Manichaeus & Manichaeus and ors
[2010] FamCA 397
•21 May 2010
FAMILY COURT OF AUSTRALIA
| MANICHAEUS & MANICHAEUS and ors | [2010] FamCA 397 |
| FAMILY LAW – PROPERTY – Just & equitable division of property between the parties – Special contributions – Treatment of Capital Gains Taxation and Goods & Services Taxation – Orders binding third parties FAMILY LAW – FINAL ORDERS – Final orders made and supplementary Judgment delivered after primary Judgment and proposed orders – Procedural fairness to third party (Australia & New Zealand Banking Group Limited ABN 11 005 357 522) pursuant to s 90AE(3) & s 90AE(4) of the Family Law Act 1975 (Cth) – Husband to the pay to the wife judgment sum within 14 days – If judgment sum not paid within 14 days, properties of the husband’s corporate group to be sold within stipulated timeframes |
| Family Law Act 1975 (Cth) ss 75(2), 79(1), 79(2), 79(4), 90AE(1), 90AE(2), 90AE(3), 90AE(4), 90AJ(3) |
| B Pty Ltd & Ors & K & Anor (2008) FLC ¶93-380 Black & Kellner (1992) FLC ¶92-287 Dawes & Dawes (1990) FLC ¶92-108 Ferraro & Ferraro (1993) FLC ¶92-335 Gallo v Dawson (1990) 93 ALR 479 Harris & Harris (1991) FLC ¶92-254 Hickey & Hickey & Attorney-General for the Commonwealth (2003) FLC ¶92-144 JEL & DDF (2001) FLC ¶93-075 Mallet v Mallet (1984) 156 CLR 605 McLay & McLay (1996) FLC ¶92-667 Noetel v Quealey (2005) FLC ¶93,230 Pastern & Pastern [2007] FamCA 620 Rosati & Rosati (1998) FLC ¶92-804 Stay & Stay (1997) FLC ¶92-751 Steinbrenner & Steinbrenner [2008] FamCAFC 193 Weir & Weir (1993) FLC ¶92-338 |
| APPLICANT: | Ms Manichaeus |
| RESPONDENT: | Mr Manichaeus |
| SECOND RESPONDENT: | M & L Pty. Ltd. |
| THIRD RESPONDENT: | Manichaeus Constructions Pty. Ltd. |
| FOURTH RESPONDENT: | P Street Pty. Ltd. |
| FILE NUMBER: | CAC | 857 | of | 2007 |
| DATE DELIVERED: | 21 May 2010 |
| PLACE DELIVERED: | Canberra |
| PLACE HEARD: | Canberra |
| JUDGMENT OF: | Faulks DCJ |
| HEARING DATES: | 1 – 3 July 2009 24 July 2009 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms A. Tonkin |
| SOLICITOR FOR THE APPLICANT: | Strong Law Pty. Ltd. |
| COUNSEL FOR THE RESPONDENT: | Self-represented litigant |
| SOLICiTOR FOR THE RESPONDENT: | Self-represented litigant |
| SOLICiTOR FOR THE SECOND RESPONDENT: | No appearance |
SOLICiTOR FOR THE THIRD RESPONDENT: | No appearance |
| SOLICiTOR FOR THE FOURTH RESPONDENT: | No appearance |
| COUNSEL FOR THE aUSTRALIA & NEW ZEALAND BANKING GROUP LIMTED ABN 11 005 357 522 (not a party): | Mr M. Roser |
| SOLICiTOR FOR THE aUSTRALIA & NEW ZEALAND BANKING GROUP LIMTED ABN 11 005 357 522 (NOT A PARTY): | Blake Dawson |
Orders
IT IS NOTED THAT:
The husband proposes to transfer a car formally driven by Mr RF, former Corporate Counsel to the Manichaeus Group, to the parties’ eldest son.
Based on the findings of fact in my Judgment of 21 May 2010, with corrections on those facts as accepted by the parties since that time:
a.the total value of the assets of the parties is $17,580,000;
b.the total value of the liabilities of the parties is $13,548,460.15;
c.the total value of the net assets of the parties is $4,031,539.85, rounded up to $4,032,000.
d.The value of the wife’s home is $500,000.
e.The value of the husband’s home is $635,000.
If all of the properties were to be sold, then in accordance with the terms of my Judgment of 21 May 2010, Ms Manichaeus (‘the wife’) would receive 53.5 per cent of $4,032,000, that is $2,157,120, rounded up to $2,158,000. Mr Manichaeus (‘the husband’) would receive 46.5 per cent of $4,032,000, that is approximately $1,875,000.
As a consequence of the orders I make hereunder, the parties are to retain proprietary ownership of the houses in which they presently reside, and, thereafter, the wife is to receive 57 per cent of the total remaining net assets of the parties and the husband is to receive 43 per cent of the total value of the remaining net assets of the parties.
Discounting the value of the wife and the husband’s house, the total value of the remaining net assets is $2,897,000. It is intended by the orders that appear hereunder that the wife will receive 57 per cent of this sum (a notional value of $1,651,290) and the husband will receive 43 per cent of this sum (a notional value of $1,245,710).
The Manichaeus Group is the nomenclature which refers to the group of corporate entities as identified in the diagram attached to my Judgment of 21 May 2010.
IT IS ORDERED THAT:
The wife is declared to be the owner both at law and in equity of the property situate and known as A Street, F, in the Australian Capital Territory (ACT) (‘the A Street property’).
The wife will indemnify and keep indemnified the husband in respect of any outgoings on the A Street property as and from the date of these orders.
The husband is declared to be the owner both at law and in equity of the property situate and known as B Street, ACT (‘the B Street property’).
The husband will indemnify and keep indemnified the wife in respect of any outgoings on the B Street property as and from the date of these orders.
The wife is declared to be the owner both at law and in equity of Mazda 6 vehicle, registration number ‘…’.
The husband is declared to be the owner both at law and in equity of the Toyota Landcruiser, registration number ‘…’.
The husband will pay the sum of one million two hundred and fifty eight thousand dollars ($1,258,000) (‘the Judgment sum’) to the wife within 14 days of the date of these orders.
In the event that the husband does not pay the Judgment sum to the wife, the husband will:
a.list the following (‘Group A’) properties for sale:
i.Unit 2, 1 P Street, P, ACT immediately;
ii.Unit 1, 1 P Street, P, ACT immediately (on the basis that a sale will be by auction within 35 days);
iii.5 O Street, N, ACT immediately (on the basis that a sale will be by auction within 35 days);
iv.Upon exchange of contracts for Unit 1, 1 P Street, P, ACT, then K Street, ACT immediately;
v.Upon exchange of contracts for K Street, ACT, then 3, 5 & 7 P Street, P, ACT (to be offered for sale in one line);
1. In each case, the listed Group A properties will be sold:
a. at a price agreed to by the husband and the wife or in default thereof at a price nominated by the President of the Real Estate Institute of the ACT or his nominee;
b. with a real estate agent agreed to by the husband and the wife or in default thereof by an agent nominated by the President of the Real Estate Institute of the ACT or his nominee;
c. with a solicitor as agreed to by the husband and the wife or in default thereof Phelps Reid solicitors;
2. If any of the listed Group A properties are not sold within 75 days of their being listed for sale in accordance with these orders then such properties as remain unsold are to be listed for auction at the first available auction date with a reserve price as agreed by the husband and wife or in default thereof as determined by the President of the Real Estate Institute of the ACT or his nominee;
3. Upon sale of the listed Group A properties, the net sale proceeds after deduction of reasonable sale expenses and legal expenses associated with the sale and any Capital Gains Tax (CGT) and Goods & Services Tax (GST) (should CGT or GST be payable) is to be paid in permanent reduction of the debts of the entities within the Manichaeus Group (as that term has been previously described in my Judgment) secured with the ANZ Bank, [which were noted as in July 2010 to be in the order of twelve million, two hundred and eighty nine thousand, two hundred and thirty nine dollars and nine cents ($12,289,239.09), but which sum it is noted from time to time may vary, either by the addition of interest in respect to the said sum or by other fees that ANZ Bank may impose in accordance with their proper agreement between the Manichaeus and the ANZ Bank. It is further noted that the sum will reduce as a result of the proceeds of each sale being paid to the ANZ Bank] and thereafter as to 57 per cent to the wife and 43 per cent to the husband.
