage Fees	$58	$58	$nil
Total	$1,990	$1,214	$776

1. There was limited exploration of these purported expenses in cross-examination.  I found less than convincing the wife’s responses to questions put to her about her supposed expenses.  For example she claimed that none of the expenses of her parents, who live with her, were included in this table.  She said, however, that her last electricity bill was for $700 which equates approximately to her figure of $54 per week.  She claimed that she did not reduce this amount to allow for her parents’ usage because they “are living with [her] temporarily”. 

2. In relation to the purported expense of $80 per week for child care, the wife maintained that this cost was incurred “on days when I attended uni and so I could study and when I was with my lawyer”.  She conceded, however, that her university commitments in the last semester fell within school hours.  She said that she could not remember the cost of child care.

3. I was at a loss to understand why the wife would be required to spend $46 per week for repairs to a rented property.  Similarly, I cannot imagine why it would be necessary for her to expend a total of $378 per week on holidays for herself and the child.

4. In my view, these examples demonstrate the unreliability of the wife’s evidence of the expenses upon which she relied in support of her application for a departure order.  For that reason, and because of the current lack of clarity as to the respective financial positions of the parties, I dismiss the wife’s application for a child support departure order.

I certify that the preceding one hundred and twenty one (121) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson delivered on 27 February 2013.

Associate:     

Date:              27 February 2013