b.list the following (‘Group B’) properties for sale within 90 days:
i.W Street, N, ACT;
ii.6 O Street, N, ACT;
iii.4 O Street, N, ACT;
iv.7 O Street, N, ACT;
1. the listed Group B properties will be sold:
a. by a method of sale (auction or private treaty) and in accordance with the marketing recommendations of the President of the Real Estate Institute of the ACT or his nominee;
b. at a price nominated by the President of the Real Estate Institute of the ACT or his nominee;
c. with a real estate agent agreed to by the husband and the wife or in default thereof by an agent nominated by the President of the Real Estate Institute of the ACT or his nominee;
d. with a solicitor as agreed to by the husband and the wife or in default thereof Phelps Reid solicitors;
2. If any of the listed Group B properties are not sold within 150 days of the date of these orders then such properties as remain unsold are to be listed for auction at the first available auction date with a reserve price as agreed by the husband and wife or in default thereof as determined by the President of the Real Estate Institute of the ACT or his nominee;
3. Upon sale of the listed Group B properties, the net sale proceeds after deduction of reasonable sale expenses and legal expenses associated with the sale and any Capital Gains Tax (CGT) and Goods & Services Tax (GST) (should CGT or GST be payable) is to be paid in permanent reduction of the debts of the entities within the Manichaeus Group (as that term has been previously described in my Judgment) secured with the ANZ Bank, and thereafter as to 57 per cent to the wife and 43 per cent to the husband.
c.list the following (‘Group C’) properties for sale within 150 days:
i.D Street, N, ACT;
ii.M Street, N, ACT;
1. the listed Group C properties will be sold:
a. by a method of sale (auction or private treaty) and in accordance with the marketing recommendations of the President of the Real Estate Institute of the ACT or his nominee;
b. at a price nominated by the President of the Real Estate Institute of the ACT or his nominee;
c. with a real estate agent agreed to by the husband and the wife or in default thereof by an agent nominated by the President of the Real Estate Institute of the ACT or his nominee;
d. with a solicitor as agreed to by the husband and the wife or in default thereof Phelps Reid solicitors;
2. If any of the listed Group C properties are not sold within 210 days of the date of these orders then such properties as remain unsold are to be listed for auction at the first available auction date with a reserve price as agreed by the husband and wife or in default thereof as determined by the President of the Real Estate Institute of the ACT or his nominee;
3. Upon sale of the listed Group C properties, the net sale proceeds after deduction of reasonable sale expenses and legal expenses associated with the sale and any Capital Gains Tax (CGT) and Goods & Services Tax (GST) (should CGT or GST be payable) is to be paid in permanent reduction of the debts of the entities within the Manichaeus Group (as that term has been previously described in my Judgment) secured with the ANZ Bank, and thereafter as to 57 per cent to the wife and 43 per cent to the husband.
The husband be, and is hereby restrained from, borrowing further money from the ANZ Bank, or doing any act or thing which would increase the indebtedness of the Manichaeus Group to the ANZ Bank.
Nothing contained in the preceding orders in relation to the sale of the properties precludes the ANZ Bank from exercising its powers pursuant to their current documentation between the ANZ Bank and the Manichaeus Group to enforce their security in accordance with that documentation or to seek an accelerated sale of the properties upon termination of the current arrangements on 17 October 2010. It is noted, however, that subject only to the ANZ Bank’s exercising those rights, the ANZ Bank has agreed to the program set out above for the sale of the properties.
Within 14 days, the husband will pay the wife the sum of $9,000 together with interest calculated from 1 July 2010 in accordance with the Family Law Rules2004, as required by my orders of 16 March 2010.
a.In the event that the husband fails to this sum within 14 days, the sum of $9,000 together with interest calculated to the date of payment shall be deducted from the husband’s share before any payment is made to the husband pursuant to these orders.
That if the husband has not already done so he pay forthwith the costs of CB Richard Ellis in the sum of $3,890 for the preparation of valuation reports of properties situate at K Street, ACT and D Street, N, ACT as required by my orders of 20 October 2009.
a.In the event that the husband fails to pay this sum within 14 days, the sum of $3,890 shall be deducted from the husband’s share before any payment is made to the husband pursuant to these orders.
Within seven (7) days of the date of these orders, the wife will do all acts and things and sign and execute all documents necessary to resign as a director of any of the companies or entities within the Manichaeus Group and transfer her shareholding to the husband or his nominee.
Subject to these Orders, the husband will indemnify and keep indemnified the wife absolutely from any claims against her arising from the activities of Manichaeus Group and any corporation in which he is a shareholder and director, including claims for directors’ loans. Such indemnity will include any legal costs incurred by the wife in defending any such claims, actions or demands.
If the husband or the wife should fail within 7 days after the periods nominated in these orders above (on the certification in writing by the wife or her solicitors that the husband has so failed) to execute (or sign) any document or to perform any action required in relation to such sale(s), then pursuant to s 106A(1) of the Family Law Act 1975 (Cth) a Registrar of the Family Court of Australia in Canberra is appointed to sign such documents or perform such action in the husband’s stead.
Otherwise, each of the parties be and is hereby declared to be the owner both at law and in equity of all the property in his or her possession or control.
Any material produced subpoena which became an exhibit will be returned by the Court at the expiration of the appeal period to the person producing it. Any material produced by a party which became the subject of an exhibit will be returned by the Court to the party at the expiration of the appeal period.
All material produced subpoena which did not become the subject of exhibits will be returned by the Court to the persons producing it as soon as practicable.
That all extant applications, save as to any fresh application the parties may wish to make in relation to the question of costs filed before 4.00 pm on 9 August 2010, are discharged.
The matter is removed from the pending cases inventory.
IT IS NOTED that publication of this judgment under the pseudonym Manichaeus & Manichaeus is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| Family Court of Australia at canberra |
FILE NUMBER: CAC 857 of 2007
| MS MANICHAEUS |
Applicant
And
| MR MANICHAEUS |
Respondent
And
| M & L PTY LTD |
Second Respondent
And
| MANICHAEUS CONSTRUCTIONS PTY LTD |
Third Respondent
And
| P STREET PTY LTD |
Fourth Respondent
SUPPLEMENTARY REASONS FOR JUDGMENT
Following delivery of my primary Judgment, I gave the Australia & New Zealand Banking Group Limited ABN 11 005 357 522 (‘the ANZ Bank’) the opportunity to be heard pursuant to s 90AE(3) and s 90AE(4) of the Family Law Act 1975 (Cth).
Following several procedural listings involving the parties and the ANZ Bank on 11 June 2010, 24 June 2010 and 6 July 2010, the matter was listed before me on 12 July 2010 to finalise the orders I proposed to make in relation to these proceedings.
The husband has today filed an application in a case, effectively seeking, inter alia, to pay the judgment sum to the wife in instalments within five years.[1]
[1] Application in a case, filed 12 July 2010, Part D.
I have indicated that, notwithstanding the husband’s submissions to the Court, I am not prepared to make an order for the payment of the Judgment sum to the wife by instalments. The reasons for that are clearly set out in the exchanges that have occurred from the date on which I delivered my primary Judgment. Furthermore, the husband’s second order sought is really in the nature of the dispute as to what I have found in the course of the proceedings subsequent to the primary Judgment. I have already indicated to the husband that the remedy in relation to that is appeal, not a change to my findings and my orders.
The third matter that the husband raised related to an adjournment for 30 days. I am not prepared to grant that at this point. There is no reason to do so in the light of the overall picture of these proceedings.
The husband then raises the issue of his claimed expertise in relation to the property market in the Australian Capital Territory. Notwithstanding the submissions of Ms Tonkin, I agree that the husband, in relation to the Group A properties, which relates principally to the P properties, should be adhered to, which follows the pattern that he has suggested in his Minute of Proposed Orders Sought. I note in this regard that that includes the sale of some of the properties in one line. However, thereafter the sale of the properties in groups B and C, two groups which ought to be subject to agreement as to the selling agent and also agreement as to price and the method of sale, there are provisions set out in the amended minutes submitted on behalf of the wife which I believe appropriately deal with this matter.
There was also the issue of the retention by each of the parties both of their motor vehicles and of the house in which he or she is currently living. I believe it is appropriate that each of them should retain the property in which they presently reside.
To effect the division of property that I have proposed in my primary Judgment would require the net proceeds of the sale of the various properties in one of two ways. Either all of the property, including the homes of each of the parties, be sold, in which case the division of the properties would be as to 53.5 per cent to the wife and 47.5 per cent to the husband. Alternatively, if each of the parties were to retain the property that he or she is currently living in and those properties were then excised from the net pool of property, to achieve the same effect it would be necessary for the percentages to be on the basis of approximately 57 per cent to the wife and 43 per cent as to the balance to the husband.
The calculations that I have made in my primary Judgment have been adjusted to take account of the properties that were omitted from it originally and have taken account of the adjustment that it necessary as a result of the removal of those two things. Specifically:
a.the total value of the assets of the parties is $17,580,000 (which includes the addition of the Mazda 6 vehicle ($10,000); the addition of Unit 5, 1 P Street, P, ACT (as per Asset Schedule at hearing on 29 January 2010) ($470,000); and less an adjustment for Units 1, 2, & 6 1 P Street, P, ACT (as per Asset Schedule at hearing on 29 January 2010) ($7,000));
b.the total value of the liabilities of the parties is $13,548,460.15;
c.the total value of the net assets of the parties is $4,031,539.85, rounded up to $4,032,000.
I indicated to the parties prior to the delivery of final orders that I proposed to delete paragraph [93] of my primary Judgment and in substitution make an order for the administrative costs of the ANZ Bank in relation to proposed transfers of property between the parties to be borne equally by the parties. As I have not made an order for the transfer of these properties, this is unnecessary.
I make orders in accordance with my primary and supplementary Reasons for Judgment. The matter is removed from the Pending Cases Inventory.
I certify that the preceding eleven (11) paragraphs are a true copy of the reasons for judgment of the Honourable Deputy Chief Justice Faulks.
Senior Legal Associate:
Date: 20 July 2010
| Family Court of Australia at canberra |
FILE NUMBER: CAC 857 of 2007
| MS MANICHAEUS |
Applicant
And
| MR MANICHAEUS |
Respondent
And
| M & L PTY LTD |
Second Respondent
And
| MANICHAEUS CONSTRUCTIONS PTY LTD |
Third Respondent
And
| P STREET PTY LTD |
Fourth Respondent
REASONS FOR JUDGMENT
Introduction
These were proceedings brought for the division of the property of the applicant and the respondent pursuant to s 79(1) of the Family Law Act 1975 (Cth). There are three children of the marriage who are fortunately not subject of the legal dispute between the parties.
The applicant wife filed an Initiating Application on 3 May 2007, seeking inter alia, “That within 60 days the husband pay to the wife the sum of $4 million.” Subsequently, by way of Amended Application filed on 25 February 2009, the applicant wife sought the following final orders which appear at Endnote 1.Endnote 1 At the end of the final hearing in January 2010, the applicant wife submitted the Minute of Orders sought filed in Court on 28 January 2010 which appears at Endnote 2.Endnote 2
The respondent husband filed a Response to Initiating Application on 29 September 2008 in which he sought the Minute of Orders which appears at Endnote 3.Endnote 3 This Response was filed by Mr FR, Corporate Counsel to the Manichaeus Group. Just prior to the final hearing on 1 July 2009, the husband advised that he would represent himself after previously indicating that Mr FR would be his legal representative. It was subsequently revealed during the course of the proceedings that Mr FR’s services had been terminated and that he had been retrenched. Consequently, the husband did not file any discernible Minute of Orders sought, other than of the following nature (the following is an email from the husband of 30 June 2009 to my Legal Associate in reply to a request issued by me to provide a Minute of Orders Sought prior to or on 1 July 2009):
Dear [Legal Associate]
I am seeking orders as follows
1. Since I have no equity myself nor any of my companies, I am seeking that so far last 5 year applicant received more than $700K there would be no more moneys be payable to applicant
2. Since my income is close to zero, there would be not payment of moneys be payable to applicant
3. All the entities be left as it is
4. My business of [Manichaues] group should not be broken up
5. Access to the kids left as it was
6. All the thighs[2] between applicant and respondent be broken up.
Kind Regards,
[the husband]
[2] I assume that he actually meant “things.”
The husband also suggested in an affidavit filed in these proceedings that:[3]
11. The application of applicant under Family Court of Australia number CAC 857/2007 for property settlement should be settled and orders should be sought because ongoing of this matter in Family Court of Australia is in nobody’s interest
12. We are seeking of orders to separate parties without sending [Manichaeus] Group to the bankruptcy to achieve that, as per all financial information supplied to Court amount of money can be awarded should be small.
[3] Affidavit of the husband, filed 31 August 2009, [11] & [12].
Following very passionate but somewhat quixotic final submissions about how I should apply the “universal law” and ensure that his children do not grow up to be Ivan Milat, the husband essentially summed up his preferred solution to the dispute as follows:[4]
So my solution to this is let her have the house [A Street, F, Australian Capital Territory (ACT)]. She is having a good life; she has got a job. She is enjoying life. Let me struggle to build up this business, bring up those three kids.
[4] Transcript of proceedings, 29 January 2010, 187.
The written submissions of the wife filed by in Court on 28 January 2010 appear at Endnote 4.Endnote4
Background
The wife was born in 1968 and is presently aged 42 years. The husband was born in 1959 and is presently aged 51 years.
The parties commenced cohabitation in 1989 and were married in 1990.
There are three children of the marriage, L, born in July 1993, presently aged 16 years, U, born in May 1995, presently aged 15 years, and E, born in May 1997, presently aged 13 years.
There is no doubting the energy of the husband. The husband is principally involved (and the wife contributed to during the course of the relationship) the development of a substantial commercial and residential real estate portfolio. Many properties were bought, developed, rented and sold. A chronology supplied by the applicant wife appears as an Endnote 5.Endnote5 It is included illustratively as to the volume and the complexity of the transactions. I do not necessarily accept the accuracy of all of the facts set out in the chronology. It was an aide memoire, but it suffices to illustrate the point I have just made.
A diagram of the Manichaeus Group (this information was submitted by the wife) appears at the end of this Judgment.
Relevant law
The law in relation to alteration of property interests is relatively well‑settled, and the following (so-called) four stepped approach is to be followed:
a)Identify and value the property, assets, financial resources and liabilities of the parties as at the date of the hearing;
b)Identify relevant contributions and assess them within the meaning of s 79(4)(a) to s 79(4)(c) of the Family Law Act 1975 (Cth) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties;
c)Consider relevant matters referred to in s 79(4)(d) to s 79(4)(g) of the Family Law Act 1975 (Cth); and
d)Ensure that orders adjusting the property, assets and liabilities of the parties are just and equitable.[5]
[5] Hickey & Hickey & Attorney-General for the Commonwealth (2003) FLC ¶92-144, 78,386 (Nicholson CJ, Ellis & O’Ryan JJ) (‘Hickey’).
In Ferraro & Ferraro, the Full Court of the Family Court (Fogarty, Murray & Baker JJ) extensively considered the decision of the High Court of Australia in Mallet & Mallet.[6] Following their Honours’ examination of that decision, the Full Court identified that there are obvious differences between the roles colloquially referred to as “breadwinner” and “homemaker”, however, contributions which are “special” made by a party in either role should be appropriately recognised when adjusting the property interests of the parties pursuant to s 79(1) of the Family Law Act 1975 (Cth). The Full Court relevantly stated:[7]
The task of evaluating and comparing the parties' respective contributions where one party has exclusively been the breadwinner and the other exclusively the homemaker, is a most difficult one to perform because the evaluation and comparison cannot be conducted on a "level playing field". First, it involves making a crucial comparison between fundamentally different activities, and a comparison between contributions to property and contributions to the welfare of the family. Secondly, whilst a breadwinner contribution can be objectively assessed by reference to such things as that party's employment record, income and the value of the assets acquired, an assessment of the quality of a homemaker contribution to the family is vulnerable to subjective value judgments as to what constitutes a competent homemaker and parent and cannot be readily equated to the value of assets acquired. This leads to a tendency to undervalue the homemaker role.
However, there are cases where the performance of those roles has what may be described as "special" features about it either adding to or detracting from what may be described as the norm. For example, in relation to the homemaker role the evidence may demonstrate the carrying out of responsibilities well beyond the norm as, for example, where the homemaker has the responsibility for the home and children entirely or almost entirely without assistance from the other party for long periods or cases such as the care of a handicapped or special needs child. On the other hand, in the breadwinner role the facts may demonstrate an outstanding application of time and energy to producing income and the application of what some of the cases have referred to as "special skills". Within either role there may be cases where the evidence demonstrates a neglect of those responsibilities or a wasting of income or assets. This last aspect, however, is to be distinguished from any investigation of fault or misconduct: see In Marriage of Ferguson (1978) 34 FLR 342. (Footnotes of the Full Court.)
[6] Mallet v Mallet (1984) 156 CLR 605 (‘Mallet’).
[7] Ferraro & Ferraro (1993) FLC ¶92-335, 79,572 (Fogarty, Murray & Baker JJ) (‘Ferraro’).
The Full Court of the Family Court in Ferraro, applying the principles as espoused in Mallet, concluded that there is no “presumption of equality” between the contributions of a party to a marriage. Their Honours stated:[8]
In Mallet's case, Gibb CJ (at 610) referred to the circumstance that Parliament had not provided that a wife's homemaker contribution and the husband's financial contribution are deemed to be equal. It is equally true to say that the Parliament has not provided that they cannot or may not be equal. It is a matter of evaluating those contributions in the individual case but against an evolving social and legislative background. The evolving legislative background is the changes in 1983. There is also, we think, an evolving social background which gives greater emphasis to the equality and partnership concepts in a marriage and, no doubt, this evolutionary process will continue. Dawes[9] and Harris[10] illustrate the shift towards a greater societal recognition of the worth of domestic labour and towards giving real substance to the phrase "substantial and not token" rather than paying lip-service to it. (Footnotes of the Full Court.)
[8] Ibid, 79-579.
[9] Dawes & Dawes (1990) FLC ¶92-108 (Lindenmayer, Strauss & Cohen JJ).
[10] Harris & Harris (1991) FLC ¶92-254 (Ellis, Strauss & Lindenmayer JJ).
On the subject of business losses and who should bear them ordinarily, the Full Court of the Family Court in Ferraro also relevantly opined:[11]
Whilst the application of skill may be the same, the difference seems to be that in one case the application of that skill produces assets which fall within what may be described as the medium range whilst in cases such as that before us, it produces assets in the high range. We should perhaps add, as more recent experience demonstrates, they can also produce a high range of losses, although it never seems to be suggested in those cases that the losses should be shared other than equally.
[11] Ibid, 79-580.
In JEL & DDF, Holden and Guest JJ (with whom Kay J separately agreed), having reviewed the law up to that point, relevantly stated:[12]
The issue of a "special" or "extra" contribution by the husband or wife is a question of fact. In our view, the determination of such a contribution is not necessarily dependent upon the size of the asset pool or the "financial product" achieved by the parties.
This view would seem to be more compatible with what the Full Court said in Ferraro (at 170-171) and to which we have earlier referred. The concept of a "special" or "extraordinary" skill or factor cannot, without more, be rendered nugatory by the fact that the assets accumulated by the parties did not reach the magnitude of many millions. To suggest otherwise would seem, in our view, to defy the proper jurisprudential development of this area of family law and fail to meet the relevant provisions of the Act.
One can imagine a number of examples where a "special" contribution may not necessarily result in assets to a value of millions of dollars but which ought nevertheless to be recognised. We emphasise that "special", "extra" or "extraordinary" contributions made in the role as homemaker and parent or to the welfare of the family ought to be accorded the same recognition.
This Court has acknowledged that contributions made in this role may be accorded additional weight where the role has been performed in difficult circumstances such as in domestic violence situations or where the role has been performed without the financial, physical or emotional support of the other party: see, for example, Ferraro, In Marriage of Kennon (1997) 139 FLR 118 and In Marriage of C (1998) 146 FLR 406. (Footnotes of the Full Court.)
[12] JEL & DDF (2001) FLC ¶93-075, 88,331 (Holden & Guest JJ).
Holden and Guest JJ also identified the following general principles in relation to “special contribution” cases:[13]
[13] Ibid, 88, 334.
It seems to us that the following general principles can be said to arise from the cases referred to in these reasons, namely:
(a) There is no presumption of equality of contribution or "partnership".
(b) There is a requirement to undertake an evaluation of the respective contributions of the husband and the wife.
(c) Although in many cases the direct financial contribution of one party will equal the indirect contribution of the other as homemaker and parent, that is not necessarily so in every case.
(d) In qualitatively evaluating the roles performed by marriage partners, there may arise special factors attaching to the performance of the particular role of one of them.
(e) The Court will recognise any such special factors as taking the contribution outside the "normal range" in the sense that that phrase was understood by the Full Court in McLay.[14]
(f) The determination of an issue of whether or not a "special" or "extra" contribution is made by a party to a marriage is not necessarily dependent upon the size of the asset pool or the "financial product". When considering such an issue, care must be taken to recognise and distinguish a "windfall" gain.
(g) Whilst decisions in previous cases where special factors were found to exist may provide some guidance to judges at first instance, they are not prescriptive, except to the extent that they purport to lay down general principles.
(h) It is ultimately the exercise of the trial judge's own discretion on the particular facts of the case that will regulate the outcome.
(i) In the exercise of that discretion, the trial judge must be satisfied that the actual orders are just and equitable, and not just the underlying percentage division. (Footnotes of the Full Court.)
[14] McLay & McLay (1996) FLC ¶92-667 (Nicholson CJ, Fogarty & Dessau JJ).
In McLay & McLay, the Full Court of the Family Court (Nicholson CJ, Fogarty & Dessau JJ) reiterated that there is no presumption of equality, rather there is a likely outcome of equality when one undertakes a “qualitative evaluation” of the parties’ respective contributions. The Full Court relevantly stated:[15]
The reference to "normal range" in Ferraro…is not a return to a presumption of equality as a starting point or any other presumption or starting point but is a practical recognition of the circumstance that in many marriages each party contributes in ways which might be described as the normal way in our society and that in any qualitative evaluation of those matters the likely outcome is one of equality. This is repeatedly recognised in the day-to-day experience of this Court over many years in dealing with a very large number of s 79 cases. In many cases any assessment of the facts readily makes it clear that an outcome of equality within [s 79(4)(a) to (c)] is most likely and that a lengthy trial in which those facts are examined in detail will produce no different result. It will only mean significant extra costs to the parties and an unproductive use of the time of the Court. Of course the other factors in s 79, especially the s 75(2) factors, may call for a different outcome but that is a separate matter.
[15] McLay & McLay (1996) FLC ¶92-667, 82,902 (Nicholson CJ, Fogarty & Dessau JJ).
On the issue of non-disclosure by a party in relation to property or financial resources, in Black & Kellner, his Honour Nicholson CJ (with whom Ellis & Cohen JJ agreed), relevantly stated:[16]
…the first step in proceedings for a property settlement is for the Court to ascertain the wealth of the parties and in this regard it is of interest to note the remarks of the Full Court in the case of In Marriage of Giunti [1986] FLC 75,548, particularly at 75,555 where the Court commented:
"It is obviously desirable as a general principle that the Court should first of all identify the pool of assets available and evaluate it. If each party complies with his or her obligation to make a full and substantive disclosure of their financial affairs -- see In Marriage of Briese (1985) 82 FLR 369, affirmed by the Full Court in In Marriage of Oriolo [1985] FLC 80,254 -- there is no problem, although there may be disputes as to valuation. However, if as is here, one party fails to fulfil that obligation, is it open to that party then to rely on the absence of satisfactory evidence to prevent the making of an order against him or her which otherwise justice and equity would require? It would be simple, if that were the case to evade the jurisdiction of this Court, not by outright refusal which would attract sanctions but by obfuscation and evasion."
The Full Court in In Marriage of Oriolo [1985] FLC 80,254 referred with approval to the remarks of Smithers J in the case of In Marriage of Briese (1985) 82 FLR 369, and it is perhaps worth reiterating portion of his Honour's statement where he said, after referring to the decision of the House of Lords in Livesey v Jenkins [1985] AC 424:
"I believe that the conclusion of the House of Lords in the case of UK Livesey v Jenkins is apposite, namely, that in financial proceedings between spouses, each party must make a full and frank disclosure of all material facts. In that case it was made clear that full and frank disclosure was required as a matter of principle in the light of the fact that it was the duty of the Court, taking into account a number of designated criteria, to make a decision which basically involved the exercise of discretion. This is quite different from common law litigation between strangers in which such a general duty does not exist, and obligations would only exist in so far as Statute or Court Rules required. In my view it is fundamental to the whole operation of the Family Law Act 1975 (Cth) in financial cases, that there is an obligation of the nature to which I have referred." (Footnotes of the Full Court.)
[16] Black & Kellner (1992) FLC ¶92-287, 79,133 (Nicholson CJ).
On the issue of deliberate non-disclosure, the Full Court of the Family Court (Nicholson CJ, Strauss and Nygh JJ) in Weir & Weir relevantly opined:[17]
This Court has pointed out in a line of cases leading up to the recent decision of the Full Court in In Marriage of Black (1992) 106 FLR 154, that it is the duty of a party involved in property proceedings in this jurisdiction to make a full disclosure of their financial affairs. See also In Marriage of Giunti [1986] FLC 75, 548 and In Marriage of Mezzacappa (1987) 90 FLR 350. It is clear enough from his Honour's findings in the present case that the husband had not done so and had in fact pocketed the proceeds of a substantial number of cash sales. It is obvious that in most cases of this nature it is difficult enough for the other party to establish that fact let alone establish the quantum of what has been taken.
It seems to us that once it has been established that there has been a deliberate non-disclosure, which follows from his Honour's findings in this case, then the court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.
It is true that in the case of In Marriage of Monte [1986] FLC 75, 534, the Full Court said that to found jurisdiction under s 79 of the Family Law Act 1975 (Cth) in relation to property other than that which had been identified, the trial judge was obliged to make a finding as to the existence and value of other undisclosed property, even though the unsatisfactory nature of the evidence made it necessary to express that finding in the most general terms both as to identity and value.
We confess to some difficulty with this proposition. We should have thought that the court's jurisdiction to make an order going beyond the identified property arises once there is sufficient evidence to support a finding that the party has not made a full disclosure of his or her assets.
The difficulty then arises as to what order should be made. However we are troubled by the proposition which seems to arise from In Marriage of Monte (supra) that if a party is either cunning enough or vague enough to cover his or her tracks sufficiently to prevent a court making a finding as to the amount that has not been disclosed, then the other party fails. We do not believe this to be the law and in so far as the decision in In Marriage of Monte supports such a proposition, we do not believe that it should be followed. (Footnotes of the Full Court.)
[17] Weir & Weir (1993) FLC ¶92-338, 79,593 (Nicholson CJ, Strauss & Nygh JJ).
Further, the Full Court of the Family Court in Stay & Stay has identified that a party has a positive obligation to make “full and frank disclosure of all relevant financial affairs.” In that case, their Honours stated:[18]
Once it is clear that there has been a non-disclosure, the Court should not be unduly cautious in making findings in favour of the innocent party: In Marriage of Black (1992) 106 FLR 154 and In Marriage of Weir (1993) 110 FLR 403. (Footnotes of the Full Court.)
[18] Stay & Stay (1997) FLC ¶92-751, 84,130 (Nicholson CJ, Ellis & Lindenmayer JJ).
The husband’s attitude to disclosure and his special contributions
I digress to deal with this matter at this point. The husband’s disclosure in this matter was, to put it at its kindest, gradual, confused, periodic and non‑comprehensive. Counsel for the wife would have me believe that this was a deliberate policy on his part and that his failure to provide information in an easily understandable fashion was, in some ways, sinister.
With the husband, it is difficult to determine to what extent his self‑representation is driven by ego or by financial circumstances or because he genuinely believed he could do a better job than any lawyer. The matter was adjourned three times. This usually occurred because on the day on which the matter came before the Court, the husband would arrive with a substantial lever‑arch folder filled with what might under some circumstances pass as an affidavit with various annexures. Sometimes the annexures were copies of original documents. Sometimes they were summaries produced by the husband. More often, they were summaries produced by his employees who laboured (I do not doubt diligently) to produce what he required of them over many hours. The consequence of conducting the hearing in this way, contrary to directions given for the production of relevant material long before the trial was scheduled to begin,[19] meant that uncovering what precisely was being “discovered” in a legal sense was difficult and confusing. Adjournments regularly occurred as a consequence and when the matter resumed, fresh arguments developed about how the values of properties increased or decreased or had been affected by market conditions or by vacancies in tenancies since the last time the matter was before the Court.
[19] Orders of Deputy Chief Justice Faulks of 30 September 2008; Orders of Deputy Chief Justice Faulks of 18 November 2008; Orders of Deputy Chief Justice Faulks of 27 November 2008; Orders of Deputy Chief Justice Faulks of 12 February 2009; Orders of Deputy Chief Justice Faulks of 13 March 2009; Orders of Deputy Chief Justice Faulks of 19 June 2009.
The episodic nature of the hearing largely generated by the husband’s (and there is really no other word for it) inept self-representation has made findings of fact difficult and has necessarily aroused suspicion on the part of the wife and her legal representatives about the honesty of the case presented by the husband.
Notwithstanding all of these factors, at the end of substantial cross‑examination, many documents produced and inspected and cross‑examined about, no evidence has been satisfactorily put before me that there is any hidden fund on the part of the husband or that funds have in some way have been channelled in to a separate vehicle or company or overseas. The can be no doubt that the size of the assets of the parties has shrunk. There is also no doubt that debts have increased. It seems more likely than not and I find, on the balance of probabilities, that to the extent that the net equity of the parties has diminished, it is logically attributable to ineffective share‑trading on the part of the husband or inappropriate business decisions or possibly the husband’s failure properly to assess and anticipate market trends.
While this may in some respects be seen as a “negative contribution”, such a term should properly only be assigned to instances of waste as that term is understood in legal proceedings. I do not find that there has been waste in that sense on the part of the husband in these proceedings.
I made earlier reference to the decisions of the Full Court of the Family Court in relation to “special contributions.” The counterpart to such special contributions and the effect that they might have is that entrepreneurs or those that might be said to have special skills will not always succeed. And when they do not, there will be a diminution of the property to be divided between the parties. To some extent, parties to a marriage have to accept the “good with the bad.” Sometimes it is “for worse” rather than “for better.”
The assets and liabilities of the parties
Although many days of the trial were spent in attempting to arrive at a comprehensive list of the assets of the parties and the values of the different assets, agreement was in effect reached at approximately 10.15 am on 29 January 2010.[20] At that point, the husband confirmed that I would be entitled to rely upon the figures contained in the “Court Value” column (in an aide memoire document entitled “Balance Sheet (Detailed in Assets and Equity) as at 28-01-10”). These figures were substantially agreed, with the possible exception of K Street, which the husband agreed at a figure of $440,000. This property had been subject of a valuation by CB Richard Ellis which put a range which included that figure and in the circumstances I find that is the value of that property.
[20] Transcript of proceedings, 29 January 2010, 108.
Accordingly, the assets of the parties under their corporate entities are as follows:
Assets Ownership Value B Street Husband $635,000 K Street Husband $440,000 Iranian property
Taken into account under s 75(2) of the Family Law Act 1975 (Cth)
5 O Street, N M & L Pty. Ltd. $1,200,000 M Street, N M & L Pty. Ltd. $3,140,000 7 O Street, N M & L Pty. Ltd. $1,000,000 6 O Street, N M & L Pty. Ltd. $980,000 Units 1-2, O Street, N M & L Pty. Ltd. $980,000 Units 1-4, W Street, N M & L Pty. Ltd. $2,130,000 Toyota Landcruiser M & L Pty. Ltd. $10,000 Mazda 6 D Street, N M & L Pty. Ltd. $3,400,000 A Street, F Wife[21] $500,000 N Street, F Manichaeus Constructions Pty. Ltd. Sold[22] Y Street, F Manichaeus Constructions Pty. Ltd. Sold[23] E Street, F Manichaeus Constructions Pty. Ltd. Sold[24] 3 P Street, P P Street Pty. Ltd. $420,000 5 P Street, P P Street Pty. Ltd. $420,000 7 P Street, P P Street Pty. Ltd. $460,000 Units 1, 2 & 6, 1 P Street, P P Street Pty. Ltd. $1,327,000 Bank guarantee
Reasons for Judgment below
$65,000 Total $17,107,000 [21] Pursuant to orders of Deputy Chief Justice Faulks of 20 October 2009 (Order 6) and 21 December 2009 (Orders 2 & 3), A Street, F, was transferred, by way of memorandum of transfer executed by a Registrar of the Family Court of Australia pursuant to s 106A of the Family Law Act 1975 (Cth), from Manichaeus Constructions Pty. Ltd. to the wife.
[22] This property and the two properties listed immediately below were sold. The proceeds were, I find, absorbed into the day-to-day business activities of the Manichaeus Group.
[23] Ibid.
[24] Ibid.
There were additional items abandoned by the wife as part of her claim for inclusion in the property after evidence had been given. These included the R Business, shares in ABN-AMRO Morgan’s Account Numbers …279 and …519, shares in ABN-AMRO Morgan’s Account Number …280, and shares in ABN-AMRO Morgan’s Account Numbers …401, …436 and …219. These represent balances of business accounts which varied from time‑to‑time. They should be disregard from the property pool.
There were also leveraged equities in the sum of $138,261 which were admitted as having been sold but the wife but which she submitted should be added back into the pool. On balance, I am satisfied that the money received from the sale of shares was applied to the businesses and there is no basis upon which I should effect the add-back as suggested. In addition, there was a sum of $2,509 in a bank account in the name of ML Manichaeus Corporation Pty. Ltd. In my opinion, this should be disregarded from the asset pool as it represents a balance “from time‑to‑time.” The same might well be said about the bank account for L Pty. Ltd. for $4,160 or K Pty. Ltd. for $151. They are working amounts that will vary from time to time and are therefore disregarded.
In a slightly different category is the amount originally claimed as part of the liabilities by the husband being a liability (so the husband claimed) for M & L Pty. Ltd. for $65,000 as a bank guarantee. The comments made by Ms Tonkin in her final submissions about this matter are justified. The material produced by the husband in his “Folder 9”[25] in support of his claim for the $65,000 reveals, in fact, it is a credit for him with the ACT Planning & Land Authority. It may well be that the sum was generated by a borrowing from the National Australia Bank, although that it is not established by any of the evidence before me, but if it were it has already been taken into account in the other figures. It appears that M & L Pty. Ltd. has a credit for $65,000. Accordingly, that should be added back into the pool of assets.
[25] Effectively a series of annexures to his affidavit filed 18 December 2009.
Liabilities
Counsel for the wife filed among her final submissions a balance sheet as at the 27 January 2010 which set out a number of liabilities and made comments about the claims made by the husband in respect of liabilities principally in his “Folder 9.” The liabilities claimed to be applicable by the wife were $13,040,278.
I make reference to the applicant wife’s submission in respect of liabilities as deposed in the affidavit of the husband filed 18 December 2009. For a variety of reasons I have nominated later in my Judgment, my views about Capital Gains Tax (CGT) and Goods & Services Tax (GST) liabilities and have taken them into account under s 75(2) of the Family Law Act 1975 (Cth). Accordingly, in my opinion, they are not properly included as liabilities in the balance sheet. To that extent, therefore, I accept the submissions by Ms Tonkin on behalf of the wife and have deleted the appropriate figures from the list of liabilities.
Liabilities of each entity Wife’s value Husband’s value Husband (personally held) $518,130 $945,373.95 M & L Pty. Ltd. $9,138,148 $10,940,563.18 Manicheaus Constructions Pty. Ltd. $1,300,000 $1,440,302.43 P Street Pty. Ltd. $2,084,000 $2,623,497.79 ML Manichaeus Corporation Pty. Ltd. Not known $14,993.74 Manichaeus Pty. Ltd. Not known $168,702.61 L Pty. Ltd. Not known $14,927.29 K Pty. Ltd. Not known $39,709.31 Total $13,040,278 $16,188,070.30
Dealing with each of these items separately, and following in general terms the submissions of the wife as the agenda for this consideration, I make the following findings and comments.
The Husband (personally held)
The wife’s submission in respect of B Street is rejected. I am unsatisfied from the evidence that if the property was unencumbered prior to separation or prior to the creation of the loan facility that the money raised as a result of the borrowing was not applied for business purposes. It is one of the many unanswered questions about what happened to money from separation and even prior to separation. However, in my opinion, the bank liability which clearly exists and is demonstrated to exist should not be included. Accordingly, the wife’s column of liabilities should be increased by $340,868.59. Otherwise, I agree that the other expenses claimed by the husband other than the CGT & GST (which have been dealt with differently in my Judgment below) are matters which should be included in the Profit and Loss Account rather than on any balance sheet.[26] The running expenses ought no more to be included in this balance sheet than should the current income or the income that has been received from separation until the time of trial.
[26] I acknowledge that the term “balance sheet” is used analogously not precisely in family law.
The same applies to the other claims of this nature that are made by the husband.
M &L Pty. Ltd.
I have already dealt with this in part by adding the $65,000 deposit to the assets column. Otherwise, I accept the submissions of the wife with the qualifications that I have previously made about CGT.
Manichaeus Constructions Pty. Ltd.
The submissions by the wife include an inaccuracy in the schedule, particularly in relation to CGT. It appears that the comment is correct, but it is irrelevant given the treatment I have given to CGT.
Otherwise the debts shown by the husband should be properly deductible against income as suggested by the wife.
P Street Pty. Ltd.
I accept the wife’s submissions on this point for the same reasons outlined above.
K Pty. Ltd.
The wife’s submissions are accepted on this point for the same reasons outlined above.
ML Manichaeus Corporation Pty. Ltd.
I do not necessarily accept, as was urged upon me by the wife, that there is any significance of parts of the bank statements being blacked out. Nevertheless, in my opinion, the amounts shown should be offset against the income for the same period and should not be included in the balance sheet.
Manichaeus Pty. Ltd.
The comments made above about debts generally apply equally in relation to this entity. However, in relation to the claim for $167,313.56 for the C Centre, it appears that this is an expenditure of the nature of a capital expense and, in my opinion, is not properly acknowledged by the wife and should be added into the liabilities. I make this finding notwithstanding the husband’s lack of detailed explanation as to when the centre will, indeed, actually open.
L Pty. Ltd.
Again, I am not satisfied about the issue of disclosure raised by the wife in her submissions. However, I am satisfied that the debts otherwise ought properly to be offset against income and not included in the balance sheet.
Summary of liabilities
This means therefore that the total liabilities are as follows:
Liabilities of each entity Value Husband (personally held) $858,998.59 M & L Pty. Ltd. $9,138,148.00 Manichaeus Constructions Pty. Ltd. $1,300,000.00 P Street Pty. Ltd. $2,084,000.00 Manichaeus Pty. Ltd. $167,313.56 Total $13,548,460.15
Therefore, the net assets of the parties based on my findings have a value of $3,558,539.85 (Total Assets $17,107,000 – Total Liabilities $13,548,460.15 = $3,558,539.85). I round this up to $3,559,000.
To indicate that I have not overlooked the claim by the husband that there should be expenses deducted in respect of real estate agency commissions for the sale of properties if they should occur in the future I make the following additional comments. Whether or not any of the properties are to be sold, and when they are to be sold, and the sale price such properties fetch when they are sold, are matters which are not known to me from the evidence before me.
Even if this information was before me, then, in my opinion, in this case it would not be appropriate for such commissions to be taken into account given that on the evidence of the husband and his past business activities it is at least possible and almost probable that the sales would be effected through his own real estate agency, or perhaps through one of the companies of the Manichaeus Group. In such circumstances, it would merely be the transferring of funds from “one pocket to another.” Accordingly, I decline to take into account any potential real estate agency commissions as a liability of the parties.
Contributions
This was a relationship or marriage which lasted about 14 or 15 years.
At the beginning of the relationship, the parties apparently had very little and all of the wealth of the parties and the raising and caring for the children happened substantially within that period.
The wife was engaged in independent employment initially, and then employment in the business, and was raising the children. Her contribution in this regard was appreciated by the husband as appears from the following quotation from part of his final submissions to the Court:[27]
…she is a fantastic mother, your Worship, fantastic mother. It was circumstances we are separated and it was but there is absolutely nothing wrong with her. She is the loveliest woman around, never was a problem with her and she can look after the kids properly, but don’t take me out of the picture.
[27] Transcript of proceedings, 29 January 2010, 188.
There is no doubt that the husband regarded, and regards himself, as an exceptional entrepreneur whose abilities had constructed an “empire” or perhaps more appropriately, a “kingdom.”[28] Most of the hearing was occupied with trying to determine what the boundaries of the kingdom actually were. There were arguments about valuations, about how properties have been disposed of, about liabilities, and there was also, as a subsidiary argument in relation to liabilities, an argument that the debt owed by the parties (in their various manifestations) was increased in an unexplained way. It was suggested from time to time that there should be an add‑back in the order of some millions of dollars.
[28] The husband referred to himself sometimes during the proceedings as the “King of [a Canberra suburb]”: Transcript of proceedings, 2 July 2009, 153.
Leaving aside any question of waste, it seems to me that, notwithstanding the high opinion the husband has of his own abilities, it could not properly be said that they fell within any special category, at least in the Ferraro sense. While the wife was performing exceptionally (as the husband records) as a wife and mother, the husband was carrying out his job as only he could and as well as he might.
In the end, as appears from an analysis of the pool of property, there are substantial assets still for division. They may have been greater. The husband may be right and if the parties had not engaged in their battle, there may have been more available for division between them. However, the parties have not been able to agree from day one of the proceedings. Accordingly, that failure to agree, coupled with the dynamics of the dispute, substantially fuelled by the inability or refusal by the husband to provide appropriate information has meant that there is less to divide between the parties.
I should perhaps add parenthetically the husband sincerely believes, in my opinion, that he has done everything he possibly can to provide information for the purposes of the final hearing. He so protested on many occasions during the course of the proceedings. The reality, however, is that if he had complied with the directions before the hearing began, the hearing would have been much shorter; the processes would have been much more straightforward; and the confidence with which I could make findings about various matters would have been substantially enhanced. Indeed, in the quotation adopted in my interlocutory Judgment of 16 March 2010 from Justice McHugh in Gallo v Dawson, “[l]ack of legal knowledge is a misfortune, not a privilege.”[29]
[29] Gallo v Dawson (1990) 93 ALR 479, 481.
In conclusion, in considering the contributions, bearing in mind the husband’s assessment of the contributions of the wife (as recorded above), her own evidence about this matter and what she has done and the way in which she has been the primary caregiver for the children, and looking at the overall picture so far as the husband is concerned, on a “qualitative evaluation”, the parties’ contribution during the course of their relationship should be regarded as equal.
The wife’s primary contribution as homemaker and parent has continued. The husband has continued to manage the kingdom. I do not see anything in the evidence about what has happened since separation that I should make an adjustment in favour of the husband for his post-separation contribution or to regard any post‑separation actions by the husband as being other than offset by the continuing contribution by the wife as homemaker and parent.
Exhibit W10=NAB borrowing facilities as at September 2007
| Date | Particulars / event | Source |
| 1989 | Parties commence cohabitation | W#2 |
| 1989 | [Manichaeus Services] commences Wife contributes $5000 to [Mr Manichaeus’s] business | W#5 |
| 23 June 1990 | Parties marry | W#2 |
| 15 April 1993 | Parties purchase [Property 1] for $167,000 | |
| […] July 1993 | [L] born (now 16) | W#3 |
| July 1993 | Shortly after the birth of [child] wife commences working in the business as receptionist and office administrator | W#7 |
| Wife works 30 - 35 hours as Office Manager between pregnancies | ||
| […] April 1995 | [U] born (now 14) | W#3 |
| August 1996 | Parties purchase [Property 2] for $180,000. Wife's parents loaned the parties $40,000. | W#10 |
| 1996 | Parties rent out [Property 1] | W#14 |
| Dec 1996 | Wife stops work to care for the children | W#8 |
| […] May 1997 | [E] born (now 12) | W#3 |
| 19 February 1998 | [D Street, N property] purchased for $925,000 - retail shop premises [Valued by Husband in 2005 at $4m with income of $320,000 p.a.] Current value $3,400,000 (CB Richard Ellis Dec 2009) | W#22 |
| […] February 1998 | Husband establishes [M & L] Pty Ltd | |
| […] July 1998 | Husband establishes [Manichaeus Constructions] Pty Ltd | |
| 16 November 2000 | Purchase of [Property 4] for $215,000 | W#12 |
| 2001 | Wife re-commences working in the business once [E] commences pre-school - wife manages the residential rental properties | W#18 |
| 1 March 2001 | Purchase of [Property 5] for $150,000 | W#12 |
| […] August 2001 | [Manichaeus] Pty Ltd created | |
| […] Feb 2002 | [P Street] Pty Ltd created | |
| 2002 | [M Street, N] - commercial office space leased to [government department] [Valued by husband in 2005 at $2.2m with income of $180,000 p.a.] Current value $3,140,000 (Egans July 2009) | W#22 |
| 22 January 2003 | Purchase of [Property 7] for $350,000 | W#12 |
| January 2003 | Purchase of [Property 8] for $385,000 | W#12 |
| 11 February 2003 | Purchase of [B Street property] for $445,000 (became the family home) | W#12 |
| 1April 2003 | Sale of [Property 2] for $480,000 (former family home - never rented) | W#10 |
| 1 May 2003 | Purchase of [N Street, F] for $282,500 | W#12 |
| 1 July 2003 | Purchase of [Property 11] for $395,000 | W#12 |
| 10 July 2003 | Sale of [Property 7] for $483,000 | W#12 |
| 4 July 2003 | Sale of [Property 4] for $411,000 | W#12 |
| 28 July 2003 | Purchase of [7 O Street, N] for $640,000 [Valued by husband in 2005 at $950,000 with income of $70,000 p.a.] Current agreed value $1,000,000 (HTW for ANZ) | W#22 |
| 2003 | [5 O Street, N] - vacant land - intended to develop it into a shopping mall [Valued by husband in 2005 at $3m] Current agreed value $1,200,000 (HTW for ANZ) | W#22 W1#16(d) |
| 1 August 2003 | Purchase of [Property 14] for $395,000 | W#12 |
| August 2003 | Purchase of [E Street, F] for $455,000 | |
| 1 February 2004 | Purchase of [Y Street, F] for $355,000 | W#12 |
| 23 March 2004 | Parties sell [Property 1] for $380,000 | W#12 |
| 31 July 2004 | Purchase of [A Street, F] for $405,000 (wife occupies this home which is owned by [Manichaeus Constructions Pty Ltd]) | W#12 |
| 31 July 2004 | Parties separate - wife moves out of [B Street] Husband told wife the parties had net assets of over $6m | W#2 W1#17 |
| July 2004 | At separation the parties had 4 commercial properties with value of $8,740,000 (Husband valued these at $10,150,000) and 9 residential properties with value of $3,267,500 a total of $12,007,500 Debts are unknown however by November 2005 the parties had debts of only $4,100,000 according to husband (Exhibit W8 - RSM Bird Cameron letter) Net equity was $7,907,500 | |
| 1 Sept 2004 | Purchase of [Property 18] for $358,500 | W#12 |
| October 2004 | [Manichaeus Services] sold for $250,000 plus stock Husband has failed to produce documents relating to the sale | W#9 |
| 11 February 2005 | Sale of [Property 11] for $456,000 | W#12 |
| February 2005 | Husband commences share trading - fails to disclose this in any financial documents | |
| 7 July 2005 | Purchase of [1 P Street, P] for $354,950 | W#12 |
| 22 September 2005 | [Manichaeus] Group business name registered | |
| 29 November 2005 | Letter from RSM Bird Cameron to Bank of Cyprus Parties have following assets and liabilities: [M & L Pty Ltd]:- $10.15m assets - $2.7m debts - Net =$7.45m [The husband]:- [Manichaeus Services] (sold Aug 04) Net = uk [Manichaeus Constructions]:- $2.75m assets - $1.4m debt - Net =$1.35m [P Street Pty Ltd] - had never operated TOTAL NET ASSETS $8.8M | NAB ExhW8 |
| 29 November 2005 | [Property 5] sold for $460,000 | W#12 |
| 10 April 2006 | [ML Manichaeus Corporation] Ply Ltd created | |
| 4 May 2006 | Purchase of [6 O Street, N] for $740,000 | W#22 |
| 10 May 2006 | Sale of [Property 8] for $400,000 | W#12 |
| 15 June 2006 | [Units 1 and 2, O Street, N] purchased for $700,000 | W#22 |
| 6 July 2006 | Sale of [Property 14] for $420,000 | W#12 |
| 19 December 2006 | Ms Clifford writes to husband seeking list of assets and liabilities | Letter |
| 3 May 2007 | Wife files initiating application | |
| 30 May 2007 | Ken Cush & Associates files Notice of Address for Service for the husband | |
| 10 June 2007 | Purchase of [5 P Street, P] for $400, 000 | W#12 |
| 12 June 2007 | Consent Orders made | |
| 4 July 2007 | Purchase of [3 P Street, P] for $410,000 | W#12 |
| 2007 | Purchase of [Units 1-4, W Street, N] - retail shop premises for $1.7m | W#22 |
| September 2007 | Husband's borrowing facilities with NAB reaches $10,110,564 with funds available to complete [P Street] amounting to $12,430,564 Husband purchases $4,663,450 in additional commercial properties and disposes of residential property valued at $1,736,000 without the consent of the wife and [Services] business for $250,000 Borrowings increase by $6m to $8m in purchasing net property of $2,927,450 Husband engaged in significant amount of share trading not disclosed | Exh W10 |
| B/w August 2007 and 12 March 2008 | Several Conciliation Conferences scheduled but adjourned by consent | |
| 14 February 2008 | [K] Pty Ltd established | |
| 12 March 2008 | Orders made by Consent | |
| 29 April 2008 | Purchase of [7 P Street, P] for $525,000 | W#12 |
| […] September 2008 | [C Facility] business name registered | |
| […] September 2008 | [C Centre] business name registered | |
| 22 September 2008 | Conciliation Conference - husband fails to complete financial statement | |
| 22 September 2008 | Registrar Parker requires husband to complete financial Husband's statement - completed in handwriting Financial Discloses assets of $19m and liabilities of $15m Statement QA50 - husband draws salary of $150,000 QA55 - $1.5m not particularised | Husband’s financial statement |
| 22 September 2008 | Leave granted by Registrar Parker to issue subpoenae to NAB and ANZ | |
| 29 September 2008 | Husband files response | |
| 29 September 2008 | Husband files further financial statement | |
| 30 September 2008 | Orders for further disclosure made by DCJ Faulks | |
| 30 September 2008 | Husband claims debts of $12,995,576 | Letter undated approx 30/0/08 |
| 9 October 2008 | Husband re-finances with ANZ ANZ values properties in [Manichaeus Group] at $22,716,000 and husband refinances in the amount of $14,300,000. ANZ determines net equity is $8,416,000. Only additional purchase is $525,000 for [7 P Street, P] | ANZ ExhW6 |
| 20 October 2008 | ANZ settlement statement indicates NAB mortgage debts were $13,345,967.89 and were discharged. In evidence husband admits that he used the extra $1 m advanced to him to trade shares and lost $500,000 | |
| 24 October 2008 | Husband advises ANZ in writing to transfer $300,000 from [M & L Pty Ltd] to ABN Amro (to purchase shares) - uses company money - no separate loan account raised | |
| 3 November 2008 | Husband advises ANZ in writing to transfer further $300,000 from [M & L Pty Ltd] to ABN Amro (to purchase shares) | |
| 18 November 2008 | Orders for further disclosure made by DCJ Faulks | |
| 27 November 2008 | Orders made by DCJ Fauiks for affidavits and market appraisals | |
| 23 December 2008 | Wife first consults Lessli Strong & Associates (LSA) | |
| 6 January 2009 | Purchase of [K Street] for $437,000 yet husband borrows $450,000 | W#12 |
| 20 January 2009 | Lessli Strong & Associates files Notice of Address for service | |
| […] January 2009 | Husband creates [L] Pty Ltd | |
| […] January 2009 | [L Business] business registered under [L] Pty Ltd | |
| 12 February 2009 | Orders made by DCJ Faulks joining husband's companies and requiring parties to complete joint balance sheet after receiving market appraisals | |
| 25 February 2009 | Wife files amended application | |
| 4 March 2009 | [R] business name transferred to [ML Manichaeus Corp] | |
| 5 March 2009 | Letter from [husband] to [L Pty Ltd] warns of "volatile commercial risk" if ANZ subpoenaed - no previous disclosure of [K Street] - He did not have $12,000 for market appraisals | |
| 10 March 2009 | Letter from LSA to [husband] requesting appointment of single expert – [husband’s] response - single expert of no value - more time needed for appraisal | |
| 11 March 2009 | Order made by DCJ Faulks for solicitors to settle joint balance sheet - Husband through his solicitor agrees to adopt the ANZ bank valuations | |
| 13 March 2009 | Joint balance sheet filed - husband resiles from accepting ANZ bank valuations Husband files a balance sheet - no mention of shares | |
| 14 April 2009 | Husband claims non disclosure of shares was an oversight - he was working to reduce debt | |
| 17 May 2009 | Sale of [N Street, F] for $404,000 Proceeds of sale not accounted for | |
| 28 May 2009 | Letter from LSA to [husband] requesting he not withdraw funds without notice to LSA | |
| 3 June 2009 | Letter from LSA to husband requesting full financial disclosure | |
| 4 June 2009 | Letter from [husband] to LSA request for disclosure will take 2 weeks - refuses to agree to injunction - warns that Subpoena to ABN Amro will create "adverse business tension" - a forced sale will result in Bank receivership | |
| 4 June 2009 | Husband sells [N Street, F] for $429,000 | |
| B/w separation and May 2009 | Husband has disposed of $2,140,000 in residential separation properties and his [services] business for $250,000. Husband purchases commercial properties for $5,188,450 and increases level of debt from $4.1m to $14.3m | |
| 10 June 2009 | [ML Manichaeus Corp] has $563,465.32 in equities with a balance of $294,220.39 Income earned $11,669 Husband had traded $71,461,000 | |
| 19 June 2009 | Husband files application in case to vacate hearing date - Husband serves wife with market appraisals purporting to be "valuations' | |
| 19 June 2009 | Orders made by DCJ Faulks restricting use of market appraisals | |
| 19 June 2009 | Wife files an affidavit annexing an email "I have a plan" of [the husband’s] plan to obtain valuations which reveal the parties have no equity | |
| 30 June 2009 | Husband serves wife's solicitor with an affidavit and 3 volumes of documents of about 1500 pages | |
| 1 July 2009 | First day of the hearing | |
| 2 July 2009 | [Ms MY] gave evidence of valuation of [M Street, N] and [W Street, N] - the only two properties in Issue | |
| 3 July 2009 | Hearing adjourned part heard until 8 July 2009 | |
| 8 July 2009 | [husband] claims to be sick - matter further adjourned to 24th July 2009 Airport watch orders made | |
| 24 July 2009 | Continuation of hearing Husband during cross examination at about 3.00 p.m. hands to the Court a further affidavit with a folder with 280 pages of Annexures. Hearing adjourned to a date to be fixed DCJ Faulks makes Order 7a indicating his intention to made orders for transfer of [A Street, F] to wife and invites ANZ bank to intervene | |
| 24th July 2009 | Without the consent of the wife husband sells [Y Street, F] for $480,000 Proceeds of sale not accounted for | |
| 1 September 2009 | Interlocutory hearing - ANZ file a response and affidavit seeking to be joined in proceedings - Orders made | |
| 19 October 2009 | Continuation of hearing. [Husband] admits to an application for a "sophisticated share trader" and claims on the form to have traded $130m in shares between 2005 and 2008 and recently between 2008 and March 2009 [ML Manichaeus Corp] 80m (see Exhibit W16). [Husband] cross examined. During re-examination [husband] produces current ANZ share account. [Husband] advised the Court he had disposed of leveraged equities of $138,261 deposed to in his affidavit. [Husband] raises for the first time a dispute over the value of [D Street, N] | Exh W16 |
| 20 October 2009 | Continuation of hearing – [Husband] disputes value of [D Street] and [K Street] for first time. Matter adjourned to 18'h December 2009 - Orders for the valuation of the 2 properties. Orders made for transfer of [A Street, N] to the wife unencumbered | |
| 21 October 2009 | Continuation of the hearing - adjourned to 18 December 2009 | |
| 6 November 2009 | Wife's solicitor issues subpoena to ANZ bank for production of bank statements for the [Manichaeus] Group | |
| 10 November 2009 | Wife's solicitor sends husband transfer form in respect of [A Street] | |
| 18 November 2009 | Court issues draft orders regarding findings of facts in respect of the asset pool | |
| 25 November 2009 | Court confirms orders were made on 20October 2009 for husband to sign all documents to transfer to the wife [A Street] | |
| 3 December 2009 | ANZ bank confirms in writing that there is no impediment to [A Street] being transferred to the wife and released as security for the debts of the [Manichaeus] Group | |
| 7 December 2009 | Husband instructs ANZ bank to deduct $39,180.49 in legal fees owed to ANZ from his overdraft account | |
| 14 December 2009 | Wife files application in a case for the Registrar to execute the transfer documents to effect transfer of [A Street] | |
| 14 December 2009 | Husband files a further affidavit containing 480 pages | |
| 18 December 2009 | Hearing date vacated | |
| 18 December 2009 | [E Street, F] sold of $628,000 Husband fails to account for proceeds of sale | |
| 21 December 2009 | Interlocutory application - Orders made that Registrar sign transfer documents | |
| 28 January 2010 | Continuation of hearing |
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